Category: Uncategorized

Respect the Expense Reimbursement Policy Or…

With the firms cracking down on expenses of every sort, including canceling the Holidays prior to the autumnal equinox, hopefully the following story doesn’t occur to any of you. At the very least, it can show what can happen when you have blatant disrespect for your firm’s expense reimbursement policy:
More, after the jump

A former Deloitte Consulting manager who disappeared on the day of her sentencing for bilking her employer out of more than $500,000 was found dead in a Costa Mesa park Saturday morning, authorities said….[Jamie] Watkins, a former operations manager for the Santa Ana office of Deloitte Consulting LLP, faced up to 10 years in federal prison after abusing the company’s expense reimbursements to steal about $550,000 to pay for things including property taxes and furniture.

As tragic as this story is, it serves as example to those of you that find yourself regularly explaining to an HR rep the $500 lunches you had at Bobby Vans and the theatre tickets that ended up on your last expense report. This may be where you are headed if you don’t shape up.
Deloitte manager hangs self [Orange County Register]

National Training Lore

cheers!.jpgA few weeks back we dabbled into the sex lives of those of you that call yourselves accountants. Several comments eluded alluded that national trainings are about as a good opportunity as some of you are going to get.
National trainings are not only a great time to make awkward sexual advances, they’re also a great opportunity to get together with hundreds of your peers and drunkenly complain about your superiors and subordinates. It’s also an opportunity to make a complete ass out of yourself in front of those same peers.
National trainings have also been known for chicanery such as but not exclusive to:
Check out the idiocy, after the jump


• All night excursions to the strip club where one person passes out in the bathroom and somehow the whole night ends up on your manager’s expense report.
• A night of bottle service that results in dragging several lifeless bodies back to the hotel but thanks to some friendly hotel staff, everyone ends up safely back in their rooms.
• Training Instructors showing up to class over an hour late, wearing clothes from the previous day and smelling like Mel Gibson.
• A week where, instead of spending your time learning accounting/tax/audit updates, you spend the entire week in your hotel room working a normal 12 to 14 hour day because your manager’s whip somehow has the range.
So because summer is winding down and national trainings are coming to end for another year, we’d like some stories to order to get an idea of how good/bad/ugly your trainings this year.
We’ve heard that some firms have shortened some of the trainings to just a few days rather than a full week and also that the firms are seriously clamping down on the expenses so maybe your city’s blowout party got axed or you got charged back for the round of shots you bought for everyone. Regardless share your experiences in the comments and send us other gossip that you want us to put up at tips@goingconcern.com.

Is Accounting Fraud Coming to Broadway?

samuel-west.jpgIt goes without saying that the lack of stage and screen productions of anything related to accounting is no accident.
We Americans crave the spoon-fed Hollywood experience and don’t have much patience for cerebral art. The Brits, on the other hand, have decided that accounting fraud is truly meant for the stage because Enron will start showing at the Royal Court Theatre on September 7th and run through November 7th, according to the Theatre’s website. skilling_tie1.jpg
Get the details, after the jump


The comedic tragedy stars Samuel West as Jeff Skilling and it has gotten excellent reviews in previews, indicating that they avoided the accounting aspects completely.
No word on the whether the play will make its way to the States but if it did we’d suggest James Gandolfini as Skilling, merely for the crucial scene where Skilling has a vein pop out of his forehead when he blows a gasket on an earnings call with skeptical analysts. We’d pull for Hugh Jackman as the Arthur Andersen partner but we’re guessing that it would end up being Philip Seymour Hoffman.
Discuss your casting choices in the comments and if you’re in London, you can see the play for as cheap as ten quid so go get yourself some culture.
Enron…The Play [Bruce Carton/Compliance Week]

