Going Concern

Uncategorized

We’d All Appreciate It if Grant Thornton Got Involved in a New Lawsuit

Caleb Newquist
October 23, 2009

Grant Thornton just isn’t able to shake Parmalat, the freaky-ass extended-life milk company. Parmalat appealed the latest dismissal of its lawsuit against GT and Bank of America that accuses the two companies of helping set up phony transactions so “insiders could steal from the company.”
Parmalat’s Chief Milk-Magician, Enrico Bondi, is obviously not satisfied with the $100 million that he twisted away from BofA and will continue to hassling both companies until long past the expiration date on his product.
Parmalat appeals BofA, auditor lawsuit dismissals [Reuters]

Uncategorized

Employee Satisfaction Survey: GC Edition

Caleb Newquist
October 23, 2009

In the spirit of what appears to be survey week, we’re honoring requests to do our own survey. Plus we’ve been inspired by some questions that we’ve seen in the comments.
We’ve presented a few questions for you to answer, after the jump. Feel free to add your more appropriate “D” answer to any of them. We also encourage you to keep submitting your questions with multiple choice responses.

Question 1 – I feel that I am recognized for my performance:
A. Too frequently by ass-grabs.
B. Not frequently enough by ass-grabs.
C. I prefer to not be recognized for my performance because I don’t like anyone talking to me and if I have one more conversation with one of these idiots I’m punching that idiot in the face.
Question 2 – Leadership’s communication:
A. Is jamming up my inbox to the point that I can’t locate my porn newsletters.
B. Is helpful when I’m having trouble vomiting.
C. Would be much more tolerable if it was a show tune sung by Hugh Jackman.
Question 3 – I feel that my compensation:
A. Is about as fair as getting kicked in the genitals on a daily basis.
B. Is appropriate if I had not finished high school.
C. Makes my friend, who delivers newspapers, laugh.

Uncategorized

Grant Thornton Survey: Financial Statements Are Still Too Complex for the Average Shmo Investor

Caleb Newquist
October 22, 2009

That’s right! Way too complicated. GT’s survey states that 73% of the finance bigwigs surveyed believe financial statements are too complex for the average investor to understand. That’s bad because even more respondents (82%) said that financial statements should “be prepared to meet the needs of the average investor”.
Strangely, this survey’s respondents, “CFOs and senior comptrollers”, are directly responsible for the still-too-confusing financial statements. Unless, of course, everyone that responded to this survey already has easy-to-understand financials and thus, is thinking, “NMFP”.
Also, average investor is not explicitly defined which doesn’t help us put the survey in context. So we’ll put it out there that if “average investor” is anything remotely similar to the “average American”, the solution to this whole problem may be to get Fisher-Price and reality TV producers involved.
Nearly three-quarters of senior financial executives say financial statements too complex for investors [Press Release]

Career Center

Face It. Your Resumé Probably Needs Work

Caleb Newquist
October 22, 2009

One way or another, lots of you are looking for jobs. The problem is that many of you have pre-tay, pret-tay, pre-tay similar work experiences. So how do you get your resumé to stand out without attaching ~~nude~~ glamor photos?
FINS has some tips including that may give you an advantage on your pavement pounding competition including:
• The Basics – If you’ve got letters behind your name, put that at the top. Don’t slip it in as an afterthought.
• Demonstrate How Skills Apply – If you’re a badass at anything, don’t be shy. SOX 404, tax planning, M&A, whatever your speciality, make it known.
• List High-Value Experience – Mention how you explained accounting for derivatives to all your clients. Don’t mention nightmare inventory counts.
Head over to FINS to see all their tips including a before and after example resumé. Oh, and DON’T. DO. THIS.
Foot in the Door: The Perfect Accounting Resume [FINS]

KPMG

Rumor Mill: KPMG Wants You To Stop Smothering Your Kids

Caleb Newquist
October 22, 2009

Klynveldians, what are you doing today at 2 pm? Nothing? Here you go:

