When accounting goes unaccounted for
May 11, 2010 – The Boston office was evacuated due to a fire in the building. All Grant Thornton employees appear to have been evacuated safely.
Sure enough, we tried calling Beantown and we were automatically re-routed to GT New York. If you’ve got details, get in touch.
Over the weekend we learned that Grant Thornton was pulling up the stakes in Hawaii. According to our sources, the partners of the Honolulu office will be purchasing the business from GT and joining Pannell Kerr Forster, and international network of independently owned firms (U.S. locations).
GT Honolulu has approximately 60 professionals and according to one source familiar with the situation, all will be retained after the transaction According to our source, Doreen Griffith, the Honolulu Office Managing Partner will be moving to the San Francisco office to lead the tax practice there while Patrick Oki, an assurance partner will head up the new PKF office.
Our source told us that the reaction of the GTers was that of surprise but not upset, “I would say that employees are very happy but shocked.”
Grant Thornton’s disposal of this office follows the closure of its Madison, Wisconsin office, announced just last month and the Greensboro office that we reported on back in February. Several sources have speculated that Grant Thornton is moving out of smaller markets to focus business opportunities in larger markets.
Despite these moves, none of them had been previously mentioned on either of the the firm-wide calls held by Grant Thornton CEO Stephen Chipman held this year.
PKF North America’s President & CEO, Terry Snyder spoke with us briefly about the transaction, confirming that the partners in Honolulu were taking over the business from Grant Thornton and that Mr Oki “was the man to speak to.” He declined to comment on GT exiting the Honolulu market.
Messages left with Patrick Oki, Doreen Griffith and Grant Thronton’s national PR team were not returned. Emails to both Mr Oki and Ms Griffith were not returned.
If you have information on this transition in Honolulu, you can drop us a line at tips@goingconcern.com.
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
Don’t look for small businesses to lead the economic recovery.
The monthly reading from the National Federation of Independent Business Index of Small Business Optimism clearly shows little optimism among small business.
Sure, nine of the 10 components that comprise the index rose from the prior month.
However, some of the critical factors that would indicate whether small business owners plan to invest in their firms did not show encouraging results. The NFIB’s job measures barely moved and capital expenditure plans were flat.
More specifically, according to the survey average employment per firm was negative in April. What’s more, since July 2008 employment per firm has fallen steadily each quarter, logging the largest reductions in the survey’s 35-year history.
If small business is key to job growth – as some pundits think – then this does not bode well for our economy.
And the jobs small businesses create are not exactly great ones. They are more likely to come without benefits and less time off for vacation.
Meanwhile, the Index does not suggest that small businesses will be investing heavily in non-personnel. It noted that plans to make capital expenditures over the next few months were unchanged from the prior month and its reading is only slightly above the 35-year record low.
Yikes!
The survey also noted that small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stock. In fact, more owners plan to reduce stocks than plan new orders, according to the NFIB.
Meanwhile, regular borrowers continued to report difficulties in arranging credit. “Historically weak plans to make capital expenditures, to add to inventory and expand operations also make it clear that many borrowers are simply on the sidelines, waiting for a good reason to make capital outlays and order inventory that requires businesses to take out the usual loans used to support these activities,” the report notes.
Obviously, small businesses are not going to turn this economy around any time soon.
Michel Barnier is certainly doing his damnedest to make a name for himself by virtue of the accounting standards convergence and scrutinizing the role of auditors.
Accountancy Age reports his latest soundbite at a speech in Washington today, telling “leaders” that while their efforts to converge international accounting standards and U.S. GAAP are admirable, that he and the entire continent of Europe are getting sick of the stalling.
“I appreciate that the US authorities have made progress towards convergence, but in the EU, we are getting impatient.”
Apparently Mr Barnier has had enough with this little dance going on between the FASB and the SEC. The FASB has been punting to the SEC fairly regularly and we’re all aware of the SEC’s tendency for inaction, so maybe Barns figured that a Frenchman calling out Americans on their own turf would help move things along.
Barnier tells US that Europe is “getting impatient” on accounting convergence [Accountancy Age]
Sen. Sherrod Brown Prods SEC/FASB to Fix Accounting Standards [The Summa]
This is Professor Albrecht’s take on Senator Brown’s amendment SA 3853 to the S. 3217: Restoring American Financial Stability Act of 2010. The Professor is less concerned about this particular attempt at financial accounting legislation, reasoning that the SEC and the FASB have had plenty of opportunities to fix these issues (e.g. repurchase accounting) and have passed them up.
