Category: Big 4

If it happens at a Big 4 accounting firm, we’re talking about it here.

In Case the Tryptophan Doesn’t Work, Here Are the KPMG and PwC PCAOB Inspection Reports for Your Reading Pleasure

Actually, if you’re in to this sort of thing, it could make for some pretty interesting reading.


We pointed to a couple of reports this morning (and there are more) out there on the Board’s criticisms of the two firms, so we won’t repeat them here. The most notable thing seems to be each firm’s response to the report. KPMG went with the standard three-paragr��������������������er that promises that they’ll suck less at auditing in the future.

2011_KPMG_LLP_US


But as Floyd Norris pointed out, PwC’s Chairman and Senior Partner Bob Moritz as well as Assurance Leader Tim Ryan put their names on the firm’s response to the Board’s inspection that outlined what steps were being taken to improve the audit quality, which is a first. The firm also released this statement from BoMo, acknowledging the slight uptick in deficiencies:

PwC is built on our reputation for delivering quality. We also recognize that the role we play in the capital markets requires consistent, high-quality audit performance. We therefore are focused on the increase in the number of deficiencies in our audit performance reported in the 2010 PCAOB inspection over prior years. We are working to strengthen and sharpen the firm’s audit quality, including making investments designed to improve our performance over both the short- and long-term.

2011_PricewaterhouseCoopers_LLP

So you can all this – signatures, action plans, etc. – for what it’s worth but the messaging has certainly changed and it differentiates PwC from KPMG. Will have to wait and see if Deloitte or E&Y follow suit.

We Read This Awful Interview with Deloitte’s Joe Echevarria So You Don’t Have To

You don’t have to be Bob Woodward to recognize the formulaic nature of the CEO interview. Reporter goes to CEO’s office, asks loaded questions about the issues of the day, describes the view from the office, elaborates on the person’s exercise regimen, humble (or not so humble) beginnings, people they admire, yada yada yada. Cripes, reading these things makes you want to shave with broken glass but hey! editors get in ruts just liwe’re stuck with the puff. By extension, interviews with Big 4 CEOs are worse because they typically occur with General Counsel sitting in the next room zapping their genitals every time a question is asked that necessitates “I can’t comment on that.”

Today’s example comes courtesy of Reuters who interviewed Deloitte’s Joe Echevarria. What prompted this little chat was the PCAOB’s release of Part II of the firm’s 2008 inspection report. It wasn’t exactly a flattering portrayal of a firm who, when asked to brush up on their audit skills, basically told the PCAOB to drop dead.

Accordingly, the firm is running damage control and that involves getting Joe E. in front of some friendly reporters (read: not Jon Weil or Francine McKenna).

Recently faulted by the main U.S. auditor watchdog, Deloitte has told its professionals that skepticism should be the No. 1 focus during the upcoming auditing season for annual financial reports, CEO Joe Echevarria said.

“I know there’s a heightened awareness about professional skepticism in the firm,” he said. “It’s going to take a while for heightened awareness to manifest itself in actions and documentation because humans are involved here.”

The natural follow-up question here would be, “But Mr. Echevarria, the PCAOB asked you to fix things in 2008-2009, are you saying that you’re now just ‘manifesting itself in actions’?” but that brings out the zapper. That’s okay, we’re all used to it. You know what else we’re used to? Talking about the “expectations gap”:

There is an “expectations gap” between what auditors do and what the public expects, but auditors do have an obligation to detect and report material fraud, Echevarria said.

Echevarria is also asked about auditor rotation, IFRS and (for some odd reason) its settlement over the Adelphia fraud in 2005. Why not ask about the swinging insider trading scandal? What about Taylor, Bean & Whitaker? What about associates sneaking bloggers into the downtown W? WHAT ABOUT THIS FAUX TARA REID MARRIAGE? People want these all-important questions on the record and yet it never happens. Sigh.

By the way since it’s obvious that some of you care about these details, Joe is from the Bronx and his office is in Midtown.

