The San Jose/Silicon Valley Business Journal named Kathy Ryan, the firm’s co-founder, CEO and CFO, as a 2012 Women of Influence. The Business Journal published the list of 100 women leaders Friday, April 6.

We are quite pleased Kathy is included in such prestigious company, which includes women in astronomy, computing, academics, government, the arts, finance, health care, law, solar power, communications, social media, education and more.

The award, says Kathy, “reminds me of how proud I am of what RoseRyan has contributed to this region’s vibrant business ecosystem over nearly 20 years.” (You can read more about her in our press release or check out her website bio.)

The list, says the Business Journal, is a response to the fact that women in corporate leadership have yet to reach parity in numbers with men. Research from UC Davis, which annually publishes a report on women leaders at California public companies, shows that women comprise 9.7 percent of leadership roles at the state’s big public companies—and in Silicon Valley, they make up only 7.4 percent.

The Business Journal, however, considers public and private companies, government and academia. Some of the better-known 2012 Women of Influence include Van Dang, VP of law and deputy general counsel, Cisco; Lisa Nash, CEO, Blue Planet Network; Madison Nguyen, vice mayor, San Jose; Julie Packard, executive director, Monterey Bay Aquarium; Joan Parsons, head of U.S. banking, Silicon Valley Bank; Jennifer Simmons, executive director, Habitat for Humanity Silicon Valley; Dawn Smith, SVP, VMware; Meg Whitman, CEO, Hewlett-Packard; and Sharon A. Williams, executive director, JobTrain.

It’s particularly satisfying that the list also includes a number of women leading new (or newish) companies, such as Wendy Arienzo, CEO, ArrayPower; Anne Bonaparte, president and CEO, Xora; Stina Ehrensvard, founder and CEO, Yubico; Mar Hershenson, founder and CEO, Revel Touch; and Laura Yecies, CEO, SugarSync.

And of course, we’re pleased to see there are two other CFOs: Robyn Denholm of Juniper Networks and Lumin Chang at Wyse Techology. By our count, past lists have recognized a total of about eight CFOs; maybe there will be more of us financial types in the future.

 

The JOBS Act (Jumpstart Our Business Startups Act) purports to foster the growth of small businesses, allowing them easier access to funding by lowering bureaucratic hurdles and thus enabling the growth of their business and their ability to hire more people.

In reality, the bill—passed overwhelmingly by the House last week and now awaiting President Obama’s signature—allows small companies to avoid scrutiny of their financial statements for the first five years because compliance is too costly. What is “small”? Companies with revenues of less than $1 billion. Yep—that’s most of Silicon Valley.

These small companies need access to funding. VC funding (with astute financial inquiries) isn’t readily available, so they go to the public market where we, the investors, have only the financial statements, press releases, website content and other information the company produces. We have to trust that it is accurate, but the JOBS Act says the internal controls and third-party independent oversight mandated by SOX legislation is “too costly.” Too costly for whom?

A well-designed SOX program is not too expensive—it’s too expensive not to have those controls. Any idea how expensive a restatement is? (Think audit fees, legal fees, the army of accountants crunching through your books, regulatory inquiries, shareholder litigation, the list goes on.) Nearly one-third of companies that have had IPOs since 2004 have had to issue financial restatements—that’s a staggeringly high number.

Why do small companies get it wrong?

For starters, finance isn’t viewed as a strategic business function—it’s viewed as overhead. That means it’s often not properly funded, so there’s not enough horsepower to make sure the books are accurate, not enough access to expertise to understand complex accounting regulations and not enough rigor in the close process. Bottom line: the financial statements are not accurate. They do not serve as a basis for understanding the financial position of the business—either for making investment decisions or making management decisions about running the business.

