Category: Big 4

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

Intern Needs Help Breaking the News of “The Decision” to Leave His Current Big 4 Firm for a Rival

Ed. note: Need advice on your career, the CPA exam or how to best enforce your firm’s dress code? Email the career advice brain trust at advice@goingconcern.com for answers.

Dear GC,

This past summer I worked as an intern with a Big 4 firm. Learned a lot, some decent people, long hours. Still felt relatively miserable considering most of the people I worked with were wound pretty tight. Fast forward to now, and I am considering “taking my talents to south beach” by switching to a different Big 4 firm. Yes, there is an immaterial amount of additional money on the table, so my decision comes down to (1) a more interesting client base and (2) a more exciting and open culture among the happier employees at the new firm.

To me “the Decision” has been made. How do I tell the firm I interned with (and accepted an offer with) that I won’t be coming to the party next year? Am I at risk of being “that guy?” Can you put me in contact with a cable network willing to run a one-hour special so I don’t have to tell them directly?

Thank you.

-Raymone James

LeBron Raymone,

First, congratulations on one-upping your entry level status in such a dire market. It sounds as though your decision is a done deal so cutting the cord with your personal version of Cleveland shouldn’t be hard to do.

Being that it’s already November, you need to reach out to the firm you’re breaking away from immediately. They’re in the middle of interview season anyway, and knowing that they have an additional spot in their budget now rather than later is important (and fair to their process). Reach out to the recruiter that was your point of contact within the firm (and probably the one that presented you with the original offer). Leave them a voicemail at work stressing the need to speak about a “time sensitive issue” and follow up with an email stating the same. Should you not hear back from them in 48 hours, follow up with another call. If it’s another empty voicemail, follow up with another email (forward the original) and state then that you will not be starting with them after graduation. Explain the situation (using the “it’s not you, it’s me” angle usually works), and thank them for the positive intern experience.

In fairness to them you should try to speak to them live on the phone; however you’re not obligated to make a dozen attempts to reach them. Everyone has email in their pocket these days and it’s reasonable to expect a response in two business days.

And why are you worried about being ‘that guy?’ If by that you mean ‘the guy who left for better money, clients, and culture,’ I’d bet it’s safe to say many of us wouldn’t mind being that guy (or lady) too.

Good luck.

How Much Trouble Is PwC Looking at for All This MF Global Business?

As has been reported, MF Global may have done some commingling of client money with its own which is a big no-no. This means the Feds are now on the case, which means typically cool-as-a-cumcumber cucumber Jon Corzine could be sweating a bit. MF Global’s auditor, PwC, on the other hand, has it made in the shade (at least somewhat). Why? How? Alison Frankel over at Reuters tells us:

[E]ven if it turns out that MF Global was illicitly dipping into customer accounts, if that commingling of funds helped keep the business afloat, PwC is protected by in pari delicto.


If you’ve never heard of in pari delicto, that’s the obscure doctrine that says a bankruptcy trustee that’s representing the corporation can’t go after another party for stunts pulled by said corporation. In other words, if MF Global commingled funds, if (probably more like “when”) the trustee attempts to recover funds from PwC, the firm will be protected. Francine McKenna has been writing about in pari delicto since early 2010 saying that it’s “like a pair of needle nosed pliers by audit firm defense lawyers to diffuse a bomb” and last year’s ruling for KPMG in Kirschner v. KPMG and the favorable ruling for PwC in Teachers’ Retirement System of Louisiana v. PricewaterhouseCoopers LLP reaffirmed that sentiment. PwC probably isn’t sweating this.

But what about PwC’s audit opinion on MF’s financial statements? The Grumpies pondered the idea of what might constitute grounds for P. Dubs to issue a going concern opinion for MFG:

Might that include four years (2008-2011) of massive losses, as occurred at MF Global? Might that include severely negative free cash flows for three of the last four years? Might that include an exposure to European sovereign debt that will lead to greater future losses? Might that include several downgrades in the credit ratings?

Say you’ve got a broker-dealer client that has no European sovereign debt exposure and isn’t covered by a ratings agency. You simply have massive losses for four straight years and negative free cash flow for three out of the last four and few signs that things are turning around. Do you think there’s any doubt about this business’s ability to continue as a going concern? What about substantial doubt? Throw in the Eurotrash debt and junky bond ratings again and where do you stand now? Yikes.

