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Showing posts from 2008

client service part deux

Sure, auditors are a pain in the arse for clients, but it definitely goes both ways. I'd pay a good amount of money to get 5 minutes to yell at/ream out/insult/put them in their place. They get to say whatever they want to, but we can't..and it's really painful to hold it in. I can understand the Ari Golds of the world, and the 'client/customer is always right' phrase...but seriously, these contracts should come with a clause w/ 5 free minutes to say whatever I want to say to the controllers and VPs of the world. Ari Gold, Entourage

Client: "I don't understand why you want this"
What I say: "Well, this is why.."
What I want to say: "Well you dunce, instead of wasting time asking why I want it, just give it to me and move on with your life"

Client: "I don't think that's right. Let's ask your partner/snr mgr if he wants to do this"
What I say: "Sure...let's touch base with him/her right now"
What I want …

Delegation - it's a beautiful thing!

One of the perks of being in the audit practice is the ability to delegate work so early in your career. There are many parts of this job that can be done mindlessly, and although some people like doing these elevator-man tasks, it tends to frustrate me. The beauty of this job is the ability to push such tasks down to the staff associates, which only leaves us with the review process. I don't really think one can achieve this early in their careers in other fields. Sure, I hated doing this my first couple years, and you will too. But somebody has to do it.
Hey, gotta give this profession some props, however rare that may be.

love thy self?

What's with the people who love patting themselves? Come to think of it, what's the terminology used to describe someone like that?
"Look at my reviews, they know I'm good". "Now the solution that I recommended"...repeat that 10 times over a 3 hour meeting. "The partner said that I was one of the best here". Maybe it's insecurities..maybe it's competition? Okay, I understand insecurities...but competition? Come on now, this is auditing...even if you're albert einstein you still have to have the organizational skills of an administrative assistant to do well in your first few years. Heck, even if you are "really good", there's no real competition between your fellow auditors. You are not going to gain anything out of it. This is not a Jack Welch organization where only the cream of the crop survive.

There's a saying that floats around within our firm, and I'm some other companies too.."All the muscl…

college career fairs

Conducted another round of interviews this it really looks bad out there. Both said that the companies coming to career fairs have significantly reduced. Most companies out at undergraduate business schools are hiring only accounting majors. One of the candidates said that it was either this or grad school. All four candidates had only one-two interviews lined up. What a bad time to be looking for jobs.
For those of you who have CNBC, there was a really good documentary this week called "The Money Chase - Inside Harvard Business School" . Check it out on replay or on dvd. Even the Harvard mba candidates are having a tough time finding jobs. Ibanking jobs have dried up, consulting's a little slow. Most are taking jobs that were not their first choice. For those of you joined bschool this september, we're all hoping it'll get better by the time you graduate.

change in mindset

What a difference a year can make. Due to client scheduling conflicts, a week opened up in my schedule. Once I voluntarily let a couple managers know, I got put on a client immediately to help out on some pending issues. If this was any other year, I would have been mad since I lost out on some extremely rare unassigned time where I could relax during the holidays. This year, I'm actually okay with it since it'll keep my utilization rate humming along. Bad times, sad times.

client service

Client servicing? Do we really have to be nice and polite to clients all the time? Sometimes I just feel like reaming them out for their necessity to give us a hard time for even the simplest requests/questions sometimes. It's almost like a memo goes out to half the clients out there to be hard-asses even though they really have no need to be. If you can easily answer our question/provide documentation, but are just too lazy to do it, then don't stubbornly defend against taking 5 minutes to help us help you. The more you piss us off, the more our "professional skepticism" increases. Seriously, aren't we supposed to be independent and not have to appease them every so often?
There is this very thin line between independence and client "service", and I don't like it when we have to bite our lips and not speak our mind when they go off on one of their tantrums. Oh well, I guess, doing just enough to maintain client relationships while being as professio…

interviewing (part three)

Answers to some questions posted by a reader -

"a) Do you think that passing the exams (all 4 sections) would give an advantage for the entry-level job seeking? "

Absolutely, I'd be pretty impressed as an interviewer if you already had your CPA by then. That's pretty huge.

b) "What were the questions that you asked by candidates when you were interviewing them?"

Well, I did have a standard list of questions provided by the firm, a list of recommended questions I should say. That was a basic list of questions..example of your strengths and weaknesses, example of a time you worked in a team through a stressful project, etc...essentially the questions on leadership, teamwork, communication, etc. that pop up in a google search.
I'm not a fan of these questions because I remember making up canned answers and giving them out in every interview. So I primarily focused on getting a sense of their personality, intelligence, motivation and communication skills.

pragmatism vs theory

I've been running into this issue every now and then...the issue of following the guidance word-for-word or being more pragmatic and coming up with some reasonable procedures. I fall under the pragmatism umbrella and really can't find a good way to essentially say that sometimes, it's just not practical to follow the guidance to a T. There is a lot of judgment involved in our work, and one of the principle tenets in accounting, if I'm right, is cost-benefit. Sometimes it's just not worth the hours. Aiming for perfection at the expense of hours and hours of time is just plain ridiculous and unreasonabe. I'm currently dealing with a senior who needs everything to be spotless, perfectly documented, and literally stresses out if he doesn't find what he's looking for in the guidance. Seriously, we're not saving lives here.


