Tag: Partners

Promotion Watch ’10: KPMG Admits 58 New Partners in U.S.

Despite the Irish blowing it against Michigan, John Veihmeyer managed to compose himself and still allow a few more lucky girls and boys take a seat at the big table.

Congratulations to Our New U.S. Partners

A Message from John Veihmeyer and Henry Keizer 8:56 AM ET, September 15, 2010

We are proud to announce our 58 new partners in the United States!

Through their passion for quality and unyielding commitment to integrity and outstanding service, these new partners are role models for high performance within our organization.

Their dedication to the highest standards of technical excellence, professionalism, teaming and relationship building has helped us make great strides in achieving each of our strategic priorities. And their continued leadership will be essential in capitalizing on the opportunities ahead.

Each of these women and men strive every day through their support and mentoring of fellow professionals to make KPMG an Employer of Choice. They have unique perspectives and experiences – 38% of this year’s new U.S. partner class are women and ethnic minorities. In addition to their diverse backgrounds, over half have worked in more than one office — many on global assignments — and almost 1 in 5 have worked in more than one function. These impressive individual accomplishments exemplify that KPMG truly is a “great place to build a career.”

The significant contributions that these outstanding individuals have made to our firm would not have been possible without the encouragement of spouses, family, friends, co-workers, and mentors, so we also want to thank all those who have supported our new partners through their careers.

Congratulations again to all of our new U.S. partners. Our partners across the firm are proud to welcome them into the KPMG partnership.

Breakdown by practices
Audit: 24
Tax: 12
Advisory: 21
Office of General Counsel: 1

Congrats to all the new partners!

KPMG Pleased That Premature Audit Sign-offs Weren’t on Failed Audits

If you’re the partner on an engagement and you know, deep down in your plums, that the numbers are fine, you probably get pretty anxious to sign off on this bad boy. You want to go on vacation or a golf date with Phil or – if they’re lucky – spend some time with the family. With that in mind, it’s not so unusual that he/she might jump the gun a little and slap down the Johnnie Hancock before all the work gets done.

Unfortunately, as anyone studying for the audit section of the CPA exam will tell you, this is against the rules.


But hey! If the numbers are hunky-dory, there’s not much cause for concern and everyone has a good laugh:

In the case of KPMG, the FRC’s Audit Inspection Unit looked at 15 audits and found that in three cases the auditor’s report had been signed too soon. Significant changes were subsequently made to the accounts in one case.

Paul George, director of auditing at the FRC’s Professional Oversight Board, which includes the AIU, said the early sign-off problem was not limited to KPMG: “It is a profession-wide challenge to some degree.”

KPMG said it accepted the AIU’s comments. “We are pleased to note that in no case did they think that the audit opinion we issued was incorrect,” said Oliver Tant, head of its UK audit arm.

See? It happens everywhere! Plus, it’s not like accounting and auditing are based on rules that anyone takes that seriously, anyway.

Okay, sure signing off early on 20% of the audits sampled sorta looks bad but at least the numbers weren’t wrong. It would be really awkward to explain that.

Watchdog raps KPMG over early audit sign-off [FT]

Ex-Deloitte Partner, Son To Shell Out $1.1 Million to Settle SEC Insider Trading Charges

Last we had heard of Thomas Flanagan, Deloitte had just taken him to the woodshed, successfully suing him for breach of fiduciary duty, fraud, and breach of contract related to Tom’s insider trading activities of Deloitte clients.

Now it’s the SEC’s turn to get in on this sweet action. The Commission charged Flanagan and his son, Patrick Flanagan for insider trading of Deloitte clients including Best Buy, Sears, Walgreens and Motorola.

Why Flanagan, the 38-year veteran of Deloitte and Vice Chairman of Clients and Markets, who thought that in the twilight of his career, the best move would be to engage in some insider trading is still a mystery. Since he was presumably pushing 60, one couldn’t help but wonder if perhaps his memory was going and he just totally spaced the independence thing.

But actually, no. Turns out, Tom Flanagan is just a liar:

According to the SEC’s complaint, Thomas Flanagan concealed his trades in the securities of Deloitte’s clients and circumvented Deloitte’s independence controls. He failed to report the prohibited trades to Deloitte, lied to Deloitte about his compliance with its independence policies, and provided false information to Deloitte’s personal income tax preparers about the identity of the companies whose securities he traded.

