Category: Big 4

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

Ernst & Young “Believes” It Will Have Pay Raises This Year

guarantee.jpgGreat news Ernstiverse! If you didn’t have the pleasure of hearing it yesterday, Steve Howe, your Americas Area Managing Partner, announced that he “believes” that you’ll be back to pay increases this year, but he’ll let you know for sure as you get closer to the “salary adjustment date”. Sounds like a guarantee to us!

Plus! Being a general believer in resolutions (and noticing you haven’t don’t anything about that paunch), we heard that the firm will now reimburse “reasonable fitness fees incurred while traveling.”


No doubt Steve-o was in a good mood yesterday after seeing that E&Y was the highest ranking Big 4 firm on the F100BCTWF list and he felt like spreading more good news. In his mind, the title was never in doubt but it’s still nice to see the confirmation.

SH makes three accounting firm big shots to announce that happy times are here again in 2010. Along with soon-to-be blogger Stephen Chipman and the original shot-caller, Bob Moritz, the thawing of salaries might be gaining momentum.

The question does remain: will T Fly and Dr. Phil make similar announcements? Have they already? Are they saving it for a better time, say, mid-February when many of you will be close to losing your shit and are about to storm out once and for all? If they’ve made guarantees, kindly let us know, we’d like a superfecta if possible.

(UPDATE) Ernst & Young Partner Sentenced to Prison for Role in Tax Shelter Scheme

prison.jpgIn accountants going to jail news, E&Y partner Robert Coplan was sentenced to three years in prison for his role in creating tax shelters for wealthy clients from 1998 to 2006.
In addition to the jumpsuit (denim?), Mr. Coplan was ordered to pay a $75,000 fine and peform 120 hours of community service, half of which must be counseling of tax professionals about his time as a scofflaw.


Judge Sidney Stein said that while Mr. Coplan was an otherwise all right guy, the sentence was for ‘general deterrence’ and that he understood that ‘there was pressure coming from higher-ups at Ernst & Young’.
Judge Stein is scheduled to hand out more prison time to former E&Y partner Martin Nissenbaum today, while former partners Richard Shapiro and Brian Vaughn tomorrow.
Presumably all the men have access to a toilet without too much hassle.
UPDATE, Friday 8 am: Martin Nissenbaum was sentenced to two-and-a-half years. Not sure why he got 6 months less than Coplan but we’re sure he’s thrilled with the outcome.
E&Y partner gets prison over tax shelter scheme [Reuters]

The Fortune 100 Best Companies to Work For: Deloitte #70

Continuing our F100BCTWF coverage, we find Deloitte next in the pecking order at #70. This extends Deloitte’s streak of umpteenththousandth straight years on the list. Congrats.

Deloitte – Previously ranked #61. Fortune cites Delta Chi as the big whoop-de-do at Deloitte: “[The] Firm has invested $300 million in Deloitte University, a 107-acre campus in Texas that opens in 2011 and will be the ‘symbolic heart’ of their organization.”


Other interesting stats per the snapshot:
• New Jobs (1 year): 296
• % Job Growth (1 year): 1%
• % Voluntary Turnover: 10%
• No. of Job Openings at 1/13/2010: 11,000 (?)
• Most common salaried job: Senior/Senior Consultant with average salary of $84,658

11,000 job openings? Thoughts on that?

The snapshot also states that 32% of its workforce is minorities and 44% of the workforce is women. What do you think new Chief Diversity Dude John Zamora is shooting for? 50/50? People are kvetching about a few H-1Bs, can’t imagine what that will sound like if Barry Salzberg finally is satisfied.

Plus — not to disappoint some of you looking forward to doing keg stands — if Deloitte scrapped the whole “symbolic heart”, project JARED (can anyone come up with something better than “Jointly Address Reducing Expenses at Deloitte” for the love of God?) wouldn’t even be necessary.

Earlier:
Ernst & Young #44
Plante & Moran #66

The Fortune 100 Best Companies to Work For: Ernst & Young #44

The always über-hyped Fortune 100 Best Companies to Work For is out and a handful of accounting firms make an appearance, thus, extending the number of years that firms will continue to boast about their inclusion. We’ll present each in the order they are ranked for your enjoyment/debate/debunking, starting with E&Y.

