September 27, 2021

Accounting News Roundup: KPMG Defections; Deloitte’s AI; Suspicious Firm Names | 03.09.16

KPMG Partners Quit After A&M‎ Bid Snubbed [Sky News]
As we've noted, KPMG's UK firm has had some troubles of late and have told some partners that their services are no longer needed. Well, apparently some partners' services are needed and they decided not to wait around for the other shoe to drop:

A trio of senior partners at KPMG‎ have quit after the firm snubbed a surprise takeover offer from rival professional services firm Alvarez & Marsal (A&M) for part of its advisory business.

Sky News understands that Richard Fleming, the UK head of advisory; Mark Firmin‎, the UK head of restructuring; and Roger Bayly, who leads KPMG's corporate turnaround business, have resigned to take up roles at A&M.

Their departures come ‎at a challenging time for KPMG, which is shedding dozens of partners in an attempt to improve its commercial performance.

I must say, that's a pretty intrepid move on A&M's part. You have to wonder if that was just a clever bit of trolling disguised as a hostile offer. But the fact that three KPMG partners — including the head of advisory! — said, "That's actually not a bad idea," and left says something about the situation in the Royal House of Klynveld. 

Deloitte's AI play
Yesterday, while KPMG was basking in the gaze of Auditor Watson, Deloitte announced their own artificial intelligence partnership with Kira Systems:

The alliance combines Deloitte's business insights in cognitive technologies with Kira Systems' advances in machine learning in creating models that quickly "read" thousands of complex documents, extracting and structuring textual information for better analysis.

This capability holds broad applications for the marketplace, said Craig Muraskin, Deloitte LLP, managing director of Deloitte's U.S. Innovation group, as the extensive review of documents underpins many pressing business activities, including investigations, mergers, contract management and leasing arrangements.

"Wading through miles of corporate jargon hunting for key words and patterns can consume considerable time and resources," said Muraskin. "By teaming with Kira Systems, we can help organizations reduce their review time while redeploying talent to higher value activities – let's save our eyes for more strategic matters."

Deloitte's been using this technology for about a year already in audit and consulting under the cutesy names of "Argus" and "D-ICE," respectively. But if I didn't know any better (and I probably don't), this technology could be useful for wading into legal services. I mean, aren't lawyers the ones "wading through miles of corporate jargon"? I know what Cathy Engelbert said but as someone else has said, "I'm just asking questions."

Billings accountant admits stealing money from 2 corporate clients [BG]
I remember learning about caveat emptor in high school, however, I don't recall any specifics about signs for what to beware. I think if my teacher had told us to beware of businesses with names that suggest superiority, I would've remembered that. Take this example:

A plea agreement calls for the defendant, Michael Leonard Wombolt, 35, to pay restitution totaling $166,127 to two corporate clients and to various former individual clients.

The plea deal also calls for seven other wire fraud counts to be dismissed at sentencing.

Wombolt, who owned A+ Accounting and Consulting, told U.S. Magistrate Judge Carolyn Ostby he was having trouble finding jobs because of the case but that he had a job in a different career lined up after the case and sentence is completed. He didn’t identify his new job.

Maybe it's just me, but there's something suspicious about a firm called "A+ Accounting and Consulting." If he had named his firm "100% Accurate Accounting, LLC" or "Perfect Tax Returns, Inc." I'd have similar suspicions. In any case, Mr. Wombolt and his A+ firm ripped off two clients in the same year he was voted "best accountant" by Billings Gazette readers. So I guess suggesting that you're the best through your name and your words can fool a significant number of people. Related: Donald Trump wins Michigan, Mississippi GOP primaries.

Previously, on Going Concern…
Accountants are terrible on the phone. And on Open Items, someone is considering M&A due diligence.

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