JOBS Act advocates say that most companies will be fine without the discipline of solid internal controls. Really? Did you see the latest from Groupon? First it stumbled with its IPO, and now it has stumbled with its first 10-K. See any patterns? In this last trip-up, the company identified a material weakness in internal controls related to the financial close process and cited three contributing factors: 1) an inadequate close process, resulting in a number of manual post-close adjustments; 2) account reconciliations not performed and/or reviewed; and 3) inadequate policies for timely, adequate review of estimates and assumptions. These are pretty basic controls that every company should perform as part of its normal close process—nothing fancy or tricky here—yet Groupon doesn’t seem embarrassed about missing these controls. (And it certainly isn’t embarrassed to be taking investor money.) While Groupon wouldn’t benefit from the JOBS Act because it has revenues of $1.6 billion, it’s a great example of what often happens with young, newly public companies and the challenges they face in providing accurate financial information to the investor community.

In the wake of the massive frauds perpetrated by Enron, WorldCom, Adelphia, and others, we got SOX. In the wake of the massive frauds perpetrated by Wall Street—which drove us into the deepest recession since the Great Depression—we got Dodd-Frank. Who are we kidding with the JOBS Act? Get ready: we’ve paved the way for a lot more fraud and financial misstatements.

RoseRyan’s first quarter was bustling—six new gurus joined the team and jumped right into new assignments. They all have extensive senior finance experience and most have substantive CPA stints with Big Four firms. Here’s a bit about them:

Linda Clements Linda has great technical chops and mix of public/private experience as CFO, VP of finance and corporate controller in technology, manufacturing, software and health care. Her first RoseRyan gig is CFO for a public biotech company.

Maddy Gatto  A rev rec and SOX guru, Maddy was recently at National Semiconductor as a controller. She’s also done stints with KPMG and as internal audit manager at NSC, along with work on foreign accounting entities. She’s starting with RoseRyan as accounting ops director for a technology firm.

Cindy Nathan An alum of E&Y and RoseRyan (she was our Employee No. 7!), Cindy’s a fan of start-ups and their challenges—and she returns to RoseRyan with not one but three emerging growth clients. Her past experience, focused on biotech and medical technology, includes work at the controller and accounting manager level.

Barbara Rescino Barbara’s covered lots of ground: companies big and small, public and private, in solar, biotech, software, medical devices and other industries. Past posts include corporate accounting manager, controller and director of finance; payroll migration for a technology company is her first RoseRyan assignment.

Ray Solari Ray’s been with Deloitte and served as CFO for smaller companies and at the director level with larger ones. His strength is the technology sector. That’s good: his first RoseRyan gig is FP&A for a technology client. Ray’s storied past includes IPO, M&A, audit, SEC, forecasting and more.

Maisha Wilson Among other things, Maisha’s into start-ups, implementing systems, and consolidations foreign and domestic. A PwC alum, she’s also served as VP of finance and CFO for emerging growth companies. Her first RoseRyan gigs: controller for a new start-up and SEC/10K for a newly minted public company.

RoseRyan, along with Ernst & Young and Morrison & Foerster, is presenting a free breakfast seminar, “XBRL: It’s Time to Get Real,” on May 2 in Palo Alto.

We all know that XBRL implementation can be tough—especially if you’re not crystal clear on the process, don’t know what’s possible and aren’t sure where the pitfalls are. Of course you want best practices, but who can say what they are when the rules keep changing? On top of that, maybe your limited liability is expiring—and what exactly does that mean? Perhaps most of all, what does the SEC really want?

“XBRL: It’s Time to Get Real” will give you the answers from people who’ve been toiling in the XBRL trenches and have done the sweating for you. These experts will provide concise, practical advice on key accounting, legal and audit do’s and don’ts, illustrated with plenty of real-world examples. The presenters are:

Lucy Lee, XBRL practice chief, RoseRyan: Lucy is the chief architect of RoseRyan’s XBRL practice, an elected member of the XBRL US 2012 Domain Steering Committee and a voting member of the XBRL Global Ledger Working Group of XBRL International.

David M. Lynn, partner, Morrison & Foerster: David, a leading authority on SEC matters, is co-chair of his firm’s global public companies practice and former chief counsel of the division of corporation finance at the SEC.

Natalie Zimmer, senior audit manager, Ernst & Young: Natalie, a recognized XBRL expert, advises on XBRL implementation and has presented on the subject in multiple forums.

The seminar will be held 7:30–9:30 a.m. at the Garden Court Hotel in Palo Alto. Attendees receive 1 CPE credit. Get details and register here.