Going Concern

Compensation Watch ’10: More People at Deloitte Will Receive Raises This Year

Caleb Newquist
May 12, 2010

Some straight talk from Barry Salzberg:

Barry had a [recent] session in LA at which time he said essentially the following about comp:

1. Raises and bonuses will be distributed this year
2. Raises and bonuses will be larger than last year, but are unlikely to return to “pre-recession” levels any time soon
3. More people will be receiving raises and bonuses this year

Unfortch, Deloitte doesn’t seem to be getting involved in the pissing match with E&Y and PwC by putting a number out there but “more people” and “larger” are both somewhat encouraging, no? Well, not really, according to our source:

To my knowledge, we’re not getting any more info. On the people side; the video didn’t say anything new and everybody knows that the economy’s getting better and that Deloitte’s doing better; so we all assumed it was going to be like he said. Without a number benchmark, words are pretty much useless.

IRS
News

The TIGTA’s Nagging of the IRS Delves into Phone Etiquette

Caleb Newquist
May 12, 2010

In case you’re not up to speed on the federal bureaucracy org chart, the Treasury Inspector General for Tax Administration’s expressed purpose is to tell the IRS what it is they suck at doing and what they can do to quit sucking at it.

The latest bad report card for the IRS is that of protecting the identity of taxpayers who call the Service for help. The epic fail is due to customer reps not being inquisitive enough when identifying callers and not their inability to use their inside voices. The TIGTA presents its displeasure with the phone “assistors” in its latest report:

From our statistical sample of 180 contact recordings, we determined that assistors did not properly follow procedures when authenticating 29 (16 percent) callers, increasing the risk of unauthorized disclosures. Based on these results, the projected number of callers with increased risk of unauthorized disclosures is 44,067 for 1 week.

So, you figure 2.2 million unauthorized disclosures a year. Maybe that’s a legitimate concern but in the grand scheme of things, is it really that bad? If you consider the fact that 22.4 million people aren’t even getting help, that seems like a pretty good number. Regardless of our realistic standards, the TIGTA has more harping to do:

During our review of 48 (27 percent) of the 180 sampled calls, we were able to overhear other assistors discussing other callers’ Personally Identifiable Information. For 10 calls (6 percent), we were able to clearly hear parts of conversations with other callers. For 38 calls (21 percent), other assistors’ interactions with callers were overheard, but we could not clearly understand the conversations. This happened because assistors did not put callers on hold when they were researching the taxpayers’ accounts. Also, the physical layout of employee workstations at call centers allows other conversations to be easily overheard.

So in this particular case it sounds like the IRS has two choices 1) force everybody to become low talkers or 2) spring for a larger cube farm so people aren’t up in each other’s shit.

The real question her is, can we realistically expect an error rate of zero from the IRS? When did “good enough for government work” no longer apply?

Telephone Authentication Practices Need Improvements to Better Prevent Unauthorized Disclosures [TIGTA via TaxProf]

Reminder to Nonprofits: 990s are Due By May 17th

Adrienne Gonzalez
May 12, 2010

Nonprofits don’t need the reminder but we’re going to remind them anyway: May 17th is the new deadline to file your Form 990s (it would have been the 15th but that happens to fall on a weekend, consider yourselves fortunate, procrastinators).

The Boys and Girls Clubs and Goodwills of America have probably already filed their 990s but what about the tiny, grassroots organizations that didn’t get the memo when Service rules changed to require even small non profits under $25,000 to file 990s?

The guess is that up to 1/4 of all non profits could inadvertently lose their tax exempt status by missing the May 17th deadline without even realizing they were supposed to file anything at all. It costs $750 to refile after losing said status, so blowing it could be a costly alternative to hiring a professional to get the 990 in order for a small, simple nonprofit.

This isn’t merely busywork presented to nonprofits for shits and giggles, as we all know the Service would never EVER waste anyone’s time with bureaucracy and paperwork just for kicks. The IRS is seeking to clean up tax exempt status claims to exclude agencies that exist in name only or simply for the tax break. In its view, leaving NFP organizations that take in less than $25,000 a year largely unchecked left the fraud door swinging wide open. And as we all know, the Service has a duty to the taxpayer to collect everyone’s fair share.

The Pension Protection Act of 2006 mandates that all nonprofits must file a 990 for three consecutive years, making 2009 (and thus May 17th) the 3rd year. Orgs that have not filed 990s will automatically lose federal tax exempt status.

The good news is that if you are trying to claim a tax deduction for a donation to one of these little bitty nonprofits that will be losing their exemption, you can still do so up until the date the Service notifies the charity that it can no longer claim tax exempt status.

All is not lost, of course, as those familiar with IRS tactics presume that “offenders” will be offered a chance to redeem themselves (after steep penalties and late fees, of course).

