I’d like to anonymously report that Grant Thornton is conducting another round of layoffs, affecting approximately 150 employees, primarily within the tax division. This comes amid broader concerns about the firm’s direction and workforce strategy. All impacted have been notified but this comes less than six months since 350 were laid off surrounding PE deal.

A quick Reddit search to see if we could find anyone talking about layoffs at GT gave us this:

Grant Thornton Layoffs
byu/HarryNobz inAccounting

Alright, confirmed. We should have written this up Friday night, alas did not and WSJ scooped us. It happens. Some details WSJ received:

“Grant Thornton has made targeted staffing decisions to best meet the needs of the clients, markets and industries it serves,” the firm said in a statement.

The affected employees will receive their full salary and benefits through the end of the calendar year and a severance package, Mark Margulies, national managing principal for U.S. tax services, said in a memo to tax staff reviewed by The Wall Street Journal.

The cuts are primarily focused on “meeting market demand and reallocating capacity from where growth has slowed to areas where growth is accelerating,” Margulies said in the memo.

*insert jerk-off hand motion here*

The post-PE deal layoffs referenced by our tipster happened in May. Catch up on that here:

TLDR: In May, two months after the majority sale to New Mountain Capital was announced, GT laid off about 3.5% of the workforce across all service lines. This on top of the three percent they laid off the prior spring and about 200 people axed last November. As far as we know, GT US’s headcount is around 9,700.

Here’s a bit WSJ didn’t report, courtesy our tipster:

Less than a month ago, they sent all of the partners and managing directors to the Bahamas for a firm meeting to celebrate our 100th year of the firm.

Nice. Of course they did. They were probably also celebrating the impending merger with Grant Thornton Ireland, a deal that was backed by — you guessed it! — New Mountain Capital. Allegedly GT Ireland’s 45 equity partners were looking at payouts around €6.5 million ($6.9 million USD) in cash for the GT US deal.

Grant Thornton US had supposedly been waving New Mountain Capital’s money around hoping to have a three-way merger between them, Ireland, and GT UK however GT UK appeared to want nothing to do with this unholy threesome and went with a different private equity firm in their own deal.

According to FT’s sources, Grant Thornton UK was able to get bidding up to approximately £1.3 billion ($1.6 billion USD) in an auction organized by Rothschild, only slightly short of the £1.5 billion partners were hoping for. GT UK revenue for 2023 was £654 million with operating profit of £146 million ($183 million USD). These PE firms have lost their minds.

The Bahamas trip is of course unconfirmed but we wouldn’t be at all surprised. We’ll see if we can dig up more, get in touch if you have anything to add.

Chipman69, you know what to do.

The post Grant Thornton Partners Partied in the Bahamas Before This Latest Round of Layoffs (Allegedly) appeared first on Going Concern.

Grant Thornton’s 2024 State of Work in America survey was released today and these key findings alone will make you depressed (if you aren’t already).

• 51% of respondents reported to have suffered burnout in the past year
• 63% named mental and emotional stress as the top cause of burnout
• 40% said people shortages are the most stressful part of working at their organization

Fun. It gets worse. The number of respondents suffering from burnout in the past year jumped by 15 percentage points from last year’s survey.

Respondents said the top causes of burnout were mental and emotional stress at 63%, followed by long hours at 54%.

Alongside the rise in burnout, respondents reported a decline in their overall well-being in 2024, noting a decline in key areas, including mental (32%) and financial (30%) health.

Said Joe Ranzau, managing director of Growth Advisory Services at Grant Thornton: “External factors such as increasing global conflicts, post-pandemic inflation and a particularly stressful political environment are all outside stressors that can burden the minds of employees, who in turn bring these worries with them into the workplace.” Tell us, are global conflicts and politics weighing on your mind at work?

Here’s what respondents had to say about why they’re burned out at work:

And here’s what they had to say about which parts of their job are most stressful:

Now let’s talk compensation. Rather, let’s let GT’s press release talk compensation:

When asked what initially drew them to their organizations, respondents cited benefits (48%) and base pay (45%) as the top two factors. These same elements also play a key role in retention, with 53% identifying benefits and 44% highlighting base pay as the main reasons they remain with their current employer.

Now, with rising costs and inflation continuing to impact households, employees are becoming more critical of their wages and the costs associated with their benefits. To address this, leaders must leverage market data to stay competitive, practice transparency regarding their organization’s financial standing and ensure clear pay practices are in place.

Alright, we’re with you so far.

Rob Ginzel, director of Growth Advisory Services at Grant Thornton, notes that, over the past few years, workers have had the advantage in compensation negotiations, resulting in widespread wage increases. However, inflation over the last year has eroded those wage gains, and the hiring dynamic is now shifting back toward an employer-favored marketplace.

“In times of financial constraints, employers need to recognize that compensation isn’t just about salary,” said Ranzau. “Employees value flexibility in areas such as work schedules, job content and how and where work is done. But employers should be mindful that when salaries are lower, trade-offs — such as adjusting workloads or expectations — may not be as effective in retaining talent.”

Accounting firms:

Continuing on:

An interesting finding from the survey is that only 10% of workers expressed concern about potentially being laid off in the next year, despite job security ranking highly as a motivator for staying with an organization. The survey also found that 25% of workers currently hold a second job, and 37% are considering one, which can quickly contribute to declining wellness and increasing burnout.

A lot of them are probably not all too concerned because they want to get laid off.

Respondents also seem to be fairly confident they won’t be replaced by AI in the next 12 months. To the statement “I am concerned that my job will be reduced/replaced by AI in the next 12 months,” 28% fell in the agree pile, 16% neither agreed nor disagreed, and 56% disagreed or completely disagreed. This despite AI being incorporated into many of their workplaces in the past year.

You can find the full survey here.

Grant Thornton survey: Employee burnout continues to surge as mental and emotional stress mount [Business Wire]

The post Feeling Burned Out? Join the Club appeared first on Going Concern.

Grant Thornton Ireland and Grant Thornton US are to merge their advisory and tax businesses, in a deal backed by New York private equity firm New Mountain Capital.

New Mountain Capital is the same private equity firm that took a majority state in our GT in March.

The GT Ireland business has about 2,800 staff, which includes 72 partners. As always with these kinds of deals, the audit side will remain its own thing.

Talk had been that GT US wanted to merge with Grant Thorntons UK and Ireland both, no word on what happened with the other half of that potential tie-up.

Grant Thornton Ireland and US firm to merge non-audit businesses [Irish Times]

The post Grant Thornton Merges With Grant Thornton appeared first on Going Concern.

Grant Thornton UK has begun sounding out private equity firms over a potential deal that could see them buy into the business, which is jointly owned by more than 200 partners.

Grant Thornton UK, which employs more than 5,000 people, said it was not “actively engaged” in a transaction but that it “continually evaluates” the business landscape.

The firm is said to be working with advisers from Rothschild, which declined to comment.

Shortly after that, out came a story suggesting that Grant Thornton US was in the market to buy their Brit and Irish cousins across the pond. This is from “Grant Thornton explores three-way merger,” published by Financial Times in the latter half of July:

Under the three-way merger plan, the current partners of the UK and Irish firms would become shareholders in an international holding company led by Grant Thornton’s US private equity owners and partners. Relative valuations of the firms had yet to be discussed and the UK and Irish firms could decide to pursue different deals or none, according to people familiar with the matter.

The UK firm has already hired Rothschild to explore options for its business. Bankers have begun seeking expressions of interest from private equity firms that could provide an alternative to a merger with the US firm.

Our take on that: Grant Thornton Wants to Have a Threesome?

In the weeks and months that followed, several more stories came out about this alleged heated battle to buy (literally) Grant Thornton UK’s heart. We don’t need to link them all but here’s a recent one. Sky News put this out on October 15:

A trio of buyout firms have been shortlisted to buy a stake in the UK operations of Grant Thornton, one of Britain’s six biggest accountancy firms.

Sky News has learnt that Cinven, EQT and New Mountain Capital – the backer of Grant Thornton’s US business – have made the cut in a process that could value the UK firm at more than £1.5bn.

Other contenders, including Permira and Carlyle are said to no longer be in contention, although insiders cautioned that the list was subject to change.

Oh my God just sign something already. It sounds to us like someone or someones at Grant Thornton is/are desperately trying to seed rumors of a bidding war among private equity firms vying to be the lucky one to win a piece of Grant Thornton. No other firm has dragged out this song and dance, they do the thing and move on. Please try that, GT.

Related:

The post Sh*t or Get Off the Private Equity Pot, Grant Thornton appeared first on Going Concern.

Grant Thornton and Grant Thornton Lite today announced a partner, principal, and managing director class of 56 people. They’re going to make us do math here to figure out how many partners and principals they have this year so we can compare it to prior years. Sorry, MDs, you’re left out.

Historical number of partners and principals promoted each year at Grant Thornton:

• 2024: 22
• 2023: 43
• 2022: 38
• 2021: 46
• 2020: 30
• 2019: 42
• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

Because this is the first PPMD announcement since Grant Thornton’s huge private equity deal and mixing attest services in with PE-backed entities is a no-no, they made sure to separate the audit and non-audit peeps. Everyone get used to these convoluted announcements, it’s only going to get worse from here.

In total, Grant Thornton Advisors LLC, which provides non-attest services, admitted nine new principals and promoted 22 professionals to managing directors. At the same time, Grant Thornton LLP, which provides attest services, admitted 13 new partners and promoted 12 professionals to managing directors. These appointments and promotions are effective August 1, 2024.

Seth Siegel, CEO of Grant Thornton Advisors LLC, emphasizes that the newly named leaders will serve clients with excellence and propel Grant Thornton forward at a poignant moment for the firm.

Poignant, that’s a new word for them. At least we got one familiar DYNAMIC among all this word salad.

Thanks for internalizing last year’s criticism and giving the people what they want, Seth.

Audit wins the PPMD race by a long shot with 44% of the newly promoted peeps coming from there and the only service line to have any new partners. Coming in second — and reminder, this is a separate entity — is tax with 27% followed by advisory at 20% and internal services at 9%.

New PPMDs at Grant Thornton LLP (the audit business):

New PPMDs at Grant Thornton Advisors (the PE side of the business that they will remind you multiple times is a totally different business from the attest side):

New this year thanks to private equity is the following disclaimer at the bottom of the promotions press release:

“Grant Thornton” is the brand for two professional-services entities: Grant Thornton LLP, a licensed, certified public accounting (CPA) firm that provides audit and assurance services ― and Grant Thornton Advisors LLC (not a licensed CPA firm), which exclusively provides non-attest offerings, including tax and advisory services. With revenues of $2.4 billion for the fiscal year that ended July 31, 2023, and dozens of offices nationwide, Grant Thornton represents a community of almost 10,000 problem solvers, relationship builders, and industry specialists who know that how we serve matters as much as what we do.

Grant Thornton LLP, Grant Thornton Advisors LLC and their respective subsidiaries operate as an alternative practice structure (APS). The APS conforms with applicable laws, regulations and professional standards, including those from the American Institute of Certified Public Accountants.

Grant Thornton LLP and Grant Thornton Advisors LLC serve as the U.S. member firms of the Grant Thornton International Ltd (GTIL) network. GTIL and its member firms are not a worldwide partnership and all member firms are separate legal entities. Member firms deliver all services; GTIL does not provide services to clients.

Congrats to all.

Grant Thornton names 56 new partners, principals and managing directors [Business Wire]

The post Promotion Watch ’24: 56 People Rise to the Top of the Heap at Grant Thornton* appeared first on Going Concern.

The Chicago-based firm is in the process of notifying the workers this week, people familiar with the matter said. The cuts, equating to 3.5% of the U.S. workforce, span advisory, audit and tax up to the level of managing director, the people said.

Grant Thornton has made targeted staffing adjustments to address evolving demand in select business segments, the firm said in a statement. “The firm continues to invest and grow its team, and is on track to deliver another fiscal year of strong performance,” the firm said.

Yeah you better have a fiscal year of strong performance.

GT’s US headcount is around 9,700. They laid off 3 percent of the workforce around this time last year, about 300 people, and shed another 200 in November 2023.

If anyone has more details holla.

The post Layoff Watch ’24: Grant Thornton Does 350 People a Favor appeared first on Going Concern.

That’s what happened last week when a group of academics presented AI-generated case studies on Big 4 malfeasance before Australian parliament. The academic who claimed responsibility for the submission — Macquarie University Professor of Accounting and Corporate Governance James Guthrie — had only started using Google Bard that same week and did not fact check Bard’s work. A+ trolling by Bard there.

Maybe this warning needs to be larger.

The Guardian:

The original submission falsely accused KPMG of being complicit in a “KPMG 7-Eleven wage theft scandal” that led to the resignation of several partners. It also accused KPMG of auditing the Commonwealth Bank during a financial planning scandal. KPMG never audited the Commonwealth Bank.

Deloitte’s general counsel, Tala Bennett, also expressed concern about the submission wrongly accusing her firm of being sued by the liquidators of the collapsed building company Probuild for allegedly failing to properly audit its accounts. Deloitte never audited Probuild.

The submission raised concerns about a “Deloitte NAB financial planning scandal” and wrongly accused the firm of advising the bank on a scheme that defrauded customers of millions of dollars. Deloitte told the Senate there was no such scandal.

It also accused Deloitte of falsifying the accounts of a company called Patisserie Valerie. Deloitte had never audited the company.

Patisserie Valerie was audited by Grant Thornton (incompetently) and Deloitte is well within its rights to be outraged by this mix-up because even the dumbest of AIs shouldn’t have gotten that one wrong. Worse, the accounting professor who received that information from Bard should have known better. If the burnouts here at Going Concern can remember which firm screwed up which audit you’d expect esteemed academics to do at minimum the same if not better.

“Deloitte supports academic freedom and constructive discourse in relation to those matters currently before the committee, however, it considers that it is important to have factually incorrect information corrected,” said Deloitte’s annoyed lawyer. “It is disappointing that this has occurred, and we look forward to understanding the committee’s approach to correcting this information.”

KPMG, too, was pissed and wrote a strongly worded letter to the academics’ employers to complain. There was a 7-Eleven wage theft scandal (“widespread systematic underpayment of workers by franchisees“) though it appears the only connection it has to KPMG is former Partner in Charge of KPMG Australia’s People Advisory Practice Dharmendra Chandran joining the 7-Eleven board post-scandal.

Having taken responsibility for the egregious mistake, Professor Guthrie proceeded to drive the bus over himself in a letter to the Senate. Some quotes from the letter as shared by Guardian and Americanized for our audience (as in we switched the S for a Z in “realize”):

“Given that the use of AI has largely led to these inaccuracies, the entire authorship team sincerely apologizes to the committee and the named Big Four partnerships in those parts of the two submissions that used and referenced the Google Bard Large Language model generator,” Guthrie said in the letter.

“Given we are also accounting academics, we are deeply invested in the public interest and ensuring accountability and transparency in the sector – which is why we unreservedly offer our apologies and deep regret.”

“I now realize that AI can generate authoritative-sounding output that can be incorrect, incomplete or biased,” Guthrie said.

Ahem.

With the apology out of the way, Guthrie stands by the overall sentiment that Big 4 firms are scandalous and might be in need of breaking up. “Our substantive arguments and our recommendations for reform remain important to ensure a sustainable sector built on shared community values,” he said in the letter. For further reading, see this Australian Financial Review opinion piece: “PwC scandal makes a case for breaking up the big four.”

Because the false statements were covered by parliamentary privilege, the firms can’t sue for defamation. So the lesson here is if you’re going to accuse Big 4 firms of things they didn’t actually do and don’t want to get sued for it, do it at a parliamentary inquiry.

The post Academics Let AI Ruthlessly Slander Big 4 Firms, They’re Very Sorry They Didn’t Think to Fact Check appeared first on Going Concern.

Here’s a tip that came in this evening:

Grant Thornton Advisory laid off around 100 people as of 11/3 after the firm adjusted what groups do and do not fall under advisory. Purely utilization based it seems, performance only a factor with a small few.

And here’s Fox Business with what they heard from an insider, confirmed by GT:

Grant Thornton LLP is laying off 200 people, its second round of layoffs in the past six months and an indication that the major players in the professional consulting and advisory business are preparing for an economic slowdown that could squeeze profits across corporate America, Fox Business Network has learned.

In May, the company cut about 300 jobs across its U.S. division; the recent cuts that began late last week haven’t been reported. They will mainly affect so-called advisory positions at the company, sources with direct knowledge of the matter tell Fox Business.

A spokesperson for Grant Thornton confirmed the layoffs. In a statement, he said, “The staffing changes reflect pockets of underutilization in limited business segments, and specialty areas that the firm is exiting due to market trends. We continue to invest in higher-growth areas of the business to even better serve our clients. ”

Earlier this weekend, another tipster sent in the text of an email sent out by leadership at the end of last week. It reads:

“Teammates,

This week, due to softened demand in specific Advisory offerings, we eliminated a limited number of Advisory positions and these actions concluded as of today. Additionally, we are winding down five specialty business offerings within Advisory: Restructuring, Enterprise Risk, Gov Con Risk, Icertis and Coupa. These decisions were not taken lightly and will enable us to shift investments into areas where we foresee sustained demand. This is one way we will keep the firm healthy and strong so we can continue to invest in the solutions our clients need most, and to provide expanding professional opportunities for our broader community of teammates in the future.

We have not reduced roles in Audit, Tax or ICS – these actions are limited to Advisory only. Our impacted teammates have our greatest respect and appreciation for their contributions, and we’ll continue to provide customary P&C support for them as they transition into new professional opportunities. We remain grateful for your compassion for teammates who have seen their roles eliminated, and for your continued support for each other.”

Said our tipster:

This is absolutely ridiculous. We just had a round of layoffs in May. Once that round (in May) was finished, Wade Kruse hosted a call thereafter for the advisory group at GT. In that call he was asked if he anticipated any further layoffs. He responded by saying no and that all the necessary headcount reductions were already made for the foreseeable future. People like him need to be held accountable. His words meant nothing in May and still don’t today. The public needs to be made aware of this.

This story is developing. If you have more info, thoughts, feelings, or rants directed at firm leadership feel free to reach out by email or text the tipline at 202-505-8885.

Earlier: Grant Thornton Layoff Numbers Are In (May 26, 2023)

The post Layoff Watch ’23: 200 People at Grant Thornton Can Now Go Work For a Real Firm appeared first on Going Concern.

Yavinka Mendis, a University of Manchester economics graduate, joined KPMG’s Manchester office as an audit associate in 2019. He worked there for just over a year, auditing investment banks among other things, before leaving and spending four months working for Domino’s Pizza while looking for other roles. Mendis eventually found one at Grant Thornton, where he spent nine months as an audit associate in the public sector assurance at the Manchester office before leaving to work in Spain.

Mendis says he left Grant Thornton because he was burnt out. A letter he received from the firm nearly 12 months after he left, published to his LinkedIn account, helps explain why: after looking back through its timesheet data and considering his Mendi’s ‘flexible benefit choices,’ Grant Thornton said it had realised that he’d earned less than the minimum wage for the time he’d spent there. It sent him £100 [$121.12] for the inconvenience and promised to make up the difference.

Mendis says he wasn’t aggrieved at his underpayment, and instead complimented Grant Thornton for its honesty. He didn’t respond to a request to comment for this article.

Although Mendis didn’t want to speak to eFinancialCareers, GT did and said they discovered that “a small number of our people were inadvertently paid under the National Minimum Wage threshold, owing to them having made significant salary sacrifice deductions via our flexible benefit choices and/or having worked longer hours during specific periods of the year” after an internal review. However:

[The firm] added that no one there actually receives a salary below the minimum wage threshold.

Indeed says the average salary for a Grant Thornton audit associate in the UK is £32,059, Payscale puts it in a range of £17k – £30k or an average of £23,031. While the National Minimum Wage is currently £10.42 ($12.64) an hour, assuming he spent a year at KPMG he would have started at GT in 2020 or 2021 at the latest, at which time minimum wage in the UK was up to £8.91 ($10.79).

Accounting firm apologises for paying trainee below minimum wage [eFinancialCareers]

The post Grant Thornton Apologizes to Ex-Audit Associate For Paying Him Less Than Minimum Wage appeared first on Going Concern.

• 2023: 43
• 2022: 38
• 2021: 46
• 2020: 30
• 2019: 42
• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

Unfortunately, GT CEO Seth Siegel did not use the word DYNAMIC a single time in the press release. Booooo.

Audit took the biggest piece of the pie for this year’s promotion class at 40% followed by 28% in Tax, 28% in Advisory, and 4% in Internal Services. The lucky winners are:

*Promoted earlier in 2023 with approval from Grant Thornton leadership.

Congrats to all. Just pretend Sasha Velour’s RPDR finale lip sync featured purple roses and that’ll be celebration enough.

Grant Thornton names 75 new partners, principals and managing directors [GT]

The post Promotion Watch ’23: Grant Thornton Elevates 75 New PPMDs appeared first on Going Concern.

The other day Grant Thornton sent out a firmwide email packed with words like “difficult but necessary decisions,” “values and culture,” and “continued investment in growth” to inform everyone that heads were soon to roll. While pointing out that “unlike peers,” GT’s revenue growth had been strong through March versus the prior fiscal year “thanks to the superb client service our team delivers,” the email said senior leadership would have to make personnel changes “as targeted and limited in scope as possible.” TL;DR the economy sucks, clients are pulling back on consulting work, and some people gotta go.

Grant Thornton’s revenue for the fiscal year ended July 31, 2022 was $2.3 billion, up by nearly 17% compared to the year prior ($1.97 billion). 2022 was a spectacular year for them but, you know, things happen. Consulting is slowing down and the sky high attrition of last year and the year before has now cooled down, leaving firms across the board with more people than they expected to have. Accountant shortage where?

Revisiting what GT CEO Seth Siegel said when the 2022 revenue numbers came out in October: “Our FY 2022 revenues demonstrate how effectively we’re delivering against our firm’s purpose: to make business more personal and build trust into every result. Not only are we providing clients with high-quality solutions and a peerless experience across our audit, tax and advisory service lines, but we’re doing it by supporting and caring for our people—enabling record-setting business performance in the process.”

So yeah, anyway, LAYOFFS.

In Risk Advisory, leadership held a “survivors” call with remaining team members on Tuesday and mentioned that low attrition necessitated these cuts. Added a tipster:

They said it won’t affect bonuses and salary increases at year end discussions [in two weeks].

It seems for that team anyway the damage was spread around all levels with around three each of associate, senior associate, manager, and senior manager let go.

That’s what we heard on our end. Wall Street Journal has better little birds than we do and had this to say:

Grant Thornton is laying off about 300 U.S. employees, or roughly 3% of its workforce in the country, people familiar with the matter said, as the professional-services firm navigates declining demand for its advisory and tax services.

The Chicago-based firm will have laid off the workers, mostly in the advisory and tax divisions, by the end of Thursday, the people said. Grant Thornton employs about 9,000 people in the U.S. and more than 68,000 globally.

In the email that first went out informing employees layoffs were coming, all service line leaders were mentioned — Janet Malzone, Renato Zanichelli, and Wade Kruse — so it was assumed cuts would be somewhat evenly spread around, though we did expect Advisory to have a slightly bigger portion. The firm said “pockets of underutilization” drove many of the cuts.

If anyone has more numbers or just would like to vent, reach out.

Update: A tipster tells us layoffs affected about 120 people in tax, mostly A1s but all levels had some losses. They add:

The worst part was that local partners had no input. All cuts were solely based on utilization and the assumption if you weren’t utilized enough you should be gone. Total ego move by upper management. People are way more upset than past layoffs because of how it was executed (solely based on number on a paper). Trust in all leadership is very low at all levels.

