September 25, 2020

Search results

174 results found.

BREAKING: Young Woman That Sits Next to Some Bored Person Just Found Out That She Passed REG Section of CPA Exam

Someone who's a little short on billable work felt compelled to share this with us on the tip line: The girl who sits next to me just got her REG score and passed. Of course there could be any number of reasons that this person would share this news with us. Among them: 1) In […]

Ex-BDO CEO Wins New Trial Because One of the Jurors Lied About Being a Drunk, Shoplifting Shellfish, Everything

Former BDO CEO and wolfpack leader Denis Field has won a new trial on charges of tax fraud thanks to a juror in his trial who lied about her alcoholism and, oh…pretty much everything: U.S. District Judge William Pauley in Manhattan today overturned the convictions, ruling that the presence of Catherine Conrad, who was Juror No. 1, […]

Grant Thornton Is the Latest Firm to Join the Chinese Auditor Resignation Jamboree

SGOCO Group, Ltd. issued a press release this morning to let everyone know that Grant Thornton's Chinese affiliate decided to take a walk on May 14th. They disclosed this with the SEC around 10 am on Friday, but with the Facebook circus going on, no one noticed. What's interesting is that the company filed Form […]

A Young Reader Requests the Lowdown on Santa Clara University’s Accounting Program

Are you considering wasting my time instead of wasting your own when you should be studying for the CPA exam? Do you get off on degenerates criticizing you? Just need a good old fashioned AG talking to? Get in touch and I'll help you procrastinate by answering questions you could ask Google. I was wondering […]

Accounting News Roundup: Ernst & Young Cuts Out Lobbying for Big Audit Clients; The U.S. Tax System – Fair?; IRS Missed Some NFPs | 05.04.12

Ernst, audit clients cut lobbying ties-records [Reuters, Earlier]Ernst & Young's lobbying unit is no longer listed as a lobbyist for three major U.S. companies, all of whom were 2011 audit clients of the accounting giant. The deregistration follows questions raised by two U.S. senators in March about whether the dual relationships crossed auditor independence boundaries. Documents […]

Employer Who Fired an Allegedly Racist Accountant (Twice) Is Allegedly Racist

Last month we learned that Virgnia Spidle, the Chief Accountant for the City of Birmingham, Alabama, was fired a second time by her employer. The grounds for the first dismissal were racism, which a personnel board dismissed. Not one to be dismayed by awkwardness around the office, Spidle returned to her job only to be […]

Free Advice for PwC’s Social Media Department

I have some concerns about PwC's social media practices. These concerns go way back, long before they followed and then unfollowed me on Twitter (pfft, I'm used to it) and it appears as though no one on the PwC social media team has had the guts to bring it up so I'm going to go […]

Everybody Relax, Warren Buffett’s Secretary Is Not Making Six Figures

Earlier we discussed how Warren Buffett's secretary and glory hog, Debbie Bosanek, has become a poster child for all of us that have effective tax rates higher than those of wealthy dudes like her boss and GOP Presidential cyborg Mitt Romney. This has caused a number of people to freak out and start wondering aloud how […]

How Do The U.S. News Top Accounting Rankings Compare on CPA Exam Scores?

I'm sorry if you guys are sick of these stats but someone suggested we hit these rankings and last time I dared to write about something other than CPA exam scores, I was essentially laughed right off the Internet. Thanks for supporting my dreams, people, that'll teach me to try to get you all excited […]

Mark Weinberger Is the Future Ernst & Young CEO. You Shut Up.

Yesterday we broke the news of Mark Weinberger jumping into the big Black and Yellow chair when Jim Turley steps down next year. It's pretty big news for E&Y as JT has been running the show since July 2001. With all his fancy schmancy credentials, there's no question that Mark is up for the job […]

Occupy Wall Street Learning That Accountants Aren’t Too Interested in Working on the Cheap

As we've discussed, Occupy Wall Street has had a bit of trouble with tracking their finances. Donations initially were collected in "a large cooking pot covered in cardboard and duct tape" but as methods became more sophisticated; "donation buckets" and "a yellow messenger bag" were also utilized. Expenses are numerous, including but exclusive to meals, bail, and […]

Here Are Some Ideas for Surviving the Upcoming Busy Season

It's that time of year again, folks. Holiday parties are wrapping up. Some of you are trying to squeeze every drop of water out of the CPA stone. And from the chatter we've been hearing, this busy season could be one of the hardest in years. Chalk this up to the fact that voluntary turnover shot […]

Let’s Talk CPA Exam: Working and Studying: How to Keep Your Sanity and Pass

For any of you CPA exam candidates looking to spend this Thursday evening in front of computer listening to my magical voice sharing infinite wisdom, you’re in for a treat.

You may or may not be aware that Phil Yaeger of Yaeger’s CPA Review has a weekly radio show where he talks about…wait for it…yes, the CPA exam. I’ll be the featured guest on Phil’s radio program this Thursday evening at 10 pm eastern time. We’ll be discussing the delicate balance of studying for those three special letters and working full-time. You’ll be able to call in with questions or if you feel compelled to berate me about typos or ask why Adrienne has to use so many curse words in her posts, I’ll be happy to oblige you with answers.

Click here if you’d like an email reminder for this week’s show. Whatever your motivation for calling in or listening, it should be a hoot.

AICPA Announces Winner Of the Beta Alpha Psi Medal of Inspiration Award

For once, we have a heartwarming story of a person who set her mind to accomplishing a goal in spite of more than her fair share of adversity and challenge. This should shame all of you C students into at least pretending like you are grateful for what you have, at least until next semester.

Last week, the American Institute of Certified Public Accountants announced that Ms. Hefgine G. Fils-Aime, a spring 2011 graduate of the University of South Florida, has been awarded Beta Alpha Psi’s Medal of Inspiration Award. The award, sponsored by the AICPA, is bestowed upon a student who has experienced extreme hardships in his or her life and who has demonstrated an unusually high level of success dy. The award includes a $5,000 cash stipend, which Ms. Fils-Aime plans to use to help continue her education by pursuing a Master’s of Science degree in accountancy at Wake Forest University.

Ms. Fils-Aime’s story is one of overcoming persistent obstacles. In the mid-2000s, her parents sent Fils-Aime and her sister to Florida to live with relatives, fearful that their young daughters were in danger if they remained in Haiti. Then 14-year-old Fils-Amie, a native French and Creole speaker, had to learn English immediately and was enrolled as a junior in high school due to having skipped a grade in Haiti and the differences between the Haitian and American school systems. Fils-Aime graduated high school at age 16 and enrolled in the University of South Florida.

While the other 18 year-olds in the dorms were partying and trying to get her to take that route with them, she chose to remain focused on her education. As if that weren’t challenging enough, her biggest challenge arrived on Jan. 10, 2010, when Haiti was hit with a 7.0 earthquake. It would be days before she knew what happened to her parents and younger brother. Her mother did not survive the earthquake, buried in the rubble of their home when it collapsed. Port-au-Prince was so damaged that she could not fly in to attend her own mother’s funeral. Somehow during all this, she stuck to school and her extra-curricular activities, which included serving as student project support assistant at the Business Systems Reengineering Department, a candidate for Beta Alpha Psi and the Brothers Points coordinator for Alpha Kappa Psi. She attended PwC’s Florida Leadership Adventure in the summer of 2010.

“The winner of this year’s Beta Alpha Psi Medal of Inspiration Award, Hefgine G. Fils-Aime, is a shining example of a person who overcame extreme hardship, and a language barrier in a foreign country, to achieve success,” said Jeannie Patton, AICPA’s vice president of academic and career awareness. “Her dedication, motivation and courage to continue offers inspiration and hope to every one of us who has thought about quitting when the going got tough.”

Fils-Aime was presented the award on Friday at Beta Alpha Psi’s 2011 annual meeting in Denver.

“Hefgine Fils-Aime’s life story is an inspiring one for everyone who is part of Beta Alpha Psi,” said Mary Stone, president, Beta Alpha Psi. “For members, it is a story to remember when life seems overwhelming or unfair. For faculty advisors, forum members, and staff, it is a story to remember when confronted by the media stereotype that today’s students don’t work hard. For all of us, it is reminder that great challenges can be overcome with hard work, perseverance and good humor.”

Fils-Aime graduated with a bachelor’s degree in accounting with an overall GPA of 3.89 in May of 2011 and received a full-time offer from PwC. She was recognized on the College of Business’ top 25 under 25 and had been active in Beta Alpha Psi, Alpha Kappa Psi and Beta Gamma Sigma.

Current BAP students may vote for either themselves or another BAP student who they feel meets the criteria for this award, which is given out annually. There are two criteria whereby students can win. First, they may have experienced extreme hardships in their lives in pursuing their education, and demonstrated an unusually high level of success in spite of that adversity. Or, second, they may have done something particularly inspirational in the course of their young lives that had tremendous impact on someone else’s life. Either path is acceptable. Students are encouraged to participate in the program, not to bring honor or glory to themselves, but to inspire students to want to affect on the world around them in a positive way.

Let’s Try to Talk This Soon-to-Be CPA Exam Candidate Off the Ledge

I’m no longer surprised by the fact that otherwise (allegedly) rational human beings think it is appropriate to ask a bunch of assholes on the Internet what they should do with their lives. No offense to any of you but I’d hardly bet my life’s decisions on the input I get from a bunch of Internet trolls hiding in cubes around the country making dick jokes amongst themselves.

That said, I’m hoping you guys have some good input for this guy. And by good, I think you know what I actually mean.

Dear GC,

I’m a B4 intern graduating in May 2012. Unfortunately, I won’t have 150 credits by that time, but I’ll hopefully have a full time offer from the firm. While this doesn’t seem like an uncommon problem, I feel like I’m between a rock and aof hefty Master’s programs’ tuition rates and the intensity of CPA studying. Therefore, I have the following dilemma…

I could take the CPA right after graduation (to become NY certified) and take a one-semester Master’s program in the Fall. I’d have the whole summer to study and pass the CPA, but I’d be paying $15K for the Master’s and delaying my start time (and future promotions/bonuses) to January 2013. I want to start making money sooner rather than later to pay off my mounting college debts.

The other option is finishing off my last 12-15 credits at a local community college (far cheaper obviously) immediately following graduation. I could then study for the exam either during or after the extra courses. I would be able to start (I think) around October and avoid the massive MAcc tuition. However, I don’t think I’d have enough time to study and pass before beginning full time work, and I’ve heard the longer into your B4 career, the harder it is to find time to study and pass the first time.

I have a tough decision to make and enough time to become more well-informed. People have been telling me it’s all about preference, but I don’t think that’s a good enough answer. There are strong pros and cons in both, but I’m worried my mind will continue to stagnate as it gets closer to decision time. Do you have prior-experience-related advice that will lead me in the right direction? Thanks in advance.

Sincerely,
TooYoungForThis

Where do we start with this? First of all, you’ve a) already fallen into the debt trap and b) totally fallen for the myth that you’ve got to get a MAcc to get anywhere in this industry. You’re tripping. Nowhere in the NY exam requirements does it state that you have to take on more debt and another degree to be a CPA in the state:

A bachelor’s or higher degree from a program that is registered by the Department as meeting New York’s 150 semester hour education requirements; or a Masters degree in accounting from an AACSB accredited accounting program; or a bachelors or higher degree from a regionally accredited college or university and completion of 150 semester hours in the following content areas, including the following:

* 33 semester hours in accounting with at least one course in each of the following areas:
• financial accounting and reporting
• cost or managerial accounting
• taxation
• auditing and attestation services
* 36 semester hours in general business electives and
* The curriculum must also include, either as stand alone courses or integrated into other courses, the study of business or accounting communications, ethics and professional responsibility, and accounting research.

(Acceptable course work is detailed further in the 150 semester hour course content table.)

As for the rest of it, anyone who has taken any of the routes you mentioned will probably have some advice for you related to their experience but please keep in mind that it is just that: their experience. Your own will be based on a lot of factors, such as the actual level of debt you are willing to sustain, your motivation to get a CPA/MAcc/awesome Big 4 job, your skills and how committed you are to any of the decisions you make. So that’s probably why you’re getting really vague answers on this from others.

What’s this about your mind stagnating? Knock it off, take responsibility for whichever path you desire to take (not which path the Internet or your parents told you to take) and take that path like a motherfucker. It sounds to me like you’re not all that into any of these options, and that’s probably the biggest cause of your inability to make a decision right there.

Do you want a MAcc? Do you want to get through the exam in less than a year? Do you want to take Advanced Accounting from some musty community college teacher? No one can answer those questions for you. You’re a grown up now and obviously NOT too young for this if you managed to get this far, so grow up and decide already.

You are doing the right thing by reaching out but what I mean to say with all this yelling at you is that, ultimately, the decision is yours. I would always advise you to avoid as much debt as possible at this stage in your life; you are already assuming you are going to have to slave away to pay it off, why would you want more unless you either absolutely have to or truly desire a MAcc? It doesn’t sound to me like you do. So don’t.

(UPDATE) Comp Watch ’11: Early Returns Are in at KPMG

From the mailbag:

How about an open thread for KPMG 2011 comp discussions? Sit downs are happening this week. I’m a senior, Midwest, 13% salary increase, $3K bonus.


It seems early for comp discussions at the House of Klynveld but none other than the memo from Johnny V. and Keizer Söze stated that they were happening “later this month.” Our tipster speculated as to the motivation:

In the interest of getting people to not quit, they moved up discussions this year. The salary increases are finalized. The bonus amounts are projected, but they have stated that they are conservative projections.

Okay, then. Feel free to add if you’re planning on deferring your Early Career Investment Bonus or taking the money and GTFO (if you make it to May 2013, that is).

UPDATE:
The latest from an auditor in New York:

I have my comp discussion tomorrow and I’ve heard good things (16.4% and up)

Keep us updated.

How Should a Big 4 Auditor Handle a Manager Blocking a Transfer to Transaction Services?

Welcome to the at-least-you’re-not-John-Edwards edition of Accounting Career Emergencies. In today’s edition, a first-year auditor has an opportunity to do a rotation with Transaction Services but feels that his senior manager has taken an aggressive cock-block position. Will our hero have to get their performance manager involved or resort to thinly-veiled threats?

Looking for new endeavors? Are the men in your office giving you a hard time? Is your job making you ill? Email us at advice@goingconcern.com and we’ll give you a remedy for your troubles.

Meanwhile:

Caleb,

I am a long time GC reader, and I usually only read the career advice postings to feel slightly better about my own situation. Now, however, I find myself with a question that I would love to put before the GC readership. I am a first year at a B4. I enjoy my job, but am always interested in a new opportunity. Recently, I was offered a rotation in transaction services that will last a few months. I accepted the opportunity, but the timing of the rotation was not set in stone. I just found out that a sr. mgr. on my biggest client is trying to keep me staffed on that engagement at the expense of the opportunity of taking the rotation.

I have made my interest in taking a TS rotation since day one, and my performance manager supports it 100%. He knows that I was offered the rotation, but not that the sr mgr is standing in the way. I would like to know how to proceed. Should I go over the sr mgr? Should I forget the rotation? I enjoy my audit clients and don’t want to be seen as someone who will leave as soon as a better opportunity comes along, but this is a particular interest of mine that I made know upfront.

Please help!

Dear Cock-blocked Auditor,

Sounds like your senior manager has a non-sexual, professional crush on you. That can be a good thing but in your case, it’s a very bad thing. Your senior manager probably wants the best team possible and it sounds like that would involve you but you’ve got your own ambitions and those need to be respected. This especially true because TS has already offer has been extended to you. It’s not for someone else (senior manager or not) to stick their beak in your business and prevent you from following the career path you choose.

Having said all that, I suggest that you first talk to the senior manager on your audit engagement. You say that they are blocking the rotation but how do you know? Nothing in your email indicates that (s)he walked straight up to you, pointed a finger in your chest and said, “You’re mine, bitch!” It’s entirely possible that the SM kept you on to prevent you from getting picked up by anyone else. This will allow you to get the story straight before running off to your performance manager. If your suspicions are true (or you did experience a finger pointing incident), then it’s time to get your PM involved. If he is “100%” behind this opportunity like you say, then this should get resolved rather quickly. Transaction Services obviously wants you to work with them and it’s something you’re interested in doing. That isn’t complicated but these things do take time and that may be the hold-up.

So be patient but be direct. Until your rotation’s timing is finalized, there’s no need to get anxious but confirm the motivation behind the scheduling before you have to pull out the big guns. Good luck.

The Delicate Balance Between Looking for a Job and Studying for the CPA Exam

This particular question is a bit beyond my expertise in this uncertain economic environment, so let’s try to plot out the various ways this decision could go after the question from the mailbag:

Hello Adrienne,

I chose to study abroad for my last semester of university. As a result of this, an unfortunate set of hiring/interview timing differences (and I’ll admit, a temporary lack of motivation) I am essentially unemployed when I return to the US this weekend. I’ve had phone interviews with a couple of companies, but they never progressed because I was out of the country. My double majors (Accounting & Economics) have allowed me to accumulate more than enough credits to be eligible for the CPtting in July for BEC, August for AUD, October for REG, and November for FAR. Mainly because I currently don’t have job offer to look forward to and because I want to finish the exam as soon as possible. I already have the financing for my exam materials and the entire exam and plan on starting my studies next week.

My question to you is how much time should I dedicate to studying versus looking for a job that fits my intended career path? I know there is no magic number of hours for studying, but I don’t want to burnout/distract myself being too focused on one area. I’d like to start in public accounting in advisory or auditing in most major cities, but don’t care where. My main concern is getting preoccupied with a job that doesn’t fit my interests/skill set. Maybe I’m putting the cart before the horse with my plans, but I’d appreciate your advice.

