Ahhh interns, gotta love 'em. Ernst & Young loves them so much they hold a yearly conference for the kids who stand out as best and brightest at Disney World, bringing out 1,800 interns from around the world last year. This year's party has just started but thanks to the EY Careers page on Facebook, […]
5 Times Square just wrapped up a giant light bulb changing exercise and figured a press release was in order: Ernst & Young LLP today announced completion of a lighting retrofit project in its US headquarters in New York City. The project's installation of energy-efficient lighting – one of New York City's largest lighting retrofits […]
Big 4 firms are well known for offering flexible working arrangements. They are designed to allow employees to schedule their jobs around life events. On paper, they sound great and even in reality, they work well for the people that take advantage of them. However, for the co-workers of these flex-life folks, we all know […]
In the past week, we have received several tips about an Ernst & Young OMP who was recently demoted to a less-BSD position. While that's the reality, we're certain that any internal messaging took quite a different tone with the partner in question ("PIQ") "transitioning to a client facing role" or some other euphemism for […]
The Boy Scouts of America has a difference of opinion with Ernst & Young CEO and BSA board member Jim Turley who last month came out against the Scouts' policy of excluding gays from membership or leadership. In short, "Thanks for your opinion, Jimbo, but we got this." An 11-member special committee, formed discreetly by top […]
As you may or may not know, Gwen Jorgensen is a tax accountant in Ernst & Young's Milwaukee office. She also happens to be an Olympic triathlete and will be competing at this year's Games in London. On the way to these accomplishments she obtained her CPA (scores not immediately available), and she was a Big […]
Apparently, lunch is a luxury in some of Ernst & Young's smaller offices. One of my seniors from our NYC office is working in St. Louis this week so we got lunch yesterday — Life at EY (@EYstaff) July 13, 2012 With these kinds of working conditions, maybe unions are a good idea for Big […]
From the mailbag: When are you going to start a compensation discussion for EY? Let me explain how this works – Adrienne and I are not mind readers. We cannot see you maniacally wringing your hands waiting for something to hit the wire so you have a place to bitch when you find out how […]
I guess when Boy Scouts of America board member Jim Turley spoke out about the Scouts' policy on gay participants in its questionably straight activities (dudes in scarves hanging out together in the forest? Come on), a bunch of people got upset. It's unfortunate we as a society aren't at a point where we can […]
We're getting word things are becoming a little claustrophobic over at Uncle Ernie's house. From the mailbag: In NY – FSO (EY) apparently there are so many high performers at staff 2 that discussions regarding ratings are still ongoing to help normalize the rankings. "Normalize" is never a good word. Animal shelters "normalize" their populations in the […]
Did anyone get an invite to the Ernst & Young Global Entrepreneur of the Year Awards? Yeah, me neither. In case you don't have a Google alert set up, Dr. James Mwangi, CEO and Managing Director of Kenya's Equity Bank Limited was named Entrepreneur of the Year in Monte Carlo. EY CEO Jimbo Turley gushed, "Over […]
JT's already has a sky-high approval rating inside E&Y and with this announcement it seems he's going for wider appeal: "I support the meaningful work of the Boy Scouts in preparing young people for adventure, leadership, learning and service, however the membership policy is not one I would personally endorse," Turley said in a statement […]
Recently, some high profile companies have been going public. Leading up to the big day, all kinds of people get ants in their pants because, contrary to what some of you believe, going public is AWESOME. There are roadshows, CNBC hype, and typically you get to ring a bell. Pretty sweet. Unfortunately, there are all […]
Last week we presented you with the worst farewell email committed to…err, email. At a shade over 3,000 words, I was forced to submit myself to the Clockwork Orange eye-opener just to get through the damn thing. There were many other objectionable attributes mentioned that we won't rehash here, but I got the sense that the lion's share […]
The farewell email is one of few art forms in the corporate world. There are good ones. There are bad ones. There are the ones that when you read them, you recognize its genius instantly. They are similar to street art in the sense that they have very short shelf lives; you will probably see […]
In the range of complex services provided by Big 4 accounting firms, counting votes for awards should be ranked somewhere between "easy as pie" to "I can do this shit with my eyes closed." Of course, sometimes even the simplest of tasks can go awry: After further review, Andrew Bynum finished all alone in fourth […]
Although it took a very awkward moment to get it: Even well-intentioned executives tend, often unconsciously, to dismiss women's contributions. At Ernst & Young, where 23% to 26% of leadership teams internationally are women, CEO James Turley told the WSJ conference that he was running a meeting years ago when "three or four women said […]
Ernst & Young Global CEO Jim Turley is being recognized for his work with the National Corporate Theatre Fund (NCTF) and he wrote a blog post over at Bloomberg BusinessWeek explaining how he became such a theatre buff: “I grew up in St. Louis. From the time I’m old enough to remember, I was lucky enough […]
Imagine my surprise when a link to the 2013 Vault Accounting 50 found its way to our tip box. It comes to us five months earlier than last year and I really didn't expect to see all of the Big 4 in the type five, especially the likes of E&Y and KPMG who were doing well […]
A tipster just informed us a short time ago that, "Tyson Chandler is in the lobby of EY NYC right now." This could mean he's there to cut a check with his extension, or he simply got lost on his way to Madam Tussauds. Either way, dude is huge, so you can't miss him. If […]
Rumor has it that the bobbies had to get involved because the situation "involved broken bar property": From: [Operations Manager Whose Responsibilities Include Being the Fun Killing Messenger] To: [Lots of People] Date: 11/04/2012 12:00 Subject: Behaviour at staff social events All, We recently held a BCM Strategy update meeting last week in London. […]
Look, you guys. I know the Big 4 isn't the most glamorous career you could possibly have and it's definitely not the ideal place to be showing off your finer physical attributes, but going on reality TV rarely falls into the category of good life decisions. I mean seriously, how bad do you need your […]
The Wall St. Journal reports: Groupon Inc. GRPN +3.84% said it was revising lower the financial results it reported for its fourth quarter, after discovering the company had to set aside more money for customer refunds. The online-coupon site, which went public in November, said its auditor, Ernst & Young, discovered a "material weakness in its […]
Ross Harper and Ed Moyse are a couple of Brits who created BuyMyFace.com to pay off their college debt. They started this little project back in October 2011 and by all accounts, it's been rather successful. They've been thrown out planes, shredding down wintry slopes, and go-karting [!] "all in the name of advertising." Ernst […]
The competitive poaching efforts of PwC have been well documented in these pages, primarily because the communications is really good at issuing press releases announcing the talent they've scooped up. Other accounting firms of notable size have not embraced the power of the poaching press release…until Wednesday when Ernst & Young announced that they had […]
Ed. note: Troubled this busy season? Email us your predicament at [email protected] For the most part, the emails we receive seeking advice are genuine. We have struggling GPA’ers and struggling interviewers. Managers tempted by the partner carrot and the curious public-to-public hopper. And generally, you all turn out solid, noteworthy advice. This is not one […]
February was filled with toilet humor and it appears that the posted rules of etiquette at Ernst & Young were taken very, very seriously by one office (that we've been asked not to disclose). I'm not really sure what kind events would have led up to an official posting of this magnitude but too much Tex-mex take […]
From somewhere inside 5 Times Square:
And no, before anyone asks, this has nothing to do with Lehman. According to the PCAOB, Ernst & Young settled with the Board yesterday related to three EY audits of Medicis Pharmaceutical Corporation to the tune of $2 million, the largest civil penalty levied by the PCAOB to date. Note that a settlement doesn't mean […]
Cripes, this Facebook IPO thing has people going bonkers so we figured digging up a little relevant information for you all was in order. Most of you probably knew that Ernst & Young was the auditor of Zuckerberg's playland but you probably aren't yet clued in to the members of the audit committee that E&Y […]
For many capital market servants, the idea of retirement is a dream. No more spreadsheets, no more commuting, no more awful happy hours where people discuss obscure accounting/tax/advisory projects that makes you put the finger-gun in your mouth and make sound effects. Nothing but beaches, international travel and living off of room service. RIGHT? Well, […]
Auditors are gatekeepers. Or something. They are trusted to keep client confidentiality on many matters and are entrusted with very sensitive information on a daily basis. They are paid handsomely for this so you can imagine the frustration a client must feel when something like this happens: Personal information about Regions Financial Corp. current and former […]
On Monday, we had a very serious discussion about business expense abuse. Who’s committing it? Why are they committing it? Can the fun be stopped? The discussion must have made its way to the hallowed hallways of Ernst & Young because yesterday an email went out to all FSO employees (and subsequently forwarded to us) […]
Moms. God love 'em. Where would we be if they hadn't sat up on the couch waiting for us to get home, wondering if we had been involved in some fiery car crash when we were, in fact, in backseat of the car that was perfectly still, fumbling with those damn hooks. We'd all be […]
Yesterday we broke the news of Mark Weinberger jumping into the big Black and Yellow chair when Jim Turley steps down next year. It's pretty big news for E&Y as JT has been running the show since July 2001. With all his fancy schmancy credentials, there's no question that Mark is up for the job […]
Ernst & Young has internally announced that Mark Weinberger will be the next Chairman and CEO of the firm. Mark is a tax guy, currently the Global Vice Chair of Tax but has a lot of experience inside the federal government serving as an Assistant Secretary to the Treasury of Tax Policy under President George W. […]
E&Y worked hard ignoring whistleblowers, goat poo assets, and cowering to unqualified CFOs to earn those fees from that Titantic of an engagement, so don't you think you can waltz into court and demand they give that money back. Ernst & Young, which was sued by New York in 2010 for allegedly helping Lehman Brothers […]
Nice job, E&Y. Hope to see the other Big 4 follow suit. Ernst & Young and its affiliates have begun reimbursing lesbian, gay, bisexual and transgender employees for any additional federal and state taxes they incur for their same-sex domestic partners’ medical benefits in the U.S., starting Jan. 1, 2012. E&Y is joining a small […]
Back in August, the PCAOB issued a concept release on audit firm rotation and invited anyone who had the time and/or energy to comment on it (as did we). In the wonky little corners of the accounting blogosphere, there was strong opposition to rotation from Jim Peterson and Francine McKenna (although their reasons differ from your […]
Yesterday, we discussed Deloitte stinking up the joint with its PCAOB inspection report. While the firm, at large, probably puts out hundreds of quality audits, the PCAOB gumshoes found that 45% of audits stamped with a green dot had deficiencies. Today, the Board stuffed our stocking with Ernst & Young's inspection report and while it's not […]
I hear from a trustworthy source that exiting Ernst & Young CEO Jim Turley was recently trolled by an eager member of Uncle Ernie's family looking to steal the throne in Canada. Someone else trolling him – asking how he can apply for his job. You know he's retiring in 2 years? So during the […]
You might have read this morning that Avon's CEO Andrea Jung is being forced out. Okay, so MAYBE earnings are down more than 42% on the year. And suuuuure, the SEC is investigating the door-to-door crew for “bribing foreign officials and improperly disclosing information to Wall Street analysts.” But forget the investment story here. This is a […]
Not sure how we missed this story but thanks to the random commenter who brought it to our attention. New KPMG Global Chairman Michael Andrew was recently interviewed by The Australian and it sounds like KPMG had a pretty kickass fiscal 2011.