The post Grant Thornton Layoff Numbers Are In (UPDATE) appeared first on Going Concern.

Grant Thornton to perform layoffs across the firm. Numbers unknown. Areas impacted unknown.

Well then, that’s not very helpful is it. A quick search uncovered this Reddit thread from a few hours ago which along with many comments about how these hoes ain’t loyal contains what appears to be the text of an email that went out earlier today. To everyone? Just leadership? Unclear. Someone let us know. (Thank you tipsters who let us know the email went to everyone)

We’re writing today to inform you about difficult but necessary decisions that the Senior Leadership Team has made in response to changing market conditions. Over the next several days, we will reduce the number of roles in certain areas of the business. We will also re-allocate budget and capacity from parts of the business where growth has slowed to areas where growth is accelerating. These changes will be targeted and limited in scope.

As you are all aware, the economy has slowed in recent months. Macro-economic conditions have had varying degrees of impact across all parts of our business, reducing demand for some of our services – particularly in some of our consulting-focused businesses that may represent discretionary spend for clients.

Grant Thornton is not alone in facing this reality. Yet, unlike peers, our revenue growth had been strong through March versus the prior fiscal year thanks to the superb client service our team delivers. We also took proactive steps over the past several months to mitigate the effects of the slowing economy by tightening expense controls and aggressively pursuing new business. While we were cautiously optimistic that these actions would be enough to support continued investment in growth areas through this downturn, it is now clear that we need to do more.

The reductions we’ll make this week will be across our firm at varying levels. They were carefully considered and analyzed by our Senior Leadership Team, ensuring personnel changes are as targeted and limited in scope as possible. We are also taking every opportunity to minimize the number of impacted colleagues by redirecting teammates to apply for open roles in growing areas of the firm.

Here’s what you can expect over the coming days: Conversations to notify affected teammates will begin tomorrow morning. Our goal is to complete these conversations by Thursday morning. Our service line leaders – Janet Malzone, Renato Zanichelli and Wade Kruse – will hold all-hands calls for their teams on Thursday. ICS team leaders may call similar meetings late in the week. The four-day weekend in honor of Memorial Day will take place as scheduled.

To conclude, we’d like to focus on two key points.

First, we will lean into our values and our culture as we go through a difficult process with some of our teammates this week. While this will be a challenging week for the entire firm, we should never forget that it will be most difficult for the teammates who will be directly impacted.

These professionals have given their best to our firm, and they have added value to our team. They deserve, and will receive, our full respect and utmost care as we help them transition to their next professional opportunity. We will be providing severance benefits including salary continuation and professional outplacement services to help each individual identify their next career opportunity as soon as possible.

Second, these steps we are taking will enable us to advance our strategy and achieve the same goals we’ve talked about: namely, continued investment in growth, serving clients with value and quality, and providing teammates professional development opportunities.

To our colleagues who will learn this week you are impacted by these reductions, thank you for all you have done for Grant Thornton and the firm’s clients. We hold each of you in the highest regard and we will support you through this process.

With our deepest gratitude.

Mentioned in the above email, Wade Kruse is National Managing Partner for Advisory and appears in this YouTube video posted just four days ago on Grant Thornton’s YouTube channel. Probably not the best idea to take any of this advice given the situation.

Janet Malzone leads Audit and Renato Zanichelli rules over Tax so we can assume from the email that layoffs will hit from all sides.

Note to GT leadership: layoffs are not an INSTINCT FOR GROWTH.

Good luck on the chopping block this week, all. Let’s be honest, you’ll probably be better off.

The post Layoff Watch ’23: If You Work at Grant Thornton, You Might Not By the End of the Week appeared first on Going Concern.

Earlier this month, short seller Hindenburg Research dropped a report called Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History (report here) full of bullet points outlining the findings of Hindenburg’s two-year investigation into the Indian conglomerate. Among the various accusations: shoddy controls, nepotism, questionable shell company relations, and poor transparency (we’re being mild here).

A limited number of bullets from the report (yes this is “limited”):

• Many of the Vinod Adani-associated entities have no obvious signs of operations, including no reported employees, no independent addresses or phone numbers and no meaningful online presence. Despite this, they have collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals.
• We have also uncovered rudimentary efforts seemingly designed to mask the nature of some of the shell entities. For example, 13 websites were created for Vinod Adani-associated entities; many were suspiciously formed on the same days, featuring only stock photos, naming no actual employees and listing the same set of nonsensical services, such as “consumption abroad” and “commercial presence”.
• Our research indicates that offshore shells and funds tied to the Adani Group comprise many of the largest “public” (i.e., non-promoter) holders of Adani stock, an issue that would subject the Adani companies to delisting, were Indian securities regulator SEBI’s rules enforced.
• Adani Group’s obvious accounting irregularities and sketchy dealings seem to be enabled by virtually non-existent financial controls. Listed Adani companies have seen sustained turnover in the Chief Financial Officer role. For example, Adani Enterprises has had 5 chief financial officers over the course of 8 years, a key red flag indicating potential accounting issues.
• The independent auditor for Adani Enterprises and Adani Total Gas is a tiny firm called Shah Dhandharia. Shah Dhandharia seems to have no current website. Historical archives of its website show that it had only 4 partners and 11 employees. Records show it pays INR 32,000 (U.S. $435 in 2021) in monthly office rent. The only other listed entity we found that it audits has a market capitalization of about INR 640 million (U.S. $7.8 million).
• Shah Dhandharia hardly seems capable of complex audit work. Adani Enterprises alone has 156 subsidiaries and many more joint ventures and affiliates, for example. Further, Adani’s 7 key listed entities collectively have 578 subsidiaries and have engaged in a total of 6,025 separate related-party transactions in fiscal year 2022 alone, per BSE disclosures.
• The audit partners at Shah Dhandharia who respectively signed off on Adani Enterprises and Adani Total Gas’ annual audits were as young as 24 and 23 years old when they began approving the audits. They were essentially fresh out of school, hardly in a position to scrutinize and hold to account the financials of some of the largest companies in the country, run by one of its most powerful individuals.

The last auditors to touch Adani were the prodigy partners mentioned above. At the time that story dropped, there was mention of getting a Big 4 firm to give Adani a look and an Adani investor with $3 billion in exposure said it “welcomes the announcement by Adani to mandate one of the ‘big four’ accounting firms to carry out a general audit,” though no such arrangement was announced. We here at GC wondered out loud if Big 4 firms would even touch this mess, a report in Reuters yesterday answers in the negative that no, no they won’t.

India’s Adani Group has appointed accountancy firm Grant Thornton for independent audits of some of its companies in a bid to discredit claims by short-seller Hindenburg Research that have battered its stocks and bonds, two people familiar with the matter said on Monday.

The appointment marks the first major effort by Adani Group to defend itself in the wake of a Jan. 24 report by Hindenburg that accused it of improper use of offshore tax havens and stock manipulation.

The conglomerate, led by billionaire Gautam Adani, has strongly denied the allegations but investors remain concerned. Shares in the group’s seven listed subsidiaries have cumulatively lost about $120 billion in market value in the last three weeks.

The source told Reuters Grant Thornton has been hired to conduct independent audits of some Adani Group companies, and that GT would look at whether related-party transactions at Adani Group complied with corporate governance standards. We are eager to hear what Grant Thornton finds.

Update: Adani Group denies the Reuters report.

The post Grant Thornton Scores Coveted ‘Hot Garbage’ Audit (UPDATE) appeared first on Going Concern.

From 2016 until its 2020 inspection report, Grant Thornton had an average audit failure rate of about 21%. Not bad for a firm that had an average audit failure rate of 44% from 2010 to 2015. For 2021, GT’s audit failure rate is right around its most recent five-year average:

Our 2021 inspection report on Grant Thornton LLP provides information on our inspection to assess the firm’s compliance with Public Company Accounting Oversight Board (PCAOB) standards and rules and other applicable regulatory and professional requirements. This executive summary offers a high-level overview of:

Part I.A of the report, which discusses deficiencies (“Part I.A deficiencies”) in certain issuer audits that were of such significance that we believe the firm, at the time it issued its audit report(s), had not obtained sufficient appropriate audit evidence to support its opinion(s) on the issuer’s financial statements and/or internal control over financial reporting (ICFR); and

Part I.B of the report, which discusses deficiencies that do not relate directly to the sufficiency or appropriateness of evidence the firm obtained to support its opinion(s) but nevertheless relate to instances of non-compliance with PCAOB standards or rules.

[…]

Seven of the 31 audits we reviewed in 2021 are included in Part I.A of this report due to the significance of the deficiencies identified. The identified deficiencies primarily related to the firm’s testing of controls over and/or substantive testing of revenue and related accounts and inventory.

Seven botched audits out of 31 inspected comes out to a failure rate of 22.6%, the same rate as its 2019 inspection report but not as good as its 17.2% rate in 2020, which was an all-time best for Grant Thornton.

For 2021, five audits had problems in both internal control over financial reporting and in the financial statement, one had deficiencies in the financial statement only, and one had deficiencies in ICFR only. The most common Part I.A deficiencies in 2021 related to identifying controls related to a significant account or relevant assertion, testing controls over the accuracy and completeness of data or reports used in the operation of controls, evaluating the appropriateness of the issuer’s accounting method or disclosure, and performing substantive testing to address a risk of material misstatement, according to the PCAOB.

Three areas of the audit that Grant Thornton auditors found problematic were:

• Revenue and related accounts: The deficiencies in 2021 (as well as in 2020 and 2019) related to substantive testing of, and testing controls over, revenue.
• Inventory: The deficiencies in 2021 related to substantive testing of, and testing controls over, the valuation of inventory.
• Business combinations: The deficiencies in 2021 (as well as in 2020 and 2019) primarily related to substantive testing of, and testing controls over, the reasonableness of assumptions used by the issuer to determine the fair values of acquired intangible assets.

Grant Thornton auditors nailed all of their audits for issuers in the energy, financials, and real estate sectors, but they flubbed three out of 11 audits reviewed for issuers in the industrials sector, half of the audits inspected for issuers in the IT and communication services sectors, one out of three for issuers in health care, and one out of five for issuers in the consumer discretionary sector.

Ever read a Grant Thornton inspection report from the PCAOB? If not, now’s your chance.

The post Grant Thornton’s 2021 PCAOB Inspection Report Wasn’t Too Bad appeared first on Going Concern.

Back in August when it was announced that Guidehouse would be buying Grant Thornton’s public sector advisory practice, we wondered out loud if layoffs might be expected as they so often are in situations such as these. First, let’s do a quick refresher on the acquisition as reported in August:

A tipster reached out to us this morning to let us know the rumor mill is churning over Guidehouse potentially picking up GTPS. “This took some people by surprise when they read about it on Fishbowl,” our tipster said. This appears to be the post in question:

An unexpected 2 p.m. all-hands call was announced by noon and per our tipster, the deal is going through pending approval from antitrust regulators.

Things are moving quick: the deal is expected to close in 60 days, everyone will be sticking around (for now), and they anticipate the transition will be about a month and a half.

We were told that on that all-hands call in August, one person leading the call told staff no layoffs, the other said “no large layoffs.”

According to information we were provided today, approximately half of the old Grant Thornton partners who came to Guidehouse via the acquisition have been laid off. 12 specifically. And three MDs. So yes layoffs.

Grant Thornton’s media department did not entertain us when we asked about potential layoffs back in August, we imagine Guidehouse will take the same approach but we’ve reached out to them anyway.

Anyone with more info is welcome to use the contact information below. We’ll update if we hear more. Friendly reminder, this is as yet just a rumor.

Update:

A tipster has provided more information on the layoffs:

Seven were laid off this past Monday including the former head of all GTPS. In total your numbers are correct. There has been no communication from GH to employees about the layoffs which began in November.

Of course also on Monday was the kick off for 2023 meeting where it was announced the largest partner class had just been promoted.

Guidehouse did not respond to our request to comment.

The post Guidehouse Laid Off a Bunch of Old Grant Thornton Partners After the Public Advisory Practice Merger (UPDATE) appeared first on Going Concern.

If a PCAOB-registered accounting firm is a defendant or respondent in an administrative or disciplinary proceeding that was initiated by another regulator, that firm has to let the PCAOB know by filing Form 3, Special Report, within 30 days after the event. The firm also has to let the PCAOB know that it knows the disciplinary proceeding has been concluded.

These six firms must have forgotten to do that or something and, as a result, were fined and censured by the PCAOB:

• KPMG Samjong Accounting Corp. – $30,000 civil money penalty and censure
• BDO RCS Auditores Independentes – $30,000 civil money penalty and censure
• Grant Thornton Auditores Independentes Ltd. – $20,000 civil money penalty and censure
• Grant Thornton LLP – $40,000 civil money penalty and censure
• MaloneBailey LLP– $25,000 civil money penalty and censure
• KCCW Accountancy Corp.– $20,000 civil money penalty and censure

In the case of the Purple Rose of Chicago, which got the largest fine of the six firms, it didn’t disclose three reportable events to the PCAOB regarding two disciplinary proceedings brought against GT by the Utah Division of Occupational and Professional Licensing of the Department of Commerce and the Pennsylvania Board of Accountancy.

The PCAOB said:

In December 2016, the Utah DOPL simultaneously initiated and concluded disciplinary proceedings against Grant Thornton (“Utah Proceeding”). The Utah Proceeding concerned conduct that resulted in sanctions imposed on the firm by the U.S. Securities and Exchange Commission in a 2015 order. The initiation and conclusion of the Utah Proceeding each constituted a reportable event under Form 3, but Grant Thornton failed to file a Form 3 reporting those events until May 8, 2020.

Additionally, in January 2020, the Pennsylvania Board initiated disciplinary proceedings against Grant Thornton (“Pennsylvania Proceeding”). The Pennsylvania Proceeding concerned conduct that resulted in sanctions imposed on the firm by a 2017 PCAOB order. The initiation of the Pennsylvania Proceeding constituted a reportable event under Form 3, but Grant Thornton failed to file a Form 3 reporting it until May 8, 2020.

In its May 8, 2020 Form 3, Grant Thornton also belatedly disclosed that it had obtained twelve new, replacement, or additional licenses in eleven jurisdictions. Those changes in Grant Thornton’s licensing status constituted reportable events under Form 3, but Grant Thornton failed to disclose them to the board on a timely basis.

GT told the PCAOB that it has established and implemented several changes to its policies and procedures so this sort of thing will never happen again.

Related articles:

Fake Occupants Caused Some Some Problems in Grant Thornton’s Audit of Assisted Living Concepts
Grant Thornton Gets Dinged for Giving Partners with Audit Quality Issues More Work

The post Grant Thornton and Five Other Firms Got Coal in Their Stockings From the PCAOB appeared first on Going Concern.

Grant Thornton International Ltd today [Dec. 14] announced its revenues grew to a record USD7.2 billion for the financial year ended 30 September 2022, up from USD6.6 billion in 2021. This represents growth of 13.7% in constant currency terms. All major service lines and regions achieved double-digit growth in constant currency during another challenging year in many markets.

Global accounting firms like to use “local currency terms” or “constant currency terms” because they can make their year-over-year revenue increases seem much larger than they actually are. A 13.7% increase in revenue from 2021 to 2022 looks a lot better than a 9.1% increase. Anyway, GT’s prosperous 2022 gave global CEO Peter Bodin all the warm fuzzies:

“These results highlight the value of our continued focus on our network strategy and its ability to deliver sustainable growth for the network, despite another challenging year in many markets.

“Over the past year our member firms have continued to focus on helping their clients navigate volatile markets, whether due to geo-political tensions and their macro-economic consequences, or the ongoing impacts of COVID. Through all this, our firms have helped clients realise their international ambitions as businesses continue to look abroad for growth opportunities.

“These results also reinforce the true value of our multidisciplinary model for the network and for clients, as it enables us to invest in the technology and enhanced capabilities needed by today’s international clients. This in turn provides great opportunities for our people to further develop their skills and expertise – making Grant Thornton an attractive place to work.

“The resilience of our network will continue to be tested in the months and years ahead, but I have every confidence our member firms will continue to deliver for their clients, their people and their communities.”

We’re big fans of infographics (especially ones we don’t have to make), so here’s one that summarizes GT’s 2022:

In the U.S., Grant Thornton’s revenue was $2.3 billion for its fiscal year ending July 31, up nearly 17% from the $1.97 billion the firm brought in last year.

The post Grant Thornton’s Global Revenue Is On the Up and Up appeared first on Going Concern.

Australian Financial Review reports that GT is trialing a “nine-day fortnight” schedule starting next March without cutting anyone’s pay, so in essence it’s a two-week period which eliminates one day of work that you can use how you like to recharge. Here’s how a UK recruiting company explains it:

The 9-day fortnight is full-time hours
When you work five days one week and four days the next, your status remains as a full-time employee. This means you compress your working week into nine days where you either make up the hours you’ll be missing or take a small pay cut (typically around 10%).

Why choose a 9-day fortnight:

• Get a free day every other week
• Keep your income level
• Progress your career
• No ‘part-time’ label

Deborah O’Sullivan, MD at Ten2Two says, “A 9-day fortnight can be good for employers who are nervous about the business impact of approving a flexible working request in certain situations, particularly where the member of the team is so senior that they don’t feel they can lose their time in case it affects day-to-day business requirements.”

AFR writes:

[Grant Thornton] has recorded a significant uptick in work over the past two years but this, combined with the white-collar talent crunch, meant that its people were “working long hours” and “exhausted”, CEO Greg Keith said.

Greg Keith hopes a reduced workweek will improve staff wellbeing and productivity.

Looking for solutions that would improve staff wellbeing without compromising on work quality, his firm settled on trialling a nine-day fortnight in the hope it would refresh its people, reduce sick leave and improve productivity.

“This is counterintuitive – in an environment where we believe there are more opportunities than there are people, we’re reducing our hours,” he said. “But if we can make this work, then we will be working more efficiently, which will also ensure that our people have more interesting work.” Note to Mr. Keith: burned out people often find it difficult to be interested in work, especially when more of it is piled on them.

Scrolling down further, we see that “Nine-Day Fortnights” might occasionally average out to more than that over a longer period:

All Grant Thornton’s offices nationally will still be open five days a week to meet client needs during the trial, but staff will average across nine days each fortnight. This could involve 4.5-day weeks, nine-day fortnights, or some full 10-day fortnights in busy periods balanced with four-day weeks in quiet times.

“Our expectation is that if our people can be refreshed, that will have a direct effect on their health and wellbeing which in turn will have a direct flow-on to the quality of work which we deliver to our clients and the experience clients have,” Mr Keith said.

“With so many of the professional services’ workforce reporting increased stress and health issues, we remain convinced the current system is broken. We will be bold in trying something different as we want a better outcome for our people and our clients,” he said.

Keith said GT might pilot a four-day workweek depending on how this nine-day fortnight thing goes. Nine-day fortnights could become permanent if the trial goes well, “well” being defined by the firm as “maintaining the same training, business development and billable hours as in a 10-day fortnight, as well as improving client satisfaction, staff wellbeing and talent retention and attraction and potentially reducing sick leave.”

National accounting firm to trial nine-day fortnight [Australian Financial Review]

The post Grant Thornton is Trialing a “Nine-Day Fortnight” Schedule to Ease Burnout in Australia appeared first on Going Concern.

2022 was clearly one of the best years GT has had revenue-wise in quite a while, if not ever, as 2021 revenue grew just 2.6%, 2020 grew only 1%, 2019 grew 5.4%, and 2018 grew 3.4%.

“Our FY 2022 revenues demonstrate how effectively we’re delivering against our firm’s purpose: to make business more personal and build trust into every result,” said Grant Thornton CEO Seth Siegel, who moved into the corner office on Aug. 1 after Brad Preber retired. “Not only are we providing clients with high-quality solutions and a peerless experience across our audit, tax and advisory service lines, but we’re doing it by supporting and caring for our people—enabling record-setting business performance in the process.”

Unfortunately, Grant Thornton likes to keep revenue by service line hush-hush. We’ll refer back to a statement we received from a GT spokesperson in 2018 about why the firm doesn’t publish any revenue information for its service lines:

“We’ve decided to share revenues only at the firm-wide level as part of our effort to present ourselves to the market as one single firm, so unfortunately, there’s no additional detail I can share with you when it comes to the service lines.”

Whatever.

Grant Thornton remains the seventh largest accounting firm by revenue in the U.S., behind the Big 4, RSM US, and BDO USA.

The post Grant Thornton Achieves Dynamic Revenue Growth of 17% in 2022 appeared first on Going Concern.

Alright, let’s see what happened.

The first mistake OP made — if we don’t count interviewing with Grant Thornton as a mistake which we should — was cancelling five interviews after HR said a job offer was on the way. You should be shopping around, especially now when competition for talent is so high. Your future in public accounting hinges on your team and firm culture, not fitting in will make your already hellish life even worse. Granted, “firm culture” is a nebulous term firms enjoy trotting out for self-congratulatory press releases but it also has a huge impact on your day-to-day. By interviewing with several firms you’ll get a feeling for the firm and figure out if you’re a good fit. Trust your gut on this, if a firm you interview with gives you a bad feeling keep looking. When you’re shopping for a new pair of shoes and don’t know exactly what you want do you grab the first pair you come across when you Google “shoes”? No, you check a few out. Unless you are a sub 1 GPA student on parole who flunked Intermediate seven times, you are in demand. There is no reason to take the first offer that comes your way.

The second mistake was counting on a verbal offer. For all you know HR was rolling on molly that day (people get crazy when they’re working from home, ya know) and thought you were the greatest candidate ever to apply to the firm, doesn’t mean they actually want to hire you. We aren’t seeing offers getting pulled en masse yet but if the economy gets any worse that’s certainly a possibility so it’s more important than ever to remember that offers can and do get pulled, especially verbal ones. Keep your options open until you’re onboarded. Hell, always keep your options open.

As you can see from the edit OP clarifies that they applied online and not on campus but the advice to bring this to the school stands. Your school is a valuable source of talent for any firm, it would behoove them not to burn bridges like they are always warning you all not to do.

Anyone have field reports on campus recruiting to share? You know what to do. Best of luck to OP, I’m sure they’ll find something even better soon.

The post Young Accountant Narrowly Misses the Tragedy of Working For Grant Thornton appeared first on Going Concern.

The 96 new PPMDs in the class of 2022 surpasses the 87 in last year’s class, which had been Grant Thornton’s largest ever. But the group of 38 new partners and principals is lower than last year’s group of 46. Here’s a look at new partner/principal class sizes at Grant Thornton since 2010:

• 2022: 38
• 2021: 46
• 2020: 30
• 2019: 42
• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

By service line, advisory accounted for the largest number of PPMD promotions (46%), followed by audit (30%), tax (20%), and internal services (4%).

Here are the 26 new partners, 12 new principals, and 58 new managing directors at Grant Thornton who have had to update their LinkedIn profiles accordingly:

*Promoted earlier in 2022 with approval from Grant Thornton leadership.

Congrats to all of the GTers who had purple rose petals thrown at them on Aug. 1!

The post Promotion Watch ’22: Grant Thornton Admits 38 New Partners and Principals appeared first on Going Concern.

So we went on r/accounting and looked at the 2022, 2021 (and this thread on Fishbowl) 2019, and 2018 comp threads, as well as the 2017, 2016, 2015, 2014, and 2013 comp threads on Going Concern. Then we calculated the average raise percentage for each step up in rank or promotion where data was available (i.e., A1->A2, A2->S1, S1->S2, S2->S3, M1->M2, etc.).

These averages don’t take into effect factors like location/cost of living, line of service, academic degrees, rating (meets expectations or exceeds expectations), and bonuses/awards. (Although it looks like Grant Thornton didn’t do ratings this year.) This is just the average percentage of how much base pay increased per step up in rank/promotion.