Ken Lewis Should Have Been a CPA

KenLewisNOPEb.jpgWe know public accounting is hard. The unpaid overtime (*cough* perhaps PwC can tell you about that *cough*), busy season, the misconception that all CPAs are number-crunching mathletes, and, of course, the inconvenience of having to answer everyone’s obscure tax questions. “Dude, I don’t even WORK in tax, I’m an auditor.” “Yeah but I just have this quick question about a deduction…”
As bad as the CPAs may have it, they’ve got it easy compared to this guy. Poor Ken Lewis. Someone invite him to waste a few years in public accounting please, he’s getting pounded from every angle over here, poor bastard.
Let’s check the timeline – please compare to your busy season and see who has it worse if you’re still regretting your decision.
More on KL’s banner year, after the jump


Ken Lewis’ year started sucking in January after the Merrill bonus scandal erupted. This got NY State Attorney General Andrew Cuomo on his back, eventually leading to the Fedgate scandal in which Lewis claimed Ben Bernanke and Hank Paulson “threatened” the Bank of America CEO or kept him on a short TARP leash or some such “OMG did he really just say that?” revelation. He’d already come off a pretty rough year previous but you already know that story.
Bernanke and Paulson didn’t take getting fronted off too kindly (we can only assume) and Lewis hasn’t really gotten a break since. The guy couldn’t even sell his Porsche without feeling the heat. Now a judge is blocking the $33 million settlement he’d love to make with the SEC and some Citigroup reject is being groomed as his replacement. Burn. Oh, and then there are the JP Morgan analysts saying Bank of America will service the loans that TBW cannot since, well, it was raided by Federal agents and barred from making loans by the FHA.
So how bad do you really have it? We told you it could be worse. Next time you’re out there ticking and tying wondering how in the hell you’re going to spend the rest of your life that way, just think about Bank of America and remember you could be Ken Lewis right about now.
What we’d really like to know is: will Lewis be able to limp along for the next 3 years and make it to retirement before totally flipping out?

Bean Counter Obituary: Eli Mason, 1920-2009

Eli Mason, a driving force for the independence of accountants and an outspoken critic of large accounting firms, died last week at the age of 88.
He was a CPA for more than 60 years, starting his own firm in 1946 with two clients. He served on the NYS Board for Public Accountancy for ten years, including two as the chair. He was also the President of the NYS Society of CPA’s for 1972-1973.
According to the New York Times obituary:

Mr. Mason went to the business school of the City College of New York, where he studied accounting with Emanuel Saxe, a distinguished professor and one of the accounting world’s stars at the time. He graduated in 1940 and was a lifelong supporter of the college, now Baruch College of the City University of New York , where he endowed a chair for accounting in 1992 and financed the restoration of the school’s biggest auditorium, now called Mason Hall.

More, after the jump


Mr. Mason was taking on the big firms before most of us were born:

In 1979, he helped found the National Conference of C.P.A. Practitioners, which consisted of 1,500 small firms, and became one of the profession’s most vocal critics of the big accounting firms, then known as the Big Eight. In particular he resented the practice he referred to as lowballing, or aggressively cutting prices, sometimes below cost, to attract new clients.

He also saw the danger of firms offering consulting services and the consolidation of the large firms when the mergers began in the 1980s:

He also spoke against the industry’s mergers in the 1980s, which reduced the number of major firms to five, and he was critical of large firms that offered consulting services as well, fearing this would erode their independence from their clients. Many of his fears turned out to be justified later when the accounting scandals of Enron and WorldCom highlighted the cozy relationship between some of the world’s top accounting firms and the companies they were supposed to audit. Arthur Andersen was one, having been Enron’s accounting firm.

