A year ago TODAY we did the et al. compensation thread for any and all accounting firms that typically fly below the radar, so it seems fitting that we would mark the occasion again on August 29th. Plus, someone at Rothstein Kass is practically begging us: Can you please open a compensation thread for Rothstein […]
We might be a little late to the party on this but it just recently came across our desk and since trying to get a post up today is akin to turning water into wine, we’re running with it. And, frankly, if a large portion of you regularly read the “Public Accounting Report” we’ll be blown (BLOWN!) away.
The determination of the ranking isn’t entirely clear to us so we’ll just go for some superficial analysis on Crowe Horwath (#1 on the list) and the Big 4:
• Crowe Horwath #1 – Net gain of 24 clients; net gain in audited revenue of approximately $4 billion; net gain in assets audited of $18.4 billion; net revenue to the firm of $11 million.
• PwC #2 – Net loss of 8 clients; net gain in audited revenue of $34.9 billion; net gain in assets audited of $2.68 billion; net revenue to the firm of $8.4 million.
• KPMG #5 – Net loss of 1 client; net gain in audited revenue of over $12.9 billion; net loss in assets audited of $61.4 billion; net loss in revenue to the firm of $19.5 million.
• Ernst & Young #9 – Net loss of 30 clients; net gain in audited revenue of $5.3 billion; net loss in assets audited of $53.8 billion; net loss in revenue to the firm of $36.7 million.
• Deloitte #10 – Net loss of 7 clients; net loss in audited revenue of over $90.5 billion; net loss in assets audited of $718 billion; net loss in revenue to the firm of $74.7 million.
Crowe Horwath’s net gain of 24 clients is easily the highest of the firms presented and they’re the only firm that has increases in all the categories presented. Kinda makes you wonder why they had such a steady stream of layoffs in 2009. We’re open to suggestions and wild-ass theories on this topic.
On the losing end, Deloitte’s loss of huge clients due to the financial apocalypse has been noted by our contributor Francine McKenna and is noted by the PAR:
The firm landed the most wins of any of the Big Four firms for 2009, 46, garnering 3.5% of the overall SEC audit wins for the year. Overall, the Big Four won 7.5% of the auditor changes reported during the first three months of 2005. What relegated the firm to last place in the standings was two huge loses: UAL, to E&Y, and Merril Lynch’s acquisition by Bank of America.
All that added up to nearly $75 million in lost audit fee revenue for Deloitte. In terms of the number clients lost, E&Y managed to cruise to that title with net loss of 30 clients:
E&Y captured some sizable wins for the year, notably UAL/Chicago (Revenue: $20.19 billion) from Deloitte and Apple/Cupertino, Calif. (Revenue $32.48 billion) from KPMG. But its gains couldn’t offset losses for the year of Tyson, Sovereign Bancorp and Nalco Holding, to name a few notable losses.
The end result of this client musical chairs doesn’t really add up to much in terms of revenue for any of the firms. Even the $75 million lost by Deloitte is a drop in the bucket compared to their fiscal year ’09 revenue of $26.1 billion.
Peruse as you numbers see fit and feel free to wave the flag.
Last month we had a couple of posts on the year that was in Crowe Horwath layoffs. After learning about three rounds of layoffs and a CH exodus, we figured we had exhausted the details on 2009 for Crowe.
Not so! The latest on CH is that, like everyone else, the firm is gearing up for busy season desperately shortstaffed despite the end of their “Alternative Staffing Program”.
We’ve also learned that there were pay freezes across the board at CH last year. This included a couple of instances where newly promoted managers had their pay frozen despite being told “substantial changes in duties would be exempt from pay freeze.”
Right now our sources aren’t sure what to expect from CH in 2010 as communication from their leadership has been minimal. So all in all, it doesn’t sound like Crowe is all that different from the Big 4 despite claiming to be “a unique alternative” to them. Good luck to all the professionals at the firm in 2010 and keep us updated with all the happenings during your busy season.
Earlier this month we told you about layoffs that went down at Crowe Horwath in late November.
We’ve now received additional details that indicate that Crowe has had several rounds of layoffs this past year that started with non-client serving personnel late in 2008 and culminating with the November round.
