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Job of the Week: Resist the Turkey Coma and Find a New Job This Weekend

Thumbnail image for Thumbnail image for hire me2.jpgSince you’ll have a couple of days off it’s a perfect opportunity to get leg up on everyone else out there suffering from an L-tryptophan overdose.
After the jump, get the details for a Senior Auditor position at the Pentagon Federal Credit Union.


Position: Senior Auditor
Company: Pentagon Federal Credit Union
Location: Alexandria, VA,
Experience: 5 – 7 years
Responsibilities: Executes and/or leads complex audits and reviews to determine effectiveness of controls, accuracy of financial records and compliance with regulations and policies in accordance with accepted standards.
Develops audit programs, obtains, analyzes and appraises documentary evidence sufficient to formulate an objective opinion regarding the efficiency and effectiveness of the operations and activities being audited.
Oversees the work of Staff Auditors assigned to assist on audits, including methodologies utilized, work paper documentation, and reports of findings or recommendations to Management.
Based on established reporting standards, prepares a formal written report of the audit showing the purpose and scope of the completed audit, the conclusions and any findings and related recommendations.
Qualifications: Possession of strong financial and analytical skills, advanced planning, organizing and problem-solving skills, a thorough understanding of financial institution practices and in-depth knowledge of internal audit principles and regulatory compliance.
See the entire job description over at the GC Career Center and jump over to the main page for all your job searching needs.

Jeremy Newman: See? I Told You That There Were ‘Big 4 Only’ Clauses

BDO Global CEO — and infrequent blogger — Jeremy Newman would like everyone to know that he wasn’t dreaming when he stated that some financing agreements included “Big 4 only” clauses.

Apparently Newman was thought to be a little Patrick Byrne-ish on this particular point:

These are views that I have been expressing for some years, although many have questioned the prevalence of such clauses and indeed some have sought to deny their existence.

It was comforting therefore for me to read in the report published by the UK’s Financial Reporting Council in October 2009 entitled ‘Choice in the UK Audit Market’ that reference was made to restrictions in loan covenants. The report from the FRC noted:

‘..it is too early to determine how widespread such obligations are; however, the FRC continues to receive examples of banks imposing loan covenants with ‘Big 4 only’ clauses, including one which imposed a higher rate of interest if the borrowing company chose a non-Big 4 auditor.’

Surely there is now sufficient evidence to recognise that such clauses are a potential constraint on choice in the market place and regulators should be urged to ban them.

So despite the lack of evidence that these obligations are widespread, this remains a matter of “urgency,” according to Newman. There are examples, people. That should be enough for you. The man is trying to build a Global 6 firm after all. Kindly throw in a little additional bank regulation to help him out.

Ernst & Young Is Thankful for Lawyers, Possibly Toblerones

Thumbnail image for madoff-sentenced.jpgJust when we think the Madoff beat has quieted down, we’re reminded that the tentacles of the Ponzi scheme of our lifetime reach far and wide and for that we are thankful.


Not because we enjoy the carnage that has come about from this particular scheme. No, that would be in bad taste. We’re mostly thankful because we’re certain that today, 90% of you will spend the entire day gabbing about turkey-lurkey-do instead of sending us details on your firm’s cost saving initiative du jour, thus making it a slow news day.
So, thank you Berns, for providing us a story on this most non-productive day of the year:

Private and institutional investors who lost money through Access International Advisors LLC’s LuxAlpha Sicav-American Selection are suing UBS and Ernst & Young for “seriously neglecting” their supervisory duties of the fund. A Luxembourg court will decide in hearings that started today whether investors have the right to bring direct claims against the fund’s custodian and auditor.
“These cases are very important,” Pierre Reuter, who represents clients in six of the lawsuits being reviewed over four days of hearings, said by telephone before the hearing. “They could set the course for some 100 pending cases and many more to come.”

