News

Grant Thornton’s Valentine to Employees Did Not Consist of Heart Candy

It’s the middle of February and many of you are somewhere between completely exhausted and death warmed up. This is not lost on blogger extraordinaire Steve Chipman. SC’s weekly info session has been crucial to your survival (even though it’s not meant for all of you). Knowing that his soothing words will only get you so far, he’s taken a different approach this week.

Since it was St. Val’s on Sunday, Chip figured he would mark the day for lovers by boosting your spirits by using the words of GTers less CEO-y than himself.

Today I’d like to offer some inspiration to help us push through busy season. The last year and a half have required so much more from everyone that it’s hard to imagine we can work even harder, but it’s evident that we are everywhere I look.

So what keeps us going? That’s what I was looking for when I reviewed the “I am Grant Thornton” interviews we conducted last fall. We asked a variety of people in different roles, in different offices and at different levels if they felt they made a difference, and, if so, how.

It is hard to imagine that you can work harder, isn’t it? Your spreadsheets are bleeding through your monitors, you’ve ingested far more MSG than is recommended, and your cube farm neighbor (who ordinarily smells funny) is looking hot .

And we weren’t aware of this “I am G to the T” exercise but it sounds stupendous. Who knew your personal experiences would be used at this most crucial time of year? Bet you would have really put some thought into if if you had known your words could possibly have been immortalized on Steve-o’s blog.

Here are some carefully selected examples from SC’s list and our thoughts on each:

When a client calls me and says, “Can I pick your brain?” it’s so great because (1) they recognize I have a brain” – We agree that it’s nice when your client recognizes that you are of the same species.

“I had a client tell me recently, and I’m quoting, ‘We hire Grant Thornton because you get [stuff] done.’” – That’s Stephen’s edit. This is a family blog, people.

“I make a difference every day because I work here.” – And because my mother said so.

“Every day is a great achievement.” – We agree. Crawling out of bed is tough.

“How do I make a difference? . . . You know, I’m happy.” – God, you’re one of those happy people.

“I’ve worked at the big firms. We are not bigger by any means, but it’s a question of caliber. I knew it from my first day on the job here. We’re just a different caliber of firm.” – We’re not size queens at GT.

Steve-o’s send-off has us begging for more and also causes us to wonder A) who is this homecoming queen? and B) is Chip a Bass or a Tenor?

I’m also proud to say that among our great people are a former homecoming queen and a professional make-up artist. Of equal wonder, one of you found the most surprising thing about coming to Grant Thornton was “that all the partners have great singing voices.”

There’s more where that came from, but this is the firm’s Valentine to you.

Thanks for you!
Stephen

You could do back-to-back busy season now, couldn’t you?

Breaking: Professor Explains Tax Theory, Accused of Being a Communist

Our favorite TaxProf that we never had was quoted in a Wall St. Journal explaining how not only the winnings of Olympic athletes are taxable but also how the fair value of their medals could theoretically be taxable.

Someone read this and took immediate action:

Whether or not TaxProf Caron has a picture of V.I. Lenin in his office is not known but based on where he stands in comparison to our contributor Joe Kristan, we’d say the writer of the letter is misguided. Or Glenn Beck.

Koss Investors Lining Up for Litigation; Will Grant Thornton Join the Party?

Investors in Koss Corporation are lining up in the pending litigation against the company and a press release from law firm Carney Williams, announced this morning that those interested in as lead plaintiff have until March 12th to make their desires known.

Form the press release, “The Company and certain key executives are alleged to have violated federal securities laws by issuing false financial statements and failing to maintain adequate internal and financial controls.”

Many, like Tracy Coenen, have argued that the internal controls are management’s responsibility and Grant Thornton was not engaged to audit these controls but does that mean that GT will dodge these investor lawsuits?


We spoke with Randy Pulliam, a partner at Carney Williams on the case if he expected Grant Thornton to be named in the litigation, “the lead plaintff will ultimately decide as to who will be named in the litigation, including the accountants.”

There’s nearly a month until the deadline so it’s far too early to tell who will decide whether Grant Thornton needs to be included but we’ll go on record saying that we’d be shocked(!) if GT manages to get forgotten in this whole matter. Regardless of your feelings on the firm’s responsibility (i.e. GT should have discovered the fraud or not) the fact that Sue Sachdeva is accused of embezzling $31 million over a period of five years while Grant Thornton was auditing Koss will not be lost on the investors or their attorneys.

“This is a five year class period so many investors are eligible to participate,” Mr. Pulliam told us. Plenty of investors out there would like to see someone make things right. Grant Thornton seems like a decent candidate especially since their pockets are far deeper than Koss’. So if you asked us to put a wild-ass guess on the odds of Grant Thornton being named in the lawsuit, we’d put it somewhere in the nabe of 10-1. Not Mine that Bird territory but not Secretariat either.

We left a message at Koss and dropped an email to Grant Thornton seeking comment and neither have gotten back to us at this time. We’ll continue to update you on the developments, shopping addictions and otherwise.

Accounting News Roundup: Is the IASB Giving Up on the FASB?; Wake Forest Grads Crush the CPA Exam; NFL Looking at Rams Buyer’s BDO Tax Shelter Connection | 02.16.10

IASB softens stance on convergence [FT]
We’re not jumping to any conclusions but yesterday the IASB made the statement that it “would no longer pursue convergence with its US peer as ‘an objective in itself'”. Now we’re not entirely sure what “an objective in itself” means but it kinda, sorta sounds like “to hell with you FASB, we’ve got our own plans.”

