Today we are going to discuss a service that the big 4 is offering that is in the news. That service is tax reform advice. I wanted to speak about this because tax reform is in the news because of Donald trump. It is one of his biggest promises to create jobs. It will definitely create jobs at PwC, KPMG, Deloitte and EY.
I also wanted to speak about it to give some insight into how the big 4 create ideas and win work.
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What are tKPMG, PwC, Deloitte and Ernst & Young doing around tax reform?
They are meeting with clients and making sure that they are thinking about tax reform and planning appropriately for it. In order to do this, they reach out to clients and set up huge meetings. In order to prep for these meetings, the big 4 put together huge slide decks and have a number of specialists come to the meeting. This means that it’s not only the client contact that goes to the meeting. There are in fact many people that go to these meetings because there are millions of dollars at stake. The largest companies have a lot to lose if they don’t plan for tax reform correctly. It is also typical for the largest companies to have all of the big 4 come in and propose for this work. In some cases it might not be a proposals. It might just be updates. This is especially true with tax reform because many people believe that it might not even be passing soon.
What services are the big 4 offering related to Tax Reform
What services are they offering. Many of the big 4 are offering accounting method changes because of the timing differences.
When something like this or fatca or big data comes out the big 4 all take positions on the issue and designate people as specialists in the field. Then they march those people out to all of their clients. They do that because projects like tax reform could be millions of dollars because they are significant changes to existing regimes. For example, PwC has former chairman of the ways and means committee, david camp, who drafted tax reform back in 2014. Many people think that tax reform might have many of the features that he drafted in his bill, so PwC appears to have an edge in the specialist area.
Another example would be Brexit. The big 4 are simultaneously speaking to clients about Brexit. Why do I mention this. I mention this so that you guys can think about which line of service that you want to go to when you joing the big 4. If you think tax reform will actually pass in the next couple of years, then the tax line of service would be a good group to join. Back in 1986, when the initial tax reform was passed, many people made partner very quick because there was so much work. Many people think the same thing will happen here. Many people are betting their careers on it.
On the other side, the big 4 used to sell tax reform services back in 2014 when David camp had his proposal and nothing came of that. The clients that paid a lot of money modeling back then might be hesitant modeling for tax reform now.
In conclusion, tax reform and Brexit are huge regulatory changes. When you are assessing which line of service or group to go to when recruiting with the big 4, you might want to go to the group that is impacted by the most recent regulatory changes. Just think of Sarbanes Oxley in the early 2000s and what that did to the auditing industry.
PwC will keep the Oscars
News broke last week that the Academy of Motion Pictures Arts and Sciences will keep PwC as their official ballot counter.
In case you’ve forgotten, PwC botched the best picture award at the Oscars in February 2017. PwC Partner Brian Cullinan erroneously handed Faye Dunaway and Warren Beatty the wrong envelope. He handed them the envelope for best actress instead of the envelope for best picture. Both Beatty and Dunaway have difficulty reading because of their advanced age. They saw La La Land on the winning card and just read it out loud. Instead the movie Moonlight should have won.
Cheryl Boone Isaacs who is the President of the Academy stated that pwc made a “presentation of revised protocols and ambitious controls.” She also stated the Academy was “ unsparing in our assessment that the mistake made by representatives of the firm was unacceptable.” There is no doubt that it was unacceptable. Brian Cullinan tweeted out evidence of his incompetence. He was tweeting pictures of Emma Stone while he should have been overseeing the presentation of best picture.
Both him and Martha Ruiz are supposed to memorize the winners of the categories in case something like this were to happen. What they should have done is rush on stage immediately instead of letting the wrong movie accept an award that isn’t theirs. Pricewaterhousecoopers will be getting a second chance but both partners will not. They will have to find another account to keep them busy in the rest of their Januaries and Februaries at PwC.
That doesn’t bode to well for Martha Ruiz and Brian Cullinan’s year end review.
In order for PwC to retain the account, they had to put new controls in place to prevent the same thing from happening again.
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Fortune recently ranked the top 100 places to work for in 2017. The big 4 accounting firms usually get ranked but they have never been ranked as high as they have this year.
Visit our best accounting firm to work for page (https://big4accountingfirms.com/the-blog/best-accounting-firm-work-2017/)
This year Deloitte came in 4 out of the big 4 accounting firms. They were ranked 64th overall. Some reasons they obtained their ranking was because of Deloitte University, good paid leave and a health subsidy.
EY came in 3rd out of the big 4 accounting firms in the ranking. They were 29th on the list out of 100 companies.
PwC was the second best accounting firm to work for out of the 4 top accounting firms. They were able to achieve this ranking by having a casual dress code, student loan paydown program and good compensation.
