Going Concern

(UPDATE) Can Anyone Make Sense of Ernst & Young’s Hiring Numbers?

Caleb Newquist
June 16, 2011

I’ve been out of the numbers game for awhile now but for the life of me, I can’t figure out just how many people Ernst & Young will be hiring off campus for this year. Or is it last year? The firm put out a press release yesterday that states that it “will hire approximately 5,000 students from campuses across the US in the 2010-2011 academic year.” That’s all fine and good but it’s different from the report in CNN back in March that we told you about that said “It’s looking to hire 7,000 employees from college campuses — 4,500 full-time and 2,500 interns […] in 2011.”

That report also stated that “campus recruits are up 20%,” but yesterday’s press release said “campus hiring [increased] 25 percent from last year.”

All told, E&Y and the rest of the Big 4 are hiring lots of people but the numbers don’t quite add up. The nice folks at E&Y are trying to help me out, so I’ll report back when I’ve got some answers.

UPDATE: I’ve been informed by an E&Y spokesperson that “numbers referenced in the release are for the US, whereas the numbers cited in the Fortune article are for the Americas.” To clarify, the “Americas” includes the U.S., Canada, Mexico, Central America, South America, Bermuda, the Bahamas, the Cayman Islands and the Caribbean.

[via Ernst & Young]

News

Paul Ryan: Payroll Tax Cuts Are Economic Red Bull

Caleb Newquist
June 16, 2011

The Hill reports that Congressman Paul Ryan isn’t interested in getting the economy all hopped up like an adolescent trying to cram for a mid-term,“I’m not a Keynesian, so I don’t think sugar-high economics works.”

And that this discussion is old hat, “We’ve sort of proven this already, a number of times. Temporary tax rebates don’t work to create economic growth. Permanent tax changes do.” [The Hill]

KPMG

Happy Birthday Phil Mickelson!

Caleb Newquist
June 16, 2011

His Leftyness turns 41 today, as one of the favorites of the U.S. Open and of course he’ll be rocking the KPMG lid. As fans of the links know, Phil seems to come apart at the seams at the Open, not unlike certain KPMG audits. Will this year be different?

Who knows! What we do know that today is Fill’s day of birth and we send him best wishes and best of luck in the Open. Wouldn’t that be a great send off for Tim Flynn? Not that Mick needs the added pressure.

Anyway, as is (what we imagine to be) tradition for the major tournaments, T Fly and John Veihmeyer are holed up in the executive conference room watching the tournament as the rest of you are probably trying to make heads or tails of the Next Level training.

ANYWAY, leave Phil some well wishes in the comments. Don’t worry, we won’t make mention of this again, unless something hat-related occurs.

CPA Exam

Can Convicted Felons Become CPAs?

Adrienne Gonzalez
June 16, 2011

As many of you are already aware, any sort of criminal record can negatively impact your career options if you’re considering public accounting. For one Going Concern reader, his sketchy past could mean the difference between becoming a CPA and spending his life as a payroll clerk.

Here’s the question:

Suppose I am an educated, convicted felon (possession of marijuana w/ intent to distribute when I was 19, currently 22) who is taking the CPA exam in the fall after graduation from college. I expect to pass (I’ve studied long and hard) and I have a few questions for you. Do you think accounting firms would be open to hiring a convicted felon, despite qualifications and a non-fiduciary felony? Also, would a state board (NH specifically) certify me as a CPA, provided I was able to get a job and fulfill the experience requirements? Do you have any precedents or similar situations you could inform me of?

Well, let’s start with the New Hampshire application for licensure, which contains the following simple question:

Have you ever been convicted of a felony that has not been annulled or committed any dishonest act?

If yes, please attach a separate sheet, which contains a complete description of the circumstances.

What this says to me is that you should start working on what you’re going to put on that separate sheet. You won’t get points for oversharing but you may get credit for honesty and clarity.

As you pointed out, it’s worth noting a few things. First, you were 19. We all do stupid things when we are 19. Granted, your stupid things got you a felony when it gets most 19 year olds regretful tattoos or embarrassing stories but still, you were a kid. That said, you’re still a kid to some employers/authority figures, so don’t get your hopes up expecting people to automatically assume you’ve reformed yourself in 3 years.

Second, it’s not like you robbed a gas station, stole credit card numbers or ripped off your Boy Scout troop – the fact that you were once in possession of a large quantity of marijuana isn’t much of a reflection on your character as it pertains to your ability to stick to the professional code. But (and this is the part that sucks), marijuana is still illegal and therefore the Board of Accountancy will consider that fact independent of what you were actually charged for. To some, the fact that you committed any crime at all means you are not of the ethical fortitude required to be a CPA. Let’s ignore the fact that many of the people who feel this way break the law all the time; talking on their cell phones behind the wheel, speeding, and driving while mildly intoxicated after happy hour.

