September 21, 2019

Accountants v. Lawyers

Did Prosecutors Bungle Their Case Against BDO’s Former CEO?

Maybe! Denis Field’s lawyers certainly aren’t amused with the tactics:

Denis Field, ex-CEO of BDO Seidman, the world’s fifth largest accounting firm, claims Manhattan prosecutors intimidated his former firm into curtailing and eventually cutting off payments to his lawyers. In recently filed court papers, he claims that the government deprived him of his constitutional right to counsel and seeks dismissal of the case.

Field alleges that among other tactics, prosecutors threatened to indict the firm if it kept funding his defense. During a hearing on Thursday, U.S. Judge William Pauley III of the Southern District of New York, who is presiding over the case, closely questioned prosecutors about the accusations. A ruling is expected soon.

If this sounds familiar, it should. Back in 2007, the very same prosecutors – Stanley Okula and Shirah Neiman – pulled a similar stunt, “convincing” KPMG not to pay the legal fees for the partners and employees that were facing criminal charges for their roles in the firm’s tax shelter schemes:

That case was thrown out in 2007 after U.S. Judge Lewis Kaplan found that prosecutors had improperly “coerced” KPMG into cutting off the legal fees of 13 former KPMG partners and employees. “KPMG refused to pay because the government held the proverbial gun to its head,” Kaplan wrote.

Two of the prosecutors called out by Judge Kaplan — Stanley Okula and Shirah Neiman — have also been involved in the Field case, a fact that is prominently noted by Field’s lawyers in their motion to dismiss. “The reason for the government’s conduct is obvious — as with KPMG, the prosecutors believed BDO ‘should not pay the fees’ of allegedly culpable individuals,” Field’s lawyers argue. They cited the KPMG case no fewer than 50 times in their brief.

So it appears that Okula and Neiman aren’t much for personal reflection and may have pulled out the proverbial gun again. But they’re making a case for themselves, saying BDO’s motivation for sticking Field with the tab isn’t related to them putting the screws to the firm, “the government argues that BDO stopped paying Field’s legal bills after the firm discovered that Field hid from the board a report, prepared by law firm Skadden, Arps, Slate, Meagher & Flom, warning that certain tax shelters that Field was promoting were questionable.” Hey! – you can even ask BDO’s general counsel, he’ll tell you that the firm’s decision had nothing to do with get the government off their backs. And if you can’t believe a lawyer, who can you believe?

Prosecutors on defensive in BDO Seidman fraud case [Reuters]

Tax Lawyer Pursuing CPA Needs to Know: Take More Classes or Cram with a Review Course?

Whenever the news is slow and you kids are quiet (I won’t expect to hear from many of you until after April but just in case, here’s my email), there’s always CPAnet to troll and here’s a good one: tax and estate lawyer pursuing the CPA wants to know if he should take a bunch of classes to prepare for the CPA exam before jumping in.

I promise to let him down gently.


Here’s the question:

I am a tax and estate planning lawyer and have been taking accounting and tax classes at UCLA extension in preparation for the CPA exam.

Since tax season is hell, I would only have the second half of the year to take a revthe exam. That means June – November (& January) 2011, 2012, or beyond. I am unsure whether I should continue taking classes such as (auditing, internal auditing, nonprofit accounting, etc.) for the next year and a half until June 2012… or whether I should just sign up for a review session this June after I take Intermediate Accting 3 & (maybe) Managerial accounting this spring quarter AND study my butt off in the review course.

Without sounding too much like an ass, I’m a fairly smart guy (top 20% in top 20 law school, passed bar exam) and a very hard worker. I have a lot of information under my belt but it may not all be relevant.

So, do I absolutely need to take the 2 auditing classes offered at UCLAX or the nonprofit accounting class or can I cram the review course material? I have heard that advanced accounting is unnecessary and I learned consolidations in Business Enterprise Taxation. I don’t know econ, but I looked at some practice questions and I got most of them. Supply and demand doesn’t seem too complex.

Am I crazy to skip these classes and rely on the review course? My experience with the bar exam was that the courses in law school were more likely to confuse than to help.

First off, my professional experience has been that whenever someone says “I’m a fairly smart guy” or “I’m no idiot” or “at least I am not like the senior who probably ate paint chips as a kid,” that candidate almost always has difficulty getting through the CPA exam. Why? Because brains have nothing to do with it, stupid.

