Settlement Reached in Andersen Tax Trademark Dispute in California

Andersen Tax has settled a lawsuit with MoHala Enterprises, a Monterey, Calif., limited liability company, which was accused of six counts of state and federal trademark infringement, counterfeiting and unfair competition.

The suit, filed March 13 in U.S. District Court in San Francisco, said MoHala worked in concert with French businessman Stéphane Laffont-Réveilhac, who identified himself as global MP of Arthur Andersen in a March 1 LinkedIn post and contended that the firm had been “reconstituted.” Also named in the suit are Veronique Martinez and Arthur Andersen & Co., a French company that is similar to an LLC in the U.S.

According to the settlement, MoHala was part of a network of individuals and entities recruited by Laffont-Réveilhac and Martinez to become affiliates of Arthur Andersen & Co.

Andersen Tax announced Wednesday in a release that the specific terms are confidential, but “MoHala Enterprises d/b/a Sundial Consulting has agreed never to use the terms ‘Andersen’ or ‘Arthur Andersen’ to promote its professional services consultancy, and has withdrawn its membership as an affiliate of the French society calling itself ‘Arthur Andersen & Co.’ Sundial Consulting will also be dissolving Arthur Andersen LLP, a California limited liability partnership it previously formed for purposes of serving as the U.S. member and affiliate of this French society.”

In attempting to reach MoHala’s attorneys, IPA reached out to Oscar Alcantara, Andersen Tax managing director and associate counsel, who says in an email, “Our adversary has not designated counsel in the U.S. case.”

Andersen Tax says it owns multiple trademark registrations incorporating the name Andersen for tax and business consultation services around the world.

Mark Vorsatz, Andersen Tax CEO, told IPA last month that Laffont-Réveilhac met with an Andersen Tax managing director in 2015 and proposed a “sale of defendants’ brand portfolio” in exchange for “an extraordinarily large sum of money.”

“We have no interest in paying them anything for anything,” Vorsatz said at the time, adding that Andersen Tax owns the trademark in over 90 counties, including the U.S. and the European Union. Laffont-Réveilhac has twice been denied use of the trademark in court and Andersen Tax is intent on using all legal avenues to end the matter, Vorsatz said.

Laffont-Réveilhac has continued to post on LinkedIn, most recently outlining “Arthur Andersen’s European Strategy.” He wrote April 12 that “we strive for a rapid increase in power, while taking all the time necessary for a rigourous selection of our future affiliated members for a network of first quality.”

See entire post here.

IPA Spotlight On … Jodi Ann Ray, Texas Society of CPAs

Name: Jodi Ann Ray

Jodi Ann Ray

Jodi Ann Ray

Association: Texas Society of CPAs (TSCPA)

Title: Executive Director/CEO

Accomplishments:

  • Took over the top job Jan. 1 from John Sharbaugh, who ended a 17-year run as CEO and now serves as managing director of governmental affairs.
  • Leads one of the nation’s largest state accounting organizations, representing 28,000 CPAs in 20 chapters across the state.
  • Previously served as vice president of membership and volunteer experience with Meeting Professionals International, where she was the responsible for governance and community development, which encompassed membership and more than 90 chapters and clubs in 24 countries.
  • She also served as the CEO for chambers of commerce in Connecticut, North Carolina and Texas, where she oversaw all operations including membership, government affairs, economic development and finance.

Progressive firm leaders are focused on re-imagining their future to ensure they remain relevant to their clients. How does “remaining relevant” play a role in your strategic planning, and what are some examples from the past 12 months of new services/programs/approaches that you have instituted that addresses how the State Society will remain relevant to its members?

The Society is taking a hard look at its strategic plan now, with plans to launch an updated plan to the membership in the fall. We’re looking at our vision for the organization, how it should look five to 10 years from now, and how to inspire our members and future CPAs about the organization and their practice in the field. We’re asking members what keeps them up at night, and which areas the organization should focus on. We’re upgrading our website to help members cut through the clutter to get accurate, timely and relevant information. The society is also very active in advocacy at the federal and state level.

What do you see as the biggest opportunity for the profession?

We are in such a period of change, not simply in our profession but in all industries, and I think the transformation affecting so many companies will impact the role of CPAs. What we consider the core services of CPAs is going to expand and evolve. For example, for some of the larger firms we’ve seen a very clear trend toward more advisory services.How do you see the role of the accountant changing over the next few years?

