Category: KPMG

KPMG Partner-cum-Poet Resists Urge to Create Verse on His Blackberry

Believe it or not, employees of Big 4 firms possess talents that have nothing to do with elaborate spreadsheets, coffee and bagel consumption or fantasy football.

A perfect example of this would be Arun Kumar, a “battle-tested” partner in KPMG’s Silicon Valley office. Mr Kumar is a poet, who recently published a collection of 39 poems entitled “Plain Truths.” And regardless of his almost certain reliance on his BlackBerry, he manages to set it aside for the sake of his art.

Kumar, a partner at accounting and consulting giant KPMG, knows another kind of poetry. A poetry of nature and relationships, of whimsy and wisdom, a poetry of words that can be written on planes or between planes or in the quiet of the evening, but never, ever, on a BlackBerry.

“A poem, for me, is visual,” Kumar says at his Mountain View office. “Seeing it is quite important, so I can’t imagine — on a BlackBerry it’s not the same.”

So not only is Kumar a man of professional integrity, he also is one of artistic integrity, resisting the eyestrain and temptation to double-thumb inspiring words on to a 2.5 inch screen that may or may not be lost after he drops it one too many times.

But even more surprising (and disappointing) than his commitment to his craft, is Kumar’s ability to avoid penning poems related to his job. “Most [poems] are far removed from his work,” the article states, despite the undeniable muse that is life inside the House of Klynveld.

Arun Kumar, of Silicon Valley s KPMG office, finds poetry on the human side of the ledger [Mercury News]

The Queen Would Like to Know the Staffing Situation for KPMG’s Banking Clients

If you’re a student of Kylnveldian history – and we know that you are – the fact that KPMG has been auditing the Royal Household’s accounts since before Liz was born doesn’t surprise you. For those of us that weren’t aware of this KPMG fun fact, this is just adds a little more to the blue square mysitque.

Anyway, being the classy gal that she is, Her Majesty showed up last Friday to help mark the opening of the new KPMG building in Canary Wharf. And not only was she thrilled to be there, she surprised KPMG leadership with her affability and interest in the work that non-royals do:

John Griffith Jones said: “She genuinely seemed interested in what we do, especially our charity work and the building’s green credentials. She made a funny comment about Crossrail being delayed and also asked about our role during the crisis.”

Senior partner Eddie Donaldson said the firm was in a “unique position” independently auditing the royal accounts which use public and private money. “The team already see it as a privilege to work on the accounts in the first place and then to meet the Queen was a very special moment in their careers.”

And because she’s concerned about the serious issues out there, Jones was also quoted, “she was very interested to know how many people we had working on the banks.”

The possibility that Queen Elizabeth probably knows more about KPMG than Dick Bové should not be lost on anyone.

An ‘Appropriate Email Use’ Refresher May Be Needed for All Big 4 Firms in Ireland

Earlier today we brought up some less-than gentlemanly behavior going on at PwC Ireland. However, that wasn’t the first story of misuse of email coming from the Emerald Isle. You may recall a few bros at KPMG asking for some assistance winning a trip to Whistler, which was received with mixed reviews in the States.

Anyway! Now comes the story – courtesy of our sister from another mister, Dealbreaker – about another KPMG associate maybe not using the best judgment, sharing his plans for putting the moves on a special lady friend with his mate over firm email.

From: Ian [redacted]
Sent: 22 October 2010 10:24
To: John [redacted]
Subject: RE: Wed

Good night on wed man. Good old craic. Any luck with the ladies

Kind Regards,

Ian [redacted]

Financial Services Audit

2 Harbourmaster Place

IFSC

Dublin

____________________________________________________________________________
From: John [redacted]
Sent: 22 October 2010 10:28
To: Ian [redacted]
Subject: RE: Wed

Was a very good night. Got very messy in the end. No luck with the ladies. Had my eyes on this one girl, [redacted]. Some piece of work. But bottled it in the end

_________________________________________________________________________________

From: Ian [redacted]
Sent: 22 October 2010 10:45
To: John [redacted]
Subject: RE: Wed

I know the one your talking about alright. Shes friends with one of my mates in my year. Seems like a nice girl. Gonna chance it next time

_____________________________________________________________________________

From: John [redacted]
Sent: 22 October 2010 11:24
To: Ian [redacted]
Subject: RE: Wed

Definiately going to stick the head in next time. Falling behind on this whole k score thing. Need to get on board. Shes top notch in fairness

What u reckon?