This is to address a comment concerning the interview process

"just curious how hiring has changed, if at all, since the massive layoffs? "

Hiring students at the staff associate level has dipped a little bit, but nothing out of the ordinary.
At that level, billing rates are the lowest and so we can afford to have staff at different clients. The 2nd year associate position is a little more tricky because billing rates are higher and they can't senior engagements. Since we really need a new influx of staff every year, there can never be a hiring freeze.

I was wondering how you choose which candidates to recommend for offers? Is it a gut feeling? or are there guidelines that you have to follow?

There are should be similar at all firms..but communication skills, leadership skills, teamwork, and a few other skills are what we focus on. You have to make a good impression on the interviewer, that's really the biggest key. Don't show off too much nervousness,…

interviewing the new factory workers

Interviewing college kids for a job is always fun. Been doing it for a couple years now, and it's really interesting to see them come in and lie their tails off. "I really find this job interesting". Oh come on now, don't bullsh*t a bullsh*tter. One individual I interviewed said that he was looking forward to an opportunity to police the industry. One didn't even know what auditing was. It's really interesting to be on the other side of the interview process. I feel bad everytime I don't recommend somebody I's almost like I'm essentially shaping their lives. But, it's for the better. They're better off doing something in which they excel, that's a Jack Welch philosophy, and I subscribe to it.

PS - To the college kids interviewing out there, if you get a job offer, and the interviewers send out a congratulatory email, reply back even if you're already sent a thank you note.

rough sailings

Budget cuts, layoffs, veiled warnings from partners...should I actually be glad I still have a job? It's amazing how things can changer in a year. There were more layoffs this month, especially at my firm's non-audit departments. Some groups got cut by 20%, one got virtually shut down.
Emails are being sent out once a week stating that expense policies have changed, and have gotten much stricter and cheaper now. This is great given that I have a list of expenses to run through in the coming weeks. Stay at a preferred choice hotel, use a preferred choice airline..even if it's more expensive than flying something like say..Southwest? We can't even expense gps devices while using rental cars now? Should I just expect to land in a city and know my surroundings? Okay, I get it..we have to be conscious in the current environment, but it's not like we're flying business class or staying at the Waldorf Astoria? I mean..come on. Haven't you hurt us enough?
A partner r…

comfort zone

What's with these public service ads on the blog?

Anyway, wanted to touch on the comfort zone that people get into at work. I've been railing against people drinking the kool-aid ever since I began working at my firm. Now, I'm dangerously close to getting into a comfort zone. This is one step before drinking the kool-aid myself. I still have a long ways to go before I do that. It kinda reminds of the stockholm syndrome (wikipedia definition: Stockholm syndrome is a psychological response sometimes seen in an abducted hostage, in which the hostage shows signs of loyalty to the hostage-taker, regardless of the danger (or at least risk) in which they have been placed)
I've getting used to my clients, learning the system, not fighting against it like i used to. Not complaining as much as I used to. I'm like an aged boxer, I took so many swings against a wall, that I'm tired, weak, so I've just decided to sit back and waive the white flag. Given the current state …


And down goes the market. Again, and again, and again. Stocks are getting pulverized in the US and abroad. 401ks are going down, the populace is cutting down on spending, and retailers are closing down. So how's everything in the big 4 world?
Not so good. Not bad, but not good. A lot of clients are cutting back on fees, when at the same time, the SEC wants more auditing done around the effect of the credit crisis on companies. (Translated: More hours, less $$. ) The big 4 then turned around and laid off/counseled out/fired quite a few employees, even in the audit practice.
A partner told me that the reason for this was not enough people left this year, and so the factory model was thrown out of whack (Not in those words, but that's the essence of it). This made a lot of sense to me, and further legitimizes my audit factory theory. I noticed during the summer/early fall that not too many people left this year, and it was really intriguing given that the last few years had a decen…

how the financial turmoil is affecting the big 4

Wow. What a crazy market it's been the last couple weeks. Among the casualties..Lehman, Merrill and AIG. The Fed decides to bail out AIG, but not the stock holders. They then decide to ban short selling on financials. Now there are rumors that they're trying to help take distressed assets of company books. Unbelievable. Potentially a $1 trillion plan. Investing currently is not for the faint of heart. For those who haven't really been following what's going on, please do so. This is stuff for the ages.
Anyway, enough rambling. So how is this affecting the big 4? I had a conversation with some partners concerning this issue, and they believe that the big 4 are "recession-tolerant", not "recession-proof". Yes, clients are fighting back on the fees this year more than ever before. Yes, some clients are being swallowed up by the market and thus no longer exist. Yes, they're using this "crisis" as an excuse to offer lower raises than in year…

going on the CFO/Controller route

"If one is interested in going the CFO/Controller route by beginning in Assurance, which sector do you think is best to start in with a Big 4 firm? (Financial Services, Consumer Products, Insurance, etc.)"

