Going Concern

Just in Case You Didn’t Think the PwC Rebranding Was Actually Happening

Caleb Newquist
September 24, 2010

This should quell any doubts.

This was the scene outside 300 Madison Ave. in New York last night. A sad day indeed. Leave a caption or your eulogy in the comments.

ANR
Students

Accounting News Roundup: Doubt Over Taxes Reaching Fever Pitch; E&Y to Hire 6k Off Campus in FY11; Honest Answers on Tax Policy in an Election Year | 09.24.10

Caleb Newquist
September 24, 2010

‘Consumers Are Paralyzed’ Over Tax Doubt [WSJ]
“Congress halted plans to pass a major tax bill before the November elections, leaving taxpayers and financial advisers unsure of how to plan for the future.

One of three scenarios face Congress when it returns from the election recess: It will extend all of the Bush tax cuts of 2001, which expire this year; it will hammer out a new law, perhaps using some of President Barack Obama’s budget proposals; or lawmakers will let the cuts expire, which would mean higher rates for all taxpayers.

Meantime, ‘consumers are paralyzed,’ said Dean Barber, a planner who heads the Barber Financial Group near Kansas City. ‘They have money to spend but they aren’t going to until they know where the tax burden will lie next year.’

The problem extends to business as well. ‘There are 29 million private businesses in this country, and they interact with our members,’ said Barry Melancon, head of the American Institute of Certified Public Accountants. ‘Universally we are hearing that businesses are paralyzed by lack of capital and uncertainty over taxes.’ “

SEC Hiring for Multiple Offices [FINS]
“The SEC is hiring qualified talent for both its Division of Enforcement and its Office of Compliance Inspections and Examinations (OCIE). The agency is looking for candidates with experience in risk management, operations and accounting and other specialties.

In testimony given yesterday at a Senate Banking Committee hearing, Robert Khuzami, director of the Division of Enforcement and Carlo di Florio, director of OCIE, spoke to their respective units’ hiring needs.”

Ernst & Young Previews New Campus Recruitment and Social Media Strategies [PR Newswire]
E&Y is hiring 6,000 campus recruits – both interns and new associates – this fiscal year. That’s an increase over last year’s numbers (although the press release doesn’t say by how much). The firm also states that 60% of its workforce will be Gen Y by the end of 2011.

Tax Policy in an Election Year [Tax Updated Blog]
Joe Kristan answers questions that politicians won’t.

Comtech Telecommunications Does the Right Thing by Fixing Errors in Latest Report [White Collar Fraud]
Sam is sending an autographed “WANTED” poster of his cousin “Crazy” Eddie as an “attaboy” for Comtech CEO Fred Kornberg for “[taking] the high road and corrected its errors without attacking a critic.” That “critic” being Sam, who reported on Comtech’s erroneous EBITDA calculation last July.

Whether this type of nostalgic temptation works for the other company execs that are on Sam’s radar remains to be seen.

Pastors to challenge IRS by endorsing candidates [AP]
One hundred men and women of the cloth will be endorsing political candidates from their pulpits this Sunday. If the IRS is doing its job, agents should be kicking down doors at many of God’s homes on Monday.

Quote of the Day

Can a Potty-Mouth Get You a Promotion?

Caleb Newquist
September 24, 2010

“Swearing does provide a sort of release that other language doesn’t provide.”

~ Dr. Daniel Zimmerman, a co-author of a study that says cursing can “clear the head,” and “conveys the sort of aggression that is rewarded with honors and promotions in high-stress workplaces.”

Good Times at PwC: Supporting the iPhone and The Return of Christmaskuh

Caleb Newquist
September 24, 2010

As you know, it’s been rebrand-orama in land of P. Dubs recently. With all that going on, you may have been distracted from the fact that there are more important, less controversial decisions being made. For example, employees will be celebrating the birth of Christ/The Festival of Lights/whatever it is you do by enjoying an open bar and finally making awkward sexual advances on co-workers.

From the mail bag, some communicado from Bob Moritz:

Holiday celebrations were clearly a casualty of the challenging economy. Many of you told us that while it was the right decision given the economic environment—especially when we repurposed our holiday spending to give back to our communities—you missed getting together with colleagues to celebrate during the December holiday season. While we will continue to focus on charitable giving, we’re pleased to see a return to office holiday celebrations this year. Look for more from your market leaders on events happening locally.