______________________________________________________________________________

From: Ian [redacted]
Sent: 22 October 2010 11:40
To: John [redacted]
Subject: RE: Wed

Ya, sure go for it if you like her

_____________________________________________________________________________

From: John [redacted]
Sent: 22 October 2010 11:48
To: Ian [redacted]
Subject: RE: Wed

Alright next thurs, im gonna stick the head in. Just wait for the right moment. (When shes drunk) and she cant say no. Got this unreal technique for scoring aswel, called the whisper. I pretend im whispering in her ear and when shes not looking I just kiss her. The element of surprise throws then off and BOOM.

______________________________________________________________________________________________

From: Ian [redacted]
Sent: 22 October 2010 12:04
To: [the girl]
Subject: Wed

Hey [girl],

Thought id give u the heads up about this chap John here. Think he has some serious plans for you

__________________________________________________________________________

From: [everyone who was forwarded this]
To: [everyone they know]
Subject: read from the bottom up!!!

Is Citi Getting Bad Advice from KPMG?

John Carney wonders aloud if Citigroup’s low reserves (approximately $1b reserve for $500b in exposure) for its repurchase risk is thanks to the guidance provided by KPMG. Citi has said that they are, “comfortable with this level of reserves because historically realized repurchase risk has been quite small.” Carney explains, “In short, they haven’t had to pay out much on these claims in the past, so they figure they won’t pay out much in the future.”

Be that as it may, JC and his colleague, Ash Bennington are pret-tay sure Citi has it wrong (they lay out their case in full) and speculates that KPMG is, at the very least, an enabler here.


Carney points out that Francine McKenna has been following KPMG’s not so stellar guidance on this particular issue for years. Starting with New Century in 2007, Wells Fargo last year and Countrywide who was purchased by Bank of America.

Carney then writes that Bank of America is “widely assumed to have the largest repurchase risk, largely thanks to the acquisition of Countrywide.”

So that’s a helluva trail to be sure and Carney wraps up:

So is the advice of KPMG part of the reason for Citi’s complacency when it comes to repurchase risk? Given the history of companies audited by KPMG missing repurchase risk, perhaps Citi should rethink that complacency.

Of course Carney forgets that Dick Bové would take exception with everything he’s saying, since this firm is perfectly acceptable. Even if he doesn’t know who they are.

We’d like to get anyone familiar with the matter (read: Citi audit team members) on the record, so get in touch and we’ll put it out there. Or you can chime in below.

Unhappy KPMG Employees Need to Quit Making Excuses

Like every company out there, KPMG has its share of unhappy people. It’s unavoidable when people are working long hours, have random employees emailing colleagues and your boss’s alma mater can’t field a decent football team.

But it was recently brought to our attention that despite the Kranky Klynveldians out there, KPMG was recently recognized by Forbes as one of America’s Happiest Companies.


Yes, it’s true! The list is alphabetical but it only features ten companies so you know this isn’t one of those catch-all lists that just gets thrown together. Seriously, the firm is on their with Google and Zappos, two of the most notoriously nauseatingly gleeful companies on the planet.

But why is KPMG one of the hap, hap, happiest? Simple. It comes down to education. From Forbes’s list:

[The Company] [i]nvests in happiness training; allows employees to take partially paid leaves for up to 12 weeks; encourages flexible scheduling and formal mentoring programs.

So the bottom line is that if you work at KPMG and you’re unhappy, you’ve got no one to blame but yourself. Money be damned. Get your ass to happiness training, take copious notes and you’ll be whistling to work in no time.

