Tag: KPMG

Thankfully, Dillard’s Disputes with Audit Firms Haven’t Resulted in Anyone Disappearing into Thin Air

Your mother’s third favorite department store, Dillard’s, has fired PwC as their auditor over a dispute related to the timing of a “tax benefit related to its new real estate investment trust.” The Little Rock-based company replaced P. Dubs with KPMG (who will take every chance they can get to stick it to Team Autumn). Basically the two didn’t see eye on this matter (here’s the 8-K that explains it), Dillard’s asked the IRS for their opinion, who said the treatment was kosher and next thing you know, the audit committee was on the hunt for a replacement.

Anyway, this isn’t really news until you consider the fact that PwC had only become Dillard’s auditor in 2009. Deloitte had been the auditor of the company for 20 years and in many auditor-client relationships, that’s just the honeymoon phase. So that seems a little odd. And couple that with the most recent firing of PwC and you’ve got to wonder what’s the scoop is over at DDS. But all that pales in comparison to this:

In 2008, [Dillard’s] had a dispute with CDI Contractors LLC’s chief financial officer [Ed. note: Link is broken], John Glasgow.

At the time, Dillard’s owned half of CDI. It has since bought the half that it didn’t own.

Glasgow objected the way Dillard’s CFO James Freeman was conducting an audit of CDI. Glasgow disappeared during the dispute and was declared dead [Ed. note: Ditto] more than three years later, although no trace of him has been found.

After Glasgow’s disappearance, Dillard’s restated earnings for several previous years, blaming an accounting error by CDI.

The last thing we want to see are pictures of auditors on milk cartons.

Dillard’s Fires PWC After Accounting Dispute, Hires KPMG As Auditor [AB]

Promotion Watch ’11: KPMG Admits 166 New Partners in the Americas

That’s right boys and girls, 166 new lucky Klynveldians will be taking a seat at the big kids table, only to be poached by PwC in the next 2-3 years. Despite the risk that many of these new partners will trade blue squares for autumnal Atari, John Veihmeyer and Henry Keizer were excited to welcome the newest members of the club:

“These new partners are role models for high performance – with a passion for quality, an unyielding commitment to integrity and outstanding service, and a dedication to helping clients cut through the complexity in this dynamic environment,” said John B. Veihmeyer, Chairman of KPMG’s Americas region and Chairman and CEO of KPMG LLP (U.S.).

“We are very proud of each of these new partners, and we look forward to their continued leadership. We’re especially grateful to the spouses, family, friends, coworkers, and mentors who have played a key role in their development and their career success,” Veihmeyer said.

Henry R. Keizer, Deputy Chairman of the Americas region and Deputy Chairman and COO, KPMG LLP (U.S.) said, “With their steadfast focus on technical excellence, professionalism, teaming and relationship building, these new partners have helped us make great strides in achieving our strategic priorities.

“Their ability to engage and motivate our people has also been critical to our efforts in fostering a high-performance culture – thereby driving the firm and our people to the next level,” Keizer said.

The KPMG press release doesn’t have a breakdown of the numbers but luckily we got our virtual hands on an email that has the breakdown. We won’t name names but it’s probably moot since someone at PwC Experienced Hire recruiting probably has them all on a hit list already. ANYWAY, here’s the breakdown by service line for the U.S. (74 new partners):

Advisory – 26
Audit – 27
Tax – 21

And by line of business:

Information, Communications and Entertainment – 12
Financial Services – 17
Healthcare and Pharm – 5
Industrial Markets – 19
Private Equity – 4
Mid Market – 3
Government/Public Sector – 1
Consumer Markets – 9
Other – 4

Congrats to all the new partners!

[via KPMG]

Comp Watch ’11: Big 4 Starting Salaries North of the Border

There’s been quite a bit of chatter out of Canada recently (Happy Thanksgiving, btw) and we now have some of the details for those receiving offers from 3 of the Big 4.

KPMG is offering $40,800 per year. They claim they will pay over time if you work over 40 hours per week.
PwC is offering $40,800 per year with a 0-15% bonus based on performance.
EY is offering $40,500 per year. No mentions of overtime.

This is for the Toronto offices and these figures are all in Canadian Dollars, which comes out to slightly below $40k USD but with the possibility of overtime, obviously the haul could be a lot more. If you’ve heard different numbers (or any Deloitte numbers at all) for these firms, get in touch or discuss below.

