Category: Big 4

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

PwC Basically Says That the Lehman Brothers Bankruptcy is a Trainwreck

trainwreck.jpgIf you find yourself out of work but are willing to endure several sleepless nights across the pond, PwC in the UK may need some help with the administration of Lehman Brothers.
More, after the jump


Reuters, via NYT:

PriceWaterhouseCoopers, which is working with over 100 companies, mostly in the UK but also in continental Europe, said on Sunday: “We’re dealing with a large number of entities and therefore the claims could be as much as $100 billion.
“These claims are exceptionally complex and we anticipate a large amount of further work in dealing with (them).”
A significant amount of the claims arose as a result of guarantees issued by the parent company to its subsidiaries, the administrator said.
PwC said it had worked with administrators in other affiliates to understand Lehman’s accounting system so a standard approach to the reconciliation of inter company balances could be agreed.
“If this can be achieved then it should reduce the likelihood of affiliates suing each other in pursuit of amounts that are owed between the different Lehman estates,” it added.

Not sure what kind of expectations Lehman’s creditors have but we’d encourage a cynical outlook.
Lehman Claims Could Reach $100 Billion: PwC [Reuters via NYT]
Lehman Bankruptcy Won’t Be Pretty [JDA]

Rumor of the Day: Deloitte Snagging Chrysler Audit from KPMG?

chrysler1.jpgMaybe figuring that bankruptcy means a fresh start with everything, we received a tip that Chrysler is dumping KPMG for Deloitte as their external auditors:
“it was announced to KPMG Detroit employees late yesterday…via voicemail or conference call”
Could be the reason the Green-dots in Detroit were rumored to be getting raises but WTFK.
Right now we’ve reached out to all three members of this love triangle and only Deloitte has gotten back to us and could not confirm or comment.
If you’re at Radio Station or the D in Detriot and have details on this, let us know. We keep all sources anonymous.

Rumor of the Morning: E&Y SoCal Layoffs

Received word late last night that layoffs went down out west yesterday. According to our source, the breakdown is as follows:
• Two in LA
• Two in Irvine- tax (one staff 1)
• One in San Diego – tax (staff 2)
• A few in Vegas- Audit only
We reached out to an E&Y spokesperson, who declined to comment.
Our source says it was performance based but that particular reason has been a matter of debate for some time. If you’ve got your own theories, discuss in the comments and send us any more details if you’ve got them.
Here’s hoping that Ern isn’t getting warmed up…

More KPMGers Have Their Labor Day Plans Put in Jeopardy

This time it’s San Fran:
See the text after the jump

Dear Senior Managers, Managers, Senior Associates and Associates,
Thank you for your hard work and continued commitment to the firm. As you know, we continue to do everything reasonably possible to achieve our chargeable hour goal for the remaining fiscal year. While we have made progress toward achieving our collective goal, there remains a gap between where we are and what we need to achieve to give ourselves the best chance of meeting our forecast for the month of September.
In order to close this gap, we are increasing the scheduled chargeable time for each senior associate and associate in the month of September to 50 hours per week (average of 10 hours per day). Teams already scheduled at 10 hours per day or more will remain as scheduled. We ask that each engagement team does its best to find meaningful work to fill this additional chargeable time. If seniors and associates are unable to identify meaningful work for themselves or their team, they should contact their engagement partner or manager to discuss ideas for utilizing this time. This increase in chargeable time has been discussed with and is supported by the engagement partners on your accounts.

Any idea what qualifies as “meaningful work”? Discuss in the comments.

Barry Salzberg Has Found Someone That Wants His Job

small salzberg.jpgA ghostwriter Dr. Phil has gone and granted our request for Big 4 CEOs to tread into the blogosphere. He’s managed to find time away from making awkward remarks about diversity and giving faux-advice to the President on healthcare to do a puff piece over at Fortune called “The value of volunteerism”. Basically, he’s talking up Deloitte doing skill-based volunteerism, which we think might involve auditing for free but we’re not exactly sure.
We’ve presented the opening paragraph for your enjoyment:
After the jump

Recently, I was sitting with several dozen inner-city teens, talking with them about college and careers. It was a free-wheeling conversation. I was peppered with questions-including, “How can I get your job?”

