Day: November 5, 2021

A Big 4 Firm Being Untruthful? You Don’t Say!

Christina Lane

From the Financial Times yesterday:

A senior KPMG partner advanced an “untruthful” defence at a disciplinary hearing into the accounting firm’s misconduct in the sale of bedmaker Silentnight to a private equity fund, a tribunal has found.

The tribunal also found that KPMG and David Costley-Wood, the partner who led the Silentnight work, had failed to co-operate in not providing evidence to investigators from the UK accounting regulator.

KPMG was fined £13m in August and ordered to pay more than £2.75m in costs for its role in placing Silentnight into an insolvency process in 2011, which allowed HIG Capital to acquire it without the burden of its £100m pension scheme.

The accounting firm was found to have acted in the interests of HIG, which it was nurturing as a potential client, even though these were “diametrically opposed” to those of its client Silentnight. KPMG sold its own insolvency advice business, now called Interpath, to HIG this year.

In addition to the £13 million fine the Queen’s KPMG received, Costley-Wood was fined £500,000, severely reprimanded, and excluded from holding an insolvency licence or being a member of the Institute of Chartered Accountants in England and Wales for 13 years. The tribunal recommended he be banned for 15 years. During a four-week hearing held last November and December, he called the Financial Reporting Council’s case against him a “witch hunt” and said the regulator was “trying to trash my name in the press.”

However, most likely knowing the shit was going to hit the fan, Costley-Wood conveniently “retired” from KPMG on June 4.

You can read the tribunal’s full report here.

KPMG accused of ‘untruthful’ defence over Silentnight misconduct [Financial Times

Related articles:

KPMG Just Missed Getting a Record-Setting Fine In the U.K. By *This* Much

This Is Not Good, KPMG. Not Good At All.

KPMG U.K. Restructuring Partner Channels Angry Donald Trump During Disciplinary Hearing

The post A Big 4 Firm Being Untruthful? You Don’t Say! appeared first on Going Concern.

Did you miss our previous article…
https://www.digital-accountants.com/?p=310

Bonus Watch ’21: Deloitte’s Audit Practice Is Trying to Nip This ‘Great Resignation’ Thing In the Bud By Offering Retention Bonuses

Christina Lane

There’s a firm that finally gets it when it comes to giving employees of one of its core lines of service a reason not to join the mass exodus that is going on right now in the Big 4.

It’s not promoting some fictitiously great company culture. It’s not giving employees Omaha Steaks or 1-800-Flowers gift cards. It’s not throwing pizza parties during busy season. The only way the Big 4 can retain their prized employees during “The Great Resignation” is by giving them more money. Plain and simple.

You would think Deloitte, the most behemoth of the behemoth accounting firms, would have realized this during compensation season. But an analysis of employee raises this year showed Deloitte didn’t loosen the purse strings like PwC and EY did (we’ll be analyzing raises at KPMG soon).

However, last month Deloitte announced that the firm would be providing mid-year salary adjustments to employees in all service lines before the end of 2021. But in an email to Deloitters, CEO Joe Ucuzoglu wrote, “In some markets and for some professionals, our compensation remains highly competitive and no current adjustments are warranted,” so not everyone will receive bumps in pay.

Then last week during an all-hands call, Lara Abrash, chair and CEO of Deloitte & Touche, the firm’s audit and assurance practice, made a surprise announcement to her group (from a post on r/accounting; bolded part added for emphasis):

Deloitte Audit

Hybrid – will make options for those who want to remain virtual beyond this year.

Compensation adjustments – Announced previously. All markets will be eligible for adjustments, including enabling areas. Adjustments will be based on market data and level, not performance. Will communicate late October/early November. Adjustments will average in high single to low double digit. Over 80% will receive a 10% or higher raise. Highest percentages will be focused to seniors and managers.

Longer term compensation strategy for bonuses – This will be a one-time award for certain US client service professionals. US A&A professionals second-years through SM1/2. Amounts will vary by level. Between $20k and $35k. Those who receive will stay until at least the end of May 2023. Paid out 1/7/2022.

But of course there’s a catch (from a different post on r/accounting):

Caveat being: you must stay until may 2023 or you’ll have to pay back in full

Here’s a thread with a decent discussion on r/Deloitte about the retention bonus:

Thoughts on A&A retention bonus? from deloitte

 

This seems like a win-win for Deloitte. You give employees who were thinking of leaving in the next year (like the OP above) a reason not to leave before May 31, 2023—the last day of Deloitte’s 2023 fiscal year—AND if they do leave, the firm gets its money back.

We haven’t heard about any of the other Big 4 firms or larger midtier firms offering retention bonuses to employees. If we missed one, let us know in the comments or via the contact info below. We also haven’t heard if Deloitte is offering this retention bonus in its consulting and tax practices? If the firm has, get in touch with us.

So who’s taking the retention bonus at D&T?

Related articles:

Compensation Watch ’21: Deloitte Staff Gets Some Encouraging News About Raises and Promotions

Compensation Watch ’21: Deloitte Puts Mid-Year Raises On the Table (Updated with Email From Deloitte CEO)

The post Bonus Watch ’21: Deloitte’s Audit Practice Is Trying to Nip This ‘Great Resignation’ Thing In the Bud By Offering Retention Bonuses appeared first on Going Concern.