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Attention Any Accountants-cum-Future Obstructers of Justice Who May Have to Take Extreme Measures

Having a good document shredding company on speed-dial is a must for any accounting firm. Because of the sheer volume of documents that need destroyed, there’s room for plenty of competition but as is the wont of our society, it can be fierce out there and businesses have to pull out all the stops to get a leg up on their rivals. Thanks to our former sister site, Dealbreaker, we’ve now learned about a business who may be offering a new feature for any of you that don’t have the stomach for ugly this business can be.


Now sure, maybe you’ve got a Dahle 20835 EC on site or maybe a Kobra Cyclone is more your speed but what if you really need a problem taken care of?

You can’t possibly rub someone out on the hallowed grounds of a Big 4 firm now, can you? Best to call some experts.

Compliance Auditor Found Dead at Work… a Day After She Died

As many of you sacrifice your lives for the greater good of the profession, slaving away day in and day out to meet that all important April deadline, just remember it could be much worse: you could be dead in your cubicle for a day before anyone actually notices.


Via KTLA:

An L.A. County employee apparently died while working in her cubicle on Friday, but no one noticed for quite some time.

51-year-old Rebecca Wells was found by a security guard on Saturday afternoon.

She was slumped over on her desk in the L.A. County Department of Internal Services.

“I came in Saturday to do a little work, and I saw them when they were taking her out,” co-worker Hattie Robertson told KTLA.

Wells worked as a compliance auditor in the risk management division of L.A. County Internal Services and had just become a grandmother a week before her death. Prior to her position with the county, she was a tax auditor for the California State Board of Equalization. The Imperial County Coroner’s Office is still in the process of an investigation.

L.A. ISD provides computer, telecommunications, building maintenance and repair, purchasing and contracts, fleet, mail messenger and printing services to departments in L.A. County.

Accounting News Roundup: 1099 Repeal Heads to the House Floor; IRS Audits Oakland Dispensary; Allen Stanford Sues Feds | 02.18.11

House Committee Sends 1099 Repeal to the Floor [JofA]
The House Ways and Means Committee approved a bill Thursday that would repeal the expanded Form 1099 reporting requirements, voting 21–15 to send the measure to the full House of Representatives. The bill, called the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 705), would repeal both the expanded information reporting requirements enacted as part of last year’s health reform legislation and the requirement that taxpayers who receive income from rental property issue 1099s to service providers. To pay for this repeal, the bill would increase the amount of the neware credit that is subject to recapture.

Kabul rebukes outsiders over bank crisis role [FT]
A dispute over how to tackle Afghanistan’s biggest banking scandal has added a new strain to ties between the government of Hamid Karzai, the president, and the west. After a visit by Neal Wolin, the US deputy Treasury secretary, the finance ministry said that weak international support had exacerbated the crisis.“ Afghan and US officials agreed that (the crisis) … was compounded by the erroneous audit by PricewaterhouseCoopers, and ineffective international technical assistance and supervision,” the ministry said.

Year after plane hit, repairs continue at Echelon I [AAS]
Echelon I has been closed since the crash, but city officials later said an engineer’s inspection determined the building was structurally sound. Currently, plans are being designed for the remaining work, Kimball said. Those are mostly complete, and work will commence after city approval. Kimball said that the next step will be finding new tenants; none of the building’s former occupants are returning.

Millions at stake in IRS audit of Oakland medical marijuana dispensary [Sacramento Bee]
Harborside Health Center proclaims itself the world’s largest marijuana dispensary. For certain, it is California’s most ambitious – a holistic care center with a naturopathic physician, acupuncturist, chiropractor, yoga instructors and therapists in “universal life force energy.” Its Oakland facility handles $22 million in annual medical marijuana transactions. Now Harborside is attracting scrutiny from the Internal Revenue Service. Since last year, the IRS has been auditing 2008 and 2009 federal tax returns for the Oakland location, one of two outlets Harborside operates for 70,000 medical marijuana users.

Bubba’s bro Roger Clinton bungles tax bills [Tax Watchdog]
Robert Snell’s tax delinquent du jour: “Roger Clinton, the bumbling half-brother of former President Bill Clinton, owes more than $90,000 in delinquent state and federal taxes, according to public records.”


