One anonymous independent trading client of MF Global said “It’s a joke. I don’t know what’s happening to my positions and when I’ve tried to contact KPMG all I’ve been told is that I can send an email to which I get an automated reply.” [FN, Earlier]
Category: KPMG
KPMG Is Confident That MF Global Clients Will Get Their Money
That is, in case you were worried. Reuters reports that Richard Fleming, the Head of Restructuring in the UK, said that “It’s still a large number. It’s still billions,” but so far things are moving quite nicely. “Our strategy this morning has been … where we have clients whose position is reconciled, and are due funds, then that money will flow.” Keep truckin’! [Reuters]
MF Global Owes CNBC More Money Than PwC
As you may have heard, MF Global Holdings filed for Chapter 11 bankruptcy protection this morning. You may have also heard that for some strange reason, MF owes CNBC about $845k and change. Turns out, that is more money than it owes to PwC ($312,598), Alvarez & Marsal Tax Advisory Services ($65,000), The Siegfried Group ($30,000) and KPMG ($10,000) combined.
The bright side for P. Dubs is that they got most of the $12 million that they charged the company with last year. Of course if the shareholders take this bankruptcy as well as Lehman’s have (not to mention the NYAG and the State of New Jersey), then that really doesn’t serve as much consolation.
PwC Wasn’t About to Let October Pass Without Announcing Their Latest Talent Acquisition From KPMG
If you’ve been paying attention, you know that PwC has made KPMG it’s own personal farm system for partners and directors. It seems that P. Dubs follows all the talent out there and then simply calls the men and women up when they’re ready for the big leagues. We’ve noted four press releases put out by PwC announcing appointments of partner/directors that were brought over from the House of Klynveld. And who knows how many other, non-PR worthy partners, have also joined Team Autumn. Trust us, it’s happening; we hear things.
ANYWAY, in today’s Daily Grind newsletter, I wondered if PwC would take the opportunity of All Hallow’s Eve to pull a trick on KPMG, announcing that yet another partner or director had recently joined up with P. Dubs. My wonderment was largely in jest but I guess I’ve misunderestimated the scamps in PwC’s communications department:
Eric Israel, who joins PwC as a managing director, is a former KPMG managing director and that firm’s US advisory practice leader on climate change and sustainability. He has more than 25 years of experience with KPMG where he began his career in the Netherlands as a Chartered Accountant. Later, Israel moved into sustainability consulting where he has focused his work for nearly 14 years. Israel has global experience in sustainable development concepts and application, finance and sustainability assurance, climate change and carbon consulting & verification, business research and development, as well as knowledge management and corporate governance. He also has participated in the work of organizations such as the Global Reporting Initiative (GRI), the Sustainability Consortium and the AICPA’s and CICA’s joint Sustainability Task Force.
Israel co-founded KPMG’s Global Sustainability Services practice and wrote KPMG’s first Sustainability Audit Manual. He received his BA in Accounting and Business Administration from the University of Amsterdam, Netherlands. He will be based in PwC’s New York office.
In other words, Izzy is was KPMG’s Global Sustainability practice. He wrote the audit manual for crissakes! Of course since he’s just a co-founder, that hopefully means that his fellow co-founder is still around. At least until he/she gets their own press release.
PwC Gives KPMG a Break, Appoints Insider as New Head of U.S. Tax
I guess it was funny the first four times (and that doesn’t count the chumps that don’t get press releases) but for the extra special positions, P. Dubs must prefer to keep things in house.
Mark J. Mendola has been named as PwC’s U.S. Tax leader and a vice chairman of the firm. He will also serve as a member of the firm’s U.S. leadership team and the global Tax leadership team. Additionally, he will be responsible for the network of Tax practices across the Americas, including Canada, Mexico and South America.