I often explain it to candidates like this: the CPA exam simply tests your left brain’s ability to process and spit out information exactly as it was put in. We don’t need creative right-brained accountants (especially now that Lehman is kaput) so the more right brain spin your brain tries to put on CPA exam information, the worse you’ll do on the exam. “Smarts” don’t factor in, it is merely a test of entry-level knowledge and we all know you don’t have to be smart to be an entry level accountant. Hell, you don’t have to be smart to be a partner either but we’ll let that one go.

That being said, it’s important to recognize that there are two distinct universes: the CPA exam universe and the real universe. In CPA exam world, all cash flows use the direct method, accountants are always ethical bordering on neurotic and there is always a very clear answer for any query. In the real world, we use indirect to save time, have trouble passing the open-book ethics exam after four tries and sometimes have to choose the “best answer” without knowing for sure that it’s right.

While more education is almost always a good idea (unless you’re already over-burdened with student loan debt to begin with), it may be easier for our future candidate above to simply jump into a good CPA exam review and call it a day. Some of the cheaper review programs will only build on the candidate’s knowledge base or help familiarize with the exam’s format and content but the pricier, higher-quality reviews also provide the information the candidate needs to pass, regardless of their experience level.

Remember: because the CPA exam tests entry-level knowledge, you aren’t expected to be a expert in anything. Not everyone takes advanced accounting and while some of those topics are tested, any decent review course can give you just enough to scrape by if you aren’t familiar with those areas. Don’t waste your time taking extra classes unless that is a personal goal of yours and, if so, either do it before or after but not during your CPA exam attempt.

Turns Out, CPAs Making Nice with Lawyers Is a Good Business Practice

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

There’s nothing better than a warm referral – and most CPAs are always on the hunt for new sources. One great potential lead source that is often overlooked is the attorney who practices in areas that are complementary to your expertise.

“I find that networking with attorneys is one of those few win-win opportunities for both of us,” said Steven J. Elliott, tax director at Schwartz & Co, LLP. “There are often many referral opportunities for work that the other professional provides.”

Elliott believes the attorney benefits in two ways. First, he benefits by making a known referral; second, by receiving referrals regarding a need for an attorney related to his area of practice.

Sound’s like a great win-win, so I interviewed a number of CPAs who have been successful in working with attorneys in order to learn about their best practices for developing meaningful, productive, mutually beneficial relationships.


How to build, cultivate relationships with attorneys

Howard Grobstein, a partner and leader of Forensic Services group in Crowe Horwath’s Audit and Financial Advisory practice, believes that best practices to build relationships with attorneys for business development involves two main components.

“First and foremost is providing high-quality work and exceptional service,” said Grobstein. “Attorneys have different styles and expectations, so CPAs should listen to what the attorney needs. They need to make sure they can present their expertise in a style that will be acceptable to the attorney and only take on those engagements where they can meet expectations, and perform with high quality and efficiency. My practice has developed because I make sure that I can do the project based on how that specific attorney works.

Importance of building strong, genuine relationships

Many CPAs agree that strong relationships are the real key – it’s better to have a smaller number of close relationships, than a larger network that is loosely tied together.

Jacob Renick, chair of the New York State Society of CPAs Litigation Services Committee, elaborated: “You can’t expect attorneys to send you business unless you have a very strong relationship with them. It has to be a one-to-one relationship. You’re better off having relationships with five attorneys rather than 30, if you have deep and solid relationships with those five.”

Mark Eiger, CPA, a New Jersey-based accountant, agreed: “The best way to strengthen the relationship between accountants and attorneys is to actually build a relationship. It takes time to develop quality referral partners. You’ll have more of an appreciation for the person’s work and capabilities if you get to know that person personally.”

What attorneys want

Renick emphasizes that attorneys are looking for someone to be honest with them, and to share their expertise and knowledge.

“If you don’t have the expertise, refer them to someone who has it,” he said. “Don’t be afraid to refer somebody – if you’re good, they’re going to use you. In addition, keep them up to date with respect to your expertise. For example, share recent changes you’ve become aware of, and give them a heads-up of what’s coming down the pike.”

Connect with attorneys who share similar interests, beliefs

Most CPAs I spoke with agreed that you’ll do best by connecting with like-minded attorneys. Michael D. Greaney, CPA, MBA, got a referral to a client by being in the same choir with an attorney. He talked to the attorney about law topics he had expertise in and figured out the two of them had a similar orientation toward the law.