An April 2008 CNN article (we know their track record for rock solid, completely realistic reporting on how kick ass the accounting profession is) cited the following good news for new finance and accounting grads:

Offer amounts are up 1.9 percent for finance and accounting graduates, to $48,795 and $47,413, respectively. Salary offers for business administration and management graduates rose by less than 1 percent to $43,823

If accounting didn’t offer you any desirable opportunities in 2008 (I expect you’ll get better, more specific feedback on that in the comments), you might expect a starting salary of $52,926 to show off your econ degree. Sounds decent right?

Fast-forward to 2011, which we assume is more relevant to you than ancient fluff pieces. In some markets, you will find no shortage of jobs given the correct useful skills (in some jurisdictions, useful skills are defined as SOX 404 experience or desire to screw LLP partners for bonuses), but you’re definitely missing the point here by worrying about whether or not you will get obsessed with whatever career path you take. I doubt you’re beating recruiters off with a stick, mostly because it sounds like someone missed recruiting season.

This is why people intern. You either fall in love with it (unlikely), hate it (somewhat likely) or don’t not like it enough not to do it for the next few years while you finish the CPA exam (note: finish is not the same as perpetually sit for) and get the hell out. Unless you are overachieving, drinking the Kool-aid or end up becoming one of those guys defending PwC on the Internet, chances are you’ll be lucky to find something you mildly enjoy early on.

The likeliest scenario is that you will end up like this guy, who is itching to make his break from public for something but hoping it won’t be mind-numbing. Does that sound like the career you’re looking for?

Have you fantasized about burning out in public accounting altogether? It isn’t pretty. You’ll have to ask yourself “if you’re a top-ranked staff member with your CPA and on track to be a lead senior in the fall” or a “middle-of-the-road-and-I’m-studying-for-BEC type” before you take that route. You probably don’t want to be the latter, so you’d be wise to get the CPA exam over with when you have the chance.

You admit to “lack of motivation,” code to me for “fuck, I didn’t think I’d actually have to plan any of this” so get on figuring out what’s going to make you want to get out of bed in the morning. The usual suggestion applies here: 3 hours of studying at a time for as many weeks or months as you feel you need to feel somewhat prepared (you’ll never feel completely prepared so don’t expect that). If you need 400 hours per section, you may want to consider using your econ degree instead.

If it is required in your jurisdiction, check with the state board of accountancy you’ll be sitting in to see if interning counts as experience toward your CPA license (or try your state society or association of CPAs, they usually have all this information specifically for graduates and exam candidates). It’s an option.

The short answer is: neither delude nor pigeonhole yourself into a situation you’ll struggle to get out of later. The best way to avoid this is to a) get your CPA out of the way as early as you can and b) keep your expectations very, very low.

In the best case scenario, you end up partner and have lots of free time to extort your ex-mistress with an alleged sex tape while the minions do the paperwork for you. Actually, I’m not sure that’s the best case scenario.

Studying for BEC Leads a CPA Exam Candidate to Drugs

We don’t have any CPA exam questions in the mailbag this week (you slackers) so we’re resorting yet again to trolling the CPAnet forums for good questions. Here’s an excellent one:

I’ve never had an issue studying, I guess it’s mainly because I always had a logical way of figuring stuff out and completing it extremely quick (which is why REG and AUD were so easy). However, BEC is making a fool of me. I can’t seem to figure out how to attack it, and am severely lacking motivation to study it.

I’ve used adderall a few times, and man d, I’ve had a recent serotonin problem .. and now if I take it, it actually triggers panic attacks which I try to avoid like the plague.

Do you guys have any other suggestions?

If you grew up in the 90s, chances are you knew at least a handful of kids diagnosed with ADD and prescribed Ritalin or other amphetamine-based prescription drugs to treat this “condition.” I graduated high school in 1998 and at that point, several enterprising young men and women in my class were funding their car payments by selling their prescriptions to classmates.

Drugs like Adderall and Ritalin are central nervous system stimulants that artificially force dopamine (the natural “happy drug” in your brain usually released when you are doing something you enjoy like reading Going Concern, writing your resignation letter or sleeping with randoms in your office) to the synapses in your brain. This creates the thrill, so you, in turn, look at studying as something enjoyable. Under the influence of these drugs, you could, in theory, also equally enjoy a root canal, colonoscopy, or your 12th straight hour of busy season gruntwork. Perhaps not ironically, this chemical reaction is similar to the one created in your brain when you fall in love.

The problem with taking Adderall to study for the CPA exam (as opposed to taking it to study for finals in college) is that your brain retains exam information better in smaller pieces over a longer period of time. You simply cannot “cram” for the CPA exam. Not to mention the fact that it’s illegal if you’re buying someone else’s prescription and you are supposed to represent the profession in an ethical manner but we won’t get into that.

Instead, try some of these tips to grease your brain up for studying. Trust us, you’ll be happier and healthier in the long run, though maybe not as unusually happy in the short-term.

Try Omega-3s: While the research is a bit sketchy, it is believed that Omega-3 fatty acids improve general brain function and can positively impact memory. You can find Omega-3s in salmon, mackerel, sardines, herring, flax oil, and walnuts or take a quality fish oil supplement daily.

Avoid simple carbs
: Simple carbohydrates like white bread are instantly converted to sugar in your body, filling you with empty calories. Too much sugar at once can actually starve your brain of the glucose it needs to function properly, negatively affecting memory and concentration. Instead, try to eat more complex carbohydrates like peanuts, dried apricots, dried beans and yogurt and stay away from quick fixes like candy.

Eat breakfast: If you are working and studying for the CPA exam, breakfast is probably something you haven’t seen in months or years but numerous studies prove that breakfast has a positive effect on how your brain performs. And if you’re a girl, you might want to try oatmeal instead of cereal, it could improve your short-term memory.

Caffeine is OK, in moderation: Caffeine works in a similar way to Adderall except much milder, in moderation. If you must get a fix, try to avoid sugary energy drinks and stick to plain coffee. Adding flavored cream or sugar to coffee adds empty calories that you might regret once you’re actually done with the exam and needing to shed the extra 10 or even 20 pounds you packed on during studying.

Accounting News Roundup: Will E&Y Take the Brunt of Lehman’s Bankruptcy?; Texting Japan Donations; Richard Hatch’s Light Sentence | 03.14.11

Japan Battles Nuclear Meltdown as Millions Without Power, Water [Bloomberg]
Workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo, as helicopters and convoys of army trucks headed toward areas worst-hit by Japan’s strongest earthquake. No large release of radiation was detected after the explosion, which didn’t breach Fukushima power station’s No. 3 reactor and followed a build-up of hydrogen gas, Chief Cabinet Secretary Yukio Edano told reporters in Tokyo today. The risk of a large leak is very small, he said.

BOJ Takes Action to Bolster Moneya href=”http://online.wsj.com/article/SB10001424052748704893604576199261875222164.html?mod=WSJ_hp_MIDDLETopStories”>WSJ]
The Bank of Japan jumped into action Monday to temper the economic blow from the earthquake, tsunami and nuclear emergency that hit northern Japan, doubling the size of its asset-purchase program and pouring a record 15 trillion yen ($183.17 billion) into money markets to ease liquidity concerns. “What we were most concerned about was the possibility that increases in anxiety and risk-aversion moves would negatively affect the real economy, so we judged it appropriate to mainly boost purchases of risk assets,” BOJ Gov. Masaaki Shirakawa said after the bank’s policy board meeting, which was cut to one day from two because of the crisis.

Lehman Auditor May Bear The Brunt [WSJ]
Federal investigators have grown increasingly doubtful they can prove Lehman executives violated the law by using an accounting maneuver known as Repo 105, which obscured the amount of risk Lehman held, making the firm’s finances look better than they were, The Wall Street Journal has reported. But Ernst & Young, Lehman’s auditor, is fighting fraud charges filed in December by the New York attorney general for, among other things, allegedly failing to adequately follow up on a whistleblower’s claim that Lehman was misstating the value and size of its assets.

Texting Japan earthquake donations [DMWT]
$10 will be added to your next phone bill for contributions to the following charities: American Red Cross, Salvation Army, Convoy of Hope, GlobalGiving and World Relief.

Big 4 Bias – Can We Ever Overcome It? [BDO/CEO Insights]
BDO Global CEO Jeremy Newman wants some respect!


Nine Months is Not a ‘Severe Punishment’ Fitting Survivor Winner Hatch [Yahoo]
Hatch famously failed to pay the taxes due on the $1 million prize won from the first season of “Survivor” more than 10 years ago. He was convicted of tax evasion and subsequently served more than three years in prison. He also, obviously, was ordered to refile amended tax returns that accurately reflect his 2000 and 2001 income and pay the income taxes due. Though any reasonable person disinterested in spending any more time in federal prison would have immediately filed corrected tax returns and pay the taxes due, Hatch failed to do so, and according to the Hollywood Reporter, he has been sentenced to prison for an additional nine months. Hatch was released from prison in 2009, and since then has been serving a three year term of supervised release.

India’s IFRS Carve-Outs and the Pipedream of Global Accounting Standards [The Accounting Onion]
If IFRS adoption was ever a goal worth pursuing, it has long since vanished, and the political motivations of its remaining supporters are now deprived of any pretense of legitimacy. It’s time to let the rest of the world “countdown to IFRS” if they want to, but If the SEC were really serious about protecting investors, it would scrap the IFRS roadmap. In it’s place, there should be a new plan for making U.S. GAAP unquestionably the pre-eminent financial reporting system in the world.

AIG Adopts Poison Pill to Preserve $65 Billion NOL [TaxProf Blog]
AIG, like GM and Citigroup before it, has adopted a poison pill to preserve its $65 billion NOL by ensuring that no investor acquires a 5% stake and triggers the change of ownership rules.

Should an Overachieving Auditor Ruin His Summer By Studying for the Certified Internal Auditor Exam?

Welcome to the I’ve-never-been-so-disappointed-with-commercials-in-my-life edition of Accounting Career Emergencies. In today’s edition, a future Big 4 auditor is thisclose to finishing up the CPA and is worried that his summer won’t be sufficiently ruined without an exam to study for. Is hitting the books for a Certified Internal Auditor badge the answer?

Need career advice? Need a myth about your firm debunked? Is your job driving you mad to the point of considering a terrorist act? Email us at advice@goingconcern.com and we’ll keep your face off a most-wanted list.

Back to our glutton for punishment:

Dear Caleb,

I keep going back and forth on whether or not to go for another certification. This month I’m studying for, and taking, the last section of the CPA exam. I’m starting an auditing gig at a Big 4 firm this Fall. With no CPA exam to ruin my life this summer, I’ve considered ruining it by studying for a new exam, specifically the CIA.

I’ll have the required work experience for the certification as of June 2011, so my first set of biz cards would be able to read “Indentured Servant, CIA” right out of the gate, with it being updated to “Indentured Servant, CPA, CIA” in 2012, just in time for the world to end.

The CIA exam is cheaper than the CPA and probably easier at this point. Plus, everyone would think I worked for the CIA. Should I take the exams, or get a life that will be ripped away from me in a few months?

Best,
Indentured Servant

Dear Indentured Servant,

I think a more appropriate pseudonym for you might be “Auditing Overachiever” or “Don’t Know What to Do with Myself” OR “Prefers Books About Auditing as Opposed to Interacting with Humans, Even Those Who Might Want to Have Sex with Me.” NEVERTHELESS, I’m here to help.

Your letter is a little confusing but I’ll try to piece things together. Your job starts in the fall but you’ll have enough work experience (24 months) to obtain a CIA in June so that can only mean that you’ve been an auditor for awhile. It also means this new Big 4 gig is fresh start for you in some way, shape or form since you’ll effectively be a new hire. Making those assumptions, I’m not really sure what the CIA will do for you as a Big 4 auditor. Yes, having a extra credential is nice but it likely won’t mean squat to your co-workers, partners or clients and it won’t make you any extra money. Plus, as far as I can tell, the superficial motivation behind this endeavor – paraphrasing your words – is A) “I want to ruin my summer” B) “it’s cheaper than the CPA” C) “people will think I’m a spy.”

My response to these is A) What’s wrong with you? B) How is spending more money “cheaper”? C) No, they won’t.

See why I’m confused? The underlying motivation – if i can put you on the couch for a sec – is that you’re worried about being bored. Are you completely incapable of enjoying a summer if it doesn’t involve being indoors with your nose in a book? Take a vacation, take a staycation or do nothing but study for an exam that will get you an obscure certification? In my opinion, there’s extremely limited upside to the CIA at this point in your career so do yourself a favor, finish your CPA and give the certifications a rest for awhile. They’ll always be there for when the disappointment of the world NOT ending in 2012 gets you down.

In other words – get a life, dude.

Did Prosecutors Bungle Their Case Against BDO’s Former CEO?

Maybe! Denis Field’s lawyers certainly aren’t amused with the tactics:

Denis Field, ex-CEO of BDO Seidman, the world’s fifth largest accounting firm, claims Manhattan prosecutors intimidated his former firm into curtailing and eventually cutting off payments to his lawyers. In recently filed court papers, he claims that the government deprived him of his constitutional right to counsel and seeks dismissal of the case.

Field alleges that among other tactics, prosecutors threatened to indict the firm if it kept funding his defense. During a hearing on Thursday, U.S. Judge William Pauley III of the Southern District of New York, who is presiding over the case, closely questioned prosecutors about the accusations. A ruling is expected soon.

If this sounds familiar, it should. Back in 2007, the very same prosecutors – Stanley Okula and Shirah Neiman – pulled a similar stunt, “convincing” KPMG not to pay the legal fees for the partners and employees that were facing criminal charges for their roles in the firm’s tax shelter schemes:

That case was thrown out in 2007 after U.S. Judge Lewis Kaplan found that prosecutors had improperly “coerced” KPMG into cutting off the legal fees of 13 former KPMG partners and employees. “KPMG refused to pay because the government held the proverbial gun to its head,” Kaplan wrote.

Two of the prosecutors called out by Judge Kaplan — Stanley Okula and Shirah Neiman — have also been involved in the Field case, a fact that is prominently noted by Field’s lawyers in their motion to dismiss. “The reason for the government’s conduct is obvious — as with KPMG, the prosecutors believed BDO ‘should not pay the fees’ of allegedly culpable individuals,” Field’s lawyers argue. They cited the KPMG case no fewer than 50 times in their brief.

So it appears that Okula and Neiman aren’t much for personal reflection and may have pulled out the proverbial gun again. But they’re making a case for themselves, saying BDO’s motivation for sticking Field with the tab isn’t related to them putting the screws to the firm, “the government argues that BDO stopped paying Field’s legal bills after the firm discovered that Field hid from the board a report, prepared by law firm Skadden, Arps, Slate, Meagher & Flom, warning that certain tax shelters that Field was promoting were questionable.” Hey! – you can even ask BDO’s general counsel, he’ll tell you that the firm’s decision had nothing to do with get the government off their backs. And if you can’t believe a lawyer, who can you believe?

Prosecutors on defensive in BDO Seidman fraud case [Reuters]

Can a Sole Practitioner CPA Jump to CFO?

Welcome to the two-outof-three-groundhogs-can’t-be-wrong edition of Accounting Career Emergencies. In today’s edition, a CPA with nine years experience as a sole practitioner has CFO aspirations but isn’t having any luck landing interviews. Does her near-decade of running her own shop hurt her desire to rejoin the corporate ranks?

Need advice on your career? Got a co-worker saying nasty things about you? Getting impatient while you wait for the perfect time to start your embezzlement scheme? Email us at advice@goingconcern.com and we’ll save you from yourself.

Back to the boss:

I am a female CPA in my mid-40s who has been a sole practitioner accountant for the past 9 years. I’m confident, aggressive and customer-focused. Prior to my accounting career, I worked 12 yrs in the Technology industry, for companies like AT&T and Motorola – in positions of increasing responsibility – my last 2 jobs were VP-level. I also have an M.S. and B.S. in Mathematics.

Here’s my dilemma, I would like to re-enter corporate America but this time on the finance side as CFO or Sr. Controller of a private company. I’ve just started talking to accounting/finance recruiters and I’m getting a luke-warm reception to my background. They return my calls, tell me I’m “unique”, but I’m not getting any interviews. I’m wondering if being a sole practitioner is holding me back?

My question for the guru is: what is the perception in the finance & accounting industry of a sole practitioner – are we considered to be a “lesser” form of CPA, unable to perform as a CFO? I’m also wondering how my “accounting as a second career” is perceived? It does appear that most accountants are kind of “born that way”, rather than deciding mid-life to become a CPA, like I have. But what can I say, I always had CFO-envy in my first career, so I decided to pursue my passions, start my own business, get my CPA, and go for what I wanted – one would think that would be looked at positively?

I’m really hoping you can provide some insights. I don’t have any CPAs to talk to, since my main interaction with my peers has been when I take business away from them. And I tried to get career advice from a female mentor program sponsored by my state CPA society – but all they wanted to talk about is flex-time and work/life balance!

In need of a reality check,

Dear In need,

So it sounds like you’re tired of being the boss without having anyone to boss? Or maybe you miss the friendly confines of corporate America? Whatever your motivation, we have a simple question for you: are you nuts? What do you hate most about having your own business? The flexibility? The money? Not having to deal with stupid co-workers? Sigh. Forget our questions, we’re here to help.

Nine years is quite a stretch to have your own practice and from the sounds of it, you’ve been successful and you had a decent run in the corporate world prior to that. Regarding the tepid reaction from recruiters, we’re curious if you’ve pressed them for reasons for the lack of interviews. These people are working for you, don’t forget, and any failure on their part doesn’t reflect very well on their abilities. Get some straight answers out them.

