Category: Big 4

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

Deloitte Changes Its Mind on Kohlberg Capital’s Ability to Value Its Investments

Thumbnail image for Thumbnail image for DTa.jpgA friend of GC pointed us to this 8-K filed by Kohlberg Capital Corporation yesterday. Unless we’re misinterpreting this, there are some seriously awkward conversations going on between Deloitte and Kohlberg right now (our empahsis):

Deloitte issued an unqualified opinion on the Company’s December 31, 2008 financial statements, which was included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2009. The Company is not aware of any allegation or belief by Deloitte that the information provided by the Company to Deloitte at the time of the preparation of the Financial Statements regarding the Company’s valuation methodology and procedures was incomplete or inaccurate or omitted any information requested by Deloitte at such time. On December 10, 2009, the Company and its management were advised by Deloitte that (i) the audit report issued by Deloitte accompanying the Company’s financial statements for the fiscal year ended December 31, 2008 in the Company’s Annual Report on Form 10-K for such fiscal year and (ii) Deloitte’s completed interim reviews of the Company’s financial statements for the interim periods ended March 31, 2009 and June 30, 2009 in the Company’s Quarterly Reports on Form 10−Q for those respective periods should no longer be relied upon because Deloitte had changed its position with respect to the appropriateness of the methodology and procedures used by the Company under SFAS 157 to value the Company’s investments as of the end of each of those periods and, as a result, the Company has been informed that Deloitte now believes, based upon such changed position and the additional information provided to Deloitte by the Company following Deloitte’s internal inspection process, that such Financial Statements contain material misstatements with respect to the value of the Company’s investments included therein. Accordingly, the Financial Statements should not be relied upon until the foregoing matters are resolved.

This filing followed up Kohlberg’s filing of an 8-K and form 12b-25 on November 9th to let everyone know, um, yeah, that Q is going to be late because Team D wants to take a look at this 157 stuff again. That was probably annoying enough.
But nowwwww it looks like the audit team spent the last month realizing that the pooch had been screwed on the last two 10-Qs annnnd last year’s 10-K. So yeah, don’t pay attention to the those filings. The one bright side to this is that Kohlberg had the sense to not file an unreviewed Q.
If you’ve got details on this, definitely get in touch with us, we’d love to know how the partner broke the news and how Kohlberg took it. The 8-K certainly doesn’t do that conversation justice.

Deloitte’s Latest Survey Reminds Everyone That Americans Like Vedging Out

couch.jpgDeloitte threw their “State of The Media Democracy” survey together for the fourth year in a row, and man are we glad they did. This latest opus informs us that TV is 34% of Americans’ favorite form of media and that it ranks in the top three for 70% of Americans. Viewing hours increased to almost 18 hours a week, up two hours from the same study last year.
The same survey also states that 60% of the U.S. Households have a gaming console including 70% of GenX households. So for many of you, after a long day of opining and complying, you like to go home and pwn some noobs.
Forget — for a minute — about what this reveals about Americans in general. What’s really important is that Deloitte is going out of their way to perform a survey annually that will remind all of us how lazy we are.
This is almost as helpful as as the reports based on World of Warcraft analysis. Keep up the good work, D.
Deloitte “State of The Media Democracy” Survey: Recession Intensifies America’s Love for TV [Deloitte.com]
Study: Interest in TV viewing on the rise [The Hollywood Reporter]

KPMG Prolongs the Agony by Releasing Just UK Revenue Results

Thumbnail image for 200px-KPMG.svg.pngThose of you that are dancing on one leg for KPMG’s global revenue results are going to have suffer with the anxiety for awhile longer. We know, we know. We’d love for the whole reporting season to limp into history but we have yet to hear Tim Flynn put his positive spin on this year’s revenue results.
Oh sure, we’re getting teased today by the UK firm and its European parent but this just prolongs the agony:

The UK firm saw revenues fall by 1.6%, to £1.63bn for the 30 September year end.
Profits fell 1.3% to £382m from £387m.
KPMG Europe’s revenues were €3.5bn, a 0.4% decrease on the previous year.
Its joint chairmen said the results were a “creditable performance”.
“We might have hoped for better economic conditions in our second year as a merged firm but rather than put our expansion plans on hold we have continued to pursue a whole range of strategic initiatives that will shape our performance over future years,” said John Griffith-Jones and Rolf Nonnenmacher.

Despite the disappointment Even with this creditable performance, Europe wasn’t without its problems, seeing the tax revenues drop 12%. No worries though, they promise to pull their weight 2010:

After suffering a 12% fall in tax revenues, Griffith-Jones said the service line was set to hold firm with the rest of the business next year.
“We resized the practice, and are fine where we are, [it’s performance] should be much more in line with the rest of the firm – it’s taken the pain.”