This revelation was part of “constitution review” in order for the IASB “to justify its public accountability” to its critics. In this review the IASB seemed to be changing its tone on just what convergence is:

In a review of its constitution published on Monday the IASB’s oversight board addressed this concern over the convergence project and said it would “emphasise that convergence is a strategy aimed at promoting and facilitating the adoption of IFRS, but it is not an objective by itself”.

So just spreading the good word about IFRS without any stated objective? Does that sound about right? It sounds a little like financial reporting evangelism.


Wake graduates get highest passing rates on CPA exam [Winston Salem-Journal]
This is in no way presented to make you feel bad about yourself. Here are the 2008 (the most recent data available) passing rates at WF: 93% on FAR; 87.5% on Audit; 83.22% on regulation; 93.7% on BEC. The overall passing rate was 89.7%. The University has had the highest scores five years running.

If you need to go cry in the bathroom, you may do so now.

Rams buyer’s $85 million battle with IRS [Chicago Tribune]
Shahid Khan announced last week that he was buying 60% of the St. Louis Rams. Great news right? Ordinarily, yes but now the NFL is looking into his association with a BDO tax partner that was convicted of helping clients avoid taxes through shelters.

The IRS said in court papers that the Khans hired the Chicago-based BDO Seidman accounting firm and met with tax partner Robert Greisman. The Khans engaged in at least five questionable tax shelters, with names like Son-of-Boss and Dad, and paid BDO $8.5 million in fees, about 10 percent of the alleged tax savings, according to court documents.

Yet when the revenue agency questioned Khan about his returns, he was unable to identify what services BDO provided, an IRS agent said in court documents. In April 2007, the IRS made formal requests for information to Greisman and one of his partners in Michigan in connection with its investigation of the Khans.

Greisman pleaded guilty last July to conspiracy charges related to the creation of the shelters and BDO is currently being sued by Khan for negligence and malpractice. The NFL may have saved them themselves the trouble by letting Rush Limbaugh own part of the team…

Stephen Chipman Is Slightly Annoyed by the Non-Grant Thornton People Reading His Blog

We didn’t get the third installment of Stephen Chipman’s blog until late last week and apparently while the Grant Thornton CEO seems to be keeping up his promise to come at you once a week, he’s going to be a bit more reserved going forward.

Last week SC shared a few insights from his readers, however we warned that he wouldn’t be sharing the most intimate details (e.g. ragers in Atlanta):

Because large portions of my blog are finding their way to external Web sites, I will answer some sensitive or strategic questions via internal e-mail and send my responses directly to the person who posed them.


Well, shucks. We’re not sure what “external websites” SC is referring to but as far as our humble posts are concerned, we merely provide snapshots that certainly don’t qualify as “large portions”. If you guys are aware of someone reposting the posts in full, get in touch with us and we’ll let them know at GTHQ.

We’re also curious as to what will qualify as “sensitive or strategic questions”. Is SC getting prodded with nosy questions about Sue Sachdeva? If so, he could at least give us a diagnosis on her supposed shopaholic tendencies. That doesn’t seem too sensitive. It’s most certainly not strategic.

We’d also like to hear his thoughts on Grant Thornton being vindicated in the Overstock.com circus. Patrick Bryne said some pretty nasty things about Steve’s beloved firm. This is the perfect opportunity for Steve-o to throw it in Patsy’s face via an all-out blog-off. Does he take it? So far, no. Sensitive? Absolutely not. This is justice. Strategic? Not really. Chip must get enough satisfaction knowing that the firm clear of the whole thing and doesn’t see the need for gloating. We’ve got two words for that: MISSED. OPPORTUNITY.

Because of this new cautious approach, we don’t have any parties or white whales to share this week but SC did mention that he got a little face time with SEC Chief Accountant James Kroeker. And don’t think that just anyone was invited to this little sit-down, “I was honored to be included in this very small group, which also included the CEOs of two large competitors.”

Well! We’re assuming Chip is referring to two B-I-G-F-O-U-R competitors and only since only two of them were there, this is pretty H-U-G-E opportunity for Steve. SC won’t turn down a little glad-handing with the Chief Accountant, no sir. Unfortch, he didn’t really get into what was said at the meeting but we’re sure it was a stimulating convo: Olympic fever. St. Val’s gifts for the wives. Maybe some talk about the nonexistent SEC roadmap on IFRS? Here’s to hoping that he’ll open up more this week.

Comment of the Day | 02.12.10

We’ll dispense with quote of the day today in favor of the words from awwyea.

This is type of comment you should be striving for my friends.

We’ll be on a light posting schedule for the holiday on Monday. Have a great weekend and try to see your sweetheart on Sunday rather than sexting them (especially the PwC peeps).

Texas Stripper Tax Will Survive One More Valentine’s Day

If you’re a resident of the Lone Star State and you happen to frequent the peelers, you’re probably familiar with the $5 charge that you pay to enjoy a little bit of entertainment.

Well good news! The Texas Supreme Court has agreed to hear the case and determine if that $5 violates the First Amendment right to free expression and maybe this travesty can be put to bed once and for all.


