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Articles on this Page
- 05/17/17--03:13: _Keeping Praxity fir...
- 05/17/17--07:47: _Puerto Rico debt cr...
- 05/25/17--08:04: _Human rights in the...
- 05/31/17--03:39: _Paragon Audit & Con...
- 06/01/17--01:57: _Age is just a number
- 06/01/17--04:14: _What challenges fac...
- 06/05/17--01:35: _New integrated repo...
- 06/06/17--04:25: _Not a usual Monday ...
- 06/06/17--05:36: _Is the Puerto Rico ...
- 06/15/17--02:27: _National accounting...
- 06/15/17--02:24: _Aboriginal-owned co...
- 06/19/17--08:49: _Plante Moran Receiv...
- 06/21/17--03:18: _Connectivity and co...
- 06/21/17--06:40: _Marketing achieveme...
- 06/21/17--08:59: _Bryan Welsh Named L...
- 05/17/17--07:47: Puerto Rico debt crisis sends shockwaves around the world
- 05/25/17--08:04: Human rights in the modern business landscape
- 05/31/17--03:39: Paragon Audit & Consulting, Inc. Joins BKD
- 06/01/17--01:57: Age is just a number
- 06/01/17--04:14: What challenges face small to medium-sized practices?
- 06/05/17--01:35: New integrated reporting guidelines boost standards
- 06/06/17--04:25: Not a usual Monday – but Hate will never win!
- 06/15/17--02:27: National accounting firm expands presence in Brockville
- 06/15/17--02:24: Aboriginal-owned consulting firm joins MNP
- 06/21/17--03:18: Connectivity and confidence is about trust
- 06/21/17--06:40: Marketing achievement awards for BKD and Mazars USA
Praxity participant firms frequently distinguish themselves not just through their business achievements and client service, but also through their engagement with the communities they work alongside – often contributing imaginative support or funds for local organisations or charities.
As we’re keen to share news of these initiatives with a wider audience, we’ll now be publishing reports of these charitable and community activities here on our news channel – promoting it actively through our monthly In The Loop email feature.
Here we celebrate some of the most recent activity we’ve heard about. You can contact us with your own news and ideas on email@example.com.
To celebrate 150 years in business, Albert Goodman’s Partners and staff have been busy fundraising and volunteering throughout the year and have raised more than £6,800 for six deserving charities.
Aronson Foundation’s Denim Fridays allows Aronson employees to wear denim in the office on Fridays by providing a small contribution towards its Charity of the Month. The Foundation matches the funds collected each month (up to $1,000) for the charity, which is nominated by employees who have a personal involvement. Recently they supported A Wider Circle and Shepherd’s Table.
To raise awareness among local women that heart disease is their #1 health threat, Dixon Hughes Goodman and the DHG Foundation encouraged employees and partners to ‘go red’ earlier this year, raising $6,000 for the American Heart Association for education and research around heart disease and stroke.
DHG has also been promoting and recognizing inclusion and diversity across the firm, celebrating Black History Month and Women’s History Month with a campaign highlighting DHG’s people and their stories, and promoting discussion about careers and flexibility.
Garbutt + Elliott recently revealed the beneficiaries of its fundraising and support for the current year. Having reached last year’s fundraising goal of £15,000, two Yorkshire charities have been chosen as the firm’s charity partners this year – York Against Cancer and the Leeds Children’s Hospital Appeal.
The fallout of Puerto Rico’s lurch towards bankruptcy while facing debts of $74 billion is set to be felt far beyond the island’s 3.4 million inhabitants.
Investors worldwide will be watching events with baited breath as a complex process begins to restructure the island’s debt after its government initiated an insolvency process earlier this month.
Accountants, financial institutions and governments of debt-ridden countries with low credit rating around the globe will be closely watching developments in what could be a landmark case in the management of debt relief, and a potential disaster for creditors.
The process that Puerto Rico began on 3 May is a form of bankruptcy tailored for governments. A federal oversight board which supervises the financial affairs on the island filed in US courts for what is essentially bankruptcy relief to protect against its enormous debt burden and bondholder lawsuits. It would be the largest such insolvency in US history and goes way beyond the $18 billion bankruptcy filed by Detroit in 2013.
What makes the Puerto Rican situation so extraordinary is not just the scale of the debt, which amounts to 70% of its GDP and includes $49 billion in pension obligations, but the fact that nobody knows what’s going to happen.
Commenting in The Guardian on 5 May, Eric LeCompte, executive director of Jubilee USA, an NGO that focuses on debt relief, said the bankruptcy process was the first of its kind to deal with public debt, adding: “It’s unique in that it may set a precedent for how sovereign debt can be negotiated in the world.”
LeCompte believes the restructuring process could become an example of how best to manage debt relief, “promoting transparency and enforcing audits so we have a better understanding of what happened in Puerto Rico and how we got into this mess”.
Creditors are less impressed. The investors apparently bought bonds in the belief that Puerto Rico, like US states, would not be allowed to fail and the debt would be protected. However, many of the agencies that issued government debt on the island missed payments, putting them in default. Voluntary negotiated settlements have proved difficult due to the complexity of the bond arrangements, with multiple agencies and different securities and collateral. Now creditors are fighting over who gets what and it’s not clear whether their demands will be in any way met.
So how did things get so bad in the US territory?
According to the New York Times, the filing cites that Puerto Rico is “unable to provide its citizens effective services” because of its huge debt. The problems are reported in mainstream media as representing a culmination of years of economic stagnation and bad policy, a crumbling infrastructure, poor public services, combined with the departure of multinational firms and a significant ‘brain drain’ to the US mainland which has left 45 per cent of Puerto Ricans living below the poverty line.
