Category: Big 4

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

PwC Lands Another KPMG Partner; Steven Tseng Joining Transfer Pricing Practice

This just in – more competitive poaching from P. Dubs.

PwC US announced today that Steven Tseng has joined PwC US as a partner in the firm’s Transfer Pricing practice. Tseng will relocate to China in June to focus on helping multinational companies with their transfer pricing planning in China and the Asia Pacific region. Tseng will also take the lead role for tax and transfer pricing planning for companies seeking to transform their value chain globally, in particular in Asia.

Tseng joins the firm from KPMG, where he was the Asia Pacific Regional leader for Global Transfer Pricing Services (GTPS) as well as the partner in charge of GTPS in China and Hong Kong. Prior to this role, Tseng was partner in charge of Financial Advisory Services for KPMG in Finland.

This latest pickup follows the firm snagging Tom Henry last month. Rumors have it that there will be more but the question is, who’s next? John Veihmeyer? Keep us updated if you hear anything.

ESPN’s Website Deemed Not Crucial for Ernst & Young’s Non-Monetary NCAA Bracket Competition

Perhaps circumstances have changed but as of yesterday, access to the most popular and comprehensive coverage on the web will not be allowed.


Which is unfortunate since some offices appear to be supportive of some bracketing.

Are you ready for March Madness?

As part of _______________ into spring campaign, it’s time to join the festivities during the 2011 NCAA Basketball Tournament. The “Madness” begins today with a non-monetary NCAA Tournament bracket competition. Everyone in the ___________ office can submit an online Tournament bracket. At the end of the Tournament, the person from each service line who picks the most winning teams will receive _____________________ (and bragging rights!).

You must complete your Tournament bracket before Thursday, March 17 __________________. Expand the section below for instructions on how to submit a bracket under your service line. During the Tournament, which concludes with the championship game on April 4, you can visit your group’s page and see how your bracket is performing compared with your service line colleagues’ brackets. If you have any questions, please contact ____________________________

Not exactly sure how you guys feel about a non-monetary competition but as far as strategy goes, since we’ve already given you access to the best strategy you can find. Of course some people are enjoying this immensely.

Deloitte Resigns as China MediaExpress Auditor; CFO Quits

In the wake of Roddy Boyd’s epic post from March 11th, China MediaExpress announced some bad news today – Deloitte resigned as their auditor effective Friday and as a result the company’s CFO, Jacky Lam, quit yesterday:

China’s largest television advertising operator on inter-city and airport express buses, today announced that the Company’s registered independent accounting firm, Deloitte Touche Tohmatsu (“DTT”) has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.

As you might have already guessed, Deloitte got spooked after all the fraud talk and they also came to the conclusion that management couldn’t be trusted (even if he did say great things about them):

The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT’s letter also stated that these issues may have adverse implications for the prior periods’ financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods’ financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company’s common stock on the NASDAQ Global Market to permit full disclosure of DTT’s resignation to be disseminated to the public.

So the company now needs a new auditor and a new CFO. Of course you’ll have to work around forensic accountants and a bunch of lawyers that will be helping the company through this little hiccough but otherwise, this should be a snap.

Earlier:
Apparently ‘The Purpose of Auditors Is Completely, Entirely, and Wholly’ to Look for Fraud and ‘Deloitte is the best. Period. End of Statement.’

PwC Introduces Cleverly-Named Fortnightly Social Function

I overheard – and by that I mean someone sent us the gchat – the following conversation that occurred earlier today regarding friendly get-togethers that will be going down at 300 Madison starting next Thursday.

[Someone at PwC]: From my good friend [Someone else at PwC]
[Someone at PwC, quoting an email]: Take a break. Unwind. Catch up with your coach or colleagues. Enjoy refreshments. Play a game. Right here in 300 Madison at our new Post work Connections. Designed to show appreciation for everything you do — and to provide a place for you and your colleagues — to meet and get to know people. It’s a place to just have fun! Post work Connections will be open every other Thursday, from 5:00-8:00 p.m., in 300 Madison’s deck/cafeteria, from March 24 – June 16. We look forward to seeing you at our grand opening on March 24. Give it a try. There will be beer, wine, soda, snacks, games — and raffles for prizes! Get caught in the act of having fun at work! Hope to see you there!
[Someone at PwC]: Note that post work connections starts with PwC
[Someone who knows someone at PwC]: Good lord
[Someone who knows someone at PwC]: That’s epic
[Someone who knows someone at PwC]: Is the “post work connections starts with..” comment theirs or yourts
[Someone at PwC]: Mine
[Someone who knows someone at PwC]: Love it.

Personally, I’m mostly curious about the “games” aspect of these events. Are we talking Risk™? Beer pong? Scrabble™? Or we talking an Angry Birds round-robin tournament? Regardless, we’ll be interested to hear how these Thursday ragers will go. Keep us in the loop.