The Texas Court of Appeals ruled the law was discriminatory against establishments that served alcohol since as Kay Bell explained then, “a play involving nudity did not trigger the tax…that meant that, had the law stood, the touring company of…Hair could have come to Texas.”

If you simply wanted to go to Treasures in Houston and have a beer and appreciate some artistic impression to Bon Jovi, Skid Row, Def Leppard, etc. then the tax applied. The $12 million that the state collected while the law was in effect is still being held in an account while they sort this out. What’s not clear is if that money will be returned to the patrons or simply given to employees of the clubs where the money was going to end up anyway.

Texas stripper ‘pole tax’ to get review [Don’t Mess With Taxes]

Five Questions with Jim Peterson of Re:Balance

We’re going to be frank; Jim Peterson is a cerebral guy. When you read his posts over at Re:Balance you never get the impression that he just rolls out of bed after a night in Wrigleyville and pounds out a post. His blogging can turn your head in knots and we think that’s a good thing.

Jim is an attorney that has spent “thirty-five years on complex multi-national matters involving corporate financial information.” He spent 19 years as in-house counsel and partner at a national accounting firm working on policy and risk management strategies.

He also spent five-plus years penning “Balance Sheet” a column for the International Herald Tribune. He now spends his time teaching risk management to MBA candidates at DePaul University in Chicago and ISEG in Paris.


Are you a CPA – Y/N?:
I am not a CPA – frequently mistaken for one, but only by those who miss the evidence that a “words guy” is on the loose in a numbers business.

If someone had to read just one post of yours which one would it be?
From May 17, 2009: “Which Accounting Firm Will Be ‘Next to Fail?’ It’s the Wrong Question” – an attempt to capture in a single post my central theme, which is the threatened survivability of the large-firm assurance franchise, the perilous condition of the Big Four business model, and the absence of real dialog on achievable solutions short of their catastrophic disintegration.

Bloggers on accounting are…
By and large driven by an instinct for the capillary. I happily give respect to those focused on the technical and operational minutia – although they are mainly keeping the deck chairs neatly arrayed on the deck of a sinking ship.

Favorite non-accounting blog…
The Soay Sheep Chronicles – by a retired couple, a big-city lawyer and an academic, who rescued and now operate a sheep farm in Oregon. Writes rings around Verlyn Klinkenborg’s pastorals in the NY Times, and teaches those of us ignorant of the subject about the opportunities for personal life-change and renewal. Full disclosure: the author is my sister.

Best accounting firm we’ve never heard of…
Financial Reporting Advisors, LLC – A Chicago boutique — alumni of the Arthur Andersen professional standards group – with a business model beautifully adapted to the hazards of today’s practice. They do no audit work, and issue no opinions. They advise global-scale companies on the intricacies of accounting standards, literature and requirements – while leaving ultimate decision-making to reside with their clients.

So they deliver wisdom and value, with virtually no litigation exposure. Their practice is one example of the available ways the profession might re-engineer its way out of the presently untenable survivability tensions in which it is entangled.

Infuriating Problem of the Day: Accountants Quitting During Busy Season

Seriously people. For most of you, this isn’t a problem. You gird up your loins, duck your head and bulldoze your way through this time of year just like you’ve done in years past. Busy season sucks. We all know that.

Who in their right mind interviews with the Big 4 et al. and is thinking, “The hours won’t be that bad,” or “I probably won’t have to travel” OR “Big 4 salaries are good enough for me”?


The Big 4 Exodus is something that has been discussed at length here but until we’ve yet to discuss this particular topic.

Yes, the trend of accounting firm layoffs is demoralizing and yes, merit increases were mostly frozen, and there were virtually no bonuses> Hell, you may working your ass off knowing that your staff makes more than you but if you’re working in mid-February, what ton of bricks hits you that causes you to conclude that bailing out on your team is the best option?

All the people we’ve had the pleasure of working with, despite all of them having multiple “F— THIS!” moments, pull it together because they have a job to do. Why the hell didn’t you quit prior to busy season? You really felt like sticking it to everyone?

Fine. Perhaps your desire for sweet, sweet revenge against your senior/manager/partner/firm is more powerful than any shred of integrity you may have but for crissakes, that makes you a very bitter person. More so than the average accountant.

Seriously? It couldn’t wait? There isn’t that much time left in busy season. And besides, if you’re patient, they may pay you to leave.

Quote of the Day: Auditors in Love | 02.10.10

“[If I Were An Auditor] tells the story of two auditors (would-be auditors) in love, who view their relationship through the lens of accounting and auditing.”

~ Edith Orenstein, editor of the FEI Financial Reporting Blog on the rom com created by her and many others in Second Life (just in time for St. Val’s).

Quote of the Day: Hank Paulson Tells No Lies | 02.09.10

“We will get every penny we put into the banks back. I think when you look at all the other programs, we may be surprised at what we get back.”

~ Hank Paulson, to Warren Buffet on TARP.

Ex-PwC Associate Sues NYU to Get His MBA Back

So waaaay back in the early to mid Aughts when Ayal Rosenthal was slumming over at 300 Madison, he got a little entrepreneurial (P. Dubs auditors don’t make shit, you know) with his Dad, two brothers and a host of others. They made a little bit of extra dough ($3.7 million) by running an insider trading scheme based on various tips, some of which were related to clients that Ayal worked on at PwC.

By the grace of God, the SEC caught on to the shenanigans and busted the gang in early 2007 (was this the reason they missed Madoff, Stanford?).


