Going Concern

Deloitte

Deloitte Admits to Handling Layoffs ‘Poorly’

Caleb Newquist
April 8, 2010

That “All-Hands” meeting we told you about on Monday sounds like it was a real snoozer, however, a source who was there did share two interesting details:

The guys in charge basically told us the following:

– They handled the [May 2009] “headcount adjustment” poorly. It was a necessary action; but more communication was necessary to keep people informed.
– Deloitte is better poised to grow over the next few years as compared to their competitors (we saw projections, but no comparisons…)

That took about 1.5 hours.

Since this was an “all-hands” we’re assuming tax people were there? If so, the ones still trudging towards the 15th (one week!) had to be suffering borderline panic attacks. Or maybe it was a brief oasis? Either way it’s unfortunate that nothing came up about increase in comp. Maybe Deloitte is the one firm that is saving it as a big surprise. If the cat gets let out of the bag on comp, get in touch with us.

ANR
Audit

Accounting News Roundup: Charlie Rangel Has a Primary Challenger; Does Your Salary Define You?; PCAOB Wants Auditors to Consider Big Weird Transactions | 04.08.10

Caleb Newquist
April 8, 2010

• Rangel Challenged by a Historic Foe [WSJ]
Someone finally realized that Charlie Rangel’s constituents in New York’s 15th District have maybe had enough of Chuck and his “pay taxes as I wrote them, not as I pay them” ways. Rangs will be challenged in the primary by New York State Assemblyman Adam Clayton Powell IV, according to the Journal. Not only does Mr Powell have an upper hand in the ad campaign department but there’s a bit of history here.

Powell Number III, sire of IV, was defeated by ChaRang back in 1970 amid his own ethical trubs. ACP 4th Edition insisted to that this had nothing to do with sweet, sweet revenge, “It has nothing to do with revenge or anything like that. Anyone with that record in public service would be interested in higher office.”

It won’t be easy for ACP4 however. He was flicked away by Rangs in a primary challenge back in 1994 and was recently convicted of “driving while impaired,” which actually seems worse than hogging rent-controlled apartments, since that could result in, you know, someone getting killed.

• My Paycheck, My Self? [FINS]
Does your salary define you as a human being? Or, at the very least, does it feel that way? Master pay czar Ken Feinberg had to snoop around some people that pull down some hefty scratch and he found out that the human psyche can easily be affected by their pay stub.

• PCAOB Issues Staff Audit Practice Alert on Auditor Considerations of Significant Unusual Transactions [PCAOB]
Don’t worry about the plain old vanilla transactions auditors, the PCAOB needs you to be on the lookout for significant unusual transactions. What that entails, we don’t really know but we’ll assume that means any transaction, and the PCAOB means any transaction, that looks remotely out of the ordinary, has a funny name (that may or may not include a “105”), requires smokey-filled room approval etc., definitely give it a second look. Or a third.

Quote of the Day: Rich People Unite for Higher Taxes | 04.07.10

Caleb Newquist
April 8, 2010

“We’re calling on other wealthy taxpayers to join us to send the message to Congress and President Obama that it’s time to roll back the tax cuts on upper-income taxpayers.”

~ Mike Lapham, paper-mill heir, would like to pay more taxes.

News

Partners of Mazars, Weiser Approve Merger

Caleb Newquist
April 8, 2010

Seems like a long time ago when we’re speculating about Mazars merger with Weiser. Oh wait. It was. Busy season had just started.

At the time, it sounded like the deal was all but guaranteed, just a small matter of the partners voting on the merger and shazam! Global 6 Contender!

Accountancy Age reports that “vast majority of partners on both sides agreed to the officially resides in the good old US of A as “WeiserMazars.” The article states that no layoffs will occur as a result of the merger. AA also reports that the new executive board will be meeting next month to discuss “driving growth from the newly combined business.” Whether this includes more mergers in the Western Hemisphere, we can only speculate.

The combined firm has 12,500 employees including 680 partners. According to Mazars’ most recent annual report, the firm had over €773 mil in revenues (just over a $1 bil) while Weiser had just over $135 million in revenues.

WeiserMazars spokeswoman Laura Kucera provided us with the firm’s press release:

Weiser LLP Joins Mazars Group Worldwide to Offer Clients International Services Opportunities

Mazars, an international group specialising in audit and advisory services and Weiser, an audit and advisory firm with a strong presence in the north east region of the U.S., have announced today that their businesses are to combine.

