Going Concern

KPMG

Compensation Watch ’10: KPMG Discussing a Mid-Year Bonus (or Something)

Caleb Newquist
December 6, 2010

After moves by Deloitte, PwC, McGladrey and now Grant Thornton, we have now heard that KPMG is discussing a mid-year surprise.

The only thing is, there aren’t a lot of details at this point. The firm’s first quarter is not over until the end of this month, so the pool likely hasn’t been determined and it isn’t known whether the mid-year comp will be paid as a bonus or as a merit increase. Our source on the matter speculates that it will be a bonus rather than a raise but it is fairly certain that it will be structured in a way that will incentivize employees to stay with the firm. There has been steady stream of people leaving (which is not atypical this time of year) and there are hopes that this show of love will stem the tide.

So while it appears that the House of Klynveld has heard your grumbling about anteing up, time (and the amount of money) will ultimately determine if this will satisfy the troops.

If you’re familiar with the talks or you have more details, email us the details and discuss your thoughts below.

UPDATE – circa 2:10 pm: Some thoughts on a non-bonus approach:

Pure (educated) conjecture on my part, but I would assume that the mid-year “surprise” would be a raise, as the firm is apprehensive at this point about giving bonuses, because people could just take them and leave. Harkening back to our SOX-404 years (2005), we gave multiple raises, bonuses and awards throughout the busy season (i.e., if you worked 60+ hours in a week, immediate $200 award) with a bonus at the end of the tunnel. I seriously doubt any early 2011 compensation would be front-loaded.

And then, in case you weren’t already aware, there’s this:

In other news, [the Dallas] office has been reaching out and giving offers to people they have previously laid off and are seeking out experienced hires. Not sure if it’s firm-wide, but an interesting sign of desperation nonetheless.

Career Center

Should Grad Students Crash Another School’s ‘Meet the Firms’ Event?

Caleb Newquist
December 6, 2010

Welcome to the your-life-would-be-easier-if-you-just-embraced-Monday edition of Accounting Career Emergencies. In today’s edition, a graduate student wants to know if crashing another school’s ‘Meet the Firms’ event is a good idea or if it will land him on the Big 4 blacklist.

Looking for some career advice? Need help filling out your Holiday Gift list? Bored with your life after Big 4 and need some ideas on how to fill the hours? Email us at advice@goingconcern.com and we’ll and we’ll find you a hobby in no time.

Back to the Big 4 crasher:

I am attending a master’s of tax program in a small city that only has two Big 4 firms, only one of which does tax. As a result of this, the other firms don’t recruit at our school and won’t let us apply for associate positions because they don’t recruit at our campus.

A couple of classmates and I were wondering if it would be wrong to travel to a larger city and attend that school’s ‘Meet the Firms’ night next year to hand our résumés to the recruiters and get face time with them. Would doing this do more harm that good to us with the firms or would it show how much we want to work for them?

Thanks for the advice,
Small town accountant

Dear Small Town,

We like your enthusiasm for a road trip. This particular journey has a mission, however, so it has a little more significance than your average cruise through the desert with a trunk full of narcotics but we understand you’ve got your future career to consider. Anyway, we’re all for this idea for a couple of reasons: 1) It’s a relatively low-risk proposition that could pay big dividends and 2) If you’ve got some self-control, the trunk full of narcotics could still happen.

That said, the most important thing to keep in mind while on your recruiting journey is that you are wandering into enemy territory (so to speak). This means you’ll have no choice but to be completely honest about your non-affiliation with the school. Your résumés will easily show this but any kind of misrepresentation will eventually torpedo your plans one way or another. Clearly explaining your situation to the firm recruiters will demonstrate your willingness to go the extra mile (or 50 to 100) and assuming you’ve got a stellar résumé, it will likely impress them even more.

