Category: Big 4

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

You Certainly Can’t Complain About a Lack of Accounting Firms Purporting Mom Friendliness

Do you work? Are you a mom? Do you wanna be one? No? Then continue shotgunning 5-hour bombs.

For those of you thinking about juggling tikes and 10-keys, Working Mother hay it’s exactly 100) companies that they think you’re looking for. Hey! and there are even some accounting firms in there, so if you think your current employer will keep you crunching numbersup until your water breaks, you may consider some of these firms.


BDO – “To encourage its employees to use flexible schedules, this accounting and consulting firm has formalized the request process, made sure nearly everyone has laptops that enable remote work and instituted flex training for all.”

Deloitte – “As they pursue their career goals, moms telecommute, ramp up or reduce their workloads, take paid sabbaticals and even go on five-year breaks, all the while maintaining connections to office mentors and freelance work.”

Ernst & Young – “If you’re surrounded by talented people, it makes sense to seek their advice on work life matters, which is what the female employees of this professional services firm often do.”

Grant Thornton – “[Women] earned 32% of all promotions to partner in 2010 (their biggest victory ever) and now fill nearly triple the number of slots they did seven years ago. In the hopes that they will occupy 20% of the partnership by 2015.”

KPMG – “While women earned half of all promotions to manager, senior manager and executive last year, the growth of virtual meetings means they don’t have to stay in the office to be considered top performers.”

McGladrey – “Most every working mom has a vision for her own future—maybe she’d like to get a better degree, rocket up the career ladder, have more kids or just get a little free time. Goals like these are often achieved by women at the accounting, tax and business consulting firm.”

Moss Adams – “Moms-to-be can earn up to $250 through the Beginning Right Maternity Program, which evaluates their health needs, supplies a nurse to counsel them through high-risk pregnancies, and helps them get ready for delivery. When primary caregivers give birth, they may take ten fully paid weeks off; those who adopt earn four fully paid weeks of leave, plus $6,000 in aid.”

PwC – “Working a reduced schedule won’t hurt your career at this audit, tax and advisory services firm: Moms who put in just 20 hours per week still earn full benefits and remain under consideration for top jobs.”

All of the Big 4 snuck into the WM100 top ten which shocks absolutely no one except for maybe Donna Kassman. If BDO, GT, MA, and Mickey G’s get their act together maybe accounting firms will get their very own special Mom list. God, that sounds awful actually.

2011 Working Mother 100 Best Companies [Working Mother]

Comp Watch ’11: PwC Partners Making Deloitte Counterparts Look Like Peasants

The FT reports that the average partner in the UK took home £763,000, up 1% from last year. Ian Powell, the Chairman of the UK firm, took home £3.7 million. The average take home at P. Dubs puts Deloitte partners to shame who only managed to scrape together an average of £758,000, down from £873,000. What does the mean for the partners in the States? Probably nothing but it could indicate that Deloitte’s reign as the biggest of the Big 4 could be a one year wonder. [FT]

Comp Watch ’11: Performance Ranking Distribution and More Bonus Details for PwC

Earlier this month, PwC announced that they were throwing new labels on their performance review buckets for FY ’12. Those of you that can walk on water will be called “Top Performers,” better-than-average mortals will be “Outstanding Performer,” the meaty part of the curve is “High Performer,” rubes will land in “Needs Improvement” while the you Sling Blade mofos will be “Unsatisfactory.” While your mothers and I both believe that you’re all worthy of “Top Performer” status, P. Dubs doesn’t share our viewpoint. This morning, Assurance Leader Tim Ryan sent an email to all opiners regarding the distribution of the “Relative Perhe email was sent to us by a tipster and it includes this table:


As you can see, more than half of the new associates will be coddled with a “High Performer” ranking their first year in order to keep them on the hook. In year 2, we see a 20% drop distributed over “Top Performer” and “Outstanding Performer.” The table shows that, over time, if you aren’t consistently falling into the TP or OP categories, you won’t be wearing autumnal hues for long. This seems fair, although we all know that understanding how performance evaluations are determined is like trying to understand why Michelle Bachmann attempted to speak Yiddish.

