Mazars Announces Alliance with 4 Regional U.S. Firms and MNP in Canada

Mazars, the Rouen, France-based accounting firm, is expanding its presence in the U.S. through an alliance with five of the top 20 firms in the U.S. and Canada.

Mazars announced that the Mazars North America Alliance would include the following firms: Springfield, Mo.-based BKD (FY19 net revenue of $662.9 million), Seattle-based Moss Adams (FY18 net revenue of $691 million), Southfield, Mich.-based Plante Moran (FY18 net revenue of $542.1 million), Charlotte, N.C.-based Dixon Hughes Goodman (FY19 net revenue of $462.5 million) and Calgary, Alberta-based MNP, with net revenue of roughly $760 million.

Mazar’s CEO, in an interview with Reuters July 11, said the move will almost double its size as a way to challenge the market dominance of the Big 4. “Our ambition is to become a European champion with an international scope,” Mazars’s CEO Herve Helias told Reuters. “When they call me the fifth big, I like it.”

Mazars would not take any stake in the firms, but will expand services to its existing international clients through professionals from some of largest firms in North America. Mazars, with about 24,000 professionals worldwide, will increase that number to about 40,000 under the alliance.

According to the Financial Times, the alliance formation may be related to a belief that the U.K. will begin to require two auditors for the 350 largest companies as part of a reform effort following prominent audit failures among the Big 4. The Times says the firm is familiar with the joint-auditor system, as top companies in France has worked under the requirement for many years.

Mazars has also been in the news for another reason: The U.S. House of Representatives oversight committee has issued a subpoena to its U.S. branch, New York-based Mazars USA (FY17 net revenue of $189 million), to obtain President Donald Trump’s tax records.

 

And on July 12, in a hearing in the U.S. Court of Appeals, Trump’s lawyer faced more than an hour of tough questions over his arguments that lawmakers don’t have the power to investigate the president. “President Donald Trump appeared to be facing an uphill battle to keep Congress from obtaining his financial records,” USA Today reported. The oversight committee’s attorneys have argued that it has broad and inherent power to investigate possible conflicts of interest.

Cynthia Hannafey Joins UHY’s Board of Directors

Cynthia Hannafey

Cynthia Hannafey

Chicago-based UHY Advisors Inc. (FY17 net revenue of $140.8 million) announces that Cynthia Hannafey, a current managing director with UHY Advisors, has joined the firm’s board of directors.

UHY’s nine-member board is charged with the stewardship of the firm, guiding its corporate strategy, reviewing and approving annual budgets, and appointing and monitoring the performance of the CEO.

“Cindy has over two decades of experience advising senior management teams and C-suite executives in regard to operational and financial process optimization,” says Richard David, COO of UHY Advisors. “Her experience leading teams at UHY that analyze and implement strategies, processes and technologies to address enterprise-wide challenges is a significant asset to our clients.”

Anthony Frabotta, chairman and board member of UHY Advisors, says, “Cindy’s technology background is an immediate boon to a versatile team representing various geographic regions and professional specialties that bring unique and insightful perspectives to our firm.”

Hannafey, based in Atlanta, provides portfolio, program and project management; software selection and digital transformation services; post-merger integration; and operational and financial process optimization services to client companies.

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Prager Metis Welcomes New Partner

Brian D. Sackstein

Brian D. Sackstein

New York-based Prager Metis CPAs (FY18 net revenue of $98.2 million) has admitted Brian D. Sackstein as its newest partner in the not-for-profit and health care practices. He will be based in two offices, New York and Woodbury, N.Y., on Long Island.

“Bringing Brian on board is essential for our plans to expand our resources and further strengthen our reputation and expertise as the ‘go-to’ expert for both not-for-profit and health care clients,” says Jerry Eitel, OMP in Long Island. “With his extensive background he is a perfect choice for us to expand in these two critical industries.”

Sackstein has a strong expertise in performing audits and providing accounting, advisory and tax services to clients. He also spends a great deal of time consulting with organizations regarding the amount of reimbursements they should receive, helping them grow and operate more efficiently. His responsibilities include the planning, coordination, and review of accounting and auditing projects; the preparation and review of financial statements; coordination of audits in accordance with Uniform Guidance; and the presentation of audited financial statements and reports to management and boards of directors.

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L. Peyton Humphrey Celebrates Milestone at Hantzmon Wiebel

L. Peyton Humphrey

L. Peyton Humphrey

Half a century. That’s how long L. Peyton Humphrey has been with Hantzmon Wiebel (FY18 net revenue of $12.8 million) of Charlottesville, Va.

On Sunday, July 14, Humphrey will celebrate his 50-year anniversary in typical fashion, at the office. Even though he retired from the partnership a few years ago, he’s still an active team member and comes into the office around 6 a.m., the firm says.

