Category: Big 4

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

Silvercorp Metals CEO Reminds Everyone That They’re a ‘Real Company’

As we’ve discussed, Silvercorp Metals hasn’t appreciated the anonymous letters floating around the Series of Tubes accusing the Canadian miner of accounting fraud and has stated that, save their assets in China, “this wouldn’t be happening.” What the company would really like is for these jerks to show themselves and cooperate with investigators. But until that happens, Silvercorp hired KPMG to poke around to calm all the fears out there. According to reports, the House of Klynveld will have a report out soon but in the meantime, Silvercorp CEO Feng Rui will address everyone who thinks that his company is just a bunch of Tonka trucks in a sandbox:

“We’re a real company and will fight against shorters and distorters,” Feng Rui, Silvercorp chief executive officer, said today at a meeting in Beijing.

Furthermore, the auditors in this matter, Ernst & Young, have carried out their duties to a T and if you think some bullshit letters are going to cause them (or Feng & Co.) to do things differently, you’d be wrong:

“Our auditing doesn’t have anything wrong, the allegations are fabrication,” Feng said today in an interview on the sidelines of the meeting.[…] “The allegations won’t prompt us to make any changes in the process of financial reporting and auditing,” he said

Frankly, it’s embarrassing that they even have to address this but you’ve given them no choice.

Silvercorp Says KPMG to Issue Fraud Allegation Report ‘Soon’ [Bloomberg]

PwC Manager, Exploring New Career Opportunities, Accidentally Makes Entire Office Aware of It

When looking for a new job, discretion is important. Discussing your upcoming interview during the morning team meeting is typically frowned upon as well as making remarks like “I’m getting out of this godforsaken dump as soon as possible” within earshot of superiors. Another no-no? Not catching the “PwC [Your office] All” in the CC line of your response to a professional recruiter:

Caleb,

Woke up this morning only to find out that someone decided to look for new opportunities. Only problem is that on his reply he copied the entire office of 1900 people. Perhaps a lesson learned for all those auditors looking for a new job.


We’ve presented this in chronological order, so no need to start from the bottom and we’ve redacted the names to protect the innocent and those not too good with the email. As you can see, things get off to a pretty warm start:

[Anxious Recruiter],

I am very interested! How do we follow up on this?

[Anxious-to-get-the-hell-out PwC Manager]

The recruiter, sensing a live one, is on it:

I am submitting your new resume today. When can we talk [Anxious PwC Manager]?

The PwC Manager, sensing a little-too-eager beaver, starts balking:

[Anxious Recruiter],

I am committed all weekend, and will be unable to discuss until sometime on Monday. I hope that’s okay,

[PwC Manager]

Anxious Recruiter, being the early-bird-gets-the-worm type, plays it cool and suggests that they still get things rolling first thing Monday:

Not a problem [obviously less interested PwC Guy]. Can we set a time to talk on Monday? I get in to the office at 745am. I also have a meeting at 10am. I have 2 positions that are remote to discuss. I have already shared your resume with the client and they are interested.

Thanks!!

Sunday afternoon comes with no word from formerly excited PwC Manager and our recruiter starts panicking:

[PwC Manager],

Can we set up a time to talk tomorrow please? It is important!

Thanks!

It’s finally gotten to the point where the PwC Manager has to say, “Look pal, you’re freaking me out. Don’t call me, I’ll call you.”

[Anxious Recruiter who is coming on way too strong at this point],

I am currently traveling and will not reach my destination until after 10:30AM. Let me know what time will work for you after that, and I will try and make myself available.

Thanks,
[PwC Manager]

I know email is tricky but be extra careful with the more sensitive ones, mmmkay?

Deloitte’s Recent Promotion Awards Fail to Impress One New Senior Associate

A “New Senior” passed along this little tip this morning:

Over the last couple of weeks Deloitte has been sending out Promotion “Awards.” I find it funny they think two years of service is worth only a $100 applause award. Honestly getting only $100 is more insulting than getting nothing at all.