We’re still waiting for the official revenue numbers (I’m guessing they’ll be out next week) but Drew kinda spilled the beans already:
New KPMG global chairman Michael Andrew revealed to The Weekend Australian yesterday that the company had recorded a 10.1 per cent increase in revenue in the past financial year, to $22.7 billion. The numbers are due to be released officially later this month.
“If we had not had the Japanese earthquake, I suspect we would have gone past Ernst & Young. Japan is a good market for us. We had really good growth in the Americas and really good growth in tax,” he said yesterday.
FUCKING JAPAN AND YOUR EPIC NATURAL DISASTER! You just cost one of the premier professional services firms on EARTH the chance to leave a rival in the dust. Since there was enormous death and destruction, I guess everyone at the firm will let this go but they’re trying really hard not to throw out some pro forma numbers just for the sake of argument. ANYWAY, for those of you scoring at home, the $22.7 bil puts the House of Klynveld slightly behind E&Y who racked up $22.9 billion for FY ’11. It will also make for the second straight year of a bumper crop of Omaha Steaks for the employees at the firm.
But despite earthquakes and actual hard numbers, Mike is calling it like he sees it:
“We are basically equal No 3. There is still a big gap to PwC and Deloitte, which have been buying large consulting practices in the systems implementation area.”
In other words, if all things were equal, KPMG would probably be the largest firm. They’re just keeping their heads about it.
KPMG grows to match rival Ernst & Young [The Australian]
Bloomberg reports, that E&Y was sued for “negligence, malpractice and breach of contract in connection with audits of financial statements over a five- year period,” which sounds like the standard fair in these matters. The pleasant surprise being the brevity of the suit. “The two-page filing doesn’t provide any details of the allegations against Ernst & Young,” which may cause you to wonder if it’s really just a one-page lawsuit (unthinkable, I know) with the second page simply stating, “This page is intentionally left blank.” Of course the downside here (aside from another lawsuit being lumped on the pile) is that E&Y’s lawyers won’t get a chance to rack up many billable hours just yet. Which is to say, there is no downside. [Bloomberg, Earlier]
If you haven’t already, please read Adrienne’s post on submitting questions to the site. I applaud her for hitting every damn nail on the head, and I want to echo her bottom line: we love hearing from you; the advice columns keep this place buzzing; but please check to see if we answered your question last week. I’d also like to add that the details you can provide (practice lines, office location, level, etc.) make it easier for us to offer more precise feedback. Keep ‘em coming.
In the meantime, consider this post as Example A as to what will happen when a lazy ass individual seeks advice they can find right under their noses. With this tried to find some shred of a question to answer, but instead I found myself screaming at my monitor. If this is the product of Helicopter Parenting, we as a society are screwed. Nevertheless, we’ll get right to it:
Hey GC, how’s it going? I am writing about making a decision between EY’s FSO practice and their TAS practice. Right now there is a lot of squawk about PWC’s FSR and EY’s FSO practices. These are both very hot topics and I believe relevant to readers, as seen after the EY FSO Assurance article [this one].
First off, you’re making a decision between two different options at EY, yet refer to the “hot topic” of PwC’s FSR practice (Financial Instruments, Structured Products and Real Estate). Let’s spell out some definitions for people here who are not familiar:
1. EY FSO – Not a practice but rather a term that stands for Financial Services Office. Per their website (which I Googled like any child can do) EY’s FSO practice includes all three lines of business: assurance, tax, and advisory. It’s a go-to-market philosophy/marketing strategy/organizational hierarchy more than anything else. Go to the website to learn more, if you’re so inclined.
2. EY TAS – Transaction Advisory Services – an advisory practice by name, includes a variety of services (due diligence, restructuring, valuation, etc.). Without splitting hairs here, a TAS associate will work on FSO clients (e.g. valuing insurance claims at AIG). Said associate could also work on a transaction involving a factory in Topeka, Kansas.
3. PwC FSR – Most closely related to EY TAS as it would fall under TAS if it were at EY. But it’s not. It’s at PwC, where you don’t have an offer. Again, not relevant.
Many students have accepted or are contemplating offers from the big 4, and there are rumors circulating that FSR and FSO employees work banker hours and get paid like consultants.
You are clearly new to public accounting, Going Concern, and the world in general. Get paid like consultants? WTF does that even mean? And for the love of God, you’re not working at PwC. Stop talking about it. Note: At this point the contributor goes on with a list of questions; my feedback at the bottom.
I am having trouble making a decision between TAS and FSO. For staff one’s in NYC, total year one compensation with salary and signing bonus is between 60-70 thousand on average. Not bad, but with what kind of hours?
On the other hand, TAS year one salary is about 55k, no bonus. What type of hours can be expected? Being that all new hires in EY FSO start in BAP [link for those playing at home], a 4 year rotational program, does good old uncle Ernie just rotate their staff through busy season after busy season? How much travel can be expected in NYC, aren’t most financial clients located in the city? FSO and FSR new hires are earning on average about 10k more than their audit and TAS counterparts. If the hours are comparable to these service lines, why so much more money? If the hours are much longer in FSO, does the staff ever receive a bonus? There must be a hitch…
Readers should note: This contributor happened to email us from a company email address of a flailing/failing/going-down-in-flames investment bank and – in this writer’s opinion – should be thankful to have ANY job at ANY Big4 firm. Turns out this person has already worked at EY during a previous (and VERY recent) internship and assumedly had ample time/networks/professionals/resources/access to the Internet to answer the above asinine questions.
The hitch is that you don’t have an offer from PwC, so drop the comparison. It’s like comparing my ideal commute to work (jet pack, duh) to the one I currently have (6 train, running with delays). Comparing a PwC FSR offer to an EY TAS offer would at least be a bit more relevant.
I’m going to ignore all questions about busy season hours/travel because you should have asked them while going through the interview process. After all, that’s the point of the interview process. I’m also going to point out that your statement that, “FSO and FSR new hires are earning on average about 10k more than their audit and TAS counterparts” is wrong on many levels. First, FSO includes auditors. Second, new hires within FSO make different salaries (tax hires make XYZ, auditors makes ABC, etc.). Finally, STOP COMPARING EVERYTHING TO PwC’s FSR PRACTICE.
What you do have:
1. An offer in EY FSO: What group? I don’t have a f*cking clue, and you never told us.
2. An offer in EY TAS: Which sub-group? There are six spelled out on the company website.
So, back to one the question in your email that hasn’t been answered at GC a thousand times before:
Hey GC, how’s it going?
Overworked and underpaid. Ring a bell? Take a number.
Bottom line: read through EY’s website to understand their practice lines and acronyms, something you should have done before emailing us. Also, consider taking a job in a “safer” practice…because the last time we had record Black Friday sales was November 2008…and we all know that the house was on fire then…
Ed. note: Have a question for the career advice brain trust? Email us at [email protected] with your problem(s) but only if you’re comfortable being mocked in an older sibling kind of way.
I know my question is somewhat specific but I just accepted an Internship offer for E&Y FSO Assurance in NYC and was interested in gaining some insight into the 3 divisions within FSO Assurance. First, I would love to hear your opinion on the pros and cons of each of the three sectors (Asset Management, Banking, & Insurance) including which EY is best known for. I was also wondering if there was a clear leader in each of those sectors in NYC and was wondering which of the Big Four was best nks so much for your help. I know I am still a year away from having to actually select one of those options but gaining people’s opinions never hurt. Thanks so much.
