Going Concern

Career Center

Job of the Day: Dell Needs an Audit Consultant

GoingConcern
March 1, 2010

The description, qualifications and desired experience all sound familiar for an internal audit position but we’ll refrain from coming right out and calling it that.

Dell needs someone for this position that has at least four years of audit experience with CPA, CMA, CIA and APICS all highly desirable.

Get more details on this position in Austin, TX after the jump.

Recruiter: Dell

Title: Audit Consultant

Location: Austin, TX

Minimum experience: 4 years

Description: The consultant candidate will responsible for executing audit scopes formulated to evaluate the effectiveness, efficiency and sustainability of activities/economic drivers that create enterprise market value. Specifically the consultant will test whether an Risk Management framework exists and is functioning effectively for each selected auditable entity.

Responsibilities: Audit against a set of defined control objectives; meet project schedules; interview appropriate personnel and document results; perform appropriate testing; understand root causes, risks and opportunities of individual areas; synthesize ideas within the project team; write portions of published reports; track the status of action items; perform evaluations relative to management assertions based on accounting information arising from business activities; utilize independent judgment and initiative in the recognition and resolution of problems and discrepancies; provide guidance to the Business on matters pertaining to internal controls and process improvements; carry out ad-hoc investigations

Qualifications: A bachelor’s degree is required, MBA is a plus; four+ years of finance experience with a combination of the following would be preferred: Project management; Business controls; Audit experience
CPA, CMA, CIA and APICS certifications are all desirable; Language skills are a plus

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

(UPDATE) Jim Turley Breaks Out the Fancy Footwear for His Interview on Bloomberg

Caleb Newquist
March 1, 2010

~ Update includes quote from Britt Aboutaleb of Fashionista

We meant to get to this on Friday but there was a social engagement occurring that couldn’t be avoided; you know how it is. Anyhoo, the Ernst & Young CEO sat down with Bloomberg last Friday to talk tax policy and we found a few things rather interesting. Watch and we’ll chat about some things after the jump:

First things first: How about the two hotties that Bloomberg threw at JT?

Second: why does the MSM always refer to the “Big 4” as the “so-called Big 4”? Does Big 4 carry some negative connotation in some corners of society or is it meant to be a not-so-subtle dig, like when you call the token short guy on your team “big guy”?

Third and of utmost importance: what’s with JT’s footwear? Are those Timberlands? Does he just put on whatever the wife lays out for him or did she happen to take all of his wingtips to the cobbler this week? OR did he just get back from hiking the Appalachian Trail à la Mark Sanford?

Whatever the situation is, they look like they’ve gotten some good use. We’re not sure what Jimbo likes to do for recreation but it must involve some rugged backdrops that may involve him wearing a flannel shirt and chopping wood.

Britt Aboutaleb, one of the editors of our sister site, Fashionsita, had these thoughts, “I can’t even see the shoes — they look like they’ve emerged from a swamp! Maybe he forgot the shoes he was supposed to change into after trekking through the snow? Or maybe he didn’t realize his feet would be caught on camera…”

God, we hope JT could have arranged for some car service rather than schlepping through the snow. On the other hand, maybe walking to interviews is part of a green initiative? Either way, he could have brought the shoes along and changed into them. Just a thought.

On the other, to say that this is a fashion faux-pas would be an understatement akin to saying “E&Y had a few layoffs last year.”

News

SHOCKER: GAO Says the Federal Government Has Weak Internal Controls

Caleb Newquist
March 1, 2010

Talk about a blow. Everyone here at GC soiled themselves after finding out this piece of news.

The mother of all auditors, the General Accountability Office, released its FY 2009 Financial Report for the U.S. Government last week and things are, shall we say, typical. How typical? How about things are such a mess that the GAO can’t render an opinion on the consolidated financial statements?

“The U.S. Government Accountability Office (GAO) could not render an opinion on the consolidated financial statements of the federal government (other than the Statement of Social Insurance) because of widespread material internal control weaknesses and other limitations.”

That’s from the press release and while we were expecting a shitshow spread amongst all the agencies of the government, it’s due to the weaknesses in four agencies: the Defense Department, Homeland Security, State Department, and NASA.

Here’s the full rundown on the agencies from the report:

You may remember us noting the Defense Department’s audit problems back in the fall when we said:

For one of the 69 reviews the GAO performed, the audit report cited eight significant deficiencies in the contractor’s accounting system but since the contractor wasn’t really cool with that, the auditors dropped five of the [significant deficiencies] and recommended that the other three be “improved without additional work”.

