PCAOB Sanctions Marcum LLP for Auditor Independence Violations

The PCAOB has settled disciplinary proceedings against New York-based Marcum LLP (FY18 net revenue of $549.7 million), Marcum Bernstein & Pinchuk and Alfonse Giugliano, the senior partner responsible for Marcum’s independence policies and procedures.

Marcum has a 50% ownership interest in Marcum Bernstein & Pinchuk, provider of SEC audit, accounting and consulting services to Chinese companies listed in the U.S. capital markets.

The violations involve the firms’ annual Microcap Conference and China Conference, which is designed to bring together investors and companies looking for investment. According to the PCAOB, “from 2012 through 2015, Marcum and two senior partners made public statements advocating the investment potential of the companies presenting at its annual Microcap Conference, 62 of which were the firm’s issuer audit clients.”

Also, in 2013 and 2014, Marcum Bernstein & Pinchuk advocated the investment potential of the companies participating in its China Conference, seven of which were the firm’s issuer audit clients. Giugliano approved Marcum LLP’s conference “without performing any substantial independence analysis,” PCAOB says.

This is the first time the board has sanctioned a CPA firm and its head of independence for publicly advocating its audit clients as investment opportunities. Another first is the PCAOB’s mandating of an independent consultant to evaluate auditor independence at the two firms.

The PCAOB orders say that success of the two conferences depended on companies perceiving them as good ways to connect with potential investors, and on potential investors perceiving them as a good opportunity to find high-quality investment opportunities. And yet, at the same time, the firms had issued audit reports on the financial statements of some of the presenters.

In the case of the MicroCap conference, the PCAOB says Giugliano approved the conference, and gave “limited advice” that Marcum should not be involved in company presentations or one-on-one meetings with investors. He also advised that Marcum should not make positive statements about individual presenting companies. PCAOB, however, says Giugliano failed to consider how an investor relations firm, brought in to market the conference, would tout the investment potential of the presenting companies as a group.

Marcum’s own public statements and marketing also included laudatory statements about the companies, as “some of the most promising emerging growth companies out there today,” in one example.

PCAOB alerted Marcum to possible independence issues with respect to the conference in 2015. The firm removed some positive language about the companies from promotional materials, added a disclaimer to its conference website and changed quality control policies. Marcum subsequently failed to evaluate the effectiveness of those measures, the PCAOB order says.

“As a result, Marcum failed to identify, evaluate or appropriately address a number of issues concerning the 2016 and 2017 conferences that, at the very least, raised questions about the firm’s independence.” PCAOB reported that Marcum sold one of its audit clients a “sponsoring” presenting company designation in 2016 and another client was sold a “premium” presenting company designation the next year without performing an independence review.

Additionally, Marcum provided press release templates to presenting companies, including the audit clients. “A number of Marcum’s issuer audit clients issued press releases that included Marcum’s suggested language, thereby using the conference’s reputation and association with their auditor to promote themselves to investors,” according to the PCAOB order.

Penalities are $450,000 for Marcum, $50,000 for Marcum Bernstein & Pinchuk and $25,000 for Giugliano. Marcum LLP and Marcum Bernstein & Pinchuk must additionally hire an independent consultant to review its policies, procedures, staffing and training related to auditor independence.

Andersen Welcomes Managing Director to National Tax Practice

Bryan P. Collins

San Francisco-based Andersen (FY18 net revenue of $281 million), formerly known as Andersen Tax, welcomes Bryan P. Collins as a managing director in the U.S. National Tax (USNT) practice in Washington.

He brings to the firm over 30 years of experience in corporate tax consulting including spin-offs, mergers and acquisitions, bankruptcies, consolidated returns, corporate restructurings and S-Corporations.

Previously, Collins served as a partner at Arthur Andersen, and, most recently, at a Big 4 firm. He also served in the Office of the Tax Legislative Counsel in the U.S. Treasury Department. For the prior 19 years, he was also an adjunct professor at Georgetown University Law School.

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Michael Rose Joins EisnerAmper as Partner

Michael Rose

New York-based EisnerAmper (FY19 net revenue of $380.6 million) announces that Michael Rose has joined the firm and been admitted as a partner in the process, risk and technology solutions practice. He will be based in the Philadelphia office.

Rose will specialize in enterprise risk management, IT, regulatory and compliance, internal audit and monitoring, and data governance. In addition, he will also be the practice leader for a new service offering related to compliance and monitoring for the Committee on Foreign Investment in the U.S. (CFIUS) transactions.