On a day where Barry Salzberg is doing a happy dance in the hallways, our friend must have felt compelled to share the news of generosity. If you’re a recipient of a crisp new hundo, share your story in the comments and email us with any other cheery tidbits on the first day of autumn.

What’s Your Motivation for Leaving a Mid-tier Accounting Firm for a Job with Big 4?

Contributor note: if you have a question for the Going Concern audience at large (including the useless dbags) or our team of accounting drop outs and degenerates, please get in touch.

Here’s a tip if you guys are thinking about submitting a question: it helps to know your motivation if you are asking for our advice. It’s difficult to tell you what you should do without knowing why you’re trying to do it, unless you’re asking us an obvious question like “should I take X position to make way more money?” because in that situation we obviously assume you’re in it for the money. There’s nothing wrong with that.

That said, this indentured servSo let’s commence to helping.

I’m currently working for a large mid-size firm as a Staff II and will become a Senior I next year on a relatively large public client. However, I’ve been debating whether or not I should follow up on opportunities to work at a Big 4 firm if it means I have to wait an additional 2 years to become a Senior I?

I know from my friends currently working in the Big 4 firm that new hires work for 3 years at the staff level before being promoted to Senior I. In addition, I may also slip one level from Staff II back to Staff I when I change firms. I’d essentially be 2 years behind my peers as a result of going to the Big 4 so I don’t know if making this switch would help or hurt my career. Is it really worth losing that much time in order to get the Big 4 name on my resume? Should I wait until next year in hopes that I could be recruited as a Staff III instead?

Surely I’m not the only one struggling with this decision, does anyone else have experience with this problem?

Thanks and Best Regards,
-Staff II(?) Auditor

Well, Would-Be Staff II, as you are probably already aware, the Big 4 item on your résumé is going to blow any of that mid-tier nonsense you’ve got going now out of the water (don’t get butthurt, mid-tier-ers. It’s not personal). The actual practical application of what you’re learning at a mid-tier firm versus what you might learn at the Big 4 is irrelevant here; it’s all about marketing yourself, and you’re better equipped to do that with bragging rights slapped all over your work experience. You’re pretty much only going to get those rights from the Big 4.

That isn’t to say you can’t gain valuable experience from your current employer, so it comes down to what you want to do career-wise and in what time frame you would like to accomplish it. Have you passed the CPA exam already? Are you itching to get out of public altogether? It’s pretty hard to try and push you in the right direction without knowing what that direction is. What do you want out of your career? Money? Prestige? Experience?

Why did you start mid-tier in the first place? Are you happy where you are? Do you enjoy the work and feel fulfilled? What is it you think Big 4 can offer that you aren’t getting at your current firm?

If I were you, I would wait it out, gain additional experience, keep those Big 4 contacts and try to make the jump when you have a little more leverage. The more secure you get in your skill set, the better equipped you’ll be to leverage that experience into a more ideal gig with a Big 4 instead of starting at bottom a level above the clueless interns.

I would also have a candid conversation with whomever you’ve been speaking to at the Big 4 about your concerns. Don’t come off as a money-grubbing, work-averse dick but definitely express an interest in being involved with work on par with what you’ve been doing with your firm, not taking a step back. Feel free to embellish whatever paperwork you’ve been assembling up until this point into a full-blown PCAOB-compliant masterpiece.

I’m sure any number of mid-tier grunts who read this site religiously can talk you out of making the jump, and for good reason, while others will tell you to jump now and worry about how quick you ascend the Big 4 ladder later. A smaller firm allows you a better chance at truly learning your trade instead of simply going through the motions and checking boxes; think of mid-tier as stripping at the pole as opposed to mopping up the floors. You probably won’t put stripping at the pole on your resume but you’ll be gaining practical experience you can segue into a better opportunity.

I’m not clear on the opportunity you’re after here. Can you clarify?

Happy 100th Birthday PwC Los Angeles!

