Grant Thornton

(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!

Compensation Watch ’10: Is Anyone at Grant Thornton Getting Impatient?

Because “early July” becomes “mid-July” in about two days and some people would like to get this over with:

“Just as an update to GT’s “early july” announcement about raises. It hasn’t come yet, but some have been told that they’ll be getting promoted (I’m guessing seniors and managers) and were told that National is still trying to figure out what they’ll be.”

So you can take that as “Chipman and Co. are stuck in an epic game of Risk and can’t be bothered at the moment” or something else entirely if you like. If your anxiety level is at double-Lexapro levels or if you’ve heard something other than the earlier rumors, discuss below.

Compensation Watch ’10: Rumors at Grant Thornton as Announcement Approaches

From the depths of 666 Third Ave:

In New York:

Associates look to come in at almost $10k less than they did in 2007
Senior 3’s are looking to make almost $10k less than Senior 3’s in 2007
New Managers are looking to make almost $15k less than New Managers in 2007
Senior Managers are looking to make almost $15-20k less than Senior Managers in 2007

Raises (without promotion) are looking to be:
3% for employees rated under a 4
6% for employees rated a 4 or 5

Our source indicates that these are all rumors at this point but based on the last Communique de Chipman, the official numbers should be known soon (“early July”).

In the previous thread lots of numbers were getting thrown so who knows; maybe GT is pulling a PwC and promising low, delivering high? Discuss.

Were PwC and Grant Thornton Ignoring Overstock.com’s Accounting Issues?

Yesterday we briefly picked up the Overstock beat as Sam Antar pointed out that everyone’s favorite Salt Lake City resident got a little confused about when they knew about their gain contingency existed that resulted in some contradictory disclosures.

As you may misremember, this arose from the company for recoveries from underbilled fulfillment partners by improperly claiming that a ‘gain contingency’ existed under accounting rules.”

Now Sam has pointed us to some correspondence between the SEC and Overstock that indicates that PwC wasn’t concerned about the issue until the Commission pointed it out and succeeding auditor Grant Thornton was unmoved until Overstock brought it up:

Please tell us if, and the extent of, your auditors’ national accounting office involvement in these issues during audit of your 2008 financial statements or the reviews of your fiscal 2009 quarterly filings.

PwC served as our auditor during the audit of our 2008 financial statements. PwC has informed us that it did not consult with its national accounting office regarding the above issues when they were identified in Q4 2008 or Q1 2009. However, in connection with this response to your letter dated November 3, 2009, PwC has consulted with its national office in regard to both the fulfillment partner under billing and partner overpayment issues and based on context of this being an area that is a highly facts and circumstances based issue that requires significant judgment where reasonable parties have different views, PwC continues to concur with our accounting and disclosure consistent with its reflection of the underlying economics and our past practices of not billing or collecting for our billing errors, rather negotiating for future price concessions that were contingent on future sales.

Grant Thornton (“GT”) reviewed our Q1 and Q2 2009 quarterly filings. To our knowledge the GT local engagement team did not review these issues with its national accounting office at the time of our Q1 and Q2 2009 quarterly filings. In early October, as we prepared our response to your October 1 letter, we asked GT for its national office’s opinion. It was our understanding at the time that GT’s national office concurred that we had used an appropriate (if not preferred) accounting treatment. Only after we received your November 3 letter, did we become aware that GT’s previous “national office” opinion had in fact been an “informal request” only, and not a “formal request.”

In the case of PwC, it’s entirely possible that they just trusted that OSTK knew what they were doing and went along with it. Obviously a huge mistake. When the SEC came calling however, they moseyed through it again and rang up the accounting wonks at 300 Mad.

But the Grant Thornton engagement team, who came in after all this went down was seemingly on board with it without consulting with its own national accounting gurus even though the SEC was already on this like stink on a monkey. GT making an “informal request” of its national office on an SEC inquiry seems a little tepid.

HOWEVER! You have to remember that this is all in the words of Overstock which hasn’t always been forthcoming/reliable/truthful in its filings. Then again, maybe there’s something to this whole auditor “Yes men” thing.

Koss Sues Grant Thornton, Blames Firm’s Assignment of Newbie Auditors

Well! You might have thought that Koss would just handle this Sue Sachdeva situation like gentlemen headphonesmiths but you would have thought wrong!

Koss is suing S-squared and Grant Thornton for their respective roles in the alleged embezzlement of $31 million from the Brew Town company.

While it sounds like , that won’t protect her or Chipman & Co. from the wrath of Koss. But one thing is for sure, despite the lawsuits and whatnot, this is not the company’s fault. Just ask Koss’ attorney Michael Avenatti, “I’m confident the company will be exonerated.”


Why? Because
Grant Thornton threw a few young associates on the engagement, that’s why!

Koss hired one of the best accounting firms in the world, Grant Thornton, and should have been able to rely on Thornton’s audits to uncover wrongdoing, Avenatti said. The suit against the auditing firm says auditors assigned to Koss were not properly trained.

The lawsuit lists hundreds of checks that Sachdeva ordered drawn on company accounts to pay for her personal expenses. She disguised the recipients — upscale retailers such as Neiman Marcus, Saks Fifth Avenue and Marshall Fields — by using just the initials. But the suit says Grant Thornton could have ascertained the true identity of the recipients by inspecting the reverse side of the checks, which showed the full name.

Forget the fact that the CEO was also vice chairman, chief operating officer, president and chief financial officer. Oh, and he sat on the audit committee at another company. Apparently Koss wanted GT partners auditing those cash accounts rather than implement anything that even closely resembles an internal control system.

Grant Thornton, meanwhile, is still sticking to the boilerplate statement as reported in the Milwaukee Journal-Sentinel, “We remain confident that we have met all of our professional obligations and that our work complied with professional standards.”

Sigh. Of course no one wants to be responsible, so let’s decide for them. Let’s get a show of hands:

It’s worth mentioning that the lawsuit comes just a few short days before Koss’ tardy restated financials are due. If the company doesn’t cough them up, the Nasdaq will banish them like they’ve got lice.

Koss sues former executive, auditor over alleged embezzlement [Milwaukee Journal-Sentinel]

Grant Thornton Sheds Another Office – Albuquerque Sold to Moss Adams

GT follows up with the news of its disposal of its Honolulu office last month, the closure of its Madison, WI location in April and Greensboro, NC earlier this year with this latest sale of its Albuquerque, New Mexico digs.

According to the Moss Adams press release Chipman & Co. wanted out of the Land of Enchantment after “evaluating its strategic direction”:

ALBUQUERQUE, N. Mex. (June 24, 2010)—Moss Adams LLP and Grant Thornton LLP announce the planned acquisition of Grant Thornton’s Albuquerque practice by Moss Adams on July 31, 2010. In evaluating its strategic direction, Grant Thornton senior leadership determined it will exit the New Mexico market.

Kim Nunley, the Grant Thornton office managing partner, will join Moss Adams as a partner along with many of the client service staff and employees. Wayne Brown, Moss Adams Albuquerque office managing partner, will continue to provide local leadership. He said, “I have known and respected Kim for many years and look forward to working closely with her. She is highly regarded within the profession and the Albuquerque community.”

This acquisition demonstrates Moss Adams commitment to the Southwest and overall firm growth. According to Chris Schmidt, Moss Adams president, “Moss Adams is focused on growth and the Grant Thornton practice blends well with our Albuquerque industry group specialization in areas such as financial institutions, credit unions, employee benefit plans, technology/life sciences, and manufacturing companies.”

Moss Adams is the largest accounting and consulting firm in New Mexico and the 11th largest firm in the United States. With more than 1,700 employees and 230 partners, the firm serves its clients from 21 offices in Washington, Oregon, California, Arizona, and New Mexico.

Our email to a Grant Thornton spokeswoman was not immediately returned.

Accounting News Roundup: Financial Reform Fail; KPMG Wins Latest Round of Auditor Musical Chairs; Philly Tax Amnesty Close to Reaching Goals | 06.24.10

A Missed Opportunity on Financial Reform [WSJ]
Former SEC Chairman Arthur Levitt is none too pleased with the financial reform bill that’s likely to get approved by the Senate and he says exactly why in an op-ed in today’s Journal, “One of many bad ideas that made it into the bill: Public companies will now have a wider loophole to avoid doing internal audits investors can trust. This requirement was the most important pro-investor reform of the last decade, and it worked. Of the 522 U.S. financial restatements in 2009, 374 were at small firms not subject to auditor reviews.”

But that’s not all! Mr Levitt outlinespic failure including:

• “Chuck Schumer’s wise idea to let the Securities and Exchange Commission (SEC) become a self-funded agency will likely be killed by appropriators who are unwilling to give up the power of the purse.”

• “Barney Frank’s (D., Mass.) effort to pass a new law to overcome the legal precedent of the 2008 Supreme Court’s Stoneridge decision, which allows third-party consultants, accountants and other abettors of fraud to avoid liability. Again, another sellout of investor interests.”

• “Congress didn’t deal with the massive problems of Fannie Mae and Freddie Mac. It’s one thing to fail to see trouble before it happens. Now, there’s no excuse. The central role played by these two organizations in the financial crisis is indisputable. Congress had a chance to fully restrict these agencies from anything but the most basic market-making activities, and it didn’t.”

What does all this (and more!) mean? Oh, nothing really. Levitt says that we’ll just have to wait for the next financial apocalypse to get it right.

InfoLogix Announces the Engagement of KPMG, LLP as the Company’s Independent Registered Public Accounting Firm [PR]
McGladrey resigned on June 10th and the company’s filing stated that were no disagreements yada, yada, yada although McGladrey had identified a material weakness in the company’s internal controls and their most recent audit opinion included a going concern paragraph. It wasn’t enough to spook KPMG, who got the blessing from InfoLogix’s audit committee on Tuesday. Enjoy.

BP Relied on Faulty U.S. Data [WSJ]
“BP PLC and other big oil companies based their plans for responding to a big oil spill in the Gulf of Mexico on U.S. government projections that gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.

The government models, which oil companies are required to use but have not been updated since 2004, assumed that most of the oil would rapidly evaporate or get broken up by waves or weather. In the weeks since the Deepwater Horizon caught fire and sank, real life has proven these models, prepared by the Interior Department’s Mineral Management Service, wrong.”


Leadership changes at Wichita Grant Thornton office [Wichita Business Journal]
“Lori A. Davis is the new managing partner at the Grant Thornton office in Wichita, the company announced Wednesday.

Davis will take the place of Jarod Allerheiligen, who will become the managing partner of the Grant Thornton operations in Minneapolis. The change in responsibilities is scheduled to take place Aug. 1.”

Ex-Detroit Mayor Kwame Kilpatrick indicted by feds on 19 mail fraud, tax counts [Detroit Free Press]
“Despite Kilpatrick’s repeated claims to the contrary, the indictment says he used fund money for campaign and personal expenses, ranging from polling to yoga and golf lessons to college tuition for relatives.

Prosecutors contend he failed to report more than $640,000 in taxable income while mayor that he received in the form of cash, flights on private jets and perks paid for out of the civic fund.”

$2 million payment to Phila. tax-amnesty program [Philadelphia Inquirer]
Philly’s tax amnesty program received a $2 million payment on Tuesday, it’s biggest since the program started on May 3. Collections so far have reached $18 million, according to city officials. They also expect to reach their goal of receiving between $25 and $30 million by the end of the program on Friday.

Feinberg to quit pay czar post to focus on BP fund [Reuters]
This guy is a glutton for punishment.

Bonus and Compensation Watch ’10: Grant Thornton Delivers the Goods

Grant Thornton has been on strict radio silence lately which makes us wonder if Stephen Chipman had given up on blogging or if they had simply given everyone the summer off.

The blog remains a mystery but we do have some news on GT bonuses (the jury was out for awhile) and merit increases and it seems to be good news but extremely short on details and extremely long on Chipman prose:

Leadership announcement
Additional guidance on bonuses and compensation

On our last all-employee call, I told you that I was optimistic that the firm would award bonuses this year. I am pleased to share with you that we are now in a position to say with certainty that we will be paying bonuses for 2010.

As you know, the overall level of bonuses is dependent on our financial results at year end. We are currently working on this modeling based on our economic forecasts and will have the final numbers next month. However, I can let you know that we plan to pay the bonuses in the mid-September timeframe.

Similar to our merit increases, our bonus payments are based on our pay-for-performance philosophy, where we strive to recognize and reward individuals commensurate with performance. We’ve held this philosophy for a number of years, but could have done better executing on it. You reminded us of this in our Voice Your Experience pulse survey, and we are striving to do better. This year — and even more so going forward — we will be giving larger merit increases and bonuses to our top-rated performers to ensure greater differentiation.

Merit increases should be finalized in the next couple of weeks and your local office will begin communicating with you in early July. New compensation is effective on August 1. The increases are based on extensive market information for each of our practices and your individual contributions.

As we work to differentiate our firm through providing consistently distinctive client service, we will continue to move towards a model that rewards each of our people relative to their contributions to the success of the firm.

I’m excited about our direction as a world-class firm that truly makes a difference, and hope you are too. Thank you for all that you have done, and continue to do, for Grant Thornton.

Stephen

So whether or not this puts your anxiety to rest is another matter. Discuss and keep us updated in the coming weeks.

Grant Thornton Survey: More Bank Execs Think the Economy Will Suck Less Eventually, Maybe

No! It’s true! Forty-five percent think things are going to be WAYYYY better in the next months, just in time for Christmaskuh!

That’s up from 24% in December ’09.

John Ziegelbauer, national managing partner of Grant Thornton’s Financial Institutions practice, testifies:

Bankers across the country are starting to become more optimistic about both the U.S. economy and their own local economy…Their optimism about the economy is spilling over into their own banks, with bankers reporting that they are also cautiously optimistic about the number of people they expect to hire in the coming months. Overall, it appears that bankers believe that the economy has finally turned a corner.

Except that 55% of those surveyed expect to be the same (i.e. sucks) or get worse and don’t forget, no one is hiring.

On with the jobless recovery!

Big jump in number of bank execs that expect the economy to improve in next six months [GT]

Accounting News Roundup: Grant Thornton Moves DC Office; CPAs Are Less Clueless on IFRS; The IRS Wins Twice | 05.25.10

Grant Thornton moves D.C. office [Washington Business Journal]
GT DC is moving from its cushy confines of 19,450-square-feet at 1900 M St. NW to 15,190-square-feet at 1250 Connecticut Ave. NW.

Mary Moore Hamrick, the company’s national managing principal of public policy thinks this move is crucial saying, “Grant Thornton’s public policy group is taking a more proactive role in shaping the dialogue on accounting issues. This move will support the public policy group’s expansion as we seek to do our part in restoring confidence in the capital markets.” Better feng shui probably.


AICPA Survey Shows US CPAs Gaining in Awareness of International Financial Reporting Standards [AICPA Press Release]
CPAs are less clueless on IFRS, sayeth the AICPA:

The latest AICPA tracking survey shows a sustained shift toward greater awareness of International Financial Reporting Standards (IFRS) among U.S. accountants. Nearly half, 47 percent, of CPAs in the survey conducted April 20 to May 7 said that they already have basic knowledge of IFRS, an advancement from 39 percent who had basic knowledge in October 2008. At the same time, there has been a continuing decline in the number of CPAs who say they have no knowledge of IFRS; 16 percent in the latest survey, down from 30 percent in October 2008.

U.S. Supreme Court upholds IRS power in tax case [Reuters]
Those super secret corporate legal documents that discuss contingent liabilities? The IRS may be able to request them whenever they like, as the Supreme Court upheld a First Circuit ruling by denying certiorarit in the case.

In U.S. v. Textron, Inc., the company claimed that such documentation was privileged. The First Circuit disagreed:

[I]n its ruling against Textron, set a new test, under which every party in commercial litigation whose opponents file financial statements with contingent liabilities for litigation will be able to obtain documents detailing such exposure, according to Douglas Stransky, an attorney at Sullivan and Worchester in Boston who represents corporate clients.

“The First Circuit’s decision has eviscerated the work product protection that exists to protect exactly the type of attorney analysis that was present in this case,” he said. “It’s surprising that the Supreme Court did not recognize this.”

Florida Keys inmate pleads guilty in IRS scam [Miami Herald]
Shawn Clarke, an inmate at a Florida prison, pleaded guilty to conspiracy yesterday as the ringleader to a tax fraud scam in which he requested bogus refunds from the IRS in the amount of $115,000. It wasn’t exactly a complicated scam, as the inmates and their family members submitted 1040EZ forms along with Form 4852 to request the refunds, all for around $5,000.

