We’re not trying to ruin your Friday but at the very least, this might encourage some of you to get your drink on a little earlier than planned.
Rumor received late last night that a Big 4 CEO was asked about compensation and bonuses at some grin n’ grip and he responded that the compensation adjustment and bonus pools for all the Big 4 firms was going to be down 90%.
This fits together nicely with the rumors of freezing and/or cutting pay that have been going around. Okay, now try to get some work done or figure out where you’ll be having that three martini lunch.
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
Lock up the Booze, E&Y Interns in Orlando
We just picked up one of the few Tweets that has made it through today:
This type of event will likely lead to many things including international hookups, late night skinny dipping (and probably urinating) in the pool, and widespread drunkenness of epic proportions.
If you’re down in Orlando this weekend for this three day extravaganza, send us your stories of debauchery to tips@goingconcern.com. According to the website, the festivities are at Disney World, so don’t embarass your firm yourself and try to keep the nudity out of the view of children.
International Intern Leadership Conference [EY.com]
Firm Watch: Deloitte
The last of the Big 4 Horsemen of the Bean Counter Apocalypse is Big D-period. Catch up on the rest of the usual suspects: Radio Station, P. Dubya, and E&Y to get the gist of this little exercise.
Deloitte’s got a pretty similar list as the rest of the firms but with a couple twists so let’s get down to brass tacks:
Get the details, after the jump
• Losing Clients – We’ve heard that firms are low-balling their RFP’s so it’s no surprise that some clients are switching but Deloitte seems to have had worse luck than others. UAL, Heelys (for the kids), Bear Stearns, Merrill Lynch, and Washington Mutual have all disappeared from D-period.
• Lawsuits – Believe it or not, the Parmalat debacle is not a done deal, as some lawsuits against the US and Internationalfirms are still out there as a judge ruled in January that the agent/agency issue was worth a closer look.
• Madoff Exposure – All week we’ve been referring you to the list of Feeder Fund Lawsuits over at D&O Diary. In a small water into wine moment, Deloitte does not appear on the list once. Nice bullet dodge Big D.
• Overtime Lawsuits in California – Deloitte is listed as the defendant in three of the cases.
• Layoffs, performance reviews, etc. – So, as we saw yesterday, this is where Deloitte’s sitch gets, pret-tay, pret-tay, pret-tay ugly. Layoffs were reported in both December and March nationwide. The performance stealth cuts are common here too and more may occur. All this is going on while an out-going CEO is talking to the press about how bad things have been in the last five years and the UK CEO is having Scrooge McDuck pool parties.
• Miscellaneous – The worst drug dealers in the world used to work for Big D.
So that does it for Deloitte, God bless ’em. And that does it for the Final Big 4. We’ll throw in GT and BDO in for good measure but if you want to throw some more jabs at the big boys, email us at tips@goingconcern.com. You’ve got until around high noon tomorrow before we’ll start coming up with our completely unfair and unscientific ranking.
Firm Watch: KPMG
So after dissecting opining on sliming P. Dubs and E&Y, we’re moving on to KPMG in round three. We’ll dispense with the pleasantries and get right to the list:
• New Century Lawsuit – This is the ball buster for KPMG. A $1 billion lawsuit filed back in April that alleges “grossly negligent audits”. This tale also includes a smoking gun quote from an email sent from New Century engagement partner to a specialist, “As far as I am concerned, we are done. The client thinks we are done. All we are going to do is piss everybody off.” We’re not sure if it’s possible to take that out of context.
Check out the rest of the Radio Station’s list, after the jump
• Madoff Exposure – Per D&O Diary, the Radio Station is named as a defendant in at least ten lawsuits as a result of auditing the Madoff feeder funds.
• Overtime Lawsuits – Listed as a defendant in five lawuits.
• Layoffs, Pay Freezes, etc. – Allegedly, the word that pay was being frozen was slowly leaked from the top on down. Layoffs have been pretty steady for the last twelve months including rounds in November and March in the audit and advisory practices. In addition, the ubiquitous trend of performance rating cuts is in full effect, and we just learned that by the this time last year, audit interns had heard yay or nay on receiving a full time offer. That probably makes for some nervous intoxicated co-eds.