That’s the spirit! Lemons into lemonade. Now make with the band-aid ripoff method on these global results. Nobody’s expecting the world. Dump the press release, get a pep talk from TF and get back out there Kylnveldians. Here’s to 2010!
KPMG UK chief lines up modest 2010 growth [Accountancy Age]

KPMG Has to Be Pretty Happy with the Golfer They Chose to Sponsor

Phil-Mickelson_Tim Flynn.jpgAs we mentioned yesterday, Accenture is on the hunt for a new poster boy. While we speculated that poaching Phil from the House of Klynveld as a possibility for Accenture it’s more likely that the spotlight will be falling on Mickelson and his KPMG cap (black or white, depending on the mood).
Although Phil won’t be dancing on Tiger’s grave, Tim Flynn may have been quietly making the rounds at 345 Park high fiving anyone and everyone at work on the Monday after Tiger’s crash.
If you’ve got any thoughts on how TF celebrated (sweater vests for everyone!) discuss in the comments.

An Open Thread on Accountants’ Salaries at the Big 4: What Do You Make?

money.jpgWe received a request over the weekend to discuss everyone’s favorite topic: money.

This is a great idea on many levels since A) it’s been quite some time since we’ve dedicated a post to the subject B) there are plenty of newbies that have started since then but mostly C) knowing what everyone else is making is your God-given right.

Hopefully, this new thread will get everyone up to speed (or just completely pissed off on a Monday) and ready to run through brick walls in 2010.
In the comments, provide the following:
• Salary without bonus, bonus amount
• Level
• Practice (audit/tax/advisory), practice subgroup
• Firm, city/region
• Other notes/complaints
The reader requesting the thread, was kind enough to provide their details:
• $52k, $3k (in start year, bonus was a whopping $0 this year)
• Associate 2
• Audit
• PwC, Northern California

This is an equal opportunity post so regardless of your firm, get your numbers out there (this means you: GT, BDO, RSM/M&P, Crowe, Moss Adams, anyone else).

UPDATE, Tuesday: Thanks for all the input so far. Feel free to email us if you want to give us more details on your salary or ideas or other related thread discussions.

Other money related discussions:
Problem of the Day: Do You Quit Your High-Paying Job with the Idiot Boss?
Satisfied with Your Salary?
Problem of the Day: Your Staff Makes the Same Money As You (Maybe More)

Layoff Watch ’09: Deloitte

We received word late yesterday about two audit senior mangers in the Tampa office being shown the door yesterday. This makes us wonder if more professionals in the senior manager “parking lot” will take this is as a sign to either move on or will hold out hoping to eventually get a seat at the big table.
There doesn’t seem to be any kind of uniform method to the Deloitte’s cuts so if they’ve recently gone down at your office, let us know.

Does This Mean We Aren’t Going to Find Out Who’s Sleeping Their Way to Partner?

Dammit people, what’s with the amateurs? If you’re going to superficially judge your co-workers, wouldn’t common sense tell you to not to use a work email address?

Holly Leam-Taylor became the latest victim of a viral email craze when her light hearted message to colleagues spread like wildfire across the internet.

In the email, entitled Deloitte First year analysts Christmas Awards, sent on December 8, Ms Leam-Taylor asked her female colleagues to vote on which men in the office they considered most attractive.


A terribly disappointing turn of events, since it was all in good fun:

Miss Leam-Taylor, who studied at Warwick University before landing a place on the prestigious Deloitte graduate trainee scheme, said: “Obviously I never imagined the email would reach this level of awareness. Most people have recognised that what I wrote was in good spirit, but in retrospect I realise it probably wasn’t the best idea.
“It was my choice to resign and I will not be providing any further comment.”
Speaking at the family home in Staines, Middlesex, her father Andrew said: “She is very fed up about the whole thing.”

She’s fed up? What about the rest of us? We were expecting RESULTS.

Pictures, STD reports, the works. Now what the hell are we supposed to do? Is anyone willing to pick this up where poor Holly left off? If you do pick up the torch for crissakes, use a personal email address.

We cannot express our devastation further.

Analyst quits over embarrassing email [Telegraph]

Deloitte Tops BusinessWeek’s ‘Best Places to Intern’ List, KPMG Gets the Silver

Thumbnail image for confidence.jpgAll right Deloitte. What are you paying BusinessWeek? Seriously, you take the “Start Your Career” crown and now you’re just getting greedy with the arbitrary magazine list championships. You’re risking backlash if you continue to dominate:

Our ranking of the best U.S.companies for undergraduate internships highlights employers who have put together an outstanding experience for students. Accounting firm Deloitte tops our list, followed by rivals KPMG (No.2) and Ernst & Young (No.3).The last of the Big Four accounting companies, PricewaterhouseCoopers, comes in at No.5, right behind consumer goods giant Procter & Gamble.


