With all the election noise of the last week or two we almost missed this: RSM sent orders down from on high to get tax people back in the office. We don’t know if other service lines have received similar orders but were told that all functions are trying to get more people in the office.

In an email reviewed by GC, leadership requested — rather, strongly advised — a minimum of three days a week in the office or at a client site. “Being face-to-face with our teams and clients is essential,” said the email sent out by federal specialty tax leader Dave Kautter. “We ask that you ensure you’re spending at least three days in the office with your people and/or visiting clients and prospects in person. I leave it to each of you to determine what days work best for you and your teams to be together.”

In addition, senior managers were reminded of their duty to train up their future replacements. IN PERSON. “With new colleagues, fall and winter interns, and your existing teams, we’ve talked about the importance of being together,” the letter said. “But we must make the most of working side-by-side with our people.” Right. Just being in proximity of

RSMers must be slipping on their tedious paperwork game because the email also reminded recipients that their work “is a balancing act with equal parts client service and operational tasks.”

“I’d like you to work with your teams and TFLs to identify your target client and prospect visits for the coming months and the operational responsibilities (e.g. billing, scheduled billing, off-strategy clients, SOWs/CLEAR, etc.) you must complete,” said Kautter. “We are a team and we must work together to succeed. Ensure all of your people are contributing to the tasks at hand.”

We suspect this bit at the bottom is a big reason why the firm is pushing these people to get into the office elbow-to-elbow with the impressionable associates and senior associates:

Meeting these expectations, I know we will be well-positioned to capitalize on this moment and demonstrate our roles as first-choice advisors. The U.S. election is behind us and we can expect a flurry of middle market activity with clients looking to us for guidance on tax policy. Let’s show up for them together.

As you may recall, RSM laid off 3 percent of its workforce in September. As far as we know these cuts were limited to audit and consulting. On October 11, RSM US announced it would be merging with RSM UK to “establish a partner-owned multinational organization dedicated to delivering quality, globally integrated services for the middle market.”

Get that bag, RSM.

If anyone has info on other service lines being called back to the mothership get in touch.

The post RSM Tells Tax People to Get Back in the Office Three Days a Week appeared first on Going Concern.

RSM US and RSM UK announced the two entities “intend to establish a partner-owned multinational organization dedicated to delivering quality, globally integrated services for the middle market.” In other words, they’re merging. And of that they said:

This merger would significantly expand the multinational platform created by the U.S. and Canada with the launch of RSM Canada in 2017 to meet the growing needs of global middle market businesses and continue RSM UK’s expansion following its 2023 merger with RSM Ireland.

The integration of the two largest firms in the RSM International Network would advance RSM’s global 2030 strategy by creating a leading platform for assurance, tax and consulting services worldwide.

Following the infographic is this in big letters:

Client service from 4 countries supported by integrated teams in India and El Salvador

Ohhhh, we get it.

In July, RSM US announced plans to more than double the amount of staff in India from 2,000 to 5,000. Last we checked, RSM US had around 17,000 employees including the offshore ones. “The proposed merger will enable seamless service delivery across the U.S., the UK, Canada and Ireland,” they said.

And now for the quotes. “Our clients have long desired to be served by a financially integrated transatlantic organization. This merger will create a platform to more effectively serve client needs with quality services and more seamless access to our resources,” said Brian Becker, Managing Partner and CEO of RSM US. “We are doubling down on our future as a dynamic, partner-owned platform, at a time when the industry is undergoing transformation. We are well capitalized to continue investing in our growth and the advancement of our 2030 global strategy. We have a deep and long-standing relationship with our UK colleagues, and we look forward to joining forces to drive value for our clients, owners, employees and the entire RSM International network.”

Becker told Financial Times earlier this year that RSM had no plans to court private equity investment, hence the “partner-owned” comment above.

“RSM UK has seen strong growth in revenue and profits as we’ve repositioned the firm over the last four years,” said RSM UK CEO Rob Donaldson in his sanitized and PR-polished comment. “Bringing our UK and Irish firms together with our U.S. and Canadian colleagues is the next logical step on our journey. We already have strong bonds with our transatlantic colleagues and work together with a common aim, to be leading advisors to the middle market.”

“We’ve decided to come together to form a unique partnership that goes further to service the needs of our clients as they expand globally, and to create terrific opportunities for our own talent,” he added. “Now is the time to accelerate our ambitions by drawing on each other’s considerable strengths to become the middle market advisor of choice, globally.”

A tipster says to us Rob Donaldson told partners at a conference earlier this year that the firm had no plans to do a transaction so this news comes as a bit of a shock. We’ll dig more into that, sounds like there’s some good drama at the center of that particular Tootsie Pop.

RSM US and RSM UK pursue transatlantic merger to strengthen client offering [RSM]

The post RSM to Merge With RSM appeared first on Going Concern.

There are a large amount of layoffs going on at RSM, specifically in the D365 practices, Risk Cyber Security, and MC (management consulting practices). Meetings were scheduled yesterday via Webex, not MS Teams, which is interesting as the firm uses MS Teams for all communications. Meetings are all day today across these groups.

And followed up later in the day with specifics:

Updates after the meetings today, so far, over 200 staff let go in Audit, 260 let go across consulting, mainly D365 & Dynamics teams, Risk Consulting and Management Consulting.

Webex? Really? What year is this?

Just going to drop this completely unrelated post from July here: Within Three Years, RSM US Will Have Twice as Many People Working for Them in India

Anyone with more info or in need of a virtual shoulder to cry on is welcome to email or text.

The post Layoff Watch ’24: It’s Not TGIF at RSM Today appeared first on Going Concern.

Anyway, RSM US and RSM Canada, along with their one office in El Salvador (wat) and four locations in India brought in a clean $4 billion in fiscal 2024. See it’s right here in this chart:

Revenue by service line is as follows:

• Assurance: 28%
• Tax: 32%
• Consulting: 39%
• Other: 1%

This is nearly identical to last year’s numbers except tax had 32% and consulting had 38%.

Our headline for last year’s revenue announcement was “RSM US Is That Much Closer to $4 Billion in Revenue” and by gosh, they got there. We knew you could do it, RSM. Let’s compare this year to last:

God, we’re going to have to do math aren’t we? In 2024, they added 609 employees and 35 partners and principals, got rid of two locations in the US, and made $300 million more in revenue. Approximately 2,000 of their slightly more than 16,000 employees are in India with plans to double that number within three years.

We haven’t yet discussed RSM’s Global 2030 strategy so let’s throw this in here:

There’s also a section called A compelling talent experience that reads exactly as you’d expect it to read (as in, instead of the light tapping noise of hitting the keys as this was typed out it made only fapping sounds):

This year, we brought together people, process and technology to help deliver a digital enabled talent experience. We implemented new, user-friendly systems and processes to enable our people to find the information they need more effectively with new self-service options.

One example is Talent Compass, our new global human resources (HR) service desk. Talent Compass provides our people with a centralized place to get their personal HR-related questions answered. Through Talent Compass, our people can access on-demand resources and quickly connect live with a member of our talent team, enabling a consistent, streamlined experience.

Additionally, we transitioned to Workday as our integrated human capital management and finance system, replacing various existing systems with one modern application to simplify business processes and enable our teams to be as efficient and effective as possible across the globe.

How’s Workday going anyway? Last we heard it was not good.

Looks like RSM won’t have any problems maintaining its position in the top ten hierarchy.

The post RSM US Had a Good Year appeared first on Going Concern.

UK-based accounting firm RSM’s U.S. arm is planning to more than double its India workforce to 5,000 over the next three years, a top executive said.

“The expansion is driven by the tremendous talent base in India. Compared to the last 10-15 years, the talent now is very superior in the market,” Prasad Balakrishnan, India Principal of RSM US LLP, told Reuters.

The world’s No. 6 accounting firm’s U.S. arm employs 2,000 of its 17,000 employees in India, and is creating more consulting, audit and tax roles in the country to cater to its North American clients as a part of its global capability centre (GCC) expansion plan. [Ed. note: RSM Global clocks in at 57,000 staff in 860 offices and 120 countries around the world]

India’s evolution from a low-cost back office location to a high-value innovation hub has encouraged many multinational companies to set up local offices and boost hiring, a trend that is expected to gain more traction in the coming years.

Reuters describes the GCCs as supporting “their global parents in daily operations, finance, research and development, and product development functions.” About a year ago, they wrote about Big 4 expansions in India and said Deloitte planned to add 50,000 more people to its India headcount of 100,000 over three years, KPMG wanted to hire 20,000 over the same period, and PwC hired 12,500 people in India in fiscal 2022 with plans to hire the same number of people the following year. Last summer, Deloitte South Asia CEO Romal Shetty said 30 percent of the firm’s total workforce would be based in India by 2027. If it isn’t clear to you yet, firms are going all-in on India (not an EY pun).

There are unfortunately no salaries listed on RSM’s India job openings page but we did find this:

10 lakh = about $13,333 USD. 50 lakh = about $67,500 USD.

And here’s Glassdoor. Note these salaries are listed in rupees, not lakh (150,000 rupees = 1.5 lakh). ₹398K (rupees) = $4,766 USD. Dear reader is welcome — nay, encouraged — to double-check our math because no one around here is a mathlete.

Related:

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RSM, the leading provider of assurance, tax and consulting services to middle-market businesses, has today announced worldwide revenues of US$9.4* billion for the 12 months to December 2023, a year-on-year growth of 16%.

It seems they forgot to define the asterisk as there is no corresponding footnote explaining why it’s there. Whoopsie.

Their press release bullet points as follows:

• Double-digit growth in five RSM regions for third successive year
• RSM headcount worldwide increases by 13% to 64,000
• RSM’s global brand re-energised to better support RSM’s strategic direction
• Global tech and digital investment increased four-fold.

Last year, the headcount was up 10% to 57,000 professionals and they were thrilled to report global revenues were up over 41% in three years.

Fee income in USD and increase from last year by service line:

• Audit: $3.6 billion (+13%)
• Tax: $2.6 billion (+17%)
• Consulting: $3.1 billion (+17%)

RSM had single-digit growth in tax and audit in 2022 (8% and 6% respectively) so that’s a healthy jump. 2022 global fees from consulting grew by 37% so the growth has slowed but still strong.

All regions showed impressive growth. Europe grew by 36% compared to 2022 as a result of sustained development across 33 Member Firms and the addition of RSM Ebner Stolz in Germany. North America, RSM’s largest region by revenue, saw an impressive 13% rise in fee income for the latest financial year, powered by significant growth in both tax and consulting services, particularly in relation to IT and ESG consulting. A strategic merger in South Africa in July 2023 coupled with overall progress across the region contributed to a 29% leap in revenue from Africa over the period. Exceptional growth was also recorded for both the MENA region, with a 30% increase on 2022, and Latin America, with an increase of 18%. Representing more than US$1bn in fee income, the Asia Pacific region grew by a strong 8%.

RSM US reported $3.7 billion in 2023 revenue back in August.

The rest of the press release is the usual self-fellating trash. Choice quotes include:

RSM has established the critical building blocks for ongoing growth, transformation and change, focusing on four Strategic Drivers – People, Clients, Technology and Solutions

RSM is dedicated to developing an unrivalled, inclusive culture and talent experience, believing investment in both people and technology to be critical to sustained growth and delivering rich, personalised client experiences.

Jean Stephens, CEO of RSM International, said: “With an emphasis on the generation and sharing of insight, streamlining the efficiencies and effectiveness of service provision and building connectivity through an enhanced global digital infrastructure, RSM is focused on providing innovative and valuable human insights powered by technology.”

Yeah whatever. Congrats to them on a fabulous year.

The post RSM Reports Double-Digit Growth and Record Global Revenue of $9.4 Billion appeared first on Going Concern.

The $3.7bn-in-revenue firm had no need to bring in private capital to fund expansion or to allow partners to cash out early, he said, and he expressed scepticism about the business models being pursued by US rivals.

“We deal with private equity a lot and their goal is to get a return on their investment,” he said. “You have to realise that, when you take that type of capital.”

It was only a little more than two years ago that EisnerAmper became the first top 20 accounting firm to bring private equity into the mix. Since then, “private-equity investors have been buying their way into the world of accounting, planning, and advisory services” or so Journal of Accountancy wrote in February 2023. “The profession has been moving toward consolidation for a lot of years now. The pressure and intensity on mergers have been growing for the last four or five years. This is a continuation of the trend,” said Charly Weinstein, CEO of Eisner Advisory Group LLC, for that JofA piece.

We expect the next five years to be awash with private equity cash (and perhaps some scandals to follow as firm ownership slips out of the hands of CPAs) as more boomers retire en masse and talent-strapped firms combine forces to better compete. Someone mentioned the private equity trend in our open survey on issues affecting the profession in 2024, writing that the future of the profession “actually existing vs it all being PE owned and for tax and consulting” is a conversation that needs to be had.

Anyway, RSM. Becker referenced RSM’s past as a reason he wants to keep RSM in the hands of its owners.

Becker cited RSM’s own history as a reason for not wanting to follow suit. For 12 years until 2011, the firm — then known as RSM McGladrey — was part of the publicly listed tax preparer H&R Block.

“It made us into a national firm, which was great. Not so great is that [owners] look for an exit. We don’t want to be put in the position where we are trying to drive [earnings] after a certain period of time.”

The firm’s history is actually interesting. And a bit messy. In 2011, H&R Block sold RSM McGladrey to McGladrey & Pullen. Oddly, then-managing partner at McGladrey & Pullen Dave Scudder said in 2009 the “operational and financial model” with H&R Block that had been in place since 1999 “wasn’t working and “does not serve us well as we address our future goals of client service, opportunity for our partners, and continued growth.” See? Messy. That happens when you start chopping firms into pieces and passing them around.

Thing is, H&R Block later said it was RSM McGladrey that was a drag. You’re not breaking up with me, I’m breaking up with you!

Wrote Going Concern founding editor Caleb Newquist of the RSM McGladrey trade in August 2011:

This morning we learned that H&R Block would be selling RSM McGladrey to McGladrey & Pullen for $610 million. This reunion of the two firms is interesting because just a couple of years ago they couldn’t stand the sight of one another. These days, you might conclude that since they opted to rebrand under the name “McGladrey” that everyone has kissed and made up but we all know better. In all likelihood, there are partners on both sides who would rather set their CPA certificates on fire than work with the other side. The problem for the partners in these firms is that they probably had little choice in the matter, as H&RB seemed intent on cutting off the weak link:

[T]he top U.S. tax preparer looks to jettison the underperforming division and focus on its core business. H&R Block will finance about $65 million of the deal value as it looks to push through the sale of RSM McGladrey. […] In June, H&R Block’s new Chief Executive William Cobb told analysts that RSM’s falling profit and revenue were a drag on the company’s earnings, and that the unit and its troubles were on his “radar screen.” “(The sale) should improve overall corporate margin, as Tax Services margin in FY11 was 27.1 percent and RSM McGladrey’s was 9.3 percent,” Oppenheimer analyst Scott Schneeberger said in a note to clients.

“H&R Block Was Pretty Eager to Dump RSM McGladrey,” Going Concern August 23, 2011

We’re going to need a heist board to keep all this straight. Or Wikipedia.

No wonder Brian Becker wants to avoid messy dealings with outsiders.

He also said RSM won’t be copying BDO’s ESOP either. “Any strategy that is dependent on saving taxes can be very short lived,” he told FT. “We don’t need capital and we don’t need a method to distribute income any differently.”

We get it, Brian, RSM has money. Even with nearly $4 billion in revenue the firm is quite a bit behind smallest Big 4 firm KPMG but secure in its place as the fifth largest firm for now. We hear FORVIS is gunning for them hard, they might want to keep their options open.

RSM rules out radical changes to accounting partnership model [Financial Times]

The post Sorry, Private Equity, RSM Doesn’t Want Your Money appeared first on Going Concern.

The tip:

Effective 8/1/23, RSM’s scheduling, time management, billing and CRM system all merged to one system called Workday. Before the implementation all those modules were handled by a different software. We were happy with the old system. However, this Workday implementation is not going well at all. Now it takes more than double to enter our time, Billing people can’t send out invoice as they used to (used to take them 10 minutes to invoice now 3 hrs), no one knows how and where we can retrieve WIP reports.

Here’s how it was supposed to go according to a 2021 press release from Workday:

With Workday, RSM will:

• Leverage one system for its global finance, people, and project data to efficiently monitor business performance, engage with its growing workforce, and change at the speed demanded by clients
• Create an end-to-end project billing process in the cloud, improving efficiency and gaining greater visibility into financial performance
• Eliminate silos to streamline time tracking for greater operational visibility and performance across the company’s 13,000 employees

“We have ambitious growth and revenue goals and recognized we needed to accelerate our digital transformation initiative to support those goals. With Workday, we can break down data silos, streamline processes, and eliminate inefficiencies in order to better manage our performance as we scale. As important, we expect to elevate our customer service as we continue to focus on being the RSM First Choice Advisor among middle market companies and showing our customers the power of being understood,” said Brian Vickers, controller, RSM US LLP.

How it’s actually going according to our tipster:

We can’t even generate a report to compare budget hours and actual hours. From managers to partners, no one knows the answer as to when and how. Some people call “Workday” “Worst-day.”

Good one. They added:

Many processes now work together (in theory) such as time entry, billing & invoice system, our payroll system etc. As of today, not all functionality of Workday is available to us. RSM has not informed us when the functionality would be available.

Thoughts and prayers to everyone at RSM during this difficult time.

The post We’re Told the Switch to Workday Isn’t Going So Great at RSM appeared first on Going Concern.

Let’s ignore that and focus on something good for RSM: fiscal 2023 revenue. The firm ended the year at $3.7 billion according to its recently released impact report, a whole 400 million dollar  — or a numerically satisfying 12.1212% — increase from RSM’s 2022 revenue of $3.3 billion.