Many politicians and historians attribute the crisis to changes to the tax code in 1996, when incentives for doing business on the island were slowly phased out, according to Eric Platt writing in the Financial Times. Economic growth slowed and financial regulators were forced to seize several banks. The government continued to borrow to fund operations, running large budget deficits.
Since Puerto Rico is not a US state, it does not have access to typical bankruptcy protections. Instead, an oversight board was empowered under legislation known as the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, to submit a plan to a court with the power to impose a settlement. Puerto Rico must prove that it attempted good faith negotiations with its creditors before the board can sign off what is known as a Title lll filing.
While the debt-cutting legal process could provide much-needed hope and improved services for Puerto Ricans, it could result in severe losses for creditors and may take years to sort out.
It also raises questions over future investment in cash-strapped cities, states, territories and countries. Investors are likely to become more reluctant to loan money to governments if this form of bankruptcy becomes a precedent.
Watch this space!
What does the Puerto Rican situation mean for the USA and the rest of the world?
Could it really be a landmark case or is it a one-off?
Find out what Praxity participant firms think in our exclusive article coming soon.
Globalisation has been a powerful force in recent decades and has expanded the reach of many businesses. Because of this, the duty of organisations to take a responsible approach to human rights issues and the upholding of these standards has never been greater.
However, several competing corporate concerns have stolen the spotlight from human rights in recent years. From the environmental impact of businesses, such as ongoing logging activities and the subsequent deforestation of parts of the Amazon Basin, through to illegal criminal activities like major money laundering and fraud cases that grab the headlines, the issue of human rights in the business sector has been marginalised in much of the media.
It is now essential that businesses take seriously their role in both policing and supporting basic human rights, as corporate social responsibility (CSR) programmes can play a crucial role in raising the profile of human rights successes in future. Here we offer an overview of the issues as they stand today, looking at why business leaders must now understand that addressing human rights abuses throughout their operations should be a non-negotiable priority.
Ensuring inalienable and indivisible rights for all
Going back to the start, the UN drafted the International Bill of Human Rights in December 1948 in the aftermath of the horrors of World War II. The Universal Declaration of Human Rights has become an essential legislative driver in the fight to ensure rising standards of welfare worldwide.
Today, the UN's Office of the High Commissioner uses the 30 principles of this declaration as its framework for the laws and obligations surrounding human rights. The principles include:
• The right to life, liberty and security of person
• Slavery and the slave trade shall be prohibited in all their forms
• Freedom of opinion and expression
• Freedom of peaceful assembly and association
• The right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment
• The right to equal pay for equal work
• Right to rest and leisure, including reasonable limitation of working hours
Importantly, the Declaration sets out the universal nature of these rights and entitlements, defining them as equal and non-discriminatory. In addition, it stresses that individuals should ensure their own rights and freedoms do not impinge on the rights of others.
However, as there is no binding law that governs international businesses in regards to their stance on human rights, the obligation for enforcement has, until recently, rested solely within the realm of the state – the role of business in upholding rights has been unclear.
This has left something of a regulatory vacuum, and the mobility and increasing reach of large businesses has meant that corporations which failed to achieve the expected standards have gone largely unchallenged. This was the clear conclusion of a report published in by Amnesty International in 2016, which argued that a lack of regulatory oversight by the UK government was allowing many of the country's largest telecoms providers to ignore their human rights responsibilities.
Obstacle Course: How The UK's National Contact Point (NCP) Handles Human Rights Complaints Under The OECD Guidelines For Multinational Enterprises reported that 60 per cent of human rights complaints submitted to the NCP in the last five years had not been investigated.
Amnesty International has called for a stronger regulatory response to possible offences across the telecoms sector and for businesses themselves to face sanctions.
Addressing the need for accountability
Although the state remains the primary guardian of human rights in the eyes of international law, efforts have been made to make businesses more accountable.
Unveiled in 2012, the UN Human Rights Council's Guiding Principles on Business and Human Rights has helped to provide a framework for ensuring global entities now adhere to a set of international standards in the upholding of human rights. It builds on six years of development of the UN's Protect, Respect and Remedy framework, which aimed to "identify and clarify standards of corporate responsibility and accountability for transnational corporations and other business enterprises with regard to human rights".
The primary aim of these documents has been to ensure greater accountability for businesses when moving their operations to countries where human rights abuses remain commonplace. It means that in states where a combination of weak governance and little respect for human rights can lead to offences, businesses themselves can now be held responsible.
The recent Institute of Human Rights and Business's Corporate Human Rights Benchmark (CHRB) 2017 examined 98 of the largest publicly-traded businesses in the world across three industries: agricultural products, apparel and extractors of natural resources.
It measured businesses against key criteria:
• developing the correct internal mechanisms to conduct exacting due diligence
• recognition that workers should not be expected to bear the cost of competitive pricing
• effective remediation for worker violations.
The exercise found only six of the benchmarked companies achieved scores above 50 per cent, and marked those that fell short as potential targets for litigation and prosecution if improvements in worker rights are not seen in the near future.
These developments come as the UN's guiding principles make clear that organisations have an explicit ‘duty to protect’ all who work for and with them in the wider supply chain, ensuring a legal obligation now rests with business leaders to protect their workers from human rights abuses.
Realities of working in a global marketplace
The reality for businesses operating across the world is that their operations have an impact on many diverse communities. They therefore have a board and complex set of obligations to ensure the measures and protections that they now implement are as robust as possible in addressing potential violations in such varied jurisdictions.