Ernst & Young #44 – Previously ranked #51. According to Fortune E&Y is great because, “E&Y is the only one of the Big Four to offer a traditional pension in addition to a 401(k). The firm is courting alumni via a new magazine, Connect.”


Other interesting stats per the snapshot:

• New Jobs (1 year): -1,111;

• % Job Growth (1 year): -4%;

• % Voluntary Turnover: 10%

• No. of Job Openings at 1/13/2010: 622

• Most common salaried job: Manager with average salary of $105,544

This is the first we’ve heard of Connect but we’re guessing Zitor makes a regular appearance. If no Zitor, we wouldn’t bother.

On a more biological note, it’s not clear is where E&Y would rank if Fortune had gotten word of someone hoarding the keys to the mens john in Jericho. We figure if they knew a sicko like that worked at E&Y it would knock them out of the top 50 at least.

Deloitte, All Out of Cost-Saving Ideas, Launches Project JARED

Thumbnail image for salzberg-barry.jpgWhen we first received the tip about Project JARED we thought that Big D had struck a deal with Subway in order to help you lose those extra pounds you’ve been carrying around.
Unfortunately, “Project: Jointly Address Reducing Expenses at Deloitte” won’t be getting you sandies on the cheap; rather it’s a solicitiation of your ideas for saving the Firm money. Apparently Deloitte is plumb out and needs some help

This is your chance to help make Deloitte fitter and stronger — by contributing your ideas to Project JARED.
Project JARED was launched in the U.S. earlier this year to enable our organization to ‘shape up’ by building organizational muscle ― devoting maximum resources to our people and market opportunities. Hence, Project JARED: Jointly Address Reducing Expenses at Deloitte.
“Jointly is a key word here,” said Tony Forcum, Deloitte Consulting LLP, who leads Project JARED.
“More than 600 partners, principals and directors have already been involved in detailed discussions and input sessions, generating over 1600 cost-reduction ideas. We are certain that opening up the dialogue to all of our people will generate additional insights. We need transformational ideas if we are to reach our goal of permanently eliminating $750 million of costs by FY12. We have made a good start toward our goal. The team has validated more than $120 million in sustainable cost savings from the changes made in FY09,” he said.


Changes have produced savings and improvements in all kinds of ways ― for example, by using our telesuite facilities to reduce business travel, thus not only saving money but also reducing the time everyone spends away from home: a win-win for all.
The Project JARED team is looking for suggestions from those who know the organization best — its people. If you have often thought: “We could save a lot if only we…” now is the time to share your idea. It could be a day-to-day activity, a fresh approach to leveraging technology, an enhancement to a process, a way to change behavior that saves money―all cost-saving suggestions are welcomed.
Visit the Project JARED site to submit your ideas, learn more about the project and ask questions.

This latest plan struck at least one person as dubious and they asked the question on probably everyone’s mind:

Q: Is this just a fancy way of saying we’re going to be losing more jobs?
A: It is impossible to predict the future, but that is not the focus of the project. The organization is casting a wide net for cost savings, looking at tactical savings (printing on both sides of the paper), operational savings (streamlining the process by which work gets done from inception to completion) and transformational savings (transforming some of the ways we do business). All of the decisions we make about Project JARED will be consistent with our core values, brand and strategy.

So “not the focus of the project” should put your concerns to rest, no? And it looks like your bright idea of printing on both sides of the paper is already taken, so don’t bother submitting that one.
Let’s put our heads together gang and figure out how we can save Deloitte money. Should Barry Salzberg stop getting haircuts? Pull the plug on Deloitte University? Give up on training male employees to better understand their female colleagues?
Nothing is too crazy people. Get on this.

