Macy's is clawing back bonuses paid to executives after an accounting error.
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Some Macy's executives have to pay back bonuses as a result of an accounting scandal.
Macy's overstated one of its earnings metrics in 2023, leading to the inflated bonuses.
The executives owe Macy's over $600,000 as a result, the retailer said.
Macy's executives will have to pay back hundreds of thousands of dollars in bonus payments as a result of an accounting scandal, the department store firm said on Tuesday.
The retailer overstated one of its earnings measures by $81 million in 2023, the company said in a filing with the SEC. That metric influenced how much Macy's executives were paid in bonuses the following year.
As a result, some execs will have to pay back a cumulative $609,613 in cash bonuses that the company awarded them through the end of 2024, according to the filing.
The company has already reclaimed some of the bonus payments and had to collect the remaining $352,093 as of April 1, the filing said. Macy's "will seek to recover the remaining amount of the erroneously awarded compensation" from the executives during the company's 2025 fiscal year, the company said in the SEC filing.
A Macy's spokesperson declined to comment in response to questions from Business Insider, including which executives had to pay back bonuses.
Last fall, Macy's delayed its third-quarter earnings report after it said that an employee hid more than $150 million in expenses. The company said at the time that one employee who oversaw expenses for small package delivery was responsible for the incorrect figures.
Accounting experts told BI then that the problem likely wasn't just bad accounting but the failure of multiple internal controls at Macy's.
In December, Macy's corrected some of its past financial figures, according to a filing. The department store chain said that its net income for 2023 was 57% lower than it initially reported, for example.
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Supermicro filed annual financial reports late after an accounting dispute with ex-auditor EY.
EY dropped Supermicro as a client after raising concerns about its internal financial governance.
Supermicro said that after it replaced EY with another accounting firm, no issues were found.
Supermicro, the AI server manufacturer and Nvidia partner, has met the deadline for a late filing of its annual financial reports, and is blaming its former auditor EY for the delay.
The tech company, which does business as Supermicro, filed its overdue 10-K annual filing for fiscal 2024 and the first two quarterly reports for fiscal 2025 on Tuesday with the Securities and Exchange Commission.
The filings came months late, putting Supermicro at risk of being delisted from the Nasdaq 100 for failing to meet compliance requirements. The company was granted an extension by Nasdaq in December.
"The Company is now current with its SEC financial reporting obligations," Supermicro said in a press release.
In an explanatory note included in the filing, Supermicro blamed its previous auditor, EY, for the delay, saying that the reports were late "due to EY's stated concerns and subsequent resignation."
According to the filing, theΒ Big Four firmΒ dropped Supermicro as a client in October 2024 after raising concerns to the board in July about the governance and transparency of the company's financial reporting and the integrity of its senior management.
In August 2024, Hindenburg Research, a now-defunct US short-seller, said it found "glaring accounting red flags" in Supermicro's financial practices. Hindenburg's report cited "evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues."
"We disagreed with EY's decision to resign as our independent registered public accounting firm for a number of reasons," Supermicro said in the filing.
Its reasons included that a number of audit procedures were left incomplete when EY stepped down and that a special committee set up to investigate concerns was still conducting its review.
The server manufacturer also addressed the Hindenburg report in the filing. Supermicro denied any wrongdoing and said that the report "contained false or inaccurate statements about us, including misleading presentations of information we previously shared publicly."
Supermicro, which has a market capitalization of just over $30 billion, appointed BDO, a Belgian-headquartered firm, as its new accountant in November.
BDO found that the financial statements "present fairly, in all material respects, the financial position of the Company," according to the filings.
The special committee's review "did not give rise to any substantial concerns about the integrity of our senior management or the Audit Committee, or their commitment to ensuring that our financial statements are materially accurate," Supermicro said in the SEC filing.
EY declined to comment.
Charles Liang, founder, president, and CEO of Supermicro, called Tuesday's filings "an important milestone" for the company.
