BDO in the UK has “‘invited’ 24 partners to take retirement and is in the process of settling the details over the withdrawal of equity”, according to Accountancy Age. And by “invited”, we’re pretty sure BDO means, “pack your shit”.
According to Simon Michaels, the head honcho in the UK, the “withdrawal of equity” would not be an “unmanageable situation to deal with” which is sorta like saying “it’ll hurt for a little while but as soon as my ownership is bigger, I’ll be over it.”
This whole sitch across the pond compelled us to call a BDO rep here in the States to find out what might be going down for the American partners. We were told that there were no plans for dismissal of partners in U.S. and in fact, partners will likely to continue to be added to the firm. This jogged our hazy memory about our speculation that BDO was adding some partners last month in order to spread out some liability.
So it appears that since BDO International Global Coordination isn’t on the hook for the half a billion in liability from the Banco Espirito case, they can’t afford to keep all their partners. BDO in States, on the other hand, needs to spread out the love on the liability. Don’t you love it when everything makes sense?
Reality bites for BDO Stoy Hayward [Accountancy Age]
Tags: BDO, Partner "Retirement"
Caleb
Public accounting firms are simply a vehicle for pooling the risk associated with shoddy financial statements. They pool risk just like an insurance underwriter in exchange for engagement fees (as opposed to premiums). Bigger firms with deeper pockets and better reputations demand higher premiums/fees. The only reason these firms even care about their reputation is that a bad track record of clients (restatements, bankruptcies, scandals) limits their ability to charge ridiculous fees. In an attempt to give capital markets some confidence in the financial statements of their clients, Big 4 firms maintain a facade of (often ineffective) testing, (misguided) analytics, hubris and etcetera that barely reduces their own exposure, let alone providing market participants with reasonable assurance. Lesser firms essentially gamble that they might be able to profit from a string of good luck, thereby providing enough equity to effectively buy (via lowballing any fees and rates the engagement letter) business from larger firms in an attempt to grow. When it becomes apparent that such a strategy might not pan out as intended, they add partners to recapitalize the firm and possibly makes some organizational changes to brace for the litigation costs. This isn’t news.
It’s readily apparent that you haven’t any experience with that about which you so poorly write. Run this shit by Francine next time to see if it really qualifies as news. Moreover, where’s the snark, attitude, or humor in this post? I usually refrain from eating at a new restaurant until it’s been opened a few months to allow the chef time to get more familiar with the menu. To that end, I wish Dealbreaker would have waited a few more months before promoting this site. As it currently stands, it is absolutely horrible.
Headless – this site will get better. Soon, it will be populated by a bunch of undergrads who are pretending to be law firm associates (just like ATL) or bankers (just like DB).
But seriously – Francine does have great insights and commentary on this industry. You’re going in the right direction, though… now let’s get some more news from the Big 4. Profits, firings, hiring freezes, interns doing stupid-ass things…
Whoa, Headless – do you feel better now, did you get it all out? Partner up your ass today and the intern didn’t show up? Thanks for breaking it down for us. Let me guess, you’re single too, right?
Headless, speak with me, HeadedHorseman.
It is apparent (a word that you love, P.S.) that your comment was a highly uneducated one that has no merit and quite frankly, makes no sense to the given article. You are trying to act like you know what your talking about when you really have no clue (apparent, as you are writing in the comment box, while Caleb is writing the stories).
To use your silly restaurant analogy, do you always love everything on the menu? No, but others may love something you dislike. It wouldn’t be on the menu if that wasn’t the case.
I actually find this news, so suckonthese and leave your comments to yourself.
@2 Agreed. Francine knows what’s up. Hence my encouragement of Caleb running pieces through her first. Just an idea.
@3 Engaged actually. Spent a few years with a big four firm, but now I’m “in industry”. As a result, I don’t have to wear blue shirts and khakis year round anymore and hate myself a little less. That notwithstanding, I’m familiar with those to which you refer.
@4 You’re right…I overuse apparent. I thought my comment was relevant insomuch as (another favorite) I’m attempting to inform Caleb that these types of situations are simply a function of the beast. Many of my friends (managers and a few Sr. managers) still in big four firms concur. As to your assertion that comments are by definition less informed than the posts that prompt them…just think about that for a bit.
Silly as my restaurant analogy may be, I can’t help but note that ALL THREE comments (not including my own) associated with this post are directed at me. In other words, absent my little rant, this restaurant is empty. If your real concern is that I sound to be a bit of a dick, then I can understand. In any event, I appreciate your paying homage to me via your choice of a commentary handle, and I look forward to bickering with you from time to time.
NOW this board is starting to heat up! Yeah!
@6 accountants don’t heat up…the world cools.