A new kind of PwC partner
Here's an interview with Juan-carlos Morales, "the first creative executive in [PwC]'s history to make partner." Yes, it's interesting that he's a former graffiti artist, but it's also interesting because the word "partner" used to mean something very different for accounting firms. For as long as I can recall, "partner" inferred that someone was a CPA. Non-CPAs were given other titles (e.g. Principal). I confess that I don't keep up on all the nuances of Big 4 hierarchy, but that was my general understanding.
Anyway, now that PwC has an enormous digital agency inside it's even more enormous professional services firm, I think it signals a change that PwC will become a very different entity in the years to come.
Advertising Age: […] A lot of consultancies are hiring agencies folks and boosting their agency service business through acquisitions. I haven't heard of any consultancies making a creative a partner. What do you think it signals to the other three big consulting firms?
Mr. Morales: I think what it signals is that they value what we can bring to the table. I also think they're saying, "If we are really serious about boosting our agency services then our leadership team should be indicative of those folks." If we have all these creatives that we're hiring and all these acquisitions around the space that we're trying to do, we need to make sure that there's an actual leadership representation of these people to make sure we are going in the right direction.
If I was an audit or tax partner at PwC, I'm not sure how I would feel about this. Even some advisory people might be looking at this with some stinkeye. It will be interesting to see how this develops over the 10 years or so to see if the accountants start feeling pushed aside.
Non-GAAP worries
MarketWatch compiled earnings reports for the top 50 companies in the S&P 500 by market capitalization to look at the pervasiveness of non-GAAP reporting. What they found will not surprise you:
Thirty-two included numbers not prepared according to standard accounting practices in their January-quarter announcements. […] When companies reported non-GAAP earnings per share, those numbers were almost always higher than the GAAP figures. Only three of the companies we examined reported a non-GAAP EPS number lower than their GAAP number.
You can even search through the companies for the details. The company in this sample with the largest gap between GAAPs is Allergan. The pharmaceutical company reported a non-GAAP EPS $3.04 and a GAAP EPS of $0.47 in the first quarter. The silver medal went to Alphabet (aka Google). The company reported non-GAAP and GAAP earnings of $7.50 and $6.02 respectively. Eighteen companies only report GAAP earnings. Three companies that reported higher GAAP EPS were Proctor & Gamble, Comcast and Visa.
And all the worrying about non-GAAP pitfalls is revisited, including that the non-GAAP numbers paint a rosier picture of the performance, they're not audited and "seem equivalent to GAAP measures."
Donald Trump's tax returns
Shrieking hairless yeti and Republican presidential nominee Donald Trump isn't going to release his tax returns and good grief, there's a lot of people talking about this. Here are six theories as to why he's not releasing them and they mostly revolve around the possibility that what Donald Trump says about his wealth and generosity and reality are not even close to being the same thing.
Also, a Fortune headline says that not releasing them could be "Disastrous for his Candidacy" and, okay, but one would think that any number of the more INSANE things he's said or done would've been disastrous for his candidacy already.
Three. More. Months.
Previously, on Going Concern…
BDO compensation discussions kicked off. And Bryce Sanders wrote about following up without being a pest. In Open Items, someone wants to know what consulting does.
In other news:
- Oracle plans to acquire NetSuite for $9.3 billion
- Securities Class-Action Cases on the Rise
- Another The Accountant trailer!
- "First, he is going to drive down from Dubuque to Davenport to go through an arduous 4½-hour exam to become a certified public accountant. Then, a little more than an hour later he will do something even more grueling, running a quarter mile up one of the steepest hills in town in the heat of late July."
- It's hot outside.
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