Like many public accounting firms, Grant Thornton has a history of over-promising and under-delivering come comp time. Was that the case this year? 2022 raise percentages are in bold:

A1->A2

• 18.1% (2022)
• 9.8% (2021)*
• 7.5% (2019)
• 3.5% (2018)
• 4% (2017)
• 7% (2016; only one entry)
• 9.5% (2015)
• 9.5% (2014)
• 5% (2013)

* Not included in the averages because it’s such an outlier was a 41% raise for an A1->A2 who went from audit to advisory.

A2->S1

• 19.9% (2022)
• 17.8% (2021)
• 15% (2019)
• N/A (2018)
• N/A (2017)
• 10.5% (2016; only one entry)
• 14.3% (2015)
• 11% (2014)
• 10.3% (2013)

S1->S2

• 18% (2022)
• 17% (2021)
• N/A (2019)
• 20% (2018; only one entry)
• 5% (2017)
• 5% (2016)
• 14.9% (2015)
• 5.8% (2014)
• 4.2% (2013)

S2->M1

• N/A (2022)
• 19% (2021; only one entry)
• N/A (2019)
• N/A (2018)
• N/A (2017)
• 18% (2016; only one entry)
• N/A (2015)
• 18.6% (2014; only one entry)
• N/A (2013)

S2->S3

• 15.6% (2022; only one entry)
• 17.8% (2021)
• 7% (2019; only one entry)
• N/A (2018)
• 4% (2017; only one entry)
• 6.5% (2016)
• N/A (2015)
• N/A (2014)
• N/A (2013)

S3->M1

• N/A (2022)
• N/A(2021)
• N/A (2019)
• N/A (2018)
• N/A (2017)
• N/ (2016)
• N/A (2015)
• 7% (2014; only one entry)
• N/A (2013)

M1->M2

• 9% (2022)
• 34.8% (2021)
• N/A (2019)
• N/A (2018)
• 14.5% (2017)
• N/A (2016)
• N/A (2015)
• N/A (2014)
• 10.4% (2013)

M2->M3

• N/A (2022)
• N/A (2021)
• 8% (2019; only one entry)
• N/A (2018)
• N/A (2017)
• N/A (2016)
• N/A (2015)
• N/A (2014)
• N/A (2013)

M3->SM

• N/A (2022)
• 12% (2021; only one entry)
• N/A (2019)
• N/A (2018)
• N/A (2017)
• N/A (2016)
• N/A (2015)
• N/A (2014)
• N/A (2013)

How would we grade this year’s raises at Grant Thornton? We’d give it a grade of “incomplete.” Of the 90 comments currently in the 2022 comp thread, we only used data from 10 GTers. There’s actually a handful of shiny new GTers joining the firm in the fall who posted their starting salaries in the thread, so that may be of interest to some of you. Associates and senior associates seem to be the big winners, as the average raise percentages were higher this year than last. Keep in mind, though, that there were only three entries for S1->S2, with those average raise increases being 6.5%, 14.5%, and 33%. Needless to say, the person who got the 33% raise was thrilled; the person who got the 6.5% raise responded with just an “Eh.”

We’ll continue to keep an eye on the 2022 Grant Thornton comp thread on Reddit to see if there are new contributions, and we’ll update this post accordingly.

Related articles:

Compensation Watch ’21: Did Grant Thornton Give Employees Briefcases Full Of Money This Year?
Compensation Watch ’21: Grant Thornton Is Dragging Its Feet On Announcing Mid-Year Raises

The post Compensation Watch ’22: Did the Purple Rose Reek of Bad Raises at Grant Thornton? appeared first on Going Concern.

Here’s the press release KPMG sent out yesterday:

KPMG has named Diane Swonk – a prominent economist, recognized industry voice and sought-after business advisor – as Chief Economist. Swonk, based in Chicago, will lead the firm’s Office of the Chief Economist, which provides deep insights to clients on the economy and how it impacts strategy, growth and operations.

“Our Office of the Chief Economist offers leading economic intelligence to help our clients improve strategic decision-making,” said Tandra Jackson, Vice Chair – Growth and Strategy, KPMG LLP. “Diane’s broad experience and wide-reaching influence will be tremendously valuable in leading those efforts.”

Swonk joins KPMG from Grant Thornton LLP, where she served as chief economist. She has more than three decades of experience in financial services and consulting and serves as an advisor to the Federal Reserve and its regional banks. Swonk also serves on the U.S. Chamber of Commerce economic advisory board and is a member of the Council on Foreign Relations.

Additionally, Swonk also advised the Council of Economic Advisers (CEA) for the White House under three presidents and served two terms on the Congressional Budget Office’s panel of economic advisors. She was named a fellow by the National Association for Business Economics for her outstanding contributions to the field of business economics and was named among the 100 most influential economists in the world for her analysis of the pandemic. She received a lifetime achievement award from the Association for Corporate Growth.

Diane is deeply committed to educational attainment and diversifying the ranks of leadership. She serves on the board of the Posse Foundation in Chicago, an education and leadership program. She works extensively with the Yale Dyslexia and Creative Institute. She just joined the Harris Policy School Council at the University of Chicago after serving for 15 years on the Council for Booth School of Business. She also serves on the board of the Foundation for the National Association for Business Economics (NABE); she serves on the statistics committee for NABE to promote the quality and integrity of U.S. economic data.

She advises the University of Michigan Economics Department, where she earned her B.A. and M.A. in economics with top honors. She earned an MBA in finance and strategic planning with top honors from the University of Chicago’s Booth School of Business.

So why is GT’s chief economist leaving the firm such a big deal? Because no one has given Grant Thornton more exposure in print and on TV (other than maybe Rickie Fowler) than Swonk has the past several years. She has been a go-to source on anything economy-related for outlets such as The Washington Post, New York Times, USA Today, Fortune, Bloomberg, CNBC, MSNBC, Yahoo! Finance, ABC News, and others. And she’s bringing some friends from GT with her to KPMG:

I am off the sidelines and back.

My team @YelenaMaleyev @KNyeEcon Na Tasha Lowe & I have joined the incredible economics team at @KPMGUS @KenKim_1 @tmahedy @seek_equilibria Meagan Martin, Henry Rubin, Debra Russeth & Chris Akers.

— Diane Swonk (@DianeSwonk) July 19, 2022

We don’t know the reason why Swonk and the other economists are leaving Grant Thornton for KPMG, but rumor has it some people at GT are not thrilled with the upcoming change in leadership there. We’ll speculate that’s the reason for Swonk’s departure because speculation is fun!

What we do know is that Grant Thornton’s loss is KPMG’s gain.

Related article:

Rumor: Is Some Culture Drama Going Down at Grant Thornton?

The post KPMG Poaches Someone From Grant Thornton and Issues a Press Release, Part IV appeared first on Going Concern.

The Accounting Today links lend legitimacy as no self-respecting troll would go to the trouble of signing up for an AT account just to find some relevant links. Pretty sure not anyway.

The screenshot has been transcribed below, my commentary in brackets:

I hope things are well for you and yours. I wanted to reach out to you as your work with [redacted] is so…so…dreamy! …>Sigh<… Such SOX. Much GAAP. Aaaand I wanted to see if you might consider Grant Thornton as your next move.

Hold on. It’s too bad I gave up alcohol because DAMN do I need a drink if I’m going to get through this entire transcription. Alright, I’m going back in.

We need someone with the kind of experience you exude! [yo, exude is for things like body odor and confidence, not experience] ….Cause we’re kinda desperate. [LOL we know] We need a blue ton [someone’s been checking out Urban Dictionary!] of Accountants who are unafraid of the squirrely forest of IT, Process and Compliance risk challenges our mob of new customers seem to generate…constantly. HELP! [Dude, we cannot help you. You’re beyond assistance]

We’ll even pay, we promise! [Why does this feel like a known pathological liar telling you “it’s the truth, I swear” while their shifty eyes dart back and forth? I’m disappointed they didn’t end this sentence with “no cap.”]

OK, OK, let’s go there — yes, we hear you, we are not one of the “Big Four”. Rub our noses in it, why don’t you. <Hmmmph!> [for fuck’s sake why do you keep abusing angle brackets like this? <Uggghhh!>] We prefer to think ourselves as one of the “Big Six” — how’s that for Creative Accounting?

Quick side note here. When I Slacked this to my esteemed colleague Bramwell last night, he was quick to point out that GT isn’t even top 6 in the US. “BDO hopped over them,” he wrote with utter savagery. So not only does this person abuse angle brackets, capital letters, and reason, they also straight-up lied about being part of a thing that doesn’t even exist. There is no Big 6 but if there was, GT would not be in it. That’s not just creative accounting, it’s a material misstatement.

Moving on. God please tell me I’m almost done transcribing this.

But more seriously, we are proud of our focus on work-life balance, which, if you dig into reviews of us [don’t mind if I do!], is consistently considered better than our larger peers. [Didn’t you literally just complain about the “mob” of clients generating problems that you desperately — your word — need HELP! with? Are you managing the workload or not? <HUH??>] We are including “Employees First” in our approach to growing GT:

[Accounting Today link]

while steadily increasing our revenue and reach:

[another Accounting Today link]

The screenshot cuts off there THANK CTHULHU because I couldn’t handle much more than that without having to call my sponsor. It’s funny how they came out of the gate strong with the memes at the beginning then slowly but surely let the absurdity of their own email crush their soul and abandoned the memey quips, as any reasonable person would.

This isn’t quite as embarrassing as the time GT stole repurposed a slogan from Friedrich Nietzsche’s The Antichrist but it certainly ranks up there. Whichever book this recruiter read on how to recruit the youfs should be burned immediately and never spoken of again.

Full Reddit discussion is worth a view, it’s at 262 comments and counting. Is the email real? I’ll say this, it’s not the worst recruiting message we’ve ever seen. If this were Snopes, this one would earn a solid Mixture rating. Some truth, some falsehoods, and mostly impossible to prove because there’s no way anyone at GT is going to admit to writing this.

The post If This Is How Grant Thornton Recruiters Talk No Wonder They Can’t Find People to Work For Them appeared first on Going Concern.

In light of the conflict in Ukraine, FBK, the Grant Thornton member firm in Russia, is leaving the network with immediate effect. Like many international organisations around the world, we will continue to evaluate what further actions are needed as the situation evolves.

We are shocked and saddened by the events in Ukraine and our focus at Grant Thornton continues to be on supporting our colleagues at this very difficult time. Grant Thornton Ukraine is receiving offers of support from Grant Thornton firms around the world and our thoughts remain with our colleagues and their families in Ukraine at this distressing time.

Grant Thornton International has already removed Russia from its list of global locations. The FBK website says the Moscow-based firm is one of the top 10 largest audit firms in Russia and claims that 24 out of the 50 biggest companies in Russia are FBK clients. The Financial Times and City A.M. both reported that Russian state oil company Gazprom is one of FBK’s audit clients. City A.M. also noted that FBK has carried out work on behalf of Russia’s Central Bank.

FBK currently has 21 partners and 486 staff and is led by managing partner Sergey Shapiguzov. Founded in 1990, FBK was formerly a member of the PKF International network of firms. It joined Grant Thornton International in 2014.

Related article:

Big 4 Firms Condemn Russia’s Invasion of Ukraine, But Will They Sever Relationships With Any Russian Clients?

The post Grant Thornton Drops Its Russian Affiliate Over Conflict In Ukraine appeared first on Going Concern.

GT joined Deloitte, PwC, EY, KPMG, BDO, and RSM by pulling in at least 10-digit global revenues this past fiscal year. Specifically, Grant Thornton racked up $6.6 billion in 2021, up from $5.8 billion in 2020.

The press release Grant Thornton sent out includes all of five bullet points of highlights from the past year, and then a long-winded, four-paragraph-long statement from Grant Thornton International CEO Peter Bodin. We don’t really care that much what Pete has to say, so here are the bullet points:

• Regionally, EMEA (Europe, Middle East, Africa) saw the biggest revenue growth, up 19.1% to $2.5 billion; followed by Asia Pacific, up 15.8% to $1.2 billion; and the Americas, up 9.7% to $2.9 billion.
• Strong growth across all service lines included assurance, up 16.1% to $2.7 billion; followed by advisory services, up 15.5% to $2.4 billion; and tax, up 8.6% to $1.4 billion.
• Key strategic growth market firms saw growth of 14.9%. These include China, Japan, India, Germany, Italy, Brazil, and Mexico together with Nigeria and a cohort of five ASEAN (Association of Southeast Asian Nations) countries.
• Overall headcount grew from 58,000 to 62,000.
• These results represent year-on-year growth of 10.1% in constant currency terms.

Related article:

0.7% Is How Much Grant Thornton’s Global Revenue Grew In 2020

The post Not Surprisingly, Grant Thornton Made Billions Across the Globe In 2021 appeared first on Going Concern.

Associate 2

• 5% (audit)
• 5.7% (audit)

Senior 1

• 9.5% (audit)

Senior 2

• 7% (tax)

Manager

• 3% (audit)

[UPDATE on Dec. 9] It seems more Grant Thornton employees were told today what their mid-year raise will be. A GTer emailed us today:

I’m a manager level employee at Grant Thornton l just had my mid-year comp adjustment discussion and wanted to pass the info along. My increase was in the mid-single digits percentage-wise.

I also heard from a senior who told me they got a 10% increase.

As we mentioned yesterday, let us know, GTers, once you’ve had your mid-year comp talk by using the contact info at the bottom of this post.

[UPDATE on Dec. 8] Well, what do we have here? A day after we posted about Grant Thornton offering employees a deluge of new benefits instead of a deluge of cash, we were told by one GTer on Dec. 8 that mid-year raise communications have arrived:

Just got a call from a partner informing me of my raise effective Jan. 1st. Would prefer not to provide the exact figure, but let’s just say it’s a percentage in the upper single digits. Manager level.

Well that’s good news. Hopefully the dominoes start to fall for everyone else soon. I checked in with another source at Grant Thornton this afternoon who told me he/she had not heard anything about mid-year salary adjustments yet:

I’d be very much behind mid-year raises. Everyone has been pretty overworked recently and people are leaving at a pretty high rate.

Hang in there, friend. Hopefully you and your colleagues will soon be rewarded with a bump in pay for all of your hard work this year providing dynamic client service to GT’s chosen markets. Keep us posted, GTers, once you’ve had your mid-year comp talk by using the contact info below.

Related article:

Grant Thornton Is Trying to Keep Heinies In Seats By Giving Raises Enhancing Benefits

[Original post from Nov. 30.]

Last week after we got a tip on mid-year raises being imminent at BDO USA, I wanted to know what—if anything—was going down at Grant Thornton. It seems the Purple Rose of Chicago has been keeping mum about salary adjustments for employees, according to a few GTers who have posted on the usual online chatter sites.

You would think the seventh-largest accounting firm in the US, which saw revenue increase by 2.6% in FY 2021, would sock away a little extra money for employee appreciation. But so far radio silence from management, outside of mid-year raises were being considered, according to a tip we received last week:

There was an audit all-hands call a few weeks ago and the national audit leader said they were considering mid-year raises, but nothing official has been communicated at this point.

However, there might be some good news on the horizon:

There is a firm-wide call scheduled for December 17th, which I suspect will include an announcement of mid-year raises.

We hope so. If not, there likely will be a whole slew of Grant Thornton employees taking their talents elsewhere in 2022. And who could blame them?

Related articles:

Compensation Watch ’21: BDO USA Is Dangling a Mid-Year Raises Carrot
Despite a 2.6% Increase In 2021, Grant Thornton Couldn’t Catch BDO USA In the Midtier Firm Revenue Pissing Contest
Compensation Watch ’21: Did Grant Thornton Give Employees Briefcases Full Of Money This Year?

The post Compensation Watch ’21: Grant Thornton Is Dragging Its Feet On Announcing Mid-Year Raises (NEW UPDATE) appeared first on Going Concern.

Grant Thornton has further embraced the changing nature of benefits by taking its traditional benefits package — which includes items such as retirement plans and medical insurance — and layering on a host of newer offerings, including:

• Flexible work arrangements such as reduced-work schedules, compressed work weeks and flexible days — regardless of level;
• Flexible time off that allows employees to disconnect from work as needed instead of tapping into a predetermined set of paid days off;
• Expanded family-care benefits, including enhanced parental leave and access to childcare, eldercare, pet care, meal planning, housekeeping and other resources to support quality of life;
• Subsidized meal-delivery services;
• 40 hours of chargeable time annually to engage in volunteer activities;
• Flexible career-development and learning opportunities that work with people’s real-world schedules;
• Quiet hours and other measures to reduce the fatigue of video conferences and remote work;
• Lifestyle accounts that offer reimbursement for wellbeing expenses, such as fitness equipment purchases.

Further, Grant Thornton believes that offering ample and forward-thinking benefits also means doing so affordably. For this reason, the firm is absorbing employee premium increases for its medical benefits for the 2022 calendar year.

GT did an OK job of spreading the wealth around last summer, and now we have these enhanced benefits which Mike Monahan, national managing principal of people and community, said creates “total wellbeing across multiple dimensions: emotional, physical, career, social and financial.”

Will last summer’s raises and these new souped-up benefits keep GTers from leaving for the Big 4 or industry? Who knows. But if employees are planning on handing back their purple roses next year, giving them a mid-year salary adjustment before Jan. 1 would at least give them a third reason to stick around.

Related articles:

Compensation Watch ’21: Grant Thornton Is Dragging Its Feet On Announcing Mid-Year Raises
Compensation Watch ’21: Did Grant Thornton Give Employees Briefcases Full Of Money This Year?

The post Grant Thornton Is Trying to Keep Heinies In Seats By <del>Giving Raises</del> Enhancing Benefits appeared first on Going Concern.

It really is a surprising turnaround for a firm that had epically bad PCAOB inspection reports for 2011 (43% deficiency rate), 2012 (65%), and 2013 (56%), and an average audit error rate of 44% from 2010 to 2015, thus resulting in such Going Concern headlines as:

The PCAOB Inspection Report of Grant Thornton Could Have Been Worse (May 2, 2012)
Let’s Congratulate Grant Thornton For Its Dynamic and Record-Breaking Audit Failure Rate (Jan. 13, 2014)
Grant Thornton Fails to Take Up the PCAOB’s Offer to Get Better at Auditing (June 11, 2014)
PCAOB Inspection Report Gives Grant Thornton Another Swift Kick in the AS5 (March 10, 2015)

But something started to click at GT, right around the time or shortly after Mike McGuire replaced blogger, romantic, inexperienced Chicagoan, incredibly unprepared Chicagoan, note writer, and dynamic perpetual optimist Stephen Chipman as CEO in early 2015.

I don’t know if McG deserves all, some, or any credit, but starting with Grant Thornton’s 2016 inspection report through 2019’s report, GT cut its average deficiency rate exactly in half—22%. This includes a then-record-low failure rate of 18% in GT’s 2017 report card. And although McGuire has since gone to pasture, GT’s audit quality hasn’t suffered under current CEO Brad Preber. It has actually gotten better.

According to the firm’s newly released PCAOB inspection report for 2020, Grant Thornton had its lowest audit failure rate ever at 17.2%, only screwing up five of the 29 audits reviewed during the most recent inspection cycle:

The report says 27 of the 29 audits selected for inspection were integrated audits of financial statements and internal control over financial reporting, while the other two were financial statement audits only.

Here were the most common mistakes identified by inspectors in those financial statement and ICFR audits:

Tomorrow we’ll take a look at the last 2020 inspection report of the bunch, the one for BDO USA, which shows that the firm’s auditors aren’t getting off the struggle bus anytime soon. In the meantime, you can take a gander at GT’s latest inspection report in full below:

The post PCAOB Inspection Report Day Is No Longer An Embarrassment For Grant Thornton appeared first on Going Concern.

GT got a £1.3 million fine from the UK’s audit cops on Nov. 1, but it was reduced to £718,250 because of the firm’s “exceptional cooperation in the investigation” and early admissions to audit wrongdoing, according to the FRC, which included:

• A substantial loss provision in the financial statements for FY 2015 and FY 2016 against an ‘Energy from Waste’ contract for the construction of a waste treatment facility. There were serious evidence and scepticism failings by the auditors in respect of key judgements and accounting estimates relevant to the loss provision, an area identified as a significant risk in the audit; and
• Aspects of the auditors’ assessments of going concern and goodwill impairment in the financial statements for FY 2017 (both having been identified, at planning stage, as areas of significant risk for the audit), where work on elements of the analysis of management’s modelling of the financial data was inadequately performed or, in some respects, inadequately documented.

The lead auditor on the Interserve engagement, Simon Lowe, was fined £70,000, but his penalty was reduced to £38,675. According to the Financial Times, Lowe left the partnership at Grant Thornton in June 2018 after 43 years in the profession but remains a consultant at GT. Lowe’s bio on Grant Thornton’s website says he is a consultant in the firm’s Strategic Clients practice and chairman of the Grant Thornton Governance Institute.

The FRC noted in its decision that “there was a significant public interest in the audit” of Interserve’s financial statements because the company “was a large, high-profile business with a number of public-sector clients.”

Interserve, one of the British government’s biggest contractors and a peer of collapsed infrastructure and outsourcing group Carillion, was placed in administration in March 2019 after shareholders rejected a rescue plan to deal with its debts, according to Reuters.

Most of Interserve’s income was from UK government contracts including for the provision of probation services and building schools, hospitals, and offices, FT reported. Claudia Mortimore, deputy executive counsel to the FRC, said in a statement:

“This is a proportionate package of sanctions in respect of failings over three consecutive audit years. It reflects on one hand the seriousness of certain evidence and scepticism failures in FY 2015 and FY 2016, while recognizing that the Adverse Findings were limited to discrete areas of large audits.

We note the exceptional cooperation provided by the Respondents throughout the investigation and this has been reflected in the discount to the financial sanctions. Some of the evidence relevant to this decision is legally privileged and we acknowledge the assistance provided by the administrators of the Company and Interserve Group Limited in agreeing that the material could be used in confidence for the limited purposes of our investigation and any subsequent enforcement proceedings.”

However, the FRC came to the conclusion that none of Grant Thornton’s audit failures resulted in the financial statements being materially misstated.

Grant Thornton fined over audit failings at outsourcer Interserve [Financial Times]
UK watchdog fines Grant Thornton $1.8 million for Interserve audits [Reuters]

Related article:

Grant Thornton Let Off the Hook Big Time By UK’s Audit Cops

The post FRC Fines Grant Thornton UK For Something We’re All Used to Grant Thornton UK Doing appeared first on Going Concern.

Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd., today announced record revenues of $1.97 billion for the fiscal year ended July 31, 2021.

“In a changing and uncertain environment, we continue to remain agile and perform with excellence across our entire firm, including our services lines, industry groups and internal services teams,” said Brad Preber, CEO of Grant Thornton. “We’ve combined flexibility and innovation with quality and value to realize record revenues. Because of this approach, we’re well-positioned for continued growth.”

So Grant Thornton’s revenue grew roughly 2.6% over last year’s $1.92 billion. But the firm’s instinct for growth and dynamic client service to its chosen markets wasn’t good enough to reclaim sixth place from BDO USA in the U.S. public accounting firm revenue race. BDO overtook GT for sixth place in 2021 after posting revenue of $2 billion. But neither firm is nowhere near catching the top midtier accounting firm in terms of revenue, RSM US, which reported $2.9 billion in 2021.

Related articles:

Grant Thornton’s Revenue Barely Moved the Needle In FY 2020
BDO USA Did Not Feel the COVID Pinch In 2021
Number of the Day: $2.9 Billion

The post Despite a 2.6% Increase In 2021, Grant Thornton Couldn’t Catch BDO USA In the Midtier Firm Revenue Pissing Contest appeared first on Going Concern.

