Monday, December 25, 2006

PricewaterhouseCoopers in Hot Russian Tea

Following the two billion dollar suit from Fannie Mae against KPMG, we now hear that the Russian tax authorities are filing a suit against the local PricewaterhouseCoopers firm. The accusation: creating a "false audit" for Russian oil giant Yukos.

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Tuesday, December 12, 2006

Fannie Mae Sues KPMG for $2 Billion! Alleges Abysmal Auditing

Fannie Mae (NYSE: FNM) is suing KMPG LLP for $2 billion today, indicating that it was negligent in playing its role as an independent “watchdog” and preventing billions of dollars of accounting errors. The firm is being sued for 17 counts of negligence and breach of contract in a suit filed in DC, Fannie apparently had $2 billion in damages and $1 billion in costs to restate earnings. Fannie had fired KPMG in December 2004.


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Sunday, December 10, 2006

Deloitte Pays $210 million to Settle Adelphia Case: 45% of Total Sum

Deloitte & Touche LLP will end up ponying up $210 million as part of a larger $455 million amount along with a number of banks, including Bank of America, Citigroup, JPMorgan Chase, Wachovia and 35 others, which have agreed to pay to settle an investor lawsuit in the Rigas family-run bankrupt cable company, Adelphia Communications Corporation...

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Saturday, December 09, 2006

Big Four Results: - Huge Size and Interesting Surprises

All the Big Four firms (Deloitte and Touche LLP, Ernst and Young LLP, KPMG LLP and PricewaterhouseCoopers LLP) recently reported their 2006 financial results, which we have compiled for a very interesting analysis.


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Tuesday, December 05, 2006

PCAOB 2006 Report on Deloitte - Issues and Disagreements Too

PCAOB recently released its 2006 report on Deloitte and Touche LLP based on its inspection in 2005 and complying with Sarbox Act. The Board identified 17 unnamed public companies (Issuer A to Issuer Q) where it identified a variety of audit deficiencies, ranging from revenue recognition, inventory control, debt covenants, cash flow statement preparation, allowance for loan losses etc...


Friday, December 01, 2006

KPMG Revenue Up 10%, BRIC on Fire!

KPMG LLP just reported its 2006 strong annual results in line with other Big Four firms. 2006 revenues of US$16.9 billion grew 7.6% from US$15.7 billion in 2005 (KPMG LLP's fiscal year ends in September 30, 2006). In local currency terms, revenue growth was 9.6%, indicating that the falling dollar reduced revenue growth by 2%...


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Sunday, November 26, 2006

BearingPoint Does File 10-K, Huge Losses in 2005, but 2006 Looking Up

It looks like BearingPoint, Inc. (NYSE: BE) did file its 2005 Form 10-K at 5:42 pm on Wednesday, November 22nd, one day before Thanksgiving and upholding its promised deadline. Here are some highlights...


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Wednesday, November 22, 2006

Deloitte Gets A Reprieve in Parmalat Case

And in another ruling by Judge Kaplan…he has adjourned a damages case filed by Italian dairy firm Parmalat against its former bankers and auditors to December 31, 2006 to see if the parties can work out a settlement. This trial was set for middle of 2007, but if all parties could workout something, then the trial itself could be avoided....

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Where is BearingPoint’s (NYSE: BE) 10K?

Just a few week ago BearingPoint, Inc. (NYSE:BE)’s CEO, Mr. Harry You, had set a date by which the fully-vetted 2005 10-K would be released: Thanksgiving November 2006. On November 3, 2006, Harry You, the Company's Chief Executive Officer, said "We appreciate the continuing support of our shareholders, banks, surety providers, clients and employees in standing by us as we worked through this process....


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KPMG Tax Case: Another Twist

The KPMG tax trial has had its share of twists and turns, and here is one more:

With trial originally set for January 2007, we now hear that Judge Kaplan has indefinitely postponed the criminal tax fraud trial. As we have said, 16 former KPMG partners are setting off against KPMG, and now the dispute has turned to who would bear their (assumedly large) legal costs. The Judge wants the fee matter settled before trial, the legal bills could be quite enormous and individuals may be unable to pay without KPMG’s assistance....


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Monday, November 20, 2006

Deloitte and Touche, Ernst and Young Alumni Make Career Splashes

Big4 alumni go places after they leave any of the big four firms.

Here is a quick sampling of recently reported alumni career tracks for Deloitte and Touche LLP and Ernst and Young LLP which we have collected from a number of public sources...


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Tuesday, November 14, 2006

CapGemini First Half 2006 Results: Strong Performance, Confident Outlook


Capgemini Group recently reported detailed results for the first half year 2006. Revenues for the first half 2006 increased to EUR 3, 784 million, up 9.0% from EUR 3,472 in the first half of 2005.....


