Does anyone want a job helping socially awkward partners at E&Y? After last week’s inappropriate ice-breaker rumor, we received another tip about a partner leaving a sensitive voicemail with all employees in the region:
The voice mail says this is for partners only and then discusses the new model EY will be using to determine the # of admin staff in an office and gives the date when admin cuts will happen. Also talks about how all partners will be required to do a mid year review in Jan 2009 (by the way, we all heard the partners saying later how this had never been done in the past so clearly it was papering the files for upcoming partner cuts).
According to the tip we received, the partner decided that leaving another voicemail, asking all non-partners to delete the first message, was the next logical course of action. On the one hand, assuming that all E&Y employees would abide by the honor system and delete the first message represents the strong faith this partner had in their employees.
On the other, it may have been just as effective to say “Don’t worry about that last message, I was just fucking with you.”
Maybe! Depends on who you ask. We’re looking for opinions since we received a tip on what Jim Turley is pulling down:
Saw some info yesterday in a partner’s office. JDawg is pulling down $6 million…every year in October timeframe the partners at EY get a partner report on the “partner news network”. In this report EY shows partner information – the 5 highest paid US partners that are not in client service. So this includes generally JDawg, the AABS managing partner, tax managing partner, the Americas Vice Chair and a few other vice chairs. They started giving out this information about 4-5 years ago.
Our tip also stated that the non-J Dawg execs were pulling down in the nabe of $2.5 million.
Considering that J Dawg’s CEO duties include appearances on CNBC, being an IFRS cheerleader and eating f*(king chicken with Rahm, among other glad-handing and back-slapping duties, $6 mil makes for a nice round number.
Is $6 million fair for J Dawg? Discuss in the comments and pass along any further details you’ve got JT or other CEO salaries.
Wunderkind is a little premature but we’re hopeful! Awhile back we encouraged you to help the ailing Securities and Exchange Commission get its act together. We had really no expectation that anyone would take us seriously.
On Friday, the Commission announced that 29-year old Adam Storch would be the new Chief Operating Officer of the enforcement division. Storch joined the SEC on October 13th to assume the newly created position.
It’s pretty obvious that Storch craves letters behind his name as he has “certifications in accounting, fraud examination and auditing” according to Bloomberg. JDA isn’t impressed:
As a 28 year old myself let me tell you, this is beyond disheartening. We should not be in charge of anything, much less our nation’s regulatory enforcement. We are a generation of self-centered, lazy morons (yeah I said it) and sure there are a few exceptions but for the most part, no one my age will do anything unless they get a pat on the head and a “good boy” gold star just for pissing in the toilet instead of on the floor.
The biggest headline grabber (aside from urination accuracy) is that Storch is an ex-Goldman employee which is all fine and dandy for conspiratorial purposes but he is also an ex-Uncle Dangler where he was a, GASP, “senior analyst”. He’s definitely kicking himself for missing out on 100% free preventive healthcare.
The ‘Berg doesn’t have many other details on the Enforcement Division’s new fearless leader, so we invite any details on Mr. Storch for those that worked with him. Boxers or briefs? Boozehound or teetotaler? Does he get to carry a gun at the Commission? Since he’s in “enforcement” he’s got to be packing, especially as the COO. Khuzami probably has to take off the trigger locks for him though. Good luck man.
SEC Names Goldman’s Storch as Enforcement Unit Operations Chief [Bloomberg]
When we learned that KPMG had been left off the Detroit Free Press’s list of Top Workplaces 2009, we thought that it had to be a mistake.
We’re so used to accounting firms being found on “Top Place to/for [enter anything about yourself here]” lists that we almost called up the DFP to demand a recount. Then we got to wondering what HR/Marketing did with the boilerplate email to be sent to employees? Just save the draft and said, “We’ll get ’em next year”?
Well, this is all very awk. Especially since PwC (dropped from the top spot last year, btw), Deloitte, and E&Y find themselves in #2, #3, and #4 on the list for large employers.
So far we haven’t been able to determine if KPMG Detroit has been on the list in years past (which at least makes them consistent) so maybe Motown has decided to pack it in. The firm makes every national “Best of” list but is omitted from your own city’s list? How do the local bigwigs spin that one?
“We realize that we didn’t make the Best Workplaces list here in Detroit but we have made many national lists. You can all take comfort in knowing that KPMG is a great place to work in every city but ours.”
Regardless of how seriously the firms take the “local” lists, for the other three firms to be listed and the Radio Station to be MIA makes for a big bowl of “how the hell do we explain this one?”. Especially when you consider the methodology: “The rankings are solely based on employee feedback.”
Look, we could sit here and speculate on the reasons why KPMG was left off the list but we’re better off leaving that to you. Discuss the Radio Station’s omission in the comments.
Alphabetical listing of Top Workplaces 2009 [DFP]
Large employers survive by encouraging inclusion [DFP]
Earlier: Rumor of the Day: Deloitte Snagging Chrysler Audit from KPMG?
Earlier: Chrysler Auditor Switcheroo Follow-up
FINS has a short chat with E&Y’s Director of Experienced Recruiting, Maureen Kelleher, discussing, well, jobs at E&Y.
Highlights that you might
enjoy find interesting:
Getting ahead: “It’s about being a team player — to take leadership responsibility but to not be a maverick.”
Salaries: “We’re staying the course, as it were. We have extremely competitive salaries. We reward for performance. Granted, our firm is not immune to the economy, so the proportion of all that is probably not as great as it has been in the past.”
Layoffs: “We’ve been watching our costs, and that’s about as much as I’ll say about that.”
“Staying the course” may simply be another way of saying, “It’s fair“. Also, the “watching costs” response? We feel Ms. Kelleher could have answered better here but maybe Big 4 rhetoric isn’t our strong suit.
Check out the whole interview over at FINS, and feel free to discuss your non-mavericky firm in the comments.
Maureen Kelleher: Ernst & Young [FINS]
pool boy shake-up news out of the Radio Station as both the Chicago and the DC offices are welcoming new office managing partners, according to our sources.
So by our count that makes four new OMPs along with two area managing partners being moved into the client-facing roles.
Discuss details on any of these moves in the comments and if you have restructuring details, pass them along.
From what we can tell, the Ernst & Young Entrepreneur of the Year award is a BFD. If the other Big 4 have their own versions of this award, we sure haven’t heard of them.
And even if Deloitte were to start handing out the Uncle Dangle Vigilante of the Year award, it would pale in comparison to the EYEY because, now, a past winner is going to be on The Real Housewives of New York City.
Jennifer Gilbert won her EYEY in 1998 for her business, Save the Date, “A dedicated force of event planners who are in tune with the constantly evolving world of corporate events.” She’s even in the EYEY Hall of Fame. Jesus, this thing has a HoF?
J Dawg has to be bursting over this. Shamelessly up on his desk fist pumping, Tiger Woods style. A soon-to-be reality TV star that, God willing, will name drop E&Y every chance she gets on cable would be the best thing that ever happened to the firm. Sorry, NASCAR HoF.
The Real Housewives of New York Adds a Second New Non-Housewife [Gawker]
Oh sure, anything is possible. However, on top of everyone not called Fox News calling P. Dubs the most shameless whore ever to issue a report on anything, Jonathan Weil at Bloomberg is now calling out some of P. Dubs’s (and KPMG probably for good measure) banking clients’ less-than consistent use of mark-to-whatever-the-hell-we-like.
Weil names three PwC clients (Midwest Banc Holdings, First Bancorp, BB&T Corp.) as showing loans with fair values greater than their carrying values as of June 30th. Midwest and First Bancorp’s stock prices are trading far below book value while BB&T’s stock price trades above book value.
As Weil points out, WTFK if these values are right or not? What is obvious is it seem like some banks are legitimately making a run at fair value and others are still using a dart board. Oh, and the PwC audit teams are okay with that. Nevermind comparability, Dow is above 10k bitches! Onward!
Mark-to-Make-Believe Turns Junk Loans to Gold [Bloomberg/Jonathan Weil]
We’ve finally received some details on a possible restructuring at the House of Klynveld in the U.S.
According to our source, the plans were announced over the past week on a series of calls by Tim Flynn. The firm would be consolidated down to two regions, East and West and each would have a regional managing partner and one service line managing partner per region.
This would result in the elimination of one level of regional leadership and would transfer several partners into client-facing roles.
The restructuring would also include placing some partners on ‘profit improvement plans’ and some layoffs would occur over the next year. Additional staff layoffs would occur across all ranks over the next year as well.
The bad news is obvious. The silver lining, as some of our other sources have indicated, is that the Firm would be eliminating at least one level of bureaucracy that should allow partners to be more active in developing potential client relationships.
Messages left with KPMG were not immediately returned. We’ll update you with any response that the firm gives us.
If you can expand on of the details we mentioned on this restructuring, let us know, otherwise, discuss your thoughts in the comments.
Earlier: KPMG Atlanta Shake-up Makes Us Wonder
UPDATE, 4:45 pm: Regardless of this rumor, we learned a short time ago that KPMG admitted thirty-six new partners last month. Seventeen in Audit, twelve in Tax, and seven in Advisory. Congrats to the new partners! No, seriously. Good job.
One way or another most people move on from their Big 4 experience, regardless of practice or firm. Whether you left on on your own accord or by other means, you all have experiences of what life is like now.
Starting a career with a Big 4 firm is definitely a good way to go (yes, we said it) but shit happens and things change right?
So whatever you want to discuss: Money. Work/life. Does the Big 4 firm on the resume really impress? Did you leave and go back? If you’re still living the glamorous life in the B4, discuss your thoughts on your firm and why leaving is unthinkable. We realize that the Stockholm Syndrome is a bitch.
Maybe! Deloitte won’t commit to that but Dallas Mayor Tom Leppert says its a done deal.
Well, sorta: “Leppert said Deloitte has not yet signed a lease, but he’s confident the company will finalize a lease to consolidate nearly all of its North Texas operations in its existing 150,000 square feet at Chase Tower.”
Hizzoner obviously doesn’t mind jumping the gun here because he’s so psyched about all the Uncle Danglers spending their hard-earned dollars in the downtown area.
