Grassi Admits Rozleen Giwani as Partner

Rozleen Giwani

New York-based Grassi & Co. (FY18 net revenue of $63.6 million) announces that Rozleen Giwani has been admitted as a partner in its tax practice.

Drawing on her knowledge of grantor-retained annuity trusts, complex and simple trusts, gift tax compliance and estate tax law, Giwani will advise high-net-worth clients on tax savings vehicles, wealth preservation strategies, gifting and trusts.

Prior to joining Grassi, Giwani was a tax partner at a New York-based regional public accounting firm working largely in the financial services sector.

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Cherry Bekaert Acquires Tax Advantage Group

Richmond, Va.-based Cherry Bekaert (FY19 net revenue of $219.7 million) has announced the acquisition of the Tax Advantage Group (TAG) of Greenville, S.C. The consulting firm specializes in New Markets Tax Credit (NMTC) services.

TAG will now operate as Tax Advantage Group by Cherry Bekaert. Six professionals will join Cherry Bekaert’s credits and incentives practice.

TAG has secured over $1.7 billion in NMTC funding. TAG also offers compliance and asset management services through a series of proprietary processes. TAG professionals work with NMTC allocation applications, NMTC placement and deployment, and NMTC compliance and asset management services.

“The addition of TAG aligns with the firm’s strategic growth vision to enhance our value-added specialty tax offerings,” says CEO and MP Michelle Thompson. “TAG has a long track record of creating a substantial economic impact and making a difference for those that live and work in communities across the U.S.”

Tammy Propst, founder of TAG and now managing director with Tax Advantage Group by Cherry Bekaert, says, “This combination provides the opportunity to expand the economic impact we can have on the communities we care about.”

Cherry Bekaert says TAG has structured and facilitated NMTC investments that have created more than 14,500 direct jobs, served more than 489,000 clients, and helped create over 7.1 million square feet of new and improved commercial and industrial real estate.

Tax Advantage Group by Cherry Bekaert will operate from the firm’s Greenville office.

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Mark Baer to Take Reins as Crowe CEO Next Year

Mark Baer

Mark Baer

Chicago-based Crowe (FY19 net revenue of $951.9 million) has announced that firm veteran Mark Baer will be appointed CEO effective April 1, 2021, when current CEO Jim Powers completes his second and firm-mandated final term. The firm’s CEO succession plan includes a one-year transition period for Powers and Baer to work together.

Baer has been the MP of Crowe’s audit and assurance services area for the past five years. He has also served the firm as a member of Crowe’s firmwide management committee, CEO advisory council and partner screening committee. Baer worked with a Big 4 firm for 10 years before joining Crowe in 2001 and being admitted as a partner in 2003.

“Mark was chosen to lead our firm for many reasons but primarily due to his visionary mindset with a focus on our digital transformation, his track record of successful leadership of our audit and assurance practice and his commitment to audit quality,” says Dawnella Johnson, Crowe board chair. “He’s a strong communicator and inspirational leader, with a concentration on building talent and teams.”

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Carr Riggs & Ingram Merges In Barraclough & Associates

Enterprise, Ala.-based Carr Riggs & Ingram (FY18 net revenue of $306 million) has acquired Barraclough & Associates of Santa Fe, N.M.

Barraclough & Associates provides accounting, bookkeeping and tax services to individuals and businesses, including financial statements, budgets, cash flow management, audits, tax planning and new business consulting.

CRI has expertise ranging from basic accounting services, to tax review, compilation, preparation and general business consulting. They also offer tax services to corporate entities, individuals, and trusts with particular industry expertise delivered to health care, legal services, and the oil and gas industries. More than 1,800 CRI professionals serve clients across the South.

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Scandals Force KPMG, PwC to Repair Reputations

Two Big 4 firms are updating audit practices, adding technology and taking other steps to boost their reputations in light of major scandals last year.

KPMG and PwC have taken similar steps to address ethics lapses that resulted in millions of dollars in SEC fines, Bloomberg reported.

The changes are seen by some as improved assurance that financial reports are reliable, but critics believe a fundamental conflict still exists – the need to keep valuable audit clients while consolidation reduces the number of those clients.

KPMG, reeling from a so-called “steal the exam” scandal in which senior staff conspired with the PCAOB, made changes detailed in its most recent audit quality report. The scandal resulted in prison time for former staffers and a record $50 million settlement for extensive misconduct, as determined by the SEC. KPMG worked to find out which of its clients would be reviewed by PCAOB.

The reforms include:

  • Overhauling the audit leadership team
  • Moving internal inspections out of the audit practice
  • Revising performance evaluations and compensation
  • Updating audit methods
  • Introducing a cloud-based audit system that can examine a far larger amount of data
  • Increasing partner supervision and support
  • Improving methods of assessing risk, internal controls and estimates

KPMG is also exploring partner tenure, staffing levels and even the order in which the work is handled, Bloomberg reported.

“We know there’s really no silver bullet here,” says Jackie Daylor, KPMG’s national MP for audit quality and professional practice. She says she hopes the firm can be more proactive in providing extra resources or oversight.

At the same time, competitor PwC is addressing problems with following its conflict of interest rules. The firm agreed to a $7.9 million SEC settlement last year after providing services to audit clients that were not allowed, and for failing to inform the clients’ audit committees about the work.

