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Accounting News Roundup: PwC’s ‘Comply or Explain’ Approach on Female Promotions; Frightening SALT Rates on Cell Phones; Grant Thornton Names CMO | 02.23.11

Private-Share Trade Is Probed [WSJ]
The Securities and Exchange Commission is investigating potential conflicts of interest in the fast-growing market for buying and selling shares of private companies such as Facebook Inc. and Twitter Inc. The move is part of a broadening probe by the U.S. agency, still at an early stage, of the thriving bazaar that has sprung up largely beyond the reach of regulators and traditional securities firms. Trades handled by SecondMarket Inc., SharesPost Inc. and other market makers specializing in privately held shares are conveying eye-popping valuations on some companies while disclosir financial results.

PwC to proactively promote women [Accountancy Age]
The Big 4 firm will implement a “comply or explain” approach, which will ask division leaders to proactively consider women for promotion or explain what the blockers to progress there are. It said that the emphasis will initially fall on achieving proportionate promotion rates at manager and senior manager levels.

Wells Fargo CFO ‘Well Equipped’: Analyst [The Street]
“Not only is Mr. Sloan personable and candid, but also he is very conversant in many key areas of investor focus,” said Morford in a note describing Wells Fargo’s CFO Tim Sloan after meeting with him last week. Morford said that the 10-K for the company should be filed on time next week and that the company said there were no financial or accounting related issues to the sudden retirement of former CFO Howard Atkins.

Robert Herz, Former FASB Chairman, Joins WebFilings as Senior Advisor [Business Wire]
WebFilings, developer of the first and only end-to-end solution for external financial reporting, announced today that Robert Herz, former Chairman of the Financial Accounting Standards Board (FASB), has joined the company as Senior Advisor. “As a forward-thinking accounting industry leader, Bob brings a unique and valuable perspective to our team,” said Matthew Rizai, CEO of WebFilings. “We are extremely excited to leverage his knowledge and experience as we continue to evolve our industry-leading product and service offerings.”

‘Can you hear me now?’ Your cell phone’s state and local taxes are huge! [DMWT]
Nebraska is your big winner with a state and local rate of 18.64%. New York comes in at #3 with 17.78%.

Harry Reid Says Nevada Should Outlaw Prostitution, Gets Bitchslapped by Whores [JDA]
The lede from TLP, “Did you hear the one about the politician and the hookers? Turned out to not be so funny. Maybe that was because he was trying to fuck the hookers and take their money at the same time.”


Emanuel Wins Big in Chicago [WSJ]
Almost five months after resigning as President Barack Obama’s chief of staff to enter this city’s mayoral race, Mr. Emanuel received 55% of the vote with more than 97% of the precincts reporting, more than the simple majority needed to avoid a run-off campaign against second-place finisher Gery Chico. Mr. Chico, a onetime chief of staff to Mayor Richard M. Daley, received 25% of the vote.

Tricia Conahan named Chief Marketing & Sales Officer at Grant Thornton [GT]
“It is exciting to be joining an organization with a renewed focus on growth,” Conahan said. “I am a passionate believer in the discipline of marketing, and the value that it brings to help grow businesses. I am looking to bringing Grant Thornton’s dynamic vision to the marketplace.”

Archstone Looks Likely to Go Public Again [WSJ]
The sharp rise in the value of rental-apartment buildings is raising the likelihood that Archstone, one of the companies that became a symbol of the commercial real-estate downturn, will be resold to the public this year in what could be the largest real-estate initial public offering ever.

And Now, the Auditor’s Version of ‘No Sleep ’till Brooklyn’

Recently we came across a version of Ke$ha’s “Tik Tok” for auditors. The battle over who actually coined this ode to opining was up for grabs but now it’s been brought to our attention that throwback tunes are also being rewritten to express the plight of auditors.


Surely there’s a divergence of opinion – right down generational lines – on which rewrite is better but working in “fat finger” and “Friends think I do tax ’cause of the ‘CPA’ ” scores big points in our book.

