Tag Archives: Deloitte

As The Audit World Turns: Interview with Francine McKenna

Posted on by
Reply

Meet one of today’s leaders in the accounting profession, Francine McKenna, CPA. With more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad, Francine has a lot say. Through her speaking engagements, articles, her blog re: The Auditors, and more, Francine lays it on the line. Smart, engaging material…spectacular reading, I must say.

Q: Coming from a Big Four background, you’ve carved out a very interesting niche for yourself. Was this by design?
When I look at all my experience I see a straight line through the scatter diagram that’s led to writing and to writing about what I know the best and am most interested in the world of business. I can’t say it was by design but I don’t do anything by default. I just create as many options as possible. I started out at the end of ’06 thinking the blog would be the platform for a book. I haven’t yet written the book. But the blog took off, mostly because of what started happening in 2007 then 2008. The more I wrote about the business of the big four firms in a critical way, the less employable at what I was doing before I was. And the more attention I got for my writing the more I wanted to write. So I committed to write as well as I could and make it a success, at least professionally.

Q: Any insights on where the future of auditing is headed? Or the future of Big Four (or whatever number that’s going to be)?
I would agree with PCAOB Chairman Jim Doty’s latest comments: “The audit industry is flirting with stagnation.” I said on Twitter that the industry is worse. It’s whoring for quarters, selling audit as a commodity again, capitulating to executives to save the engagements and looking for consulting to save the day. We’ve come full circle in ten years since SOx.

Q: If a young professional told you he/she wanted to get into auditing, what would you tell them?
Go into consulting instead.

Q: What would you most like the accounting profession to know about what’s going on in Washington D.C.?
There are good people in Washington DC who want to serve the public. Fortunately for the audit industry they are few and far between. Most from both parties can be bought. Unfortunately, it’s going to cost lobbyists and the audit industry PACs more and more to buy them and politicians are fickle. You have to keep paying to maintain their attention and loyalty.

Q: What’s the most rewarding aspect of what you do on a daily basis?
When journalists I respect say I’ve written something with impact. When my parents say don’t stop because I’m finally using my talents.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
If I could go back in time I wouldn’t listen to anyone who said I had to wait to earn bigger pay and bonuses, to get my stripes first. I was doing the work well. I deserved to be rewarded for it long before I ever was.

Q: What’s in the future for Francine McKenna?
I just started in the Masters in Liberal Arts program at the University of Chicago. I want to teach. I’ve been visiting a lot of universities lately, talking with students and faculty. Before too much longer I’d like to fully live the life of the mind. And I will write a book, but it may be fiction.

Francine McKenna 1

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now.

iShade is THE accounting news source (keep it open on your computer every day).
http://www.ishade.com/newsfeed

Adding Onion to the Accounting Burger: The Tom Selling Interview

Posted on by
1

Ever read The Accounting Onion? It’s a great addition to our profession’s giant accounting sandwich. Find out more about its creator, Tom Selling PhD, CPA, in this delightful, informative interview. You’ll never think about an onion the same way.

Q: What would you most like the accounting profession to know about what’s going on in Washington D.C.?
Ever since the FASB and IASB have embarked on convergence, it seems that the SEC has disengaged itself from accounting standard setting. The result, I believe, is that standard-setting projects take forever; because there is no longer a credible threat that the SEC could preempt a stalled or misdirected process by issuing its own guidance. For example, it seems to me that bankers, and not the SEC, are effectively the clients for the proposed loan impairment standards. The bottom line is that I don’t think the SEC is doing its part to ensure that low-quality accounting standards will not play a role in any future financial crisis.

Q: How did The Accounting Onion come about?
I took early retirement from university teaching about seven years ago.  I have to say that the 25-year cumulative effect of petty politics from life as a faculty member was becoming unbearable; so I reluctantly left classroom teaching to focus on my consulting practice and a software company (www.grovesite.com) I had started with two other partners. I knew that a web presence would be essential for visibility and networking, and I had also discovered that search engines particularly favored blogs, ostensibly because of the relatively more current content that blogging generated — as opposed to static websites.   But, those practicalities aside, I think that blogging was also providing me with a source of stimulation that I missed by no longer being in academia on a day-to-day basis.