Some People Are Wondering When/If KPMG and Ernst & Young Will Ante Up

From the mailbag, courtesy of an E&Y senior associate:

I work for EY. Roommates are Deloitte and PWC. I’m hearing from the PWC employees that in addition to a holiday bonus, as well as a March compensation adjustment similar to Deloitte’s, PWC is also giving their employees the last two weeks of December off without requiring them to use their vacation days.

Thoughts on whether EY or KPMG will ante up? Hot topic at my client site today as you can imagine 🙂


Before we get to E&Y and KPMG, it should be noted that PwC is really playing hardball here. A quick recap:

• Mid-year bonuses that include an option for an iPad. Steve Jobs hater or not – that’s a cool bonus.

• Rumors of poaching seniors in Chicago and New York.

• New Yorkers given the option to shovel Thanksgiving sustenance at a Manhattan location to be named later (btw, we really want to know where, so get in touch with details when known).

• iPhones are now available and Christmaskuh festivities return.

Now there are rumors of a merit increase in March and two free weeks of time off? This is quite the run of employer gratitude. We won’t say “unprecedented” but it is an impressive show of generosity.

Maybe PwC has gone on this offensive because they had a kick-ass first quarter. Or maybe it’s because they lost the number one spot to Deloitte and they still want everyone to know that they’re still capable of equating love with money. OR maybe they’re trying to make people forget about Logogate. Whatever the motivation, the firm is throwing money around with the gusto of Charlie Sheen and they are getting a relative amount of attention for it.

Now, then – Ernst & Young and KPMG. Maybe these two firms are spreading the wealth on the Double-DL but if not, TPTB have to be aware of the what the competition is up to. If not, maybe someone should clue them in. Regardless, there has to be heat to act in some way.

One explanation for the House of Klynveld is that the fiscal year just ended, so it is too early for leadership to communicate “the great first quarter,” thus rationalizing a mid-year bonus. If KPMG comes out to soon with the news, they risk the “Monkey see” effect.

As far as E&Y is concerned, we’re stumped. They have the same fiscal year as PwC and should have a pret-tay good idea how Q1 went. Now that PwC has made the first move, any action by E&Y is going to look reactionary .

So for the E&Y and KPMG crowd – you clearly have some expectations for something but are you hearing anything about mid-year bonuses or will the belly aching continue into the holidays? Discuss below and get in touch with details.

Former KPMG Chairman Walter Hanson Passes Away

Walt was elected chairman of Peat Marwick at 39 and served in that role until he retired in 1980.

We weren’t aware of this but the firm actually has a “Walter E. Hanson Award” that recognizes “a KPMG partner for delivering exemplary client service, providing visionary leadership and displaying the highest standards of integrity.”

So while Walt’s name isn’t in the lobby (and thus, no Warhol treatment) this award sounds pretty good. The firm’s press release is after the jump.

WALTER E. HANSON, FORMER KPMG CHAIRMAN, DIES AT 84
First Chairman of Peat Marwick International

NEW YORK, Oct. 28 – Walter Edward Hanson, former Chairman of KPMG, died after a long illness at his home in Newport Beach, Calif., his family has disclosed. He was 84.

During a career at KPMG that spanned more than 23 years, Mr. Hanson, who died Sept. 24, was widely regarded and admired for his business insight and determination by both his colleagues and clients. He became the first Chairman of Peat Marwick International in 1978.

Mr. Hanson joined KPMG in 1957 as a partner in charge of its transportation practice, later as partner in charge of the New York office, and was elected Chairman of the U.S. firm at the age of 39, serving in that role from 1965 until his retirement in 1980.

He was born on Oct. 17, 1925, in Adelphia, N.J. After serving with the U.S. Naval Air Corps, he graduated from Lafayette College in 1949. He became a certified public accountant and joined the Minneapolis & St. Louis Railway Co., where he rose to the position of Vice President and Comptroller.

Numerous academic and civic honors were conferred upon Mr. Hanson. He served as a member of the Board of Trustees at Lafayette College for 18 years, nine of those as Chairman. In 1984, the firm established the Walter E. Hanson/KPMG Peat Marwick Professorship of Business and Finance endowed chair at Lafayette. In June 1977, he received an honorary Doctor of Laws degree from Lafayette. In 1979, the Citizens Union of New York City presented him their Distinguished Service Award.