To the tune of “No Sleep ’til Brooklyn” by the Beastie Boys

(chorus) No sleep ’til – Filing

Hand on the tenkey – never a fat finger
Got work to do, I hope this client don’t linger
My job ain’t a job – it’s a damn good time
Gonna get this tied-out to the dime
On location – cursing damnation
Why’re my client contacts always on vacation?
Eight of us crammed around this audit table
I do what I do best because I’m willing and able
Ain’t no fakin’ – audit fees I’m rakin’ in
Goin’ coast to coast vouching money you’re makin’
While you’re at the job working nine to five
I’m still at the office when you arrive

(bridge) No sleep ’til –

Another spill, another thrill
Another freaking fire drill
Caffiene gum – another SUM
I wish this Diet Coke had some rum
Now where’s my contact? – he always disappears
This is the guidance, why can’t he just adhere?
Been so long since I’ve seen my fam’
I wish my computer had more RAM
We’re thrashing financials like it’s going out of style
Getting paid along the way cause it’s worth your while
Quarter after four – IA’s out the door
I’m chained to my computer for six hours more
We got a drawer with a lock to hold our files
Aside from the ones all over our table in piles

(repeat bridge)

(repeat chorus)

Ain’t seen the light since we started this audit
All we need is in this room- we got it
Born and bred to document all day
Friends think I do tax ’cause of the “CPA”
That’s not right but I don’t care
‘Cause whenever I explain it they just stare.
Got coffee, cola, chips and candy
I’ve gained ten pounds ain’t it just dandy?
Step off homes – get out of my way
‘Cause our signed opinion is the final say
Waking up before I get to sleep
Cause I’ll be rocking this party eight days a week

No sleep till filing ….
No sleep till filing …
No sleep till filing …
No sleep till filing…
No sleep till filing…

And just in case you’ve got no idea what this should sound like:

Dave Scudder Resigning as McGladrey Managing Partner

McGladrey has announced that this busy season will be managing partner Dave Scudder’s last. Technically, Scudder is the MP of McGladrey & Pullen but honestly, we were confused about the whole situation after the rebranding.


From the press release:

The McGladrey & Pullen, LLP Board of Directors announced today that Dave Scudder, managing partner and member of the Board, has decided to resign as the managing partner of the Firm effective April 30, 2011.

“Dave is highly respected by the partners and has lead the Firm through significant change,” said Jerry Bourassa, Chairman of the McGladrey & Pullen Board of Directors. “He has contributed tremendously to the success of the Firm and has been an exemplary leader.”

The Board has commenced a selection process to ensure a smooth and timely succession and transition.

“I believe the Firm is well positioned to continue its success in serving our target markets including private equity groups and their portfolio companies along with our public and international companies practice,” said Scudder.

Scudder will continue to assist in the transition through at least June 30, 2011, and will continue to represent the Firm in various professional and industry organizations during this time.

So you could easily conclude that DS just figured it was time to move on after spending the last 24 years at the firm. You could also easily conclude that with all the excitement that has occurred at firms with various forms of “McGladrey” in the name may have taken its toll with Scuds or perhaps with the McGladrey board. Then again, they could be making room for another golfer that isn’t Natalie Gulbis.

Reactions and speculation are welcome at this time.

How Would You Vote on the Deloitte Leadership Candidates?

Last month, we shared with you the concerns of a Deloitte partner who has a lot of issues with the processes around electing the firm’s leadership. As the partner explained it to us, “The elected individuals are the Chairman, the CEO, and a CEO ‘Alternate.’ The CEO ‘Alternate’ is there in the event that the CEO elect is also elected as the Global CEO (which will typically happen).”

Recently, we were able to confirm the candidates and thought we’d share them with all of you since some of you might not be aware of who they are:


• Punit Renjen, for Chairman of Deloitte LLP (Current CEO of Deloitte Consulting)

• Barry Salzberg, for CEO of Deloitte LLP (Current CEO of Deloitte LLP)

• Joe Echeverria, for CEO Alternate (Current Managing Partner of U.S. Operations)

What’s not immediately known is when Deloitte partners will be voting “Yes or No” on these candidates. One of our sources speculated that the vote could be as early this week.

In our previous post, we learned that the partners vote up or down on these candidates as a group as the partner in our last post explained “The partners get to vote ‘YES or NO’ on the ‘slate’ of candidates that is advanced.” Since we know a lot of you out there in Internetland are Deloitte employees but not partners, we thought we’d get your perspective on this slate of candidates and whether you would give them a “Yes” or “No.” And since the comments box allows for further explanation, feel free to elaborate on your vote. We know of one person who will be voting no.

