Category: KPMG

Tim Flynn Will Not Serve Another Term as Chairman of KPMG

Tim Geithner better be paying attention. This could be your successor.

As you may know, my five-year term as U.S. Chairman ends in June of this year. Late last week, I informed the Board and subsequently announced to the partners, that I have decided not to serve an additional three-year term as U.S. Chairman after my initial term ends this June, as permitted by the firm’s governance.

This decision was made after much thought and personal reflection. KPMG’s partnership agreement has a well-defined and time-tested set of protocols in place whereby the Board of Directors is expressly responsible for managing the succession process for Chairman. Over the next 60 days, the Board will execute that process, the planning for which began late last summer.


Our firm has an outstanding group of partners and an effective, seasoned leadership team that is focused on our partners and employees, our clients, and the marketplace.

You have my personal commitment that I and the entire leadership team will remain focused on these key priorities throughout the remainder of my Chairmanship.

Thanks for all you do every day for KPMG.

Chairman_Succession

Tim Flynn at Davos: We’re Moving Toward the Green Light of Trust

After wondering aloud if the Big 4 was just going to spend the entire week at Davos chasing blondes and eating chocolate some of the more easily rankled of you pointed out that Tim Flynn was all business and had already given an interview with CNN. Plus, since we saw Dennis Nally this morning it would seem like there is work being done. God forbid the guys do anything fun while they’re over there.

Anyhoo, we finally got around to watching TF’s chat with Richard Quest at Davos and we thought he did a pretty bang-up job. One thing we would have done different — if we were T Fly that is — was ask DQ why we were excluded from the last CNN interview. “What about it CNN? I’m not good enough for APEC piece but you’re happy to include me on this little campout?” Or something to that effect. We imagine that he was asked to keep it cordial.


Back to business: The one thing that threw us off was the red light/green light of trust thing. Trust doesn’t really strike us a color, least of all green. Think about it: Green = money = Goldman Sachs. Plus, has T Fly seen those tea party people? They don’t trust anyone. See why we’re confused? If you get it, please explain, but watch first.

KPMG Haiti Relief Effort Details

We finally nailed down some specifics from a trusted source on KPMG’s efforts to assist with Haiti relief.

The Americas Region (U.S., Canada, Central and South America, and Israel) have contributed $300,000 to the efforts so far, with a total goal of $500,000. These are the combined contributions of the both the firm and its employees. The International firm has pledged $500,000.

All contributions are going to UNICEF and Save the Children.

If you’ve got updates on your firm’s efforts or if you would like to notify us of what your firm is doing to assist the efforts in Haiti, email us at tips@goingconcern.com

Earlier:
We Knew Accounting Firms Were Helping Haiti

The Latest Challenge for KPMG Employees

Team, KPMG has submitted a challenge to its employees in the Florida/Carolinas/Puerto Rico neck of the woods, and we felt compelled to include the rest of you, just for the sake of expanding the brain pool:

Name the Business Unit Contest
January 22, 2010
How do you describe the most scenic business unit in the nation? From the mountains and outer banks of Carolina to the Everglades and beaches of Florida and the rain forests and blue waters of Puerto Rico, we have it all!
As the former FBU and CBU business units come together, we thought it would be fun to invite each of you to participate in a contest to name the new BU. In addition to bragging rights, a prize will be awarded to the person who submits the winning name.
Remember…be creative and have fun!
Send your ideas to US-FBU CSS COMM Leadership Mailbox by Friday, January 29, 2010. A prestigious selection committee will make the final selection and the winner will be announced by Friday, February 5, 2010.

Lost of questions here: 1) It’s busy season; between reading this fine publicaion, trying to get laid, and wallowing in disappointment, who has time to come up with name for the FlorinasRico business unit? 2) Who’s on the prestigious selection committee and how did they get this cushy gig? 3) Does Phil Mickelson figure into this prize in any way, shape or form? 4) If yes, will Tim Flynn be caddying for you, Phil or both?
You’ve only got until Friday to submit ideas, so we suggest you get on this ASAP.

The Fortune 100 Best Companies to Work For: KPMG #88

Last, but definitely not least, on the F100BCTWR is the House of Klynveld. We figure that if you judged the HoK based solely on the fact that it sponsors a golfer who can manage to keeps his pants on for five minutes, they dominate this list. Unfortch, Fortune takes additional variables into account out of respect for the process.

