• BofA Denies It Misled on Merrill Bonuses – In other words, piss off. [WSJ]
• Swine Flu May Cause 90,000 U.S. Deaths, Report Says – We’re looking forward to hysterical 24 hour swine flu coverage again. [Bloomberg]
• Bureau of Prisons Denies Madoff Has Cancer – Chest hair removal and getting high is definitely accurate though. [DealBook]
• Philadelphia Eagles Pass on $10k Tax Credit for Hiring Ex-Convict Michael Vick – That explains it. [TaxProf Blog]
• IRS Could Target Off-Shore Hedge-Fund Investors Next ‘Expect U.S. investors in off-shore hedge funds in places like the Cayman Islands, who failed to properly report earnings to the IRS, to be the next target of U.S. tax authorities’ [WSJ]
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
E&Y is Freezing Pay Because it’s Fair
E&Y has officially entered the pay freeze zone, via a voicemail left for employees, according to multiple tips we received. This follows the rumor that was announced a couple of weeks ago.
The following factors led to freeze:
Excuses Reasons and our explanations, after the jump
• Fairness – “It’s fair that everyone’s pay is being frozen.”
• Market Competition – “Monkey see, monkey do”
• Invest in Top Performers – “Top Performers” is subject to interpretation.
• Market Pressure – “Our clients are biting the dust or they’re ditching us”
• Fiscally Responsibility – “It’s a recession”
One exception to the freeze is that second year associates will get a raise in order to put them at the level of or above the incoming new associates, which is consistent with the earlier rumors. Select cities and practices may receive increases but it doesn’t sound too promising.
Bonuses are being paid to those of you that got promoted and they break down as 5k to SA’s, 6.5k to Managers, 8k to Sr. Managers. Sounds like partners took a pay cut this year so dammit, no belly-aching. Just kidding, go ape. If you have your own interpretation on the reasons given for the freeze, discuss in the comments.
KPMG Needs Everyone’s Help
Whether or not you’ll be working on Labor Day isn’t exactly clear:
More, after the jump
As we approach year end, we need everyone’s help to finish the fiscal year strong. Our goal is to achieve our forecast for the month of September. Based on the hours that are currently projected…we are falling short of that goal.
As a result, we have asked all Client Service Delivery professionals (including partners, senior managers and managers) to increase their chargeable hours in the month of September. With respect to seniors and associates, we are asking each of you to work an additional 32 hours in the month of September. We recognize this may result in overtime hours for some individuals
I encourage you…to make sure all chargeable hours for September are reflected. The amount reflected…will be increased by 32 hours to arrive at your goal. Please work with your managers to determine the best way to utilize this additional time in a productive manner.
We encourage you to delay any non-charge activity until October, assuming there are no required deadlines. This will help maximize our chargeable hours
At least they’re kind enough to “recognize this my result in overtime hours”. Tax associates probably won’t have any problem coming up with the extra hours but as for the rest of you, we’d love to hear your feelings on your extra four days of work in September.
UPDATE, 7:46 am: Our understanding is that this email was sent to audit professionals in the New York Office but judging by the comments, other offices have been put on notice to squeeze in some extra time for September. If you’ve received a similar email for your practice or office, shoot us the details.
PwC Layoffs Continue to Mystify Us
We’re slowly getting details on PwC layoffs that occurred a few weeks ago that were part of the newly stripped down performance rating that we talked about last week.
More, after the jump
I was one of the employees involved in these so called layoffs out of the Boston office. I can say that these staff cuts are coming at a time in which PwC, specifically it’s advisory services, has seen a dip in it’s numbers concerning profit…The lay off that I received came as a big surprise to me. For one I did not recieve a single negative reveiew throughout the entire performance year. I was actually on track for promotion and was reccommended by numerous individuals to be promoted to senior associate…From what I have heard, these staff cuts have been happening at all levels and all lines of service.
What’s not clear is how each office determines the timing of the layoff. We haven’t gotten any indication that there is one big whacking day or if it’s staggered among offices to keep on the DL. The one thing that seems clear is that PwC whackings come with little or no warning as performance ratings seem to magically change for the worst.
This seems to be all occurring while Denny Nally was spreading good cheer this Spring. Via an email we received from a reader:
While I am realistic about the challenges ahead, I continue to see the glass as half full and, based on the picture we have right now, I am committed to moving forward with our people strategy. That means, even though in some markets and in some practice areas we may have excess capacity, we will continue to manage our cost structure and explore all available options before we consider reductions to our staff.
Not exactly sure what “all available options” includes but it sounds like those have been exhausted because “reductions” are certainly occurring and all indications have been that everything remains “performance related” and that all levels are affected.