A message left with Deloitte spokesperson Jonathan Gandal was not immediately returned.

Earlier:
Deloitte Partner Encourages Brethren to Take Back Their Firm

CPA Exam Candidate Bloggers, They’re Everywhere

Back in the day, there was really only one CPA exam blogger and it was Jeff at Another71 who chronicled his adventures (read: failures) while amassing a large audience of loyal followers who shared in his triumphs and defeats. Over time, Jeff transformed his humble little website from just a soap box for him to complain to an actual career, blowing off the idea of a day job for the somewhat lucrative but always entertaining world of blogging. By all appearances this has worked out for him and it may be no small coincidence that a storm of CPA exam bloggers have followed in his footsteps, including his own team of CPA exam bloggers writing for him at Another71.

The only other longstanding CPA exam blog we can think of is the New Jersey Society of CPAs’ Exam Cram, which has featured a revolving cast of characters over the years, all of whom share their individual CPA exam stories with NJSCPA members and the Internet at large. Who says blogs are dead?


One CPA exam blogger we haven’t seen in quite some time:
The Cooking Accountant has been at this for awhile now and appears to have allowed a BEC failure to keep her from her blog since June of 2010. Once active in documenting her journey, her last entry reads “It hurts twice as much to learn you have to re-take two parts because you failed one. This is reminiscent of when a little girl riding her bicycle hits a raised chunk of sidewalk and goes flying off her bike, landing on the hard cement. But this time, not only does she scrape and bruise her knee and elbow so bad she can barely get up, but the doll she had in the bike basket is now sitting in the gutter.”

But many other CPA exam bloggers are alive and well and blogging every dirty detail of their lives as CPA exam candidates, at least when it comes to disappointments and annoying coughing girls at Prometric.

My CPA Exam Journey
3 Letters, 1 Day at a Time
Sleep on CPA
No More 74
Mission: Pass CPA Exam
CPA Adventures

The list goes on and on and if I missed any good ones, do let me know.

Here’s my concern: while it’s certainly healthy to form a community of miserable bastards who can share in the joy and misery of the CPA exam experience together, at what point does blogging become a distraction? If you notice, each one of these blogging candidates commit well thought-out, carefully written, decent length posts, something a lot of “other” bloggers don’t always do. So is there an element of procrastination that blogging about the exam allows?

If that’s the case, it’s probably a healthy sort of procrastination. Candidates might be taking a break from the MCQ but they are still focused on their goal of licensure by writing about, thinking about and reading about the CPA exam.

As long as they don’t start using that #twudygroup to talk about movies and their relationship problems, I don’t see the harm.

KPMG Employee with Combination of Short-timer’s, Spring Fever Pushes the Dress Code Envelope

Last week’s unseasonably warm weather in New York had one KPMG employee – who had recently put in her notice – taking advantage of the pleasant temps to show off the gams. According to a conversation we overheard on Twitter:


To which someone responded:

This infraction, it’s our understanding, occurred at the friendly confines of 345 Park Ave. Now, anyone familiar with the House of Klynveld knows that shorts are definitely frowned upon, especially at 345 Park where backpacks are rumored to get the crook-eye. Showing this amount of flesh in the middle of February, in a staunchly business casual environment, is about as an awesome disregard for the dress code we’ve ever heard.

The most important question, however, remains unanswered: what kind of shorts? Are we talking boxers? Boy shorts? Daisy Dukes? We need a witness (or two or three) and pictures obviously get bonus points.

Accounting News Roundup: KPMG Picks Up Sourcing Adviser EquaTerra; Rothstein Kass Adds Tax Principals; Careful When Traveling with the Boss | 02.22.11

Christie to Propose Small-Business Tax Cuts [WSJ]
Less than a week after he vetoed a slew of Democratic job-creation and tax-cutting bills, New Jersey Gov. Chris Christie will present a budget Tuesday that includes around $200 million in tax cuts, mostly for small businesses, a source familiar with the budget said. The figure represents a small portion of Mr. Christie’s overall state budget, details of which were kept tightly under wraps. However, the move underscores Mr. Christie’s determination to be seen as a tax-cutter even amid one of the worst budget crises in years.