Deloitte pressing for more skeptical audits (God, the headline is even awful) [Reuters]

Deloitte Associate Who Supports Occupy Wall Street Admits That His Idea of Camping is the W Hotel

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As you know, a number of people in Lower Manhattan have spent the last two months Occupying Wall Street by way of camping out in Zuccotti Park. While September and October proved to be unseasonably warm, thus allowing Occupiers to exercise their 1st Amendment rights in relative comfort, November has brought cooler temps which has caused some relative discomfort among the campers. Oh, and Mayor Bloomberg was sorta sick of the mess and had everyone’s tents forcibly removed.

While many protesters have had to seek less squalid accommodations, other supporters of the movement have been able to find quarters that are more suitable for their tastes. This includes Deloitte associate Brad Spitzer who has been traveling to New York from California for work and has taken the opportunity to get his occupy on. And while he’s enthusiastic about the cause, Spitzer isn’t exactly down for park living:

“Tents are not for me,” he confessed, when confronted in the sleek black lobby of the Washington Street hotel where sources described him as a “repeat” guest.

Spitzer, 24, an associate at financial-services giant Deloitte, which netted $29 billion in revenue last year, admitted he joined the protest at Zuccotti Park several times.

“I’m staying here for work,” said Spitzer, dressed down in a company T-shirt and holding a backpack and his suitcase. “I do finance, but I support it still.”

You guys understand. There are just certain comforts that a Green Dot employee gets accustomed to – a soft mattress, a hot shower, room service – no matter how good of a drum circle you find.

Occupy Wall Street protesters stay at $700-a-night hotel [NYP]

PwC Sustainability Partner Blames His Dull Job for Not Rocking “Green” Shoes

If you’re a sustainability professional, people might make the assumption that you are a tree hugger. A green weenie. A dirty hippie. A person who has as much need for a pair of wing tips or business appropriate pumps as a fully loaded H2. Well you can put those suspicions to bed my friends.

Above is PUMA CEO Jochen Zeitz along with a couple of guys from environmental consulting firm Trucost and PwC sustainability partner Alan McGill. As you can see, Mr. Zeitz and the Trucost boys opted for some “green” sneakers to go with their Brooks Brothers. Mr. McGill, on the other hand, is in the standard issue Allen Edmonds. The reason for not getting on board with the hip skids? He’s lame:

The firm’s sustainability partner jokingly suggested his job was too dull to warrant a jazzy pair of sneakers.

Sceptic Tank reports that a PwC spokeswoman clarified the meaning of “dull” to be “PwC can’t be seen to be promoting their clients products in any way.” Which probably also explains why McGill wore a tie as well. Can’t be too careful about these things.

PwC and the fashion faux pas [The Sceptic Tank]

Former KPMG Partner Wants a Job That Is Worse Than Being a KPMG Partner

I kid, I kid. There are plenty of KPMG partners who couldn’t be happier if they were PwC partners. ANYWAY, that’s beside the point. What is the point is that former House of Klynveld partner Leslie Coolidge is running for U.S. Congress in Illinois’ Sixth District. Why would a seemingly normal person CPA opt for a career in the dungeon asylum hellhole that is the House of Representatives? Well, she has her reasons:

“Like many of us, I have become increasingly dismayed by the apparent unwillingness of our current Congress to address the critical issues facing our country today,” Coolidge, 52, said. “As I watched the brinksmanship this summer as Congress actually considered letting our country go into financial default, I knew I could no longer sit on the sidelines. As a CPA, I can delve into and understand complex financial matters and create innovative solutions that make sense. In addition, much of my career was spent negotiating among parties with divergent views to find ways to successfully move forward, something Congress is not doing.”

An agent of change! A uniter, not a divider! All that crap! How could it go wrong?

Coolidge announces candidacy for Congress [NS]

Interns, Here’s the Lowdown on Ernst & Young’s FSO Assurance Practice in NYC

Ed. note: Have a question for the career advice brain trust? Email us at advice@goingconcern.com with your problem(s) but only if you’re comfortable being mocked in an older sibling kind of way.

