Going Concern

The Big 4 vs. Private Sector – Shoulda, Coulda, Woulda?

Daniel Braddock
June 2, 2010

Happy ~~MoanDay~~ Tuesday, everyone.

Last week’s post about Big 4 firms lowering the bar on starting salaries in order to project artificial pay raises was well discussed in the comments section. Thank you to everyone who commented, as that’s what makes this online community vocally vibrant and a joy to be a part of.

Part of the conversation included a debate about whether it is better to begin a career in accounting with a Big 4 firm or in the private sector; two very different career paths. The question is a legitimate case of shoulda coulda woulda. The following are a few comments from the peanut gallery:

• Guest said, “Even though I was offered $55k + $5k bonus out of college for a Big 4, I was VERY close to not accepting the offer and instead going with a private firm that was $60k starting and normal hours. The only reason I went to the Big 4 was because I fell for the trap of ‘the name recognition.’ If I could go back in time, I would have chosen the private firm.”

• Another Guest crunched the numbers, “In a Big 4, you’re overworked about 20-25% more than the private sector (if not, then more). Say a Big 4 offers you $55k starting. Your “REAL” salary relative to your peers would in fact be $55,000 / 1.25 = $44k. If you lower it to $50k for a first year, that equates to a real salary of $40k.”

• Finally, 2nd Year Associate chimed in with, “Plenty of my college pals are making upwards of $10k more than I am a year and they don’t even have their CPAs. I joined public accounting to get ahead over the next 5 to 10 years but if my pay was any less I’d have skipped this route completely.”

I think it all depends on where your career is at. If you graduated in 2007 or 2008, you might be less thrilled to be on the public accounting career. The double digit percentage raises for everyone on the team that were fiercely promoted by the Big 4 campus recruiting machines have yet to materialize for you, and now you find yourself lumped into the “just happy to have a job” group. Your classmates that went the private route have been cruising on decent pay and 45 hour work weeks. Nothing good to see here; move along.

If you’re 4-8 years into your career, you’re obviously in a different place. You’ve experienced the 15% raise, climbed the corporate shuffleboard to senior staff or manager, and utilize the phrase, “when I first started here…” all too often. You’ve earned your stripes after a number of busy seasons; your desire for a new job is to be better respected by your superiors. Pay isn’t everything, but it’s important.

Throughout all of this, you’ve benefited from the resources of working at a large firm (no, I’m not talking about free dinners). The training programs have been extensive, your CPA license is paid for, and you’ve been enjoying as much of your five weeks of vacation as the firm allowed you to take. And what about having the name on your resume? Having a pedigree firm on your resume can oftentimes land you the interview; earning the pay day is up to you.

So why did you enter into public accounting? Was it because the Big 4 had a strong presence on your campus? Were private companies not offering enough? Would you change anything about your career path to this point? Leave your thoughts below.

News

FASB Chair: Yeah, We’re Not Meeting That June 2011 Convergence Deadline

Caleb Newquist
June 1, 2010

Yes, that’s your shocking headline of the day. Despite the retripling of efforts via videoconferencing and other fancy-schmancy technology, some Frenchman losing patience, and having a Knight spearheading 50% of the efforts, they will utlimately fall short of the June ’11 goal.

We know. Catch your breath or place yourself back in your chair, and then you can read Emily Chasan’s account from Reuters:

The Norwalk, Connecticut-based FASB and the London-based International Accounting Standards Board expect to announce changes to their convergence work plan in the next week or so that would delay the completion date by about six months and allow for greater public comment on the boards’ proposals, FASB Chairman Robert Herz said in an interview with Reuters.

“We’ve been working on a revised work plan with the IASB,” Herz said.

“We’d all like to see the work done as expeditiously as possible, but we don’t want to sacrifice proper due process.”

Herz said that to issue final standards by June 2011, the boards would have to release about 10 proposals in the next two months and rush through the public comment process.

It was nice of the FASB and IASB to say, “June? No problemo,” to the G20 BSDs but many organizations, including Financial Executives International, and even Chief Accountant Kroeker said that the overachieving might lead to some shoddy accounting standards.