Partners from both entities have voted to incorporate 74 Weiser partners into Mazars’ international integrated partnership. Reflecting this new arrangement, Weiser will become a Mazars member firm and be renamed WeiserMazars LLP.

The deal marks a new stage in the Mazars’ international development, and means that it will have member firm offices in 56 countries, served by 12,500 professionals, including over 680 partners.

Mazars and Weiser, which employs more than 650 professionals and has annual revenues of $ 135m, have maintained a close and fruitful relationship for the last ten years via a joint venture agreement.

Patrick de Cambourg, Chairman and CEO of Mazars says: “We have worked with Weiser for ten years via a joint venture agreement. This combination is the result of our excellent relationship, our shared values and commitment to offering high quality services to our clients. This enhanced relationship is a natural development based on our mutual trust. We are delighted to welcome Weiser into our partnership. They are a first-rate firm with an excellent reputation in the New York area market. It is an important step in Mazars’ development and our clients will benefit from the formal combining of our services in the U.S. market.”

Douglas A. Phillips, Chairman of Weiser, added: “Serving our clients means helping them on a global level, beyond borders. This is why we made the choice to develop an international joint venture with Mazars in 2000. Today, we are happy to develop our relationship with Mazars by fully joining the Mazars international integrated partnership as we know that when like-minded professionals work together, they obtain excellent results.”

A video interview with Patrick de Cambourg and Douglas Phillips, is available. Please contact us if you wish to receive a copy.

Since it’s inception, Weiser has provided quality accounting, audit, tax and consulting services to clients in industries spanning, manufacturing and distribution, real estate, financial services, healthcare, nonprofit, media/entertainment and automotive, as well as to high net worth individuals and their families. The firm is headquartered in New York City.

Big 4
DWB

Read This Before Getting Excited About the Big 4 Announcing Raises Early

Daniel Braddock
April 8, 2010

What was first a bold move by PricewaterhouseCoopers has now become a pattern for the Big 4 – announcing raises early!!! Woooo-hoooooo!

Or will it be more of a boo-hoo?

Never to be really subtle about anything, news of these promotions and raises is a clear indicator that the firms are trying to lock down their talent and keep the masses happy, and by happy, I mean remaining on the boat. Avoiding an exodus now is absolutely critical; too many people leave and the already short-staffed will be painfully crushed come fall interim work. But where is the balance between raises, bonuses, and promotions?

Early Promotions! – Ahh, the double-edged sword that cuts deep. Years of relentless work, 100 hour weeks, and passionate ass-kissing finally paid off and you’re bumped up ahead of schedule. Welcome to hell. Take the expectations dial and crank it to max; your boss just got free reign to play the, “Well you got skip promoted, no way you can handle this” card. And your peers? They’re no longer your peers because money and job titles make people finicky. Better focus on befriending the first year hires.

And speaking of money – because promotional raises are typically a smaller percentage for early promotes, there’s no tangible financial gain to being bumped up a year early. Why is this? Because you should be happy to be get promoted early. Last time I checked, warm and fuzzy feelings can’t be put towards the mortgage.

• Don’t waste time printing new business cards. – Some of you will soon be inheriting a new job title to slap on top of your newly polished resume. The firms run the risk of those moving up to manager might jump ship completely. Don’t be surprised if the senior-to-manager class is larger than expected. Because eenie meenie minie moe – you’re moving on. Remember, it’s expected.

• “That’s it?!” – Unless you were part of the 0.043% of those who received raises since 2008, you’ve been living in monetary stagnation for quite some time; many of you even complained about receiving the “you’re lucky to have a job” speech from your superiors. When you have the raise conversation this summer, keep in mind that it is a raise for two years of work. Two years; two busy seasons; two increases in monthly rent. Don’t let yourself get all giddy over seven percent.

Former Deloitte Intern Not So Good at Gambling on Corporate Card, Lying About It

Caleb Newquist
April 7, 2010

In blatant-misuse-of-the-corporate-credit-card news, a former Deloitte “trainee/student” (let’s assume an intern, shall we?) has admitted to racking up over £8,800 in gambling debt on his Deloitte issued credit card.