Congratulations on landing a sweet summer gig with Uncle Ernie. You’ll be working for a great firm in a great city making a great salary while fetching great coffee for your superiors. Cheers!
But really, welcome to New York. You’re smart in thinking ahead to the fact that where you start with your internship will lead to a fulltime offer with the same group. This is because internships are essentially training camp for your first year – make it through the summer successfully and you’re in the club. I did a little digging within my professional circle to uncover some of the EY clients that you’d have the potential of working on, as well as my own two Lincolns.
Insurance – Let’s start with this one because I have a feeling that the group consensus will be unanimous: DO NOT JOIN THIS GROUP. Sure, it is a small, “family-like” practice in the financial services industry, but you’re not coming to work for the warm and fuzzies (if you are, avoid public accounting altogether). You’re coming to make yourself a valuable asset to future employers – one, three, or ten years from now. Can you receive accelerated responsibilities and extensive interaction with your clients? Yeah, but that’s because your co-workers are jumping ship and no one within the firm wants to transfer to the Insurance group. Unless you have an absolute passion for the industry (which you don’t, since you emailed us), I would avoid this group. Stay in this group for five years (you know, to make the dream promo to manager) and you’re setting yourself up for a career working for an insurance (or re-insurance) firm.
Banking and Capital Markets – This group is bigger and more prominent than the Insurance group. It’s taken its hit in recent years because…ummm…the banking industry is in turmoil, but some of the pain has been buoyed by their growing Broker Dealer client base (also falls into this group). Potential clients include Bank of America (*gulp*), UBS Wealth Management (the shining star in the UBS sky), Icahn Securities, JG Wentworth, ING Financial Holdings, and Cantor “run for the hills” Fitzgerald. Sources tell me audit staff are constantly trying to take rotations to the asset management group, so take that for what it’s worth. Career advancement outside of public can take you to either a banking or hedge fund depending on your client exposure, but have you read the papers recently? Banking ain’t the hottest date to the prom to these days.
Asset Management – this is EY’s money train in New York when it comes to audit (and even tax) services. EY and PwC dominate this market in New York, and depending on whom you ask EY has a more rounded client base (blue chip and start ups). Premier clients include Eton Park, Reservoir Capital, Anchorage Capital, and Och Ziff Capital (do some Googling to get an idea about these firms). The exposure to different investment strategies and financial products you will see will be second to none. Don’t forget that you can count the relevant investment banks left standing on two hands, whereas there are thousands of hedge funds and private equity firms in the country (most of which are in the greater NYC area, too). Your easiest and most lucrative path out of audit and into the private sector will be with a background in asset management. Absolutely, positively, 100%.
So there you have it. As always, GC’er please chime in below with your comments.
They’re looking to fill 500 JITs with new Black and Yellows by June of next year.
Chicago Mayor Rahm Emanuel announced the jobs on Tuesday, saying the firm will start hiring immediately and hopes to have all the positions filled by June. Ernst and Young currently employs about 2,000 people in Chicago. The hires will be diverse across experience levels and include support workers.
Just remember that E&Y seems to be upgrading the gene pool, so uglies need not apply.
By way of the Ernst & Young Staff Twitter account, we learn that the young associates are quite fond of the snack drawer:
While I’m not one to condone such unhealthy life choices, I am not lost on the fact that these drawers of death are not uncommon. That said, if all of you out there in E&Y land insist on this type of sustenance, I suggest you get a pair and put down the whole drawer in a prescribed amount of time. The bankers and hedgies have been doing this for years and since many of you think yourselves worthy of their ilk, you should be able to hold your own in the mass consumption of factory produced crap. Anyone up for the challenge should provide a full inventory of the items to be consumed as well as the time limit and the prize to the winner should they emerge victorious. Additionally, I would need to be given a play by play in order to appropriately report the progress and results to the world at large.
We’re waiting. The gauntlet has been thrown.
I mean, you know how it is, when you lose $192 million. It’s a tough thing to forget. The Journal reports that the Garden State has renewed its lawsuit against E&Y saying “Those review reports were false, as E&Y knew or should have known that Lehman’s quarterly financial statements were not prepared in accordance with [GAAP].” When reached for comment, E&Y spokesman Charlie Perkins’s voice was barely audible on a nearly worn out tape recording, “Lehman’s demise was caused by the global financial crisis that impacted the entire financial sector, not by accounting or financial reporting issues.” Wouldn’t it be nice if Chuck had Nick DeSanto sing the statement? With a rock accompaniment? At least it would liven up this story again. [WSJ]
This past summer, a comely E&Y auditor was the subject of a missed connection for “personal and professional” reasons. As disappointing as that is, we’re hopeful that we can make true Internet love happen, as another E&Y employee is the object of someone’s Craigslist Missed Connections post, which makes us wonder if the firm’s recruiting efforts have taken a turn for the superficial. Regardless, this particular encounter is of anonymous affections but is far less creepy.
I had to split up the post since our lady friend opted not to use the “Return” button. The rest of it is on the next page.
Since this was in Rutherford, we’ll go out on a limb and say that this is a Secaucus employee. If you’ve got some idea of who, what and where, help us figure out a way to get these two together. We’re trying to make some love happen, people.
Look, I understand that these firms want well-rounded individuals but when more and more people start showing talents that outshine their professional services skills, it makes you wonder if the recruiting folks need a talking to. I bring this up because, unbeknownst to us, FORTUNE puts together a Battle of the Corporate Bands every year and this year’s winner is American PI, a 12-member band, 11 of which are E&Y employees. Granted, they won’t be winning Record of the Year any time soon since they’re simply covering I Heard It Through the Grapevine, Southbound, People Get Ready, and Superstition but they did have three members win “best of” awards.
Because business is good at E&Y. Not PwC good or Deloitte good but good enough.
Ernst & Young today announced combined global revenues of US$22.9 billion for the financial year ended 30 June 2011, compared with US$21.3 billion in 2010, a 7.6% increase. In local currency, revenues grew 5.3%. “We have had a very strong year in each of our four geographic areas. We continue to see very positive reactions to the way we have globalized our organization over the last few years, our investments in emerging markets and the great dedication and commitment of our people,” said Jim Turley, Global Chairman and CEO of Ernst & Young.
Also, Jimbo says that E&Y is “focused on building lifelong relationships with our people. This ensures we have outstanding talent to provide our clients the best service wherever they do business.” So if your heart belongs to show business, fine. But your ass belongs to Ernst & Young.
I don’t watch Glee. Hell, I don’t even have TV. I did flip through the GQ spread with Lea Michelle and Dianna Agron but otherwise, I’m completely unfamiliar with any of the characters on the show. ANYWAY, I hear it’s popular. It’s so popular that regular people want to be characters on the show as overblown versions of themselves and are submitting auditions for a chance to do so. One of these regular people is Nick DeSanto, an auditor at Ernst & Young.
More about Nick – he worked for a couple of years at McGladrey before joining E&Y’s
FSO Media & Entertainment group, where he’s been for about a year. We spoke to him over email and by phone (he “visit[s] GC almost every day”) and that this audition is his first stab at breaking into showbiz. Can you imagine if he had been involved with the In a JIT project? His singing career would already be on the fast track, winning Tonys and such.
So go over and support him at his Glee Audition page by liking his page if you feel so inclined. And even if you don’t feel the urge, go and like/vote for him anyway. Just because your dreams won’t come true, doesn’t mean you can’t support someone who’s trying to do something to achieve theirs.
Jonathan Weil has a column today on the train wreck that is Sino-Forest, the Chinese-Canadian timber company. In case you need caught up, there have been some questions about the company’s ability to report accurate disclosures and accounting. This led the research firm Muddy Waters to issue a not-so-flattering analysis of the company. Things like “Ponzi scheme” and “investing for the 23rd Century” don’t exactly get people jumping up and down for your company. Ask John Paulson.
Of course Sino-Forest didn’t do this all by themselves. They had credit rating agencies and auditors telling them everything was hunky dory for years and that’s Weil’s point. He reports that Fitch pulled its rating on S-F back in July and S&P finally pulled their rating this week. That just leaves Moody’s but guess who else is still hanging in there? Ernst & Young, baby! They’re still standing behind their audit opinions and showing no sign of budging. And JW is really curious to know who’s going to jump out of this tree first.
One question lingers: Which of the company’s paid opinion merchants will be the last to step aside? Will it be a credit rater? Or will it be the company’s auditor, Ernst & Young LLP in Toronto, which has yet to rescind any of its reports on Sino-Forest’s finances?
So far Ernst looks like the favorite, with only one rating company left in the hunt. Think of it as a contest between giant tortoises to see which one is slower. This time-honored ritual — of market gatekeepers waiting to blow the whistle until long after a scam has been exposed — has become so familiar, we might as well revel in the spectacle.
So these “gatekeepers” Weil speaks of – obviously this includes the Big 4. And it’s true that we’re all used to them waving their arms, screaming “DANGER!” in front of the burning heap that everyone has been aware of for ages (I didn’t say Lehman Brothers. Did you say Lehman Brothers? Who said Lehman Brothers?).