Supermicro's stock soared by more than 12% on Wednesday after it made the filing and regained compliance with Nasdaq's listing requirements.
Supermicro was an early launch partner for Nvidia, AMD, and Intel for CPUs and GPU accelerators and has since ridden the wave of AI hype to success.
The server manufacturer has seen its share price explode over recent years, climbing more than 1,000% since the start of 2022.
Supermicro's shares are up 67% to date this year. The filings show that sales more than doubled from $7.12 billion to $14.9 billion in 2024.
A clearer picture of Bench's downfall is emerging thanks to new bankruptcy filings, which show the accounting startup burned $135 million before collapsing.
Mike Manalac left his public accounting career to pursue a career in Big Tech.
Mike Manalac
Mike Manalac, a CPA, found audit work boring and unfulfilling, like he was a "glorified box-checker."
He left public accounting for a more exciting career in Big Tech, as an accounting manager at Google
Manalac now loves his work and perks at Google but he says Big Tech has some drawbacks.
After eight years as a certified public accountant, Mike Manalac decided to seek a more exciting career path β one in Big Tech.
Manalac, now 39, started his career as an auditor with CohnReznick, a top 20 firm, where he spent eight years. This was followed by a brief contract stint at Big Four firm PwC. From there, he took a path through the Fortune 500 with an accounting role at Walmart before landing an accounting role at Google.
"They say the grass isn't always greener, but in my case, it was," Manalac told Business Insider.
He was happy but found the work boring
For close to a decade, Manalac was happy working at big accounting firms β the business travel, meeting clients, and seeing the inner workings of different companies. "I liked the social events on the company dime, the generous vacation policy, top-notch training, and the team camaraderie that came with working together in the trenches," he said.
However, he found the audit work itself pretty boring β "mind-numbing grunt work," he called it. "I'd go through long periods where I felt like a glorified box-checker," Manalac said.
One of the worst parts of the job was completing timesheets β what he called the "never-ending chore" of tediously recording how he spent every six minutes of his workday.
Since the firms' clients only paid for the audit work because their investors and regulators required it, Manalac found the work unfulfilling. "I'd spend hours reviewing investment and loan documents for my banking clients, which felt like watching paint dry in PDF form," he said. It was even worse during the industry's busy season β January to April.
If Manalac was lucky, he'd get to work on an audit of what he considered to be a cool company, like real estate clients developing entertainment districts or clients that owned train lines and helicopters. But even then, he felt like he was on the outside looking in.
"I eventually realized that I'd be happier if I worked for that [kind of] company instead of auditing it," he said.
Getting a taste of the "cooler side" of accounting
Manalac decided to leave behind traditional accounting firms and instead pursue internal accounting roles in Fortune 500 companies, with the ultimate goal of securing a position in Big Tech.
In 2016, he kicked off his plan with a five-month contract position at PwC in San Francisco, to put himself "at the epicenter of premier job opportunities for when I was ready to change paths," Manalac said.
During that time, Manalac applied to dozens of roles in San Francisco and Silicon Valley β but only at household name companies that he thought "would be cool to work at." His interview list included Salesforce, Uber, and Pandora Media. He eventually accepted an offer to join Walmart's corporate accounting team, supporting the eCommerce business.
"This was the first time in my career where 40-hour workweeks were the norm, and it was glorious," he said. Manalac found the online shopping business "much more relatable" than his audit work.
"The company was on an acquisition spree, which meant a flurry of exciting accounting projects to work on," he said. "I had a sense of pride in my work that I didn't have at the big accounting firms."
With no more dreaded busy seasons or daily timesheets, Manalac was hooked. "At Walmart, I was busy, but everyone still left at 5 p.m. and the work environment was much more chill compared to public accounting," he said. "I'd gotten a taste for the cooler side of accounting and I wanted more.
Both the work and the perks are great
Big Tech was still on Manalac's radar, so he started interviewing for companies like Amazon, Meta, and Google. After a year of applying and messaging recruiters, he finally scored an interview at Google in the summer of 2017.
