He just wanted to get this out there sooner rather than later: IRS Acting Commissioner Steven T. Miller warned Congress on Wednesday that if lawmakers fail to extend the traditional alternative minimum tax patch, up to 100 million American taxpayers could be affected, and most taxpayers might not be able to file their tax returns […]
Well, it's here. After getting everyone worked up a month ago, this week marks the start of Ernst & Young's compensation sit-downs. We've gotten word that some offices got started yesterday, some are starting today, and some start later this week. There are a number of people that have sent us messages who seem to […]
I can’t believe it but finally, a CPA exam question I’ve never answered before. I have a feeling our confused candidate already knows the answer but is reaching out in hopes that we’ll tell him what he wants to hear instead of the cold, hard truth. Sorry in advance, bro.
I just took the FAR section of my CPA exam, I did this while completing my final 9 hours of the 150 hours needed. Therefore, I am considered a provision candidate. From what I have read Illinois will not inform me of my score (is this some sort of sick joke), since I am a provisional student, until my final transcripts are turned into them. The earliest that I will have my final transcripts will be January 2nd. This presents a problem because I was planning on retaking the test if I failed, before I start full time at a big 4 firm on January 3rd. Is there a way around this? What should I do? Should I just enjoy my month break and worry about taking it again after busy season if I did fail? Should I study up again while the information is still fresh?
Also I did fell very prepared taking the test and I would say I am fairly confident that I passed the exam. But who knows until I see the official score.
I’m sorry to be the bearer of bad news, Confused, but you’re not only confused, you’re screwed on top of it.
According to the Illinois Board of Examiners, provisional candidates have 120 days from the date they take their exam to submit their final transcript to the board. If you miss the 120-day deadline, your exam scores will be voided and you will be ineligible to sit for any sections of the exam until the final transcript is received and you are determined eligible to test. Until your Provisional Status is cleared, you cannot view or receive any exam scores.
What this means to you is that there is nothing you can do until you have those transcripts. I commend you for trying to get a jump on your CPA exam adventure this early in the game but you may have ended up screwing yourself. If you fail, you may have to start studying for that section again from scratch as you’ll likely have forgotten quite a bit by the time you find out you failed. If you pass, your 18 months has started ticking but you’ve lost time waiting around to wrap up school.
And yes, if you failed, wait until you are able to study to attempt again since you don’t have an 18 month window to worry about. No reason running yourself into the ground if you don’t have to.
What’s the lesson to be learned here? Always make reality part of your plan; unless you knew of a trick around this going into it, it was unrealistic to make a plan that you couldn’t actually implement.
Sorry but them’s the breaks.
That, or Robert Marcus needs a little training in positive spin:
The environment for cable television subscribers is “very, very weak,” according to Time Warner Cable Inc. (TWC) Chief Financial Officer Robert Marcus, and the company may actually see the total number of subscribers to its television, Internet and telephone services shrink during the current quarter.
The statement, made Wednesday at a Bank of America Merrill Lynch conference in California, caused Time Warner Cable stock to lose as much as 5.3% in Wednesday afternoon trading immediately after Marcus delivered his opening remarks.
Marcus said August saw the “usual uptick in subscriber performance,” as children went back to college, but unemployment, high vacancy rates in housing and “really anemic new home formation” are “resulting in some pretty weak subscriber numbers.”
It’s been, in the words of one source, “a hell of a week” at KPMG. John Veihmeyer & Co. have been on a whirlwind communications tour, people up for promotion are getting the good/bad news and the whole summer blast thing has people soiling themselves with excitement.
Since they’ve been on such a tear, we’ll update you with a little more news out of the House of Klynveld, returning to promotion and compensation news.
First the bad news – we’ve learned from multiple sources that newly promoted SAs in the audit practice won’t be getting much of a merit increase for their new positions. The news is that the new promotees will receive an early 1.25% increase later this summer that will be followed up by another increase, although those raises will be subject to the firm’s performance in the last part of the fiscal year.