If you’ve got details on your PwC office’s latest layoffs shoot us some details, including numbers, city, practice, and severance.
PwC Canada Wants Everyone to Know That They Didn’t Audit Bernie Madoff’s Funds
With all the D talk out there re: anything Madoff, and most recently possible hotboxing and manscaping we’d hoped that maybe this whole story had taken a turn towards smut for good. Alas, we find ourselves back to a litigious story, this time it’s P. Dubs of the Canadian variety that are getting their asses sued:
More, after the jump
The Canadian arm of PwC has been named in seven separate lawsuits claiming as much as $2bn in damages for investors who lost almost everything in the largest fraud in history…PwC Canada has been accused of negligence for failing to spot that Fairfield Sentry’s $7.2bn of assets simply did not exist. The firm signed off accounts in 2007 that stated 97.3pc of Fairfield Sentry’s assets were held in short-term US treasury bills – an asset class that should be safer than cash.
PwC, obviously quite aware that a sex scandal wrapped inside a financial scandal may confuse anyone that is both distracted by sex and financially illiterate, issued this statement:
“PwC Canada provided auditing services to the Fairfield Sentry fund, but was not the auditor for Bernard Madoff Investments where the alleged fraud occurred. PwC Canada’s auditing of the fund’s financial statements fully complied with professional standards.”
Now, to some, this may seem unness for P. Dubs to explain that they didn’t audit Bernie’s funds since this never would have gotten past any reputable firm. However, since we now have a sex scandal mixed with the biggest financial scandal ever, involving thousands of duped investors, PwC decided to err on the side of caution.
Madoff victims to sue accountants PwC over feeder fund audits [Telegraph]
PwC Canada Wants Everyone to Know That They Didn’t Audit Bernie Madoff’s Funds
With all the D talk out there re: anything Madoff, and most recently possible hotboxing and manscaping we’d hoped that maybe this whole story had taken a turn towards smut for good. Alas, we find ourselves back to a litigious story, this time it’s P. Dubs of the Canadian variety that are getting their asses sued:
More, after the jump
The Canadian arm of PwC has been named in seven separate lawsuits claiming as much as $2bn in damages for investors who lost almost everything in the largest fraud in history…PwC Canada has been accused of negligence for failing to spot that Fairfield Sentry’s $7.2bn of assets simply did not exist. The firm signed off accounts in 2007 that stated 97.3pc of Fairfield Sentry’s assets were held in short-term US treasury bills – an asset class that should be safer than cash.
PwC, obviously quite aware that a sex scandal wrapped inside a financial scandal may confuse anyone that is both distracted by copulation and financially illiterate, issued this statement:
“PwC Canada provided auditing services to the Fairfield Sentry fund, but was not the auditor for Bernard Madoff Investments where the alleged fraud occurred. PwC Canada’s auditing of the fund’s financial statements fully complied with professional standards.”
Now, to some, this may seem unness for P. Dubs to explain that they didn’t audit Bernie’s funds since this never would have gotten past any reputable firm. However, since we now have a sex scandal mixed with the biggest financial scandal ever, involving thousands of duped investors, PwC decided to err on the side of caution.
Madoff victims to sue accountants PwC over feeder fund audits [Telegraph]
Our Invitation to Big 4 CEO’s to Start Blogging
We’d like to think that we encourage free and open discussion here. Everyone is welcome to join the conversation.
And by everyone, we mean if Dennis Nally, Tim Flynn et al. were to tell us in the comments how we deserved a life sentence of footing the Brooklyn phonebook because of our butchering of the English language, we’d be thrilled. Sadly, this is probably nothing more than a pipe dream.
Jeremy Newman, the CEO of BDO International, is by far the closest to fulfilling this dream. J. New, you’ll be interested to know, has his very own blog.
More, after the jump
Not surprisingly, the blog doesn’t seem to have the class or brilliant readership of other accounting/finance blogs that we know about but we give the dude credit for putting himself out there. Granted, if someone calls him a “hack loser” it probably won’t get published in the comments but you’ve got to start somewhere.
So this is our invitation to the rest of the Big 4 CEO’s and, yes, you too, Grant Thornton, to make the unprecedented leap into the blogosphere. Think of the transparency these firms would have as a result. The need for the annual survey about how these firms are such great places to work would become unnecessary because there would be constant real-time updates based on every decision made.
The best part is that, if GC happens to say something that they find offensive, unfair, blown out of proportion, or just plain obnoxious, then they’ll have the opportunity to talk shit respond directly. Then we can have feuds in the blogosphere that will be significantly more direct than any confrontation that has ever occurred between two people in a Big 4 firm.
