Four weeks severance, termination date of September 1st, not performance related. Cities reporting bodies include: New York, Hartford, Dallas, Kansas City, Chicago, Indianapolis, and Cleveland. We’ve heard all levels have taken a hit, although it varies by city. We haven’t gotten any confirmation of partners being bought out at this point. West coast cities have yet to confirm victims since last night’s comments.
If you’ve got final numbers on your office or any other details we didn’t discuss here, shoot us an email: tips@goingconcern.com.
KPMG representatives had no comment.
UPDATE 4:11 pm: San Fran reports at least seven victims, six of which are SA’s.
UPDATE 2, 6:16 pm: San Fran updated to nine total, eight SA’s. Other cities reporting layoffs: Boston, Houston, and Louisville.
Author: Caleb Newquist
Founding editor, Going Concern.
Huron Consulting Beats the Numbers, Cooked Books and a Bunch of Other Shadiness Notwithstanding
If you’re an accountant and you see a company’s name in the same sentence as “accounting irregularities”, “alleged cooking of the books”, or “SEC investigation”, your likely advice to any person would be to run away from said company like it was a band of lepers.
This is just conventional wisdom, nothing ground breaking. However, since Huron Consulting reported big second quarter numbers, the stock price is up more than 30%.
Now some of this is short sellers getting burned but according to one analyst quoted by Reuters, some investors may be going long because of “confidence in the underlying business”.
We’re not too crazy about the “underlying business” for a lot of reasons:
1. The Company said in a filing that they are likely going to take a goodwill impairment charge that will put it in noncompliance with a financial covenant of its credit agreement.
2. It’s worried about “‘reputational issues’ that may affect the company’s ability to retain its senior managers and attract new talent and new business”.
3. Can’t predict the outcome of the SEC investigations or private lawsuits (P. Dubya take note).
4. They warned that their current numbers may not be legit since the new management has no idea what the hell else is out there in the way of kickbacks payments made to Huron Management, questionable allocated billable hours (but don’t worry, this won’t affect client billings) or anything else for that matter that may call for another restatement of its results.
5. The whole Arthur Andersen connection creeps people out.
Far be it from us to speculate on a company’s future but this place seems doomed. We might just listen to tomorrow’s earnings call to see if there’s anything worth mentioning but in the meantime, put your money in…WTFK?
Huron Consulting fights to stay alive [Greg Burns/Chicago Tribune]
Presented Without Comment
“The CPA profession had a great run for these past six years,” said Marc Rosenberg, creator of the Rosenberg Survey. “The post-Enron climate created a huge surge in demand for CPA firm services, allowing firms to virtually become order takers. Throttled by a historically low supply of experienced staff, partners worked harder than ever before, and the benefits showed up in their paychecks: Income per partner rose 50 percent since 2003.”
Ready to Do the Unthinkable and Work for Less Money?
With all the blood being spilled in the past year, you don’t have to be a math wizard to know that: Fewer People + Same Workload = People Working Like Dogs
It has gotten to the point that many of these people that are doing more work, for the same amount of money are ready to move on for, GASP, less money.
More, after the jump
Rick Telberg, at CPA Trendlines quotes a recent survey they did that says that nearly half of the people polled so far were ready to move on to a different job, ‘even if it meant a paycut’. No surprise really since doing the work of two or three people loses its luster pretty much instantly, especially when it becomes the expectation.
He also mentions that regardless of this emerging trend of people willing to turn down big (or mediocre) bucks to get their lives back, the enrollment on campus in accounting programs is at record levels.
So after giving it very little thought we came up with the following approximate timeline: Everyone in college thinks accounting is sexy; It takes 1-2 years to find out that it’s not; 3-6 years to actually get out (one way or another); Then, well, WTFK? Become a hack blogger?
Recession Adds to Workloads, Stress; Sends CPAs Looking for New Jobs [Rick Telberg/CPA Trendlines]
Better Learn to Like that Intern
Time to give a little love to everyone’s favorite prank victims, the interns. The word on the street is that this year’s dinner delivery specialists at the major firms will serve as the major pipeline for next year’s fulltime hires.
According to our source, next year’s budgets for much of the audit, tax and advisory service lines for the Big 4 will be met if all of this year’s interns accept their offers. And unless they’ve all suffered serious brain injuries, we’re guessing they’ll be accepting those offers.
More, after the jump
What hell does this mean? Well, in years past, the firms have had large budgets to go back to campus and hire additional new staff in addition to the offers that they made to the crop of interns from the previous year. And just like merit and bonus pools, the hiring budgets have shrunk to the point of the absolute bare minimum. Why? Because no one is jumping from the sinking ship like in years past.
So for you interns out there, it sounds like if you’ve got an internship you better learn to love that firm because if you decide it sucks, finding a fulltime gig at another Big 4 firm will be next to impossible.
Preliminary Analytics | 08.18.09
• UBS tax deal may pave way for bank’s recovery – Actually we really thought the best course of action would to be to drag the whole thing out until armed IRS Agents descended on Zurich. [Reuters]
• Schwab Vows Court Fight in Cuomo’s Auction-Rate Securities Suit – Who’s doing all this work? God knows it isn’t AC. [Bloomberg]
• Hertz to Photograph Cars in Dent Scan to Boost Damage Payments – Could this be the death of, “It’s just a rental.”? [Bloomberg]
• German investor optimism at 3-year high – Zee Germans are leading us out of this? [FT.com]
• CalPERS Backs S.E.C. Move to Open Corporate Ballots – Look out, someone supports a move by the SEC. [DealBook]
Good Luck Today KPMGers
Received word last night that a known executioner (and we’re assuming others) at the Dallas office has reserved several conference rooms from 7 am to 3 pm today and that some had already received emails setting up with their meetings last night. Let us know when the shooting starts in your office and drop us any details, including where you’re getting bombed tonight. Go with God (and for the atheists, just go).
