Drew Bernstein, Co-Managing Partner, Marcum Bernstein & Pinchuk LLP: Interviewed by International Business Times On Doing Business in China
By Sophia Meng
Drew Bernstein is the co-managing partner of Marcum Bernstein & Pinchuk (MarcumBP), a PCAOB-registered accounting firm headquartered in New York. MarcumBP is one of the largest middle market accounting firms servicing China-based, US publicly traded companies. MarcumBP currently represents over 50 Chinese companies and many of the first and second tier investment banks. The firm employs approximately 75 Chinese workers in four local offices (Beijing, Hangzhou, Guangzhou and Shanghai), with coordinated services throughout the world. Bernstein, who married a Chinese woman from Beijing, has travelled around 100 times to China over the past 10 years.
IBT interviewed Bernstein at the China Venture Capital & Private Equity Forum 2011 at the Westin Times Square Hotel in New York City.
IBT: Do you regard yourself as competitors of the “Big Four” accounting firms (Deloitte LLP, Ernst & Young LLP, PricewaterhouseCoopers LLP and KPMG LLP)?
Drew Bernstein: No.
The “Big Four” are largely considered the most credible companies in the accounting industry. What makes them the most credible is their size. That’s why they’re called the “Big Four”, not the “Best Four”, not the “the Most Efficient Four”. That kind of scale and size is limited to a few firms. I am not saying they’re the best in everything they do. But generally speaking they’re the most credible firms. No doubt.
At Marcum Bernstein & Pinchuk, we want to present ourselves in a similar way, as an alternative to the “Big Four”. Our partnership does about $300 million (U.S.) a year in revenue and we employ about 1,500 people. We audit around 100 companies, we carry insurance. So we’d like to say we offer a lot of characteristics of the Big Four, but in a different level. We consider our clients to be middle market clients, and the Big Four tend to work with very large companies.
We actually work together with Big Four firms very often. Many of our clients require a bigger accounting firm as they grow, so we help them to make that transition. In other cases, companies may not yet meet the requirements of the “Big Four” or cannot afford for their fees at the time and they refer them to us. And hopefully one day we can help them mature and they can go back to the “Big Four”. So I don’t see us as competitors.
IBT: How many clients do you have in China and how do you work with them?
Drew Bernstein: We’re currently representing in various industries about 50 Chinese companies in total. We help our clients in different ways because we provide different services. For about half of the companies, we actually audit and sign their financial reports. For the other half, we act as internal consultants. Many of them are using the “Big Four” so we help them with internal consultancy. We do a lot of due diligence work on these companies and we can also help with advisory and consulting services during times of crisis management, such as companies who may be attacked by shorts or become involved in audit investigations. As the audit chairman for three large Chinese companies, one of which is among the most well known short attack cases, I have actually been involved in one of the largest independent investigations in China and the claim against the company was found to have no basis at the conclusion of the investigation.