Following the Money: The Inside Story of Accounting's First Mega-Merger.

Following the Money: The Inside Story of Accounting's First MegaMerger, by Samuel A. Cypert, AMACOM division of the American Management Association, 135 West 50 Street, New York, New York 10020, 1990, 278 pp., $24.95.

In 1987 KPMG emerged as a new international accounting firm with $2.7 billion in operating revenue and a staff numbering over 60,000, rendering services in 88 countries. Following the Money chronicles the key people and the methods they used to pool Peat Marwick and Klynveld, Main and Goerdeler (KMG) into today's firm.

Samuel Cypert, director of communications for MASCO Corp., was director of communications for Peat Marwick at the time of the merger. He focuses on the personal stories of the five men who brought these two giants together.

The author recounts how these men overcame international boundaries, brought together vastly different organizational structures (Peat Marwick's operations being far more centralized than KMG's), defied traditions (Peat Marwick presented itself as one firm while KMG'S member firms preserved their autonomy), made allies out of competitors and amalgamated two international networks into a single worldwide organization encompassing the cultures and values of both firms.

John Palmer, executive partner of KMG'S Canadian firm Thorne Riddell, is identified as the catalyst. His firm's near merger with Ernst & Whinney accelerated the sense of urgency surrounding what was the second attempt at merging Peat Marwick and KMG.

Larry Horner, chairman of Peat Marwick Mitchell & Co., orchestrated the necessary meetings and held the negotiations together. (Horner is now the chairman of KPMG.)

Jim Butler, senior partner of Peat Marwick's Continental European firm, resolved differences with KMG'S firm in the United Kingdom, Thomson McLintock.

Hans Havermann, chairman of the managing board of directors of KMG'S German firm, Deutsche Treuhand-gesellschaft, reconciled the two firms' German affiliates on issues such as partnerships versus corporate entities, disparities in partners' compensation and varied partner-to-staff ratios. This task was especially challenging given that Peat Marwick was a general partnership while KMG'S DTG was a corporation with half its shareholders outside of the organization ! The solution called for Peat Marwick's affiliate to be acquired as a subsidiary of DTG for cash and to be fully absorbed into DTG by 1992. The cash payout also served to equalize the compensation differences among the partners.

Last but certainly not least among those who shaped the mega-merger was Johan Steenmeijer, chair of KMG'S executive committee. Due to his persistence, the arrangement resulted in a truly merged international firm, rather than merely the acquisition of one firm by another.

Read Following the Money not only because of its dramatic personal stories but because the author shows how businesses, by following a well-conceived strategy of growth, can overcome the problems posed by geographic boundaries and national prejudices and take their operations to unprecedented heights.

Robert J. Dunlevy, CPA 

School of Business and Management

Temple University

Philadelphia, Pennsylvania

BOOKS RECEIVED

Organizational Documents: A Guide for Partnerships and Professional Corporations, by Mark F. Murray, American Institute of CPAs, 1211 Avenue of the Americas, New York, New York 10036, 1990, 124 pp., $25 ($20 for Institute members).

Is management of an accounting practice guide was designed to make practitioners aware of the many issues that must be considered before deciding whether to set up a partnership or an S corporation, along with the elements that should be incorporated in well-drafted documents to establish such entities. A comparative analysis of the pluses and minuses of each type of organization also is provided. Examples of partnership and S corporation documents are contained in the appendices, along with sample buy-sell agreements and employment contracts.

This is must reading for those considering opening a practice and those who think their documents may need revision.

Workouts & Turnarounds: The Handbook of Restructuring and Investing in Distressed Companies, edited by Dominic DiNapoli, Sanford C. Sigloff and Robert F. Cushman, Business One Irwin, 1818 Ridge Road, Homewood, Illinois 60430, 1991, 778 pp., $75.

Attorneys, accountants and other specialists contributed articles to this book dealing with financially troubled companies. There are essays on recent trends in the field of liquidations and reorganizations, tax issues, the roles that accountants and lawyers play in representing the different factions, and investment opportunities in troubled companies. The articles are generally well written and deal with practical, relevant issues. Accountants and attorneys who regularly deal with bankruptcy and reorganization matters will want to examine this book.

Accountants' Legal Liability Guide, by George Spellmire, Wayne Baliga and Debra Winiarski, HBJ Miller Accounting Publications, Inc., 1250 Sixth Avenue, San Diego, California 92101, 1990, paginated by section, $40.

This is an excellent resource for CPAS who wish to minimize their exposure to the ever-growing threat of lawsuits. The authors, attorneys experienced in malpractice defense, examine the different areas where accountants are at risk of legal action. They discuss numerous ways that CPAS can reduce their liability exposure on various types of engagements, including compilations and reviews. The legal basis of accountants' liability under common and statutory law receives extensive treatment, including analyses of many important cases. The authors also discuss many cases that have been settled out of court. Recommended reading for all CPAs.

Low-Income Housing Tax Credit Handbook, by Michael J. Novogradac and Eric J. Fortenbach, Clark Boardman Company, Ltd., 375 Hudson Street, New York, New York 10014, 1990, paginated by section, $95.

This reference book covers the complex tax provisions relating to low-income housing credits. The authors also discuss changes enacted in 1989, which extended the act through 1990. They provide a list of state allocation authorities, the names of important syndicators and several compliance checklists in the appendices. Accountants with clients who qualify for this credit may want to acquire this book.

The Federal Data Base Finder, 3rd ed., by Matthew Lesko, Information USA, Inc., P.O. Box E, Kensington, Maryland 20895, 1990, 571 pp., $125 (book and diskette $325).

This volume is a convenient listing of federal databases and files that can be purchased by the general public. The databases are listed by the agencies responsible for generating and maintaining them. Technical information on the structure of each file is provided along with price and ordering information. Some of the files contain up-to-date information while others may be 10 or more years old.

Containing the Health Care Cost Spiral, by Mary F. Callan and David C. Yeager, McGraw-hill Publishing Company, 1221 Avenue of the Americas, New York, New York 10020, 209 pp., $29.95.

Spiraling healthcare costs have become a major problem for U.S. companies and a key issue in labor-management relations. Callan and Yeager, urge organizations to establish insurance committees with representatives from employees, managers and their insurance carriers. Such groups should obtain cost data and determine employee preferences; seek the advice, if necessary, of consultants; and devise innovative changes to best match available funding with flexible, cost-effective delivery systems. Larger companies may want to hire a benefits management specialist to help educate employees about their benefits, particularly their options.

The authors provide in an appendix a brief outline of a number of possible benefits programs with varying degrees of flexibility and coverage. This is a good introductory book on a subject that should