Here’s Some of the Loot Big 4 Firms Are Giving to Recruits (UPDATE) – Even More Stuff

Earlier this week, DWB put out an open call for accounting firm recruiting schwag. Pictures, comments, hell we’d even take your extras but none of you have bothered to email me to get my addy. Your lack of sharing ability will be forgiven but not forgotten, dear readers. Luckily, one recruit out of Toronto sent us a few images of the corporate treasures that Ernst & Young, KPMG, and PwC are tossing to those receiving offers. We’ve laid out the images on the following pages for your viewing pleasure and included our tipster’s thoughts on each.


Apparently this is how the E&Y stuff arrived. Someone needs to work on their bo”http://www.goingconcern.com/2011/10/heres-some-of-the-loot-big-4-firms-are-giving-to-recruits/ey-offer-1/” rel=”attachment wp-att-49718″>


EY offer package – “Cheaply made luggage tag, ball point pen, and passport wallet. A bunch of junk.”

Signing package for EY – EY branded luggage and carry on.

KPMG Offer package – “Dr.Seuss’ Oh the places you’ll go (Party Edition, nonetheless). Neoprene logo computer bag.”

Signing package for KPMG – “No one has received it yet.” UPDATE: Apparently there is no signing package from KPMG, however our tipster did say that the computer bag “was the best pre-signing gift of the three firms, so maybe that’s KPMG didn’t give out anything else.” The House of Klynveld is also throwing a second signing party for the newbies, whereas E&Y and PwC are just throwing one.


Offer package for PwC (not pictured) Now on the following pages – “PwC – PwC branded cookies, $50 prepaid AMEX credit card, hand signed PwC card.”

Signing package for PwC – “Choice between two options. (1) Backpack, binder, coffee mug. (2) Gym bag, water bottle, umbrella.”

PwC Signing

This recruit told us that he’ll be accepting with PwC but didn’t elaborate on whether he was choosing the coffee cup or the umbrella but did say that PwC is coming on pretty strong to those receiving offers:

Another student who has offers from both EY and PwC received a call from the CEO of PwC to ask her to join PwC. Now I wish I hadn’t signed yet, so I could have talked to him.

Choose wisely, grasshoppers.

That cookies looks repulsive but our tipster says that “It’s soft and looks amazing.” Right.

Silvercorp Metals CEO Reminds Everyone That They’re a ‘Real Company’

As we’ve discussed, Silvercorp Metals hasn’t appreciated the anonymous letters floating around the Series of Tubes accusing the Canadian miner of accounting fraud and has stated that, save their assets in China, “this wouldn’t be happening.” What the company would really like is for these jerks to show themselves and cooperate with investigators. But until that happens, Silvercorp hired KPMG to poke around to calm all the fears out there. According to reports, the House of Klynveld will have a report out soon but in the meantime, Silvercorp CEO Feng Rui will address everyone who thinks that his company is just a bunch of Tonka trucks in a sandbox:

“We’re a real company and will fight against shorters and distorters,” Feng Rui, Silvercorp chief executive officer, said today at a meeting in Beijing.

Furthermore, the auditors in this matter, Ernst & Young, have carried out their duties to a T and if you think some bullshit letters are going to cause them (or Feng & Co.) to do things differently, you’d be wrong:

“Our auditing doesn’t have anything wrong, the allegations are fabrication,” Feng said today in an interview on the sidelines of the meeting.[…] “The allegations won’t prompt us to make any changes in the process of financial reporting and auditing,” he said

Frankly, it’s embarrassing that they even have to address this but you’ve given them no choice.

Silvercorp Says KPMG to Issue Fraud Allegation Report ‘Soon’ [Bloomberg]

KPMG Is Going to Buy Itself Some Indentured Servants in the UK

There’s nothing like buying your loyalty. I’m not saying Big 87654 programs like this aren’t somewhat good for the morale and worth the firms’ dime(s) not just to buy loyal servants but also to help prepare future capital market servants in general but it’s sort of a scam. Sometimes, these education programs don’t work out and the slaves revolt, as happened with this young man in an undisclosed market somewhere in a state that ends in tts.

Anyway, KPMG wants to recruit a whole bunch of 18 year-olds into its work/school program (across the pond they call this a “scheme,” which makes it exponentially more funny) by next September. The House of Klynveld will pay these kids’ tuition fees and pay them a whopping starting salary of £20,000 ($31,460 in Fed Funny Money).

Here’s a brief and completely related link to an article on indentured servitude: “Servants typically worked four to seven years in exchange for passage, room, board, lodging and freedom dues. While the life of an indentured servant was harsh and restrictive, it wasn’t slavery. There were laws that protected some of their rights.”

Sound at all familiar?