The email also goes on to describe the three bonuses that will be available to assurance professionals: Credential (that’s your CPA), Contribution, and Annual Performance. Here are the details of each:

Credential Bonus
Associates are eligible to receive a Credential Bonus if they pass their primary credential exam, consistent with prior years.

Contribution Award
To provide a consistent approach to timely recognition of exceptional contributions, associates and senior associates are eligible to receive a semi-annual Contribution Award, in December and the spring. This award will recognize contributions that exceed the expectations at each level (e.g., unique client contributions to the team, extraordinary effort, enhanced quality, significant assistance to another practice). Individual awards will be determined through a formalized and consistent semi-annual process. This award is not contingent upon RPR or credential status.

Annual Performance Bonus
• Senior associates through directors/senior managers will be eligible to participate in the Annual Performance Bonus. The allocation of these bonus awards will be based on staff level and relative performance rating.

• The total Annual Performance Bonus pool is based on achieving our quality and financial performance goals. Successful achievement of our goals will result in award ranges as noted in the chart. These ranges will increase if we exceed our goals (as was the case in FY11 when we increased the overall performance pool by 10%) and decrease if we do not achieve our goals.

• An individual’s bonus within the target award range will depend on the total bonus dollars allocated to her/his market or business unit based on quality and financial performance, as well as the individual’s contributions in relation to peers within their performance category.

• It is expected that all staff at the senior associate level and above rated High Performer or above will participate in the Annual Performance Bonus. Please note, staff who have not worked the full year may receive a prorated bonus award based on the bonus ranges.

And the representative tables:

Just a few thoughts:

1. Don’t fuck around when it comes to the CPA Exam.

2. Even though Contribution Awards “will be determined through a formalized and consistent semi-annual process,” I can’t help but interpret this as “a political and opaque determination that we’ll throw together at the last minute.”

3. You’re probably wondering about “quality and financial performance goals” mentioned with the APB. Here’s the scoop on those:

Quality performance goals
• Inspections: Reduce the number and severity of non-compliant audits identified through inspections
• Training: Complete participation in all required training, including passing applicable assessments
• Planning: Improve the timing of planning and phasing of our audit work, including the appropriate use and leverage of our delivery model.

Financial performance goals
• Revenue: Achieve our annual revenue budget, which includes a 4.9% revenue growth target
• Contribution Margin: Achieve our contribution margin budget
• Cash Collections: Achieve our monthly cash collection plan

Achieving our quality and financial performance goals will require both an individual and team effort. Reaching our quality goals will require staff to continue to focus on our compliance with auditing standards, concentration on continuous improvement and enhanced management of all engagements. Meeting our financial performance goals will be dependent upon each staff charging all their time and billing timely for all client services.

Assurance quality and financial performance results will be shared with you on a quarterly basis.

So while the increased transparency is nice, the quality and financial performance will be one of those things where you’ll be told the numbers; you’ll hear the story behind the numbers; the end. You could audit your ass off, ace every diversity, independence, and ethics training but if business is down or flat (looking probable) you’ll simply have to accept it.

Anyway P. Dubbersteins, try to digest this and discuss your ecstasy over the latest details.

KPMG Remembers 9/11

Yesterday was the tenth anniversary of 9/11 and memorials were held all over the country. Thousands of KPMG employees volunteered at over 200 non-profits to mark that tragic day including over 100 at PS 161 in New York and 70 at the wreath-laying ceremony at the Pentagon in Washington, D.C. Nothing more really needs to be said other than kudos to KPMG for their “Service of Remembrance.” Drop your own remembrances in the comments and if your firm marked the 10th anniversary in some way (aside from t-minus 4 days until the corporate tax filing deadline), let us know below or email us. [KPMG]

SEC Not Amused By Deloitte’s Failure to Produce Documents Related to Company That Held Their Audit Workpapers Hostage

