Each year, accounting firms release revenue results and each year I am reminded that it's not really about transparency, rather, it is about marketing. The most meaningful number in Deloitte's press release is the $36.8 billion in global revenue. From there, it's a long list of factoids that the firm wants to tell everyone. Everything from the revenue growth in "local currency terms" to the opening of another DU campus to the number of people it hired. None of it is particularly useful to anyone. I'm especially annoyed by the firm reporting its 9.5% growth in "local currency terms" which conflates things to such a degree that I wonder why they even bother?
The ultimate irony is that firms like Deloitte claim to hold other businesses to task all the time for following reporting and disclosure rules. Not to mention how they crow about their importance in the public markets and how investors rely on their expertise and integrity. Meanwhile, they don't hold themselves to those standards of transparency and accountability to the public they supposedly serve. The whole thing is ludicrous.
That's not to say that there isn't telling information about the firm's priorities. Here's a good selection:
Deloitte's ability to deliver value for clients across all geographies and service areas led to growth in each of its five core businesses—Audit, Consulting, Financial Advisory, Risk Advisory and Tax & Legal. All advisory businesses posted double-digit growth globally. Highlights include:
- Risk Advisory grew the most at 22.5 percent, driven by high demand for cyber and regulatory services.
- Consulting grew at 10.8 percent, fueled by increasing demand for integrated services supporting large-scale digital transformation, systems implementation, human resources and strategy projects.
- Deloitte Tax & Legal grew at 10.0 percent in FY2016, the highest growth since FY2008. Growth was boosted in part by the sixth consecutive year of double-digit growth in Deloitte Legal.
I love that legal services got a shoutout. Meanwhile, audit, the service that Punit Renjen says is "central to who were are and will remain central to who we are, period," is mentioned a grand total of two times.
Has Donald Trump released his tax returns?
Nope! Last week, I said that nothing in the ongoing yakfest about Donald Trump's tax returns surprised me anymore. And because I said that nothing surprised me any more, a guy dressed in a duck costume going by "DJ Quacker" walked around Trump Tower yesterday with a sign that read "Trump Ducks Releasing his Tax Returns." I was NOT expecting that. The look on the security guard's face is worth the click, trust me.
Elsewhere in releasing tax returns, Shira Ovide and Leila Abboud write at Bloomberg Gadfly that Apple should put theirs on display:
It's tough to come to a conclusion about Apple's string of tax-related controversies because no one really knows what Apple pays in taxes, either in total worldwide or in each country. There’s a simple fix. Let's call on Apple (like a certain presidential candidate) to release its tax returns. Only if we see Apple's tax bill with a country-by-country breakdown can we have an informed debate about whether the company is paying its fair share -- and what “fair” means.
If I were handicapping this, I'd give 20-1 odds on Trump and 100-1 odds on Apple between now and Election Day. Obviously these lines are made up and I am not -- I repeat, NOT -- taking bets from any of you. I wouldn't want any of you to get carried away and end up in the "Accountants Behaving Badly" section of ANR.
Accountants behaving badly
Charter schools have gotten some attention lately thanks to John Oliver's segment from a few weeks back. And since there's a bunch of money flying around them, it's no surprise that an accountant would get wrapped up in a scam involving a charter school. Like the Pennsylvania Cyber Charter School. Its founder, Nicholas Trombetta submitted a guilty plea last month and his accountant wasn't far behind:
Neal Prence, of Koppel in Beaver County, filed notice [on September 2nd] in U.S. District Court saying he will enter a plea on Sept. 19 before U.S. District Judge Joy Flowers Conti.
Trombetta had been facing trial for three years on multiple counts of mail fraud, tax conspiracy and filing a false tax return in relation to the diversion of some $8 million from the cyber school for his own use.
Mr. Prence is accused of helping him in the tax conspiracy. The two were set to go on trial together last month, but Trombetta pleaded to tax conspiracy on Aug. 24.
You have to draw the line somewhere on client service.
Previously, on Going Concern...
Bryce Sanders wrote about meeting people who are older and richer than you.
In other news:
- The myths behind Apple’s manufactured tax crisis
- The Cash-Flow Clash
- Clown sightings have spread to North Carolina.
- US library to enforce jail sentences for overdue books
- What Homer Simpson's 100+ jobs tell us about America's middle class
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