Category: News

Look, You Guys, You Should Really Be Thankful for Enron’s Bankruptcy

One of the first things I saw this morning in my Twitter feed was this missive from one of the Grumpy Old Accountants, Ed Ketz:


Now, I don’t know Professor Ketz personally, but my highly acute sarcasm detector is going batshit crazy. Less subtly, MACPA Editor Bill Sheridan gives us the timeline of the events that transpired starting with Enron’s filing. Bill gets a little weepy about the whole affair, writing:

Remember how utterly chaotic that time was? News that shook CPAs to the core surfaced almost daily, and the next day brought even worse news.

Okay, I was in college when Enron went bankrupt so I don’t remember things being “chaotic” unless you count the whole “9/11 was less than 3 months ago” thing. What I do remember was an Andersen partner who came to campus for our Accounting Society meeting (BAP didn’t have a chapter at my school) alone and he didn’t really seem to know anything more than what I imagine was being reported in the news and our faculty advisor noticed it too. So for him and his fellow partners, yes, things were probably royally sucking. And yes, things did get worse when Andersen was convicted* of obstruction of justice, surrendered their state licenses and closed up shop.

So maybe all that stuff is bad. Maybe it’s really fucking bad and it causes people to cringe to think about it but even Bill sees the upside:

You could argue that the profession is better off because of it. We took our lumps, rolled with the punches, and emerged on the far side stronger and more trustworthy than ever. “That which doesn’t kill you,” etc., etc. Still, I’m not in any rush to go through something like that again. Are you?

Jesus. Can we quit acting like Enron is still a big deal? Lehman Brothers was the size of ten Enrons. TEN. And Ernst & Young, no matter what happens, looks like idiots and continues to claim that they bear no responsibility and everything is still hunky dory. Andersen got off easy. Enron went bankrupt. The firm got fired. And fired again. And again. Then the firm died. The end. Their partners and employees moved on and everything was cool. I mean seriously, even C.E. Andrews got another job. If Ernst & Young continues on, they’ll have this hanging over them until something worse happens. Enjoy that.

But back to Enron. Thanks to Enron, we got Sarbanes-Oxley. We got The Smartest Guys in the Room. And we got that awesome Heineken ad. If you think about it, lots of you probably got your job thanks to Enron. Which means you probably owe your house, your spouse, your dog and a whole bunch of other shit to Enron too. You should be thanking your lucky stars that Jeff Skilling was such a ballsy mark-to-market wizard.

And yet people choose to remember it as, “That one time where we almost DIED!” And the mainstream press, in its blissful accounting ignorance, loves to dig it up in every article that is remotely accounting related.

I don’t know about you all but I’ve moved on. Enron was this bad thing that happened to the accounting profession but other bad things have happened – far worse things – and other equally bad things will happen. Maybe if people had learned something the last ten years and tried to do things better instead of maintaining the status quo, there wouldn’t be a French guy busting your chops. Here’s to the next 100 years. Thanks, Enron.

*SCOTUS overturned the conviction on a technicality (apparently an important one) but that doesn’t bring the firm back now, does it?

There Are a Lot of Hungover, Newly Chartered Accountants in Canada Today

We like to cover the international scene as much as we can but it can be tough sometimes when NO ONE EMAILS US. If you’ve got some from north or the border, south of the equator or across an ocean, simply email us at tips@goingconcern.com and we’ll spice things up around here with some international flair.

I only bring it up because this morning a Canadian reader informed us that today is a big day up north.

I’ve noticed the content on GC is nearly entirely CPA-focused, even though there’s plenty of readers from north of the border! I realise this is likely partially due to the fact that Canadian readers aren’t helping contribute enough. In an effort to help spread the love, I provide the following:

As a bit of background to our system, Canadian Chartered Accountants (CAs) must pass a single national final exam called the Uniform Evaluation (UFE). The UFE is a three-day national exam held once a year in September. The results are then released nearly three months later, usually on the first Friday of December (today!). It’s generally tradition for all the writers (and those that support them) to head out to the bar the night before to help ease the anxiety of checking the results in the morning, which leads to a lot of cheerful new CAs with hangovers today. This tough day of work at my firm (and many others) consists of champagne breakfast with colleagues, lunch with the partners and the office heading back to the bar by 3pm.

Congratulations to all the new CAs!

Scores are officially released at 12 pm so if you’re waiting to enjoy some Mimosas until you get the official word, that’s your choice but either way, you can use this post as a thread for your pre-noon-newly-minted-CA-partying purposes.

