We’re hearing more about layoffs in E&Y’s North Central offices today. The chatter is that cuts are now hitting advisory professionals in Detroit, Toledo, and Cincinnati. Our source indicated that it was 2 – 3 professionals in each office which puts the total number of layoffs in the region over 30 since this latest round started last month.
Rumor also has it that the Columbus office — home of dollar beer night — could also get into the axe swinging but we’re scant on details at this point.
These cuts in the advisory practice would be the first we have heard of since the dozen layoffs (that we confirmed) in the Pacific-Northwest.
Continue to keep us updated with the specifics.
Earlier: (UPDATE) Layoff Watch ’09: Update on Ernst & Young
Author: Caleb Newquist
Founding editor, Going Concern.
Patrick Byrne May Say Something That Will Antagonize You
The Patrick Byrne Express (via Segway, natch) pulled over from its nationwide auditor search to pen the latest triumph in his quest to refute every Overstock/Patrick Byrne hater on the planet.
Patsy’s latest letter informs us of the settlement that Overstock has reached with Rocker Partners, one of those short-selling hedge fund haters, for $5 million.
His masterpiece opens with “The good guys won” and then rambles on to tell us how he feels about pretty much everyone in financial media. And that’s what this was really all about. It wasn’t about the money, you fools. This was about exposing the anti-Overstock/Patrick Byrne contingent:
What is of vastly greater significance than this $5 million payment, however, is an examination of the cover-up conducted by elements of the New York financial press. Taking the lead was CNBC, which spent a great deal of airtime downplaying the significance of this suit, vilifying me, and smearing Overstock.
Apparently, this is just the beginning. Prime brokers, sounds like you’re next.
And just so you know, PB and his company don’t give a damn if you, the SEC, or anyone else for that matter gets bent out of shape about them spreading the truth. As Floyd Norris rehashes some of the trubs going on in casa de Overstock, he notes this little treasure from the company’s unreviewed 10-Q:
Public statements we or our chief executive officer, Patrick M. Byrne, have made or may make in the future may antagonize regulatory officials or others.
We and our chief executive officer, Patrick M. Byrne, have from time to time made public statements regarding our or his beliefs about matters of public interest, including statements regarding naked short selling. Some of those public statements have been critical of the Securities and Exchange Commission and other regulatory agencies. These public statements may have consequences for us, whether as a result of increased regulatory scrutiny or otherwise.
Sounds like fighting words to us. Go ahead and bring it, SEC. Patrick Byrne will be waiting.
Overstock Claims Victory [Floyd Norris/NYT]
Job of the Day: Spanish or Portuguese-Speaking Auditors Report
Today on the job hunt we bring you an audit associate position at BNY Mellon in Boston. Bonus points for those of you that are fluent in Spanish or Portuguese. Check out the details after the jump.
Company: BNY Mellon
Location: Boston
Title: Audit Associate
Description: Performs high quality, risk-focused fieldwork, in accordance with Internal Audit policies, methodologies and standards, in order to identify meaningful issues, risks and other exposures in the Asset Management sector.
Qualifications: Three to six years of relevant auditing experience preferably in Asset Management or related financial services areas, preferably working towards CPA, MBA, and/or CIA designation or already qualified. Fluency in Spanish or Portuguese would be an asset.
Check out entire description over at the GC Career Center and visit the main page for all your job search needs.
SEC to CPAs: Consider the Investors or You Will Be Dealt With
Servants of the capital markets, in your day to day activity have you been thinking about the investors out there that depend on you? What they need? What they want? Do you really know them? If not, the Chief Accountant would like you to start, pretty please:
Securities and Exchange Commission Chief Accountant James L. Kroeker told leaders of the accounting profession that independent auditors will be expected to consider the interests of the “investing public” — not just their audit clients — when performing their duties.
The mission of his office will be to “put investor protection at the forefront in all that we do,” he said in an address to the American Institute of CPAs’ National Conference on SEC Developments.
Under his watch, “you are likely to notice we will be more proactively seeking to understand and discuss the views of investors.” Accountants “should not be surprised when we ask you whether you have considered the perspective of the investing public.”
He does think that majority of you are a-okay and “are honest hard-working professionals who simply want to ‘do the right thing,'” but dang it, are you sure you’re thinking about investors? All the time? Like, right this second? That’s your job, you know. The OCA just wants to jump your shit remind you.
And if you’re not thinking about investors, you’ll be dealt with professionally but don’t confuse that with a regulatory rollover. Expect something more along the lines of wishing you were never born:
“You should not confuse professionalism with a notion of leniency. Those who fail to live up to their responsibilities and those who cause harm to investors or our capital markets can expect that we will take appropriate action.”
Got it? The SEC dream team will deal with you that don’t start taking this shit seriously. You see those crazy-eyes? You think he’s joking? Now get back to it, with investors on the brain.