Jerry Ravi, partner and leader of the process, risk and technology solutions practice, calls CFIUS compliance an emerging area in the marketplace, “allowing us to build and leverage our existing compliance capabilities to offer valued solutions, including risk assessments and monitoring. We also plan to bring robust technology solutions to this area.”

Rose has more than 35 years of experience in governance/compliance, internal audit, internal controls, business process optimization, as well as IT audit and advisory, IT security and monitoring controls. He served as CEO and founding partner of a consulting firm where he was responsible for overseeing all functional aspects of firmwide operations in service areas such as enterprise risk management, fraud prevention and detection, corporate governance, risk and controls, business process improvement and IT security. He also held a position with a Big 4 accounting firm.

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RKL Launches ‘RKL Next’ To Help Clients Navigate Change

Lancaster, Pa.-based RKL LLP (FY18 net revenue of $82.5 million) has launched RKL Next, a suite of services designed to help organizations navigate challenges associated with growth and change.

RKL Next addresses needs in human capital, operations, technology, financial management and data analytics to move clients forward in a rapidly changing business environment.

“Many of our clients are increasingly feeling left behind given the rapid pace of change in our business environment,” says RKL CEO Edward W. Monborne. “Through RKL Next, we work alongside owners and management teams to uncover new ways of leveling up and advancing toward their goals.”

Some of the challenges include talent shortages, technology advances, globalization, big data and generational shifts in ownership.

With RKL Next, organizations can:

  • Align business objectives to talent and organizational strategy
  • Optimize accounting function to shift focus to growth and opportunity
  • Accelerate business transformation and growth through improved execution
  • Leverage data to make better, faster business decisions

“RKL Next is a unique model for our region,” notes partner and consulting services group leader Bethany Novis. “Instead of reaching up to the national level for this type of expertise at the expense of personalized service, small to mid-sized companies throughout the Mid-Atlantic can now tap into RKL Next for future-ready strategies delivered by a trusted local advisor.”

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PrimeGlobal Welcomes HoganTaylor, K·Coe Isom

PrimeGlobal announces that two firms have joined the North American region: Tulsa, Okla.-based HoganTaylor (FY18 net revenue of $47.3 million) and Salina, Kan.-based K·Coe Isom (FY19 net revenue of $69.4 million).

HoganTaylor is ranked No. 91 and K·Coe is No. 66 on the 2019 INSIDE Public Accounting (IPA) 100 listing of the largest accounting firms in the nation. Recently, HoganTaylor was named an “IPA Fastest Growing Firm” in North America.

“At HoganTaylor, we move forward optimistically and expect to be better tomorrow than we are today,” says Randy Nail, CEO at HoganTaylor. “This ‘get better’ philosophy has always been a part of who we are and what we do as a firm. It drives our desire to be leaders in the markets of those we serve and ensures that we continually improve upon our service to our clients and our communities. Our commitment to PrimeGlobal reflects our adherence to this philosophy.”

Michelle Arnold, PrimeGlobal’s Chief Regional Officer for North America, says, “As I have grown to know HoganTaylor and its people, it’s clear they are a wonderful addition to the PrimeGlobal family. The remarkable growth at HoganTaylor is testament to the talented professionals at the firm, and the leadership at the top.”

K·Coe Isom is a nationally known specialist in the food and agriculture industry. For over 85 years, K·Coe Isom has been working with operators that cover over 1 million acres of land and thousands of heads of livestock combined.

K·Coe Isom CEO Jeff Wald says, “Our customers and advisory teams will certainly benefit from the additional resources, international accounting best practices, and premium network of global contacts the association provides.”

Arnold says, “As leaders in the food and agriculture industry, K·Coe Isom offers PrimeGlobal member firms an excellent resource in an important and growing market. Our member firms and their clients will gain immediate benefits from the knowledge and expertise that the K·Coe Isom team maintains, and clients will gain the same advantage from the connections that KCoe now has with hundreds of high-quality firms worldwide.”

PrimeGlobal is comprised of approximately 300 successful independent public accounting firms in 80 countries.

Marks Paneth Announces New Service

Dean Nelson

New York-based Marks Paneth (FY18 net revenue of $136 million) has announced the addition of a new technology and digital services group.

