Citrin Cooperman's Impact Report

UNITY. POWER. PURPOSE. CITRIN COOPERMAN’S IMPACT REPORT

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CITRIN COOPERMAN’S IMPACT REPORT

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Table of Contents

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A Message from Our Executive Chairman​

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A Message from Our CEO​

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Focused on Adapting to Change

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Forward Movement​

10

Integrations​

28

Embracing Change – Industry Focus

30

Giving Back​

42

Rankings and Awards

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CITRIN COOPERMAN | CITRINCOOPERMAN.COM

Unity. Power. Purpose.

Citrin Cooperman’s Impact Report showcases the incredible milestones and achievements our firm has experienced over the prior twelve months and highlights a new theme annually that captures the essence of our firm. Emerging from the uncertainty of a worldwide pandemic which left indelible marks on our professional and personal lives, it is only fitting that this edition’s theme is Unity. Power. Purpose (UPP).

In the face of countless challenges and continual change, our dedicated team has proven the ability to thrive with an immense, powerful collaboration that uniquely serves our clients. Our principles are updated annually to help our professionals respond to the current environment, foster collaboration, and ensure a positive workplace that ultimately helps us to provide the highest quality services to our clients.​​ Throughout this Impact Report, we will share our collective challenges, successes, and insights as we prepare for another year of growth and achievements.

CITRIN COOPERMAN’S IMPACT REPORT

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A Message from Our Executive Chairman Joel A. Cooperman The accounting industry continues to change and evolve very quickly as companies are expanding their breadth of service offerings to their clients. Those services not only include the traditional accounting and tax compliance services, but also specialized tax and business consulting services designed to help clients increase their profitability and market share.​ In order to help our clients in 2023, we continued our mission to build our business with quality accounting and consulting firms that had partners and staff dedicated to high-end client service. In 2023, we were able to complete transactions with great companies including Berdon, Gettry Marcus, Gold Gerstein Group, Chapman, Bird & Tessler, and FMT Consultants. The first quarter of 2024 has started out strong with the additions of Coleman Huntoon & Brown, Keefe McCullough, and MIBAR with more to be announced as the year progresses.​ The joining of these firms with Citrin Cooperman has greatly increased our presence in the New York metropolitan area as well as in Philadelphia, Southern New Jersey, and our newest location in Chapel Hill, North Carolina. We expect to add more locations and enhanced service offerings throughout 2024.​ On behalf of our partners and staff, we wish to thank our clients and those that have supported our firm throughout the years. We hope that 2024 brings you good health and great success.

Sincerely,

Joel A. Cooperman Joel A. Cooperman

Executive Chairman

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A Message from Our CEO Alan G. Badey Rapid growth and transformation were at our core this

•

past year as we continued our journey to remain focused

with a commitment to an inclusive, collaborative

on what counts. Our firm constantly strives to evaluate and strengthen systems, technologies, and processes to

culture;​ •

best serve our clients and help our people achieve their personal and professional goals.​

clients. Citrin Cooperman prides ourselves on being

Delivering high-impact services to help our clients reach their goals;​

•

Providing the highest quality service offerings;​

•

Achieving sustainable, organic growth by expanding

Going into the new year, we are doubling down on our fundamental values to focus on our people and our

Building and developing a team of exceptional people

our capabilities; and​ •

Leveraging technology to provide transformative and innovative solutions.​

the premier strategic advisor and accountant for our clients. We accomplish this through the building and

PURPOSE: For our firm to remain a positive place to

continual development of a team of exceptional people,

work for our colleagues and continue to be a top service

emphasizing an inclusive and collaborative culture. This

provider to our clients, it is imperative that we all share

high-performing team dynamic allows us to drive high-

the same vision and firm ethos. We can only accomplish

impact solutions that help our clients achieve their most

this through the

ambitious goals.​

accountability, teamwork, common sense, leadership,

shared values

of commitment,

personal respect and humility, and open communication.​ To help ensure we stay future-ready, we have instituted a new set of firm principles: Unity. Power. Purpose (UPP).​

On behalf of Citrin Cooperman, I want to extend my heartfelt appreciation for the incredible team that

UNITY: How and where we work are forever changed due

makes Citrin Cooperman what it is — a firm focused on

to necessary responses to a worldwide pandemic. Since

quality service delivery through fostering a collaborative,

2020, our firm has experienced a shift to a primarily hybrid

supportive work environment for our staff. I am honored

model of work. Our professionals have demonstrated the

to work alongside such incredible individuals — thank

ability to effectively self-manage while working remotely

you for all you do.​

and as we continue to welcome our team back into our offices, our productivity has continued to skyrocket.

It has been even more important for the firm to foster and encourage team unity through periodic in-person meetings, social events, and routine office lunches and

Best,

Alan G. Badey Alan G. Badey

Chief Executive Officer

gatherings to encourage connection. The strength of our teams and focus on community is truly what sets Citrin Cooperman apart.​ POWER:

Citrin

Cooperman

continually

strives to

be a top strategic advisor for private, middle market companies and high net worth individuals. Our vision can only be met through the collective power we have as a firm which is achieved through:

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Focused on Adapting to Change: Our Commitment to Strategic Growth As one of the nation’s largest professional services firms, Citrin Cooperman has always been committed to thoughtful expansion and strategic growth that supports our professionals and clients. In 2023, we welcomed five incredible firms who complement and expand our geographical footprint, service offerings, and depth of industry expertise.

We started 2023 with 335 partners, 2,000 staff, and $550M in revenue. The firm entered 2024 with 450 partners, 3,300 staff worldwide, and expected revenue of over $800M. This was driven by strong organic growth and some of the most ambitious acquisitions in our history.

In 2023, the firm was thrilled to recognize the achievement of our professionals as demonstrated by the elevation of 18 new partners. Our new partners and directors span across our industries and service lines, represent the values of our firm, and are committed to fostering a collaborative, supportive workplace while delivering the highest quality service for our clients.

Many other firms in the marketplace felt headwinds on the advisory side of their business, largely due to the slowdown in mergers and acquisition activity in 2023. Since our firm is focused on serving middle market companies and high net worth individuals, we were able to moderate the effect of this global trend on the firm, as evidence by advisory growing to 17% organically while making several strategic acquisitions, for 53% total growth.

