Spring 1999

MARY PAT MCCARTHY
Vice Chair, Information, Communications & Entertainment
KPMG LLP


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Mary Pat McCarthy is the vice chair of the Information, Communications & Entertainment (ICE) line of business at KPMG LLP. As vice chair, she leads a team of more than 200 assurance, tax and consulting partners, directs KPMG's client-service activities on behalf of electronics, communications, media, and software companies, and provides technical and business guidance to clients in these industries. Her assurance background has given her extensive experience with initial public offerings (IPOs), the Securities and Exchange Commission, and mergers and acquisitions.

Ms. McCarthy joined KPMG in 1977 in Minneapolis and transferred to California's Bay Area in 1984. She was elected a partner in 1987. Most recently, she served for four years as the national director of the software and services segment of the ICE line of business before being appointed ICE vice chair in July 1998. She has been named to KPMG's Leadership 2000 Group.

A frequent speaker at industry forums, Ms. McCarthy has delivered speeches at The Software Publishers' Association Conferences, The Software Entrepreneurs' Equity Forum, and Agenda. She has published several white papers and surveys and is the author of KPMG's newest book, SOP 97-2: Software Revenue Recognition. She has also taught numerous courses and seminars on the implications of this regulation.

Ms. McCarthy's comments on industry issues have appeared in media outlets that include CFO Magazine, C/Net, Financial Times, The Journal of Accountancy, the MSNBC Web site, The New York Times, Software Success, VAR Business, and Taxation for Accountants. She and her family have been featured in Self Magazine.

A South Dakota native, Ms. McCarthy graduated magna cum laude with a B.S. in business administration from Creighton University in Nebraska. She is a Certified Public Accountant (CPA) and has completed the KPMG/Wharton School International Development Program. She has served on the board of directors of the Leavy Graduate School of Business at Santa Clara University and has been a member of the Tech Museum of Innovation board of directors in San Jose for six years.
 

KPMG's Mary Pat McCarthy: Visions for Accounting Industry's Future

"Being back in an academic environment is like fudge for the soul," Mary Pat McCarthy told her audience of undergraduate auditing students during her morning lecture as Lubin's most recent Executive in Residence on March 25th. She spent the day on the New York City campus. As the first woman vice chair and first woman named to the management committee at KPMG LLP, Mary Pat McCarthy described her own career beginnings in the field of accounting at a time when women made up a very small minority of practicing CPAs . "In the 70s, there were only about 600 women CPAs. Now, approximately half of all CPAs are women," she explained.
 

  [Mary Pat McCarthy]
Executive in Residence Mary Pat McCarthy entertaining questions from the luncheon guests.

Crisis in the Accounting Profession
Although the number of women CPAs has grown significantly in the last two decades, McCarthy emphasized that a shortage of accounting students continues to impact the industry. "In the past twenty years, the number of public companies has increased by thirty percent, but the number of accounting graduates has remained the same," she said, adding that Wall Street is an attractive alternative for students who might otherwise have pursued accounting. In light of this, however, McCarthy pointed out that current accounting students have increasing opportunities in the field, as starting salaries and signing bonuses are rising due to this shortage. "You're in a great place at a great time," she told practice of hiring students in their junior year as interns. Last year alone, KPMG hired over 550 undergraduate interns and plans to hire 1,000 graduates this year.

In addition, McCarthy stresse d the excitement she has experienced throughout her career, as she described travel opportunities and meetings with industry giants that such a profession affords. "I have been blessed to have a really fun career, one that is not monotonous at all," McCarthy said, adding, "Hopefully you can appreciate that a career in accounting can be exciting for you as well."

The ICE Segment at KPMG
The Information, Communications & Entertainment (ICE) segment is one of several vertical lines of business that KPMG specializes in. As the recently appointed vice chair of the ICE segment, McCarthy explained that KPMG's assurance, tax, and consulting partners must recognize the issues particular to their areas. Their expertise amounts to priceless information for their clients, as "KPMG accountants are an inch wide and a mile deep in what they know."

Future Trends in the Industry
According to McCarthy, the auditing business has been experiencing dramatic change recently, as it evolves to meet the demands created by new technologies. In her lecture to the auditing students and at the luncheon with administrators, faculty, students, and invited guests that followed, McCarthy described the impact that the Internet has had "We're making whole new industries out of auditing on the Internet, as new applications for traditional types of auditing continue to be explored." Examples of these new applications include Web site certification and security firewalls to protect company databases.

Another innovation that McCarthy believes will be utilized in the very near future is "virtual auditing" software, which will allow users to obtain audit information in real time from remote locations on demand. "The 'Holy Grail' is to get to the point where on any day, you can render an auditing opinion on any company from any location," she said.

Citing a recent Blue Ribbon Task Force Report, which contains recommendations for improving the quality of auditing, McCarthy said she firmly believes that company auditors should have stronger reporting requirements to the audit committee. She added that "soon we'll see auditors reporting directly to the audit committee instead of the management committee, which will be a big change in our business."

Mary Pat McCarthy concluded her meeting with the auditing class by stressing the importance of excellent communication skills and initiative. Most importantly, however, she advised her audience of future accountants to "work hard, never lose your integrity, and always have enthusiasm for your job."

In the afternoon, McCarthy met with a group of students from the Iota Lambda chapter of Beta Alpha Psi, the accounting honor fraternity. She held the students in thrall as she described how she was in the "right place at the right time" to achieve her current position at KPMG.

Lisa Jackson, vice president of Iota Lambda, commented that "McCarthy has it all. She is breaking new ground for women in the accounting industry and is still able to enjoy a full family life with an extremely supportive husband, and two chidren."