Archives for August 2013

New CEO Named at Goldstein Schechter Koch

Coral Gables, Fla.-based Goldstein Schechter Koch has announced that CEO Howard Lucas, after five years in the position, will “pass the torch” to partner Sanford B. Horwitz.

The firm said Lucas steered GSK through mergers and acquisitions, organic growth and has helped GSK ride the economic storm over the past few years. He will continue serving clients and will remain part of the management committee of the firm. Horwitz, who joined the firm as an intern in 1979, will continue to be a full-time practicing CPA in addition to his new post as CEO.

 

CPAmerica International Announces 2014 A&A Conference Leaders

CPAmerica International announces that Kelly Crandall, HBL CPAs of Tucson, Ariz., and Tracee Buethner, Widmer Roel PC of Fargo, N.D., will be the incoming chair and vice chair for the 2014 Accounting and Auditing Conference in New Orleans. The pair will take a large role in planning the agenda for the conference. Crandall joined HBL CPAs as an audit manager in 2001 and specializes in audit engagements with an emphasis in not-for-profit organizations. Buethner, as audit manager for her firm, has extensive experience in supervising engagements, performing audits and providing accounting and consulting services to a wide range of clients.

PCAOB Proposes Additional Information in Public Audit Reports

The Public Company Accounting Oversight Board this morning proposed that additional detailed information be included in the public audit report to investors and other financial statement users.

One new standard would require auditors to explain critical matters that arose during the audit. The other standard would require auditors to look for inconsistencies or misstatements in financial reports that fall outside of the audited financial statements, Compliance Week reported. The proposal will undergo a public comment period.

The proposals “mark a watershed moment for auditing in the United States,” said PCAOB Chairman James Doty, according to Compliance Week. “The standard form audit report was designed by the audit profession more than 70 years ago. While it serves a critical purpose, many question whether it could do more.”

This would be the first significant change made to the auditor’s report since the 1940s. The reports basically say whether the financial statements fairly present the company’s financial condition and whether they followed generally accepted accounting principles (GAAP). Critics have said the reports fail to give investors enough insight into the auditor’s findings, including any concerns that may have arisen during the audit, Reuters reported.

Lynn Turner, a former chief accountant at the SEC, would like to see an end to what he calls an “abusive practice.” He told Reuters, “For too long, auditors have been found to have known about serious problems with financial reports they failed to tell investors about, instead choosing to protect management.”

If the PCAOB proposal is adopted, auditors will be required to communicate so-called “critical audit matters,” issues that involved the most difficult or subjective judgments, or issues that posed difficulties for the auditors to obtain sufficient evidence. The proposal also proposal calls for auditors to make several other disclosures related to their independence and the amount of time they have reviewed the books of their clients.

The proposal will undergo a public examination. The PCAOB has conducted extensive outreach efforts over the last three years to investors, auditors, preparers of financial statements, audit committee members, and others. Many audit report users have said that they want more insightful information about the results of the audit.

Survey: CEOs Want Outside Advice, But Don’t Get It

Nearly two-thirds of CEOs do not receive leadership advice from outside consultants or coaches, and almost half of senior executives are not receiving any either, according to a new survey.

The survey also said that almost all the CEOS said that they enjoyed the process. “Given how vitally important it is for the CEO to be getting the best possible counsel, independent of their board, in order to maintain the health of the corporation, it’s concerning that so many of them are ‘going it alone,’ ” says Stephen Miles, CEO of The Miles Group. “Even the best-of-the-best CEOs have their blind spots and can dramatically improve their performance with an outside perspective weighing in.”

Key findings:

  • When asked “Whose decision was it for you to receive coaching?” 78% of CEOs said it was their own idea. “We are moving away from coaching being perceived as ‘remedial’ to where it should be: something that improves performance, similar to how elite athletes use a coach,” Miles said.
  • When asked which is the biggest area for their own personal development, nearly 43% of CEOs rated “conflict management skills” the highest.
  • The top two areas board directors say their CEOs need to work on are “mentoring skills/developing internal talent” and “sharing leadership/delegation skills.”
  • Top areas that CEOs use coaching to improve are sharing leadership/delegation, conflict management, team building, and mentoring.

