Archives for May 2012

IPA 100 Firms Combine Forces

After months of speculation, Roseland, N.J.-based J.H. Cohn (FY11 $235.6 million) and Bethesda, Md.-based Reznick Group (FY11 net revenue of $202.5 million) announced their merger, creating a $450 million firm.  The combined firm will have more than 2,000 employees and 25 offices nationwide. The partners and principals of both firms have agreed to the combination. Pending approvals, the combination is anticipated to take effect in September.

In 2011 J.H. Cohn ranked 18th on IPA’s 100 list, Reznick ranked 20th. J.H. Cohn is a member of Nexia International and Reznick is a member of IGAF Polaris.

“The combination of these two great organizations immediately elevates us to a preeminent position on the East Coast with offices from Boston to Atlanta, provides a significant expansion in California, and establishes a national footprint with additional offices in Texas and Chicago,“ says Thomas Marino, partner and CEO, J.H. Cohn.  “This combination of peers changes the landscape of the accounting industry by establishing a firm with an unprecedented concentration of industry experience in real estate, and highly specialized, combined experience in areas such as renewable energy, hospitality, manufacturing and distribution, capital markets, government, construction, life sciences and technology, and valuations.”

“The synergies and opportunities this combination of equals brings to our clients and staff is nothing short of historic,” says Ken Baggett, Reznick Group’s MP and CEO.  J.H. Cohn has very diverse clients across a wide array of industries.  When combined with Reznick Group’s knowledge of the affordable housing and commercial real estate industries, as well as the tax credit arena, the result is a firm that is a powerful resource for clients across all of their accounting, tax and consulting needs.”

Allan D. Koltin, CEO of Koltin Consulting Group, who has advised both firms on various strategic issues over the past 10 years commented, “ This merger should be a case study on how to do it right. It was a “merger of equals” on Day 1 and that made everything else that much easier. Tom (Marino) and Ken (Baggett), as well as their leadership teams were able to keep the partners in the loop the entire way which helped tremendously with the buy in and support. The votes from both firms were unanimous. The ability to cross sell each other’s areas of expertise will also be significant. Whether it be governmental, real estate, energy, nonprofit, manufacturing, construction, wholesale/distribution, financial markets, or business investigation, they will have the troops on the ground to deliver.”

AICPA Council Meeting…CEO Panel

Kenneth Kelly, senior vice president and controller, McCormick —

“What are the things making you successful? Is it the innovation pipeline? You should be measuring that, but it may not be a number on a balance sheet.”

McCormick is a fairly old company, from 1889, and in 1932, C.P. McCormick took over company. He had a totally different concept. He gathered employees together in factory and said, ‘Listen you are one of my most important assets. We need to work as a team and get better here.’ He raised salaries 10 percent. Took the work week from 56 hours to 48 hours and the next year they were in the red, productivity increased hugely. People started to work as teams to increase that productivity. They were more empowered.

“We’re teaching leadership, we’re teaching collaboration and we’re teaching a broader knowledge of processes in our business.”

“Are you a problem solver? Or are you an accountant?”

‘Don’t tell me accounting stuff. Tell me a business solution.’ “I think you need to listen broadly to your customers…what are their issues? What problems do they have and how do you solve those problems? That can lead you to innovation.”

“How do we as financial professionals move up the value chain — not just counting the beans but how to grow the beans.”

Brad Dickerson, CFO, Under Armour Inc.

“Employees make customers happy, which ultimately makes the shareholders happy.”

“You have to have a good work force with an aligned vision.”

“How do you attract talent in this virtual world? I think it will be interesting to see how companies are going to react to that.”

“Collaboration is key. The days of financial people sitting at their computer sitting at their desks all day are long, long gone.”

On financial professionals’ skills:

“Connecting people to solve problems is a very, very important trait to their success.”

“I always thought I had to be the expert on whatever issue was out there.” After MBA program he learned, “Be an expert in your swim lane.”

“Be comfortable where you’re an expert and be comfortable where you’re not.”

On leadership:

“I think maybe 15% of your work is black and white and 85% is gray.”

“Make sure the information is clear and concise and it’s not information overload. I think it’s our job to be storytellers.”

AICPA Council Meeting…IRS Commissioner Douglas Shulman Speaks Out


  • “The tax code has become a monstrosity.”
  • “Our tax system is the envy of tax systems around the world.”
  • “Public trust in institutions is a critical element of U.S. competitiveness and we’re held up as the global standards.”
  • “We need to be balanced between independence and accountability.”
  • “I’m a big believer that there’s a link between transparency and integrity.”

On tax preparer initiative:

  • “90 percent of people use either tax software or a preparer to prepare their taxes.”
  • “We are charged to make sure the tax system works. We might be the core to make sure the tax laws are administered in a fair and even-handed manner, but in no way does it end with us.”

