When accounting goes unaccounted for
That’s it. That’s the story.
Published today in India’s business paper The Economic Times:
Deloitte plans to have around 30% of its workforce operating from India within the next four years, with an estimated total employee count ranging from 150,000 to 160,000, as the country figures prominently in the firm’s global growth plans, according to Romal Shetty, CEO, Deloitte South Asia.
Discuss.
In the wake of Roddy Boyd’s epic post from March 11th, China MediaExpress announced some bad news today – Deloitte resigned as their auditor effective Friday and as a result the company’s CFO, Jacky Lam, quit yesterday:
China’s largest television advertising operator on inter-city and airport express buses, today announced that the Company’s registered independent accounting firm, Deloitte Touche Tohmatsu (“DTT”) has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.
As you might have already guessed, Deloitte got spooked after all the fraud talk and they also came to the conclusion that management couldn’t be trusted (even if he did say great things about them):
The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT’s letter also stated that these issues may have adverse implications for the prior periods’ financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods’ financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company’s common stock on the NASDAQ Global Market to permit full disclosure of DTT’s resignation to be disseminated to the public.
So the company now needs a new auditor and a new CFO. Of course you’ll have to work around forensic accountants and a bunch of lawyers that will be helping the company through this little hiccough but otherwise, this should be a snap.
Your mother’s third favorite department store, Dillard’s, has fired PwC as their auditor over a dispute related to the timing of a “tax benefit related to its new real estate investment trust.” The Little Rock-based company replaced P. Dubs with KPMG (who will take every chance they can get to stick it to Team Autumn). Basically the two didn’t see eye on this matter (here’s the 8-K that explains it), Dillard’s asked the IRS for their opinion, who said the treatment was kosher and next thing you know, the audit committee was on the hunt for a replacement.
Anyway, this isn’t really news until you consider the fact that PwC had only become Dillard’s auditor in 2009. Deloitte had been the auditor of the company for 20 years and in many auditor-client relationships, that’s just the honeymoon phase. So that seems a little odd. And couple that with the most recent firing of PwC and you’ve got to wonder what’s the scoop is over at DDS. But all that pales in comparison to this:
In 2008, [Dillard’s] had a dispute with CDI Contractors LLC’s chief financial officer [Ed. note: Link is broken], John Glasgow.
At the time, Dillard’s owned half of CDI. It has since bought the half that it didn’t own.
Glasgow objected the way Dillard’s CFO James Freeman was conducting an audit of CDI. Glasgow disappeared during the dispute and was declared dead [Ed. note: Ditto] more than three years later, although no trace of him has been found.
After Glasgow’s disappearance, Dillard’s restated earnings for several previous years, blaming an accounting error by CDI.
The last thing we want to see are pictures of auditors on milk cartons.
Dillard’s Fires PWC After Accounting Dispute, Hires KPMG As Auditor [AB]
I saw this story on Fox News of all places: Sponsors flee from National Association […]
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Dey took er jobs! But for real, good freakin luck, Gen Z accountants, Boomers are building the ship to wreck.
Deloitte is on the way to becoming Infosys
I worked at Big4 and the quality of work from South Asia is crap. Besides the language barrier, they don’t care because they’re paid crap salaries.
Interesting how none of the commenters nor the author of this post is asking whether this is Deloitte India growing significantly due to in-country growth ops and its headcount is poised to grow to the levels projected by the CEO of Deloitte South Asia, or if the headcount growth is coming from Deloitte US India, which is the offshore arm of the US firm. It’s one thing if it’s growth of client-facing roles within the Deloitte India firm, it’s quite a bit different if the growth is coming from the backoffice functions of Deloitte USI.
It’s offshoring.
And how many India partners will there be? Can anyone say Zero/Notta/None?
>>Deloitte plans to have around 30% of its workforce operating from India within the next four years, with an estimated total employee count ranging from 150,000 to 160,000, as the country figures prominently in the firm’s global growth plans, according to Romal Shetty, CEO, Deloitte South Asia.<<
This isn’t new. A number of the large tech companies are in the process of getting their teams to determine how much of their workforce can be moved abroad. Taking away jobs from Americans because the labor in other countries is “cheaper” just to save money, offer less benefits, and continue growing…