Blackman & Sloop Admits Ben Johnson

Ben Johnson

Blackman & Sloop of Chapel Hill, N.C., has admitted Ben Johnson as a principal.

Johnson joined the firm in 2012 and most recently served as a senior manager, providing trust and estate services to high-net-worth individuals. In his new role, he will continue to lead and expand the trust and estate department.

“Ben’s achievements over the years have been proof of his dedication to our clients,” says president and MP Andrea Woodell Eason. “He performs every task with a positive attitude that is contagious to those around him.”

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MNP Acquires Outsourced IT Company Next Digital

Calgary, Alberta-based MNP is set to acquire outsourced IT service and support company Next Digital effective Aug. 1.

Focusing on areas in Alberta and western Canada, Next Digital’s services include managed IT, hardware and software procurement, IT project management, data protection and cloud services. Next Digital’s Andrew Jackson, Shawn Kubiski and John McLaughlin will join MNP as partners.

“The needs of Canadian organizations are quickly evolving in this dynamic environment, and we are constantly working with our clients to better understand how we can best support them,” says Sean Devin, national leader of MNP’s technology solutions practice. “This merger reflects our commitment to always look for new ways, including the use of new technologies, to help our clients reach their full potential.”

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U.K. Accounting Watchdog Orders Big 4 to Split Consulting and Auditing Business

In light of numerous high-profile accounting scandals in the U.K., the Financial Reporting Council has ruled that the Big 4 must separate their audit functions from the rest of the firm.

The FRC, the U.K.’s accounting watchdog, decided Monday that the Big 4 have until June 2024 to make the move, with Oct. 23 of this year as the deadline for submitting a plan to do so.

The move, in response to concerns about a real or perceived conflict of interest, aims to draw a sharp line between consulting with clients versus overseeing the accuracy of a company’s financial records. Consulting revenue has grown, while audit revenue has shrunk to about one-fifth of total firm revenues of the Big 4, according to CNN London. Some fear the shift is dimming the focus on high-quality audits.

The FRC declared that profit payments to audit partners “should not persistently exceed the contribution to profits of the audit practice.” Additionally, auditors “should work for the benefit of shareholders of audited entities and wider society” and were “not accountable to audited entities’ executive management.” An independent audit board will oversee the practice, according to The Financial Times in London

Some observers say the reforms aren’t enough, according to two people who spoke to the newspaper. “It is a semi-split that is unlikely to be the last reform that will be needed,” says Erik Gordon, professor at the University of Michigan. One senior executive says, “If this is held out as the solution to audit quality then we’re all kidding ourselves.”

The Big 4 are the only firms impacted by the rule because they conduct more than 95% of the audits of the top 350 companies in the London stock exchange (FTSE 350), according to the FRC. All the Big 4 firms expressed support for the move in prepared statements and called for even more stringent reforms.

Some recent scandals include:

  • EY’s audit of Wirecard, a payment processing company in Germany, which filed for bankruptcy following discovery of a $2 billion hole in its accounts. The FRC says its reform measure was unrelated to Wirecard, as the move had been in the works previously, CNN London reports.
  • KPMG’s audit of Carillion, a construction company that went bankrupt in 2018. The firm was also investigated for its failure to detect corruption by South Africa’s Gupta family, which has close ties to President Jacob Zuma.
  • PwC’s audit of India-based Satyam Computer Services, which falsified its accounts. PwC was banned from auditing public companies there from 2018 to 2020.
  • Deloitte’s audits of collapsed furniture retailer, Steinhoff, and the lender African Bank, also in South Africa.

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Dannible & McKee Admits Mickel Pompeii

Mickel Pompeii

Syracuse, N.Y.-based Dannible & McKee has admitted Mickel Pompeii as a partner in the firm’s tax practice.

Pompeii has been with the firm since 2009, working in the areas of individual, partnership and corporate tax planning, financial planning, multi-state taxation, research and development, and international taxation and reporting.

“Mickel has consistently excelled in terms of service excellence, contribution to the firm’s growth, investment in people and expert knowledge,” says MP Michael Reilly. “We are very pleased to welcome him into the partnership and look forward to the future.”