More on the 990 Filing Deadline:
When a Tax Time Bomb Goes Off: Repurcussions Await Some Small Nonprofits

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

Accounting News Roundup: Why Did Power Integrations Fire Their CFO?; Spain Making ‘Sweeping Austerity Measures’; GM May Want GMAC Back | 05.12.10

Caleb Newquist
May 12, 2010

Power Integrations fires chief financial officer [AP]
Not to worry Power Integrations investors, Bill Roeschlein’s firing “was not related to financial statements or regulatory issues,” according to the company. However, he is currently the “subject of a felony domestic assault criminal complaint filed in Missouri,” which he denies and naturally he will “defend himself vigorously.” Unfortunately, that might cut into the job search.

Spain joins euro zone austerity bandwagon [Reuters]
Spain has agreed to “sweeping austerity measures,” cutting civil service pay 5% and freezing it for 2011. The country will also cut approximately 13,000 public sector jobs.

Minority Owner Sues Cuban, Calls Mavericks ‘Insolvent’ [NYT]
Ross Perot, Jr. is suing SEC target Mark Cuban, accusing him of turning the Dallas Mavericks into a financial catastrophe. The Times reports, “Perot is seeking damages, the naming of a receiver to take over the team and the appointment of a forensic accountant to investigate its finances. Perot said that Cuban’s actions had diminished the value of his investment in the team and violated his and other minority owners’ rights.”

Cuban, as you might expect, isn’t impressed with Charts Boy, Jr.’s loserness. He wrote in an email to the Dallas Morning News, “There is no risk of insolvency. Everyone always has been and will be paid on time. Being in business with Ross Perot is one of the worst experiences of my business life. He could care less about Mavs fans. He could care less about winning.”

Failed Bomber’s Resume Fail [FINS]
Faisal Shazad’s resumé sucks.

Is G.M. Looking to Buy Back GMAC? [AP]
Sources say that GM is interested in buying back GMAC (now known as Ally Financial) “so they can offer more competitive lease and loan deals.” The U.S. Government currently owns 56% of GMAC and 61% of GM, who plans to announce its first quarter earnings next week.

Quote of the Day

Memo to Big 4 Partners

Caleb Newquist
May 12, 2010

“Overtime-induced work stress might contribute to a substantial proportion of cardiovascular disease.”

~ Gordon McInnes, professor of clinical pharmacology at the University of Glasgow’s Western Infirmary.

Bonus Watch ’10: Ernst & Young Is Rewarding The Hard Workers

Caleb Newquist
May 12, 2010

From the mailbag:

EY Mclean Office- partners are reaching out to people giving $400 spot bonuses for hard work during busy season.

This particular lucky duck was in the tax practice. Cash? Gift certificates at the Cracker Barrel? Just McLean? If you’re getting greased, phone them in.

Today in Tax-Related Violence: Man Shoots at H&R Block Employee for a Mistake on His Tax Return

Caleb Newquist
May 11, 2010

It’s been far too long since we’ve heard about violent and/or completely irrational behavior as it relates to taxes, hasn’t it?

Thank God for Ohio, where bulldozers are commonly used to show disdain for pretty much anything. This time it’s firearms.

Police said a man opened fire on a woman after she apparently made a mistake on his taxes. Officers said the man threatened to get revenge on the H & R Block employee because he was audited by the IRS. Dayton police said they [sic] shooter fired several shots into the tax worker’s car. However, she managed to dodge the bullets.

There are lots of things that might conjure up murderous rage but a mistake on a tax return prepared by a H&R Block employee? The good news is that this lunatic is still on the loose somewhere.

Police: Shots Fired At Tax Worker [WHIOTV]

News

Fire at Grant Thornton Boston

Caleb Newquist
May 11, 2010

May 11, 2010 – The Boston office was evacuated due to a fire in the building. All Grant Thornton employees appear to have been evacuated safely.

Sure enough, we tried calling Beantown and we were automatically re-routed to GT New York. If you’ve got details, get in touch.

News

Grant Thornton Saying Aloha to Honolulu Office

Caleb Newquist
May 11, 2010

Over the weekend we learned that Grant Thornton was pulling up the stakes in Hawaii. According to our sources, the partners of the Honolulu office will be purchasing the business from GT and joining Pannell Kerr Forster, and international network of independently owned firms (U.S. locations).

GT Honolulu has approximately 60 professionals and according to one source familiar with the situation, all will be retained after the transaction According to our source, Doreen Griffith, the Honolulu Office Managing Partner will be moving to the San Francisco office to lead the tax practice there while Patrick Oki, an assurance partner will head up the new PKF office.

Our source told us that the reaction of the GTers was that of surprise but not upset, “I would say that employees are very happy but shocked.”

Grant Thornton’s disposal of this office follows the closure of its Madison, Wisconsin office, announced just last month and the Greensboro office that we reported on back in February. Several sources have speculated that Grant Thornton is moving out of smaller markets to focus business opportunities in larger markets.

Despite these moves, none of them had been previously mentioned on either of the the firm-wide calls held by Grant Thornton CEO Stephen Chipman held this year.

