Going Concern

News

Grover Norquist Advises Obama on How to Win Texas in 2012, Reaffirms Ability to Get Sassy

Caleb Newquist
May 12, 2011

As we’ve noted before, you’d be wrong if you thought Ronald Reagan worshipper and ATR President Grover Norquist and his merry band of anti-tax orcs weren’t capable of a pinch of sass:

Obama should focus on winning the electoral votes of Texas. He could highlight his ongoing efforts to destroy the oil and gas industry through taxation and regulation. Also his hostility to the Second Amendment. And spending binges and tax hikes. The small-minded will not see the opportunity for Obama in Texas, but with enough money spent in the state and not frittered away in Virginia and Florida good things can happen for America.

Or a punch of sass.

[via Politico via ATR]

Conoco Execs Don’t Appreciate These ‘Discriminatory’ Tax Plans

Caleb Newquist
May 12, 2011

ConocoPhillips CFO Jeff Sheets is warning the U.S. Senate that repealing tax credits for oil companies will make it more difficult for his company and their U.S. counterparts to compete internationally and “higher taxes will mean that oil companies will have less money to reinvest, which could lead to a decline in the supply of hydrocarbons.”

Conoco’s CEO Jim Mulva, who will be testifying before the Senate Finance Committee tomorrow, agreed saying, that these plans are “discriminatory” and “If there is less investment, there is going to be less production and less production means higher prices for consumers.” So, Max Bauchus et al., go right ahead with your plan if you can sleep at night knowing that you’re nothing but a bunch of prejudiced jerks that want to hurt the American people. [WSJ, Reuters]

How Does an Overachiever Stand Out From Other Overachievers During Big 4 Recruiting Season?

Daniel Braddock
May 11, 2011

Ed. note: Got a question for Dan Braddock or anyone else on the GC advice team? Email us at advice@goingconcern.com and we’ll get to your query in due time.

Dear Going Concern,

I am currently a sophomore in college and am interested in a Big 4 internship (Chicago) for the summer of 2012. This means that I will be
involved in the heavy recruiting season this coming fall. I have a 4.0 GPA, am on my way to becoming Executive VP of Beta Alpha Psi, am a member of the Accounting Club, and have done some volunteer work. Any tips on how to stand out from the sea of other students just like me? Should I do anything else before recruiting season besides networking? Any advice would be appreciatedver

Big 4 Lover,

Glad to see that GC has some young people in the audience. Take what you read here with a grain of salt and shot of tequila – adulthood makes people cranky, not just public accounting.

Be cognizant of the fact that there are two versions of you that every recruiter sees: the version of you on paper and the version of you in real life. Either version can make or break your candidacy. Let’s break it down:

You on paper: At first read, the “résumé” you describe seems just fine – you’re maintaining strong grades while being involved in extracurricular activities outside of the classroom, even holding a leadership position. I wonder if your “volunteer experience” was only due to the Beta Alpha Psi volunteer requirement or if you do it on your own; either way, this is minor and I’m nitpicking for the sake of nitpicking. Any Big 4 recruiter will have your résumé sitting in their “yes” pile going into the fall recruiting season.

However, your résumé is strong on the “I am just trying to land an internship at a Big 4 firm.” What are your interests outside the realm of debits and credits? Unless you are a living, breathing calculator, I’d like to think that you have hobbies other than what is described above (this is assuming you did not leave any experiences out when describing your background above). I encourage you to diversify your experiences in college – not just for the sake of your résumé but for the sanity as well. VP of the Wiffle Ball Club? Great. Part of the campus sewing circle? Fantastic. Genuine, non-accounting extracurriculars will not only enrich your life but they’ll be great conversation starters when you begin meeting with recruiters and Big 4 professionals on campus.

