Category: Big 4

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

How Should a Big 4 Auditor Handle a Manager Blocking a Transfer to Transaction Services?

Welcome to the at-least-you’re-not-John-Edwards edition of Accounting Career Emergencies. In today’s edition, a first-year auditor has an opportunity to do a rotation with Transaction Services but feels that his senior manager has taken an aggressive cock-block position. Will our hero have to get their performance manager involved or resort to thinly-veiled threats?

Looking for new endeavors? Are the men in your office giving you a hard time? Is your job making you ill? Email us at advice@goingconcern.com and we’ll give you a remedy for your troubles.

Meanwhile:

Caleb,

I am a long time GC reader, and I usually only read the career advice postings to feel slightly better about my own situation. Now, however, I find myself with a question that I would love to put before the GC readership. I am a first year at a B4. I enjoy my job, but am always interested in a new opportunity. Recently, I was offered a rotation in transaction services that will last a few months. I accepted the opportunity, but the timing of the rotation was not set in stone. I just found out that a sr. mgr. on my biggest client is trying to keep me staffed on that engagement at the expense of the opportunity of taking the rotation.

I have made my interest in taking a TS rotation since day one, and my performance manager supports it 100%. He knows that I was offered the rotation, but not that the sr mgr is standing in the way. I would like to know how to proceed. Should I go over the sr mgr? Should I forget the rotation? I enjoy my audit clients and don’t want to be seen as someone who will leave as soon as a better opportunity comes along, but this is a particular interest of mine that I made know upfront.

Please help!

Dear Cock-blocked Auditor,

Sounds like your senior manager has a non-sexual, professional crush on you. That can be a good thing but in your case, it’s a very bad thing. Your senior manager probably wants the best team possible and it sounds like that would involve you but you’ve got your own ambitions and those need to be respected. This especially true because TS has already offer has been extended to you. It’s not for someone else (senior manager or not) to stick their beak in your business and prevent you from following the career path you choose.

Having said all that, I suggest that you first talk to the senior manager on your audit engagement. You say that they are blocking the rotation but how do you know? Nothing in your email indicates that (s)he walked straight up to you, pointed a finger in your chest and said, “You’re mine, bitch!” It’s entirely possible that the SM kept you on to prevent you from getting picked up by anyone else. This will allow you to get the story straight before running off to your performance manager. If your suspicions are true (or you did experience a finger pointing incident), then it’s time to get your PM involved. If he is “100%” behind this opportunity like you say, then this should get resolved rather quickly. Transaction Services obviously wants you to work with them and it’s something you’re interested in doing. That isn’t complicated but these things do take time and that may be the hold-up.

So be patient but be direct. Until your rotation’s timing is finalized, there’s no need to get anxious but confirm the motivation behind the scheduling before you have to pull out the big guns. Good luck.

Big 4 Summer Intern Open Thread

Let me just say first off that this will not be an exclusive thread to the Big 4, I simply have to appease my SEO fanatic co-workers. That means if you’re interning at Grant Thornton, BDO, McGladrey, Moss Adams, Rothstein Kass, it doesn’t matter, don’t be afraid to jump in with questions or comments or respond to any of the regular commenters out there (“GT Partner” is a treat).

Anyway, it’s not technically summer but DWB encouraged me to drop an open thread on you all so that A) interns can share their skyrocketing anxiety and B) the veterans can bestow some of their wisdom upon these coffee gophers so that they don’t get in the way too much. Since I saw my fair share of interns pass through my time inside the House of Klynveld, I’ll jump in first.

For starters new interns, you need dress nice. If you show up in baggy Dockers without a belt and a Nike golf shirt and scuffed-up shoes – I hate you already. And unless you can do back flips (as it relates to your work) and buy me coffee once a week, my mind is made up about you already. For the ladies, since the dress code is a little more subjective for you, all I ask is you not show up in your pajamas. That said, your female superiors will be eyeing your attire much closer and they will be judging the shit out of you. And if they’re really offended by your fashion forwardness, they aren’t above tattling on you. Believe me, I’ve seen it happen.