So this really, really, really does come as a surprise. It is good to know that the GAO — never shy on tooting its own horn — is still out there earning it’s “taxpayer watchdog” badge.

At 256 pages, this thing is a beast. We’re plowing through it to find the more interesting tidbits where we can and if you’re on cruise control today, take a gander for yourself to see your tax dollars at work.

Fiscal Year 2009 Financial Report of the United States Government [GAO.gov]
U.S. Government’s 2009 Financial Report Shows Significant Fiscal Challenges [Press Release]
GAO Cites Weak Financial Management in Federal Government [Web CPA Debits & Credits]

Estate Tax Planning with the Exuberant Accountant

Adrienne Gonzalez
March 1, 2010

The Exuberant Accountant isn’t the spamming type so when he sent out an email to, presumably, all of his blog’s email subscribers as a warning about new estate tax rules in 2010, it was clear this wasn’t a casual tax issue. Scott Heintzelman was kind enough to give me a few minutes to break down what this means for estates and why we should care.

Disclaimer: I took an estate tax class no less than two months ago and have since forgotten everything I learned so I needed a refresher anyway. As always, if you need advice on actually planning your estate, don’t listen to me and get yourself a CPA and/or tax lawyer. “We are accountants, ultimately we don’t draft agreements,” says Scott and he’s absolutely right. Get a trained mine-sniffer on that particular cluck mission.

Scott pointed to a recent post from his firm’s McKonomics blog called “No Estate Tax is a Good Thing, Right?” and it goes without saying he doesn’t believe this “no estate tax thing is good” by any means.

He gave the example of getting hit by a bus (awww, don’t run over the Exuberant Accountant!): If he walks out of his office tomorrow and dies, certain language in his will might leave a trust with $0 for poor Mrs Exuberant Accountant. What about the little Exuberant Accountant Jrs?! The humanity! Don’t worry, we’d start a charity drive.

Anyway, from McKonly & Asbury:

[M]any estate planners wrote wills with such language that the bypass trust would be funded with an amount equal to “the current lifetime exemption amount.” Since we currently have no estate tax, and no lifetime exemption amount, if a spouse dies in 2010, we could potentially have an unfunded bypass trust. This is especially alarming since we can all assume the estate tax will come back and we may have a taxable estate once the second [spouse passes] away.

Thanks for the heads up Scott, here’s to hoping you don’t get smashed by a bus this year. Look on the bright side, the estate tax goes up to 50% next year!

Earlier: Five Questions with The Exuberant Accountant

Accounting News Roundup: Is the ‘Era of Sloppy Accounting’ Over?; Rangel Running for Reelection; Supreme Court to Hear Skilling Appeal | 03.01.10

Caleb Newquist
March 1, 2010

• Companies are making fewer accounting mistakes [USA Today]
“In another potential boost to investor confidence, the era of sloppy accounting appears to be ending,” declares USA Today. Okay but perfection is unattainable people, so until machines take over for you, keep at it. In the meantime, the results presented by Audit Analytics certainly indicate that things are going in the right direction.

We don’t want to be the party pooper here but if accounting is less sloppy, i.e. more sophisticated, doesn’t that mean that the methods for massaging the accounting are also more sophisticated? Just chew on that while you check the the findings.

The article lists three reasons for the improvement in reporting:

• There is steady and ongoing improvement. The number of companies with restatements and the number of restatements have declined in each of the past three years.

• Mistakes are getting caught sooner. Among the companies with restatements, errors covered a period of 476 days, or less than a year and a half. That’s down 7% from 2008 and well below the 716 days, or nearly two years, of problematic numbers restated in 2006.

• Restatements are less serious. Restatements reduced companies’ reported earnings by $4.6 million on average last year, down dramatically from the $7.2 million and $23.5 million hits in 2008 and 2006.

Even though it’s virtually impossible to eliminate restatements, we must admit that these are encouraging trends. Another thing to keep in mind is that accounting rules are becoming increasingly complex so it’s not like things will be on cruise control from here on out.

• Defiant Rep. Charles Rangel vows reelection bid despite uproar over alleged ethics violations [NYDN]
Ethics violations be damned! The 79-year-old announced over the weekend that he would be seeking reelection. It would be his 21st term in Congress, first winning election in 1970. Even if Rangs is able to do another victory dance, holding on to his Chairmanship of the Ways & Means will be a different matter entirely. PBO has already distanced himself from Chuck and some are saying that even Nancy Pelosi is getting creeped out a little too.