The general rule here is that you should be fine as long as your conviction isn’t a fiduciary one but it’s up to the state to decide. Whatever you do, don’t try to hide it, as the important thing here is proving you are trustworthy. And you may want to talk to a lawyer about having your conviction expunged or knocked down to a misdemeanor. It probably doesn’t change much for you as far as jobs go (hope you aren’t planning on going Big 4, they won’t touch you with a conviction like that) but hey, you’ll be able to carry a gun (you know, for those dangerous engagements).

Good luck!

Accounting News Roundup: What Will Audit Changes Accomplish?; Rangel Dumped Vacation Home; To Catch an Accountant | 06.16.11

Caleb Newquist
June 16, 2011

Europe Faces ‘Lehman Moment’ as Greece Unravels [Bloomberg]
The European Union’s failure to contain the Greek debt crisis is sending fresh shockwaves through currencies, money markets, equities and derivatives. The euro lost more than 2 percent against the dollar in the past two days and the cost of protecting corporate bonds soared to the highest level since January, with credit-default swaps anticipating about a 78 percent chance that Greece won’t pay its debts. Equities declined around the world, while a measure of fear in fixed-income markets jumped the most since November.

What Should Be Int? Would Users Know When They Saw It? [Re:Balance]
Red flags aren’t very useful if everyone is color blind.

Audit Firm Term Limits: Nothing Else Left to Try [Accounting Onion]
Speaking of things that aren’t proven useful.

Still Writing, Regulators Delay Rules [NYT]
Regulators overseeing financial reform are delaying many of the planned changes in the $600 trillion market for complex securities known as derivatives because they are running drastically behind schedule in writing their new rules. The Securities and Exchange Commission said on Wednesday that market participants would not have to comply with many aspects of derivatives reform scheduled to take effect in mid-July. It declined to specify how long the delay would be in the equity derivatives it oversees.

Rangel Sold Condo, Report Shows [WSJ]
Mr. Rangel, the New York Democrat, sold his condo at the Punta Cana beach villa for somewhere between $250,000 and $500,000 last year. He was censured by the House last year for, among other things, failing to pay taxes on rental income from the resort property over a 17-year period. Mr. Rangel was required to repay those taxes and forced to relinquish his chairmanship of the Ways and Means Committee.

Golfer Goosen’s Tax Court Case Tests Principle That Image Is Everything [Bloomberg]
The international golfers at this week’s U.S. Open in Bethesda, Maryland, will be watching for two-time champion Retief Goosen on the leaderboard. Their lawyers will be studying Goosen’s U.S. Tax Court decision. The South African native challenged the Internal Revenue Service’s analysis of the endorsement income he earned from such companies as Electronic Arts Inc. (ERTS), Adidas AG (ADS) and Rolex Group. The case will affect golfers, tennis players and pop stars from around the world who tour in the U.S., license their images for advertising and hawk perfumes, cars, and jewelry.

‘Convergence’ Hits a Bump [WSJ]
The Financial Accounting Standards Board and International Accounting Standards Board said they will issue a revised proposal to overhaul the rules on revenue recognition, updating a proposal they first made last year. The revised proposal is planned for the third quarter, and companies, investors and other observers will have 120 days to comment on it after it is issued.

Adelphia’s Rigases, Jailed for Fraud, Lose Bid to Block Criminal Tax Case [Bloomberg]
Adelphia Communications Corp. founder John Rigas and his son Timothy, who are in prison for securities fraud, failed to persuade a U.S. judge to dismiss a pending criminal tax case against them. John Rigas, 86, is serving 12 years and Timothy Rigas, 55, 17 years for looting the cable company and lying about its finances. After a federal jury in New York convicted them in 2004, U.S. prosecutors in Pennsylvania charged the two with conspiring to dodge taxes on $1.9 billion they stole from Adelphia, a cable-television company that collapsed in 2002.

Accountant accused of embezzling $392,000 [ArgusLeader]
A Sioux Falls man who recently served as a watchdog for city finances is accused of embezzling almost $400,000 while working as an executive at SDN Communications.

Florham Park accountant indicted in trying to meet two underage girls in Atlantic County [NJSL]
A 56-year-old Florham Park accountant was indicted yesterday in connection with trying to meet with two underage girls earlier this year in an Atlantic County hotel, officials said. Stephen Bubniak, was indicted on 23 counts, including attempted luring, attempted sexual assault and attempted criminal sexual contact, said Atlantic County Prosecutor Ted Housel yesterday. Bubniak had arranged to meet the two girls, ages 13 and 14, on Feb. 3 and 4, after a series of online chats, Housel said.

