Archives for December 2009

AICPA Supports Legislation Requiring US Comptroller General To Be A CPA

The American Institute of Certified Public Accountants today announced that it strongly supports legislation introduced by Representatives Collin Peterson and Mike Conaway to require the Comptroller General of the United States to be a certified public accountant.

“Taxpayers are rightly demanding ever-increasing accountability and transparency from the U.S. government,” said AICPA President and CEO Barry Melancon. “It is essential that the comptroller general have the education, skills, background, training, and discipline of a CPA.”

The bill would require that the comptroller general be a licensed certified public accountant. It would require further that he or she meet important minimum qualifications including significant management experience in government, accounting, and auditing.

“AICPA applauds the foresight of Reps. Peterson and Conaway, who are both CPAs, and congratulates them for introducing this legislation on a bipartisan basis. The controller general should always be a professionally qualified person who will lead the GAO effectively as an advocate for taxpayers and a steward of federal resources,” Melancon said.

The comptroller general position has been vacant since March 2008 when former Comptroller General David Walker, who was a CPA, resigned to become president of the Peter G. Peterson Foundation. The previous comptroller general, Charles Bowsher, also was a CPA. Bowsher was appointed in 1981 and served a full term of 15 years.

Representative Peterson is a Minnesota Democrat and Representative Conaway is a Texas Republican. The bill, H.R. 4410, was introduced Dec. 19. To ensure the position’s independence from political influence, the comptroller general cannot be recalled from office except by act of Congress.

Source: AICPA

LECG Corporation Announces Stockholder Approval of SMART Merger

LECG, a global expert services firm, announced that its stockholders have approved the merger with SMART Business Advisory & Consulting, LLC, a privately held provider of business advisory services, and the related proposal for LECG to receive a $25 million cash investment from SMART’s majority shareholder, Great Hill Partners, as described in the proxy statement for LECG’s annual meeting.

The election of directors and all the other proposals in the proxy statement were also approved by the stockholders.

Upon the closing of the merger, LECG will issue approximately 10.9 million shares of common stock to acquire all of SMART’s outstanding shares, and LECG will issue approximately 6.3 million shares of a newly created Series A Convertible Redeemable Preferred Stock at a purchase price of $3.96 per share, for total proceeds of $25 million in cash.

Each share of preferred stock is convertible into one share of LECG common stock. The conversion rate is subject to adjustment upon the occurrence of certain events.

The closing of the transactions is dependent upon the company obtaining necessary bank financing and satisfaction of other customary closing conditions to be fulfilled by the parties.

Michael Jeffery will continue as CEO until the transaction formally closes. LECG Corporation and SMART Business Advisory & Consulting, LLC currently expect to complete the merger and the related financings by the end of January, 2010.

Blue & Co., Launches New Business Entity

Carmel, Ind.-based Blue & Co. (FY08 net revenue of $37.3 million) has formed a new entity, Aliign, LLC.

Aliign is focused on the small business niche. Aliign will provide an integrated suite of tax and accounting services offered within a highly advanced technology platform – providing clients with 24/7 web-based access to their financial documents and data.

Jerry Hammel, director at Aliign says “Our vision with Aliign is to offer small businesses a single source for all their accounting needs – including tax planning, full-service payroll, outsourced bookkeeping, and general accounting. Aliign is unique in that we offer a full-line of services within an advanced web-based platform, while also supporting a personalized, one-on-one approach to working with our clients,” he concludes.

Aliign has plans to expand into the Kentucky market in Q1 2010.

Two Former Partners of Ireland San Filippo Form New Firm

Two longtime Silicon Valley, Calif. accountants have gravitated back to a partnership they hope will be as successful as their first.

Former name-partner, and founding partner of Ireland San Filippo, Bill Ireland and former partner, Maurice Eckley have formed Ireland Eckley LLP.

Ireland founded Fremont, Calif.-based Ireland San Filippo in 1975; Eckley became a partner with ISF in 1992 and departed in June 2009.

The duo plans to target clients with businesses in distribution, manufacturing, real estate and construction as well as service organizations.

Ireland says, in an interview with Silicon Valley / San Jose Business Journal “servicing a business today entails a broad spectrum of counsel that goes far beyond the scope of simple bookkeeping, including advice on sales incentive programs, marketing strategies, costs controls, internal accountability programs, as well as planning for franchising opportunities, mergers and acquisitions, joint ventures and other exit events,” he says.