Our source told us that the second round occurred in spring of this year and at that time, firm leadership communicated that no further layoffs would be necessary. Apparently things didn’t goes as plan as a third round occurred in July that consisted of professionals in the risk consulting practice and many in the Financial Institutions practice that were not chargeable were asked to take sabbaticals. This report of “sabbaticals” is consistent with our report earlier from a source that indicated that “there was a lot of forced time off during the summer.”
It sounds as though Crowe has consistently notified their employees about the layoffs, although our sources have indicated that details (i.e. number of professionals) are always scarce for “morale purposes.” One could assume that since anything after the spring round was not supposed to happen, morale was probably all but wiped out anyway.
The second and third rounds were rumored to be in the nabe of 150 each and our source told us that the third round included many “Executives, Senior Managers, and Managers over 40.” and that “Agreeing to not sue Crowe for age discrimination was part of the Severance Package.” So if you’re 40+ at Crowe it sounds like your best years are behind you or maybe you’re just too damn expensive?
Middle-aged dismissal rumors notwithstanding, Crowe has seen its own exodus, which seems to be the natural progression of things when layoffs reach bodily function regularity.
Crowe Horwath has not responded to our repeated requests for comment.
If you’ve been involved in any of these layoffs at Crowe, or have additional details discuss below, or email us and we’ll continue to keep you updated.
We just received word that Crowe’s CEO, Chuck Allen left a firm-wide voicemail announcing that the firm was having layoffs.
According to our tip, CH had “a lot of forced time off during the summer” and that “Oakbrook assurance has seen some movement.” Also, our source indicated that “Firm isn’t announcing specifics besides that its happening.”
So far, our calls and emails to Crowe Horwath have gone unreturned. We’ll update you with any comment or further information they may provide. If you have details on Crowe Horwath layoffs from any office, send the details to [email protected] and discuss in the comments.
A couple of weeks ago, we mentioned the rumored merger talks of Reznick Group and J.H. Cohn. At the time, both Reznick CEO Ken Baggett and JHC Chief Tom Marino passed on the opportunity to talk to us, which isn't that unusual. As is our wont, we decided to go with the rumor and give […]
Crain’s is calling it for accounting firms in Chicago. After a seven-year SOX funded rager, everyone is sobering up. You’re all familiar with some of the usual suspects. But even smaller firms, who have often benefited from lower fee structures are feeling the pain:
Jeffrey DeYoung, regional managing partner at Baker Tilly Virchow Krause LLP (formerly Virchow Krause & Co. LLP) in Chicago, says that up to 20% of the firm’s clients have asked for fee reductions…The firm cut staff by 5% to 7% and hired 30% to 40% fewer employees this year, a trend it will continue next year.
The story at BTVK sounds all too familiar but at least one firm, Crowe Horwath, has claimed that it’s doing everything possible to avoid layoffs:
The firm has kept its workforce of 2,400 intact by shifting employees from hard-hit units such as construction and manufacturing into four main areas: financial institutions, health care, private equity and government. In addition, 30% to 40% of employees have used alternative work arrangements in the past year, including sabbaticals, reduced work schedules and paid time off during slow seasons, to help defray costs. “Our strategy is to keep as many people as possible,” [CEO, Chuck] Allen says.
However, firms like BDO are done whining about the past and looking for growth in the coming year even if it won’t be as good as in year’s past:
Stephen Ferrara, partner and regional business line leader at BDO Seidman LLP in Chicago, predicts an increase for 2010 as companies begin investing in business and infrastructure. “Companies who are riding out the storm and running lean and mean will be poised to make investments again sometime in 2010,” he says. “We don’t expect it to get back to the level of six years ago, but we do expect growth.”
We like the optimism but is legit? Crain’s seems to think that this accounting racket is in for some tough times from partners comp to more competition among hiring of new recruits.
If you work at a smaller firm in the Chicago area let us know what you think Crain’s assessment about the situation. Feel free to opine on your firm’s prospects and the outlook in the Windy City.
Accounting’s day of reckoning [Chicago Business]