September 15, 2019

PwC

Deloitte Polishes Its Online Recruiting Presence but Who’s Listening?

A few weeks back I talked about the flashy websites the Big 4 have invested in for recruitment purposes. For those of you DT’ers still wondering where your raises went, the answer is now clear.

Facebook, Twitter, YouTube, and a brand new (interactive!) recruitment website. DT is completely revamping their online presence.

Seemingly launched the same week as PricewaterhouseCoopers’ personal branding campaign, DT’s overhaul is much more comprehensive. The Twitter page already boasts 1,500 followers; its unique twist is that employees take turns tweeting about their daily work. Interesting approach, only if you remember to log in to the Twitter page and read the biography of the weekly tweeter.


Deloitte’s YouTube approach is similar to that of KPMG’s established page; clean and consistent website hosting professional videos. One of the videos, entitled “What if your work mattered to the world,” delves, umm, deeply into the importance of cow manure on the job. Taking the term “shitty job” quite literally, I suppose.

Finally, everything is nicely tied together with a flashy site showcasing – shockingly – its youngest and brightest employees. Stories, videos, and links to various DT pages make working for the dot seem downright enjoyable and fun.

The question remains, though – who is this targeting?

From my brief experience on the sites, there’s still no direct way to contact the recruiter responsible for a particular school (PwC boasts the only clear option). There’s no way to ask questions, request feedback, contact the recruiter who’s business card just went through the wash.

This maneuver of hiding behind a flashy website is a running theme for corporate recruiting websites. Why? Why not? The employers hold the cards. The recruiters mailboxes are already overflowing. And if you’re a top student on campus, trust me, the recruiters will find you. So why the website?

See the Joneses out there in front? Yup, better go catch them.

We’re still at a point in the social media world where no one really knows what works best. Facebook has been all the rage for teenagers and young adults, but now that older generations are joining in swarms (i.e. creepy overprotective parents) , there has been a shift of concern among younger users. Twitter is a cluster of a mystery, but the it’s a cluster that everyone (including me) is going along with.

The Big 4 marketing gurus are no different. They know that the recruiters will do the legwork to find the best candidates. They know students will talk to their professors for advice, and listen to their older friends who interned elsewhere.

Perhaps in the end the websites, tweets and cow videos are for the helicopter parents. Seriously. Recruit the parent, recruit the student.

Accounting News Roundup: Earnings Management and ‘Quadrophobia’; Deloitte vs. PwC on Loan Losses; Joe Francis’ Tax Lien Dropped | 02.15.10

Happy President’s Day! As we mentioned on Friday, we’ll keep you company throughout the day but it will be a little lighter schedule than normal. Most of you are suffering from a Valentine’s Day/Chinese New Year/Olympic Fever hangover anyway.

For Some Firms, a Case of ‘Quadrophobia’ [WSJ]
Shout if you’ve heard this before: a study profiled by the Journal states that “many companies tweak quarterly earnings to meet investor expectations, and the “companies that adjust most often are more likely to restate earnings or be charged with accounting violations.”

So here’s another study on restatements and the companies that you . BFD right? Earnings management is rampant. What makes this particular study unique is the authors looked at the frequency of companies rounding their numbers up to meet expectations and discovered that the number 4 appears less frequently in general and especially in the earnings of companies that restate their financial statements. Naturally, they call it “quadrophobia”:

When they ran the earnings-per-share numbers down to a 10th of a cent, they found that the number “4” appeared less often in the 10ths place than any other digit, and significantly less often than would be expected by chance…

In theory, each digit should appear in the 10ths place 10% of the time. After reviewing nearly 489,000 quarterly results for 22,000 companies from 1980 to 2006, however, the authors found that “4” appeared in the 10ths place only 8.5% of the time. Both “2” and “3” also are underrepresented in the 10ths place; all other digits show up more frequently than expected by chance…

In their most intriguing finding, the authors found that companies that later restate earnings or are charged with accounting violations report significantly fewer 4s. The pattern “appears to be a leading indicator of a company that’s going to have an accounting issue,” Mr. Grundfest said.

So it’s safe to say that you can add Quadrophobic to Patrick Byrne’s list of potential ailments.

Deloitte chief reignites accounting debate [FT]
Deloitte CEO Jim Quigley told the Financial Times that banks should “account for losses in two radically different ways to meet the opposing demands of politicians and accountants.” We’re not crazy about trying to please everyone but Quigs might have a good point here.

This would require banks to report two separate line items on their income statements, one for “incurred losses” and one for “expected losses”. Incurred losses report loan losses as they occur while “expected losses” would require banks to calculate an estimated loss provision over the lives of the loans.

PwC hates this idea saying it would ‘muddy the waters’. Richard Murphy thinks PwC is still living in fantasy land, “PWC is arguing against is anti-cyclical provisioning to ensure capital retention. To put it anothjer [sic] way, PWC wants pro-cyclical accounting that encoruages recklessness.”

Since the waters are already pretty f—ing muddy we’re not sure that it would do much harm. Users of financial statements already have a mind-numbing amount of information to dig through, one additional piece of information — a crucial piece in the case of bank financial statements, we might add — shouldn’t cause too much headache.

Joe Francis Off the Hook for $33 Million Tax Bill [TMZ]
Joe Francis’ IRS troubles seem to have magically disappeared, as TMZ reports that the IRS has dropped its $30+ million lien against the Douche of the Decade.

That eliminates one possible motive for the IRS shotgun shopping spree.

AIG Adopts Big 4 “Forced Ranking” Method

Good news servants of the capital markets! Remember how we talked last summer about forced ranking and how it’s rampant within the Big 4 performance ranking system? No? Put it right out of your minds? Had occurred to you because you’re delirious from the lack of sleep, poor diet, et al.?

Well as soon as busy season
is over, we’re sure it’ll come back to you; in the meantime, you’ll be happy to know that everyone’s favorite ward of the state, AIG is now joining you in implementing what might be the worst possible method of rewarding its employees.

American International Group Inc. is rolling out a plan to revamp how it doles out annual incentive pay to its employees, as the government-controlled insurance giant moves away from retention bonuses that have proved controversial over the past year.

The new initiative, called a “forced distribution” system, is being pushed by Chief Executive Robert Benmosche. Under the plan, thousands of AIG employees will be ranked on a scale of 1 to 4 based on their performance relative to their peers, and their annual variable compensation, which may include bonuses, will be determined by their rank. Individuals ranked in the top 10% will get far more relative to their peers.

Yes! The 1 to 4 ranking scale. That’s not quite as shrewd as PwC’s 1 to 3 scale and it’s at least simpler than KPMG’s 9 box but AIG employees have every right to be concerned about this arbitrary ranking system.

