We got a suggestion from a reader to solicit some discussion regarding your firms’ encouragement to donate to their preferred non-profit organization this holiday season.
This happens every year and the “browbeating” (as our reader put it) usually starts early and you are kindly reminded of your opportunity “to make a difference” quite often via emails, voicemails, face-to-face intimidation meetings and more emails.
Since the celebration of Christmaskah, Festivus, and general merriment has already gotten the kibosh in favor of the firms’ commitments to charity, one would think that TPTB at your firm would be less insistent about your personal donation to a specific charity but…we don’t know.
So kindly discuss your firm’s plans to encourage your participation this holiday season and if you plan to participate or if the freezing is contagious.
Author: Caleb Newquist
Founding editor, Going Concern.
Maybe Everyone’s Expectations of the IRS Are Too High
The mother of all auditors, the Government Accountability Office, had heard some complaints that maybe the IRS wasn’t doing such a bang-up job on the whole Phase two.
After snooping around, the GAO issued a new report that explained that the IRS needs to work on explaining just what it is they do an why they do it.
Web CPA:
The IRS has no documented objectives for the notice phase and no performance measures to indicate how well the phase is performing in resolving debt cases or achieving other desired results…
…However, in almost all cases, for the five business rules the IRS identified as affecting the most taxpayers, the IRS did not have information on the date the rules were established, the rationale for the rule, or data supporting the rationale…
…IRS collection officials also lacked documentation describing the business rules and how they operate. Further, even though IRS officials estimated that the business rules had been established for years, IRS had documentation for an evaluation of only one of the five business rules.
Let’s recap:
• “…no documented objectives…”
• “…did not have information on the date the rules were established, the rationale for the rule, or data supporting the rationale…”
• “…lacked documentation describing the business rules and how they operate.”
• “…documentation for an evaluation of only one of the five business rules.”
Apparently this is one of those cases where the Service says, “Trust us, we have a plan. But don’t ask us to explain it, we wouldn’t want to bore you. Oh, and don’t ask us how well it’s working. We don’t get too hung up on statistics or success rate.”
We’re just talking about tax dollars after all.
IRS Has Trouble Tracking Debt Collection Notices [Web CPA]
Another Lawsuit Against Deloitte Is Back from the Dead
Deloitte has another lawsuit on its hands that is seemingly back from the dead. After last week’s revival of the Washington Mutual shareholders’ lawsuit, a suit in New York has gained new life after Deloitte initially won a dismissal.
The plaintiff in the case, Symbol Technologies, is proving tenacious:
…the panel found that Symbol Technologies had sufficiently alleged that the “continuous representation” exception to the statute of limitations and the company’s amended complaint “trigger[ed]” the “adverse interest” exception to the in pari delicto doctrine.
“Symbol’s pleading is sufficient to establish that the parties mutually contemplated that Deloitte’s work and representation for each audit year would continue after the issuance of the audit opinion/report and, therefore, the continuous representation doctrine applies,” Justice Leonard B. Austin wrote for the 4-0 panel in Symbol Technologies v. Deloitte & Touche, 2008-06642.
He later added, “In its amended complaint, Symbol set forth sufficient allegations that members of its senior management committed accounting fraud for their own benefit and totally abandoned its interest, thereby triggering the adverse interest exception.”
Nothing too fancy. Just a good, old-fashioned case of senior management fraud not being detected by the auditors:
Symbol’s lawsuit against its former auditing firm stems from an accounting-fraud scandal at Symbol that culminated with the technology giant agreeing to pay the Securities and Exchange Commission $37 million and shareholders an additional $100 million.
The SEC had charged Symbol, a Long Island, N.Y.,-based supplier of mobile information systems, and 11 of its former executives with numerous fraudulent accounting practices that together overstated the company’s reported revenue for the fiscal years of 1998 through 2001 by more than $230 million and its pre-tax earnings by more than $530 million.
The fraud resulted in overpayments to Symbol’s senior management of more than $100 million.
At least eight former Symbol executives have pleaded guilty to various charges stemming from the fraud. The company’s former chief executive, Tomo Razmilovic, remains a fugitive, living in Bussevik, Sweden.
