Going Concern

Big 4 Wanna-Be with Displaced Apostrophe Disorder Wants to Make the Jump From a Regional Firm

Daniel Braddock
August 6, 2011

Ed. note: Welcome to the final edition of Decide My Life For Me for this week. Thanks to all of you for keeping the shenanigans to a minimum while I attempted to fill Caleb’s comically large shoes (come on ladies, you know what they say about a man with big feet…) as editor this week. I will still be running the show for the first half of next week so if you have a question for me, DWB, Caleb or the homeless guy I let be my “Associate Editor” in exchange for cigarettes and half-eaten sandwiches, get in touch. Have a great weekend.

Dear Going Concern,

I am a third year auditor at a regional accounting firm. I was recently contacted by one of the Big 4 and decided to interview with them. Two days later, they called and gave me an offer. I told them I would think about it and get back to them. Well, here is my dilemma. I am very well respected at my firm and was awarded a mid-year bump in salary due to my outstanding performance. The partner’s [sic] at the regional firm tell me that I have a great future at the firm. However, it has always been my goal to work for the Big 4 and I finally have my opportunity. As far as compensation goes, the Big 4 company is bringing me in at roughly $7k more than I make now. The question is, should I continue to work for the regional firm where I know I have potential and respect, or should I go into the light and work for the Big 4?

Sincerely,
Dazed and Confused

Dear D&C,
Here’s a baseball story for you.

Essentially, you’ve been playing for the Pittsburgh Pirates for the past three years. You have a small (but dedicated!) fan base, a decent stadium, and food court options that – depending on the season – are the reason fans even come to games. Your coaches are “good, not great,” which is basically a phrase that can be used to describe most aspects of your team. It’s a good job, you can pay your bills, and generally enjoy coming to work every day.

But you just interviewed with the in-state Philadelphia Phillies. League dominators, more fans, more national exposure, higher-caliber players, and oh yeah, a big bump in pay. Your coaches in Steel Country are all telling you that you have a bright future there, but you don’t have to look at the last 20 years of business to realize it doesn’t compare to the past five in Philly. Of course you have potential and respect in Pittsburgh, and sure, your teammates might verbally crap on the fan base in Philly (who doesn’t, amiright?), but come on – why wouldn’t you move?

Back to reality: better clients, better pay, better opportunities, bigger network, more resources.

You can always return to Pittsburgh.

Comp Watch ’11: Deloitte Audit Comp Call Details Are In

Adrienne Gonzalez
August 5, 2011

Thanks to our tipster who spilled the dirty details just moments ago:

No specific salary increases or bonuses were addressed, as the call was high-level. But here are the approximate levels:

Raise and Bonus Percentages:

3-rated (average) – 7% salary increase, 5% bonus
2-rated (middle) – 8.5% salary increase, 7% bonus
1-rated (highest) – 10% salary increase, 10% bonus

Milestone promotions (senior, manager, senior manager) would be 3 to 5% on top of the salary increases above. No additional bonuses or raises for new managers.

As expected, Deloitte talked a bit about salary multipliers, but not nearly to the extent that PwC did in their presentation. Of note on this front are the fact that experienced audit seniors can expect to earn 1.3x their starting salaries, as opposed to 1.5x at PwC. Also notable is the Deloitte model is “total compensation” (salary + bonus + rewards received), whereas PwC’s structure appears to apply only to salary.

News

Smart Guy With Useless Masters Wants to Know How to Break Into Public

Adrienne Gonzalez
August 5, 2011

This is a good one. A really good one. If you have a good question for us (none of this crap we’ve answered before nonsense), please get in touch.

The lesson we learn here is that: A) not all Masters degrees are created equal and B) appreciate those networking and recruiting events you get at school because not everyone is so fortunate.

Hi GC,

Just need some advice and suggestions on how I should approach my accounting future. I finished my MBA – Accounting from Keller (Graduate division of Devry) about 2 years ago. I have a really good GPA (3.72), and I have some years of experience of accounting in private industries under my belt (3 years of being staff act a job recently as an Senior Accountant in a non profit organization. However, my true goal has been to get into public accounting, and I have tried and tried to breakthrough with no avail. Even before my recent job, I have applied to many entry level positions at any and every accounting firms (small, big 4, and in between) and no response. NONE… Networking and job assistance at Keller/DeVry is a joke… I sometimes regret going there…

As for the CPA exam, I am working on them right now. None passed so far, but I am really aiming for finishing it by the end of this year.