Revenue by service line:

• Assurance 28%
• Tax 33%
• Consulting 38%
• Other 1%

Some more numbers for you:

Said Managing Partner and CEO Brian Becker in his very first impact report letter since taking over the helm after Joe Adams left last year:

Here at RSM, we provide both leading insights and compelling solutions to help our clients and our teams rise to meet these challenges. A few examples from this year include our work around economic headwinds and our support of clients during the banking crisis. We have also continued to advance our managed services offerings to help clients who are challenged with the labor shortage, are looking to operate more efficiently or are refocusing on the core of their business. And we continue to advance service offerings in new areas, such as environmental, social and governance (ESG), where our clients are looking for our support.

Simultaneously, we have been positioning our firm to meet the future. In January 2023, we launched a new global strategy for 2030, uniting all 57,000 people at RSM around the world. Domestically, we realigned our business to enable even more compelling experiences for our talent and our clients. Our lines of business are configured around common service lines, capabilities and solution sets to enable our people to build expertise aligned with their passion, assemble strong teams of experts to serve clients, and deploy digital tools and resources more quickly. Our industry teams are focused on going to market with the most compelling insights and services, and our markets are structured to harness the full power of RSM to meet the needs of our clients. We have also scaled our offices in India and El Salvador to bring on outstanding new talent to work with our domestic teams in the delivery of services to our clients.

We are deploying digital solutions more rapidly than ever as we evolve to become a digital firm providing assurance, tax and consulting services. This creates value for our clients through seamless digital engagement that complements the services our people deliver, and it creates value for our people by making their jobs more efficient—enabling them to focus on more strategic work and providing opportunities to learn new skills. Being digital is a journey, and we are well on our way.

Finally, we remain steadfast in sustaining our unrivaled, inclusive culture that compels talent to join us and grow their careers with us. We were named to the Fortune Best Companies to Work For list for the third year in a row, and once again recognized as one of People’s Companies that Care. Additionally, we doubled down on our ESG commitment by joining the United Nations Global Compact, continuing to enhance our environmental sustainability activities, signing the UN Women’s Empowerment Principles, and advancing our culture, diversity and inclusion strategy.

While you’re here, r/accounting’s RSM compensation thread is worth a look. It’s been our observation that RSM is an employee favorite, backed up by Glassdoor reviews and the firm’s listing on Great Place to Work. The money may not be the best but we hear the people are alright. Feel free to say otherwise in the comments.

RSM US Fiscal Year 2023 Impact Report [RSM]

The post RSM US Is That Much Closer to $4 Billion in Revenue appeared first on Going Concern.

Text:

Hearing rumors from multiple sources that RSM is conducting layoffs today and for the rest of the month.

Areas impacted today: Transaction Advisory Services.

If you are a client of RSM, ask for a new firm. Partners sending all the work to india and keeping the profits.

Here’s what we were told via the tip box:

Heard from an insider source that RSM’s technical accounting consulting laid off about 20 today, focused heavily on Directors and Senior Director group. Some of the names I was pretty shocked (highly technical folks) so this is not a performance based issue related but instead seems like higher paid individuals as the group struggles with revenue.

It appears only consulting is affected. Someone on Reddit asked if audit should be worried, a senior assured them that “audit people are quitting faster than they can lay them off.” Whew.

The post Layoff Watch ’23: RSM Is Getting Rid of Some ‘Highly Technical’ Consulting Folks appeared first on Going Concern.

Our 2021 inspection report on RSM US 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.

[…]

Four of the 17 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 substantive testing of revenue and related accounts and the allowance for credit losses/allowance for loan losses.

That comes out to a deficiency rate of 23.5%—a much better showing for a firm that not too long ago had an error rate of 73%.Of the four botched audits in 2021, all of them had problems in both ICFR and in the financial statement, with the most common deficiencies related to testing the design or operating effectiveness of controls selected for testing, testing controls over the accuracy and completeness of data or reports used in the operation of controls, testing the accuracy and completeness of information used to make selections for testing controls, and in some cases the resulting overreliance on controls when performing substantive testing, according to the PCAOB.

The three areas of the audit that were the biggest pains in the ass for RSM auditors were:

• Revenue and related accounts: The deficiencies in 2021 related to testing controls over revenue and related accounts and the resulting overreliance on controls when performing substantive testing.
• Allowance for credit losses/allowance for loan losses: The deficiencies in 2021 and 2020 primarily related to substantive testing of, and testing controls over, the valuation of the allowance for credit losses/allowance for loan losses.
• Inventory: The deficiencies in 2021 related to testing controls over inventory and the resulting overreliance on controls when performing substantive testing.

Of the four audits that weren’t up to snuff, two were for issuers in the financials sector, and the other two were for issuers in the industrials sector. RSM auditors got gold stars for their audits of issuers in the communication services, consumer discretionary, consumer staples, energy, IT, and materials sectors.

You can read the report in its full glory below. Let us know if anything else stands out to you.

The post RSM US Finally Might Be Taking Audit Quality a Little More Seriously, According to 2021 PCAOB Inspection Report appeared first on Going Concern.

• Global revenues increase by over 41% in three years
• Double-digit growth across all RSM regions for a second consecutive year
• 10% rise in headcount to 57,000 RSM professionals
• Network targets 100% growth in revenue by 2030

This $8 billion puts them just $26.6 billion behind smallest Big 4 firm KPMG, and a mere $4.8 billion off from nearest rival BDO.

Anyway, Stephens told FT that RSM is open to merger talks, if it’s a good fit.

“If there’s some deal or some big conversation to be had, absolutely we’ll look at that to see what does that mean, what does that look like for us,” she said in an interview with FT. “I think where there are willing parties then that’s what you start with [and then it’s a matter of] what [are] the goals and objectives and what’s the business deliverable that’s going to come from [it]?”

A big mid-tier merger would obviously put RSM and the future Mrs. RSM much closer to competing with Big 4, though she says that’s not the goal. “It’s such a big jump to . . . even the smallest of the Big Four that that’s not our ambition,” she said.

FT called her comments “the clearest public indication from a mid-tier accounting group that it would consider a large tie-up or other significant transaction” so keep an eye out, RSM may be working on something big. There are likely many conversations being had among the mid-tiers with the EY split in the works, whether any of these talks materialize into something tangible remains to be seen. Should something come of it, hopefully the marketers can come up with something better than FORVIS.

The post RSM Does Not Aspire to Be KPMG appeared first on Going Concern.

The class of 2023 has the most members by far in recent years, topping the 88 new partners and principals in the class of 2022, followed by classes of 84, 80, and 68.

The person who will be ordering these 79 men and 30 women around said this about the class of 2023: “I am pleased to congratulate our new partners and principals on this exciting next step in their careers,” said Brian Becker, managing partner and CEO of RSM US. “They have already distinguished themselves as first-choice advisors to our clients and teams, and I am confident they will help lead us into the future as we become a digital firm providing assurance, tax and consulting services. I am so proud of all they have already achieved and look forward to supporting their future growth and development.”

Here’s a closer look at the RSM class of 2023 by the numbers:

• 44: The number of new partners and principals in consulting, the most of any service line, followed by 33 in audit and 32 in tax.
• 30: The number of new partners and principals who are women, or 27.5% of the class.
• 27: The number of new partners and principals who work in the Northeast region, the most of any region, followed by 24 in the Great Lakes region, 20 in the Central region, and 19 in the Southeast region.

Here are the 79 men and 30 women whose dreams came true last week:

Know any of these people? If so, tell them congrats.

The post Promotion Watch ’23: 109 Folks at RSM US Will Be Getting New Business Cards appeared first on Going Concern.

From the SEC press release:

According to the SEC’s order, RSM’s planning and supervision of the audit, as well as the evaluation of audit results and review of Revolution’s disclosures, all failed to adhere to the Public Company Accounting Oversight Board’s auditing and quality control standards.

The SEC also charged RSM partners Steven Kirn and Richard Condon and senior audit manager Michael Piqueira for their roles in the improper audits. The SEC’s order against the three employees finds that Kirn, RSM’s lead partner on its Revolution audits, and Piqueira, the senior manager on those audits, failed to adequately plan, supervise, and execute the audits. Condon was charged with improperly reviewing and approving RSM’s analysis that inaccurately concluded Revolution’s errors and inflated revenue were immaterial to investors.

SEC Director of the Division of Enforcement Gurbir Grewal gave his usual quote about auditors having a job to do and how important they are, blah blah. “Auditors are important checks against fraud, and they should be scrutinizing arrangements like bill and hold sales,” he said. “RSM failed to do this at all levels, from the engagement team up through the firm’s national office. And by giving Revolution a pass, investors learned only too late that Revolution was committing a multi-year fraud.”

According to RSM’s latest PCAOB inspection report the firm is struggling. Just in general. With auditing. As in:

With respect to Cash:

To test cash at one of the issuer’s business units, the firm performed confirmation procedures for a sample of cash accounts. The firm did not maintain control over the confirmation requests because the issuer sent the requests. (AS 2310.28) In addition, for the majority of the items in its sample, the responses were returned by email. The firm did not perform substantive procedures that provided sufficient appropriate audit evidence to verify the source of these responses. (AS 2301.08)

Without admitting or denying the SEC’s findings, RSM agreed to pay a $3.75 million penalty, to be censured, and to retain an independent consultant to review and evaluate its audit, review, and quality control policies and procedures. Without admitting or denying the SEC’s findings, Kirn and Piqueira agreed to be suspended from appearing and practicing before the SEC as accountants, with the right to apply for reinstatement after three years and one year, respectively. In addition, without admitting or denying the SEC’s findings, Condon agreed to a censure. RSM, Kirn, and Piqueira also agreed to a cease-and-desist order.

SEC Charges Audit Firm RSM and Three Senior-Level Employees with Failure to Properly Conduct Client Audits [SEC]

The post A Bunch of Auditors at RSM F*cked Up appeared first on Going Concern.

In its 2022 annual report, which was released earlier this week, RSM US noted that its revenue for the year ending April 30 was $3.3 billion ($3,310,265,000 according to INSIDE Public Accounting), a 15% increase over its 2021 revenue of nearly $2.9 billion.

It’s also the last revenue announcement with Joe Adams sitting in the big chair. Joe A. is retiring at the end of this month after a 42-year career with the firm, the last 11 as managing partner and CEO. In a letter in the report, Adams wrote:

RSM has been on an incredible journey—particularly over the last 11 years as we have greatly increased the number of clients we serve; significantly expanded our talent; built outstanding business relationships; launched a philanthropic foundation; implemented a culture, diversity and inclusion program; and grown our business to $3 billion as we executed our strategy. We have carved out a unique position as the first-choice advisor to middle market leaders globally. I am honored and humbled to have been a part of it.

Adams will be succeeded by Brian Becker, RSM’s national consulting leader since April 2017. Adams said this about Becker:

I also am extremely confident in our next managing partner and CEO, Brian Becker. Transformation amid this rapid pace of change will be one of the biggest challenges facing all businesses in the coming years—we see it all around us with technology and digital; new work paradigms; environmental, social and governance issues; diversity; and more. Brian is a leader who sees the opportunities created by change, and he has been leading digital transformations for our clients for the majority of his career. He is absolutely the right person to lead RSM on the next phase of our journey.

OK, back to the revenue stuff. Not surprisingly, RSM’s consulting business had the biggest year-over-year revenue increase at 37%, followed by tax at 34% and audit at 29%.

RSM will remain the fifth largest accounting firm in the U.S. based on revenue, only behind the Big 4. Sixth place BDO USA reported $2.49 billion in revenue during its fiscal 2022.

The post RSM US Took Its Revenue to a New Level in 2022 appeared first on Going Concern.

Also meaty was RSM’s revenue for its 2022 fiscal year, which according to Accounting Today’s 2022 Top 100 Firms ranking, was $3.13 billion, up nearly 11% from 2021’s result of $2.87 billion. Many RSMers already benefited a bit from the firm’s record-setting revenue by getting a mid-year pay bump. Based on our calculations using data from a thread on r/accounting, associates got an average raise of 5.5%, seniors 10.8%, supervisors 9.75%, managers 6.8%, and senior managers 6.9%.

With comp talks for FY 2023 recently completed, we wanted to see if this latest round of raises kept the grunts at the House of Adams happy—and how raises compared to previous years. To do that, we examined RSM’s 2022, 2021, 2020 (here and here), and 2019 comp threads on Reddit, as well as the 2016 and 2015 comp threads on Going Concern (not a lot of info for both of those years, but it’s something). We then 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, M1->M2, etc.).

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

Let’s see what went down in early July (2022 raise percentages in bold):

A1->A2

• 10.9% (2022)
• 6.6% (2021)
• 6.3% (2020)
• 7.2% (2019)
• N/A (2016)
• 11.3% (2015)

A1->S1

• N/A (2022)
• 15% (2021)
• N/A (2020)
• 18.7% (2019)
• N/A (2016)
• N/A (2015)

A2->S1

• 19.1% (2022)
• 12.5% (2021)
• 11.7% (2020)
• 15.6% (2019)
• N/A (2016)
• 15% (2015; only one entry)

S1->S2

• 8.6% (2022)
• 7.2% (2021)
• 8.3% (2020)
• 10.3% (2019)
• N/A (2016)
• N/A (2015)

S1->Supervisor

• 14.2% (2022)
• 17% (2021)
• 11.8% (2020)
• 13.5% (2019)
• 17.8% (2016)
• N/A (2015)

S2->Supervisor 1

• 14% (2022)
• 12.9% (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

Supervisor 1->Supervisor 2

• 7.5% (2022)
• N/A (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

Supervisor 1->M1

• 14.4% (2022)
• 12.3% (2021)
• 17.3% (2020)
• 11% (2019)
• 8% (2016; only one entry)
• 14.5% (2015; only one entry)

Supervisor 2->M1

• 14.9% (2022; only one entry)
• N/A (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

M1->M2

• 9% (2022; only one entry)
• 13% (2021)
• 10% (2020)
• N/A (2019)
• 7% (2016; only one entry)
• N/A (2015)

M2->M3

• 5.6% (2022; only one entry)
• 6.8% (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

M3->M4

• 13.2% (2022; only one entry)
• N/A (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

M3->SM1

• 10.4% (2022; only one entry)
• N/A (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

SM1->SM2

• 6.5% (2022; only one entry)
• N/A (2021)
• N/A (2020)
• N/A (2019)
• N/A (2016)
• N/A (2015)

Raises for A2s were all over the place, ranging from 2.4% on the low end to 25.9% on the high end. Same for second-year seniors, with raises ranging from 3% to 12.9%. The biggest raise was 30.9% for one RSMer who got promoted from second-year associate to first-year senior. Overall, it seemed that most people who shared their raises on r/accounting were fairly pleased, especially experienced associates and new seniors.

Related articles:

Compensation Watch ’21: Did RSM US Make It Rain On Employees This Year?
Compensation Watch ’21: RSM US Employees Are Starting to Leak Their Mid-Year Raises

The post Compensation Watch ’22: Were Raises at RSM US Sketchy or No? appeared first on Going Concern.

Compared to the usual suspects from public accounting that make the BCTWF nearly every year, RSM US is a newbie. Last year was the first time in the ranking’s 25-year history that RSM made it, coming in at No. 62. Here’s why RSM made the BCTWF for the second straight year, according to Fortune:

When the coronavirus pandemic hit, RSM responded with increased childcare support, extra PTO, and new mental health services. This year, it’s on the list for the second time—and 22 spots higher. Not only did RSM continue to pay out bonuses and raises throughout the pandemic, but in May 2021 it delivered a Gratitude Award or $1,000 bonus to all employees who had been with the accounting firm for the entire fiscal year (those with shorter tenures received $500). In December 2021, employees benefited from an extra cycle of raises. RSM staff also feel as if they can bring their whole self to work: “I am extremely proud of RSM’s care for their associates,” one worker notes. “I truly believe that employees are not just comfortable but encouraged to be themselves.”

ICYMI, here’s what we wrote about the raises RSM employees got last year, as well as the mid-year raises that the firm handed out last December.

Stats of note:

• Employees: 12,2417
• Number of job openings: 5,760 (as of March 2022)
• Number of job applicants (last 12 months): 102,300
• Average number of applicants per opening: 25
• Number of new graduates hired: 2,100
• Percentage of women: 46%
• Percentage of minorities: 23.4%
• PTO limit (days): N/A
• Number of sick days: Unlimited

RSM will have a new leader on Aug. 31, as Brian Becker, the firm’s national consulting leader, will succeed Joe Adams as RSM managing partner and CEO. We’ll see if RSM can keep that positive mojo rolling when Becker takes the helm later this summer.

Related articles:

The Fortune 100 Best Companies to Work For: Deloitte #24 (2022)
The Fortune 100 Best Companies to Work For: Plante Moran #30 (2022)

The post The Fortune 100 Best Companies to Work For: RSM US #40 (2022) appeared first on Going Concern.

Big Salary increases for senior auditors moving to RSM – Seattle. Nearly $100k plus bonus for 2-3 years of experience.

Current supervisors and managers making $80k – $96k.

No plans to bump the loyal employees…..

On one hand, good for those seniors taking advantage of the obvious desperation for audit seniors in the RSM Seattle office. Browsing through the RSM 2021 Comp Thread on r/accounting, the highest senior 1 salary in audit I could find was $78,000, and for senior 2s, the highest was $82,000, so a base salary of just under $100,000 plus a bonus for that position is quite the pay bump. This doesn’t account for the mid-year salary adjustments RSMers received a couple months ago.

On the other hand, audit supervisors and managers cannot be pleased and are probably updating their resumes behind the scenes. No wonder managers are leaving public accounting en masse right now. They’ve had enough of this shit—being overworked and underpaid. And that has had a trickle-down effect made worse during busy season, as seniors are taking on the workloads of the recently departed managers and second-year associates are handling the workloads of seniors.

Our tipster said, as of now, RSM hasn’t increased salaries in the Seattle office for managers and supervisors to adjust for what the firm is allegedly offering seniors in audit. The tipster added:

It’s no wonder why managers and supervisors are leaving in droves. The firms have hurt themselves with this money game for people with very little experience.