The Evening Standard reported at the time that GT’s fine was the largest given to a non-Big 4 firm by the FRC. It was a pretty bad independence violation, deserving of a £3 million penalty.

Then, about two months later, news started spreading like wildfire in Britain about huge accounting irregularities found at cafe chain Patisserie Valerie, which resulted in Pat Val:

• Going into administration, leading to 70 stores closing and more than 900 people losing their jobs.
• Overstating its accounts by £94 million.
• Having five people arrested and questioned in June 2019 about the accounting fraud, according to the Serious Fraud Office. Patisserie Holdings’ former finance director Chris Marsh was arrested and released on bail over the scandal in 2018.

And what firm audited Patisserie Holdings, the parent company of Patisserie Valerie? Grant Thornton.

The FRC announced in November 2018 that it would investigate Grant Thornton’s audits of Patisserie Valerie for the financial years ending 2015, 2016 and 2017. The results of that investigation were finally announced this morning, and it left us wondering how the FRC determines the financial punishments it doles out to accounting firms because sometimes they don’t make a whole lot of sense.

The Financial Times reported:

Grant Thornton has been fined more than £2.3m for a “serious lack of competence” in its audits of UK café chain Patisserie Valerie, which collapsed in January 2019 amid allegations of fraud.

If the auditors had done their job properly, they “should have identified clear indicators of the risk of material misstatement [of Patisserie Valerie’s accounts] due to fraud”, the Financial Reporting Council said.

The Financial Reporting Council also ordered the UK’s sixth-largest accounting firm to pay its investigation costs of more than £650,000, taking the total penalty to almost £3m.

Soooo, Grant Thornton got essentially the same fine from the FRC for an auditor independence violation as it did for giving clean audit opinions for a company at the center of one of the biggest accounting scandals in the UK in the last several years. Well. OK then.

Some people took to Twitter today to express their dismay at the wrist-slapping penalty Grant Thornton received from the FRC:

Grant Thornton to pay puny fine of £2.34m (firm income £471m) for audit failures at Patisserie Valerie -failed to properly audit revenues, cash, bank accounts, overheads, employees costs, assets; lacked scepticism.
Current audits are worthless.https://t.co/eQeA0254kk

— Prem Sikka (@premnsikka) September 27, 2021

When you can’t get something as basic as the cash right the fine needs to be a lot bigger than that https://t.co/U0zlbVIh4d

— Richard Murphy (@RichardJMurphy) September 27, 2021

Quote from Grant Thornton after the audit fail report. “Since the period in question, we have invested significantly in our audit practice to better ensure consistent quality ….” Dear God, as this is their core business why WEREN'T they doing it before? And such a tiny fine

— Julia Briggs (@The_Wafre) September 27, 2021

Grant Thornton fined trivial amount over Patisserie Valerie (#CAKE) audits : https://t.co/Vruf3ofozF

— Roger Lawson (@RogerWLawson) September 27, 2021

Lawson, a former shareholder of Patisserie Holdings, wrote about the penalties against Grant Thornton today in his blog, saying:

GT claim[s] that “our work did not cause the failure of the business”. At the end of the day that might have been so but if the defective accounts had been identified in 2015 or 2016 before the fraud became totally out of hand, perhaps the company could have been saved. It would certainly have saved me and many other investors from investing in the company’s shares after 2015.

The financial penalties for such incompetence are of course still trivial. Grant Thornton’s trading profit last year was £57 million.  

The FRC said Grant Thornton’s audit of Patisserie Holdings’s revenue and cash in particular involved missed red flags, a failure to obtain sufficient audit evidence, and a failure to stand back and question information provided by management.

In addition to Grant Thornton’s fine, the engagement partner on the Patisserie Holdings audits, David Newstead, was fined £150,000 but the penalty was reduced to £87,750, and the FRC banned him from carrying out statutory audits for three years. Grant Thornton said it would pay the fine for Newstead, who still works at the firm but is no longer a partner, according to FT.

The FRC also ordered Grant Thornton to review its culture of challenging clients in its audit practice and to provide the FRC with an annual report for three years on the progress of actions to improve its audit quality.

The report from the FRC is 65 pages, and all the gory details of auditor incompetence is included below.

The post Grant Thornton Let Off the Hook Big Time By UK’s Audit Cops appeared first on Going Concern.

We found out Wednesday that Preber’s successor will be Seth Siegel:

The Grant Thornton LLP Partnership Board has named Seth Siegel, 49, as the firm’s CEO-elect. Siegel will succeed Grant Thornton’s current CEO, Brad Preber, when Preber retires on July 31, 2022 after almost two decades in leadership roles at the firm.

The firm’s Partnership Board appointed Siegel, a longtime leader at Grant Thornton, following a comprehensive succession planning and search process. His appointment was subsequently ratified by the firm’s partners and principals. His term as CEO will begin on August 1, 2022.

Siegel is an experienced leader who has spent more than 25 years with Grant Thornton. He currently serves as the managing partner for South Florida, which includes offices in Miami and Fort Lauderdale. He also currently serves on the Grant Thornton Partnership Board.

Siegel has been bleeding purple since 1996 and became a partner in 2006, having briefly left GT in the late 1990s to work as a controller and a registered representative in the financial services sector, according to the firm.

He served as Grant Thornton’s Florida Audit practice leader from 2012 to 2019, with operational responsibility for the five offices in the state. In that role, he expanded the practice area and achieved exceptional revenue growth and profitability for the firm, all while providing dynamic client service to GT’s chosen markets. Siegel previously led Grant Thornton’s Florida Real Estate, Construction and Hospitality industry group.

In addition, Siegel has served on the firm’s Audit Quality Advisory Council and its inaugural Grant Thornton Experience Leadership Council, which helped the CEO and senior leadership team shape strategic and operational decisions across all service lines and geographies, according to the firm.

Preber became full-time CEO at Grant Thornton in November 2019 after being thrown into the fire the previous June following Mike McGuire stepping down to become GT’s “brand ambassador” and CEO emeritus. Preber joined Grant Thornton in 2004, after serving as a partner at Arthur Andersen. He has held numerous leadership roles at Grant Thornton, including national managing partner of the Business Risk Services practice, office managing partner in Phoenix, and chairman of the firm’s Partnership Board.

The post The CEO Seat At Grant Thornton Will Soon Be Kept Warm By Seth Siegel appeared first on Going Concern.

But that was then, this is now. We still don’t know Grant Thornton’s revenue results for FY 2021; however, all indications are that it’ll be another record-setting year of growth for GT. Plus the firm just announced its largest class of PPMDs ever. So things seem to be trending in the right direction for the Purple Rose of Chicago, but did employee raises for 2021 trend upward or downward?

To find out, I went on r/accounting and went through the Grant Thornton comp thread for 2021 and this thread on Fishbowl, the 2019 and 2018 comp threads on Reddit, and the 2017 and 2016 comp threads on Going Concern. Then I calculated the average raise percentage for each step up in rank or promotion where data was available (i.e, A1->A2, A2->S1, S1->S2, S2->S3, M1->M2, etc).

These averages don’t take into effect factors like location/cost of living, line of service, academic degrees, rating (meets expectations or exceeds expectations), and bonuses/awards. This is just the average percentage of how much base pay increased per step up in rank/promotion.

Did Grant Thornton deliver the goods this time around? Let’s take a look:

A1->A2

• 9.8% (2021)*
• 7.5% (2019)
• 3.5% (2018)
• 4% (2017)
• 7% (2016; only one entry)

* Not included in the averages because it’s such an outlier was a 41% raise for an A1->A2 who went from audit to advisory.

A2->S1

• 17.8% (2021)
• 15% (2019)
• N/A (2018)
• N/A (2017)
• 10.5% (2016; only one entry)

S1->S2

• 17% (2021)
• N/A (2019)
• 20% (2018; only one entry)
• 5% (2017)
• 5% (2016)

S2->M1

• 19% (2021; only one entry)
• N/A (2019)
• N/A (2018)
• N/A (2017)
• 18% (2016; only one entry)

S2->S3

• 17.8% (2021)
• 7% (2019; only one entry)
• N/A (2018)
• 4% (2017; only one entry)
• 6.5% (2016)

M1->M2

• 34.8% (2021)
• N/A (2019)
• N/A (2018)
• 14.5% (2017)
• N/A (2016)

M2->M3

• N/A (2021)
• 8% (2019; only one entry)
• N/A (2018)
• N/A (2017)
• N/A (2016)

M3->SM

• 12% (2021; only one entry)
• N/A (2019)
• N/A (2018)
• N/A (2017)
• N/A (2016)

Unlike Big 4 compensation threads, which always get a ton of responses on r/accounting or did on GC back in the day, the comp threads for the top midtier firms like Grant Thornton aren’t as rich (no pun intended) with information. So as you probably noticed there are a lot of N/As above. But it’s fair to conclude that raises at Grant Thornton weren’t horrible this year. At least you all got raises above inflation. But after getting snubbed last year, were these decent for two years’ worth of raises. Eh, probably not. TPTB at GT should have thrown some more money employees’ way for the ridiculous amount of work everyone did last year.

As longtime GT commenter Chipman69 would say: Congratulations to all of the DYNAMIC GT professionals on their DYNAMIC raises, bonuses and promotions!!!!! May your increase in compensation and responsibilities engorge your WHOLE SELF with the INSTINCT FOR GROWTH necessary to penetrate clients in new CHOSEN MARKETS!!!!!

The post Compensation Watch ’21: Did Grant Thornton Give Employees Briefcases Full Of Money This Year? appeared first on Going Concern.

The breakdown:

• 41 new managing directors
• 35 new partners
• 11 new principals

While Grant Thornton notes in the press release that the 2021 class of PPMDs is GT’s largest ever, it’s not the largest class of just new partners and principals. In 2015, 50 new partners and principals were admitted by the firm.

Here’s a look at new partner/principal class sizes at Grant Thornton since 2010:

• 2021: 46
• 2020: 30
• 2019: 42
• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

Let’s take a look at Grant Thornton’s class of 2021 new PPMDs by the numbers:

• 28: The number of new PPMDs in tax, the most of any service line, followed by 26 in advisory, 25 in audit, and eight in internal client services.
• 27: The number of new PPMDs who are women, or 31% of the class.
• 8: The number of new PPMDs in Philadelphia, the most of any location, followed by seven in both Chicago and Atlanta, and six in both Los Angeles, Dallas, and Metro D.C.

Here are the newest PPMDs at Grant Thornton:

*Promoted earlier in 2021 with approval from Grant Thornton’s Partnership Board.

Congrats to everyone who received their purple roses today!

The post Promotion Watch ’21: Grant Thornton Admits 46 New Partners and Principals appeared first on Going Concern.

“The principle of shared audits is very attractive to challengers as long as the share of the audit is meaningful and brings incremental experience to teams. If the challenger firm is just going to get what’s left at the bottom of the barrel, that’s not interesting and doesn’t help.”

— Fiona Baldwin, head of audit at Grant Thornton in the U.K., said about the U.K. government’s proposal for “managed shared audits,” in which a Big 4 firm would work alongside a so-called challenger firm (i.e., a non-Big 4 firm) during the audit of a FTSE 350 company.

Soooo, according to the Financial Times, GT and BDO are considering not pitching for work on shared audits of FTSE 100 companies; however, smaller challenger firms like Mazars and Crowe said they would work with the Big 4 on shared audits of the largest U.K. companies in sectors where they have the required expertise.

ICYMI, here’s what our friend Jim Peterson recently wrote about the shared audit plan in the government’s consultation paper on audit reform in the U.K.:

[T]he Consultation contemplates (¶¶ 8.1.15-.16) that a FTSE 350 client of the Big 4 would be obliged in its audit tender process to identify a “meaningful proportion” of its statutory audit—not less than 10% and desirably closer to 30%, by metrics including audit fees, group revenues, assets, and profits—to be performed by one of the so-called “challengers”—that is, a firm below the Big 4 in size, yet brave enough to deem itself qualified to propose.

Whisper who dares: in a triangular relationship among an issuing company, its lead auditor, and a “challenger,” such an arrangement could satisfy none of the three.

Because the Consultation would not allow for joint bidding (¶ 8.1.17), a Big 4 firm preparing to take the lead would start from an untenable position—not even knowing the identity of the smaller firm, much less its qualifications, reputation, or resources by either industry or geography. Despite which, that lead auditor would, under applicable professional standards and the liability regimes to which its global-level work and overall opinion would be exposed, bear full responsibility for the results of the group audit including the work performed and up-streamed by the “challenger.”

Passing for the moment whether such inhibitions would implicate a scope restriction on the lead auditor’s acceptance and planning (see International Standard on Auditing 300), a lead firm’s risk manager would have cardiac arrest at any lesser level of involvement than essentially 100% re-performance of the work of the “challenger.”

As for the company under audit, its management and audit committee could scarcely with comfort identify between 10% and 30% of its operations to be devolved for audit by a “challenger” whose capability and experience at the FTSE level would range from untested to non-existent.

This whole shared audits plan seems like a big ol’ swing and a miss from a government being pressured to do something, anything to stop the Big 4’s dominance in the U.K. audit market.

UK plan to shake up audit market faces major setback [Financial Times]

Related article:

Audit ‘Reform’ In the UK: The Government Finally Speaks, and Says Little

The post Grant Thornton Is Not a Bottom of the Barrel Firm, Says Grant Thornton appeared first on Going Concern.

Alberta

• Chris Cameron, Partner, Edmonton
• Ken Hankinson, Partner, Edmonton
• Stephen Latimer, Partner, Wetaskiwin
• Jenny Pon, Partner, Edmonton
• Freida Richer, Partner, Edmonton

British Columbia

• Shawn Birkenhead, Principal, Kamloops
• Sandra Blair, Principal, Kamloops
• Michelle Coates, Principal, Nelson
• Kevin Cooper, Principal, Kamloops
• Norman Daley, Partner, Kamloops
• Mike Evans, Partner, Duncan
• Mike Gerrand, Principal, Trail
• Steven Haines, Partner, Victoria
• Chelsea Kraft, Principal, Salmon Arm
• Andrea Kramar, Principal, Nelson
• Maureen McCurdy, Partner, Kamloops
• Paul Mumford, Partner, Kamloops
• Judd Nichols, Partner, Victoria
• Mike Parker, Partner, Kamloops
• Richard Pearson, Partner, Victoria
• Ashley Ruggiero, Partner, Trail
• Gibson Turley, Partner, Vancouver

Manitoba

• Nathan Bell, Partner, Winnipeg
• Marin Brown, Partner, Winnipeg
• Ashlee Davis, Principal, Winnipeg
• Corrine Reimer, Principal, Winnipeg

New Brunswick

• Patrick Levesque, Partner, Bathurst
• Matthew Lister, Principal, Saint John

Nova Scotia

• Nicole Deveau, Principal, Halifax
• Nancy Frame, Principal, Truro
• Veronica Hunt, Principal, Halifax
• Greg MacDonald, Principal, Halifax

Ontario

• Elaine Ilavsky Bowes, Partner, Toronto
• Danny Diamond, Partner, Markham
• Paul Drouillard, Partner, Waterloo
• Ingrid Holbik, Partner, Toronto
• Jason Kingston, Partner, Waterloo
• Julia Klann, Partner, Waterloo
• Kevin Kuppers, Partner, Waterloo
• Ninad Mauskar, Principal, Toronto
• Jen Pavlov, Principal, Mississauga
• Erin Podio, Partner, Mississauga
• Rob Sambrook, Partner, Waterloo
• Dimitri Sarabalos, Partner, Mississauga
• Nathan Snowie, Partner, Toronto
• Rob Stelzer, Partner, Toronto
• Kim Toskovich, Partner, Thunder Bay
• Jin Wen, Partner, Toronto

PEI

• Dennis Carver, Partner, Charlottetown
• Craig Dykerman, Principal, Charlottetown
• Brian Morrison, Principal, Charlottetown
• Matt Totten, Partner, Summerside

Saskatchewan

• Matthew Flath, Partner, Saskatoon

Congrats to all the new partners and principals at Grant Thornton Canada!

The post Promotion Watch ’21: Grant Thornton Canada Adds 53 New Partners and Principals appeared first on Going Concern.

According to the Financial Times, GT U.K. CEO David Dunckley said the pro-WFH crowd was the same regardless of age, gender, ethnicity, or location. The result of the survey may or may not have left Dunckley scratching his head:

“I thought as lockdown got longer people might be more keen to get back in the office but the percentage has gone up a bit,” he added.

Financial News reported the staff survey showed 88% of staff wanted to work remotely at least half of the time, with 94% saying having a mix of remote and office working would positively benefit them.

Grant Thornton reduced its real estate footprint when it renewed the lease on its Manchester office last year but has not yet decided how often staff will be in the office after the pandemic, according to FT.

As Adrienne mentioned in Footnotes last Friday, PwC U.K. said it expects its 22,000 employees to spend an average of 40% to 60% of their time in the office or at client sites once pandemic restrictions are lifted, with the ability to WFH the rest of the week. PwCers will also be able to personalize their working hours, like starting or ending the day earlier.

In the U.S., PwC Chairman Tim Ryan recently told his capital market servants that starting in September, they will be expected to be in the office or at client sites between one to three days a week, with the rest of the time spent WFH.

Grant Thornton says most UK staff want to stay away from office after pandemic [Financial Times]
Grant Thornton says almost 90% of staff want to work from home [Financial News]

The post Number of the Day: 88% appeared first on Going Concern.

From 2010 to 2015, the Purple Rose of Chicago had an average audit failure rate of 44% in its PCAOB inspection reports during that time frame, including a whopping 65% worth of screw-ups in the firm’s 2012 report, which gave GT the title of worst auditing performance ever at that time.

We don’t know what exactly happened but things finally started to click with Grant Thornton auditors starting with the firm’s 2016 report card. From 2016 to 2018, GT cut its average percentage of audits with significant mistakes exactly in half, including a mind-blowingly good 18% deficiency rate in 2017.

Now that Grant Thornton’s 2019 inspection report is out, let’s see if the firm’s auditing is closer to its bad 2010-2015 error rate or its good 2016-2018 one:

So if my calculations are correct, that’s an error rate of 22%—the exact same as Grant Thornton’s average error rate from 2016 to 2018.

See BDO USA auditors, there’s hope for you yet.

Here’s a look at GT’s deficiency rates through the years:

• 2010: 29%
• 2011: 43%
• 2012: 65%
• 2013: 56%
• 2014: 32%
• 2015: 41%
• 2016: 24%
• 2017: 18%
• 2018: 25%
• 2019: 22%

Of the seven audits with significant errors, five had a total of 27 separate mistakes in the audit of internal control over financial reporting—the most over Grant Thornton’s last three report cards from the PCAOB.

Here are the areas that baffled Grant Thornton auditors the most during the 2018 inspection cycle:

Two of the seven deficient audits were for issuers in the discretionary sector, while another two were for issuers in the IT sector. There were one each in communication services, financials, and real estate.

Take a look at GT’s latest report card for yourself:

Related article:

Those Who Know, Know BDO … Is Consistently Terrible At Auditing

The post Grant Thornton Auditors Are Just Showing Off Now appeared first on Going Concern.

Keith Nickels has joined Grant Thornton LLP as a Tax partner and national leader of the firm’s Research and Development (R&D) Tax Credit Services practice.

In this role, Nickels will use a data-forward strategy to transform the firm’s R&D Tax Credit service delivery model for the digital age. Nickels succeeds Mark Andrus in this role, who is retiring on July 31, 2021. Andrus concludes a 21-year career as Grant Thornton’s R&D Tax Credit Services practice leader.

Nickels has nearly 25 years of public accounting experience with a focus on the R&D tax credit and accounting methods technical areas. He has worked across a large variety of industries, including technology, life sciences, media and entertainment, and aerospace and defense. He specializes in IRS exam controversy and has worked with Fortune 500 and middle-market companies.

Prior to joining Grant Thornton, Nickels was a partner in the Specialized Tax Services group and leader of the Life Sciences R&D Tax Credit practice at PricewaterhouseCoopers LLP, where he led and managed the pursuit and delivery of tax services related to the R&D tax credit and Section 174 expenditures. Before that, he spent more than 20 years with Ernst & Young LLP’s (EY) Tax practice. While at EY, Nickels spent eight years in the national Tax department focused on the R&D tax credit and led the firm’s New York R&D Tax Credit practice.

Nickels didn’t spend a lot of time at PwC; only a year and a half as leader of the Life Sciences R&D Tax Credit practice, according to his LinkedIn profile. As the release says, EY was where Nickels cut his Big 4 teeth.

All in all, seems like Nickels was a good hire for the Purple Rose of Chicago.

[Grant Thornton]

Related article:

Grant Thornton Poaches Someone From PwC and Issues a Press Release, Part I

The post Grant Thornton Poaches Someone From PwC and Issues a Press Release, Part II appeared first on Going Concern.

Several news outlets in the U.K. have reported on Chopra’s recent move from GT to the House of Klynveld, including Insider.co.uk which published the following info taken from a KPMG release:

Chopra, a corporate tax specialist, will lead a team of 90 tax professionals operating across the firm’s offices in Aberdeen, Edinburgh and Glasgow. …

With a background of working with private businesses, … Chopra succeeds Alan Turner, who has led the Scottish tax practice for the last three years, and has been promoted to lead the firm’s corporate tax and legal services practice across the UK.

Turner, an international tax specialist who has been with the firm for 15 years, will lead a team of 450 tax professionals and lawyers, providing services to the firm’s largest multinational and listed clients.

As part of his new role, he will continue to work with large corporate clients in Scotland.

Chopra took to LinkedIn last week to announce his new digs … you know, once the new U.K. coronavirus lockdown ends:

Chopra spent nearly nine years at Grant Thornton, as a tax director and then as a tax partner who led the firm’s tax practice in Scotland, according to his LinkedIn profile.

He also has previous Big 4 experience: Chopra started his career at PwC in 2002 where he worked for more than nine years, including as a tax manager and tax senior manager, before going to GT in 2012.

KPMG UK appoints new head of tax for Scotland [Insider.co.uk]

Related articles:

KPMG Poaches Someone From Grant Thornton and Issues a Press Release, Parts I and II

The post KPMG Poaches Someone From Grant Thornton and Issues a Press Release, Part III appeared first on Going Concern.

According to the Financial Times on Jan. 8:

The liquidators of Patisserie Valerie are suing Grant Thornton for £200m over alleged negligence in its audits of the café chain that collapsed following a suspected significant accounting fraud.

The lawsuit is set to be one of the largest brought against a mid-tier accounting firm in the London courts and would be a serious blow to Grant Thornton, the UK’s sixth-largest accountant. The firm audited Patisserie Valerie for 12 years but failed to spot an alleged manipulation of its books.

Grant Thornton’s audits of Patisserie Valerie over the three years before the collapse are also under investigation by regulators at the Financial Reporting Council.

“The liquidators . . . have been advised that Grant Thornton were negligent in the preparation and conduct of the 2014 to 2017 financial statements,” said FRP Advisory, which is liquidating the bakery chain, in a report to creditors. It said it had engaged lawyers at Mishcon de Reya to sue the audit group for damages of about £200m.

FRP Advisory blamed “large accounting misstatements” for Patisserie Valerie’s board “being unaware that the group has insufficient funds to continue to trade,” FT reported.

Of course GT is pointing fingers back at Pat Val, saying its auditors were duped and the lawsuit “ignores the board’s and management’s own failings.”

The bakery chain, which collapsed in January 2019, discovered accounting irregularities in October 2018, which ended up totaling £94 million.

The U.K.’s audit cops—Financial Reporting Council—said in November 2018 it was investigating Grant Thornton’s audits of Patisserie Valerie for 2015 to 2017.

