Category: Big 4

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

If Failure = ‘Chaos’, What Does Chaos Look Like?

Riots.jpgThe British government has denied a change in the law there that would limit audit firms’ liability. The Big 4, who seem to enjoy a far more prestigious and influential existence in Britain than in the U.S., lobbied for a change to the law but it was ultimately dismissed by the British Business Secretary.
The British government cites existing law that would allow companies to reach agreements with their auditors to limit their liability.
Continued, after the jump

Under present company law, directors can agree to restrict their auditors’ liability if shareholders approve; however, to date, no blue-chip company has done so. Directors have seen little advantage in limiting their auditors’ liability, and objections by the US Securities and Exchange Commission (SEC) have also been a significant obstacle.

Ahh, the SEC, exerting its far-reaching influence another over sovereign government, not to mention their stellar track record . This does not amuse in the UK:

Peter Wyman, a senior PwC partner, who was involved in the discussions, said that the Government’s lack of action was disappointing. He said: “The Government, having legislated to allow proportionate liability for auditors, is apparently content to have its policy frustrated by a foreign regulator.”

The firms are lobbying, not solely for their own survival, dammit, but the sake of everyone, “They warned that British business could be plunged into chaos if one of them were bankrupted by a blockbuster lawsuit.”
We’re not really sure what ‘choas’ would entail. Hank Paulson had his own version of financial Armageddon but we hardly think that’s a plausible scenario if a Big 4 firm were to fail.
Perhaps there would be an army of accountants roaming the streets in zombie-like states offering their excel expertise to anyone that would accept it. While this is a completely horrifying scene, we’re skeptical of true ‘chaos’.
If you’ve got your own visions of chaos in the event of a large firm failure, describe it in the comments.
Audit firms left unprotected against claims of negligence [Times Online]
Also see: No legislated cap on audit liability [AccMan]

Some at Deloitte Aren’t Too Concerned About Accountant Stereotypes

world-of-warcraft-noob.jpgLook. We’re not saying that World of Warcraft is geeky. We’re sure that it’s a very challenging game and some very talented people put it together and continue to work on it. There just seems to be a particular segment of the population that is repeatedly associated with the game. So for the purposes of this discussion, World of Warcraft qualifies as geeky.
We’re all familiar with the reputation of accountants and people that work for the Big 4, so there’s not much to discuss there.
Continued, after the jump


Considering these two factors, why in the name of everything that is good and holy would Deloitte decide to put out an in-depth analysis on “performance improvement” that incorporates said game?
For all impractical purposes, we’re going to ignore any valid conclusions that the authors came to. That’s not what this is about. This about the authors cementing the stereotype of bean counters being not just geeks, but now super-geeks.
Don’t you recognize what we’re trying to accomplish here? There is serious cause for concern. Get someone on this before we get all Glenn Beck on your ass.

The collaboration curve: Exponential performance improvement in World of Warcraft [Deloitte]

PwC ‘Prostitute’ Hopefully Won’t Spend it All in One Place

Thumbnail image for prostie2.jpgDammit people, if someone is going to go to the trouble to sue the #1 company in all of Great Britain for every bloody list that can possibly be put out could we possibly get a more anti-climatic ending?
Mihaela Popa, who was obviously unaware that accountants are made to feel like prosties all over the world on a daily basis, hence, why the f*ck are you so special, wound up receiving £750 from a tribunal, according to the Romanian Times.
More, after the jump


The court:

“We find that in no way whatsoever did the unlawful victimisation either prevent Miss Popa from obtaining employment or cause her to lose employment. There was no loss of opportunity in this case. It is simply a case of injury to feelings.”

Maybe we’re a little shrewd but repeatedly seeing your name in the British press next to ‘whore’, ‘prostitute’, and ‘communist spy’, and then for a court to basically say you’re thin-skinned, all for £750 seems totally worth it.
Earlier: What if Everyone Sued Their Employer for Being Made to Feel Like a Prostitute?

KPMG Is Probably Happy This Guy Left Prior to Getting Really Creative

charlie-and-the-chocolate-factory-20050715092008864.jpgA former KPMG partner has pleaded guilty today to conspiracy charges related to tax shelter scheme.
According to the WSJ, “[Robert] Pfaff is currently serving a 97-month prison sentence after he and two others were convicted on tax evasion charges last year in a case once billed as the largest tax-shelter fraud case in U.S. history. In that case, prosecutors had alleged that Pfaff and another former KPMG employee left KPMG in 1997 and formed an investment adviser known as Presidio Advisory Services, which was little more than a ‘tax shelter mill’.”
Doesn’t ‘tax shelter mill’ sound like a wonderful place of capitalistic creativity and entrepreneurship where things just magically happen and you don’t why or how? Sort of like a financial Charlie and the Chocolate Factory? The kind of place where you wish you worked?
Ex-KPMG Tax Partner Pleads Guilty In Tax-Shelter Case [WSJ]

