It's already cost PwC China as much as two-thirds of their revenue due to regulatory punishments and reputational fallout, and now the collapse of long-time audit client Evergrande in 2021…
Yesterday we received a news release from a communications firm working for a group called GPTZero. Now you should know that we receive probably a hundred or more news releases…
We've got another RIF at KPMG, a consulting cull that went down yesterday (that's Wednesday the 29th for those of you reading this a week from now). Let's start with…
We received this on the tipline a few days ago, not much info but it's still a pretty decent happening so let's roll with it: CBIZ suspends employee stock purchase…
It's already cost PwC China as much as two-thirds of their revenue due to regulatory punishments and reputational fallout, and now the collapse of long-time audit client Evergrande in 2021…
Hey, you. Got a little news to get you started on this quiet Monday. In this news briefEY Settles a Matter That's Been Dragging OutThe Failed Client That Could Cost…
Footnotes is a collection of stories from around the accounting profession curated by actual humans and published every Friday at 5pm Eastern. While you're here, subscribe to our newsletter to…
While people outside of the accounting profession continue to smugly insist that accountants will be out of work in 12 months 18 months two years five years any day now…
Yesterday we received a news release from a communications firm working for a group called GPTZero. Now you should know that we receive probably a hundred or more news releases…
Did you happen to see this WSJ article from the other day? In "In This Critical Part of Audits, the Accountant’s Role Is Shrinking Fast," we're given a look into…
While staff in tax at EY US will soon be spending more time with their flesh-based colleagues due to a return-to-office mandate that requires them in the office for an…
Commence to fantasizing about what you'll do with all that glorious free time when you lose your job to AI in 12-18 months because that's the confident prediction made by…
Struggling to Find Remote Accounting or Tax Talent? We’ve Got You Covered.If your firm or internal team is having a tough time sourcing qualified remote tax and accounting professionals, you're…
Struggling to Find Remote Accounting or Tax Talent? We’ve Got You Covered.If your firm or internal team is having a tough time sourcing qualified remote tax and accounting professionals, you're…
Struggling to Find Remote Accounting or Tax Talent? We’ve Got You Covered.If your firm or internal team is having a tough time sourcing qualified remote tax and accounting professionals, you're…
Struggling to Find Remote Accounting or Tax Talent? We’ve Got You Covered.If your firm or internal team is having a tough time sourcing qualified remote tax and accounting professionals, you're…
Struggling to Find Remote Accounting Talent? We’ve Got You Covered. If your firm or internal team is having a tough time sourcing qualified remote tax and accounting professionals, you're not…
For tax friends following Kwong case on Covid refunds, here is the latest from IRS. A limited concession on the 2020 deadlines but the big questions about 2020-23 remain.
Recruiting firm Brewer Morris has released its 2025 US CPA salary guide and should you want to read the whole thing you can request it from them here. Perhaps you,…
Saw this on the bird app yesterday and thought its message would be worth passing along what with 20 days remaining until April 15 and nerves as strained as ever…
Ed. note: An earlier version of this article's headline stated the sheriff is investigating. The Alexander County Sheriff's Office informed us they are not investigating, only fielding calls from the…
Boston Business Journal wrote an article about Deloitte's new office in Boston and for some reason they chose to lead with this: You won’t find trash cans at the desks…
We realize the decision to run maintenance on IRS systems likely isn't made by anyone who understands deadlines but surely someone who does could inform the IT department of these…
Looking to staff up for a season or hire a freelancer for a project? Accountingfly is ready to partner with you! Gain full access to a pool of highly skilled…
Every accounting firm struggles with project management, with smaller practices that are rapidly expanding taking the brunt of the damage. As your firm adds new clients, takes on more work,…
Email: The word itself sounds innocent, doesn't it? Kind of like "snail mail," but faster, sleeker, and without the slimy trail. But don't be fooled—email is secretly a sinister beast,…
Business growth is always a high priority for accounting firms, especially small-to-midsize practices. Take care, though, because growth can be a double-edged sword. If your firm expands too quickly or…
President Obama is darn sure that a deal will get made on the expiring tax cuts before the end of the year despite the ‘logjam’ between the two political parties.