But PwC was cool with it. We probably know the why (money and client retention, natch). But how? Love to hear some opinions on that. No matter the answer, our lawyer friends will do well by it all.

MF Global Owes CNBC More Money Than PwC

As you may have heard, MF Global Holdings filed for Chapter 11 bankruptcy protection this morning. You may have also heard that for some strange reason, MF owes CNBC about $845k and change. Turns out, that is more money than it owes to PwC ($312,598), Alvarez & Marsal Tax Advisory Services ($65,000), The Siegfried Group ($30,000) and KPMG ($10,000) combined.


The bright side for P. Dubs is that they got most of the $12 million that they charged the company with last year. Of course if the shareholders take this bankruptcy as well as Lehman’s have (not to mention the NYAG and the State of New Jersey), then that really doesn’t serve as much consolation.

MF Global Bankruptcy Filing [via DB]

PwC Wasn’t About to Let October Pass Without Announcing Their Latest Talent Acquisition From KPMG

If you’ve been paying attention, you know that PwC has made KPMG it’s own personal farm system for partners and directors. It seems that P. Dubs follows all the talent out there and then simply calls the men and women up when they’re ready for the big leagues. We’ve noted four press releases put out by PwC announcing appointments of partner/directors that were brought over from the House of Klynveld. And who knows how many other, non-PR worthy partners, have also joined Team Autumn. Trust us, it’s happening; we hear things.

ANYWAY, in today’s Daily Grind newsletter, I wondered if PwC would take the opportunity of All Hallow’s Eve to pull a trick on KPMG, announcing that yet another partner or director had recently joined up with P. Dubs. My wonderment was largely in jest but I guess I’ve misunderestimated the scamps in PwC’s communications department:

Eric Israel, who joins PwC as a managing director, is a former KPMG managing director and that firm’s US advisory practice leader on climate change and sustainability. He has more than 25 years of experience with KPMG where he began his career in the Netherlands as a Chartered Accountant. Later, Israel moved into sustainability consulting where he has focused his work for nearly 14 years. Israel has global experience in sustainable development concepts and application, finance and sustainability assurance, climate change and carbon consulting & verification, business research and development, as well as knowledge management and corporate governance. He also has participated in the work of organizations such as the Global Reporting Initiative (GRI), the Sustainability Consortium and the AICPA’s and CICA’s joint Sustainability Task Force.

Israel co-founded KPMG’s Global Sustainability Services practice and wrote KPMG’s first Sustainability Audit Manual. He received his BA in Accounting and Business Administration from the University of Amsterdam, Netherlands. He will be based in PwC’s New York office.

In other words, Izzy is was KPMG’s Global Sustainability practice. He wrote the audit manual for crissakes! Of course since he’s just a co-founder, that hopefully means that his fellow co-founder is still around. At least until he/she gets their own press release.

Layoffs Watch ’11: Deloitte

Sounds like the aforementioned rumored layoffs have begun.

Yes they are occurring and I know as I am one of the individual’s impacted. There was no advance warning. I know one other individual in Philly that was also laid off. We are both in the tax practice. My understanding is that it is nationwide and mostly impacts senior managers.

Keep us updated if cuts are going down at your office.

PwC Gives KPMG a Break, Appoints Insider as New Head of U.S. Tax

I guess it was funny the first four times (and that doesn’t count the chumps that don’t get press releases) but for the extra special positions, P. Dubs must prefer to keep things in house.

Mark J. Mendola has been named as PwC’s U.S. Tax leader and a vice chairman of the firm. He will also serve as a member of the firm’s U.S. leadership team and the global Tax leadership team. Additionally, he will be responsible for the network of Tax practices across the Americas, including Canada, Mexico and South America.

For those keeping close tabs on this sort of thing, MJM joined PwC in ’86, no doubt inspired to join the tax practice thanks to the efforts of the Gipper & Co. He joined the partnership in ’98 with no indication that he strayed to the HoK. Word on the street is that KPMG is pretty bent out of shape over the competitive poaching, so PwC must be backing off. For now, anyway.

[via PwC]

The Big 4 and the Revolving Door

Last week the bane of Big 4 auditors existence, the PCAOB, broke their cherry on releasing Part II of an inspection report for a Big 4 firm. The honor went to Deloitte, who sufficiently blew off the Board’s recommendations for 12 months, which led to the release of Part II.