As we continue to observe National Work & Family Month during October,
KPMG will host a national MSO from Lifeworks entitled Being an Involved
Parent: How Much Is Too Much? on Thursday, October 22, from 2:00 p.m. –
3:00 p.m. ET.
This special session is designed to help parents:
§ Understand the traits of overly involved parents
§ Learn the long-term consequences of over-involvement
§ Identify strategies for raising self-reliant, resilient children
§ Find a balance of involvement that will help children ultimately become
independent adults.
If you’d like to join us for this session, be sure to sign up today!

Don’t have kids? No worries. This will load up your queue of excuses for why you’re working late after you enter parenthood.

Audit

Are Going Concern Opinions the Kiss of Death?

Caleb Newquist
October 22, 2009

One thing is for sure: clients don’t like getting them. Auditors may even go out of their way to not give one in order to maintain “excellent client service” or whatever the latest buzz phrase is.
Many companies risking the dreaded explanatory paragraph arrived there on their own accord but if a company is legitimately trying to recover from their stay in financial intensive care, auditors may be piling on by issuing the GCO.

CFO:

Such a qualification can result in tougher-to-get and more expensive financing deals, just when the company is most in need of a break. Indeed, once hit with a going-concern qualification, companies may succumb to a “self-fulfilling prophecy,” say accounting observers. The pariah status such an opinion confers all but forces investors, suppliers, and lenders to turn away, often driving a company on the brink of bankruptcy into a Chapter 11 filing.

CFO’s piece cites the opinion of Al King, former Chairman of the Institute of Management Accountants, who mentions the guidance of auditing rules “don’t allow auditors a wider range of possible warnings.” The situation comes down to one of options: 1) we’re cool or 2) we’re doomed.
That may be a valid point but the idea of an explanatory paragraph that discusses the alignment of the planets along with management’s brilliant plan to save the sinking ship doesn’t seem like the answer.
Nevermind breaking the bad news to your client, who may be living in denial over the state of their company. Or as the Overland Storage situation demonstrated, clients just get their panties in a bunch and start firing auditors. But you still have to the your jobs, amiright?
The GC opinion. Discuss any experiences you have had in comments. Did it involve grown men sobbing like children? Delusional clients? Maybe just gnashing of teeth? Or did the partner fold like a cheap lawn chair in the name of client service?
Living with a Scarlet Audit Letter [CFO]

Preliminary Analytics

Preliminary Analytics | 10.22.09

Caleb Newquist
October 22, 2009

• Former car czar: GM, Chrysler were on brink of death – But no gc opinion? [DFP]
• Galleon Sinks; Informant Surfaces – “Tipper A” has a name: Roomy Khan. [WSJ]
• EU warns Oracle over Sun takeover – Oracle hasn’t really made a case that the takeover wouldn’t be anti-competitive. [BBC]
• Microsoft launches Windows 7 – Microsoft’s obvious attempt to derail the career of John Hodgman. [Reuters]
• Pay Czar Decides to Collect a Few Scalps, a Sign of Weakness – We’re looking for Basterds-like numbers Feinberg! [Naked Capitalsm]
• Wall Street Steps Up Political Donations, Lobbying – “Most Wall Street firms stopped making donations to lawmakers when they were receiving government funds, and many lawmakers stopped accepting them. But now that the companies have begun returning the bailout funds, they are making campaign donations again.” [WSJ]
• Further reading – Thanks to FT Alphaville for linking Francine McKenna’s post on KPMG’s Madoff exposure. [FT Alphaville]