He’s confident because hard-working families need it, the economy is fragile yada yada yada and now that Tim Geithner and OMB Director Jack Lew are on the case, this thing is a shoe-in.
While the next Speaker of the House, John Boehner, is not quite on the same page as the President, he’s pretty much in the same chapter:
“Republicans made the point that stopping all the looming tax hikes and cutting spending would, in fact, create jobs and get the economy moving again,” said Representative John Boehner, who will become Speaker of the House next year.
“We’re looking forward to the conversation with the White House over extending all of the current rates, and I remain optimistic,” he said.
Well, as close as to the two will likely get in public anyway. However, this a slightly more optimistic stance than what some people have for Nancy Pelosi, who would, presumably, rather give up her Armani suits than hand the wealthy a tax cut:
“There is some thought that the last thing that Nancy Pelosi wants to do on her way out of the Speaker’s office is to have Congress approve an extension for tax cuts for the wealthy,” said Brian Gardner, an analyst for investors at Keefe, Bruyette and Woods.
~ Update includes clarification of partner’s employment status and statements from accused’s attorneys via MarketWatch.
~ Update at circa 7:20 pm ET includes statement from Deloitte
If you thought all this insider trading fun was just for hedge funds you would be sorely mistaken. Deloitte seems to have another case of a partner who can’t seem to control himself when he gets some insider info. Earlier this year, former Deloitte Vice Chairman Tom Fla > shelled out $1.1 million to settle charges with the SEC.
This time around, it’s still a family affair – husband, wife, wife’s sister and brother-in-law job – and it went overseas:
The Securities and Exchange Commission today charged a former Deloitte Tax LLP partner and his wife with repeatedly leaking confidential merger and acquisition information to family members overseas in a multi-million dollar insider trading scheme.
The SEC alleges that Arnold McClellan and his wife Annabel, who live in San Francisco, provided advance notice of at least seven confidential acquisitions planned by Deloitte’s clients to Annabel’s sister and brother-in-law in London. After receiving the illegal tips, the brother-in-law took financial positions in U.S. companies that were targets of acquisitions by Arnold McClellan’s clients. His subsequent trades were closely timed with telephone calls between Annabel McClellan and her sister, and with in-person visits with the McClellans. Their insider trading reaped illegal profits of approximately $3 million in U.S. dollars, half of which was to be funneled back to Annabel McClellan.
The UK Financial Services Authority (FSA) has announced charges against the two relatives — James and Miranda Sanders of London. The FSA also charged colleagues of James Sanders whom he tipped with the nonpublic information in the course of his work at his London-based derivatives firm. Sanders’s tippees and clients made approximately $20 million in U.S. dollars by trading on the inside information.
So not a bad haul. The kicker is, Annabel was also employed at Deloitte, working in the London, San Jose and San Francisco offices. The McClellans provided information to the Sanders on several companies including Kronos, Inc., aQuantive, Inc. and Getty Images.
The SEC brass gave their standard scolding. First, Enforcement Chief, Robert Khuzami, “The McClellans might have thought that they could conceal their illegal scheme by having close relatives make illegal trades offshore. They were wrong.”
And San Fran Director Marc Fagel, “Deloitte and its clients entrusted Arnold McClellan with highly confidential information. Along with his wife, he abused that trust and used high-placed access to corporate secrets for the couple’s own benefit and their family’s enrichment.”
But the real story here is the second instance of insider trading charges against a Deloitte partner this year. The firm successfully sued Tom Flanagan back in January but you have to wonder if there isn’t some flaw with the firm’s internal oversight. Not long after the Flanagan suit, we reported on the 475 reprimands for internal noncompliance in 2009. Those reprimands did not mention insider trading specifically but over 200 of them were related to independence violations. Pattern? You can weigh in below.
Anyone with any knowledge on this story is invited to get in touch with us. as it is not clear if there has been any internal repercussions yet. Messages (including voicemail, carrier pigeon and morse code) left with Deloitte have not been returned (see statement below).
Lawyers for Arnold McClellan denied charges Tuesday by the Securities and Exchange Commission that the former Deloitte Tax LLP partner was involved in a big insider trading scheme. “Arnold McClellan denies the SEC’s claims and will vigorously contest them,” Elliot Peters and Christopher Kearney of Keker & Van Nest LLP said in a statement on behalf of McClellan. “He did not trade on insider information, and there will be no evidence that he passed along any confidential information to anyone.” McClellan “had no financial incentive to commit the actions alleged,” the lawyers added. “He is a conscientious, law-abiding professional with a 23-year unblemished track record of client service at Deloitte to prove it. We will see the SEC in court.”