Q: I love how you describe The Accounting Onion with the line: “Peeling away financial reporting issues one layer at a time.” What motivates you to keep that garden growing?
I don’t know if “motivation” any longer describes what drives me to blog. It feels more an addiction! Seriously, I do miss the classroom, and I’m fortunate that blogging to inform my readers, and perchance to provoke decision-makers, has been a very fulfilling experience for me. You’re supposed to blog about what you know, and I was worried at first that I would run out of pet peeves to write about in fairly short order. But, even though my perspectives and philosophy on financial reporting have stayed relatively fixed, events like the financial crisis, international convergence and other regulatory developments continue to add to the complexity and uncertainty of the financial reporting environment. For me, as a blogger, it’s been like a gift that keeps on giving.

Q: The world of accounting has obviously changed dramatically during your lengthy career. What has surprised you in terms of what public accounting firms have done (or not done)–both positively and negatively?
The professional ethics rules emphasize that the “P” in CPA is paramount. Our government-granted franchise as gatekeepers to the public capital markets must be predicated on the principle that conscience, rather than the financial bottom line, will drive our actions as professionals— both individually and as firms. This, I believe, is the real “expectations gap.” Everybody knows to a certain extent that, even in ideal circumstances, audits and other assurance services are not panaceas. But, perhaps starting with the Enron debacle, the public is starting to realize that there is little to differentiate the motives and actions of the AICPA from other powerful and widely resented political lobbies. I have been a member of the AICPA for about 35 years, and this more than anything disappoints me.

On the bright side, though, I never cease to be amazed at the quality of reference resources that the international firms put out on the web for free. The Accounting Standards Codification by the FASB has largely been a very positive development; however sometimes it can make both new and old standards more difficult to read, in part because the topical organization of the Codification means that the main message of a standard is dispersed and no longer self-contained in one relatively readable document. Perhaps, the firms realize this shortcoming, and that’s one reason why they do such an excellent job of providing summaries, detailed explanations and examples. It seems like the firms compete with each other to have the highest quality free materials, and I am extremely grateful for that.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
That’s a difficult question for me to answer, because I’ve always enjoyed my work and have had a great life, in no small part due to my wonderful family. I really do consider myself extremely fortunate to be able to enjoy learning and working.  I suppose there are times when I could have been more diligent or humble enough to admit my ignorance and seek one-on-one support. I have come to realize that conventional education formats were not always the most suitable learning environment for me. I think that’s why I have a lot of empathy for students who don’t get the message the first time around, and it’s also why the emergence of new learning technologies excite me, and make me want to try them in a classroom setting.

Q: What’s in the future for Tom Selling?
I wasn’t kidding when I said that blogging had become an addiction! I’m not getting any younger though, and I would really like to transition from consulting to serving on audit committees of boards of public companies. I recently accepted a part-time position at SMU where I’ll be teaching accounting theory and M&A to both their graduate and undergraduate students. The prospect of going back into the classroom makes me as excited about my future as the day I realized that I had changed my last diaper.

Tom Selling

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now.

iShade is THE accounting news source (keep it open on your computer every day).
http://www.ishade.com/newsfeed

The Best Accounting Joke In The History of The World? Well, Maybe Not…

Posted on by
Reply

We’re almost to April 15. In that spirit, enjoy this fine accounting joke! Pass the link around to your co-workers, clients and referral sources.

A local bar was so sure that its bartender was the strongest man around that they offered a standing $1,000 bet. The bartender would squeeze a lemon until all the juice ran into a glass, and then give the lemon to a patron.

Anyone who could squeeze another drop of juice out would win the money. Many people tried, but no one could do it.

One day a scrawny little man came in, wearing thick glasses and a polyester suit. He said in a squeaky voice, “I’d like to try the bet.” After the laughter died down, the bartender grabbed a lemon and squeezed it. Then he handed the wrinkled remains of the rind to the little man who clenched it in his small fist.

Soon the crowd’s laughter turned to total silence as six drops of juice fell into the glass. As the crowd cheered, the bartender paid the $1,000 and asked the little man, “What do you do for a living?”  The little man replied with a winning smile, “I work for The IRS.”

