Archives for January 2010

Tim Christen Appointed Chairman of the AICPA’s Major Firms Group

Timothy Christen, chief executive of Madison, Wis.-based Baker Tilly Virchow Krause, (FY09 net revenue of $207.2 million) has been appointed chairman of the American Institute of CPAs’ Major Firms Group.

Christen will serve a three-year term.

Formed in the mid-1970s, the Major Firms Group consists of more than 75 of the nation’s top 100 firms who have 75 or more AICPA members. It acts as a unified voice representing the interests of national and regional firms, and is a powerful advocate of thought leadership for the profession. Christen continues to serve as a member of the AICPA Board of Directors, working in conjunction with the organization’s national council to oversee management and services that impact the more than 350,000 AICPA members nationwide.

Indianapolis Firm Partners Now In Law Suit

According to published reports, claims and counter-claims are escalating in the split between Larry Greenwalt and Tom Sponsel, founding partners of Indianapolis-based Greenwalt Sponsel, who now run two separate firms – Greenwalt CPAs, Inc. and Sponsel CPA Group.

Sponsel and two other former partners have filed a law suit against Greenwalt CPAs alleging that their former firm breached its contract and fiduciary duty with the three former partners. Greenwalt, who says he has tried to resolve the issue through mediation, but was unsuccessful, is countersuing Sponsel.

A comment posted online in response to an article in the Indianapolis Business Journal about the split sums it all up: “Ladies and Gentlemen: Settle this quickly and don’t play this out in the local press in this manner. Your clients don’t care about your problems; they need your full attention in caring about theirs. What both firms are doing is giving their clients a reason to look and move their business elsewhere.”

A Passion For Wine, A Passion To Help Small Businesses Grow

CPA Timothy Allen grew up among the rolling hills and lush vineyards that define California’s picturesque Sonoma County. At an early age, he discovered he was good with numbers, enjoyed helping others, and loved the wine business that surrounded him. Allen deliberately melded his passion with his talent in 2009 when he created St. Helena Winery Accounting & Finance – a full-service accounting and finance company exclusively for the wine industry. “It hasn’t felt like work in 15 years,” Allen beams.

Allen started his accounting career in the tax department of Deloitte & Touche, and later transferred to the audit department, auditing vineyards around Sonoma. “The accounting partner track wasn’t interesting to me,” he says, “but the winery business was.” After five years with D&T, Allen left the comfort and security of the Big Four firm and opened his own accounting and consulting business, exclusively serving wineries.

Today, Allen offers back office support and business consulting services to small vintners, allowing the proprietors to focus on what they do best – making fine California wine. Recognizing that the business needs of his clients lie in the managerial and consulting side of his business, he created a finance department for his clients, and has focused his efforts on helping them standardize their financial processes and systems. With so much consolidation occurring in the winery business today, Allen’s outsourced services are an attractive option to small wineries and potential acquirers alike. In fact, the last four companies he worked with have all been sold, and the business systems he instituted helped earn a premium on each.

Allen’s love for the wine business doesn’t stop with his clients. He also has developed his wine brand, Bartz-Allen, and is enrolled in the Wine & Spirits Education Trust Diploma courses in pursuit of his Master of Wine credential. “I try to make it all-encompassing,” he says of his love for the industry.

Allen recognizes that aspiring accountants often look for the most popular careers, rarely considering what motivates them outside of the workplace. “Accountants traditionally put our passions second to our careers,” he tells IPA. By combining the two, Allen acknowledges that “choosing your passion doesn’t always make you a million dollars out of the box, but it is richly rewarding in terms of quality of life, family time and general day-to-day happiness.”

Of his peers across the profession, Allen notes, “When you are young, you tend to look at the bright shiny objects – the career that will get you a six-figure salary as quickly as possible.” He encourages everyone to find what they love and discover how they can build a career around it. “There are many niche markets that don’t necessarily attract the best and brightest accountants. Music, fashion, travel – they all need good CPAs.”

Weiser And Mazars To Come Together To Build A Global Brand

In a move that embodies the accelerated efforts of large regional firms looking to increase client service offerings by going global, New York City-based Weiser LLP (FY09 revenues of $128 million) has confirmed that they are in final discussions with global accounting giant Mazars (FY09 net revenue of $1.1 billion) to bring their practices together in the United States, adding a key player to expand the global brand of Mazars.

