Category: News

Promotion Watch ’10: Rothstein Kass Names Four New Principals

Jeff Kollin, Camille Asaro, Frank Attalla and Navin Sethi come on down!


Asaro and Kollin rep the New York office, Attalla in Roseland, NJ and Sethi gets the nod in San Fran.

Ms. Asaro and Mr. Attalla are members of the Rothstein Kass Financial Services Group. Mr. Sethi, a tax Principal is a member of both the Financial Services Group and the firm’s Commercial Services Group. Mr. Kollin has been named Principal and Head of the Financial Services Advisory practice within Rothstein Kass Business Advisory Services, LLC, a Rothstein Kass affiliate. Rothstein Kass simultaneously announced the promotion of Rich Sumida to Senior Director at Rothstein Kass.

Son of the Kass (presumably, the firm is 50-ish) takes the mic:

“The collaborative culture at Rothstein Kass has ensured that our professionals are able to continually enhance their skills and expertise throughout their careers. Our ‘one-firm, one-floor,’ philosophy remains a cornerstone for our success. Staff at all organizational levels gain invaluable experience working side-by-side with seasoned industry veterans in support of our clients. The companies we serve, in turn, benefit from the continuity, proficiency and knowledge that result from our ability to hire and retain superior talent across practice areas and office locations,” said Steven A. Kass, Co-CEO and Co-Managing Principal of Rothstein Kass. “Camille, Frank, Navin and Jeff are engaged, insightful and dedicated members of the Rothstein Kass team, and have demonstrated exceptional leadership qualities during their time with our firm. On behalf of our entire organization, we would like to congratulate our new Principals on their achievements and thank them for their contributions to our success.”

Not much to add here other than 1) congrats to the new RK principals and 2) the “one-firm, one-floor philosophy” could have really helped a certain Crowe Horwath partner.

Author of “Alan the Accountant” Wants Parents to Talk to Their Kids About Offshore Tax Havens

Last week we told you about the most important contribution to children’s literature since Mother Goose, “Alan the Accountant” (download it here).

Alan the Accountant may not be the most traditional book in the “turn the page” sense but it will no doubt get the kids thinking about double-entry at an early age and you can never get the kids started on the career path too early, amiright?

After downloading this gem and reading it a dozen times or so, we felt prepared to discuss it seriously.

We had the distinct pleasure of tossing a few questions at the book’s author, Jinky Fox, to see what sort of plans he has for Alan, how he managed to skip out on his accounting career and why it’s never too early to talk to your kids about offshore tax havens.


So you planned to become an accountant but got “sidetracked into fine art.” A couple of questions related to this: 1) By “planned” does that mean you enrolled in a class, walked in and saw the people, turned right around and walked out? 2) Does getting “sidetracked into fine art” have anything to do with a) your pursuit of a sexy art student b) drugs c) walking into the wrong classroom d) all of the above.

I started an accountancy class and walked out after a year. Not because of the nightlife which was everything I subsequently found at art school and more. Accountants definitely know how to party. Rather I hadn’t been introduced to creative accounting. Now I see those figures differently. They can tell a tale as exciting as a six volume 19th century novel or a four hour black and white Swedish epic. There is an art in the numbers.

We’re still of the opinion that there was a sexy art student. Moving on…You say “The series of books planned for Alan the Accountant will help me examine the exciting world of Accountancy that I turned my back on.” This begs a few more questions: 1) “Exciting?” 2) What have you learned about the profession that surprised you and how will you get the kids interested? 3) What makes you think the accounting profession will embrace you after you abandoned it? Accountants can be a touchy bunch, you know.

Fiction lets writers and readers live different lives. We might not be able to live the life of a 17th century nobleman, but we can read Les Trois Mousquetaires. We might not be pirates but we can read Treasure Island. I am not an accountant, but Alan allows me to explore my life had it taken a different route.

Artists rarely sit on the boards of large companies, but accountants have the keys to these exciting corridors of power. Art and accountancy might seem to be unrelated but there is an unexplored link between them. This has been expressed most famously by Andy Warhol when he said, ‘Making money is art, and working is art and good business is the best art.’

Will accountants embrace Alan? I hope so, and I don’t think that a teenage indiscretion will blight their enjoyment. And anyway, it’s not too late for me to retrain.

Well, we’re on your team and despite what some might say, that’s a decent endorsement. Anyway, getting more serious…In this book, you examine the possibilities for Alan’s happiness, which include his finding of an offshore tax haven. Is this really the example that we should be setting for children? I mean do we really want to be having the “UBS conversation” with our kids at such a young age?

