Maybe you heard, but the Supreme Court ruled on Friday that same-sex couples would be […]
“India is an extremely important market for Deloitte. As…Opportunities in the new economic environment emerge in India, Deloitte with its focus on hiring, developing, and deploying the best talent in the region, will help clients capitalise on these new market initiatives,” Deloitte Global CEO Jim Quigley told reporters here.
Right. So nothing new there. However, Quigs thinks that it’d be really swell if TPTB in India would change their mind about letting the Big 4 provide audit services there:
Quigley also made a case for India to open up its market and allow global audit firms to practice here, besides providing consulting and advisory assistance.
Allowing international accounting firms to practice here would require India to negotiate and allow the service to be accessed under the World Trade Organisation (WTO). At present, India has not opened up services like audit and law for foreign practitioners.
“I urge the Indian authorities to give a serious thought to allowing global audit firms to practice here. It is for the betterment of accounting professionals. A mutual recognition is required out of foreign direct investment,” Quigley said.
See? It’s not just about the biggest firm in the known universe getting bigger, it’s for the betterment for the entire accounting race. There’s so much fun to be had. The Satyams of the world are once in a blue moon.
After Tomorrow, a Bunch of Losers Will Have to Quit Their Pouting and Come Up with Some Tax Policy Solutions
Lots of those losers will be Democrats. And if they feel like sticking it to the rich one last time, at least they can say a Reagan OMB Director and Bill Gates are on their side!
While some people are still sweating out to hear if they’re part of the new manager class, John Veihmeyer and Henry Keizer did more casual chatting with the troops and this time it was about everyone’s favorite topic to bitch about – compensation.
Specifically, some e asking about raises for FY ’10 and 401k match. Strange thing is, JV has already addressed the issue of KPMG raises in a previous communiqué by saying:
“[B]y year-end, we fully expect that the pickup in market and business conditions will drive compensation increases for the vast majority of our people. Also, assuming we meet our plan, as we are on track to do, our goal is to enhance our variable compensation pool from last year—meaning higher bonuses than last year for EP performers as well as bonuses for deserving SP performers.”
Good thing he doesn’t mind repeating himself:
Inquisitor #1: I was just wondering, if it’s likely that employees will get raises this year?
Veihmeyer: We are very optimistic at this point that that is exactly what’s going to happen. We all need to stay really engaged in what’s going on in the marketplace at this point to make sure that the second six months of our fiscal year also tracks the plan that we put in place. If we do that, we are very committed to sharing the rewards appropriately across KPMG.
As we assess the market right now – means that the vast majority of our people will be getting compensation increases this year. We are just as committed to increasing that variable compensation pool to the maximum extent we can reflective of how our results play out over the next six months.
Keizer: And in terms of variable compensation at the EP level that will translate into larger rewards and our deserving SP performers will also receive compensation rewards.
I am confident – based on what we see out in the marketplace, the foundation we have within the firm, the indicators of economic vibrance that are coming back – that we will be able to reward our people better and to be able to restore some of the things that we had to eliminate in a very measured and prudent way.
And John Veihmeyer was just wondering why you didn’t read his previous statement (or websites where it might appear) on the matter. Since V seems like a nice guy he managed to say what he said before only this time without saying “Yes” outright. Whether the absence of this explicit confirmation is a cause for concern can only be determined by you. Hank chimes in about the bonuses, presumably so he doesn’t feel awkward (at least that’s how we picture it).
So what about the 401k match? Is that returning to pre-financial apocalyptic levels?
Inquisitor #2: You mentioned earlier that we recently brought back the Standing Ovation award into the Encore program. Can we expect to see a change in our 401K match?
Veihmeyer: With an eye toward maximizing the immediate financial rewards to our people – to a level that we all can feel good about – we have some goals and objectives around base and variable compensation that in our view will take precedence over 401K as we reinstate and are able to shift those rewards. But it’s something that if the circumstances change and our ability to reinstate some of those things evolve, we will continue to look at it.
In a word – No. First things first you rubes – We’ve going to get every single Klynveldian feeling great about their immediate financial rewards. Until that is accomplished, your retirement will have to wait. The time frame of “we all feel good” was not given.
This time of year, the leadership at your firms are on a communication offensive because you all just went through hell. They want to whisper sweet words in your ears so that you keep the faith in them and your firm.
Today we bring you a little taste of some of those sweet words courtesy of the C-suite at KPMG.
Newly nveld, John Veihmeyer was joined by Tim Flynn, COO Henry Keizer, along with some inquisitors for a grueling Q&A that should re-energize you for summer.
Conversations with Leadership
How Are We Doing?
Flynn: First one up gets the mike.
[Prepackaged Inquisitor #1]: Are we on track? How is it going? What challenges have we faced?
Flynn: I think the foundation for recovery is being laid. And I think it started, obviously, in Asia. It’s moving its way through the U.S. Things are better than people had predicted three or four months ago. And we saw retail sales today came out with improvement – consumer confidence being up. So all of those things are signs that we’re on a path for recovery. And now the question is, how does that translate into our business?
