Oh sure, anything is possible. However, on top of everyone not called Fox News calling P. Dubs the most shameless whore ever to issue a report on anything, Jonathan Weil at Bloomberg is now calling out some of P. Dubs’s (and KPMG probably for good measure) banking clients’ less-than consistent use of mark-to-whatever-the-hell-we-like.
Weil names three PwC clients (Midwest Banc Holdings, First Bancorp, BB&T Corp.) as showing loans with fair values greater than their carrying values as of June 30th. Midwest and First Bancorp’s stock prices are trading far below book value while BB&T’s stock price trades above book value.
As Weil points out, WTFK if these values are right or not? What is obvious is it seem like some banks are legitimately making a run at fair value and others are still using a dart board. Oh, and the PwC audit teams are okay with that. Nevermind comparability, Dow is above 10k bitches! Onward!
Mark-to-Make-Believe Turns Junk Loans to Gold [Bloomberg/Jonathan Weil]
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
Rumor Mill: KPMG Restructuring Plans
We’ve finally received some details on a possible restructuring at the House of Klynveld in the U.S.
According to our source, the plans were announced over the past week on a series of calls by Tim Flynn. The firm would be consolidated down to two regions, East and West and each would have a regional managing partner and one service line managing partner per region.
This would result in the elimination of one level of regional leadership and would transfer several partners into client-facing roles.
The restructuring would also include placing some partners on ‘profit improvement plans’ and some layoffs would occur over the next year. Additional staff layoffs would occur across all ranks over the next year as well.
The bad news is obvious. The silver lining, as some of our other sources have indicated, is that the Firm would be eliminating at least one level of bureaucracy that should allow partners to be more active in developing potential client relationships.
Messages left with KPMG were not immediately returned. We’ll update you with any response that the firm gives us.
If you can expand on of the details we mentioned on this restructuring, let us know, otherwise, discuss your thoughts in the comments.
Earlier: KPMG Atlanta Shake-up Makes Us Wonder
UPDATE, 4:45 pm: Regardless of this rumor, we learned a short time ago that KPMG admitted thirty-six new partners last month. Seventeen in Audit, twelve in Tax, and seven in Advisory. Congrats to the new partners! No, seriously. Good job.
Life After Big 4: Open Thread
One way or another most people move on from their Big 4 experience, regardless of practice or firm. Whether you left on on your own accord or by other means, you all have experiences of what life is like now.
Starting a career with a Big 4 firm is definitely a good way to go (yes, we said it) but shit happens and things change right?
So whatever you want to discuss: Money. Work/life. Does the Big 4 firm on the resume really impress? Did you leave and go back? If you’re still living the glamorous life in the B4, discuss your thoughts on your firm and why leaving is unthinkable. We realize that the Stockholm Syndrome is a bitch.
Dallas Mayor: Deloitte Is Definitely Moving All Its Employees Downtown
Maybe! Deloitte won’t commit to that but Dallas Mayor Tom Leppert says its a done deal.
Well, sorta: “Leppert said Deloitte has not yet signed a lease, but he’s confident the company will finalize a lease to consolidate nearly all of its North Texas operations in its existing 150,000 square feet at Chase Tower.”
Hizzoner obviously doesn’t mind jumping the gun here because he’s so psyched about all the Uncle Danglers spending their hard-earned dollars in the downtown area.
Dallas Morning News:
The average Deloitte salary is $100,000, according to a city report to the Dallas City Council Economic Development Committee obtained by The Dallas Morning News. The report estimates that Deloitte would generate an economic impact of more than $3.5 billion to Dallas over 10 years. That impact includes salaries, taxes and spending by employees and clients.
An average salary of $100k? Not bloody likely if you’re including staff and support but hey, DMN, go with it. Help us out Deloitte Dallas, is that number legit or bunk?
On another note, sorry Irving, sounds like you’re SOL on some sweet Deloitte action and Dallas sure as hell isn’t being shy about dancing on your grave. We’re sure you’ll be able to screw them over somehow. Let us know how it goes.
Deloitte may move most of its local offices to Chase Tower in downtown Dallas, mayor says [Dallas Morning News]
Earlier: Apparently $2 Mil Is Enough to Keep Deloitte in Dallas
E&Y Partners Should Work on Their Ice Breakers Prior to Talking Layoffs
The Pacific Northwest Area leaders have a town hall meeting in the Area offices. The retiring Area Managing Partner and incoming partner both show videos of each other to “introduce” them to the little people. These videos brag about how one collects ferraris (shows other partner in his ferrari at the show room) and the other shows the incoming partner’s closet full of Jimmy Choo shoes. And the best part?? It was at this meeting where they tell people (everyone from admin to partners) that they are making 5% cuts in December…And then of course they proceed to go through multiple rounds of cuts – Dec, March, June and not sure if it is over.
We enjoy an Italian sports car as much as the next guy but for crissakes, using it to segue into layoffs? Do you think they ran this script by anyone or did they just wing it? If you’ve got other stories of tawdry behavior, by all means, pass them along.