Umar Qureshi, using his Deloitte laptop no less, managed to lose the money in just a couple of months, October and November of 2008. At that point, Qureshi, rather than admit to being a horrendous gambler, lied about the charges, telling Deloitte that they were fraudulent. Depending on when this particular lie took place, he only managed to keep a straight face, at the most, for two months, as Deloitte terminated his contract in January of ’09.

Which is understandable. Gambling can be nerve-racking on its own but losing your ass on the Corporate Card has got to be a real pant-crapper. This makes for the second Big 4 degenerate loser to make headlines this year in the UK. Back in February, a ex-KPMGer really was rolling, slamming over £25,000 on his expense report.

Accountancy Age reports that the Institute of Chartered Accountants in England and Wales (“ICAEW”), “ordered that the defendant cease to be a provisional member and be ineligible for re-registration for six months, and that he be severely reprimanded.” As we mentioned in the KPMG case, we’re not sure what a “reprimand” entails but a weeklong diversity training with Barry Salzberg could be a possibility.

Luckily, for Qureshi a relative was kind enough to pay the debt owed to Deloitte, who must have really wanted the money back. It’s just principle.

Former Deloitte student admits £8k bill from online gambling [Accountancy Age]

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GoingConcern
April 7, 2010

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Some New Jersey Taxpayers Can Put Off That 1040 For Awhile Longer

Caleb Newquist
April 7, 2010

Are you dreading April 15th North Jersey? Thought so. With just over a week to go until deadline, it may have crossed your minds that you should start tearing your house apart for that W-2.

Well, you can postpone the treasure hunt for now because the IRS is showing mercy on you for the Biblical rainfall that poured on the Garden State last month.

The IRS announced on Monday that they are delaying the filing deadline “for taxpayers who reside or have a business in the disaster area. This includes the April 15 deadline for filing 2009 individual income tax returns, making income tax payments and making 2009 contributions to an individual retirement account (IRA).”

The counties declared a disaster area by the POTUS include Atlantic, Bergen, Cape May, Essex, Gloucester, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset, and Union and thus qualify for the extended deadline, which is now May 11th.

New Jersey makes the third state allowed a prolonged procrastination period, joining counties in Massachusetts and all of Rhode Island.

Don’t try to get cute though, Garden Staters, if you’re thinking you can falsely claim residency in one of the affected counties, the IRS will be all over your shit, “IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief.” So appreciate the compassion if you can get it but don’t get any ideas; the IRS is still watching.

New Jersey Severe Storm and Flooding Victims Have Until May 11 to File Their Tax Returns [IRS.gov]

Joseph Stack Was Oddly Polite Right Before Crashing His Plane into an IRS Building

Caleb Newquist
April 7, 2010

Considering the tone of Joe Stack’s manifesto, you’d think common courtesy would have been abandoned ages ago. Not necessarily so:

Perhaps it was a more sinister “have a great day” than we’re imagining, although the jig would have been up if he had given any indication about his plans (e.g. read the manifesto to air traffic control).

Michael Oxley Is Spreading the Good Sarbanes-Oxley Word to Nonprofits

Adrienne Gonzalez
April 7, 2010

Presented by Serenic Software. Download our free whitepaper – “5 Key Reasons Why Great Financial Management is So Important for Your Nonprofit Now”

If you’re a non-profit leader and free on April 12th, why not head to Washington and listen to Mike Oxley (yes, that Oxley, without whom SOX would still be the property of a certain Chicago baseball team and not the bane of accounting’s existence) speak about transparency and accountability for non-profits?

The ironic part, of course, is that non-profits don’t really have to suffer with the legislation named after Oxley but he’d like to see a little more, well, Oxley in NFP, even if it isn’t necessarily required by law.

[Oxley] will speak about the importance for nonprofit organizations to be transparent and ensure greater accountability with their financial standards to build on and preserve donor trust, strengthen the reputations of nonprofit organizations and associations, and enhance the overall nonprofit sector.

Attendees will include thought leaders from foremost nonprofits, trade associations and key congressional staff members. Both the House and Senate Ethics committee’s staff have deemed this a “widely attended event.”

