[Updated with additional information about job cuts at BKD CPAs & Advisors.] So since we posted this article on Thursday afternoon, we’ve received a lot of information about what’s been happening at BKD CPAs & Advisors, the 13th largest U.S. accounting firm in INSIDE Public Accounting’s 2019 ranking. Yes, some people have been let go, […]
[Updated with additional information about the layoffs at Weaver.] The other night while I was trying to get some more information about the layoffs at Crowe and Baker Tilly, we got a tip saying that another top accounting firm had just laid off 60 employees. I hadn’t seen these layoffs discussed on Reddit or Fishbowl, […]
[Updated with additional information.] We got a couple of tips late on Tuesday night about layoffs and pay cuts that occurred at two more accounting firms earlier this week: one is a global accounting firm with U.S. headquarters in New York City, and the second is a prominent firm in the Southeast. Because the tipsters […]
UPDATE: Nice work, tipsters. Grant Thornton released the following press release today confirming the story we broke yesterday (see below line break): The Partnership Board at Grant Thornton LLP announced that Bradley J. Preber will serve as the firm’s CEO. The board appointed Preber to the role following a comprehensive search process, and the firm’s partners and […]
Fresh from the rumor mill (and by the rumor mill we mean Fishbowl) comes word that 90 people got the chop at Deloitte Digital. We haven’t gotten any official confirmation on this so if anyone would care to confirm, feel free to give us a shout using the contact information at the bottom of this […]
By now, everyone has heard the news we broke Monday afternoon that Mark Weinberger is noping on up out of his role as EY global chairman and CEO, effective June 30, 2019. We were able to secure an interview with him that we’ll share with y’all soon, but in the meantime, let’s speculate wildly on […]
Office gossip, it’s the worst, amirite? You know what else is the worst? Jason Bramwell’s secret Louboutin collection. I heard from Liz in marketing that he rocks those size 13 stilettos like no one’s business when his wife isn’t watching. True story. OK, that isn’t true and Liz never said that. But that’s how easy […]
The benefits to working for a Big 4 firm can be embarrassing sometimes. It’s just not things like weeks of PTO that you’ll never use or pet insurance, but also the day-to-day perks that come along with carrying the water for a behemoth professional services firm.
Here's some not-so-fun news that popped up on Reddit earlier with regard to Deloitte telling some tax people that their services are no longer needed: Couple dozen in Chicago, and many more in the local practice offices. Staff to Senior Manager, no-one is insulated. The OP states further, "Hearing rumors that it will be a […]
Here's one from the mailbag: Big 4 in Houston and Dallas have been laying staff off due to "performance reasons." I wonder if this is going to trickle down to other regions as well given the declining oil market. Good question! Here in Colorado, big names like Anadarko and Encana have shed jobs but there […]
It was bound to happen at some point. I thought we'd be able to take the high road on this Ashley Madison data dump mess, but NOOOOOOO, here we are digging around in people's private lives. It is the internet, after all. Really all we have for you is an anonymous tipster who dropped us […]
It had been a while since we've heard a good M&A rumor so we were excited to get a tip last week about BDO acquiring UHY. Just this week, we've received another tip from a reliable source that BDO would be announcing its acquisition of UHY "very soon." Then, unexpectedly, this morning we learned that […]
Have you ever trash talked in IM at work? Have you ever been paranoid enough about it that you asked Reddit if they have ever trash talked in IM and gotten in trouble for it? This guy did. "I feel like I have no filter when I get on sametime," he said. Surely you all […]
As we found out recently, the engagement partner at EY was (probably, allegedly) banging the (now former) Chief Accounting Officer and Controller at the client (Ventas). Well, we don't know if they were necessarily getting it on at the client's but you get the idea. Due to that "inappropriate personal relationship," Ventas fired EY — […]
When we first started hearing rumors of a Rothstein Kass KPMG merger in February, one of the items we were sent along with tips that an acquisition would be forthcoming was a letter from RK CEO Steve Kass that went out to staff in July of 2013. A highlight:
From the first moment the Rothstein Kass KPMG rumors started circling the bowl, it was pretty clear that RK's golden child is its hedge fund practice. Surely KPMG wasn't interested in the deal just so they could acquire Rothstein Kass' novelty cell phone stand named Trusty. Well, Audit Analytics put things in handy chart form […]
Hedge Fund Alert is subscription only so we don't have much but we do have this: After months of rumors, big-four accounting firm KPMG has reached an agreement to acquire Rothstein Kass — a deal that will make KPMG one of the top three hedge fund auditors. The deal could be announced within a week […]
Well, this is an interesting twist to the Rothstein Kass KPMG merger drama. We're glad to see our friends at Accounting Today getting on this: For the last few weeks the accounting profession’s rumor mill has been buzzing with stories that Rothstein Kass is about to be acquired by KPMG. Is this all just a […]
Over the weekend, we began hearing rumors of a KPMG/Rothstein Kass merger. Rather, a somewhat upset individual sent us this:
This sounds unfortunate. From the always fun tip box: [Well-known CPA firm] is working hard to maintain top-10 firm status. One unfortunate office on the East coast is enjoying a Monday with no air and toilets that won't flush. Apparently the whole building smells like sewage, which is a slight improvement over the usual busy-season BO. We're unable […]
Note: this story came to us from "a friend" of a test taker but it came with a photo we're going to have to heavily censor and sorry in advance to the victim but we just had to given the ridiculousness of this claim. Is Prometric truly this heartless? Well, given past incidents, I guess […]
Over the weekend, we received quite the disturbing item in the ole tip box. Our tipster did not leave an email address so we cannot possibly verify this but wanted to share anyway: Something very interesting happened to me during busy season. An entry level threatened to kill me. He wrote a note saying he […]
UPDATE — A couple of reports out of the Milwaukee press have confirmed our tips from yesterday. We've also received the text of two emails, one from Ms. McMasters and one from CLA's other CEO, Gordy Viere that communicate the decision to the firm's employees. They appear on the following pages.
A couple of tips came in earlier today that CliftonLarsonAllen's co-CEO Krista McMasters is retiring. If she were to step down then it stands to reason that Gordy Viere, the CEO of CLA Holdings would be the head of the firm. We're still trying to confirm that this is in fact the case but if true, that would mean all of the CEOs (managing partners, or whatever else they might be called) of the 25 largest firms would be led by men.
Yesterday afternoon, right about the time I couldn't read another word about PwC's love of CAKE, this tip came through at approximately 7 pm ET: Tim Ryan just finished up an "emergency" call with all partners and managers about this. Call began at 5:30 EST. Mr. Ryan, as we noted this morning, was quoted in Floyd […]
The new space at the AON Center had cause some previously rumored krankiness and unfortunately that has yet to subside: The new office space layout at Chicago KPMG (AON Center) is leaving many without a work space and people have to work in the kitchen areas. We moved in August and the are still "working" on it. Obviously, anyone […]
Digging through the mailbag, I found this little gem: I'm not surprised broker dealer audits are bad. I used to be on a high profile one and let me tell you I spent so much time to trying to understand the business. At the end of the day, you get a general idea as to the operations BUT […]
We all know that when you're in the throes of busy season, a key to an effective team is having people spend as much time at their desks as possible. When the pressure is on, even spending a few minutes to take in some natural light or fresh air could mean the difference between a […]
In the past week, we have received several tips about an Ernst & Young OMP who was recently demoted to a less-BSD position. While that's the reality, we're certain that any internal messaging took quite a different tone with the partner in question ("PIQ") "transitioning to a client facing role" or some other euphemism for […]
Last week we heard some interesting news from a reliable source on a shakeup that will impact the regional and leadership structure of BDO. As you know, the next CEO of Bravo Delta Oscar will be Wayne Berson, the current head of assurance for the firm's Atlantic region. As the firm's CEO-elect, he is putting […]
The word on the street is that the pace of accounting firm mergers will increase in the coming year. That's pretty fun for all of us because we occasionally like to spoil the surprise for everyone. Plus, the new name game is everyone's favorite. In the past few years, there have been several notable mergers […]
Following the news that the IT Advisory group could possibly force some professionals into the underperforming category, I had the following text message exchange yesterday with a source at KPMG that I'll refer to here as Rudy. Rudy: Did you hear about the layoffs? Me: Nooooo. I just posted about the possible layoffs in ITA […]
A tipster informs us that attrition for the IT advisory group was not as high as expected, which poses a bit of a dilemma: I heard that some of the performance managers are being instructed to give their staff 4 and 5 ratings, as there weren't enough in those buckets. Keeping in mind that turnover […]
This just in: Just wanted to let you know that there will be a McGladrey webcast from Joe Adams tomorrow. Last time we checked in with McGladrey, they were experiencing technical difficulties that drew the concern of many employees. Luckily, it was all a mix-up and things have, as far as we know, returned to […]
From a tipster who is on his way out: A partner told me that raises for top performers will be in the 20% ballpark. Don't know if this is true. It was from a very Senior Partner in an Upper Midwest (not Chicago) office. He could just be talking. This is a Senior Associate 2 in the […]
Earlier today we were informed that Deloitte CEO Joe Echevarria was a commencement speaker at the University of Miami, his alma mater, this morning. A quick search confirmed Joe E's gig, however, our tipster had this to add: Said he had just come from a meeting with SEC, didn't mention what it was about, lol. This could […]
From the mailbag: Heard that Patrick Kane, notorious party-animal winger for the Chicago Blackhawks, showed up at an end-of-busy-season party for one of the Big 4 this past Thursday. Can anyone confirm or deny? We do know that Kane was in fine form in Madison on Saturday, so he's definitely not on the wagon. Whether or not he […]
As readers of this website well know, occasionally we like to report on merger rumors that are floating around the accounting world. Most recently we reported that Eide Bailly and Wipfli were going to make a very handsome couple as EB Wipfli only to have the deal fall apart a little over a month later. […]
This just in: Rumor has it, GT is getting rid of the CPA exam requirement to be promoted to senior… GT is one of two firms (that we explicitly know of) that currently requires audit professionals to pass the CPA exam in order to be promoted. If this particular tidbit is true, then it would be […]
This is from earlier in the week and there's no official word about the pest in question but our tipster insists that it was edbugsbay: It was brought to our attention yesterday that there was a potential insect issue in a small location on the 24th floor of our 60 Broad Street Office. We took […]
Apparently a big shot audit partner has seen one too many of his tax brethren running for the door: Supposedly a high-ranking audit partner at [top ten firm] sent an email to the entire partnership in which he blasts the national tax leader for spending the firm's money on management retreats when he should […]
Last month we heard a rumor that Milwaukee-based Wipfli (I've been informed it's pronounced WIFF-lee) and Fargo-based Eide Bailly were in merger discussions. Supposedly, Wipfli partners voted on the merger right before Christmas but our source said that prior to the vote "[Wipfli] announced internally that they are merging with Eide Bailly," and that the […]
I hear from a trustworthy source that exiting Ernst & Young CEO Jim Turley was recently trolled by an eager member of Uncle Ernie's family looking to steal the throne in Canada. Someone else trolling him – asking how he can apply for his job. You know he's retiring in 2 years? So during the […]
This time of year, many a capital market servants look forward to blowing off a little steam at the annual holiday (aka Christmaskuh, Festivus, et al.) party. Last year, the festivities made a comeback after a couple of years of more restrained celebrations. Ernst & Young’s New York office even threw a party at Cipriani’s the week Andrew Cuomo handed down his civil fraud lawsuit. And in case you’re skeptical that the get-drunk-dance-like-an-idiot-go-home-with-a-co-worker party have made a comeback, this post from Socialite may be the latest proof:
Want to talk about “work hard, play harder“? The auditors, tax specialists and consultants at PwC have got that down to a science!