Last September the FRC fined Deloitte U.K. a record £15 million, and ordered Big D to pay an additional £5.6 million to cover the costs of the FRC’s investigation and the costs of an independent disciplinary tribunal, for the firm’s dubious auditing of Autonomy, the U.K.-based software company that was acquired by Hewlett-Packard in 2011 and was involved in an epic accounting fraud.

Some U.K. observers have told us that GT could wind up getting a bigger fine from the FRC for Pat Val than Deloitte did for Autonomy. And these same people say that while Deloitte can obviously handle and survive such a large fine, a similar-sized penalty could do some huge damage to the future of Grant Thornton U.K.

We’ll see.

Grant Thornton sued for £200m over Patisserie Valerie audits [Financial Times]

Related article:

Congrats to Deloitte U.K. for Getting the Largest Fine Ever Handed Out by the Financial Reporting Council

The post Patisserie Valerie Liquidators Say Grant Thornton Doesn’t Deserve Cake appeared first on Going Concern.

Grant Thornton generated revenue of $5.76 billion worldwide, up 0.7% from 2019’s total of $5.72 billion, according to a press release.

Here’s what’s included in GT’s 2020 highlight reel:

• The Americas region accounted for 45.5% of the firm’s revenue in 2020 ($2.62 billion; SALY), followed by Europe, Middle East and Africa (EMEA) at 36.6% ($2.11 billion; up 2.7%) of revenue and Asia Pacific at 17.9% ($1.03 billion; down 1.8%).
• Assurance services made up approximately 40.4% of total revenue ($2.32 billion; up 3.2%), advisory services brought in 36% of revenue ($2.08 billion; up 0.6%), and tax generated 21.8% of revenue ($1.26 billion; up 0.5%). Other services accounted for 1.8%.
• Mergers and acquisitions contributed $65 million with 36 transactions.
• The number of warm bodies Grant Thornton hired grew by 3.9% to 58,229.
• Two new firms joined the Grant Thornton International network in Chile and Turks and Caicos.

[Grant Thornton]

Related articles:

Grant Thornton Made a Little Magic Happen In 2019
Grant Thornton’s Revenue Barely Moved the Needle In FY 2020

The post 0.7% Is How Much Grant Thornton’s Global Revenue Grew In 2020 appeared first on Going Concern.

AG pulled this from Bloomberg Tax:

Grant Thornton LLP has agreed to pay $750,000 to settle U.S. audit regulator charges that it missed warning signs that Erickson Inc. was at risk of going out of business and didn’t adequately understand its lease liabilities that resulted in a multiyear restatement.

Not only will GT have to shell out $750,000 for botching Erickson’s audits but two of its partners at the time—Gary Homsley, who was the engagement partner, and Larry Dana Leslie, who conducted the engagement quality reviews—were also punished by the PCAOB.

According to the PCAOB order, Grant Thornton and Homsley “failed to exercise due professional care, including professional skepticism, and failed to obtain sufficient appropriate audit evidence in connection with certain Erickson lease-related liabilities.”

These lease-related liabilities concerned Erickson’s contractual obligations to maintain or return aircraft to conditions specified under the relevant aircraft lease agreements. The Firm and Homsley failed to evaluate sufficiently whether Erickson’s financial statements correctly reported its lease-related liabilities. The Firm and Homsley also failed, in the FY2015 Audit, to evaluate adequately Erickson’s ability to continue as a going concern. As a result of these failures, the Firm lacked an appropriate basis to issue an unqualified opinion in each Audit.

Also …

The Firm and Homsley violated the auditing standards on documentation by failing to ensure that portions of each Audit’s working papers in connection with audit remediation bore correct dates. As a result, certain hard copy remediation work papers for the Audits (the “Remediation Work Papers”), when archived, reflected that those work papers had been completed earlier than they actually had been.

The documentation violations involving the Remediation Work Papers resulted, at least in part, from the Firm’s insufficient QC system related to audit documentation, which failed to provide reasonable assurance that the engagement teams would document their audit work in accordance with professional standards.

The funny thing about this is not only did Homsley have no experience auditing companies that operated aircraft or with accounting rules pertaining to the aviation industry prior to joining the engagement for the FY 2012 Erickson audit, and not only did the engagement teams’ members also lack aviation industry audit experience outside the Erickson engagement, but Grant Thornton offered no aviation industry training to the engagement teams working on the audits.

So you figured bad things were gonna happen. Oh and get this, GT had reservations about putting Homsley on the FY 2015 audit as engagement partner because he had some “audit quality issues” but did so anyway:

The Firm had audit quality concerns about Homsley before retaining him as engagement partner for the FY2015 Audit. Indeed, the Firm placed Homsley on a Partner Support Plan in September 2015, due to issues with Homsley’s FY2013 and FY2014 Audits. The Firm and Homsley discussed reducing Homsley’s client workload in connection with his transition to a different role at the Firm, but the Firm did not notify Homsley that it had placed him on the Partner Support Plan.

Wait, how did Homsley not know he was on a PSP? He didn’t get the hint when GT took away clients from him? Isn’t that something Grant Thornton should have told him about?

Anyhoo, back to the order:

The Firm considered removing Homsley from all issuer audits before the FY2015 Audit, but, among other things, determined that doing so “could also negatively impact the workload of the partner the work was transferred to.” The Firm decided to retain Homsley as the engagement partner for Erickson’s FY2015 Audit, despite being aware of Homsley’s audit quality issues.

As a result, there were a slew of screw-ups by Homsley and the engagement teams, which those of you who have aviation industry clients will get a kick out of, that are detailed in the PCAOB order—from failing to adequately address risks, to failing to obtain sufficient audit evidence to support the lack of liabilities, to failing to adequately evaluate Erickson’s ability to continue as a going concern, to failing to appropriately supervise the work of the engagement teams, to failing to ensure that the remediation workpapers relating to the FY 2013, FY 2014, and FY 2015 audits had the correct dates.

Leslie, according to the PCAOB, “failed to perform his role as EQR partner with due professional care.”

Specifically, Leslie violated Auditing Standard (“AS”) No. 7, Engagement Quality Review (“AS 7”) by, among other things, failing to evaluate appropriately the engagement teams’ significant judgments with respect to planning, including consideration of the risk of certain Erickson lease-related liabilities and consideration of Erickson’s ability to continue functioning as a going concern. As a result of the inadequacy of his engagement quality review, Leslie lacked an appropriate basis for his concurring approval of the issuance of GT’s unqualified opinion in the FY2014 Audit and FY2015 Audit.

And now, the punishments:

• Homsley was fined $15,000 and is barred from being associated with a registered public accounting firm for at least two years. If his ban is lifted after two years, Homsley will be restricted from participating in certain audit activities.
• Leslie was not fined but his activities in connection with any audit will be limited for two years.

According to Homsley’s LinkedIn page, he is a retired Grant Thornton partner in Portland, OR. He worked at Grant Thornton from September 1998 until July 2019.

Leslie, who worked at GT from October 2004 until October 2018, is CFO of The Odom Corp. in Seattle, according to his LinkedIn page.

According to the PCAOB, Erickson, which provided aviation services, mainly in the logging, firefighting, construction, and defense sectors, filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code on Nov. 8, 2016. Erickson emerged from bankruptcy in April 2017 and is now under private ownership.

Related article:

Grant Thornton Gets Dinged for Giving Partners with Audit Quality Issues More Work

The post Grant Thornton’s Streak of Not Being Fined By the PCAOB Has Come to an End appeared first on Going Concern.

Despite reporting a record high $1.92 billion in revenue for the fiscal year that ended on July 31, Grant Thornton’s revenue only increased 1% in FY 2020 over last year’s $1.9 billion.

CEO Brad Preber commented:

“Our success in generating a modest increase in revenue—despite the COVID-19 pandemic and related economic recession—means we can continue to invest in the services, innovation and talent required to drive growth for our firm and our clients,” says Brad Preber, CEO of Grant Thornton. “We continue to make business and operational decisions that keep our clients’ needs front and center, while also helping our professionals during this challenging time.”

You can read the press release to find out all the accolades Grant Thornton gave itself over the past year, including being the first major professional services firm to move to a work-from-home policy at the start of the COVID-19 pandemic and having a 2018 inspection report from the PCAOB that didn’t suck as bad as some of the Big 4 firms.

What the press release fails to mention is how the firm had to reduce profit distributions for partners and principals and had them contribute to a capital call, make job cuts, and give raises only to employees who got a promotion during the pandemic.

Maybe GT will have a better year revenue-wise in FY 2021 … but I doubt it.

[Grant Thornton]

The post Grant Thornton’s Revenue Barely Moved the Needle In FY 2020 appeared first on Going Concern.

Here are the latest additions to the purple team’s Industry lineup:

• Bryan Benoit, national managing partner, Energy
• Sean Denham, national managing partner, Services
• Amy Flynn, national leader, Life Sciences
• Bob Hersh, national managing principal, Manufacturing and Food & Beverage
• Simon Jewkes, national managing principal, Retail
• Alex Rhodes, national managing partner, Hospitality & Restaurants
• David Tyler, national managing principal, Healthcare

Congrats all around.

[Grant Thornton]

The post Seven People at Grant Thornton Just Got Cushy New Industry Jobs appeared first on Going Concern.

The group of 30 new partners and principals (18 partners and 12 principals) is the smallest since 2013, when 30 partners and principals got their golden tickets. Here’s a look at new partner/principal class sizes at GT since 2010:

• 2020: 30
• 2019: 42
• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

Here’s a look at the Purple Rose of Chicago’s class of 2020 new PPMDs by the numbers:

• 23: The number of new PPMDs in audit, the most of any service line, followed by 22 in advisory, 16 in tax, and five in internal client services.
• 23: The number of new PPMDs who are women, or 35% of the class.
• 8: The number of new PPMDs in Philadelphia, the most of any location, followed by seven in Washington, DC, five in Iselin, NJ, and four each in Denver, Houston, and Chicago.
• 1: The number of new partners with the last name of Stark.

Here is the class of 2020 at Grant Thornton:

Congrats to all the new Grant Thornton PPMDs!

The post Promotion Watch ’20: Grant Thornton Admits 30 New Partners and Principals appeared first on Going Concern.

Sherri Fleming joins the firm as a Director in our audit practice, specialising in the audit of alternative investment Funds. Sherri brings with her nearly 20 years of experience in the audit industry, the last 14 of which have been in the Cayman Islands. Her role as a Director sees her leading audit engagements, building and developing client relationships, coaching and mentoring her teams, and taking part in industry related webinars focusing on the evolving landscape of asset management in the Cayman Islands.

We haven’t been able to dig up much other information about Fleming, other than what’s in her profile on PwC Cayman Islands’ website, which is still active. Do they even know she left? Here P. Dubs, we’ll give you some proof that she’s on the purple team now:According to her PwC profile, Fleming is a member of the Chartered Professional Accountants of Canada, a CPA in the state of Illinois, and is a member of the Cayman Islands Institute of Professional Accountants.

We’ll keep an eye out for GT Caymans’ next news release, which at this rate will be sent out around Oct. 10ish.

[GT Cayman Islands]

The post Grant Thornton Poaches Someone From PwC and Issues a Press Release, Part I appeared first on Going Concern.

Last year the FRC was pretty unhappy with Grant Thornton after the firm’s 2018-19 audit quality inspection report revealed that GT flunked half of the eight audits that were inspected. The U.K.’s audit cops said last year:

We assessed four out of eight audits as requiring more than limited improvements, compared with two of eight in 2017/18. We have assessed ten of the 39 audits that we have reviewed over the past five years as requiring significant improvements. This percentage (26%) is markedly higher than any other firm we have inspected over the period. This level of audit quality is unacceptable.

The quality of the audits inspected in the year, and indeed the overall lack of improvement in quality over the past five years, is a matter of deep concern. We have therefore required the firm to prepare and implement a detailed action plan to undertake an overhaul of its audit practice to improve quality.

This was 2017-18 KPMG-level bad, folks.

So by the looks of it, the FRC reviewed nine Grant Thornton audits during the 2019-20 inspection cycle instead of eight the year before. Here’s how GT did:

We reviewed nine individual audits this year and assessed only five (55%) of them as requiring no more than limited improvements.

In response to the very poor audit quality identified in our 2019 report on the firm, GT initiated an audit quality plan which GT refer to as its Audit Investment Plan (“the plan” or “the AIP”) in Spring 2019. We therefore increased our scrutiny of the firm. Due to the timing of the plan, it had not yet had any significant impact on the quality of the audits we reviewed in this inspection cycle.

The firm has taken steps to address the key findings in our 2019 public report through the AIP, including focused training and standardising the firm’s audit work programs. We have identified improvements, for example, in the audit of going concern, a key finding last year. We also identified good practice in a number of areas of the audits we reviewed (including delaying signing the audit opinion until all evidence had been provided by the audited entity) and in the firm-wide procedures (including engaging external consultants in its root cause analysis process).

The overall inspection results remain unacceptable following poor inspection results last year. We continue to have recurring findings that contributed to this year’s inspection results. These include the effectiveness of the audit of revenue and appropriate levels of challenge and scepticism in areas of judgement. The firm needs to ensure that the specific actions taken to address the root causes of our findings also consider the actions needed to deal with the recurring nature of the issues.

A 45% failure rate instead of a 50% failure rate is still progress (albeit small), but for the fourth straight year, GT has had two or more inspected audits that needed “significant” improvements, as this graph shows:

In GT’s response to the FRC’s findings for 2019-20, the firm closed its comments with this:

We recognise that audit quality is a journey rather than a destination and, whilst we have commenced the journey with vigour underpinned by a significant commitment across the firm to achieve consistently high quality in our audit work, our strategy is a multi-year strategy and, over the longer term, fully embedding new practices within the business in a sustainable manner is a key priority for us.

KPMG has been on a years-long journey from one end of the Earth to the other to find the elusive audit quality. Let’s hope GT finds it sooner rather than later.

Here’s the latest breakdown of U.K. audit failure rates (requiring improvements or significant improvements) including Grant Thornton:

• Deloitte: 23.5%
• EY: 28.6%
• PwC: 35.3%
• BDO: 37.5%
• KPMG: 38.9%
• Grant Thornton: 44.4%

[Grant Thornton audit quality inspection report]

The post Grant Thornton U.K.’s Latest Audit Inspection Report Is Out, and It’s Almost as Bad as Last Year’s appeared first on Going Concern.

We received this tip a little bit ago:

Looks like GT will be cutting some advisory people and furloughing new hires and cutting some executive assistants. Seems to be about 1.5% of the total workforce.

That was followed almost immediately by:

Grant Thornton (US): furloughing some recent new hires where market demand has fallen significantly, eliminating a small number of internal roles, and downsizing the Workplace Solutions team (including some executive assistants)

And we must tip our cap to the person at the Purple Rose of Chicago who provided us with the message CEO Brad Preber sent to GTers this morning. I’ve bolded the part pertaining to the layoffs:

To my teammates,

As the COVID-19 global pandemic continues to grow, we are continuing our work to balance our three Purple Chips:

1. To take care of our people
2. To be there for our clients and
3. To keep our business strong

As you’ve heard me say before, all three of these priorities are interconnected. We can’t focus on just one priority at any given time – we have to always keep them in balance, even when it seems as though they are in conflict with one another. This is how we must proceed in the work we are doing together to continue to serve our clients with quality and excellence and become the most admired firm in our profession.

A key part of keeping our business strong is continuing to monitor impacts of the pandemic and resulting economic recession on our business – impacts we can see today, and that we can see taking shape for the fiscal year to come.

The overall picture is filled with uncertainty, but some trends are clear. Revenues have declined in a few business units in Advisory due to contracting demand in the market. Billing and collections have slowed across the firm as clients’ businesses are impacted by the slowing economy. Voluntary attrition is down dramatically as the job market contracts, creating unsustainable overcapacity in several areas of the firm. Finally, as we move intentionally to achieve a more competitive cost to deliver, we expected changes in our business would result.

In light of these trends and actions we’ve been taking to become more competitive, we are making small adjustments to our staffing levels in a few specific areas of the firm:

• We are reducing the size of some teams across Advisory Services, including putting some of our recent new hires on furlough, where market demand has fallen off significantly;
• We are eliminating a small number of ICS roles where organizational changes will enable us to better align to our business priorities; and
• We are downsizing our Workplace Solutions team, including some executive assistants, as the scope of the business need for these roles has changed.

Consistent with our culture of caring, we are providing these teammates a package of severance pay and benefits to help ease the transition to their next professional opportunity.

When the COVID-19 crisis first hit, we took a number of steps to balance the needs of our people, our clients and our business. In April, we reduced partner/principal draw payments, asked the owners of the business to contribute to a capital call to strengthen our balance sheet and asked managing directors on the leadership team to take a temporary pay cut. In May, we decided to eliminate merit salary increases and annual bonuses for all employees as a way to maintain financial strength while keeping job reductions to a minimum.

This week’s decisions are difficult, but represent changes that will help keep our firm strong in FY21 so we can continue to balance all our goals for our people, clients and business going forward. We’ve scheduled a short firmwide all hands call this coming Monday, where I’ll discuss these decisions a bit more, and everyone in the firm will have an opportunity to ask questions. I’ll hope you’ll make time to join.

For my video this week, I spoke with Sam Shaw, our chief financial officer, about some of the trends we’re seeing in the market and our business results that led to these decisions. I hope you’ll take a moment to watch.

Thanks again for all you continue to do for our firm. Have a safe and restful weekend.

Brad Preber

CEO

GT’s fiscal year ends a week from today, but as I’ve mentioned on this site before, FY 2020 global (and U.S.) revenues for the Big 4, GT, BDO, RSM, and the like probably won’t be impacted too badly by the COVID-19 pandemic because business was plentiful per usual for most of the year until March when firms started sending everyone home to work and the economy started tanking and work dried up, especially in advisory and consulting. It’s FY 2021 revenues that will be a real shitshow. We saw it in 2009, following the global financial crisis. Deloitte’s global revenue fell about 5% from 2008, EY’s dropped nearly 13% from 2008, and KPMG’s decreased 11% from 2008. PwC was the only Big 4 firm with a slight year-over-year increase, at 0.30%.

I wasn’t able to find Grant Thornton’s global revenues for 2008 and 2009 but I suspect 2009’s wasn’t any good either. I have a feeling we’re going to see some very sobering revenue results next year across the board.

Before today’s layoffs, we had heard about some underperformers being shown the door at Grant Thornton in early May. Hopefully there won’t be any more GTers losing their jobs anytime soon.

Good luck to all those affected by today’s layoffs.

Related articles:

Grant Thornton Reducing Partner Draws By 25% For the Rest of FY 2020
Layoff Watch ’20: What’s This About Grant Thornton ‘Optimizing’ Some People?
Grant Thornton to Staff: ‘Don’t Expect Raises or Bonuses This Year, Sry’

The post Layoff Watch ’20: Grant Thornton Is the Latest Firm to Trim Some Staff appeared first on Going Concern.

The Queen’s Grant Thornton is the latest firm to pay a slap-on-the-wrist fine from the Financial Reporting Council for misconduct related to really screwing up on ethics and independence requirements in its audit of Conviviality Retail PLC.

The Wall Street Journal reported:

Grant Thornton had a former manager first audit the finances and then prepare the accounts for Conviviality Retail PLC, a liquor store chain that went into receivership in 2018. The regulator ruled that it resulted in a breach of independence.

Grant Thornton was handed a £3 million ($3.8 million) fine and a severe reprimand by the regulator. The fine was reduced to £1.95 million because the firm admitted to the findings, the FRC said Wednesday.

Former audit engagement partner Kevin Engel and former senior manager Natasha Toy were both reprimanded. Mr. Engel was banned from signing future audit opinions, the FRC said.

So what kind of shenanigans did Engel and Toy attempt to pull? According to WSJ:

Grant Thornton, the former auditor for Conviviality in 2014, assigned Ms. Toy to help the company with preparing its financial accounts. She previously was involved with auditing Conviviality’s financial statements for the year ended April 30, 2014, resulting in a loss of independence, according to the FRC.

Mr. Engel, the audit engagement partner who instructed Ms. Toy, also asked her to remove four-and-half hours recorded as audit work to hide evidence about her involvement in the audit and the subsequent preparation of financial statements, the FRC said.

So as a result, the FRC in a press release deemed GT’s policies and procedures to ensure compliance “defective, inadequately implemented and monitored.” And the FRC continued to pile on GT:

The firm failed to take responsibility for ensuring an appropriate control environment that placed adherence to ethical principles and compliance with ethical standards and requirements above commercial considerations … ; it failed adequately to resource its Ethics team; and it did not have an appropriate enforcement regime whereby individual breaches of Ethical Standards were identified. The failures were repeated and prolonged (over a course of three years [2014 to 2017]) and resulted in numerous breaches of ethical standards and requirements by the firm’s partners and staff.

Neither Engel nor Toy were fined. And both of them no longer work for GT.

In addition to the fine, Grant Thornton was ordered to:

• Establish an ethics board to oversee the firm’s compliance with ethical standards and requirements. The board must provide reports to the FRC for three years.
• Review its ethics function to identify any skills/resource gaps.
• Increase training to staff on relevant ethical issues.
• Improve the firm’s policies and procedures to ensure compliance with ethical standards and requirements.

Now go sit in the penalty box and feel shame, Grant Thornton.

Grant Thornton, Former U.K. Executives Sanctioned for Misconduct [Wall Street Journal]

[Financial Reporting Council]

The post Grant Thornton U.K. Given Seven-Figure Fine For Totally Blowing Ethics and Independence Rules appeared first on Going Concern.

From a press release seen by the website TheBusinessDesk.com:

Dickinson who is from Scarborough has extensive experience of working both with SMEs and large multi-nationals on cross-border activity.

He is the latest senior addition to Grant Thornton’s expanding tax team, which is led in the North by partner Rachel Engwell and has seen continued investment at all levels over the last 18 months.

Double D worked at EY for about 11 years, and he was just promoted last September to associate partner in the international tax team in Leeds. So he’s all ready to make it rain as a partner at Grant Thornton.

While he has spent a majority of his career in the U.K., Dickinson served as a director for the U.K. Tax Desk in EY’s Singapore office from 2012 to 2015. He has also held the titles of senior manager and director of international tax services at EY U.K., according to his LinkedIn profile.

People: Grant Thornton, IoD, and more [TheBusinessDesk.com]

The post Grant Thornton Poaches Someone From EY and Issues a Press Release, Part I appeared first on Going Concern.

Apparently Grant Thornton would rather kick 70 people from its tax and consulting practices to the curb than furlough them under the government’s Coronavirus Job Retention Scheme. That program allows furloughed workers to be paid 80% of their salary, capped at £2,500 a month, until the end of October.

June 10 was the last day employers could apply to use the government-funded furlough program, according to the Financial Times. GT did not apply. And this made some GTers unhappy:

“It is hard to accept that the firm refused assistance from the government’s job retention scheme and have started the process to make staff redundant only weeks later,” one employee told the Financial Times. “Clearly being on the furlough scheme until October 31 and then facing redundancy is better for an employee than being made redundant in July.”

But GTers knew the firm wasn’t going to take advantage of this program. CEO David Dunckley said in April that the firm had “assessed our own business against the criteria for using the furlough scheme” and decided it was not “appropriate.”

So what did GT do instead? It cut the pay and hours of 300 employees and refused to cut the monthly payments its 190 partners receive from the firm’s profits. And now it is laying off 70 staffers.

Accounting firms sure have a weird way of showing how much they care about their employees.

Grant Thornton staff face redundancy as pandemic bites [Financial Times]
Grant Thornton cuts staff pay to weather expected fall in profits [Financial Times]

The post Layoff Watch ’20: Grant Thornton U.K. Is Forcing 70 Employees to Take Early Exits appeared first on Going Concern.

