Going Concern

Preliminary Analytics

Preliminary Analytics | 10.21.09

Caleb Newquist
October 21, 2009

• Mets Win One: Owners Made Money on Madoff – “A partnership connected to the baseball team — which had widely been rumored to have lost money investing with Bernard Madoff — actually gained a net $48 million from its dealings with the convicted swindler, according to a bankruptcy-court filing.” [WSJ]
• Madoff adjusts to life in prison – Bottom bunk. He would’ve called the top but when you’re in your 70s, sometimes you just let things go. [BBC]
• CIT debt offer by obscure fund raises questions – Including: How desperate is CIT? [Reuters]
• A Sarah Palin Tax Problem? – Auctioning off a dinner with Governor Maverick makes for some IRS hoop jumping. [TPM]

Review Comments

Review Comments | 10.20.09

Caleb Newquist
October 21, 2009

• UBS Accidentally Leaks Names to Post Office – One day UBS will do something right. [Web CPA]
• Patricia Cornwell’s Latest Mystery – Suing her accountants and business advisors for allegedly losing $40 mil. [TDB]
• Wall Street on edge as SEC top cop gets aggressive – Khuzami seems to be doing fine and even has a sidekick. [Reuters]
• PwC’s Lehmans fees top £154m [Accountancy Age]
• Denham Receives AICPA Medal of Honor – Highest award given by CPAs to a non-CPA. [TaxProf Blog]
• Some Internal Audit Staffs Cut in Recession — But Not All – Good news: 2009 is the peak of layoffs! Bad news: They will still continue in 2010. [Compliance Week]

Overland Storage Probably Fired PwC Out of Spite

Caleb Newquist
October 21, 2009

It appears that Overland Storage’s audit committee was pissed off enough about a second consecutive going concern audit opinion that they just up and fired PwC last week.
San Diego-based Overland filed the 8-K, notifying the Commission of the dismissal, on October 16th which also named Moss Adams as the new auditors. At the request of Overland, PwC sent a two sentence letter to the SEC stating that they “agree with the statements concerning our Firm in such Form 8-K.”
The Register states that Overland was all bent out of shape because PwC didn’t explain why they issued the going concern opinions:

While even accountants are entitled to a view about the state of the struggling business, Overland was upset because PwC didn’t actually identify any specific factor in the accounts that led them to that conclusion.
Presumably PwC was expressing a view based on such business events as Overland avoiding running out of cash by factoring arrangements, repeated staff headcount reductions, Nasdaq delisting, declining revenues and losses. Overland’s thinking is that, if so, it shouldn’t have.

The most recent 10-K has all the gory details and as The Register pointed out, Overland didn’t think all those negative things really matter, so obviously, firing the auditors was the next logical step. Moss Adams will get the esteemed pleasure of holding Overland’s hand to the bitter, tragic end.

Rumor Mill: Ernst & Young Closing Manchester, NH Office

Caleb Newquist
October 21, 2009

Courtesy of our contributor, Francine McKenna who got the scoop from a Twitter source:

If you’ve got information on this office closure, including layoff numbers, let us know or discuss in the comments.

Announcements

Thanks to This Week’s Advertiser

Caleb Newquist
October 21, 2009

A quick word of thanks to this week’s advertiser on Going Concern:
• Verizon Wireless
If you’re interested in advertising on Going Concern, email us at advertising@breakingmedia.com. Thanks!

KPMG

KPMG Halloween Party: Don’t Expect Treats in the Form of Bonuses

Caleb Newquist
October 20, 2009

With the cancellation of Christmaskah by most of the Big 4, one would think that a small Halloween fiesta would at least be possible (you know, for the kids).
Good news! At least one KPMG office is contemplating the idea, with the local staff’s help (italics are from the original email):

For $5 you may wear jeans. All donations will be used for the Family Halloween Party. If you would like to participate, please see [redacted] at the reception desk on the 27th floor.

Please note that if you are at a client site that does not subscribe to jeans day, you still need to dress to the client’s dress code.

Please remember you are still in a professional environment and wear professional clothing with your jeans. Additionally, please wear jeans that are in good condition to obtain a clean, professional appearance.

Got it? You want bite-sized 3 Musketeers, Snickers, and the like, you can pay for it. And btw, if you come in with frayed hems, your ass will be sent home.

Rumor Mill: Ernst & Young Bermuda Needs a Few More Hours Out of You

Caleb Newquist
October 20, 2009

According to a tip we received, beginning this week E&Y is requiring its professionals in Bermuda to charge 50 hours a week through mid-December. This is up from from the normal 40, according to our source.
Our source also indicated that the mandatory 50 hours is considerably more than what the other firms require, citing Deloitte who “has minimum 37.5 hours year round.”
For our friends working offshore, give us the scoop on your hours approaching year end. We also expect a few of you have worked in Bermuda and even more of you have worked with professionals in the Bermuda or other offshore offices, discuss your thoughts in the comments.