2000 people + Marriott Coply+ open bar + gambling + dancing = Ballin’ time
We’ve been to some corporate Holiday parties in our day, but this one definitely takes the cake. And why wouldn’t it… we’re guessing they threw down well over $500K to host that.
Since we’re not hip to the costs of corporate holiday ragers these days, it wouldn’t be fair to dismiss this guesstimate outright. And it’s not exactly clear how Socialite got all these details but it sounds pretty similar to the KPMG Christmaskuh party I attended in 2008 (sans gambling) which was the waning days of the big holiday blowout party.
ANYWAY, Socialite then outlines a number of reasons that you, local Bostonian, should be at this shindig next year, including some “Secret Grand Prize Giveaway” which they speculate is “a small yacht” but in reality, it’s more likely to be a pair of cool shoes.
For any mini BoMos in Boston, does this sound like the party you went to? Is $500k in the ballpark or would you put it in the seven figure range? Feel free to speculate at this time. And if your party tops this one, email us the details (or an invite).
Apparently a grip (a half dozen or so) of them have left the firm in the past two months, says a source familiar with the situation at BDO. At least three are supposedly now with PwC (none worthy of P. Dubs press releases) and another two are off to Deloitte in various markets. If you’ve recently jumped Captain Jack’s ship or know of more details for your office, get in touch.
From the mailbag:
Heard this from a Director in the firm: Deloitte layoffs coming. Lists are made…cuts coming soon. Said a lot of it has to do with thinning out the ranks (too many people jumping ship because their level is top heavy and promotion nowhere in sight) as well as letting go underperformers.
As you probably noticed, 2011 hasn’t had much in the way of layoff news with the exception of some support staff that were cut at McGladrey, Grant Thornton, and KPMG. That said, this seems like an opportune time to kick a few people to the curb. If you wait until November, well, that just looks bad.
Keep us updated with any news and if you’re in the know, get in touch.
Maybe we shouldn’t publish this, lest TPTB catch on and close this loophole but as it’s soon to be CPA exam score release season, we figured it might be helpful to share this little trick to get your score early.
Note, word is it only works if you are on your last section and testing in a NASBA state. It doesn’t work all the time and will really only give you your score a day or so earlier than you would have actually received it from your state.
So if you’re waiting for a score now, don’t bother, it doesn’t work until the AICPA releases scores to NASBA, which is supposed to be within a 7-10 day period beginning the third week of September for this quarter.
To try it, follow these simple steps:
1. Go to the CPA exam section of NASBA’s website and select Ohio regardless of which state you are testing in.
2. Choose Apply Now under the “Re-applying for the Uniform CPA Examination” tab.
3. You will be asked if you have an Ohio jurisdiction ID. Choose no and it will ask you if you have a Social Security number. Choose yes.
4. Follow the rest of the prompts, plug in the information it asks you for and if you get the following message, congratulations, the loophole worked and you passed:
We are sorry. Our system shows that you have already passed all parts of the Uniform CPA Examination. If you have questions, please call your Coordinator at the number given below. Please call the number below.
Some have stated that the loophole also works if you’ve failed. If you get in and see the exam section you are checking on not grayed out, that means it’s allowing you to get a new NTS which obviously means you did not pass.
Bottom line: maybe it works, maybe it doesn’t. If you’re driving yourself insane refreshing your score page waiting for an answer, maybe it wouldn’t hurt to try at the end of the month but you’re really only getting the news a few hours earlier than you would have if you just waited.
Earlier this week, we were tipped off about a hiring freeze of Client Service Support (“CSS”) professionals at KPMG. Our tipster also indicated that a “major reorg” was happening but did not elaborate. For those not hip to the House of Klynveld vernacular, this is your HR, Marketing, Ops, IT, Admins, et al. Regardless of their overhead status, they make your lives infinitely better. But for now, it sounds like the doors to any newbies is closed.
This rumor was confirmed by another source who simply “heard there was [a freeze in place]” but had no details. If you’re in the know, please email us. Emails to KPMG’s communications team were not immediately returned, most likely because they were immediately deleted (that is speculation on my part).
SO! Since we don’t have much to go on, we’ll take this opportunity to present some theories:
1. The response to the Early Career Investment Bonus program has been better than anticipated and there is concern that there won’t be enough money to pay these all-of-a-sudden loyal employees. Accordingly, “the help” won’t be getting any additional resources.
2. Settlement negotiations have begun in the sex discrimination lawsuit and things are not looking good.
3. John Veihmeyer is just toying with everyone because “This is Notre Dame’s year,” and plans to lift the freeze after the Irish win their first game.
4. Two words: Omaha Steaks.
5. Your ideas.
Hot off the grill from Mickey G’s:
Some people let go at McGladrey. Heard it was like 15 [UPDATE: SEE BELOW] from the corporate marketing department and a few others. Some head scratchers going on. Moved people around including a few changes that have people baffled. People who have no business being promoted promoted.
Earlier in the summer, we heard a rumor about layoffs in the Northern Plains region and at the time our tipster said that the firm “spread[s] the terminations over months instead of doing them all at once,” which has more or less become the norm. ANYWAY, we’re trying to get some more info from tipsters and the firm but in the meantime, drop your knowledge below or get in touch.
UPDATE: A McGladrey spokesperson has informed us that the firm did recently “announce a restructuring of our marketing department to better align with the organizational structure and business objectives outlined by our firms more than a year ago,” adding, “This resulted in the elimination of 11 positions within the marketing organization.”
The head scratching was not specifically addressed. Carry on.
We’ve received several short, anxious emails (presumably all from Uncle Ernie’s nervous camp) tipping us off to the fact that E&Y comp discussions are going down this week, so it must be true. Of course, this post is useless without actual comp numbers, which we’re sure you’ll give us as soon as you have your sit-downs.
Hi Going Concern –
To give you heads up, E&Y comp and promotions dicussions [sic] are happening this week (they’re happening today in my office). Perhaps it’s a good time to open the new thread on the topic.
Great, so does this mean the Ohio and Michigan crews have already packed up and are ready to bail if they get anything less than whatever it was they are holding out for?
Rumors so far are that raises will be in line with last year’s, which were not at all disappointing considering that we are still (not technically) in a recession, not to mention all that Lehman drama the E&Y lawyers are still hashing out. Too soon? Anyway, as usual, you’re welcome to entertain each other with disparaging comments about the size of your, er, comp packages until we hear news on actual numbers.
Update: Looks like some pretty good numbers are rolling in but please, for the sake of your fellow EY brethren, if you want to share your comp info, be sure to at a minimum include where you are (general metro or region is fine), what service line you are in, your rating (hint: this is a number) and, of course, the actual new pay and bonus number (if any).
This just in:
I have been talking to a variety of people at E&Y from several offices in Ohio and Michigan. The word from them is that there is going to be a significant movement of people once compensation info is passed out. It’s kinda conflicting since the rumor is that raises should be around what they were last year. Not sure what to make about it.
As you recall, last year’s raises and bonuses at Ernst & Young were competitive with PwC, which came as a pleasant surprise to everyone at Black and Yellow but understandably this rumor has our tipster in a flummox. Of course, this could be limited to the Ohio/Michigan area but it’s worth seeing what the Turley’s Troops in other areas are hearing. Share below.
This just in:
I’m hearing rumblings that Deloitte might be the next in line to adopt a PwC-esque transparent raise structure. I don’t have the exact information, but I’ve heard something about making 1.5x your current salary in 3 years.
As you may remember, PwC announced “exciting changes” to their compensation structure back in May that involved three major parts: 1) Transparency 2) Earning Potential and 3) Milestone Awards. The multiple of 1.5x increase in three years is included in the roughly what PwC laid out in their “Total Rewards” document.