Two months and five rounds of interviews later, Manalac landed a job at Google, where he is now an accounting manager.
While he still spends his fair share of time in spreadsheets, he spends much of his time doing data analysis, writing SQL scripts, and building workflows to automate manual accounting processes. He spends less time doing repetitive tasks and more time working with cross-functional teams on new business initiatives.
"I get a kick out of working on products like Search, YouTube, and other apps that pepper my phone screen," Manalac said. "My success is no longer measured by billable hours like in public accounting either β it's measured by the impact of my work."
When he needs a break, some of Manalac's favorite on-campus options include hitting the gym, popping into the arcade, booking a massage, or hitting golf balls in the simulator.
Then, there are the extravagant work parties. "Museums are rented out for Christmas, concert venues for Halloween, and I've even had team outings that had me hopping on a plane for a day at Universal Studios," said Manalac.
And while he enjoyed domestic travel as an auditor, it's been overshadowed by his global travel experiences at Google to places like Singapore and Switzerland.
"The big accounting firms have generous PTO, but there are few companies outside of Google that would've allowed my three-month sabbatical to travel Europe with my family like I did in 2024," he said.
Accounting doesn't have to be a boring career path
Going from a Big Four accountant to one in Big Tech does have some drawbacks, though, said Manalac.
"In public accounting, you're almost guaranteed a promotion every few years, which isn't the case in Big Tech and other Fortune 500 companies," he said. "Additionally, when you work for an accounting firm, you're the golden goose that generates revenue for the company, but as an accountant in Big Tech, you're just a cost to the business." This means that accounting teams are "perpetually understaffed," he added.
But no job is perfect, and all things considered, Manalac feels that an accounting role in Big Tech offers one of the best career paths for an accountant.
"Most people think of accounting as a boring career, but that doesn't tell the whole story," he said.
If you landed a Big Tech after working in a different field and would like to share your story, email Jane Zhang at [email protected].
At 24 years old, Pryce Yebesi already has one exit: selling his crypto invoicing company Utopia Labs to Coinbase for an undisclosed amount.Β Some founders donβt just have one company in them. On Monday, Yebesi announced the launch of his new company, Open Ledger, which embeds automated accounting software into products that enterprises and small [β¦]
Friday, December 27, was supposed to be the start of a relaxing holiday weekend. But it was chaos for thousands of small business owners who use Bench, an accounting and tax startup based in Canada that raised $113 million from investors like Bain Capital Ventures and Shopify. That morning, they found themselves unable to log [β¦]
Bench, a Canada-based accounting startup that offered software-as-a-service for small and medium-sized businesses, has abruptly shut down, according to a notice posted on its website.Β Β βWe regret to inform you that as of December 27, 2024, the Bench platform will no longer be accessible,β the notice reads. βWe know this news is abrupt and may [β¦]
Accounting firms are struggling to adopt high-tech solutions. Thatβs according to a survey earlier this year from Rightsworks, which found that, while 88% of firms believe tech has had a positive impact on their efficiency, 60% are suffering from disconnected systems, inconsistent processes, and a lack of standardized workflows. Startups like Aiwyn are trying to [β¦]
Even an entry-level consultant at the "Big Four" can earn over $200,000.
Luis Alvarez/Getty Images
The "Big Four" accounting firms employ about 1.5 million people worldwide.Β
Many of these employees make six-figure salaries and are eligible for annual bonuses.Β Β
Business Insider analyzed data to determine how much employees are paid at these firms.Β
The so called "Big Four" accounting firms β Deloitte, PricewaterhouseCoopers (PwC), KPMG, and Ernst & Young (EY) β are known for paying their staff high salaries.Β
An entry-level consultant who just graduated from business school can make over $200,000 a year at the four firms when you include base salary, bonuses, and relocation expenses.Β
Several of these firms have faced layoffs and implemented hiring freezes over the past year as demand for consulting services has waned. Still, they're a good bet for anyone looking to land a six-figure job straight out of school.Β
Business Insider analyzed the US Office of Foreign Labor Certification's 2023 disclosure data for permanent and temporary foreign workers to find out what PwC, KPMG, EY, and Deloitte paid US-based employees for jobs ranging from entry-level to executive roles. We looked through entries specifically for roles related to management consulting and accounting. This data does not reflect performance bonuses, signing bonuses, and compensation other than base salaries.
