Tag: Speculation

Let’s Speculate About: Grant Thornton’s ‘Major Brand Repositioning’

As we mentioned this morning, Accounting Today reported – in an exclusive with Stephen Chipman! – that Grant Thornton is “planning a major marketing campaign later in the year to reposition the Chicago-based firm around the world.” Having had the luxury of watching a rival firm go through the process, we can’t help but think that GT won’t make as bold of a change but we’d love to be wrong about that.


Chipman told AT that GT wasn’t trying to jam into the Bigs saying, “We made it clear that we’re not building a firm to audit GE. Let’s get clear about the verticals and the skills.” So if you take SC at his word what exactly will this major brand repositioning involve? Some initial thoughts:

1. Underpants Gnome Accounting will become a specialty advisory service.

2. Poaching a certain golfer from a competitor.

3. Opting for pastel pinks and blues in a new logo to provide an “alternative.”

4. Four words: Gary Busey, Tax Partner.

5. Your ideas.

Dave Scudder Resigning as McGladrey Managing Partner

McGladrey has announced that this busy season will be managing partner Dave Scudder’s last. Technically, Scudder is the MP of McGladrey & Pullen but honestly, we were confused about the whole situation after the rebranding.


From the press release:

The McGladrey & Pullen, LLP Board of Directors announced today that Dave Scudder, managing partner and member of the Board, has decided to resign as the managing partner of the Firm effective April 30, 2011.

“Dave is highly respected by the partners and has lead the Firm through significant change,” said Jerry Bourassa, Chairman of the McGladrey & Pullen Board of Directors. “He has contributed tremendously to the success of the Firm and has been an exemplary leader.”

The Board has commenced a selection process to ensure a smooth and timely succession and transition.

“I believe the Firm is well positioned to continue its success in serving our target markets including private equity groups and their portfolio companies along with our public and international companies practice,” said Scudder.

Scudder will continue to assist in the transition through at least June 30, 2011, and will continue to represent the Firm in various professional and industry organizations during this time.

So you could easily conclude that DS just figured it was time to move on after spending the last 24 years at the firm. You could also easily conclude that with all the excitement that has occurred at firms with various forms of “McGladrey” in the name may have taken its toll with Scuds or perhaps with the McGladrey board. Then again, they could be making room for another golfer that isn’t Natalie Gulbis.

Reactions and speculation are welcome at this time.

Some People Aren’t Convinced Nancy Pelosi Wants to Compromise on Tax Cuts

President Obama is darn sure that a deal will get made on the expiring tax cuts before the end of the year despite the ‘logjam’ between the two political parties.

He’s confident because hard-working families need it, the economy is fragile yada yada yada and now that Tim Geithner and OMB Director Jack Lew are on the case, this thing is a shoe-in.

While the next Speaker of the House, John Boehner, is not quite on the same page as the President, he’s pretty much in the same chapter:

“Republicans made the point that stopping all the looming tax hikes and cutting spending would, in fact, create jobs and get the economy moving again,” said Representative John Boehner, who will become Speaker of the House next year.

“We’re looking forward to the conversation with the White House over extending all of the current rates, and I remain optimistic,” he said.

Well, as close as to the two will likely get in public anyway. However, this a slightly more optimistic stance than what some people have for Nancy Pelosi, who would, presumably, rather give up her Armani suits than hand the wealthy a tax cut:

“There is some thought that the last thing that Nancy Pelosi wants to do on her way out of the Speaker’s office is to have Congress approve an extension for tax cuts for the wealthy,” said Brian Gardner, an analyst for investors at Keefe, Bruyette and Woods.

“She could muck things up a little bit.”

Well! This should be fun! Stay tuned.

Obama and Republicans agree to negotiate on taxes [Reuters]

Deloitte Is Eyeing Some Germans

Namely, Roland Berger Strategy Consultants based out of Munich.

Supposedly the two will have their minds made up sometime next month but by the sounds of it, the two companies are flippin’ stoked about the possibilities:

“A merger opens up a unique opportunity for growth for both firms,” [Deloitte Germany Chief Executive] Plendl said.

Roland Berger confirmed the talks.

“Discussions with Deloitte are taking place to open new and fascinating growth prospects for our company,” Roland Berger Strategy Consultants said in an e-mailed statement today.

While that’s what is going in the foreground, Adam Jones over at the Financial Times was so bold to suggest that this just another step in Deloitte’s quest to “overtake McKinsey as the market leader in strategic advice for managers.”