Dallas Morning News:
The average Deloitte salary is $100,000, according to a city report to the Dallas City Council Economic Development Committee obtained by The Dallas Morning News. The report estimates that Deloitte would generate an economic impact of more than $3.5 billion to Dallas over 10 years. That impact includes salaries, taxes and spending by employees and clients.
An average salary of $100k? Not bloody likely if you’re including staff and support but hey, DMN, go with it. Help us out Deloitte Dallas, is that number legit or bunk?
On another note, sorry Irving, sounds like you’re SOL on some sweet Deloitte action and Dallas sure as hell isn’t being shy about dancing on your grave. We’re sure you’ll be able to screw them over somehow. Let us know how it goes.
Deloitte may move most of its local offices to Chase Tower in downtown Dallas, mayor says [Dallas Morning News]
Earlier: Apparently $2 Mil Is Enough to Keep Deloitte in Dallas
The Pacific Northwest Area leaders have a town hall meeting in the Area offices. The retiring Area Managing Partner and incoming partner both show videos of each other to “introduce” them to the little people. These videos brag about how one collects ferraris (shows other partner in his ferrari at the show room) and the other shows the incoming partner’s closet full of Jimmy Choo shoes. And the best part?? It was at this meeting where they tell people (everyone from admin to partners) that they are making 5% cuts in December…And then of course they proceed to go through multiple rounds of cuts – Dec, March, June and not sure if it is over.
We enjoy an Italian sports car as much as the next guy but for crissakes, using it to segue into layoffs? Do you think they ran this script by anyone or did they just wing it? If you’ve got other stories of tawdry behavior, by all means, pass them along.
A source at Deloitte let us know that at least one partner thought it was pretty kick ass that Uncle Dangle was providing healthcare coverage that basically amounts to an HMO:
I got off a call where a partner seemed pretty pleased w/ himself (read: the partnership). “100% Free Preventative Healthcare” was how it was termed. I’m not sure how it affects others, but frankly under my plan, there wasn’t a difference. Just thought it was funny that a big-deal was made of it when the difference was non-existent.
More, after the jump
Text from Deloittenet:
Deloitte’s Total Rewards team worked with our national medical plans to offer 100 percent coverage of in-network preventive care to all of our program participants as of January 1, 2009. This care applies to well-man, woman, and child visits, including lab tests and other preventive screenings. With such a generous preventive care benefit in place, there is no longer a need for the Physical Exam Reimbursement Policies (Administrative Policy Release 465 for partners, principals and directors and Administrative Policy Release 266 for senior managers and managers).
By using an in-network provider through one of Deloitte’s national medical plans, you are able to receive important preventive health care benefits at no cost. A detailed description of the preventive care benefits available through each of the plans is available on DeloitteNet.
Thanks for the notification D. Save us all the trouble and just call it an HMO. It’s certainly arguable that HMOs have been shown to increase wellness but why the hell didn’t they just claim to have invented the Internet?
Leadership changes are inevitable in any business but the reasons can be a mystery. Dismal performance? Drugs? A pool boy? All of the above??
Tim Flynn (taking a break from his caddying duties) and John Veihmeyer sent a very upbeat email to the Atlanta office yesterday announcing the new office managing partner there.
Atlanta Office Leadership
A Message from Tim Flynn and John Veihmeyer | October 13, 2009
We are pleased to announce the appointment of [redacted] as managing
partner (OMP) for Atlanta, succeeding [redacted] who has moved into a
client facing role reflecting our commitment to focusing our most
experienced Partners directly on the marketplace.
We want to first thank [redacted] for his many contributions to the Atlanta office and for his leadership roles as lead area managing partner and Southeast area managing partner for Audit. In his new role, [redacted] will be focused on developing new market opportunities, serving some of our largest audit clients and assisting national and local leadership with client care and major proposals.
[Redacted] brings more than 27 years of experience to his new role. He is currently the Global Chairman of Industrial Markets and the National Sector Leader for Energy & Natural Resources, based in Houston. [Redacted] has spent the majority of his career serving energy clients, including Duke Energy, Chevron, Schlumberger, and Spectra Energy.
A well-recognized industry speaker and thought leader, [redacted] was a speaker at the 2006 World Economic Forum meeting in São Paulo. He is also a frequent guest on CNBC’s Squawk Box discussing energy issues and is a regular contributor to energy trade magazines. Since 2003, [redacted] has hosted KPMG’s Annual Global Energy Conference, which is attended by 500-600 energy executives each year.
Please join us in wishing both [redacted] and [redacted] success in their new roles, and in thanking [redacted] for his many contributions as leader of the Atlanta office.
CEO & Deputy Chairman
Ohhhhh, Squawk Box. That’s a feather in your cap.
Our source told us that: “‘Moved into a client facing role’ means you’ve been demoted in KPMG speak.” We asked around and it’s not clear just what the hell that means but we’ll run with it.
If you’ve got some more information on the shake up at the Radio Station Hotlanta, let us know or discuss in the comments.
UPDATE, 2:45 PM: We’ve received some tips confirming a new Dallas managing partner and have also heard there will be some shifting around of leadership in the New York office but we don’t have many details, so please share.
UPDATE, Thursday 2:49: According to another source, Southeast AMPs for the Tax and Advisory Practices are also being transitioned into client-facing roles.
We’ll assume everybody is down with the KPMG Pomeranian and Uncle Dangle for Deloitte. If not, speak now or shut your pieholes.
There’s some resistance to the idea of famous Governor banger, Ashley Dupre, being worthy of the PwC Mascot.
Frankly, since P. Dubs has made some feel like prosties already and has also shown that, as firm, they don’t mind whoring themselves out for some scratch, the argument can easily be made that Ashley is the perfect mascot. On the other hand, the point has been made, and is duly noted, that high-priced call girls are much cooler than any accounting firm.
So you see the problem here but it’s not our decision. We’ll leave it up to you. State your submission for the PwC mascot and give a brief explanation for said suggestion in the comments.
Keep it clever people, mascots already assigned to any other team or organization will be ignored with extreme prejudice. On with it then.
WAY more prestigious than the Emmys mind you. No, E&Y has now managed to snag the coveted honor of counting the votes for the inaugural NASCAR Hall of Fame class.
The other firms are, no doubt, insanely envious of E&Y for landing this prestigious gig but we have several important questions:
• Will the E&Y auditors have to memorize the winners and all of their sponsors?
• Shirts (let alone tuxedos) seem a little formal for a NASCAR event so what will the auditors wear?
• Instead of simply handcuffing the results to their wrists, will the auditors need guards armed with Desert Eagles to keep the crazies from highjacking the results?
• Instead of Dr. Horrible, who will make a special appearance to distract the audience during the explanation of the vote tabulation? Jeff Foxworthy seems too obvious.
• Will E&Y be paid in Bud Light as it seems to be accepted as legal tender in these circles?
Let us know your thoughts on E&Y’s new engagement and your ideas on responses to the questions posed above.
Hall of Fame Announcement Set For Wednesday [FanZone Sports]
…whores for the insurance industry.
The firm issued a statement today after nearly every news outlet called them out as corporate trollops after the release of their report on the Baucus healthcare reform bill yesterday.
America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
· Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
· An excise tax on employer-sponsored high value health plans.
· Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
· New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
“The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”
It seems as though P. Dubs is trying to clarify that, “We know we’re whores. We even said so in our report. We’re the classy type of whore though. We won’t do anything unless the money is right but we are good at pleasing our clients.”
What we’re wondering is why PwC would go to the trouble of putting out a report that they knew was one-sided and then their client dances around like the report was brought down by Moses from Mount Sinai. Maybe the firm wasn’t expecting such an enthusiastic response.
WTFK but something tells us that AHIP may not be enjoying their PwC Experience as much as they were yesterday.
PWC statement — Not so helpful for AHIP [Live Pulse/Politico]
In what amounts to another example of the Big 4 not having any control over their “global” operations, a new scandal has come up in Sri Lanka that involves both PwC and E&Y. According to the Sri Lankan Sunday Times the firms have “forfeited their reputations” in that country after working on a privatization transaction of a public enterprise.
The article is a tad on the long side so we’ll give you the highlights:
• Unauthorized preparation for the sale of SLIC – Both firms helped move the transaction along without the required approvals and questionable independence. Bureaucracy is a pain in the ass anyway.
• Manipulation of Accounts – Both firms were either producing or working with shoddy numbers and then weren’t exactly upfront about it.
Continued, after the jump
• Conflicts of interest – “Deva Rodrigo, a senior partner of PWC, was also a member of the Steering Committee that selected PWC as consultants on the transaction. He supervised their work and authorized payments to them while he simultaneously worked for them himself and received a share of such fees as a Senior Partner, PWC Sri Lanka…The report stated that [E&Y] continued to be the auditors of SLIC after the purchasers took possession, management and control on April 11, 2003. At the same time, E&Y was committed to audit SLIC accounts on December 31, 2002 and April 11, 2003 for the government, i.e., the sellers. The report further states that because of its representation on the Steering Committee, PWC was aware of the misconduct of E&Y.”
This less than flattering news for P. Dubs and E&Y follows the snoozer raids of the E&Y offices in Hong Kong and the PwC and KPMG offices in Reykjavik, Iceland. Regardless of the lack of dramatic moments in these raids, we can safely say that the firms would rather that they make news by issuing less than objective reports rather than raids and scandals involving blatant chicanery by their employees.
Dennis Howlett points out that the firms continue to market themselves as “global” firms when it’s pretty obvious that there is very little control over what goes on in each individual country: “Message to the Big Four: stop pretending you are in control of the global networks. Either do the job properly or acknowledge that in reality it’s all a PR stunt.”
Does DH have a point? Are firms just faux-global? Sure you can do a rotation, new associates can get their own rooms in Rome, and you can send a prank email to a partner in Sydney from an intern’s laptop but is does that mean they are global organizations or just have money to burn?
Make your case for or against the ‘Global’ mantra in the comments.
PWC and EY heavily implicated in unlawful privatization [AccMan]
Unlawful privatisations in Lanka – Role of the Auditors [Sri Lankan Sunday Times/FT]
Regardless of what accounting firms may say about their current troubles because of “tough economic conditions”, lots of these “conditions” can be pret-tay good for business.
Reuters reports that several companies, including your favorites, have pulled down more than a fair amount fees related to the “asset protection scheme” that insures risky assets held by Royal Bank of Scotland and Lloyds Banking Group.