“Time flies when you’re having fun,” says Humphrey. “If you surround yourself with people smarter than you, it’s a good deal. The firm has been a good, fun place to grow and have a long career. We have a lot of smart, hard-working people here. I’ve just been along for the ride.”

CEO Jennifer Lehman says, “Peyton embodies all that is good about our profession. He is incredibly intelligent, has the highest moral code and builds long-lasting relationships with his clients. They are friends as well as clients and that helps him to best meet their needs.”

Humphrey’s journey with the firm started in 1969, one year after passing the bar exam. He says he never seriously entertained opening a law firm, but instead used that knowledge as an additional tool to help his accounting clients.

“People rely on you for advice. I’ve evolved with my clients who were starting their businesses, to running their businesses, to selling their businesses, to retirement. I’ve been with them from startups to retirement homes,” says Humphrey.

He has many fond memories, including a few years where he and his wife Cherie stayed in Germany to help a client. “It was a good opportunity. I had that opportunity because Mr. Hantzmon had the connections. He was one of the smartest guys that I’ve ever met,” says Humphrey.

Humphrey is a quiet person with a gentle kindness, the firm says. “It’s easier to get along in this world if you’re kind,” he says. “We need more kindness.”

BKR International Names Raymi Mejia New Americas Regional Board Chair

Raymi Mejia

Raymi Mejia

BKR International has appointed Raymi Mejia, partner at Mejia Lora & Asociados (MLA) in Santo Domingo, Dominican Republic, as chair of the Americas regional board.

Mejia has served as a board member for BKR’s Americas Region since 2012 and, most recently, as the board’s vice chair. He has been instrumental as a liaison with Latin American and Caribbean member firms for the association. He will also represent the Americas region on BKR’s worldwide board.

Mejia has more than 25 years of experience in audit and tax. He has served as an advisor in the negotiations of transfer pricing agreements between the National Association of Hotels and Restaurants and the General Directorate of Internal Taxes. He has vast experience in the hospitality sector, participating in audit and tax advice to the main international hotel chains with locations in the Dominican Republic.

“As we focus on the firm of the future, it is vital that our Americas regional board sustains leadership from both emerging and developed economies to best represent the global market,” notes A.J. Johnson, BKR’s Americas regional executive director. “

BKR International has also appointed Kenneth B. Laks to the Americas regional board for three, two-year terms. Laks is a partner at Hauppauge, N.Y.-based Albrecht Viggiano Zureck & Co. (AVZ). AVZ has been a member of BKR International since 1986. Laks is a frequent presenter at BKR member conferences around the world on issues regarding international taxation. He serves as chair of BKR’s worldwide international tax committee and is also a member of its Americas regional international tax committee.

Karen Brenneman, MP at Hall Kistler & Company of Canton, Ohio, and ex-officio chair of BKR’s Americas region will remain a member of BKR’s worldwide board.

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New Jersey CPAs Agree U.S. Student Loan Debt is Financial Crisis

More than 80% of 623 CPAs polled in June by the New Jersey Society of Certified Public Accountants (NJCPA) said they either “strongly agreed” or “somewhat agreed” that student loan debt at $1.6 trillion in the United States is a financial crisis.

More than 75% of respondents considered student loan debt in New Jersey to be a “major problem.”

Poll respondents said their clients have put off major life decisions and purchases due to their high student loan debt. Of the nearly 270 respondents who said they knew someone who delayed this kind of decision or purchase, 80% said they put off buying a home and an almost equal number said they chose not to save for retirement. More than 65% put off saving for emergencies, while 42% put off getting married and 39% delayed having children.

Suggested solutions:

  • Federal and state governments limit public college price increases – Schools, for example, should have to publicly report the amount of funds on hand and used for infrastructure each year as excess funds should be used to lower tuition. Respondents also recommended limiting tuition percentage annual increases for any institution for which students use student loans to attend.
  • Companies help reduce student loan debt – Companies can offer employees bonuses to pay their student loan obligations. The federal government could also give a tax deduction to an employer who offers to pay off part of an employee’s student loan debt up to a limit of their 401(k).

“The poll is a telling sign that student loan debt is a major problem in the United States. New Jersey’s legislature needs to recognize this and welcome programs and initiatives to shrink student loan debt, particularly if they want young professionals to remain in the state,” says Ralph Albert Thomas, CEO and executive director at NJCPA.

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Deloitte, Partner Fined Over Serco Geografix Audit Failures

Deloitte and a senior partner in the U.K. have been fined and reprimanded for misconduct over the audit of Serco Geografix (SGL), an outsourcing firm, in a July 4 settlement, according to Reuters.