Things sure have changed quite a bit since 1911 when it was just Price Waterhouse (what do we think the logo looked like?) and no one gave a shit whether working moms had a great place to work. Possibly in an effort to make up for those less diverse-sensitive years, the firm is celebrating their century in L.A. with “100 Years of Service, 100 Ways of Giving Back.”


P. Dubbersteins will spend a few hours sitting in god-awful traffic on their way to two dozen community organizations to do various nice things. And in case you feel compelled to share your story, the firm will let you do that too.

PwC has also built an intranet site with the theme, “What’s your LA story?” to generate excitement and internal buzz about the anniversary. It provides a centralized resource of information about the campaign and serves as another vehicle for the firm’s LA partners and staff to review and sign up for projects. A unique feature of the site is a page allowing people to share personal stories of how they have helped in the community, fostering a feeling of shared commitment and inspiring others to participate.

Sharing stories about how you’ve made a difference in your community is cool and all but I’m sure many current and former PwC L.A. employees have tales from the last 100 years that are just as interesting but fall within a different narrative. Maybe there was a partner at the Oscars who somehow ended up in the arms of Sophia Loren or maybe he got bombed with Jack Nicholson at the Vanity Fair party only to be found later, naked and passed out on the side of Mulholland Drive.

Or maybe you just recall some inter-office exploits that were especially memorable. The point is, PwC L.A., this is a time for reflection. So if you got memories (fond or not so much) about your time there, feel free to share them below.

What Can a Big City Big 4 Auditor Expect at Small City, Second-tier Firm?

Back with another edition of “Decide My Life for Me – Public Accounting Edition.” Today, an antsy Big 4 employee in a large city wants to know if moving to second-tier firm in small city will mean a demotion or cut in salary.

Do you have trouble matching your socks? Need help making sense of your cryptic performance review? Are you worried that someone with a bun in the oven is also capable of doing their job? Email us at advice@goingconcern.com and someone will try to straighten you out.

Back to our “Should I Stay or Should I Go” du jour:

Hi,

I was curious if you had any information on employees jumping from Big 4 firms (auditing) to upper-mid-tier (i.e. McGladrey). Do you find that they are often promoted? I am currently in a large city and am uninterested in staying in the city long-term. I was thinking of moving to a 300,000 person city with some firms like McGladrey, Grant Thornton, etc. If I am jumping ship as a senior or manager, where should I expect to come in at? Same level? Same salary?

Thanks
Jumper

Dear Jumper,


Had it with Big 4 life, eh? Let me guess, the groupies got to you, didn’t they? Every damn time.

As to your inquiry, here’s the deal – you won’t be promoted if you decide to accept a position with McGladrey or Grant Thornton. Why? There are a few reasons: 1) You don’t have the experience; 2) You don’t have the experience; 3) You don’t have the experience. We all know that Big 4 auditors think they’re pretty special and that anyone who doesn’t soil themselves after looking at their stellar résumés followed by an immediate job offer is simply stupid. So it comes as a shock to many when this scenario doesn’t play out. As far as second-tier firms go, they definitely want Big 4 talent when they can get it but they’re aren’t about to throw you a bone because you worked at E&Y Chicago or PwC New York.

What you can expect – if you’re senior associate or a manager at a Big 4 firm, you can reasonably expect to be offered (not a guarantee, obv) a similar position at GT or Mickey G’s that you currently have. If you’re moving to a smaller city, you could see a similar salary but you should not expect a raise. You’ll receive the market rate for your position in your new city. The firm may put you at the high range of pay for your group but be prepared to be reminded of that fact come merit increase time.

Anyone made a similar move with different results? Share below.

KPMG Is Going to Buy Itself Some Indentured Servants in the UK

There’s nothing like buying your loyalty. I’m not saying Big 87654 programs like this aren’t somewhat good for the morale and worth the firms’ dime(s) not just to buy loyal servants but also to help prepare future capital market servants in general but it’s sort of a scam. Sometimes, these education programs don’t work out and the slaves revolt, as happened with this young man in an undisclosed market somewhere in a state that ends in tts.