For this little stunt, NYU revoked AR’s MBA after the SEC brought the charges against him. He’s now suing the University because, “the university was ‘excessive and unfair,’ and that the proceedings violated his right to a ‘fair and timely hearing’ because NYU took nearly seven months before considering his case in September 2007.”

First of all, if an academic institution gets back to you in seven months, we’d say that’s a pretty decent response time. Second, “unfair” doesn’t work on anyone.

Having said that, we know full well how hard the young lad must have worked to get that MBA, so we’re not surprised that he wants the prestigious degree back.

If NYU really wanted an airtight reason for taking his degree they should have cited his inability to dupe the SEC for less than five years. Open and shut.

NYU sued for revoked MBA [NYP]
Insider Trader Ex-Con Sues NYU For His MBA [TBI]

‘Subversive’ Organizations Must Register in South Carolina; Terrorist Tax to Follow?

Do you have a client thinking of starting a subversive organization in South Carolina? Are they looking to expand their network of businesses to include one with the expressed mission of overthrowing the U.S. government? Thought so!

Just so you know, they are required by law to register with Secretary of State and declare their intentions or they will be subject to a $25,000 fine and 10 years in prison. Let’s keep the ship tight people.

The Subversive Activities Registration Act was passed last year by the Palmetto State legislature and is now officially on the books. Oh! And there is a $5 filing fee (we attached for the form below for your convenience).


If you’re not sure if the new entity will qualify, the law defines subversive organization:

(1) “Subversive organization” means every corporation, society, association, camp, group, bund, political party, assembly, body or organization, composed of two or more persons, which directly or indirectly advocates, advises, teaches or practices the duty, necessity or propriety of controlling, conducting, seizing or overthrowing the government of the United States, of this State or of any political subdivision thereof by force or violence or other unlawful means

South Carolina, clearly not satisfied with the job being done at DHS, obviously enacted this little gem of legislation to exploit these organizations’ propensity for full disclosure. What’s the point of organizing a business with such an important purpose if everything isn’t going to be on the up and up?

The Raw Story reports that enacting redundant legislation is the norm for the Palmetto State as “[it] is among those states which require drug dealers to declare their illegal income, or face additional criminal penalties on top of the already established penalties for buying, possessing and selling drugs.”

We can only assume that the SC pols will now get to work on a new “Terrorist Tax” that will be known as the Super-Anti-American Business Sucks Act. It seems like a natural progression of the legislation there.

No joke: South Carolina now requires ’subversives’ to register [The Raw Story]
Terrorists Must Register With SC Secretary Of State [Fits News]
[h/t Joe Kristan and Russ Fox of Taxable Talk]
SubversiveAgentForm

Ex-KPMG Associate Sets New Bar for Expense Reimbursement Abuse

We meant to get to this on Friday but as you recall, our plans we’re slightly derailed by forces beyond our control. We’re sharing it now because there are lessons here for all the newbies out there. Pay attention, this could one of you.

During busy season the temptation to get a little aggressive with the expense reimbursement comes naturally to just about everyone. If you deny this particular bit of weakness then you are either A) lying through your coffee-stained teeth or B) in the wrong profession; join the clergy.


It should be noted that the abuse of reimbursement policy has relative levels of ridiculousness. Partners can rationalize and get away with more extravagant abuse than a mere associate so keep that in mind here.

So maybe every once in awhile you and some team members slip out for a three martini lunch that falls on the expensive side and you ram it through on your expense report because you figure you deserve it. Totally natch.

It gets overboard when you have the tendency to place some wagers and because you’re a degenerate loser, you start submitting expenses to fund this little gambling hobby.

Vikas Gupta was employed by KPMG until he couldn’t pass his “accountancy exams” aaaaannnnddd it was discovered that he claimed expenses of £25,000 to fund his gambling and to pay off debt. Gupta claims that he hit “various internal charge codes” to charge the expenses; which, we hear, is a typical methodology.

Gupta also claims that he suffered from depression (losing streaks will do that), is now in Gamblers Anonymous and is employed by a new firm, so he’s back on the straight and narrow.

This didn’t impress a tribunal of the Institute of Chartered Accountants for England and Wales (the AICPA of E&W), who has recommended that Gupta be banned from having provisional membership for 12 months and to be “severely reprimanded.” Since he has no means to pay fines (he entered an individual voluntary agreement), one can assume that the reprimand will consist of 30 lashes, a marathon of technical accounting trainings, or both.

Ex-KPMG trainee admits £25,000 expenses fraud [Accountancy Age]

Winners and Losers in the Overstock Restatement

With Overstock.com announcing last week that they would be restating their financial statements for the the last three quarters and their 2008 consolidated financial statements, it marked another open-mouth-insert-foot moment for Patrick Byrne and his Company.

This will be the third restatement in the last three years. We understand that financial reporting can be tricky but this doesn’t make for a very good pattern.

Winners:

Steve Cohen, Michael Milliken, Sam Antar, Joe Nocera, Gary Weiss, Roddy Boyd, Barry Ritholtz, Felix Salmon, Henry Blodget, John Carney, Joe Wisenthal, et al. – Anyone and everyone vilified by Patrick Byrne because they questioned either him, his Company, or both. Patrick Byrne has always maintained that these people were part of large conspiracy of short sellers and financial bloggers and journalists. The restatement simply proves that whatever suspicions they had about Overstock, they were right. Plus all their friends and family on Facebook were violated by creepazoid and Deep Capture hatchet-man, Judd Bagley. That’s just not cool.