You in real life: As you mentioned, you’ll be in the thick of the recruiting process this fall. Being that you’re only a sophomore (and probably on the 5 year track due to Illinois requiring 150 credits for the CPA), you’ll be interviewing for the “leadership” programs at the Big 4. These lead to internships which lead to job offers which lead to high-fives and back slaps for everyone. Here’s what you need to do when you meet the firms:

Do not regurgitate your resume – let your strong résumé speak for itself. No one likes a bragger, not even your mother.

Do not be too transparent – 99.99997% of Beta Alpha Psi members join the society because it looks good on a résumé. DO NOT TELL THE RECRUITER THAT. Unless you want to come across as an internship-chasing fool, then by all means go ahead and say so.

Do not suck up – There is a subtle difference between saying, “I’m only a sophomore, but I have heard positive things about your firm from my professors and older classmates and I’m hoping to learn more,” and “OMFG your company is so cool!!!”

Be yourself – you are more than accounting. The best people you’ll ever work with in the industry will also be much, much more than debits and credits.

News

Sitting At Your Desk Is Killing You

Adrienne Gonzalez
May 11, 2011

Did you need more proof that your job sucks? How about this infographic:

According to the graphic, we now sit 9.3 hours a day, far more than the 7.7 hours we spend sleeping. Our hunter/gatherer bodies just weren’t built for this lifestyle.

Sitting for more than 6 hours a day makes you 40% more likely to die within 15 years versus someone who sits for fewer than 3 hours a day. Exercise does not offset this increased risk of premature death.

Those who sit in front of the TV for 3 hours or more a day are 64% more likely to die of heart disease.

So what can you do besides quitting your job to roam the fields for buffalo day in and day out? Try some of these busy season exercise tips from AccountingWEB for starters. My favorite is working at my desk while sitting on an exercise ball; it helps correct my posture and offers a core workout while I’m humming away at my laptop.

Enjoy!

Infographic courtesy Medical Billing and Coding

Is Everyone Aware That There Is a Chicken Sh*t Tax Credit?

Caleb Newquist
May 11, 2011

Tax wonk Len Burman wrote a letter-cum-blog post to Jon Stewart today over at TaxVox explaining how there really is spending in the tax code through tax credits. You see, Stewart gave President Obama a hard time last month about “reducing spending in the tax code” which JS wrongly interpreted as Newspeak. Burman then goes on to give an ~~shitty~~ perfect example of just how ridiculous tax credits have gotten (in case you weren’t aware already):

You don’t believe there’s spending in the tax code??? Here’s a real life example: the chicken-s**t tax credit. Really, section 45 of the Internal Revenue Code. You can look it up. The late Senator Roth of Delaware (home of lots of chickens and “poultry manure,” as it’s euphemistically called) put this little goody into our tax laws. Here’s the backstory: the EPA said that enormous chicken farms could no longer put their poultry waste in pools or bury it because it poisoned the ground water. One of the best options to meet the new requirement was to dry the vile effluent and burn it to make electricity, but that was still costly. Roth didn’t want chicken farmer profits to plummet or chicken and egg prices to rise just because farmers couldn’t use the earth as a giant toilet, so he pushed through the chicken s**t tax credit to create a profitable market for that (as well as all sorts of other crap).

Burman not only explains to Stewart that using tax credits to keep chicken feces out of the water isn’t a good thing but by mocking the President, he also may have inadvertently helped tax executioner Grover Norquist:

Arch-conservative Oklahoma Senator Tom Coburn, leader of the bipartisan “gang of six,” has said that he’d support tax increases so long as they didn’t include rate increases. That is, he wants to rein in subsidy programs run by the IRS.

This is important. Coburn was willing to take on Grover Norquist, who has very effectively prevented any sensible compromise on the budget by insisting that cutting tax subsidies would violate the taxpayer protection pledge that he strong-armed most Republicans to sign. Now Grover can use your laugh line to reinforce Republican intransigence and doom any chance of bipartisan cooperation.

And to indirectly (or perhaps directly) support taxpayer funding of chicken-shitless water.

