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Sam Antar “It takes one to know one” and He Knows Patrick Byrne

By Stacie Clifford Kitts, CPA 

I’ve watched with interest the online clash between CEO Patrick M. Byrne of Overstock.com and a handful of bloggers and journalists. The basic issue appears to be a consensus, among this group that Mr. Byrne is (allegedly) a crook [and maybe a little unstable] who is also (allegedly) cooking the books of the company he is charged with running.

Sam Antar who has the best bio snippet I have read to date….

I am a convicted felon, former CPA, and former CFO of Crazy Eddie. There is a saying, “It takes one to know one.” I teach law enforcement, professionals, and students about white collar crime and how to catch corporate miscreants….

In my blog, I expose white collar crooks just for the fun of it…

….really really R-E-A-L-L-Y dislikes Mr. Byrne. Based on Mr. Antar’s “it takes one to know one” philosophy, Sam insists that he knows Patrick pretty well.   

Mr. Antar has made this determination based on his analysis of the publically available financial information of Ovestock.com. You can read Mr. Antar’s many comments about Mr. Byrne at his acclaimed blog White Collar Fraud

Mr. Antar’s rehash of his part in the Crazy Edie fraud scandal at his website http://www.whitecollarfraud.com is also a good read. There is no doubt that this recount should be mandatory reading for all new staff accountants.

As for my take….

I’ve always believed based on my experiences working in both public accounting and industry, that the financial statement audit process [limited to large publically traded companies]was for the most part a silly practice that boiled down to ongoing compromises made by auditors to sustain the fine line walked to keep clients. Although the audit practice has tightened up -some – over the years i.e. the PCAOB, I think we are still looking at an overriding drive for accounting firm profit over good sense. 

Evidence you ask.

In my opinion, the fact that Overstock.com was able to find an audit firm amidst all the (alleged) controversy is evidence enough. It’s too bad that the audit firm’s work papers aren’t public information, because I would looove to get my hands on the Client Acceptance Form that KPMG put together to prove their acceptance of this client. If only to see how they have addressed these allegations.  [I hope they have really good practice insurance.]

Anyway…What’s a Client Acceptance Form you ask?

A Client Acceptance Form is a checklist that an auditor uses to decide whether they should accept a company as a client. This document incorporates questions about whether the firm believes that they have the proper knowledge, training, and staff to handle the engagement. However, it also wants to know things about the target client too. For instance, there are questions about the integrity of the company’s management, the chances that there is fraud in the financial statements, and questions regarding whether there is evidence that management may be motivated to commit fraud.

There appears to be plenty of evidence that the management integrity of Overstock.com is at least in question [if of course you believe the many  journalists and bloggers who have commented on  Overstock’s current woes]. This alone should have precluded an audit firm from accepting the engagement (in my opinion). Obviously, this acceptance is profit motivated, but KPMG – people – come on  -what – are  – you –  thinking.

If you would like to read, more about the controversy check out this recent post by Sam

Open Letter to the Securities and Exchange Commission: Conflicting Disclosures by Overstock.com Reveal Improper Audit Opinion Shopping

Post Script: I saw fraud unfold up close and in person at a public company I worked for in the 90’s. I was not part of the fraud scandal.  However, watching what happened after it was discovered makes for an interesting story.  Stay tuned for more on that truly fascinating tale.

An Accountants Guide to -What is Networking Anyway?

By Stacie Clifford Kitts, CPA

If you are a seasoned professional, you already know.

However, there are plenty of young accountants and college students who are wondering just this – what is networking – do I need to do it – and where do I begin? Frankly, as a young staff, I questioned how my partners were heading out into the world and bringing back stacks of new clients for me to work on.

I was mystified and oh so innocent…..It looked like *magic*.

What else could it be, except maybe an underground society known as networkers, who ventured out into the world, performed some secret handshake, and produced clients from thin air?

Amazing!

But, where was this secret society? Did they have a secret location… like – The Bat Cave – a giant underground warehouse where they plucked potential clients off the shelf and checked them out at the front of the store?

Was that it?

I longed for someone to tell me…..I had to know the answer to this secret networking magic.

So on a particularly busy day, with a new client file in my hand, I stared into the face of my partner and asked. “Sir, where is the Bat Cave?”

“Oh my child,” he replied as he looked down and shook his head. “I know of no Bat Cave. But if you want, I will introduce you to Robin, one of my referral sources.”

O ‘M God – Awkward!

And so began my enduring quest for the mysterious Bat Cave, a secret place teaming with clients patiently waiting to be plucked from the shelf.

And yet, I wasn’t alone in my quest. For you see, as with all quests, I have my fellowship, my team of White Knights, a trusted alliance – my – referral sources – who like all trusted guides are there to lead the way.

So fellow seekers, during your networking journey, you are bound to roam lost and alone – until you too find your trusted alliance. And, In order to help you in this endeavor, I have graciously compiled these tips. Good luck travelers…. And let me know if you find the Bat Cave…because unfortunately, I never did:

1) Begin your quest by sharpening you craft. In order to sell your services, you need some services to sell. Have your “elevator speech” ready. Practice what you will say when people ask you questions about your profession, your employer, and your background. Treat it like an interview process because that is what it is – a five second interview meant to grab someone’s attention just long enough for them to find you interesting.

2) Socialize Socialize Socialize. Okay, so networking is directed socializing – meaning it’s about meeting people, in a particular profession, with a particular goal in mind. But as intimidating as that might sound, all it really is, is dating… In fact, networking for referral sources has many of the same elements as relationship dating. Don’t think so -Let’s explore the typical referral dating scenario:

First you attend a social event, you meet someone who interest you, you exchange phone numbers, you call the next day and set up a “referral date”, typically coffee, breakfast, lunch or dinner, you explore whether this person is someone who is going to help you get what you want, and then you consider if a more committed relationship is warranted.

Ummm sounds like a typical date to me. So sharpen your dating skills, be sure to follow up [you know, call the next day], be engaging, have fun, and for heaven’s sake, act as if you want to be there.

Now the question is – how to find people to “referral date.” Here are some ideas:

a. Join a business-networking group – this can help you to focus your energy towards people who have the same business goals.

b. Volunteer your time – besides just being a rewarding experience, you will undoubtedly broaden you social horizon.

c. Join social clubs that interest you such as a running club, bicycling club, softball team, the girl scouts… well you get the point – again the more people you know…

d. Tell people you are looking for clients – hey, it doesn’t hurt to ask – and if you don’t ask – frankly people might not realize that you are looking.

e. Get on the internet – write a blog, create a web site, join online social networking groups, send out email reminders with handy tidbits of info to people in your network – the point is to remind people you are around so when someone needs a service, your name is on their mind.

3) Be fearless in your quest. And I mean just that. Don’t be afraid – get out into the world and tell people what you do. Ask for business. Hand out your card – and do it over and over and over again until you find the right, group, network, or formula that works for you. Keep in mind that your partner’s journey may be different from yours. As networkers, we each have our own styles. So don’t get discouraged if someone else’s journey isn’t for you.