Because the entire blogosphere/media is still suffering from a serious 4th of July cocktail flu, we’ll jump back on HealthSouth briefly.
Richard Scrushy, whom former CFO Aaron Beam said he would take over Hannibal Lecter (uncanny resemblance) in a fight, has been accused of HealthSouth Corp of hiding assets in order to avoid paying down some of the $2.8-odd billion that he was ordered to pay to the company after the civil proceeding.
HealthSouth says that Scrushy has $600 million in offshore accounts plus real estate in other people’s names that should be turned over. Scrushy, who we understand is held behind glass, did not comment other than that he def recommends Chianti with liver.
HealthSouth accuses Scrushy of hiding assets [AP via Miami Herald]
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Are Weiser and Mazars Making a Run for the Global 6?
As you’re aware, we’re obsessed with the notion of the ‘Global 6 Accounting Organization’ moniker. On the one hand it’s a little silly but on the other, many non-Big 4 firms are making a legitimate run to expand their international exposure.
The latest attempt at piercing the Global 6 comes courtesy of a possible merger between the firms Weiser and Mazars. According to Weiser’s website, the two firms currently have an affiliate relationship:
Mazars is an international, integrated, independent organization, ranked fifth largest in Europe. Weiser has established a joint venture with Mazars utilizing its 10,500 professionals in over 50 countries, as needed, to expand the firm’s global reach.
According to the FT, the combined firms will make a push a building their firm around providing IFRS adoption services:
Mazars and Weiser, which have had a joint venture agreement for a decade, decided to merge with the aim of building a new US practice focusing on the adoption of International Financial Reporting Standards by US companies, according to sources.
Weiser partners believe they will have an advantage in the US market working with European partners with extensive experience of IFRS.
We have a little secret to share with the Weiser partners: The Big 4 has European partners will extensive experience in IFRS too. They’re drooling for the IFRS adoption business just like you so hope you’re coming with super-secret plan that will give you a real advantage.
We contacted a Mazars spokesperson who confirmed that the talks were on-going but told us that the contract has yet to be finalized and that both partnerships will have to vote on the proposal. The vote is tentatively set for February or March.
Whether this is the “mega-merger” that was predicted back in August or not we don’t know but the combined firms would have total revenues of $1.3 billion, according to the FT. That’s just a fraction of the Big 4 revenues but it could put them in close competition with the likes of Grant Thornton, RSM International, and BDO.
We’ll continue to keep you updated on the progress of the talks as we learn them.
Mazars and Weiser merger talks point to revival of global practices [FT]
Codification Will Affect You Whether You Like It or Not
In case you’ve forgotten, the new FASB Accounting Standards Codification is all up in your shit since it is effective for all financial statements dated after 9/15/09. One source is already less than enthused about the whole thing:
[From] what I can see it requires you to go through your financials and any place you referenced something like FAS 142 you have to change it to reference one of the like 5,000 topics, subtopics, sections, paragraphs, and subparagraphs within the standard. I think Operating Leases (Lessee) will now be labeled as follows (I am serious): “840-20-a”
After we got the vomit out of our mouths, we realized that this new reference has an uncanny resemblance to IRC referencing but maybe that’s just us. This is especially disheartening for those partners who spent their entire careers committing SFASs, EITFs, and APBs to memory so that they could be the go-to technical accounting wonk. So if that’s you, consider your life’s work completely ruined.
And the PCAOB has kindly reminded you that you get NO SAY in this matter, so just accept it. On the bright side, new associates will be starting or have already so replacing all those references on workpapers should keep them busy chargeable in between making copies and calling/emailing India to check on the cash reconciliations.
This will probably give more than a few of you heartburn this season but some of you may remain clueless about it until the eleventh hour which will make for some excitement. Discuss your excitement/melancholy in the comments.
UPDATE: We had short chat with one Big 4 auditor who summed it up this way, “its fuckin retarded espcially if convergence is happening soon.” Very poignant. Convergence and soon are obviously subjective but the point is duly noted since any sort of global standards would no doubt torch the FASB’s codification.
Open Thread: Accounting Firm Outsourcing
Since it’s been nearly a year since the Presidential election, the political football of outsourcing of jobs has all but been put away. It does remain a popular topic amongst accounting firms however as more and more works is sent offshore.
Now that the programs have been in place for awhile, the pressure to utilize the staff on the other side of the world seems to be increasing. This may free you up for more fantasy football or Perez Hilton but something tells us that’s not exactly what TPTB have in mind.
Plus there’s the whole time change thing. Maybe that’s NBD but staying up until 10 pm for a 30 minute meeting to coincide with your global counterparts doesn’t really strike as a party.
We’ve reached out to the Big 4 on this and we’ll update you with any responses we receive in a separate post.
For now we want your input and experiences. Is outsourcing working for your team? Does it even affect your team? Are the firms really concerned about new associates “doing more challenging tasks” or is this purely a cost saver? What do you make of the process on the other side of the blue marble? Are they being utilized effectively or are you dealing with impossible logistics? Okay that’s enough questions. Discuss.