KPMG Advisory Has Another Potentially Awkward Meeting, Sans Dog

Thumbnail image for Thumbnail image for Thumbnail image for PomeranianSP1324.jpgIf you’ve been hanging around these parts long, you’ll remember back in the fall when Klynveldians were sitting down for their compensation discussions which gave birth to one of our favorite mascots. All professionals in the Southeast region of the advisory practice witnessed an awkward moment when the then partner-in-charge of advisory phoned in, along with his dog, to break the news to the troops that they weren’t getting squat for raises.
Well today, there’s another call down in the Southeast — the “SE Advisory Market Development Staff Update Call” to be precise — and apparently there’s more bad news. It seems that the SE advisory practice (the largest in the firm, according to one source) is a bit behind on its revenue targets for the first three months of the new fiscal year and January isn’t shaping up so well either. The actual revenues are trailing the planned targets by approximately 15%, according to slides from the presentation obtained by GC.


Sources have indicated that while there is significant pipeline revenues, as of January 11th, only ten percent have either verbally committed to an engagement or are currently being negotiated. More than one-third of the pipeline is classified as being in the “identification” stage which is largest group. Now perhaps that is a normal ratio but another slide indicated that the number of client wins are on pace to be down considerably (~50%) for the month of January as compared to the prior three months.
One of our sources indicated to us that a major problem is that “identification” of a potential client was enough to have it included in the pipeline. In other words, if your Pomeranian sniffs a Boston Terrier’s ass at the dog run and you talk shop with the owner of said Boston T, that person is more or less in the pipeline. The conversion of the BT apparently is not crucial and even if the Boston Terrier is converted to realized revenue, it was a far smaller percentage than initially estimated.
The problem, as it appears to us, is that business in the advisory practice in the Southeast could be drying up (or maybe just getting more competitive) and that conversion of potential business is slipping. It’s far too early in the fiscal year to speculate — but by all means go right ahead — about what this all will mean and if business picks up, then it will be moot. But after the shake-ups that went down in that part of the country, the pressure is most certainly on.
If you were on the call today or have more insight, discuss and get in touch.

Layoff Watch ’10: More Details on Ernst & Young

Thumbnail image for ey8ball.jpgWe have some additional details to share with you to supplement last Friday’s post on E&Y’s New Year layoffs.
While we were surprised at the timing, a source has indicated to us that IT Risk and Assurance layoffs have occurred at the firm each January since 2008. This is due to a serious drop off in utilization in the new year after high utilization in the fall months with the exception of especially in the audit heavy ITRA practices.
In regards to the audit practice, we spoke to another source over the weekend that told us that layoffs would not occur until after busy season but assured us that they are being planned.
Finally, in response to one comment asking about severance details, we were informed that the severance for those let go is a week’s pay for each year of service with a minimum of 4 weeks pay. This seems to be fairly standard (with a few variations) amongst the Big 4.
We’ve received word on some positions cut but we’re still awaiting further details so if you have any information or can provide more insight discuss below or get in touch and we’ll update them here.
UPDATE: A source has indicated that three IT Advisory managers in FSO in New York were included in the cuts.

Which One of You Was Sending Out Bogus PwC Checks?

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for pwclogo.thumbnail.jpgRight before the holidays even! The worst part of the scam is that they forged the timeless P. Dubs logo. As in the KPMG Letterheadgate case, this calls for a complete rehaul of the firm’s image. Your suggestions are encouraged. Our preference would obviously involve something around this.
Sounds like the entire firm is at DEFCON 1 so if you happen upon one of these checks, we suggest you notify someone in your office that handles these things after you take a picture of it and send it to us of course.
The firm issued a press release today giving us details about the scam, you can read it after the jump.