According to The Telegraph, the course opens its doors to 90 students for the first time this month, with two-thirds of entrants coming from state schools or colleges, compared with around half from the traditional graduate entry route.

More than 1,000 would-be ex-KPMGers applied for the program, and that number is expected to rise year over year. They say that’s because tuition is up to £9000 a year (about $14,153 but there’s a Fed meeting fast approaching, that number is subject to change) but my guess is mediocre performers need jobs and accounting isn’t that bad of a gig for some of them. I’d also guess that a few of these program “graduates” actually go on to have successful careers.

If you remember, one former participant of a similar program once (allegedly but eloquently) wrote to his former colleagues “I’m pretty sure it would have been easier to escape from Auschwitz than a YMP contract. I knew from the second week I start here that this wasn’t going to work out.” Ernst & Young’s Your Master Plan nurtured one hell of a profanity-laced, poetic farewell email, a true testament to its power. One requirement for the program was advanced written and verbal communication skills… it’s a wonder Uncle Ernie didn’t call Craig immediately and ask him to come back with a fat raise.

Anyway, the head of audit at KPMG told the Telegraph “At a time when many young people, graduates included, are finding it difficult to gain employment, this programme represents a credible alternative to mainstream university education and provides an attractive route into employment for talented students.”

I highly – and I mean highly – recommended checking out the comments on the Telegraph article, as it finally identifies the link between public accounting and anal rape that we have been trying to pinpoint for years. It’s the one that starts off with “If you work at a large accounting firm, beware, it is perfectly acceptable for the large accounting firm to tell massive lies about you such that you will be butt raped repeatedly…” You can’t miss it.

Someone Is Curious About All Those KPMG Employees Working on General Electric’s Taxes

You may remember earlier this year when The New York Times broke a little story about General Electric’s tax savvy ways and the best tax law firm the universe had ever seen (aka the GE tax department).

The report�������������������� href=”http://www.goingconcern.com/2011/03/jon-stewart-reacts-to-ges-tax-savviness/”>a few people to get bent out of shape because the Times said GE was enjoying $14.2 billion in profit while “claim[ing] a tax benefit of $3.2 billion.” What that “benefit” really entailed was a mystery but many people jumped to the conclusion that it was a “refund” and ProPublica (possibly a little peeved that they got scooped) tried to set the record straight on the Times story.

Despite all the back and forth, everyone was pissed at GE. The company lost a Twitter joust with Henry Blodget and then a bogus press release went out claiming the company was returning the “refund” of $3.2 billion and the Associated Press ran it. Slightly awkward.

Francine McKenna also did a write-up on KPMG’s role in this little soap opera, as the firm has been the auditor for GE since Bill Taft was maxing out the White House bathtub.

The latest twist comes from a tip we received earlier about a “Preservation Notice” sent to all KPMG employees yesterday from the firm’s Office of General Counsel (“OGC”).

URGENT TARGETED PRESERVATION NOTICE: GENERAL ELECTRIC’S LOAN STAFF ARRANGEMENTS
Please be advised that until further notice from KPMG LLP’s (KPMG or firm) Office of General Counsel (OGC), you are hereby directed to take all steps necessary to preserve and protect any and all documents created or received from January 1, 2008 through the date of this Notice relating or referring to the loaning, assignment or secondment of tax or other professionals to General Electric Company and its direct and indirect subsidiaries, affiliates and divisions (collectively “General Electric’s Loan Staff Arrangements”).

As Klynvedlians know, these preservation notices come out so often that you barely even notice them. When you do notice them is when the partner in charge of your team informs you about it before it hits your inbox. What follows is basically the biggest CYA exercise you’ve ever seen. They roll in giant dumpsters and every last scrap of paper you’ve ever written on gets throw in and eventually it gets shipped off to OGC. Your life doesn’t really change all that much other than you’re not allowed to delete another email EVER. At least that’s how I remember it.

ANYWAY, this notice seems a little different. Why exactly? Here’s a excerpt from McKenna’s post:

In defiance of [Sarbanes-Oxley] provisions, KPMG – GE’s auditor – provides “loaned staff” or staff augmentation to GE’s tax department each year. These “temps” perform tasks that would be otherwise the responsibility of GE staff. Sources tell me KPMG employees working in GE tax have GE email addresses, are supervised by GE managers – there is no KPMG manager or partner on premises – and have access to GE employee facilities. They use GE computers because the software required for their tasks is GE proprietary software.

This type of “secondment” to an audit client is never allowed. KPMG should know better.

