Tag: Disappointment

Accountants Disgust Charlie Munger on a Multitude of Levels

If you piss off a billionaire, there will be repercussions. And Charlie Munger is not a typical billionaire.

He just so happens to be the BFF and business partner of the second richest person in this fair land of ours and since WB is too busy chasing tail with new friends, he recently felt the need to vent at the University of Michigan about, among other things, accountants and how they failed. FAILED US ALL!

The accountants utterly failed us. And by the way, there’s practically no sign of any intelligent reversal of the failure of that profession. I have yet to meet many accountants who are the least bit ashamed for their contribution to our recent troubles. But it was immense. Imagine when Enron comes down to the SEC and says “we want to write a little contract with A, and a little contract with B, and take all the profit we’re going to make from these complicated contracts over the next 20 years into earnings immediately, and put an asset on our balance sheet of $28 billion from signing two pieces of paper.” And the SEC, led by wonderful accountants who studied at great places, [says] “Why, of course you should have that kind of accounting!” What the hell were they thinking? How can anybody have any respectable understanding of human nature without realizing that the kind of people who were going to be tempted by that accounting were not going to be able to resist the temptations? It was disgusting.

Now you might think this is one of those situations where the old man says to you, “I’m not mad, I’m just disappointed.” This is bullshit. Charlie Munger is definitely pissed. He’s not putting all the blame at the doorstep of accountants but you definitely get the impression that if he could, he would.

But why? Why would Mungsy be so pissed? Why would he lump you in with likes of Jimmy Carter, Ryan Leaf and Andy Barker, P.I. (an accountant, no less)? Basically it’s because you people are a bunch of pansies, will politely nod to the whims of the clients you serve and that you’re a bunch of numbers nerds and that you can barely carry on a conversation with another human being let alone understand that greed trumps Debits = Credits:

Partly the establishment accountants want to please the people who are writing the checks. And partly the academic accountants get full of people who overdosed on mathematics. They want everything to be in balance. And they don’t think that that really isn’t rational when creating rules for a human behavioral system. They’re too mathematical and not rational enough when dealing with their fellow humans. You can’t give the average Wall Street CEO really lenient standards of accounting and expect the figures to be good.

Here endeth the lesson.

Charlie Munger on Communism, Botox, and Goldbug Jerks [Motley Fool]

Compensation Watch ’10: Early Returns from Deloitte Are In

The first reports of Deloitte raises for audit professionals have come in from the Mid-America Region:

I’m surprised to see absolutely nothing posted about Deloitte raises. We have had the raise discussions in my office for staff and seniors, no double digit raises in sight. AIP (bonus) for Seniors and above. Managers- TBA.

Mid America Region- it’s looking like 2-9% for staff/seniors. AIP is supposed to be in the range of 2-12%, but that is the range for both seniors and managers. I spoke with a friend in another office in my region and their raises are looking pretty consistent, if not lower. Starting salaries are frozen- start classes from fall 09, 10, 11 will all at the same rate.

This is the earliest word we’ve received and comments have suggested that more news would come early next week. The tax practice still has their town halls next Tuesday but that could be to explain the numbers if in fact they are similar to audit’s.

So this could be a John Kerry-esque exit polls effect or maybe this is a sign of things to come. Either way, if you’ve gotten word, discuss below and keep us updated with any developments.

Live Blogging the Overstock.com Q2 Earnings Call

Your friendly Human Resources Professional Daniel W. Braddock will be joining me today for this particular Overstock powwow. He and I will be chatting live and I’ll be updating periodically. You can listen yourself by calling here: dial (866) 551-1816 and enter conference ID 90318167 when prompted and chime aniel: I’m in
President here we go
ahhhhh speaker phone.
it’s like these guys have never been on a conference call before
me: i’m not in yet
Daniel: you’re missing the legal mumbo jumbo
me: proceed with commentary until i get on
Daniel: He’s recommending having the q2 and 10Q/K available as references
Jonathan hands over to Steve
me: oh that’s a relief
Daniel: Revenue up 32% from q2 ’09 to ’10
gross margin way down
shocker
me: I’m on! And yes, it’s a snoozer so far but the balance sheet is sound! Whatever that means.