Say you'd like to be the controller of a manufacturing firm, get on as many manufacturing clients as you can, including publics, stay until manager, and you should be able to get a controller position at the firm. As far as the CFO position goes, you'd either have to work to get there from the controller position, or in some instances, CFO positions are offered to senior managers and partners.

"in-demand majors"

Here's an article on the "in-demand" majors from an employer perspective.
No. 2 - Accounting.

Here's the part that relates to Accounting -

"2. Accounting ($47,429)
For those who delight in number crunching, a
bachelor's degree in accounting can lead to occupations in financial and investment planning, budget analysis, tax preparation, bookkeeping, payroll services, and auditing. Opportunities are often best for CPAs, MBAs, or professionals proficient with accounting software.
Accountants ensure that a firm is run efficiently and records are kept accurately. Expect long hours -- especially around tax season.
Job outlook: Thanks to retirees and a faster-than-average job growth due to new business and changing financial laws and regulations, accountants can enjoy favorable job opportunities."

Source: McGolerick, Elizabeth Weiss. "The Top 5 In-demand Majors" Retrieved from <>

accounting lingo

Auditor alert!! what pains me- employees using accounting/auditing lingo outside of work - examples -
a) Oh, I don't know. Our bar tab was immaterial.
Not cool, not cool. Say cheap, say inexpensive, but not this.

2) Oh, I go to new york once every quarter.
How about - every three months, few months, once in a while.

3) There isn't much of a variance between the two movies
How about - difference?

4) "Let's vouch his bill to cash paid"
No about..Make sure he paid???

5) Wanna go bowling? Yea, that appears reasonable.
Whatever happened to "okay"

6) can you sign off on that bill?

And please, for heaven's sake...lay off on the accounting inside - jokes. It's painful to hear, it really is.

I'm sure there are plenty of other auditing terminologies that I missed. Feel free to post them in the comments section.

happy hours

It's mid summer time..which means happy hours every thursday to send off people leaving the firms. I'm not a fan of the term 'happy hour' when it comes to people leaving. Any other suggestions out there for events in their 'honor'?
There are also two schools of thought on the happy hours - One half don't want one and just want to slip out without any fuss. The other half look forward to their happy hours as a rite of passage to get out of the firm.
What bugs me is the difficulty in laying down the credit cards so the tabs can keep running atleast for 3-4 hours. Come on now, these people leaving the firm spent a good amount of time working their asses off for the partners. A little thank you should be in order. Granted, from a partner's perspective, why should they pay when people leave? Well, why don't you pay when people stay? Let's look at it another way - a happy hour to celebrate the people staying? That should be cause for celebration.

client communication

I just got an email from a 3 am...good feels refreshing to know that there are people on the client side who are working harder than us. Usually they check out mentally by 2, are on youtube until 5, and hit the streets right after. The gems that do stay later and work efficiently and know what they do, those are the ones who I'd like to communicate with, and not need a translator. I've had a controller of a software company once stop me midway through a conversation and ask me how SOP 97-2 (software revenue recognition in english) worked. Keep in mind that this was for a public company. After biting my lips trying my best not to laugh/cry, I explain the software guidance and hustle back to our conference room. I looked at my team and told them we were in big (bleeping) trouble. If the controller of a software company doesn't know how to recognize software revenue, we'll be spending more hours in the conference room than the hours egyptians spent b…

pseudo busy season?

Client delays led to a long day (10 pm) at the office yesterday. Not used to working late in the summer time, don't want to get used to it. Clients sometimes have these ignorant mindsets wherein they whine about giving us documents 'early', and then at the same time want our comments back earlier. Give me a break, most of you do nothing anyway most of the time and then scramble around trying to finish stuff during crunch time. Oh well, guess I'll leave the schedule game to senior management.

right time to leave the big 4?

Following is a question in the comments section on my post about my manager leaving -

"Are clients just allowed to offer auditors jobs whilst they are working on the client? Whats the etiquet[t]e with leaving Big 4, can you leave when ever you want?are employees frowned upon when they leave during certain times in the year?"

Good question. Now this relates to audit only. I believe tax and consulting services have no real barriers. Usually, as part of their "engagement letters" to clients, firms make companies sign something saying that they will not offer jobs to anyone on the current audit team. Now this could vary by engagement, but from my experience, this is really the general engagement letter condition. There's also usually a 1 year cooling off period that enables auditors to move to the other side. For example, if this manager had an inkling that he might be offered something on a particular client and he really wants to work for them, he can ask to get o…

next thing you know, they're gone

So I'm just recovering from a bombshell dropped by my manager. I've literally been working with him since I began, and he's essentially my point of contact for all accounting related questions, regardless of the client I'm on. He's also my buffer to senior management, i.e. takes in their bs and only drops a little down to me.