Warden Robert Benmosche doesn’t care though, there were too many rock stars, “Mr. Benmosche said performance-appraisal systems previously in place at AIG weren’t discriminating enough. In one case, he said, there was a ranking system with four categories, but about half of the people got the highest rating, and half got the second rank. ‘You can’t have 50% in the top,’ he said.” Bobby B also said that AIG is “unlikely to impose a requirement that underperformers leave.” Write that one down.

Our contributor Francine McKenna who has written both here and on her blog about forced ranking told us, “Investors will get contrived ‘performance’ enforced by cutthroat atmosphere that further encourages excessive risk taking.”

In addition, Ravin Jesuthasan a “talent-management” consultant (not involved with AIG’s change) who was quoted in the Journal (our emphasis), ” [Mr. Jesuthasan said] the approach can work in turnaround situations by helping to foster more accountability, but could be risky if not communicated well or “if links to consequences like compensation and employment are not properly thought through.”

Any of that sound familiar?

AIG Plans Revamp on Pay [WSJ]

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]

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.

Review Comments | 12.29.09

Thumbnail image for Joe-Francis.jpg‘Girls Gone Wild’ Founder Sues IRS – The newly crowned Douche of the Decade is in a litigious mood. After threatening to sue Gawker for the prestigious honor he was bestowed, DOTD is now suing the IRS for freezing his assets. Will someone stop to this man douche?[Web CPA]

Bill Would Require Comptroller General to be a CPA – Now there’s an idea. [Web CPA]

Lehman administrators PwC repay $11bn to creditors – Seems like good news. [BBC]

2010: Get Ready for a Tax-a-palooza – “Facing trillions of dollars of expiring Bush-era tax cuts, President Obama and Congress will be forced to make some critical decisions in the new year.” [Tax Vox]

SEC Seeks PAFs: Jan. 13 Deadline – Professional Accounting Fellows. You. [FEI Financial Reporting Blog]

Let’s Talk About the Terrorist Underpants, Shall We? – Yes. Let’s. [DI]

Revealed: How Oscar Nominee Ballots Are Counted – Because we know you were wondering. [The Wrap]

Tax Court Channels Kenny RogersRaj isn’t the only fan. [Tax Update Blog]

Shareholders Win Settlement in Comverse Suit – Deloitte pitched in $275,000. That’s roughly the equivalent to one partner’s Starbucks budget. [Web CPA]

Bouncing Back: Overcoming a Negative Performance Review – Anyone? [FINS]

Tax Accountants to Get Biggest 2010 Raise – Good news already! [TaxProf Blog]

PwC Doesn’t Want Anyone That Isn’t Special

Denny keeps it pretty vague but we’re guessing he’s not talking about serving as captain of the Delta Chi beer pong team. If you’ve got other ideas on “special,” discuss in the comments.

[WSJ via FINS]

Overstock.com Fires Grant Thornton, Files Unreviewed 10-Q, CEO Remains Humble

patrick_byrne.jpgThere’s really nothing better than an eccentric CEO throwing caution to the wind, consequences be damned.
Insert Patrick Byrne, CEO of Overstock.com (“OSTK”). He issued a letter via press release yesterday that has many people’s attention.
Byrne opens the letter by quoting Nietzsche:
“All things are subject to interpretation; whichever interpretation prevails at a given time is a function of power and not truth.”


Tragic enough but then Byrne really amps it up, droning on for eleven points about his company’s dire situation. Here’s the gist*:
• The difficult accounting treatment of an overpayment received by OSTK from a “partner”.
• Putting the audit out to bid after “eight years of fine service” from P. Dubs, and hiring GT because “my belief that changing auditors every decade or so might be healthy.”
• SEC inquiries into the accounting treatment of the overpayment.
• GT changing their minds on the accounting treament after said inquiries.
• We’re filing an unreviewed 10-Q, P. Dubs is on board for our treatment, GT is fired, anyone (and I mean anyone) want to audit us?
Byrne spends no less than six paragraphs/points explaining GT’s wishy-washy, bending-over-for-the-SEC ways. The man is nothing if not thorough.
Spineless auditors notwithstanding, Byrne will press on, the company will overcome, and he will remain committed to you, Overstock.com shareholder:

I will hold a conference call to further explain and answer questions regarding this matter on Wednesday afternoon at 5:00 p.m. EST (details below). Until then, I remain,
Your humble servant,
Patrick M. Byrne

10-Q [SEC.gov]
8-K: Dismissal of Grant Thornton [SEC.gov]
Press Release [SEC.gov]
*If you want to debate the particulars, be my guest but this isn’t the Journal of Accountancy, feel me?

PwC Needs to Recognize Marketing Genius When They See It

Thumbnail image for Thumbnail image for becks.jpgAccountancy Age has a extra puffy puff piece on P. Dubs’ “head of sport” Julie Clark and how PwC will be everyone’s hero — and she’ll be a regular Einstein — if England can land the World Cup for 2018.
Sidebar: According to the piece, E&Y is sponsoring the Ryder Cup next year and Deloitte is sponsoring the Olympics in 2012. This brings up two points: A) Real original E&Y and B) What the hell, KPMG? If you want to keep up with the Joneses you better dump that always-a-bridesmaid (okay, occasional champion) golfer and get those letters on a BCS bowl or something.
Not only does Accountancy Age not give any details on Clark’s plans but they also manage to completely ignore the ingenious marketing campaign/sponsoring opportunity that would all but lock this thing up.
Need we remind everyone of our first brilliant (albeit subtle) suggestion regarding an accounting firm and a certain sponsored golfer? Working out, isn’t it?
Make no mistake, I’m sure Ms. Clark knows what she’s doing and we’re not expecting her to take our suggestion that seriously but if she blows it…We’ll be expecting a call.

Rumor Mill: ‘Meeting with Partner’ Requests Going Out at PwC

Maybe it’s just an informational sit-down for the new P. Dubs tighty-whities that you’re all going to be expected to wear but our contributor, Francine McKenna had this ominous tweet:
Picture 1.png
Apparently someone else may have an itchy trigger finger. According to the comments over at RTA the emails have gone out to an office on the east coast but nothing more specific than that.
Keep us updated if you get a notice or if you know someone who gets a notice, or you know someone who knows someone, etc.

Layoff Watch: PwC November ’09 Edition

Thumbnail image for becks.jpgWe’re not going to say that the pending endorsement of Becks’ undies has anything to do with it but that guy doesn’t come cheap.

Our contributor, Francine McKenna, is reporting on her blog that PwC Advisory cuts will be going down next week:

I’ve just received word: There was a PwC Advisory partners emergency conference call tonight announcing upcoming involuntary staff reductions.
(This time the source is impeccable.)

New US Advisory Leader, Dana McIlwain laid out the bad news: The time has come to cut. Average utilization is hovering at 69%. Cash collections are millions short. Campus recruiting for Advisory has been stopped cold. Business sucks and then there’s the 800+ BearingPoint folks to absorb.