KPMG is the best accounting firm to work for in 2017. They were 12th overall on the fortune 100 best workplaces in 2017, but they were number one out of the 4 big accounting firms.
Welcome to episode 30 of the big 4 accounting firms podcast brought to you by big4accountingfirms.com. Make sure to subscribe to this podcast, share it with a friend and rate it when you get a chance.
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Today we are going to be discussing college grade point average and how it affects big 4 recruiting.
Let’s answer the age-old question does GPA matter at the big 4 accounting firms . Can you get a job at the big 4 accounting firms with a low GPA?
I think this question has to be tackled from many different angles.
There is no yes or no answer to this question. I’m sorry, but it depends on the person and the circumstances.
For example, if you live in a small town in Wyoming and go to a small school in Wyoming, then yes you need a good gpa. If on the other hand you go to the University of Texas or BYU, and your gpa is low, then I wouldn’t worry about it.
The Big 4 do have minimum gpa requirements, but they aren’t the same at all schools. At some schools like Texas and BYU they are only 3.2. At other schools, the GPA requirements are 3.7. That is because the big 4 receive tons of candidates from those other schools with really high GPAs.
It’s much harder to get a 3.9 at BYU or Texas than it is at Baruch or University of Phoenix. Now I know I’ll get a bunch of emails from the Baruch people telling me how difficult it is at their school, but I’d ask them to go to BYU or Texas and then let me know their thoughts.
How to get around having a low GPA
Can you get a job at one of the big 4 accounting firms with a low gpa. Yes I believe you can work at KPMG, PwC, Deloitte or EY with a low GPA, but you truly have to believe in it. Write it down somewhere everyday. Make it all you think about and your conscious and subconscious brain will get you there. Your brain will solve this problem for you if you let it. You will either use some of the strategies I have above or you will come up with a derivative strategy on your own.
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In this episode of the Big 4 Accounting Firms podcast we discuss the raid of one PwC's largest clients, Caterpillar. This episode is brought to you by https://big4accountingfirms.com.
Caterpillar had 3 of its building in Illinois raided by three federal agencies on March 2, 2017
The departments conducting the raid were the Internal Revenue Service, the Federal Deposit Insurance Corp. and the US Department of Commerce.
The reason for the raid was caterpillar’s offshore tax practices. This caps what was already one of the worst weeks in PwC’s history. PwC was Caterpillar’s tax advisor for these offshore practices.
In this article we will discuss:
PwC is Caterpillar’s independent auditor, but they were also Caterpillar’s tax advisor for the transaction in question for this investigation. PwC was reportedly paid over $50 million for the planning and consulting around the tax advice for this tax haven idea. Those fees have come way down over the years, and Caterpillar no longer pays large tax advice fees. If you look in past 10-k’s, you can see the huge tax planning fees. This was common in the pre Sarbanes-Oxley era. That is probably one of the reasons why the fees for tax advice are no longer significant.
This has huge implications for PwC. If they are found guilty of setting up sham tax transactions by these governmental agencies, Pricewaterhousecoopers could face some harsh punishment and limitations on their tax practice similar to what happened to KPMG.
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More and more news is coming out about the partners at the Oscars
First we speak about the two partners from the Oscars Martha Ruiz and Brian Cullinan. They had both been fired from the Oscars engagement since our last podcast. They are no longer going to be working counting ballots for the Oscars. The Oscar says they’re going to keep PwC for now. But they are considering whether they’re going to keep them going forward.
This week there is also some pretty bad pictures they came out showing Brian tweeting backstage with multiple envelopes in his hand. Now he ultimately ended up giving the wrong envelope to Warren Beatty. But these photos really showed him going to town on his social media minutes before Warren Beatty announced the wrong Oscar.
And the real reason why these two got fired was that after the wrong best picture was announced by Faye Dunaway they failed to act. Martha Ruiz and Brian didn't go on stage to correct their errors for another few minutes. And the producer of the Oscars said that they weren't ready for the moment. He said that they had rehearsed what they were supposed to do if the wrong winner was announced, and they still didn’t do it. The stage manager and the producers had to push them out on stage to correct their error.
Listening to one of my favorite podcasts. Which is the Bill Simmons podcast. He had Jimmy Kimmel on recently and this was one of Jimmy Kimmel’s first interviews since the Oscars.
Now these people are accountants at all. Bill Simmons is just a sports journalist. Jimmy Kimmel is a comedian. All they could talk about was how they this Oscar screwup was. Bill Simmons went so far to say that it would be one of the first paragraphs in Jimmy Kimmel’s obituary. Jimmy Kimmel laughed that off and said I really hope not. To which Bill Simmons said, I don’t think you know how big a deal this thing is. This is still going to be a big deal in a few months. When he said that, all I could do is shake my head. When I first saw this news, I thought it was a huge deal for PwC, but I didn’t think it would be as big as it is for them now. Their name and their brand, PwC, is always going to equal biggest Oscar mistake in history for the average American.