Jon Stewart’s Fake News on Tax Expenditures [TaxVox]

Deloitte

Jim Quigley Reflecting on His Time as Deloitte CEO via Twitter

Caleb Newquist
May 11, 2011

Davos regular and out-going Deloitte Global CEO Jim Quigley is reflecting on his time in the big chair on Twitter and so far he’s said that “Experience has taught me in a world that seems increasingly focused on sprints, great professional relationships are the work of marathoners,” and “I’ve learned we often allow the urgent to crowd out the important; getting in front is the way we will stay in front.” These are nice thoughts and we’re big on reflection but what do you think Jimbo is really thinking that the Deloitte Twitter filters aren’t letting through?

Luckily, we’ve obtained JQ’s copious Tweet notes, all of which were ultimately denied by Deloitte’s Ministry of Propoganda. Here are some of the denied tweets:

• Really kicking myself after turning down Queen Rania’s offer to buy me a drink at Davos last year. #IDIOT

• Disappointed that I only get 5 months to Tweet under @deloitteceo. Not sure what my new handle will be. Is @deloittekicksass taken?

• @JustinBieber how do you get ready for a big show?

• I’m just going to say it: Sharon Allen has awful taste in music.

• Good luck Barry! I guess I don’t have to warn you that this job will make you lose your hair.

Of course, many of you know Jim better than us, so feel free to speak/Tweet on his behalf below.

News

So You Want to Submit Something to Going Concern…

Adrienne Gonzalez
May 11, 2011

Since Caleb is really bogged down chasing misinformed merger rumors and babysitting his contributor(s), I thought I’d take a moment to set some ground rules for reader contributions. We get that question via e-mail a lot and, as you may notice, very rarely publish reader submissions. Let me tell you why.

First, if you expect us to publish something, how about you start by recognizing the tone of this website? We try our best not to waste our readers’ time with bullshit press releases, fluff pieces, and the usual PR crap that other accounting websites are built around. That is not what we do here and we aren’t going to start now so please, don’t bother. If you can’t take the time to acknowledge the voice of this website and respect the attention span of our readers, we aren’t going to take the time to read the crap you have sent us. If you send us an unsolicited email that looks like it could have gone out to every other accounting website out there, we know you aren’t a fan of the site and have no idea how we roll. Therefore, odds are pretty good that we will ignore your request. You’ve been warned.

Second, this ain’t no motherfucking Wiki. Meaning we are more than happy to publish reader material (still waiting for Bitter Audit Manager’s resignation letter) but beyond the comments, this is not a collaborative venture. Caleb writes, I write, you guys berate us, we adjust future content appropriately… you get the point. We invite you to contribute through criticism, suggestions and, of course, by tipping us to where the news is. And if you have a point to make and want to use this avenue to make it, you are more than welcome to do so, just make sure you come at us correctly. Which brings me to my next point…

It takes a lot of alcohol and therapy to do this day in and day out. Caleb and I try our best to bring you what you want and take our job seriously. If you have a submission, we expect that it fits with the overall attitude of this website. We have stringent quality requirements (Caleb’s rampant typos excluded, of course) related to the tone we work hard to maintain.

Self-deprecating humor earns points with us, as does bitterness, honesty, cleverness and general brilliance. We have no patience for uptight professionalism and anal-retentive seriousness, you can find plenty of that on other accounting websites.

So if you still want to submit something to us to publish, keep these things in mind. Shoot us a note and include your submission but please, save all of us the bother if you can’t respect these simple rules.

Accounting News Roundup: CEO Bullet Dodgers; Will S-Corps Get to e-File?; Don’t Sweat Those Stains | 05.11.11

Caleb Newquist
May 11, 2011

Why CEOs Avoided Getting Busted in Meltdown [Bloomberg]
“Fraud, it turns out, begets fraud.”

