When accounting goes unaccounted for
Stephen Chipman also says that he misunderestimated the demand for his time. Who could have known?
• The over/under is $2 billion by 2015. Who has action on this?
• Is everyone clear on the “the dynamic organization space”?
• What do we think of Stephen sans spectacles?
• Merger and acquisition strategy? Who is GT going after? SC keeps it vague, per standard operating procedure. Accordingly, we welcome your rampant speculation.
Today in accounting firm musical chairs, a SA3 who got passed over for promotion at GT has an offer to joining soon-to-be rebranded PwC as an SA1/2. WHAT TO DO?!?
Have a question about your career? Worried that you’re too hot for the Big 4 and your hot brain will be overlooked? Trying to decide if you should give it all up and join the circus? Email us at advice@goingconcern.com and we’ll let you know if you should consider becoming the next human cannonball.
Back to our accountant in peril:
I’m a recurring S3 (financial) who was passed up on the manager position because of internal politics [Ed. note: reader admits that this is their opinion]. I have a offer with PWC to join their asset management group as a S1/S2.
Is this career suicide? I have until today to tell GT if i’m leaving or tell PWC that i have to rescind the offer.
I’ve had it with GT and although they said there is a good chance next [year] to make manager, i dont believe the hype.
Timing if of the essence, so we’re on this – Looking forward to a promotion to manager and getting passed over is a tough pill to swallow. All of your hard work that you’ve put in over the last five or so years (that feel like ten) no feels wasted. As you say, you’re not buying the hype any more and we don’t blame you. However, succumbing to your frustration and allowing PwC to knock you down a notch (or two) on the ladder is the last thing we think you should do.
You shouldn’t let any firm take advantage of your vulnerability and devalue your experience just because you were in Casa de Chipman. If you were an associate, the situation might be different but if you’re on the throes of making manager and now it might be at least another year before you’re even being considered for manager, feels like a disservice.
That being said, it doesn’t sound like you’re happy at GT. And being miserable at work sucks. If you’re crawling out of bed, hating your commute and the faces of your co-workers make you want to projectile vomit on their laptops, that’s a serious sign that you need to GTFO.
Luckily, you’ve got options, friend. If you trust your performance coach/counselor, ask them if there are possibilities within GT that you can explore (possibly a practice rotation?).
But if you’re truly burned out on GT, don’t do something rash like take the first offer thrown in front of you. Take your time and make the next career move that’s perfect for you. Don’t settle for the glitz of PwC just because they make it sound like the best shit since paperless audits (they aren’t that cool anyway). Your experience is valuable, go find a company that will reward you for it.
From the mail bag:
I heard that BDO is communicating compensation adjustments and bonuses this week. Bonuses are to be paid on September 15.
Seems to be in line with our last post on BDO comp and bonuses, so if you’re get good or bad news this week regarding either, share with the group and keep us informed.
From the mailbag, straight out of H-town:
Today, sept 1st, I got a save the date for the 2010 Christmas party. So yes GT Houston is having a Christmas party this year and apparently they are so excited about it, they wanted to let everyone know way in advance! Woot!
Is this some sort of retention tactic? Probably too little too late…..
Grant Thornton’s timing of this announcement is interesting on several counts. First, Christmaskuh was canceled by KPMG last year in early August. Since this is the first Holiday Ho down news we’ve received for any firm, this may be a good sign.
Second, our source’s suspicion is noted – is GT Houston employing a free booze morale booster here? Will the promise of catering, free hard liquor (at the very least beer and wine) and the opportunity for awkward sexual advances help rally that office back to indifference as opposed to downright morbidity? Oh and watch out for a certain PwC partner who might try to crash the party since he’ll likely be kept away from the booze at his own.
Discuss the early holiday cheer. And keep us informed about your firm’s/office’s holiday rager status.
