If you were seeking an accountant, would you hire one that has just blown a £12m black hole in its own accounts? RSM Tenon, the number crunchers with the dodgy calculator, said yesterday that a review of the group's finances had revealed "significant errors".
This is a) quite funny, b) a serious reputational issue for a firm already in trouble, and c) not surprising.
For some time now, RSM has looked like a business struggling to get out of its own way.
In 2010, it was fined £700,000 for bad advice after selling savings deals backed by Lehman Brothers (yes, that Lehman Brothers). This issue has just set it back another £4.3m, the statement yesterday concedes, as it revealed an overall loss of £70m.
Revenues are falling, though not as much as the share price, down 90 per cent in the past year.
A profit warning last month claimed the head of chief executive Andy Raynor. The new man, Chris Merry, insists his firm is not accident-prone, but clients must wonder.
Merry says he is taking action, and looking forward. Well, that's certainly preferable to the alternative.
It would be easier to have some sympathy for RSM if it weren't one of those tax planners that punt schemes which are right on the edge of what is allowed to enable wealthy individuals and even wealthier companies to avoid paying their dues.
One RSM scheme, nicknamed Aikido, according to The Times, was to exploit a loophole so investors could receive dividends without paying any tax.
In this case, both the clients and the firm were asking themselves the wrong question (can we get away with this?) rather than the correct one (is this the right thing to do?).
For most of us, paying tax is largely unavoidable and, perhaps, a matter of conscience.
For RSM (and on a bigger scale, Barclays) it appears to be a game of dodgeball with HMRC. You try it on mercilessly while screeching that you are following all appropriate laws. If that turns out not to be the case, you take a hit while privately vowing to come back with something even more devious.
The first thing Merry should do – after apologising to the staff he's going to fire in search of cost cuts – is to make it plain RSM won't get involved in these sorts of capers any more.
Advising small and medium-sized firms on auditing, tax and other financial matters ought to be a perfectly noble affair.
When the economy does start growing again, the SMEs are likely to shift faster than everything else.
RSM could be well positioned to gain from this development. Unless having them as your auditors is somehow seen as a source of embarrassment...Reuse content