More than 200 CEOs, board directors, and senior executives of North American public and private companies were surveyed. The study was conducted by the Center for Leadership Development and Research at Stanford Graduate School of Business, Stanford University’s Rock Center for Corporate Governance, and The Miles Group.

Survey: One-Third of CFOs Say Employees Are Unclear About Company Goals

About a third (34%) of CFOs said their employees are not very or at all aware of their firm’s strategic objectives, a new survey says.

Workers at smaller companies, of 20 to 49 employees, may know even less about the strategic vision of their company. The Robert Half Management Resources survey says 35% of executives from small companies said their teams are not aware of the firm’s objectives.

“Employees who know about their company’s strategic goals are more motivated to help the business reach them,” said Paul McDonald, Robert Half senior executive director. “Managers need to go beyond simply sharing the vision, however, and show workers how their contributions support the efforts to reach organizational objectives.”

McDonald added, “With fewer staff and a more nimble structure, small companies, especially, have an opportunity to broadly discuss strategic business intentions and rally their teams around those targets.” The survey was based on interviews with more than 2,100 CFOs at companies in more than 20 of the largest U.S. metropolitan areas.

Center for Audit Quality Releases Document to Help Improve Audit Reporting

The Center for Audit Quality (CAQ) has released a new paper designed to help audit firms improve their own audit reports. The CAQ aims to increase public confidence in the process of auditing public companies by encouraging firms to voluntarily report on the firm’s structure, operations and internal system of quality control. Information on how the firm’s management and operations support the performance of high-quality audits can improve transparency and therefore public understanding, the CAQ believes.

This resource provides examples of possible firm-specific information that could be reported in the following six areas:

  • Firm Leadership and Tone at the Top
  • Independence, Objectivity and Skepticism
  • Audit Process, Methodology and Performance
  • Professional Development and Competency
  • Monitoring
  • Firm Organization and Structure

Aronson Sues Former Partners Over Noncompete Agreement

Aronson, of Rockville, Md., (FY12 net revenue of $50 million) has sued two of its former real estate partners to block them from taking Aronson clients and employees to form a competing firm, the Washington Business Journal reported.

Abba Blum and fellow partner Maral Nakashian notified the firm in June that they planned to leave to start a new firm in Montgomery County called MN Blum LLC, according to the complaint filed last month in Montgomery County Circuit Court.

During the 2011 reorganization of the firm, both Blum and Nakashian signed noncompete agreements, which bar them from competing against Aronson in the region or soliciting the firm’s clients and employees for two years after leaving the firm, according to Aronson’s complaint. The legal dispute revolves largely around the interpretation of the noncompete agreement, the newspaper reported.

Crowe Horwath, CHAN Healthcare Announce Partnership

CHAN Healthcare, a joint partnership of Ascension and Catholic Health Initiatives, and Chicago-based Crowe Horwath (FY13 net revenue of $598 million) have agreed to join together to provide audit and advisory services to the health care industry. “The similarity of our missions was a key factor leading us to this strategic business partnership,” said Chuck Allen, CEO of Crowe Horwath. “CHAN’s mission of providing quality services with integrity, innovation and knowledge sharing aligns ideally with our core purpose of ‘Building Value with Values’ for our people, our clients and our firm.”

As part of the transaction, CHAN Healthcare intends to retain its existing executive management team and key executives. The transaction is scheduled to close this fall.

P&N Tech Adds Jupiter Network as Partner

P&N Tech, an IT consulting division of Baton Rouge, La.-based Postlethwaite & Netterville (FY13 net revenue of $47.1 million) has added Jupiter Networks as a strategic partner. P&N Tech maintains partner status with several industry leaders, giving clients access to the latest industry news and developments, a broad network of technology support and resources, and competitive pricing. P&N Tech can serve state, local and education clients as an authorized vendor on Juniper’s WSCA state contract, the company said.

Bernard Robinson & Co. to Acquire Raleigh Firm

Greensboro, N.C.-based Bernard Robinson & Co. plans to acquire Furr & Newell of Raleigh, N.C.

“Entering the Triangle market has been part of a larger, long-term plan,” said Wade Pack, Bernard Robinson’s MP, to the Winston-Salem Journal. “The strength of the area and the way it is positioned for continued growth cannot be denied.” Partner Ron Kuyath will transfer to the Raleigh office.