Daniel: slide deck? what slide deck?
off to slide 4 already?
help!
me: Jesus
I can’t follow this
Slide 5?
Anyone else having trouble keeping up?
Daniel: Who is this guy? Used the word “starch” to describe cash flow
Pretty sure he just tripped over slide five and fell on slide 6
whatever that mean
means*
3:11 pm me: Good grief
they’re talking GAAP
thin ice boys
very thin ice
Daniel: and no one knows if their numbers are an all-time high or not
me: well
Daniel: you have THREE years of numbers to remember
me: memory is a tricky thing if you’re on medication
i kid Patrick
I kid
Nothing but love
Daniel: Pretty sure slide 10 was removed from the presentation…
me: You’re looking at the slides?
Daniel: From an HR/public speaking perspective this man is atrocious

3:15 pm; me: Christ
the customer satisfaction poll
again?
Old news guys
Daniel: When you only have a few cards in your back pocket, you must re-use
Daniel: Have you ever purchased anything off of Overstock.com?
me: God no
Patrick is wrapping up already
Daniel: Is he wrapping up or is he getting the hook?
me: Btw, Sam is live tweeting the call, you can follow it here:
Daniel: IS THE WINDOW OPEN??
me: http://twitter.com/SamAntar
Daniel: I HEAR TRAFFIC OUTSIDE
me: “there’s not a person in this company that knows what Wall St.’s numbers are”
That’s amazing
Shareholders are you listening?
me: Questions
coming up
Bueller?
Bueller?
Jesus
no questions?
Daniel: You need investors first
me: Matt Schindler
BofA
or maybe not
who is this guy?
Daniel: Trends in spending
on Overstock? Try suits from 1997
me: Apparently Sam’s phone number is blocked
Sam, I hate to say it but I’m not surprised
Intelligence on the site?
Come on people
Is that it?
“it’s nice talking to smart owners”
End of call
Jesus man
Daniel: That was painful
me: Thoughts?
is there a holiday today that I’m not aware of?
Daniel: I simply think people do not care about the current state of this company
from a management perspective – good LORD were they unorganized.
Byrne spoke like he was conversing with close colleagues: lingo was very internalized; assumptions about background were made.
How you are not able to call on basic numbers from two years ago boggles my mind as well.
me: They blocked off an hour for that?
I feel gypped.
Not even 30 minutes
I think we were on to something skipping the Q1 call
Daniel: Welcome to Wall Street in August
me: Good point
See you for Q3 I guess
Maybe Sam will have more on this dumped stock
by then
Daniel: Here’s hoping.

RSM McGladrey Can Explain the Disappointing Year

H&R Block announced its earnings for fiscal 2010 yesterday which included the details for the fka RSM McGladrey. The company’s press release basically says that times are tough but RSM had some good reasons for that.


For starters, the small tiff with M&P sort of put a damper on things and a nasty goodwill write-off:

RSM McGladrey reported fiscal 2010 pretax income of $58.7 million, down nearly 39 percent from $96.1 million in the prior year. Revenues declined 4.2 percent to $860.3 million, primarily due to the impact of the overall weak economic environment, which continues to pressure billable rates and hours within the industry. Profitability was negatively impacted by costs associated with previously resolved arbitration proceedings involving McGladrey & Pullen and other costs of litigation totaling $14.5 million in the aggregate, as well as a $15.0 million goodwill impairment charge at our capital markets business unit.

A 39% drop in profits could explain the nationwide layoffs at McGladrey that we reported on earlier this month. It’s a good thing they didn’t have the ginormous golf cake in this year’s numbers, otherwise the results would have been worse.

But if you ignore all that, things were essentially flat and everyone knows that flat is the new up!

Excluding these charges, pretax income would have been approximately $88 million and pretax margin for the segment would have been 10.3 percent, essentially flat with the prior year. The shortfall in revenues was partially mitigated by cost reduction efforts throughout the year. These efforts included headcount reductions to reflect lower client demand, as well as other non-client facing cost reduction initiatives.

OH! There’s the layoffs and they’re citing “lower client demand.” Thoughts on that, anyone?

H&R Block Reports Fiscal 2010 Financial Results [Market Wire]

The BNY Mellon CFO Isn’t Mad at Andrew Cuomo…

…just disappointed about Andy getting all sue-y over BNY Mellon’s Ivy Asset Management’s involvement with Berns Madoff, which will result in more money going to – SHOCK – lawyers.

Bank of New York Mellon Corp.’s (BK) Chief Financial Officer Todd Gibbons told investors Wednesday that the company is “a bit disappointed” about the New York Attorney General’s decision to file a law suit against the bank related to Bernard Madoff’s Ponzi-scheme.

But as a result of the suit, and the current environment more broadly, legal cost are expected to run higher, the CFO said at UBS AG’s (UBS) Global Financial Services Conference in New York.