Following is a recollection of my conversation.

8:30 am
Manager (after walking in, while standing up) - So there's no other way to tell you this, but I just got an offer.
Me - umm..ok.(We get offers every week, so I brushed it off.)
Mgr - Wow, that was easy. I wasn't looking forward to telling you.
Silence. I stare at him. He stares back. None of us blink.
Me- Wait, an offer offer.
Mgr - Yep
Me- So you're considering it??
Mgr - Yep
Me - How seriously?
Mgr - Pretty seriously
Me - You're not going to actually take it are you
Mgr - Blank Stare
Me - No F**king way. No No No..You can't..F** No shot. You serious?
Mgr …


Inventory...the one part of our job that is actually tangible, literally. How does it work? Well, we usually send out a staff associate to do a "sample count", i.e. counting a sample of the company's inventory and matching it to what the company has a listed in its count sheet. And then we look at their count sheet, select a sample, and make sure that it actually exists on the floor. Obviously, the procedures differ by firm. But man, do we count some weird shit sometimes. People have counted gold bars, sushi, oil, massage chairs, semiconductors, vegetables, dangerous biochemicals, gym equipment..shit, I can go on. We've walked into warehouses, freezers, shipyards, etc. etc. etc. It's fascinating, and I kinda like it, just because you get to see what exactly the company sells and how the whole inventory process works.

This is also a complex audit account, one that the senior auditor usually works on (not the count), and boy, it is a pain to audit. I'd rather co…


"the type of education most people have at the Big 4? What types of degrees and what level e.g. undergrad, postgrad?"

Most of the staff associates and senior associates have a Masters degree in accounting, along with a bachelor's degree in accounting. Managers and above usually have a bachelor's in accounting.
The main reason the staff and seniors have Masters' degrees is because some states require that CPA candidates have a 150 credits. So the colleges decided to offer Masters degrees (30 degrees) in order to meet this requirement and thus give candidates another degree.

Either way, it really doesn't matter. All that does is whether you have a CPA or not. Most staff associates are studying for it. Some seniors have it. And, with very few exceptions, all managers and above are required to have it. Whether you have a master's degree or not really doesn't matter, it's basically a way to get you to the 150 credit requirement.


Did some traveling for clients recently. Personally, I like traveling to different cities and such. But it does come with some disadvantages - a) we're literally spending the entire day with our team (including dinner), and so having a good team is key b) we just tend to work late since we usually stay only for a set number of days.
The advantages are plentiful - a) you get to see different cities b) expense through decent food we usually dont get on a daily basis at home. I hate dealing with the expense police though...hey we're sacrificing our personal schedules at home for our firm, least you can do is let us live it up.

Right time to get out?

Yet another article on the move from public to private accounting.

Here are a couple excerpts -

"In fact, moving from public accounting to a position in Corporate America is easy, says Patricia DiNunzio, regional managing director for placement firm the Mergis Group, who works in Columbus, Ohio. DiNunzio sees specific good times to make the switch: "You either do it as a senior after two years of public accounting work, as a manager after five years, or as a senior manager after eight years," she says."

"Whenever you move, pay attention to timing and don't move during the busy season, adds Sheryl Martin, executive director of firm operations for WithumSmith+Brown, P.C., a CPA firm with 11 offices along with Mid-Atlantic corridor. "I would never recommend that anyone move in the busy season," she warns. "Smile, stick it out and leave in May. It's always frowned on when you leave, but if you're leaving during tax season, you're inevit…

no accountant layoffs on wall street

Here's an article that expands on the security of accounting jobs in wall street

As bad as the accountant tag is, and as bad as the auditor tag is, one beautiful thing about our experience is that it is arguably the most technical of the lot in the financial services field. And with businesses getting more and more complex, the accounting gets more complex, and thus barely any accountants are getting laid off. Job security is a beautiful thing.

cpa lawyer combo?

Here's an interesting article essentially stating that the cpa jd combination is a deadly combination in the marketplace.

My take - a jd gives anything that added oomph, especially an mba. An mba jd from a top school would be a killer combo. The thing with this cpa jd thing though, is that it pigeonholes us into certain jobs. I'm sure we'd get paid top $$$, but will we be happy? Now that's a different question.

transfer to a big 4

"Is it tough getting a job at the big 4 after working at a smaller firm?...Any idea what GT's rep is in the states?"

Personally, I don't think it's hard transferring to a big 4 firm after a year at GT, or any other firm for that matter. By GT, I'm assuming you mean Grant Thornton. It depends on the office, i.e. whether that particular regional office is in need of people. If the office needs senior associates, and you've got a couple years at another firm, you should be able to transfer. Worst case scenario -they make you repeat a year as a staff, and it has happened before.

