CPA Trendlines

Super-Regionals on the March

Moss Adams, Brady Ware Pick up Local Firms; St. Clair Repositions as a ‘Dot-Net’

Moss Adams, the nation’s 12th largest accounting firm, is absorbing Neff + Ricci, adding 100 staffers and 15 partners to its current 1,400 staff and 180 partners. Closing is due after Jan. 1, 2006. No terms were disclosed.

In Dayton, Ohio, meanwhile, Brady Ware is merging with Shaw & Shaw CPAs Inc. in Columbus. The deal adds 16 employees, giving Brady Ware a total of 126 in three cities — Dayton and Columbus, Ohio, and Richmond, Ind. It also gives Brad Ware 50 new car dealerships in Ohio, Kentucky and South Carolina as clients. Last year Brady Ware bought Miami Valley Pension LLC, one of Ohio’s largest retirement plans. In 1999, Brady Ware merged with another Columbus firm, Schneider, Meixner and Co. Inc., and bought Richmond, Ind.-based Olive LLP. In 2001, it bought a Cincinnati-based Internet company to boost its technology consulting business and in the intervening years has set up multiple new divisions.

And, in the Philadelphia area, St. Clair, Easton, England & Johnston, PC, has restructured as CPA Solutions.net, LLC. St.Clair & Associates, CPAs, started in 1986, has grown through mergers to be ranked among the 25 largest regional firms in the area. The firm also offers investments, insurance, employee benefits, technology and payroll functions.
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CCH LAUNCHES TAX RESEARCH CONSULTANT: NEW RESOURCE IS GROUNDED IN PRACTITIONER?S WORKFLOWS

CCH PRESS RELEASE

(RIVERWOODS, ILL., October 20, 2005) ? CCH, a leading provider of tax law information, software and services, has launched the new Tax Research Consultant (TRC) online, combining the best traditional fine-grained research capabilities with new content, new tools and a new ?how-to? approach, all in a new clear voice. The product represents a complete overhaul of CCH?s Federal Tax Service and replaces that product in serving tax, accounting and legal professionals with a practice-oriented approach to tax research online (tax.cchgroup.com).

?When we stood back and looked at how we had re-shaped topically-organized federal tax research, we felt that only a new name would do justice to the depth and breadth of the editorial improvements and enhancements,? said Tanya Rose, CCH product manager. ?The new name ? Tax Research Consultant ? sums its role in providing expert insights that get the researcher to end results quickly and easily.?

New Topics and Chapters
Available on the CCH Tax Research NetWork, the Tax Research Consultant adds over 50 new chapters and three new topics. New topics include: Business Stages from Start Up to Termination (12 new chapters); LLCs; and Excise Taxes (9 new chapters).

Existing topics are augmented with new chapters covering banks, filing requirements for retirement plan administrators and executive compensation.

Nearly all topics are now introduced by a ?Fundamental Concepts? chapter designed to provide a clear and thorough introduction to the 30 topics covered by Tax Research Consultant.

?The ?Fundamental Concepts? are well-written orientations that give users a solid introductory grounding in the topic and save them time by pointing out the key issues right up front,? Rose noted.

New Tools Linked from Explanations
New to the Tax Research Consultant are interactive research aids that go beyond stating the rules to applying them. For example, explanations on like-kind exchanges contain links that lead to a decision tree. By answering a few questions, the researcher can determine whether a client meets the requirements.

Other interactive research aids include:

? NOLs;

? Deducting rental residence of vacation homes;

? Identifying 263A property;

? Capitalization v. expensing;

? Identifying MACRS class life;

? Computer software expenditures; and

? Cost-benefit analysis of cost-segregation studies.

?We realize that knowing the law is just part tax research,? said Rose. ?These tools let practitioners take the next step and apply the rules to their clients? fact situations, all within the Tax Research Consultant.?

Clear Voice, Grounded in Practice
As important as new content and new tools, according to Rose, is the new, clear voice of Tax Research Consultant explanations.

?We worked hard to make sure that the expertise of our outside authors and our editorial staff comes through clearly and cleanly, so discussions are interesting, informative and easy to follow,? said Rose.