KPMG (£6.5M), E&Y (£4.3M), and PwC (£4.2M) were the top earners assisting the Brits with their version of the magic money printing machine. Oddly, Deloitte is no where to be found in this article but maybe that’s got something to do with the £59 million they received from RBS. That seems to make up for it.
Stateside, E&Y is pulling down $60 million for its work with the New York Fed on AIG which makes the RBS/Lloyds fees look like a lemonade stand.
Since misery loves company, it might be poor taste for any firm to be excited about the money that is rolling in. So nevermind our tendency to focus on the positive. Go back to feeling sorry for your slumping revenues.
KPMG Earns Most From Bank Asset Plan [Reuters]
We’re confident that you all enjoy talking about healthcare reform. If it wasn’t for the long hours you had to work, we’d be reading about all the accountants showing up at the town hall meetings to bring sanity to what otherwise appears to be a meeting of escaped mental patients.
Now, just when you thought that the debate had saturated the country into submission, America’s Health Insurance Plans has put out a new report, courtesy of P. Dubs, that states that the costs of health insurance would rise significantly under the plan submitted by Senator Max Baucus of Montana.
Continued, after the jump
From the executive summary:
There are four provisions included in the Senate Finance Committee proposal that could
increase private health insurance premiums above the levels projected under current law:
• Insurance market reforms coupled with a weak coverage requirement,
• A new tax on high-cost health care plans,
• Cost-shifting as a result of cuts to Medicare, and
• New taxes on several health care sectors.
The overall impact of these provisions will be to increase the cost of private health insurance coverage for individuals, families, and businesses. The net impact of these increases on households would include the impact of these increases and the new subsidies provided under the bill.
The report states that on average, costs will go up 79% under the current system between 2009 and 2019 and 111% for the same time period if the provisions are implemented.
Politico calls bullshit, “The industry, which didn’t like last week’s [Congressional Budge Office] report, bought its own analysis and will tout the PricewaterhouseCoopers findings in new ads.”
On the one hand, you can’t really expect PwC to do put out a report like this for nothing but did anyone really expect them to come to a different conclusion?
As we pointed out recently, accounting firm reports typically don’t get lots of attention but when they do, it’s usually over something that causes people to get all crazy for their particular side.
PwC will certainly be perceived as the insurance industry whore here but since they aren’t actually an insurance company, the firm won’t likely receive the worst of the populist chastisement and will just enjoy some free publicity.
Insurers, docile till now, go to war [Politico Pulse]
Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage [PwC Report]
What were these guys really saying? Other than accountants are NOT to be blamed for anything. Discuss. And for crissakes Jim, learn how to tie a Windsor knot.
We might be going out on a limb here but it seems like a lot of studies that the large accounting firms put out don’t get much attention. There might be a press release and a mention here and there but otherwise not too much excitement.
That being said, KPMG must be thrilled that the Atlantic Yards Report is taking such exception with th lantic Yards Project:
KPMG’s Atlantic Yards market study, conducted on request of the Empire State Development Corporation (ESDC), backs up the assertion that Atlantic Yards might be completed in the announced ten years, rather than, as then-ESDC CEO Marisa Lago said in April, “decades.”
Well, not only are projections about condo values questionable, as I wrote earlier today, but KPMG’s report has some very shoddy research. Consider that the report (dated August 31) claims that Richard Meier’s On Prospect Park is 75% sold. (Only rental buildings are pre-leased.)
However, the New York Times reported September 27:
While the developers say half of the building’s 99 units have been sold, the real estate Web site StreetEasy.com documents only 25 closings through public records.
KPMG claims that the Oro Condos are also 75% sold. But just this week Crain’s reported that prices at Oro had been slashed 25%.
If you’re not familiar with the Atlantic Yards Project, you’re lucky. Let’s put it this way, it’s a $5 billion project that involves moving the New Jersey Nets to Brooklyn courtesy of Nets owner Bruce Ratner and sixteen new high-rise buildings and will be finished long after we get global accounting convergence.
So yeah, a developer’s paradise. Problem is that all the hype has transformed into a giant argument that pretty much involves everyone. As NoLandGrab points out, “if the Atlantic Yards project is so great, why does everyone pushing the project forward, and every alleged ‘study’ extolling its virtues, have to stray so far from the truth to make it appear viable?”
The obvious benefit we foresee is that the project may get rid of the worst Target on Earth but we may lack vision.
As for the Radio Station, they probably had the best of intentions when preparing their report but now, for better or worse, KPMG, who has yet to respond to our request for comment, is near the center of the rage. Enjoy.
UPDATE – July 13, 2010: Hey gang – a bit of belated correction/clarification here. Norman Oder, who writes the Atlantic Yards Report got in touch with us about our little quip about Target. He wrote to us “I know you’re trying to be entertaining, but that’s not close to true. The Target is across the road from the project site.”
So I guess our wishing out loud for the big Brooklyn bullseye to be destroyed won’t be happening (it’s not part of the plans at least) but we stand by our assertion that the Target is a hellhole and needs to be destroyed.
Yeesh, we hope not. Problem is, when we reported on P. Dubs canceling Christmaskah last week, people were speculating that P. Dubs was also kinda sorta putting it out there that there would be no merit increases for fiscal 2010. We’ve received additional tips suggesting the same thing so we’ll put out to you to discuss further.
After Tuesday’s spintastic revenue results, Denny and Co. may have concluded that putting it out there that you shouldn’t get your hopes up for a super P. Dubya comeback was the best course of action.
Problem as we see it is that alluding to the idea that raises aren’t gonna happen can’t be good for morale. Plus, there are the continuing rumors of senior managers leaving en masse, via their own will or otherwise. On the bright side, that could set up for a nice little surprise come next year if things turn around and Den-Den sounded pret-tay, pret-tay, pret-tay optimistic in Tuesday’s press release.
Discuss your thoughts on P. Dubs seemingly pessimistic attitude in the comments.
We’d like to think so anyway. Maybe JT isn’t a potty-mouth but Rahmbo has been known to drop a curse here and there.
JT was in DC last night with several other big wigs, at the Williard Intercontinental solving all our problems: “The participants provided updates on their businesses, discussed when the economy may rebound and offered advice on how to spur job growth.”
Right, because, in case some of you haven’t heard, we’re on a collision course with double-dig unemployment. Thank the Maker they’ve been thinking about hiring people again, “Over salad, chicken and a fruit desert, some of the business leaders said they would start hiring immediately once the economy began rebounding while others said they would wait for revenue growth in their own companies, according to one of the participants.”
This was a two hour date so it couldn’t have been all business. We’re guessing Jimbo tried to loosen everyone up with some inappropriate jokes (feel free to guess what kind) while gnawing on a drumstick like Fred Flintstone but that’s just our vision.
Give us your best ideas on what JT and Rahm talked about privately, just between buds, in the comments.
Emanuel, Jarrett Meet With CEOs From Intel, Time Warner, Dow [Bloomberg]
That’s according to reports from Asia Sentinel. The liquidator of the now bankrupt Akai also, “extracted US$100 million from a local tycoon, Ho Wing-0n, who had allegedly conspired with the then chairman of Akai, James Ting, to strip the company of its assets. Ho himself was a former partner at Ernst & Young until 1990 and has been responsible for the Akai audit.”
Sounds like a nice little back-slapping/glad-handing/ass-grabbing arrangement and depending on how things progress, sounds like another one may be in place:
The size of the settlement against Ernst & Young reflects not only the size of losses sustained by Akai creditors but the years of organised sleaze attributable to Ernst and Young’s Hong Kong operation. If the civil settlements are not followed up by vigorous criminal prosecutions by the Hong Kong authorities, one can conclude that mutual back-scratching and old-boy principles override issues of corporate governance and the responsibilities of auditors.
As you may have noticed, we’re big fans of speculation so, for now, we’ll go along with whole HK Fuzz and auditors back-scratching scenario presented here if no criminal charges arise. E&Y has continually reiterated their willingness to cooperate in the investigation so you can make up your minds on what that all really means.
The liquidator, Borelli Walsh seems to be the catalyst of this case as the Sentinel speculates that if, “it been one of the other of the Big Four auditing firms it is likely that some clubby backroom deal would have been done which would have kept criminal activities well hidden and involved a settlement a fraction of that obtained by Borrelli Walsh.”
‘Clubby backroom deal’? You mean those are real? We’d be curious to know if E&Y in the States has even brought this up internally to address the press coverage. If those of you in the Ernstiverse are getting love letters from JT on this, kindly pass them along or discuss in the comments.
No Accounting for Accountants [Asia Sentinel]
The spin continues in accounting firm earnings season, this time courtesy of P. Dubya. The Firm reported global revenues of $26.2 billion, according to today’s press release. This was down from fiscal year 2008 by approximately $2 billion from $28.2 billion in global revenues when adjusted for foreign exchange fluctuations.
Assurance services increased slightly, rising 4.8% while tax and advisory revenues both declined 7.5% and 11.4%, again, when considering the foreign exchange fluctuations.
North America’s revenues held up well, only dropping 3.2% ($9.3b to $9.0b) while Western Europe, PwC’s largest region in terms of revenue, had a 11.6% drop in revenues. The drop for this region was primarily due to the strength of the U.S. Dollar.
Denny Nally remains stoic despite
Satyam the challenges out there:
“The past 12 months have been challenging for our network, with most PwC member firms facing tough economic conditions. While PwC’s results for FY 2009 are not as good as we would have liked, they have held up well in the circumstances,” said PwC Global Chairman Dennis M. Nally. “In addition the combination of first rate customer service and very competitive pricing has allowed us to increase our market share in many of our markets around the world.
“The ability of so many PwC member firms to successfully sustain their business and their people through this difficult period provides us with a strong platform from which to serve clients in the recovery and to continue to invest in our own growth. While we cut our costs substantially, the PwC network also hired about 30,000 new people and increased its total workforce to more than 163,000 demonstrating a commitment to attracting the right people to serve clients around the world.”
Data for number of employees in fiscal year 2009 isn’t up yet on the global website but we’ve got no reason to not believe Denny when he says that they’re attracting the right people and getting rid of people that cost too much.
