Going Concern

Uncategorized

Guess the Tab: E&Y Edition

Caleb Newquist
August 31, 2009

Unfortunately our source didn’t know the final tab on this particular fiesta so we’ll put out for you to speculate.
Possibly a Bacardi bottle on the far left and maybe that’s Glenfiddich, second from the left, so we’re not talking top shelf but it’s also not that garbage that gets served out of the well. Plus, the receipt seems far too long for the number of bottle shown. Leave your best guess in the comments.

Uncategorized

Cash and Cash Equivalents, Insolvent State Version

Adrienne Gonzalez
August 31, 2009

Is your state broke? Suffering from liquidity issues? Desperate to buff up municipal coffers? Worry no more, dear resident, if your state is anything like mine, they’ve got one hell of a plan up their sleeve.
Lots of bright ideas, after the jump

NYT:

With the economy floundering and tax revenues falling, governments and public authorities have tried to patch holes in their tattered budgets by charging new or higher fees for a broad range of services — including taking a civil service exam and operating a nuclear power plant.
The purpose of the many microcharges is to help avoid, or at least limit, broader tax increases. But with escalating fees for things like tanning bed inspections, pistol permits and marriage certificates, daily life can start to seem like a labyrinth of public-sector panhandlers.
There are increased payments required from cradle (birth certificates) to grave (plots in municipal cemeteries); in the workplace (licenses for private investigators, lifeguards and tax preparers) and at leisure spots (entrances to parks and public golf courses).

It doesn’t end there. Municipalities will have to make their pennies up wherever they can – this affects everything from parking meters to licenses (yes, even your precious CPA, little beancounter!), booze to license plates. “Fee-based government” is the new “tax and spend” and you can pretty safely bet that you’re going to get it squeezed out of you everywhere you turn. States argue that the policy allows them to make up vulgar budget shortfalls in the least offensive way possible, applying increased fees to specific services instead of vague, across-the-board tax increases.
We are used to this when it comes to the CPA exam as NASBA has increased fees every August as far back as I can remember (thankfully a beer is now $96 in California so my short term memory has increased as I’ve cut out discretionary spending and at the same time unintentionally solved my drinking problem that came as a result of my accounting job) and 2009 is no exception. It cost $809.71 in 2008 and is now $822.73. Putting this into perspective, just Audit would have cost you $159.25 in 2006. By 2008, it was up to $226.28 – keeping in mind that this is only the fee paid to NASBA and does not include re-exam fees and/or applicable State Board of Accountancy/Prometric fees.
Ouch. Don’t expect this to get better any time soon.

On Campus

Recruiting Season Kicks Off

Caleb Newquist
August 31, 2009

Classes started for a lot of colleges in the past week and it sounds like some firms are already out there spreading their ~~propoganda~~ good word. At least according to one account, the early events have been well attended which fits with the notion that enrollment has remained high.
So if you’re a student, let us know what your early recruiting events have been like and if you’re a recruiter for a firm or a professional working these glad-handing fests, let us know your early impressions about next year’s newbies and interns.

Big 4

PwC Basically Says That the Lehman Brothers Bankruptcy is a Trainwreck

Caleb Newquist
August 31, 2009

If you find yourself out of work but are willing to endure several sleepless nights across the pond, PwC in the UK may need some help with the administration of Lehman Brothers.
More, after the jump

Reuters, via NYT:

PriceWaterhouseCoopers, which is working with over 100 companies, mostly in the UK but also in continental Europe, said on Sunday: “We’re dealing with a large number of entities and therefore the claims could be as much as $100 billion.
“These claims are exceptionally complex and we anticipate a large amount of further work in dealing with (them).”
A significant amount of the claims arose as a result of guarantees issued by the parent company to its subsidiaries, the administrator said.
PwC said it had worked with administrators in other affiliates to understand Lehman’s accounting system so a standard approach to the reconciliation of inter company balances could be agreed.
“If this can be achieved then it should reduce the likelihood of affiliates suing each other in pursuit of amounts that are owed between the different Lehman estates,” it added.

Not sure what kind of expectations Lehman’s creditors have but we’d encourage a cynical outlook.
Lehman Claims Could Reach $100 Billion: PwC [Reuters via NYT]
Lehman Bankruptcy Won’t Be Pretty [JDA]

Uncategorized

Labor Day: Long Weekend or Just a Long Weekend?