News

Is Benjamin Bankes an Independent Contractor?

Adrienne Gonzalez
June 16, 2011

We were wondering about Benjamin Bankes’ employment status with the AICPA, a non-profit professional trade organization, the trade being (loosely) the CPA. They fiercely defend the CPA designation’s legitimacy as a world-recognized credential and work for their members by offering themselves up as experts for legislators who have no idea what they are unleashing with a simple tax tweak. It’s a pretty good deal; we get reasonable security that our financial experts are at a minimum trained in the skills necessary to function at the entry level and the AICPA gets the notoriety that comes with being a 360,000 strong organization with a long history of protecting the integrity of its most precious asset.

So when we found Benjamin Bankes’ picture among AICPA headshots on Flickr, we wondered what kind of employment status he enjoys with the AICPA. Independent contractor? Full-time, taxable employee? Spokespig? I mean he’s right up there with Barry, so it’s got to be a pretty secure gig.

Just wondering. It’s a damn awesome picture.

Career Center

How to Request Recommendations on LinkedIn Without Giving the Impression That You’re Jumping Ship

Daniel Braddock
June 16, 2011

Ed. note: Got a question for the career advice brain trust? Email us at advice@goingconcern.com.

Good afternoon, GCers. No time for small talk. Let’s get to it.

Hi Caleb,

With regards to LinkedIn, do you have any advice on how to request recommendations from superiors, other coworkers, and clients, without giving the impression to my own superiors that I want out? For some background, I am a Senior 3 in EY’s TAS group and have been here since I graduated college.

I like what I do and I work hard to get the job done right, but the double-edged sword of being a “high performer” is that you are continuously staffed on the complex engagements withhat are constantly go-go-go. Needless to say, my social life has become essentially non-existent during the week. I am not actively looking to move to another company given I am up for promotion to Manager this year, but I am starting to think that it would be beneficial from an upward mobility standpoint to make a move elsewhere, and I think getting recommendations on LinkedIn would be a solid start.

Thank you,
J.

Great question. Now, there is no fool-proof way to prevent against raising suspicions, however, you can ask certain colleagues in such a way that will both minimize suspicions and even gain a bit of their respect.

No one knows how LinkedIn will evolve in the coming years. It quickly went from a “why are you on LinkedIn?” website to the year’s biggest tech IPO (for better or worse, but that’s a different story altogether). There’s no denying that recruiters – both headhunters and in-house specialists – use the website as a search tool, so I can understand your desire to beef up your profile. My suggestion is to have recommendations from a peer, a superior, and depending on the relationship, a client. My suggestions for targeting potential rec’s:

1. Superior – The trick here is to pick a superior that is active on LinkedIn. I bet if you searched LinkedIn for the leaders of your group that you’ve worked with, their profiles will fall into one of two categories: a) active or b) dormant. The dormant LinkedIn profile might not show the recent promotion, give little to no description about their practice line or specialties, and they’ll be lucky to have more than 25 connections. The active user (and the person you want to target for a recommendation) will have a very active profile: details about industry knowledge, present title within the firm, probably 100+ connections, and – if you’re lucky – a few recommendations from peers. This is your target.

How to target? Simple. Be honest and straightforward with them in the sense that you are taking your public image within the firm very seriously. You can also mention that LinkedIn is a professional website and you’re hoping to have your hard work properly recognized amongst profiles online; after all, it is a very competitive market within your practice. You can also offer to leave a respectful recommendation on their profile from the perspective of a direct report.

There are two reasons you want to target an active LinkedIn user. First, they know how to use the site, unlike the partner with seven connections who probably doesn’t remember his/her login password. Also, an active user understands the value in having a complete profile. They will likely respect you for taking your public image (and the image of the firm) seriously.

2. Peer – did you and a coworker spear-head a project, push through challenges, and deliver an exceptional product to your clients? There’s nothing wrong with recommending each other’s work. It will demonstrate that you are a team player and work well with those on your level.

3. Client – if you are close with one of your clients, this is a no brainer. Have him/her slap a few nice words on your profile regarding a project or engagement. This will look great on your profile – to both recruiters and your superiors.

The safe, fall back reasoning for pursuing all of these recommendations is that you are hoping to polish up your profile and public image as it is seen within your firm and by your clients. If a recruiter happens to be impressed, so be it. Added bonus.

Has anyone else reached out to one of the groups above? What are your experiences? Share in the comments.

