Professional Services Monitor: Today

WebCPA.com last night reported that BDO Seidman’s fiscal 2009 revenue fell by 5.9%.

BDO Seidman said its revenue for the fiscal year ended June 30 fell 5.9 percent to $620 million from last year’s revenue of $659 million.

However, the firm said its tax business line experienced revenue growth of 6 percent. BDO’s assurance business fell 9.1 percent and its BDO Consulting business decreased 15.3 percent from last year’s high. Over the past four fiscal years, BDO Seidman has averaged double-digit growth of 10.2 percent.

The PCAOB today voted to adopted a rule, Auditing Standard No. 7, that “provides a framework for the engagement quality reviewer to objectively evaluate the significant judgments made and related conclusions reached by the engagement team in forming an overall conclusion about the engagement.” In other words, according to CFO.com, the rule prohibits lower-level employees for conducting final reviews of financial statements.

Under the new Auditing Standard No. 7, such reviews — which the PCAOB officially calls “engagement quality reviews” but are often referred to as concurring reviews — are expected to be done by a partner or other high-level auditor who hasn’t worked on the audit under review.

To further put the onus on reviewers to take the evaluations seriously, the PCAOB also today issued for comment a concept release to gauge whether concurring reviewers should be required to put their signatures on audit reports.

The PCAOB has struggled to explain how these reviews should be conducted. After the original proposal was made in February 2008, finance executives worried it would lead to “re-audits” rather than just a final backstop to an audit team’s work before signoff on a client’s financial reports.

If approved by the SEC, the rule would take effect for fiscal years beginning on or after December 15, 2009.

Separately, but in the same press release, the PCAOB is seeking public comment “on a Concept Release to consider the effects of a potential requirement for the engagement partner to sign the audit report.”  That is, instead of the audit opinion simply reading, “PricewaterhouseCoopers LLP, New York, NY,” Partner & CPA Jane Smith would also need add her name to the opinion.  Partners personally signing opinions is not uncommon in other countries and jurisdictions.  We encounter this often in Scandinavian countries, for example this annual report from the Finnish company, Outokumpu.

This morning on my Facebook advertising sidebar, which I actually read more often than not, an ad for the AICPA’s FeedThePig.org site appeared.

FeedThePig.org is the AICPA’s financial literacy initiative, particularly aimed at younger people.  From its about page:

I’m “spokespig” Benjamin Bankes, here to remind you to feed your piggy bank.

This website is here to help you do just that. Here, you’ll find fun tools, a quiz, tons of tips and other resources. They will all help you think through your spending and saving habits, identify ways you can start saving and commit to making changes that will reduce your debt and grow your savings.

The spokespig himself itself is creepy in the same way the Burger King King scares the living hell out of my kids while also making them want a Whopper Jr.

Who’s VS. Creepier?

I mention this because financial education and literacy is important to me.  It’s crucial importance to successful adult life is woeful neglected by our educational system.  I also think that the accounting industry is suited to take an active role in educating young people outside of the classroom.  I know that FeedThePig.org has been around for some time, and I am glad to see that they are advertising themselves in the social media market.

This afternoon, we have posted a new list to our Audit Market Share list section, a list of the Department of Defense’s largest contract recipients for FY2008.  We have followed this list for 15 years, and this is the first time we can recall that any of the Big 6/5/4 have appeared in the top 100.  Furthermore, BearingPoint received nearly $750 million in defense contracts, some of which will presumably go to Deloitte and PwC in Fy2009, all other things remaining equal.

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Our 2009 Big Four Annual Report is now available for immediate purchase and download. More information at www.amesrgi.com/products_annualreport.asp