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News

Area Accountant Desires Government Job More Than Porn Star Wife

Caleb Newquist
September 16, 2010

Last summer, you may remember hearing about an accountant in Florida who was fired from his job as Town Manager of Fort Myers Beach because his wife was a porn star.

At the time we wondered how an injustice of this magnitude could occur in this great land of ours. If an accountant can’t marry a porn star and be a public servant, is this really the country we want to live in?

Despite that setback for FREEDOM, Scott Janke – the accountant and husband of porn star in question – is trying to become the City Manager of Flager Beach, FL and he has supporters stating that he’s the best man for the job, so on and so forth.

However, Janke’s supporters aren’t concerned that the porn star wife (which they say wasn’t an issue to being with) and Hustler pinup – Anabela Mota Janke, aka Jazella Moore (most definitely NSFW) – will not be a problem this go round because Janke and Jazella are separated.

“I think that he’d be a really good city manager,” Flagler Beach Commissioner Jane Mealy said. She said Janke’s wife’s profession wouldn’t factor into her decision.

“As far as I’m concerned, it has no impact,” Mealy said.

Mealy predicted that “by next week, people will have forgotten” about any controversy surrounding Janke.

Maybe that’s because Janke said Tuesday that he and his wife are separated.

Now you could debate the pros and cons of dating a porn star until Jenna Jameson comes home but in this particular case, Janke really sounds like he wants to be a City Manager/Planner. Janke must have figured that he didn’t have to settle for a woman with D-level acting skills and a D-cup rack when he could have a whole city on its knees.

He’s an accountant; she’s a porn star. And their life’s no bed of roses. [FloriDUH]

Accounting News Roundup: Liz Warren to Be Geithner’s Sidekick; Chicago Accountant Gets 23-Year Sentence for Ponzi Du Jour; Gibbs, Boehner Tweet Over Tax Cuts | 09.16.10

Caleb Newquist
September 16, 2010

White House Taps Consumer Adviser [WSJ]
“President Barack Obama this week will appoint Elizabeth Warren to a lead role setting up the new Bureau of Consumer Financial Protection, two Democratic officials said, a move that will allow the White House to avoid a messy Senate fight over her role.

Ms. Warren, currently a professor at Harvard Law School, will be named an assistant to the president and special advisor to Treasury Secretary Timothy Geithner in charge of launching the new agency and setting its mission. She was a candidate to be the agency’s first director, a position that remains unfilled, but would likely have confirmation because of opposition in the Senate.”

What is Accounting? [White Collar Fraud]
It’s sort of like arithmetic but not really. Former Sam Antar nemesis, Howard Sirota, explains in a video over at WCF.

Chicago-Area Man Is Sentenced to 23 Years for Running 22-Year Ponzi Scheme [Bloomberg]
“Frank Castaldi, who ran a Chicago- area Ponzi scheme for 22 years that cost victims $31.6 million, was sentenced to 23 years in prison today in federal court.

For 22 years, Castaldi, 57, of suburban Prospect Heights preyed upon elderly Italian immigrants, U.S. District Judge John Darrah said today before handing down the sentence.

‘This is an offense of huge magnitude,’ the judge said after hearing from victims of the scheme in a packed courtroom. ‘It involved hundreds of victims. It involved millions of dollars.’

In an August 2009 plea agreement, Castaldi said he had raised more than $77 million from 473 groups and individuals. First charged in January of last year, he admitted to mail fraud and to trying to thwart a U.S. Internal Revenue Service probe.”

Regulators to Target ‘Window Dressing’ [WSJ]
“Federal regulators are poised to propose new disclosure rules targeting “window dressing,” a practice undertaken by some large banks to temporarily lower their debt levels before reporting finances to the public.

The Securities and Exchange Commission is scheduled to take up the matter at a meeting Friday and is expected to issue proposals for public comment. The action follows a Wall Street Journal investigation into the practice, which isn’t illegal but masks banks’ true levels of borrowing and risk-taking.”

Banks take over record number of homes in August [Reuters]
“A record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said on Thursday.

New default notices decreased at the same time, suggesting that lenders managed the flow of troubled loans and foreclosed properties hitting the market to limit price declines, the company said.

Root problems of high unemployment, wage cuts, negative home equity and restrictive lending practices persist, however, pointing to lingering housing market pain.”

