Going Concern

Big 4 Senior Associate with ‘Offers in Hand’ Wants to Ask for a Raise Without Sounding Like a Greedy Bastard

Daniel Braddock
May 6, 2011

Ed. Note: Give DWB a warm welcome back to regular posting. If you’ve got a question for the advice column, email us at advice@goingconcern.com.

Good afternoon, everyone. Caleb must have tripped and knocked his sombrero-wearing-head last night, because he has invited me back for a weekly post. Regardless, I’m excited to be back. Let’s knock the rust off, shall we?

I am a 2nd year senior associate at a Big 4 firm. I like doing public accounting but am thinking that at my level and performance I am underpaid. I’ve several offers in hand but I do like what I am doing.

Now this does seem like a silly question – how do I go about asking for a raise without making it sound like that all I care about is money? In this economy…what are the chances that I am gonna get what I ask for?

Thanks a bunch!

You don’t specify whether your “several offers in hand” are for positions in the private sector or with other public accounting firms, so I’m going to address both.

Private sector – why are you interviewing with companies if you “like doing public accounting?” Turn these down.

Public accounting – you should be considering these offers if they are with another Big 4 firm. Do not go from Big 4 to mid-tier. Don’t have any offers with the other Big 4? See your own comments above and interview with the other firms. All four have problematic staffing issues this spring as the young guns continue to burn out. Sure, you’ll receive a nice little bump in pay when you transfer from one firm to another, but remember you’ll be down at the bottom of the networking food-chain.

Considering both the fact that you work at a Big 4 and it’s only a few months away from mid-summer raises and/or compensation restructuring, asking for a raise now will probably not lead to much. You work for an international firm responsible for more than 100,000 employees…you are one person. Granted, you are a second year Senior, which is one of the areas that all firms have a shortage at.

It also depends on your what practice line, your performance rankings and industry, as all of these factors play into how much leverage you will have. If you’re a top-ranked staff member with your CPA and on track to be a lead senior in the fall, your firm may toss you a $1,500 bone to keep you salivating for summer raises. If you’re more of the middle-of-the-road-and-I’m-studying-for-BEC type it would not totally surprise me if you were not given a raise or even shown the door. It would take the length of an episode of “30 Rock” for the word to spread through your office that all it took to get a bump in pay was to claim you had an offer from another firm. Leadership isn’t stupid.

Regardless of where you stand when compared to your peers, be absolutely certain you’re comfortable taking one of the offers you have should the latter situation happen. Your best bet is to wait until summer raises come through. The other firms will still be hiring experience staff in September.

Deloitte Bankrolls Center for Ethical Leadership at Notre Dame

Caleb Newquist
May 6, 2011

John Veihmeyer can’t be pleased by this.

The Notre Dame/Deloitte Center for Ethical Leadership will focus on advancing ethical leadership in business, including research, thought leadership and the dissemination of ethics-related content to the business community in the United State and around the world, the university announced Monday.

The center is being established with a major gift from Deloitte LLP, a private professional services company, according to the university. The amount of the gift was not disclosed.

Presumably portions of the curriculum will educate students on how to piece together your spouse’s new hobby with insider trading activity.

Notre Dame starts business ethics center [SBT]

News

Citizens of Ohio Town Unleash Rage on Area Hoteliers That Is Normally Reserved for H&R Block Employees

Caleb Newquist
May 6, 2011

So this happened:

An Ohio hotel has been fending off angry phone calls because a broken rope on its flagpole led some to think the business was mourning the death of Osama bin Laden. The rope left the U.S. flag stuck at half-staff outside a Hampton Inn in Springfield in western Ohio two days before bin Laden was killed, its assistant general manager Connie Smith told msnbc.com. However, people started noticing the flag and assuming its position was in honor of bin Laden on Tuesday. The hotel and its company received dozens of calls from people who were either upset or angry. One threatened to run the hoteliers out of town.

