Not sure how we missed this but since it’s still slow out there we’ll kindly inform you that the country of Uzbekistan has had enough of KPMG.
According to Kazakhstan Newsline, “Uzbekistan’s Ministry of Finance has canceled licenses for audit activity on the part of KPMG Ltd.”
Obviously you can see how this would not be good if you wanted to audit anything in Uzbekistan. If any of you are willing to bite the bullet for everyone and get a subscription to this fine source of media so we can know the full story, that’d be great.
Otherwise, just use your imagination about the reason for the Radio Station banishment and discuss in the comments.
Personally, we’re hoping it had something to do with two physically repelling male employees running naked around in a hotel conference room but perhaps that’s a stretch*.
Uzbekistan takes away KPMG’s license [Life of An Auditor via JDA]
*Thanks for pointing out that Borat was from Kazakhstan. They’re neighboring countries, close enough for today.
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
PwC Isn’t Starving
Since flat is the new up or whatever the hell people are saying these days, we’ll go so far to say that PwC continues to kick ass in the UK. Their revenue increased 0.5%, to to £2.25 billion, for the latest fiscal year. Advisory revenues managed to drag the audit and tax business out of the negative as the advisory revenue increased 5% while audit and tax dropped 1% and 4%.
BFD. Standard boilerplate statements accompany these numbers. Tough economy. Challenges. Hard work. Whatever. Partners still seem to be doing ok, as per partner profit was £777,000, although that’s down 3%, according to Accountancy Age.
More, after the jump
Fine but what we’ll kindly remind you of is that the firms in the U.S. don’t have to issue these fancy-schmancy annual reports with all the gory details. If they exist, we’ve never seen one.
Wouldn’t it be nice if the U.S. firms were required to put out thousands of copies of reports with plenty of pictures of happy employees, oh, and squeeze in some financial statements? One more explanation from Dr. Phil or Jimmy Turley about the awesome job you’re all doing wouldn’t hurt either.
Maybe you get enough of that already but isn’t knowing how much potential liability the firm has relevant to everyone that is stakeholder in the firm? Or what is being spent on magic 8 balls? The Brits don’t seem to have any problem putting out there. Just a thought.
PWC_Annual report 2009.pdf
In a Pinch, Deloitte Lets Anyone Sign Off on Audit Reports
Audit partners are busy people. Regrettably, things get overlooked from time to time. Birthdays. Anniversaries. Pants. There’s just too much to think about sometimes.
One thing that you wouldn’t expect an audit partner to forget is to sign an audit report. Sadly, it appears that this crucial piece of the engagement sneaks by too:
More, after the jump
Deloitte has agreed to pay a £10,000 fine after allowing three members of staff to sign audit reports who were not designated as “responsible individuals”, contrary to audit regulations. Between March 2003 and November 2007 the three employees signed 95 audit reports.
Personally, we’re hoping that interns signed off on these because that would amount to a level of irresponsibility of the utmost hilarity. Speculation aside, Deloitte took this matter very seriously:
“Deloitte prides itself on its rigorous quality procedures and is disappointed that the individuals concerned failed to comply with the explicit policy that only those authorised to sign audit opinions may do so. None of the individuals concerned now work for Deloitte and the firm has implemented further improvements to its processes and controls.”
Rigorous quality procedures that let 95 audit reports sneak by? Short of the partner being on their deathbed, what could have come up that would make it a good idea to have someone else sign the reports? As for “rigorous quality procedures”, these must be on a sliding scale dependent on the number of pints that everyone has at lunch.
Deloitte fined £10,000 over mis-signed audits [Accountancy Age]
Deloitte is Handing Out Giant Foam Fingers Today
BusinessWeek’s “Best Places to Launch a Career” hits the newsstands today and Deloitte stuffed the ballot box best.
E&Y is the first loser, PwC gets the bronze and KPMG jumped one spot to #4, up from #5 last year. Grant Thornton dropped in at #51.
A few stats that probably help Deloitte land on top include:
• Average pay range being $5k higher than all the other firms
• Highest average signing bonus and 90% of new hires received them
• Highest three year retention rate of 56%
• Lowest drop in entry level hiring
Regardless of who comes out on top in this list, all the firms will be hyping their inclusion while on campus this fall.
We’ll revisit this next week when more of you are actually at work, not hungover, or haven’t already left.
For the rest of you, feel free to discuss the list in the comments, as we’re sure there are opinions out there on this.
Best Places to Launch a Career [BusinessWeek]
Think You’re Bitter?
Since some of you might not be spending your weekend consuming massive quantities of red meat, and thus, might be a little bent out of shape, we thought we would present a couple of quotes from “farewell emails” provided by readers.
Granted, these have probably made the rounds but we’ve included our favorite passages to demonstrate just how bitter some people are. Hopefully this will result in self-reflection for some of you but for some of you, it may be the sign that you’re beyond help.
Feel better about yourself (or pretty much the same) after the jump
Former PwC, who is obviously concerned about the mass soda consumption:
I would greatly encourage some kind of weight loss challenge to be implemented firm wide. The herd of water buffalo you call your work force is embarassing and a bit gross. When I call a co worker over from 2 cubes down and they are legitmately out of breath when they get to my cube it may be time to knock off 10 or 80 pounds. The company seems to encourage this obesity; each busy season we get a giant package full of pixie sticks, chocolate and assorted sweets. As much as I would enjoy type 2 diabetes, I think I’ll pass.
