Going Concern

News

An Accountant’s Thanksgiving Leftovers | 11.24.10

Caleb Newquist
November 24, 2010

~ That’s it for us team. Have a great Thanksgiving! We’ll be back on Monday. That is, unless we get the locale for the PwC NYC feast tomorrow (pictures too).

Man Up When Called for Your Junk Pat-Down [Bloomberg]
You want your genitals left untouched or terrorists on your plane? You can’t have both.

Ireland Ushers In four Years Of Brutal Cuts, Tax Hikes [Dow Jones]
Will Irish eyes ever smile again?

UBS, Others Sued for $2 Billion Over Madoff Fraud [ABC News]
Irving Picard still has the most thankless job in the world.

States Slashing Film Tax Subsidies [Tax Foundation]
Somewhere, Joe Kristan is doing a happy dance.

CFOs Cool Their Heels [CFO]
Turnover is down for the second straight year.

Compliance costs rise for small business [CFOZone]
Sayeth the SBA.

Convicted felon hired to teach accounting at university in Missouri [AccountingWEB]

Lawmakers want IRS to make breastfeeding a medical expense [Healthwatch/The Hill]
Doug Shulman is being asked to reconsider the IRS’s anti-boobs stance.

Al-Qaeda Marching Band To Join Macy’s Parade After Incredible Audition [TO]
FYI – for those attending.

Forward One Email and Your Career at PwC Is Over

Caleb Newquist
November 24, 2010

Do you see what happens?

Of course we kid (some of you have no sense of humor). We actually haven’t heard what is happening to the Irish lads as the investigation is rumored to be still on-going. But this could explain what PwC did with a large portion of their swag when the new logo rolled out.

If you happen across this guy, get him a seat at the New York Thanksgiving soirée (location still unknown), wouldja?

Career Center

Decision Time: A Promotion with Deloitte or a New Opportunity with Ernst & Young?

Caleb Newquist
November 24, 2010

Welcome to the why-do-we-bother-on-days-like-today edition of Accounting Career Conundrums. In today’s edition, a young consultant has a pretty sweet gig with Deloitte in DC but has a very interesting offer with E&Y in NYC. What’s a boy to do?

Does your career need a change? Need cheering up? Looking for some last minute advice on the dysfunctional hell that you’re about to walk into tomorrow? Email us at advice@goingconcern.com and we’ll make it all better.

Returning to the Decider:

Hi,

I am currently a second year consultant in the federal practice in Deloitte in Washington DC. I recently interviewed with EY and got an offer for staff advisor role in New York City. Though my pay raise is not significant (in fact the same, since cost of living is higher in NYC), the position is something that really interests me as it deals in financial consulting and is not audit oriented.

The flip side is that i have been a strong performer at D and am most likely to get promoted at year end. Do you think it makes sense to leave D at this juncture and jump to EY even though I am not being offered a senior position, I am not getting a significant pay raise but the job description is something I have always wanted to do.

Please help me out as I need to make a decision by week-end.

Confused,

Dear Confused,

You simply couldn’t let us cruise into a four day food and drink bender, could you? Very well, then. We are here to help after all.

This is a clear-cut situation of figuring out what your priorities are. You make a decent case for each position, so it’s time to line up what’s most important and make a decision based on that.

It really boils down to this: love or money? Your gig at Deloitte sounds pretty good. You’re in an high-profile group at the firm, looking at promotion, probably more money and – as far as we can tell – you don’t hate the work. All good things.

But the opportunity with E&Y has obviously piqued your interest. Different city. Different firm. Different opportunity. Sure the money won’t go as far and you’ll probably live in a broom closet but there may be more than a sliver of a chance that you will love it.

Some people will say, “You’re doing a disservice to yourself and your career,” if you were to take the E&Y gig. “You’re giving up a promotion and the years of experience earned at Deloitte for a longshot,” they might also say.

Personally, we like longshots. All kinds of people in Big 4 and top ten firms continue to choose to stay on the path they’re on because it’s easy and things like higher salaries and more prestigious titles are hard to turn down.

If you’re genuinely interested in the work that comes with the E&Y position, we say go for it. You’ll never look back and wonder what would have happened if you didn’t take that risk and this may be the rare opportunity that you’ve been waiting for.

Chew on that (along with your poultry of choice tomorrow) and then go make it happen.

