Category: News

Why Aren’t Accountants Getting Fired for Status Updates on Facebook?

A friend of GC recently made mention of the number of people belly aching about busy season in the filterless universe of Facebook. Yes, we realize this is a shock.

Granted, kvetching about your job is a God-given right but at what point is someone just asking to get their ass thrown out? While “experts” are constantly telling you to “be careful about what you post online,” that seems to be overblown because we’re hearing and seeing people hating their jobs out in the open with no discernible repercussions.

God knows there were status updates from E&Y people re: lack of hoops during the Lehman talk.


Case in point, our friend shared this recent status update with us:

“stock options, fraud interviews, preferred equity accounting…my job is sexy.”

Now maybe this isn’t a “get your shit and get the hell out” offense but accountants have proven to be an easily rankled bunch and if the right person were to read this update, there at least might be a frank discussion about this. It’s become obvious that someone at all the major firms is doing nothing but snooping around the Internet, doing nothing but reading employee complaints.

And maybe we’re premature on this issue. Busy season, while winding down, is still going on and warm bodies are still needed, so some gnashing of teeth on FB might be tolerable.

Maybe this is an unwritten rule in the industry that has evolved with the popularity of Facebook. We ignore your rants for all the world to hear, we take pieces of your soul, one busy season at at time.

Job of the Day: BlackRock Needs an IT Internal Audit Manager

BlackRock is looking for an experienced auditor who has is familiar with testing of SAS 70 and Sarbanes-Oxley technology controls.

The position requires 9 years experience with Big 4 firm and professional certifications (e.g. CPA, CISA). The position also requires approximately 20% travel.

Check out the details for this position, based in New York, after the jump.


Company: BlackRock

Title: IT Internal Audit Manager

Location: New York, NY

Experience Required: 9 years

Description: The candidate will supervise one to two staff and will work closely with other internal auditors in executing the global integrated internal audit plan. The candidate will report to the Director of Internal Audit IT, who reports to the Global Head of Internal Audit. BlackRock’s internal audit group is comprised of approximately 40 professionals based principally in New York, San Francisco and London, with additional personnel in Edinburgh, Tokyo and Hong Kong.

Responsibilities: More than 9 years experience in the fields of information technology audit, information security and technology risk management; Strong experience auditing operating systems, databases, networks, and technology operations; Experience working within a risk based internal audit function executing audit planning, fieldwork and report writing; A good understanding of information technology, technology risks and emerging technologies; A good understanding of information technology best practice disciplines and frameworks such as CoBIT, ITIL and COSO; Experience managing small teams of skilled professionals and building strong trusted relationships with senior IT and business management.

Qualifications: Experience of auditing Unix, Linux, Sybase, Oracle, MSSQL and Windows; Experience working in a global financial services firm, and a good understanding of the asset management industry and regulatory environment; A “Big 4” background and experience of SAS70 and SOX technology controls testing; Experience working in a non-audit role such as information security or technology operations; Professional certifications such as: CPA, CISA, CISM, CISSP, GSNA, CGEIT, CRISC; Additional technical knowledge, e.g. attack and penetration techniques, security configuration audit tools and techniques, development tools and languages, data modeling and data management techniques.

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

CPA Suing Craigslist Vindicated by New Reviews

In Tuesday’s QOTD someone did not have kind words for Leo Kehoe, a Queens CPA. Specifically, “Watch out for this fraudulent scumbag! … He will botch up your tax returns and forget to submit them.” Scumbag? Fine. “Botch up” and “forget to submit” are also tolerable. Stuff like that happens (right?). What no CPA needs or wants, is their name associated with “fraudulent.”

Anyway, someone had a bad enough encounter with Kehoe that it demanded these words for anyone searching out both a CPA and perhaps some NSA coitus.


Mr Kehoe should be able to rest a little easier now as the Gothamist reported yesterday that a certain someone or someones has a completely different opinion on his services, “Leo Kehoe is a great CPA. He charged me a lower fee than what I had payed with someone else and he did a much better job,” and this one from yesterday, “Leo Kehoe: Much better than Cats. I’m going to see him again and again!”