On November 11th the rank and file partners, fortified after training and coaching by HR via a webcast in the next few days, will chop 300+ professionals from PwC Advisory, at all levels, all geographies, all practices. Most have already seen the writing on the wall via forced ranking.

Well, crap. We’re not talking Lotus Notes developers this time around. If the guillotine does indeed drop next week, it probably won’t come as a surprise with the less-than exciting revenue numbers and the rumors that the firm was phoning in no raises for fiscal year 2010.

Oh and then after whoring themselves out for AHIP, P. Dubs turned around and folded like a cheap lawn chair. That probably won’t win you clients.

We’ll keep our ear to the ground on this but in the meantime, let us know if you’ve got more details on these rumored layoffs or if you get an unexpected email much earlier than next Wednesday. It’s been known to happen.
Veteran’s Day In PwC Advisory: Say Auf Wiedersehen [Re: The Auditors]

Earlier: PwC’s Re-thinking of the Bell Curve Ranking

Also: Ratings, Raises, and Promotions: Forced Ranking in the Big 4

Is David Beckham PwC’s Answer to Natalie Gulbis?

becks.jpg
Nothing is official with Becks of course but PwC has signed on as the first sponsor of England’s bid to host the World Cup in 2018.
Seriously, P. Dubs. Think about it. With the sole exception of RSM McGladrey, accounting firms are totally rejecting the “sex sells” mantra. This is your opportunity.
PWC backs England’s World Cup bid [BBC]

Firm Mascot Challenge: PwC

Thumbnail image for Thumbnail image for Ashley3.jpgWe’ll assume everybody is down with the KPMG Pomeranian and Uncle Dangle for Deloitte. If not, speak now or shut your pieholes.
There’s some resistance to the idea of famous Governor banger, Ashley Dupre, being worthy of the PwC Mascot.
Frankly, since P. Dubs has made some feel like prosties already and has also shown that, as firm, they don’t mind whoring themselves out for some scratch, the argument can easily be made that Ashley is the perfect mascot. On the other hand, the point has been made, and is duly noted, that high-priced call girls are much cooler than any accounting firm.
So you see the problem here but it’s not our decision. We’ll leave it up to you. State your submission for the PwC mascot and give a brief explanation for said suggestion in the comments.
Keep it clever people, mascots already assigned to any other team or organization will be ignored with extreme prejudice. On with it then.

PwC pretty much admits that they are…

prostie.jpg…whores for the insurance industry.

The firm issued a statement today after nearly every news outlet called them out as corporate trollops after the release of their report on the Baucus healthcare reform bill yesterday.


Per Politico:

America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
· Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.

· An excise tax on employer-sponsored high value health plans.

· Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.

· New taxes on health sector entities.

The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:

“The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”

It seems as though P. Dubs is trying to clarify that, “We know we’re whores. We even said so in our report. We’re the classy type of whore though. We won’t do anything unless the money is right but we are good at pleasing our clients.”

What we’re wondering is why PwC would go to the trouble of putting out a report that they knew was one-sided and then their client dances around like the report was brought down by Moses from Mount Sinai. Maybe the firm wasn’t expecting such an enthusiastic response.

WTFK but something tells us that AHIP may not be enjoying their PwC Experience as much as they were yesterday.

PWC statement — Not so helpful for AHIP [Live Pulse/Politico]

PwC Lends a Hand to the Insurance Industry

Thumbnail image for pwclogo.thumbnail.jpgWe’re confident that you all enjoy talking about healthcare reform. If it wasn’t for the long hours you had to work, we’d be reading about all the accountants showing up at the town hall meetings to bring sanity to what otherwise appears to be a meeting of escaped mental patients.
Now, just when you thought that the debate had saturated the country into submission, America’s Health Insurance Plans has put out a new report, courtesy of P. Dubs, that states that the costs of health insurance would rise significantly under the plan submitted by Senator Max Baucus of Montana.
Continued, after the jump


From the executive summary:

There are four provisions included in the Senate Finance Committee proposal that could
increase private health insurance premiums above the levels projected under current law:
• Insurance market reforms coupled with a weak coverage requirement,
• A new tax on high-cost health care plans,
• Cost-shifting as a result of cuts to Medicare, and
• New taxes on several health care sectors.
The overall impact of these provisions will be to increase the cost of private health insurance coverage for individuals, families, and businesses. The net impact of these increases on households would include the impact of these increases and the new subsidies provided under the bill.

The report states that on average, costs will go up 79% under the current system between 2009 and 2019 and 111% for the same time period if the provisions are implemented.
Politico calls bullshit, “The industry, which didn’t like last week’s [Congressional Budge Office] report, bought its own analysis and will tout the PricewaterhouseCoopers findings in new ads.”
On the one hand, you can’t really expect PwC to do put out a report like this for nothing but did anyone really expect them to come to a different conclusion?
As we pointed out recently, accounting firm reports typically don’t get lots of attention but when they do, it’s usually over something that causes people to get all crazy for their particular side.
PwC will certainly be perceived as the insurance industry whore here but since they aren’t actually an insurance company, the firm won’t likely receive the worst of the populist chastisement and will just enjoy some free publicity.
Insurers, docile till now, go to war [Politico Pulse]
Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage [PwC Report]

Since When Do They Let Accountants on CNBC?



What were these guys really saying? Other than accountants are NOT to be blamed for anything. Discuss. And for crissakes Jim, learn how to tie a Windsor knot.

Comp Watch ’10: Is PwC Phoning It in Already?

Thumbnail image for pwclogo.thumbnail.jpgYeesh, we hope not. Problem is, when we reported on P. Dubs canceling Christmaskah last week, people were speculating that P. Dubs was also kinda sorta putting it out there that there would be no merit increases for fiscal 2010. We’ve received additional tips suggesting the same thing so we’ll put out to you to discuss further.
After Tuesday’s spintastic revenue results, Denny and Co. may have concluded that putting it out there that you shouldn’t get your hopes up for a super P. Dubya comeback was the best course of action.
Problem as we see it is that alluding to the idea that raises aren’t gonna happen can’t be good for morale. Plus, there are the continuing rumors of senior managers leaving en masse, via their own will or otherwise. On the bright side, that could set up for a nice little surprise come next year if things turn around and Den-Den sounded pret-tay, pret-tay, pret-tay optimistic in Tuesday’s press release.
Discuss your thoughts on P. Dubs seemingly pessimistic attitude in the comments.

PwC Global Revenue Was Down or Flat, Your Choice

Thumbnail image for Thumbnail image for Thumbnail image for pwclogo.thumbnail.jpgThe spin continues in accounting firm earnings season, this time courtesy of P. Dubya. The Firm reported global revenues of $26.2 billion, according to today’s press release. This was down from fiscal year 2008 by approximately $2 billion from $28.2 billion in global revenues when adjusted for foreign exchange fluctuations.