Discuss the revenue results and Denny’s vision of the ‘PwC Experience’, which is probably nothing like an acid flashback, for the future in the comments.
*PwC just wants everyone to know that there’s this thing called PricewaterhouseCoopers International Limited (PWCIL) that doesn’t provide services to clients and doesn’t act as an agent for the member firms. PWCIL is NOT LIABLE for anything that these member firms f*ck up because that’s just ridiculous. If they screw the pooch, they are TOTALLY ON THEIR OWN. Don’t come crying to us about an audit failure because we will deny ’til we die. This has nothing to do with Satyam, btw. It doesn’t. We swear.
KPMG has been ordered to pay £45,000 to a former employee who failed The Institute of Chartered Accountants in England and Wales’s (ICAEW) computerized qualifying exams due to her dyslexia.
According to Accountancy Age, “[Dhrupa] Bid failed her first exam and was given permission by the firm to defer her retake so that a dyslexia assessment could be obtained from the ICAEW. She was warned by the firm if she failed she would have to be dismissed.”
More, after the jump
Previously, Ms. Bid had taken paper exams scoring in the 80s before taking the computerized exam and scoring 40% lower. She only found out that she had dyslexia until after she had failed the exam the second time. Her condition warranted her to an extension of time and to be given a paper exam.
It seems a little odd that she would take the exam again and fail, before finding out she had dyslexia since she was allowed to defer her re-take of the exam to determine if she had dyslexia.
Maybe the ICAEW was dragging on the assessment or KPMG didn’t have the patience to wait for the results but since Ms. Bid failed the second time she has had to return to Kenya since she no longer held a work visa.
KPMG issued the following statement:
“KPMG believes it acted properly and fairly at all times and did what was required of a responsible employer in supporting Ms Bid once the probability of her having dyslexia was made known to us.”
What’s not clear is whether the Radio Station would have preferred paying out less in damages and ended up being perceived as a pimp. Pretty tough call but it looks as though shelling out the additional £45,000 was worth it to the Firm.
The bright side for Ms. Bid is that she wasn’t made to feel like a prostie and she got paid way better than one too. Silver lining people. Silver lining.
KPMG forced to pay £45,000 in discrimination case [Accountancy Age]
Maybe! But the movie theater company did dump PwC on October 1st according to a filing with the SEC after just two years.
According to the filing, P. Dubs had only been engaged as AMC’s auditors for the last two fiscal years (4/3/08 and 4/2/09) and the audit committee decided that KPMG will now get the pleasure of opining, also effective on October 1st (congrats, we guess?).
As is typical in these auditor swaps, AMC’s filing states that they had no disgreements with PwC “on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.”
We’d like to think this came down to a PwC partner making some sort of stand against the asinine concession prices that are borderline unethical but that’s just our personal vision. If you’ve got your own ideas about the reasons for the dismissal, discuss them in the comments.
AMC Entertainment hires KPMG to replace PricewaterhouseCoopers [Kansas City Business Journal]
We’ve heard of at least one instance in the Detroit office where a manager’s pay was cut approximately 4%. At this time, it’s not clear if it will affect the entire Midwest region or just the Detriot office, so let us know the details for your office, regardless of location.
Meanwhile in the Mid-Atlantic, we received the text of an email that states that “no topic is off limits” in the comp discussion, which will hopefully invite some colorful discussion. If any other regions have a similar communiqué, kindly pass it along. We love reading emails. The text of the email that lists things that you should be prepared to discuss, appears after the jump.
During the week of October 4, our Midatlantic area Audit partners will be conducting Project Future discussions to address your individual compensation as well as personal and professional growth opportunities at KPMG. Project Future is an initiative that allows you to discuss various topics with firm leadership.
While the current state of the economy is on everyone’s mind, I encourage you to take this opportunity to share your experiences, interests, and short- and long-term career goals. You should also use this time to discuss the firm’s plan for growth, including new client opportunities and recent wins.
Remember, no topic is off-limits during the Project Future meetings, so bring your list of items to discuss. Here are a few items you should be prepared to talk about:
• Future engagement assignments, including your utilization, chargeability, and overtime hours
• Industry and career interests
• Your experience working for KPMG
• Personal and professional growth
• Tips on how to build a great career at KPMG
• Sabbatical program
• Promotion outlook
During the week of October 4, your assigned Project Future partner will contact you to schedule a convenient time to meet. If you don’t hear from your partner, please contact your local HR manager.
This is the fourth year we have conducted Project Future discussions, and I hope you continue to find value in meeting with your partners.
If you’re more comfortable discussing the points above here, please do so in the comments. And if you’ve got other suggestions of what you’d like to discuss, or care to expand on “Project Future” mention them as well and of course, share your euphoria or lack thereof with us after your sit-down.
Earlier this year, the Deloitte Dallas and Irving offices were ready to copulate and move the combined digs to Irving. Apparently this was going to save the two offices bookoo dollars.
Problem for the City of Dallas is that if a big shot spendy tenant like Deloitte bolts, Dallas’s Central Business District would not be good, especially since the vacancy rate is already high. The City pondered this and came to the conclusion that offering Deloitte a $2 Million “economic development grant” should convince them that moving to Irving is the WORST IDEA EVER.
More, after the jump
Not quite sure what Deloitte will do with that money (our suggestion is for more donut giveaways) but here’s the back scratching they’ll do for the City, according to the Dallas Observer:
Subject to City Council approval of the proposed economic development grant, Deloitte LLP has agreed to execute a 10-year lease extension at 2200 Ross Avenue (Chase Tower) beginning 2011 and will:
•Commit to maintain a minimum of 1,111 jobs at this location
•Ensure approximately $19.9 million is invested for tenant improvements
So it looks like Deloitte is down for this but we’re not exactly sure how they came up with 1,111 for the minimum number of jobs. At the very least, it’s kind of a cool looking number.
Regardless of the figures, we doubt that Deloitte would be taking the $2 mil if wasn’t going to be a good deal for them. So greasing Deloitte to keep them in Dallas seems to be a good deal since, “[the City of Dallas] believes the $2 million investment will yield $31 million in ‘net city fiscal impact.'”. So, yeah. Not too shabby.
However, we’re guessing that more than a few people in Irving that might be a little bent out of shape about this, so if you’ve got any more information on this deal, let us know.
When Deloitte Did the Math, It Needed $2 Mil From Dallas, Or Else It Was Going to Irving [Dallas Observer]
This whole tax shelter problem for KPMG is back from the dead, as a former partner who was indicted and later exonerated of the charges has sued the firm for “attorney fees, lost wages, and future earnings,” according to the L.A. Times.
David Greenberg’s lawsuit alleges that “[he] was singled out as a rogue employee to cover up the company’s own widespread practice of tax evasion and conspiracy. The suit says KPMG publicly accused Greenberg of committing crimes and allegedly tried to divert attention from its illegal practices.”
So, yeah, that kinda sounds ugly. Nineteen people were originally indicted in 2005 for the tax shelter schemes and the lawsuit alleges that Greenberg is the only person whose legal fees have not been paid by KPMG. He also claims that he’s still being named in lawsuits and has amassed $10 million in legal fees. Dude’s probably a little pissed.
Continued, after the jump
Natch, KPMG isn’t amused by the whole accusation of ‘widespread practice of tax evasion and conspiracy’ and released the following statement:
“The claims throughout this lawsuit are baseless,” KPMG spokesman Dan Ginsburg said. “We will use all appropriate measures to defend ourselves…This lawsuit attempts to revive issues that are long dead,” Ginsburg said. “Mr. Greenberg released KPMG from any obligation to pay his legal expenses in a 2003 agreement which has been upheld by the court.”
Hell, if that’s true, then this thing should get thrown out, no prob, right? WTFK really but it’ll be fun following how nasty this gets.
Oh and just for fun, Greenberg is suing for an additional $20 million for “…defamation and emotional distress from spending five months in jail.” Not sure where Greenberg did his time but if the digs qualify as PMITA prison, then $4 million a month is probably fair.
We realize that it’s still early in LA for a Monday but if you’ve got insider information on this story, shoot it our way. You know, the ugly stuff.
Former KPMG partner sues accounting firm for $30 million [Los Angeles Times]
Awhile back we told you about Salz’s dissatisfaction of the diversity at Deloitte, regardless of their long-standing commitment to it.
After the Web CPA piece, Dr. Phil is steppin cussing Deloitte’s recruitment of students on community college campuses in last Friday’s Business Week. The article points out up front that, “Deloitte CEO Barry Salzberg likes to talk about the value of diversity. But of the 4,500 partners and other top executives at his firm, 92% are white.” We did the math, that’s less than 500 non-white partners.
So this is obviously a public relations problem that the firms would rather not have, since as we’ve noted, they love, love, love to point out how diverse they are, regardless of what others are saying. The facts simply seem to be that accounting, as an industry, doesn’t seem to be that diverse:
Continued, after the jump
For Deloitte, the hope is to reach high-potential people of color at community colleges, interest them in accounting, and then shepherd them through a university to a job upon graduation. If it works, it could turn around a troubling trend. In 2004, African Americans represented 1% of all CPAs, Latinos 3%, and Asians 4%, according to a U.S. Treasury Dept. report on the profession. By 2007 the figures were unchanged, if not down slightly.
Okay, so those numbers aren’t good for anyone. They’re especially not good for the image of the firms or the profession. Deloitte’s plan is to recruit on six community college campuses to try and convince the students that accounting is a kick ass career. Obviously that’s easier said than done:
Deloitte will have to do a fair amount of myth-busting. Many students believe accountants don green eyeshades and plunk away at calculators all day. So Deloitte is sending a brigade of up to eight staffers, including at least one senior partner, to enlighten, mentor, and ultimately guide potential recruits toward an accounting career. In visits to the campus classrooms, the partners plan to share workplace perspectives and explanations of how the industry has broadened to include financial, management, technology, and human capital consulting. “I don’t think students realize the vastness of what you can do in accounting,” says Gregory Brookins, a CPA and associate professor at Santa Monica Community College. “They feel like it’s a boring bean-counting job.”
‘They feel like it’s a boring bean-counting job’? GASP. How’d they get that impression?
