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The KPMG New York Exodus Picks Up Steam

Last month we touched on a possible exodus starting in KPMG’s New York office with the news that a number of people had given their notice to leave the firm. A few readers were not impressed with the news including Hyperbole:

6 people leave a massive office in an industry that even in a slow year expects 10-15% voluntary turn. I’m all for ripping on the firms, but this is a little ridiculous…

“DAMANGE CONTROL BEGINNING: 26 FANS LEAVE LAKERS GAME AT HALF TIME

EXODUS!!!!”


However, another commenter, blah felt that this was just the beginning:

I believe the exodus is coming. Folks are pretty pissed off these days and there are a lot of career opportunities out there right now for us.

Now, here we are, a month later and it sounds as though the numbers are increasing quickly as we have had multiple sources confirm that approximately 12-15 professionals have given recent notice between the banking and asset management groups – two of the largest in the New York office. The majority being SA2s, SA3s as well as experienced managers.

Our sources have indicated that many more are actively looking and that this is not the “normal attrition” that is expected by a firm. One recent SA that gave their notice was kind enough to send us a copy of their farewell email that sounds – oddly – inspired. After drying your eyes (or throwing up in your mouth), feel free to discuss the latest conga line going out of 345 Park.

Allow me to leave you with a few words of inspiration on this most joyous day:

BLOOD ALONE MOVES THE WHEELS OF HISTORY!

Have you ever asked yourselves in an hour of meditation – which everyone finds during the day – how long we have been striving for greatness?

Not only the years we’ve been at war the war of work but from the moment as a child, when we realize the world could be conquered. It has been a lifetime struggle a never-ending fight, I say to you and you will understand that it is a privilege to fight. WE ARE WARRIORS! Accountants of New York City, I ask you once more rise and be worthy of this historical hour. No revolution is worth anything unless it can defend itself. Some people will tell you accountant is a bad word. They’ll conjure up images of used car dealers, and door to door charlatans. This is our duty to change their perception. I say, accountants of the world… unite. We must never acquiesce, for it is together… TOGETHER THAT WE PREVAIL. WE MUST NEVER CEDE CONTROL OF THE MOTHERLAND…

Will a CMA or CFM Get You Some Kind of CPA Exam “Credit”?

The short answer is no. The medium answer is hell no and the long answer is the rest of this post but first, let’s address the reader question, shall we?

Will any of the sections passed for the CMA and/or CFM count against the requirements for the CPA examination? In other words, can I avoid taking certain sections of the CPA examination because I have passed the CMA and CFM?


ALL candidates have to pass all four parts of the exam and for the lucky ones, there’s even a fifth part to worry about called ethics but that’s not all of you so we won’t get into that. There is no credit given for life experience, other letters after your name, certifications, and/or letters from your Mom attesting to your good moral character. You don’t get extra credit for making your written communications 15 paragraphs long, nor do you get a bonus for having the prettiest scribbles on your scratch paper. Nothing. Sorry kid but them’s the breaks.

CMAs are not automatically eligible to sit for the CPA exam simply because they are CMAs however required coursework for both credentials are similar so if you are eligible to pursue one, you may be eligible to pursue the other without additional education. This career track is best accomplished by getting an MBA or Masters in accounting, not completing your Bachelor’s and simply picking up a few extra units to fulfill the CPA’s 150 hour requirement.

If you are into it, check out some recent IMA numbers on salary potential for CMAs and CPAs. So while you won’t be able to get out of any of the usual CPA exam gruntwork, it still might be worth it to pursue anyway. And bonus, you might just be able to count your CPE units twice for both designations.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Accounting News Roundup: Dell Looks to Settle SEC Probe; BP’s Request for Tax Docs Causes Issues for Fishing Communities; Salesforce CFO: We Need Sales People! | 06.11.10

Dell, CEO Are in Talks to Settle SEC Probe [WSJ]
The SEC’s probe, launched in 2006, into Dell had initially focused on some accounting manipulation that has now ensnared founder and CEO Michael Dell focusing on disclosure and omissions related to Intel Corp. and negligence-based fraud charges.

The Journal reports that the possible fraud charges “suggests that the SEC may suspect that Mr. Dell unintentionally made statements that he should have known were misleading.”

In anticipation of the settlement, the company will restate its most recent earnings report, reducing its net income by $100 million.


