Category: Big 4

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

Comp Watch: Sit Downs Starting at Deloitte; Anxiety Over Raises Picking Up

Lots of news this week on the compensation and promotion fronts with Grant Thornton, KPMG and PwC all making announcements or soon-to-be making announcements (that we’ve heard; are you holding out on us, E&Y?).

The latest out of Deloitte is that the discussions are starting (although maybe not today since it sounds like most are off) but the news on yay or nay on promotions is starting and now the anxiety around comp will increase over the next two month:

The year-end ratings and promotion decisions have been approved by National; so the process of communicating both to Deloittians is starting…At a high-level, I heard that promotions this year were tough – that being said, plenty of people made it through. For the most part, people are now waiting to hear about comp – scheduled for communication the last two weeks of August.

We did hear one rumor about the number of new partners expected, “at a recent partner meeting, it was announced that there will be more than 60 new PDPs nationally, with more than 10 being in the Northeast,” so you can toss that around your meat-ingestion fest this weekend if you so choose.

Discuss your epic/tragic news re: your new promotion if you’ve received word and keep us updated on the comp rumors.

What’s the Next Move in This PCAOB Situation?

Jonathan Weil over at Bloomberg has a new column up today and he is less enthusiastic about the Supreme Court decision in FEF v. PCAOB than say, everyone else.

JW is mostly wondering why we should keep having an “independent” PCAOB inside the SEC since the board members will now be at the mercy of the towing the political line inside the Commission, “While the court

Promotion Watch: KPMG Hands Out New Stripes Today

A source reminded us that today is welcome to your new personal hell job day in the house that Klynveld built:

“Today is July 1st promotion day for KPMG…figured it can be a post item shoutout.”


So that’s exactly what we’re doing. Congrats to those of you enjoying a new title and feel free to pat yourself on the back below but don’t get all Sally Field on us. That’s just embarrassing.

As far as the promotion bonus is concerned…that may be another matter. But if the last three months of the fiscal year go well, who knows what can happen come fall?

UPDATE: We’ve been notified that there hasn’t been any word in at least one office (Southeast) on promotions which strikes us as strange but…HEY! anything is possible. If you’re in the dark, let us know or discuss.

KPMG Resolves Lawsuit with New Century

Francine McKenna reported briefly last week that KPMG settled the $1 billion lawsuit with the New Century Liquidating Trustee. Sure enough, we checked with Steven Thomas and he gave us the same statement:

“The New Century Liquidating Trustee and KPMG LLP have entered into a confidential settlement agreement, pursuant to which the lawsuits and arbitration against KPMG LLP and KPMG International have been resolved.”


Well! That’s some important news. We called up KPMG shortly after we read Francine’s post last week to see what they had to say about it and we were told that they’d get back to us. Unfortunately, we’re still waiting but we’re sure they’re excited, just taking the time to find the right words. Anyway, we’re here when you’ve perfected the prose. In the meantime, if you’d like to take a shot at what the response might be, pen it below.

We’ll pass along more details as they become available.

Who Will Deloitte Buy Next?

Deloitte CEO Barry Salzberg did a little sit down with the Journal and made it perfectly clear that he’s shopping for another acquisition. The BearingPoint transition seems to have gone as well as Dr. Phil could have asked for and now he’s ready to move on to the next one.

But who?

Mr. Salzberg declined to name specific future targets, but said he sees opportunities to build scale in areas including environmental and technology consulting.

“I would be very willing to make another and very willing to position ourselves properly for the right kind of acquisition or a combination in the market.”

The Journal article mentions the recent rumors around Booz & Co. merging with A.T. Kearney but BS wasn’t that hot on the idea (even though D could take both either of them no prob) saying that they aren’t, “‘as high a priority for me’ as other opportunities.”

Plus, Salz is hoping that he can offering something tangible for a change rather than just billing all your hours out, “He cited a newsletter, or ‘information services,’ as an example of something that isn’t as labor-intensive as consulting but provides a complementary service to clients. Such a business ‘isn’t as dependent on the hourly production of people,’ he said.”

No target is too big or too small, according to Salzberg but like we mentioned, he’s not naming names. So let’s try and read his mind a little bit, throwing caution to the wind – McKinsey? DiversityInc Magazine? The Hair Club for Men?

Suggestions, sincere wishes and wild-ass guesses are welcome.

How the Big 4 Are Helping Career Moms Have It All

The Harvard Business Review’s blog (Harvard blogs?) ran a piece earlier today about a recent Pew Research study that claims more women are not having children.