KPMG Advisory Has Another Potentially Awkward Meeting, Sans Dog

Thumbnail image for Thumbnail image for Thumbnail image for PomeranianSP1324.jpgIf you’ve been hanging around these parts long, you’ll remember back in the fall when Klynveldians were sitting down for their compensation discussions which gave birth to one of our favorite mascots. All professionals in the Southeast region of the advisory practice witnessed an awkward moment when the then partner-in-charge of advisory phoned in, along with his dog, to break the news to the troops that they weren’t getting squat for raises.
Well today, there’s another call down in the Southeast — the “SE Advisory Market Development Staff Update Call” to be precise — and apparently there’s more bad news. It seems that the SE advisory practice (the largest in the firm, according to one source) is a bit behind on its revenue targets for the first three months of the new fiscal year and January isn’t shaping up so well either. The actual revenues are trailing the planned targets by approximately 15%, according to slides from the presentation obtained by GC.


Sources have indicated that while there is significant pipeline revenues, as of January 11th, only ten percent have either verbally committed to an engagement or are currently being negotiated. More than one-third of the pipeline is classified as being in the “identification” stage which is largest group. Now perhaps that is a normal ratio but another slide indicated that the number of client wins are on pace to be down considerably (~50%) for the month of January as compared to the prior three months.
One of our sources indicated to us that a major problem is that “identification” of a potential client was enough to have it included in the pipeline. In other words, if your Pomeranian sniffs a Boston Terrier’s ass at the dog run and you talk shop with the owner of said Boston T, that person is more or less in the pipeline. The conversion of the BT apparently is not crucial and even if the Boston Terrier is converted to realized revenue, it was a far smaller percentage than initially estimated.
The problem, as it appears to us, is that business in the advisory practice in the Southeast could be drying up (or maybe just getting more competitive) and that conversion of potential business is slipping. It’s far too early in the fiscal year to speculate — but by all means go right ahead — about what this all will mean and if business picks up, then it will be moot. But after the shake-ups that went down in that part of the country, the pressure is most certainly on.
If you were on the call today or have more insight, discuss and get in touch.

Open Thread: CPA Exam Pass Rates for 2009

Cumulative scores under 50%? Sigh. You really packed it in at the end didn’t you? Don’t worry, we still believe in you (click to enlarge):
Picture 2.png
All this does is reinforce the idea that you need to be paying attention to what the JDA tells you every week in >75.
Discuss the past, the future, the section that is your sworn nemesis, the story about the taking your last section on the last day of the eighteenth month. Whatever you like. It’s fine if you have to cry a little bit.

>75: Procrastination

Procrastinate.jpgEditor’s note: This is the latest edition of >75, our weekly post on questions that you have related to the CPA Exam. Send your questions to tips@goingconcern.com and we’ll do our best to answer as many of them as possible. You can see all of the JDA’s posts for GC here and all our posts related to the CPA Exam here.
First of all, I have to give it to all of you little future CPAs of America, you REALLY know how to put things off until the last minute, don’t you?
I’m going to let you in on a tiny little secret: the exam never goes away.
Let me paint an “imaginary” scenario where CPA Review classes are starting in less than 48 hours. Classes have been on hold for over two months and suddenly, within this 48 hour period, there is a rush of panicked CPA exam candidates realizing they’ve got less than a day left to figure out a plan. Anyone else see what’s wrong with this picture?
I’m not talking about a handful of people, I’m talking about a significant chunk of you. You know who you are and you know exactly what I’m talking about.


So what is it? Do you believe that the exam will pass itself? Or if you put it off long enough somehow you’ll wake up one day a CPA? I hate to break it to you but that’s really moronic.
There are students in our classes that are 50-some years old. Think about that. They graduated 30 years ago and are STILL putting this stupid ass exam off. So don’t think you’re some hero of procrastination just because you let 18 months go by and started losing exam scores, you aren’t special.
The bottom line is this: it is all about what you want to do with your life. Do you really want to be a CPA? Then you’ll suck it up and finish. Don’t do it because your parents want it or your girlfriend wants it or it’s your grandma’s dying wish. You are only setting yourself up for a life of half-assed failure, misery, and disappointment.
Which is kind of like what you’re setting yourself up for with a CPA and a career in public accounting except + tchotchkes. Win* (I think).
Point is, stop. In the time it takes for you to come up with 1000 excuses, you could have already booked your exam and gotten through at least 150 MCQ. Yes, it sucks but guess what? You picked it. You can make it worse on yourself and be that 50 year old guy in the back of our Live class or you can just get through it and stop bitching.
/end rant. Do it.
*I’m obligated to say that because of my day job

And Here We Thought All Accountant Bloggers Were Doing It for the Forces of Good

Thumbnail image for integrity.jpgThe gamut of accounting bloggers that we’re acquainted with are good people despite their individual proclivities. Things like paranoid fantasies that involve every level of government bureaucracy (we’re looking straight at you, JDA) and perverse obsessions with stilettos that even freak us out (ahem, Francine) don’t make anyone a bad person, just well, weird.
That being said, it was only a matter of time before an accountant/blogger actually turned out to be criminal*.


