Going Concern

CFOs

The Recession Taught Some CFOs That They Need to Pay Closer Attention to Miserable Employees

Caleb Newquist
March 27, 2010

Plenty of lessons came out of the financial crisis. For some it was that Big 4 auditors are irrelevant. For others it was that we need one set of high quality accounting standards ASAP. Aaaannnd for others, it was that the SEC needs to get better at pretty much everything.

For CFOs, it appears that at least some of them learned that miserable employees are a drag. Robert Half Management Resources surveyed 1,400 CFOs and 27% of them said “they learned to place greater focus on maintaining employee morale.”

It’s likely that this isn’t a lesson learned by just CFOs. Plenty of CPA firms have probably realized that a bunch of morose auditors and tax pros hanging around doesn’t make for a happy shop and are looking to improve their cheerleading skills going forward. KPMG has already brought back the Standing O, PwC, Ernst & Young, and Grant Thornton have all guaranteed merit increases for this year so there are signs that your happiness is no longer an afterthought.

CFOs Advise Keeping Employees Happy [Web CPA]

EY
Salaries

Compensation Watch ’10: Ernst & Young Still Planning on Merit Increases

Caleb Newquist
March 27, 2010

A little more from inside E&Y to round out the week. We got a tip earlier in the week that there was an oddly-timed town hall going on in Chicago this week. Our tipster indicated that the meetings usually occur after the June 30 year-end or in September.

We asked around and from the sounds of it, the meeting amounted to an extremely sober pep rally. The need for a little HR cheerleading is completely understandable, considering the month E&Y has had.

“[T]hey just talked about how they know morale is down, yet no plans for how to fix it. Additionally, they said there would be raises this year, but no mention of how large or small…[and] your basic HR ‘Thank’s for your help’ stuff.”

We haven’t heard the details for the cause “low morale” but it’s quite possible that it could be due, at least in part, to the ehmanlay rothersbay uckshowfay. Plus, busy season is in the home stretch and most people are just over it at this point. As far as fix for morale, our suggestions of Canadidan Tuxes, Timberlands and Hitler videos are obviously being ignored with extreme prejudice. We’re all out of suggestions. Maybe they aren’t the best ideas but at least we’re trying.

The silver lining here is that comp increases are still on the agenda after the initial announcement made by Steve Howe back in January. If they go back on this promise — we’re confident they won’t — you can just blame it on Dick Fuld.

News

Five Questions with Sara McIntosh

Caleb Newquist
March 26, 2010

Sara McIntosh’s (a pen name) blog is described as “Devoted To Rocking the Worlds Of Finance, Accounting and Auditing.” And if you’ve read any of her posts you’ll know that by “Rocking” she means in the carnal sense.

She is a lifelong writer and accounting/finance industry expert and entrepreneur. After earning an MBA at Northwestern, she started her own finance and accounting consulting business specializing in acquisitions, implementing worldwide accounting systems, haltingg systems malfunctions in global financial operations.

Having conquered all her professional goals she now focuses on writing, having completed her first novel Shell Games in the Summer of 2009. She is currently working on her second novel, Tricks of the Trade.

Accountants are . . .
Sexiest when thinking outside the box.

What are your three must-read accounting blogs and one must-read non-accounting blog?
• Francine McKenna’s posts here at GoingConcern and at her own blog, re:TheAuditors – There is no one else that I’ve read that tears apart the accounting essentials from complex 10Ks and 10Qs and scours board minutes to report on the indisputable facts about frauds and other financial shenanigans behind the recent financial crisis and pointing toward future blowouts waiting to happen.

• Professor David Albrecht’s The Summa – Hands-down his posts are the most interesting briefs on everything you need to know about accounting standards. That world is going through some crazy, most-likely-not-in-out-best-interest changes right now and he is one of the few voices in the industry trying to stop the decline in U.S. financial reporting standards.

• Edith Orenstein’s FEI (Financial Executives International) blog – What can I say, Edith is everywhere! If you only could go one place to find out everything going on in the accounting, finance and audit industries her blog posts would be the place to go, period.

• Chris Brogan – He blogs about blogging and other social media galore. He is an amazingly high-energy, extremely warm and witty guy—and it comes across in his posts, making them all the more memorable. He also has a best-selling book on the subject entitled, Trust Agents.

If someone had to read just one post of yours which one would it be?
According to the rest of the internet universe, “Handcuffed Without Consent.”