Given the severity of the problems, and the inability of today’s standard setters to gird their loins and solve the problems, is it appropriate for Congress to pass a law directing the SEC and its standard setter to produce a desired outcome? Absolutely. Accounting standard setting is an inherently political process, as I explained in my popular essay, “Economic Consequences and the Political Nature of Accounting Standard Setting.” Because the SEC has passed on its legislative charge to establish accounting standards that adjudicate between competing economic interests, and because the private standard setters follow their own political agendas when preparing accounting standards, it behooves Congress to step in when things get too far out of whack with national priorities. Such is the case here.
In other words, s— or get off the pot, FASB and SEC. The argument is a fine one, however, if legislation of accounting has to force the FASB’s into action, where does it end? When FAS 157 was being decried as the cause of all our problems, Barney Frank called in Bob Herz, scared the living bejeesus out of him, and got the result he wanted. Is that preferable to this situation? That depends. At the very least, the Sherrod Brown method susceptible to the influences of others while the B. Frank method skips the voting and signing stuff altogether (which has proven tricky in the past).
Former H&R Block CFO gets $620,000 cash in severance [KCBJ]
Becky Shulman (no relation to the Commish, as far as we can tell) is getting $620k for walking away from H&RB along with automatic vesting of 148,725 outstanding stock options. There’s no indication that she is eligible for lifetime complimentary tax prep service.
Intuit to buy Medfusion in $91M deal [SV/SJ Business Journal]
Intuit, owner of QuickBooks, Mint.com, Quicken, etc. has now added Medfusion to its stable, expanding its SaaS holdings. The deal is scheduled to close this July, the 4th Quarter of the company’s fiscal year. CEO Brad Smith, from the press release:
“This transaction expands our software-as-a-service offerings with a solution currently used by more than 30,000 healthcare providers, the vast majority of whom are essentially small businesses. The combination of Medfusion’s industry-leading patient-provider communication solutions and Intuit’s expertise in creating innovative solutions that improve the financial lives of small businesses and consumers, will help us create new solutions that make the clinical, administrative and financial side of healthcare easier for everyone.”
After the wisdom displayed by Senators in the Goldman Sachs hearing a couple weeks ago, it must have become evident to a group of concerned organizations took it upon themselves to voice concern with regard to any elected official that might give consideration to tipping his or her toe into the accounting standard waters.
Enter Son of Ohio, Sherrod Brown (D) who has proposed amendment SA 3853 to the financial regulation reform bill. The amendment would legislate financial reporting standards by forcing companies to “submit reports to the commission under this section record all assets and liabilities of the issuer on the balance sheet of the issuer.”
But don’t worry if you can’t figure out what the value of a liability is because you can just leave it off altogether granted that you don’t mind explaining:
“(i) the nature of the liability and purpose for incurring the liability; (ii) the most likely loss and the maximum loss the issuer may incur from the liability; (iii) whether any other person has recourse against the issuer with respect to the liability and, if so, the conditions under which such recourse may occur; and (iv) whether the issuer has any continuing involvement with an asset financed by the liability or any beneficial interest in the liability.”
While this seems all very well thought out, the CAQ, CFA Institute, AICPA, FEI and a gaggle of others smelled amateur hour and wrote a letter to the old boys in the Senate letting them know, in no uncertain terms, that this pretty much the worst idea they’ve ever heard:
[W]e are concerned with any amendment that would legislate accounting standards, including Brown amendment SA 3853 regarding “Financial Reporting.”
…
The accounting standards underlying such financial statements derive their legitimacy from the confidence that they are established, interpreted and, when necessary, modified based on independent, objective considerations that focus on the needs and demands of investors – the primary users of financial statements.
…
We believe political influences that dictate one particular outcome for an accounting standard without the benefit of a public due process that considers the views of investors and other stakeholders would have adverse impacts on investor confidence and the quality of financial reporting, which are of critical importance to the successful operation of the U.S. capital markets.
So in other words, Sherrod Brown, you can suck it. The FASB might not be hottest piece of ass around but by GOD, it’s what we’ve got. And we’ll be damned if you’re going to propose your hocus pocus American people Main St. financial statement Act.