 On the AICPA’s 125th anniversary:

  • “I commend you for playing an important part in upholding the integrity of the tax system.”
  • “We believe that we’re heading to a post-social world.”
  • “55 percent of time spent on social media is being wasted.”
  • “The New York Times and Wall Street Journal give away newspapers for free on college campuses, but everywhere I went I saw stacks of newspapers.”
  • Gen Y says, ‘Hey, the technology I’ve got in my pocket is better than what I have at work.”

On social media bans at workplaces:

  • “You’re not going to get the best and the brightest to work at your company. This is the air they breathe and the water they swim in.”
  • “Companies that really make money are going have to give an integrative experience.”
  • “Digital disrupters want to build better product experiences, a stronger customer relationship and finally, they want to bring it all to market so much faster.”
  • “There’s really only one choice. Somehow, someway you have to be a disruptive leader. You have to do it.”


  • Harness the power of digital consumers
  • Generate more ideas, with greater speed
  • Deliver total product experiences
  • To be a disrupter, you need energy, skills and policies.
  • “People see this all coming, but they’re not ready for it.”
  • “You really have a very simple choice. You either have to be the thunderstorm or you’re going to get very, very wet.”
  • “The Dow Jones Industrial Average is 110 years old. Only one company is left from 110 years ago: General Electric.”

AICPA Council Meeting…Panel on Implications of Horizons 2025 on Young CPAs’ Careers

 On technology…

Gerardo Godinez, Business Assurance Senior Manager, Moss Adams, LLP – “I think technology is going to enable us to get to the point where’s no busy season.”

Advice to older CPAs…

Dan Griffiths, Co-Founder, Proficio Services Group says LinkedIn is “incredibly powerful” and is being “underutilized.” He advised firms to stop blocking staff from using it.

Micro-networking works well, says Gerardo Godinez, Business Assurance Senior Manager, Moss Adams, LLP. You can reach out to people in your specific niche rather than enter a room with 500 people.”

 On recruitment of top talent…

Kemberly Washington, Accounting Professor, Dillard University said a  valedictorian with a 4.0 GPA is working 80 hours a week, on weekends, for a Big Four firm. She said she believes professors should educate students about the realities of what to expect.

Dan Griffiths, Co-Founder, Proficio Services Group: “What’s not motivating to our generation is ‘pay your dues, put in your time and there’s this pot of gold at the end of the rainbow.’” He said meaning and purpose is more important than a paycheck.

On strategic planning…

Dan Griffiths, co-founder, Poficio Services Group: “If we were engaged in the process in the beginning, we’ll be more much flexible in implementing the strategy and making it work.”

On financial literacy…

Dan Griffiths, co-founder, Poficio Services Group: He said students are asked to go to the best schools, take on $100,00 in debt and then spend the next 35 years paying it off. “That narrative is broken,” he said, adding that the CPA profession is ‘uniquely positioned” to create awareness, get engaged and help on the issue.

On recruitment of young people…

“We need to do a better job of selling what we’re doing to the people coming into the profession.” — Dan Griffiths.  

On money…

Kemberly Washington, accounting professor, Dillard  University: “I decided to follow my passion and not a paycheck.”

On diversity…

Deetra Watson, audit manager, Blackman & Sloop CPAs, “We have to have diversity in education. They should be taught be someone who looks like them.”

Gerardo Godinez of Moss Adams LLP said he looked at the partners in his firm and thought, ‘I don’t identify with one single one of them,’ which sends a message that says “because I’m not like them, I may not be a partner here.” He adds, “No one ever said that explicitly but you can read into these things.”

Dan Griffiths, co-founder, Proficio Services Group: Empathy is a “gaping hole” in the strengths of the profession. It’s important to work with people with diverse backgrounds and understand where they’re coming from. “We’ve got to get more comfortable working with diversity.

AICPA Panel discussion… “What We Need to Do to Stimulate the Economy”

Sen. Bob Graham, D-FL, called for regulatory reform and said three issues should be considered: acting in a timely manner, creating simple and clear regulations and ensuring they are sustainable.

Traci Lynn, CEO of Traci Lynn Fashion Jewelry: “I believe the entrepreneurial spirit is alive and well.” She said so many people are “hungry to make a change,” to find an opportunity to help themselves. She says it’s an excellent time to start a business.

Neal Spencer, CEO of BKD LLP, said health care is one of the biggest industry sectors at his firm. Many clients are sitting on a lot of cash and want to make capital investments, but they don’t know where the economy is going, so the uncertainty is keeping them from spending money.

Question posed: If you had the power to do a few things to help the economy what would it be?