Ohio hotel: Half-staff U.S. flag not mourning bin Laden [MSNBC]
Earlier: Today in Tax-Related Violence: Man Shoots at H&R Block Employee for a Mistake on His Tax Return

PwC
Salaries

Comp Watch ’11: PwC Rolling Out ‘Exciting Changes’ to Compensation Structure

Caleb Newquist
May 6, 2011

This just in:

Hey Caleb,

I’m surprised no PwC’er has posted this yet. Earlier this week, Bob Mortiz hinted into “exciting changes” as to compensation structure and transparency, with details to be provided this upcoming Monday on a webcast. It might be worth posting this on your website to get some reactions from fellow PwC’ers about what this means, or to facilitate blind speculation, which is always fun.

If this communiqué from BoMo is, in fact, a few days old, we are a little disappointed it took so long to reach our inbox. Regardless, we’re grateful for the tip now and let’s get on to the important matter of speculating about what ‘exciting changes’ entails, shall we? The possibilities are endless but we’ll try to kick things off:

A. Option to receive entire compensation package (including health benefits) in Omaha Steaks.

B. Spot bonuses given to employees with abnormally high utilization who manage to not die.

C. Elevator speeches will have bearing on employees’ merit increases.

D. Outstanding individual efforts will be rewarded with the choice between a serenade from Steve Beguhn or a special appearance by the DC-area piano player for your next fiesta.

E. Various competitive poaching payouts: KPMG Partner: $10,000; All other KPMG employees: $5; Ernst & Young Banking Partners: A punch in the face; Deloitte partner: $20,000; Deloitte partner with a full head of hair: $100,000 (hey, they’re hard to come by).

F. Your ideas.

CPA Exam

Can a CPA Exam Candidate Who Failed REG With a 71 Prepare for a Retake in Three Weeks?

Adrienne Gonzalez
May 6, 2011

Today’s CPA exam question from the mailbag has to do with a familiar topic to many of you: failure.

Hi Adrienne,

I slaved for an HOA audit firm and our busy season just officially ended. I found out last week that the very last day I can schedule to sit for REG is on 5/27 so that give me approximately 3 weeks to cram for the materials. I sat for that section in January and failed at 71. I am planning to spend 4 hours studying during the week and 8 hours to cram on Saturday and Sunday so I can study at most 36 hours per week. Should I go try for 5/27 or postpone the exam until July when I am more prepared?

Also, I am using both Becker & Gleim to review. In the past, I watched the Becker lectures, completed MCs and simluations on both Becker & Gleim and using Becker book to review. Due to not having enough time, should I just work on MCs and simluations and forgo re-watch the lectures?

Your advice is greatly appreciated.

Our candidate has also sent in her score report, included below:

We should point out here that our candidate admitted in a follow-up e-mail after very little badgering that she had, in fact, done poorly on the simulations as she suspected, telling us “I went into Regulation knowing that I was weak on simulations and as you can see on my score report, not making an effort reviewing and re-doing the simulations led to my failure.” And yes, it’s pretty clear to us that’s exactly what happened here.

With only three weeks to study before the new test date, it wouldn’t make sense to spend much time reviewing lectures or even entire chapters as a 71 shows an excellent command of the information and her score report confirms that suspicion. Unfortunately, the days of “kind of blowing the simulation part of the exam” are over with the advent of CBT-e, meaning you’re obviously going to have to do better in that area if you want to pass.

The good news is you get it, overall, except maybe for that federal tax process area. Check the CSOs (page 25 of the PDF) for more detailed info on what is tested in that area (naturally it has a lot to do with federal taxation) and practice problems in those areas. If you feel particularly lost in any one area, go ahead and read the chapter or watch a lecture over again but since time is of the essence, try not to use the lectures at all. Don’t get too focused on your one weak area, though, since you presumably haven’t studied any of this stuff for months. You’ll need a good once over (that means all your MCQ at a minimum) before exam day, so try to set aside at least three hours a day, more if you can fit it in. If you have more than three hours a day to study, try not to study for more than three hours at a time, break it up to some in the morning and some in the evening if you can.

As for the simulations, practice working through simulation problems while timing yourself. Set your cell phone alarm or an old school kitchen timer to work out 10 – 15 minutes per problem and start blasting through them on whatever software you still have access to in hour-long intervals. Work towards finishing each simulation in no more than 10 minutes as that will allow you time on exam day to review your sims once you have finished.

Good luck!