• Skilling Asks High Court for New Trial Minus ‘Tar and Feathers’ [Bloomberg BusinessWeek]
The Supreme Court will consider Jeff Skilling’s appeal today in the Enron scandal that he was convicted of four years ago. Skilling’s attorneys will argue that the trial should not have been held in Houston where it would have been “impossible” to get a fair trial.

Skilling’s appeal says the atmosphere in Houston when the trial began in January 2006 was one of hostility toward him, fed by unrelenting and “searing” media coverage. The appeal points to a Houston Chronicle column titled “Your Tar and Feathers Ready? Mine Are” and a local rap song, “Drop the S Off Skilling.”

The 12 jurors reflected that antipathy, Skilling contends. During pretrial questioning, three said they were “angry,” three said they had negative feelings toward Skilling or doubted his impartiality and one said that all CEOs were “greedy,” according to his appeal.

Skilling is currently doing far worse than tar and feathers (probably NBD in this day and age), serving a 24 year sentence in a Colorado prison. If the SCOTUS rules in his favor on the “jury-bias” issue Skilling would get a new trial which open old wounds and could create a media circus (we hope).

News

Quote of the Day: Are Great Liars Powerful or Are the Powerful Great Liars? | 02.26.10

Caleb Newquist
February 27, 2010

“I was shocked to see how beautiful the results are. I literally can say with total accuracy that high-powered liars are so good at lying that they look like truth-tellers in every way — physically, psychologically, emotionally, etc.”

~ Dana Carney, assistant professor of management at Columbia Business School, on the results of an unpublished study that shows that people in powerful positions have a knack for fibbing.

Salaries

Women Accountants Earn 60% Less Than Men in UK

Caleb Newquist
February 27, 2010

Somehow female accountants over 45 in the UK earn 60% less than their male counterparts. The disparity is so ridiculous it defies understanding, but according to a study conducted by the ICAEW and Robert Half, men earn more than women at all stages of their careers and the gap widens with increased experience. This finding is consistent with the 2008 report. So ladies, if you’re on the partner track and thinking, “London might nice,” we’d advise against it. As for our female readers from the UK, you can always jump the pond, we’d love to have you here …

From the report:

Overall, male [Associate Chartered Accountants] are better remunerated than females – an average basic salary of £88,200 for males (median £76,000) is almost 50% higher than their female colleagues’ average of £60,500 (median £53,000) (Fig 3). The average male salary is up by 7% on last year, females by 10%. However, the average bonus of £24,700 for males has dropped slightly compared to last year, while that of their female colleagues, at £11,600, has increased by 33% (median £6,900 males and £2,400 females). The bonus received by male ACAs represents 28% of average basic salary, while females received only 19%.

The differential reflects in part at least that male ACAs are typically older (46 against 40 for females), longer qualified (18 and 14 years respectively) and more likely to be in a permanent full-time role (88% and 72%). They also spend longer hours at work (45 v 38 hours per week).

It’s especially cute how this is “in part” chalked up to age and experience. It would probably be terribly bad form for the ICAEW and Robert Half to come right out and say that the difference in average pay is say, absolutely ridiculous and blatant evidence of patriarchal institutions exhibiting clear gender bias when it comes to compensation.

ICAEW/Robert Half Career Benchmarking Survey 2009 [ICAEW via Accountancy Age]

KPMG

KPMG Knows You’re Feeling Like a Fatty

Caleb Newquist
February 27, 2010

Yes. You. Spending day after day at that desk, consuming a steady diet of red meat, bagels loaded with cream cheese that is going straight to your [insert problem area] and, of course, caffeine. Sweet, sweet caffeine.

It all adds up to a bunch of tubby Klynveldians, and tubby = not happy. This is not lost on the leadership at KPMG. They want you to know that they want to help you lose that paunch ASAP and they are prepared to offer you a human being to assist you.

According to the Centers for Disease Control and Prevention, more than one-third of American adults are overweight, and many people are actively seeking a solution for weight loss. Losing weight isn’t just about looking better in the mirror—being overweight can contribute to a range of health issues, including heart disease, diabetes, hypertension, and even certain types of cancers.

Lots of us have tried to lose weight, but find ourselves giving up because it can be tough to do. But what if you had your own weight-loss coach, someone who could provide personalized guidance about nutrition and exercise, and provide strategies geared toward your specific situation? What if you could call that coach as many times as you wanted over a six-month period, when you had a question or needed some encouragement?