Flanagan & Son will be paying over $1.1 million in disgorgement and fines for their little stunt. And Robert Khuzhami had a little reminder for anyone else out there that thinks they can get cute, “Flanagan’s insider trading violated one of the most fundamental rules of public accounting. All audit firms should learn from this unfortunate episode and employ vigorous controls designed to ensure compliance with the SEC’s auditor independence rules.”

SEC Charges Former Deloitte Partner and Son With Insider Trading [SEC Press Release]
SEC Complaint Against Thomas Flanagan and Patrick Flanagan [SEC Complaint]

A PwC Partner’s Scribbled Notes Helped Save Joe Cassano’s Hide

Back in April, the DOJ and SEC passed on filing criminal charges against the man everyone perceived to be the cause of the financial apocalypse, Joe Cassano.

The Journal digs into a few of the details behind the failed pursuit of criminal charges against JC and we first learn that PwC’s audit team wasn’t rve when they were poking around AIGFP:

Auditors at PricewaterhouseCoopers, AIG’s accounting firm, felt Mr. Cassano was evasive when they asked questions as the housing market weakened that year, according to people familiar with the matter. Tim Ryan, a PwC auditor, was concerned about requests for collateral from Goldman Sachs, which had purchased AIG’s derivatives contracts. He believed the requests were an indication the value of the swaps needed to be lowered and that further collateral calls were likely, people familiar with the matter said.

In interviews in 2008, Mr. Ryan told prosecutors he sometimes couldn’t get straight answers from Mr. Cassano when he asked him to justify how AIG accounted for the swaps, these people said. Through a PwC spokeswoman, Mr. Ryan declined to comment.

Okay, so Cassano was a prickly guy. That’s no surprise, especially since the lion’s share of people that have to deal with auditors, dislike them based purely on spite. Regardless of that factoid, it irks auditors to no end when they have to deal with an uncooperative client.

Cassano’s attitude was noted by prosecutors and this led them to believe that maybe he was withholding information from PwC and the AIG brass about the shitstorm that was growing at AIGFP:

“Why would he do that?” said Jim Walden, one of Mr. Cassano’s attorneys. Mr. Cassano had no reason to hide key facts because he knew the year-end audit was approaching and the unit’s books would be examined.

“He was smart enough many times before” in surviving prior problems, Mr. Pelletier retorted. “He thought he could pull a rabbit out of the hat” and turn things around.

In meetings spanning several weeks in Washington, the defense team rebutted the prosecution’s allegations, presenting a version of events that portrayed Mr. Cassano as repeatedly disclosing bad news to his bosses, investors and PwC.

The defense team didn’t know it at the time, but its efforts helped focus prosecutors’ attention on an obscure set of handwritten notes in their files, found scrawled on the bottom of a printed spreadsheet.

Prosecutors had seen the annotations, which were made by a PwC partner at a meeting with Mr. Cassano and AIG management a week before the key December 2007 investor conference. But the strange hieroglyphs from the world of financial derivatives were hard to decipher and ambiguous enough to support several readings.

Some of the broken phrases that could be made out: “Cash/CDS spread differential,” “need to quantify” and “could be 10 points on $75 billion.”

At this point, prosecutors knew that the jig was up, regardless if started out as a good jig or not. As much as they wanted to pin the near death experience of the financial world on this one shifty (and easily unlikable) guy, they couldn’t. The fact that no one that was at the meeting in Dec. ’07 could remember anything, “According to people familiar with the matter, no one at the meeting—including the author of the handwritten notes—recalled Mr. Cassano disclosing the magnitude of the accounting adjustments he was preparing to make,” certainly didn’t help matters. Especially since, for all we know, the partners’s chicken scratch could have been a recipe for pineapple upside down cake.

And after failing to nail Matthew Tannin and Ralph Cioffi back in November of ’09, the feds could hardly go to trial on such shaky ground. Sigh. OH well! Can’t always catch the (perceived) bad guys!

A Set of Scribbled Notes Helped Scuttle AIG Probe [WSJ]

Which Big 4 Firm Is Getting Extra Anxious to Sign Off on Audit Reports?

In this morning’s roundup we linked to the Accountancy Age story that reported the Audit Inspection Unit in the UK found that “Auditors have also been accused of altering documents before handing them to regulators and putting cost savings ahead of quality,” but also “The report also found some cases where partners signed audit reports before the audit was complete.”