For those keeping close tabs on this sort of thing, MJM joined PwC in ’86, no doubt inspired to join the tax practice thanks to the efforts of the Gipper & Co. He joined the partnership in ’98 with no indication that he strayed to the HoK. Word on the street is that KPMG is pretty bent out of shape over the competitive poaching, so PwC must be backing off. For now, anyway.
[via PwC]
Layoff Watch ’11: KPMG Asking for ‘Voluntary Redundancies’ Down Under
From the land that brought you Michael Andrew:
KPMG is to push ahead with a round of voluntary redundancies following a slowdown in merger and acquisition activity. The privately-held firm launched the cost cutting program this week, offering voluntary redundancies and part-time working options for its 5000 Australian-based staff.
[…]”We’re seeing a tough, uncertain, challenging and patchy market,” KPMG’s Australian chief executive officer, Geoff Wilson, said yesterday. But he declined to say how many staff would be affected by the shake-up. “While we’re experiencing year-on-year growth, we’re seeing some softening in that growth. [We are trying to] create flexibility in response to the patchiness we’re seeing in the market,” he said.
Crikey. I guess by “create flexibility” Mr. Wilson means, “Your work-life balance is going to get a whole lot easier.”
KPMG calls for redundancies amid slowdown in mergers [SMH via Francine McKenna]
Let’s Get to Know KPMG’s New International Chairman, Michael Andrew
Yesterday we learned that new KPMG International Chairman Michael Andrew doesn’t think too highly of second-tier accounting firms. Sure, they might have fancy ad campaigns, or offer Starbucks cards for being tattletales but could they audit a global bank? No. Hell no. Rubes. According to Andrew, those firms are “quite lazy” about investing in their businesses which means you couldn’t trust those audits as far as you could throw them.
But perhaps that wasn’t the best introduction for the man replacing Tim Flynn (who is, frankly, irreplaceable). Luckily, in addition to the FT piece we mentioned yesterday, there was also a much longer profile of MA that will give you a better idea of the man who has to fill T Fly’s shoes.
For starters, being the chair of an international accounting behemoth can be a quite the harried job, it’s important that Drew be afforded the quickest transport possible:
Holding court in a hotel at London’s Heathrow airport, Michael Andrew is boasting about how easy it is to get from his desk to the runway back home in Hong Kong. “I basically walk out of the office and they guarantee me to be sitting on the plane in 45 minutes,” he says.
The new chairman of KPMG International is not trying to rub salt into the wounds of harried air travellers in the UK and US. Rather, the 55-year-old Australian is explaining why he recently became the first head of a major global accounting network to be based in Asia.
And since he is based in Asia, this should put everyone on notice that the House of Klynveld isn’t caught up in the old world thinking of being centered in New York or London like other firms:
The bosses of KPMG’s three bigger rivals – PwC, Deloitte and Ernst & Young – are all based in New York or London: “We are trying to say we are a much more globally balanced firm.”
Okay, so PwC had over $29 billion in revenue. And Deloitte’s results were nothing to sneeze at. Even E&Y managed to put up a decent number. But do their respective Chairmen reside in the eastern hemisphere? I think you know the answer.
But just because he is the new Chairman of one of the largest accounting firms on Earth, you might expect that Drew is caught up in the high-flying lifestyle of a rockstar accountant. Sure, he golfs like the rest of you but that shouldn’t give you the wrong idea about Mike:
Mr Andrew’s hobby of racehorse breeding suggests he is more unbuttoned than the stereotypical accountant, even though three of his horses are called Discretion, Tactfully and Chatham House – the latter a reference to the famously off-the-record UK forum. But Mr Andrews himself is certainly willing to make punchy comments.
That’s right. This means stomping through shit. Bossing stable boys around. Firing trainers when necessary. Clearly, he’ll get down in the mud if he has to.
