As last month's one-two punch of Hurricane Irene and Tropical Storm Lee devastated the East Coast with massive flooding, widespread power outages and as-yet-uncalculated billions in damages, many of that region's accounting firms were forced to implement disaster recovery programs before business slowly returned to normal.

At New Jersey-based regional CPA and business advisory firm WithumSmith+Brown, managing partner Bill Hagaman said that some of the firm's partners had issues with flooding in their homes, and several WS+B offices had lost power due to storm damage at the local power company's substation.

"One good thing is that our IT group moved us a long time ago to the cloud, so everybody in the office has remote access to all relevant client information and data," said Hagaman. "We basically told our people that if they can't get in or have other issues, to use their discretion and they should work from home or make up the time later in the week."

Hagaman explained that he had dealt with flooding problems of his own in his basement, and was forced to work from home.

Howard Cohen, chairman at EisnerAmper, saw differing conditions at his firm's offices in New York, New Jersey and Pennsylvania. One office in Hackensack, N.J., was forced to close because it was inside a flood zone that remained closed, but re-opened a day later. Another office in Bridgewater, N.J., experienced on-and-off power problems when the server room overheated. But other locations in Long Island and Philadelphia were open for business one day after Irene barreled through. Cohen credited the prep work done by the partners and staff over that weekend with helping keep the firm running.

"They were out checking the systems during the storm," he said. "The partner-in-charge was here in Edison on Sunday [the day Irene struck] because there were flooding problems in the past. They're dedicated and they took measures like taking all the files off the first floor on Friday. We also sent out a message to make sure all the professionals were prepared, just like we do with snowstorms. It's always clear that safety comes first. We tell them to prepare by telling them to take their work home. We get through these catastrophes like a family, like a team."

 

ONGOING RELIEF EFFORTS

Though accounting firms struck by emergencies like Irene and Lee have to help themselves, they can also generally be counted on to help others - the profession has traditionally been a "first responder" in helping both countries and communities recover from natural disasters.

And in response to what appears to be an increasing rash of destructive weather events, many of America's biggest accounting firms are digging even deeper to provide aid for those in need.

Last year, for example, when a 7.0 magnitude earthquake devastated Haiti, the profession responded with an outpouring of donations to support relief efforts.

Crowe Horwath launched an ambitious fundraising drive that collected $109,285 for Haitian earthquake relief efforts, including more than $59,000 in donations from 400 Crowe employees, plus another $50,000 in matching funds from the firm.

Seattle-based Moss Adams responded with $150,000 in contributions to help relief efforts by such groups as Medical Teams International, Mercy Corps and the American Red Cross, while other major accounting firms - including Deloitte, Ernst & Young, KPMG and Grant Thornton - launched similar fundraising drives to assist in Haiti.

PwC, meanwhile, engaged in a more "boots on the ground" role. Working directly with government agencies, PwC contracted to oversee the delivery of hundreds of tractor trailers carrying food, water, blankets, hygiene kits and other life-saving commodities to affected communities in Haiti.

Closer to home, when killer tornadoes ripped through Joplin, Mo., earlier this year and virtually leveled the town, CPAs at Springfield-based BKD donated more than $53,000 to that relief effort. Those contributions from the firm's partners and employees came in addition to another $100,000 from the BKD Foundation that was earmarked to help United Way clean-up and recovery activities in Joplin.

 

A BIG RESPONSE TO KATRINA

Six years ago, the profession responded with hefty donations for relief activities in Gulf Coast communities after Hurricane Katrina caused widespread damage in that region.

Big Four firm KPMG alone raised more than $1.2 million in firm and individual donations to assist relief activities after that massive hurricane. It also moved aggressively to help hundreds of its own employees in New Orleans and other impacted areas, many of whom had lost their homes. A "Helping Hands" Web site was established to collect donations of clothing, diapers and other essentials for displaced KPMG employees.

The American Institute of CPAs put its muscle behind the relief effort as well, collecting millions of dollars in donations from accountants to its "Support of America Fund" to underwrite relief efforts following Hurricane Katrina and subsequent natural disasters.

Although most of the accounting profession's support for disaster relief efforts has come in the form of cash donations, CPA firms have also found other ways to contribute. PwC, for example, sponsored 100 college students who participated in service projects to help communities and small businesses in New Orleans recover from Katrina. KPMG dispatched a team of 20 professionals from the firm's Philadelphia audit group to help construct homes for victims of Hurricane Katrina in Louisiana.

Meanwhile, the AICPA published a Disaster Recovery Guide designed to help Americans who lose their homes or are displaced by storms, floods, earthquakes or other natural disasters.

But the major CPA firms are not the only ones stepping up to the plate when disaster strikes. Brooklyn, N.Y.-based Barry's Accounting Services is urging its tax preparation clients to make deductible donations of canned food, clothing and cash to assist relief efforts for communities in the Caribbean. And many independent accountants in small firms across the country are pitching in with contributions through the AICPA's relief fund.

Until recently, however, the accounting profession's contributions toward disaster relief efforts have been only a small sliver of the profession's philanthropic donations.

But with the frequency and severity of natural disasters on the rise, the industry now appears to be shifting its focus to provide more assistance to communities ravaged by hurricanes, tornadoes, earthquakes and floods. The change in emphasis became apparent as early as 2004, when a devastating tsunami swept through Thailand, Indonesia and other Asian countries where major U.S. accounting firms maintain a high-profile presence. In the wake of that disaster, KPMG alone raised $5 million to fund relief projects in some of the hardest-hit areas.

Since then, America's largest accounting firms have chipped in millions more to assist relief and recovery activities on behalf of the victims of wildfires in Australia, flooding in Pakistan, tornadoes in New England, and this year's catastrophic earthquake and tsunami in Japan.

Besides donating money to support relief activities, hundreds of partners, staff accountants and other personnel at major CPA firms have signed on as Red Cross volunteers specially trained to help their own communities recover from natural disasters.

Under the six-year-old "Ready When the Time Comes" program, the Red Cross partners with corporate employers across the country to train company employees in disaster recovery essentials such as damage assessment, bulk distribution of supplies, mass feeding, and shelter management.

Employee volunteers from accounting firms participating in the RWTC program - including Deloitte, Ernst & Young, KPMG and PwC - have agreed to donate their time and energy in support of Red Cross disaster relief efforts.

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