KPMG to Provide Broader Global Outsourcing rough Acquisition of EquaTerra [PR Newswire]
“EquaTerra is an ideal fit for KPMG and we look forward to welcoming the EquaTerra team to the KPMG network family,” said Timothy P. Flynn, Chairman, KPMG International. “Through this acquisition, clients of KPMG member firms will benefit from the addition of a market-leading sourcing adviser to help them transform their organizations into more flexible enterprises in a way that meets today’s complex market demands.”

Satyam Settles; PwC Left In Lurch [Forbes]
Yes, this story is still out there. No, this doesn’t mean it’s over.

Big Increases in Tax Prosecutions (27%), Convictions (15%) [TaxProf Blog]
You’ve been warned.

Rothstein Kass Hires Three New Tax Principals [PR Newswire]
Rothstein Kass today announced the addition of three new principals to its ranks. Moshe Biderman, an alternative investment industry expert, has boarded as a Tax Principal in the Rothstein Kass Financial Services Group, and will be based in the Roseland, New Jersey office. David Logan, well-known within the alternative investment community, has also joined the company as a Tax Principal in the Financial Services Group. He is based in the firms’ New York office. Meanwhile, Robert Siegel, a tax planning and advisory services specialist to both public and private companies, has re-joined Rothstein Kass as a Tax Principal in the Rothstein Kass Commercial Services Group. He will operate from the firm’s Roseland location.

Women Still Earning Less than Men in Finance [FINS]
According to the data, with women in financial activities earn only 71% of what men earned: women made $732 a week, compared to $1,039 a week for men.


Dynegy to Replace CEO, Board After $665 Million Icahn Bid Fails [Bloomberg]
Bruce Williamson, 51, has resigned as chairman and will step down as CEO effective March 11, Dynegy said yesterday in a statement. Patricia A. Hammick, 64, who headed a board of independent directors reviewing the Icahn bid, succeeds Williamson as chairman, the company said. Board member David Biegler, 64, will become interim CEO. Chief Financial Officer Holli Nichols, 40, also will resign as of March 11.

Travel With the Boss: The Pluses and the Chasms [NYT]
Traveling with the boss offers an array of both professional opportunities and minefields. After all, a week of meetings, meals, airport delays and taxi rides can add up to more time together than a junior employee may normally experience in a year. There are also plenty of chances to err — a less-than-stellar client presentation, a technology mishap or perhaps a suggestion to eat at a famous barbecue place when the boss is a vegan.

What Did Ernst & Young Call Lehman’s ‘Goat Poo’ Assets?

Considering E&Y was, ya know, the auditors and all, they should have been aware that these assets were a grade or two (or three) below human excrement and probably had some name for them.

Lehman Brothers Holdings Inc (LEHMQ.PK) filed for bankruptcy on Sept. 15, 2008 and then quickly sold its prize investment banking assets to Barclays Bank (BARC.L). JPMorgan had been Lehman’s banker. The court papers, filed in U.S. Bankruptcy Court in Manhattan on Thursday, said that Barclays and Lehman called certain Lehman assets “toxic waste” and “goat poo” and knowingly excluded them from their sale agreement.

Jim Turley has been a willing participant in this whole thing so far but were far more interested in what you guys think.

JPMorgan says Lehman called assets “goat poo” [Reuters]

An IRS agent walks into a CFO’s office…

This was sent to me by my 69-year-old landlord who is spending his winter in Florida and we humbly present it to you now for your reading pleasure during this lovely busy season.

At the end of the tax year, the IRS office sent an inspector to audit the books of a local hospital. While the IRS agent was checking the books he turned to the CFO of the hospital and said, “I notice you buy a lot of bandages. What do you do with the end of the roll when there’s too little left to be of any use?”

“Good question,” noted the CFO. “We save them up and send them back to the bandage company and every now and then they send us a free box of bandages.”

“Oh,” replied the auditor, somewhat disappointed that his unusual question had a practical answer. But on he went, in his obnoxious way. “What about all these plaster purchases? What do you do with what’s left over after setting a cast on a patient?”