Human rights violations in business can include
• poor and unsafe working conditions
• use of child labour
• low pay
• human trafficking
• lack of visibility into supply chains that could mask offences.
An increased focus on CSR can play a crucial role in highlighting, monitoring and addressing many of these unsatisfactory, illegal working practices.
The Business & Human Rights Resource Centre cites numerous examples of organisations taking steps to address possible human rights offences, including:
• Building materials provider LafargeHolcim announced in May that it is acting to address reports of child labour at the operations of its subsidiary Hima Cement in Uganda.
• UK supermarket chain The Co-op has released a damning statement on modern slavery within the supply chain. The company announced that it is working diligently to stamp out issues of human trafficking and worker exploitation at all of its partners.
• Retail giant Walmart has launched an investigation into claims of forced labour conditions at a supplier in China, after a customer reportedly uncovered a note describing long working hours, beatings and malnourishment of workers at a prison in the Chinese region of Guangxi. The note was contained in a Walmart purse purchased in Arizona.
Highlighting the breadth of issues that businesses can now face, these examples show that companies must therefore now be prepared to take forthright steps to ensure compliance on all matters of human rights or face legal action.
Engagement and implementing standards
Corporations must understand that their practices have a lasting impact on communities in all nations in which they operate. For this reason, the issue of human rights and CSR have now become intrinsically linked.
Organisations need to develop an in-depth understanding of their existing position on human rights. When issues arise, companies must be able to demonstrate they have taken all necessary steps to pinpoint potential areas of concern and to act appropriately to mitigate this risk. For companies operating within the accountancy sector in particular, this requires due diligence into client partnerships and supply chains, and ensuring all aspects of corporate structure are transparent and fully understood.
Professional services firms can help organisations reduce risk in relation to human rights issues, as well as helping them overcome the challenges of implementing new standards, policy and practices. Collaborative relationships with full disclosure lie at the heart of this process. The benefits include stronger consumer buy-in to brands that embrace their responsibilities, with increasing levels of trust and int6ernal measures to handle risk all contributing to performance and growth.
An imaginative response to adopting higher standards of human rights has been seen in many industries, and events like the Second Business and Human Rights Research Summit held in Switzerland have brought together researchers and academics to discuss these ongoing efforts to tackle abuses.
The Summit highlighted a continuing call for more effective dialogue between businesses and the structures that support them at the international, regional and domestic level. Participants also debated human rights due diligence in cross-border corporate ventures when local communities object to such plans – such as in the mining industry.
Organisational engagement and the need for more corporate action on human rights is gaining prominence in academic, business and regulatory circles. Understanding the impact of CSR activities on the issue of human rights is becoming more important than ever.
Why should businesses take action?
With the reach and impact of many businesses extending further and further – geographically, virtually, culturally – the creation of implementable standards and ensuring businesses question their own methods for ensuring that human rights are effectively upheld is more important than ever. Safeguarding the rights of the individual, while simultaneously supporting stronger global partnerships and improvement in business performance, should be the goal of all responsible organisations and regulators, wherever they are based or operate.
Watch this space!
What are the distinctive challenges and opportunities for accountancy firms?
Find out from Praxity participants in our exclusive article coming soon.
BKD CEO Ted Dickman is pleased to announce that Paragon Audit & Consulting, Inc. will join the firm effective June 1, 2017.
“We want to extend a warm welcome to our new BKD team members,” Dickman said. “Paragon’s commitment to client service and true expertise will help us achieve our goals as we move forward.”
Paragon—a Denver-based firm specializing in internal audit and compliance—will grow the capabilities of both BKD’s National Advisory Services (NAS) region and Enterprise Risk Solutions (ERS) practice.
“With the addition of Paragon, our ERS practice will double in size,” said ERS Managing Partner Angela Morelock. “The combination strengthens BKD’s internal audit resources and provides Paragon enhanced growth opportunities and market presence throughout BKD’s geographic footprint.”
Paragon’s staff will join BKD’s downtown Denver office in the 1801 California building. With approximately 2,600 personnel—including more than 270 partners—BKD provides a wide range of assurance, tax and accounting outsourcing services.
“This is certainly a win-win situation for all involved,” says Galante. “We’re happy to be joining BKD and using our knowledge in internal audit to help better serve our clients and grow the firm.”
BKD has 35 offices in 16 states, and fiscal year 2016 revenues were $550 million. The firm also serves clients around the world as the largest U.S. member of Praxity, AISBL, a global alliance of independent firms that serves the dynamic needs of multinational clients.
BKD, LLP, a national CPA and advisory firm, can help individuals and businesses realize their goals. Our approximately 2,600 dedicated professionals provide solutions for clients in all 50 states and internationally. BKD and its subsidiaries offer a variety of tax, accounting and consulting services, and we combine the insight and ideas of thought leaders in multiple industries. Learn more at bkd.com.
Praxity, AISBL, a global alliance of independent firms, enhances BKD’s ability to serve the dynamic needs of multinational clients. Praxity™ provides the gateway to tax, assurance and consulting services delivered by alliance firms committed to the highest standards required in international business.
It was a strange week. In fact, more accurately, you could say it was a week of extreme contrasts.
It started with some friends, my wife and I enjoying the wilds of Dartmoor. The Monday was my wife’s birthday with a few family celebrations and on the Wednesday I went to hospital, to have the metal that had enabled the surgeon to reconstruct my injured arm, removed. I was even presented with the plate and screws afterwards as some sort of bizarre trophy. So, from Thursday onwards I was at home with an active, if somewhat drugged, mind but otherwise ‘armless.
Which, you may have noticed, leaves Tuesday unaccounted for.
Tuesday’s story started some six weeks ago when I received a card in the post.
