Going Concern

The IRS Is Giving Gulf Oil Spill Victims Their Full and Undivided Attention This Saturday

Caleb Newquist
July 15, 2010

Attention “self-reliant nonconformists who don’t pay much heed to everyday rules and regulations”! The IRS is offering you help with your nonconformist ways this very Saturday!

If you’re not interested in conforming with, you know, the Internal Revenue Code, then the Service might be a little bit less accommodating. Sure, it’s a Saturday but this is the government offering you help for free. No physical harm intended.

The Internal Revenue Service announced the locations of Taxpayer Assistance Centers in seven Gulf Coast cities that will be open this Saturday, July 17 to provide help to taxpayers impacted by the BP oil spill.

The following locations will be open from 9 a.m. to 2 p.m. Central Time:

1110 Montlimar Drive, Mobile, Ala.
651-F West 14th St., Panama City, Fla.
7180 9th Ave. North, Pensacola, Fla.
2600 Citiplace Centre, Baton Rouge, La.
423 Lafayette St., Houma, La.
1555 Poydras Street, New Orleans, La.
11309 Old Highway 49, Gulfport, Miss.
Individuals who have questions about the tax treatment of BP claims payments or who are experiencing filing or payment hardships because of the oil spill will be able to work directly with IRS personnel at any of these locations on Saturday.

A Friendly HR Reminder: The Workplace Is Not a Dating Service

Daniel Braddock
July 15, 2010

Yes, your calendar is correct. Sir Caleb asked me to post on Whisky Wednesday. Fill up your glass, kick back in your chair, and let’s do this, shall we?

An area that I want to address is a topic that is otherwise whispered about or downright ignored by most engagement teams at accounting firms – dating in the workplace. For the purpose of this post, we’re going to let “dating” stand for anything from a one night stand to full fledge monogamous relationships. When done correctly and professionally, there is nothing wrong (from a legal or career perspective) with dating a co-worker. However – at least from my observations – the majority of cases do not fall under this description.

Sleepin’ your way to the top; shacking up with the enemy; earning an Encore award; shagging the secretary; deserving an early promo. Whatever you want to call it, getting drunk and hooking up with a coworker falls into a grey area. And by grey area, I mean the “what the hell were you thinking” area. I suggest treading lightly.

Why it happens – Birds and bees conversation aside, I’m talking about why so many accountants hook up with one another. On paper, it makes sense – similar backgrounds and interests, close and frequent exposure to one another, the lack of time to spend with others outside the office, and of course your campus recruiting department did a kick-ass job when “randomly” selecting resumés. Sure, your associate seems like a catch – but whom have you compared him/her to? Your manager? The mailroom staff? Security!? Come on. Your firm is not Match.com or the Casual Encounters section of Craigslist.

People talk – Newsflash of the day – your co-workers are a bunch of gossip mongers. Again, some of this is due to the “work is my life” mantra. Gossip flies around larger engagement teams when cliques are prevalent – do yourself a favor and head it off from the start of things – DON’T HOOK UP WITH SOMEONE FROM YOUR ENGAGEMENT TEAM. If you absolutely must “keep it in the accounting family,” try a different practice. (Didn’t you hear? Internal audit advisory services is saturated with hotties.) But really, avoid associating yourself with this kind of gossip. As time goes on and people get promoted and shuffled around, you never know who you’re going to be working with. Avoid the guaranteed awkwardness.

It can hurt your career – I’m not saying this is common, because it’s really not. It’s not ethical, but when it comes time for reviews, managers and partners are human. Non-work related factors – like sleeping your way around the block – can have an impact.

If you’re going to date someone from work…keep both of your careers in mind. Be honest with one another, and talk about things. A lot of factors can come into play – what practice lines you’re in, the possibility of working together, and long-term promotion paths are just a few. When marriage becomes a realistic possibility or you are unsure of how to proceed at any time, speak to someone in HR. They can help you better understand your firm’s HR policy and how it relates to your particular situation.