ANYWAY, E&Y should know that they have choices:
Ernst does have options, aside from bracing for the inevitable years of litigation and investigations. It could resign, explain why it is doing so and face criticism for acting too late. It could withdraw its previous audit opinions. It could insist to Sino-Forest’s directors that it be permitted to answer questions from the public about the work it has performed, as a condition of remaining onboard. Or it could hang on in silence, as it’s doing now, and watch its reputation endure more damage.
Could be that this is just another part of E&Y’s strategy. Sit tight while things play out, wait until things get really serious (i.e. bankruptcy, severe economic turmoil, civil charges, etc. etc.) and then come out swinging.
Tree Falls on Sino-Forest, Auditor Can’t Hear It [Bloomberg]
For the past 23 years, Primetime Emmy® Award winners have remained television’s best-kept secret thanks to the efforts of Ernst & Young LLP, part of the global Ernst & Young organization that is a leader in assurance, tax, transaction, advisory services and strategic growth markets. “We are extremely proud to be continuing what has become a 23-year tradition for Ernst & Young by maintaining the integrity of the Emmy® Awards tabulation process and the accuracy of the results,” said Andy Sale, Ernst & Young LLP, lead partner for the 2011 Emmy® Awards engagement. “The Emmy® Awards have a far-reaching impact on the television industry and it is critical that the balloting and tabulation process be implemented flawlessly.” [E&Y]
It’s been quite the year for the Chinese-based, reverse-merger clients of accounting firms. There have been curious press releases, audit workpapers held hostage, and the run-of-the-mill blowing off of auditor recommendations among other things. With all that, you probably figured the fun was over.
Not so! The latest in China-doesn’t-really-know-what-the-hell-it’s-doing news is the report that Ernst & Young has walked out on Zungui Haixi, an athletic footwear and apparel company listed in Canada. Why? Well, it’s not really clear but it sounds like Zungui has some explaining to do:
Zungui said auditor Ernst & Young LLP has advised its board that its has suspended its audit for the year ended June 30, 2011, until the company “clarifies and substantiates its position with respect to issues pertaining to the current and prior year”.
Ernst & Young recommended that the issues identified be addressed by an independent investigation, the company said in a brief statement that did not provide any details on the issues.
As we all know, “issues” could be just about anything from missing cash, to a CFO resigning. Hopefully it’s nothing quite so serious and the crack squad of investigators assigned to the task will get to the bottom of it and not wait for Roddy Boyd to pick it up.
Actually, it’s just for the kids.
Ernst & Young LLP, a global professional services firm, will be the Presenting Sponsor of a Guinness World Records attempt by local area elementary school students to make history with the “Longest Lemonade Stand.”
The record-setting attempt will be made Saturday, August 20, National Lemonade Day, in Beverly Park in Beverly Hills, Michigan, with proceeds going to support local school initiatives. The Longest Lemonade Stand record attempt includes an age-appropriate curriculum specifically designed to use the lemonade stand concept to teach kids basic business principles.
The students have already sold nearly 300 individual stand “kits” to families representing 16 area public, private and parochial schools. Participating families will bring their individually decorated stand sections to the park on event day to create the 1,200-foot-long stand required for the Guinness World Record!
Considering the fact that it’s not uncommon for local authorities to take a no tolerance stance on non-compliant stands, I hope Ernst & Young has informed participants that attention to detail is very important in business.
UPDATE: Don’t ask me why staff are singing a song about “Intern Dreams” but apparently that is the case, hence the change in the headline. Carry on.
After being away for awhile, many you probably thought that I get on here and bitch and moan how awful it is to be back to grind with you all. It’s been quite the opposite experience actually, as we’ve learned that Adrienne is more than capable of getting people’s attention that inevitably result in emails being sent directly to me while it was widely known that I could be doing any number of things at the time, including A) watching someone’s Vespa go up in flames in London B) eating space cakes C) speaking to French women with a bad American accent D) watching a shockingly violent fight at Amsterdam’s Gay Pride Parade.
But nevermind all that. Cooler heads typically prevail around here so it’s nothing that couldn’t be handled. Plus, it nice to know that I can leave for a couple of weeks and the site doesn’t miss a beat.
But what really makes my life easy is coming back to emails pointing me to the EYConnects Facebook page where you can find this video:
As any long time reader of GC knows, Ernst & Young runs away with from the rest of the Big 4 when it comes to producing videos that border on hilarity. No need to look further than the masterpiece of “In a JIT” to the video from the Las Vegas office featuring an Elvis impersonator.
While “EY Dream” doesn’t feature legendary lyrics like “On a jet like Turley” mocking acronyms and well-rehearsed choreography wins points in our book. Still would have been funny to hear some self-deprecating lyrics related to Lehman Brothers. Oh well, we’ll keep waiting.
Feel free to leave your thoughts on this latest effort below.
Subject: And When I Leave Come Together Like Butt Cheeks
You can figure out where this is going to go based on that alone, I’m sure.
Predictably, this email has been making the rounds since it was sent. If the OP was shocked it went viral in public accounting inboxes up until this point, wait until he sees it here. Names have been changed to protect the innocent, including the OP, who isn’t innocent at all but still deserves that. I think.
Guess who just got the fuck outta Dodge?! This guy! How many people had Craig Douchenozzlestein lasting until August 4, 2011 in the YMP pool?
But seriously, it is NOT easy to get out of these contracts. Im pretty sure it would have been easier to escape from Auschwitz th knew from the second week I start here that this wasn’t going to work out. I mean, working past 7pm cuts significantly into my drinking and foundling women time. So therefore, since October 28, 2008 when I was forced to work until 10pm on my fucking 23rd birthday, these wheels have been in motion.
I feel like it is probably appropriate to go over what got me to this point of release, in case anyone wants to take a similar approach and not have to pay back any tuition money and get a severance package.
The first breaking point for EY was during my staff 2 year when I lost an inventory count and the bitch of a senior manager WOULD NOT stop hassling me about it. Dude, I told you I lost it. No matter how many emails or sametimes you sent me, that sheet isn’t coming back. Get over it. Rose cried less when the Titanic sank. Needless to say, he personally wrote my review. Didn’t go over too well during roundtables.
The next “occurrence” happened in February 2009 during busy season. It was a Friday night and I was newly broken up with [the girlfriend] for the 24th time. That Saturday I had to work on [rando client] in the office because we just received their 10K. However, this was a minor inconvenience because 2 buddies from college were in town and I had a kitchen full of liquor waiting for them. During that night at the bars, I hit it off with one of the girls in our party and, as any guy knows, the first lay after a break up is as necessary as oxygen. So we leave to go back to my apartment only to realize I had given my buddy from college my keys so he could get in later. In a crime of passion and lack of forethought, I punched through our glass window to get into the lobby, only to realize the door to my apartment was still locked. Not letting this stop my teenage sex drive, we hopped a 30 minute cab to her place. The next morning I awoke at 11am realizing I should have been at work 2 hours ago. By the time I got to work it was 1pm, I reeked of booze and was bleeding all over the place because of my hand. AND I had forgotten my badge so called the senior manager to come let me in who greeted me with a “what the hell happened to you?” I also found out I had texted my senior the prior night while in the cab saying “Getting laid in West Randombury, Ill be at work ASAP” at 3am. Needless to say, my year end review mentioned something about “unprofessional” and “this is a career, not some part time job”
Those 2 situations resulted in me being held back for my staff 2 year. After that, there was not much anyone could do that would prevent me from doing what I wanted to do. I worked from home, ignored deadlines, and pretty much didn’t give a shit. I even made up some bullshit excuse that I was stuck travelling back from the Kentucky Derby in Pennsylvania during a 3/31 year-end just so I could catch up on the DVR I missed while away for the weekend.
The final straw that broke Camel Craig’s back resulted from a year-end job at the beginning of January. The Manager was a complete bitch and I spent most of my day exchanging texts with a girl I had met the prior weekend at the bar. She did not take kindly to this. But the breaking point for her was definitely when I didn’t show up til 2pm on that Friday because it was my roommates birthday the night before. Everyone knows Roommates birthday=Your Birthday, right?!?! That’s another thing that gets me about this place, everyone is so caught up in work they forget about enjoying life. Shit, life is so short (especially if you are a raging alcoholic) and is way too short to spend stressing over excel sheets all damn day. Every once in a while enjoy it! Take a sick day to go to the beach. Get hammered on your roommates birthday and come in late, have unprotected se…. well, maybe not too much enjoyment. But you get the message!
But I digress, I truly enjoyed my summers with you guys and the shit we got away with. I hope I was able to have a positive effect on your lives in some way, even if it was just “damn, at least Im not as bad as Craig . Did you see him lick the Backer pole last night?!” I hope you all keep in touch and wish you the best down the road.
If you guys are ever in the Random City area, Im always down to meet up. Just no rioting like we did when Joey and Dan were here.
Good luck to you in your future endeavors, “Craig,” you’ll need it.
Please note, we’re pretty sure this guy is a one-off and not at all reflective of the overall quality of his colleagues. Therefore let’s reserve any judgments for Craig and Craig alone. Judge away, my darlings.
… and it promises that if you just stick around for 12 years, you could be an executive, director, partner or principal.
Warning: the propaganda is absolutely raging in this piece of HR gold, dive into it accordingly (and turn your head to be able to read it).