Something that piqued my interest recently is that CSUN is offering a Master’s in Accounting program this fall. I have already applied, and I have a good chance of getting in. However, I don’t know if its a worthwhile endeavor.

My question is, should I go back and get another master’s for the whole chance of getting networking and interning opportunities? It feels like it might be a waste of $20000 just for that… but then again, I spent about $50000 at Keller/DeVry for hopes of getting into public accounting with no result… and just because I’ll be attending an MSA program doesn’t mean that it’s a lock in getting into public accounting either…

Another thing that interested me is a MST program, possibly from Cal State Fullerton, or again, CSUN. However, time is an issue for me. I’m in my early 30’s already, and waiting another year seems like a death knell to my already slim window of opportunity in getting into public accounting.
Does anyone have advice on how I can get my foot in the door into public accounting?

Any feedback will be appreciated!

Thanks!

Sincerely,

Hopelessly Frustrated

Dear Hopelessly Frustrated,

If I spent $50,000 on a degree that won’t help me get a job, I’d be Incredibly Pissed Off so congrats on taking this so well. Your frustration is warranted, however, I have seen that Keller complaint before – did you do your due diligence before you forked over that kind of cash or was this a case of you getting suckered into their Masters/CPA review package without reading the fine print? Either way, I am really not going to tell you to go get another Masters just to bump into a few recruiters on campus, that’s a dumb idea and you don’t seem like a dumb guy. I mean if you’d do that just to get a Big 4 job, why not just bring a suitcase stuffed with $100 bills to your nearest Big 4 office and tell them you’ll work for free in exchange for work experience?

You’re right that at 30-something your chances of breaking into public are slipping by the day, old man. My thought on this is that at 30, you have pretty much formulated your opinions on the world, lost the idealism of your youth and settled into who you are pretty comfortably. Of course, the Big 4 don’t like hiring people with solid opinions about how the world works, it’s much easier to take on an army of starry-eyed 22-year-olds eager to be told how they feel and what they think.

That being said, sounds like you have a lot to offer, especially if you knock out the CPA exam. I have difficulty believing you cannot get in with any firm; when you say you’ve been trying, what exactly have you been trying? Lingering outside of recruiting events pretending that you attend that school? Waiting outside in the parking lot to pounce on HR people?

If you haven’t already, I would get your ass on the good old Internets and start networking like a motherfucker. There are tons of recruiters lurking on Twitter and LinkedIn, and the better your professional presence on these sites, the higher your chances of bumping into one. It can’t hurt.

Firms do troll the schools you mentioned (both CSUN and Cal State Fullerton have – believe it or not – decent accounting programs, at least by California standards) but do you really want to be elbowing 25-year-olds out of the way at awkward recruiting events? Instead, I would advise getting active with CalCPA and hitting any other professional networking events (like AICPA conferences) you can afford. It’s all about who you know, and if you know enough people, eventually one of them is going to know where you can get in and be so impressed with your decent GPA, previous experience and communication skills that they will put in a good word for you. It can’t hurt. Another $20,000 on a second degree, however, sounds pretty painful.

Good luck!

Deloitte

Deloitte Hedge Fund Adviser Threatens Soros Won’t Be the Last

Adrienne Gonzalez
August 5, 2011

When George Soros announced he was essentially shuttering Soros Fund Management and his infamous Quantum fund after almost a decade of declining new client money, you could almost hear the jaws drop around the world. But one person was not surprised: Ellen Schubert, chief adviser to Deloitte’s hedge fund practice.

“Soros won’t be the last,” Schubert told investment website AdvisorOne this week. “Hedge fund managers generally are very smart people who have usually enjoyed what they were doing.”

Earlier in the year, Schubert actually described Soros’ new strategy pretty well when she shared a new trend among startup hedge funds; bypassing clients that aren’t friends or family to avoid hitting the mandatory SEC registration requirement for funds managing a minimum of $150 million.