Review Comments

Review Comments | 10.21.09

Caleb Newquist
October 22, 2009

• Galleon to Begin Wind-Down of Funds – At least one person is optimistic. [DealBook]
• Tax (Return) Stories: F. Scott Fitzgerald – Apparently FSF was not so spendy. [TaxProf Blog]
• Pay Czar to Slash Compensation at Seven Firms – “Kenneth Feinberg, the Treasury Department’s special master for compensation, will lower total compensation for 175 employees by an average of 50%, these people said. As expected, the biggest cut will be to salaries, which will drop 90% on average.” Special master? [WSJ]
• The Top Five Twitter Feeds for Job Hunters in Accounting – Use it. And follow us while you’re at it. [FINS]

PwC Employees Don’t Need AmEx Gift Cards to Motivate Them

Caleb Newquist
October 22, 2009

That’s right! We’ve confirmed that PwC’s annual employee survey went out Monday and unlike other firms, the rank and file at P. Dubs are more than happy to tell TPTB exactly how they feel without being bribed (but it would be nice).

Ernst & Young Pranks Involve Heavy Lifting, Possibly Spending $200-$300

Caleb Newquist
October 22, 2009

In these tough times, office pranks are the perfect remedy for all the bad attitudes out there. Except for you no-fun-under-any-circumstances types.
From an E&Y office in (we’re assuming) the Northeast:

our latest prank was to get the nascar fan in the office a thrill by putting a race car bed over his cube when he returned from his trip to dover for the weekend with some co-workers for the Dover 400 race.

Photos, after the jump

Wonder Bread getting a little exposure.

It’s one thing if one of perpetrators boosted this thing from their nephew. It’s a whole new level of prank-commitment if they put it on the expense report.

KPMG

The Moment You’ve All Been Waiting For

Caleb Newquist
October 22, 2009

If you work at KPMG anyway. We heard that the annual employee survey was sent out today so that’s exciting. The most thrilling news is that FIVE of you will win $200 AMEX gift cards for participating. If there are questions missing on the survey that are not addressed, feel free to bring those up in the comments.
The only other firm that we’ve heard about having their survey is E&Y so if yours is rolling out be sure to let us know.

The JDA

The IRS Has Control Issues

Adrienne Gonzalez
October 21, 2009

Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
The IRS is going after off-shore tax shelters and international banks to get its cut (presumably to make up for some tax revenue it has been missing out on in the last, oh, 8 years or so) but according to WebCPA, the IRS might want to tighten up its game on refunds.
It isn’t that the IRS is cutting checks for the heck of it – it turns out that the Treasury Department may need a quick refresher on controls for payments.

WebCPA:

[The Treasury Inspector General for Tax Administration report] found problems in the IRS’s handling of taxpayer payments that are subsequently dishonored by the banks in which they are deposited. Dishonored payments are not processed by banks for a variety of reasons, the report noted, including insufficient taxpayer funds. The IRS occasionally issues a refund to a taxpayer who had submitted an overpayment of taxes before the IRS realizes that the taxpayer’s check has been dishonored by the bank. This results in the taxpayer receiving an erroneous refund.
Between Jan. 1, 2008, and July 17, 2008, the IRS generated refunds as a result of dishonored check overpayments totaling approximately $53 million. TIGTA estimates that the IRS was unable to stop more than $20 million in refunds from being erroneously issued to nearly 14,000 individuals.

Well wait a minute, it was going to issue $53 million but was able to figure out $33 million were cut in error. That’s not so bad, is it?
The IRS cop out is that tricky stimulus check business of 2008 in which several dishonest taxpayers stopped payment on tax checks and made off with the stimulus booty instead of the money going towards offsetting the taxpayer’s tax liability. Sneaky!
Seriously, in the age of electronic funds transfers and billion dollar money market runs that cripple the financial system in a matter of minutes, how is it the IRS is still so far behind the times?
The TIGTA report claims that resolving this issue with proper controls on the IRS’ end could “protect approximately $102 million over the next five years from being issued to taxpayers in error.”
What’s $102 million nowadays anyway? That’s not even a fraction of an AIG bailout. No wonder the IRS isn’t trying too hard.

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