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Monday, November 13, 2006

KPMG LLP's Private Equity Group - Serving A Huge Market

KPMG LLP will be forming a U.S. Private Equity Group as a dedicated practice to pull together all their top partners to assist the larger Private Equity funds with Donald C. Spitzer as national managing partner -- private equity.

"Formation of the U.S. Private Equity Group brings together KPMG's most experienced private-equity partners and our superior processes into a single, integrated unit," said Spitzer, noting that every member of the Group already provides customized services to the world's largest funds. He added that private-equity funds grew from more than $20 billion in 1996 to more than $200 billion in 2006.

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Sunday, November 12, 2006

SEC and PCAOB meet on Sarbox: The Plot Thickens

The Washington Post is reporting that SEC Chairman Christopher Cox and Mark W. Olson, chairman of the Public Company Accounting Oversight Board, met today to discuss their ideas on Sarbanes-Oxley in preparation for the PCAOB public hearings set for December 13th, 2006...


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Friday, November 10, 2006

PCAOB Behind the Curve on Big Four Audits

Big Four News on Wall Street Journal Front Page

Today’s WSJ carries two substantive articles on Sarbanes Oxley and PCAOB / Big Four Firms. It is the very first item on the What’s News front page column, indicating the extraordinary importance of these topics to investors and the business community at large. We are pleased to see that the issues we write about in our blog are critical, timely and central to business and capital markets...

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What We Blog About - Now on Wall Street Journal First Page

Today's WSJ carries two substantive articles on Sarbanes Oxley and PCAOB / Big Four Firms. It is the very first item on the What's News front page column, indicating the extraordinary importance of these topics to investors and the business community at large. We are pleased to see that the issues we write about in our blog are critical, timely and central to business and capital markets...



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Thursday, November 09, 2006

Auditors' Tax Advice Shelf Life Extended 6 Months

Peekaboo is giving a sop to accounting firms it appears!

Rule 3523 or "Tax Services for Persons in Financial Reporting Oversight Roles" was adopted on July 26, 2005 and approved by the SEC on April 19, 2006. This rule prohibits auditors from providing any tax services to persons in a financial reporting oversight role at an audit client during the "audit and professional engagement period". As it is likely that the audit firm was providing tax services before it became an auditor, the PCAOB wants to revisit the language vis a vis to only the "audit period". While it thinks through this change, the rule 3523's application has been now delayed to April 30, 2007 from October 30, 2006, thus giving audit firms an additional six months to comply with the rule

Wednesday, November 08, 2006

A Brave New World: Banish the Static, Welcome the Dynamic

A Brave New World!

That’s what the Big Four Accounting Firms want now! PricewaterhouseCoopers, KPMG, Deloitte & Touche, Ernst & Young, BDO Seidman and Grant Thornton have recently released a joint report.

Together, they are now calling for a complete overhaul and rethink of the way companies are reporting their financial performance to investors...

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Monday, November 06, 2006

PricewaterhouseCoopers Goes for Growth in China


PricewaterhouseCoopers LLP’s Chief Executive Samuel DiPiazza, Jr. has big plans in China, which he believes could become PwC’s second most important market after the US in the next 10 to 15 years. PwC (PricewaterhouseCoopers LLP) plans to invest between US$50 to US$100 million in China in the near future to maintain its lead and grow along with the booming economy, which is over and above the US$200 million invested in the past...


Saturday, November 04, 2006

Giving Thanks: BearingPoint Reaches Agreement with Bondholders



BearingPoint, Inc. (NYSE: BE) reached agreement with its bondholders to provide higher interest rates in exchange for change in terms and the chance to resolve potential default. We reported earlier that a New York state court has found BE (NYSE: BE) in bond default since it had failed to file its 2005 10-K. In this agreement, bond holders waive the filing requirement but get higher bond interest rates, drop their lawsuit and relax their covenants. BearingPoint also got some timing waivers on filing its 10K and 10Q documents...




Thursday, November 02, 2006

Auditors Want Blanket Protection: A Tall Order in Current Circumstances

What is the flip side of terrific growth at the Big Four firms? Risk management!
We understand that Big Four firms want to keep the gravy train rolling by avoiding a disaster that hit Andersen a few years ago and led to its dramatic collapse. The method: seek legislation or other guarantees to protect from financially disastrous consequences of an investor or company law suit...