As for the risks – your rival school could just up and throw you out once they find out that you’re not affiliated with the school. For starters, you’re jockeying for face time with the firms at the expense of their students. As long as you don’t make a spectacle of yourself, we feel there’s only a small risk of you getting the heave. Likewise, one of the firm’s recruiters may frown on your little crashing escapade but frankly, if you don’t make it seem like a big deal, they won’t either.

So we say go for it – show up, shake hands, chat ’em up and who knows what will happen. You’ve got very little to lose except maybe a job.

Anyone out there who has crashed a recruiting event is invited to share the highlights or if you agree/disagree with the advice, chime in below.

Accounting News Roundup: Deal for Tax Cuts, Unemployment Benefits Looks Likely; Emerging PCAOB Chair Candidates; Snipes Still Avoiding Prison | 12.06.10

Caleb Newquist
December 6, 2010

Tax Deal Within Reach [WSJ]
White House officials and congressional Republicans are closing in on a deal that would extend current income-tax rates for all Americans as well as a benefits program for the long-term unemployed, staving off tax increases for middle-class and wealthy taxpayers alike that are set to take effect after this year.

Leaders of both parties appeared optimistic over the weekend about reaching an agreement on a broad tax package by midweek, following the failure of two Democratic-sponsored tax measures in a rare Saturday session of the Senate. Those measures would have extended current tax rates for ars. Failure of the proposals paved the way for the two parties to continue negotiating toward a package that could gain enough votes to pass.

SEC Considers Former Insiders to Head Audit-Industry Watchdog [Bloomberg]
James R. Doty, who served as SEC general counsel from 1990 to 1992, and John J. Huber, who headed the agency’s corporation finance division in the 1980s, are the leading candidates to head the Public Companies Accounting Oversight Board, said three people familiar with the matter who declined to be identified because the process isn’t public.

Madoff trustee sues HSBC for $9bn [BBC]
Iriving Picard, who is seeking to recover funds for Madoff’s Ponzi scheme victims, is alleging 24 counts of fraud and misconduct against HSBC. He alleges that HSBC aided Madoff’s scheme through the creation of a network of international feeder funds.

A Loan Accounting Problem to Make “Amortized Cost” Proponents Squirm [The Accounting Onion]
Loaning money to plaintiffs to fund their lawsuits is a tricky enough proposition without getting into the accounting.

How College Students Should Use Linkedin [The Summa]
Dave Albrecht explains that this should not be Facebook redux.

“Cloud is bullsh*t” – HCL’s CEO, Vineet Nayar, explains why he said just that [Horses for Sources]
Maybe it’s a just attempt to be contrarian.

McGladrey Expands Washington National Tax Office [McGladrey]
“We are thrilled to add Bob’s knowledge and expertise to our firm at such an exciting time. Over the next few years, we plan to more than double the size of our D.C.-based teams with additional strategic hires to better serve our clients,” said C.E. Andrews, president of RSM McGladrey. “Our new office in the heart of our nation’s capital and Bob’s relationships within the IRS will, no doubt, prove invaluable for our clients as we create a ‘gateway of connectivity’ for them with policymakers influencing the tax world.”

Wesley Snipes Asks To Delay Jail For Holidays With Kids [Janet Novack/Forbes]
This guy really doesn’t want to go to jail, ‘In an “Emergency Motion To Stay Self Surrender’ filed Friday, Snipes argues that as the father of four children, aged 4 to 9, he shouldn’t be forced to turn himself in ‘in the middle of the holiday season.’ ”

Deloitte

Insider Trading Charges Throw a Wrench into Former Deloitte Employee’s Plans for Sexy Mobile App

Caleb Newquist
December 4, 2010

[caption id="attachment_22306" align="alignright" width="260" caption="Drew Altizer Photography via The Bay Citizen"]

[/caption]

Having a nice Friday evening, Going Concern faithful? Wonderful. Ordinarily, we would leave you to your weekend activities but something came to our attention that simply couldn’t wait.

