Going Concern

News

Law-Abiding Porn Enthusiasts in Utah Dealt a Blow

Caleb Newquist
October 13, 2010

“The Supreme Court won’t stop Utah from enacting a 10 percent tax on everything sold by adult-oriented businesses to pay for sex-offender treatment.” [On the Money/The Hill]

News

Meet Hans Hoogervorst, Your Next IASB Chairman

Caleb Newquist
October 13, 2010

This is the man that is going to make one high-quality set of global accounting standards a reality.

Related: The Wall St. Journal discovers that global accounting rules have been politicized. WHO KNEW?!?

The non-accountant at the IASB [FT Alphaville]
The Politicization of Global Accounting [WJS]

CFOs

Mermaid Greeters, Awesome Party Favors Potentially at Risk as Tyco Names Outsider as New CFO

Caleb Newquist
October 13, 2010

This past summer we learned that Tyco was still throwing epic parties, despite the best efforts of rank and file accountant Jeff Weist, who couldn’t fathom how scantily-clad mermaids, pirates, wenches, a tattoo artist, fire breather, among other things were legitimate business expenses.

Jeff claimed in a lawsuit that he was fired, more or less, for his integrity and trying to keep Tyco out of trouble, again.

Fast-forward to present day and Christopher Coughlin is retiring as Tyco’s CFO. Rather than promote someone from the inside, presumably letting the good times continue (tone at the top is everything, yo know), the company has appointed Eastman Kodak CFO Frank Sklarsky to take over effective December 1.

Now, if you’re a Tyco employee that happens to be on a regular on these legendary ragers, you’ve got to be concerned. Years of debauchery in exotic locales could be coming to an abrupt halt (right before the holidays!) if the transition doesn’t go right.

However, there is a ray of hope, “Coughlin, 58, who has been Tyco chief financial officer since 2005, will advise the company on some projects until his retirement in 2011.”

So it appears that Chris will have to explain “how we do things at Tyco” to Frank before he hangs it up. Judging by how things have gone at Kodak for the last few years, Sklarsky is probably thrilled to be out of there and maybe willing to play ball the Tyco way. Think of the mermaids, Frank.

Tyco Int’l hires CFO away from Kodak [Reuters]

Deloitte

Deloitte’s Sharon Allen Never Misses Date Night, Discovered Early on That She Wasn’t Meant to be a Car Hop

Caleb Newquist
October 12, 2010

The L.A. Times ran a brief sit-down with Sharon Allen, the Deloitte Board Chairman (her preferred term) over the weekend and it has the typical clichéd whathaveyous about her background – education is important; her great-grandmother was an early role ght-talker, values are important, yada yada yada.

Anyway, despite those snoozy details, there are a few interesting bits to share including that she doesn’t live in New York (gasp), everyone in her entourage is in a different city and some profound insight into differences between her home state – Idaho – and her current state:

The former Midwesterner chooses to live in Pasadena instead of New York, where Deloitte maintains its headquarters. “California is quite different when you think that the whole state of Idaho has [1.5] million people,” Allen said [WOW!]. She’s lived in Southern California for years. Before being elected chairman, Allen was based in Los Angeles as Deloitte’s managing partner for the Pacific Southwest region. Technology and careful coordination allow Allen and other members of her team to live across the map: Her executive assistant is in Portland, Ore.; her chief of staff lives in New York; and her speechwriter is in Charlotte, N.C.

For now, let’s just say for the sake of argument that the head of the largest professional services firm on Earth can live somewhere other than New York. We realized that for a lot of you this is contrary to everything you stand for but apparently Deloitte is pulling it off.

As for her childhood, Sharon gave the more physical labor intensive and service industry path a shot but soon discovered that agriculture nor a career on roller skates were in her future:

She worked for a time on the farm as a kid and then as a car hop in high school, but said she lacked talent at both. “I learned very early that I wasn’t very good on the farm,” she said. “And as a car hop, I dumped an entire tray of soft drinks into someone’s car once.”

As for how she got hooked on accounting, it was like smack for her. One taste was all it took:

[H]er roommate was an accounting major and talked her into dipping a toe into the business world. “I was hooked from the time I took the first class,” she said. She switched her major to accounting soon after.

And she managed to resist the 1970s accounting firm boys’ club:

Allen was often the lone female in her accounting courses. The trend continued once she started at Touche Ross, a predecessor to Deloitte. Allen turned it to her advantage. “People found a way to recognize and notice me,” she said. “While being a woman in a predominantly male profession early in my career, it would have been easy to adjust my style and focus on doing stuff like the men did. I learned I could be successful by doing it my own way.”