SEC Chief Accountant Tells CPAs to Consider Investors [Web CPA]
Are RSM McGladrey and McGladrey & Pullen Getting Back Together?
Maybe! For those of you looking for any ray of hope of RSM McGladrey and McGladrey & Pullen making nice, consider this your sign.
H&R Block, the parent company of RSM, announced yesterday that they, “[expect] a dispute regarding a subsidiary’s deal with an accounting firm to provide consulting to midsized businesses will be settled soon.”
Block CEO Russ Symth also told us yesterday that while nothing is official he’s pret-tay, pret-tay, prety-tay optimistic that the two firms will be able to kiss and make up:
“We are very optimistic that this is going to be settled within a few weeks,” Block CEO Russ Smyth told investors during a meeting after Block released its second-quarter financial results earlier Tuesday.
He warned, however, that while it appeared the matter would have a good outcome, “We are not across the finish line yet.”
We’ll go on record that we’re rooting for the firms to get back together. Reconciliation makes for a heartwarming story during the holiday season. Especially since we’ve learned that not even an insanely rich celebrity athlete and a Swedish model don’t seem meant to be.
Prior to any official reconciliation between the firms, several questions are worth mentioning: 1) What’s Natalie’s opinion? 2) Is RSM buying M&P a huge rock, a house in Sweden, or performing some other demonstration of materialistic love as part of the reconciliation? 3) How will the make-up sex work? Will M&P even go there? D) See #1.
If you’ve got thoughts on any of these questions or if the RSM/M&P troops have feel like talking about their firms’ chances of making it work, discuss in the comments.
H&R Block Subsidiary Nears Settlement With Auditor [AP via ABC News]
Prior GC Coverage of RSM McGladrey/McGladrey & Pullen Drama:
RSM/McGladrey & Pullen: ‘Breaking Up is Like Pushing Over a Coke Machine’
McGladrey & Pullen Might Want to Think This Whole Divorce Thing Over
H&R Block is Not Letting McGladrey & Pullen Leave Until They Talk About This
McGladrey & Pullen Doesn’t Love H&R Block Anymore
Preliminary Analytics | 12.09.09
• Geithner Said to Be Seeking TARP Extension Until Next October – Timmay is expected to scribe a letter to Congress letting them know about the little extension. [Bloomberg]
• Standard Chartered Sees No ‘Material’ Impairments in Dubai – Let’s remember this for future reference. [WSJ]
• Lessons Lost – Gary Weiss links to GC in his remembrance of Enron. Does anyone else remember Enron? [Portfolio]
• Obama’s Stimulus II – BO wants to help small business by letting them “eliminate capital gains taxes on the sale of small firms, allow them to continue to expense capital investment, and give them tax breaks for hiring new workers.” Sounds nice but Howard Gleckman says, “It’s a bit like throwing a drowning man a 64-inch flat panel TV. He might love to have one, but not right now.” [Tax Policy Center]
• U.S. SEC Sues to Freeze Assets Of ‘Ponzi Scheme’ – Rockford Funding Group LLC, come on down! [DealBook]
Review Comments | 12.08.09
• Allyson Baumeister Elected to Board of Directors, American Institute of Certified Public Accountants – The best perk of such a position would be the opportunity to rub elbows with Ben Bankes. [Sanford Baumeister & Frazier Press Release]
• Audit Committee Comp Influences Auditor Support – “The study found that audit committee members are more likely to support the auditor, as opposed to management, in an accounting disagreement when audit committee compensation includes long-term stock options.” [Web CPA]
• The Mid-Quarter Trap – More year-end wisdom from Joe Kristan. [Tax Update Blog]
• GM board moving fast on CEO, CFO hires – Spencer Stuart is on the hunt if you’re interested… [Reuters]
• G.M. Will Consider Lump Sum Payment to U.S. – …but you’ll have to deal with this. [DealBook]
Thanks to This Week’s Advertiser
A quick word of thanks to this week’s advertiser on Going Concern:
• Verizon Wireless
If you’re interested in advertising on Going Concern, email us at advertising@breakingmedia.com. Thanks!
Just When You Thought All Hope Was Lost
A Festivus miracle! After we raised concerns last month that the likelihood of any PwC office having a Christmaskuh bash was nil, we’re now aware of at least one jamma-lamma-ding-dong:
Okay, it’s just the tax practice and it’s only two hours but hey, it beats the hell out of an ordinary Tuesday. Those in the audit practice will just have to crash the thing.
A word of caution however: with everything that’s gone on up in Stamford don’t knock back the Glens or white wine with anyone you don’t trust. Who knows what somebody is dropping in your cocktail.
The FASB Buckles
Bob Herz must be feeling a little blue now that his buddy Tweeds announced that he is hanging up his eyeshade.