As for work – find it. Sometimes you may have to act busy by reading god-awful training manuals or diversity literature or something else that makes you want to bathe with a toaster but FOR THE SAKE OF YOUR MEDIOCRE BIG 4 CAREER, I suggest you don’t look bored. I don’t care if you have to grovel to the lowliest A1 on your team, if you’re not working (or at least appear to be working), someone will notice and that doesn’t bode well for your chances at fulltime offer.

Finally, make some friends. Can you carry on a conversation that doesn’t revolve around your Beta Alpha Psi chapter or the bitch of an Intermediate mid-term you had? Excellent, you’ll be fine. Someone will like you. If you like talking about those things, I strongly suggest you find a hobby fast. The Mets are driving you crazy? Great, talk about that. You just saw the Arctic Monkeys in concert? Wonderful, music is rad. Outdoorsy type? Talk about some camping trips. You’re into Brazilian Jujitsu? Okay but don’t show off your injuries. That’s just gross.

Bottom line: be yourself. Unless yourself sucks. In which case, email the career advice brain trust and we’ll turn this around. Now if you’ll excuse me, some of us don’t have interns and I have to fetch my own coffee.

Deloitte Partners Get Some Pointers on What to Say Re: Bonuses, Compensation

As was mentioned on Tuesday, rumors around Deloitte’s compensation are starting to surface. This likely means partners are fielding questions from anxious employees about raise, bonuses and if they’re considering any part PwC’s new compensation structure. Of course, not everyone is comfortable discussing personal financial matters with Gen Y types, so TPTB have floated some talking points to the partners so they might reduce the number of awkward moments.

Question: What can we say to our people about this year’s compensation?

As we are in the process of closing our books for FY11 and completing our financial plan for FY12 over the next several weeks, we have not finalized the overall Deloitte or AERS compensation – both for [bonuses] and FY12 base compensation. Deloitte and all of the major audit, advisory, and consulting firms participate in Mercer and similar compensation surveys and use this information as a key benchmark for determining competitive compensation. We also continue to differentiate performance (and move AERS Advisory to a more incentive based pay mix). We do our best to be above the survey midpoint of the aggregate of our competitors’ with regard to compensation and make adjustments as necessary (as evidenced last year).

We will continue to implement our Rewards and Recognition program which is significant. We are confident that we will be rewarding our professionals in a way that recognizes their contribution and efforts over the past challenging year and the increasing performance expectations we all face looking forward. We also stay very abreast of what our competitors’ actions and claims are and, if appropriate, make adjustments based on factual information.

When speaking with your teams, please consider the following key points:

• We continue to monitor the marketplace and pay at or above market. The compensation scenarios we’re modeling will ensure that we maintain, and likely improve, our position relative to our competitors on a total cash basis this year.

• We are confident our [bonuses] will be at or above last year’s levels, which were the highest in the history of our organization.

• Our merit pool will provide for market based compensation for all of our professionals and appropriate pay differentiation on the basis of individual performance. Our people continue to tell us this is important to them, we owe it to them, and we will deliver on this commitment this year.

• We know that our people have worked extremely hard this year and we will do whatever it takes to ensure that they are rewarded accordingly. We have a number of options on the table but frankly we don’t have the year-end numbers in yet so it’s still too early to make those decisions.

(UPDATE) KPMG Sued for $350 Million in Gender Discrimination Lawsuit

~Update includes KPMG statement.

Former KPMG Senior Manager Donna Kassman is suing the firm in the Southern District of New York. She worked for the firm for seventeen years, resigning in October 2010 after “relentless gender discrimination and harassmentle, and it was clear that the Company had no interest in remedying the situation.”

Plaintiff Kassman alleges that KPMG engages in systemic discrimination against its female Managers, including but not limited to Managers, Senior Managers and Managing Directors. The lawsuit is intended to change KPMG’s discriminatory pay and promotion policies and practices, as well as its systemic failure to properly investigate and resolve complaints of discrimination and harassment. The Plaintiff is filing this action on behalf of a class of thousands of current and former female employees who have worked as Managers at KPMG from 2008 through the date of judgment.