Without more details, it’s difficult to determine what she means by “doing it my way.” It’s unlikely that they were asking her to pee standing up. Or that they expected her to go bald, like some people.

Now that she’s a bigwig at a Big 4 firm that has to jet all over the world doing…things, you might think it would be easy for her to forget where she came from. NOPE! No matter where she is, Sharon is always back in SoCal for Friday date night to make sure the man of the house isn’t just lying around, letting himself go while she’s out moving and shaking:

Friday date nights are sacred. No matter where Allen is in the world, she places top priority on flying home every week to spend time with her husband, Rich (they’ve been married for 38 years), who was also her high school sweetheart.

In other words, she’s heading back home to ensure that Richard chases off the freeloading friends and babes that are hanging out at the manse all week. Or maybe it’s love. Either way, it sounds like she runs a tight ship.

And no doubt, that obsession/love translated into something that helped SA become the highest ranking woman at a Big 4 firm. An impressive feat no matter where you stand. But frankly, from Deloitte’s perspective, she’s the most visible leader that’s not pulling a Costanza. You can’t put a price on that.

Accounting for her success [Los Angeles Times]

Audit

It’s Not Impossible To Make Money on Small Audits

GoingConcern
October 12, 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.

Most small firm practitioners can offer lots of answers as to why it is difficult to profit from small audits. Ever-changing professional standards, increasing quality control requirements, using standard “one-size-fits-all” audit documentation and increasing legal liability are a few of the common answers. The problem is that knowing the answer doesn’t solve the problem!

Maybe we need to change the question to solve the problem. A better question may be, “What changes do we need to make in our audit practices to profit from small audits?” Answer this question correctly and we solve a major problem!

Here are changes in audit practices some smaller CPA firms are considering:

• Developing the technical and leadership abilities of engagement leaders is at the top of the list. Recognizing this takes time and money, small firms are making increasing investments in training and consultations to expand the knowledge resource base of their leaders and the firm. Making sure leaders are technically current in all professional standards affecting auditing engagements is a first step. Teaching leaders to pass their knowledge on to all assistants is the second.

• Designing firm policies and procedures within existing professional standards that provide reasonable assurance audited financial statements are not misstated. While we’d like to achieve absolute assurance the financial statements are not misstated, we have to assume some risk they may contain misstatements. In short, we have to give up some of our traditional approaches to audits in exchange for uniquely tailored audit strategies designed to gather the minimum amount of evidence necessary to verify relevant financial statement assertions. Gathering the minimum required evidence in the most efficient ways results in maximum profits!

• Creating proprietary audit documentation packages by eliminating or modifying documentation purchased from major publishers. Extensive audit documentation is not a substitute for the knowledge of staff personnel! We cannot afford to complete practice aids and other documentation containing everything we need to know on every engagement, particularly on small audits. Many small firms are realizing they can modify their quality control documents to permit engagement leaders to tailor documentation on every audit. Using major publisher’s practice aids for reference is the most any firm should do on small audits. When we know the requirements of professional standards, it isn’t difficult to tailor or create basic practice aids to guide small audit performance.

These are just a few of the small audit changes CPA firms must consider to increase profits. I’ve designed my Small Audit Series of live and on-demand webcasts to provide holistic solutions that will enable practitioners to make more money on small audits. You can obtain over 300 pages of instructional text materials and illustrative practice aids designed for CPE credit on the left sidebar of our website, www.cpafirmsupport.com. Don’t be left behind! Small audits can generate BIG profits!

Salaries

Making Sense of Robert Half’s 2011 Salary Guide

Caleb Newquist
October 12, 2010

Robert Half rolled out its annual salary guide today (available for download here) and they’re saying that “compensation for accounting and finance professionals should see commensurate gains” with the “slight uptick in financial hiring,” that RH predicted last month.

You could interpret this as exciting news since “slight uptick” beats the hell out of the consistent “disappointing outlook” that we’ve seen over the ars.

Anyway, Roberto reports that for most positions, salaries rose anywhere from 1% to 3% but if you’re the type to sell out to the highest bidder (you know who you are) you’ll be most interested in the following:

• Senior business analysts are expected to see the largest boost in base pay in 2011, with their average starting salary rising 5.0 percent to the range of $66,500 to $85,500.

• Projected base pay for tax accounting managers at midsize companies ($25 million to $250 million in sales) is $69,500 to $92,500, up 4.9 percent.

• Starting salaries for financial analysis managers at both large (more than $250 million in sales) and midsize companies are predicted to climb 4.8 percent; senior financial analysts at midsize companies are predicted to see their base compensation rise to $60,000 to $78,000, a 4.7 percent increase.