Here’s what we were told is going down at the Purple Rose of ChicagoToronto:

GT Canada cutting back wages/hours to 80% for all staff levels for July through Sept. Everyone must use vacation time and no OT will be paid out to those that are not provincially mandated. CPAs are not bound by labour standards and therefore the OT/Flex time is not being honoured.

They said these steps are to avoid more layoffs but I think more layoffs will come in Sept/Oct if not earlier. Colleagues are not happy. The system seems to reward those that have not put the extra effort in and punish the ones that have worked hard and put the OT in. Many feel like they are just a number and not a valued team member.

I think it’s important to note that a lot of trust has been lost in the company and many at all levels are actively seeking other opportunities. Could be a larger impact in the long run than GT has anticipated.

Grant Thornton Canada has already had some layoffs during the pandemic but nothing like what happened at Deloitte and KPMG. Hopefully no more GTers will have to turn in their purple roses involuntarily.

Anyway, this is what we heard. If any Canadian GTers have anything else to say, either on the contrary or supporting this news, get in touch with us using the info below.

The post Rumor Mill: Grant Thornton Canada Employees Are Still Being Asked to Work Crazy Hard Despite Reduced Hours and Pay appeared first on Going Concern.

Yesterday we went through Deloitte’s ridiculously good 2018 inspection report, which featured an all-time low audit deficiency rate of just over 11%. That beats the previous record-low deficiency rate of 18% set by Grant Thornton in its 2017 inspection report. So, how did GT do in its 2018 report? Let’s take a look.So, of the 32 issuer audits of Grant Thornton’s that were inspected by the PCAOB in 2017, 25% had significant errors. Great, Deloitte is now going to be like the surviving members of the 1972 Miami Dolphins (the only undefeated team in NFL history), who pop open bottles of champagne every time they know their perfect record will remain in tact.

OK, so GT didn’t break its single-year low deficiency rate of 18%, but you’ve got to give the Purple Rose of Chicago a little credit for the improvements the firm has made in audit quality. From 2011 to 2013, during the Reign of Chipman, GT had an average audit error rate of 55%, with a high of 65% in 2012—one of the worst of all time. That’s not just bad, that’s next-level bad.

But covering its last three inspection reports, GT has had an average deficiency rate of 22%.

Here’s a historical look at Grant Thornton audit deficiencies, courtesy of a March 2019 report by Compliance Week with updates by us:

• 2010: 29%
• 2011: 43%
• 2012: 65%
• 2013: 56%
• 2014: 32%
• 2015: 41%
• 2016: 24%
• 2017: 18%
• 2018: 25%

According to the PCAOB, the most common Grant Thornton deficiencies in 2018 related to testing the design or operating effectiveness of controls selected for testing (five audits), identifying controls related to a significant account or relevant assertion (five audits), and evaluating significant assumptions or data that the issuer used in developing an estimate (four audits).

Here’s a little light reading for you guys tonight.

The post Grant Thornton’s 2018 PCAOB Inspection Report Is Not As Good As 2017’s, Not As Bad As 2012’s appeared first on Going Concern.

• Brett Beightol, Orange County, CA, succeeds Alan Herrmann on Aug. 1. Hermann was promoted to lead Grant Thornton’s West region tax practice in 2019.
• Mike Desmond, Charlotte, NC, succeeds Dave Wedding who is retiring on July 31.
• David Gifford, Phoenix, succeeds Tim Zingraf on Aug. 1.
• Doreen Griffith, Dallas, succeeds Wally Gruenes who is retiring on July 31.
• Amanda McCarty, San Jose, CA, succeeds Tony Perazzo on Aug. 1. Perazzo was promoted to GT’s West regional managing partner role in 2019.
• Bryan Merrigan, Metropark, NJ, succeeds Matt DiDonato effective immediately. DiDonato was named New York City OMP on Jan. 22, 2020.
• Jason Perry, Atlanta, succeeds Wade Weeks who is retiring on July 31.
• Dan Powers, Seattle, effective immediately.
• Barbara Koosa Ryan, Columbia, SC, succeeds Mark Ballew who is retiring on July 31.
• Seth Siegel, South Florida (Miami and Fort Lauderdale), succeeds Doug Gawrych who is retiring on July 31.
• Adam Steinmetz, San Diego, succeeds Brett Beightol effective immediately.
• Rimma Tabakh, San Francisco, succeeds Tony Perazzo on Aug. 1.

Purple Rose of Chicago CEO Brad Preber is probably going to be watching Gifford like a hawk because BP was OMP of the Phoenix office for three years before gradually moving on up to the big chair. No pressure, David.

And we can’t forget about Mark Sullivan who was named office managing principal of the office in Sweet Home Chicago. He succeeds Vince Tomkinson, who accepted a new role as GT’s global account leader based in the United Kingdom.

Congrats to all the new OMPartners and the new OMPrincipal at GT!

The post Promotion Watch ’20: A Dozen Grant Thornton Partners Have New Titles to Show Off On LinkedIn appeared first on Going Concern.

One tipster writes:

GT firmwide call – promotions continuing with raise commensurate with level, no raise or bonus to anyone else

Another tipster informs us that there will be fewer promotions than prior year; as we understand it there was no mention of whether or not raises tied to these promotions are expected to be on par with promotion raises of years past.

In an April 5 letter to GT staff, CEO Brad Preber outlined a cost-cutting and capital investment plan that would affect partners first and foremost:

While our firm was on a path for record financial performance in fiscal year 2020, and today our financial resources are more than sufficient, we are acting in an abundance of caution given the uncertainties of the road ahead. To ensure our firm has the financial means and flexibility to come through this crisis in a position of strength and leadership, the leaders of the firm are taking steps to maintain ample liquidity and ensure a strong balance sheet. These include reducing discretionary spending, pursuing opportunities to help clients navigate the current crisis, and participating in federal stimulus and regulatory relief programs.

[…]

We are reducing scheduled interim profit distributions to partners and principals during the coronavirus pandemic, with the majority of partners and principals having monthly draws reduced by 25% through the end of Grant Thornton’s fiscal year (July 31, 2020).

As an additional demonstration of stewardship and confidence in the firm, partners and principals will contribute to a capital call, in effect making an incremental investment in the firm. This will enhance the firm’s already strong balance sheet should market turmoil dramatically worsen.

All six managing directors on our firm’s National Leadership Team have volunteered to take a 20% cut in their salary payments through the end of the fiscal year. They are doing this as an act of solidarity with the firm’s partners and principals.

To date, Grant Thornton US has not joined the ranks of public accounting firms large and small that have been forced to institute staff layoffs, pay cuts, and/or furloughs due to the fallout from the coronavirus pandemic. We’re told staff are understandably a bit unhappy about today’s announcement however sympathetic to the difficult choices firm leaders have made in these troubling times.

The post Grant Thornton to Staff: ‘Don’t Expect Raises or Bonuses This Year, Sry’ appeared first on Going Concern.

Here’s the tip we got:

They’re “optimizing” people at GT US in certain departments.

Digital transformation was one of them. Public sector is getting rid of people too.

I’ve seen managers to MDs be optimized.

The other tidbit this person told us is that “I’ve heard from partners that promotions may be deferred… in consideration right now.”

Putting promotions on the backburner is currently happening at a lot of firms. Anyway, back to the optimizing at the PRofC. Somebody on Reddit posted a week or so ago that about 50 people from Grant Thornton were told to look for work elsewhere. We haven’t been able to confirm yet whether it actually was 50.

A now-former GTer took to Fishbowl last week to complain about his/her lack of utilization and has some regrets:

OP made it seem like he/she worked in advisory and that associates, senior associates, and managers were let go “because of lack of projects honestly, not something employees can control.” OP also said those let go didn’t get a severance.

GT isn’t the first firm since this pandemic started to get rid of its weakest links and it won’t be the last. There are rumors floating around that EY is going to start a low-performer purge once July 1 rolls around, and we’ve heard the same thing is going to happen relatively soon at Deloitte.

It doesn’t matter if these GTers weren’t considered rock stars, it still sucks when people lose their jobs, especially now. We hope everyone lands back on their feet soon. And hey, we got something that might help you.

The post Layoff Watch ’20: What’s This About Grant Thornton ‘Optimizing’ Some People? appeared first on Going Concern.

Here’s what a source told us:

1. Layoffs occurred on March 30th and April 14th. Appears select few senior leaders in GT are short term layoff decisions before a new pay period (bi-monthly) starts. Around 15 assurance staff from staff level to manager were terminated permanently.

Also, dozens of tax people including managers apparently. I don’t have an accurate number of tax staff laid off but it seems to be more than audit and also it had more of an impact on managers and seniors as well. The general impression I’m getting from different people is that personal tax and some corporate tax staff are hit hardest due to COVID-19 and delayed deadline imposed by government.

2. Effective Thursday, April 16th, GT put staff into three categories:

• I) Group A – 100% pay and 100% hours.
• II) Group B – 50% pay and 50% hours.
• III) Group C – 0% (in other words, temporarily laid off).

My knowledge from staff are that B is reserved for most tax people and underutilized or underperforming people in audit from staff level to senior manager. Lastly, Group C is for most administrative individuals and underperforming juniors.

According to our source, the offices within GT’s SOBU that were most affected by the job cuts were Toronto, Markham, and Mississauga.

Our source, who was one of those let go from Grant Thornton, said there were no rumors about layoffs as “everyone was unsure how the firm would respond” during the coronavirus pandemic. COVID-19 was the reason given as to why this person was laid off. From what we were told, others who were also let go were given the same explanation.

The source told us that they believe (not confirmed) only a select few partners knew about the layoffs before they went down:

I do know that myself and others can say that our managers were told [about the layoffs] after the fact. Some managers confirmed to me there was no performance related meeting (which occurred last year in May 2019 before about 7-8 people were let go due to poor firm performance in July 2019) of that sort preceding these layoffs so they had no idea this was coming.

Was anyone else from Grant Thornton’s SOBU caught up in the layoffs? Do you have knowledge of coronavirus-related layoffs in any of GT’s other offices throughout Canada? If you do, hit us up by email or text using the contact info below.

The post Layoff Watch ’20: Apparently Some Grant Thornton Canada Employees Had to Give Up Their Purple Roses appeared first on Going Concern.

Yesterday evening as I was on my way home from picking up some Red Robin for dinner for me and my family, we got a text on the tipline that Grant Thornton partners in the U.S. are taking a 25% pay cut. That was news to me. I had seen that GT in Australia and in the U.K. were cutting partner and staff pay/hours to avoid mass layoffs during the COVID-19 crisis, but nothing about what was going down at the Purple Rose of Chicago.

But the tip seems legit. A source told me this morning:

I can confirm partners and principals are having monthly draws reduced by 25% through the end of Grant Thornton’s fiscal year (July 31, 2020). Partners and principals will also contribute to a capital call. No mention of potential layoffs or bonus cuts, but it’s not like there is much to cut from bonuses to begin with. Overall, leadership has been open with information and seems to be working to keep morale high during the last stretch of busy season.

Here’s the message that CEO Brad Preber sent to GTers regarding “keeping our business strong through the coronavirus pandemic.” Thanks to the tipster who sent us this:

To my teammates,

In my messages throughout this COVID-19 crisis, I have reiterated three priorities for our firm: first, to take care of our people; second, to be there for our clients; and third, to keep our firm strong. We have discussed at length the many steps we have taken on our first two priorities. It is our third priority I write to you about today.

Like every business in America and around the world, we are beginning to prepare for the likely effects of the global pandemic and the resulting economic slowdown.

While our firm was on a path for record financial performance in fiscal year 2020, and today our financial resources are more than sufficient, we are acting in an abundance of caution given the uncertainties of the road ahead. To ensure our firm has the financial means and flexibility to come through this crisis in a position of strength and leadership, the leaders of the firm are taking steps to maintain ample liquidity and ensure a strong balance sheet. These include reducing discretionary spending, pursuing opportunities to help clients navigate the current crisis, and participating in federal stimulus and regulatory relief programs.

The National Leadership Team also has worked closely with the Partnership Board over the past week on a number of steps we are asking leaders, partners and principals of the firm to take to address the uncertainty of the economy brought on by the virus.

Consistent with our attitude of “showing the way,” our leaders and the owners of the firm have acted to further strengthen our balance sheet and liquidity. This, we believe, is an approach grounded in our understanding of “servant leadership.” Accordingly, we are taking the following actions:

• We are reducing scheduled interim profit distributions to partners and principals during the coronavirus pandemic, with the majority of partners and principals having monthly draws reduced by 25% through the end of Grant Thornton’s fiscal year (July 31, 2020).
• As an additional demonstration of stewardship and confidence in the firm, partners and principals will contribute to a capital call, in effect making an incremental investment in the firm. This will enhance the firm’s already strong balance sheet should market turmoil dramatically worsen.
• All six managing directors on our firm’s National Leadership Team have volunteered to take a 20% cut in their salary payments through the end of the fiscal year. They are doing this as an act of solidarity with the firm’s partners and principals.

For purposes of decision-making, our financial goal this year is 100% focused on taking care of our people, serving our clients and keeping the firm strong. We will continue to develop plans to keep the firm strong, depending on the length and severity of the COVID-19 crisis and the economic slowdown.

Finally, I’ll note that sharing these decisions with all of you, even as they only directly impact the firm’s partners, principals and leaders, reflects a greater openness that we are used to in a private partnership. I am taking this step, given these extraordinary circumstances, in the hope that greater transparency in a difficult time will help us all build a spirit of unity with one another so we can work together to overcome our challenges and come out of this situation even stronger than before.

As always, I cannot thank you enough for the amazing work you and all our teammates are doing under very difficult conditions to serve our clients and support one another. You have my deep and enduring gratitude.

Sincerely,

Brad Preber
CEO

As always, our virtual doors are wide open, so if GTers have anything else to add about what’s been happening at Preber & Co., give us a holler by email or text using the contact info below.

The post Grant Thornton Reducing Partner Draws By 25% For the Rest of FY 2020 appeared first on Going Concern.

Grant Thornton in the U.S. is seemingly taking care of all of its employees as the firm has transitioned to all remote work until at least the end of March because of COVID-19.

In his message to GTers, U.S. CEO Brad Preber said:

Hourly employees who may not have the ability to work while they are home will continue to be paid during this time.

That’s absolutely the right thing to do. But not all Grant Thornton International member firms are looking out for their hourly employees during this chaotic time. Here’s an email we got the other day:

Grant Thornton Canada is not following suit.

In short, Kevin Ladner sent out a firm wide email stating you can work from home under specific circumstances and if you are hourly, you must take unpaid or vacation days.

That’s totally brutal, if true. And guess what? It is true. Here’s part of the email that Ladner, GT Canada CEO and executive partner, sent to all employees on March 13 about the firm’s COVID-19 response:

Working from home

If you are required to work from home as a result of our new travel policies and related quarantine requirements, you will continue to receive your regular compensation and benefits, as long as you are able to work remotely and perform the essential responsibilities of your role.

If you occupy a role in the firm where it is not practical for you to perform your responsibilities outside of the office, and you are subject to the quarantine requirements described above, this will be considered an unpaid leave. The firm will permit you to allocate vacation or lieu time in this situation. [Bold and italicized emphasis added.]

For those of you who have already left on travel prior to the implementation of this policy, or have plans to leave within the next 48 hours, we will review your situation as it relates to compensation on a case by case basis. Regardless of your reason for travel, everyone will be required to self-isolate and stay away from our offices for at least 14 days.

There may be other legitimate reasons why you might choose to work from home rather than attend the office which the Firm supports. These might include, for example, those with underlying physical conditions that increase the consequences of being exposed to a virus, or people with childcare or eldercare responsibilities experiencing closures or the illness of their usual caregivers.

Regardless of the reason, the same policies regarding compensation while working from home will apply.

For those who choose or will be required to work from home please refer to our supplemental Work from Home Policy which will be emailed firmwide before 5pm ET today (Friday March 13).

Again, please consult with your People & Culture Manager with your individual questions or concerns.

This is a firm that makes hundreds of millions of dollars each year ($597 million in FY 2015 is the most recent numbers I could find) and it can’t pay its hourly employees? Employees who would be working at a GT office if they could and if it was safe to do so, and would be working from home if they had the ability to do so. Employees who helped GT Canada make its millions, BTW.

C’mon Kevin, this is the wrong thing to do. This is just as bad as professional sports teams not paying their hourly or part-time employees while their seasons have been put on hold because of the coronavirus. Even the Calgary Flames and the Winnipeg Jets changed their stances and now will make sure their part-time staff are getting paid.

Do the right thing, Kevin, and pay your hourly employees.

UPDATE: We were told this evening that Grant Thornton Canada CEO Kevin Ladner addressed the issue of compensation for hourly employees who are required to stay home but are unable to work earlier this morning (before our article was posted). Here’s part of what Ladner said in an email to GTers on Monday:

Last week we indicated that those who are not able to work from home would be required to take an unpaid leave. This particular reference was specifically related to a situation where colleagues who are not able to work from home, choose to travel outside Canada despite the firm’s recommendations, and are then subject to self-isolation following their return.

This week we are assessing the various circumstances upon which people may be required to stay home and not able to work. We’re reviewing any impacts this could have on compensation, and the various options available. I will share more about this before the end of this week.

If we get any additional information later this week, we’ll keep you guys posted.

The post Grant Thornton Canada Is Totally Giving Its Hourly Employees the Shaft appeared first on Going Concern.

A tipster sent us this message that all GTers received from CEO Brad Preber on Friday:

To all my teammates,

As this week comes to a close, it’s hard to take in the degree of change in our work and personal lives over just the past week. Events related to the outbreak of the coronavirus — and the illness it causes, COVID-19 — are moving faster than we could have imagined. And even as we focus on taking every action possible to keep every one of us safe and healthy — always our highest priority — I know this experience has been disorienting and disturbing.

At the same time, our team’s response has given me great confidence — not only that we will work through this disruption in a way that helps keep us safe and our business strong, but also that we are doing so in a way that honors our values and our purpose. We have so many teammates who saw early on where this situation was headed, and immediately began working across the firm to address issues spanning every aspect of health and wellness for our people and business continuity for our clients.

In addition to changes we’ve already announced, I’d like to announce two additional changes today:

• Effective today, all colleagues’ default work arrangement should be from home (or another location where you feel safe and secure). “All” means everyone — ECS and ICS, including administrative staff. While we are not closing all offices down fully, please use your best judgment if you feel you must come into the office, and let your engagement partner, coach and OMP know of your intentions.
• Hourly employees who may not have the ability to work while they are home will continue to be paid during this time.
• If you are working on a client engagement that currently requires work to be performed on site — e.g., in Public Sector, staff augmentation, or clients who require coverage, etc. — please look for further guidance shortly or discuss with your engagement leader.
• We will reassess this temporary policy at the end of March.
• Also effective today, we are eliminating all business travel, domestically and internationally, regardless of business need, through the end of March, at which time we will reassess. Please cancel any existing travel plans scheduled between now and March 31.

We are working to communicate frequently and transparently regarding the steps we’re taking to address this crisis. We will have more detail out shortly on the new, temporary policies above. Please look for announcements in the coming days about other new policies and accommodations the team is working on to make it easier for all of us to balance the needs of our families and our firm at this time.

I also will send a message to all our clients on Monday, letting them know of our continued commitment to serving their needs during this very challenging time and beyond.

Every day we are continuing to closely monitor this situation and make decisions about how we can best stay healthy and serve our clients. I strongly encourage you to stay up to date on GT news and decisions by reading our email updates and visiting our Coronavirus Resource Center; to be aware of government guidance through the Center for Disease Control’s coronavirus webpage; and to practice diligence in social distancing and taking standard precautions to prevent coming into contact with or spreading the virus.

I want to thank you and all our teammates who are working under incredibly difficult circumstances, and exhibiting every one of our core values in the process: collaboration, leadership, excellence, agility, respect and responsibility. We are striving in all ways to keep our response and our actions personal, and to build trust in our team — revealing a deep and instinctive commitment to a purpose for our firm we articulated only weeks ago.

I do not doubt that this crisis will test our firm in very serious ways in the coming weeks. But I also know we are a team of great resilience and deep care for one another. These are the attributes of our culture I see most clearly as we work through the coronavirus outbreak together. And they are the reason I am so confident we will come through this experience stronger than before.

As always, thank you for all you are doing for our clients and our firm every day.

We often like to poke fun at the Purple Rose of Chicago, and most of the time it’s warranted, but every accounting firm CEO or managing partner should be sending a similar message to their employees and putting in similar temporary work-from-home policies during this pandemic as Grant Thornton has done.

If you’ve been told by your firm to work from home for the time being, let us know by using the contact info below.

Stay safe everyone.

The post Grant Thornton Is Going All In On Working From Home During the COVID-19 Pandemic appeared first on Going Concern.

— Diane Swonk, chief economist at Grant Thornton, said during an appearance on CNBC’s The Exchange on Feb. 26. She added that while the Fed is taking a wait-and-see approach, it might have to lower interest rates if the economy weakens enough as a result of the coronavirus.

Here is the video of Swonk’s appearance on The Exchange talking about the economic impact of the coronavirus:

The post Grant Thornton Economist Says Coronavirus Is an ‘Economic Pandemic’ appeared first on Going Concern.

Farewell to Mike McGuire, former CEO-turned-CEO emeritus of Grant Thornton, who is hanging it up in February after 17 years with the Purple Rose of Chicago.

“I am so pleased about the progress we’ve made growing our firm and serving clients’ needs during my time at Grant Thornton,” said McGuire. “Participating in this work as a teammate, partner and leader has been the greatest honor of my professional life.”

We’ve had fun covering McG through the years, from when he was announced to succeed the dynamic Stephen Chipman as GT CEO in 2014, to putting together a 160-page plan on how GT would prosper during his tenure and then realizing NO ONE would read 160 pages of his musings so he cut it down to five pages, to comparing Grant Thornton to Tesla, to blowing off work to throw out the first pitch at a Chicago Cubs game, to being one of the accounting luminaries who would’ve survived Thanos’s snap.

We’ll also miss the videos he did with his man-crush and Grant Thornton’s favorite golfer, Rickie Fowler.

https://www.youtube.com/watch?v=OhquzptI6sY&feature=emb_title

Great job in your directorial debut, @RickieFowler! I know you'll have a great week here at @TPCSawgrass! #micdrop https://t.co/Br45HDe2X2

— J. Michael McGuire (@mikemcguireCLT) May 10, 2018

From everything we’ve been told, McGuire was well-liked by GT employees, he’s been a good sport about our good-natured ribbing of him, and he’s a Cubs fan, which makes him OK in my book.

Prior to becoming GT CEO in 2014, McGuire served on the firm’s senior leadership team as national managing partner of operations and previously was managing partner of the firm’s Carolinas practice. He joined Grant Thornton in 2002 after a 20-year career at Arthur Andersen.

McGuire stepped down as CEO last June and took over the role of CEO emeritus and “brand ambassador” in August. Brad Preber, who was named GT’s interim CEO last summer, had the “interim” tag removed in November.

Where will McG turn up next? The press release states that he is “active with several civic and business groups and expects to increase these activities.” Maybe he winds up on a public company board of directors in the near future?

Whatever the case, happy trails, Mike. Maybe I’ll see you at Wrigley Field this summer.

The post Mike McGuire Is Retiring From Grant Thornton appeared first on Going Concern.

Instead of me regurgitating all the numbers provided in the press release, Grant Thornton provided this handy-dandy infographic that gives you the gist of its 2019 results:

There are now more than 56,000 GTers around the world, 3,342 of whom were hired in 2019.

The post Grant Thornton Made a Little Magic Happen In 2019 appeared first on Going Concern.

