Going Concern

Choosing Between a Big 4 and Mid-tier Firm Part XXIII

Caleb Newquist
March 23, 2011

Welcome to the upset-special edition of Accounting Career Emergencies. In today’s edition, a future public accounting foot soldier has to make a decision between a Big 4 firm and “GT/BDO type firm” but is stumped on what to do and can’t find a two-sided coin anywhere. The next best solution was, obviously, emailing us.

Want to know if you’re in a dead-end job? Trying to deal with stress in the waning days of busy season? Anxious about changes in your job? Email us at advice@goingconcern.com and we’ll help you pull through.

Back to the indecider:

Hi Going Concern,

I have an offer from a Big 4 and a GT/BDO type firm and am having a tough time deciding. I wanted to ask which option will be better in the long-run if I want to start in public accounting, but then might want to move to a large publicly traded tech company? I guess my question is which route would give me better exit opportunities and long-term benefits should I decide not to stay in public accounting? (If I leave, I have a good idea of where I’d like to work on the corporate side.)

1. Mid-Tier Firm experience — having taken lead on small projects by my second year, more interaction with clients etc. Having experience with mid-sized (not public) tech companies, and experience with large, public companies that are not tech companies.

2. Big 4 — staying a little more than 2 years (enough to move up to Sr. Associate level but not staying too long beyond that) – and having worked on large, public tech companies. Having the Big 4 brand name on my résumé.

Also, there’s a chance that I might enjoy staying at the Mid-Tier in the long-term, but without being sure, I want to keep my options as open as possible.

Thanks. Any advice is appreciated.

Stuck in Indecision

Dear Stuck in Indecision,

I’m impressed that you’ve managed to cover all the angles here. You could possibly like each scenario without considering what it is actually want with your career other than “might want to move to a large publicly traded tech company” or “might enjoy staying at the Mid-Tier in the long-term.” You’re basically saying that you’re up for anything – hence, ” I want to keep my options as open as possible.” Your options are open all right since you’ve committed to exactly nothing. However I’m here to help, so here goes.

To keep it brief: all things being equal, go with the Big 4 firm. Here are some details – it’s likely that you will have the opportunity to work on smaller clients at a Big 4 firm, thus giving you the chance to “take the lead.” If you also have experience working for larger, publicly-traded companies (not as likely at a mid-tier), your experience will be more vast and allow you decide what it is you actually want to do (because, at this point in time, you don’t seem to have a clue). GT, BDO, McGladrey et al. are fine firms but you have a Big 4 offer – take it. You didn’t mention the people (a big selling point at most firms) so I’ll assume you’re indifferent or that they were all equal on this front. The network you build in a Big 4 firm will benefit you the long run and the experience will as well. Just don’t expect your firm to do well in “cool” contests. Good luck.

Reznick Group’s Upset of PwC in GCMMCAF Was a Team Effort

Caleb Newquist
March 23, 2011

In collegiate tournament basketball, a #16 seed upsetting a #1 is virtually unheard of. The only time it has ever happened was the Harvard Womens squad upsetting Stanford in 1998. It has never happened in the mens tournament. But in the Going Concern March Madness: Coolest Accounting Firm bracket, superior athletes, coaching and luck do not matter. Like most things in accounting, it comes down to numbers.

Late yesterday, PwC’s lead over Reznick Group completely vanished. I speculated to my parter-in-crime that based on the sheer volume coming out of the Virginia/Maryland region that it had to be some sort of a concerted effort on the part of Reznick Group. Turns out I was right; more right than I could possibly know.

This email went out to all Reznick Group offices. Yes. All.

And here’s the victory lap/dancing on PwC’s grave:

We knew America would land with Reznick Group accountants being the coolest bean counters around. With the underground movement of getting clients, family and friends to help vote along with a huge push from our India employees motivating a billion voters, hard to stop the Reznick Group momentum.

Bring on the next contender!

So for the firms left – this is what you’re up against. I’m not suggesting that you should undertake similar efforts but that’s because I have to remain neutral in this regard.

It should be noted that based on the numbers accumulated by Vizu, it appears very few Reznick people bothered voting on any of the other match-ups. This isn’t exactly the kind of participation we had in mind but since most of RG is probably new to the site, we’ll let it slide. The question now is whether this amounts to a “Reznick win” or a “PwC loss.” Please discuss. We’ll updated you with the match-ups for the second round later today and the voting rolling tomorrow.