The Tax Research Consultant is grounded in practice, so professionals using it can deliver end results for their clients quickly and efficiently. For example, a professional interested in drafting an executive compensation agreement who searches for ?compensation agreement terms,? will locate hundreds of hits. The very first one lays out and discusses the common terms used in an executive compensation agreement.

In addition to the explanations in the Tax Research Consultant, subscribers also receive a number of useful and authoritative tools and publications:

? CCH Election and Compliance Toolkit;

? IRS Actuarial Factors Finding Tool;

? Internal Revenue Code and Regulations, with complete CCH legislative history;

? IRS Publications;

? Taxes ?The Tax Magazine;

? CCH Perform Plus II Forms; and

? Business and Tax Preparation Calculators.

Availability and Pricing
For more information or to subscribe to the CCH Tax Research Consultant, call a CCH sales representative at 1-888-CCH-REPS (1-888-224-7377) or visit tax.cchgroup.com. Until the end of 2005, a one-year subscription is available at the introductory price of $1,490.

About CCH Tax and Accounting
CCH Tax and Accounting (tax.cchgroup.com), based in Riverwoods, Ill., is a leading provider of tax, audit and accounting information, software and services. It has served tax, accounting and business professionals and their clients since 1913. Among its market-leading products are The ProSystem fx? Office, CCH? Tax Research NetWork?, Accounting Research Manager? and the U.S. Master Tax Guide?. CCH Tax and Accounting is a Wolters Kluwer company.

Wolters Kluwer is a leading multinational publisher and information services company. Wolters Kluwer has annual revenues (2004) of ?3.3 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands (www.wolterskluwer.com). Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices

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CONTACT :

Leslie Bonacum, 847-267-7153, mediahelp@cch.com

Neil Allen, 847-267-2179, allenn@cch.com

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CPA2Biz Moves to Profitability with Strong Revenue Growth

Thursday October 20, 9:45 am ET

JERSEY CITY, N.J.–(BUSINESS WIRE)–Oct. 20, 2005–CPA2Biz Inc., the majority owned marketing and technology provider of the American Institute of Certified Public Accountants (AICPA), today announced that it achieved profitability –a significant company milestone.
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CPA2Biz posted its third consecutive year of improving results, reporting a Net Income of $150,000 for the year ending July 31, 2005, compared to a loss of $3.144 million the previous year. CPA2Biz’s revenue grew by almost $1 million to $14.284 million from $13.327 million the previous year. These results were driven by strong revenue growth in new CPA2Biz business lines and a reduction in depreciation expense. “Through focus and solid execution, we’ve been able to grow our customer base and revenues while maintaining an appropriate cost structure moving the company to profitability,” remarked Erik Asgeirsson, CEO, CPA2Biz Inc.

The CPA2Biz site (www.cpa2biz.com), now serving over 50% of the CPA Profession, is the leading e-commerce site for CPAs. The company continues to invest the resources necessary to make it a leading edge platform providing CPAs numerous tools and resources to help them be more successful. In addition, CPA2Biz is also helping CPAs build stronger relationships with their clients through the Business Solutions Program it launched two years ago. Approximately 1/3 of CPA firms nationwide are now enrolled in this program.

“Over the past few years we have been extremely focused on building out a high quality online channel for CPAs, developing value added programs for CPA firms and their small business clients, and providing leading marketing and technology services to the AICPA”, Asgeirsson added, “All of this is enabling us to deliver on our charter, and, as a result, the AICPA and its members are deriving significant value.”

About CPA2Biz

CPA2Biz is the exclusive marketing provider of the American Institute of Certified Public Accountants (AICPA), and provides marketing and technology services to the AICPA for its wide array of products and services, such as continuing education, conferences and literature. CPA2Biz also develops and manages client-focused business solutions programs (e.g. payroll, banking) that enable CPAs to build stronger relationships with their business clients or employers. For more information, visit www.cpa2biz.com.
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Tips and Traps for Going SOHO

With more CPAs working from home than ever before, what’s the secret to success?

by Rick Telberg
On Management
from the AICPA Career Insider

Do you take work home with you? If so, you’re not alone. About half of all CPAs work at home in a home office or full time in a small office. Marketers call it the SOHO trend – for small-office, home-office. Accountants see it either as freeing, burdensome, or, sometimes, both. Still, working at home, remotely, or in a small office is a growing reality for the profession. And it poses all sorts of new challenges and strategies to work successfully for both employer and employee, practitioner and client.