Mr. Hanson served for 15 years as a member of the Board of Governors of the United Nations Association of the USA. He was a member of the Advisory Council of both the Harvard Business School and the Stanford University Graduate School of Business. He also served as a member of the Board of Visitors of the Graduate School of Management-UCLA and Duke University Business School.

Following his retirement in 1980 from KPMG, he served as a member of the Boards of Directors of many companies, including CIGNA Corp, Fidelity Investments, Chesebrough-Ponds, and Insurance Company of North America. Mr. Hanson was founding Chairman of the Maritime Center in Norwalk, Conn. In 1983, Mr. Hanson was awarded the Gold Medal of the American Institute of Certified Public Accountants, the profession’s highest honor.

Commemorating Walter Hanson’s contributions, KPMG created the Walter E. Hanson Award in 2003 to recognize and honor a KPMG partner for delivering exemplary client service, providing visionary leadership and displaying the highest standards of integrity.

Mr. Hanson was one of America’s top sailboat racers. He raced for many years on Long Island Sound and along the East Coast. He twice won the Marblehead-Halifax Race and was the Northern Ocean Racing Circuit winner. In addition, he was a member of the New York Yacht Club and served for many years on its Board of Trustees.

Mr. Hanson is survived by his wife, Elizabeth, children Katharine (Greg Hurray), Elizabeth (Edward) Lawlor, and Barbara (Samuel) Maropis; grandchildren Jeffrey Hurray and Matthew, Abigail, and Casey Lawlor; a sister, Emma Freeman and brother, Irwin.

In lieu of flowers, donations can be made to the Alzheimer’s Association and/or Lafayette College.

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International Cooperative (“KPMG International.”) KPMG International’s member firms have 140,000 professionals, including more than 7,900 partners, in 146 countries.

KPMG Founders Get the Warhol Treatment

No doubt many a KPMG employees have thought to themselves, “If Warhol painted the KPMG namesakes, what would they look like?”

As you can see, you no longer have to wonder.


It just so happens that the Pittsburgh office’s alumni get-together will be at the Warhol Museum and our tipster wondered if this money could have been better spent on the Steel City employees:

I have a feeling the local partners spent the extra money they didn’t give out in bonuses (note bonuses were given, I’m just saying they could have been bigger) on hiring someone to “Warhol” out the KPMG founders below. Great artistry though.

Frankly, we’re of the opinion that this might be some of the best money the Steel City office has ever spent. However, it’s entirely possible that KPMG does some work for the museum and they’re swapping services, which again, seems like a pretty good deal.

Here’s the full invite:

We’re not Warhol experts so we’ll let you debate the artwork but we do have a few takeaways:

1. KPMG has a knight!

2. Three out of four rocking ‘staches.

3. Is it “Uncle Piet”? Or “Uncle Peat”?

4. What’s with three sour faces, KPM? At least Goerdeler looks like someone you would want to work for.

Any other questions? Leave them below.

What’s With This AADB Investigation of KPMG?

Yesterday, the Accountancy and Actuarial Discipline Board (AADB) in the UK announced that they would be reviewing a decade’s worth of audits performed by KPMG for BAE Systems, the British Defense Contractor.

You see, the defense industry revels in some dark corners of the business world and BAE is no exception. The company plead guilty back in February that involved some “commissions” (some may call them “bribes”) paid to “third party agents” (some may call them “arms dealers”) to secure some business in various countries. Even though this was all settled recently the company was probably hopinforgotten about the whole thing:

The accounting probe threatens to reopen a damaging chapter in BAE’s history, eight months after the company paid almost $450m to settle a high-profile, transatlantic bribery investigation by the US Department of Justice and the UK’s Serious Fraud Office.

Right. So now, presumably because they thought it would be fun, the AADB is curious about what KPMG knew about these “commissions” and “third parties”:

AADB said it would investigate KPMG’s advice to BAE on the operations of three of its offshore companies, Red Diamond Trading, Poseidon Trading Investments and Novelmight.