Assurance services increased slightly, rising 4.8% while tax and advisory revenues both declined 7.5% and 11.4%, again, when considering the foreign exchange fluctuations.

North America’s revenues held up well, only dropping 3.2% ($9.3b to $9.0b) while Western Europe, PwC’s largest region in terms of revenue, had a 11.6% drop in revenues. The drop for this region was primarily due to the strength of the U.S. Dollar.

Denny Nally remains stoic despite Satyam the challenges out there:

“The past 12 months have been challenging for our network, with most PwC member firms facing tough economic conditions. While PwC’s results for FY 2009 are not as good as we would have liked, they have held up well in the circumstances,” said PwC Global Chairman Dennis M. Nally. “In addition the combination of first rate customer service and very competitive pricing has allowed us to increase our market share in many of our markets around the world.

“The ability of so many PwC member firms to successfully sustain their business and their people through this difficult period provides us with a strong platform from which to serve clients in the recovery and to continue to invest in our own growth. While we cut our costs substantially, the PwC network also hired about 30,000 new people and increased its total workforce to more than 163,000 demonstrating a commitment to attracting the right people to serve clients around the world.”

Data for number of employees in fiscal year 2009 isn’t up yet on the global website but we’ve got no reason to not believe Denny when he says that they’re attracting the right people and getting rid of people that cost too much.

Discuss the revenue results and Denny’s vision of the ‘PwC Experience’, which is probably nothing like an acid flashback, for the future in the comments.

PricewaterhouseCoopers* post FY2009 global revenues of US$26.2 billion [Press Release]

*PwC just wants everyone to know that there’s this thing called PricewaterhouseCoopers International Limited (PWCIL) that doesn’t provide services to clients and doesn’t act as an agent for the member firms. PWCIL is NOT LIABLE for anything that these member firms f*ck up because that’s just ridiculous. If they screw the pooch, they are TOTALLY ON THEIR OWN. Don’t come crying to us about an audit failure because we will deny ’til we die. This has nothing to do with Satyam, btw. It doesn’t. We swear.

Is AMC Auditor Shopping?

popcorn.jpgMaybe! But the movie theater company did dump PwC on October 1st according to a filing with the SEC after just two years.
According to the filing, P. Dubs had only been engaged as AMC’s auditors for the last two fiscal years (4/3/08 and 4/2/09) and the audit committee decided that KPMG will now get the pleasure of opining, also effective on October 1st (congrats, we guess?).
As is typical in these auditor swaps, AMC’s filing states that they had no disgreements with PwC “on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.”
We’d like to think this came down to a PwC partner making some sort of stand against the asinine concession prices that are borderline unethical but that’s just our personal vision. If you’ve got your own ideas about the reasons for the dismissal, discuss them in the comments.
AMC Entertainment hires KPMG to replace PricewaterhouseCoopers [Kansas City Business Journal]

Accountants Raiding Accountants Probably Makes for a Hilariously Awkward Scene

gun_awkward.jpgJesus, that was fast. After Wednesday’s snoozer raids at the E&Y office in Hong Kong, Icelandic police have raided the offices of KPMG and PwC in Reykjavik, Iceland, according to the Daily Telegraph.
More, after the jump

Police have raided the offices of KPMG and PricewaterhouseCoopers (PwC) in Reykjavik, seizing documents and computer data as part of an investigation into alleged criminal activity at three collapsed Icelandic banks…The office of Olafur Thor Hauksson, the Icelandic investigator charged with examining the collapse of
the three banks a year ago, confirmed that 22 policemen and six foreign accountants took part in the searches yesterday.

Six accountants? Whoa, this thing was way more serious. No coffee and bagel strategy here as it would have totally distracted the investigating accountants from their jobs.
Likewise, we doubt anyone was strapped for this raid. Especially the number crunchers. We can definitely picture them begging the police though, “C’mon, they don’t even have to be loaded. We’ll just leave them in the holsters. WE SWEAR.”
The most excitement that we can envision was some bean counter trash talk that may have escalated into open-hand slaps and flailing arms and legs. The real police, after enjoying this hilarious scene for a few moments, would have had no choice but to break up the nerd fight as it began encroaching on the investigation and other people’s personal space.
KPMG and PwC Reykjavik offices are raided by Icelandic police [The Daily Telegraph]

Layoff Watch: PwC

Editor’s note: Francine McKenna is a regular contributor for Going Concern

We’ve gotten reports of recent layoffs of over 100 professionals in the Advisory practice and 40 in U.S. IT. The IT professionals were out of the Tampa office, including some that were Lotus Notes developers. Right. We didn’t know anyone still used Lotus Notes either.
Sources indicate that this was more “forced ranking” layoffs as many were high performers that were dismissed because of suddenly ‘less than expected’ ratings. We’ve covered PwC’s less than clear approach in the past.

PwC has not immediately responded to our requests for comment.

We reached out to Francine McKenna, of Re: The Auditors and she provided this comment:

“PwC is the biggest abuser of the “forced ranking” approach, artificially downgrading folks to make them feel lousy, alone, and uncomfortable discussing or otherwise reacting to getting let go. They refuse to admit they are overstaffed because they would view it as a direct indication of their inability to manage effectively (notice I said manage, not lead).”

If you have more details on these layoffs, send us an email to our tips address and discuss in the comments.

Rumor Mill: PwC Jumps On the Cancel Christmaskah Bandwagon

Thumbnail image for pwclogo.thumbnail.jpgFollowing the Grinchy yet charitable ways of KPMG and E&Y, rumor has it that P. Dubs is passing on holiday parties in all offices and donating $1.5 mil to charity instead.
Odds on Deloitte making a similar announcement prior to Halloween to complete the Scrooge Superfecta are currently going at 5-2.

PwC India Auditors Found Guilty of Professional Misconduct

pwclogo.thumbnail.jpgThe Institute of Chartered Accountants in India (ICAI) have found two former employees of Satyam and four Price Watherouse India auditors guilty, according to Times Now:
Continued, after the jump

Two Satyam officials found “prima facia guilty” are Ex CFO V Srinivasu and Senior Vice-President, Internal Audit Cell, V S Prabhakara Gupta. The disciplinary committee also found four auditors from Price Waterhouse, Bangalore–S Gopalakrishnan, Srinivas Talluri, P Shiva Prasad and C H Ravindranath prima facie guilty of professional misconduct, [ICAI President, Uttam Prakash] Agarwal said.

The exact repercussions of this are not clear so we’re trying to run someone down at PwC to enlighten us. Hell, if you’ve got the knowledge, please share. In the meantime, as far as we know, two of the auditors are still in jail which probably made for a less than pleasant summer vacation.