Is this happening in any other RSM US offices? If so, get in touch with us using the contact info below. All tips will be kept anonymous.

Related articles:

Compensation Watch ’21: Did RSM US Make It Rain On Employees This Year?
Compensation Watch ’21: RSM US Employees Are Starting to Leak Their Mid-Year Raises

The post One RSM US Office Might Want to Rethink Its Retention Strategy For Managers and Supervisors appeared first on Going Concern.

But last week the PCAOB released another batch of 2020 inspection reports, including the results of RSM’s day with PCAOB inspectors. But instead of following the same path as the Big 4 firms and Grant Thornton by cutting down the number of auditing errors found during the most recent inspection cycle, RSM’s inspection report most resembled BDO’s, which is rarely ever a good thing.

So seven of the 15 audits inspected by the PCAOB weren’t up to snuff, for a deficiency rate of 46.7%. Of the top seven firms, only BDO’s was worse at 54.1%. After having one of the worst PCAOB inspection reports ever in 2017, RSM’s auditing was trending in the right direction, with error rates of only 29% and 20% in 2018 and 2019, respectively. RSM’s response to failing nearly half of the audits inspected by the PCAOB was they take inspections seriously, this will help them improve, we have a long history of audit quality, etc. In other words, they’ll try to do better next time.

A good place to start would be improving audits of internal control over financial reporting, as the majority of errors called out by inspectors had to do with not not performing sufficient testing of the design and/or operating effectiveness of controls selected for testing; not identifying and/or sufficiently testing controls over the accuracy and completeness of data or reports that the issuer used in the operation of controls; and not identifying and testing any controls that addressed the risks related to a significant account or relevant assertion.

Here’s a scorecard of the major deficiencies caught by inspectors in RSM’s audits of internal control and audits of financial statements:

Across the seven deficient audits, inspectors found several instances in which auditing standards weren’t followed correctly, including 12 mistakes regarding internal controls, three in responding to risks of material misstatement, and three in evaluating audit results.

Two of RSM’s seven failed audits were for clients in the financials sector, while two others were for issuers in an unidentified sector, according to the PCAOB. The other three errors occurred on audits for issuers in the communication services, consumer discretionary, and industrials sectors.

More information about RSM’s crappy 2020 auditing report card can be found in the full report below:

The post Auditing Struggle Bus Makes a Stop Once Again At RSM US, Latest PCAOB Inspection Report Reveals appeared first on Going Concern.

This is also the last new partner and principal class under the reign of Joe Adams, who is retiring as RSM US managing partner and CEO on Aug. 31. He will be succeeded by Brian Becker, the firm’s national consulting leader. Joe said this about the latest group of do-gooders:

“We’re excited to welcome a new class of talented leaders to the RSM partnership. This not only marks a momentous milestone in each of these individuals’ careers, but also signifies that we are dedicated to the success of our firm and to shaping the future of the middle market. We’re confident these leaders are well positioned to drive our strategy and bring diverse perspectives and innovative ideas to our clients, colleagues and communities. We’re appreciative of the contributions these individuals have already made to the firm, and we look forward to the positive impact they will have as they move into this next phase of their careers.”

Let’s take a look at this group of new partners and principals at RSM by the numbers:

• 36: The number of new partners and principals in tax, the most of any service line, followed by 29 in consulting, 21 in audit, and two in ICS.
• 32: The number of new partners and principals who are women, or 36% of the class.
• 22: The number of new partners and principals who work in the Northeast region, the most of any region, followed by 20 in the Southeast region, 16 in the Central region, and 15 in the Great Lakes region.

Here are the 56 men and 32 women who comprise the class of 2022 at RSM:

The post Promotion Watch ’22: RSM US Adds 88 New Partners and Principals appeared first on Going Concern.

Yesterday we mentioned that BDO pulled in a cool $11.8 billion globally in FY 2021, up from $10.3 billion in 2020. Another firm that had a pretty kick-ass 2021 financially is RSM, which saw its global revenue grow nearly 16% in FY 2021—from $6.3 billion in 202o to $7.26 billion. RSM International CEO Jean Stephens gave credit to all of you little RSMers out there for the firm’s “outstanding” last fiscal year.

“RSM Professionals from around the world have worked exceptionally hard to empower our client base of highly dynamic, entrepreneurial, and ambitious businesses to thrive during this challenging time. This has required new perspectives, innovative approaches and a forward-looking gaze to ensure company owners, boards and leaders are primed for growth in the new business age. Our outstanding financial results reflect this pace of change, and our unwavering commitment to supporting the growth ambitions of today’s leading businesses.”

RSMers in consulting get an extra cookie because that service line had the biggest increase in revenue (38%) over the previous year due to “an increasing need for support by middle market businesses in a state of transition as they move from reacting to the pandemic, to accelerating their transformation in preparation for a new business age, according to the firm.”

General business consultancy services in particular grew by 128% year-on-year as the middle market looked to evolve through the wide adoption of innovative new solutions. This includes enhancing efficiencies from business process outsourcing, developing new solutions powered by advanced artificial intelligence and automation technology, to creating supply chain resilience through pioneering data analytics.

Accounting was the service line with the second-biggest gain in revenue at 18.7%, followed by tax (8.4%) and audit (7.6%).

The Europe and North American regions each grew by 15% in 2021, with consulting revenue in North America increasing by 50% over the previous year, RSM said. Revenues increased year-over-year by 23% in the Middle East, 20% in Asia Pacific, 15% in Africa, and 11% in Latin America.

Related article:

RSM’s Global Revenue Soared 9.2% in FY 2020 Because the Firm Spat In the Face of Adversity or Something Like That

The post RSM Is Pretty Pleased With Its Global Haul In 2021 appeared first on Going Concern.

We recently got a tip that RSM US had told employees that “they are re-evaluating market conditions and people/groups might get raises in December.” Our tipster added: “Another carrot to dangle in front of people to get them to not leave.”

Apparently the phrase used by RSM leadership was “targeted adjustments,” according to an RSMer on Fishbowl, which means those high-performers whose salaries are already at or exceed market levels probably won’t see diddly-squat, while those whose current salaries are below market will be the beneficiaries of said targeted adjustments.

Some of those lucky RSM employees have taken to the Redditverse to share how much of a pay bump they are expecting to receive. One Redditor said from what he or she has heard, new hires got 3%, seniors and supervisors got 10%, and managers received 5%. Let’s see if that played out:

Associate

• 10% (tax)
• 3% (tax)
• 10% (N/A)
• 3.5% (audit)
• 2.9% (N/A)
• 3.5% (N/A)
• 3.3% (N/A)
• 7.7% (N/A)

Senior Associate

• 10.9% (audit)
• 10% (tax)
• 12% (audit)
• 10.4% (audit)

Supervisor

• 9.9% (N/A)
• 9.6% (N/A)

Manager

• 8.2% (audit)
• 11.1% (audit)
• 5% (tax)
• 3% (consulting)

Senior Manager 1

• 6.9% (tax)

As you can see, not a ton of entries so far in the mid-year raises thread. If we calculate the average raise for each position, it comes out to: 5.5% for associates, 10.8% for senior associates, 9.75% for supervisors, 6.8% for managers, and 6.9% for senior managers.

We’ll continue to monitor the RSM mid-year raises thread on Reddit to see if there are any new submissions and update this article accordingly. Meanwhile, in July we analyzed the raises that were given to RSM employees this year, which you can read here or by clicking on the link below.

Related article:

Compensation Watch ’21: Did RSM US Make It Rain On Employees This Year?

The post Compensation Watch ’21: RSM US Employees Are Starting to Leak Their Mid-Year Raises (UPDATE) appeared first on Going Concern.

[Updated with official announcement from RSM US below.]

A tipster just informed us that RSM US announced this morning that Brian Becker, the firm’s national consulting leader, will succeed Joe Adams as RSM managing partner and CEO effective Aug. 31, 2022.

As national consulting leader, a role he has held since April 2017, Becker leads professionals across RSM’s three primary consulting service lines: financial advisory, risk advisory, and technology and management consulting, according to the firm.

Becker, who joined RSM in 1989 when the firm was known as McGladrey & Pullen, was awarded RSM’s highest honor, Partner of the Year, in 2005 for his accomplishments in guiding the technology consulting practice into one of the firm’s most successful businesses. He also served as a member of the RSM US Board of Directors from 2011 to 2015.

Adams, who has worked for RSM and its various other names for more than 42 years, has been the firm’s CEO since May 2011.

We’ll update this article as more information becomes available. [UPDATE] The official announcement from RSM came out just as I pushed “Publish” on the tip we received. Oh well. Here’s what RSM had to say:

RSM US LLP (“RSM”) – the nation’s leading provider of audit, tax and consulting services focused on the middle market – is pleased to announce that Brian Becker will succeed Joe Adams as Managing Partner & CEO of the firm effective August 31, 2022.

The transition is the outcome of RSM’s ongoing succession planning work as Adams prepares for retirement and a comprehensive selection process conducted by the RSM US LLP Board of Directors.

“RSM has a robust succession planning program, and the board followed a thorough process to select Brian as the firm’s next Managing Partner & CEO,” said Jerry Martin, Chair of the RSM US LLP Board of Directors. “He is an outstanding leader who has served as RSM’s consulting leader and a member of the firm’s combined leadership team since 2017, and he also brings solid experience as a member of our board from 2011 through 2015. We are confident Brian will continue to help our clients, our employees and our firm succeed, and we are grateful to Joe for his tremendous leadership and stewardship.”

Becker currently serves as leader of RSM’s consulting line of business, which has grown from $450 million to $1 billion during his tenure. During this time, he has also worked with teams across the firm to realign consulting to reflect the needs of our clients, build platforms to scale our service offerings and acquire new capabilities. Becker inspires his team to be enterprise leaders and has driven a collaborative and supportive culture.

Becker previously served as technology consulting leader and central region consulting leader, as well as serving a term on the RSM US LLP Board of Directors from 2011 through 2015. He began his career at RSM as an auditor before transferring to consulting to build the firm’s technology infrastructure service line from scratch. Becker is a CPA and holds a degree from the University of Northern Iowa. He is also a graduate of RSM’s executive strategy program at the University of Chicago Graduate School of Business.

“I am thrilled to have been selected to serve as RSM’s next Managing Partner & CEO,” said Brian Becker, consulting leader and managing partner and CEO elect. “Joe has been a transformational leader for RSM, and we have a strong vision that will lead us through our 100^th anniversary in 2026 and beyond. I look forward to advancing, evolving and supporting all the great work that is currently in process while simultaneously building on our competitive advantage.”

Adams became Managing Partner & CEO of RSM in 2011. During his tenure, he worked with the board to successfully reunite RSM McGladrey and McGladrey & Pullen as one firm and has overseen more than 20 other acquisitions, the launch of the RSM global brand, the development of the firm’s community giving platforms and the creation of its culture, diversity and inclusion program. At nearly $3 billion with over 14,000 people, RSM today is nearly three times the size it was when Adams took the helm in 2011. After August, Adams will remain with RSM in an advisory capacity and complete his term on the RSM International Board of Directors, which ends on March 31, 2023.

“It has been an honor to lead RSM for the last 10 years,” said Joe Adams, Managing Partner & CEO of RSM US LLP. “I feel proud of all we have accomplished, and I am truly grateful to our outstanding clients, partners and employees who have made the firm so successful. I am confident they will be in great hands as Brian takes over leadership of RSM in the future.”

Related article:

McGladrey & Pullen Names Joe Adams as New Managing Partner and CEO

The post RSM US Names Successor to CEO Joe Adams appeared first on Going Concern.

Joe had this to say in RSM’s 2021 Annual Report:

Our core values of respect, integrity, teamwork, excellence and stewardship were at the forefront of every decision we made. And every step we took was grounded in our 5 C’s of caring, curiosity, collaboration, courage and critical thinking. It is these core principles that enabled us to work together to address challenges from the COVID-19 pandemic, the pandemic-induced recession, racial and political unrest, and conclude the year even stronger than before.

First and foremost, RSM kept the health, safety and wellbeing of our people at the forefront of our decisions. When other firms were cutting compensation, we paid employee bonuses and provided promotions and salary increases. We also added multiple benefits to help our people, including mental health resources and family-friendly support. And we maintained our career development programming in a virtual environment to ensure people continued to develop technical, advisory and leadership skills.

Adams also introduced something called Vision 100—not to be confused with RSM’s Vision 2022 or EY’s Vision 2020—“which is our evolved strategy that will lead us to our 100th anniversary in 2026 and beyond. The full name is Vision 100 … Powered by Our Culture because the last year has proven that it is our unrivaled culture that makes RSM a great firm. We are truly grateful to all of our partners, principals, employees, clients, communities and other stakeholders for being part of it.” Here are some other highlights of the report, including revenue portion by service line:

Related article:

RSM US FY 2020 Revenue Results: $2.7 Billion and 4 Guardrails

The post Number of the Day: $2.9 Billion appeared first on Going Concern.

Firms giving out raises during the height of the pandemic last year were few and far between, so RSM was praised by non-RSMers on the usual chatter sites for giving its employees something at least.

A few weeks ago, RSMers anxiously awaited what raises would be like this year. They had to be more than last year, right? For all the work employees had to do to make RSM money during the worst global health crisis any of us have ever experienced, right?

To find out, I went on r/accounting and went through the RSM comp thread for 2021, both threads for 2020 (here and here), and the one for 2019, and 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, M1->M2, etc).

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

Here are the results:

A1->A2

• 6.6% (2021)
• 6.3% (2020)
• 7.2% (2019)

A1->S1

• 15% (2021)
• N/A (2020)
• 18.7% (2019)

A2->S1

• 12.5% (2021)
• 11.7% (2020)
• 15.6% (2019)

S1->S2

• 7.2% (2021)
• 8.3% (2020)
• 10.3% (2019)

S1->Supervisor

• 17% (2021)
• 11.8% (2020)
• 13.5% (2019)

S2->Supervisor

• 12.9% (2021)
• N/A (2020)
• N/A (2019)

Supervisor->M1

• 12.3% (2021)
• 17.3% (2020)
• 11% (2019)

M1->M2

• 13% (2021)
• 10% (2020)
• N/A% (2019)

M2->M3

• 6.8% (2021)
• N/A (2020)
• N/A (2019)

As expected, this year’s raises topped last year’s in most categories, except S1->S2 and Supervisor->Manager 1, but not by much in a few instances. Raises were only 3% and 4%, respectively, for two RSMers who moved up from S1->S2 this year, according to the 2021 RSM Comp Thread on Reddit.

But the biggest thing that stood out to me was how low raises were this year in almost all of the Associate and Senior categories compared to 2019.

Comp talks also recently happened at Grant Thornton and BDO USA, so we’ll take a look at raises at both of those firms too. Stay tuned.

The post Compensation Watch ’21: Did RSM US Make It Rain On Employees This Year? appeared first on Going Concern.

So it may not be too big of a surprise that RSM wound up on the F100BCTWF for the first time ever in 2021, coming in at No. 62. Here’s why RSM made this year’s ranking, according to the folks at Fortune:

The nation’s leading provider of audit, tax, and consulting services focused on the middle market, RSM US LLP (RSM) scores its first year on the list in which the firm stood out for exceptional employee support during the COVID-19 pandemic, including providing childcare support, increased PTO, and physical and mental health offers. “They have set up many ways for employees to get support through flexible work schedule options and lines to call for mental health issues, and management is genuinely open to directing people to the right resources in these tough times,” says one employee.

Not everything was rosy at RSM during the pandemic, however. The firm had not one but two rounds of job cuts. And according to a tipster, there has been a bit of a urine problem outside of RSM Plaza in downtown Minneapolis:

The sidewalk is the local urinal. Security refuses to do anything and people are exposed to penises almost daily.

This is a daily event. The problem has been ongoing for a couple years now. RSM refuses to do anything about it so the tenants and pedestrians have to hop between pee puddles. I thought I’d share some of the frustration of having an office in their building and being repeatedly ignored.

The last we heard the pee problem has not yet been resolved at RSM Plaza. But in the interim, RSM is trying to keep employee morale from going down the toilet. One RSMer on Fishbowl posted this about a month ago:

“RSM did a solid today. Paying out PTO bank and an extra $1k in the next pay check. My morale is on the up.”

And another RSMer commented:

“Basically doubled my annual bonus by doing this. Thanks Daddy Adams.”

Stats of note:

• Employees: 13,000
• Number of job openings: 1,494 (as of March 2021)
• Number of job applicants (last 12 months): 85,200
• Average number of applicants per opening: 16
• Number of new graduates hired: 1,400
• Percentage of women: 46.2%
• Percentage of minorities: 22.4%
• PTO limit (days): 21
• Number of sick days: 23

RSM will make a really big deal of making the 2021 F100BCTWF in its recruiting of future RSMers, and even though they want you to really care about it too, I’m guessing those of you who are already members of the Adams family probably could care less.

The post The Fortune 100 Best Companies to Work For: RSM US #62 (2021) appeared first on Going Concern.

The number in the red is … well … not a good number. That would be the number of audits the PCAOB inspected that had problems so big that the audit cops determined RSM had not obtained sufficient appropriate audit evidence to support its opinion on the issuer’s financial statements and/or internal control over financial reporting.

For those of you scoring at home, that’s a failure rate of 73%, the firm’s worst ever by far, and RSM had some doozies in the past when it was known as McGladrey.

At that point RSM couldn’t be much worse at auditing, so it wasn’t a complete shock that the firm’s audit deficiency rate got a lot better (29%) in its 2018 PCAOB inspection report.

So if 2017’s grade was an F- and 2018’s was, say, a C+/B-, how did RSM do on its 2019 auditing report card from the PCAOB? I’d give ’em a B+:

So in the span of three PCAOB inspection reports, RSM’s audit quality has improved from failing 73% of audits inspected to 29% of inspected audits having deficiencies to 20% in its 2019 report. High five, RSM!

Of the three ones with mistakes, two had deficiencies in both financial statement and ICFR audits, and one had mistakes in ICFR only.