Now, then. The perception that the F&A industry has of sole practitioners is, well…they don’t pay much mind. We’re guessing you’re preparing plenty of tax returns, maybe a few small audits and providing financial advice to your clients. Anyone looking for a CFO wants someone that can lead and run the finance and accounting departments. Despite the twelve years of experience you have in the corporate world, your most recent experience has been working for yourself and serving clients. Not much management experience (from an f&a function or employee perspective) there. It’s not that you’re “unable to perform” but your track record doesn’t really demonstrate that you’ve been working towards that goal. Furthermore, small company CFOs these days are taking on more responsibilities including IT and HR decisions. Chances are most companies will hold out for someone with the total package. Or at least a package more complete than yours. We’re not trying to discourage you but we do see a disconnect between your experience and the position you desire.

That said, there is no shortage of small companies that need CFOs and controllers. Be sure you’re using an executive recruiting firm to assist you in your search and ask them honestly if your background is problematic.

One other thing to consider: maybe shop around to the CPA firms in your area that wouldn’t mind having your book of business. Perhaps they’d be interested in admitting you as a partner in their firm. It’s not exactly in line with your goals but it could pave the way if your CFO search runs into a dead end. Good luck.

Which Big 4 Firm’s New Hires Aren’t Receiving Performance Ratings?

There are clues:

We hope you are settling into your new role and that things are going well!

The purpose of this email is to make you aware of some important information regarding the year end performance management process that applies to all new campus hires and all newly hired associates/administrative assistants for this year.

The firm recognizes that as a recent new hire, your primary focus is to transition into your role and responsibilities and build your network. It is important that you have the appropriate amount of time to learn about the firm and integrate fully before you are formally evaluated on your performance. Therefore, for this performance year, which ends June 30, 2011, you will not be assigned a performance rating.

Even though you will not receive a rating, you will participate fully in all other aspects of the performance process, such as getting feedback from individuals you work with and meeting with your counselor to discuss your feedback, progress, development and goals for the 2012 fiscal year. We are confident that even without a performance rating for this year, you can fully understand how you are doing by asking the right questions and having meaningful conversations with those you work with.

In the meantime, please make sure you are getting periodic feedback and staying in touch with your counselor. As the year end process approaches you can access helpful tools that will help you prepare for a variety of coaching conversations

Further, you can learn more about the Performance Management and Development process by clicking here.

If you would like to discuss this further please contact your counselor or your People Consultant. Thank you for your participation in this important process.

Take a stab in the comments and feel free to speculate as to the motivation and repercussions behind “all (wo)men are rated equal.”

The Tax Policy Debate Just a Got a Tad Less Sophisticated

Tax policy is one of the most complex issues in the political discourse, regardless of the simplicity behind the rhetoric used by our public officials. And thanks to this “straight talk,” it has become one of the most polarizing topics in politics. But now that a man has been arrested for trying to engage Congressman Jim McDermott (D-WA) in debate (after drinking of course) on the issue using colorful language (or you might call it “expletive-laced threats”), the discussion has hit a new intellectual low.


Here’s the voicemail Charles Turner Habermann of Palm Springs, CA left for Congressman McDermott, From the National Law Journal by way of Above the Law:

“Uh, I, I, I’d like to remind you McDermott that if you read the constitution all the money belongs to the people. None of it belongs to Government Okay! So, if Jim McDermott says they’re spending money on a tax cut, he’s a piece of human dog shit, okay. He’s a piece of human filth. He’s a liar, he’s a communist, he’s a piece of fucking garbage. Thomas Jefferson, James Madison, or George Washington, Alexander Hamilton, if any of them had ever met uh, uh Jim McDermott, they would blow his brains out. They’d shoot him, in the head. They’d kill him because he’s a piece of, of, of disgusting garbage.”He later says: “And you let that fucking scum bag know, that if he ever fucks around with my money, ever the fuck again, I’ll fucking kill him, okay. I’ll round them up, I’ll kill them, I’ll kill his friends, I’ll kill his family, I will kill everybody he fucking knows.”

In the second message, he says, “Your congressman, Jim McDermott is a piece of garbage. And I’ll tell you something right now, garbage belongs in the trash that’s exactly where he’s gonna end up.”

Then there’s this:

“As for his motivation for leaving the voicemail message, Habermann said he was calling politicians to let them know that what they were doing and saying regarding spending taxpayer’s money was wrong,” the complaint says. “He said he was trying to scare them before they spent money that didn’t belong to them.”

He also said he never intended to hurt anyone and that he was too afraid of losing his $3 million trust fund to commit a crime.

Yep, this guy’s a tax policy wonk, all right.

Arrest in California in death threats against congressman [National Law Journal via ATL]

KPMG Manager Irritated with ‘Other 3’ Calling the Kettle Black RE: Recruiting Methods

This week we’ve shared a couple of examples with you that demonstrate how KPMG is attempting to land some talent from its rival Big 4 firms. The strategy ranges from the Google-ish to the good old fashioned cold call email. After yesterday’s post mentioning the latter method, a Radio Station manager felt compelled to point something out:

I am a KPMG manager and I don’t want everyone thinking that it is only KPMG that is on an easter egg hunt to try land experiived the following linked in messages over the holidays:

PwC M&A Advisory Manager opportunity in Mclean, VA

Zahara Kanji Sourcing Manager at PricewaterhouseCoopers

Hi [KPMG manager],

I hope this note finds you well. By way of introduction, I am the recruiting manager for PricewaterhouseCoopers’ Transaction Services Advisory practice. We are strategically growing at various levels across the country. I am interested in your professional background, which seems to align well with our Transaction Services Financial Due Diligence practice. Please reply to this email if you would like to learn more about our business. I look forward to hearing from you soon.

Best
Zahara

and

Position with Ernst & Young LLP Audit Practice

Renee Scott (Creese) National Diversity Recruiting Manager

[KPMG manager],

My name Renee Scott, Assistant Director of Recruitment with Ernst and Young’s Assurance practice. We are expanding our searches for experienced Seniors and Managers with assurance background and CPA designation.

Sasha Le with HR Consulting Partners, my sourcing assistant, through networking, has identified you as someone we would definitely consider speaking further about these great career opportunities. I’ve opted to make my initial contact with you via LinkedIn, a professional networking venue, so if you are or know of someone who is interested, please contact me at 410-263-3702 or via email at renee.scott@ey.com OR you can contact Sasha Le via email at sashale@earthlink.net or via (626) 839-7174. We look forward to hearing from you soon.

Regards,
Renee Scott
Ernst & Young LLP

A couple takeaways now that we’ve sufficiently beaten the competitive recruiting drum: 1) This time of year, there’s a big push to bring on new people because, well, there’s a perpetual shortage of people in some practice areas; 2) if you’re unsatisfied with your current firm, qwitcherbitchin and call one of these recruiters. They’d love to talk to you.

As for our tipster’s motivation:

I just begin to get irritated when staff from the other 3 point fingers at KPMG for being the bad guy. They seem to forget that an audit is an audit and unless PWC has discovered a new shmebit [sic?] to account for that the rest of the Big 4 don’t know about then I am pretty sure they audit the balance sheet and income statement the same way the rest of us do.

Now, then. Some clever commenter on the last post wondered “Whis [SIC] is this big news? Recruiters have been doing this in public accounting for many years.” We admit, this isn’t Andrew Cuomo slapping E&Y and E&Y slapping back but we seriously doubt it’s known just how competitive it is. Plus, the firm’s downplay the whole thing. Look no further than the interview KPMG’s Vice Chair of HR gave to FINS last spring:

[Kyle Stock]: I often read about poaching amongst the Big Four. Has that activity increased or decreased recently?
[Bruce Pfau]: Like any business, there are going to be fluctuations and vicissitudes in the industry in general and there’s a certain amount of movement between the firms. There’s no warfare going on between the firms or any vendettas or anything like that. In general, we find at least when people leave us, by and large, they’re not leaving to go to a competitor. And I think the same is true of our competitors. It’s usually because they see opportunities in either a corporate situation or another consulting environment of some kind.

So, Mr Pfau says it’s NBD but the reality is that the talent at the firms is very similar and when the shortage of people in a particular practice area becomes severe, the leaders in those groups put pressure on the recruiters to find good people to fill the holes. It’s reflective of the culture inside the firms and is part of the underbelly of what is going on behind the scenes. And in case you’re new to the site, that’s what we do here.

Accounting News Roundup: PwC In Pari Delicto Case Dismissed in Delaware; How to Bomb an Interview; Profs Living on Campus | 01.07.11

Facebook Sets Stage for IPO Next Year [WSJ]
Facebook Inc., one of the world’s hottest technology companies, gave the clearest sign yet that it is preparing to take itself public sometime next year, as it revealed new details in a 100-page document sent to a select group of potential investors. Facebook, of Palo Alto, Calif., said it plans to increase its number of shareholders above 500 this year, according to the private-placement document, forcing the social-networking company to begin disclosing reams of financial information or go public by April 2012.

U.S. Adds 103,000 Jobs in December, Unemployment at 9.4%Bloomberg]
Employers added fewer jobs than forecast in December and the unemployment rate dropped to 9.4 percent, a sign a labor-market recovery will take time to develop. Payrolls increased 103,000, compared with the median forecast of 150,000 in a Bloomberg News survey, Labor Department figures showed today in Washington. Employment the previous two months increased more than previously estimated. The jobless rate fell to the lowest level since May 2009, reflecting gains in jobs and fewer people in the labor force.

PwC Prevails In Decision On AIG “In Pari Delicto” Case [Re:The Auditors]
Delaware follows New York’s lead.

New top tax man [FT]
Andrew Hodge takes over for David Sproul as partner in charge of tax in the UK. Sproul was announced mid-last year as the new CEO of the UK firm, and Hodge is definitely aware of the timing telling the FT, “He gets six months [to prepare] and I got six days over Christmas.” Reportedly, Hodge was joking but seriously, how could you not be annoyed.

Top Ten Ways to Blow a Job Interview [FINS]
Since you don’t want the job in the first place.

Should Faculty Live With Their Students? [TaxProf Blog]
Tim Pearson, an associate professor of accounting and chair of that department, has been the resident faculty leader at West Virginia’s Brooke Tower for 11 years. He and his wife, Lori, (who serves as co-faculty leader with Pearson), along with their children and dog, live in a townhouse about 100 feet from Brooke in exchange for a lighter teaching load, reduced service commitments and a $15,000 stipend. Pearson, now 53, said he initially became intrigued by the idea of living on campus after he received tenure, and he and a colleague were lamenting the motivation of their students.


IRS Raises Alarm Over Complexity Of The Tax Code [Forbes]
TaxVox’s Howard Gleckman over at Forbes, “Each year for the past decade, Nina Olsen, the National Taxpayer Advocate at the Internal Revenue Service, has issued a report to Congress on the most serious problems facing taxpayers. She usually focuses on individual provisions of the code, such as the Alternative Minimum Tax, or vexing tax administration problems. This year, Nina reached a quite different conclusion: The most serious problem encountered by taxpayers is … the Tax Code. The whole damn thing.”

IRS takes interest in sex industry plus cabbies linked to it [LVRJ]
Pimps need to pay their fair share too.

Judge postpones Allen Stanford’s trial [Reuters]
A federal judge on Thursday postponed Allen Stanford’s criminal trial because the accused swindler needs to be weaned off an anti-anxiety drug prescribed for him in prison and undergo more tests to determine competency. The trial was originally due to start January 24, but Stanford’s lawyers argued their client could not adequately prepare because he suffers from depression and is addicted to a powerful anti-anxiety drug that has left him mentally foggy.

What Would You Ask the AICPA About the New CPA Exam?

Lucky me, I’ll be speaking with the AICPA about the successful launch of CBT-e as well as grilling them about the new format, their motivation behind the change, and all this nonsense about changing the passing score from 75.

Because you guys are the ones taking the exam and I’m just the one writing about it, I figured it would be appropriate to give you all the opportunity to weigh in on what I should ask. I swear I’m not being lazy as I have plenty of my own questions to ask but thought it might be nice for all of you with questions to have the chance to get them answered directly from the source.

You’re welcome to put your suggestions in the comments or, if you’re embarrassed because your question also makes you look like a big fat failure, please feel free to email me and I promise I’ll guard your identity like Caleb guards his yoga mat.

Deloitte Partner Encourages Brethren to Take Back Their Firm

As previously discussed, making partner at a Big 4 firm is no small feat. It takes years of work, some political savvy and luck. When you finally get a seat at the big table, you discover that everything leading up to that point was simply the beginning. Now that you’re calling the shots, you have big responsibility, be willing to resist temptation, and try to keep employees happy. Not an easy task but that’s why they get paid the big bucks, right?

But forget all that. Partners, as we know, are owners. They have an equity stake in their firm and have a say in how the firm should be run. Or do they have that say? One Deloitte partner, a twenty year veteran of the firm, reached out to us recently to express their concern about the upcoming election of new leadership at the Green Dot:

I’m an audit partner with Deloitte. Don’t want to bore you with the fact that I love the firm, and I am a die-hard D&Ter. But, all firms have their faults, right? Even Deloitte. While we tout and sell “Good Governance” strategies – our own governance process is severely BROKEN.

What many may not know is that Deloitte has an election year happening in 2011. Yes – Sharon Allen is off to retirement [Ed. note: PARTY! – Oh sorry, this is serious], and so is Jim Quigley. No tears for them…they have very rich retirement packages that will keep them wealthy for decades to come.

We’ve already been through our “Nominating Committee” process, where all the partners are able to be interviewed by committee members and submit nominations of individuals that they would like to see in different leadership roles. The elected individuals are the Chairman, the CEO, and a CEO “Alternate.” The CEO “Alternate” is there in the event that the CEO elect is also elected as the Global CEO (which will typically happen).

We’ll jump in here to make a quick point: our tipster reiterated to us that (s)he loves Deloitte and the motivation for reaching out to us is due to his/her commitment to the firm. (S)he even admitted that reaching out to GC seemed odd but clarified it to us this way, “It is akin to someone that loves their country and wants to improve upon it because we know we have the right to speak out and improve our country. Right now, our election process at Deloitte is broken.”

ANYWAY:

The thing that angers many partners – but few voice this concern – is that the Nominating Committee Process and the “election” of the Firm’s leadership is a farce. The “independent” Committee comes up with their recommended candidates after hearing the soundings of the partners. I should add that Committee is selected by the Board and Management. There is no “election” to approve the Committee. Then the Committee comes to a conclusion on ONE set of recommended candidates, and the Board approves that recommendation (shocking). Then, the partners get to vote “YES or NO” on the “slate” of candidates that is advanced. This “election” occurs in late February/early March. The leaders must be installed in June. So what if the partners said NO? What would the leadership team do then?? Guess what – they don’t care! Because they know the partners always say YES! It is so painful. And nobody is willing to challenge this process. Because – you have three camps of partners. (1) the camp that doesn’t care and never will because it “doesn’t affect my daily life; (2) the camp that is so rich in the number of units they have, they wouldn’t upset the apple cart because they make too much money to want to risk it even though they know it is wrong, and (3) the younger partners who fear retribution of having their “heads cut off” for speaking up.

Jumping in again – we spoke to a former Deloitte partner, who confirmed the broad details of the process and also the widely-held notion that the election process is a “farce.” This former partner also confirmed this is a feeling held by many partners, especially the freshly minted ones. In addition to the fear of retribution, he said that younger partners also feel apathetic, being of the mindset that the “nominating committee won’t listen to me” and they are being given “lip service” by leadership. Further, for many young partners, simply joining this exclusive club is exciting enough that few pay attention and, oh yeah, they have TONS of work to do. As for the “gray-haired partners,” our source confirmed their attitudes as well, saying that there would be little motivation to speak up when they are “riding out their careers” or have a lot vested with the firm already.

Getting back:

The thing is that these leaders represent our firm, manage our firm, and control our collective destinies. They also rig the elections. And they then tout, continuously, the importance of the “Sense of Partnership.” The truth is that Deloitte is not run like a partnership. Yes, the partners have capital at risk, we are owners of the “Firm.” But, we are not appropriately represented. We lack a true collective voice. We keep quiet for the “good of the Firm.” And, we are now going to embark on a new “BOLD LEADERSHIP” move that is being done to passify all the various interests of our firm (Consulting, Audit and Tax). The thing is – we don’t attempt to have our partners select the BEST leaders – but simply the leaders that a select few believe fit a set of criteria that are BEST for us ignorant partners. It’s a bit like the government telling us what is good for us.

It angers me. And, I wish that I could wake up every Deloitte partner and have them realize this. But – if I did this – I’d likely be fired. So, I’m sending this to you to see if you can help WAKE up our Partners!! They should VOTE NO to the nominating committees recommended leaders. We need to take back our firm, much like the American voters took back our country.

[Signed,]
An anonymous Deloitte partner who cares deeply about our Firm and our culture.

Our “anonymous Deloitte partner” speculated that 75% of partners share his/her feelings on this. What’s been the catalyst to all this frustration? Well, the former Deloitte partner we spoke to said that it’s a partly the nature of the governance process itself but it has been made worse by how leadership handled layoffs and the economic crisis during 2008-2009. As you may remember, Deloitte leadership admitted that the May ’09 layoffs were handled poorly last spring, however, morale amongst partners remains extremely low.

Just to add a few more things from the “anonymous Deloitte partner” – when we asked about the details of the nominating process, the response we received was that while it was a “cordial” and that the partners that serve on the committee feel as though they are doing “God’s work,” but ultimately it is a “falsehood.” The former Deloitte partner confirmed this, who told us he had a friend who served on the nominating committee who joked with him about flying around the country, “listening to crap,” throughout the exercise.