Accounting Groups Object to Brown Amendment [Web CPA]
Standard_setter_independence_letter_to_Senate
If you were (un)lucky enough to live in one of the flood ravaged counties in North Jersey, Mass, or the entire Ocean State, hopefully you remembered that your extended period of procrastination ends tomorrow.
Yes, unfortunately the last four weeks have flown by and we’re sure that some of you have managed to piss away this time not preparing your tax return. Do yourself a favor and file the extension. You’re hopeless.
Relax, here’s the form.
When an airport is closed due to inclement weather, most people just shrug and realize that there’s nothing they can do about it. Oh sure, there might be a few lunatics who will yell at the ticket agent because they’ve somehow concluded that they have the ability to ring up the Almighty and put in a rush order of clearing skies but most people have the self control to internalize this.
In the case of Paul Chambers, an accountant in the UK, it wasn’t so much a ticket agent but his Twitter followers who heard his frustration. Chamber was understandably concerned that he wasn’t going to get laid due to Robin Hood Airport being closed this past January after a snowstorm. Chambers claimed that he Tweeted the following…
“C—! Robin Hood Airport is closed. You’ve got a week and a bit to get your sh– together, otherwise I’m blowing the airport sky high!”
…out of frustration because he was scheduled to fly to Belfast to meet Crazy Colours, whom he had met on Twitter. Prior to the C U Next Tuesday message, he had Tweeted to Crazy Colours, “I was thinking that if it does I’ve decided that I’m going to resort to terrorism,” presumably referring to another snowstorm that could potentially delay is upcoming travels.
Anyhoo, the Tweet was discovered by a Robin Hood Airport employee who was compelled to report the threat to authorities. Naturally this led to seven hours of questioning, the loss of his job, and a ban from the airport for life (later rescinded).
The judge ruled that the Tweet was ”of a menacing nature in the context of the times in which we live.” Chambers was fined approximately $1,500 and naturally, took to the Twittersphere with his thoughts on the matter:
Accountant used Twitter to threaten to blow up airport [Telegraph]
Briton Convicted for ‘Menacing’ Tweet Against Robin Hood Airport [The Lede/NYT]
When you become a partner at a Big 4 firm, the culture rewards you with certain privileges. Some of these include: 1) the ability to strut out the door before 5 pm and no one gives you the stink eye; 2) stealing food out of the fridge without fear of retribution; 3) “Black” Starbucks cards; 4) private bathrooms that blast “You’re the Best” when you walk in the door, among others.
Unfortunately, it turns out that sometimes you lose some privileges when you take seat at the big table.
We previously mentioned Colin Tenner, who is suing PricewaterhouseCoopers for disability discrimination, alleging that he was fired after taking time off due to depression and anxiety. His suffering was caused, he claims, by a client bullying him (e.g. taking his lunch money, using emails as TP and returning them) and PwC’s mishandling of the situation.
His fellow partners weren’t buying it, claiming that he was a total wuss, “partners simply do not get sick” and possibly just faking it.
At first, we thought this sounded a little harsh but the Times Online is now reporting that there is a perfectly good explanation for partners’ reaction. They had a policy to back them up:
Mr Tenner, 45, said that a junior member of his team had raised a formal complaint against the same individual, which was investigated by PwC.
Although he complained about his treatment from the individual on several occasions over six months and had asked PwC to implement specific procedures in its anti-bullying policy, “nothing was done”, it is alleged.
Instead, Mr Tenner said, several senior managers told him that he was not protected by the anti-bullying policy because he was a partner.
Now this makes sense. Had this been one of P. Dubs’ rank and file, certainly there would have been hell to pay for this type of treatment by a client. But since a partner was involved, they figure your bully tolerance should be at such a keen level that no protection is necessary.
Bullying ‘did not apply’ to PwC partner [Times Online]
EU Crafts $962 Billion Show of Force to Halt Euro Crisis [Bloomberg]
With the Euro under pressure, the European Central Bank has hatched a plan to “offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators.” EU countries are chipping in 440 billion in loans, the EU’s budget throws in 60 billion, and 250 billion from the International Monetary Fund.
The funds will be available to those countries that experience a financial crisis similar to Greece. Portugal and Spain have debt to GDP ratios of 8.5% and 9.8% respectively, exceeding the EU’s mandated limit of 3%. package approved last week, receiving 110 billion euros “after agreeing to unprecedented austerity measures,” triggering riots in the country.
