Going Concern

News

Whoever Founded ‘National Employee Appreciation Day’ Probably Never Worked as an Accountant During Busy Season

Caleb Newquist
March 5, 2011

That’s right team, March 4th marks National Employee Appreciation Day and if you happen to have a deadline today or just got Lumberged into working the weekend, you’re definitely not feeling appreciated.

Doubly ironic is the news from the latest list from Forbes that says that “Accounting” is the 6th Happiest Job in America. That is followed up by “Finance at #7 and “Legal” at #10. On the one hand, Forbes has these professions in the correct order – accountants are generally less miserable than those in finance or law but the fact that they appear in the top ten is laughable. Of course now that we have In a JIT, perhaps the happy ranking is slightly more believable.

Employee Appreciation Day 2011 [CBS]
In Pictures: The 10 Happiest Jobs In America [Forbes]

Latest Epic Video Out of Ernst & Young Includes Lots of Bleeps, Faux-Coffee Diss, Best Lyric Ever

Caleb Newquist
March 4, 2011

It’s been increasingly obvious that Ernst & Young has the most talented video producers amongst the rank ‘n’ file Big 4 professionals. Last year we saw a video from the Las Vegas office (it was pulled) that was not the most impressive in terms of the talent presented but a Elvis impersonator made up for the rest of the group.

More recently from the Black and Yellow we’ve seen a farewell rock video and a mockumentary from across the pond (also pulled) that both demonstrate the sort of right-brained capabilities that exist within E&Y. Today, we bring you the latest in epic E&Y videos that brings voice to the frustration of being stuck in a JIT (“just-in-time”) cubicle.

So there’s a lot to digest here but I’ve got my favorite moments picked out:

1. I’m not sure who wears vests to the office these days but it’s fashion-forward and I like it.

2. Cursing right off the bat (and not letting up) score bigs points with Adrienne.

3. A Flavia diss is always apropriate.

4. Best lyric ever: I’M THE KING OF EY; ON A JET LIKE TURLEY; YOU’RE IN PUBLIC ACCOUNTING, NO YOU AIN’T LEAVIN’ EARLY

5. Kicking the roller was mean (but hilarious).

6. They should have known they were doomed when they wrote the lyric about a partner “seeing me now.”

7. Chuck Norris? Obama? Paddycake? Things really took a strange turn at the end.

The word from the tubes is that it’s been making the rounds inside and outside E&Y so we’re not exactly sure when this was made but our tipster was a little miffed about the possibility of these guys not having anything to do:

Here’s another video produced by auditors in the midst of busy season who somehow find time for this shit. This one comes courtesy of EY San Jose. Apparently it’s been making it’s rounds inside (and outside) of EY all day. HR must be thrilled at this use of company time (and property, from what it appears).

Apparently it never occurred to our tipster that this was a firm-sanctioned production since the Vegas vid went over so well. There’s only one way to find out so I left voicemails for both of these guys to try and get the behind-the-JIT story. So far I haven’t heard back from either of them but it’s still a little early out in San Jose. But whenever you can guys, email us.

Your thoughts on this latest bit of video ingenuity are welcome at this time.

CPA Exam

Why Did Prometric Get Fined $300,000 by NASBA in 2010?

Adrienne Gonzalez
March 4, 2011

David A. Costello, CPA, President & CEO and Michael R. Bryant, CPA, CFO of NASBA jointly and severally stated that NASBA’s 2010 financial statements did not contain any untrue material statements and their auditors, Lattimore Black Morgan & Cain, PC seconded that so obviously the following is all accurate. We looked ourselves. Not being professional financial statement ninjas, however, we invite you to take a peek for yourself here.

The good news for NASBA is that total consolidated revenue in Fiscal 2010 was $33.7 million compared to $31.4 million in Fiscal 2009, an increase of 7.3%. There were more CPA exam candidates as well as a new state added to NASBA’s CPAES program, which does the work of state boards of accountancy by processing CPA exam applications.