Accounting News Roundup: Is the Satyam Mess Over?; IRS All Over Kabbalah Centre; PCAOB’s Doty Speaks at Baruch | 05.06.11

Caleb Newquist
May 6, 2011

Is the Chinese Listing Bubble Going Bust? [CFO Journal]
Suddenly the boom in Chinese listings on U.S. exchanges is looking shaky, and two primary reasons were reinforced in separate developments today. On Wall Street, Renren, dubbed the Chinese Facebook, tanked after its shares debuted at a stratospheric multiple on Wednesday, calling into question the appetite for future Chinese IPOs. Meanwhile, at a New York City financial conference, SEC officials were nearly elbowing each other out of the way to express their concerns about reverse mergers that are allowing Chinese firms to back door their way into U.S. markets.

U.S. Economy Adds 244,000 at 9.0% [NYT]
The United States economy added 244,000 jobs in April after a gain of a revised 221,000 jobs in March, the Department of Labor said on Friday, as the unemployment rate rose to 9 percent in April from 8.8 percent in March.

The Grand Illusion: PwC Settles Satyam U.S. Class Action Claims [Forbes]
Oh boy, “The SEC and the PCAOB would not confirm that their enforcement actions regarding the Satyam audit were finished.”

BDO USA Settles Bankest Suit With Former Client Banco Espirito Santo [Bloomberg]
BDO’s statement emailed to Bloomberg: “BDO USA LLP has entered into confidential settlement agreements with Banco Espirito Santo and Barry Mukamal, the bankruptcy trustee of E.S. Bankest LC, pursuant to which the lawsuits against BDO have been resolved,” sounds a lot like what we published yesterday.

The Kabbalah Centre in Los Angeles is the focus of an IRS investigation into tax evasion [LAT]
Sources familiar with the investigation said the criminal division of the IRS is looking into whether nonprofit funds were used for the personal enrichment of the Berg family, which has controlled the Kabbalah Centre for more than four decades, a period in which it expanded from one school of a little-known strain of Judaism to a global brand with A-list followers like Ashton Kutcher and Gwyneth Paltrow and assets that may top $260 million.

New PCAOB Chairman Pushes for Audit Overhaul [AT]
“I do not believe that the global audit firm networks themselves pose a systemic risk to our economy,” said Doty. “Initiatives to shrink the global audit firms would likely weaken their ability to audit large, multinational companies that may be systemically important.” He said governments should instead focus on regulation. “To protect investors, governments should regulate such firms, not cripple them,” said Doty. “There’s no reason to think that if there were more major firms, they would be more likely to stand up to their clients.”

U.S. auditor watchdog hopeful of access to China [Reuters]
U.S. audit watchdogs are hopeful of ending a stalemate that has blocked inspections of auditors in China, the head of the audit oversight agency said on Thursday. With more Chinese companies raising capital in the U.S. markets, “I believe Chinese authorities understand they have a real interest in solving our impasse,” James Doty, chairman of the Public Company Accounting Oversight Board said.

What’s Do We Make of BDO’s ‘Secret Settlement’ in the E.S. Bankest Dispute?

Caleb Newquist
May 6, 2011

BDO is trying to put the E.S. Bankest/Banco Espirito mess behind it by submitting a “confidential agreement” to settle its litigation with the bankruptcy estate of E.S. Bankest, according to the South Florida Business Journal.

It sounds as though this could be put to rest as the bankruptcy trustee Barry Mukamal is quoted as saying, “I’m satisfied that this settlement is in the best interests of the estate,” although the creditors have to give the stamp approval as well. What’s not immediately clear from the article is to what extent Banco Espirito is involved in this settlement, the only mention being “”Lisbon-based Banco Espírito Santo and the estate of E.S. Bankest sued BDO Seidman regarding more than $140 million lost to a financial scheme run by former officers of E.S. Bankest.” I shot an email over to Steven Thomas who has represented Banco Espirito to sort this out and his spokesperson replied with the following statement, “BDO USA, LLP has entered into confidential settlement agreements with Banco Espirito Santo and Barry Mukamal, the bankruptcy trustee of E.S. Bankest, L.C., pursuant to which the lawsuits against BDO have been resolved.”

So when I asked if the re-trial was still on, I was simply referred back to the statement which kindasorta makes it sound as though this whole thing is over. But it still isn’t clear to me. Can anyone make sense of this? In the meantime, if I get to the bottom of this riddle, I’ll post an update.