Obviously this is no good but since the report was relevant to the FTSE 100 (and the report doesn’t name names), we just figured that this was just a blanket statement about the Big 4. However, over at FT Alphaville, Tracy Alloway shared a clipping from the report that got a little more specific:


“This issue appeared to be more prevalent at one major firm.” Okay! So one firm has a few extra partners that have itchy trigger fingers. This obviously begs the question of “which firm?” If you prefer to play the numbers, here’s the latest breakdown of the FTSE 100 we can find: PwC – 41; KPMG – 24; Deloitte – 20; E&Y – 17 (we realize the numbers don’t add up to 100, take it up with Accountancy Age).

But this is America, so we’ll put it to a vote:

Lots of Appointing Going on at KPMG Today

Namely Jim Liddy the new Vice Chair – Audit; Tom Duffy – National Managing Partner – Audit; Scott Ozanus Vice Chair – Tax; and Jeff LeSage National Managing Partner – Tax.


And on such a grand occasion, John Veihmeyer gets to say lots of nice things about all these guys even though at least one of these guys is probably gunning for his position.

Jimbo: “Jim Liddy has a remarkable record of providing deep insights to financial service clients and companies in other sectors about their businesses and growth strategies, and is a proven leader. I’m confident that with his intense focus on audit quality, Jim will build on the strong audit practice that Henry Keizer created over the past five years to help ensure KPMG’s continued success.”

Tom: “As the newly named national managing partner – audit, Tom Duffy will team with Jim Liddy to lead our audit practice. Tom has considerable industry experience and a proven track record of delivering audit quality and exceptional service to our clients.”

Scottie: “We’re looking forward to Scott’s leadership during this important period for our tax practice and KPMG’s clients – as companies cope with legislative and regulatory changes, and seek clarity in complex challenges related to transfer pricing, restructuring, renewable energy and a variety of other areas.”

Jeff: “As the new national managing partner – tax, Jeff LeSage will team with Scott Ozanus to lead tax, bringing global tax experience, industry insight and outstanding client service skills to this important role.”

Congrats gentlemen. Not sure if these particular positions get you 18 with Phil or not but we’re sure they are sweet gigs all the same.

KPMG Appoints Jim Liddy Vice Chair – Audit [PR Newswire]
KPMG LLP Appoints Scott Ozanus Vice Chair – Tax [PR Newswire]

KPMG Partner Thinks It’s Really Unfair That Audit Firms Keep Getting Sued

You know what sucks? Getting sued. Ask Bill Michael, KPMG’s UK head of FS. He’s pretty sick and tired of all the sue-happiness going on in the world today. Sure, the financial crisis nearly destroyed the world as we know it but dammit, blaming auditors is downright ludicrous. Why? Because it’s unfair.

Bill Michael, UK head of financial services at KPMG, attacked what he described as “unfair”, “deep pocket” lawsuits which pay “little or no attention to the balance of responsibility between auditor and management”.

“We operate in a highly litigious environment where the balance of risk and reward has driven us to a world of caveats,” said Mr Michael. “Any corporate failure or financial loss invariably carries with it the risk of suing the auditor.”

Right. Because in law school they teach future litigators to “pay attention to the balance of responsibility between auditor and management.” Supposedly Bill Mike would like everyone to start respecting the Big 4 business model and leave them alone to do their work. Because in case you hadn’t heard, this is a life and death matter for accounting firms, you know:

“I can tell you, we are acutely aware of risk management and its consequences from both an individual and a firm perspective.

“You only have to look at what happened to a great firm like Arthur Anderson after its audit of Enron,” said Mr Michael. Arthur Anderson was eventually cleared after its audit of the collapsed energy trader, but the accountancy has already folded as a result.

He also criticised the “enormous rewards for failure” in the banking industry, drawing attention to the way some of those responsible for the collapse of major firms were able to move to other banks or hedge funds.

“The risk-reward relationship is not only lop-sided; it impairs our ability to provide broader observations,” said Mr Michael.

Describing the sometimes tense relationship between accountants and the firms they are auditing, he said that each review often started with the premise of “we don’t trust you”.

So in other words, get your witch hunt on with the banks and hedgies but leave us the hell alone. Nobody likes us the way it is.

Litigation culture is ‘unfair’ warns KPMG accounting head [Telegraph]

(UPDATE) Promotion Watch ’10: Grant Thornton Admits 22 New Partners/Principals

From a voracious reader of Stephen Chipman’s blog:

GT just announced the admission of 22 new partners/principles notably 5 from NY, 5 from Alexandria and 3 from NC – 9 from audit 3 from tax and 3 from advisory


Yes, we realize the numbers don’t work but we’ve confirmed the details we’ve got. We hear there’s an email floating around out there so if you’ve got it handy, fire it our way.