Complete and utter meltdown to the point where are all fighting over chicken skins and muffin stumps? The next asset bubble to get us back to our mall-hopping weekends? It’s anybody’s guess really.
Grant Thornton LLP’s Business Optimism Index, based on a quarterly survey of U.S. business leaders, decreased significantly to 58.4 in August from a recent high of 67.6 in May. Business leaders are again becoming pessimistic, with only one-third (34%) expecting the U.S. economy to improve in the next six months, down significantly from 63% in May. The hiring outlook has also dimmed; only 38% of business leaders report that their companies will ramp up hiring in the next six months.
So the one thing we can count on is that unemployment will be hovering above 9% until at least the next presidential election. Got it.
Grant Thornton LLP Business Optimism Index drops 10 points [GT]
“Bob Herz led the FASB during the most challenging time in its history,” said Grant Thornton LLP CEO Stephen Chipman. “He has been a tireless leader with an unwavering focus on the users of financial statements and we are grateful for his service to the profession and wish him well in his retirement. We also extend our congratulations to Leslie Seidman as she takes up the mantle as acting chairman and stand ready to help her and the FASB establish accounting standards that are right for the marketplace and for the dynamic organizations [Ed. note: they’re part of the new strategy, as you may recall] we serve.”
Trite statement as it may be, at least SC said something (we’re looking straight at you Veihmeyer, Moritz, Salzberg, Howe).
Grant Thornton LLP CEO statement regarding Bob Herz retirement [GT]
On Friday we gave you the review of the recent video conference that featured Stephen Chipman discussing Grant Thornton’s new strategy “Unleashing Our Potential” in an accent that may or may not be fake.
Over the weekend we were fortunate enough to have another source at GT send us the following hand-written note that was sent to all employees prior/in coordination with the video:
This more personal form of communication shouldn’t come as a total surprise. Back in the spring, Chip-to-my-Lou sent a message to Grant Thornton partners encouraging to scribble down some warm thoughts for all those nights and weekends in busy season. An email is so cold and sterile and since SC knows what’s good for the goose is good for a British Gentleman, here you have his own very words and thoughts to serve as a reminder that his blog is no substitute for his elegant penmanship.
After being mesmerized by the prose, the next thing that caught us off guard was Steve-o’s call for you to be unleashing your potential hours before you even plop down in the cube farm. This means you should be unleashing your potential while you lie in bed, in the shower and during your god-awful commute. Likewise, you are still unleashing that potential on the god-awful commute back home after your 12-15 hour day or at the local pub (but don’t unleash and drive).
What’s also strange about this note is the plea that you share “Unleashing Your Potential” with your friends and family. Maybe there are a lot of people out there that like discussing innate corporate strategy (and what it really means) with their loved ones but our source was not impressed, “why would my family and friends care about GT’s strategy?”
Forget our source’s sour attitude for a moment. We want to hear from those of you that immediately sat down your significant other to share this news with them. How did they take it? We’re they completely enamored with this new path in GT’s quest to bring back the “Big 5”? Or did they interrupt you saying, “Honey, I want you to listen to what Stephen wrote to me. To us,” to tell you that this letter was the last straw and that your relationship was over?
What about your buddies at the upcoming Fantasy Football draft? Will you be telling them about the new strategy, possibly risking your expulsion from the league? Or at your next girls night? Will this English gentleman (fake accent or not) get you all swooning over purple hues and roses?
Let us know how it goes.
UPDATE: Naturally, a reader noted a misspelled word in Stephen’s letter that we overlooked. As you might suspect we don’t get too hung up on things but the Chief of Staff really should have caught this.
Well team, despite the little setback for the PCAOB earlier this week, Team Peek is not discouraged. In fact, they were so motivated by the SEC’s little stunt that they thought they’d churn out three major inspection reports today, just to show everyone that they get to say what’s what with these accounting firms (even if it is in an indecipherable combination of vague and wonky prose).