Bloomberg‘s Jonathan Weil, who usually sits back with popcorn while these things go down before chiming in, got to it today but with a twist that you probably weren’t expecting:


board members had recused themselves from participating in meetings or discussions this year concerning Deloitte, because of past or current ties to the firm, according to three people with knowledge of the matter.

The board members — Lewis Ferguson, Jay Hanson and the board’s chairman, James Doty — were appointed by the Securities and Exchange Commission in January. Doty had been a partner at the law firm Baker Botts LLP, where Deloitte is a client. Ferguson was a partner at the law firm Gibson Dunn & Crutcher LLP, which also represents Deloitte. Hanson, a former partner at the accounting firm McGladrey & Pullen LLP, has a daughter who works for Deloitte in its Phoenix office.

The board’s policy is to not disclose recusals, in spite of its mission to “further the public interest,” as if these are none of the public’s business. “Recusals are confidential,” Colleen Brennan, a board spokeswoman, said. Doty, Ferguson and Hanson declined to comment. A Deloitte spokesman, Jonathan Gandal, said: “The PCAOB itself does not comment on recusals, and as such it would be inappropriate for us to do so.”

It’s a pretty nice scoop by Jon and we’re all used to the silence from the PCAOB and Deloitte when someone gets the best of them but honestly, is anyone surprised? Does anyone care? The answer to the first question is “No.” The answer is the second question is “Maybe.”

With the exception of Mr. Hanson (family connection, we’ll give you that one), the recusals seem a little silly since neither Ferguson or Doty actually worked directly for Deloitte. Okay, so Baker Botts and Gibson Dunn have Deloitte has a client. Which Big Law firm doesn’t? It’d be pretty tough to find any DC lawyer who didn’t do some time at a firm that represented Deloitte. That goes for any Big 4 firm. They’ve all got deep pockets with lots of legal problems, of course they’re going to hire the best lawyers money can buy. Does that make guys like Ferguson and Doty unfit to make decisions with regard to that firm?

Well, for one year it does. Under the Board’s ethics code, Doty and Ferguson will be able to vote on matters involving Deloitte in January. Still, Weil doesn’t like the smell of it. And it doesn’t stop with the PCAOB:

[T]alk about being wired: The SEC’s chief accountant, James Kroeker, is a Deloitte alumnus. At the Financial Accounting Standards Board, which writes U.S. accounting rules, the wife of one board member, Russell Golden, is a Deloitte partner.

Look, we like Jon (even if he is a Colorado grad). But how do you find accounting policy makers who aren’t from the biggest, best connected firms that have the most resources? Should the Commission start appointing academics to develop policy? Eeek. Or maybe we’ll let the public make recommendations, “Yeah, my cousin’s a CPA out of Tulsa. Really knows his stuff. He’d be good.” Please.

Dan Goelzer’s seat is coming up and he’ll be replaced by a CPA. Weil hopes that the SEC will find “a qualified person without Big 4 allegiances” but with the revolving door spinning, he’d better hope for a wild card.

Goldman Sachs Envy Gains New Meaning at Big Four [Jonathan Weil/Bloomberg]

A Slightly Haggard Tara Reid Says She Was Not Legally Married to That Deloitte Consultant

Back in August, we learned that Bunny Lebowski (aka Tara Reid) had become engaged and married to a Deloitte consultant named Zachary Kehayov in a matter of hours. We were quite happy to learn that someone in the Big 4 was able to grace the pages of TMZ and not because they were found dead in Charlie Sheen’s pool.

ANYWAY, yesterday I was trolling over some incoming links and discovered that the Celebritology Blog over at the Washington Post was wondering aloud if the wedding was legit based on a TMZ video featuring Bunny and also that “some blogs” (i.e. Going Concern) reported that he lived in DC. After peeling my palm off my face, realizing that Tweets, pictures, and all the media hysteria around BL’s wedding could all be BS, I watched the video:

video platformvideo managementvideo solutionsvideo player


Now there are only a few scenarios that would cause me to look like this: 1) After obtaining leaked financial statements from all the Big 4 firms, I reach levels of paranoia that rival Eric Bana’s character in Munich; 2) 24-48 straight hours of dancing in an undisclosed location; 3) Watching an Oz marathon with Adrienne. Typically in the aftermath of those scenarios, I would probably say anything that would disavow any past reckless behavior. Or, on second thought, I’d probably just own up to it.