KPMG – Previously ranked #56. It’s great because, “[The] firm introduced a sabbatical program allowing employees to take leaves of four to 12 weeks at 20% of pay. Some 450 employees immediately signed up for it. Employees average 25 paid days off.” Thoughts?


Other interesting stats per the snapshot:
• New Jobs (1 year): -1,581
• % Job Growth (1 year): -7%
• % Voluntary Turnover: 12%
• No. of Job Openings at 1/13/2010: 2,700
• Most common salaried job: Senior Associate with average salary of $78,100

So the numbers aren’t so hot compared to others. Not to worry though! TF is out there rallying the troops even jumping across the Hudson every now and again just to check on everybody. What more could you ask for?

Earlier:
Ernst & Young #44
Plante & Moran #66
Deloitte #70
PwC #71

KPMG Advisory Has Another Potentially Awkward Meeting, Sans Dog

Thumbnail image for Thumbnail image for Thumbnail image for PomeranianSP1324.jpgIf you’ve been hanging around these parts long, you’ll remember back in the fall when Klynveldians were sitting down for their compensation discussions which gave birth to one of our favorite mascots. All professionals in the Southeast region of the advisory practice witnessed an awkward moment when the then partner-in-charge of advisory phoned in, along with his dog, to break the news to the troops that they weren’t getting squat for raises.
Well today, there’s another call down in the Southeast — the “SE Advisory Market Development Staff Update Call” to be precise — and apparently there’s more bad news. It seems that the SE advisory practice (the largest in the firm, according to one source) is a bit behind on its revenue targets for the first three months of the new fiscal year and January isn’t shaping up so well either. The actual revenues are trailing the planned targets by approximately 15%, according to slides from the presentation obtained by GC.


Sources have indicated that while there is significant pipeline revenues, as of January 11th, only ten percent have either verbally committed to an engagement or are currently being negotiated. More than one-third of the pipeline is classified as being in the “identification” stage which is largest group. Now perhaps that is a normal ratio but another slide indicated that the number of client wins are on pace to be down considerably (~50%) for the month of January as compared to the prior three months.
One of our sources indicated to us that a major problem is that “identification” of a potential client was enough to have it included in the pipeline. In other words, if your Pomeranian sniffs a Boston Terrier’s ass at the dog run and you talk shop with the owner of said Boston T, that person is more or less in the pipeline. The conversion of the BT apparently is not crucial and even if the Boston Terrier is converted to realized revenue, it was a far smaller percentage than initially estimated.
The problem, as it appears to us, is that business in the advisory practice in the Southeast could be drying up (or maybe just getting more competitive) and that conversion of potential business is slipping. It’s far too early in the fiscal year to speculate — but by all means go right ahead — about what this all will mean and if business picks up, then it will be moot. But after the shake-ups that went down in that part of the country, the pressure is most certainly on.
If you were on the call today or have more insight, discuss and get in touch.

Is Tim Flynn Being Vetted as the Next Secretary of the Treasury?

Welcome back, servants of the capital markets. We’ll dispense with anything substantive this morning in order to help you combat the depression. We’ll start off by presenting you with the following:
obama-kpmg.jpg
As you can see, this is the POTUS on vacation working in Hawaii with the entourage in tow. One member of said entourage just happens to be donning a KPMG cap and since not just anyone can get their hands on these coveted lids — and since the gentleman’s face is mostly obscured — we’re curious about a few things: 1) Is Tim Flynn leaving the Radio Station for a cabinet position and if so, which one? 2) Was Phil Mickelson joining the Prez for some time on the links and had a overwhelming urge to represent? 3) If this is just some Obama yes-man, did he receive the cap from a Klynveldian representative and is this a bold move to get KPMG representation in the President’s inner circle?
If you’ve got thoughts, theories, or wild-ass guesses, dispense them in the comments and again, welcome back.

KPMG Rolls the Dice, Will be the Next Auditor of Overstock.com

Thumbnail image for 200px-KPMG.svg.pngBut you already knew that was going to be the case. Back when we asked you to vote on which firm would be the next firm fired engaged by Overstock, over 42% of you said it would be KPMG.

This news comes despite reservations expressed by at least one reader who, at the time, had this commenlockquote>I for one think it is sad that such a high percentage of survey responders think KPMG will pick up OSTK. I hope from a public opinion and liability standpoint that KPMG will resist the urge to add yet another high risk client to its listing and cause further damage its reputation.