The Lord Chamberlain is commanded by Her Majesty to invite Mr and Mrs Graeme Gordon to a Garden Party at Buckingham Palace.
So, on Tuesday, duly kitted out in tail coat and top hat and accompanied by my wife in a beautiful new dress and hat, we went to tea with The Queen!
While I shared this privilege with some 8,000 others from all walks of life, it was unique for me.
It was special in so many ways – the diversity of people and clothes, from kilts to kimonos, from Canadian Mounties to New Zealand sailors and from top hats and tail coats to shiny suits and T-shirts.
However, perhaps the most special and telling aspect was when Her Majesty, The Queen and other members of the Royal Family entered the ‘fray’. They welcomed a few hundred individual guests chosen at random, but also involved as many others as they could. What struck me, however, was the warmth and enthusiasm of this lady and her husband, The Duke of Edinburgh. You should remember The Queen was born in 1926 and is, as I write, 91. The Duke of Edinburgh is 95. Both were unfailing in their work.
Unlike many of her European counterparts, The Queen has made it plain that she will not abdicate. She made an oath to the people of the Commonwealth before God at her coronation in 1952, she says, and will not break it.
“The things which I have here before promised, I will perform and keep. So help me God”
Thus, at 91 she is still effectively working a full day. She may have delegated some of the more arduous duties or those that need to be performed simultaneously, to other key members of The Royal Family, but she will not cease her role as monarch until she is no longer able to perform it.
How many of us can say we have that level of absolute commitment to the role given to us?
I believe that even the staunchest republican would acknowledge The Queen’s commitment to the Commonwealth and her role, and it would be hard to suggest that she had not served those within her realm to the very best of her ability.
So, 24 hours before I went for surgery, I had a very tangible example of the level of commitment you should arguably give to any role you have committed to. Whether as a parent, employer, employee, carer or politician, we have no excuse for doing a half-hearted job. I will remember this 91-year-old true lady’s example of doing it ’right’.
Firms must overcome a range of challenges in the coming five years to ensure their long-term survival.
In the current economic climate accountancy firms face an array of challenges, from new binding regulations, to increasing competition within the sector.
Research published as part of the International Federation of Accountants' (IFAC) Global SMP Survey for 2016 has now revealed the extent to which small to medium-sized practices (SMPs) must adapt their strategies in the coming five years, warning that failure to offset these risks could impact the long-term viability of many businesses.
Based on the responses of more than 5,000 SMPs in 164 countries, the report found that the number one challenge for accountants at present lies in 'attracting new clients', as global competition continues to rise – an issue for 46 per cent of respondents.
In joint second place for SMPs was 'keeping up with new regulations and standards' and 'experiencing pressure to lower fees' (41 per cent). This was followed by the 'ability to differentiate themselves from their competition' and 'rising costs' (both at 39 per cent).
Other risk factors that made it into the top ten included:
• development of new technology
• serving clients operating internationally
• personnel and staffing issues managing cash flow and late payments
• retaining existing clients and succession planning
Overall, IFAC's report highlights the wide range of issues that organisations will need to overcome to ensure stable and long-term development in the coming years.
With almost half of all respondents now pinpointing the need to bring in new business, more effectively manage their finances and adapt to a changing regulatory landscape, addressing these key risk factors must now be a priority.
You can find IFAC’s survey report at http://www.ifac.org/publications-resources/2016-ifac-global-smp-survey-report-summary
Integrated reporting enables businesses to develop key insight into their strengths and weaknesses, improving strategy and planning for accountancy firms.
A new international framework on integrated reporting (IR) for accountancy professionals will be introduced in 2018. IR encourages companies to report on how they create value in the broadest sense and it will have a significant impact on corporate governance and reporting practices for many firms.
Developed by the International Integrated Reporting Council (IIRC), the new guidelines will help accountants to demonstrate increased value to their clients by developing a "clear, concise, integrated story" that links together all the resources at their disposal. It is helping businesses to think holistically about their strategy and planning, ensuring they can make better-informed decisions and manage key risks to build investor and stakeholder confidence.
In response, ACCA has published a new report examining the ongoing efforts of organisations to implement IR protocols. It found that positive progress is now being made, with 71 per cent of businesses gaining new insight into their organisation's strategy through IR and 64 per cent able to highlight the specific aspects of their business that differentiate them from their competitors.
However, with time now ticking on IIRC implementation, ACCA Corporate Reporting and Tax Manager Yen-Pei Chen has also outlined a series of steps that businesses can take to prepare themselves for the new global framework. These include:
• identifying champions within your business –¬ who are the individuals to push forward with IR implementation?
• adopting a multidisciplinary approach –¬ breaking down silos by including different teams and departments in IR.
• demonstrating board commitment –¬ discussing IR’s benefits at the most senior levels of the business.
• setting clear expectations – understanding that IR practices will evolve over time.
Ms Chen goes on to explain that IR relates to much more than basic corporate reporting, allowing organisations to develop a stronger understanding of what it is that sets them apart from their contemporaries.
It enables accountancy practices to work to their strengths to engage new business and add value to their clients. More and more firms are likely to be adopting IR practices in the coming years.
You can read more of ACCA’s findings and recommendations at http://www.accaglobal.com/us/en/technical-activities/technical-resources-search/2017/april/insights-into-integrated-reporting.html
Today is a day in my annual calendar that I usually look forward to. I take almost a week of annual leave to build, or help build, an outdoor set for the Shakespeare theatre company I belong to. But not this day. It so happens that we are quite far ahead, and the weather is not playing ball.
