Today in accounting firm musical chairs, a SA3 who got passed over for promotion at GT has an offer to joining soon-to-be rebranded PwC as an SA1/2. WHAT TO DO?!?
Have a question about your career? Worried that you’re too hot for the Big 4 and your hot brain will be overlooked? Trying to decide if you should give it all up and join the circus? Email us at firstname.lastname@example.org and we’ll let you know if you should consider becoming the next human cannonball.
Back to our accountant in peril:
I’m a recurring S3 (financial) who was passed up on the manager position because of internal politics [Ed. note: reader admits that this is their opinion]. I have a offer with PWC to join their asset management group as a S1/S2.
Is this career suicide? I have until today to tell GT if i’m leaving or tell PWC that i have to rescind the offer.
I’ve had it with GT and although they said there is a good chance next [year] to make manager, i dont believe the hype.
Timing if of the essence, so we’re on this – Looking forward to a promotion to manager and getting passed over is a tough pill to swallow. All of your hard work that you’ve put in over the last five or so years (that feel like ten) no feels wasted. As you say, you’re not buying the hype any more and we don’t blame you. However, succumbing to your frustration and allowing PwC to knock you down a notch (or two) on the ladder is the last thing we think you should do.
You shouldn’t let any firm take advantage of your vulnerability and devalue your experience just because you were in Casa de Chipman. If you were an associate, the situation might be different but if you’re on the throes of making manager and now it might be at least another year before you’re even being considered for manager, feels like a disservice.
That being said, it doesn’t sound like you’re happy at GT. And being miserable at work sucks. If you’re crawling out of bed, hating your commute and the faces of your co-workers make you want to projectile vomit on their laptops, that’s a serious sign that you need to GTFO.
Luckily, you’ve got options, friend. If you trust your performance coach/counselor, ask them if there are possibilities within GT that you can explore (possibly a practice rotation?).
But if you’re truly burned out on GT, don’t do something rash like take the first offer thrown in front of you. Take your time and make the next career move that’s perfect for you. Don’t settle for the glitz of PwC just because they make it sound like the best shit since paperless audits (they aren’t that cool anyway). Your experience is valuable, go find a company that will reward you for it.
Home Buyer Tax Credit Price Tag: $22 Billion [WSJ]
“The total estimated cost of the home buyer tax credits is about $22 billion, according to a report released by the Government Accountability Office last week. The report looked at all three of the tax credits, which were in effect from April 2008 through June 30, 2010.
As we’ve written, the credits did a lot to juice sales. But many have argued that the government incentives basically pulled folks who were already planning to the market earlier. And certainly, we’ve been seeing the post-credit hangover: Home resales dropped to record lows in July. Talk of a housing double-dip is in the air.”
How GM Made $30 Billion Appear From Thin Air [Jonathan Weil/Bloomberg]
General Motors somehow ended up with $30 billion in goodwill on their balance sheet that was on their recent registration statement. Funny thing – the company only has equity of $23.9 billion. Another funny thing – the company said that the goodwill number would have been less if they were a better credit risk.
But don’t worry, apparently this is all in accordance with fresh-start accounting.
Bringing the US on board [Accountancy Age]
“Sir David is a realist – the two accounting codes will never match. ‘There’s absolutely no way [international standards] can converge with US GAAP – you can’t converge two and a half thousand pages with seventeen and a half thousand. There are going to be differences,’ he said.”
The New Threat To Your IRA: An IRS Crackdown [Forbes]
“After years of haphazard enforcement, the Internal Revenue Service is starting to systematically search out violations of the convoluted rules governing individual retirement accounts. There’s a lot at stake. Americans hold $4.3 trillion in IRAS, and the cost of even innocent mistakes can be steep; if you miss taking a required payout from your IRA, Uncle Sam will demand half of the amount you forgot to take as a penalty.
The IRS was prodded to act by the Treasury Inspector General for Tax Administration. In a report earlier this year it concluded that IRA violations have been growing and estimated that more than half a million taxpayers either missed required payouts or contributed more than allowed to IRAS during 2006 and 2007.”
