Footnotes: Jim Turley Gets His Gay Wish; Tax Cheats Under the Microscope; Some Feel Good For Troops From Ohio | 01.28.13
Boy Scouts close to ending ban on gay members, leaders [NBC]
Bank of England is wrong on accounting rules, says Sir David Tweedie [The Telegraph]
The Deloitte Foundation Announces Recipients of the 2013 Doctoral Fellowships in Accounting [PR Newswire]
Davos message clear, says KPMG chief [The Australian]
IRS to Seek Details From UBS on Possible U.S. Tax Evaders [Fox Business]
Small Business Owners: The IRS Says You Are Tax Cheats [Small Business Trends]
Ohio CPAs to prepare tax returns free of charge for deployed troops [CPA Practice Advisor]
According to This Dude Who May Have Helped Screw It Up, CliftonLarsonAllen Totally Screwed Up on the Dixon Audit
Meanwhile, back at the horse ranch:
Sam Card says that CliftonLarsonAllen continued to do an audit for the city, despite guidelines that said they should not.
In an October deposition statement, Card said that he and his mother’s small Sterling accounting office, which became Dixon’s contracted auditor after 2005, did not do its own audit work. It only reviewed and signed off on audit work done by Clifton, which allowed one of the nation’s largest firms to keep its account.
Clifton denies Card’s claim.
If Card’s claim is true, a Northern Illinois University legal expert said, both firms’ licenses are in jeopardy.
Card was one of five persons who were interviewed by the city’s attorney, Devon Bruce, in connection with Dixon’s lawsuit against the firms that audited the city’s finances.
This is pretty big. Mainly because this amounts to Sam Card throwing CliftonLarsonAllen (fka Clifton Gunderson) under the bus for their alleged sloppy work, which may or may not have been his sloppy work too.
[Karl] Appelquist [of Clifton] told the Cards that Clifton’s staff would do the work papers and give them to the Cards for a review and signature, according to Card’s deposition. Card said he had not heard of any other such circumstance, where one firm would sign off on another firm’s work, in his 20 years as an accountant, yet he and his mother agreed to it. He said there is no documentation of that agreement.
Asked why Clifton would offer such a plan, Card said: “In my opinion they did not want to lose the client. ... If they would have hired, say, a larger firm, the larger firm would have ... could have come in and taken over some of the duties that Clifton was doing. Doing the audits. So they would ... Clifton would have lost control of the audit and lost that revenue stream.”
A GC reader wants to know:
is there a point in joining the calcpa?
I believe we've answered this before but it's a slow week already so why not revisit?
It depends on where you are in your career but state society membership can be beneficial for a number of reasons, especially if someone else is paying for it.
First, you might get discounts on CPA review materials. This is especially beneficial for student members, who usually pay no fee or a small fee for membership.
Second, you should be able to get some networking opportunities from membership. Whether it's mentoring or career opportunities or just keeping up with the latest and greatest in your profession from a local standpoint, state society membership is an easy way to stay plugged in.
Third, you may just find a way to give back or something outside of slaving away for partners that gives you some fulfillment. For some, that's tackling legislative issues that impact CPAs on a state level. For others, that's giving back to the community. Your state society of CPAs can be a great resource for these opportunities, so if you're at all interested in putting your skills to good use, maybe it's worth it.
But if you're the type interested more in collecting a paycheck than exercising your abilities and giving back, why bother?
Of course, the highlight of CalCPA membership as I remember from reading my CPA boss's newsletters was checking out the California CPAs shamed for various offenses in the back of every issue. You know: fraud, scams, bad tax returns, etc. That right there made his membership worth it for me but I wasn't the one paying for it every year.
Is there a point to anything in this profession? Behave accordingly.
Hahahahaha. No, of course not. HOWEVER, Moss Adams is getting close to usurping one of the Big 4 in number of CalCPA members and that may give some people the impression that a regional firm is making waves in California.
