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November 30, 2022

Accounting News Roundup: Andersen vs. Andersen; Celebrities vs. Accountants | 07.06.17

Arthur Andersen & Co.

Andersen vs. Andersen

One funny thing that happened while I was away was Arthur Andersen & Co. accusing Andersen Tax of forgery to lay claim to the Andersen name. It’s not funny in a knee-slapper kind of way, in so much that it’s funny in an “I can’t believe this is still going on” kind of way.

AA&Co. (that’s the French firm, remember) sent Going Concern, Accounting Today, and probably anyone else who would listen, copies of the lawsuit. They claim that Andersen Tax didn’t acquire the rights in the manner that they claim and that the signature of its CEO, Mark Vorsatz, was forged. Mr. Vorsatz denied this and pointed to the legal victories around the world as proof that Andersen Tax is the rightful owner of the firm’s name.

Once again, the highlight is the response of the global managing partner of Arthur Andersen & Co., Stéphane Laffont-Réveilhac. Each time a new development in this story emerges, or anytime his side is dealt a setback, Mr. Laffont-Réveilhac responds with more resolve than before, offering a breathless account quite different from his adversary’s. Here’s what he emailed to Accounting Today:

“Contrary to what Mr Vorsatz asserts, Andersen Tax has never obtained any decision either in the USA or in Brazil. That’s one more lie,” he said in an email Monday to Accounting Today. “The procedure in the US is underway and the US judge, whom I spoke to on the phone a few days ago, is very interested in receiving evidence of Andersen Tax’s fraud and deferred hearing in early September. (FYI, in the US, the procedure at the USPTO is still pending). In Brazil, there has been absolutely no legal process. Only the harassment of our members allowed Mr. Vorstaz to obtain an agreement from our member to refrain from continuing with us. In India, Andersen Tax obtained a first injunction (not a decision), but we were warned the day before the hearing and we were not in the cause. And this injunction was based on trunked [sic?] and forged documents (this is part of the next criminal procedure that we will engage shortly). It is the result of particularly unfair, hostile and aggressive maneuvers. The procedure is now joined to another against a second member of our network in this country. The hearing is next week. Given the seriousness and extent of the fraud organized by Mr. Vorsatz and Alcantara worldwide, we reserve our communication with the judges and prosecutors in the various countries concerned. Lawyers and liquidators will also be affected by this next complaint. Within a few days, a new general criminal complaint with other blatant evidences of the fraudulent actions by Andersen Tax and their representatives will be transmitted to the judges and prosecutors concerned. We will keep you informed of the outcome of this case. We are very serene and not at all desperate because we trust in justice.

Last time I wrote about this saga, I wondered how long AA&Co. could keep this up, what with legal costs and all. Now I can’t help but wonder where the money is coming from to finance this fight. In the furthest depths of my imagination, it’s a cabal of Big 4 bagmen who are trying to prevent the Andersen name from rising to the top of the accounting world again.

Auditing the auditors

Reuters reports that the PCAOB has asked Italy’s Consob for “documentation regarding the audits carried out by PwC on BT in the period 2014-2017.”

Celebrities vs. Accountants

Last month we mentioned that Alyssa Milano sued her accountant for massive “financial woes” that began with a “home improvement debacle.” At the time, I said that “many people have a story that starts this way but that doesn’t end with them suing their accountant.”

Here’s what happens when you do sue your accountant over a home improvement debacle:

[I]in a cross-complaint, [Kenneth] Hellie says that his firm, Hellie Hoffer, issued repeated warnings that the project was going over budget. When the remodeling began in 2013, the budget was $1.1 million. But as it went on, the scope expanded. Hellie contends that Bugliari personally requested and approved each of the additional expenditures, despite Hellie’s advice to rein in the project.

The complaint quotes from a Jan. 16, 2014, communication in which Hellie Hoffer stated the firm was “very concerned” that the project was “way over the original budget,” and advised of the need to “get this project back on track as far as costs.”

The key thing to remember for celebrities who are thinking about suing their accountant is this: the accountant will have the receipts.

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