Monday Mashup – No Regrets

I hope all of you in the US had a very nice long holiday weekend. It’s summer here in Chicago, sort of. The weather’s been quite erratic – hot, sunny, rainy, chilly as if it’s October, and then hot and sunny again. Still not sure whether to break out all my summer clothes or keep a few hoodies and sweaters handy.

It was a relaxing mixed with busy weekend for me. I filled it with some writing, some family, and some “business of blogging” activities. 

Once and a while I feel that my efforts are falling into the futile category.  To counteract that I do something that reminds me of what I’ve accomplished and where I’ve been.  Check out my new About Francine McKenna and Speaking pages.  I am refocusing my efforts towards freelance writing and paid speaking as that has less chance of conflict and constraint than consulting.  I am still consulting on a limited basis, when it makes sense for the client and for me.  But I’d like to be out there more, talking and writing in multiple outlets about the issues I raise here.  

Lots of other great things happening at re: The Auditors headquarters. I am part of a new blog launch, Technically Women. It’s an all-star, global lineup that I am thrilled to be a part of. We’ll be writing about technology, women, social media and software, women in technology and as many variations on those themes that a bunch of women who share at least biology can come up with. Take a look. I hope you will find it intellectually stimulating as well as sometimes surprising and irreverent. You can count on me to give it my best shot.

I will be participating this Thursday at 2 pm EST in the “2009 Mid-Year Review – Securities Litigation and Enforcement” sponsored by Securities Docket. The webcast, which is part of BrightTalk’s Securities Litigation Summit, will be a follow-up and update to the popular “2008 Year in Review” we presented in January 2009.

I am joining several of the leading bloggers in the securities litigation and SEC enforcement world — including Kevin LaCroix (The D&O Diary); Tom Gorman (SEC Actions); and Lyle Roberts (The 10b-5 Daily) — with Securities Docket’s Bruce Carton for what promises to be lively and entertaining event.

Finally, I was asked by Accountancy Magazine in the UK to write a summary of the Compliance Week Annual Conference for their readers.  This article, entitled “Regulatory Reformation,” can be found here.  Please let me know what you think.


Music by Chris Blake

52 replies
Newer Comments »
  1. Anonymous
    Anonymous says:

    You are a joke – all of this big 4 bashing is so you can make a bigger footprint for yourself on the internet and in public speaking circles

  2. fm
    fm says:

    @1 Yeah, that’s the ticket. That’s all there is to it. You’ve revealed my master plan. It’s a contrary strategy. Now I can go back to being nice to the Big 4. Ha.

  3. Ex Deloitte and PwC consulting
    Ex Deloitte and PwC consulting says:

    @1 I guess you would be right… if anyone gave a rats arse about the big 4 firms other than people that work there, people that used to work there and their customers. If I wanted to make a big footprint on the internet I’d plant my foot on something people actually care about. Reminding the public accounting firms that they are *public* accounting firms looks more like a labour of love to me. But then I must be all bitter and twisted inside or something.

    Mate I used to work in there too — I know that when you’re inside, the firm feels like the whole world, your bosses are always telling you how significant the firm is, how it’s making a difference, how “we worked with X% of the Fortune 500 this year”, etc etc. Then you get outside and maybe you’re a client, and the world changes.

    Don’t live your whole life inside. Get out and breathe for a while. Look at some other footprints. Bring a tape measure.

  4. To the foolish @1
    To the foolish @1 says:

    @1 – Dont like it? Make a footprint of your own. Perhaps you can start a pro-Big 4 blog or even one solely dedicated to bashing Re: The Auditors. Then maybe one day, you’ll earn the privilege of being called a joke by some bozo who fails to first understand your true motivations and purpose in what you do.

    My big 4 counselor/mentor once told me that an indication of the progress in attaining one’s goals is the amount of naysayers he/she starts to attract. Keep the naysayers comin’ FM!!

  5. Anonymous
    Anonymous says:

    @4 – but if the posters to this blog and FM are a naysayer group against the B4, then your argument indicates that not only is FM attaining her goal but so are the B4. @1 could be more constructive – agreed… but let’s be fair — there are multiple sides to this story and as far as I can tell, FM wants to hear all the sides. While FM is clearly not a fan of the B4, I have never heard her say that this blog’s purpose is to bash the B4. It is a discussion. There is a lot of controversy here — and that indicates that it is a worthy discussion. I suggest we all be openminded – and do some listening. That includes @1 and those that have bashed @1.

  6. fm
    fm says:


    Yes, Come one, come all.

    You are welcome to the discussion as long as you,
    1) Don’t use excessive or unnecessary expletives, especially in reference to someone else. Used as punctuation, in small doses, is ok.I am the final arbiter of taste.
    2) Don’t mention any names from firms that are not senior leadership or otherwise in the public eye already via their own statements, deeds or misdeeds and are relevant to the thread
    3) Stay close or somewhere fairly near the original topic although this is loosely interpreted. And be fair and diplomatic. Listening to others is encouraged.
    4) Don’t attack me personally in an unkind, vulgar, or unproductive manner. Genuine criticism, correction, and fact enhancement as well as honest disagreement or addition of alternative theories and anecdotes is very welcome and downright encouraged.

    Don’t forget… I can see your IP address and host name, so do not expect anonymity from my perspective but you can expect personal privacy (if you want to give only me an email and/or a url) from other readers unless you chose otherwise. I moderate every comment personally. I do not edit comments, even for length. I only post, delete, or send to spam.