That said, I’m not a celebrity and I don’t typically do things that are quite as impulsive as getting engaged and married to a Deloitte hack in less time than it takes to fly from New York to L.A. But that’s just me. Discuss as you see fit.

PwC Associate Quits…To Work For a Food Truck

Sorting through Moanday’s emails, I received one from a very proud (and former) P’Dubber. He wanted to share his resignation letter, where he pretty much tees off on his former colleagues.

An excerpt: “burning bridges ain’t all that bad if people want to jump off of them.”

Thought you guys may enjoy this – my name is [redacted] and this was my resignation letter to PwC I sent to the entire group a few weeks ago…. had to get this forwarded from friends within the group as they confiscated my laptop and disconnected my phone service after i sent this out – also deleted it from everyone’s mailbox by the next afternoon. nonetheless, already has circled around like wildfire. if you do happen to use this – please take out any other names, don’t want word getting back of my moles within the group 🙂

[DWB note: names removed and yes, there’s lots of capitalization issues.]

Sent on : 10/03/2011 06:50:43 PM
Subject : dueces!

fellow underpaid laborers,

no need to bs here, it’s been a pleasure w some, a nightmare w most. my
last words –

to my friends, see you on the flipside

to the newbies, one word: dignity. you are not a part of a meritocracy and climbing the corporate ladder’s just a game. if you a snake, slither your way to the top and look down on everyone with misguided pride. otherwise be real and dont do anything that jeopardizes your values. if you plan on being the future of this group don’t bitch about it together in secret and ruin the sacredness of the pantry, with all that free milk and napkins. and soap. lead by example, not your examples. shit gets pushed down and blame gets pushed up, your boss’s boss’s boss has a boss to blame your grievances on. don’t just be a product of a farming system of the ML of finance. you may leave and feel better, but you’re leaving a bunch of people behind that will go through the same shit you did. respect and loyalty is nonexistent in this group.. act on it. if you can spare yourself a moment in retrospect that you’d remember with disdain, why not. and if this isn’t for you and you already know it stop wasting your time.

to my “superiors”, from the great and timeless Remember the Titans, “Attitude reflects leadership, captain”. oh and this whole external hiring thing is completely hit or miss, the lack of trust in organic growth is pure use-em-while-you-can turn over (pun…HA) culture and it shows.

well, I guess I won’t be getting any recs from here, but f it burning bridges ain’t all that bad if people want to jump off of them.

ohh and to the all bark, no bite HR Manager with an office for midgets, give the man credit for havin some sass, but he has memory issues. the people you told verbatim that sittin for the gmats would be enough, the email that proved it, the way you denied it and put it back on them and didn’t have a care in the world u were losing good talent (not myself of course, letsbehonest), manager of the year. I’d say you were the [redacted] of pdub managers. and don’t text message me man, cmon, seriously? i ask who u are, u reply “your HR manager”? well, not anymore (expletive). and no one likes to be text messaged by middle aged men, no one.

on that note, in the words of the amazing [redacted], dueces!

SHAMELESS PLUGS *YAY*
KorillaBBQ – the new face of Korean BBQ
As seen on the Food Network’s “Great Food Truck Race”
Web: www.korillabbq.com
Facebook: Korilla BBQ
Twitter: @KorillaBBQ

Those of you at PDubs – was it really erased from computers? Do former colleagues get a discount at the truck? We want details.

Layoff Watch ’11: KPMG Asking for ‘Voluntary Redundancies’ Down Under

From the land that brought you Michael Andrew:

KPMG is to push ahead with a round of voluntary redundancies following a slowdown in merger and acquisition activity. The privately-held firm launched the cost cutting program this week, offering voluntary redundancies and part-time working options for its 5000 Australian-based staff.

[…]”We’re seeing a tough, uncertain, challenging and patchy market,” KPMG’s Australian chief executive officer, Geoff Wilson, said yesterday. But he declined to say how many staff would be affected by the shake-up. “While we’re experiencing year-on-year growth, we’re seeing some softening in that growth. [We are trying to] create flexibility in response to the patchiness we’re seeing in the market,” he said.

Crikey. I guess by “create flexibility” Mr. Wilson means, “Your work-life balance is going to get a whole lot easier.”

KPMG calls for redundancies amid slowdown in mergers [SMH via Francine McKenna]