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MPs Take Slow, Safe Approach to Reopening Offices With Dozens of Data Points to Consider

As firm professionals have adjusted – first to the shock of the pandemic and then to working from home – another anxiety-ridden shift is beginning as states slowly allow returning to work.

Firm leaders interviewed by IPA are in no rush to unlock the doors. They are giving staff the option to come back when they are comfortable to do so, while weighing the risks of reopening and consulting guidance from numerous sources: their own HR experts, legal counsel, and state and federal health officials. Some are contacting vendors to conduct temperature checks, hiring sanitation crews and planning for social-distancing safeguards that were unimaginable even a few months ago.

Here are some of their comments:

  • A survey of staff by Miami-based MBAF, an IPA 100 firm, shows close to half are so concerned about their health that they want to continue to work from home at least through the summer. To avoid staff from working too close together when the office reopens, about 40% of the 30,000 square feet will have to remain unoccupied, says MP Tony Argiz.
  • Lou Grassi, MP of New York-based Grassi, says the IPA 100 firm won’t push employees to come back to the office immediately. Staff were invited to return starting June 15, with plans to sanitize offices weekly and implement six-foot distancing and other precautions. Grassi says staff will be encouraged to give feedback. “If there’s something about this that doesn’t make sense, we need to know.”
  • At Atlanta-based Aprio, an IPA 100 firm, Larry Sheftel, vice president of human resources, says the firm has contacted vendors about on-site temperature checks, and he expects far more remote working than pre-pandemic times. He says firm leaders are well aware that many staff will likely feel nervous about coming back. “Things may not really approach normal until the fall.”

Remote work under an extended lockdown has its own stresses and many will welcome their cubicle like an old friend, but even so, employees who walked out the door in March are different people now.

Todd Nordstrom, author, public speaker and coach, writes that some will be fearful of their health; some will be grateful for the care and concern they’ve been shown; some will be raring to move forward; others will be thinking that work isn’t as important as they once believed.

“We must realize that we don’t yet understand the emotional impact this pandemic has created in the hearts and minds of employees. And, we’ll never know unless we ask,” Nordstrom says in Forbes magazine.

Here are some of the considerations, compiled from legal and business publications:

  • Remember that at a bare minimum, follow guidance from the Centers for Disease Control, World Health Organization, Occupational Safety and Health Administration, and state and local governments. Rules are constantly changing and may not be consistent.
  • Create a re-entry task force to write interim policies until the pandemic is over, including disciplinary actions for violations of policies, including frequent hand washing, sanitizing frequently touched surfaces, wearing masks, maintaining social distancing and the like. Even-handed, consistent and thoughtful are the watchwords here. Don’t wing it, the National Law Review
  • Ask employees whether they have been exposed, have a sick person at home, or are experiencing COVID-19 symptoms, such as cough, shortness of breath, chills, muscle pain, sore throat, or loss of taste and smell.
  • Supply paper towels instead of hand dryers because the jets can disperse virus particles, the Harvard Business Review reported. Disable water fountains and ice machines. Close common areas altogether rather than enforce social distancing.
  • Make a plan for notifying employees if they have been in contact (within 6 feet) of a coworker who has tested positive. Attorneys say the infected staffer should not be named; otherwise employers are in violation of federal privacy laws.
  • Think about how to approach concerns from employees about actions of their coworkers who congregate in crowds outside work.
  • Review time-off policies, including sick leave, and revamp business continuity plans to deal with the next crisis.

“It will be a fragile environment, so you want to be really deliberate and consistent in how you approach things,” says Kent Lambert, managing shareholder in the New Orleans office of Baker Donelson, on the legal news website Lexology.com. “Try to be responsible and fair and even-handed and put safety first. If you approach things in that way, you’ll be in good shape.

Other resources:

Armanino COVID-19 Tracking Tool Moves to Phase Two

Following an initial launch in May, San Ramon, Calif.-based IPA 100 firm Armanino LLP has rolled out an upgraded iteration of its COVID Recovery Tracker tool, which captures county-by-county COVID-19 case trends in real time to get sense of where there are increases in infections versus areas in decline or holding steady. Phase two adds pertinent foot traffic, home versus away and transportation data to the tool, providing users with a more detailed view of rolling new cases, state guidance updates and traffic patterns as parts of the country reopen for business.