The Financial Accounting Foundation Reappoints Thomas J. Linsmeier To a Second Term on the FASB [Business Wire]
The Financial Accounting Foundation (FAF) today announced that Thomas J. Linsmeier has been appointed to a second five-year term as a member of the Financial Accounting Standards Board (FASB) beginning July 1, 2011. The reappointment was made by the FAF Board of Trustees, which oversees the activities of the FASB and the Governmental Accounting Standards Board.

I do yoga with my bosses [NYP]
Getting yoga stoned with the boss.

Stanford Sues U.S. Prosecutors, SEC and FBI Agents [Bloomberg]
R. Allen Stanford, the indicted financier, sued U.S. prosecutors and agents of the FBI and Securities and Exchange Commission, accusing them of “abusive law enforcement” and seeking $7.2 billion in damages.

PwC Picks Up Thomas Henry from KPMG; Will Lead Global Incentives Practice

This could be what PwC’s Talent Leader was talking about she said that poaching, “[Has] always been a place we like to stay competitive.”

Mr. Henry, a tax partner who has spent more than 25 years in public accounting, most recently at KPMG, has extensive experience in all areas of state and local taxation. He is best known for his work in the credits and incentives space, both domestically and worldwide. His experience in maximizing global incentives for large multinational corporations in the United States, Europe, Asia and Africa will enable both US-based and non-US-based multinational companies to benefit from his counsel when entering into economic incentives negotiations.

Thomas Henry Joins PwC US To Lead Global Incentives Practice [PR Newswire]

How Long Does It Take to Climb the Ladder at Ernst & Young?

Welcome to the where-the-hell-is-Bahrain? edition of Accounting Career Emergencies. In today’s edition, a future E&Y tax associate wants the lowdown on the black and yellow ladder. How high are these rungs, anyway?

Caught in a career conundrum? Have a co-worker that keeps swiping your red Swingline? Want to put the moves on a fellow auditor in the copy room? Email us at advice@goingconcern.com and we’ll help you avoid anything that involves in a knuckle.

Back to our girl on the partner track:

Hi,

I will be starting in the tax dept of a Big Four soon.

How long would it take to move up the tax ladder? (Yes, yes I know your response will be to start first before I start thinking about promotions… But I am thinking ahead…)

What is the minimum number of years typically required at each level? Are exceptions ever made? What goes into promotion decisions? How long would it take to get to the partner/director level? Is the promotion criteria generally standard across all Big Four or is there some variation?

Thanks,
Ms. Thinking Ahead

Dear Ms TA,

You’re quite the eager….errr, go-getter aren’t you? That’s good, I like my accountants ambitious. We’re not intimately familiar with the ladder at E&Y but we’ll give it a go and let the bean gallery fill in the gaps.

Typically, you can expect to be an associate two to three years before being promoted to senior. Depending on the needs of your practice group and your performance, this could be shorter or longer. In order to get the bump to manager, you can expect another three years at a minimum, again, subject to the needs of your group and whether or not you’re impressing the pants off the brass. From there, you can expect at least two years at manager, another two to three as a senior manager and then, if you’re lucky and you have a good business case, TPTB might start looking at your for admittance to the partnership. Altogether, you’re looking at a bare minimum of nine years before you can even get a whiff of partner and twelve to fifteen is probably a more realistic time frame. There are exceptions of course but that’s more or less the timeline.

Because tax doesn’t have the same fee pressure as their audit counterparts the wait might not be as long but don’t forget, not just anyone gets into the partnership. You need to be a performer and be able to win new clients. The benefit of tax is that it has more diverse career paths available, so if you find discover that you’re a wizard at transfer pricing or M&A, you might see a quicker ascension.

This presupposes the fact that you obtain your CPA in a timely fashion as most tax practices will not promote you to manager without a CPA, a JD or EA. How about it black and yellow tax troops? Dispel with the gory details as necessary.

Congressman Todd Akin Doesn’t Want ‘A goon squad of 5,000 IRS agents tromping around the country’

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AS PREDICTED! Republican Congressman Todd Akin of Missouri could barely wait 48 hours before falsely asserting that the new 5,000 employees at the IRS will all be agents that will be breaking down the doors of every freedom loving American to fleece them for every last dime.