Now the good news – After hearing from a couple offices in the west, most of the SA3s that are up for the promotion to manager seem to be getting the bump. From one office in the northwest:
Despite rampant speculation about widespread non-promotion of seniors to manager, only 3 (of around 15) 3rd year seniors didn’t get the bump. One CPA licence issue, and two performance issues. Nothing out of the ordinary even in a regular year, let alone in one where the holdbacks are supposed to be so numerous that they are creating a new 4th year senior training.
The percentage of SA3s in a Rocky Mountain office that are getting promoted is a little lower with approximately two-thirds of the class getting the bump. So far, only the (un)lucky (i.e. non-promotees) ones have received the news while the new managers continue to sweat it out. For this particular office, the decision to promote/not promote was a little more confusing that its counterpart in the northwest.
Based on the information we’ve gathered, each office is essentially given a number of promotees by the boys at 345 Park and the local office leadership is tasked with figuring it out from there. Criteria for promotion to manager (as we understand it) is that 1) the eligible SA needs to be “ready to be a manager” and 2) they need a business case (i.e. have clients to serve).
In the case of this office, it sounds like this was scrapped. Rather, it was decided that historical rating was the determining factor and not the criteria we outlined above. In other words, if you received high ratings (“EP” at KPMG) as an SA1 and SA2, that was more important than whether you actually have clients to work on as a manager. If you were in the meaty part of the curve (“SP” at KPMG), despite your strong “business case” you are SOL. Our source told us that, in the past, they were always told that “my historical rating would not be a determining factor when it came to promotions.”
So basically it boils down to how your particular office is doing. If you’ve got a strong market with plenty of clients, things should go fairly smooth (with a few exceptions). If you’ve got a competitive or shrinking market, your odds of getting the bump go down, in some cases, way down.
As always, keep us updated with your office’s developments, and congratulations and good luck to the new SAs and Managers!
Can Investors Rely on Overstock.com’s Reported Q1 2010 Numbers? [White Collar Fraud]
Sam Antar is skeptical (an understatement at best), that Overstock.com’s recently filed first quarter 10-Q is reliable and he starts off by citing their own words (his emphasis):
“As of March 31, 2010, we had not remediated the material weaknesses.”
Material weaknesses notwithstanding, Sam is a little con pany’s first quarter $3.72 million profit that, Sam writes, “was helped in large part by a $3.1 million reduction in its estimated allowance for returns or sales returns reserves when compared to Q1 2009.”
Furthermore, several one-time items helped the company swing from a net loss of nearly $4 million in Q1 of ’09, including nearly $2 million in extinguishment of debt and reduction in legal expenses due to a settlement. All this (and much more) gets Sam to conclude that OSTK’s Q1 earnings are “highly suspect.”
UBS Dividend in Next 2-3 Years ‘Symbolic’: CFO [CNBC]
UBS has fallen on hard times. The IRS, Bradley Birkenfeld, a Toblerone shortage and increased regulation and liquidity requirements have all made life for the Mother of Swiss Banks difficult and CFO John Ryan told CNBC that could hurt their ability to pay their usual robust dividend, “They (capital regulations) are essentially rigorous to the extent that it is unlikely we’ll be able to pay anything other than a very symbolic dividend over the next two or three years,” Cryan said.
While that is a bummer but a “symbolic” dividend is still an improvement over “we’ve recently been informed that the Internal Revenue Service and Justice Department will be demanding that we turn over the names of our U.S. clients.”
Effort to expand audits of Fed picks up steam in Senate [WaPo]
Going after the Fed makes for good political theatre (*ahem* Ron Paul) and rhetoric to fire up the torches of the populist masses. The “Audit the Fed” drum continues to be beaten by the likes of Rep. Paul (R-TX) and Senator Bernie Sanders (I-VT) to much success and Sanders is quoted in the Washington Post as saying “We’re going to get a vote.” Pols want to crack open the books at the Fed to find out what the ugliest of the ugly is inside our Central Bank.
