Wrongful dismissals at Big 4 in developing countries to become common practice!

Financial Crisis always make additional emphasis on things which are not noticeable in ordinary times. You will never care for you job as much as in times when half of your colleagues had suddenly found themselves jobless. You will never feel such tremendous desire to concentrate on your personal issues in such a way as during the crisis when all of non-personal live simply doesn't give you any news except for disappointing. You will never understand the true difference between working in an international company situated in a developed country and same company from developing country until the crisis comes.
Couple of things happened around me last week which proved me how significant there can be difference between countries.

The story of lay offs within Big 4.
First thing came after lunch, one day after the Easter. One by one, almost half of my department have been fired. The next day brought some more additional lay offs within other departments. The process itself was looking so dramatically that most of the female part of the team couldn't stop eating pills in order not to get worry:
Step 1. The HR person comes to you sitting in the open space and accompany you to your partner's room.
Step 2. You are told that you are good guy but fired.
Step 3. You go back to you cubicle and start to pack think in order to leave the premises of the office ASAP.
When you see that steps for several times, you simply stop working and smoothly go into stuck and panic waiting for you turn...I enjoyed that stance several times.

What is the peculiarity of a third world? You get no parachutes despite any clauses within you contract. You get your statutory minimum compensation for the lay off and that's all. You are fired without any explanation or grounding for that despite good feedback from you counsellor or mentor which you heard one day before. You will be fired on your vacation having "good surprise" coming back to office.... and more and more.... enough to get the basics of wild capitalism within the young developing economy.

Story about fight incident wrongful dismissal at Big 4.
An auditor from KPMG was invited to partner's office and kindly offered to resign by own wish, offering extra salary as a compensation. When the auditor refused to take this decision and offered 5 month salary compensation, he was told how powerful the company was - which sounded more like a menace. After refusal - the Company representatives started to push/bull verbally on him in order to get his computer. The next day his entrance card has not been working. Once he came into the office - the push machine continued to work on him. He didn't make the decision again this day.
Finally, the third day, partners simply called security and through him away out of office - without compensation, documentation, procedures and explanation.
The auditor is now looking for justice with help of legislation and courts.

That's the way the Big 4 work in developing countries. Wrongful dismissals during the crisis became common practice within the Big 4 putting well-known international companies in line with local half-legal private enterprises.

The story is to be continued....

Sources (only in Russian):
http://blogs.korrespondent.net/users/blog/negnemoy/a9488
http://alexeycus-kpmg.livejournal.com/

Street Accountants - old school, but so tangible!

New Century Trustee Files Suite Against KPMG

KPMG is being sued for “no less than $1 billion in compensatory and consequential damages” by the bankruptcy trustee for New Century Financial.

The trustee overseeing the bankruptcy of subprime lender New Century Financial Corp. filed suit against its auditor, KPMG LLP, claiming that “reckless and grossly negligent audits” helped accelerate the firm’s collapse two years ago.

The lawsuits filed Wednesday said that specialists at KPMG tried to point out errors in New Century’s financial statements but were silenced by the KPMG partner in charge of the audits “to protect KPMG’s business relationship with, and fees from, New Century.”

— KPMG Is Sued Over New Century

KPMG spokesman Dan Ginsburg said, “KPMG acted in accordance with professional standards in New Century, and we will vigorously defend our audit work. Any implication that the collapse of New Century was related to accounting issues ignores the reality of the global credit crisis. This was a business failure not an accounting issue.”

New Century disclosed a total of $10.4 million in fees between fiscal 2002 and 2005.

Fiscal Year	Audit Fees	Total Fees	Fees-to-Revenue
2005	$2,319,347	$3,808,781	0.16%
2004	$1,783,100	$3,576,708	0.21%
2003	$705,900	$1,625,959	0.17%
2002	$355,000	$1,450,000	0.24%
		$10,461,448

Source: AMESRGI