Remember Longtop Financial Technologies? Deloitte resigned as auditors of the Chinese company back in May after LFT took some actions that were, shall we say, unusual for an audit client. Among them, “interference by certain members of Longtop management in DTT’s audit process; and […] the unlawful detention of DTT’s audit files.” And there may be some financial statement fraud going on, to boot. What’s even slightly weirder is Deloitte’s resignt to Longtop’s Audit Committee that laid out the specifics:

[A]s a result of intervention by the Company’s officials including the Chief Operating Officer, the confirmation process was stopped amid serious and troubling new developments including: calls to banks by the Company asserting that Deloitte was not their auditor; seizure by the Company’s staff of second round bank confirmation documentation on bank premises; threats to stop our staff leaving the Company premises unless they allowed the Company to retain our audit files then on the premises; and then seizure by the Company of certain of our working papers.

Right. The auditors-almost-taken-hostage situation. Quite a doozy, this one. Based on the history between Deloitte and Longtop, one would think that Green Dot would jump at any chance to exact a little revenge on these shady bastards. NOPE!


From the crack squad at the SEC:

The Securities and Exchange Commission today filed a subpoena enforcement action against Deloitte Touche Tohmatsu CPA Ltd. for failing to produce documents related to the SEC’s investigation into possible fraud by the Shanghai-based public accounting firm’s longtime client Longtop Financial Technologies Limited.

According to the SEC’s application and supporting papers filed in U.S. District Court for the District of Columbia, the SEC issued a subpoena on May 27, 2011, and D&T Shanghai was required to produce documents by July 8, 2011. Although D&T Shanghai is in possession of vast amounts of documents responsive to the subpoena, it has not produced any documents to the SEC to date. As a result, the Commission is unable to gain access to information that is critical to an investigation that has been authorized for the protection of public investors.

“Compliance with an SEC subpoena is not an option, it is a legal obligation,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “The ability of the SEC to conduct swift and thorough investigations requires that subpoena recipients promptly comply with that legal obligation. Subpoena recipients who refuse to comply should expect serious legal consequences.”

Maybe the email/hand-written letter sent by carrier pigeon (whatever method of communication the Commission is using these days) got lost OR maybe no one at Deloitte Shanghai was in the translating mood that day but it seems slightly strange that Deloitte would just blow this off especially since Longtop screwed them 70 ways to Sunday. Of course these documents could show that Deloitte was really a bunch of pansies and we’re letting LFT run the show until the gross negligence got to the point that they simply couldn’t ignore it anymore. It’s anybody’s guess, really.

UPDATE: The Journal reports that Deloitte claims to be “caught in the middle of conflicting demands by two government regulators,” which could be seen as extremely convenient.

SEC Files Subpoena Enforcement Action Against Deloitte & Touche in Shanghai [SEC]
Court Filing [SEC]
Also see: S.E.C. Asks Court to Force a Release of Papers From China [NYT]

KPMG Can’t Get Rid of the Countrywide Rash

As you probably remember, Countrywide Financial once owned a lot of shitty mortgages. This wasn’t clear to many of the company’s investors so when the things turned sour, lots of those investors lost boatloads of money and then Bank of America came in to pick up the scraps. KPMG was the auditor of Countrywide and the shareholders sued both companies because, gosh, that’s basically what happens when a bunch of money is lost for no good reason and you had a front row seat for the action. Accordingly, the two firms settled with CTW shareholders last year for $624 million. KPMG, for its part, chipped in $24 million. That’s rumored to be in the ballpark of what John Veihmeyer spends every year on Notre Dame gear, so the firm was probably thinking it got off pretty easy. Unfortunately, things are just getting started since other countries hadn’t had a chance to jump into the mix.


From Zero Hedge:

Norway’s Government Pension Fund, which is another name for its Sovereign Wealth Fund, has just announced it is suing Bank of America for mortgage fraud. Not only that but it is also going after Countrywide, obviously, but far more importantly, is also suing KPGM [sic], the auditor on the Countrywide transaction, and, drumroll, ole’ Agent Orange himself [That’s former Countrywide CEO Angelo Mozilo for those of you not up to speed].