And just to clarify, McClellan is no longer with Deloitte, leaving the firm in June of this year. Deloitte spokesman Jonathan Gandal emailed us the firm statement (see below) still hasn’t returned our call (busy day, right?) but managed to give a statement toand was quoted by Reuters, saying that he was “shocked and saddened” by the allegations and “If the allegations prove to be true, they would represent serious violations of our strict and regularly communicated confidentiality policies.”
UPDATE 2: Here is the full statement from Deloitte:
“We are shocked and saddened by these allegations against our former tax partner and members of his family. If the allegations prove to be true, they would represent serious violations of our strict and regularly communicated confidentiality policies. Deloitte is committed to safeguarding non-public client information and has cooperated with the SEC throughout its investigation. The SEC does not allege any wrongdoing by Deloitte in this unfortunate matter.”
Ahhh, outsourcing. Nothing like American jobs going overseas to whip up fury among the masses. The latest example, via yesterday’s Times, is accounting jobs going to Sri Lanka.
As this tiny island nation staggers back from a bloody, decades-long civil war, one of its brightest business prospects was born from a surprising side effect of that conflict. Many Sri Lankans, for various reasons, studied accounting in such numbers during the war that this nation of about 20 million people now has an estimated 10,000 certified accountants.
An additional 30,000 students are currently enrolled in accounting programs, according to the Sri Lankan Institute of Chartered Accountants. While that ratio is lower than in developed economies like the United States, it is much greater than in Sri Lanka’s neighboring outsourcing giant, India.
But if you think these jobs are just 10-key jockeys and plugging digits into tax returns, you would be wrong, wrong, wrong:
Offices in Sri Lanka are doing financial work for some of the world’s biggest companies, including the international bank HSBC and the insurer Aviva. And it is not simply payroll and bookkeeping. The outsourced work includes derivatives pricing and risk management for money managers and hedge funds, stock research for investment banks and underwriting for insurance companies.
Many developing countries have “one particular competency that they do better than anyone else,” said Duminda Ariyasinghe, an executive director at Sri Lanka’s Board of Investment. “Financial accounting is that door opener for us.”
So all that you put in to knowing derivative accounting inside and out? Yeah, someone in Sri Lanka has a similar level of understanding and naturally, the labor there comes cheap. Extremely cheap:
In the United States, the median annual wage for accountants and auditors in May 2008 was $59,430, according to the Bureau of Labor Statistics. Sri Lankan workers in the accounting profession receive an average annual pay package of $5,900, according to a 2010 survey by the Chartered Institute of Management Accountants.
Wages in Sri Lanka for financial outsourcing are about one-third less than in neighboring India, and hiring educated employees is easier in Sri Lanka, according to executives who do business in both countries.
Yes, that’s a savings of 90%. No, there’s not much you can do about it. Except discuss below.
On this, the final CPA exam testing day of 2010, I feel compelled to skip the advice column and launch straight into the rant. It’s finally over and here’s hoping you people will stop asking the same five questions about the 2011 exam over and over.
I don’t mean to offend anyone in particular so if you catch a feeling on this, it’s probably because I’m talking directly to you. You know who you are and I respectfully request you knock it the fuck off.
First, the misinformation surrounding the 2011 exam changes absolutely blows my mind. The AICPA announced these changes well in advance of the planned launch of CBT-e and I can’t speak for everyone but know that we here at Going Concern have covered just about every tiny detail of what’s ahead. Regardless, I still get my inbox blown up with the same simple questions, the answers to which may be found with a simple Google search or by checking out our previous posts on the subject. Information is everywhere, you’ve just got to get off your lazy ass and look for it.
I think you guys are forgetting that this is a professional examination and that you are allegedly professionals. Is it reasonable for professionals to work with financial statements being misinformed and confused by simple instructions? No. Is it reasonable for CPA exam candidates to have absolutely no idea what is happening in 2011? HELL NO.
