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When Good Audits Go… Good. (+ Sex Scandal)

oil!.jpgThis is the sort of story that you can’t make up. Like the story of the guy who tried to write off prostitutes and porn as a “medical expense”.
Wait a second. Oil “programs,” federal misconduct, drugs, sex, AND bad accounting?! This might be the best thing I’ve read in weeks.
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NYT:

The Interior Department announced on Wednesday that it was ending an oil and gas royalty program that ignited a scandal last year when it was disclosed that federal employees had engaged in corruption, drug use and sexual misconduct with oil industry officials.
Ken Salazar, the interior secretary, told a House committee that he was phasing out the royalty-in-kind program, which is administered by the department’s Minerals Management Service. It allows oil companies to pay the government in oil and gas rather than in cash for the right to drill on federal lands. Recent audits have shown that the government has failed to collect tens of millions of dollars worth of royalties owed it under the program.

Everyone knows I am not the mathlete but tens of millions seems fairly clear to me. Did NYT really have to use “right to drill” in that too? This might be the seediest accounting scandal I’ve seen since the phone sex company that booked revenues too soon (I think that’s called the premature double entry method):

Four Star Financial was another firm with results too good to be true. Once a thriving financial services firm that paid as much as 18 percent on returns to investors, Four Star performed well for years. The closely held firm had invested in 900-numbers and collected on their unpaid receivables. It also made short-term loans at high interest rates. But when the 900-number industry began to slide in the mid-1990s, the firm (then called 900 Capital Services) sought new ways to pay off investors.
A class action lawsuit alleges that Four Star undertook a Ponzi scheme described as the “‘Argentina arbitrage transaction” defrauding investors of at least $40 million. The deal purportedly involved the sale of long-distance telephone arbitrage contracts in Argentina.
According to the Web site Four Star Fraud.com, which apprises former investors of ongoing litigation and company news, most investors–largely concentrated on the Westside–believed Four Star dealt exclusively in telecommunications. The suit further claims that both 900 Capital and Four Star had questionable investments from their inception.

Too easy. It’s almost as if they write themselves sometimes.

We Get It. PwC Wins Every Employer Award in the UK

annoying list.jpgThe UK’s annoying hot crush on PwC continues as the firm has won the The Times High Fliers Top Graduate Employer of the year award.
This is the sixth year in a row that P. Dubs has won this award. They were also named top accountancy firm for the tenth year in row and won the top finance company award this year, the first time an accounting firm has won the award.
We know it’s a little late on a Friday to be asking our UK friends to participate but we’d really like to know how P. Dubs manages to win all these awards.
The vote early, vote often mantra immediately comes to mind but is it legitimately possible that PwC is really the best place to work in the UK year after year? Whatever the case may be, it’s just annoying.
If you’ve done some time across the pond and have stories of Google-esque cafeterias, rub n’ tugs, puppies for everyone and the such, let us know, otherwise, debunk.
PwC voted best place for graduates [Accountancy Age]

Preliminary Analytics | 09.18.09

danny pang.jpg• Financier Pang Allegedly Had Drugs in His System at Death – “Newport Beach police believe the most likely explanation is that Mr. Pang, 42 years old, committed suicide, according to people close to the matter, but they are awaiting the coroner’s report for a definitive conclusion.” [WSJ]
• Investors, It Pays to Mind the GAAP Gaps – “Companies in the Standard & Poor’s 500-stock index earned an estimated $13.81 a share in the quarter on an operating basis, compared with $13.51 in GAAP earnings. That is the closest those two earnings measures have been since the first quarter of 2000.” [WSJ]
• Fed to screen U.S. bank pay policies: report – Basically, bankers would have to get approval from Dad before getting their allowance. [Reuters]
• UBS Tax Net Snares Clients of Credit Suisse, Julius Baer, LGT – Eventually, just for simplicity and fairness, everyone will have to tell everyone else where they bank. [Bloomberg]

Review Comments | 09.17.09

two thumbs up.jpeg• KPMG Corporate Finance Chief Steps Down – To get to know his family better. That’s nice. [PEHub]
• Deloitte Adds Hedge Fund Heavyweights Schubert, Iler – Deloitte making a strong move into HF biz? [Press Release]
• Grant Thornton LLP collects more than 110,000 cans of food for needy – That’s good. [GT Press Release]
• The Faces of RBI Presented by KPMG to premiere on ESPN2 – Also good. [MLB]
• Forty percent of U.S. junk bonds to default by 2013: BofA – Not so good. [Reuters]