BDO Seidman files secret settlement in malpractice case [SFBJ]

News

Area Accountant Breaks Up with Donut

GoingConcern
May 5, 2011

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

Dear Donut,

Our relationship goes back a long way. I feel like you’ve become a big part of me. You used to be such a treat, but now, I fear you’ve become a bad habit. Three-thirty in the afternoon rolls around and suddenly you’re there, demanding my attention. It wasn’t supposed to be this way.

I don’t know how to say this without hurting your feelings, but let’s face it. You lied to me. You were supposed to be a snack, a burst of energy, a friend to carry me through until dinner. But that’s not what happened. Sure, the anticipation of meeting you was exquisite. Your softness against my lips. Your sweet taste . . .

But I digress. The sad thing was that after all that foreplay, you didn’t hold up your end of the bargain. After you were gone, I felt tired, not energized. In fact, worse than if I hadn’t had you at all. I put up with it for a while, but it has gone too far. This relationship has to end.

I’m sorry if I’ve never mentioned this before. I know you mean well. I appreciate the kind thought, but no, I really don’t think there’s anything you can do. No, another layer of frosting isn’t going to make a difference. Really. Yes, a fruit filling might make you more romantic, but that just doesn’t deal with the issue. We just weren’t made for each other.

Well, I wasn’t going to mention this to you, but yes, there is someone else. She’s from a different country. No, not Danish! She goes down smooth and gives me lasting energy. No, this isn’t about liking salty more than sweet. Besides, she’s a lot less salty now, more earthy, I’d say. She’s a vegetable juice.

No need to get personal! Vegetables may not be sexy, but they’re smart, and I have come to appreciate how much I like that. You know, I thought you would be a difficult habit to give up, but it turned out that you were easy to replace with something smart. Look, let’s not part as enemies. You’re sweet. You’re fun, particularly when you’re fresh. And we have known each other a long time. Can’t we just be friends?

Bill

News

If You’ve Got a Better Solution to Rhode Island’s Budget Crisis, Governor Lincoln Chafee Is All Ears

Caleb Newquist
May 5, 2011

Over at Tax.com, David Brunori calls Rhode Island Governor Lincoln Chafee’s latest state sales tax proposal “awful.” You see, Governor Chafee wants to levy a tax on goods and services sold by Ocean State businesses. Examples of previous tax-exempt services include “data processing, landscaping, taxi fares, garbage collection, auto repairs and tickets to theaters and sporting events,” while it would also tax goods such as “agricultural products, boats, clothing, manufacturing machinery.”

Brunori writes that this idea is horrendous because it not only, “violates every notion of sound sales tax policy,” but because the Rhode Island rubes won’t even realize that the tax is ultimately being passed on to them:

In general, businesses should not pay sales tax on their purchases. When they do, the tax is passed on to consumers in the form of higher prices. The tax is often included in the final purchase price and taxed again. The funny thing is that citizens do not know they are being secretly taxed. Everyone knows this.

So wait…do the citizens know they are being taxed or does “everyone” simply mean tax policy wonks? Putting our confusion aside for a second, Governor Chafee has defied the haters like Brunori and Rhode Island businesses, standing by his proposal. But if you’ve got a better idea, he’s more than happy to hear your out:

Chafee said it’s up to his critics to suggest a better option. “Crisis calls for leadership,” Chafee, an independent, said at an impromptu press conference called after the rally. “If you don’t like my proposal, what’s the alternative? No politician likes to raise taxes. … We’re waiting for a better idea.”

Terrible Tax Idea of the Week [Tax.com]
Chafee firm as business groups protest tax plan [Tto10]

Tax
Video

Are Arguments Against Higher Taxes More Convincing When Made By a Hottie?

Caleb Newquist
May 5, 2011

Obviously if you’re already against higher taxes, this is of little concern. If you’re more of a David Cay Johnston type, the Center for Freedom and Prosperity’s casting for its videos may be aimed directly at you.

If one example doesn’t convince you, I suggest you check out the other 12 videos on CFP’s YouTube page.

[via ATR]

News

Underpants Gnome Accounting of the Day: NuVasive Inc.