Depending on your point of view, the “Cats” compliment may be worth far more than the $4 million that Kehoe isn’t likely to get but since accountants seem to be hung up on money far more than cultural comparisons, we expect him to continue moving forward with the lawsuit.

Accountant Sues Craigslist Over Negative Rant [Gothamist]

Former SEC Chairman Pitt: Criminal Prosecutions Are Possible for Ernst & Young, Lehman Execs

Okay then! Not exactly what you’d want to hear from a former SEC Chairman on Monday but what’s a former SEC honcho to do? Paint a rosy picture for everyone? Hell no! The man is gong to get real about this latest bank/accounting firm disaster. Barron’s ran down Harv to get his $0.02 on the whole Lehman/E&Y sitch and he he laid it out for Dick Fuld, E&Y, et al. as how to best handle this dicey situation.

Regarding the timing of a response to the report, you best explain yourselves ASAP and while you’re at it, none of that fancy-schmancy language. Everyone needs to be able to understand this:

If they want to avoid the logical consequences of the Report’s conclusions-and none of those consequences are at all good for either Fuld or E&Y-they will need to come forward quickly with a very plain, easily understandable explanation of the errors or their defenses. The longer it takes them to do that, the less likelihood they will have of mitigating the publicity the Report’s allegations have already received.

Consequences, you ask? How about indictments? How about no more SEC clients for E&Y? Next Andersen? Maybe! Shockingly, the SEC seems to be dragging its feet, per the usual standard operating procedure (emphasis original):

Many are wondering why there hasn’t been any action taken, and why the government hasn’t reported on the same events itself. Criminal prosecutions are possible, as are SEC civil actions. For Fuld, an SEC action could mean that he would forfeit his right to participate in the securities industry and possible disgorgement of monies he received over the years from Lehman. For E&Y, the SEC has the power to suspend their right to practice accounting, limit their ability to take on new clients, and impose remedial sanctions.

Yeah, that last part is kind of the crux. As you may recall, Andersen did not bite the dust because of the money it had to pay to Enron investors but because it’s reputation took such a bad hit that states began revoking their license even before the firm voluntarily surrendered its license to practice before the SEC. This occurred after Andersen clients started running away from the firm like a band of lepers. There’s no indication that’s what will happen to E&Y but there’s a 2,200 page report with E&Y’s name all over that says nothing flattering about the firm.

And say what you want about Harvey Pitt: bearded Bush yes-man, lawyer, whatever. As far as we can tell, he has nothing to gain by throwing out wild-ass speculation about what the possible outcomes could be.

Lehman: Criminal Prosecution Possible, Says Pitt [Barron’s]

Inside Ernst & Young: Talking Points on Lehman Brothers

If you’ve ever worked at a Big 4 firm, you’re aware that when big news hits the MSM, A) it’s never good and B) there is typically some sort of communication from management reiterating the firm’s position on the matter, everything is cool, thanks for your hard work, etc. etc.

With last week’s revelation of the bankruptcy examiner’s report on Lehman Brothers, E&Y seems to be following this protocol as it relates to the troops on the ground. As you would expect, leadership is keeping their heads about this while in the background in-house counsel is likely engaged in all-night smoky room strategy sessions.

We checked in with a few of our Ernst & Young sources to get an idea of what people were thinking and so far, there doesn’t sound like there are any signs of panic (yet!).


From one source:

Overall reaction from what I gathered is pretty muted. We did get a call from some of the higher-ups saying that we reviewed our work and that we feel that our audit was completely adequate and that Lehman’s failure was nothing more than the same systemic failure of two of the other major banks and that we plan to defend ourselves vigorously. Presumably, the examiner’s report really didn’t give any ah-ha moments….

[I]s there a possibility of a payout at some point? It’s possible. Are we worried that we’re the next Arthur Andersen? I don’t think so.

So at least on the surface, E&Y leadership is communicating that what came out in the report wasn’t surprising and that the defense of the firm’s position will be, as usual, vigorous.

That doesn’t of course stop the speculation:

I heard from a technical guy there was some concern because they didn’t issue a going concern opinion [for the previous audit].