Offshore tax havens are an important part of life. Is it wrong for children to learn that some kids have to say goodbye to their friends and go and live on a British dependency in the middle of nowhere? No, I say! They might be the ones ripped from their beds and flown to a sweltering island, only allowed to go home 90 days a year. Life’s not all ipods and ice cream, we have to be honest!

Have it your way but don’t come crying to us when Fox News gets ahold of this. Next – Here in the U.S., accountants are nearly as revered as they are in the UK. You guys have an awards ceremony over there for crying out loud. Do you think that your book can help bridge the prestige in the UK over the U.S.?

I hope that my little book will bring accountants to the collective bosom of the people. I see a time when Alan the Accountant is the top rated kids’ show on TV. Children of all ages will dream of becoming accountants. Our universities will be so full of accountancy students they will stop teaching all other subjects. Our shops will sell out of calculators, accountants around the globe will be lauded and admired, statues will be built of senior partners and it will all be thanks to Alan.

Honestly, the idea of a Tim Flynn statue is a tad frightening but we like your enthusiasm. Speaking of…More books featuring Alan are forthcoming – what do you have planned? Adventure? Excitement? Adjusting entries?

Accountancy is a field that has not been mined for children’s books before so there is plenty of scope for stories set in the world of high finance. Accountancy is awash with slang and acronyms that are made for children’s books. Titles planned for future editions of Alan’s book include ‘My first investment account’, ‘Adventures in negative growth’ and ‘Darling, come quickly, Freddie just said his first word – EBITDA’

Hey Media, Leave the Accounting To Us Mmmkay?

When Going Concern first launched a year ago, I know we heard more than a few chortles from the audience at the very idea of an accounting news site (or tabloid, depending on who you ask) because, really, how interesting can accounting be? Of course we’ve since learned that cube-dwellers, financial professionals, college kids and accounting enthusiasts are totally into what we do because no one was doing it before and someone had to.

It’s easy to forget that we’re not only utilizing this avenue to rip on obvious boneheads who try to manipulate our precious accounting (we’re talking to you, Patrick Byrne) and make fun of idiot celebrities who don’t pay their taxes but also to bring an accounting awareness to the world at large. It’s not all number-crunching and despite the stereotypes that we ourselves perpetuate, we’re also providing a service by making the obscure world of accounting digestible to non-accountants.

Which is pretty much the entire reason why other media outlets need to back off and leave the really super complicated reporting to us if they’re going to get into things they don’t understand.

Case in point, American Apparel.


The headline was really that American Apparel has been taking the active accounting defense stance lately, getting fired by Deloitte (hint if you’re not into the accounting: that doesn’t happen very often. The other way, perhaps, but the auditors very rarely get spooked and bail like that), rapidly bleeding precious capital and sort of “forgetting” to file important check-ins with the SEC. Oops. That’s where the doubt arises in “going concern doubt”.

In fairness to some media outlets, not everyone bumbled the headline. But for these two, we need to define the term “going concern.” This might be too hipster ironic, even for me.

Thanks, InvestorWords, I’m too lazy to type out this definition myself:

The idea that a company will continue to operate indefinitely, and will not go out of business and liquidate its assets. For this to happen, the company must be able to generate and/or raise enough resources to stay operational.

And then we can get into American Apparel’s future a ‘going concern’ via Marketplace and American Apparel Warns of ‘Going Concern’ via the Los Angeles Business Journal. Yeah, to clarify: that’s what we want, American Apparel has the doubt part to worry about, which was conveniently linked to directly from AA’s preliminary 10-Q to the SEC. See, it’s laid out there for you, all you have to do is read it.

Anyway, I’m not annoyed when people like Emily Chasan write stories about this stuff because she knows what she’s doing. Caleb gets away with it because he knows what he’s talking about. I stick to what I know – ripping on regulatory agencies and bitching about the general state of the industry – and pull it off. There are a ton more accounting writers I could name (Bill at CPA Success, Rick at CPA Trendlines, Francine at Re: the Auditors, Professor David Albrecht, Jim Peterson at Re:Balance, blah blah blah) but I would end up leaving out quite a few talents and I’d hate to offend anyone. Ha.

My point is that you don’t have to be one of them to get the story right. That’s all I’m saying.

The irony of this is not lost on me. I don’t wear American Apparel dammit but I half dress like this awful stereotypical hipster. Don’t ask me what to wear on CPA exam day, I stick to what I know.