Jon Stewart: Robert Gibbs and John Boehner on the Bush Tax Cuts [TaxProf Blog]

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Quote of the Day

A Big 4 Identity Crisis?

Caleb Newquist
September 16, 2010

“The Big 4 don’t even like being called AUDITORS. Rather they provide ‘ASSURANCE Services,’ and act as ‘TRUSTED ADVISORS.’ This isn’t just rhetorical. It’s a cynical PR move and an effort to limit their liability.”

~ Francine McKenna, who will be on a panel with Lehman Brothers Bankruptcy Examiner Anton Valukas, NYT Chief Financial Correspondent Floyd Norris and others, discussing the financial crisis.

An IRS agent walks into a bar…

Caleb Newquist
September 16, 2010

…which is never good.

IRS agents searched Vic’s Food and Spirits, which is owned by Vic Center, at about 9 a.m. Tuesday as well as two other properties owned by Center, said an employee.

“We had a visit,” said Warren Oliver, the tavern’s bartender. “They took all of our lists, numbers and papers — everything, with them.”

Young Buck feels your pain, Warren Oliver.

IRS agents search area tavern [Dayton Daily News]

CFOs

Time Warner Cable CFO Pretty Frank About How Crappy Things Look

Caleb Newquist
September 16, 2010

That, or Robert Marcus needs a little training in positive spin:

The environment for cable television subscribers is “very, very weak,” according to Time Warner Cable Inc. (TWC) Chief Financial Officer Robert Marcus, and the company may actually see the total number of subscribers to its television, Internet and telephone services shrink during the current quarter.

The statement, made Wednesday at a Bank of America Merrill Lynch conference in California, caused Time Warner Cable stock to lose as much as 5.3% in Wednesday afternoon trading immediately after Marcus delivered his opening remarks.

Marcus said August saw the “usual uptick in subscriber performance,” as children went back to college, but unemployment, high vacancy rates in housing and “really anemic new home formation” are “resulting in some pretty weak subscriber numbers.”

Time Warner Cable Stock Sinks After CFO’s Downbeat Remarks [Dow Jones]

CFOs

CFOs Want Tech Investments to Pay Off…Stat!

GoingConcern
September 15, 2010

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

CFOs and CIOs have very different priorities when it comes to IT spending, and that dichotomy is not likely to change any time soon, even as IT budgets are starting to once again increase.

After being slashed to almost nil during the height of the crisis for many corporations across sector and size, IT budgets are beginning to rise.

But CFOs are keeping a keen eye on where that money is going and still expect a relatively swift return on investment (ROI) in order to consider anything beyond maintenance and upgrades.

They want to clearly see that ROI—whether it be through qualitative measures, like better compliance or improved risk management, or through quantitative measures like reductions in days sales outstanding (DSO) or decreased cost-per-check.

As Craig Himmelberger at SAP said in a recent interview I did for Global Finance magazine: “People don’t want to rip and replace systems that are still functioning well, so a lot of the investments we see now are incremental.”

This IT budget allocation is likely to continue for the near future, at any rate, regardless of what CIOs may want. However, there does have to be a balance. At some point when liquidity risk fears begin to subside, CFOs will once again be more open to their CIOs’ suggestions for IT spending.

And what CIOs want to see is more spend on innovation, as Ellen Pearlman noted in her blog on CIOZone.com last month.

She quoted CXO Art Sedighi as saying: “In the current time and environment, the biggest challenge is [to] convince upper management to open up their wallets again after almost 3 years. The IT staff has been pulling things together with nothing short of band-aids since 2008, and things are about [to] fall apart. All management sees is the fact that spending was down, and they survived.”

Pearlman points out that while most execs believe that IT innovation is important, companies have consistently slashed spend on innovation over the past decade. In an AT Kearney study, executives cited IT innovation spend of 30 percent in 1999, compared with just 14 percent by 2009.

In the study, 45 percent of IT budget went to improving operations and 41 percent went to business enablement/process improvement. Most respondents felt that 24 percent of the IT budget should be directed towards innovation.

The current budget split certainly meshes with the continued corporate focus on driving down costs across the working capital chain. Indeed, it may be quite some time before CIOs get their dream IT allocation.