BDO, Grant Thornton and PwC all got their papers issued today, which leaves just KPMG as the last major U.S. firm to not have their report issued. We’ll give you the quick and dirty on these three but if you want the gory details, you’ll have to read them in depth yourself (some o know). We’ll go in alphabetical order so no one gets bent out of shape.
BDO had eight issuers mentioned in its report. Issues included not testing the underlying data used by a specialist, failure to identify a departure from GAAP before issuing its audit report, loan losses and “[failure] to perform sufficient procedures to evaluate the reasonableness of a significant assumption management used to calculate the gain on the sale of a business,” among others.
GT only had five issuers listed in their report with problems including two instances of departures from GAAP that weren’t identified before the issue of the audit report, testwork related to fair value determination of illiquid assets and testwork around revenue recognition. Steve Chipman got away from the teleprompter long enough to sign the letter to the PCAOB himself, along with Trent Gazzaway, the National Managing Partner of Audit Services.
Nine issuers were noted by the inspectors for P. Dubs. Various issues ranging from inadequate testing of foreign locations, loan loss issues (that’s a given) and fair value (another surprise). PwC’s response made it sound like they actually enjoy the whole inspection process, “We continue to support the PCAOB and we wish to convey our sincere appreciation for the professional efforts of the PCAOB staff.” Wonder if the engagement teams that were inspected feel the same?
Earlier in the week, Grant Thornton CEO Stephen Chipman gave team GT a taste of experienceAugust which was supposed to be a rousing battle cry as SC leads the U.S. firm into second half of 2010 and beyond.
Because we didn’t really have anything better to do, we asked around to see how things went and it sounds like if you bothered to sniff some glue prior to the 90 minute presentation, you probably enjoyed it. For the rest, not so much. A source attests:
Really, really horrible.
They had it set up in what they tried to make look like a TV studio – but may have just been a cleared out a staff area with some curtains and mood lighting. It was 90 minutes long.
GT’s new internal battle cry is now “Unleashing our Potential” and the market focus is going to be “Dynamic companies”. It’s the same crap that gets spouted each year for the last decade, just dressed up in a different package.
First, they had Chipman’s Chief of Staff, some Senior Manager ask Chipman a handful of scripted questions with scripted responses – and the 4 different teleprompters you could see on occasion would back up that claim.
We’re going to chime in here for a second – “Chief of Staff”? Is this a typical position in most large accounting firms? What does this guy make? How did he get the job? It’s doubtful that he’s anything like Rahm Emanuel. If you have any insight on any or all of these, please enlighten us.
Back to the review:
After that, they had Chipman run a roundtable with different members of senior leadership – again, mostly scripted. They also allowed 3 senior managers ask – again – scripted questions that resulted in canned responses from Chipman.
In essence – they wasted 90 minutes of everyone’s time, obviously laid out some cash for the production (4 different camera angles, a few teleprompters etc.) and told us nothing – the production came of as small-time…actually, the production came off as middle-market quality – or maybe it was a dynamic production that was unleashed on GT personnel.
The general consensus is that no one likes Chipman as the face of the firm – he is bland, uninteresting and some of us think the accent is fake.
We checked with one additional source on the bogus accent theory and they had this to say, “No I think it’s real I just think he has a hard time reading from a telepromter, he has to speak slower.”
So who knows!?
Bottom line is that GT employees got treated toa low-budget set, softball questions that addressed the firm’s vague strategy of “unleashing potential” on “dynamic clients” and a “bland” CEO whose British-ness is being called into question (at least by some). FOR 90 MINUTES. Are we missing anything?