But for you horned up co-eds out there, listen up. Next time you’re out sipping the alcoholic Kool-aid at a partner sponsored “bonding event,” think twice before downing your drink remnants and hopping in a cab with the second year with the nice eyes. You’ll thank me the next morning when you don’t walk in wearing the same peach schnapps stained shirt you had on the night before.

Have a personal experience or bit of advice you want to share? Email me or comment below.

A Couple of Senators, Who Probably Aren’t Yankee Fans, Are Making a Run at This Estate Tax Problem

Caleb Newquist
July 14, 2010

John Kyl and Blanche Lincoln must have figured that they could not allow one more billionaire (without naming names) get away with dodging the estate tax. The two Senators have introduced a proposal that would set the exemption at $5 million with a tax rate of 35%:

The proposal would require the Senate Finance Committee to amend H.R. 5297, the Small Business Lending bill, to permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation. It would also provide a “stepped up basis” for inherited assets.

“It’s time to take decisive action on the estate tax, and provide the permanent solution that Arkansas’s hardworking farmers and small businesses are desperately seeking,” Lincoln said. “Uncertainty in the estate tax law has caused incredible difficulties for these individuals, which is why I have fought for a quick resolution to the issue that is both permanent and fair. One way to improve upon an already strong legislative initiative that includes tax incentives and a number of other benefits for small businesses is to ensure that we reach a permanent solution on the estate tax to provide small business owners and famers with the certainty they need.”

See how she slipped in the “farmers”? “Small Businesses”? You sure this doesn’t have anything to do with a certain savvy billionaire who figured, “Yeah, 80 is a nice round number. Let’s do this.”

But they’ve got a plan! “The Lincoln-Kyl proposal provides an election for deceased taxpayers to either retain this year’s estate tax rate, which is zero percent with “carry over basis,” or file under the provisions of the new bill.”

[h/t TaxProf]

PCAOB

The Latest Proposed Standard from the PCAOB Will Hopefully Keep Future Interns Busy

Caleb Newquist
July 14, 2010

Yesterday, the PCAOB released a 90 page proposal on confirmations because, presumably, auditors collectively suck at using them.

If you take exception with that notion, so be it, but the Board thought that rolling out a standard was necessary to give the opiners out there some guidance so they can get a little more bang for the buck (and give interns and A1s something to do when there is absolutely nothing going on) from confirmations.

Tammy Whitehouse over at Compliance Week fills us in on some of the details:

PCAOB member Steven Harris said the proposed standard expands the use of the confirmation process by requiring auditors to confirm receivables that arise from credit sales, loans, or other transactions; cash and other relationships with financial institutions; and other accounts or balances that pose a significant risk to the financial statements. Currently, auditors are required only to verify receivables if they arise from the sale of goods or services in the normal course of business.

The standard also would relax the requirements for confirmations written on paper, reflecting advances in electronic communication. The proposal would allow auditors to use electronic media to send confirmation requests and receive confirmation responses, and it would make provisions under certain circumstances for auditors to use direct access to a third party’s records to obtain the audit evidence they need.

Throw in your 2¢ by September 13th and gird your loins for audits after Dec. 15, 2011.

PCAOB Proposes New Auditing Standard on Confirmation [PCAOB]
PCAOB Plans New Requirements for Audit Confirmations [Compliance Week]

News

Job of the Day: AllianceBernstein Needs a Senior Auditor

GoingConcern
July 14, 2010

AllianceBernstein is looking for an experienced auditor to join its internal department in New York.

Ideal candidates have a minimum of five years experience with exposure to alternative investment products. Advanced degree or certifications are preferred.

Company: AllianceBernstein

Title: Senior Audit Associate

Location: New York

Description: We are seeking a seeking a Senior Audit Associate with strong business and/or audit experience in Alternative Investments to join our Internal Audit Department. This position is an opportunity for experienced professionals to join a dynamic team to deliver value added audit services.

Responsibilities: Assist Audit Management in carrying out the annual audit plan; Assess the accuracy and adequacy of financial information and the Company’s internal control structure; Assist Audit Management in accomplishing certain administrative tasks; Supervise and work with junior auditors; Through continuous monitoring, keep current as to the development of relevant industry, regulatory and corporate matters that may affect the Internal Audit Department’s audit scope.