Ben Bernanke isn’t hot on the idea because letting the GAO sniff around may expose the Fed to short-term political pressures. For once AG – not a fan of the Beard per se – sides with BSB. As she said last fall:
It’s right there in the footnotes – pulling out the closest Fed annual report I’ve got (Richmond Fed 2007), both Deloitte and PwC agree that the Fed is a special case in Note 3: Significant Accounting Policies:
“Accounting principles for entities with unique powers and responsibilities of the nation’s central bank have not been formulated by accounting standard-setting bodies.”
The note goes on to explain why government securities held by the Fed are presented at amortized cost instead of GAAP’s fair value presentation because “amortized cost more appropriately reflects the Bank’s securities holdings given the System’s unique responsibility to conduct monetary policy.” Right there, you can see why auditing this thing might be a problem.
This might be one of those “careful what you wish for” scenarios.
Why We’re Going to Keep Patching the AMT—And Why It Will Cost So Much [Tax Vox]
The Alternative Minimum Tax has been a unmitigated failure in the eyes of many tax wonks. Congress has been talking reform in this area for some time and yet, the AMT remains largely unchanged, relying on temporary fixes that could eventually turn into a disaster:
Last year, about 4 million households were hit by the tax, which requires unsuspecting taxpayers to redo their returns without the benefit of many common tax deductions and personal exemptions. That would jump to 28.5 million this year, except for what’s become an annual fix to the levy, which effectively holds the number of AMT victims steady.
Here’s what happens if Washington does not continue that “temporary” adjustment. If Obama gets his wish and extends nearly all of the Bush taxes, the number of households hit by the AMT would soar to more than 53 million by the end of the decade—nearly half of all taxpayers. AMT revenues—about $33 million last year—would triple this year and reach nearly $300 billion by 2020. That is a nearly 10-fold explosion in AMT revenues.
Howard Gleckman argues that the AMT is too big of a political threat to let members of Congress let this sneak by and that the patchwork will continue but that it probably shouldn’t, “The President can assume the AMT will be patched indefinitely, but assuming won’t pay the bills. Unless he is willing to raise other taxes or cut spending to pay for this AMT fix, he’ll have to borrow more than $1 trillion to kick the can down the road for the rest of this decade.”
We stumbled across the playback of the all-personnel call that went out to Grant Thornton professionals last Friday and we decided to give it a listen. It was about as snoozerific as we expected but we did come away with some additional information to share with you
Stephen Chipman, GT’s new CEO in the States spent about 40 minutes explaining the good the bad and the ugly at G to the T and here are some highlights:
• 81% of those survey and Grant Thornton are proud to work there. High? Low? Completely made up? Does this consider the Sue Sachdeva effect?
• Chip is going to be focusing on various new forms of communication including his own blog. This makes him the second CEO to do so, following Newman over at BDO. We hope, for your sake, that Chip won’t moderate the comments. We insist that you notify us of this as soon as it goes live.
• The new CEO got pretty somber when he described the prospects for GT’s revenue in FY 2010, stating revenues for core services were declining 11% year over year. Global Six…slipping…away.
• Because of this decline, it was decided that layoffs at the senior manager and partner level would occur (many have been notified already) along with those in the “internal client services function”.
• Despite the bad news, Steve-o did his best Bob Moritz, and made it clear: “We will be giving pay raises this summer.” He did qualify that this would be based on 1) the performance of the firm and 2) individual performance.
So that’s the long/short. Like we said, dude went on for 40 minutes and we didn’t have the thing transcribed to give it to you verbatim. If you happened to be one of the unfortunate senior managers, partners or support professionals that aren’t making the “next stage of the journey” get in touch with us about your experience.
For those that remain on team GT, discuss the big guy’s big promise of raises, the blog, revenue issues, etc.
Despite Allen Stanford all but flipping out Judge David Hittner isn’t feeling it, denying his request to be released from prison while awaiting trial.
Stan’s attorney was shocked — SHOCKED! — that the judge was in such a cavalier mood with his client’s well-being:
“The issues we raised were real, as well as legally and factually compelling,” attorney Kent Schaffer said in an e-mail today. “I am surprised that we were shot down so abruptly and without a response from the government or a hearing. I am not sure how Allen will be able to participate in assisting in his own defense and, the truth is, he probably won’t be.”