GC,

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 bestnks 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.

Deloitte Taking Precautions for Possible Unwelcome Guests

This just in:

WFC Update
Zuccotti Park Evacuation

As a result of the evacuation of protestors in Zuccotti Park early this morning, there will be limited access into 1 and 2 WFC until further notice.

Currently, the walkway bridge that connects 1 and 2 WFC will be closed. All building tenants must present identification to gain access. For visitors, the name of the tenant and person visiting will need to be provided to building security.

Access restrictions are subject to change, as information and updates from building management are changing rapidly.

We appreciate your cooperation and will continue to keep you informed through this mailbox. If you have any questions or concerns please do not hesitate to reach out to myself [redacted email] or [redacted].

[Guy who gets to deal with these sorts of things]

Area Operations Manager

Deloitte Services LP

Your Ernst & Young Entrepreneurs Of The Year Include the Dude From Groupon, Patrick Byrne

We really don’t pay much attention to the E&Y Entrepreneur thingamajigs because, well, it’s boring. Sure, we like entrepreneurs just fine but c’mon. These guys are filthy rich and successful and E&Y gives them trophies? Is this sort of commercial circle jerk really necessary? Regardless of our personal feelings, the awards are a big deal – Jay Leno hosted this year’s event for crissakes – and the Google News feed for E&Y is constantly clogged with stories about people advancing to the next round of voting like some sort of capitalist March Madness.

Anyway, Casa de Turley officially announced this year’s winners over the weekend and Reid Hoffman and Jeff Weiner, founders of Facebook for Suits LinkedIn, are your entrepreneuriest entrepreneurs.


In addition to the dynamic duo there are quite a few guys you’ve never heard of that are doing well for themselves including Roger Linquist and Jose R. Mas. See? Never heard of them, have you?

There are also some winners that you have heard of including Andrew Mason, one of the co-founders of virtual clipfest and increasingly looking insolvent Groupon. As well as Patrick Byrne, the founder of Overstock.com. You know, the guy on the Segway. The guy who Sam Antar can’t help to poke and prod every chance he gets. The guy whose company is being sued by seven California counties thanks to a Walmart sticker. The guy who may have had some weirdo trolling a bunch of bloggers’ Facebook friends. Yes, that Patrick Byrne.

But HEY! not every entrepreneur can be squeaky clean. It’s not like he’s Pete Rose or anything. Unless you count this.

[via E&Y]

Entry-Level Auditor Just Can’t Admit He Wants To Work For a Mid-Size Firm

Ed. note: Find yourself caught at a crossroads unsure which path to take? Feeling lost and hopeless? Just want to know your lucky lotto numbers for next week? Hit us up and the career advice brain trust will take your hand, restore your faith, guide you down the path of greatness and even pick out what you should wear tomorrow.

Hi,

By the end of the week, I am going to need to make a decision on which offer to accept. I am applying for entry-level auditing positions, and received my first offer last Friday. I also anticipate receiving two more by Thursday. The one I recently received is from a mid-size regional firm that specializes in an industry that I find to be very interesting. I alsoith their staff and think I would really enjoy myself there. One of the offers I anticipate receiving on Thursday is from a Big 4 firm.

The biggest issue for me it seems is which job will put me in the best position 3-5 years from now. There is a greater than 50% chance that I will need to move in the next few years, and I keep going back to the fact that working for a Big 4 will give me the most options. The mid-size firm does some work nationally, and may connect me with other public accounting firms around the country, but that is about the extent of it. Is working at a Big 4 that big of a deal to future employers? If I plan to make a career in public accounting, is it easy to switch from one mid-size firm to another – or am I more likely to get recognized by a mid-size if I’m coming from a Big 4?

I have been a regular reader of Going Concern over the past few months, and appreciate the depth of knowledge you and the readers have, so I’m hoping you can help.

