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Offline NewMine

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Is Bitcountant really an "external" accounting firm?
« on: April 14, 2014, 04:20:24 PM »


These are documented on separate public spreadsheets that Dan delegated to marketiing and operations. The 20k PTS was merely moved, not spent.

Links to these sub spreadsheets are found in a column to the right of these two rows on both the PTS and BTC master spreadsheets.

These are reviewed continously by an external accounting firm - Bitcountant.

Bitcountant site:   http://bitcountant.com/who-we-are/

Bitshares team:  http://bitshares.org/team/


Charles Evans, AKA CWEvans is Bitshares Cheif Economist and part of the "external" accounting. He is also an avid participant on the forums here as of late.

Angelina Pluzhnyk is listed as Bitshares Accountant and also part of Bitcountant.

This does not qualify as "external". Two individuals belonging to the firm are also part of the Bitshares team and community.

If they were truly "external" I think you would have your internal auditor listed as a BTS accountant and then Bitcountant listed as an external firm, not the individual members of the external firm listed as part of the team and one who has a separate title un-related to an accounting position. Perhaps they were originally hired as a separate firm and the members have crossed the line?
 
What worries me is not who is doing the accounting, but why Bitcountants is being claimed to be an "external" firm when they are clearly well within "arms reach"?



 

Offline Stan

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #1 on: April 14, 2014, 05:26:51 PM »

These are documented on separate public spreadsheets that Dan delegated to marketiing and operations. The 20k PTS was merely moved, not spent.

Links to these sub spreadsheets are found in a column to the right of these two rows on both the PTS and BTC master spreadsheets.

These are reviewed continously by an external accounting firm - Bitcountant.

Bitcountant site:   http://bitcountant.com/who-we-are/

Bitshares team:  http://bitshares.org/team/


Charles Evans, AKA CWEvans is Bitshares Cheif Economist and part of the "external" accounting. He is also an avid participant on the forums here as of late.

Angelina Pluzhnyk is listed as Bitshares Accountant and also part of Bitcountant.

This does not qualify as "external". Two individuals belonging to the firm are also part of the Bitshares team and community.

If they were truly "external" I think you would have your internal auditor listed as a BTS accountant and then Bitcountant listed as an external firm, not the individual members of the external firm listed as part of the team and one who has a separate title un-related to an accounting position. Perhaps they were originally hired as a separate firm and the members have crossed the line?
 
What worries me is not who is doing the accounting, but why Bitcountants is being claimed to be an "external" firm when they are clearly well within "arms reach"?

We list all contributors on our team page because it's not about Invictus its about the BitShares industry. 

Note that those who are employees of Invictus have no Invictus titles, just industry roles.

If we were to switch accounting firms, we would put the new accountant's picture on the team page too.

 :)


Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline progmac

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #2 on: April 15, 2014, 11:59:50 AM »
i think it is a reasonable point to bring up.

Quote
from bitcountant website:
We take care of all that accounting and compliance stuff that must be done—from bookkeeping through financial reporting, to project valuation and regulatory compliance—so that you can focus on doing what it is that consumes your imagination and compelled you to get into this business.

so what 'external accounting' means in this case is more akin to 'contract accounting.' basically bitshares hired a consultant to do the books.

i think that many people thought it was more along the lines of 'external auditing,' which is, i think, what people are actually looking for. generally the industry standard (at least in my industry) is that external audits provide third-part verification. from my perspective, using a consultant accountant does not constitute third-party verification.
« Last Edit: April 15, 2014, 12:03:47 PM by progmac »
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Offline dannotestein

Re: Is Bitcountant really an "external" accounting firm?
« Reply #3 on: April 15, 2014, 01:17:29 PM »
i think that many people thought it was more along the lines of 'external auditing,' which is, i think, what people are actually looking for. generally the industry standard (at least in my industry) is that external audits provide third-part verification. from my perspective, using a consultant accountant does not constitute third-party verification.
Well, in fairness to Stan, he did say external accountant, not auditor, although he did say they audit the books. Which I think they do in this case, since they review the transactions made from the AGS funds. Anyways, the financial debacle of recent years has surely shown pretty clearly that external auditing isn't an absolute guarantee of anything anyways I suppose, although it makes me feel better.

For the amount of money involved, what Invictus is currently providing as verification seems like a reasonable level to me. Now, if we started getting a lot more AGS donations, I think we would need to revisit this topic. The good thing here is that the records don't go away, so any past action can't be easily fudged away, so there's a strong incentive to "play it straight".
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Offline progmac

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #4 on: April 15, 2014, 01:30:15 PM »
i think that many people thought it was more along the lines of 'external auditing,' which is, i think, what people are actually looking for. generally the industry standard (at least in my industry) is that external audits provide third-part verification. from my perspective, using a consultant accountant does not constitute third-party verification.
Well, in fairness to Stan, he did say external accountant, not auditor, although he did say they audit the books. Which I think they do in this case, since they review the transactions made from the AGS funds. Anyways, the financial debacle of recent years has surely shown pretty clearly that external auditing isn't an absolute guarantee of anything anyways I suppose, although it makes me feel better.

For the amount of money involved, what Invictus is currently providing as verification seems like a reasonable level to me. Now, if we started getting a lot more AGS donations, I think we would need to revisit this topic. The good thing here is that the records don't go away, so any past action can't be easily fudged away, so there's a strong incentive to "play it straight".