When we asked about the firm’s leadership considering a more democratic process (i.e. partners are nominated by vote), that doesn’t appear to be on the table because another firm does it that way, “In situations where our CEO has been asked about the process, Barry Salzberg stated that our firm doesn’t want a divisive culture where certain partners get their feelings hurt in a race for the CEO spot or other positions. ‘That’s not part of our culture. That is what PwC does, and we don’t want to do that.’ ”

Stepping back from all this (we realize it’s a lot), if we were a run-of-the-mill Deloitte partner, it be pretty difficult to see this as an equitable process. As we said at the outset, being a partner means having a say in how the business is run. Granted, when you’re talking about a firm as large as Deloitte, there has to be centralized leadership but wouldn’t you want a direct voice in determining who that leadership is and not simply up or down on a list of names handed to you? It sounds like a lot of partners at Deloitte are feeling shut out of this process. Maybe some don’t care but many new and aspiring partners probably do (Millennial attitude and all) and this lack of true representation will certainly make some think twice about their long-term careers with the firm.

Should an “Acting Senior Manager” Take a Job with Grant Thornton That Promises a Transfer?

Welcome to the Holly Jolly Hump Day edition of Accounting Career Emergencies. In today’s edition, an “acting” senior manager is being recruited for a gig with GT in a Mid-Atlantic office with the promise to transfer to another office after the upcoming tax seasons. Can he trust GT to make the deal happen?

Worried that your career (or bonus) is in jeopardy because your firm is in a bit of a jam? Not sure how to approach a potential dance partner? Caught in an awkward situation that involves hookers and cash but it’s really just one big misunderstanding? Email us at advice@goingconcern.com and we’ll do our best to right these wrongs (or at least make you feel better about them).

Back to the actor:

I have 8 years experience in tax compliance as an acting senior manager on a large client. A former co-worker is recruiting me for a [Mid-Atlantic] GT tax position as a senior since I have no CPA. They are willing to have me work in [Mid-Atlantic] until 09/11 and then allow me to transfer to another office after 9/11.

My interview will be next week and will be with [Mid-Atlantic] partner and the partner from the office I want to transfer to. My questions for the group are the following. Does anyone know what the staffing is like in the tax group in [Mid-Atlantic]? (i.e. all new staff or good experienced people) Does GT pay well? My current salary is $98,000. Can I trust them to honor their word about transfering me after 9/11?

-Acting Senior Manager

Dear ASM,

We have to say, this is a very odd situation you’ve got so we’ll do our best to help you out. For starters, why don’t you have a CPA license? We’re sure there’s an explanation but an 8 year vet of the business with no CPA strikes us as odd. Written exam too scary? You’ve got a JD and figured the CPA wasn’t necessary? Perpetual BEC failure? Whatevs. Secondly, we’re get the impression that you want this job mostly for the transfer, so we’ll skip the “climbing down the corporate ladder” lecture.

Now, then. We can’t speak to the staffing situation in the office you speak of but it would be shocking if all the staff at GT south of Philadelphia and north of Raleigh were completely incapable of doing their jobs (if we’re off base, please share). The pay at GT will be fine but your work experience is a big bargaining chip. Use it wisely and be ready to lay out why your extensive experience should result in more money for you.

As for taking the word of GT partners, it’s a pretty good sign that a partner from your desired office will be there for your interview. Also, what motivation would anyone have by going back on this deal? Would they really give you the job only to betray you less than a year later? This strikes us as unlikely. Staffing needs are always up in the air so for them to give you this opportunity seems us as a pretty exceptional deal. Regardless, we’d ask to get something in writing. Chances are this has already happened, as we assume some of these discussions occurred over email but something official would be ideal. If they balk, then you’ve got cause to question their sincerity. Good luck.

Oh, and get your CPA for crissakes.

Cuomo Checks Ernst & Young Off the Hit List

Or throws another scalp on the pile, whatever you prefer.

The Journal is obviously very cozy with the Governor-elect:

New York Attorney General Andrew Cuomo filed a lawsuit against Ernst & Young for civil fraud Tuesday, accusing one of the nation’s largest accounting firms of helping Lehman Brothers Holdings Inc. hide its financial weakness from investors for about seven years before the bank finally collapsed in September of 2008.

Ernst & Young knew about, supported and advised Lehman on its “Rs, a type of debt the bank took on, but labeled as sales, which made the firm appear to investors less risky than it really was, according to the complaint. The audit firm also stood by while Lehman misled analysts and investors on conference calls and in financial filings about its levels of risk, particularly after the firm’s stability began to crack after the credit crisis began in 2007, said the complaint.

“Ernst & Young substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive accounting fraud,” Mr. Cuomo wrote in his complaint.

Now that the AG has pulled the trigger on this, we’re wondering what’s next. E&Y still isn’t talking, other than the statement they’ve been giving since the bankruptcy examiner’s report came out in March. One comment suggested a settlement in the nine figure range which would put them in proximity of the DOJ’s fine of KPMG back in 2005.

Colin Barr over a Fortune reports that Cuomo wants at least the audit fees back ($150 million, according to the complaint):

The complaint, filed in state Supreme Court, seeks the repayment of at least $150 million in fees the audit firm collected between 2001, when Lehman’s aggressive accounting began, and 2008, when the venerable bank collapsed, precipitating a global bank run.

“Our lawsuit seeks to recover the fees collected by Ernst & Young while it was supposed to be using accountable, honest measures to protect the public,” said Attorney General Andrew Cuomo.

Something tells us that Cuomo won’t be satisfied by simply the audit fees; we’re talking about the largest bankruptcy in history, after all. If you feel like ballparking the fine, we wouldn’t turn away any outlandish guesses.

UPDATE: Felix Salmon also points out E&Y’s lack of communicado:

E&Y knew this was coming—we all did—but despite that fact, its only public reaction so far has been to refuse to comment. That doesn’t look good, and it forces us back to what the company said in the wake of the Valukas report—that its work as Lehman auditor “met all applicable professional standards,” whatever that’s supposed to mean.

He also agrees with us that the fine will be greater than the $150 million and notes (not hiding his disappointment) that no partners were named, “E&Y will avoid admitting blame and also avoid criminal prosecution. […] [T]he only defendant is Ernst & Young LLP; there are no named individuals on the list. So E&Y’s partners are probably safe too. Sadly.”

Unless, of course, the SEC or PCAOB opt to take up that disciplinary slack. Don’t forget that some people think that Cuomo is making this move because he wants the “last scalp” before leaving the AG’s office for the Governor’s mansion. We realize pinning hopes on the SEC and PCAOB isn’t exactly comforting for those wishing to see more action but maybe Cuomo’s actions are the motivation they needed.

We’ll keep you updated throughout the day and if there’s any internal word from the hallowed walls of 5 Times Square, do email us the details.

Some People Are Wondering When/If KPMG and Ernst & Young Will Ante Up

From the mailbag, courtesy of an E&Y senior associate:

I work for EY. Roommates are Deloitte and PWC. I’m hearing from the PWC employees that in addition to a holiday bonus, as well as a March compensation adjustment similar to Deloitte’s, PWC is also giving their employees the last two weeks of December off without requiring them to use their vacation days.

Thoughts on whether EY or KPMG will ante up? Hot topic at my client site today as you can imagine 🙂


Before we get to E&Y and KPMG, it should be noted that PwC is really playing hardball here. A quick recap:

Mid-year bonuses that include an option for an iPad. Steve Jobs hater or not – that’s a cool bonus.

• Rumors of poaching seniors in Chicago and New York.

• New Yorkers given the option to shovel Thanksgiving sustenance at a Manhattan location to be named later (btw, we really want to know where, so get in touch with details when known).

• iPhones are now available and Christmaskuh festivities return.

Now there are rumors of a merit increase in March and two free weeks of time off? This is quite the run of employer gratitude. We won’t say “unprecedented” but it is an impressive show of generosity.

Maybe PwC has gone on this offensive because they had a kick-ass first quarter. Or maybe it’s because they lost the number one spot to Deloitte and they still want everyone to know that they’re still capable of equating love with money. OR maybe they’re trying to make people forget about Logogate. Whatever the motivation, the firm is throwing money around with the gusto of Charlie Sheen and they are getting a relative amount of attention for it.

Now, then – Ernst & Young and KPMG. Maybe these two firms are spreading the wealth on the Double-DL but if not, TPTB have to be aware of the what the competition is up to. If not, maybe someone should clue them in. Regardless, there has to be heat to act in some way.

One explanation for the House of Klynveld is that the fiscal year just ended, so it is too early for leadership to communicate “the great first quarter,” thus rationalizing a mid-year bonus. If KPMG comes out to soon with the news, they risk the “Monkey see” effect.

As far as E&Y is concerned, we’re stumped. They have the same fiscal year as PwC and should have a pret-tay good idea how Q1 went. Now that PwC has made the first move, any action by E&Y is going to look reactionary .

So for the E&Y and KPMG crowd – you clearly have some expectations for something but are you hearing anything about mid-year bonuses or will the belly aching continue into the holidays? Discuss below and get in touch with details.

AICPA Announces International CPA Exam Locations

Have you, like many foreigners, been tripping about getting into the US to take the CPA exam, battling with strict post 9/11 Visa rules and other assorted red tape? Trip no more, the CPA exam is about to go international. This is huge because the exam is also about to get an international makeover (like IFRS testing in FAR and international audit standards in AUD) but that couldn’t at all be coincidentally related to this announcement from the AICPA:

The Uniform CPA Examination will be offered outside the 55 U.S. jurisdictions for the first time in its history in 2011. The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy and Prometric – the three organizations that jointly offer the CPA Examination in the United States – reached an agreement to administer the exam in international locations.

The CPA Examination next year will be offered in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates.

The international exam will be the same as the one offered in the U.S., using the same computerized format and administered in English. As in the U.S., the purpose of taking the examination will be to qualify for licensure as a CPA through U.S. state boards of accountancy.

Security has been one issue for the AICPA in deciding where to offer the CPA exam even though it will continue to administer the exam through Prometric. International testing will be subject to the same state board or jurisdiction rules that determine eligibility for CPA exam candidates since there is no Dubai Board of Accountancy. Just as now, potential international candidates will have to meet the requirements of whichever jurisdiction they choose to apply. Which I guess makes all the residency-requirement states out of the running to be a part of this epic new spin on the computerized CPA exam?

Some have mentioned on earlier bitch sessions about the AICPA that their motivation is a monetary one. Expanding membership, for example, brings in revenue. Increasing the passing CPA exam score (thereby causing more failures and, one would imagine, more subsequent $$$ retakes after) is another example though that’s just a rumor last I heard. So if one were inclined to postulate as to the motive behind this move and approach it skeptically, you might come to the conclusion that this could equal a pretty significant payday for the AICPA as well as NASBA, Prometric, ChoicePoint and all the CPA review courses who make a living off of this exam. I’m not against it.

I guess we will find out what significance the U.S. CPA exam still holds for the rest of the world. Even if we end up looking pretty bad when international candidates do way better on the AICPA’s new international exam content in 2011.

BREAKING: Democrats Suck at Accusing Republicans of Trying to Raise Taxes

So some Democrats thought it would be a cute to try and turn the tables on their Republican opponents by insinuating that by supporting the Fair Tax, the GOP was raising taxes on middle class Americans.

Love or hate the Fair Tax, anyone that takes more than 30 seconds to research the idea knows that if implemented, the Fair Tax would abolish the income tax.

In some recent ads, a few Democratic nominees left that part out entirely:

Research supplied by FairTax.org shows that Democrats in 16 districts have run at least 31 ads blasting Republicans for supporting the tax. But many of these ads neglect to mention the levy is essentially a national sales tax that would replace the current federal tax system.

FactCheck.org recently slammed the Democratic Congressional Campaign Committee (DCCC) for running ads that omitted this fact.

“Democrats are accusing Republicans of supporting a 23 percent sales tax on everything, which would be on top of all existing taxes… it’s misrepresenting by omission of the FairTax idea,” FactCheck.org director Brooks Jackson told The Hill.

The motivation behind this strategy could be due to a number of factors:

1) The Democrats who ran the ads feel that most Americans are gullible enough to believe anything they see on TV.

2) The Democrats who ran the ads don’t understand how the Fair Tax policy would work on its most basic level, thus meeting the intelligence level to serve in Congress.

3) Democrats simply suck at accusing Republicans for trying to raise taxes.

It wouldn’t be a surprise if the first two played a part but come on. Leave the “he/she wants to raise your taxes” to the experts you fools and stick with the lowbrow stuff.

Dem ads against GOP not accurate on crux of FairTax proposal [On The Money]

How Much Harder Is BEC Going To Be In 2011?

Following the awesomeness that was our “How Much Harder Is FAR Going To Be In 2011?” post, I figured it would be a good idea to go over each section to compare this year’s CPA exam with next year’s. Today you’re lucky to get a good BEC wrap up.


Written Communication – As stated last Friday, written communications are moving from FAR, AUD and REG to strictly BEC. This is good (and possibly easier) for most of you as writing can be a right-brained activity while the rest of the CPA exam mostly tests your left brain’s ability to process and digest information.

If I were taking the exam, I’d relish the opportunity to have three attempts at essays (since it might make up for my pathetic understanding of cash flows) but for many of you this is a weak area. That’s fine. In 2011 you’ll only have to try it once with three BEC-related WCs. You still do not have to get the answer correct but simply have to A) write like you have at least some sense of what a “business memo” contains B) not misspell any words (you get a spell-checker in 2011, no excuses) and C) stay on topic.

Easy. Currently you get two written communications in three different sections, while in 2011 you will get three written communications in one section.

No Simulations – Contrary to rumors I am still hearing for some unknown reason, BEC does not and will not contain simulations in 2011. It may not contain them for some time or the AICPA BoE could get creative and start testing them out in a few years, it’s hard to say but my understanding is that they are happy with written communication in BEC for now. Between you and me I imagine part of the motivation behind this is getting all of you off their backs about the fact that a multiple choice only exam section still takes the same amount of time to grade as more complicated sections like FAR, AUD and REG. But what do I know?

More Econ, Less IT – As for actual BEC content, IT will be more lightly tested while econ will carry more weight. Econ goes from 8-12% of questions to 16-20%. A new area, operations management, will make up 12 – 16% of questions you see. Business structure (partnerships etc) goes back to REG where it belongs and corporate governance takes its place with 16-20% of your questions coming from that area.

Narrowing Components – The new AICPA target weights have changed since last year. Before you were tested on five core components: communication, research, analysis, judgment and understanding. In 2011 (this is for all sections), you are tested on just three: knowledge and understanding, application of the body of knowledge and written communication. Knowledge and understanding make up the MCQ (80 – 90% of your score in 2011’s BEC exam) while written communication makes up the other 10 – 20%.

Will BEC be more focused than it has been since 2004? We wouldn’t put any money on that. It’s still the junk drawer of the CPA exam though it’s come quite a way since its debut with the computerized exam 6 years ago. As a person intimately acquainted with it, I feel it has a ways to go. But 2011 is an improvement and just like FAR probably easier for you guys in the long run.

BREAKING: At Least One PwC Employee Isn’t Sold on the Rebranding

It’s been just over a week since we broke the story on PwC’s rebranding. Now that everyone else has caught up to the story, we’ll share with you some fresh news on the makeover.

Since today marks the first day of u’re warming up to the new team colors. Then again, you may share the feelings of one P. Dubs employee that took the time to email Bob Moritz to chime in on the new look. Apparently (not really sure how these things happen) the email is making the rounds at PwC and it just so happened to find its way into our mail bag:

To be perfectly honest, I’m not a fan of the new branding. In your email you wrote “…we are altering what we believe is an outdated visual identity to better express the kind of vibrant and relationship-based firm we have evolved into.” I find it ironic that you referred to our former visual identity as outdated when our new brand looks like a throwback – a 70s color scheme meets an IT startup.

I completely agree with the comments on the website where the brand is repeatedly referred to as child-like and unprofessional. I feel like the explanation for the symbol is also very complex. The *connectedthinking brand was simple and easy to understand. With the new symbol, everything has a meaning, from the colors to the solid blocks to the transparent blocks. A symbol should be fairly self explanatory – this one requires too much explanation.

I love the fact that the company has been focusing more on changing behaviors and placing a greater emphasis on building relationships. However, I fail to see where a new brand would affect this. Colors and symbols don’t represent PwC, the staff does. In one of the online discussions it was pointed out that following a salary freeze one year and layoffs the following year, it almost seems foolish to spend so much money to “reinvent” ourselves. To quote a wise PwC employee, “A new brand isn’t going to win business, motivated people will.” I find it hard to believe that this new, colorful symbol will be the motivation that people need to help expand our business and improve relationships with clients. A better way to motivate the staff would be more incentives – bonuses, rewards, raises – positive reinforcement. Pavlov was definitely on to something with the concept. Interactive gallery stations complete with iPads to show off the brand? Activities revolving around the launch of this new brand? Is this really the best method of spending funds?

Also disturbing to me is the environmental impact this could have. I can’t imagine that this won’t set back the Firm-wide goal of reducing our carbon footprint. Letterhead, business cards, report covers, envelopes (to name a few paper products) all need to be reprinted. It seems like an incredible waste to discard everything we already have in favor of this new brand (we received an email letting us know that after October 4th we are not to use any of the old paper products). I hope we are at least planting a bunch of trees to help compensate Mother Nature for the amount of paper that will be wasted with this change.

It’s disappointing to feel like we have taken two steps forward and three steps back. I realize that it is what it is, but I felt that I should voice my opinion from down here on the totem pole.

It’s been suggested that October 4th will be the great PwC Shredding Day that will no doubt involve a convoy of Shred-it trucks out 300 Madison (and offices nationwide for that matter) along with employees dropping their old business cards into every fish bowl they can find.