Clarke was convinced that this was the best idea ever, allegedly saying, “I’m through with the street crime. I’m strictly white collar from now on. I love the IRS.” He’s looking at an additional 10 years.

Details We’d Like to See in Stephen Chipman’s Blog: Partners with Self-assigned Nicknames

We enjoy Stephen Chipman’s blog as much as any casual reader inside of Grant Thornton but he often leaves us wanting more. He talks about New York, Chicago, Atlanta, London, China (God, he loves talking about China) but sometimes we’d like to know what some of the smaller offices have going for themselves.

We know what’s going on in Honolulu, Greensboro, and Madison but what about Grant Thornton Salt Lake City? Or Oklahoma City? What’s going there, Steve-o?


Fortunately, we stumbled upon a little blog that tells us about not one, but 25 things about GT’s Phoenix office. As you might expect, the office gets a place on a “Best Places” list and most of the information shared is about the volunteering the firm does in the local community or raising awareness about [insert major problem, e.g. Americans are fat and don’t exercise] which is really nice.

As much as we like – nay – love nice, we know that similar efforts are made in other offices so we’re craving something local, something unique, something that makes you say, that sums up Grant Thornton Phoenix.

Luckily, they did just that by way of an 80s slapstick comedy that some of you young GTers have probably never seen (and frankly, we don’t really remember either):

Grant Thornton tapped three friends and partners, who called themselves the “3 Amigos,” to start the Phoenix office. Ed O’Brien, Brad Preber and Ken Garrett were serving clients out of different Grant Thornton offices. Each had a unique specialized expertise – O’Brien in audit, Preber in consulting and Garrett in tax.

Mr Preber is also a tournament champion fly fisherman so we picture him as a hunky Brad Pitt in A River Runs Through It type but the rest of the amigos are a blank.

25 Things You Didn’t Know About…Grant Thornton LLP [HMA Time]

Just to Clear It Up: Grant Thornton Is an Accounting Firm Not a Law Firm

We stumbled upon this letter recently that appears to indicate that there was some confusion between the Grant Thornton Atlanta office and a Judge in Florida about what kind of services GT provides.

GT Atlanta


So it appears Mr Bowles has a little bit of responsibility here since he admits, “I did not submit a written request to appear as an other qualified representative in the form specified in [rule] which would have triggered a specific determination by you about my qualifications to go forward.” The lengthy explanation that follows kinda sorta indicates that maybe, he feels like this was his bad that the mistake got made. If you disagree and would like to blame the judge, fire away.

That being said, we figured that GT had enough of a reputation as an accounting firm to be recognized as such with little or no investigation. Apparently that is not the case. We left messages with both Judge Holified and Mr Bowles to get an explanation but so far neither of them have returned our calls.

Accounting News Roundup: Adelphia’s Rigases Get Second Chance in Tax Fraud Case; Grant Thornton Purchases Avalion Consulting | 05.14.10

Adelphia’s Rigases Win New Hearing in Tax-Fraud Case [Bloomberg]
John and Timothy Rigas are both doing time for their convictions in the Adelphia fraud but the their conviction in New York doesn’t seem to have satisfied the Keystone State. The two mean have been indicted on several tax-related charges in PA. Despite the prosecutorial zealousness, the federal appeals court in Philly ruled that prosecutors must allow the Rigases to present evidence that they are getting the double jeopardy treatment, as the tax charges are directly related to their crimes at Adelphia.


FASB Codifies SEC Announcement on Foreign Currency [Compliance Week]
Occurrences in Venezuela are capable of affecting the FASB’s agenda as Compliance Week reports that this recent guidance, “focuses on foreign currency issues related to investments or operations in Venezuela.” So, if you’ve got clients or do business in Hugo Land, you should probably check out Accounting Standards Update No. 2010-19.

Sage: Paul Walker CEO’s successor [AccMan]
“Let’s be honest – Sage is in the crapper,” sayeth Dennis Howlett.

Grant Thornton LLP purchases assets of Dallas-based firm Avalion Consulting LLC [GT Press Release]
Grant Thornton’s purchase of the group, “comprises two partners; Avalion’s IT consulting staff; and its IT and governance, risk and compliance (GRC) intellectual property, including Avalion’s patented GRC software solution – ComplianceSet®.”

ComplianceSet is a SaaS solution that “serves as the technical foundation for a process-based approach” for governance, risk and compliance; SOx, internal audit, and enterprise risk management.

One Diligent CPA Forced the IRS to Use a ‘Staggering’ Amount of Resources

Sure, NYU has produced lots of fancy-pants tax lawyers. And many high-powered big-school tax accountants haunt the cubicles of the Final Four accounting firms. But if driving the IRS to distraction is a mark of tax distinction, an obscure Kansas City attorney/CPA, formerly of Grant Thornton and Coopers and Lybrand, is a true tax all-star.


Or was. A federal judge this week made it inconvenient for GT alum Allen R. Davison to pursue his tax practice by enjoining him from marketing some of his most creative ideas:

Davison is hereby enjoined from organizing, establishing, promoting, selling, offering for sale or helping to organize, establish, promote, se any tax plan, as addressed herein, involving sham parallel C management companies, sham 412(i) plans, sham flock contracts or any other illegal tax scheme, plan, or device, even if not specifically addressed herein. Additionally, Davison shall not organize, establish, promote, sell, offer for sale or assist in any financial or tax related arrangement without submitting in writing to an IRS designee, a detailed plan explaining the financial or tax arrangement and all steps necessary for the arrangement to be legal under the tax code.

That would all be rather inconvenient for a practitioner. Why are the feds so down on Mr. Davison? From the injunction order:

Davison’s numerous, complex, ever-changing, tax-fraud schemes and his deliberate efforts to disguise his true involvement in the promotion of these tax-fraud schemes have required the IRS to expend a “staggering” amount of resources on discovering and combating these schemes. If this outlay of resources continues – and it almost certainly will continue in the absence of an injunction barring Davison from offering tax advice without significant restraint, then these resources will not be available to service honest tax paying Americans. Nor will these resources be available to investigate other promoters of tax-fraud schemes.

What were these “schemes”? Some of them used “management fees” to shift income from taxable businesses to sham S corporations owned by tax-exempt ESOPs or Roth IRAs. Others involved improper pension plans. But good old Midwestern farm ingenuity was behind what may be his most creative plan:

Davison drafts purported flock contracts for his clients. (Tr. 398:21-399:4). He argues that by executing these agreements, his clients become farmers, who are eligible to claim deductions for the cost of purchasing a flock of layer hens during the tax year in which that cost is incurred, pursuant to Revenue Ruling 60-191. (Tr. 412:10-20; PX 165). That revenue ruling provides “that farmers employing the cash method of accounting may deduct the cost of baby chicks and egg laying hens in the year of payment therefor, provided such method is consistently followed and clearly reflects income.”

The judge found that Mr. Davison has an overly-inclusive view of what “farming” means. The judge said that a guy with dirty boots who actually fed and raised chicks might be a farmer, but a “self-employed insurance salesman,” for example, who loaned money to a real farmer, did not.

There are many fascinating threads here, but let’s just hit three for now:

• Mr. Davison began selling many of these ideas while working for Grant Thornton, and according to the court order, marketed them through a network of CPA firms set up by GT alums. Networking pays!

• The elaborate system of preparer registration, testing and continuing education that IRS Commissioner Shulman is ramming through will spend enormous resources making honest and competent preparers jump through hoops; they would have done nothing to stop Mr. Davison. Shulman’s plan will spend money on driving honest preparers crazy with paperwork rather than chasing scammers.

• The cash-basis chicken flock technique that is outrageous for an insurance salesman is hunky-dory when done by a wealthy farmer. Because America Needs Farmers!

Joe Kristan is a shareholder of Roth & Company, P.C. in Des Moines, Iowa, author of the Tax Update Blog and Going Concern contributor. You can see all of his posts for GC here.

Fire at Grant Thornton Boston

May 11, 2010 – The Boston office was evacuated due to a fire in the building. All Grant Thornton employees appear to have been evacuated safely.

Sure enough, we tried calling Beantown and we were automatically re-routed to GT New York. If you’ve got details, get in touch.

Grant Thornton Saying Aloha to Honolulu Office

Over the weekend we learned that Grant Thornton was pulling up the stakes in Hawaii. According to our sources, the partners of the Honolulu office will be purchasing the business from GT and joining Pannell Kerr Forster, and international network of independently owned firms (U.S. locations).


GT Honolulu has approximately 60 professionals and according to one source familiar with the situation, all will be retained after the transaction According to our source, Doreen Griffith, the Honolulu Office Managing Partner will be moving to the San Francisco office to lead the tax practice there while Patrick Oki, an assurance partner will head up the new PKF office.

Our source told us that the reaction of the GTers was that of surprise but not upset, “I would say that employees are very happy but shocked.”

Grant Thornton’s disposal of this office follows the closure of its Madison, Wisconsin office, announced just last month and the Greensboro office that we reported on back in February. Several sources have speculated that Grant Thornton is moving out of smaller markets to focus business opportunities in larger markets.

Despite these moves, none of them had been previously mentioned on either of the the firm-wide calls held by Grant Thornton CEO Stephen Chipman held this year.

PKF North America’s President & CEO, Terry Snyder spoke with us briefly about the transaction, confirming that the partners in Honolulu were taking over the business from Grant Thornton and that Mr Oki “was the man to speak to.” He declined to comment on GT exiting the Honolulu market.

Messages left with Patrick Oki, Doreen Griffith and Grant Thronton’s national PR team were not returned. Emails to both Mr Oki and Ms Griffith were not returned.

If you have information on this transition in Honolulu, you can drop us a line at tips@goingconcern.com.

Grant Thornton Survey Shows That CFOs Might Be Ignoring the SEC’s XBRL Deadline

It has been well established in these pages and elsewhere that the SEC has had its share of problems. Take your pick: 1) missing the biggest financial fraud in the history of the world 2) hiring an army of porn-addicted accountants and lawyers to protect our markets 3) waffling on IFRS 4) did we mention missing huge frauds?

To be fair, the Commission has been working hard to redeem itself by cracking down on dubious activity (from Goldman to Overstock), hiring more fraud experts and giving those tranny porn-obsessed employees a second chance.


Regardless of the turnaround-in-progress, CFOs in this country seem to have ceased taking the SEC seriously. Sure the 10-Ks and Qs still get filed but those were in place long before the wheels fell off.

In a recent survey, Grant Thornton found that, despite a SEC deadline for public companies to utilize eXtensible Business Reporting Language (XBRL), a fair amount of CFOs don’t seem all that worried about reporting their financial statements using the technology:

64 percent of public companies do not currently report financial results using eXtensible Business Reporting Language (XBRL); and of those, half have no plans to in the future even though the SEC mandated that public companies have to report their financials using Interactive Data by 2011.

“It’s concerning that almost a third of public companies still have no plan on using XBRL to report their financials despite the requirement that all public companies comply with XBRL filing requirements by mid-year 2011,” said Sean Denham, a partner in Grant Thornton’s Professional Standards Group and a member of the AICPA’s XBRL Task Force. “I foresee a lot of companies playing catch up as the 2011 SEC deadline approaches.”

Whether this lack of action can be attributed to defiance, fear of technology, or pure laziness is not explained but we wouldn’t rule out the possibility that the SEC has an outright mutiny on its hands.

A third of public companies have no plans to use XBRL – despite SEC mandate requiring XBRL use by 2011 [GT Press Release]
Also see: XBR-Lax [CFO Blog]

Compensation Watch ’10: GT Reassures Merit Increases, Jury Out on Bonuses

On Friday, Grant Thornton had a firm wide call to discuss several things including layoffs, compensation, and grab-bag questions.

Headcount Reductions – Steve-o believes that the worst is over and that “restructuring efforts are substantially behind us.” If there happens to be additional “headcount transitions” it will be to refine operations or part of the no He went on to say that the people that are GTers now will, “in very large part,” remain GTers. So can we assume the action in Cleveland and Chicago was the last of it?


Compensation: GT seems is making big push towards a “pay for performance” model for its employees which means compensation adjustments will focus on top performers (“5s” in GT world) and market based adjustments (i.e. keeping up the Joneses) won’t be happening. SC cited a downward trend of salaries in the accounting profession based on a survey that GT does with Mercer (sounds convenient) for the phasing out of market adjustments. He said there might be some exceptions to this.

The size of the merit adjustments have not yet been determined because it all depends on how well 1) GT performs through the end of the year and 2) individual performance. Chip said that enough people were belly aching about the old adjustment system that a change was warranted. This will be implemented slightly for this fiscal year (can’t get all Darwin about it 3/4 of the way through the fiscal year) and will be the main methods for next year and going forward.

Bonuses: SC cleared this whole issue up saying that it has not been determined if bonuses will be paid this year. It all depends no the firm’s performance in the final quarter of the fiscal year. He did say that he’s pre-tay, pre-tay, pre-tay optimistic about the firm “being in a position to pay bonuses” but they’re still crunching the numbers so there’s no telling if it will be a mini-windfall, pocket change, or a set of steak knives.

Not to worry though, as the top performers will certainly get something if everything goes well at the firm overall.

This “new” focus on pay for performance seems kind of familiar since all the firms assign rankings to employees (with their own bizarro methodologies) and are paid accordingly. It makes you wonder if those that fall in the meaty part of the GT curve will get such a small adjustment that it will be another twist on the forced ranking trend amongst accounting firms.

Steve-o then shared his general optimism about the direction of the economy and what it means for the firm, a few recent client wins, yada yada yada. He also updated everyone with some very vague details on the firm’s new strategy “Unleashing Our Potential” that will be rolling out in the next fiscal year. Basically all non-partners will have the chance to drop their $0.02 on this strategeroy very soon but other than that we couldn’t tell if the new strategy involved a lunar landing or full-scale assault on financial reporting fraud.

Last but perhaps most importantly, Steve-o admitted to enjoying the Masters very much, however he was quite clear that he was less than thrilled to see KPMG on Phil’s lid. We’re sure it’s nothing personal against Phil but those may be fightin’ words directed straight at Johnny V.

Accounting News Roundup: Rajaratnam Claims KPMG “Tricked” Him into Illegal Tax Shelter; United, Continental Agree to ‘Merger of Equals’; Some Thoughts on iPad for Accountants | 05.03.10

Galleon’s Rajaratnam Said He Was Duped in Illegal Tax Shelter [Bloomberg Businessweek]
Raj Rajaratnam, who is awaiting trial in an insider trading case set to take place this fall, claimed that he was “tricked into investing in an illegal tax shelter,” that was developed by KPMG and “tax shelter promoter” Diversified Group, according to a lawsuit from 2005.

Rajaratnam and Galleon co-founder Gary Rosenbach won a $5.8 million in an arbitrator’s judgment against Diversified Group and its president in 2009. KPMG was not mentioned in the judgment and neither Rajaratnam’s attorney nor KPMG would comment on the current r if the firm had made a payment to Raj.

Rajaratnam and Rosenbach said they were induced to invest in a shelter called “OPS,” or Option Partnership Strategy, which was developed by KPMG and Diversified as a way to generate fees for the firms.

“The OPS shelter was essentially an illegal basis-shifting scheme which — unbeknownst to plaintiffs — relied upon a disingenuous reading of the federal tax code,” his lawyers wrote in the complaint.

Prosecutors will be interested to know what Rajaratnam said under oath in his suit against KPMG to determine if any of his statements will be useful in their insider trading case.

United, Continental Agree to Combine [WSJ]
United Airlines and Continental Airlines have agreed to combine, in a stock swap valued at $3 billion.

The “merger of equals” would create the world’s largest airline that would control 21% of the total domestic capacity and be 8% larger than Delta Air Lines in terms of miles flown, serving 370 destinations. Assuming the deal does not raise any antitrust concerns and contracts for employees are approved in a timely fashion, the companies plan to complete the transaction in the 4th quarter of this year.

iPad for business – the taste test [ZDNet]
Dennis Howlett tested out an iPad and since some of you have, at the very least, wondered about it for your own professional use, here’s his take on Numbers, a spreadsheet application that he says is “gorgeous to look at” but has several drawbacks:

I found it was possible to create a confusing error formula. Ahem. That will require fixing. While Numbers has masses of functions (see illustration), there is no ability to create Pivot Tables. Those are the accountant’s stand by for reporting and the like. It’s boring but essential stuff. Without Pivot Tables, the iPad won’t get a sniff in the hands of this powerful and influential group. There is an alternative for the future. Some smart developers out there will build reporting applications that can run over the Internet. It is one of the gaping holes in the SaaS/cloud story requiring urgent attention.