CPAs will become more of a strategic business advisor in addition to reporting financial performance. In the association world where I come from, the business decision-making models have changed and companies are relying on better, faster data and that’s changing the emphasis on what’s being produced. CPAs will be producing trend information, dashboards and projections to provide information that can be used in new and valuable ways.

Which aspect of technology should firms be paying closer attention to?

We’ve added new programs into our spring lineup of CPE offerings on risk management and cybersecurity. Firms are concerned about ensuring that the transfer of client data is secure and that their liability is adequately addressed.

Innovation and entrepreneurship are big topics in the profession. Can you give me some examples of member firms that have done something innovative and proactive to help clients?

Firms are reinventing themselves and doing it quickly to help their clients think ahead and adapt to coming changes. While the core services won’t go away, they may be delivered differently. The same is true for the Texas Society of CPAs – the services we provide to support our members will evolve and adapt.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

HLB International Welcomes New CEO

Marco Donzelli

Marco Donzelli

HLB International, a global accountancy network with presence in 140 countries, has announced that Marco Donzelli has been appointed CEO.

Donzelli, previously COO, is leading the network’s mission to ensure that HLB International cements its position as a global player in the industry.

Donzelli joined HLB International in February 2012 as head of strategic network development and then moved to the position of COO in August 2015. During that time, he has diligently helped grow the network’s cross-border business, and drove HLB International’s growth rate.

David Stene, HLB International chairman, says, “We are delighted to have Marco in place as our CEO. His efforts have led to the significant growth of the network and he is well respected by members and clients alike. He has a great vision for the network and is dedicated to ensuring the future success of HLB International.”

Donzelli’s career has focused on leading business development projects, entrepreneurial initiatives, business transformation and change management programs. He started his career in Italy, where after a brief period with Deloitte, he moved to Deutsche Bank, where he spent over six years in both commercial and internal consultancy roles before moving to the U.K. There, he set up a food-tech business and then joined MagicSolver, a top U.K. mobile innovator.

Donzelli says, “I am excited to be taking up my new position and delivering on our mission to help support our member firms and their clients leverage business advantages that will result in growth.”

Survey: Record Number of Organizations Were Victims of Payments Fraud in 2016

Nearly three-quarters of corporate treasury and finance professionals said their companies were victims of payments fraud last year, according to the 2017 Association for Finance Professionals (AFP) Payments Fraud Survey, which generated 547 responses.

This is the highest percentage since the survey debuted in 2005 and comes after a dramatic increase in 2015. Check fraud and business email compromise are both on the rise.

Checks continue to be the most popular method for committing payments fraud. Fully 75% of organizations that were victims of payments fraud in 2016 experienced check fraud – an increase from 71% in 2015. This is a reversal of the declining trend observed in check fraud since 2010.

Highlights of the 2017 AFP Payments Fraud and Control Survey, which was underwritten by J.P. Morgan.

  • 74% of survey respondents said their organizations were victims of business email compromise in 2016 – a 10 percentage point increase from 2015.
  • 70% of organizations have implemented controls to prevent business email compromise.
  • 63% of payments fraud attempts were made by outside individuals.

“Companies that offer mandatory training for all employees, particularly around cybersecurity, and that have a plan to respond to payments fraud, will fare better than those that do not,” says Jim Kaitz, president and chief executive of AFP.

Over 70% of corporate treasury and finance professionals are hesitant about adopting mobile payments at their organizations as they question the security of this payment method.

Nancy McDonnell, managing director at J.P. Morgan, says, “With three-quarters of companies experiencing fraud in 2016, it is important that businesses take preventive measures by educating their employees and implementing the products and processes they need to prepare and protect their assets and data from cyberfraud.”

After 25 Seconds of ‘Irritation’ Accounting Firm Callers May Hang Up

Accounting firms in North America risk losing business by making customers wait on hold for more than 25 seconds, new research has revealed.

Every call made to companies in the accounting sector, as part of the study conducted by audio branding company PHMG, was put on hold, compared to a North American average of 70%. Those callers are being forced to wait for 25.81 seconds on average, slightly less than the North American average of 28.05 seconds.

In addition, callers are left listening to inappropriate audio, which could increase the risk of caller hangups. The research discovered 51% of accounting firms leave customers waiting in silence, while 31% use generic music and 14% subject callers to beeps.

Mark Williamson, CEO at PHMG, says, “The research results do not reflect particularly well on the accountancy sector, as few firms appear to be employing a best practice approach to call handling. It’s worrying that customers are being left on hold for over 25 seconds as this can be a major irritation for customers, but what makes matters worse is that they are left in silence or listening to poor-quality music, which increases the risk of hang-ups.