News

Let’s Discuss: Best Accounting Programs According to Recruiters

Caleb Newquist
September 15, 2010

Yesterday the Journal got into the ranking act with their list of colleges based on recruiters’ preferences. The accounting program rankings aren’t too surprising but we called in the friendly HR professional and recruiting maven Dan Braddock to discuss the rankings. First things first however – the pecking order:

1. BYU
2. Wisconsin-Madison
3. Illinois-Champaign
4. Minnesota
5. Penn State
6. Michigan
7. Maryland
8. Cal-Berkley
9. UCLA
10. Ohio State
11. NYU

What follows is my chat with Dan-o as he tries to break this dorong>: Okay, let’s kick this off. You sent me a link to some WSJ article about the school rankings based on recruiter opinions.
CJN: I did. Personally, I find it hard to take the list too seriously without Texas-Austin or Notre Dame on it.
DWB: It makes perfect sense as to why they’re not on the list.
CJN: Explain, that sounds like crazy talk.
DWB: This isn’t based on caliber of program; it’s a list of what recruiters find to be the “best” schools. Take a look at the list of Best Accounting Schools. First, those schools are huge; many of them are state schools. Recruiters get the most “bang for the buck” out of schools like this. Second, if you mapped these out, they’re schools that can can service as feeder programs for multiple offices. For example, Deloitte can visit UCLA and find potential candidates for their California and west coast offices. This removes the necessity to visit several smaller schools across the same geogrpahic region. Penn State services Philly, Pittsburgh, D.C., Baltimore, New Jersey, and New York City. Lehigh University in eastern PA is a much better accounting program than Penn State, but has a smaller geographic reach and a smaller pool of students.
CJN: But doesn’t the #1 school, BYU, buck that idea completely? Their enrollment is small by comparison and Salt Lake City is a relatively small market
DWB: BYU has more than 25,000 undergrads from every state in the country – again, national reach.
CJN: Fine but why no UT? The Texas market is huge and has national reach.
DWB: I admit, Texas is the one school that I was shocked not to see on the list – on the surface, it is large in size, has a well respected business program, and is nationally known. But dig deeper and it makes sense. Of their 38,000 undergraduates, only 8.5% are from outside the state of Texas. So applying that same percentage to the number of undergrads in the business school (4,500) that’s about 380 students. How many of them study accounting? My guess is not many. That said, accounting students interested in offices elsewhere (Chicago, LA, NYC) should have no problem landing interviews, as the local Texas recruiters from the Big4 blanket UT at Austin.
CJN: And Notre Dame? Why are they MIA? John Veihmeyer has to be pissed. And not just about the choke against Michigan.
DWB: Hahaha. I’m sure he voiced his frustration about both. He’s probably having nightmares about the most recent flop in South Bend. Again, it’s all about size of program. National name, yes, but when your business program is ~2,500 students in total…Also, remember that these rankings for best accounting programs is not just by Big 4 recruiters. This is everyone. Johnson&Johnson, regional mortgage firms, Disney, etc.
CJN: Interesting
DWB: Obviously there is some kind of balance in play here. As a whole, all of these schools are nationally known and well respected in the industry; there are no schleps on the list. For recruiters, it’s all about efficiency of time and finances. A hotel room and flight to visit a school where hundreds of accounting students are salivating at the opportunity to work for you is impossible to pass up.
CJN: So everyone on this list belongs on it or are there other schools that are missing that should be in the top…11 (?)
DWB: Considering their proximity to one another I was suprised to see both the U of Minnesota and U of Wisconsin on the list but no, nothing too surprising. Since it is college football season, the Big Ten definitely has the SEC beat when it comes to accountants (6 v. 0 on the list). Maybe that’s why they’re better on the gridiron.
CJN: OR maybe it’s because it’s the SOUTH. My guess is that people don’t go to Vandy to get an accounting degree.
DWB: I am surprised not to see a school from the South – no UNC Chapel Hill
CJN: Fair point.
DWB: In closing, I think it goes to show that US News & World Report rankings are not the end all be all for recruiters. Nationally known names, established programs, and large alumni bases go a long way.
CJN: Right. And a good football team doesn’t mean shit (read: Alabama).
DWB: Below the belt, CN.
CJN: Whatevs. Can you explain the pachyderm? B/c I sure as hell can’t.

