People who know – know BDO

BDO Slims Down to Four Regions, Names New National Heads of Assurance and Tax

Jay Duke will head up the assurance practice while Doug Sirotta will lead tax. They’ll both report to the most interesting CEO in the world.

The business line regional heads (chart below), who formerly reported to Jack Weisbaum, will now report report to Duke and Sirotta. Speaking of those regions, the Southeast Region (Florida, Georgia) will merge into the Atlantic and the Southwest (Texas and Tennessee) will join the Central. It all goes down on July 1. Messrs. Duke and Sirotta will give up their seats on the BDO Board of Directors to take their new national roles (demotion?).

SOMEWHAT RELATED: Christopher Tower, the head of assurance in the West, was one of the brainchildren behind the “Tattle on a Headhunter, Win a $5 Starbucks Card” idea. [BDO]

RegionAssurance RBLLTax RBLL
NortheastAlan SelittiRobert Pedersen
AtlanticWayne BersonWayne Corini
CentralSteve FerraraPaul Heiselmann
WestChristopher TowerRocky Cummings

BDO Rewarding Employees for Tattling on Headhunters with $5 Starbucks Cards

For whatever reason, we don’t hear a lot of gossip out of BDO. Perhaps it’s because the entire firm is too captivated by the most interesting accounting firm CEO in the world, Jack Weisbaum, and are rendered loyal to a fault, thus choosing not to share the more sordid details of what happens inside B to the D tortunate because we hear rumors that there are slew of partners who are not pleased with how things are going at firm but no one seems to want to talk. I’d encourage someone to speak up by emailing us.

But for now, we’ll take the opportunity to tell you about the efforts put forth by some inside the firm that were sensitive to the post-busy season onslaught of professional recruiters. As we all know, after people have worked their asses off for three to four months, some might feel unappreciated and opt to look for a new job. Recruiters are acutely aware of this and since it’s their job to fill positions for their clients, it only makes sense that they chase people that are looking for a change. And because professional recruiting is a competitive business, sometimes the emails can clog your inbox like offers for ED drugs. Some partners at BDO thought that in order to help people stave off this bumrush, they would invite employees to simply forward the emails and voicemails received and voilà! $5 of Starbucks burning in your pocket. Oh, and did I mention that there’s no limit for how many you submit? So if you’re a hot piece of public accounting talent, getting tons of calls, you can really clean up. Not only that, the person that submitted the most unique names of headhunters and agencies would receive a $250 AMEX gift card. Yes. Sound petty? Sound pathetic? Sound desperate? Read for yourself and decide.


I split up original screenshot sent to me so that it would be easier to read, hence the narrow break.


So you might expect such an attempt to bribe employees with corporate caffeination would fall flat. That tipping off firm leadership about PEOPLE THAT ARE SIMPLY DOING THEIR JOBS (and maybe change a few professional careers for the positive) would fall on deaf ears. Well, you would be wrong. DEAD WRONG. A follow-up on the firm’s internal website (next page) stated that over 200 submissions were made and one SA in Spokane submitted 15 alone.

That’s right, the effort was so successful that they are extending it through July 8th. Not really knowing what the protocols are, I don’t know what to tell the recruiters to expect in terms of retaliation from the TPTB at BDO but at least you’ll know that if you receive some kind of nasty correspondence, the person who gave you up was baited with the siren’s call that is the white and green coffee cup.

BDO Culminates 100th Anniversary with a Two-Hour Disney Production on the History of the Firm

As you probably know, BDO has spent 2010 celebrating the firm’s 100th anniversary in the U.S. Throughout the year there has been various celebrations along with Jack Weisbaum’s successful run as Dos Equis dopplegänger.

The apex of the firm’s centennial is going on as we speak in Orlando, at the firm’s Centennial Partners Meeting where 700 some-odd partners, alums and their better halves are celebrating the big one hundo.


A brief word from the most interesting accounting CEO in the world:

“In 1910, there were a little more than 2000 certified public accountants (CPAs) in the United States, that’s approximately the same amount currently working at BDO. Today, there are hundreds of thousands CPAs, but just a handful of national firms that have been able to grow and prosper across the country and build networks with member firms around the world,” said Jack Weisbaum, CEO of BDO USA. “Our firm bears little physical resemblance to the firm Maximillian L. Seidman started a century ago, and it is sure to change drastically in the coming century. What will stay the same is our unwavering commitment to clients, our capacity to adapt to change and our ability to find opportunity in every challenge.”