And as you might expect, “I heard that [the firm] helped cook the books and is deep shit,” with the book cooking being arguable but pretty hard to prove and the “deep shit” aspect being a given.

Some Ernst & Young partners are probably losing sleep just thinking about the potential liability involved here but eventually they’ll get over it (until something else comes up).

No partner worth their salt got admitted to the partnership focusing on the downside. The problem is that when people use consistently use words like “deceptive” and “misleading” to describe Lehman’s accounting this reflects poorly on the firm since they were comfortable with the treatment.

And because it’s still busy season for a lot of people, they are focused on the shitstorm that currently surrounds them, not one that will likely drag on for years after they’ve left the firm (voluntarily or otherwise).

Anyone with more insight or thoughts on the matter, get in touch with us and we’ll keep you updated on the chatter inside E&Y.

Sam Antar Is Still Waiting for an Apology from Patrick Byrne and By the Way, Has Never Engaged in Naked Short Selling

Sam Antar knows an accidental criminal hero when he sees one: his cousin Eddie Antar was hailed as a champion of cheaply-priced consumer electronics in the Crazy Eddie days, though the poor saps in New York didn’t realize he could price his goods so cheaply because he was stiffing the government on sales and payroll taxes. Patrick Byrne and Overstock.com are pushing to corner the accidental criminal hero market by denouncing the evils of naked short sellers (bad bad bad), of which they seem to be convinced Sam is one.

While we’re on the topic of OSTK’s campaign to end evil naked short sales, I hereby volunteer to help Overstock edit their naked short selling page, by the way, as it’s not only a dry read but a tad poorly-written. Just sayin. Helpful girl that I am, it’s the least I can do.


Anyway, Sam’s still waiting for his apology from Patrick Byrne but in the meantime, would like him to take back those mean things he said about Sam naked shorting them to death. In an email to the SEC, Byrne himself and Overstock.com audit committee member Joseph Tabacco this weekend, Sam sets the record straight:

First off, I have never been involved any illegal naked short selling.

Second, how can Overstock.com label me as an “anti-Overstock.com blogger” when:

I correctly reported in my blog that Overstock.com used an improper EBITDA from Q2 2007 to Q2 2008 in violation of SEC Regulation G to materially inflate its financial performance, in light of its later amended disclosures.

I correctly reported in my blog that Overstock.com violated GAAP by using a phony gain contingency in light of the company’s recently announced restatement.

Third, please note Utah Attorney General Mark Shurtleff received $5,000 in cash from Overstock.com a few days prior to writing his defamatory letter about me. Both Chief Deputy Attorney General Kirk Torgensen and Deputy Attorney General Richard Hamp acknowledged that Shurtleff’s claims about me were false in various tape recorded conversations cited in my blog.

Sam goes on to explain that he’s actually doing Overstock a favor by uncovering fraud that its own audit committee has seemed to, um, overlook. You know, so they can set themselves right with the SEC and skip the restatement next year, filing all those extensions can get pricey and time-consuming you know.

See, Patrick, why so hostile? We’re all just trying to help!

One Accountant Was Enough to Discuss Lehman’s Accounting on CNBC

Maybe it’s because everyone is still working like crazy and couldn’t get away for a TV appearance. Maybe Jim Turley couldn’t find decent footwear but how CNBC managed to get only ONE accounting expert in on this panel to talk about the Ernst & Young, Dick Fuld, et al. Sarbanes-Oxley and the Repo 105 is beyond our comprehension. Throw in four journalists and a “fellow” and you’ve got yourself quite the free-wheeling discussion on the double-entry system.


Personally, “[N]ot technically violating the rules, that’s why the auditors could kind of sign off on it even though it was incredibly misleading and deceptive,” was our favorite line.

But the poor accounting expert seemed to be a nervous wreck. Aren’t wet bars standard?

Five Questions with Tracy Coenen

If you’re currently engaged in fraudulent activity at your company, eventually you’re going to find yourself in Tracy Coenen’s Fraud Files Blog. She has published two books on the subject, Expert Fraud Investigation: A Step-by-Step Guide and Essentials of Corporate Fraud and more than a 100 articles in industry publications.

