Maybe! Nevermind people leaving involuntarily for a second.
We’re hearing from many that people are heading for the exits en masse and it’s getting the bigwigs’ attention. According to one reader:
“[A]pparently its got higher ups here a bit worried. It was an agenda [point] for a [recent manager] meeting. Just wondering how it was elsewhere. “
Of course, this leads to many, many, many teams finding themselves short-staffed. We just heard that the New York office of one Big 4 firm has been contacting other offices aggressively recruiting audit personnel for huge advisory engagements. This has been received with a resounding “GET BENT” since those offices desperately need the people for their local audit engagements.
It can be easily argued that the reason people are bolting is because of the pay freeze trend or since no one’s job seems to be safe, people are simply taking matters into their own hands.
So discuss in the comments what you’re seeing, hearing, and speculating about regarding people leaving your firm. This may be an office by office phenomenon so we’ll put out to you to give us the details for your office, your team, your firm in general.
GC Reminders: November Survey and Caption Contest
Good morning servants of capital markets. We don’t mean to impose upon you while you engage in your morning routine but we’re here to remind you of two matters of critical importance going on at this fine publication:
• November survey – One question. One email address. A chance to win a $50 AMEX gift card.
• Caption Contest Poll – You’ve got until 11:59 pm EDT tonight to throw support behind the most suitable description for the AICPA spokesswine. Don’t scoff. It’s important.
Thanks for your participation.
Preliminary Analytics | 11.12.09
• Costco CFO: Fingers crossed consumers will spend – Sounds like a winning strategy. [Reuters]
• Wall Street Faces ‘Live Ammo’ as Congress Aims to Unravel Banks – The bank lobby is finally a little concerned that this break up of TBTF is for real… [Bloomberg]
• The Kanjorski “We’re Tough on TBTF” Headfake – …or maybe they’re just playing along. [Naked Capitalism]
• White House Aims to Cut Deficit With TARP Cash – Not only that, there’s talk of, GASP, tax reform: “[Office of Management and Budget] is also reviewing a host of tax changes. The President’s Economic Recovery Advisory Board will submit tax-policy options by Dec. 5, including simplifying the tax code and revamping the corporate tax code.” [WSJ]
• G.E. Sells Security Unit for $1.8 Billion – The industrial conglomerate is a little less conglomerate-y, saying the fire alarm and security unit is a “noncore” business. [DealBook]
Ironic Photo of the Day: Paperless Audit Edition
A friend of GC passed along the following photo:
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Telling us: “This is our paperless audit training. An associate had to print out 46 copies. He stayed late on Friday and used three printers.”
Oh the humanity.
Review Comments | 11.11.09
• Reminders: Kindly vote in our caption contest poll and take our short November survey ($50 AMEX gift card people, get on it).
• Tax Havens Suddenly Not All the Rage – Thanks IRS. Our dreams of having a Swiss bank account are totally dashed. What’s the point if we’re still paying taxes? [Tax Girl]
• Benmosche Says He Is ‘Totally Committed’ to A.I.G. – That thing this morning? Never happened. [DealBook]
• Citigroup stands by deferred tax asset valuation – Last we checked, banks are not in the habit of saying, “GD, you’re right. We totally jacked that valuation up. Thanks for letting us know.” [Reuters]
ACORN Stonewalled on VITA Funds but Questions Remain
Yesterday the IRS released the list of recipients of $8 million in matching grants for the Volunteer Income Tax Assistance program. Many of you participated in this fine program back when you were focused on developing a drinking problem, which may explain the high error rate but that’s neither here nor there.
Of the 360 applications submitted for funds, one notable organization that was DEEE-NIED was ACORN.
Despite the grave dancing that is likely going on in certain corners of the media, is anyone asking the important questions here? Including but certainly not limited to:
• Who will real sex workers depend on for tax advice?
• What non-profit organization will the two “investigators” entrap next?
• Will Glenn Beck finally calm down? He has appendicitis for crissakes.
Questions worth noting. If you have answers to any of these, kindly enlighten us in the comments (without suffering from an aneurysm).
IRS Leaves ACORN Off VITA Grant List [Web CPA]
IRS Awards $8 Million in Grants to 147 Organizations for Tax Prep Assistance — $0 to ACORN [TaxProf Blog]
No IRS VITA “Seed” Money for ACORN [Tick Marks]
CFO Article Illustrates Internal Audit Cowardice & CCM Confusion
Editor’s Note: Robert Stewart is a former Big 4 auditor and ex-Marine who has since served in several executive management roles in both Internal Audit and Corporate Finance. He is also the founder and chief contributor to the online accounting and audit community, The Accounting Nation. Outside of work, he is a husband, father, brother, writ dequate aspiring triathlete.