Skills: Our ideal candidate will have 5 to 10 years of broad capital markets experience with an emphasis in alternative investment products and services. College degree required. Advanced degree and/or certification preferred. Candidates should have demonstrated leadership capability, strong team work capabilities, solid written and oral communication skills and excellent, analytical skills. Candidates must have the ability to interact with all levels of management; Knowledge of the buy-side investment management business is a plus. Prior audit experience is preferred, but not required. Candidates should demonstrate a firm grasp and good working knowledge of the suite of Alternative Investment products and services including: Hedge Funds – direct investments and Fund of Hedge Funds.

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

Career Center

Question for the Group: How Does One Get Into Cost Accounting?

Caleb Newquist
July 14, 2010

One of our Twitter followers Markied85 asked us the following:

How would you suggest getting into cost accounting? it seems like one of those positions you fall into with experience.

Good question! Personally speaking, your humble editor only had a brief stint as a financial analyst that involved compiling internal reporting for a COO and that was after we had done our time in public/Big 4, so your thinking is on the right track.

If you accept an entry-level position with a private company, chances are you wouldn’t be tasked with providing reports to managers. However it is possible that you would be responsible for compiling these reports and depending on how the department is set up, one of your superiors would review and present the reports.

But what do we know? Like we said, our experience is limited so we just took quick shot in the dark. What we do know is if you are an in-house cost accountant, a CMA is good credential to set you apart from the rest in your group (plus, you’ll probably get more money).

If you’ve got good experience with this transition or you’ve been in a cost/managerial accounting role your entire career, let’s hear about it.

KPMG

KPMG Partner Thinks It’s Really Unfair That Audit Firms Keep Getting Sued

Caleb Newquist
July 14, 2010

You know what sucks? Getting sued. Ask Bill Michael, KPMG’s UK head of FS. He’s pretty sick and tired of all the sue-happiness going on in the world today. Sure, the financial crisis nearly destroyed the world as we know it but dammit, blaming auditors is downright ludicrous. Why? Because it’s unfair.

Bill Michael, UK head of financial services at KPMG, attacked what he described as “unfair”, “deep pocket” lawsuits which pay “little or no attention to the balance of responsibility between auditor and management”.

“We operate in a highly litigious environment where the balance of risk and reward has driven us to a world of caveats,” said Mr Michael. “Any corporate failure or financial loss invariably carries with it the risk of suing the auditor.”

Right. Because in law school they teach future litigators to “pay attention to the balance of responsibility between auditor and management.” Supposedly Bill Mike would like everyone to start respecting the Big 4 business model and leave them alone to do their work. Because in case you hadn’t heard, this is a life and death matter for accounting firms, you know:

“I can tell you, we are acutely aware of risk management and its consequences from both an individual and a firm perspective.

“You only have to look at what happened to a great firm like Arthur Anderson after its audit of Enron,” said Mr Michael. Arthur Anderson was eventually cleared after its audit of the collapsed energy trader, but the accountancy has already folded as a result.

He also criticised the “enormous rewards for failure” in the banking industry, drawing attention to the way some of those responsible for the collapse of major firms were able to move to other banks or hedge funds.

“The risk-reward relationship is not only lop-sided; it impairs our ability to provide broader observations,” said Mr Michael.

Describing the sometimes tense relationship between accountants and the firms they are auditing, he said that each review often started with the premise of “we don’t trust you”.

So in other words, get your witch hunt on with the banks and hedgies but leave us the hell alone. Nobody likes us the way it is.

Litigation culture is ‘unfair’ warns KPMG accounting head [Telegraph]

Reno’s “Hot August Nights” Goes For-Profit and Skips Town?

Adrienne Gonzalez
July 14, 2010

Though the connection between the non-profit Hot August Nights organization that’s been putting on Reno’s biggest party for 24 years and the newly-registered for-profit Hot August Nights of Las Vegas is unclear, what is clear is that part of the event will be held in Long Beach this year due to “horrific” costs to put the event on in Reno.