Going SOHO? How do CPAs do it?

Join the study here.

Download the Executive Preview here. SOHOPreview.pdf READ MORE →

PDF DOWNLOAD: SOHO Preview Oct 2005

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One in Three Workers Witness Ethical Misconduct Despite Clearly Communicated Guidelines

Hudson Survey Highlights Gap Between Policies and Reality

via Hudson Highland

Nearly a third (31 percent) of U.S. workers have witnessed co-workers engage in ethical misconduct, according to a Hudson survey on workplace ethics. However, only half (52 percent) of those witnessing unethical or illegal acts reported it to anyone in authority. Despite these figures, nearly eight in ten U.S. workers (78 percent) state that their companies clearly communicate what they consider unethical and ethical behavior in the workplace.

When it comes to their own day-to-day jobs, half (53 percent) say they rarely or never encounter ethical gray areas, although 14 percent of workers do at least once a month and 28 percent do occasionally. When workers have witnessed colleagues engaging in unethical behavior, they are more likely to experience gray areas themselves (25 percent say that occurs at least once a month). Witnesses also give lower ratings to their companies for communicating ethical standards.

On the positive side, three in four workers (74 percent) express confidence in their leadership, indicating that senior leaders of their company generally behave with honesty and integrity. However, among those who have witnessed their colleagues’ transgressions, the percentage of those believing that their leaders are honest drops to 61 percent.

“Workplace ethics is not an abstract concept, but a critical part of a healthy company,” said David Rhind, general counsel North America, Hudson Highland Group. “Even with clear ethics policies in place, companies must create a culture of integrity throughout the organization by providing both the means and the mandate to report concerns. When senior executives lead by example, employees are more likely to follow suit.”

Other key findings include:

Government workers are more likely than their entrepreneurial and private enterprise counterparts to report that they have seen coworkers engage in unethical or illegal behavior (38 percent compared to 29 percent and 31 percent, respectively).
On average, those making less than $40,000 annually are less likely to feel their company’s leadership behaves with honesty and integrity — 65 percent compared to 74 percent nationally.
Men under the age of 40 and African-American workers have witnessed significantly more ethical misconduct by co-workers (42 percent and 36 percent respectively).
Only a quarter (26 percent) workers over age 50 have witnessed unethical behavior, and nearly eight in ten (77 percent) believe that their leaders behave with honesty and integrity.

The Hudson ethics in the workplace survey is based on a national poll of 2,099 U.S. workers and was compiled by Rasmussen Reports, LLC, an independent research firm (RasmussenReports.com). A more detailed data report is available at http://www.hudson-index.com.

Hudson, one of the world’s leading professional staffing, outsourcing and human capital solution providers, also publishes the Hudson Employment Index(SM), a monthly measure of the U.S. workforce’s confidence in the employment market. Next month’s Hudson Employment Index(SM) will be released on November 2, 2005.

Hudson

Hudson delivers specialized professional staffing, outsourcing, and human capital solutions worldwide. From single placements to total solutions, the firm helps clients achieve greater organizational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses.

Hudson is a division of Hudson Highland Group, Inc. one of the world’s leading professional staffing, retained executive search and human capital solution providers. The company employs more than 3,800 professionals serving clients and candidates in more than 20 countries through its Hudson and Highland Partners businesses. More information is available at http://www.hudson.com.

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Deloitte Chief: Unvestors Expect Too Much of Audits

By SHAWN MCCARTHY

Monday, October 17, 2005 Posted at 4:57 AM EDT

Globe and Mail Update

NEW YORK ? Faced with lawsuits and regulatory pressure, William Parrett, chief executive officer of one of the world’s Big Four accounting firms, says the investing public is demanding more from auditors than they possibly can deliver.