Here are the areas where RSM auditors struggled the most in 2019, as well as 2018 and 2017:

Of the three wayward audits, two were for issuers in the financials industry, while the other one was an issuer from an unidentified industry.

If you see anything else of importance in RSM’s 2019 inspection report, let us know:

Related article:

RSM US’s 2018 PCAOB Inspection Report Is a Lot Less Deplorable Than the Last One

The post How Did RSM US Fare On Its Latest Auditing Report Card From the PCAOB? appeared first on Going Concern.

RSM Global CEO Jean Stephens ruminated:

“2020 has been a challenging year but our growth reflects the agility and resilience we have shown in the face of adversity, adapting our digital infrastructure in line with rapid change, being purposeful in our decision-making and prioritising the wellbeing of our colleagues and business security of our clients.

“At a time when businesses are being challenged to transform, we remain focused on providing innovative, high-quality services and solutions to help our clients reimagine their future.”

Who is more agile in the face of adversity: ex-Minnesota Vikings running back Adrian Peterson blowing past a tackle by Arizona Cardinals defensive back James Sanders or RSM making billions during a pandemic? I guess it’s RSM (no offense, Adrian).

RSM didn’t disclose in a press release how much money each of its three core service lines brought in last year, just that each one increased its revenue over 2019, so I guess we’ll have to trust RSM’s fuzzy math:

Consulting services saw the highest growth with an increase of 15%. This was driven by demand for management and business consulting, IT consulting and risk management, as RSM supported middle market business leaders in their response to the pandemic, the reorganisation of their business operations and the digitalisation of their infrastructure.

Significant audit client wins in 2019 contributed to a 10% increase in audit revenue in 2020. Audit services were further enhanced through the launch of an innovative online collaboration tool to enhance client experience, enable efficiencies in audit, compliance and advisory services, as well as offering integrated data analytics capabilities.

Recording a 6% increase in global tax revenue, predominantly driven by its business advisory services, RSM’s tax team rapidly mobilised to help clients address heightened complexity in an ever-changing legislative landscape caused by the COVID-19 crisis. RSM also saw an increased demand for advice regarding the application of government stimulus packages, M&A opportunities for strategic deals and, in the latter part of the year, restructuring and transaction support as businesses looked for recovery solutions.

There are now 48,000 people across 120 countries who work for Really Still McGladrey.

[RSM]

Related article:

RSM’s 6.9% Increase In Global Revenue For 2019 Seems Respectable

The post RSM’s Global Revenue Soared 9.2% in FY 2020 Because the Firm Spat In the Face of Adversity or Something Like That appeared first on Going Concern.

So, sorry to the two people who got slighted by RSM’s PR team.

Regardless of whether it’s 84 or 86 people, the class of 2020 could be the biggest ever at RSM, surpassing last year’s class of 80.

Here are a few more interesting numbers about the class of 2020:

• 34: The number of new partners and principals in consulting, the most of any service line, followed by 30 in tax and 20 in audit.
• 23: The number of new partners and principals who are women, or 27% of the class.
• 19: The number of new partners and principals who work in the Northeast region, the most of any region, followed by 18 in the Central region and 14 in both the Southeast region and the Great Lakes region.

Here are 84 of the 86 (apparently) members of the RSM new partner/principal class of 2020:

Congrats to all the newly promoted RSMers! And if anyone knows the names of the two other people who got promoted to either partner or principal, let us know using the contact info below.

[RSM US]

The post Promotion Watch ’20: RSM US Adds 84 (or Maybe 86) New Partners and Principals appeared first on Going Concern.

Now we found out from a tipster earlier this week that another firm has given the gift of delicious red meat from Omaha, NE to its employees for their holiday dinner: RSM US. An RSM fish provided more details recently about the gift-giving to employees by Santa Joe Adams:

I reached out to another source who recently left RSM who confirmed to us about being offered Omaha Steaks (this person didn’t bother with the steaks) but he/she did manage to snag an order for the Yeti coffee mug on his/her way out. And why wouldn’t you? Even if it has RSM’s logo on it, I wouldn’t turn down a Yeti coffee mug.

And you don’t have to be an RSMer to order some RSM-branded Yeti swag like these Colsters and tumblers:

So does this mean we’ll change our word association reply to “Omaha Steaks?” Nah, we’ll always answer “KPMG,” just like if you said “RSM,” we’ll always respond with “McGladrey.”

Old habits are hard to break.

The post RSM US Employees Are Getting Meat Sweats For the Holidays appeared first on Going Concern.

The other day, the newly branded PCAOB released its 2018 inspection report for RSM. Did auditors at the House of Adams get redemption or are they still horrible at auditing?

Let’s find out!The state of audit quality in the U.S. is pretty poor when we’re commending auditors for only screwing up 29% of audits inspected by the PCAOB, but at least RSM auditors showed improvement during this last inspection cycle.

The majority of mistakes found by inspectors focused on internal controls, particularly auditors failing to:

• Perform substantive procedures to obtain sufficient evidence as a result of overreliance on controls;
• Sufficiently test the design or operating effectiveness of certain controls;
• Identify and test controls over the accuracy and completeness of data or reports; and
• Identify and test any controls related to a significant account or relevant assertion.

Across the five deficient audits, inspectors called out 19 separate mistakes of auditing standards pertaining to the internal control audit, four screw-ups in audit sampling, and three deficiencies each in using the work of a specialist, responding to risks of material misstatement, and auditing fair value measurements and disclosures.

Now that the 2018 inspection reports for each of the top seven public accounting firms in the U.S. have been released by the PCAOB, let’s see who had the lowest and highest failure rates:

• Deloitte: 12%
• Grant Thornton: 25%
• PwC: 25.4%
• EY: 26%
• RSM US: 29%
• KPMG: 37%
• BDO USA: 48%

[RSM US 2018 PCAOB inspection report]

The post RSM US’s 2018 PCAOB Inspection Report Is a Lot Less Deplorable Than the Last One appeared first on Going Concern.

We’re just kidding, Ryan. You’re probably having much more fun being on Zoom calls for RSM than for Deloitte:

RSM US LLP has further strengthened its health care industry team with the appointment of Philadelphia-based Consulting Principal Ryan Haggerty, who joined the firm as the national leader for the healthcare internal audit, regulatory compliance and enterprise risk practice.

Haggerty brings more than 19 years of experience as a trusted leader and strategic advisor to the health care industry. He has spent the majority of his career working for a Big Four firm leading the development and delivery of high-quality internal audit, regulatory compliance and enterprise risk services for both health care provider and health plan organizations. He has extensive experience innovating, building and scaling successful health care risk consulting solutions and strategies that align with the emerging risks and opportunities facing the rapidly changing health care industry.

From the looks of this post on LinkedIn about a week ago, Haggerty couldn’t be more thrilled about having left D-town for RSM:

While it looks like Haggerty made a lateral move to RSM (he left Deloitte as a principal), at least he’ll never have to hear this song ever again.

[RSM US]

The post RSM Poaches Someone From Deloitte and Issues a Press Release, Part I appeared first on Going Concern.

About four months later, on Aug. 19, RSM’s PR team finally made Gordon’s hiring official:

RSM US LLP (RSM), the nation’s leading provider of audit, tax and consulting services – is pleased to welcome Deborah (Debbie) Gordon as a principal with the firm’s Washington National Tax (WNT) team, where she will lead the firm’s excise tax practice.

Gordon is a nationally recognized thought leader with nearly 20 years of government and private sector experience. Her advisory services include excise tax consulting with IRS controversies for clients in the transportation, industrial products and consumer products industries. She covers a complete range of excise taxes, including manufacturers taxes, retail taxes, air transportation taxes for passengers and property, environmental taxes, foreign insurance excise taxes, wagering excise taxes, Affordable Care Act provisions, communications excise taxes, fuel credits, and the excise taxes administered by the Alcohol and Tobacco Tax and Trade Bureau.

Prior to joining RSM, Gordon led the excise tax practice in the Washington National Tax office of a Big Four accounting firm. She also worked in the excise tax branch in the Internal Revenue Service (IRS) Office of Chief Counsel, where she was responsible for published guidance on excise taxes, technical advice to the IRS excise tax agents, and letter rulings to taxpayers. She also served as an attorney advisor to the Honorable Juan F. Vasquez, United States Tax Court.

The first thing I noticed in the press release is how ballsy RSM is getting, proclaiming itself as “the nation’s leading provider of audit, tax and consulting services.” But I think someone on the PR team just forgot to add “focused on the middle market” at the end of that sentence.

Back to Gordon who definitely has the bona fides to lead RSM’s Excise Tax practice. According to her LinkedIn profile, she joined RSM in April after spending the previous 12 years at KPMG, working her way up from senior manager to managing director and federal excise tax leader in the Washington National Tax office. (You can still find her profile on KPMG’s website.)

Before working in the U.S. Treasury Department and the U.S. Tax Court, Gordon started her career as a law clerk to U.S. Magistrate Judge E. Thomas Boyle of the U.S. District Court for the Eastern District of New York.

[RSM]

Related article:

RSM Poaches Someone From KPMG and Issues a Press Release, Part I

The post RSM Poaches Someone From KPMG and Issues a Press Release, Part II appeared first on Going Concern.

If you’ve perused INSIDE Public Accounting’s latest ranking of the top 100 public accounting firms in the U.S. based on revenue, you might have noticed No. 5 RSM’s revenue at $2,706,305,000, which accounting firm revenue wonks would know must be FY 2020’s results because, as we reported last September, RSM’s FY 2019 revenue topped out at $2.4 billion.

Sure enough, RSM’s annual report shows FY 2020 revenue at $2.7 billion. Here are some other highlights of the report, including revenue portion by service line:

So RSM’s revenue increased about 11% over last year, but keep in mind the firm’s year end is April 30, so the full effect of the COVID-19 pandemic on the firm’s businesses won’t really be felt until FY 2021.

In a letter to clients and colleagues, RSM US boss Joe Adams outlined the four steps, or “guardrails,” the firm took to “approach the management of our own business” during the Rona:

Keep everyone as safe as possible. Retain as many jobs as possible. Maintain compensation at current levels. And a commitment from our owners to support our people during these difficult times. These guardrails, along with a continuing focus on our long-term strategy and our values, enabled us to successfully navigate the first months of the pandemic and put us in a position to pay our employees bonuses and continue to make strategic investments in our future.

Damn, Joe skipped over guardrails one through three and went right to four! While many of RSM’s competitors announced no bonuses for employees this year, the House of Adams told RSMers in June that the firm would at least fund its portion of employee bonuses at 70%.

Because Joe glossed over the other guardrails, I thought I’d fill in the blanks for him:

1. RSM employees have been working from home since March 17 because of the pandemic.
2. There were not one but two rounds of job cuts at RSM, sooooo you be the judge about job retention.
3. RSM hasn’t cut employee pay during the pandemic. And after originally announcing raises only for those RSMers who are getting promoted, Adams told employees last week that raises for everyone are back on the table.

So Adams’ family, how do you feel about your firm’s performance in FY 2020 and how it has dealt with the pandemic?

The post RSM US FY 2020 Revenue Results: $2.7 Billion and 4 Guardrails appeared first on Going Concern.

Most of the people are very upset for the mixed messages from management. Starting with a message of “layoffs as a last resort,” then 3 weeks later the layoffs happened, to now no raises unless promoted at 5%.

Well we’re happy to report that all that has changed according to multiple tipsters. The story we’re hearing is that “RSM will provide salary increases to employees as of November 1” and raises will be upped for everyone, not just promoted as was the case in June.

The news came via firmwide webcast yesterday in which RSM CEO Joe Adams said they looked at Q1 results and thought all employees should get salary increases come November. We don’t know yet what the increase will be but it’s expected to be based on rating.

If anyone has more info, give us a shout. And ‘grats to the RSMers who’ve been sticking it out all year hoping for a little bit of good news.

The post After a Tough Spring, Raises Are Back on the Table at RSM appeared first on Going Concern.

Compensation discussions are underway at RSM US, and if you remember, only those getting a promotion at the House of Adams are receiving raises—which were capped at 5% this year as the firm muddles its way through the COVID-19 crisis.

Looking at a compensation thread on Reddit, reactions from newly promoted RSMers ranged from appreciation for getting some bump in pay, to “it is what it is,” to “very discouraging.”

The other day we got an email from an RSM US employee who not only shared with us what their recent compensation discussion experience was like but also a spreadsheet that hypothetically compares (not adjusted for inflation) “the next 10 years of my possible base salary earnings if I stay at RSM and they don’t step-up my base salary in the future.”

Ready? OK.

RSM is starting their compensation discussions and our office partner called me today to discuss my promotion and raise. Effective August 1st, I’m being promoted to Assurance Supervisor and I’ve been approved for a 5% promotion raise, with 0% performance raise, and a $2,500 bonus (which is about 10% less than last year’s bonus). At this point, anybody who is not getting a promotion is not getting any raise at all. I asked the partner if there was any information on what might happen later in the year or next year, specifically whether he thought it would be likely that at some point raises would return to “normal” or whether there might be an adjustment next year to at least bring our base salaries back up to trajectory, and he said that all of that was uncertain at this point, but he thinks the percentages would be “normal” once business is back to “normal”. I pointed out to him that even if next year’s percentages are normal, if the base that they’re using hasn’t caught up (I’m not even talking about back pay, just the base salary calculation itself), then effectively everyone will be behind forever, because, you know, compound interest or whatever. He said that was an interesting thought that he hadn’t considered and he’d bring it up with firm leadership and get back to me when he had more information… (so probably never).

To me, it seems like this may have permanently (or at least for quite a while) deflated the future value of every promotion in public accounting. What I mean is, if/when I get promoted to manager (which my career advisor said could happen next year based on my performance reviews, which have always been very positive), if there’s no adjustment to my base salary apart from normal promotion + performance percentage increases, then I will ultimately be paid less (even without considering inflation) than those who were promoted to manager last year, and they will ultimately be paid less by their next promotion compared to those above them. This loss of future earnings will have a cumulative effect for pretty much everybody, but it seems like it will hurt those towards the bottom the most because of the number of future promotions they have available and the number of compounding years they could serve in public accounting.

At present, I am very grateful to still be employed, and I am grateful to be receiving a 5% raise, and I understand that I am very fortunate and there are others not at all in the same position as me right now. In the short-term, it seems like RSM’s treatment of salaries is “better” for employees compared to some other firms (take CLA for example, whose employees are taking pay cuts for now). However, I wonder if over the long-term it might’ve been better had we taken pay cuts like CLA, since I believe CLA has promised that salaries will be returned to “market” in the future. Theoretically, if CLA’s employees take a 10% pay cut for even up to a year but then they bump right back up to where they should be and their raises go back to normal, it will be better for them in the long-run than for RSM employees because CLA employees won’t experience that loss of compounding percentage growth of their base pay every year.

Just for fun, I used my own salary figures to calculate the attached spreadsheet showing what could happen if I stayed in public accounting for another 10 years. I think I was fairly conservative with the performance raises given the situation and uncertainty. Obviously, there are several assumptions built into this model and this only shows my own actual and hypothetical numbers, and we don’t know what the market will do in the future or really how long any of us are going to stay in public accounting, but it’s a “fun” thought experiment and really got me thinking about how COVID-19 could financially slow down a lot of folks in their mid-20s to early-30s for many years to come (and not just in public accounting, I’m sure this has wide-reaching economic implications for everyone who isn’t getting a raise this year, like my husband).

Anyway, please enjoy this waste of my billable hours!

Thank YOU, newly promoted RSM employee, for wasting your billable hours on us.

Related article:

Comp Watch ’20: Raises and Bonuses Are Looking a Bit Paltry at RSM US

The post Newly Promoted RSM US Employee Ponders Life and COVID-19’s Impact on Future Earnings appeared first on Going Concern.

According to a source, a practice leader sent out this email to staff on Tuesday:

Although as a firm we remain in a strong position, we have made some difficult decisions in order to manage our workforce more tightly, and to meet current and anticipated client demands. Today we have moved forward with a round of headcount reductions across all four RSM Canada offices. The lack of turnover simply outpaced our forecast for FY21 and as a result, the majority of reductions are due to excess capacity within our tax and audit groups, along with a small number of ICS positions.

ICS is internal client services, or those with non-client-facing roles, like marketing and HR.

The email didn’t indicated how many people are being let go from RSM, our source said.

This person, who is still employed with RSM, said the email “came out of the blue” and “the messaging so far has been that partners are taking most of the effect of COVID.”

Also, unlike Deloitte, EY, PwC, and Grant Thornton in Canada, RSM hasn’t asked employees to voluntarily take unpaid time off or to work less hours for less pay to cut costs, we were told. Our source said:

They didn’t need us to do that. There weren’t any voluntary or otherwise work hour arrangements. We are all at 100% for 100%. They said we can reach out if we need to be more flexible given any special at home situations but that’s on an ad hoc basis.

And to add insult to injury, raises are only being given to RSMers who are getting a promotion, just like at RSM US.

RSM in ’Murica has had not one but two rounds of job cuts during the pandemic.

If you’ve been impacted by the job cuts at RSM Canada or if you have more information about what’s going on there, get a hold of us using the contact info below.

Good luck to those who are affected.

Related articles:

Layoff Watch ’20: What In the World Is Happening at Deloitte Canada?
Layoff Watch ’20: Is There Trouble Brewing at EY Canada?
Rumor Mill: PwC Canada Strongly Encouraging Tax Staff to Work Less So They Don’t Have to Fire You
Rumor Mill: Grant Thornton Canada Employees Are Still Being Asked to Work Crazy Hard Despite Reduced Hours and Pay
Layoff Watch ’20: Here’s What We’ve Been Told About the Job Cuts at RSM US
Furlough Watch ’20: Apparently RSM US Is Putting Many Of Its Recruiters On Ice, Conducted Second Round of Job Cuts
Comp Watch ’20: Raises and Bonuses Are Looking a Bit Paltry at RSM US

The post Layoff Watch ’20: RSM Is Apparently Lightening Its Load In Canada appeared first on Going Concern.