That’s why I think ultimately that Brian is going to have to retire or resign. Most likely I believe he will resign. I think PwC is standing behind him right now because of his leadership position and his years of service. As this bad news for the firm keeps snowballing, I don’t think they can keep standing by him.
Additionally, I don’t think he’ll be able to stay at PwC himself. I don’t think he’ll be able to put up with the embarrassment and the looks that he is going to get from his peers and his clients. That would be a big task for somebody that was mentally tough and prepared for it. The question is is he mentally tough enough and easy ready to handle all that. I don’t think he is and I don’t think Pricewaterhousecoopers is prepared to stand behind a man that is going to get a lot of heat. I really wouldn’t wish this situation upon anybody, and I hope that he ends up okay on the other side of this.
It has now been confirmed that Brian Cullinan wanted to be a celebrity himself. Variety came out with a piece stating that Cullinan wanted to perform a sketch at the Oscars. He pitched an idea to the producers of the Oscars to perform a sketch on stage with jimmy kimmel.
I have been saying all along that these two partners wanted to be celebrities. More specifically Brian. He had been taking tons of pictures with celebrities at the Oscars in the prior and current year. This just shows how much he wanted to be involved in the process. I think that should give some hesitation to PwC as to whether they should keep them. It was pretty evident how this error could occur. Yet PwC took no steps to monitor his social media, and make sure he was ready for this stage. And now they may pay a severe price for his actions.
Finally the partners now have security after their families have been threatened. Their addresses have been released on the internet along with photos of their homes. There are even photos of Brian's wife shopping that were taken by the paparazzi.
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In this episode we cover #envelopegate and what it means for PwC. PwC are just the nerdy accountants at the Oscars right? Not anymore. PwC wanted to be celebrities too. Now they are, but not for the reasons they wanted to be.
We cover the following topics
1. What went wrong at the Oscars for Pricewaterhousecoopers
2. What this means for PwC's brand
3. What PwC was supposed to be doing at the Oscars and how that led to this error.
4. Why the failure by the PwC partners at the Oscars reflects poorly on their staff
On a night where the 2017 Oscars were supposed to be all about Hollywood sticking it to Trump, they became about a big 4 accounting firm known as PwC.
PwC counts the ballots for the Oscars and has done so for 83 years. By all accounts they counted the ballots this time as well. What they didn't do was hand the presenters Warren Beatty and Faye Dunaway the right envelope.
Will PwC lose the Oscars engagement? Will PwC lose fees on this engagement. What does this huge mistake mean for PwC's brand.
What will happen to Brian Cullinan and Martha Ruiz.
Warren Beatty ended up announcing La La Land as the winner for Best Picture instead of Moonlight.
Who is Brian Cullinan? Who is Martha Ruiz? We provide both of their backgrounds in this podcast episode
Check out our coverage on our site below:
Blockchain has been in the news a lot lately. This is especially true for the big 4 accounting firms, PwC, Deloitte, KPMG and EY.
They have been forming partnerships trying to come up with solution for their clients. Blockchain has the potential to disrupt many industries, so the big 4 need to advise their clients on how to avoid being left behind.
In this podcast episode we go over a brief summary of what a blockchain is. We also discuss why a blockchain might matter to the Big 4.
Lastly we go over what each firm is doing in the blockchain marketplace.
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In today's episode we discuss what causes stress at the big 4 accounting firms.
Do you hear all the rumors about the big 4 being stressful but aren't sure why they are stressful. We go over several factors in today's podcast episode.
Do you think all the stress just relates to the long hours at PwC, KPMG, Deloitte or EY? No, that is just a symptom of the larger problems.
Long hours do cause stress but that isn't the only reason stress exists at the big 4.
Some of the reasons that stress exists are:
1. Lack of mentorship
2. Underbidding by other accounting firms
3. Lack of goals and expectations
4. Long hours
5. Face time at the office (No, not the app)
6. Poor project management
7. Client focus
8. Client demands
Do you have thoughts about what causes stress at the big 4? Do you have questions about what we discussed on this episode? Visit our site and leave a comment on our forum.
PwC back in court over MF Global
As you may recall PwC settled a lawsuit earlier this year that threatened its existence. That case was the Taylor Bean case that we covered here in great detail.
Taylor bean’s bankruptcy trustee was seeking $5 billion in damages.
PwC is facing another such case with MF Global. The MF Global moderator is also seeking billions of dollars. The MF Global moderator is seeking $3 billion in damages which is a decrease from their initial request of $10 billion in damages.