As far as Grant Thornton's rep goes, I think it's the biggest non big 4 firm, and most people in the big 4 world have heard of it. Outside of public accounting, I'd say that most people haven't heard of it, but really, a big 4 experience is so over-rated it's not even funny. But hey, we'll take it.


By Kevin Reed
Accountancy Age
15 May 2008
KPMG is to shed around 90 staff from its corporate finance and transaction service teams in the first concrete sign of the damaging effects of the credit crunch.
The move will send chills through the transactions departments of other firms. The lack of deals means corporate financiers are not in strong demand.
KPMG has not formally announced the number of redundancies. A spokesman confirmed there had been ‘a number’ of job losses in the two divisions. ‘This is related to market conditions that we and other organisations are encountering.’ There were currently no other plans to cut posts, he said.
The firm had announced strong performance in both corporate finance and transaction services in 2006/2007, growing 16% and 25% respectively. Last year’s numbers would not have reflected the credit crunch greatly, however, with the firm’s year end in September.
The last major wave of job cuts in the firms followed the collapse of Andersen and a market downtur…


So a co-worker started applying for jobs ONLINE, and one of the jobs he applied to, was for a premier corporation. He applied for a finance job, a completely seperate field from accounting. He had the typical accounting background - masters in accounting, CPA, big 4 experience.
Gets a call back from the HEAD recruiter the NEXT day. The recruiter tells him that they're in dire need of people in their accounting department, and also essentially tells him that he has no shot of getting into finance and that it is pretty competitive.
We realized that the more time we spend at this job, the more pigeon-holed we get in our careers. Just felt a punch to my stomach...make that 10 punches.

increase in big 4 fees

For those of you who are entering into your first busy season next year, or just finished busy season, take a vacation. I need one right now to recharge my batteries, can hopefully take one soon. At least we have the spring going for us.
Here's a little article of interest ...can we say oligopoly...

British Business Monitor
30 April 2008
(ADP) - Apr 30, 2008 - The four big audit firms' domination has caused an average rise of 2.4% in their fees not taking into account other factors like regulation changes, London School of Economics' study shows, the Financial Times reported.
PwC, Deloitte, KPMG and Ernst & Young audit all companies listed on the FTSE 100 index and almost all on the FTSE 350 after the collapse of Arthur Andersen in 2002.
Although the fees' rise might seem insignificant, the fact that the rise could have resulted from a market dominance reinforces the debate about the risks of just four firms auditing the accounts of all largest businesses.
The Big Four…

move from the big 4 to smaller accounting firms

Currently in that post busy-season slump period where I'm about ready for a vacation, except the wonderful folk over at scheduling and upper management have pretty much taken over my schedule for quite a while, so i guess i have to be vacationing mentally while working.

Just wanted to share this article that harps on the movement of companies towards smaller accounting firms and away from the big 4. I'm all for it for two reasons - a) it frees up resources for the big 4 so they can focus on other clients and not crunch five clients with resources only available for 3. b) I feel for startups and other small companies with cash crunches to keep paying high audit fees to the big 4 when they can get an attestation from the smaller companies, as long as the banks don't require a big 4 auditor. In most cases, banks want established independent auditors. Last I checked, there were more than 4. And it's not like we offer anything special that the smaller firms don't (outsi…

fired from public accounting?

This is to address a posted question here..."do people ever get fired or let go from Big 4and for what reasons?"

Fired -
Yes, people do get fired, and this is pretty much for the same reasons anyone gets fired from a company. Wrongdoings, Extended unexplained absences, etc. I know of a person who got fired for being "caught in the act" at work. If I were to go into it in detail, this would turn into an adult entertainment blog. Another kid got fired for complete disrespect of authority. And there are quite a few other instances that led to different firings at the big 4.

Layoffs -
Now this is where it gets interesting. For my firm for example, it really depends on the region. In some regions, there are a decent amount of clients and the firms are desperate for people, like in the east coast of the US. In some regions, like the southern states, layoffs have occured due to a lack of enough clientele to keep them busy through the year. The new term that hr uses nowadays i…


Apparently what the client deem to be material is the threshold we should use for our materiality. To defend them, I guess it's understandable that our materiality would be so low at times, and small amounts to them could potentially be big numbers to us. But that's why we're much better off working with clients who had public accounting experience, and thus know what materiality means. No wonder public accountants are in such demand these days.

Prior year?

Me - this is what you need to do

client - well..umm...this is what we did last it has to be right

I'm sure a majority of us have heard this terrible excuse by now. Some of the answers we hear from our clients are absolutely amazing. I really dont understand how some people can get to certain higher positions in a company. It just boggles me that people who are not qualified enough (I wouldnt go so far as to say incompetent) get to positions that influence a company's financials, public or private.

I feel like sending out a reminder email every day saying "Your G/L is NOT our support"
I don't care if you give me a hundred g/l printouts, it will not help.

