October 29, 2020

BDO

Promotion Watch ’12: BDO Admits 15 New Partners

Now that everyone's time has been entered and accounted for, the TPTB at BDO figured it was appropriate to recognize the men (13) and women (2) who make up the final new partner class under Jack Weisbaum: “I am very proud to welcome each of these very deserving individuals to our partnership,” said Jack Weisbaum, CEO […]

Fiscal New Year’s Eve Fun: How To Handle Last Minute Time Entry Requests

Let no one say nothing good ever comes out of BDO. From the tip box: Hey Going Concern,   It's almost June 30, and you know what that means! Yep, BDO YE! That also means being bombarded with a million emails to enter all of our time. As a BDO lifer I don't know, but […]

There’s a Bit of Shake-up in the Works at BDO

Last week we heard some interesting news from a reliable source on a shakeup that will impact the regional and leadership structure of BDO. As you know, the next CEO of Bravo Delta Oscar will be Wayne Berson, the current head of assurance for the firm's Atlantic region. As the firm's CEO-elect, he is putting […]

Ex-BDO CEO Wins New Trial Because One of the Jurors Lied About Being a Drunk, Shoplifting Shellfish, Everything

Former BDO CEO and wolfpack leader Denis Field has won a new trial on charges of tax fraud thanks to a juror in his trial who lied about her alcoholism and, oh…pretty much everything: U.S. District Judge William Pauley in Manhattan today overturned the convictions, ruling that the presence of Catherine Conrad, who was Juror No. 1, […]

BDO Joins the Auditor Resignation Party

The firm has had about all the fun it can handle trying to audit Chaoda Modern Agriculture. In a statement Thursday, Chaoda said that in a letter on Apr. 26, BDO said that despite continuing with the audit for a prolonged period, it was not in a position to conclude. It said the move was […]

Grant Thornton Bailing Out BDO Down Under

Grant Thornton is officially picking up BDO's Victoria and New South Wales offices in Australia for $50 million, according to reports.  [This] comes after BDO announced last month it had decided to terminate the BDO Victoria and New South Wales offices, citing “unreasonable risks”, following a strategic review of the business taken over the previous […]

Wayne Berson Will Be the Next CEO of BDO

It was a very quick turn around from the time we learned that the most interesting accounting firm CEO was retiring, to learning the slate of candidates to the announcement of the successor but here we are. Wayne Berson, BDO's Atlantic Assurance leader will be the new CEO effective November 1.  “I am honored and […]

Going Concern March Madness 2012 Enters Round 2: No More Big 4

Today marks the day that you're pulling out brackets again that just serves as a reminder of how horrible you are at picking winners. Accordingly, we'll dive right into round two of Going Concern March Madness 2012: The Coolest Accounting Firm.  Again this year we saw a bunch of upsets in round one with all […]

Who Will Be the Next CEO of BDO?

Last month we learned that Jack Weisbaum would be retiring at the end of his current term as BDO's CEO. It's been quite the run for Captain Jack, but eventually you knew that things wouldn't stay interesting forever. A tipster tells us that the process to replace J. Dubs will soon be under way: The […]

BDO Chief Technology Officer Asks Everyone To Give Up Their God-given Right to Stream NCAA Basketball Tournament Games at Work

A deckhand on Captain Jack's ship sent us a copy of an email that will either be heeded begrudgingly or completely ignored: From: [BDO Chief Technology Officer] To: [Everyone] Subject: March Madness… March Madness means many things to many people.  Basketball, spring and snow in Michigan and APT & taxes here at BDO.  With that […]

KPMG Sorta Making Up for Losing All Those Partners to PwC By Taking Some of Their Audit Clients

Accounting News Report, using data from Audit Analytics, puts out an Auditor Change Analysis every year and it usually finds its way into our inbox, however, because the analysis is a subscription-based publication (and a pricey one at that), reproducing the whole thing is usually not an option. This year we asked pretty please, and we got […]

Jack Weisbaum to Step Down as BDO CEO

One last thing before you're off to make bad decisions this weekend…Oh, right! You're probably working this weekend and you probably don't get to make any decisions about that. ANYWAY, Captain Jack Weisbaum, the most interesting accounting firm CEO in the world will not seek reelection, and will retire effective October 31, 2012 when his current […]

Ex-BDO Partner Didn’t Realize You Were Asking About *That* $49,350

Bryan N. Polozola simply misremembered that he took that exact amount of money from a old employer. Problem is, he misremembered with the SEC: Polozola was the subject of a 2005 NASD (now FINRA) proceeding alleging that he took $49,350 in funds from a former employer for his personal use. Polozola neither admitted nor denied […]

Exodus Watch ’11: BDO Tax Partners

Apparently a grip (a half dozen or so) of them have left the firm in the past two months, says a source familiar with the situation at BDO. At least three are supposedly now with PwC (none worthy of P. Dubs press releases) and another two are off to Deloitte in various markets. If you’ve recently jumped Captain Jack’s ship or know of more details for your office, get in touch.

BDO Knows the Alamo

The most interesting accounting firm CEO would like to welcome the gang at Carneiro, Chumney & Co. to the club. “The addition of the partners and other professionals formerly with Carneiro, Chumney & Co. provides BDO with a fantastic presence in the important San Antonio market. Combined with our existing practices in Austin, Dallas and Houston, Captain Jack said. With this move, all San Antonioa-area professional recruiters are officially on notice that your leads at Carneiro now have incentive to rat you out. [BDO]

BDO Anthem to FIU Includes Tone Deaf MCs, Bad Wigs

As you’ve probably noticed, a lot of videos come through these parts that are of various production quality with the legendary “In a JIT” widely accepted as the best effort to date. While TPTB probably don’t appreciate the creativity, it always seems worthwhile for us to promote the talents (or complete lack thereof) of those willing to put the time into a such an extensive project.

Today in CPA-inspired video is from none other than the most interesting firm in the world, BDO. The mission of this particular video was to serenade recruits from Florida International University. And seeing how it’s a firm-sponsored production, it’s clear the firm is behind it.


Some thoughts:

1. How did the casting director consciously go with the two guys in the office that are completely tone deaf?

2. Will FIU recruits even attend an office visit after this display?

3. “Running through FASBs like Drano.”

4. At 2:35 they are clearly reading the lyrics off the screen. Poor form, gents.

5. Couldn’t they get Captain Jack to throw them out of the office instead?

We will give them an ‘A’ for effort since BDO is typically pretty quiet but they’ve got a long way to go. Feel free to share your own critique below.

Comp Watch ’11: What Do You Know, BDO?

From the mailbag:

Comp adjustments are coming out this week/ next week can you start a thread?


As we’ve pointed out in the past, BDO is probably the quietest of the top tier firms. Rarely do we get news of hookers, out-of-control happy hours or milestone awards. Sure, we got under the skin of Jeremy Newman once but he has a blog. He was asking for it.

This omertà of sorts by the rank and file has been discussed amongst the GC team and we’ve come up with this: we’vegotnofuckingidea. Not that we haven’t had the opportunity to report on the consolidation of regions or $5 Starbucks cards but the tips are so few and far between that whenever something about BDO come in, it gets us all sort of excited.

But enough about us. If you’re at BDO and you’ve had your sit-down or you’re waiting and are hearing rumors of raise percentages OR you’re simply doubtful as to Jack Weisbaum’s status as most interesting accounting firm CEO in the world, please tell us below.

Analysis: If Your Accounting Firm Was a College Football Team

Pack up your white pants and seersucker suits – Labor Day has come and gone which means only one (actually important) thing: college football is back. You NFL loving freaks can have your Sundays of Hollywood-produced sport; I believe the good Lord created Sundays solely as a recovery day for college football fans. Well, for that and drunk brunches, of course.

It is no secret that good ol’ Caleb is a vehement Husker fan,he only reason he’s given me the green light to churn out a post comparing your respective accounting firms to the likes of fried-butter-eating college football fanatics.

I can only pray that my effort will inspire the semi-regular infusion of sport, accounting, and bantering commenters around here, so I give you the “Accounting Firms If They Were A College Football Program” top nine rankings. Grab your body paint and come along for the tailgate.


Firm: Deloitte
Team: Oklahoma Sooners
First Take: Both are always in title contention but seem to shit the bed come Pay Day. Deloitte raises are on par with the Sooners’ BCS bowl record under Coach Bob Stoops (2-8).
Keep it in the Family: During Hurricane Irene, Deloitte encouraged employees to bunk up together, obviously a practice long in use in Oklahoma.
Sputter, Sputter: Sooner alum Blake Griffin jumped over a KIA at last year’s NBA slam dunk contest. A certain Deloitte consultant also prefers a certain overused and washed out mode of transportation…

Firm: PwC
Team: Oregon Ducks
First Take: They’re in the news for legit (raises, hurry-up offense) and controversial (fireside chats, BCS infractions) more often than you’d like. Also, their team colors are atrocious.
Hotties Everywhere: PDubs has Ireland. The Ducks have these ladies.
Just Pick One Already: PwC doesn’t churn out new logo/uniform re-designs as often as the Ducks but both cause a stir when they do. Whether the changes for either team result in better winnings has yet to be seen.

Firm: Ernst & Young
Team: Ohio State Buckeyes
First Take: You hate going up against them, but even if they do win, you’re thankful you’re not affiliated with their alumni.
Compliance? What Compliance? Former coach Jim Tressell thought it best to let a tattoos-for-autographs program run its course. E&Y is apparently doing the same with this minor Sino-Forest sitch.
Questionable Mascots: The poisonous nuts of the Midwest are no match for the Black & Yellow guy.

Firm: KPMG
Team: Notre Dame Fighting Irish
First Take: Still talking about that big win in 1983. An exodus of leadership. The general public has gone from loathing them to just feeling bad for them. Give it up, you’re no longer the powerhouse you (thought you) once were.
Johnny Be Good. The Chairman is also a proud ND alum. Need we say more?
Empty Promises: We’re going to win it all! We’re going to hire thousands!

Firm: Grant Thornton
Team: Northwestern Wildcats
First Take: As hard you they try to be tough, they’re still nerds dressed in purple.
Off-the-Mark Advertising: GT – the lack of aligned teeth took some bite out of your full-page WSJ ad. And Dan Persa for Heisman – really? Your mom for Heisman.

Firm: Rothstein Kass
Team: Boise State Broncos
First Take: First it was a feel-good story but their continued rise through the ranks is pissing off the traditionalists.
The-Anybody-But-The-Other-Guy- Vote: Whether it was Boise’s ridiculously fantastic win over Oklahoma years ago in the Fiesta Bowl or RK’s dominance in the Going Concern March Madness pool, oftentimes their fan support stemmed from us just hating their competition more.