When she’s not writing about all things fraud, Tracy runs Sequence, Inc., providing forensic accounting and fraud examination services. The Sue Sachdeva/Koss fiasco happened in her backyard of Milwaukee and she’s been all over it, providing fine quotes on the matter.


Why do you blog?
Somebody has to expose the frauds and scams!

Why should you accountants read your blog?
Because I have interesting insights and I’m not afraid to state my very strong opinions.

Who is your favorite blogger?
Mike Masnick at Techdirt

Best thing about blogging for accountants?
There is a wide open market for accounting bloggers to be thought leaders (and to market themselves) because so few accounting and finance professionals are blogging about their profession.

The biggest issue facing accountants today is…
Truly understanding how fraud happens and how to find and prevent it.

Three Ways That Patrick Byrne Can Apologize to Sam Antar

As you’re probably aware (if not, check the links below), it hasn’t been the friendliest of exchanges between criminal CFO/forensic accounting sleuth Sam Antar and Overstock.com CEO Patrick Byrne. Sam being Sam, he recently reached out to Patrick Byrne to see if he would be interested in a mea culpa:

From: Sam E. Antar
Sent: Monday, March 08, 2010 11:02 PM
To: Patrick M. Byrne
Subject: Overstock.com Restatement
Importance: High

Hi Patrick:

Will you finally admit that I was correct when I reported in my blog that Overstock.com violated GAAP by using a phony gain contingency in light of the company’s recently announced restatement?

You owe me a public apology.

Regards,

Sam


Our understanding is that Pat hasn’t responded to Sam’s request for an apology yet (we’re hopeful!) so Team GC thought we’d offer some suggestions to Dr Byrne should he decide to take the high road and apologize to Sam. Having been in this situation more than once myself, I can honestly say sometimes you’ve just got to suck it up, buy some flowers, and admit that you’re an ass but totally repentant.

Overstock.com gift cards – Nothing says I’m sorry like free stuff that the aggrieved party can pick themselves. Bonus, the overhead on Byrne’s own inventory must be low. You know, because it’s his, not because there is any monkey business going down on OSTK’s financials.

An SEC Gift Shop Goodie Basket – I busted Sam in an SEC baseball hat at Stanford last week so wouldn’t it be cute if Byrne got him a whole basket full of fun regulatory shwag? Awww, what a precious moment it would be watching Sam pull out DoJ beer cozies and a color-changing SIGTARP coffee mug. Who doesn’t love tchotchkes? PB can’t go wrong! I’d even throw in a pair of NY Fed Pistol Team patches for that added touch of flair.

Cupcakes – Come on, no one can resist cupcakes, not even Sam E. Antar’s hardened criminal ass. You know, might as well send some to the GCHQ while he’s at it, we’ve been putting up with this Overstock shit for months too. Hopefully even Patrick Byrne knows when it comes to cupcakes, it’s best to invest in high quality, over-priced boutique cupcakes. Even my cheap ass knows that.

Earlier:
Winners and Losers in the Overstock Restatement
Even Earlier:
Is Patrick Byrne’s Facebook Friends List Motivated by a Farmville Obsession?

Is Stephen Chipman Preparing to Embrace Twitter?

We hope! Our speculation is fueled by a line from SC’s most recent post:

“Because I’ve heard it said that brevity is not my strong suit, I will try to explain it in 50 words.”

Whether Steve-o realizes it or not, at 50 words, he still needs to improve his brevity. But it’s a start and we’re hoping that he’ll get eventually embrace Twitter. We’re envisioning pithy Tweets followed by clever hashtags like #GTrocks or #Big4sucks or #isecretlyheartsuesachdeva.


The fact the whole brevity topic came up makes us curious. We only made mention of it once, ages ago, so we’re certain that he isn’t referring to our commentary (which we’re sure he reads religiously).

