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Comp Watch ’11: Sit-downs at PwC Starting This Week

From the mailbag:

Any rumors on PwC comp going around yet? Partner discussions are supposed to start this week and go through next.

After all the discussion around PwC’s new compensation structure one may have thought that was enough to keep people talking for months. Fortunately, plenty of mini-BoMos out there are anxious about this year’s compensation adjustment and since the fiscal year ends next Thursday, it’s not a wonder. Sooo, if you’ve been (un)fortunate enough to have your little money chat let everyone know how it went. Don’t spare the details: office, level, practice, etc.

Accounting News Roundup: Camp Not Sold on Repatriation; Tax Reform Needs ‘All the Oxygen’ From DC; Former Marc Jacobs CFO Wants Pole Dancing, Porn Addressed | 06.22.11

FedEx Joins Ford in House Tax Chief’s Portfolio, Panel Witness Chairs [Bloomberg]
Since becoming chairman of the House Ways and Means Committee in January, Representative Dave Camp has invited executives from 13 publicly traded companies to testify on tax and trade policy. The chairman owned shares in six of them. Camp, a 57-year-old Michigan Republican, owned stocks and bonds issued by dozens of individual companies, according to his annual personal financial disclosure form, which was filed June 15 and covers the year ending Dec. 31, 2010.

Rep. Camp Wary of Repatriation Tax Holiday [CFOJ]
“We did repatriation a few years ago, and here we are with the same problem,” Camp said. He made similar complaints about other tax proposals, including an extension of the payroll tax holiday which is currently set to expire.

Geithner Says Corporate Tax Reform to Follow Deficit Talks [CFOJ]
“Our hope and our expectation is that after we get this deficit reduction done, we can move to corporate tax reform,” Secretary Geithner told the CFO Journal Conference in Washington D.C. Tuesday morning. He added that corporate tax reform would not be part of the deficit reduction negotiations, because dealing with the budget “requires all the oxygen there is in this town.”

Why Won’t the SEC Investigate Motorola … Again? [Accounting Onion]
Tom Selling digs in on the KPMG inspection report, “Why has the SEC apparently not followed up on the PCAOB’s findings? For one thing, the PCAOB inspection report provides highly credible evidence of very large accounting misstatement made by a high-profile registrant with the apparent complicity of its Big Four auditor. It doesn’t necessarily mean that the PCAOB is correct in its allegations as a matter of course, but someone should called to account by the SEC: if not Motorola and/or KPMG, then the PCAOB for a faulty inspection report.”

Say Anything: The Big 4 Defense Of Overtime Exemptions [Re:The Auditors]
Meanwhile Francine McKenna digs in more on Campbell v. PwC.

Fired Marc Jacobs Employee Demands Robert Duffy Personally Address Sexual-Misconduct Accusations [NYM]
Yes, the pole dancing. And the porn.

Former federal accountant sentenced for embezzling $1.4 million [LAT]
Kathy Stamps, 39, of Rancho Cucamonga, an accountant at the Angeles National Forest office in Arcadia, fabricated internal records to receive tax refunds, authorities say. From 2002 to 2004, Stamps received six checks from the U.S. Treasury totaling $1.4 million. She spent nearly $1.1 million on personal items ranging from cars and mortgage payments to jewelry and plastic surgery, authorities said.

Promotion Watch ’11: PwC Admits 136 New Partners

Last year, we learned about new partner promotions at the House of Moritz the first week of June. This year, we had to wait for a press release from the Denver office to get issued before we heard anything about it. Now, I’m not mad (although Adrienne probably is) just disappointed. If you forgot how to get in touch with us, it’s a simple as clicking email us or on our names in the margin. Regardless, we got on the horn and managed to get the whole scoop.


136 new partners admitted firm-wide, representing all PwC service lines.
–53 new partners in Assurance,
–50 in Tax,
–32 in Advisory and
–one in Internal Firm Services.

The new class of 136 is 53 more than last year, so that clears a few extra spots out of the parking lot at senior manager. The promotions bring the total count of partners in the States to over 2,300.

So a hearty congratulations to all the new PwC partners. No doubt you’ve worked and worked and worked for it. We just hope emotions were kept in check at any celebrations.

PCAOB Member Steven Harris Shares Some Thoughts on Auditors

For anyone that missed it earlier, the PCAOB issued a concept release today putting out some ideas for changes to the auditor’s report. The members of the Board also took the opportunity to say a few words and Mr. Harris saw an opportunity to point some things out:

The events of the last few years have been a case study of the inability of auditors to provide investors with any meaningful signal about increases in financial reporting risks when management assessments or estimates change dramatically, or when debates over significant accounting issues become difficult or contentious.

