Nathan Wechsler & Company Announces Merger with Thomas S. Bates

Concord, N.H.-based Nathan Wechsler & Company (FY18 net revenue of $9.2 million) has announced a merger with Thomas S. Bates of Keene, N.H.

“I have a great deal of respect for the practice that Tom built over the years. The firm’s strong ethical foundation, quality work and loyal clients make them a fantastic fit for Nathan Wechsler,” says managing director Oreste “Rusty” Mosca. “Our decision to merge was based on a variety of factors, not the least of which is our firms’ similar service philosophies.”

The merged practices will retain the name Nathan Wechsler & Company. The Thomas S. Bates, CPA office will move into Nathan Wechsler’s Keene, N.H., location.

“We view this merger as the first step to continued success,” says Tom Bates, founder of the firm. “Our main goal as a firm is to provide exceptional client service. Collectively, we believe this move enhances our ability to provide efficient, timely, and accurate services and guidance.” His firm serves individuals and businesses in and around Keene and provides forensic accounting and fraud examination services.

Nathan Wechsler & Company is a full-service accounting and tax firm with three offices and over 40 professionals offering a broad range of services. In addition to traditional tax and accounting engagements, the firm serves clients with business valuation services, management consulting, and employee benefit plan audits.

Anchin Names Russell Shinsky as Co-Managing Partner

Russell Shinsky

Russell Shinsky

New York-based Anchin Block & Anchin (FY18 net revenue of $102 million) announced that Russell Shinsky has been elected as Anchin’s co-MP, and will take the reins next year.

Shinsky will serve alongside current MP Frank Schettino, who is scheduled to retire Sept. 30, 2020. Shinsky will become the seventh MP in Anchin’s nearly 100-year history, and like Schettino, has spent his entire professional career at the firm.

Shinsky has been with the firm for 27 years and has served as a member of Anchin’s executive committee since 2015. He has been the practice group leader of the firm’s services group and leads the firm’s assurance practice. He has built a strong reputation for the firm among industry stakeholders, particularly in legal services, and has been instrumental in consulting with law firms on traditional accounting and tax matters, as well as improving operational aspects of their businesses, the firm announced

“I am looking forward to working alongside Frank during the next year to shape how we will continue to deliver outstanding service to our clients, helping them grow and achieve their objectives in an increasingly complex landscape. I have always deeply valued the people, unique culture and history of our almost 100-year-old firm, and am honored to continue that tradition of excellence,” Shinsky says.

Schettino will work with Shinsky and the other members of the executive committee on firm strategy, client service and operations decisions. “In this period of rapid industry change, Russell sees the inherent challenges, yet more importantly, the opportunities for growth,” Schettino says.

More news from Anchin Block & Anchin

Atlanta-based Porter Keadle Moore Joins Wipfli

Milwaukee-based Wipfli LLP (FY19 net revenue of $362.5 million) announces that Porter Keadle Moore (PKM) of Atlanta joined the firm Oct. 1.

“This transaction provides Wipfli the opportunity to establish a foothold in the Southeastern United States, a key geographic priority in our firm’s growth strategy,” says MP Kurt Gresens. “The addition of PKM, a firm with a long history in the region and an exceptional track record in the industry related to quality and client service, will uncover many opportunities for additional growth as we move forward. In addition, through this transaction Wipfli will have an even greater depth and breadth of services and resources in the financial services industry, helping our firm to become a stronger leader in serving businesses in the industry across the nation.”

Founded in 1977, PKM provides accounting, tax and advisory services to hundreds of public and privately held businesses and enterprises, with strong focuses on the financial services, insurance, technology and craft brewing industries.

PKM MP Phil Moore says the union with Wipfli means clients can access a broader range of resources. “In addition, this transaction will help our firm to continue to attract and retain top talent due to our enhanced ability to provide additional training and professional development opportunities in more specialized areas to our staff.”

As part of this transaction, 70 PKM professionals, including nine partners, have joined Wipfli, which now has about 2,400 associates in 49 offices.