Ms. Kassman and the class are represented by Janette Wipper, Siham Nurhussein, and Deepika Bains of Sanford Wittels & Heisler, LLP and they don’t spare the details:

Despite Plaintiff Kassman’s long tenure and stellar performance, KPMG refused to promote her along the partnership track. Ms. Kassman’s supervisors repeatedly told her throughout 2008 and 2009 that she was next in line for a promotion to Managing Director. Around the time Ms. Kassman was to be promoted, however, two male employees complained that she was “unapproachable” and “too direct,” thinly-veiled gender-based criticisms designed to derail her career advancement. Based on these unfounded, discriminatory comments, KPMG removed Ms. Kassman from the promotion track, subjected her to numerous hostile interrogations, and advised her to meet with a “coach” to work on her supposed issues. Instead of disciplining the two male employees for their campaign of harassment, KPMG rewarded them by putting them up for promotion.

KPMG’s female Managers are not only under-promoted, but underpaid as well. In one particularly egregious act of discrimination, KPMG slashed Ms. Kassman’s base salary by $20,000 while she was on maternity leave because she was paid “too much.” KPMG cited no business justification for slashing her salary. When Ms. Kassman complained about the salary cut, her male supervisor asserted that she did not need the money because she “ha[d] a nice engagement ring.”

“Unfortunately, Ms. Kassman’s story is completely representative of the treatment of women at KPMG,” Siham Nurhussein said. “Ms. Kassman repeatedly complained up the chain of command about the gender discrimination and harassment she was experiencing, and the Company reacted with neither surprise nor concern. Her supervising Partner told her matter-of-factly that her male colleague might have a problem working with women, and the Office of Ethics and Compliance told Ms. Kassman that men had ganged up on women at KPMG before. KPMG not only tolerates gender discrimination, but displays an active interest in perpetuating it.”

In addition to the systematic discrimination faced by female Managers at KPMG, female employees with children also face discrimination based on their status as caregivers and/or being pregnant. After she gave birth to her first child, Ms. Kassman’s career advancement at KPMG came to a screeching halt. Without any warning or provocation, KPMG abruptly cut her salary while she was on maternity leave and placed her on a Performance Improvement Plan upon her return to work. Ms. Kassman felt that she had no choice but to move to a “flexible” schedule, under which she retained all the responsibilities of a full-time employee, but was paid less. KPMG frequently touted Ms. Kassman as a role model for other working mothers, even though one of the Partners acknowledged that women on flexible schedules were “not going to get anywhere [at KPMG].”

An email to a KPMG spokeswoman was not immediately returned.

UPDATE: KPMG spokesman George Ledwith provided us with the following statement, “KPMG is recognized as a leader for its strong commitment to supporting women in the workplace. In fact, among the Big Four accounting firms, KPMG is tied with the highest percentage of women partners. We believe this lawsuit is entirely without merit.”

We’ll keep you updated with any developments.

Will Barry Salzberg Join Twitter?

As we’ve mentioned, it’s the first week of the new (fiscal) year at Deloitte which means people are getting antsy and your new leaders are starting to get acclimated to their new titles, repsonsibilities and whatnot. One of the most important decisions that new global CEO Barry Salzberg will have to make is whether or not he jumps into the Twittersphere. His predecessor, Jim Quigley, has quit Twitter without getting all dramatic about it, saying, “My CEO tenure concludes today. Enjoyed trying Twitter. Thanks for following my updates. Stay connected w/ Deloitte @deloitte. Regards, Jim.”

So now that @DeloitteCEO is no longer in use, it seems to be a shame that the ol’ Salz decided to not to use it as a Twitty pulpit but we realize it’s not for everyone. However, being the charismatic mustachioed man that he is, I think he’d probably be able to get the hang of it pretty quickly. And if he needs some pointers, he can always consult Adrienne’s Twitter case studies.

My only advice is, don’t get too sensitive on us.

PwC’s Assurance Practice in the Middle East Now Opining on Whether Construction Workers Are Being Treated Like Human Beings

It’s a slow day out there*, this first day back from Memorial Weekend so perhaps I’m making a mountain out of a molehill here but it seems that PwC might be stretching the definition of assurance services. Based on various obscure reports, the firm fka PricewaterhouseCoopers has been engaged by Tourism Development ‘&’ Investment Company (“TDIC”) “to monitor its contractors’ and subcontractors’ performance in the area of worker welfare on Saadiyat.”