Anyhoo, Even-Stephen was referring to the difference between the Grant Thornton Senior Leadership Team and the Partnership Board. Disappointing everyone, he ended up using 51 words and 258 characters:

The SLT is the equivalent of executive management, and the Partnership Board is the governing body of the firm. The SLT is appointed by the CEO and approved by the PB. The CEO is appointed by the PB. The SLT reports to the CEO, and the CEO reports to the PB.

That’s followed up by Stephen getting back to his windy ways, describing what every member of the SLT does (you can get the gist from their titles).

So while we’re encouraged by Chip’s effort at getting to the point, he still has some work to do. Just sign up and go for it man. Plus we’d be interested to know who Steve-o would follow. Going Concern is a given but does he go intellectual and follow Taleb and Roubini? Or slum it with the rubes and follow Kim Kardashian, Courtney Love and Kanye?

Stephen, just get on Twitter.

Accounting Porn Does Not Involve a Guy Coming By to Fix the Cable

AG profiled Professor David Albrecht last week, which was an honor and a privilege for everyone involved. The Professor’s contributions to the accounting blogosphere are invaluable. Staying consistent with his priceless musings, his latest post asks an important question: “What Is Accounting Pornography?”

Now since we’re sure the professor wants us to think hard about this question, we’ll kindly oblige him.


Done.

As you might expect, this question has nothing to do with your particular taste in ladyboyx.com or whatever else the SEC staff might have turned you on to. No, this is more of the strange reading and/or viewing material that you might just enjoy a little too much (e.g. Lat’s proclivity for the Harvard Law faculty directory).

Okay, here are a few answers that come to mind:

• Any internal report that you stumble across that details upcoming layoffs.

• For Sam Antar and the rest of you sleuthy types, the notes to Overstock.com’s financial statements.

• For the weirdos, it could be watching Big 4 CEOs’ banal talking points with a snowy backdrop. Or the thought of Jim Turley in his Timberlands.

• For the sickos, nightmare CPA exam stories that end in a grade of 74.

If there’s something else that gets you off (Ben Bernanke testimony doesn’t count, AG) feel free to share. Just try to keep it relatively clean. In the meantime, we’ll be flipping through the Enron script.

What Is Accounting Pornography? [The Summa]

Are Accountants at a Higher Risk of Experiencing Workplace Violence During Busy Season?

Seems like logical conclusion, right? Okay, it’s not the post office but yeesh, have you noticed the bitter Bob in the cubicle next to you? Is he approaching the breaking point? Busy season sucks after all and who knows when he’ll eventually crack:


Is our suggestion that accountants might be more likely to snap a little overblown? Maybe. But read this description from AccountingWEB before you blow us off:

You are sitting at your desk on a sunny Thursday afternoon. Your company is experiencing some hard times, and there have been layoffs company wide. A co-worker has been part of the layoffs, and is very distraught. The co-worker may have known layoffs were eminent, and thought it would never happen to them. All of a sudden, the co-worker pulls out a gun and starts shooting up the office!

Sound familiar? Of course! We imagine that someone throwing their 10-key at your head is more likely scenario but violence is violence. The article cites OSHA stating that 2 million people are victims of workplace violence every year but what’s even more exciting/troubling is the BLS survey that “70% of workplaces don’t have any type of violence prevention program in place.”

The solution? Training of course! AccountingWEB breaks it down like this:

• “Train managers and supervisors on how to detect the early warning signs of potential violence” – In other words, you know that guy who says ALOUD he’s thinking about punching the next person that asks him a stupid question? You should probably should have a word with him.

• “Tell employees that the firm wants to know about any threats or incidences, and that they are extremely serious about handling these problems.” – Naturally it helps if your company follows through on “serious about handling these problems” part. In other words, the guy swinging the sledge around should be tarred and feathered and then fired in front of the entire company. The proceedings should be broadcast internally for those that can’t attend in person. It’s simply not enough to fire the person. Public humiliation is imperative so people get the picture that this shit won’t be tolerated.

• “Implement a zero tolerance policy in the handbook relating to workplace violence” – And by zero tolerance, we’re talking no noogies, wedgies, open handed slaps, arm slugs, bloody knuckle contests or even berating someone to the point that they develop an eating disorder.

Violence in the Workplace: Are You Next? [AccountingWEB]