When Bloomberg told us Soros was out, they made Dodd-Frank sound like a dirty word writing “There’s a two-word explanation for closing what was once one of the world’s biggest hedge funds and consistently one of the best-performing — with returns of about 30 percent annually in its first 30 years: Dodd-Frank.”

How many more hedge fund managers will follow Soros’ lead? And how many of them could blame Dodd-Frank for their departures from other people’s money?

Soros’ fund was exempt from rules that require private investment advisers to register with the SEC but those exemptions will not be an option come March 2012. Which could or could not have something to do with Soros’ decision, though that’s doubtful given the fact this decision has been in the making since 2000.

Comp Watch ’11: Let’s Discuss the KPMG Comp Talks That Started Last Week

Adrienne Gonzalez
August 5, 2011

We’re really sorry for taking so long to get this in order, or rather, Caleb should be sorry because it happened on his watch but, in his defense, he was off in the UK kissing up to the people who actually own this website and therefore technically make sure our checks are signed every month. So we’ll give him a pass. I’m sure ignoring KPMG compensation had absolutely nothing to do with any residual feelings he may have for the firm he once called home.

Anyway, we got word last week that some more KPMG comp talks started some time last week (OK, so they started last Monday) and apparently they are making all those fools at Uncle Ernie’s look pretty lame with their 11 percents.

We have it on good authority that, at least for our audit staff tipster, last week’s comp talks were probably going to bring news somewhere in the 16% range or thereabouts.

Well great, that’s not very helpful at this point, is it? We’ll have to badger our tipster incessantly to see how that worked out (we never heard further so maybe they took that 16.4%, bought a bunch of gold and ran off to Sri Lanka) but if any of you KPMGers have good news to share, please let it launch below.

As always, it’s extra helpful if you A) avoid commenting with your full name so the partners don’t get their Depends in a bunch over you blabbing your salary all over the Internet and B) include where you are, what service line you are in and any bonus.

Earlier: (UPDATE) Comp Watch ‘11: Early Returns Are in at KPMG

News

AICPA Has Chosen Its 2011 Leadership Academy, You Probably Aren’t On It

Adrienne Gonzalez
August 5, 2011

We’re not saying that pillars of the profession don’t frequent this site (we know Tom Hood shows up from time to time) but chances are, if you’re reading this at noon on a Friday with absolutely no intention to even pretend like you’re working for the rest of the day, you’re not among the AICPA’s new Leadership Academy choices.

The diverse group of 34 young CPAs will attend courses, lectures and mentoring sessions to develop the skills necessary to become the next generation of leaders in business, industry, government and the accounting profession.

“The AICPA takes its commitment to diversity and the development of young leaders within the accounting profession very seriously,” said Paul Stahlin, CPA, AICPA chair. “Within the last three years, we’ve happily witnessed a surge in the amount of highly qualified young people choosing to become CPAs. The young CPAs selected to participate in this year’s Leadership Academy have demonstrated their commitment to the profession, to their communities and their potential to become future leaders.”

This year’s participants represent a cross section of the profession’s role in the American capital market system, meaning they come from different backgrounds, specialties and even ethnicities. Some work in public accounting and others in business, industry, government or academia. The 2011 class has twice the number of business, industry and government participants as the classes of 2009 and 2010. The tax and audit split is 50 / 50 and 11 states have first time candidates. On an ethnic, gender and geographic basis, this year’s Leadership Academy is as diverse as America. They are equally divided between men and women and include CPAs of Asian, African American, Caucasian, Hispanic / Latino, Native American and Pacific Islander descent from all over the United States.

“The Leadership Academy is a great example of how the AICPA works to achieve its vitally important mission to develop young CPAs to lead the accounting profession and help meet its obligation to serve the public interest,” said Barry Melancon, CPA, AICPA president and CEO, who will address the Leadership Academy. “These ambitious, talented professionals are the future of the accounting profession. And through the AICPA’s Leadership Academy, the future begins now.”