So, I have time to write my fortnightly blog. However, I beg your indulgence. Normally I talk about something which has happened to me recently and an allied ‘soft skill’.
Not today. Today is 5 June 2017. Two days after the terrorist tragedy at London Bridge and Borough Market, two weeks after the atrocity in Manchester and only a few months after the attack in Westminster. So, if you excuse me I am not going write about my normal subjects.
In the true lifetime of this planet it is not so long ago that this and most other countries that consider themselves ’civilised’, killed and maimed in the name of religion or national pride. In my opinion it was not justified then, it is not justified now.
I know of no religion which sanctions the killing of innocents. Not Islam, not Christianity, not Judaism, not Buddhism, not Hinduism, not Rastafarianism, not Daoism … need I go on?
This weekend’s terrorist act hit very close to home. It happened in streets that I had travelled regularly with my wife – most recently only two days before – and exactly where we had celebrated my son’s birthday last year.
It also directly affected someone in the Praxity executive office family. The husband of one of the team is a ‘first-responder’ who was called to the scene. He and his colleagues, who, unarmed, run to help people, are the true heroes in this life.
The natural response to such an act of pure brutal terrorism for many is one of hate and anger. But I believe these are the very reactions desired by the instigators and those propagating more such barbaric acts.
It takes courage and conviction not to be cowed. To carry on as before, neither turning on ourselves nor our neighbours looking for scapegoats. I would urge everyone to fight the temptation to hate for, as Martin Luther King understood, ‘Hate cannot drive out hate; only love can do that.’
I believe it’s people not religion that is at the root of this evil, and the best way to defeat this level of evil is with love, or at least friendship. It is easy for me to write and say this, sitting in my comfortable office chair, safe and warm. So, I will leave the last words to two individuals who were affected by such acts of terror, albeit decades apart.
Gordon Wilson was at the Remembrance Day parade at Enniskillen in 1987, when a bomb injured him and killed his daughter Marie. He became an ardent peace campaigner and his actions contributed to ending the Troubles in Northern Ireland. The BBC later described his on-camera response to the atrocity as a turning point which shook the bombers to their core. He said ‘I bear no ill will. I bear no grudge’, and he forgave the bombers.
Finally, from the family of Chrissy Archibald – one of the victims of this weekend’s tragedy – who requested that she be honoured by people working to make their communities a better place: ‘She would have no understanding of the callous cruelty that caused her death’.
Therefore, to you, my friends, I say be safe, be kind and may your God go with you in peace.
By Ian Lavis, on behalf of Praxity
With various states, territories and governments around the world teetering on the verge of economic meltdown, the bankruptcy ‘plan’ of Puerto Rico is under intense scrutiny.
The decision by the Puerto Rican government to file for a form of bankruptcy in the face of debts of US$74 billion has set in motion a complex debt restructuring process to be decided in the US courts.
While the Puerto Rico case is unique in many ways, the point at which the island’s government has declared near bankruptcy – with arrears worth 70% of its GDP – highlights the plight of debt-ridden governments around the world.
Could Puerto Rico eventually become a benchmark for the management of public debt worldwide?
Eric LeCompte, executive director of Jubilee USA, an NGO that focuses on debt relief, seems to think so. In an article published in The Guardian on 5 May, he says the restructuring process “may set a precedent for how sovereign debt can be negotiated in the world”.
Experts from Praxity participant firms are not so sure. William Henson, Partner, International Tax Services, at US accounting firm Plante Moran, says it remains to be seen whether the US territory will become a benchmark case, adding: “Puerto Rico could be viewed as more of a ‘one-off’ situation given its sovereign status”.
Commenting on the US situation, William says: “States would need enabling legislation to even consider going down the same path. Legislation that is unlikely to come from this Congress or President. Even if it were possible, it is doubtful that this would prove to be a panacea for strapped state and local governments. The economic fallout for Puerto Rico could be significant”.
Puerto Rico is by far the biggest debt restructuring to occur in the US after Detroit filed for US$18 million bankruptcy in 2013. The difference with Puerto Rico is the island represents a US territory as opposed to a state or municipality.
“Currently states can’t declare bankruptcy,” William explains. “Puerto Rico was also unable to force creditors to restructure debt until Congress passed the PROMESA act which President Obama signed into law on 30June, 2016. If states were allowed to declare bankruptcy, or restructure like Puerto Rico, then Illinois, New Jersey and Connecticut would be considered most likely to do so. However, that is very unlikely given the current make up of Congress.
“Municipalities can declare bankruptcy, Detroit being the largest example. However, bankruptcy can be expensive and may raise interest rates for the relevant state. It’s more likely that the state would work hard with the local government to help avoid another large municipal bankruptcy.
“Interestingly there is a proposal to amend the Bankruptcy Code, which is Federal law, to allow state governments to reform pension plans even where those pensions are protected under the state’s constitution. This wouldn’t allow states to restructure debts. It would face unique political hurdles as lenders and creditors would be held harmless and the cost would be borne entirely by pensioners.”
Can parallels be drawn between Puerto Rico, where the government sees bankruptcy as a last ditch attempt to sustain public services, with other debt-ridden countries? A quick glance at GDP/debt ratios and credit ratings around the world shows that many economies are in a perilous state, from Argentina and Venezuela to Greece and Pakistan, but each case is very different.
In Argentina, for example, the burden of public debt goes far beyond the recent Puerto Rico turmoil. Patricia Diaz, Partner at Praxity participant firm Shilton, Weyers and Associates in Buenos Aires, says: “Our country has a history of restructuring of public debt, having negotiated more than once”.