The Accounting Ethicist Goes Off the Reservation

If there is a single thing I enjoy about this job, it’s definitely not my esteemed colleague Colin or whatever his name is, but the fact that I get to hang out – and subsequently, get to know – CPAs. Sometimes that’s on Twitter, or speaking at a Stanford class or scurrying through the secret tunnel underneath the Senate and House office buildings. I get to show up late (sorry, the BW Parkway sucks) to Tom Hood addressing a room of young CPAs, asking their opinions on how they want to shape the future of the industry. Somehow I even got invited to Council, and got to see the entire machine in action from the inside, surrounded by CPAs. It’s a pretty awesome gig.

So with that in mind, esome for me to watch a contact sort of deviate from the program. I’ve seen it happen here on GC, the “accounting industry standards” come wandering over here because they want to seem clued in to whatever it is we’re talking about. They’re both fascinated and mortified that we’ve taken accounting to this horrible place. They can’t look away. But they are also so distanced from what we’re doing that they can’t quite grasp the program. Still, they try.

I’m not narcissistic enough to take credit for this but let me just tell you what I saw.


Accounting Ethicist was a project by Seton Hall University Chair of the Department of Accounting and Taxation Mark Holtzman. The project is still there it’s just… uh… changed.

This all started when I inadvertently trolled Mark with a piece by Accounting Onion that accused accounting professors of being poorly assimilated to the idea of blogging. Mark wrote:

I’m sorry to say that accounting doesn’t make for very interesting blogging. See any interesting tax footnotes lately? How ’bout that new FASB proposal? IFRS is already a joke – how many bloggers do we need to point that out? Here comes “Little GAAP.” Is there anything interesting to say about “Little GAAP?” And while I’m at it, have you ever seen the list of topics at a AAA meeting? There could be more accounting professor blogs, yes, but who would want to read all that cr@p?

Right. Who would want to read this bullshit?! To me that’s offensive, I’ve somehow spent the last two years writing about this crap (just swear, Mark, it feels good. You’re allowed to say crap on an accounting blog) and he basically said that my shit is a joke. I know I’ve written some bullshit in my day but every now and then I do genuinely care about what I’m writing about, so it’s shitty to imply that everything I do is too boring for any human being to digest. You CAN make more IFRS jokes, bro, they’re never-ending. It doesn’t have to play out like a fucking AAA meeting, though we’re not against showing up at one of those either. That’s the benefit to having a single location (here) for the profession to behave at its worst (you guys) and just get it out of their systems so they can effectively check those boxes (your job, sorry).

So, at the time Mark got trolled by us, his blog was pretty tame. He asked questions within the agreed-upon “respectable” limit hoping for a reaction. As anyone who isn’t us can tell you, talking about ASCs is not going to make for very lively convo with anyone, even people who are kind of into that tedious shit.

But then just now, Mark has reappeared (as FreakingCPA) dropping such headlines as “Hans off our GAAP!” That’s pretty epic.

In “Why do smart people do stupid nasty things?” he writes:

This obviously has many parallels to the accounting profession. Unfortunately, many accountants and executives have chosen to procrastinate and perpetuate frauds, rather than reveal them. Dr. Kahneman’s research shows that, when confronted with this choice, many people can’t accurately measure the risks.

He admits to reading GC so maybe we did have a small part of this transformation. I can only hope.

Rebranding can be dangerous but sometimes it’s exactly what a non-believer has to do to realize that there are people who do care about this tedious shit, you just have to package it in a way that makes them feel as though they are actually enjoying it.

Stupid Man Frustrated with Girlfriend Engages in Random Act of Accounting Firm Violence

Are you a jobless loser? Is your significant other driving you batty? Not sure how to vent your frustrations? One man found himself in such a predicament an acted in the best way he knew how:

An unemployed man who smashed the window of a Burton accountancy firm during a heated row with his girlfriend has been ordered to pay £750 compensation.


Luckily, Craig’s Guy moment of rage resulted in some poetic justice for Mom and Pop accounting firms everywhere:

The 28-year-old, of Balfour Street, Horninglow, was left with a ‘substantial injury’ to his wrist after he punched and shattered the 10ft by 5ft window on Monday evening. Emma Thompson, prosecuting, told magistrates: “It was 6pm when two witnesses saw the defendant put his fist through the window. Police were called and they traced him 45 minutes later in Evershed Way. He was found to be bleeding heavily. “He made full and frank admissions straight away and said he’d had a heated row with his partner,” Ms Thompson said. “He told officers he punched the nearest thing to him and he accepts it was a stupid thing to do.