• Senior compliance analysts at small companies (up to $25 million in sales) are anticipated to receive starting salary offers between $58,750 and $75,250, a 4.1 percent increase.

• Average starting salaries for tax services senior managers and directors as well as senior tax accountants at midsize public accounting firms ($25 million to $250 million in sales) are expected to climb 3.9 percent in the year ahead.

• Base pay for senior auditors at midsize public accounting firms is expected to range between $62,000 and $81,750, up 3.8 percent over 2010 levels.

• Within financial services, compliance managers can anticipate a 4.4 percent gain in base pay, to a range of $64,500 to $89,000.

Emphasis is Bob’s. What do these numbers mean? Honestly, not much for anyone that is happy with their current job situation. However, since compensation news season has more or less ended, those that are not happy with the news they got this year will be looking to the hot positions. A little bit of our own digging and impressions are as follows:

Corporate Accounting
Mining through the report, you’ll be hard-pressed to find many surprises. If you’re looking for a Corporate Accounting gig, something with “Controller,” “Director” or “Compliance” in the title is going to have some of the highest salaries.

If you jump down to the rank and file you’ll find that if you’re a tax, IT or audit maven, then you’re likely to do better than your average humdrum general/cost accountant.

Likewise, an “analyst” of any stripe will have a little more earning power than your average non-analyst, although “Financial Analysts” saw a larger bump in salary than its fellow non-financial analysts.

Public Accounting
Salaries for tax, audit and “management services” are surprisingly tight with audit on the low end followed by MS and then tax. This is consistent across all levels (i.e. associate, senior, manager, senior manager/director).

Also noteworthy is that public accounting salaries keeps pace with the in-house gigs at their relative corporate ladder levels. For example, an audit manager at a “Large Firm” makes only $4k less than a Internal Audit Manager at a “Large Company” and actually does better than many analyst positions at the “manager” level.

In other words, if you’re considering a lateral move, DON’T. You likely won’t make more money and you may end up making less. If you’re dying for changing, this of course means that you’ll have to find your way into a position that is a step above your current job to get a significant boost in salary.

You could argue that based on the data, this report at gives a lot of credence to the “Staying Until Manager” when it comes to salary and entry into a top-level position. As for practical experience, that’s a debate for another post. And based on our traffic numbers, accountants are all about salaries.

Robert Half Releases 2011 Guide to Accounting and Finance Salaries [PR Newswire]

Career Center

Aspiring CPA Wants to Know if Grad School GPA, CFE Will Overshadow Lackluster Undergrad GPA

Caleb Newquist
October 12, 2010

Back with another edition of “I need advice from a bunch of strange accountants,” a soon-to-be MSA grad is concerned about their low undergrad GPA. Will the Big 4 crush him out like a stale Parliament?

Have a question about your winding career road? Concerned about a recent pest problem and not sure how to handle it? Watching other companies bail on their new logos and wondering if you should do the same? Email us at advice@goingconcern.com and we’ll give you some better options than Helvetica.

Meanwhile, Back on cI graduated from college with a BA in business and have a 3.1 undergrad gpa. After working in a supply chain department for three years I left a low-level management position for a one year full-time MSA program. I will graduate next summer and I currently have a 3.9 gpa. Also, I recently passed the CFE exam, I will be CPA eligible in December, and I’m hoping to join BAP.

What advice can you give me for when talking to recruiters or attending job fairs this fall? Will firms look past my unimpressive undergrad gpa if I keep my grad gpa high? How do recruiters typically view candidates that are a few years out of undergrad and have little accounting work experience? Is there anything I can do to positively differentiate myself from students who are following the traditional 5-year accounting path? Will I have a shot with the Big 4? I really want to work in public accounting, but if I don’t get competitive offers from large firms I may stay in school and pursue an MBA.

Have we talked about grades in the past? Sigh. We’ll go over this again.

In this day and age, the Big 4 is being more choosey with their entry-level hires. They simply aren’t pulling hobos off the street, asking them to pick up a calculator and start solving client’s financial reporting and tax issues. That said, your low undergrad will likely put you at a disadvantage versus your fellow recruits, especially in the eyes of set-in-their-ways partners who look at grades as a measure of potential success within their firm (which only takes the best and brightest!).

Is it bullshit? In the opinion of the editor – yes. But that’s the dealio, so let’s move on.

Judging by your pending CFE credential, it sounds as though you could possibly be interested in forensics. If that is the case, this interest and your CFE – that your tradish 5-year grad won’t have – differentiates you from the pack. You know exactly what you want to do and you have tangible proof. USE THAT to stand out from the crowd. There may be a 23 year-old 4.0 wunderkind that has the firms drooling but they have not one iota about that person’s ambitions. You know exactly what you want. Make them understand why that will be an asset to them.