So mark it on your calendars and definitely document the shredding in action or perhaps a bonfire (done safely and in full accordance with the law) and send us the pictures.

Extreme Big 4 Makeover: KPMG Edition

Yesterday we told you about Extreme Big 4 Makeover: PwC Edition. Today we’ve learned that KPMG is getting into the act, although the House of Klynveld had the sense to avoid changing their team colors to match the autumnal palette (Braddock says it reminds him of Pizza Hut).

But more on colors later. We feel that the motivation for the rebranding is likely twofold: 1) They got wind of PwC sexing themselves up and 2) They’re pissed about Dick Bové playing dumb and they’re trying to get the old girl’s attention.

Naturally, it makes the Masters Champ who, after coming of his video extravaganza on Phil Mickelson’s KPMG website, is appearing in this ad in Golf Magazine (or so we’re told, we don’t have a subscription):

Phil m Golf World


In addition to His Leftness being included in the campaign (reminiscent of T. Dubs with Accenture) apparently the firm took out an ad in today’s Financial Times that rocks their new slogan, Cutting Through Complexity™:

KPMGCuttingThroughComplexityprintadvertising


Last but not least, the firm rolled out this internal Brand Book that tells you everything you don’t want to know about the rebranding including the firm’s commitment to it’s favorite hue, ” To bring our brand to life we have a refreshed visual identity and tone of voice which reinforces the essence of our brand. It builds on our current brand equity and the strong ownership we have of the color blue, while placing greater emphasis on the warmth of our wider color palette.”

KPMGBrandBook

One of sources already weighed in saying, “I’m so excited about the opportunities that will be generated by these HUGE changes I don’t know how I will contain myself.” We invite you to share your own thoughts on blue, Phil or whatever you think about KPMG’s new do.

Duoyuan Printing Is All Kinds of Screwed Up After Firing Deloitte

By “all kinds of screwed up” we mean “screwed 17 ways to Sunday”. After firing Deloitte last week, two top DY executives (CEO Christopher Holbert and CFO William Suh) have bailed, DYP shares are in the tank (down 47% as of publication) and, oh, they’re going to need to find a new audit committee chairman as their last one, James Zhang, ran for the hills.

Before running, however, he sent this really nice note explaining his motivations:

To: The Board of Duo Yuan Printing(DY).

6th Sept, 2010.

Dear Mr. Chairman and the follow directors of the Board:

Subject: My resignation as Company Audit Committee (AC) Chairman and Independent Director with immediate effect.

It has been almost one year since DY listed in the NYSE. I have to say that working closely with the Chairman, CEO and CFO of the company has been a great pleasure for me.

From Roughly one month ago, I got the phone call from Frank Li, the Audit Partner of Deloitte (DT) to express concerns to the Audit Committee over several financial irregularities and management control weakness. After hearing the full story, I immediately called an AC meeting and upon receiving unanimous approval from the AC as a well as support from the Chairman, the AC immediately engaged Latham Watkins, the US Law Firm, to handle the independent investigation not only to report back to the AC, but also as a part of the audit process requested by DT to give an opinion to the 2010 DY company financials. As our Chairman put it in the board Meeting just now that maybe due to the cross culture differences between US style work and maybe because of the second tier management don’t fully understand the US listing requirements, the investigation has not progressed in the last month. This delay could potentially render the company not filing its annual financial statements on time to the SEC.

In the past week, the Management has suggested to change the auditors of the company from DT to Frazer Frost (FF) who was the company prior auditors. This proposal has just been resolved in the full board meeting and Full AC meeting with voting taking place of 4 against 3 in favor and 2 against 1 in favor.

As the AC chairman and independent Director of the company, I respect the company democratic decision process as stipulated by the company Memorandum and Articles of Association. However, as a qualified UK Chartered Accountant and a trained Professional, I have brought to the attention of the board the following potential risks related to the change of auditors. These risks can be summarized as follows:

1. FF has not yet signed engagement letter with the company which is a risk to the company.

2. Change of auditors during the investigation process could potentially lead to further investigation from the SEC.

3. To change from a Big4 audit firm to a non-Big4 could have very negative impact in the investment community in terms of corporate governance thus lead to potential share price drop and subsequent US class law suit.

4. Even the Company US counsel has indicated in the meeting against change of auditors at this particular time frame.

Keep it classy, JZ, and good luck wherever you end up after this disaster of a company.

Pressure from CEOs More Likely to Lead CFO Shenanigans Than Monetary Gain

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

A recent study, “Why Do CFOs Become Involved in Material Accounting Manipulations,” by researchers at the University of Pittsburgh and the University of Washington attempts to answer just this question. Their finding? Pressure from the companies’ CEOs, more than the possibility of financial gain, tends to drive the actions of crooked CFOs.

Of course, the researchers couldn’t actually divine the motivations that drove the CFOs who manipulated numbers. Instead, they reviewed a group of firms subject to SEC enforcement, analyzing the role of the CFOs, as well as the costs they incurred and any benefits they gained from their actions.

They found – not surprisingly – that the CFOs involved faced stiff penalties for their actions. More than half of the CFOs (54 percent) employed by the nearly 300 firms in the sample that were charged by the SEC for accounting manipulation were prohibited from serving as an officer, director or accountant with a public company in the future. About 48 percent of CFOs were fined as a result of their wrongdoing, with a median fine of $50,000. A small number – about 4 percent – also faced criminal charges. Clearly, monkeying with the numbers can be quite costly for CFOs.


On the other hand, the CFOs that engaged shady number crunching didn’t have significantly higher equity incentives than CFOs in the control sample. That means the CFOs involved in misstatements took on a lot of risk, yet couldn’t expect to come out much further ahead financially than their counterparts at law-abiding firms.

Conversely, the CEOs of firms in trouble exhibited both greater power and equity incentive than CEOs of control firms. For instance, these CEOs were more likely to be company founders and to serve as chair of their boards than the heads of the other firms. “This evidence is also consistent with the pressured CFO explanation; that material accounting manipulations are more likely in the presence of powerful CEOs,” the researchers write.

What’s more, CFO turnover jumped during the three years before the misstatements occurred. That suggests that at least some CFOs either left or lost their jobs because they refused to participate in the manipulation.

The SEC also seems to have taken note of the larger role that CEOs, rather than CFOs, typically played in the schemes. When the researchers examined 188 companies in which both the CFO and CEO were charged with manipulating numbers, they found that the SEC had charged 18 percent of CFOs with orchestrating the schemes. When it came to CEOs, however, 32 percent were charged – almost double the CFO number.

Moreover, when the SEC charged just the CFO with wrongdoing, 30 percent of them benefited financially. That’s a lot, but it’s significantly less than the 46 percent of CEOs who were charged and also gained financially.

Given these findings, are there changes that could reduce accounting shenanigans? To be sure, the research doesn’t mean that CFOs who cook the books can simply blame their actions on their bosses; clearly they could have acted differently, as difficult as doing so might have been. The findings do suggest, however, that one step to reducing the opportunity for wrongdoing would be to provide CFOs with greater independence from their CEOs. One way to accomplish this would be to expect greater participation from corporate boards or audit committees when it comes to hiring and evaluating their firms’ chief financial officers.

For Some Unknown Reason, The IRS Confiscated a Nearly Worthless Scarface Poster in Young Buck Raid

Earlier in the month you may recall the story of hip-hop artist Young Buck being on the wrong side of a IRS raid that involved some of those shiny shotguns.

At that time, we learned that the agents seized several items – recording equipment, jewelry, furniture, his platinum wall plaques – even Mr Buck’s PlayStation (he says it was his son’s but, come on).

Anyway, we now learn that agents also confiscated a $31k Breitling Bentley watch AND a Scarface movie poster with an approximate value of…$10.


We’re not too familiar with IRS protocols, so perhaps when someone’s house is raided, the standard operating procedure is to take literally everything. The furniture. The porno collection. Worthless movie posters that there are literally tens of thousands of copies of. It all goes.

Presumably, the agents could have sold the poster to a kid on the street for a few bucks so they could get coffee but it would still be only enough money for one or two coffees. Or maybe it was enough for one (one!) cover at the local strip joint for the post-raid celebration. Or maybe on of the guys/gals really, really, really wanted that poster. Who knows?

Motivation aside, it certainly serves as another fine example of IRS shrewdness when it comes to collection efforts.

$31,000 watch among items seized from Young Buck’s home [The Tennessean]

CPA Exam Memory Aids, Do You Need Them?

For some, lease accounting comes easy and you don’t need a catchy tune to help you remember title-transfer, bargain purchase and 75% of its useful life. But for most of us, retaining the information critical to getting through a multiple choice question every minute or minute and a half requires either divine intervention or a really excellent collection of memory aids. Since some of you may be atheists, let’s talk memory aids. Pay attention, especially those of you taking FAR who need help getting through such a huge mess of information.


Post its are your friend! Are you having trouble remembering present value tables or the three necessary components of an audit opinion? Not to worry, just grab a pack (or 20) of sticky notes and start writing down mnemonics or calculations and sticking them everywhere you might see them; your fridge, the bathroom mirror, your car’s rearview mirror (don’t forget to take it down before you drive), your desk, and especially on top of the PlayStation. Swap out your old notes for new ones every couple of days as you add new information and be sure to read them every time you pass the note. If you’re one of those folks who has this stuff down but just needs a little encouragement, you can also use this trick to get a much-needed boost of confidence by writing your name, CPA and slapping them all over the house. Talk about motivation!

You have a few minutes and some scratch paper at the exam, so use it! While the Powers That Be may discourage using the 10 minutes before you actually get into the exam as a brain dump, there is no reason you can’t use 2 or 3 of those minutes to scratch out everything you can on the scratch paper you are given at Prometric. Mnemonics, keywords, formulas, FASBs, whatever, just start writing everything down before you actually launch the exam. You can help yourself out by bringing your review book with you to the test center (but not inside!) and reviewing it one last time in the car before you go in. But be careful, if you use the whole 10 minutes and don’t get through the screens, you’ll blow the whole exam and have to reschedule! 5 minutes tops!

Flashcards are your friend! No, I’m not talking about overpriced CPA review materials that your firm is nice enough to pay for, I am talking about a good old pack of 3x5s that you mark up yourself. I once had a student who claimed his homemade flashcards were what helped him through FAR even though his handwriting was so atrocious that even he couldn’t read it. Just the very act of writing down key topics helped him remember those areas when crunch time came and he was struggling at the exam. Of course this works best if you can actually read your own handwriting but don’t let that keep you from using this important tool to help in your retention of key areas. You can use them to quiz your study buddy or simply make a stack of hard-to-remember topics for your own review. Again, slip these in the car the night before you head to Prometric and flip through quickly before you walk in to take your exam.

Here’s the deal, the CPA exam isn’t meant to be easy and you aren’t supposed to be an expert on dozens if not hundreds of topics. You need to know a little bit about a lot so with the help of some simple tricks to train your brain to work in exam mode, you’ll be breezing through exam parts like no one’s business. Good luck!

Let’s Discuss: Big 4 Merger Rumors

We have the luxury (and giddy pleasure) of receiving more crazy ass emails than the average Tom, Dick or Harriet (see: PwC Houston Partner). Some of the stories turn out to be true, some turn out to be rumors. That’s just the way things go.

One reoccurring rumor that continually keeps us guessing though is that of a mega-merger among a Big 4. Frankly, we take a agnostic approach to these rumors (that’s probably shocking for some of you) but they never fail to pique our curiosity. You can drop us a line with your wild-ass theory about tri-firm merger between KPMG, Moss Adams and Baker Tilly to form MGMT but we can probably debunk it with a couple of emails and phone calls. Plus, the firms will deny ’til they die on any of these rumors anyway.

EisnerAmper is a perfect example.


They played coy with rumors around their merger for about a week and didn’t roll out the BIG NEWS until Monday when they could issue their boilerplate press release on cue (the video was a nice touch, however).

Lots of accounting firms are looking to grow through combinations or purchases in this impotent economy (WeiserMazars, Marcum & UHY, hosts of regional combos) but are the Big 4? Our intuition says no but the rumor mill provides us with whispers of talks occurring between the largest firms.

It’s not completely unheard of for the largest firms, as is evidenced by McGladrey’s purchase of Caturno & Co. that C.E. Andrews was so excited about in his interview with the Minneapolis Star-Tribune’s. Also, Barry Salzberg told the Journal that Deloitte is actively looking (granted, it’s for the consulting practice) but these are small potatoes.

No, the stuff we hear about has a Big 4 firm going with a second tier firm to either leapfrog other Big 4 firms or to inch closer to them. The difference between PwC (#1 in global revenues) and KPMG (#4) is around $6 billion. Depending on how aggressive a firm wanted to be in its merging efforts, the gap could be close quickly or a new #1 could be crowned.

But forget about revenues and the auspiciousness of the being the biggest firm for a second. Can a Big 4 firm realistically merge in a second tier or top 10 firm successfully? Never mind the logistics of office location, files, people etc. What about culture? What about service methodologies? The mere thought of matching up those pieces is a mind job for the people that actually have to deal with them. The bigwigs at the top might play off the problems that such a transaction would create for those in the trenches. Make adjustments would take years.

But it’s been done! Coopers & Lybrand and Pricewaterhouse in ’98 being the most recent. KPMG and E&Y tried it in ’97 and failed so it’s unlikely that the idea of another huge merger doesn’t cross people’s minds every once in awhile.

So let’s talk this out. Are these rumors completely unfounded or are is it understood that there are talks ongoing? If they are rumors, where the hell do they come from and what’s the motivation to spread said rumor? People in the know are encouraged to bestow wisdom in the comments and get in touch with us. And if you’re a vet from a merger of any size, share your thoughts on the experience and how your firm handled it.

(UPDATE) CPA Status and Promotions: What Is Your Firm’s Policy?

With all the news on raises, promotions etc. etc., a reader got in touch, asking the following:

Can we start a thread to discuss when you need the CPA designation if you want to move up at various firms by practice (audit, tax, specialty groups, etc.) and what exceptions there are?


The idea jumped off of a recent comment on yesterday’s post discussing E&Y’s raises keeping pace with PwC:

From what I can derive, PwC was bleeding staff in the early part of the year to the best of my knowledge, requires more time to get promoted up the ranks (3 years to senior compared to 2 at all other firms) and the requirements are higher (must have passed the CPA exam). The higher raises, at least from PwC’s perspective, may be their way of staying competitive with the market because, without higher pay, PwC is not competitive. E&Y may also be attempting to compensate but I am not entirely sure what for.

So three years to earn a promotion to SA at PwC isn’t news to us and some – dare we say, many – may argue that should be the standard timeline for associates in the Big 4/second tier firms. You can debate that all you want but what about the CPA requirement? If PwC does in fact require their associates to have their license before making SA, that’s nothing if not a motivation to finish the CPA ASAP. At the same time, there are many SAs that don’t have their license that do excellent work but for whatever reason are still stalling on obtaining the CPA.

The reader continues by asking:

For instance, if you have an Enrolled Agent, can you still make manager if you’re in tax, etc. [?] I’m also curious about any place that will demote anyone of a certain level who hasn’t gotten their CPA in the last couple of years. KPMG has threatened it for managers in tax who are qualified to sit for the exam (U.S. accounting degree with enough hours), but I wonder if that’s more empty talk.

That’s the first we’ve heard of a demotion for not having a CPA but frankly, that seems appropriate. If the manager has an EA, then perhaps that’s a suitable exception, although the idea of a Big 4 tax manager without a CPA just doesn’t seem right. For many, the lack of the those three precious letters means the end of their careers at the Big 4, so it’s definitely an issue.

So indulge our reader and let us know your firm’s policy regarding promotions and CPA license status. Does it matter? Are there exceptions? Should your performance make up for your uncanny ability to fail FAR? Talk it out.

UPDATE: We obtained a copy of the KPMG policy mentioned above and it appears to be FSF with a few exceptions for those that are “CPA Eligible” and certain “waivers.” Also there’s this, “In circumstances of noncompliance without appropriate waiver, professionals may be subject to disciplinary action, including but not limited to demotion or termination from the firm.”

KPMG Tax Promotion Policy

Compensation Watch ’10: The Teasing Continues as News from Deloitte Inches Closer

By now everyone is borderline freaking out due to Deloitte partners’ ability to remain coy throughout this process, using words like “substantial” and “better than last year” which, considering the love shown last year, is ironically accurate.

Annnnnnddd it continues. A source dropped us part of an email from Nick Tommasino, Deloitte’s Chairman and CEO of audit and enterprise risk services:

Understand your compensation package
• Deloitte provides a comprehensive Total Rewards package, which is designed to:
· Attract, retain, motivate, recognize, & reward high-performing talent
· Demonstrate the value of individual contributions as it relates to business performance
• When your individual compensation discussions occur in mid-Aug, keep in mind these main financial components of the Total Rewards package:
· Base salary
· AIP*, aimed at eligible high-performing seniors, managers, & senior managers (Reminder: AIP payouts will be subject to taxation & 401k deductions)
· Rewards & Recognition program, which includes Applause Awards, Outstanding Performance Awards, Promotion Awards, & Service Anniversary Awards
• Key compensation dates include:
· Mid-Aug: Compensation discussions begin
· Sun, Aug 22: New salaries effective
· Thu, Sep 2: Updated compensation statements available on DeloitteNet
· Fri, Sep 3: New base salary & AIP award amounts reflected in pay statements available on DeloitteNet

The motivation behind such a message is subject to interpretation. Some may think this is a friendly reminder (one of several, no doubt) of the upcoming discussions OR it’s a friendly reminder that doubles as a reality check that this isn’t 2005-2006.