PwC ‘Prostitute’ Hopefully Won’t Spend it All in One Place

Thumbnail image for prostie2.jpgDammit people, if someone is going to go to the trouble to sue the #1 company in all of Great Britain for every bloody list that can possibly be put out could we possibly get a more anti-climatic ending?
Mihaela Popa, who was obviously unaware that accountants are made to feel like prosties all over the world on a daily basis, hence, why the f*ck are you so special, wound up receiving £750 from a tribunal, according to the Romanian Times.
More, after the jump


The court:

“We find that in no way whatsoever did the unlawful victimisation either prevent Miss Popa from obtaining employment or cause her to lose employment. There was no loss of opportunity in this case. It is simply a case of injury to feelings.”

Maybe we’re a little shrewd but repeatedly seeing your name in the British press next to ‘whore’, ‘prostitute’, and ‘communist spy’, and then for a court to basically say you’re thin-skinned, all for £750 seems totally worth it.
Earlier: What if Everyone Sued Their Employer for Being Made to Feel Like a Prostitute?

PwC Is Going to Teach You Some Manners

manners.jpgEven though lots of you are beyond help but regardless, we’ve heard that P. Dubs hosts dining etiquette get-togethers in order to teach you heathens how to use a napkin, leave your feet off the table, not to lick your plate when finished, etc.
Never having the pleasure, inform us and our less dignified readers about your experiences at these or similar events so we can all learn something.
And for God’s sake, if you’re going to one of these events this week, we’ll remind you of our only advice: wear pants.

We Get It. PwC Wins Every Employer Award in the UK

annoying list.jpgThe UK’s annoying hot crush on PwC continues as the firm has won the The Times High Fliers Top Graduate Employer of the year award.
This is the sixth year in a row that P. Dubs has won this award. They were also named top accountancy firm for the tenth year in row and won the top finance company award this year, the first time an accounting firm has won the award.
We know it’s a little late on a Friday to be asking our UK friends to participate but we’d really like to know how P. Dubs manages to win all these awards.
The vote early, vote often mantra immediately comes to mind but is it legitimately possible that PwC is really the best place to work in the UK year after year? Whatever the case may be, it’s just annoying.
If you’ve done some time across the pond and have stories of Google-esque cafeterias, rub n’ tugs, puppies for everyone and the such, let us know, otherwise, debunk.
PwC voted best place for graduates [Accountancy Age]

Tax Grads in Colorado Can Get Over PwC Now

pwclogo.thumbnail.jpgLess than thrilling news out of the Denver office of PwC as a source has filled us in the firm’s plans for tax graduate students:
“PwC told tax graduate students at the University of Denver that they werent [sic] hiring again until September 2011.”
We touched on this last month, as campus recruiters have found that their intern pipelines will end up filling their full-time budgets for the following year. We can only assume that students specializing in tax at the other schools that P. Dubs-Denver visits are being told the same thing. If you’ve got news on firms’ hiring expectations at your school, discuss or drop us a line at tips@goingconcern.com.

KPMG UK Head of Audit Explains Rentokil Arrangement

KPMG_chair.jpgKPMG’s new arrangement with Rentokil has brought some differing opinions amongst the firms, even prompting PwC to take a not-so direct jab at the Radio Station for scooping Rentokil.
Today, KPMG’s head of audit in the UK, Oliver Tant, wrote a piece for Accountancy Age explaining the firm’s new “extended assurance”:
Continued, after the jump

Under the service, those responsible for corporate governance may ask KPMG to perform work beyond that which is required for the statutory audit, for example by testing a larger sample of controls or additional transactions and balances of lower value than the materiality level set for the statutory audit.
This work does not replace, conflict with or undermine the independence of the external audit it simply extends our understanding of the business and its controls and hence the breadth and depth of insight we can offer. That is why we call it extended assurance.

Mr. Tant also cites the savings passed along to the client, which is so hot these days. He also explains what “extended assurance” is NOT:

The service is not about merging the external and internal audit functions. A company can continue to have its own internal audit function and those charged with corporate governance will still be responsible for assessing the overall adequacy of a company’s control environment and the need for skilled internal audit expertise.
Ethical standards do not prevent the auditor from doing more than the bare minimum to support the audit opinion. We will identify and plan the work necessary to support our audit opinion independent of any further work we may be requested to perform.

As we mentioned, PwC has already made their opinion known and E&Y’s head of assurance in the UK, John Flattery has stated that they will not be “mirroring the arrangement.”
It’s already been speculated that this type of arrangement would not be allowed in the U.S. but there has been no indication that the U.S. firm is pursuing such arrangements.
Since independence is kinda, sorta important for auditors, and many of you are ramming these rules into your brains as we speak (or just waiting to see if you learned anything) discuss in the comments how you feel about the arrangement. Would it pass the smell test Stateside? Is KPMG evolving to the market or are they on thin ice? Are P. Dubs and Ernie being self-righteous dicks since they didn’t think of it first? Feel free to get ugly about it.
KPMG audit head defends controversial Rentokil role [Accountancy Age]

What if Everyone Sued Their Employer for Being Made to Feel Like a Prostitute?

prostie2.jpgIn, if first you don’t succeed suing your former employer news, a London Employement Tribunal opened yesterday for a former PwC forensic accountant who is suing P. Dubs for £40 million after the firm was exonerated in a similar suit she brought in 2007.
More, after the jump


Mihaela Popa claims that while she worked at PwC in London, the following allegedly happened:
• She was made to feel like a prostitute
• She was told ‘Eastern European women are whores’
• She was known as ‘Mihaela and porn’
• During the initial swine flu hoopla, she was told ‘this Romanian bird will have a slow death’
• She also claims that some co-workers thought she was a Communist spy
For all this alleged name calling and accused espionage, Ms. Popa is suing PwC for “£40 million in compensation for loss of earnings and hurt feelings”. That tidy sum wasn’t just pulled out of the air, mind you. This is because she “previously claimed that she was given promises she could become a £750,000-a-year partner.”
Since being made to feel like a whore is common at accounting firms many of you have referred to yourselves as such, we’re not sure that “being made to feel like a prostitute” really flies with us.
As for the Communist spy charge, we can’t barely recall a time when this actually mattered, since the Cold War effectively ended 20 years ago.
P. Dubs “strenuously denies the allegations” but we could probably all agree that there are a few bigots working at PwC in London. On the other hand, this could said about any firm, in any city in the world.
Discuss your thoughts on the case, and if you feel more like a whore at your job then Ms. Popa, in the comments.
Accountant claims £40m from PricewaterhouseCoopers [Telegraph via Accountancy Age]

PwC Isn’t Starving

pwclogo.thumbnail.jpgSince flat is the new up or whatever the hell people are saying these days, we’ll go so far to say that PwC continues to kick ass in the UK. Their revenue increased 0.5%, to to £2.25 billion, for the latest fiscal year. Advisory revenues managed to drag the audit and tax business out of the negative as the advisory revenue increased 5% while audit and tax dropped 1% and 4%.
BFD. Standard boilerplate statements accompany these numbers. Tough economy. Challenges. Hard work. Whatever. Partners still seem to be doing ok, as per partner profit was £777,000, although that’s down 3%, according to Accountancy Age.
More, after the jump