Grant Thornton – Not sure if GT realized it at the time, but getting fired by Overstock is looking pretty good right now. So they changed their minds on the accounting; BFD, right? It happens and clients typically get over it. Pat Byrne decided that it was unacceptable and that LOUDLY crucifying GT in SEC filings, the press, and on conference calls would convince everyone that the auditors were idiots and Overstock and he would triumph over this injustice. Grant Thornton did not hesitate in chanting “liar, liar pants on fire” to Patsy’s face (nothing to lose, they were already fired) and now they’re clear of this three ring circus.

Losers:

PricewaterhouseCoopers – PwC was the auditor for Overstoc prior to Grant Thornton and had always signed off on the company’s financial statements (excellent service in PB’s mind). Now that the restatement has occurred, PwC gets dragged back into the fray to explain what they did, why they did it, and how they got it wrong. A) That just sucks and B) who the hell is going to remember what the hell they did four years ago?

Overstock shareholders – Any Company that restates their financial statements with any regularity whatsoever should be avoided like a group of lepers. If you’re still currently long in Overstock, you have the chance to make the right the decision: sell while the shares are worth something. Your humble servant Patrick Byrne has failed you.

Jury is out:

KPMG: For some reason, Klyneveld Salt Lake City decided that despite Overstock’s dubious past, they were willing to roll the dice. The firm now has the pleasure of guiding the firm through this restatement and somehow pulling the audit for fiscal year 2009 together. The whole exercise reeks of futility. Anyone that happened to be assigned to this engagement and a shred of sanity would have given their notice on the spot. For the time being, the firm seems to be sticking it out but time will tell if the firm changes their mind about their risky new client.

SEC: Everyone knows that the Commission doesn’t have the best track record of late. They have managed to be the laughingstock of the entire bureaucracy and despite a lot of huffing and puffing about new divisions and putting together a dream team of enforcement and financial experts, we haven’t seen much for results. Overstock may be a chance to show everyone that they’re done taking shit and that they are going to start smacking companies around.

This Man Hates Taxes More Than He Loves His Family

Well, he doesn’t come right out and say that but actions speak louder than words, amiright?

This is Guy Hands, Founder, Chairman and Chief Investment Officer of Terra Firma a private equity firm with locations in London, Frankfurt, and Guernsey where he currently resides.

He moved there last April from Kent, a county in Southeast England, to “protest at higher income and capital gains tax rates,” and that “he has ‘never visited’ his school age children since he left the [the United Kingdom]. They have remained with his wife at their former family home in Kent and they now have to travel to Guernsey to see him.”


Guy “Father Knows Best” Hands also doesn’t visit his parents any more “and would not do so except in an emergency,” so he’s not much of a son either.

The devoted family man is an “‘outspoken’ critic of UK tax levels,” so this level of commitment to avoid paying taxes shouldn’t be a surprise. Non-resident tax status is at stake here; he won’t set foot in a UK airport even to transfer.

GH’s shrewd sensibilities were revealed in court papers last week as the venue for his dispute with Citigroup over Terra Firma’s purchase of music group EMI is being decided. If the proceedings are moved to London, Hands’ tax planning could be completely thwarted and — gasp — he might see his children in the UK (if time permits of course).

I save tax by never visiting my family, says tycoon Guy Hands [Guardian]

Five Things That Make Busy Season Suck

Here it is the second week of February and we’re concerned that many of you are working too hard. We’re guessing that many of you are already having nightmares about your senior/manager/partner putting condiments all over your work and then eating them while you watch in horror.

However your busy season is going, we here at GC decided to put our heads together to give you a list of some of the things about busy season that make it such a bitch; not to remind you of them but to let you know that we feel your pain. These appear in no particular order and were created by our own sick minds so if anything is missing you’ll have to point out the omissions.

Gaining weight – Unless you’re a die-hard gym rat, your exercise regiment has probably been paired back significantly. Combine that with the all the cheap soda and takeout you’re eating on a nightly basis, that button on your pants is hanging on for dear life.


Losing sleep – As we mentioned, work dreams seem to be part of many accountant’s busy season routine. Maybe it isn’t dreams for you; maybe you just wake up at 3 am thinking about the meeting you have coming up that day and you can’t get back to sleep so you throw on the business casual uniform and get to the office at 4 am to start your day. OR maybe you’re just working so many hours that the time between your departure and arrival times at work have shortened precipitously.

Your busy season plan has been completely shot to hell – There’s a some saying about a road, intentions and Hell or something that we can’t remember but it basically means however good your plans were they probably hit a snag somewhere along the way and now you’re scrambling. When we asked our Tweeps about their busy seasons we got one response “it’s all about planning and execution.” Right. That execution is the tricky part.

You’ve somehow ended up in an unexpected relationship – The busy season bitch if you will. Let’s not pretend it’s not happening people. One of you made an awkward advance and now you’ve got a situation on your hands. Whether it’s someone on your team or a client contact, more often than not, this ends badly. A band aid breakup is needed.