Firm: McGladrey
Team: Missouri Tigers
Only Take: You’re supposed to be on this list; we know you belong on this list; we don’t know what you’ve done to deserve being on this list.

Firm: BDO
Team: Penn State Nittany Lions
First Take: Your parents would have been pleased if you went there but better options awaited you.
Race to the Retirement Home: JoePa is 84 and coaching from the press box. Rumor has it Jack Weisbaum calls the shots from his personal tanning bed.

Firm: CBIZ/Mayer Hoffman McCann
Team: University Buffalo Bulls
Only Take: You think you’re a big deal, but really everyone uses you as an exhibition punching bag.

How’d we do? What team best parodies your firm? Share it in the comments below.

Jeremy Newman’s Blogging Career Is Coming to End

Related: he’s also stepping down as BDO International’s CEO on September 30:

[After] 33 years in total with BDO UK and BDO International, I will be stepping down on 30 September 2011.

I have had a fantastic career and have been privileged to lead BDO UK for 7 years and BDO International for the last 3 years. I have had some great colleagues, worked with some brilliant people and, in my earlier career, been involved with some terrific clients.

Martin van Roekel, the firm’s Managing Partner in the Netherlands, will officially be the new International Chief on October 1.

Newman says “it is time for a change,” but he “[doesn’t] know what I will do but after 33 years in this business, I am looking forward to seeking new opportunities outside the accounting profession.” He is promising to keep blogging through September, so hopefully he’s still working on his delicate sensibilities.

Moving On [CEO Insights]

One Might Get the Idea That Glen Rose Petroleum Corp. Fired Its Auditor in Favor of a Firm That’s Less Likely to Issue a Going Concern Opinion

It’s not entirely clear why Jonathon P. Reuben’s services are no longer needed but you could easily conclude that the GCO wasn’t appreciated.

On June 20, 2011, the Audit Committee of the Board of Directors of Glen Rose Petroleum Corporation (the “Company”) approved the termination of services of Jonathon P. Reuben CPA, An Accountancy Corporation (“JPR”), effective immediately.

JPR was the independent registered public accounting firm for the Company for the fiscal years ended March 31, 2010 and 2009. The reports of JPR on the Company’s financial statements for the years ended March 31, 2010 and 2009 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle, except that the reports of JPR on the Company’s consolidated financial statements as of and for the years ended March 31, 2010 and 2009 contained an explanatory paragraph which noted that there was substantial doubt as to the Company’s ability to continue as a going concern due to a deficit in working capital and incurring significant losses.

BDO will take it from here. Perhaps a nice welcome to the partnership gift for one of the newbies?

8-K [SEC via Citybizlist]

Promotion Watch ’11: BDO Admits 13 New Partners

Jack Weisbaum is letting a baker’s dozen join the club, although with the new national heads recently announced, there’s an new extra layer between the newbies and the most interesting accounting CEO in the world.

Here are the lucky 13:

John Barkmeyer (Orange County – Assurance), Doug Bekker (Grand Rapids – Tax), Elliott Binder (San Jose – Tax), Sofia Blair (New York – – Assurance) and Mike Campbell (San Francisco – Tax), Demetrio Frangiskatos (New York – Assurance), Nania Gopal (Orange County – National Assurance Office), Mike Hottel (Washington, DC – Assurance), Joel Mitchell (Chicago – Tax), Stathis Poulos (Raleigh – Assurance), Jennifer Quaglino (Woodbridge – Tax), Chris Tylka (Chicago – Assurance) and Andy Zaleski (Detroit – Tax).

Congratulations and stay thirsty, new partners.

[via BDO]

BDO Slims Down to Four Regions, Names New National Heads of Assurance and Tax

Jay Duke will head up the assurance practice while Doug Sirotta will lead tax. They’ll both report to the most interesting CEO in the world.

The business line regional heads (chart below), who formerly reported to Jack Weisbaum, will now report report to Duke and Sirotta. Speaking of those regions, the Southeast Region (Florida, Georgia) will merge into the Atlantic and the Southwest (Texas and Tennessee) will join the Central. It all goes down on July 1. Messrs. Duke and Sirotta will give up their seats on the BDO Board of Directors to take their new national roles (demotion?).

SOMEWHAT RELATED: Christopher Tower, the head of assurance in the West, was one of the brainchildren behind the “Tattle on a Headhunter, Win a $5 Starbucks Card” idea. [BDO]

Region Assurance RBLL Tax RBLL
Northeast Alan Selitti Robert Pedersen
Atlantic Wayne Berson Wayne Corini
Central Steve Ferrara Paul Heiselmann
West Christopher Tower Rocky Cummings

BDO Rewarding Employees for Tattling on Headhunters with $5 Starbucks Cards

For whatever reason, we don’t hear a lot of gossip out of BDO. Perhaps it’s because the entire firm is too captivated by the most interesting accounting firm CEO in the world, Jack Weisbaum, and are rendered loyal to a fault, thus choosing not to share the more sordid details of what happens inside B to the D tortunate because we hear rumors that there are slew of partners who are not pleased with how things are going at firm but no one seems to want to talk. I’d encourage someone to speak up by emailing us.

But for now, we’ll take the opportunity to tell you about the efforts put forth by some inside the firm that were sensitive to the post-busy season onslaught of professional recruiters. As we all know, after people have worked their asses off for three to four months, some might feel unappreciated and opt to look for a new job. Recruiters are acutely aware of this and since it’s their job to fill positions for their clients, it only makes sense that they chase people that are looking for a change. And because professional recruiting is a competitive business, sometimes the emails can clog your inbox like offers for ED drugs. Some partners at BDO thought that in order to help people stave off this bumrush, they would invite employees to simply forward the emails and voicemails received and voilà! $5 of Starbucks burning in your pocket. Oh, and did I mention that there’s no limit for how many you submit? So if you’re a hot piece of public accounting talent, getting tons of calls, you can really clean up. Not only that, the person that submitted the most unique names of headhunters and agencies would receive a $250 AMEX gift card. Yes. Sound petty? Sound pathetic? Sound desperate? Read for yourself and decide.


I split up original screenshot sent to me so that it would be easier to read, hence the narrow break.


So you might expect such an attempt to bribe employees with corporate caffeination would fall flat. That tipping off firm leadership about PEOPLE THAT ARE SIMPLY DOING THEIR JOBS (and maybe change a few professional careers for the positive) would fall on deaf ears. Well, you would be wrong. DEAD WRONG. A follow-up on the firm’s internal website (next page) stated that over 200 submissions were made and one SA in Spokane submitted 15 alone.

That’s right, the effort was so successful that they are extending it through July 8th. Not really knowing what the protocols are, I don’t know what to tell the recruiters to expect in terms of retaliation from the TPTB at BDO but at least you’ll know that if you receive some kind of nasty correspondence, the person who gave you up was baited with the siren’s call that is the white and green coffee cup.

Investors in Allen Stanford’s (Alleged) Ponzi Scheme Sue BDO

Nearly two years after Texas financier Allen Stanford was indicted in an alleged massive Ponzi scheme, investors have just filed a $10 billion proposed class action suit against his auditor—the giant accounting firm BDO.

The suit—filed Thursday in federal court in Dallas—says BDO did not only aid and abet the $7 billion dollar fraud…it was a “co-conspirator.” “BDO’s cozy relationship with the Stanford Financial Group was steeped in conflicts of interest and required ongoing deceptive and duplicitous manipulation of the facts to allow the Ponzi scheme’s exponential growth for over a decade,” the complaint says. “The result of this deception is the loss of thousands of investors’ life savings.” [CNBC]

Doing It Wrong Twitter Case Study: The Sensitive CEO

Usually Adrienne handles these things but I seem to have started a beef, so here goes. Last Friday, I poked fun at BDO Global CEO Jeremy Newman, after he admitted that regulatory intervention in the UK would b up the audit market,” even though that’s the last thing he wants. “It is a shame it has taken so long and that it will require regulatory intervention,” he writes but then immediately qualifies the statement, “though it is not too late for my colleagues in the Big Four, and others, to act on a voluntary basis to create the environment necessary to allow real competition.”

This overt doublespeak caused me to open my post with this:

Perpetual fusspot and BDO Global CEO Jeremy Newman has not been shy about how unfair he thinks the dominance of the Big 4 is. The majority of his blog posts are tagged “Global Accounting” and several consist of bellyaching about Big 4 this and the Big 4 that. Of course, since the mainstream media has finally picked up on the idea that the concentration of auditors could be a bit of a problem […]

Newman wrote another blog post today starting with “I have never understood Twitter” but then did a Twitter search on himself, “not expecting to find anything” but he eventually landed on my blog post. He blockquoted the excerpt above (and linked!) and then wrote this:

Now call me sensitive, but I do not see myself as a “perpetual fusspot” or “bellyaching”- just someone raising a valid concern and one that has now been recognised by others, including the OFT but also the European Commission, MEPs, the UK’s House of Lords and many others, as being a potential issue. I also don’t think the dominance of the Big 4 is “unfair” – I think it is a risk and not in the public interest. And again this view is shared by others – including those who represent the public interest.

Clearly, Mr Sensitive had never graced this fine publication before but I read most of his blog posts and as I pointed out, lots of posts are tagged “Global Accounting” with titles such as “Big 4 bias – can we ever overcome it?,” “Financial Reporting and Auditing: A time for change?,” “There is a Credible Alternative,” and “Restrictive bank covenants keep the Big Four on top….”

Now maybe I’m way off base here but having so many posts (there are more) attributed to this topic, strikes me as someone who is excessively worried about something (i.e. “fussing“). I’m not suggesting he should start doing Mad Men recaps but there is consistent narrative. Plus, the word “fusspot” is funny. Furthermore, evoking “bias,” “can we overcome” and “credible alternative[s]” inherently speak to an unlevel playing field (i.e. “unfair“). Perhaps I’m too wrapped up in semantics but I think my point has been made.

On the bright side, I’m flattered that Mr Newman was offended enough to write a response of sorts (without naming names, unfortunately) and hopefully he finds some things on GC that are to his liking. Unfortunately he still doesn’t appear to be on Twitter, the catalyst to this whole exchange. I encourage JN to join the fun. Then he’ll be able to keep up on himself.

