There recently was a shake-up among management at the Queen’s RSM, as the firm kicked a couple people out of the C-suite after it misstated its results by almost £10 million over two years.
Sound familiar? Does anyone here remember RSM Tenon?
This is the second time that RSM’s internal accounting has tripped it up. The firm, previously called RSM Tenon, collapsed in 2013 after it mis-stated its accounts. It was then sold in a pre-pack administration to competitor Baker Tilly.
Back to the most recent RSM accounting screw-up: CEO David Gwilliam, CFO Nigel Tristem, and COO Robert Ross were removed from the management team and demoted to partner in late December.
They’ve been replaced on an interim basis by regional managing partner Jez Filley as acting CEO, head of retail Andrew Westbrook as acting CFO, and partner Jill Jones as acting COO.
According to the Financial Times, RSM made errors in its provisions for professional liability claims—legal action or regulatory fines against the firm.
The company set aside £3.8m too much for these claims in 2017 but £6m too little in 2018, resulting in a total net impact on profit of £2.2m.
The restatements “arose from an error in the calculation of the professional liability claims provision”, according to RSM’s accounts. “The directors have investigated this error and have a plan in place to strengthen the related controls and reporting procedures.”
RSM is audited by Moore Kingston Smith, which has decided not to comment about this mess.
Bosses out after auditor RSM bungles own accounts [The Times]
Auditor RSM reveals error that led to bosses’ departure [Financial Times]