Any other thoughts on iPad for accountants? Weigh in.

IIA Proposes New Standards for Internal Auditors [Compliance Week]
The Institute of Internal Auditors is requested comment on proposals for new standards that would include a requirement for internal auditors to provide audit opinions and to additional explanation of the responsibility of internal auditors for the work of contractors.

Grant Thornton closing Triad office, moving operations to Charlotte [Triad Business Journal (subscription required for full article)]
Grant Thornton finally got around to announcing the closure of its Greensboro/Triad office. We reported on the closure back in February. The firm announced that the “vast majority” of its approximately 30 employees would be moving to the firm’s offices in either Charlotte or Raleigh. The TBJ reports National Director of Communications, John Vita’s comments: “We remain committed to the Triad marketplace, however, we believe it can be best served over the long term by attracting the highest quality professionals who wish to work out of our larger offices in Charlotte and Raleigh.”

Accounting News Roundup: ‘Enron’ Opens to Mixed Reviews; Grant Thornton Closes Madison, WI Office; New CFO at Credit Suisse | 04.30.10

With ‘Enron,’ Financial Misdeeds Hit Broadway [DealBook]
“Enron” opened on Tuesday at the Broadhurst Theatre and is receiving mixed reviews. Given the time and subject matter, brief and inadequate descriptions of the accounting techniques involved (e.g. champagne metaphor to explain mark-to-market) were necessary and some didn’t appreciate the patronization:

At the after-party for “Enron,” the most common complaint about the play was the incessant use of metaphors and monologues to explain financial topics. It took up a large amount of time in the show and some audience members felt like they were being “talked down to.”

“I know what mark-to-market accounting is,” said one audience member who did not wish to be identified but did not work in the financial industry. “I felt like they were bashing me over the head with their juvenile explanations.”

Regardless of the “one-dimensional view of this multifaceted accounting technique” and its “lacking of dramatic depth,” “Enron” also has raptors and mice in suits. That, along with choreography using light sabers has led some to call the show “visually stimulating.” If your subject matter includes accounting rules, putting them in an acid trip seems like a good approach.

Grant Thornton to close Madison office [Business Journal of Milwaukee]
Grant Thornton is closing its Madison, WI office, consolidating those operations in Milwaukee. The firm stated “its goal is to retain as many of the Madison office’s 61 employees as possible,” and that it is “committed to assisting all employees during this transition.”

This latest move follows the Grant Thornton office closure in Greensboro, NC that occurred earlier this year.

Credit Suisse Taps Mathers as New C.F.O. [DealBook]
David Mathers is currently the COO and Head of Finance for the investment banking unit at CS. He takes over for Renato Fassbind in October.

Grant Thornton Employees Can Expect Handwritten Thank You Notes Any Day Now

It’s been awhile since we shared some of Stephen Chipman’s blog musings (mostly because we were too busy watching dust accumulate) but he was probably saving the more interesting stuff for post-April 15th.

“Interesting” obviously being a relative term but in his latest epic, he was not short on praise for those of you that remain with the firm:

Having just passed April 15, the first words I want you to read are “Thank you!” As we move through our busiest season, I continue to be impressed by the long hours, personal sacrifices and collaboration I read about in my e-mail, on our home page and by special letters and words of praise and thanks from our clients. As I’ve met with clients recently, one after another client executive raves about our people. It’s customary in the firm to say that clients rave about “our service,” but what they’re referring to is “you.” They are raving about each of you. The individuals for whom you work and with whom you have formed strong relationships based on excellence and trust are taking the time to tell me how valuable you have been to their respective businesses. Every time you show up, speak up and stay up late, you are demonstrating our global values: collaboration, leadership, excellence, agility, respect and responsibility. You are making a difference.

In case you missed it, your mere ability to drag yourself out of bed every morning, get to work at a decent hour, manage to utter a coherent sentence, and sacrificing your own health by depriving yourself of sleep you are making a difference. Your clients have noticed this by way of your wrinkled clothes, scuffed shoes, that expanding paunch, and your the all around zombie-esque qualities you exhibited every day during busy season (never mind this was all done for very little money).

And because of all those raving clients, Steve-o sent a little nudge to GT partners to make sure that they know, that you know, that they appreciate it because as it stands, they’re not doing that bang-up of a job:

Thank you.

These two simple words make a profound difference.

Feedback from the Voice Your Experience survey indicated that we need to continue to improve how we recognize our people. Interestingly, research shows recognition is not only about money and that a personal acknowledgement is especially powerful in motivating people to achieve exceptional results.

Please use the enclosed stationary to write your people notes of appreciation. By modeling this behavior, you play a key role in perpetuating a spirit of acknowledgement that benefits both our people and our business.

As always, thank you for all you do to make a difference every day.

/s/ Stephen

Okay people, illegible thank you notes (on extra-special stationary!) should be coming your way. Gratitude by way of money is cold and impersonal anyway.

Layoff and Exodus Watch ’10: Grant Thornton Chicago and New York Seeing Movement

Two weeks ago, we heard that Grant Thornton’s Cleveland office started their layoffs a little earlier than what on might expect that was followed by an emergency meeting that the content of which is still a mystery.

Now we’ve received word on Chicago and New York who are rumored to be having layoffs and some quitters respectively.


From a Chipman Blog Reader:

I work in audit at Grant Thornton and have heard through the grapevine that offices are trying to keep staff. With the job market improving, it seems like other offices are looking to see if staff/seniors voluntary leave before making any final decisions pre-promotion day. Chicago has let go a partner and 2 senior managers in the audit practice and rumors are swirling of a few staff reductions, which seems crazy given that the current A1 class and the incoming class are so small. For other offices, national is working to roll out a benefit plan practice similar to what Chicago has to help keep staff busy during the summer months but it looks like this is not moving quickly enough….[T]he GT wire is that NY saw 10+ individuals put in their notice recently.

We left messages with both the Chicago and New York offices, neither of which have been returned.

An accountant close to the situation indicated that the partner and senior manager layoffs are part of those mentioned by Stephen Chipman back in January.

At that time, SC said that many of those partners and senior managers were already being notified, so since these most recent cuts knew that this day was coming, it was awfully generous of them to stay on for this busy season (we’re guessing there was money involved).

As far as the the staff situation in Chicago is concerned, cuts at the staff level do seem crazy if the classes are small. Meanwhile, although some attrition in New York was probably expected, at this point, it’s not clear whether 10+ leaving in mid-April is a lot or a little. Keep us updated.

What Was the Emergency Meeting at Grant Thornton’s Cleveland Office All About?

After Grant Thornton sprung into layoffs ahead of everyone else (based on what we’ve heard anyway) on Tuesday, the Cleveland audit practice leader apparently arranged an impromptu sit-down to discuss some things, among them, the headcount.


From an accountant close to the situation:

They let go of an A2 on Tuesday also. The audit practice leader then called an emergency audit dept meeting referring to us as “inventory” and that they were “managing the pipeline.”

We left another message with GT Cleveland to see if we could get a copy of the minutes or something but no one is calling us back.

Regardless, we get the “inventory” analogy but in this case, the inventory happens to have rent/mortgage and possibly a cocker spaniel or other human beings to feed. But seriously, we still get the analogy.

Taking it a step forward, was the “inventory” all that was discussed? Something else could have come up, say Stephen Chipman’s blog? Speculating about the whereabouts of Gabriel Azedo? Arguing over Indians tickets for Monday? Any other ideas? Discuss or let us know.

Layoff Watch ’10: Grant Thornton’s Cleveland Office Starts Early

From Casa de Chipman:

A manager, a senior III, and senior II were quietly let go yesterday. In addition, the conference rooms are booked for today. I have not heard from other offices, but the Cleveland office appears to be kicking off the race early.


Seems early but our source indicated that these were audit professionals and we’re sure each office has their own method to the madness. Layoffs as this level were also not mentioned by Stephen Chipman during his firm-wide call back in January, although many have indicated that they would be happening regardless.

We left a message with the Cleveland office’s HR but so far we haven’t heard back and GT’s national PR has not responded to our email. If you’ve got an unexpected meeting coming up or have more details, get on the horn.

Overstock.com Turns a Profit; Patrick Byrne Writes a Very Un-Patrick Byrne Letter to Shareholders

This morning we thought the KPMG audit team working on Overstock.com would continue slaving away through the extension deadline tomorrow to get that beast of 10-K finished. Well! Turns out they’ll bet of you tonight because the OSTK 10-K has been filed and, as promised Overstock shareholders, your humble servant Patrick Byrne and Co. are reporting an annual profit for the first time ever!


After such a high, restatement or not, we’re guessing Sam Antar definitely won’t be getting an apology but Gary Weiss has already noted a couple of things:

First–stop the presses! Overstock’s auditors at KPMG says that Overstock has insufficient internal controls.

Second, the Marin County District Attorney and four other DAs in northern California want the company to fork over $8.5 million to settle consumer ripoffs by Overstock. The company disagrees and is fighting it, so …. No, wait a moment, make that read “$7.5 million.”

First off, we share Gary’s shock — SHOCK! — on the insufficient internal controls revelation. Second – AUDITORS! We talked about this, remember? Read the 10-K carefully. Overstock’s “Risk Factors” section runs 25 pages for crissakes. A million fucking clams can’t get missed!

You know what though? Mistakes happen, so we’ll let it slide.

Oh, and about that letter to shareholders. Patsy doesn’t bring up former auditor Grant Thornton once, doesn’t quote Nietzsche, compiain about short sellers, bring up Facebook, or say anything remotely antagonizing (although on page 32, the Company’s states he still might).

This makes think: 1) Is he not feeling well? 2) We want the old Patrick back! Read for yourself:

Dear Owner:

In Q4 our revenues grew 27%, twice the ecommerce industry’s rate, and we earned $12.7 million in net income. In 2009 we grew revenues 6%, earned $7.7 million in net income, generated $46 million in operating cash flow, and generated $39 million in free cash flow. It’s nice to be profitable.

I am proud that, for the second year in a row, we rank number 2 in the NRF/Amex survey of American consumers, behind only LL Bean and ahead of Amazon, Zappos, eBay, Nordstrom, and many other fine firms.

As you may know, at the end of Q4 we engaged KPMG as our independent auditors, and announced that we were restating our FY 2008 and Q1, Q2 and Q3 2009 financial statements. I thank you for being patient with us as we worked through the questions raised by the SEC, the transition to the KPMG team, and the extra time it took to ensure that our financial statements are accurate.

I look forward to our conference call next Monday. Until then, I remain,

Your humble servant,

Patrick M. Byrne

Stephen Chipman Begrudgingly Wore Green on St. Patrick’s Day

Stephen Chipman’s blog post from last week got lost in the shuffle but you’ll be happy to know that you didn’t miss anything. Our lack of enthusiasm is not shared however, as the daily grind for a globe-trotting CEO seems to be enough to entertain some of the GT faithful. How do we know?

He shared one reader/fan’s thoughts this week, that’s how, “So, you really don’t just drink coffee and check e-mail!” While SC neither confirmed nor denied this particular allegation, one could assume that this is a big part of his day.

Moving on…Of the near 1,000 words in this week’s masterpiece, the only thing really worth mentioning is that the GT CEO spent his first St. Patrick’s Day in Chicago last week. And guess what Chi-town? You didn’t let him down; Steve-o was impressed.

This is my first time living in Chicago to experience St. Patrick’s Day; it was very interesting to see the Chicago community’s commitment to this holiday. Dutifully I wore my green tie, in respect of St. Patrick, which was very challenging to do for an Englishman. Nevertheless, I thought it appropriate…even though the Irish did beat the English at rugby a couple of weeks ago in the Six Nations Championships…which was a crushing disappointment…but I digress.

Digression! He’s really getting the hang of this. Maybe Chip’s blog readership is increasing?

The real question is what did SC see on St. Pat’s that piqued his interest? The green river? The turnout at the parade? The vast number of people vomiting in the streets? More details Stevey!

On the biz-nass front, SC did have a conference call with all the GT global leaders and he had to get up bright and early to get on the call at 8 am Chicago time. He did admit that this is NBD because when Steve-o was in China, he had to do the call in the god-awful morning hours to accommodate the BSDs in the U.S. and London.

Speaking of China (and digression), does anyone think Steve knows where mini-Madoff of Hong Kong Gabriel Azedo is? Dude has been missing for awhile.

Is Stephen Chipman Preparing to Embrace Twitter?

We hope! Our speculation is fueled by a line from SC’s most recent post:

“Because I’ve heard it said that brevity is not my strong suit, I will try to explain it in 50 words.”

Whether Steve-o realizes it or not, at 50 words, he still needs to improve his brevity. But it’s a start and we’re hoping that he’ll get eventually embrace Twitter. We’re envisioning pithy Tweets followed by clever hashtags like #GTrocks or #Big4sucks or #isecretlyheartsuesachdeva.


The fact the whole brevity topic came up makes us curious. We only made mention of it once, ages ago, so we’re certain that he isn’t referring to our commentary (which we’re sure he reads religiously).

Anyhoo, Even-Stephen was referring to the difference between the Grant Thornton Senior Leadership Team and the Partnership Board. Disappointing everyone, he ended up using 51 words and 258 characters:

The SLT is the equivalent of executive management, and the Partnership Board is the governing body of the firm. The SLT is appointed by the CEO and approved by the PB. The CEO is appointed by the PB. The SLT reports to the CEO, and the CEO reports to the PB.

That’s followed up by Stephen getting back to his windy ways, describing what every member of the SLT does (you can get the gist from their titles).

So while we’re encouraged by Chip’s effort at getting to the point, he still has some work to do. Just sign up and go for it man. Plus we’d be interested to know who Steve-o would follow. Going Concern is a given but does he go intellectual and follow Taleb and Roubini? Or slum it with the rubes and follow Kim Kardashian, Courtney Love and Kanye?

Stephen, just get on Twitter.

Grant Thornton Was Not Impressed with the SEC’s Waffling on IFRS

We really weren’t expecting much of a reaction from accounting firms on the SEC’s conclusion that there’s no rush on the IFRS issue. The Commission statement that it supports “a single set of high quality accounting standards” was good enough for PricewaterhouseCoopers, who issued a press release the day of the announcement.


The press release sounds eerily similar to the SEC’s statement with a quote from Bob Moritz thrown in for good measure:

“PricewaterhouseCoopers continues to support the goal of moving toward a single set of high quality global accounting standards,” said PricewaterhouseCoopers LLP U.S. Chairman and Senior Partner Bob Moritz. “We believe that IFRS is in the best interest of stakeholders, including investors both here and globally. We are, therefore, encouraged by these statements from the SEC.”

So PwC is encouraged by the recent development. This isn’t shocking. P. Dubs will be on board because they don’t strike us a bunch that will rock the boat. Presumably, any a hint of discontent from the Firm could potenitally jeopardize their ubiquitous magazine list presence.

On the other hand, we were surprised to see this Tweet from Emily Chasan of Reuters that pointed us to the Grant Thornton press release that came out today.

GT was NOT IMPRESSED with the SEC’s latest commitment to non-commitment, “like many in this country and elsewhere, we were hoping that the SEC would announce a mandatory date for switching to IFRS by U.S. public companies. Instead, the Commission reaffirmed that it expected to decide in 2011, provided resolution of certain issues.”

Now in case you’re questioning GT’s sincerity in this matter, they make their case for why this feet dragging is unacceptable:

Whether the U.S. races or crawls toward IFRS could mean the difference between staying in front or falling behind. The rest of the world is moving forward, boldly. Major economies like Japan, China and India have already chosen IFRS. It is unrealistic — and risky — to think that we can stand outside looking in forever. If we don’t want our influence and opportunities stripped away, we must make sure that we keep a seat at the table.

This is probably as insubordinate as you can expect an accounting firm to get over an issue that is “largely academic” but it is refreshing to see a little public honesty out of GT.

Grant Thornton LLP statement regarding SEC and IFRS Roadmap [Press Release]
PricewaterhouseCoopers States Support for SEC Move Toward Single Set of High Quality Accounting Standards [Press Release]

Stephen Chipman Managed to Not Stop By Going Concern HQ While He Was in New York

This week in Stephen Chipman blog dissection, we learned that SC had another week full of travel, although he managed to resist the temptation to head back to Atlanta for the third straight week. It was typical back-slapping, glad-handing wily CEO shenanigans in Chi-town including a little chat with Assistant Secretary of State for East Asian and Pacific Affairs, Kurt Campbell. “Dr. Campbell recounted a wonderful story of his very first diplomatic event with Secretary Clinton at Blair House — entertaining a senior Chinese delegation.”

