Big 4 challengers
Back in August, we talked about a report out of the UK that the former head of Deloitte there, John Connolly, was building a new professional service firm, one "to create a credible long-term challenger to the big four accounting firms." It seemed silly because building a mega accounting firm is a bit of a fool's errand, but on the other hand, GO FOR IT, MAN! I think we'd all enjoy watching a new competitor afflict the Big 4 in the marketplace. Plus, John Connolly seemed liked the type of guy — connections, know-how, doesn't need the money — who'd want to take a shot at this.
Unfortunately, either that was never was Connolly's intention or he changed his mind. In this interview he shoots down the rumor about the plans for Cogital, the new firm:
"We are not trying to deal with clients at that level. Our focus is primarily providing advice to smaller firms.
"We will provide some outsourcing for companies but not the kind of companies that Deloitte or PwC deal with. We have no plans to be become a big audit firm."
All the chatter around the idea "led to some awkward conversations" but Connolly claims that the new venture will be a lot of small firms "under one umbrella":
“We will be quite large and international but focused on that really important segment of the market that is vital – smaller businesses [and] entrepreneurial businesses.
“While we want to apply technology, you have to deliver locally. You look at your adviser and want someone you can be in contact with. You always want to have that principal relationship with that partner or director. We would always have lots and lots of local offices,” he said.
Maybe I'm wrong but It sounds like a regular ol' firm network. Connolly claims Cogital will create "a different kind of firm" with a "technology twist" and I'm officially disappointed. Call when you're giving Bob Moritz nightmares.
Accountants behaving badly
Here's a story about Long Island CPA Abraham Grossman who created a person out of thin air to get another helping of government benefits:
Investigators found that Grossman, while working as a CPA and collecting Social Security retirement benefits, created a false identity by obtaining a second Social Security number and New York State driver’s license under an assumed name. With those documents, along with fictitious former employment at four different businesses, he fraudulently obtained additional Social Security retirement, unemployment insurance and public assistance benefits.
It was after that investigation that officials discovered that Grossman had stolen the $440,000 check [from a client].
“In a brazenly greedy scheme, this defendant manipulated and defrauded seemingly every public benefit program he could find to supplement his comfortable lifestyle,” [New York State Inspector General Catherine Leahy] Scott said, in a statement.
I'm sure there's no shortage of retirement-age CPAs out there who relish the idea of ripping off the federal government to ensure that they get a return on all the taxes they've paid in over the decades. Fortunately, cooler heads tend to prevail in these situations and no crimes are committed. And most don't keep $440k checks that belong to clients.
Accountants behaving stupidly
I suppose you could argue that "Accountants behaving badly" is not all that different from "Accountants behaving stupidly" but this story seemed worthy of its own separate section
A lonely beancounter has been jailed after he fell for what appears to be a classic Nigerian email scam, and conned £150,000 out of a friend so he could bankroll his fake damsel in distress.
Brian Ridpath, of Willesborough, Kent, England, was fooled into believing the story of Lisa Johnson, who emailed him X-rated snaps and asked for emergency funds. Johnson – or, far more likely, someone pretending to be the young woman – at one point claimed Nigeria's corrupt regime had seized her passport. She also begged the single 79-year-old chartered accountant for money to escape her situation.
As his local paper put it rather bluntly, the mystery woman "used her sex appeal" to dupe Ridpath.
The Nigerian email scam is like the digital version of 3-card Monte. Everyone knows it's a scam, so why the hell are you playing along?! And then ripping off your friend so you can keep playing? I feel like learning these sorts of things needs to be part of elementary education programs.
Has Donald Trump released his tax returns?
Nope! And good lord, what is this:
A new undercover video claims to expose direct links between the Hillary Clinton campaign and outside groups promoting her candidacy, James Rosen reported on Special Report.
The video, from controversial activist James O'Keefe's 'Project Veritas Action', appears to show Democrat operatives discussing involvement in a string of "Donald Duck" protests against Donald Trump: urging the Republican nominee to release his tax returns.
Agitators dressed like Disney's Donald Duck protested at Trump rallies and also confronted supportive Congressmen like New York State's Peter King, Rosen said.
They would often chant statements to the effect of "Donald ducks his taxes" and "Donald, stop ducking" at the Republican's events.
"The Donald Duck agitators, if funded by outside groups but controlled in some measure by the Clinton Campaign or Democratic National Committee, could run afoul of laws that govern public communication against a candidate," Rosen reported.
Previously, on Going Concern…
I wrote about CPA firms that go out of their way to discourage employees from becoming CPAs. And in Open Items, someone wants to know about differences between EY and PwC in Phoenix.
In other news:
- A Chilly Reaction to AT&T-Time Warner Deal
- 8% of public companies haven't started implementing the new revenue recognition rules.
- Why SMB CFOs Should Care About Transfer Pricing
- Chicago Tax Lawyer Reaps $30 Million From 900 Whistleblower Lawsuits Against Internet Retailers For Failing To Collect State Taxes On Purchased Goods
- People are confusing Bill Murray and Tom Hanks again
Get the Accounting News Roundup in your inbox every weekday by signing up here.