We also heard that comp news has finally gone out so kindly report below or shoot us the details.

UPDATE – July 14, 2010: We received a copy of Stephen Chipman’s email which we’ve presented here for your reading pleasure.

Internal distribution only
Partner/Principal Admissions
One of the highest and most visible forms of demonstrations of stewardship within a partnership come thorough admitting new partners and principals. This represents a critical underpinning for our continued vitality and success. It is within this context that we are pleased to announce the following individuals will be admitted to the Firm as partners or principals, effective August 1, 2010.

Having outstanding partners and principals is an important differentiator for our Firm in our ability to serve our clients with distinction. Each of these professionals has demonstrated their dedication to making a difference – to our clients, to our profession, to our communities in which we live and work, and to our Firm. Their commitment is reflective of personal responsibility, sacrifice, and accountability which we now pause to recognize.

Please join us in congratulating them on this significant recognition of their contribution and in wishing them continued success as partners and principals of Grant Thornton.

Stephen

And here’s a further breakdown of the promotions by service line:

Global Public Sector – 5
Transaction Advisory Services – 2
Corporate Tax – 2
Audit – 9
Corporate Advisory and Restructuring – 2
Corp. Strategic Federal Tax Services (can some demystify this acronym?) – 1
State and Local Tax – 1

And by city:

Alexandria – 5
NYC – 4
McLean – 1
Kansas City – 1
Cleveland – 1
NY – Melville – 1
Charlotte – 2
L.A. – 1
Raleigh – 1
San Diego – 1
Denver – 1
Atlanta – 1
Wisconsin (Milwaukee?) – 1
Chicago – 1

Congrats to all the new partners and principals at Grant Thornton!

(UPDATE) PwC Houston Happy Hours Still May Not Be Safe

It’s been a couple of weeks since we reported on the alleged incident at a PwC happy hour that involved a drunk (or roofied, depending on who you ask) partner who made his fondness for an associate known only to follow it up with a knuckle sandwich (we’re picturing a right cross).

Well, we decided to check in with a source down in H-town to see if there was any blowback from this whole situation.

I heard that PwC wasn’t going to do anything because of his client relationship and only offered the guy the chance to get off the job.

Well! Not exactly what we expected hear and we decided to check things out. Through a friend of capable means, we were able to verify the partner’s employment with the firm.

So then we emailed PwC spokesman Jon Stoner again about the incident but we have yet to hear back. Then we called the partner-in-question and left him a voicemail, asking very nicely to call us back. So far, he hasn’t returned our call but there isn’t any evidence by his greeting that he has left the firm.

So…you can see the conundrum here. What are Houston assurance associates going to do if they can’t drink beer on company dime without fearing a punch in the mouth (and possible getting an unwanted tongue down their throat)? Spend their own money? God forbid. If you know more about this, get in touch.

UDPATE: Just a few more details to share with you – we’ve heard from multiple sources that there were multiple kissing incidents at the happy hour. So while it sounds like more love (albeit unwelcome) was being spread than violence, that doesn’t mean you should be risking the invasion of your personal space for a few cocktails.

BDO Does Some Ribbon Cutting, Opens Raleigh, NC Office

More good news out of B to the D to the O as the firm announced today that it is opening an office in Raleigh, North Carolina (full press release after the jump). This will be the 39th office in the U.S. and fourth in North Carolina. The firm also has eight affiliate offices in the state.

In the process, the firm managed to pick up former Ernst & Young audit partner Michael Dannar (a refugee perhaps?).


The good times at BDO have been aplenty lately as the firm just admitted five partners on July 1 and was given a mulligan on the Banco Espirito lawsuit. Oh and don’t forget that the firm fka BDO Seidman is celebrating its 100th birthday all year.

No word if there will be cake or freakishly large scissors at the celebration but nevertheless, it’s good to see some expansion in the Tar Heel state for a change.