The JDA

Five Questions With Feed the Pig’s Benjamin Bankes

Adrienne Gonzalez
March 23, 2011

It’s been quite some time since we brought you Five Questions as we’ve already asked just about everyone worth asking to participate. But we’ve got a serious bacon fetish and a penchant for saving our pennies, so when we got the chance to interrogate Feed the Pig’s Benjamin Bankes, we couldn’t pass up the opportunity.

In case you aren’t familiar with his work, BB is th��f the AICPA’s Feed the Pig campaign, inspiring saving across the country through PSAs, tweets and other similar awareness campaigns. His people got in touch with us and sent his official bio thusly:

Although he comes from a long line of investment piggy bankers, Benjamin once toyed with the idea of playing professional football (he wanted to be the ball in a Super Bowl game). Once he realized he would have no life with that career, the idea quickly boared him. Then, he discovered the alarming state of personal finances in this country and Benjamin realized his true life’s mission.

Bankes attended Sowthwestern University, where this little piggy went to marketing classes. Though he has never been known as a party animal, he does enjoy the occasional mudslide. In addition to his sharp business sense, Benjamin is also a very talented fiction writer who goes under the pig-pen name of H.W. Hogfellow. Other interests include: long trots on the beach, watching television (his favorite show is Squeel of Fortune), viewing movies (favorite movie is Martin Boarsese’s epic, The Hogfather), and listening to music (favorite song is “Pigs Don’t Lie” by Shoatkira). Benjamin currently resides in the minds of 25 – 34 year-olds everywhere who need proper financial guidance.

Feed the Pig’s hard work is definitely working. According to a survey conducted by The Advertising Council:

Respondents who recalled seeing or hearing the Feed the Pig PSAs were more likely to claim they always take certain actions to save money, such as:
o Keeping a budget of their expenses (33% vs. 19%)
o Saving for long-term financial goals such as education, a house or retirement (30 vs. 18%)
o Bringing a bagged lunch to work and/or eat leftover meals (29% vs. 21%)
o Comparison shopping for the purchase of most items (49% vs. 23%)
o Increasing savings when they receive a salary increase (27% vs. 16%)

Respondents who recalled seeing or hearing the Feed the Pig PSAs were more likely than those who had not to report that in the past six months, they have taken action to learn more about managing their finances. Reported activities include:
o Discussing ways to save money with friends and family (84% vs. 67%)
o Visiting a website to get more information about how to save money (62% vs. 34%)
o Calling a toll-free number to get more information (32% vs. 4%)

Side note: this interviewer slipped an extra $20 in her piggy bank after writing this piece.

We’d like to say we sat down with Benjamin but good bacon would have gotten hurt in the process, so instead we caught up with him via email and asked all the sizzling questions we could come up with.

AG: Does it hurt having that slot in your head?

BB: Only when it’s empty.

AG: When we think of financial literacy we think of you but what are some other resources for those interested in learning how and why to save?

BB: Of course I recommend my website, www.feedthepig.org as well as another financial literacy website from AICPA, www.360financialliteracy.org. In addition the state CPA societies have wonderful financial literacy sites and offer programs in their communities. Here’s a sampling:

Texas Society of CPAs: http://www.valueyourmoney.org/
California Society of CPAs: http://www.calcpa.org/Content/Financial_Literacy.aspx
Virginia Society of CPAs: http://www.vscpa.com/Content/financial_fitness/default.aspx

AG: Do you read any accounting blogs and if so, which do you like?

BB: Do I sense a leading question? You’ve got to get up pretty early in the morning to pull one over on Benjamin Bankes.

AG: Fine, we won’t send you a FREE I heart Jr Deputy Accountant bumper sticker then. Moving on, even though financial literacy is important, we all deserve a splurge every now and then, especially if we are being diligent about saving our money. How do you splurge?

BB: I put ice cubes in my tap water.

AG: Sounds like you missed your calling, you would make a great CPA. Lastly, are you going to be visiting Capitol Hill any time soon? Seems like America as a whole has really embraced your message but Washington could really use your help. You can stay at my house to save a few bucks on a hotel room.

BB: I don’t have any trips planned right now, high gas prices and all, but follow me on Twitter (@feedthepig) and I’ll let you know when I’m there.