Sorry, dear reader but apparently the high profile cat fight between the company and Grant Thornton wasn’t enough to scare KPMG off. Not even the very public revelation of Patsy’s creepy-ass stalking of Overstock critics in the financial media and blogosphere caused the KPMG partners in SLC to turn this client down.

Oh, and not to mention a management team who thought that filing unreviewed 10-Q was the best course of action. But as white-collar crime expert (and self-proclaimed crook) Sam Antar told us:

KPMG is taking a client with no management integrity and is well advised to study SAS No. 99 about “Consideration of Fraud in a Financial Statement Audit” regarding the unethical “tone at the top” set by Overstock.com’s unprincipled management team. Every single initial financial report for every reporting period issued by Overstock.com has failed to comply with GAAP and other SEC disclosure rules since the company’s inception. Overstock.com has restated its financial reports two times in the last three years and now is trying to avoid a third restatement of financial reports resulting from its improper use of “cookie jar” reserves to inflate its financial performance from Q4 2008 to Q3 2009.

In case you’re not convinced of management’s shadiness, Sam also pointed out that they intended to wait for the current SEC inquiry to be resolved prior to choosing a new auditor:

Patrick Byrne and Jonathan Johnson went back on their promise that they would not shop for an audit opinion. Both Byrne and Johnson previously told investors that Overstock.com would wait until after the SEC Division of Corporation Finance completed its review of the company’s financial disclosures.

We looked at the transcript of the conference call and here’s what we found (a link to the entire transcript is below):

Willis Taylor – Gagnon Securities – Analyst

Since you’ve dismissed your auditor for a very specific accounting choice, when you go to select a new auditor, how do you prevent yourself from being accused of opinion shopping?

Jonathan Johnson – Overstock.com – President
That’s a great question, Louis, and that’s part of the reason that we’ve decided not to select a new auditor until this — until we resolve this issue with the SEC. We do not want to be accused of opinion shopping. We’d like the SEC to help us figure out — we’d like them to say we’ve done it the right way or we’ve done it the wrong way. Once they say one of those two, we don’t need to opinion shop.

Patrick Byrne – Overstock.com – Chairman and CEO
But, so, I would even say to the point that when people have contacted us, we have discouraged any communication on the grounds that we got — for just that reason — well, I have the — no matter who we talk to now, then whoever we ultimately pick, people are going to say, well, you did this because you opinion shop.
So we’re really not having discussions with anybody. It’s nice to get phone calls, but we’re not talking to anybody until we get through this just to prevent — just as a prophylactic measure.

From the sounds of it, Overstock was beating off firms with a stick, so the pressure must have gotten to company’s audit committee to pick a new firm prior to the SEC wrapping up its little inquiry. So can we assume that since the SEC hasn’t told them yay or nay on their accounting, they ARE opinion shopping?

And so the winner (read: next to be dismissed) is KPMG, who not only has to throw together an audit for 2009, they have to re-issue 10-Qs for the last three quarters. Who in SLC is giving up sleep for the next four months?

Here is the Overstock press release (we emphasized some good parts) which is not shy about slamming Grant Thornton or that the SEC isn’t finished with its inquiry:

Overstock.com, Inc. (Nasdaq: OSTK) today announced that its Audit Committee engaged KPMG as the company’s independent registered public accounting firm of record for the fiscal year ending December 31, 2009. KPMG will conduct an integrated audit of the company’s 2009 financial statements, including review of the company’s quarterly information for the periods ending March 31, 2009, June 30, 2009 and September 30, 2009.

“It is nice to be back with a Big Four accounting firm,” said Jonathan Johnson, President of Overstock.com. “We are pleased to have the resources and professionalism that KPMG brings as our auditors. We will work closely with them to timely file our 2009 Form 10-K. In the meantime, we remain in discussions with the SEC to answer the staff’s questions on the accounting matters that lead to our filing an unreviewed Form 10-Q for Q3.”

Overstock.com’s Audit Committee dismissed Grant Thornton, its previous auditors, in November when Grant Thornton advised the company that they had revised their position on how the company should have recorded a $785,000 asset in 2008, and, that as a result of this revised accounting position, Grant Thornton would be unable to complete their review of the company’s Q3 2009 financial statements unless the company amended its previous 2009 quarterly filings and restated our 2008 financial results.