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SERVICES EXPANSION

specialty tax and outsourced finance and accounting, also

Growth has always been vital to our firm. It has allowed us

benefit from our growth and provide our clients access to

to bring new and expanded services to our clients, create

specialists that smaller firms are not able to support.

career opportunities for our people, and stay ahead of the industry in our capabilities. In the past 12 months, we were fortunate to have the team at FMT Consultants, a top technology services consulting firm based in California, join us. Combined with our existing technology offerings, the resulting Digital Services Practice now provides a full suite of technology services including NetSuite, Microsoft, and Salesforce implementation, financial planning and analysis (FP&A) implementation and consulting, and business intelligence and infrastructure solution. Eric Casazza, the previous CEO of FMT, now leads this practice group.

Our Business Management and Family Offices (BMFO) Practice, led by Managing Partner Matthew Segreto, also benefited from our targeted growth this year. Through the addition of Chapman Bird & Tessler, the firm deepened our Television and Film Business Management Practice, now led by Craig Tessler and Arnie Herrmann. Through a number of our acquisitions in 2023, we added capabilities to our outsourced Family Office Practice which now features a full suite of integrated services for high net worth individuals and families.

Our High Net Worth Individuals Practice expanded significantly with increased client bases in individuals

INDUSTRY DEPTH

in music, entertainment, film and television, financial

Industry expertise is increasingly important for our clients

services executives and owners, high net worth families,

and the specialization of our practices and professionals

and families with extensive real estate portfolios. Our

is among the things that truly sets our firm apart.

teams help these clients make informed decisions regarding complex issues including shifting values of real

The firms that joined us in 2023 and 2024 had a particular

estate portfolios, rebalancing investments due to rising

impact on our Real Estate Industry Practice, which

interest rates, evaluating the unique tax situation for new

doubled in size, as well as our High Net Worth Individuals

assets that they wanted to purchase, taking advantage of

and Entertainment Industry Practices.

the gifting exemption and preparing for its sunset in 2025, guidance on exit strategies, gifting approaches, and trust

When our industries expand, it means we are adding depth

and estate planning.

and skills to our already robust bench of knowledge. For our Real Estate Industry Practice, this means expanding

When our clients require a high level of skill for complex

our services focused on owners, property managers,

matters, we are now better equipped to respond to these

and investors. Our services within this sector, including

issues in-house.

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STRATEGIC INVESTMENTS

to enhance our service delivery and now includes over changes

300 professionals. The firm has also re-envisioned our

and improvements to how we operate and opens

approach to attracting and retaining top talent. You can

opportunities to invest in new and innovative ways. Some

learn more about the exciting investments we are making

of the highlights from 2024 include:

for our professionals in the CC LEAD and Professional

Sustainable

growth

demands

continual

Development spotlight piece on page 24.

Technology: Our

multi-year

commitment

to

the

“Dynamic Audit Solution” began to take root as we

Infrastructure: Our firm continually evaluates and

started to roll out the tools and methodology to our audit

enhances our processes and systems to maximize

teams. This defines the future of the profession and

efficiencies. In 2023, the firm has focused these

puts Citrin Cooperman at the head of the audit space.

improvements on scheduling, IT, finance, operations,

Likewise, we upgraded and added to our tax technology

new development team, software investments, data

stack, further integrating the offerings and building new

integrations, reporting analytics, a master data program

digital connectors to improve the client experience.

to optimally understand our work and service delivery to clients, audit and tax software, client experience, and

Artificial Intelligence (AI): Our firm is committed to

electronic tax returns and engagement letters.

exploring and investing in new and emerging AI to best support our strategic vision. You can read more about

We always look to make sure the growth we pursue

how we are investing in this area in our AI piece on page

benefits our people and our clients. These are some of

16.

examples of positive impacts from 2023 but there are numerous additional examples throughout this Impact

Workforce: Talent has become more difficult to attract

Report. We are fortunate to continue growing the quality

and retain in the U.S., a challenge experienced by almost

and depth of our partnership and our staff and we look

every business across every industry. Firms like ours

forward to continuing to make an impact in 2024.

have looked to other geographies to continue expanding our capabilities and support our client teams. Our India operations work in concert with our U.S. teams

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Forward Movement At Citrin Cooperman, we focus on providing highly customized solutions to our middle market clients that have long been available to large companies and ultra high net worth individuals. The foundation of these client-centric services are engagement teams that are relationship partner driven. Our clients are served by individuals with strong technical and industry knowledge who can draw from past experiences to maximize the value of our service to our clients. Our professionals obtain in-depth knowledge of each client, identify potential issues and opportunities, and consider industry and environmental factors to develop sustainable solutions that are designed for the situation and the user.

Our solutions are structured to meet individual client situations, crafting services to specific needs and objectives, helping clients convert concepts into actions resulting in maintainable and sustainable success.

TAX In 2023, we restructured our tax business unit to optimize the quality and range of solutions we can offer our clients.

We appointed prominent leaders with expertise in a diverse array of tax specialties to best support the goals of this restructuring. The firm also invested in several new technologies to hone our processes and increase accuracy including:

SurePrep: SurePrep is a front-end tax compliance technology that is designed to help alleviate compression and increase quality. This will allow our professionals to devote more time to client service, technical research, and planning.

SafeSend: SafeSend offers automated tax return and extension collating modules with integrated e-delivery and e-signature features. This will improve the client experience by providing a streamlined approach to receiving, reviewing, and e-signing tax returns and extensions.

Collating Bot: A new collating bot completed its pilot during the fall season and was developed in-house to automate our specific collating processes. This improvement will be rolled out to the wider firm for the coming tax season and will accelerate the processing and delivery of tax returns.

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ASSURANCE Citrin Cooperman’s Assurance Practice experienced a substantial influx of talent in 2023, marked by the internal promotion of seven new partners from within the firm. Additionally, the team expanded with more than 30 partners and over 175 professionals onboarded through the joining of new firms in 2023 and the first quarter of 2024.

Citrin Cooperman’s Assurance Practice, comprised of more than 125 partners and over 600 non-partner professionals, saw continued integration of our 57 India colleagues in India who all play a crucial role in our growth strategy.

In 2023, the firm’s innovation and methodology initiatives successfully rolled out “Release 3” of the Dynamic Audit Solution (DAS) to engagement teams working with commercial clients.