You can have just that, at no cost to you, thanks to KPMG and LifeWorks through the iCanChange program. iCanChange gives you access to a dedicated, experienced and credentialed health coach who will help you identify goals, strengths, challenges, and strategies for managing your weight.

You will be able to receive four scheduled calls from your coach, and you can call him/her as many times as you would like over a six-month period. Your coach will help you track your progress and set realistic goals to lead you along the road toward losing weight.

So, just who exactly is KPMG recruiting to help these numbers nerds get back in fighting shape? Richard Simmons? Chuck Liddel? Phil Mickelson?

Assuming this doesn’t have to wait until after busy season you best get crackin’ in case Radio City announces its own Canadian Tuxedo reprieve. Fat guy in a little denim coat is not a good look.

News

Five Questions with Edith Orenstein of FEI Blog

Caleb Newquist
February 27, 2010

Anyone out there have to comply and/or pay attention to the anything and everything that is dropped by the SEC, IASB, FASB, or PCAOB? Does the mere thought of reading anything that these bodies cause you consider drowning yourself in the nearest toilet? Us too.

That’s why we like Edith Orenstein so much. She is the Director of Accounting Policy Analysis & Communications at Financial Executives International and the author of the FEI Financial Reporting Blog. Edith has the amazing ability to take all this regulatory wonky goodness and put it into a wonderfully concise package. She saves you to the trouble of drowning in minutiae and gives you what you need to know.

Plus, she’s really nice. Think of it this way: in terms of temperament, Edith sits on one end of the accounting blogger spectrum; on the other end is the Jr. Deputy Accountant.

Why should accountants read your blog?
To learn about what FASB, the IASB, the SEC, or the PCAOB decided yesterday or today, and why it matters. And when Congress, Treasury, GAO or another agency gets into the fray, that’s always something of interest.

If someone had to read just one post of yours which one would it be?
Auditors in Love (which links to an ‘accounting music video’ which has received over 5,000 views, by the way.) No! Just kidding! It would be “Why Accounting Matters.” But, in all seriousness, some of my personal favorite posts are the ones in which I could tie in a musical theme, like Under Pressure, Unstuck From the Moment, and Say-Say-Say On Pay.

A good blogger is…
Someone who can give you really good facts on a timely basis, or really good insights, or both.

Who is your favorite blogger?
Francine McKenna of Re: The Auditors. I don’t always agree with what Francine says, and it’s not unusual for us to have opposing points of view or perspective on certain matters, but I respect what she writes given her extensive background in practice, and I enjoy reading her blog; let’s face it, she’s got that tabloid quality that makes reading about auditing fun.

The biggest issue facing accountants today is…
The volume and complexity of accounting literature (GAAP), throw in a dash of SEC, PCAOB, AICPA regulations and standards, and a pinch of COSO, (not to mention IRS rules and regs and other regs) and I have to give a lot of credit to practicing accountants and auditors who are faced with keeping current on and correctly applying all of these standards and rules. And IFRS is looming over the horizon; as someone said recently on an academic listserv I read (the AECM listserv), IFRS is significant whether or not the U.S. moves to adopt it, given that most of the rest of the world has.

L.A. Dodgers Owners Use Loss Carryforwards; So Now They’re Tax Cheats?

Joe Kristan
February 26, 2010

Stipulated: the L.A. Dodgers are evil. Not seventh-circle evil like the Mets or the White Sox, but evil enough. And we’ll assume, for sake of argument, that their owner, Frank McCourt, bathes in Kruggerands while sipping puppies blended with 50-year old single-malt scotch.

That still doesn’t make him a tax cheat.

So why this lame L.A. Times column from Frank Hiltzik?

To everyone who claims that our wealthiest citizens pay more than their fair share of income taxes and we should cuse they’re the ones who, you know, create jobs in our economy, I have four words for you:

Frank and Jamie McCourt.

The McCourts, who own the Los Angeles Dodgers (so she says; he says he’s the owner and she’s not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple’s divorce case in Los Angeles County Superior Court.

On that sum, they paid zero federal and state income tax.

They made $108 million and paid no federal income tax? Why might that be?

According to Jamie, the McCourts employed two mechanisms to live tax-free. One was to claim enormous tax losses from their business, which was mostly commercial real estate before they bought the Dodgers. These could be carried forward, offsetting income year after year until they were finally netted out.

So let’s get this straight: they made $108 million by losing $109 million? It must be magic! No?

“…Jamie’s accountant states in a court document that some is due to depreciation, which is a way of accounting for wear and tear on a property.”