Mazars and Weiser have had a joint venture agreement for a decade; two years ago they began, in earnest, to bring it all together. In December 2009, they reached an agreement that now goes to the partners of each group. Final approval is expected in March.

If approved by the partner groups, Weiser will stay in existence, operating as Weiser Mazars, LLP, with partners and professionals remaining part of that group. “This is not a merger in the legal sense,” says Weiser MP Doug Phillips. WM LLP will enter into a cooperative agreement with Mazars SCRL, a Belgian not-for-profit association that will bind them together under the Mazars banner. The Weiser partners will remain partners in WM LLP, and will also become partners in Mazars SCRL.

“The business case is a strong one,” says Phillips. “If you look at increased globalization, a worldwide economy, the need for our clients to have access to emerging markets around the world, and the emerging importance of IFRS, we will get there quicker by combining with Mazars.”

In addition to increased client service capabilities, the move has created quite a buzz among the Weiser staff and recruits. “It has been overly positive,” Phillips says. “There is significant enthusiasm at the partner and staff level, and we have already seen positive effects on the recruiting side because of this move.”

Mazars has a strong global brand, with 12,000 professionals in 55 countries making up its integrated partnership. Mazars also has joint venture agreements in place with Springfield, Mo.-based BKD and Seattle-based Moss Adams, members of Praxity, an international alliance of independent accounting firms, along with Weiser and Mazars.

Admittedly, the Mazars brand is not well known in the U.S. today, Phillips recognizes. “Weiser has a 90-year old brand with a solid reputation in the metropolitan New York area. We would be foolish to get rid of that, which is why we will operate as Weiser Mazars.” Brand recognition and the evolution of service delivery to capitalize on all capabilities, will be the biggest obstacles in achieving the vision, says Phillips. “You can’t just slap a new name on and provide new services. You have to prove to clients that you have an increased capability.”

The Weiser–Mazars move follows similar efforts to expand the footprint of firms in a global economy: BDO Seidman announced it will operate as BDO to better align with the global brand; Crowe Chizek became Crowe Horwath to capitalize on the global Horwath name, and may ultimately be known as Crowe around the world; Virchow Krause recently became Baker Tilly Virchow Krause to expand its footprint both nationally and internationally. “There is absolutely no doubt that there is a very clear move for large regional firms to spread to a national and international platform,” Phillips says.

The Domino’s Theory: What Your Company Can Learn from the Customer-Driven “Pizza Turnaround”

When the pizza giant asked consumers to tell the truth, it ended up back at the proverbial drawing board. (Or should that be cutting board?) New product development guruDan Adams says there’s a lesson in this story for all of us – and he offers some insights on the art of really listening to customers.

Recently, Domino’s Pizza did something practically unheard of in the business world. First, it asked its customers for honest feedback. Second, it actually listened to the painful truth (according to its documentary ad, “The Pizza Turnaround,” unflattering words like “cardboard” and “totally void of flavor” were tossed about with abandon). Finally – and here’s the shocking part – the company reinvented its product “from the crust up.”

Now, if you’re the typical business leader, you might be protesting, “But we listen to our customers all the time!” Don’t be too sure, says new product development expert Dan Adams. You might think you’re giving your customers what they want – but there’s a good chance you’re actually giving them what you want them to want.

“Many companies are essentially saying to their customers, ‘You do need this product, right? Right?'” laughs Adams, author of New Product Blueprinting: The Handbook for B2B Organic Growth. “They’re starting with a product and trying to talk their customers into giving it their stamp of approval. What looks like soliciting feedback is really a bit of a dog and pony show.”

Adams should know. He has spent his career helping some of the largest business-to-business companies in the world learn how to develop new “stuff” that customers want to buy. Through New Product Blueprinting (the process described in his book), his company helps clients bring clarity to the “fuzzy front end” of product development.

So with the Domino’s ad campaign making headlines for its boldly honest approach, you might be wondering how your company can follow its lead. Adams offers several tips:

Ask your customers what they want – in a way that lets them know you really hear them. A lot of companies pay lip service to this idea. As consumers we’ve all had survey cards slapped down in front of us or fielded post-purchase telemarketing calls.

Reconsider how you are colllecting customer feedback. Are you doing it in a way that really engages the customer so that you can get the truth?

“There’s no substitute for respectful dialogue with customers,” says Adams, whose own process helps B2B suppliers elicit idea-generating, peer-to-peer conversations with their customers. “When you can get people truly engaged in the feedback process – I mean really focused on what they need and want from you – you’ll get their honest opinions. And that raw honesty is what you need to serve them the right way.”