This melancholic state has apparently led Herz to the conclusion that it’ll be okay to let banking regulators “use their own judgment” when it comes to letting banks stray from almighty GAAP:
“Handcuffing regula orting GAAP to always fit the needs of regulators is inconsistent with the different purposes of financial reporting and prudential regulation,” Mr. Herz said in the prepared text.
“Regulators should have the authority and appropriate flexibility they need to effectively regulate the banking system,” he added. “And, conversely, in instances in which the needs of regulators deviate from the informational requirements of investors, the reporting to investors should not be subordinated to the needs of regulators. To do so could degrade the financial information available to investors and reduce public trust and confidence in the capital markets.”Mr. Herz said that Congress, after the savings and loan crisis, had required bank regulators in 1991 to use GAAP as the basis for capital rules, but said the regulators could depart from such rules.
Herz is calling it “decoupling” of the rules which sounds a hell of a lot like “the rules are the rules only when they don’t work out so well for banks.” Not sure about anyone else but it sounds like Herz is caving to political pressure after insisting that everyone butt out.
Because if we read that correctly, any time banking regulators are feeling sketchy about the market’s ability to put value on the banks’ assets, they’ll just call a time out on fair value with no ringing up the FASB, auditors, or anybody else to get a permission slip?
Will banking regulators even know when the market is being irrational? If you were to ask JDA, she’d probably say, “No fucking way.”
A less irreverent but similar point of view from Daniel Indiviglio at the Atlantic:
I worry that if regulators are provided this flexibility, then they will always suspend mark-to-market accounting when a crisis hits. But in cases where the market permanently corrects the value of assets downward, their values would remain elevated in the regulators’ eyes. Then, once the crisis appears to improve, banks will eventually cause a sort of secondary crisis when they are forced to begin realizing the decline in the value of those assets.
Moreover, I worry about how investors will react to this change. Imagine you’re an investor. A crisis hits, and regulators step in to suspend mark-to-market accounting for a bank you own equity in. Are you worried? I sure would be — regulators were so concerned about the bank’s assets that they felt forced to suspend mark-to-market accounting! As an investor, I’ll still do my own math to figure out what I think the bank’s assets are worth. So investors might dump the stock anyway, endangering the value of the institution despite this move by regulators.
So it’s fair value unless we’re in a potential shit + fan situation. In the off-chance that the regulators recognize the impending disaster, they’ll tell the banks to forget fair value for now. Then once everything is hunky dory, we go back to fair value. Whatever, we’re over it.
Board to Propose More Flexible Accounting Rules for Banks [Floyd Norris/NYT]
Should Regulators Be Able To Suspend Accounting Rules? [The Atlantic]
Also see: Decouple US accounting rules, bank regulation-FASB [Reuters]
Chairman of PwC India Steps Down, Wants Time to ‘Look at Other Things’
This is the latest development in the Satyscam that P. Dubs hasn’t been able to wish away.
Ramesh Rajan still had a ways to go in his current four year term as the India Chair which might suggest that someone told Ram that his services were no longer needed:
Rajan, who was at the helm of affairs when the Satyam scam broke early this year, had about one-and-a-half years remaining of his four-year tenure as the chairman of PricewaterhouseCoopers India network of entities (PwC India). When contacted, he refused to divulge exact reasons behind his sudden exit, and said he wanted time to “look at other things” within the firm and “allow someone else to take charge of the operations.”
Gosh, that’s a little mysterio. Apparently he was having such a good time that he wanted someone else to experience the fun? Okay then. The new lucky duck is Gautam Banerjee, and he is coming over from Singapore pronto to take the wheel.
We’re confident he’ll do a bang-up job but we’ll take this opportunity to remind him that he’s still got some auditors in jail and a lot of pissed investors that want PwC to pony up. Probably should get crackin’.
Satyam effect? Chairman of PwC India steps down [Times of India]
Job of the Day: Hate the Cold? Move to Florida
Global warming? Bah. Over half the country is experiencing inclement weather.
That’s a perfect excuse to move to South Florida. Analytic Recruiting has a Manager of Derivatives Accounting position that is offering a “generous relocation” to Palm Beach. Check out all the details after the jump.
Title: Manager – Derivatives Accounting
Location: Palm Beach, FL
Description: This position will manage accounting and control for all of the firm’s trading and hedging activities.
Responsibilities: Managing hedge effectiveness strategies for Energy Trading; oversee all accounting and financial statement activities [FAS 133, FAS 157 and FAS 161 and FX and Commodity hedge analysis].
Requirements: BS in Accounting or Finance, and at least 5 yrs of derivatives accounting experience and be very comfortable with FAS 133, FAS 157 and FAS 161. A CPA is strongly preferred.
Check out the entire job description over at the GC Career Center and check out the main page for all your job search needs.