Ex-BDO CEO Denis Field Convicted in Tax Shelter Case

Wolf pack leader and former BDO honcho Denis Field was convicted on a variety of charges related to tax shelters that he and others provided to wealthy clients, according to several reports. This seems to mark the end to this particular case, as Denis’s colleagues all pleaded guilty back in 2009. Others convicted alongside Field included former Jenkens & Gilchrist partners Paul Daugerdas and Donna Guerin and David Parse, formerly of Deutsche Bank Alex.Brown.

New York Law Journal reports that during opening remarks, the prosecution quoted Mr Field as telling his fellow wolf packers that they would be “”swimming in a river of green” if they aggressively sold the tax shelter plans. His defense claimed that he was merely the “head showman and marketer” which sounds like a pretty lousy excuse but his lawyers stated that they will still file post-trial motions to have the verdict set aside. [WSJ, NYLJ]

Jeremy Newman Would Prefer if the Big 4 Would Just ‘Allow Real Competition’ But Regulatory Action Will Do Just Fine, Thank You

Perpetual fusspot and BDO Global CEO Jeremy Newman has not been shy about how unfair he thinks the dominance of the Big 4 is. The majority of his blog posts are tagged “Global Accounting” and several consist of bellyaching about Big 4 this and the Big 4 that. Of course, since the mainstream media has finally picked up on the idea that the concentration of auditors could be a bit of a problem, Newman has lots of articles to jump from and since the UK’s Office of Fair Trade has said something needs to be done about this, he had another opportunity this week:

Under the headline “Antitrust watchdog urges reform to break audit grip of Big Four” the FT states:

“Regulatory action may be required to break the dominant grip of the Big Four accounting firms on UK audits of leading companies…”

The only word I would challenge is “may” – it should say “will”.

Presumably this article was in the print edition because Newman doesn’t link to it but suffice to say he’s concluded that the government needs to either break up the Fab 4 like Yoko Ono or put some laws in place that mandates non-Big 4 firm inclusion. Either way, Newman laments to the Big 4 that it doesn’t have to be this way:

At long last it seems that something might now be done to open up the audit market. It is a shame it has taken so long and that it will require regulatory intervention – though it is not too late for my colleagues in the Big Four, and others, to act on a voluntary basis to create the environment necessary to allow real competition.

Judging by the statements from the firms, they seem more or less going along with it but these firms aren’t conscientious objectors. Don’t expect them to play nice.

I Hate it When People Say “I Told You So” But… [BDO]

What’s Do We Make of BDO’s ‘Secret Settlement’ in the E.S. Bankest Dispute?

BDO is trying to put the E.S. Bankest/Banco Espirito mess behind it by submitting a “confidential agreement” to settle its litigation with the bankruptcy estate of E.S. Bankest, according to the South Florida Business Journal.

It sounds as though this could be put to rest as the bankruptcy trustee Barry Mukamal is quoted as saying, “I’m satisfied that this settlement is in the best interests of the estate,” although the creditors have to give the stamp approval as well. What’s not immediately clear from the article is to what extent Banco Espirito is involved in this settlement, the only mention being “”Lisbon-based Banco Espírito Santo and the estate of E.S. Bankest sued BDO Seidman regarding more than $140 million lost to a financial scheme run by former officers of E.S. Bankest.” I shot an email over to Steven Thomas who has represented Banco Espirito to sort this out and his spokesperson replied with the following statement, “BDO USA, LLP has entered into confidential settlement agreements with Banco Espirito Santo and Barry Mukamal, the bankruptcy trustee of E.S. Bankest, L.C., pursuant to which the lawsuits against BDO have been resolved.”

So when I asked if the re-trial was still on, I was simply referred back to the statement which kindasorta makes it sound as though this whole thing is over. But it still isn’t clear to me. Can anyone make sense of this? In the meantime, if I get to the bottom of this riddle, I’ll post an update.

BDO Seidman files secret settlement in malpractice case [SFBJ]

BDO Senior Manager Wants to Know How Best to Say ‘I Quit’

Welcome to the High Holiday edition of Accounting Career Emergencies. In today’s edition, a senior manager at BDO is ready to give notice but can’t decide if it’s best to keep things professional or to go out with a verbal assault the likes of which George Costanza has never seen.

Are you working in the Twilight Zone? Need some good ideas for celebrating the end of busy season? Feeling jealous about the sexy success<l us at advice@goingconcern.com and we’ll get you over your accountants-in-love envy.

Back to kicking off The Public Accounting Attrition Tour of 2011:

Going Concern,

I am still knee deep in busy season, with many engagements still open and pushing their April 30th deadlines. There is no real end in sight, since May and June look equally as busy with Q’s, EBP’s, 9/30 year ends and other projects the Partners engage us for that further contribute to my maxed out PTO accrual. So naturally, as most people do this time of year, I have been looking for open positions searching for that golden opportunity to finally break free of the social, physical and health suppression known as public accounting. That being said, is it wrong to lay down at night and dream of what you would say when giving your notice?

I have played out hundreds of scenarios in my head saying everything from the absolute extreme to the overly conservative. That makes me think – what is the best way to “leave” a public accounting firm? During my 11 year career, I have seen all kinds of people leave in a ball of fire, rather than just fade away. Those people think that the firm will collapse without them, or their leaving will cause a mass exodus or significant change to the firm. No way. It never happens. So really, what is the point of telling the Partners (and HR in the exit conference), what you really feel in your heart?

Dear Dreaming of Quitting,

There’s nothing at all wrong with dreaming of the most epic march in ever. I assume you’re referring to something similar to this:

As you mention, people who go out with a furious speech that features wild hand gestures and name-calling are typically those who think they are indispensable or are somehow the catalyst to the collapse of their firm. You’re right to say that this is NEVER the case. A team or an office may go through a rough patch (mileage of rough patch may vary) but eventually things calm down and return to relative normalcy.

So to answer your second question – the best way to leave your firm is: quietly. That doesn’t mean you don’t tell your colleagues, friends or others that you’re leaving (most probably know that you’re looking to leave anyway) but it should be a drama-free encounter. You meet with the appropriate people, tell them that your last day will be X and that should be it. If they pry about why you’re leaving or attempt to convince you otherwise, you can respectfully decline or entertain their queries and/or begging. That’s up to you. Even if you’ve been used and abused throughout the time at your firm, would it really make you feel better to tell that a partner that the experience of working with them was akin to a circle of Dante’s Inferno that he dared not scribe?

As for the motive behind these overtly dramatic “I quit!” speeches, I get the feeling that those who feel compelled to give them think they will get some satisfaction out of telling someone exactly how they feel; that giving everyone who deserves a piece of their mind will somehow make everything negative that happened in the past worth it. If you feel like expressing some honesty about your experience, that’s perfectly okay but for crissakes, have some tact. If you simply feel justified to spew verbal excrement, that only makes you look like a lunatic. A very unprofessional lunatic.

Going Concern March Madness Update: Reznick’s Magic is MIA; Grant Thornton, BDO on the Ropes

Look gang, since too many of you are distracted with doing billable work to email us anything half way interesting, I’m guess I’ll just update you on the progress in Round 2.


The two highest remaining seeds – Grant Thornton and BDO – are looking defeat square in the face right now to their respective opponents – Crowe Horwath and Rothstein Kass. First round comeback kid Reznick Group is currently getting worked by Moss Adams which makes should make us all wonder what happened to the teamwork we saw in the first round. Perhaps they’re a one-trick pony?

Finally, in the least talked about match-up, Mickey G’s and Dennis Rader’s favorite firm (ideas for something better are welcome) look like they’ll be taking it down to the wire. There’s just over thirteen hours left to vote, so get the word out sooner rather than later (sorry Clifton Gunderson).

BDO Is Not Impressed with KPMG’s Business Tactics in Brazil

BDO announced a new member firm in Brazil today because…well, KPMG kindasorta poached their last one. Well, BDO Global CEO Jeremy Newman has had it up to here (i.e. eye-level) and wanted to point out that A) this not uncommon:

“BDO is not the first firm to have suffered as a result of our larger competitors using their dominant financial position to buy market share and we have expressed our concerns about this in BDO’s recent submission to the European Commission’s Green Paper on the role of the audit profession,” said Newman.

B) this is some shady dealings:

“These tactics are not driven by client needs but by one firm’s wish to buy market share and presumably achieve further economies of scale. We are concerned that when one firm looks to dominate it reduces choice for clients and leaves the market worryingly dependent on just a few players.

and C) these aren’t just fightin’ words. The most interesting accounting firm in the world will be taking action:

“BDO will be lodging an objection to this deal with the Brazilian competition authorities.”

Challenge extended.

BDO lines up complaint against KPMG Brazil [Accountancy Age]

Choosing Between a Big 4 and Mid-tier Firm Part XXIII

Welcome to the upset-special edition of Accounting Career Emergencies. In today’s edition, a future public accounting foot soldier has to make a decision between a Big 4 firm and “GT/BDO type firm” but is stumped on what to do and can’t find a two-sided coin anywhere. The next best solution was, obviously, emailing us.

Want to know if you’re in a dead-end job? Trying to deal with stress in the waning days of busy season? Anxious about changes in your job? Email us at advice@goingconcern.com and we’ll help you pull through.

Back to the indecider:

Hi Going Concern,

I have an offer from a Big 4 and a GT/BDO type firm and am having a tough time deciding. I wanted to ask which option will be better in the long-run if I want to start in public accounting, but then might want to move to a large publicly traded tech company? I guess my question is which route would give me better exit opportunities and long-term benefits should I decide not to stay in public accounting? (If I leave, I have a good idea of where I’d like to work on the corporate side.)

1. Mid-Tier Firm experience — having taken lead on small projects by my second year, more interaction with clients etc. Having experience with mid-sized (not public) tech companies, and experience with large, public companies that are not tech companies.

2. Big 4 — staying a little more than 2 years (enough to move up to Sr. Associate level but not staying too long beyond that) – and having worked on large, public tech companies. Having the Big 4 brand name on my résumé.

Also, there’s a chance that I might enjoy staying at the Mid-Tier in the long-term, but without being sure, I want to keep my options as open as possible.

Thanks. Any advice is appreciated.

Stuck in Indecision

Dear Stuck in Indecision,

I’m impressed that you’ve managed to cover all the angles here. You could possibly like each scenario without considering what it is actually want with your career other than “might want to move to a large publicly traded tech company” or “might enjoy staying at the Mid-Tier in the long-term.” You’re basically saying that you’re up for anything – hence, ” I want to keep my options as open as possible.” Your options are open all right since you’ve committed to exactly nothing. However I’m here to help, so here goes.