[via Burton Mail]

Aronson, LLC Spent $100,000 to Give iPads to All of Its Employees

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Has your firm shown you any appreciation lately? Made you feel loved? Did you have a single reason to be thankful for anything last Thursday? For some, the answer is a resounding “Hell no.”

This is not the case at Rockville, Maryland-based Aronson, LLC who shocked the pants off all of their 200+ employees with iPads at their annual meeting.

Why would a firm would do this, you ask? Is management trying to a prevent a winter exodus? Was it a banner year for the firm and they opted to spread the wealth around? Maybe. But right now they’re going with “appreciation” and a anniversary:

Aronson LLC, the Mid-Atlantic region’s premier public accounting and consulting firm, surprised its staff at its November Annual Meeting by handing out over 200 iPads, one for each and every Aronson employee. The company’s offering, valued at nearly $100,000, was made both to celebrate the firm’s 50th Anniversary (coming in 2012), and to demonstrate appreciation for the employees’ dedication and hard work.

Motives notwithstanding, it beats kick in the shins. All non-Aronson employees may commence envious bitching as they see fit.

[via Aronson]

Costa Rican Auditor Admits To Never Actually Auditing

Provident Capital Indemnity Ltd’s former outside auditor admitted in federal court this week to participating in a $670 million fraud in the life settlement bond market, according to the Department of Justice.


56-year-old Jorge Castillo pleaded guilty Monday to one count of conspiracy to commit mail and wire fraud, U.S. Attorney Neil MacBride in Alexandria, Virginia, said in a call with reporters. He could face up to 20 years in prison.

Castillo admitted to conspiring with PCI president Minor Vargas Calvo to prepare false financial statements that reflected contracts PCI held with other reinsurance companies. Castillo admitted to prosecutors that he never audited PCI’s financial statements and that he was aware PCI did not actually enter into the contracts with other reinsurance companies listed on the company’s financials. PCI paid him about $84,000 from 2004 to 2010.

Castillo will be sentenced in a Richmond, VA federal court on May 22.

DOJ: Purported Auditor Of Provident Capital Pleads Guilty In Scheme [WSJ]

Focus Media Management: Muddy Waters Has It All Wrong, Should Be Sued For Being a Rumor Monger

Focus Media Chief Financial Officer Kit Low disputed Muddy Waters’ claims on a conference call Tuesday with analysts, saying that the firm’s report misinterpreted LCD-display numbers and financial data. He said Muddy Waters concentrated largely on Focus Media’s mergers and acquisitions, but the company hasn’t made any “major acquisitions in the past three years” because it is putting more emphasis on its core business. Focus Media Chief Executive Jason Jiang criticized short-sellers in a message posted on his verified account on China’s Sina Weibo microblog service. “Why isn’t anyone suing these short sellers who are just spreading malicious rumors everywhere?” the message said. “These people should be punished according to the law!!!” [WSJ]

Jobs You Wish You Had: The New Orleans Court Accountant Who Made $661,000 Last Year

That’s not a typo, people, this guy made $661,000 in 2010 for services rendered to the New Orleans traffic court.


Vandale Thomas, a personal friend of Judge Robert Jones, billed the traffic court over $660,000 in 2010 for entire chunks of hours with zero description of what those hours entail. “There’s just aggregations of hours. Forty-five hours for this, 45 hours for that. And that’s it. On that basis, we paid, the courts paid $661,000 to this guy. We’ll be talking to people to try to make sure where the money went and what it was for,” New Orleans inspector general Ed Quatrevaux told local WWLTV.

On top of his billable hours, Thomas also was handed $100,000 from traffic court with no mention of what the fee was for in court records.

Well, let’s do the math (keeping in mind while we do it that I am anything but a mathlete). If Thomas billed $40 per hour (pulling that number out of my ass, much like Thomas likely pulled his hours), he’d have to work a little over 317 hours a week to validate a $660,000 salary for the year. The problem with that, of course, is that there are only 168 hours in a week. According to documents obtained by WWLTV, Thomas is billing $80 an hour, therefore by that math, he’d have to work 20 hour days every single day of the week for every week of the year to earn the $661,000 he billed.

Judge Jones, when confronted with the dollar amount of Thomas’ services, expressed shock, telling WWLTV he then called in Thomas and told him “unless you have an army of accountants working for you around the clock, this is humanly impossible.” Jones went on to say he supports an investigation of Thomas, but doesn’t think it will show any criminal wrongdoing.

I know armies of accountants and they don’t make that kind of money.

New MACPA White Paper Outlines Future CPA Leaders’ Vision For the Industry

Our favorite revolutionaries over at the Maryland Association of CPAs never take a vacation, and for those of you interested in leadership, you might be interested in their latest project. Or at least enjoy the following without making snide comments about overachievers that mask your true feelings of jealousy. Let’s face it, you’re probably not as cool as Tom Hood. It’s fine, just embrace it.


