• BofA Denies It Misled on Merrill Bonuses – In other words, piss off. [WSJ]
• Swine Flu May Cause 90,000 U.S. Deaths, Report Says – We’re looking forward to hysterical 24 hour swine flu coverage again. [Bloomberg]
• Bureau of Prisons Denies Madoff Has Cancer – Chest hair removal and getting high is definitely accurate though. [DealBook]
• Philadelphia Eagles Pass on $10k Tax Credit for Hiring Ex-Convict Michael Vick – That explains it. [TaxProf Blog]
• IRS Could Target Off-Shore Hedge-Fund Investors Next ‘Expect U.S. investors in off-shore hedge funds in places like the Cayman Islands, who failed to properly report earnings to the IRS, to be the next target of U.S. tax authorities’ [WSJ]
Related Posts
Motivating Words During Busy Season, Deloitte Edition
From a friend of GC:
If you’ve got your own words of encouragement for this busy season for Deloitte, or your own firm, feel free to share. Or if you’re feeling creative send us your poster to share with the group.
Some People Would Like to Know Why PwC Is Mum on The Alleged Morgan Keegan Fraud
Last week, the SEC continued its “Bustin’ Up Fraud” tour by charging Memphis-based Morgan Keegan & Company, Morgan Asset Management, and two employees, James C. Kelsoe, Jr. and Joseph Thompson Weller with “fraudulently overstating the value of securities backed by subprime mortgages.”
The long/short of it is that SEC’s Enforcement Divish alleges that Kelsoe “arbitrarily instructed the firm’s Fund Accounting department to make ‘price adjustments’ that increased the fair values of certain portfolio securities.” Weller didn’t do a damn thing to remedy this, Morgan published fraudulent net asset values (NAVs) based on these valuations and investors ended up losing something like $2 billion. Typical stuff in this day and age.
While Khuzhami and Co. gave the usual spiel about “lies” and whatnot, Jonathan Weil over at Bloomberg is wondering why PricewaterhouseCoopers is being totally left out of this ordeal (our emphasis):
Now that the Securities and Exchange Commission has accused Morgan Keegan & Co. of fraudulently overvaluing subprime-mortgage bonds in several of its mutual funds, there’s still one major player in this saga that hasn’t uttered a peep.
That would be PricewaterhouseCoopers LLP, the Big Four auditor that blessed the funds’ year-end financial statements for fiscal 2007. Funny thing is, officially at least, PwC is still clinging to its position that there wasn’t anything wrong with the funds’ numbers. That’s a lot harder to believe now than it might have been before last week.
Not to take issue with Jonathan Weil (who we think is great, btw) but we aren’t surprised at all that PwC is standing by their audited numbers. “Deny ’til you die” is Big 4 101, even if that denial is through complete and utter silence. They’re better at holding out on guilt than Pete Rose.
JW ends up addressing his own inquiry saying, “Perhaps PwC is awaiting the final outcome of the SEC’s case, which might take years to litigate. While the SEC didn’t name PwC as a defendant, the firm is being sued in court by fund investors. So PwC has a clear incentive to avoid acknowledging that any of its audit conclusions may have been wrong.” Jackpot! And if there’s one advantage that PwC and the rest of the Big 4 have on the road to failure, it’s time.
Ultimately, this detecting fraud. The public want auditors to find it. Auditors claim that’s not their job. The “expectations gap” as the leadership likes to say. And while Big 4 leaders cling to this “gap” like a security blanket, Weil brings up the question that more people have been asking lately, “if auditors can’t detect fraud, what good are they?”
Bond-Fund Fraud Suits Leave Auditor Speechless [Bloomberg/Jonathan Weil]
SEC Charges Morgan Keegan and Two Employees With Fraud Related to Subprime Mortgages [SEC Press Release]
SEC Complaint
Big 4 Recruit Needs Advice on Table Manners, Office Visits
Today in “I need advice from strange accountants and Going Concern trolls,” a Big 4 recruit needs some insight into the office visit and how to behave when breaking bread with Big 4 professionals.
Need to know what to expect for your first busy season? Looking for pointers on how to subtly attract your rival’s employees? Want ideas that aren’t über-lame for your team’s next happy hour? Email us at [email protected] and we’ll put our heads together like the Stooges.
Back to our aspiring Big 4 rube (KIDDING, we know some of you are sensitive):
What should I expect at an office visit for the Big 4? Also, how do I behave at a dinner or lunch?
Simple enough. The Big 4 office visit is standard operating procedure in the recruiting process and we asked our resident Kool-Aid™ mixer, DWB to give his take on these show and tell excursions:
I apologize in advance if my answer comes off as salty; someone must have spit in my Cheerios this morning. But really – what kind of question is this? I’ll remind everyone about my rant the other day about providing Caleb with greater details when submitting questions. So with that, I have some questions for you – are you a college recruit? What practice? What office? Is this a one-off tour or is it part of an official recruiting program?
Because your submitted question was useless, I will make the assumption that you’re going on an official visit. Expect a tour, an interview (I hope – why else would you be going?), and the normal HR run-around of work-life balance, salary growth, etc. I advise you to talk to as many individuals as possible – on the record, off the record, etc. Get business cards, and follow up with questions you might have later. NETWORK your ass off. The people you meet in the “casual” settings have just as much of an influence on whether you receive an offer as your interviewer does.
Well, the bad accountant angle is obviously out, so regarding your behavior at chowtime, some good rules of thumb:
1) No booze. We realize this sucks but you don’t get bonus points for being able to hold your liquor.
2) CHEW WITH YOUR MOUTH CLOSED.
3) Don’t be too chatty or too quiet. Nobody likes someone who talks without breathing throughout the entire meal but you will be noticed if you say nothing.
4) Topics of conversation to avoid: recent campus ragers; office visits that you’ve gone to at other firms; negative news about the firm you’re currently visiting; the hot server’s physical attributes.
These are just a few but in general, if you have to ask yourself, “could this make things awkward?” then avoid the behavior. If that doesn’t clear things up then ask Emily Post.
If we’re way off base here or anything crucial is missing, let us know in the comments.