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]
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.
In Detroit, the largest city in [Michigan], the upcoming budgeting process carries an implicit threat: If local politicians can’t convince the state they have what it takes to repair the city’s finances, the state could appoint an outside official to do the job for them. The city has already hit several of the triggers to initiate the process that could install an emergency manager, say local politicians, who are scrambling to keep the city government out of receivership.
But would-be emergency managers say they can succeed where elected officials have failed. They stand to draw six-figure salaries from the local governments under their management, but some talk about this work as if it were a civic duty.
“We feel very strongly that not only is there a business opportunity here, but we want to be part of a solution for the greater good,” said Michael Imber, a principal in Grant Thornton LLP’s corporate advisory and restructuring services practice in New York. “We’re absolutely ready to help.”
Apparently, management finally recognizes that this was a real shitty busy season and as a last ditch effort to keep hemorrhaging seniors, is going to give some large bonuses and raises. Audit is to get increased comp because of how bad it was on our side. I mean GT-Chicago lost 3 seniors right before and 3 during busy season. Plus, we had a team working on a restatement that were working 80-100 hour weeks since November. I know GT will never pay out like the Big 4, but I’m curious to see if we’re in the ballpark this time around.
Who doesn’t love aggravated Grant Thornton auditors on a Monday morning? Frankly (and I know I’m not alone here), I’ll be floored like an Animal Kingdom Superfecta ticket holder, if GT pays out like the Big 4. However, because Stephen Chipman and GT have been on such a tear the past year – shedding less dynamic offices, making dynamic acquisitions – it’s possible some at GT may see better raises this year but it I’m guessing it won’t be the audit practice.
But our tipster’s email seems fairly optimistic (in a bitter, burned out auditor sort of way) since the attrition variable seems to be in full effect. If GT SAs are indeed heading for the exits, then perhaps there will be some pleasantly surprised GT dynamos after last year’s disappointment. Keep us updated.
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.
As we mentioned this morning, Accounting Today reported – in an exclusive with Stephen Chipman! – that Grant Thornton is “planning a major marketing campaign later in the year to reposition the Chicago-based firm around the world.” Having had the luxury of watching a rival firm go through the process, we can’t help but think that GT won’t make as bold of a change but we’d love to be wrong about that.
Chipman told AT that GT wasn’t trying to jam into the Bigs saying, “We made it clear that we’re not building a firm to audit GE. Let’s get clear about the verticals and the skills.” So if you take SC at his word what exactly will this major brand repositioning involve? Some initial thoughts:
Despite this setback, that doesn’t mean GT isn’t on the prowl but we’ve got no idea who they might have their eye on, so we’d invite you to speculate on who that might be and get in touch if you know anything.
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.
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.
After yesterday’s news that LECG that was more or less pulling the plug, Grant Thornton finally put out a press release that they were acquiring a “significant portion” of the company’s business.
GT is taking on 270 employees in Atlanta, Chicago, New York, Philadelphia and Portland across all its service groups. Naturally, Stephen Chipman is thrilled to share this dynamic news, “We are pleased to welcome these outstanding individuals to Grant Thornton LLP,” SC said, “I am confident that they will fit in perfectly with our people — intellectually curious, talented individuals who want to make a difference with their clients, in their workplace and in their communities.”
Which was a perfect segue into this:
“As I have stated before, our goal is to be the leading audit, tax and advisory firm serving dynamic organizations in our chosen markets,” continued Chipman. “Dynamic companies are companies that are ambitious and growing, expanding internationally. They are dealing with critical events or transactions and are in need of our value-added, integrated service solutions. We will continue to explore additional strategic mergers and acquisitions as our balance sheet is healthy [Ed. note: care to share?] and we are in a position to attract similar talent.”
In other words, GT is still on the prowl for more people to join their party. Any interested parties need to come with dynamism in boatloads.
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 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.”
Remember those GT/Moss Adams rumors from back in January? At the time, our post sent both firms calling for plumbers but we still mangaged to get a copy of an email from Moss Adams CEO Rick Anderson that denied the rumor in an email to the firm’s partners. Everything has been quiet since then mostly because…well, it’s busy season. Granted, firm leaders like Stephen Chipman and Rick Anderson aren’t thigh-deep in spreadsheets like most of you so the fact it’s entirely plausible that while you’re all distracted, TPTB have been courting each other.
We received this brief note from a tipster yesterday:
Rumor is [Grant Thornton] [is] about to announce big west coast deal.
Our source originally speculated that a tax/valuation/consulting boutique was the target because of an old Andersen connection but then told us that the latest word from the west coast is that Moss Adams is back in the picture. In our original post, we went over the reasons for and against the GranMoss merger and frankly it still could go either way (we’re leaning “no” at this point). That said, Grant Thornton has been on a buying spree, most recently picking up some attest services from the LECG Corp. fire sale, so a merger of some kind wouldn’t be a surprise but WHO?? We’re listening to any and all well-founded or crackpot theories.
Moss Adams has declined to comment on the rumor thus far and Grant Thornton did not return an email requesting comment.
UPDATE: This just in from a Grant Thornton tipster:
While I have no actual basis for substantiating this, we have a Moss Adams wireless signal in our office in the central region. There is no Moss Adams office in our building, or even out state, its been there since about January when the rumors first popped up. I just thought it was interesting. I have no insight into any of this, I’m just a lowly peon staff…
Perhaps there’s an explanation for this but I’m no expert on the wireless signals and whatnot so I’ll leave it to you to reason this out.
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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.
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 “
BDO is trying to put the 
After yesterday’s news that