News

Accountant Claims He Was Fired After Notifying Employer About His Wife’s Cancer

Caleb Newquist
June 16, 2011

After Carl Sorabella’s wife Kathy was diagnosed with stage 4 incurable lung cancer, he notified his boss at Haynes Management that he would need to work a modified schedule to care for her. One week later, his boss informed him that his services were no longer needed.

Sorabella said he and his wife of 23 years, Kathy, learned she had stage 4 incurable cancer in late April. He said he asked his employer, Haynes Management, a real estate company in Wellesley Hills, Mass., that week for a more flexible work schedule to deal with his wife’s care.

“When I told my boss, she said ‘We were thinking about laying you off.’ I thought, ‘You can’t do that,'” Sorabella told WCVB.

Oh, but they did do that, Sorabella claims, even after he offered to work nights and weekends.

“Ultimately she said don’t worry about it and come in on Monday, and when I came in on Monday I got a letter that I would be laid off,” he said. Sorabella said the letter stated he was being laid off due to “workforce modifications.” But one week after he was fired, he says he saw a listing for his job on the company website.

Because Haynes is a small company (less than 50 employees), it is protected in such situations under the Family and Medical Leave Act. The rationale being that small businesses cannot afford to let an employee take extended leave to care for a sick relative or loved one like a large company can. Legal or not, it’s probably safe to assume that Haynes isn’t much for Employer of Choice initiatives.

Man Says He Was Fired After Telling Employer His Wife Has Cancer [ABC]

Ninth Circuit Rules for PwC in California Overtime Lawsuit

Caleb Newquist
June 15, 2011

Reuters reports:

The 9th U.S. Circuit Court of Appeals reversed [a lower court decision] on Wednesday, ruling that PwC is entitled to litigate whether the unlicensed accountants can be exempted from overtime laws. The 9th Circuit remanded the case back to a district court in Sacramento, Calif. for more proceedings.

So, no this isn’t over. The actual trial still hasn’t gone down but this is definitely a big win for PwC.

A firm spokesperson provided us with the following statement: “PwC is pleased that the Ninth Circuit supported its arguments in this important case. The firm greatly values these employees and considers their work an integral part of PwC’s success.” An attempt to reach counsel for the plaintiffs was not immediately returned. Will keep you updated with any new details as we learn them.

Previous Coverage:
Campbell v. PricewaterhouseCoopers

News

Australian Accountant’s List of Items to Spend Stolen Money on Pretty Typical with the Exception of Sequined Gloves, Autographed Thriller Albums

Caleb Newquist
June 15, 2011

Rajina Rita Subramaniam seemed to be Down Under version of Sue Sachdeva until I got to “Michael Jackson memorabilia.”

A Sydney accountant is set to plead guilty to defrauding her employer of $45 million [USD 47.9 million] before spending the money on several beachside apartments, champagne, diamond jewellery and Michael Jackson memorabilia.

Rajina Rita Subramaniam was working as a senior accountant with the financial group ING Australia in October 2009 when she was arrested for allegedly siphoning tens of millions of dollars from the company into a number of private accounts.

Police allege that a search of ING’s Kent Street office uncovered a cache of luxury items, including 600 pieces of jewellery from Tiffany & Co, Tag Heuer, Bulgari and Paspaley Pearls, 200 perfume and make-up items from Chanel and a bottle of Dom Perignon champagne.

Court told of $45m shopping spree [Sydney Morning Herald]

News

FASB, IASB Making Damn Sure They Don’t Mess Up Their Revenue Recognition Proposals

Caleb Newquist
June 15, 2011

Because, god, wouldn’t that be awkward?

The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010.

It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.

Sir David Tweedie admits that, “It is important that we get this right, first time,” and “the boards and staff have undertaken an unprecedented level of outreach to get us to this point, and why we are keen to treble-check that our conclusions are robust and can be implemented with minimal disruption.”

Maybe I’m reading too much into that statement but it sounds as though the Boards may be trying to stave off more nasty letters.

[via FAF/IFRS Foundation]

Broker-Dealers, Prepare Thyselves for More Intrusive Audits

Caleb Newquist
June 15, 2011

SEC commissioners will vote today on proposed changes to broker-dealer auditing and reporting rules at a meeting in Washington. As with the 2009 rules, which tightened oversight of advisers’ custody of client assets after Bernard Madoff Ponzi scheme was exposed, the new changes increase oversight of the minority of about 300 broker-dealers who hold customers’ cash.

The proposals — which would be opened for a 60-day comment period — would require that a broker-dealer’s internal controls be checked by a registered public accounting firm and would let regulators examine the broker-dealer’s audits. Broker-dealers would have to file quarterly reports describing whether they have access to client money and how any access is controlled. [Bloomberg]

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