Eckley told the Silicon Valley / San Jose Business Journal that “there’s opportunity in the current market. It’s a time when many businesses are looking at new ways to improve their economics and minimize costs. That often means exploring the relationships with their professional services providers.”

“It’s good to have good competitors in the marketplace. It keeps everybody sharp,” says John Sensiba, MP of Sensiba San Filippo, a spin-off of Ireland’s namesake, Ireland San Filippo, in the Silicon Valley / San Jose Business Journal article.

So You Say You Want a Resolution? Five Leadership Tactics That Will Make 2010 a Pivotal Business Year

By, Quint Studer

Want to make a New Year’s Resolution that not only pulls you out of your recession slump but actually has staying power? Quint Studer, author of Straight A Leadership, offers five simple tips for turning it all around…fast.

No doubt about it: 2009 has definitely been a tough year. You need to turn things around, and that means making some big changes in the very near future. Problem is, you’re not sure what they are. A new improvement initiative? A hot new product? A new executive team? Quint Studer has a suggestion: Make 2010 the year you focus on leadership. Not leaders, mind you – leadership.

“Solid business results that stand the test of time do so for one reason and one reason only: consistently excellent leadership,” insists Studer, author of the new book Straight A Leadership: Alignment, Action, Accountability. “Products and services change with the demands of the market. Individual leaders come and go. The key is to create an organizational culture that ensures great leadership today and tomorrow.”

In other words, you need a long-term fix, not a magic bullet or a trendy program du jour or a charismatic leader. You need a culture built on good, solid, time-tested leadership principles. Studer urges organizations to institute proven across-the-board behaviors that don’t depend on particular individuals. The tried and true “best practices” he shares with his readers and clients—collectively called evidence-based leadership – enable companies of all types to create results that last.

These practices are not complicated. They’re simple, commonsense tactics that leaders can get their hands around and start doing right away. In fact, Studer says if you implement these five “biggies” you’ll see dramatic changes by the end of 2010:

1. Get rid of low performers. Now. Yes, despite the layoff ax so many companies have wielded during the past year, low performers still work inside many organizations. And they are causing big problems. Let’s say your employee Carol consistently comes in late, gets “headaches” every other (non-payday) Friday, and spends more time cheerily chatting up coworkers than she does working. Others will notice—and they will be resentful. But worse than merely causing contention in the ranks, turning a blind eye to the “Carols” in your organization squelches profitability. Why? Because middle performers get pulled down to the low-performer level, while high performers either a) disengage or b) leave.

“Too many of us give low performers a pass,” says Studer, whose remedy involves implementing a structured series of high-middle-low performer conversations. “It’s easier not to confront low performers, and trust me, a leader can find a thousand other things to do instead. But until you move them either up or out, your company will never advance beyond short-term gains. The low performer is an anchor holding everyone else back. Make this year the year you quit looking the other way.”

2. Accentuate the positive. The next time you’re having lunch in a restaurant, listen in on the conversations at nearby tables. Chances are, you’ll hear people griping about their workloads, difficult clients, annoying coworkers, or the ridiculousness of corporate policy. Everyone does it, but if they realized how harmful it is to their company, perhaps they’d think twice. The solution, says Studer, is to hone the fine art of managing up.

“Managing up means positioning your people, products, or company in a positive light,” says Studer, who teaches clients how to hardwire the technique into their corporate leadership practices. “Managing up doesn’t just happen; you have to make it happen in a systematic way. Help employees understand what can happen when negativity is allowed to breed – good people quit and customers leave – and they’ll be more likely to stop doing it.”

3. Make a real connection with employees – every day. Studer is a big proponent of what he calls “rounding for outcomes.” Like many of his tactics, this critical leader behavior reveals his health care industry roots. (Think of a doctor making her daily rounds to check on patients.) Rounding helps you communicate openly with your employees, allowing you to regularly find out what is going well and what isn’t going well for them at the company. But remember, says Studer, it’s not just empty “face time”—it’s rounding for outcomes, which means the process has a serious purpose.

“In the business world, a CEO, VP, or department manager makes the rounds daily to check on the status of his employees,” explains Studer. “Basically, you take an hour a day to touch base with employees, make a personal connection, recognize success, find out what’s going well, and determine what improvements can be made. Rounding is the heart and soul of building an emotional bank account with your employees, because it shows them day in and day out that you care.”

