Going Concern

Uncategorized

Moss Adams Values ‘A Balanced Life’ over ‘Accountability’

Caleb Newquist
October 31, 2009

It’s pretty much a given that all “serious” accounting firms have “values” that they pitch to their rank and file and other interested parties.

Rumor has it that Moss Adams has recently changed the ‘A’ in their PILLAR of values from “Accountability” to “A Balanced Life”. This may or may not be a completely arbitrary change but it does put the firm out there as a work/life horn-blower.
While we applaud the attempt of accounting firms to provide a balanced life, it is certainly a debatable reality. Besides, shouldn’t a public accounting firm be accountable before it provides a balanced life? Many will make the argument that if you don’t want to work overtime for very little gratitude you should GTFO of public accounting. Can’t say we disagree.
While the thought of accounting firms having actual values is nice, sometimes brutal honesty would be really refreshing. One would think that smaller firms would have the luxury of leveling with their employees about what the culture is like.

However, judging by the switcheroo by MA, they like to do the work/life song and dance just like the big boys.

If anyone from the Moss Adams family would care to chime in on the latest switch in values, please do so. Also, for those of you at the other smaller-ish firms, let us know about your firm’s open commitment to balanced life (or lack thereof). If you work at a big firm, just complain away about your work/life balance.

Career Center

Job of the Week: You Want a VP Title?

Caleb Newquist
October 30, 2009

Earlier this week we told you about E&Y’s latest attempt to give its employees much-needed pat on the back. So some people are hung up on titles. Not too surprising.
If you’re one of those people — or you just need a new job — Morgan Stanley is looking for a VP of Global Accounting Standards and Control. Get the details after the jump.

Company: Morgan Stanley
Location: New York
Title: Vice President, Global Accounting Standards and Control
Job Overview: Individual will be responsible for monitoring and interpreting various emerging technical accounting issues pursuant to U.S. GAAP. Additionally, this individual will work with the various business units, and corporate functions to apply existing and evolving standards. Also, this individual will help coordinate technical guidance distributed firm wide.
Responsibilities: Monitor emerging issues through the interaction with various industry groups, liaising with certain standard setters, and discussions with Company individuals; Assist the business units/corporate functions in assessing the impact of evolving standards; Interact with business units and corporate functions related to new transactions to identify accounting issues; Apply U.S. GAAP to transactions and document accounting analysis and conclusions; Apply Morgan Stanley accounting policies and periodically update policies as new guidance is issued
Skills Required: 7 – 10 years of experience with at least 4 years in public accounting; B.S. in Accounting (or equivalent) and CPA are required.
See the full description at the GC Career Center and if this vice-president position doesn’t sound like the perfect title, go to the main page where you can find lots of other great titles/jobs.

Uncategorized

IASB, FASB Are Really, Really Getting Serious About Convergence

Caleb Newquist
October 30, 2009

Do you have doubts about the IASB and FASB’s commitment to accounting rule convergence? What? The name change idea didn’t convince you?

Well, David Tweedie and Bob Herz both addressed ~~doubters~~ attendees at a joint conference of the American Institute of CPAs and the International Accounting Standards Committee Foundation in New York to let them know that they are redoubling and in some cases, retripling their efforts to get this done.

The boards intend to hold more joint face-to-face meetings, in some cases by video conference, in order to make faster progress.

“We’re going to work on these issues together every month,” said Tweedie. “That’s why we think we’ll make our June 2011 target date.”

Monthly meetings. Some will be face-to-face. When they can’t do that, there will be video conferencing. Is there any doubt how serious they are taking this? This should be a piece of cake now. Oh sure, maybe they’re going to agree to disagree on the fair value thing but who said that’s important?

Wait a minute. Sir David Tweedie’s confidence seems shaky:

The approach may or may not work, and Tweedie acknowledged that some of the standards may take several years to be finalized. In many cases, they will be moving targets. But the goal of achieving a June 2011 convergence of the two sets of standards still seems doable, he insisted, and it would be a once-in-a-generation opportunity.

Good lord. Which is it people? Let’s just agree that accounting standards will be kinda-sorta converged by June 2011 and the rest of them will be converged “at a date yet to be determined”. We understand that the pressure is tough. No need to commit to anything.

IASB and FASB to Meet Monthly on Standards Overhaul [Web CPA]
Accounting Standard-Setters Will Get Much Chummier [Web CPA Debits & Credits]
Earlier: IASB: You Want a New Fair Value Rule? You Got It. Just Don’t Ask Us About Convergence

KPMG

Caption Contest Friday: KPMG Scary Stories

Caleb Newquist
October 30, 2009

Pictured below is R.L. Stine, often known as the “Stephen King of children’s literature”. Mr. Stine did some pre-Halloween scary story-telling yesterday while visiting students. The occasion celebrated KPMG’s Family for Literacy distributing its one-millionth book. “I think it would be a very scary world without books,” said Stine.

Rules: Submit possible captions in the comments. We’ll choose our favorites — with preference given to those with a Big 4/KPMG/accounting bent — and then let you vote for the best one.