Anyway, KPMG wants to recruit a whole bunch of 18 year-olds into its work/school program (across the pond they call this a “scheme,” which makes it exponentially more funny) by next September. The House of Klynveld will pay these kids’ tuition fees and pay them a whopping starting salary of £20,000 ($31,460 in Fed Funny Money).

Here’s a brief and completely related link to an article on indentured servitude: “Servants typically worked four to seven years in exchange for passage, room, board, lodging and freedom dues. While the life of an indentured servant was harsh and restrictive, it wasn’t slavery. There were laws that protected some of their rights.”

Sound at all familiar?


According to The Telegraph, the course opens its doors to 90 students for the first time this month, with two-thirds of entrants coming from state schools or colleges, compared with around half from the traditional graduate entry route.

More than 1,000 would-be ex-KPMGers applied for the program, and that number is expected to rise year over year. They say that’s because tuition is up to £9000 a year (about $14,153 but there’s a Fed meeting fast approaching, that number is subject to change) but my guess is mediocre performers need jobs and accounting isn’t that bad of a gig for some of them. I’d also guess that a few of these program “graduates” actually go on to have successful careers.

If you remember, one former participant of a similar program once (allegedly but eloquently) wrote to his former colleagues “I’m pretty sure it would have been easier to escape from Auschwitz than a YMP contract. I knew from the second week I start here that this wasn’t going to work out.” Ernst & Young’s Your Master Plan nurtured one hell of a profanity-laced, poetic farewell email, a true testament to its power. One requirement for the program was advanced written and verbal communication skills… it’s a wonder Uncle Ernie didn’t call Craig immediately and ask him to come back with a fat raise.

Anyway, the head of audit at KPMG told the Telegraph “At a time when many young people, graduates included, are finding it difficult to gain employment, this programme represents a credible alternative to mainstream university education and provides an attractive route into employment for talented students.”

I highly – and I mean highly – recommended checking out the comments on the Telegraph article, as it finally identifies the link between public accounting and anal rape that we have been trying to pinpoint for years. It’s the one that starts off with “If you work at a large accounting firm, beware, it is perfectly acceptable for the large accounting firm to tell massive lies about you such that you will be butt raped repeatedly…” You can’t miss it.

Someone Is Curious About All Those KPMG Employees Working on General Electric’s Taxes

You may remember earlier this year when The New York Times broke a little story about General Electric’s tax savvy ways and the best tax law firm the universe had ever seen (aka the GE tax department).

The report�������������������� href=”http://www.goingconcern.com/2011/03/jon-stewart-reacts-to-ges-tax-savviness/”>a few people to get bent out of shape because the Times said GE was enjoying $14.2 billion in profit while “claim[ing] a tax benefit of $3.2 billion.” What that “benefit” really entailed was a mystery but many people jumped to the conclusion that it was a “refund” and ProPublica (possibly a little peeved that they got scooped) tried to set the record straight on the Times story.

Despite all the back and forth, everyone was pissed at GE. The company lost a Twitter joust with Henry Blodget and then a bogus press release went out claiming the company was returning the “refund” of $3.2 billion and the Associated Press ran it. Slightly awkward.

Francine McKenna also did a write-up on KPMG’s role in this little soap opera, as the firm has been the auditor for GE since Bill Taft was maxing out the White House bathtub.

The latest twist comes from a tip we received earlier about a “Preservation Notice” sent to all KPMG employees yesterday from the firm’s Office of General Counsel (“OGC”).

URGENT TARGETED PRESERVATION NOTICE: GENERAL ELECTRIC’S LOAN STAFF ARRANGEMENTS
Please be advised that until further notice from KPMG LLP’s (KPMG or firm) Office of General Counsel (OGC), you are hereby directed to take all steps necessary to preserve and protect any and all documents created or received from January 1, 2008 through the date of this Notice relating or referring to the loaning, assignment or secondment of tax or other professionals to General Electric Company and its direct and indirect subsidiaries, affiliates and divisions (collectively “General Electric’s Loan Staff Arrangements”).