Additionally, PwC has finally caved to moxie of Steve Jobs:

Many of you are already using iPhones or have been holding off purchasing one because the firm doesn’t support them. I’m pleased to announce that, later this fall, we’ll be offering iPhones from AT&T, and at least one Android model from each of our approved cellular carriers (AT&T, Verizon, Sprint and T-Mobile), as part of PwC’s smartphone and cellular program.

How’s that for good news? Express your glee (that means break out in song) below.

U.S. Senate Continues to Successfully Bicker Over Tax Cuts

Caleb Newquist
September 24, 2010

Dick Durbin is über-confident that nothing is going to happen prior to election day, which means he and his colleagues will have to sneak it in between then and December 31st when the cuts expire.

“The reality is we’re not going to pass” the tax cuts before the election,” said Durbin of Illinois. He blamed politics, saying “we are so tightly wound up in this campaign” that a bipartisan agreement to act won’t be reached.

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said “it’s clear there aren’t 60 votes for any proposal, so no proposal is going to pass at this point.”

Sixty votes would be needed for a tax-cut extension to advance in the Senate.

Our concern is that some of Durbin’s friends in the Senate will be losers come November 2nd and may feel like sticking it to the entire country purely out of spite. It would be a mistake for anyone to overestimate the maturity level of any member of Congress.

Durbin Says Senate Won’t Pass Tax Cut Extension Before Election [Bloomberg]

Earlier:
Gerri Willis Doesn’t Care What A Couple of Old Men Think About Tax Cuts

CFOs

Time Warner CFO Gives Shocking Assessment of the Print Ad Market

Caleb Newquist
September 23, 2010

In case you haven’t been paying attention for the past, say, 5-10 years:

Time Warner Inc. (TWX) Chief Financial Officer John Martin said Thursday that the television advertising market is “really strong,” while the print advertising market is “okay–but not really robust.”

Not to worry though, there are no signs that things are getting worse.

Meanwhile, he said the company’s publishing arm, Time Inc.–which he called “the most secularly challenged part of our company”–faces difficult comparisons in the second half of this year, though he added that he didn’t see any slowdown ahead.

The magazine business was pummeled by the recent economic downturn at a time when it was already declining due to the rise of digital media.

Time Warner CFO: TV Ad Market `Really Strong,’ Print Less So [Dow Jones]

Deloitte

Deloitte Adding 11.5k New U.S. Employees in FY11; 5k Campus Hires

Caleb Newquist
September 23, 2010

FINS has more details on Deloitte’s hiring bonanza, reporting yesterday that the firm will add 11,500 new U.S. employees during fiscal year 2011.

The company expects to hire 11,500 in the country, which includes 5,000 campus hires. The U.S. numbers are part of the more-than 40,000 hires the company anticipates in FY 2011, said Patty Pogemiller, national director of talent acquisition.

The company is hiring across all of its major businesses in the U.S., particularly in its financial services industries. According to Pogemiller, the company is looking for candidates with “superior analytical and problem-solving skills” as well as and team-building abilities.

The breakdown of “hiring across all of its major businesses” remains unclear, although since the consulting business is going gangbusters while audit, tax and advisory are more or less flat, you could reason that the demand for consultants would be be on the rise. Assuming normal (or abnormal) attrition, the other business lines will still have their typical demand for fresh faces but a source close to Deloitte indicated to us that if the hot pace of the consulting biz continues, it could easily outpace the rest of the firm’s services.

Our source also indicated that the recruiting levels of 11,500/5,000 is consistent with those the firm had in the pre-financial crisis years of 2007-2009, which could mean the firm’s demand for new people has normalized.

Deloitte Will Hire 11,500 in the U.S. in FY 2011 [FINS]

Technology

This XBRL Thing Appears to Be Really Happening

GoingConcern
September 23, 2010

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

There’s no time to take a breather when it comes to XBRL implementations. New projects, regulations and initiatives are launched or introduced somewhere around the globe just about weekly, it appears. CFOs with firms that have yet to join the group won’t be out of the loop much longer.

XBRL, the acronym for eXtensible Business Reporting Language, means that the data contained within financial reports is constructed as individual elements, rather than blocks of text. Each piece of data comes wit and is linked to accounting definitions or rules. So, a number that makes up annual revenue has a different identity than a number that goes into payroll expense. The result? The data becomes “computer readable,” or interactive, so analysts, investors and regulators can easily compare one set of financial data to another.

Consider the following announcements and events:

Public company filings in the US: The last group of public companies that have yet to file XBRL financial statements with the SEC will start doing so for fiscal periods ending on or after June 15 of next year. These generally will be companies with market caps of less than $75 million or annual revenue of less than $50 million.