  7. Sceptical
    Sceptical says:

    When I first discovered this blog several months ago I enjoyed what was an alternative, but considered, perspective on the B4 (of which I am a reasonably satisfied member) and teh profession in general.

    However, it now seems that the arguments put forward by FM are less reasoned, less balanced, and as a result, far less interesting. I can appreciate that FM is trying to make a living out of this, and so needs some ‘controversy’ to stir things up, but blaming B4 and the rest for just about everything that’s gone wrong in the financial markets and displaying evident schadenfreud at every legal case against B4 (and the rest) is not a constructive or interesting viewpoint.

    Yes, some in the profession have made big mistakes, and some been complicit in fraud, and they should be severly punished. But to tar the hundred’s of thousands of B4 employees around the World who do not fit this description with the same brush is disingenuous and is more suited to the tabloid press than a blog for professionals in the industry.

    Perhaps all this bashing this will work and attract the attention of the ill-informed or disillusioned, but for me personally, I find it a little predictable and find myself visiting this site less and less frequently.

  8. Anonymous
    Anonymous says:

    @sceptical – I concur… sometimes I vist the site just to see the arguments, but after I reached the same conclusions you reached – it became less interesting except as a psychology and sociology experiment.

  9. SocalPizza
    SocalPizza says:

    @7 through 9

    I have to disagree. I think this website is popular because FM has become a sort of mouthpiece for those who have gripes with the big 4. The Big 4 created this blog more than FM did.

    And I’ve never seen FM disparage any of the non-leadership employees at Big 4, only the leadership thereof. Quite the opposite; I’d say she goes out of her way to frequently defend the talented people who may be sucked into the Big 4 machine with one eye closed. So I don’t think you can accurately say she’s tarring hundreds of thousands of people.

    And not that this matters, but “skeptical” is spelled with a “k” and “the” is spelled t-h-e.

  10. Anonymous
    Anonymous says:

    Is it enough though to say that there are only a few bad apples? Isn’t one of the pillars of public accounting the trust of the general public at large? Maybe this is too high a goal to attain since accountants are humans and therefore fallable. Until we get over ourselves and begin to take the role of auditor seriously regardless of the bottom line, there will always be a cloud of doubt regarding the work of the public accounting firms.

    They are “painted with the same brush” because they come from the same paint can. When the leadership of a large firm create an atmosphere of complicity, it permeates the entire firm. I am willing to bet there are a ton of stories we don’t hear because not everyone has heard of this site yet to post them.

  11. AS
    AS says:

    I for one will agree with SocalPizza…FM performs a rather valuable role in for accountants, be they in Big 4, outside Big 4, or still in university and trying to evaluate their options. Since the firms aren’t going to put out this kind of information (and why should they?), and the general media doesn’t find the accounting profession interesting enough to put out this kind of information (at least, not until a huge collapse occurs), FM performs an invaluable role.

    I’ve heard from more than a few people the things that Sceptical’s or anon8’s or anon9’s complaints resound, and even though I think that some of the things fm concludes are bat-guano SCARY, I’m still of a mind that I would rather be cautious and alert and then possibly have nothing to worry about than be caught unaware and uninformed when I should have been preparing.

    I admit my biggest gripe is that it’s re: The Auditors. I’m not studying audit, but none of the tax sites seem to consistently provide this quality or tone of discussion (not saying there aren’t any good tax blogs because I know there are…but I don’t really anything in the spirit of re: The Auditors for tax)

  12. Anonymous
    Anonymous says:

    @socal — want to add… the comment of sceptical and the others isn’t that FM is all wrong or a problem… just that it isn’t balanced. It is kind of like listening to Rush Limbaugh or his liberal counterpart… they have some interesting points and stimulate interesting conversation… but the overall tone is unhealthy. I would respect much more of the posts and the nature of this blog if there was a more balanced discussion. The blog is clearly a mouthpiece for those that want to B4 bash… and while FM welcomes all, she has always been clear that she intentionally presents this lopsided view because she feels it is under-reported. I think it is hard to take lopsided reporting seriously… there is a lot to be gained from reporting all sides of a story and you can still toss in your opinions which will be your personal bias.

    Yes – the bashing is primarily towards B4 leadership. But it is also against those who agree with some or all of the leadership messages. If you state things that are opposed to the bashing — you are quickly accused of being a kool-aid drinker… and I am sure many of those accusations have not fallen on B4 leadership right here on this blog.

  13. Sceptical
    Sceptical says:

    @ Social Pizza

    Firstly, perhaps some of the readership here are leaders of B4, and perhaps they should not all be tarred with the same brush. Your comment about employees being ‘sucked into the machine with one eye closed’ is typical of what this blog is becoming. B4 is a business, like any other. Some people thrive, learn and have positive experiences in the big corporate atmosphere, some don’t. My point is that this blog is becoming too one sided, and less reasoned in it’s arguments, to it’s detriment.

    Secondly, in the ENGLISH language, sceptical is spelt with a c, not a k. Your spelling is an American bastardisation I’m afraid.

    Finally, point taken on mistyping of ‘the’. You must be a good auditor. 😉

  14. Tenacious Truman
    Tenacious Truman says:

    Sceptical @ 15 —

    Everybody has an opinion, especially auditors. Not sure if they are qualified to hold that opinion, however. (Hee.)

    You wrote, “B4 is a business, like any other.”

    That statement is not correct, you know. Not every business “assumes a public responsibility” by “performing [a] special function” wherein “utlimate allegiance” is owed “to the corporation’s creditors and stockholders, as well as to the investing public.” (Quoting SCOTUS in U.S. v. Arthur Young.)