Here's how much Deloitte, PwC, KPMG, and EY paid their hires.Β Β
Deloitte paid senior managers between $91,603 to $288,000
Deloitte offers its top manager salaries close to mid six figures.
Artur Widak/Getty Images
With 457,000 employees worldwide, Deloitte employs the most people of any of the 'Big Four.' It pulled in close to $64.9 billion in revenue for the 2023 fiscal year, marking a 9.4% increase from 2022.
Deloitte did not immediately respond to a request for comment on its salary data or 2024 hiring plans.
Here are the salary ranges for consulting and accounting roles:Β
Analyst:Β $49,219 to $337,500 (includes advisory, business, project delivery, management, and systems)
Senior business analyst: $97,739Β
Audit and assurance senior assistant: average $58,895
Consultant: $54,475 to $125,000 (includes advisory, technology strategy, and strategic services)Β Β
Global business process lead: $180,000Β
Senior consultant: average $122,211
Manager: average $152,971
Tax manager: average $117,268
Senior manager:Β $91,603 to $288,000Β Β
Managing director: average $326,769
Tax managing director: average $248,581
Principal: $225,000 to $875,000
Principals at PricewaterhouseCoopers (PwC) can make well over $1 million.
PwC.
Danish Siddiqui/Reuters
PricewaterhouseCoopers (PwC) is a global professional services firm with over 370,000 employees worldwide. The firm reported a revenue of more than $53 billion for the 2023 fiscal year, marking a 5.6% increase from 2022.Β
PwC did not immediately respond to a request for comment on its salary data or 2024 hiring plans.
Here are the salary ranges for both consulting and accounting roles.Β
Associate: $68,000 to $145,200
Senior associate: $72,000 to $197,000Β
Manager: $114,300 to $231,000
Senior manager: $142,000 to $251,000Β
Director: $165,000 to $400,000Β Β
Managing director: $260,000 to $330,600
Principal: $1,081,182 to $1,376,196
KPMG offers managing directors anywhere between $230,000 to $485,000
KPMG managing directors can earn close to half a million.
Sean Gallup/Getty Images
KPMG has over 273,000 employees worldwide. The firm reported a revenue of $36 billion for the 2023 fiscal year, marking a 5% increase from 2022.Β
KPMG did not immediately respond to a request for comment on its salary data or 2024 hiring plans.
Here are the salary ranges for consultants, accountants, and leadership at KPMG.Β
Associate:Β $61,000 to $140,000
Senior associate:Β $66,248 to $215,000
Director: $155,600 to $260,000
Associate director:Β $155,700 to $196,600Β
Specialist director: $174,000 to $225,000
Lead specialist:Β $140,500 to $200,000
Senior specialist:Β $134,000 to $155,000
Manager:Β $99,445 to $293,800
Senior manager:Β $110,677 to $332,800
Managing director:Β $230,000 to $485,000
Statisticians at Ernst & Young (EY) make salaries ranging between $66,000 to $283,500.
EY spends $500 million annually on learning for its employees.
TOLGA AKMEN / Contributor / Getty
EY employs close to 400,000 people worldwide. For the 2023 fiscal year, the firm reported a record revenue of $49.4 billion, marking a 9.3% jump from 2022.Β
The firm did not immediately respond to a request for comment on its salary data or 2024 hiring plans.