Earlier in the week, we told you ��, the former Deloittians who were charged with insider trading by the SEC. Arnold and Annabel were giving tips to Annabel’s sister, Miranda Sanders, and her husband, James, who traded on the information. The SEC alleges that the scam amounted to approximately $23 million in gains for everyone involved.

For all intents and purposes, Arnold McClellan probably was your run-of-the-mill tax partner at Deloitte until he opted to use his insider knowledge to make some money for himself and his in-laws. Likewise, you might expect that Annabel was just a humdrum Deloitte employee who landed a partner (he’s 13 years her senior) who got involved in a insider trading scam. But someone sent us a link to a report in the Bay Citizen that informs us that she had a very interesting venture in the works.

You see, Annabel left the firm (exactly when, is unclear) after working in the London, San Jose and San Francisco offices and presumably was ready to be a stay-at-home mom. When that became monotonous, she and a friend figured they would take their interest in knockin’ boots to launch a mobile app called “My Nookie.”

The website for the app has been taken down but the Bay Citizen was able to get a lot of the details:

The “about” tab for McClellan’s website details a vision for a new kind of social networking site:

My Nookie

Friends love to talk about sex and My Nookie is the app your sex life and social life can’t be without. Journal and rate your partners and sexual encounters. Share sexperiences with your closest friends, take sexting to the next level and relive your rendezvous with those five star partners.

Fun and tasteful with activity illustrations, My Nookie is fully loaded with features to flirt, play, tease and share. Feeling adventurous? Shake your phone and dare to try something new. Keep it handy on your iPhone because you never know …..

Features:

• Detailed diary of your sexual activities with date, partner, location, ratings and notes

• Partner contacts with profile, including photo, rating, activities performed, notes and tally

• Sex activity illustrations and descriptions, with the option to add your own

• ‘Shake It’ feature which suggests an activity to try

• Personal profile with ‘nookie’ summary

• Share all or some of your entries, partners, and profile

• Send a sexy invite to a partner or potential partner with alluring pictures

• Email, text or call your partners right from the app

What happens in My Nookie stays in My Nookie with optional pass code lock and discreet mode.

The Bay Citizen reports that My Nookie isn’t available in Apple’s app store (frankly, we’ll be surprised if passes Steve Jobs’s sniff test) but they have some screen shots (examples are on the following pages).

Unfortunately, now that Annabel has legal troubles to contend with, the Citizen reports her partner in the My Nookie venture, Milly Hanley, has taken over the project entirely. Arnie’s lawyer stated that he wasn’t involved with this venture while Annabel’s counsel simply stated that My Nookie was unrelated to their involvement and referred the Citizen back to Ms. Hanley who claims she can’t recall how she met Annabel.

The story around the McClellans is even weirder the more we poke around. Andrew Ross quotes a source in the San Francisco Chronicle:

“While they’ve been described as socialites, they’re definitely not at the top of that heap. I think a more apt description is they were attempting to scale the social heights.”

According to a report Wednesday in the online Bay Citizen, “in recent weeks, citing vague legal troubles, the couple had told friends that they were considering moving their family, which includes two school-aged sons, to South Africa.”

Perusing around a little bit more, Annabel’s Facebook page seems pretty locked up (definitely not accepting new friends) and we found the blog “My Nookie” which has the same feel as the mobile app and was started by “three friends in our 30s and 40s,” the third woman possibly being Jeanette Harris, who, the Citizen article states, hosted a benefit last year with the other two women.

From the blog’s “About Us” page:

We’re three friends in our 30s and 40s who realized that somewhere between meeting our husbands and getting married, we clammed up when it came to talking about our sex lives. MyNookie.com is where we can open up about everything we’re thinking about when it comes to sex and sexual health. And it’s where you can turn to for creative solutions and accurate information—because sex is too important to feel like you’re missing out.

Sure sounds like it could be our three amigas, doesn’t it? So with these developments, this story has gotten exponentially more interesting. We invite anyone with knowledge about the situation to email us and we’ll keep you updated as we learn more. Oh, and be sure to leave your thoughts on the app in the comments. Ms Hanley is probably looking for feedback.