Lemon Drink

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now.

iShade is THE accounting news source (keep it open on your computer every day).
http://www.ishade.com/newsfeed

The Foggy Crystal Ball of Early April

Posted on by
Reply

Every once in a blue moon a public accounting firm’s post-April 15 celebration party gets a little out of hand or it results in someone making a very bad error in judgment. Fortunately, that scenario doesn’t happen very often. When I worked at an accounting firm I think the most out-of-character thing that ever happened was someone having an extra beer or two (or far too much sausage and sauerkraut the one year we had the festivities at a German restaurant). What will the crystal ball see this year for the evening of April 15?

One of the latest trends in food marketing is to slap the word “protein” on the packaging, which apparently is driving such products to sell faster than vitamin-stoked hotcakes. I wonder what the crystal ball sees next in the food world? For instance, did anyone see this Greek yogurt wave coming? Fantastic yogurt, but it’s out of control, brother.

Of course, what we really care about is the next big trend in the accounting profession. What does the crystal ball see for the rest of this year and next year? So many people were banking on this being a huge M&A year in public accounting. Will that be how it plays out?

What do you think is behind the fog in that mystical future-telling window to the accounting world?

??????????

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now.

iShade is THE accounting news source (keep it open on your computer every day).
http://www.ishade.com/newsfeed

What’s On Your Highlight Reel?

Posted on by
Reply

As always, Accounting Today’s Top 100 Firms edition is so full of substance it’s like going to a meat ‘n cheese buffet. Strap on the feed bag. The section that grabs my interest first every year is the “Firm Highlights” summary. Each Top 100 firm has but a few lines to put their best foot forward touting their crowning achievements of the previous twelve months. Most of these firms display their broad strokes in this section with mentions of mergers, acquisitions and new service lines. For those firms declaring “had revenue growth of x-percent,” it leaves me thinking that nothing special happened with their firm and that they merely grabbed a few new clients and it was all business-as-usual. I suppose some years are like that, but I do wonder what’s below the surface of that “ten-percent growth” statement.

The following are some of the “firm highlights” that struck me:

*Moving to managing by service line
*Formed two new service areas: a specialty tax services group and a transaction advisory services group
*Expanded strategic planning task force to include “up and comers”
*Deepened industry expertise through hiring experienced staff
*Fastest growing client category – real estate
*Launched an online risk management tool
*Formalized wealth management practice

What is your firm or company doing in 2013 that will be worthy of the highlight reel this time next year? It had better be something more dynamic than:

*Moved to a new office building
*Had a hip deejay at the post-April 15 party
*Got a new coffee machine in the company kitchen

Coffee Pot_Old

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now.

iShade is THE accounting news source (keep it open on your computer every day).
http://www.ishade.com/newsfeed

Curator Comments RSS Feed:
http://blog.ishade.com/feed

Is the U.S. Headed Up the Mountain or Down the Mountain?

Posted on by
Reply

With all of this “fiscal cliff” talk, the U.S. trade deficit issue with China has been pushed to the side. Growing in October to a record $29.5 billion, this trade deficit cannot be ignored. Or can it? How important is it to the growth, prosperity and future of the United States? Economists can debate this topic all day long.

American companies simply can’t compete with cheap Chinese goods such as clothing and electronics; they must either lower their costs or go out of business. Obviously, many have been forced to do the latter in recent years.

China is now the largest lender to America. The Chinese people are a great society and a valued part of the world, but this indebtedness doesn’t feel right to me. While a “fiscal cliff” is our current mountain to climb, there’s a seemingly insurmountable Mount Everest waiting around the corner.

China

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now. iShade’s BulletIN is THE accounting news source…keep it open on your computer every day.
http://www.ishade.com/bulletin.php
Curator Comments RSS Feed:
http://blog.ishade.com/feed

Interview with a Michigan Man

Posted on by
1

During my long stretch of being immersed in the accounting profession, I’ve met so many great, smart, fun, interesting people. I now give you the privilege of “meeting” Joel Ungar, CPA, CFE. Joel’s a partner in the Detroit-area firm of Silberstein Ungar, PLLC. Joel is also an iShade Faculty Member. Enjoy.