Veihmeyer: We’ve built a plan that was consistent with our expectation of what that marketplace was going to be. First half of the year continuing to be a very challenging marketplace, with a gradual increase in marketplace activity as we got into the second six months of our fiscal year. So what have we seen to date? Our results have tracked what we expected. We are actually slightly ahead of plan, six months through our fiscal year, which is the great news.
And I think everyone should feel really good about that, particularly as you look at what we’re seeing in some of the businesses – Advisory, which was clearly hard hit by the lack of spending and the curtailing of a lot of initiatives on the part of our clients, have had very strong months the last several months. And that corner seems to have absolutely turned.
And we are just beginning to see, I think, the things that really impact Audit and Tax around some of the transactional activity that really drives those incremental services that make a big difference in Audit and Tax – that’s starting to come. We expect that to translate into greater revenue over the second six months.
Quite the trifecta of vague brainteasers PI #1 had. But without being very specific, and using a couple of banal metaphors, JV and T Fly are confident that everything is cool, thanks to China and India. Europe isn’t worth mentioning, that’ll blow over. Advisory was on its deathbed but things are bouncing back. Audit and Tax are far less sexy but they’re cash cows. They might see a little more action if Advisory started showing more skin.
[Prepackaged Inquisitor #2]: My name’s [Prepackaged Inquisitor #2]. I just wanted to ask about the new role of the office managing partners, focusing on just going to market.
Keizer: By focusing the office managing partners really on two areas: one, growth of our business, and also our people. So the office managing partners teamed with the functional leaders, and the professionals within geographies, and looked outside into the marketplace, and which companies fit that criteria—impactful to our brand, our people, great growth, and profitability opportunity.
From that exercise, across the country, over 1,600 companies were identified. A process was then undertaken to actually assign specific resources. As we sit today, and we take that population of companies and say, how are we doing? The revenue growth that has been realized in our first six months, in that population, has exceeded our normal portfolio of clients. So it’s showing, again, at an early stage, focus, and a prioritization of where we want to strategically go, does translate into opportunity and revenue.
Flynn: If there’s one message that comes out of this, just one message to everybody here listening – is that the one thing we know for certain—we are not short of opportunities.
We have tremendous opportunities what’s happening around the world. The key is, how do we align our resources, look at our investments, develop our people’s skills to capitalize on those opportunities? So from a standpoint of the future – there’s tremendous opportunity for all of you, and for our businesses, as we go forward.
Your local bigwigs are out there digging up biz because things have gotten a little more competitive than we would like. We can’t simply rely on a sexy Masters Champion in every RFP so they’re getting their hands dirty for a change. Plus, from where we stand, there’s plenty of business out there so if they don’t get the job done, we’ll probably go to the bullpen.
If you’ve ever worked at a Big 4 firm, you’re aware that when big news hits the MSM, A) it’s never good and B) there is typically some sort of communication from management reiterating the firm’s position on the matter, everything is cool, thanks for your hard work, etc. etc.
With last week’s revelation of the bankruptcy examiner’s report on Lehman Brothers, E&Y seems to be following this protocol as it relates to the troops on the ground. As you would expect, leadership is keeping their heads about this while in the background in-house counsel is likely engaged in all-night smoky room strategy sessions.
We checked in with a few of our Ernst & Young sources to get an idea of what people were thinking and so far, there doesn’t sound like there are any signs of panic (yet!).
From one source:
Overall reaction from what I gathered is pretty muted. We did get a call from some of the higher-ups saying that we reviewed our work and that we feel that our audit was completely adequate and that Lehman’s failure was nothing more than the same systemic failure of two of the other major banks and that we plan to defend ourselves vigorously. Presumably, the examiner’s report really didn’t give any ah-ha moments….
[I]s there a possibility of a payout at some point? It’s possible. Are we worried that we’re the next Arthur Andersen? I don’t think so.
So at least on the surface, E&Y leadership is communicating that what came out in the report wasn’t surprising and that the defense of the firm’s position will be, as usual, vigorous.
That doesn’t of course stop the speculation:
I heard from a technical guy there was some concern because they didn’t issue a going concern opinion [for the previous audit].
And as you might expect, “I heard that [the firm] helped cook the books and is deep shit,” with the book cooking being arguable but pretty hard to prove and the “deep shit” aspect being a given.
Some Ernst & Young partners are probably losing sleep just thinking about the potential liability involved here but eventually they’ll get over it (until something else comes up).
No partner worth their salt got admitted to the partnership focusing on the downside. The problem is that when people use consistently use words like “deceptive” and “misleading” to describe Lehman’s accounting this reflects poorly on the firm since they were comfortable with the treatment.
And because it’s still busy season for a lot of people, they are focused on the shitstorm that currently surrounds them, not one that will likely drag on for years after they’ve left the firm (voluntarily or otherwise).
Anyone with more insight or thoughts on the matter, get in touch with us and we’ll keep you updated on the chatter inside E&Y.