Since these are simply “test cases” the plaintiffs will be anxious to see the results, especially since the Swiss are involved. A pallet of Toblerones will certainly find their way to the offering table at some point. Whether UBS allows E&Y to squeeze in on this valuable bargaining chip remains to be seen.
UBS, Ernst & Young Face Test Cases Over Madoff Funds [Bloomberg]

Preliminary Analytics | 11.25.09

Thumbnail image for Thumbnail image for overwhelmed.jpg• Sixty-Five Percent of Nevada Homeowners Underwater – That’s a lot. [The Atlantic]
• Tax Burdens, Around the World – If you like to complain about taxes, move to Denmark. [Economix/NYT]
• From the Hospital to Bankruptcy Court – “Last summer, Harvard researchers published a headline-grabbing paper that concluded that illness or medical bills contributed to 62 percent of bankruptcies in 2007, up from about half in 2001. More than three-fourths of those with medical debt had health insurance.” [NYT]
• Microsoft CFO to leave, look for bigger job – Team Jehovah must need someone. [Reuters]
• Diners Club franchise sold – The Citigroup garage sale continues. [CT]
• Leadership: A Guest Post from Tenacious Truman [RTA]

Review Comments | 11.24.09

MelanconBCROP2.jpg• AICPA Objects to ‘Reckless’ Behavior Bill – Barry Melancon, on the Hill, earning the dollar. [Web CPA]
• Accused Ponzi schemer Petters’ case goes to jury – The effectiveness of the cocker spaniel defense will live and die on this trial. [Reuters]
• Sarbanes-Oxley For Everyone: To Be Or Not To Be? (With Postscript) – One GC contributors point of view on small company SOX compliance. [RTA]
• Sarbanes Oxley Logic and the Paper Tiger – And another. [Accounting Nation]
• ‘Bought’ Isn’t the Same as ‘Place in Service’ – Section 179 and depreciation discussion. Go tax people! Go! [Tax Update Blog]

Accountants Can Kick a Politician’s Butt?

Figuratively, of course.
Denver Post:

Perlmutter, a Democrat from Golden, had introduced an amendment that would allow regulators, if they ever faced another economic crisis like the one last fall, to tinker with standard accounting rules that many believe exacerbated the crash.
But accountants, despite their milquetoast image, are not to be messed with lightly. An army of pinstriped lobbyists had been working committee Democrats for two days, and by just after 2 p.m. Wednesday, they forced Perlmutter to accept a compromise that gutted the amendment.
“Basically, the accountants were kicking my butt,” Perlmutter conceded.

Of course. Should of known it was lobbyists and not an army of abacus-wielding Bob Herz fanboys.

(UPDATE) KPMG Will be Stingy with the Letterhead From Now On

Thumbnail image for 200px-KPMG.svg.pngHave you been craving a tech startup accounting scandal? Thought so. Enter Canopy Financial, Inc. who “provides technology-enabled electronic payment, account management, and investment technology platforms for health savings accounts, flexible spending accounts, and health reimbursement arrangements.”
The company was ranked #12 in the 2009 Inc. 500 List of fastest growing companies in America:

In 2008 CEO Vikram Kashyap said his company had 2007 revenues of $9 million. More recently, we’ve heard, the company was saying they’d hit $60 million in revenue and $9 million or so in EBITDA.
All of this may have been lies.
Until recently all the venture capitalists involved proudly placed Canopy Financial on their portfolio pages. Now all trace of the company have been erased from the portfolio pages of investors GGV Capital, Spectrum Equity and Foundation Capital. And their investment bank has erased them from their trophy page as well.
So what happened? Multiple sources have told us that Canopy was absolutely making up their financial statements, even forging audited statements with fake KMPG [sic] letterhead. And somehow the investment bank and all the investors never figured it out.

Jesus, this doesn’t even qualify as cooking the books. This is more along the lines of:

CFO: No, we cannot say $100 kajillion.
CEO: Why?
CFO: Because no one will believe it.
CEO: Why?
CFO: Do you know what a kajillion looks like?
CEO: Um, no.
CFO: It has to look like a real number. I’m saying $59,984,387.
CEO: What about…
CFO: Shut up, that’s the number.