Mr Herz is still optimistic about finishing up before 2012 telling Reuters that the two Boards will “get most if not all of [the accounting standard proposals] done by the end of 2011,” which is probably enough time for IFRS to be adopted by everyone. But then the world is on a strict deadline to end in 2012, so why are we bothering with this again?

FASB says will not meet 2011 convergence deadline [Reuters]

Will Self-insured Companies Bear the Brunt of Rising Healthcare Costs?

GoingConcern
June 1, 2010

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

The employer-sponsored health care system provides health insurance to more than 60 million people–but it does not exist in a vacuum. Employers are often reminded of this fact when their health care costs go up each year. Factored into that cost increase are premiums employers pay to hospitals to help those institutions provide care to the uninsured.

Two years ago the actuarial firm Milliman put a price tag on this cost-shifting: employers pay an additional $1,115 more for a family of four’s health insurance to make up for this loss. That totals about $88 billion annually.

This cost-shifting is once again becoming an issue as the federal government looks to provide insurance to people who cannot otherwise get it because they are considered high-risk.

States have for years created high-risk pools to separate the people with especially high health care costs from the rest of the population. Normally these folks can’t get insurance. The high risk pool absorbs some of the cost to insurers.

Now the federal government is getting in on the action, in large part to address the issue that insurers regularly refuse to issue insurance to some people or they do so at rates that are prohibitively high.

A new analysis on so-called high risk insurance pools that the federal government will set up as soon as July as a result of health reform makes the point that the money allotted will run out much sooner than originally thought. Instead of covering as many as 7 million people who could qualify there will likely be enough money to cover about 200,000 annually. This is not surprising. The need is always greater; the funds always inadequate.

So what does this all mean for employers?

It appears one step removed. But, as employers know, the health care system is fragmented yet, in the end, someone – either the federal government or employers – ends up paying the cost. In the analysis, published by the Center for Studying Health System Change, the authors point out that states with high risk pools currently do not assess self-insured employer plans.

Under the federal law this will change. Employers will face an assessment. One possibility is that the assessment will have to go up in order to increase the amount of money in the pot. The other of course is to limit who can get access to the high risk pools.

It remains to be seen what kind of conflict this issue will provoke. Like many other aspects of the new health care reform, it has the potential to fade away or to metastasize into something problematic.

But one thing remains likely: costs will continue to go up. The question is who will pay for these costs? If these assessments are any sign, it will be insurers and self-insured employers.

The Guy From Reading Rainbow Has a Small Tax Problem

Caleb Newquist
June 1, 2010

A refresher:

If that doesn’t mean anything to you, he’s also the dude with the bizarro shades from Star Trek, The Next Generation.

But back to the RR for a sec – many of you would be an illiterate waste of space if it wasn’t for LeVar Burton, so the least you could do is pitch in so the man can pay the $34,000 he owes California. Or at least ask your parents to help out. It’s the least they can do since LB probably bought them some much-needed private time back in the day while you were zoning out on the shower in the toilet.

Tax resistance futile for Star Trek actor [Tax Watchdog]
See also (if you want the RR theme song stuck in your head):
LeVar Burton Owes $34,000 in State Taxes… “But Don’t Take My Word For It” [Tax Docket]

Career Center

Job of the Day: Credit Suisse Needs a Controller of Expense Management

GoingConcern
June 1, 2010

Credit Suisse is looking for an experienced professional to join their IB Expense Management group as a Jr Controller – Expense Management in its Raleigh, North Carolina location.

The position requires four to six years financial reporting or financial services experience, preferably in investment banking.

Company: Credit Suisse

Title: Jr. Controller – Expense Management (ENO/AVP)

Location: Raleigh, NC

Responsibilities: Develop, execute and deliver monthly and ad-hoc non-compensation expense reports and analyses to support critical strategic and day-to-day decisions for various segments of the Investment Bank; Assist, when necessary, in the overall IB month end and with various ad hoc requests; Foster relationships and liaise with IB Finance, COO Finance and business COOs to ensure timely delivery of management reports; Collaborate with the Expense Management Efficiency project teams to identify valid assumptions and monitoring metrics for project savings; Partner with Global COOs and IB Finance to construct product-level budgets by region and to understand monthly non-compensation expense forecasts at a granular business level; Present forecast and budget information and commentary to senior management, coordinating with internal and external teams to aggregate data from disparate systems; Identify and implement enhancements to the non-compensation expense forecasting model and system reporting and analytics.