Grant Thornton responds to non-executive code [FT]
“Grant Thornton has become the first major UK auditor to respond to new governance rules by announcing the appointment of independent non-executive directors to help oversee its business.
The accountant’s UK arm said on Wednesday that it had recruited Richard Eyre, a media industry veteran, Caroline Goodall, a lawyer, and Ed Warner, the head of the governing body for UK athletics, to fill the posts.”
Thomson Reuters Releases First iPhone(R) App for Tax and Accounting Professionals [PR Newswire]
“The Tax & Accounting business of Thomson Reuters is pleased to announce the release of Mobile CS, a first-of-its-kind iPhone app for tax and accounting professionals. Using advanced mobile application technology, this comprehensive practice management tool extends the reach of Practice CS(R) from desktop to iPhone, giving more than 60,000 Practice CS users the ability to access key firm, staff, and client data anytime, anywhere.”
Glaxo Taps Goldman Deal Maker as Finance Chief [WSJ]
“GlaxoSmithKline PLC Wednesday chose Simon Dingemans, a Goldman Sachs Group Inc. deal maker, to be its next chief financial officer but said the choice won’t change its cautious approach to mergers and acquisitions.
Mr. Dingemans, 47 years old, will succeed Julian Heslop, who will retire from the post at the end of March. Mr. Dingemans has advised Glaxo on an ad-hoc basis over the years and is currently managing director and partner with Goldman Sachs in London. He joins the U.K.’s biggest drug maker as chief financial officer designate and executive director from Jan. 4, 2011. He most recently worked with Glaxo to establish ViiV Healthcare, GlaxoSmithKline and Pfizer Inc.’s joint venture for AIDS drugs.”
Gun-slinging accountant loses Chapter 7 battle [South Florida Business Journal]
“Jay Levin, a Boca Raton accountant who shot and killed a teenager in 2003, has lost his battle to erase a $750,000 judgment related to the shooting.
Levin shot Mark Drewes, his 16-year-old neighbor, in the back after the teen rang Levin’s doorbell in a “ding-dong-ditch” prank one night, according to motions in Levin’s Chapter 7 bankruptcy case.
Levin had filed the bankruptcy in February, alleging he couldn’t pay the $750,000 judgment from a 2007 civil lawsuit Drewes’ parents had filed against him. Levin paid $102,260 of the judgment, but still owes the remainder”
From the mailbag, straight out of H-town:
Today, sept 1st, I got a save the date for the 2010 Christmas party. So yes GT Houston is having a Christmas party this year and apparently they are so excited about it, they wanted to let everyone know way in advance! Woot!
Is this some sort of retention tactic? Probably too little too late…..
Grant Thornton’s timing of this announcement is interesting on several counts. First, Christmaskuh was canceled by KPMG last year in early August. Since this is the first Holiday Ho down news we’ve received for any firm, this may be a good sign.
Second, our source’s suspicion is noted – is GT Houston employing a free booze morale booster here? Will the promise of catering, free hard liquor (at the very least beer and wine) and the opportunity for awkward sexual advances help rally that office back to indifference as opposed to downright morbidity? Oh and watch out for a certain PwC partner who might try to crash the party since he’ll likely be kept away from the booze at his own.
Discuss the early holiday cheer. And keep us informed about your firm’s/office’s holiday rager status.
Complete and utter meltdown to the point where are all fighting over chicken skins and muffin stumps? The next asset bubble to get us back to our mall-hopping weekends? It’s anybody’s guess really.
Grant Thornton LLP’s Business Optimism Index, based on a quarterly survey of U.S. business leaders, decreased significantly to 58.4 in August from a recent high of 67.6 in May. Business leaders are again becoming pessimistic, with only one-third (34%) expecting the U.S. economy to improve in the next six months, down significantly from 63% in May. The hiring outlook has also dimmed; only 38% of business leaders report that their companies will ramp up hiring in the next six months.
So the one thing we can count on is that unemployment will be hovering above 9% until at least the next presidential election. Got it.
We have the luxury (and giddy pleasure) of receiving more crazy ass emails than the average Tom, Dick or Harriet (see: PwC Houston Partner). Some of the stories turn out to be true, some turn out to be rumors. That’s just the way things go.