A Sign of Things to Come? Walgreen Outsourcing 150 Accounting Jobs

Apparently this is part of WAG’s ‘Rewiring for Growth’ initiative. And by ‘rewiring’ they mean cutting $1 billion in expenses by next year (no pressure).

As many as 150 accounting jobs could be eliminated at Walgreen Co.’s Deerfield headquarters within the next 10 months as the drugstore giant outsources the work.

The job losses result from Walgreen Co.’s agreement with process-outsourcing firm Genpact, based in India, to take over certain accounting work.

Genpact has agreed to acquire Walgreen’s accounting office in Danville, Ill., where 500 former Walgreen employees have become employees of Genpact.

Another 300 Walgreen jobs, including the 150 in Deerfield, will be affected by the move. The remaining 150 jobs are scattered among Walgreen accounting offices nationwide, a Walgreen spokeswoman said Monday.

An unspecified number of Walgreen accounting department employees who remain employed will be shifted to other jobs or see their positions changed drastically, the Walgreen spokeswoman said.

Problem is “positions changed drastically” could be anything from the mailroom to working the counter at your respective local store on Christmas Day.

Walgreen outsourcing deal to cut as many as 150 accounting jobs [Chicago Sun-Times]

Good Riddance to Old Lease Accounting Rules

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

I see that FASB is sticking to its schedule for ending most off-balance-sheet treatment for leases, and so is the IASB. It’s about time, frankly, if only to spare us poor, I mean, intrepid financial journalists from having to sort through the particulars of the current accounting treatment a moment longer than necessary.

I speak from personal experience here, having wrestled with the false distinction between capital and operating leases for a sidebar to a piece I wrote for CFO Magazine way back when. The article delved into the details of a particularly complex variation that companies were using to finance real estate, called synthetic leases.

I swear, that sidebar itself shaved a year off my life, and at my age, every one counts, and did even a decade or so ago.


In fact, the hoops that companies must jump though to get a deal to qualify as an operating lease still make my head spin. Consider: In order to qualify, the current rule, known as FAS 13, requires that the lease fail all of four tests aimed at distinguishing the financing from being the equivalent of ownership.

The thing that puzzled me about all this is that many, if not most, CFOs claimed that accounting treatment wasn’t the reason, or at least not the main one, that they used such financing techniques in the first place.

But the reason they gave often came down to their advantageous cost, and like all off-balance-sheet financing techniques, I could never quite understand how that lower cost arose without the accounting treatment.

After all, it seemed to me the only reason operating leases were less expensive than capital leases was that the underlying asset wasn’t counted as the property of the company by a sufficient number of investors willing to therefore pay a premium for the company’s equity. And if they did that, they were ignoring the fact that the asset was indeed the property of the company on anything other than a narrow, legal basis, and that the arrangement wasn’t financing its purchase.

So tell me again how off-balance-sheet financing results in lower cost if it doesn’t really do that.

Local Man Gives Up Audit Gig to Live Off Coupons, Risk Homelessness, Suffer Yoga Injuries

Josh Stevens of Chicago was done with his corporate audit job. The glamour of cube farm life had lost its allure and lucky for him, a challenge that only an accountant could embrace.

He decided that he would accept the challenge from Internet sensation du jour Groupon to live on coupons for an entire year, “I had done corporate auditing for a year, and I decided I didn’t want to sit in a cubicle every day. I thought I’d go back and get more education, and right as I started working on those applications, this fell in my lap.”

“This” includes traveling all over this great land, living off of coupons but there are a few rules that could make things difficult for Stevens including:


• “Stevens can’t use or even touch money.”

• “He’s allowed only five visits from family and friends, with each visit lasting less than a day.”

• “Strangers, fans and supporters may donate a place to crash for the night, a car ride or plane ticket.”

So how does Josh handle not being able to have his skin touch cold hard cash and more or less being celibate (his girlfriend can’t visit him) for an entire year?

“It’s the logistics. It’s really hard to plan in advance for anything. You don’t know how to get from place to place. You don’t know where you are going to be so it’s hard to plan where you will go and who will give you rides.” Of course his ability to be a “cross between Anthony Bourdain, who is trying new things, and MacGyver, who has to be resourceful,” has proven helpful (e.g. getting manicures) as has his willingness to rely on the kindness of strangers (one couple let him stay with them for two weeks).

However, there was one instance where his adventurous nature backfired, “I kind of overdid it with a yoga class I did in Washington, D.C. I don’t know much about yoga. I think I just overstretched. I was fine that day. And the next day and then a day after that, all of my muscles tensed up, and I struggled with it for a few weeks.”