    The thing is, the Big 4 operate as if each firm was just a “business, like any other,” but doing so is a significant cause of audit quality issues.

    If being a Big 4 accountant (or CPA/CA auditor at any level) was just another business, like selling used cars, then we wouldn’t need a whole bunch of “certified” folks to do it, and we wouldn’t have made it mandatory for publicly registered companies in the U.S.

    Finally, if the Big 4 firms were a business like a publicly registered corporation, there would be some accountability. We understand how CEOs get removed from their leadership positions, we understand how “normal” partnerships dissolve or buy-out partners. The gap in our understanding is how Big 4 leadership gets held accountable for its actions (or lack thereof) when anybody who discusses taking action is subject to being “disciplined” through position and compensation decisions by the very people they might be seeking to hold accountable. I would posit that such a lack of accountability is utterly unacceptable in any business of significant size, and is even more repugnant in one with the special responsibilities to the public noted above.

    — Tenacious T.

  15. small2BIG4
    small2BIG4 says:

    @Sceptical – I agree that this does to be seen more bashing of how bad the big 4 are. I started at a very very small firm and worked hard and moved on to bigger firms until I hit the big 4. I can say small firm are good at some things and not so good at others. The last small firm I worked at was in the top 50. The office I was in was great in the mid 90’s, but as we grew too fast rest of the firm could not keep up with our needs… leadership did not want to keep pouring money into DC to keep it going… needles to say most of us that helped make that office great moved on. I also had a falling out with the partner I reported to on the direction of our practice. So it was really time for me to move on since I ended my partnership track. Once I moved to the big 4 things were great (for me). I have been apart of practice/business unit leadership, been able to be vocal with the partners, some of which were senior partners of the firm. Do I think there are bad areas of the two I have worked with… Yes, but I think there many more bright spots.

    I also think they (big 4+) have a lot to offer and it all depends on what practice, office, partners one works for. Some might think I drink the ‘Kool-aid’ every day and I do not. Like everyone, somedays are good somedays are bad. Just to roll with the punches.

    I think people that are bashing the B4 + could be bitter former or current employees, felt like they have been overworked, underpaid, etc or have never worked for one.

    All things have +&-‘s, you just need to make the most out of it. As my dad would say, “Welcome to the real world.”

  16. Anonymous
    Anonymous says:

    @sceptical – I defended your British spelling… no need to make an effort to act like American English is inferior to yours. If you complain about the B4 bashing… let’s be adults here… we need not bash each others language/dialect differences. It is all ENGLISH… chill out.

  17. AS
    AS says:

    re Anonymous14

    “and while FM welcomes all, she has always been clear that she intentionally presents this lopsided view because she feels it is under-reported.”

    And what is WRONG with this? FM provides balance through a critical perspective precisely because everyone else is insanely lopsided to the other side. What fm reports *is* underreported (do you deny this? Do you think that the Big4 leadership and HR are as up-front about these issues? Are they “balanced”?), so to bring balance to accounting news, someone has to take upon herself that which must be said, even if it is ill news.

    The question is…is it untrue? You’re saying it’s lopsided, but of course, the other side is lopsided too! Through the introduction of what HR and Big 4 leadership says (which is one side of the coins that the Big4 would like everyone to *exclusively* be acquainted with) to what fm has reported (which is the other side of the coin), we begin to have enough information to paint a clear picture.

    It seems that when the firms begin presenting something closed to balanced, eliminating the need for such drastic countermeasures, then your points will be plausible.

  18. SocalPizza
    SocalPizza says:


    I would like to formally apologize for correcting the spelling of “sceptical.” I was completely unaware of an alternate spelling. I remain firmly committed to spelling “the” t-h-e, however.

    @16 TT

    Thank you for clarifying what I was trying to get across as far as my beef against public accounting firms (especially big 4) with regards to their special role as public servants. (I’m not assuming your intent was to clarify my words, however)

    @15 Sceptical

    It’s actually Socal Pizza, but Social Pizza is kind of cool too…
    Also, it’s worth mentioning that I don’t think anyone is saying that Big 4 isn’t good for your career, or that you can’t learn a lot there. That would be patently inaccurate. And I don’t think it’s fair to blame the Big 4 for treating employees like crap; I think in the real world, most employers do anyway, and to expect more would be foolishness and naïveté. Big 4 HR doesn’t help their case by pretending they’re committed to each employee, but that’s what HR’s do, and what they should be expected to do.

    As far as a bias on this blog goes, I’m very much with AS on post 19. So what if it’s biased? People come here to hear the other side. This isn’t a news channel that’s pretending to be completely unbiased. This is a blog. It attracts people that want to hear the other side of the Big 4 HR tale. And I think calling out a Rush Limbaugh-type comparison is quite fair. I for one am tired of hearing the same schtick about how fabulous Obama\Clinton\Socialism\Gays are from the mass media, so I appreciate having a completely opposite opinion from conservative talk shows and news websites. I think the same thing applies to this blog. People are tired of hearing the Big 4 rhetoric, especially now that people are getting canned right and left, so they come here to hear the other side of things.

    (Please accept my example for what it is and refrain from turning this into a Liberal vs. Conservative argument…)

  19. SocalPizza
    SocalPizza says:

    Hey FM… could you correct the “can learn a lot there” to “can’t learn a lot there” in my last post? Sorry about that!

