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Showing posts from February, 2008

"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 2...now 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…

managing

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 down..so 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…