That case was all set to go to jury selection this next week, but both parties have agreed to seek mediation first. The judge wanted them to seek out mediation before the case goes to a lengthy trial.
The law firm representing PwC in the MF Global case is the same law firm that defended them in the taylor bean case. The name of the firm is King & Spalding. There is also a key witness in the MF Global case that was utilized in the Taylor Bean case. The witness is Lynn Turner who was a key witness in the Taylor bean case.
This mediation could result in a settlement, but if not the judge said that he would get them back on the court calendar in a matter of weeks.
Will PwC settle the case?
EY Indonesia fined by PCAOB
EY has had some trouble this year.
Ernst & Young settled with SEC over their audit of Weatherford.
EY also settled with SEC over independence issues.
They have once again settled with a regulatory agency. This time EY is settling with the PCAOB.
The Indonesian member firm of EY was fined $1 million for audit failure, noncooperation and standard violations. This really shows the PCAOB’s global reach here.
The fine relates to a 2011 audit of an Indonesian telecommunications company.
There was a lot of trickery going on in this investigation. The PCAOB stated that workpapers were being created during the investigation. It will be interesting to see whether EY has another bad year of audit sanctions.
Do you think EY will have another bad year?
KPMG’s Inaugural Data Analytics class selected
Last week KPMG selected the inaugural class for their Masters of Accounting with Data and Analytics program.
We previously covered that KPMG will pay for your masters degree if you choose to major in their data and analytics program.
The first class of 52 students was selected last week. Each participating university, Ohio State and Villanova, will have 26 students.
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In today's podcast we will be covering the biggest big 4 accounting firms news for the week ending January 27, 2017
The first story we cover is some comments made by AICPA CEO Barry Melancon. He made these statements on Tuesday January 24, 2017 at the Accountants club of America. He was speaking about the current state of the profession. He spoke about how all the new hires are choosing industry over public accounting. It appears that candidates are seeing better offers in industry versus the big 4.
The second story we cover is the news about Deloitte opening a blockchain lab in the Silicon Docks district of Dublin, Ireland.
Lastly we go over the news that KPMG is being investigated over the audit of Rolls Royce. Rolls Royce was fined by multiple government agencies around the world for bribing and other fraud. Now KPMG is being investigated since they were the auditors for the majority of the years the fraud was perpetrated.
Intro music by SK and the song is titled "Beats - Did it all for the money"
Make sure to visit https://www.thebig4accountingfirms.com/ for more big 4 news.
In this episode we cover an update on the PwC acquisition of GE's Tax Department. PwC came out with a press release on the Wall Street Journal saying that they estimate the acquisition of GE's tax department could make them $1 billion a year. We analyze whether that is feasible in this episode.
We also cover the news that KPMG is building a new training facility in the Orlando area.
Make sure to check out our website at https://www.thebig4accountingfirms.com for more details on all of this news.
PwC recently announced the acquisition of GE's tax department.
This includes PwC hiring more than 600 employees from GE as well as GE's tax technology.
The deal will last for 5 years. At the end of the deal, GE will assess whether they want to continue using PwC to run their tax department.
PwC said that the GE employees will service GE and other PwC clients.
Listen to this episode to learn more details about the acquisition and to figure out whether this deal is better for PwC or GE.
visit our website for more details on this news
In this episode of the big 4 accounting firms podcast we cover recent news about Deloitte's espionage practice.
It came to light recently that Deloitte utilized espionage to grow the government services practice.
They used form CIA spies and government employees to spy on client and other big 4 accounting firms. Learn more details in this episode.
Visit www.thebig4accountingfirms.com/the-blog/deloitte-corporate-espionage for more details on the story
PwC has lost another huge client headquartered in Europe as a result of mandatory audit rotations.
That client is Glaxosmithkline.
PwC lost GSK to Deloitte. Learn how they lost GSK and what this means for PwC and the audit industry in general.
Visit www.thebig4accountingfirms.com/the-blog/gsk-changes-auditor-from-pwc-to-deloitte for more details
Big 4 Accounting Firm, KPMG, released their 2016 financial results in early December 2016.
We cover key financial metrics and figures in this podcast episode.
We also cover the number of employees that KPMG had at the end of their 2016 fiscal year.
Make sure to visit our website for more details
In this episode we go over what you can expect for a Big 4 Salary.
We cover the progression of salaries over a big 4 career.
We discuss how much you make at an associate level, senior associate level, manager level, senior manager level and even the partner level.
How much can you make as a partner? In what region of the country can you make the most money at the big 4 accounting firms?
These are all questions that we try to answer in this episode.
Visit www.thebig4accountingfirms.com for more details around big 4 career and salary expectations.