This rollout required significant planning to ensure that teams were well-trained in using this methodology and its companion technologies including OnPoint PCR for preparations, compilations, and reviews, and OnPoint EBP for employee benefit plans. A substantial rollout of “Release 4” is planned for 2024, particularly targeting real estate entities. The firm anticipates migrating most clients to the DAS and OnPoint platforms in 2024, with further adoption of Validis as a data ingestion tool and MindBridge as a risk scoring and data analytics solution.

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ADVISORY Our advisory services line has continued to expand with both an increase in our talent bench and the addition of new service offerings. We added talent, geographical expansion, and strength to our family office and television and film expertise in our Business Management and Family Office Practice with the additions of Berdon, Untracht Early, and other partners and professionals in New York City, Long Island, New Jersey, and Los Angeles. We expanded our technology offerings with the acquisition of FMT Consultants and Mibar, which established Citrin Cooperman’s Digital Services Practice. The addition of these services now provides our clients with the ability to work with our professionals to assess system and reporting needs, identify potential solutions, implement those solutions, and assist with the on-going support and application.

HIGH IMPACT SERVICES As complexity in the market has continued to rise, our clients have sought more sophisticated, more flexible, and more impactful services. Speed to decisions, adapting to changing conditions, and the need to access real-time data is needed now more than ever. Our services are structured to provide insights, alternatives, and solutions so our clients can focus on what counts.

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BUSINESS PROCESS OUTSOURCING (BPO)

Combining these elements and balancing return

Financial visibility through access to timely, relevant,

on

and in-depth reporting delivered by knowledgeable

support requirements, and licensing costs takes a

finance and accounting professionals are fundamental

comprehensive strategy and project plan executed by

elements of a company’s success. The nationwide

professionals who understand your business’ needs

accounting talent shortage – at all levels including

and objectives. Citrin Cooperman’s Digital Services

controllers and other high-level finance staff – has

team works with businesses to implement a custom

made these individuals difficult to find and harder to

solution that works for them. The Digital Services

retain, leaving companies without the decision support

Practice assists with the elements of technology

tools they need to take their business to the next level.

needs including system and process assessment and

In response to this dilemma, middle market companies

strategy, data management, systems and data safety

are using outsourcing to address the need for talent

and security, project management, implementation,

and flexibility now more than ever. This is where Citrin

ongoing support, and licensing assessments and

Cooperman’s BPO team can help.

maintenance.

Modern finance outsourcing solutions range from

FORENSIC, LITIGATION, AND VALUATION

low-cost transactional accounting to outsourced CFO

SERVICES (FLVS)

services and everything in between. In many instances,

The market for forensic, litigation, and valuation

outsourcing has proven to be a more efficient and

services has witnessed substantial growth in recent

effective alternative to hiring full-time staff. Outsourcing

years, driven by factors such as increasing complexity

provides access to specialized talent on-demand and

of financial transactions, market uncertainty, changing

allows businesses to get what they need, when they

regulations, and a global surge in litigation cases. As

need it and adapt quickly and efficiently as these

markets continue to advance, the value of a business,

needs change. Strategic finance outsourcing allows

security, or asset, whether measured in terms of

businesses to bring in highly specialized professionals

revenue growth, earnings potential, or market share, is

as needed, build better processes and reporting, and

profoundly influenced by prevailing macro, market, and

select and integrate the right technology – in a model

industry trends.

investment,

change

management,

ongoing

that easily scales up and down.

As external and internal factors change, so do the risks

DIGITAL SERVICES

that threaten the financial health of an organization.

In today’s market, organizations of all sizes are

During times of economic uncertainty, the risk of falling

determining how to best optimize and evolve their

victim to fraudulent activities and greater scrutiny of

technology platforms to gain a competitive advantage.

financial performance is heightened. Uncertainty in

Real-time integration and cross platform analytics are

the context of changing economic and geopolitical

needed to connect business processes across systems

conditions is also attracting even more attention

and communicate instantly with customers, vendors,

to portfolio valuation from investors, analysts, and

and partners. At the same time, many organizations have

business leaders. By staying ahead of market trends,

legacy systems that are creating efficiency issues and

organizations

risk concerns as system security and privacy protection

capitalize on emerging opportunities, and increase

takes center stage. While organizations are evaluating

their valuations. From small-scale matters to highly

the current landscape, software manufacturers are

complex issues, Citrin Cooperman’s dedicated FLVS

rapidly releasing AI enabled programs to assist in

team can help.

can

position

themselves

favorably,

content generation and predictive analytics.

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TRANSACTION ADVISORY SERVICES Even with the slowdown of the mergers and acquisitions (M&A) market in 2023, private equity funds and independent sponsors who are focused on the lower middle market continue to source favorably priced transactions but are facing a greater risk of broken deal costs. Citrin Cooperman helps our clients assess the financial risks of deals through staged financial, tax, and IT due diligence processes. Beginning with an understanding of the transaction objectives and the industry, our professionals provide support and insight to deal teams as they navigate the intricacies and nuance of the transaction.

As we look ahead, we expect to see a rebound in M&A transactions. One of the primary business drivers in 2024 is a focus on improving technology capabilities and innovation to quickly capture, interpret, and process information. Business leaders are looking to incorporate AI in M&A strategies and leverage these technologies in their deal sourcing and processing.

BUSINESS MANAGEMENT AND FAMILY OFFICE (BMFO) The BMFO Practice added 35 professionals and 11 partners in 2023 who approach finances, wealth management, family, and business needs holistically. Our new partners and professionals bring decades of experience working on high profile matters that impact our clients’ daily lives.

Our practice has also significantly increased our reach, depth, and breadth within the film, television, and music space.

Working closely with our colleagues in tax and specialty advisory services, we utilize our teamoriented resources to create solutions to complex issues including state, local, and international tax matters and valuation and wealth transfer planning. Providing tailored, professional, and personal support for client’s financial needs, Citrin Cooperman’s Business Management and Family Office Services offers the comfort and support of experienced professionals that understand the complexities and requirements of success, family dynamics, and business needs.

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CITRIN COOPERMAN’S APPROACH TO AI Artificial intelligence (AI), particularly generative AI (GenAI), has been the hottest technology topic recently, dominating technology conversations at accounting and advisory conferences, in professional publications, and in podcasts and interviews about the industry.