Led by PIC Dean Nelson, professionals in the practice will focus on client needs in the areas of technology assessment, data analytics, enterprise integration and architecture, business process consulting, IT due diligence, cloud enablement and digital transformation plans.

Nelson brings decades of experience in developing and implementing digital solutions for for-profit and not-for-profit clients of national public accounting firms and major corporations.

“Expanding our service capabilities in the digital space supports our firm’s highest priority, which is helping clients achieve long-term business and personal success,” says MP Harry Moehringer. “Along with our tax advisors and attest professionals, Dean Nelson and his team will serve as key resources for clients as they continue to face evolving risks, regulations and compliance requirements.”

Based in the firm’s New York headquarters, Nelson will oversee a team of technology professionals who will advise clients across all of the geographies and industries that Marks Paneth serves, including manufacturing, construction, real estate, nonprofit, retail, restaurants and health care.

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BKR Welcomes GW Carter Ltd.

BKR International has accepted GW Carter Ltd. (GWC) of Edina, Minn., into its membership.

GWC was established in 2010 by Gary W. Carter, who continues to lead the firm. Carter and the staff of three specialize in tax services for foreign nationals and U.S. citizens abroad.

DS+B of Minneapolis remains the exclusive BKR representative in the Minneapolis market. The firm gave consent for BKR to engage in membership discussions with GWC, BKR says.

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Morison KSi Names New CEO

Memoria Lewis

Morison KSi, an international association of accounting firms, has announced that Memoria Lewis has joined its London-based global executive office as CEO.

Lewis has worked globally and held senior leadership roles with professional membership organizations, including the Institute and Faculty of Actuaries, the Institution of Occupational Safety and Health, and the National Landlord Association. She has been responsible for increasing engagement, services and overall members’ satisfaction. She has experience in working with volunteer boards and committees like those of Morison KSi.

“I am delighted to be the new CEO of Morison KSi and I look forward to driving the growth of the organization and building on our position as a leading, high-quality association of professional service firms,” Lewis says.

Morison KSi consists of 155 independent member firms across over 80 countries, representing a combined revenue of $903 million.

Seiler Opens Another Bay Area Office

Redwood City, Calif.-based Seiler (FY18 net revenue of $56.7 million) has opened a new office in Walnut Creek, Calif.

The announcement marks another milestone in the firm’s ongoing San Francisco Bay area expansion, coming one year after the establishment of a San Jose, Calif., office that now houses more than 30 employees.

“We’ve seen what a positive impact our location in San Jose has had by providing easier access for our staff and clients in the South Bay, as well as on our ability to attract and retain top-level talent. We are confident that our expansion northward will reap similar benefits,” says CEO George D. Marinos.

The new office, expected to serve as a home base for 45 employees, is located in Walnut Creek’s bustling Pacific Plaza, which is steps from the Pleasant Hill BART station and adjacent to Interstate 680.

Ron LaVelle will serve as PIC. He manages a team of more than 60 professionals in the firm’s family office practice and has played an integral role in the group’s expansion over the past six years, the firm says.

“As a lifelong East Bay native, I’m honored to have the opportunity to spearhead Seiler’s latest initiative, which will enable us to offer enhanced service to our clients north of San Francisco and a higher quality of life to our employees,” LaVelle says.

The firm, which specializes in high-net-worth clients, is a member of HLB International, a global network of independent accounting firms and business advisors.

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Moore Stephens North America Rebrands

Moore Stephens North America has become Moore North America.

The change is part of a wider rebrand of the Moore Stephens global accountancy and consultancy network, of which Moore Stephens North America is a regional member. The rebrand includes a new logo, visual identity and brand positioning.

Moore North America CEO Tony Szczepaniak says, “Our North American members have always exemplified the values of Moore Stephens, and this updated identity helps us better communicate those strengths. We present our new brand position – “Helping you thrive in a changing world” – to our members and their clients to ensure we’re doing our best to help them succeed today and tomorrow. It’s more than a brand…it is our message to the world that we’re here and we care.”

Moore Global CEO Anton Colella says the new brand means the following for clients: “In our changing world, business is increasingly conducted internationally and digitally. Everyone must adapt.”

He adds, “So as we look to the future, our brand honors our Moore Stephens heritage, reflecting the strengths that clients have, and can always expect from us: straightforward advice, high quality, and the passion we bring every day to our belief that relationships with clients are about much more than simply a job.”

Moore is an international network of more than 260 independent firms in 112 countries and a professional community of more than 30,000 people.

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