As Klynvedlians know, these preservation notices come out so often that you barely even notice them. When you do notice them is when the partner in charge of your team informs you about it before it hits your inbox. What follows is basically the biggest CYA exercise you’ve ever seen. They roll in giant dumpsters and every last scrap of paper you’ve ever written on gets throw in and eventually it gets shipped off to OGC. Your life doesn’t really change all that much other than you’re not allowed to delete another email EVER. At least that’s how I remember it.

ANYWAY, this notice seems a little different. Why exactly? Here’s a excerpt from McKenna’s post:

In defiance of [Sarbanes-Oxley] provisions, KPMG – GE’s auditor – provides “loaned staff” or staff augmentation to GE’s tax department each year. These “temps” perform tasks that would be otherwise the responsibility of GE staff. Sources tell me KPMG employees working in GE tax have GE email addresses, are supervised by GE managers – there is no KPMG manager or partner on premises – and have access to GE employee facilities. They use GE computers because the software required for their tasks is GE proprietary software.

This type of “secondment” to an audit client is never allowed. KPMG should know better.

YEESH. So any documents going back to January of 2008 that relate or refer to someone being assigned under this allegedly dubious arrangement must be preserved. You don’t have to be John Veihmeyer to know that’s a METRIC ASSTON of documentation. It’s not that GE’s tax needs are seasonal; they’re more like “perpetual” or “infinity times infinity.” A company with the best tax law firm already in house that also has an arrangement with a their auditor to throw a few more people at the problem indicates that they are working on this shit 24/7. For KPMG, it amounts to a nice little revenue stream and it keeps lots tax staff busy throughout the year.

But what caused the notice? That’s the question. Our tipster speculated that the PCAOB and SEC might be up to something but per standard operating procedure, neither will confirm nor deny the existence of any investigation or inquiry. KPMG spokesman George Ledwith did not respond to an email seeking comment.

Like we stated previously, these preservation notices are a dime a dozen but because this one deals with General Electric and presumably their tax compliance it qualifies as outside the norm. If you’re in the know or know of someone in the know or have anything else to add, email us or comment below.

PwC, Deloitte Enjoying Their Booming Advisory Businesses, Thankyouverymuch

This morning we linked to a Reuters report about the horse race between Deloitte and PwC for the biggest of the Big 4. It reports virtually nothing new that we haven’t discussed here already including Deloitte jumping P. Dubs last year by a whopping $9 million (thanks mostly to keeping their consulting business in house), the hiring sprees, the acquisitions, and oh! the audit business sucks:

With audit revenues leveling off in developed markets, the firms have been making a push in growing countries such as China and India and plowing ahead with investments in consulting, where business is growing after a recessionary slump.[…] The big four are expected to report their fiscal 2011 revenues in coming weeks and any significant growth will likely once again be in the consulting area, said Jonathan Hamilton, managing editor of Accounting News Report. “The audit business, while certainly the staple of all these firms, is a slow-growth business,” Hamilton added.

In other words, the consulting advisory business is hot and audit is not. And what causes some people to fly off the handle is how the firms have sold everyone on the idea that they can still miraculously be the bastion of good business principles ethics. Well, maybe not everyone:

More worries loom from stepped-up regulatory scrutiny. As consulting revenues grow, complaints are surfacing again that firms will be tempted to go easy on audit clients for the sake of winning or keeping a consulting job — a charge the audit firms deny.

Last week, European Union lawmakers approved a report that calls for barring auditors from providing audit and non-audit services to the same client. The report is nonbinding but could shape a draft law in the works.

PwC and Deloitte both said there was no conflict of interest in the consulting services they provide. Much of their consulting is done for companies they do not audit and they follow regulators’ standards and companies’ own restrictions on the kind of consulting they do for audit clients.