Those left standing at RSM must be feeling pretty resilient, having somehow dodged two heat-seeking missiles. But RSM management is still bringing the pain in other ways.

We’ve received a few tips on what’s going on at RSM regarding raises and bonuses this year. And Joe Adams’ troops are getting restless and frustrated, according to one RSMer:

Most of the people are very upset for the mixed messages from management. Starting with a message of “layoffs as a last resort,” then 3 weeks later the layoffs happened, to now no raises unless promoted at 5%.

Yep, that’s right, only those RSMers who are getting a promotion will see a 5% bump in pay, firm-wide.

But that’s not all: Bonuses will be paid at 70%. From another tipster:

The firm’s portion is funded 70%. There is still a portion that is based on individual performance/your rating.

When I asked this person what percentage RSM funded of the firm’s portion of employee bonuses last year, they said they couldn’t remember the exact amount but said it was more than 100%. According to a thread last year on Fishbowl about RSM bonuses, someone posted that in 2018 the firm funded its portion at 140% “since we crushed it.” That’s obviously not the case this year.

We were told that compensation calls will begin next month. RSM usually hands out bonuses on July 31.

During these unprecedented, uncertain, and unusual times, it’s not a huge surprise that RSM is being a little stingier with raises and bonuses this year. But know that money you didn’t get this time around could be helping someone who suffered misfortune recently. Team RSM member Davis Love III needs more of that sweet, sweet RSM money to build a new multimillion-dollar home.

Related articles:

Layoff Watch ’20: Here’s What We’ve Been Told About the Job Cuts at RSM US
Furlough Watch ’20: Apparently RSM US Is Putting Many Of Its Recruiters On Ice, Conducted Second Round of Job Cuts

The post Comp Watch ’20: Raises and Bonuses Are Looking a Bit Paltry at RSM US appeared first on Going Concern.

Nearly a month after RSM US told a slew of underperformers that their services were no longer wanted, we got word on Monday afternoon that furloughs and job cuts have started to hit the firm’s recruiting staff.

A source told us:

As of right now, it is most of the Talent Acquisition team that has been laid off or furloughed. They have kept only a skeleton staff for the time being.

I’m assuming this is because they are doing next-to-no recruiting this first quarter.

Can’t say for sure how many people are affected by these latest human sacrifices for the good of RSM, but our source told us that furloughs will be unpaid with benefits and will last for about two to three months.

[UPDATE] It seems like there were more layoffs among the recruiting team than we had first realized. And it looks like job cuts hit some practice areas for the second time on Tuesday.

A source with knowledge of the latest austerity measures at RSM told us this morning:

250 let go firm wide – both external (audit, tax, consulting) and internal client service (HR, Recruiting, L&D, etc). That includes 1/3 of the recruiting team but not the additional 1/3 that were furloughed.

While this person confirmed for us that the job cuts in late April were performance-related, this latest round of layoffs was “definitely not performance-related.”

I was shocked at some of the names I heard – really talented. Some were absolutely cost related – tenured and I’m sure highly compensated individuals. The rest have been described as a knee jerk reaction to Covid and the potential fallout of clients.

Among the recruiting staff, this person told us that the experienced hire recruiting team was hit the hardest by the job cuts and furloughs:

If I had to guess it’s at least 30% of the experienced hire recruiting team. Campus didn’t seem affected. L&D has also taken a big hit as well as the generalists. A very tenured and well respected HR Generalist leader was even let go. Who they’re cutting isn’t making much sense other than a lot of well compensated folks were among the cuts.

This person went on to say that the furloughs and job cuts caught these people by surprise, adding: “The rug was pulled out from under them.”

Up until Tuesday morning we had not heard of there being anyone let go or furloughed outside of the talent acquisition team. But someone started a thread on Fishbowl Tuesday afternoon about layoffs at RSM, both external and internal service. One of the posts said:

Somebody else in that thread mentioned the possibility of more layoffs on Wednesday, which we have not confirmed yet. We also got this emailed to our tipline on Tuesday afternoon:

Rsm is laying off more staff effective june 1

There’s also a thread on r/accounting about the second round of job cuts at RSM.

Things aren’t looking too great right now at the House of Adams. If you have any additional details on what’s going down at RSM, let us know by using the contact information below.

Related article:

Layoff Watch ’20: Here’s What We’ve Been Told About the Job Cuts at RSM US

The post Furlough Watch ’20: Apparently RSM US Is Putting Many Of Its Recruiters On Ice, Conducted Second Round of Job Cuts appeared first on Going Concern.

This time RSM did some partner pickin’ at the PwC patch and brought home Michael McLaughlin:

Michael McLaughlin joins after 19 years with a big four firm, where he specialised in working with listed and PE-backed businesses with an international footprint. Michael brings a strong working knowledge of the retail and consumer, manufacturing, and financial services sectors within the East Midlands region.

Michael McLaughlin comments: ‘I’m thrilled to be a part of the team. RSM is not only a business that enjoys a significant, diverse and growing market share at a national level, but one that offers a tax advisory practice that leads the East Midlands region in terms of its size and capability.’

RSM got another new partner, Simon Browning, who must have fallen out of a wheelbarrow or something at UHY Hacker Young’s partner patch.

Back to double M: During his tenure at PwC, he held the positions of tax manager, senior manager, and director–corporate tax, according to his LinkedIn profile.

His bio on RSM’s site states:

Michael previously worked for over 15 years at PwC predominantly with UK outbound, private equity backed and overseas headquartered groups across all sectors and led PwC’s financial services tax business in the Midlands.

Michael has experience working with clients across a broad range of sectors, and enjoys working together with other specialists to provide holistic and commercial tax advice to his clients. Having originally trained as an auditor, Michael’s audit background helps him work with clients on tax matters where the accounting is an important component of the advice required.

McLaughlin and Browning will both be based in RSM’s Nottingham office.

[RSM UK]

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

Rumor had it that the hammer would be dropped on hundreds of RSM US employees on April 21. We can confirm that layoffs did occur on Tuesday in multiple offices, we don’t know how many people in total lost their jobs (but it wasn’t the 300 that was rumored), and from what we’ve been told, the firm is claiming they were all performance-based reductions, not because the middle market—RSM’s bread and butter—is getting clobbered by the coronavirus pandemic.

Based on sources who have contacted us, RSM offices that were impacted by the job cuts include:

• New York City
• Philadelphia
• Chicago
• Schaumburg, IL
• Minneapolis
• Dallas

A few people who reached out to us Tuesday and Wednesday confirmed that the staff cuts were performance-related. One person said:

Can confirm the layoffs at RSM in the Private Client Services group were all performance based. They cut 6 associates/1st year seniors in our group of about 60, but the 6 were all known under-performers.

Another person said the two employees let go in their office “was 100% performance based.”

This is pretty common practice at the end of every [audit] busy season. Been with the firm 6 years and seen larger performance cuts in the past.

During a webcast on Tuesday, CEO Joe Adams outlined what actions the firm is/will be taking for the foreseeable future.

A source who heard the webcast told us:

It was announced that layoffs were performance based. Bonuses are still in place, but they may be deferred depending on cash flow. No mass layoffs in the short period, no pay cuts. No changes in partner distributions. Hiring suspended, internships will be virtual now.

Another source told us about the internships:

Summer internships and leadership programs will still be occurring, just virtually due to unknown restrictions based on group gatherings. All late summer trainings potentially may switch to virtual depending on government restrictions, asked not to book any travel arrangements.

From what we’ve been told, a date has not yet been set for when the virtual summer internships will happen.

We also heard from a couple people on Wednesday who told us that RSM partners are taking a decrease in expected earnings.

One source said:

Partners have taken 8-10% decrease in expected earnings for FY20 and prepared to take on more for FY21 to minimize impact to staff.

This doesn’t necessarily sound like partner pay cuts, but instead expected income compared to plan. For March and first half of April, we were still better than last year, but behind plan.

It sucks people lost their jobs yesterday at RSM. But at least the firm didn’t go all Crowe-like on its employees. Sounds like it could have been much worse.

One current RSM employee told us:

All in all, the firm has done a solid job at communicating with employees. Regular updates are posted on the RSM intranet.

But another person told us that the firm has “made a point of communicating very little to those they laid off.”

They simply said, without offering any specifics, that it was performance-based. It seems they needed to make cuts due to what’s going on, but strategically decided to make it appear that it was officially because of performance. Anyone with anything negative in their feedback this year or last were vulnerable, while RSM gets to protect themselves and their public image. Very shady.

That’s all we know for now. If anyone else can fill us in on other things Adams talked about during the webcast, get in touch with us by email or text using the contact info below.

Related article:

Layoff Watch ’20: How Bad Were the Job Cuts at Crowe and Baker Tilly?

The post Layoff Watch ’20: Here’s What We’ve Been Told About the Job Cuts at RSM US appeared first on Going Concern.

A tipster let us know this evening that RSM US is going full work-from-home mode as well, starting tomorrow. Here’s the missive RSM CEO and Managing Partner Joe Adams sent everyone earlier today:

Good afternoon,

We are in unprecedented times, and I am so proud of how we have worked together to meet this challenge. The situation around COVID-19 has evolved rapidly over the weekend with widespread school closures and new federal, state and local guidance. I urge you to follow our firm’s guidance to continue to protect the health and safety of our people, families, clients and communities.

Effective tomorrow, March 17, we will be shifting to a mandatory remote working environment until further notice.

This means that you should not work in the office. You may go to the office to pick up any critical items you need to complete your work through the end of the day on March 17. Any subsequent office visits require permission from your local line of business or solution set leader, and you must sign in and out so we can keep track of who has been in an office.

It also means that you should not be working at a client site. Activities at a client site should be kept to the minimum critical activities necessary to complete our work as outlined in the line of business remote working guidelines and messages sent on the evening of Friday, March 13.

We have already seen exposure in a number of our office buildings through other tenants, and we expect this trend will continue. While we know this will make it more challenging for some of you to get your work done, we believe this is a necessary step to protect you, our clients and our communities while also doing our part to flatten the curve and reduce the spread of the virus.

We are fortunate to have technology and a culture that enables us to work remotely. Guidance is available and regularly updated for each of our lines of business (Audit, Consulting, U.S. Tax, Canada Tax). For ICS professionals, we ask that you continue to work with your direct leader on how to best complete your work remotely.

If you need a monitor or other IT equipment to work effectively when you are remote, you may take one from your office to use for the duration of the time you will be working remotely. Please be respectful, recognize that this equipment is property of the firm, and return it when we return to normal operations.

We are working with our office leaders to ensure continuity for critical business activities that will minimize or eliminate the need for people to be in an office, such as receiving mail and packages. We expect everyone will leverage the ability to use electronic documents to the extent possible. In addition, our receptionists are able to manage phone calls remotely during regular business hours. We are also working with our national teams on critical business operations for our firm, and we will provide a separate communication for those groups.

We must support one another and communicate.

We understand that many of you will require flexibility and may need to work unusual hours as you manage multiple personal and professional priorities. Please stay in touch with your team about the support you need, when you plan to be working and the progress you are making on your work assignments. Teamwork is one of our core values, and I am confident that together we can make this work. It will require communication and flexibility on everyone’s part.

Our restrictions on air travel and hotel stays remain the same.

Any exceptions for travel must be granted by your national line of business leader. If you are currently traveling on any domestic long-term assignment, we request that you come home as soon as possible. We are working with our expats and others overseas on an individual basis. We are seeing increasing international travel restrictions, including several provinces in Canada, and we anticipate domestic travel restrictions may begin to occur as well.

Taking care of your health is critical.

We are currently experiencing change that is unlike anything we have experienced before. It is important that we all take care of our physical and mental health, and RSM has resources to help.

• If you or a member of your household is feeling ill, please seek appropriate medical attention. We have published details on benefits that are available to help you.
• If you or a member of your family need to speak to someone about how you are feeling in this rapidly changing environment, our Employee Assistance Program provides confidential counseling resources.

o    U.S. people can visit this website or contact 1.800.888.2273.
o    Canada people can visit this website or contact 1.866.590.2350.

• If you have concerns about your access to a place to work, a place to live, or food for yourself or your family, please contact employee relations for assistance.

All of our guidance is continually updated on our internal resource center on The Point and in our FAQ.

Thank you all for your individual and collective leadership during this critical time. This is a new experience for all of us, and I know that together we will meet the challenges of the weeks ahead.

Sincerely,
Joe

Joe Adams
Managing Partner and CEO

The post RSM US Joins the Mandatory Work-From-Home Party appeared first on Going Concern.

Other than what’s in this infographic, RSM wasn’t too transparent with total revenue pulled in by its regions and service lines. For example, what about auditing services?

Regional growth was particularly strong in North America (14.8%), with Asia Pacific also experiencing a significant increase (6.0%). Across the network, 77% of RSM member firms grew their revenues, with 46% experiencing double-digit growth. In an increasingly complex and data driven regulatory landscape, service line growth was led by tax services (11.7%) and consulting services (7.2%).

You’d think transparency would be at the forefront for a firm that has the tagline of “The Power of Being Understood.” Guess not.

[RSM]

Related article:

RSM Pulled In $5.37 Billion In Revenue Globally In 2018

The post RSM’s 6.9% Increase In Global Revenue For 2019 Seems Respectable appeared first on Going Concern.

Sound familiar? Does anyone here remember RSM Tenon?

This is the second time that RSM’s internal accounting has tripped it up. The firm, previously called RSM Tenon, collapsed in 2013 after it mis-stated its accounts. It was then sold in a pre-pack administration to competitor Baker Tilly.

Back to the most recent RSM accounting screw-up: CEO David Gwilliam, CFO Nigel Tristem, and COO Robert Ross were removed from the management team and demoted to partner in late December.

They’ve been replaced on an interim basis by regional managing partner Jez Filley as acting CEO, head of retail Andrew Westbrook as acting CFO, and partner Jill Jones as acting COO.

According to the Financial Times, RSM made errors in its provisions for professional liability claims—legal action or regulatory fines against the firm.

The company set aside £3.8m too much for these claims in 2017 but £6m too little in 2018, resulting in a total net impact on profit of £2.2m.

The restatements “arose from an error in the calculation of the professional liability claims provision”, according to RSM’s accounts. “The directors have investigated this error and have a plan in place to strengthen the related controls and reporting procedures.”

RSM is audited by Moore Kingston Smith, which has decided not to comment about this mess.

Bosses out after auditor RSM bungles own accounts [The Times]
Auditor RSM reveals error that led to bosses’ departure [Financial Times]

The post RSM U.K. Did a Little House Cleaning appeared first on Going Concern.

But the talk of the tournament hasn’t been the beautiful weather, or the 7-under 65 Simpson carded yesterday to top the leaderboard, or Adams & Co. The talk of the tournament has been a massive capsized cargo ship off the Georgia coast that can be seen as clear as day from the golf course.

So about that massive overturned ship in the water at the RSM Classic… https://t.co/5TWRZw9Evm pic.twitter.com/rb2E0fLebY

— GOLF.com (@GOLF_com) November 21, 2019

The 656-foot cargo ship, called the Golden Ray, started to capsize off the shore of St. Simons Island on Sept. 8 after a fire broke out on board. The ship was carrying 4,200 cars, including brand-new Hyundai and Kia vehicles, and was heading for Baltimore before wrecking, according to published reports. Fortunately, all of the ship’s 24 crewmembers were saved. But it may take a year or more to remove the ship.

So, there’s a chance the ship will still be there for the 2020 RSM Classic, which will probably piss off RSM-sponsored golfer, Sea Island golf course redesigner, and noted prick Davis Love III, who whined when he was asked about the capsized ship:

“It’s disappointing when I come down the 18th hole with the Commissioner of the PGA Tour, the CEO of RSM, one of his guests, and (rock star) Darius Rucker and it’s the prettiest day of the year and you see a barge with port-o-lets on it and a sunken ship in the background,” he said.

Chill out, Davis. You, Adams, and RSM should be thankful that the ship is giving the tournament this much attention. Although it’s kinda sad that an overturned cargo ship is more of a star of the tournament than any of its golfers.

The post RSM’s Golf Tournament Is Being Upstaged By a Huge Capsized Cargo Ship appeared first on Going Concern.

RSM US LLP (“RSM”) – the nation’s leading provider of audit, tax and consulting services focused on the middle market – is pleased to announce the addition of Scott Wilson as audit innovation leader with the firm’s national professional standards group.

In his new role, Wilson, a member of RSM’s innovation steering committee, will lead the firm’s efforts to identify new opportunities in which its audit practice can continue to meet clients’ needs in the areas of technology automation, data analysis and artificial intelligence.

Wilson has more than 15 years of experience helping businesses innovate, transform and grow. His areas of focus include digital transformation, corporate strategy and knowledge programs. He previously served in director-level positions with two Big Four firms.

A native of the U.K., where he received his PhD from Cambridge University, Wilson currently lives in San Fransisco. He has written and published several thought leadership articles for publications such as Harvard Business Review, the Wall Street Journal and Forbes.

“Scott brings a wealth of knowledge to RSM,” said Sara Lord, a national audit partner in assurance services with RSM US LLP. “He will be an excellent addition to our team as we continue to enhance our audit innovation process to provide the best possible service to our middle market clients. I am very excited to have him join us as a leader.”

Wilson came to RSM from KPMG in San Francisco, where he was a managing director. Before KPMG, Wilson spent about nine years at Deloitte, including a stint where he lead the development and implementation of Deloitte’s U.S. technology, media, and telecommunications industry research and thought leadership strategy, according to his LinkedIn profile.

Since July, RSM has poached people from three of the Big 4 firms (that we know of). It snagged Wilson away from KPMG, and this summer, it did a little talent shopping at Deloitte and PwC.

So let us know when you’re about to poach someone away from Uncle Ernie, OK RSM? OK.

The post RSM Poaches Someone From KPMG and Issues a Press Release, Part I appeared first on Going Concern.