Dubai Holding Hires Debt Advisers [WSJ]
Dubai Holding Commercial Operations Group, a part of Dubai Holding (not to be confused with fellow Dubai conglomerate Dubai World) has hired PricewaterhouseCoopers to help them with a teenie debt restructuring project. DH’s debt issues come about after Dubai World is still working to restructure the $14 billion in outstanding debt that it has with its creditors after a slight panic late last year.
UPDATE: KPMG and Deloitte are getting in on the fun as well, as the Financial Times reports that they have been engaged to advise Dubai Group and Dubai International Capital, respectively.
You Complete My Audit [CFO]
Had your auditor for awhile? If you want to crack the top 100 of longest auditor-client relationship, you’d have to be putting up with the same firm for over 50 years. According to the CFO’s analysis of Audit Analytics data, the longest auditor-client relationship belongs to Deloitte and Proctor & Gamble who have been together since 1890. PricewaterhouseCoopers’ longest relationship is with Goodyear Tire & Rubber, starting in 1898; Ernst & Young with Manulife Financial, 1905; KPMG and General Electric go back to 1909.
Of the 100 companies that have stuck with their auditors the longest, 97 of those companies were with Big 4 firms:
• PricewaterhouseCoopers – 34
• E&Y – 25
• Deloitte – 24
• KPMG – 14
Straight Talk about Brutality of White Collar Crime from a Convicted Felon [White Collar Fraud]
GC friend and forensic sleuth Sam Antar recently had some a two part interview produced that from his recent speaking presentations at Stanford Law and Business Schools. Part one is below and you can see part two over at WCF.
Because they’re not doing such a bang up job:
State tax collections plummeted unexpectedly in April, wiping out months of steady gains that legislators hoped would ease their budget troubles and restore California’s economy faster than experts predicted.
…
Revenue for April, the biggest revenue month because it is when most Californians pay their taxes, lagged projections by nearly 30% — roughly $3 billion, according to state officials. The drop was steep enough to erase improvements recorded in each of the four previous months.
Just when you thought state fiscal crises couldn’t get more out of control. That’s way to big to be a fat finger error.
This makes the projected budget deficit approximately $18.6 billion, according to the L.A. Times. California’s lawmakers have to come up with a solution soon, as the state’s fiscal year ends next month. But hey, they pulled a rabbit out of their ass last year, why not try for a repeat?
With this new bar in state fiscal nightmare hilarity, the only question now is – how can New York top it?
Fannie Mae is looking for an Senior Accountant – Debt, Derivatives in their Washington, DC/Metro location.
The position requires a minimum of six years experience, with exposure to FASB 52, 91, 133, 155, 157, 159 a plus.
Company: Fannie Mae
Title: Sr. Accountant – Debt, Derivatives
Location: Washington, DC/Metro
Description: Operate with considerable latitude in performing highly complex duties related to preparing and analyzing financial information to record transactions, prepare financial reports, and review and verify accuracy. Provide value-added expertise to consultants, auditors, and others in development of new concepts, techniques, and standards. Utilize wide-ranging experience to conduct research and problem-solving. May operate in a lead role within the team.
Responsibilities: Compile, review, analyze, and record financial information to the general ledger; Complete monthly closings; Prepare balance sheet and profit and loss statements, consolidated financial statements, and other accounting schedules and reports; Prepare daily, weekly, and monthly reconciliations to ensure general ledger account information is accurate, consistent, traceable, and auditable; Execute and manage timely and accurate transactions; Identify control weaknesses, communicate to management, and operate in a lead capacity in making remedial changes to tighten and enhance controls and mitigate risk; Design and produce reports; Conduct research and analyses on highly complex issues. Devise creative and effective solutions; Provide requested information to auditors, consultants, and others on highly significant matters requiring coordination; Design, modify, install, and/or maintain accounting systems to ensure adequate recognition of financial transactions; May perform highly complex projects or participate as a team member on projects at the highest level of complexity.
Qualifications/Skills: Bachelor’s Degree or Equivalent required; 6-8 years; CPA preferred; Knowledge of financial instruments (debt, derivatives, short term investments) and/or familiarity with financial statements of financial services companies; Knowledge of any of FASB 52, 91, 133, 155, 157, 159 a plus.
See the entire description over at the GC Career Center and visit the main page for all your job search needs.