Now we hadn’t heard about this McKinsey-slaying goal prior to today and it seems a little credulous to think that Deloitte is jockeying with McK, especially when you consider the domination of McKinsey in the eyes of those who work in the industry.

However, on paper Deloitte derives $7.5 billion from its consulting business which is nothing to sneeze at. Considering that and the fact that they haven’t exactly made their desire for mergers a secret, Deloitte this very well could be a step in earning another #1 notch in their belt (with matching suspenders).

Is Citi One of the Issuers in the PCAOB’s Inspection Report of KPMG?

The long-awaited PCAOB inspection report of KPMG came out on Friday and while we were excited for this unveiling, the Board managed to issue the report at around 4 pm on Friday. Since the Board lacks any sense of timing whatsoever, we opted to punt on our respective post until today because well, we’re human and not a soulless blogging robot as likely perceived by TPTB at the PCAOB.

It’s worth mentioning that this is the first PCAOB report that has been issued since the SEC’s final rule on the inspections that allows audit firms to postpone the release of the report simply by taking issue with any of the findings. Since any appeal could reportedly delay the report by “30 to 100 days,” it’s safe to assume that, with a report date of October 5th, KPMG didn’t have a beef with the findings. You could also assume that since the SEC is taking a peek at these reports now, there’s going to be a ten day lag on the release of the report to allow the Commission enough time to give it their extra-special sniff test.

Anyway, back to the matter at hand –

KPMG had eight issuers noted in the Board’s inspection report and the first two are doozies. “Issuer A” runs approximately two pages and includes failure on testing of “allowance for loan losses” to “test[ing] the issuer’s estimates of fair values of financial instruments” and goodwill impairment.

“Issuer B” is a little more interesting since one of the failures the Board found was related to deferred tax assets which makes us wonder if this is Citi, since analyst Mike Mayo was loudly questioning the bank’s treatment of its DTA. Francine McKenna not-so-subtly solicited guesses on Friday as to who this “bank” might be (even though no issuer is identified as such) but it does make us wonder.

The Board cites run-of-the-mill failures for the rest of the issuers (e.g. fair value testing, pension plan testing, failure to confirm cash[!]) and the House of Klynveld’s response letter was cordial and anticlimactic.

But if you’re KPMG, do you really care what the PCAOB thinks when you’ve got an adorable gnome-ish looking analyst giving you the tepid thumbs-up (despite not knowing your name)? That’s the only endorsement we would need.

2010_KPMG_LLP

Let’s Speculate About: The Oddly Similar Logos of PwC and The Gap

Last month we learned about PwC’s new look to welcome that portrayed beauty and majesty of autumn. That and it reminded us something that Harry Pitfall might encounter if aliens landed.

Anyway, people have their opinions on the new look and Bob Moritz is okay with that as long as it doesn’t concern the color or shape.

The latest twist in this seemingly unending logo-mama drama was brough to our attention by a reader who saw an eery resemblance between PwC pwc’s new look at the new look of recently rebranded and ridiculed retailer The Gap.

Caleb,

Does is strike you as odd that soon after PWC changes their logo the GAP changes theirs to a similar style? Although Deloitte is currently GAP Inc. auditors, the company may be opinion shopping. Changing the company logo to look like their would be auditors’ is a surefire way to get the desired opinion.

This may be a total coincidence. However should GAP grab headlines in the style of the Universal Travel Group and hop over to PWC, at least now you won’t be surprised.

Our reader brings up an excellent point. We admit that the new logos aren’t identical but there’s more than a slight chance that they are brothers from another mother. So what’s the deal here? Maybe it is a coinky-dink. But then again, you would think that the cheap denim, khakis and plain t’s business would be thriving in this economy. If our reader is to be believed, Gap may be trying to find an auditor that’s willing to look the other way on [ideas on financial reporting chicanery are welcome]. And it just so happens that a certain professional service provider has also been recently taken some heat for their rebranding.

The only thing we can be sure of is that if Ernst & Young is serious about their makeover, they should resist the temptation to stick with squares.

Like we said, the motives here are not obvious and it’s imperative that we get to the bottom of this mystery, so that involves getting your ideas. Nothing is too crazy.

Local Man Assumes Tagging of Racial Slurs on Building Is Related to an IRS Audit

Because what else could it be?

