KPMG CEO Pats His Firm on the Back For Being So Behind the Times, Roasts EY While He Does It

Posted on by Adrienne Gonzalez
Blue KPMG signage at entrance to their offices in Canary Wharf

Sky News has obtained part of an internal memo KPMG Global Chairman and CEO Bill Thomas sent to firm partners earlier this month in which Mr. Thomas turns his nose up at EY’s plan to split consulting and audit practices. Some choice quotes from the memo:

We are a partnership that has been strong and growing in some countries for over 150 years.

Our culture fuels this growth and stability.

Our responsibility is to leave the firm better than we found it for those who come after us – we are stewards of the business for our mentees and the next generation.

This is the very fabric of who we are.

To monetize the goodwill of our firm that has been created for over a hundred years, at the expense of the next generation, would be entirely contrary to our culture.

Sky News interprets this memo as implying “such a radical restructuring would be akin to an act of corporate vandalism.” So basically EY partners are a bunch of greedy jerks who have no problem extracting large sums of money from the many years of exceptional client service they have provided and the reputation that comes along with it. Suck it, EY. Suck it and then go cry about it into the bags of money you will get from the split when the deal goes through.

Sources told Sky News KPMG did discuss following EY’s lead when the news of the split broke — rumor is Deloitte is already considering it, though Deloitte denies this — but ultimately decided to retain its current structure even if other Big 4 firms jump on the break-up bandwagon. PwC too has said it has no plans to change its multidisciplinary model.

KPMG chief takes swipe at rival EY’s $80bn break-up plan [Sky News]

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The Greatest Farewell Email We’ve Seen…EVER

Subject: And When I Leave Come Together Like Butt Cheeks

You can figure out where this is going to go based on that alone, I’m sure.

Predictably, this email has been making the rounds since it was sent. If the OP was shocked it went viral in public accounting inboxes up until this point, wait until he sees it here. Names have been changed to protect the innocent, including the OP, who isn’t innocent at all but still deserves that. I think.

Hey Motherfuckers!

Guess who just got the fuck outta Dodge?! This guy! How many people had Craig Douchenozzlestein lasting until August 4, 2011 in the YMP pool?

But seriously, it is NOT easy to get out of these contracts. Im pretty sure it would have been easier to escape from Auschwitz th knew from the second week I start here that this wasn’t going to work out. I mean, working past 7pm cuts significantly into my drinking and foundling women time. So therefore, since October 28, 2008 when I was forced to work until 10pm on my fucking 23rd birthday, these wheels have been in motion.

I feel like it is probably appropriate to go over what got me to this point of release, in case anyone wants to take a similar approach and not have to pay back any tuition money and get a severance package.

The first breaking point for EY was during my staff 2 year when I lost an inventory count and the bitch of a senior manager WOULD NOT stop hassling me about it. Dude, I told you I lost it. No matter how many emails or sametimes you sent me, that sheet isn’t coming back. Get over it. Rose cried less when the Titanic sank. Needless to say, he personally wrote my review. Didn’t go over too well during roundtables.

The next “occurrence” happened in February 2009 during busy season. It was a Friday night and I was newly broken up with [the girlfriend] for the 24th time. That Saturday I had to work on [rando client] in the office because we just received their 10K. However, this was a minor inconvenience because 2 buddies from college were in town and I had a kitchen full of liquor waiting for them. During that night at the bars, I hit it off with one of the girls in our party and, as any guy knows, the first lay after a break up is as necessary as oxygen. So we leave to go back to my apartment only to realize I had given my buddy from college my keys so he could get in later. In a crime of passion and lack of forethought, I punched through our glass window to get into the lobby, only to realize the door to my apartment was still locked. Not letting this stop my teenage sex drive, we hopped a 30 minute cab to her place. The next morning I awoke at 11am realizing I should have been at work 2 hours ago. By the time I got to work it was 1pm, I reeked of booze and was bleeding all over the place because of my hand. AND I had forgotten my badge so called the senior manager to come let me in who greeted me with a “what the hell happened to you?” I also found out I had texted my senior the prior night while in the cab saying “Getting laid in West Randombury, Ill be at work ASAP” at 3am. Needless to say, my year end review mentioned something about “unprofessional” and “this is a career, not some part time job”

Those 2 situations resulted in me being held back for my staff 2 year. After that, there was not much anyone could do that would prevent me from doing what I wanted to do. I worked from home, ignored deadlines, and pretty much didn’t give a shit. I even made up some bullshit excuse that I was stuck travelling back from the Kentucky Derby in Pennsylvania during a 3/31 year-end just so I could catch up on the DVR I missed while away for the weekend.

The final straw that broke Camel Craig’s back resulted from a year-end job at the beginning of January. The Manager was a complete bitch and I spent most of my day exchanging texts with a girl I had met the prior weekend at the bar. She did not take kindly to this. But the breaking point for her was definitely when I didn’t show up til 2pm on that Friday because it was my roommates birthday the night before. Everyone knows Roommates birthday=Your Birthday, right?!?! That’s another thing that gets me about this place, everyone is so caught up in work they forget about enjoying life. Shit, life is so short (especially if you are a raging alcoholic) and is way too short to spend stressing over excel sheets all damn day. Every once in a while enjoy it! Take a sick day to go to the beach. Get hammered on your roommates birthday and come in late, have unprotected se…. well, maybe not too much enjoyment. But you get the message!