He says that a previous study of 2,234 U.S. consumers found 59% will not do business with a company again if their first call isn’t handled to satisfaction. The same consumer study also revealed 65% of customers feel more valued if they hear customized voice and music messages on hold, he says. “By ensuring all audio is professional and brand-congruent, companies can drastically improve customer experience and begin shaping behavior by tapping into the psychological power of sound.”

This latest study also found accountancy firms answer the phone within an average of three rings, but only 2% use an auto-attendant service to greet callers outside of normal business hours.

Four Disruptive Cyber Trends That Could Slow the Bad Actors

Jason Bloomberg, president of industry analyst firm Intellyx, has written in Forbes about four broad trends that reveal transformational aspects of the cybersecurity marketplace after recently attending a huge RSA cybersecurity conference in San Francisco.

Disruption No. 1: Targeting the Links in the Cyber Kill Chain

Vendors are improving their ability to understand how bad actors behave, and can thus take steps to prevent, detect or mitigate their malicious activities, says Bloomberg. This may be the broadest of all the disruptions. Today’s vendors are understanding the ‘Cyber Kill Chain,’ or the steps a skilled, patient hacker will take to achieve his or her nefarious goals.

The product of U.S. Defense contractor, Lockheed Martin, The Cyber Kill Chain contains seven links: reconnaissance, weaponization, delivery, exploitation, installation, establishing command and control, and actions on objectives. Today’s more innovative vendors target one or more of these links, with the goal of preventing, discovering or mitigating the attack, Bloomberg says.

Disruption No. 2: Leveraging AI to Better Understand Human Behavior

One area where vendors are successfully applying Artificial Intelligence, Bloomberg writes, “is to tell the good guys from the bad guys, and furthermore, to tell the good guys from the bots simply by analyzing their behavior.” Insider threats are among the most pernicious. Cybersecurity vendors are identifying, investigating and blocking insider threats by tracking the behavior of users and identifying when that behavior violates policy.

Disruption No. 3: ‘Software-Defined’ Cybersecurity

“Cybersecurity has also joined the Software-Defined Everything (SDX) movement. If we can represent our entire cybersecurity deployment as a software-based model, the reasoning goes, then we have better control, visibility and flexibility,” Bloomberg says in Forbes.

Disruption No. 4: Israel Becomes the Cyber Silicon Valley

The fourth trend is how Israeli cybersecurity startups have come to dominate the innovation in this area. Of the 26 vendors Bloomberg and his colleagues met with at the RSA Conference, they spoke with no less than six Israeli firms. Silicon Valley may still have the edge generally, but Israel is gaining fast in the cyber arena.

Combined with innovations in threat prevention, detection and defense, the long-standing advantage that bad actors have enjoyed may finally be nearing its end.

KMPG Fires Head of U.S. Audit, Others After Improper Warning of Inspection

KPMG has fired the head of its U.S. audit practice, four other partners and one employee after the Big 4 firm found they improperly received advance warning of audits the PCAOB planned to inspect.

KPMG says they violated the firm’s Code of Conduct. The PCAOB, which oversees just under 2,000 accounting firms, says that one of its employees had left over the matter and that it had taken steps to “reinforce the integrity of its inspection process,” the Financial Times reported.

KPMG said it discovered in February that an employee who had joined the company from the PCAOB had received confidential information from someone who still worked there about which audits would be inspected. The new employee then shared the information with other KPMG staff. All six fired employees, “either had improper advance warnings of engagements to be inspected by the PCAOB” or were aware that others had received this information but “failed to properly report the situation in a timely manner,” the firm reported.

The five partners included Scott Marcello, vice chair of its U.S. audit practice. “We are taking additional steps to ensure that such a situation should not happen again,” says Lynne Doughtie, KPMG CEO.

The firm says a whistleblower reported the information and the firm then reported the leak to the PCAOB and SEC and hired an outside law firm to conduct an investigation.

James Doty, chairman of the PCAOB, says, “This demonstrates the importance the accounting firms and the investing public place on our inspection results, and warrants a hard look by us at what is needed to reinforce the integrity of our inspection process.”

Marcello will be replaced by Frank Casal, a KPMG veteran of 38 years. The firm also replaced its national managing partner for audit quality and professional practice, naming Jackie Daylor, who is already on the firm’s board. David Middendorf previously held the role.

KPMG said the affair would not have any effect on any client’s financial statements.

