PEOPLEKPMG UK names forensic head
KPMG has appointed Alex Plavsic as head of its UK forensic practice. Plavsic will take over from Adam Bates, who is to become the UK head of risk and compliance while remaining global chairman of the forensic arm.
During his 18 years with KPMG, many of Plavsic’s cases have involved bribery and corruption matters, including presenting to the US Securities and Exchange Commission and UK Serious Fraud Office.
“With the full scale of recession-related fraud and litigation yet to unfold, there is no doubt that forensic skills will be much in demand in the coming years,” Plavsic said.
KPMG said its forensic practice has seen significant growth in recent years, with revenue growing about 30 percent in 2008 to more than £80 million ($126 million).
The firm’s forensic workforce has swelled from about 250 employees in 2006 to 360 this year.
CSRKPMG Australia joins indigenous programme
KPMG claims to have become the first accounting firm in Australia to enter into a Reconciliation Action Plan (RAP).
The plan aims to help bridge the gap between indigenous and non-indigenous opportunities through the development of an alliance between the Big Four firm, Indigenous Enterprise Partnerships and Reconciliation Australia.
KPMG’s RAP focuses on building business leadership, cultural awareness and indigenous employment within the firm and Aboriginal communities.
KPMG’s national chairman Michael Andrew said it is essential for the business community to get active in indigenous affairs.
“The gap between indigenous and non-indigenous Australians remains a major issue for our nation, and corporate Australia can contribute enormously to creating opportunities and employment pathways for Aboriginal and Torres Straight Islanders,” Andrew said.
STRATEGYGT launches health care resource centre
Grant Thornton US plans to launch a health care reform resource centre to help organisations navigate the impact of health care reform changes being debated by Congress.
Three major health care bills could introduce significant changes to the US health care system.
Areas the Grant Thornton centre will focus on include tax planning and considerations, readiness needs assessment, gap analysis, solution selection, security implications and assessments, and programme implementation assistance.
RECRUITMENTUS financial execs cautious over new hires
Only one in four US senior financial executives plan to increase their staff hiring in the next six months despite many (74 percent) believing the recession will end in 2010, according to a recent survey by Grant Thornton US.
The survey also found only 10 percent of respondents think the US economy will continue to get worse, 21 percent less than respondents to the survey in March 2009.
However, less than half of respondents expected their company’s financial prospects to improve in the next six months with 13 percent expecting them to get worse.
Grant Thornton surveyed 849 chief financial officers and senior comptrollers across the US from 21 September to 2 October 2009.
MERGERS AND ACQUISITIONSUS Baker Tilly member in $175m merger
Parente Randolph, a Baker Tilly International member firm and Beard Miller Company, a former BDO International member firm, have officially merged to form a $175 million mid-Atlantic region practice.
The new firm, ParenteBeard, will continue as a Baker Tilly International member. It has more than 170 partners and more than 1,200 staff across Pennsylvania, New York, New Jersey, Maryland, Delaware and Texas.
Former Beard Miller Company chairman Lamar Stoltzfus has become the chairman of the new firm. Former Parente Randolph chairman and chief executive Bob Ciaruffoli is the new chief executive.
A 13 member board of directors has been formed, comprised of members of each firm’s partner group.
CSRPwC takes part in water scarcity impacts study
PricewaterhouseCoopers (PwC) is partnering two US organisations to conduct a study of the impacts of water scarcity and climate change on US municipal bonds.
US municipal bonds are typically considered safe investments and are highly sought after by institutional investors, including life insurers and pension funds in the US.
PwC’s UK sustainability and climate change practice will lead the network’s involvement in the collaboration, which also involves CERES, a coalition of US investors and environmental groups, and US company Water Asset Management.
PwC UK director Celine Herweijer said the US has hundreds of billions of dollars invested in water infrastructure, plus investments in water-intensive sectors.
“Many of these systems are designed assuming that future water patterns in the US will not change,” she said.
“We know that with climate change, the past is not the best guide to the future. Alongside the stresses on water resources from growing populations, industrialisation and land-use change, climate change will affect the availability and quality of the US’s water, with negative implications in some regions and positive in others.
PwC will provide risk modelling work, which involves investigating multiple issues of physical water risks, regulatory water risks and socio-economic drivers of water availability.
According to PwC, energy production currently accounts for about 39 percent of all water withdrawals in the US and 31 percent in the EU.
STRATEGYCrowe Horwath launches reporting solution
US firm Crowe Horwath has launched an American Recovery and Reinvestment Act reporting solution.
The programme, called Award Monitoring and Reporting (AMR), has been launched as state and local agencies that received federal funding face reporting requirements.
AMR is a web based system that serves as a centralised database where recipients can collect the information they need for compliance with grant requirements.
According to the firm, the new reporting system streamlines the data collection that is necessary for those requirements.
Recipients of federal funding will also be able to view the progress of the data collection efforts, send email reminders, review summarised response data, keep track of changes and generate reports in required formats.