Accounting News Roundup: Accounting Outsourcing Set to Grow; More on CPA Scores; Man Charged with Wife’s Murder After IRS Visit | 03.23.11

Caleb Newquist
March 23, 2011

Finance and Accounting Outsourcing to Grow 15-20% [AT]
The finance and accounting outsourcing market is expected to grow 15 to 20 percent this year and top $4 billion in annual contract value. A new report by the Everest Group found that annual contract value for multi-process finance and accounting outsourcing grew almost 15 percent last year and 10 percent in 2009. The total contract values of new engagements reached a market high last year of nearly $5 billion, according to the study by the research and advisory firm.

Fair Value, Comprehensive Income Rules Due Q2 [Compliance Week]
The Financial Accounting Standards Board will soon issue final standards on fair value measurement and the statement of comprehensive income, with delivery expected early in the second quarter, said Chairman Leslie Seidman. The fair value measurement standard produces more significant change for International Financial Reporting Standards than for U.S. Generally Accepted Accounting Principles, said Seidman. The United States made a significant overhaul in fair value measurement when it issued Financial Accounting Statement No. 157 Fair Value Measurement in 2006. The new standard will not require any new uses of fair value but it produces some clarity and consistency in how it is measured across U.S. and international rules.

Judge Rakoff Indicts No-Fault Securities Settlement Syndrome [Forbes]
He doesn’t much care for the SEC allowing violators to pay a fine and simply “neither admit or deny the charges.”

Thank God, CPA Exam Scores are Finally on Their Way [JDA]
Some interesting Google searches led to Adrienne’s website.

Howard Stern’s Agent Sues Sirius XM Radio Over Stock [WSJ]
In a lawsuit filed in New York State Supreme Court, Mr. Stern’s production company, One Twelve Inc., and his agent Don Buchwald, alleged that Mr. Stern enabled Sirius to surpass its internal subscriber targets by more than 2 million subscribers every year since he went on air since 2006.

Man charged with killing wife after IRS visit [Boston Herald]
A man was charged with murdering his wife in Webster, an attack that apparently happened less than an hour after two Internal Revenue Service agents arrived to seize the family’s vehicle for nonpayment of taxes, authorities said.

CPA Exam

AICPA Has Released FAR Scores to NASBA for the Jan/Feb Testing Window

Caleb Newquist
March 23, 2011

Rejoice! Despair! Whatever.

According to the NASBA Twitter feed, they’ll have scores for 32 states up with a few others taking 24-48 hours to appear.

Earlier:
The AICPA’s Note to Pissed Off CPA Exam Candidates on Scoring

In Order to Avoid Sales Tax on Food in Wyoming It’s Best to Refuse Napkins, Resist the Urge to Heat Pastries

Caleb Newquist
March 23, 2011

Today over the Tax Foundation’s Tax Policy Blog, we get a little taste of how fun defining something like “food” can be. Now, if you’re like some people we know, there is lots of stuff at the grocery that definitely should not be consumed by human beings but in order to avoid raucous debate, it gets the food label. Wyoming is one of the 37 states that partially or wholly exempt groceries from sales tax but just because something is a grocery store, that doesn’t necessarily mean it won’t be taxed. Sigh.

Under Wyoming’s new law, food is defined as “substances whether in liquid, concentrated, solid, frozen, dried, or dehydrated form that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.” This does not include booze, tobacco or “prepared foods.” And yes, exactly what items are included in “prepared foods” is where things get a little confusing.

What is a prepared food? Here’s how the new law defines it:

• Food sold in a heated state or heated by the seller; or

• Two or more food ingredients mixed or combined by the seller for sale as a single item; or

• Food sold with eating utensils provided by the seller including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A container or package used to transport the food is not an eating utensil.

”Prepared food” does not include:

• Food that is only cut, repackaged, or pasteurized by the seller;

• Eggs, fish, meat, poultry, or foods containing raw animal foods and which are required or recommended to be cooked by the consumer to prevent food-borne illness;

• Food sold by a seller whose proper primary North American Industry Classification System (NAICS) classification is manufacturing in sector 311, except subsector 3118 dealing with bakeries; [Ed. note: This is my personal favorite]

• Food sold in an unheated state by weight or volume as a single item; or

• Bakery items including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danishes, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas, and other bakery goods unless the item is sold as prepared food.

This isn’t nearly as confusing at Washington state’s attempt to define candy (Kit-Kat doesn’t qualify) but it’s about as windy as…well, Wyoming.

Wyoming Redefines Food: Don’t Overprepare Your Danishes [Tax Foundation]

Audit
PCAOB

Who’s Ready for Changes to the Auditor’s Report?