Q: Your small firm seems a bit unique having a franchisor audit practice, doing SEC audits and also having a host of development-stage clients with no revenues. Was this by design?

A: The franchisor audit practice and the SEC audits–definitely by design. We are a niche-focused firm, and know what we do well. We have far more real-world franchising experience than most other CPA firms, so audits of franchisors is a natural for us, as we can and do add value to franchisors by having understanding franchising–not just by understanding how to audit a franchise. And, yes, that is an important distinction. While we do work with some pre-revenue development-stage, the bulk of our SEC audit practice is made up of entrepreneurial companies with opportunities for growth and revenues from $1 million-$200 million.

Q: With the public accounting firm sector being very active these days with mergers and acquisitions, does that tempt a firm like yours that is purposely trying to stay at a small and manageable size?

A: We have looked at merger opportunities but so far have passed. There’s a reason why we are who we are and why we are not a big firm, and we’re cognizant of those reasons. We enjoy the freedom and we don’t want to be bogged down with a lot of administrative functions or managing hundreds of people. That said, if an opportunity arose that would make sense for us, for our clients, and for our staff–well, we never say never.

Q: How does your firm recruit talent? What are the common characteristics in people who have been successful employees? 

A: We use a mix of advertising (Monster, LinkedIn) networking and talking with recruiters. Our successful employees: good personality, able to think on their feet, play well with others, willing to work hard, understand client deadlines, ability to travel, and they are able to accept responsibility in a fast-paced environment. The ability to “play well with others” is especially important–we spend a lot of time with each other, be it at our office, clients, and airports, and we work better when we get along well.

Q: What advice might you bestow upon today’s university accounting student or those accountants who are new to public accounting?

A: I remember sitting with a roommate just before I graduated from the University of Michigan and said to him “I can’t believe they let us do this for four years.” They should enjoy the experience! The obvious is to get the accounting knowledge. I like candidates to have good technology skills (still haven’t found one who knows more than me) and can write a coherent sentence. If their plan is to be in public accounting long-term, they should also develop skills essential to being a partner–networking and business development. I don’t think that is on the curriculum but it can make the difference. And even though I work in a small firm, I always tell students that if they get the opportunity to work with a Big 4 firm that they have to give it serious consideration. I was in Deloitte’s Detroit office for over six and a half years–21 years later it still pays dividends. I also wouldn’t suggest taking up winter sports. My partner Ron Silberstein’s advice: Marry rich. :)

Q: You’re obviously very happy doing what you’re doing, but if you had to be a completely different type of accountant, what might interest you?

A: I’ve been in both public accounting and in industry. I like the varied experience in public much more than what you get in industry. While I enjoy auditing, I also enjoy technology; I’d enjoy something that is based on emerging technology that requires use of my accounting knowledge and skills. Bonus would be if I didn’t have to lug a laptop through an airport–that day is coming.

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now. iShade’s BulletIN is THE accounting news source…keep it open on your computer every day.
http://www.ishade.com/bulletin.php

Curator Comments RSS Feed:
http://blog.ishade.com/feed

Press Release on the 250th Blog Post

What is National Meet the Firms Week?

Posted on by
Reply

How is the World Wide Web a bit like an English pub? Some say that both are “great equalizers.” In an English pub, CEOs sit next to ditch diggers hoisting pints, with neither party knowing what the other person does for a living–or caring what they do for a living. Two humans, two pints, a handshake, a conversation and it all works. On the Web, Sally’s Book Store that does $50,000 in annual revenue can look just as appealing as Barnes & Noble. The playing field begins to level…

Not all firms and university accounting students have the same capabilities when it comes to recruiting and job seeking. Clearly. Students at the University of Texas and firms such as Deloitte have an obvious edge in this regard than, say, a small rural university and a firm of eight people. What is helping to narrow that gap for firms and students? National Meet the Firms Week. Taking place October 29-November 2, it’s a very interesting creation—and exciting opportunity for all in the accounting profession.