And he added the following for good measure:

Out of the ten largest bankruptcies during the financial crisis, only two had going concern opinions. During the year leading up to their bankruptcy filings, the market capitalization of the eight companies without going concern opinions declined from a collective $75.5 billion in the year prior to their respective bankruptcy filings to a collective market capitalization of just under $700 million at the time of their filing – a 99% loss in investor value.

[via PCAOB]

Some IRS Employees Living by the Motto ‘Do as I Say, Not as I Do’

There’s no shame in asking for help, IRS employees, if that’s what this is about. Don’t forget that the Commish isn’t too proud to ask for help.

In 2008, the year for which most recent data was available, IRS computer programs flagged compliance issues for more than 8,000 of its 109,469 employees and ultimately determined that almost 2.8% had not complied with the law. But those monitoring systems missed 133 additional employees who were potentially not compliant with tax law over a two-year period, according to the audit. The employees were flagged for potentially filing their tax returns late, paying their taxes late, not reporting all of their income and at least one example of a criminal investigation with an additional tax assessment.

Treasury Report: IRS Must Beef Up Oversight Of Its Own Employees [Dow Jones]

Confidential to Sir David Tweedie: Mary Schapiro Isn’t Hearing Encouraging Words on IFRS

Speaking at The Wall Street Journal’s annual CFO Network meeting in Washington D.C., Schapiro readily admitted that there isn’t a big push from either multinationals or shareholders to move to international financial reporting standards.

In response to a question from Bank of America’s CFO, Chuck Noski, Schapiro said, “We have not heard from a lot of shareholders that we have to go (to IFRS). We’ve heard the contrary… ‘Why would we take this step toward international accounting standards?’” [CFOJ]

Here Are the PCAOB’s Ideas for Changes to the Auditor’s Report

Now before you get all worked up about these, the Board is inviting everyone to throw out comments before September 30th, make other suggestions and participate in a roundtable during the third quarter in case you are inclined to heckle them for making your life more difficult. Anyway, here’s what they’ve got:

• An auditor’s discussion and analysis;
• Required and expanded use of emphasis paragraphs;
• Auditor assurance on other information outside the financial statements; and,
• Clarification of language in the standard auditor’s report.

These are just suggestions mind you, so if you’ve got something better in mind, feel free to share below.

Fact Sheet

Debunked Rumor of the Morning: PwC Is Rescinding Offers

Adrienne, who is hidden away in an undisclosed location (read: Boston) was tipped off last night with the following and forwarded it on to me:

Rumor has it that PWC rescinded offers for September 2011 hires. I went to GC to read the inside scoop but didn’t see anything. Maybe this is a totally false rumor or a lead….

Answer: Totally false rumor.


Yes, believe it or not, we happily debunk rumors around here when possible. Of course this can only occur when people with the means to help us discredit the rumors are cooperative. We spoke to someone in the know at PwC who informed us that not only is this rumor false, P. Dubs is asking some of their new advisory hires to start in July because there is so much work. Now, it’s possible that there are a few isolated incidents where someone’s name shows up in the police blotter and an offer may get pulled but our source says there haven’t been any reports of those and definitely nothing “systemic.”

Of course if you’ve got evidence to the contrary, we’d welcome you to get in touch with us and good luck to those who choose to end their summers/lives two months early.

Studying for the CPA Exam Goes Mobile

There’s a new mobile CPA exam study tool out there, and for once it isn’t direct from one of the major CPA review players. In fact, it’s designed by a former CPA exam candidate:

Studying for the CPA (Certified Public Accountancy) Exam just got a little easier as company CPAGoMobile recently released an app for the iPhone. The app allows users to build customizable practice tests drawing from a pool of over 1,000 multiple choice questions. Candidates have the options to target specific topics, choose question types, and analyze their progress reports to decide what to study next.

CPAGoMobile joins the ever widening landscape of educational apps geared towards professional licensure and examinations. Apps for the SAT, GMAT, Bar, and MCAT exams have given an injection of flexibility into candidates’ study routines by allowing them to study anytime and anywhere.

“When I was studying for the exam and working full time, commuting back and forth with a backpack full of textbooks was not fun. After finishing the exam, I looked at the stack of books and thought: there must be a better way,“ said Chris Armstrong, founder of CPAGoMobile. “Passing the CPA Exam is a difficult undertaking on its own, so any opportunity to make studying more manageable and efficient should be grabbed with both hands. Sure, there will always be a place for more traditional study methods, like books and notes, but I think these types of apps represent the next logical evolution on how we study and I’m excited to be a part of it.”