In 2001, Argentina faced crippling public debt and an unprecedented level of unemployment and poverty. At the peak of the crisis, interim president Adolfo Rodriquez Saa announced the suspension and deferral of public debt payments, which totalled US$144,453 million.
Patricia explains: “The deferral of payments of a portion of the public debt was authorised and endorsed by the National Congress through successive budget laws approved over subsequent years”.
A key stage in Argentina’s debt restructuring was a rescheduling of obligations with the IMF, World Bank, Inter-American Development Bank and other institutions in what was called the Argentina debt swap. In 2004, total external debt amounted to US$178 billion. However, nearly US$81.8 billion in securities held by private investors remained in default. Several complex bond schemes were introduced to reduce the debt from 153.6% of GDP in 2003 to 34.7% in 2010, but disputes with creditors continued. It was only in 2016 that the current government of Mauricio Macri reached a final settlement to end almost 15 years of debt litigation.
Whether Puerto Rico follows such a tortuous route towards solving its debt crisis remains unclear but there is no doubt that these are difficult times for inhabitants of the island and creditors. Governments, auditors and investors around the world will be watching very closely as events unfold.
MNP LLP, one of Canada’s largest national accounting and business consulting firms, announced today that Brockville-based firm, McDonald Thorne and Associates (MTA) will merge with MNP, effective July 1, 2017. While MTA was looking to deliver more specialty services to clients, MNP was looking to add resources and expand its presence in the Brockville area with a well-respected and client-focused firm that shares the same values.
“Long a manufacturing base for eastern Ontario, Brockville is successfully adapting to disruption and new economic realities by refocusing on other industries. This proactive approach and willingness to embrace change is what makes Brockville one of Canada’s fastest-growing economic hubs,” said Mike Dimitriou, Regional Managing Partner, Ottawa Region, MNP LLP. “As the Brockville business community continues to evolve, so does its needs for more specialty services. As an entrepreneurial focused firm, we, too, are constantly evolving to meet the needs of the business communities and this merger is a perfect example of how two firms can come together to benefit an evolving marketplace.”
MNP employs more than 3,500 team members in more than 75 full- and part-time offices coast-to-coast across Canada. In addition to tax and accounting expertise, MNP delivers a diverse range of advisory services, including consulting, enterprise risk, corporate finance, valuation and litigation support, succession planning, estate planning, insolvency and restructuring, investigative and forensic accounting, cross-border taxation and more.
MTA is an established firm of chartered professional accountants and consists of one partner, Hugh Thorne, and six team members, including Carl DeJong, who will also join MNP as a partner. MTA serves diverse industries, including clients in the agriculture and manufacturing sectors. Founded in 2002, the firm provides a wide range of accounting, tax and business advisory services in areas such as process improvement, valuations, succession services and more.
“As the marketplace evolves and business needs become more complex, we believe returning to the fold of a national firm with a local client service philosophy and greater breadth and depth of services and resources will serve our clients well,” said Hugh Thorne, Managing Partner, MTA. “MNP serves a diverse group of clients, including businesses in the fields of agriculture, technology and media, professionals, real estate and construction, and more — and truly understands both the region and our clients’ needs. We believe coming together will strengthen and deepen our existing leadership and offer our clients advice specifically tailored to their business so they can continue to evolve and overcome current business and industry challenges.”
MNP credits its strategic mergers and acquisitions, organic growth, value-added services and corporate culture for catapulting the firm to see unprecedented growth rates year-after-year.
“To maintain our corporate culture, we have been very strategic about who we invite to join our team,” explained Dimitriou. “We carefully guard our corporate culture, resulting in a low client and employee turnover, while attracting some of the brightest professionals in our industry. We are thrilled to have the MTA team join us in our efforts to help the Brockville area and business community achieve even greater success.”
“I have a lot of colleagues who have already merged with MNP and they are really happy with their decisions,” added Thorne, explaining what appealed to him about joining MNP. “In addition, the firm has a history of almost 60 years, serving a diverse range of clients, and has also been recognized as one of the 50 Best Employers in Canada by AON Hewitt for nine consecutive years. MNP has an organizational culture and values founded on an unwavering commitment to people; creating a great place to work and do business, where a healthy balance between home and work life are at the core of how business is run. Our team is truly excited to be a part of the MNP family.”
The MTA team will remain in their current location initially, before moving into MNP’s Brockville office once refurbishments have been completed.
About MNP LLP
MNP is one of the largest national accounting and consulting firms in Canada, providing client-focused accounting, taxation and consulting advice. National in scope and local in focus, MNP has proudly served individuals and public and private companies for more than 58 years. Through the development of strong relationships, MNP provides personalized strategies and a local perspective to help them succeed. For more information, visit www.mnp.ca.
For more information, please contact:
Mike Dimitriou CPA, CA, Regional Managing Partner, MNP LLP at 613.691.4200 or firstname.lastname@example.org
Hugh Thorne, CPA, CA, Managing Partner, MTA at 613.345.5490 or email@example.com
MNP LLP, one of Canada’s largest accounting and business consulting firms, announced today Aboriginal-owned and Aboriginal client-focused consulting firm, Calliou Group, will join MNP, effective June 1, 2017. While Calgary-based Calliou Group was looking for an opportunity to offer more specialty services to its Aboriginal clients, MNP was looking to add more resources and capabilities to serve Aboriginal communities; a growing and key client group for the firm.
“We are very excited to have the Calliou Group join the team at MNP,” said Clayton Norris, Vice President, Aboriginal Services. “Over the next 25 years, there will be many major development projects in Canada that will impact Indigenous communities. With the addition of Calliou Group, we have a greater ability to develop and implement innovative strategies and solutions for the benefit of Indigenous communities and all Canadians.”
