When accounting goes unaccounted for
If it happens at a Big 4 accounting firm, we’re talking about it here.
Or a loudmouth neighbor depending on your political preference. Either way you look at it, 5 Times Square won’t be the same.
Giuliani Partners, the consulting business formed by the former mayor shortly after he left City Hall, has vacated the flagship office it had on a floor of the Ernst & Young offices in Times Square for nine years, consolidating space with the ex-candidate’s law practice, sources confirm.
Giuliani Partners closes Times Square office [Maggie Haberman/Politico]
There has to be some tax people working. Just a hunch. If your plans have been ruined, we want to hear about it.
Today in “My life is falling apart and I’m an accountant” we have another poor sap that is plagued by a low GPA. Are they doomed for mediocrity? We’ll get to that, right after…
Are you wondering what your next career move is? Are you an auditor trying to put the moves on someone in tax and have no idea what to say? Wondering whether you should put the kibosh on your vegan lifestyle at your next partner lunch/dinner since you think it’ll make you look like a complete weirdo? Email us your inquiry to advice@goingconcern.com and we’ll put you at ease.
Back to our slacker du jour:
My undergrad GPA was a 2.99 cumulative and that’s been a killer in my application and job process. I’m currently with a very small CPA firm. Is there a point on continuing even if I pass my CPA? It seems no one really cares about any accounting experience for public unless it’s big 4 or mid-tier. My 2.99 has been a killer since the majority of firms are looking for a 3.00+. I’m looking at options at grad school, but I’m not sure if it would help if I wanted to go Big 4 still. I also believe I should pass my CPA first if I’m looking to go for a one year MBT or MACC (Masters of Accounting) program, but honestly I don’t know that I would get in considering my GPA unless I got stellar GMAT scores.
First of all, we’re not quite sure why you’re looking for a job when you already have a job. Do you intensely dislike this “very small CPA firm”? Our guess is yes since you’re writing us but take a serious look at your current situation and consider the experience that you are getting at your current firm. It may not be exactly what you’re looking for but the work experience you obtain will be valuable.
That being said, you then moving on to “Is there a point on continuing even if I pass my CPA?” Do we need to call the suicide hotline for you? Get your CPA. That will go a long ways to bolstering your career prospects, 2.99 GPA or not.
We definitely take exception with your “no one really cares about any accounting experience for public unless it’s big 4 or mid-tier.” There are plenty of Big 4 whores around these parts that might say that but don’t forget that small firms differ from the Big 4/second tier in some positive ways, so don’t dismiss the opportunity you have right now.
As far as Grad School goes, wait until you’ve got some work experience and CPA. Do you really want to rush right back to school? If you get some good work experience and you have some decent professional accomplishments, the graduate schools will take that into account. Yes, killing your GMAT will help your chances but you’re not doomed, friend; you’ve just got an uphill climb.
We briefly mentioned this case on Monday but since everyone seems to have checked out mid-week, we’re sure you won’t mind.
Way back in the dawn of the Clinton Administration, some financial reporting chicanery went down at Papel Giftware, Inc. so that Cast Art Industries of Corona, California would run into the company’s outstretched arms. More specifically, chicanery that consisted of ” ‘systemic, organized, improper accounting practices at Papel.’ ” Cast Art failed in 2003 which made everyone sad/mad.
KPMG was on watch as this all went down and a jury found the firm negligent in 2008 under the Accountant Liability Act.
The bitch of it is, the KPMG partner was thisclose to pulling out of the engagement, “[A] July 2000 letter by KPMG partner John Quinn that said Papel Chief Financial Officer Rick Wasserman gave an ‘unfair and misleading characterization of the accounting and auditing issues.’ Quinn said he was ‘very much inclined’ to recommend ending work with Papel after that year’s audit, according to the opinion.”
That ‘very much inclined’ didn’t result in “we withdraw from the engagement.”
However, since the KPMG is a professional services firm with the necessary means and a reputation to protect (according to some, anyway) they appealed the ruling and on August 26th a three-judge panel of the New Jersey Appellate Division still said, “yep, it’s accounting malpractice.”
This was a thrilling result for plaintiffs who are looking to squeeze more damages out of the firm:
“This is a huge win and no matter how KPMG wants to spin it, it’s a devastating loss for KPMG,” plaintiffs’ attorney Michael Avenatti said in an interview. “KPMG’s appeal of this case may go down as Exhibit A of ‘Be careful of what you wish for.’ Now, we have the ability to go collect potentially $10 million to $20 million more in additional damages.”