Bonus Watch: Pre-Turkey Spot Bonuses at PwC?

Caleb Newquist
November 24, 2010

This just in:

Was communicated a spot bonus yesterday, PwC Tax. $4k as a senior. I have never received a spot bonus anywhere near this size. I think instead of mid-year salary adjustments, they are giving enhanced spot bonuses to the higher performers. This is in addition to the “ipad or cash” extravaganza from earlier this month.

PwC is really buttering some people up, aren’t they? Either it’s going to be a rough 2011 or the good times are really back. If you’ve received similar news this week, do share or get in touch and we’ll keep things rolling here.

Earlier:
Bonus Watch ‘10: PwC Announces Across the Board Mid-year Bonuses

Accounting News Roundup: Here Comes Private Company GAAP; Corporate America’s Big Quarter; South Carolina’s Gun Sales Tax Holiday | 11.24.10

Caleb Newquist
November 24, 2010

Jury Rules SAP Owes Oracle $1.3 Billion [WSJ]
SAP AG must pay $1.3 billion to rival Oracle Corp. for copyright infringement, a federal jury ruled Tuesday, following a high-profile court battle between the business-software makers.

The eight-person jury reached the verdict a day after it adjourned to deliberate. The companies presented closing arguments Monday in U.S. District Court in Oakland, Calif.

Oracle Co-President Safra Catz said “this is the largest amount ever awarded for software piracy.”

Why Do Bank Results Slump in the Fourth Quarter? [Floyd Norris/NYT]
Is it because auditors are giving them the stink-eye?

9th Cir.: Minor Child (Secondary Beneficiary of Father’s Retirement Account) Liable for Tax on Distribution After Mother (Primary Beneficiary) Kills Father [TaxProf Blog]
This is probably the least of the child’s problems.

Panel Poised to Recommend Separate Board, U.S. GAAP Exceptions for Private Companies [JofA]
The blue-ribbon panel on private company financial reporting is poised to recommend that the Financial Accounting Foundation (FAF), FASB’s parent organization, move to U.S. GAAP with exceptions for private companies and that those standards should be set not by FASB but by a separate board under FAF’s oversight.

Big Business Has Its Greatest Quarter EVER?! [JDA]
From our esteemed colleague, “Filed under: totally unbelievable headlines that are even less believable once you actually dig into the truth behind the big fancy headline.”

Happy 25th Birthday to Microsoft Windows [CPA Trendlines]
Clippy would enjoy this.

South Carolina’s gun sales tax holiday kicks off on Black Friday, Nov. 26 [DMWT]
Presumably sales will be weaker this year now that every single gun in the country is safe, thanks to the GOP overtaking the House.

Quote of the Day

Your Concern About a Big 4 Failure Is Duly Noted

Caleb Newquist
November 24, 2010

“I don’t see that is on the horizon at all.”

~ Deloitte Global Chairman John Connolly, responding to UK lawmakers about the risk of a Big 4 failure.

News

All Those Frazer Frost Christmas Cards Will Go to Waste Now

Caleb Newquist
November 24, 2010

Last Friday, we linked to a Reuters article that told the story of Chinese clean-tech firm Rino International Corp. admitting that their books weren’t exactly in tip-top shape.

In fact, Rino has some hella-fraud going on, as the CEO is quoted, “[T]here might be problems with 20-40 percent of [customer contracts],” according to a letter from the company’s auditor Frazer Frost. As is the natural progression of these matters, an 8-K was filed informing anyone who cares to know that restatements are happening and that previously issued numbers are more or less worthless.

Then came the news from Financial Investigator’s Roddy Boyd, that Frazer Frost – the offspring of a merger between Moore Stephens Wurth Frazer and Torbet and Frost PLLC – was not really Frazer Frost:

One day shy of the one year anniversary date, the accountancy is scrapping a “trial merger” and is splitting back into Frost LLP of Little Rock, Ark. and Raleigh, N.C. and Moore Stephens, which is headquartered in Brea, Ca.

“Trial merger” kinda sounds like a two accounting/finance types hooking up for the first time. It’s nothing major, just testing the motion in the ocean. But if you go by the Accounting Today article from last year, there doesn’t appear to be anything “trial” about it.

Anyway, Boyd reports that Frost managing partner Dan Peregrin told him that a ‘culture clash’ led to the break up and that, “There is a lot of [issues] right now in [Chinese reverse mortgage] practice area and we just felt it would be smarter to wish them luck and stick to our practice areas.”

