Accounting News Roundup: Lavish Perks; RSM Detroit; Bad Partners | 05.12.17

Posted on by Caleb Newquist
accounting-news-MDC-partners

SEC enforcement

Earlier this year, I mentioned a SEC enforcement against MDC Partners, a marketing company that, among other non-GAAPy things, failed to disclose perks that it paid on behalf of its former Chairman and CEO Miles Nadal. The SEC has now gotten around to settling with Nadal and, as a reminder, these perks were a tad lavish, even by CEO standards. They included:

private aircraft usage, cosmetic surgery, yacht-and-sports-car-related expenses, jewelry, cash for tips and gratuities, medical expenses for Nadal, family members and others, charitable donations in Nadal’s name, pet care, vacation and personal travel expenses, club memberships, and certain expenses for which supporting documentation or information was incomplete.

“Perks paid to corporate executives should be properly disclosed so that investors can make informed decisions,” the Director of the SEC’s Philadelphia Regional Office said. I’ve never had the pleasure of preparing a CEO’s expense report but it’s a little strange to think that somewhere along the line, someone decided that disclosing cosmetic surgery, pet care, et al. as compensation would’ve been too extravagant and caused shareholders to take their money elsewhere. Now the company just looks stupid and wasteful. Nicely done.

Elsewhere in SEC enforcement: A former Foley & Lardner lawyer allegedly accessed confidential information on 11 clients, traded on that information, and even tipped his neighbor about it.

Hiring Watch: RSM

Crain’s Detroit reports that RSM got $200k from “a performance-based grant from the Michigan Economic Development Corp.” The firm will use the money as part of a larger $2.2 million investment to open a Detroit office that will also bring 50 new jobs.

Accountants behaving badly

Stories of accountants trying to pull a fast one on other accountants are rare, which makes them all them all the more interesting. Here’s one between CPAs Dennis Murray and Patrick Carlin of…Carlin & Murray.

Dennis Murray filed a complaint on April 4 in the San Francisco County Superior Court against Patrick Carlin and Does 1-10 alleging breach of contract and other counts.

According to the complaint, the plaintiff and defendant are 50 percent shareholders of Carlin & Murray. The suit states that in February, Carlin announced that they were no longer business partners and deprived the plaintiff of access to the QuickBook system. The plaintiff alleges Carlin has altered company records to conceal misuse of company funds.

If you are a partner in an accounting firm, and you’re confident that you can misuse company funds without your partner(s) knowing, should you really be in business with them? I suppose if you entered the partnership with nefarious intentions, then the answer is, “Yes,” and your partner has a problem. Otherwise, if you’re just sitting around one day and suddenly realize, “Whoa. I could take all the money, blow out of town and Bob would never know,” then you have a problem.

Brought to you by Accountingfly

The featured job of the week is a Senior Accountant with Volant Trading. Gleim CPA Review shared a post about how the CPA exam is graded.

Previously, on Going Concern…

Megan Lewczyk wrote about commuting. In Open Items, someone is asking about taking over his dad’s CPA firm.

In other news:

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This may be a better topic for the friendly HR professional but figuring out who these future accounting rock stars are before they show up on their first day is “more art than science”, as Tom Hood notes.
Popular to some old-school thought, GPA does not always indicate who’s going to dominate in the real world and “soft skills” — besides being a terrible term — are in more demand than ever.
• Help The The American Red Cross of Greater Chicago Help Haiti [Re: The Auditors]
The American Red Cross of Greater Chicago is having a drive today and since Francine’s friend is the CFO, we’ll be glad pass around the news:

One of my oldest and dearest friends, Guillermo Becerra, is the CFO of the American Red Cross of Greater Chicago. I asked him how I could help him, and the Red Cross, during what must be an incredibly busy time post-Haiti earthquake.


“The Chicagoland community will come together on Thursday, January 21 to give to the American Red Cross as we help the people of Haiti recover from the catastrophic earthquake that devastated their country last week.
The Chicago Helps Haiti media relief drive begins at 5 a.m. and lasts until 11 p.m. Nearly every TV and radio station in our area will be promoting this fundraising effort throughout the day. You can help too, by giving via phone or online, and sharing your thoughts here, on Facebook or Twitter, and by asking others to give.
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Imperva found that nearly 1 percent of the 32 million people it studied had used “123456” as a password. The second-most-popular password was “12345.” Others in the top 20 included “qwerty,” “abc123” and “princess.”

You know who you are, ye with stupid passwords. Also, don’t even think of changing it to “654321” because that drops in at #19.

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‘Buffett Rule’ for Millionaire Tax Seen as Easier Said Than Done [Bloomberg]
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