  20. fm
    fm says:

    @20 Socal Pizza

    “.. especially now that people are getting canned right and left…”

    So are you saying that both liberal and conservative professionals are getting canned by Big 4? Can I quote you on that? What about the Libertarians? Or maybe they are “rationally self-interested” enough to call it “re-directed to pursue previously non-exploited strengths” ?

    You’re funny. Thanks for posting.

  21. Anonymous
    Anonymous says:

    @Socal Pizza — being more balanced simply buys you more credibility. There are 2 ways to look at it. Either vary your sources of information to get as many views as you can — thus you seek out your own balance, or seek a source that is balanced. To those that take the option of only seeking the information source that validates their own biases — well, those folks need a little help, and discussing it on a blog will not have any impact. I agree that seeking out all the angles from different sources is worthwhile… it would just be nice to find people or groups of people that actually are more balanced in their views… and those people who consider all the angles and discuss them and debate them in a constructive manner — those are the ones that will gain the most credibility and respect in my book.

  22. fm
    fm says:


    Not sure if you are talking anymore about my writing or the tendency of the majority of commenters to agree and validate what I’m saying.
    If only you or most of the commenters actually read all 750+ posts that I have written as well as all the other content I have written for others that islinked to on this site. You may hopefully see that, although I am critical of the current model of the firms, their business strategy and most of the leadership’s execution of that strategy, I have not said it can not be fixed nor have I never told anyone to not work there. I have only said that the firms are now teetering on the brink of another failure and therefore destruction of the model, due to their own greed, hubris and litigation. Slow gradual solutions are no longer possible. And certainly reversals of the monitoring and supervision of the firms put in place post Sarbanes-Oxley is not desirable. If only the PCAOB was actually independent and effective…

    The competitive advantage of my writing and this forum is that criticisms can be aired freely, and with the benefit of my experience and now the support of many who help me make what I write correct, informed, and worthy of being repeated and quoted. Even a site such as Green Dot Life suffers because although it is an open forum and much information is shared, there is no one and no mechanism to moderate, explain, clarify, and correct erroneous information. I do that here.

    There are many sites that simply inform about the audit/accounting industry. Most of them are beholden to the firms via advertising or other dependencies and therefore will only go so far with criticism. I know that because I have either been asked to write for them and/or they have refused to advertise or sponsor my site regardless of the large audience I have here. But they sure like me to link to them and they link to me…

    I have heard it with my own ears. Although they would like the audience that comes with not being afraid of controversy and criticizing the firms, it is just not possible under their business model. That’s the value of an independent site and my efforts and of only acccepting support for those who support the editorial content here. They may not agree with everything I say but they defend my right, and support the value, of my saying it.


    If y

  23. Anonymous
    Anonymous says:

    Actually FM – I think that when given the right motivation you are pretty darned balanced… you just like to stir the pot from time to time. I agree that the business model has weaknesses that need to be addressed. I think the most constructive thing you have mentioned is that there is an inherent independence issue built in by the fact that the client paying the bills and the client auditors server are not the same… and the client paying the bills may not have the interests of the clients auditors serve (shareholders) in mind. I still have not seen a good solution to that problem — becoming a federal agency is the only thing proposed and that has as many or more problems. As for the blog — it is what it is, and I get some entertainment out of it. I wonder about social responsibility — particular to our younger generation. Encouraging them to think of their employers like the mob… telling them that all leadership are out to get them… these are a disservice to them. You do not do this in all your posts — in fact you encourage people to get B4 experience at times. But put it in context — look at other industries, other company’s leadership, the basics about how the world works… these young people deserve to get started knowing the pitfalls but knowing that they have to pay to play – and that they need not be victims to these things if only they will learn how to manage themselves and work within the culture and politics of any job they find themselves in.

  24. Scott
    Scott says:

    Hiring Big 4 seniors with Healthcare experience in Atlanta (for regional firm) give me a call 404-401-5220

  25. fm
    fm says:

    @26 Anonymous

    I have decided to use journalism/writing and public speaking to change and impact my profession rather than working anymore on the inside in a leadership role. Try to understand my challenge. It’s not easy getting attention to these topics from those in our profession, let alone a general business audience and/ eventually a general investor audience.

    If I told you my dream guy is Johnny Depp, in his hellion years, would you understand me better?

    It is not my intention to encourage all professionals to believe their employers are all “like the mob” or that “all employers are out to get them”. A writer uses examples, metaphors, images to incite (in the good way) action, thinking, to stimulate brain cells. I am assuming that my audience is college or graduate educated, critical, analytical and willing to entertain different or provocative ideas that challenge them intellectually.

    I was taking today to another blogger who asked me why I don’t make fun of the “rigid, closed minded, conservative, anal types” we often find in our profession. I told him because it is many times those qualities that are what makes someone good at what we do. But in terms of the business side of our profession, the model of the firms that deliver the duties of our profession, my goal is to open people’s minds, shake them out of complacency, cause them to be critical and aware of their options and make sure they are self-directed and self-aware about their choices and the people they choose as mentors and employers. I try to belittle the general population that is our kind as little as possible. After all, I may not be “in the firms” but I am also “of the firms.”

  26. Anonymous
    Anonymous says:

    @fm – your goals are commendable. I am not sure if you can make those assumptions about your audience. I am also unsure if the vehicle you have chosen will achieve that goal. But alas, I find it hard to really respond without simply rambling. That might be better done in conversation than in a post that is not well thought out.

