Going Concern

Uncategorized

Bob Herz is the Most Dangerous Man in America

Caleb Newquist
August 7, 2009

bob herz.jpg According to Reuters columnist, James Pethokoukis, that is. JP argues that the FASB’s most recent attempt to go balls to the wall with mark-to-market will endanger the economy:
“What if an upgraded mark-to-market standard forced slowly healing banks to set aside huge sums to cover paper losses and further crimp lending? Not FASB’s problem.” He also argues that the FASB is motivated by the ideology around transparency as opposed to “practicality and experience”.
The problem, as we see it, with this argument is that JP sees mark-to-market as an inconvenient rule considering the circumstances that the economy is under. That very well may be but we would ask, what the hell is the alternative? “Massaging” the rules every so often, as he puts it? So making the rules less principled when they are inconvenient is the solution? Accounting rules are not written so that we can change them when they don’t work in our favor.
Make no mistake, we’re not crazy about the current system as it exists. GAAP continues to look more and more like the U.S. Tax Code, so the FASB’s sloth-like attempt to develop a “principles system” is ~~promising~~ ~~encouraging~~ something. Mark-to-market is the best reflection of that something. The idea that tweaking of the rules under duress is an acceptable form of determining the direction of financial reporting is what drives accountants f’n berserk.
America’s Most Dangerous Man? An Accountant [James Pethokoukis/Reuters]

Firm Watch

Firm Watch Ranking and Wrap-up

Caleb Newquist
August 7, 2009

So here’s our little wrap up on the firms we covered this week. Pretty difficult to figure out who’s really got it the worst out there, as every firm seems to have its own skeletons. God knows that we’ll continue to dig through as many closets as we can find in order to keep you all informed, especially as we approach the fiscal year ends for raises and bonuses (or lack thereof) and the incoming new hires get razed.
See the rank/em>

Taking a Beating
1. PwC – On top of everything that PwC is already dealing with, rumor has it that this year’s new hires got their starting pay cut but it’ll be spreading over the next 24 months to ease the pain. PwC is, for the lack of a better comparison, the Goldman Sachs of the accounting firms. They’re always going to take the most heat and be scrutinized the most. So with that in mind, they top our first ranking as the firm that seems to be taking the most serious beating.
2. E&Y – Judging by the comments, sounds like E&Y has had the most significant layoffs. Somehow the firm still finds the cash to throw a monster international rager for interns. The Lehman Brothers lawsuits haven’t really even gotten started. Our suggestion: Sneak down to Orlando and party on the company dime while you can.
Bloody but Somehow, Still Standing
3. BDO – BDO has got to figure what to do about the $520-odd million they owe Banco Espirito. Considering the fact that they won’t be getting help from the ~~International Firm~~ Global Cooperative, this may be a hell of a problem. Other than the TTT comments, BDO-ers aren’t saying much. Get your friends that work there to spill their guts here.
4. KPMG – Rumors of another reduction in force in October, forced PTO, teams are short staffed. We would like more info on those cell phone chairs please. The Radio Station troops are doing a lot of belly aching, which we love, that’s what were here for. Keep it up Blue! Obviously, the big risk here is the New Century lawsuit which includes the “we’re going to piss everyone off” quote. Considering the pace of these lawsuits, we’ll be talking about it well into next decade.
Maintaining
5. Deloitte – Deloitte, while canning plenty of people, partners not sharing the love and losing some big clients, does not have any major litigation pending that we can see so they fall near the bottom of our list at this point in time. Oh sure you could say that Parmalat is out there but does anyone give a damn? They make extra long-shelf-life milk. That’s a fraud in it’s own right.
6. Grant Thornton – Sounds like G to the T is able to keep their layoffs pretty quiet but they possibly have had it the worst. Keep enlightening us with those details. Refco is out there but those guys were cheats, liars, and thieves. A public defender could get you out of that. However, the biggest strike we see against is trying to squeeze into cool kids club with the coining of “Global 6 Accounting Organization”. Nice try GT.
So there you have it. P. Dubs and E&Y take the top two spots in our very first Firm Watch ranking. Radio Station and BDO have got serious issues to work and Big D and GT seem to fall to the bottom of the ranking by having less bad issues than the other firms.
Give us your thoughts. Reshuffle completely? Any more tips? Send them to tips@goingconcern.com. We’ll do the firm watch every so often as big events unfold. In the mean time, keep sending us tips, dirt, and ridiculous emails that inform you about paper clip rationing and the such.

Big 4

Rumor of the Day: Comp and Bonus Pools at Big 4 Seriously Depleted

Caleb Newquist

August 7, 2009

We’re not trying to ruin your Friday but at the very least, this might encourage some of you to get your drink on a little earlier than planned.
Rumor received late last night that a Big 4 CEO was asked about compensation and bonuses at some grin n’ grip and he responded that the compensation adjustment and bonus pools for all the Big 4 firms was going to be down 90%.
This fits together nicely with the rumors of freezing and/or cutting pay that have been going around. Okay, now try to get some work done or figure out where you’ll be having that three martini lunch.

