This is quite the impressive move by Bravo Delta Oscar. The firm issued this press release earlier today: BDO USA, LLP, one of the nation’s leading professional service organizations, today announced an expansion of its financial institutions practice through the addition of 12 partners and as many as 97 employees formerly with the banking practice […]
Welcome to the latest Recruiting Season Q&A. This is where we answer several questions from anxious accounting students. Remember, you won't know if your question is stupid unless you ask. Email your query to email@example.com with "Recruiting Season Question" in the subject line. Just a reminder – we're compiling the starting salaries for new associates […]
Anyone that's ever had the pleasure of being exposed to any batshit crazy televangelists have not only thought, "Why, God, why?" but also, "I bet they're totally ripping people off," or "He probably frequents hookers." And you'd be right! Today in PTL shenanigans, we have Paul and Janice Crouch who are part of the Trinity […]
I believe this particular PCAOB-hostile grunt has spoken: Dear Mr. G – I hate to break this to you, but accountants do not respect the PCAOB. We HATE the PCAOB. This organization does nothing but bring misery to our lives, for no matter how good our work product is, this group comes along and finds […]
Yesterday afternoon, a couple dozen people occupied the lobby at PwC's Washington, D.C. office for around 30 minutes. Things didn't get too exciting, as police were on the scene quickly and "nudged the protesters back onto the sidewalk," but the building did go on lockdown for a couple of hours which is NBD unless you're […]
It's not really that odd that someone would sue an auditor for $100 million. It's also not unusual that a company (usually through some PR flak) would publicly rebuke the auditor in a news report or press release. What is unique is a company issuing a press release announcing their lawsuit against their audit firm that […]
Accountants are not without their vices. Whether it be booze, sex, or DVRing every single HBO TV series, we all know someone who can’t quite break the spell of certain pleasures in life after they become addictive. Today in double-entry junkies, we meet David Harding. David loves sausages. He loves them so much that he has eaten at least one a day since the age of five. He loves them so much that he has undergone hypnosis to try and conquer his craving of salty pork links. He loves them so much that he was willing to do a live audition for the “Gluttony” role in Se7en.
Okay, I made that last part up but this accountant LOVES SAUSAGES:
A father-of-three has become the first person in Britain to undergo counselling after developing an unusual addiction to sausages. David Harding, 47, has paid out almost £2,000 in an attempt to beat his bizarre habit, which sees him eat up to 13 bangers per day.
Now if you think this is merely a man who lacks self-control, you’d be wrong. This is obsession, my friends:
He said: ‘I genuinely cannot bear the thought of living without sausages. ‘Drug addicts crave their medicine of choice, and it’s the same for me – except that my drug is a banger.’ Accountant David has eaten at least one sausage per day – in sandwiches, fry-ups or main meals – since the age of five. He spends up to £700 per year on bangers and has even bought a deep chest freezer to store the vast quantities of his favourite McWhinneys Irish pork sausages. David realised he could be an ‘addict’ last year when wife Susan decided to do ‘something different’ for dinner and failed to serve-up his usual fare. He said: ‘I went a bit mad at the thought of it. It threw me completely off-track. It was then that I realised something wasn’t quite right and sought professional help.’
As for these McWhinneys folks, they’re taking this in stride, much like a Philip Morris exec might:
McWhinney’s Sausages MD, Kevin McWhinney, said: ‘We are pleased that this gentleman likes our sausages, but wish him well in his quest to control his habit.’
On Monday, we reported on Longtop Financial Technologies was the latest Chinese company to have their CFO quit, auditor resign and be accused of being a massive fraud. This particular story was interesting as one of the reasons cited by Deloitte for dumping LFT included “the unlawful detention of DTT’s audit files.” These accusations were described in much more detail in Deloitte’s letter to the company’s audit committee that was filed with the SEC and you may even conclude that the staff were thisclose to being hos
We italicized and bolded the best part.
The Audit Committee
Longtop Financial Technologies Limited
No. 61 Wanghai Road, Xiamen Software Park
Xiamen, Fujian Province
People’s Republic of China
Attention: Mr. Thomas Gurnee, Chairman of the Audit Committee
Longtop Financial Technologies Limited (the “Company”) and together with its subsidiaries (the “Group”)
Audit for the Year Ended 31 March 2011
We hereby give you formal notice of our resignation as auditor of the Company.
Background and significant issues encountered by Deloitte Touche Tohmatsu CPA Ltd. (China) (“Deloitte”)
As part of the process for auditing the Company’s financial statements for the year ended 31 March 2011, we determined that, in regard to bank confirmations, it was appropriate to perform follow up visits to certain banks. These audit steps were recently performed and identified a number of very serious defects including: statements by bank staff that their bank had no record of certain transactions; confirmation replies previously received were said to be false; significant differences in deposit balances reported by the bank staff compared with the amounts identified in previously received confirmations (and in the books and records of the Group); and significant bank borrowings reported by bank staff not identified in previously received confirmations (and not recorded in the books and records of the Group).
In the light of this, a formal second round of bank confirmation was initiated on 17 May. Within hours however, as a result of intervention by the Company’s officials including the Chief Operating Officer, the confirmation process was stopped amid serious and troubling new developments including: calls to banks by the Company asserting that Deloitte was not their auditor; seizure by the Company’s staff of second round bank confirmation documentation on bank premises; threats to stop our staff leaving the Company premises unless they allowed the Company to retain our audit files then on the premises; and then seizure by the Company of certain of our working papers.
In that connection, we must insist that you promptly return our documents.