Right. The spin.
A KPMG spokesman, Daniel Ginsburg, said the firm is “considering our available options” after the ruling.
“We are pleased that the court affirmed dismissal of the plaintiff’s fraud claim against us, and also reversed the jury’s verdict by ordering a new trial on the issue of damages,” Ginsburg said in an e-mail. “We are disappointed, however, with the court’s ruling on legal issues regarding the plaintiff’s negligence claim.”
Actually, not much spin there. Just one of those kiss your sister/brother moments.
KPMG Committed Malpractice Tied to Cast Art Merger, Appeals Court Rules [Bloomberg]
On with the second dose of rankings today, this time courtesy of Vault with the Vault Consulting 50 and The Best Consulting Firms: Prestige.
The Top 50 came out last week and it is new to the stable of Vault rankings. Here’s the top twenty-five firms (26-50 is here) of the inaugural breakdown:
1 Bain & Company
2 The Boston Consulting Group, Inc.
3 McKinsey & Company
4 Analysis Group, Inc.
5 The Cambridge Group
6 Deloitte Consulting LLP
7 Oliver Wyman
8 A.T. Kearney
9 Triage Consulting Group
10 Censeo Consulting Group
11 West Monroe Partners
12 Cornerstone Research
13 PricewaterhouseCoopers LLP (Consulting Practice)
14 Alvarez & Marsal
15 Trinity Partners, LLC
16 Booz & Company
17 Milliman, Inc
18 Strategic Decisions Group
19 PRTM
20 Gallup Consulting
21 Diamond Management & Technology Consultants, Inc.
22 Health Advances, LLC
23 Strategos
24 The Brattle Group
25 Monitor Group
Similar to Consulting Mag’s ranking, Deloitte and PwC (along with recently purchased Diamond) rank the highest of the Big 4 with derivatives Accenture and Capgemini landing at 32 and 45. Problem child Huron Consulting came in at 48. KPMG and Ernst & Young are MIA.
The methodology for the Top 50 breaks down this way: 25 percent firm culture; 25 percent work/life balance; 20 percent compensation; 20 percent prestige; 5 percent overall business outlook; 5 percent transparency. Practicing consultants were asked to rate what was most important to them at their firm. As you can see, while prestige still carries some weight, culture and work/life trump in this list.
Speaking of the prestige factor, a little jockeying amongst Mercer, Monitor and PwC but otherwise the top ten was unchanged from last year.
1 McKinsey & Company
2 The Boston Consulting Group, Inc.
3 Bain & Company
4 Booz & Company
5 Deloitte Consulting LLP
6 Mercer LLC
7 Monitor Group
8 PricewaterhouseCoopers LLP (Consulting Practice)
9 Ernst & Young LLP (Consulting Practice)
10 Oliver Wyman
11 A.T. Kearney
12 Accenture
13 KPMG LLP (Consulting Practice)
14 IBM Global Business Services
15 L.E.K. Consulting
16 The Parthenon Group
17 Towers Watson
18 AlixPartners, LLP
19 Navigant Consulting, Inc.
20 Alvarez & Marsal
21 ZS Associates
22 Capgemini
23 FTI Consulting, Inc.
24 NERA Economic Consulting
25 Hewitt Associates
In the prestige list you’ll find the Big 4 much more prominent which may be due to the methodology that practicing consultants at these very firms are surveyed to rank the firms on a range from 1 to 10. They cannot, however, rank their own firm.
In 26-50 range you’ll find more familiar names including Huron at #27 (dropped from 25); Grant Thornton at #28; Diamond Management at #31; BDO Consulting at #49.
So based on these, the Big 4, GT, BDO seem to be doing well from a prestige standpoint but lag a little in others, namely culture and work/life balance. Sound about right? Discuss.
Consulting Firm Rankings 2011: Vault Consulting 50 [Vault]
Consulting Firm Rankings 2011: The Best Consulting Firms: Prestige [Vault]
The Big 4 managed to squeeze onto a a couple different recent lists for their consulting efforts including Consulting Magazine’s 2010 Best Firms to Work For and Vault’s 2011 Consulting 50.