A team of graduates from MACPA’s 2011 Leadership Academy say CPAs must become more global-minded, proactive, future-focused, balanced and tech-savvy to maintain their competitive edge in a complex and constantly-changing world. Getting there, they say, will require a brand new set of skills and characteristics. Among them: Unity and flexibility, the ability to collaborate and crowdsource, a mind shift from history to possibility, and a new tech-focused mindset.

It is likely no coincidence that Gen Yers, as the future leaders of the industry, are hyper-connected, collaborative and far more interested in the “possible” than the “already been done.”

Forty members of the MACPA’s 2011 Leadership Academy used those infamous collaboration skills to shape a new MACPA white paper, “What Got You Here Won’t Get You There: Maryland’s Young CPAs Create a Vision of the Profession’s Future.”

“These young CPAs care deeply about their profession,” said MACPA Executive Director Tom Hood, CPA. “They know we’re facing an increasingly complex and challenging future, and they see each challenge as an opportunity not only to help clients and employers, but to position CPAs as the world’s most trusted business advisor.”

The white paper comes on the heels of the profession’s CPA Horizons 2025 project, which leveraged input from CPAs, regulators, thought leaders and futurists to identify key trends and map what the profession will look like in 2025.

The interesting part about the MACPA’s project is that opinions and visions are a dime a dozen in this industry, but Leadership Academy participants went beyond postulating about the future to map opportunities from a future CPA leader’s point of view complete with action plans, timelines and desired results. This isn’t simply a report on the state of the industry at some point in the future but a report on how young leaders can get us there in the here and now.

“There have been a lot of questions swirling about the next generation of business leaders. Topping the list is, ‘Are they ready to lead?’” said Hood. “Our Leadership Academy provides the answer: Not only are they ready to lead, they’re hungry to lead, and this white paper is their starting point.”

Download the white paper here. To find out more about the Leadership Academy, head here.

FAF Chairman Isn’t Interested in the FASB Taking a Backseat in Accounting Rulemaking

In a November 15 letter to the SEC, FAF chairman John J. Brennan wrote that reducing FASB’s role in setting U.S. financial reporting standards “may weaken the positive leverage that U.S. GAAP and U.S. standard setting have provided to improving accounting standards for investors in the world’s most robust and transparent capital markets.” The FAF also disputed the SEC staff’s proposed goal of achieving one set of global accounting standards. Instead, the organization feels that “a more practical goal for the foreseeable future is to achieve highly comparable (but not necessarily identical) financial reporting standards among the most developed capital markets that are based on a common set of international standards.” [CFO]

Lloyd Blankfein Would Like Everyone to Get with Program Re: Mark-to-Market Accounting

This means you, Steve Schwarzman. And you, writers of FASB hate mail. It’s about time you all got on board.

“We are not moving away from mark-to-market accounting,” Mr. Blankfein said Tuesday. “The more we work with it and live with it the more I wish that everybody else would act in a corresponding way.”

You have your orders.

Goldman to Maintain Accounting Method [WSJ]

Accountant’s Neighbors Disgusted with His Overgrown Bush

It would probably surprise no one that landscaping is hobby that many accountants are fond of. Or maybe it would. Whatever. The meticulousness of making sense of numbers seems to jive well with a finely manicured lawn, trees and bushes that adorn one’s property. Plus, the green thumb matches the eyeshade.

Anyway, putting all that time and energy into natural aesthetics could cause anyone to get a little possessive. If anyone so much as lays a finger on a single tree branch without permission, things could get ugly. To wit:

An accountant who allegedly left a former policeman bleeding and concussed in a brawl over hedge trimming before launching an expensive law suit has defended his response insisting: “It wasn’t just trimmed it was butchered”.

Now if that sounds like a bit of an overreaction, the accountant in question – Anthony Branson – claims that this incident was part of ‘extreme intimidation’ by his neighbors, the Marreros. Intimidation that was ultimately brought to a head:

The next day Mr Marrero, who had been away, sent family to attempt to finish off clipping the hedge, something Mr Branson said further antagonised the situation. He also claims he discovered the gates of the adjoining paddock, where he and his wife Corrinne keep around a dozen alpacas, left open, apparently deliberately.

Trimming a man’s bush without permission could be understandable. But dragging innocent, sometimes overly hairy, camelids into the situation? That just seems uncalled for.

Hedge brawl accountant: ‘It wasn’t just trimmed it was butchered’ [Telegraph]