Let’s help these guys out as I’m sure this will be a difficult task for them. Leave your suggestions of what your favorite CEO’s blog would be called or what kind of questions you’d like to ask them in the comments
Today in Big 4 Thriftiness
Our post from yesterday re: PwC’s concern over your consumption of high fructose corn syrupy beverages has struck a nerve with some.
So, being big believers in striking while the iron is hot, we thought we’d tell you that about a tip we received telling us that KPMG has also recently raised the price of soda in their offices from 50 cents to 75 cents.
Thriftiness continued, after the jump
We also learned that any perks, luncheons, birthday cakes, etc., etc. that do not benefit the entire office have been eliminated. Gourmet coffee machines apparently still remain because the coffee drinkers will not settle for freeze-dried Taster’s Choice.
Bottom line seems to be one of two things: 1) The firms are squeezing pennies until Lincoln’s beard pops off or B) The powers that be are faux-concerned about the reality of you sitting on your asses for 12+ hours a day and are attempting to get you to cut down on the calories.
Discuss your firm’s favorite cost cutting measure, unique revenue ideas, or your plans for losing the Big 4 fifteen in the comments.
Your Daily Fix
Because some of you are obviously jonesing for it, we’ve got some updated details on this week’s Radio Station bloodbath:
• Dallas Somewhere between 30-40
• Silicon Valley Between 20-30
• Kansas City Five staff – Two associates, three SA’s and three in client service support
Still no final word on New York. Shall we just call it 50?
PwC is Thinking About Your Health
It’s no secret that accounting firms are desperate either to cut costs or to find new sources of revenue.
Today’s wonderfully shrewd example comes courtesy of PwC, who decided that your four or five soda a day habit was a perfect weakness to take advantage of. Apparently the firm increased the price of a can of soda from 30 cents to 60 cents to squeeze out an additional $30,000 in revenue.
Our source informed us that this was a such a brilliant idea that a partner felt compelled to mention it at a firm alumni council dinner. Classy.
It’s entirely possible that PwC is just concerned that too many of you are consuming far too much high fructose corn syrup but our speculation is totally unfounded.
If you’ve got more examples of your firm taxing you on junk food consumption or other redonkulous cost saving measures, discuss in the comments or shoot us the shrewd details to tips@goingconcern.com.
PwC Calls Out KPMG
Awhile back, we mentioned how KPMG didn’t seem so concerned about the appearance of independence. Well now it appears that P. Dubs might be getting a little self-righteous about the whole issue or they’re just bent out of shape that the Radio Station swiped the Rentokil audit by lowballing the proposal:
More, after the jump
KPMG’s arrangement was able to shave 30% from Rentokil’s audit, but it was the manner in which the firm brought about the cost saving that raised eyebrows. Audit guidelines warn against two threats when an external auditor takes on internal audit work. The first threat, known as the self-review threat, warns against the external auditor relying heavily on its own internal audit work. The second threat, known as the management threat, warns against the internal auditors assuming the role of management.
KPMG says it’s totally fine because that’s where the client’s interest was:
KPMG said it was fielding interest from potential clients. ‘Unequivocally we have found interest,’ says Oliver Tant, KPMG’s UK head of audit. ‘We will be discussing it with more people, undoubtedly as will other competitors.’
PwC, at present, seems to be taking the highroad, even though we’re pretty sure they think Rentokil are a bunch of cheapskates:
PwC, would not be drawn on its opinion on the Rentokil audit, citing its policy not to comment on clients, but did say: ‘It is vital that we maintain our independence from – and in no way are seen to act as part of – management infrastructure…Internal audit can often be regarded as acting as part of that infrastructure.’
Typical passive-aggressive accounting rhetoric but it still sounds like P. Dubs is calling bullsh*t on KPMG. Feel free to defend your firm’s position by whatever means necessary (we suggest low blows and name calling) or get on your soap box about independence.
Debate rages on over KPMG’s cut-price Rentokil audit deal [Accountancy Age]
E&Y Isn’t On Board with Anything Delightfully Tacky and Unrefined
Would someone kindly tell Ernst & Young to get with the program? This country is falling apart at the seams and there are certain time honored traditions that we’ve all agreed on as TBTF.
So when we find out that the Hooters Casino in Vegas may go bankrupt and that E&Y warned of this back in March, we thought that it was a mistake. Of all the businesses out there, wouldn’t Ernie have the sense to help these poor saps cook the books so they can stay in business?
More, after the jump
Where in the name of God will divorced men and former college football players go to eat mediocre misshapen “wings” that come from, we’re pretty sure, a bird that was created by someone that we envision to be a cross of Doc Brown and Dr. Moreau? Served by women in skimpy, tight-fitting uniforms? IN VEGAS?
See the problem here? E&Y, would you care to explain yourselves?
Hooters Casino may go bust [The Deal]