    I learned something interesting recently. The partners at my firm will be experiencing a 30% reduction in pay this year. That is quite a large hit. I know many will respond with the boo hoo they are making so much they can afford the hit. Maybe those posters could at least acknowledge that the recession is hitting everyone – including the partners.

  27. anonymous
    anonymous says:

    Of course the recession is hitting everyone in some way…but clearly some people are more impacted than others.

  28. Anonymous
    Anonymous says:

    @30 – the question of more/less, harder/softer is a challenge to quantify. A 40 year old being laid off vs. a 23 year old, a partner losing $200K vs an admin losing $5K… yes the hits are different for each person — I’m not sure who we can say is worse off. We may have to wait a decade to see how it all pans out. That 23 year old may find the perfect thing including true happiness and real financial stability, the partner losing $200K might commit suicide, the admin might go into foreclosure and wind up on the streets, the 40 year old might retire early and squeek by. Or the 23 year old might lose their confidence and become a drug addict, the partner may recoup the lose, the 40 year old will find the dream job and true happiness and the admin will commit suicide. Who is worse off? Who is more impacted? How do we know that and when do we know it? Whose crystal ball do we use? I agree with your statement entirely — just not sure if we know who is more impacted.

  29. Tony Rezko
    Tony Rezko says:

    A couple of random thoughts:

    – I don’t see where it’s FM’s job to “present all sides.” She has an argument, and backs it up, and we agree/disagree like on any other blog in the universe,

    – You ought to give the actual posts a good reading. I am guilty of stopping in from time to time to see what goodies are down in the comments, but some of the conspiracy theorists could stand to read through the substantive arguments at the top, then tell us why you disagree.

    -@31 – when in doubt, assume that the more powerful are going to screw the less powerful and make sure the impact is felt most at the bottom, both relatively and overall.

    -When a partnership model doesn’t reflect the one in our CPA review courses – when instead, we see partners going ass-over-teakettle to try to make 2005 dollars in a 2009 world – we know something is broken. You or I create a partnership, we keep what’s left (profit) after everything else, and some years you make more or less. Big Four partners are squeezing the heck out of ‘everything else’ right now.

  30. Anonymous
    Anonymous says:

    By definition a company (or any kind) has the goal is to get as much as it can out of its employees for as little as possible. By definition, the employee’s goals are to get as much as possible out of the company (and some but not all would say while giving as little as possible). The company’s side is easy — get as much means get high quality work and more hours for fewer dollars and fewer benefits. If it was so easy to do we’d all be self employed, because the companies we work for get more for us than we can get if we stand alone. There is a reason for that too — that the company brings something more to the table in the combination of people, and the deep pockets that can be sued if necessary, and the reputation that they must protect in order to stay in business. As an employee it is your job to stand up for what you want, need and deserve — but you have to do so within the limits of the economic environment. In the 1990s the employees had the power — they could demand higher pay, change jobs easily, and expect better treatment from their employers. That ended a while ago, and the employers had the upper hand. But the economy has changed the picture yet again — now we are all in the sinking ship and the competing factors that are there at all times have become very fluid. They sometimes seem to change daily. Employees often expected security both in times when they had the upper hand and in times when the employer had the upper hand. But now – there is no secutiry for anyone. The companies were generally taking the real risk (in the case of the B4 that is the partners), but now everyone is in that risky position and it is time we all start playing in the sandbox together instead of pointing fingers at others (aka firm leadership).

  31. Tony Rezko
    Tony Rezko says:

    Thanks for the “by definition” course in macro, please hit enter a few times next post.

    I’m sympathetic to the cold, calculated, Hyde Park (think Friedman, not Obama), Cato Institue way of looking at things, and yet, my squishy, bleeding heart point stands. Even as I accept much of what you said, you have the powerful and not-so-powerful all suffering, and the powerful are in a better position to weather the storm.

    That they see no obligation in that is truly appalling. You see no end other than to take what you can for yourself, and all these little groups act “rationally” in doing so. I find that sad, and also wonder if I work for you, because that’s a fairly standard mindset. It’s all about who has the upper hand when the graph shows this or that, and there are no other considerations. (Not pissing off employees would be a consideration in profit maximization, but I digress).

    Play in the sandbox together? I’m asking exactly that. And don’t tell me about all the risk partners are taking if they’re going to continue to try to pass as much of that risk off to the lower rungs as possible.

    And stop pointing fingers at leadership? Not on your life. That is precisely where you point them, friend, and leaders who don’t get that are not leaders.

    Equally cold, and just as rational, will be the entrepreneurs who, one day, lay waste to the B4 model and its overpaid devotees. It’s not a matter of if, but when.

  32. Tenacious Truman
    Tenacious Truman says:

    Anony @ 33,

    I think Mr. Rezco responded to your post much more courteously than I would have. You may want to consider reading your post again, trying to achieve the perspective of somebody who doesn’t know what your’re thinking and can only judge you by the words you post. Such a hypothetical observer might note several inaccurate generalizations, not to mention some holes in logic.

    Let me offer, by way of constructive example, one such inaccuracy.

    You wrote, “By definition a company (or any kind) has the goal is to get as much as it can out of its employees for as little as possible.” (Let’s ignore the typo, because who hasn’t made one? And Fran still has not put in a preview feature.) So what about not-for-profit entities? Do you think the goal of the NFP is as you stated, or perhaps something a bit kinder and gentler? One of the NFPs I’ve worked with has established, as its number one priority, the employment of people who might not otherwise be employable. Do you think such people are as efficient or as effective as a “normal” college graduate? Answer: No. Further answer: It doesn’t matter to this corporation.