The Institute selected the participants from a large pool of candidates sponsored by either their employers and/or state CPA societies. Candidates, who must be under 35 years of age, were selected on the basis of their work history, licensure information, professional volunteer activities, community service and awards and honors. In addition, each candidate supplied a statement explaining why participating in the academy would be important personally. AICPA senior leadership reviewed and evaluated each submission and a selection committee recommended the participants. All finalists were personally approved by both the AICPA Chair and CEO.

What this means is that it isn’t too late for a lot of you, but, you know, you better stop spending so much time complaining about work and start kissing up to your state society folks.

In all seriousness, this is an excellent opportunity for these young CPAs, and if any of them do somehow read this, we’d love to hear from you and talk about how you feel about being chosen.

Accounting News Roundup: Economy Adds 117,000 Jobs; FASB Takes on Private Co Accounting; Who Pays the Lowest State Business Taxes | 08.05.11

Adrienne Gonzalez
August 5, 2011

Employers hire 117,000 in July; jobless rate slips to 9.1% [Washington Post]
Hiring picked up in July, the government said Friday, offering evidence that the nation is muddling through a period of very weak growth but not falling back into recession. Employers added 117,000 jobs last month, the Labor Department said Friday, compared with a revised 46,000 in June and better than the 85,000 net new jobs that forecasters had expected. The unemployment rate ticked down to 9.1 percent, from 9.2 percent in June.

FASB Meetings to Address Private Company Accounting Issues [Journal of Accountancy]
FASB said it is hosting two public round-table meetings in October to discuss issues relating to existing private company accounting and reporting standards. The meetings, scheduled for Oct. 11 and Oct. 17, will discuss issues including accounting and disclosure requirements relating to variable-interest entities, interest rate swaps and level 3 fair value measurements.

The auditing profession in Bangladesh: Turning the tide? [The Financial Express]
There were times when the auditing profession in Bangladesh used to draw a lot of criticism from the company directors, researchers, and popular press for their perceived failure to do their job as auditors properly; the quality of audited financial statements were questioned, and the role of the Institute of Chartered Accountants of Bangladesh (ICAB) in disciplining its members was challenged.

California taxes from businesses decline [The Orange County Register]
California businesses paid $85.4 billion in state and local taxes in the 2010 fiscal year, according to a new report from the Council on State Taxation and Ernst & Young LLP. California’s corporate income tax revenue declined 18% from July 1, 2007 through June 30, 2010, and its property tax revenue plunged 27%, reflecting the state’s real estate woes.

Does Connecticut Really Have Nation’s Lowest Business Taxes? [The Hartford Courant]
Connecticut businesses have the lightest tax burden in the nation, according to a new study that is being hailed by some as proof that companies are overly coddled by the state, and slammed by others as misleading and dangerous. The study done by Ernst & Young for the Council on State Taxation (COST) adds up the total amount of state and local taxes paid by business in each state — which was $6.9 billion in Connecticut in 2010. Each state’s total is then divided by that state’s total private-sector economic output, for a percentage.

E&Y beefs up its insurance team [The Royal Gazette]
Accountants Ernst & Young (EY) has announced three new appointments to its London and Bermuda insurance team. Paul Cooper, Simon Burtwell and Ben Reid have all been appointed to senior roles due to increased demand from its clients.

Audit of Alameda County assistance program reveals gross mismanagement [The Oakland Tribune]
An Alameda County audit of a now-defunct countywide assistance program shows hundreds of thousands of dollars in mismanaged grant money and questionable expenses — including money spent on alcohol, massages and dubious travel.
The audit of the Associated Community Action Program, commonly called ACAP, also confirms what former employees had asserted — a complete lack of oversight by the program’s governing board. That board was made up of one county supervisor and one elected official from every city in the county, excluding Berkeley and Oakland.

Should Internal Audit ‘Do SOX’? [Norman Marks via Sustainable Business Forum]
There is a sharp divide among internal audit professionals as to whether the internal audit function should play a significant role in the SOX program. In the first few years of SOX, management more often than not looked to internal audit as internal control experts to lead the development and implementation of the SOX program.

Corporate Accountant With a Broken Shift Key Seeks New Career

Daniel Braddock
August 5, 2011

(Only until Caleb stops hitting on hot Polish girls) Ed. note: if you have a career question for our team of accounting drop-outs plus the one loser who never took the CPA exam, get in touch.

