July 19, 2018

Jumping to conclusions

Dilemma: Administrator Concerned About Partners Giving Significant Others No-show Jobs

Today in predicaments from across the pond, a concerned employee wonders if a couple of partners who have given their wife and girlfriend no-show jobs are up to some financial shenanigans. Of course this prospecting employee is thinking about approaching said partners about this. What could go wrong?

The partners of the LLP I work for have added their wife and girlfriend to the payroll of the company even though neither said wife or girlfriend actually work here. I believe the reason being is to reduce profit, partner remuneration etc to ultimately reduce the amount of tax paid by the partners at the end of each financial year.

The ‘salaries’ are fairly low (£16,500 [$27k USD] and £13,000 [$21.4k USD] per annum) and Tax and NI etc is processed as normal through PAYE. One of the ladies even has student loan deductions. Periodically each lady will have a large ‘bonus’ of around £15,000. I assume the payments go directly in the wife/girlfriend’s bank accounts.

I’m sure there must be some sort of law against this as it seems, to me, too obvious to be a loophole. Does anyone one know what these laws are and the repercussions should the partners get caught?

I work as an administrator for the company and rely solely on accounting and payroll software and therefore only have very limited knowledge on the subject. I am hoping to approach the partners on the matter so any help/information would be greatly appreciated 🙂

Maybe this “administrator” has too much time on their hands and is simply jumping to conclusions (which we applaud) but then again, a no-show job is a no-show job. They are violating NCAA rules or anything but for the puritanical types this could seem a little sketchy.

Security Workers at an IRS Building in Atlanta Are Understandably Jumpy

If you’re working security at any building that houses IRS employees, your tendency to be extra cautious is warranted. For example, if you’re X-Raying a suspicious package that just so happens to contain a curiously shaped object that may resemble an explosive device, you may just order the entire evacuation of the building.

Fortunately, it sounds like it was just a fancy-schmancy decorative egg. While it’s comforting that security forces at the Peachtree Summit Federal Building are a vigilant (maybe too vigilant) bunch, anyone brave enough to bring any sensual devices to work might make for some awkward convos.

It’s Ridiculous to Think That Enterprise Financial Dismissed KPMG Because of the Restatements

KPMG has been kicked to the curb by Enterprise Financial according to an 8-K that was filed on Friday by the company. The ubiquitous claim of “no disagreements with [insert firm]” was there along with a mention of a material weakness that was related to the restatements issued for both 2008 and 2007 but that couldn’t possibly have anything to do with the dismissal of the auditors:

In connection with the identification of the loan participation accounting error described in Item 7, Management Discussion & Analysis and in Item 8, Note 2 of the consolidated financial statements and elsewhere in the Form 10K dated March 16, 2010, the Company also determined that a material weakness in its internal controls over financial reporting existed during the periods affected by the error, including as of December 31, 2008. The Company’s management concluded that the material weakness was the Company’s lack of a formal process to periodically review existing contracts and agreements with continuing accounting significance. To remediate this material weakness, during the fourth quarter of 2009 the Company implemented a formal process to review all contracts and agreements with continuing accounting significance on an annual basis. As a result of the review conducted in the fourth quarter, management did not identify any other errors in its previous accounting for such contracts or agreements. Management believes that this new process has remediated the material weakness in the Company’s internal control over financial reporting.

So in other words, “Yeah, maybe we should have been looking at these contracts but we weren’t and so some material misstatements slid through. We’ve slapped some duct tape on it and it’ll be fine from here on it. End of story.”

The esteemed pleasure of auditing Enterprise now belongs to Deloitte who has now snagged three clients from KPMG this year (by our count) – picking up Jefferies and Select Comfort back in March.

Enterprise Bank parent dismisses KPMG [St. Louis Business Journal]

Compensation Watch ’10: PwC Moving Up Adjustment Date?

There’s been some whispering about PwC moving up its compensation and adjustment time frame from September to July and that’s got people curious.


At first glance this makes sense because the firm has a June 30 fiscal year-end. PLUS! Since Bob Moritz has already made it abundantly clear that there will be raises for 2010 we figure everyone would be excited to hear that the bumps would be coming a little earlier this year.

However, since everyone likes to jump to conclusions over the slightest little change, we’ll indulge. There have already been whispers of layoffs at PwC here and there but nothing that we’ve been able to confirm so people are probably antsy. And if the adjustment date is moved up we’re sure people are worried that means layoffs will be happening sooner rather than later. We can’t read anyone’s mind but we’re thinking this should be in the ballpark…

But if you’re anxiety is well founded, tell us why or get in touch.

UPDATE, a shade before 1 pm: One of our sources inside PwC shared their thoughts with us:

I think the overall feeling was positive…it will probably make some people happy (depending on the %) and hopefully limit the higher performers from going out into the market, however, it may also help some people look for jobs sooner (i.e. they don’t have to wait until September now, if the raises are low). Most people still have a lot of questions, including the estimate of the increase for each band of the rating system, what the bonus pool is going to look like, and although that is not being paid until September, whether we will know what the bonus amounts are in July.

Will Big 4 Firms Get Access to the Swine Flu Vaccine?

swine.jpgNo idea! But we figure if you’re an auditor (or any other service delivery professional) at Goldman Sachs or Citigroup (PwC and KPMG respectively) you probably have a better chance than most.
Oh and it helps if you’re at high risk for developing complications. So if you’re aged 24 to 64, aren’t around kids, and don’t have serious health issues, you’re just going to have take your chances without the H1N1 vaccine.

Citigroup has been supplied with 1,200 units and Goldman with 200, says Jessica Scaperotti, press secretary for the Department of Health & Mental Hygiene. The agency has so far approved orders by 29 employers–including 16 that have yet to receive any vaccine–after they were cleared by the U.S. Centers for Disease Control & Prevention (CDC). Big employers that have received or are scheduled to receive vaccine so far include Time Warner (TWX), JPMorgan Chase (JPM), Memorial Sloan-Kettering, New York Presbyterian Healthcare System, and New York University.

Since we have the tendency to jump to conclusions, will assume there’s no plans to distribute any vaccines to any of the large accounting firms locations. Reaffirming our belief that the Rodney Dangerfield image remains intact for the accounting firms. Your best bet is to be on the client site of any company that has any systematic importance.
New York Businesses Get H1N1 Vaccine [Business Week via JDA]
Earlier: Deloitte Study Says That Half of You Aren’t Scared of Swine Flu. Tell That to a Backstreet Boy
Also Earlier: Our Token Swine Flu Post