Qualifications/Skills: Bachelor’s degree or equivalent; 4 – 6 years Financial Services or Financial Reporting experience; Investment Banking and/or Capital Markets experience in one or more of the following areas: Financial Accounting and Control; Expense Reporting and Analysis; Financial Planning & Analysis; Experience with general ledger systems, data warehouse applications and reporting tools such as Essbase and Business Objects is preferred.

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

Barry Minkow Isn’t Buying Anthony Weiner’s Report That Says Goldline International Is More or Less a Fraud

Caleb Newquist
June 1, 2010

Last time we saw Congressman Anthony Weiner, he was attempting to discuss the IRS’ role in the enforcement of healthcare with spin-hater Bill O’Reilly. While that particular encounter was quite fun (especially Weiner’s huffing and O’Reilly’s eye-rolling) the video of the Congressman’s recent appearance on Fox Business News is quite good.

But what we’d really like to see him have a conversation with Barry Minkow about how that Barry thinks the Congressman’s report on Goldline International is unmitigated bullshit:

Friend of GC, Tracy Coenen participated in the Minkow’s investigation and she presents the findings over at Fraud Files Blog. Here’s a sample:

• Allegation: Weiner criticizes Goldline because of complaints on the website Ripoff Report lodged by consumers who say Goldline representatives improperly hold themselves out as investment advisors.

• What Weiner didn’t tell you: Ripoff Report says (in response to the consumer complaints) that you can feel completely confident doing business with Goldline. Weiner gave us only half of the story in his report.

Allegation: Goldline grossly overcharges for its products

What Weiner didn’t tell you: Our sampling of coins listed in the Weiner report showed that Goldline’s prices were very comparable to those of six competitors. He also forgot to mention that companies are free to set whatever prices they like for their products.

Allegation: Goldline says they’ll buy back your gold and silver, but doesn’t “guarantee” that

What Weiner didn’t tell you: It is against the law for Goldline to offer a buyback guarantee. If they offered such a guarantee, they would be in violation of securities laws because their salespeople are not licensed broker dealers.

Regardless of how you feel about Glenn Beck, gold coins, or Anthony Weiner’s Fox News-esque ability for interrupting, it kinda sorta sounds like the Congressman’s investigators don’t know a non-fraud when they see one. Besides, we’ll take the word of a convicted-felon-turned-fraud-buster over any report that comes out of Congress. Especially in an election year.

A message left with Congressman Weiner’s spokesperson was not immediately returned.

Goldline International: An In-Depth Look at Congressman Weiner’s Allegations, And How He Got It Wrong [FDI]
Barry Minkow debunks the Glenn Beck and Goldline International fraud connection [Fraud Files Blog]
Weiner Takes on Goldline and Fox Business — At The Same Time [Weiner.house.gov]

Career Center

Hate Your Job a Little Extra Today? There’s At Least One Recent Accounting Grad That Will Gladly Take Your Place

Caleb Newquist
June 1, 2010

Okay gang, we know this is a tough day. You quietly wept to yourself on your commute; you’re recovering from sunburns, hangovers and meat sweats. It’s an all-around bitch of a Tuesday. It’s bad enough that your weekends are ruined by your job but now your holidays have to be ruined too? We’d suggest doing away with holidays altogether but then all work and no play makes accountants duller than normal.

But you trudge on, capital market servant. You trudge. A lot of readers recite “I’m thankful to have a job in this economy” mantra which makes some of you sick. Whether your nausea at their grateful attitude is justified is a matter of debate but let it be known, there are people out there that would take that job that you detest with all your heart and soul at the drop of a hat:

Melanie Singer has been preparing for the job market ever since she entered college at the University of Dayton, a private Catholic school in Ohio.

Starting in her freshman year, she began working with a career counselor. She attended networking events, did three internships while in school full-time, and worked with a recruiter to help connect her with jobs.