Uncategorized

Madoff Auditor to Plead Guilty Next Week

Caleb Newquist
October 30, 2009

Reuters:

“The government anticipates that, at the pretrial conference scheduled for Nov. 3, 2009 … David G. Friehling, the defendant, will plead guilty pursuant to a cooperation agreement with the Government,” prosecutors said in a letter to the judge handling the case in Manhattan federal court.

According to the WSJ, “Mr. Friehling is expected to plead guilty to are securities fraud, investment advisor fraud, obstructing or impeding the administration of Internal Revenue laws, and four counts of making false filings with the U.S. Securities and Exchange Commission.” Since he’s flipping, Friehling will likely not face the maximum sentence of 108 years but he still probably shouldn’t make any long term plans.
Friehling will be third person related to the Madoff scheme to plead guilty and this will no doubt be the last time that we hear about an auditor admitting guilt.
Earlier: Judge, Possibly Fearing a TP’d House, Denies Bail for Madoff CFO

CPA Exam Question of the Week: Review Courses for the Working Stiff

Adrienne Gonzalez
October 30, 2009

Editor’s note: We’re going to start a weekly post on questions that you have related to the CPA Exam. Send your questions to tips@goingconcern.com and we’ll do our best to answer as many of them as possible. You can see all of the JDA’s posts for GC here and all our posts related to the CPA Exam here.
A lawyer with an accounting undergrad wants to know the following:

What is the most efficient CPA prep course/books etc., for an individual that works during the week for about 45-50 hours. I understand that we can take the exam in separate parts, so that will be very helpful.

Caleb reminds me that this answer should be objective so let’s get the “I’m a CPA Exam Expert because of my day job” plug in here.
First of all, lawyer guy, congratulations on diversifying and pursuing your CPA. My experience is that more finance, mortgage, law, and other professionals are gravitating towards the CPA these days (especially since 2007) and that’s a great sign that the industry still carries a level of prestige. Win for us, though some of us think the industry as a whole has some work to do (see also: Dennis Howlett on the Big 4 being TBTF)
So my answer is I don’t have your answer. What you need as a CPA exam candidate is important, and I don’t know you well enough to figure out what you need. Professionally I’ve learned that those from other industries or educational backgrounds tend to have “special needs” like something more intensive than a simple review or additional support in formulating a study plan. CPAnet has an entire forum dedicated to CPA review courses, that’s a good place to start for research into the matter.
Taking the exam in separate parts doesn’t really help because once you pass the first part, the clock is ticking. 18 months doesn’t seem like a long time but it will be over before you know it. I don’t even experience it and sometimes I am amazed when I realized I talked to someone at work when they graduated and now they have a month left to pass FAR or they’ll lose their first credit. Don’t be them. You will have to plan out your time.
That’s my second point for you. 45 – 50 hours? I know people who passed the entire exam in 4 months with two kids at home and a fulltime job at the Big 4. That’s overachieving but if she did it, you can certainly do it working less than I do a week. Plan out every hour of your week and fit in studying where you can. If you say “I will just do it after work…” but don’t have a schedule, trust me, you’ll never do it after work.
Figure to spend about 132 hours on FAR, 96 hours on REG, 80 hours on AUD and 64 hours on BEC. That’s watching review lectures 1 time and doing the AICPA recommended 2 – 3 hours of homework. You might need more, you might need less, that’s for you to figure out. Pencil that in between every other hour of your life – and I mean every hour, from sleeping to work – and get your exams scheduled early. Do some kind of final review 2 – 3 weeks before your exam dates and make sure you studied.
The last thing I can remind you is something my boss has hammered into my head 10,000 times. The CPA exam is not an IQ test, it’s a test of discipline. Keep that in mind and you’ll have nothing to worry about.

Preliminary Analytics

Preliminary Analytics | 10.30.09

Caleb Newquist
October 30, 2009

• Goldman, CIT Reach Deal to Keep Smaller Credit Facility Open – Not as much as they wanted but we’re not talking about a company with a lot of options here. [Bloomberg]
• White House: Data Likely to Credit Stimulus for 650,000 Jobs – In what appears to be the debunking of the Associated Press’ debunking of the WH data, the administration is claiming that the stimulus has nearly created the 1 million jobs the bill promised. [WSJ]
• Wal-Mart starts selling coffins – The most modestly priced receptacle is $895. [BBC]
• Galleon fears raised in 2001 – A JP Morgan analyst thought something was fishy with Raj and his “cohorts” and recommend that the bank’s alternative asset management unit should “reduce their allocation” to the fund. Apparently a trophy may have been at stake. [FT]
• Stanford Receiver Hopes to Recoup $1.5 Billion – “Court-appointed receiver Ralph Janvey filed a report in federal court in Dallas late Wednesday outlining his plan to go after the $1.5 billion and provide allegedly defrauded Stanford investors a return of as much as 20 cents on the dollar.” [AP via NYT]