The reforms include:

  • Requiring independence training for staff and partners
  • Adding reviews of contracts or proposals
  • Improving communications with audit committees and adding independence coaching before or during an audit
  • Adding an independent director to the firm’s governance board
  • Forming an advisory group on culture, risk management and other areas that impact audit quality.

KMPG followed suit on some of the changes, Bloomberg reported, adding independent directors to its board, hiring a chief culture officer and re-evaluating its corporate values.

Barbara Roper, director of investor protection for the Consumer Federation of America, says auditors must stand up to management of the companies they are auditing. The risk is losing that client, but it’s a risk firms must take.

Roper said they should be transparent about how they measure audit quality – from inspection deficiencies to independence to skepticism – and use those metrics when promoting and compensating senior leaders.

“It’s got to be more than lip service.”

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HORNE Admits Two to Partnership

Ridgeland, Miss.-based HORNE (FY18 net revenue of $91.3 million) has admitted Alethia Thomas and Lee Klein III into the firm’s partnership.

Thomas is a partner in government services. She is responsible for assisting government agencies with planning, managing and implementing programs funded by the U.S. Department of Housing and Urban Development’s Community Development Block Grants for disaster recovery. She has experience in project oversight, policy and procedure development, and compliance.

Klein specializes in the construction industry, providing assurance services, tax strategy and consulting services, and management advisory services related to bonding and job costing.

KPMG Names Rick Arpin OMP in Las Vegas

Rick Arpin

Rick Arpin has been named OMP of KPMG’s Las Vegas office and is now responsible for its strategic direction and market growth.

“Rick Arpin brings more than 25 years of strong leadership and experience providing audit services to public and private global corporations in a broad array of sectors, including gaming, hospitality, entertainment, retail and sports,” says Mark Hutchins, KPMG’s Pacific Southwest regional MP. “Rick’s deep commitment to serving our clients, developing our people and making a difference in the Las Vegas community makes him the perfect fit for the managing partner role.”

“I am honored and I look forward to working with our tremendous team of partners and professionals across the firm to help our clients adapt and thrive in today’s environment, whether driven by economic forces, changing customer patterns, disruptive technologies or the rapidly evolving regulatory environment,” says Arpin.

Arpin arrives at KPMG from NRT Technology, where he served as senior vice president of its interactive division. Prior to that, Arpin spent 16 years with MGM Resorts International, holding several key leadership roles.

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PwC Study: CFOs Anxious About Massive Coronavirus Impact

Fifty finance leaders in the U.S. and Mexico are very concerned that the coronavirus pandemic may lead to a global economic downturn, according to a new survey by Big 4 firm PwC.

That No. 1 concern, cited by 80% of those surveyed March 9-11, is followed by worries about consumer confidence (48%), financial operations (48%) and workforce productivity (42%). The CFO Pulse Survey also revealed that every CFO or finance leader says their business is impacted by the coronavirus.

“We don’t think it’s a time for companies, or others, to hold onto original plans for 2020,” says U.S. Chair Tim Ryan during a media briefing, according to CFO.com. “It’s clear that the virus will change the plans of almost every company.”

Companies that are ready will feel fewer impacts, he adds. “Those that have been working very hard to control things like cost structure and liquidity will fare better, and those that weren’t will be more adversely affected.”

Most of the respondents predict the crisis will impact their revenues and profits, with 58% expecting a decrease and while 40% saying it’s too difficult to assess now. The leaders are considering financial actions as a result of the outbreak, with 62% planning cost containment measures, 44% adjusting guidance and 32% deferring or canceling planned investments.

Optimism was reflected in the survey as well, with 66% of respondents saying “business as usual” could return to normal in less than a month if the COVID-19 were to end today. Another 24% said it would take up to three months.

“The longer-lasting effects of the outbreak on consumer habits are difficult to predict, but some companies are already updating strategies in the face of temporary – and potentially permanent – changes in some markets or business models,” the survey report says.

PwC is conducting biweekly surveys of finance leaders in the U.S. and Mexico. The next set of results will be released on March 30.

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BKD Cyber Offers New Virtual CIO Advisory Services

Springfield, Mo.-based BKD CPAs & Advisors (FY19 net revenue of $662.9 million) has announced that BKD Cyber has launched a new service to help financial institutions with IT issues.

With BKD Cyber’s Virtual Chief Information Officer Advisor Services (BKD vCIO), financial institutions can take care of their IT issues without hiring a full-time senior IT executive.

“Financial institutions are already under immense regulatory pressure to keep in compliance with changes to technology. Understanding that pressure and wanting to offer a solution that is affordable and has a demonstrable return on investment, we determined BKD vCIO could help bridge the gap between budget constraints and regulatory requirements,” says Cindy Boyle, a BKD Cyber partner.

The BKD vCIO team is experienced working in diverse IT environments and are knowledgeable about a broad range of IT core platforms and technologies.

Services include IT strategic planning, IT operational oversight, IT steering committee participation, IT testing preparation, and disaster recovery planning, testing and exam. Services are paid on a subscription basis.

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Prager Metis Woodbury, N.Y., Office Relocates to Larger Space

New York-based Prager Metis CPAs (FY18 net revenue of $98.2 million) has relocated its Woodbury, N.Y., office to a larger space in the Long Island town at 100 Sunnyside Blvd.

“This move demonstrates how the firm has successfully become a trusted advisor to businesses and individuals in Long Island,” says national MP Lori Roth. “The move to a larger office space was essential to accommodate this growth.”

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