It looks like once people get out of public accounting firms, they might have a hard time adjusting to cultures that might be fun but just not strong on the smarts/experience front.
But then again, maybe that's an advantage.

On the flip side, we can look at auditors who just do what was done last year. Gra…

client questions

Was just doing my taxes and came across a line other Other Income asking the paraphrase...this is where you declare "Embezzled or other income from illegal activities"

Right, because if I did embezzle or get income from other illegal activities, I'd want to tell the government so, and not just that, I'd pay taxes on it.

Although we do have such questions on our checklists for clients, I don't think i've ever heard of anyone get an answer that said..yep, i saw fraud.

What would make more sense is if these questions were aimed at the non-VPs and officers, to the lower/middle rungs of the totem pole, where will people will be more willing to reveal information anonymously. How about a public accounting hotline..where anyone in a company can dial their auditor anonymously to report any unethical activity? Now that just might work sometimes.

"legal shield" for accountants

Some more legal protection for accountants is on the table to be passed this month. The more CYA for us, the better, it's almost impossible, given the time we spend on clients, to dig into every nook and corner and find mistakes/frauds that some dumb nuts at these companies commit. ..

By Judith Burns
Dow Jones Newswires
February 27, 2008
Consumer and investor advocates raised concerns Wednesday about giving new legal protections to accountants who can show they used "reasonable" professional judgment in reviewing a company's books.
An advisory committee to the Securities and Exchange Commission headed by MFS Investment Management Inc. Chairman Robert Pozen recommended such an approach in an interim report this month. The Pozen committee is slated to issue its final report to the SEC this summer.
The idea: have the SEC and the Public Company Accounting Oversight Board establish a clear list of do's and don'ts on exercising professional judgment, and create a "s…

Least stressful job: Accountant?

This link has been going through the email/messaging chains....and on first glance, is absolutely ridiculous. Apparently an accountant has the least stressful job

Over a preschool teacher and a pastry chef? Are they serious?

On second glance, they're referring to the accountants in corporate offices, plugging away on software applications, doing pretty mindless stuff. I guess I can agree with that. But I will put Pastry chefs over Accountants. Seriously?
And pre-school teachers cannot be at that's a stressful job, up there with ibanking.

reason behind CPA bonuses

Recently had a discussion with a Partner about salaries and the CPA bonus. My assumption that partners played a big role in the salary allocations is apparently wrong. He was genuinely suprised that there was little or no difference between entry level employees and people 2-3 years senior. He did express his opinion, stating that the pay definitely needs to be higher in this environment. And as far as the CPA bonuses go, firms are ranked sometimes by the number of CPAs, not employees, so a public accounting firm needs to have more CPAs in order to have a better ranking, which enhances their rep and competitiveness. Fair enough.
And props to this partner, here's hoping that all partners thing this way, and the salary structure changes.

Overtime (continued)

On a roll, and spewing words while I'm at it...
a question that's on my mind...I had to "eat" a ton of hours on clients, and I'm sure quite a few employees out there have. By "eating" hours, I mean working more hours than I actually charged so as not to go over budget too much, and end up getting reprimanded by the powers that be.

So, in this case, if the firms do lose this overtime lawsuit, I lose out on the hours I did not charge, and thus not get compensated for it? And I'm sure I'm not alone. Oh well, another win for the audit machine.

Cellphone bills

There has been a furor recently about a certain arm of a public accounting firm making the employees allocate their cellphone usage amongst clients so the clients can pick up the tab instead of making the firm pick up the tab. By doing this, the partners have more money to divvy up amongst themselves so they can take a weekend vacation to the Bahamas whenever they feel like it. I'm not saying that this was the motivation behind the change, but it does make the employees spend a lot more administrative time breaking down their cellphone usage by client, instead of wasting valuable client usage hours.
Props to the other public accounting firms that are picking up cellphone bills for all employees. Helps us save a decent amount of money.

Conspiracy Theories

With KPMG losing the overtime case in Canada, it would set a precedent for the rest of the big 4 to be sued and lose the case. Then, it could potentially trickle into the Big Kahuna, good ol' USA. And if one of the big 4 loses here, then all hell could break lose. Why? Because if employees get paid overtime for the all the hundreds of hours they put in over the past few years, we're talking millions of dollars of compensation by the public accounting firms.

Wanted to put out there a theory a co-worker had, in light of KPMG's defeat in the overtime case in Canada.
a) Firms like PWC and EY have started offering CPA bonuses to employees who pass their CPA in their first few years with the firms. Now, this overtime compensation only applies to employees who have not been professionally certified. Why? Well I honestly have no idea, but apparently that is the case. So even though the firms are spinning the bonus to reward employees for passing their exams early, it could actually…

Sued for failing to detect fraud?

Following are excerpts from a recent Wall Street Journal Article about Ernst and Young and the rest of the big 4...