Fine but what we’ll kindly remind you of is that the firms in the U.S. don’t have to issue these fancy-schmancy annual reports with all the gory details. If they exist, we’ve never seen one.
Wouldn’t it be nice if the U.S. firms were required to put out thousands of copies of reports with plenty of pictures of happy employees, oh, and squeeze in some financial statements? One more explanation from Dr. Phil or Jimmy Turley about the awesome job you’re all doing wouldn’t hurt either.
Maybe you get enough of that already but isn’t knowing how much potential liability the firm has relevant to everyone that is stakeholder in the firm? Or what is being spent on magic 8 balls? The Brits don’t seem to have any problem putting out there. Just a thought.
PWC_Annual report 2009.pdf

PwC Better Bring Their ‘A’ Game to This Year’s Oscars

OSCAR_INSIDER_hmed.hmedium.jpgWe’re not sure how long PwC has been counting the votes for the Oscars but we read some news this morning that made us pause with concern.
Apparently the Academy of Arts & Motion Pictures Sciences thought it was a good idea to change the voting rules for the Best Picture category back to the “preferential system” which was last used in 1945.
Our concern lies with the fact that this change in voting method might not mix well with the desire for routine that is forever embedded in the double helix of accountants, specifically auditors.
More, after the jump


The most common set of instructions that an auditor receives, as some of you well know, is “Do what they did last year”. This mantra, if not cast aside for the 2009 Oscars, could quite possibly be responsible for a material misstatement of epic proportions.
It’s far too early to speculate what films could be affected (maybe not) but we are concerned that since the awards are only six months away, the auditors don’t have much time to have at least a half a dozen meetings to discuss the ramifications of this decisions, let alone start planning, GASP, new procedures.
Best Picture voting gets a makeover [Variety]
Academy Makes Big Changes in Best Picture Voting [The Wrap]

PwC Basically Says That the Lehman Brothers Bankruptcy is a Trainwreck

trainwreck.jpgIf you find yourself out of work but are willing to endure several sleepless nights across the pond, PwC in the UK may need some help with the administration of Lehman Brothers.
More, after the jump


Reuters, via NYT:

PriceWaterhouseCoopers, which is working with over 100 companies, mostly in the UK but also in continental Europe, said on Sunday: “We’re dealing with a large number of entities and therefore the claims could be as much as $100 billion.
“These claims are exceptionally complex and we anticipate a large amount of further work in dealing with (them).”
A significant amount of the claims arose as a result of guarantees issued by the parent company to its subsidiaries, the administrator said.
PwC said it had worked with administrators in other affiliates to understand Lehman’s accounting system so a standard approach to the reconciliation of inter company balances could be agreed.
“If this can be achieved then it should reduce the likelihood of affiliates suing each other in pursuit of amounts that are owed between the different Lehman estates,” it added.

Not sure what kind of expectations Lehman’s creditors have but we’d encourage a cynical outlook.
Lehman Claims Could Reach $100 Billion: PwC [Reuters via NYT]
Lehman Bankruptcy Won’t Be Pretty [JDA]

Rumor of the Day: PwC Tax Gets Some Love?

Don’t hold your breath but we just received a tip that new managers in the transfer pricing group got notified last week that they’ll be bumped 5% and get a small bonus. You lucky ducks will be making everyone jealous since you won’t be affected by the soda inflation. If you’ve got more details, you know what to do.

PwC Layoffs Continue to Mystify Us

pwclogo.thumbnail.jpgWe’re slowly getting details on PwC layoffs that occurred a few weeks ago that were part of the newly stripped down performance rating that we talked about last week.
More, after the jump

I was one of the employees involved in these so called layoffs out of the Boston office. I can say that these staff cuts are coming at a time in which PwC, specifically it’s advisory services, has seen a dip in it’s numbers concerning profit…The lay off that I received came as a big surprise to me. For one I did not recieve a single negative reveiew throughout the entire performance year. I was actually on track for promotion and was reccommended by numerous individuals to be promoted to senior associate…From what I have heard, these staff cuts have been happening at all levels and all lines of service.

What’s not clear is how each office determines the timing of the layoff. We haven’t gotten any indication that there is one big whacking day or if it’s staggered among offices to keep on the DL. The one thing that seems clear is that PwC whackings come with little or no warning as performance ratings seem to magically change for the worst.
This seems to be all occurring while Denny Nally was spreading good cheer this Spring. Via an email we received from a reader:

While I am realistic about the challenges ahead, I continue to see the glass as half full and, based on the picture we have right now, I am committed to moving forward with our people strategy. That means, even though in some markets and in some practice areas we may have excess capacity, we will continue to manage our cost structure and explore all available options before we consider reductions to our staff.

Not exactly sure what “all available options” includes but it sounds like those have been exhausted because “reductions” are certainly occurring and all indications have been that everything remains “performance related” and that all levels are affected.
If you’ve got details on your PwC office’s latest layoffs shoot us some details, including numbers, city, practice, and severance.

PwC Canada Wants Everyone to Know That They Didn’t Audit Bernie Madoff’s Funds

pwclogo.thumbnail.jpgWith all the D talk out there re: anything Madoff, and most recently possible hotboxing and manscaping we’d hoped that maybe this whole story had taken a turn towards smut for good. Alas, we find ourselves back to a litigious story, this time it’s P. Dubs of the Canadian variety that are getting their asses sued:
More, after the jump

The Canadian arm of PwC has been named in seven separate lawsuits claiming as much as $2bn in damages for investors who lost almost everything in the largest fraud in history…PwC Canada has been accused of negligence for failing to spot that Fairfield Sentry’s $7.2bn of assets simply did not exist. The firm signed off accounts in 2007 that stated 97.3pc of Fairfield Sentry’s assets were held in short-term US treasury bills – an asset class that should be safer than cash.

PwC, obviously quite aware that a sex scandal wrapped inside a financial scandal may confuse anyone that is both distracted by sex and financially illiterate, issued this statement:

“PwC Canada provided auditing services to the Fairfield Sentry fund, but was not the auditor for Bernard Madoff Investments where the alleged fraud occurred. PwC Canada’s auditing of the fund’s financial statements fully complied with professional standards.”