Reno, if you don’t already know, is in pretty bad shape. I used to live there so I know that it always was but it’s in really bad shape right now. With the iconic Fitzgerald’s Hotel and Casino indefinitely boarded up directly under Reno’s “Biggest Little City in the World” sign as a direct result of the Corus Bank failure 1,500 miles away in Chicago back in late 2009, downtown looks more destitute than ever. I take full artistic license for use of the word “iconic.” This is Reno we’re talking about.

You’d think Reno city commissioners would want to encourage fun and leisure, mostly through the only event any of us with the big money to the West are familiar with (Hot August Nights) but all signs point to the city losing it.

On the same day paperwork was filed in Nevada to establish the for-profit, non-profit Hot August Nights officials announced part of the event would be held in Southern California in 2011.

There’s been a bunch of bitchfighting in Reno (and neighbor Sparks, who gets some of the tourism run-off for the event) and it continues.

We don’t expect you to be familiar with the Reno area (unless you happen to work for ~~Deloitte~~ or E&Y in town, though we don’t like those odds) so for a little background on Hot August Nights, it’s a yearly car show stamped as family fun for everyone. The event costs $700,000 to put on each year according to organizers who swear they aren’t looking to move the show to Long Beach in 2012.

The Reno Gazette-Journal breaks down the non-profit side:

In the 2004 tax year, Don Schmid, then listed as executive director, was paid $93,962 in salary.

On the nonprofit corporation’s 2008 income tax return, current executive director Bruce Walter is listed as collecting $256,890 in salary and $11,940 for a housing allowance, resulting in total compensation of $268,830.

Yes, I’m sure it’s the costs of putting on the event that are inspiring a move. Anyone been to a convention in Reno lately? It’s got to be the cheapest place in the country if you don’t count middle states. You’re telling me it’s cheaper to host the event in Long Beach?

For-profit Hot August Nights corporation created in Vegas [The Reno Gazette-Journal]

Accounting News Roundup: Americans’ Irrational Demands on Policy; Number of Women CFOs Same as ’09; Summer Camp Tax Credits? | 07.14.10

Caleb Newquist
July 14, 2010

We Can’t Always Get What We Want: Why Governing Americans is So Hard [TaxVox]
Basically it’s because as a group, we’re children. We throw tantrums until we get what we want and stomp around the living room when we don’t.

“[O]ur demands on policymakers are so inconsistent and irrational that we make governing nearly impossible. We hate big deficits, but oppose the actual tax increases or spending cuts that we need to dam the flood of the red ink. We are furious that government passed an $800 billion stimulus last year, but feel lawmakers are not doing enough to get the economy going. We want government to “do something” about the gulf oil spill but reject government interference in private business.”

Women CFOs Holding Steady [CFO]
In the Fortune 500, there are 44 woman CFOs, the same number as last year.

“What are the prospects for women breaking the 10% barrier? At least some are hopeful the numbers will climb in coming years, albeit not dramatically. ‘Anecdotally, I am seeing a next generation of female finance leaders who can and want to rise to the CFO role,’ says Lorraine Hack, executive recruiter with Heidrick and Struggles. She adds, ‘I have seen a lot of companies becoming more cognizant of diversity, or the lack thereof, and making a conscious effort to recruit, retain, and grow such talent.’ “

U.S. Business Groups Air Policy Concerns [WSJ]
“Washington’s major business groups plan a united front Wednesday in their confrontation with the Obama administration over economic policy, calling on the White House to cut taxes and curb its regulatory agenda.

Business groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Businesses will air a list of concerns about government policy at a “Jobs for America Summit” at the Chamber’s offices Wednesday.”

Wall Street Fix Seen Ineffectual by Four of Five in U.S. [Bloomberg]
“Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis. More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure.

A plurality — 47 percent — says the bill will do more to protect the financial industry than consumers; 38 percent say consumers would benefit more.

‘Banks and the government are making out, not the ordinary person,’ says Lenore Critzer, a 70-year-old retiree and poll participant who lives in Nelson, Ohio, about 40 miles from Cleveland. ‘We’re going to have another crisis and worse.’ “

A tax credit for summer camp? IRS says it’s true [Kansas City Star]
Unfortunately, expenses for overnight camps do not qualify. So parents will have to squeeze the sex in during the day somehow.