This seems to be a pretty typical move from Deloitte, who is notoriously conservative relative to its autumnally-hued rival. I’m sure if this plan is carried out, they’ll attempt to add in their own quirks to differentiate themselves but I’d be surprised if amounted to anything significant. If you hear any more rumors, contrary or supporting of this latest news, get in touch.
From the mailbag:
I am considering becoming an experienced hire at PwC, however I have heard some strange things and can’t seem to get a solid angle on them. I have heard that PwC (still) doesn’t let you expense lunches when traveling. I’ve also heard that PwC is still on Windows XP with Office 2003, Lotus Notes email and using Lenovo ThinkPads. Can you please help me confirm or deny these rumors and add some color around them? Also, are there other things at PwC that I should be wary of? Is PwC the new KPMG?
Concerned Potential Recruit
To the best my knowledge, Concerned, I’ll address these one at at time:
1. I have heard that PwC (still) doesn’t let you expense lunches when traveling. – True. PwC does not allow you to expense lunches when traveling, although it’s my understanding that a “business lunch” is reimbursable.
2. I’ve also heard that PwC is still on Windows XP with Office 2003 – Partially true. P. Dubs is on XP but is running Office 2007.
3. Lotus Notes email – True. There were some layoffs of LN developers way back in the fall of ’09 but it’s our understanding that they still run it.
4. Lenovo ThinkPads – True. You were maybe expecting iPads? Those are for bonuses only.
5. Are there other things at PwC that I should be wary of? – I’d start here.
6. Is PwC the new KPMG? – Um, no. Unless you’re consider all the KPMG partners they’ve picked up makes it the “new KPMG.”
This just in:
Here’s a spicy meatball for you guys. My buddy works over at [Chicago Firm] and he was so upset when he got his $700 raise and $250 bonus as a Senior 1. Not sure if it’s performance based, but a lot of [Chicago Firm] peeps aren’t thrilled right now.
Will that even cover the rent?
Adrienne, who is hidden away in an undisclosed location (read: Boston) was tipped off last night with the following and forwarded it on to me:
Rumor has it that PWC rescinded offers for September 2011 hires. I went to GC to read the inside scoop but didn’t see anything. Maybe this is a totally false rumor or a lead….
Answer: Totally false rumor.
Yes, believe it or not, we happily debunk rumors around here when possible. Of course this can only occur when people with the means to help us discredit the rumors are cooperative. We spoke to someone in the know at PwC who informed us that not only is this rumor false, P. Dubs is asking some of their new advisory hires to start in July because there is so much work. Now, it’s possible that there are a few isolated incidents where someone’s name shows up in the police blotter and an offer may get pulled but our source says there haven’t been any reports of those and definitely nothing “systemic.”
Of course if you’ve got evidence to the contrary, we’d welcome you to get in touch with us and good luck to those who choose to end their summers/lives two months early.
From the mailbag:
The last few years KPMG announced manager promotions by this time, but I haven’t heard a peep from anyone so far. Have they changed the timing?
Digging through the archives, it’s true that around this time last year, chatter around the announcements of promotions at KPMG had begun but as our tipster said, so far it’s been strict Radio Station silence. Last year, details were rolling out through early June, so it could be that they’re dragging it out for effect.
Anyway, one rumor that we just heard is that in some KPMG offices, SAs up for manager are being asked to interview for their promotions. Personally, I’ve never heard of this but considering the need at SA, it would be a strategic way to hold some people back, chalking it up to “he/she didn’t interview well” versus the cryptic “he/she isn’t ready.”
If you’ve recently gotten word on promotions in your office, heard anything about these interviews or are simply in the know, email us the details and discuss below.
UPDATE:This just in:
PA leadership told us manager promotions would be approved on 5/20/11, with announcements in the following weeks after the approvals. haven’t heard anything about the ‘interviewing’ but i’m not up for Manager promotion so i guess i wouldn’t know.
Nice. Just in time for the end of the world.
UPDATE, May 26th, circa 12:35 pm:
According to a Klynveldian close to the situation in New York, “they seem to be making calls to those up for manager.”
That’s because a source close to GT has told us “the deal with Moss Adams is dead.”
As for the why, our source told us, “The feedback from the Moss Adams board was that the MA partnership would not adequately support the merger.” Whether or not that’s true doesn’t take away from the fact that MA squeezed by GT in the GC Coolest Accounting Firm bracket and, thus, no MA partner worth their salt would want to join forces with GT and have to decipher hand-written notes from Stephen Chipman.
Despite this setback, that doesn’t mean GT isn’t on the prowl but we’ve got no idea who they might have their eye on, so we’d invite you to speculate on who that might be and get in touch if you know anything.
If you followed last week’s “Role of the Accounting Profession in Preventing Another Financial Crisis” hearing before the Senate Banking Subcommittee on Securities, Insurance, and Investment, you may have noticed that “Ernst & Young” was never uttered by anyone on the panel, although Lehman Brothers was mentioned a number of times throughout the hearing. Anton Valukas, the bankruptcy examiner for the Lehman, was there after all and “Ernst & Young” appears in his report probably thousands of times. So why wouldn’t Ernst & Young be mentioned? This is a hearing about the accounting profession preventing, after all and Mr Valukas has stated in his report and elsewhere that “colorable claims” could be filed against E&Y. Stands to reason that perhaps the firm would come up at some point.
Also, if you followed the hearing with us on our live-blog, you definitely heard Francine McKenna and I complaining about the sorry turnout by the members of the subcommittee. The majority of questions coming from the subcommittee chairman, Senator Jack Reed (D-RI), with a few from Senators Kay Hagan (D-NC) and Jeff Merkley (D-OR). The eight GOP members were nowhere to be found. Now maybe accounting isn’t the sexiest of topics but it’s hard to argue that this wasn’t an important hearing where many questions could have been asked of an industry that witnessed excrement coming into contact with an old Century. However, after a tip from a person familiar with situation, we may have an idea why there was such a pathetic turnout:
[T]he auditing firms did not like it they were holding the hearing and E&Y really was complaining to Reed that Valukas had been invited. As a result, the Republicans agreed that none of them would attend the hearing which in fact, none did.
Gotta love spiteful absence! Obviously we had to call around on this one and Ernst & Young spokesman Charlie Perkins declined to comment. As for the Republican members of the subcommittee, we have…well, nothing else to share at this point. But we’re hopeful! It’s entirely possible that all eight GOP members had something better to do than ask questions of industry experts that had a front row seat to the financial crisis, but then again the hearing was pretty early in the morning.
UPDATE: A spokeswoman for Senator Mike Crapo, the ranking member on the subcommittee, informed us that Mr Crapo was sick last Wednesday and canceled all his appointments for that day.
Remember those GT/Moss Adams rumors from back in January? At the time, our post sent both firms calling for plumbers but we still mangaged to get a copy of an email from Moss Adams CEO Rick Anderson that denied the rumor in an email to the firm’s partners. Everything has been quiet since then mostly because…well, it’s busy season. Granted, firm leaders like Stephen Chipman and Rick Anderson aren’t thigh-deep in spreadsheets like most of you so the fact it’s entirely plausible that while you’re all distracted, TPTB have been courting each other.
We received this brief note from a tipster yesterday:
Rumor is [Grant Thornton] [is] about to announce big west coast deal.
Our source originally speculated that a tax/valuation/consulting boutique was the target because of an old Andersen connection but then told us that the latest word from the west coast is that Moss Adams is back in the picture. In our original post, we went over the reasons for and against the GranMoss merger and frankly it still could go either way (we’re leaning “no” at this point). That said, Grant Thornton has been on a buying spree, most recently picking up some attest services from the LECG Corp. fire sale, so a merger of some kind wouldn’t be a surprise but WHO?? We’re listening to any and all well-founded or crackpot theories.
Moss Adams has declined to comment on the rumor thus far and Grant Thornton did not return an email requesting comment.
UPDATE: This just in from a Grant Thornton tipster:
While I have no actual basis for substantiating this, we have a Moss Adams wireless signal in our office in the central region. There is no Moss Adams office in our building, or even out state, its been there since about January when the rumors first popped up. I just thought it was interesting. I have no insight into any of this, I’m just a lowly peon staff…
Perhaps there’s an explanation for this but I’m no expert on the wireless signals and whatnot so I’ll leave it to you to reason this out.
Welcome to the first Friday in February edition of Accounting Career Emergencies. In today’s edition a future Big 4 soldier isn’t sure what to make of all the myths and rumors swirling around the quad about said four firms. He’s asked me to debunk.
Are you in desperate need for a
regime career change? Have a gassy cube neighbor? Need some tips on how to turn that frown upside down during busy season? Email us at advice@goingconce serve you better than Dr. Phil (or his dopplegänger).
Back to our Big 4 mythbuster:
I was wondering if there were any truth to the rumors/legends that seem to percolate through campuses about Big 4 accounting. Here’s a short list of stuff that I’ve heard while attending accounting job fairs, business frat/club meetings, and associates from Big 4 and regional firms that come back to campus for recruitment events.
1. During their respective busy seasons, new tax and audit associates at a Big 4 work so many hours that their monthly salaries break out into an hourly rate that is less than minimum wage.
2. It is nigh impossible to study for and pass any portion of the CPA exam while simultaneously working at a Big 4.
3. Internships are virtually the only way for new graduates to break into a Big 4.
4. Becker is better than Kaplan is better than Bisk.
5. Beginning a career at a Big 4 will open more doors down the road than starting at a mid-tier , regional or local firm.
6. At Big 4 firms, advisory associates make more money than audit associates make more money than tax associates.
7. The average Big 4 associate leaves/quits/defects before their 3rd year.
8. Evan after taking raises into account, Big 4 associates that were hired during the brunt of the recession will actually be paid less than new hires this year.
So is there any truth to these rumors? I’m guessing that there’s quite a bit of embellishment that come from associate ‘war stories’ so I’ve tried to take everything with a grain of salt.