The “OG” CPAs of the paper and pencil days laugh at candidates who have to take the computerized exam and for good reason, you guys can’t even figure out a simple change like CBT-e. People still seem to believe BEC will contain simulations in 2011 and for Christ’s sake, let’s all keep in mind that about 90 – 95% of what is being tested in 2010 will still be tested in 2011. Do you really think the AICPA Board of Examiners is going to trash all those wonderful questions they worked so hard to get? Please.
So while you guys are freaking out over changes that aren’t even going to happen, you could be studying current material and educating yourself on what’s new for next year. I’m shocked that so few of you know that the exam actually changes twice a year, every year anyway and that 2011 is really no different except for the fact that it is a bit larger a change than usual. It sickens me, actually, because I had so much more faith in you guys to go into the exam prepared and informed. Instead I continue to get the same 4 or 5 questions over and over and over and always walk away with the sense that you guys aren’t listening and unless it is handed to you, won’t go looking for the answers you need.
Seriously, knock it off. Now that 2011 is very nearly upon us, I expect ALL OF YOU to get off your asses, get to the Google and do some reading. It’s really not hard, the info is plastered all over the AICPA’s website as well as places like the CPAnet forums and various blogs strewn throughout the blogosphere.
You’re making the profession look bad, you know. How can accountants protect the public interest if they can’t even figure out a simple change to the CPA exam?
Side note: While I’m ranting about the 2011 exam, I should also throw in a few expletives meant specifically for the AICPA Board of Examiners for choosing to do this in the first place. WTF were you thinking?! We don’t even use IFRS and don’t know when we will, why the hell should we be so eager to test it now?!
Everyone’s favorite Two Minutes’ Hate from the healthcare reform legislation – the 1099 reporting requirement – managed to live to fight another day despite being as unpopular as the Democrats who originally got behind it (although don’t look at Nancy Pelosi).
The provision survived because of the complex politics of the Senate. Some lawmakers were reluctant to back repeal on Monday since the rule change would have been added to a popular food-safety law that is nearing approval, potentially jeopardizing its passage. In addition, dueling Democratic and Republican proposals allowed lawmakers to register their disapproval of the 1099 requirement whether the repeal passed or not.
In other words, everyone agrees that they hate this thing but they hate it in different ways. You see, it’s not enough to be against the 1099 requirement, it matters who gets the credit for being against so much that they actual introduced the proposal to do away with it.
Sigh. But it’s cool, the rule doesn’t actually go into effect until 2012, so blowing it off for another 12 months is totally an option. And a pretty realistic one, too.
Disintegration of the Big Four Audit Firms? As They Tell the House of Lords, “We Don’t See That on the Horizon” [Re:Balance]
Round 2 (previous comments here) from Jim Peterson, “The epitaph for the private delivery of audit services to the world’s large global companies was written in London on November 23.”
Democrats to Test Republican Mettle With Tax-Cut Vote [Bloomberg BusinessWeek]
Dems are feeling out the GOP this week with some “showdown votes” that may set the stage for many late nights in December. Ah, politics.
An Interview With WikiLeaks’ Julian Assange [Forbes]
A “major American bank” is next on the leaking block. Not sure if Vegas has handicapped this but Team Jehovah seems like an early favorite.
Google Is Said to Be Poised to Buy Groupon [DealBook]
All your cheap sushi and massages could belong to GOOG.
Former Quest Energy Exec Sentenced To 16 Years For Fraud [Dow Jones]
Former CFO David Grose received his sentence for three counts of wire fraud. Ouch.
MarcumStonefield Enhances Tax, Assurance Services and Quality Control with Key Appointments [PR Newswire]
MS appoints three to in-charge positions, “Nanette Miller has been named Partner-in-Charge of Assurance Services, Alan Griffith has been named Partner-in-Charge of Tax Services, and Michael Feinstein has been appointed head of Quality Control for all of MarcumStonefield’s offices in California and Hong Kong.”
Smart Year-End Tax Moves for Investors [WSJ]
FYI – just in case you don’t have the utmost confidence in the lame-o Congress.
Accountants are more adaptable than you think [AWEB UK]
Point.
Accountants are less adaptable than you think [AccMan]
Counterpoint.
