Jennings Finds Happy Medium
Jennings actually set out to pursue the study of economics, then moved on to the study of law. In his junior year of college he switched to the field of accounting.
It was “the people side of the business” that attracted him to the field, he said. He had become acquainted with some CPAs who worked at what were then the “Big Eight” accounting firms.
What he discovered was that a lot of people think of accounting as just a numbers game, but it’s actually a very interpersonal business.
“What we do is technical but it’s a lot of interviewing and a lot of face-to-face client interaction. Quite frankly, I came to the realization that I liked sales but I didn’t like selling products. So this is a wonderful happy medium.”
He joined Ernst & Young’s predecessor, Ernst & Whinney, in 1986 following his graduation from Penn State University.
Jennings moved up in the ranks of the firm’s audit practice over the five years he spent in Ernst & Young’s Philadelphia and Boston offices.
“I happened to meet a Grand Haven, Mich., girl at a training session,” Jennings recalled. “She was working in our Boston office at the time, so I transferred up to Boston.”
In Boston, he worked on large, multi-national company accounts. His biggest client was Reebok International.
He and the young woman from Grand Haven eventually married. They moved to West Michigan in 1991 and Jennings joined the firm’s local office.
“It was kind of a nice fit because one of my first clients here was Wolverine World Wide, which is in the footwear business, as well. I’ve gone to great lengths to stay in West Michigan. We love the people. It’s a great place to work and a great place to raise a family.”
Another of his local clients is Family Christian Stores, the largest retailer of Christian books and products in the country. Family Christian is venture owned, and a few years ago it had an idea for a sister company — an Internet start-up called iBelieve.com Inc.
In 1999 Jennings signed on as vice president and chief financial officer for iBelieve.com.
“At that point in time the company had about $30 million in funding; it was a great opportunity and a lot of fun. We ended up having about 100 employees. I generally refer to the experience as my ‘MBA.com’ because there were a lot of good life lessons in that process.”
As one of the key people on the iBelieve.com leadership team, his responsibilities were many.
He prepared the business plan, secured funding, helped lay out the strategic vision for the company, built a finance team, managed a staff of 30 IT people and had responsibility of all human resource activities and board and shareholder communications.
He also led the folding down of the business in October 2000 after the company was unable to secure additional long-term funding. He recalled that his friends at Ernst & Young served as a support group for him while iBelieve.com was going out of business.
“It was a great experience from the standpoint of building a company from scratch, raising money and then going through the hard part of winding it down and laying off employees.”
His two-year stint with iBelieve.com also changed his perspective.
“When I returned to E&Y I had a much greater appreciation for what my clients are going through, and a lot of my clients have told me that. That’s probably been the most defining component of my career in the 18 years that I’ve been at it.
“I think I came out of the back side of that with the realization that you have to roll with the punches. There’s always tomorrow.”
Jennings returned to E&Y in 2001 and set to work establishing the company’s Business Risk Services and Internal Audit Practice in West Michigan.
“We saw there was kind of an opportunity for what I would call middle market consulting, and very quickly that evolved — because of the Sarbanes-Oxley Act and a lot of other things — into an internal audit offering as well.”
In addition to internal auditing, the practice offers process improvement and risk management services to a variety of industries, among them global retail consumer products companies, health care, higher education, and both publicly and privately held companies.
Jennings also is lead audit executive and engagement partner on audits of both publicly and privately held companies and organizations.
He believes the business risk services group is probably going to be one of the fastest growth areas for the firm.
The big thing public companies are facing right now is “internal control reporting under Section 404” of the Sarbanes-Oxley Act, he said.
The act requires that, as of June 30, public companies have to issue an opinion stating that not only are the numbers right but all the internal controls are solid.
“Some of this reporting that management is going to now be required to do on an ongoing basis — certifying the accuracy of financial statements and putting all these new processes into place or documenting existing processes — that really is a tremendous amount of work. The average company will be spending thousands of hours, along with the help of professional services firms, just to comply.”
But the biggest impact of Sarbanes-Oxley has yet to come, he said. Effective Dec. 31, 2004, all the calendar-year companies will have to comply.
A lot of Jennings’ responsibilities these days revolve around building and maintaining client relationships and training young CPAs and managers.
“That’s just part of the public accounting experience — you never stop learning,” he said.
He still does a fair amount of recruiting, too.
“I firmly believe that this is the most exciting and interesting time to be in public accounting,” Jennings remarked.
“While a lot of people from the outside look at this and think it’s a pretty tough time with what happened to Arthur Andersen and all the criticism accounting firms are getting from the media, I think if we get 18 months out, we’ll look back at this and say this has really been a very good thing to go through.”
And while the image of accountants in general may have been tainted by the Arthur Andersen affair on a national level, Jennings doesn’t think that’s so in the West Michigan market.
“I think everybody can point to CPAs that they know locally and hold in the highest regard. People recognized that it was a terrible thing to happen to a company, but they didn’t have any concerns about the quality of people serving them locally.
“Relationships are so important in West Michigan that I think that CPAs across all the firms do a very good job of spending a lot of time with their clients and giving them the comfort that they’re getting good service.”
To be sure, the Andersen fiasco changed the CPA’s world, he said, by making accounting firms much more attuned to conflict-of-interest. And though firms have always focused on quality, they place even more emphasis on maintaining the highest-quality audits.“Clearly, quality is the A No. 1 priority we all have — maintaining the highest quality and rebuilding the industry’s reputation.”