Interestingly, though my grandparents have been eating Alpo for the last two years thanks to Ben Bernanke and I’m earning a little under half a percent on my savings, NASBA must have a good investment banker because they did pretty well for themselves in FY 10. The annual report states that revenue from escrow management fees related to the CPA exam increased over the prior year and that higher interest rates, on average, during FY 10 were earned on these funds which are held in fully-insured securities or interest-bearing accounts. Can someone please let me know where these accounts are?! I want in.

But the most interesting part of NASBA’s mostly dull financial statements is the $300,000 “fine” Prometric paid them for violating its CPA exam agreement. Yes, the same agreement that was just renewed through 2024 with much fanfare last year.

The item is reported as “Income from Contract Issue” on NASBA’s consolidated financial statements and buried in note 12 thusly:

Note 12. Income from Contract Issue
As a part of the initial CBT Services Agreement effective May 31, 2002, Prometric was required to obtain and maintain insurance policies for certain specific perils, coverage amounts, terms and conditions naming the Association and its member boards as additional insureds. During fiscal 2010, the Association asserted that Prometric failed to comply with certain applicable insurance requirements. Prometric denied the assertions but, in resolution of the matter, provided evidence that it had come into compliance, agreed to indemnify, hold harmless and defend for any coverage lapses, and paid $300,000 to the Association. In addition, Prometric reimbursed the Association for certain legal and administrative expenses related to the resolution.

It doesn’t appear that NASBA declared the legal and admin expenses it also received so we’re assuming they were either immaterial or just embarrassing. Any financial statement detectives are welcome to come to their own conclusions.

Accounting News Roundup: Big 4 Diversity Rankings; NFL Players Are Calling Their Accountants Today; Choose Sleep Over Food | 03.04.11

Caleb Newquist
March 4, 2011

House votes to rescind IRS reporting measure [Reuters]
The House of Representatives voted on Thursday to rescind an unpopular business tax reporting requirement in the year-old healthcare law, but the measure could be delayed by a dispute with Senate Democrats over how to pay for it. The House vote was 314-112, with 76 Democrats joining the majority Republicans despite concerns the method used to cover the cost of repealing the reporting requirements would weaken President Barack Obama’s healthcare overhaul.

Ford Accounting Move May Add $13 Billion to Profit, Expert Says [BBW]
Ford Motor Co., after earning $9.3 billion in the last two years, may make an accounting change this year to reflect confidence in its recovery, a move one tax expert said could boost its 2011 profit as much as $13 billion. Ford in the second half may eliminate from its balance sheet a valuation allowance held against deferred tax assets, it said in a federal filing this week. The reserve was created in 2006 as Ford began four years of operating losses.

Employment Data Signal Economic Improvement [WSJ]
Nonfarm payrolls rose by 192,000 last month as private-sector employers added 222,000 jobs, the Labor Department said Friday in its survey of employers. The January number was revised to show an increase of 63,000 jobs from a previous estimate of 36,000. The unemployment rate, which is obtained from a separate household survey, fell to 8.9% last month, the first time it dipped below 9% since April 2009.

The DiversityInc Top 50 Companies for Diversity [DiversityInc]
PwC #3; E&Y #5; Deloitte #8; KPMG #29.

What NFL Players Are Asking Their Accountants Right Now [Esquire]
Pro football players may have to start unloading those extra cars.

Deloitte’s role as auditor to Aero Inventory under investigation [Telegraph]
The Accountancy and Actuarial Discipline Board (AADB) said on Thursday that it had opened an investigation into the “preparation, approval and audit” of Aero Inventory’s accounts in the years leading up to its collapse in late 2009. The enquiry will centre on Deloitte’s role as well as that of the company’s accountants.

Phil Isom Joins KPMG to Lead U.S. Corporate Finance Group [PR Newswire]
Mr Isom joins KPMG from “another Big Four accounting firm’s capital advisory group.”

Sleep is More Important than Food [HBR]
In case you’ve got a decision to make this weekend.