“Ah, yes,” replied the CFO, realizing that the inspector was trying to trap him with an unanswerable question. “We save it and send it back to the manufacturer, and every now and then they send us a free package of plaster.”

“I see,” replied the auditor, thinking hard about how he could fluster the know-it-all CFO. “Well,” he went on, “What do you do with all the leftover foreskins from the circumcisions you perform?”

“Here, too, we do not waste,” answered the CFO. “What we do is save all the little foreskins and send them to the IRS office, and about once a year they send us a complete dick.”

In Case You Were Wondering, KPMG Is Still Wells Fargo’s Auditor

As we’ve discussed, the sudden departure of Wells Fargo’s now-former CFO, Howard Atkins, has been a bit of a mystery. The bank stated that Howie quit for “personal reasons” but Chris Whalen, for one, wasn’t buying that story and stated that it was an “internal dispute” at the Stagecoach Shop and “public behavior suggests significant problems in the bank’s internal systems and controls as defined by the Sarbanes-Oxley law.”

Then John Carney got all heresay yesterday, reporting:

Others say that the departure stems from a heated argument between Atkins and the CEO of Wells Fargo, John Stumpf. Still others say that there could be even more personal reasons for Atkins leaving.

This is pretty fun because this “heated argument” could have been over something awesome like Atkins’s using Stumpf’s private commode without permission or a spurious challenge in their weekly Scrabble® match. Whatever the reasons for Atkins’s departure, all this speculation got the gang over at The Street wondering that maybe – just maybe – KPMG’s risk management team had soiled themselves over the whole situation and asked the audit team to start drawing up their resignation papers.

KPMG said Friday that it remains Wells Fargo’s […] external auditor, though the firm wouldn’t comment on recent criticism that Wells’ financial disclosures aren’t up to snuff. KPMG spokesman George Ledwith confirmed that the Big Four accounting firm is still working with Wells Fargo, which plans to file its 10-K annual report by the end of the month. Howard Atkins, who had been CFO of Wells Fargo for nearly a decade, resigned unexpectedly last week and won’t be signing off on that report. His replacement, Tim Sloan, will do so instead. “Yes, KPMG LLP is the external auditor for Wells Fargo & Company,” said Ledwith.

So what prompted this brief line of questioning is, in itself, a mystery. KPMG resigning as the auditor of Wells Fargo is about as likely as John Veihmeyer throwing all his copies of Rudy into an incinerator. But then again, maybe The Street knows something we don’t. Was/is/will there be any doubt that KPMG will remain the auditor of Wells Fargo? Rampant speculation and nightmare scenarios are welcome. And if you’re in the know, email us.

Auditor Stands By Wells Fargo [TS]

External Recruiter Posing as PwC Staff Is ‘Very Convincing,’ Well Versed in Firm Jargon

This is a new one.

We found out about an external recruiter impersonating PwC late yesterday and apparently it’s gotten on the nerves of the brass that they sent an email to let everyone know that you shouldn’t talk to strangers, even if they say they’re from PwC and know a bunch of internal acronyms.

External Recruiters Impersonating PwC Staff

There have been recent reports of an unethical recruiter attempting to collect PwC staffing information by presenting themselves as a PwC employee. This individual has proven to be very convincing and knows some of the PwC terminology to support their deceptive practices. One of PwC’s best defenses to this type of activity is to protect our information and to not readily disclose it without verifying the requestor and their need for the information.

What to do if you receive a request for staffing information

If you should receive a call from an individual requesting staffing information, e.g., names, staff levels, phone numbers, etc. , do not provide this information by phone and do not send it to an external e-mail address. Politely obtain the caller’s information and inform them you will look into the their request. Do not be fooled by the information displayed on your phone. The caller typically blocks their caller id and the firm has also experienced instances of phone spoofing where the phone displays a false PwC extension from a call originating from outside of the firm. You can verify if it is a legitimate caller by contacting the individual through their PwC office phone number or e-mailing their PwC account. If you determine the call did not originate from the PwC individual, please report the situation to your HR representative or e-mail the call information to security@us.pwc.com and a US Security representative will respond to you.

We’ve contacted the firm about this sly impostor and are waiting to hear back. In the meantime, if you’ve heard from this crafty character, send us the email or voicemail.