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Wednesday, November 01, 2006

PwC Reports 9% Growth in Line with Other Big4...Good Times for All

PricewaterhouseCoopers LLP just announced that its global revenues rose 9% in fiscal 2006 from $20 billion to $22 billion, and 11% in US dollar terms. Advisory and tax businesses, grew at 18% and 11% in US$, while Assurance grew 6%. Sarbanes-Oxley implementation and adoption of International Financial Reporting Standards were flat...


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Now, a Graduate Program to Launch Careers into the Big Four

Vanderbilt’s Owen Graduate School of Management in Nashville, TN will soon be offering a Master’s degree in accountancy to train graduates and help them specifically enter the Big Four. This appears to be the first program of its kind aimed at careers in the top five global accounting firms – Deloitte & Touche, Ernst & Young, Grant Thornton, KPMG and PricewaterhouseCoopers...


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Saturday, October 28, 2006

Sarbox Pendulum Starts to Swing the Other Way, Just a Little


Mark Olson, Chairman of the Public Company Accounting Oversight Board (Peekabo) recently made a speech where he laid out four key principles to reduce the burden of Sarbanes Oxley on US public companies...





Thursday, October 26, 2006

Cap Gemini SA (EPA:CAP) PreAnnounces Q3-2006, Buys KanBay


Cap gemini SA (EPA:CAP) announced today that its Q3-2006 revenues of 1.881 billion Euros grew 13.5% over the same quarter last year Q3-2005 (1.674 billion), but 1.9% lower than the previous quarter Q2-2006 (1.915 billion Euros)...




Andersen's Nemesis, Jeff Skilling is Served Due Justice


The wheels of justice grind slowly, but they meted out a just sentence on Jeff Skilling, the former Enron CEO, one of the few people responsible for Andersen's dramatic collapse and foreever changing the accounting firm landscape by reducing the Big 5 to the Big 4... 





Tuesday, October 17, 2006

Grant Thornton Revenue Up 22%, Double the Big4 Rate


Grant Thornton LLP (GT), the U.S. member firm of Grant Thornton International, says that its US revenues climbed 22% from $726 million to $886 million in the fiscal year ending July 31, 2006. This follows a 29% increase from $562 million in 2004 to $726 million in 2005...




Deloitte and Touche LLP Revenue Up 12.5% in 2006

Following strong results from Ernst and Young LLP, Deloitte and Touche LLP also announced solid performance with growth across services, sectors and practices.

Deloitte Touche Tohmatsu Worldwide Member Firms recently reported US$20 billion aggregate member firm revenues for fiscal year 2006, up 11.5% from 2005...



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New Accounting Networks: Can They Compete with the Big4?

Baker Tilly USA
If you have never heard of this firm, it may begin to crop up shortly in US corporate circles. Baker Tilly is one of the top 10 accounting firms in the UK, and now making news by creating Baker Tilly USA with a new business model...


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Monday, October 16, 2006

How do the Big 4 Firms Rank in the Fortune 500?


Accenture (NYSE: ACN) came out 379th in the recent international Fortune 500 2006 ranking. In 2005, Accenture just made the cut with a rank of 455 out of 500.

Accenture's (NYSE: ACN) revenue of $17.1 billion and profit of $940 million makes it rank 3rd in the Computer Services and Software industry behind Microsoft and Electronic Data Systems...

Andersen Alum Moves to Top of UnitedHealth Group, Inc. (NYSE: UNH)


The options scandal has made astonishing inroads into Corporate America affecting tons of executives and toppling CEOs. Companies which have backdated options to benefit senior managers have become investor targets, subject to SEC investigations and generally become poster childs for how hidden white collar crime is rampant in public corporations...



Wednesday, October 11, 2006

Should BearingPoint Remain Public?


Credit ratings agency Moody's recently downgraded Bearing Point (NYSE: BE)'s ratings from B1 to B2, and put them on watch for further potential downgrade. The agency took note of

the firm's year-to-date cash outflows, due to finance and accounting systems costs and of course the inordinate delays in filing its 10-K and last but not least the huge employee turnover seen in Q2 -2006. These ratings are considered speculative...


Friday, October 06, 2006

KPMG Europe LLC: New Entity for a New Pan European Landscape


The European Commission’s Eighth Directive legislation (the EU's effort to increase investor confidence, like the US Sarbox) , which allows cross-country ownerships in accountancy firms had its first impact today. KPMG becomes the first to take advantage among firms representing global accounting networks...