We’ve confirmed that Grant Thornton has poached four tax-exempt experts from WTAS, LLC. Presumably beefing up their NFP practice is part of the experienceAugust that Stephen Chipman told the GT troops about last week. Grant Thornton employees received an email last night about the news:
“In line with the strategic plan of our firm and in support of our growing not-for-profit industry practice we are pleased to announce that four experienced tax professionals, formerly of WTAS LLC, have joined our Firm. Frank Giardini, who lead WTAS’ National Exempt Tax Advisory Services Practice (ETAS) as well as Ron Taxin, ETAS Director, Russlee Armstrong, ETAS Director and Andrea Kyzyma, ETAS Manager recently joined us. These individuals bring over 70 years of combined experience in providing tax services to significant non- profit organizations, especially in the higher education and healthcare industries. They have served the tax needs of many large public charities and private foundations. Frank and his group are based out in our Philadelphia office, but will serve clients in both the Northeast and Southeast regions. This group will also play a key role assisting our national NFP tax leader, Dan Romano, in serving GT’s national clients as well as supporting the NFP tax professionals throughout the firm.
A source familiar with WTAS, confirmed these departures, saying that they occurred earlier this summer and thought the move was “a good opportunity for them.” Emails and morse code messages sent to Grant Thornton have not been returned.
After coming out the near-death experience thanks to the Florida 3rd District Court of Appeal, you’d figure TPTB at BDO would continue shoveling the good news out while they could. On the comp front, a tipster tells us that while there are rumors that raises are bonuses are coming, no one has a clue as to what they’ll be:
Can you run a discussion on BDO compensation increase and bonuses? Raises would be effective 10/1, and currently there have been no formal communications from senior mgmt regarding this topic. In the local offices, there has been word that there will be raises and bonuses, but no numbers have been thrown around.
In other words, if you’ve got the goods BDO peeps, kindly spill it. It’s about time you started talking. If you’re not comfortable voicing yourself, email us and we’ll handle it.
As we’ve mentioned, it’s been a rough summer – hell a rough year – for KV Pharmaceutical. The company paid nearly $26 million to the Justice Department back in February, had massive layoffs in March and their Chairman and CFO back in June.
Last month, KPMG decided it had had all the drama it could handle and resigned as the auditor of the company.
But as the second half of 2010 gets into full swing, KV managed to find a new CFO and now they’ve managed to land a new auditor – BDO.
BPR:
K-V Pharmaceutical Company (NYSE: KVa/KVb) announced today that the Audit Committee of its Board of Directors has engaged BDO USA, LLP (“BDO”) as the Company’s independent registered accounting firm.
The Company and BDO will commence work immediately on the planning, audit and filing of the fiscal year 2010 Form 10-K and will then follow with the review of its quarterly filings for fiscal year 2011. K-V’s fiscal year end is March 31.
Mr. Mark Dow, Chair of the Board’s Audit Committee, stated, “The Audit Committee and the entire Board is pleased to be able to announce the selection of BDO as the Company’s new accounting firm. BDO has extensive knowledge of the pharmaceutical industry and also a previous relationship with K-V, and the Company believes BDO will be able to assess and complete its audit of the Company’s Fiscal Year 2010 financial statements expeditiously. We look forward to working closely with BDO to bring the Company back into compliance with all of its Securities and Exchange Commission filings as quickly as possible.”
Right! Staying compliant! That sounds a bit maj. Not only that but the New York Stock Exchange (sort of of a big deal in their own right) is sick of KV stinking up their big board with their 30-day average stock price hovering under $1.
The company has assured the NYSE that they’re on this stock price problem, “The Company will furnish to the NYSE on or prior to August 10, 2010 a response affirming its intent to cure this deficiency and outlining the steps it is currently taking and plans to undertake in the near term to restore compliance with the NYSE’s continued listing standards.”
Let’s just say BDO has their work cut out. KV has no internal controls to speak of, is having trouble convincing the FDA their products are safe and the SEC and NYSE breathing down their necks. Now maybe this won’t all translate into the auditors’ magic wand but there’s got to other potential clients in the St. Louis area with far less drama.
K-V Pharmaceutical Company Engages BDO USA, LLP as Independent Registered Accountants [PR Newswire]
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing [SEC]