GenAI may no longer be in its infancy, but the way it is being integrated into other toolsets is only starting to take place in a meaningful way now. Some of the capabilities the public has already seen from GenAI include: •

Accelerating research

•

Writing copy in a variety of different styles

•

Generating pictures and illustrations

•

Generating code for analytics, custom programming, and even Excel

•

Creating natural sounding text-to-speech

Citrin Cooperman has built AI into several of our processes already and is engaged with our software vendors to quickly adopt the AI and machine learning (ML) features they roll out in some cases before they are commercially available to the marketplace.

Our current investments in AI fall predominantly into the categories of upskilling our professionals, running AI pilots and partnerships, and technology readiness.

UPSKILLING OUR PROFESSIONALS Approximately 50 personnel are currently enrolled in our AI innovation program including members of our client service teams, our internal functions, and our technology team. The first phase of training was completed in December 2023 and the newly trained personnel are now working in small groups to develop ideas and pilot concepts for how to apply AI to our business.

This team is now developing use cases for AI that will have the highest impact for our clients and our people and in the process are undergoing additional training, vendor demos, and self- learning to drive some of these ideas to a true pilot As our vendors evolve their solutions and as other software developers emerge and evolve, our innovation group will be able to get early access to and pilot these tools within their teams.

AI PILOTS The firm is running a variety of pilots and structured innovation programs related to AI. These include pilots that will increase and improve our marketing content, improve the speed at which we can produce policies and procedures, and overall delivery of client service.

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DESIGN PARTNERSHIPS There are many promising ideas on how AI can be used for our business from large vendors, but many are also coming from well-funded startups. While none are quite ready for full launch, there are startups focusing on point solutions within tax, assurance, and advisory areas. These companies are eager to work with mid-sized and large firms to get feedback on their products, understand enhancements and features that real users will require, and help with developing their product roadmaps. Participating in these design partnerships provides firms like ours with advance access to these tools and influence over the future of the product.

We are currently working on three potential design partnerships: one for assurance, one for tax compliance, and one for tax research. These are all with well-funded, independent technology companies and we are hopeful that we will come to terms with at least one of these companies. We continue to engage with a wide number of potential design partners in the AI space.

READINESS All AI products will require our data and core systems to be of high integrity, well integrated, and well supported. Data readiness is a non-negotiable enabler and master data is the foundation for this. This includes data related to clients, employees, engagements, and service lines, as well as other core data elements. Our internal teams have done an excellent job marshalling our master data to a reliable, stable, and maintainable state and we have improved the integration of this data across our various systems. There is still work to do in 2024 but we’ve made substantial improvements in the last 12 months.

We have conducted readiness activities on our existing applications and infrastructure and have a number of initiatives that will put us in a strong position to use these new technologies.

This has resulted in standardization of file storage tools, security software, automation software, and other core elements of our software which will allow AI to consume data from each point in our environment.

Finally, our assurance and tax teams are rolling out updated software including Caseware Cloud, SurePrep, Safesend, Datasnipper, and various bots and automations which are all necessary to make our teams more efficient, drive and automate standard processes, and communicate our data in a way that AI tools can consume.

The firm’s approach to integrating AI is to improve our processes and efficiencies, giving our professionals more time necessary to focus on higher-level work and impeccable client service delivery instead of being saddled with rote tasks. We are confident that our approach to defining, testing, and implementing AI that best supports our people and clients will enhance our capabilities and allow us to grow in ways we may not have previously thought possible.

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FOCUSED ON THE FUTURE Uncompromising Quality, Unparalleled Professional Excellence As recognized leaders in our profession, it is paramount that we prioritize risk awareness and adherence to ethical standards, both individually and collectively. Doing so safeguards Citrin Cooperman’s reputation and maintains our clients’ trust.

Citrin Cooperman’s Office of Risk Management is focused on: •

Risk mitigation.

•

Regulatory compliance.

•

Building client trust by demonstrating a commitment to risk management and showcasing a proactive approach to safeguarding their interests.

•

Continually enhancing our reputation by maintaining a strong risk management framework that contributes to our firm’s ethos and professional standards.

•

Promoting employee engagement, establishing a sense of security among our team, and fostering a positive work environment through a shared commitment to our risk management protocols and strategic vision.

•

Proactively addressing risks that contribute to Citrin Cooperman’s long-term sustainability, ensuring our ability to successfully navigate challenges in a perpetually changing business environment.

Our risk management team is a dynamic force dedicated to fortifying the foundation of our firm. The team is comprised of skilled professionals with diverse experience, including independence, ethics, and privacy – an evolving area that the firm continues to focus our attention on. Our professionals’ and clients’ confidentiality and security of sensitive information is our top priority.

Our risk management team works closely with our IT professionals and the Office of the General Counsel. Together, these professionals foster trust, minimize risks, and maintain our firm’s strong ethical foundation.

In 2024, we will continue to expand our firm’s risk management team, further demonstrating Citrin Cooperman’s commitment to resilience and proactive risk mitigation.

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RESOURCE MANAGEMENT AND TALENT ACQUISITION We have made vast improvements in our resource management function this year. From revising and rolling out formalized staffing processes for assurance, tax, and advisory services, to implementing one platform for staff scheduling for each service line, our improvements help us with utilization and assessing staff capacity more effectively. We also have dedicated resource managers assigned to all office locations in these service lines for further support and to focus on staff engagement scheduling.

In August 2023, we also executed a skills inventory database which allows our staff to self-assess their skills and abilities as well as list interests and other areas of focus they want to develop which further helps our resource management align staff skills and abilities to client engagements.

In our talent acquisition area, we realigned our team to support respective service lines for better understanding of the technical needs of our roles. We incorporated a recruitment process outsourcing model where we have a third party help us find talent by researching and sourcing candidate profiles and reaching out to prospective candidates which has allowed us to reduce contingency recruiter fees. There is also better collaboration between our U.S. and Citrin Cooperman India (CCI) recruiting teams which helps ensure our requisitions are filled timely with qualified applicants.

TALENT MANAGEMENT AND DEVELOPMENT We are committed to investing in the development of our talent and sustainability of the firm. We have gained great momentum this year in establishing processes and building programs.

Some of our focus areas included a new partner promotion process and launching a new partner development program, CC SOAR. We will continue these initiatives in 2024 and are planning for more aspects of development at different levels starting with director workshops and mentoring.

This systemic development will help the firm with future readiness and success.