• Miscellaneous – Phil Mickelson, the Radio Station’s walking billboard, was a bridesmaid at the U.S. Open for a third fourth fifth time.
Done-zo. Anything else you want to see tacked on? Drop us the dirt at tips@goingconcern.com and we’ll get it in for the final tab.
Preliminary Analytics | 08.05.09
• Donald Trump Faces Bondholder Battle in Bid to Reclaim Casinos – Our advice: Don’t mess with this hair ego man. [Bloomberg]
• ADP Says U.S. Companies Decreased Payrolls by 371,000 – The trend of lesser bad news continues. [Bloomberg]
• Banks Get Picky In Doling Out Credit Cards – Postal workers rejoice. [WSJ]
• Chinese survey finds prostitutes more trusted than officials – More bang for your buck. [The Raw Story via Naked Capitalism]
Deloitte UK CEO Does All Right For Himself
Apparently Deloitte was feeling a little left out of the populist outrage because after the news that Big D UK reported shrinking revenues yesterday, today we learn out that John Connolly, Big D CEO across the pond, earned £5.22 million this past year.
Not too shabby even though that’s a little less than his earnings last year of £5.69 million, according to the London Evening Standard.
Big John should probably send some biscuits over to the Royal Bank of Scotland for the payday as RBS paid Deloitte nearly £59 million this past year, up from the £31 million in the year prior. RBS has received billions of bailout funds from the UK government, so some crazy taxpayer wrath headed in the direction of Big D would not be outside the realm of possibility.
Deloitte boss rakes in £5.2m after the bailout of RBS [London Evening Standard]
Firm Watch: Ernst & Young
Round two of our Firm Watch this week covers everybody’s favorite resident of Times Square, Ernst & Young. We’ll get started on E&Y’s trubs with the Schein lawsuit where the firm was recently found to be marginally negligent and were ordered to pay a smidge over $10 mil as a result. NBD really, as E&Y probably spends that much money screwing up the spelling of their name on cheesy coffee cups.
The more serious stuff on E&Y, after the jump
Here’s some major stuff that probably keeps some E&Y partners awake at night:
• Lehman Brothers – E&Y’s role in the collapse of Lehman Brothers has got little attention in the press, however, suits have already been filed by San Mateo County in California, the City of Long Beach, California and the Southern District of Texas. It wouldn’t be unreasonable to speculate that more suits are likely to be filed.
• Madoff Exposure – E&Y also has significant Madoff exposure, as the auditor of several feeder funds. D&O Diary has them listed as defendants in at least ten different lawsuits.
• Layoffs – There have lots of reports of layoffs at E&Y in the last month or so, many of which occurred in the tax practices in the Northeast, and many of those getting the axe were supposedly on visas. Real classy. This was a follow-up to layoffs that also went down in February. As if that’s not enough, there were also rumors of layoffs occurring monthly since September ’08 in the Detroit office. Plus, with lots comments about stealth layoffs at all levels, it sounds like it has been a bloodbath at E&Y.
So that seems to be the major stuff, from our view, for E&Y. Again, we want to know what we’re missing. We’re looking for tips and dirt on any of the things we discussed above and everything we didn’t mention. Email us at tips@goingconcern.com and we’ll get all your additional gripes on here.
Deloitte UK Reports Shrinking Revenues
Big D’s UK revenue was down 2% to £1.93 bil for the latest fiscal year, marking the first time a Big 4 firm has reported declining revenues in six years.
Partners are still doing okay though, as they will receive £601 million. That’s an average of £883,000 per partner. Not too shabby, even though that’s down over 7%.
Leaders within the firm are expecting another rough year ahead for the economy but are still planning for “growth not contraction”. We’re not sure how that fuzzy math will work but whatevs.
Oh, and little D’s, don’t worry, you got a shout-out from John Connolly the UK CEO: “our success will continue to be the product of our exceptionally talented people being relentlessly committed to our clients, to market leading, innovative service and to an obsession with quality”.
Relentlessly committed. Obsession with quality. Sounds like they must have re-instituted the tradition of shipping the criminals lesser performers down under.