Foot traffic data is measured by location type, including everything from airports and hotels to office spaces and child day cares to bars, restaurants and retail spaces. The home versus away tracker uses GPS ‘pings’ from anonymous mobile devices to measure if people are staying at home (the nighttime location of the device), or when out, how long they are away from home. And the new transportation tracker uses driving, walking or mass transit data to detect trends in how people are moving from place to place.

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Mix of Optimism, Pessimism as CFOs Face Reckoning of Pandemic

CFOs expect a slow to moderate recovery from the economic shock of the pandemic according to the results of a COVID-19 survey conducted by Big 4 firm Deloitte. The survey compiled the responses of CFOs representing 118 large North American companies polled between June 17 and June 19, and found that over half don’t expect their companies to reach pre-crisis operating levels until 2021, with nearly 20% expecting 2022 or later.

In addition, almost three-quarters of respondents (72%) say they are currently operating at or above 80% capacity. The proportion of CFOs who say none of their workers are working at less than half capacity rose from 26% in Deloitte’s April survey to 37% now, but one-third again say at least 20% are at less than half capacity. CFOs in the retail, wholesale and services spaces indicated the strongest challenges.

CFOs are also mostly optimistic about their ability to operate effectively, safely and profitably as the U.S. economy continues reopening, even as the virus continues to spread in many parts of the country. They feel less optimistic about the ability of the U.S. economy and their companies to return to pre-crisis performance levels. Responses are mixed when it comes to staffing and liquidity – only 30% of respondents expect a return to normalcy by the end of the calendar year, while 50% peg 2021 and 20% expect a return in 2022 or later.

In terms of focus, some CFOs are honing in on the here and now while others are planning for days to come, with 47% of respondents adapting their company to maximize mid-crisis performance and 34% attempting to evolve their business model for the post-crisis future.

More news from Deloitte

IPA Pulse Survey: Compensation, Cuts and the Crisis

IPA’s latest pulse survey tapped the knowledge of nearly 150 MPs in late May on several key issues related to the COVID-19 pandemic.

One of the topics of the pulse survey covered staffing and compensation and what moves, if any, firms had made (or were planning to make) with respect to layoffs, pay cuts and/or partner draws. And while many firms indicated they planned to hold steady in these areas, others were clearly taking action to stem some of the current or anticipated economic repercussions of the pandemic.

For example, only 5% of survey respondents indicated they had instituted across-the-board staff pay reductions as a direct result of the crisis – though the percentage was much higher among firms above $125 million. Meanwhile, 19% of firms had made pandemic-related layoffs (the percentage increased to 43% for firms between $75 and $125 million, and 31% for those above $125 million), but these cuts amounted to less than 10% of the staff for 90% of those respondents making cuts. And while the split among all respondents on partner draw reductions and/or adjustments to partner compensation schedules was right around 50-50, firms above $40 million were far more likely to have taken this route.

In terms of what lies ahead, most MPs seemed optimistic (at least back in late May) that they wouldn’t need to impose pay cuts or layoffs in the coming months, though the outlook among respondents in the $40-$75 million range wasn’t nearly as positive, with 47% in this group saying the possibility was either very likely or somewhat likely.   Catch up on more insights from this IPA Pulse Survey:

Shrinking the Physical Office Footprint

An Interesting Interlude for Internships

A ‘New Normal’ at the Office

Hiring on Hold?

Armanino Teams With Tugboat Logic on Security Audit Process

San Ramon, Calif.-based Armanino LLP, an IPA 100 firm, is partnering with security assurance company Tugboat Logic to provide an integrated, streamlined and expedited security audit process.

The goal is to better ensure the required independence between the entities conducting audit readiness and audit examination in third-party attestations such as SOC 2 and ISO 27001 by offering a coordinated process that allows for a smoother handoff between readiness and the examination, while also maintaining the integrity of checks and balances.