News

During the 1099 Repeal Debate, a Democrat More or Less Called a Bunch of Republicans Liars, Then Took it Back, and Then May Have Called Them Liars Again

Caleb Newquist
March 4, 2011

The repeal of the 1099 reporting provision of the healthcare reform bill was finally passed by the House today but not before things got a little awkward when Represenative Earl Blumenauer (D-OR) “said Republican claims that the law is a government takeover of healthcare had been deemed ‘the 2010 political lie of the year.’ “

Now, on its surface, this seems like a little bit of tangential grandstanding by the ~~man-child~~ gentleman from Oregon but his colleague Dan Lungren (R-CA) didn’t appreciate the remark and was not about to let this slide:

Blumenauer seemed to gesture toward Lungren, who had just finished speaking, and said the Republican member called the healthcare law a government takeover.

Lungren did not directly say the law is a government takeover, but did criticize the laws in other ways.

After Blumenauer’s “lie of the year” comment, Lungren quickly interrupted to raise a point of order and ask whether Blumenauer should be allowed to say, or imply, that Lungren is a liar.

Blumenauer – not to be outdone – countered this challenge with one of his own:

Asked if he was demanding Blumenauer’s words be “taken down” — a challenge to their propriety — Lungren said no, but did ask the acting Speaker to warn members about referring to colleagues in this way.

The exchange continued: Blumenauer said he was simply citing a Politifact finding that Republican claims of a government healthcare takeover are the political lie of the year. Lungren then immediately asked that Blumenauer’s words be taken down.

Blumenauer, knowing he was beat, then capitulated (he’s a Democrat, after all), “Several minutes later, Blumenauer asked unanimous consent to strike his words,” and then thought better of it, “[he] repeated the Politifact citation again in his explanatory comments.”

“I’m not calling anybody a liar,” Blumenauer said. “What I intended to say … is that as we have repeated talking points about a government takeover of healthcare, this has been judged by an independent undertaking as the political lie of the year.”

It could probably go either way but someone seems to be getting called a liar in there somewhere.

Lawmakers spar over ‘lie of the year’ in debate over healthcare provision [Floor Action/The Hill]

News

Bill Gates Has Less Than Flattering Things to Say About Government Accounting

Caleb Newquist
March 4, 2011

“[R]eally, when you get down to it, the guys at Enron never would have done this. This is so blatant, so extreme,” Gates said of state governments’ accounting practices generally. “Is anyone paying attention to some of the things these guys do? They borrow money — they’re not supposed to, but they figure out a way — they make you pay more in withholding to help their cashflow out, they sell off the assets, they defer the payments, they sell off the revenues from tobacco.” [HuffPo]

News

Are Accountants in Denial About North Africa?

Caleb Newquist
March 4, 2011

From February 9th to 24th, they may have been.

A CPA Outlook Index put together by the American Institute of Certified Public Accountants and the University of North Carolina rose to its highest level since the third quarter of 2007 — before the recession took hold. That was largely due to a big jump in optimism over the U.S. economy, but the 1168 accountants surveyed were also felt better about their own firms and expect stronger sales, profits, spending and hiring. The survey was conducted between Feb. 9 and 24 — a period that captures the resignation of Egypt’s Hosni Mubarak, growing unrest in Libya and rising energy prices. That offers evidence that, thus far, the tremors in the Middle East and North Africa haven’t seriously unsettled U.S. businesses.

Possibly related – CBS had just suspended Two and a Half Men on February 24th, thus, this survey may not accurately reflect the effect this loss has had on our nation.

Accountants Get More Optimistic [WSJ]

Career Center

What Exit Opportunities Exist for a Big 4 Transaction Services Professional?

Caleb Newquist
March 4, 2011

Welcome to the maybe-we-should-start-pointing-out-who-really-isn’t-winning edition of Accounting Career Emergencies. In today’s edition, a future advisory professional wants to know what kind of exit opportunities he’ll have when he’s had his fill of Big 4.

Need some career advice? Concerned that you’re being unfairly portrayed by someone? Have you recently found a mistake at work and aren’t handling it well? Email us at advice@goingconcern.com and we’ll, at very a tie score.