Like other auditing firms, Deloitte Touche Tohmatsu has been on the defensive since Arthur Andersen LLP was forced out of business three years ago, as a result of the failure of its auditors to sound the alarm over financial chicanery at Enron Corp.

Deloitte is facing several high-profile lawsuits, including a class action suit by investors in the near collapse of Italian dairy giant Parmalat Finanziaria SpA, as well as some embarrassing regulatory wrist-slapping by an oversight board that recently reviewed and criticized several of its audits.

In an interview in his Manhattan office, Mr. Parrett acknowledged the industry, including Deloitte, has had to improve its performance in recent years, both in terms of the rigour of its audits and in eliminating any potential conflict of interest between auditing and consulting work.

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But he also argued there are limits to what an auditor can detect — and that those limits often fall far short of what investors expect from the process.

“We’ve always had this expectation gap between what the auditor really can do and what the investing public wants the auditor to do, or wants the audit to represent,” he said.

He said investors expect a level of detail that audits are not designed for, and expect a certification to assure the company’s financial health when it simply is meant to attest to the accuracy of the financial statements, based on information provided by the company.

Auditors are now being held responsible for failing to detect outright fraud perpetrated by several company insiders who go to great lengths to hide their illicit activity, he said.

And he gave the Parmalat scandal as an example of such “collusive fraud.”

Two partners from Deloitte’s Italian branch have been indicted along with several Parmalat executives and bankers for allegedly conspiring to hide nearly $17-billion (U.S.) in debt in an intricate web of offshore companies.

At the same time, shareholders are suing Deloitte and several international banks for allegedly enabling Parmalat’s financial deception.

Mr. Parrett would not discuss details of the lawsuits, except to broadly defend the firm’s actions.

“It’s really extremely difficult for the auditor to find a collusive fraud. We fundamentally were on top of this issue but it had been going on for a number of years,” he said.

Earlier this month, Deloitte was embarrassed by the Public Company Accounting Oversight Board — a monitoring agency set up by the U.S. Congress — when it reviewed 125 recent audits by the company and criticized eight, including four in which companies had to restate earnings.

Mr. Parrett said the company moved to correct deficiencies revealed by the oversight board’s review and disagreed with some of its conclusions. Contrary to public impression, he said, auditing work requires judgment calls in which different professionals can reach different conclusions — including on items as fundamental as earnings per share.

The demands of the post-Enron age have fundamentally altered the business landscape for accounting firms like Deloitte, which spans the globe with member firms in 148 countries including Canada.

After years of consolidation, the demise of Arthur Andersen left only four major, global firms, Deloitte, KPMG LLP, Ernst & Young LLP, and PricewaterhouseCoopers LLP.

As a result of Enron and other corporate scandals, U.S. corporations are required under the Sarbanes-Oxley Act to allocate more resources to auditing, with senior corporate executives personally responsible for certifying the results.

The increased emphasis on accounting rigour would suggest a windfall for the Big Four auditing firms. But, while business is good, Mr. Parrett said the industry is facing a shortage of qualified people and has had to shift resources from other areas of practice.

Deloitte saw the global revenue of its member firms rise 10.2 per cent to $18-billion (U.S.) in the fiscal year ending in May. Auditing revenue was up 15 per cent.

“I don’t think there was an economic windfall for the firms,” he said. “On balance, I wish we could all have forgotten about the last five years because it’s been negative for everybody.”

The CEO said his firm has been working hard to address the shortcomings that have been identified by investors and regulators.

It has appointed an ethics officer in each of its member national companies, which are separately incorporated partnerships. It has beefed up audit teams, required deeper investigation to confirm results, and expanded its use of review teams to check the initial audits.

“We need to continue to be diligent around our procedures and continue to focus on doing a better job to meet these expectations,” he said.

“But with all the proper procedures and checks and balances, there’s no way that fraudulent activities will ever be fully eliminated from the business community or the world at large.”
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