And what about your previous work experience combined with your graduate GPA? DWB says that can help you too:

Sounds like you had a successful stint in the corporate world once you graduated. One could also assume you found your legs; you have a good head on your shoulders moving up to a management role. Your recent work history and grades during the MSA program are more indicative of your abilities than what you did when you were 20.

The odds are still against you but you’ve got a shot. And if you really want to work in public accounting, don’t forget that the Big 4 is not the end all to be all. Grant Thornton just picked up Huron Consulting’s investigations practice which could be a good fit for you. Many of the other top ten firms (choose your list: Vault or IPA) out there will have forensics shops, so your public accounting aspirations can easily be realized. Get out there and make it happen.

CPA Exam

How Much Harder Is REG Going to Be in 2011?

Adrienne Gonzalez
October 12, 2010

Well we’ve reached the end of our 2011 wrap up series so here are FAR, AUD and BEC if you missed them.

Let’s skip the pleasantries and get right into what you’re dying to know, how bad is Regulation going to be next year?

Things they are a-changin’…but not much – The good news is that REG is hardly changing at all. After all, you can’t test international standards of federal taxation as globalization hasn’t completely taken over so don’t expect to see much different content-wise come 2011. You will see the new simulation problems and notice there are no longer written communications. But beyond the cosmetic changes, the actual content that makes up Regulation will be quite similar to what’s already being tested. Of course, that is true across the board as a good 90 – 95% of what is being tested will still be tested next year if my gut feeling is still any good. You guys have to remember – next time you are freaking out about new exam material – that CPA exam questions are difficult to develop and the AICPA Board of Examiners isn’t about to trash all their useful questions just to start testing you on the international stuff.

Tax year overlap – One thing to keep in mind when taking REG – in the first two windows of the year you can be tested on both current and former tax year numbers. This means if you take it in January of 2011 you may see 2010 tax numbers or you may see 2009 or a mix of both. Chances are the newer numbers will not make their way to the exam (hey, the AICPA BoE is super busy getting those IFRS questions in working order!) but just something to be aware of. That doesn’t mean you have to memorize tons of different tax tables but it would be wise to stay up on tax changes in the year ahead as many tax rates are still in the air at the point many review courses are rushing to go to print.

Who said anything about ethics? – Ethics and professional responsibility are moved out of REG and put back into AUD except for those pertaining to tax practice and will still be tested about the same as 2010: 15-20% versus 15-19% in 2011. Business law will carry less weight, making up 17-21% of all questions. Federal tax procedures get a boost from 8-12% in 2010 to 11-15% in 2011. Great news for those of you who really do not like taxes, federal taxation of entities gets a downgrade from 22-28% to 18-24%. Individual tax stays about the same, going from 12-18% to 13-19%. Don’t expect much of a break, it is Regulation after all.

Other than that, REG won’t see much of a change. Business structure (partnerships, et al.) has been moved out of BEC (rightfully so) and will only be tested in REG but you already know most of that stuff if you have passed either section in 2010.

If you can, I advise holding off on Regulation until the last two windows of the year so you have a better chance of getting only one year of tax numbers (the AICPA will generally test the previous year’s tax numbers) but if you are looking for a good one to hold off on taking until next year ahead of the CBT-e changes, REG would definitely be it.

Good luck and we’ll see you on Friday!

Oh and in case you didn’t get the memo, if you have a CPA exam question for us (for example, which part can I procrastinate on until the very end of 2011?, Is farting allowed at Prometric?, How can I tell my girlfriend to leave me the hell alone and let me study? etc etc), do get in touch.

ANR

Accounting News Roundup: Dutch Minister Replacing Tweedie as IASB Chair; REMINDER: Nonprofit Deadline Is Friday; Panel Recommends Separate Board for “Little GAAP” | 10.12.10

Caleb Newquist

October 12, 2010

Former Dutch minister picked as IASB chairman [FT]
“The head of the Dutch financial markets regulator has been given the pojob of running the body that sets the accounting rules followed in the European Union and an increasing number of other countries.

Hans Hoogervorst, a former Dutch finance minister, was on Tuesday named chairman of the London-based International Accounting Standards Board, which sets the IFRS accounting norms.

He will take on the job at the end of June 2011, succeeding Sir David Tweedie, the Scot who has occupied the post for a decade.

Mr Hoogervorst, chairman of the executive board of the Netherlands Authority for the Financial Markets, is not an accountant.”