#1) Thanks for the kind words but maybe you need to spend a few more months on this website if you actually do not possess the knowledge to answer your own questions for yourself, namely the ones that question just how big of a deal Big 4 is on your resume. We at least hope when you say “mid-size” you mean a truly mid-size and not a small, regional firm that just so happens to have a national client or two. At least you’ve got hope for flexibility in that case.

#2) Now that you’ve thought about it for a moment, slapped yourself upside the head and come to the realization that yes, Big 4 on your resume really is that big of a deal (how we feel about that is irrelevant for this discussion, we are not talking about the Kool-Aid itself but simply the effects of said Kool-Aid), the question is what you want to do in the next several years. You should also realize from your short time on this site that few public accounting grunts actually dedicate 3 – 5 years of their life to the firm. 2 years in Big 4 is sufficient to get your CPA, get some good connections and earn a solid item on your resume.

However, you note part of the mid-size appeal to you is the opportunity to work close to an industry that interests you. It’s awesome that you are aware enough of what you like to think in these terms but what happens if you turn down Big 4 for this mid-size option only to find out this specialization is not at all interesting to you? Are you 100% positive that the Big 4 opportunity wouldn’t allow you the same close quarters with an industry you find appealing?

When you say you hit it off with the mid-size staff, do you mean their actual staff or just the hot recruiting bubbleheads hired to lure you into their trap? If you mean actual staff, then I think your decision here is clear. You seem to have a good feeling about the mid-size opportunity and are simply confused because you have bought into the idea that there is nothing like Big 4. That isn’t a myth, but it doesn’t mean that you’re doomed to a career of mediocrity if you forgo the Big 4 route for something that you feel fits you better.

You probably already know all of these things and didn’t really need to email us to ask. If your heart is telling you go mid-size, do it. It isn’t going to make you a public accounting pariah, though it may limit your opportunities later on slightly. Note I said slightly. You will not be relegated to some public leper colony for being branded with the curse of anything but Big 4. On the other hand, Big 4 might steal your soul and you could find yourself suicidal before you are anywhere near to the two year mark just for the sake of a few extra opportunities and a nice resume item later on down the road.

Is that a risk you are willing to take? Only you can decide that. I’m pretty sure we have at least one or two mid-size staff lurking around here to offer you some more specialized advice based on their experiences beyond what I’ve just suggested to you (just ignore GT Partner, who is an obvious troll). Good luck.

PwC Is Still Looking For (Other Big 4’s) Talent

We didn’t say poaching. But if we did say poaching, we’d also mention PwC is pretty damn good at it.

A non-PwC but Big 4 tipster shares an unsolicited email received on LinkedIn. Names have been redacted to protect the innocent (and guilty):

Significant Audit Opportunity with PwC in Chicago!
Dear ______,

Hello! I took some time to review your profile and felt that it would be mutually valuable for us to connect. I am a the manager of the talent acquisition team for our Assurance group at PwC, and we are currently experiencing substantial growth in this area across the US. In fact, our Chicago region ranked # 1 out of 6 markets with respect to growth in 2010.

Therefore, I’d appreciate the opportunity to set up some time with you to have a dialogue around industry and marketplace trends and PwC’s current expansion plans.

Even if you are not currently exploring outside opportunities, I would welcome the chance to network with you. Alternatively, if you know of anyone else who is open to considering new ventures, please feel free to pass on my details. With all the changes going on in the industry, especially at PwC, it’s always good to do a little information gathering.

Please feel free to contact me, or _____, Experienced Recruiting Associate – Assurance, at________ or at _______.

I look forward to hearing from you.

Is it just me or is “a little information gathering” a totally creepy proposition? And really?! “Significant” position? That’s the best they could do? I’m sorry but if I were a Big 4 grunt happy with my employer, it would take more than “significant” to get me to double cross them by abandoning them for the enemy.

Of course, this teaches those of you miserable in your current positions that it is important to have an updated LinkedIn presence that will draw in those anxious recruiters in like flies to Caleb’s armpits after a marathon yoga session.