Don’t rely on sales reps alone to capture customer needs. A salesperson is unlikely to uncover a full set of market needs if he is a) rewarded for near-term selling, b) unable to reach true decision makers, or c) not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced interviewing methods, and you’ll run circles around your competitors.

Be wary of VOC (voice-of-the-customer) consultants who want to exclude your sales force from interviews because “they can sell but not listen,” warns Adams. In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.

Take action on what you’re hearing. Many companies ask their customers for feedback with the best of intentions. But when they start hearing things they don’t want to hear, they find a million reasons to explain it away. As a result, the feedback never gets translated into action.

“A lot of companies will say, ‘Oh, they’re a difficult client,’ or, ‘That’s not really what they want; it’s just what they think they want,'” says Adams. “Either they don’t really want to change what they’re doing or they don’t trust the customer or they don’t trust themselves to understand what the customer wants.

“A good interviewer knows how to dig deep and figure out the customer’s hidden needs,” he adds. “And a smart company will take action to meet those needs – no matter what.”

If you have to scrap your existing products and start from scratch, so be it. Here’s the real truth, says Adams: Most suppliers start with their solution, “validate” it by showing it to some customers, and measure market needs by watching sales results… after the product launch! In other words, they’re getting it exactly backwards.

“Companies should invert this process: Begin with customer needs and end with supplier solutions,” asserts Adams. “While doing things in the wrong order may ‘feel’ better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent customers can detect your ‘validation’ a mile away. They correctly sense you are more interested in your idea than in them… and that doesn’t do much for the long-term relationships you need to build.”

Get everyone in your company connected to the customer’s reality. If you watch Domino’s new ad, you can see how ego crushing it was for the company’s employees to hear customers speak their minds about the flavorless crust and ketchupy sauce. Yet, you can also see how necessary it was for them to hear the harsh truth – it energized them to revamp their product and make it much, much better.

“People inside companies tend to get defensive about their products and processes,” admits Adams. “It’s only human. But when you can cut through that defensiveness and show them ‘Hey, this really isn’t working for our customers’—well, that’s where true service and value finally begin.”

If you’re thinking this is a message recession-strapped companies need to hear, you’re right, says Adams. The quicker they get it, the more likely they are to survive.

“Figuring out what people really want from your company, and giving it to them, is the whole point of being in business,” he notes. “When money is flowing, you can stand some trial and error, some experimentation. When it’s not, you’d better get it right now—and ‘right’ means whatever the customer says it does.”

About the Author: Dan Adams, president of Advanced Industrial Marketing, Inc., is passionate about B2B new product development. In over 30 years working within and with major B2B corporations, he has explored every aspect of product development, building New Product Blueprinting from the ground up. He is a chemical engineer and holder of many patents and innovation awards, including a listing in the National Inventors Hall of Fame. Adams was head of strategic planning for a billion-dollar company and has extensive experience in Fortune 500 marketing, business development, and leadership positions. He is an award-winning speaker and conducts workshops in every region of the world. His 2008 hardcover book, New Product Blueprinting: The Handbook for B2B Organic Growth (www.newproductblueprinting.com) clarifies the “fuzzy front end” of innovation, and his 2009 e-book, 12 New Rules of B2B Product Launch (free download at www.b2bproductlaunch.com/e-book), boosts launch success. Advanced Industrial Marketing Inc. (AIM) was built on the belief that understanding your customers’ deepest needs is a competitive advantage you should learn—not outsource. AIM conducts workshops globally to train commercial and technical teams in advanced B2B product development, provides strong post-workshop coaching support…and then gets out of the way.

Coming Soon! INSIDE Public Accounting’s 2010 Annual Analysis of Firms Survey

2010 marks a milestone for IPA – it marks the 20th anniversary of the compilation and analysis of the IPA National Benchmarking Report. With your assistance and support over the past two decades, IPA has compiled one of the richest sets of data of operational and financial performance for the accounting profession.

Historical data always provides clues to future performance opportunities. What can we expect as we emerge from the recession? What has been the effect on firms who have expanded from a single-office to multiple offices? What are the long-term trends that may not be obvious from one year to the next?