Not everyone is on board with this plan, specifically, E&Y, “…it recruits from four-year universities where students get credits toward the CPA exam. That’s something “a two-year program doesn’t offer,” says Ken Bouyer, Americas Director of Inclusiveness Recruiting for Ernst & Young.”
Plus, since accounting firms like to pitch their professionals’ merits when courting new clients, there is a worry that community college grads are jumping up and down to brag about their less-prestigious education regardless of the accomplishments they’ve made professionally.
So accounting firms and the accounting industry appear to have an old white boy’s club problem. Is Deloitte taking the right approach? Is E&Y’s attitude short-sighted? Discuss your thoughts in the comments.
Deloitte’s Diversity Push [BW]
Your patience is unmatched, Klynveldians.
Rumor is that the Advisory practice in the Southeast region is having a conference call today (which is slightly more awkward than a voicemail) with all the non-exceptional managers and staff to communicate their banishment to compensation-Siberia. Our source indicated that this has never been done before, in case it sounds strange.
If you’ve got more details on this call or if you’re in another region and have details drop us a line. In the meantime, you’ll probably have to live with the official silence until at least Monday.
UPDATE, 4:02 pm: All right you guys. Sounds like it was a pretty awesome call. If you’re
not above under an “SP5” you might actually get a pay cut and there’s no chance in HELL that you’re getting a raise. Also, apparently the HR rep phoned in from home and his dog was barking in the background which just crosses the line of appropriateness in all kinds of awesome ways. We’re picturing a pomeranian (can’t leave them alone, they eat the bloody furniture) but if we’ve got it wrong, please let us know.
Jesus, that was fast. After Wednesday’s snoozer raids at the E&Y office in Hong Kong, Icelandic police have raided the offices of KPMG and PwC in Reykjavik, Iceland, according to the Daily Telegraph.
More, after the jump
Police have raided the offices of KPMG and PricewaterhouseCoopers (PwC) in Reykjavik, seizing documents and computer data as part of an investigation into alleged criminal activity at three collapsed Icelandic banks…The office of Olafur Thor Hauksson, the Icelandic investigator charged with examining the collapse of
the three banks a year ago, confirmed that 22 policemen and six foreign accountants took part in the searches yesterday.
Six accountants? Whoa, this thing was way more serious. No coffee and bagel strategy here as it would have totally distracted the investigating accountants from their jobs.
Likewise, we doubt anyone was strapped for this raid. Especially the number crunchers. We can definitely picture them begging the police though, “C’mon, they don’t even have to be loaded. We’ll just leave them in the holsters. WE SWEAR.”
The most excitement that we can envision was some bean counter trash talk that may have escalated into open-hand slaps and flailing arms and legs. The real police, after enjoying this hilarious scene for a few moments, would have had no choice but to break up the nerd fight as it began encroaching on the investigation and other people’s personal space.
KPMG and PwC Reykjavik offices are raided by Icelandic police [The Daily Telegraph]
We don’t know what to make of the raid at the E&Y offices in Hong Kong that occurred yesterday. We’d like to think that it was something out of 24 where Jack Bauer was “forced” into an impossible situation where he had to shoot a sheisty auditor in the leg to find out where the “certain documents” were.
Alas, it sounds as though it was considerably less dramatic, falling way short of anything worthy of the Absurd-o-meter.
The HK Fuzz probably even talked it over before going to the E&Y digs and said, “We’re going where? Accountants? We don’t even need our guns for this one. Let’s just take coffee and bagels and they’ll probably do whatever we ask.”
We’re probably not far off as E&Y was sure to reiterate their intent to ‘engage with and further investigations into the Akai matter’. Bor-ing.
Not that we were expecting much but it would have been nice that if just once we’d hear about accountants stonewalling some authority figures. Instead, the Head of E&Y China is stepping down, which is hardly the same as a vast conspiracy that may or may not involve the President of the United States. Sigh. There’ll be a next time soon enough.
It’s been fairly quiet since this past Tuesday’s layoffs but it sounds like lots of cuts occurred in national support services in Montvale, NJ. We also received a tip that the Richmond office let go a few professionals from their Internal Audit Risk & Compliance team which adds to the advisory cuts that were reported last week.
We also got more details on the Chicago office’s layoffs of tax professionals:
In addition to the 5 from ICS there were at least these:
• 4 in Fed Tax (Consumer Markets) – 1 manager, 2 seniors, 1 associate
• 1 in SALT – manager
• 1 in EVS – senior manager
• 3 in Fed Tax (Real Estate) – 1 managing director, 2 seniors
There were lots of rumors of it continuing this week, so continue to keep us updated. The bright side is today is New Year’s Day in the land of Klynveld.
So it’s October 1st, and several Klynveldians have got ants in their pants. Here’s one source that echoes many:
I work in the SE and they haven’t mentioned raises at all and I was promoted to senior in july. We usually have some sort of idea or at least have our meeting scheduled. However nothing…
We touched on this two weeks ago and other than some sit-downs in the Mid-Atlantic, it’s all been speculation about what the Radio Station will actually be doing re: merit increases.
The debate was polarizing, with some claiming the incommunicado was typical and others saying something should have been communicated by now.
Promotees, non-promotees, whatever your sitch, discuss your anxiety (and continue speculating) in the comments. Email us if your region gets word, for better, for worse.
UPDATE, 12:36 pm: Email has been sent to those in the Mid-Atlantic that discussions with ‘designated partners’ will be had next week.
The U.S. numbers are out, $10.7 billion, according to Deloitte’s U.S. website but the global page still only has the fiscal year ’08 numbers. The U.S. numbers are essentially flat from fiscal year ’08 revenue of approximately $11 billion.
We don’t really know what the problem is but we understand that math is hard sometimes so we’ll just wait patiently until the global numbers come out. God knows we’d have pandemonium if Deloitte was a SEC registrant filing the 10-K but hey, that’s one big advantage to a private company: We’ll report our revenue when we’re damn good and ready so you can all piss off.
Fine. We can wait.
In the meantime, some interesting data that is presented on the U.S. page so far includes:
• “Staff” dropping 1,490 while “Partners” went up 14 from FY ’08 to FY ’09
• Two offices were either closed or consolidated as the number went from 92 to 90
• Total number of CPA’s went up over
3200 from approximately 8,700 to just under 8,900
So at first glance, it appears that Big D had a similar ho-hum year to E&Y but we’ll withhold final judgment until the global numbers come out. Feel free to speculate on the delay of the global numbers or if you dare to eat donuts that look like a Smurf/Braveheart reenactment occurred on them.
Editor’s note: Francine McKenna is a regular contributor for Going Concern
We’ve gotten reports of recent layoffs of over 100 professionals in the Advisory practice and 40 in U.S. IT. The IT professionals were out of the Tampa office, including some that were Lotus Notes developers. Right. We didn’t know anyone still used Lotus Notes either.
Sources indicate that this was more “forced ranking” layoffs as many were high performers that were dismissed because of suddenly ‘less than expected’ ratings. We’ve covered PwC’s less than clear approach in the past.
PwC has not immediately responded to our requests for comment.
We reached out to Francine McKenna, of Re: The Auditors and she provided this comment:
“PwC is the biggest abuser of the “forced ranking” approach, artificially downgrading folks to make them feel lousy, alone, and uncomfortable discussing or otherwise reacting to getting let go. They refuse to admit they are overstaffed because they would view it as a direct indication of their inability to manage effectively (notice I said manage, not lead).”
If you have more details on these layoffs, send us an email to our tips address and discuss in the comments.
The U.S. numbers are out, $10.7 billion, according to Deloitte’s U.S. website but the global page still only has the fiscal year ’08 numbers. The U.S. numbers are essentially flat from fiscal year ’08 revenue of approximately $11 billion.
We don’t really know what the problem is but we understand that math is hard sometimes so we’ll just wait patiently until the global numbers come out. We all know what happens when SEC registered companies reports late.
Advantage to a private company: We’ll report our revenue WHENEVER THE F*(K WE WANT.
Some interesting data that is presented on the U.S. page so far includes:
• “Staff” dropping 1,490 while “Partners” went up 14 from FY ’08 to FY ’09
• Two offices were either closed or consolidated as the number went from 92 to 90
• Total number of CPA’s went up over 300
So at first glance, it appears that Big D had a similar year to E&Y but withhold judgment until the global numbers come out.
Hyperbole Earnings season begins, Big 4 style, as E&Y has reported its global revenues of $21.4 billion for its 2009 fiscal year.
The Americas saw a drop in revenue of 5.5% to $8.6 billion and all other areas saw drops as well except for in Japan where E&Y made everything up with a 20% increase. In USD, this was a 6.8% drop in revenues from the prior year with revenue of $23 bil.
More, after the jump
Transaction Advisory Services saw the biggest drop in revenues (14.8%), followed by Assurance (6.3%).
The Americas region also saw the largest drop in people, approximately 3,000 less than fiscal year 2008, a drop of 4.5%. Globally, the firm’s headcount was essentially flat with Japan, again, showing the largest increase of 12.1%.
Ernstiverse Global CEO and Chairman (not to mention Head Global Accounting Standards Cheerleader), Jim Turley:
“I’m extremely proud of how our people adapted to this challenging year, and how they’ve worked so well with our clients to help them through these difficult times,” said James S. Turley, Global Chairman and CEO of Ernst & Young. “Flat revenues certainly don’t tell the whole story of this year, as we continued our investments in people and in building our markets, while helping our clients with the unusual and difficult issues they faced. FY09 will be remembered more for these activities than for top-line results.”
So we’re curious, Ernsters. How will you remember FY09? Will you remember ‘investments in people and building the markets’ rather than the ‘top-line results’? Discuss in the comments.
Ernst & Young reports fiscal year 2009 global revenues of US$21.4 billion [E&Y Press Release]
Following the Grinchy yet charitable ways of KPMG and E&Y, rumor has it that P. Dubs is passing on holiday parties in all offices and donating $1.5 mil to charity instead.
Odds on Deloitte making a similar announcement prior to Halloween to complete the Scrooge Superfecta are currently going at 5-2.
Layoffs of client service support professionals occurring circa now.
UPDATE, 4:28 pm: Rumor is that layoffs will continue through tomorrow. One source informed us that 25% of the Information Security Department in Montvale, NJ was let go. Continue to keep us updated with any developments.
