When accounting goes unaccounted for
Whatever the hell that is. What we’re sure of is that Dell would have never implemented such a code had they not been investigated by the SEC, starting in 2006.
Along with the code to help force the accounting policies grab-ass hands to themselves, Dell also now has a “global team of accountants to focus on revenue recognition issues”.
Again, not too familiar with this, but at most companies, this is typically known as the “accounting department.”
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]
• November Deadline Set for Kraft’s Cadbury Offer – Wonderful. We’re going to hear about cheese substance made by robots trying to copulate with sweet confections for another month. [DealBook]
• CIT Said to Weigh Financing From Citigroup, Barclays – What? They didn’t call this one? [Bloomberg]
• Bank-Bailout Fund Faces Years in Red as Failures Jolt System – “FDIC officials stressed that the fund’s depleted state wouldn’t affect depositors because federally insured deposits are backed by the full faith and credit of the U.S. government.” Oh, well that’s a relief then. [WSJ]
• Plenty More Bank Losses Expected Globally – When will this happen? [WSJ]
• UBS Warns on Third-Quarter Losses – Wow. That was fast. [WSJ]
• Confidence surges among CFOs in US – It feels like the confidence has been surging for some time now. [FT]
• Auditing the Fed: Redux – Our contributor, Adrienne Gonzalez got linked over at FT Alphaville. Nice work! [JDA]
• Hong Kong Police Raid Ernst & Young Office in Akai Audit Probe – Seems that they were to arrest individuals taking home office supplies for personal use. [Bloomberg]
• SEC told to aggressively assess tips after Madoff – As opposed to passively assessing them, which has been standard operating procedure at the Commission for years. [Reuters]
• Tax Court: CPA’s Google Search Does Not Constitute Reasonable Cause to Avoid Penalty – The Internet does not trump the IRC. [TaxProf Blog]
• Senate Committee Rejects Public Option for Health Overhaul – You’re either thrilled or completely pissed. [WSJ]
• Reznick Group Launches New SAS 70 Website – For you serious types. [Press Release]
• Stanford fails in bid to access insurance – Unfortunately for Stan, there’s no exchange rate for Lucky Strikes. [FT]
More good news about your tax dollars at work. This time courtesy of the punching bag of government agencies:
More, after the jump
According to reports, an audit conducted by an outside firm found that the SEC’s acquisitions office failed to maintain accurate records on its contract and procurement activities, and reported data that was inaccurate to the federal procurement database.
In one glaring example, the regulator could not supply the auditor with data about all of the contracting activities from the SEC’s regional offices.
Good Lord. Recently laid off peeps, please do your country a bit of service and help out the complete f*(king nightmare that is our government. We implore you.
For crying out loud, this is what we’re talking about people. If you’re in the DC area, get your hungry hippo ass over to Kogan Plaza at The GWU on Thursday from 10 am to 12 pm. Accounting firms don’t skimp on this stuff so consider doing a jay before going and update us on how many you put away.
Any other firms feeding your faces with fried goodness on campus? Better get in on it while you can.
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.
The voting ended last night and we know your anticipation is reaching fever pitch so we’ve finally presented the results, after the jump.
1. White Collar Slavery: 47.3%
2. Happiness Rating: Zero: 26%
3. Swap Green Visors:13.7%
4. Big Four Union: 13%
Troubling news as you can see. Nearly 75% of you are expecting to be underpaid and miserable. We recommend that you start some sort of cash only business and get your asses into therapy.
The bottom 27% of you seem to be proactive at least but 13% of you may be viewed by some as socialists. However, that seems to be the hot thing these days so we say go for it.
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.
We’re pretty surprised that the Defense Department has an audit of its contracts at all but since they do, we’ll give them credit for at least setting up some faux-oversight. That’s where the credit stops however, since the auditors work for “The Pentagon’s Defense Contract Audit Agency” (“DCAA”) which just reeks of independence.
As we mentioned, the fact that anyone would attempt to audit the Defense Department is laughable at best. Some problems that the General Accounting Office found, according to Web CPA:
The problems uncovered by the investigation included waste of time and resources by the audit agency. As an example, the GAO noted that DCAA auditors spent 530 hours to support an audit of the cash management system at a research and development grantee, only to discover that the billing system was non-existent.
Awesome. Three months of work to discover a phantom billing system. Oh, but there’s more:
During a separate billing system audit of a supplier of combat systems, “Auditors deleted key audit steps related to the contractor policies and internal controls over progress payments without explanation.” One DCAA auditor told the GAO he did not perform detailed tests because, “The contractor would not appreciate it.”
Testing is rather inconvenient when accountability is involved. Especially in the name of national security.
For one of the 69 reviews the GAO performed, the audit report cited eight significant deficiencies in the contractor’s accounting system but since the contractor wasn’t really cool with that, the auditors dropped five of the SD’s and recommended that the other three be “improved without additional work”.
Buckling to clients isn’t as unusual so we’ll let this one slide and considering the DoD’s track record, they’ll continue doing whatever they hell they want. We just thought we’d bring it up here for the record.
GAO: DOD Audit Oversight Has “Widespread Problems” [Web CPA]
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]
Hopefully it’s not too early for bad numbers. Crain’s New York put some together to give you an idea about how bad the employment picture has gotten for accountants in the past year.
The total number of accounting professionals for the top 25 firms in New York was more than 23,176 as of June 30, 2009.
That number is down from 24,909, or 7% from the previous year. The Big 4 horsemen account for two-thirds of this total and, not surprisingly, they all reported drops:
Continued, after the jump
No. 1-ranked KPMG cut 13% of its professional staff, or 681 employees. No. 4, Deloitte, was not far behind in job shrinkage, with a decline of 378 staffers in the New York area, or 11.7%. Pricewaterhouse reported 350 fewer professional, or a 9.2% decline. Of the four, Ernst & Young posted the smallest loss: a drop of only 1.6%, or 67 professionals.
Crain’s list of details on the top five firms (Big 4 + RSM McGladrey) shows additional data, including KPMG having over 10% more total professionals in New York than the next highest, PwC.
Smaller firms including CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs (probably the most ridiculously long name for firm we’ve ever seen) and Weiser also experienced significant drops:
CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs, which saw a loss of 53 professionals, or 22.7%, despite last December’s acquisition of Mahoney Cohen by CBIZ & Mayer Hoffman McCann…Weiser…reported a decline of 10.7%, or 42 professionals.
Sorry for all the gloom. Here are some small bright spots:
• Eisner, hired 120 professionals, an increase of 25%
• Marks, Paneth & Shron, 47 and 13.4%
• Seymour Shapss Martin & Co, 20 and 11.7%
You don’t have to be John Nash to see that the drop by the Big 4 overtake any increases by the smaller shops. And seven percent seems like a pretty significant drop but what the hell do we know?
Discuss your firm’s (or former firm’s) numbers in the comments and feel free to speculate on the job outlook for the coming year. It’s not like it could get worse. Could it?
A hard number for accountants: 7% fewer jobs [Crain’s New York]