My feelings on Sarbanes-Oxley have been expressed more than once here on Going Concern but I can sum them up thusly: more useful things could be done to “protect” the investor interest besides arcane SOX compliance and the PCAOB including but not limited to random auditor cavity searches, TSA-style interrogation of management, and waterboarding the internal audit team. Is Oxley trying to imply that non-profits should follow suit but only voluntarily and out of obligation to donors instead of investors?

Surely his plan is not that sinister.

Only because non-profits already have their own version of SOX in the Form 990 (which I have complained about before as well) that has all of their bases covered. The only SOX carry-overs are strengthened whistleblower protection and retention of documents in lawsuits, perhaps because non-profits may have been where Mike Oxley got his ideas.

SOX compliance costs averaged $2.9 million during fiscal year 2006, actually down 23% from the fiscal year previous according to FEI. Do you know many nonprofits who have that sort of cash lying around?

I think it might be better to get some advice from the guy who wrote the bill and start tightening up the ship just in case.

Recommended reading by April 11th if you’re checking out Oxley’s “I just want to be helpful” presentation: The Sarbanes-Oxley Act and Implications for Nonprofit Organizations (last updated January 2006). Bring a notepad.

Former Congressman Mike Oxley to Speak at Nonprofit Summit [Council for Non-Profit Accountability]

News

Accounting News Roundup: SEC Image Makeover is a Work-in-Progress; Washington Considers Increasing Sales Tax on Beer; Ex-CFO in Backdating Trial Blames Dead CEO | 04.07.10

Caleb Newquist
April 7, 2010

• SEC faces setbacks, skepticism in trying to reform its enforcement image [WaPo]
Whether you believe it or not, the SEC is trying like hell to turn it’s image around. As you know, this is not a small challenge when you check down the list of ball drops and/or embarrassing moments. Plus, when Real American Hero Harry Markopolos repeatedly refers to the SECstaff as idiots, who’s not going to believe him?

Tasked with this turn around, Mary Schapiro and Rob Khuzhami are on the offensive, doubling the number of investigations from ’08 to ’09, as well as doubling fines. Emergency stop actions have also increased over 80%, according to the Commission’s data.

Yet, some remain unconvinced, like Commissioner Luis Aguilar who was quoted in the WaPo, “I’m looking to see whether or not all of the new initiatives are actually resulting in improved sanctions. I don’t yet see the empirical evidence.” Patience, Luis. We hear there’s a couple of things possibly in the pipeline.

• Beer Today, Taxed Tomorrow [Tax Girl]
Everyone in Washington State that isn’t a recovering alcoholic (or a teetotaler) should probably start freaking out. WA is considering a “temporary” sales tax increase to 50 cents per gallon, or 43 cents per sixer, sayeth La Tax Chica. The current tax is 15 cents per six pack.

What’s worse (for most anyway) is that only “big-brand” beer is subject to the tax, leaving the micro-breweries alone and TG thinks this will be challenged as unconstitutional for protectionism. In our opinion, punishing people that drink bad beer is a completely acceptable sin tax, since they choose to drink the bad beer, unconstitutional or not. It definitely doesn’t help the college kids though; that’s an $8 extra on a keg.

• Ex-Maxim CFO Blames Dead Boss at SEC Backdating Trial [Law.com]
Carl Jasper is the former CFO of Maxim Integrated Products and is currently on trial for backdating stock options. This is the first case of this kind since the SEC started cracking down on the practice a few years ago. Mr Jasper is relying on the defense that his dead boss, Maxim founder Jack Gifford, is to blame.

The SEC finds this all too convenient:

Mark Fickes delivered a crisp, scripted opening statement for the SEC, beginning simply: “This case is about cheating and then lying about it.” Fickes hammered on the hard-to-ignore fact that Jasper is an accountant who presumably knows accounting rules about granting stock options.”When it came to accounting, no one knew more at Maxim than the defendant,” he told the jury.

Yeah, so that could be a bit of a problem for Jasper which is probably why he invoked his 5th Amendment privilege.

News

Quote of the Day: The AP Doesn’t Hire Criminal CFOs | 04.06.10

Caleb Newquist
April 7, 2010

If you want to know what the firm’s actual P&L is like, I suggest you read people who can perform basic addition and subtraction.

~ Barry Ritholtz, who was not impressed with the Associated Press story on Overstock.com’s 2009 profit. He suggests this.

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