Symbol sued Deloitte & Touche, now known as Deloitte, in November 2005, alleging the “Big Four” auditor had failed to detect the fraud. The company’s complaint does not specify the amount of damages sought.
The amount of damages being sought by Symbol hasn’t been disclosed but you’d figure Deloitte could cough up $137 mil just to put the company back to square one. But no, Deloitte is as equally determined, saying ‘the action is without merit and intends vigorously to defend this matter’.
Sorry. With a sub-par year in revenues and breaking ground on the new Animal House, Big D can’t spare the change. We’ll see you in another ten years when this thing is finally settled.
Symbol Technologies’ Massive Malpractice Action Against Deloitte Is Reinstated [New York Law Journal vi Law.com]
Caption Contest Reminder
Don’t forget to submit your captions for last Friday’s contest. We’ll take submissions through midnight tonight and run the poll tomorrow morning.
Deadline Watch: 3rd Quarter 10-Qs
Now that you’ve enjoyed the extra hour of tomfoolery thanks to the time machine known as daylight savings time, it’s back to reality.
For auditors working on SEC filers, this means seeing less daylight from now until…well, yeah. The good news is that there’s only one week until the filing deadline for accelerated filers’ 3rd Quarter 10-Qs. For those of you on the non-accelerated types, you’ve got an extra week which could be a lifesaver or just a way to prolong…the…agony.
The bitch of the thing is that for those of you that are/will be going down to the wire, the deadlines fall on Mondays which means your weekend will likely consist of a slumber party at the client’s digs.
So for those of you that live and die by the calendar year SEC deadlines, discuss your Q3 and if it’s business as usual or if your engaging in the standard quarterly rhetoric about how you’re finding a new job right after the Q is filed.
Preliminary Analytics | 11.02.09
• Pandit ‘Near Death’ Cash Hoard Signals Lower U.S. Bank Profits – “The four largest U.S. banks by assets — Bank of America Corp., JPMorgan, Citigroup and Wells Fargo & Co. — have increased their combined liquidity by 67 percent to $1.53 trillion as of Sept. 30 from $914.2 billion in June 2008, before Lehman’s collapse, according to the companies’ third-quarter reports.” [Bloomberg]
• Sarbanes-Oxley 404(b): Auditors’ Reports on Internal Controls — A Shot in the Arm, or a Poke in the Behind? – “Veteran readers here know my deeply skeptical view that Sarbox was never more than a knee-jerk political feel-good exercise – going back to my July 20, 2002 column in the International Herald Tribune: ‘any legislation receiving the bipartisan margin of 97-0 is bound to be fundamentally defective.'” [Re: Balance]
• Zombies Among Us: The Mainstream Media and Financial Journalism – Are the MSM gobbling the Big 4 PR? [Re: The Auditors]
• CIT: A Different Kind of Bankruptcy? – If by different, you mean, “taxpayer money flushed down the toliet” then, no. [JDA]
• Delaware Beats Switzerland as Most Secretive Financial Center – The IRS’ busting up the whole secret Swiss bank thing probably didn’t hurt the First State’s run at double-secret probation banking Mecca. [Reuters via NYT]
GC Weekend: Don’t Get Spooked by Crackdowns on Leaks
Happy Halloween spreadsheet zombies! The scariest (not to mention tragic) thing we’ve heard today is that there plenty of you working today. Hopefully you’re in costume at least.
Tricks and treats aside, on this final day of October we thought we would impend some legal wisdom upon you from our sister site, Above the Law.
We realize that some of you may be hesitant to send us tips for fear of retribut That’s a legitimate worry but luckily, this issue was addressed specifically, just yesterday, by a post on ATL.