Dr. Phil is out there. He’s free-wheeling with inner-city teens. He’s blogging about it. He’s talking up the Big D:

Our company, Deloitte, recently conducted a survey on corporate volunteering…only 16% of companies offer skills-based volunteering as an option for employees. Only one out of six…Given the obvious need out there and also given President Obama’s impassioned call for national service, we’ve gone way beyond surveying about volunteerism. We’ve pledged $50 million in services-that’s right, $50 million worth of our employees’ time

So the message here appears to be, “We’re Deloitte. We’re out here kicking ass at volunteering because the President impassionately called us to. $50 mil worth. THAT’S RIGHT. Why aren’t you?”
Not sure what part Salz has played in all this other than faux-writing about it but if you’ve got some thoughts on his stab at taking credit for other people’s volunteering, in the blogosphere, we’d invite you to share.
Guest Post: The value of volunteerism [Fortune]

Rumor: Deloitte Motor City Edition

mustache-ted-nugent.jpgThe last place we would ever expect to get good news from is Detroit. Not that we don’t love Motown (Eminem, The Nuge) but let’s face it, things are not good up there.
So when we got a tip that raises for Deloitte audit were happening in Detroit, we just couldn’t believe it. Especially after all the talk last week that nothing but disappointment was being handed out.
Maybe it’s just certain audit prodigies getting the love, which was speculated, but that’s why we’re checking with you all. Any specifics, fire away or discuss in the comments.

Gold Star of the Day: Deloitte

DTa.jpgBrace yourselves, we’ve got a positive story about accountants, specifically auditors. Taylor, Bean, & Whitaker, filed bankruptcy on Monday after some strange goings on in the past month between the lender and the purchaser of its loans, Colonial Bank.
More, after the jump


The collapse came, at least partially, due to some very pesky Deloitte auditors who were calling TBW on their shenanigans. Per the WSJ:

Edward Corristan, the Deloitte & Touche LLP partner who headed the audit, was uncomfortable with the way Taylor Bean was accounting for foreclosed properties, according to a court filing and people familiar with the matter…Deloitte believed that employees of Taylor Bean and Colonial “had engaged in potentially inappropriate communications” about accounting for the foreclosed homes, according to a filing by Taylor Bean in connection with its bankruptcy case. With Ginnie Mae’s deadline for filing an audited financial statement approaching, Taylor Bean agreed to hire the law firm Troutman Sanders LLP to investigate Deloitte’s concerns. Meanwhile, Deloitte suspended its audit.

When TBW missed their deadline for filing with Ginnie, they had some explaining to do:

That task fell to Paul R. Allen, a former Fannie Mae executive who had served as chief executive of Taylor Bean since 2003…On July 6, Mr. Allen wrote a letter to Ginnie stating that there were no unresolved issues between Taylor Bean and Deloitte, according to the court filing. The letter hadn’t been reviewed by Mr. Farkas, Deloitte or Taylor Bean’s legal counsel, the filing said…Ginnie then met with Deloitte, learned of its concerns and decided that Mr. Allen’s letter was misleading. On Aug. 4, the Department of Housing and Urban Development, which oversees Ginnie and the FHA, suspended Taylor Bean’s authority to make or service FHA-insured loans. HUD said Deloitte had found “certain irregular transactions that raised concerns of fraud.”

Deloitte declined to comment, as it is their policy not to, on client matters. Okay but we’ll say, pret-tay, pret-tay, prety-tay good job Deloitte. Our faith has been restored. For now.
For Lender, a Fast Fall From Audit to Collapse [WSJ]

KPMG Didn’t Hear You Say ‘Uncle’

So we know why the final numbers in a few offices haven’t been reported for last week’s layoffs at KPMG: They’re still happening, circa now. According to somebody within earshot: “I passed someone in the hallway mumbling about getting the ax. I thought they were over; clearly not the case.”
We hear that the timing of these is partially due to the firm sending little auditors to training first and then bringing them back only to say, “Hope you enjoyed yourself, ’cause it was your last.”
This begs the obvious question of why the hell KPMG would go to this expense of sending them down there only to can their asses upon return.
We’d love to hear some wild speculation on the reasoning although based on yesterday’s mention, you’re all numb at this point.

KPMG Arrives at the Paperless Audit Party

office-space-402a-061907.jpgWe’ve received several reports about Klynveldians attending “eAudit” training this summer which marks the firm’s attempt to get break into the “paperless” audit world. Reports have been mixed with some saying that it’s best technology KPMG has invested in but others claiming that it will only run on Vista which may be problematic when Windows 7 rolls out.
Forgetting the technology mumbo-jumbo, it’s been long rumored that KPMG was the last major firm to make the move to a paperless audit. This could have been due to a number of things:
More, after the jump


• Partners that have been around since WWII that can’t even use email put the kibosh on the whole idea
• M-O-N-E-Y
• Accountants, in general, resist the idea of trying a new restaurant so don’t even think about messing with their audit methods
What’s more surprising is that some Radio Station clients have said that they prefer the old school audit. Not exactly sure what is so appealing about young auditors schleping around boxes of binders that weigh a few metric asstons but whatevs.
Our point, dude, is that KPMG has finally caved on this whole “paperless” idea. Since audits aren’t truly paperless we’re not sure what all the fuss is about but KPMGers got an extra week in Florida in the dead of summer out of it. Discuss the firm breaking into the new century in the comments or let us know how terrible your lives will be because of it.