Caleb Newquist
March 22, 2011

“We heard from investors that they want more information in the auditor’s report. Investor dissatisfaction with the current auditor’s reporting model should concern other constituents as well, including preparers, auditors and regulators,” said PCAOB Chairman James R. Doty. “Today’s report from our own staff, based on their discussions with a broad audience, will be vital to the Board’s effort to develop a meaningful proposal for change in a concept release. Our intention is to expose such a release as early as this summer.” [PCAOB]

News

Lindsay Lohan Probably Costing California Taxpayers Millions Albeit Less Than Real Fiscal Problems

Caleb Newquist
March 22, 2011

You may have heard that California is having some budget issues. Sure there’s this Wisconsin business and all that but seriously folks, Californ-I-A is really in the fiscal shithouse. There are a number of reasons for this, most of which we won’t get into here but it should be noted that ill-behaved celebrities haven’t been receiving their fair share of blame in the press.

Luckily we have the real America’s news network going to great lengths to inform us about Lindsay Lohan’s role in fiscal catastrophe:

Factoring in all the court dates, court postponements (like when she was partying in Cannes and couldn’t get back to the U.S for a hearing), arraignments, judge and prosecutor fees, jail visits (she has had three stints in the slammer – 84 minutes, two weeks and one evening before posting bail, mug shots (four and counting), probation officers, random drug testing resources, SCRAM bracelets (these generally cost over $100 to install and have a daily fee of about $18) and LAPD security to and from court, how much is Lohan costing the taxpayer?

“It has been four years, and we’re talking about quite a few county law enforcement professionals, so it is probably safe to say several million dollars,” California-based civil law trial attorney David Wohl told FOX411’s Pop Tarts.

And given that Lohan has thus far refused to enter into a plea deal regarding the theft incident, her current theft case could potentially go to trial, costing Californians much more.

MILLIONS! It’s been a while since your humble editor had to make any materiality calculations but taking a quick look around, California’s budget deficit is currently in the nabe of $25 billion. So apparently if LiLo was shipped off to the Dakotas, Wyoming, or some other state that was in a less dire financial situation, things in Cali would be plumb-dandy? Strange thing however, there doesn’t appear to be an “elimination of celebrities that are a burden on society” on the L.A. Times’s budget balancer.

Perhaps Fox is onto something here? Jerry Brown would probably appreciate the other help. Pro bono of course.

Experts: Court-Prone Lindsay Lohan Costing Taxpayers Millions [Fox News via Jezebel]

Big 4

Going Concern March Madness Upset Alert: 3 of the Big 4 Under Pressure

Caleb Newquist
March 22, 2011

We’ve got lots of Cinderellas in our midst friends. With 12 hours of voting to go in the first-ever Going Concern March Madness: Coolest Accounting Firm (“GCMMCAF”) bracket, Ernst & Young, Deloitte and KPMG are all in danger of being upset by BKD, Rothstein Kass and Crowe Horwath respectively.

As you no doubt noticed, #1 seed PwC is cruising along in their match-up with Reznick Group but aside from that, how is it that we could have such a dancity accounting firm bracket dance? Glad you asked because the consummate GC commenter, Another exKPMGer, has a theory:

I would wager serious money the cause for this is that the people who work for the other 3 firms, for the most part, didn’t vote for their own firm because they know their jobs are bullshit and want to give no sign of submission to their firm. Whereas the folks from PwC couldn’t click on themselves fast enough to prove how awesome they are. I hear they’re installing mirrors in every cubicle with the words etched at the bottom “PwC is AWESOME” so that you can stare at yourself all day and think about the awesomeness that you’re a part of.

There doesn’t appear to be any empirical evidence to support the theory at this time but supporters and debunkers are welcome to comment at the validity of this statement. And of course if you haven’t voted, jump over to the original post and get on this.

Wife of Man Who Received Tax Refund Without Filing Tax Return Under the Impression the IRS Was Letting This One Go

Caleb Newquist
March 22, 2011

Typically if you receive a $6,000 tax refund check in the mail, it’s something you’ve been expecting.

Such was not the case for James King who had a check cut to him back in February but unfortunately it’s due to case of identity theft. Right now the IRS can’t make heads or tails of the situation and despite the mix-up/criminal activity, Mr King’s wife figured that this was opportunity:

“She was ready to spend it,” King said of his wife with a laugh. “She was ready to go cash it and spend it. She had a to-do list right from the get-go.”