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CC EDGE Citrin Cooperman’s Empowering Diversity and Gender Equality Program (CC EDGE) strives to establish a firm culture that enables each individual to create the career that they want in a safe, respectful, and inclusive workplace that provides for equal opportunity, fairness, and work-life flexibility. We continue to work towards establishing this culture by providing a variety of insightful workshops, programs, and events within the firm to boost awareness of our mission and strengthen the skills of our professionals.

To carry out its mission, CC EDGE provides ongoing training and learning opportunities, which include mandatory attendance for classes on topics like unconscious bias and voluntary attendance for virtual presentations and inclusiveness trainings for all CC EDGE members. The CC EDGE corporate portal has a large library of resources relating to all aspects of diversity, equity, and inclusion (DEI), to inspire, encourage activism, share experiences, and to learn how to be an ally. This includes listings of associations, books, news, articles and research papers, and a calendar of local and national annual DEI events.

Here are some of our accomplishments in 2023: A new employee resource group (ERG) was launched to focus on members and allies of the LGBTQ community Annual Women at the Wheel event was held in multiple geographies Conducted a firm-wide International Women’s Day campaign CC EDGE local offices launched multiple events to share the mission with all members of the firm Celebrated different Heritage Months internally and externally through our Heritage Campaign West Coast offices honored Women’s History Month through leading a clothing and household drive for a local women’s shelter Our parents ERG (POWER) led multiple webinars catered towards working parents NAAAP (National Association of Asian American Professionals) event held in the Philadelphia office for AAPI Month CC EDGE newsletter continued to be distributed monthly PRIDE campaign led by the OPEN (Our Professionals Engage Nationwide) ERG Backpack and school supply drives held across multiple offices to support economically disadvantaged students

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In 2024, CC EDGE is focused on providing consistent DEI training for both committee and non-committee members, formalizing CC EDGE committees within all of our offices, continuing to highlight our existing Employee Resource Groups (ERGs) and launching more as the need arises. Most importantly, we will aim to continue to foster an inclusive space for everyone.

Through our year-round events and initiatives, we help our talent build and nurture strong professional relationships and celebrate our community culture.

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CC INSPIRE Citrin Cooperman’s Inspire program is dedicated to creating an engaging and meaningful employee experience as we drive our mission, values, and our future together.

Through our year-round events and initiatives, we help our talent build and nurture strong professional relationships and celebrate our community culture.

Working in partnership with CC-EDGE, CC Inspire coordinated a variety of events in 2023 including:

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Promotion Day Celebration: Firmwide celebration for our 300+ employee promotions.

Mental Health & Wellness Spotlight: May event calendar with a variety of resources including mental health, nutrition, and wellbeing education.

Busy Season Balance: A variety of brain breaks during busy seasons including smoothie bars, group outdoor activities, Wine Down Wednesdays, and more.

Gerry Lotenberg Summer of Service: Over $50,000 in donations raised through employee contributions and firm match in partnership with over 20 organizations.

Employee Resource Group Spotlights: A variety of in office events spotlighting and celebrating our ERG’s.

Holiday Traditions: Our second annual holiday tradition celebration with cookie decorating, gingerbread house building, tradition sharing, and holiday donation drives.

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CC LEAD AND PROFESSIONAL DEVELOPMENT This year, CC LEAD offered our most comprehensive and dynamic learning curricula to date, with a focus on technology, strengthening our ability to serve clients, enhancing our culture of learning as our competitive advantage, and investing in our people to provide them with career advancement opportunities to develop as leaders.

Below are some of the firm’s key accomplishments from 2023 that included learning and development enhancements to our audit, tax, business advisory services and advisory service line training, as well as our industry, leadership, and core consulting training.

•

Invested in learning technologies that provides us with the ability to offer micro-learnings, podcasts, and online courses and enhance both the quality and quantity of our virtual and hybrid classroom offerings.

•

Enhanced our leadership development and core consulting skills training to include two new courses with customized content, developed internally.

•

Developed several new courses to further deepen our industry knowledge in real estate, financial services, and manufacturing and distribution.

•

Improved our core attest services by imbedding the competencies to audit information technology general controls into each level of audit training.

•

Delivered a robust offering of systems/software/technology training to support the firm as it continues to embrace the use of new and evolving tools and technologies.

•

Collaborated with our assurance practice to deliver training to introduce a new audit methodology and application with a focus on new hire training that included a “real life” audit simulation.

•

Supported our tax practice in their adoption of new systems and expanded our specialty service training.

•

Designed and developed a comprehensive professional development curriculum for our advisory practice, focusing on the competencies of each service line. Training programs were internally developed in 2023 and will be delivered firmwide in early 2024.

•

Enhanced our learning and compliance management system to vastly improve our professional’s ability to register for professional development opportunities and monitor their continuing education requirements.

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Citrin Cooperman continued its membership as a NASBA registered CPE sponsor of continuing professional education and met the requirements to become an approved IRS continuing education provider in 2023, allowing us to help our enrolled agents meet their CPE requirements.

As we begin our 2024 journey, CC LEAD will be at the forefront of growth, change, and continuous improvement. We will continue to take tangible steps this year to focus on quality and professional excellence for all our people.

CCLEAD BY THE NUMBERS

120 internal courses offered in 2023

Over 94,000 CPE credits processed

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ORIGINAL RESEARCH We are in an exceptionally volatile market riddled with uncertainty and challenges. Through these shifts, Citrin Cooperman has demonstrated our ability to successfully understand the nuances of an evolving market and effectively embrace change.

2023 presented Citrin Cooperman with the opportunity to expand our reach and impact through the creation of original thought leadership, comprehensive industry surveys, and in-depth research. The overall goal of our surveys and research is to carefully assess and respond to market trends, garner unique perspectives from top business leaders, and provide our approaches to addressing some of the most pressing challenges industries face today.

We invite you to explore our original research from 2023 and to be on the lookout for an exciting year of comprehensive thought leadership across industries in 2024.

THE COMPLETE GUIDE TO OUTSOURCING FINANCE Today’s business environment has accelerated the need for leadership to have access to real-time data to make crucial decisions about the direction of the company. To rise to this challenge and remain competitive in the marketplace, companies need a strong finance and accounting department along with relevant and viable technology solutions. One solution that is currently gaining popularity among companies struggling with staffing shortages is outsourcing finance and

ACCESS HERE

accounting functions. The Complete Guide to Outsourcing Finance explores finance and accounting outsourcing solutions and offers insights on how to help your business build better processes, achieve a deeper and more meaningful level of financial decision-making, and select and integrate the right technology to create faster and more accurate reporting.