Yeah. He leaves you hanging. Our guess is that Hil was telling Bill jokes and/or doing armpit fart noises but it’s all a mystery because Stephen changes the subject entirely. C’mon man! You can’t do that!


Anyway it and then on to DC for a speech IFRS and why it’s on the road to nowhere in the US of A:

I had been invited to be the after-dinner speaker for the National Venture Capital Association (NVCA) Board of Directors meeting. Although I feared the impossible expectation of being a “rousing, after-dinner” speaker on the topic of International Financial Reporting Standards (IFRS), interest was high on the eve of the SEC’s highly anticipated announcement of plans to move forward with their Roadmap for IFRS adoption in the United States.

We’re continually impressed with Steve’s ability to throw in the dry humor, although we suggest dropping the unnecessary quotation marks. Definitely would read more deadpan. If you’re not familiar with the phenomenon of unnecessary quotation marks, you’re probably an abuser.

Moving on…

Chiparoo then trekked up to the City where he talked more about IFRS with the Center of Audit Quality, “The lively conversation focused on the SEC’s announcement regarding further clarification on their Roadmap.” And by that he means everyone there is pissed that the SEC is perfectly happy to drag this thing out.

Post-IFRS chat, SC met up with Ed Nusbaum and they did some MSM hopping, “I met up with Ed Nusbaum and Grant Thornton’s Director of Corporate Communications John Vita for a media tour. Ed is a veteran with the press, but press junkets are relatively new for me. We spoke to reporters at Bloomberg, Fox News, the Wall Street Journal and Thomson Reuters.”

Okay, we’re a little hurt by this. Sure we work remotely but would it have killed you to stop by Steve and leave a note? GCHQ might not have the fancy confines of the WSJ or the ‘Berg but we’d make you guys comfortable as possible. Plus there’s always stimulating conversation. Or just simple call saying “Sorry we couldn’t make it. Next time!” just to get our hopes up.

While we’re still getting over this little slight, we’ll just mention that Steve’s blog, to our knowledge, doesn’t have a name. We’ll take the weekend to mull over this but in the meantime, if you’ve got suggestions, feel free to share.

More Sue Sachdeva Fallout: Koss Resigns as Strattec Audit Committee Chair; Grant Thornton Dismissed as Auditor

The Sue Sachdeva wrecking ball continues to do damage as we learn today that Michael Koss has resigned as the audit committee chair of Strattec Security Corp. Oh, and Strattec also dismissed Grant Thornton from its audit duties for the Company, saying that “[it] decided to consolidate all of its outside accounting/auditing work with Deloitte”.

And yesssss, Michael Koss resigned, at least in part, due to the uesay achdevasay tealinsay oneymay:

David Zimmer, Strattec’s new audit committee chairman, said the problems at Koss Corp. played a role in Michael Koss’ decision to step down as the committee chair at Strattec. He said audit committee chair is a demanding and time-consuming job. “Everyone has to evaluate how much time they have to spend on things,” Zimmer said.

So in other words, you’re saying that Mr Koss, who by all accounts wasn’t spending any time keeping an eye on his own company, can’t be expected to serve as the audit committee chair of this company since it’s kinda sorta an important position. We get that.

As for GT, Pat Hansen, Strattec’s CFO said that this was something the Company was ‘mulling’ over anyway and that the Koss fiasco and the timing of this dismissal were ‘more coincidental’. Okay but it the made the decision a helluva lot easier, didn’t it?

And the Sue trainwreck rumbles on…

Koss resigns as audit committee chair at Strattec [Milwaukee Journal Sentinel]
Recent Koss/Sue Sachdeva News:
Koss Sues AMEX for Sachdeva Spending Spree
Koss: Financial Results Will Be Better Now That the Whole Fraud Thing Is Over

Grant Thornton Is on This National Employee Appreciation Day Thing

So, servants of the capital markets, how’s the motivation? Stable? Critical? Grave? Whatever your condition, if you work at Grant Thornton, you’ll be happy to know that there’s a chance (somewhere between slim and good) that you’ll receive a little token of appreciation tomorrow:


Exciting, right? We’re not sure these GT e-cards are of the erotic variety but that would definitely be a great show of apprect have the self-control to forward it to your non-GT address and wait to check it at home so you don’t end up like some people.

Turns out National Employee Appreciation Day has dropping on the first Friday in March since 1995 but we’ll be damned if we’d ever heard of such a thing. Is there some coordinated effort among accounting firms, large and small, to keep this thing as quiet as possible? It’s busy season after all; the close proximity to deadlines should be appreciation enough.

Anyway, Recognition Professionals International put this together back in the Clinton days and presumably it’s been a hit because, well, it’s still going on. Jump over to the website however, and you’ll find out that they have far bigger ideas that just e-cards:

Recognition can take a hundred forms and variations. Here are just a few ideas:

1. Ask an employee to write down six ways they would like to be rewarded. Anything goes. The only rule is that half the ideas need to be low cost or no cost.

2. Schedule lunch dates with employees. Give them an opportunity to select the luncheon site, and use the time to simply get to know them better.

3. Offer a free one-year subscription to an employee’s favorite business magazine and have it sent to their home.

4. Consider a gift certificate entitling an employee to lunch with you or another mentor of his/her choosing for the purpose of being coached on one or more topics.

5. Offer a shopping spree to a local supply store for an employee to get items (no staplers or paper clips allowed) to personalize his/her office or cubicle.

6. Give the gift of wellness. Have a limousine pick up an employee for a full day at a spa. Give gift coupons for ballroom dance, yoga or golf lessons.

7. Give a fun-loving employee a series of On your mark-get set-GO cards that they can redeem at their discretion. For example: Leave work early to go to a movie, or shopping, or play ball.

8. Send a handwritten note of thanks for the completion of a job well done.

9. If an employee stays late/goes above and beyond to complete a project, send the employee and his/her partner to a nice dinner.

10. Purchase a company “toy” your employees would most enjoy; a cappuccino machine, dart board, volleyball court, exercise room.

Now judging by this list, it appears that GT looked through these and thought, “Number 1 could be taken advantage of in ways that could get the firm in trouble (wink-wink, nudge-nudge) and the rest of these involve spending money. With the exception of number eight!”

So an idea was born. GT e-cards. Here’s hoping that you all get an inbox full of these because A) you deserve them and B) the better the odds are that someone will forward it on to us so that we may take a gander and then share it with everyone. If you don’t receive a GT e-card (or anything for that matter), then you have every right to go postal on whoever you damn well please.

Reminder: Extended Haiti Donation Deadline for 2009 Tax Returns Is This Sunday

Despite many arguments that the extension was bad legislation, it cruised through Congress and was quickly signed by the POTUS and now the window is closing fast.

For those of you that are able to itemize deductions and you’re looking for a little extra deduction for ’09, the countdown is at t-minus two days.

If you are considering a last minute donation, A) what the hell have you been waiting for? B) you’re in a bit of luck because the deadline has a little bit of wiggle room, as Kay Bell tell us, “If you charge your donations to a credit card before the end of February, that counts even if you don’t get or pay the your credit card bill until next month or later.”


For those of you that don’t trust machines and are cutting a check, you best drop it soon if you want it to hit your ’09 return, “don’t send a check dated Feb. 28 on March 15 and claim it…if a tax examiner looks at your statement and sees the check didn’t clear until the last half of March, your deduction will probably be disallowed.”

Oh and it’s cash only. Your clothes that were originally meant for your garage sale this Spring are generous but not eligible for the extension.

On a related note, part of Stephen Chipman’s blog post from this week announced that Grant Thornton had raised approximately $140,000 that will be split between the Red Cross and the Salvation Army. Thumbs up GT.

2009 Haiti donation deadline Feb. 28
[DMWT]

Stephen Chipman Blog Watch: Back to Hotlanta

Today in Stephen Chipman blog analysis we’re thinking that the rager that he attended in Atlanta got him jonesing for another trip down south because he made another short excursion down to GA but this time it was for some strategory:

Attending a hard-working Senior Leadership Team (SLT) meeting in this wonderful city, I took a break to check e-mail. I thought perhaps I’d had too much BOLD coffee, when I skimmed this alert to our Atlanta personnel:

Please be advised that the downtown [Atlanta] connector is currently backed up due to a zebra escaping from the Barnum & Bailey Circus. Zebra has since been captured; however, traffic is expected to remain backed up

Right then, Zebra has been captured.

Two things: 1) is Chip a caffeine junkie? and 2) that last sentence strikes us as deadpan. Do we detect some style here?

Putting wild animals and addiction aside, SC goes on to tell us about a little rendezvous he had in London for some Grant Thornton International back-slapping that he got to do with his predecessor and current GTI CEO, Ed Nusbaum. Nothing really to report other than Steve-o claims that word round the camp fire is that Ed has started sneaking out the back door again but secretly doesn’t give a damn because he’s got the big chair now and he can do whatever he wants. He’s talking like he’ll start walking out the front door, in front of everyone, because he leaves when he wants.

That’s how we read into it anyway.

It seems that while Steve has taking this blogging thing by the horns there hasn’t been much commentary on more fun topics (maybe it’s just us). For example, we’d really like to know if he joined the “Sexy Accountant” group on Facebook or what his biggest audit room pet peeves are.

We’re just saying, don’t be afraid to put it all out there.

Grant Thornton’s Valentine to Employees Did Not Consist of Heart Candy

It’s the middle of February and many of you are somewhere between completely exhausted and death warmed up. This is not lost on blogger extraordinaire Steve Chipman. SC’s weekly info session has been crucial to your survival (even though it’s not meant for all of you). Knowing that his soothing words will only get you so far, he’s taken a different approach this week.

Since it was St. Val’s on Sunday, Chip figured he would mark the day for lovers by boosting your spirits by using the words of GTers less CEO-y than himself.

Today I’d like to offer some inspiration to help us push through busy season. The last year and a half have required so much more from everyone that it’s hard to imagine we can work even harder, but it’s evident that we are everywhere I look.

So what keeps us going? That’s what I was looking for when I reviewed the “I am Grant Thornton” interviews we conducted last fall. We asked a variety of people in different roles, in different offices and at different levels if they felt they made a difference, and, if so, how.

It is hard to imagine that you can work harder, isn’t it? Your spreadsheets are bleeding through your monitors, you’ve ingested far more MSG than is recommended, and your cube farm neighbor (who ordinarily smells funny) is looking hot .

And we weren’t aware of this “I am G to the T” exercise but it sounds stupendous. Who knew your personal experiences would be used at this most crucial time of year? Bet you would have really put some thought into if if you had known your words could possibly have been immortalized on Steve-o’s blog.

Here are some carefully selected examples from SC’s list and our thoughts on each:

When a client calls me and says, “Can I pick your brain?” it’s so great because (1) they recognize I have a brain” – We agree that it’s nice when your client recognizes that you are of the same species.

“I had a client tell me recently, and I’m quoting, ‘We hire Grant Thornton because you get [stuff] done.’” – That’s Stephen’s edit. This is a family blog, people.

“I make a difference every day because I work here.” – And because my mother said so.

“Every day is a great achievement.” – We agree. Crawling out of bed is tough.

“How do I make a difference? . . . You know, I’m happy.” – God, you’re one of those happy people.

“I’ve worked at the big firms. We are not bigger by any means, but it’s a question of caliber. I knew it from my first day on the job here. We’re just a different caliber of firm.” – We’re not size queens at GT.

Steve-o’s send-off has us begging for more and also causes us to wonder A) who is this homecoming queen? and B) is Chip a Bass or a Tenor?

I’m also proud to say that among our great people are a former homecoming queen and a professional make-up artist. Of equal wonder, one of you found the most surprising thing about coming to Grant Thornton was “that all the partners have great singing voices.”

There’s more where that came from, but this is the firm’s Valentine to you.

Thanks for you!
Stephen

You could do back-to-back busy season now, couldn’t you?

Koss Investors Lining Up for Litigation; Will Grant Thornton Join the Party?

Investors in Koss Corporation are lining up in the pending litigation against the company and a press release from law firm Carney Williams, announced this morning that those interested in as lead plaintiff have until March 12th to make their desires known.

Form the press release, “The Company and certain key executives are alleged to have violated federal securities laws by issuing false financial statements and failing to maintain adequate internal and financial controls.”

Many, like Tracy Coenen, have argued that the internal controls are management’s responsibility and Grant Thornton was not engaged to audit these controls but does that mean that GT will dodge these investor lawsuits?


We spoke with Randy Pulliam, a partner at Carney Williams on the case if he expected Grant Thornton to be named in the litigation, “the lead plaintff will ultimately decide as to who will be named in the litigation, including the accountants.”

There’s nearly a month until the deadline so it’s far too early to tell who will decide whether Grant Thornton needs to be included but we’ll go on record saying that we’d be shocked(!) if GT manages to get forgotten in this whole matter. Regardless of your feelings on the firm’s responsibility (i.e. GT should have discovered the fraud or not) the fact that Sue Sachdeva is accused of embezzling $31 million over a period of five years while Grant Thornton was auditing Koss will not be lost on the investors or their attorneys.

“This is a five year class period so many investors are eligible to participate,” Mr. Pulliam told us. Plenty of investors out there would like to see someone make things right. Grant Thornton seems like a decent candidate especially since their pockets are far deeper than Koss’. So if you asked us to put a wild-ass guess on the odds of Grant Thornton being named in the lawsuit, we’d put it somewhere in the nabe of 10-1. Not Mine that Bird territory but not Secretariat either.

We left a message at Koss and dropped an email to Grant Thornton seeking comment and neither have gotten back to us at this time. We’ll continue to update you on the developments, shopping addictions and otherwise.

Stephen Chipman Is Slightly Annoyed by the Non-Grant Thornton People Reading His Blog

We didn’t get the third installment of Stephen Chipman’s blog until late last week and apparently while the Grant Thornton CEO seems to be keeping up his promise to come at you once a week, he’s going to be a bit more reserved going forward.

Last week SC shared a few insights from his readers, however we warned that he wouldn’t be sharing the most intimate details (e.g. ragers in Atlanta):

Because large portions of my blog are finding their way to external Web sites, I will answer some sensitive or strategic questions via internal e-mail and send my responses directly to the person who posed them.


Well, shucks. We’re not sure what “external websites” SC is referring to but as far as our humble posts are concerned, we merely provide snapshots that certainly don’t qualify as “large portions”. If you guys are aware of someone reposting the posts in full, get in touch with us and we’ll let them know at GTHQ.

We’re also curious as to what will qualify as “sensitive or strategic questions”. Is SC getting prodded with nosy questions about Sue Sachdeva? If so, he could at least give us a diagnosis on her supposed shopaholic tendencies. That doesn’t seem too sensitive. It’s most certainly not strategic.

We’d also like to hear his thoughts on Grant Thornton being vindicated in the Overstock.com circus. Patrick Bryne said some pretty nasty things about Steve’s beloved firm. This is the perfect opportunity for Steve-o to throw it in Patsy’s face via an all-out blog-off. Does he take it? So far, no. Sensitive? Absolutely not. This is justice. Strategic? Not really. Chip must get enough satisfaction knowing that the firm clear of the whole thing and doesn’t see the need for gloating. We’ve got two words for that: MISSED. OPPORTUNITY.

Because of this new cautious approach, we don’t have any parties or white whales to share this week but SC did mention that he got a little face time with SEC Chief Accountant James Kroeker. And don’t think that just anyone was invited to this little sit-down, “I was honored to be included in this very small group, which also included the CEOs of two large competitors.”

Well! We’re assuming Chip is referring to two B-I-G-F-O-U-R competitors and only since only two of them were there, this is pretty H-U-G-E opportunity for Steve. SC won’t turn down a little glad-handing with the Chief Accountant, no sir. Unfortch, he didn’t really get into what was said at the meeting but we’re sure it was a stimulating convo: Olympic fever. St. Val’s gifts for the wives. Maybe some talk about the nonexistent SEC roadmap on IFRS? Here’s to hoping that he’ll open up more this week.

Winners and Losers in the Overstock Restatement

With Overstock.com announcing last week that they would be restating their financial statements for the the last three quarters and their 2008 consolidated financial statements, it marked another open-mouth-insert-foot moment for Patrick Byrne and his Company.