Review Comments

Review Comments | 10.29.09

Caleb Newquist
October 30, 2009

• Fed should lose AIG-style bailout powers: Geithner – The past is the past, huh, Timmay? [Reuters]
• Chrysler to offer live TV service in vehicles up to 20 channels starting in December – Because we can’t squeeze in enough at home. [CT]
• Wall Street Journal closes Boston bureau – Dow Jones and Market Watch will stay for now. [Reuters]
• CFOs on the Move: Week Ending October 30 – Motorola, Nissan, Nokia all have new chiefs. [CFO]
• Not Good Enough – Gotta good job? Still need a second job? [Financial Armageddon]
• Citrin Cooperman to Merge in Carrow Doyle – Combined firm will have $80+ million in revenues and have offices in Philadelphia and New York looking to expand to Boston, and Washington. [Web CPA]

Is David Beckham PwC’s Answer to Natalie Gulbis?

Caleb Newquist
October 30, 2009

Nothing is official with Becks of course but PwC has signed on as the first sponsor of England’s bid to host the World Cup in 2018.
Seriously, P. Dubs. Think about it. With the sole exception of RSM McGladrey, accounting firms are totally rejecting the “sex sells” mantra. This is your opportunity.
PWC backs England’s World Cup bid [BBC]

Uncategorized

Grant Thornton’s Survey Elves Are Still at Work

Caleb Newquist
October 30, 2009

Our only point is that if it wasn’t for the nice little explanation of the survey on the website, we would have assumed they had a huge room filled with survey elves working day and night.
Anyway, today GT issued its latest press release of its “national survey of U.S. CFOs and senior comptrollers”.

This installment shows that CFOs are homers when it comes to who sets their accounting rules (just so long as it isn’t the government). Seventy-one percent of those surveyed said that rules should be set by “A national independent board supervised by a national regulator” while only 24 percent want an international board. This despite the belief of some that Bob Herz is the most dangerous man in the country.
Only 3% thought a “national legislature” should set rules, which is a relief. Plus it probably gives Barney Frank a little vindication but definitely upsets Newt Gingrich.
The survey also states that the respondents are split on how to report debt on their balances sheets, either amortized cost or fair value, which may be why the FASB and IASB are talking contingency plan.
The last bit of interesting information is that CFOs are still scared shitless of eXtensible Business Reporting Language (“XBRL”) because 84% of those surveyed have no plans to start using it. If you assume most of the CFOs were in Big 4 at one time, then this isn’t so surprising.
The ~~elves are off until spring~~ next CFO survey will occur in the spring when another spectacular round of press releases will inform all of us what is on the minds of financial bigwigs.
Earlier: Grant Thornton Survey: Financial Statements Are Still Too Complex for the Average Shmo Investor
Also earlier: Grant Thornton Survey: 40% of CFOs Never Ever Ever Want IFRS to Replace GAAP

Uncategorized

BDO’s UK Managing Partner Has a Strange Definition of ‘Solid’

Caleb Newquist
October 30, 2009

Accountancy Age:

BDO’s managing partner Simon Michaels is emphatic. Fee income might be down 5% and profits down too, but underlying performance has been “solid”.
“When you look across the international networks, and across domestic firms, that is a pretty solid performance. Our national turnover has seen a modest contraction over the past year but that is purely as a result of lower levels of transactional and other one-off assignments.”

Plus there’s this: “In the end the firm made 10% of partners redundant [i.e. laid off] and around 8% of the UK workforce.”
Still going with solid?

Uncategorized

Do Recessions Cause Accounting Irregularities?

Caleb Newquist
October 29, 2009

Some people think so. Emily Chasan at Reuters discusses the perceived rise of accounting irregularities today:

“Corporate balance sheets may be showing signs of the wear and tear from the prolonged U.S. recession as accounting irregularities are starting to surface at growing numbers at U.S. companies.”
Okay but don’t accounting regularities happen all the time? If the economy is humming along nicely does that mean that less companies are engaging in accounting hocus-pocus? Hmmmmm.

But there’s more argument for “it’s the economy stupid”:

“Statistically you can show any time you have a recession or some type of tremendous decline in an economy you’re going to see financial pressures on companies,” said Bruce Dorris, program director at the Association of Certified Fraud Examiners, noting that corporate employees can sometimes be motivated to be overly aggressive with accounting or commit outright fraud to meet targets, particularly in difficult economic times.

The article cites Apollo Group’s stock dropping 18% yesterday after announcing that the SEC was starting an “informal inquiry” into its revenue recognition policies. It also lists Overstock.com, Town Sport International Holdings (owns NYSC), Zale Corp and also Huron Consulting whose stock price is still down 40% since the announcement of the SEC investigation. All these companies have delayed earnings reports or had investigations into their accounting practices.

So feel free to discuss your clients and their creative nature in this economy. Are their hard-nosed GAAP puritan ways caving to earnings pressure or are your partners the ones caving in the name of client service? Nobody wants a to be working on a client that’s going through a restatement. Nobody.

Accounting irregularities may be on the rise in U.S. [Reuters]

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