Here are the salary ranges for consultants, accountants, auditors, and chief executives at the firm:Β
Accountants and auditors: $54,000 to $390,000
Appraisers and assessors of real estate: $166,626 to $185,444
Computer systems analyst: $62,000 to $367,510
Management analyst: $49,220 to $337,500
Statistician:Β $66,000 to $283,500
Financial risk specialist: $62,000 to $342,400
Actuaries: $84,800 to $291,459
Economist: $77,000 to $141,000
Logisticians: $72,000 t0 $275,000
Mathematicians: $165,136 to $377,000
Computer and information systems manager: $136,167 to $600,000
Financial manager: average $320,000
Aman Kidwai and Weng Cheong contributed to an earlier version of this post.Β
Macy's found a significant accounting error from an employee.
Michael M. Santiago/Getty Images
Macy's said it discovered an employee intentionally made accounting errors totaling $132 to $154 million.
Auditing experts told BI the available evidence suggests a failure of internal accounting controls.
They said the issue should have been caught much earlier βregardless of any single employee's intent.
In accounting as in air travel, a common saying applies: "If you see something, say something."
Following the news that Macy's discovered a sizable error in its financial records, auditing experts told Business Insider that the company must now explain how its controls broke down.
The retailer said Monday that it was delaying its quarterly earnings release after discovering an employee deliberately made an accounting error totaling between $132 million and $154 million over three years.
Even in a situation where someone intentionally introduced errors to a company's books, former KPMG partner Jerry Maginnis said, "Your system of internal control should have caught it."
Since retiring from the accounting firm in 2015, Maginnis now serves on the audit committees of several companies and is an executive in residence at Rowan University. He said he never handled financial records for Macy's, which has been audited by KPMG since 1988.
"Somebody else should have been reviewing and catching it, and so this was a breakdown in internal control as well as bad accounting," Maginnis told BI.
Macy's said it fired an individual who "intentionally made erroneous accounting accrual entries" and launched an investigation. The employee had "responsibility for small package delivery expense accounting," the company said.
The retailer said that it spent $4.36 billion on small package delivery expenses in the three years that the error had been taking place, making the error less than 5% of that line item. According to Macy's press release, no money was improperly spent.
The employee's potential motives and exactly what went wrong is likely to be the subject of investigation by Macy's audit committee, KPMG, and others, accounting experts told Business Insider.
The last time Macy's reported a major accounting issue was in 2006 when the company restated financials over a "cash flow classification," according to Ideagen Audit Analytics, a research and data provider.
Monday's announcement preceded Macy's regularly scheduled third-quarter earnings report. The company said its next update will come on December 11.
"If they weren't going to delay their earnings, we probably never would've heard about this," said Michelle Leder, the author of a book about reading financial statements who now runs the website Footnoted, which analyzes securities filings. "You could argue that maybe they've already disclosed more than they're required to disclose."
Without more details, the accounting experts who spoke to BI said it is hard to understand exactly what happened.
One possible explanation may be as simple as "sometimes accountants make mistakes," said Francine McKenna, a former accounting professional who now publishes The Dig newsletter about accounting topics and auditing firms.
"Sometimes errors accumulate, and then what happens is you go into preservation mode," she added. "You just keep perpetuating the error in order to hide it because you don't want to raise your hand and say, 'An error happened, I couldn't get it fixed for a year and a half, and now the number is really big.'"
While stronger internal controls could shift some of the onus off of individuals having to make that choice, Maginnis also said that the accounting profession depends on individuals having a personal commitment to tell the truth at all times.
Regulations set by the Sarbanes-Oxley Act, which require public companies to maintain effective internal controls, are intended to catch mistakes like this much earlier and provide an avenue for audit firms to issue warnings about company controls.
The pressure will now be on Macy's auditor, KPMG, to show that it is appropriately scrutinizing Macy's accounting practices and controls, McKenna said.
"I wouldn't be surprised if you'll see a material weakness in internal controls because something is not working here," McKenna said. "There was a hole somewhere."