“What clinched the referral is that it turned out that we share a natural law orientation from the Aristotelian perspective,” Greaney said. “An attorney will not feel comfortable referring a client to someone whom he or she thinks will not have the client’s best interests at heart, which means thinking along the same general lines as the attorney in ethical matters.”

Focus on serving the attorney’s best interest

Rob Siddoway with Cambridge Financial believes the No. 1 must-ask question to an attorney is: “What are the characteristics of your ideal client?” He then advises that CPAs do their best to find an ideal client for the attorney and make the introduction.

“After you have had a few lunches and sent a client or two to the attorney, set an appointment to explain what you do, the relationships you are seeking, and let them know what your ideal client looks like,” Siddoway said. “The focus is to give, give, and give some more without the expectation of anything coming back to you. The results of doing this are not mere referrals, but strong recommendations that generally lead to very good clients. There are those who understand giving first. You will quickly learn who the givers are, but always make it a point to give first and you will be successful.”

Good ways to initially strike up relationships with attorneys

Gail Rosen, CPA, recommended you do their taxes!

“The best way to get referrals from attorneys is to be the CPA who does the attorney’s tax return – then they do not forget you,” she said. “Attorneys have unique tax returns that include the tax treatment of costs recovered. If you learn about these tax laws, you will be in a better position to get attorneys as clients.”

Howard M. Rosen, a CPA with Conner Ash P.C., holds internal marketing events, where his firm invites a law firm to come to its office.

“We put together three or four 4-minute presentations on subjects the attorneys would not necessarily think of when they think about CPA firms,” he said. “If the attorneys are estate and probate specialists, we talk about how we can assist to ensure trusts are funded and that the plans make sense after time due to asset growth. If they are litigators, we talk about how we can help them build damage claims from business interruption, breach of contract, and so on. It’s unique, it’s fun, and it gets us business.”

John Sensiba, managing partner at Sensiba San Filippo LLP, believes the first thing you should do is find out who your clients are working with in order to get on the same page, and make sure the advice your client is receiving is consistent. This, incidentally, provides a good opportunity to meet and connect with their attorney.

Sensiba’s firm also has had great success hosting events for law firms at his office. These typically consist of 10-minute presentations from 5 to 7 p.m. about what the firm does and why it is different. He’s found that law firms generally are eager to attend; in the current economy, law firms also are very open to events that could potentially generate new business.

Howard Grobstein has had success getting involved in organizations that include attorneys with similar practices. For example, he became a member of the California Receivers Forum, and soon after became an officer and ultimately the co-chair. He followed the same track with the Los Angeles Bankruptcy Forum, and is positioned to take on additional roles within the organization.

“These types of organizations provide me with opportunities to attend educational, social, and networking events with attorneys who may need CPA consultants for their work. The goal is to develop a genuine relationship that runs beyond work.”

American Association of Attorney-Certified Public Accountants

The AAA-CPA is an organization of dually licensed attorney-CPAs, highly recommended by Tom Simeone, a partner at Simeone & Miller LLP. Simeone, a practicing trial lawyer and a dually licensed professional in his own right, has found this organization to be a great resource for connecting with new colleagues on the other side of the fence. The AAA-CPA offers a number of networking and referral opportunities for its members, and Simeone considers this to be his top source for generating new referrals.

Consider focusing on your niche practice

Andrew Schwartz, CPA, of Schwartz & Schwartz P.C., networks specifically with attorneys who practice in the health care field where 90 percent of his client base is located.

“We have the most success dealing with attorneys who also have a niche practice within health care,” said Schwartz. “We feel comfortable referring our clients to an attorney with a health care niche, knowing they will get timely advice and information.

“These attorneys know that they can refer their health care clients to us, and feel confident that we have dealt with other clients in a similar situation,” said Schwartz. “Our clients are happy that neither my firm nor the attorney is learning on their dime, so the common niche is the basis for the most productive relationships my firm has with a handful of the lawyers in the Boston area.”

Pay attention to estate attorneys (Hint: most Americans don’t have a will)

Kelley Long, CPA recommends connecting with estate attorneys, in particular, because they have more ongoing relationships with their clients.

“I’ve found estate attorneys to be easier to get to know – and easier to refer my clients to as well,” Long said. “Most of them do not have a will in place, and they are usually eager to speak with an estate planning attorney.”