OVERSIGHTKPMG UK questions PCAOB report
KPMG UK has disagreed with two judgements made by the US Public Company Accounting Oversight Board (PCAOB) when it inspected the firm in October and November 2006.
The US audit regulator said in a public inspection report published this month that in two of the audits it reviewed it appeared the firm did not obtain “sufficient competent evidential matter to support its opinion on the issuer’s financial statements”.
These deficiencies were a failure to perform sufficient procedures to evaluate the issuer’s decision not to record a loss contingency, and a failure to perform sufficient procedures to test certain accrued contingencies and reserves.
In response, KPMG said that audit and audit inspections require judgement and that it believed it did perform sufficient procedures.
The firm noted that neither of the matters identified by the PCAOB required it to perform additional audit work or reissue reports.
The PCAOB inspects all firms that audit companies listed on US capital markets.
STRATEGYKPMG to provide funding to international valuations council
KPMG is providing funding to the International Valuation Standards Council (IVSC).
KPMG US partner Steven Sherman said the support recognises the need for a single set of global valuation standards.
“In an increasingly global business environment, the valuation issues surrounding mergers and acquisitions, financial reporting, restructuring, tax planning and disputes have become more complex than ever,” he said.
The investment has been welcomed by IVSC Board of Trustees chairman Michel Prada.
“The support by KPMG is tangible evidence of a growing consensus of the role the IVSC will play in restoring confidence in the world’s financial markets,” Prada noted.
“The current global financial and economic crisis has added urgency to the work of the IVSC – developing standards and guidance to support quality performance by the global valuation profession.”
PEOPLEBig Four firm admits Europe strategy partner
KPMG has appointed Blair McCallum as a partner in the firm’s European operational strategy group.
KPMG’s European operational strategy group leader Martin Scott described McCallum as one of the leading thinkers on lean management techniques in the market.
“Blair will be working with our key corporate and M&A clients across Europe who, in a turbulent market, will need to focus on operational transformation to sustainably adapt and improve the profitability of their business portfolios, and to create effective M&A strategies around robust operational improvements and synergy plans,” Scott said.
Prior to his appointment, McCallum was a partner at private equity firm 3i and has been a partner at management consulting firm McKinsey & Company, where he helped found the firm’s operations practice.
PEOPLEIndian accounting official commits suicide
The Indian profession is mourning the death of a senior Institute of Chartered Accountants of India (ICAI) official after he committed suicide.
K Venkitraman, 46, who spearheaded IT initiatives at the institute, is reported to have jumped from his sixth floor apartment in east Delhi at 6.40am earlier this month.
Police said he was rushed to hospital but was pronounced dead upon arrival.
Police are not treating the incident as suspicious.
Venkitraman was alleged to have suffered a deep depression, which police said may have led to him taking his life.
The ICAI noted Venkitraman had led technological changes at the institute for the past seven years “relentlessly and with great success”.
He is survived by his wife.
OVERSIGHTPCAOB turns focus on Mexican firm
The US Public Company Accounting Oversight Board (PCAOB) identified deficiencies in two audits when it inspected PricewaterhouseCoopers Mexico (PwC) in 2006.
In both cases it appeared to the inspection team the firm did not obtain sufficient evidential matter to support its opinion on the issuer’s financial statements.
The deficiencies included a failure to perform sufficient procedures to test revenues, vendor discounts and rebates, inventory existence and valuation, and litigation claims and assessments.
PwC said it has addressed the PCAOB’s concerns and that in no cases did the additional procedures change the audited financial statements or audit reports on the statements.
RESEARCHUK workers understand need to freeze pay – PwC
Workers at UK companies are understanding when drastic changes to their pay, benefits, bonuses and or working hours have been made during the current economic climate, according to a recent survey by PricewaterhouseCoopers (UK).
Nearly half of the 729 respondents made that statement while only 8 percent said the changes made them angry.
However, the survey also found that 34 percent were de-motivated by the decisions.
PwC partner and head of reward Jon Terry warned that pay and promotion freezes, changes to pension schemes, cuts in recruitment and slashed training budgets, combined with poor communication, had eroded the bonds of trust between some employers and their employees.
“As the long-term impact of people decisions taken during the downturn begins to be felt, the winners and losers of the war for talent are starting to reveal themselves,” Terry said.
“Those who continued to focus on investment and employee engagement [are] emerging as clear leaders. Those who continued to offer their employees new opportunities and invested in their people pipeline are now at a competitive advantage.”
PEOPLEAlvarez & Marsal hires private equity directors
US firm Alvarez & Marsal has made nine senior appointments to its private equity performance improvement practice.
Ron Bernard and Stephen Griffin are joining as managing directors in New York and Boston, respectively; Joel Mostrom as a senior director in New York; Paul Kosturos as a director in San Francisco; and Fabiana Fakhoury, Simon Flax, Jeffrey Klein, Jennifer Kim and Daniel Schellenberg as directors in New York.
The firm also expanded its national transaction advisory group adding eight professionals and two senior tax professionals.