KPMG Chairman Michael Andrew Dares You to Imagine a ‘Lazy’ Second-tier Firm Auditing a Global Bank in This Day and Age
“Can you imagine a second-tier firm auditing a global bank at a time when there is already a lack of confidence in the marketplace?” He added: “They simply don’t have the skills or the market expertise.” He also accused some smaller rivals of being “quite lazy” about investing in their businesses. [FT]
Thankfully, Dillard’s Disputes with Audit Firms Haven’t Resulted in Anyone Disappearing into Thin Air
Your mother’s third favorite department store, Dillard’s, has fired PwC as their auditor over a dispute related to the timing of a “tax benefit related to its new real estate investment trust.” The Little Rock-based company replaced P. Dubs with KPMG (who will take every chance they can get to stick it to Team Autumn). Basically the two didn’t see eye on this matter (here’s the 8-K that explains it), Dillard’s asked the IRS for their opinion, who said the treatment was kosher and next thing you know, the audit committee was on the hunt for a replacement.
Anyway, this isn’t really news until you consider the fact that PwC had only become Dillard’s auditor in 2009. Deloitte had been the auditor of the company for 20 years and in many auditor-client relationships, that’s just the honeymoon phase. So that seems a little odd. And couple that with the most recent firing of PwC and you’ve got to wonder what’s the scoop is over at DDS. But all that pales in comparison to this:
In 2008, [Dillard’s] had a dispute with CDI Contractors LLC’s chief financial officer [Ed. note: Link is broken], John Glasgow.
At the time, Dillard’s owned half of CDI. It has since bought the half that it didn’t own.
Glasgow objected the way Dillard’s CFO James Freeman was conducting an audit of CDI. Glasgow disappeared during the dispute and was declared dead [Ed. note: Ditto] more than three years later, although no trace of him has been found.
After Glasgow’s disappearance, Dillard’s restated earnings for several previous years, blaming an accounting error by CDI.
The last thing we want to see are pictures of auditors on milk cartons.
Dillard’s Fires PWC After Accounting Dispute, Hires KPMG As Auditor [AB]
Promotion Watch ’11: KPMG Admits 166 New Partners in the Americas
That’s right boys and girls, 166 new lucky Klynveldians will be taking a seat at the big kids table, only to be poached by PwC in the next 2-3 years. Despite the risk that many of these new partners will trade blue squares for autumnal Atari, John Veihmeyer and Henry Keizer were excited to welcome the newest members of the club:
“These new partners are role models for high performance – with a passion for quality, an unyielding commitment to integrity and outstanding service, and a dedication to helping clients cut through the complexity in this dynamic environment,” said John B. Veihmeyer, Chairman of KPMG’s Americas region and Chairman and CEO of KPMG LLP (U.S.).
“We are very proud of each of these new partners, and we look forward to their continued leadership. We’re especially grateful to the spouses, family, friends, coworkers, and mentors who have played a key role in their development and their career success,” Veihmeyer said.
Henry R. Keizer, Deputy Chairman of the Americas region and Deputy Chairman and COO, KPMG LLP (U.S.) said, “With their steadfast focus on technical excellence, professionalism, teaming and relationship building, these new partners have helped us make great strides in achieving our strategic priorities.
“Their ability to engage and motivate our people has also been critical to our efforts in fostering a high-performance culture – thereby driving the firm and our people to the next level,” Keizer said.
The KPMG press release doesn’t have a breakdown of the numbers but luckily we got our virtual hands on an email that has the breakdown. We won’t name names but it’s probably moot since someone at PwC Experienced Hire recruiting probably has them all on a hit list already. ANYWAY, here’s the breakdown by service line for the U.S. (74 new partners):
Advisory – 26
Audit – 27
Tax – 21
And by line of business:
Information, Communications and Entertainment – 12
Financial Services – 17
Healthcare and Pharm – 5
Industrial Markets – 19
Private Equity – 4
Mid Market – 3
Government/Public Sector – 1
Consumer Markets – 9
Other – 4
Congrats to all the new partners!