The biggest issue facing accountants today is . . .
How to restructure the audit industry to become a profession based upon integrity (auditors no longer selected, managed and paid for by the companies they audit) versus what we have today—an environment too often based on greed. If we get the restructuring of the audit industry right, the crooks who ruin it for the rest of the public audit professionals will leave the industry for more lucrative pastimes elsewhere—you’ll most likely find them in the executive suites of their former clients.

Best Accounting firm we’ve never heard of . . .
The Johnsson Group, based in Chicago. Their specialty is improving the internal financial operations of some of the largest corporations in the world. They’re the been-there, done-that consultants every major corporation wishes they had in their back pocket long before the regulators started knocking . . .

Big 4
DWB

What Can Big 4 Accountants Expect Come Compensation/Firings Time?

Daniel Braddock
March 26, 2010

Now that we’ve covered the natural and expected attrition of the Big 4 firms this time of year, let’s talk about what to expect if and when the post-busy season ax falls again. Per a reader’s request:

“Something similar to the salaries thread, except let the people tell us what $ package they were offered upon being “laid – off”, and how that was calculated (i.e. 1 weeks pay for every year of service? PTO paid out? 1 month severance pay?). I think this would be of interest to many folk out there who are about to be let go, as they can get a rough idea of what to expect and plan accordingly.”

I don’t expect the firings to be very widespread, but rather focused on small, top-heavy sectors (random, baseless examples – state and local tax in St. Louis, followed by IT advisory services in Atlanta). The reason for this is because the firms should be accounting for many to jump ship between April and Labor Day. Those up for promotion (“It’s coming this year, we promise!”) will bail in July/August once promo’s are announced.

For those of you only sticking it out to earn the manager title this summer before you leave, my advice is to start looking now. Inform your recruiters that the title is a mere formality and they will tailor their job hunts accordingly.

So. Let’s kick the weekend off with some wild speculation:

Potential Cuts:

• Federal tax groups
• Small offices and practices that have recently lost several small clients or one large client (e.g. PwC Orlando tax)
• Further cuts “when deemed necessary” before new hires begin in the fall

Safe zones:

• Hedge fund audits
• M&A advisory (based on KPMG whispers)
• IT advisory

Were you let go in the past two years? Share your severance packages in the comments so everyone can better gauge what to expect.

Career Center

Job of the Day: Citi Needs a Expense Controller

GoingConcern
March 26, 2010

Citi is looking for someone to join their Citi Capital Advisors (CCA) Financial Control unit as an Expense Controller. The position’s responsibilities center around budgeting, forecasting and reporting actual results for all operating expenses and headcount.

It requires a minimum of six years experience and is located in New York. Get more details after the jump.

Company: Citi

Title: Financial Control – Expense Controller

Location: New York, NY

Description: Financial Control is responsible for a variety of activities related to the firm’s financial reporting and controls. The team is divided into different areas of specialization where each member is responsible for a unique set of responsibilities that include both analytical and accounting roles.

Responsibilities: This position will assist in all aspects of expense management and legal vehicle reporting within the Citi Capital Advisors (CCA) Financial Control unit; The primary responsibility will be to drive the core expense management processes and assist the CCA Finance management team to create a best-in-class robust and controlled financial reporting process for both management and legal books. These responsibilities will be centered around budgeting, forecasting and reporting actual results for all operating expenses and headcount; The candidate will have significant input to streamline all aspects of the expense reporting processes.

Qualifications: Bachelor’s degree in Finance or Accounting degree required; 6 to 10 years of experience in financial control or related function required.

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

Fraud
Tax

Former NFL Player Avoids Prison…for Tax Fraud

Caleb Newquist
March 26, 2010

Typically when current or former NFL player gets into trouble with the law it usually consists of 1) drugs/alcohol 2) assault 3) the occasional (or shockingly frequent?) homicide.

Former Buffalo Bills running back Darick Holmes pleaded guilty last year to 15 counts of tax fraud and order to pay $53k in restitution to the IRS. He had been running a scam in Buffalo showing people how to file bogus tax returns, “Holmes admitted that, while spending time in Buffalo in 2004 and 2005, he helped people file tax returns that listed false information about where they had worked and how much they paid in taxes. When the tax filers received refunds, Holmes got a cut of the money.”