Despite this setback, Josh is plugging along and we’re rooting for him to win the $100k if completes the challenge. Hopefully he’ll spend some of the winnings on his girlfriend and maybe give yoga another shot.

Man tries living on coupons for a year [CNN]

McGladrey’s Andrews: ‘We’re Doing Pretty Well’

The Minneapolis Star-Tribune recently did a sit-down with McGladrey President C.E. Andrews and from the sounds of it, C.E. is pret-tay, pret-tay, pret-tay pleased with how things have gone at Mickey G’s since he’e been on board saying, “We’re doing pretty well.”

Now the particular context of this statement could be taken a number of waerring to the recent acquisition of Caturno & Co. or he could be talking about the firm’s recent rebranding that involved plenty of refreshments, or he’s just pumped to get regular photo-ops with Natalie Gulbis OR it could be that he’s subtly referring to how good McGladrey is at layoffs.


Based on what we read, it’s most likely the handing out of sugar stimulants:

“Big companies tend to be inwardly focused. You drink your own Kool-Aid,” said Andrews, who knows something about large companies. He’s a former partner at Arthur Andersen and had a front-row seat for the demise of the consulting firm in the wake of the Enron debacle, then went on to run Sallie Mae before joining McGladrey.

The restructured McGladrey has just five people overseeing the revenue side of the business, and a system that rewards managers who improve client service and produce growth “rather than for internal things,” Andrews said. “We’ve gone from a local measurement system to a national measurement system.”

No real room for misinterpretation there. As you all know, drinking Kool-Aid isn’t something that McGladrey takes lightly.

But then again, maybe he is referring to the recent acquisition of Caturno. C.E. is thinking that it’s been a pretty solid move and there is more where that came from:

“This thing has the appearance of being as good a fit as anything I’ve ever been a part of,” Andrews said. He said each firm had strengths that the other lacked in the New England region. It’s a model for the kinds of acquisitions McGladrey is looking to make, he said.

That includes San Francisco — though Andrews said nothing’s teed up yet.

This rhetoric is strange if you consider the aforementioned layoffs, some employees considering dumping Mickey G’s for Mickey D’s and a disappointing year where the firm saw a 39% drop in its pre-tax income.

But despite all that, C to the E has big plans for McG and they don’t include keeping things local:

McGladrey offers prospective targets connections to RSM International, the sixth-largest network of independent accounting, tax and consulting firms, Andrews said. That’s becoming more important in today’s economy when even midmarket firms — which he called McGladrey’s “sweet spot” — now have operations in far-flung places like China or India.

“The attractiveness of truly local providers is diminishing,” Andrews said.

BUT! Don’t you go thinking that McGladrey will be like one of those firms, “We have the same kind of capabilities as the Big Four [accounting firms] … but delivered with an outstanding local touch.”

So, he backhands the local firms but then casually embraces their ‘delivery’ to take a jab at the Big 4. So, if we understand this correctly, McGladrey is a big firm, but isn’t like a big firm, and that’s their advantage. Got it.

McGladrey seeking more acquisitions [Minneapolis Star-Tribune]

Inside Public Accounting’s Top 100 Firms List Has Few Surprises

Inside Public Accounting put out their annual ranking of accounting firms this month and like the Accounting Today list, it is based on revenues so it barely causes a stir.

Not that we don’t appreciate the distraction in the middle of August but the list doesn’t have any surprises and is nearly identical to AT’s. Nevertheless, we’ll present the top 25 firms here for your dissecting enjoyment (previous ranking in brackets):

1. Deloitte [1]
2. Ernst & Young [2]
3. PricewaterhouseCoopers [3]
4. KPMG [4]
5. McGladrey [5] (who is still calling this firm “RSM McGladrey” and “McGladrey & Pullen”? They had cake and punch for crissakes.)


6. Grant Thornton [6]
7. Mayer Hoffman & McCann/CBIZ [8]
8. BDO [7]
9. Crowe Horwath [9]
10. BKD [10]
11. Moss Adams [11]
12. Plante & Moran [12]
13. Clifton Gunderson [14]
14. Baker Tilly Virchow Krause [17]
15. Marcum [20]
16. J.H. Cohn [15]
17. UHY Advisors [16]
18. LarsonAllen [19]
19. Reznick Group [13]
20. Dixon Hughes [18]
21. ParenteBeard [35/36]
22. Rothstein Kass [21]
23. Eide Bailly [22]
24. Eisner [23]
25. WeiserMazars [24]

So then. The top 5 is a snoozer, per usual. You can see that the the firms that experienced a merger or acquisition in the past year are the ones that jumped the most (e.g. BTVK, ParenteBeard, Marcum) with the exception of WeiserMazars, a merger that was an international play as opposed to a domestic one. And since rumored mergers don’t count you don’t see the Eisner Amper effect here. Reznick Group experienced the most significant drop which can’t be explained at this point but we’d love to hear theories.