News

Who Says Corporations Don’t Pay Their Share of Taxes?

Caleb Newquist
December 4, 2010

~ From the Joint Committee on Taxation via Felix Salmon

Ernst & Young Study: U.S. Is Great for Renewable Investment If You Don’t Count the Red States

Caleb Newquist
December 4, 2010

China has everyone beat, no shocker there, but if you don’t count Sarah Palin’s real America the ~~red~~, white & blue is #2!

Ernst and Young counts only perhaps half (or is it three quarters?) of the 300 million people in the US as “US”, by considering only those states that are doing anything about renewable energy, like California…The “US” excludes all the dirty states that lack renewable policy; states like Wyoming, Indiana, North Dakota, Kentucky, Oklahoma and so on.

Ernst & Young: U.S. Blue States Nearly as Attractive as China for World Renewable Investment [Reuters]

News

One Man’s Holiday Wish List Includes Tim Geithner and Charlie Rangel Sharing a Prison Cell with Wesley Snipes

Caleb Newquist
December 4, 2010

Actually, if Wes Benedict, Executive Director of the Libertarian Party, had his way, Wes wouldn’t be doing time at all.

“The three-year federal prison sentence for Snipes’s failure to file tax returns is absurd. Snipes is not a threat to anyone, and the judge who sentenced him clearly just wanted to scare others who might think about resisting federal taxes.

“Maybe it’s worth reminding people that Wesley Snipes was acquitted of tax fraud and conspiracy charges in 2008. He was only found guilty on misdemeanor charges of ‘willful failure to file an income tax return.’

Right, so the ‘willful failure’ part is where we kind of have a problem. If you willfully fail to control your urge to get cop-slugging drunk and then actually slug a cop, you have committed a crime. Mr Benedict doesn’t buy it though:

“Why is a failure to file a tax return a criminal non-act? Should people ever be sent to prison for not doing something? If the IRS wants to come after Snipes and take his money, they have power to do that. Who does it help to send the man to prison?

“The tax code is incredibly vague and open to interpretation [Ed note: UNDERSTATEMENT OF THE CENTURY]. In fact, the ‘law’ is largely written by IRS bureaucrats. If they decide the law says one thing, you’re OK; if they decide it’s something else, then you’re headed for prison.

“The federal tax code also allows for ‘selective enforcement,’ to put it mildly. Why is it that Wesley Snipes gets a prison sentence, but known tax cheat Tim Geithner gets promoted to Secretary of the Treasury? Maybe Tim should be Wesley’s cellmate. Throw tax cheat politician Charlie Rangel in the slammer too for good measure.

Tim Geithner’s poor choice in self-prep tax software and an actor giving the 16th Amendment the middle finger for 10+ years aren’t quite the same thing. Maybe it’s just us.

[h/t Tracy Coenen]

Career Center

A Future McGladrey Associate Is Having Second Thoughts About Their Decision

Caleb Newquist
December 3, 2010

Welcome to the your-day-can’t-be-worse-than-Julian-Assange’s edition of Accounting Career Emergencies. In today’s edition, a college student who accepted a fulltime gig with McGladrey is spooked after reading some kvetching about the firm on this here site. Did he make a bad choice?

Caught in a jam at work? Thinking about blowing the whistle? Concerned that the washrooms at your office aren’t sanitary? Email us at advice@goingconcern.com for lawyer recommendations or hand-washing tips.

Back to the morose McG soon-to-be:

I am a college student in the Southeast region of the United States. I am a graduate student and have accepted an offer to work full time at McGladrey (audit) in this region.

I have seen so many negative remarks on your website from comments and articles about the company, that I am somewhat concerned with my choice of firm. I seemed to fit in really well with the people at the office, and I enjoyed the office visit. I received offers from the other middle market companies (GT, BDO), but I felt best at McGladrey.