Then on 20 May the Chairman of the Company, Mr. Jia Xiao Gong called our Eastern Region Managing Partner, Mr. Paul Sin, and informed him in the course of their conversation that “there were fake revenue in the past so there were fake cash recorded on the books”. Mr. Jia did not answer when questioned as to the extent and duration of the discrepancies. When asked who was involved, Mr. Jia answered: “senior management”.
We bring these significant issues to your attention in the context of our responsibilities under Statement on Auditing Standards No. 99 “Consideration of Fraud in a Financial Statement Audit” issued by the American Institute of Certified Public Accountants.
Reasons for our resignation
The reasons for our resignation include: 1) the recently identified falsity of the Group’s financial records in relation to cash at bank and loan balances (and also now seemingly in the sales revenue); 2) the deliberate interference by the management in our audit process; and 3) the unlawful detention of our audit files. These recent developments undermine our ability to rely on the representations of the management which is an essential element of the audit process; hence our resignation.
Prior periods’ financial reports and our reports thereon
We have reached the conclusion that we are no longer able to place reliance on management representations in relation to prior period financial reports. Accordingly, we request that the Company take immediate steps to make the necessary 8-K filing to state that continuing reliance should no longer be placed on our audit reports on the previous financial statements and moreover that we decline to be associated with any of the Company’s financial communications during 2010 and 2011.
We hereby consent to a copy of this letter being supplied to the SEC and the succeeding auditor to be appointed.
Section 10A of the Securities Exchange Act of 1934 (U.S.)
In our view, without providing any legal conclusion, the circumstances mentioned above could constitute illegal acts for purposes of Section 10A of the Securities Exchange Act of 1934. Accordingly, we remind the Board of its obligations under Section 10A of the Securities Exchange Act, including the notice requirements to the U.S. Securities and Exchange Commission. You may consider taking legal advice on this.
/s/ Deloitte Touche Tohmatsu CPA Ltd.
c.c.: The Board of Directors
For many of you in public accounting, the idea of becoming a partner in your firm is either a career aspiration or a thought that borders on lunacy. A few might fall in between those two spectrums but if you ask most people, they’ve got a pretty definitive answer on the “do you want to be a partner?” question.
Awhile back we received a message from a former Big 4 rank and file who had some thoughts on the matter:
When you enter Big 4 as an associate, the assumed goal is to make Partner. This seemed like a great goal at first, kind of like making it to the 12th grade in high school, or getting a degree (or two) from a good college. Or maybe even being voted in as the President of your sorority or fraternity. Take your pick. It’s the culminati ed work, dedication, a little luck and a dash of favoritism from the Powers on High. However, the more I worked in B4, and the more I saw the “pyramid” continue to rear its ugly shape, I became appalled that anyone could WANT to be Partner.
We’ll just briefly chime in here to say that equating high school graduation to making partner is a bit of stretch (and we let a lot of things go). We know lots of people that graduated high school that could barely operate velcro sneakers.
Back to the rant:
The obvious reasons why someone would want to make Partner? Money, fame, money, power, money. Let’s be honest, it’s pretty much just for the money. But at the cost of what? More often than not: a tough family life (perhaps divorced, an affair or five, missed family dinners), working on the weekends, hardly seeing your kids due to work (e.g. weekend working, wining and dining clients, etc), and – the part that disturbed me the most – the fact that you are making your money from the “blood, sweat, and tears” of the miserable little minions working til all hours of the day and night for YOUR profit. I honestly don’t think that I could ever, in good conscious, become a partner, knowing the levels of stress I (directly or indirectly) put on my little “worker bees.”
Okay, time to jump in – to insinuate that partners (and aspiring partners) are simply motivated by money is silly. For starters, most partners will never pull down the salaries that the Jim Turleys and T Fly of the world are pulling down. Secondly, there are plenty of people working in public accounting – believe it or not – that really enjoy the auditing/tax/advisory work they do. If this is something an individual is aspiring to do long-term, having some skin in the game (“your profit”) is a worthwhile goal.
As for as personal lives go – more than 50% of human beings that get married end up getting divorced, so that’s weak and most partners (at least in our experience ) are not the lady-killer/man-eaters that you describe.
Perhaps it is this mentality alone that makes me wholly unfit to ever be a partner or even a C-suite bigwig. Perhaps being a female I see the dog-eat-dog corporate world at a level that is far too emotional and compassionate.
But then again, who knows? Perhaps, hypothetically, by the time I finished the long uphill journey to Partner, clawing my way to the top, I would be so engrossed by the money and power that I wouldn’t have the time or space in my thoughts to think of the “little people” that were making my money-making factory churn. I would be immune to their complaints, responding with, “Stop your whining. We’ve ALL been there before. Just keep putting in your time, and everything will turn out okay.”
“Engrossed by money and power”? Now we’re getting ridiculous. This is public accounting, not an über-competitive hedge fund or the hallowed walls of the U.S. Capitol.
Once you make partner, the struggle is just beginning. Being at the top of the totem pole for an individual team might seem like a powerful spot but it’s anything but. The politics reach a whole new level when you make partner that most of us can’t even imagine. So, while you may think that partners consider staff and managers “little people” many of them probably feel like little people as well. Plus, they have significant (and sometimes grossly unrealistic) expectations placed on them, so any pressure you’re feeling, they’re likely feeling it as well.
Partners are still human and they have to make hard decisions that affect people directly and most of them are consciously aware of this. How each of them handles that responsibility is obviously different but you make them sound like soulless robots and that’s simply not the case.
So what’s the motivation, partners? If our reader is right, then proceed to tell us your stories of fame and fortune (yachts, trips to Monaco, et al.). But if you want to set the record straight then we invite you to level with the haters out there.
The Partner Track: Open Thread