How Bad Are the Odds of Making Partner at a Big 4 Firm?

If you’re a (senior) manager at one of the Final Four horsemen of the accounting firm apocalypse, you may have asked yourself this very question. A reader recently dropped some quantitative analysis on us, writing, “I tried to step past anecdote and see how bad things really were.” This is specifically for the audit practice and is fairly large office, so adjust your expectations accordingly.

Using commonly available data from my firm, I decided to create a quasi-statistical analysis of the likelihood of senior managers making partner in the near future.

There were, as of the date I pulled this data, 843 senior managers in our audit practice. It’s too time consuming to divide these among starting classes, so I’ve made the following simplified assumptions:

Tenure:
9 year – 30% of the population, or 253 senior managers
10 year – 25%, or 211
11 year – 20%, or 169
12 year – 15%, or 126
13 year – 10% or 84

Let’s consider half of year 11 and all of year 12 and 13+ to be “in the pipeline”. That’s 295 senior managers competing for a given number of partner/principal/director (“partner”) spots.

Our tipster used a sample of approximately 200 partners (out of an assumed total of ~1,000) to conclude that approximately 14% of them would retire in the next five years (assuming 30+ years with the firm, mandatory retirement at 62) and assumed a 6% growth rate (which he/she admits, is on the aggressive side).

Here’s an extrapolation of open spots based on turnover and growth:

1,000 partners x 14% turnover = 140 partners turn over due to attrition, or 28 partners per year
1,000 partners x 6% growth = 60 partners per year, ignoring compounding

84 new partners sounds like a lot of partners. That’s because it is. Those in the know put our planned crop of partners at ~50 for 2011. At best, you’re looking at 1 in 4 of those high performing senior managers making partner, based on our assumptions. More realistically, it means that 1 in 6 can make partner.

Maybe you’ll take those odds, maybe you won’t but like we said, if you’re working in an office that is a fraction of the size in our tipster’s pattern, your odds could be worse depending on the situation in your office. Our tipster continues:

These odds are much worse than anyone is willing to admit, and simply making promotion a war of attrition by extending the partner track to 15 years isn’t going to do much to clear up the pipeline, since very few senior managers are going to find an opportunity that presents the chance of making $300k plus within 2 or 3 years. The situation gets even more grim for senior managers in their 9th and 10th year, who have a huge backlog in front of them and a glut of peers who were hired in the SarBox days of senior managers leaving for 30-40% raises and expect the same in their own careers.

Experienced seniors and new managers should very carefully consider the extended consequences of this data, and what it’s going to look like in 7-9 years when they are trying to make partner. The days of 15% growth in our industry are over and aren’t coming back, and the reality is that many Big 4 senior managers simply are not employable in industry at their current salary levels. Think through your career decisions in the coming 18 months very carefully.

As we’ve discussed, the firms know full well that not everyone has the goal of becoming a partner but if you do have partner ambitions, you’re in a pretty select group. The problem is, the odds still seem to be against you. Now with busy season winding down and three of the four firms closing in on fiscal year-ends, this year’s performance (and prospects outside the firm, depending on how promotions fall out) will be weighing heavy on the minds of many.

Will a Couple of Past Arrests Jeopardize Your Big 4 Job Offer?

Welcome to the bracketastic edition of Accounting Career Emergencies. In today’s edition, a future tax associate is losing sleep over his offer with a Big 4 firm that could be at risk because of two past convictions. Will his past indiscretions torpedo his job prospects before things get rolling?

Need some semi-reasonable career advice? Do you avoid confrontation as a general rule? Looking for some ideas on how to carry on an imaginary conversation? Email us at advice@goingconcern.com and we’ll get you prepared for an elevator ride.

Back to our tax troublemaker:

To whom it may (going) concern,

I recently accepted an offer to join the Tax Department at a local Big 4 office. Although quite ecstatic to receive an offer from my top choice, I am worried that a past arrest may jeopardize my prospects with the firm. The case consisted of two convictions, unlawful open container and trespassing. I am in the process of getting the convictions expunged, however, I don’t know if they will be off my record by the time background checks are performed.

What will the firm make of this? They seem pretty minor on the continuum of things to be arrested for, but I didn’t know if any arrest is seen as a warning signal. If it’s something I should worry about, when and who should I contact with this information.

Any help is welcomed, because after pre first-round interview dreams and pre-second round interview dreams, the last thing I want is to have dreams regarding my background check for the next seven months.