Hours – Face it; this is the cause of all your pain. Regardless of what your teams do to make things bearable, the hours are just a bitch. Sitting on your ass, in front of that computer, listening to the person next to attempting to burp quietly while sucking down five sodas a day is about to drive you postal. Of course there are the sickos out there that somehow gear up every day to put in another 14 hours but those demented bastards plug in when they go home.

Reminder: Your Super Bowl Gambling Winnings Are Taxable

So it’s the Monday after the Super Bowl and most of you are suffering from some kind of hangover. Whether it was caused by food, booze or you’re simply wallowing in a lack of a Peyton Manning comeback, this day should really be a national holiday (even non-football fans can agree on that notion).

Melancholy, indigestion and cocktail flues aside, the other certainty that comes with the SB is gambling. And we’re not talking friendly-poker-game gambling, we’re talking recklessly wagering on every single aspect of the biggest spectacle in sports gambling.


Two of the most creative wagers we’ve seen so far was the betting on rating for the Focus on the Family (featuring Tim Tebow and Mamma Tebow!) ad and the betting the spread between Kim Kardashian’s measurements and Reggie Bush’s rushing and receiving production. Both of which are completely ridiculous, yet sheer genius.

Regardless of where you put your money yesterday (we took the overs on Archie Manning appearances and lost), there are plenty of big winners from yesterday’s game. And now that we have a government who is feverishly trying to close a deficit gap, the question remains: will the IRS more aggressively pursue taxpayers for their unreported gambling winnings?

If you’re a degenerate loser than this obviously doesn’t apply to you but if you’re lucky enough to find some extra scratch in your pocket, you’re legally obligated to report that income next year.

Our government is looking for solutions anywhere possible, so it’s entirely possible that you could find yourself on the wrong end of an IRS-issued shotgun if you’re leaving your winnings off next year’s 1040. Look, it’s not that crazy and the pols need all the ideas they can get. You’ve been warned.

Is Tim Geithner a Closet IFRS Supporter?

Tim Geithner has inadvertently given his endorsement to standardized financial regulation around the globe, so is he also giving the adoption of IFRS in the US his approval?

Possibly, since he told ABC that “he wasn’t worried that tighter financial regulation would put U.S. banks at an international disadvantage. ‘I’m very confident we can make sure that we are working very closely to raise global standards around the world so we have a level playing field,’ Geithner said.” His motivations are only slightly suspect. Why?

Under IFRS, assets are overstated as derivatives are measured in gross exposure, as opposed to GAAP which concerns itself with net value. More magic financial reporting; of course Geithner would want to see banks magically healed by a change in accounting. If we’re going to do it, let’s also restate years 1999 – 2009 so we can compare at least.


Incredible what a slight adjustment can do (See also: page 19 of the Deutsche Bank report “Financial Transparency” – bwhahaha).

Speaking to the G7 finance ministers in Iqaluit, Canada this weekend, Geithner reiterated his commitment to globalization, accounting magic, and the heavy hand of regulation.

“We all share a deep commitment to try to move forward and reach agreement on a strong, comprehensive set of financial reforms on the timetable we all committed to last September,” he said at a closing press conference following a meeting of Group of Seven finance chiefs.

“That means agreement on … a new set of capital requirements for large global institutions by the end of this year,” he added, playing down the possibility that the Obama administration might be headed in a different direction from other governments.

TG is talking about pacts made with winners like Japan’s Shoichi Nakagawa, who blamed his “drunken behavior” on cold medicine. Sort of like Beavis blaming his tax problems on TurboTax.

Timmy is also somehow convinced that the United States will never lose its AAA rating but he forgets that the MBSs that the Fed is buying were also AAA once upon a time too. He also seems to have forgotten about our massive deficit.

At least he remembered to push the globalization agenda he’s been blabbering about all this time.

Five Questions with Joe Kristan

Joe Kristan is the newest regular contributor to Going Concern but he’s been blogging on his own since 2001. For some of you, this predates your own lover affair with the American tax system.

Joe is a shareholder of Roth & Company, P.C. and also serves as the firm’s technical director. He works with a variety of clients on partnership issues, corporate restructurings, and acquisitions.

Between his professional responsibilities and discussing tax deductible sex change expenses and charities founded by pederasts, Joe also manages to find time to teach classes to other tax professionals and write articles for both professional and general publications.


Why do you blog?
Because I can’t golf or play an instrument.

If someone had to read just one post of yours which one would it be?
Local CPA Firm vows to swallow pride, accept $28 million

If you’re an accounting blogger you must…
…have understanding or clueless partners

Accountants are…
…people too.

Best Accounting firm we’ve never heard of
Roth Company, P.C. of course! It’s where I work, for starters. Also, we look a lot like a law firm, with 9 shareholders in a staff of about 35, with the non-shareholders weighted towards the highly-experienced. I think it’s a business model suited for an era of difficult tax and accounting rules and advancing technology.

Capitalizing on the Idea that “Accounting Is Boring”

Mucho apologies for the downtime yesterday; seems that our servers also took a snow day. Accordingly, we’ll dispense a little bit of weekend wisdom (?) to make up for it.

We all know that 99.9% of the Internet is useful and informative. Dancing hamsters, celebrity gossip and an infinite amount of porn are all crucial to the infrastructure. So when we came across a website that’s sole purpose is to accumulate all the Tweets that state that accounting is boring, we thought, “this has got to be the most worthless and dishonest website that has ever been created.”