In addition to the Weisbaum speech, last night attendees were treated the aforementioned two-hour Disney production about the history of the firm.

Entitled “Proud Past – Bold Future,” the firm’s story is told with an extensive cast and musical arrangements, interspersed with video interviews of BDO partners – from both past and present – as the firm’s progress is tracked over the past century.

A Disney production sounds nice but two hours? Beauty and the Beast was nominated for Best Picture and it only ran for 84 minutes. Not that you can fairly compare the 100 years of getting to know BDO to animated bestiality. There really is no comparison but we’re just hoping – for the sake of the audience – it was screened before the comfort food and booze.

BDO Officially Resides in the First State

By all accounts, BDO as a firm, has had a decent 2010. There were the typical raises and promotions that were met with a giant “meh” by the BDO faithful.

The firm celebrated its 100th birthday last month, with offices marking the occasion in various ways. And probably most importantly, the Florida Appeals Court ordered a new trial in the Banco Espirito Santo case.


The decision in this case allowed the firm to jump off its deathbed reenergized, allowing Jack Weisbaum to continuing to moonlight as a TV commercial star as well as open a Raleigh, North Carolina office.

The good times continue with the addition of McBride Shopa & Co. including a message from Tom Shopa with a pleasant piano accompaniment in the background.

Jack W. was able to sneak away from a busy commercial shoot to share his feelings on the matter:

“The addition of the partners, professionals and staff formerly with McBride Shopa adds the important Delaware market to BDO’s existing presence in the Philadelphia and the greater Washington, DC area. We are excited about the many growth opportunities that this combination will bring to our clients and our future clients,” said Jack Weisbaum, CEO of BDO USA.

The bright side for BDO is that since the Taxman is likely coming to Delaware, there will be plenty of new business opportunities.

How Are BDO Offices Celebrating the Firm’s 100th Birthday?

We’re merely echoing the question.


Apparently there is some go-karting happening in Charlotte which sounds fun, especially if there was a three beer minimum to get on the track.

Other things we’re envisioning:

• Gents of all body types in the Woodbridge, NJ office coming to work as The Situation (i.e. sans shirt).

Miami office employees are wearing their homemade “FUCK BANCO ESPIRITO” t-shirts (that could be any office really).

• At HQ in Chicago, CEO Jack Weisbaum reenacting Dos Equis ads only to substitute “Stay thirsty my friends” with “People who know – Know BDO”

What else is going on? Let us know.

Comp and Bonus Watch ’10: BDO Having a Happy Hump Day?

From the mail bag:

I heard that BDO is communicating compensation adjustments and bonuses this week. Bonuses are to be paid on September 15.

Seems to be in line with our last post on BDO comp and bonuses, so if you’re get good or bad news this week regarding either, share with the group and keep us informed.

Compensation and Bonus Watch ’10: Who Knows BDO?

After coming out the near-death experience thanks to the Florida 3rd District Court of Appeal, you’d figure TPTB at BDO would continue shoveling the good news out while they could. On the comp front, a tipster tells us that while there are rumors that raises are bonuses are coming, no one has a clue as to what they’ll be:

Can you run a discussion on BDO compensation increase and bonuses? Raises would be effective 10/1, and currently there have been no formal communications from senior mgmt regarding this topic. In the local offices, there has been word that there will be raises and bonuses, but no numbers have been thrown around.

In other words, if you’ve got the goods BDO peeps, kindly spill it. It’s about time you started talking. If you’re not comfortable voicing yourself, email us and we’ll handle it.

KV Pharmaceutical Will Get to Know BDO

As we’ve mentioned, it’s been a rough summer – hell a rough year – for KV Pharmaceutical. The company paid nearly $26 million to the Justice Department back in February, had massive layoffs in March and their Chairman and CFO back in June.

Last month, KPMG decided it had had all the drama it could handle and resigned as the auditor of the company.

But as the second half of 2010 gets into full swing, KV managed to find a new CFO and now they’ve managed to land a new auditor – BDO.


BPR:

K-V Pharmaceutical Company (NYSE: KVa/KVb) announced today that the Audit Committee of its Board of Directors has engaged BDO USA, LLP (“BDO”) as the Company’s independent registered accounting firm.

The Company and BDO will commence work immediately on the planning, audit and filing of the fiscal year 2010 Form 10-K and will then follow with the review of its quarterly filings for fiscal year 2011. K-V’s fiscal year end is March 31.