Founded in 2008, Calliou Group has grown to become a strategic Aboriginal consultation specialist group for Aboriginal communities, government regulators and natural resource developers. With their extensive experience in working with Indigenous communities, they provide services such as land use studies, proponent discussions, review environmental assessments and reports on behalf of Aboriginal Nations, conduct internal ’duty to consult’ training, develop and implement consultation strategies for projects, manage and support Crown-Aboriginal consultation processes and help to oversee records of communication.
Calliou Group recognized joining MNP would offer them more resources and enhance the specialty services they can provide to their clients.
“What specifically drew us to MNP, was the fact that for more than two decades, MNP has partnered with over 200 Aboriginal communities across Canada and recognizes the needs of Aboriginal communities both in their unique planning and decision-making processes,” said Tracy Campbell, Founder and Owner, Calliou Group. “As the marketplace evolves, we believe becoming part of a national firm with an emphasis on local client-service delivery resources will serve our clients well and position us for continued success and growth. Coming together will strengthen and deepen our existing leadership and offer our clients business advice specifically tailored to their businesses and communities.”
MNP is one of the largest national accounting and business consulting firms in Canada and has more than 4000 team members from coast to coast. The firm currently employs 88 Aboriginal team members who have self-declared as being Indigenous and even more team members as part of their Aboriginal services team focused on the success of Indigenous communities. In addition to tax and accounting expertise, MNP delivers a diverse range of advisory services, including consulting, enterprise risk, corporate finance, valuation and litigation support, succession planning, estate planning, insolvency and restructuring, investigative and forensic accounting, cross-border taxation and more. MNP’s Aboriginal specialists assist their clients in a variety of key areas, including business and financial planning; audit and assurance; tax planning and recovery; economic development; consulting; governance; land claims support services; strategic and community planning; advocacy; feasibility studies for new enterprises; training solutions; remote bookkeeping and accounting; financial management, due diligence; and more.
“What the Calliou Group team brings to MNP aligns well with our commitment to Aboriginal clients and the existing services we provide,” explained David Woodman, Regional Managing Partner for MNP’s Alberta Advisory Services practice. “In addition to a similar set of values, Calliou Group has the knowledge and understanding of the complex regulatory and legislative frameworks for consultation, rights and lands, as well as their training and capacity-building experience. We now have the ability to assist our clients in a project from the earliest stages of development thanks to the addition of this skilled and knowledgeable team. It’s a win-win for our clients and our firms. We couldn’t be more pleased that Calliou Group will be joining the MNP family.”
The Calliou Group team of five will move into the MNP Calgary office in early summer of 2017.
About MNP LLP
MNP is one of the largest national accounting and consulting firms in Canada, providing client-focused accounting, taxation and consulting advice. National in scope and local in focus, MNP has proudly served individuals and public and private companies for more than 55 years. Through the development of strong relationships, MNP provides personalized strategies and a local perspective to help them succeed. For more information, visit www.mnp.ca.
For more information, please contact:
Clayton Norris CAFM, MBA, CPA, CMA, Vice President, Aboriginal Services, MNP LLP, at 403.263.3385 or firstname.lastname@example.org
David Woodman, MBA, Regional Managing Partner, Advisory Services, MNP LLP, at 403.263.3385 or email@example.com
Tracy Campbell, B.A., M.A, Founder and Owner, Caillou Group, at 403.796. 3899 or firstname.lastname@example.org
Plante Moran, one the nation’s largest certified public accounting and business advisory firms, received the 7th Annual ACG New York Champion's Award for CPA Firm of the Year from the Association for Corporate Growth New York and M&A Advisor.An independent panel of judges, representing a cross-section of the middle-market Private Equity industry, determined firm award winners by evaluating factors such as the firm's completed transactions, unique attributes, industry impact, and the detail of their accomplishments.
“We’re honored to be named CPA Firm of the Year,” said Michele McHale, the national private equity leader for Plante Moran. “We help our private equity clients make more informed decisions, achieve aggressive revenue and value growth goals for their acquisitions and better manage uncertainty –– and this award is a great recognition of that.”
Since formally launching in 2005, Plante Moran's private equity practice has grown to more than 10 percent of the firm’s annual revenue and has a team of 350 industry experts serving more than 300 private equity clients and 400 portfolio company clients. The practice continues to achieve double-digit client growth each year and, in 2016 alone, completed more than 200 transactions across the country. Additionally, Plante Moran has realized significant growth among private equity groups headquartered in New York as reflected by this award.
The ACG New York Champion’s Awards recognize outstanding achievements in the middle-market M&A industry. Award winners were announced at a ceremony at the Metropolitan Club in New York City on June 15. For a full list of winners, visit acg.org.
About Plante Moran
Plante Moran is among the nation's largest accounting, tax and consulting firms and provides a full line of services to organizations in the following industries: private equity, manufacturing and distribution, financial institutions, service, health care, public sector and real estate and construction. With a staff of more than 2,200 professionals, Plante Moran has been recognized by a number of organizations, including FORTUNE magazine, as one of the country's best places to work. For more information, visit plantemoran.com.
About ACG New York
ACG® New York, Inc., the founding chapter of the Association for Corporate Growth, is the largest association of middle- market deal making and corporate professionals in New York, with more than 1,000 members across all industry sectors. ACG New York facilitates long-term relationship building, driving middle-market growth. ACG's members are focused on investing private capital, which benefits the pension funds held by municipal workers, fire fighters, police officers, health workers and others who have dedicated years of service to the public good.