There are currently 85 pages of tweets that state this falsehood:


It’s shocking and disappointing that there is an army of people out there that think accounting is so dull. We that appreciate the beauty and importance of double-entry bookkeeping know that they are misguided. On the other hand, there is a saying about trends or something that basically solidifies it as truth but it escapes us at the moment.

Then we noticed the note at the top of the page that states that accounting doesn’t have to be boring. Having been duped into thinking that this was a joke at the expense of lover of accounting everywhere, we decided to investigate as to who was behind this little ploy. Turns out the creator of the site is ClearBooks, an “online accounting system for small businesses,” founded by a former KPMGer, Tim Fouracre and Fubra Limited.

As far as we can tell, ClearBooks is basically QuickBooks using cloud computing and this little tactic to introduce us to it is nothing short of genius. Exploiting the boring nature of accounting is exactly what everyone in the business should be doing whether it’s a firm or accounting software.

The serious approach has been tried and frankly it doesn’t float our boat. We realize are view is like asking a manager to downgrade their workspace or rocking flip-flops at the office but we are, nevertheless, encouraged by this development.

Quote of the Day: Ken Lewis Didn’t Like My Ideas, Okay? | 02.05.10

“If former top executives at Bank of America committed the fraud outlined in Attorney General Cuomo’s suit, those executives must be held accountable not only to the people of New York, but also to the people of Florida.”

~ Alex Sink, CFO of Florida weighing in on the NYAG’s suit against her former boss, Ken Lewis.

Disappointing Accounting Firm Trend: Managers Sitting in Cubicles

Sorry for the downtime today, we’ll make it up to you over the weekend. Promise.

It’s no secret that staff professionals working in public accounting are urged to “stay until manager” for all kinds of substantive reasons that we won’t get into here.

The attraction of being promoted to manager has many superficial benefits including being called a “manager”, having “manager” on your business cards, and getting an office rather than slumming in the cube farm.


With the reconfiguration of some offices however, your dream of getting an office with a door and possibly a window may be dashed as more and more managers, senior managers, and — GASP — even some directors are living life in the grey squares.

Now while this development is most certainly a direct slap in the face of everything public accounting represents, our understanding is that it is not spreading around like H1N1. It depends on the city you’re in, your practice, and possibly your coolness factor.

But if you are in one of the unlucky few in could be much, much worse if more firms follow the lead of E&Y Jericho and go the no-décor-will-be-allowed route (God help you if they lock the bathrooms too). How will these managers be able to appropriately express themselves? Oh! And how on Earth is a manager supposed to get some action during busy season? Cubicle sex is not happening. Christ, how will they live?

KPMG, Grant Thornton DC Offices Are Closing at Noon

We heard that it was getting ugly in the Nation’s Capital so we called around to find out what’s what:

KPMG – “Closing at noon both DC and Tyson’s”

E&Y – “No word yet”


Deloitte – “We’re hopeful”

PwC – “We go by the Federal Government”

Grant Thornton – Closing at noon.

Nothing like a snow day but a snow day during busy season is an especially welcome event. It’s supposed to get nasty in Philly too but it hasn’t started snowing there yet, so unfortch you’ll probably have a full day ahead of you (out at 3 pm if you’re lucky).

An added bonus is the possibility that the storm could keep you from working the weekend. Unless, of course, you plan on working from home. If this is the case, we advise you to get home safely, set everything down when you get there, take off your coat and slap yourself. Twice. Hard.

Overstock.com to Restate Financial Statements; Reassures Profitability for 2009

Well, then. This all very awkward for Pat Byrne and Co.

In an 8-K filed late yesterday Overstock.com announced that it would be restating the consolidated financial statements contained in its 2008 annual report, and the those contained in the Company’s last three 10-Q’s: period ended March 31, 2009; June 30, 2009; and September 30, 2009 (unreviewed!).

It goes without saying that those financial statements can no longer be relied upon.


The restatement is a result of errors that Overstock fired Grant Thornton for last year that led to a bit of a cat fight between the firm — who is not mentioned in the filing — and humble servant Patrick Byrne.

The Big O also admitted that it “incorrectly amortized the expense related to restricted stock units based on the actual three year vesting schedule rather than a three year straight line amortization and applied an outdated forfeiture rate in calculating its expense under the plans.” While they were at it, they threw a bunch of other corrections that were “[not] material either individually or in the aggregate,” as the saying goes.

The Company is still mulling over the numbers with both PwC and KPMG so there’s a chance that they could change but as of now, $1.9 million of income is going back to 2008 from 2009 and an increase in expense of $350k in 2008 and $900k in 2009.

But wait! The filing reminds us that “Patrick Byrne, the Company’s Chief Executive Officer, had stated to The New York Observer, ‘that the company is about to report its first annual profit.’ The Company continues to believe that it will report positive net income for fiscal 2009.” Whew! See shareholders? More commitment from your servant.

Sam Antar has been following this story from the very beginning and he is not shy about being vindicated:

Today’s news is a complete vindication of my analysis of Overstock.com’s financial reports and shows that the company willfully engaged in a financial reporting manipulation scheme. The company is restating its financial reports to correct GAAP violations, exactly as I have recommended in this blog. To date, every single initial financial report issued by Overstock.com throughout the company’s entire existence has violated GAAP or some other SEC disclosure rule. The company now has the dubious distinction of having to restate its financial reports three times in the last three years to fix GAAP violations.