This will be the third restatement in the last three years. We understand that financial reporting can be tricky but this doesn’t make for a very good pattern.

Winners:

Steve Cohen, Michael Milliken, Sam Antar, Joe Nocera, Gary Weiss, Roddy Boyd, Barry Ritholtz, Felix Salmon, Henry Blodget, John Carney, Joe Wisenthal, et al. – Anyone and everyone vilified by Patrick Byrne because they questioned either him, his Company, or both. Patrick Byrne has always maintained that these people were part of large conspiracy of short sellers and financial bloggers and journalists. The restatement simply proves that whatever suspicions they had about Overstock, they were right. Plus all their friends and family on Facebook were violated by creepazoid and Deep Capture hatchet-man, Judd Bagley. That’s just not cool.


Grant Thornton – Not sure if GT realized it at the time, but getting fired by Overstock is looking pretty good right now. So they changed their minds on the accounting; BFD, right? It happens and clients typically get over it. Pat Byrne decided that it was unacceptable and that LOUDLY crucifying GT in SEC filings, the press, and on conference calls would convince everyone that the auditors were idiots and Overstock and he would triumph over this injustice. Grant Thornton did not hesitate in chanting “liar, liar pants on fire” to Patsy’s face (nothing to lose, they were already fired) and now they’re clear of this three ring circus.

Losers:

PricewaterhouseCoopers – PwC was the auditor for Overstoc prior to Grant Thornton and had always signed off on the company’s financial statements (excellent service in PB’s mind). Now that the restatement has occurred, PwC gets dragged back into the fray to explain what they did, why they did it, and how they got it wrong. A) That just sucks and B) who the hell is going to remember what the hell they did four years ago?

Overstock shareholders – Any Company that restates their financial statements with any regularity whatsoever should be avoided like a group of lepers. If you’re still currently long in Overstock, you have the chance to make the right the decision: sell while the shares are worth something. Your humble servant Patrick Byrne has failed you.

Jury is out:

KPMG: For some reason, Klyneveld Salt Lake City decided that despite Overstock’s dubious past, they were willing to roll the dice. The firm now has the pleasure of guiding the firm through this restatement and somehow pulling the audit for fiscal year 2009 together. The whole exercise reeks of futility. Anyone that happened to be assigned to this engagement and a shred of sanity would have given their notice on the spot. For the time being, the firm seems to be sticking it out but time will tell if the firm changes their mind about their risky new client.

SEC: Everyone knows that the Commission doesn’t have the best track record of late. They have managed to be the laughingstock of the entire bureaucracy and despite a lot of huffing and puffing about new divisions and putting together a dream team of enforcement and financial experts, we haven’t seen much for results. Overstock may be a chance to show everyone that they’re done taking shit and that they are going to start smacking companies around.

KPMG, Grant Thornton DC Offices Are Closing at Noon

We heard that it was getting ugly in the Nation’s Capital so we called around to find out what’s what:

KPMG – “Closing at noon both DC and Tyson’s”

E&Y – “No word yet”


Deloitte – “We’re hopeful”

PwC – “We go by the Federal Government”

Grant Thornton – Closing at noon.

Nothing like a snow day but a snow day during busy season is an especially welcome event. It’s supposed to get nasty in Philly too but it hasn’t started snowing there yet, so unfortch you’ll probably have a full day ahead of you (out at 3 pm if you’re lucky).

An added bonus is the possibility that the storm could keep you from working the weekend. Unless, of course, you plan on working from home. If this is the case, we advise you to get home safely, set everything down when you get there, take off your coat and slap yourself. Twice. Hard.

Grant Thornton Gets Emotional in Its Ad Campaign

This morning we took a look the deadly advertising at BDO and while they came up with a good tagline, they were unable to capitalize on the opportunity to personalize their service with actual clients.

In contrast to the utilitarian feeling of the BDO advertising, Grant Thornton is all about emotions. The most important statement that a professional service agency can make is that it is passionate for the client’s business, and Grant Thornton’s attitude is authentic. The firm is well defined by the tag line, “People who love what they do” and by the whimsical rose mnemonic.

The three spots in the campaign are not balanced. This one about customer service misses the mark. It is long and tedious and continues to run needlessly after the point is made.


This commercial extolling the global capabilities of Grant Thornton is better. It is well written and although it is not particularly visually arresting, it makes the point about the firm capabilities crisply.

The commercial about responsiveness is the best. It stands out because it uses humor and the analogy of the unreliable, hapless goalie is relevant and easily understood. All in all, Grant Thornton tackled the challenge of advertising a professional service firm well.

With Valentine’s Day around the corner will GT take the next logical step and extend their passion campaign in to special topical ad?

Avi Dan is President & CEO of Avidan Strategies, a New York based consultancy specialized in advising professional service companies on marketing and business development. Mr. Dan was previously a board member with two leading advertising agencies and managed another.

Stephen Chipman’s Latest Blog Post: Atlanta Knows How to Party; The End of Suffering

Last week, we were a little disappointed in Stephen Chipman’s debut blog entry; A) it’s not public for the whole world to read and B) it reminded us of a journal except all the good stuff like morning bathroom routine, the wife’s headache, compensating for said headache, etc. was left out.

This week is a little better (no Lost recap and 1,200+ words are big negative points), as he shared with the GT troops about his little excursion down to Atlanta to do some glad-handing at the open house for the new office space there. Chip was impressed not only by the new LEED facility but by the willingness of a fair amount of people in Atlanta that had nothing better to do on a Wednesday night:

What struck me was that these were not people who came through obligation; they clearly wanted to be there. I met many clients, and they all had warm and wonderful things to say about our Atlanta office partners and people. Where some business receptions can be deadly if the mix and tone aren’t just right, people were really enjoying themselves — they stayed, they mingled, they had fun, many enjoying themselves well past 9 o’clock at night. (It kicked off at 5).

Okay, so where are these deadly receptions occurring? We’ve been to some wild get-togethers where some people might not get along but there was no risk of anyone ending up dead. Perhaps he just means “shockingly awkward.” That’s way more believable than a party where a homicide may or may not occur.

And why would he be surprised if people could booze for free for over four hours? If there’s free beer and wine to be had in the middle of the week, that probably is the best thing you could do on a Wednesday.

The only other tidbit worth mentioning is that Steve-o got a little redemption that was over two decades in the making. Back in the 80s when Chip was a manager living in Dallas, chasing SMU tail and starting to network, he was courting a prospect that ultimately went with a “large competitor.” Since that point in time, he has not taken it well:

For years — and this was more than two decades ago — I’ve watched this company from afar, and it’s become quite successful. I felt a pang every time I saw their signs (which were everywhere), and also their advertising at NHL games and sports arenas. With every sign sighting, I got increasingly frustrated that they were not a Grant Thornton client.

Many times SC could be caught looking off into the distance, dreaming about the one that got away. A tear. A lone tear…

Well you can rejoice now bitches! Turns out a current GT client recently purchase this prospect that broke our hero’s heart and is now a client of GT. “After almost 22 years of misery, my suffering has ended,” SC utters. This was his White Whale.

And to wrap it up, SC threw in a nice little pep talk for all of you GTers out there feeling down and out, “We don’t need to be the biggest to be the best.” He’s still thinking about you; even if you’re not in Atlanta.

Still no Lost recap.

Grant Thornton to Close Greensboro, NC Office

We’ve received multiple tips informing us that Grant Thornton’s Greensboro, North Carolina office will be closing in the spring after busy season has ended.

Greensboro has approximately 35 professionals in all three service lines although our sources indicate that many tax professionals were laid off late last year in anticipation of the closure. Greensboro currently functions as a satellite of the Charlotte office which houses the support professionals.

What’s not known at this time is whether the office will become virtual, similar to the setup that Ernst & Young arranged for its Greensboro office other whether it will be an outright closure.

We contacted Grant Thornton for comment and had not heard back from them at the time of this posting.

If you’re familiar with the situation in Greensboro and have more information, get in touch with us. We’ll continue to keep you updated as we learn more.

Ladies and Gentlemen, Stephen Chipman’s Blog is Live

As promised, Stephen Chipman has started his blog with the first post going up today.

I am excited to provide this interactive Blog designed to foster thoughtful dialogue and information sharing between you and me. My Blog enables me to share with each of you my personal thoughts about our business and other important matters. I hope you find this Blog informative as well as useful. Please check back every Wednesday for a new post.


Unfortunately for you non-GTers out there, the blog is not public like Jeremy Newman’s so not just anyone can help him with his grammar (which we’re sure is impeccable) or spelling.

Despite being the blog being for GT eyes only, he’s still excited about spreading the good word through this new medium:

I’m delighted to be writing my first blog. One of the aspects of our modern culture is the ease of informal communication. As I noted in the announcement, I have no pre-planned features or stories, I’m just going to blog the way others do — in the moment.

It’s disappointing that Chip didn’t start the blog a little earlier, say, when he got the news about Sue Sachdeva’s shopping sprees. Catching him in the moment of that particular bit of news would have made for a good post, no? Plus, since he’s so close to Milwaukee, he might have run up their to see some of this loot himself in order to tell us what he thought of Suze’s taste in clothes, jewels, etc.

Our one beef with Steve-o’s first post is that it has too much of a journal feeling to it. Personally, we’d prefer he got on his soapbox about how the Big 4 isn’t all that, or why he thinks Davos is overrated. We realize that he’s new at this so we’ll give him a little time to get it together. In the meantime, be sure to inform us about his words of wisdom going forward.

Let’s Speculate as to Why Certain Accounting Firms Weren’t on the Fortune 100 List

Disappointment.jpgBy now you’ve digested the Fortune list to the point of nausea, so we’ll dispense with rehashing the firms that we covered last week.
What we do want to address is the obvious absence of Grant Thornton, BDO, and RSM on this year’s list. Hell, they aren’t on any of the lists going back to 2006. Are these omissions meant to be a thumb in the eye to these storied firms?
Perhaps they blew their lobbying budgets on the BusinessWeek lists? OR maybe — GASP — they just don’t GAF?


We’ll dispel with that for now and assume each of these firms were dying to be on this year’s list. Accordingly, the reason for their exclusion leaves ample room for wild-ass guessing:
Grant Thornton – We realize Steve Chipman just started his new job and he’s trying to get a blog up and going but for crissakes, how does he explain this to you? Will this regime change make a difference? He didn’t mention it on the call so should we assume this disappointment will continue in perpetuity? Could the Koss fiasco be the reason?
RSM McGladrey – This one doesn’t make any sense at all. Does anyone at Fortune know that RSM sponsors this woman? Aaaaannddd, we realize it’s too late for this year but RSM is now helping get Yele Haiti’s house in order. Please note both of these for next year.
BDO – They owe Banco Espirito half a billion dollars and they’ve been planning a 100th birthday extravaganza. Maybe campaigning for the list isn’t at the top of their to do list but still.
If any of you GTBDORSMers have any idea just what the hell is going on (i.e. why this gross oversight has gone on for at least five years), fill us in.

Yele Haiti Names RSM McGladrey as New Accountants

Thumbnail image for alg_singer_wyclef-jean.jpgAre you paying attention Fortune? After last week’s controversy around the finances of Yele Haiti, RSM McGladrey has been appointed to administer the donations pledged to Wyclef Jean’s foundation.

Yele Haiti has also retained Grant Thornton, who filed the three years of tax returns for the foundation just last August.


All the hubbub was over the foundation less than timely filing of its tax returns and paying expenses on the behalf WJ’s production company.
Not filing tax returns is one thing but there is some debate over whether the payment of expenses is actually anything to worked up over:

John Colombo, a University of Illinois law professor specializing in tax-exempt organizations, said tax laws permit such fees.
“If you told me the organization raised $1 million and it all went to him, then I would have some issues,” Colombo said. “Paying him an arm’s length salary for services he actually performed just isn’t a problem.”
But Alvin Brown, a tax lawyer who runs the site IRSTaxAttorney.com, said such transactions were “scary” and “could be viewed as fraud.”

“Viewed as fraud” isn’t the same as “is a fraud” but we after the last week, Yele Haiti has heard worse.
Wyclef’s Haiti Charity Gets New Accountants [AP]
Earlier:
We Knew Accounting Firms Were Helping Haiti

(UPDATE) Fooling Auditors Is So Easy, a Caveman Could Do It

Thumbnail image for sachdeva_sue.jpgIn the spirit of O.J. Simpson, Tracy Coenen explains today, that if Sue Sachdeva stole $31 million and spent most of it on some high-end threads and then sold the crap she didn’t want, it would’ve been a snap.
We’re not talking Enron type stuff here, just making off with cash:

All it takes are three steps to make this fraud nearly undetectable in a company in which the other members of the executive team aren’t paying attention. (And don’t worry, dear readers, that I may be giving away any secrets to committing fraud and covering it up. Any serious fraudster already knows these three things.)
1. Keep the fraud off the balance sheet.
2. Keep all transactions below the scope of testing by the auditors.
3. Don’t commit fraud during the last month of the fiscal year and the first month of the following fiscal year.
Can it really be this simple?


Here’s the quick and dirty:
Point 1 – Tracy notes that 80% of audit procedures focus on the balance sheet so if Suze was slamming all the bogus transactions amongst 4 or 5 income statement expense lines, no one would get wise to it.
Point 2If she did it, Suze probably knew what GT’s scope was (it’s supposed to be super-secret). She could plan the amount of her transactions to fall under this scope every time.
Point 3 – Auditors probably spent most of their time looking at bank statements for the last month of the fiscal year and the first month of the subsequent fiscal year. The rest of them don’t get much attention.
So there you have it. Throw in the incestuous management team, auditors that may be trying to get on each other and you’ve got a slam dunk.
UPDATE 7:38 pm: We got to wondering if Tracy’s statement “Any serious fraudster already knows these three things” were true, so we asked one. Crazy Eddie CFO, Sam Antar indulged us:

[Tracy] is correct. The fraudster always has the initiative because they are judgment oriented in their approach to crime, while auditors are process oriented in their approach to audits. In other words, fraudsters know how to think out of the box to solve problems and achieve their goals, while auditors rely too much on process and procedure to accomplish their missions. In the criminal’s world, judgment is more powerful than process.

We’ll leave it there (that’s right CNN).
Koss Corp.: Commit the fraud and cover it up [Fraud Files Blog]

Quote of the Day | 01.19.10

“Audits are of limited usefulness – the scope of work is so small and is done in such a compressed time, usually at the end of the year. And the work that auditors do is predictable.”
~ Tracy Coenen, of Fraud Files Blog, in regards to the how Sue Sachdeva allegedly pulled off a $31 million embezzlement at Koss under the nose of Grant Thornton (Steve Chipman may need a pair of these to drown out the attorneys). [Milwaukee and Southeastern Wisconsin Business News]

More Grant Thornton Details: Declining Revenues, Raises in 2010, and Stephen Chipman Will Be Blogging

stephen chipman.jpgWe stumbled across the playback of the all-personnel call that went out to Grant Thornton professionals last Friday and we decided to give it a listen. It was about as snoozerific as we expected but we did come away with some additional information to share with you
Stephen Chipman, GT’s new CEO in the States spent about 40 minutes explaining the good the bad and the ugly at G to the T and here are some highlights:

• 81% of those survey and Grant Thornton are proud to work there. High? Low? Completely made up? Does this consider the Sue Sachdeva effect?

• Chip is going to be focusing on various new forms of communication including his own blog. This makes him the second CEO to do so, following Newman over at BDO. We hope, for your sake, that Chip won’t moderate the comments. We insist that you notify us of this as soon as it goes live.


• The new CEO got pretty somber when he described the prospects for GT’s revenue in FY 2010, stating revenues for core services were declining 11% year over year. Global Six…slipping…away.

• Because of this decline, it was decided that layoffs at the senior manager and partner level would occur (many have been notified already) along with those in the “internal client services function”.

• Despite the bad news, Steve-o did his best Bob Moritz, and made it clear: “We will be giving pay raises this summer.” He did qualify that this would be based on 1) the performance of the firm and 2) individual performance.

So that’s the long/short. Like we said, dude went on for 40 minutes and we didn’t have the thing transcribed to give it to you verbatim. If you happened to be one of the unfortunate senior managers, partners or support professionals that aren’t making the “next stage of the journey” get in touch with us about your experience.

For those that remain on team GT, discuss the big guy’s big promise of raises, the blog, revenue issues, etc.