More news from Wipfli LLP

IPA INSIDER: September 2019 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of September.

  1. INSIDE Public Accounting Releases Annual Ranking of the Top 400 Accounting Firms
  2. CohnReznick Adds Eight Team Members to Restructuring and Dispute Resolution Practice
  3. INSIDE Public Accounting Unveils The 2019 Best of the Best Accounting Firms
  4. IPA Announces the IPA 100 Fastest-Growing Firms
  5. DHG Welcomes Gareth Montague-Smith as Partner
  6. BKR Survey: Full Adoption of Remote Work Slow, but Possible
  7. Report Criticizing PCAOB At Odds with New Survey
  8. Eide Bailly Plans Big Expansion into California With Merger
  9. IPA Vendor Spotlight On . . . LeaseCrunch
  10. BDO Makes Inroads in Seattle Area with Peterson Sullivan Merger

BPM Adds Security Tech Company

San Francisco-based BPM LLP (FY18 net revenue of $99.5 million) has added Adhere Inc. of Fairfield, Calif., a security technology company, to its advisory practice.

Adhere guides businesses of all sizes through their IT security operations and compliance requirements. Adhere monitors IT security controls through its Security Operations Center and consults with clients to develop their security processes and controls.

Sarah Lynn

“Our experts have hands-on expertise shepherding organizations in making the best possible decisions, whether they are in the preparation or the remediation stage,” says Sarah Lynn, CEO of Adhere. Lynn is joining the firm as partner. About 10 employees will join BPM.

Nick Steiner, who leads BPM’s advisory practice group, says data security and compliance is a top priority for clients. “With increasing sensitivities around keeping data safe and the growing demands of meeting compliance standards, businesses must remain vigilant against potential threats and the latest protocols. Our new team brings a wealth of industry knowledge and shares our dedication to tailoring security solutions for organizations everywhere.”

BPM’s combination with Adhere comes after several strategic expansions. It recently combined with Kramer & Olsen Accountancy Corporation of Santa Ana, Calif., Croce & Company of Stockton, Calif., CPA Consulting of Bellevue, Wash., and the HR consulting practice of Options4Growth in San Francisco.

More news from BPM LLP

IPA Vendor Spotlight On . . . LeaseCrunch

Name: Ane Ohm

Ane Ohm

Ane Ohm

Company: LeaseCrunch

Title: CEO

How is LeaseCrunch impacted by delaying the new lease standard implementation for non-public companies?

Interest in our lease accounting software hasn’t slowed. CPA firms are successfully using the software to work through implementations for both public and privately held organizations, with many more firms telling us they’re working to keep momentum going with clients despite the delay.

To help those firms encourage clients to start now – rather than facing a time crunch again next year – we’re actually offering a 2-for-1 pricing promotion until the end of 2019.  

What are some lessons learned by public companies that have already adopted the standard?

There are many. Here are the top ones that come to mind:

  • Completeness. Properly identifying all leases across all locations is more complicated than many expected. There are so many things to consider about each lease, including lease and non-lease components, lease and renewal term, common area maintenance, embedded leases, and more.
  • Timeframe. Due to the complexity of the standard, including the process of abstracting data from leases, I’m hearing the entire implementation process is taking about three times longer than most organizations anticipated.
  • Impact to Users of Financial Statements. Don’t forget about potential impacts to banking relationships. Now that you’re adding lease liabilities to your financial statements, it could impact loan covenants. The best approach is communicating with financial institutions early in the process.
  • Practical Expedients. The FASB provided a number of practical expedients and we strongly encourage organizations to adopt as many as feasible. It will simplify the entire implementation and adoption process.

I’ve always successfully managed my leases in a spreadsheet. Can I do the same for the new lease standard?

Unfortunately, no – at least I would strongly recommend against it. And I’m not just saying that as the CEO of a lease accounting software platform. I’m also a former PwC auditor and I can’t imagine having to audit all those complex calculations in a spreadsheet. 