Thank you

Dear Open Trespasser,

Lucky for you, I have experience in this regard, as I had my share of minor offenses prior to starting my career. The details of which are inconsequential but let’s just say I had a run of bad luck prior to reaching the age of 21. In your case, I’m pretty confident that you have little to worry with regard to your two convictions, mostly because they are minor, non-violent offenses. If you had taken the open container, cracked it over someone’s skull (the trespassee, let’s say), which then resulted in a circus of a trial that tarnished your entire school’s/fraternity’s/family’s reputation, then you might have a valid concern.

Having said that, it’s not impossible that a firm wouldn’t, all of sudden, decide to make an example out of someone but it seems pretty unlikely. Everybody makes mistakes and if your tax group really was excited about bring ing you on board, a couple of slip-ups like this aren’t going to change their mind about you.

You’re doing the right thing by requesting the convictions to be expunged and I believe they would do so after a number of years, even if you chose not to do so. Good luck with the new gig and try to keep your nose clean. But, breaking the law while an employee of a Big 4 firm is definitely not a great way to keep a job.

PwC Is Giving $5,000 to a College Student Who Makes the Best ‘Elevator Pitch’ Video That Won’t Closely Resemble Any Conversation They’ll Ever Have in an Elevator

For any current PwC employees if you, in the off-chance, happen to run into Bob Moritz in the elevator at 300 Madison, you might say, “Hey, thanks for the iPad,” or “I don’t care what anyone says, I love the colors of the new logo,” or “You look great with your shirt off.”


On the other hand, if you’re a college student and you need a little extra cash, you might be willing to script together a few awkward sentences that you would say to BoMo or Dennis Nally if, in fact they were interested in being accosted by a wide-eyed eager beaver that is rambling on about their leadership roles in Beta Alpha Psi only to be cut off with, “Sounds great but I really got hit the john.”

If that sounds like something you’d be interested in, you’ve got until March 25th to get your entry submitted.

Making an Impression [PwC Careers/Facebook]

Apparently ‘The Purpose of Auditors Is Completely, Entirely, and Wholly’ to Look for Fraud and ‘Deloitte is the best. Period. End of Statement.’

Remember China MediaExpress? That’s the company whose CEO – Zheng Cheng – responded to the accusations of fraud by evoking ‘reputable and well-known’ Deloitte to get the haters off their back. Even though the company is still taking heat, Mr Cheng will be happy to know that he’s got someone in his corner: Glen Bradford, CEO of ARM Holdings LLC, a Hedge Fund Advisory Company. The thing is, Mr Bradford seems a little confused about what an auditor’s purpose is (for fun, I added some emphasis):

I have received tons of messages that can be summarized by the belief that auditors do not look for fraud and that all they do is make sure things line up in the reports. I can say that this is not true simply by being practical. If we didn’t have auditors to verify the claims that companies make, then companies could claim whatever they want to. The purpose of auditors is completely, entirely, and wholly to look for indications of fraudulant activity — and to do their best to remove all possible doubt that the company is misrepresenting itself on its financial statements.

You can make of that what you will but then Glen continues:

Then, if things are OK, they sign off on them. Some auditors are better than others. Deloitte is the best. Period. End of Statement.

Well then! I’m sure Deloitte appreciates the ringing endorsement regardless if it comes from someone who is under the impression that “The purpose of auditors is completely, entirely, and wholly to look for indications of fraudulant activity.” At the very least, this is debatable point, so if you have a difference of opinion with anything above, feel free to share below.

China MediaExpress Holdings: All Eyes on Deloitte [Seeking Alpha]

Chinese Companies Want the Big 4 Magic

“Companies are under pressure from investors to get the best auditor they can,” said Paul Gillis, an accounting professor at Peking University in Beijing. More than 200 Chinese companies are listed on U.S. exchanges, and hundreds more trade on over-the-counter bulletin boards. In the last five months, at least 15 have upgraded to a Big Four auditor — Deloitte, Ernst & Young, PricewaterhouseCoopers or KPMG — from a smaller firm, according to an analysis from Audit Analytics. [Reuters]

Weary Big 4 Auditors Are Invited to Live Out Their ‘What I Really Wanted to Be’ Dreams This Saturday

As busy season trudges along, some of you may be looking for a second wind. For many of you, any chance that you can reach down into your soul and conjure up a little more energy to help you reach the finish line passed with that blown deadline.

However, for anyone on the Isle of Manhattan that is looking for a little pick-me-up this weekend, we’ve been informed that there is a fiesta in the making (invitation art at right) and it invites you to harken for the days when your aspirations weren’t so practical:

My friend is having a party this weekend with what I think is a pretty clever theme. On Saturday, we will be attending “Fuck! We are Auditors (How did that happen)”. Description:

“Have you always dreamed of becoming an Auditor?

If so, this party is not for you. For everyone else, come celebrate the (nearing) end of busy season! The theme of FWAA is to dress up as something you wanted to be when you were a kid. So call up your mom or flip through your diary to see what aspirations you had when you were young. Points (more alcohol) will be given to those who have a very convincing outfit.