Meanwhile, in the consulting part of the house, one commenter is claiming that news is going to be extra good, courtesy of some Punit Renjen prognostication:

Punit said “Compensation will be highest in history” via video for Consulting…

So who knows! The good news is that you will know soon enough but numbers remain a mystery. Unless someone finally coughed up a range. In that case, we strongly encourage that you share.

Job of the Day: BlackRock Needs a SAS 70 Associate

BlackRock is looking for an experienced professional to fill an associate role concentrating in coordination and oversight of SAS 70 reports.

The position requires 3-8 years experience and a CPA license or CPA in progress is preferred.


Company: BlackRock

Title: Associate – SAS 70

Location: New York

Description: BlackRock has professionals dedicated to the production and delivery of internal control reports (Service Organization Reports or SAS 70 Reports) to clients. These individuals actively work with the business, including groups such as client relationship group, portfolio management, business operations, legal, compliance and technology, as well as the external service auditor. In this SAS 70 coordination and oversight role, the group is able to provide an organized and effective approach to documenting and testing controls with the business and service auditors. On a regular basis, this group provides status updates and discusses SAS 70 related hot topics with senior management within the firm. This group also works very closely with other control disciplines, such as the Sarbanes Oxley team, Internal Audit, Technology Risk Management and Operational Risk. A successful candidate in this role will develop strong relationships across BlackRock, while developing a broad understanding of the products and services offered by the Firm.

Responsibilities: Assist in the coordination and delivery of multiple SAS 70 Reports globally; Work with the business and external service auditor to enhance report content, update report details and provide relevant testing documentation to the service auditor; Support the implementation of a coordinated SAS 70 approach by participating in walkthroughs with key business resources, recommending potential control enhancements and conducting follow-up in preparation for the annual SAS 70 reviews; Assist in the day-to-day follow-up with service auditors during their fieldwork to ensure projected timelines and budget stay on-track; Assist in the distribution of SAS 70 reports based on requests from clients and prospective clients; Demonstrate knowledge of professional standards/practices and apply knowledge in performing work; Effectively communicate both internally and externally to build positive relationships and understand key aspects of services provided to clients.

Qualifications/Skills: Bachelors degree in Accounting or Finance; CPA or CPA in progress preferred; 3 – 8 years of prior work experience; Strong project management, organizational and interpersonal skills; Possess a strong internal drive and motivation for continuous improvement; Possess a high degree of integrity and confidentiality, as well as ability to adhere to both company policies and best practices; Ability to manage multiple priorities successfully within a deadline-driven environment

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

So You’re a CPA Thinking About Law School

We try to encourage you to think about your careers here at GC every once in awhile; present you with some options or ideas that maybe you haven’t considered before. We’ve covered several credentials out there that you can obtain and we’ve also touched on the pros and cons of the PhD.

But this time we’re going to get really crazy and give you the lowdown on an idea that we know many of you have had (including your humble editor) and that is the consideration of going to – gasp – law school.

For whatever insane reason, you can’t shake the idea of committing three years of your life and borrowing tens of thousands of dollars to live on PB&J, ramen noodles and frozen pizzas. Oh and of course there’s studying, tests and everything else that comes with returning to school.

But think about the benefits; you’ve got the CPA and if you were to get the JD, maybe you’ll top it off with an LLM and it’ll be smartest thing you’ve ever done. Think about the money! The prestige! The hot lawyers that you will bed and wed! It will all be worth it, right?


Well, maybe? If you spend even a little bit of time reading our sister site Above the Law, you might get the impression that the last thing you should ever do is go to law school. There’s an ncertain job market out there. You may end up with a huge debt load that can take a lifetime to pay back. And we’ve been told by a fair amount of our lawyers simply, “It’s just not worth it.”

Considering all that, we wanted to get some first-hand perspective, so we put the feelers out to a few CPAs turned lawyers to get an idea of their experience so those of you considering law school can make a more informed decision.

We spoke to three CPAs turned attorneys, Eric Gullotta who has his own practice in Sonoma, CA, Steve Farrar of Smith Moore Leatherwood in Greenville, SC and Timothy Gagnon who has in own practice in Needham, MA.

Messrs Gullotta and Gagnon both specialize in estate planning and taxation while Mr Farrar is a litigator who defends lawyers and accountants in malpractice lawsuits.

The three men agreed that their decision to go back to law school was worth it but that the process is certainly a challenge, “It was a tough three years. Probably the hardest thing is getting re-oriented with being a student after being out for awhile,” Mr Gagnon said.

Motivation and Benefits
Gullotta and Gagnon both believe that the biggest benefit that they’ve enjoyed by obtaining the law degree is that clients recognize the value that a background of a CPA can add to providing legal services. “The amount of respect and trust that clients put in you when you are both a lawyer and a CPA is really unbelievable,” Mr Gullotta told GC. “Being able to see the tax effects of legal transactions is really amazing and you can really bring value to your clients when you are able to negotiate or structure deals with tax effects in mind.”

Steve Farrar had a very different thought process before he returned to school. He went back because he was interested in being a trial lawyer, “I went back to law school with the intent to try cases,” he told us. While he was interviewing, most firms wanted him to consider working in a more transactional capacity but he found a firm that was willing to let him work in litigation and it turned out to be a perfect fit, “I’ve been ecstatic. While you might hear stories about people being burned out, I enjoy every minute of it.” And the biggest benefit for him? “This is going to sound hokie when I say it but I enjoy the theatrical chess match of going to trial.”

Back to School
But before getting to all the benefits of CPA/lawyer superstardom, there is the little matter of going to law school. While many lawyers we’ve talked to have said that the law school you attend is everything, it really depends on what you’re looking to accomplish with the degree. As Eric Gullotta told us, “it’s important to know what you what to do. If you want to work in [a large city], you’ll have to go to a reputable law school. If you want to practice locally, hang the shingle out, then you can go to slightly less prestigious school that is more practical for your situation.”

And being a CPA could possibly put you at an advantage when applying to law schools, “The interesting thing is that because you have experience and have a CPA, it can help you get into some of the better law schools,” Tim Gagnon said. “They’re looking to diversify their class, age, experience and you could bring something that diversifies the class that they can’t get out of somebody that just got out of undergrad.”

Drawbacks
But there’s got to be drawbacks right? Besides all the lawyer jokes, Steve Farrar mentioned losing flexibility in his schedule, “The best way I can explain it is that I have multiple busy seasons but I never know when they’re coming.” For Tim Gagnon, it sheer volume of continuing to keep up-to-date on the changing rules, “It’s hard enough to keep up on one but you put the two together and you really have a lot of information to cover.”

Oh, and then there’s the practical (and possibly more important) stuff, “Higher malpractice insurance,” according to Eric Gullotta.

So, are your aspirations for law school a good idea? Hard to say. Knowing what you want to do with the degree seems to be the key to making a decision. If you are thinking that a law degree will be the solution to your self-perceived lackluster career to date, you could find yourself very disappointed.

However, if this is a career that you truly want then it sounds like there isn’t any shortage of success stories. Choose wisely.

You’re Going to Grad School: Do You Sit for the CPA Exam or Wait?

For many of you it is graduation season and that means planning to start at a firm in the fall or going back to school. But do you really need grad school?

Here’s our question from a reader planning on eventually taking the CPA exam but unsure as to when:

I just finished my undergraduate degree in the summer and therefore did not meet any of the application deadlines for grad school this Fall. I plan on going to grad school in the Spring, but in the meantime, I wanted to register to sit for the CPA exam. Is this a dumb thing to do? Most of my friends are going to grad school and studying for the CPA exam simultaneously. I don’t want to wait to the Spring to start taking the CPA though–but perhaps it will be more beneficial to me to wait. I need all the help I can get to pass. On the other hand, I’ve heard that you don’t necessarily need everything you learn in grad school to do well on the CPA exam, and all that extra information that they feed you can actually confuse you. I would love to hear your input on this.

Let’s be honest here, there are two distinct universes: 1) the CPA exam universe and 2) the actual universe.

Scenarios presented on the CPA exam are often contrived in the way that only made-up content can be and very often fail to match real-world experiences that you will encounter in your exciting career as a CPA. That also means that college may have poorly prepared you for the CPA exam universe, whether undergrad or graduate level. The CPA exam changes twice a year but it’s pretty likely that your college professors used the same books several years in a row. Of course accounting is still accounting but you are right to assume that grad school may not adequately prepare you for the CPA exam. Why do you think review courses make so much money?

Our advice is ALWAYS the same when it comes to loading up your plate with other things while trying to tackle the CPA exam: less is more. If you can trim out part of your social life, take time off of work, and avoid any additional educational or professional responsibilities while studying, you’re in a much better place to focus on the exam. Ask any of your friends who are trying to do grad school and the CPA exam at the same time in a few months how things are working out and I guarantee you they’ll tell you it’s not the cake walk they thought it would be. If you can save yourself the headache, do it, you can always go back to school later.

Grad school may make you more hireable and teach you a few tips and tricks for your career but as far as the exam goes, if that’s your only motivation for getting more education, you’d be better off just picking up some extra units to meet the 150 hour rule and focusing your efforts with a good review program. Again, college texts are usually outdated and don’t cover the same topics as the CPA exam.

It is our humble advice that you apply for the CPA exam immediately and make it your goal to complete all exam parts before you start school in the Spring since you will have the time to focus on the task at hand. Good luck!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Cautionary Tales: Enterprise Software Edition

A few weeks ago, I was talking about CRM (Customer Relationship Management) software. Essentially, CRM should help a company (as Dennis Howlett – business software blogger put it), “sell more stuff.”

I don’t have a problem with that result. We can argue all day long abo really “needed” as opposed to “pushed”. That’s a philosophical debate, indeed, it’s a MORALISTIC debate. In Obama’s address to the USA (re: BP oil sands) he prayed for a “hand to guide us.” Was he talking about the hand of god, or the invisible hand? … But I digress.

My point about CRM was much less lofty. CRM systems are simply about attempting to know your customer. How much data can we collate and analyze in order to maximize our value proposition? Or, if you’re a cynic – how can we, as Homer Simpson would say, “cram one more salty treat into America’s already bloated snack hole?”


Sidenote: Back in the heyday of the SUV craze, there was a great interview on 60 Minutes with some analyst/pundit who described the motivation that seemed to underlie the populating of these beasts. He described it as “reptilian.” The term stuck with me and I find it helpful to think about in around any purchasing decision of consequence. A well executed CRM can create a veritable “Jurassic Park” of suckers if that is what one is so inclined to create. Although, it doesn’t have to be that way. It doesn’t have to be evil.

My point this week though is less about CRM per se and more about what happens when an enterprise software implementation goes awry. A different kind of evil. There have been two big stories recently detailing lawsuits being leveled against firms who had been contracted to install an enterprise system and had allegedly failed to deliver on the contract.

In one case, EDS (now owned by Hewlett Packard) just agreed to pay British Sky Broadcasting $460 million for a failed CRM implementation. This was from a project undertaken in the year 2000 and abandoned two years later. The settlement is four times the value of the budgeted project cost.

In a second case, Marin County, CA is suing Deloitte Consulting for an alleged failure in rolling out an ERP (Enterprise Resource Planning) system. Marin County is seeking $30 million. Their contention is that Deloitte didn’t have the technical skills on the software in question. That’s an important point. This type of technical skill is of the “use it or lose it” variety.

So, is that the answer? When a software implementation goes awry, you sue everyone? Well, sometimes.

You see, buying an enterprise software system isn’t like buying a vehicle. You can’t just hand the wheel over to your reptilian brain and pray for the invisible hand to hook up financing and you’re on your way.

There’s work involved, normally a third party, that is paid to configure the software and integrate it into your organization’s existing infrastructure. In a complex business model, the process of defining and integrating all the business rules, data flows, and connections can be daunting… sometimes, impossible. Failure, unfortunately, is always an option.

These recent examples deal with alleged failures on the part of the third party implementers, but failures can occur anywhere within “hell’s half-acre.”

I’ve seen examples where it was clearly a management failure to provide project leadership that created an implementation failure. The example I am thinking about resulted in the company taking a $2 million dollar charge then having to start over. When I went to see them, it looked like they were heading right back down the same road. Making the same mistakes. Me? I can’t help someone who doesn’t want to be helped.

Some folks point to Saas products as a way to alleviate these nightmare scenarios. If only it was that easy. Wherever a business has an existing IT architecture, there is the possibility of an integration problem (assuming you want integrated systems which I have to believe that you’ll want). There is another company I can think of who, when I met them, had been working for at least 6 months on an integration with a Saas ERP system and their back office. For a number of reasons, it really just didn’t seem like it was going to work. And the red flag for me was that the CFO and the Director of Finance had vastly different views as to how the project was going.

These are just a couple examples I can name from my own experiences and I’m not even in the software implementation game!

The moral of the story is know the statement of work inside out. Understand the terms of the contract. Technical skills are finite. Be very clear on the desired outcomes.

And beware of the reptilian brain.

Geoff Devereux as been active in Vancouver’s technology start-up community for the past 5 years. Prior to getting lured into tech start-ups, Geoff worked in various fields including a 5 year stint in a tax accounting firm. You can see more of his posts for GC here.

People Are Still Getting Off on Scaring the Bajeezus Out of IRS Employees

[caption id="attachment_12661" align="alignright" width="260" caption="Does this get you hot?"][/caption]

In what amounts to either coordinated efforts by some lunatics or a giant coincidence, envelopes with white powder were sent to eight federal buildings including an IRS office in Bellevue, Washington yesterday. CNN reports that the building in Bellevue was evacuated after “an employee opened a letter and the white powder ‘poofed out.’ ”


Other envelopes were sent to FBI buildings in Seattle, Spokane, Salt Lake City, Pocatello and Coeur d’Alene, Idaho as well as U.S. Attorney’s offices in Boise and Coeur d’Alene.

While this latest IRS powder package incident seems to have caused no harm, one has to wonder what the motivation is behind such spineless actions. Does someone out there a major beef with the IRS and have a Hazmat fetish? Has that been diagnosed yet?

Billionaire’s Heirs May Beat the Estate Tax and They Have Congress to Thank

The New York Times has interesting story on Dan Duncan, a Houston billionaire who couldn’t beat death but his heirs may just beat the taxes thanks to Congress falling asleep at the wheel.

Duncan did all right for himself. He became the richest man in Houston and was ranked 74th on Forbes’ latest list by creating a natural gas empire that he started with a couple of trucks and $10k. Getting self-made crazy rich involves a little bit of luck so now it appears that he has passed on a little of that luck on to his heirs who may be inheriting his $9 billion fortune tax-free.

In case you estate tax mess continues to drag on, and on and on.


The Times story says that the Treasury collected $25 billion in estate taxes in 2008. With that kind of haul how could Congress let this happen? Joe Kristan passed along a little background to us from a Tax Analysts report 2001, some time ago that explains:

Although President Bush is scheduled to sign the tax bill into law next week, the bill contains a sunset provision that invites further debate in Congress during the next decade on whether many of the provisions will become permanent or take effect at all.

Just after H.R. 1836 becomes fully phased-in and estate taxes are repealed, the entire tax cut bill would expire as of December 31, 2010, under the bill’s sunset provision unless Congress enacts new law before that date.

The sunset provision opens up a new arena for debate among conservatives who are eager to make the provisions permanent and liberals who would prefer to postpone phasing in the provisions to pay for other government programs. Meanwhile, tax planners are left questioning the final outcome as they examine the new law.

As originally designed, the bill would have extended through 2011 and made the tax cuts permanent. However, that bill would have been subject to a budgetary procedure known as the “Byrd Rule,” which requires 60 votes in the Senate to alter revenue beyond a 10-year period. To avoid the procedure, Republican taxwriters adjusted the tax cut agreement for H.R. 1836 by allowing the provisions to sunset by December 31, 2010.

Democrats have argued that the sunset provision masks the true cost of the bill because the revenue loss accounts for only nine years of the budget window and less than one year of the bill’s full effect, including repeal of the estate tax. “Not only have they increased the back-loading to hide the true cost of this tax bill, but they have actually eliminated a year from the calendar,” said Senate taxwriter Kent Conrad, D-N.D., in a May 26 floor statement. “What they have done is graduated to a whole new level of accounting gimmickry to disguise the full cost of this tax bill.”

Joe’s emphasis. He then wrote to us, “Stupid? Well, it’s Congress, what do you expect?”

Blame who you want – George W. Bush for signing the expiration into law in 2001 or the Democratic controlled Congress for letting it expire – but at this point in time, regardless of your political persuasion, Duncan’s family and other wealthy families (some wealthier than others) are catching a huge break.

The Duncans didn’t talk to the Times for the story but it does state, “Many lawyers say Mr. Duncan’s heirs have the means and motivation to wage a fierce court battle to challenge the constitutionality of any retroactive tax.”

Good for them. If Congress tries to pull a fast one on them with a retroactive tax they should fight it tooth and nail. Despite the fiscal situation facing the country, Congressional incompetence and inaction shouldn’t get a mulligan.

GAO Audit Uncovers Fraud at Head Start Programs

The Head Start Program, under the Department of Health and Human Services, provides child development services to mostly low-income families and their children. Up to 10% of Head Start-enrolled families can be over-income, with an income 130% above the poverty line.

Of course, things don’t always work out as they are supposed to and the GAO has discovered problems with about half of the centers it examined through the investigation, just a small sample of the 1,600 nonprofit centers running 3,000 Head Start programs.