Preliminary Analytics

Preliminary Analytics | 08.07.09

Caleb Newquist

August 7, 2009

• Obama likely in no rush to nod on Bernanke’s fate Apparently this is the one thing that doesn’t need addressed immediately. [Reuters]
• U.S. Payroll Losses Slow, Unemployment Rate Declines 247,000 lost, 9.4%. Is that green shoots? [Bloomberg]
• France targets bankers’ bonuses – Soon, pols are going to have to find something else to pander to the masses with. [BBC]
• AIG Posts $1.82 Billion Profit, First Since 2007 – You can just sign that over to the us, thankyouverymuch. – U.S. Taxpayer [Bloomberg]
• Willis Group Sued by Stanford’s Venezuelan Clients – Sure, why not? [DealBook]
• Judge Approves Lawyer Fees in Madoff Liquidation – In other news, Madoff victims are still pissed. [DealBook]

Review Comments

Review Comments | 08.06.09

Caleb Newquist

August 7, 2009

• North Korea Wanted Only Bill Clinton for Mission to Free Women – And Bill Clinton wanted the mission to free women. Worked out great. [Bloomberg]
• Senate Votes 68-31 to Confirm Sotomayor – Senator ~~Stuart Smalley~~ Al Franken presided over the vote, which Bill O’Reilly will hate, which we, in turn, will love. [ATL]
• AIG’s Hank Greenberg Pays $15 Million to End SEC Suit [Bloomberg]
• Unemployed Man Getting Really Good At Unemployment Not surprisingly, it’s pretty easy. [The Onion]

Firm Watch

Firm Watch: BDO

Caleb Newquist

August 7, 2009

All right, so this is it for our firm watch. We realize loading three firms into one day wasn’t such a good idea but we procrastinated out of habit.
We wrap up with BDO Seidman, who some of you probably consider to be TTT-1 but whatevs.
See BDO’s list, after the jump

• Lawsuits – BDO ~~International~~ Global Cooperation hit the lottery when a jury in South Florida bought the wedding planner defense in the Banco Espirito lawsuit. That left the U.S. firm to deal with the $520 million verdict in the original case. The U.S. firm just reported revenue results of $622 million. No word on how that will reconcile.
• Madoff Exposure – Listed as a defendant in seven lawsuits.
• Overtime Lawsuits – List as a defendant in one lawsuit.
• Layoffs, etc. – Same dealio as GT. We’ve only heard of minor layoffs but as high as 200 in the UK. Get us up to speed if you’ve got details.
• Miscellaneous – Global CEO Jeremy Newman has a blog that is frequently TLDR. The U.S. CEO has been compared to a special version of Ricardo Montalban and a former partner had to recently give up his boat.
Finally. That catches you up on all the firms that you’ll see regularly around here. They all seem doomed but also have the tenacity of cockroaches. You’ll see our totally unfair, unrealistic ranking tomorrow with some updates that we’ve gotten throughout the week. Before then, continue to send us your tips to tips@goingconcern.com.

Uncategorized

PCAOB Reminds Us That They Have Their Own Oversight Board

Caleb Newquist

August 7, 2009

God bless the PCAOB. Back in 2004, they created the Office of Internal Oversight and Performance Assurance (IOPA) just in case those smartass Peekaboo inspectors were getting a little too self-righteous all over your audit.
Apparently, the fact that the PCAOB has its own internal oversight board is supposed to make all of you auditors comfortable. That assumes you knew about it in the first place. We sure didn’t know this internal affairs-esque board-within-a-board existed.
Maybe realizing that the IOPA had virtually no identity among anyone, anywhere, the PCAOB did everyone the courtesy of updating its “About” section of its website today reminding us of the internal watchdog. So whether you’ve got a legitimate complaint or you’re just seeking sweet, sweet revenge on that know-it-all dick questioning your tickmarks and indexing method, now you can give the PCAOB a taste of their own medicine.
Internal Oversight [PCAOBUS.org]

Firm Watch

Firm Watch: Grant Thornton

Caleb Newquist

August 6, 2009

Now that we’ve dispensed with the Big 4 on our Firm Watch, we’ll throw in the two major ~~second~~ ~~next~~ non-Big 4 firms to demonstrate our willingness to spread the ~~love~~ ~~hate~~ coverage.
Get acquainted with GTTT, after the jump

• Lawsuits – The lawsuits worth mentioning for GT are Parmalat and Refco. While Deloitte was able to get the suit tossed, GT wasn’t so lucky. Investors in the never-go-bad dairy company are allowed to proceed with their lawsuit which will guarantee that this case continues on to the end of time. As far as Refco goes, well, we’ll be damned if we can find anything that is even remotely recent as it relates to GT. Help us out if you can.
• Madoff Exposure – G to the T’s UK office is running down assets across the pond. That unenviable task could almost qualify the firm for sainthood.
• Overtime Lawsuits – Listed as defendants in two cases.
• Layoffs – This is where we need your help, GT-ers. As far as we can tell, not a lot of blood has been spilled at G to the T. If you’ve details on rumors on anything upcoming or layoffs that have gone down recently, let us know.
• Miscellaneous – GT’s partners in the UK have interns sign off on audit reports and the Midtown New York office as a diabolical address. Oh, and the lame attempt by their PR team to coin “Global 6 Accounting Organization” as the new tag for accounting firms.
There’s the study on passionate folks at GT. Get us caught up on stuff we’re missing at tips@goingconcern.com. We can’t imagine it’s that boring to work there.

