Monday Mashup – No Regrets

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

@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 – 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.

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.

@7 – spot on.

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.

@socal — how is skeptical spelt in the UK? And let a person make a typo — be real.

@ 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. 😉

@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.”

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.

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!

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

@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.

@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.

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).

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.

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.

@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?

@39

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.

@40

And yet here you are.

@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.

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.