New Version of CPA Exam Tests Critical Thinking, Analytical Ability

The AICPA, National Association of State Boards of Accountancy (NASBA) and Prometric have announced the successful launch of an updated version of the Uniform CPA Examination.

The next-generation exam, which began testing April 1, has added additional assessment of “higher-order cognitive skills that test a candidate’s critical thinking, problem solving and analytical ability,” the AICPA says. The exam also makes greater use of task-based simulations to assess these higher-order skills. Research shows that CPAs are now performing tasks that rely upon these skills earlier in their careers.

“The roles and responsibilities of newly licensed CPAs are constantly evolving, so it’s crucial for the CPA Exam to stay ahead of the curve. The CPA Exam now better reflects the knowledge and skills essential to today’s profession,” says Michael Decker, AICPA vice president of examinations.

Among the most important changes to the CPA exam:

  • Exam blueprints that contain about 600 representative tasks across all four exam sections are available on the AICPA website. The blueprints have replaced the Content Specification Outline (CSO) and Skill Specification Outline (SSO) as CPA candidates’ primary source of the content and skills that they will be tested on.
  • The exam remains composed of the four existing sections – auditing and attestation, business environment and concepts, financial accounting and reporting and regulation.
  • Any combination of passing exam sections prior to April 1 and passing exam sections on or after April 1 (within the 18-month window following passing one section) will count toward licensure.
  • Total CPA exam testing time increased from 14 to 16 hours – four sections of four hours each.
  • A new, 15-minute standardized break during each section that will not count against a candidate’s testing time had been added.

For candidate convenience, the 10-day extension of the testing window introduced in April 2016 will continue in the third and fourth quarters of 2017. The 10-day extension will not be available during the current April/May testing window to allow the AICPA to follow the standard-setting process and analyze exam results to set new passing scores. To provide sufficient time for the process, scores will be released only once following the close of each testing window.

In addition to the changes to the CPA exam that have already occurred, the AICPA is working on an improved user experience, which is expected to launch in 2018. More information on that project will be announced later this year.

Detailed information on the exam is available online at www.aicpa.org/cpaexam and https://nasba.org/exams/the-next-version-of-the-cpa-exam/.

Dean Dorton Acquires Metro Medical Solutions

Louisville, Ky.-based Dean Dorton Allen Ford (FY16 net revenue of $25.6 million) has expanded its health care services in Kentucky by acquiring Metro Medical Solutions, a long-standing physician billing and credentialing company located in Louisville.

The new physician billing and credentialing services will be combined with Dean Dorton’s existing health care consulting practice and branded as Dean Dorton Healthcare Solutions.

“We are enthusiastic about the high level of service and expertise Metro Medical Solutions has provided its notable client base and the opportunity to expand services to our current clients, which includes many physician practices,” says David Bundy, president and CEO of Dean Dorton. “Metro Medical Solutions is highly regarded in their ability to maximize reimbursement for physician practices in a short amount of time at a low cost, creating tailored solutions for each client.”

Dean Dorton can now offer a full range of services, from accounting and financial outsourcing to billing and credentialing. “We are now able to handle all back-office functions, which can allow physicians to focus solely on the demands of their clinical practice,” says Adam Shewmaker, director of health care consulting services at Dean Dorton.

January Taylor, president of Metro Medical Solutions, says the merger gives clients a broader range of specialty capabilities, advice and solutions. “In addition, we want to offer more opportunities for our employees and referral partners who are the backbone of our business.”

Dean Dorton Healthcare Solutions includes a team of more than 20 experts who specialize in health care accounting and financial outsourcing, medical billing and credentialing, revenue cycle management, compliance and risk management, technology, human resources and advisory services.

Peric Appointed to Illinois Department of Revenue Group

Gary Peric

Gary Peric

Chicago-based Baker Tilly Virchow Krause (FY16 net revenue of $522.3 million) announces that partner Gary Peric has been appointed by Illinois Department of Revenue (IDOR) Director Constance Beard to serve on the director’s advisory group. The group comprises state tax practitioners willing to devote time to advise the director on issues faced by the IDOR and the state of Illinois.

“This is a great opportunity for Baker Tilly to give back to the business community by advising in a nonpartisan manner on significant tax changes,” Peric says.

Peric leads Baker Tilly’s state and local tax (SALT) practice. Baker Tilly’s SALT professionals offer specialized expertise that helps businesses and individuals understand and comply with increasingly complex state and local tax and unclaimed property requirements.