Review Comments | 08.17.09
• Facebook’s Evil, Genius Plan to Own Your Life – Was there ever any doubt that this was the plan? [The Atlantic]
• Three Indicted in Major Hacking Case – “Three men were indicted Monday on federal charges of conspiring to hack into computer networks of major U.S. retail and financial organizations and stealing data related to more than 130 million credit and debit cards.” [WSJ]
• Sordid Penn Station Needs Overhaul for $9 Billion Tunnel Link –For the love of all that is good and holy why not use $9 billion get the human feces out of there? [Bloomberg]
• A.I.G. to Pay New Chief Executive $7 Million a Year – Seven million times more than the last one. Appears reasonable. [DealBook]
• Federal Prosecutors May Let Andy And Mark Madoff Enjoy Labor Day Weekend – Because it’ll be your last! [Dealbreaker]
Which Accounting Firm Will Risk the Label ‘Stoner Firm’?
Medical Marijuana, Inc. who, “is the first public company to recognize the vast and unequaled opportunities that exist in the rapidly expanding medical marijuana industry,” wants to get listed on the OTC Bulletin Board in order to demonstrate it’s desire to become a fully transparent corporation.
The company now needs a PCAOB-registered CPA firm to audit its books, preferably one that’s cool with a little Maui Waui prior to lunch.
More, after the jump
Our thought is that the Big 4 are way too prudish to take on such a progressive client. We’d go so far to say that not even Grant Thornton or BDO Seidman would touch this one. That being said, we’re sure there are a few partners out there that have grow houses that rival anything in High Times.
If you’re sure your partner is a regular Willie Nelson when it comes to kush maybe throw this post their way. In the meantime, feel free to handicap the odds of your respective firm picking this client up. We’d give the edge to any firm from the Santa Cruz area.
Medical Marijuana, Inc. Begins Procedures to Be Quoted on OTC Bulletin Board [Press Release]
KPMG Doomsday Eve?
We’re going to briefly remind you about the hammer that is going to drop on some unlucky Klynveldians tomorrow.
So far it sounds like there has been blood shed in Dallas, Indianapolis, and New York but no details on severance and it sounds like only second year associates have gotten shown the door so far.
If you’re one of the KPMG casualties, drop us a line at tips@goingconcern.com and give us the gory details: severance, number laid off, lunging across the desk, did the partner you met with wear an executioner’s mask? Tell us everything.
New Accounting Firm Name Challenge
We read about an accounting firm M&A specialist who is predicting what he calls a “mega-merger” between two of the top 25 firms. Since this guy is probably getting greased on the deal we’ll take him at his word but unfortunately he’s not naming names.
So for the pure sport of speculation, we need your best and worst guesses of what firms will be getting together and what the new combined firm will be called.
We’ve taken the liberty of listing the top 25 firms for you:
The list, after the jump
• Deloitte
• PricewaterhouseCoopers
• KPMG
• Ernst & Young
• BDO Seidman
• Grant Thornton
• RSM McGladrey/McGladrey & Pullen (divorce nothwithstanding)
• CBIZ/Mayer Hoffman McCann
• Crowe Horwath
• BKD
• Moss Adams
• Plante & Moran
• Clifton Gunderson
• J.H. Cohn
• UHY Advisors
• Reznick Group
• Virchow, Krause and Co.
• Dixon Hughes
• LarsonAllen
• Marcum & Kliegman
• Rothstein Kass and Co.
• Weiser
• Eisner
• Eide Bailly
• Wipfli
Try to use your number crunching brains for some creative combinations. Call your friends in marketing if necessary. If we get enough good suggestions, we’ll put together a poll to vote on the best.
We’ll get it started: Hughes Dixon Moss
Think about it. Work with us people. Just charge your time to an administration code, it’ll be fine.
New Accounting Firm Merger Challenge
We read about an accounting firm M&A specialist who is predicting what he calls a “mega-merger” between two of the top 25 firms. Since this guy is probably getting greased on the deal we’ll take him at his word but unfortunately he’s not naming names.
So for the pure sport of speculation, we need your best and worst guesses of what firms will be getting together and what the new combined firm will be called.
We’ve taken the liberty of listing the top 25 firms for you:
The list, after the jump
• Deloitte
• PricewaterhouseCoopers
• KPMG
• Ernst & Young
• BDO Seidman
• Grant Thornton
• RSM McGladrey/McGladrey & Pullen (divorce nothwithstanding)
• CBIZ/Mayer Hoffman McCann
• Crowe Horwath
• BKD
• Moss Adams
• Plante & Moran
• Clifton Gunderson
• J.H. Cohn
• UHY Advisors
• Reznick Group
• Virchow, Krause and Co.
• Dixon Hughes
• LarsonAllen
• Marcum & Kliegman
• Rothstein Kass and Co.
• Weiser
• Eisner
• Eide Bailly
• Wipfli
Try to use your number crunching brains for some creative combinations. Call your friends in marketing if necessary. If we get enough good suggestions, we’ll put together a poll to vote on the best.
We’ll get it started: Hughes Dixon Moss
Think about it. Work with us people. Just charge your time to an administration code, it’ll be fine.