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?
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
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]
For the Record
Radio Station NYC finally sent out the email today notifying everyone that the fiesta in Times Square got the kibosh. FTW.
Deloitte Disappointment is Officially Starting
We’re starting to receive confirmations of last week’s rumors of the less-than-exciting details re: Deloitte-period raises:
More, after the jump
I’m a senior in Chicago moving into my fifth year, and I’m one of those 2s who got bumped to a 3, got a zero raise and a $1000 bonus. I’m apparently a “3 -plus” as they had “3-minuses” also and those folks did not get bonuses.
Also got a tip that compensation discussions are set to begin in the Northeast for the ERS and Tax practices soon so we recommend watching Leaving Las Vegas or The Reader immediately prior to your meetings to cushion the blow.
KPMG Layoff Debrief
Akin to talking gun control at the RNC, we’re here to dispense more red meat.
Here are the final numbers that we have for select cities:
Gory details, after the jump
• San Fran – 9 17 total, at least 8 SA’s
• Dallas – 16
• Chicago – “close to 15“ Between 30-35 50
• NYC – Someone help us out. We know it’s big but we haven’t gotten any specifics
• Louisville – 3, including a 9th year Senior Manager
• LA – 18, 6 associates, 10 SA’s, and two managers.
Why such good details on LA? Here’s a tip we received:
how do I know this so precisely? Because today our office also sent out an email notification of a staff meeting tomorrow to discuss what happened, and the email shows the names of everyone in the audit practice it was sent to. All lay offs were left out of the email. Way to be sensitive KPMG. Within a day, our whole practice knows the names of everyone who was let go. Also, Orange County office had 10 total lay offs in external audit. For a smaller office, that was quite significant.
See yesterday afternoon’s post for additional cities that we didn’t get final numbers for. If you’ve got the details, either post them in the comments or send us the bodycount to tips@goingconcern.com.
UPDATE, 1:54 pm: Word is that the remaining Klynveldians in San Fran will also have an awkward meeting re: yesterday’s bloodbath. We’d ask you to submit audio/video of the proceedings if possible.
UPDATE, 5:47 pm: Two managers in Oklahoma City down.
UPDATE, August 26, 11:29 am: One lonely SA in Bodymore, Murdaland and two associates in Boise, ID.
Deloitte Settles American Homes Lawsuit
Deloitte becomes the first accounting firm, to our knowledge, to settle a sub-prime lawsuit by burying the hatchet with American Home Mortgage Corporation.
The total settlement was for $37.5 million of which Deloitte’s share was $4.75 million. We’re guessing that Barry Salzberg wasted more money on Rogaine last year.
We should mention that Deloitte and their fellow defendants decided to settle prior to the judge hearing their motions to dismiss the case. We thought this was a little strange so we decided to consult with some experts.
Their take was that the settlement seemed a little premature but made the points that 1) It’s often cheaper to settle early and B) if your company’s name is associated anything “sub-prime” you’re more or less responsible for the whole damn financial crisis.
Another Significant Subprime-Related Securities Lawsuit Settlement [The D&O Diary]
Radio Station Black Tuesday Update
Four weeks severance, termination date of September 1st, not performance related. Cities reporting bodies include: New York, Hartford, Dallas, Kansas City, Chicago, Indianapolis, and Cleveland. We’ve heard all levels have taken a hit, although it varies by city. We haven’t gotten any confirmation of partners being bought out at this point. West coast cities have yet to confirm victims since last night’s comments.
If you’ve got final numbers on your office or any other details we didn’t discuss here, shoot us an email: tips@goingconcern.com.
KPMG representatives had no comment.
UPDATE 4:11 pm: San Fran reports at least seven victims, six of which are SA’s.
UPDATE 2, 6:16 pm: San Fran updated to nine total, eight SA’s. Other cities reporting layoffs: Boston, Houston, and Louisville.
KPMG Doomsday Eve?
We’re going to briefly remind you about the hammer that is going to drop on some unlucky Klynveldians tomorrow.
So far it sounds like there has been blood shed in Dallas, Indianapolis, and New York but no details on severance and it sounds like only second year associates have gotten shown the door so far.
If you’re one of the KPMG casualties, drop us a line at tips@goingconcern.com and give us the gory details: severance, number laid off, lunging across the desk, did the partner you met with wear an executioner’s mask? Tell us everything.
Follow up Rumor: Green-dotter Merit Increase Edition
After hearing speculation last week that Green-dotters were getting froze out, we got some potential details on the lucky few of you in the Northeast:
Get the scoop, after the jump
I’ve been told by a reliable source that merit increases will be available for 1s and 2s, but not for the majority of 3s and def not for 4s or 5s. On the AIP (bonus) side of the house, >50% of 3s and all 1s and 2s will get them. Of course, the actual amount will be smaller, I’ve also heard ~2% pool.
So, if you find yourself lucky enough to be on the good side of a particularly well connected senior partner, you might see a bump for all your trouble. Since performance rating cuts are all the rage these days, sources tell us the number of 1 and 2 will be scarce. We’d advise serious ass kissing but at this point you’re probably just getting the jump on next year (if you’re around).
KPMG Decides that Eating Lunch While Traveling for Work is Acceptable
Last week we learned about KPMG’s latest effort to do some belt tightening for the last two months of their fiscal year. These penny pinching plans included, most notably, filling your stockings with coal before winter.
On Thursday of last week a lot of the Kylnveldians, mostly in the Northeast, had not received the gracious and long winded email. Our suspicions at that time were that Tim Flynn and Co. were reconsidering the butchering of time honored tradition of drunken idiocy on company dime.
More, after the jump
Turns out out we were half right. It was noted in the comments and we received several tips that the Radio Station did indeed cave on their grand idea of not letting traveling partners and professionals expense their lunches “since this is a meal that one would buy during the workday regardless of location.”
If we were to guess, this would have been #2 on the list of the new policies that garnered most of your wrath. Well, you must have let them know because the firm then came out with this:
after hearing feedback from many of you about the short-term change to meal reimbursement policy, the firm has decided that for now the existing meal reimbursement policy provides the appropriate level of flexibility and room for judgement when it comes ot managing the cost of meals while traveling….
So FOR NOW your ass better get used to value menus and $5 footlongs because we’re guessing that’s the meaning of “ROOM FOR JUDGMENT“. If there has been more correspondence from up on high about this particular issue send us the details or discuss in the comments. On the other hand, folks in the Northeast, if you’re still in the dark, let us know.
Oh, and Santa Claus is still not coming to town.