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Category: Deloitte
Comp Watch: Sit Downs Starting at Deloitte; Anxiety Over Raises Picking Up
Lots of news this week on the compensation and promotion fronts with Grant Thornton, KPMG and PwC all making announcements or soon-to-be making announcements (that we’ve heard; are you holding out on us, E&Y?).
The latest out of Deloitte is that the discussions are starting (although maybe not today since it sounds like most are off) but the news on yay or nay on promotions is starting and now the anxiety around comp will increase over the next two month:
The year-end ratings and promotion decisions have been approved by National; so the process of communicating both to Deloittians is starting…At a high-level, I heard that promotions this year were tough – that being said, plenty of people made it through. For the most part, people are now waiting to hear about comp – scheduled for communication the last two weeks of August.
We did hear one rumor about the number of new partners expected, “at a recent partner meeting, it was announced that there will be more than 60 new PDPs nationally, with more than 10 being in the Northeast,” so you can toss that around your meat-ingestion fest this weekend if you so choose.
Discuss your epic/tragic news re: your new promotion if you’ve received word and keep us updated on the comp rumors.
Who Will Deloitte Buy Next?
Deloitte CEO Barry Salzberg did a little sit down with the Journal and made it perfectly clear that he’s shopping for another acquisition. The BearingPoint transition seems to have gone as well as Dr. Phil could have asked for and now he’s ready to move on to the next one.
But who?
Mr. Salzberg declined to name specific future targets, but said he sees opportunities to build scale in areas including environmental and technology consulting.
“I would be very willing to make another and very willing to position ourselves properly for the right kind of acquisition or a combination in the market.”
The Journal article mentions the recent rumors around Booz & Co. merging with A.T. Kearney but BS wasn’t that hot on the idea (even though D could take both either of them no prob) saying that they aren’t, “‘as high a priority for me’ as other opportunities.”
Plus, Salz is hoping that he can offering something tangible for a change rather than just billing all your hours out, “He cited a newsletter, or ‘information services,’ as an example of something that isn’t as labor-intensive as consulting but provides a complementary service to clients. Such a business ‘isn’t as dependent on the hourly production of people,’ he said.”
No target is too big or too small, according to Salzberg but like we mentioned, he’s not naming names. So let’s try and read his mind a little bit, throwing caution to the wind – McKinsey? DiversityInc Magazine? The Hair Club for Men?
Suggestions, sincere wishes and wild-ass guesses are welcome.
Today in Auditor Musical Chairs: KPMG and Deloitte Both Get the Boot
Evergreen Energy of Denver dismissed Deloitte effective June 23rd according to the company’s 8-K filing. Hein & Associates, a local Denver firm, will take it from here.
It stands to reason that Evergreen didn’t appreciate the going concern opinions that Deloitte gave the company for its December 31, 2009 and December 31, 2008 financial statements but in cordial SEC filing fashion, there are no parting shots from the company.
Evergreen’s press release indicates that this was simply an opportunity to throw some action to another firm (most likely with lower fees), “With the sale of certain Buckeye assets and our exit from the coal mining industry, Evergreen Energy has transitioned into a green technology company. This is an ideal time to switch to a Denver-based regional accounting firm with substantial public company expertise in the clean technology and software industries that can more cost effectively meet our needs.”
Deloitte’s letter to the SEC is abruptly admits that everything is cool rather than flat out saying, “you’ll be sorry you ever ditched us, you losers.”
Similarly, Measurement Specialties, Inc. showed KPMG the door for Ernst & Young. The company says everything was hunky-dory between the two although there was a small matter of the internal controls around a significant joint venture of which the company had no control. Oh, and the effectiveness of internal controls of some recent acquisitions also couldn’t be determined. But it was cool and the company said, “it was in the best interests of the Company to change its independent registered public accounting firm.”
KPMG has NFI what that means saying in their letter, “we are not in a position to agree or disagree with Measurement Specialties, Inc.’s statements relating to the reason for changing principal accountants.”
We wish everyone nothing but happiness.
BearingPoint Trustee Shaking Down Old Employees for Sketchy Expense Reimbursements
The Washington Post recounts Deloitte’s purchase of BearingPoint’s Federal Services business last year and as you might imagine it’s mostly a glowing piece about various aspects of the deal.
These include revenue growth “The company posted about $1.65 billion in federal revenue this year — up from combined revenue of about $1.43 billion before the acquisition,” the increase in headcount, “Deloitte hired close to 1,400 people, and the firm is now planning to add 160 to 170 more per month,” and expansion of services, “Deloitte had a more expansive set of services and products than BearingPoint — including tax, audit and consulting services — but BearingPoint, with more than 35 years in the federal business, had access to a larger set of clients.”