PKF North America’s President & CEO, Terry Snyder spoke with us briefly about the transaction, confirming that the partners in Honolulu were taking over the business from Grant Thornton and that Mr Oki “was the man to speak to.” He declined to comment on GT exiting the Honolulu market.

Messages left with Patrick Oki, Doreen Griffith and Grant Thronton’s national PR team were not returned. Emails to both Mr Oki and Ms Griffith were not returned.

If you have information on this transition in Honolulu, you can drop us a line at tips@goingconcern.com.

Career Center

Job of the Day: Computer Sciences Corporation Needs a Senior Accountant

GoingConcern
May 11, 2010

Computer Sciences Corporation is looking for an experienced accountant to join their group in Sterling, VA. The position is responsible for supervising the posting and balancing of general and subsidiary ledgers, along with account analysis and journal entries.

The position requires a bachelor’s degree, a minimum of six years experience, including three year of supervisory experience and a CPA license is a plus

Company: Computer Sciences Corporation

Title: Accounting Senior Supervisor

Location: Sterling, VA

Description: Supervises the posting and balancing of general and subsidiary ledgers; ensures accuracy and timeliness. Oversees the preparation of account analysis and journal entries to ensure records

Responsibilities: Supervises the posting and balancing of general and subsidiary ledgers; ensures accuracy and timeliness; Oversees the preparation of account analysis and journal entries to ensure records are organized and standardized; Oversees the coding of invoices and vouchers with proper account distribution support to ensure accuracy and validity; Oversees and prepares, as appropriate, foreign currency exchange and remeasurement calculations and journal entries; Supervises and assists in the compilation of data for preparation of regularly scheduled and special accounting reports; verifies statements to ensure accuracy and to meet company information needs; Supervises and assists in the implementation of accounting systems and accounting control procedures to ensure adherence to company guidelines; Recommends and/or initiates the selection and hiring of employees. Trains and evaluates employees to enhance their performance, development and work product. Addresses performance issues and makes recommendations for personnel actions. Makes recommendations for salary increases, transfers and terminations to manager; Provides supervision of the accounting staff to ensure activities are completed accurately and in a timely fashion. Analyzes and resolves work problems or assists employees to resolve problems;

Qualifications/Skills: Bachelor’s degree or equivalent combination of education and experience; Bachelor’s degree in business administration, accounting or related field strongly preferred; Six or more years of accounting experience; Three or more years of leadership experience included; CPA or CPA candidate preferred; Experience working with generally accepted accounting principles; Experience with SAP, Hyperion and Lotus Notes a plus.

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

Small Business Still Not Showing Signs of Life

GoingConcern
May 11, 2010

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

Don’t look for small businesses to lead the economic recovery.

The monthly reading from the National Federation of Independent Business Index of Small Business Optimism clearly shows little optimism among small business.

Sure, nine of the 10 components that comprise the index rose from the prior month.

However, some of the critical factors that would indicate whether small business owners plan to invest in their firms did not show encouraging results. The NFIB’s job measures barely moved and capital expenditure plans were flat.

More specifically, according to the survey average employment per firm was negative in April. What’s more, since July 2008 employment per firm has fallen steadily each quarter, logging the largest reductions in the survey’s 35-year history.

If small business is key to job growth – as some pundits think – then this does not bode well for our economy.

And the jobs small businesses create are not exactly great ones. They are more likely to come without benefits and less time off for vacation.

Meanwhile, the Index does not suggest that small businesses will be investing heavily in non-personnel. It noted that plans to make capital expenditures over the next few months were unchanged from the prior month and its reading is only slightly above the 35-year record low.

Yikes!

The survey also noted that small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stock. In fact, more owners plan to reduce stocks than plan new orders, according to the NFIB.

Meanwhile, regular borrowers continued to report difficulties in arranging credit. “Historically weak plans to make capital expenditures, to add to inventory and expand operations also make it clear that many borrowers are simply on the sidelines, waiting for a good reason to make capital outlays and order inventory that requires businesses to take out the usual loans used to support these activities,” the report notes.

Obviously, small businesses are not going to turn this economy around any time soon.

Michel Barnier: EU Is ‘Impatient’ with SEC, FASB Pussyfooting Around on Accounting Standard Convergence

Caleb Newquist
May 11, 2010

Michel Barnier is certainly doing his damnedest to make a name for himself by virtue of the accounting standards convergence and scrutinizing the role of auditors.

Accountancy Age reports his latest soundbite at a speech in Washington today, telling “leaders” that while their efforts to converge international accounting standards and U.S. GAAP are admirable, that he and the entire continent of Europe are getting sick of the stalling.

“I appreciate that the US authorities have made progress towards convergence, but in the EU, we are getting impatient.”

Apparently Mr Barnier has had enough with this little dance going on between the FASB and the SEC. The FASB has been punting to the SEC fairly regularly and we’re all aware of the SEC’s tendency for inaction, so maybe Barns figured that a Frenchman calling out Americans on their own turf would help move things along.

Barnier tells US that Europe is “getting impatient” on accounting convergence [Accountancy Age]

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