Caleb Newquist
August 31, 2009

Labor Day.jpg As the psychological end of summer approaches, there’s an issue out there that we find confusing. We heard a rumor that KPMG is requiring its remaining faithful to take Friday as PTO, even though some offices have kindly asked for their employees’ to squeeze in some extra time for the month of September.
On the one hand we’re sure lots of you don’t have to be asked twice to take an extra day of PTO. However, this is still America, which means if you’re inclined to spend an extra eight hours in your massive gray cubicle, to comply with your office’s request of 50 hour weeks, you’re allowed to do so.
The risk the firms run here is that by extending a typical three day bender into a fourth, this will allow you additional time to seriously consider saying, “To hell with this,” and fulfilling your lifelong dream of becoming a freak show performer.
So discuss in the comments the upcoming weekend and whether your firm is putting the gun to your head (and if you’re cool with that) to start the festivities early or if you’re expecting a long romantic weekend with your spreadsheets.

Preliminary Analytics

Preliminary Analytics | 08.31.09

Caleb Newquist
August 31, 2009

• Frank Said to Back Broader Fed Audits – “In an interview Friday, Mr. Paul said Mr. Frank agreed to allow a vote on the bill and to work on language that would allow the Government Accountability Office, the investigative arm of Congress, to audit the Fed’s monetary-policy operations.” [WSJ]
• Fed makes $14bn profit on crisis loans – In case anyone needed another reason to audit the Fed. [FT]
• Big Firms Are Quick to Collect, Slow to Pay – “As credit markets remain tight and banks rein in lending, corporations are being forced to squeeze more cash from their day-to-day operations at a time when revenues are slowing and the economy remains weak. ” [WSJ]
• The Savings Rate Has Recovered…if You Ignore the Bottom 99% – Dubious government stats? The horror. [Naked Capitalism]
• Raft of Deals for Failed Banks Puts U.S. on Hook for Billions – “The agency’s total exposure is about six times the amount remaining in its fund that guarantees consumers’ deposits, exposing taxpayers to a big, new risk.” She Bair, rebuttal? [WSJ]

Review Comments

Review Comments | 08.28.09

Caleb Newquist
August 29, 2009

1.michael_jackson_71246050015.jpg • Michael Jackson’s Death Ruled a Homicide – Thank the Maker. We’re in need of a circus. [Reuters via NYT]
• MADOFF VICTIMS FIGHT PICARD OVER PROFITS – Yes, because he’s working against you people. [NYP]
• Tech Firms Drowning in Their Options Worthless paper. [CFO]
• FASB Stakes A Claim On Disclosure Of Litigation Contingencies – Let’s just go back to cash basis. Thoughts? [FEI Blog]

Uncategorized

Grant Thornton is Making Their Passion Known Worldwide

Caleb Newquist
August 29, 2009

Because, you know, some of you may have forgotten that they were an international firm. Nevermind the complete failure to coin “Global 6 Accounting Organization” as a way to sneak into the ~~prestigous~~ ~~cool~~ biggest firm club. GT is giving interviews with obscure accounting publications to make this happen.
Eddie Nusbaum, who will be the new Global CEO on January 1st, is going after Big 4 clients to continue building their international business, which kinda sorta works, we guess.
What’s most confusing about G to the T’s “strategy” is that no matter what happens, they’ll never compete with the big firms through organic growth.
Even if GT and BDO made sweet accounting firm love their total international revenues would still be dwarfed by what the fourth place Big 4 firm rakes in. Huge, Big 4-apocalyptic events that would involve government intervention are the only way GT is making it to the big time. So maybe the stars are lining up. WTFK…
Grant Thornton Plans International Growth [Web CPA]

CPA Exam

Talking About Your Exam Scores No Doubt

Caleb Newquist
August 29, 2009

Picture 3.png

Uncategorized

The PCAOB Doesn’t Care for the Flagrant Disregard of Their Rules

Caleb Newquist
August 28, 2009

thumbs down col.gif Having never been part of a PCAOB investigation, we’re not able to attest to the uncomfortable violated feeling one must have when you have a government foot soldier crapping all over your work.
That being said, if you can at least make an argument for your shoddy work, you’ve got something to throw at them. The same cannot be said when you have no discernible argument whatsoever that will allow you to look yourself in the mirror and call yourself an auditor.
Enter Moore & Associates and its President, Michael J. Moore:
Poor auditing, after the jump