    I’ve noticed that the Big 4 tends to generate a kind of superficiality in reasoning, a “bottom-line-only” analysis that tends to overlook complexity in favor of getting to a quick and dirty answer. Part of that tendency is no doubt related to the short time alloted for decision-making. But perhaps another cause is related to hiring a startingly high preponderance of accounting graduates, some of whom may lack the critical analysis skills that are emphasized in liberal arts studies. Not that I’m accusing anybody in particular of such tendencies — but it’s something of which to be aware, perhaps.

    So, Anony @ 33, I would offer the constructive criticism that your thinking appears a bit superficial and would benefit from a more critical look at the complex motiviations of the partnerships, as well as those of the staff they employ.

    Thanks Tony, for causing me to rethink my first response, which was going to be not nice at all.

    — Tenacious T.

  33. fm
    fm says:


    re: preview function on comments. I’ll look into it. Yes, given the number of people who like to write lengthy responses, it would be a big help. I have luxury of editing my own. I would be glad to make corrections for anyone, in the meantime, who is self conscious about typos or grammar.

  34. Anonymous
    Anonymous says:

    Ah Tony — there is a difference between stating what is and dreaming of what would be nice to have. There comes a time when dreams fall to the wayside and we simple have to work with what is. One need not abandon the dream entirely – but set expectations based in reality and work with that first. Should people have an obligation beyond that imposed by our economic principles — that is the dream. Some do, some don’t — and both sides of that fence live in the B4 and both sides live outside the B4.

    I will agree with the statement that leadership holds the ultimate responsibility – and I am in no way giving them a way out. I am suggesting that those not in leadership can make decisions in a way as to maximize their happiness, wealth, living conditions, etc. And to maximimize these things one cannot play the victim and blame leadership for what they have done to them. Look at the cards in your hand and play them. Decide what are your goals, and maximize the ability to achieve them. Don’t expect leadership to deal you a better hand.

    I will also agree that keeping employees happy is part of the way the partnership will maximize their profits. It is not in their best interest to have the employees scared, unhappy, etc — because then they get poor quality work and may lose the best talent. But the motivation is economic — expecting them to genuinely care about you and want to essentially donate to you is unrealistic. As evidence — how much do people really keep in contact after they no longer work together? In my experience they do not keep in touch at all.

    Well, all these altruistic ideals are wonderful. Decades ago I thought I could change it too – and I really thought things would change. OK, some things have changed. We have more flexible work hours than we used to, we have more flexible attire expectations than we used to… and we work longer hours than ever. Maybe we got the snack room or the free cafeteria (think the high-tech companies)… but in return we became slaves. So, those ideals are great — but things are not going to change in my lifetime… not enough to change the fact that I have to look at what “power” I have and use it to maximize my happiness.

    You probably do not work for me — cause if you did, you would know that I only grudging accept these principles of economics and the way the working world is — I fight it every opportunity I get. But in my decades of fight I have found that it is a losing battle. I will continue to fight to set the business world on a better evolutionary path in hopes that those who come along after me have a better time of it. But I still have to live in the world of those economic principles — and getting mad and falling victim to them won’t help me at all. Fighting for change while learning how to manage the reality I live within — that’s the best I can do.

    And what do I seek to maximize — it isn’t my paycheck. I find it interesting that employers still tend to think that the paycheck is the motivator. It is for some, and it is particularly for the young. But at a certain time of life that changes — and it is up to each employee to determine what they work for, what motivates them, why they are there — and seek ways to get those things from the job (or find a job that gives them those things). If we employees are solely motivated by paycheck, then how can we be so angry with the partners being so motivated?

    And for the record — in my firm, office, practice area… the partners are suffering way more than the employees. No one has been laid off in my office/practice, and no one has had a pay reduction. The only impacts the employees have seen is a focus to keep utilzation up, and some trimming of benefits (like 401K match, free food, and vacation policy changes). So, my experience is quite different from many on this blog — eh? In my office/practice the partners are taking the hit for the sake of the employees… as well they should.

  35. SocalPizza
    SocalPizza says:


    I take exception with something you said: “If we employees are solely motivated by paycheck, then how can we be so angry with the partners being so motivated?” Here are my reasons why:

    1. Partnerships are supposed to be a bit of a gamble for the partners. If the company does well, you get a lot of money. If the company does poorly, you don’t get a lot of money. Unfortunately, due to greed and excessive revenues in recent years (as late as 05 or 06 for many large firms), partners have decided that they don’t have to give up lots of money just because their company is now doing poorly. To quote Tony @32, they’re “squeezing the heck out of ‘everything else’ right now” rather than having their own paychecks squeezed. A partnership is supposed to be a high risk\high reward opportunity. The problem is that partners are now passing the risk on to everyone below them to maintain their high rewards. That’s the beef I have (and I think many have) with how big firm partnerships are handling the economic situation right now.

    2. Again, I go back to the difference between a public accounting partnership and any other partnership: Public accounting firms are supposed to be serving the public. Pissing off your staff in a service-based line of work is never a good thing. You can always expect lower quality of work coming out of your firm once you do that, which is all fine and dandy if you’re serving paying customers only. The problem I see is that when the quality of public auditors, for instance, decreases, no one in the public knows about it (let’s pretend PCAOB doesn’t exist, since they’re at worst completely ineffective… and at best, there’s a serious lag in the publishing of financials (and immediate public reliance upon said financials) and PCAOB review). So in the end as a partner you’re sacrificing your service to the public for a few extra dollars in your pocket.