I am a young professional, I have an undegrad [sic] degree in finance and am finishing a masters in accounting. I’ve worked for 2.5 years in corporate accounting and 3 years in accounting/finance for a university. I have no public accounting experience. I want to gain a role in transaction advisory or the like.

I was recently offered a job with a small/mid size public firm in a Senior Associate role for their transactions group. The offer is 60k. should i jump at this offer, am i lucky to get a senior role? Should i hold out for a public firm in an associate role?

Can i make the jump from the midsize firm as a senior to a big 4 as a senior in a few years?

Thanks!
[Name redacted for privacy reasons. Let’s call him Barnabus]

Barnabus,
I’m going to keep this short because the financial world might come to an end before I reach the fourth paragraph.

I suggest you heed the Blacksmith’s advice and strike while the iron is hot.

The transaction advisory groups across the public accounting spectrum are heating back up from their frigid days of ’08 and ’09, with hiring numbers up for both the experienced and entry-level channels. Although your degrees will serve you well in your career, your 5.5 years of experience don’t bring much relevant experience to the table. Would it be nice to wait and see if you can land a transaction advisory role at a Big4? Sure. But with the market down ~~200~~ ~~300~~ ~~400~~ OMFG 500 POINTS TODAY, unemployment spreading like viral Bieber videos, and the economy stuck in park with four blown out tires and an elephant sitting on its trunk, you take the open door and thank your lucky #*&@ing stars your particular iron is hot. You have an opportunity to make a move right now in your career that will put your career on the track you want.

(VIDEO) The CBH Raleigh Interns Present: Insanity!

Adrienne Gonzalez
August 4, 2011

Ever see those annoying exercise infomercials in the middle of the night that promise ripped abs and a tight core, all while screaming at you to get your fat ass off the couch and get started for just 12 easy payments of $99.95?

Well a few Cherry, Bekaert & Holland interns in the Raleigh office decided to make a video that pimps out the greatest fitness plan of all-time – a summer audit internship – with that same high energy madness. We have to admit we didn’t have high hopes until we actually watched it and let’s just say these interns did not disappoint.

When we asked a CBH spokesperson if these amazing interns will be joining the team come fall, we were told “Full time offers? These are obviously all super-accountants, so I’d be afraid to see what they’d do to us if we didn’t. However, I hear HR is still looking at their before pictures.”

Amazing results!

Small Business

The New York Times Has Some Helpful Suggestions For Non-Accounting Nerd Business Owners

Adrienne Gonzalez
August 4, 2011

And you guys had the nerve to talk smack about me trying to give inheritance advice yesterday. Pfft.

In a recent article entitled Basics of Accounting Are Vital to Survival for Entrepreneurs, the New York Times tells the tale of Bart Justice, an industrial engineer-turned-business owner who decided to start a mobile document shredding business in 2004 after a rash of new security laws. Justice got a loan from the bank, bought a mobile shredding truck, hired a driver and opened a shop in Huntsville, AL called Secure Destruction Service. Sounds good, no?

In its first year, the company had $70,000 in sales. Within four years, the company had annual revenue of $500,000, six employees and two offices. Again, that sounds great but revenue is not the same as equity or net worth, even a non-accounting nerd like me knows that much.

When he wanted to add another shredding truck, Justice went back to the bank and borrowed more money. The bigger he got, the more money he needed to borrow. Somehow, he didn’t understand that this borrowed money was not actually revenue and was, in fact, a liability as he had to pay it back at some point.

“I knew how to print a financial statement from QuickBooks, but I couldn’t tell you what it meant,” he said.

Fast-forward to 2008, when Justice joined a peer group for Christian business owners. “They would ask me questions about my numbers, and I didn’t know how to answer them,” he said. “They told me my business was going to fail unless I got a handle on paying down my debt.”

No shit, Sherlock, did you need a financial professional to tell you that?

Here’s the gist of the article: if small business owners don’t get number-crunching, put the money out and hire someone who does. What the NYT does not have the balls to suggest is that small business owners should stop saying “I hate accounting” because they think it’s still cute and go out and take an introductory accounting class or two. No one expects business owners to be able to pull analytics out of their asses but it can’t hurt to maybe at least understand that you want liabilities to be less than assets to stay alive.

