IndusTrY neWs continued
J.H. Cohn CEO Sees Need for IFRS Training
By Michael Cohn | Accounting Today | Aug. 16, 2011
Tom Marino, the chief executive of J.H. Cohn, visited the Accounting Today
offices on Tuesday to talk about how his firm is preparing for International
Financial Reporting Standards.
While the Securities and Exchange Commission has not yet approved the use
of IFRS by U.S. companies, J.H. Cohn has brought in its U.K. affiliates from
the Nexia International network to help familiarize clients with IFRS. “They
already know it and how it ultimately is going to get used,” he pointed out.
However, he believes clients are awaiting the outcome of the SEC’s decision
on incorporating IFRS into the U.S. system before they try to familiarize
themselves with IFRS. In some ways, it harks back to uncertainty over
whether the Sarbanes-Oxley internal control requirements would ever
apply to smaller companies.
“There’s a track record that if you wait long enough, it’s going to go away,”
said Marino. “Why get ready now if there’s no reason to?” However, he
added that there were a number of reasons, including Canada’s decision to
switch to IFRS. “Everybody’s using it now,” he said.
But he sees problems with the SEC’s proposed work plan for incorporating
IFRS into the U.S. financial reporting system, especially the concept of
“condorsement” for the final remaining standards in the Memorandum of
Understanding between the U.S. Financial Accounting Standards Board and
the International Accounting Standards Board. Marino believes that if those
standards have to be endorsed one at a time by FASB, it could mean further
delays. He wants a “date certain” for using IFRS, even if it’s not until 2016.
Marino also commented on the PCAOB’s decision to issue a concept release
on mandatory rotation of auditing firms (see PCAOB Proposes Mandatory
Auditor Rotation). He doesn’t think it will be practical. “It will add more cost
and lend itself to more error,” he noted. “How many firms can audit an auto
manufacturer?”
Marino perceives a bigger problem in the low-balling of fees by many
accounting firms trying to win business away from other firms. He sees that
being done not only by the smaller firms, but by large firms as well. He believes
that’s hindering the recovery of many firms, but he doesn’t intend to follow suit.
“We’re not going to be the McDonald’s of accounting firms,” he said.
J.H. Cohn has slowed down the pace of its acquisitions in recent years
and has taken time to integrate some of the boutique firms it has bought.
“Before you do too many, you have to give them time to mature,” said
Marino. His firm is currently eyeing a $25 million acquisition, though.
Meanwhile, J.H. Cohn has been attracting attention with spokesman Joe
Torre, the legendary Major League Baseball manager, who appears in
ads for the firm. In Asia, the firm’s director of economic research, Patrick
O’Keefe, also draws media attention.
Marino cited several valuable niches for growth at the firm, including health
care consulting and the biotech industry. He also believes IFRS will be
important for firms to learn, and the unexpected effects that it can have in
areas such as state taxes.
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