UK Code Requires ‘Independent Non-Executives’ for Big 4

demand.jpgIn a development that will destroy the secret society of Big 4 management in the UK, a “radical” governance code has been implemented that will require the Big 4 to appoint outside “independent non-executives” that will oversee “public interest matters; and/or be members of other relevant governance structures within the firm.”
According to the code, these new independent non-executives will make us all feel way better about what audit firms by “enhanc[ing] shareholder confidence in the public interest aspects of the firm’s decision making, stakeholder dialogue and management of reputational risks including those in the firm’s businesses that are not otherwise effectively addressed by regulation.”
But that’s not all! According to the introduction, “It should also benefit capital markets by enhancing choice and helping to reduce the risk of a firm exiting the market for large audits because it has lost public trust.” In other words, everyone still is freaking out about who the next Andersen will be. Apparently this “should” help your concerns by encouraging companies to consider other audit firms.
What a coinky-dink, Grant Thornton was just asking for help on this last week! Not really sure if this what they had in mind for but hey, beggars can’t be choosers, right?


The Financial Times claims that “Accountants broadly welcomed the move, although some in the firms’ international networks were unhappy about the possibility the UK code might pave the way for ‘creeping regulation’ worldwide.” In other words, people in the U.S. don’t like it one bit.
Plus, the FT didn’t quote any accountants that “welcomed the move”. The exception, of course, is the chair of the group, Norman Murray, who said that the new code was “‘as user-friendly as possible but seen to have some teeth.'” Not sure what that means but it sounds like he’s a believer.
Another member of the board, John Griffith-Jones, co-head of KPMG Europe, was less enthused. All he could manage was that he hoped that the move would put the “‘Enron query to bed.'”
Something tells us your hopes will be dashed, JGJ. Enron is the story that never ends. Especially in the MSM. Plus it’s on the stage now. Those tunes will be in your nightmares.
Auditors required to adopt UK code [FT]
audit firm governance code.pdf

Layoff Watch ’10: Grant Thornton January Edition

We’ve confirmed that an all-personnel call went out at Grant Thornton today warning everyone at the firm about upcoming layoffs.
One of our sources told us that the audit practice leader stated that it would primarily be cuts at the senior manager and partner level and that they are to take place “immediately”. Our source indicated that non-client serving personnel would also be affected.
Another source told us that there would be restructuring at the partner level which could be coming down from the new senior leadership team that the firm announced yesterday.
We are still trying to obtain details about the timing and number of professionals that may be affected. A Grant Thornton spokesperson has yet to return our email seeking comment. If you’ve got more details to share about the call discuss below or if you prefer to send us the details, get in touch.
Earlier coverage of Grant Thornton Layoffs:
Layoff Watch ’09: Grant Thornton December Edition
Layoff Watch ’09: Grant Thornton Update
Layoff Watch ’09: Grant Thornton

Grant Thornton Wants Help Breaking Into the Global 6

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGBoy, a firm gets fired a couple times and you’d think the sky was falling.
GT isn’t literally saying, “Help us, for the love of God, the Big 4 is just too powerful” but it’s close enough for us:

Mid-tier accounting firm Grant Thornton has described the current audit market as unsustainable and is calling for new rules to promote greater competition.
In a letter to the International Organization of Securities Commissions, the firm put together a four point plan aimed at increasing diversity in the concentrated audit industry.


The firm want regulators to require companies to disclose third party agreements that limit auditor choice, discourage companies and financial intermediaries from entering agreements containing restrictive clauses, and publish balanced findings of their inspections of individual audit firms.
The firm claims that in the event of a Big Four collapse, 20% of the 7200 largest businesses in the G20 would be left stranded without an auditor.

Hell, maybe they have a point? If their claims are legit, we are talking over 1,000 companies that just up and don’t have an auditor any more. And the firm can’t instantly quintuple its global revenue.
We asked a frequent commenter on the subject of Big 4 failure, Jim Peterson of Re:Balance, for his thoughts and he told us:

[W]hen the next of the Big Four goes down — which will be in a highly visible and ugly burst of flame and wreckage — the other 3 will quickly enough leave the assurance business themselves. What incentive would they have to stay? They would not have the resources or the political agility to take up the slack, and there would be no upside for them in the face of relentless attacks from the blame-mongers.
So it’s not 20% — it’s 100% — and then the re-building process starts with a blank page.

That sounds kinda serious. Maybe governments do need to get involved. Seems like the going trend these days anyway.
Global audit industry is unsustainable: GT [Accountancy Age]

Report: Accountants Responsible for Two-thirds of Embezzlements

Sue_Sachdeva.pngOkay auditors. No more excuses. You should already be giving everyone the stink-eye the second you walk in the door but now we’ve got a REPORT about embezzlement in the US of A that gives you all kinds of hints on who you should suspect — provable or not — of being the next Sue Sachdeva.
The Marquet Report on Embezzlement is an annual report put out by Marquet International, Ltd., a “an independent investigative, litigation support and security consulting firm” according to the company’s website.


Here are some of the key findings in the report:

• Women are more likely to embezzle than men.
• Men embezzle significantly more than women.
• Perpetrators typically begin their embezzlement schemes in their early 40s.
• By a significant margin, embezzlers are most likely to be individuals who hold
financial positions within organizations.
• The two broad industry categories that have the highest risk for a major
embezzlement are Financial Services and Government Agencies/Municipalities.
• The Financial Services industry suffers the greatest losses from major
embezzlements.
• On average, major embezzlement schemes last about 4½ years.
• California and Florida are consistently the states that experience the greatest
losses from major embezzlements.
• The vast majority of major embezzlements are caused by sole perpetrators
• Gambling is a clear motivating factor in driving some major embezzlements.
• Fewer than 10 percent of embezzlers have a criminal record – less than expected, but enough to suggest that pre-employment screening has merit.

Some takeaways: 1) Immediately suspect anyone that gambles. Even if it’s bingo games in the church basement; 2) If you’re in California or Florida you’ve got your work cut out for you; 3) By “a significant margin” they mean accounting/finance personnel were responsible in 67% of the cases. Executives were second, in 13% of the cases.
Annnnd since we know you’re wondering: the largest embezzlement case in 2009 was none other than our Suz. Based on the criteria above, it appears that she should have been under suspicion from day one but you can’t fault Grant Thornton too much. This is only the second report that Marquet has issued so chances are she still would have made off with $20 million. Oh well, you’ll get ’em next time!
The top ten from 2009:
Picture 2.png
Report On Major Embezzlements 2009.pdf

Koss VP Got Busted Just When She Was Getting Really Good at Stealing Money

Sue Sachdeva had this stealing money thing down so cold that she continually outdid herself, stealing greater sums of money every year until she was caught last month (thanks AMEX!).

If you need more evidence that everyone near this company (we’re looking straight at you Koss Family and Grant Thornton) was completely clueless, this should satisfy you.

Here’s the run down for the last six fiscal years ending June 30:

2005 – $2,195,477

2006 – $2,227,669

2007 – $3,160,310

2008 – $5,040,968

2009 – $8,485,937

Q1 and Q2 of 2010 – $10,243,310

Jesus, she was really getting good those last six months. Girl couldn’t spend it fast enough.

We’d really like to hear from GTers from the Milwaukee/Chicago offices to let us know how TPTB are handling everything. Maybe it’s NBD to them but we just want to know. We thought this story would stop getting ridiculous but so far it continues to impress.

Koss: Unauthorized transactions increased over years [The Business Journal of Milwaukee]

Was Koss Fraud Made Possible by Incestuous Management?

Thumbnail image for sachdeva_sue.jpgMaybe! If you figure an incestuous management team is a clueless management team, the argument can certainly be made. How else could Sue Sachdeva hold garage sales at her desk without anyone noticing? This went on for five years:

How is it that nobody noticed $5 million missing each year when the company’s net income is about $5 million? I mean, the business of “stereo headsets” isn’t really a complex business model. There’s revenue, cost of sales, and expenses. How do you somehow manage to hide $5 million when expenses are only $10 million … and cost of sales is $25 million?
The answer becomes clear when you look at the company’s management team. Michael Koss is the company’s CEO. He’s also the company’s vice chairman, president, COO, and CFO. The company’s VP of sales is, that’s right, John Koss. Together they own 65 percent of the company’s stock. Another Koss, John Jr., owns 8 percent of the company’s stock. Who knows how many other Kosses there are scattered about the place. No checks and balances there. No hands on the wheel, either.

Sooo, the question becomes: Should Grant Thornton have noticed this sleepy management oversight? Did Michael Koss just give them the “I involved in every aspect of the business so there’s nothing to worry about” story and GT just bought it? Discuss.
The Problem with Incestuous Management [The Corner Office/Steve Tobak]

Grant Thornton Loses Its Fire in Letter to the SEC

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGDespite getting all bent out of shape in their earlier statement:

“The fraud was apparently conducted by a longtime, trusted senior financial executive who was hired and supervised by senior management,” a Grant Thornton spokeswoman said Tuesday. “The company (Koss) did not engage Grant Thornton LLP to conduct an audit or evaluation of internal controls over financial reporting. Establishing and maintaining effective internal control is management’s and the board’s responsibility.”

Grant Thornton is less enthused in their letter to the SEC:

We have read Item 4.01 of Form 8-K of Koss Corporation dated January 4, 2010, and agree with the statements concerning our Firm contained therein. We have no basis to agree or disagree with the statements and conclusions in Item 4.02(a), some of which were not disclosed to Grant Thornton LLP prior to receipt of this filing.

The only thing we read here that might be a dig at Koss is “some of which were not disclosed to Grant Thornton LLP prior to receipt of this filing.” If this is intended to be the firm’s version of the finger — straight up, at you Koss — the passive-aggressiveness is at a level that even impresses us.
At least in the Overstock letter the firm flat out called Pat Byrne and his company liars. This latest opportunity to lay the smackdown on a client in a regulatory filing seems to have been squandered.

This Is How You Spend Stolen Money

So you’ve been embezzling money from your employer for awhile and what’s a girl to do? Well you could spend it on your wedding but if you’re already hitched then it’s has to get blown elsewhere. Besides, the £470,000 that Joanne Kent stole is chump change compared to what Sue Sachdeva had on her hands:

• $225,000 at Karat 22 Jewelers.

• $1.4 million at Valentina Boutique a high-end joint in Mequon, WI.


• $20 million on artwork.

• $649,000 at Zita Bridal Salon, even though she was already married. Probably just wants to wear a gown to slob around in.

• $670,000 at Au Corant a Milwaukee-based fashion retailer.

• $4.5 million on credit card bills.

A decent haul although the new GT leadership can’t be thrilled to have this shopping spree land in their laps.

Btw, congrats to Baker Tilly Virchow Krause, the new auditors, on the pickup. We’re sure it’ll be a breeze from here on out.

Grant Thornton Gets Fired (Again)

Grant Thornton is having a helluva time keeping audit clients happy. After getting axed by Overstock.com in November, GT has now been fired by headphone maker Koss after it was discovered — by AMEX — that the company’s former VP of Finance had been embezzling millions of dollars since 2005.

In an 8-K filed yesterday, the Company stated that its financial statements from the past three years should not be relied on:

The Company has now concluded that its previously issued financial statements on Forms 10-K for the fiscal years ended June 30, 2005 through 2009 and on Form 10-Q for the three months ended September 30, 2009 should no longer be relied upon due to the unauthorized financial transactions.

A couple of commenters were debating this particular SNAFU over the Holiday break and while GT may not be responsible for discovering embezzlement, this is a perfect example of why small companies should not be exempt from Sarbanes-Oxley. As Guest 2 notes:

it looks like Koss will become the poster child for internal controls. The company clearly had to have deficient internal controls if the VP of Finance could use millions of dollars in company funds to pay her personal credit cards. We’re talking over $400,000 a month on average (if the $20 million figure is accurate) and that amount is clearly material to the company (i.e. that amount should not have gone unnoticed). My guess is that this will force all other small public companies to become full-pledged into 404 like the majority of public companies are.

We’d love to agree with Guest 2 but the simple fact of the matter is that Congress doesn’t give a rat’s ass about small companies complying with SOx. Most of the members have never even heard of Koss, especially since the company has a budget of around $0 for campaign contributions. Right now the only thing keeping the small company exemption at bay is the inability of Congress to move on financial regulatory reform, which is kinda sorta needed.

Headphone maker Koss fires auditor after firing VP [Reuters]

Layoff Watch ’09: Grant Thornton December Edition

We come with news this afternoon about more layoffs at G to the T that are rumored to have gone down earlier this month.
This latest information we have involves two managers and two senior managers in the Los Angeles office were shown the door around the first of the month. Our source has indicated that the breakdown was three in the audit practice and one in tax. These latest cuts would be in addition to the original ten that we reported on last month for LA.
If you have more information on these layoffs or have details on a different GT office, get in touch with us or discuss in the comments.
Earlier: Layoff Watch ’09: Grant Thornton

Patrick Byrne: Noooo, Grant Thornton, You’re Lying

Thumbnail image for patsy_byrne.jpgOkay you guys, this Overstock.com/Grant Thornton cat fight is getting real mature.
Your humble servant Patrick Byrne has responded to Grant Thornton’s letter stating, in no uncertain terms that he is a L – I – A – R by saying, “I know you are but whatami? I know you are but whatami? I know you are but whatami?”
In the latest OSTK press release, Patsy lists nine points of contention that he has with Grant Thornton’s letter to the SEC which started all this “You’re a liar!” business. We’ve presented some of our favorite moments after the jump for your enjoyment (all emphasis is ours):

4. Grant Thornton Letter: “Further, paragraph 4 references a report on the Company’s consolidated financial statements for the year ending December 31, 2009. As we have not performed an audit of the Company’s financial statements for any period, this reference is incorrect.”
We know that Grant Thornton never performed an audit of our 2009 financial statements and, again, we never said otherwise: as it is currently November, 2009, our 2009 financial statements do not exist. The SEC requirement is that we disclose what Grant Thornton would have disagreed with had it performed what our audit committee engaged them to do – an audit of our 2009 financial statements. We complied with the SEC requirement. I’m not sure what Grant Thornton expected us to say in prefacing the explanation of our disagreements with Grant Thornton.

6. Grant Thornton Letter: “We disagree with the Company’s statement in paragraph 7 ‘that upon further consultation and review within the firm, Grant Thornton revised its earlier position’ regarding the previously filed 2009 interim financial statements. This statement is not accurate. The Company brought the overpayment to a fulfillment partner to Grant Thornton’s attention in October. After additional discussions with the Company, the predecessor auditor and receipt of additional documentation from the Company we determined that the Company’s position as to the accounting treatment for the overpayment to a fulfillment partner was in error.”
This is a falsehood. On several occasions Grant Thornton discussed with and provided guidance on the accounting for the $785,000 fulfillment partner overpayment during and prior to October…
7. Grant Thornton Letter: “Further the Company’s statement does not address the fact that the consultation noted in paragraph 5 was in relation to the ongoing incomplete review of the September 30, 2009 interim financial statements.”
This is a curious statement given that on October 30 Grant Thornton sent a final report dated November 5 (for a November 6 audit committee meeting) to our audit committee stating that “[w]e have concluded our review of the most recent interim quarter. Our review procedures identified certain immaterial differences,” all of which “are currently being addressed by management or will naturally be corrected by year-end.” These immaterial differences amounted to a net $35,000 for the first nine months of 2009.
8. Grant Thornton Letter: “We have also read Item 4.02 of Form 8-K of Overstock.com, Inc. (‘the Company’) dated November 16, 2009 and disagree with the statements concerning our Firm contained therein. During the course of our incomplete review of the Company’s September 30, 2009 financial statements, we advised the Company that disclosure should be made to prevent future reliance on its March 31, 2009 and June 30, 2009 financial statements. We advised the company [sic] to make the disclosure because we became aware that material modifications should be made to the previously filed 2009 interim financial statements to conform with US GAAP.”
This is incorrect. As noted above, on October 30, Grant Thornton sent a report to our audit committee stating that “[w]e have concluded our review of the most recent interim quarter,” and nowhere in its October 30 report is there any advice from Grant Thornton that we should make disclosure to prevent future reliance on our Q1 or Q2 2009 financial statements. Such an omission from such a report seems conclusive of the fact that this was not an issue until our audit committee dismissed Grant Thornton. In addition, on November 13 – after our audit committee dismissed Grant Thornton – our Senior Vice President, Finance specifically asked Mr. Haycock (the managing partner of the Grant Thornton Salt Lake office) whether Grant Thornton had communicated to our audit committee that we should take actions or make disclosures concerning our Q1 and Q2 2009 financial statements, and we noted that any such communications would trigger a Form 8-K filing requirement for us. Mr. Haycock answered that Grant Thornton had not made any such communications. Grant Thornton only gave us such advice later on November 13 in a letter to the chairwoman of our audit committee.