The Top 25 Recruiter Picks [WSJ]

Announcements

Thanks to This Week’s Advertisers

GoingConcern
September 15, 2010

A quick word of thanks to this week’s advertisers on Going Concern:

• Lambers/Examforce

• L’Auberge Du Lac

If you’re interested in advertising on Going Concern, email us at advertising@breakingmedia.com.

Thanks!

KPMG, Ernst & Young Sneak on to U.S. News Tax Firm Ranking

Caleb Newquist
September 15, 2010

You may or may not be aware that U.S. News & World Report is the shot caller when it comes to ranking law schools (much to the chagrin of some) and now (to even more chagrin) the magazine is delving into extensive law firm rankings and the Big 4 will enjoy a little bit of perceived prestige that comes along with these rankings.

Christ. We’re barely into rankings/list season and they’ve already chalked up working moms and consulting rankings and U.S. News is now throwing around its weight with this new list.

Granted, virtually no accounting firms will even get a whiff of this list but something tells us that because U.S. News has decided to dive head first into ranking law firms by practice are the Big 4 will be jockeying to make the tax list, even though it is a sliver of a much larger and broader ranking that they won’t be included on at all.

Excuse us while we choke down the vomit that we caught making it’s way out.

Why the hell not?!? U.S. News figured that the world couldn’t do without it’s rankings-for-hire in one more area for the legal field but this time the Big 4 will enjoy a bit of a ride on this wave.

Right. The list. The two of Big Four of course, make their way on the ranking for tax firms: Ernst & Young falls into the coveted Tier 1 (includes 36 firms) and KPMG drops on Tier 2 (47 firms). There were a total out of 119 firms across three tiers.

Admittedly, this is an opportunity for both KPMG and E&Y to boast their tax practice prowess over Deloitte and PwC who don’t appear on the list at all. That being said, Deloitte and PwC enjoy higher spots on the consulting rankings so they’re probably not overly concerned although no one turns down a notch on the bedpost if they can get it.

What this new ranking ultimately will be is one more marketing tool for the firms to use on the impressionable recruits and experienced hires who want to work in top notch – TOP NOTCH! – tax practice. Be it lawyers or CPAs, the firms will tout this ranking to their tax professionals (if not firm-wide) to throw around ONE. MORE. LIST. to impress the trousers off the masses but now people will be saying, “Oh, this is a U.S. News ranking.”

So for the Big 4 to be included in this “prestigious” ranking is a little bit, as Elie Mystal states, like “Christmas morning – if only Santa were a jolly red prestige whore.”

U.S. News Tax Firm Rankings [TaxProf Blog]
Best Law Firms [U.S. News & World Report]
U.S. News Launches First Official Law Firm Rankings [ATL]

KPMG

Extreme Big 4 Makeover: KPMG Edition

Caleb Newquist
September 15, 2010

Yesterday we told you about Extreme Big 4 Makeover: PwC Edition. Today we’ve learned that KPMG is getting into the act, although the House of Klynveld had the sense to avoid changing their team colors to match the autumnal palette (Braddock says it reminds him of Pizza Hut).

But more on colors later. We feel that the motivation for the rebranding is likely twofold: 1) They got wind of PwC sexing themselves up and 2) They’re pissed about Dick Bové playing dumb and they’re trying to get the old girl’s attention.

Naturally, it makes the Masters Champ who, after coming of his video extravaganza on Phil Mickelson’s KPMG website, is appearing in this ad in Golf Magazine (or so we’re told, we don’t have a subscription):

Phil m Golf World

In addition to His Leftness being included in the campaign (reminiscent of T. Dubs with Accenture) apparently the firm took out an ad in today’s Financial Times that rocks their new slogan, Cutting Through Complexity™:

KPMGCuttingThroughComplexityprintadvertising

Last but not least, the firm rolled out this internal Brand Book that tells you everything you don’t want to know about the rebranding including the firm’s commitment to it’s favorite hue, ” To bring our brand to life we have a refreshed visual identity and tone of voice which reinforces the essence of our brand. It builds on our current brand equity and the strong ownership we have of the color blue, while placing greater emphasis on the warmth of our wider color palette.”