I Can Afford Higher Taxes. But They’ll Make Me Work Less. [NYT]
Wherein we discover one more example of how tax cuts (or lack thereof) will affect someone.

Gap scraps new logo after online outcry [Reuters]
“GAP Inc scrapped a new logo on Monday just a week after launching it following an “outpouring of comments” online and from customers in support of the original blue box design it’s had for more than 20 years.

Gap rolled out an updated version of the logo last Monday on its website and planned to include it in its holiday marketing, a spokeswoman said.

But the company saw more than 2,000 comments on its Facebook page on the issue, with many people railing against the new logo and calling for a return to the old.”

Friday Is the Drop-Dead Date for Small Charities Wanting to Stay Tax-Exempt [Tax Update Blog]
You’ve been warned.

One Step Closer to Little GAAP [CFO]
“A blue-ribbon panel has recommended that a new set of accounting standards be drawn up for private companies based on U.S. generally accepted accounting principles. The panel also recommended that a private-company rulemaking board be established, separate from the Financial Accounting Standards Board, which currently writes and revises U.S. GAAP.

The details of how the rules will be developed — and how FASB and its parent organization, the Financial Accounting Foundation (FAF), will be involved in the process — will be outlined in a report issued in December, said panel chair Rick Anderson, chairman and CEO of accounting firm Moss Adams, during the panel’s fourth and final public meeting on Friday. The final product, often dubbed “little GAAP,” will be a pared-down version of the full set of rules, requiring fewer disclosures and less-detailed measurements of some assets and liabilities.”

Wal-Mart Lands Agreement to Sell iPad [WSJ]
“Wal-Mart Stores Inc. said it will start selling Apple Inc.’s iPad on Friday at hundreds of stores throughout the U.S.

Wal-Mart landed the tablet computer a little later than two of its largest retail rivals: Best Buy Co., which has been selling the iPad since its launch in April, and Target Corp., which began carrying it this month.

The Bentonville, Ark., retail giant said that what it lacked in timeliness it will make up for in sales heft. It vowed to slowly ramp up the number of U.S. stores carrying the iPad to more than 2,300 by the height of the holiday season in mid-November.

There will also be no Wal-Mart “rollback” price cut on the iPad: The tablets will sell for Apple’s suggested retail price, which starts at $499 for the cheapest version with 16 gigabytes of storage and wireless internet access but no 3G mobile connection.”

Quote of the Day

Iowa Pastor Practically Begging the IRS to Sue Him, Consume His Life for Years to Come

Caleb Newquist

October 12, 2010

“I’m tired of pastors submitting to this tyranny — and I’m expecting to try to get the IRS to sue us so that we can take it all the way to the Supreme Court and restore freedom in America’s pulpits.”

~ Pastor Cary Gordon, of Cornerstone World Outreach in Sioux City, Iowa, has some strange ambitions.

KPMG

Bedbug Scare at KPMG’s New York Office?

Caleb Newquist

October 11, 2010

Summer of 2010 had its share of gripping stories: Islamic community centers, “pink-faced halfwits” whipping the masses into a frenzy, Lindsey Lohan.

All of these stories grabbed ahold of American’s two-second attention span far longer than you would expect. But the thing that really transfixed the nation was a tiny insect that was, as one time, merely a fun game for kids to play so their parents could smoke grass in the basement. BEDBUGS.

With all the bedbug hysteria that’s been going on, we’re surprised that we haven’t ANY news about accounting firms having their offices invaded with bedbugs. Finally, we’ve gotten word of what probably amounts to just a scare at KPMG in New York.

We were tipped off this morning to the news that there was a “bed bug issue” over the weekend at one of the KPMG’s offices in New York. We asked around and discovered that the “issue” was at the 345 Park location and that “only one bedbug” was found. Everything that has happened since then have been “precautionary measures.” This no doubt involved scores of people crawling around with magnifying glasses until the bedbug dogs could be called in.

A message and voicemail left with KPMG spokesman Dan Ginsburg had not been returned at the time of posting.

Of course, the real concern is that if there’s one bedbug, there are likely more. And in New York, there have been no shortage of bedbug cases including at the nearby MetLife Building. So far nothing we’ve heard indicates that it’s a full-blown infestation over at 345 Park but do get in touch if you hear more.

Deloitte

Jim Quigley Is Still Talking About Deloitte’s Hiring Bonanza, Last Year’s BusinessWeek List

Caleb Newquist

October 11, 2010

After his appearance on Fox Business, Quigs plugged himself in for 24 hours and then hopped over to Bloomberg to talk about the disappointing job numbers from last week but that at Deloitte, things are just swell.

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