Byrne wraps it up this way, naturally:

As I said in my November 16 letter, our finance and legal teams continue to work with the SEC on the issues addressed in its comment letters, and once these issues are resolved (and we have engaged another independent audit firm), we will file a reviewed Q3 Form 10-Q/A.
Your humble servant,
Patrick M. Byrne

Oh yeah, did we mention they’re still looking for an auditor? Shockingly, there are still no takers.
The final numbers from our poll show that KPMG is the winner of auditor most likely to be fired next by Overstock.com. We’re still waiting to hear who’s actually entertaining the idea of sabotaging their own firm with this little treat of a company. Stay tuned.
GC Coverage of Overstock.com/Grant Thornton:
Grant Thornton: Patrick Byrne’s Pants Are on Fire
Overstock.com Receives Delisting Notice, Really, Really, Really Needs an Auditor
Overstock.com Fires Grant Thornton, Files Unreviewed 10-Q, CEO Remains Humble
Also see: Overstock: Actually, Grant Thornton Is Lying [Silicon Alley Insider]

Layoff Watch ’09: Grant Thornton Update

We’ve finally got a few details to share with you on last week’s layoffs at Grant Thornton.
According to a tip we received, ten professionals in Southern California were laid off, nine in the audit practice and one in the advisory practice. If you’ve got more details on these cuts on GT, get in touch with us and discuss in the comments.

Grant Thornton Named in New Writ, Partner Still MIA

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGToday in non-Patrick Byrne Grant Thornton news, the Hong Kong and International firms are now named in a new writ related to the scandal involving nowhere-to-be-found-former-partner Gabriel Azedo.

We imagine GT is less than thrilled with this latest development since they probably felt pretty good about firing Gabe’s ass the moment they found out he was a liability. The new writ states that the firms are ‘vicariously liable’ for $10.3 million.

There’s no indication that Eddie Nusbaum & Co. have put out an APB on Gabe in order to track him down and get all Jack Bauer on his ass. If it were us, we’d have every SD scouring the Earth* for this guy.

Until that happens, Grant Thornton is in deny ’til you die mode, saying that it will be ‘defended vigorously’ and that they expect to be ‘fully exonerated.’ God, will someone come up with a new press release for these scandals?

Grant Thornton linked to fraud claims [FT]

*You’re a Global Six Firm after all

Grant Thornton: Patrick Byrne’s Pants Are on Fire

patsy_byrne.jpgWant more twists out of the asylum known as Overstock.com? You got it.
Overstock.com filed an amended 8-K yesterday — after the markets closed — that included a letter from GT to the SEC. The letter, in so many words, says that OSTK lied about GT’s knowledge about the hocus-pocus accounting irdinary, every day case of client and auditor going their separate ways, the auditors letter would basically say, “Yeah, we’re cool and we’re moving on.”
But in this case, since we’re dealing with Patrick “I’ll open this letter with Nietzsche” Byrne, we’ve got an auditor saying, “Um, yes, this is what happened. In CRAZY TOWN.”


To wit (our emphasis):

We disagree with the Company’s statement in paragraph 7 “that upon further consultation and review within the firm, Grant Thornton revised its earlier position” regarding the previously filed 2009 interim financial statements. This statement is not accurate. The Company brought the overpayment to a fulfillment partner to Grant Thornton’s attention in October. After additional discussions with the Company, the predecessor auditor and receipt of additional documentation from the Company we determined that the Company’s position as to the accounting treatment for the overpayment to a fulfillment partner was in error. Further the Company’s statement does not address the fact that the consultation noted in paragraph 5 was in relation to the ongoing incomplete review of the September 30, 2009 interim financial statements.

Hang in there, GT isn’t done:

We have also read Item 4.02 of Form 8-K of Overstock.com, Inc. (“the Company”) dated November 16, 2009 and disagree with the statements concerning our Firm contained therein. During the course of our incomplete review of the Company’s September 30, 2009 financial statements, we advised the Company that disclosure should be made to prevent future reliance on its March 31, 2009 and June 30, 2009 financial statements. We advised the company to make the disclosure because we became aware that material modifications should be made to the previously filed 2009 interim financial statements to conform with US GAAP. Such modifications are necessary due to the Company having reduced its cost of goods sold in the first quarter of 2009 by receipt of a refund of an overpayment to a fulfillment partner.

There you have it. Grant Thornton, in extremely diplomatic manner, is calling Patrick Byrne and Overstock.com liars.
Now after considering both the humble servant’s story and GT’s letter, our instinct tells us to go with GT. Obviously we’re partial to the servants of the capital markets but the other mitigating factor is, let’s see, Patrick Byrne is off his rocker.
Undiagnosed mental conditions aside, we wish we could give GT more credit for calling BS on a slimy client. Fact of the matter is, they were warned by Sam Antar back in March — when they took OSTK on as a client — that they were in for trouble:

I wish that I can wish you luck with your new client. However, I cannot wish you luck because you apparently ignored the basic “smell test” in evaluating Overstock.com as a potential client.

Apparently Grant Thornton, like your predecessor, PricewaterhouseCoopers, did not carefully examine false claims about Overstock.com’s financial performance, dating back almost ten years by CEO Patrick Byrne. You would have discovered that Byrne has no problem habitually lying to the investors, the news media and the public.

So as you can see, this is all very awk. In GT’s case, they were explicitly warned to stay the hell away from OSTK. And any auditor worth their salt would take one look at this company and get a feeling like their body was covered in centipedes.
As for Patsy and OSTK, well, as Gary Weiss notes, “Overstock will be tossed onto the pink sheet ant hill where it really, seriously folks, really belongs.” Indeed.
We asked for a show of hands yesterday on who you thought would roll the dice with Pat and Co. and so far KPMG has the lead which seems a tad ludicrous. But hey! We’re not one to argue with the voice of the people.
Voting remains open until the end of today, so check out the latest tally and throw support behind the next firm to get tangled in the Patrick Byrne web. We’ll continue to update you on this horror show as it develops.
Open Letter to the Securities and Exchange Commission Part 3: Overstock.com Lied About Grant Thornton and Concealed Error [White Collar Fraud/Sam Antar]
Grant Thornton to SEC: Overstock.com Lied [Gary Weiss]
Also see: The Auditor Disagrees With Overstock.com [Floyd Norris/NYT]
Overstock’s Fired Accounting Firm Says Overstock Is Lying [Silicon Alley Insider]

Deloitte, Grant Thornton Settle with Parmalat Investors

check.jpgU.S. Investors in Paramalat — the disturbingly long-life milk producer — have settled their lawsuit with Deloitte and Grant Thornton for $8.5 million and $6.5 million respectively.

Personally, if you make the decision to be associated with a company that consciously screws with the natural dairy production of a bovine, we’d say you’re on your own. However, this is America, where if you lose an asston of money on an investment (despite the morally ambiguous nature of said investment, not to mention the shiesty management), you sue.

The case was brought by several funds on behalf of thousands of investors who said they lost money from Parmalat’s multi-billion-dollar fraud.

“It is very rare that worldwide coordinating audit networks enter into settlements like what we have,” said James Sabella, a lawyer at Grant & Eisenhofer PA in New York representing the investors, in an interview.

Lead plaintiffs include Hermes Focus Asset Management Europe Ltd, Cattolica Partecipazioni SpA, Capital & Finance Asset Management, Societe Moderne des Terrassements Parisiens and Solotrat, court documents show.

We don’t know about the statement that settlements are “very rare”. The Big 4 has paid out nearly $6 billion in settlements since 1999 and settlements this year have included Deloitte/American Homes and E&Y/Akai.

Regardless, the good news for the investors is at least they got something. The bad news is that it was far less than the amount they claimed to have lost:

The U.S. equity investors believed they suffered $138.2 million of damages, but Sabella said their claims might have been reduced by earlier settlements. He also said taking their case to a jury could have been “full of difficulties.”

A Deloitte spokesperson declined to comment pending the approval of the settlement by Judge Lewis Kaplan. Grant Thornton did not immediately return our email requesting comment.

This latest development in the story that never ends Parmalat case is the first that we’ve reported that doesn’t involve the persistence of the company trying and failing and trying again to chase down banks and auditors for money related to the company’s bankruptcy in 2003. From the looks of it, we’ll be following these developments long into the next decade.

Ex-Parmalat auditors settle US investor lawsuit [Reuters]

The Grant Thornton ‘Global Six’ Campaign Has Hit a Snag

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGGrant Thornton’s global revenue results have yet to come out, however the Times Online is reporting lower UK revenues for the past fiscal year. This widens the gap between GT and Big 4 and possibly jeopardizes any hope of the ‘Global Six’ moniker making it into the mainstream.


This despite their ambitious efforts:

Two years ago, Grant Thornton unveiled ambitious plans to increase revenue to £500 million. It had just acquired RSM Robson Rhodes and appeared set for rapid growth. There was talk that it could close the distance on Ernst & Young and break the Big Four’s lock on blue-chip audit and advisory work.

This, as the Times notes, appears to be only a pipe dream now. They dish a little gossip about GT merging with E&Y which was de-nied pretty adamantly by the UK CEO, ‘That’s absolutely not true and I’ve no idea where it comes from.’
We really wish we could take credit for starting that rumor but alas, we can’t. Furthermore, it wouldn’t be the same if GT had to merge with someone. It is, however, worth speculating if any type of semi-mega merger would even be possible. We touched on this topic some time ago but that was for sport so we’re asking for serious speculation now.
If you’ve heard merger talk at any of your firms discuss — or just wonder aloud about which firms would/could/should get together — in the comments and feel free to opine on GT’s latest efforts in the Global Six campaign.
Grant Thornton slips further behind the Big Four [Times Online]

Overstock.com Fires Grant Thornton, Files Unreviewed 10-Q, CEO Remains Humble

patrick_byrne.jpgThere’s really nothing better than an eccentric CEO throwing caution to the wind, consequences be damned.
Insert Patrick Byrne, CEO of Overstock.com (“OSTK”). He issued a letter via press release yesterday that has many people’s attention.
Byrne opens the letter by quoting Nietzsche:
“All things are subject to interpretation; whichever interpretation prevails at a given time is a function of power and not truth.”


Tragic enough but then Byrne really amps it up, droning on for eleven points about his company’s dire situation. Here’s the gist*:
• The difficult accounting treatment of an overpayment received by OSTK from a “partner”.
• Putting the audit out to bid after “eight years of fine service” from P. Dubs, and hiring GT because “my belief that changing auditors every decade or so might be healthy.”
• SEC inquiries into the accounting treatment of the overpayment.
• GT changing their minds on the accounting treament after said inquiries.
• We’re filing an unreviewed 10-Q, P. Dubs is on board for our treatment, GT is fired, anyone (and I mean anyone) want to audit us?
Byrne spends no less than six paragraphs/points explaining GT’s wishy-washy, bending-over-for-the-SEC ways. The man is nothing if not thorough.
Spineless auditors notwithstanding, Byrne will press on, the company will overcome, and he will remain committed to you, Overstock.com shareholder:

I will hold a conference call to further explain and answer questions regarding this matter on Wednesday afternoon at 5:00 p.m. EST (details below). Until then, I remain,
Your humble servant,
Patrick M. Byrne

10-Q [SEC.gov]
8-K: Dismissal of Grant Thornton [SEC.gov]
Press Release [SEC.gov]
*If you want to debate the particulars, be my guest but this isn’t the Journal of Accountancy, feel me?

Layoff Watch ’09: Grant Thornton

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGThere’s a lot of chatter about layoffs at Grant Thornton this week but we’re scant on details. So far, we’ve heard there were cuts in New York, Dallas and possibly the Southeast region.
And just for the hell of it, we called up GT to see if they could tell us anything. Unfortunately we just got voicemail but we’ll update you if they get back to us (they might, don’t be so pessimistic).
If you have more details, get in touch and ask around to your peoples that work in the House of Nusbaum to find out what’s going down.

Facing Writs, Ex-Grant Thornton Partner Bolts Hong Kong

A former Grant Thornton partner in Hong Kong is facing two writs from clients that total $12.1 million, according to the Financial Times.

Gabriel Azedo was reported by Grant Thornton Hong Kong*, after the allegations were made, to the HK commercial crime bureau for ‘inappropriate’ conduct.


Of course, when we hear “inappropriate conduct” we automatically imagine something lewd but alas, it’s about money:

Angela Gardner, a Hong Kong resident, is suing Mr Azedo and Senning International, registered in the British Virgin Islands, for breach of contract and breach of trust and demanding $9.8m. Grant Thornton is not mentioned in this suit.

Arthur and Betty da Silva, prominent local racehorse owners, have filed a writ against Mr Azedo and Grant Thornton Hong Kong seeking an account of trust assets allegedly held on their behalf by the defendants.

Mr and Mrs da Silva are demanding the transfer of “all such trust property” to them or restitution of not less than $2.3m.

On October 20, GTI realized that this guy was a liability, reported him to HK Fuzz and promptly terminated their relationship with him. Gabe, “a pillar of the city’s financial establishment”, was on GT’s global leadership board as recently as October 21, although he had not technically been a partner in the firm since 2008.

Oh so mysterious, Mr. Azedo. What were you doing over there in HK? The FT, being the bastions of journalism that they are, tried reaching him for comment but sounds like he’s is on the lam.

Although it doesn’t seem to be much more than a headache for GT — for now — we’re happy to see something out of the firm aside from another visit from the press release elves.

Ex-Grant Thornton partner faces writs [FT]

*Everybody knows that the offices are independent of each other right? The global firm is just something they say. Sort of like “Global Six Accounting Firm”. Which, for the record, was not mentioned once in this article.

Grant Thornton Names a New COO*

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGGrant Thornton named Lou Grabowsky as its new Chief Operating Officer today. Grabs starts his new gig the same day as Stephen Chipman and Ed Nusbaum start in theirs so we’re guessing that will be quite the rager to kick off the decade.
LG takes over the day-to-day responsibilities at GT which no doubt includes overseeing the press release elves:

“Lou’s credentials are impeccable, and he will serve the firm with his characteristic commitment to excellence as Chief Operating Officer for Grant Thornton LLP,” says Stephen Chipman, Grant Thornton LLP CEO-elect. “His personal and professional strengths complement my own, and we have already been working on transition issues and other matters of high priority for the U.S. firm.”

Whoa, Steve-o, feeling ignored? We won’t forget that you’ve got strengths buddy. You didn’t get the big chair for nothing.
Back to the real reason for this little post, Grabs is a graduate of The Pennsylvania State University and an Arthur Andersen survivor. He was even the partner in charge of assurance services for the Dallas office from ’91-’97 so he may have known David Duncan. SCANDAL!
Just joshin’ you Lou. Enjoy the new gig.
Lou Grabowsky named Chief Operating Officer of Grant Thornton LLP [Press Release]
*Managed to only mention ‘Global Six Accounting Firm’ once

Grant Thornton’s Determination to Saturate Us with Data on CFOs Knows No Bounds

Thumbnail image for Thumbnail image for GT_elves.jpgOur prediction that Grant Thornton’s string of press releases related to its survey of CFOs was coming to an end was wrong. Dead wrong.
The firm issued two more today, one related to the financial services companies and one for health care organizations.
While we appreciate all the good work that GT is doing to pull all this information together, we’re definitely to the point we’d like to see something else out of GT. Some people are inspired. We’ll even take the freaky milk company.

Grant Thornton’s Survey Elves Are Still at Work

Thumbnail image for GT_elves.jpgOur only point is that if it wasn’t for the nice little explanation of the survey on the website, we would have assumed they had a huge room filled with survey elves working day and night.
Anyway, today GT issued its latest press release of its “national survey of U.S. CFOs and senior comptrollers”.