Big 4 Mythbuster
There’s a lyric in “I Heard it Through the Grapevine,” that goes, “People say believe half of what you see, Son, and none of what you hear,” which we find to be generally a good rule of thumb (with the exception of what you read at this fine publication…most of the time).
ANYWAY, we’ll tackle these one at a time:
1. During their respective busy seasons, new tax and audit associates at a Big 4 work so many hours that their monthly salaries break out into an hourly rate that is less than minimum wage. – Let’s keep this simple: if you calculate an average salary based on this year’s starting salaries and 2,000 chargeable hours, it’s pretty difficult to get down to the federally mandated minimum wage of $7.25. Now, can you work far more than the 2,000 hours? Of course but even if you doubled the hours, you’re still above the minimum wage. MYTH.
2. It is nigh impossible to study for and pass any portion of the CPA exam while simultaneously working at a Big 4. – Is it difficult to balance a work schedule, studying, arranging to sit for a section, having a shred of a personal life, finding time to take out the dog AND still pass a portion? Yes, absolutely. “Nigh impossible”? No. People working at the Big 4 pass portions of the CPA every month. MYTH.
3. Internships are virtually the only way for new graduates to break into a Big 4. – When the Big 4 firms were hiring everyone and their dog back in the mid-Aughts, this would have been a myth. These days, with hiring budgets being a little tighter, the internship route is a must. Most interns end up taking the full-time offers which leaves just a few spots, so that doesn’t make for very good odds for any outsiders. TRUTH.
4. Becker is better than Kaplan is better than Bisk. – God, sorry to say but this is fruitless exercise. I don’t endorse any of the CPA review courses (FULL DISCLOSURE: I used Becker and passed and some companies happen to advertise with us.) out there. The companies will present stats that presents their pass success rate in the best light possible. That said, ranking the review courses in some arbitrary order like you’ve done above is meaningless. If you hear from someone on campus that Becker is the best because that’s what they used (Tim Gearty’s handsome wardrobe notwithstanding) or that Roger is the best because that’s what they used (and not because they have a thing for hipster chicks) that doesn’t mean you will necessarily have the same success. And if someone tells you that they’ve tried more than one review course, you should know that this person probably just sucks at taking tests. MYTH.
5. Beginning a career at a Big 4 will open more doors down the road than starting at a mid-tier, regional or local firm. – As a general rule this is true. Having the exposure to the most complex accounting systems, transactions and business models will allow you to work at these companies if you so choose. Working at Big 4 firm (and in some markets, mid-tier firms) will give you that exposure. Does that mean you’re doing yourself a disservice by accepting a position with a regional or local firm? Of course not. It all depends on what your career goals are. But does a Big 4 firm name on your résumé get more attention than a non-Big 4 firm. Yes. TRUTH.
6. At Big 4 firms, advisory associates make more money than audit associates make more money than tax associates. – In my experience, I’ve found that salaries for tax and audit associates are extremely close with a slight edge to the tax side, so you’ve got those two backwards. But yes, Advisory associates are paid the most. ONE-THIRD TRUTH.
7. The average Big 4 associate leaves/quits/defects before their 3rd year. – Again, the “average” number of years that an associate works at a Big 4 firm is a complete arbitrary statistic. I’m not sure when people started throwing numbers like this but it’s pretty useless information. Typically when people state an average number of years that an associate stays, it’s not backed up with any stats. I’d be surprised if the firms themselves even know what the average shelf-life of an associate is. I may be wrong about this and would love to see some stats if they’re out there but for now we’re going with: MYTH.
8. Evan after taking raises into account, Big 4 associates that were hired during the brunt of the recession will actually be paid less than new hires this year. – Pay freezes and meager increases certainly put a damper on salaries in ’08-’09 but this past year saw the Big 4 return to some reasonable increases across the board as well as bonuses in various forms. Starting salaries for new associates will always keep up with the market (as is popular to say) but with coverage of salaries being more transparent than it used to be, it will be impossible for firms to allow new hires to earn more than their superiors. MYTH.
Whew! There you have it; discuss as needed.
From the mailbag:
Thought y’all might be interested in hearing about a practice specific mid-year salary adjustment announced today [Monday]. Transactions and Restructuring (aka Transaction Services/TS; 750 people nationwide) had a national update call today during which, the partner in charge, Dan Tiemann [a Top 25 Consultant, no less], announced that he is very close to having firm leadership approve a mid-year comp adjustment for up to 5% for all members of the practice.
He mentioned that he is aware of the PwC iPad program and the Deloitte midyear raises and that it’s time that KPMG (well, at least the T&R practice) did something as well. This is in addition to the staff bonus program announced before xmas, and will be in addition to merit raises/incentive comp later this year
He said he’s well aware that somebody who wants to leave for a salary bump (as myself and many of my colleagues are considering) will not be deterred by a paltry 5%, but that he thinks the practice needed to do something to “show appreciation” for those who have sacrificed weekends and vacations during the past few months.
As our tipster notes, this is not yet approved by the brass but notes that “the recent barrage of defections” may have been a motivating factor. Also, our source doubted that anything like this would occur for large practices like audit or tax, “there is hope for the rest of advisory or other specialty practices.” If you hear any hopefulness for your practice – advisory, speciality or otherwise – email us.
This week we learned that Dixon Hughes and Goodman & Co. would be wedded in CPA firm bliss on March 1st. We’ve also seen a couple of smaller mergers announced this week in the tri-state area: Rosen Seymour Shapss Martin & Company LLP and Kahn, Hoffman & Hochman, LLP formed Kahn Hoffman & Hochman and Morrison, Brown, Argiz & Farra, LLC and ERE, LLP.
But e heard a rumor that trumps all of these:
The new rumor is that Grant Thornton and Moss Adams are merging. I have it on good authority (an industry consultant and the MP of a California firm).
Okay, so not exactly rock solid but intriguing enough for us to ask around. So far, Grant Thornton spokeswoman Kristi Grgeta has not returned our emails or voicemails and Moss Adams has declined to comment at this time. We’re poking around with other sources but still waiting to hear back.
So for now, let’s just go with the hypothetical. If GT and Moss were to combine, it would make them the 5th largest firm in the U.S., narrowly edging out McGladrey, with about $1.5 billion in revenues, going by Accounting Today’s most recent figures. Currently they are 6th (GT) and 11th (MA) on the AT100 list and 6th (MA) and 23rd (GT) on Vault’s flagship ranking. Their combined forces would have nearly 800 partners and over 7,100 total employees, if you assume no layoffs.
While all that might serve Stephen Chipman’s desire more dynamic clients (and perhaps more blogging fodder?), it would certainly require a few more hand-written notes. Not only that but GT already has a presence in every major market that Moss Adams does unless they’re looking to mine the Eugene, Oregon market for LOSERS and have reconsidered their divestment in Albuquerque. Also culturally, this seems like a strange fit as GT strikes us as pretty buttoned-down while Moss Adams is more laid back but maybe we’ve got that wrong. You tell us.
Regardless, Grant Thornton has voiced interest in merger possibilities and picked up Huron Consulting’s Disputes & Investigations practice last year, so who knows!? Both firms just closed the books on 2010 and maybe they’re laying some groundwork?
So, what do the GT and MA people make of this? Hell, anyone can chime in, we’re just finding this particular rumor pret-tay interesting. Some things make sense and some don’t, so we’ll leave it to you to hash out. And of course, if any of this sounds familiar because, you know, you heard something in a meeting about this very topic, email us. We’ll update you with anything we hear.
A trusted source emailed us that things were getting festive last night:
EY had their FSO party last night at Cipriani’s downtown. Used to be at Tavern on the Green.
This is good news. And not just because this is an upgrade from last year’s party. Despite all the bad press the firm is getting, the celebration will go on! It must go on! Now whether the Governor-elect was aware of this and purposefully decided to make a few people’s hangovers a little worse by filing the charges today, we can’t possibly know (but he does seem to have an innate sense of timing).
What we would like to find out is the mood at this fiesta. Were there a lot of long faces, grumbling about Hank Paulson, weeping in their single malts? OR did people manage to convince themselves that this whole thing is NBD and people had a good time – enjoying the open bar, power smoking Cohibas, making awkward sexual advances, partners dancing?
We need, and the people demand details, so if you were at the party email us the details.
From the mailbag:
Was with a [Midwest city] KPMG Advisory partner this weekend. She said that employees are dropping like flies because KPMG finally unveiled raises after 2 yrs without. Only EP’s were awarded (less than 5%). She said the numbers were in the double digits. What the hell did they expect?
If this sounds a little confusing, it was. We asked our tipster to clarify:
[A]re you saying that she’s under the impression that people are just now leaving because they are upset that they didn’t get raises for two years? And she’s surprised because the raises in the double digits when they were actually in the single digits?
And their response:
[S]he is surprised that so many are leaving especially given the unemployment rate in [midwest city] regardless of how long it’s been since raises were given. It’s not a secret that the other big four have not only given raises but as you report, awarded mid-yr bonus/raises as well.
We went back to some of this year’s KPMG comp threads and the 5% sounds a little suspect, as those rated as “exceptional” were pulling much better increases than that but then again, maybe there were some exceptions that weren’t reported. Also, it seems a little strange that a partner would be so clueless about raises but anything is possible, s’pose.
And as far as the gnashing of teeth because mid-year raises and bonuses are being handed out at other firms, keep in mind that KPMG isn’t even out of their first quarter yet. The rest of those firms have fiscal years that end prior to KPMG’s and they know how the first half of the year is shaping up. Expecting KPMG to start throwing money at people with less than three months in the books is a little ridiculous. At this point, the rumors around the idea of a mid-year surprise should keep you hopeful (but don’t go expecting anything).