We wanted to get KPMG’s thoughts on this but our emails have gone unreturned at this time. If you’re in the know, definitely get in touch with us about anything related to the latest twist to this story.

OSTK_Transcript.pdf

The Day After: KPMG and E&Y Holiday Party Report

Thumbnail image for HolidayParty.jpgWe were reminded that not only was E&Y FSO raging at a tourist trap last night, KPMG’s Financial Services practice was also tying one on at Jim Brady’s in the FiDi. This particular fiesta is the first major get-down we’ve heard of KPMG hosting so it’s good to know that there’s a little bit holiday cheer at every firm.
The Jim Brady’s party has been a popular event in the past and it’s a partner-free party so it’s a perfect opportunity for Klynveldians to blow off some steam, pants optional.
One source told us that it was well attended again this year despite being beer and wine only. We’re confident that was supplemented by flasks and other treats as another told us that the party was a “blast”. Safe to say that there was plenty of ass-grabbing as well as being an all-around bitch-about-KPMG fest.
Considering we haven’t heard a peep about E&Y’s get-down at TOTG, we can only assume that it was also epic.
Hopefully your cocktail flues have subsided to the point that you can tell us about the great night. If you remember anything, share the highlights or get in touch.

KPMG Global Revenue Drops 11.4%

Thumbnail image for Thumbnail image for Thumbnail image for PomeranianSP1324.jpgThe wait is over Klynveldians. Your firm’s revenue results are out and — not to put fine a point on it — they’re disappointing.

The press release has the typical spin that we’ve come to expect from the Big 4 bigiwigs as Tim Flynn focuses on the, ‘high growth markets’ and the opportunities that arise out of ‘a markedly changed regulatory environment’ (code for: “Democrats are in power”).

These “opportunities” are noted but the numbers speak for themselves. As Big Four Blog notes, “A drop in revenue was expected, the surprise was the magnitude of the drop, which was higher than other Big4 firms.”


From the press release:

KPMG, the global network of professional service firms providing Audit, Tax and Advisory services, today announced member firm combined revenues totaling US$20.11 billion for the fiscal year ending September 30, 2009, versus US$22.69 billion for the prior fiscal year, representing an 11.4 percent decline in U.S. dollars.

“While overall revenue results for the 2009 fiscal year reflected the global economic downturn, we were pleased that our continued investments in high growth markets resulted in continued growth in those country member firms,” said Timothy P. Flynn, Chairman of KPMG International.

The drop in revenues breaks down like this:

• Audit – $9.95 billion in FY09 versus $10.69 billion in FY08, a 6.9% decline in U.S. dollars.

• Advisory – Revenues of $6.07 billion in FY09, versus $7.27 billion in FY08, a 16.6% decline in U.S. dollars.

• Tax – $4.09 billion in FY09 compared with $4.73 billion in FY08, a 13.4% decline in U.S. dollars.

The numbers certainly speak to the tough year that KPMG professionals have witnessed through many rounds of layoffs and several shake-ups that appear to be part of major restructuring in the U.S.
So now that the 2009 earnings season has come to a close, all the firms can focus on making 2010 less crappy. That should be breeze. We shall see. If you’ve got thoughts on the Radio Station’s year, or want to talk about how psyched you are for 2010, discuss in the comments.

KPMG reports 2009 revenues of US$20.1 billion [Press Release]

See also: KPMG 2009 Revenues of $20 B Drop 11%, Most Among Big Four Firms [The Big Four Blog]

Rumor Mill: Tim Flynn Paying a Visit to Montvale Today?

TimMFFlynn.jpgThat’s what we’re hearing! A source has informed us that TF is in the Garden State today “announcing a significant amount of outsourcing within the IT practice of the firm.”
Our source also indicated that TF — currently running second in the Accountant of the Decade vote — is:

…making general statements about the firm as a whole in regards to outsourcing. We were told that if we were getting outsourced there would be “advanced warning” or that they would try to move people around without letting them go, etc.

“Advanced warning” like a flare gun? Church bells? A lighthouse? The people need something more specific, TF.
It sounds both internal IT and advisory IT professionals are getting the pleasure of the pep talk so if you were there (or going this afternoon, rumor is there’s two meetings), send us your thoughts and discuss.