The newest board members are:

Robert Fox: Bert is national managing partner of professional standards, based in Chicago. He leads the Purple Rose of Chicago’s national office teams over accounting principles, audit methodology, SEC and regulatory matters, and independence and ethics. Fox also consults with businesses on complex accounting matters, including business combinations, revenue recognition, share- and nonshare-based payments, and long-lived assets, according to his bio.

Fox joined GT in 2002, left for two years to become a Professional Accounting Fellow in the Office of the Chief Accountant at the SEC, then came back to GT in July 2009, according to his LinkedIn profile. Before joining Grant Thornton, Fox spent time at Arthur Andersen and McGladrey.

Chris Smith: Smith is advisory services practice leader for growth and transformation, based in Bellevue, WA. This bearded dynamo focuses on “designing and deploying future-ready strategies for clients wanting high, yet sustainable growth and then operationalizing the strategy across the organization,” according to his bio. His expertise mainly centers on corporate strategy, sales, marketing and customer strategy, enterprise transformation, operational excellence, post-merger integration, and culture design.

Smith joined Grant Thornton in 2007 after GT gobbled up the boutique strategy firm he founded, Arryve.

Mark Sullivan: MS is advisory services practice leader for the Midwest region, based in Chicago. He’s got mad skillz in corporate investigations, fraud prevention and detection, and litigation support.

According to his bio:

Mark has worked with companies and their counsel worldwide to investigate frauds, develop and implement anti-fraud programs, and identify vulnerabilities within their organizations. His advanced interviewing skills and his team of forensic accountants, eDiscovery and computer forensic professionals provide an unparalleled response to complex investigations, compliance and litigation matters.

He joined GT in 2009, according to his LinkedIn profile. He also spent parts of his career at Deloitte and Arthur Andersen.

In addition, GT’s partners and principals re-elected Jim Wittmer to the partnership board, then re-elected him as the board’s chairman.

Wittmer is Grant Thornton’s national tax leader for market growth, based in Philadelphia. He’s been with the firm for more than 27 years.

Wittmer took over as partnership board chairman in June once Brad Preber stepped out of that role to become interim CEO of Grant Thornton. Preber was elected CEO of the Purple Rose of Chicago in November.

The post Grant Thornton Elects Three Dynamic Individuals to Partnership Board appeared first on Going Concern.

The name of the company wasn’t released by the FRC, which is bogus, and neither was the name of the engagement partner at GT who also was fined £20,000.

Normally the FRC names the company whose audit was botched—usually by a Big 4 firm or Grant Thornton—and it names the engagement partner, if the FRC deems punishment is necessary. But not this time, which seems like a slight to shareholders.

The London Evening Standard reported:

The FRC can keep details of a fine quiet if it decides releasing the information will not be in the public interest or unfair to those involved.

The decision to not name the company or partner was made by the FRC’s 10-member conduct committee chaired by David Childs, the former managing partner of magic circle law firm Clifford Chance.

The company at the centre of the audit had done nothing wrong and faced no action, a possible motivation for the FRC’s decision to withhold the name.

While the FRC withholding the name of the public company is unusual, Grant Thornton being punished for bad auditing isn’t unusual. In its most recent audit inspection report, the FRC said GT would be “placed under increased scrutiny due to sustained poor results.” Poor is an understatement: 26% of Grant Thornton’s audits reviewed in the past five years required “significant” improvement, while another 15% required some sort of improvement.

Here’s what happened in GT’s latest auditing disaster, according to an FRC release:

The admitted breaches of Relevant Requirements relate to the audit work carried out on the Company’s principal assets, and an area identified as a significant risk. The work done on the sampling of those assets was inadequate and failed to select an audit sample that was sufficient to reduce the sampling risk to an acceptably low level. The audit team also placed undue reliance on the Company’s externally appointed experts in the valuation of the assets and did not appropriately consider the use of an auditor’s expert. The breaches by the audit team led to a failure to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions about the valuation of the assets. There were also failures to exercise sufficient professional skepticism and to prepare adequate audit documentation. However, none of the breaches of Relevant Requirements were either intentional, dishonest, deliberate or reckless.

That last sentence plus the cooperation provided by Grant Thornton and the engagement partner during the course of the FRC’s investigation, plus the engagement partner’s previously unblemished record, plus the steps GT is taking to try not to suck at auditing anymore resulted in the firm’s fine being reduced to £422,500 and the partner’s fine being reduced to £13,000.

The post Another Grant Thornton U.K. Audit Was a Total Disaster appeared first on Going Concern.

David B. Weir, Jr. has joined Grant Thornton LLP’s Public Sector Healthcare practice as a managing director. In this role, he is responsible for supporting Grant Thornton clients at the U.S. Department of Health and Human Services and across the public sector healthcare space.

Weir has more than 25 years of consulting experience serving commercial, public sector and nonprofit clients. He brings a depth of capability and experience in strategy, transformation, automation and innovation services with a focus on enabling client missions and enhancing employee experience.

“David’s notable experience and accomplishments in growing business lines, building client relationships and negotiating and managing federal contracts is a strong addition to our public-sector healthcare capabilities,” said Sharif Ambrose, managing principal, Public Sector Healthcare for Grant Thornton. “His innovative mindset and leadership has helped federal agencies and other organizations improve efficiency, execute strategic change management and bolster human capital management, and we’re excited he’ll be part of our future growth at Grant Thornton.”

Most recently, he was a managing director at Deloitte Consulting LLP, where he held multiple leadership roles across various sectors, including federal healthcare and defense. He also served as a managing director at BearingPoint, Inc. and held consulting roles with KPMG LLP and The Hackett Group earlier in his career.

His LinkedIn bio offers us some other interesting information about DW, including that he has an active Top Secret security clearance; he has provided consulting services to such clients as Goodyear, Kodak, Sprint, JP Morgan, U.S. Army, and the U.S. Missile Defense Agency; and he founded the Deloitte Behavior Change Center of Excellence (CoE) in 2012.

And among the 57 people and organizations he follows on Twitter is Rickie Fowler because Grant Thornton.

Let’s hope it doesn’t take another four years to complete the “Grant Thornton poaching Deloitte” trilogy.

Related article:

Grant Thornton Poaches Someone From Deloitte and Issues a Press Release, Part I

The post Grant Thornton Poaches Someone From Deloitte and Issues a Press Release, Part II appeared first on Going Concern.

The Partnership Board at Grant Thornton LLP announced that Bradley J. Preber will serve as the firm’s CEO. The board appointed Preber to the role following a comprehensive search process, and the firm’s partners and principals ratified the selection.

Preber has been serving as Grant Thornton’s interim CEO since June 2019 – and will now serve as the firm’s CEO through July 31, 2022 (his mandatory retirement date).

“Brad is a decisive leader who believes in delivering exceptional value to clients,” said Jim Wittmer, chairman of the Partnership Board at Grant Thornton. “As CEO, Brad will fuel Grant Thornton’s continued success providing innovative audit, tax and advisory services built on a foundation of quality.”

According to Preber: “Today’s businesses face formidable challenges – from accelerating growth and keeping pace with technology to mitigating risks and enhancing audit quality. As CEO, I will help Grant Thornton build on our track record of helping clients overcome these challenges through our uniquely differentiated client services, and our singular ‘status go’ culture.”

Preber joined Grant Thornton in 2004, after serving as a partner at Arthur Andersen. He has held numerous leadership roles at Grant Thornton, including: national managing partner of Business Risk Services; office managing partner in Phoenix; and chairman of the firm’s Partnership Board.

Consulting magazine named Preber to its 2019 Top 25 Consultants list for leadership – citing his 35 years of experience and his stewardship of Grant Thornton’s Business Risk Services practice, which Preber grew into a $200 million business, including a Cyber Risk practice he launched in 2017.

Preber is renowned for his experience serving clients as a litigation consultant and expert witness, as well as a forensic accountant, neutral arbitrator and fraud investigator. He has handled numerous complex issues and events with an emphasis on ‘bet the company’ commercial disputes and fraud claims.

Preber received a bachelor’s of business administration degree with a concentration in accounting from the University of New Mexico. He is a certified public accountant in Arizona, Mississippi, New Mexico and Texas, and is a member of the American Institute of Certified Public Accountants. Preber is a Certified Fraud Examiner, Certified Global Management Accountant, Certified Construction Auditor and is certified in Financial Forensics. He is also active in several professional, civic and community organizations, and has served on a number of boards of directors.

During the afternoon on Friday, this tip landed in our inbox:

“Grant Thornton CEO announced internally – finalists were Nichole Jordan, Jeff Burgess (audit managing partner) and Brad Preber. The nod went to Preber.”

We contacted another source who also confirmed that Preber would be taking over as CEO.

When reached for comment this morning, a Grant Thornton spokesperson didn’t confirm or deny the news in a statement to Going Concern:

“Grant Thornton LLP’s partnership group is currently in the process of electing its new CEO. The firm does not discuss operational matters or procedures.”

Not sure if this has been the case since Preber took over as interim CEO-elect on Aug. 1, but I found the lack of an “interim” tag under his photo in the About Us section of GT’s website interesting:

Preber, who joined Grant Thornton in 2003, took over as interim CEO-elect after Mike McGuire said “thanks but no thanks” to having his term as CEO extended to his mandatory retirement date of July 31, 2021. McGuire is presumably very busy acting as a GT “brand ambassador” in his role as CEO emeritus.

Once Preber got slapped with the title of “interim CEO-elect,” he stepped away from his duties as national managing partner of business risk services, managing partner of the Phoenix office, and chairman of the partnership board, the firm said.

But as Preber was transitioning to his new role, we started getting tips about a bunch of layoffs at Grant Thornton and that the firm was shutting down its office in Westborough, MA.

The mass hysteria resulted in Preber leading a firmwide call on Aug. 1, when he confirmed that 230 professionals and 40 PPMDs were let go—“mostly cutting fat in ICS (internal client service, non-client facing people) plus people from certain advisory service lines that were deemed no longer strategic fits for the firm,” a source told us at that time.

While GT’s partnership board seems to have been in Preber’s corner, our tipster told us on Friday that “partners are really struggling with Preber.”

“He made a lot of shortsighted, half-baked management decisions this summer. Seen less as progress and more as a coup.”

When asked to explain, this person told us:

“Shortsighted decisions were the heavy cuts over the summer. They let go of partners who were key technical specialists who held parts of the practice together without consulting local office leaders about the impact.”

After Preber addressed the layoff rumors in the firmwide call, we were given a heads up that GT was considering three of its top women executives for the CEO seat. One of the potential candidates was Nichole Jordan, national managing partner of markets, clients, and industry, who apparently was a finalist for the role.

GTers, let us know in the comment section or using the contact info below whether you think Preber taking over as CEO is a good move or a bad move for your firm.

The post It’s Now Official: Grant Thornton Has Elected Brad Preber as CEO appeared first on Going Concern.

2018

• Stopped bidding for new audit work at the largest U.K. companies.
• Patisserie Valerie accounting fraud; Grant Thornton was the auditor and is under investigation by the Finanical Reporting Council.
• Fined £3 million by the FRC for “misconduct” relating to its audits of Vimto-maker Nichols and the University of Salford. Four auditors were also fined.
• A mutiny among a small group of partners caused Sacha Romanovitch to announce in October that she wouldn’t seek a second four-year term as GT CEO.
• The firm’s revenue actually dropped, from £500 million in 2017 to £491 million, and profits fell 8% to £72 million.
• Average pay per partner decreased 8%, from £403,000 in 2017 to £373,000.
• Fell from the fifth-largest to the sixth-largest accounting firm in the U.K.

2019

• CEO David Dunckley said some nonsense in January about it not being the auditor’s role to uncover fraud.
• Laid off about 60 administrative employees in March/April, mostly staff who had roles in brand, marketing, and communications, as well as staff in people and client experience functions.
• The FRC said in July that GT is being “placed under increased scrutiny due to sustained poor results” in audit quality. In total, 26% of GT’s audits reviewed in the past five years have required significant improvement.

Now we have another bullet point to add under 2019:

• Laid off a dozen partners in October.

The Financial Times had the scoop:

The accounting firm informed its top echelon that about 12 partners — 6 per cent of the total — were leaving as it attempts to improve profits and recover from a difficult year for the business, which has faced scrutiny over its audits of Patisserie Valerie and after the controversial departure of Sacha Romanovitch, its former chief executive.

The internal announcement about the partners, some who have worked at Grant Thornton for 30 years, was made ahead of its financial results, which are due to be published in December.

One of the more senior partners who was let go, according to FT, was Mark Henshaw, who had been with the firm since 1989, his LinkedIn profile shows.

Partners in all service lines, including audit and advisory, were affected by the cuts. Jonathan Riley, head of quality and reputation at Grant Thornton, told FT that the departures represented “a combination of factors, including early retirement and some people whose roles no longer exist because of recent restructures and a change of focus around our client base generally.”

As FT noted, Grant Thornton will announce its revenue and profit for 2019, as well as average pay per partner, in December. Something tells me we could very well have two more bullet points to add to this craptastic year at GT.

The post Layoff Watch ’19: Grant Thornton U.K. Cuts Reach the Partnership Level appeared first on Going Concern.

The only fun thing in the release is that GT is still taking a victory lap over its 2017 PCAOB inspection report, which found that only 18% of the firm’s 34 audits conducted in 2016 had deficiencies.

GT gloated:

Grant Thornton delivered on its commitment to quality; the results of the firm’s latest regulatory report reflect audit quality among the best in the accounting industry.

So with 2019’s results in the books, the Purple Rose of Chicago remains the sixth-largest accounting firm in the U.S., behind the Big 4 and RSM US, which recently reported $2.4 billion in revenue in 2019, and ahead of BDO USA, which announced last week that its revenue totaled $1.64 billion.

The post Grant Thornton Reports 5.4% Increase In FY 2019 Revenue, Still Gloating About Its 2017 PCAOB Inspection Report appeared first on Going Concern.

This year’s class of 42 new GT partners and principals is the largest since 2016:

• 2018: 32
• 2017: 39
• 2016: 47
• 2015: 50
• 2014: 32
• 2013: 30
• 2012: 27
• 2011: 26
• 2010: 22

Let’s take a look at the Purple Rose of Chicago’s class of new PPMDs by the numbers:

• 35: The number of new PPMDs in advisory, the most of any service line, followed by 23 in tax, 20 in audit, and three in internal client services.
• 27: The number of new PPMDs who are women, or 33% of the class.
• 11: The number of new PPMDs in Chicago, the most of any location, followed by 10 in Washington, DC, eight in both Philadelphia and New York City, and seven in Charlotte, NC.
• 1: The number of new partners with the last name of Pizza.

Here is the class of 2019 at Grant Thornton:

Congrats to all the new Grant Thornton PPMDs! May you be blessed with Chicago Cubs tickets and job security.

The post Promotion Watch ’19: Grant Thornton Admits 42 New Partners and Principals appeared first on Going Concern.

We are happy to announce the appointment of our first CEO, Sacha Romanovitch. From 1st Sep she will lead us to develop activities, partnerships and programmes that support the financial wellbeing of vulnerable people. Congratulations @romanovsun! https://t.co/vWiVPXlfOc

— Fair4All Finance (@Fair4AllFinance) August 8, 2019

Romanovitch, who was CEO of Grant Thornton U.K. from 2015 to 2018, stood out from the other candidates because “she has great empathy for the plight of individuals who are currently excluded from accessing fair and affordable financial services, which, together with her vision and energy, means that she is a great choice for the role,” Richard Collier-Keywood, founding executive chair of Fair4All Finance, said in a statement.

Romanovitch tweeted her excitement at once again being in the corner office:

Really excited to take on this role and very grateful for the opportunity to do so. 12m people having less than £50 savings – too many exist on the edge and that has to change. https://t.co/Dxlbsf18cr

— Sacha Romanovitch (@romanovsun) August 8, 2019

A 28-year veteran of the Queen’s Grant Thornton, Romanovitch took over as CEO of the firm in July 2015. She is credited with putting in place a “shared enterprise” model—a huge departure from the usual partner-owned and run structure of professional services firms—in which all of GT U.K.’s 4,500 employees would have a say and a stake in how the firm is operated. She also repositioned the firm to focus on “profits with purpose,” which meant dropping unsavory clients in an attempt to grow sustainably.

However, GT’s profits before tax fell 12% to £72 million in the 12 months after Romanovitch took over, although they rose 8% to £78 million in the following year, which ended in June 2017. And during her tenure, GT’s overall revenue fell by 6.4% from £534 million to £500 million, as the firm reshaped its client portfolio

In addition, the firm’s average profit per partner fell 8% from £403,000 to £373,000 in 2017-18, which put GT behind the Big 4 firms and BDO.

A mutiny among a small group of partners caused Romanovitch to announce last October that she wouldn’t seek a second four-year term as GT CEO. Another longtime GTer, Dave Dunckley, took over as CEO in January.

The post Ex-Grant Thornton U.K. CEO Sacha Romanovitch Has a New Gig appeared first on Going Concern.

As Brad Preber is the “interim” CEO, there are three people (women) currently being considered for the CEO position.

If true, good on GT for possibly promoting one of its female dynamos to the seat currently being kept warm by Preber.

According to our source, here are the three women who could be the next CEO of the Purple Rose of Chicago:

Jamie Fowler, National Managing Partner, Tax Services

Our source told us that their money is on Fowler to be offered the position because “she’s earned her stripes and has the ear of the board.”

A member of GT’s senior leadership team, Fowler joined the firm in 2003, according to her bio. She has been national managing partner of tax services since Aug. 1, 2017, and is responsible for the growth and operations of GT’s tax services offerings.

Fowler previously served as managing partner for the firm’s Atlantic Coast region, overseeing all service lines in that territory. She also has held a number of service line, geography, and industry leadership roles at GT, including Northeast region partner-in-charge of tax, managing partner of the firm’s National Tax Strategic Solutions group, and principal architect of the Grant Thornton Shared Services Center in Bangalore, India.

She is a Big 4 refugee, having served in leadership positions for KPMG in Atlanta, Dallas, and New York, where she was tax partner in charge of transportation for North America.

Nichole Jordan, National Managing Partner, Markets, Clients & Industry

A GTer since 2006, Jordan leads the firm’s strategic client portfolio of more than 1,000 major client relationships, as well as the firm’s geography, industry, go-to-market, sales, and customer experience teams, according to her bio.

As a member of GT’s senior leadership team and the firm’s growth committee, Jordan has been involved in the design and implementation of a firm-wide strategy to enable growth across all service lines, industries, and geographies. She also has helped lead the firm’s efforts to make Grant Thornton a “truly digital enterprise,” her bio states.

In addition, Jordan represents senior leadership in working closely with some of the firm’s largest clients, and she has helped develop the firm’s key alliance relationships in a variety of markets and sectors, as well as building GT’s network of advisory boards and other leadership forums around the country.

Jordan is an Arthur Andersen alumna.

Kelli Knoble, Tax Services Practice Leader, Carolinas

Based in Charlotte, NC, Knoble is a 17-year veteran of Grant Thornton. She currently serves as the tax services practice leader for the Carolinas and has worked for more than 20 years in state and local tax, her bio says.

According to a profile of Knoble in the Charlotte Business Journal, she was promoted to Carolinas tax leader in 2010 after co-leading the Carolinas state and local tax practice. Knoble led the team in achieving 8% to 10% annual revenue growth over a five-year period by attracting clients and streamlining work processes.

In her current role, Knoble focuses on income and franchise tax reviews and planning opportunities. She also addresses clients’ business expansions and contractions related to state and local tax registration and filings, unemployment tax issues, and merger analysis. In addition, she performs tax due diligence and state audit defense and negotiation.

Knoble began her career at Arthur Andersen as a tax staff accountant.

We’ve reached out to Fowler, Jordan, and Knoble for comment.

According to our source, the new CEO won’t likely be announced until early 2020.

They don’t want to make many more changes in 2019 for fear of it affecting revenue if clients got nervous and changed firms.

We’re also hearing that former Grant Thornton CEO and president of the Rickie Fowler Fan Club, Mike McGuire, is taking a position with Grant Thornton International, although we don’t yet know what that position will be.

On Aug. 1, McG took over the role of Grant Thornton CEO emeritus after it was announced in early June that he would be moved out of the corner office. As CEO emeritus, he will serve as a brand ambassador for the firm, focusing on business development and supporting key client relationships.

Any other GTers hearing rumblings about Fowler, Jordan, or Knoble? Have any write-in candidates to add to this list? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

The post Who Will Be the Next CEO of Grant Thornton? appeared first on Going Concern.

The times are not ordinary; the cauldron of auditor criticism has bubbled since the collapse of Carillion in January 2018. No firm has appeared as a willing successor to Grant Thornton—opening a gap with globally far-reaching implications for the entire Big Audit model.

For context, the parties’ relationship was fraught. The Financial Reporting Council had started an investigation of Grant’s work in 2018, the company’s July 26 release of preliminary results showed performance and stock price in a tailspin, and the reportedly long-running search for a successor had failed to identify a candidate.

Deflating the posturing confidence of CEO Mike Ashley’s letter in the company’s release, that “we do not believe a firm outside of the Big 4 will potentially be able to cope with such an audit in the future,” none of those firms has taken the bait.

Neither have any of the next tier—BDO, RSM, or Mazars—unfortunately identified by the Competition & Markets Authority as “challengers.” As for the prospect of a candidate from the still-smaller ranks, the latest Accountancy survey conveys the telling message of scale:

• No firm smaller than Mazars audits a single company in the FTSE 350.
• Of the smaller AIM-100 companies, third-tier firms audit only five, none of which approaches the size of the Sports Direct engagement.

So the day may have arrived when a large public company is unable to secure the services of a qualified auditor. At least three observations are in order:

First, the barren results of Sports Direct’s auditor search reveals the fictive nature of the CMA’s April proposal that all but the largest of the FTSE 350 should be obliged to have “joint auditors,” one of which must be a “challenger” and expected to take up a significant percentage of the actual work.

No criticism of quality, but a quick glance at capacity—if deterred by the scale of the Sports Direct job with its £966,000 fee, “challengers” would even more surely blink at the constraints of expertise, financial resources, and risk tolerance involved in taking joint responsibility for the audits of companies larger by several orders of magnitude.

Second, as the Financial Times reported, “under U.K. rules, the Department for Business has the power to make an appointment if a company cannot appoint an auditor.” The reference is presumably to Section 490 of the Companies Act 2006: “If a public company fails to appoint an auditor or auditors in accordance with Section 489, the Secretary of State may appoint one or more persons to fill the vacancy.”

That provision aims at a failure of corporate governance, however, not the unavailability of a candidate. At the company level, regulators could hardly force such a result upon a board and management—whose agreement should clearly be essential, the prospect of a hostile and antagonistic auditor presence being unthinkable.

Even less could the FRC presume to force an engagement onto an audit firm reluctant to accept. Professional standards require that the auditor be able and willing to rely on the truthfulness and credibility of evidence and representations from a client and its management—see, e.g., ISA 580 on written representations—making essential the existence and maintenance of mutual trust and confidence.

Third, the large accounting firms’ vigorously professed dedication to quality has long failed one empirical test. Namely—no matter how degraded the financial condition or reporting quality or how questionable the character or credibility of management, some pliable audit firm has always been available and willing to engage with any large-company leadership sufficiently sentient to sign an agreement and a retainer check.

So if Sports Direct is indeed left high and dry, it would mark a small but significantly positive step in the profession’s willingness to draw a line for the sake of improved client quality. Putting to rest the behind-doors belief that “Will work for food” is the standard opening message of any audit proposal, that progress should be applauded.

The context of the Sports Direct paralysis being the politically charged evolution of the FRC into the newly constituted Audit, Reporting and Governance Authority, it is not hard to envision some serious political arm-twisting of the Big 4, that one of them should relent and take up the poisoned chalice. For the firms, the necessity to resist that pressure would put at stake their very professional integrity.