After M&A registered with the Board in October 2004, Moore began auditing
the financial statements of public companies for the first time in more than ten years.
Over the next three years, M&A accepted nearly 300 public audit engagements, with
Moore serving as the auditor with final responsibility on each of them. Respondents
added new clients at a nearly exponential rate while the audit staff was comprised of
inexperienced staff members overseen by one professional. M&A staffed the audits
with assistants who had no accounting or auditing education, experience or training.
These unqualified audit assistants planned and executed the audits with little or no
supervision from Moore.

So, you’re back in the audit game after a ten years on the bench and you really don’t have the resources to pay anyone that has any accounting background. Not being one to shy away from adversity, you go out and find whatever warm bodies you come across at the Greyhound station. Eventually you get the call that the PCAOB is on to your little game and you’ve got to think that the jig is up.
Nah. Keep rolling with it:

Respondents also failed to cooperate with the Board’s investigation…Respondents created false work papers that did not accurately reflect the work performed on the relevant audits and produced those false work papers to the Board’s Division of Enforcement and Investigations. Moore also falsely testified that these work papers produced by Respondents were true and accurate audit work papers completed during the audit, when he knew they were not.

Nothing like going down in flames. For his incredibly diligent dishonesty and disregard for the PCAOB’s rules, Moore has been banned to the CPA darkness.

Moore & Associates, Chartered, and Michael J. Moore, CPA (8/27/2009) [PCAOBUS.org]

Uncategorized

Chicago Learns the Importance of Public Comment

Adrienne Gonzalez
August 28, 2009

parking meter.jpg We haven’t seen outrage like this since FASB bent over and rewrote mark to market!
Denver is now considering taking a cue from a Chicago plan that basically pimped out the city’s parking meters for a lump-sum lease payment instead of relying on a constant stream of unknown revenue in quarters. Genius… sort of.
More, after the jump

Councilman Doug Linkhart would like to solve the city’s $120 million budget shortfall with quarters. But instead of fixing the deficit one quarter at a time — about $9 million in revenue from parking meters per year — the councilman would like to sell the city’s parking meter revenue stream to a private firm for one lump sum — as much as $430 million — and then use some of the money to close the budget gap. “It’s got some potential,” Linkhart told the Denver Daily News on Friday. “It sounds like a good idea … by no means is it perfect, and by no means is it exactly what I would do … but the concept is certainly worth looking into.”

That’s all well and good and on the surface it appears as though this plan cannot possibly go wrong, right? I hope Denver is watching how this unravels before jumping prematurely on the parking meter pawn shop bandwagon.
Hmm:

Clint Krislov, a Chicago attorney for a group of taxpayers, said on Thursday that a Cook County Circuit Court judge on August 28 will hear their petition to allow the lawsuit challenging the deal to proceed. “The contract is illegal so we’re asking (the court) to block spending tax dollars on it,” Krislov said. “After the transaction closed, the city continued to expend public funds to maintain and repair CPM’s privately controlled meters based on complaints that a number of CPM’s parking meters were disabled, would not take coins, did not properly recognize the coins placed in the meters, and displayed inaccurate parking rates and times of enforcement,” the lawsuit stated.

Chicago taxpayers have a point. You cannot use city streets as a private pawn shop and then apply taxpayer money to pay interest on your pawned items. Perhaps someone can point to the FASB that says as much?

Big 4

Rumor of the Day: Deloitte Snagging Chrysler Audit from KPMG?

Caleb Newquist
August 28, 2009

Maybe figuring that bankruptcy means a fresh start with everything, we received a tip that Chrysler is dumping KPMG for Deloitte as their external auditors:
“it was announced to KPMG Detroit employees late yesterday…via voicemail or conference call”
Could be the reason the Green-dots in Detroit were rumored to be getting raises but WTFK.
Right now we’ve reached out to all three members of this love triangle and only Deloitte has gotten back to us and could not confirm or comment.
If you’re at Radio Station or the D in Detriot and have details on this, let us know. We keep all sources anonymous.

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