Let's give it up for our 80 newest partners and principals! https://t.co/CEF9Uo7kDy pic.twitter.com/vKD78mYRyN

— RSM US LLP (@RSMUSLLP) October 1, 2019

Since Going Concern has been around, the largest partner class at RSM/Mickey G’s was 68 last year, followed by 59 in 2016 (RSM) and 56 in 2015 (McGladrey).

Let’s take a closer look at the class of 2019 by the numbers:

• 29: The number of new partners and principals in both tax and in audit, the most of any service line, followed by 21 in consulting and one in internal client services.
• 21: The number of new partners and principals who are women, or 26% of the class.
• 8: The number of new partners and principals who are based in Boston, the most of any location, followed by Chicago with seven and San Diego with five.
• 2: The number of new partners and principals who either have the first name or last name of Cash.

Here are the 80 new partners and principals in the RSM class of 2019:

Congrats, y’all!

The post Promotion Watch ’19: RSM Adds 80 New Partners and Principals appeared first on Going Concern.

That’s a 14% increase over the firm’s FY 2018 revenue of $2.14 billion. RSM’s fiscal year ends on April 30.

There’s not a whole lot more to add because RSM doesn’t usually send out glitzy, congratulatory press releases on its year-end revenues like EY did today. But here are a couple other things I found in the annual report:

• Once again audit services accounted for the most revenue of RSM’s three core service lines at 36%, followed by tax services at 35% and consulting services at 27%.
• The firm added 1,134 warm bodies nationwide in FY 2019.

RSM is currently the fifth-largest accounting firm in the U.S., behind the Big 4 and ahead of Grant Thornton. GT should release its FY 2019 U.S. revenue numbers within the next month.

The post RSM US Revenue Rose to $2.4 Billion In FY 2019 appeared first on Going Concern.

The Securities and Exchange Commission today charged public accounting firm RSM US LLP with violations of the agency’s auditor independence rules in connection with more than 100 audit reports involving at least 15 audit clients.

Yes, auditor independence is a joke. So is deciding a tied FIFA World Cup championship match with penalty kicks. But neither of those rules are going away anytime soon.

So until auditor independence rules are changed, audit firms aren’t allowed at any point during the engagement to have an employment relationship with an audit client, and it can’t provide certain non-audit services to an audit client, like payroll processing, financial information system design or implementation, and broker-dealer, investment adviser or investment banking services.

Because RSM US got into some sticky situations with audit clients, Adams & Co. settled with the SEC today for $950,000 without having to admit or deny the allegations.

The SEC alleges that RSM US repeatedly represented that it was “independent” in audit reports issued on the clients’ financial statements, when according to securities regulations, the firm really wasn’t.

[T]he SEC found that from 2014 to 2015, RSM US or its associated entities, including other member firms of the RSM International network, provided non-audit services to, and had an employment relationship with, affiliates of RSM US audit clients, which violated the SEC’s auditor independence rules. The prohibited non-audit services included corporate secretarial services, payment facilitation, payroll outsourcing, loaned staff, financial information system design or implementation, bookkeeping, internal audit outsourcing, and investment adviser services.

The audit clients included funds of eight registered investment advisers seeking to comply with the SEC’s Custody Rule, the employee benefit plans of three public companies that filed reports with the SEC on Form 11-K, two broker-dealers, and two public companies.

RSM US has this thing called Client Central, a database the firm has used since 2011 to keep information on all things client, like all work billed to clients, both audit and non-audit, across all RSM US offices. RSM US engagement teams are required to search Client Central as part of client acceptance and continuance procedures, according to the SEC.

And prior to 2017, all RSM US audit engagement teams were required to complete a computer-based questionnaire called the McGladrey Risk Assessment Model (MRAM) to assess potential engagement risks related to auditor independence. BUT! Prior to 2014, the MRAM didn’t prompt audit engagement teams to perform searches in Client Central to identify affiliate relationships.

OK, now that we’ve got all that out of the way, let’s see what kinds of trouble RSM US (then known as McGladrey) got itself into, despite having these independence controls in place:

For example, for fiscal years 2012 through 2014, RSM US was engaged to audit the financial statements of two private funds of Registered Investment Adviser A to satisfy the requirements of the Custody Rule. In late 2012, RSM US consulting personnel were engaged to provide prohibited financial software consulting services to one portfolio company of the funds; in 2013, to an additional portfolio company; and, in 2014, to a third portfolio company. These services were provided during 2013 and 2014. … [P]rior to the requirement to complete the MRAM, the consulting teams were not required to search for audit services provided to affiliates of their clients. In 2014, the prohibited services were unrecognized because consulting personnel improperly entered their clients’ names into Client Central and did not tag their clients as related to Registered Investment Adviser A. Additionally, two of the consulting teams failed to complete MRAMs, and the consulting team that did complete the MRAM inaccurately responded that its client was not majority owned by Registered Investment Adviser A. By failing to identify the prohibited non-audit services, RSM US issued audit reports for fiscal year end 2013 while not independent. RSM US identified the issue in early 2015 and did not issue audit reports for fiscal year end 2014.

In addition, the SEC said a tax partner from an RSM International member firm in Australia served on a voluntary basis as a non-discretionary member on the board of an affiliate of a RSM US issuer audit client, thus breaking auditor independence rules regarding employment relationships.

These independence violations remained undetected until 2016, the SEC stated.

As part of the settlement, RSM US was ordered to cease and desist from future violations, and the firm agreed to engage an independent consultant to evaluate its current quality controls for complying with auditor independence requirements for non-audit services.

The post RSM US’s $950,000 Fine Is a Reminder That Performing Non-Audit Services for Audit Clients Can Get You Into Trouble appeared first on Going Concern.

Chicago-based RSM US LLP on Tuesday [July 16] announced that it’s renewed its lease at RSM Plaza in downtown Minneapolis.

Though the building bears RSM’s name, it’s actually owned by Chicago-based Golub & Co. and Los Angeles-based Oaktree Capital Group LLC. RSM occupies more than 115,000 square feet in the plaza, making it the biggest tenant in the building. RSM Plaza is located at 801 Nicollet Mall.

An RSM spokesperson confirmed that the lease will run for 12 years.

In a news release, RSM added that it plans to “fully renovate the space to empower a modern workforce.” The new renovations are slated to wrap up in 2020. RSM didn’t provide any other particulars about the planned updates.

Those upgrades will be in addition to a recently completed $10 million renovation project at RSM Plaza. As part of that work, Golub and Oaktree Capital built a new lobby facing Nicollet Mall and improved the building’s skyway connections.

[Twin Cities Business]

The post Well, At Least RSM Plaza Won’t Have to Be Renamed appeared first on Going Concern.

First up is Brad Collins:

In his role as a principal with the firm’s national tax team, Collins leads the firm’s efforts to identify opportunities where RSM can eliminate tax data management challenges for private equity and hedge fund clients – whether they be fund-to-fund, fund-to-investor or fund-to-RSM.

He leads RSM teams in developing relationships with funds, with the goal of being their first-choice advisor. He uses market share growth information to help determine how to best design, develop and deploy the firm’s private equity and hedge fund-based practice resources, and he leads technology deployment teams for early-adopter clients.

Previously, Collins served as technology partner for several crown jewel clients while leading 100+ professionals over four vital and distinct technology verticals focused on driving innovation and digitization across a Big Four firm’s $3.3 billion tax practice.

That Big 4 firm is Deloitte, where Collins spent nearly a dozen years, according to his LinkedIn profile.

He most recently served as Deloitte’s managing director in the tax chief technology office.

The other day, he let all his LinkedIn connections know how excited he was to be working at RSM via a hashtag:

The other new guy RSM picked up, Bob Herman, came to RSM from PwC, where he spent a staggering 22 YEARS with the firm, according to his LinkedIn profile.

RSM has some big plans for Herman:

Herman serves as RSM’s risk consulting intelligent and robotics process automation leader, and will help RSM’s clients become more “digital” in the assessment and performance of risk and internal controls processes.

Herman is a director with more than 22 years of experience assessing, designing and implementing internal control and process improvement solutions. He has been trained on Automation Anywhere, UiPath, Virtual Operations VOLT RPA implementation methodology, and is familiar with other automation tools and techniques, and has led the design and implementation of more than 50 “bots,” primarily in the areas of controls performance and validation. He also has experience in most industries, including industrial products, retail and consumer, banking, pharmaceutical, energy and high tech.

Lock your doors, EY and KPMG, because RSM might be coming for your people next.

[RSM]

The post RSM Did a Little Talent Shopping At the Big 4 appeared first on Going Concern.

RSM will occupy all of the ninth floor and half of the 10th floor in the 14-story, 214,000-square-foot office tower that will be called 46 Penn Centre, according to Kansas City Business Journal. The accounting firm currently takes up residence in an office building less than a mile away from where its new home will be.

But enough about where RSM is going to work; let’s talk about who is going to work there. Who knows, it could be you!

Although the company has 220 local employees, it plans to grow its Kansas City office up to 400 employees over the next several years, and cited its growth as a reason for the move.

“We are very excited about moving into our new office space on the Plaza next year and to continue to grow our presence here in Kansas City,” Ed Bartak, RSM’s Kansas City office managing partner, said in a Tuesday release. “This new space will be a unique working environment for our current team, a space we can continue to engage the greater Kansas City community as well as provide the much-needed space for continued growth.”

So go to r/accounting, get 20 different opinions on how your resume should look, polish up that turd, and send it in to RSM. I’m sure you’ll be hired and dressing your kid up like Andy Reid in no time.

The post Hiring Watch ’19: RSM Planning to Add to Its KC Headcount 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, it has to let the PCAOB know about this by filing Form 3, Special Report, within 30 days after the event. The firm also has to let the PCAOB know that the disciplinary proceeding has been wrapped up.

The PCAOB fined RSM Hong Kong $10,000 last month for not filing Form 3s (or is it Forms 3?) until two and a half years after it was involved in two disciplinary proceedings by the Hong Kong Institute of Certified Public Accountants between October and November 2014.

Both proceedings revolved around an unmodified auditor’s report RSM Hong Kong (then known as RSM Nelson Wheeler) issued on Oct. 28, 2009, on the financial statements of Heng Tai Consumables Group Ltd. and its subsidiaries for the year ended June 30, 2009.

The HKICPA said it received a referral from the Financial Reporting Council in Hong Kong in November 2012 regarding Heng Tai Consumables’ treatment of an available-for-sale (AFS) financial asset, which had suffered significant decline in fair value. The FRC decided that RSM issuing an unmodified auditor’s report was inappropriate.

In September 2015, the disciplinary committee of the HKICPA found that RSM and the engagement partner, Stephen Wong Tak Man, failed or neglected to observe, maintain, or otherwise apply a professional standard issued by the HKICPA, namely Hong Kong Accounting Standard 39, Financial Instruments: Recognition and Measurement, which requires an entity to recognize an impairment loss in profit or loss for an AFS financial asset when objective evidence of impairment exists.

RSM and Wong were each ordered to pay a penalty of HK$10,000 and jointly pay costs and expenses of the disciplinary proceedings of the HKICPA totaling HK$95,401.

Now on to Deloitte & Touche Ltda. in Colombia, which was fined $15,000 by the PCAOB last month for not filing a Form 3 for each of the seven—yes, seven—separate disciplinary hearings it was involved in until between six months and two years after the proceedings had commenced.

The seven hearings, which happened between August 2014 and October 2016, were initiated by the Junta Central de Contadores.

Sorry, I’m not going to go through all seven incidents, but they all involved providing professional services to Colombian companies that weren’t issuers, according to the PCAOB. If you have extra time on your hands, you can find all the Form 3s (or Forms 3) right here.

Deloitte also got in trouble for failing to tell the PCAOB that five of the seven disciplinary proceedings had concluded.

The post The PCAOB Is Sick and Tired of Not Being Told About Firms’ Past Disciplinary Hearings appeared first on Going Concern.

RSM posts record revenues as consulting services power growth.

Click here to read more: https://t.co/5EJKaHBnBT#RsmGlobal #revenue #RSMae #People pic.twitter.com/Vym6mOuC9j

— RSM UAE (@RSM_AE) January 31, 2019

The $5.37 billion in global revenue the firm hauled in last year is up 5.4% from 2017.

All three of RSM’s core service lines grew in 2018, the firm said:

Twelve months of growth have been spearheaded by an increase in the network’s consulting services, with revenues up 14.5% on 2017. The introduction of GDPR, increased cross-border trade risk and the growing threat from cybercrime have all provided new opportunities to extend relationships with clients. Elsewhere, tax advisory services have grown by 6%, while accounting services are up 13%. In addition, international collaboration between member firms remains a core contributor to RSM’s growth, with cross-border client fees increasing 18%.

Now that RSM’s 2018 numbers are in, here’s your current global accounting firm leaderboard in terms of revenues:

1. Deloitte: $43.2 billion
2. PwC: $41.3 billion
3. EY: $34.8 billion
4. KPMG: $29 billion
5. BDO: $9 billion
6. Grant Thornton: $5.45 billion
7. RSM: $5.37 billion

RSM US solidified its spot as the fifth-largest accounting firm in the States with revenue of $2.14 billion in FY 2018.

The firm announced in February that it will be moving its U.S. headquarters from 1 S. Wacker Drive in Chicago to the 30 S. Wacker tower of the CME Center in Chicago sometime in late 2020 or early 2021.

[RSM]

The post RSM Pulled In $5.37 Billion In Revenue Globally In 2018 appeared first on Going Concern.

RSM US was involved in two such disciplinary proceedings—one that concluded in October 2010 and another that concluded in June 2018—and filed a Form 3 with the PCAOB. The problem is the form wasn’t filed until Nov. 30, 2018, eight years after the first proceeding ended and more than four months after the second one ended.

Better late than never, right?

Wrong. The PCAOB censured RSM US and fined the firm $15,000 on March 19 for “failing to timely disclose certain reportable events to the board on PCAOB Form 3, Special Report, in violation of PCAOB rules.”

According to the PCAOB enforcement order, on or around Oct. 4, 2010, RSM (then known as McGladrey & Pullen) “became aware that the Commodity Futures Trading Commission had initiated and simultaneously concluded a disciplinary proceeding against it. The CFTC proceeding related to the firm’s provision of professional services to a company that was not an issuer.”

Caleb included a blurb about what happened in his Accounting News Roundup on Oct. 5, 2010:

Two Accounting Firms To Pay $1.7 Million To Settle CFTC Charges [Dow Jones]
“The charges stemmed from audits of Sentinel [Management Group] that were conducted between 2004 and 2006. The firms, McGladrey & Pullen LLP and Altschuler, Melvoin & Glasser LLP, agreed to pay $400,000 and $800,000, respectively, in restitution to Sentinel’s customers who suffered losses as a result of the Illinois-based futures commission merchant’s bankruptcy.

They were also required to pay civil monetary penalties of $150,000 and $350,000, respectively, according to an order that was filed Monday. McGladrey & Pullen acquired assets related to Altschuler, Melvoin & Glasser’s audit practice in 2006.”

According to a CFTC press release announcing the charges, “Sentinel’s financial statements were materially misstated and that there was a material inadequacy in Sentinel’s internal controls. … The respondents’ audits of Sentinel were ‘deficient in several areas that related directly to their failure to recognize and respond appropriately to the material misstatements in Sentinel’s financial statements and the material inadequacy in Sentinel’s internal controls.”

McGladrey and AMG also failed to conduct Sentinel’s audits in accordance with generally accepted auditing standards (GAAS), as required by CFTC regulations, the press release stated.

In the Form 3 it filed with the PCAOB, RSM wrote that “M&P neither admitted nor denied the allegations. Pursuant to the Order, M&P received a cease and desist, was ordered to pay a $150,000 civil monetary penalty plus postjudgment interest, $400,000 in restitution to certain Sentinel customers, and was required to perform certain undertakings.”

The PCAOB enforcement order also stated that on or around June 4, 2018, RSM “became aware that the Securities and Exchange Commission had initiated and simultaneously concluded a separate disciplinary proceeding against it. The SEC proceeding related to the firm’s provision of professional services to another company that was not an issuer.”

On June 14, 2018, the SEC censured but didn’t fine RSM for engaging in improper professional conduct while conducting a flawed audit of the financial statements of Madison Capital Energy Income Fund I LP, a private oil and gas fund.

The SEC stated:

RSM repeatedly violated professional auditing standards and issued an audit report on financial statements that included a schedule of investments which was materially misstated because it failed to separately report the fair value of the investments held by the fund, as required by Generally Accepted Accounting Principles. The order also finds that RSM did not perform adequate audit procedures on the fund’s schedule of investments to obtain sufficient evidence for their fair value. In addition, RSM failed to meet the American Institute of Certified Public Accountants established Quality Control Standards for CPA firms’ accounting and auditing practices that required competency and proficiency in client acceptance and continuance, staffing, and supervision on the audit, which were necessary for audits conducted in accordance with Generally Accepted Auditing Standards.

In the Form 3, RSM wrote that the firm “neither admitted nor denied the allegations. Pursuant to the Order, RSM was censured and is required to perform certain undertakings. The SEC considered remedial acts promptly undertaken by RSM and cooperation afforded the Commission staff. No monetary penalties, disgorgement, or other penalties were imposed. The Order does not restrict RSM’s ability to perform professional services.”

According to the PCAOB enforcement order, RSM blamed its internal compliance and reporting systems for not being in compliance with PCAOB reporting requirements. The firm said it has made changes to its policies and procedures to make sure it doesn’t happen again.

The post PCAOB Fined RSM US $15,000 for Taking Its Sweet-Ass Time to File a Form 3 appeared first on Going Concern.

RSM’s new digs won’t be that far away from its current digs. The firm will be moving its headquarters from 1 S. Wacker Drive in Chicago to the 30 S. Wacker tower of the CME Center in late 2020 or early 2021.

CME Center currently houses such tenants as CME Group, BP, and Wells Fargo.

RSM has called Chicago home since July 2012, when it moved HQ out of Minneapolis.