We shot Sam an email last night and he simply told us, “I am going out for a glass of fine wine.”

So while this appears to wrap up the SEC’s Division of Corporation Finance investigation, one little problem that still remains is that the SEC’s Enforcement Division has not wrapped up its probe of the company. Yeah; so there’s that. Considering the the track record of the SEC, we’d typically give a company a 50/50 shot of coming out of a probe by the Enforcement Division unscathed but in the case of Overstock, we’ll be going with Schape’s crew.

Stephen Chipman’s Latest Blog Post: Atlanta Knows How to Party; The End of Suffering

Last week, we were a little disappointed in Stephen Chipman’s debut blog entry; A) it’s not public for the whole world to read and B) it reminded us of a journal except all the good stuff like morning bathroom routine, the wife’s headache, compensating for said headache, etc. was left out.

This week is a little better (no Lost recap and 1,200+ words are big negative points), as he shared with the GT troops about his little excursion down to Atlanta to do some glad-handing at the open house for the new office space there. Chip was impressed not only by the new LEED facility but by the willingness of a fair amount of people in Atlanta that had nothing better to do on a Wednesday night:

What struck me was that these were not people who came through obligation; they clearly wanted to be there. I met many clients, and they all had warm and wonderful things to say about our Atlanta office partners and people. Where some business receptions can be deadly if the mix and tone aren’t just right, people were really enjoying themselves — they stayed, they mingled, they had fun, many enjoying themselves well past 9 o’clock at night. (It kicked off at 5).

Okay, so where are these deadly receptions occurring? We’ve been to some wild get-togethers where some people might not get along but there was no risk of anyone ending up dead. Perhaps he just means “shockingly awkward.” That’s way more believable than a party where a homicide may or may not occur.

And why would he be surprised if people could booze for free for over four hours? If there’s free beer and wine to be had in the middle of the week, that probably is the best thing you could do on a Wednesday.

The only other tidbit worth mentioning is that Steve-o got a little redemption that was over two decades in the making. Back in the 80s when Chip was a manager living in Dallas, chasing SMU tail and starting to network, he was courting a prospect that ultimately went with a “large competitor.” Since that point in time, he has not taken it well:

For years — and this was more than two decades ago — I’ve watched this company from afar, and it’s become quite successful. I felt a pang every time I saw their signs (which were everywhere), and also their advertising at NHL games and sports arenas. With every sign sighting, I got increasingly frustrated that they were not a Grant Thornton client.

Many times SC could be caught looking off into the distance, dreaming about the one that got away. A tear. A lone tear…

Well you can rejoice now bitches! Turns out a current GT client recently purchase this prospect that broke our hero’s heart and is now a client of GT. “After almost 22 years of misery, my suffering has ended,” SC utters. This was his White Whale.

And to wrap it up, SC threw in a nice little pep talk for all of you GTers out there feeling down and out, “We don’t need to be the biggest to be the best.” He’s still thinking about you; even if you’re not in Atlanta.

Still no Lost recap.

Dita von Teese’s Accountant Understands Why She Has to Spend $70k on a Dress

Last month we mentioned that while we enjoy her genius, we wouldn’t want to be of Lady Gaga’s accountant. She definitely falls into the “clients that make you want to jump out the window” bucket.

Likewise, if we had our choice of clients, we wouldn’t be chasing down burlesque artists that marry rock stars, in this case, Dita von Teese. Not because we don’t enjoy burlesque artists and the rock stars they love, quite the contrary actually; it’s just seems that the headaches associated with such a client would be more trouble than it would be worth.


Surprisingly, DVT takes money quite seriously and is not as slipshod as you might expect.

I refuse to go to the hair salon and have a $300 hair dye job – I do it myself at home with an $8 dye kit… I’ve always been a saver…I saved at least 15[%] of everything I earned and invested it in mutual funds

Jesus, talk about sensible. However there is this glimmer:

I think nothing of spending $8,000 on a corset for my show. My accountant once said he couldn’t understand how I spent $70,000 on a single dress but then he came to my show and saw how lavish it was and told me afterwards that now he understood.

Those are work related expenses though; count us unimpressed. We’re expecting Gaga-esque negligent wasting of money. Like seriously getting carried away.

I bought [a Jaguar] one night on eBay for $35,000 when I’d had too much champagne.

Yes. That’s the best she can offer. Plus, there’s this:

I pay my [credit card] balances off every month.”

More sensible behavior. Doesn’t sound like she’d be that bad of a client at all. Hell, she probably even keeps all her receipts. L. Gaga’s accountant might consider asking her for some advice.

Dita von Teese: ‘I spent $70,000 on a single dress for my show’ [Telegraph]

Grant Thornton to Close Greensboro, NC Office

We’ve received multiple tips informing us that Grant Thornton’s Greensboro, North Carolina office will be closing in the spring after busy season has ended.

Greensboro has approximately 35 professionals in all three service lines although our sources indicate that many tax professionals were laid off late last year in anticipation of the closure. Greensboro currently functions as a satellite of the Charlotte office which houses the support professionals.

What’s not known at this time is whether the office will become virtual, similar to the setup that Ernst & Young arranged for its Greensboro office other whether it will be an outright closure.

We contacted Grant Thornton for comment and had not heard back from them at the time of this posting.

If you’re familiar with the situation in Greensboro and have more information, get in touch with us. We’ll continue to keep you updated as we learn more.