Category: EY

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.

Wanted: Actor Who Can Channel the Quality of Ernst & Young

We know Ernst & Young is looking for some extra help but this particular role will require someone (an extra from Inglorious Basterds, perhaps?) that is theatrical first and a numbers person second:


For starters, why do you need an actor to “demonstrate what not to do in the workplace”? Couldn’t they just secretly film employees on any old regular Thursday and get the footage they need? Then you could do a candid camera type ending where Jim Turley jumps out and cans their asses.

As far as casting is concerned, David Hasselhoff immediately comes to mind but in the off-chance that the Hoff isn’t available, who picks up this gig? We imagine an in-house choice would be preferable in order to save on costs.

JT has a nice strong face/chin but can he do the accent? We know the Vegas office is a cesspool of talent. Perhaps this is the hazing for one of the new partners? Ideas welcome.

Promotion Watch ’10: Ernst & Young Names 126 New Partners in the Americas

To please you hair-splitters, that number includes principals. E&Y also named 62 new executive directors and 19 new directors.

It’s been a couple weeks since the announcement but we finally were able to run down a few details on the new partners at E&Y:


We’re not sure why Howe had to slip in the diversity soundbite there but he did. Thoughts?

In terms of the breakdown, right now we only have a few specifics so far out of the Northeast:

Of the offices in NY, MA, CT, RI, and NJ, we had a total of 16 new execs: nine tax, four advisory, and a whopping three assurance.

If you’ve got more details, let us know. Congrats to the new PPEDDs at E&Y!

(UPDATE) Compensation Watch ’10: Are Raises Looking Bleak at E&Y?

It’s been awhile since we’ve heard any news on the E&Y comp front but we finally received a preliminary report from one source late last week:

[Roundtables] went the same way they always go. Surprisingly, less pushback on proposed ratings for the portion I was involved in. I really think they may be scared to lose more people. Indications are raises will be low (3-5% range for most, more for 4/5 rated people) Bonuses are probably non-existent for the masses. Annoucements of promotions for other levels will be made in August (staff to senior, senior to manager, manager to senior manager) they will also do comp increase discussions then. Effective 10/1…


So despite Ernst & Young re-reassuring merit increases the 3-5% for the meaty part of the curve and no bonuses isn’t exactly what “the masses” were expecting.

That being said, this office may be catching some bad luck since we that at least one E&Y partner was confident that the raises would beat PwC’s.

Although, some lucky E&Y soldiers have seen some “spot bonuses” for their hard work but it’s not clear how widespread that generosity is.

On a marginally-related note, we’ve received word that the partner promotions were announced but we’re still trying to run down some details. Get in touch with us if you’ve got the scoop on the new partners, what you’re hearing about comp in your office and discuss below.

UPDATE, Wednesday June 16th: A couple more accountants familiar with E&Y have their own take on the comp situation:

I heard that we “we’re not going to be disappointed with raises” here at EY. I don’t know what that means. And I tend to believe, that as you posted today, 3-5%, is a more realistic view of what’s going to happen (though that’s just my own pessimism).

and that is coupled with another source, “Haven’t heard anything further on comp other than ‘moderate.’

Continue attempting to decipher the latest. As you were.

Is Ernst & Young Quadruple-Checking Your Expense Reports?

A curious mind out of Casa de Turley:

EY just moved to a “new” (basically the same, but it does look more flashy) expense reimbursement system in the US. Along with that move though, my expense pay back times have increased from usually about a 2-3 day turn around for approval to a 5-7 day approval. While it’s not unheard of that it would take that long, I was wondering if other EY people were experiencing the same payment delays and what this could be signaling? Just slow/less staff processing expense reports or is this some sort of cash flow management? I’m not sure that that even makes sense since we bill the client for the expenses, so it puts off the billing process as well as the reimbursement process.


As to why and how this happening, we’re guessing that those of you that got into the habit of going to Bobby Vans twice a month, playing Omaha, Hold ‘Em et al. on the web and lap dances and somehow convinced yourself it was business related have finally broke the proverbial camelback. It’s either that or Jim Turley is pulling up his boot straps and checking every single expense report himself.

Other theories or wild-ass guesses? Fire away.

PwC, Ernst & Young Building Defenses Against Each Other’s Spies, Peeping Toms

Ernst & Young had a nice little buffer zone from the other Big 4 in their London office until PricewaterhouseCoopers decided they’d set up camp next door and now the two firms are strategerizing.

P. Dubs is finishing up the construction on their new digs and the Telegraph reports that “At their closest point the two offices are roughly 10 [meters] apart.” This proximity (not to mention the obnoxious tendency of Big 4 types to be competitive just for the sake of being competitive) has apparently led to rampant paranoia at the two firms about spying.


Getting up in E&Y’s shit seems to be bean counting as usual at PwC, as this latest move more or less correlates with the alleged poaching of 20 E&Y partners in the Middle East.