Uncategorized

IASB: You Want a New Fair Value Rule? You Got It. Just Don’t Ask Us About Convergence

Caleb Newquist
October 20, 2009

There’s no doubt that you’ve been awaiting the IASB’s new fair value rule with feverish anticipation. Well, your wait is nearly over because when Sir David Tweedie says he’s going to do something, by God, he means it:

In an address to a meeting of European Finance Ministers, which have in the past been critical of the IASB’s response to the financial crisis, Tweedie has sought to ease concerns by announcing that he is on track to deliver a new fair value standard by the end of this year.
“I gave a commitment to deliver on this timetable. We will publish the new standard in November,” he said.

This is all very exciting for Tweedie and the IASB since it feels pretty damn good anytime you stick it to your critics but…
Small problem: The new rule still won’t require loans to be marked to fair value which is the exact opposite plan of Bob Herz and the FASB, “FASB’s proposal will see all assets measured at fair value. The IASB’s mixed measurement model would see banks’ loan books valued on an amortised cost basis.”
Obviously the two rulemakers, fresh off the tongue lashings they received from their respective governments for their part in the worldwide economic meltdown, decided that they had no choice but to put out the fair value fire pronto. Meanwhile, convergence of accounting standards (what the IASB is really serious about and could be the next Big 4 gravy train) remains a pipe dream.
Fair value standard will be released next month: Tweedie [Accountancy Age]

The PwC Experience, Romania Edition, Involves Fifteen Unpaid Days Off for Everyone

Caleb Newquist
October 20, 2009

~~Whores~~ PwC employees in Romania are being sent on mandatory vacay starting this month through June 2010. The leave will be for fifteen days and will be unpaid, according to Ziarul Financiar, a daily financial newspaper published in Bucharest.
We were hoping that the firm would require everyone to take the same fifteen days off in order to participate in a firm wide charity event but instead PwC Romania has asked to employees to take turns being quasi-unemployed for half a month and will simply do more with less.
This is not a measure that we have heard about occurring Stateside but there have been delayed start dates and sabbaticals which some may say are close enough. However, the innate ability for Big 4 types in the U.S. to show up to work when they aren’t supposed to would certainly foil any potential cost savings. Until, of course, someone reminds them, “Aren’t you supposed to be on vacation?” to which the glutton for punishment replies, “Oh, I’m not charging the time.”

Preliminary Analytics

Preliminary Analytics | 10.20.09

Caleb Newquist
October 20, 2009

• PwC: Sour Economy Sparks Divestitures – “Each of the Big Four accounting firms have scrutinized the corporate divestiture market over the last three quarters and have come up with largely the same conclusions.” Anyone surprised by this? [CFO]
• Galleon Clients Abandon Ship – “Galleon’s chief operating officer, Rick Schutte, directed portfolio managers Monday to shed some positions in a “coordinated, orderly fashion,” according to a Galleon trader. The trader said he wasn’t told to sell everything but to begin raising some cash.” [WSJ]
• NYC Judge Tosses Suit Against Biden’s Son, Brother – The non-Joe Bidens had been sued for $10 mil by an investor who says he was double-crossed on a purchase of a hedge fund firm. [AP via NYT]
• Huron, others could get caught in Galleon Group problems – Raj held nearly 6% of Huron in mid-August according to the Trib. [CT]

Review Comments

Review Comments | 10.19.09

Caleb Newquist
October 20, 2009

• Billionaire investor Carl Icahn offers CIT Group $6B lifeline as it faces potential collapse – What the hell, go for it. [Chicago Tribune]
• Build It With Tax Incentives, and Hollywood Will Come – Lots of coverage on the Iowa film tax credit mess at Tax Update Blog. [WSJ]
• IRS Employees Took Unauthorized First-Class Flights – Can you blame them? [Web CPA]
• Colleagues Finger Billionaire – No matter how you read that, it’s not good for Raj. [WSJ]
• KPMG hires new local managing partner – You don’t say? [Washington Business Journal]

Big 4

If There Was a Huge Braveheart-esque Battle Between Accounting Firms in Chicago, Our Money Would Be on Deloitte

Caleb Newquist
October 20, 2009

Not because they’re face-painting, Chuck Liddell types with crazy-ass axe skills. No, all those accountants migrated to the Mecca of hand-to-hand combat in America, Las Vegas.
Our choice is simply based on the numbers. According to Crain’s list of largest accounting firms in Chicago, Uncle Dangle has over 3,300 professionals in the six county area surrounding Chicago while #2 PwC has just under 1,800.
Deloitte’s huge advantage is due to the over 1,200 management advisory service professionals and nearly 750 tax professionals (who, frankly, are the real badasses).
Now to point out Uncle Dangle’s advantage in such a way may be superficial and pointless but challenging another firm in a battle to ~~the death~~ force others into the fetal position may become an option worth considering the dire situation for accountants in Chicago. Plus, the thought of thousands of accountants doing battle via open-handed slaps and sublte insults about documentation and pen color hierarchy is too hilarious to ignore.

Careers

Big 4

News

Technology

Practice Management

Site Search

Twitter Feed

Get the Accounting News Roundup

Quick Reads

Sponsored Content

Get the Accounting News Roundup

Remote Accounting & Tax Director

Senior Accountant / Client Account Manager (CAS & Tax)

Remote Tax Senior

Remote Accounting & Tax Director

Senior Accountant / Client Account Manager (CAS & Tax)

Remote Tax Senior