Top 20 Inconvenient Career Truths [Forbes]
A favorite: “If you hate your job, it probably won’t get better with time. Sticking around because you’re afraid will only dig you deeper into the rut.” Also, “If you find yourself job-hopping and nothing ever satisfies you for any period of time, it’s time to look at yourself. Most likely, you’re part of the problem.”
Fay Vincent is making the suggestion that sports stars, like DJ, should be negotiating for shares of their respective teams.
My question is why sports figures are not taking steps to generate tax-favored income by bargaining to get ownership interests in their teams. Imagine how much better off old timers like Mickey Mantle and Roger Maris would have been if they had been able to obtain even tiny shares of the Yankees franchise in 1961. In today’s context, it is true enough that the tax rate on capital gains income may soon rise to 20%—but that’s still far below the rates levied on top income earners.
Since Vincent – a former entertainment lawyer – has been around the block with big-time earners, he might be on to something here, although maybe the Steinbrenners aren’t interested, being the shrewd business family that they are (George died in a year with no estate tax for crissakes). Since neither Jeets nor the Yanks are budging in the negotiations, this idea could work. It’ been floated in the Times so it’s not like this option is a huge secret. Make something happen, people.
By most accounts, Jeter wants to finish his career in New York and the man has been the franchise for over the last decade. Forget the cash, ask for shares and save on some taxes. It’s not complicated.
Shocking survey results out of PwC today as the firm announced that overworking staff increases turnover at law firms. If you can believe that.
There is a “strong correlation” between staff turnover and chargeable hours at law firms, according to PricewaterhouseCoopers.
Numbers released as part of their annual survey of the sector show that the top ten law firms have average turnover rates of 17-18%.
According to the accountancy firm, reducing turnover to less than 10% can reduce costs by £32,000 per equity partner.
In semi-ironic and related news, a bunch of bitter Big 4 employees finally decided over the Thanksgiving holiday that they would be leaving their respective firms because they are sick of the hours.
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.
Consumers with a bone to pick with the Internal Revenue Service have the opportunity to share their experiences. Originally designed as an IRS profile database, IRSDoghouse.com has evolved into a free and anonymous Web site where anyone can rate – negatively or positively – their personal and professional experiences with IRS employees.
The IRS certainly holds the tax-paying public to task and now is the time for practitioners and other tax-paying individuals to reward or bite back, according to the site’s creators. Ratings are based on dog bones, with a single dog bone rating as the least favorable; five dog bones is the best rating.
People share personal experiences and can post information about the IRS employee, including whether the employee was helpful, clueless, difficult to work with, or knowledgeable. Reviews allow for character descriptions and other details. In the characteristic section, one reviewer explained that this IRS employee has been a government employee too long. She was clueless, difficult to work with, and would be fired if she worked in the private sector. The IRS employee received one dog bone.
On the other hand, a positive review of five bones reported that the IRS employee was able to negotiate, was fair, helpful, intelligent, and interacted with him in a kind, courteous, and professional manner. This IRS employee demonstrated positive communication skills and a pleasant attitude. He was a pleasure to work with and gave the benefit of the doubt to the practitioner/taxpayer. He also allowed ample time to comply with requests. “This is one of the good guys in the IRS,” the rater said.
The Web site provides people with IRS complaints a safe and anonymous place to vent or to share feel-good stories. And, if people don’t wish to post any comments at all, they can still read about practitioners’ and other tax payer experiences to know what they might be up against.
The site is free to use and is monitored for extreme profanity, hateful comments, and threats, which are removed. The administrator of this site has the authority to remove any posting that is not deemed appropriate.
Welcome to the squelch-the-tryptophan-withdrawals-with-cyber-Monday edition of Accounting Career Conundrums. In today’s edition, a Big 4 manager is pret-tay sure he is underpaid. How can he broach the subject with a partner without causing major blowback?
Need career advice? Want gift ideas that will score some points with a boss in your life? Wondering where you can find an old PwC backpack? Email us at advice@goingconcern.com and we’ll sniff out a deal or a homeless person.
Back to our short-changed manager:
I was wondering if you could provide advice in how to determine if I am being underpaid and if I am how to go about asking for an increase? I am a 1st year Manager for a Big 4 firm in Kansas City. I have been with the same firm/office my entire career sans a 2 year secondment I completed in Dublin just in August. In addition, to having my CPA license I also hold the CFE certification and the CFA charter.
