September 25, 2022

Accounting News Roundup: BDO, QuickBooks, STEM and Tax Evasion | 05.24.16

BDO and QuickBooks

Over the last few years, we've seen the Big 4 firms sidle up to various technology companies. PwC and Google. Deloitte and Dell. EY and Microsoft. KPMG and IBM.  

BDO is now in on some of this action, as Intuit announced a new partnership with the firm yesterday:

Intuit announced a new strategic alliance with accounting and consulting firm BDO USA for the firm to use QuickBooks Online as a technology partner, providing online accounting services to its small business clients.

BDO is expected to launch a new cloud business management solution for clients later this fall, and as part of its small business component, BDO will partner with QuickBooks to offer clients online tools and processes for their accounting.

I guess I'm a little confused by this. BDO is a Top 10 firm and has over $1 billion in US revenue, serving some very large businesses. QuickBooks, on the other hand, is small business accounting software. Sure Snapchat and all kinds of other growing companies use QB, but It just seems like an odd match given BDO recent growth. But what do I know, everyone seems happy:

“Small businesses are already very familiar with QuickBooks and that made QuickBooks Online the clear choice for us to use with our emerging clients,” stated Kelly Johnson, partner and national practice leader for business services and outsourcing at BDO USA. “We look forward to working with the Intuit team in converting thousands of our existing clients to QuickBooks Online and providing clients with an enhanced experience in accessing and leveraging their financial data.”   

Thousands of BDO clients are still on QuickBooks Desktop? Yikes. Did BDO just tell them about the internet?

Accounting and STEM

How many people get into accounting because they like math? Um, none? Perhaps the better question is, "How many people got into accounting because they couldn't cut it in math?" I, for one, remember telling many people that I liked "numbers" but hated "math." I don't think this an uncommon experience. Also, I don't think it's incorrect to suggest that accounting is not math. Accounting contains a fair amount of arithmetic, but it leaves mathematics to the rocket scientists. 

Amy Pitter, president and CEO of the Massachusetts Society of CPAs, makes the case that accounting is math enough:

Much of opportunity in the innovation economy goes to the mathematically inclined. Research scientists. Data analysts. Robotics engineers. We just can’t get enough of them.

But let me suggest another high-demand, math-centric occupation that may surprise you: Accounting. It is, in fact, one of the hottest fields for young graduates in the Commonwealth. Why accountants? You can’t have an innovation economy, or anything resembling a healthy economy, without them; accountants set up the financial controls and systems that help companies prosper. And they are in the middle of the new economy, by, for example, auditing companies for acquisition and providing the financial data for initial public offerings, among many other critical services.

In short, as Massachusetts grows, so does its accounting sector. And as we look to create more pathways for less advantaged students to join the STEM (science, technology, engineering, and math) economy, accounting holds the potential to be a bridge to have them play a role in the innovation that’s driving Massachusetts’ growth.

So, accounting is math by association…I guess? Or, without accounting all those STEM people would crater under all the rules and compliance? Anyway, here's what she's driving at:

As Massachusetts business and government leaders look to connect students with the many possibilities in STEM careers, accounting should be part of the mix. Given the clear demand, an Advanced Placement course in accounting deserves a place in the high school curriculum.

Oh! Accounting wants to be in the STEM club. Sure, if you can't beat 'em, join 'em, right? It's hard to argue with that logic. Although I do not understand this:

Accounting also holds potential to diversify math-oriented fields, which tend to be predominately white and male.

If the accounting overlords want to jump on the STEM bandwagon, fine, go right ahead. But to suggest that accounting could help with STEM's lack of diversity? That seems like a stretch.

Elsewhere in accounting cheerleading: Deloitte's Joseph Ucuzoglu wants grads to work at an audit firm. And elsewhere in Bay State news: Massachusetts Considers a Millionaire Tax.
 

Tax evasion

Over the last couple of years or so, we've learned a fair amount about how corporate multinationals and wealthy people (legitimate or otherwise) go to great lengths to avoid taxes.  And while dubious, there's technically nothing illegal about their methods. Tax evasion, on the other hand, is a definite no-no, and is still a thing that people do, quite brazenly at times. Like Morris Zukerman, a former Morgan Stanley investment banker who's alleged to have evaded $45 million in income and sales taxes:

Zukerman failed to report profits from the sale of an oil company, lied to his accountants, created phony and backdated documents and shipped paintings to addresses in Delaware and New Jersey to avoid New York state sales tax on artwork that hangs in his Park Avenue duplex, according to the indictment. He also took charitable tax deductions for donations he didn’t make, it says.

Zukerman, with a full head of white hair and wearing tortoiseshell glasses, pleaded not guilty in a Manhattan courtroom Monday. The judge approved his $2.5 million bond, secured by works in his art collection. The government had already taken $1 million in art from Zukerman during a search, according to Stanley J. Okula, the prosecutor at the hearing. Zukerman’s attorney, James Bruton of Williams & Connolly LLP, said that he was in talks with the government to resolve the case.

“Morris Zukerman cheated on virtually all of his various tax obligations,” Manhattan U.S. Attorney Preet Bharara said. “To top it off, when the IRS auditors examined his returns, Zukerman allegedly schemed to defraud and obstruct the IRS auditors who were examining his false tax returns.”

Isn't it a little odd that a person who once "spent $52 million to purchase 73 paintings," didn't take advantage of the tax avoidance industry? Why go to all the trouble of lying to your accountants, lawyers and the IRS when you could pop down to Panama City and set up a maze of shell companies? Zukerman's UK company listed him as a resident of Monaco, for crying out loud. At any time he could've flown to Luxembourg City in the morning, had all of his business dealings properly shielded and made perfectly legally to avoid much of his taxes and be back before lunch. It's all very strange.

Previously, on Going Concern…

In Open Items, someone with SALT experience wants to help a Federal tax team. And someone else believes that Becker's feeding us a bunch of BS.

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