Singer, 22, got good grades, studied abroad and even chose a degree — accounting — that was supposed to give her one of the best chances of finding work.

“Everything you read, accounting was in the top five positions to get a job in,” Singer says.

But while she was in school, the economy tanked. Today’s job market is worse than it’s been in at least a generation.

Singer can’t remember how many websites or companies she’s applied to — she began sending out resumes at the beginning of her senior year. A month after commencement, she still hasn’t found a job.

We certainly agree with “everything you read” statement. You’d be hard pressed to find a MSM list of any sort that places accounting or accounting firms in a negative light as it relates to a career choice. Maybe the accounting scene has taken a turn for the worse in the Buckeye State and she needs to venture out?

Whatever the problems in Ohio, it sounds like Ms Singer spent most of her college days practicing for job interviews rather than the traditional co-ed activities and yet has had a serious run of bad luck finding a job. This is unfortunate and we know that there are plenty of Ohio accountants out there that probably wouldn’t mind an extended vacation. So if you find yourself hating life a little bit more than usual today, perhaps you’d consider taking one for the team so Ms Singer can fulfill her dream of joining the workforce.

Accounting Grad Didn’t Figure On Job Rejections [NPR]

The CPA Exam Application Timeline

Adrienne Gonzalez
June 1, 2010

Since graduation season is once again upon us, we thought we’d revisit a time tested favorite question from CPA exam candidates: When should I apply for the CPA exam?

First, find out when your school posts degrees to transcripts and whether or not the state you are applying to requires a degree before you can apply. If you are unsure of your state’s requirements or which state you might qualify in, NASBA has a really handy search tool you can use ($10 for 24 hours of access). Or just check out the website to read up on your state’s requirements. If you need a degree before you can apply, you’re going to need to know how long you’ll be waiting for your school to post it. Don’t apply any earlier as your application will be rejected and you’re out the initial exam fee.

If you’re planning on jumping right in to studying, you can generally apply to sit for the exam right after your degree posts. Remember, at this point you want to have tied up all the loose ends in your life that will keep you from studying; crazy ex-girlfriend, slave-driving boss, roommate drama… you get it. Sweep all that aside and submit your application (and fees!) as soon as you can. Don’t forget, just because they cashed your check does not mean you have been approved to sit so don’t get excited if you see it clear a week after you sent it in. That’s usually the first thing they do since you’re out the fee whether or not you qualify and hey, who doesn’t want money?

Now, should you start studying right away? It depends on how long your state takes to process applications. If you are looking at a 6 – 8 week wait, you may want to hold off on cracking the books, especially if you plan to start with something small like BEC. If you start studying too soon, you run the risk of being denied to sit for the exam and losing precious CPA review time (many programs have expiration dates – always ask!) catching up on units you need to qualify. Don’t invest in a review course until you’re absolutely sure you will be able to start sitting for exams right away. If you come from a quick processing state (usually a search through the CPAnet forums can reveal more detailed information from other candidates in your shoes) and are absolutely certain you meet your state’s requirements, you can start studying as soon as you send in the application.

Congrats to the spring grads and feel free to get in touch if you’ve got any questions about the CPA exam!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Accounting News Roundup: Tipsters Expose Fraud More Often Than Most Controls; What if the PCAOB Is Unconstitutional?; BDO Could Question Forensic Accountant’s Credibility | 06.01.10

Caleb Newquist
June 1, 2010

Something Wicked This Way Comes [CFO]
A recent Association of Certified Fraud Examiners (ACFE) study discovered that “[o]f the top eight controls ranked by effectiveness, only one — surprise audits, which cut fraud losses by 51% — is part of the traditional accounting-based control structure. Financial-statement review, internal audits, and Sarbanes-Oxley-mandated certifications by CEOs and CFOs all ranked below the nonaccounting controls in terms of effectiveness in preventing fraud.”

Controls have no match for good old human conscience, “tips expose fraud three times as often as do management reviews, internal audits, or account reconciliations.”

The problem however, is that employees may not be getting the training about how to report fraud if they know it’s happening, “an unsupportive corporate culture and poor employee training leave potential whistle-blowers unsure of whom to talk to.” Plus the baddies are doing their best to dissuade them, as Sam Antar told CFO, “[They] don’t go down without a fight, they don’t fight fairly, and they are going to intimidate whistle-blowers — that’s the nature of their game.”