Sounds swell but there are some loose ends to tie up, most notably the trustee of BearingPoint’s liquidating trust is sending letters to former BearingPoint employees under the Deloitte roof to get some cash back for expenses that were deemed unnecessary for doing typical business in DC Metro:
John DeGroote, whose firm serves as trustee to BearingPoint’s liquidating trust, confirmed his company is now trying to reclaim BearingPoint expenses that were improperly reimbursed — either because the expense should not have been reimbursed or because the employee did not provide the right documentation.
The trust has sent out between 400 and 500 letters to former BearingPoint employees seeking $750,000 in expenses, $250,000 of which has already been returned, DeGroote said.
Since the “the expense should not have been reimbursed or because the employee did not provide the right documentation” you can safely assume that these were the standard three martini lunches at the District’s finer establishments, rub ‘n tugs and other expenses that would normally be a-okay but less-so when a rival buys you out.
BearingPoint acquisition has extended Deloitte’s reach [WaPo]
Deloitte Employees Enjoy Boozing, Checking Out Men in Uniform Thanks to G-20 Protesters
Protestors of this weekend’s G-20 Summit invaded Toronto this week which promoted some companies in the TO’s financial district to take extraordinary measures so that their employees wouldn’t be bothered by all the jobless ruffians.
Most shops just sent people home as a precautionary measure as protestors gathered throughout the week but some diehards are camping out, as FINS reports on StatPro North America’s office that is near the red zone that surrounds the Toronto Convention center:
Andrew Peddar, chief operating officer of StatPro North America, said that the firm wanted to ensure that its clients, which include asset managers and hedge funds, could be assured of uninterrupted service during the week.
The campout was the employees’ suggestion. That way, they’ll avoid potential disasters on the client front and also sidestep protestors.
“We have sleeping bags, lot of food and lots of liquid,” said Peddar. The axes? “In case we need to break out.”
Or chop off some ne’er do well’s arm, you know, whatever is necessary. Obviously these guys are overachieving, bedwetting amateurs that don’t recognize an opportunity when they see one.
Fortunately, Deloitte knew better and told all its employees to work from home starting Tuesday. Some used the unexpected time off to get enamored by the security, “Junaid Zia, a risk analyst at Deloitte, had most of the week off. When he left the office Monday night, he said he didn’t see any protestors, only a lot of policemen…’They should just do G-20 every year,’ he said.”
But at least one Big 4 veteran saw this as a perfect opportunity to do some weekday drinking:
[A] senior analyst at the office, took the opportunity to spend time riding his motorbike and watch soccer… “I went to a British bar for the England game, an Argentinian bar for an Argentina game, a German bar for a German game,” he said. “But I’ve been working.”
By Thursday, he was lying down at home, having injured his back. He declined to elaborate on how the injury happened.
Probably hurt it tracking that fantasy football team, no?
Compensation Watch ’10: Deloitte Is Kicking Around Some Numbers
Last we checked on Deloitte’s compensation news, it was news of the wealth being spread around more than last year, although no one was really impressed based on the discussion that followed.
But now out of Ronaldo Fan Club HQ we’ve got an opening bid:
“It was announced at a Tax meeting last Monday that the average raise for NE Tax would be 5% this year.”
Since Dr. Phil recently said that raises weren’t going to return to “pre-recession levels” an average raise of 5% may be in the ballpark. Then again, this is only the tax practice…
Anyhoo, our source told us that reactions boiled down to:
1. After axing or transferring everybody from the Stamford, Wilton and Hartford offices, they better pay the remaining people more!
2. At least it’s more than the average of 0% last year…
If you don’t fall into either camp 1 or 2, make your opinion known. Otherwise, get back to watching your fantasy team suck.
Satyam: Does Anyone Mind if We Take Another Three Months to Finish Our Restatements?
With just a couple weeks until the June 30 deadline for the company to issue its restated financial statements, Satyam is requesting just a little more time to get this mulligan nailed down. Three months to be precise.
Yes, they’re completely aware that it’s been nearly 18 months since the shit hit the fan. And yes, this is the third time they’ve asked India’s Company Law Board (“CLB”) for an extension on the filing but at this point they figure expectations are so low, no one will get too worked up over it.
Except for an “analyst with a leading brokerage house.” who is quoted in the Business Times, “There is no clarity on what is happening within the company. They should have at least provided the current sales figure or the bench strength. How is the shareholder supposed to rate their stock?”