YEESH. So any documents going back to January of 2008 that relate or refer to someone being assigned under this allegedly dubious arrangement must be preserved. You don’t have to be John Veihmeyer to know that’s a METRIC ASSTON of documentation. It’s not that GE’s tax needs are seasonal; they’re more like “perpetual” or “infinity times infinity.” A company with the best tax law firm already in house that also has an arrangement with a their auditor to throw a few more people at the problem indicates that they are working on this shit 24/7. For KPMG, it amounts to a nice little revenue stream and it keeps lots tax staff busy throughout the year.

But what caused the notice? That’s the question. Our tipster speculated that the PCAOB and SEC might be up to something but per standard operating procedure, neither will confirm nor deny the existence of any investigation or inquiry. KPMG spokesman George Ledwith did not respond to an email seeking comment.

Like we stated previously, these preservation notices are a dime a dozen but because this one deals with General Electric and presumably their tax compliance it qualifies as outside the norm. If you’re in the know or know of someone in the know or have anything else to add, email us or comment below.

New KPMG Associate Wants to Know What the “Deal” Is with Working Mothers

Yesterday we discussed the plethora of accounting firms that are pro-mom, according to Working Mothers. It seemed like a pretty simple idea – treat moms good = win; treat moms bad = Christ, what kind of hellhole firm are you running? Despite this elementary idea, there still is some questions out there:

GC,

On the subject of working mothers…what’s the deal with that? I’m a first year at KPMG and there is another first year who is already pregnant and taking maternity leave soon.

My question is, does she really get promoted on the same schedule as the rest of us? I get the importance of allowing some flexibility for working moms but does it make any sense to treat someone the same as the rest of us when it comes to raises and promotions when they’ve missed out on all the work? I’d love to hear what other readers have experience with this.

Thanks,

KPMG First Year

Well, the “deal” with working mothers is that not having policies that allow them to pursue a career and having a family is what I like to call “doing shitty business.” As to your specific question, the details aren’t clear. It’s not as if she will be on maternity leave for 6 months. KPMG offers up to 9 weeks of paid maternity leave, according to the firm’s profile on WM. That means that there are 43 other weeks (that assumes no PTO, obv) that she will be working. That doesn’t really qualify as “miss[ing] out on all the work” as you put it.

Those who are evaluating her performance should have a pretty good idea whether or not she’s capable of being promoted. Besides, it’s a jump from A1 to A2, not exactly a huge change in responsibilities or expectations. Furthermore, your raise from A1 to A2 isn’t going to be anything to write home about so getting worked up about whether or not she’s getting the same 11% bump as you isn’t worth it.

KPMG Remembers 9/11

Yesterday was the tenth anniversary of 9/11 and memorials were held all over the country. Thousands of KPMG employees volunteered at over 200 non-profits to mark that tragic day including over 100 at PS 161 in New York and 70 at the wreath-laying ceremony at the Pentagon in Washington, D.C. Nothing more really needs to be said other than kudos to KPMG for their “Service of Remembrance.” Drop your own remembrances in the comments and if your firm marked the 10th anniversary in some way (aside from t-minus 4 days until the corporate tax filing deadline), let us know below or email us. [KPMG]

KPMG Can’t Get Rid of the Countrywide Rash

As you probably remember, Countrywide Financial once owned a lot of shitty mortgages. This wasn’t clear to many of the company’s investors so when the things turned sour, lots of those investors lost boatloads of money and then Bank of America came in to pick up the scraps. KPMG was the auditor of Countrywide and the shareholders sued both companies because, gosh, that’s basically what happens when a bunch of money is lost for no good reason and you had a front row seat for the action. Accordingly, the two firms settled with CTW shareholders last year for $624 million. KPMG, for its part, chipped in $24 million. That’s rumored to be in the ballpark of what John Veihmeyer spends every year on Notre Dame gear, so the firm was probably thinking it got off pretty easy. Unfortunately, things are just getting started since other countries hadn’t had a chance to jump into the mix.


From Zero Hedge:

Norway’s Government Pension Fund, which is another name for its Sovereign Wealth Fund, has just announced it is suing Bank of America for mortgage fraud. Not only that but it is also going after Countrywide, obviously, but far more importantly, is also suing KPGM [sic], the auditor on the Countrywide transaction, and, drumroll, ole’ Agent Orange himself [That’s former Countrywide CEO Angelo Mozilo for those of you not up to speed].

So what, you say? Norway is just some Scandinavian wasteland with a lot of blondes and the occasional psychopath? Not the point!