Holmes was sentenced to one year of home confinement which had the prosecutor all bent out of shape since Holmes’ co-defendant, Darryle Buckner, was sentenced to a year in prison and wasn’t found to be as “culpable” as Holmes. The judge felt that Holmes was remorseful (that’s a new one for a tax crime) and was impressed with his work with troubled teens.

Holmes has had a rough go of it, he was shot seven times right after his arrest in 2008, according to the prosecutor it was during an $80,000 marijuana deal. Yeesh, This prosecutor guy is really pissed about this sentence.

The real moral of the story is you’re probably better off listening to Joe Biden (?) than an ex-NFL player when it comes getting tax advice.

Ex-Bill Holmes avoids prison in tax fraud case [Buffalo News]

PwC
Salaries

Compensation Watch ’10: PwC Moving Up Adjustment Date?

Caleb Newquist
March 26, 2010

There’s been some whispering about PwC moving up its compensation and adjustment time frame from September to July and that’s got people curious.

At first glance this makes sense because the firm has a June 30 fiscal year-end. PLUS! Since Bob Moritz has already made it abundantly clear that there will be raises for 2010 we figure everyone would be excited to hear that the bumps would be coming a little earlier this year.

However, since everyone likes to jump to conclusions over the slightest little change, we’ll indulge. There have already been whispers of layoffs at PwC here and there but nothing that we’ve been able to confirm so people are probably antsy. And if the adjustment date is moved up we’re sure people are worried that means layoffs will be happening sooner rather than later. We can’t read anyone’s mind but we’re thinking this should be in the ballpark…

But if you’re anxiety is well founded, tell us why or get in touch.

UPDATE, a shade before 1 pm: One of our sources inside PwC shared their thoughts with us:

I think the overall feeling was positive…it will probably make some people happy (depending on the %) and hopefully limit the higher performers from going out into the market, however, it may also help some people look for jobs sooner (i.e. they don’t have to wait until September now, if the raises are low). Most people still have a lot of questions, including the estimate of the increase for each band of the rating system, what the bonus pool is going to look like, and although that is not being paid until September, whether we will know what the bonus amounts are in July.

Three Ways to Get Back into Study Mode for the CPA Exam

Adrienne Gonzalez
March 26, 2010

Masochism at its finest means just thinking about the CPA exam while fully head down, eyes closed and trudging towards the busy season finish line. It’s cool, CPAs are a masochistic bunch and if you’re going to subject yourself to the torture of studying for the CPA exam while tackling your least favorite part of the year, have at it but please be smart about it.

It’s almost April and you know what that means – a brand new testing window filled with fun and exciting >75 action. Hopefully 75s, if you little masochists plan right.

Here are a few tips, you can do whatever you want with them. Ideally, you can ignore them for the next few weeks until you shift from busy season mode back to exam mode.

• Don’t be unrealistic about your work load – Some of you complain about “busy season” and know damn well you haven’t pushed a difficult piece of paper in months while others haven’t seen the light of Facebook (nor the end of the tunnel) in weeks. Take a reasonable assessment of the free time you have to commit to the exam and plan accordingly. If you’re grinding all the way through April 15th, maybe a late April test date is a tad optimistic and not all that smart.

• If you aren’t ready, blow it off – This goes against everything I always recommend to CPA exam candidates but it’s a wise piece of advice this time of year. If you are not ready for an exam, try to reschedule. Maybe taking FAR on April 1st made a lot of sense when you scheduled it in October but now that April is almost here and you haven’t seen daylight in two months, it’s not looking like such a bright idea. Of course, if you’re in a situation where you are about to lose credit for exams previously passed but still not prepared, there’s no harm in going to the exam anyway as you’re basically forfeiting the exam fee and might as well find out what’s on the test for next time.

• Don’t permanent vacation yourself just because you’re tired – Shifting from busy season to exam mode, it is really easy to rationalize an extended vacation from studying just because you need a break. The rest is deserved but don’t let a few days of relaxation turn into several months of procrastination. It’s easier than you think and I’ve seen it enough times to know it happens all the time. Don’t be lazy, this is what you wanted.

Accounting News Roundup: Marion Barry’s Latest Trouble; IRS Phishers Go After the Gullible; Doug Shulman Is Sick of Being Asked if He Prepares His Own Taxes | 03.26.10

Caleb Newquist
March 26, 2010

• IRS officials file lien against Marion Barry [WaPo]
If you’re not familiar with Marion Barry, let’s just say that the guy has been in fair amount of trouble over the years. Check that, dude has been in a lot of trouble. Yet, somehow this man still somehow manages to get elected to public office in Washington, DC. The latest trouble involves a tax lien that has not been paid for taxes owed from 2005 to 2008, according to the Washington Post. It’s only $15,000 but considering what he could potentially spend it on (e.g. crack, girlfriend) the IRS kinda wants it.