Mr. Mark Dow, Chair of the Board’s Audit Committee, stated, “The Audit Committee and the entire Board is pleased to be able to announce the selection of BDO as the Company’s new accounting firm. BDO has extensive knowledge of the pharmaceutical industry and also a previous relationship with K-V, and the Company believes BDO will be able to assess and complete its audit of the Company’s Fiscal Year 2010 financial statements expeditiously. We look forward to working closely with BDO to bring the Company back into compliance with all of its Securities and Exchange Commission filings as quickly as possible.”

Right! Staying compliant! That sounds a bit maj. Not only that but the New York Stock Exchange (sort of of a big deal in their own right) is sick of KV stinking up their big board with their 30-day average stock price hovering under $1.

The company has assured the NYSE that they’re on this stock price problem, “The Company will furnish to the NYSE on or prior to August 10, 2010 a response affirming its intent to cure this deficiency and outlining the steps it is currently taking and plans to undertake in the near term to restore compliance with the NYSE’s continued listing standards.”

Let’s just say BDO has their work cut out. KV has no internal controls to speak of, is having trouble convincing the FDA their products are safe and the SEC and NYSE breathing down their necks. Now maybe this won’t all translate into the auditors’ magic wand but there’s got to other potential clients in the St. Louis area with far less drama.

K-V Pharmaceutical Company Engages BDO USA, LLP as Independent Registered Accountants [PR Newswire]
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing [SEC]

BDO Does Some Ribbon Cutting, Opens Raleigh, NC Office

More good news out of B to the D to the O as the firm announced today that it is opening an office in Raleigh, North Carolina (full press release after the jump). This will be the 39th office in the U.S. and fourth in North Carolina. The firm also has eight affiliate offices in the state.

In the process, the firm managed to pick up former Ernst & Young audit partner Michael Dannar (a refugee perhaps?).


The good times at BDO have been aplenty lately as the firm just admitted five partners on July 1 and was given a mulligan on the Banco Espirito lawsuit. Oh and don’t forget that the firm fka BDO Seidman is celebrating its 100th birthday all year.

No word if there will be cake or freakishly large scissors at the celebration but nevertheless, it’s good to see some expansion in the Tar Heel state for a change.

BDO USA, LLP EXPANDS NORTH CAROLINA PRESENCE WITH NEW RALEIGH OFFICE

Chicago, IL – BDO USA, LLP, one of the nation’s leading professional service organizations, has announced an expansion of it’s presence in North Carolina with the addition of a new office in Raleigh. The Chicago-based firm, which now has offices in 39 cities around the country, had previously serviced clients in this market through its Charlotte practice. Pending a move to permanent office space at 5430 Wade Park Boulevard in August, the new practice, which will have approximately 15 staff, will be temporarily located at:

BDO
5410 Trinity Road, Suite 310
Raleigh, NC 27607

The Raleigh business community will now have more direct access to BDO’s full array of services which include assurance, tax, risk advisory, financial planning, business restructuring, litigation and fraud investigation services. Michael Dannar, previously with Ernst & Young, has joined the firm as a partner and will assist in serving the firm’s assurance clients in Raleigh and throughout the southeast. Mr. Dannar has significant experience working with colleges, universities and other non-profit organizations.

“We have been working with clients in Raleigh for a number of years now and the time is right for us to establish a permanent presence. This new office will enable us to better serve our clients in this growing market,” said Jack Weisbaum, CEO of BDO USA. “We are also happy to welcome Michael Danner to the partnership. His knowledge of the market will be a valuable resource to our firm.”

BDO SEIDMAN FACTS:

• BDO is celebrating the 100th anniversary of its founding in 1910.
• BDO represents companies ranging from Fortune 500 multinationals to closely-held private businesses.
• BDO had $620 million in revenues in 2009 (6/30/09). Over the past four fiscal years, the firm has averaged double digit growth (10.2%).
• As an independent member of BDO International Limited (the fifth largest global network of accounting firms), the firm can leverage the resources of more than 1,000 member firm offices in 115 countries around the world.

ABOUT BDO USA

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 39 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,138 offices in 115 countries.

BDO USA, LLP,a limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.

BDO Wins New Life as Florida Appeals Court Orders New Trial

In what amounts to a HUGE win for BDO, the Florida 3rd District Court of Appeal in Miami has ordered a new trial in the case between BDO and Banco Espirito Santo:

A Florida appeals court has thrown out a $521 million jury verdict and ordered a new trial in a dispute over audits between accounting firm BDO Seidman and a major Portuguese bank.

The Third District Court of Appeal in Miami ruled Wednesday that the 2007 trial was wrongly divided into three phases.