Right. The old, “it’s not you, it’s me” routine. But there’s more! Over at Citron Research, it’s not entirely clear just what is going on:

If you call Frost today in Arkansas, they answer “Frost & Co” and say they’re no longer associated with Frazer. Citron spoke to managing partner Dan Peregrin and twice he told us that the two firms have gone their own way. ….but if you call Frazer, they answer “Frazer Frost” and in a brief conversation with Susan Woo, the RINO auditor, she told Citron that Frazer Frost is still an operating entity.

Really? If you go to the Frazer Frost website, you see a homepage with no content in the about us section.

Which is quite true. This is all very strange/sad/pathetic because everyone else seems to be aware of the situation. It’s like Frazer doesn’t know they’ve been dumped and are just going along like everything is find and dandy.

Could someone let them down gently?

News From Auditorville [Financial Investigator/Roddy Boyd]
Dude! Where’s My Auditor?? The Curious Case of Frazer Frost [Citro Research]

CFOs

The CFO That Was ‘Exhausted’ From Defending Obama Lost Her Job

Caleb Newquist
November 24, 2010

Remember? She was thisclose to living on franks and beans.

And now she’s even closer to the mystery meat reality because she has been laid off by the nonprofit for whom she worked:

Velma Hart, the chief financial officer for Am Vets, a veteran services organization based in Maryland, said Monday in an interview with CNBC that she was laid off as part of the nonprofit’s effort to cut expenses.

“I want to focus on the positive and be optimistic,” said Hart, who lives in Upper Marlboro, Md. “And assume that somehow things will work out, that there’s an opportunity out there with Velma’s name on it that’s right around the corner.”

A positive outlook, we like this gal. We’re sure you’ll be back to the corner office in no time. One word of advice though when you’re in the hot dog aisle – Hebrew National is not kosher, not matter what the package says.

Velma Hart Laid Off: Woman Who Told Obama Of Financial Fears Loses Her Job [HuffPo via DI]

Chris Van Hollen Isn’t Buying the “Tax Cuts Create Jobs” Story

Caleb Newquist
November 24, 2010

In case you needed another sign that we are heading full speed towards a stalemate on tax policy, the Representative from Maryland would like to be recognized for calling BS on the popular Republican rhetoric:

“It’s clear that the tax cuts for the folks at the very top have not created any jobs. After all, we’ve had them in place now for more than eight years, and we know what the jobs situation is,” Van Hollen said during an interview Monday on MSNBC.

“The notion that you’ve got to continue them in order to somehow boost the economy, when those are in place right now and we have a lot of people unemployed, is a clear indication that they are not a big job creator.”

Eric Cantor’s rebuttal will sound similar to this:

“Taxes shouldn’t be going up on anybody right now.”

[…]

“This election … was really the American people saying they are tired of the lack of results in Washington,” he said. “They want to see more jobs for more Americans. They want to see us … cut government spending, rein in the size of government so we can get this economy growing again. That was the prescription, that was the mandate that came from the people.”

So there’s no middle ground to be found here, guys? No chance you can put down the ideological rhetoric for the sake of, ya know, screwing the American people?

Van Hollen: Tax cuts for wealthy ‘not a big job creator’ [The Hill]

Career Center

Stop Worrying About Things You Can’t Control

GoingConcern
November 23, 2010

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

The first person you have to manage every day is you. You want to be in a strong position at work. You want to take charge of your role in every relationship with every boss. It’s just that there are so many factors beyond your control at work.

I’ve done hundreds of focus groups with thousands of people around one very simple question: What gets in the way of your success at work? Like clockwork, nine out of 10 responses are factors that are totally beyond the control of the individual.

What gets in the way of your success?

• Company policies, rules, regulations, corporate culture, standard operating procedures
• The way things have always been done around here.
• There is too much work and not enough time.
• There are too many low-priority activities that take me away from my most important tasks and responsibilities.
• There is a lot of conflict between and among employees, which creates a stressful, negative mood.
• Resources are limited and sometimes I don’t have the people, materials, and tools that I need to do the job.
• There is no clear chain of command in this organization.
• I answer to too many different people.
• My various bosses each have different standards of performance and conduct.
• My various bosses each tell me conflicting things about what should take priority.
• My various bosses each tell me conflicting things about rules and policies.
• Some bosses yell and scream and make things difficult.
• Sometimes bosses don’t make time for me one-on-one, some bosses don’t make expectations clear, and some don’t keep track of performance.