(UPDATE 4) KPMG Layoffs Follow-up

There are several cities where we can confirm layoffs but total numbers are hard to come by and KPMG is not returning our calls/emails at this time. Here are cities that we definitely know got hit:
• Chicago – At least five in Int’l Tax. At least one in financial services tax.
• Denver – Transaction Services
• Kansas City – Six to eight in Tax
• Houston – Transaction Services
• San Fran – Five in Fed Tax
• LA and OC – Several comments report ten to twelve in tax for LA, five for OC
• DC/Tyson’s Corner/McLean – Between five and eight total in tax and advisory.
• Silicon Valley – Thirteen total. Five to Seven Mostly in Tax, possibly some in EVS and one in Transaction Services.
• Seattle and Portland – Two in Tax for each
• Salt Lake City – Three in Tax
• Detroit – Three to five in Tax
• Jacksonville, FL – Two in Tax
• New York – Three in the transfer pricing specialty group in the tax practice. Three in the real estate practice. According to our source, these were performance performance related.
• Boston – Two in Fed Tax and one in M&A
• Nashville – Two in Tax
• Tampa – Two in Tax, one manager and one SA
We haven’t been able to confirm much out of the New York office, although it sounds as though Transaction Services has had some cuts. If you’ve got new details on any city, let us know.
UPDATE: See updates above. Altogether it appears to be over thirty-five in the west alone. Continue sending us updates.
UPDATE, Thursday, 11:54 am: Information is still crawling in. We heard that the number of nationwide layoffs for Advisory was 50, including 20 in the NY/Boston offices but we’re still waiting on more information. Continue to send tips in and make sure you note which office you’re in. Oh, and apparently the Dallas office needs SA’s in audit.
UPDATE, Friday, 12:30: Still a few tips coming (see updates above) in but it seems the worst (hopefully) is over.
UPDATE, Monday 3:04 pm: Just a couple more updates above for Nashville and Tampa.

E&Y: This Stuff Is So Important That We Can’t Let You Be Distracted By Regular Work During the Week

Late November is typically a time of year when most of you can coast a little bit. Oh sure, some of you certifiable types are still working like your miserable lives depend on it (and probably not charging the time) so we’ll ignore you for this particular post.
We learned yesterday that the New York and Philadelphia offices of E&Y are apparently so strapped for time during the eleventh month that the annual accounting & auditing update has been scheduled for the 21st which is on a…wait for it…Saturday. That’s EVERYONE, staff through partners.
Now maybe there’s a perfectly good explanation for this odd scheduling. Perhaps the rulers of the Ernstiverse aren’t down with the whole day of rest thing. Or they figure since you’re getting two days off the following week, your ass is lucky that you’re not working Sunday too. Whatever the case may be, E&Y seems to be good at making promises so don’t make plans.

Layoff Watch: KPMG

The Chicago office is the first to report having the sit-downs. Five professionals in one of the specialty tax practices at all levels except partner. We’ve seen several comments from people that have received emails but we haven’t received any confirmation and we’re still waiting to hear back from KPMG.
If you have severance details, number let go, or other information, send to tips@goingconcern.com or discuss in the comments.

Rumor Mill: KPMG Layoff Started Early in Philly

Not that Klynveldians need reminded but tomorrow is the rumored next round of layoffs. This time its rumored to be the tax practice and perhaps the advisory practice as well making cuts.
Someone in the Philadelphia office got their call earlier than planned according to a tip we received:

…one associate who received a phone call at 3:00 PM letting her know that her services were no longer needed. She was initially told this would likely happen on the 21st, but for some reason, the powers that be thought it more appropriate to call someone on the 15th

If you’ve got details on your office or if you have received a request for a meeting, let us know and we’ll continue to update you as we hear more.

Somehow Deloitte Gets Roped Into a Chicago Political Scandal

Rod Blagojevich.jpgBig D is probably just a pawn in the whole game but it serves as a nice example of how Illinois political tomfoolery touches just about anyone and everyone.
And Rod Blagojevich is just ridiculous and not relevant for this story but his picture seems to work here, so deal with it.
A criminal investigation into Cook County Board President Todd Stroger that started with questions surrounding the hiring, promotion, and firing of a busboy. Stroger then fired his own cousin, “the county’s chief financial officer amid questions about her dealings with [Tony] Cole.”
Cole is said busboy who must have made a move on Stroger’s cousin but enough speculation. The investigation has now grown wider as prosecutors have now subpoenaed Deloitte.
More, after the jump


Chicago Tribune:

Prosecutors have ordered Deloitte & Touche LLP, the county’s auditors, to turn over “certain documents” pertaining to the 2008 audit of county finances, according to a memo from County Board Finance Committee Chairman John Daley (D-Chicago), who also heads the Audit Committee. Deloitte personnel “may serve as witnesses to a current grand jury investigation,” according to an attached letter sent to Stroger from Deloitte’s Tracey Guidry.

It should be noted that John is the brother of Richard, the Mayor who was elected around the time when the Cubs last won the World Series.
The only word on the documents are that they were used in the ‘customary preparation’ of the audit, according to the Sun-Times.
Safe money is on at least one resignation/removal from office and a small fortune being discovered to have passed through various channels of the City Hall.
Todd Stroger: Probe expands into Cook County Board president’s hiring of ex-busboy [Chicago Tribune]

E&Y Partners Need Pachyderm-like Memory for Counting Emmy Ballots

christina hendricks.jpgToday in dorks in tuxedos news, E&Y is finishing up their counting of the votes for this weekend’s Emmy Awards and hopefully they can handle it.
From the press release:

“We work very hard to safeguard the entire voting process and take the appropriate measures to preserve the accuracy and confidentiality of the awards,” explained Andy Sale, Ernst & Young LLP Lead Partner for the 2009 Emmy Awards. “Our team uses a combination of technology and traditional hand-counting methods to deliver accurate results.”

The technology methods must be terribly advanced for this complex engagement and since some partners can’t even send email, we’re a little concerned. Especially since three people memorize the list of 109 winners.
Plus, since this the 21st time E&Y has done the awards, we’re assuming there will be jager shots before, during, and after the show. Not only will this not help with the whole memorization issue but it could also jeopardize the envelope handoffs and projectile vomiting will blow whatever slim shot they had at hooking up with Christina Hendricks.
Good luck E&Y. Don’t f*ck it up. And if you have second thoughts on sharing results early, you know how to reach us.