The post relates to a law firm, Wilmer Hale, that was warning its associates about leaking information about the firm:
Meanwhile, in other firm news, we got our hands on the WilmerHale warning memo that we mentioned earlier this month. Truth be told, it’s a little disappointing — not nearly as scary as we were led to believe…
…If you’re at a law firm thinking about swearing your employees to secrecy regarding their workplace conditions, proceed with caution. A reader advises us:
[I]t might be useful to note that, if the firm has put a blanket prohibition on associates discussing their working conditions, they’ve clearly violated federal law — namely, Section 8(a)(1) of the National Labor Relations Act, 29 USC 158(a)(1). See Cintas Corp. v. NLRB, 482 F.3d 463 (D.C. Cir. 2007) (“confidentiality” rule that could be viewed as banning discussion of working conditions violates §8(a)(1)); Stanford Hosp. & Clinics v. NLRB, 325 F.3d 334 (D.C. Cir. 2003) (same w/r/t rule that banned discussion of working conditions with non-employees); Brockton Hosp. v. NLRB, 294 F.3d 100 (D.C. Cir. 2002) (same w/r/t rule that banned discussions of working conditions with other employees).
If you go to the original post that is linked in the blockquote, you will see many comments from Wilmer Hale associates that are similar to some of the comments we see here:
Ifyou [sic] don’t know already, KPMG leadership has assigned an employee to monitor this website, so you might reconsider where you’re posting from.
I heard it from someone who heard it from someone that KPMG has people trolling this site to try to determine where the layoff leaks are coming from so they can can their asses too. OK so it’s double hearsay but I believe it, after all would we expect any less?
We’re positive that this Orwellian environment isn’t a concern just at KPMG. Right now people are simply scared of losing their jobs by sneezing in the wrong direction. But let’s not forget that it’s virtually impossible for your firm to monitor every communication that you send. As Lat and Elie attest:
If you think your firm even has the ability to monitor every communication that you send — including calls, texts and emails sent from your personal cellphone — then you’ve been reading too many John Grisham novels. As for your work computer, if your firm monitors everything you do on it — using a key capture program to every keystroke you type, then reviewing said keystrokes — your firm probably isn’t a very nice place to work (and needs more real work for its IT people, so they don’t have time for cyber-witch hunts).
What about compensation matters? Funny you should ask:
This is also true with respect to compensation matters — a subject of keen interest to ATL readers, especially around bonus time. From a second reader, a labor and employment lawyer (not at WilmerHale):
FYI: to the extent WilmerHale precludes the ability of associates to discuss compensation information, it may be a violation of Title VII and/or the Equal Pay Act (and possible state and local equivalents). The ability of an employee to discuss and learn about compensation issues, which allows a potential claimant to discover what others are earning and if their jobs and compensation are essentially similar so as to qualify for “equal pay” under the statute (or if illegal discrimination occurred), is an essential need…. It can also be viewed as illegal retaliation if a policy was implemented after the fact, e.g., after someone cooperated with an investigation.
So as you can see, the law is on your side. You have every right to discuss your professional lives and your employment without fear of retribution.
Thanks to everyone that has provided us with tips since we’ve gone live. We want to hear from more of you so don’t hesitate to send us any information that you think will be great to share with the rest of our readers.
We’ll run down all the ways that you can send us tips so you can contact us however you prefer:
• Our tips email: tips@goingconcern.com
• Direct message on Twitter: @going_concern
• You can direct message my personal account on Twitter here.
• Send me a message on Facebook here.
• Join the GC group on Facebook and drop a line there.
If you still have doubts, check out the posts — in their entirety — at ATL.
Have a Happy (and safe) Halloween!
Congratulations to WilmerHale on a Major Pro Bono Win
(Plus the WilmerHale warning, and thoughts on law firms trying to crack down on leaks.) [ATL]
WilmerHale Warns Associates Against Talking to ATL — But Has It Worked? [ATL]
Review Comments | 10.30.09
• Don’t forget to submit a caption for today’s contest. We’ll run the poll early next week.
• Are You Kidding Me? [Accounting Nation]
• Fuzzy Accounting Principles – Rules v. Principles[CFO Blog]
• SEC Office of the Chief Accountant Releases Staff Accounting Bulletin – Oil and gas people, get on it. [SEC.gov]
• BP Texas refinery hit with record safety fine $87 mil. [Reuters]
• In Transcripts, Madoff Called S.E.C. Exams ‘a Nightmare’ – “Mr. Madoff said that if the S.E.C. had asked for trading records or talked to the supposed counter-parties in his fake transactions, they would have found the fraud” [NYT]
Grant Thornton’s Determination to Saturate Us with Data on CFOs Knows No Bounds
Our prediction that Grant Thornton’s string of press releases related to its survey of CFOs was coming to an end was wrong. Dead wrong.