But I digress, I truly enjoyed my summers with you guys and the shit we got away with. I hope I was able to have a positive effect on your lives in some way, even if it was just “damn, at least Im not as bad as Craig . Did you see him lick the Backer pole last night?!” I hope you all keep in touch and wish you the best down the road.

If you guys are ever in the Random City area, Im always down to meet up. Just no rioting like we did when Joey and Dan were here.

One Love,

Craig

Good luck to you in your future endeavors, “Craig,” you’ll need it.

Please note, we’re pretty sure this guy is a one-off and not at all reflective of the overall quality of his colleagues. Therefore let’s reserve any judgments for Craig and Craig alone. Judge away, my darlings.

Former SEC Chairman Pitt: Criminal Prosecutions Are Possible for Ernst & Young, Lehman Execs

Okay then! Not exactly what you’d want to hear from a former SEC Chairman on Monday but what’s a former SEC honcho to do? Paint a rosy picture for everyone? Hell no! The man is gong to get real about this latest bank/accounting firm disaster. Barron’s ran down Harv to get his $0.02 on the whole Lehman/E&Y sitch and he he laid it out for Dick Fuld, E&Y, et al. as how to best handle this dicey situation.

Regarding the timing of a response to the report, you best explain yourselves ASAP and while you’re at it, none of that fancy-schmancy language. Everyone needs to be able to understand this:

If they want to avoid the logical consequences of the Report’s conclusions-and none of those consequences are at all good for either Fuld or E&Y-they will need to come forward quickly with a very plain, easily understandable explanation of the errors or their defenses. The longer it takes them to do that, the less likelihood they will have of mitigating the publicity the Report’s allegations have already received.

Consequences, you ask? How about indictments? How about no more SEC clients for E&Y? Next Andersen? Maybe! Shockingly, the SEC seems to be dragging its feet, per the usual standard operating procedure (emphasis original):

Many are wondering why there hasn’t been any action taken, and why the government hasn’t reported on the same events itself. Criminal prosecutions are possible, as are SEC civil actions. For Fuld, an SEC action could mean that he would forfeit his right to participate in the securities industry and possible disgorgement of monies he received over the years from Lehman. For E&Y, the SEC has the power to suspend their right to practice accounting, limit their ability to take on new clients, and impose remedial sanctions.

Yeah, that last part is kind of the crux. As you may recall, Andersen did not bite the dust because of the money it had to pay to Enron investors but because it’s reputation took such a bad hit that states began revoking their license even before the firm voluntarily surrendered its license to practice before the SEC. This occurred after Andersen clients started running away from the firm like a band of lepers. There’s no indication that’s what will happen to E&Y but there’s a 2,200 page report with E&Y’s name all over that says nothing flattering about the firm.

And say what you want about Harvey Pitt: bearded Bush yes-man, lawyer, whatever. As far as we can tell, he has nothing to gain by throwing out wild-ass speculation about what the possible outcomes could be.

Lehman: Criminal Prosecution Possible, Says Pitt [Barron’s]

9 thoughts on “KPMG CEO Pats His Firm on the Back For Being So Behind the Times, Roasts EY While He Does It”

  1. CEO Bill Thomas is spot on – the EY senior partners are monitizing years and years of the partnership goodwill for those chosen partners who happen to be partners now. So those that retired a year ago or 10 years ago, who built up the EY brand/value and “invested” their capital in the consulting/advisory practice get nothing. Shame on EY from stealing from past generations and future generations of partners.

    1. Hey Kevin Brown,

      Old enough to remember Anderson Consulting becoming Accenture. EY selling it’s consulting business to CapGemini, and PWC selling it’s consulting business to IBM.

      In other words, all of the firms did this in the early 2000s.

        1. Deloitte was going to IPO its consulting practice, but it was cancelled due to market conditions (2002). They were late to the party. It wasn’t that this Firm didn’t try to divest Deloitte Consulting.

  3. Hey KPMG, why don’t you tell us instead how much money you made from advising some of your clients to invest their money offshore to avoid paying Canadian taxes? Now that would be worthy news…

  4. KPMG is a terrible company. My husband use to work in the Hartford office, and the workload was so bad he would be at work until 3AM. Slave drivers. Also need I mention 2008 recession- talk to Iceland, KPMG is toxic, terrible culture and treats their employees like dirt.

  5. I seem to recall, as a KPMG Consulting employee, being spun off 20 years ago. And at the time Alan Buckle, the UK head of KPMGC, scurried back to remain part of KPMG while telling us all that KPMGC (becoming AtosKPMGConsulting, not BearingPoint, in UK) was the place to be. I wonder what’s changed to make that spin off the right stewardship choice then but the wrong stewardship choice now? Seems that hypocrisEY has a new employer.

  6. Kpmg is the smallest of the 4 by miles beset with conduct, culture and leadership issues. Thomas has a big mouth for the smallest slowest growing firm. With the number of scandals his firm is involved in an IPO would simply not have any demand. He knows that and so invents some dumb virtue signalling narrative . If we talk about value and generations, how much value in the KPMG brand has he destroyed in 6 years as Global Chairman ?

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