Going Concern

Big 4

KPMG: We’re Not Done

Caleb Newquist
August 25, 2009

The Radio Station, presumably not wanting to break its stride, is not done handing out bad news. Apparently layoffs have still been occurring as recently as yesterday in Chicago. The total there is now between 30 and 35. Check out the final numbers for other cities in our debrief post and if you have updated numbers please pass them along or discuss in the comments.

Barry Salzberg isn’t Satisfied with Deloitte’s Diversity

Caleb Newquist
August 25, 2009

Accounting firms get lots of recognition for their diversity, but Barry Salzberg isn’t satisfied, reports […]

CPA Exam

Countdown for Current CPA Testing Window

Caleb Newquist
August 25, 2009

Since exam scores were being released last week, we probably don’t need to remind some of you that next Monday marks the end of the current testing window for the CPA exam. For some of you that means that you’re working 10-12 hours a day and then going home to study on your own or to listen to the sweet voice of Peter Olinto. For a few of you, it may mean that you’re coming up on your 18 month deadline to finish the exam. SHUDDER.
Of course if you were/are up for manager and you’re still studying, you probably haven’t been sleeping for months. We’re guessing that tax associate didn’t even bother registering to sit this summer but we could be wrong.
Whatever your situation, we’re sure that you feel like you could be studying more. Does your firm allow you to study at work? If so, is that even feasible for your current workloads? The firms put a big priority on passing the exam but your work better get done, right? Are they still paying bonuses for passing or did they cut that too? Let us know about your firm and whether or not passing the exam is a reality considering you’re all doing more with less.

Apparently There Was No Rush on the Naming of the Chief Accountant

Caleb Newquist
August 25, 2009

It’s nearly September and Mary Schapiro has finally gotten around to naming a Chief Accountant. It’s been a busy 7-8 months, and with Ponzi schemes popping up out of nowhere and Steve Job’s liver, sometimes getting appointments made can’t be squeezed in.
James Kroeker, a former partner and Deloitte gets the honor of whatever it is the OCA actually does. Oh wait:
More, after the jump

Kroeker, who has held the job on an interim basis since January, would be responsible for interpreting rules requiring companies to disclose their financial health to shareholders. If named, he would referee disputes between banks and investors over writedowns for assets that lost value during the recession.

That’s it? This will be a breeze. Get crackin’ Jimmy. You’re got eight official months to get caught up on.
SEC’s Schapiro Said to Name Kroeker as Agency’s Top Accountant [Bloomberg]

Preliminary Analytics

Preliminary Analytics | 08.25.09

Caleb Newquist
August 25, 2009

• Obama to Reappoint Bernanke as Fed Chief – “Mr. Bernanke is seen by supporters inside the administration and in markets as a creative and steady hand who helped to keep the financial chaos, which became especially dangerous in the past year, from becoming much worse.” Now that the next four years are in the bag, the beard is getting grown out. [WSJ]
• Volcker: Money funds weaken financial system – Sounds like someone wants headlines on someone else’s big day. [Reuters]
• Appeals Court Says Stanford Must Remain in Jail – Let’s get this circus of a trial started already. [DealBook]
• GameStop says CFO will retire in March – Presumably to work on his GTA game [Reuters]

Big 4

Review Comments | 08.24.09

Caleb Newquist
August 25, 2009

• BofA Denies It Misled on Merrill Bonuses – In other words, piss off. [WSJ]
• Swine Flu May Cause 90,000 U.S. Deaths, Report Says – We’re looking forward to hysterical 24 hour swine flu coverage again. [Bloomberg]
• Bureau of Prisons Denies Madoff Has Cancer – Chest hair removal and getting high is definitely accurate though. [DealBook]
• Philadelphia Eagles Pass on $10k Tax Credit for Hiring Ex-Convict Michael Vick – That explains it. [TaxProf Blog]
• IRS Could Target Off-Shore Hedge-Fund Investors Next ‘Expect U.S. investors in off-shore hedge funds in places like the Cayman Islands, who failed to properly report earnings to the IRS, to be the next target of U.S. tax authorities’ [WSJ]