“Now more than ever, MPs need this data, and need to do something with it.” Kelly Bernakevitch, Executive Vice President of Operations, Meyers Norris Penny, LLP

“During tough times, firms can’t get an accurate gauge of performance by comparing to years past, so tools like the IPA National Benchmarking Report are more important than ever. The report allows us to get valuable insight by seeing how our peers are faring and how the industry, as a whole, is performing.” Lisa J. Cines, Managing Officer, Aronson & Company

As we proudly enter our third decade of analyzing the profession, we welcome your input, guidance, suggestions, and ideas on how we can make this data set more valuable to you. We invite you to contact us for any special research projects you are working on where historical data might be helpful. We want to hear from you to learn what else we can offer to help you be more successful.

To those of you who have participated in the past, thank you for your contributions, which help accurately define where the profession is and where it is going. And thank you in advance for your participation again this coming year. To those of you who may not have participated before, we open our doors and invite you to join hundreds of other firms as we join together to explore how everyone is doing collectively; but more important, you can measure how your firm compares against your peers. Participating in the survey will expose new areas for improvement and provide insight on how to be more successful. We hope you join us this coming year in making this data set as robust as possible.

Please contact us at survey@plattgroupllc.com to add your name to the participation list.

PCAOB Auditing Standard on Engagement Quality Review Approved

The Public Company Accounting Oversight Board announced in January that the U.S. Securities and Exchange Commission approved Auditing Standard No. 7, Engagement Quality Review (EQR). The standard is effective for engagement quality reviews of audits and interim reviews for fiscal years that began on or after Dec. 15, 2009.

Accordingly, for interim reviews of public companies that file financial reports on a calendar-year basis, the EQR standard is applicable beginning with the quarter ending March 31, 2010. The new EQR standard was adopted by the PCAOB on July 28, 2009.

“The new standard is an important milestone in fulfilling the Board’s mandate,” said PCAOB Acting Chairman Daniel L. Goelzer. “This standard should improve the reliability of audited financial statements by increasing the likelihood that reviewers will identify significant engagement deficiencies before audit reports are issued to the investing public.”

The Sarbanes-Oxley Act directs the PCAOB, among other things, to set standards for public company audits, including a requirement for each registered public accounting firm to “provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance….”

Martin F. Baumann, Chief Auditor and Director of Professional Standards, said, “A well-performed EQR can serve as an important safeguard against erroneous or insufficiently supported audit opinions and, accordingly, can contribute to audit quality.”

The SEC, in its order approving the EQR standard, encouraged the PCAOB to issue guidance on the standard’s documentation requirements. The PCAOB plans to publish Staff Questions and Answers on implementation of the standard in the near future.

iDonatedIt – The First iPhone – iPod Touch Application For Charitable Donations

BMG Certified Public Accountants of Lincoln, Neb., released iDonatedIt – the first iPhone and iPod Touch application that calculates, tracks, and reports non-cash charitable donations.

Have you ever dropped off a bag of clothes at a charity and wondered what that bag of clothes was really worth? When you have prepared your tax return, have you ever struggled to remember what you donated, whom you donated it to, and when you donated it? iDonatedIt was created by BMG to solve these problems – all from your iPhone or iPod touch.

iDonatedIt tracks the date you donated non-cash items to a charity, the charity you donated items to, the items you donated, and the fair market value of those items. iDonatedIt builds lists of the items you donate and allows you to keep a permanent record of the items you donated that meets the compliance requirements of the IRS. iDonatedIt lets you attach a photo to your donation list to document your donation.

BDO Seidman Changes Name, Just BDO

BDO Seidman (FY09 net revenue of $620 million) announced that effective Jan. 1, the firm will be known simply as BDO.

The U.S. member of the BDO International Network joins other member firms in 115 countries around the globe in adopting this single global trading name. The rebranding, which will be incorporated in all marketing and advertising initiatives, was announced as the firm begins a year-long celebration of the 100th anniversary of its 1910 founding.

“The adoption of the single BDO brand name reinforces our commitment to the BDO international network, even as we celebrate our firm’s centennial here in the U.S.,” says Jack Weisbaum, CEO of BDO U.S.

Meyers Brothers Kalicka Names New MP

Holyoke, Mass.-based Meyers Brothers Kalicka (FY09 net revenue of $12.4 million), named James Barrett MP.

Barrett’s role as MP is to lead the firm’s long-term strategy, growth initiative and overall management of the firm. Barrett succeeds David Kalicka who has served as MP of the firm since 2004.