The PCAOB has banned former Ernst & Young partner Peter O’Toole from associating with a PCAOB-registered firm for the next three years and fined him $50,000 for his part of a 2009 scheme to fake audit paperwork. E&Y removed O’Toole from the audit engagement team in June of 2010 and canned him several months later in September. The three year ban from audits is the longest bar that the PCAOB has imposed on a partner of a Big 4 accounting firm to date.
“These actions threatened to undermine the integrity of PCAOB inspection processes, and the ability of the Board to discharge its mandate to inspect the auditors of public companies,” said James R. Doty, PCAOB Chairman in a statement. “The Board moved swiftly to address this conduct, having commenced litigation against these respondents within seven months of learning of their conduct. I commend the Board’s Division of Enforcement and Investigations for its timely and effective work,” he added.
The PCAOB has also banned Darrin Estella from working with a PCAOB-registered firm for two years in connection with the improper creation, addition, and backdating of audit documentation in this case. Estella was a senior manager with E&Y’s Boston office and also let go in September of 2010.
The Board found that, shortly before a PCAOB inspection of an E&Y audit, O’Toole and Estella — acting with O’Toole’s knowledge and authorization — created, backdated, and added a document to the audit working papers that related to the most significant issue in that audit. The Board also found that O’Toole authorized other members of the audit engagement team, including Estella, to alter, add, and backdate other working papers in advance of the PCAOB inspection.
Additionally, the Board found that O’Toole and Estella provided a written document to PCAOB inspectors in which E&Y represented to the Board that no changes had been made to the audit working papers following the documentation completion date for the audit. Neither O’Toole nor Estella ever disclosed to the PCAOB inspectors that, in fact, the working papers were altered after the documentation completion date and shortly before the inspection.
The Board found that O’Toole and Estella’s actions violated PCAOB Rule 4006, which requires cooperation with Board inspections, as well as PCAOB Auditing Standard No. 3, which governs audit documentation.
The PCAOB has not released the name of the company involved, who hired E&Y as independent auditor in 2002. E&Y expressed an unqualified opinion on the company’s September 30, 2009 financial statements, which led to notice by the PCAOB that an inspection of the unknown company’s audit was being performed on March 30, 2010. The partner, senior manager and manager on the engagement were given notice on March 31, 2010. The inspection fieldwork was set to begin on April 19, 2010.
This comes on the heels of an earlier PCAOB decision which censured 27-year-old Jacqueline Higgins for her part in the scheme. Word is she has since taken a job with McGladrey’s Boston office (unconfirmed rumor), who could probably use the help.
We’ve received several short, anxious emails (presumably all from Uncle Ernie’s nervous camp) tipping us off to the fact that E&Y comp discussions are going down this week, so it must be true. Of course, this post is useless without actual comp numbers, which we’re sure you’ll give us as soon as you have your sit-downs.
Hi Going Concern –
To give you heads up, E&Y comp and promotions dicussions [sic] are happening this week (they’re happening today in my office). Perhaps it’s a good time to open the new thread on the topic.
Great, so does this mean the Ohio and Michigan crews have already packed up and are ready to bail if they get anything less than whatever it was they are holding out for?
Rumors so far are that raises will be in line with last year’s, which were not at all disappointing considering that we are still (not technically) in a recession, not to mention all that Lehman drama the E&Y lawyers are still hashing out. Too soon? Anyway, as usual, you’re welcome to entertain each other with disparaging comments about the size of your, er, comp packages until we hear news on actual numbers.
Update: Looks like some pretty good numbers are rolling in but please, for the sake of your fellow EY brethren, if you want to share your comp info, be sure to at a minimum include where you are (general metro or region is fine), what service line you are in, your rating (hint: this is a number) and, of course, the actual new pay and bonus number (if any).
FT Alphaville found this notable quote from District Judge Lewis Kaplan’s opinion (whole thing after the jump):
The TAC alleges that Lee told E&Y in June 2008 “that Lehman moved $50 billion of inventory off its balance sheet at quarter-end through Repo 105 transactions and that these assets returned to the balance sheet about a week later.” Assuming that is so, E&Y arguably was on 308 notice by June 2008 that Lehman had used Repo 105s to portray its net leverage more favorably than its financial position warranted, a circumstance that could well have resulted in the published balance sheet for that quarter being inconsistent with GAAP’s overall requirement of fair presentation. Accordingly, the TAC adequately alleges that E&Y misrepresented in the 2Q08 that it was “not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles” notwithstanding Lee’s disclosure to it.
“Lee” you may remember is Matthew Lee Lee, the Senior VP for Global Balance Sheet and Legal Entity Accounting who also said this about E&Y’s reaction to his warning on Repo 105:
They certainly didn’t support it. On the Repo 105 issue, they knew about it; they did not appear to know that the number was so large.
This just in:
I have been talking to a variety of people at E&Y from several offices in Ohio and Michigan. The word from them is that there is going to be a significant movement of people once compensation info is passed out. It’s kinda conflicting since the rumor is that raises should be around what they were last year. Not sure what to make about it.
As you recall, last year’s raises and bonuses at Ernst & Young were competitive with PwC, which came as a pleasant surprise to everyone at Black and Yellow but understandably this rumor has our tipster in a flummox. Of course, this could be limited to the Ohio/Michigan area but it’s worth seeing what the Turley’s Troops in other areas are hearing. Share below.
The Oakland Tribune shares this charming story of an accountant who discovered her talents would be more appreciated in helping animals:
Like many people who love animals, Sue James dreamed of becoming a veterinarian when she was a child.
“I looked into going to vet school but my parents, they wanted me to pursue a more traditional career,” said James, a Danville resident who grew up in a house in New York state where the family pets included dogs, rabbits — even a monkey.
After a long stint in the corporate world, James found an outlet for her lifelong love of animals at Tri-Valley Animal Rescue, an all-volunteer group founded in 1992 with a mission to prevent the unnecessary euthanasia of shelter animals.
Uncle Ernie gets a badass plug in the next bit:
She started volunteering in 2005 as she was winding down a long and successful career at Ernst & Young. There, she was a partner who oversaw audit work for some of Silicon Valley’s leading high-tech companies. Today, she serves on the boards of Yahoo, Applied Materials and Coherent.
Working at Ernst & Young, she learned the importance of teamwork to meet the needs of clients. That focus also carries over to her volunteer work. “It’s about the cats and dogs,” she said. “But also, for me, it’s how can we work effectively as a team.”
It makes sense that she’d end up at the shelter; from what I hear, actual auditing isn’t much different.
By the way, she’s 65. She holds a bachelor’s in math from Hunter College, New York (1967) and bachelor’s in accounting from San Jose State (1975). She taught math and science in junior high and high school in New York state from 1967-69, worked in San Jose office of Ernst & Young starting in 1975, was named partner in 1987, retired in 2006, then consulted for the company through 2009.
with a stick.
Jim Turley, Chairman and CEO of Ernst & Young says, “Building the next generation of partners to lead our business is vital to our future. This year’s marked increase in numbers reflects our ongoing commitment to excellence and our confidence in the future.”
John Ferraro, Chief Operating Officer of Ernst & Young says, “These admissions are the result of a rigorous selection process and recognizes the significant contribution of each individual to our success. This is a strong vote of confidence in the leadership potential of these outstanding individuals.”
Congrats to the all the new partners at E&Y!
Since this feels like one of those days where everyone is at a ball game or is so hung over that they can’t operate their email, I’ll share the latest news from the mail-cum-money bag:
@EY – Just got an email saying we need to meet with our counselors before 7/31 to discuss annual review. I doubt any comp info though.
Even if these chats don’t involve any numbers, they may be useful in one of two ways: 1) It gives cranky employees the opportunity to fly off the handle because this last busy season was a special kind of personal hell and that no amount of money can possibly make up for that. or 2) It may be the perfect time to inform counselors about what kind of numbers are being thrown around at another firm who the Black Yellow had no problem keeping pace with last year.
Smiling and nodding works too, if that’s more your speed.
Last week, we tried to get the ball rolling on Ernst & Young compensation rumors and while some may chalk up the lack of chatter to “PwC sticker shock,” others claim this is simply standard operating procedure. If you remember last year, eventually Ernst & Young reported some impressive raises that kept pace with P. Dubs but one of Turley’s troops is expecting the worst this year and would like to give a partner a piece of his mind. Unfortunately, he isn’t sure how to do it:
By way of introduction, I am a loyal reader of going concern as well as a big four slave in the audit practice. Slavery had begun four years ago at EY and with all the compensation talk going on at other big four firms, I can’t help but to think –
What is a tactful way of telling a partner during the comp talk, “well thank you for that oh so very generous double digit percentage raise (assuming if it’s even double digit), but I am still unhappy because even after this supposed raise, you are still not paying me jack for the amount of contribution and commitment that you demand from me.”
As noted above, I’m a second year senior from an east coast office and my base is still not breaking mid-60s. Seriously, what the f___?
I will be forever grateful if you post my question up for discussion. Thanks so much!!!
Angry EY audit senior
There are various directions we can take here so I’ll try to cover a few options before turning it over to you all.
A. Start off with a variation of, “Look, I’m an ungrateful, bitchy auditor. I also have unrealistic expectations and an inflated notion of my self-worth. I’d really appreciate an explanation as to how you can reconcile these traits to this paltry 10-15% raise.”