CollegeFrog is the driving force behind this event. Speaking with James Hosman, Chief Operating Officer, he had this to say about National Meet the Firms Week:

1) How is today’s accounting position recruitment environment different from, say, five years ago?
Unfortunately for the industry, it has not changed much over the last fifty years, much less five years!  For years, accounting students and firms have used the same process, which is to attend two or three on-campus Meet The Firms events and recruit exclusively from those students. A firm typically limits itself to the students it meets at these two or three events it attends. National Meet the Firms Week provides an online platform for students to meet firms from across the state and country. Students also will have access to valuable career advice from industry leaders through webinars every day. Firms will be able to recruit from schools that they may not have had the ability to visit due to time or budgetary restraints. The industry is rapidly moving to more efficient and effective ways to find talent, like online recruiting. The viral growth of this event is an example of this trend.

2) What excites you most about NMTFW?
The fact that any firm or student can participate. Firms and students are not limited to schools within their geographic area. Firms tell us all the time that they want to be able to recruit the best talent available, including if a student grew up nearby but went away from school. A firm has no way to find this “hometown” student today.

3) Students have many opportunities to connect with firms—what is unique
about NMTFW?
National Meet the Firms Week is more efficient and effective than conventional methods. A student can submit his or her resume, transcript, extracurricular activities, awards, honors and work experience without leaving the comfort of a home, dorm room or office. It also allows the student to make an impression on significantly more firms than with the conventional methods.

4) What advice would you give to today’s university accounting majors?
Explore all your options before you accept a position with an accounting firm. You may find that the firm you ultimately accept a job with is just around the corner in your college town but give yourself the opportunity to explore firms that you have not heard of. There are a wide variety of firm cultures, firm sizes and areas of expertise that may be able to offer you customized work experience. One of the webinars we are having during Meet The Firms Week is a career path session. Students will learn about all careers available with an accounting degree, whether it’s with a firm, inside the industry, or in a different niche.

5) Will NMTFW help level the playing field for smaller firms—or for those
firms that don’t have access to a host of universities?
Absolutely.  Leveling the playing field is one of the goals. There are a lot of great firms in the United States that students don’t know about because 98% of firms are not able to attend more than 2 or 3 on-campus events. Also, many firms are overshadowed by the largest firms or they don’t have marketing budgets to advertise on a local, regional or national level. Firms of all sizes are excited about the event because at the end of the day, they can cast their net much further online than they can in person.

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now. iShade’s BulletIN is THE accounting news source…keep it open on your computer every day.
http://www.ishade.com/bulletin.php
Curator Comments RSS Feed:
http://blog.ishade.com/feed

Green Bay Packers Fans, Meet the Ex-Enron Employees

Posted on by
Reply

Seeing the highlights (or lowlights) this morning of last night’s NFL game brought to mind the troubles that have occurred over the last decade or so regarding corporate fraud. If you don’t follow NFL football, or are not aware of what happened at the end of last night’s game, here’s a summary:

*The NFL is using “replacement” officials due to the lack of a new collective bargaining agreement
*The Seahawks won the game with a very questionable call (click on the Packers helmet for the video)

Granted, one NFL game isn’t at all on the same playing field as the collapse of Enron, which led to thousands of employees losing their life savings in 401(k) plans tied to the energy company’s stock. Nor is it on the same planet with the accounting scandals of WorldCom, Tyco, Qwest, Bristol-Myers Squibb or Lehman Brothers. What it does have in common, though, is that the right controls were not in place. Bringing back the properly trained and experienced referees is the Sarbanes-Oxley Act that the National Football League needs right now.

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now. iShade’s BulletIN is THE accounting news source…keep it open on your computer every day.
http://www.ishade.com/bulletin.php
Curator Comments RSS Feed:
http://blog.ishade.com/feed

How Many Billionaires?

Posted on by
1

There are an estimated 1,226 billionaires worldwide. Many of them have bad hair.

Ten states can claim primary residences for 72 percent of America’s billionaires. I wonder how many homes each of them has, though.

Billionaires pay the salaries of a lot of accountants. The more accountants employed, the better, I say.

*****
As a reader of this blog, hopefully, you are also a member of iShade. If you’re not, sign up right now. iShade’s BulletIN is THE accounting news source…keep it open on your computer every day.
http://www.ishade.com/bulletin.php
Curator Comments RSS Feed:
http://blog.ishade.com/feed