Russ Fox at Taxable Talk:

About a year ago I discover a tax blog called Apirl15.com. I doubt we’ll be seeing any more of this blog; according to an affidavit from an IRS Special Agent, the proprietor of the blog has admitted to embezzling $8.5 million.
William Murray, a CPA from Sacramento, allegedly told his clients to pay their taxes through a “trust account” system. This “service” would help the clients and make things easier for them. Mr. Murray also allegedly had clients send money that he would allegedly “loan” to other clients.

William “No, not Bill” Murray used the client money for the run-of-the-mill stuff: cars, houses, entertainment (i.e. hookers, llelo), plus it’s alleged that he’s a degenerate gambler. A model citizen really.
Despite this blow to the accounting blogosphere image, you can sleep well knowing that if we ever ask for your money it will be used for the purposes of providing you with the finest accounting rag news publication possible. There are reputations at stake.
April 15th No More [Taxable Talk via Tax Update Blog]
*You were a criminal before you started blogging, Sam.

An Opportunity Lost

Thumbnail image for Holly.jpgGang, we’re a little upset about something today. Last week we told you about something that had the potential to turn awards for accountants on its green eyeshade wearing head.
Yes, we’re talking about the doomed Deloitte ballot sent out by Holly Leam-Taylor. Today would have been the day that she had sent out the results of her sluttiest future partner, hottest old man, et al. awards, if it had not been for her inexperience with sending out superficial emails about her colleagues.
If Holly had only consulted with someone, anyone with experience on such matters, they could have explained that Deloitte is not a place for such “fun” things and that using her work email was not the best way to solicit nominations.
Alas, our request for someone to pick up where Holly left off has been roundly ignored and here we are on a Friday with nothing to share about Deloitte’s hottest men in London.
So far we’ve been unable to track down Holly since her Deloitte email has been obliterated. Holly, if you’re out there, get in touch. We’ll get your side of the story out there. We know you’re fed up but this will be fun. We promise. Anyone else that can put us in touch with Holly, please help. We’re still getting over our disappointment.

More CPA Exam Scores Are Released for the October/November Window

Thumbnail image for fingers crossed.jpgNASBA has announced via Twitter that more scores have been released for the final window of the year. Bad news is that it takes 24 – 48 hours for them to post. Our recommendation would be to jump over to NASBA and spend the next 24 hours refreshing the page until it posts. Or chew your fingernails until they bleed, whatever works for you.
If you end up with an early Christmaskuh gift, please share. If you got coal, also share before you go into the corner sobbing.

KPMG Prolongs the Agony by Releasing Just UK Revenue Results

Thumbnail image for 200px-KPMG.svg.pngThose of you that are dancing on one leg for KPMG’s global revenue results are going to have suffer with the anxiety for awhile longer. We know, we know. We’d love for the whole reporting season to limp into history but we have yet to hear Tim Flynn put his positive spin on this year’s revenue results.
Oh sure, we’re getting teased today by the UK firm and its European parent but this just prolongs the agony:

The UK firm saw revenues fall by 1.6%, to £1.63bn for the 30 September year end.
Profits fell 1.3% to £382m from £387m.
KPMG Europe’s revenues were €3.5bn, a 0.4% decrease on the previous year.
Its joint chairmen said the results were a “creditable performance”.
“We might have hoped for better economic conditions in our second year as a merged firm but rather than put our expansion plans on hold we have continued to pursue a whole range of strategic initiatives that will shape our performance over future years,” said John Griffith-Jones and Rolf Nonnenmacher.

Despite the disappointment Even with this creditable performance, Europe wasn’t without its problems, seeing the tax revenues drop 12%. No worries though, they promise to pull their weight 2010:

After suffering a 12% fall in tax revenues, Griffith-Jones said the service line was set to hold firm with the rest of the business next year.
“We resized the practice, and are fine where we are, [it’s performance] should be much more in line with the rest of the firm – it’s taken the pain.”

That’s the spirit! Lemons into lemonade. Now make with the band-aid ripoff method on these global results. Nobody’s expecting the world. Dump the press release, get a pep talk from TF and get back out there Kylnveldians. Here’s to 2010!
KPMG UK chief lines up modest 2010 growth [Accountancy Age]