The firm issued two more today, one related to the financial services companies and one for health care organizations.
While we appreciate all the good work that GT is doing to pull all this information together, we’re definitely to the point we’d like to see something else out of GT. Some people are inspired. We’ll even take the freaky milk company.
CFO of the Week: Chen Tang
Not to mention father of the year and buddy for life.
Chen Tang, a former CFO of a private equity fund in San Francisco, is being accused of running an insider trading ring that includes friends, relatives, and his two daughters, aged 9 and 11.
Allegedly the ring made off with $8 million trading on non-public information related to Tempuc-pedic International, Inc. and Acxiom Corporation.
Tang’s daughters are considered relief defendants, as trades were carried out in brokerage accounts opened in their names. Personally we’d like to see them charged as the masterminds in this case but nothing in the complaint indicates that they knew anything about the scam.
The SEC stays on a roll with this latest bust, however this is the first case that we’ve heard of that includes minors (but still probably have maturity levels that are above Mark Cuban’s). The SEC obviously has to maintain the blind justice concept, so no mercy will be shown on the two pre-teens who probably spent the money on Miley Cyrus tickets.
The SEC’s latest haul includes two kids, aged 9 and 11… [FT Alphaville]
SEC Charges Former CFO and Six Relatives and Friends in California-Based Insider Trading Ring [SEC Press Release]
Moss Adams Values ‘A Balanced Life’ over ‘Accountability’
It’s pretty much a given that all “serious” accounting firms have “values” that they pitch to their rank and file and other interested parties.
Rumor has it that Moss Adams has recently changed the ‘A’ in their PILLAR of values from “Accountability” to “A Balanced Life”. This may or may not be a completely arbitrary change but it does put the firm out there as a work/life horn-blower.
While we applaud the attempt of accounting firms to provide a balanced life, it is certainly a debatable reality. Besides, shouldn’t a public accounting firm be accountable before it provides a balanced life? Many will make the argument that if you don’t want to work overtime for very little gratitude you should GTFO of public accounting. Can’t say we disagree.
While the thought of accounting firms having actual values is nice, sometimes brutal honesty would be really refreshing. One would think that smaller firms would have the luxury of leveling with their employees about what the culture is like.
However, judging by the switcheroo by MA, they like to do the work/life song and dance just like the big boys.
If anyone from the Moss Adams family would care to chime in on the latest switch in values, please do so. Also, for those of you at the other smaller-ish firms, let us know about your firm’s open commitment to balanced life (or lack thereof). If you work at a big firm, just complain away about your work/life balance.
Job of the Week: You Want a VP Title?
Earlier this week we told you about E&Y’s latest attempt to give its employees much-needed pat on the back. So some people are hung up on titles. Not too surprising.
If you’re one of those people — or you just need a new job — Morgan Stanley is looking for a VP of Global Accounting Standards and Control. Get the details after the jump.
Company: Morgan Stanley
Location: New York
Title: Vice President, Global Accounting Standards and Control
Job Overview: Individual will be responsible for monitoring and interpreting various emerging technical accounting issues pursuant to U.S. GAAP. Additionally, this individual will work with the various business units, and corporate functions to apply existing and evolving standards. Also, this individual will help coordinate technical guidance distributed firm wide.
Responsibilities: Monitor emerging issues through the interaction with various industry groups, liaising with certain standard setters, and discussions with Company individuals; Assist the business units/corporate functions in assessing the impact of evolving standards; Interact with business units and corporate functions related to new transactions to identify accounting issues; Apply U.S. GAAP to transactions and document accounting analysis and conclusions; Apply Morgan Stanley accounting policies and periodically update policies as new guidance is issued
Skills Required: 7 – 10 years of experience with at least 4 years in public accounting; B.S. in Accounting (or equivalent) and CPA are required.
See the full description at the GC Career Center and if this vice-president position doesn’t sound like the perfect title, go to the main page where you can find lots of other great titles/jobs.