It’s been no secret that people have exiting the House of Klynveld (and other firms) – regardless of the unemployment situation – prior to the end of the year (as is typical this time of year). Frankly, people we talk to are pretty optimistic about the job situation for most Big 4 types looking for something new, so this partner may be even more clueless than we thought.
Whatever the case, only 17 shopping days until those left will likely settle for sitting tight through another busy season. If we’re way off base here (or right on the money), feel free to jump in.
After hearing that KPMG was following suit with a mid-year compensation surprise, we’ve now been tipped that any hope you had of seeing a little extra moolah has been crushed:
Last night was KPMG’s New York Office (NYO) townhall meeting. During this meeting, close to 2,000 NYO employees of the firm gathered in a hotel in Time Square to listen to a series of presentations from the CEO, COO and Office Managing Partner (OMP). During this four hour presentation, they covered an array of topics, including: compensation and benefits, technology, etc.
Depsite hearing that the firm will be allowing staff (associates and senior associates) have KPMG email access on their iPhone, Android or BlackBerry phones, no further details were provided about what they will be paying for, if anything.
They also announced that they were keeping up with the average regarding compensation, but made it a point to mention that with every average, someone must be below the average, hinting that we were that someone. After finding out that there will be no mid-year bonsues or raises, some left the meeting rather disappointed… at least there was free booze and food (like any other normal KPMG event).
But wait! This sounded a little weird to us since our sources on the original story were solid, so we checked in with another source who told us the message was simply non-committal, “They didn’t really confirm/deny what was going to happen with the mid-year stuff.”
So all this “Yes? No? Maybe so,” probably isn’t so helpful but that’s where things appear to stand.
Back to our original tipster, who is now hearing talk of next fall’s associates receiving a boost in their starting salaries:
Later that evening, however, many of the recent hires (new associates in 2010) were beginning to hear that the 2011 new hires (for next year) were already receiveing salary adjustments (upwards into the $60,000’s), in addition to their already higher starting salaries and sign-on bonuses.
So my question is: Does KPMG plan on compensating the new associates (that started in 2010) that did not receive a sign-on bonus this year, or perhaps have any plans to bring their salary closer towards the industry average?
Starting salaries have been consistently rising over the years and with increased competition among the firms for the best recruits, you can expect that to continue. Whether that results in adjustments for KPMG’s latest class of new associates remains to be seen, since a mid-year surprise is still uncertain. We should say, however, expecting more money after being on the job for 2-3 months is a little presumptuous. We understand the frustration but, seriously? You can barely open Excel at this point.
As you hear more regarding the mid-year compensation (or lack thereof) email us with the scoop.
The only thing is, there aren’t a lot of details at this point. The firm’s first quarter is not over until the end of this month, so the pool likely hasn’t been determined and it isn’t known whether the mid-year comp will be paid as a bonus or as a merit increase. Our source on the matter speculates that it will be a bonus rather than a raise but it is fairly certain that it will be structured in a way that will incentivize employees to stay with the firm. There has been steady stream of people leaving (which is not atypical this time of year) and there are hopes that this show of love will stem the tide.
So while it appears that the House of Klynveld has heard your grumbling about anteing up, time (and the amount of money) will ultimately determine if this will satisfy the troops.
If you’re familiar with the talks or you have more details, email us the details and discuss your thoughts below.
UPDATE – circa 2:10 pm: Some thoughts on a non-bonus approach:
Pure (educated) conjecture on my part, but I would assume that the mid-year “surprise” would be a raise, as the firm is apprehensive at this point about giving bonuses, because people could just take them and leave. Harkening back to our SOX-404 years (2005), we gave multiple raises, bonuses and awards throughout the busy season (i.e., if you worked 60+ hours in a week, immediate $200 award) with a bonus at the end of the tunnel. I seriously doubt any early 2011 compensation would be front-loaded.
And then, in case you weren’t already aware, there’s this:
In other news, [the Dallas] office has been reaching out and giving offers to people they have previously laid off and are seeking out experienced hires. Not sure if it’s firm-wide, but an interesting sign of desperation nonetheless.
From the mailbag:
EY Boston Tax had their end of busy season party last week. On Tuesday, we had beer and wine in the office. Considering everyone had to work through the first football sunday of the year, the least they could do is get us drunk on a Thursday so we can enjoy ourselves. Who’s gonna get drunk in the office on a Tuesday? [Ed. note: show of hands?]
I have to say I’m disappointed with the social/drinking scene at this place compared to other Big 4s in this market. Pretty stiff, but I feel like the firm takes pride in that–I have no idea why.
Without the proper context, it’s difficult to know what kind of a drinker our tipster is. If he/she is merely a two wines/beers and out person then E&Y Boston is really bucking the trend in that fair city. However, if the tipster is Charlie Sheen, then there’s no cause for concern.
Any Bostonians familiar with the situation are invited to elaborate on the Big 4/next tier drinking scene below or share with us directly.
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.
• 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.
From the mailbag:
There are rumors that pwc is planning on doing something similar [to Deloitte]. In one of the meetings with an audit team, Tim Ryan [one of your Thanksgiving Day hosts] mentioned that there would be bonuses and salary adjustments sometime in December.
As you’re no doubt aware, last Friday Deloitte made the announcement that the market for audit salaries had been misunderestimated and a second adjustment was going to be communicated to opiners this week.
Checking with a source inside Deloitte, we’ve heard some of the preliminary returns:
I have heard rumors of 5k in Hartford and 4k in Chicago for Seniors. But nothing to prove them out. The general range I have heard though is 2kish for 2nd years and 5k for seniors.
No word at at this point on what managers are receiving, so if you’ve gotten the news, let us know below.
The question now is – was all this hoopla worth it? Granted it’s early but if the range is in the ballpark, there’s likely a few people that are simply, “meh.” On the other hand, maybe if you got called in for another meeting to be told that you’re getting an extra $2k – $5k you might be really flippin’ stoked. However, many people will likely remind you to get some perspective.
Either way, the tax practice is feeling short-changed and advisory is too busy rolling around in their cash-filled bathtubs to care.
Discuss the situation at present and keep us updated with the adjustment news just as soon as your sit-down is over.
UPDATE – 12:45 ET: This just in:
Deloitte experienced assistant from South Florida – $2k for audit assistants, $5k for seniors.
total raise for the year with comp adjustment – 8%. Could be better but could be the original 4% I got in August…
UPDATE – crica 2 pm ET: The latest:
Miami: 2nd years: $2k, Seniors: $5k
Parsippany: 2nd years: $5K Seniors: $8K Managers: $6K
From the mailbag by way of a Deloittian in Rahmville:
[O]ur PPD (Principal, Partner, Direct) group has received word that PWC is going to send recruiting letters to every [Financial Services Industry] senior in the Chicago and New York offices. Apparently the letter states PWC is willing to offer $15,000 more than what Deloitte is paying.
The PPD group had a meeting with all of the FSI managers in Chicago yesterday regarding this situation. On top of that, all Seniors in FSI received a meeting request today from the PPD group. The meeting is schedule for Monday morning and according to the managers, the topic of dicussion is going to be these letters. Now I can’t speak for anyone in New York but in Chicago the PPD group is not taking this lightly. Word as it that one of our senior ranking partners actually called over to PWC. Again this is all a rumor, I have not seen one of these letter but apparently one of our partners said he/she has.
If you happen across this letter, do share it with us.
The following post is republished from AccountingWEB UK, a source that delivers topical, practical content to accountants and accounting professionals.
Merger rumors. What would we do without them? The past decade or so of my professional life has been shaped by the regular appearance of bid rumors around Sage, usually of the “who are they going to buy this week?” sort.
So you can imagine my surprise to hear on the grapevine that Sage’s share price had surged almost 5% on Tuesday night on rumors that it was an acquisition target for SAP, with Microsoft and Gapgemini reported to be sniffing around the undergrowth in Newcastle too.
I’m not a stock market analyst, so I don’t really need to chase geese like this, but I couldn’t help myself from doing a little background checking. The Daily Mail appears to have broken the story, without naming sources, around 10:30 pm on Monday night. By the next morning, Reuters and numerous other outlets had picked up the trail and various analysts were puffing up the story with blogs and tweets.
There was a tweet from China Martens at 451 group of “late night activity in Walldorf” to verify that something was up, but with none of the companies involved breaking cover this really was one of those stories where one bit of unfounded gossip was feeding off another.
Years of industry-watching have taught me never to be surprised at what a software company with a wedge of cash in its back pocket can get up to, but neither SAP or Microsoft strike me as being suitable suitors for Sage. Microsoft’s entire business solutions strategy has been in turmoil for years and if it ever enters Steve Ballmer’s consciousness, my guess is that he wishes the company had never got into bed with Great Plains and Navision.
SAP meanwhile, is everything that Sage isn’t: a technology-focused global monolith that still has trouble thinking of an SME as having anything less than a $500m annual turnover. On this point Dennis Howlett blogged, “So much of Sage’s business is at an end of the market about which SAP has little understanding. Sage is on a declining organic growth curve, has a rat’s nest of code from acquired companies, is propped up by maintenance fees and has a nightmare in the US to manage with the ongoing Emdeon fiasco.”
It doesn’t happen often, but for once I find myself in complete agreement with him.
Strangely, by Wednesday afternoon the rumors had simmered down and so had the share price (although somebody seems to have done very nicely out of the rumors with 1.7m of shares shifted at the peak of the frenzy on Tuesday night).
Now I’ve voiced my doubts, they’ll probably turn around an announce the deal in the morning.
Directly from the mouths of babes in Norwalk:
The Board of Trustees of the Financial Accounting Foundation (FAF) today announced the appointment of Russell G. Golden to the Financial Accounting Standards Board (FASB), effective October 1, 2010. Mr. Golden will fill the board member vacancy on the FASB resulting from the retirement of Robert H. Herz on September 30, 2010. Prior to his appointment, Mr. Golden served as technical director of the FASB.