To keep it brief: all things being equal, go with the Big 4 firm. Here are some details – it’s likely that you will have the opportunity to work on smaller clients at a Big 4 firm, thus giving you the chance to “take the lead.” If you also have experience working for larger, publicly-traded companies (not as likely at a mid-tier), your experience will be more vast and allow you decide what it is you actually want to do (because, at this point in time, you don’t seem to have a clue). GT, BDO, McGladrey et al. are fine firms but you have a Big 4 offer – take it. You didn’t mention the people (a big selling point at most firms) so I’ll assume you’re indifferent or that they were all equal on this front. The network you build in a Big 4 firm will benefit you the long run and the experience will as well. Just don’t expect your firm to do well in “cool” contests. Good luck.

BDO’s Tax Shelter Team Was Known as the ‘Wolf Pack’

I figured you guys should know that.

Ex-CEO Denis Field’s trial for his alleged lead-wolf role in the tax shelter case started last week, while the rest of his fellow wolves – Michael Kerekes, Adrian Dicker, Charles Bee Jr. and Robert Greisman – all pleaded guilty back in 2009.

Led by Field, BDO Seidman was one of the most aggressive tax-shelter marketers, starting in the late 1990s. Inside the firm, the tax-shelter team was known as the “wolf pack.” Field became CEO of the firm in 2000. Tax services accounted for nearly half of BDO Seidman’s $420 million in U.S. revenues in 2002, up from 28 percent in 1998.

Ex-chief executive of BDO Seidman on trial in tax-shelter case [CT]

Did Prosecutors Bungle Their Case Against BDO’s Former CEO?

Maybe! Denis Field’s lawyers certainly aren’t amused with the tactics:

Denis Field, ex-CEO of BDO Seidman, the world’s fifth largest accounting firm, claims Manhattan prosecutors intimidated his former firm into curtailing and eventually cutting off payments to his lawyers. In recently filed court papers, he claims that the government deprived him of his constitutional right to counsel and seeks dismissal of the case.

Field alleges that among other tactics, prosecutors threatened to indict the firm if it kept funding his defense. During a hearing on Thursday, U.S. Judge William Pauley III of the Southern District of New York, who is presiding over the case, closely questioned prosecutors about the accusations. A ruling is expected soon.

If this sounds familiar, it should. Back in 2007, the very same prosecutors – Stanley Okula and Shirah Neiman – pulled a similar stunt, “convincing” KPMG not to pay the legal fees for the partners and employees that were facing criminal charges for their roles in the firm’s tax shelter schemes:

That case was thrown out in 2007 after U.S. Judge Lewis Kaplan found that prosecutors had improperly “coerced” KPMG into cutting off the legal fees of 13 former KPMG partners and employees. “KPMG refused to pay because the government held the proverbial gun to its head,” Kaplan wrote.

Two of the prosecutors called out by Judge Kaplan — Stanley Okula and Shirah Neiman — have also been involved in the Field case, a fact that is prominently noted by Field’s lawyers in their motion to dismiss. “The reason for the government’s conduct is obvious — as with KPMG, the prosecutors believed BDO ‘should not pay the fees’ of allegedly culpable individuals,” Field’s lawyers argue. They cited the KPMG case no fewer than 50 times in their brief.

So it appears that Okula and Neiman aren’t much for personal reflection and may have pulled out the proverbial gun again. But they’re making a case for themselves, saying BDO’s motivation for sticking Field with the tab isn’t related to them putting the screws to the firm, “the government argues that BDO stopped paying Field’s legal bills after the firm discovered that Field hid from the board a report, prepared by law firm Skadden, Arps, Slate, Meagher & Flom, warning that certain tax shelters that Field was promoting were questionable.” Hey! – you can even ask BDO’s general counsel, he’ll tell you that the firm’s decision had nothing to do with get the government off their backs. And if you can’t believe a lawyer, who can you believe?

Prosecutors on defensive in BDO Seidman fraud case [Reuters]

Future Family Man Is Going Back and Forth Between BDO and Big 4 Offers

Welcome to the Calebs-are-a-loyal-sort edition of Accounting Career Emergencies. In today’s edition, a non-tradish student is getting all wishy-washy about choosing between BDO and a Big 4 firm. There are lots of variables involved so we’ll get right to it. But first…

Is your busy season belt already busting? Need help choosing classes to reach the 150 credit hours required in your state? Worried your lack of WASPyness will hurt your career ambitions? Email us at advice@goingconcern.com and we can recommend an exercise regimen or a nice fine arts class. Skin color and religion, on the other hand, are above our pay grade.

Back to our decider du jour:

I work in industry accounting now as a college student and I dread the monotonous work of industry accounting. This has brought me to the conclusion that I may just enjoy public accounting more in regards to a long term career. I see my CFO, controller, and director all working crazy hours which leads me to believe that my decision between public and industry would not change my work hours enough to really affect my work/life balance.

Unlike the majority of college students in their 20s I have significant financial obligations including a mortgage, car payments, and everything else that comes with those expenses. I am also married (no kids) and my wife is a low paid professional in her industry (marginal income, just enough to get by, but not enough to carry the house hold alone).

As for my offers – I have received a full-time offer with BDO to begin in the last quarter of this year, and I have also received an internship offer with a Big 4 to begin in January 2012 (hopefully beginning full time towards the end of 2012/beginning of 2013). If I take the internship for the sake of going Big 4, I will have to take out extra student loans through my masters to subsidize my ramen noodle living in the period between the internship and full-time start date. I will also have to put off starting my family, which is a big deal for me and my wife since we would like to start that before she gets into her 30s (which would be next year).

I must say that I originally chose the Big 4 and called BDO to decline my offer and let them know what my choice was. They seemed disappointed to hear it and the partner told me he doesn’t usually take part in recruitment and would really like me on his team. This is when he pushed my original offer from Jan 2013 to begin a few months earlier if I would have liked.

Also, when I inquired about the benefits offered at the Big 4 I was perceived “pushy” and I was told that I should be grateful for being extended an opportunity with them that many students would do anything for. When I presented this issue to professionals at other firms as well as professors I was always reassured that my question and my choice of approach regarding benefits was completely valid and the firm overreacted.

I am not sure if going Big 4 will be worth the financial and family delay sacrifice, or if going BDO and foregoing the Big 4 prestige would be a better idea since I have a partner already favoring me there from the get go, and instead of incurring more financial liabilities (through the extra student loans I would need if I took the Big 4 internship) I would be able to start paying some off. Some advice to help me make my decision would be greatly appreciated!

Hopeful Future Partner

Dear Hopeful,

Since we received your note prior to our pithy warning on Friday, I’ll ignore your verbosity. AS FOR THE REST OF YOU, there’s something to be said for brevity – keep that in mind.

All right, then. You’ve got Big 4 vs second tier decision to make, the typical American debt load and a biological clock to consider. Christ, man. We won’t touch the latter two but will say: aside from drinking heavily, you really need to sit down with the Mrs. to figure a lot of this out.

As for your career problem, we’re a little confused. It seems like you’ve already turned down BDO and accepted the Big 4 offer but there must be get out of accounting firm jail free card that we’re not aware of. Put that aside and it sounds like BDO is bending over backwards for you and your Big 4 friends are a tad touchy about a pretty standard inquiry (but maybe you’ve got people skills like Dunstan Pedropillai). So if you’re back to making a decision between the two, going with BDO seems like your best move just based on the people you’ve encountered.

To address this situation a more general sense, do you honestly think “Big 4 prestige” is going to help your situation? Anyone – recruiter, partner, manager, staff – that tries to guilt trip you with “[you] should be grateful for being extended an opportunity with [us] that many students would do anything for” doesn’t give a damn about you and is more concerned about the power they hold over you with this “opportunity.” Tell them to stick it and get your career started. Your wife will appreciate it.

A Partner Hopeful Can’t Decide Between KPMG and a Mid-Tier Firm

Welcome to the light-the-menorah edition of Accounting Career Emergency. In today’s edition, a lucky co-ed who is convinced she wants a career in public accounting has internship offers from KPMG and GT and maybe another from BDO. Multiple choice study skills won’t really help her so she turned us for our sage advice.

Is your career on life support? Worried that the long hours during the upcoming busy season might finally cause you to crack? Does your family remind you of Arrested Development? Email us at advice@goingconcern.com and we’ll have no problem crushing your brother-in-law’s dreams of playing with the Blue Man Group.

Back to the multiple choice exercise:

I recently received an internship offer from both Grant Thornton and KPMG in Chicago. I more than likely will be getting an offer from BDO as well. Unlike many who go Big 4 then jump ship to industry, I want to make a long term career out of public accounting (i.e., hopefully make partner some day).

I liked the supposed “culture” and the people at all of the firms, but now I can’t decide which one I want to go with. I don’t know if going midsized will mean quicker promotions, and somewhat better hours (relatively speaking), or if the Big 4 prestige is even relevant long term within the public accounting field. Please help me make sense of this…

Dear Partner Hopeful,

Pardon us but we’ll briefly delve into semantics for a second – “midsized” isn’t really representative of GT or BDO (we’re not crazy about mid-tier either but we’re open to suggestions) as they both have vast international networks. It is also true that the Big 4 dwarf GT and BDO combined so a moniker for the non-Big 4 firms (because that also sucks) could be the most important debate to come out of your question. But that’s a discussion for another day.

Now, then. We’re impressed that you have your mind made up that you want a long-term career in public accounting. That was our initial aspirations as well and look how that turned out. All we’re saying is, don’t get ahead of yourself and the culture will wane, trust us.

As for the Big 4 vs. GT/BDO question – for starters, the promotion pace will be similar no matter where you go. Besides, do you really want to get to senior manager in 5-6 years just to sit there for 10 more before you make partner? Our guess is, nofuckingway.

Secondly, don’t ask about hours. They will be long no matter where you go. Get over it.

The most provocative part of your question is related to prestige. GT and BDO rank #5 and #6 in Vault’s latest ranking, so it’s not like you’re working for complete schlubs. Plus, Chicago, as you’re well aware, is where Grant Thornton and BDO are headquartered. Conventional wisdom may tell you that KPMG is a more prestigious firm regardless of location and that very well may be true. But if you’re working in the HQ city of GT or BDO, you’re likely to hobnob with some of the most high-ranking professionals within those two firms. Not taking anything away from KPMG Chicago, but you simply won’t get the same exposure to the firm’s national leadership as you would at Grant Thornton or BDO.

Bottom line is that all the firms are solid and if you’re sold on the people and culture, you’ll have no problem fitting in at any of them. But if you’re concerned with prestige and building your network, it’s worth considering the opportunity of getting exposure to the bigwigs at GT and BDO.