So what, you say? Norway is just some Scandinavian wasteland with a lot of blondes and the occasional psychopath? Not the point!

[J]ust like the US lawsuit spigot opened ever so slowly at first, it is now gushing, and is absolutely certain that every company (ahem insolvent German banks) that ever bought a mortgage from Countrywide, Merrill and Bank of America will serve the local branch of the bank with a summons over the next month.

In other words, this little breakout may turn into a full-fledged epidemic.

Bank Of America’s Legal Woes Go Global After Norway’s Sovereign Wealth Fund Sues For Mortgage Fraud [ZH]
Also see:
The Fund suing large bank in the U.S. for fraud [DN.NO (Beware, the translation is brutal)]

Confirmed: New PwC Senior Associates Can Look Forward to Fireside Chats with Partners and a Pacific Ocean Backdrop

Last month we reported some details about the Milestone Award for PwC’s new class of Senior Associates. At the time we weren’t able to definitively confirm the details but we’re happy to report now that yes, your four day adventure will be happening at Terranea Resort and YES, there will be fireside chats and other social activities to keep you occupied.

“Fitness activities” may not appeal to everyone but with any luck the “signature adventure” won’t involve any physical exertion. ANYWAY, enjoy your getaway, new PwC SAs! Be sure to take lots of pictures and share them with us.

Big 4 Hiring Watch: PwC Going on the Offensive in China

You may remember that the Big 4 have BIG plans to go on a hiring binge here in the States and around the globe over the next few years. Just last year, Deloitte announced that they were adding 250,000 new employees over the next five years (although we were a bit skeptical as to what the final numbers would actually shake out). The latest in job creation PR, comes from PwC who has announced that they will be adding 15,000 new professionals in Hong Kong and China:

Accounting firm PricewaterhouseCoopers plans to hire 15,000 graduates and experienced professionals over the next five years in China and Hong Kong, it said Tuesday, as it capitalizes on growing business opportunities in the region, particularly mainland China.

The Big-Four firm said the new hires will be “across all lines of service,” adding it hopes to recruit more than 2,000 university graduates in the coming months in Hong Kong and China. The company is conducting campus recruitment in Hong Kong and three mainland Chinese cities this month.

Adding to this glowing news was Fitch Rating’s vote of confidence in the Big 4 who “should inspire confidence in terms of corporate governance” in Chinese companies. Right. Because it’s been clockwork so far.

PricewaterhouseCoopers: To Hire 15,000 In HK, Mainland Over Next 5 Years [Dow Jones]

Ernst & Young Aware of This Sino-Forest Situation, Seems Content to Watch It Play Out

Jonathan Weil has a column today on the train wreck that is Sino-Forest, the Chinese-Canadian timber company. In case you need caught up, there have been some questions about the company’s ability to report accurate disclosures and accounting. This led the research firm Muddy Waters to issue a not-so-flattering analysis of the company. Things like “Ponzi scheme” and “investing for the 23rd Century” don’t exactly get people jumping up and down for your company. Ask John Paulson.

Of course Sino-Forest didn’t do this all by themselves. They had credit rating agencies and auditors telling them everything was hunky dory for years and that’s Weil’s point. He reports that Fitch pulled its rating on S-F back in July and S&P finally pulled their rating this week. That just leaves Moody’s but guess who else is still hanging in there? Ernst & Young, baby! They’re still standing behind their audit opinions and showing no sign of budging. And JW is really curious to know who’s going to jump out of this tree first.

One question lingers: Which of the company’s paid opinion merchants will be the last to step aside? Will it be a credit rater? Or will it be the company’s auditor, Ernst & Young LLP in Toronto, which has yet to rescind any of its reports on Sino-Forest’s finances?

So far Ernst looks like the favorite, with only one rating company left in the hunt. Think of it as a contest between giant tortoises to see which one is slower. This time-honored ritual — of market gatekeepers waiting to blow the whistle until long after a scam has been exposed — has become so familiar, we might as well revel in the spectacle.

