Category:

Top 100 Accounting Firms List Looks Very Familiar

Mostly because the top twenty-five firms hardly changed.

1. Deloitte
2. PwC
3. E&Y
4. KPMG
5. McGladrey
6. Grant Thornton
7. BDO
8. CBIZ/MHM
9. Crowe Horwath
10. BKD
11. Moss Adams
12. Plante & Moran
13. EisnerAmper
14. Marcum
15. Clifton Gunderson
16. BTVK
17. J.H. Cohn
18. LarsonAllen
19. UHY Advisors
20. Dixon Hughes
21. Reznick Group
22. Rothstein Kass
23. ParenteBeard
24. Eide Bailly
25. WeiserMazars

The top twelve didn’t change at all and there was some shuffling amongst the firms after that, most notably Eisner and Amper whose merger catapulted them from 24 and 26 respectively to 13th on the list. Not much else to report on such a snoozer of a list but it’s worth mentioning that 45% of Deloitte’s revenues are not from assurance or tax services and this is the reason they are numero uno. Check out the entire list here.

Earlier:
Most Top Ten Accounting Firms Saw Lower Revenues, Headcount for 2009

Chief Audit Executives Like Sarbanes-Oxley…No, They Really Like It

A new survey of more than 300 chief audit executives (CAEs) by Grant Thornton LLP finds that while nearly half believe that the shifting regulatory landscape poses the greatest threat to their company, a vast majority (88%) do not believe that the Sarbanes-Oxley Act (SOX) should be repealed. Of those that believe SOX should be repealed, the cost of compliance is the main reason for doing so. “Since the passage of SOX, organizations have had to dedicate significant resources to comply with a host of new laws and regulations,” noted Warren Stippich, a Chicago-based partner and Grant Thornton’s national Governance, Risk and Compliance solution leader. “Based on discussions with various CAEs during the survey process, many believe that SOX brings a continued focus by management on financial and governance-related controls. However, CAEs believe that compliance audit processes are now well-defined and are currently exploring ways to contribute value creation to the organization well beyond compliance monitoring and reporting.” [GT]

The PCAOB Has Some Thoughts on This Chinese Reverse Merger Trend

In the past few months you may have heard a thing or two about small Chinese companies making their way into the U.S. by virtue of a reverse merger. If you’re not familiar, it was a speciality of the firm formerly known as Frazer Frost who got out of the business altogether because of a “culture clash” and “issues in the Chinese reverse mortgage practice area.”

All this has gotten the attention of the PCAOB who issued a Research Note (full document after the jump) today discussing t–more–>
Recently minted PCAOB Chair Jim Doty sprinkled in some thoughts for the press release but we obtained this statement from the Chairmn in case you anyone thinks they aren’t taking this shit seriously (my emphasis):

“As the PCAOB Research Note describes, small Chinese companies are increasingly seeking access to capital and trading in U.S. securities markets. The PCAOB has inspected the audits of many of these companies, when they were performed by U.S.-based audit firms. In some cases PCAOB inspection teams have identified significant audit deficiencies and, as necessary, made appropriate referrals for enforcement to protect investors’ interests in reliable audit reports.

“Many other such companies are audited by accounting firms in China. To date, the PCAOB has been denied access to determine through inspection whether such firms have complied with PCAOB standards. This state of affairs is bad for investors, companies and auditors alike. If Chinese companies want to attract U.S. capital for the long term, and if Chinese auditors want to garner the respect of U.S. investors, they need the credibility that comes from being part of a joint inspection process that includes the US and other similarly constituted regulatory regimes.”

Depending on how you perceive the role of auditors, this might seem like be a meaningless statement. But since China’s economy is going gangbusters and Big 4 firms are salivating at the thought of the fees associated with their introduction to the U.S. market, the temptation to help these companies comply with the U.S. rules might be high for an ambitious parter, office or firm.

That said, according to Table 8 of the PCAOB’s Research Note, no Big 4 firm had more than three CRM companies as of March 31, 2010 and now after Deloitte’s resignation from CCME, any partners that were entertaining the idea of chasing these companies could be having second thoughts.

Chinese Reverse Merger Research Note

What Are Your Questions for a Forensic Accounting Partner?

Afternoon, gang. As the busy season winds down, you might be thinking about your next career path. Lots of you have expressed interest in forensic accounting and fraud investigations and as luck would have it, I got introduced to Derek Royster, a partner with RGL Forensics in Charlotte, North Carolina. From his bio, Mr. Royster has been with RGL since 1997, having worked extensively with insurance companies and attorneys focusing the scope of his career on forensic accounting, the measurement of economic damages and litigation support. He has lots of letters behind his name and has provided testimony as a damage expert witness.


Mr. Royster has agreed to discuss his career and other aspects of a forensic accounting with GC but since you people are the ones with career decisions to make (whilst I just write about it) we thought it would be best to get your questions for Derek. So whatever you want to know about a career in forensics but were afraid to ask, this marks your opportunity to get the answers.

Leave your questions for Derek in comments below or (email them to us) and we’ll get the answers for you and post our discussion with him.

