2009 had some interesting twists to it as far as the software and services industries go.
Here are top five services stories of 2009.
1) The breakup of BearingPoint – BearingPoint had some big bills to pay this year. When the time came to do so, they couldn’t. The company began the process of selling off parts of itself and now little of what once was BearingPoint still carries that name.
2) Satyam – This was a fairly shocking fraud story. The founder of the company confessed to a number of problems that eventually resulted in the company being acquired. Unfortunately, a lot of employees (and maybe some clients) got burned in the process but jail terms are likely for some of the Satyam executives.
3) Tiger Woods and Accenture go splitsville – Tiger Woods was the ‘high performance’ gold standard used by Accenture in its advertising for years. In a matter of weeks, Tiger has lost the Accenture endorsement amid some startling claims others have made about his love life…
Read the complete article @ Software & Services Safari
Accenture partners claim that the company enforces high ethical standards but the facts shows differently.
Douglas Scrivner responded to a SEC related to the reestructuring costs that http://www.sec.gov/Archives/edgar/data/1143908/000095013706000977/filename1.htm
“The partners did not pay the tax liability at the time of the reorganization transaction because the Company and its external advisors felt there was a reasonable possibility of a favorable outcome. The Company and its external advisors believed the tax positions related to the restructuring transactions were appropriate and supportable under local tax law and the Company intends to defend, as needed, tax positions taken by the partners. A favorable outcome is still possible through either issues not being identified on audit by tax authorities, a successful defense of the position, or expiration of the statute of limitations, so it is not appropriate to pay the tax liability at the time of the transaction, or at any time, unless administrative and legal processes have concluded and resulted in an actual unfavorable outcome.”
In page 16 of the “NOTICE OF THE 2010 ANNUAL GENERAL MEETING OF SHAREHOLDERS”
( http://www.sec.gov/Archives/edgar/data/1467373/000119312509251604/dpre14a.htm ) is stated:
“Senior Executive Tax Costs
The Company has informed approximately 2,500 of our senior executives that if the senior executive reported for tax purposes the transactions involved in connection with our transition to a corporate structure in 2001, the Company will, in certain circumstances, provide a legal defense to that individual if his or her reporting position is challenged by the relevant tax authority. In the event such a defense is unsuccessful, and the senior executive is then subject to extraordinary financial disadvantage, the Company will review such circumstances for that individual and find an appropriate way to avoid severe financial damage to that individual.”
In the newspaper el Mundo there was informed that Accenture (and therefore all shareholders) have paid 110 million euros, plus the penalty related with the unpaid taxes of the 100 Spanish Partners in 2001 reestructuring.
http://www.elmundo.es/mundodinero/2008/06/20/economia/1213922650.html
If now as declared there are 2500 senior executives that might be in the same situation, it is stright forward to have a direct correlation of the possible personal tax impact on former senior executives that Accenture is commenting it might be paid by the company and therefore by all Accenture shareholders.
Which ethical standards are higher, Mr. Wood’s or Accenture’s?