It’s not like the Service hasn’t been trying to get the back taxes owed. They’ve been garnishing his wages $1,350 every two weeks and his attorney is quoted as saying that this “isn’t a new thing.” We agree. We’re been used to the idea of Marion Barry being an elected criminal for quite some time now.

• IRS Phishing Scams on the Rise [Tax Girl]
A random email from the IRS requesting things like your SSN#, your shoe size, bank account number and should be taken as seriously as an IKEA give away on Facebook. If the Service wants to get your attention, they do it by snail mail people. Lesson over.

• Tax writers can’t figure out the tax code, either [The Daily Caller]
When the IRS Commish was asked again about using a tax preparer, the Daily Caller quotes his curt response as, “I don’t have time for this … If you want an interview, you can call my office,” and sped away. He’s crackin’. Maybe he should just try doing his own taxes. Joe Biden used to!

Quote of the Day: If Felix Salmon Was on an Audit Committee | 03.25.10

Caleb Newquist
March 26, 2010

“If I was on the audit committee which received this letter, I would certainly be shopping my account right now.”

~ Felix Salmon, on Ernst & Young’s “hilariously disingenuous” letter to various audit committee members.

News

Eight Accountants Opt to Risk Their Professional Reputations

Caleb Newquist
March 26, 2010

We kid! We’re sure it it’ll be a rocking time being a Professional Accounting Fellow with the Office of the Chief Accountant and it will get them all into their respective partnerships with no problem.

The OCA hasn’t been overtly chastised by anyone to our knowledge so maybe this wing of the Commission is idiot and porn free.

• Jouky Chang, currently a director in Duff & Phelps LLC’s Valuation Advisory Services group based in Detroit, Mich.

• John M. Donohue, currently a senior manager in Moss Adams LLP’s audit practice based in Portland, Ore.

• Rachel M. Eckstein, currently a senior manager in Ernst & Young LLP’s National Professional Practice Group based in New York, N.Y.

• Michael Keehlwetter, currently a senior manager in KPMG LLP’s Department of Professional Practice based in New York, N.Y.

• Neil J. Laverty, currently a senior manager in Deloitte & Touche LLP’s Global IFRS and Offerings Services Group based in New York, N.Y.

• Josh D. Paul, currently a senior manager in PricewaterhouseCoopers LLP’s assurance practice based in San Jose, Calif.

• Christian J. Peo, currently a senior manager in KPMG LLP’s Department of Professional Practice based in New York, N.Y.

• Jason K. Plourde, currently a senior manager in Grant Thornton LLP’s audit practice based in Chicago, Ill.

Congrats to all honored. Try to stay out of trouble.

Office of the Chief Accountant Selects Eight Professional Accounting Fellows [SEC.gov]

Can the SEC’s New Chief Accountant of Enforcement Division Stay Focused?

Caleb Newquist
March 25, 2010

Howard Scheck is newest member of the SEC Dream Team, joining the Commission after leaving the Forensic & Dispute Consulting Practice of Deloitte Financial Advisory Services. Mr Scheck will serve as the Chief Accountant in the Enforcement Division, working for Robert Khuzhami.

Khuzhami is thrilled to have Howie on board, saying in the Commission’s press release, “Financial statement and accounting fraud are high enforcement priorities for the SEC, and Howard is highly qualified to lead our accounting staff in its relentless pursuit of these wrongful practices that are so harmful to investors.”

Sounds like Scheck is the man for the job, having been an forensic expert at Deloitte and working in the Enforcement Division for ten years as well but the question that really needs to be asked is, can he exert some self-control while on the job and avoid ladyboyx.com?

Not only has the SEC proven time and again that they aren’t the brightest group but that viewing porn on the job to cope with the stress is a-okay.

While other protectors of the markets are perusing the web for the best tranny-porn that can be seen for free, will Scheck be able to focus on slapping accountants on the wrist? Khuzhami seems like the no-nonsense sort but the herd mentality at the Commission may be too much to bear.

Howard A. Scheck Named Chief Accountant in SEC Enforcement Division [SEC.gov]

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