The fishermen and the tax man [Los Angeles Times]
BP is requesting tax records from people in fishing communities in order process claims of lost work related to the Deepwater Horizon spill. Those seeking payment need to submit a commercial fishing license, proof of residence and tax statements. The problem is that many of these people do not keep tax records since they are paid in cash for their work.

More than 25,000 claims have been submitted so far and payments to about 12,000 have been made, totaling $36 million, according to the LA Times.

BP, through Graham MacEwan says that there’s a plan although like most of this crisis, the company isn’t sure how it will be fixed, “BP Chief Operating Officer Doug Suttles has been telling parish council members over the past few days that if someone’s tax documents are not available, we will find other metrics. I don’t know exactly how we are going to do that yet.”

Salesforce CFO: Company Aggressively Hiring Sales Staff [Dow Jones]
Cloud trailblazer Salesforce.com is looking to add more sales personnel, having added 18,000 new customers over the last 12 months according to CFO Graham Smith.

Mr Smith also said the company is rolling out two new products in the near future including Chatter, a “a social-networking application for office collaboration” and VMforce, a collaboration with VMware, Inc. that will give Java developers a new way to deploy applications over the web.

PwC May Have Overlooked Billions in Illegal JP Morgan Transactions. Oopsie.

Now £15.7 billion may not seem like much to you if you are, say, Bill Gates or Ben Bernanke but for PwC UK, it may be the magic number that gets them into a whole steaming shitpile of trouble.

UK regulators allege that from 2002 – 2009, PwC client JP Morgan shuffled client money from its futures and options business into its own accounts, which is obviously illegal. Whether or not JP Morgan played with client money illegally is not the issue here, the issue is: will PwC be liable for signing off on JPM’s activities and failing to catch such significant shenanigans in a timely manner?


PwC did not simply audit the firm, they were hired to provide annual client reports that certified client money was safe in the event of a problem with the bank. Obviously that wasn’t the case.

The Financial Reporting Council and the Institute of Chartered Accountants of England are investigating the matter, and the Financial Services Authority has already fined P-dubs £33.3 million for co-mingling client money and bank money. That’s $48.8 million in Dirty Fed Notes if you are playing along at home.

Good luck with that, PwC. We genuinely mean that.

Inquiries mount after PwC ‘failed to notice’ mistakes [Times UK]

The Nasdaq Would Like to Know When Koss Is Going to Get Around to Submitting Some Financial Statements

Remember last month when Koss decided to file their 10-Q without financial statements? At the time the company said it was “due to delays relating to certain previously disclosed unauthorized transactions.”

In other words, we got ripped off so bad that we’re restating financial statements for half a decade and it isn’t exactly something you can whip up like a batch of maui wowie brownies.


The Nasdaq has taken note of the slight delay and has said if you don’t get us numbers by June 30, you’ll be on the pink sheets with the likes of Lehman Brothers.

CEO Michael Koss has assured everyone that it won’t come to this but obviously we’ll have to wait until the SEC posts the filing. If that doesn’t happen, you’ll be able to add “Koss Delisted by Nasdaq” to Suz’s list of destructive accomplishments.

Koss gets warning from Nasdaq [Milwaukee Business Journal]

Job of the Day: Citi Needs an Audit Manager

Citi is looking for an internal audit manager to join its Audit and Risk Review group in Baltimore, Maryland.

The position requires a minimum of eight years experience with an advanced degree and certifications (e.g. CPA, CISA, CISSP) preferred.


Company: Citi

Title: Audit Manager

Location: Baltimore, MD

Description/Responsibilities: Audit and Risk Review (ARR) is a global organization of 600+ professionals covering Citigroup’s global businesses. Citigroup’s internal audit division provides independent assessments of the company’s risk and control environment. Our findings and recommendations influence business management processes worldwide and senior management decision making around the world.

Work with team to ensure all aspects of reviews and business monitoring activities are executed in accordance with ARR standards and government regulatory statutes and recommending appropriate interventions where needed. Qualified individuals have the ability to effectively communicate and develop relationships with all levels of management and with peers. Demonstrated ability to plan and provide leadership for audits or projects.

Qualifications/Skills: Must have a strong knowledge in the following areas: data retrieval and general information systems controls, financial analysis and regulatory compliance. Strong analytical skills. Require experience with Word, Excel, Access, ACL, Cognos, SAS, Oracle, Unix and HTML. Generally has 8+ years of relevant experience. Advanced degree or appropriate certification (e.g. CPA, CISA, CISSP) is preferred.