Tugboat helps organizations with the “readiness phase” of the audit process with an automated risk assessment survey, a centralized operations readiness dashboard for policies and controls and a suite of third-party integrations and modules that continuously gather evidence in support of the audit. Armanino then reviews this information and collaborates with the client remotely via an integrated platform to clarify and confirm what evidence has been submitted, what evidence was accepted and what evidence tasks require more information.

“One of the main factors that delay audits is our clients suffering in silence since they may not understand some of the evidence requests from the auditor,” says Armanino partner Liam Collins. “With Tugboat Logic, Armanino auditors can prevent this by having a real-time dashboard of the audit progress, and a simple way for our clients to ask questions to our auditors when they are unsure of a request. This helps speed up audits by up to 50%.”

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New Study Examines Why Belonging at Work is Crucial During Crisis

New research from Center for Talent Innovation points to stark differences in workplace experiences along lines of race, gender, and ethnicity, and calls upon companies to make dramatic change.

At a time when the pandemic, economic fallout, and social uprising have magnified inequities in American society, new research from the Center for Talent Innovation (CTI) calls upon business leaders to create workplace cultures that drive a sense of “belonging” for all employees.

The new report, The Power of Belonging: What It Is and Why It Matters in Today’s Workplace, measures employees’ sense of belonging and finds that White men score higher than female employees and employees of other races or ethnicities. Among those groups, Black women and Asian women score the lowest.

The nationally representative survey of 3,711 college-educated professionals was fielded in February and included a scale with 24 questions used to calculate a “belonging score” ranging from 0 to 10. Respondents’ median belonging scores were analyzed across a broad range of demographics including gender, race/ethnicity, generation, LGBTQ identity, and status as a parent, veteran, or immigrant. Belonging was defined as being 1) seen for your unique contributions; 2) connected to your coworkers; 3) supported in your daily work and career development; and 4) proud of your organization’s values and purpose. The report offers data-backed solutions for what organizations, leaders, managers, and colleagues can do to promote a workplace culture of belonging for all.

Belonging scores correspond with positive career indicators. Professionals in the highest quartile of belonging scores are far more likely than those in the lowest to say they are very engaged at work (97% vs 54%), very loyal to their organization (93% vs 35%), intend to stay at least two years (88% vs 61%), and would recommend their company as a good place to work (71% vs 17%). A lack of belonging is associated with negative outcomes. Those in the lowest quartile of belonging scores were over four times as likely to say they felt “stalled” in their careers compared to those in the highest quartile (47% vs 11%).

“Companies are being called upon to dismantle bias within their organizations, and that means they need to look inward at their corporate cultures to understand what makes it so hard for certain groups to advance,” says Lanaya Irvin president of CTI.  “Belonging will become increasingly relevant in the aftermath of global pandemic, economic disruption and social unrest. This report gives corporate leaders a path forward toward creating inclusive cultures where all employees feel seen and heard and respected in their authentic identities and across lines of difference.”

“To recover from our current global crises, companies need employees who are engaged, loyal, and proud to work for their companies,” says Julia Taylor Kennedy, CTI executive vice president and co-lead researcher on the report. “That’s what you get when employees feel they belong. Inaction on systemic racism and the disproportionate impacts of COVID will damage belonging at companies, when it’s needed most.”

A follow-up survey in May revealed stark differences of the COVID-19 crisis across racial groups in the trauma employees of color are bringing into the workplace. Black professionals were more than five times as likely to have lost a family member as a result of COVID-19 as their White colleagues (11% vs 2%), and Latinx employees were four times as likely as their White colleagues to have lost a family member as a result of COVID (8% vs 2%). Asians in our sample were twice as likely as their White colleagues to have lost a family member to COVID (4% vs 2%). In addition, more than one in five Asian women (21%) have changed their behavior outside of work to avoid racial harassment.

“There’s potential for real, systemic change right now, as the systems and structures that promote inequity get torn down and rebuilt,” says Pooja Jain-Link, executive vice president and co-lead researcher. “Belonging is crucial to the creation and forming of new systems. We need to feel like we belong to each other and belong to this new world.”