We’ll roll out the particulars of Consulting Mag’s lists first and give you Vault’s results later today.
Consulting Mag has several different lists but we’ll stick to the most relevant for the Big 4 . We’ll start off with the overall ranking:
1. Bain & Company
2. The Boston Consulting Group
3. North Highland
4. Point B
5. McKinsey & Company
6. Deloitte Consulting
7. Booz Allen Hamilton
8. PricewaterhouseCoopers
9. Accenture
10. Slalom Consulting
11. Milliman
12. Booz & Company
13. A.T. Kearney
14. Capco
15. PRTM
So the Big 4 really makes two appearances here with Deloitte and PwC. You could throw Accenture in there for old time’s sake. Back when we covered Barry Salzberg’s little merger chat in the Journal, two names that were thrown at him were Booz and A.T. Kearney. While this list is certainly no indication, you’ll see that based on the rankings, Deloitte ranks above both those firms despite commenters suggestion that Booz and A.T. are superior brands.
The list dominated by the Big 4 was the Business Advisory Services:
1. PricewaterhouseCoopers
2. Alvarez & Marsal
3. Ernst & Young
4. KPMG
5. FTI
You don’t see Deloitte and Accenture on this list since they fall on the “Multi-Service” list at #1 and #2 respectively and Capgemini (purchased E&Y Consulting in 2000) is numero uno on the Information Technology list.
Deloitte Consulting and PwC get dropped on a few more lists that include: Career Development, Work/Life Balance and Culture while KPMG and E&Y are nowhere to be found. A list of “Best Places to Start a Career” listed Deloitte at #3 and KPMG at #6 with PwC and E&Y MIA.
Naturally there is room for bellyaching and there are vaguely familiar frustrations in the feedback portion:
Leadership
You have to manage your career with little help from management. Here’s the rope, climb the mountain or hang yourself…Work/Life Balance
The concept of a work life balance is talked about, but only as an afterthought.Compensation/Benefits Satisfaction
Your work will double, but salary may not.
Those aren’t specific to any one firm but something tells us you could find someone in any of the Big 4 consulting/advisory groups griping about these issues. OH! And as far as scoring for morale goes, the Big 4 are shutout of the top ten.
So a bit of a mixed bag on this particular list but you’ll likely see a rash of press releases in the coming days and weeks along with emails and whatnot from your leadership.
So feel free to debunk the latest seemingly arbitrary rankings. We certainly expect the consulting purists of the bunch to be disgusted with the Big 4 sullying these particular grounds.
The Best Firms to Work For, 2010 [Consulting Magazine]
PricewaterhouseCoopers Named Among the Top 10 Best Firms to Work For by Consulting Magazine [PR Newswire]
“Lehman’s books were in such a mess that I don’t think they knew where they were.”
~ Elizabeth James, a director of Barclays’s futures business, testifying in bankruptcy court.
And you know he’s not messin’ because that’s what he told Charlie Gasparino and God knows you best not lie to the Fox Business Network’s ace reporter. Sure Bové didn’t actually say “KPMG” (hell, he’s probably never heard the name) but he’s giving credit to auditors which is about as unheard of as Tiger Woods using Trojans with hookers.
Bové may have mentioned some other things about Mike Mayo, Citi, Deferred Tax Assets so on and so forth but we’re sure you’re not worried about that.
Btw, if you need to get caught up on just who Dick Bové is, go here. Courtesy of FBN:
On Citi’s apparent cold shoulder towards analyst Mike Mayo:
“It’s totally wrong. Mike Mayo is a brilliant analyst. He’s been in this business for a long period of time and does a superb job of following the industry. To say he can’t come in and speak to the company in my view is absolutely and totally incorrect.”On whether Mike Mayo’s accusations against Citigroup’s risk management lapses are accurate:
“Absolutely. In September of 2008, Citigroup was effectively bankrupt. The reason why it was bankrupt was the reason that Mike cites. It was that the risk management procedures had completely broken down and it was not effectively managing its portfolio. Mike is right on that comment.”On why we should believe Citi on its accounting reports:
“We don’t have to take Citigroup’s answer to Mike Mayo. We can take a look at the fact that this company is audited by an exceptional group of auditors. They are regulated by a large number of bank regulators…and they actually are being audited for their tax issues right now by the IRS. All three of these groups agree with the public statements of Citigroup concerning DTAs.”“What is the basis for saying that these three groups which have seen the numbers don’t know what they are talking about, whereas people that have not seen the numbers, do know what they are talking about.”