KPMGBrandBook

One of sources already weighed in saying, “I’m so excited about the opportunities that will be generated by these HUGE changes I don’t know how I will contain myself.” We invite you to share your own thoughts on blue, Phil or whatever you think about KPMG’s new do.

Deadline Watch ’10: Happy September 15th!

Caleb Newquist
September 15, 2010

Whether this marks the end of your tax season for 2010 or is just a pit stop on the way to October 15th, it’s certainly a day that gets marked on the calendar of many a tax sage.

In case you’re completely oblivious to the significance of this day, it marks the extended filing deadline for corporations, partnerships and trusts. That amounts to metric asston of returns and there’s probably more than a few people that suffer nervous breakdowns on the road to this annual deadline.

Whether or not you’ll be drinking your lunch today, it’s a nice reminder (or an excruciating one) that all things – including CFOs and Lindsay Lohan (what’s taking so long?) – eventually pass.

You can express joy or resentment about your successful completion of tax season 2010. It was your last, right? Sure. We’ve heard that before. Anyway, if this marks end, go enjoy yourself this evening.

But of course, we haven’t forgotten that there are plenty of you that have 30 days to go. Feel free to bitch and moan and then get back to work.

Accounting News Roundup: Rangel Routs Opponent in Primary; Deloitte Still Making the Rounds, Crying “Help Wanted”; 1099 Debate Continues | 09.15.10

Caleb Newquist
September 15, 2010

Despite ethics cloud, Rangel easily wins primary [WaPo]
“Facing ethics charges in Washington and upstart challengers at home, Rep. Charles B. Rangel (D-N.Y.) won a resounding victory Tuesday to keep the Harlem-based House seat that he has easily controlled for 40 years.

Rangel, the ousted Ways and Means Committee chairman who has been charged with 13 counts of violating House rules, ran an aggressive campaign for the Democratic nomination, betting that the people who have known him longest – voters in the 15th Congressional District – would send him back to Capitol Hill with a political victory before the House ethics committee tries him laternext year.”

Deloitte Will Hire 250,000 over Five Years: Across All Regions, Businesses and Levels of Experience [FINS]
Jim Quigley is still making the rounds since Deloitte announced their revenues for FY 2010 on Monday but more surprisingly, the 250k jobs over the next five years number hasn’t been corrected. Call us party poopers but adding the entire city of Lexington, Kentucky to your workforce in half a decade seems a tad ambitious but whatevs.

Anyway, FINS ran Quigs down and Julie Steinberg informs us “Deloitte is looking to hire in all regions, but it expects growth in priority markets like China and India,” which means you might think about picking up some Rosetta Stone. JQ is also quoted saying those that are “internationally-oriented, diverse in background and skill sets, and have strong teamwork skills,” will make the best candidates.

Obviously Chris Dodd Didn’t Realize He Was Referring To Himself At The Time [JDA]
“Apparently Chris Dodd is a little butthurt about the idea of an Elizabeth Warren-led consumer protection bureau, as he well should be. Who exactly do you think she would be there to protect the consumer from? Scandalous pricks like Dodd who think backdoor deals are notches in the belt of a good political career. What scares him? Warren doing more than terrorizing small financial institutions like a good little consumer protection bitch would? Surely he’s smart enough to wipe his own bloody footprints off the floor before slinking off, why is he so afraid of this suggestion and why wasn’t he smart enough to write his fucking bill so it couldn’t?”

ICAEW chief says audit quality remains strong [Accountancy Age]
The Brits are pretty pleased with how the auditing is going, despite what the Audit Inspection Unit’s report says. So much so, ICAEW Chief Michael Izza blogged about it, “The most important message to be taken from the work of the AIU is that there are no systemic problems with the quality of audit of UK listed companies, nor in the processes followed by the firms who carry out these audits.”

Wallace book about IRS office coming out April 15 [AP]
The next novel, “The Pale King,” from late David Foster Wallace will bet set in an IRS office and will be released April 15, 2010.

Why Congress Shouldn’t Tax 1099s [The Atlantic via Tax Update Blog]
“[N]o one is suggesting that this law will do much of anything to close America’s ‘tax gap’ (the gap between what the IRS thinks taxpayers should pay, and what they actually do). The tax gap is almost $300 billion; the new law would reduce that by perhaps a half a percent. “

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