September 24, 2022

Accounting News Roundup: PwC’s New Global Chair and Material Weaknesses | 03.07.16

BoMo
Bob Moritz will be the next global chairman of PwC, effective July 1st, the firm's New Year's Day. He succeeds Dennis Nally, who is retiring after a 42-year career with PwC. Moritz joined P. Dubs in 1985, so if you'd like to fill those shoes one day, best to dig in.

There's nothing too surprising about this announcement, BoMo always seemed to be the heir apparent. Here are some words:

“Bob brings a strong sense of purpose, strategic leadership and business insight. His clear focus on all stakeholders is critical to the successful future of our worldwide network,” said John G Maxwell, chairman of PwC’s Global Board. “During his tenure in the US, Bob's outspoken support of work-life flexibility for the firm's people, the importance of diversity on his own team, and the significant investments he has overseen in new and cutting edge technologies make him the ideal forward-looking leader to navigate the global economy and bring our best ideas and solutions to clients.”

Plus, he doesn't resent Millennials! In this day and age, I feel like that's a pretty important global CEO trait to have. Moritz's ascension means the firm will be announcing his replacement "later this year" so feel free to start handicapping that horse race now. If tax leader Mark Mendola's hat is in the ring, I think you know what his slogan will be.

Zenefits director faced accounting issues at previous firm [SFC]
By now, you're probably heard that Zenefits, a startup benefits management company, had some licensing problems recently. More specifically, they didn't have proper licsnses and they sold insurance illegally. In any case, there's been a lot written about it. However, this story about Lars Dalgaard, a Zenefits director and general partner at Andreesen Horwitz, who "tried to counsel" ex-Zenefits CEO Parker Conrad seems a bit overwrought:

Dalgaard’s role on the four-member board was especially important because he was the only person who was not a Zenefits employee. As the only outside director, Dalgaard’s responsibility was to provide crucial perspective and guidance to the company. After all, he previously ran a successful software firm, having sold SuccessFactors to German software giant SAP in 2012 for $3.6 billion. The deal cemented Dalgaard’s reputation as a major player in Silicon Valley.

Yet SuccessFactors had problems of its own. In 2011, a major accounting firm that had audited SuccessFactors’ statements concluded that its accounting controls contained “material weaknesses,” according to company documents.

“SuccessFactors has not maintained effective internal control over financial reporting as of December 31, 2011,” KPMG wrote in the company’s annual report.

Clearly, correlation is not causation. But company executives around Silicon Valley, particularly those on the boards of unicorns (companies worth more than $1 billion), would be well advised to take note of past mistakes and govern boards with more than a casual eye toward all kinds of compliance, whether it concerns accounting or licensing regulations.

One source went on the record to say that SuccessFactors' "accounting was really a mess," and sure, okay, fine. But when $3.6 billion comes along, hopefully you clean up that mess.

Kasich Follows Rubio, Cruz in Releasing Abbreviated Tax Returns [Bloomberg]
A third person who won't be the GOP nominee for president released pages 1 and 2 of his tax return despite the fact that pages 1 and 2 don't tell us much of anything:

Kasich, first elected governor of Ohio in 2010, didn’t release the schedules for his returns that would have provided detail on the family’s business income, dividends, capital gains and deductions. Florida Senator Marco Rubio and Texas Senator Ted Cruz, competitors for the 2016 Republican presidential nomination, also omitted such schedules when they released their respective tax returns in late February.

“We have done what the others in the race have done,” Rob Nichols, Kasich’s press secretary, said in a telephone interview. Nichols said that the Republican front-runner, billionaire real estate developer Donald Trump, “hasn’t released anything.”

But this is how politics works.

Previously, on Going Concern…
I did another live broadcast with Jason Blumer and Greg Kyte. We talked about dress codes. You can watch the playback if you're not ready to face Monday quite yet.

In other news:

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