Here are the main reasons that spreadsheets simply aren’t feasible for implementing the new lease standard and managing your leases thereafter:

  • Complex calculations: There are many complicated components of the new lease standard, particularly with the quantitative footnote disclosures that include a weighted average discount rate and weighted average remaining term.
  • Navigating nuances: Another benefit of using software over spreadsheets is the guidance you get to add context or explain more complicated parts of the new standard. Spreadsheets don’t offer that assistance.
  • Enormously time-consuming: It is much more time-consuming to manage the new lease standard in a spreadsheet as it has no pre-built calculations or workflows. 
  • Version and calculation control: When multiple departments and people are responsible for lease data, it can be difficult to share spreadsheets and have confidence that everyone is using the latest version.
  • Lack of validation or security: A spreadsheet has no built-in data validations and minimal security options.

How does LeaseCrunch work?

LeaseCrunch is an easy-to-use lease accounting software built specifically to simplify the new lease standard. We designed it to be both affordable and scalable for CPA firms to use with clients of all sizes. Features include:

  • Simplified policy election templates
  • Lease classification and lease term wizards
  • Easy, quick data entry
  • Tool tips to guide the user through the process and answer questions about the new standard
  • Error- and worry-free calculations (verified by an Agreed-Upon Procedures report)
  • Automated journal entries and qualitative footnote disclosures

What are people saying about LeaseCrunch?

Here is a case study from a regional bank and another one from an IPA 100 CPA firm. Other clients and observers have shared the following with us:

  • “Very user-friendly.”
  • “This looks like what we need.” 
  • “I close my eyes and this is what I picture when it comes to lease accounting software… extremely intuitive.” 
  • “This is outstanding, very impressive.”
  • “You just relieved a lot of my stress.”
  • “We wanted a software solution to make our life easier and someone we could lean on for help… LeaseCrunch fits that bill.”

SEC Charges PwC for Improper Professional Conduct, Violating Auditor Independence

The SEC has charged Big 4 firm PwC with improper professional conduct in 19 engagements and for conducting non-audit services for 15 audit clients, which is prohibited. PwC will pay over $7.9 million to settle the charges.

The SEC also charged PwC partner Brandon Sprankle with causing the firm’s independence violations. PwC and Sprankle consented to the SEC’s order without admitting or denying the findings.

Sprankle agreed to pay a $25,000 penalty and to be suspended from appearing or practicing before the SEC, with a right to reapply for reinstatement after four years. PwC agreed to be censured and to pay disgorgement of $3.8 million, plus prejudgment interest of over $600,000 and a civil penalty of $3.5 million.

PwC also agreed to perform a detailed review of its quality controls for complying with auditor independence rules and for evaluating its non-audit services.

The SEC found that the non-audit services included engaging in management functions and designing and implementing software relating to an audit client’s financial reporting. Also, the firm failed to notify the PCAOB, which requires the firm to inform the audit committee of the scope of work, discuss the potential effects on independence, and document the substance of the independence discussion.

According to the order, PwC’s actions deprived numerous audit committees of information necessary to assess the firm’s independence.

“Auditors play a fundamental role in protecting the reliability and integrity of financial reporting and must ensure that non-audit services do not come at the cost of their independence on audits of public companies,” says Anita B. Bandy, associate director of the SEC’s enforcement division. “PwC repeatedly provided non-audit services without having effective quality controls in place for monitoring whether the services impaired its independence on audit engagements and were properly disclosed to audit committees.”

Report Criticizing PCAOB At Odds with New Survey

A report bashing the PCAOB for lax oversight of the Big 4 appears to contradict recent poll results reported by the Center for Audit Quality (CAQ).

CAQ said Sept. 18 that 83% of U.S. retail investors are confident that public company auditors are effective in their investor protection roles, according to the 2019 Main Street Investor Survey.

“Healthy investor confidence is critical at all levels, from the biggest asset managers to people saving in their 401(k),” says CAQ Executive Director Julie Bell Lindsay in a statement. “Our survey shows that retail investors in the U.S. have healthy and consistent levels of confidence in both our capital markets system and in the public company auditing profession.”