BDO Culminates 100th Anniversary with a Two-Hour Disney Production on the History of the Firm

As you probably know, BDO has spent 2010 celebrating the firm’s 100th anniversary in the U.S. Throughout the year there has been various celebrations along with Jack Weisbaum’s successful run as Dos Equis dopplegänger.

The apex of the firm’s centennial is going on as we speak in Orlando, at the firm’s Centennial Partners Meeting where 700 some-odd partners, alums and their better halves are celebrating the big one hundo.


A brief word from the most interesting accounting CEO in the world:

“In 1910, there were a little more than 2000 certified public accountants (CPAs) in the United States, that’s approximately the same amount currently working at BDO. Today, there are hundreds of thousands CPAs, but just a handful of national firms that have been able to grow and prosper across the country and build networks with member firms around the world,” said Jack Weisbaum, CEO of BDO USA. “Our firm bears little physical resemblance to the firm Maximillian L. Seidman started a century ago, and it is sure to change drastically in the coming century. What will stay the same is our unwavering commitment to clients, our capacity to adapt to change and our ability to find opportunity in every challenge.”

In addition to the Weisbaum speech, last night attendees were treated the aforementioned two-hour Disney production about the history of the firm.

Entitled “Proud Past – Bold Future,” the firm’s story is told with an extensive cast and musical arrangements, interspersed with video interviews of BDO partners – from both past and present – as the firm’s progress is tracked over the past century.

A Disney production sounds nice but two hours? Beauty and the Beast was nominated for Best Picture and it only ran for 84 minutes. Not that you can fairly compare the 100 years of getting to know BDO to animated bestiality. There really is no comparison but we’re just hoping – for the sake of the audience – it was screened before the comfort food and booze.

Sandra Guy, Recognized for Leadership in Diversity, Leaving BDO

We’ve learned from a tipster that BDO’s Head of Human Capital Sandra Guy was leaving the firm to ‘pursue other interests’ which we have confirmed with a BDO spokesman.

As of Monday, Sandi Guy, executive director of Human Capital, has left the firm to pursue other interests. Barbara Taylor, the firm’s general counsel, will oversee the Human Capital function on an interim basis until a replacement is identified.

“We thank Sandi for her many years of service to our firm and are grateful for her significant contributions,” says Jack Weisbaum, chief executive officer. “We wish her well in her future endeavors.”

Ms. Guy was recognized just last year for her work in diversity by American Society of Women Accountants (ASWA) and Profiles in Diversity Journal’sWomen Worth Watching in 2010.”

There’s Still Some Confusion About the BDO/Grant Thornton Situation in Hong Kong

The Wall St. Journal’s China Real Time Report stumbled upon the BDO/Grant Thornton poaching exodus merger situation (some may say, “clusterfuck”) in Hong Kong and we have no choice but to take issue with it.

The headline reads, “Missed It? Hong Kong’s Big Accounting Merger” and they mention the original report from the South China Morning Post. They manage to tone down the narrative but more or less tell the same story, full with quotes from BDO Hong Kong’s CEO Albert Au Siu-cheung:

On Wednesday, about a month after the joint press release, the South China Morning Post featured a front-page article describing the merger as a mass poaching of staff by BDO, “the biggest such raid in the city’s accounting sector.”

“It’s a bit sensational,” Au said, adding there was no raid. “Poaching is I pick a few heads here and there,” he said. “What you’re seeing here is the whole firm, meaning the partners and staff, coming to join us in BDO.”

In other words, “Sure it sounded bad but really it was just people making a choice”:

“There is no goodwill payment of any kind,” Au said. “I like to think they are voting with their feet. By that, I mean they think they’re joining a platform they have commitment to and believe in.” Clients were informed of the change and had the option to find another accounting firm. All clients have stayed with Grant Thornton for this merger.

Of course if someone at the Journal had rang up Grant Thornton International they would have likely gotten the story that we reported on last Friday which is that GTI booted the affiliate firm in Hong Kong and that BDO is kinda, sorta misrepresenting the situation:

They did not choose to leave, they were told to leave…[I]t is disingenous, or possibly wishful thinking, on the part of BDO to suggest that Grant Thornton is pulling out of Hong Kong. Many partners and staff from the former Hong Kong firm have already contacted the new Grant Thornton firm and clients will, of course, decide for themselves whether to move to BDO, which operates in the region as a loose affiliation, or remain with the more integrated, ‘one firm’ approach of Grant Thornton.

And of course there are the opposing press releases. The joint one issued by the BDO/GT firm dated October 7th that states:

Leading accounting firms BDO and Grant Thornton are pleased to announce that their firms have agreed in principle to merge their businesses and practise in the name of BDO Limited.

And the one from GTI, also dated October 7th that states something quite different:

Grant Thornton International gave its Hong Kong member firm notice on 20 September to leave the global organisation by March 2011.

With that mandate and probably few options, it appears that GTHK ran into the arms of BDOHK. BDO is using the Journal to disseminate a story that makes them look proactive and ambitious when in reality, none of this would even be happening if GTI hadn’t told their HK firm to get lost. The Journal – like the South China Morning Post – doesn’t mention that. Some people might consider that a major piece of the story.

We’ve put out a warning in the past about wandering into our corner of the sandbox without knowing what the hell you’re doing (or at least checking with us first) and you can consider this a friendly reminder about that. We’re more than happy to help because this accounting/accounting firm stuff is tricky when you don’t spend every single day reading and writing about it.

Grant Thornton: BDO Suggestion That We Are Pulling Out of Hong Kong Is ‘Disingenuous’

Following up on our post from Wednesday on the movement of 600+ Grant Thornton Hong Kong employees to BDO, we’ve received some correspondence from Grant Thornton International that clarifies the situation.

Turns out, a brief press release – whole thing after the jump – was issued by GTI last month that announced that the firm had given notice (confirming speculation in the comments) to its HK firm to GTFO by March 2011.

In email to Going Concern, GTI spokeswoman Hilary East broke it down for us:

They did not choose to leave, they were told to leave. Success in China is critical to the long term ambitions of G are committed to an integrated approach to the China market, which includes Hong Kong. While many partners in the former Hong Kong firm supported that strategy, their leadership was unable to agree amongst itself and separation became the only option. Grant Thornton China immediately set up a new firm in Hong Kong, led by a group of partners from the original Hong Kong firm with support from the 1500 partners and staff across mainland China.

The new firm that Ms East mentions, presumably is Jingdu Tianhua Hong Kong which we mentioned in our previous post that will adopt the Grant Thornton name “in due course.”

But what about this article in the South China Morning Post that quotes BDO Hong Kong’s CEO as saying, “The opportunity to have a massive admission of so much established accounting talent is rare.” ?

Ms East elaborated for us:

[I]t is disingenous, or possibly wishful thinking, on the part of BDO to suggest that Grant Thornton is pulling out of Hong Kong. Many partners and staff from the former Hong Kong firm have already contacted the new Grant Thornton firm and clients will, of course, decide for themselves whether to move to BDO, which operates in the region as a loose affiliation, or remain with the more integrated, ‘one firm’ approach of Grant Thornton.

If you read the South China article, you won’t see a single mention of GTI giving the Hong Kong firm notice, unless you count the extremely vague and misleading passage:

Grant Thornton chief executive Patrick Rozario, who led the move to BDO, said the team decided to shift because of Grant Thornton International’s directive for the mainland member firm to lead Grant Thornton’s Hong Kong office.

“We consider BDO, which is run independently in Hong Kong and China, respectively, is a model that suits us better,” Rozario said.

No mention of the GTI press release. No mention of the new firm that GTI was setting up. No mention that some staff and partners were considering their options. The headline (and sub-hed) in the article is even ridiculously misleading: “Troubled accounting firm’s staff jump ship Grant Thornton to close as BDO gains full team”.

And why the article even brings up Gabriel Azedo’s disappearance is mystifying. It’s more than hella-stretch to suggest that the trouble caused by him has anything to do with GTI’s or BDO’s moves. Plus hardly anyone (including the Financial Times) gives a damn any more about his whereabouts. The guy has been on the lam for over a year and is probably some accounting Kurtz figure by now.

Grant Thornton International Separates From HK

Accounting News Roundup: Signs of Compromise on Tax Cuts; KPMG Caught in Between IRS, Wells Fargo; BDO Elects New Board Members | 11.05.10

White House signals compromise on tax cuts [Reuters]
A conciliatory White House said on Thursday it was willing to negotiate with Republicans on tax cut extensions, but Senate Republican leader Mitch McConnell took a hard line against compromises with President Barack Obama in a new Congress.

In the first possible policy shift since Democrats suffered heavy election losses two days ago, White House spokesman Robert Gibbs signaled Obama was open to talks on a temporary extension for the wealthy of Bush-era tax cuts that expire at the end of the year.

New York Court Sends “Amazon Tax” Case Back for More Information [Tax Foundation]
[T]he intermediate court of New York handed down its long-awaited “Amazon tax” opinion in Amazon.com, LLC v. New York State Department of Taxation and Finance. New York requires companies with no property or employees in New York to collect New York sales tax if the non-resident company receives revenue from in-state independent affiliates.

Qantas Blames Rolls-Royce for Engine Failure [WSJ]
Qantas Airways Ltd. Chief Executive Alan Joyce on Friday said the design of Rolls-Royce Group Plc engines could have caused a mid-air failure that forced one of its A380 super jumbos to make an emergency landing in Singapore.

“This is an engine issue and the engines were maintained by Rolls-Royce since they have been installed on the aircraft,” Mr. Joyce told reporters at the company’s headquarters in Sydney. “We believe this is most likely a material failure or some kind of design issue.”

BBC strike silences Today and hits TV news [FT]
BBC journalists ignored the pleas of their editor-in-chief on Friday, taking strike action over plans to cut their pension benefits and driving familiar morning news programmes off the air.

The Today programme on Radio 4 was replaced with pre-recorded material, including a documentary on bird life in the Humber estuary, while Radio 5 Live and the BBC’s morning television news were produced with skeleton staff and unfamiliar presenters.

IRS looks into Wells Fargo tax deductions [MST]
A dispute between the Internal Revenue Service and Wells Fargo & Co. that has been quietly taking shape in a Minneapolis federal court could cost the bank hundreds of millions of dollars.

The clash involves “sale-in, lease-out” (SILO) transactions in which a tax-exempt entity transfers tax benefits to a taxpayer like Wells Fargo, in exchange for a fee. The IRS says Wells Fargo has claimed nine-digit losses for tax purposes on such deals, but the government considers them an illegal tax dodge.