UNDERSTANDING AND COUNTERACTING THE CHALLENGES FACING FIRM PROFITABILITY Law firms are facing new challenges in this post-pandemic environment and to adapt, law firms must work to pivot and reimagine themselves as the landscape continues to evolve. By proactively addressing obstacles such as succession planning, profit margin erosion, and budgeting and forecasting, firms can pave the way for greater profitability and resilience in the face of ongoing changes.

EXPLORE HERE

Understanding and Counteracting the Challenges Facing Firm Profitability explores perspectives on fee structures, office space optimization, and other innovative solutions to address complex law firm challenges.

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MANUFACTURING & DISTRIBUTION INDUSTRY PULSE SURVEY The fourth annual Citrin Cooperman Manufacturing & Distribution Industry 2023 Pulse Survey provided an in-depth analysis of the major factors shaping economic outcomes in the M&D space including supply chain adaptability, diversification of suppliers, managing excess inventory, labor constraints and workforce changes, adoption of emerging technologies, automation, managing working capital and rising interest rates, and sales price increases. This cornerstone industry survey

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report provides manufacturers and distributors with the insights that they need to enhance their businesses, improve their decision making, and proactively prepare for obstacles.

INDEPENDENT SPONSOR REPORT As the independent sponsor model continues to increase in popularity, the sector is becoming more professionalized, capital providers and company owners are embracing independent sponsors in greater numbers, and the market is providing opportunities that independent sponsors are uniquely poised to seize.

It is against this backdrop that, year after year, Citrin Cooperman’s Independent Sponsor Report continues the analysis we began in 2017. Our annual surveys of

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independent sponsors from across the country explore a wide range of topics, such as deal sourcing, relationships with capital providers, deal economics, and liquidity events.

2023 LONG ISLAND ECONOMIC SURVEY Citrin Cooperman, along with HIA-LI and Adelphi University, researched and produced the 2023 Long Island Economic Survey. This survey provides details on the most current and relevant information regarding the Long Island economy to help regional business leaders make better decisions. The survey had over 200 Long Island businesses as participants. These businesses provided invaluable insights and perspectives on the economic and political issues impacting the Long

ACCESS HERE

Island region. The collected results highlighted economic obstacles that Long Island businesses faced in 2022 and how they planned to overcome them in 2023.

2023-2024 ACCOUNTING AND TAX PLANNING GUIDE FOR AUTOMOTIVE DEALERSHIPS Citrin Cooperman’s Automotive Dealerships Industry Practice released their 20232024 Accounting and Tax Planning Guide for Automotive Dealerships, developed to provide automotive dealership leaders with tools and insights that will best help them navigate their future tax planning. Throughout this guide, we provide useful tax tips and tax planning strategies, strategies for improving cash flow and making

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knowledgeable investment decisions, and information on the latest accounting standards and regulatory changes impacting the industry.

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Integrations Our continued relationship with New Mountain Capital (NMC) has allowed us to deepen our service capabilities and expand our footprint beyond our imagination. In 2023, we welcomed several new firms to Citrin Cooperman. The addition of the Gold Gerstein Group, LLC, Chapman, Bird & Tessler, Berdon LLP, FMT Consultants, and Gettry Marcus greatly expands our reach and depth of service offerings. The first quarter of 2024 has also seen the addition of Coleman Huntoon & Brown PLLC, MIBAR, and Keefe McCullough & Co., LP. Deciding to welcome new firms is not a decision Citrin Cooperman takes lightly. An immense amount of planning and thorough due diligence, in addition to ensuring each firm shares our ethos and vision, deeply informs these decisions.

We are incredibly excited to welcome these esteemed firms to Citrin Cooperman and are confident that the soundness of these acquisitions will only complement an already strong team and impressive portfolio of service offerings.

CHAPMAN BIRD & TESSLER In January of 2023 we announced the successful acquisition of Chapman Bird & Tessler (CBT), a preeminent entertainment and business management firm from Los Angeles, CA. The bicoastal Entertainment, Music, and Sports Industry Practice at Citrin Cooperman is unique in their comprehensive and experienced understanding of the lifestyle and business challenges faced by clients in the spotlight and behind the scenes. The addition of CBT has only helped to strengthen the depth of services and level of expertise we are able to bring to this highly talented group of clients.

GOLD GERSTEIN GROUP Gold Gerstein Group LLC’s (GGG) Voorhees, NJ operations joined us in February 2023 with more than six million dollars in revenue, three partners, and over 20 staff members. Focused primarily on providing tax, business advisory solutions, and attest work to commercial businesses and high net worth individuals, GGG brought extensive experience in tax compliance and consulting and accounting in a wide variety of industries including real estate, manufacturing and distribution, and professional services to our growing firm.

BERDON We announced our completed acquisition of the New York accounting, tax, and consulting firm, Berdon LLP (Berdon) in February of 2023. With the addition of Berdon’s $110M in revenue and 450 partners and employees, the combination of the two firms expanded our capabilities in our shared core industries including real estate, construction, family office, and manufacturing and distribution while providing a deep roster of consulting and advisory services for our clients.

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FMT In June of 2023, we expanded our services depth with the joining of FMT Consultants (FMT), a Californiabased consulting firm specializing in enterprise resource planning (ERP), customer relationship management (CRM), cloud productivity, business intelligence, and integration solutions for middle market manufacturing, distribution, and other commercial businesses throughout the United States.

Founded in 1995, FMT joined Citrin Cooperman with more than $29 million in revenue. The firm welcomed over 80 individuals to our expansive West Coast presence.

GETTRY MARCUS Recognized in Accounting Today’s “Top 200” and “Fastest Growing U.S. Firms” lists, Gettry Marcus joined us in November of 2023, adding over $40 million in revenue, 28 partners, and more than 130 professionals to our expansive NYC Metro footprint. Gettry Marcus shares our culture of developing great collaborative teams and a strong and similar focus in the real estate, manufacturing and distribution, healthcare, and professional services industries.

COLEMAN HUNTOON & BROWN PLLC January 2024 began with the exciting acquisition of Coleman Huntoon & Brown (CH&B), a North Carolina-based tax, accounting, and business consulting firm that joined us with over 20 employees.