And Now…CPAs Acting Out a Scene from the Empire Strikes Back

Last year the Pennsylvania Institute of CPAs went on a video production bonanza that incorporated Snuggies, public service announcements from the 1980s and your breathlessly judgmental friends. As impressive as those videos were, putting a CPA spin on a climatic scene from the best film in the Star Wars series takes things to a whole new level.

The breathing at 0:39 and the subsequent scream are priceless, as is the cough at 0:55.

ESPN’s Website Deemed Not Crucial for Ernst & Young’s Non-Monetary NCAA Bracket Competition

Perhaps circumstances have changed but as of yesterday, access to the most popular and comprehensive coverage on the web will not be allowed.


Which is unfortunate since some offices appear to be supportive of some bracketing.

Are you ready for March Madness?

As part of _______________ into spring campaign, it’s time to join the festivities during the 2011 NCAA Basketball Tournament. The “Madness” begins today with a non-monetary NCAA Tournament bracket competition. Everyone in the ___________ office can submit an online Tournament bracket. At the end of the Tournament, the person from each service line who picks the most winning teams will receive _____________________ (and bragging rights!).

You must complete your Tournament bracket before Thursday, March 17 __________________. Expand the section below for instructions on how to submit a bracket under your service line. During the Tournament, which concludes with the championship game on April 4, you can visit your group’s page and see how your bracket is performing compared with your service line colleagues’ brackets. If you have any questions, please contact ____________________________

Not exactly sure how you guys feel about a non-monetary competition but as far as strategy goes, since we’ve already given you access to the best strategy you can find. Of course some people are enjoying this immensely.

Happy March 15th! (2011)

Today marks a great day for our tax troll friends as the first corporate filing deadline of the year. For many of you, this marks the end of the traditional tax season and for the rest of you it’s more of a speed bump but it’s a sure sign that the traditional tax season is winding down.

So as the interns slap together the extensions, maybe dig into your drawer for a little pick-me-up and look over your bracket one last time. Just keep an eye out for the Judases amongst you. As far as they’re concerned, the extensions should have been finished a week ago and you should already be a dead sprint towards April 15th 18th.

Free CPA Exam Resources for Candidates from the AICPA

Note from AG: We know it’s busy season and the last thing you’re thinking about is the exam but just in case you’re one of the lucky ones who has nothing else to do but sit for BEC for the fourth time and have a question for us, get in touch. I’ll cover anything from how to prepare to what to do on test day but sorry, I am not available to take the exam for you.

If you are a CPA exam candidate and haven’t, at a minimum, tried a quick Google search to gather everything you need to know to conquer the exam, you probably deserve the 50 you’re going to get when you bomb research, do simulations wrong or blow off multiple choice because you don’t realize that the exam is on a plus point basis. But for those of you who have done your due diligence and are still feeling a bit lost, This Way to CPA has put together a decent list of items you must check out.


First, the CPA Candidate Bulletin. This handbook covers everything from scheduling to application and includes contact information for the state boards of accountancy so you know who to pester when your application takes 10 weeks. This is a good place to start and a must-read for anyone even considering taking the exam. Reading through this will help you put together a framework of what to expect when you start testing, and will help you ask better questions when you start looking for a review course or additional guidance.

Second, while the actual content of the CPA exam is proprietary and guarded closer than the gold bars that may or may not be in Fort Knox, the AICPA publishes a comprehensive list of topics covered, and also gives you an estimate of how many of those types of questions will appear on your exam. Check out the Content and Skill Specification Outlines, which have always been readily available on the AICPA’s website, for this information as well as a breakdown of skills tested in the CPA exam.

Third, while most review course software is good practice, since the exam is property of the AICPA, no review course is allowed to copy the exam environment exactly. That’s where the tutorial comes in. You can do 5 practice questions (including sims) for each section and familiarize yourself with the exact exam environment as it will look when you take it. This way you aren’t thrown by that weird pencil icon and can practice flagging the many multiple choice you will probably have to go back and guess on. The AICPA recommends all candidates use the tutorial before exam day, no exceptions.

Enjoy!

Accounting News Roundup: IRS Audits of Wealthy Nearly Double; Why the New 1099 Rules Are NBD; E&Y Fired by China Agritech | 03.15.11

Futures Tumble After Nikkei Plunges [WSJ]
In Japan, the Nikkei Stock Average plunged 11%, sparking broad declines in Asian and European markets. Germany’s DAX 30 index was particularly hard hit, down 4.2%in intraday trading. Against this backdrop, futures for the Dow Jones Industrial Average were down 232 points to 11694 about 90 minutes before the opening bell. They had fallen as low as 11611.

IRS Boosted Auditing of Richest Taxpayers, Almost Doubling Rate Last Year [BloombergKraft CFO to leave in mid-2011 [BBW]
Chief Financial Officer Timothy McLevish is leaving the company in mid-2011 to “pursue opportunities in general management.”