Really, he said that global standards were ‘imperative’ which carries a much more serious connotation and we’d hate to sell Big Jim short:
‘It is imperative that there is one set of financial reporting standards for the world if the quality and comparability of investor information is to be protected.’
And in an amazing coinkydink, that’s what everyone at the G-20 said too:
More, after the jump
In a statement the leaders said they: “call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.”
Since so many big shots were in the Burgh, last week, JT figured he’d just put it out there that his firm was FIRST! to say, “Yeah, we’re down for redoubling our efforts! Whatever that is, we’ll do anything! Don’t know about the rest of you slackers but we’re damn proud to get on this. June 2011? No problem. Am I right people?”
Ernsters? Ready to double down? It’s imperative, you know.
Big Four firm backs G20 accounting stance [Accountancy Age]
Unless you hate golf and then you probably don’t give a damn.
Phil Mickelson may have turned his year around as the walking billboard for KPMG. Fill came from behind to win the Tour Championship yesterday, winning by three strokes over some no name. Apparently the Tour Championship is a big tournament so Fill/Phil* should feel good. You ALL should.
This will require a serious reassessment of Phil’s prior rating that we gave him last month after the PGA Championship.
We need your input on how to rank everyone’s second favorite golfer to be sponsored by an accounting firm. Give us your expert analysis in the comments on the impressive win and if you’re good, we’ll throw a 9-box out there at some point.
*Do we need to vote on this? This seems like a polarizing debate. Discuss.
The Institute of Chartered Accountants in India (ICAI) have found two former employees of Satyam and four Price Watherouse India auditors guilty, according to Times Now:
Continued, after the jump
Two Satyam officials found “prima facia guilty” are Ex CFO V Srinivasu and Senior Vice-President, Internal Audit Cell, V S Prabhakara Gupta. The disciplinary committee also found four auditors from Price Waterhouse, Bangalore–S Gopalakrishnan, Srinivas Talluri, P Shiva Prasad and C H Ravindranath prima facie guilty of professional misconduct, [ICAI President, Uttam Prakash] Agarwal said.
The exact repercussions of this are not clear so we’re trying to run someone down at PwC to enlighten us. Hell, if you’ve got the knowledge, please share. In the meantime, as far as we know, two of the auditors are still in jail which probably made for a less than pleasant summer vacation.
As if there isn’t enough bad blood in the land of Klynveld, we received this tip:
Not only did the firm spend thousands of dollars to send new hires to Rome, they also gave then [sic] all single rooms. Roomates [sic] are required for all staff level people at firmwide trainings.
We looked around and depending on when these new associates were in Rome, it may have been god-awful hot, so it couldn’t have been that great of a trip. Then again, we’re not familiar with this whole Italian get away so if you’ve got details, discuss in the comments or shoot them to us.
Obviously we were too busy promoting democracy and creativity to notice Deloitte getting named in Private Capital Management co-founder Bruce Sherman’s lawsuit against Bear Stearns.
Continued, after the jump
The lawsuit, filed Thursday in U.S. District Court in Manhattan, alleges that [Jimmy “Don’t Call Me Cheech”] Cayne and others at Bear made material misrepresentations about the company’s financial health and its risk management, causing Sherman to hold shares of Bear stock he “would otherwise have sold months before Bear ultimately collapsed.”
“Defendants knew that the market and the financial press would view Sherman’s sale of his Bear stock as a loss of confidence in Bear by a well-known and long-standing investor,” the lawsuit said. “This, in turn, would have undermined confidence in Bear’s management at a critical time when Bear’s liquidity and Bear’s valuation of its assets were open to question following the implosion of two Bear-sponsored hedge funds in the summer of 2007.”
Cayne; Warren Spector, Bear Stearns’ former co-president and chief operating officer; Bear Stearns; and its outside auditor Deloitte & Touche are defendants in the case.
Regardless of what Deloitte ‘knew’, the firm did not jump at the chance to start a trend of Big 4 firms issuing mea culpas. Big D issued the following statement, which we plan on to memorize for future reference, per the Journal, ‘Deloitte believes the complaint to be totally without merit and we will defend against it vigorously.’ We’ll continue to update you on the vigorous defense as it progresses.
PCM Co-Founder Sues Bear Stearns For Misstatements [WSJ]
The British government has denied a change in the law there that would limit audit firms’ liability. The Big 4, who seem to enjoy a far more prestigious and influential existence in Britain than in the U.S., lobbied for a change to the law but it was ultimately dismissed by the British Business Secretary.
The British government cites existing law that would allow companies to reach agreements with their auditors to limit their liability.
Continued, after the jump
Under present company law, directors can agree to restrict their auditors’ liability if shareholders approve; however, to date, no blue-chip company has done so. Directors have seen little advantage in limiting their auditors’ liability, and objections by the US Securities and Exchange Commission (SEC) have also been a significant obstacle.
Ahh, the SEC, exerting its far-reaching influence another over sovereign government, not to mention their stellar track record . This does not amuse in the UK:
Peter Wyman, a senior PwC partner, who was involved in the discussions, said that the Government’s lack of action was disappointing. He said: “The Government, having legislated to allow proportionate liability for auditors, is apparently content to have its policy frustrated by a foreign regulator.”
The firms are lobbying, not solely for their own survival, dammit, but the sake of everyone, “They warned that British business could be plunged into chaos if one of them were bankrupted by a blockbuster lawsuit.”
We’re not really sure what ‘choas’ would entail. Hank Paulson had his own version of financial Armageddon but we hardly think that’s a plausible scenario if a Big 4 firm were to fail.
Perhaps there would be an army of accountants roaming the streets in zombie-like states offering their excel expertise to anyone that would accept it. While this is a completely horrifying scene, we’re skeptical of true ‘chaos’.
If you’ve got your own visions of chaos in the event of a large firm failure, describe it in the comments.
Audit firms left unprotected against claims of negligence [Times Online]
Also see: No legislated cap on audit liability [AccMan]
Look. We’re not saying that World of Warcraft is geeky. We’re sure that it’s a very challenging game and some very talented people put it together and continue to work on it. There just seems to be a particular segment of the population that is repeatedly associated with the game. So for the purposes of this discussion, World of Warcraft qualifies as geeky.
We’re all familiar with the reputation of accountants and people that work for the Big 4, so there’s not much to discuss there.
Continued, after the jump
Considering these two factors, why in the name of everything that is good and holy would Deloitte decide to put out an in-depth analysis on “performance improvement” that incorporates said game?
For all impractical purposes, we’re going to ignore any valid conclusions that the authors came to. That’s not what this is about. This about the authors cementing the stereotype of bean counters being not just geeks, but now super-geeks.
Don’t you recognize what we’re trying to accomplish here? There is serious cause for concern. Get someone on this before we get all Glenn Beck on your ass.
The collaboration curve: Exponential performance improvement in World of Warcraft [Deloitte]
Dammit people, if someone is going to go to the trouble to sue the #1 company in all of Great Britain for every bloody list that can possibly be put out could we possibly get a more anti-climatic ending?
Mihaela Popa, who was obviously unaware that accountants are made to feel like prosties all over the world on a daily basis, hence, why the f*ck are you so special, wound up receiving £750 from a tribunal, according to the Romanian Times.
More, after the jump
“We find that in no way whatsoever did the unlawful victimisation either prevent Miss Popa from obtaining employment or cause her to lose employment. There was no loss of opportunity in this case. It is simply a case of injury to feelings.”
Maybe we’re a little shrewd but repeatedly seeing your name in the British press next to ‘whore’, ‘prostitute’, and ‘communist spy’, and then for a court to basically say you’re thin-skinned, all for £750 seems totally worth it.
Earlier: What if Everyone Sued Their Employer for Being Made to Feel Like a Prostitute?
Not too much explanation needed. E&Y auditors at the Emmys. Leave your caption suggestions in the comments. We’ll run a poll next week with the best submissions.
A former KPMG partner has pleaded guilty today to conspiracy charges related to tax shelter scheme.
According to the WSJ, “[Robert] Pfaff is currently serving a 97-month prison sentence after he and two others were convicted on tax evasion charges last year in a case once billed as the largest tax-shelter fraud case in U.S. history. In that case, prosecutors had alleged that Pfaff and another former KPMG employee left KPMG in 1997 and formed an investment adviser known as Presidio Advisory Services, which was little more than a ‘tax shelter mill’.”
Doesn’t ‘tax shelter mill’ sound like a wonderful place of capitalistic creativity and entrepreneurship where things just magically happen and you don’t why or how? Sort of like a financial Charlie and the Chocolate Factory? The kind of place where you wish you worked?
Ex-KPMG Tax Partner Pleads Guilty In Tax-Shelter Case [WSJ]
There are several cities where we can confirm layoffs but total numbers are hard to come by and KPMG is not returning our calls/emails at this time. Here are cities that we definitely know got hit:
• Chicago – At least five in Int’l Tax. At least one in financial services tax.
• Denver – Transaction Services
• Kansas City – Six to eight in Tax
• Houston – Transaction Services
• San Fran – Five in Fed Tax
• LA and OC – Several comments report ten to twelve in tax for LA, five for OC
• DC/Tyson’s Corner/McLean – Between five and eight total in tax and advisory.
• Silicon Valley – Thirteen total.
Five to Seven Mostly in Tax, possibly some in EVS and one in Transaction Services.
• Seattle and Portland – Two in Tax for each
• Salt Lake City – Three in Tax
• Detroit – Three to five in Tax
• Jacksonville, FL – Two in Tax
• New York – Three in the transfer pricing specialty group in the tax practice. Three in the real estate practice. According to our source, these were performance performance related.
• Boston – Two in Fed Tax and one in M&A
• Nashville – Two in Tax
• Tampa – Two in Tax, one manager and one SA
We haven’t been able to confirm much out of the New York office, although it sounds as though Transaction Services has had some cuts. If you’ve got new details on any city, let us know.
UPDATE: See updates above. Altogether it appears to be over thirty-five in the west alone. Continue sending us updates.
UPDATE, Thursday, 11:54 am: Information is still crawling in. We heard that the number of nationwide layoffs for Advisory was 50, including 20 in the NY/Boston offices but we’re still waiting on more information. Continue to send tips in and make sure you note which office you’re in. Oh, and apparently the Dallas office needs SA’s in audit.