John Bird, office managing partner of the Chicago office, seems pretty excited to load up the U-Hauls and get the hell out of 1 S. Wacker:

“While we have enjoyed our current location in Chicago, we’ve realized the need for a more efficient and productive environment that accommodates the way our people work today. As our middle-market clients have continued to grow, so has RSM – in Chicago and at our other 85 offices nationwide. The CME Center will provide us with the needed space for continued growth, state-of-the-art technology and a collaborative environment for working with our clients and with one another. We’re looking forward to maintaining and growing our presence in Chicago.” 

Anyone else in RSM Land excited for this move? If so, let us know.

The post RSM Moving Its U.S. Headquarters Just Down the Road appeared first on Going Concern.

Patisserie Valerie mistakenly says it has named RSM Tenon as its new auditor… RSM Tenon collapsed into administration in 2013 amid allegations of accounting misconduct… *ahem* pic.twitter.com/PRY5uMFKDk

— Tabby Kinder (@Tabby_Kinder) December 20, 2018

What Patisserie Holdings meant to say was that it was hiring RSM U.K. as its new auditor, which the company stated in a corrected press release issued two hours later:

Patisserie Holdings is dumping Grant Thornton U.K. as auditor because GT is under investigation by the Financial Reporting Council for its audit of Patisserie’s financial statements for 2015-17.

The café chain almost collapsed this year due to “potentially fraudulent” accounting irregularities, which set off a chain of events that included the suspension, and then resignation, of CFO Chris Marsh, who was arrested on Oct. 12 before being released on bail.

The post Patisserie Holdings Said It Was Hiring an Audit Firm That No Longer Exists to Replace Grant Thornton U.K. as Auditor appeared first on Going Concern.

RSM US’s 2018 revenue is up 8.1% from $1.98 billion in FY 2017 and up 16% from FY 2016’s $1.85 billion.

This puts RSM US behind the Big 4 and ahead of Grant Thornton ($1.8 billion) and BDO USA ($1.47 billion) in terms of total revenue.

Audit services accounted for 37% of RSM US’s revenue, tax services 36%, and consulting services 26%.

Headcount increased from 8,761 FTE employees in 2017 to 8,845 in 2018.

The post RSM US Revenue Topped $2 Billion in FY 2018 appeared first on Going Concern.

RSM is pleased to announce our 68 newest partners and principals! https://t.co/seOK5zui4F pic.twitter.com/YqsSwVGjiA

— RSM US LLP (@RSMUSLLP) October 1, 2018

This year’s class of new partners and principals at the firm formerly known as McGladrey is by far the largest in the past eight years:

• 2018: 68 (RSM)
• 2017: 39 (RSM)
• 2016: 59 (RSM)
• 2015: 56 (McGladrey)
• 2014: 40 (McGladrey)
• 2013: 35 (McGladrey)
• 2012: 24 (McGladrey)
• 2011: 25 (McGladrey)
• 2010: 21 (McGladrey)

Among RSM’s three services lines, audit had the most promotions (44%), followed by tax (32%) and consulting (24%).

By our count, 31% of the new partner/principal class are women.

Here are the 68 men and women who earned their stripes (name, industry/industries, service line, location):

• Todd Albaugh; Business and Professional Services, Real Estate; Audit; Anchorage, Alaska
• Michael Bahnick, Financial Services, Audit, Chicago
• Charles Barley Jr.; Business and Professional Services, Financial Services; Consulting; McLean, Va.
• Michael Bass; Consumer Products, Health Care; Tax; Peoria, Ill.
• Chris Boettger; Business and Professional Services, Industrial Products; Audit; Chicago
• Ryan Bosworth, Health Care, Consulting, Dallas
• Charles Britt; Financial Services, Industrial Products; Tax; Raleigh, N.C.
• Robert Casillo; Consumer Products, Industrial Products; Audit; Blue Bell, Pa.
• Richard Cooper; Life Sciences, Technology; Tax; Boston
• JuliAn Coy; Technology, Consumer Products; Consulting; Seattle
• Joseph Dashuta, Financial Services, Audit, New York
• Seth Derevensky; Business and Professional Services, Consumer Products; Consulting; West Palm Beach, Fla.
• Anthony Donoghue, Financial Services, Audit, Toronto
• Ron Draganowski Jr.; Consumer Products, Industrial Products; Consulting; Minneapolis
• Robert Dunn; Consumer Products, Industrial Products; Audit; Phoenix
• Drew Faries; Nonprofit, State and Local Government; Consulting; Peoria, Ill.
• Kevin Fincher, Tax, Austin, Texas
• Corey Fishel; Financial Services, Industrial Products; Audit; Sioux Falls, S.D.
• Phyllis Gannon; Consumer Products, Industrial Products; Tax; Chicago
• Thomas Gavlin III, Real Estate, Audit, Chicago
• Matt Gill, Financial Services, Consulting, Chicago
• Michael Graber; Business and Professional Services, Industrial Products; Tax; Kansas City
• Jessica Hartman; Consumer Products, Industrial Products; Audit; Cleveland
• Scott Hermanson; Technology, Financial Services; Consulting; Mason City, Iowa
• Geoff Hopkins; Business and Professional Services, Nonprofit; Consulting; Blue Bell, Pa.
• Ahuva Indig, Financial Services, Tax, New York
• Doug Jenen, Financial Services, Tax, Chicago
• Kathryn Johnson; Financial Services, Real Estate; Audit; San Francisco
• Lynne Johnson, Nonprofit, Tax, Boston
• Steve Kampa, Business and Professional Services, Tax, Minneapolis
• Amy Kasden; Financial Services, Life Sciences; Tax; Boston
• Eli Kemmerer; Technology, Business and Professional Services; Consulting; Baltimore
• Alice Khosravy, Health Care, Consulting, Tampa, Fla.
• April King; Consumer Products, Industrial Products; Audit; Minneapolis
• Jamie Klenieski; Financial Services, Consumer Products; Audit; Blue Bell, Pa.
• Scott Krowczyk, Financial Services, Tax – WM, Rockford, Ill.
• Anil Kurian, Financial Services, Audit, Stamford, Conn.
• Chris Kutac, Tax, Houston
• Nick Larabee; Consumer Products, Industrial Products; Audit; Rockford, Ill.
• John Lee, Tax, Toronto
• Adam Lohr; Technology, Consumer Products; Audit; San Diego
• Steven Marsden, Financial Services, Audit, San Francisco
• Kristin McLaughlin, Industrial Products, Audit, Detroit
• Matthew Mejia; Financial Services, Real Estate; Audit; Irvine, Calif.
• Monica Meunier; Consumer Products, Industrial Products; Audit; Boston
• Dan Mohrbacher, Financial Services, Audit, Denver
• Dan Peltz; Health Care, Industrial Products; Consulting; West Palm Beach, Fla.
• Kimberly Perry, Financial Services, Audit, Chicago
• Danielle Preston; Consumer Products, Industrial Products; Audit; Blue Bell, Pa.
• Wayne Reesman; Business and Professional Services, Industrial Products; Tax; McLean, Va.
• Paul Romano, Gaming, Audit, Duluth, Minn.
• Bobby Rooney, Business and Professional Services, Consulting, Chicago
• Benjamin Shappell; Industrial Products, Technology; Audit; San Francisco
• Eric Sherrier; Industrial Products, Consumer Products; Audit; Chicago
• Tony Spano, Financial Services, Tax – WM, Gaithersburg, Md.
• James Stanton; Technology, Life Sciences; Consulting; Boston
• Theresa Urband; Industrial Products, Financial Services; Tax; New York
• Amy Valentine; Consumer Products, Industrial Products; Tax; Minneapolis
• Michelle Wagner; Consumer Products, Industrial Products; Tax; Minneapolis
• Rainy Walker; Business and Professional Services, Industrial Products; Tax; Oklahoma City, Okla.
• Chris Wetmore; Private Equity, Life Sciences; Consulting; Boston
• Kylie Whitecotton; Consumer Products, Industrial Products; Audit; Des Moines, Iowa
• Lenka Wiles; Business and Professional Services, Industrial Products; Audit; New York
• David Winslow, Financial Services, Tax – WM, Charlotte, N.C.
• Melissa Wofford; Consumer Products, Technology; Tax; Dallas
• Dan Yaceczko; Consumer Products, Industrial Products; Consulting; Cleveland
• John Zalud; Consumer Products, Industrial Products; Audit; Indianapolis
• Crystal Zhang; Consumer Products, Industrial Products; Audit; Columbus, Ohio

Congratulations to RSM’s class of 2018. If you know one or more of these newly minted partners and/or principals, buy ’em a round or two.

The post RSM US Adds 68 New Partners and Principals appeared first on Going Concern.

Rather than wallow in busy season gone by, we thought now would be a good time to play a game: Who Would Win in a Fight? Ready to play? Let’s go.

Benjamin Bankes vs. Barry Melancon

Strengths: probably fights like an animal. As a champion for financial literacy, he likely has quite a bit of money in savings, which means he could easily purchase a large cache of semi-automatic weapons and armor if needed.

Weaknesses: if you ever smashed a piggy bank as a child, you already know.

Strengths: ???

Weaknesses: Most likely doughy like an undercooked tray of Pillsbury crescent rolls. More interested in recruiting more AICPA members than defending his honor with his fists.

Bob Moritz vs. The Bobs from Office Space

Strengths: The power of PwC ego gives him mild super strengths.

Weaknesses: Knows he’s pretty, might be too busy trying to guard his precious face from damage to get any good punches in.

Strengths: As corporate drones, they’re pretty oblivious to everything, meaning they could get punched right in the face and likely not notice.

Weaknesses: See above. They might not even realize they’re in a fight.

Jim Turley vs. Jim Doty

Strengths: Jim Turley once beat down a giant spider in the snack room at 5 Times Square with his bare meat paws, that $100% happened.

Weaknesses: Now that he’s retired, he just doesn’t care.

Strengths: As head of the PCAOB, he can make your life miserable if you’re an auditor.

Weaknesses: Is a lover, not a fighter.

Mid-tier matchup: Joe Adams vs. Jim Powers

Strengths: Probably wrestled several cows to the ground when he was growing up.

Weaknesses: Midwesterners are notorious for being polite to the point of obnoxiousness, would probably avoid a fight and instead suggest they talk it out over brats and a Tab.

Strengths: Could definitely take you in a fight.

Weaknesses: Is too busy promoting Crowe Horwath as a viable alternative to Big 4 to train for a serious fight.

KPMG partners who leaked PCAOB inspection details vs. PwC partners who screwed up the Oscars

Strengths: They all got fired and completely embarrassed the firm, so they no longer care about their reputations. Will probably play dirty and get insider information on their opponents’ weaknesses.

Weaknesses: Leaking information. They’ll probably tell the partners they’re fighting about their physical shortcomings so their opponents can better prepare to kick their asses.

Strengths: Seeing as they totally humiliated themselves, they are likely eager to prove their worth and win in something, anything, even an impromptu street fight in the alley against other public accounting partners.

Weaknesses: Still horrified that they screwed up the one job they had, are likely too overcome with guilt and deep feelings of failure to fight right now.

Save

The post Let’s Play a Game of ‘Who Would Win in a Fight’ Accounting Edition appeared first on Going Concern.

RSM comp thread? Partners begin communicating July 6th through 20th.

Normally, we might wait awhile for the anticipation to reach a fever pitch, but we're feeling charitable (plus, there's nothing else going on). 

To help you along, here's what the comp thread sticklers usually call for:

• Position, promotion (if applicable)
• City (region is not informative) & line of service
• % Raise 
• % Bonus (if any)
• Old & new base

Enjoy. May all your wildest and unrealistic expectations come true.

The post Here’s Your Open Thread for RSM (fka McGladrey) Compensation Discussions (2016) appeared first on Going Concern.

Or not. If you've been reading Going Concern for awhile you know that we've enjoyed covering the firm's personality disorder over the years. Back in 2012, we really thought the move to "McGladrey"  would be in the end of it. At the time, CEO Joe Adams said, "This change represents the last stage in our transition process to a single partner-owned CPA firm." I guess you can interpret that a number of different ways, but I think most people would think, "Okay, good. That's over."

Obviously I'm not a partner at McGladrey, but if I was, I'm not sure how I'd feel about all this branding chaos. It would probably fall somewhere on the range of "Uneasy" and "Nonplussed." Clients spook easily, so every time they hear about a branding change or whatever, they ask about it and then you either A) relay the talking points which are, of course, nonsense; or B) shrug and say, "It is what it is," because I imagine lots of McGladrey partner articulate themselves that way.

All I'm saying is, for the sake of all the dutiful McGladrey/RSM partner and employees out there, hopefully this marks the end of your firm's quest to find an identity. Seems like it'd be a distraction to go through this every 2-3 years, especially if someone insists on serving a mystery drink.     

McGladrey, we hardly knew thee:
McGladrey Latest Accounting Firm to Say, "Screw It, Let's Just Go By Our Initials"
Thank God, This McGladrey Rebranding Thing Might Really Be Over Now
 

The post Don’t Forget, McGladrey Will Be RSM on Monday appeared first on Going Concern.

@McGladrey strengthens position as trusted advisor to middle market leaders globally – to rebrand as RSM in October!”

— Davis Love III (@Love3d) June 11, 2015

[Earlier]

The post Oh, Shut Up appeared first on Going Concern.

McGladrey LLP today announced it will adopt RSM as a common brand name, uniting with fellow firms of its global network RSM International to further strengthen the organization's position as the leading global provider of audit, tax and consulting services focused on the middle market.

"Our clients are an essential part of the global economy, and a unified global brand reinforces our focus on being the first-choice advisor to middle market business leaders by providing consistent global services, regardless of borders," said McGladrey Managing Partner and CEO Joe Adams. "Over the years, McGladrey has evolved with our clients, developing a strong suite of services to support their expansion into the global market and to help them address changes in regulations and the global business environment, enabling them to move forward with confidence."   

We've heard all of this before. A unified global brand! The same quality! Our clients call us by these letters anyway!

PwC. EY. DHG. Take your pick. The story is the same. Oddly, KPMG was the firm that was ahead of the trend.

What's fascinating about this is that accounting firms need to differentiate themselves, yet, they can't help but copy each other. They talk the same (e.g. integrity! client service! diversity!) They do the same things (e.g. audit, tax, consulting). The career opportunities are the same. Oh yes, you can go on about "the people" but these people are the same people, too.  

New and growing firms would be smart to brand themselves in a completely different way. Whether that's through design, niche services or clients, or a website that simply doesn't suck, it doesn't matter. The accounting profession is desperate for some originality (aside from shirtless men) and we won't get it from the alphabet soup of firms at the top.

[McGladrey] 

The post McGladrey Latest Accounting Firm to Say, “Screw It, Let’s Just Go By Our Initials” appeared first on Going Concern.

The move means the reunited McGladery, which has 6,500 employees—600 of them in New York—should be better positioned to compete against such industry-leading firms as PriceWaterhouseCoopers and Deloitte. “We are a great alternative to the Big Four,” said Tom Ferreira, who heads McGladrey's Northeast practice. […] "We're happy to be independent again, all together under one roof," he said.

Your loss, H&RB (not aka McGladrey).

Accounting firm escapes from soured H&R Block deal [Crain's]

The post McGladrey Is Glad to Have McGladrey Back, Says McGladrey Partner appeared first on Going Concern.

[T]he top U.S. tax preparer looks to jettison the underperforming division and focus on its core business. H&R Block will finance about $65 million of the deal value as it looks to push through the sale of RSM McGladrey. […] In June, H&R Block's new Chief Executive William Cobb told analysts that RSM's falling profit and revenue were a drag on the company's earnings, and that the unit and its troubles were on his "radar screen." "(The sale) should improve overall corporate margin, as Tax Services margin in FY11 was 27.1 percent and RSM McGladrey's was 9.3 percent," Oppenheimer analyst Scott Schneeberger said in a note to clients.

And despite the Blockheads eagerness, the gang at M&P seems perfectly okay with it. From the firm's press release:

"The Board's objective is to reunite the assurance, tax and consulting practices under an integrated McGladrey & Pullen partnership structure," said Jerry Bourassa, Chairman of McGladrey & Pullen's Board of Directors. "The anticipated transaction will not impact the quality and timeliness of services to our clients. Our partners and employees remain focused on meeting and exceeding client expectations." […] "This is all about what we believe to be in the best interests of our clients, our employees and our partners. We see great opportunities for success and growth for McGladrey & Pullen as a firm reunited in a traditional partnership structure," said Joe Adams, Managing Partner of McGladrey & Pullen. "Our relationship with H&R Block has served us very well but we both agree that it is time to move on."

So it sounds like there may be cake and punch but it probably won't be a lively affair. Of course we'd rather hear from the people on the ground (i.e. the McGladrey partners, employees, Natalie) about what they make of this shitstorm. I can't imagine anyone missing the used car dealership of the tax prep world but is this reunion going to work? Will C.E. and the gang now be able to turn Mickey G's into the next accounting powerhouse? Can we get one name for the combined firm, for crissakes? All important questions. Please enlighten us below. H&R Block to sell consulting unit for $610 mln [Reuters] McGladrey & Pullen, LLP signs letter of intent to acquire RSM McGladrey, Inc. [McGladrey] *Dustin Bradford

The post H&R Block Was Pretty Eager to Dump RSM McGladrey appeared first on Going Concern.

UPDATE: We've been assured that the cake's tastiness or lack thereof will be communicated to us later today. Whether or not there will be pre-cake jays, gallons of Vitamin D milk to wash it down or couches to pass out on has not been determined. Discuss and keep us updated. Spare no details – flavor, frosting, texture, etc.

UPDATE 2: Okay you guys – who witnessed this sorry-ass display? Natalie wouldn't have disappointed the crowd like these losers. And then someone skulls one right into the camera? Video is completely gone right now. Unbelievable. Get back to us on this cake.

