Jack Weisbaum's final year as the most interesting accounting CEO in the world will go down in the book as a good one. The firm announced $618 million in revenues for fiscal year 2012. That's an increase of 8%. Each line of business saw increases with consulting coming in 36% higher than last year, tax up 9.9%, and audit up 5.7%. Of course the consulting business only consists of 7% of the total revenues, while tax is 29% and audit is 60% (and 4% "other"). Regardless, those numbers beat a sharp rock in Jacky Boy's wingtip and it goes without saying that he and the firm really appreciate all the last-minute billable hours you jammed in there. [BDO]
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There’s Still Some Confusion About the BDO/Grant Thornton Situation in Hong Kong
- Caleb Newquist
- November 9, 2010
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.
SEC, China Will Probably Compromise Over Big 4 Chinese Affiliates Someday, Says Guy
- Caleb Newquist
- December 5, 2012
The SEC's move against the Big 4's Chinese affiliates on Monday has people all worked […]
PCAOB Is Still Overachieving: Issues Inspection Reports for BDO, Grant Thornton, PwC
- Caleb Newquist
- August 14, 2010
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.
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.
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?