Seeing comments that compare McGladrey to McDonald’s is a bit disconcerting considering the fact that I have spent so much time and effort in college trying to gain a good job with security.

My ultimate question is, did I make a bad decision? Is McGladrey really THAT bad, or is it comparable to the other mid-tiers? To me, it seemed to meet the standard of the mid-tiers.

Please help me figure out if I need to try and make a move before I start.

Dear Unhappy Meal,

In case you haven’t noticed, the peanut gallery here at Going Concern is a cheeky bunch (love!) and your concern about the comments that you’ve read on various posts is a little overblown, in our opinion.

For starters, trust your instincts. You made the best decision based on your experience with the three firms you mentioned. Now, all of a sudden, you’re spooked because you read a few comments comparing McGladrey to McDonald’s? Have you read the comments on the Grant Thornton threads? They are, at the very least, on par with the spouting on the Mickey G posts.

Secondly, our most recent post about McGladrey was news of extra paid time off, concierge services, bonuses and babysitters. Babysitters! Does that sound like such a bad place to work? Yes, it’s the McG brass giving you the “we appreciate your hard work and this is our show of thanks” line and that always invites skeptical reactions but you show us one firm that doesn’t experience some backlash and we’ll show you firm that doesn’t exist.

So to answer more directly – you didn’t make a bad decision because you went with your gut. You made the best choice for you and not based on what you heard some anonymous commenter say. Go forth with confidence, grasshopper.

Big 4

One E&Y Office Is Under the Impression That KPMG Is Not Their Competitor

Caleb Newquist
December 3, 2010

This marks the time of year that your firms ask you to give back to your community in various ways. The most common way that we’re aware of is to contribute to your firm’s respective United Way Campaign. This push usually involves numerous emails and maybe even a little dog and pony show where one partner essentially guilt-trips you into giving to the charity of the firm’s choosing rather than your own.

The Big 4 firms are quite competitive in their fund-raising efforts and a tipster had some thoughts on the tally in the Atlanta office of Ernst & Young (photo after the jump).

[A]pparently EY Atlanta doesn’t believe that KPMG exists (or is considered their competition)

Not to mention that these progress indicators are oddly phallic-looking…

It’s also worth calling attention to E&Y’s abysmal phallic filling performance compared to Deloitte and PwC. Our tipster’s points are duly noted and we’ve concluded that it’s either an obvious show of disrespect by E&Y Peachtown aimed right at KPMG OR the House of Klynveld happens to be blowing everyone out of the water and the Atlanta brass is saving everyone the embarrassment.

Knowing what we know about KPMG employees’ enthusiasm for the United Way Campaign, the latter scenario seems unlikely. Other theories and reactions are welcome at this time.

Should You Request a Rescore if a Simulation Snafu Cost You a Passing Grade on the CPA Exam?

Adrienne Gonzalez
December 3, 2010

For this, my first CPA exam advice column since 2010 testing finally closed, we have a pretty interesting question from a candidate in Georgia who wants to know if it her 74 is worth a rescore. Normally my advice is to forget about disputing your score as the AICPA has not actually changed a single failing score to passing in the last three years (remember, their formula is bulletproof and they are not about to admit their precious psychometric testing sucks) but this is a special case.

Hello, I have a question related to my score on Auditing and would appreciate any advice you could provide. I took the exam on 10/28/2010 and received my score of 74. I am wondering what my options are for appeal or review. The reason for this is because on the last simulation one of the tabs was not the same when I tried to review as when I first saw it. I am 100% sure that I had the choice of 6 options when taken the exam. But once I went back to review the test, there were only 4 choices available. I did report this to the coordinator that was present and she told me that she would write a report. I also reported in the section where they ask if there were any problems during testing.

Firstly, remember that Prometric test center staff are not hired by the AICPA to administer your test. They administer hundreds of different professional examinations, not just the CPA, so they don’t really get how important a single screwed up simulation can be to your overall score. Don’t be surprised if they merely wrote down your complaint and tossed it into the examination abyss.