BDO USA, LLP Announces Results of Board Elections [BDO]
Brian Eccleston, Scott Hendon, Albert Lopez and Brad Schrupp have each been elected to the firm’s board of directors. These elections, which are for a three-year term, are effective immediately.

“The partnership has shown wise judgment in electing these very deserving individuals and I am confident that the firm will benefit from the insight they will bring to the process,” said Jack Weisbaum, CEO of BDO USA.

Actress’ name is mud in tax man’s eyes [Tax Watchdog/Detroit News]
Jaime Pressly is the actress and she owes $376k.

Exodus Watch: 600+ in Grant Thornton’s Hong Kong Office Move to BDO

What in the name of Stephen Chipman’s dubious accent is going on here? Why would a firm shut down an office in an emerging financiaosing six hundred partners and professionals to one of their rivals?

If you ask BDO’s Hong Kong Chairman and CEO Albert Au Siu-cheung, it has nothing to do with the disappearance of former GT managing partner Gabriel Azedo. It’s simply a once-in-a-lifetime opportunity that found its way into the lap of BDO:


From the South China Morning Post:

“The opportunity to have a massive admission of so much established accounting talent is rare. This will strengthen BDO’s competitiveness in the local accounting industry,” Au said. “This will also create a bigger mid-tier firm allowing listed companies a choice for auditing and professional services in future.”

Au said the recruitment would be completed by the end of this year, and all staff and partners would become part of BDO, while Grant Thornton would cease operation in Hong Kong. Grant Thornton’s clients – including 130 listed companies audited by the firm – had been notified of the change and most agreed to make the switch to BDO, Au said.

Au said lawsuits involving Grant Thornton’s missing boss, former managing partner Gabriel Ricardo Dias-Azedo, were not a factor in the move.

This is a head scratcher for sure. Although this isn’t the first time a major firm has had mysterio issues in H to the K. Last year, Ernst & Young’s office was raided for the firm’s involvement with Akai that ultimately resulted in the firm paying a rumored $400 million to settle the case.

We reached out to PR at Grant Thornton’s International office but since they’ve probably been at the pub for hours already, we’re still awaiting a response.

We did find this announcement from Grant Thornton International which states that the firm has a new “member firm” in HK but nothing about the movement of the 600 professionals:

Grant Thornton has announced the appointment of a new member firm in Hong Kong. The new practice, set up by Grant Thornton China, will begin trading as Jingdu Tianhua Hong Kong but will adopt the name “Grant Thornton” in due course. The new firm will be led by Daniel Lin, an established and highly regarded member of the accounting profession in Hong Kong.

[…]

The new firm plans to have a staff of over 100 people within 12 months. Significantly, it will be fully integrated with Grant Thornton China and be part of a network of 10 offices providing seamless access to 65 partners and over 1,500 professionals across mainland China and Hong Kong.

Ed Nusbaum, chief executive officer of Grant Thornton International explains, “Grant Thornton has long been committed to a strategy of an integrated approach to serving clients across the China market, including Hong Kong. This appointment of Jingdu Tianhua Hong Kong is a vital step in that strategy and our member firms, now over 100 in number, look forward to working with their new colleagues in Hong Kong.”

Okay, so a “vital step” includes the closing of an office the defection of 600 professionals and “130 listed companies” for an office with less than 100 people total? Can anyone – looking straight at you Ed – explain this? Since he’s pretty hard to nail down we’ll take your theories for now.

BDO Officially Resides in the First State

By all accounts, BDO as a firm, has had a decent 2010. There were the typical raises and promotions that were met with a giant “meh” by the BDO faithful.

The firm celebrated its 100th birthday last month, with offices marking the occasion in various ways. And probably most importantly, the Florida Appeals Court ordered a new trial in the Banco Espirito Santo case.


The decision in this case allowed the firm to jump off its deathbed reenergized, allowing Jack Weisbaum to continuing to moonlight as a TV commercial star as well as open a Raleigh, North Carolina office.

The good times continue with the addition of McBride Shopa & Co. including a message from Tom Shopa with a pleasant piano accompaniment in the background.

Jack W. was able to sneak away from a busy commercial shoot to share his feelings on the matter:

“The addition of the partners, professionals and staff formerly with McBride Shopa adds the important Delaware market to BDO’s existing presence in the Philadelphia and the greater Washington, DC area. We are excited about the many growth opportunities that this combination will bring to our clients and our future clients,” said Jack Weisbaum, CEO of BDO USA.

The bright side for BDO is that since the Taxman is likely coming to Delaware, there will be plenty of new business opportunities.

How Are BDO Offices Celebrating the Firm’s 100th Birthday?

We’re merely echoing the question.


Apparently there is some go-karting happening in Charlotte which sounds fun, especially if there was a three beer minimum to get on the track.

Other things we’re envisioning:

• Gents of all body types in the Woodbridge, NJ office coming to work as The Situation (i.e. sans shirt).

Miami office employees are wearing their homemade “FUCK BANCO ESPIRITO” t-shirts (that could be any office really).

• At HQ in Chicago, CEO Jack Weisbaum reenacting Dos Equis ads only to substitute “Stay thirsty my friends” with “People who know – Know BDO”

What else is going on? Let us know.

Comp and Bonus Watch ’10: BDO Having a Happy Hump Day?

From the mail bag:

I heard that BDO is communicating compensation adjustments and bonuses this week. Bonuses are to be paid on September 15.

Seems to be in line with our last post on BDO comp and bonuses, so if you’re get good or bad news this week regarding either, share with the group and keep us informed.

PCAOB Is Still Overachieving: Issues Inspection Reports for BDO, Grant Thornton, PwC

Well team, despite the little setback for the PCAOB earlier this week, Team Peek is not discouraged. In fact, they were so motivated by the SEC’s little stunt that they thought they’d churn out three major inspection reports today, just to show everyone that they get to say what’s what with these accounting firms (even if it is in an indecipherable combination of vague and wonky prose).

BDO, Grant Thornton and PwC all got their papers issued today, which leaves just KPMG as the last major U.S. firm to not have their report issued. We’ll give you the quick and dirty on these three but if you want the gory details, you’ll have to read them in depth yourself (some o know). We’ll go in alphabetical order so no one gets bent out of shape.


BDO had eight issuers mentioned in its report. Issues included not testing the underlying data used by a specialist, failure to identify a departure from GAAP before issuing its audit report, loan losses and “[failure] to perform sufficient procedures to evaluate the reasonableness of a significant assumption management used to calculate the gain on the sale of a business,” among others.

PCAOB_2010_BDO_Seidman_LLP

GT only had five issuers listed in their report with problems including two instances of departures from GAAP that weren’t identified before the issue of the audit report, testwork related to fair value determination of illiquid assets and testwork around revenue recognition. Steve Chipman got away from the teleprompter long enough to sign the letter to the PCAOB himself, along with Trent Gazzaway, the National Managing Partner of Audit Services.

PCAOB 2010 Grant Thornton LLP


Nine issuers were noted by the inspectors for P. Dubs. Various issues ranging from inadequate testing of foreign locations, loan loss issues (that’s a given) and fair value (another surprise). PwC’s response made it sound like they actually enjoy the whole inspection process, “We continue to support the PCAOB and we wish to convey our sincere appreciation for the professional efforts of the PCAOB staff.” Wonder if the engagement teams that were inspected feel the same?

PCAOB_2010_PricewaterhouseCoopers_LLP

Compensation and Bonus Watch ’10: Who Knows BDO?

After coming out the near-death experience thanks to the Florida 3rd District Court of Appeal, you’d figure TPTB at BDO would continue shoveling the good news out while they could. On the comp front, a tipster tells us that while there are rumors that raises are bonuses are coming, no one has a clue as to what they’ll be:

Can you run a discussion on BDO compensation increase and bonuses? Raises would be effective 10/1, and currently there have been no formal communications from senior mgmt regarding this topic. In the local offices, there has been word that there will be raises and bonuses, but no numbers have been thrown around.

In other words, if you’ve got the goods BDO peeps, kindly spill it. It’s about time you started talking. If you’re not comfortable voicing yourself, email us and we’ll handle it.

KV Pharmaceutical Will Get to Know BDO

As we’ve mentioned, it’s been a rough summer – hell a rough year – for KV Pharmaceutical. The company paid nearly $26 million to the Justice Department back in February, had massive layoffs in March and their Chairman and CFO back in June.

Last month, KPMG decided it had had all the drama it could handle and resigned as the auditor of the company.

But as the second half of 2010 gets into full swing, KV managed to find a new CFO and now they’ve managed to land a new auditor – BDO.


BPR:

K-V Pharmaceutical Company (NYSE: KVa/KVb) announced today that the Audit Committee of its Board of Directors has engaged BDO USA, LLP (“BDO”) as the Company’s independent registered accounting firm.

The Company and BDO will commence work immediately on the planning, audit and filing of the fiscal year 2010 Form 10-K and will then follow with the review of its quarterly filings for fiscal year 2011. K-V’s fiscal year end is March 31.

Mr. Mark Dow, Chair of the Board’s Audit Committee, stated, “The Audit Committee and the entire Board is pleased to be able to announce the selection of BDO as the Company’s new accounting firm. BDO has extensive knowledge of the pharmaceutical industry and also a previous relationship with K-V, and the Company believes BDO will be able to assess and complete its audit of the Company’s Fiscal Year 2010 financial statements expeditiously. We look forward to working closely with BDO to bring the Company back into compliance with all of its Securities and Exchange Commission filings as quickly as possible.”

Right! Staying compliant! That sounds a bit maj. Not only that but the New York Stock Exchange (sort of of a big deal in their own right) is sick of KV stinking up their big board with their 30-day average stock price hovering under $1.

The company has assured the NYSE that they’re on this stock price problem, “The Company will furnish to the NYSE on or prior to August 10, 2010 a response affirming its intent to cure this deficiency and outlining the steps it is currently taking and plans to undertake in the near term to restore compliance with the NYSE’s continued listing standards.”

Let’s just say BDO has their work cut out. KV has no internal controls to speak of, is having trouble convincing the FDA their products are safe and the SEC and NYSE breathing down their necks. Now maybe this won’t all translate into the auditors’ magic wand but there’s got to other potential clients in the St. Louis area with far less drama.

K-V Pharmaceutical Company Engages BDO USA, LLP as Independent Registered Accountants [PR Newswire]
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing [SEC]

Jeremy Newman and BDO Will Not Be Taking Part in Your Lowballed, Low Quality Audits

BDO International CEO Jeremy Newman is a little concerned about the trend of lowball audit fees out there. Now, those aren’t his exact words, in fact he calls it ‘‘extreme downward pressure on fees’ which still seems far more than honest than “my US colleagues call ‘fee compression.’”