This particular former Green Dot should seriously consider some Dr. Phil time:
I would like for you to take note that Deloitte’s continuous lying and deceit is not acceptable to me or anyone else. Deloitte has been the biggest Disappointment because they are Deceitful, Demoralizing and De-motivating to their graduates who they should be uplifting as they are the foundation for future leaders of this country…When I started at the DGA I was promised many things, house on the hills and a black convertible to name a few. I was told that all the sacrifices I make during the programme would be worth it in the end. I ask how will it be worth it and when is the end?
iPhones are one thing but if the new recruits are promising black convertibles, for crissakes, please let us know.
These two examples certainly give credence to the notion that on call psychoanalysts for Big 4 employees should be given serious consideration. If you’ve got more examples out there, shoot them our way. We’re here to help as many of you as possible.
Are the Big 4 Driving Away Small Clients?
Accountancy Age reports today that smaller firms in the UK are cleaning up at the expense of the Big 4, specifically audit clients. The Four Horsemen are claiming cost pressure but small firms see it a little differently.
More, after the jump
Melissa Bowers, partner with Macclesfield-based firm Harts LLP, points to the Big Four’s practice of using senior partners to ‘seal the deal’ while leaving junior employees to do the grunt work, which has alienated smaller clients. This practice, combined with cost pressure, has driven audit clients into the arms of local firms. She has won work from clients who employed the same auditor for more than a generation…’It is possibly smaller work for them and they are possibly not giving them the same priority and attention.’
There’s no question that the cost pressure is an issue but what small clients really want, like a fat kid wants cookies, is some love from the partner. They’re not interested in a barely sober first year associate doing testwork. Clients want the partner to show up with the corporate card in hand ready to charm the pants off of them.
The other consideration is that clients just don’t care if they’ve got a big name on their audit:
Michael Good, partner at Oxford-based firm Critchleys, said that he believed smaller clients are no longer willing to fork out money for a big brand name firm. ‘They are asking themselves “do we need to pay the premium?” and “what are we getting for the premium?” and they are saying “actually not a lot”,’ he said.
‘Up to £20,000 for a big firm is not a big audit.’
We’d assume that here in the States, the sitch is no different. Small clients want to save money and they want to be someone special not just another contract that a partner has to take the rubber stamp to for the sake of his practice.
Discuss in the comments the trend here in the States. For you Big 4 types, are your smaller clients jumping ship because you’re treating them like the red-headed stepchild? Small firm bean counters are you picking up these clients? Feel free to get ugly about it, since most of you checked out on Monday, it will probably be a slow day.
Smaller firms clean up as recession sees audit clients shun the Big Four [Accountancy Age]
Where are Deloitte’s Revenue Results?
Accountancy Age reports that P. Dubs still retains the most FTSE 100 clients in the UK while KPMG retains the largest amount of clients overall.
BFD, right? Stateside it’s all about the scratch. This begs the question of why the hell we haven’t seen any revenue results out of Deloitte yet. KPMG is too far out and P. Dubs and E&Y will be reporting next month.
But the Big Four Blog points out that Dr. Phil and Co. reported revenue in July last year but here we are approaching Labor Day (or for some, just the weekend) and not a peep.
We’ve contacted Deloitte about this and will update you with their response just as soon as we hear back. In the meantime, feel free to wildly speculate about the delay in the comments and what the fiscal year ’09 number will be. Last year global revenue was $27.4B so we’ll put over/under at $28.6B. Takers?
PwC Better Bring Their ‘A’ Game to This Year’s Oscars
We’re not sure how long PwC has been counting the votes for the Oscars but we read some news this morning that made us pause with concern.
Apparently the Academy of Arts & Motion Pictures Sciences thought it was a good idea to change the voting rules for the Best Picture category back to the “preferential system” which was last used in 1945.
Our concern lies with the fact that this change in voting method might not mix well with the desire for routine that is forever embedded in the double helix of accountants, specifically auditors.
More, after the jump
The most common set of instructions that an auditor receives, as some of you well know, is “Do what they did last year”. This mantra, if not cast aside for the 2009 Oscars, could quite possibly be responsible for a material misstatement of epic proportions.
It’s far too early to speculate what films could be affected (maybe not) but we are concerned that since the awards are only six months away, the auditors don’t have much time to have at least a half a dozen meetings to discuss the ramifications of this decisions, let alone start planning, GASP, new procedures.
Best Picture voting gets a makeover [Variety]
Academy Makes Big Changes in Best Picture Voting [The Wrap]
Chrysler Auditor Switcheroo Follow-up (UPDATE)
We’ve confirmed with a Chrysler Spokesperson that the new entity emerging from bankruptcy has appointed Deloitte as the external auditors, a role that KPMG held for the entity that remains in bankruptcy:
More, after the jump
[We] can confirm that, as a new company, Chrysler Group LLC has appointed Deloitte as its external auditors. KPMG had previously served this role for the old Chrysler, which remains in bankruptcy. The new company, Chrysler Group LLC became operational on June 10, 2009.
Basically, as some have speculated, this may be a chance for Deloitte to poach the entire KPMG team, which, we have to admit, might not be a bad idea.
KPMG did not immediately respond to our requests for comment. Deloitte got back to us with no comment.
UPDATE: Chrysler got back to us with some additional information including
• Why the change in auditors – “Chrysler Group LLC is a new company and, as such, the company has decided to appoint Deloitte as its new external auditors.”
• If Deloitte was in the field – “Deloitte has begun initial planning work for the 2009 audit.”
• KPMG’s remaining responsibilities – “We cannot address any services KPMG may be performing for OldCarco (the official name of the company that remains in bankruptcy).”
Nothing too surprising here except for the hilarious awesomeness of “OldCarco”.
PwC Basically Says That the Lehman Brothers Bankruptcy is a Trainwreck
If 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?
Maybe 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…