Accounting for Crisis [Portfolio.com]
Gary Weiss writes over at Portfolio about the impending decision in Free Enterprise Fund v. PCAOB and he’s not impressed with the FEF’s argument, “claiming that the board would give our Founding Fathers heart attacks because its members are appointed by the Securities and Exchange Commission and not the president and can’t be removed except for cause.”

That despite the PCAOB’s lack of fireworks in its daily activities, “The PCAOB has not exactly rocked our world—and obviously its existence did nothing to keep Lehman from its Repo 105 book-cooking scheme. But getting rid of it, particularly on specious Constitutional grounds, would be a blow to the cause of more accurate financial statements.”

The odds say that the SCOTUS will affirm the lower court’s decision but just in case, Gary agrees with Interim PCAOB Chairman Dan Goelzer that Congress needs to act fast if the Court surprises us and reverses the decision.

Clifton Gunderson buys Stockton Bates [Philadelphia Business Journal]
Philadelphia-based Stockton Bates will join Clifton Gunderson’s 1,900 employees and 300 partners effective today. Stockton has 32 employees between three offices in Philadelphia, Lancaster, PA and Haddonfield, NJ.

BDO Seidman fights claims brought by fraudster Lew Freeman [South Florida Business Journal]
Convicted forensic accountant Lewis Freeman testified in the case of ES Bankest and BDO. So it’s not outside the realm of possibility that Freeman’s conviction could call his credibility as a witness into question as well as the Bankest bankruptcy proceedings, where Freeman acted as the court-appointed receiver.

Hillary Clinton Sounds Like She Would Be Supportive of the Wealth Squads

Caleb Newquist
May 28, 2010

“The rich are not paying their fair share in any nation that is facing the kind of employment issues [that America is] – whether it’s individual, corporate or whatever taxation forms are.”

~ Secretary of State Hillary Clinton

Memo to CFOs: Layoffs, Frozen Salaries Don’t Always Save the Most Money

Caleb Newquist
May 28, 2010

Layoffs, pay freezes, pay cuts. Pretty simple cost cutting solutions for CFOs who’ve got tight budgets. Unfortunately, the slash and burn tactics for personnel may have been better applied in another area – inventory.

A recent survey performed by Greenwich Associates of midsized and small company “financial decision-makers” found that, in particular, midsized companies ($10 million to $500 million in revenue) that reduced their inventory, on average, saved 30% more ($520k inventory vs. $400 layoffs).

While that’s great news, the unfortunate part is that only 17% of the companies survey bothered with that particular cost saving strategy while 47% of those survey used “staffing reductions.”

The survey also found that while 37% of used pay freezes to reduced costs with an averaged savings of $245,000. Crunching the numbers, that’s nearly 53% less savings than the inventory reduction savings.

Of course, not all companies have inventory in the dusty-stacks-of-pallets-in-a-warehouse sense. This is especially true of the professional services/financial services area where, unfortunately, the staff are sometimes considered to be inventory.

Lesson from the Downturn: Cut Inventory, Not People [CFO]

Career Center

Job of the Day: A Global Bank Needs a Private Equity Controller

GoingConcern
May 28, 2010

Nevis Recruiting has a client in New York that is looking for someone to fill a VP/Controller position in their private equity business.

The position requires eight years experience in private equity reporting or at a large accounting firm and a CPA license is preferred.

Recruiter: Nevis Recruiting, LLC

Title: Private Equity Controller

Location: New York, NY

Description: Global Bank looking for a VP/Controller to support their growing Private Equity businesses.

Responsibilities: Supervise a team responsible for the accounting and financial reporting oversight for PE funds; Coordinate quarterly financial statement preparation with external administrators; Support investor and regulatory reporting; Coordinate the production and audit of annual financial statements; Liase with multiple teams within the Firm; Assist in the launch of new products; Support team, department, and business managers on various special projects.

Qualifications/Skills: 8+ years of experience in Private Equity reporting or from a large public accounting firm with significant PE clients; CPA preferred

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

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