The Telegraph is insinuating hilarious war-esque undertones, saying, “First blood in the battle has gone to PwC with the installation of blinds that close automatically whenever audio-visual presentation equipment is switched on and an office layout that ensures no computer screens face windows.” The obvious concern being that PwC’s secret “we provide the absolute best client service” plan would be imitated by E&Y, which would mean an all-out war.

However, the real concern should be voyeurs scoping out the office sexcapades. As we’ve mused in the past, the odds of fornication for accountants are slim as it is and work relationships are a convenient option. With this development, some E&Y and PwC minions will be denied the opportunity for office sex. This is not as much of a problem for the exhibitionists at the firm, however, that cross section is likely small.

E&Y is reportedly “evaluating a number of options,” to combat P. Dubs’ tactics, which may or may not include the following:

A) A group mooning that will involve the most portly E&Y employees.

B) Placing inflatable bozos in the windows.

C) Draping the entire building with a photo of Susan Boyle in Beckham’s PwC undies.

D) Your idea.

Blackout curtains beckon as accountancy rivals find themselves too close for comfort [Telegraph]

Allegedly, a Few Ernst & Young Partners Just So Happened to Join PwC

Never having the pleasure of attending a partner-only soiree, we don’t have much knowledge about the haps at these events but we do imagine catering slightly better than what you would find at an in-house training but served by oompa loompas. And an open bar, natch.

Likewise, we’ve never heard about Big 4 partner mixers where, for example, an PwC partner might chat up a E&Y partner talking IFRS, where they fall on the staff’s hottie list and “oh by the way, waddaya say you join our firm?” To save face, we imagine said E&Yer responding with a “No, I will not make out with you” retort followed by open-faced slaps and ripped Jos. A. Bank until the beefy security pulled the two apart (at which point the P. Dubs partner gives his target the “call me” sign).


We bring all this up because the Times Online reports that there has been a fair amount of defection from Ernst & Young to PricewaterhouseCoopers in the Middle East (no sissies allowed). PwC’s Middle East practice was purchased by the UK firm last year and now the Times reports that 20 E&Y partners have been poached by P. Dubs:

According to people familiar with the situation, the defections — amounting to almost a fifth of Ernst & Young’s partners in the Middle East — were in several locations across the region. Most were from Ernst & Young’s consulting business, The moves began last summer but were kept secret because of a settlement between the two firms. PwC agreed that it would not approach any more Ernst & Young staff in return for Ernst & Young agreeing not to take legal action to block the departures.

Neither firm would comment for the Times article except to boast about their numbers in the region, “PwC confirmed that it had recruited 25 new partners and 400 staff in its Middle East offices in the past 12 months,” and “A spokesman for Ernst & Young said that it remained ‘easily the largest’ of the Big Four in the Middle East,” so both firms’ communication departments seem to be operating as normal.

Whether such (alleged) deliberate defections have happened in the States, we don’t know but we hear it is quite the spectacle (marched out by the OMP the second the news got dropped) when one partner notifies his/her intent to leave for a competitor, so all out war could reasonably be expected.

PwC raids rival before Middle East step [Times Online]

Apparently Ernst & Young Doesn’t Buy the “C’s Get Degrees” Mantra

We know that lots of you out there are perfectionists, so this could never happen to you but for you mere mortals, you can sympathize a little bit.

Courthouse News Service reports that a class action suit in California has been filed against E&Y claiming that the contracts signed by graduating seniors “compel” them to work for the firm but allow the company “to legally renege or cancel the offer of employment” if the senior does not maintain “continued strong academic standing.” Apparently this means if you slack off your senior year and slip a couple of C’s in there, you could be out on the street.


Yunjung Gribben, 43, is the named plaintiff in the suit and she is seeking damanges for wrongful termination, age discrimination, breach of employment, specific performance and violations of the Labor Code.

Ms. Gribben claims that she graduated from Cal State Fullerton with a 3.6 grade point average but, “After working for Ernst & Young for a month, Gribben says, she got a call from human resources, questioning her about the C’s she got in her senior year. She says she was fired the next days [sic].”

She claims that “continued strong academic standing” was not defined in her contract, although she admits that there is a “hazy reference” to the term on the firm’s website.

Dale Fiola is representing Ms. Gribben and he us, “No student should be under the impression that they have an employment agreement once they graduate. Most of the time when people sign offers of employment they think they’ve got something.”

The suit alleges that other students have cited the “continued strong academic standing” language and in Ms. Gribben case, “younger employees were allowed to stay at the company.”

Ernst & Young spokesman Charlie Perkins had no comment at the time our post was published.