Onward:

I will be starting at a Big 4 firm in TS this fall. I have seen posts and comments on GC primarily about KPMG’s TS group, and commenters mention a “mass exodus” from TS.

I was interested to know what the exit opps are for people in TS? I have been searching around banking blogs and it seems that TS is not held in high regard in I-banking, so what offers are they receiving?

Sincerely,

Interested Viewer

Dear Interested Viewer,

The advisory space isn’t my strong suit but I’ll take a stab. You’re starting with a “Big 4” but then mention KPMG so I’m not exactly sure where you’re ending up so I’ll keep things fairly general. All of the Big 4 have various services within their TS practices including due diligence in various forms, restructuring, accounting advisory and valuation among others. A common exit opportunity for many in Big 4 TS people is to go to…wait for it…another Big 4 firm. None of these firms have a monopoly on the services offered so if you’ve heard good things about Deloitte as opposed to your living hell at PwC, you may jump at the opportunity to join a rival firm. And we know how the firms like to poach from each other, don’t we?

If that’s not of interest to you, the top consulting shops like McKinsey, Bain & Co., Boston Consulting et al. (check out Vault for their list of the top firms) are a possibility but in reality, not a very good one. These firms like their people with smarts – frightening smarts – and Ivy League degreed. If you’ve got both, you probably already work at one of the best firms. If you’re lucky enough to have one of those two, you might have a chance. If you’ve got neither, than you have virtually have no chance.

You mention I-Banking and again, the odds are against you here if you want to work at the top firms, for the same reasons as we mentioned above. Some more realistic options include due diligence, acquisitions or analysis work for a private equity or hedge fund shop or working in the finance group of a firm with M&A aspirations or that needs other complex transactional analysis.

The other option is that you work for awhile, get an MBA and then try to land the BSD job at McKinsey, Goldman or wherever. Of course hitting the big time after going to a prestigious B-school doesn’t mean your dreams of rainmaking are a lock, so it’s a big risk but obviously many have taken this road and made a decent run.

So, there you have it, Interested Viewer: some ideas, at the very least. Any Big 4 TS types out there with some first-hand accounts of the comings and goings are invited to weigh in at this time. I’ve got to get caught up on the #winning Twitter feed.

News

WeiserMazars Moves into Chicago as Part of Acquisition of LECG Units

Caleb Newquist
March 3, 2011

Earlier this week, we told you about the fire sale that was going down at LECG Corp. LECG was selling off various units to FTI Consulting, Grant Thornton and WeiserMazars to try and pay down a portion of the $27 or so million that they owed on their credit facility. After speaking with Doug Phillips, the managing partner at WeiserMazars, we have learned that the deal has officially closed and few more details about the units they acquired in the deal, including their move into the Chicago market.

As we reported on Monday, WM is picking up five partners and approximately 40 staff from LECG. Mr Phillips told us that “we are very excited” about the transaction and these professionals will join the commercial and insurance audit practices as well as business advisory services. The majority of the new professionals will be located in the firm’s Horsham, PA location while one partner and approximately ten staff will be located in Chicago.

Mr Phillips told GC that this acquisition strengthens WeiserMazars’s “insurance, commercial and business advisory services, as well as solidifies our presence in the Philadelphia market.” Perhaps more importantly, however, is that “[WeiserMazars] now has a presence in the Chicago marketplace,” Mr Phillips aid. This will mark the 9th location for the firm in a key market for a firm that appears to have some wind in its sails after last year’s combination of Weiser and Mazars. We’ll be keeping an eye on them as things progress after this latest move.

UPDATE:
Check out the WeiserMazars press release for more details.

Deloitte

Former Deloitte Partner Jeff Farber Lands Deputy CFO Gig at AIG

Caleb Newquist
March 3, 2011

Not only is Mr Farber a Deloitte audit alum, he also had stints as the controller at Bear Stearns and CFO at Gamco Investors. Today came the announcement that he is still winning, now as the new sidekick to David Herzog.