Deloitte revenue drops in `extremely tough’ market [Accountancy Age]
Deloitte’s UK revenues shrink 2% [FT.com]
Barry Salzberg’s Imaginary Advice for the President on Healthcare
We’re not going to debate about healthcare here because after about one-tenth of a nanosecond we’d consider jumping out the window. What we would like to discuss is Barry Salzberg, CEO of Deloitte-period, giving imaginary advice to the President on how to proceed with his strategy in getting support behind his reform efforts.
Check out some real advice, after the jump
Bar lays out his advice for B to the O in classic accountant fashion, ” I would counsel more patience.” and “Measured haste, you might call it. My advice to the president would be to find that balance of urgency and patience.” Haste. Balance. VOMIT. Wouldn’t you like to see one of these stoic Big 4 CEO’s just give completely batsh!t crazy advice on something, JUST ONCE?
Like if Salz advised that Obama’s strategy should consist of hosting Lebowski Fest at the White House. Bowling, white russians, chicks in viking costumes. That’ll get the people behind your plan Bam.
Measured haste. Pfffft. Is it any wonder everyone thinks accountants are boring? Feel free to discuss your favorite Big 4 CEO and all their words of wisdom they’re constantly bestowing upon you.
Subtlety Not a Strong Suit for Some Deloitte Aussies
Rumor out of Deloitte down-under, where, supposedly, some associates got canned because of organizing drug deals on Big D’s premises. Details are pretty scarce but this got us thinking:
More, after the jump
1. They were probably tax associates. They’re an unassuming bunch.
2. Is the pay so bad in Australia that Big D associates are resorting to illegal means of earning supplemental income? Wouldn’t turning tricks be easier?
3. How in God’s holy name did these f’n amateurs get busted? We’re they walking around soliciting potential customers like they were at a Phish concert?
We reached out to a Deloitte spokesperson who said they won’t comment on rumors. If you hear of other extracurricular activities going on at any of the firms, shoot us the scoop at tips@goingconcern.com
KPMG Thinks the Appearance of Independence is Overrated
The Radio Station is throwing caution to the wind in the UK, accepting a new arrangement with Rentokil Initial, that brings out the ghosts of accounting scandals past. Under the new agreement, the firm will serve as both the external auditors and take on internal audit work, working alongside the client’s internal audit staff.
Prior to the new agreement with KPMG, Rentokil’s external auditor was PwC and internal audit services were provided by Deloitte.
Last we checked, audit textbooks still state that external auditors are to be independent in fact and appearance but KPMG UK must have got their hands on an edition that was printed in auditor bizarro world.
Rentokil’s KPMG deal raises eyebrows [FT.com]
Firm Watch: PwC
This week we’re putting together a series of posts on the six largest accounting firms to give you an idea what their latest image seems to be based on the latest news and rumors we’ve read or heard about them. At the end of the week we’ll wrap up with a completely unscientific and probably unfair ranking which you will be allowed expected to take exception with.
We’ll start with P. Dubs because they seem to have had the uncanny ability to attract bad news lately:
Get the gory details, after the jump
• Satyam Fraud in India – $1b fraud, two auditors rotting in jail, Satyam throwing the Firm under the bus every chance it gets. This is the story that will definitely not go away.
• Discrimination Suit in London – GBP 40 million lawsuit, including alleged sexual harassment. P. Dubs is saying the lawsuit is “without merit” but at the very least there are a number of bigots working there.
• Rumors of PwC interns working 60 hour weeks in the New York office. Might as well give them an idea of what they’re in for, right?
• Chosen to take a suicide mission contract in Somalia to monitor the incoming aid
• Wage and hour lawsuits in California – Listed as defendant in three cases
• Huron Consulting Restatement – P. Dubs isn’t mentioned in this debacle. YET.
• Madoff exposure – listed as a defendant in over a dozen lawsuits.
As for layoffs, we haven’t heard much lately. There was a rumor that the PwC Denver office had let some associates go in the past few weeks but we don’t have any more details than that. Layoffs that have occurred in the past year at PwC we’re rumored to be of the stealth variety and not related to the recession which nobody really believes.
So, that does it for P. Dubya for now. What are we missing? Whatever office you work out of, send us the latest scoop on layoffs, performance reviews, promotions, pay raises, bonuses, juicy gossip, scandalous stories, etc. to tips@goingconcern.com and we’ll update the posts appropriately throughout the week.