B. Continue with the slavery narrative.
D. Simply ask if E&Y’s raises will beat PwC’s.
Now you may not think these are “tactful” ways to have this conversation but he did sign, “Angry EY Audit Senior.” If I tried to reason with this person, I’d be doing him a disservice. And when is honesty ever not tactful? If you sugarcoat your frustration, the partner will assume you’re a pushover like everyone else. My guess is most partners want you to give it to them straight. If you’re a performer (and something tells me you think you are) than this partner doesn’t want to lose your talent.
Having said all that, not everyone can muster up the courage to ditch the filter in these meetings. If you’ve got better more practical ideas than what I’ve listed, feel free to bestow your sage advice below.
If I seemed impatient about hearing from the Black and Yellow, it’s because I was. Fortunately, someone answered the call:
As of now, we haven’t heard ANYTHING regarding raises/bonuses etc. On our performance management internal website the status of my annual review just changed from “Leadership Review/Roundtable” to “Release to Compensation” so hopefully we will be getting some news soon!
So, no news is…news, isn’t it? Last year, we started hearing Ernst & Young compensation rumors around the 15th and here we are, one week from our nation’s birthday and hardly a peep. Someone buy a partner a happy hour beer tonight or something, wouldja? Keep us updated.
I’ve been out of the numbers game for awhile now but for the life of me, I can’t figure out just how many people Ernst & Young will be hiring off campus for this year. Or is it last year? The firm put out a press release yesterday that states that it “will hire approximately 5,000 students from campuses across the US in the 2010-2011 academic year.” That’s all fine and good but it’s different from the report in CNN back in March that we told you about that said “It’s looking to hire 7,000 employees from college campuses — 4,500 full-time and 2,500 interns […] in 2011.”
That report also stated that “campus recruits are up 20%,” but yesterday’s press release said “campus hiring [increased] 25 percent from last year.”
All told, E&Y and the rest of the Big 4 are hiring lots of people but the numbers don’t quite add up. The nice folks at E&Y are trying to help me out, so I’ll report back when I’ve got some answers.
UPDATE: I’ve been informed by an E&Y spokesperson that “numbers referenced in the release are for the US, whereas the numbers cited in the Fortune article are for the Americas.” To clarify, the “Americas” includes the U.S., Canada, Mexico, Central America, South America, Bermuda, the Bahamas, the Cayman Islands and the Caribbean.
[via Ernst & Young]
Some clients treat their auditors like dirt. Given. To these haters, the financial statement audit is an onerous task that is mandated by the SEC and it amounts to an assault on liberty, capitalism and Ayn Rand’s genius. Accordingly, some clients try to push auditors around because typically they can. Today we bring you a rare example of a pushy-ass client going too far and an auditor standing up for themselves.
Ernst & Young resigned at the auditor of Life Partners Holdings Inc. in a letter dated June 6, 2011 after the CEO, Brian Pardo, WROTE IN A MEMO that he would “take action” against the firm if they did not sign off on the financial statemen t committee got wind of this little soapbox moment and promptly told E&Y about it.
From the 8-K Filing:
On June 6, 2011, Life Partners Holdings, Inc. (“we” or “Life Partners”) received a letter from Ernst & Young LLP (“Ernst & Young”) addressed to the Chairman of our Audit Committee (the “Resignation Letter”) confirming that it had resigned effective June 3, 2011, as our independent registered public accounting firm, as had been orally communicated to the Chairman of the Audit Committee on June 3, 2011. The resignation means that Ernst & Young will not certify our financial statements for the fiscal year ended February 28, 2011 (“Fiscal 2011”), which is necessary for completing and filing our Annual Report on Form 10-K for Fiscal 2011 (the “2011 Annual Report”).
The resignation follows a letter from Mr. Brian Pardo, our Chairman and CEO, to our licensee network (persons who refer purchasers to us) commenting upon the delayed filing of our 2011 Annual Report. The letter stated that it was Mr. Pardo’s position that we would “take action” against Ernst & Young if it did not promptly complete its audit and sign off on our financial statements without adjustment. Our Audit Committee wrote to Ernst & Young disclaiming the letter’s statements and asserting that the letter did not speak for the Audit Committee. Notwithstanding the Audit Committee’s disclaimer, Ernst & Young stated that the letter compromised its independence, and when considered with other recent developments, that it was no longer able to rely upon management’s representations, and that it was unwilling to be associated with the financial statements prepared by management.
Just for good measure, E&Y also stated that the company’s revenue recognition policy sucks, needs revised and they pulled their unqualified opinion over the 2010 financial statements. How’s that for “action”?
As noted by the first comment below, the second comment on a post over at Deal Journal has what appears to be the memo in question from Brian Pardo.
Message From Brian Pardo
Yesterday we filed for an extension of the time to file our annual10K which should have been filed by May 15th because the Auditors have not yet completed their part. Quite frankly I am confident that the SEC is interfering with us by trying to unnerve the Auditors (by asking frivolous questions) which has added to the delay in getting out the 10K which is done and ready to release. They are trying to force us to “restate” our revenue recognition criteria; one that has been in use for ten years now.
Restating for any period, for any reason is viewed by the market as an implicit admission that prior quarters were probably misstated, which they were not. We do expect to file shortly, but the WSJ called last night to print another negative article.
There is no reason to restate because any proposed adjustment is immaterial under GAAP guidelines. E&Y signed off on our revenue recognition criteria policy last year and every other audit firm has as well since we went public in 2000. However some of your clients will probably read about it in the WSJ or in some other supposedly legitimate news media. And, the shorts will no doubt make a big deal about it.
My position is we either ratify the 10k as is very soon or we will take action against E&Y as well as with the SEC in Washington. It is time to put an end to this nonsense! I believe E&Y is trying to mitigate problems they may have with the SEC at our expense. For instance, we were never told by E&Y that they audited at least one large organization in the Madoff matter.
We are well within GAAP boundaries regarding every of aspect of our financial statements including all materials created, used or reviewed in relation to our published financial statements. We have ten years of doing this the exact same way and every Auditor from every firm for the entire time has signed off on every single 10k over those last 10 years.
Brian D. Pardo
PS You are authorized to share my statement with concerned clients and Licensees, but, not the press although the matter is in the public domain now.
It’s not everyday we get news from north of the border, so it’s nice to see our Canadian friends reaching out to us. If you’re from the True North and have some gossip or other newsworthy items to share, send them our way. As for today’s news, we’ve been informed that Ernst & Young’s Toronto office has given the green light to their employees to rock half of the Canadian Tuxedo starting this Friday through Labor Day. Our tipster was quite excited about this since, “This is unheard of in Big 4 accounting firms in Toronto.”
If you watched my “[Toronto OMP] Korner” video from last week, you’ll know that the topic of Jeans Day was discussed.
I know many of you have been waiting for a few Jeans Days in the [Greater Toronto Area], so I’m pleased to share that there will be many opportunities for you to wear your best jeans to work over the summer months.
Starting this Friday, 20 May until 2 September, every Friday will be Jeans Day.
From time to time we’ll add a charity-challenge component to Jeans Day. However, for the most part, feel free to wear your best jeans to work on Friday just because.
Retaining a professional appearance is important to us — even when wearing jeans. Please — no rips or tears in your jeans, no t-shirts or running shoes either. If you’re seeing a client on a Friday, please wear your usual office attire.
Managing Partner, [Greater Toronto Area]
All the emphasis is the original, so you know when “best” is best, the Toronto brass means business. Per usual in these situations when you give an inch of denim, some people take a mile of looking like a complete slob, so please pass the warning on to the Toronto leadership.
Big 4 firms have a staunch pro-denim track record here in the States, as E&Y’s FSO was given a similar reprieve from the drabness of the business casual uniform last busy season and KPMG’s Summer Blast last year. It’s likely that you’ll be seeing more denim around the office the summer again this year but we’d be very interested in seeing pictures of some egregious vilolations. So if you fancy yourself a member of the fashion police and see a perpetrator, take a pic and send it our way.
We’ve heard from a couple people that Ernst & Young had an “all hands webcast” of some kind today but so far, no one has given us any details as to what was discussed.
Of course there were probably kind words about all your hard work this busy season, your commitment to the firm and so on and so forth but we want to get to the crux; this calls for speculation on our part, until we get something more solid. Possible topics include:
1. Hazing methods for the folks from LECG Corp.
2. The announcement of special screenings of In a JIT.
3. Two minutes’ hate for a certain Governor.
4. Mysterious references to “exciting changes” to the compensation structure that won’t be revealed until “details” are sorted out (i.e. management knows what PwC is doing).
5. Your input.
From the mailbag:
I will be a full time Advisory intern at Ernst and Young in Manhattan this coming summer. The duration of the internship is 7 weeks starting mid June. We just received a raise in our salary which has me thinking about compensation.
As you know, interns receive overtime which can contribute significant weight to overall pay. After researching the internet and the GC archives, I have not been able to find a clear answer regarding what I can expect for overtime hours. I know this varies by firm, workload, work groups etc but can you estimate an average of overtime hours per week? If any?