“Don’t call me Clay” Akin was giving Treasury Secretary Geithner a hard time about President Obama’s budget yesterday when he thought it necessary to start calling people – Americans that pay taxes, no less – names:

The back-and-forth began after Akin questioned Geithner about President Obama’s fiscal 2012 budget, which includes spending increases for the IRS that could reportedly lead to thousands of more staffers at the agency. The Missouri congressman said he thought energy might be better spent simplifying the tax code. “Not to mention the fact that it’d make us all look better if we don’t have a goon squad of 5,000 IRS agents tromping around the country with the economy the way it is,” Akin said.

Right. Because you looking good is what’s most important, right Congressman? Geithner, not really impressed with a two-bit fly-over representative giving people in his house shit, tried explaining to him that most of the new employees would work in “customer service or information technology [rather] than enforcement” but this fell on deaf ears:

[T]hat argument did not assuage Akin very much. “’I’m from the IRS. I’m here to help you,’” the congressman said. “That’s hard to sell in the state of Missouri.”

Akin probably didn’t think to ask the employees of the nine IRS locations in Missouri about this. Maybe some of them would be able to explain how, you know, working for the IRS is how they put food on the table, put clothes on their kids, etc. etc. etc. You know, the rhetoric you like to use, Congressman.

Republican calls IRS agents a ‘goon squad’ [The Hill]

Your Company Smartphone Scares the Crap Out of Your Boss

Let’s be honest here, how many of you use your work-issued phone strictly for work? Promise I won’t snitch anyone out. Some of you might even be lucky enough to be able to tweak your wallpaper, add apps and get your significant other on BBM for all day sexting without the pesky messaging data trail.

The AICPA’s 2011 Top Technology Initiatives Survey is out and shows that IT professionals’ biggest business technology concern is not that they could be replaced with robots but the proliferation of smartphones and other mobile devices in the workplace.

The 22nd Annual AICPA Top Technology Initiative survey, conducted Jan. 13 to Jan. 26, shows control and use of mobile devices was the No. 1 challenge for IT professionals. The finding was based on responses from nearly 1,400 CPAs nationwide specializing in information technology. In addition to mobile devices, the survey signaled future IT issues will revolve around implementation of touch-screen technology, deployment of faster networks and voice recognition technology.

“The surging use of smartphones and tablets means people are doing business, exchanging sensitive data wherever, whenever they want to,” said Ron Box, CPA/CITP, CFF. “The technology is advancing so rapidly that the capabilities for controlling and protecting the information on mobile devices is lagging behind. What was once as simple as losing your phone, could now create an enormous security risk for organizations.”

Remember back in the day when you might, say, accidentally drop your phone in the toilet at the bar and simply have to worry about recouping your contact list? Now our phones hold pictures, banking information and even client information that is oftentimes carelessly stored on unsecured devices that are taken everywhere. IT professionals can’t be expected to manage the network when the network is in your pocket, and when your pocket sometimes happens to be in the bar (you are a professional, after all).

Some of the top issues identified by CPAs in public accounting included data retention, control and use of mobile devices and privacy.

The complete Top Technology Initiatives list as voted on by CPAs, IT professionals, and others responsible for making or influencing technology decisions includes initiatives and emerging technologies that IT decision makers should be aware of over the next 12 – 18 months.

Accounting News Roundup: Florida Inmates’ Tax Fraud Haul; Another Mobile Apps for Accountants List; Is Dennis Rodman a Bad Tax Boy? | 02.17.11

SEC, CFTC and IRS Make Case for Thousands of Hires in 2012 [FINS]
The documents submitted to Congress by the SEC, CFTC and IRS explain the ways in which they’ll use funds that were proposed in the Obama administration’s budget. Collectively, the agencies plan on increasing headcount by just over 6,200 in 2012 and their budgets by $1.5 billion to ensure investment firms are in compliance with new regulations, oversee the derivatives market and curtail tax evasion, among other things. The hiring plans are contingent upon Congress passing the budget.

Ex-Freddie Mac C.F.O. May Face Civil Charges [DealBook]
Anthony Piszel, known as Buddy, who was Freddie Mac’s chief financial officer from 2006 to 2008, received a so-called Wells notice from the Securities and Exchange Commission, an indication that the agency was considering an enforcement action against him.