Alright, CFO.com, with your latest contribution you’ve satisfied your requirement to pander to your internal audit constituents. If you put a little more effort into the headline, they might read it too. With an article paraphrase like:
A biotherapy firm’s continuous controls monitoring program, which is essentially run by its internal audit team, is credited with creating numerous (though unquantifiable) benefits
you’ve assured that nobody will read further. Talk about hard hitting journalism. Grabs ya’ right by the goods and begs you to read more…doesn’t it? Well, I did read more. Because I am an idiot. Because I need to get out more. Because I’m an internal audit junkie. And mostly because I just love the apathy directed at internal audit by “real” business people.
This article touts the benefits of implementing a Continuous Controls Monitoring system through the “success” story of Talecris Biotherapeutics, a $1.4 billion provider of injectionable medical treatments.
Here’s what I have to say about some points in the article:
• The quote that exemplifies why there is such apathy toward Internal Audit: “‘We can’t help [management] design controls or tell them that a control is the right one to have in place, but we can help them monitor it,’ states Mary Anne Tourney, IAD at Telecris.” This, of course, is bullshit. YOUR JOB IS TO HELP MANAGEMENT.
Don’t twist the IIA Standards to relinquish one of the tenets of your responsibilities (i.e. to offer “advisory” services to management). Hiding behind the independence argument is cowardice. Maybe if you acted like a member of management, they’d treat you like a member of management (and CFO.com might capitalize your title in its article).
• As for the program’s ownership, Tourney states that management designs the controls, ‘But we control the program in internal audit so the parameters of the tests don’t get changed without our knowledge.’ WTF? Where is your independence argument now? Listen, you can’t just apply the standards when they suit you and bend them when they’re inconvenient.
• Miklos Vasarhelyi, a Rutgers professor, states that quantification of the CCM program’s effectiveness is difficult and it’s “flaky” to do too much quantification. At another point in the article, Talecris declined to comment on how much it has spent on the CCM system.
This illustrates another point that internal audit practitioners need to understand better: it’s not just about having an en vogue system that you can brag to your fellow IA geeks about at the local IIA chapter meeting. It’s about spending the company’s money where you get the greatest return on investment. Calling the act of quantifying the ROI of the system “a bit flaky” illustrates why this guy is a professor instead of a CFO. Shareholders don’t care if you have the Cadillac of internal control systems unless it translates into increased shareholder value. This may not always drive the best behavior but let’s face it, that’s how the game works.
Look, the jury on CCM is still out in my book. Although I believe the foundation is sound, I’m not sure about the relative importance in the web of controls chosen by an organization to mitigate its risk. It is, after all, still a back-end monitoring tool that detects anomalies after they have occurred and I’m inclined to spend more of my money on the preventative controls rather than detective controls.
And to all you Internal Auditors out there, stop being afraid to consult management on their internal controls and make control recommendations. THAT’S. YOUR. JOB. You can’t implement or own the controls, but for god’s sake, share your knowledge to improve the organization. It’s the only way for internal audit to start getting some respect (it’s a good start anyway).
E&Y Layoff Update
Jump back to our post from yesterday to read the latest on this week’s cuts at E&Y.
New Material for the CPA Exam: Am I Outdated?
Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter. See all of GC’s posts on the CPA Exam here.
As most of you know, my day job involves teaching unlicensed accountants how to pass the CPA exam so everything I’m about to tell you comes from experience. One of the most frequent questions I’ve been getting these days revolves around new material to correspond with the new year, so let’s debunk some of those common rumors about new exam material, shall we?
• Stop thinking IFRS is going to hit the exam in 2010. You have at least another year to procrastinate, and that’s the best case scenario. The AICPA said “some time in 2011” which means “when we get around to it”. Even when IFRS hits the exam its impact will be minimal at best so stop freaking out.
• Yes, new CPA exam materials are the best when available but keep in mind AICPA pronouncements take at least two windows to hit the exam, meaning if you take the exam in the first quarter of 2010 you will be tested on information released in June of 2009.
• Trust me when I say this: the AICPA Board of Examiners is cheap (no offense AICPA BoE but you know you are). Although review courses would love to tell you to get the latest latest info, chances are the AICPA BoE will prefer testing standard questions over introducing excessive amounts of new content. Sure, they test new things all the time but don’t expect them to overhaul the exam every quarter just for shits and giggles. New questions cost a lot of money and the AICPA BoE would rather recycle old questions than pay to create new ones. Use this to your advantage.