Big 4

E&Y is Freezing Pay Because it’s Fair

Caleb Newquist
August 25, 2009

E&Y has officially entered the pay freeze zone, via a voicemail left for employees, according to multiple tips we received. This follows the rumor that was announced a couple of weeks ago.
The following factors led to freeze:
~~Excuses~~ Reasons and our explanations, after the jump

• Fairness – “It’s fair that everyone’s pay is being frozen.”
• Market Competition – “Monkey see, monkey do”
• Invest in Top Performers – “Top Performers” is subject to interpretation.
• Market Pressure – “Our clients are biting the dust or they’re ditching us”
• Fiscally Responsibility – “It’s a recession”
One exception to the freeze is that second year associates will get a raise in order to put them at the level of or above the incoming new associates, which is consistent with the earlier rumors. Select cities and practices may receive increases but it doesn’t sound too promising.
Bonuses are being paid to those of you that got promoted and they break down as 5k to SA’s, 6.5k to Managers, 8k to Sr. Managers. Sounds like partners took a pay cut this year so dammit, no belly-aching. Just kidding, go ape. If you have your own interpretation on the reasons given for the freeze, discuss in the comments.

Big 4

KPMG Needs Everyone’s Help

Caleb Newquist
August 25, 2009

Whether or not you’ll be working on Labor Day isn’t exactly clear:
More, after the jump

As we approach year end, we need everyone’s help to finish the fiscal year strong. Our goal is to achieve our forecast for the month of September. Based on the hours that are currently projected…we are falling short of that goal.
As a result, we have asked all Client Service Delivery professionals (including partners, senior managers and managers) to increase their chargeable hours in the month of September. With respect to seniors and associates, we are asking each of you to work an additional 32 hours in the month of September. We recognize this may result in overtime hours for some individuals
I encourage you…to make sure all chargeable hours for September are reflected. The amount reflected…will be increased by 32 hours to arrive at your goal. Please work with your managers to determine the best way to utilize this additional time in a productive manner.
We encourage you to delay any non-charge activity until October, assuming there are no required deadlines. This will help maximize our chargeable hours

At least they’re kind enough to “recognize this my result in overtime hours”. Tax associates probably won’t have any problem coming up with the extra hours but as for the rest of you, we’d love to hear your feelings on your extra four days of work in September.
UPDATE, 7:46 am: Our understanding is that this email was sent to audit professionals in the New York Office but judging by the comments, other offices have been put on notice to squeeze in some extra time for September. If you’ve received a similar email for your practice or office, shoot us the details.

The IRS is on YouTube and iTunes But Still Needs Our Help

Caleb Newquist
August 25, 2009

We’re guessing that the IRS has been struggling for years to figure out how to relate better to the general public. They finally came to the conclusion that people like videos and audio as opposed to instruction booklets that make the New York Times look like a kaleidoscope. Clearly progress has been made, however, we still foresee challenges.
The biggest problem we have is that the videos are pretty much the live-action equivalent to the instruction booklets.
More, after the jump

Example:

Sorry we had to put you through that. Now our suggestions:
• Hugh Jackman or Megan Fox-types cast in the videos.
• A little song and dance, possibly performed by NPH.
• If a song and dance isn’t feasible, inject a little comedic relief. We’re thinking strategically inserted movie clips.
• Did we mention Hugh Jackman and Megan Fox?
As with anything in our society, celebrities (especially attractive ones) make everything better. Remember the Hollywood Vote Campaign videos? This is the model we would suggest the IRS strongly consider.
We’re fairly certain that Leonardo DiCaprio explaining how to avoid tax scams using his steely gaze will have a much greater affect on taxpayers than our friend here in the yellow blazer. Just a thought. If you’ve got other suggestions for the service on how to make their videos more watchable, discuss in the comments.
IRS Spotlights Recovery Credits on YouTube and iTunes [Web CPA]

Big 4

PwC Layoffs Continue to Mystify Us

Caleb Newquist
August 24, 2009

We’re slowly getting details on PwC layoffs that occurred a few weeks ago that were part of the newly stripped down performance rating that we talked about last week.
More, after the jump

I was one of the employees involved in these so called layoffs out of the Boston office. I can say that these staff cuts are coming at a time in which PwC, specifically it’s advisory services, has seen a dip in it’s numbers concerning profit…The lay off that I received came as a big surprise to me. For one I did not recieve a single negative reveiew throughout the entire performance year. I was actually on track for promotion and was reccommended by numerous individuals to be promoted to senior associate…From what I have heard, these staff cuts have been happening at all levels and all lines of service.