The HBR brushes over the whole birth control thing and serves its best interest by focusing on what they consider having it all (an advanced degree and at least one child), picking the following statistic out of the hay stack, “in 2008, 24% of women ages 40-44 with a master’s, doctoral or professional degree had not had children, a decline from 31% in 1994.”


This had me thinking about the benefits that the Big 4 provide to their employees going through early parenthood. What might surprise you (or might not) is how similar the firms’ services are.

From PwC.

From Deloitte.

From KPMG.

From E&Y.

Parental leave of absence: “Eligible primary care parents with three months of service can use six weeks of paid parental leave during the year following birth or adoption placement (three weeks for non-primary care parents). This is in addition to maternity disability benefits, if applicable, of 60% to 100% for approximately 8 weeks. Paid parental leave runs concurrently with any job-protected time under family and medical leave.”

Provided by every Big 4 firm:

Adoption assistance – Per EY’s site: “Pays expenses up to $5,000 per child (with an additional $1,000 for special needs children), with paid leave available for the caregivers, along with resource and referral services.”

Lactation program – PwC’s program, explained: “Access to educational materials, unlimited pre/post-birth counseling from nationally recognized lactation specialists and breast pump discounts are available through this program. Private mother’s rooms are also available in many of our offices.” Do conference frooms count as “mothers’ rooms?”

Parental paid leave of absence

Deloitte – 2 weeks (this is all I could find – can anyone prove differently?)

PwC – up to 6 weeks

KPMG – 8 weeks “Professionals who plan to return to work after the birth or adoption, are eligible for two weeks (10 days) of paid child care leave.”

E&Y – 6 weeks

Unique programs:

Family time off – The Family and Medical Leave Act of 1993 promises 12 weeks of unpaid leave for those employees who need to take care of a sick family member. E&Y extends this service to 16 weeks.

Back up Child and Elder Care – many of the firms provide some kind of support for employees when family care emergencies occur. KPMG takes things one step further by allowing employees to share their unused resources with colleagues that have depleted their resources.

Note – I used external websites when reviewing the different options – these might outdated from what you have internally. Does your local office offer something unique that is not listed here? Share details in the comments.

More Women Manage to Have It All [HBR]

Today in Auditor Musical Chairs: KPMG and Deloitte Both Get the Boot

Evergreen Energy of Denver dismissed Deloitte effective June 23rd according to the company’s 8-K filing. Hein & Associates, a local Denver firm, will take it from here.

It stands to reason that Evergreen didn’t appreciate the going concern opinions that Deloitte gave the company for its December 31, 2009 and December 31, 2008 financial statements but in cordial SEC filing fashion, there are no parting shots from the company.


Evergreen’s press release indicates that this was simply an opportunity to throw some action to another firm (most likely with lower fees), “With the sale of certain Buckeye assets and our exit from the coal mining industry, Evergreen Energy has transitioned into a green technology company. This is an ideal time to switch to a Denver-based regional accounting firm with substantial public company expertise in the clean technology and software industries that can more cost effectively meet our needs.”

Deloitte’s letter to the SEC is abruptly admits that everything is cool rather than flat out saying, “you’ll be sorry you ever ditched us, you losers.”

Similarly, Measurement Specialties, Inc. showed KPMG the door for Ernst & Young. The company says everything was hunky-dory between the two although there was a small matter of the internal controls around a significant joint venture of which the company had no control. Oh, and the effectiveness of internal controls of some recent acquisitions also couldn’t be determined. But it was cool and the company said, “it was in the best interests of the Company to change its independent registered public accounting firm.”

KPMG has NFI what that means saying in their letter, “we are not in a position to agree or disagree with Measurement Specialties, Inc.’s statements relating to the reason for changing principal accountants.”

We wish everyone nothing but happiness.

Were PwC and Grant Thornton Ignoring Overstock.com’s Accounting Issues?

Yesterday we briefly picked up the Overstock beat as Sam Antar pointed out that everyone’s favorite Salt Lake City resident got a little confused about when they knew about their gain contingency existed that resulted in some contradictory disclosures.

As you may misremember, this arose from the company for recoveries from underbilled fulfillment partners by improperly claiming that a ‘gain contingency’ existed under accounting rules.”

Now Sam has pointed us to some correspondence between the SEC and Overstock that indicates that PwC wasn’t concerned about the issue until the Commission pointed it out and succeeding auditor Grant Thornton was unmoved until Overstock brought it up:

Please tell us if, and the extent of, your auditors’ national accounting office involvement in these issues during audit of your 2008 financial statements or the reviews of your fiscal 2009 quarterly filings.