He’s worried because he thinks that all this slumming around for any little opining job will lead to shoddy audits:

There is increasing evidence that fees are being forced down to such an extent that one worries this will encourage audit firms to ‘cut corners’ to reduce their own costs and thereby reduce audit quality – particularly given that the buyers of audit services (ie clients) do not monitor or determine audit quality which is a role taken on by regulators who are not involved in the pricing discussion between the client and the audit firm.

Yes, the man has evidence, courtesy of:

Canadian Public Accountability Board – “CPAB has learned that certain audit committees are pressuring firms to significantly reduce audit fees. This stance may be incompatible with the audit committees’ important role … in helping to ensure the integrity of financial reporting.”

Australian Securities and Investments Commission – “We will also focus on audit quality for new or existing audits where audit fees appear low or appear to have been reduced for reasons other than changes in the underlying business of the entity being audited.”

And he rounds it out with a quote from a speech given by Stephen Hadrill, the Chief Executive of the UK’s Financial Reporting Council, “There is a role for the market in setting higher expectations of auditors. So far the market has not played that role. Quite the opposite. It is more likely to applaud lower audit fees than higher quality.”

So if you’re desperate to retain some business or provide “client service” through the Wal Mart method, you’ll be on your own. As long as Newman is running the ship at BDO, they will be choosing quality over quantity, “despite the pressure on us to reduce costs,” no matter what other firms (read: Igbay Ourfay) are doing.

A Bizarre Market [CEO Insights]

BDO Does Some Ribbon Cutting, Opens Raleigh, NC Office

More good news out of B to the D to the O as the firm announced today that it is opening an office in Raleigh, North Carolina (full press release after the jump). This will be the 39th office in the U.S. and fourth in North Carolina. The firm also has eight affiliate offices in the state.

In the process, the firm managed to pick up former Ernst & Young audit partner Michael Dannar (a refugee perhaps?).


The good times at BDO have been aplenty lately as the firm just admitted five partners on July 1 and was given a mulligan on the Banco Espirito lawsuit. Oh and don’t forget that the firm fka BDO Seidman is celebrating its 100th birthday all year.

No word if there will be cake or freakishly large scissors at the celebration but nevertheless, it’s good to see some expansion in the Tar Heel state for a change.

BDO USA, LLP EXPANDS NORTH CAROLINA PRESENCE WITH NEW RALEIGH OFFICE

Chicago, IL – BDO USA, LLP, one of the nation’s leading professional service organizations, has announced an expansion of it’s presence in North Carolina with the addition of a new office in Raleigh. The Chicago-based firm, which now has offices in 39 cities around the country, had previously serviced clients in this market through its Charlotte practice. Pending a move to permanent office space at 5430 Wade Park Boulevard in August, the new practice, which will have approximately 15 staff, will be temporarily located at:

BDO
5410 Trinity Road, Suite 310
Raleigh, NC 27607

The Raleigh business community will now have more direct access to BDO’s full array of services which include assurance, tax, risk advisory, financial planning, business restructuring, litigation and fraud investigation services. Michael Dannar, previously with Ernst & Young, has joined the firm as a partner and will assist in serving the firm’s assurance clients in Raleigh and throughout the southeast. Mr. Dannar has significant experience working with colleges, universities and other non-profit organizations.

“We have been working with clients in Raleigh for a number of years now and the time is right for us to establish a permanent presence. This new office will enable us to better serve our clients in this growing market,” said Jack Weisbaum, CEO of BDO USA. “We are also happy to welcome Michael Danner to the partnership. His knowledge of the market will be a valuable resource to our firm.”

BDO SEIDMAN FACTS:

• BDO is celebrating the 100th anniversary of its founding in 1910.
• BDO represents companies ranging from Fortune 500 multinationals to closely-held private businesses.
• BDO had $620 million in revenues in 2009 (6/30/09). Over the past four fiscal years, the firm has averaged double digit growth (10.2%).
• As an independent member of BDO International Limited (the fifth largest global network of accounting firms), the firm can leverage the resources of more than 1,000 member firm offices in 115 countries around the world.

ABOUT BDO USA

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 39 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,138 offices in 115 countries.

BDO USA, LLP,a limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.

Promotion Watch ’10: BDO Names Five New Partners

Fresh off their win last week in a Florida Appeals Court, BDO announced the admission of five new partners today in a press release (in full after the jump).

The new partners are Joseph Carr (Chicago – Tax), Anthony Lawrence (Grand Rapids – Assurance), Hoon Lee (San Francisco – Tax), Bryan Polozola (Dallas – Assurance) and Julie Valpey (National – SEC) and they get their big chairs effective tomorrow.

Congrats to the new partners and remember to keep the celebration under control.

Wednesday, June 30, 2010

BDO USA, LLP, ADMITS 5 NEW PARTNERS

BDO USA, LLP, IS PLEASED TO ANNOUNCE THAT 5 NEW PARTNERS HAVE BEEN ADMITTED TO THE PARTNERSHIP, EFFECTIVE JULY 1, 2010.

Chicago, IL– BDO USA, LLP, is pleased to announce that 5 new partners have been admitted to the partnership, effective July 1, 2010. Two of the new partners are in the tax practice, two are in the assurance business line and one is in the national SEC group. BDO is a leading national professional services firm providing assurance, tax, financial advisory and consulting services to private and publicly traded businesses.

“I am very proud to welcome each of these very deserving individuals to our partnership,” said Jack Weisbaum, CEO of BDO USA. “A key to success in our profession is a commitment to recruiting, training and retaining superior client service professionals. Each of these new partners has excelled in their specific technical area while providing the highest level of client service.”

The newly elected partners include: Joseph Carr (Chicago – Tax), Anthony Lawrence (Grand Rapids – Assurance), Hoon Lee (San Francisco – Tax), Bryan Polozola (Dallas – Assurance) and Julie Valpey (National – SEC).

About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 38 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,138 offices in 115 countries.

BDO USA, LLP,a limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.

Accounting News Roundup: Financial Reform Finalized; Banco Espirito v. BDO 2.0; Small Win for Skilling, Big Loss for PCAOB? | 06.25.10

U.S. Lawmakers Reach Accord on New Finance Rules [WSJ]
By the end of this one, can’t you picture an exhausted Barney Frank with his tie loosened to mid-torso, pants undone with fly wide open open and some staffer dabbing his sweaty brow?

“After more than 20 hours of continuous wrangling, Congressional Democrats and White House officials reached agreement on the final shape of legislation that would transform financial regulation, avoiding last-minute defections among New York lawmakers that had threatened to upend the bill.

After months of uncertainty about how the U.S. would craft new rules, the agreement offers thince the financial crisis of how markets and the government will interact for decades to come. The common thread: large financial companies are facing a tougher leash.”

Just in case you missed it yesterday, former SEC Chairman Arthur Levitt isn’t nearly as excited as some people about the bill. The President is expected to sign the bill before July 4.

Sidenote on this one: how the Journal managed to slip Maxine Waters through as one of a dozen “players” in this bill should cause you to question – if even for just a minute – the credibility of the paper.

Florida Appeals Court Turns Down Heat, For Now, On BDO Seidman [Re: The Auditors]
Francine’s take on the decision by the Florida 3rd District Court of Appeal to order a trial in the Banco Espirito v. BDO case. An event she isn’t thrilled about, “My doubts about the efficacy of a new trial are based on the disappointing, frustrating and completely unsatisfying way the court and the judges in this case have proceeded. Some of the additional comments raised by the Appeals Court do not bode well for this plaintiff’s chances next time around.”


Supreme Court Rolls Back a Law Born of Enron [NYT/Floyd Norris]
In more Congressional ineptitude (at least in the eyes of the SCOTUS), former Enron CEO Jeff Skilling won his case at the high court, arguing that “the concept of committing fraud through depriving an employer of ‘honest services’ was not adequately defined in the law,” Floyd Norris writes.

In other words, the “idea” of fraud being a kickback or a bribe is obvious and was defined. Manipulating mark-to-market and off-balance sheet accounting rules or “something else equally outrageous” were not and thus the law was unconstitutional. Long story/short, Norris writes, is that

Funny story on the way to this Skilling outcome – if the SCOTUS rules against the PCAOB (it is expected on Monday), “It will blame Congress for writing bad laws,” Norris writes. And who forced Congress into action on Sarbanes-Oxley?

BP: Oil-Spill Cost Hits $2.35 Billion [WSJ]
Has anyone handicapped this? Obviously the $20 billion reserve is a good ballpark figure but the overs have to be a pretty solid bet on that. Takers?

Caturano being acquired by RSM McGladrey [Boston Business Journal]
The firm fka RSM McGladrey purchased Caturano and Company, the fifth largest firm in Boston. The deal, if approved by H&R Block, would make RSM McGladrey…the fifth largest firm in Boston.

BDO Wins New Life as Florida Appeals Court Orders New Trial

In what amounts to a HUGE win for BDO, the Florida 3rd District Court of Appeal in Miami has ordered a new trial in the case between BDO and Banco Espirito Santo:

A Florida appeals court has thrown out a $521 million jury verdict and ordered a new trial in a dispute over audits between accounting firm BDO Seidman and a major Portuguese bank.

The Third District Court of Appeal in Miami ruled Wednesday that the 2007 trial was wrongly divided into three phases.

That meant jurors decided BDO Seidman should pay punitive damages too early in the case.

BDO Seidman was sued by Portugal’s Banco Espirito Santmed on a Miami company later exposed as a huge fraud. The bank claimed BDO Seidman was negligent for not detecting the fraud, costing the bank $170 million in losses.

Jurors awarded the bank $170 million in losses plus $351 million in punitive damages.

We reached out to the Steven Thomas, lead counsel for the Banco Espirito for his reaction:

This case has been sent back for another trial because of the procedural ‘bifurcation’ issue. We are pleased that the effort and hard work the jury put into this case was recognized by the appellate court, and we specifically note that the Court did not dispute BDO unethical conflicts of interest or its negligence. The evidence of BDO Seidman’s failures of even the most basic auditing procedures is so overwhelming that we expect a new jury will reach the same conclusion as the original jury. We look forward to trying this case and reminding everyone of BDO Seidman’s neglect of its public duty and the enormous conflict of interest they had.