A reader sent us the following:According to CalCPA and some number crunching, as of 1/1/13, Moss Adams LLP should have more (registered) professionals than KPMG in the State of California. In the July 2012 top 50 California CPA firm rankings by CalCPA, KPMG and Moss Adams LLP had 388 and 348 registered professionals, respectively. But, as of 1/1/13, Moss Adams LLP merged with Mohler Nixon & Willams, which had 53 registered professionals according to CalCPA. That gives Moss Adams LLP a total of 401 (or close to) CA registered professionals as of 1/1/13. In their next ranking, we may see KPMG be listed at #5. Well, not quite. If you look at the July 2012 edition of CalCPA news, those numbers don't quite shake out as our reader says. Here's a clip of KPMG and MA: So (s)he was off by two members but managed to get to 401 somehow (which is correct with MNW's 53 CalCPA members). NBD. Moss would still move past KPMG. But really, this isn't anything of note. For starters, KPMG probably has a large number of advisory professionals that are not CalCPA members. Between their seven California offices, it's conceivable that the House of Klynveld may have more non-CPA client serving employees than Moss' entire California payroll. Secondly, this was from July, so it won't include any of the first-year associates that started in the fall or any experienced hires for the last six months of 2012. It's likely that KPMG had great numbers in both these groups, thus more CPAs and more CalCPA members. We asked the CalCPA for the numbers as of 12/31/12, however, we have not heard back. Neither Moss Adams or KPMG responded to our requests for their CalCPA membership numbers. To see a regional firm compete with the Big 4 firm is not that odd of an occurrence. Here in Denver, Ehrhardt Keefe Steiner & Hottman is a similar example. They are locally-owned firm with a big presence in the Rocky Mountain region; they employ a few hundred people and have no problem regulaarly picking off a clients from the Big 4. But they still don't have the resources or clout that a Big 4 enjoys (right or wrong). EKS&H won't be picking up the next exploding VC-backed company in Boulder any more than MA will grabbing the next one in Silicon Valley. If they do, it's only a matter of time before that company's investment bankers convince them that they need to upgrade to a Big 4 audit to satisfy deep-pocketed investors. It's a nice sign to see a firm MA doing so well, but it doesn't matter if they jump KPMG in CalCPA membership. It doesn't change the name on the sign. Or their status as a Big or Global or whatever.
The New York Times reports that both Ernst & Young and Deloitte are among the firms that trust its own people to find the best and brightest experienced hires because it "[saves] time and money" even though "[lengthens] the odds for job seekers without connections, especially among the long-term unemployed."That's a bit of a strange statement since Deloitte and E&Y are looking to hire people that have the skills that prevent them from being part of the long-term unemployed. E&Y is bringing on four thousand experienced hires this year remember? They want people who their current employees know because they met at school or another job. They are far less interested in the guy who put up the drywall at one of their partner's new homes, even if those guys have been buddies for 20 years. Regardless of this misfire by the Times, it is interesting to learn that the refer a friend programs at the firms is becoming such a big part of the firms' recruiting process: Some [companies], like Ernst & Young, the accounting firm, have set ambitious internal goals to increase the proportion of hirings that come from internal referrals. As a result, employee recommendations now account for 45 percent of nonentry-level placements at the firm, up from 28 percent in 2010. And, yes, they're greasing you a little: Others [companies], such as Deloitte and Enterprise Rent-A-Car, have begun offering prizes like iPads and large-screen TVs in addition to traditional cash incentives for employees who refer new hires. So if want a shiny new toy, pass along a friend's résumé. Just as long as they aren't a street performance artist. In Hiring, a Friend in Need Is a Prospect, Indeed [NYT]
Accounting News Roundup: Barry Salzberg's Alter Ego; Caterpillar Still Digging; IRS Impatient with O.J. | 01.28.13
Interview: Deloitte deputy chief executive Brian Derksen [FT]
It was in Durham, North Carolina, that Derksen made the rather startling leap from ice hockey to accounting, via an MBA from Duke University’s Fuqua School of Business. Now, amid the sombre grey tones of his New York office, Derksen, 61, is every inch the polished corporate executive. As deputy chief executive of DTTL, the parent company of an array of Deloitte-branded audit, consulting, advisory and tax subsidiaries, he has to be. “There are a lot of things which require a CEO’s attention but he [Barry Salzberg] can’t get to it. I operate sort of as his alter ego,” explains Derksen.
Caterpillar Still Investigating Chinese Accounting Discrepancy [BBW]
“We are not done,” the company said. “We are putting in more effort to finish our investigation as we consider all our options to recover our losses and hold those responsible accountable for their wrongdoing.”
Emory Williams 'Shocked' by Caterpillar Allegations [WSJ]
The former chairman of a Chinese machinery maker acquired by Caterpillar Inc. CAT +2.36% said he was "shocked" by the U.S. company's allegations that accounting misconduct took place before the deal closed. Emory Williams, the former chairman of ERA Mining Machinery Ltd., said in a statement on Monday that he was surprised by Caterpillar's decision to write down the roughly $700 million it paid in June for ERA by $580 million. ERA's main business was a mining equipment maker named Zhengzhou Siwei. "We were especially surprised by this situation as we cooperated very closely with the Caterpillar team during their extensive due diligence," Mr. Williams said, in the first public statement since the Peoria, Ill., machinery maker said Jan. 19 that it had found "deliberate, multiyear, coordinated accounting misconduct" at Siwei.
Not-So-Happy Anniversary, XBRL [CFO]
Four years after the Securities and Exchange Commission mandate, it turns out that not many people are using data provided by XBRL tagging. And those who have tried are not giving it rave reviews. IRS to O.J. Simpson: Seriously, You Need To Pay Your Taxes!!! [TMZ] According to a federal lien filed in December, O.J. failed to cough up $17,015.99 in taxes for the year 2011. This makes for the THIRD lien filed against him in the last 12 months. As TMZ first reported, Uncle Sam filed a lien for $179,435.07 for the years 2007-2010 and the State of California says he still owes $318,566.04 for the year 2000. Tax debt total = $515,017.10. The Right Way to Give Your Boss Bad News [HBR]
Since this may happen at some point.