Right you are, grasshopper – it will depend on various factors you mentioned as well the clients you are assigned to, and what kind of expectations your superiors have (maybe that’s what you mean by work groups?). ANYWAY. In all likelihood, you’ll see some overtime hours which will probably result in some nice paychecks this summer but don’t be surprised if managers are staying on top of the hours you’re working. The Big 4 and other accounting firms aren’t quite as loose with the wallet as they used to be so I’d guess your hours will top out somewhere in the 50s on a weekly basis. That puts you in the range of 10 to 15 hours of OT a week (20+ only for those who work for lunatics). If your senior isn’t a headcase then you can expect 40-50 hours a week.
If you fancy yourself a intern hour handicapper, throw some numbers out there. And, interns, when things get rolling, get back to us with your numbers.
A little bit of fresh news from the LECG implosion as Ernst & Young announced yesterday that it was picking up thirty professionals to add to its insurance tax and life actuarial practices in the firm’s Financial Services Office.
These LECG refugees are led by Chris DesRochers and Greg Stephenson, according to the release, and E&Y is thrilled to have them, “This represents a significant addition of intellectual capital to our insurance tax and actuarial teams,” said Carmine DiSibio, Vice Chair and Managing Partner, Financial Services, Ernst & Young LLP. “We were very fortunate to be able to add so many experienced professionals at one time — additional talent that greatly enhances the breadth and depth of the services we provide.”
If you followed last week’s “Role of the Accounting Profession in Preventing Another Financial Crisis” hearing before the Senate Banking Subcommittee on Securities, Insurance, and Investment, you may have noticed that “Ernst & Young” was never uttered by anyone on the panel, although Lehman Brothers was mentioned a number of times throughout the hearing. Anton Valukas, the bankruptcy examiner for the Lehman, was there after all and “Ernst & Young” appears in his report probably thousands of times. So why wouldn’t Ernst & Young be mentioned? This is a hearing about the accounting profession preventing, after all and Mr Valukas has stated in his report and elsewhere that “colorable claims” could be filed against E&Y. Stands to reason that perhaps the firm would come up at some point.
Also, if you followed the hearing with us on our live-blog, you definitely heard Francine McKenna and I complaining about the sorry turnout by the members of the subcommittee. The majority of questions coming from the subcommittee chairman, Senator Jack Reed (D-RI), with a few from Senators Kay Hagan (D-NC) and Jeff Merkley (D-OR). The eight GOP members were nowhere to be found. Now maybe accounting isn’t the sexiest of topics but it’s hard to argue that this wasn’t an important hearing where many questions could have been asked of an industry that witnessed excrement coming into contact with an old Century. However, after a tip from a person familiar with situation, we may have an idea why there was such a pathetic turnout:
[T]he auditing firms did not like it they were holding the hearing and E&Y really was complaining to Reed that Valukas had been invited. As a result, the Republicans agreed that none of them would attend the hearing which in fact, none did.
Gotta love spiteful absence! Obviously we had to call around on this one and Ernst & Young spokesman Charlie Perkins declined to comment. As for the Republican members of the subcommittee, we have…well, nothing else to share at this point. But we’re hopeful! It’s entirely possible that all eight GOP members had something better to do than ask questions of industry experts that had a front row seat to the financial crisis, but then again the hearing was pretty early in the morning.
UPDATE: A spokeswoman for Senator Mike Crapo, the ranking member on the subcommittee, informed us that Mr Crapo was sick last Wednesday and canceled all his appointments for that day.
The firm that wouldn’t be named adds the Philadelphia-based company to the advisory business.
“The acquisition of ISA Consulting is part of a broader strategy to expand Ernst & Young’s already strong presence in the performance management and analytics market,” said Bob Patton, Americas Advisory Services Leader, Ernst & Young LLP. “ISA Consulting’s reputation for quality service and integrity, as well as the experience of their team, makes them a great cultural fit with Ernst & Young.” Just don’t get mixed up with those auditors. [PRN]
Having seen the rabid crowds outside FAO Schwarz to see this guy first hand, it’s hard telling what kind of internal battle there is at E&Y to rub elbows with Harry Potter (even if he’s likely to be sans spectacles).
Daniel Radcliffe will be honored by The Trevor Project with the Trevor Hero Award during “Trevor LIVE” at Capitale (130 Bowery, NY, NY). The annual show benefits the life-saving work of The Trevor Project and will also honor Ernst & Young LLP with the Trevor 2020 Award.
If you’re not familiar with the Trevor Project, they do great work, focusing on “suicide prevention efforts among lesbian, gay, bisexual, transgender and questioning (LGBTQ) youth.” Kudos to E&Y for the recognition.
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.
It’s been increasingly obvious that Ernst & Young has the most talented video producers amongst the rank ‘n’ file Big 4 professionals. Last year we saw a video from the Las Vegas office (it was pulled) that was not the most impressive in terms of the talent presented but a Elvis impersonator made up for the rest of the group.
More recently from the Black and Yellow we’ve seen a farewell rock video and a mockumentary from across the pond (also pulled) that both demonstrate the sort of right-brained capabilities that exist within E&Y. Today, we bring you the latest in epic E&Y videos that brings voice to the frustration of being stuck in a JIT (“just-in-time”) cubicle.
So there’s a lot to digest here but I’ve got my favorite moments picked out:
1. I’m not sure who wears vests to the office these days but it’s fashion-forward and I like it.
2. Cursing right off the bat (and not letting up) score bigs points with Adrienne.
3. A Flavia diss is always apropriate.
4. Best lyric ever: I’M THE KING OF EY; ON A JET LIKE TURLEY; YOU’RE IN PUBLIC ACCOUNTING, NO YOU AIN’T LEAVIN’ EARLY
5. Kicking the roller was mean (but hilarious).
6. They should have known they were doomed when they wrote the lyric about a partner “seeing me now.”
7. Chuck Norris? Obama? Paddycake? Things really took a strange turn at the end.
The word from the tubes is that it’s been making the rounds inside and outside E&Y so we’re not exactly sure when this was made but our tipster was a little miffed about the possibility of these guys not having anything to do:
Here’s another video produced by auditors in the midst of busy season who somehow find time for this shit. This one comes courtesy of EY San Jose. Apparently it’s been making it’s rounds inside (and outside) of EY all day. HR must be thrilled at this use of company time (and property, from what it appears).
Apparently it never occurred to our tipster that this was a firm-sanctioned production since the Vegas vid went over so well. There’s only one way to find out so I left voicemails for both of these guys to try and get the behind-the-JIT story. So far I haven’t heard back from either of them but it’s still a little early out in San Jose. But whenever you can guys, email us.
Your thoughts on this latest bit of video ingenuity are welcome at this time.
This came by way of Jersey (this Jersey, you idiots) and the footage is incredible.
A few things that I observed and/or learned from watching this video:
1. “Duckling syndrome” is something I was familiar with but not that it had a name or was a syndrome.
2. All tax professionals seem to behave exactly the same, no matter where you encounter them.
3. Apparently this was filmed on a casual Friday based on the denim worn by the guy that appears at the 4:00 mark.
4. Timesheets are due at 5:30 on Fridays?
One thing that was less surprising:
1. “At some critical stage in their development, tax professionals generally fail to attain the basic skills necessary for social interaction.”
Leave your own observations below.
Lehman Brothers Holdings Inc (LEHMQ.PK) filed for bankruptcy on Sept. 15, 2008 and then quickly sold its prize investment banking assets to Barclays Bank (BARC.L). JPMorgan had been Lehman’s banker. The court papers, filed in U.S. Bankruptcy Court in Manhattan on Thursday, said that Barclays and Lehman called certain Lehman assets “toxic waste” and “goat poo” and knowingly excluded them from their sale agreement.
Jim Turley has been a willing participant in this whole thing so far but were far more interested in what you guys think.
Welcome to the where-the-hell-is-Bahrain? edition of Accounting Career Emergencies. In today’s edition, a future E&Y tax associate wants the lowdown on the black and yellow ladder. How high are these rungs, anyway?
Caught in a career conundrum? Have a co-worker that keeps swiping your red Swingline? Want to put the moves on a fellow auditor in the copy room? Email us at [email protected] and we’ll help you avoid anything that involves in a knuckle.
Back to our girl on the partner track:
I will be starting in the tax dept of a Big Four soon.
How long would it take to move up the tax ladder? (Yes, yes I know your response will be to start first before I start thinking about promotions… But I am thinking ahead…)
What is the minimum number of years typically required at each level? Are exceptions ever made? What goes into promotion decisions? How long would it take to get to the partner/director level? Is the promotion criteria generally standard across all Big Four or is there some variation?
Ms. Thinking Ahead
Dear Ms TA,
You’re quite the eager….errr, go-getter aren’t you? That’s good, I like my accountants ambitious. We’re not intimately familiar with the ladder at E&Y but we’ll give it a go and let the bean gallery fill in the gaps.
Typically, you can expect to be an associate two to three years before being promoted to senior. Depending on the needs of your practice group and your performance, this could be shorter or longer. In order to get the bump to manager, you can expect another three years at a minimum, again, subject to the needs of your group and whether or not you’re impressing the pants off the brass. From there, you can expect at least two years at manager, another two to three as a senior manager and then, if you’re lucky and you have a good business case, TPTB might start looking at your for admittance to the partnership. Altogether, you’re looking at a bare minimum of nine years before you can even get a whiff of partner and twelve to fifteen is probably a more realistic time frame. There are exceptions of course but that’s more or less the timeline.