Stanford is scheduled to go on trial in January 2011 which will probably seems a helluva lot longer if you’re slowly…coming apart…at the seams.
Stanford won’t be released, judge rules [Houston Chronicle]
Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
I try most of the time not to jerk myself off but this is important and worth paying attention to. Until the grand money laundering scheme is finally put out of commission, economic “recovery” will continue to drag, unemployment will continue to rise and credit will remain tight.
So check out “How a Jobless ‘Recovery’ Costs You… Quietly” for more on the plan to print our way out of this mess. Sort of like Enron after Ken Lay’s convenient death, it’s obvious what’s been going on once you realize the details are painfully simple.
Anyway, the strategy moving forward into 2010 will be one of cautious optimism. Hell, calling it optimism is pushing it.
Business Week (Why This Business Owner Isn’t Hiring in 2010):
Right now the Administration is proposing income taxes that are still equivalent to the rates during the Clinton era. I’m not sure how long this is going to last before the rates start going up. And I’m reading that many states are quietly raising their unemployment taxes. Some experts are estimating that state unemployment taxes could double or even triple in the next year or two. Is an increase in the Federal Unemployment Tax rate on the horizon? One expert thinks so.
Read that again just to make sure it sinks in. Increased unemployment taxes is bad enough a phrase on its own but add the words “double” and “triple” and suddenly you see small business walking blindly into the train tunnel with the 5p Bridge and Tunnel Express coming straight for it.
AccountingWeb reported the potential increase on December 17:
States that have borrowed money from the federal government under the Federal Unemployment Trust Act (FUTA) to cover their current obligations will need to pay this money back with interest.
According to the Journal of State Taxation, at least 12 states, including Michigan, Texas, and Virginia, with depleted trust fund balances had borrowed from the federal government under FUTA provisions of by the end of the summer, and others are expected to follow suit. States that accepted interest-free loans offered under ARRA (the Stimulus Act) will need to pay interest on these loans after two years.
There’s probably some really offensive translation of the FUTA acronym I’m missing here but frankly I’m just tired of having to report on this depressing shit. Looks like another exciting year ahead! Yay!
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]
Hopefully it’s not too early for bad numbers. Crain’s New York put some together to give you an idea about how bad the employment picture has gotten for accountants in the past year.
The total number of accounting professionals for the top 25 firms in New York was more than 23,176 as of June 30, 2009.
That number is down from 24,909, or 7% from the previous year. The Big 4 horsemen account for two-thirds of this total and, not surprisingly, they all reported drops:
Continued, after the jump
No. 1-ranked KPMG cut 13% of its professional staff, or 681 employees. No. 4, Deloitte, was not far behind in job shrinkage, with a decline of 378 staffers in the New York area, or 11.7%. Pricewaterhouse reported 350 fewer professional, or a 9.2% decline. Of the four, Ernst & Young posted the smallest loss: a drop of only 1.6%, or 67 professionals.
Crain’s list of details on the top five firms (Big 4 + RSM McGladrey) shows additional data, including KPMG having over 10% more total professionals in New York than the next highest, PwC.
Smaller firms including CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs (probably the most ridiculously long name for firm we’ve ever seen) and Weiser also experienced significant drops:
CBIZ Mahoney Cohen & MHM Mahoney Cohen CPAs, which saw a loss of 53 professionals, or 22.7%, despite last December’s acquisition of Mahoney Cohen by CBIZ & Mayer Hoffman McCann…Weiser…reported a decline of 10.7%, or 42 professionals.
Sorry for all the gloom. Here are some small bright spots:
• Eisner, hired 120 professionals, an increase of 25%
• Marks, Paneth & Shron, 47 and 13.4%
• Seymour Shapss Martin & Co, 20 and 11.7%
You don’t have to be John Nash to see that the drop by the Big 4 overtake any increases by the smaller shops. And seven percent seems like a pretty significant drop but what the hell do we know?
Discuss your firm’s (or former firm’s) numbers in the comments and feel free to speculate on the job outlook for the coming year. It’s not like it could get worse. Could it?
A hard number for accountants: 7% fewer jobs [Crain’s New York]