Mr. Mason was known as an accounting purist and earned the nickname “the conscience of the profession”, something we could certainly use more of. Follow this link to read an interview he did with the CPA Journal in 1999. He will be missed and our condolences go out to his family.
Eli Mason, 88, Outspoken Accountant, Is Dead [New York Times]

Going Concern Weekend: Your Weekend Plans

The summer weekends are running out people. So what are you up to? BBQ? Beach? Baseball?
10-Q’s? TAX RETURNS?
Here’s an email we received late last night:
Check out one accountant’s plans, after the jump

I am working both days this weekend. On top of that, I had to work (although not explicitly enforced) on a holiday. The problem is upper management says all these things about maintaining a healthy balance at work but in reality it can never be realized. They say to eat your lunch in peace but they also say do a boat load of work by the end of the day. No sane human can even take an hour in the middle of a day to do such a thing. The duplicity is beyond annoying. Shitty management across the board. Nothing is sacred to these people except for the revenue generated from a bunch of stupid clients.

Sounds like a party. Are you working this weekend? Let us know what’s going on at tips@goingconcern.com. If you know someone that is working this weekend, pass this along so we can get the scoop on how much fun they’re having.
10-Q’s are due Monday, Corporate tax deadline is just a month away, sleep is becoming optional but GC is here for you. Let it out. You’ll feel better.

Colonial Bank Shouldn’t Make Any Late Summer Plans

thumbs down col.gifSo all that fuss over at Colonial Bank? Accounting irregularities, natch. According to Reuters, “Colonial BancGroup Inc (CNB.N) said it faces a criminal probe by the U.S. Department of Justice (DoJ) related to accounting irregularities at its mortgage lending unit, and the struggling lender warned it may be put under receivership.”
The SEC is also taking a peek at the bank’s participation in TARP. Book cooking for taxpayer funds may have its poster child. Top notch, Colonial. Top notch.
Colonial BancGroup faces criminal probe, FDIC action [Reuters]

The FDIC May Have to Seize Itself

PiggyBank_broken.jpgEditor’s note: Adrienne Gonzalez is founder and managing editor of Jr Deputy Accountant as well as regular contributor to leading financial/investment sites like Seeking Alpha and GoldmanSachs666. By day, she teaches unlicensed accountants to pass the CPA exam, though what she does in her copious amounts of freetime in the evening is really none of your business. Follow her adventures in Fedbashing and CPA-wrangling on Twitter @adrigonzo but please don’t show up unannounced at her San Francisco office as she’s got a mean streak. Her favorite FASB is 166.
In honor of Bank Fail Friday, let’s take a look at our doubt over the FDIC continuing as a going concern. Sure, we know it’s technically a government agency and therefore not subject to the same sorts of worries as public companies but there is certainly something brewing here.
We are not in the business of auditing the financial statements of the FDIC, even if they provided such information. Frankly, if they did, we really aren’t equipped to analyze said statements. Be that as it may, you don’t need to be an expert to see that the FDIC is in a whole shit ton of trouble (yes, that is our qualified opinion).
More, after the jump


Remember Colonial Bank? Surely Sheila Bair has been up late since the news broke on Monday that they’d cooked their books, or something about TARP fraud (though the bank never received TARP funds after that TBW deal for $300 million fell through Friday). Maybe it was undercapitalization? Who keeps track of these things?
Anyway, the point here is that the FDIC well has run dry and there’s no magically conjuring up a Treasury line of credit. While Congress has offered up a $500 billion “line of credit” to our friends at the FDIC, that money technically does not exist. (Psst: hate to break it to Congress but yours truly is only a tad concerned that there may be trouble in the bond market ahead).
I’m no mathlete but this should be fairly simple to understand:
Colonial has about $25.5 billion in assets, while the FDIC has about $13 billion remaining in the fund. According to Sheila’s math, new FDIC fees levied against Too Big to Fail will net the fund about $27 billion this year. To put this into perspective, the FDIC lost $33.5 billion in 2008 to cover 25 bank failures. Add it up, as we’ve had 69 bank failures in 2009 to date. Carry the 1 and I believe we arrive at the following figure: the FDIC is screwed.
Like I said, someone might want to check my numbers but it doesn’t look good.
I could also point out that perhaps the FDIC should have chosen the “proactive” route and collected insurance premiums for the last 10 years instead of assuming the good times would last forever but again, not my jurisdiction.
Disclosure: the author has long since diversified her “investments” in the First National Bank of Her Mattress, thankyouverymuch.