[J]ust like the US lawsuit spigot opened ever so slowly at first, it is now gushing, and is absolutely certain that every company (ahem insolvent German banks) that ever bought a mortgage from Countrywide, Merrill and Bank of America will serve the local branch of the bank with a summons over the next month.

In other words, this little breakout may turn into a full-fledged epidemic.

Bank Of America’s Legal Woes Go Global After Norway’s Sovereign Wealth Fund Sues For Mortgage Fraud [ZH]
Also see:
The Fund suing large bank in the U.S. for fraud [DN.NO (Beware, the translation is brutal)]

Analysis: If Your Accounting Firm Was a College Football Team

Pack up your white pants and seersucker suits – Labor Day has come and gone which means only one (actually important) thing: college football is back. You NFL loving freaks can have your Sundays of Hollywood-produced sport; I believe the good Lord created Sundays solely as a recovery day for college football fans. Well, for that and drunk brunches, of course.

It is no secret that good ol’ Caleb is a vehement Husker fan,he only reason he’s given me the green light to churn out a post comparing your respective accounting firms to the likes of fried-butter-eating college football fanatics.

I can only pray that my effort will inspire the semi-regular infusion of sport, accounting, and bantering commenters around here, so I give you the “Accounting Firms If They Were A College Football Program” top nine rankings. Grab your body paint and come along for the tailgate.


Firm: Deloitte
Team: Oklahoma Sooners
First Take: Both are always in title contention but seem to shit the bed come Pay Day. Deloitte raises are on par with the Sooners’ BCS bowl record under Coach Bob Stoops (2-8).
Keep it in the Family: During Hurricane Irene, Deloitte encouraged employees to bunk up together, obviously a practice long in use in Oklahoma.
Sputter, Sputter: Sooner alum Blake Griffin jumped over a KIA at last year’s NBA slam dunk contest. A certain Deloitte consultant also prefers a certain overused and washed out mode of transportation…

Firm: PwC
Team: Oregon Ducks
First Take: They’re in the news for legit (raises, hurry-up offense) and controversial (fireside chats, BCS infractions) more often than you’d like. Also, their team colors are atrocious.
Hotties Everywhere: PDubs has Ireland. The Ducks have these ladies.
Just Pick One Already: PwC doesn’t churn out new logo/uniform re-designs as often as the Ducks but both cause a stir when they do. Whether the changes for either team result in better winnings has yet to be seen.

Firm: Ernst & Young
Team: Ohio State Buckeyes
First Take: You hate going up against them, but even if they do win, you’re thankful you’re not affiliated with their alumni.
Compliance? What Compliance? Former coach Jim Tressell thought it best to let a tattoos-for-autographs program run its course. E&Y is apparently doing the same with this minor Sino-Forest sitch.
Questionable Mascots: The poisonous nuts of the Midwest are no match for the Black & Yellow guy.

Firm: KPMG
Team: Notre Dame Fighting Irish
First Take: Still talking about that big win in 1983. An exodus of leadership. The general public has gone from loathing them to just feeling bad for them. Give it up, you’re no longer the powerhouse you (thought you) once were.
Johnny Be Good. The Chairman is also a proud ND alum. Need we say more?
Empty Promises: We’re going to win it all! We’re going to hire thousands!

Firm: Grant Thornton
Team: Northwestern Wildcats
First Take: As hard you they try to be tough, they’re still nerds dressed in purple.
Off-the-Mark Advertising: GT – the lack of aligned teeth took some bite out of your full-page WSJ ad. And Dan Persa for Heisman – really? Your mom for Heisman.

Firm: Rothstein Kass
Team: Boise State Broncos
First Take: First it was a feel-good story but their continued rise through the ranks is pissing off the traditionalists.
The-Anybody-But-The-Other-Guy- Vote: Whether it was Boise’s ridiculously fantastic win over Oklahoma years ago in the Fiesta Bowl or RK’s dominance in the Going Concern March Madness pool, oftentimes their fan support stemmed from us just hating their competition more.

Firm: McGladrey
Team: Missouri Tigers
Only Take: You’re supposed to be on this list; we know you belong on this list; we don’t know what you’ve done to deserve being on this list.

Firm: BDO
Team: Penn State Nittany Lions
First Take: Your parents would have been pleased if you went there but better options awaited you.
Race to the Retirement Home: JoePa is 84 and coaching from the press box. Rumor has it Jack Weisbaum calls the shots from his personal tanning bed.

Firm: CBIZ/Mayer Hoffman McCann
Team: University Buffalo Bulls
Only Take: You think you’re a big deal, but really everyone uses you as an exhibition punching bag.

How’d we do? What team best parodies your firm? Share it in the comments below.