  36. Anonymous
    Anonymous says:

    @Socal — on point #2 — I do not see that we disagree. I’m also not sure how it relates to the original topic. On point #1 — I agree with the characterization of partnership. I do not know that the partners are “squeezing the heck out of everything else…”. There is definitely a squeeze, but I am not yet convinced that it is out of line. I believe the question proposed is — if in the good years the partnership over-extended itself… hired on too many people etc, then are they responsible to carry that same load in the bad years? I think not. I think that in the bad years they are expected to downsize — their profits will also downsize (even with the cuts in staff). Will they make the same amount — no. What if we hadn’t had the boom years? I suggest that maybe what is happening now is that we are reverting to the point the firms would have been at if those big engagements hadn’t come along… if growth had been more steady.

    So I ask — is it true that the employee takes on no risk? How do you divide the risk between the employee and the partnership? Clearly it is out of balance in all industries… how far out of balance is it?

  37. ClownCollege
    ClownCollege says:

    Given the past numerous posts, perhaps FM SHOULD start editing for length. If you can’t make your point within the confines of a concise paragraph, perhaps 2 at an absolute maximum, there is very little chance many people will bother to read it.

    In my opinion, FM was interesting when she was highlighting some of the foibles of the Big 4 that relate to the “soft side” of the industry – “work-life balance”, burnout, etc. When she started to delve into more technical areas and started predicting the Big 4 apocalypse almost weekly, she lost me.

  38. SocalPizza
    SocalPizza says:


    Point #2 was one of the reasons people may be mad at partners of public accounting firms being motivated first and foremost by their paycheck… which is the original topic. I’m not sure how that’s NOT related, actually.

    As far as your rebuttal to point #1, I would say that from what I’ve seen, partners are using the economy as a convenient excuse to squeeze the crap out of their employees (reductions in pay\other benefits coupled with increased chargeable hours, i’m not sure what you call that if it’s not squeezing). The firm I’m at is still doing just fine, but we’ve reduced headcount by about 40%, reduced salaries, and demanded increased chargeable hours. Again, nothing has really changed client-wise from last year (a few lost clients, a few new clients maybe at slightly lower fees, but that’s it). Partners are worried about their bottom-line at the expense of their employees, which leads to all the problems I mentioned in point #1. I wouldn’t be the LEAST bit surprised if partners earn more this year than last year, actually.

    As far as the “employees having no risk” strawman fallacy you’ve set up for me, I think the answer is obvious enough that I don’t have to answer it (but I will anyway). Employees should expect to be fairly compensated for their work. Partners should expect to receive what’s left when everything has been paid (including when employees have been fairly compensated). Companies that screw with their employees can and do survive, but public-serving firms doing this are not being responsible concerning their duties to the public.

    Finally, regarding your bit about good year hiring policies vs. lean years, I never said partnerships shouldn’t slim down during tough times. I’m all for having the minimum number of staff on hand that are needed to effectively perform everything that’s required. The question on everyone’s mind concerning public accounting firms during the recession is whether or not they’ve slimmed down past the minimum number needed for effective audits (again, my background is audit, but this counts for other areas as well) and are now approaching the minimum number needed, period. Combine that with reductions in pay for those who are still in the game and you have bare-bones audits performed which the public rely on to make financial decisions in this already tumultuous market.

  39. Anonymous
    Anonymous says:

    @41 – no real disagreements here… although I have not witnessed any salary reductions for employees, and very few layoffs (about 10% nationwide for my practice), and a push to pull work forward to keep chargeable. I ask this question though — were salaries inappropriately inflated in earlier years. If the housing bubble is a model for what has happened in general, the price of the house was over-inflated and the bubble bursting is a “reset”. Are salary decreases the same thing?

    FYI – I am not playing with you and I do not have an agenda to disagree with you. I am truly interested in the thoughts people may have on these things. I am not in audit — so my world view is definitely different. As for @TT wanting to be nasty — I thought he would enjoy a conversation with meaning. As for ClownCollege — don’t read it if you aren’t interested. Real conversations require some words.

    I have noticed that on audit assist work they have become unrealistic on expectations. Client pressures to reduce fees is the way I interpreted it…

  40. SocalPizza
    SocalPizza says:


    Salaries were appropriately adjusted during the boom earlier this decade. Having no way to predict the future, companies were paying the market rate for accountants (which increased across the board, public, private, gov’t, wherever). Right now, no one can predict the future either, which is why the companies have a convenient excuse of cutting salaries. However, as with the office I’m in, there are many firms that are DOING JUST FINE, and salaries are being reduced anyway. It would be one thing if they said “associates make this much, seniors make this much, managers make this much” and adjust salaries for those that have inflated salaries from year after year of 20% increases (making it fair that the new associates would get some sort of raise for their hard work, and still paying managers the going rate for their services).

    At any rate, if I don’t hurry up and post this, Clown College will be upset. We can’t have that.

  41. Anonymous
    Anonymous says:

    @44 — poor clown college. She/He doesn’t like our discussion.