Deloitte Is Super Proud of Their 100% Free Preventive Healthcare
A source at Deloitte let us know that at least one partner thought it was pretty kick ass that Uncle Dangle was providing healthcare coverage that basically amounts to an HMO:
I got off a call where a partner seemed pretty pleased w/ himself (read: the partnership). “100% Free Preventative Healthcare” was how it was termed. I’m not sure how it affects others, but frankly under my plan, there wasn’t a difference. Just thought it was funny that a big-deal was made of it when the difference was non-existent.
More, after the jump
Text from Deloittenet:
Deloitte’s Total Rewards team worked with our national medical plans to offer 100 percent coverage of in-network preventive care to all of our program participants as of January 1, 2009. This care applies to well-man, woman, and child visits, including lab tests and other preventive screenings. With such a generous preventive care benefit in place, there is no longer a need for the Physical Exam Reimbursement Policies (Administrative Policy Release 465 for partners, principals and directors and Administrative Policy Release 266 for senior managers and managers).
By using an in-network provider through one of Deloitte’s national medical plans, you are able to receive important preventive health care benefits at no cost. A detailed description of the preventive care benefits available through each of the plans is available on DeloitteNet.
Thanks for the notification D. Save us all the trouble and just call it an HMO. It’s certainly arguable that HMOs have been shown to increase wellness but why the hell didn’t they just claim to have invented the Internet?
(UPDATE 2) KPMG Atlanta Shake-up Makes Us Wonder
Leadership changes are inevitable in any business but the reasons can be a mystery. Dismal performance? Drugs? A pool boy? All of the above??
Tim Flynn (taking a break from his caddying duties) and John Veihmeyer sent a very upbeat email to the Atlanta office yesterday announcing the new office managing partner there.
Atlanta Office Leadership
A Message from Tim Flynn and John Veihmeyer | October 13, 2009
We are pleased to announce the appointment of [redacted] as managing
partner (OMP) for Atlanta, succeeding [redacted] who has moved into a
client facing role reflecting our commitment to focusing our most
experienced Partners directly on the marketplace.
We want to first thank [redacted] for his many contributions to the Atlanta office and for his leadership roles as lead area managing partner and Southeast area managing partner for Audit. In his new role, [redacted] will be focused on developing new market opportunities, serving some of our largest audit clients and assisting national and local leadership with client care and major proposals.
[Redacted] brings more than 27 years of experience to his new role. He is currently the Global Chairman of Industrial Markets and the National Sector Leader for Energy & Natural Resources, based in Houston. [Redacted] has spent the majority of his career serving energy clients, including Duke Energy, Chevron, Schlumberger, and Spectra Energy.
A well-recognized industry speaker and thought leader, [redacted] was a speaker at the 2006 World Economic Forum meeting in São Paulo. He is also a frequent guest on CNBC’s Squawk Box discussing energy issues and is a regular contributor to energy trade magazines. Since 2003, [redacted] has hosted KPMG’s Annual Global Energy Conference, which is attended by 500-600 energy executives each year.
Please join us in wishing both [redacted] and [redacted] success in their new roles, and in thanking [redacted] for his many contributions as leader of the Atlanta office.
Tim Flynn
Chairman
John Veihmeyer
CEO & Deputy Chairman
Ohhhhh, Squawk Box. That’s a feather in your cap.
Our source told us that: “‘Moved into a client facing role’ means you’ve been demoted in KPMG speak.” We asked around and it’s not clear just what the hell that means but we’ll run with it.
If you’ve got some more information on the shake up at the Radio Station Hotlanta, let us know or discuss in the comments.
UPDATE, 2:45 PM: We’ve received some tips confirming a new Dallas managing partner and have also heard there will be some shifting around of leadership in the New York office but we don’t have many details, so please share.
UPDATE, Thursday 2:49: According to another source, Southeast AMPs for the Tax and Advisory Practices are also being transitioned into client-facing roles.
Firm Mascot Challenge: PwC
We’ll assume everybody is down with the KPMG Pomeranian and Uncle Dangle for Deloitte. If not, speak now or shut your pieholes.
There’s some resistance to the idea of famous Governor banger, Ashley Dupre, being worthy of the PwC Mascot.
Frankly, since P. Dubs has made some feel like prosties already and has also shown that, as firm, they don’t mind whoring themselves out for some scratch, the argument can easily be made that Ashley is the perfect mascot. On the other hand, the point has been made, and is duly noted, that high-priced call girls are much cooler than any accounting firm.
So you see the problem here but it’s not our decision. We’ll leave it up to you. State your submission for the PwC mascot and give a brief explanation for said suggestion in the comments.
Keep it clever people, mascots already assigned to any other team or organization will be ignored with extreme prejudice. On with it then.
Ernst & Young Has Another Vote Counting Gig
WAY more prestigious than the Emmys mind you. No, E&Y has now managed to snag the coveted honor of counting the votes for the inaugural NASCAR Hall of Fame class.
The other firms are, no doubt, insanely envious of E&Y for landing this prestigious gig but we have several important questions:
• Will the E&Y auditors have to memorize the winners and all of their sponsors?