In this new position, Mr. Farber will provide global leadership and coordination for AIG’s Controllership and Accounting Policy functions, as well as the AIG Global Tax Department. He reports to David L. Herzog, AIG Executive Vice President and Chief Financial Officer.

It’s worth noting that as the a leader and coordinator for global tax department, Farber alone will encompass more oversight than all of Weatherford International.

ANYWAY, back to the boilerplate:

“Jeff Farber is well prepared to help take these key AIG finance functions to an even higher level,” said Mr. Herzog. “Over the past several years the finance team has worked diligently through an extraordinarily complex restructuring, and this new role provides Jeff with an opportunity to lead a great team and work closely with the finance transformation team as we roll out our new financial platform.”

Sounds like a hoot. Best of luck to Mr Farber.

Accounting News Roundup: Twitter Saying No to IPO (For Now); Ken Starr’s Sentence; Wesley Snipes Wants a SCOTUS Review | 03.03.11

Caleb Newquist
March 3, 2011

BP Spill Chiefs Miss Out on Bonuses [WSJ]
Former Chief Executive Tony Hayward, former head of Exploration and Production Andy Inglis and current Chief Executive Robert Dudley will receive no cash bonus for 2010 and no shares under the long-term remuneration plan running from 2008 to 2010, BP said in its annual report to shareholders. Head of Refining Iain Conn and Chief Financial Officer Byron Grote will receive cash bonuses of £104,000 ($169,800) and $207,000 respectively for meeting targets within their own division. This is around 10% of the cash bonuses they received in 2009.

Twitter’s Stone: No IPO or funding talks [Reuters]
Asked about a Financial Times report last week that said a technology fund from JPMorgan was in talks to buy 10 percent of Twitter, Stone said: “(The report is) made up.”

Taxpayers Beat Wall Street as Top Lenders to Clean Energy [Bloomberg]
Government-backed development banks in Europe, Brazil and the U.S. arranged the most funding for clean energy projects in 2010, taking up the slack left by commercial lenders during the credit crisis. The European Investment Bank furnished $5.41 billion of debt for renewable energy projects last year followed by $3.16 billion from Brazil’s state development bank, BNDES, and $2.12 billion from the U.S. Federal Financing Bank, according to an annual survey by Bloomberg New Energy Finance.

Robert Half Professional Employment Report [RHI]
Nine percent plan to increase staff, while 4 percent anticipate declines. The net 5 percent projected increase is unchanged from the first-quarter survey, with most respondents, 86 percent, expecting to maintain current personnel levels.

Starr Gets 7 1/2-Year Prison Sentence for Defrauding His Celebrity Clients [Bloomberg]
Kenneth I. Starr, the money manager whose clients included actors Sylvester Stallone and Wesley Snipes, was sentenced to 7 1/2 years in prison after pleading guilty to defrauding nine celebrities out of $33.3 million.

Ryan Donmoyer Leaves for Ernst & Young [FoC]
Donmoyer covered tax news for Bloomberg out of DC.

Wesley Snipes Seeks Supreme Court Review of His Tax Convictions [TaxProf Blog]
Um…okay.

Going through the motions: Only 1/3 of workers are engaged in their jobs [AW]
But far more are married to their jobs. Strange.

Apparently Lance Armstrong (aka ‘an annoying little man in tights’) Retired from Cycling to Lobby for Higher Taxes

Caleb Newquist
March 3, 2011

I will not apologize for loving the snark coming from Americans for Tax Reform today:

California is one of the most heavily taxed jurisdictions in the world. If that weren’t bad enough, for the next few months Golden State residents will have to deal with an annoying little man in tights pedaling around the state to stump for even higher taxes. Lance Armstrong, who recently retired from professional cycling to lobby full time for higher taxes, was in Los Angeles earlier this week for a press event with California state Senator Don Perata to announce the launch of a campaign to raise the state tobacco tax.

I have to give credit to ATR, they are nothing if not consistent. After all, they are lumping in a cancer survivor with a cancer-fighting nonprofit for being lovers of higher taxes on cigarettes.

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