Going Concern

This Really Comes as No Surprise But We Feel Obligated to Ask for Your Help

Caleb Newquist
September 30, 2009

More good news about your tax dollars at work. This time courtesy of the punching bag of government agencies:
More, after the jump

According to reports, an audit conducted by an outside firm found that the SEC’s acquisitions office failed to maintain accurate records on its contract and procurement activities, and reported data that was inaccurate to the federal procurement database.
In one glaring example, the regulator could not supply the auditor with data about all of the contracting activities from the SEC’s regional offices.

Good Lord. Recently laid off peeps, please do your country a bit of service and help out the complete f*(king nightmare that is our government. We implore you.

On Campus

Attention: Deloitte Is Handing Out Donuts On Thursday

Caleb Newquist
September 30, 2009

For crying out loud, this is what we’re talking about people. If you’re in the DC area, get your hungry hippo ass over to Kogan Plaza at The GWU on Thursday from 10 am to 12 pm. Accounting firms don’t skimp on this stuff so consider doing a jay before going and update us on how many you put away.

Any other firms feeding your faces with fried goodness on campus? Better get in on it while you can.

Big 4

Rumor Mill: PwC Jumps On the Cancel Christmaskah Bandwagon

Caleb Newquist
September 29, 2009

Following the Grinchy yet charitable ways of KPMG and E&Y, rumor has it that P. Dubs is passing on holiday parties in all offices and donating $1.5 mil to charity instead.
Odds on Deloitte making a similar announcement prior to Halloween to complete the Scrooge Superfecta are currently going at 5-2.

Uncategorized

The Year Ahead Poll Results

Caleb Newquist
September 29, 2009

The voting ended last night and we know your anticipation is reaching fever pitch so we’ve finally presented the results, after the jump.

1. White Collar Slavery: 47.3%
2. Happiness Rating: Zero: 26%
3. Swap Green Visors:13.7%
4. Big Four Union: 13%
Troubling news as you can see. Nearly 75% of you are expecting to be underpaid and miserable. We recommend that you start some sort of cash only business and get your asses into therapy.
The bottom 27% of you seem to be proactive at least but 13% of you may be viewed by some as socialists. However, that seems to be the hot thing these days so we say go for it.

Big 4

Layoff Watch: KPMG September Edition Part II

Caleb Newquist
September 29, 2009

Layoffs of client service support professionals occurring circa now.
UPDATE, 4:28 pm: Rumor is that layoffs will continue through tomorrow. One source informed us that 25% of the Information Security Department in Montvale, NJ was let go. Continue to keep us updated with any developments.

Uncategorized

SHOCKER: Audit of the Defense Department Had Serious Problems

Caleb Newquist
September 29, 2009

We’re pretty surprised that the Defense Department has an audit of its contracts at all but since they do, we’ll give them credit for at least setting up some faux-oversight. That’s where the credit stops however, since the auditors work for “The Pentagon’s Defense Contract Audit Agency” (“DCAA”) which just reeks of independence.
As we mentioned, the fact that anyone would attempt to audit the Defense Department is laughable at best. Some problems that the General Accounting Office found, according to Web CPA:

The problems uncovered by the investigation included waste of time and resources by the audit agency. As an example, the GAO noted that DCAA auditors spent 530 hours to support an audit of the cash management system at a research and development grantee, only to discover that the billing system was non-existent.

Awesome. Three months of work to discover a phantom billing system. Oh, but there’s more:

During a separate billing system audit of a supplier of combat systems, “Auditors deleted key audit steps related to the contractor policies and internal controls over progress payments without explanation.” One DCAA auditor told the GAO he did not perform detailed tests because, “The contractor would not appreciate it.”

Testing is rather inconvenient when accountability is involved. Especially in the name of national security.
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 SD’s and recommended that the other three be “improved without additional work”.
Buckling to clients isn’t as unusual so we’ll let this one slide and considering the DoD’s track record, they’ll continue doing whatever they hell they want. We just thought we’d bring it up here for the record.
GAO: DOD Audit Oversight Has “Widespread Problems” [Web CPA]

Big 4

Jim Turley Says E&Y Is Totally On Board with This Global Accounting Standards Thing

Caleb Newquist
September 29, 2009

Really, he said that global standards were ‘imperative’ which carries a much more serious connotation and we’d hate to sell Big Jim short:
‘It is imperative that there is one set of financial reporting standards for the world if the quality and comparability of investor information is to be protected.’
And in an amazing coinkydink, that’s what everyone at the G-20 said too:
More, after the jump

In a statement the leaders said they: “call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.”

Since so many big shots were in the Burgh, last week, JT figured he’d just put it out there that his firm was FIRST! to say, “Yeah, we’re down for redoubling our efforts! Whatever that is, we’ll do anything! Don’t know about the rest of you slackers but we’re damn proud to get on this. June 2011? No problem. Am I right people?”
Ernsters? Ready to double down? It’s imperative, you know.
Big Four firm backs G20 accounting stance [Accountancy Age]

Career Center

Crain’s: New York CPA Firms’ Employment Down 7%

Caleb Newquist
September 29, 2009

Hopefully it’s not too early for bad numbers. Crain’s New York put some together to give you an idea about how bad the employment picture has gotten for accountants in the past year.
The total number of accounting professionals for the top 25 firms in New York was more than 23,176 as of June 30, 2009.
That number is down from 24,909, or 7% from the previous year. The Big 4 horsemen account for two-thirds of this total and, not surprisingly, they all reported drops:
Continued, after the jump

No. 1-ranked KPMG cut 13% of its professional staff, or 681 employees. No. 4, Deloitte, was not far behind in job shrinkage, with a decline of 378 staffers in the New York area, or 11.7%. Pricewaterhouse reported 350 fewer professional, or a 9.2% decline. Of the four, Ernst & Young posted the smallest loss: a drop of only 1.6%, or 67 professionals.