Man gets income tax refund without filing a return [TBO]

CPA Exam

Conquering the CPA Exam, One Step at a Time

Adrienne Gonzalez
March 22, 2011

One of our favorite sources of CPA exam info, This Way to CPA, has put together a very helpful list of suggestions for candidates trying to conquer the CPA exam. Just a few of the tips (many of which we have shared with you here previously):

Know your strengths. Confidence is good, but so is honesty. Know where you’re good – and where you need to improve. From there, you can design a study plan that works harder for you.

Write out a plan. What are you going to study, how are you going to study, and when? Maybe it’s all in your head, but it can’t hurt to write it all out to make sure you stick to the plan.

Use the free stuff. You can spend a lot of money getting ready for the exam. Which is perfectly fine. But don’t overlook the totally free tutorials, sample exams and other tools provided by the AICPA. After all, we make the test.

Our favorite was “get a lucky charm or something,” which shows us that the AICPA is not above superstition. That probably should be taken as an admission that the exam is part crapshoot, part dedication but we’ll save postulating on that for another day.

For where to find the “free stuff,” check out our previous comments on the topic and get to clicking.

Head to This Way to CPA for the rest of the tips but remember that all candidates are not created equal. Some can do better with a study buddy or the support of like-minded individuals while others prefer to isolate and be miserable (or make others miserable with their miserableness).

Some of these tips may or may not apply to your personal needs, which can only be determined by you and not any CPA Review Swamis out there or random folk on the Internet who have never stared into your bitter little 10-key-pounding heart. So my first suggestion would be to look long and hard at your own personal needs before you go looking for ways to improve your experience and succeed.

Accounting News Roundup: Tax-plagued McCaskill Will ‘Sell the damn plane’; Deloitte Sued Over China MediaExpress; KPMG Names New Head in Memphis | 03.22.11

Caleb Newquist
March 22, 2011

U.S. Warplane Crashes in Libya; Pilots Safe [WSJ]
A U.S. warplane crashed in a field in northeast Libya Tuesday, but the two crew members ejected safely, U.S. military officials. The U.S. F-15 Eagle was the first to warplane to crash since the start of military operations on Saturday, and officials said they didn’t believe the crash was caused by enemy fire.

Claire McCaskill failed to pay taxes on aircraft [Politico]
he Missouri Democrat has tried to be proactive in dealing with the matter. When contacted initially about the propriety of taxsements for the 89 flights, McCaskill voluntarily issued a check to the Treasury Department to cover the cost of the trips. Yet there remained questions about whether McCaskill and her husband had fully paid property taxes on the plane. McCaskill called a Monday press conference after POLITICO had been pressing her for several days over that issue. “I have convinced my husband to sell the damn plane,” McCaskill said. “I will never set foot on the plane again.”

Greenberg’s Starr Investments sues China MediaExpress [Reuters]
Starr Investments, a firm run by former AIG chief Maurice Greenberg, has sued China MediaExpress Holdings , saying it was fraudulently induced to invest about $13.5 million in the firm, court documents show. Starr has also sued China MediaExpress auditor Deloitte Touche Tohmatsu. The investment firm said the auditor had resigned as “it was no longer able to rely on the representations of the management.”

Charlie Sheen, out of work, faces tax issues [AW]
Taxes never kept anyone from winning! DUH.

Regulating Audit Firms: News and a Short Wishlist [Fraudbytes]
Dr. Mark Zimbleman has some ideas on how to take the heat off auditors including an idea on the litigation front, “if auditors were simply penalized for missing a fraud and no litigation process took place, they would be more vigilant. In other words, audit penalties would not be based on whether or not you could show you followed the required process, but whether or not you had the right outcome.”

Will Auditors Be Held Accountable? The PCAOB Has A Plan [Re:The Auditors]
Francine McKenna goes through last week’s recommendations from the IAG.

Barnes named to lead KPMG in Memphis [MBJ]
Greg Barnes takes the big chair from Matt Lusco.

Barry Bonds Steroids Perjury Trial to Open Before Jury of 8 Women, 4 Men [Bloomberg]
Barry Bonds’s perjury trial, to be heard by an eight-woman, four-man jury that includes a data center engineer at Amazon.com Inc. (AMZN), two nurses and a business college student, is scheduled for opening statements today. Bonds, 46, who holds Major League Baseball records for career and single-season home runs, faces four counts of perjury and one count of obstruction of justice for telling a 2003 grand jury he didn’t knowingly take performance-enhancing drugs. The trial in federal court in San Francisco is expected to last as long as four weeks.

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