• Shirts (let alone tuxedos) seem a little formal for a NASCAR event so what will the auditors wear?
• Instead of simply handcuffing the results to their wrists, will the auditors need guards armed with Desert Eagles to keep the crazies from highjacking the results?
• Instead of Dr. Horrible, who will make a special appearance to distract the audience during the explanation of the vote tabulation? Jeff Foxworthy seems too obvious.
• Will E&Y be paid in Bud Light as it seems to be accepted as legal tender in these circles?
Let us know your thoughts on E&Y’s new engagement and your ideas on responses to the questions posed above.
Hall of Fame Announcement Set For Wednesday [FanZone Sports]
PwC pretty much admits that they are…
…whores for the insurance industry.
The firm issued a statement today after nearly every news outlet called them out as corporate trollops after the release of their report on the Baucus healthcare reform bill yesterday.
Per Politico:
America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
· Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.· An excise tax on employer-sponsored high value health plans.
· Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
· New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
“The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”
It seems as though P. Dubs is trying to clarify that, “We know we’re whores. We even said so in our report. We’re the classy type of whore though. We won’t do anything unless the money is right but we are good at pleasing our clients.”
What we’re wondering is why PwC would go to the trouble of putting out a report that they knew was one-sided and then their client dances around like the report was brought down by Moses from Mount Sinai. Maybe the firm wasn’t expecting such an enthusiastic response.
WTFK but something tells us that AHIP may not be enjoying their PwC Experience as much as they were yesterday.
PWC statement — Not so helpful for AHIP [Live Pulse/Politico]
‘The Global Firm’: Reality or a Marketing Gimmick?
In what amounts to another example of the Big 4 not having any control over their “global” operations, a new scandal has come up in Sri Lanka that involves both PwC and E&Y. According to the Sri Lankan Sunday Times the firms have “forfeited their reputations” in that country after working on a privatization transaction of a public enterprise.
The article is a tad on the long side so we’ll give you the highlights:
• Unauthorized preparation for the sale of SLIC – Both firms helped move the transaction along without the required approvals and questionable independence. Bureaucracy is a pain in the ass anyway.
• Manipulation of Accounts – Both firms were either producing or working with shoddy numbers and then weren’t exactly upfront about it.
Continued, after the jump
• Conflicts of interest – “Deva Rodrigo, a senior partner of PWC, was also a member of the Steering Committee that selected PWC as consultants on the transaction. He supervised their work and authorized payments to them while he simultaneously worked for them himself and received a share of such fees as a Senior Partner, PWC Sri Lanka…The report stated that [E&Y] continued to be the auditors of SLIC after the purchasers took possession, management and control on April 11, 2003. At the same time, E&Y was committed to audit SLIC accounts on December 31, 2002 and April 11, 2003 for the government, i.e., the sellers. The report further states that because of its representation on the Steering Committee, PWC was aware of the misconduct of E&Y.”
This less than flattering news for P. Dubs and E&Y follows the snoozer raids of the E&Y offices in Hong Kong and the PwC and KPMG offices in Reykjavik, Iceland. Regardless of the lack of dramatic moments in these raids, we can safely say that the firms would rather that they make news by issuing less than objective reports rather than raids and scandals involving blatant chicanery by their employees.
Dennis Howlett points out that the firms continue to market themselves as “global” firms when it’s pretty obvious that there is very little control over what goes on in each individual country: “Message to the Big Four: stop pretending you are in control of the global networks. Either do the job properly or acknowledge that in reality it’s all a PR stunt.”
Does DH have a point? Are firms just faux-global? Sure you can do a rotation, new associates can get their own rooms in Rome, and you can send a prank email to a partner in Sydney from an intern’s laptop but is does that mean they are global organizations or just have money to burn?
Make your case for or against the ‘Global’ mantra in the comments.
PWC and EY heavily implicated in unlawful privatization [AccMan]
Unlawful privatisations in Lanka – Role of the Auditors [Sri Lankan Sunday Times/FT]
Don’t Sulk Big 4, Things Aren’t That Bad
Regardless of what accounting firms may say about their current troubles because of “tough economic conditions”, lots of these “conditions” can be pret-tay good for business.
Reuters reports that several companies, including your favorites, have pulled down more than a fair amount fees related to the “asset protection scheme” that insures risky assets held by Royal Bank of Scotland and Lloyds Banking Group.
KPMG (£6.5M), E&Y (£4.3M), and PwC (£4.2M) were the top earners assisting the Brits with their version of the magic money printing machine. Oddly, Deloitte is no where to be found in this article but maybe that’s got something to do with the £59 million they received from RBS. That seems to make up for it.
Stateside, E&Y is pulling down $60 million for its work with the New York Fed on AIG which makes the RBS/Lloyds fees look like a lemonade stand.
Since misery loves company, it might be poor taste for any firm to be excited about the money that is rolling in. So nevermind our tendency to focus on the positive. Go back to feeling sorry for your slumping revenues.
KPMG Earns Most From Bank Asset Plan [Reuters]