Ernst & Young LLP settled for nearly $300 million a lawsuit brought against it by Cendant Corp., according to a securities filing late last year by a former Cendant subsidiary. In its suit, Cendant alleged that Ernst negligently failed to detect a massive fraud during its audits of a unit of the company.
Ernst had already, in 2000, paid out $335 million to Cendant shareholders as a result of the fraud. "

While the most recent settlement doesn't eclipse the size of Ernst's first Cendant payout, it is still one of the largest payments made by an audit firm. In 2007, for example, PricewaterhouseCoopers LLP agreed to pay $225 million to settle audit-malpractice claims arising from its audit of Tyco International Ltd. Deloitte & Touche LLP, in late 2006, said it would pay $210 million to resolve claims related to Adelphia Communications Corp.&quo…

leaving audit

This is to respond to the following blog question - "on average how many years do most auditors stay at big 4 before moving on and what position are they before they leave?"

On average, I'd say 3 years. The way I've seen it unfold.first year.. 5% of the newbies leave..the second year, around 15-20% of the sophomores leave...the third year, 20-30%. By the time you hit manager, 70-80% of your batch will probably be gone. It's good for the firms in a way, because they can't promote everyone to the managerial level. And so the audit factory churns.

Ideally, I'd say..if you want to be in the accounting field but don't like the hours...stick around until mgr and then leave, if you don't want to be in the accounting field, leave asap...if you don't mind what you're doing and don't know what you want to do yet, keep at this job until you figure it out. Heck, maybe one will make partner by then.

Honestly though, the best accountants I see at my cl…


And while we're on the busy season subject, just wanted to throw out there the intriguing culture within public accounting. Unlike most other jobs (consulting is probably the exception), we're all pretty much working in the same conference room. Which means we have to deal with personalities all the time. This can be painful at times, since people's sanities can only be maintained for a period. After this period, it's no-holds-barred. Arguments, kookiness..ah the fun of trying to manage all this and get people to actually work. I've probably tried 2-3 different managerial styles, which works effectively on one team member, but then there's the token i-have-no-motivation team member who you just can't get to work. What do we choose - personality over work or work over personality. Damn, can't we just get both?

another piece of hiring news

Sorry for the inconsistency in posting, as all of you know, busy season essentially means your weekday life is on hold. It's literally been 14 hour days straight through. I feel like I'm living in my conference room. My team member just told me she was tired of looking at spreadsheets all day, and she was tired of this, and I feel bad for her, but the only positive response I could think of was that her other clients were probably worse.

Just wanted to share another news byte related to hiring in the accounting field. It's really amazing that while world economies are struggling, public accounting's going at full steam. Guess I have something to be thankful for, and can always keep reminding myself that I never worry about job security...
here's a quote from the article and the link..."Accountants at all levels and in all organisations have seen their stature elevate and new opportunities emerge. [There is] an urgent need for professionals with the right skills…

As the economy goes do the accountants?? Not so fast

A big bright advantage of being in public accounting is the sense of job security. It takes a lot to get fired, and firms are just hiring aggressively these days. Some of the people I've seen who've been hired...are just people I wouldn't even have considered hiring if given the decision. There is a lot of bitterness within the firms, but everyone knows that they can be a little vocal about it since their jobs are safe and secure...atleast for now. Unless Congress decides to pass legislation repealing some of Sarbanes Oxley's rules or something drastic is taken to lax the strict accounting standards, firms will continue to hire and compete aggressively for "talented" bean checkers.
See the Associated Press's latest news story about the the bullish hiring of the accounting firms here.

putting together your own audit team

This is in response to the question on whether I get to choose my own team...

It's possible, but takes a good amount of effort. So many client schedules intertwine that it is difficult to pull somebody you like, and place them on to your team. So if you work with somebody and you do end up meshing with their personality and they work hard, you'd want them on some of your clients but will notice that they are already booked.
I've pretty much been working with the same higher-ups since I started. Managers are usually the ones who set schedules. So hopefully he or she is in the loop about the quality of personnel needed for a specific job. The unspoken rule around this firm are that the better you are, the worse the client are that you get put on. Why is it the case? Well, it essentially means that you will be able to handle the more complex clients and your worklife will be more hellish. Unfortunately, the firms don't do enough to seperate the good auditors from the averag…

racing down the deserted streets

You know, it's kinda sad the little thing in life we find to amuse ourselves...the jokes get funnier after could be a bad joke but if it's after 9pm, and we're all mentally cooked, we're pretty much laughing at everything.
On to another topic, for my fellow auditors, how about those uncongested streets out there when we leave at 10-10:30 pm on the weekdays. I burned my tires racing down the streets back home, street racing team members back until where-ever they take their exits....if there's one thing good about working late, it's not dealing with traffic. Have to look at the silver linings right!