“Saadiyat” is Saadiyat Island, a “mixed commercial, residential, and leisure project […] expected to be completed in 2020,” according to Wikipedia. This sort of project of course needs manpower, so presumably there will be plethora of construction workers coming from various parts of the world to earn some scratch. Anyhoo, it’s no secret that labor comes cheap in the Middle East and the treatment of workers isn’t the best. In an effort to get those pesky human rights types off their backs, TDIC has called on the most prestigious professional services firm in the world to assure everyone that worker welfare is just fine and dandy and there’s no cause for concern that these workers are living in squalor and being treated like stray dogs:

In stringently monitoring compliance, PwC will report to TDIC on key aspects of worker welfare, including holding of personal documents, illegal recruitment fees, payment of wages, health and safety, and working and living conditions. The results of the audit reports will be released in a comprehensive report to the public on an annual basis. During the reporting cycles, PwC will conduct formal and informal interviews with construction workers in their own language, as well as with the Contractors’ and Sub-Contractors. In gathering facts and reporting their findings, PwC will conduct scheduled and surprise site visits to check contractors’ compliance. They will also be conducting site visits to assess the living and working conditions of the workers.

Considering the fact that Abu Dhabi has an average temperature of 88 degrees Fahrenheit, it’s safe to assume that those “site visits” will be an interesting experience.

PwC to monitor Saadiyat Island contractors’ performance in area of worker welfare [WAM]

*Unless you’re glued to the train wreck in Columbus.

PwC’s Calgary Office Takes a Don’t Hate, Congratulate Stance on Furlough Fridays

More Big 4 news from the True North, as the Calgary office of PwC has been forced – due to ‘unique market conditions’ – to close the office five times over the summer to compete with the oil and gas companies that shut down every Friday.

Calgary Summer Office Closures

As we all know, recruiting and retaining our people is critical if we are to achieve our marketplace and firm goals. Calgary is one of the toughest markets in which to retain our people. The Calgary leadership believes that one of the key reasons is the extent of time off provided by companies in Calgary. Driven by the oil and gas companies, shutting down on Fridays in the summer is a practice followed by many companies in Calgary, including our clients.


For whatever reason, the email reads strangely apologetic, as if the leadership knows how much everyone loves working on Fridays and that they HAD NO CHOICE but to take these measures are absolutely necessary:

We believe that to be an employer of choice in Calgary we must respond to these unique market conditions with the result that, on Monday, May 30, Calgary will announce that the office will be closed on five Fridays over the course of the summer. Given the strategic importance of our Setting the Pace market segment priority, we think we must move in this direction, otherwise we will continue to be at a competitive disadvantage as we seek to grow the practice and attract and retain the people we need to do so. Going forward, we will assess the continuation of this policy in Calgary based on market conditions.

And finally, it was pointed out that everyone is aware that this is grossly unfair but A) it had to be done and B) everyone will be made right one way or another:

We also think it’s important to be transparent with you around this policy so that you understand the rationale. We appreciate that adopting these office shutdown days solely in the Calgary office gives them more benefits than the rest of the firm. Our view however is that we must adopt practices that are competitive and appropriate in each of our local markets and the Calgary market presents a unique situation.

We recognize that everyone is working hard and contributes to the firm’s success. That’s why we encourage everyone to take advantage of the various forms of flexibility available, particularly during our less busy times. These include Flexible Fridays, which will be announced next week for offices outside of Calgary, Flexible Time Away, our new Flexibility code and, of course, your vacation.

Yes, don’t forget that you could use five days of vacation as opposed to being given the non-option to stay home from work. That gets everyone back to Even Steven.

Comp Watch ’11: Happy New Year’s Eve Deloitte!

It’s the final day of fiscal 2011 in GreenDotville and it seems fitting that we have a little comp discussion:

Word is coming out of the senior manager meeting last week that raises and bonuses are going to be “very good” this year. Of course, those are just rumors, and that’s what the firm said in 2009 when comp increases averaged less than 1% across the board. Other than the mid-year salary bump last fall, there have been no raises, bonuses, or any other incentives to keep slaving away since last summer.