Is Happiness Overrated? [WSJ]
[R]esearchers say happiness as people usually think of it—the experience of pleasure or positive feelings—is far less important to physical health than the type of well-being that comes from engaging in meaningful activity. Researchers refer to this latter state as “eudaimonic well-being.” Happiness research, a field known as “positive psychology,” is exploding. Some of the newest evidence suggests that people who focus on living with a sense of purpose as they age are more likely to remain cognitively intact, have better mental health and even live longer than people who focus on achieving feelings of happiness.

Why the New 1099 Rules Aren’t That Bad for Small Businesses [You’re the Boss/NYT]
THE HORROR!

China Agritech, Inc. Dismisses Ernst & Young Hua Ming As Auditor [PR Newswire]
The dismissal of Ernst & Young Hua Ming was made after thorough consideration by the Audit Committee, and the Board of Directors of the Company. The decision to dismiss the auditor was the result of Ernst & Young (China) Advisory Limited Beijing Branch Office entering into a SOX 404 service agreement including performing the test of the Company’s internal controls from 2008 to 2010. Recently, the public and the management team have raised doubts about this service agreement’s impact on Ernst & Young Hua Ming’s independence to act as the Company’s auditor.

Professional gamblers gain with tax ruling [LVRJ]
A January ruling by the U.S. Tax Court changed a portion of a half-century-old opinion that equated expenses related to a gambling trip with gambling losses — they were deductible only to the extent of their winnings. The court now believes the expenses to reach a casino or racetrack, and other expenses associated with the activity of gambling, can be written off.

Taking Stock of India’s New Accounting Standards [WSJ]
The Indian Ministry of Corporate Affairs recently notified that it had converged 35 Indian accounting standards with international guidelines. This is an important first step in bringing International Financial Reporting Standards (IFRS) to India, and making Indian companies’ financial statements comparable to that of their global peers. However, several deviations of the proposed Indian standards from international practices have raised concerns among investors.

Heir to H&R Block Fortune Is Ready to Pay Higher Taxes

Tom Bloch is so ready in fact that he wants his to go up first.

“Congress will have no choice, in my opinion, but to raise taxes sooner rather than later.

“I also believe that the rich are significantly under-taxed compared to the middle class. That’s why I suggest that raising taxes on the very wealthiest taxpayers must be the first step toward restoring equity in our income tax system and ensuring the financial security of our children’s future.”

US taxes are too low, should be raised: H&R Block heir [PhillyDeals]

Deloitte Resigns as China MediaExpress Auditor; CFO Quits

In the wake of Roddy Boyd’s epic post from March 11th, China MediaExpress announced some bad news today – Deloitte resigned as their auditor effective Friday and as a result the company’s CFO, Jacky Lam, quit yesterday:

China’s largest television advertising operator on inter-city and airport express buses, today announced that the Company’s registered independent accounting firm, Deloitte Touche Tohmatsu (“DTT”) has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.

As you might have already guessed, Deloitte got spooked after all the fraud talk and they also came to the conclusion that management couldn’t be trusted (even if he did say great things about them):

The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT’s letter also stated that these issues may have adverse implications for the prior periods’ financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods’ financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company’s common stock on the NASDAQ Global Market to permit full disclosure of DTT’s resignation to be disseminated to the public.

So the company now needs a new auditor and a new CFO. Of course you’ll have to work around forensic accountants and a bunch of lawyers that will be helping the company through this little hiccough but otherwise, this should be a snap.

Earlier:
Apparently ‘The Purpose of Auditors Is Completely, Entirely, and Wholly’ to Look for Fraud and ‘Deloitte is the best. Period. End of Statement.’

PwC Introduces Cleverly-Named Fortnightly Social Function

I overheard – and by that I mean someone sent us the gchat – the following conversation that occurred earlier today regarding friendly get-togethers that will be going down at 300 Madison starting next Thursday.

[Someone at PwC]: From my good friend [Someone else at PwC]
[Someone at PwC, quoting an email]: Take a break. Unwind. Catch up with your coach or colleagues. Enjoy refreshments. Play a game. Right here in 300 Madison at our new Post work Connections. Designed to show appreciation for everything you do — and to provide a place for you and your colleagues — to meet and get to know people. It’s a place to just have fun! Post work Connections will be open every other Thursday, from 5:00-8:00 p.m., in 300 Madison’s deck/cafeteria, from March 24 – June 16. We look forward to seeing you at our grand opening on March 24. Give it a try. There will be beer, wine, soda, snacks, games — and raffles for prizes! Get caught in the act of having fun at work! Hope to see you there!
[Someone at PwC]: Note that post work connections starts with PwC
[Someone who knows someone at PwC]: Good lord
[Someone who knows someone at PwC]: That’s epic
[Someone who knows someone at PwC]: Is the “post work connections starts with..” comment theirs or yourts
[Someone at PwC]: Mine
[Someone who knows someone at PwC]: Love it.

Personally, I’m mostly curious about the “games” aspect of these events. Are we talking Risk™? Beer pong? Scrabble™? Or we talking an Angry Birds round-robin tournament? Regardless, we’ll be interested to hear how these Thursday ragers will go. Keep us in the loop.