Thursday, October 05, 2006

Ernst & Young LLP Financial Results: Strong Growth in Emerging Economies

Ernst & Young LLP recently released its 2005/2006 fiscal year results (year ending June 30, 2006) worldwide revenues rose 10% in local currency terms to a total of $18.4 billion. E&Y is the first among the private accounting firms to report results, and it does appear that times remain good and growth is rampant in areas outside North America and Western Europe. We will look for other accounting firms to report in the next few months and watch how they differ from these results...
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Wednesday, October 04, 2006

China Aims for Big Ten in Ten Years


We hear that the Chinese finance ministry wants to develop at least 10 full-fledged accountancy firms in the next ten years. The policy: “bigger, stronger, self-reliant”. The goal: be capable of providing comprehensive audit services of world standards in order to reduce reliance on foreign firms, especially the Big 4. These 10 firms would be able to operate internationally and support local Chinese companies which plan to internationalize. Further, 100 medium-size firms would concentrate on the domestic market…..current firms are actively encouraged to merge to create economies of scale...



Friday, September 29, 2006

Cap Gemini S A Now Has to Deliver for Stock Performance

Cap Gemini's stock moved up strongly from Euro 30 per share in November 2005 to the 45 in mid-2006 but then has been stuck in neutral mode. What gives?...

Business is good, according to the company and the general feeling among equity analysts. IT spending remains high for the most part. Cap Gemini SA's senior management painted a good upbeat picture in their recent US roadshow. The biggest issue is the margin as percentage of sales, which they are aggressively pitching, though this does seem realizable, given their increasing use of offshore resources, higher consulting rates all across the board, and better management of cost and personnel...

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Thursday, September 28, 2006

Accenture (NYSE:ACN)'s Health Improves as it Drops NHS Contract

Today’s news….Accenture (NYSE: ACN) walks away from its problem-plagued National Health Service Contract in the UK which it had secured in 2003. And it falls upon Computer Sciences Corporation (NYSE: CSC) to carry the ball for nine years. The agreement is worth close to $3.73 billion (GBP 1.97 billion). The work is to build a patient record IT system in the northeast and east of England, and is running behind schedule...



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KPMG Judge Wants to Know Who Leaked....

Judge Lewis Kaplan….tough and sometimes unpredictable….now demands to know who leaked an internal IRS email to the press. He is going deep, requiring affidavits from everyone involved in the case

Whodunit? Prosecution or Defense? And to what purpose. The document was apparently read over the phone to the New York Times who printed the story. The judge thinks this violates a protective order he issued in the case. The email is about tax shelters that KPMG promoted to wealthy clients...

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Wednesday, September 27, 2006

BearingPoint Delays 10-K, BE Shares Bearing Down

BearingPoint (NYSE: BE) reported last night that it will now delay filing its 2005 10-K after the State Supreme Court for New York County found that BE is in default on its 2.75% series B convertible subordinated debentures due 2024...


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Sunday, September 24, 2006

Peekaboo Regulators Creep Over The Pond


We hear that The Public Company Accounting Oversight Board (PCAOB or Peekaboo) has started to visit US-headquartered audit firms in London, UK, specifically BDO and Ernst and Young LLP to carry out inspections under Sarbanes-Oxley. Sarbox specifies that US regulators have to report every year on foreign audit firms which have more than 100 clients with U.S. listings. Further a report every three years is needed for those with less than 100 U.S.-listed clients...


Saturday, September 23, 2006

BearingPoint, Nothing Official, IT Expert from Down Under Blogs On


Some months ago, we looked at who is blogging from inside at the Big Four firms. Our survey indicated blogs at Accenture (NYSE: ACN), Cap Gemini SA, PricewaterhouseCoopers LLP, Deloitte & Touche LLP, and one by KPMG LLP's Chairman. At that time, we noticed the lack of publicly-oriented blogs at BearingPoint (NYSE: BE), Ernst & Young LLP . We checked again on the same topic for any changes in status, and here is what we found. Status Quo for the most part. Some blogs have definitely added more content and authors, and the Deloitte LLP and CapGemini SA in particular have regular postings from committed bloggers...




Thursday, September 21, 2006

Deloitte WINs with Honest, Engaging Blogs


Some months ago, we looked at who is blogging from inside at the Big Four firms. Our survey indicated blogs at Accenture (NYSE: ACN), Cap Gemini SA, PricewaterhouseCoopers LLP, Deloitte & Touche LLP, and one by KPMG LLP's Chairman. At that time, we noticed the lack of publicly-oriented blogs at BearingPoint (NYSE: BE), Ernst & Young LLP . We checked again on the same topic for any changes in status, and here is what we found. Status Quo for the most part. Some blogs have definitely added more content and authors, and the Deloitte LLP and CapGemini SA in particular have regular postings from committed bloggers. Recently, it has been brought to our attention that there is a BearingPoint blog in Australia, which we shall check out....