Whether or not this is a pit stop for Russ on the way to the Chairmanship remains to be seen. Leslie Seidman is taking the “acting” role on October 1st and as the PCAOB has shown, that can last for awhile.
Mr. Golden’s initial term on the FASB will extend to June 30, 2012, the expiration date of the term left vacant by Mr. Herz’s retirement. As technical director of the FASB, Mr. Golden held primary responsibility for overseeing FASB staff work on all standards-setting projects, including major global and domestic projects and technical application and implementation of financial accounting and reporting standards. He also served as chair of the FASB’s Emerging Issues Task Force (EITF).
“We are delighted to appoint Russ to the FASB,” said FAF Chairman John Brennan. “The FASB will be served well by his depth of technical knowledge in accounting, intimate familiarity with the projects on the board’s technical agenda, and his proven track record for reaching out to constituents and evaluating all available input when approaching financial reporting issues, solutions and improvements.”
Mr. Golden assumed his role as technical director of the FASB in June of 2008, and before that served in various roles at the FASB as a member of the senior staff. Previous to his tenure at the FASB, Mr. Golden was a partner at Deloitte & Touche LLP in the National Office Accounting Services department. Mr. Golden earned his Bachelor’s degree from Washington State University. He is a licensed CPA in the states of Washington and Connecticut.
As announced by the FAF Trustees on August 24, 2010, the FASB will return to a seven-member structure. The Board of Trustees is engaged in processes to recruit and evaluate candidates for the two additional seats and to evaluate candidates for appointment as FASB Chairman. FASB member Leslie F. Seidman will assume the role of Acting Chairman as of October 1, 2010, as previously announced. More details about the search process are discussed in a Q&A with Mr. Brennan.
While Mr. Golden was expected to be appointed to the board, rumors are that he won’t be the next Chairman of the FASB. Some people are saying that it is most likely that Leslie Seidman will get the “acting” dropped from her title or it will be one of the two new members that have yet to be appointed.
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.
A member of the Phil Mickelson fan club is a little peeved with a recent decision (or not so much, you’ll have to tell us) regarding travel time:
I am in an office that covers a significant region that includes TN, KY, GA, MS and AL. Previously, it was office policy (and in most cases area policy) that at a minimum half of the travel time to and from client was considered chargeable. Well, management in its infinite wisdom has decided that will no longer be the case. Therefore, those 40, 50 or 60 hour weeks are now 50, 60, or 70 hour weeks when the travel time is excluded for management’s purposes but included in the “real world” (which management has clearly lost touch with).
Why the change? Our source has a theory:
In this year of increased emphasis on internal profitability (which is a joke for a fixed fee revenue generating business), management needed some mechanism to make up for all the hours that are going to be wasted messing around with this “awesome” tool (which malfunctions daily) [Ed. note: he/she is referring to the new paperless audit tool]. This is also in response to the area management’s inability to win clients. So, instead of [leadership] making the tough decisions and forcing those responsible for the poor results, loss of clients, and improper planning to bear the weight of the lack of profitability (and reduce their income), it totally makes sense to squeeze the staff even further. I guess the philosophy may go something like this: “well, they are already pissed because we don’t pay them properly, we are forcing them to use this eAudit tool that doesn’t work and isn’t ready for deployment, and we are making them work ridiculous hours because we fired too many people (keep in mind the exodus is just beginning so this is just going to get worse), so we might as well just making even madder by telling them that those hours they used to spend in the air or car in the service of KPMG don’t really matter for crap either”.
Sound about right, Klynveldians? Discuss, debunk and whathaveyou.
On Monday we learned that Deloitte Tax had a STD and now there’s more chatter about the firm’s performance that could maybe, possibly affect comp for this year:
A new set of video blogs came out from the northeast regional managing partner. He announced double digit growth in perdiods [sic] 9-13 of FY10 and a plan for “continued double digit growth through FY11”. I know everyone is getting antsy over compensation (discussions are supposed to take place beginning next week, with raises hitting on the 9/3/10 payroll), and they keep dropping comments about “substantial raises” and “double digit growth.”
So while some people remain skeptical, it appears that Deloitte is warming you up the troops for a nice surprise next week. Deride if you must but can Dr. Phil & Co. really afford to come in with lower raises than PwC and E&Y?
For a firm that talks like they’ll be numero uno in a few short years, it would be pretty embarrassing to bring in some paltry raises while the firm they’re chasing managed to make it up to at least a few of their people. Discuss the latest and keep us informed.
After coming out the near-death experience thanks to the Florida 3rd District Court of Appeal, you’d figure TPTB at BDO would continue shoveling the good news out while they could. On the comp front, a tipster tells us that while there are rumors that raises are bonuses are coming, no one has a clue as to what they’ll be:
Can you run a discussion on BDO compensation increase and bonuses? Raises would be effective 10/1, and currently there have been no formal communications from senior mgmt regarding this topic. In the local offices, there has been word that there will be raises and bonuses, but no numbers have been thrown around.
In other words, if you’ve got the goods BDO peeps, kindly spill it. It’s about time you started talking. If you’re not comfortable voicing yourself, email us and we’ll handle it.
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.
Why? Because the partners seem to be pretty good at keeping a lid on things:
[N]o word on raises or communication of raises- all I’ve heard from some partners is “they will be better than last year, but not as good as they have been in the past”, I know most people around here are starting to get anxious.
As we mentioned on Friday, PwC and E&Y have been having a pissing match of sorts but only P Dubs has dropped actual numbers. E&Y will be coughing up official word in a couple weeks-ish or so, but Deloitte? Our understanding is that D’s comp news won’t be known for another month.
Some vets of the firm are used to it. Like GuestDT:
This is really just the blueball conversation for most people – there are a handful who will get unexpected drop in rating or not promoted, but most of that stuff is hinted at as we plan for the next audit year. This is the time of year to go to lunch and hear your counselor say, “Noone’s really said what compensation will be…” But you do get a free lunch.
But the NKOTB are more anxious. D&T 1st Year:
We’re all sitting on our hands as we see managers coming out of counselor meetings crying because they didn’t get promoted to SM. Worse yet, being a 2nd year next year will be rough as we are all going to be senioring our jobs as there are no seniors left. Look out 5th years, you might be senioring again next year too.
So what to do (besides console your emotionally unstable manager)? Start tickling partners until they cough up some ballpark figures, pull out a dartboard or just drop your best guess below.
Confirming some discussion in the comments from last Friday’s Ernst & Young compensation post, a source got in touch with us with more details on some rankings getting chopped:
I’ll confirm what your sources are saying about reviews being available in fso. Not only that, but forced rankings are in full effect. While [there] was less pushback during roundtables earlier (which was accurrate at the time), the ratings for at least 5 people were lowered by a notch from what was agreed to by the full committee at the end of may. (5 to 4, 4 to 3) While they do say after all people are discussed they’ll assess the levels to ensure the same criteria is being used, I firmly belive its being used as a way to lower ratings (and raises). Why have the formal review committees (roundtables) if the partners are going to have the ability to act unilateraly to ‘right size’ the ratings?
We’ll still have to wait a couple more weeks before we find out if the forced rankings actually translate into disappointing raises, as the official communication won’t come until August but this news surely doesn’t bode well. If you got knocked down a peg, discuss below and as always, keep us updated.
The PricewaterhouseCoopers compensation post is still a hot thread, as the majority of news was about double-digit raises and bonuses have been reported from many although at least one commenter was skeptical that all the news was good in the PwC world:
“[P]robably the people most willing to share are the ones who got the most $.”
That comment was in response to someone who assumed PwC was throwing around “1” ratings (the firm’s highest) like boomies at a Phish show. Of course, not everyone can be so lucky and apparently there are a couple of terms being thrown around by the less fortunate.
Late last week a source close to PwC dropped us the following:
“Fonus”– noun; the much-diminished bonus Big 4 firms give to borderline staff they can’t afford to pay properly, but don’t want to quit.
Not to be confused with the ‘nonus,’ which is no bonus at all.
Apparently these terms have emerged this week as fonuses started appearing in people’s paychecks.
So not to worry “as expected” staff that can’t afford to quit your jobs! If you ended up with the 6%/0% instead of the 14%/10% or whatever, whathaveyou, you’re not alone! Plus, there are some fun terms you can throw around to help you bitch about it. Continue to discuss and keep us updated with any other fallout from the discussions – verbal creativeness or otherwise.
Lots of news this week on the compensation and promotion fronts with Grant Thornton, KPMG and PwC all making announcements or soon-to-be making announcements (that we’ve heard; are you holding out on us, E&Y?).
The latest out of Deloitte is that the discussions are starting (although maybe not today since it sounds like most are off) but the news on yay or nay on promotions is starting and now the anxiety around comp will increase over the next two month:
The year-end ratings and promotion decisions have been approved by National; so the process of communicating both to Deloittians is starting…At a high-level, I heard that promotions this year were tough – that being said, plenty of people made it through. For the most part, people are now waiting to hear about comp – scheduled for communication the last two weeks of August.
We did hear one rumor about the number of new partners expected, “at a recent partner meeting, it was announced that there will be more than 60 new PDPs nationally, with more than 10 being in the Northeast,” so you can toss that around your meat-ingestion fest this weekend if you so choose.
Discuss your epic/tragic news re: your new promotion if you’ve received word and keep us updated on the comp rumors.
From the depths of 666 Third Ave:
In New York:
Associates look to come in at almost $10k less than they did in 2007
Senior 3’s are looking to make almost $10k less than Senior 3’s in 2007
New Managers are looking to make almost $15k less than New Managers in 2007
Senior Managers are looking to make almost $15-20k less than Senior Managers in 2007
Raises (without promotion) are looking to be:
3% for employees rated under a 4
6% for employees rated a 4 or 5
Our source indicates that these are all rumors at this point but based on the last Communique de Chipman, the official numbers should be known soon (“early July”).