BDO USA, LLP EXPANDS NORTH CAROLINA PRESENCE WITH NEW RALEIGH OFFICE

Chicago, IL – BDO USA, LLP, one of the nation’s leading professional service organizations, has announced an expansion of it’s presence in North Carolina with the addition of a new office in Raleigh. The Chicago-based firm, which now has offices in 39 cities around the country, had previously serviced clients in this market through its Charlotte practice. Pending a move to permanent office space at 5430 Wade Park Boulevard in August, the new practice, which will have approximately 15 staff, will be temporarily located at:

BDO
5410 Trinity Road, Suite 310
Raleigh, NC 27607

The Raleigh business community will now have more direct access to BDO’s full array of services which include assurance, tax, risk advisory, financial planning, business restructuring, litigation and fraud investigation services. Michael Dannar, previously with Ernst & Young, has joined the firm as a partner and will assist in serving the firm’s assurance clients in Raleigh and throughout the southeast. Mr. Dannar has significant experience working with colleges, universities and other non-profit organizations.

“We have been working with clients in Raleigh for a number of years now and the time is right for us to establish a permanent presence. This new office will enable us to better serve our clients in this growing market,” said Jack Weisbaum, CEO of BDO USA. “We are also happy to welcome Michael Danner to the partnership. His knowledge of the market will be a valuable resource to our firm.”

BDO SEIDMAN FACTS:

• BDO is celebrating the 100th anniversary of its founding in 1910.
• BDO represents companies ranging from Fortune 500 multinationals to closely-held private businesses.
• BDO had $620 million in revenues in 2009 (6/30/09). Over the past four fiscal years, the firm has averaged double digit growth (10.2%).
• As an independent member of BDO International Limited (the fifth largest global network of accounting firms), the firm can leverage the resources of more than 1,000 member firm offices in 115 countries around the world.

ABOUT BDO USA

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 39 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,138 offices in 115 countries.

BDO USA, LLP,a limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.

Comp Watch: Sit Downs Starting at Deloitte; Anxiety Over Raises Picking Up

Lots of news this week on the compensation and promotion fronts with Grant Thornton, KPMG and PwC all making announcements or soon-to-be making announcements (that we’ve heard; are you holding out on us, E&Y?).

The latest out of Deloitte is that the discussions are starting (although maybe not today since it sounds like most are off) but the news on yay or nay on promotions is starting and now the anxiety around comp will increase over the next two month:

The year-end ratings and promotion decisions have been approved by National; so the process of communicating both to Deloittians is starting…At a high-level, I heard that promotions this year were tough – that being said, plenty of people made it through. For the most part, people are now waiting to hear about comp – scheduled for communication the last two weeks of August.

We did hear one rumor about the number of new partners expected, “at a recent partner meeting, it was announced that there will be more than 60 new PDPs nationally, with more than 10 being in the Northeast,” so you can toss that around your meat-ingestion fest this weekend if you so choose.

Discuss your epic/tragic news re: your new promotion if you’ve received word and keep us updated on the comp rumors.

Promotion Watch ’10: BDO Names Five New Partners

Fresh off their win last week in a Florida Appeals Court, BDO announced the admission of five new partners today in a press release (in full after the jump).

The new partners are Joseph Carr (Chicago – Tax), Anthony Lawrence (Grand Rapids – Assurance), Hoon Lee (San Francisco – Tax), Bryan Polozola (Dallas – Assurance) and Julie Valpey (National – SEC) and they get their big chairs effective tomorrow.

Congrats to the new partners and remember to keep the celebration under control.

Wednesday, June 30, 2010

BDO USA, LLP, ADMITS 5 NEW PARTNERS

BDO USA, LLP, IS PLEASED TO ANNOUNCE THAT 5 NEW PARTNERS HAVE BEEN ADMITTED TO THE PARTNERSHIP, EFFECTIVE JULY 1, 2010.

Chicago, IL– BDO USA, LLP, is pleased to announce that 5 new partners have been admitted to the partnership, effective July 1, 2010. Two of the new partners are in the tax practice, two are in the assurance business line and one is in the national SEC group. BDO is a leading national professional services firm providing assurance, tax, financial advisory and consulting services to private and publicly traded businesses.

“I am very proud to welcome each of these very deserving individuals to our partnership,” said Jack Weisbaum, CEO of BDO USA. “A key to success in our profession is a commitment to recruiting, training and retaining superior client service professionals. Each of these new partners has excelled in their specific technical area while providing the highest level of client service.”

The newly elected partners include: Joseph Carr (Chicago – Tax), Anthony Lawrence (Grand Rapids – Assurance), Hoon Lee (San Francisco – Tax), Bryan Polozola (Dallas – Assurance) and Julie Valpey (National – SEC).

About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 38 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,138 offices in 115 countries.

BDO USA, LLP,a limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.