I agree with everything you're saying and I'm still in the mode of giving them a wide berth to do their thing. I consider this is a very high-risk, venture type investment at this point -- meaning that there is some likelihood that nothing of value will ever be delivered. It isn't like we invested in GE.

I do think everyone is acting in good faith.
« Last Edit: April 15, 2014, 01:32:13 PM by progmac »
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Offline CWEvans

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #5 on: April 15, 2014, 04:04:20 PM »
Bitcountant passes the IRS's contractor test, making it external in that sense. BitShares is not Bitcountant's only client, and there really is not much to do other than keep track of the inflows and outflows of the AGS fund and produce statements recognizable to an accountant. It is much easier than filing the tax returns of miners and day-traders!

Because the BitShares AGS transaction records are made available to the public and the transfers are memorialized in the Bitcoin and PTS blockchains, fiddling the numbers Enron-style would be exceptionally difficult.

However, it is legitimate to ask, as we should hold everyone in this industry under white-hot scrutiny, without resorting to wild and inflammatory accusations, of course. Where there is money, you will find scoundrels, and there will be scandals.

Offline NewMine

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #6 on: April 15, 2014, 08:00:21 PM »
Bitcountant passes the IRS's contractor test, making it external in that sense. BitShares is not Bitcountant's only client, and there really is not much to do other than keep track of the inflows and outflows of the AGS fund and produce statements recognizable to an accountant. It is much easier than filing the tax returns of miners and day-traders!

Because the BitShares AGS transaction records are made available to the public and the transfers are memorialized in the Bitcoin and PTS blockchains, fiddling the numbers Enron-style would be exceptionally difficult.

However, it is legitimate to ask, as we should hold everyone in this industry under white-hot scrutiny, without resorting to wild and inflammatory accusations, of course. Where there is money, you will find scoundrels, and there will be scandals.

Thanks for answering!

Since Bitshares is a subsidiary of I3, your positions with Bitshares and Bitcountant doesn't generate a conflict?

Not accusing anything, just wondering.

As Stan put it, it seems if Bitcountant were replaced by Deloitte, would the new Bitshares Chief Economist be Salzberg or someone else employed by the firm? Seems strange to me if this were the case.

Offline Stan

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #7 on: April 15, 2014, 09:08:38 PM »
Bitcountant passes the IRS's contractor test, making it external in that sense. BitShares is not Bitcountant's only client, and there really is not much to do other than keep track of the inflows and outflows of the AGS fund and produce statements recognizable to an accountant. It is much easier than filing the tax returns of miners and day-traders!

Because the BitShares AGS transaction records are made available to the public and the transfers are memorialized in the Bitcoin and PTS blockchains, fiddling the numbers Enron-style would be exceptionally difficult.

However, it is legitimate to ask, as we should hold everyone in this industry under white-hot scrutiny, without resorting to wild and inflammatory accusations, of course. Where there is money, you will find scoundrels, and there will be scandals.

Thanks for answering!

Since Bitshares is a subsidiary of I3, your positions with Bitshares and Bitcountant doesn't generate a conflict?

Not accusing anything, just wondering.

As Stan put it, it seems if Bitcountant were replaced by Deloitte, would the new Bitshares Chief Economist be Salzberg or someone else employed by the firm? Seems strange to me if this were the case.

BitShares is not a subsidiary of anything.  It is a diverse community of independent players being bootstrapped by I3.  You could be a direct competitor of I3, if there was such a thing, and still be a member of the BitShares community.

The fact that we found a brilliant Professor of Economics who was
-- willing to leave academia to join the BitShares cause full time
-- associated with one of the very few Russian-speaking accountants in the world that specializes in crypto-currencies
-- co-founder of the Conscious Entrepreneurship Foundation dedicated to bringing cypto-technologies to the half-billion people living south of Miami

was just a delightfully fortunate coincidence.

Since I don't believe in coincidences, I can only conclude it was Meant To Be.  :)



Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline CWEvans

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Re: Is Bitcountant really an "external" accounting firm?
« Reply #8 on: April 15, 2014, 10:56:04 PM »
Since Bitshares is a subsidiary of I3, your positions with Bitshares and Bitcountant doesn't generate a conflict?

Not accusing anything, just wondering.

Bitcountant has been serving Bitcoin entrepreneurs since July of 2013. Angelina Pluzhnyk is the principal, and I assist with finance and write the occasional R script to calculate capital gains for day-traders. Clients who need help negotiating with the IRS can be referred to our third partner, who is conversant in Bitcoin but not active here.

If BitShares replaced Bitcountant with another accountant, it would be disappointing but not devastating. As I indicate above, there really isn't all that much to do for BitShares. AGS contributions come in; BTC and PTS get spent.  There isn't much to it.

When people here start generating revenue with BitShares DACs, Bitcountant is available for them, as well.

My role with BitShares is to analyze the economics of what Dan and the other developers are creating, and to document various aspects of DACs from the perspective of accounting and finance. Standard textbook models to not reflect DACs very well, and it is a rare opportunity to be on a first-name basis with the leading names in a truly new industry.

As Stan put it, it seems if Bitcountant were replaced by Deloitte, would the new Bitshares Chief Economist be Salzberg or someone else employed by the firm? Seems strange to me if this were the case.

I've heard the phrase Gig Economy used to describe today's labor market. Not since the 1960s has lifetime employment with a single, large firm been the norm in the USA. Today, we are moving beyond the serial-employer career to the parallel-client career of the itinerant professional.

These days, my time is taken up predominantly by BitShares with the odd consulting job here and there.


 

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