Download the new app for iPhone, iPod Touch or iPad via iTunes here. Questions will run you about 8 cents a piece (the app itself is free to try) if you average out the $19.99 cost for each section.

Please note that the app does not contain IFRS material yet, but the developers have promised they will integrate new material in their next update.

The app is not intended to replace a full, comprehensive review but meant to serve as a useful supplement to your regular study routine that is accessible anywhere you might find yourself.

Accounting News Roundup: Miserable Workers Not Quitting Their Jobs; COSO 2.0; Japanese Want More Time for IFRS Switch | 06.21.11

Unhappy Workers Stay In Current Jobs, for Now [WSJ]
Only 1.4% of employees voluntarily left their jobs in April, the most recent month for which data are available, down from seasonally adjusted monthly rates of more than 2% before the recession started, according to the U.S. Department of Labor. Overall, voluntary turnover is still nearly at its lowest point since the Labor Department began to track it in 2000.

Merck Can’t Recoup $473 Million in U.S. Taxes, Court Rules [Bloomlough argued that funds it received as the result of two interest-rate swap transactions weren’t taxable as proceeds of loans from foreign subsidiaries and that the company was being treated unfairly by the IRS, which hadn’t demanded the same taxes from other companies that were in similar situations. U.S. District Judge Katharine Hayden ruled after a five- week non-jury trial in 2008 that Schering-Plough failed to prove it deserved a refund, and in April 2010 she denied the company’s request for a new trial. The U.S. Court of Appeals in Philadelphia upheld Hayden’s ruling today, saying the transactions were loans and that the IRS may treat taxpayers differently.

A Reboot for Internal Controls [CFO Journal]
A group of accountants and corporate executives met in New York on Monday to hash out some of the details of a proposed update to the nearly twenty-year-old internal control framework created by the Committee of Sponsoring Organizations (COSO). The reboot is expected to add in controls for information technology commonly used in business operations today, such as email and automated work processes, as well as address more theoretical issues, like how risk management and internal controls should work together. The update will also incorporate newer ideas about governance to better define the current role and responsibilities of audit and compensation committees.

Thomson Reuters Acquires CorpSmart From Deloitte [MW]
CorpSmart provides multinational corporations (MNCs) in South Africa with intelligent corporate tax compliance software. Using this web-based solution, MNCs are able to prepare monthly, quarterly and annual income tax computations as well as file South African IT14 tax returns.

Mandatory Auditor Rotation — Further Thoughts on PCAOB Chairman Doty’s Bad Idea [Re:Balance]
Jim Peterson continues to pick apart rotation.

Insurers fear volatility of IFRS ‘black hole’ [Accountancy Age]
Insurers have met to discuss fears surrounding the possible impact of phase II of International Financial Reporting Standards, saying the move “would introduce very significant but really meaningless volatility.”

Fraud at senior management level is highlighted in KPMG report [Guardian]
When it comes to “white collar” crime, finance directors, chief executives and other senior management are far more likely to be involved in fraud – such as the mis-statement of financial results, theft and expense abuse – than junior staff. The economic downturn has also made it a lot easier to commit fraud, according to research by KPMG, which warned that scams go undetected for longer.

Japanese manufacturers ‘need more time’ for IFRS switch [Accountancy Age]
The Japanese Financial Services Agency and Financial Accounting Standards Federation initially proposed a three-year switch over period, after which use of IFRS would become mandatory for listed companies. They argued holding off on IFRS adoption would make Japanese companies look guilty of failure to disclose adequate information at a time when many other countries were switching. However, last month 22 companies and organisations – including heavyweights Mitsubishi, Nippon and Toyota – wrote to the head of the FSA asking for more time, and describing the change over as “a significant burden.”

Layoff Watch ’11: ‘The Bloodbath Is Definitely Over’ for Accounting Profession

Nationally, after three consecutive years of declines, CPA firms “finally” are projecting positive growth between 3% and 4%, said Allan D. Koltin, CEO of Koltin Consulting Group, a Chicago firm that specializes in the accounting profession. The industry had enjoyed enormous growth and enormous hiring between 2003 and 2007, Mr. Koltin said, but the recession year of 2008 ushered in a dark chapter.

Many firms instituted hiring freezes and made cuts. Most of the 100 largest firms let go of anywhere from 10% to as many as 20% of their accountants, he said. “It probably was the worst bloodbath of layoffs that the accounting profession has had in well over a couple decades,” Mr. Koltin said. “The bloodbath is definitely over. Firms all over the country, Cleveland and everywhere, for the first time are doing serious hiring after a serious drought.” [Crain’s]