Full Report [PDF]

American Apparel Goes Two for Two: Q2 Filing Late, Q1 Still Pending

Fashion cannot be rushed people. Ask the gang at Fashionista. They’ll tell you.

However, it is still a business which sometimes includes dealing with auditors and other outsiders that want various documentation and whatnot that can simply be delayed if it hinders the creative process. That is, if you keep your company private.

But the second you want to give the American public the opportunity to invest in your skinny jeans, leggings, and thong tanks, you’re playing on the SEC’s turf. This means things happen on a schedule. Delays, excuses or pervy CEO behavior will not be tolerated if it results in late filings.

American Apparel expects to report a loss in the second quarter and requested additional time to file its financial report after the resignation of its auditor, Deloitte & Touche.

It is the latest bump for the hipster clothing chain. The company said in May that it expected a loss for the first quarter, but it hasn’t filed that quarterly report with the Securities and Exchange Commission either.

[…]

Deloitte & Touche resigned as American Apparel’s auditor after the accounting firm said it found material weaknesses in internal controls over financial reporting. Deloitte requested more information from the company to determine if there were problems in previous financial reports. American Apparel said Tuesday it was working to provide that information.

Dov! These 10-Qs are not optional! Plus, it doesn’t help that the financial data that you provide is less reliable than what the federal government issues.

Presumably Marcum was persistent (and comfortable) enough to get you to push the button before so what the hell man? You’ve got them back on your team so this should NBD. You best get the house in order before your stock gets banished to the sheets that are the same color as your undies.

American Apparel expects 2Q loss; request 2Q delay [Bloomberg BusinessWeek]

Earlier:
Deloitte Resigns as American Apparel Auditor; Hotness of Engagement Team Presumably Not an Issue

Just So You’re Aware: There Is Now a Children’s Book Featuring An Accountant…For Your iPhone

No doubt that there’s many a fine accountant that wished there was a children’s book that they could read to their 0-4 year-old to demonstrate that it was an honorable and worthwhile calling.

Similarly there are many parents these days that wished for such a book that could be read without the annoyance of your skin touching paper and also the ability to check in at the local coffeehouse on Foursquare.

The wait is over.

Alan the Accountant is the first in a series of new books starring people in careers that are not usually associated with children’s books. Why should only builders and postmen find fame in children’s books?! Accountants are vital to the world economy, yet children are not encouraged to say I want to be an Accountant in the same way they learn about other careers. This book resets the balance.

[…]

As a student the author Jinky Fox planned to become an accountant, but was sidetracked into fine art. ‘The series of books planned for Alan the Accountant will help me examine the exciting world of Accountancy that I turned my back on,’ commented Jinky.

You see people? Jinky is giving back to the profession he left behind. Admirable to be sure. He’s so committed to the profession that there are plans to have Alan star in future books.

Now for you religious types, you may be disturbed by Alan sans pants but rest assured, this is a book for the whole family and the sanctity of your household is not at risk and it could do wonders for your personal financial management.

[via Accounting Tomorrow]

Eisner, Amper Politziner Playing Coy on Merger Rumors

NJBiz reports that New York-based Eisner is planning to merge with Edison, NJ-based Amper Politziner & Mattia LLP. The two firms – ranked 24th and 26th in Accounting Today’s most recent list of Top 100 firms – combined would have 1,200 employes and over $250 million in revenue.

This would shoot the combined firm – working name: Eisner Amper – to 14th on the list (based on revenues) ahead of Clifton Gunderson and hot on the heels of Baker Tilly Virchow Krause.


From the looks of it, the merger would benefit Eisner’s presence in the Garden State while APM would have much better access to the NYC market.

Eisner’s CEO Charles Weinstein wasn’t reached for comment and Amper CEO Howard Cohen told NJBiz, “We have no binding legal documents with any firm at this time,” which, as far as we’re concerned, basically means that it’s a done deal and the lawyers are still sorting out the signing pages.

Of course there’s always the slim chance for a board room blowup and the whole thing gets called off but we’re all hoping for the best.

EXCLUSIVE: Amper Politziner plans merger with Eisner [NJBiz via Web CPA]