So these “gatekeepers” Weil speaks of – obviously this includes the Big 4. And it’s true that we’re all used to them waving their arms, screaming “DANGER!” in front of the burning heap that everyone has been aware of for ages (I didn’t say Lehman Brothers. Did you say Lehman Brothers? Who said Lehman Brothers?).

ANYWAY, E&Y should know that they have choices:

Ernst does have options, aside from bracing for the inevitable years of litigation and investigations. It could resign, explain why it is doing so and face criticism for acting too late. It could withdraw its previous audit opinions. It could insist to Sino-Forest’s directors that it be permitted to answer questions from the public about the work it has performed, as a condition of remaining onboard. Or it could hang on in silence, as it’s doing now, and watch its reputation endure more damage.

Could be that this is just another part of E&Y’s strategy. Sit tight while things play out, wait until things get really serious (i.e. bankruptcy, severe economic turmoil, civil charges, etc. etc.) and then come out swinging.

Tree Falls on Sino-Forest, Auditor Can’t Hear It [Bloomberg]

PwC Announces New Categories for Distinguished, Typical, Downright Piss Poor Performance

As you may have noticed, PwC has really gone on the offensive when it comes to making changes to their compensation structure. We broke all the details for you earlier this year and one reader even shared a little spreadsheet analysis for anyone who’s into that sort of thing. More recently, we reported the (unconfirmed) details of the new Senior Associate Milestone Award which includes a getaway to the Terreana Resof is swell but there are few new details that we were recently made aware of that we’ll share with you today. First off, performance categories have changed. A tipster passed along the new buckets that you’ll be fighting to get into in FY12 and who will and will not be eligible for bonus comp:

– New performance categories are “top performer,” “outstanding performer,” “high performer,” “needs improvement,” and “unsatisfactory”

– Bonus eligble for high performer or greater. Bonus levels set by Line of Service. Line of Service will provide specific details about the business performance measures, as well as target bonus ranges for staff level and ratings.

So TP/OP/HP is what you’re all shooting for if bonuses are of interest to you. Conventional wisdom would indicate that most of you will probably fall into the unexceptional “high performer” bucket and that still gets you in the money so it’s really just the rubes that are “Needs Improvement” and “Unsatisfactory” that will be bitching about how cruel and unfair life is.

It wasn’t all business, however, Bob Moritz shared his gratitude for all your ass-busting in the past year, the ass-busting going on as we speak and the ass-busting to come:

Your role in our success
Thanks to all your efforts to deliver quality, value and the PwC Experience to our clients and stakeholders, we had a very strong FY11 and we’re off to a very positive FY12. On behalf of all the partners, I want to thank you for your role in our firm’s success.

I recorded a short video to express my appreciation and talk about the continued investments we are making in you and your career success. We began making changes back in May, including introducing new career milestone awards and increasing transparency around compensation, all designed to demonstrate the value of your career at PwC — both financially and developmentally.

Now we are bringing even more clarity to the compensation conversation with enhancements to the Annual Performance Bonus Plan. These include greater predictability in your year-end bonus opportunity and quarterly updates about how your line of service is performing against its annual business targets. Watch my video and visit the Rewards and Recognition microsite to learn more. You will hear more specifics from your line of service in the coming weeks.

These changes are all based on what you’ve said is important to you. And we will continue to listen. Keep in mind, however, that the full value of your PwC career comes directly from what you put into it. The more you take ownership of your career….solicit feedback to improve your performance….utilize your success plan to take advantage of the many opportunities here to enhance your skills and develop your talents, the greater your ability to achieve your goals and grow your career with PwC.

Ultimately, the better you are, the better we do, and the greater our ability to continue to invest in you. Thanks again for your role in our success!

So, P. Dubbersteins – do you feel that there’s “more clarity to the compensation conversation”? It’s definitely clear that most people will still get bonuses, so that’s a good thing but it remains to be seen what actually comes out of all these changes. Discuss.