CH&B’s Chapel Hill office established our first location in the Carolinas and their incredible team has helped us fortify our established presence on the Eastern Seaboard.

MIBAR MIBAR, a leading business software consulting firm based in New York City, also joined us in January 2024, marking a significant step forward in broadening our advisory service offerings and enhancing our expertise in ERP and CRM software, business intelligence, AI, and NetSuite and Microsoft technology solutions, resulting in a wider range of services and deeper industry knowledge to help clients across the firm.

KEEFE MCCULLOUGH & CO., LP In February 2024 Keefe McCullough & Co., LP (KMC), a full-service tax, attest, and business advisory firm based in Fort Lauderdale, Florida joined us with 11 partners, more than 75 total employees, and established our third location in the Miami Metro area. With a combined total of over 150 employees now in Florida, KMC’s shared focus on industry expertise and shared client-centered approach is critical to our continued growth in the region.

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Embracing Change – Industry Focus The past several years presented nuanced challenges amidst continual market volatility, leaving a lasting impact on what was once “business as usual.” As the dust began to settle in the latter part of 2023, new opportunities quickly started to emerged.

Across industries, several factors are presenting both obstacles and opportunities that directly impact the ability for companies and their leadership to meet their short-term goals and achieve their long-term objectives.

INFLATION If one issue has proven to be one of the common threads across personal and professional conversations, it is how expensive everything has become. The uncertainty around inflation has created hesitation and doubt when it comes to the decisions business leaders are faced with. However, inflation has eased slightly since October, as noted by the U.S. Bureau of Labor Statistics, revealing signs of slowing price increases emerging under the surface. Though there is still uncertainty around a steady slowdown of inflation in the near future, business leaders can employ effective strategies to help triage its adverse effects, now.

INTEREST RATES The current market, influenced by inflation changes, has been rocked by rising interest rates. Deal flows and exits have become extremely limited, forcing decision makers and businesses to do a reality check, and oftentimes pivot strategic plans. As investors have become more skittish due to the high rate of borrowing, it has become increasingly difficult to close merger and acquisition (M&A) transactions. Navigating this situation and thoughtfully responding to the challenges posed by high interest rates is critical for businesses to assess in preparation for the year ahead.

The lasting impact that the relationship between interest rates and inflation will have on the economy is still playing out and businesses should adequately prepare for every possible scenario.

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UNCERTAINTY OF THE MARKET The banking crisis of 2023 precipitated even greater uncertainty in the market. The combined effect of inflation and interest rates on businesses presented new risk factors to most U.S. business owners and executive leaders. In order to manage market uncertainty, businesses need to be able to quickly make decisions by having access to accurate, real-time data. It is more important than ever to have effective reporting tools in place to help make informed decisions wherever the market turns.

TECHNOLOGY The need for accurate, easily accessible data to respond to market volatility has never been more paramount. The resulting wave of digital transformation is affecting all industries, products, and services and the technology

M&A AND OTHER EXIT STRATEGIES

utilized by companies must be routinely reviewed within

Businesses have had to make unprecedented pivots to

the current market in order to ensure accuracy and

survive amidst instability. For those unwilling or unable to

optimization. “Organizations that report the highest

adapt, they sought a means to join with another company

returns from artificial intelligence (AI) are nearly three

with greater resources or sell in recent years. As the

times more likely than others to report using a variety

incredible volume of M&A activity has now slowed due to

of capability-building programs to develop technical

increased market uncertainty, business owners have been

employees — a strategy effective in mitigating labor

challenged to press pause and reevaluate where their

challenges,” Managing Partner of Industries Mark Fagan

businesses currently stand. It is imperative to consider if

states.

it is more advantageous to carry on with a business rather than being tempted to sell now as valuation multiples are

To keep pace with the times, it is imperative to reassess

in decline.

systems and processes and consider investing in technology, platforms, and AI that best supports the

In 2024, Citrin Cooperman will be delivering timely

company’s strategic vision.

industry insights to help businesses effectively address the changes ahead. Helping clients adapt to shifts in

WORKFORCE Though the healthcare, government, and social assistance sectors all experienced slight job gains, the U.S. Bureau of Labor Statistics shows the overall unemployment rate remains steady at around 3.9 percent and the number of unemployed persons at 6.5 million. Labor shortages have been prevalent across all industries for several years, challenging leaders to thoughtfully consider working environments, benefits, and recruitment and retention strategies to mitigate these challenges. This adaptation comes at a time of low unemployment in the U.S., which requires employers to make unusual compromises and

the market has always been a key component of Citrin Cooperman’s success. Our unique service lines and industry-focused approach helps businesses rethink antiquated norms and develop innovative strategies that are in-step with the quickly evolving market.

Our data-driven original research and surveys will help guide your business in making important decisions now to help you achieve long-term success tomorrow. Though the road ahead is uncertain, Citrin Cooperman’s team of dedicated professionals have the insights and experience to help businesses effectively embrace change.

leverage creative solutions in how they incentivize their workforce.

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AUTOMOTIVE DEALERSHIPS INDUSTRY PRACTICE JD Power and LMC Auto Dealer Valuation Insights reports that retailer profit remains strong despite higher interest rates. Manufacturers incentives have increased during 2023 and vehicle supplies continue to improve. “Private equity investments and mergers and acquisitions (M&A) continue to dominate the landscape,” says Ellen Kera, practice coleader. “Agreed,” shared Wilfredo Fernandez, fellow practice co-leader, “now may be a good time to consider selling.

The profitability of dealerships have slipped from their highs during COVID but are still far above the one to two percent net income to revenue ratios of pre-COVID. We are consulting with clients every day on M&A deals and there is no end in sight. For companies who are not interested in selling, they should refocus on operations and work with their management teams to improve operations.”

CONSTRUCTION INDUSTRY PRACTICE The fickleness of the 2023 economy, coupled with rising interest rates and tighter lending standards have contributed to a slowdown in most construction sectors. “Material price increases and labor shortages, which hurt us in 2022, spilled over to 2023. Supply chain delays continue to impact the industry. Then the regional banking crisis affected some builders’ access to capital,” commented Salvatore Leone, practice co-leader.

But not all construction sectors have seen a slow-down. Dodge Construction Network’s Mid-Year 2023 OUTLOOK reported residential and commercial construction to be noticeably weaker, but infrastructure dollars pouring into state and local governments are supporting a 17% increase in non-building starts.