The transactions advisory group now has more than 150 professionals in the US.
It offers private equity services, encompassing transaction advisory, performance improvement, tax advisory and corporate finance.
PEOPLEMoss Adams grows partnership
Moss Adams has admitted six partners and two managing directors. The US Praxity member firm has 250 partners.
The new partners are Julie Desimone, Jeff Fey, Shannan Gardner, Don Greear, Stephanie Hathaway and Fred Peterson. Scott Kallander and Tammy Young are the new managing directors.
STRATEGYMoore Stephens launches property advisory group
Moore Stephens International is to launch a global property funds management advisory group.
The group will offer investors an opportunity to access advice concerning cross-border property transactions from an international source.
Moore Stephens Melbourne tax partner Stephen O’Flynn will chair the new forum, which is comprised of members from Australia, the Netherlands, Argentina, Germany, Greece, Singapore, South Africa, Spain, the UK and the US.
PEOPLEKPMG appoints human resources leader
KPMG has appointed Rachel Campbell as its global head of people, performance and culture. Campbell has become a member of KPMG’s global executive team, while retaining her position as head of people for KPMG Europe.
LEGALErnst & Young UK begins Equitable appeal
Ernst & Young (E&Y) UK has begun an appeal against the findings of a professional disciplinary organisation concerning the firm’s work on the audit of the Equitable Life Assurance Society (ELAS).
The appeal is being heard by a tribunal of the Joint Disciplinary Scheme (JDS) for Accountants and was scheduled to run for two weeks this month.
After a near collapse, ELAS filed a civil suit against E&Y for £2.6 billion ($4.14 billion) for professional negligence.
The Big Four firm attempted to block a JDS probe in 2002, claiming the civil proceedings against it could be prejudiced by the outcome.
The JDS had alleged that E&Y partner Kevin Paul McNamara and former partner Richard George Combes submitted accounts that were not prepared in accordance with the provisions of the Companies Act 1985.
It also criticised E&Y for giving an unqualified audit opinion of ELAS’s Companies Act accounts between 1994 and 2000. INDEPENDENCE Non-audit service debate builds steam
The UK audit regulator is reopening the debate on audit firms providing non-audit services to listed audit clients.
In May, a Treasury Select Committee report called for the appropriateness of the provision of non-audit services by auditors to audit clients to be revisited.
In response, the Auditing Practices Board (APB) has issued a consultation paper on the issue.
APB chairman Richard Fleck said the regulator is seeking to determine the level of support for the Treasury Select Committee’s view that investor confidence and trust in audit would be enhanced by a prohibition on audit firms conducting non-audit work for the same company.
PEOPLEPwC Global appoints sustainability and climate change leader
Malcolm Preston is the new leader of the PricewaterhouseCoopers (PwC) global sustainability and climate change business.
Preston is also the leader of PwC UK’s sustainability and climate change practice.
PwC UK has also appointed Celine Herweijer as the firm’s new director of risk modelling and adaptation services.
PwC UK chairman and senior partner Ian Powell said that with the Copenhagen climate change summit fast approaching, business is waking up to the fact that climate change is too important to be left to policy makers and government alone.
“PwC is in a unique position to make a difference,” he said.
PwC plans to work with both public and private sector clients to identify the threats and opportunities arising from climate change.
REGULATIONBritish partner rotation rules finalised
The UK Auditing Practices Board has amended Ethical Standard (ES) 3 Long Association with the Audit Engagement to allow audit committees to extend the rotation period for audit partners from five to seven years in certain circumstances.
When the extension is granted, there must be clear disclosure in annual reports of the audit committee’s decision and the reasons for it.
Changes have also been made to the standard in respect of the rotation period for engagement quality control reviewers and further guidance has been included on factors affecting the significance of the threat to independence where other partners and senior staff are in senior positions for a long period of time.
ES 3 (Revised) applies for periods beginning on or after 15 December 2009.
PEOPLE Mid-tier firm promotes 12 senior staff
RSM McGladrey and McGladrey & Pullen has promoted 12 employees to partner and managing director positions.
Three staff were made tax partners and two were promoted to managing directors within the tax business. There are two new consulting partners and one new consulting managing director. There are also two new partners within the audit, assurance and provident financial management businesses.
RSM McGladrey president Charles Andrews said each of these individuals has made significant contributions to the success of our firm.
“I am confident that they will be strong leaders and I wish them much success in their new roles as partners and managing directors,” he said.
The appointments were effective this month.
PEOPLEKPMG transaction services leader named
KPMG UK has appointed John Kelly to lead its transaction services business.
Trained as an integration specialist, Kelly began at KPMG as a consultant and moved into the transaction services department in 2002.
“After the dramatic fall in M&A activity in the last 18 months, we are starting to see the first tentative signs of cautious optimism,” Kelly said.
“We have already seen one high profile example of a joint venture in telcos and we expect to see many more, particularly in sectors such as energy and banking, as companies look to tap into growth markets in the East and balk at clawing back M&A premiums.”