By the Time Everyone is Converted to IFRS, We Won’t Need Roads

doc brown.jpgRemain calm IFRS fanboys and girls. You’re probably sick of our piss-poor attitude with regard to progress on anything remotely related to accounting rule convergence.
Well now you can tell us to suck it as the better-late-than-never anointed Chief Accountant, James Kroeker because he, “assured a roomful of accounting experts that the roadmap is on track,” according to CFO.
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We’ll give Kroeker credit for not using the economic crisis as an excuse like every other talking head or bureaucrat in the universe. No, his turning the tables, “Kroeker noted that the crisis may have, in fact, underscored the importance of IFRS. That’s because the discussions related to the credit crunch were global in scope, as were the responses and potential solutions, he added.”
Small issue: Kroek did admit is that even though a few companies could probably be coverted by 2011, most wouldn’t be required to do so until 2016. That’s all very nice but we’re sure we’ll all be driving flying cars by then.
Global Standards Alive and Kicking, SEC Accounting Chief Says [CFO]

McGladrey & Pullen Might Want to Think This Whole Divorce Thing Over

gulbis3.jpgThe accounting firm soap opera between McGladrey & Pullen and RSM McGladrey continues as RSM has filed notice terminating the two firms’ agreement and, under no circumstances, will they allow M&P to come crawling back to them without RSM’s involvement.
This was all included in a filing with the SEC, made by H&R Block, who is obviously the pimp in this whole love triangle.
Personally, M&P should probably consider going back to RSM’s sorry ass just to take advantage of the Natalie Gulbis exposure.
Judging by the firm’s response to our earlier mistake, they won’t be listening to us. Poor thing is caught in middle of this whole mess. Natalie, if you ever need to talk, don’t hesitate.
RSM McGladrey wants say in any reconciliation with McGladrey & Pullen [KCBJ]

Tax Grads in Colorado Can Get Over PwC Now

pwclogo.thumbnail.jpgLess than thrilling news out of the Denver office of PwC as a source has filled us in the firm’s plans for tax graduate students:
“PwC told tax graduate students at the University of Denver that they werent [sic] hiring again until September 2011.”
We touched on this last month, as campus recruiters have found that their intern pipelines will end up filling their full-time budgets for the following year. We can only assume that students specializing in tax at the other schools that P. Dubs-Denver visits are being told the same thing. If you’ve got news on firms’ hiring expectations at your school, discuss or drop us a line at tips@goingconcern.com.

Is the Era of Work/Life Balance Over?

work life.jpgDid it ever exist? We hope accounting firms have gotten their act together and don’t have to resort to more layoffs even though rumors still persist.
Whether the shooting is over or not, it’s a pretty sure bet that, at the very least, lots of you are doing the same amount of work with less people on your team. So any illusions you had about work/life balance before have progressed to full blown poppycock.
The question remains though, is your firm still pitching this as one of their “core rhetoric values” (insert respective buzzword)?
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Call us idealistic but it seems that with everything that has happened over the last 12-18 months, most firms would want to level with their employees. You know, give them the straight shit:
“Look, we’re really sorry but we’ve got to drop this whole work/life balance thing. We just can’t keep a straight face any more.”
It’s a very tricky situation that firms find themselves in since recruiting is in full swing. Painting the rosy picture for the recruits but leveling with current employees at the same time? Is this even possible?
What’s your firm’s latest message? Are they still encouraging the work/life balance or has slowly reached the “not applicable” stage? Did it ever exist for you at your firm or have you been deleting those emails since the day you walked in the door because you knew it was bupkis? Discuss in the comments.

(UPDATE) Unemployed? Living with Your Parents?

george-constanza_unemployed.jpgSince there currently aren’t any pictures of Gulbis on the front page, you may have already noticed but for Those of you that come here for the articles, we’d like to announce that the Going Concern Career Center is now live for you job searching needs.
Just click on the Careers link at the top of the page and you’ll be on your way to living well again and hopefully you won’t have to resort to doing the opposite.

(UPDATE) Rumor Mill: KPMG Making Pay Freeze Announcement?

There’s been rumors about pay freezes at all firms and E&Y came out last month to say it’s happening mostly because it’s fair.
Since many of you Klynveldians are probably anxious for some kind of “official” word, we’ll pass this along:

Rumor is the Radio Station will be announcing raises and bonuses on Monday/Tuesday in the Southeast next week (rates are loaded online on the self service connection next Friday for all to see, so talk about waiting until the last minute).
Firm leadership is saying KPMG will pay market and market rates are down when compared to the prior year… so here’s to no raises!

Ernstinites got a voicemail announcing the news which didn’t seem to go over well, so here’s hoping that some kind of live feed from Tim Flynn’s office will be KPMG’s approach for this announcement with Q&A to follow of course. More personal that way, don’t you think?
If you’ve got information on your city or region matching the market rates, drop us an email to us or discuss in the comments.
UPDATE, 2:57 pm: Apparently the offices in the Mid-Atlantic are willing to sit down with you to discuss this as we received a tip that “roundtables” were held by partners to explain the merit increases. Beats a voicemail. If you participated in one of these sit downs or had similar meetings in your region, discuss further.