Former BDO Partner Gets Probation For Cheating on His Taxes

Adrienne Gonzalez
August 4, 2011

Poor BDO, they never get in the news. But hey, they do today!

Former BDO partner George Mark got off easy this week when U.S. District Judge Nora Barry Fischer said he didn’t deserve to go to jail thanks to his “extraordinary” charitable efforts and remorse for his actions. Mark’s tax evasion was uncovered during an investigation into Pennsylvania beverage company Le-Nature’s, who apparently specialized in nepotism, ass water and fraud.

Mark will instead serve two years of probation and pay a fine of $30,000.

A federal jury recently found Le-Nature’s former president Robert B. Lynn guilty of 10 counts of bank fraud, wire fraud and conspiracy. The jury found him not guilty on 10 additional fraud counts and deadlocked on five others, which left Senior U.S. District Judge Alan Bloch Jr. no other choice than to declare a mistrial on the remaining charges. The company’s CEO Gregory Podlucky and other company officers are facing prison for their part of a $37 million fraud.

While investigating Le-Nature’s ugly mess, the IRS found out that Mark declared fake travel expenses on his 2004, 2005 and 2006 tax returns for about $90,000. The IRS determined that Mark was living the gangsta lifestyle out in the Philly ‘burbs, rented an apartment in NYC, traveled a lot and owned a few luxury cars.

The U.S. attorney’s office had hoped the judge would come down with jail time in order to convince would-be tax cheats that this is serious business but the judge felt Mark’s volunteer efforts for Hope International and other charities was sufficient proof that he wasn’t all that bad of a guy, perhaps just a little misguided.

Back in 2008, 74 investors alleged fraud and negligent misrepresentation against Wachovia Capital Markets, Wachovia Securities and two accounting firms, Ernst & Young and BDO Seidman for their respective parts in the Le-Nature’s scam, in which company officers (mostly CEO Podlucky and his kin) would secure loans for business equipment only to turn around and use that money for things like, oh, sapphires and overpriced watches.

E&Y audited Le-Nature’s until BDO took over. “E&Y was aware that Podlucky could single-handedly influence or manipulate the company’s financial results …” charged the lawsuit. The company basically made up $240 million in revenue and BDO auditors declared the company’s financials were free of material misstatements. FAIL.

Anyway, congratulations to the former partner for, uh, being such a model human being. Or something.

KPMG

KPMG Global Plans to Hire 75,000 New Grads Over The Next Three Years, But Not Here

Adrienne Gonzalez
August 4, 2011

And they decided this information was so important that they had to send out a press release telling everyone about it.

KPMG’s member firms will hire approximately 75,000 campus graduates worldwide over the next three years, representing a 25 percent increase in the firm’s historical on-campus resourcing target.

The global member firm network has identified a need to hire approximately 250,000 new hires over the next five years and graduate recruitment plays an essential role in meeting the firm’s long term global growth strategy. New hires will be integrated into all of KPMG’s functional areas – Audit, Tax, and Advisory, and Internal Firm Services.

“While KPMG’s firms plan to hire a large number of new graduate employees, it’s important to note that our focus is about more than simply high volumes – it’s about recruiting top talent to drive our growth now and into the future,” said Alim Dhanji, KPMG’s Global Head of Resourcing, KPMG International. “To attract the best, we offer new graduates the opportunity to work alongside talented professionals in 150 countries, solving complex client issues and making a difference to some of the world’s most prestigious organizations.”

Don’t get all hot and bothered about this one, sophomores and juniors, it looks like a large chunk of KPMG’s new “top talent” pool will be out in the Asian Pacific. They call the region “one of KPMG’s strongest performing regions” and “a pillar within the firm’s global strategy.” Uh huh.

Remember, the economy doesn’t suck everywhere around the world.

“Globally, we are seeing a revitalized labor market, with students seeking international work experience, which we’re able to deliver on,” says Dhanji. “The competition for top talent is fierce. To attract the best, we offer programs that place students at the heart of our business to fully develop their global mindset, which will in turn enable them to realize their full potential and help us to deliver on our business goals.”

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