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

Let’s Welcome the KPMG Interns with…

…kind words from John Veihmeyer? Obviously! Bagels with schmear? This isn’t 2007. Happy hours where the booze flows like wine? TBD.


The Klynveld interns started this week (an official Tweet from the KPMG Go says there’s over 1,000 coffee go-fers this summer) and we hear they’re starting out with some stimulating training for a couple of days before they head to national training which we hear will be at a HoJo in Fargo, ND. Cutbacks, you know.

We know some of you KPMG vets will be asked to mentor these blades of grass and we’re a little curious about what the guidance has been re: coffee, lunches, booze etc. since TPTB are still squeeze all the hairs out Lincoln’s beard but still want you to convince the hot and/or smart interns that KPMG is the place they want to be.

Anyhoo, we’ll try and bestow some wisdom on this year’s crop with some key thing to remember:

1. Get things started off right and start kissing the new managers’ asses.

2. Business casual does not consist of sweat pants.

3. If we send you on a scavenger hunt, try not to make it obvious.

4. Showing up with booze on your breath isn’t allowed until you’re well into your first year as full time employee.

5. We’re out of ideas… help them out.

Lazarus Was a Piker or: How the Extenders Bill Resurrects Bad Tax Provisions Year After Year

The Book of John says that Lazarus emerged from his tomb four days after his death. While impressive, Lazarus has nothing on the Section 41 Research Activities Tax Credit. While Lazarus is credited with only one extension, the Research Credit, first enacted in 1981 as a temporary measure, it has been extended at least 12 times — several times after it had expired.

If it’s such a wonderful tool for our economy, as its beneficiaries always say, and if it isy isn’t it just made permanent? There are two main reasons, one only slightly less cynical than the other.


First, the credit costs the government a lot of revenue. The one-year extension in H.R. 4213, the current “extender” bill, is scored as a $6.6 billion revenue-loser. By extending it only a year at a time, the Congresscritters disguise the real cost of the credit, which they have no intention of allowing to expire. Remember this phony accounting the next time some corporate shmoe trembles while Henry Waxman berates his accounting methods.

Even more cynical: it forces the lobbyists for the credit to pay tribute to their Congressional patrons every year to keep their pet corporate welfare provisions alive. A former Congressional staffer explains (my emphasis):

I never understood the “why” about expiring tax provisions until one very late night markup of the “extenders bill” several years ago while I was working for the Ways and Means Committee. Bleary-eyed, one of usually twinkly-eyed members plopped down in a chair next to me in back of the dais–just to take a little rest away from his member’s seat. I asked him “why do we have to do this every year?…why can’t we just pass these things permanently?”

His eyes suddenly twinkled again, as he looked at me with a combination of amusement and disbelief. He said: “Are you kidding me?… We couldn’t do that!… Why, I’d lose all my friends!…Who would come visit me and say kind things to me and do nice things for me then, if they didn’t have to come back every year to ask for these tax provisions?!!”

The research credit is just one of 70 or so “temporary” provisions included in this year’s omnibus “extender” bill. Other tax breaks critical to the continued robust functioning of the economy include the Indian employment tax credit, the special short depreciation life for qualified leasehold and restaurant improvements, subsidies for biodiesel, and the all-important “7-year recovery period for certain motorsports complexes.”

To “pay for” these “temporary” provisions, Congress each year reaches deeper into its bag of tricks for permanent tax increases. The chumps this year: private equity, hedge funds, and small professional corporations. When these things “expire” a year later, this year’s victims will continue to pay their higher tax without Congress having to pass another bill; they will be forgotten while Congress is busy looking for its next revenue fix. And like any junkie, it will give up the addiction only when it’s impossible to score.

Joe Kristan is a shareholder of Roth & Company, P.C. in Des Moines, Iowa, author of the Tax Update Blog and Going Concern contributor. You can see all of his posts for GC here.

All Deloitte New Hires Want to Do Is I-F-R-S

No, really. They made a song:


Items of note:

– “Spin that beat” had to be requested twice.

– Things don’t get really serious until #20 gets off the stage.

– #21 didn’t know the words but managed to do the arm swinging quite well.

– The line, “My workpapers don’t lie” is obviously a lie. Everyone ghost ticks at some point.

– Calling out the tax practice for not having any swagger is a little presumptuous.

Other thoughts? Go.