My feelings for asking for a raise are based on the additional certifications and knowing that my salary as a 1st year Manager is less than what 3rd year Sr. Associates were making in my office 2 plus years ago. I know the economy has changed during the subsequent 2 years but still feel like I am not fairly compensated. What advice do you propose? I am nervous about sharing my thoughts with my Partner as I am afraid of a potential backlash. Thanks in advance.
Dear Alphabet Soup,
Think you’re underpaid, huh? Seems to be theme around here. However, your situation is more unique than most so we’ll make a run at this.
First thing we noticed about your situation is that you’re a M1 which means you were recently promoted, which also mean you should have just received a better-than average raise. And we’re more than a little skeptical about your assertion that a SA3 is making more than you. That would have to mean that SAs are getting insanely good raises while you – the newly promoted manager – got an abysmal one; it seems unlikely. If this in fact the case, then you’ve had a serious string of bad luck.
As for determining whether or not you are underpaid, we suggest you speak to a professional recruiter in KC to find out whether or not your credentials and international experience or currently undervalued. If the recruiter takes a look at your résumé and starts drooling, you’ll know that he/she can earn a fat commission placing you somewhere else. If they shrug and say, “Look friend, you’re doing pretty well. But let me tell you about this great opportunity…” then your salary is probably fair.
When it comes to talking to a partner about this, be sure you’re speaking to someone you trust and just be honest. Make your case with facts. Don’t go speculating about what a SA3 is making because that turns the conversation to something that is out of your control. Highlight your credentials, international experience and why they bring value to the firm and your partner.
They’ve heard the “I’m underpaid” sob story a million times. You’ve got to prove to them that your case is an exception to the run-of-the-mill bellyaching.
Following our previous Doing It Wrong Twitter Case Studies, today we present you with a pretty common tweeter who can be found across any industry, not only our own precious accounting set: the chronic over-sharer.
The chronic over-sharer doesn’t understand that when Twitter asks “what are you doing?” it actually means “what are you doing or interested in that you think might be appropriate to share with the Internet community at large?” This means the over-sharer can mistake Twitter for a translator plugged directly into their own streaming consciousness as well as a diet journal, a livejournal, a teenage journal and a best friend who actually cares to hear what the over-sharer had for breakfast that morning.
The over-sharer doesn’t realize that most people – especially those in our somewhat small accounting niche – don’t care what they ate nor what they think if the thoughts are translated all hours of the day and come out mostly as angry gibberish and inflammatory nonsense. To the over-sharer, losing followers by the handful after each obnoxious tweet doesn’t mean anything, Twitter simply exists as an avenue for their consciousness. Like the audacity of sending out extensive Christmas letters each year to family members you haven’t spoken to in years, it takes a lot of guts to blitz Twitter with personal details while ignoring proper traditions of behavior. Remember, this is the accounting industry we’re talking about. While the over-sharer can be found in any niche, their behavior is especially noticeable in ours as we’re known for being a conservative lot.
No one is suggesting people can’t use Twitter to communicate or flaunt their personalities but there is a line and in our profession it’s important to follow that. You won’t have much luck snagging clients or getting hired if you’re using Twitter to blast coworkers or talk about your personal digestive issues.
Some tweeters get the balance just right, like Francine McKenna and Shane Eloe. See? You can be chatty – even snarky – but please refrain from telling the entire Internet about the consistency of your cat’s puke or about your super obnoxious senior whose head you’d like to chop off. It isn’t cute and you’re forgetting the Internet is forever. That means you might be able to delete the offending tweets once you realize you’ve been acting like an ass on Twitter but the damage to your reputation (or brand) can carry on long after the tweets have been zapped.
Just don’t do it. Keep it professional, people. Lively, conversational and a little personal but professional. Pretend like your boss, colleagues, and all former and future employers have your tweets streaming to their desktops at all hours of the day and remember: no one cares what you ate for lunch unless it’s food porn (SFW) and you happened to eat it with an accounting industry rockstar.
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President Obama is darn sure that a deal will get made on the expiring tax cuts before the end of the year despite the ‘logjam’ between the two political parties. 
Following our previous