The settlement ended a six-year investigation into fraud and accounting errors. The Financial Reporting Council, the audit watchdog in the U.K., fined Deloitte 4.23 million pounds ($5.32 million) and audit engagement partner Helen George 97,000 pounds after they admitted misconduct for audits in 2011 and 2012.

A subsidiary of Serco (SGL) had been awarded government contracts for GPS satellite-tracking tags to enforce curfews on more than 100,000 offenders each year. A London judge said the company committed “deliberate fraud” between 2010 and 2013.

The judge approved a deferred prosecution agreement (DPA) between SGL and the UK Serious Fraud Office. The company will pay a fine of 19.2 million pounds and costs of 3.7 million pounds.

“SGL engaged in quite deliberate fraud against the Ministry of Justice in relation to the provision of services vital to the criminal justice system,” the judge said.

SGL’s parent Serco Group, one of Britain’s largest government contractors, has said the fraud and false accounting offenses related to how the company reported the profitability of its electronic monitoring contract.

The penalty on Deloitte, one of the Big 4 accounting firms, comes amid a backdrop of serious discussion among British government officials about whether the profession needs a shakeup after the failures of retailer BHS and construction company Carillion.

Deloitte, in a statement, says it regretted that its audit work on Serco Geografix had been below the expected standards.

“We have a program of continuous improvement for our audit quality processes … We have also specifically agreed with the FRC certain actions focused on learning lessons from the shortcomings in this audit work,” Deloitte’s statement says.

Both Deloitte and Helen George qualified for fine reductions after cooperating with the investigation.

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McKonly & Asbury Announces New Principals

Shalane Cohen

Camp Hill, Pa.-based McKonly & Asbury (FY18 net revenue of $9.6 million) announces that two professionals have been admitted to the leadership team as principals, Shalane Cohen and Danielle Guinter.

Danielle Guinter

Cohen and Guinter both joined McKonly & Asbury in 2005. They each have 14 years of audit experience and are leaders in the firm’s assurance and advisory practice. They work out of the Camp Hill office.

Cohen primarily works with clients in employee benefit plan and manufacturing industries. She is active on the firm’s LEAN Committee and is also involved with recruiting and finding talent for the practice.

Guinter works with clients in the construction, employee benefit plan and manufacturing industries.

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Grassi & Co. Introduces Grant Compliance Services to Nonprofits

Elizabeth Gousse Ballotte

Due to a shift in the need for compliance for private foundations and other funders, New York-based Grassi & Co. (FY18 net revenue of $63.6 million) is adding a grant compliance services team to its nonprofit practice. Principal Elizabeth Gousse Ballotte will lead the team and is based in the New York office.

The team assists funders by ensuring their grantees are complying with the conditions of the grant agreement. The team reviews financial operations and grant reporting to assure that adequate controls and oversight are in place. These services assist funders, typically private foundations, by evaluating the impact of the donations to the nonprofits and their missions and help determine how and where the funds are specifically being used. These compliance reviews offer greater assurance to the funders that the grant programs are operating efficiently and successfully, the firm announced.

“Private foundations have increasingly come under fire for not adequately monitoring their grantees, often due to limited resources and personnel. Our grant compliance services help foundations address this gap, assess their own risk and protect their reputations,” says partner David M. Rottkamp, not-for-profit practice leader.

Generally, foundations that pursue a grant monitoring program work with the Grassi team to develop a compliance review plan and monitor the program annually, either using Grassi resources as an outsourced provider or hiring the firm to implement the program and train their staff to conduct the reviews and provide feedback to grant recipients.

“These organizations make a huge difference to the recipients of their grant-making. My work further enhances that difference and provides the assurance that grant funds are used appropriately,” says Ballotte, who has more than 15 years of operational and organizational consulting and management experience.

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Marcum Merges in The Abrix Group

Thomas Frank

New York-based Marcum (FY18 net revenue of $549.7 million) expanded further into the Midwest by merging in The Abrix Group of Northbrook, Ill.

Abrix, a business management and accounting firm focused exclusively on the health care industry, adds four partners and 22 associates to Macum’s Illinois offices.

Abrix specialized in helping medical and dental practices with their organizational, business and financial issues, as well as the business and personal needs of individual practitioners. The firm’s services included tax, accounting, business development, regulatory issues, Medicare fraud and abuse, practice mergers, practice valuations, profit formulas, and retirement planning and administration.

“Abrix’s unique expertise in the nuances of medical and dental practice management will be an additional asset to our health care clients regionally and nationally, as we continue to grow our presence in the Chicago area,” says Cary Buxbaum, Marcum’s regional MP in Illinois.

“It is a tremendous opportunity for our firm to be able to bring the national resources of Marcum to our clients, while bringing a specialized focus on the practice side of the health care industry into their service mix,” says Thomas Frank, Abrix MP.

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