PwC served as our auditor during the audit of our 2008 financial statements. PwC has informed us that it did not consult with its national accounting office regarding the above issues when they were identified in Q4 2008 or Q1 2009. However, in connection with this response to your letter dated November 3, 2009, PwC has consulted with its national office in regard to both the fulfillment partner under billing and partner overpayment issues and based on context of this being an area that is a highly facts and circumstances based issue that requires significant judgment where reasonable parties have different views, PwC continues to concur with our accounting and disclosure consistent with its reflection of the underlying economics and our past practices of not billing or collecting for our billing errors, rather negotiating for future price concessions that were contingent on future sales.

Grant Thornton (“GT”) reviewed our Q1 and Q2 2009 quarterly filings. To our knowledge the GT local engagement team did not review these issues with its national accounting office at the time of our Q1 and Q2 2009 quarterly filings. In early October, as we prepared our response to your October 1 letter, we asked GT for its national office’s opinion. It was our understanding at the time that GT’s national office concurred that we had used an appropriate (if not preferred) accounting treatment. Only after we received your November 3 letter, did we become aware that GT’s previous “national office” opinion had in fact been an “informal request” only, and not a “formal request.”

In the case of PwC, it’s entirely possible that they just trusted that OSTK knew what they were doing and went along with it. Obviously a huge mistake. When the SEC came calling however, they moseyed through it again and rang up the accounting wonks at 300 Mad.

But the Grant Thornton engagement team, who came in after all this went down was seemingly on board with it without consulting with its own national accounting gurus even though the SEC was already on this like stink on a monkey. GT making an “informal request” of its national office on an SEC inquiry seems a little tepid.

HOWEVER! You have to remember that this is all in the words of Overstock which hasn’t always been forthcoming/reliable/truthful in its filings. Then again, maybe there’s something to this whole auditor “Yes men” thing.

Be Sure to Keep Your Guard Up at the Next PwC Happy Hour

We received a tip early last week that will could make you think twice about attending the next PricewaterhouseCoopers happy hour, or at the very least, keep your eyes open for the attendees that have clearly drank themselves blind.

Our original tipster told us the following, “You should look into a PwC male partner punching a male associate at a going away happy hour in Houston, TX. Allegedly, the story is the partner got drunk, walked up to the male associate and said “I know you want to kiss me” proceeded to kiss him on the lips and then pushed and punched him.”


Well! That sounds like a helluva party. We’ve heard of partners bullying other partners before but this is a new one.

Before we go any further, we should note that while we did learn the name of the partner in question, we’re withholding the name of the person at this time since we have yet to confirm the incident first-hand with an eyewitness to the events. If you were there and can confirm these events, including whether it was a left jab or round-house uppercut and whether it was a peck or a sloppy make out attempt, email us and tell us what you saw.

Okay. So, our source proceeded to tell us that the partner had been placed on the probation and didn’t acknowledge the event for several days saying, “he didn’t remember anything that happened because the engagement team brought drugs to the happy hour.” Fairly standard black-out excuse.

Anyway, we checked on this rumor with a source in PwC’s Houston office who told us the following:

A fellow associate of mine was at an audit happy hour last Friday and he said something along the lines of “things got really, really crazy.” And he wouldn’t tell me what he meant by “really really crazy.” I guessed table dancing / hooking up, but he said no, it wasn’t like that.

Luckily for all us, our source did end up talking to the witness and told us:

I talked to my friend — he could neither “confirm or deny the events” ; however, from talking to him, it sounds like the rumor is true. Per my friend, the “issues are still under investigation by the Firm.” So its all very hush hush evidently. The client is a high profile one, so I’m sure people are being very, very careful to not let the gossip spread if it all possible.

With all this, we thought we’d better call this partner up to see what’s what. We called the Houston office, requesting the partner in question (“PIQ”) and after a pause by the receptionist, we were connected. Expecting the typical partner buffer of an admin to answer, we were surprised when the he answered. We politely introduced ourselves and asked about “an incident that happened at a recent happy hour where your name came up.”

The PIQ immediately interrupted, “I’m not allowed to discuss anything about that. Thank you very much.” and promptly hung up the phone.

We tried getting in touch with PwC spokesman Jon Stoner to see what he knew about this alleged make out/fisticuffs situation but he has yet to return our phone calls or emails. If you’ve got more details on this story, get in touch with us and we’ll update the post if we hear anything more.