Big 4

Students

Lock up the Booze, E&Y Interns in Orlando

Caleb Newquist

August 6, 2009

We just picked up one of the few Tweets that has made it through today:

This type of event will likely lead to many things including international hookups, late night skinny dipping (and probably urinating) in the pool, and widespread drunkenness of epic proportions.
If you’re down in Orlando this weekend for this three day extravaganza, send us your stories of debauchery to tips@goingconcern.com. According to the website, the festivities are at Disney World, so don’t embarass ~~your firm~~ yourself and try to keep the nudity out of the view of children.
International Intern Leadership Conference [EY.com]

Uncategorized

Rumor of the Day: All Big 4 Firms Freezing and/or Cutting Pay?

Caleb Newquist

August 6, 2009

We’ve heard some rumors that all the firms are giving serious consideration to freezing pay this year and possibly pay cuts in the Northeast and Mid-Atlantic regions. This would follow the Radio Station rumors that we mentioned last week.
Top performers and promotees, determined by God knows how, may be getting bumps but we haven’t heard anything definite. If you’ve got some deets or just more rumors, shoot us an email to tips@goingconcern.com.

Big 4

Firm Watch

Firm Watch: Deloitte

Caleb Newquist

August 6, 2009

The last of the Big 4 Horsemen of the Bean Counter Apocalypse is Big D-period. Catch up on the rest of the usual suspects: Radio Station, P. Dubya, and E&Y to get the gist of this little exercise.
Deloitte’s got a pretty similar list as the rest of the firms but with a couple twists so let’s get down to brass tacks:
Get the details, after the jump

• Losing Clients – We’ve heard that firms are low-balling their RFP’s so it’s no surprise that some clients are switching but Deloitte seems to have had worse luck than others. UAL, Heelys (for the kids), Bear Stearns, Merrill Lynch, and Washington Mutual have all disappeared from D-period.
• Lawsuits – Believe it or not, the Parmalat debacle is not a done deal, as some lawsuits against the US and Internationalfirms are still out there as a judge ruled in January that the agent/agency issue was worth a closer look.
• Madoff Exposure – All week we’ve been referring you to the list of Feeder Fund Lawsuits over at D&O Diary. In a small water into wine moment, Deloitte does not appear on the list once. Nice bullet dodge Big D.
• Overtime Lawsuits in California – Deloitte is listed as the defendant in three of the cases.
• Layoffs, performance reviews, etc. – So, as we saw yesterday, this is where Deloitte’s sitch gets, pret-tay, pret-tay, pret-tay ugly. Layoffs were reported in both December and March nationwide. The ~~performance~~ stealth cuts are common here too and more may occur. All this is going on while an out-going CEO is talking to the press about how bad things have been in the last five years and the UK CEO is having Scrooge McDuck pool parties.
• Miscellaneous – The worst drug dealers in the world used to work for Big D.
So that does it for Deloitte, God bless ’em. And that does it for the ~~Final~~ Big 4. We’ll throw in GT and BDO in for good measure but if you want to throw some more jabs at the big boys, email us at tips@goingconcern.com. You’ve got until around high noon tomorrow before we’ll start coming up with our completely unfair and unscientific ranking.

Uncategorized

Your New Career: Actor

Caleb Newquist

August 6, 2009

Are you a young bean counter totally apathetic towards your career choice? Do you wake up thinking that if you have to look at spreadsheets for one more day you might just go mental on everyone in your office?
Well, the gods are shining on you today:
See the role, after the jump

Casting for the short thriller “A Paper Trail”
A group of friends finds a large sum of money hidden away in the woods. Unfortunately the owners come looking for what is theirs.
Casting for the male and female leads:
Matt – A competent accountant who decides that the best course of action will be to keep the money.

Stacey – She is nervous and has her reservations about taking the money.
Send an email with your headshot and resume. We will be casting on Sunday, August 9th, from 12-5 @ The Rosendale Youth Center!

Sorry lady number crunchers, unless you’re capable of summoning your inner-Hillary Swank, this one is for the gents.
So dudes, basically no acting involved. Show up, looking however you normally look and act how you normally act: Competent. Best course of action is to keep the money. Completely natch.
Not a thespian? Then tell us what you’d rather be doing than pulling sample selections or researching 1031 exchanges. SHUDDER. Anything has gotta beat the hell out of what you’re working on right this second.
Casting for a Short Thriller film (Rosendale) [Craigslist.org]