So real estate losses are non-cash funny money? The tax law stretches commercial real estate deductions out over 39 years now, so real estate isn’t a great tax shelter. Sure, you can deduct commercial mortgage interest, but you can’t deduct principal on mortgage payments. So even in real estate, the McCourts’ $130 million tax loss carryforward isn’t a symptom of prosperity.

Let’s consider another exotic possibility: maybe they really lost money. Mr. McCourt’s day job is in commercial real estate. How has that been doing lately?

But Hiltzik seems to think tax loss carryforwards are some kind of cheaters game, or maybe even a status symbol, like a Mercedes or a private jet:

“Jamie’s documents say that in 2008 the net loss carry-forward from previous years was $109 million — in other words, the McCourts could have earned that much without paying a penny of income tax.”

Imagine of a world without loss carryforwards (I think you can!). You start a business and you lose $2 million in Year 1. In Year 2 things turn around and you make back $1 million. Without loss carryforwards, as a 35%-rate taxpayer you would pay $350,000 in Year two, even though the business is still $1 million in the hole. That’s an effective rate of >infinity%.

Perhaps Mr. McCourt is prosperous in spite of his loss carryforwards. Maybe his real estate has held its value, unlike everybody else’s. Maybe he’s even running personal expenses through his business (though Leona Helmsley learned that the IRS looks for that). But even a Los Angeles real estate empire can suddenly come crashing down.

Remember that maybe, just maybe, Mr. McCourt’s soon-to-be-ex-wife has a vested interest in making him look prosperous, and in making losses look like a mark of wealth. She might like some of that.

[H/t: TaxProf Blog]

Career Center

Job of the Day: Morgan Stanley Needs an Internal Audit Senior Manager

GoingConcern
February 26, 2010

Morgan Stanley needs a Internal Audit Senior Manager to join its Institutional Securities Group. This person will assist the Institutional Securities audit team in completing its annual audit plan, communicating to senior management and the Audit Committee those areas requiring control enhancements and improvements.

The position requires a minimum of seven years experience with a CPA license or equivalent strongly preferred.

Get more details on this position in New York, after the jump.

Recruiter: Morgan Stanley

Title: Internal Audit Senior Manager – Institutional Securities Group

Location: New York, NY

Minimum experience: 7 years

Description: The person in the role will assist the Internal Audit department’s Institutional Securities audit team in completing its annual audit plan, communicating to senior management and the Board Audit Committee those areas requiring control enhancements and providing recommendations for improvements.

Responsibilities: Preparing audit planning memorandum including identifying and evaluating key risks, setting audit scope, determining budgets and staff assignments; possessing considerable experience performing walkthroughs, assessing the internal control environment and performing controls and substantive testing; being able to supervise and mentor junior staff, and review work papers to ensure they meet internal standards; being able to manage audits to meet budgets and the time frame for completing audits; being able to properly assess potential findings for significance; drafting audit reports including writing clear and concise findings and recommendations; following up actions quarterly with clients through to completion.

Qualifications: 4 year college degree required, CPA or international equivalent strongly preferred; seven to ten years experience in financial services with a preference for those with at least five years auditing financial services; strong knowledge of financial instruments including derivatives (e.g. good understanding of option valuation, able to discuss trading strategies with the front office).

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

News

Reminder: Extended Haiti Donation Deadline for 2009 Tax Returns Is This Sunday

Caleb Newquist
February 26, 2010

Despite many arguments that the extension was bad legislation, it cruised through Congress and was quickly signed by the POTUS and now the window is closing fast.

For those of you that are able to itemize deductions and you’re looking for a little extra deduction for ’09, the countdown is at t-minus two days.

If you are considering a last minute donation, A) what the hell have you been waiting for? B) you’re in a bit of luck because the deadline has a little bit of wiggle room, as Kay Bell tell us, “If you charge your donations to a credit card before the end of February, that counts even if you don’t get or pay the your credit card bill until next month or later.”

For those of you that don’t trust machines and are cutting a check, you best drop it soon if you want it to hit your ’09 return, “don’t send a check dated Feb. 28 on March 15 and claim it…if a tax examiner looks at your statement and sees the check didn’t clear until the last half of March, your deduction will probably be disallowed.”

Oh and it’s cash only. Your clothes that were originally meant for your garage sale this Spring are generous but not eligible for the extension.

On a related note, part of Stephen Chipman’s blog post from this week announced that Grant Thornton had raised approximately $140,000 that will be split between the Red Cross and the Salvation Army. Thumbs up GT.

2009 Haiti donation deadline Feb. 28 [DMWT]

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