This installment shows that CFOs are homers when it comes to who sets their accounting rules (just so long as it isn’t the government). Seventy-one percent of those surveyed said that rules should be set by “A national independent board supervised by a national regulator” while only 24 percent want an international board. This despite the belief of some that Bob Herz is the most dangerous man in the country.
Only 3% thought a “national legislature” should set rules, which is a relief. Plus it probably gives Barney Frank a little vindication but definitely upsets Newt Gingrich.
The survey also states that the respondents are split on how to report debt on their balances sheets, either amortized cost or fair value, which may be why the FASB and IASB are talking contingency plan.
The last bit of interesting information is that CFOs are still scared shitless of eXtensible Business Reporting Language (“XBRL”) because 84% of those surveyed have no plans to start using it. If you assume most of the CFOs were in Big 4 at one time, then this isn’t so surprising.
The elves are off until spring next CFO survey will occur in the spring when another spectacular round of press releases will inform all of us what is on the minds of financial bigwigs.
Earlier: Grant Thornton Survey: Financial Statements Are Still Too Complex for the Average Shmo Investor
Also earlier: Grant Thornton Survey: 40% of CFOs Never Ever Ever Want IFRS to Replace GAAP

Grant Thornton’s Stephen Chipman Is Excited About the Metra

Last time we checked in with the Grant Thornton bigwigs and their interview with Accounting Today, we noted how Stephen Chipman, the next U.S. CEO, was a bit of snoozer as an interviewee.
This time around is no different but Steve-o did happen to mention how great it was to be back in Chicago and able to take the train to work. A boyish grin spreads across his face as he describes how great the Chicago commuter line is. Somebody had a train set growing up!
Video for part four of the interview is after the jump that includes Ed Nusbaum admitting that he gave up his abacus awhile ago and that GT has managed to not become dinosaurs. If you’ve a different opinion on that, discuss here or over at our technology open thread.

We’d All Appreciate It if Grant Thornton Got Involved in a New Lawsuit

bondi_enrico01g.jpgGrant Thornton just isn’t able to shake Parmalat, the freaky-ass extended-life milk company. Parmalat appealed the latest dismissal of its lawsuit against GT and Bank of America that accuses the two companies of helping set up phony transactions so “insiders could steal from the company.”
Parmalat’s Chief Milk-Magician, Enrico Bondi, is obviously not satisfied with the $100 million that he twisted away from BofA and will continue to hassling both companies until long past the expiration date on his product.
Parmalat appeals BofA, auditor lawsuit dismissals [Reuters]

Grant Thornton Survey: Financial Statements Are Still Too Complex for the Average Shmo Investor

dumb-and-dumber3.jpgThat’s right! Way too complicated. GT’s survey states that 73% of the finance bigwigs surveyed believe financial statements are too complex for the average investor to understand. That’s bad because even more respondents (82%) said that financial statements should “be prepared to meet the needs of the average investor”.
Strangely, this survey’s respondents, “CFOs and senior comptrollers”, are directly responsible for the still-too-confusing financial statements. Unless, of course, everyone that responded to this survey already has easy-to-understand financials and thus, is thinking, “NMFP”.
Also, average investor is not explicitly defined which doesn’t help us put the survey in context. So we’ll put it out there that if “average investor” is anything remotely similar to the “average American”, the solution to this whole problem may be to get Fisher-Price and reality TV producers involved.
Nearly three-quarters of senior financial executives say financial statements too complex for investors [Press Release]

Bonus Watch: Follow-up on Grant Thornton

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGAccording to a tip we received, less than “special” people at GT are receiving bonuses too:

Based upon my salary [the bonus is] about 2%….[I’m] assuming the criteria for a bonus wasn’t as stringent as Nusbaum made it out to be, or the pool was larger than we were led to believe. Based upon the call with Nus, I figured only 5.0 would get a bonus.

A pleasant surprise for some. This particular tip came out of the Southeast region. Apparently these conversations are occurring circa now so continue to keep us updated for your city or region.

Ed Nusbaum Doesn’t Have to Sneak Out the Back Door Anymore

Not only that, he used to FEEL GUILTY about leaving early to coach his daughters’ softball games. Oh Eddie, we realize that guilt is a bitch. Personally, whenever we felt guilty about leaving the office early, we’d slap the shit out of ourselves to the point of submission. That made us realize that feeling guilty is for sissies. Glad to hear you beat the guilt too.
Some other highlights from part two of SEVEN part interview*:
• Ed says, “all the firms are great” and his head doesn’t explode. Amazing.
• He also says work/life balance is not just words on a piece of paper.
• GT is very proud of “the Grid”, their version of Facebook. Which will fail miserably now that they’ve lifted the veil on your status updates.
• Ed loves his iPod. Just like you!
• Stephen Chipman put us to sleep in about half a nanosecond.

Discuss, criticize, debunk, or air high-five the GT honchos in the comments.
*Yes, its over a week old and yes, we skipped part one but it was really boring, so piss off.

Grant Thornton’s Latest Survey Reminds Everyone That Your Chances of Getting Another Job Are Still Pretty Slim

Thumbnail image for Grant-thornton-logo.JPGGrant Thornton’s national survey of financial executives shows that only 1 in 4 plan to increase hiring in the next six months. That’s not great news but what’s perplexing is that the meaningless highly regarded Grant Thornton LLP Business Optimism Index basically told us the same thing less than a month ago.
Does GT really have to repeat the obvious message that no one wants to hear? We get it. No one can leave their job that they hate for another job that they’ll hate less right now because no one is feeling spendy on new employees.
Oh but GT isn’t purely a purveyor of bad news. Only 10% of the financial bigshots surveyed expect things to get worse. Which is a relief but not particularly interesting since the Business Optimism Index pretty much said the same thing.
It appears that GT is hellbent on reminding everyone that while things certainly can’t get any worse, they’ll probably remain craptacular for the foreseeable future. Keep up the solid work GT, we’re looking forward to next month’s reminder.
National survey of senior financial executives finds only 1 in 4 plan to increase hiring in next 6 months [Press Release]

Grant Thornton Will Now Let You Tell Everyone How Great the Weather Is

We’re happy to report that the generosity at Grant Thornton continues. We found out earlier in the week that those of you that did something special, which may or may not involve an outift that wasn’t of your choosing, would be included in GT’s small bonus pool.
According to a tip we received, The Baumer and Co. has now decided that those of you that remain will be rewarded with the ability to make banal status updates at work:

During the experienceAugust all-personnel call, Ed Nusbaum announced the firm’s plans to open access to several external Web sites from Grant Thornton’s network. These sites include social networking and personal email sites such as Facebook, Yahoo! Mail, Gmail, and MSN Hotmail.
I am pleased to announce that access to these sites is now open.

This unexpected show of appreciation is almost overwhelming. As a tribute, leave cliché responses to this latest development in the comments. In this particular case, the more cliché, the better.

Grant Thornton Continues on Some Sort of John Gotti Teflon-esque Run

john20gotti.jpgThe Wall St. Journal reports that a judge has tossed a case brought by freaky-ass, longlife milk company Parmalat against Grant Thornton and Bank of America.
Parmalat filed for bankruptcy back when everyone thought invading Iraq was a good idea so this thing has been dragging.
This is another major lawsuit that G to the T has managed to avoid, along with the dismissal of the Refco suit last month.
GT seems to be quite the bullet dodger and can probably breathe easy. For now, anyway.
Judges Tosses Parmalat Lawsuits [WSJ]

Does Grant Thornton’s Business Optimism Index Mean Anything?

gnomes.pngGrant Thornton, a global six accounting organization, puts out a quarterly optimism index that is “a quarterly confidence measure of U.S. business leaders”.
That sounds very nice and the index is now up to 2007 levels, according to a firm press release. The press release also states that “58 percent of respondents believe that the economy will come out of recession by the first half of 2010, but only 26 percent plan to increase hiring.”
Call us cynics but this definitely has the whole underpants theory written all over it. Poll some executives with some vaguely worded questions and we are to believe that recovery will occur by virtue of a secret plan that has yet to be developed? Leave the wild speculation to us GT.

Grant Thornton is Making Their Passion Known Worldwide

grant-thornton-logo-with-rose.jpgBecause, you know, some of you may have forgotten that they were an international firm. Nevermind the complete failure to coin “Global 6 Accounting Organization” as a way to sneak into the prestigous cool biggest firm club. GT is giving interviews with obscure accounting publications to make this happen.
Eddie Nusbaum, who will be the new Global CEO on January 1st, is going after Big 4 clients to continue building their international business, which kinda sorta works, we guess.
What’s most confusing about G to the T’s “strategy” is that no matter what happens, they’ll never compete with the big firms through organic growth.
Even if GT and BDO made sweet accounting firm love their total international revenues would still be dwarfed by what the fourth place Big 4 firm rakes in. Huge, Big 4-apocalyptic events that would involve government intervention are the only way GT is making it to the big time. So maybe the stars are lining up. WTFK…
Grant Thornton Plans International Growth [Web CPA]

Grant Thornton to Tango with E&Y at Dismissal Party

grant-thornton-logo-with-rose.jpgActually we’re not sure but it would be pretty awesome if they did. A judge in New York has dismissed the case against GT, E&Y, and law firm Mayer Brown that was filed by customers of Refco’s currency trading-unit.
More, after the jump


There may still be a problem, according to Bloomberg:

[Judge] Lynch dismissed the case against Refco’s auditor Grant Thornton, outside counsel Mayer Brown and tax adviser Ernst & Young because the trustee who sued failed to allege enough facts in his complaint to show the defendants aided the Refco fraud. He said the trustee may file a new complaint.

So if you’re feeling it you can put on “Por Una Cabeza” but we think that GT and E&Y will probably get cut off mid-dip.
Grant Thornton, Ernst Win Dismissal in RefcoFX Suit [Bloomberg]

Firm Watch: Grant Thornton

grant-thornton-logo-with-rose.jpgNow that we’ve dispensed with the Big 4 on our Firm Watch, we’ll throw in the two major second next non-Big 4 firms to demonstrate our willingness to spread the love hate coverage.
Get acquainted with GTTT, after the jump


Lawsuits – The lawsuits worth mentioning for GT are Parmalat and Refco. While Deloitte was able to get the suit tossed, GT wasn’t so lucky. Investors in the never-go-bad dairy company are allowed to proceed with their lawsuit which will guarantee that this case continues on to the end of time. As far as Refco goes, well, we’ll be damned if we can find anything that is even remotely recent as it relates to GT. Help us out if you can.
Madoff Exposure – G to the T’s UK office is running down assets across the pond. That unenviable task could almost qualify the firm for sainthood.
Overtime Lawsuits – Listed as defendants in two cases.
Layoffs – This is where we need your help, GT-ers. As far as we can tell, not a lot of blood has been spilled at G to the T. If you’ve details on rumors on anything upcoming or layoffs that have gone down recently, let us know.
Miscellaneous – GT’s partners in the UK have interns sign off on audit reports and the Midtown New York office as a diabolical address. Oh, and the lame attempt by their PR team to coin “Global 6 Accounting Organization” as the new tag for accounting firms.
There’s the study on passionate folks at GT. Get us caught up on stuff we’re missing at tips@goingconcern.com. We can’t imagine it’s that boring to work there.

Grant Thornton Spreads Out the Liability, Admits Nineteen New Partners

grant-thornton-logo-with-rose.jpgNineteen individuals have proven their passion for the business of accounting (as well as an intrepid attitude towards liability) as G to the T admitted new partners and directors effective August 1.
The press release is your standard trite lexicon but we can’t help but notice GT taking the opportunity to slip in their favorite moniker, “Global 6 accounting organization” or a derivative of such. GT is bound and determined to get this to catch fire even though no one outside of the GT press team has probably uttered the phrase.
Grant Thornton LLP admits 19 new partners and principals to the firm [Press Release]

Grant Thornton Interns Don’t Get Coffee, Thankyouverymuch

inerncoffee.jpgLast week we asked for some perspective on the chicanery and lovable idiocy of your interns. Today we learn that about a Grant Thornton intern who “verifies that clients’ accounting records are accurate and sits in on important meetings.”
That’s right, interns are verifying accounting records and going to important meetings. Probably the type of meetings where they get to take notes on internal control procedures while the experienced associates can barely keep from strangling themselves with a network cable.
Yet, life remains unfair for the interns, “Interns who talked to RedEye said they are gaining experience to prepare them for the workforce, but increased intern responsibilities typically don’t come with increased pay or perks or even more respect.”
After going to those important meetings, interns still aren’t feeling respected people. No increased pay. No perks. How can this be? Haven’t they done enough? They tried to earn your respect by making the copies that you asked for and getting totally bombed at firm events. They didn’t mean to ask so many questions about the copier. They’re just new, so they want to make sure they don’t screw anything up.
What else can they do? Shine your shoes? Fill your car up with gas? Buy your lunch (they’re probably making more than associates on a per hour basis anyway)? The summer internship season is winding down so make sure you’re letting them know (and us) how they can go that extra mile to get that full-time offer.
Chicago interns move up corporate ladder [Redeye]

Our Speculation About the Motivation Behind Deloitte’s Most Recent Survey

heelys.jpgBig accounting firms like doing surveys. We’ve often thought about the motivation behind the constant surveys and further wonder if firms ever josh the numbers around out of a personal vendetta against its rivals, enemies, former clients, etc.
Deloitte’s survey that states that American consumers are planning on spending less this back-to-school season causes us to speculate as to why the Big D would do such a survey? It’s a nice little press release we suppose. Shows that the firm is plugged into the current state of the economy, etc., etc. But then we got to thinking about how Heelys, the obnoxious shoes with wheels, recently dumped Deloitte because their fees were too high in favor of Grant Thornton.
Far be it from us to speculate about the temperament of a Big 4 accounting firm when it has business swiped away by a second-tier firm but isn’t it possible that Deloitte is bitter about the whole sitch? Isn’t it possible that Deloitte is merely putting out this survey as a way to scare consumers out of spending money on back-to-school junk like Heelys?
Back-to-School Shoppers Plan to Spend Less, Save More [Bloomberg]

Partners at Grant Thornton are Just Getting Lazy

Grant-thornton-logo.JPGGrant Thornton is really making our lives easy today: “Grant Thornton has agreed to pay nearly £6,000 in fines and costs after it failed to correctly sign off 43 audit reports.”
Measly fine, obv but 43 audit reports? And a incorrectly signed off report is one that, “had not been signed off by a responsible individual of the firm”.
So apparently the Brits have got their interns signing off on the audits. Gold star for you today, GT.
ICAEW fines Grant Thornton over audit sign-offs [Accountancy Age]

BBC: Grant Thornton is Scheming for the Rich People

Grant-thornton-logo.JPGOkay, so large accounting firms don’t have the best reputations. They also have the tendency to be thick as thieves when they come under scrutiny. And the green eyeshade look has never been one that screams trustworthy.
But now, in what might be a bit of presumptuous awesomeness, the BBC is coming right out and calling Grant Thornton’s Growth Securities Ownership Plan (GSOP) a scheme. Maybe we’re jumping to conclusions but the subtitle doesn’t strike us as being subtle: “A big accountancy firm has denied that it has been peddling a tax avoidance scheme to help rich people avoid paying the new 50% income tax rate from 2010.
Let’s break some of the key words and phrases down:
Peddling: Use of this word basically implies that narcotics are involved
Tax Avoidance Scheme: Implies a conspiracy of smart people to screw the tax authority on behalf of…
Rich People: Not the best time in history to be lumped into this particular demographic
WTG, G to the T. Not only are you trying to screw the taxing authority in Britain by virtue of the equivalent of slinging financial smack, you’ve got the audacity to do it on the behalf of rich people.
Accountants deny ‘new tax dodge’ [BBC]

Heelys Dumped Deloitte for that Slut, Grant Thornton

heelys.jpgWe told you earlier about wheeled shoes company Heelys dumping Deloitte. It was reported that Heelys left because fees were too high but we speculated that the Big D probably wasn’t down with Heelys request to have the entire audit team don the juvenile wheeled shoes.
Heelys has now announced they will be retaining the younger, sexier, less Big 4-ier, firm Grant Thornton as its independent accounting firm.
We find this very similar to the all-too-common situation where the old wife/husband is left behind for the newer, younger, partner who’s young, racy, and willing to experiment a little.
As you might expect, for accounting firms, letting the engagement teams wear shoes with wheels on them definitely qualifies as racy and risque and other firms only wish they had the balls to do something like that.

Heelys hires new accounting firm
[WFAA.com]

Grant Thornton and the Antichrist

al pacino_devil.jpgIt’s rather mysterious that the New York office of Grant Thornton is located at 666 Third Ave. As I’m sure our more pious readers know, the significance of the 666 is commonly known as “The Number of the Beast“. We won’t get into any more specifics than that other than to mention that it is a pretty creepy-ass looking number.
Is G to the T run by a secret group of Al Pacino-esque figures that are working against the forces of good?
Maybe not but the otherwise boring-assness of that particular lobby is def working too hard to not be noticed…