On whether Citi has been given a clean bill of health by the SEC, IRS and the Fed:
“We do have an audited financial statement which is not questioning the DTAs. We do have bank regulators who could have memorandums of understating with Citigroup if they believed there was a problem. Citi is estimated to earn by Mike Mayo $9 billion this year. Next year he estimates the company to show a 33 percent increase in earnings to $12 billion. If there is a DTA problem, why is there a belief that the company can jump its earnings by 33 percent from 2010 to 2011?”
We’ve been assured by the wonderful people at Fox that we will have video of this momentous (and perhaps unprecedented) occasion just as soon as it’s available.
UPDATE: AS WE SUSPECTED! Not only was the initial report mis-transcribed, check out Dick’s reaction to Gasparino’s question, “It’s KPMG I believe, correct?” around the 2:37 mark:
Pretty obvious that the dude has never heard of KPMG in his life.
A win is a win and the U.S. Second Circuit Court of Appeals handed one to John Larson, one of three defendants sentenced last year for selling illegal tax shelters. The Court “found Larson’s [$6 million] fine too high, citing a lack of jury findings to support a fine above $3 million. It returned that part of the case to the lower court to recalculate any fine.”
That’s more or less where the good news ends. The court did uphold the convictions of Larson and his two co-defendants – ex-KPMG Partner Robert Pfaff and ex-Brown & Wood partner Raymond Ruble. Larson was sentenced to a 10 year prison term last year. Pfaff received 8 years and Ruble 6-1/2 years.
Appeals court upholds KPMG tax shelter convictions [Reuters]
Sayeth San Fran managing partner Mark Edmunds.
He told the SF Business Times, “The cool factor will be very high,” so maybe we’re taking his statement slightly out of context. Presumably, “high cool factor” not only means that there won’t be tight security on bathrooms and they’ll allow pictures in your respective cube but it sounds as though there will be a faux-Starbucks available and a theater so you can listen to Barry Salzberg talk about diversity in surround sound.
The new office — nine floors in San Francisco’s newest office tower — represents not only a change in address, but an evolving philosophical transformation in how Deloitte serves its clients. Instead of private sanctuaries where partners retreat to pore over financial statements, the new environment will be all about collaborative spaces, Starbucks-like cafes and enclaves with the latest video conferencing technology. There will be a theater-style “learning center” that can hold groups of up to 200.
Deloitte recalculates headquarters [SF Business Times (partial subscription required)]
The good ole US of A is always here to help its friends in times of need (whether it’s right or wrong is another matter completely). This reverberates all the way down to the multi-national companies that enjoy expansive networks in the U.S.
Getting to the point: from the mailbag:
I (along with EVERY associate and senior associate in the US) got this email this morning from some idiot staff in KPMG Ireland asking us to vote for him to win a vacation courtesy of Coors Light. I’ve never heard of this guy but apparently thinks he knows all of us well enough to ask us to vote for his stupid beer vacation.
I kid you not — he actually looked up every associate and sr associate distribution list for every region/office and practice. He’s listed as a “Trainee” in the global address book under KPMG Ireland FS Audit (whatever that means). This idiot needs to be taught some email common sense…
But when matters of utmost importance – such as a winning a ski getaway to British Columbia – there is only one place to turn…The United States:
Hey everybody!
Me and 2 friends have entered a competition to win a free ski trip to Whistler, Canada. It just depends on who gets the most votes in a week. If you could follow the link and vote for us I’d really appreciate it.
http://www.coorslight.ie/destination/profile/cde76g7p
It only takes about 10 seconds and no registration / email needed. You just enter your D.O.B to enter the main site (or any DOB that makes you over 18) then just hit the ‘vote for us’ tab on our profile –
Ri-Skii Business. If you can forward this to some friends or contacts in your different offices it could really help to put us out in front!Thanks!
Here’s the plea from the Ri-Skii Business page:
Idiot? Or sheer genius? We’ll let you debate that one. In any case, help the dudes out and go vote. They’re just looking for the next adrenaline rush.
And finger quotes are obviously an effective way of communicating.
Someone is wasting some billable hours in a very fine manner this August.