The checks began arriving in people’s mail boxes just before the Christmas holidays. They looked so good, they could have been real. But they weren’t.
In a new twist on an old crime, scam artists created bogus checks bearing the logo of PricewaterhouseCoopers. Accompanying the checks was a letter advising the recipients that they had been selected to be “secret shoppers.” The letters guided the potential scam victims to cash the checks at specific banks, then wire the funds to another address for use by a second “secret shopper.”
As soon as the first report about the checks surfaced, PwC’s US Security team began working with the banking community and law enforcement agencies to shut down the scam. “Besides working with law enforcement, we put all of our local offices on alert. We prepared our telephone operators and receptionists to provide guidance for anyone who might call,” said Rose Littlejohn, head of US Security. “We put all of our people on notice, in case they saw or heard anything.”
The checks were dated December 21, 2009. Because the scam took advantage of the US Postal Service, a Postal Inspector has been assigned to the investigation. Anyone who has received one of the solicitations should contact Doug Smith, Postal Inspector at (813) 281-5228. If they have the capability to fax information, they should fax a copy of the bogus check and any instructions they received with it to 813-375-8047. They should then keep the originals as law enforcement will have separate instructions for what to do with them.
“Since the first batch of checks went out in December, we suspect those recipients have either reported the issue or thrown out the materials,” said Littlejohn. “But right now there is nothing to prevent the scammers from making another attempt. We hope people will be skeptical about any kind of offer like this they receive in the mail. Meanwhile, we’ll keep trying to track down and bring to justice the perpetrators of this scam.”

Layoff Watch ’10: Ernst & Young January Edition

Confused doesn’t even begin to describe what were feeling. We are hearing tons of rumors about layoffs in the Ernstiverse this week.

We’ve heard rumors from Denver to the East-Central (fka North-Central) and New York FSO. This includes both client serving professionals and support staff. We have already confirmed that two admins were let go earlier this week in New York.

The timing is especially strange since, you know, it’s January and in some offices the mandatory hours have already rolled out. Even if it were only support staff being let go, the timing is still unheard of. Why wait until January to let people go when having cuts in November? Maybe it’s just us but if we had survived that November cut, we would have thought that our job would be safe until at least the spring.
And since the roundtables seem to be SOP you wouldn’t think they would be anything to worry about but they definitely have people talking and wondering what will go down.

So far, Ernst & Young has not responded to our request for comment.
If you hear anything about your office get in touch in with us and discuss in the comments.

What Happens When the “Numbers” People Can’t Count?

Thumbnail image for Thumbnail image for Thumbnail image for accountant.jpgThere was some quiet chatter here at GC about Ernst & Young’s closure of its Greensboro, NC office this past December, right around the Merry Happy holidays. Thanks Ernie.
This is nothing new. Smaller offices have been getting shut down for years. Years. Years.
You’ll probably find this to be a shocker but your feelings are not the main problem facing the firms due to the combination of recent closings and endless rounds of cuts. The problem is – it’s the theme of any busy season – firms finding themselves short staffed.
Many readers have commented that engagements are understaffed heading into the cold winter months. Albeit this is typically the unofficial “norm,” but slashed fees are only compounding the problem this year. The troubles of ’09 will be used as firm scapegoats for 2010. Move along, kids. Nothing more to see here.
Serious trouble is brewing for at least one Big 4 firm, however. A source confirmed that their Big 4 Beast is outsourcing work in the Carolinas to smaller regional firms because they are so understaffed:

The combination of layoffs a year ago and people leaving now that the market is turning around is causing the firm to hire outside help just to get through busy season.


Ummm. How did this happen? Is this firm (or any other firm for that matter) initiating rotations from staff “heavy” areas like Chicago and New York to cover the lapses in smaller areas like Buffalo or Greensboro? If so spread the winter cheer, because that sounds downright awful.
The public accountant’s mind is a simple one with regards to job searching:
Picture 1.png

The middle area is commonly referred to as “run through a venti latte on the client and debate.”

The market is moving ever so steadily from red to green. This time is now, and no one, not even leadership, is denying that. Firm leaders have been talking, talking and talking some more about the upswing of 2010. If they are handing out the Kool-aid, doesn’t SOMEONE take a moment to think, “Hey guys, should we really have cut so much staff six months ago?”
Someone, somewhere underestimated staff needs or overestimated staff loyalty. Or both. So now, cutting into the already razor thin fees will be the misguided expense of hiring outside help just to get by. The situation is only going to get worse in the coming months; money is starting to move, financial firms are beginning to reinvest, and jobs are going to be created and filled by your colleagues.
How can a firm’s leadership whose fundamental – and societal stereotyped – sole function is numbers be so off the mark? This is elementary, is it not?