Bob Herz is the Most Dangerous Man in America

bob herz.jpgAccording to Reuters columnist, James Pethokoukis, that is. JP argues that the FASB’s most recent attempt to go balls to the wall with mark-to-market will endanger the economy:
“What if an upgraded mark-to-market standard forced slowly healing banks to set aside huge sums to cover paper losses and further crimp lending? Not FASB’s problem.” He also argues that the FASB is motivated by the ideology around transparency as opposed to “practicality and experience”.
The problem, as we see it, with this argument is that JP sees mark-to-market as an inconvenient rule considering the circumstances that the economy is under. That very well may be but we would ask, what the hell is the alternative? “Massaging” the rules every so often, as he puts it? So making the rules less principled when they are inconvenient is the solution? Accounting rules are not written so that we can change them when they don’t work in our favor.
Make no mistake, we’re not crazy about the current system as it exists. GAAP continues to look more and more like the U.S. Tax Code, so the FASB’s sloth-like attempt to develop a “principles system” is promising encouraging something. Mark-to-market is the best reflection of that something. The idea that tweaking of the rules under duress is an acceptable form of determining the direction of financial reporting is what drives accountants f’n berserk.
America’s Most Dangerous Man? An Accountant [James Pethokoukis/Reuters]

PCAOB Reminds Us That They Have Their Own Oversight Board

overtheshoulder.jpgGod bless the PCAOB. Back in 2004, they created the Office of Internal Oversight and Performance Assurance (IOPA) just in case those smartass Peekaboo inspectors were getting a little too self-righteous all over your audit.
Apparently, the fact that the PCAOB has its own internal oversight board is supposed to make all of you auditors comfortable. That assumes you knew about it in the first place. We sure didn’t know this internal affairs-esque board-within-a-board existed.
Maybe realizing that the IOPA had virtually no identity among anyone, anywhere, the PCAOB did everyone the courtesy of updating its “About” section of its website today reminding us of the internal watchdog. So whether you’ve got a legitimate complaint or you’re just seeking sweet, sweet revenge on that know-it-all dick questioning your tickmarks and indexing method, now you can give the PCAOB a taste of their own medicine.
Internal Oversight [PCAOBUS.org]

Rumor of the Day: All Big 4 Firms Freezing and/or Cutting Pay?

We’ve heard some rumors that all the firms are giving serious consideration to freezing pay this year and possibly pay cuts in the Northeast and Mid-Atlantic regions. This would follow the Radio Station rumors that we mentioned last week.
Top performers and promotees, determined by God knows how, may be getting bumps but we haven’t heard anything definite. If you’ve got some deets or just more rumors, shoot us an email to tips@goingconcern.com.

Your New Career: Actor

Are you a young bean counter totally apathetic towards your career choice? Do you wake up thinking that if you have to look at spreadsheets for one more day you might just go mental on everyone in your office?
Well, the gods are shining on you today:
See the role, after the jump

Casting for the short thriller “A Paper Trail”
A group of friends finds a large sum of money hidden away in the woods. Unfortunately the owners come looking for what is theirs.
Casting for the male and female leads:
Matt – A competent accountant who decides that the best course of action will be to keep the money.

Stacey – She is nervous and has her reservations about taking the money.
Send an email with your headshot and resume. We will be casting on Sunday, August 9th, from 12-5 @ The Rosendale Youth Center!

Sorry lady number crunchers, unless you’re capable of summoning your inner-Hillary Swank, this one is for the gents.
So dudes, basically no acting involved. Show up, looking however you normally look and act how you normally act: Competent. Best course of action is to keep the money. Completely natch.
Not a thespian? Then tell us what you’d rather be doing than pulling sample selections or researching 1031 exchanges. SHUDDER. Anything has gotta beat the hell out of what you’re working on right this second.
Casting for a Short Thriller film (Rosendale) [Craigslist.org]