The survey polled U.S. retail investors with at least $10,000 in the capital markets through retirement plans or direct holdings. The findings say that 76% have confidence in U.S. companies that are publicly traded, and that 78% express confidence in audited financial statements, up three points from 2018.

By contrast, the Project on Government Oversight (POGO), an independent watchdog, said in a report earlier this month that its analysis of PCAOB annual inspection reports showed the board has been too lenient and has done “a feeble job” policing the Big 4.

POGO says that only 18 enforcement actions resulted from 808 cases in which the Big 4 performed audits that were “so defective that the audit firms should not have vouched for a company’s financial statements, internal controls or both.” The report says, “It has taken disciplinary action over only a tiny fraction of the apparent violations its staff has identified. Meanwhile, the financial penalties it has imposed pale into insignificance compared to the fines it apparently could have imposed.”

In its 16-year history, only $6.5 million in fines have been issued when it could have fined the audit firms more than $1.6 billion, according to the report, How an Agency You’ve Never Heard of is Leaving the Economy at Risk.

“It’s unacceptable that the agency is taking such a light-handed approach in holding these large audit firms accountable,” POGO’s executive director, Danielle Brian, said in a news release, adding, “By failing to hold the Big 4 accountable, the board is putting all Americans’ financial futures in jeopardy.”

RSM Joins Forces with Gregory Sharer & Stuart

Chicago-based RSM USA LLP (FY19 net revenue of $2.4 billion) is acquiring Gregory Sharer & Stuart of St. Petersburg, Fla., on Oct. 1.

RSM announced that the firms have signed an agreement for RSM to acquire substantially all the assets of GSS, subject to certain terms and conditions.

This transaction expands RSM’s presence in the area, where RSM has a Tampa Bay office. The acquisition adds 60 professionals and an office in downtown St. Petersburg. It also improves the RSM’s growing audit, tax and consulting practices through the deep knowledge and experience of GSS, especially in real estate and construction, insurance, not-for-profit, manufacturing and health care.

Joining RSM as partners are GSS Office Managing Shareholder Jim Newman, the firm’s executive leadership committee and other shareholders, and their team will transition to RSM upon closing. Together, the firms will offer RSM’s full line of services.

“We have worked with the outstanding team at RSM over the past five years as a member of the RSM US Alliance, and we are excited to take this important step forward by joining RSM,” says Newman. “Our firms share a client-centric approach to doing business, and the same values, culture and people-focused philosophy. We especially look forward to continuing to provide the same outstanding service to our GSS clients, while offering a broader array of solutions – new consulting solutions in particular – to meet their ever-changing business needs. This transaction will also provide our professionals with expanded growth and development opportunities.”

“We are pleased to grow our presence in the vibrant Tampa Bay market with the addition of an outstanding firm and team,” says Joe Adams, MP and CEO of RSM US.

More news from RSM

Lawrence, Kan., Office of Mize Houser & Company to Become New Firm

Topeka, Kan.-based Mize Houser & Company (FY18 net revenue of $31.9 million) announced that its Lawrence, Kan., office will become Kindred CPA, a separate, independent firm on Oct. 1.

The change, the firm says, is the result of strategic discussions about how to best focus resources among practice areas.

The new firm will be owned and directed by Ken Hite, a shareholder with Mize Houser since 2011. Kevin Kressig and Abram Chrislip will also be directors of the new firm, and professionals and staff of the Lawrence office will transition to Kindred CPA as well.

“Strategically, the Lawrence market for tax and accounting services is unique when compared to our Overland Park and Topeka locations,” says James Hilbert, managing shareholder for Mize Houser. “Serving these clients takes a different approach and leadership to deliver services to a more traditional small business and individual income tax client base.”

“We’re grateful to all the clients we’ve served over our 67-year history of providing accounting, tax and consulting services to the Lawrence community,” Hite says. “Our name is meant to convey the goal to be of kindred minds to those we serve, sharing the worthy goals of our clients, co-workers and the community.” The office location will remain the same.