UPDATE, Friday, 12:30: Still a few tips coming (see updates above) in but it seems the worst (hopefully) is over.
UPDATE, Monday 3:04 pm: Just a couple more updates above for Nashville and Tampa.
Late November is typically a time of year when most of you can coast a little bit. Oh sure, some of you certifiable types are still working like your miserable lives depend on it (and probably not charging the time) so we’ll ignore you for this particular post.
We learned yesterday that the New York and Philadelphia offices of E&Y are apparently so strapped for time during the eleventh month that the annual accounting & auditing update has been scheduled for the 21st which is on a…wait for it…Saturday. That’s EVERYONE, staff through partners.
Now maybe there’s a perfectly good explanation for this odd scheduling. Perhaps the rulers of the Ernstiverse aren’t down with the whole day of rest thing. Or they figure since you’re getting two days off the following week, your ass is lucky that you’re not working Sunday too. Whatever the case may be, E&Y seems to be good at making promises so don’t make plans.
The Chicago office is the first to report having the sit-downs. Five professionals in one of the specialty tax practices at all levels except partner. We’ve seen several comments from people that have received emails but we haven’t received any confirmation and we’re still waiting to hear back from KPMG.
If you have severance details, number let go, or other information, send to [email protected] or discuss in the comments.
Not that Klynveldians need reminded but tomorrow is the rumored next round of layoffs. This time its rumored to be the tax practice and perhaps the advisory practice as well making cuts.
Someone in the Philadelphia office got their call earlier than planned according to a tip we received:
…one associate who received a phone call at 3:00 PM letting her know that her services were no longer needed. She was initially told this would likely happen on the 21st, but for some reason, the powers that be thought it more appropriate to call someone on the 15th
If you’ve got details on your office or if you have received a request for a meeting, let us know and we’ll continue to update you as we hear more.
Big D is probably just a pawn in the whole game but it serves as a nice example of how Illinois political tomfoolery touches just about anyone and everyone.
And Rod Blagojevich is just ridiculous and not relevant for this story but his picture seems to work here, so deal with it.
A criminal investigation into Cook County Board President Todd Stroger that started with questions surrounding the hiring, promotion, and firing of a busboy. Stroger then fired his own cousin, “the county’s chief financial officer amid questions about her dealings with [Tony] Cole.”
Cole is said busboy who must have made a move on Stroger’s cousin but enough speculation. The investigation has now grown wider as prosecutors have now subpoenaed Deloitte.
More, after the jump
Prosecutors have ordered Deloitte & Touche LLP, the county’s auditors, to turn over “certain documents” pertaining to the 2008 audit of county finances, according to a memo from County Board Finance Committee Chairman John Daley (D-Chicago), who also heads the Audit Committee. Deloitte personnel “may serve as witnesses to a current grand jury investigation,” according to an attached letter sent to Stroger from Deloitte’s Tracey Guidry.
It should be noted that John is the brother of Richard, the Mayor who was elected around the time when the Cubs last won the World Series.
The only word on the documents are that they were used in the ‘customary preparation’ of the audit, according to the Sun-Times.
Safe money is on at least one resignation/removal from office and a small fortune being discovered to have passed through various channels of the City Hall.
Todd Stroger: Probe expands into Cook County Board president’s hiring of ex-busboy [Chicago Tribune]
Today in dorks in tuxedos news, E&Y is finishing up their counting of the votes for this weekend’s Emmy Awards and hopefully they can handle it.
From the press release:
“We work very hard to safeguard the entire voting process and take the appropriate measures to preserve the accuracy and confidentiality of the awards,” explained Andy Sale, Ernst & Young LLP Lead Partner for the 2009 Emmy Awards. “Our team uses a combination of technology and traditional hand-counting methods to deliver accurate results.”
The technology methods must be terribly advanced for this complex engagement and since some partners can’t even send email, we’re a little concerned. Especially since three people memorize the list of 109 winners.
Plus, since this the 21st time E&Y has done the awards, we’re assuming there will be jager shots before, during, and after the show. Not only will this not help with the whole memorization issue but it could also jeopardize the envelope handoffs and projectile vomiting will blow whatever slim shot they had at hooking up with Christina Hendricks.
Good luck E&Y. Don’t f*ck it up. And if you have second thoughts on sharing results early, you know how to reach us.
The UK’s annoying hot crush on PwC continues as the firm has won the The Times High Fliers Top Graduate Employer of the year award.
This is the sixth year in a row that P. Dubs has won this award. They were also named top accountancy firm for the tenth year in row and won the top finance company award this year, the first time an accounting firm has won the award.
We know it’s a little late on a Friday to be asking our UK friends to participate but we’d really like to know how P. Dubs manages to win all these awards.
The vote early, vote often mantra immediately comes to mind but is it legitimately possible that PwC is really the best place to work in the UK year after year? Whatever the case may be, it’s just annoying.
If you’ve done some time across the pond and have stories of Google-esque cafeterias, rub n’ tugs, puppies for everyone and the such, let us know, otherwise, debunk.
PwC voted best place for graduates [Accountancy Age]
Possibly following the Radio Station’s lead, E&Y’s New York office is giving consideration to ix-nay on the Holiday Party-nay.
This really makes sense since 5 Times Square is in the middle of all the action, everyone can go to TGI Friday’s instead. Separate checks of course.
E&Y did not immediately reply to our request for comment.
There’s been rumors about pay freezes at all firms and E&Y came out last month to say it’s happening mostly because it’s fair.
Since many of you Klynveldians are probably anxious for some kind of “official” word, we’ll pass this along:
Rumor is the Radio Station will be announcing raises and bonuses on Monday/Tuesday in the Southeast next week (rates are loaded online on the self service connection next Friday for all to see, so talk about waiting until the last minute).
Firm leadership is saying KPMG will pay market and market rates are down when compared to the prior year… so here’s to no raises!
Ernstinites got a voicemail announcing the news which didn’t seem to go over well, so here’s hoping that some kind of live feed from Tim Flynn’s office will be KPMG’s approach for this announcement with Q&A to follow of course. More personal that way, don’t you think?
If you’ve got information on your city or region matching the market rates, drop us an email to us or discuss in the comments.
UPDATE, 2:57 pm: Apparently the offices in the Mid-Atlantic are willing to sit down with you to discuss this as we received a tip that “roundtables” were held by partners to explain the merit increases. Beats a voicemail. If you participated in one of these sit downs or had similar meetings in your region, discuss further.
KPMG’s new arrangement with Rentokil has brought some differing opinions amongst the firms, even prompting PwC to take a not-so direct jab at the Radio Station for scooping Rentokil.
Today, KPMG’s head of audit in the UK, Oliver Tant, wrote a piece for Accountancy Age explaining the firm’s new “extended assurance”:
Continued, after the jump
Under the service, those responsible for corporate governance may ask KPMG to perform work beyond that which is required for the statutory audit, for example by testing a larger sample of controls or additional transactions and balances of lower value than the materiality level set for the statutory audit.
This work does not replace, conflict with or undermine the independence of the external audit it simply extends our understanding of the business and its controls and hence the breadth and depth of insight we can offer. That is why we call it extended assurance.
Mr. Tant also cites the savings passed along to the client, which is so hot these days. He also explains what “extended assurance” is NOT:
The service is not about merging the external and internal audit functions. A company can continue to have its own internal audit function and those charged with corporate governance will still be responsible for assessing the overall adequacy of a company’s control environment and the need for skilled internal audit expertise.
Ethical standards do not prevent the auditor from doing more than the bare minimum to support the audit opinion. We will identify and plan the work necessary to support our audit opinion independent of any further work we may be requested to perform.
As we mentioned, PwC has already made their opinion known and E&Y’s head of assurance in the UK, John Flattery has stated that they will not be “mirroring the arrangement.”
It’s already been speculated that this type of arrangement would not be allowed in the U.S. but there has been no indication that the U.S. firm is pursuing such arrangements.
Since independence is kinda, sorta important for auditors, and many of you are ramming these rules into your brains as we speak (or just waiting to see if you learned anything) discuss in the comments how you feel about the arrangement. Would it pass the smell test Stateside? Is KPMG evolving to the market or are they on thin ice? Are P. Dubs and Ernie being self-righteous dicks since they didn’t think of it first? Feel free to get ugly about it.
KPMG audit head defends controversial Rentokil role [Accountancy Age]
Studying for CPA exam got you down? Tired of choosing between sleeping and listening to Peter Olinto’s melodic voice talking about partnership basis calculations?
Luckily P. Dubs feels your pain. We’ve heard from a couple of sources that PwC is pushing sabbaticals for those of you that are scoring just slighty better than Tiger Woods.
We’ve heard that San Jose is offering tax associates 20% of their salary through the end of the year to get their act together. We also hear the same offer has been made to audit associates in New York. We would assume it’s on the same time frame since both offices will need every warm body available come 2010.
We kindly requested some details from PwC but they haven’t gotten back to us.
If you’ve got more details on this offer from Dubs or are considering participating so you can strike the Pedro and T. Gearty from your gray mass, discuss in the comments.
News from E&Y in SoCal is that those second year associates that were getting raises to put them at a pay level above the newbies are getting a 1% increase to put them there.
Personally, we’d rather be in pay raise Siberia with the rest of you than get 1% but a firm’s word is its bond. If Zitor has given you similar good news for your office, discuss in the comments or shoot us the details to our tips mailbox.
UPDATE, September 21st, 12:20 pm: Another tip out of Chicago confirms Uncle Ernie’s promise-keeping ways, giving the new 2nd Years, a 1% bump.
A little follow-up from our request for the latest on highly anticipated post-September 15th layoffs. Here’s what we’re hearing:
Sources and some comments have indicated that the dates to be wary of are today the 16th, tomorrow the 17th, next Monday the 21st, and next Tuesday the 22nd. The word is that these will be tax and advisory practice cuts only.
KPMG did not immediately respond to our request for comment on these dates. If you have specific information on your anything going down at your office send us the scoop at [email protected].
The KPMG Director who rammed about £500,000 expenses back to the firm was sentenced to four years in jail in London today.