4. Say thanks. In fact, put it in writing. Studer is a big advocate of sending thank-you notes to employees who do an excellent job. But that doesn’t mean just sending the occasional note when someone goes far above the call of duty. It means literally mandating a specific number of thank-you notes for leaders to send to the people they supervise. “Thank-you notes don’t just happen,” says Studer. “If they aren’t hardwired into an organization, they don’t get written. And a thank-you note is just too powerful a tool not to use. People love receiving thank-you notes. They cherish them.”

He explains that the best thank-you notes are:

Specific, not general. A thank-you note that focuses on something specific the recipient has done is far more effective than one that reads, “Hey, nice job!”

Handwritten, if possible. Most people would rather receive a three-sentence handwritten note than a two-page typed letter. It’s more authentic and special.

Sent to the employee’s home. When an employee receives a thank-you note at home, it feels more personal than one laid on her desk along with a stack of reports and memos.

Don’t just recruit great employees. Re-recruit them. If you plan to hire in 2010 – and as the recovery (hopefully) picks up steam, many will – here’s a relatively easy step you can take that will pay off in a big way. We all know employee turnover is expensive. But did you know that more than 25 percent of employees who leave positions do so in the first 90 days of employment? To retain a new team member, the leader needs to build a relationship. Studer Group has found that scheduling two one-on-one meetings, the first at 30 days and the second at 90 days, has an enormous impact on retention that directly turns into savings for your organization.

“If these meetings are handled successfully, new employee turnover is reduced by 66 percent,” says Studer, who suggests using a structured list of questions to discover not only what’s not going well, but also what is going well. “You can be certain that your new employee is comparing her first few weeks of work with your company to her last week at her previous job – which was filled with well wishes, tearful good-byes, and probably a going-away party. Clearly, your company will get the short end of an unfavorable comparison. These meetings will help you shore up an otherwise tenuous relationship.”

Once you start implementing these tactics, results quickly follow. Your employees will see that you care about them, which boosts morale, which improves performance, which leads to happier customers, which leads to higher profits. Studer says creating satisfied employees is of critical importance, especially right now.

“When things aren’t going so well, a lot of leaders panic and start doing things that make employees less satisfied,” he notes. “Don’t make that mistake. Your leaders’ job is to create happy, loyal, productive employees. They, in turn, will create happy, loyal, profitable customers. They are two sides of the same coin – and that coin is the currency that buys you results that last.”

About the Author: Quint Studer not only teaches it, he has done it. After leading organizations to breakthrough results, Quint formed Studer Group®, an outcomes firm that implements evidence-based leadership systems that help clients attain and sustain outstanding results. He was named one of the “Top 100 Most Powerful People in Healthcare” by Modern Healthcare magazine for his work on institutional healthcare improvement. Studer was named “Master of Business” by Inc. magazine. He is the author of BusinessWeek bestseller Hardwiring Excellence: Purpose, Worthwhile Work, Making a Difference; 101 Answers to Questions Leaders Ask; Wall Street Journal bestseller Results That Last: Hardwiring Behaviors That Will Take Your Company to the Top; and Straight A Leadership: Alignment, Action, Accountability. For more information, visit www.studergroup.com.

About the Book:

Straight A Leadership: Alignment, Action, Accountability (Fire Starter Publishing, 2009, ISBN: 978-0-9840794-1-4, $28.00) is available at bookstores nationwide, major online booksellers, and directly from the publisher by calling (866) 354-3473. Copies also can be purchased online through the Studer Group website at www.studergroup.com.

H&R Block and McGladrey Settle Differences, Agree To Stay Together

H&R Block’s accounting subsidiary, RSM McGladrey, has struck an agreement in a dispute with McGladrey & Pullen LLP, an independent auditing firm.

The deal renews the firms’ existing collaboration, which was set to expire Feb. 16, extending it until 2015. Five-year renewals will be automatic after that, unless either party starts withdrawal talks, under certain circumstances, the Kansas City Business Journal reported.

Kansas City-based H&R Block said that the agreement contains “changes in both the operational and financial relationship between RSM and M&P.”

Block acquired M&P for $390 million in 1999. RSM McGladrey and M&P have operated through a service agreement ever since, with RSM providing accounting, payroll, marketing and other services to M&P for a fee. In the acquisition, M&P becoming an independent auditing firm to comply with regulatory requirements. Though they are legally independent, the two firms share office space, employees and clients, the Business Journal said.