Sen. Bob Graham, D-FL: “I would simplify the tax code. I don’t think there’s an area that’s more complex and more consequential than the enormous complexity of our tax code.”

Traci Lynn, CEO Traci Lynn Fashion Jewelry: Make sure people get the best education they possibly can to give them the confidence to pursue their dreams. Also, she said business incubators can help people identify their entrepreneurial talents.

Neal Spencer, CEO of BKD LLP, said he would take a “hard look” at eliminating some regulations. “It’s causing a lot of pain with our clients today.” Some regulations make sense, “but we’re piling on, quite frankly.”

Timothy Christen, CEO of Baker Tilley Virchow Krause LLP: “Make it not be a crime to be successful.”

AICPA Council Meeting…On the Relevance of Financial Reporting

Charles Allen, CEO, Crowe Horwath LLP, said investors see audits as important and they have confidence in the process. “I believe many of the assurance engagements we’re doing outside of opinion audits are where clients are seeing the most value.” That’s where the market is taking us, he said. “If we don’t take advantage of that, we’re going to lose that opportunity.”

Lou Grabowsky, COO, Grant Thornton: Investors are making decisions on lots of nonfinancial information. “The call to arms on relevancy, and again to be proactive with it, to ensure we stay relevant, is to step out there and challenge ourselves.”

Jean Hobby of PwC: “We have to listen to what the marketplace needs and we have to adapt to meet those needs.”

AICPA Council Meeting…On Future of the Profession

Wayne Berson, CEO-Elect, BDO USA, said he believes the firm must look outside the core areas to make sure the right talent is working on consulting services. “If we want to charge premium prices we have to provide value.” He added that everyone wants to grow, to provide service to more complex clients. “This is going to be the era of M&A.”

Chuck Allen, CEO, Crowe Horwath LLP, said a group of young professionals came to him with an idea to put R&D money into process improvement and bring those solutions to the clients and add great value. “For me it was a great opportunity to see some young partners come forward with future thinking.”

Jean Hobby of PwC said assurance is seeing a lot of growth and the potential is enormous. “If we continue to hire the best and the brightest, we’ll continue to be the profession that brings our clients the solutions.”

John Veihmeyer, CEO KPMG, said that the best talent in the next 10 years will be comfortable working on teams and will thrive in a collaborative environment.

Jean Hobby of PwC: “Diversity in the profession is a necessity and 10 years from now it will be an absolute requirement.”

AICPA Council Meeting…Audit Regulation / Quality

John Veihmeyer, CEO KPMG — “We can’t put our heads in the sand and say we don’t want anything to change.” He added, “If you believe that our people are talented and trying to do the right things, sometimes what gets in the way is the time allocated to do the tasks we’re asking them to do.” Let’s focus on the heart of the issue. We have some models where it’s working. “We have best practices examples out there.” He said, on mandatory firm rotation: “Let’s put to the side some things an awful lot of people think are wrongheaded in the way they’re currently being discussed.”

Lou Grabowsky, COO Grant Thornton, on firm rotation, said: “Let’s change the dialogue from defensive to offensive or aggressive.” Need good dialogue with executives and CEO of the companies. “We’re moved so far to a compliance discussion that we forget about a business discussion.” He said get more proactive in the dialogue. “Move our people from the staff room to the executive offices.”

Bill Freda, Vice Chair, Deloitte LLP, said the profession has made great strides. “The level of accountability for all of us is higher than it’s ever been and it’s moving in the right direction.”

AICPA Council Meeting…On Regulation/Human Capital Issues

Chuck Allen, CEO Crowe Horwath, “There’s nothing that makes  a professional feel better than to get positive feedback back from a peer or back from a client.”

Jean Hobby of PwC, “Our profession is becoming much more of a team activity.”

“We have a crisis at the audit partner level,” Lou Grabowsky COO of Grant Thornton. “They put their career on the table every single day.”

Audit practices are stressed, says Bill Freda, VIce Chair of Deloitte.

“It’s a very stressful profession.” says Wayne Berson, CEO-Elect of BDO.

AICPA Council Meeting…On Regulatory Challenges

Lou Grabowsky, COO, Grant Thornton LLP, says, “Quality begins at the top.” It’s at the foundation of how we try to executive our strategy. A number of ways we are driving quality is by continuously improving methodologies, improving data mining to determine root causes of problems, and measuring performance to reward quality.

Joe Adams, MP and CEO of McGladrey, said tone at the top is clearly critical but investment in people is important as well to teach professional judgment.

John Veihmeyer, CEO KPMG, says he has a simple litmus test when it comes to regulatory changes: “Will it help? Or make it more difficult to retain and attract the best people into this profession?”