Ex-BDO partners that were involved with the firm’s tax shelters are continuing to drop like flies. This time, Mark Bloom, a hedge fund manager and former BDO partner that worked in the Tax Solutions group, pleaded guilty to several charges.
Bloom agreed to forfeit assets as part of his plea agreement including a boat and two Steinway pianos which Bloom performed versions of his favorite songs on:
Check out the song selection, after the jump
- Friday Footnotes: KPMG Staff Not Happy With How Layoffs Were Handled; SEC Says PCAOB Should Toss Independence Rules | 5.8.26
- In a Final Rule, Dept of Education Is Unswayed By the AICPA’s Strongly Worded Letters About the Meaning of Words
- Plante Moran Goes South of the Border to Acquire a Firm in Mexico
Deloitte to Squash Ratings?
Following up on yesterday’s post on KPMG’s slashing of ratings, we checked with a source that gave us the lowdown on the rating system at Deloitte:
“From what I heard, all of the 4s and 5s have already been shown the door. D&T is known to suppress ratings, so I doubt that there will be a lot of 1s or even 2s this year.”
So we asked them to elaborate on “suppress ratings”:
Get the details, after the jump
Your Senior and your manager will give you a rating. Lets say that you are good and they give you a 2. They will need to justify this rating to the entire firm when they have the review meeting (I forget the exact name). Since every Senior thinks that their staff is the shit, a lot of the 2s tend to get pushed down to 3s because if everyone is performing at a higher level, then that is the average. Then, they have a limited number of 2s to fight over…2s get paid more and I think that they get some kind of performance bonus. So they have an incentive to limit the number of 2s given out every year.
Sound familiar to anyone? Discuss.
We’re smack in the middle of performance review time so email us any shady changes, adjustments, throwing people under the bus, etc. going down to tips@goingconcern.com
BDO Seidman’s Revenue Disappoints Us
BDO Seidman’s revenue for the fiscal year end June 30 dropped nearly 6% to $620 million and dammit, we’re disappointed. Sure tax revenue is up 6% but assurance revenue was down 9% and consulting revenue was down over 15%. What’s the reason for this? According to BDO’s CEO Jack Weisbaum it’s…wait for it…yes, the recession. What a news flash.
According to Web CPA, BDO’s revenue breakdown is 60/25/10 for audit/tax/consulting and the remaining 5% is a grab bag of stuff. Point is, BDO is a whore for audit and considering how the whole Banco Espirito thing turned out…
Speaking of Portuguese banks, BDO is still on the hook for $522 million. No word on how that fits into the firm’s plans to bounce back in fiscal year 2010.
BDO Seidman Revenue Falls Due to Recession [Web CPA]
Scoping | 07.31.09
• Buffett Posts $1 Billion Profit on China Hybrid Carmaker BYD – “The automaker has jumped fivefold in Hong Kong trading since the deal was announced on Sept. 27, helped by Buffett’s investment and rising demand for fuel-efficient vehicles.” – YAWN. [Bloomberg]
• ‘Cash For Clunkers’ Lacks Cash For Clunkers [NPR]
• U.S. Recession Worse Than Previously Estimated, Revisions Show – “The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.” Government data estimates not even close? THE HORROR. [Bloomberg]
• Regulators Are Getting Tougher on Banks -“Federal regulators have escalated the number of wounded banks they have essentially put on probation, with some of the targeted banks complaining that the action is too harsh.” [WSJ]
California Overtime Lawsuits Update
This is our initial coverage of the overtime lawsuits against some of the major accounting firms doing business in California. For those of you not up to speed, these suits were filed by non-licensed associates who believe they were misclassified under California law as exempt professionals and are due overtime and other benefits due to non-exempt employees.
The suits are all in various stages but the key case that may determine how the other cases will proceed is Campbell v. PricewaterhouseCoopers.
Campbell is currently awaiting argument before the 9th Circuit Court of Appeals. The primary issue before the court has to do with whether or not, under the professional exemption, an associate is required to be licensed by the state of California in order to qualify for exempt status. Counsel for Campbell essentially argues that only licensed or certified accountants can qualify for exempt status in California while PwC argues that uncertified accountants who can qualify as “learned professionals” are exempt employees and thus not eligible for overtime pay.
The U.S. District Court of the Eastern District of California granted summary judgment on liability in favor of Plaintiff Campbell and ruled that attest associates must have a license in order to be exempt. The court further held that they may not qualify for exempt status under the “learned professional” section of the exemption. However because the trial court felt it was a close question, it certified the matter to the 9th Circuit Court of Appeals for interlocutory appeal.
According to Bill Kershaw, of Kershaw, Cutter, Ratinoff LLP, lead counsel for the plaintiffs, the ruling in this matter could have significant repercussions for other remaining wage and overtime lawsuits. Mr. Kershaw believes that if 9th Circuit does rule in the favor of the plaintiffs, then the likelihood of the case resolving itself prior to trial would substantially increase.
If the court of appeals rules that learned professionals can be defined as exempt, PwC (and likely the other defendant accounting firms) will center their argument back in the trial court on the appeals court’s ruling that unlicensed accountants are indeed “learned professionals.”
We contacted Dave Nestor, Head of Communications for PwC in the U.S. and he provided us with the Firm’s statement:
PwC believes that its attest associates are professionals who spend the majority of their time engaged in challenging work requiring the use of their intellectual abilities, judgment and discretion. Based on these and other factors, PwC’s attest associates are properly considered exempt under applicable law, and are therefore appropriately compensated.
We’ve provided a list below of all the cases against accounting firms currently in the courts in California for your information. Check the list for your firm and please remember that it is your right to participate in any of the class action lawsuits if you meet the criteria set forth in the case. Even if you are still employed by the firm being sued, they cannot retaliate against you.