Now, to some, this may seem unness for P. Dubs to explain that they didn’t audit Bernie’s funds since this never would have gotten past any reputable firm. However, since we now have a sex scandal mixed with the biggest financial scandal ever, involving thousands of duped investors, PwC decided to err on the side of caution.
Madoff victims to sue accountants PwC over feeder fund audits [Telegraph]

Today in Big 4 Thriftiness

soda machine.jpgOur post from yesterday re: PwC’s concern over your consumption of high fructose corn syrupy beverages has struck a nerve with some.
So, being big believers in striking while the iron is hot, we thought we’d tell you that about a tip we received telling us that KPMG has also recently raised the price of soda in their offices from 50 cents to 75 cents.
Thriftiness continued, after the jump


We also learned that any perks, luncheons, birthday cakes, etc., etc. that do not benefit the entire office have been eliminated. Gourmet coffee machines apparently still remain because the coffee drinkers will not settle for freeze-dried Taster’s Choice.
Bottom line seems to be one of two things: 1) The firms are squeezing pennies until Lincoln’s beard pops off or B) The powers that be are faux-concerned about the reality of you sitting on your asses for 12+ hours a day and are attempting to get you to cut down on the calories.
Discuss your firm’s favorite cost cutting measure, unique revenue ideas, or your plans for losing the Big 4 fifteen in the comments.

PwC Thinks it Can Dance

Probably not a new video for most of you but it’s the best PwC has to offer, as far as we can tell. If you’ve got other candidates, shoot them our way.
Video, after the jump



There you have it. Grant Thornton and BDO people need to lock it up. Point us in the right direction for a stupid video. We’ll put a poll together or something tomorrow to vote on the vids.

PwC is Thinking About Your Health

penny.jpgIt’s no secret that accounting firms are desperate either to cut costs or to find new sources of revenue.

Today’s wonderfully shrewd example comes courtesy of PwC, who decided that your four or five soda a day habit was a perfect weakness to take advantage of. Apparently the firm increased the price of a can of soda from 30 cents to 60 cents to squeeze out an additional $30,000 in revenue.


Our source informed us that this was a such a brilliant idea that a partner felt compelled to mention it at a firm alumni council dinner. Classy.

It’s entirely possible that PwC is just concerned that too many of you are consuming far too much high fructose corn syrup but our speculation is totally unfounded.

If you’ve got more examples of your firm taxing you on junk food consumption or other redonkulous cost saving measures, discuss in the comments or shoot us the shrewd details to tips@goingconcern.com.

PwC Calls Out KPMG

argument.jpgAwhile back, we mentioned how KPMG didn’t seem so concerned about the appearance of independence. Well now it appears that P. Dubs might be getting a little self-righteous about the whole issue or they’re just bent out of shape that the Radio Station swiped the Rentokil audit by lowballing the proposal:
More, after the jump

KPMG’s arrangement was able to shave 30% from Rentokil’s audit, but it was the manner in which the firm brought about the cost saving that raised eyebrows. Audit guidelines warn against two threats when an external auditor takes on internal audit work. The first threat, known as the self-review threat, warns against the external auditor relying heavily on its own internal audit work. The second threat, known as the management threat, warns against the internal auditors assuming the role of management.

KPMG says it’s totally fine because that’s where the client’s interest was:

KPMG said it was fielding interest from potential clients. ‘Unequivocally we have found interest,’ says Oliver Tant, KPMG’s UK head of audit. ‘We will be discussing it with more people, undoubtedly as will other competitors.’

PwC, at present, seems to be taking the highroad, even though we’re pretty sure they think Rentokil are a bunch of cheapskates:

PwC, would not be drawn on its opinion on the Rentokil audit, citing its policy not to comment on clients, but did say: ‘It is vital that we maintain our independence from – and in no way are seen to act as part of – management infrastructure…Internal audit can often be regarded as acting as part of that infrastructure.’

Typical passive-aggressive accounting rhetoric but it still sounds like P. Dubs is calling bullsh*t on KPMG. Feel free to defend your firm’s position by whatever means necessary (we suggest low blows and name calling) or get on your soap box about independence.
Debate rages on over KPMG’s cut-price Rentokil audit deal [Accountancy Age]

Huron Consulting Beats the Numbers, Cooked Books and a Bunch of Other Shadiness Notwithstanding

Cooking the Books.jpgIf you’re an accountant and you see a company’s name in the same sentence as “accounting irregularities”, “alleged cooking of the books”, or “SEC investigation”, your likely advice to any person would be to run away from said company like it was a band of lepers.

This is just conventional wisdom, nothing ground breaking. However, since Huron Consulting reported big second quarter numbers, the stock price is up more than 30%.
Now some of this is short sellers getting burned but according to one analyst quoted by Reuters, some investors may be going long because of “confidence in the underlying business”.

We’re not too crazy about the “underlying business” for a lot of reasons:


1. The Company said in a filing that they are likely going to take a goodwill impairment charge that will put it in noncompliance with a financial covenant of its credit agreement.

2. It’s worried about “‘reputational issues’ that may affect the company’s ability to retain its senior managers and attract new talent and new business”.

3. Can’t predict the outcome of the SEC investigations or private lawsuits (P. Dubya take note).

4. They warned that their current numbers may not be legit since the new management has no idea what the hell else is out there in the way of kickbacks payments made to Huron Management, questionable allocated billable hours (but don’t worry, this won’t affect client billings) or anything else for that matter that may call for another restatement of its results.

5. The whole Arthur Andersen connection creeps people out.
Far be it from us to speculate on a company’s future but this place seems doomed. We might just listen to tomorrow’s earnings call to see if there’s anything worth mentioning but in the meantime, put your money in…WTFK?

Huron Consulting fights to stay alive [Greg Burns/Chicago Tribune]

Huron shares rally after restatement, SEC filings [Reuters]

Follow-up on PwC Layoffs

pwclogo.thumbnail.jpgA quick follow-up on the layoffs we mentioned in last week’s firm watch that went down at the PwC Denver office. We heard over the weekend that it was approximately a dozen employees that got the boot and it occurred at all levels including at least one senior manager.
The layoffs, which occurred last month, were deemed to be “performance related” which has been P. Dubs’ consistent story regarding cuts. Similarly, everyone seems to consistently disbelieve that story. If you have more details regarding these layoffs or if there were recent layoffs at your office, let us know at tips@goingconcern.com.

Your Jailed Accountants Update

iStock_000001511480XSmall.jpgThe two P. Dubs-India partners rotting in a prison because, according to them, we’re duped by the geniuses at Satyam, got their vacation extended to August 19, according to The Business Standard. We have no idea if India’s prisons are the PMITA variety but at the very least, it’s crazy-ass hot.
Hyd court extends Raju’s remand till August 19 [The Business Standard]

Huron Book Cooking Lawsuits Likely to Be Filed this Week

Cooking the Books.jpgHuron Consulting, who cleaned house late on Friday and is restating three years of financial statements, is likely going to be named in a class-action lawsuit, according to Reuters.
Huron, who need we remind you, is not a CPA firm and does not perform attestation services, what with all those pesky independence rules and whatnot, has seen its stock price drop from just over $44 last week to hovering around $15.
More, after the jump