UPDATE 3: The report on the cake is in:

1) The cake is, actually, pretty big. And, it's all cake, except for the part of the logo, which is made of rice krispie treats. 2) As for a slice of that cake…quite good, actually. The cake part is marble, and very soft and tasty. I nabbed what might be a corner piece with the "rough" frosting. It's a lot of frosting. A lot. I'd give the cake a solid A-. There will be a lot to save in the next few days!

Two minutes later we got his follow-up:

I had to stop eating it halfway through — I think I'd go into diabetic shock if I ate any more of it. The grade gets downgraded to a B+.

RSM McGladrey and McGladrey & Pullen, LLP, Launch New "McGladrey" Brand [McGladrey]

The post (UPDATE 3) McGladrey’s Giant Putting Green Cake Will Ensure That Everyone Gets to Celebrate Their Rebranding appeared first on Going Concern.

Frankly, we still don’t know a lot but we’ll go with what we’ve got. So far we know about reductions in the New York, Chicago, Quad Cities, Florida and Seattle offices and everything we’ve been told indicates that they are occurring elsewhere.

First the Emerald City:

I was among the laid off people. There is a new geographic restructuring going on. Instead of multiple “economic units” there will be only three regions. Many HRs and CFOs from different offices are losing their jobs. Consulting people talk about 100 positions that will be eliminated across the country. 10 people were let go from Seattle Economic Unit which includes Seattle, Tacoma, and Olympia offices. We were informed about the reorganization somewhere around 04/12 and laid off at the end of the month. I think everybody received severance.

We’re not that familiar with past cuts in the RSM/M&P world but the big cuts in consulting seem to trail the Big 4’s by a year or two, although if some of these smaller clients are giving into the Big 4 lowballing then perhaps this is the natural progression.

Meanwhile:

Their Florida Private Club operations group closed the Club IT Consulting Group and layed off the staff. Some of the staff have been part of the firm for more than 20 years and were profitable.

Chicago just layed off the Operations Consulting Staff yesterday, [approximately] 10 people. This group was left to dangle in the wind, sink or swim on their own without marketing or sales assistance or access to the firm’s client-base Naturally it failed.

This firm’s actual layoff numbers are always reported low because they chase people out prior to layoffs in an attempt to camouflage the numbers. Their tactics to accomplish this include poor performance evaluations for staff, unreasonable margin requirements, constant peer pressure meetings regarding performance and head to head comparisons. This creates a dysfunctional relationship between groups and actually motivates groups within their own company to compete with one and other. Only so much people can take and then they leave. Just what the firm wanted.

Considering the economy in Florida, the demise of RSM’s private club operations in that corner of the over-leveraged world wouldn’t come as much of surprise. That being said, you might expect that veterans of the firm would be accommodated somehow with other internal opportunities.

As far as the “chasing” this is Jack Welch’s magical forced ranking method that the Big 4 has accepted like its own creation.

We reached out to both RSM’s corporate spokeswoman and their general counsel, both of whom have not responded to our request for comment. We also contacted an H&R Block spokesman to see if they could elaborate on these layoffs from the parent company level but again, our requests have gone unanswered. H&RB had their own layoffs last month however, there is no indication at this point whether cuts at H&RB would have anything to do with those at RSM/M&P.

We’re still accumulating details on these cuts, so get in touch with us about details on your office or discuss below. And don’t be shy, we know you McGladrey types been hesitant to call on us in the past.

The post Layoff Watch ’10: McGladrey Makes Nationwide Cuts appeared first on Going Concern.

No, it’s actually quite a bit more boring than that – cost savings. The company states that it will decrease its operating expenses $140-$150 million by 2012. CEO Russ Smyth was quoted in the Kansas City Star that “There aren’t as many people who need their taxes done when there are a lot fewer W-2s going out,” referring to the higher unemployment rate in the company’s customer base.

HRB’s headquarters in Kansas City will cut 165 of the 400 jobs lost.

The timing of this announcement is interesting because we’ve heard a few rumors (but virtually no details) about layoffs at RSM McGladrey, an HRB subsidiary, but they aren’t as forthcoming with the press releases and aren’t returning our calls. If you have any details about layoffs at RSM or its on-again off-again affiliate, McGladrey & Pullen, get in touch with us.

Full HRB press release:

KANSAS CITY, Mo. – H&R Block (NYSE:HRB) today announced a broad strategic realignment of its field and corporate support organization. Overall, the company expects these changes to decrease annual operating expenses by $140 – $150 million per year by the end of fiscal year 2012.

Russ Smyth, president and chief executive officer of H&R Block, said, “We operate in a challenging and competitive environment, and to be successful we must find new ways to provide better value to our clients. This requires that we narrow our focus and invest in a few key initiatives that will have the greatest impact on attracting and retaining clients in our retail and digital channels, while eliminating other activities and their related costs.”

Approximately 400 positions are being eliminated throughout the organization as part of the measure. The company also has closed approximately 400 under-performing tax offices out of its network of 11,000 retail tax locations.

“Changes like these are never easy and we appreciate the hard work and loyalty of the affected associates,” Smyth said.

“However, these steps are necessary to improve our business performance and better serve our clients.”

H&R Block expects to incur a pre-tax charge for severance-related costs of approximately $28 million, most of which will be incurred in the fiscal quarter ending July 31, 2010.

The post Layoff Watch ’10: H&R Block Cutting 400 Positions, Closing 400 Locations appeared first on Going Concern.

Since this was Tweeted Tuesday, RSM McGladrey likely got their enforcers on this ASAP telling LK, “this is not happening” because he started campaigning for NG late on Wednesday.

In spite of these efforts, L to the K still holds a commanding lead. Once these things get rolling they take on a life of their own.

Upset Alert: Sexiest Woman Alive Madness Bracket Busters [Esquire]

The post Did RSM McGladrey Enforcers Get to Lane Kiffin? appeared first on Going Concern.

The Sexiest Woman Alive Bracket is: “A single-elimination battle royale: sixty-four women, seven rounds, one readers’-choice champion, and not a single Kardashian,” and RSM McGladrey’s own Natalie Gulbis is a number one seed.

Her first round cruise match is against…Lane Kiffin?

Yes, Lane Kiffin. For those of you not pigskin inclined, Lane Kiffin recently left his job as the University of Tennessee football coach for the job at the University of Southern California.

As you might expect, Volunteer fans didn’t take too kindly to a young first-year coach bolting for the sunny confines of L.A. This is not lost on the folks at Esquire and they opted to include the Trojan coach in this year’s bracket.

And as it stands right now, Natalie is trailing Lane in the first round match-up with just under 35k votes to Kiffin’s 46k-ish votes. How does Kiffin, who at first glance does not even qualify for this particular bracket, manage to hold on to what seems to be a insurmountable lead? Is it possible that LK is sexier than Natalie?

Plus, if this lead holds up, isn’t this a public relations disaster for everyone involved? How will RSM explain this to their clients? Will this lead to a desperate move by the firm to drop NG in favor of someone else, say a newly recovered sex addict — who’s a little down on his luck re: sponsors — that will be playing in the Masters?

Vote for the Sexiest Woman Alive! [Esquire]

The post Is RSM McGladrey Worried That Natalie Gulbis Isn’t Sexier Than Lane Kiffin? appeared first on Going Concern.

So H&R Block, parent of RSM McGladrey, has decided that it will educate some of the fine residents in Spartanburg, South Carolina about the less dubious purposes of shredding financial information.

In order to increase awareness of the importance of being financially secure, H&R Block is hosting a Shred Day at Cleveland Village, 1564 Asheville Hwy in Spartanburg from 10am – 2pm on Saturday, March 20. The public is invited to attend to safely dispose of sensitive paper materials, learn about how to protect their ID, and find answers to any tax related questions.

We think this is fine idea on the part of H&RB although we foresee one problem. Since South Carolina has gone to great lengths to regulate “subversive organizations”, will this little demonstration of document destruction backfire? Will it allow the terrorists in the Palmetto state to destroy any and all evidence that would otherwise declare their intentions to overthrow the government? Is Glenn Beck aware that this being allowed to happen?

H&R Block Hosts Free Shred Day [Spartanburg News]

The post The Purpose of H&R Block’s Free Shred Day Is Not to Demonstrate How to Destroy Evidence appeared first on Going Concern.

Well, it’s official. RSM McGladrey and McGladrey & Pullen are back together, having signed a new definitive agreement and putting the brief fallout behind them.

In a statement released by RSM McGladrey on Friday, both firms made good on their promise to kiss and make up after announcing there intentions to do so in December.

Both RSM President C.E. Andrews and M&P Managing Partner Dave Scudder are putting this whole misunderstanding behind them.

“With the completion of these agreements, our focus is on moving forward and building the success of our respective firms by enhancing client service and accelerating growth,” said C.E. Andrews, president of RSM McGladrey, a wholly-owned subsidiary of H&R Block. “We have a clear opportunity to enhance our competitive position by taking the collaboration between our firms to a new level.”

“We now have the framework to build on our heritage of delivering the highest quality services to all our clients, while providing growth opportunities for our people and ensuring the independence of M&P,” said Dave Scudder, managing partner of McGladrey & Pullen. “We look forward to increased collaboration with RSM McGladrey and the renewed sense of enthusiasm and commitment that both firms have brought to this process.”

In spite of the boilerplate statements, it’s not entirely clear if the new agreement between the two firms puts each of them back in the same position prior to the breakup. An RSM spokesperson did not immediately return our email seeking comment on these details. A RSM spokesperson returned our email and informed us that the new agreement is the same as the old arrangement and it is effective for five years, at that time it will automatically renew for additional five years. H&R Block, RSM McGladrey’s parent company, will be filing an 8-K this week with the SEC that will include the signed agreement.

Additionally, some developments that we ponder for personal amusement: will the recombined forces of the two firms be enough to break the absence from the Fortune 100 List? Will M&P will reap any benefits from the Natalie Gulbis ad campaign bonanza? We’ll stay on these…

At the end of the day, we’re sure everyone at both firms is pleased that the issue is resolved for the rest of busy season. Who knows, maybe it was just a distraction for partners but at least you won’t be getting any more emails about it.

The post (UPDATE) RSM McGladrey, McGladrey & Pullen Officially Reconcile appeared first on Going Concern.

We’ll dispel with that for now and assume each of these firms were dying to be on this year’s list. Accordingly, the reason for their exclusion leaves ample room for wild-ass guessing:
• Grant Thornton – We realize Steve Chipman just started his new job and he’s trying to get a blog up and going but for crissakes, how does he explain this to you? Will this regime change make a difference? He didn’t mention it on the call so should we assume this disappointment will continue in perpetuity? Could the Koss fiasco be the reason?
• RSM McGladrey – This one doesn’t make any sense at all. Does anyone at Fortune know that RSM sponsors this woman? Aaaaannddd, we realize it’s too late for this year but RSM is now helping get Yele Haiti’s house in order. Please note both of these for next year.
• BDO – They owe Banco Espirito half a billion dollars and they’ve been planning a 100th birthday extravaganza. Maybe campaigning for the list isn’t at the top of their to do list but still.
If any of you GTBDORSMers have any idea just what the hell is going on (i.e. why this gross oversight has gone on for at least five years), fill us in.

The post Let’s Speculate as to Why Certain Accounting Firms Weren’t on the Fortune 100 List appeared first on Going Concern.

Yele Haiti has also retained Grant Thornton, who filed the three years of tax returns for the foundation just last August.

All the hubbub was over the foundation less than timely filing of its tax returns and paying expenses on the behalf WJ’s production company.
Not filing tax returns is one thing but there is some debate over whether the payment of expenses is actually anything to worked up over:

John Colombo, a University of Illinois law professor specializing in tax-exempt organizations, said tax laws permit such fees.
“If you told me the organization raised $1 million and it all went to him, then I would have some issues,” Colombo said. “Paying him an arm’s length salary for services he actually performed just isn’t a problem.”
But Alvin Brown, a tax lawyer who runs the site IRSTaxAttorney.com, said such transactions were “scary” and “could be viewed as fraud.”

“Viewed as fraud” isn’t the same as “is a fraud” but we after the last week, Yele Haiti has heard worse.
Wyclef’s Haiti Charity Gets New Accountants [AP]
Earlier:
We Knew Accounting Firms Were Helping Haiti

The post Yele Haiti Names RSM McGladrey as New Accountants appeared first on Going Concern.

The post RSM McGladrey Does the PGA a Solid, Sponsors Golf Tournament appeared first on Going Concern.

The post Happy Birthday Natalie Gulbis! appeared first on Going Concern.

An arbitration ruling, which was handed down Nov. 24, favors H&R Block and RSM, enforcing the restrictive labor covenants involving employees of the two firms.

About 650 McGladrey partners began meeting in Orlando, Fla., on Wednesday and voted Thursday to approve the agreement after the M&P board, including managing partner Dave Scudder, had earlier approved the deal.

The whole thing has been pretty ugly as far as we can tell and according to Allan Koltin, CEO of PDI Global, a consultancy firm that advised both firms, M&P didn’t have any choice but to go back:

The enforcement of some of the terms of the original agreement by the arbitrator seems to have forced M&P’s hand. “Once the arbitration ruling came out and McGladrey & Pullen found they were prohibited from providing tax services for a couple of years, that was the end right there,” said Koltin. “There was no way they could be independent as an audit-only firm and compete effectively without also providing tax services.”

The original non-solicitation agreement said that M&P could not provide services such as tax preparation for between 18 and 24 months if it terminated the agreement, effectively limiting the firm to audit services. “Once they saw the writing on the wall, it became obvious that the two sides were going to come together,” said Koltin.

So this appears to be awkward. Did M&P think this through or even read the non-solicitation agreement before they told H&RB/RSM to drop dead? Did they legitimately think they could get by just offering the audit services for two years?
While we were rooting for the firms to make nice, there may be some of you that are less enthusiastic about the House of McGladrey being all under one roof again. We’d like to hear from the troops on the ground about this whole thing. Feel free to get in touch or just put it out there in the comments.

McGladrey & Pullen Partners Vote to Reconcile with Block [Web CPA]

UPDATE: The full press release can be seen here.

The post Web CPA: McGladrey & Pullen Partners Vote to Go Back to H&R Block, RSM McGladrey appeared first on Going Concern.

“We are very optimistic that this is going to be settled within a few weeks,” Block CEO Russ Smyth told investors during a meeting after Block released its second-quarter financial results earlier Tuesday.
He warned, however, that while it appeared the matter would have a good outcome, “We are not across the finish line yet.”

We’ll go on record that we’re rooting for the firms to get back together. Reconciliation makes for a heartwarming story during the holiday season. Especially since we’ve learned that not even an insanely rich celebrity athlete and a Swedish model don’t seem meant to be.
Prior to any official reconciliation between the firms, several questions are worth mentioning: 1) What’s Natalie’s opinion? 2) Is RSM buying M&P a huge rock, a house in Sweden, or performing some other demonstration of materialistic love as part of the reconciliation? 3) How will the make-up sex work? Will M&P even go there? D) See #1.
If you’ve got thoughts on any of these questions or if the RSM/M&P troops have feel like talking about their firms’ chances of making it work, discuss in the comments.
H&R Block Subsidiary Nears Settlement With Auditor [AP via ABC News]
Prior GC Coverage of RSM McGladrey/McGladrey & Pullen Drama:
RSM/McGladrey & Pullen: ‘Breaking Up is Like Pushing Over a Coke Machine’
McGladrey & Pullen Might Want to Think This Whole Divorce Thing Over
H&R Block is Not Letting McGladrey & Pullen Leave Until They Talk About This
McGladrey & Pullen Doesn’t Love H&R Block Anymore

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[FINS Reporter Kyle] Stock: Did RSM downsize during the crisis?
Moss: We really match our client service work force to the demand in the marketplace, but we don’t really comment in specifics on the changes in our work force from year to year

Layoffs are simply none of your beeswax, thankyouverymuch. Accordingly, we invite the members of the RSM/M&P fam to expand on Ms. Moss’ particular account of the layoff situation. Don’t make us prod.
We also found the following exchange especially interesting (our emphasis):

Stock: Did RSM see the global financial crisis as an opportunity to grab market share?
Moss: We track closely with our clients, so as they feel the impact, we feel the impact. But it does open up the question: ‘Are there more sectors we should be focusing on?’ And on the talent side, due to circumstances at other firms, there are a lot of people who we were able to approach. We’ve definitely done a lot of experienced hiring in the past year.

Now maybe we’re taking the above statement wildly out of context but what could Ms. Moss possibly be suggesting? Circumstances like, the banishment of Google Talk, the shameful denial of live streaming music, or bonuses in the form of tighty-whities? If we’re way off base here, feel free to comment with your own interpretation.
Annnnd speaking of undies, we’re more than a little disappointed that FINS passed up on the opportunity to inquire about the potential marketing rivalry that RSM that has on its hands. For now we’ll assume that RSM is counting on PwC’s continued dismissal of advertising genius and the RSM will enjoy it’s success of effective advertising (despite not mentioning it at all).
RSM McGladrey’s Kimpa Moss: A Nonstop Talent Hunt [FINS]

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The post New McGladrey Directors to Check Out Natalie Gulbis? appeared first on Going Concern.

“I think what you’re seeing now is just the flexing of some muscles,” [said Koltin.] “What (RSM’s termination notice) does is reinforce what [RSM Parent, H&R] Block said before, which is that, if need be, they will go to the mat with them on this one.”

That’s a fine assessment but we all know what this is really about. The Gulbis factor. RSM/Block can go on and on about ‘administrative services’ and whatever hell else they think that’s in M&P’s ‘best interest’ but we understand the unmentionable factor here.
Sooner, rather than later, M&P had better come to their senses in this whole mess and realize that being associated with Natalie Gulbis is by far the best thing any accounting firm has been able to pull off since…yeah, pretty much anything.
McGladrey, RSM move to reconciliation [KCBJ (Subscription Required)]

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We admit that we know nothing about promotion or advertising but if you’ve got opinions on which firm seems to have found the better golfer to sponsor, discuss in the comments.

The post Firms Sponsoring Golfers – An Analysis appeared first on Going Concern.