Whatever political and regulatory energy may survive the Halloween deadline for a Brexit resolution, it is within optimistic expectations that the “purpose of audit” review now in process under the leadership of Sir Donald Brydon will bring clarity of analysis and reasonableness of vision to the challenges of evolving today’s Big Audit model to one fit for future purpose.

Figuring in that project, Sports Direct may well be left orphaned, to bear the consequences of its regulatory non-compliance. If so, that would be a tentative but real demonstration of the gravity of the issues requiring resolution in bringing about the necessary changes.

[Ed. note: This article was originally published on Re:Balance on Aug. 1. It has been re-published with permission.]

Jim Peterson is a 19-year veteran of Arthur Andersen’s internal legal group. He has been writing about the accounting firms and the Big Audit model since 2002, on his blog, Re:Balance, and in his two books, “Count Down: The Past, Present and Uncertain Future of the Big Four Accounting Firms” (2d ed. 2017) and, just released this May, “DOA: Can Big Audit Survive the UK Regulators?”

The post Why Grant Thornton Quitting As Auditor of Sports Direct Matters appeared first on Going Concern.

Rumors of Grant Thornton layoffs started swirling earlier this week, and no sooner did the rumor mill start churning panic than we had confirmation of at least one office closure, more to come, and indeed some layoffs too.

Thursday afternoon, Preber held a firmwide call addressing the now-confirmed rumors and assuring employees this is merely a fat-trimming measure. One tipster tells us:

Just wanted to pass along some additional information on the GT layoffs. I’m not sure where the tipster from yesterday’s article got their layoff figures from, but the interim CEO, Brad Preber, conducted a state of the firm call today and said it was 230 professionals and 40 PPMDs that were let go, which comes out to roughly 3.5% of the workforce. Sounds like it was mostly cutting fat in ICS (internal client service, non-client facing people) plus people from certain advisory service lines that were deemed no longer strategic fits for the firm. The way it was communicated is that although revenue continues to grow and we were profitable this year, expenses have been growing at an even greater rate and there was a need to reign it in. Other factors were that the firm took a hit on a lawsuit in Kentucky and the public sector business was hurt by the government shutdown earlier this year. Take his word for what you will, but it seems less dire than how it initially sounded.

The 270 number is a far cry from the 600 Reddit was throwing around, but in line with what we’re hearing.

Another tipster tells us:

Hit Atlanta today, friend’s whole forensic team was sacked. Partners and all. [Said they] overheard the partners saying it could be 200-300 in total.

Multiple sources tell us the majority of cuts are coming from admin/non-client facing roles, though Forensic and Enterprise Technology Strategy and Innovation are also affected. Additionally, we’re told GT is looking to save a few bucks in other areas, such as relying on more virtual meetings rather than in-person ones.

The lawsuit hurting GT’s bottom line is Yung v. Grant Thornton, LLP, a fraud and gross professional negligence case in which courts handed down a $100 million judgment against GT for a tax shelter strategy marketed and sold to casino owner William Yung. The Kentucky Supreme Court upheld $80 million in punitive damages last December.

As far as we are aware from multiple sources, more layoffs could be on the way. Add to that, we’re told the firm is considering closing smaller offices to consolidate operations around some of its larger metro locales. If you believe the firm, this is more a proactive cost-cutting and belt-tightening measure than a panic and we have no reason to believe otherwise. We’re told the firm is helping separated staff find new jobs and in some cases honoring benefits.

Did you get sacked? Need a shoulder to cry on? Just wanna bitch about how GT did you dirty? Feel free to give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous. I promise I won’t write your phone number on a restroom wall in my favorite bar.

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First, a tipster informed us of a shake-up in the Northeast Region, with the Westborough, MA office closing up and possibly more closures planned. Our tipster says they were informed GT “had a bad year” and that there would not be raises this year before being told the office was shutting down. No one answered the phone at the Westborough office when we attempted to call them, the call instead was routed to the Boston office.

Then comes this Reddit thread, in which commenters are saying up to 600 Grant Thornton staff were let go.

GT Layoffs from r/Accounting

Confirmed. The number is closer to 600. Spoke to many of my colleagues there and several of them have been let go. This includes a couple partners.

A source tells us that a tax partner in Boston and “several” partners in New York whose service lines are not known to them are being let go. As for the rest? Who knows.

All of this is on top of soon-to-be-former GT CEO Mike McGuire — an employee favorite, we might add — saying “no thanks” to an offer from GT’s partnership board to extend his chairmanship to his mandatory retirement date of July 31, 2021. Instead, effective tomorrow McGuire will serve as CEO emeritus and “brand ambassador” for the firm, leaving Andersen alum Bradley Preber to hold the bag as interim CEO until a real one is found.

When reached for comment, Grant Thornton Director of External Communication Jon Rucket said: “While Grant Thornton LLP does not discuss operational matters, it is committed to positioning itself for continued growth and strong revenues and is always reviewing its operational footprint.”

Since corporate communications is (expectedly) cockblocking me, anyone with more information is encouraged to give us a shout by email, Twitter, or text/call the tipline at 202-505-8885.

The post Layoff Watch ’19: It’s Going Down at Grant Thornton appeared first on Going Concern.

The Financial Reporting Council released its annual audit inspection reports for the Big 4 firms, as well as for Grant Thornton and BDO, on July 10, and while KPMG was taken to the woodshed last summer for its horrible audit quality, this year is Grant Thornton’s turn, as the FRC said the firm will be “placed under increased scrutiny due to sustained poor results.”

Overall, poor audit quality persists among all the firms that are supposed to provide good-quality audits. Of the firms that were inspected, they all failed to hit the FRC’s audit quality target of 90% of audits being good or requiring only limited improvements. No firm hit the 90% audit quality target last year either.

In addition, only 75% of the audits of FTSE 350 companies for the year ending December 2017 met the 90% audit quality goal, and the FRC found cases in all firms where auditors had failed to challenge management sufficiently on judgmental issues.

Needless to say, FRC CEO Stephen Haddrill wasn’t pleased with the results:

“At a time when the future of the audit sector is under the microscope, the latest audit quality results are not acceptable. Audit firms must identify the causes of their audit shortcomings and take rapid and appropriate action to improve quality. Our latest results suggest that they have failed to achieve this in recent years.”

So, how bad was Grant Thornton’s inspection findings?

[T]he FRC assessed that 50% of reviews were good or required limited improvements, compared to 75% last year. In total, 26% of Grant Thornton’s audits reviewed in the past five years have required significant improvement. The FRC has therefore increased its scrutiny of Grant Thornton, including: requiring a new audit quality improvement plan and increasing the number of audits to be inspected in 2019/20.

Here’s a graph showing how GT’s audit quality has, for the most part, been kinda shitty the past five years:

Anyone who has closely followed the audit scene in the U.K. for the past year or two shouldn’t really be surprised by GT’s dismal results. This is the firm that has been under investigation by the FRC for its auditing of Patisserie Valerie, the cafe chain that was mired in a huge accounting fraud in which accounting irregularities, which have now totaled £94 million, were first discovered in October 2018.

Grant Thornton is trying to do some damage control, announcing new hiring and audit quality improvement plans last month to try to improve its tarnished reputation.

Of the Big 4 firms, PwC was found to have the worst audit quality among FTSE 350 company audits, with only 11 of 17 being good or requiring limited improvements.

The deterioration from 84% to 65% in the results for PwC’s FTSE 350 audits inspected is unsatisfactory and the FRC has required the firm to take prompt and targeted action to address this decline. In June 2019, PwC announced an action plan to strengthen its focus on audit quality. The plan includes additional investment in people, training and technology, structural changes to PwC’s business, and a reinforced focus on culture and quality control. The FRC will scrutinise closely the implementation of this plan.

Here’s a graph showing how P. Dubs’ audit quality has gotten worse:

PwC said last month that it was splitting its current assurance practice into two distinct businesses, and that it would spend an additional £30 million ($38.1 million) a year to improve audit quality. As part of the changes, the firm plans to set up a new national digital audit team and hire more than 500 auditors.

And let’s give some props to KPMG. Last year, the FRC made a big to-do about how half of KPMG’s audits of FTSE 350 companies in 2017-18 required some or significant improvement. But that number improved to 20% in 2018-19, with zero audits needing significant improvement.

However, the FRC said today that KPMG “remains subject to increased FRC scrutiny” and that will continue “until KPMG has demonstrated a sustained improvement in audit quality.”

Here’s a graph showing how KPMG’s audit quality improved:

What about Deloitte and EY? Of Deloitte’s 16 FTSE 350 audits reviewed, 75% were good or required limited improvements, down from 79% the previous year. At EY, 89% of its FTSE 350 audits inspected met the required standard, up from 82% last year.

And at BDO, 88% of its audits inspected were considered acceptable, the same as the previous year.

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While Grant Thornton is currently being investigated over its horrible auditing of Pat Val, which collapsed earlier this year and its former finance director and five other people were arrested by authorities due to the fraud, the sixth-largest accounting firm in the U.K. is looking to fix its tarnished reputation as an auditor. And GT is hiring.

Accountancy Daily reported:

In a bid to restore confidence in its audit business, Grant Thornton plans to set up an audit quality board and increase audit staff numbers with a mix of external senior hires and an increase in trainee numbers.

As part of the plan, Grant Thornton will invest £7m in focusing on improving the quality of its audit operation, with plans to hire 300 audit staff over the next 12 months and invest in IT development to improve its audit functions and tools.

The additional staff will be made up of a combination of senior hires and trainees, and will represent a 6.8% increase in total numbers from the current 4,410 professional staff count.

Other ways GT is going to try and pull its reputation out of dumpster include:

• Establishing an audit quality board, much like Grant Thornton U.S. did earlier this year.
• Setting up two “centers of excellence” in London and Birmingham to “enhance the firm’s ability to deliver FTSE 350 audit work,” even though GT said in March 2018 it would stop bidding for new audit work at FTSE companies because of the Big 4’s stranglehold on the market, but that could change if audit reform legislation is enacted in the U.K.
• Approving an independent review of GT’s audit practice, although the firm didn’t specify who would be conducting the review.

Grant Thornton also recently appointed Fiona Baldwin as its head of audit. She is the first head of the firm’s audit practice to join GT’s strategic leadership team.

I know Grant Thornton U.K. is kind of a dumpster fire right now, but one of these open auditor jobs might still be worth pursuing or at least making a phone call.

PwC in the U.K. announced earlier this month that it would be spending an additional £30 million ($38.1 million) a year to improve its audit business, including setting up a new national digital audit team and hiring more than 500 auditors in addition to the 5,500 the firm already employs.

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Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL), one of the world’s leading audit, tax and advisory firms, announced today that Chief Executive Officer Mike McGuire will assume the role of CEO emeritus, effective August 1, 2019. In this role, McGuire will serve as a brand ambassador for the firm, focusing on business development and supporting key client relationships. McGuire also will help execute a seamless leadership transition for the firm

To us, this was unexpected because last November, GT’s partnership board voted unanimously to extend McG’s reign at the Purple Rose of Chicago until July 31, 2021, his mandatory retirement date.

GTers, if this news wasn’t unexpected to you, give us the lowdown about what’s going on by emailing us.

McGuire took over as CEO in January 2015, replacing the ultra-dynamic Stephen Chipman.

Prior to becoming CEO, McGuire served on Grant Thornton’s senior leadership team as national managing partner of operations and previously was managing partner of the firm’s Carolinas practice. He also is an Arthur Andersen alum.

In a press release, McG said:

“It has been the honor of my life to lead Grant Thornton over the past five years, and I am so proud of all we’ve accomplished as a team. Our firm is on a great path to continue to create value for our clients, build on our leading quality and culture, accelerate innovation and growth, and disrupt our profession.

“As fast as the marketplace is changing, I believe we now need to transition as quickly as possible to new leadership that can take us on the next leg of our journey to become the ‘firm of the future’ over the next five years or more. I will do everything in my power in the coming years to help the firm navigate this transition and continue to succeed.”

But in between helping the firm “continue to succeed,” McGuire will now have more time to spend at Wrigley Field and make dumb Status Go videos with Rickie Fowler.

#TBT to my directorial debut. Just like golf, a good mic drop is all in the wrist. Isn't that right @mikemcguireCLT? #StatusGo pic.twitter.com/aZNoqfRq3c

— Rickie Fowler (@RickieFowler) December 21, 2018

Bradley Preber, national managing partner for business risk services at Grant Thornton, will serve as interim CEO-elect until a permanent CEO is named, the firm said.

The Partnership Board will continue its previously announced long-term CEO succession process that is currently underway with a leading executive consulting firm.

The firm will be led by Bradley J. Preber who will serve as interim CEO-elect, effective immediately, working closely with McGuire and other members of the senior leadership team until formally accepting the position of interim CEO on August 1, 2019. Preber will temporarily step aside from these roles while he serves as interim CEO.

Preber, who also is an Andersen alum, currently serves as chairman of the Grant Thornton partnership board. He joined GT in 2003 and has held several executive roles, including national managing partner of forensic and valuation services.

He also currently serves as the Phoenix office managing partner.

Related article:

Grant Thornton CEO Mike McGuire Will Hang Around For a Few More Dynamic Years

The post We’re Sure Mike McGuire Will Be Dynamic In His New Role as Grant Thornton ‘Brand Ambassador’ appeared first on Going Concern.

While specialty equipment maker AZZ Inc.’s engagement with BDO USA wasn’t even one-tenth as long as GE’s with KPMG, it decided the time was right to look elsewhere.

CFO Journal reported:

AZZ’s audit committee dismissed BDO USA LLP and replaced the Chicago-based auditor with Grant Thornton LLP. AZZ said it informed BDO of the dismissal last week.

AZZ’s move comes after two years of accounting difficulties. The company delayed filing its fiscal 2019 and 2018 annual reports and had disclosed separate material weaknesses in its internal controls over financial reporting of revenue in both years.

On Thursday [May 30], in a filing with the Securities and Exchange Commission, AZZ said that BDO included “adverse opinions” on the effectiveness of the company’s oversight of financial reporting contained in the auditor’s assurance reports. The dismissal wasn’t over disagreements with BDO’s accounting and auditing principles and practices, AZZ said in the filing.

Then why did AZZ drop Bravo Delta Oscar? Fees? I don’t have any figures to back this up, but I can’t imagine hiring Grant Thornton was because AZZ was bargain hunting. AZZ CFO Paul Fehlman told CFO Journal the company was planning to hire a new auditor before AZZ filed its most recent annual report, adding, “It’s always considered best practice to do a rotation to refresh the auditor relationship.”

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While Grant Thornton hasn’t yet officially issued a press release welcoming Turner to the House of McGuire, an internal memo announcing her arrival must have been sent around, as Turner posted it to her LinkedIn profile.

And that’s good enough for us.

The announcement, titled “Candice Turner, Principal, joins the Northeast M&A Tax Services Practice,” was signed by David Platt, managing partner, Northeast Region; Ken Seel, Tax practice leader, Northeast Region; and Chris Schenkenberg, national managing partner, M&A Tax Services.

It says:

Team,

I am pleased to announce that Candice Turner, Principal, has joined Grant Thornton in our M&A Tax Services business line, and is based in the Manhattan office.

Candice has more than 20 years of public accounting and private industry experience. Prior to joining Grant Thornton, Candice was a Principal in the M&A practice of KPMG. Candice was previously a Partner at the law firm Davies Ward Phillips & Vineberg, a Trial Attorney with the Department of Justice Tax Division in Washington DC, and an attorney with Shearman & Sterling.

Candice has advised clients with respect to all US and international tax matters. She has represented funds, sovereigns, foreign pensions and consortiums on investments, acquisitions, refinancings, and exit strategies across various asset classes, including infrastructure, real estate, private equity and public capital markets.

Candice has also authored many articles and publications on international tax and is an active leader in international tax organizations.

Candice is an attorney with a JD and an LLM in taxation (NYU School of Law) and a B.S. in Mathematics and English (University of Alabama).

Please join us in welcoming Candice to the Northeast Tax Team, and to Grant Thornton.

Turner joined KPMG in November 2015, according to her LinkedIn page. And you can read more about Turner on her KPMG profile, which hasn’t been taken down yet.

There’s been quite a bit of competitive poaching between these two firms recently. Let’s see if it continues.

Related articles:

KPMG Poaches Someone From Grant Thornton and Issues a Press Release, Parts I and II
Grant Thornton Poaches Two People From KPMG and Issues a Press Release, Part I

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Grant Thornton LLP has added two key professionals to its Corporate Value Consulting practice within Transaction Services. Managing Director Brad Edwards and Principal Tim Frehner recently joined the firm, based in Seattle and San Francisco, respectively.

Edwards has nearly 20 years of professional experience spanning corporate finance consulting; financial analysis; and valuation of businesses, intangible assets and complex securities across a range of industries. Before joining Grant Thornton, he was a managing director in KPMG’s Houston office.

Frehner’s more than 20 years of experience includes corporate finance consulting; financial analysis; and business, complex securities and intangible asset valuation. His work touches multiple industries with a heavy focus on the technology sector. He also joins Grant Thornton from KPMG, where he was a managing director in the Silicon Valley office.

According to Edwards’ LinkedIn profile, he joined GT in February. And the funny thing is, he’s been poached by rival firms a few times now in his accounting career. He spent the first 10 years of his career at Deloitte, but in 2010, he left to join EY. Edwards stayed at EY for two years before he was poached by KPMG, where he worked for the past six years or so.

Frehner worked for KPMG for a little more than seven years before joining the House of McGuire in January, according to his LinkedIn profile. He started his career in the late ’90s with PwC.

I don’t know how often in the past these two firms have hired employees away from each other. I couldn’t find anything on the site that Caleb or Adrienne had posted in the past. So maybe this is the start of a new (or rekindling an old) rivalry?

[Grant Thornton]

Related article:

KPMG Poaches Someone From Grant Thornton and Issues a Press Release, Parts I and II

The post Grant Thornton Poaches Two People From KPMG and Issues a Press Release, Part I appeared first on Going Concern.

Cullen Walsh, 39, was identified by authorities on Tuesday as the person killed in the crash, according to the Westport News.

Shortly before 1 a.m. Sunday morning, first responders found a vehicle, which had hit a utility pole and two trees, fully engulfed in flames. The crash also knocked down electrical wires, the Westport News reported.

Authorities believe that speed and a failure to negotiate the roadway were factors in the accident.

According to his LinkedIn profile, Walsh was a partner in Grant Thornton’s Accounting Advisory Services practice for the past two years.

Before joining Grant Thornton in 2017, Walsh was an assistant director at the FASB, where he was responsible for managing the board’s research agenda, overseeing international monitoring of projects undertaken by other standards-setters, and managing the execution of implementation working groups. From 2011 to 2013, Walsh was a practice fellow at the FASB,

It was during his time at the FASB when Walsh met his future wife, Meredith, who also was a practice fellow.

Walsh spent the first 12 years of his professional career at KPMG, in both Boston and the national office in New York City, as a senior manager in the firm’s audit practice.

According to his obituary, Walsh was known for his compassion and soft smile, as well as his calm demeanor and personality, which put everyone at ease.

A humble and genuinely all-around nice guy and beautiful person, Cullen was a devoted husband, dog lover, an amazing cook and an old soul who loved learning how to dance to big band and swing music, collecting old books and hosting dinner parties with friends and family. He was often the smartest guy in the room and was known for public speaking and problem-solving.

Walsh is survived by his wife, parents, five siblings, and his nieces and nephews.

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Only a few short years ago GT had the honor of receiving the worst ever audit failure rate handed out by the PCAOB at 65%. It seems, however, while their Big 4 counterparts have marginally improved (KPMG aside, natch, not like they count as Big 4 anyway), the Purple Rose of Chicago has managed a feat we believed up until now to be impossible: a record low failure rate.

In its most recent inspection report dated March 21, 2019, the PCAOB inspected 34 audits in 2017 (meaning these were audits conducted in 2016) and found only six deficiencies. SIX. That gives GT a spectacular 18% deficiency rate which may not seem that impressive until you realize that it’s the first sub-20 deficiency rate from any major firm since 2009.

As with every other firm, GT struggled most with controls testing. The PCAOB identified three major issues that seemed most baffling to GT auditors:

• Failure to sufficiently test the design and/or operating effectiveness of controls that included a review element and that the firm selected for testing.
• Failure to sufficiently evaluate the issuer’s compliance with GAAP for one or more transactions or accounts.
• Failure to appropriately evaluate control deficiencies.

Now, there are two obvious ways we can interpret this news:

1. Grant Thornton should be commended for efforts to improve audit quality and seeing those efforts all the way through to the satisfaction of the PCAOB; or
2. Other firms should be absolutely humiliated that a crusty-mouthed, cheese-smelling firm like GT is making them look bad by boasting one of the best deficiency rates we’ve seen in a decade.

You decide how you want to take it.

“Quality is the firm’s highest priority and is the foundation of all that we do at Grant Thornton,” wrote CEO Mike McGuire and National Managing Partner of Audit Services Jeffrey Burgess in a statement. “We continue to seek new ways to further advance high audit quality, including our newly created Audit Quality Advisory Council. The Quality Council, which includes two outside members, will advise our Partnership Board and leadership on the firm’s audit quality, and provide independent perspective on our unwavering focus on quality.”

Go ahead and do a victory lap at the Chicago mothership, GT, you’ve earned it.

The post Grant Thornton Surprises Everyone By Not Sucking at Auditing appeared first on Going Concern.

Economia reported on March 18:

Grant Thornton UK is planning to make 50 to 60 staff redundant as the firm continues to implement its plan to restructure its operations.

The top 10 firm is currently in consultations with staff which will complete on 10 April. Downsizing is predominantly targeted at roles in brand, marketing and communications and in people and client experience functions.

A GT spokesperson told Economia and other U.K. media outlets:

“The next phase of this transformation is to ensure our teams provide the right level of support for profitable growth and create an environment that makes it easier for our people to do great work.

“Sadly, this will result in a reduction of a number of roles in these functions and the firm has begun a consultation period with those who are impacted.

“This is not a decision we take lightly and it has not been easy, but transformation is essential to ensure we build a long-term, sustainable future for the whole firm.”

Regardless of how the firm spins it, Grant Thornton U.K. is in a serious state of disarray. Hopefully there’s no more bloodletting.

Good luck to those who are impacted by the cuts.

The post Layoff Watch ’19: Grant Thornton U.K. to Part Ways with Up to 60 Staffers appeared first on Going Concern.

Via Reuters:

Wearable device maker Fitbit Inc has dismissed auditor PricewaterhouseCoopers LLP after a review of its fees and appointed Grant Thornton LLP, the company said in a regulatory filing on Thursday.

The filing states that Fitbit chose not to renew its engagement with PwC on March 8 and let P. Dubs know it was going in a different direction on March 9. The decision to change audit firms was approved by Fitbit’s audit committee. PwC was the company’s auditor for the past two fiscal years (Dec. 31, 2017, and Dec. 31, 2018).

The audit committee approved the appointment of Grant Thornton as Fitbit’s new external auditor on March 8.

As is typically the case in 8-Ks when there’s an auditor swap, Fitbit said there were no disagreements with PwC “on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.”

However, the company did disclose this little tidbit in its filing:

Also during this same period, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto, except for the material weakness in the Company’s internal control over financial reporting related to the accuracy of the inputs in the sales order entry process, previously reported in Item 9A of the Company’s Annual Report on Form 10-K for the fiscal years ended December 31, 2018 and December 31, 2017, which has not yet been fully remediated.

Losing Fitbit as an audit client is probably just a blip on the radar for PwC, but losing the engagement to Grant Thornton has to sting a little.

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