In the previous thread lots of numbers were getting thrown so who knows; maybe GT is pulling a PwC and promising low, delivering high? Discuss.
We received a tip early last week that will could make you think twice about attending the next PricewaterhouseCoopers happy hour, or at the very least, keep your eyes open for the attendees that have clearly drank themselves blind.
Our original tipster told us the following, “You should look into a PwC male partner punching a male associate at a going away happy hour in Houston, TX. Allegedly, the story is the partner got drunk, walked up to the male associate and said “I know you want to kiss me” proceeded to kiss him on the lips and then pushed and punched him.”
Well! That sounds like a helluva party. We’ve heard of partners bullying other partners before but this is a new one.
Before we go any further, we should note that while we did learn the name of the partner in question, we’re withholding the name of the person at this time since we have yet to confirm the incident first-hand with an eyewitness to the events. If you were there and can confirm these events, including whether it was a left jab or round-house uppercut and whether it was a peck or a sloppy make out attempt, email us and tell us what you saw.
Okay. So, our source proceeded to tell us that the partner had been placed on the probation and didn’t acknowledge the event for several days saying, “he didn’t remember anything that happened because the engagement team brought drugs to the happy hour.” Fairly standard black-out excuse.
Anyway, we checked on this rumor with a source in PwC’s Houston office who told us the following:
A fellow associate of mine was at an audit happy hour last Friday and he said something along the lines of “things got really, really crazy.” And he wouldn’t tell me what he meant by “really really crazy.” I guessed table dancing / hooking up, but he said no, it wasn’t like that.
Luckily for all us, our source did end up talking to the witness and told us:
I talked to my friend — he could neither “confirm or deny the events” ; however, from talking to him, it sounds like the rumor is true. Per my friend, the “issues are still under investigation by the Firm.” So its all very hush hush evidently. The client is a high profile one, so I’m sure people are being very, very careful to not let the gossip spread if it all possible.
With all this, we thought we’d better call this partner up to see what’s what. We called the Houston office, requesting the partner in question (“PIQ”) and after a pause by the receptionist, we were connected. Expecting the typical partner buffer of an admin to answer, we were surprised when the he answered. We politely introduced ourselves and asked about “an incident that happened at a recent happy hour where your name came up.”
The PIQ immediately interrupted, “I’m not allowed to discuss anything about that. Thank you very much.” and promptly hung up the phone.
We tried getting in touch with PwC spokesman Jon Stoner to see what he knew about this alleged make out/fisticuffs situation but he has yet to return our phone calls or emails. If you’ve got more details on this story, get in touch with us and we’ll update the post if we hear anything more.
6 years after the advent of the computerized CPA exam, candidates are fairly used to simulations by now (just in time for them to change) but they can still be a source of fear and apprehension for candidates just starting out.
Let’s start with debunking some popular myths. Remember, all of this information is current to the 2010 CPA exam and will be changing in 2011. Since it doesn’t make sense to repeat myself, I’m talking about what to expect for the next two windows of 2010.
Only one simulation is graded. Only one written communication is graded but both simulations are definitely graded and there is no progressive difficulty like there is with MCQ. If your second simulation feels harder than the first, it doesn’t mean you’re doing better, it probably means you got screwed on a simulation that covers the one subject you blew off when you were studying. This will get easier next year as more, smaller “simlets” make your knowledge of a broad range of topics more vital to the scoring process than your intimate knowledge of two topics is now.
Research is an important tab. It actually isn’t. It isn’t worth too many points so if you have to save anything for last, it’s research. If you have time left over, by all means, knock yourself out.
Written communications are sometimes hand-graded for correctness. Actually they don’t care at all if you are right, you just have to address the issue you are presented with using keywords and
write good English use proper business grammar. It’s easy, you’re supposed to be doing this all the time via e-mail and if you aren’t, maybe you should start practicing. Caleb, this means you with your IDKs.
We will dig into the details onCP 2011’s new “simlets” on Friday.
Maybe! The AP is reporting that KPMG is expanding its Fairfax County Office (i.e. Tyson’s Corner) by moving people from its DC office.
According to an accountant close to the situation, “The Tyson’s Corner office switched buildings, and as a result, had a large amount of available office space. The DC advisory practice (including IRM or whatever it’s called now) moved from the M Street office to Tyson’s. I used to sit on the 7th floor whenever I worked from the office, but the place was in full move-out mode when I went in on Friday.”
Residents of the commonwealth will be thrilled to know that Virginia’s governor approved a $250,000 grant from the Governor’s Opportunity Fund for the “project.” In other words, Virginia taxpayers footed $250k to move dozens of coffee guzzling, poorly dressed 10-key tramps out of the District. And it turns out, many aren’t thrilled about it, “Advisory people are bitching about moving, especially the ones who live in the District.”
But our source also says that the rest of DC office might be packing up:
There’s rumors that the entire DC practice will be moved to Tyson’s, but I don’t know if that’s true [let’s just assume it is, shall we?]. KPMG might be the only one of the big four who still has an office in DC proper, but then again, we’re the biggest of the big four when it comes to Federal clients – and there’s a certain cachet to having that office building in Dupont Circle with the big “THE KPMG BUILDING” emblazoned on the side. [O]therwise it’s been the usual hooplah from management and torrent of “OMG SO EXCITING!” emails, and the staff I know are mostly just “meh.”
If it comes to leaving the District altogether, John Veihmeyer will probably just buy the sign and slap it on the side of his summer house. Can’t let something like that go to waste.
It’s been awhile since we’ve heard any news on the E&Y comp front but we finally received a preliminary report from one source late last week:
[Roundtables] went the same way they always go. Surprisingly, less pushback on proposed ratings for the portion I was involved in. I really think they may be scared to lose more people. Indications are raises will be low (3-5% range for most, more for 4/5 rated people) Bonuses are probably non-existent for the masses. Annoucements of promotions for other levels will be made in August (staff to senior, senior to manager, manager to senior manager) they will also do comp increase discussions then. Effective 10/1…
So despite Ernst & Young re-reassuring merit increases the 3-5% for the meaty part of the curve and no bonuses isn’t exactly what “the masses” were expecting.
That being said, this office may be catching some bad luck since we that at least one E&Y partner was confident that the raises would beat PwC’s.
Although, some lucky E&Y soldiers have seen some “spot bonuses” for their hard work but it’s not clear how widespread that generosity is.
On a marginally-related note, we’ve received word that the partner promotions were announced but we’re still trying to run down some details. Get in touch with us if you’ve got the scoop on the new partners, what you’re hearing about comp in your office and discuss below.
UPDATE, Wednesday June 16th: A couple more accountants familiar with E&Y have their own take on the comp situation:
I heard that we “we’re not going to be disappointed with raises” here at EY. I don’t know what that means. And I tend to believe, that as you posted today, 3-5%, is a more realistic view of what’s going to happen (though that’s just my own pessimism).
and that is coupled with another source, “Haven’t heard anything further on comp other than ‘moderate.’
Continue attempting to decipher the latest. As you were.
Over the past month, we have heard lots about layoffs at RSM McGladrey/McGladrey & Pullen but we didn’t have much for details.
Frankly, we still don’t know a lot but we’ll go with what we’ve got. So far we know about reductions in the New York, Chicago, Quad Cities, Florida and Seattle offices and everything we’ve been told indicates that they are occurring elsewhere.
First the Emerald City:
I was am ple. There is a new geographic restructuring going on. Instead of multiple “economic units” there will be only three regions. Many HRs and CFOs from different offices are losing their jobs. Consulting people talk about 100 positions that will be eliminated across the country. 10 people were let go from Seattle Economic Unit which includes Seattle, Tacoma, and Olympia offices. We were informed about the reorganization somewhere around 04/12 and laid off at the end of the month. I think everybody received severance.
We’re not that familiar with past cuts in the RSM/M&P world but the big cuts in consulting seem to trail the Big 4’s by a year or two, although if some of these smaller clients are giving into the Big 4 lowballing then perhaps this is the natural progression.
Their Florida Private Club operations group closed the Club IT Consulting Group and layed off the staff. Some of the staff have been part of the firm for more than 20 years and were profitable.
Chicago just layed off the Operations Consulting Staff yesterday, [approximately] 10 people. This group was left to dangle in the wind, sink or swim on their own without marketing or sales assistance or access to the firm’s client-base Naturally it failed.
This firm’s actual layoff numbers are always reported low because they chase people out prior to layoffs in an attempt to camouflage the numbers. Their tactics to accomplish this include poor performance evaluations for staff, unreasonable margin requirements, constant peer pressure meetings regarding performance and head to head comparisons. This creates a dysfunctional relationship between groups and actually motivates groups within their own company to compete with one and other. Only so much people can take and then they leave. Just what the firm wanted.
Considering the economy in Florida, the demise of RSM’s private club operations in that corner of the over-leveraged world wouldn’t come as much of surprise. That being said, you might expect that veterans of the firm would be accommodated somehow with other internal opportunities.
We reached out to both RSM’s corporate spokeswoman and their general counsel, both of whom have not responded to our request for comment. We also contacted an H&R Block spokesman to see if they could elaborate on these layoffs from the parent company level but again, our requests have gone unanswered. H&RB had their own layoffs last month however, there is no indication at this point whether cuts at H&RB would have anything to do with those at RSM/M&P.
We’re still accumulating details on these cuts, so get in touch with us about details on your office or discuss below. And don’t be shy, we know you McGladrey types been hesitant to call on us in the past.
Has the risk of violence become too much?