Police are trying to figure out who sprayed racial slurs in the parking lot of a Hall County building that includes offices for the Internal Revenue Service. The messages invoking the Ku Klux Klan, and obscenities directed at African-Americans were discovered by employees as they arrived to work.


Odds aren’t that bad; approximately 1 in 6. Still doesn’t explain why invoking the Klan was necessary.

The building on Oak Street in Gainesville is home to nearly a half-dozen businesses, including an IRS office. Police told Channel 2’s Diana Davis they had no evidence linking the slurs to one person working in the building.

One employee speculated that the vandals may have a beef with the IRS. “Probably someone was being audited and they were frustrated with the situation and process they were going through. More than likely this is the result of that,” said Christian Saslo.

Racial Slurs Found Outside IRS Office [WSBTV]

(UPDATE) Will the Herz and Tweedie Retirements Put the Kibosh on Convergence?

~ Update includes comment from IFAC President Robert Bunting of Moss Adams

Maybe! After all, anything’s possible. The Herz retirement wasn’t exactly expected but since Roberto had two years left in his terms but it’s been suggested that it’s been a rough two years since Barney Frank gave him the tongue lashing of his life over the whole mark-to-market thing.

Regardless, The Journal put it out there that the timing of Herz’s departure causes hella handwringing, most notably on the convergence efforts:

FASB will now have to replace Mr. Herz at the same time that the IASB is alreadycessor to its chairman, David Tweedie, whose terms expires in June 2011. This means that both bodies will have new heads as they enter what could prove to be the end game for the often-thorny process of converging two accounting standards.

This, of course, causes the U.S. GAAP Hawks to squeal with glee and those in pro-IFRS camp to get anxious and will likely lead to heavy lobbying for a replacement that will keep Tweeds dream alive for “one high quality set of global standards” or whatever they’re calling it these days.

Despite the Journal’s anxiety, International Federation of Accountants President Bob Bunting sees the change as an opportunity and things will continue to progress, “While the changes of leadership at the FASB and the IASB offer the opportunity for a fresh look at the convergence process, I would be surprised if any radical change in direction occurs,” Mr Bunting wrote in an email to GC, “The financial market forces and public interest arguments for convergence of the two standards, and possible eventual adoption of IFRS as a single standard continue to be very strong.”

However, since the FASB is expanding back to seven members, that will likely slow the process down (which makes some people happy) even further, especially with empty seats at the table:

The lack of a full board is likely to slow many of FASB’s projects, particularly the move to converge with international rules, said former FASB Chairman Dennis Beresford. “They’re not going to issue anything important on the basis of having only four board members,” he said, adding that Mr. Herz’s departure came as “a complete surprise.”

So, with those seeds of doubt planted, let’s put it to a vote.

Early Exit of FASB Chairman Raises Anxiety [WSJ]

Let’s Discuss: Big 4 Merger Rumors

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

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

EisnerAmper is a perfect example.


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

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

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

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

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

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

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

All This Talk of Deloitte’s “Double Digit Growth” Has People Wondering

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.

Compensation and Bonus Watch ’10: Who Knows BDO?

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.

Who Will Deloitte Buy Next?

Deloitte CEO Barry Salzberg did a little sit down with the Journal and made it perfectly clear that he’s shopping for another acquisition. The BearingPoint transition seems to have gone as well as Dr. Phil could have asked for and now he’s ready to move on to the next one.

But who?

Mr. Salzberg declined to name specific future targets, but said he sees opportunities to build scale in areas including environmental and technology consulting.

“I would be very willing to make another and very willing to position ourselves properly for the right kind of acquisition or a combination in the market.”

The Journal article mentions the recent rumors around Booz & Co. merging with A.T. Kearney but BS wasn’t that hot on the idea (even though D could take both either of them no prob) saying that they aren’t, “‘as high a priority for me’ as other opportunities.”

Plus, Salz is hoping that he can offering something tangible for a change rather than just billing all your hours out, “He cited a newsletter, or ‘information services,’ as an example of something that isn’t as labor-intensive as consulting but provides a complementary service to clients. Such a business ‘isn’t as dependent on the hourly production of people,’ he said.”

No target is too big or too small, according to Salzberg but like we mentioned, he’s not naming names. So let’s try and read his mind a little bit, throwing caution to the wind – McKinsey? DiversityInc Magazine? The Hair Club for Men?

Suggestions, sincere wishes and wild-ass guesses are welcome.