About The M&A Advisor
Since 1998, The M&A Advisor has been presenting, recognizing the achievement of and facilitating connections between the world's leading mergers and acquisitions, financing and turnaround professionals with a comprehensive range of services including M&A SUMMITS; M&A AWARDS; M&A CONNECTS™; M&A ALERTS™, M&A LINKS™ MandA.TV and M&A MARKET INTEL™. Visit www.maadvisor.com to learn more.
I write this having just returned from the Praxity Global Tax Conference in Lisbon. Not personally being a Tax Geek, I really can’t comment on the content except to say that the evaluation reports all seem to rate it highly.However, I can say that the one thing that stood out was how interconnected the delegates seemed. OK, some will have worked with each other already, but that’s not what I mean.
Currently, almost all professional firms will say they are their clients’ ‘trusted advisors’ – we even do that confidently within the Praxity Alliance – although as Mandy Rice-Davies said, ‘they would say that, wouldn’t they?’.
Being trusted by your clients is important for the continued success of your firm, for sure.
In today’s interlinked and cross-border markets, where even the corner shop has suppliers from other states or countries, it’s vital to be able to pick up the phone or drop an e-mail to a colleague in another jurisdiction and be confident they’ll support you and your client in the manner you would want.
Such confidence only comes with trust. And this form of trust is not generated by just looking up a name in a directory. Sometimes, you have to rely on a person you trust to connect you with a third person they trust in the jurisdiction you need. But this brings its own challenges.
How do you interact and create this key element of trust? Well, we are all now ‘slaves’ to e-mails, some (even amongst the powerful) to tweets or videoconferencing and, of course, the telephone in one form or another. These do generate varying limited levels of connectivity but, for me, absolutely nothing can compare with face-to-face meetings.
Further, I believe that deep trust and understanding can best be developed if you have shared at least one purely social encounter with a person face to face as well as interacted in a business environment. Perhaps a meal, a sporting event or some other enjoyable non-business-orientated episode.
Which is one reason why, when I travel, I always try to build in time to talk and socialise with my colleagues if at all possible.
Think about it. How often do you ‘bash out’ an e-mail to a colleague or friend or, more fashionably, send an update via Instagram, Snapchat or other social media?
Too often an e-mail can be misunderstood or misinterpreted. Even more likely with messages in social media – just think of what the Twittersphere produces.
When it would be much more effective to talk. Believe it or not, that is what phones, even mobile or cell phones, were initially invented for. Amazing that now we seem to use them for so many other things and forget their prime purpose. There was an old telecoms advertising strapline ‘It’s good to talk’. I totally agree, and I’d go a little further, especially in these days of computer-generated responses and at the dawn of AI.
‘It’s good to talk face to face’.
So, next time you are about to send an e-mail, snap or tweet, stop and think. Would a phone call be better? Better still, can I arrange to meet the person I’m sending this too and really discuss the issues in depth to our mutual benefit? And be sure to use every opportunity that’s offered to meet with your colleagues in a non-business environment, so they can truly be called trusted collaborators. Talk to them. Face to face.
Græme Gordon, Executive Director, Praxity
Once again Praxity participant firms have won accolades in the Association for Accounting Marketing (AAM) Achievement Awards, which annually recognise outstanding achievement in accounting marketing. The association selected 30 winners across a broad range of categories, based on each firm’s ability to accomplish specific goals or objectives, strategically execute the project and measure the results. Judges reviewed a total of 99 entries in the marketing, advertising, communications and professional services fields.
“We’re very excited to be recognized by AAM as a leader in accounting marketing,” said Greg Cole, director of growth and development at BKD. “I want to thank our BDA team, creative professionals and everyone else who worked on this unique and innovative site.” You can see what won it for BKD here.
You can read more about how Praxity firms are differentiating their business to gain the edge in a busy competitive global marketplace in our feature on marketing in the latest edition of HUB magazine.
Plante Moran, one of the nation’s largest public accounting and business advisory firms, is pleased to announce that, effective July 1, Bryan Welsh will become the firm-wide leader of Plante Moran's Manufacturing and Distribution Industry Group.
In this role, Welsh will be responsible for developing and executing on various practice area strategies, including the industry group’s focus on client service, talent development initiatives, and growth from both and domestic and international perspective.
A partner in Plante Moran’s Detroit office, Welsh assumes the Manufacturing and Distribution Industry Group leader role from Chris Montague, Chicago partner and market leader, who will retire in 2018. Welsh will continue his role as leader of Plante Moran’s Southeast Michigan Manufacturing and Distribution Practice, as well as his role on the Firm’s Private Equity Leadership Team.
“Throughout the last 15 years, Bryan has taken on several leadership roles within the practice” said Montague. “On a global scale, he’s extremely well versed in a variety of issues and strategies impacting the manufacturing and distribution industry. His experience and strong skill set make him the perfect choice to lead and grow the practice and team, while ensuring clients receive the best possible service."
Welsh joined Plante Moran in 1995 after graduating from the University of Michigan-Dearborn with a Bachelor of Business Administration in Accounting and Finance. He’s also a member of the American Institute of CPAs and the Michigan Association of CPAs.
Welsh resides with his family in Grosse Pointe.
About Plante Moran
Plante Moran is among the nation's largest accounting, tax and consulting firms and provides a full line of services to organizations in the following industries: manufacturing and distribution, financial institutions, service, health care, private equity, public sector and real estate and construction. Plante Moran has a staff of more than 2,200 professionals in offices throughout Michigan, Ohio, and Illinois with international offices in Shanghai, China; Monterrey, Mexico; and Mumbai, India. Plante Moran has been recognized by a number of organizations, including FORTUNE magazine, as one of the country's best places to work. For more information, visit plantemoran.com.