So don on a lab coat, leotard, or tiara, bring a little somethin’ somethin’ (alcohol), and come get your drunk on. Feel free to invite other auditor or drab job related friends. Perhaps this theme will inspire other auditors to put their life in perspective and go for it…or just drink more to our unachieved dreams. We obviously don’t mean any disrespect to our jobs (or firm. no need to bite the hand that feeds you) seeing as we just started, but any reason to drink/dress up right? It’s been a long busy season. One down, and god-knows-how-many to go.

And good news, the party-throwers (who wouldn’t share their firm with us) have deemed this all-firms-are-created-equal event, “we’re willing to look past those corporate labels and invite all auditors to party.” Of course if you’re not in the Tri-state area, you’ll have to organize your own dashed-dreams rager but the theme has been set. Cowboy, pro athlete, Miss USA, movie star, whatever you failed to be, you’re invited to pretend for a few awkward hours this weekend. As long as you’re not working of course.

How Should an Ex-Big 4 Manager Broach a Possible Return to the Firm with His Boss?

Welcome to the this-ashes-made-me-break-out edition of Accounting Career Emergencies. In today’s edition, a former Big 4 manager wants to pursue a chance to return to this old firm. How does he handle this with his current employer?

Got a question about your career? Do you have an interesting opportunity but not sure if you should pursue it? Need a new nickname for your special, super-secret team? Email us at advice@goingconcern.com and we’ll help you avoid anything lame (or possibly racist).

Back to the Big 4 Boomerang:

Hey Going Concern,

About a year ago, I left Big 4 as an audit manager and now work for a client of my former firm (though not one of mine, Paul Sarbanes and Michael Oxley made sure of that). Lately, I’ve been seriously considering a return to my old Big 4 stomping grounds.

My questions isn’t whether I’m crazy or not, it’s how to handle the issue with my current company. It’s not a slam dunk that I will return to my old firm, but I want to at least pursue it. On the plus side, I have a good relationship with my current boss (we’ve known each other for several years).

If I come clean to my boss but end up staying, that’s a pretty big matzo ball hanging out there. If I reach out to my firm on the sly and leave, I threaten to restart my audit career by angering a client.

Help me Going Concern, you’re my only hope…

Thanks,
The Once and (possibly) Future Auditor

Dear Oa(p)FA,

A Seinfeld and a Star Wars reference? Obviously this is keeping you up at night. I’m on this. Since you’ve made up your mind that you are pursuing a Big 4 boomerang situation, I won’t pass judgment there but knowing a little more about your situation might be helpful. I’ll be making some assumptions in order to help you with your ordeal.

Personally, I’m a “honesty is the best policy” type, so telling your boss about your ambitions is the way to go. It sounds like you’ve got a good relationship with him/her and if you do the march in, drop the news and are gone in two weeks, I feel like you’re torching that bridge. The best thing you can do is explain your reasons for pursuing a return to your Big 4 firm. If it’s because you really miss auditing, I think you need your head examined. If it’s because you think you want to make a run at partner, the odds are against you. If it’s because you think it will better prepare you for a return to an industry for a management position, then you can probably explain this to your boss (assuming he/she is level-headed person); your honesty will be appreciated and your integrity will remain intact.

And if you don’t get the job, what then? Well, that is a bit awkward but if you and your boss have a good relationship and are the only two people aware of the situation (which I recommend), you don’t have to worry about others getting all judgmental on your ass and you’ll eventually get back to business as usual. If your boss knows you well, he/she probably is aware of your long-term career ambitions and knows that a move (regardless of whether it’s a return to your old firm) is inevitable at some point and situations like this will come up occasionally. And if your boss isn’t aware of what you want out of your career, this is a perfect time to start talking about it. May The Force be with you.

Just So You’re Aware: A New Species of Frog Has Been Named After Deloitte

This announcement is a week old but it’s GC worthy so if you feel compelled to mention the timing of our post, don’t. Supposedly, this chap to the right is Nectophrynoides deloittei and was discovered in the Rubeho Forest in Tanzania in 2005. The African Rainforest Conservancy (“ARC”) slapped the name on him for Deloitte’s contributions to the nonprofit’s environmental efforts in the Rubeho region.


From Deloitte’s consistently awful website:

A new species of frog has been named after Deloitte, in recognition of the firm’s work in helping to preserve the Rubeho Forest in Tanzania, an ecologically distinct part of the country known as the ‘Galapagos of Africa’. Nectophrynoides deloittei was discovered in the Rubeho Forest in 2005 was named by the African Rainforest Conservancy (ARC), an agency set up to conserve and restore Africa’s rainforests.

Just such an occasion might cause someone to tweet something but there hasn’t been a peep out of Quigs. Probably plugging the book.