Class Sues Ernst & Young Over Contract [Courthouse News Service]

Any Attempts by Accounting Firms to Boost Morale May Be Too Late

From an accountant familiar with E&Y:

We got two voicemails today, one from head of Banking and one from the Vice-Chair of people, both talking about compensation. I think the underlying fear is that we don’t have enough people anymore in our practice because they keep stressing all the things that the partners are going to do besides compensation to boost morale (like have a lunch with staff sometime around cinco de Mayo).


The last month and a half has been a bit, shall we say, tough on the E&Y and the troops. That being said, the news that Ernie would beat P. Dubs raises may or may not have got some people to relax but it appears that the firm’s leadership is still on the offensive to keep spirits high.

After discussing it with our resident HR expert, the problem with these little wine & dine events is that at this point they are too little, too late. People don’t want they faces fed. They want answers. They are crawling the walls with anxiety about three things:

1. What raises will be.
2. If there will be a bonus pool.
3. Who is getting promoted.

And they want to know the answers ASAP. Raises have been triple-reassured at all the firms and people want to know that number; they want to know if there’s a bonus pool.

Everyone at the point of promotion has made up their minds about what they will do if they get promoted or not. Plus everyone who is not up for promotion is talking about who will get promoted, who won’t and the reactions that will result (e.g. storming out of the office or a nervous breakdown).

The reality is that these things take time. The fact that PwC put a number out there was impressive (and some have said, desperate) shows that partners are aware of the anxiety and they’re trying to get people to relax.

Deloitte is up first, as their fiscal ends 5/31 and we’ve heard that there has been generosity passed around there but it will ultimately depend on the the merit increases. We hear their all hands webcast is coming up soon and that discussions are occurring this month so it won’t be long.

No amount of margaritas, $100 bonuses or NHL playoff hockey tickets will change the fact that people have worked it out in their heads about what they will do when they get the news. And once that news is known, people will act fast. We would encourage everyone to be patient, try and be rational etc. etc. but we also know that’s an futile request.

Ernst & Young’s Raises Will Be Better Than PricewaterhouseCoopers’

I said it on Tuesday and I’ll say it again. HERE. WE. GO.

Caleb ran a post yesterday about Ernst & Young raises that as of deadline time had no comments. Zilch. Nadda. I was surprised by this because if anything guarantees comments on GC posts it’s talk about layoffs, Overstock.com shenanigans, and money (not in that order). Needless to say, I think this update will change things.


GC received a tidbit from an EY reader about the recent phone call:

“I did receive a voicemail from Steve reassuring compensations but, it appears that the firm will concentrate giving raises to its “high performers”. So, this potentially could mean that only EYers rated a 5 (need to catch a fraud to get this or have really sore knees) or 4s (need to be well liked all the way up the pipeline on an audit) will have a respectable raise.”

So – if you burned through busy season working yourself to the bone for Uncle Steve but stopped short of needing knee pads (it should also be noted that the parts in parentheses above are part of the original email…) you might be shit out of luck for a respectable raise.

Continuing…

“In addition, I checked with a partner and the August 1st early pay increase is a rumor. The rumor appeared believable since EY is a monkey see monkey do type of firm but, our partner said that EY’s raises although be start on October 1st, will be higher than what PwC will offer to its auditors.”

Boom. To quote my man and crime fighting detective Marcus Burnett, “Shit just got real.”

Shit. Just. Got. Real.

Is there any credibility to this? Sure there is. To think that the upper leadership from every firm does not talk to one another about compensation targets is ridiculous. Merely for the sake of the partners’ bottom line, it’s necessary to know what ones competitors peers are paying in compensation. Why some loose-lipped partner is sharing this information is beyond me, but hey, it’s dedicated readers fed up with their own compensation that forward these tips on. Now, let’s talk it out.

Which would you prefer – every 10 key cruncher receiving a mediocre payout or just the stars receiving something slightly-better-than-insulting? Comment below, regardless of which firm you work for. Be sure to shed some light on the timing of EY’s payouts if you know any details.

Compensation Watch ’10: Ernst & Young Re-reassures Merit Increases

About a month ago, we heard about an E&Y town hall in Chicago that was meant to rally the troops after the last two weeks of March saw ubiquitous Lehman Brothers/Repo 105/bankruptcy examiner’s report coverage.

Plus, it was the end of busy season so people were likely at their wits end. At said town hall, the raises promised by Americas Managing Partner Steve Howe back in January were reassured.


Despite this message, Steve Howe sent out a triple-reassuring message yesterday to everyone that wasn’t listening and/or didn’t get the communiqué:

Stevie Howe just sent out another long VM confirming raises this year. On a related note, FSO sent out a note about accelerating the annual review process to account for the expedited compensation review process.

Another source told us that more details are to come on an upcoming webcast, and because of the “expedited comp review” process, it has been suggested that the merit adjustments may occur earlier than usual. Right now, our source speculates that it will go down in August but no hard date has been thrown out there. Keep us updated.