Domestic Banks: Earlier this month, Citibank announced that it was participating in a pilot involving the use of XBRL within dividend announcements issued by American Depositary Receipts, or ADRs. ADR dividend announcements were a logical starting point, because they’re concentrated among a relatively small number of issuers, and currently require lots of paper and re-keying of information, as this article in Earth Times points out.

US Legislation: True, a provision contained in early versions of the Dodd-Frank bill, and which would have required federal regulators to use a standard electronic format, like XBRL, when collecting info from the financial sector never made it to the final version. However, this summer Rep. Darrell Issa of California introduced a bill (H.R. 6038) that would amend Dodd-Frank to again include this provision. On July 30, it was referred to both the Committee on Financial Services and the Committee on Agriculture.

Along those lines, the House and Senate currently are hammering out legislation, the 2009 Federal Financial Assistance Management Improvement Act (S.303), which would require federal agencies to post spending data online in a uniform fashion – most likely, XBRL, NextGov reports. Just as XBRL will allow for easier analysis of corporate finances, this move would enable taxpayers and regulators to more easily examine federal spending and contracts.

Credit Agencies: Just before Labor Day, the SEC announced that a list of XBRL tags had been published on its website, and that nationally recognized statistical rating organizations (NRSROs) would need to begin using them by November 1 of this year.
Mutual Funds: By January of next year, mutual funds will be required to provide the SEC with summary information on risk and return from their prospectuses in XBRL format.

While XBRL’s benefits for investors have been the focus of much attention, the XBRL-related initiatives underway should benefit corporate America, as well, judging from a study by two researchers at Fordham University. In “XBRL and its financial reporting benefits: Capital market evidence,” Christine Tan and John Shon of Fordham write, “the findings of this study suggest that firms that file using XBRL experience a reduction in information asymmetry.” Moreover, XBRL may help smaller firms attract an analyst following, they add.

Experienced Associate Concerned About New Hires’ Salary; Is Having a Sit-down with a Partner a Good Idea?

Caleb Newquist
September 23, 2010

Today in accountant avarice, a youth took a cut prior to their start date last year and now wonders if this year’s crop will be raking in more. Will bringing injustice to a partner’s attention help?

Have a question about your career? Need help crafting the perfect prose in an email to your firm’s CEO/Managing Partner? Are you a firm thinking about getting a makeover but don’t know where to start? Send us an email to advice@goingconcern.com and we’ll give the best free advice you can possibly find.

Back to our accountant in the poor house:

I work at a regional firm for about one year now. Prior to my start date my offer was reduced due to the economy. After recent discussions with the partner, I was told that I will be getting a “raise” but even after the bump, my new salary is below my original offer amount. Is there any chance, new hires coming in can make more than I, because my revised offer seems below market and I think my firm will be offering higher salaries to the new hires to remain competitive? Also, should I bring this up to the partner’s attention because I don’t think that they know my salary has been reduced and how would I go about doing this?

First, before we answer your question more directly, we should point out that worrying about what other people are making at your firm will drive you crazy. But because of the world we live in, knowing whether a co-worker is making more or less than us is a God-given right, we understand your desire for this knowledge.

As to whether the new grasshoppers at your firm are making more than you, we suggest checking out our salary thread from late last year, our map that shows salary by region and this year’s Big 4 starting salary thread to give you an idea where you fall on the scale.

But the short answer is, yes, it is possible that your first year associate is making more than you.

Now, what to do about that exactly? Well, before you scream at the cruel and unusual universe for being completely unfair to you, do your research and get a really good idea of what you think you should be making. Nothing will get you thrown out of a partner’s office faster than, “I need a raise because I said so.”

But market research may not be enough. You’ll need to demonstrate to the partner getting your pitch why you’re a valuable resource for the firm and point to specific accomplishments that support your argument. As a second-year associate, that can be a pretty tough sell.

What have you accomplished in the past year? Are you making it rain? Are you a trusted go-to on anything and everything for your clients? Are you involved advancing the firm’s brand and culture and mentoring other colleagues to do the same?

Partners like to hear about all that stuff because A) it gets their blood boiling in the nether regions and B) it means that you care about making them (i.e. the firm) more money and advancing its reputation.

So yes, you can bring your concerns to a partner but be prepared to sell yourself all over again because it’s a “what have you done for me lately?” situation.

Grant Thornton

Grant Thornton CEO Admits That He Wasn’t Prepared for the Chicago Winters

Caleb Newquist
September 23, 2010

Stephen Chipman also says that he misunderestimated the demand for his time. Who could have known?

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