Estate planning attorney Brian Raftery, a partner with Herrick, Feinstein LLP, works closely with several CPAs himself and concurs that the majority of Americans do not have a will in place. He tries to refer his clients to CPAs if he sees a need for professional tax assistance.

“I always look for issues my clients face that can potentially be resolved if the proper professional is brought into place,” said Raftery, who often spots obvious opportunities when his high net-worth clients are filing their own tax returns via TurboTax.

“When I see an opportunity, I try to match up my clients not only with the appropriate skill need, but also I do my best to ensure a proper personality fit.” As a result, Raftery concurs with his fellow CPAs in the need to not only align professional goals, but also personal beliefs and philosophies.

What to do when you get a referral

This is another area where everyone we spoke with agreed emphatically – go above and beyond the call of duty when you receive a referral.

Joe Epps, of Epps CPA Consulting, cited this as his top piece of advice: “You’ve got to give top quality service. It’s extremely important to do a very professional job when you do get a referral.”

Renick agreed – and adds that if you don’t have the expertise, or are conflicted out of the engagement, you should refer someone. “Don’t be afraid to refer somebody. If you’re good, they’re going to use you.”

About the author:
Brett Owens is CEO and co-founder of Chrometa, a Sacramento, CA-based provider of time-tracking software that records activity in real time. Previously marketed to only the legal community, Chrometa is branching out to accounting prospects. Gains include the ability to discover previously undocumented billable time, saving time on billing reconciliation and improving personal productivity. Owens also is a blogger and founder at ContraryInvesting.com, as well as a regular contributor to two leading financial media sites, SeekingAlpha.com and Minyanville.

Ron Johnson Would Like to Be the Second Accountant in the U.S. Senate

Because God knows 57 lawyers is far too many and Russ Feingold just happens to be one of them.


As you may be aware, this is the second relatively high-profile race where an accountant and lawyer face off that we’ve covered. In the South Carolina governor’s race tax-tardy accountant Nikki Haley is facing special-interest whore Vince Sheheen. We should also note the the Senate race in New York between incumbent Kirsten Gillibrand (lawyer) and Joseph DioGuardi (accountant) but so far it’s been fairly boring unless DioGuardi happens to make an issue out of Gillibrand’s hotness.

Anyhoo, similar to those two races, the ballot in Wisconsin will appear as follows:

Accountant (R)
Lawyer (D)

So as voters, when faced with such a choice, should we assume that the accountant running for office is family values type that believes in cutting taxes and reducing spending (with no intent to do so) and the lawyer is a spineless tax and spend type that fails to accomplish anything even when they have the political power or leverage?

Wisconsin is doomed.

Lawyer, Accountant Slam Each Other’s Professions in the South Carolina Governor’s Race

Forgetting about politics for a second – the gubernatorial race in South Carolina has gotten personal as the camps of Nikki Haley (R) and Vincent Sheheen (D) sling mud at each other’s chosen profession.

Sheheen isn’t impressed with Haley’s tardiness on paying taxes saying, “I think it’s particularly problematic that she would not pay her employee withholding because that money really belongs to the employee. … For somebody who claims their accounting skills are a reason why she should be elected governor, I think that’s particularly disturbing.”


Sheheen goes so far to say that Haley is completely out touch with South Carolinians who have to pay taxes and eat, something that Nikki Haley presumably does not do, “I think she’s just out of touch with regular people in South Carolina who do pay their taxes and do have to buy food and put it on their table.” Maybe the Haley family just eats their meals over the sink; it’s not entirely clear.

Haley’s camp fired back, citing Sheheen’s snakey-ass lawyer ways:

Haley’s campaign fired a broadside at Sheheen this week, noting that he was endorsed by The Injury Board Blog Network, a national group of personal injury attorneys. It noted that Sheheen, a lawyer, voted to weaken a tort reform bill in 2005.

“The entrenched special-interest network of trial lawyers and personal injury attorneys is circling the wagons for Vince Sheheen,” said Haley’s communications director, Rob Godfrey.

But guess what?!? Vinny Sheheen is a-okay with that. He’s a successful lawyer, not some two-bit accountant-cum-tax dodger, “I hope everybody endorses me. I’d rather have a successful lawyer as my governor than an accountant who doesn’t pay her taxes.”

Obviously, both these candidates are complete losers and our friends in the Palmetto State are going to end up with a shitty new governor. But that’s the way our country works so let’s see what you think. If you had to choose between these two clowns:

Sheheen blasts Haley over taxes [Charleston Post Courier]