    Around the dot bust time I lost my job. At that time I found that getting a new job at the same salary was difficult. I could have easily taken a job at a 20% pay cut. Seemed like the way to adjust salaries was to let people go and hire in cheaper. So many of us in the tech industry were put out on the streets and we had our salary adjusted that way. In time I managed to get a job with no decrease in pay – but it took a long time and a change in career entirely. So the question really comes to, should firms adjust salaries up AND down based on the situations they are in. In theory (and don’t yell because I certainly wouldn’t want the world to work this way – not at this time of my life… although theoretically it makes the most sense) the right thing is that every year people are reviewed and salaries may be adjusted up or down based on market factors and performance in combination. The way it works now is that salaries can only stay the same or go up (this assumes performance never deteriorates and the market stays as good or better) — so the only way to adjust down is through layoffs.

    While I agree that salary increases in the boom were adjusted correctly, the question is whether there is a viable vehicle companies can use to adjust salaries to the new market conditions — and is the only vehicle layoffs? Without such a vehicle there are the problems you mention with new hire salaries and not rewarding the young associates properly.

  42. Observer
    Observer says:

    @ 35

    ” But perhaps another cause is related to hiring a startingly high preponderance of accounting graduates, some of whom may lack the critical analysis skills that are emphasized in liberal arts studies.”

    TT this made me smile.

    As the product of an educator father who believes to his core that a strong liberal arts eduction is the foundation of critical thinking and complex reasoning, it seems that perhaps “higher education” has simply become vocational training. It may have been Vigen Guroian who quipped: We treat students like cattle: cattle know what to do, they just don’t know why they do it! The net effect may be as you suggest: associates/managers/partners who lack the cognitive skills to recognize and respond to complex problems and rapid change. Surely the propensity to focus too narrowly on a restricted set of concerns (and skill sets) limits the ability of any organization to develop insightful & effective leaders… as has been observed across all sectors.

    I know nothing of the BIg 4 or your industry, but we had a broken model here in Michigan for most of the last 25 years. It finally collapsed under the weight of protecting the model at all costs…

    TT, thanks to you, fm & others for the thoughtful dialog.

  43. fm
    fm says:

    @Observer and @TT

    On the subject of a liberal arts education and lack of critical analysis skills of accounting graduates…

    I remember the summer of 2006 when I had the privilege of spending a lot of time with the interns we had in the internal audit practice at PwC Chicago. Why me? Well, I had two inside assignments – internal audit for the firm itself and a local client where I managed all their international IA co-sourcing needs. It seemed everyone else considered spending time with the interns a burden and by mid-internship, the majority of them were spending their time in the office with me. There was “trouble” finding things for them to do at clients that didn’t take hours away from others on the team that needed them to meet their goals of >80% chargeability and that didn’t take time away from others on the team to do their “real” work.

    I remember their first day… After a morning reception and a few speeches attended by only half of the Managers and Directors (and only a few partners) who were supposed to be their “coaches” for the summer, I had most of the remaining “coaches” all ask me if their “coachees” could come with me for lunch. A reservation I had made for four (I had been hit on early for the same favor by a few more) turned into a lunch for twelve. There I asked them what I usually ask new people I meet: What books have you read lately? Have you traveled recently? Out of the country?

    Every one of them said they had not read any fiction for long time as a curriculum that requires 120-150 hours of credits with a >3.5 GPA did not leave much time for leisure reading. And no one at the table that I can recall had a passport and, therefore, no one had done a semester abroad or ever been out of the country. No one spoke a language other than English, not even Spanish, as there were no Hispanics in the group.


  44. ClownCollege
    ClownCollege says:

    Wow, some people can’t take a bit of constructive criticism. I was just sayin’, a concise argument gets more attention than a long, rambling argument. I would’ve thought a group that visits a blog encouraging Twitter would understand that.

  45. Tenacious Truman
    Tenacious Truman says:

    fm @ 47 —

    Great story, and by “great” I mean “sad”. Let me add one.

    We were on travel and I was engagement manager. On my team were 2 Senior Associates and another Manager. We were staying at a Renaissance hotel. One of my Senior Associates commented that the hotel had a weird name — and mispronounced it. The other Senior Associated nodded and asked the other Manager why they would give a hotel such a weird, difficult-to-pronounce name. (She didn’t correct the pronunciation, just acknowledged it was hard to pronounce.) The Manager shrugged and said “I dunno.” It was a mystery to all three.

    I was shocked. To have graduated college and never heard of the Renaissance? All three? Ouch.

    That’s the moment when I started to form my opinion about the value of a liberal arts education coupled with a business-related degree versus a a degree that comes from a purely business-related curriculum.

    — Tenacious T.

  46. SocalPizza
    SocalPizza says:


    Clown… we’re not trying to get anyone’s attention. We’re having a conversation. I’m sorry that I can’t fit everything I have to say into ADD-friendly tweets so you can let it go in one ear and out the other on your way to googling Lady Gaga videos. I’m not here to attract new readers. I’m here because I enjoy conversing about accounting-related topics. That’s what we’ve been doing. Your call for brevity is noted, however. I thought I did a good job with my post #43.

    @47 FM

    I don’t really blame the college graduates for not having diverse backgrounds (it was funny reading your description, since I’m an avid fiction reader (HP6 tonight anyone??), have an active passport with multiple stamps, and am bilingual). Young graduates go where the money is. No one’s getting a $10k higher offer just because they’ve travelled Europe and picked up a language. No one’s offering bonuses for avid fiction-readers. No one (and by these no ones, I really just mean none of the large accounting firms) is paying a dime extra for skills that don’t fit in the education section of a resume. If firms wanted to develop a dynamic leadership base, they would be doing what they could to get outside-the-box (pardon the cliche) thinkers. These attributes aren’t low on their priority list; they didn’t even make the list.

Newer Comments »

Comments are closed.