Luck, Wisdom Marked Exodus from Andersen

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Todd Wisdom and Billye Hawkins left the "golden egg" before it turned into Humpty Dumpty.

It was November 2001, a month before the Enron Corp. scandal fell Arthur Andersen LLP from accounting grace and turned the 84,000-worker empire into a skeleton crew. Wisdom and Hawkins ran Andersen's Fayetteville office but had begun talks with Tullius Taylor Sartain & Sartain about opening up a branch for the Tulsa firm.

Wisdom, now Tullius Taylor's audit senior manager in Fayetteville, said their departure had less to do with foresight than the kind of luck normally reserved for leprechauns and lotto winners. The duo resigned from Andersen before Thanksgiving of 2001, ahead of Enron's Dec. 2, 2001, bankruptcy and Dec. 13, when executives from the former "Big Five" accounting firm were summoned to testify before Congress.

Neither CPA had any role in the $10 billion Chicago firm's illicit bookkeeping activities.

"We didn't like the direction Andersen was heading," Wisdom said. "We didn't have any idea about what was going on with Enron. The firm was just trying to be everything to every client and focusing on consulting work. Billye and I enjoyed working with the midsized firms, and we had been looking to get out of Andersen for several months.

"It just turned out to be impeccable timing."

Tullius Taylor officially opened its Fayetteville office on Dec. 17, 2001, in the same E.J. Ball Building suite that had housed the local office of Arthur Andersen. Approaching the anniversary of its opening and Andersen's fall, Tullius Taylor's Northwest Arkansas branch boasts 25 commercial clients and 2002 billings of more than $500,000.

It's a monstrous chunk of the market considering the two-county area's largest firm, Ervin & Co. CPAs P.A., will do about $1.7 million in business in 2002.

Wisdom said he and Hawkins took eight of Andersen's 12 major clients with them to Tullius Taylor. That includes Springdale public companies Advanced Environmental Recycling Technologies Inc. and Cannon Express Inc., as well as privately held heavyweights such as Hanna's Candle Co. of Fayetteville and Harps Food Stores Inc. of Springdale.

The only public company audit the team lost was that of P.A.M. Transportation Services Inc. of Tontitown, which elected to stay with a nationally prominent firm and chose Deloitte & Touche LLP.

Bob Vaught, managing partner of Tullius Taylor and partner of the Fayetteville branch, said 70-75 percent of the firm's business is auditing and accounting. The rest, he said, is tax consulting and strategic planning.

Vaught, who himself worked at Andersen in the 1970s, said most of the firm's clients are high net-worth individuals and midlevel businesses with $10 million-$500 million in annual revenue. Brad Stoots, the Fayetteville office's audit partner, is another Andersen alumnus. He was with Andersen for 20 years, the last seven as a partner of its Tulsa operation before joining Tullius Taylor in the same city.

"What the Fayetteville office has done this year is unbelievable," said Vaught, who's a Greenland native and a University of Arkansas graduate. "We had a lot of business contacts there, a lot of former Andersen clients who had already worked with [Wisdom, Stoots and Hawkins]. And we gave them the advantages of a hometown firm with the expertise of a larger organization."

Hawkins is a Farmington native and Tullius Taylor's audit senior accountant in Fayetteville. Christian Vaught is son of the partner and the local branch's tax senior staffer. Both are also UA graduates.

Bob Vaught said Tullius Taylor will probably hire an additional eight to 10 professionals during the next three to four years in Fayetteville to keep pace. He expects to top $1 million in annual Northwest Arkansas billings during the same time.

Overall, Tullius Taylor does $5 million in annual billings with 10 partners and a staff of 48, including 25 CPAs and 13 professionals. Seventy percent of Tullius Taylor's employees have "Big Five" accounting firm experience.

Additional expansions in markets such as Fort Smith; Wichita, Kan.; or Joplin, Mo., would fit with the firm's strategic plan.

Andersen's Advantages

Hawkins said she endured her share of Andersen punch lines this year.

"I've been introduced a couple of times as having come from Andersen and heard jokes like, 'Oh, do you shred documents?'" Hawkins said. "It's really frustrating because I believed I worked for the best accounting firm in the world."

Most of the clients with whom Hawkins works are chief financial officers or CEOs, she said, and they view Andersen's demise as "a tragic thing."

"Andersen's size and resources enabled it to provide top-notch training," Hawkins said. "They chose employees and clients selectively, and really having worked there has not been a negative issue at all. It's really been the opposite."

Wisdom said if anything, the relationships that Hawkins, Stoots and he forged while at Andersen helped Tullius Taylor. And when the "Final Four" national accounting chains were overrun with expatriated Andersen customers this year, regional firms such as Tullius Taylor were waiting in the wings.

"We have the experience and the resources to do almost any audit," Wisdom said. "But our niche is helping companies transition once they're too big for the little guys but not big enough to afford the fees of the big national firms."

Although many employees at Andersen lost much of their pension savings, Wisdom and Hawkins were not affected. In fact, Wisdom said, his 401(k) Fidelity plan is set up through Andersen.

Efficient Expertise

John Scott, chief financial officer of Hanna's, said Tullius Taylor has had the greatest impact on his company's tax liabilities.

"We have a pretty complicated tax situation, and they came in and really cleaned that up, and our owners own quite a few businesses," Scott said. "They have really saved us a lot of money and simplified everything for us."

Executives at Tulsa companies such as Giro Inc., Matrix Service Co., Taylor Scott Architects and Miratech Corp. also have raved about Tullius Taylor in print. Bob Vaught, the Fayetteville partner, said the reasons are the firm's pricing and competencies.

"In reality, we had been looking to expand into Northwest Arkansas for quite some time," Vaught said. "That area has a lot of dynamic kinds of businesses and growth companies. We felt like we could utilize our expertise in tax accounting and auditing to service that area."

Vaught said alliances with CPA America and Tullius Taylor-affiliate Wealth Advisors, a financial planning company, give his firm additional muscle. CPA America is a North American cooperative of 75 accounting firms that share expertise and resources (www.cpaamerica.org).

Other services include human capital appraisals and profit enhancement and public offering consultations.

"Our primary goal is to add value for our clients," Vaught said.

Based on studies done by consumer satisfaction researcher Growth Strategies International of Tulsa, Tullius Taylor is achieving its goal. After 13 years and 47,000 surveys, GSI has rated the firm No. 1 overall in "ease of doing business."