Go get ’em, PwC!

Ex-Marine Who Missed Internship Deployment Looking For His Next Assignment

Do you guys ever get an insidious sense of deja vu when reading some of these advice posts? I know I do. Anyway, here’s another lost little sheep looking for a sense of direction in this big scary world. If you’re feeling lost, hopeless, confused or otherwise unsure, hit us up with your issue and we’ll do our best not to make fun of you in front of everyone.

Dear GC,

I have a situation that may be just a little bit different than most college undergraduates but can’t be the only one in this situation. I attend a small private business sch I am a Marine Corps veteran of 4 years and currently using the G.I. Bill as an undergraduate accounting student with a 3.62 GPA. I am in my second year; however, this is my 4th semester and because I do summer semesters as well and I got 21 credits from military experience, I am right along with the Juniors in terms of graduation date. In fact I will have more credits than them when they graduate needing only 15 more to get the 150. The problem arises in me being ahead, yet behind. I am far ahead of the the sophomores, yet a little behind the juniors in regards to accounting courses completed. I am taking Intermediate I and AIS this semester and Intermediate II and Tax in the Spring. I thought because I didn’t have that many accounting courses completed going into this semester that I should wait to apply for internships, especially Big 4. Then I found out that the most accounting firms around here do all of their recruiting in September. Even though Deloitte and PwC are the only big 4 firms recruiting at my school. So I started applying for internships in October to smaller firms and filling out talent profiles on the Big 4 websites. I do plan on attending University of Pittsburgh’s MAcc 1 year program after graduation so I would in a sense have another summer opportunity to get an internship. My question is, should I in the meantime try and get an internship doing individual tax returns or private accounting at a chain retail company? (I have offers for both) Ideally I want something in Public, and eventually that is what I want to; however, would either of those internships help me at all in the long run towards getting an internship with the Big 4 next year? Also like I said only those 2 seem to recruit at my school. Is there anyway to really have a chance at E&Y or KPMG? Thank you in advance.

First off, thank you for your service to this country. My grandfather was a Marine (enlisted just before the end of WW II and missed the action), so out of respect to you for your service, I’m not going to make an excessive number of comments about how much editing I had to do to make your letter readable. But I will make a humble suggestion (in case you weren’t just being sloppy given who you were emailing), please tighten up your writing a bit before you go out there sniffing for Big 4 gigs. Granted, most recruiters can’t spell recruiter but that doesn’t mean you shouldn’t be putting your best foot forward here.

Now that we got that out of the way, can I ask you something? Why are you so dead set on the Big 4? You’re not actually planning on spending your entire career there, are you? It is unclear from your email why you want to be in the Big 4 so bad, so we’re going to assume here that either you drank the Kool-aid or don’t realize that there are a myriad of other opportunities for someone with your background.

Coming from a small school with low recruitment and boasting a 3.62 GPA probably won’t make you stand out on any HR desks anytime soon but the tide could definitely turn when you get in to the University of Pittsburgh MAcc program, assuming you do well and are able to attend recruiting events that are likely more active than the ones at your current school. As you noted, this is good. Also good: your military service (they eat that stuff up, it shows an ability to take orders and not revolt) and the fact that you will definitely be CPA eligible from the moment they bring you on.

What’s the rush in the meantime? Are you looking for the experience? Trying to get your foot in the door in public? Have bills to pay? Just want to get out of the house? You have plenty on your plate (not to mention the CPA exam ahead of you), if I were you I’d just focus on school for now instead of considering doing tax returns in your spare time. Unless that’s what you want to do with the rest of your career.

Since many accounting students participate in VITA anyway, telling recruiters you interned on tax returns probably isn’t going to earn you many points. And unless the “private accounting” gig involves work under a licensed CPA that you can use toward your experience requirement for CPA licensure, I wouldn’t bother.

Comment section is open for the Peanut Gallery’s (much appreciated) two cents.