That being said, the AICPA’s appeal process isn’t really going to help you. As I said above, the chances of a rescore turning out favorably for you are slim to none.

But you may have another option, available through your state board, that would allow you to meet with one of their representatives and see the questions you did not answer correctly. Whether or not this actually ends up in your 74 turning into a 75 is up for debate and in my three years of working in CPA review, I never met anyone who did this, let alone did it successfully.

Contact your state board and ask about the score appeal option. If available, you will likely have to pay a fee and there are no guarantees that anything positive will come of it but if you sincerely believe that the simulation changed, that’s a glitch and throwing out that simulation could just bring you beyond a 75.

Good luck!

Tax
Video

Wealthy Canines Not Spared Democrat’s Ire During Tax Cut Debate

Caleb Newquist
December 3, 2010

Somewhere in the whole mishmash of yesterday’s events leading up to the House’s passage of chicken crap, Joseph Crowley took to the floor to remind us know that it’s just not wealthy humans that stand to benefit greatly from tax cuts.

[via Gothamist]

Accounting News Roundup: Rangel Censured, Feels Good; Tax Relief for Bailed Out Companies; “Little GAAP” Risks | 12.03.10

Caleb Newquist
December 3, 2010

Rangel Censured for Ethics Violations [WSJ]
“I truly feel good,” said Mr. Rangel, 80 years old, who has represented Harlem for 40 years. “A lot of it has to do with the fact that I know in my heart that I am not going to be judged by this Congress, but I am going to be judged by my life.”

Baucus introduces tax, unemployment bill as accord appears possible [On the Money/The Hill]
There he goes again, attempting to don the bipartisan armor, “Senate Finance Chairman Max Baucus (D-Mont.) introduced legislation Thursday to permanently extend tax cuts for the middle class, patch the alternative minimum tax for two years and reinstate the estate tax.

Besides the tax provisions, the legislation calls for a yearlong extension of federal unemployment insurance through 2011. Baucus introduced a $56.4 billion bill earlier this week to federal extend benefits, which began lapsing on Wednesday.”

BofA Drags Balance Sheet Confidence Backward [Jonathan Weil/Bloomberg]
PwC may be in a bit of a pickle over Bank of America’s mortgage mess.

Is the IRS Racist? [Time]
Total headline bait trash from Time. Obviously the IRS isn’t racist. Their methods need some serious tweaking and they need help setting their priorities but they aren’t bloody racist.

What’s keeping CPAs up at night? [CPA Success]
Tom Hood tells us.

Tax Breaks for Bailout Recipients Stir Up Debate [WSJ]
A series of tax relief measures is saving companies bailed out by the government billions of dollars at a time when concern over tax revenues has risen.

Although the Treasury Department first provided the tax guidance in the fall of 2008, the magnitude of the tax savings has become clearer in the past year. The tax relief drew new scrutiny last month after Wall Street bankers touted it to investors in the initial public offering of General Motors Corp.

KPMG Announces 2010 Americas Partner Class [PR Newswire]
We tried telling them months ago.

The Fed’s Full Disclosure: Don’t Forget About Government GAAP [Forbes]
Francine may have lost it, “What do Ben Bernanke and Julian Assange have in common besides that sexy ‘come hither’ look?” Shudder.

The Big Risks of Little GAAP [CFO]
Careful what you wish for?

Clifton Gunderson relocating headquarters within Tosa’s Research Park [MJS]
CG is expanding into new digs of 28,000 square feet.

Careers

Big 4

News

Technology

Practice Management

Site Search

Twitter Feed

Get the Accounting News Roundup

Quick Reads

Sponsored Content

Get the Accounting News Roundup

Remote Bookkeeping, Accounting, Tax and Audit Positions

AO: Senior Accountant, Advisor

Remote Tax Advisor, CPA Firm

Remote Bookkeeping, Accounting, Tax and Audit Positions

AO: Senior Accountant, Advisor

Remote Tax Advisor, CPA Firm