No, it’s actually quite a bit more boring than that – cost savings. The company states that it will decrease its operating expenses $140-$150 million by 2012. CEO Russ Smyth was quoted in the Kansas City Star that “There aren’t as many people who need their taxes done when there are a lot fewer W-2s going out,” referring to the higher unemployment rate in the company’s customer base.
HRB’s headquarters in Kansas City will cut 165 of the 400 jobs lost.
The timing of this announcement is interesting because we’ve heard a few rumors (but virtually no details) about layoffs at RSM McGladrey, an HRB subsidiary, but they aren’t as forthcoming with the press releases and aren’t returning our calls. If you have any details about layoffs at RSM or its on-again off-again affiliate, McGladrey & Pullen, get in touch with us.
Full HRB press release:
KANSAS CITY, Mo. – H&R Block (NYSE:HRB) today announced a broad strategic realignment of its field and corporate support organization. Overall, the company expects these changes to decrease annual operating expenses by $140 – $150 million per year by the end of fiscal year 2012.
Russ Smyth, president and chief executive officer of H&R Block, said, “We operate in a challenging and competitive environment, and to be successful we must find new ways to provide better value to our clients. This requires that we narrow our focus and invest in a few key initiatives that will have the greatest impact on attracting and retaining clients in our retail and digital channels, while eliminating other activities and their related costs.”
Approximately 400 positions are being eliminated throughout the organization as part of the measure. The company also has closed approximately 400 under-performing tax offices out of its network of 11,000 retail tax locations.
“Changes like these are never easy and we appreciate the hard work and loyalty of the affected associates,” Smyth said.
“However, these steps are necessary to improve our business performance and better serve our clients.”
H&R Block expects to incur a pre-tax charge for severance-related costs of approximately $28 million, most of which will be incurred in the fiscal quarter ending July 31, 2010.
From somewhere deep inside 345 Park Ave:
“Damage control beginning – 3 managers and 3 SAs out.”
It’s our understanding that this is the audit side of the house in financial services. No indication at this point whether it’s promotion de-nied related or if it’s has something to do with the unconfirmed compensation rumors we’re hearing.
If you’ve got details on comp, promotions, or lack thereof, email us with the details.
While the timing seems early (Klynveld is on a 9/30 FYE), there has been a lot of chatter about the announcement of this year’s class of new managers happening this week.
From a Tim Flynn foot soldier close to the situation:
Heard on Monday that national was supposed to communicate yesterday or today, with communication to us this week.
And as you might imagine, there is some anxiety out there:
I’ll tell you one thing, the SA3s that don’t get promoted, they better get a ridiculous compensation package at the time they tell us we’re getting fucked. Otherwise, we’re all leaving. Two years in a row taking it up the ass from Uncle Peat? No thank you.
That’s the word from an office in the western region. Back east, there seems to be less concern:
DC already [announced], or everyone already knows, at least. Anyone with the requisite number of years and their CPA was promoted but DC has been bleeding employees lately. Everyone’s quitting or going on rotation at the senior and manager levels. Mostly quitting.
And what about those SA3s that don’t get the bump because A) they aren’t particularly popular or B) don’t have their CPA? Turns out KPMG is prepared for that. We’ve learned that the firm is offering a new training this summer specifically for SA4s. Soooo, we imagine that training could have some discussions that goes like this:
SA4 #1: Skipped over?
SA4 #2: Failed FAR three times. You?
SA4 #1: Was told that I’m “not quite ready” (hand quotes, eye roll) and that the 4th year will better prepare me for manager.
SA4 #2: Sucks.
SA4 #1: Sucks.
Keep us posted if you get the yay or nay in your office.
UPDATE: To answer a question in the comments, this is for the audit side of the house. If you’re tax or advisory feel free to weigh in on your own promotion possibilities.
About a month ago, we heard about an E&Y town hall in Chicago that was meant to rally the troops after the last two weeks of March saw ubiquitous Lehman Brothers/Repo 105/bankruptcy examiner’s report coverage.
Plus, it was the end of busy season so people were likely at their wits end. At said town hall, the raises promised by Americas Managing Partner Steve Howe back in January were reassured.
Despite this message, Steve Howe sent out a triple-reassuring message yesterday to everyone that wasn’t listening and/or didn’t get the communiqué:
Stevie Howe just sent out another long VM confirming raises this year. On a related note, FSO sent out a note about accelerating the annual review process to account for the expedited compensation review process.
Another source told us that more details are to come on an upcoming webcast, and because of the “expedited comp review” process, it has been suggested that the merit adjustments may occur earlier than usual. Right now, our source speculates that it will go down in August but no hard date has been thrown out there. Keep us updated.
Two weeks ago, we heard that Grant Thornton’s Cleveland office started their layoffs a little earlier than what on might expect that was followed by an emergency meeting that the content of which is still a mystery.
Now we’ve received word on Chicago and New York who are rumored to be having layoffs and some quitters respectively.
From a Chipman Blog Reader:
I work in audit at Grant Thornton and have heard through the grapevine that offices are trying to keep staff. With the job market improving, it seems like other offices are looking to see if staff/seniors voluntary leave before making any final decisions pre-promotion day. Chicago has let go a partner and 2 senior managers in the audit practice and rumors are swirling of a few staff reductions, which seems crazy given that the current A1 class and the incoming class are so small. For other offices, national is working to roll out a benefit plan practice similar to what Chicago has to help keep staff busy during the summer months but it looks like this is not moving quickly enough….[T]he GT wire is that NY saw 10+ individuals put in their notice recently.
We left messages with both the Chicago and New York offices, neither of which have been returned.
An accountant close to the situation indicated that the partner and senior manager layoffs are part of those mentioned by Stephen Chipman back in January.
At that time, SC said that many of those partners and senior managers were already being notified, so since these most recent cuts knew that this day was coming, it was awfully generous of them to stay on for this busy season (we’re guessing there was money involved).
As far as the the staff situation in Chicago is concerned, cuts at the staff level do seem crazy if the classes are small. Meanwhile, although some attrition in New York was probably expected, at this point, it’s not clear whether 10+ leaving in mid-April is a lot or a little. Keep us updated.
After Grant Thornton sprung into layoffs ahead of everyone else (based on what we’ve heard anyway) on Tuesday, the Cleveland audit practice leader apparently arranged an impromptu sit-down to discuss some things, among them, the headcount.
From an accountant close to the situation:
They let go of an A2 on Tuesday also. The audit practice leader then called an emergency audit dept meeting referring to us as “inventory” and that they were “managing the pipeline.”
We left another message with GT Cleveland to see if we could get a copy of the minutes or something but no one is calling us back.
Regardless, we get the “inventory” analogy but in this case, the inventory happens to have rent/mortgage and possibly a cocker spaniel or other human beings to feed. But seriously, we still get the analogy.
Taking it a step forward, was the “inventory” all that was discussed? Something else could have come up, say Stephen Chipman’s blog? Speculating about the whereabouts of Gabriel Azedo? Arguing over Indians tickets for Monday? Any other ideas? Discuss or let us know.
That “All-Hands” meeting we told you about on Monday sounds like it was a real snoozer, however, a source who was there did share two interesting details:
The guys in charge basically told us the following:
– They handled the [May 2009] “headcount adjustment” poorly. It was a necessary action; but more communication was necessary to keep people informed.
– Deloitte is better poised to grow over the next few years as compared to their competitors (we saw projections, but no comparisons…)
That took about 1.5 hours.
Since this was an “all-hands” we’re assuming tax people were there? If so, the ones still trudging towards the 15th (one week!) had to be suffering borderline panic attacks. Or maybe it was a brief oasis? Either way it’s unfortunate that nothing came up about increase in comp. Maybe Deloitte is the one firm that is saving it as a big surprise. If the cat gets let out of the bag on comp, get in touch with us.
From Casa de Chipman:
A manager, a senior III, and senior II were quietly let go yesterday. In addition, the conference rooms are booked for today. I have not heard from other offices, but the Cleveland office appears to be kicking off the race early.
Seems early but our source indicated that these were audit professionals and we’re sure each office has their own method to the madness. Layoffs as this level were also not mentioned by Stephen Chipman during his firm-wide call back in January, although many have indicated that they would be happening regardless.
We left a message with the Cleveland office’s HR but so far we haven’t heard back and GT’s national PR has not responded to our email. If you’ve got an unexpected meeting coming up or have more details, get on the horn.
Charlie Gasparino is reporting that the SEC probe in the Lehman Brothers bankruptcy is “ramping up” and that the Commission is under hella-pressure to bring civil charges against Dick Fuld, Ernst & Young and whoever else is on the list.
It’s unclear if the SEC can muster the necessary proof to show that top executives like former CEO Richard Fuld or the firm’s outside auditor Ernst & Young intentionally misled investors about the health of Lehman’s balance sheet in the months before it filed for bankruptcy in mid-September 2008, according to people close to the probe…It’s unclear when any charges might be filed by the SEC, but people close to the inquiry say the SEC believes it does bring one, it must do so “very soon,” possibly within a few months given a combination of the outrage over the report’s findings and that Lehman’s bankruptcy is going on two years old.
Okay, so things are urgent but not that urgent. It’ll be Father’s Day maybe the 4th of July by the time we get a Mary Schapiro smackdown.
But that’s not all! Things are really serious at Ernst & Young now because Charlie reports that E&Y “has hired high-profile white-collar attorney William McLucas as its outside counsel in the matter, people close to the firm say. McLucas had been the SEC’s enforcement chief before entering private practice.” We checked with our friends over at ATL and it turns out that Mr McLucas is a partner at high-powered WilmerHale and was lead counsel to the special committee of the Enron Board that reported “hard-hitting findings” (sayeth he).
Since Mr McLucas doesn’t take shit from the likes of short-seller Jim Chanos, we’ll take Charlie’s word that things are pretty serious over at 5 Times Square.
E&Y spokesman Charlie Perkins declined to comment.