Old Mutual Hedge Fund Group Hires New C.F.O. [DealBook]
Old Mutual Asset Management, the hedge fund arm of the London-based life insurer, is set to name Steve Belgrad as chief financial officer on Wednesday. Mr. Belgrad, a graduate of Princeton and Harvard Business School, is leaving his post as chief financial officer of HarbourVest Global Private Equity, which he joined in 2008. Mr. Belgrad, who previously worked for the Affiliated Managers Group, the Janus Capital Group and Morgan Stanley, will begin at Old Mutual on June 1.

SEC to Form Small-Business Committee [WSJ]
The U.S. Securities and Exchange Commission is forming a small-business committee to review fundraising rules for small private firms that critics say hinder access to capital and are stunting economic growth. Testifying before the House Oversight and Government Reform Committee on Tuesday, SEC Chair Mary Schapiro said the new division will focus on “regulatory questions posed by new capital-raising strategies,” among other issues.

IRS Demands $6 Million More from Racing Champ Castroneves [AT]
The Internal Revenue Service has filed suit in U.S. Tax Court against three-time Indianapolis 500 champion Helio Castroneves after he won a high-profile victory against the IRS two years ago and paid $5 million in taxes.

The Top 400 Taxpayers: Incomes Fell 21.5%, Tax Rates Rose 8.2% in 2008 [TaxProf Blog]
Are the rich getting eaten?

IRS Asks for Input on Health Care Law [Forbes]
Guess who’s out of ideas?

AICPA Wants IRS to Let Small Businesses E-file S Corp Form [AT]

Sweat Protection Without the Stains [WSJ]

What Was Discussed on Ernst & Young’s ‘All Hands Broadcast’?

Caleb Newquist
May 11, 2011

We’ve heard from a couple people that Ernst & Young had an “all hands webcast” of some kind today but so far, no one has given us any details as to what was discussed.

Of course there were probably kind words about all your hard work this busy season, your commitment to the firm and so on and so forth but we want to get to the crux; this calls for speculation on our part, until we get something more solid. Possible topics include:

1. Hazing methods for the folks from LECG Corp.

2. The announcement of special screenings of In a JIT.

3. Two minutes’ hate for a certain Governor.

4. Mysterious references to “exciting changes” to the compensation structure that won’t be revealed until “details” are sorted out (i.e. management knows what PwC is doing).

5. Your input.

KPMG

First Marblehead Taking a Mulligan on Financial Statements

Caleb Newquist
May 10, 2011

More importantly, how are the KPMG auditors celebrating (because we want to know)?

From the 8-K, filed this morning:

On May 10, 2011, The First Marblehead Corporation (the “Corporation”) announced that its board of directors (the “Board of Directors”), in consultation with management, the audit committee of the Board of Directors (the “Audit Committee”) and KPMG LLP, the Corporation’s independent registered public accounting firm, concluded that certain unaudited financial statements previously issued by the Corporation should no longer be relied upon.

In order to correct errors in the recording of certain non-cash items, as described below, the Corporation will restate the unaudited financial statements contained in the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010 (the “Q1 Form 10-Q”) and the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2010 (the “Q2 Form 10-Q”). The Corporation expects to file the restated Q1 Form 10-Q and the restated Q2 Form 10-Q, as well as the Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2011 (the “Q3 Form 10-Q”), no later than May 16, 2011.

If you really want to get into the gory details, First Marblehead is bringing 14 securitization trusts onto the balance sheet that were previously accounted for off-balance sheet and its deferred tax assets in Q1 and Q2 are jumping over to the liability side (and the corresponding benefits are becoming expenses). The company says this is NBD as CFO Ken Klipper said, “These restatements … do not affect our cash position and are expected to have no impact on our ongoing business operations.” But the next six days may be a little uncomfortable for the accounting department and the KPMG audit team.

CFOs

USANA Health Sciences Hits the Superfecta as President, CFO, COO and EVP of Sales All Bolt

Caleb Newquist
May 10, 2011

Nothing like this to get your investors a little worked up:

USANA Health Sciences, Inc. […] today announced that Fred W. Cooper, President and Chief Operating Officer; Jeffrey A. Yates, Chief Financial Officer; and Mark H. Wilson, Executive Vice President of Sales have each stepped down from their respective offices to pursue other business endeavors. […] Continuing on the realignment of the executive team, [CEO Dave] Wentz said “I also want to offer Fred, Jeff, and Mark our sincerest appreciation for their years of service to USANA. We wish them well in their future endeavors.”