In a suit filed in July, RSM contended that legal action against M&P was necessary, “to avoid the irreparable damage to RSM and its clients and employees that will result if the defendants’ ongoing violations of their contractual obligations are not enjoined.” The suit was filed shortly after M&P announced that it planned to terminate the administrative services agreement with Block. In September, Block moved to end the agreement. Mediation and arbitration followed.

“This agreement provides a stable foundation for future growth of RSM McGladrey,” H&R Block CEO Russ Smyth said in a release. “The discussions were ultimately healthy to review the needs of both firms and to identify how we can best manage our respective operations to improve client service, accelerate growth initiatives, improve partner wealth creation and increase shareholder returns, while preserving and protecting the independence of M&P.”

Johnson Lambert & Co. Expands Service Offerings In Chicago Area

Falls Church, Va.-based Johnson Lambert & Co.(FY08 net revenue of $21.2 million) is expanding its niche services to its practice in the Chicago area.

The firm opened the Chicago-area office in June 2009, with principal, Andrea Wright, at the helm. Under Wright’s direction and expertise the firm will expand services to include additional niches such as associations and non-profit organizations and employee benefit plans. Wright will transfer from the firm’s Virginia office to the Chicago office in June 2010.

MaloneBailey LLP Head’s East With N.Y. Acquisition

Houston-based MaloneBailey LLP (FY09 net revenue of $12.4 million) acquired the New York firm of Kempisty & Co. (nine staff)

MP of K&Co., Philip Kempisty will join MB as a partner and will be focused on developing the firm’s Chinese market.

“This expansion is part of our plan to strengthen our position as a market leader in the SEC practice area,” says MB MP Wesley Middleton. “We believe this office establishes a significant presence for M&B in the New York area, allowing us to better serve our clients and providing a platform to expand our reach deeper into the SEC audit, tax and privately held company audit areas,” he says. This is the first move east for MB.

MaloneBailey LLP Names New Managing Partner

Houston-based MaloneBailey LLP (FY09 net revenue of $12.4 million) has named Wesley Middleton as the new MP.

The firm named founding partner John Malone as its SEC practice leader.

“We are happy to be taking this next step in the expansion of our leadership team and the development of our practice,” says Malone. “Our SEC audit practice has grown to the size where it requires a full-time, dedicated practice leader and this has always been a passion of mine. Wesley is the right person to lead the firm in this next phase of our growth from a strategic and administrative perspective. His private company and tax background will enable us to expand our firm’s market and services at just the right time,” Malone says in a press release.

“Having served as a partner with the firm for over a year now, I have had an opportunity to work closely with John and my other partners to envision the future for the firm. I am confident that I can carry out our plans to continue to grow our national SEC audit practice, while expanding our reach to include a broader mix of tax services and an increased emphasis on building our private company practice,” commented Middleton. “Because of his experience in running the firm, John and I will work closely together as the executive committee. He will be very involved as a key advisor and strategist for the firm and his role as SEC Practice Leader will be mission critical. John’s vision enabled us to get to this stage and he will remain integral to our success.”

The firm also acquired the New York firm of Kempisty & Co. (nine staff) MP of K&Co., Philip Kempisty will join MB as a partner and will be focused on developing the firm’s Chinese market. “This expansion is part of our plan to strengthen our position as a market leader in the SEC practice area,” says MB MP Middleton. “We believe this office establishes a significant presence for MB in the New York area, allowing us to better serve our clients and providing a platform to expand our reach deeper into the SEC audit, tax and privately held company audit areas,” he says. This is the first move east for MB.

IPA Snapshot: The Five Most “Planned” Niches

The 2009 INSIDE Public Accounting Annual Survey and Analysis of Firms uncovered the top five niche expansion areas that firms are planning:

1. Human Resources
2. Forensic Services
3. Financial Institutions/Banking
4. International Tax
5. Governmental

So beyond the predictable, what’s the next “big thing” firms are identifying as a possible niche? How about the whole area of green energy? Measuring carbon footprints for clients, cap-and-trade and carbon credit markets are spawning new industries that are rapidly developing around the globe. It could be a potential new market, and certainly would gain the attention of staff and new recruits. Younger staff have grown up in an energy conscious era. According to the 2010 edition of My College Guide, “for an increasing number of students, ‘going green’ is more than just a trend. It’s a subject they want to devote their lives to.”