Since more than a few people might be caught up in “sales figures” and whatnot, Satyam went to the trouble to let everyone know that they’re working hard, ordering in, etc. etc. so you can rest your pretty little heads:
A Satyam official said, “The records have been under the custody of investigating agencies and we recently got a court clearance. Also, our auditors (KMPG and Deloitte) told us they need some more time for the restatement. It’s only a matter of a quarter.”
See? It’s just a matter of a quarter. Plus, you can’t really blame them – KPMG and Deloitte are the ones saying they need more time. Satyam has likely been bugging them for months about wrapping up but KPMG and Deloitte are probably complaining, saying things like, “we can’t find any documentation to supports these numbers” and “this doesn’t add up.”
So, TFB if some whiny analysts don’t like it. We’ll just find out just how big of nightmare these financial statements will be in due course.
Everyone at Deloitte Worked for Free Today
As you may or may not be aware, it’s Deloitte’s 11th Annual Impact Day today:
“Deloitte is providing hundreds of nonprofit leaders from across the country with valuable counsel to help them deal with common business challenges, at no cost.”
That’s right friends, no one is – gasp – billing time! It’s a 100% green dot free-for-all across this great land.
However, we did speak to one source at the firm who told us that they haven’t participated in Impact Day in 3 years, “everyone leaves me alone so I can get something done,” so despite the message at Deloitte HQ that “no one is available to take your call,” and what you’re reading on Twitter, we know some people are working.
Obviously that’s lame but the real question is how many Green Dots called in sick and are currently getting blitzed watching the World Cup? And keeping an eye on their fantasy teams? AND maniacally laughing while watching Barry Salzberg live Tweet the whole day?
All Deloitte New Hires Want to Do Is I-F-R-S
No, really. They made a song:
Items of note:
– “Spin that beat” had to be requested twice.
– Things don’t get really serious until #20 gets off the stage.
– #21 didn’t know the words but managed to do the arm swinging quite well.
– The line, “My workpapers don’t lie” is obviously a lie. Everyone ghost ticks at some point.
– Calling out the tax practice for not having any swagger is a little presumptuous.
Other thoughts? Go.
It’s Ridiculous to Think That Enterprise Financial Dismissed KPMG Because of the Restatements
KPMG has been kicked to the curb by Enterprise Financial according to an 8-K that was filed on Friday by the company. The ubiquitous claim of “no disagreements with [insert firm]” was there along with a mention of a material weakness that was related to the restatements issued for both 2008 and 2007 but that couldn’t possibly have anything to do with the dismissal of the auditors:
In connection with the identification of the loan participation accounting error described in Item 7, Management Discussion & Analysis and in Item 8, Note 2 of the consolidated financial statements and elsewhere in the Form 10K dated March 16, 2010, the Company also determined that a material weakness in its internal controls over financial reporting existed during the periods affected by the error, including as of December 31, 2008. The Company’s management concluded that the material weakness was the Company’s lack of a formal process to periodically review existing contracts and agreements with continuing accounting significance. To remediate this material weakness, during the fourth quarter of 2009 the Company implemented a formal process to review all contracts and agreements with continuing accounting significance on an annual basis. As a result of the review conducted in the fourth quarter, management did not identify any other errors in its previous accounting for such contracts or agreements. Management believes that this new process has remediated the material weakness in the Company’s internal control over financial reporting.
So in other words, “Yeah, maybe we should have been looking at these contracts but we weren’t and so some material misstatements slid through. We’ve slapped some duct tape on it and it’ll be fine from here on it. End of story.”
The esteemed pleasure of auditing Enterprise now belongs to Deloitte who has now snagged three clients from KPMG this year (by our count) – picking up Jefferies and Select Comfort back in March.
Enterprise Bank parent dismisses KPMG [St. Louis Business Journal]
Deloitte’s World Cup Fantasy League Will Ensure That No One Gets Any Work Done for a Month
Deloitte is officially the first Big 4 firm to succumb to their World Cup fever. Understanding that a large portion of its 160,000-ish employees will be completely unproductive for the next month, rather than take reactionary measures, D has instead decided to encourage participation the Deloitte World Cup Fantasy League.
Don’t worry if you happen to work at a less cool firm that would never encourage such egregious behavior, anyone can play in Deloitte’s World Cup Fantasy League, so some KPMG folk can enjoy a little international competition and sport denim twice a week.
PLUS! You could throw some of your hard-earned money around based on PricewaterhouseCoopers picking Brazil as the favorite but Deloitte would rather you spend your precious chargeability obsessing over the hottest player about to go cold in order to win a replica of the World Cup trophy.
And if that’s not worth your time then maybe you aren’t capable of being pleased by anything. Except for perhaps more images of football stars with their shirts off.
[h/t The Big Four Blog]