Of course it could be that these guys had a foursome at Pebble Beach they weren’t about to reschedule OR they knew there was going to be openings at Novartis. Other theories are welcome. PwC’s Salt Lake City office serves as USANA’s auditor so if you’ve got the scoop or heard something interesting, email us.

Deloitte

New Leadership Appointment Causes Unrest Inside Deloitte Advisory

Caleb Newquist
May 10, 2011

As we’ve discussed, there has been a bit of controversy around the leadership election process at Deloitte. We first reported this news to you in January with a follow-up story on the candidates, the sorry turnout that was expected, and finally the news that the three candidates had been elected to their respective positions.

Today we have more controversy from inside the house of D but this time it is from a sub-group in the Enterprise Risk Services (aka Advisory or “ERS”) practice. There have been a number of recent leadership appointments within ERS but one in particular that caused a Deloitte partner to reach out to GC. This individual belongs to the Security and Privacy Practice (“S&P”) which consists of approximately 80-90 partners and has been recognized as one of the “12 leading global information security & risk consulting service providers” by Forrester Research Leader for their expertise in this area, according to the Deloitte website.

According to our source, the issue that has caused concern amongst many partners in the S&P group is that the new leader does not have extensive experience in the Security & Privacy area. Our source explained to us that a recent theme inside the firm has been “leading from the front” best encapsulated by leaders like Theodore Roosevelt, Winston Churchill and others who lead based on setting an example. The feeling of the S&P partners is the most recent appointment is based more on cronyism rather than qualifications and past performance.

The leader of the ERS group who makes the appointments is Owen Ryan, a Deloitte veteran who has held several leadership positions at the firm and has led ERS for the past 2-3 years. Our source told us Mr. Ryan has run the advisory practice creating an environment of cronyism and nepotism by appointing individuals, including family members, closest to him and that this appointment in S&P has partners saying this is the latest example of “the emperor having no clothes.” S&P supposedly has many qualified partners who have held leadership positions in the past who could lead the group but were passed over. This has many of them worried about what will become of their reputation as a top service provider in the area and how clients will perceive this appointment.

We spoke to a former Deloitte partner who worked in the Securitization and Structured Products Group (also part of ERS) who confirmed these allegations of nepotism and cronyism. “I wouldn’t go so far to extrapolate what occurred in our group to others,” the former partner said, “but that was certainly my experience.”

Despite this, one insider who is familiar with the leadership at Deloitte described Mr. Ryan as a “results-oriented businessman” who is cognizant of how “his decisions will reflect on him.” This source further told GC that “[Mr. Ryan] would not compromise the potential success of the ERS group by appointing someone to a leadership position who wasn’t qualified.”

Mr. Ryan’s no-nonsense style has manifested itself into some interesting behavior. Our original source told us that he takes attendance at ERS partner meetings and fines individuals $20 for using their BlackBerrys or speaking to neighbors during them. Our source said the money collected goes to charity.

Mr. Ryan did not respond to our voicemail requesting an interview.

The concern in S&P is understandable; an outsider leading a niche group would rankle the feathers of the most laid back partner. However, these decisions are rarely made in a vacuum and Mr. Ryan has his own superiors to report to. The other aspect to consider is the difference between technical leadership and what one source called “visual” leadership. There are many partners capable of leading a practice based on technical merits but the vision and flexibility needed to keep a group progressive in a fast-paced market does not always accompany technical expertise. Quite simply, if the leadership appointments that are made on Mr. Ryan’s watch do not prove successful, he will certainly be held responsible, but there is a lot of concern that the reputations of many of the firm’s best service lines may suffer in the process.

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