As you may know, Deloitte moved to a decentralized audit planning approach this year, causing hundreds (if not thousands) of additional hours to be added to each engagement. With a shortage of seniors and managers as it is, it’s been close to a breaking point for everyone in the audit function. And, of course, it’s an internal mandate, so unlike the glut of work that came as a result of SOX, Uncle-D is unable to recover any of those costs from clients. Senior management is aware of the problem (Steve VanArsdell said it was the worst busy season he’s ever seen in his 36-year career), but as yet no solutions have been offered other than to say that “year 2” of the new approach should be easier.

Interestingly, the Ivory Tower here at D&T has been suspiciously quiet regarding comp and other issues. Consensus among the employees is that they’re panicked and haven’t yet figured out how to dig out of the hole that they dug for themselves over the past few years. They’ve moved up the timetable on the compensation and rating process by a couple of weeks, which means that we’ll be getting our raise and bonus information in early August instead of mid-August this year (to which, most employees have responded with, “BFD”). To most of us working here, it feels like it’s all going to be too little, too late to win back the loyalty of the current workforce here at Uncle D.

But hey, I hear PwC is hiring!

Our tipster sounds pretty glum for a NYE celebration, so if you can cheer him up with contrary rumors, please do so. Of course, you can always corroborate his suspicions if that’s what you’re hearing as well. And don’t forget to drop all your new leaders a good luck email. Everyone deserves a little thumbs-up on the first day in a new job.

Chinese Company Wraps Themselves in the Security Blanket That Is an Unqualified Audit Opinion From PwC

You may have noticed that a number of Chinese companies have had some issues with their accounting. This typically leads to the company’s auditor quitting, the CFO resigning, an SEC filing explaining all of it and then the revelation of some embarrassing details to accompany it all. Like a video of company’s employees sleeping. Or taking audit workpapers hostage. The best part about these stories is that the companies typically go on the defensive, and some make claims about their prestigious auditors just moments before the shit hits the fan.

Today we bring you Li & Fung, Ltd., a supply chain manager out of Hong Kong. L&F has reacted to a recent report from UBS that has…wait…yes, called attention to an accounting change and that “the company’s future GAAP earnings might not fully reflect the profitability of operations and that the new revenue recognition policy may distort a declining margin trend.”

Li & Fung has reacted right on cue:

“These statements are misleading,” Company Secretary Terry Wan said in the statement.

“The company has disclosed the relevant accounting policies in note 1.1 of its 2010 accounts, which have been audited by PricewaterhouseCoopers and are in full compliance with the HKFRS (Hong Kong Financial Reporting Standards),” Wan said.

Li & Fung: UBS Report On Firm’s Accounting Policies Not Factually Accurate [Dow Jones]

Deloitte Announces New Heads of Tax, Consulting

Rounding out the spring of leadership changes for Deloitte are Jim Moffatt who will be the new Chairman and CEO of Deloitte Consulting and Carl Allegretti who will serve in the same roles for Deloitte Tax.

U.S. CEO Elect Joe Echevarria is already finding his stride with the boilerplate praise, saying of Moffatt, “Jim is an excellent choice to build Deloitte Consulting’s market leadership. During his 23 years with Deloitte, Jim has served clients with distinction, and demonstrated his ability to drive the Deloitte Consulting strategy and seize market advantage.”

And he’s equally stoked for Allegretti, “In each of his leadership roles, Carl has made and maintained strong connections with both clients and people. This is a formula for success that has served him well.”

That should do it for announcing new Deloitte overlords since the new fiscal year starts next Wednesday but if someone else gets squeezed in between now and then, we’ll let you know. And since the new fiscal year means compensation speculation, drop us any rumors you’re hearing around merit increases and bonuses.

[via Deloitte and er…Deloitte]

(UPDATE, VIDEO) What Is the ‘Next Level’ Coming to KPMG?

From the mailbag:

Relatively ominous link on our internal homepage saying “get ready” “the next level is coming” as of 6.6.11.


We’ve confirmed this “next level” with several people and also that there is a video that Klynveldians are watching. We’d really like to see some screen shots of this, just to get some context. In the meantime, we encourage you to speculate about this “next level” and why you have to “get ready.” I’ll kick things off:

A) Tim Flynn’s retirement party is going to be epic.

B) Omaha Steaks announces a special “KPMG Package” that will drive the other, non-meaty firms crazy.