This is getting ridiculous BW. Four out of the top five spots go to Big 4? Do they really have an unbreakable stranglehold on your list methodology?

To compile our list, we judged employers based on survey data from 60 career services directors around the country and a separate survey completed by each employer. We also consider how each employer fared in the annual Best Places to Launch a Career, our ranking of top U.S. entry-level employers released in September of each year.

So, the employer’s own surveys are judged and you consider a list previously issued by you? Unless we’ve been misled, those employer might not have gone so well. As for considering your own list to make a new list, does that mean that this is basically the same list but with a different name?
Putting the methodology hocus-pocus aside, we notice that while Deloitte took home the gold medal, KPMG got the big talk up for their global rotations:

Two years ago KPMG realized it had to make a substantial investment in its internship program if it hoped to woo top students from larger consulting and accounting firms. So the company decided to offer interns an opportunity to gain valuable overseas experience. KPMG lets student interns spend four weeks in the U.S. and four weeks abroad. “It’s extremely competitive [to recruit top students], and this is a differentiator,” says Blane Ruschak, executive director of campus recruiting at KPMG.
A chance to work overseas is precisely what appealed to Andrew Fedele, 21, an accounting and economics double major at Pennsylvania State University. “I was sold pretty much when I first read about [KPMG’s] global internship program.” He spent four weeks in Chicago and four weeks in Johannesburg, South Africa. “South Africa has just such an interesting history. To go there and live with the locals and work with them was really exciting.”
What did KPMG get in return? Exactly what it hoped: Fedele accepted a full-time job almost immediately after KPMG made its offer at the end of the summer.

The article does manage to point out that “KPMG…hired nearly 900 fewer entry-level employees this year. But 91% of those full-time hires were former interns, whereas only 71% of new hires in 2008 were interns.”
The trend of fewer non-interns getting hired on at Big 4 (in this case KPMG) firms was something that we touched on in August, although BW doesn’t bother mentioning that it’s most likely due to the slashing of the firm’s hiring budgets.
We can’t give this latest meaningless index any more thought. If you’ve got an opinion on the latest jumble of the Big 4 in a BW list, leave them in the comments.
Best Places to Intern [BBW]

At One Point, Ernst & Young Was Handing This Stuff Out

Today in money well spent news, we bring you items from a care package that was sent to GC from a friend:
E&Y_DonKing.jpgEY_DK.jpg
Can anyone explain the purpose of this particular item? More pics after the jump.


SUN.jpgEY_Sun.jpg
This item also has no discernible use.
pen_hair.jpg
Um.
Anyone want to venture a guess on how much money is spent on this stuff? It’s got to be enough to foot an open bar. If you have more useless stuff that makes you question your firm’s spending habits, kindly pass them along and we’ll throw up the most useful items.
UPDATE: The most recently submitted ball of useless:
EY Ball of Useless.jpg

Is Low Bidding by Your Firm Going to Bite You in the A$$?

Sale.jpgBy now it’s no secret that accounting firms are getting all Wal-Mart with their bids/fees in order to drum up desperately needed new business and keeping current clients happy.
Offering or renegotiating lower fees, while an excellent “client service” tool, can cause all kinds of problems with staffing and the feasibility of engagements.


If you’re working on a small engagement with a tight budget, things could tricky (read: impossible) to reconcile mandatory hour work weeks to the budgeted time on your engagements.
One reader is curious as to the repercussions of all this:

[They are] low bidding jobs, taking audit clients at rates < $100/hour when average rates used to be $150 - $250/hour. Tell me they won't dump those clients when the economy turns around. Or have people eat hours on the jobs. They are desperate for work right now.

Those numbers are relative of course but it does make one wonder how this will all pan out long term. As we’ve noted, if it gets to the point to where there’s simply not enough money coming in the door, closing up shop isn’t out of the question. If you’ve got concerns, thoughts, complaints, etc. on how this latest trend will affect you and your office, discuss them in the comments.

Rumor Mill: Ernst & Young Closing Greensboro, NC Office

From a source:

Greensboro, NC office is being shut down. Admin staff are being let go. Most client serving have been given the option to transfer to Raleigh or work remotely.

We tried calling the Greensboro office but couldn’t get through to anyone and E&Y’s national PR team hasn’t returned our emails yet. This closing would follow the Manchester office closure that we initially reported on in October. We’re trying to get more details on the closure date, numbers, etc.
In the meantime, if you have more information on this rumored office closing or others get in touch with us and discuss in the comments.
UPDATE, 12/11: Another source has confirmed the closure. We’ve also learned that the Greensboro has in the nabe of 70 – 80 client service professionals. E&Y is still mum. Keep us updated.
Earlier:
Are Other Small Big 4 Offices at Risk of Closure?