“The regulator is looking specifically at the audit of commissions paid by BAE to outside agents, any tax advice given by KPMG on commission payments and the status of three offshore companies linked to BAE … penalties could include an unlimited fine for KPMG,” said Credit Agricole analyst Thomas Mesmin.

Well! The prospect for unlimited fine is interesting, to say the least. For their part, KPMG is cooperating with the investigation because, well, what else are they going to do? A spokesman told Reuters, “[T]he firm does not believe there has been any act of misconduct [and that] it will be cooperating fully with the AADB to ensure that the matter is brought to a swift conclusion,” which, as we all know, runs on an audio loop on the firm’s automated press inquiries line.

Meanwhile, some people are just tickled pink with these developments:

Campaign Against the Arms Trade spokeswoman Kaye Stearman told the Star: “We are delighted to see that the AADB is investigating KPMG audits of BAE, even so belatedly. These subsidiary companies were crucial in channelling so-called commission payments. It is vital that this investigation is done thoroughly and well and that any fraud and collusion uncovered is severely punished.”

The thing is, KPMG’s (or any accounting firm) involvement with BAE (or any defense contractor) has to be one of mixed feelings.

On the one hand, you’ve got extremely profitable international businesses that build all these cool toys that fly, blow things up and go into space.

On the other, a lot of their customers are the shifty type, they probably keep lots of secrets and – OH YEAH – their products are designed to kill people.

But once you get passed all that, you realize it’s simply a business needing professional services and who better to provide it than a Big 4 firm, amiright?

KPMG in UK probe over BAE accounts [FT]
KPMG to be investigated over BAE Systems audits [Reuters]
Warm response for KPMG investigation [Morning Star]

KPMG Silicon Valley Office Dangles “November Jeans Month” To Help Boost Poor Employee Survey Response Rate

Last week John Veihmeyer asked everyone at KPMG to share their thoughts on what the firm does well but also what the firm can do to improve its awesomeness.

Well, apparently some of you in the Silicon Valley office didn’t get the hint. Your pathetic response rate of 23% (as of this writing) has some people worried that you’re not taking this shit serious. In order to get you to spring into action, the office honchos have dangled two carrots in the form of five lucky ducks winning a $200 AMEX gift card but the big opportunity here is the possibility (albeit a longshot) for wearing denim EVERY SINGLE DAY in the month of November.

2010 Employee Work Environment Survey & Jeans Month!

INTERNAL USE ONLY

As you know, the 2010 Employee Work Environment Survey is underway and will run through Monday, October 25.

The Silicon Valley Office currently has a 23% response rate.

If you have not already responded, I encourage you to do so as your feedback helps us to identify our strengths and our weaknesses and provides us with ideas on how we can become an even better place to work and a higher performing organization.

On October 11, you received an e-mail from John Veihmeyer and Henry Keizer with personal login information to access the electronic survey. If you haven’t done so, please review that e-mail and access and complete the survey before October 25.

Please note that all participants’ responses will remain confidential, and will go directly to our external survey provider, Kenexa, for tabulation. Kenexa will not report aggregate scores for departments with less than 10 responses.

Remember that all employees who complete the survey have the opportunity to enter a drawing in which five randomly selected respondents will receive a $200 American Express gift card. The survey site will provide instructions to enter. The winner will be announced after October 25.

Last year, the Silicon Valley office’s survey response rate was 70%. In order to establish a wider range of views and suggestions, I’d like to set a goal of 80% this year. So we are giving you an added incentive to respond to the survey. If the Silicon Valley office receives an 80% response rate, then the month of November will be “Jeans Month” and you can wear jeans to the Silicon Valley Office every day next month.

Thank you for participating, and we will share results with you later this year.

So for those of you that are ruining it for everyone else, do you not recognize what is at stake here? Are you not interested in providing exquisite client service in the cool, comfort of denim for 30 straight days? Do you really want to be standing around the water cooler in khakis explaining to someone that you didn’t complete the survey? If so, we hope you can sleep well.