C) KPMG seeks revenge on PwC with their own competitive poaching efforts by offering the head of the mailroom at 300 Madison a 10% raise and a Phil Mickelson autographed hat.

D) Your ideas.

UPDATE:
Supposedly, this is the transcript to the video (still no screen shots, it’s called “Print Screen” people!). Our tipster wrote, “Interesting video that gives very little hint to what the ‘Next Level’ is other than lots of talk of a ‘high-performance’ culture. Maybe it has something to do with changing performance review structure a la PwC. The video definitely gives an ominous feeling as if the KPMGers in it are running out of time and people aren’t adapting to the changing market fast enough for their liking. All in all pretty strange vibes.”

Welcome to the Next Level – Video Transcript

[VARIOUS VOICES DELIVERING SHORT PHRASES]:

The market’s changed…

In order to compete in today’s world we have to keep up with change…

It’s a mindset… It’s a way of behaving…

It’s about a continuous journey…

Our ambition is greater than where we are today…

The attitude is contagious…

We’re not satisfied…

It’s really about taking it to that next level.

Keep us updated.

UPDATE 2:
Another tipster hears that it has something to do with the-next-level.com but “[I] don’t really know what they plan to do with it.” Poking around the site, it appears that it would be related to “Developing the Next Wave of Senior Leaders” but I’ve checked out for the week and don’t have the will to dig further right now.

UPDATE 3:
Well, the video finally made it’s way into my inbox and I’ve posted it on the next page for your viewing pleasure (I realize Klynveldians have seen it already).

After watching it a number of times I still can’t make heads or tails about what the “next level” will be but hopefully it’s does just to this movie trailer-esque video.

Deloitte Consolidating Pacific, Central Regions

Deloitte CEO elect Joe Echevarria has informed the partners that a little bit of restructuring will be going down when he takes the big chair next week. The Pacific Southwest and Northern Pacific regions will create a new West region while the Midwest and North Central regions will form a new Central region. The three remaining – Northeast, Mid-America, and Southeast – will remain as is.

Optimizing our regional structure

To: The partners, principals, and directors of Deloitte

When I shared my overall organizational structure with you in February, I noted that I would make the development of the right management model for the regions a priority. Just last week, the Board ratified the decision to move from seven regions to five for FY12 onwards.

We will combine Pacific Southwest with Northern Pacific to create a new West region. By combining Midwest and North Central region we will create a new Central Region. Northeast, Mid-America, and Southeast regions are unchanged.

This decision is the outcome of a comprehensive, strategic review led by Chet Wood, leader of Markets and Offerings. The review was inclusive, with input from many perspectives, including LCSPs, line partners from each FSS, OMPs and RMPs, FSS CEOs and other members of the U.S. Executive. We looked at the regions through the strategic lens of our Lead from the Front framework, to determine how, at this time, we can best align our organization model to the external marketplace.

We carefully considered the different roles regions and offices play for each of our businesses; while many of our non-regulated services are increasingly delivered nationally, regions are critical to the service delivery of our Audit, Tax and DGES practices. Our review also considered factors such as the impact on spans of control, leadership and development opportunities, community-building and sense of partnership, infrastructure costs and speed of implementation. We defined the regional model that will best drive client and business growth, improve our strategic positioning, and strengthen our performance.

The new structure is effective from the start of FY12, although some tactical aspects of implementation may take longer to complete. I have asked Anne Taylor and Gary Tabach to lead the succession process for the West RMP, and Mark Edmunds to lead the process for the Central RMP.

With this improvement comes new opportunity. It’s up to us to realize it and turn our new regional structure to a business advantage. In every region and in every market where we operate, we must continue to widen the gap between us and our competitors, strengthen our position, and ensure that we stay out ahead of change. That is how we will continue to lead from the front.

Joe Echevarria
U.S. Chief Executive Officer Elect
Deloitte LLP

Since we’re not intimately familiar with the hierarchy at Deloitte (e.g. “Regional Partner Leader of M&A Advisory Services” or “Area OMP Chief Leader of Regional Assurance”) these changes will probably mean some jockeying for spots amongst partners effected by the consolidation. And since some regional leaders within the firm (i.e. Talyor, Tabach and Edmunds) will be watching over this process, maybe there will be potential for some interesting developments.