Caleb Newquist
May 5, 2011

Today in accounting-sleight-of-hand news, medical device maker NuVasive Inc. announced that its first quarter profits doubled thanks largely to an accounting policy change:

The company said its profit more than doubled to $2.4 million, or 6 cents per share, from $1.1 million, or 3 cents per share. Excluding one-time items like non-cash stock-based compensation expenses, amortization costs, and intellectual property litigation charges, NuVasive said it earned 24 cents per share. The accounting change added 2 cents per share to both measures of profit. Revenue increased 14 percent, to $124.5 million from $109.1 million.

What exactly was this accounting rule switcheroo? A change in the way it “accounts for the value of loaned instruments” that will be paying off in spades for the rest of this year and into the future!

NuVasive said it changed the way it accounts for the value of loaned instrument sets that went into service before Jan. 1. The change is expected to add 8 cents per share to its annual profit. It also said lower tax rates will add 4 cents per share to its annual profit, and greater-than-expected revenue will contribute a penny per share.

The company said it now expects an adjusted profit of $1.20 to $1.23 per share in 2011, with $530 million to $540 million in revenue. Previously NuVasive called for a profit of $1.07 to $1.10 per share and $525 million to $535 million in revenue.

Accounting change lifts NuVasive 1Q profit [AP]
Earlier:
Underpants Gnome Accounting of the Day: CapitaLand Ltd.

Technology

Getting Hacked Happens to the Best of Us?

Adrienne Gonzalez
May 5, 2011

Recently, I’ve been getting suspicious emails purporting to be from a high-up in my company. I have faith in this person and therefore would assume if (s)he wanted to push hot webcam videos on me, (s)he’d have the decency to text me with the hott linkks instead of using poor grammar in work emails. My suspicions were confirmed when I saw the same emails coming from – gasp! – my own email address. Now I knew it had to be a scam; surely I wouldn’t have to tell myself about some hot new webcam girrllss I’d discovered on an .ru domain, I’d have that shit deliciously bookmarked on my own machine.

Being incredibly careful with my logins, I knew I couldn’t have slipped up and gotten phished. Had I been hacked?

Whenever someone says “I got hacked!” I have to admit I always feel a bit of “blame the victim” is in order. After all, I find it a bit hard to swallow that some hardcore hackers in Russia are all that concerned with your personal Facebook page. To say “I’ve been hacked” implies that some outside source did some work to break through your rock solid security and gain entry, and makes no implication that the user themselves likely opened the door and let the “hacker” in, if unwittingly. More often than not, “I got hacked” means “I unknowingly gave up my password in a phishing scheme” or “I screwed up and clicked an unbelievable posting on Facebook that stole my login info because I never read the permissions I give third party apps.”

It’s been done a million times but for your sake, here are a few tips for staying safe out there in the big scary Internets.

Make sure your contact info is up to date. If an unscrupulous individual ever gains access to your Facebook account, you may be forced to lock it down, in which case you’ll need access to the email address you use to sign in to receive communications from Facebook to get your account back. Make sure you’re using an email you have access to, even if it’s one you don’t use often.

Diversify your passwords. It goes without saying that a good password is one that isn’t found in the dictionary but isn’t so difficult you have to keep it written on a sticky at your desk. Dennis Howlett recommends a LastPass account (via AccountingWEB UK) for harder to remember passwords if you must. Substitute numbers for letters (like “1” instead of “I” or “3” instead of “E”) and throw in some punctuation just to be safe.

If you aren’t sure, don’t click it. Spammers have gotten pretty smart since the days of the “ILOVEYOU” virus (which happens to turn 11 this week) and even the most technologically-adept can fall for their tricks. If you aren’t expecting an attachment, don’t open it. Common attachment scams include spoofed emails from UPS or USPS claiming to contain your tracking number or a package exception – while UPS may send you emails, they’d never send you a zip file (tracking numbers are always included in the body of any UPS communications sent on merchants’ behalf). Be wary!

And if you have been hacked, phished or otherwise compromised, delete any offending posts from your hijacked social media pages and issue an apology. You don’t have to beg for forgiveness, just let everyone know you got compromised and are sorry, it won’t happen again.

In my case, I just got spoofed, which isn’t really my fault at all. That’s where a nice email from the tech support department to the rest of the team comes in handy.

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