From the GAO:

GAO received allegations of fraud and abuse involving two Head Start nonprofit grantees in the Midwest and Texas. Allegations include manipulating recorded income to make over-income applicants appear under-income, encouraging families to report that they were homeless when they were not, enrolling more than 10 percent of over-income children, and counting children as enrolled in more than one center at a time. GAO confirmed that one grantee operated several centers with more than 10 percent over-income students, and the other grantee manipulated enrollment data to over-report the number of children enrolled. GAO is still investigating the other allegations reported. Realizing that these fraud schemes could be perpetrated at other Head Start programs, GAO attempted to register fictitious children as part of 15 undercover test scenarios at centers in six states and the District of Columbia. In 8 instances staff at these centers fraudulently misrepresented information, including disregarding part of the families’ income to register over-income children into under-income slots. The undercover tests revealed that 7 Head Start employees lied about applicants’ employment status or misrepresented their earnings.

GAO managing director for special investigations Gregory Kutz told a House education committee last month that “the system is vulnerable to fraud.” No kidding.

While unable to determine the motivation of Head Start employees to commit fraud by adjusting income levels on applications, Kutz theorized that management of nonprofit agencies receiving Head Start funds pressured staff to fudge, fiddle with, or straight up fake figures on applications in order to keep federal funds coming in.

Head Start has served over 25 million children since 1965 and there are currently over 1 million children enrolled in Head Start programs.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here.

Three Signs It Might Be Time to Quit Studying for the CPA Exam

Before you get upset at that headline, I don’t condone quitting the CPA exam process, especially if you’ve actually made some progress and passed some exams. But for some, quitting the exam is the only logical choice and it’s fair to present that argument for those of you truly struggling to get through.

Signs that you should keep going are obvious. If you are feeling unmotivated, bored, intimidated, anxious, panicky, upset, overwhelmed and/or a little depressed, you are just like every other CPA exam candidate out there. There isn’t a single person who gets through the entire experience without feeling some of those feelings, sometimes all at once. But in some very rare cases, struggling with the exam is a sign that perhaps you should be doing something else, and that’s what we’re talking about. So what are some other signs?


Severe depression Obviously if the entire exam process has you feeling dejected, depressed and hopeless, you may not be cut out for the stresses of public accounting and all that comes with the CPA designation. A little sadness or frustration is totally normal but if you find yourself staring at your CPA review flashcards wondering if the corners are sharp enough to slit your wrists, talk to a professional and consider a different line of work. Please. The exam is hard but it isn’t worth killing yourself over. No pun intended.

Complete lack of motivation Again, a little bit of procrastination or a motivation drought is normal if not totally expected. But if you absolutely cannot muster up the courage to crack open the first chapter of FAR for days on end, you’ll never make it. Either motivate yourself (we’ve given you plenty of tips on how to do this in previous CPA exam columns) or give up. I’m serious. If you don’t, you’re not getting through it.

Extreme agitation It’s OK if you’re high-strung, so is Caleb (that’s why he’s the perfect CPA). It’s OK if you are snapping at random passers-by with the nerve to bring their raunchy shrimp ramen lunch smell past your cube. But if you are yelling at everyone from the cat to the mailman for most of the day, the stress of the exam process has taken its toll on you. Remember, the exam is a sort of real world test run and it isn’t going to get any easier once you start your illustrious career in public accounting. Bail. Now. And relax, it’s really not that serious…

Let’s just say I know from professional experience most of these instances are few and far between. Very rarely in my career helping future CPAs pass the exam did I encounter someone who was doomed to 74s without any hope at all. Sure, there were people who failed. A lot. For some of them, they needed to fail in order to change their study habits, take the exam seriously, or really decide this was what they wanted to do.

Very often, I would encounter professionals in their late 40s or 50s who felt disappointed in themselves for abandoning the CPA exam 10, 15, or 20 years ago. So if you do happen to be really depressed, lazy, and/or pissed off and decide to quit, know that you’ll probably end up coming back at some point in your life wishing you’d just gotten it over with when you first had the chance.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Three Study Motivators for the CPA Exam During a Blackout Window

Blackout months are notorious for inviting procrastination, especially June. The weather is nice, the work is light, and if you’ve been studying for most of the year, the mid-point can be exactly where you lose what little motivation you had to study. Because you have an entire month “off”, it can be easy to fall into a rut of not studying.

So as we go into this month, let’s remember some ways to stay motivated, even when it’s tempting to run off and play in the sun:


Get a study buddy – Sometimes all you need is someone chewing you out encouraging you to keep going. If you’re doing this alone and know you’re slacking, maybe you need to recruit a friend to keep you in check.

Bribe yourself – Yes, bribing yourself is a pretty low tactic but whatever works, right? Promise yourself a splurge when you pass whatever section you are studying for or, if you’ve got a little extra cash to throw around, bribe yourself often with treats like $4 lattes and DVDs or whatever it is you’re into that won’t break the bank. This goes in reverse – if you aren’t studying and know it, punish yourself by taking away the movie tickets or nice dinners out.

Schedule your exam date close to the opening of the next window – This way you know you can’t blow off the entire month. Obviously this isn’t a good idea if you’re taking FAR and don’t plan on studying until June 1st but if you’re planning on taking a smaller section like BEC and have the time to put it, schedule your exam in the first or second week of the window so you know you can’t procrastinate. I guarantee you’ll only lose one exam fee because of not studying before you learn that particular lesson.

Good luck and if you’ve had luck breaking the procrastination habit, do share what worked for you!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Some Feedback for PwC

From a source at 300 Mad House:

“I just took the firm wide pulse survey and I laid into them. I told them to stop falsely advertising work life balance.”

Not being intimately familiar the work/life whathaveyous that comes by way of Bobby Mo emails but acutely aware of the motivation techniques employed, we can understand the frustration. Especially judging by some of your reactions to last week’s number. If you feel like sharing your feedback for the year that was at P. Dubs, let it rip.

Productivity Means Accepting The Fact Reinforcements Are NOT Coming

Are you feeling strapped for time? Have more work than hours in the day? Still waiting for that new person in the department???

I hate to be the one to break it you, but reinforcements are NOT coming.


You can find the evidence here, here, here, and here. The economy jumped off a skyscraper, hit the pavement, and now everyone’s trying to figure out whether or not this “recovery” (NBER says the US is still in recession) is real or is it a Dead Cat Bounce. Hiring for your little Cost Center will have to wait it out.

Of course the REAL evidence is probably already in your possession. Crack open the budget file; what’s the headcount look like for your department next year? The truth is right there in front of you in bits and bytes. If you’re doing the job of 2 people, chances are pretty good you’re going to continue to do so. You’ve become a 2-for-1 special!

The good news is that the unemployment picture has probably hit bottom. Those of you who remain employed probably don’t have to worry about losing your jobs anymore. After all, as the investor/pundit Kevin O’Leary likes to say, “a company can only fire 100% of their employees before they have to find a way to generate revenue.” Departments have terminated everyone they can terminate.

The bad news is that your job survived. It’s a classic case of the survivors envying the dead.

But I’d rather light a candle than curse your darkness.

There’s plenty of glib mantras I could be extolled at this point:
– do more with less
– work smarter, not harder
– corporate business process re-engineering consultancy services
– stop reading this slogan and get back to work, slacker!

The dirty little secret behind all of this kind of rah-rah, cheerleader stuff is that YOU are still the one left to actually DO all the work. Getting more productive is the only way to help you help yourself. You don’t need the BPO consultant to pull a Beetlejuice on you (“move in with you guys for a while, become real pals”) to figure that out! You need to look at every activity you do and ask:

1. Why am I doing this?

And if the answer doesn’t smell like a dead cat,

2. How am I doing this?

And finally,

3. What’s the alternative?

And for the love of Pete, watch for the technology trap! The technology trap is the assumption that, just because you are using technology to complete a task, it automatically means it’s the best way to get it done. Technology is like a dog. Do you walk the dog or does the dog walk you?

I’ve worked in accounting departments for years. There’s been times when I felt more like a dishwasher than a business professional and I was booking crazy overtime with zero comp! Over the years, little routines became big, dogmatic, time sinks and my hands were permanently puckered. I can only imagine what that sink would like on a skeleton crew.

The upside is that you have a bit of leverage suddenly. Since you’re the only one left, you’ve become that much more difficult to replace. Hiring sucks and it takes a long time. No one wants to deal with another recruiter, no one! You have a chance to redefine how you get your work done so take advantage. Wouldn’t it be great to use leverage for good for a change?

Four Ways to Force Yourself to Study for the CPA Exam

I’ll save you the hoo-rah, I’m pretty sure you don’t need it. It’s March already; if you aren’t studying, you’re working, and if you’re doing both right now I worry about your decision-making capabilities. Oh well.

Masochistic or not, it isn’t always easy to get yourself motivated to study.

You have entire CPA exam strategies laid out on the CPAnet forums here, here, and look, you even have a hoo-rah. Not everyone is an Elijah Watt-Sells so get that out of your head and worry about what works for you.


That strategy – finding a perfect fit for your own needs as a CPA exam candidate – also goes for motivation.

So how do you force yourself to study? Here are a few ideas:

Bribe yourself – Sock away $xxx for a new toy and reward a passing score with whatever your bribe is. If you’re cheap/laid off/sinking $1000s into failed exam fees and broke, it could be a decent dinner or a movie. Define splurge for yourself and make that the carrot you dangle in front of your face to get you to study.

Commiserate – You can find plenty of miserable accountants taking (and not always succeeding at) the CPA exam. You can also find support and encouragement if you’re actually trying to pass, so use resources like CPAnet and Twitter to find other candidates to speak to. If you’re taking a live review, sign up with someone else from your firm and go to class together. It helps to have someone else keeping you in check.

Visualize your goal – This might be the most, um, cheesy of methods but it absolutely works. Write CPA after your name on business cards and put them up where you will see them frequently (but don’t hand them out, that’d be illegal); though this tactic isn’t meant as a substitute for actually preparing (sorry to break it to you), a little positive thinking takes the anxious edge off.

Plan – Sometimes knowing there is a clearly defined schedule takes some of the panic out of the CPA exam, and if you’re disciplined enough, you won’t need motivation. Sure, it’s robotic, but that’s what studying for the CPA exam is. The exam doesn’t ask you to think critically outside of the parameters of financial reporting and accounting, nor do you get bonus points for creativity. So maybe you just need to have a plan, stick to it, suck it up, and move on until you’re done. It’s the most miserable of the options but sometimes all that works.

So? What worked for you?

Grant Thornton Is on This National Employee Appreciation Day Thing

So, servants of the capital markets, how’s the motivation? Stable? Critical? Grave? Whatever your condition, if you work at Grant Thornton, you’ll be happy to know that there’s a chance (somewhere between slim and good) that you’ll receive a little token of appreciation tomorrow:


Exciting, right? We’re not sure these GT e-cards are of the erotic variety but that would definitely be a great show of apprect have the self-control to forward it to your non-GT address and wait to check it at home so you don’t end up like some people.

Turns out National Employee Appreciation Day has dropping on the first Friday in March since 1995 but we’ll be damned if we’d ever heard of such a thing. Is there some coordinated effort among accounting firms, large and small, to keep this thing as quiet as possible? It’s busy season after all; the close proximity to deadlines should be appreciation enough.

Anyway, Recognition Professionals International put this together back in the Clinton days and presumably it’s been a hit because, well, it’s still going on. Jump over to the website however, and you’ll find out that they have far bigger ideas that just e-cards:

Recognition can take a hundred forms and variations. Here are just a few ideas:

1. Ask an employee to write down six ways they would like to be rewarded. Anything goes. The only rule is that half the ideas need to be low cost or no cost.

2. Schedule lunch dates with employees. Give them an opportunity to select the luncheon site, and use the time to simply get to know them better.

3. Offer a free one-year subscription to an employee’s favorite business magazine and have it sent to their home.

4. Consider a gift certificate entitling an employee to lunch with you or another mentor of his/her choosing for the purpose of being coached on one or more topics.

5. Offer a shopping spree to a local supply store for an employee to get items (no staplers or paper clips allowed) to personalize his/her office or cubicle.

6. Give the gift of wellness. Have a limousine pick up an employee for a full day at a spa. Give gift coupons for ballroom dance, yoga or golf lessons.

7. Give a fun-loving employee a series of On your mark-get set-GO cards that they can redeem at their discretion. For example: Leave work early to go to a movie, or shopping, or play ball.

8. Send a handwritten note of thanks for the completion of a job well done.

9. If an employee stays late/goes above and beyond to complete a project, send the employee and his/her partner to a nice dinner.

10. Purchase a company “toy” your employees would most enjoy; a cappuccino machine, dart board, volleyball court, exercise room.

Now judging by this list, it appears that GT looked through these and thought, “Number 1 could be taken advantage of in ways that could get the firm in trouble (wink-wink, nudge-nudge) and the rest of these involve spending money. With the exception of number eight!”

So an idea was born. GT e-cards. Here’s hoping that you all get an inbox full of these because A) you deserve them and B) the better the odds are that someone will forward it on to us so that we may take a gander and then share it with everyone. If you don’t receive a GT e-card (or anything for that matter), then you have every right to go postal on whoever you damn well please.

Is Tim Geithner a Closet IFRS Supporter?

Tim Geithner has inadvertently given his endorsement to standardized financial regulation around the globe, so is he also giving the adoption of IFRS in the US his approval?

Possibly, since he told ABC that “he wasn’t worried that tighter financial regulation would put U.S. banks at an international disadvantage. ‘I’m very confident we can make sure that we are working very closely to raise global standards around the world so we have a level playing field,’ Geithner said.” His motivations are only slightly suspect. Why?

Under IFRS, assets are overstated as derivatives are measured in gross exposure, as opposed to GAAP which concerns itself with net value. More magic financial reporting; of course Geithner would want to see banks magically healed by a change in accounting. If we’re going to do it, let’s also restate years 1999 – 2009 so we can compare at least.


Incredible what a slight adjustment can do (See also: page 19 of the Deutsche Bank report “Financial Transparency” – bwhahaha).

Speaking to the G7 finance ministers in Iqaluit, Canada this weekend, Geithner reiterated his commitment to globalization, accounting magic, and the heavy hand of regulation.

“We all share a deep commitment to try to move forward and reach agreement on a strong, comprehensive set of financial reforms on the timetable we all committed to last September,” he said at a closing press conference following a meeting of Group of Seven finance chiefs.

“That means agreement on … a new set of capital requirements for large global institutions by the end of this year,” he added, playing down the possibility that the Obama administration might be headed in a different direction from other governments.

TG is talking about pacts made with winners like Japan’s Shoichi Nakagawa, who blamed his “drunken behavior” on cold medicine. Sort of like Beavis blaming his tax problems on TurboTax.

Timmy is also somehow convinced that the United States will never lose its AAA rating but he forgets that the MBSs that the Fed is buying were also AAA once upon a time too. He also seems to have forgotten about our massive deficit.

At least he remembered to push the globalization agenda he’s been blabbering about all this time.

Job of the Day: Citi Needs a Financial Accounting Analyst

If busy season is already kicking you in the teeth and nothing has been able to motivate you, then perhaps it’s time to try something new. Or perhaps you just woke up and you realized you’ve got to pull your life together.

Whichever applies, Citi is looking to fill a Financial Accounting Analyst position with a minimum of five years experience in New York. Get the rest of the details after the jump.


Company: Citi

Title: Financial Accounting Lead Analyst

Location: New York

Minimum experience: 5 years

Responsibilities: Participate in analyzing and advising on the regulatory capital implications of broad Corporate strategic initiatives (including, for instance, potential M&A activities); Partner with the Corporate Regulatory Reporting team in addressing regulatory capital and reporting issues of significance; Interface with Corporate staffs (e.g., Accounting Policy, Treasury, Corporate Reporting) regarding certain regulatory capital matters; Garner exposure to Clearing House discussions as well as those with the U.S. banking agencies (Fed and OCC) regarding complex and/or nuanced regulatory capital or other relevant regulatory matters of significance.

Skills: Bachelor of Science Degree – Accounting Major; CPA; 5 – 10 years professional experience, preferably a combination of public (ideally Big 4) and private within the financial services industry (commercial or investment bank); Preferably GAAP Accounting Policy or Regulatory Reporting or Advisory experience

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

This Is How Some Accountants Are Surviving Busy Season

Thanks to those who stopped by Tuesday’s post to discuss work-life balance issues. I also received an email from a PWC reader which details the firm’s “official” tips for dealing with hell busy season. Let’s begin with the PWC checklist of helpful tips. The best of:

Work late two nights a week and stay for dinner. The ve by 7, 7:30 so you can have dinner at home. This way you aren’t staying until 9 or 10 and eating at the client every night of the week.

Is Dubya promoting a four-day workweek or just assuming that most people don’t count Friday as anything more than a 9 to 5 barnburner? Either way, factor in a 7:00pm departure, home by eight, dinner on the table an hour later. While thoughts of what you left at work brewing on your mind? I don’t think so.


Work 7am – 7pm Monday through Friday. This allows for team members to have dinner at home and eliminates the need to work weekends.

It also means your team members land the best parking spots in the lot. It’s all about the little victories, isn’t it? FTW.

Agree which weekends the team will work from the client site at the start of the audit if this is something that can be accomdated by the engagement team. Set an agenda for those weekends and send a calendar invite. This way everyone knows what their expectations are upfront related to hours you will work and what you should try to accomplish. Sending a calendar invite and working hours for the weekends gives staff the opportunity to plan around those hours instead of not knowing when you might wrap up that Saturday.

I like this one. Communication is constantly at a shortage when it comes to weekend work, especially on larger engagements where weekend face time is an awful reality. Nonetheless, you competent team leaders out there should consider this. Be mindful of the realistic possibility that some team members will finish Saturday’s agenda on Friday. Do these people still need to come in on Saturday?

Make your course of action known ahead of time. The personal motivation of your staff will be severely threatened if their timely work is unknowingly rewarded with more. There’s nothing wrong with updating the meeting request Monday through Thursday as work progresses; but at some point the staff needs to know what to expect.