Andrew Wetherall, claimed that “when his wife’s previous partner tried to reduce maintenance payments, he was worried her lifestyle would suffer. Her spending sprees came to about £15,000 a month, the court was told. The court heard he was desperate to avoid marital tension or a divorce so made bogus expense claims.”
Four years in jail over marital tension or divorce? This was the dude’s second marriage. That’s about average these days so we’re not sure about his decision making ability.
Is this true love, stupidity, or enjoying a loose expense reimbursement policy at play here? Discuss.
Finance director jailed for fraud [BBC]
In, if first you don’t succeed suing your former employer news, a London Employement Tribunal opened yesterday for a former PwC forensic accountant who is suing P. Dubs for £40 million after the firm was exonerated in a similar suit she brought in 2007.
More, after the jump
Mihaela Popa claims that while she worked at PwC in London, the following allegedly happened:
• She was made to feel like a prostitute
• She was told ‘Eastern European women are whores’
• She was known as ‘Mihaela and porn’
• During the initial swine flu hoopla, she was told ‘this Romanian bird will have a slow death’
• She also claims that some co-workers thought she was a Communist spy
For all this alleged name calling and accused espionage, Ms. Popa is suing PwC for “£40 million in compensation for loss of earnings and hurt feelings”. That tidy sum wasn’t just pulled out of the air, mind you. This is because she “previously claimed that she was given promises she could become a £750,000-a-year partner.”
Since being made to feel like a whore is common at accounting firms many of you have referred to yourselves as such, we’re not sure that “being made to feel like a prostitute” really flies with us.
As for the Communist spy charge, we can’t barely recall a time when this actually mattered, since the Cold War effectively ended 20 years ago.
P. Dubs “strenuously denies the allegations” but we could probably all agree that there are a few bigots working at PwC in London. On the other hand, this could said about any firm, in any city in the world.
Discuss your thoughts on the case, and if you feel more like a whore at your job then Ms. Popa, in the comments.
Accountant claims £40m from PricewaterhouseCoopers [Telegraph via Accountancy Age]
No doubt that you remember E&Y’s Grammy-worthy attempt at a theme song/torture method from last week.
We have now discovered that KPMG also thought this was worthy of the firm’s resources. The only problem we find is that the songs sound oddly similar in melody, atrocious use of harmony, etc. This kind of artistic double-agentry between the firms only reaffirms are suspicions about the firms working together in some sort of oligopolic conspiracy of which the purpose is, we haven’t figured out, except maybe to perpetuate the use of Excel.
After the jump, we’ve provided links to both songs here so that you can provide your expert analysis on which firm has the best song. And by best, we obviously mean drives you to agony similar to Alex DeLarge/Beethoven-esque levels. In addition, feel free to provide your favorite lyrics in the comments.
If you recently find yourself unemployed and either you were here on a visa or you’ve had enough of the old US of A, Deloitte is here to help you this week. On Wednesday, the big D is providing a 90 minute webcast for its alumni who are looking for work internationally.
Since Deloitte is a big shot accounting firm that is always on top of this whole economic sitch, they’re providing a webcast for you former Green-dots to figure out how to go to another country ’cause your chances of getting a job States-side are pretty much zilch.
Get details, after the jump
As colleagues for life, our alumni are an important part of the Deloitte culture. You have made significant contributions to Deloitte over the years, and in similar fashion we are committed to continually supporting your journey as you increase your personal market value.
Join us on Wednesday, September 16, 12:00 p.m. EDT for expert advice and tips from members of the Deloitte Global Talent Acquisition and Mobility team…Located in London and Amsterdam, our presenters have their thumb on the pulse of the international job search and will examine ways to navigate a marketplace job search outside of the U.S. Topics covered will include:
• What parts of the world are hiring right now
• How to market yourself for international jobs
• How to maximize your chances of getting a job outside the US
• How to prepare yourself for job interviews outside the US
• How to integrate if you do relocate
• How to negotiate an offer outside the US
Nevermind the tricky part about how the hell you get to Johannesburg once you’ve landed the new gig. That’s all on you.
“can i ask why we just hired three people and have one intern for audit and then two of them are going to Rome for trainig [sic]???”
Yes, you can ask. We’ll put it out to the group. Thoughts?
We’re not sure when Deloitte dropped the hammer on Pandora but the timing of us hearing about it is dubious since the coveted #1 spot on BW’s list is safely in print.
Much like E&Y, we’re curious as to the motivation here. Bandwidth sucking notwithstanding, your morale doesn’t seem to be much of a concern here. Green dots, kindly discuss in comments your theories behind the latest buzz kill. The rest of you (minus E&Y, natch) can share what you’re listening to currently as pure schadenfreude.
With all the bitterness out there, we’re really not sure why this particular person is getting attention.
We surmised yesterday that the Brits seem to take a more active interest in all things bean county but their articulation in farewell emails certainly can’t be superior to yours. After all, you can’t hear the accent when you read.
After the jump, a taste of the bitterness that’s getting lots of attention in the UK:
Today is my last day at PwC. I haven’t sent this to everyone because what would be the point? Why do people send their leaving emails to everyone? We didn’t care about you then and we certainly don’t care about you now.
I still presume hardly any of you knew me, which is good because I’m rubbish at audit, so I wouldn’t have helped your stellar careers.
I’ve also learned how not to decorate an office – green and orange block colour walls with business buzz phrases on. ‘Find your space’, ‘always add value’ etc. Where do these terrible phrases come from? Is there a team of people lurking about in Embankment Place whose only duty is to pump out corporate drivel?
I look forward immensely to never having to attend an event in which Our Beloved Leaders stand up and tell us we’ve massively exceeded budget, so in reward we get no bonuses and instead we get the treat of listening to Coldplay while quotes from the greatest leaders of our times are played across a screen.
I’m also on Facebook but I hate it. I’m sure you’ve got real friends of your own and I’d prefer if you left me alone quite frankly.
If we ever talked (doubtful, I avoided anyone that looked like they might give me some work), add away.
I’ve left some treats in the group area.
Bye forever xxx.
PwC accountant’s email is global hit [Telegraph]
More rumors out of KPMG today as the audit practice in New York will be ramping up to 50 hour weeks approaching October. Apparently the extra 32 hours for the entire month that was originally required will not suffice.
This follows a similar request put out to the Klynveldians on the left coast. Unless you’re a football fan or trying to observe religious holidays, this doesn’t strike us as much of a problem.
FINS.com has a piece on the Big 4’s recruitment of MBA’s that serves as lukewarm encouragement for those of you have considered the painstaking thought of going back to school.
More, after the jump
PricewaterhouseCoopers is ramping up its hiring of M.B.A.s, with plans to recruit 75 to 100 business-school graduates in 2010. [The Firm] planned to bring on 60 to 90 graduates from master’s degree in business programs in 2009, up from 40 last year…An improving economy and the need to make sense of new regulatory guidelines in the financial sector are what’s driving the trend
As you might expect, the hiring occurs in the advisory practices of the firms while those of you with that went back to get a master’s in accounting will most likely end up in audit or tax practices.
At PWC, most M.B.A. recruits have three to seven years’ experience and fill senior associate posts in its advisory practice. The M.B.A.s that it hires are recruited to work in finance, operations and supply-change management and human-capital management.
The article is less enthusiastic about the other firms, however:
Big Four rival Ernst & Young is hiring about 20 b-school grads into its performance-improvement practice this year, dipping from a peak of 25 in 2007 when it began hiring M.B.A.s…While KPMG does not actively recruit M.B.A.s since its consulting practice spun off in 2002, it does targeted M.B.A. hiring, according to Malana Sanders, a KPMG recruiting director…Deloitte does hire M.B.A.s, though, said Diane Borhani, head of U.S. campus recruiting for Deloitte in Chicago, who declined to provide specifics
So we’re at a loss on how we feel about this. On the one hand, it’s good to see at least one firm ending the slash and burn that’s been going on for the last 12-15 months (even if this is just advisory) but are you ready to go back to eating cup o’ noodles, no keg stands, and more school debt to do it?
Since it sounds like layoffs will occur regularly at the firms and BW says that two-thirds of you leave the firms within five years anyway, going back to school may be in the cards for a lot of you.
For those of you that fall in the 3 – 7 years experience range, discuss what, if any, thoughts you’ve had on going back to school and if would you go with a Big 4 firm. Scary thought, we know.
PricewaterhouseCoopers and Rivals are Recruiting More M.B.A.s [FINS.com]
We really have to hand it to some of the creative minds at E&Y. The quality of what they produce is overwhelming. All this and they ban Pandora? We’ll never understand accounting firm reasoning.
Anyhoo, the offbeat clapping is one thing, Zitor is quite another, but now we present you with the following:
Frankly, this is getting ridiculous. We got wind of more staff layoffs going down in the Metro audit practice in New York today. Sounds as though emails may have been sent out last night and meetings are being held today.
One explanation we heard was that associates not currently assigned to a client were let go which seems dubious, even for an accounting firm, but we’ll run with it. If you’re one of the unlucky few, or have details on rumors concerning next week, drop us a line or discuss in the comments.
Today, in how your firm spent your bonus news, we present you with Zitor, an alien who somehow ended up in Uncle Ernie’s shop. Zitor then ended up being assigned a counselee for year-end reviews which is fairly realistic considering his lack of expertise and work experience.
Zitor was apparently designed and plugged into the Ernstiverse to demonstrate how to be completely unprepared for a the year-end review process as a counselor.
What’s odd is that most counselors seem to be using logic from another planet so it’s not outside the realm of possibility that this was based on actual methods used.
Regardless of the genesis of this idea, it probably goes without saying that this had to be complete and utter failure for those of you with maturity levels above the age of 13. Nevermind that no one can decipher how accounting firms determine who the best performers are anyway.
Included with this frivolous attempt to relate to the troops, if you were so inclined, you could submit ideas for the line below from Zitor to end up in the next video for this “Coach from Another Planet”. While that sounds incredibly lame and worthy of our ridicule, we’ve decided to let you take a stab at it instead.
The line has been modified slightly to allow your much more creative suggestions to be submitted in the comments:
“At E&Y, we do not give feedback. We give ___________.”
Do your worst.
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.
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
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]
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]
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.
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]
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?
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]
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”.
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.
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.
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…
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.
A 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]
The 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.