Then all you have to do is get your hands on some KPMG letterhead and BAM your company is listed in a magazine.
We tried contacting KPMG about this but our emails have gone unreturned. We’ll let you know if we hear back from them. In the meantime, if you know anything more about this particular story, enlighten us in the comments.
UPDATE: See the clarification about the authenticity of the letterhead on our post from December 3rd.
Canopy Financial Accused Of Serious Financial Fraud, Investors Burned [Tech Crunch via FINS]

Grant Thornton Named in New Writ, Partner Still MIA

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGToday in non-Patrick Byrne Grant Thornton news, the Hong Kong and International firms are now named in a new writ related to the scandal involving nowhere-to-be-found-former-partner Gabriel Azedo.

We imagine GT is less than thrilled with this latest development since they probably felt pretty good about firing Gabe’s ass the moment they found out he was a liability. The new writ states that the firms are ‘vicariously liable’ for $10.3 million.

There’s no indication that Eddie Nusbaum & Co. have put out an APB on Gabe in order to track him down and get all Jack Bauer on his ass. If it were us, we’d have every SD scouring the Earth* for this guy.

Until that happens, Grant Thornton is in deny ’til you die mode, saying that it will be ‘defended vigorously’ and that they expect to be ‘fully exonerated.’ God, will someone come up with a new press release for these scandals?

Grant Thornton linked to fraud claims [FT]

*You’re a Global Six Firm after all

PwC Is Here to Remind You that Someone Is Watching Your Utilization

scrutiny.jpgEarlier this month, we mentioned a rumor we heard about PwC putting in calls to the rank in and file of one industry group in the tax practice. The caller was just letting them know that their utilization was getting the crook eye by the partner in charge of the group. Not exactly something that would give you the warm and fuzzies Well, now have another report of P. Dubs putting people on notice:

I was recently informed that despite my good performance and strong mid-year reviews, “[my] utilization is being watched.” Its nice to know that this company values cold metrics as opposed to quality, hardworking employees.

Here’s a question: who at PwC thought that notifying employees that their utilization is being scrutinized was a good idea? Especially since Bob Mortiz sent an email to say that it’s unlikely that there will be layoffs in tax and assurance?
One email says “don’t worry, everything is fine” while someone else calls you up in order to scare the bejesus out of you by letting you know that despite your fine performance someone is watching. Can anyone explain the rationale? Our emails to PwC have gone unreturned, so we’re all ears.

Ernst & Young Wins Hedge Fund Award, Partners Give Boring Acceptance Speech

The accounting firm awards bonanza has begun stateside. After last week’s Accountancy Age awards, Ernst & Young has now been named “Best Accounting Firm to Hedge Fund Industry” at the inaugural Hedge Fund Manager Week US Service Provider Awards.

While this is certainly a less comprehensive ceremony than the Accountancy Age Awards, it should not be taken any less seriously. This is a sincere effort on the part of the hedge fund industry to recognize who has bent over backwards the farthest for them. Nice work, E&Y.


As for the speeches:

Arthur F. Tully, Partner, Financial Services and Global Hedge Fund Practice Co-leader, Ernst & Young LLP said, “It is an honor to receive this recognition. It reflects our ongoing efforts to provide relevant insights into our client’s most pressing issues, particularly in today’s challenging business market.”

“This award is a testament to our efforts to provide consistent, high-quality service to our asset management clients as we strive to anticipate, understand and offer insight into the biggest issues facing our clients,” added Michael J. Serota, Partner, Financial Services and Global Hedge Fund Practice Co-leader, Ernst & Young LLP.

We understand that there’s a an expectation for tactfulness but c’mon guys. This was your opportunity to get on a stage, drunk as Ken Lewis on a Tuesday morning and say something like:

“It feels damn good to win. You other firms, I wish I could say it’s an honor to be nominated with you but I can’t. In other words, suck it. I accept this award on behalf of all those staff and managers that continue to suffer from sleep deprivation, obesity, and overall misery because I know they’re working at this very second. And if I find out that you’re not, you’re uninvited to the party. Oh, and I just want to say, Jim Turley, you complete me. You really, really, really do. I love you.”

Or something to that effect.

Ernst & Young LLP Named Best Accounting Firm to Hedge Fund Industry [PR Newswire]