One reoccurring rumor that continually keeps us guessing though is that of a mega-merger among a Big 4 . Frankly, we take a agnostic approach to these rumors (that’s probably shocking for some of you) but they never fail to pique our curiosity. You can drop us a line with your wild-ass theory about tri-firm merger between KPMG, Moss Adams and Baker Tilly to form MGMT but we can probably debunk it with a couple of emails and phone calls. Plus, the firms will deny ’til they die on any of these rumors anyway.
EisnerAmper is a perfect example.
They played coy with rumors around their merger for about a week and didn’t roll out the BIG NEWS until Monday when they could issue their boilerplate press release on cue (the video was a nice touch, however).
Lots of accounting firms are looking to grow through combinations or purchases in this impotent economy (WeiserMazars, Marcum & UHY, hosts of regional combos) but are the Big 4? Our intuition says no but the rumor mill provides us with whispers of talks occurring between the largest firms.
It’s not completely unheard of for the largest firms, as is evidenced by McGladrey’s purchase of Caturno & Co. that C.E. Andrews was so excited about in his interview with the Minneapolis Star-Tribune’s. Also, Barry Salzberg told the Journal that Deloitte is actively looking (granted, it’s for the consulting practice) but these are small potatoes.
No, the stuff we hear about has a Big 4 firm going with a second tier firm to either leapfrog other Big 4 firms or to inch closer to them. The difference between PwC (#1 in global revenues) and KPMG (#4) is around $6 billion. Depending on how aggressive a firm wanted to be in its merging efforts, the gap could be close quickly or a new #1 could be crowned.
But forget about revenues and the auspiciousness of the being the biggest firm for a second. Can a Big 4 firm realistically merge in a second tier or top 10 firm successfully? Never mind the logistics of office location, files, people etc. What about culture? What about service methodologies? The mere thought of matching up those pieces is a mind job for the people that actually have to deal with them. The bigwigs at the top might play off the problems that such a transaction would create for those in the trenches. Make adjustments would take years.
But it’s been done! Coopers & Lybrand and Pricewaterhouse in ’98 being the most recent. KPMG and E&Y tried it in ’97 and failed so it’s unlikely that the idea of another huge merger doesn’t cross people’s minds every once in awhile.
So let’s talk this out. Are these rumors completely unfounded or are is it understood that there are talks ongoing? If they are rumors, where the hell do they come from and what’s the motivation to spread said rumor? People in the know are encouraged to bestow wisdom in the comments and get in touch with us. And if you’re a vet from a merger of any size, share your thoughts on the experience and how your firm handled it.
On Friday we gave you the review of the recent video conference that featured Stephen Chipman discussing Grant Thornton’s new strategy “Unleashing Our Potential” in an accent that may or may not be fake.
Over the weekend we were fortunate enough to have another source at GT send us the following hand-written note that was sent to all employees prior/in coordination with the video:
This more personal form of communication shouldn’t come as a total surprise. Back in the spring, Chip-to-my-Lou sent a message to Grant Thornton partners encouraging to scribble down some warm thoughts for all those nights and weekends in busy season. An email is so cold and sterile and since SC knows what’s good for the goose is good for a British Gentleman, here you have his own very words and thoughts to serve as a reminder that his blog is no substitute for his elegant penmanship.
After being mesmerized by the prose, the next thing that caught us off guard was Steve-o’s call for you to be unleashing your potential hours before you even plop down in the cube farm. This means you should be unleashing your potential while you lie in bed, in the shower and during your god-awful commute. Likewise, you are still unleashing that potential on the god-awful commute back home after your 12-15 hour day or at the local pub (but don’t unleash and drive).
What’s also strange about this note is the plea that you share “Unleashing Your Potential” with your friends and family. Maybe there are a lot of people out there that like discussing innate corporate strategy (and what it really means) with their loved ones but our source was not impressed, “why would my family and friends care about GT’s strategy?”
Forget our source’s sour attitude for a moment. We want to hear from those of you that immediately sat down your significant other to share this news with them. How did they take it? We’re they completely enamored with this new path in GT’s quest to bring back the “Big 5”? Or did they interrupt you saying, “Honey, I want you to listen to what Stephen wrote to me. To us,” to tell you that this letter was the last straw and that your relationship was over?