The report doesn’t mention many things that have cropped up (some recent, some not so much) including the nearly 500 reprimands Deloitte had in 2009, the rash of insider trading, or PwC’s incestuous Satyam scandal but talking points are also used to address those issues. These firms didn’t get to where they are without figuring out how to play the media game.

One thing is for sure – the firms are going to depend on their consulting/advisory businesses for growth until someone banishes audit firms from offering any other services at all. And God knows what that will take.

In close race for No 1, Deloitte, PwC grow apace [Reuters]

New KPMG Associate Wants to Know What the “Deal” Is with Working Mothers

Yesterday we discussed the plethora of accounting firms that are pro-mom, according to Working Mothers. It seemed like a pretty simple idea – treat moms good = win; treat moms bad = Christ, what kind of hellhole firm are you running? Despite this elementary idea, there still is some questions out there:

GC,

On the subject of working mothers…what’s the deal with that? I’m a first year at KPMG and there is another first year who is already pregnant and taking maternity leave soon.

My question is, does she really get promoted on the same schedule as the rest of us? I get the importance of allowing some flexibility for working moms but does it make any sense to treat someone the same as the rest of us when it comes to raises and promotions when they’ve missed out on all the work? I’d love to hear what other readers have experience with this.

Thanks,

KPMG First Year

Well, the “deal” with working mothers is that not having policies that allow them to pursue a career and having a family is what I like to call “doing shitty business.” As to your specific question, the details aren’t clear. It’s not as if she will be on maternity leave for 6 months. KPMG offers up to 9 weeks of paid maternity leave, according to the firm’s profile on WM. That means that there are 43 other weeks (that assumes no PTO, obv) that she will be working. That doesn’t really qualify as “miss[ing] out on all the work” as you put it.

Those who are evaluating her performance should have a pretty good idea whether or not she’s capable of being promoted. Besides, it’s a jump from A1 to A2, not exactly a huge change in responsibilities or expectations. Furthermore, your raise from A1 to A2 isn’t going to be anything to write home about so getting worked up about whether or not she’s getting the same 11% bump as you isn’t worth it.

Are the Big 4 Starting to Demand Higher GPAs From New Recruits?

Ed. note: Got a question for the career advice brain trust? Email us at advice@goingconcern.com.

Hi GC,

I am a longtime reader of this website and it has never failed me so here I go once more – some Big Four positions just got posted to our school’s résumé submission website here at University of Illinois at Urbana Champaign. PwC internship and full time positions have a minimum required GPA of 3.4 while EY is 3.2 and KPMG is 3.0. Deloitte’s have not been posted. I know our school isn’t the greatest in accounting [Ed. note: huh?]and the public accounting profession pales in comparison to investment banking and management consulting but a 3.4 MINIMUM GPA to apply??

Last year’s minimum GPA was 3.0 to apply which was understandable but this new recruiting team from PwC increased the GPA by 0.4. Do they feel like someone is throwing out GPA points like Bernanke is throwing out dollars? Would it be kosher to change my 3.37 GPA to 3.4/4.0 on my resume to qualify for on campus interviews?

Best,
Drinking Beer in Champaign

Dear DBinC,

I’m always glad to throw a loyal reader some freebie advice. Thanks for checkin’ in with us.

First of all, forget that last year’s GPA requirement was 0.4 points lower; last year is irrelevant. Put your game face on and rise to the challenge.

Yes, absolutely round your 3.37 up to a 3.4. That’s fair game. In fact, this is a non-issue.

Also, take two minutes of your time to figure out what your major-specific GPA is. Should that be higher than the 3.4 cumulative GPA, add it to your résumé as well. There’s no reason that Intro to Woodcarving should hurt your chances of interning with one of the Big 4.

Why are the GPA requirements rising? To weed out résumés, obviously. Why look through 500 when you can whittle things down to 400 by cutting out the bottom? If you fall into this range, beg, borrow, and NETWORK your way to an interview. Circumstances are individual – if you have a story or reason as to why you’re on the cusp, track down the recruiter (not a audit/tax professional) at the career fair and state your case. Hard work can be rewarded in cases like this.