Likewise, you can participate in the case on behalf of the defendants if you are approached and choose to do so. You also have the right to not participate at all if you so choose.
If you receive any correspondence from your firm regarding the overtime and wage lawsuits, please let us know using tips@goingconcern.com. We’ll always keep you anonymous.
We’ll be covering this story as it progresses and continue to check back here for periodic updates.
Review Comments | 07.30.09
• N.Y. Attorney General Details Bonuses At Bailed-Out Banks – Cue populist outrage [NPR]
• Subpoenas Issued to Goldman Sachs, JPMorgan, U.S. Senator Says – YES! Political theatre to ensue [Bloomberg]
• CNBC Viewership Down 28% – DB has some ideas on how to get a boost (maybe literally) [Zero Hedge]
• Exxon Reports Lowest Profit Since 2003 – “earnings of $3.95 billion” Meh. [WSJ]
• Glenfiddich 50-Year $16,000 Whisky Tempts Investors – Who loves scotch? [Bloomberg]
Your CFO Might Be Clueless about How IFRS Will Affect Your Company
In some very comforting news, CFO’s in a recent poll said they’re unsure about how at transition to IFRS would affect their company.
More scary stats include 8% of those surveyed said that they are “very familiar” with how their company will be affected and 43% said they were not familiar at all. So what does all of this IFRS ignorance mean?
Check out the list after the jump
A) Lots of CFO’s don’t give a rat crap
2) Lots of CFO’s don’t really believe IFRS will come to the States
D) Lots of CFO’s need to work on their qualifications
The obtuseness may work out though. At the pace the conversion debate is going, by the time the conversion gets done we’ll all be dead.
Survey: CFOs unsure how international rules will affect U.S. business [DBJ]
Final Call for Tchotchkes
This is the final call for your firm’s schwag. The following submission is especially nice because someone at Ernst & Young was cool with a less than perfect item.
See this high-quality piece, after the jump

Quality in Everything We Do – Damn straight.
Rumor of the Day: KPMG Slashing Performance Ratings
Commenter Guest @ 2:39 brought to our attention that the Radio Station is cutting performance ratings circa now. This is a little more salt in the wound after pay freezes were announced slowly leaked. If you’ve had your performance review recently and you got blindsided by a cut rating let us know. Email your tips to tips@goingconcern.com
Your New Career Goal: FEI Hall of Fame
Did you ever dream of being inducted into any form of a hall of fame. Baseball? Rock ‘n Roll? Calculus? Did you think all hope was lost for this particular career goal when you decided to become a pointy-headed number cruncher?
Well, we’ve got great news for you. The Financial Executive International Hall of Fame was established four years ago (how did we miss that?) and just announced this year’s recipients. Now you too can fulfill those dreams of giving a teary-eyed speech, thanking all the little people you stepped over and around to become the finance and accounting oracle that you are.
This year’s ceremony will induct Donald Nicolaisen, former Chief Accountant at the SEC and Dennis Dammerman, former vice chairman at GE. So what if you’ve never heard of them? They’ve achieved financial professional immortality! You could be next. Oh, and Bob Pisani of CNBC is hosting. Joan Rivers won’t be far behind. Is there a reason that this ceremony isn’t being beamed into every home in America?
Nicolaisen, Dammerman Named to FEI Hall of Fame [FEI Financial Reporting Blog]
Deloitte Study: Your Boss Wants to Know About Your Trite Status Updates
A study put out by Big D states that 60% of business executives believe that they have every right to know how you portray yourself and the organization you work for.
And while they’re checking that out, they’ll probably go ahead and sneak a peek at your photos from your friend’s bachelorette party where phallic hats and straws were passed out to anyone who would accept them.
Not surprisingly, the study also states that the majority of 18-34 year old employees want The Man to BTFO of their online social networking. While this demand for privacy may exist, apparently you’re still aware that the power of rumor mill known as the Internet can still take your employer down like Nixon Dick Fuld Arthur Andersen.
While less than 20 percent of the overlords out there actually have Big Brother in place, almost half of employees say that they will still flagrantly update their status as “I hate Mondays” or “The weather is way too nice to be working!”
Deloitte’s 2009 Ethics & Workplace Survey Examines the Reputational Risk Implications of Social Networks [Deloitte Press Release]
Some Taxpayers Seeking Enlightenment, Others Risking Eternal Damnation
The IRS is saying that wealthy taxpayers are rethinking their sinful offshore banking ways in expectation of a tax evasion rapture.
Last week the Service had 400 applicants for its temporary voluntary disclosure program which is four times the amount they had in all of last year suggesting that some taxpayers are seeing the light.
The IRS evangelism has come about mostly because of their pursuit of the 52,000 secret names held by UBS. While this battle for souls is still continuing, the IRS figured they’d make a run at converting other, non-UBS, sinners.
Seek thy truth, after the jump
Some taxpayers are remaining non-believers however, thanks to their agnostic attorneys:
Yet attorneys say that those who come forward now risk supplying the IRS with more financial information than the agency may have otherwise been able to collect. “These taxpayers reasonably fear that applying to the program could supply the agency with a roadmap it would not otherwise have,” said Barbara Kaplan of Greenberg Traurig in New York, who handles voluntary-disclosure cases. “They worry that they could wind up both rejected for clemency and helping the IRS case against them.”
Ultimately, all taxpayers will have to take their own path but if they find themselves cast into the darkness, they won’t be able to say that the truth wasn’t presented to them.
Tax Evaders Flock to IRS to Confess Their Sins [WSJ]