What about your buddies at the upcoming Fantasy Football draft? Will you be telling them about the new strategy, possibly risking your expulsion from the league? Or at your next girls night? Will this English gentleman (fake accent or not) get you all swooning over purple hues and roses?
Let us know how it goes.
UPDATE: Naturally, a reader noted a misspelled word in Stephen’s letter that we overlooked. As you might suspect we don’t get too hung up on things but the Chief of Staff really should have caught this.
Well team, despite the little setback for the PCAOB earlier this week, Team Peek is not discouraged. In fact, they were so motivated by the SEC’s little stunt that they thought they’d churn out three major inspection reports today, just to show everyone that they get to say what’s what with these accounting firms (even if it is in an indecipherable combination of vague and wonky prose).
BDO, Grant Thornton and PwC all got their papers issued today, which leaves just KPMG as the last major U.S. firm to not have their report issued. We’ll give you the quick and dirty on these three but if you want the gory details, you’ll have to read them in depth yourself (some o know). We’ll go in alphabetical order so no one gets bent out of shape.
BDO had eight issuers mentioned in its report. Issues included not testing the underlying data used by a specialist, failure to identify a departure from GAAP before issuing its audit report, loan losses and “[failure] to perform sufficient procedures to evaluate the reasonableness of a significant assumption management used to calculate the gain on the sale of a business,” among others.
GT only had five issuers listed in their report with problems including two instances of departures from GAAP that weren’t identified before the issue of the audit report, testwork related to fair value determination of illiquid assets and testwork around revenue recognition. Steve Chipman got away from the teleprompter long enough to sign the letter to the PCAOB himself, along with Trent Gazzaway, the National Managing Partner of Audit Services.
Nine issuers were noted by the inspectors for P. Dubs. Various issues ranging from inadequate testing of foreign locations, loan loss issues (that’s a given) and fair value (another surprise). PwC’s response made it sound like they actually enjoy the whole inspection process, “We continue to support the PCAOB and we wish to convey our sincere appreciation for the professional efforts of the PCAOB staff.” Wonder if the engagement teams that were inspected feel the same?
PwC To Provide Up To $12.5M To JPMorgan For FSA Fine [Dow Jones]
“J.P. Morgan Chase & Co. (JPM) disclosed in a regulatory filing Friday that PricewaterhouseCoopers LLP agreed to provide up to an aggregate of $12.5 million to the bank related to a fine J.P. Morgan had to pay to the U.K. Financial Services Authority.”
Late Ponzi schemer’s accountant surrenders license [Nashville Business Journal]
This accountant managed to surrender his CPA in just under four months for his role in a Ponzi scheme. Dave Friehling had to be stripped of his license nearly 9 months after pleading guilty. NY DoE should get with Tennessee and see how they do things.
IRS to stay at new Austin site after plane crash [AP]
“An Internal Revenue Service office will not return to the Texas building where a tax protester killed himself by crashing his plane into the structure.
IRS spokeswoman Lea Crusberg said Thursday that the agency has signed a two-year lease on another office space in Austin. She declined to identify the location.”
Senate Democrats Propose Scaling Back IRS Reporting Law [WSJ]
“The Nelson proposal would exempt from the reporting rules firms with fewer than 25 employees. For larger businesses, it would require information returns only in cases where payments to a single vendor exceeded $5,000 in a given year—down from $600 in the health-care law.”
Richtermeyer to Chair Management Accountants [Web CPA]
“The Institute of Management Accountants has named accounting professor Sandra Richtermeyer as the chair of its board of directors for the 2010-2011 fiscal year.
Richtermeyer, who also chairs the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, is only the fourth woman ever to hold the position of IMA chair since the organization’s inception in 1919.”
BKD looks to grow health care practice with purchase of Grant Thornton team [Wichita Business Journal (partial subscription required)]
According to the message sent from Stephen Chipman, that we reported on at the end of July, this is the final transition that Grant Thornton will be making. What happens from here is anyone’s guess.