What’s not clear is how each office determines the timing of the layoff. We haven’t gotten any indication that there is one big whacking day or if it’s staggered among offices to keep on the DL. The one thing that seems clear is that PwC whackings come with little or no warning as performance ratings seem to magically change for the worst.
This seems to be all occurring while Denny Nally was spreading good cheer this Spring. Via an email we received from a reader:

While I am realistic about the challenges ahead, I continue to see the glass as half full and, based on the picture we have right now, I am committed to moving forward with our people strategy. That means, even though in some markets and in some practice areas we may have excess capacity, we will continue to manage our cost structure and explore all available options before we consider reductions to our staff.

Not exactly sure what “all available options” includes but it sounds like those have been exhausted because “reductions” are certainly occurring and all indications have been that everything remains “performance related” and that all levels are affected.
If you’ve got details on your PwC office’s latest layoffs shoot us some details, including numbers, city, practice, and severance.

Uncategorized

We’re Probably Going to Have to Accept the Fact That Accounting Rules are No Match for the Bank Lobby

Adrienne Gonzalez
August 24, 2009

We’ve been over this 1000 times but like a bad rash, the issue keeps coming back.
NYT has already accused politicians of meddling in the esoterica of accounting, though personally I think that accusation might have been expressed just a tad too late.
As I mentioned when the July article came out:
More, after the jump

Ex FASB chair and former KPMG partner Edward Trott got it right saying “The area for bank regulators to be involved with accounting standards setting is to help identify the financial information the banks need from others to make appropriate lending and investing decisions. In my experience, banks want current fair value information about assets that serve as collateral for loans. They do not want information about what assets cost two or three years ago.”

Exactly! So what’s the debate about?
Assets are not being valued rationally. If someone can explain the model to me, I would love to hear it.
Or as we now call it, “fuzzy math.”
I’ve never been a huge fan of math, probably a large part of why I ended up on the fringes of the accounting industry, we hardly use it. It’s the rules that are being perverted, not necessarily the numbers. That’s Trott’s point, and he’s not the only one who feels that way.
The problem is that companies (non-financials) need to navigate these waters that have been artificially stirred up to allow banks to appear healthier than they are. Companies are licking their wounds and selling off assets while banks are preening over their profitable quarters? That doesn’t make sense.
Accounting pressure is not new either:

What’s gone unnoticed is that in the late ’90s Summers did nothing to stop former Fed chair Alan Greenspan from pressuring US accounting rule makers to water down a proposed new derivatives accounting rule that may have helped stop the current crisis. Many business leaders had strongly opposed the new rule…In fact, in 1998, Summers testified in Congress against regulating the derivatives market.

The ongoing debate gets stranger. What is there to debate about? The pressure is there, minus the understanding of what occurs as a consequence of these actions. Somehow, the behavior continues and we’re still arguing over it.

Not Paying Taxes to Prove a Point Doesn’t Seem to Work

Caleb Newquist
August 24, 2009

The expression “but in the world nothing can be said to be certain except death and taxes” has once again proved resilient as a man in Mississippi has been convicted of not filing tax returns from 2002-2005. This occurred after he filed a civil lawsuit for $1.1 billion against the IRS claiming Congress did not have the authority to tax.
We really don’t have much experience in taking on the government over the constitutionality of taxes but conventional wisdom would probably suggest that if you’re going to sue the IRS for a billion dollars, not filing your tax returns in order to prove your point is not going to help your case.
Pearl man convicted of tax evasion [Clarion Ledger via TaxProf Blog]

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

Senior Accountant, Advisor

Remote Senior Accountant

Remote Tax Manager

Senior Accountant, Advisor

Remote Senior Accountant

Remote Tax Manager