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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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

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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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...

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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...

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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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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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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...

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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)...

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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... 

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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...

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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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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...

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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...

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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...

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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...

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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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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...

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