Despite the overwhelming evidence, undisputed negligence cited by Mr Thomas, the mood inside BDO is one of vindication. From the firm’s press release not yet posted on the firm’s website:

The firm is pleased to announce that the Third District Court of Appeal of the state of Florida has unanimously overturned a 2007 jury verdict against the firm and ordered that the Bankest case be retried in the 11th Circuit Court. The Court of Appeal concluded that:

• The Trial Court erred in its original decision to trifurcate the trial, ruling that it was prejudicial to have allowed the case to be presented in three phases. This made it possible for the jury to find BDO grossly negligent without, at the same time, considering the conduct of other actors, including representatives of Banco Espirito Santo.

• The Appellate Court further concluded that the evidence of reliance on BDO’s audit opinions was insufficient to sustain the claims of the Bankest investors, save for the one individual who testified at trial.

• The Trial Court improperly allowed into evidence prejudicial hearsay testimony and documents that further served to deprive BDO of a fair trial.

The Appellate Court concluded, “We have carefully considered every substantive and procedural authority that might be applied to preserve at least some of the jury’s findings. In this case, no such balm is found.”

“We are very pleased that the Appeals court has reversed the lower court verdict. We have consistently stated that we were confident that the jury’s erroneous verdict in this case would be reversed on appeal. The addition of punitive damages at the time only served to emphasize the injustice that took place at the trial court,” said CEO Jack Weisbaum. “A new trial will be in accordance with the Court of Appeal’s decision and we will prove that BDO acted at all times consistent with its professional obligations and that its audit opinions were based on the proper application of generally accepted auditing standards.”

So we’ve got a new trial with a re-energized BDO and a tenacious plaintiff. It sounds like BDO will stick with its defense strategy of “we did no wrong,” so this should be fun.

Florida Third District Court of Appeal Decision [PDF]

Accounting News Roundup: Tipsters Expose Fraud More Often Than Most Controls; What if the PCAOB Is Unconstitutional?; BDO Could Question Forensic Accountant’s Credibility | 06.01.10

Something Wicked This Way Comes [CFO]
A recent Association of Certified Fraud Examiners (ACFE) study discovered that “[o]f the top eight controls ranked by effectiveness, only one — surprise audits, which cut fraud losses by 51% — is part of the traditional accounting-based control structure. Financial-statement review, internal audits, and Sarbanes-Oxley-mandated certifications by CEOs and CFOs all ranked below the nonaccounting controls in terms of effectiveness in preventing fraud.”

Controls have no match for good old human conscience, “tips expose fraud three times as often as do management reviews, internal audits, or account reconciliations.”


The problem however, is that employees may not be getting the training about how to report fraud if they know it’s happening, “an unsupportive corporate culture and poor employee training leave potential whistle-blowers unsure of whom to talk to.” Plus the baddies are doing their best to dissuade them, as Sam Antar told CFO, “[They] don’t go down without a fight, they don’t fight fairly, and they are going to intimidate whistle-blowers — that’s the nature of their game.”

Accounting for Crisis [Portfolio.com]
Gary Weiss writes over at Portfolio about the impending decision in Free Enterprise Fund v. PCAOB and he’s not impressed with the FEF’s argument, “claiming that the board would give our Founding Fathers heart attacks because its members are appointed by the Securities and Exchange Commission and not the president and can’t be removed except for cause.”

That despite the PCAOB’s lack of fireworks in its daily activities, “The PCAOB has not exactly rocked our world—and obviously its existence did nothing to keep Lehman from its Repo 105 book-cooking scheme. But getting rid of it, particularly on specious Constitutional grounds, would be a blow to the cause of more accurate financial statements.”

The odds say that the SCOTUS will affirm the lower court’s decision but just in case, Gary agrees with Interim PCAOB Chairman Dan Goelzer that Congress needs to act fast if the Court surprises us and reverses the decision.

Clifton Gunderson buys Stockton Bates [Philadelphia Business Journal]
Philadelphia-based Stockton Bates will join Clifton Gunderson’s 1,900 employees and 300 partners effective today. Stockton has 32 employees between three offices in Philadelphia, Lancaster, PA and Haddonfield, NJ.

BDO Seidman fights claims brought by fraudster Lew Freeman [South Florida Business Journal]
Convicted forensic accountant Lewis Freeman testified in the case of ES Bankest and BDO. So it’s not outside the realm of possibility that Freeman’s conviction could call his credibility as a witness into question as well as the Bankest bankruptcy proceedings, where Freeman acted as the court-appointed receiver.

BDO Breaks Barrier to Be First Accounting Firm to Land on Obscure Employer List

First off, we can’t remember the last time BDO graced these pages twice in one day. You’d think something would come out of B to the D to the O more often but whatevs. BDO 2.0 today is a little bit of good news for the firm in the form of an exclusive spot on an obscure “Best Places” list.

God forbid our lives be devoid of a ranking in the last half of May but since it’s graduation season and there are some job hunters out there that need to start paying back school loans and credit cards debts, perhaps the timing isn’t so bad. A list we might add, that did not previously have an accounting firm on it. Progress people. Progress.


BDO shattered the glass ceiling on Experience’sBest Places to Work for Recent Grads” that “picked 20 organizations whose entry-level hiring and retention practices are exceptional.” The list is specifically aimed at those companies that are hip to the Gen Y crowd, although we don’t really know any “recent grads” list that wouldn’t be.

Regardless, BDO has some decent company on the list that includes Accenture, Kellogg’s and Morningstar but BDO is the sole accounting firm. The fact that not a single accounting firm (let alone a Big 4 firm) is on the list is a travesty of the highest order. We then realized that the list’s very nature is severely flawed.

It’s too short. Any employer list with less than 50 companies on it simply cannot be taken seriously.

And since there were no accounting firms on last year’s list, this might as well have been random list of companies thrown together for the sake of keeping communications professionals busy.

This year, the Experience folks must have recognized their gross error and that since no employer list could be taken seriously devoid of a professional services firm. Not wanting to make it too complicated, BDO’s inclusion be probably chalked up to an alphabetical advantage.

Best Places to Work for Recent Grads [Experience]
BDO Press Release

BDO Not Thrilled with the Legal Advice It Got Re: Tax Shelters

BDO’s Tax Solutions Group was going gangbusters back in the late 90s and early aughts. Unfortunately, the party more or less ended in December 2000 when the IRS served notice to the firm that some of the products were not ingenious tax planning strategies but rather illegal tax shelters. The DOJ launched an enforcement action in 2002 and just last year BDO partners started pleading guilty to tax evasion, conspiracy and some other fun charges.

BDO isn’t crazy about shouldering all the shame and embarrassment so it has decided to sue the law firm Morgan Lewis for “professional negligence, breach of contract, breach of fiduciary duty, fraud and constructive fraud.” BDO alleges that ML’s breach amounted to “disastrous results” which is likely referring to the tax shelter shitshow. They just want their $9 million back that they paid in fees and call it a day (they’re saving up!).


Morgan Lewis finds this all very amusing, stating that they advised BDO only on minor issues. ML is represented by Gibson, Dunn, & Crutcher led by James Fogelman, who made his client’s position very clear:

Morgan Lewis called the lawsuit a “sham” and contended it only advised [BDO Partners] on a few minor questions — none of which involved the questionable tax products. “There was nothing that Morgan Lewis knew about to warn BDO concerning BDO’s own conduct. … There was nothing more BDO needed to know,” Fogelman wrote.

The only time Morgan Lewis opined on a tax product, the firm contends, was in February 2000, when BDO asked it to weigh in on a tax shelter dubbed the Sentinal Transaction. Morgan Lewis responded that the tax shelter was “unlikely” to expose BDO to criminal convictions. In its motion to dismiss, the firm said, “[I]t does not appear that anybody has ever been convicted of any federal crime based on the Sentinal Transaction.”

And Morgan Lewis doesn’t simply want to be vindicated in this matter, they want to be right AND they they would like BDO and DLA Piper (BDO’s counsel) to have sanctions slapped on their asses for lying through their teeth in their complaint. ML contends that they presented evidence disproving the allegations but BDO and DLA must have decided that a bitter fight would be more fun.

And it is.

BDO Seidman Seeks $9 Million in Fees Back From Morgan Lewis [The National Law Journal via Law.com]

Hey Ladies, Have You Thought About Working for BDO?

As most of us know, women are overrepresented in public accounting yet not necessarily rewarded for their hard work, dedication, and deftness in handling both career and family (for first and second years, substitute “family” for “sleeping with hot coworkers”). Knowing that, we’re thrilled to tell you that BDO has been chosen as one of the 2010 Best CPA Firms for Women by the American Society of Women Accountants and the American Woman’s Society of Certified Public Accountants. The award is an initiative of the ASWA and AWSCPA joint Accounting/MOVE project, a national research effort to measure progress and advance women at public accounting firms and corporate accounting employers.

The Accounting/MOVE project was especially impressed by BDO’s promotion of women within the firm tied directly to BDO’s training and retention initiative.


If you recall, BDO was conveniently left out of the Working Mother 100 best companies in 2009 list last year.

As a working mother AND woman myself, I find it appropriate to point out that not all women are mothers so it doesn’t necessarily mean any progress has been made on BDO’s work/life policies. It would be awfully presumptuous of everyone – and, frankly, a tad sexist – to assume as much. For some women, work/life balance simply means spending less time at work and more time hooking up with coworkers or pursuing other hobbies and activities that don’t involve dirty diapers and scrubbing crayon drawings off of the wall.

BDO Named a Best CPA Firm for Women by American Society of Women Accountants and American Woman’s Society of CPAs [Business Wire]

Funny homeless guy sign

You Know That Guy Who Panhandles on Your Block? He May Be a CPA.

Anybody out there looking to help their fellow CPA, who’s down on his luck?
The Wall St. Journal is reporting that the former BDO Seidman LLP CEO, Denis Field may have to pay back a portion of $180 million that is being sought by prosecutors in the tax shelter case that involves Field and six others.
Natch, everybody has denied wrongdoing. The charges include conspiracy and tax evasion. Good luck with that.

Prosecutors Seek Ex-BDO Seidman CEO, 6 Others To Forfeit $180M
[WSJ]

BDO

Jeremy Newman Just Wants to Be Clear, We are NOT Declaring Victory Over Banco Espirito…YET

BDO_International.pngAfter throwing an all night rager last week when BDO International Global Coordination skated on the $521M verdict, Jeremy Newman, BDO Boss, wants everybody to chill.

Newman said he had always been confident that BDO International’s arms-length approach would be proved but added: ‘There is still the risk of a further appeal, as well as the appeal by the US firm.’

See? Staying cool. Not out of the woods yet. But when we beat those bastards on appeal, then we are getting down.

Newman stays cool after BDO victory
[Accountancy Age]