PWC’s list also included the popular idea discussed in the comments of Tuesday’s post regarding leaving early one night a week. Commenter bitteraccountant made this point:

If you think that it (a work-life balance) does exist, and going home at 6pm during the week and working till 10 the remainder is what work life balance means, you have a fucked up image of a life.

Touché, bitteraccountant. To a degree, the comment rips the blinders off and exposes the truth of the situation. Is it naïve to think that the public accounting industry can really have a near balance of work and life, especially during busy season? Oftentimes it’s not happy hours or PTA awards that your staff needs to get through the winter months (although the vodka doesn’t hurt). Clear communication from everyone, straightforward status updates, and a minute amount of respect for colleagues is a stronger foundation than most teams care to admit they’re missing.

Busy Season 2010: Generous Accountant Thinks About Others; Arranges Gathering

Because busy season is in full swing, we’ve been discussing motivation a fair amount this week. The latest pick-me-up came way of Houston from someone that decided to take matters into their own hands:

So I know everyone is busy, busy, busy, but I was given a free Happy Hour at Howl at the Moon and wanted to share it with all of you!

What: Happy Hour event

Where: Howl at the Moon (midtown)

When: February 5th, 2010

Time: 9pm – 12 am

Hope to see ya there! It should be a good way to brush off all the stress that busy season has brought!

Happy auditing,


Having never come across such generosity in our own professional experience, we tracked down this noble soul to find out the dealio. Well for starters, our hero reminded us that it’s difficult for the firms to arrange shindigs this time of year so our savior just decided to make it happen.

Plus, people haven’t been able to get together and share their Busy Season 2010 war stories and lament on the days and weeks to come. This is the perfect opportunity to get together and do just that. Also, they told us that you’re all so awesome and you deserve a break.

Gosh, this might be the feel good story of the season. Enjoy Houston!

PwC Motivates the Troops with Just Two Words

More examples of motivation are rolling in as we pick up speed during this most wonderful time of the year.

The latest token of gratitude comes courtesy of P. Dubs. While some people need gift cards to remind them that the next ten weeks will be worth the pain but one PwC office knows that such superficial bait won’t motivate everyone. It requires something more, something meaningful:

Picture 3.png

This goes above and beyond getting off your chair, walking all the way over to someone’s cube-pod, looking them straight in the eye and saying, “You’re awesome!”

This involves handing a piece of paper (below) to this awesome person and then telling them how kick ass they are. Then high-five, chest-bump, fist-jab ass-slap, whatever the hell it is you’re doing these days to top it off. It’s the little things that make it special. Now get to it.

You’re Awesome! Award-1.pptx

Putting Accounting Firms’ Quest to Dominate Magazine Lists into Perspective

We’ve hypothesized about accounting firms’ quest to dominate every magazine list on Earth. Admirable goal, no question but the motivation has escaped us.
Until now. We’ve been enlightened:

Going back to the dominating magazine lists – its a lot like the bald middle aged guy (Big 4 accounting firms) that buys a Corvette (magazine awards) to compensate for a lack of equipment size (crappy work environment) to attract the ladies (slaves).

That pretty much clears it up.

Are Three Letters Enough for You?

Thumbnail image for BelushiCollege_CPA.jpgBack when we did our initial survey of you — our brilliant readers — we asked you to share with us the certifications that you boast behind your name.
As you well know, the mother of all certifications for accountants is the CPA. You hear about it in your college courses until graduation and the accounting firms put you under the gun to knock it out so you can make manager witho��������������������this coveted status, Adrienne gives you the latest in CPA exam fodder every week in her >75 column.
After dominating the CPA, your careers mosey along and eventually you may consider obtaining another certification. The motivation for more of the alphabet are many but most likely you’ll want to hold yourself out compared to your slacker co-workers or maybe you’re just obsessed with the notion of having as many letter combinations behind your name as possible.
Some of the more common certifications include:
Certified Management Accountant (CMA) – Implemented by the Institute of Management Accountants, the IMA states “As many as 85% of accountants today work inside organizations, where expertise in decision support, planning, and control over value-adding operations are crucial elements of operational success.”
Certified Financial Manager (CFM) – A complement to the CMA, the CFM can be obtained by taking one additional exam in addition to the portions under CMA.
Certified Fraud Examiner (CFE) – The sexiest certification going. As long as you can keep from soiling yourself.
Certified Financial Planner (CFP) Among other requirements, a three part, 10-hour exam is administered three times a year for this certification.
Certified Internal Auditor (CIA) – The Institute of Internal Auditors issues this global certification that “demonstrate their comprehensive competence and professionalism in the internal auditing field.”
Certified Information Systems Auditors (CISA) – Sponsored by the ISACA, this is another global certification for information systems, audit, control, and security professionals.
Chartered Financial Analyst (CFA) – Issued by the CFA Institute. Check out the requirements here.
Certified Valuation Analyst (CVA) – Issued by the National Association of Certified Valuation Analysts, this certification involves a five day training program and a 40–60 hour exam.
Although the thought of studying and testing for another certification may make you nauseous, it’s worth considering if you’re looking to make yourself a smidge more noticeable than your competition counterparts. Vote in our poll and discuss any thoughts or experiences in the comments.

Rumor Mill: PwC Tax Practice Eyeing Utilization

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for pwclogo.thumbnail.jpgWe’ve received a tip that human resources for PwC has made calls to staff saying “the lead partner [of the] group is reviewing everyone’s utilization numbers one person at a time.”
This is occurring in at least one industry group in the New York tax practice. Although our source stated that it was not unexpected for utilization to be scrutinized, it seemed unusual for a lead partner to be examining so many individual utilization numbers. Then again, PwC isn’t really known for a transparent performance review process.
Since the forced ranking trend seems to be in full effect, this could be the new standard operating procedure. The timing also seems dubious in the wake of (or during) last week’s layoffs in the advisory practice.
If you’ve recently been informed that your utilization rate is getting a close eye (and this comes as surprise) or if you know of the motivation behind such close inspection, email us at tips@goingconcern.com.

Problem of the Day: Your Staff Makes the Same Money As You (Maybe More)

money.jpgApparently it’s happening, people. With several firms freezing pay for this fiscal year, some already hinting at an additional freeze for fiscal year 2010, and with less fewer offers being made on campus, it’s not outside the realm of possibility that the new associate nearly has the same salary as you.
It goes without saying that this is a contentious issue amongst the staff and it can be made worse if it is known to exist between members of the same team.
If you’ve been busting your ass for the last two to three years and seen very little appreciation in the form of merit increases and suddenly the new associate walks in making virtually the same as you, your motivation may evaporate on all fronts.
From a staff perspective, no new associate, no matter how virtuous will ever ask, “Is that what a senior associate makes? I wouldn’t be comfortable making that much without any experience.” Nice thought but not gonna happen. Firms will claim that they have to keep salaries competitive in order to win the best talent and may even encourage it in order to foster the “competitive environment”.
So discuss how prevalent this is on your team, in your office, or at your firm. Is there any good solution here? We’re talking about money, so there has to be some opinions.

The IRS Will Pay You for Snitching but You Better Have a Big Fish and Don’t Mind Waiting

IRS_logo-thumb-150x140.jpgRecently we discussed snitching on tax cheats in the UK and we speculated that tax rats Stateside would be less common because of the increasing trend of hating (or just plain killing) on the Federal Government.
Well, we were dead wrong. Since Congress passed the Tax Relief and Health Care Act of 2006, the payouts to whistleblowers increased from a maximum of 15% of the recovered proceeds to a maximum of 30%. So far the temptation is working as tips to the IRS have increased to 476 for the latest fiscal year (9/30) compared to just 116 in the previous year.
Continued, after the jump


The catch is that the IRS doesn’t want to hear about your elderly neighbor that’s running numbers out of their basement for extra cash. No, they want the serious scofflaws, according to the Tax Girl, “the tax, penalties, interest, additions to tax, and additional amounts in dispute must exceed $2 million for any taxable year (that’s the sother restrictions also apply).”
So if you crunch the numbers, you can see there’s plenty of motivation to flip on someone if you know they are a tax dodger. Problem so far is that because of the boring arcane nature of tax law and the swiftness of the American court system, not one payout has occurred to date.
Plus, the law isn’t exactly encouraging the most honest of folks to come forward when you consider that Joe Francis’s accountant ratted him out only to be accused of shenanigans himself. And as Joe Kristan points out, “…there is always something creepy about the IRS being able to horn in on confidential client-professional relationships…”
The IRS probably isn’t worried too much about who gives them the information, just as long as they get it, so they’ll probably make a run at this with an imperfect system and with sources of questionable motivation for the time being.
If You Pay Them, They Will Come [Tax Girl]
Informant Program Spurs IRS Whistleblower Tips [Web CPA]
30 Pieces of Silver or 30 Percent of the Gross [Roth & Company, Tax Update Blog]

Problem of the Day: Tattle Tale Emails

bored.jpgNo doubt your firm asks you do things that inevitably find their way to the back burner, that you forget about, or just plain don’t want to do. Mandatory ethics training, “crucial” CPE courses, office-wide pep rallies, etc.
By the time you’ve received the tenth email reminding you of the “mandatory ethics training that will ensure that you remain in compliance with firm policy and demonstrate [insert your firm’s name here] commitment to ethics” your urge to say “TO HELL WITH IT” has easily overtaken any intent you had on completing the training in the first place.
More, after the jump


Your aloof attitude, as you’re all acutely aware, is NOT APPRECIATED. Because of your lack of commitment, most firms find it totally necessary to email anyone that you’re remotely connected to, including the partner in charge of your firm/office informing them of your slacker attitude.
You know the type. Your name, next to something to the effect of “not in compliance/attendance” being sent around to inform everyone that your commitment to your firm is clearly in question. Someone obviously surmised that this was the best motivation for you to get your shit together if you want to remain a part of this awesome place to work.
Often times, you’re not even made aware of your non-compliance and one of your goody two-shoes friends sends you an email, “You know you’re in trouble for not going to the town hall meeting, don’t you?”
Just before you consider doing what EVERYONE is expecting you to do (read: freak the f*ck out), you calm everyone down by saying, “Yeah, my bad.” And hopefully it hasn’t gotten to the point where you’re meeting with a very gruff and passive-aggressive partner that drones on about the importance of the CPE/meeting/training in question, because that’s just awkward.
Discuss the stonewalling, and then your firm’s preferred method of tattling on the riff-raff in the comments.

Review Comments | 09.18.09

ikea-train-2.jpgL’shana tovah to all our friends celebrating!
Thain Says He Should Have Furnished Merrill at Ikea – Don’t laugh, those Swedes know what they’re doing. JT wouldn’t probably know what to do with the allen wrench though. [Bloomberg]
The End of the World Is Upon Us – In Dubai you fools. [Daily Intel]
Wall St. vs. Sports: a Look at the Top Paychecks – Think of it as motivation. For what, we’re not exactly sure. [DealBook]
Going Concern Audit Opinions: Why So Few Warning Flares? Seriously. Bad news is the best news. [RTA]

Fed Governor Duke: Accounting Should Come With Incentives

motivation.jpgEditor’s note: Adrienne Gonzalez is founder and managing editor of Jr Deputy Accountant as well as regular contributor to leading financial/investment sites like Seeking Alpha and GoldmanSachs666. You see all of her posts for GC by going here. By day, she teaches unlicensed accountants to pass the CPA exam, though what she does in her copious amounts of freetime in the evening is really none of your business. Follow her adventures in Fedbashing and CPA-wrangling on Twitter @adrigonzo but please don’t show up unannounced at her San Francisco office as she’s got a mean streak. Her favorite FASB is 166.
What do you get when you cross a Federal Reserve governor and the AICPA? Well I wish I could say unicorns and rainbows but really all you get is Fed Governor Elizabeth Duke on, what else, regulation.
Regulatory Perspectives on the Changing Accounting Landscape doesn’t exactly sound like a party but what do you expect? Unemployment is up, revenues are down and let’s face it, things aren’t looking too good for the short term. You’ve got to give Duke some level of credit for trying.
More, after the jump


Firstly, we feel it prudent to point out that Duke is no CPA. She couldn’t tell a debit from a credit if her life depended on it, at least in j/e form, but we’re willing to bet as a banker she’s probably better at sniffing out capital requirements than, say, that brainiac Bernanke.

Given my background as a community banker, I feel it is crucial that an accounting regime directly link reported financial condition and performance with the business model and economic purpose of the firm. It is difficult for me to comprehend the value of an accounting regime that doesn’t make that link.
To be frank, it has been frustrating to try to assess that viability when the value of an asset is based on the nature of its acquisition rather than the way in which it is managed or the way in which its economic value is likely to be realized.

What’s so frustrating about assessing an asset? Either it’s worth something or it’s worthless. Any idiot can figure that out, even yours truly.
Duke implies in her speech that fair value is only useful if the instrument (read: creative and probably entirely made-up security) is being sold or desired by some third party (read: those gullible Chinese who bought all of our weak ass mortgage-backed securities back in the good old housing bubble days) and entirely useless for anything else. In other words, the proof is in the cash flows.
Leave it to a banker to assume that balance sheets are so easily manipulated by instruments passing from buyer to seller and somehow entirely irrelevant in the time in between. As a banker, we expected better from her. Surely she understands that capital requirements dictate those “useless” securities on the “assets” side of bank balance sheets count towards the bank’s overall viability? Apparently not.
In fact, Duke seems to think that fair value can backfire on smaller institutions who may not have the borrowing leverage of, say, a beast like Goldman Sachs. Or better, Lehman Brothers. Before they went bankrupt that is.
All in all, interesting thoughts from the Fed Board on this one but until they pull out someone with practical accounting experience, it might as well have come from Perez Hilton for all I care. Next!

Now That the #1 Spot Is Secure, Deloitte Is Making Some Changes

We’re not sure when Deloitte dropped the hammer on Pandora but the timing of us hearing about it is dubious since the coveted #1 spot on BW’s list is safely in print.
Much like E&Y, we’re curious as to the motivation here. Bandwidth sucking notwithstanding, your morale doesn’t seem to be much of a concern here. Green dots, kindly discuss in comments your theories behind the latest buzz kill. The rest of you (minus E&Y, natch) can share what you’re listening to currently as pure schadenfreude.

KPMG Europe Makes an Announcement that Won’t Upset Anyone

8ball.jpgIn a demonstration of spreading the wealth or possibly just a strategic international ploy, KPMG Europe is adding seven new nations to its firm.
Regardless of the motivation, it clearly demonstrates that the most positive news that the Scrooge American firm is capable of announcing is that it is ruining everyone’s holiday season prior to the start of football season so you have plenty of time to get over it.
KPMG Europe will add Turkey, Russia, Ukraine, Kyrgyzstan, Kazakhstan, Armenia and Georgia to its stable of bean counters. They join the UK, Germany, Switzerland, Spain, Belgium and the Netherlands and will increase the Europe revenues to over £4bn which probably could pay for a few parties (but not full bar) in the States.
KPMG Europe spreads wings to take in seven nations [Accountancy Age]

H&R Block is Not Letting McGladrey & Pullen Leave Until They Talk About This

argument.jpgSo the H&R Block/McGladrey & Pullen soap opera break-up has gotten more annoying. At first, it simply looked like a firm falling out of love with its parent company because M&P didn’t want to be stuck with a loser their whole life.
Natch, H&R Block wasn’t going to just let M&P walk away from the best thing that ever happened to the firm. M&P was not going to have that conversation and said that they were still walking out.
The Block feels so strongly that M&P is making a mistake, that it was announced late last Friday, probably in order to not make a scene, that H&RB sued M&P to prevent the termination of their administrative service agreement. Essentially saying, “WE ARE GOING TO TALK ABOUT THIS!
M&P is not impressed with this desperate attempt to be won back:

“We are disappointed that H&R Block has chosen to pursue litigation,” said McGladrey & Pullen managing partner Dave Scudder. “We are committed to respecting our legal obligations and are confident we are doing so. Thus we are confident this lawsuit has no merit. Under the terms of our shared services agreement, we have every right to terminate that arrangement. We have chosen to do so because it is the best business decision for McGladrey & Pullen LLP in order to serve our clients in the increasingly complex business and regulatory environment.”

M&P is over being held back by HR&B and wants to get out there on their own. Besides, all The Block does is sit around and prepare tax returns for people who can’t read the instructions on the tax forms. You’ve got no motivation, Block. Oh sure, you got into the online tax return prep business but now what? M&P just wants time to be alone, so please respect that.
Block Files Suit Against McGladrey & Pullen [WebCPA via CPA Trendlines]

Elijah Watt Sells Award Recipients Make the Rest of Us Want to Puke

The AICPA announced the winners of the Elijah Watt Sells awards yesterday. For you mere mortals, this is an award for the 10 highest cumulative scorers on the CPA exam.
Glancing over the recipients we notice that two Big 4 firms (KPMG and Deloitte) enslave employ five of the recipients. A couple of recipients work in industry and a few more work for smaller, local firms.
This leads to the obvious question of why the hell P. Dubya and E&Y were totally shut out? Grant Thornton and BDO were also blanked. Are the honchos at the Radio Station and Big D giving the worker bees more time to study? Are P. Dubs, E&Y, et al. cutting out the bonuses for passing and thus destroying anyone’s motivation for passing? Are those of you looking to pass already choosing between eating and sleeping (and maybe sex) so studying just isn’t happening? Sells was a Big D founder so maybe the whole thing is rigged? Thoughts anyone?
Oh and congratulate the recipients while you’re at it (without vomiting on them).
AICPA-HONORS-TOP-CPA-EXAMINATION-PERFORMERS.pdf