Crain’s list of details on the top five firms (Big 4 + RSM McGladrey) shows additional data, including KPMG having over 10% more total professionals in New York than the next highest, PwC.
Smaller firms including CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs (probably the most ridiculously long name for firm we’ve ever seen) and Weiser also experienced significant drops:

CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs, which saw a loss of 53 professionals, or 22.7%, despite last December’s acquisition of Mahoney Cohen by CBIZ & Mayer Hoffman McCann…Weiser…reported a decline of 10.7%, or 42 professionals.

Sorry for all the gloom. Here are some small bright spots:
• Eisner, hired 120 professionals, an increase of 25%
• Marks, Paneth & Shron, 47 and 13.4%
• Seymour Shapss Martin & Co, 20 and 11.7%
You don’t have to be John Nash to see that the drop by the Big 4 overtake any increases by the smaller shops. And seven percent seems like a pretty significant drop but what the hell do we know?
Discuss your firm’s (or former firm’s) numbers in the comments and feel free to speculate on the job outlook for the coming year. It’s not like it could get worse. Could it?
A hard number for accountants: 7% fewer jobs [Crain’s New York]

Preliminary Analytics

Preliminary Analytics | 09.29.09

Caleb Newquist
September 29, 2009

• Stanford moved to federal lockup in Houston – To help with this complicated case, say his attorneys. Lotta ins, lotta outs. [Reuters]
• Starbucks debuts Via instant coffee in U.S., Canada – So much for coffee purists. [Reuters]
• Rhetorical Tax Evasion – In case you were considering opting out of health care coverage under the new, not even close to being made law, plan. It could cost you 25 large. [WSJ]
• FDIC to propose banks prepay 3 years of fees: source – That should cover them. [Reuters]
• Too Small to Bail Has a Nice Ring to It – Sure. [Breaking Views via NYT]
• Restaurants Dangle Cheaper Drinks but Risk Watering Down Their Profits – The catch is, you’re hanging out at…Chili’s. [WSJ]

Review Comments

Review Comments | 09.28.09

Caleb Newquist
September 29, 2009

• Last day for our poll on the Year Ahead and be sure to submit your captions for the Emmys.
• Allen Stanford Can Take A Punch – Probably a small disagreement over some Lucky Strikes. [DB]
• Ex-Enron Broadband Co-CEO Sentenced for Wire Fraud – Does this mean that Enron on the stage will have to do a re-write before coming to the States? [Bloomberg]
• Treasury Department to Examine ACORN’s Compliance With Tax Laws – Surely this isn’t as bad as it sounds. [TaxProf Blog]
• SEC Charges Detroit-Area Stock Broker Who Lured Elderly into $250 Million Ponzi Scheme – Fundamentally disrespecting the elderly. In Detroit no less. This is some special kind of Ponzi Scum. [SEC.gov]
• Axa chief attacks accounting rules switch – Says accounting rules are ‘too important to be left to accountants’. Right. Because insurance companies and governments have such kick ass track records on the subject. [FT]

Big 4

Phil Provides the Morale Boost All You KPMGers Needed

Caleb Newquist
September 29, 2009

Unless you hate golf and then you probably don’t give a damn.
Phil Mickelson may have turned his year around as the walking billboard for KPMG. Fill came from behind to win the Tour Championship yesterday, winning by three strokes over some no name. Apparently the Tour Championship is a big tournament so Fill/Phil* should feel good. You ALL should.
This will require a serious reassessment of Phil’s prior rating that we gave him last month after the PGA Championship.
We need your input on how to rank everyone’s second favorite golfer to be sponsored by an accounting firm. Give us your expert analysis in the comments on the impressive win and if you’re good, we’ll throw a 9-box out there at some point.

*Do we need to vote on this? This seems like a polarizing debate. Discuss.

CPA Exam

CPA Exam Changes Shouldn’t Affect You

Caleb Newquist
September 29, 2009

The CPA Exam is apparently changing, whether you like it or not.
More, after the jump

Web CPA:

The American Institute of CPAs has scheduled Jan. 1, 2011 as the official launch date of CBT-e, a more technologically modern version of the Uniform CPA Examination…CBT-e, short for Computer-Based Testing evolution, will also update the content of the Uniform CPA Exam. The exam will include new content and skill specification outlines, including questions about International Financial Reporting Standards…Also starting on Jan. 1, 2011, new authoritative literature will be released based on the FASB Codification of accounting standards and a new research task format will be introduced on the CPA Examination.

Considering this is over a year off, these changes should not be of concern for most of you but considering some of the scores we’ve seen for this year and pretty much everyone seems to be ignoring the new Codification, maybe some of you should be worried.

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