Quote of the Day

Have Americans Embraced…Saving?

Caleb Newquist
July 14, 2010

“[I]t’s like saving money when they shop is a new kind of game, a way to stick it back to the man.”

~ Pat Conroy, vice chairman and Deloitte’s consumer products practice leader, is proud of all the consumers out there.

Salaries

(UPDATE) Promotion Watch ’10: Grant Thornton Admits 22 New Partners/Principals

Caleb Newquist
July 14, 2010

From a voracious reader of Stephen Chipman’s blog:

GT just announced the admission of 22 new partners/principles notably 5 from NY, 5 from Alexandria and 3 from NC – 9 from audit 3 from tax and 3 from advisory

Yes, we realize the numbers don’t work but we’ve confirmed the details we’ve got. We hear there’s an email floating around out there so if you’ve got it handy, fire it our way.

We also heard that comp news has finally gone out so kindly report below or shoot us the details.

UPDATE – July 14, 2010: We received a copy of Stephen Chipman’s email which we’ve presented here for your reading pleasure.

Internal distribution only
Partner/Principal Admissions
One of the highest and most visible forms of demonstrations of stewardship within a partnership come thorough admitting new partners and principals. This represents a critical underpinning for our continued vitality and success. It is within this context that we are pleased to announce the following individuals will be admitted to the Firm as partners or principals, effective August 1, 2010.

Having outstanding partners and principals is an important differentiator for our Firm in our ability to serve our clients with distinction. Each of these professionals has demonstrated their dedication to making a difference – to our clients, to our profession, to our communities in which we live and work, and to our Firm. Their commitment is reflective of personal responsibility, sacrifice, and accountability which we now pause to recognize.

Please join us in congratulating them on this significant recognition of their contribution and in wishing them continued success as partners and principals of Grant Thornton.

Stephen

And here’s a further breakdown of the promotions by service line:

Global Public Sector – 5
Transaction Advisory Services – 2
Corporate Tax – 2
Audit – 9
Corporate Advisory and Restructuring – 2
Corp. Strategic Federal Tax Services ~~(can some demystify this acronym?)~~ – 1
State and Local Tax – 1

And by city:

Alexandria – 5
NYC – 4
McLean – 1
Kansas City – 1
Cleveland – 1
NY – Melville – 1
Charlotte – 2
L.A. – 1
Raleigh – 1
San Diego – 1
Denver – 1
Atlanta – 1
Wisconsin (Milwaukee?) – 1
Chicago – 1

Congrats to all the new partners and principals at Grant Thornton!

(UPDATE) PwC Houston Happy Hours Still May Not Be Safe

Caleb Newquist
July 14, 2010

It’s been a couple of weeks since we reported on the alleged incident at a PwC happy hour that involved a drunk (or roofied, depending on who you ask) partner who made his fondness for an associate known only to follow it up with a knuckle sandwich (we’re picturing a right cross).

Well, we decided to check in with a source down in H-town to see if there was any blowback from this whole situation.

I heard that PwC wasn’t going to do anything because of his client relationship and only offered the guy the chance to get off the job.

Well! Not exactly what we expected hear and we decided to check things out. Through a friend of capable means, we were able to verify the partner’s employment with the firm.

So then we emailed PwC spokesman Jon Stoner again about the incident but we have yet to hear back. Then we called the partner-in-question and left him a voicemail, asking very nicely to call us back. So far, he hasn’t returned our call but there isn’t any evidence by his greeting that he has left the firm.

So…you can see the conundrum here. What are Houston assurance associates going to do if they can’t drink beer on company dime without fearing a punch in the mouth (and possible getting an unwanted tongue down their throat)? Spend their own money? God forbid. If you know more about this, get in touch.

UDPATE: Just a few more details to share with you – we’ve heard from multiple sources that there were multiple kissing incidents at the happy hour. So while it sounds like more love (albeit unwelcome) was being spread than violence, that doesn’t mean you should be risking the invasion of your personal space for a few cocktails.

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