Sound familiar? There are so many factors beyond your control.

But you control you. You control your own thoughts, words, and actions. You control your attitude, commitment, time, effort, and your ideas. You are responsible for playing your role to the best of your ability every day at work. So be powerful. Focus on what you can control: You.

First, make sure that the first person you are managing every day is you. Make sure you are taking good care of you outside of work so that you are bringing your very best to work every day. Arrive a little early. Stay a little late.

And while you are at work, you need to be all about the work. Your work, that is. Focus on playing the role assigned to you before you ever try to reach beyond that role. Focus on your tasks, your responsibilities, your projects. Focus on doing them very well, very fast, all day long.

CFOs

CFOs Are More Optimistic About Business Now That the Democrats Don’t Control the House

Caleb Newquist
November 23, 2010

Yet the majority of these CFOs don’t believe that the federal government’s financial policy has had any effect on their business.

So does that mean CFOs are indifferent about which party is in actually in power but more generally speaking, Republicans give them the warm fuzzies while Dems give them the heebie jeebies?

Despite the fact that more than 70 percent of chief financial officers (CFOs) at Deloitte’s annual CFO Vision conference earlier this month believe current government financial policy has either had no effect or negatively impacted their business, the tide is turning toward a more positive outlook. A majority (59 percent) of the same group of CFOs expect the recent Congressional midterm elections to have a positive impact on their industry.

Maybe we’re a little slow (especially this week) but Sandy Cockrell (he introduced us to the “bathtub recovery“) attempts to clarify:

“CFOs are confident that they can pull the levers within their own companies to do their jobs, but they are most worried about external issues involving economic recovery and regulations,” said Sanford Cockrell III, national managing partner of Deloitte’s U.S. CFO Program. “The biggest risk they see is a prolonged, stagnant recovery. Industries are also concerned about too much government intervention. If the employment picture does not also improve and if general pessimism continues to rise, we would expect pessimism to start having a larger impact on companies’ earnings and investment expectations.”

Okay so 70% of the CFOs polled “believe current government financial policy has either had no effect or negatively impacted their business,” yet they still fear government intervention? And if what Cockrell is saying rings true with the majority of CFOs polled, the second John Boehner holds the gavel as the new Speaker of the House, the employment picture may slowly begin turn around? Do we have that right? Really, finance chiefs of America? That’s what you’re pinning your hopes on?

Are they all confused or did Deloitte just throw together a poorly designed poll? We’re stumped but if you’ve got the time and energy, we’ll entertain some theories.

CPA Exam

Top Five Resources For CPA Exam Candidates

Adrienne Gonzalez
November 23, 2010

Since I’m sick of writing about 2011 CPA exam changes and none of you asked any CPA exam questions this week, I’ve decided to be nice and offer you five excellent resources for CPA exam candidates, ranked in no particular order of importance.

CPAnet: The CPAnet forums offer a sense of community, suggestions and that all-too-important sense that you are not alone on your journey. Get tips on passing tricky parts, share your misery or get a kick out of helping other candidates by sharing your knowledge. The forums are a must for any candidate wishing to connect with others on the CPA exam adventure.

Twitter: Connecting with other CPA exam candidates and sources of CPA exam information (like @NASBA) can be incredibly useful. Follow the #CPAexam hashtag for news and views on all things CPA exam.

The AICPA: The AICPA has revamped its website and put together a comprehensive collection of CPA exam information, extensive tutorials and plenty of FAQs for your reading pleasure so you better be using them. Their “Become a CPA” section is jam-packed with useful info for international candidates, students interested in the CPA career path along with salary and career info.

NASBAtools: Access NASBA’s Accounting Licensing Library or use CredentialNet to do all the applying for you so you can focus on taking the exam and not worry about being buried in four pounds of paperwork. You can also find more information on licensure from NASBA’s website here.

Me: Wow, what a narcissist right?! In all seriousness, if you aren’t sending in your CPA exam questions or reading previous columns we’ve done on the exam covering everything from simulations to time management, you aren’t using the resources correctly. I don’t write for my own good, I do it so you guys can be informed and prepared for what’s ahead so do me the favor of not making me feel like I’m writing to a wall.

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