So, that being said, what’s the big deal about IFRS hitting the CPA exam? Stop panicking, it’s not as bad as you think.
IFRS is actually much more principles-based than rule based, which means you have a pamphlet to study instead of two dictionaries worth of GAAP. The AICPA is offering courses on IFRS for professionals or any simple textbook can suffice if you need a primer. However you look at it, the AICPA BoE does not expect you to know IFRS like an accountant in China. All they want to know is if you know the differences between IFRS and GAAP. Easy, right?
Lastly, if you have a review course, you should be able to request updates to the material as long as you’re a student. So don’t worry for the first two testing windows of 2010 but come June of 2010, ask for an update and you should be good. New AICPA pronouncements are released twice a year so ask again in December if you haven’t finished this thing by now.
Big 4 Sick Days: Open Thread
Since Team Jehovah is nabbing all the swine flu vaccine, there’s a pretty decent chance that some of you might come down with the H to 1 to the N to the 1. That has at least one reader concerned:
Can you look into the sick day policy at the Big 4’s? Is KPMG the only one who does not give any sick days? If you are sick you take the time from your PTO allowed (the days reduce your vacation time). I have seen people literally dying in the cubes – with temperatures, the chills etc – yet they insist on coming to work since they have no days left or don’t want to use their vacation time. Is this a responsible policy during the H1N1 epidemic???
We touched on this briefly but it’s worth revisiting since the swine flu coverage in the MSM is reaching fever pitch.
Discuss in the comments your firm’s sick days policy, if it’s forcing the bedridden to report, or it’s handing out surgical masks to everyone. Oh, and if you’re sick, for crissakes, stay home.
Dear Richmond Fed, What Were You Thinking?!
Going Concern’s own Jr Deputy Accountant did a pretty interesting piece this week via the Mortgage Lender Implode-o-Meter (which brought us such fabulous bloggers as Option ARMageddon – now at Reuters – and Mandelman Matters) that might be of interest to GC readers, at least those with a lawyer bent.
Can anyone tell me what Richmond Fed was thinking?! Anyone? Please?
Anyway. Just a reminder, GC did LandAmerica long ago.
How did LandAm’s Gluck end up at the Richmond Fed?
“With her broad range of leadership experience and extensive legal expertise, I know she’ll make great contributions to the Bank and to the Federal Reserve System,” said Richmond Fed President Jeffrey Lacker in July of the Fifth District’s new Legal Counsel Michelle Gluck. It leads one to wonder how thoroughly Lacker was briefed on Gluck’s sordid history at Richmond-based LandAmerica Financial Group previous to his statement. I still can’t understand why the Bank would hire her, maybe by the time I’m done with this I will.
For the not-so-quick background on Gluck and both previous and current employers, do check out LandAmerica: The final days appeared like a Ponzi scheme, The Good, the Bad, and the Less Bad for Richmond Fed and her bio that still sits on the LandAm web site:
“Executive Vice President – Chief Legal Officer Michelle has more than 20 years of experience in the legal profession. As General Counsel, she contributes sound legal reasoning and practical insights into legal issues facing LandAmerica. As Corporate Secretary, she oversees the governance of our Board of Directors. Michelle joined LandAmerica in 2003 after serving Kmart Corporation as VP – Associate General Counsel & Assistant Secretary. She holds a juris doctor degree from the University of Michigan Law School and a bachelor’s degree in English from the University of Michigan, where she graduated with honors.”
This Tuesday is the deadline for LandAmerica 1031 exchange victims (LES – dubbed exchangers amongst themselves) to accept pennies on the dollar for funds lost in LandAm’s bankruptcy proceedings. It is suspected that many Exchangers will vote for the plan, which guarantees at least some monies returned to victims instead of an excruciating court battle that many of LandAm’s unsecured creditors simply cannot afford.
For the rest of Michelle Gluck’s not-so-pretty resume and more musings on WTF Richmond Fed was thinking, head over to the Implode-o-Meter for the rest. I warn you, it’s ugly. Financial terrorism never is pretty you know.
Caption Contest Poll: Feed the Pig
No doubt Benny Bankes will continue his endeavor to convince everyone in America to start saving money rather than blowing it on Naughtibods. In the meantime, vote on your favorite caption after the jump. The poll closes at 11:59 EST tomorrow night.