That meant jurors decided BDO Seidman should pay punitive damages too early in the case.

BDO Seidman was sued by Portugal’s Banco Espirito Santmed on a Miami company later exposed as a huge fraud. The bank claimed BDO Seidman was negligent for not detecting the fraud, costing the bank $170 million in losses.

Jurors awarded the bank $170 million in losses plus $351 million in punitive damages.

We reached out to the Steven Thomas, lead counsel for the Banco Espirito for his reaction:

This case has been sent back for another trial because of the procedural ‘bifurcation’ issue. We are pleased that the effort and hard work the jury put into this case was recognized by the appellate court, and we specifically note that the Court did not dispute BDO unethical conflicts of interest or its negligence. The evidence of BDO Seidman’s failures of even the most basic auditing procedures is so overwhelming that we expect a new jury will reach the same conclusion as the original jury. We look forward to trying this case and reminding everyone of BDO Seidman’s neglect of its public duty and the enormous conflict of interest they had.

Despite the overwhelming evidence, undisputed negligence cited by Mr Thomas, the mood inside BDO is one of vindication. From the firm’s press release not yet posted on the firm’s website:

The firm is pleased to announce that the Third District Court of Appeal of the state of Florida has unanimously overturned a 2007 jury verdict against the firm and ordered that the Bankest case be retried in the 11th Circuit Court. The Court of Appeal concluded that:

• The Trial Court erred in its original decision to trifurcate the trial, ruling that it was prejudicial to have allowed the case to be presented in three phases. This made it possible for the jury to find BDO grossly negligent without, at the same time, considering the conduct of other actors, including representatives of Banco Espirito Santo.

• The Appellate Court further concluded that the evidence of reliance on BDO’s audit opinions was insufficient to sustain the claims of the Bankest investors, save for the one individual who testified at trial.

• The Trial Court improperly allowed into evidence prejudicial hearsay testimony and documents that further served to deprive BDO of a fair trial.

The Appellate Court concluded, “We have carefully considered every substantive and procedural authority that might be applied to preserve at least some of the jury’s findings. In this case, no such balm is found.”

“We are very pleased that the Appeals court has reversed the lower court verdict. We have consistently stated that we were confident that the jury’s erroneous verdict in this case would be reversed on appeal. The addition of punitive damages at the time only served to emphasize the injustice that took place at the trial court,” said CEO Jack Weisbaum. “A new trial will be in accordance with the Court of Appeal’s decision and we will prove that BDO acted at all times consistent with its professional obligations and that its audit opinions were based on the proper application of generally accepted auditing standards.”

So we’ve got a new trial with a re-energized BDO and a tenacious plaintiff. It sounds like BDO will stick with its defense strategy of “we did no wrong,” so this should be fun.

Florida Third District Court of Appeal Decision [PDF]

BDO’s Big Ad Campaign: It’s Deadly

Advertising a professional service company is a challenge for ad agencies. First, the subject is not all that interesting, except maybe to the people who work there, their families, and their clients. And second, the differences from one company to another are minute. What you can say about one CPA or law firm is pretty much the same as another. You can’t advertise a firm as doing something better, the way Tide claims to clean better or Crest to whiten teeth better.

What can marketers do when they can’t make a claim that they are better? Why, write a jingle, like Coke or Pepsi of course. However, professional service companies have to maintain some gravitas. Schmaltz and accountants would be like wearing shorts and flip-flops to a client meeting.

We’re presenting some analysis of two current accounting firm ad campaigns, starting with BDO and tackling Grant Thornton this afternoon.

Analysis and videos, after the jump


The solution is to differentiate yourself not by what you say but through the tone of your advertising. And the tone of the BDO’s advertising is deadly, almost literally. It is dark, and cold, and depressing. And it doesn’t work because it takes itself too seriously. The conversations are artificial, and the situations forced.

In the following commercial, as two executives exit an unidentified intuitional-looking edifice, one person says to the other “Reilly hit the roof” about the need to restate. We never find out who “Reilly” is, but are reassured that “the partners are on it”, suggesting that BDO will not send in the juniors to fix the problem.

This second commercial deals with the switch from GAAP to IFRS. Why is BDO best suited to handling it? According to the commercial because of its global resources and because “it’s complicated.” Oh? Weak, pretty generic, arguments.

The best asset BDO has is it tagline, “People who know, know BDO”. That could have been the idea for a very nice commercial, maybe using real customers, but BDO did not capitalize on it.

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.