Wednesday, September 20, 2006

CapGemini Key CTOs Blog on Technology / People Intersections


Some months ago, we looked at who is blogging from inside at the Big Four firms. Our survey indicated blogs at Accenture (NYSE: ACN), Cap Gemini SA, PricewaterhouseCoopers LLP, Deloitte & Touche LLP, and one by KPMG LLP's Chairman. At that time, we noticed the lack of publicly-oriented blogs at BearingPoint (NYSE: BE), Ernst & Young LLP . We checked again on the same topic for any changes in status, and here is what we found. Status Quo for the most part. Some blogs have definitely added more content and authors, and the Deloitte and CapGemini in particular have regular postings from committed bloggers...


Accenture Blogs are Most Diverse, Development Program Blog Worth Reading

Some months ago, we looked at who is blogging from inside at the Big Four firms. Our survey indicated blogs at Accenture (NYSE: ACN), Capgemini, PricewaterhouseCoopers LLP, Deloitte & Touche LLP, and one by KPMG LLP's Chairman. At that time, we noticed the lack of publicly-oriented blogs at BearingPoint (NYSE: BE), Ernst & Young LLP . We checked again on the same topic for any changes in status, and here is what we found. Status Quo for the most part. Some blogs have definitely added more content and authors, and the Deloitte and CapGemini in particular have regular postings from committed bloggers.Today we look at Accenture, with others to follow....   



Tuesday, September 19, 2006

PwC People Blog On, Humanizing the Organization


Some months ago, we looked at who is blogging from inside at the Big Four firms. Our survey indicated blogs at Accenture (NYSE: ACN), Capgemini, PricewaterhouseCoopers LLP, Deloitte & Touche LLP, and one by KPMG LLP's Chairman. At that time, we noticed the lack of publicly-oriented blogs at BearingPoint (NYSE: BE), Ernst & Young LLP . We checked again on the same topic for any changes in status, and here is what we found. Status Quo for the most part. Some blogs have definitely added more content and authors, and the Deloitte and CapGemini in particular have regular postings from committed bloggers...



Sunday, September 17, 2006

BearingPoint: 10K Had Better Come Shortly!


So when is BearingPoint, Inc.'s (NYSE: BE) 2005 10K coming?


There is talk that this will now be coming in the next two weeks, provided of course, that BearingPoint, Inc. does not get to postponing it yet again. BearingPoint, Inc. has scheduled an investors' meeting on December 11th, 2006, so the 10K needs to come out soon, to give people enough time to get ready. The company came out in April 2006 with Q1-2006 results, and then...radio silence, as it skipped the business outlook presentation of July 2006. 10Q results for 2005 should come out in October 2006. When the 10 K comes out, BE (NYSE: BE) is expected to provide outlook on the business and financial results?...






Accenture Goes Dutch: Will Former Partners Bite?


Accenture (NYSE: ACN) recently announced it will be conducting a Dutch tender auction for $650 million with an option to cover for any over subscription of $773 million. This translates to 26.3 million shares or 30.9 million with includes over-subscription...









Thursday, September 07, 2006

KPMG May to Have Foot Legal Bills for Ex Employees


In the ongoing saga of the government' s case against ex KPMG employees on improper tax shelters, a new twist emerged yesterday with Judge Kaplan refusing to dismiss a lawsuit that the firm pay for legal charges for 16 former employees...





Big4 Great Places to Launch Careers


Business Week magazine just came out with their inaugural list of "Best Places to Launch a Career", and it validates something that all Big Four alumni know - starting at the right place makes all the difference. Big Four firms take 4 of the top 20 spots and 5 of the top 50 spots...











Saturday, July 08, 2006

KPMG Wins Key Valuation of Airbus Stake


It appears that KPMG has won a surprise high profile valuation engagement for valuing BAE System's 20% stake in Airbus. BAE will be exercising its put option to sell its share to the 80% holder EADS, which would make EADS the sole shareowner of Airbus...


Tuesday, July 04, 2006

CapGemini Tells You More About the Uber-Rich


CapGemini and Merrill Lynch recently released their 10th annual World Wealth report with some astounding numbers. In 2005, there were 8.7 million high net worth individuals (HNWIs: people with net financial assets of at least US$1 million, excluding primary residence and consumables), who had US$33 trillion of assets, averaging to $3.8 million per...









Tracy Wood, Ernst's Youngest Partner Named Top Businesswoman


Tracy Wood became the youngest partner ever in Ernst & Young's history in exactly a year ago in July 2005, at the age of 28 and just four years after she joined the firm's Manchester office. Recently and well-deservedly, she was named as one of UK's top 35 businesswomen under 35 by the magazine Management Today. Congratulations to Tracy for this accomplishment...