State-by-State Ranking of Prisoner Tax Fraud [TaxProf Blog]
Florida ran away with it – $12.6 million, $9 million more than second-place Georgia.

Accounting firm could help D.C. schools find savings, new money sources [WaPo]
The city spends more than $1 billion a year on K-12 education – $750 million for 123 public schools and $400 million for 52 public charter schools – by far its biggest ticket item. Gray said in a brief interview that Deloitte, which will do the analysis on a pro bono basis, will look for “savings to be had and money to be found.”

Panamericano Accounting Loss Hits 4.3 Billion Reais [Bloomberg]
Banco Panamericano SA, the Brazilian lender under investigation for alleged fraud, said its loss from “significant accounting distortions” reached 4.3 billion reais ($2.6 billion), exceeding its initial 2.5 billion-real estimate.


Eleven cool mobile apps for running your practice [AW]
Dirty Birds isn’t one of them.

A radical thought about governance [IIA]
Some ‘What ifs’ from Norman Marks.

Dennis Rodman disputes latest tax woe [Tax Watchdog]
No reports of him kicking anyone over this.

‘Seinfeld’ actor Len Lesser dies at 88 [MSNBC]
You could have at least said “Hello!”

Accountant with Frightening Mugshot Pleads Guilty

Remember this guy?

If you recall, Hector Sanchez swiped $40k from his church to spend in “casinos and restaurants” which is arguably the lamest thing you could do with forty large of a God’s money. What about spending it on a facial to soften that nice bone structure? Yeesh.

Ex-church accountant pleads guilty to stealing $40,000; some of the money spent in casinos and restaurants, officials say [NJ.com]

Some Companies Willing to Drop a Big 4 Auditor Like a Bad Habit…For Another Big 4 Auditor

Auditor musical chairs isn’t something that happens too often but Reuters reports that more and more U.S. companies are looking to save a little extra scratch on their audit fees:

Bucking a long-standing preference by most companies to stick with the same auditor for years, some companies are putting their audit work out for competitive bids to win better deals on fees, or to get fresh teams looking at their books. “It’s a change in the competitive landscape among the audit firms where they have the ability and desire to take on more clients,” said Mark Grothe, an analyst at consulting firm Glass Lewis. Public companies also seem to be more willing to switch auditors, as long as one of the “Big Four” firms will be doing the work, he said.

The article cites Apple (dropped KPMG for E&Y) and Tysons (kicked E&Y to the curb in favor of PwC) as two prominent examples. We’re also aware that Credit Suisse is slowly transitioning a good portion of the audits performed by KPMG to PwC, according to sources familiar with the situation. Companies of this size willing to change their auditors demonstrates that some companies aren’t too concerned with the learning curve that may face their new auditors. In fact, some CFOs are more than okay with it, including Linster Fox of Shuffle Master who claims, “There’s no degradation in service — the service is actually higher.”

PwC’s Tim Ryan, however, doesn’t buy the idea that fees are the driving force behind the auditor switcheroo, “When a company does go through a change, it is almost always driven by something other than fees,” he told Reuters. Instead, a change is more likely to happen when, for example, a major fraud gets missed or there’s a difference of opinion on a crucial issue OR the CEO is a finicky character OR some other mysterious reason unbeknownst to all of us.

Regardless, the real concern is that all this auditor swapping puts a lot of pressure on fees:

Fee pressure has been intense worldwide, but especially in the United States, according to the International Accounting Bulletin, which tracks global audit fees. “The U.S. is a very competitive market, easily the largest audit market in the world, and the Big Four have competition from a much larger pool of firms,” said IAB editor Arvind Hickman. “Last year we received reports of fees being cut between 5 and 15 percent on average on audit work, and there were extreme cases where fees were being cut up to 40 percent,” he said. Fee pressure appears to be easing somewhat, “but there will still be fee pressure this year and we don’t predict it will go away any time soon,” he said.

This has Big 4 firms undercutting regional competitors and is no doubt, partly responsible for the parking lot at the Senior Manager level in some markets. With this level of competition and, as a result, a slowly decreasing portion of the Big 4 revenue stream, it doesn’t necessarily mean a career as an auditor is a dead end but it sure doesn’t help.

Auditor shopping helps U.S. companies cut fees [Reuters]