Wall Street Journal Article

Not sure if I'm allowed to post this, but it's a good article nevertheless

By Suzanne McGee
The Wall Street Journal
January 22, 2008
Public-accounting firms are ramping up efforts to hire and retain senior-level talent as new auditing and accounting rules continue to fuel clients' need for their services. As demand grows, poaching among firms has intensified, and pay and perks are on the rise.
"People keep one-upping each other, going to experienced people with bigger salaries and other perks," says Lorraine Hack, executive director of the financial officer practice at Russell Reynolds Inc., a New York executive-recruiting firm. "Companies are bending over backwards not just to hire new people but to try and keep the ones they have, offering them flextime schedules and other benefits."
"We beg, we borrow, we steal, we grovel, we scour the world" to find accountants with five-plus years of experience in public accounting, says Mark Friedman, New York…


Memo to all controllers/assistant controllers out there: your internal records or general ledgers are not adequate supporting documentation for us, no matter what you think. How can you put a number in your financials and say that the general ledger is the final support, even if it's in the millions. If you find it hard to understand why we aren't using that as evidence, well stick a post-it in your office: public accounting auditors do not just trace stuff from one number in your internal record to another number in your internal record. Please go back to school and sign up for introduction to accounting, or google 'public accounting' to understand what we do. We can understand if you think we only do taxes, but if you really think a piece of paper that your team creates is exactly what we were looking for, well, just move to another position. Please!

empty buildings

midnight, midnight, a nice little welcome to busy season start. Absolutely empty buildings, darkness everywhere, the only movements are by the cleaning folk, but they leave by 9-10 too. Come back home, mindlessly spend a few minutes watching tv, hanging out, then sleep. Few hours later, you're back in the same place with your audit family, i.e. team. Same shit - you have a good time with them, tempers flare in the wee hours of the night, fun stuff.

Link of the month

Just got sent this link, and found it absolutely hilarious, but sadly true. It's about what auditors really do, and that it's definitely not taxes. The only tax information I know is the stuff I learned from the CPA exam (which I've already forgotten) and the required information to complete my personal tax return. Even for this, I use the help function all the time on the tax softwares to help explain stuff to me.
One of the best parts of the article -
"According to D’Amato, busy seasons are typically three things: “using calculators the size of pizza boxes and wearing ties in a casual environment to show their clients that they mean ‘business;’ beating up a clients’ junior staff for a month straight about the lack of internal controls because the signatures did not fully penetrate the triplicate on the department-wide birthday card for Larissa in Accounts Payable; and completing a 38-page internal controls checklist on the petty cash fund while completely ignoring the…


This is in response to the "what planning do you do prior to starting an audit?" question in the comment question.

Most people, including me, seemed to have gone through a "wtf do I do" moment when they first seniored an engagement. I had to look to others for help. Heck, I literally asked a senior manager something on the lines of.."What do I do now?"
I was used to doing the significant account work, and had little or no experience doing the planning/admin stuff. Wouldn't it be easier if we could just google "how to plan an audit" like we did for our college papers. Anyway, this is what I can come up with (keep in mind that it might probably be different for any firm) -
a) Plan the schedule accordingly - make sure that the current hours your team is budgeted for will be enough. For example, if this is your first year senioring, and the person on it last year was a few levels above you, odds are, unless you're a superstar, you will take mo…

big 4 overtime lawsuit

Just clicked on the ad on the right side of this page and it was absolutely hilarious. The ad's title was "Big 4 overtime lawsuit" so how could I not click on it? If you do see this ad, check it out and enjoy.
One thing I don't get is that it assumes that employees with their CPAs get paid Overtime. I must be missing something there, since I don't know of any big 4 firm that pays Overtime in the US.
For those of you who don't see this ad on the top right...
here's the link:

The Power of Caffeine

Day 3 - no caffeine yet, and I'm struggling.

I figured i'll do the whole 'eat/drink healthy' thing during busy season by cutting off soda/coffee for atleast 21 days, following the 21 day hump rule, where-in I need to try something for atleast 21 days before giving up on it.

But my system is currently low on fuel, and I'm struggling. Not sure if it's a good idea to audit and not be caffeinated to get the energy to do it. Check that - definitely not a good idea.
I've tried tea, V8 vegetable juice, fruit juice, water, odwalla protein shake and I'm still struggling to be pro-active.
This reminds me of two instances -
we had an intern during busy season, and this kid just got into a food coma every day after lunch. The poor kid wasn't used to office hours being that he was still in college, and was literally half-asleep in his chair by 1 pm every day. Not a good impression made as an intern.
This other kid was this pristine 'eat healthy' kid who never …

Busy Season'08

For those of you already in our wonderful profession, hope you have a fantastic busy season....and are excited for the coming months. Say goodbye to the Sun for now.
I'm not mentally geared for this busy season yet and I'm already on deadlines and such. So not completing any work is just not going to help me. Oh well, the work's going to get done eventually right. Or is that just the wrong attitude to carry going into Busy Season'08...guess I have to wait and watch or get on my arse and start plowing through stuff right now.