[via KPMG]
Silvercorp Metals CEO Reminds Everyone That They’re a ‘Real Company’
As we’ve discussed, Silvercorp Metals hasn’t appreciated the anonymous letters floating around the Series of Tubes accusing the Canadian miner of accounting fraud and has stated that, save their assets in China, “this wouldn’t be happening.” What the company would really like is for these jerks to show themselves and cooperate with investigators. But until that happens, Silvercorp hired KPMG to poke around to calm all the fears out there. According to reports, the House of Klynveld will have a report out soon but in the meantime, Silvercorp CEO Feng Rui will address everyone who thinks that his company is just a bunch of Tonka trucks in a sandbox:
“We’re a real company and will fight against shorters and distorters,” Feng Rui, Silvercorp chief executive officer, said today at a meeting in Beijing.
Furthermore, the auditors in this matter, Ernst & Young, have carried out their duties to a T and if you think some bullshit letters are going to cause them (or Feng & Co.) to do things differently, you’d be wrong:
“Our auditing doesn’t have anything wrong, the allegations are fabrication,” Feng said today in an interview on the sidelines of the meeting.[…] “The allegations won’t prompt us to make any changes in the process of financial reporting and auditing,” he said
Frankly, it’s embarrassing that they even have to address this but you’ve given them no choice.
Silvercorp Says KPMG to Issue Fraud Allegation Report ‘Soon’ [Bloomberg]
KPMG Is Going to Buy Itself Some Indentured Servants in the UK
There’s nothing like buying your loyalty. I’m not saying Big 87654 programs like this aren’t somewhat good for the morale and worth the firms’ dime(s) not just to buy loyal servants but also to help prepare future capital market servants in general but it’s sort of a scam. Sometimes, these education programs don’t work out and the slaves revolt, as happened with this young man in an undisclosed market somewhere in a state that ends in tts.
Anyway, KPMG wants to recruit a whole bunch of 18 year-olds into its work/school program (across the pond they call this a “scheme,” which makes it exponentially more funny) by next September. The House of Klynveld will pay these kids’ tuition fees and pay them a whopping starting salary of £20,000 ($31,460 in Fed Funny Money).
Here’s a brief and completely related link to an article on indentured servitude: “Servants typically worked four to seven years in exchange for passage, room, board, lodging and freedom dues. While the life of an indentured servant was harsh and restrictive, it wasn’t slavery. There were laws that protected some of their rights.”
Sound at all familiar?
According to The Telegraph, the course opens its doors to 90 students for the first time this month, with two-thirds of entrants coming from state schools or colleges, compared with around half from the traditional graduate entry route.
More than 1,000 would-be ex-KPMGers applied for the program, and that number is expected to rise year over year. They say that’s because tuition is up to £9000 a year (about $14,153 but there’s a Fed meeting fast approaching, that number is subject to change) but my guess is mediocre performers need jobs and accounting isn’t that bad of a gig for some of them. I’d also guess that a few of these program “graduates” actually go on to have successful careers.
If you remember, one former participant of a similar program once (allegedly but eloquently) wrote to his former colleagues “I’m pretty sure it would have been easier to escape from Auschwitz than a YMP contract. I knew from the second week I start here that this wasn’t going to work out.” Ernst & Young’s Your Master Plan nurtured one hell of a profanity-laced, poetic farewell email, a true testament to its power. One requirement for the program was advanced written and verbal communication skills… it’s a wonder Uncle Ernie didn’t call Craig immediately and ask him to come back with a fat raise.
Anyway, the head of audit at KPMG told the Telegraph “At a time when many young people, graduates included, are finding it difficult to gain employment, this programme represents a credible alternative to mainstream university education and provides an attractive route into employment for talented students.”
I highly – and I mean highly – recommended checking out the comments on the Telegraph article, as it finally identifies the link between public accounting and anal rape that we have been trying to pinpoint for years. It’s the one that starts off with “If you work at a large accounting firm, beware, it is perfectly acceptable for the large accounting firm to tell massive lies about you such that you will be butt raped repeatedly…” You can’t miss it.