Because tax doesn’t have the same fee pressure as their audit counterparts the wait might not be as long but don’t forget, not just anyone gets into the partnership. You need to be a performer and be able to win new clients. The benefit of tax is that it has more diverse career paths available, so if you find discover that you’re a wizard at transfer pricing or M&A, you might see a quicker ascension.
This presupposes the fact that you obtain your CPA in a timely fashion as most tax practices will not promote you to manager without a CPA, a JD or EA. How about it black and yellow tax troops? Dispel with the gory details as necessary.
Last month, we kicked off a new year of epic farewell emails by sharing an ex-Deloitte employee’s somber sendoff. This was followed-up with a P. Dubber who answered the call to fight crime on the streets of Baltimore.
Today, we bring you the latest in epic sendoffs, this time courtesy of the “Black and Yellow.”
My fellow citizens of EY nation past and present. I know the EY grapevine talks, so this email probably doesn’t come as much of a surprise, but I wanted to personally let you know. Tomorrow is my last day here at this beautiful place called Ernst & Young. It’s almost been 6 years, which I believe EY years to be somewhat like doggie years, so that probably comes out to more like 7. Monday, I am moving into a new role as a [number cruncher] for [new employer] (here in [a city]). I am very excited about this new opportunity, but over the past few weeks, I have become oddly nostalgic about this place. So those 17 pages of EY jabs and complaints that I’ve been compiling for this day will have to stay with me. Just kidding! It certainly hasn’t been an easy road, but I honestly know I’ve gained some valuable experience, knowledge and skills I wouldn’t have in another position. I’ve also really enjoyed working with you all over the years and hope our paths cross in the future. Even though some of you are crazy workaholics, it’s so nice to be able to know that you will get the job done and even share a joke or a story along the way. I appreciate all that has been done for me and as a token of my appreciation I’ve thrown together a going away present from me to you:
Favorite lyrics and whether he’s as good as Steve Beguhn are now on the floor for discussion.
Jimbo does admit that “we are not pleased to be in the spotlight like this” but per ushe, he takes it in stride and says, “it is something that we will deal with.”
Well, there had to be a biggest loser in Fortune rankings this year amongst the accounting firms and this year the honor belongs to E&Y. Now, we’re sure you’ll give us your thoughts on why you think the firm took a dive from #44 (highest ranked firm last year) to #77 but the fact that Fortune indicates the firm dropped subsidized gym memberships could be a good place to start. Maybe E&Y decided it prefers its people on the frumpy side? Or maybe they’re simply saving for the Lehman Brothers defense fund?
Ernst & Young – Previous rank: #44. Need reasons? How about corporate citizenship? Fortune says, “The consulting and auditing firm donated some $31 million to charitable causes in 2009, including $6.4 million in matching contributions.”
Stats of note:
• New Jobs (1 year): -1,751
• % Job Growth (1 year): -7%
• % Voluntary Turnover: 11%
• No. of Job Openings at 1/13/2010: 10,000
• Most common salaried job: Manager – $102,593
• % Minorities: 29%
• % Women: 49%
Taking a look at last year’s stats, new jobs, percentage job growth, voluntary turnover, average salary for most common job all trended negatively. Percentage of minorities was flat and percentage of women ticked down 1%. The number of job openings jumped from 622 last year to the 10,000 above, so interpret you can either interpret that as “we’re desperate for people” or “we’re growing like gangbusters.” Arguments for each, thoughts on the 33 slot drop or speculation on what kind of cigars Jim Turley (Cohibas, we thinks) took to Davos are welcome at this time.
The Fortune 100 Best Companies to Work For: Plante & Moran #26 (2011)
The Fortune 100 Best Companies to Work For: Deloitte #63 (2011)
The Fortune 100 Best Companies to Work For: PwC #73 (2011)
The Fortune 100 Best Companies to Work For: Ernst & Young #44
Because, really, is team of Ernst & Young and Ricky Gervais versus PwC, James Franco and Anne Hathaway even a debate?
If you feel strongly about it we’ll hear you out but it’ll take some convincing.
The winners of the 68th annual Golden Globe® Awards will remain a secret until they are revealed January 16 to millions of viewers around the world, thanks to the efforts of Ernst & Young LLP, a leader in assurance, tax, transaction, advisory services and strategic growth markets. The Hollywood Foreign Press Association has relied on Ernst & Young for the past 38 years to conduct the ballot tabulation process of the Golden Globes® with security, integrity and reliability.
And just in case you’re concerned about Ernst & Young’s “security, integrity and reliability” because of you know who, the protocols have been laid out in detail:
• Winners are known only to three senior Ernst & Young executives in advance of the telecast;
• Ernst & Young is also responsible for qualifying voting members of the Hollywood Foreign Press Association, confirming that their credentials are current and meet the standards set forth by the Hollywood Foreign Press Association;
• Ernst & Young controls the entire voting process beginning with the nomination ballots, and maintains control of the ballots until the telecast is over;
• Results are triple-checked to eliminate any margin of error; and
• Winner envelopes are assembled by Ernst & Young and are maintained exclusively under Ernst & Young’s control until they are handed directly to each celebrity presenter moments before they appear on-stage.
Recruiting for the talent amongst the Big 4 is competitive. This is known. What isn’t widely known are all the tactics in this competitive game of catch the accountant. In the past, we have seen direct solicitation by an E&Y recruiter which may be an effective method but it may be too abrasive for many within in the business who value propriety over the win-at-all-costs attitude.
Now comes news of a more subtle approach from KPMG, courtesy of an E&Y tipster who was searching for the firm’s career website:
While searching for the link to my firm’s career website I stumbled upon a pretty awesome ad (in a “ohhhh no you didn’t!” sort of way).
Since we’re fairly unfamiliar (read: completely unfamiliar) with Google’s method to the madness, we can only speculate how this little link found its way to the very top of Google search of “ey careers” but it does say “Ad,” so make of it what you will. Anyhoo, just for fun, we did our own quick Google Search of “ey careers” and got this:
So, it’s in the margin for us as opposed at the very top. But it’s still prominently placed on the search page and it’s also pretty hilarious that the hyperlink, “Ernst & Young Opportunities” goes directly to a KPMG URL (yes, it’s clearly disclosed by the Jobs.KPMGCareers.com at the bottom but who pays attention to that?). Perhaps our tendency to make mountains out of molehills is getting the best of us here but at the very least, this is an exciting twist on Sneaky
Over at Bloomberg, Jonathan Weil (who has the tendency to let the dust settle before chiming in) takes Ernst & Young to task for their lack of willingness to take responsibility for the Lehman Brothers bankruptcy and digs up a bunch of old bodies in the process.
E&Y had established itself as a repeat offender long before Governor-Elect Cuomo filed his suit. In recent years we’ve seen four former E&Y partners sentenced to prison for selling illegal tax shelters, while other partners have been disciplined by the SEC for blessing fraudulent financial statements at a variety of companies, including Cendant Corp. and Bally Total Fitness Holding Corp.
In the Bally case, E&Y last year paid an $8.5 million fine, without admitting or denying the SEC’s professional-misconduct claims. The SEC also has imposed sanctions against E&Y three times since 2004 for violating its auditor-independence rules.
After that friendly reminder (which certainly makes some people wince), JW takes a look at the E&Y’s response to the suit, specifically the part where they more or less say that Cuomo is off his rocker, “There is no factual or legal basis for a claim to be brought against an auditor in this context where the accounting for the underlying transaction is in accordance with the Generally Accepted Accounting Principles (GAAP).”
Weil says E&Y is missing the point entirely:
That isn’t an accurate depiction of the claims Cuomo brought, though. Cuomo’s suit unambiguously took the position that Lehman violated GAAP. What’s more, it’s not credible for E&Y to say that Lehman didn’t. (An E&Y spokesman, Charles Perkins, said he “can’t comment beyond our statement.”)
In the footnotes to its audited financial statements, Lehman said it accounted for all its repurchase agreements as financings. This was false, because Lehman accounted for its Repo 105 transactions as sales, a point the Valukas report chronicled in exhaustive detail.
The question is, of course, if this all adds up to fraud on E&Y’s part. Cuomo says it does. Weil says that E&Y needs to come up with a better story. Colin Barr, on the other hand, writes that E&Y could easily turn the tables:
The Ernst & Young statement suggests the firm will argue that it can’t be prosecuted under the Martin Act because Lehman, not E&Y, was the outfit actually producing the financial reports, and because it was Lehman, not E&Y, that was peddling billions of dollars of securities just months before its implosion.
In this view, E&Y was just a gatekeeper hired to vouch for Lehman’s books, something it will claim it did well within the confines of the law. This strikes lawyers who are familiar with the law as an eminently reasonable approach, if not exactly a surefire recipe for success.
“If I were Ernst & Young, I would assert I was not a primary actor,” said Margaret Bancroft, a partner at Dechert LLP and author of a 2004 memo that explained the Martin Act soon after Spitzer began brandishing it against Wall Street. “You can say that with more than a straight face.”
“Just gatekeepers,” and not “fraudsters,” is obviously the preferred view but the catch is, E&Y would be admitting that they are really shitty gatekeepers.