KPMG Survey: Execs Anxious About Reporting Undecipherable Explanations for Uncertain Tax Positions

So you take a position on a tax issue. You don’t really know why or how you got there but your CFO says it’s legit. How does he/she know? “Johnson in the tax department told me.”

Does Johnson understand it? Of course not! It’s an uncertain tax position. It’s a shot in the dark at best.

Naturally, the IRS has gotten all nosy about this sort of thing so you have to formulate something that vaguely resembles an explanation that doesn’t read like Bittker & Eustice.

You can’t simply make it a copy and paste job since we’re guessing the IRS wouldn’t appreciate the bloggy approach. But you’ve got to come up with something. Oh, and try to keep it brief.

Almost half of senior executives polled are most concerned about the prospect of providing a concise description of their uncertain tax positions (UTPs) in order to comply with a new, much-discussed Internal Revenue Service disclosure requirement, according to a survey conducted by KPMG’s Tax Governance Institute (TGI).

This shouldn’t come as much of a surprise since we’re talking about interpreting the INTERNAL REVENUE CODE. But the BSDs out there are worried about explaining why they’re taking a stand on something that don’t understand one iota. Plus, if you’re already pret-tay sure that the IRS is going to call bullshit on you, that warrants an explanation as well [teeth being grit into dust].

According to the survey of 1100 business leaders conducted in early October, 44 percent of respondents said their biggest concern was providing the concise description for a disclosed UTP, defined by the IRS as a federal income tax position for which a taxpayer or related party has recorded a reserve in an audited financial statement (or for which no reserve was recorded because of an expectation to litigate). Other major concerns cited centered on the IRS’s ability to effectively administer the UTP program (20 percent) and on the scope of taxpayers required to file UTPs under the new rule (15 percent).

This could all be avoided if the IRS required companies to use Twitter as a guide for brevity. Just a suggestion.

Executives Anxious About IRS Reporting Requirements for Uncertain Tax Positions Schedule, KPMG Survey Reveals [PR Newswire]

Is Citi One of the Issuers in the PCAOB’s Inspection Report of KPMG?

The long-awaited PCAOB inspection report of KPMG came out on Friday and while we were excited for this unveiling, the Board managed to issue the report at around 4 pm on Friday. Since the Board lacks any sense of timing whatsoever, we opted to punt on our respective post until today because well, we’re human and not a soulless blogging robot as likely perceived by TPTB at the PCAOB.

It’s worth mentioning that this is the first PCAOB report that has been issued since the SEC’s final rule on the inspections that allows audit firms to postpone the release of the report simply by taking issue with any of the findings. Since any appeal could reportedly delay the report by “30 to 100 days,” it’s safe to assume that, with a report date of October 5th, KPMG didn’t have a beef with the findings. You could also assume that since the SEC is taking a peek at these reports now, there’s going to be a ten day lag on the release of the report to allow the Commission enough time to give it their extra-special sniff test.

Anyway, back to the matter at hand –

KPMG had eight issuers noted in the Board’s inspection report and the first two are doozies. “Issuer A” runs approximately two pages and includes failure on testing of “allowance for loan losses” to “test[ing] the issuer’s estimates of fair values of financial instruments” and goodwill impairment.

“Issuer B” is a little more interesting since one of the failures the Board found was related to deferred tax assets which makes us wonder if this is Citi, since analyst Mike Mayo was loudly questioning the bank’s treatment of its DTA. Francine McKenna not-so-subtly solicited guesses on Friday as to who this “bank” might be (even though no issuer is identified as such) but it does make us wonder.

The Board cites run-of-the-mill failures for the rest of the issuers (e.g. fair value testing, pension plan testing, failure to confirm cash[!]) and the House of Klynveld’s response letter was cordial and anticlimactic.

But if you’re KPMG, do you really care what the PCAOB thinks when you’ve got an adorable gnome-ish looking analyst giving you the tepid thumbs-up (despite not knowing your name)? That’s the only endorsement we would need.

2010_KPMG_LLP