Huron was founded by two dozen Andersen partners, according to the report, including the resigning CEO, Gary Holdren. So, natch, these guys were probably viewed as having not so sterling reputations, and now, well, this is a little awkward.
It’s more than likely pretty much a certainty that this particular accounting mishap will bring more heat on auditors, in this case, P. Dubya, as management seems to be able to manipulate their reporting, regardless of what the auditors try to do.
We reached out to PwC on this story, who would not comment on client matters. We thinks this might become a PwC matter before long…If you’ve got any information on this story shoot it our way at tips@goingconcern.com.
In Huron scandal, shadows of Arthur Andersen [Reuters]

Firm Watch: PwC

pwclogo.thumbnail.jpgThis week we’re putting together a series of posts on the six largest accounting firms to give you an idea what their latest image seems to be based on the latest news and rumors we’ve read or heard about them. At the end of the week we’ll wrap up with a completely unscientific and probably unfair ranking which you will be allowed expected to take exception with.
We’ll start with P. Dubs because they seem to have had the uncanny ability to attract bad news lately:
Get the gory details, after the jump


Satyam Fraud in India – $1b fraud, two auditors rotting in jail, Satyam throwing the Firm under the bus every chance it gets. This is the story that will definitely not go away.
Discrimination Suit in London – GBP 40 million lawsuit, including alleged sexual harassment. P. Dubs is saying the lawsuit is “without merit” but at the very least there are a number of bigots working there.
• Rumors of PwC interns working 60 hour weeks in the New York office. Might as well give them an idea of what they’re in for, right?
• Chosen to take a suicide mission contract in Somalia to monitor the incoming aid
Wage and hour lawsuits in California – Listed as defendant in three cases
Huron Consulting Restatement – P. Dubs isn’t mentioned in this debacle. YET.
Madoff exposure – listed as a defendant in over a dozen lawsuits.
As for layoffs, we haven’t heard much lately. There was a rumor that the PwC Denver office had let some associates go in the past few weeks but we don’t have any more details than that. Layoffs that have occurred in the past year at PwC we’re rumored to be of the stealth variety and not related to the recession which nobody really believes.
So, that does it for P. Dubya for now. What are we missing? Whatever office you work out of, send us the latest scoop on layoffs, performance reviews, promotions, pay raises, bonuses, juicy gossip, scandalous stories, etc. to tips@goingconcern.com and we’ll update the posts appropriately throughout the week.

Huron Consulting is Clearly Not a CPA Firm

iStock_000006509640XSmall.jpgFridays are great for lots of reasons. They’re especially great for announcing bad news long after everyone has left work to get their drink on.
Huron Consulting announced late last Friday that the CEO, CFO, and Chief Accounting Officer were all quitting and that their financial results for 2006-2008 were being restated. The restatements result in total net income for that period being reduced by nearly 50% from $120 million to $63 million.
According to Reuters:

The restatements are being made because Huron’s board audit committee discovered that shareholders of four businesses that Huron acquired between 2005-2007 redistributed portions of their acquisition-related payments among themselves and to certain Huron employees.

More, after the jump


Soooo, regardless of what Huron is saying, the CEO, CFO, and CAO sounds like someone might have been taking kickbacks, which we totally understand considering the economy and whatnot.
Huron was ranked 43rd on Fortune’s list of 100 fastest growing companies just last year. They help their clients “face complex matters that demand extraordinary combinations of financial, technical, and industry expertise.” Clearly they are not using any of this expertise on their own books but whatevs, nobody’s perfect.
What’s also strange is that Huron really goes out of their way to put the universe on notice that they are not a CPA firm and do not provide attestation services.
“Huron is a management consulting firm and not a CPA firm, and does not provide attest services, audits, or other engagements in accordance with the AICPA’s Statements on Auditing Standards.” This is stamped at the bottom of virtually every page on the website because THEY WANT TO MAKE THAT CLEAR.
Btw, Huron’s auditors are PwC, who really don’t need any additional bad publicity. If any of you Chicago P. Dubs peeps got any inside info on this story, shoot it our way to tips@goingconcern.com. The stock is getting hammered today so we’ll continue to watch this to see how it plays out.
Huron CEO, CFO quit as restatements slash profits [Reuters]

PwC’s New Investigation Will Invite Terrible Bovine Jokes

cattle.jpgPwC has investigators all up in their grills again as another audit is going to be subject to an investigation. This time a sub-prime lender in the UK, Cattles.
Cattles is blaming the whole shitshow on a “breakdown in internal controls”, which has been the standard PR sound bite since before Enron.

The Accountancy and Actuarial Discipline Board (AADB), which regulates the profession, announced the inquiry on Thursday.The board, part of the Financial Reporting Council, said it would examine the conduct of PwC and its individual auditors concerning the preparation of financial statements of Cattles and Welcome Financial Services, its subsidiary, for the year ended December 31 2007 and for the six months ended June 30 2008.

According to one analyst referenced in FT Alphaville, Cattles was letting loans go 240 days delinquent before taking any impairment charges. Apparently PwC was okay with that practice.
And since the AADB is going to be looking at “individual auditor conduct”, what are they going to discover? Besides the partner and manager’s daily fat-cat lunches, obv. We invite your thoughts.
We’ve also got the feeling that this might be the type of engagement where you could include a high-def photo of the manager dry-humping the partner’s leg (wearing a leash and spiked collar, natch) as part of the audit workpapers and it would get signed off on anyway. But, like we said, it’s just a feeling.
UK watchdog opens probe into PwC audit of Cattles [Reuters]
Regulator probes PwC over Cattles audit [FT.com]

PwC Needs a Lesson or Two in Spin

240px-PricewaterhouseCoopers.svg.pngIn, lets talk about anything but Satyam, PwC news, the largest Big 4 firm was rated highest among professional service providers on brand recognition in the Brand Finance Top 50 ranking of Best Brands of British Origin.
“Chairman of PwC [in the UK] Ian Powell said the recognition was ‘testament to the strength and reach of our clients, the talents of our people, and the contribution that we make to the wider community.'”
We won’t take anything away from PwC but sometimes bad news is the best news for brand recognition. So this whole Satyam thing is probably not getting the credit it deserves. Come on P. Dubs! Lemons into lemonade!

PwC most recognised professional services brand
[Accountancy Age]

In Case You Need Another Reason to Hate the French

french flag.jpgWalking around the PwC office in Midtown Manhattan, our blogospondent in the field happened across a couple of young ladies having the picture taken in front of the P Dubya sign out front, proudly posing as if it was their names on the building at 300 Madison.
Said blogospondent approached the young ladies and asked if they worked at the P Dub and they responded in heavily French accents, “yes”. As result of further prying, it was revealed that the ladies do work a lot during “busy times”, sometimes between 50 and 60 hours a week!
This compared to an American tax associate who we spoke to just a couple days before who, in the last fifteen days, had worked 185 hours.
Let’s recap: America – 185 hours in 15 days in the middle of June vs. France – 50-60 hours in one week during the “busy time”.
American vitriol towards the French may now ensue.