BearingPoint Trustee Shaking Down Old Employees for Sketchy Expense Reimbursements

The Washington Post recounts Deloitte’s purchase of BearingPoint’s Federal Services business last year and as you might imagine it’s mostly a glowing piece about various aspects of the deal.

These include revenue growth “The company posted about $1.65 billion in federal revenue this year — up from combined revenue of about $1.43 billion before the acquisition,” the increase in headcount, “Deloitte hired close to 1,400 people, and the firm is now planning to add 160 to 170 more per month,” and expansion of services, “Deloitte had a more expansive set of services and products than BearingPoint — including tax, audit and consulting services — but BearingPoint, with more than 35 years in the federal business, had access to a larger set of clients.”

Sounds swell but there are some loose ends to tie up, most notably the trustee of BearingPoint’s liquidating trust is sending letters to former BearingPoint employees under the Deloitte roof to get some cash back for expenses that were deemed unnecessary for doing typical business in DC Metro:

John DeGroote, whose firm serves as trustee to BearingPoint’s liquidating trust, confirmed his company is now trying to reclaim BearingPoint expenses that were improperly reimbursed — either because the expense should not have been reimbursed or because the employee did not provide the right documentation.

The trust has sent out between 400 and 500 letters to former BearingPoint employees seeking $750,000 in expenses, $250,000 of which has already been returned, DeGroote said.

Since the “the expense should not have been reimbursed or because the employee did not provide the right documentation” you can safely assume that these were the standard three martini lunches at the District’s finer establishments, rub ‘n tugs and other expenses that would normally be a-okay but less-so when a rival buys you out.

BearingPoint acquisition has extended Deloitte’s reach [WaPo]

Deloitte Employees Enjoy Boozing, Checking Out Men in Uniform Thanks to G-20 Protesters

Protestors of this weekend’s G-20 Summit invaded Toronto this week which promoted some companies in the TO’s financial district to take extraordinary measures so that their employees wouldn’t be bothered by all the jobless ruffians.

Most shops just sent people home as a precautionary measure as protestors gathered throughout the week but some diehards are camping out, as FINS reports on StatPro North America’s office that is near the red zone that surrounds the Toronto Convention center:

Andrew Peddar, chief operating officer of StatPro North America, said that the firm wanted to ensure that its clients, which include asset managers and hedge funds, could be assured of uninterrupted service during the week.

The campout was the employees’ suggestion. That way, they’ll avoid potential disasters on the client front and also sidestep protestors.

“We have sleeping bags, lot of food and lots of liquid,” said Peddar. The axes? “In case we need to break out.”

Or chop off some ne’er do well’s arm, you know, whatever is necessary. Obviously these guys are overachieving, bedwetting amateurs that don’t recognize an opportunity when they see one.

Fortunately, Deloitte knew better and told all its employees to work from home starting Tuesday. Some used the unexpected time off to get enamored by the security, “Junaid Zia, a risk analyst at Deloitte, had most of the week off. When he left the office Monday night, he said he didn’t see any protestors, only a lot of policemen…’They should just do G-20 every year,’ he said.”

But at least one Big 4 veteran saw this as a perfect opportunity to do some weekday drinking:

[A] senior analyst at the office, took the opportunity to spend time riding his motorbike and watch soccer… “I went to a British bar for the England game, an Argentinian bar for an Argentina game, a German bar for a German game,” he said. “But I’ve been working.”

By Thursday, he was lying down at home, having injured his back. He declined to elaborate on how the injury happened.

Probably hurt it tracking that fantasy football team, no?

What I Did During the G-20 Summit [FINS]

Compensation Watch ’10: PwC Starts Spreading the News in New York

It’s raining bonuses and raises over at PricewaterhouseCoopers these days. Unfortunately, all I’m seeing are news tips (monetary tips or buybacks at the bar are always appreciated). All of my sources are from the NYC office, so if you’re elsewhere in the country, please share your numbers in the comments below. Here’s what we know so far:


• Advisory/Consulting senior associate received a raise north of 18.5%. No, that is not a typo. So in the advisory practice it’s safe to assume the spread is 0% to 19% for raises this year, with the average being about 6% as reported by Caleb earlier.

• A recently promoted associate to senior associate in advisory received a 10.5% raise and a $3,000 bonus.

• Tax bonuses are being handed out now as well. Size matters in this instance, people. Cough up the details below.

This indicates that resources are being spent on what is being determined to be the right people in the right practices. Average performers should expect to receive 4-6% and take it to the bank.

Audit people, what are your numbers looking like? Email us or post your comments below. Practice/office/level are always appreciated

Thanks to everyone that is sharing information. Enjoy the weekend.