Practice Co-Leaders Salvatore Leone, Scott Derco, Sean Killgoar, and the practice’s team continues to build their exceptional reputation as Citrin Cooperman was ranked 15th on “The Top 50 Construction Accounting Firms™” in the U.S. by Construction Executive magazine. “Our construction practice is built on advising our clients on a myriad of issues, from sophisticated tax and operational planning, to preventing cyber-attacks,” says Sean.

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CANNABIS ADVISORY SERVICES Citrin Cooperman’s Cannabis Advisory Services (CAS) Practice has been operating as a full-service specialty group for almost six years. During this time, the cannabis industry has evolved from a primarily West Coast adult-use and medical industry to one that has swept across the country, with only a handful of states now without some measure of cannabis legalization. 2023 was another rollercoaster of a year, bringing some of our key geography states into the realm of the true adult-use cannabis marketplace.

The launch of New York State’s adult-use market through the Conditional Adult-Use Retail Dispensaries (CAURD) program at the end of 2022 fueled the growth of the New York industry, which despite its slow start, promises to be one of the largest in the nation. Many of our New Jersey clients opened their doors for business during 2023, and those in some of our mature states like Massachusetts, Colorado, and California struggled in a maturing market with ever onerous tax burdens.

While talk of the Secure and Fair Enforcement (SAFE) Banking Act is still on the table, the major federal move in the industry came from the Department of Health and Human Services’ (HHS) official recommendation that the Drug Enforcement Administration (DEA) reclassify marijuana from Schedule I of the Controlled Substances Act to Schedule III. This nonbinding recommendation must go through the DEA’s rulemaking administrative process before the DEA officially decides on the recommendation. However, the ramifications to the industry are still yet to be seen.

Cannabis Advisory Services Practice Co-leader, Mitzi Keating, notes, “If the recommendation is approved and the DEA moves cannabis from Schedule I to Schedule III, the state legal cannabis industry may no longer be subject to the onerous tax burden of §280E, however, the DEA’s language and approach through the rulemaking process will officially determine the impact on and to cannabis businesses with regard to this move.” It should be stated, however, that a rescheduling does not eliminate the conflict between state and federal programs and legality.

As always, the dedicated Cannabis Advisory Services team at Citrin Cooperman is ready to stand by in support of the industry, helping our clients navigate these ever-changing waters so that they can truly focus on what counts.

DIGITAL ASSETS INDUSTRY PRACTICE 2023 was a difficult year for the digital asset industry. The Securities & Exchange Commission (SEC) has been regulating the industry through legal enforcement, rather than providing a clear regulatory framework. They have started highprofile litigations against digital asset exchanges as well as many entities that created their own digital assets. “There does appear to be some light at the end of the tunnel for the regulatory uncertainty surrounding digital assets. The Financial Accounting Standards Board (FASB) recently approved the first digital asset-specific accounting standard and the U.S. Treasury Department recently issued a proposed rule-making memorandum that will bring much needed clarity to informational reporting requirements for digital asset trades and payments,” says Mark DiMichael, practice leader.

This year, several of our core clients have expanded their use of our service offerings to include outsourced accounting and accounting system implementation for digital assets. Other clients have relied upon us for guidance as to how they can properly deduct their digital asset investment and trading losses. The practice also expands our footprint in the litigation support arena, assisting in crypto asset tracing cases, fraud investigations, and shareholder disputes.

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ENTERTAINMENT, MUSIC, AND SPORTS INDUSTRY PRACTICE The entertainment industry had a blazing start to 2023 as live music, concerts, and music festivals returned to full capacity, drawing record setting levels. With so many events consecutively taking place, touring artists experienced supply chain issues and rising costs. Our dedicated music team has assisted our clients through these issues with the artists’ revenues top of mind. “Even in a tough economy, music remains recession-proof. There are many indicators suggesting a booming music industry, so it’s a great time for us to continue to focus and expand our efforts in this space. With the shared vision of our Advisory and BMFO leaders, we will meet the needs of our music clients to provide best in class service in a proactive and efficient manner,” notes Wayne Kamemoto, practice leader of Music Business Management.

Music catalog sales have continued their hot streak and remain resilient in the face of rising interest rates, economic downturn, and increased banking protocols. “2023 proved to be a seminal growth period for the valuation of music catalogue valuations as the stellar performance of the music industry has catapulted the excitement of all the senior private equity players who have formed investment acquisition funds. Citrin Cooperman has been called out by the major music media as the industry’s dominant valuation player with over $9.5 billion of asset value under review by the music economics team in 2023. Proving that the music industry runs non-parallel to the economic fragilities of other macro sensitive market structures, Citrin Cooperman anticipates continued growth for its music economic team into the next year,” says Barry Massarsky, practice co-leader of Valuation and Economics - Music Industry.

While the music sector continues to thrive with no slowdown in sight, the film and tv sector has experienced a notable decline with both the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) beginning labor strikes in early 2023. After a record breaking 118-day actors’ strike, the WGA and Alliance of Motion Picture and Television Producers (AMPTP) came to an agreement on November 9, 2023. “It will take time for production and business to resume as usual. That is why our team continues to work closely to highlight and work through short-term and long-term planning with our clients, including cash flow management during this downturn,” said Matt Segreto, managing partner of the Business Management and Family Office Practice.

“Citrin Cooperman’s Entertainment, Music, and Sports Industry Practice is now one of the largest in the country and this is what we envisioned when we first migrated to the West Coast in 2018. We have had tremendous growth — both organically and through mergers, and our depth and breadth of experience allows us to better withstand an industry wide stagnation event such as one that has occurred this year because of the WGA and SAG strikes. Under the leadership of Matt Segreto and Jamie Montanio, we are poised to become the preeminent brand in the industry,” states Arnie Herrmann, practice co-leader of TV & Film Business Management.

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FINANCIAL SERVICES INDUSTRY PRACTICE “Uncertainty in the markets has historically slowed down investment decisions, and 2023 has proved to be no different.

Rising interest rates, inflation concerns, and the banking crisis have all slowed investments, portfolio exits, and fund raising,” says Alexander Reyes, practice leader.

In Citrin Cooperman’s upcoming Emerging Managers Survey, raising capital was reported as the top concern of asset managers for the next 18 months. Our initial analysis of data reveals that respondents are concerned about cybersecurity as more organizations are using alternative data and other sophisticated data gathering techniques in their operations.

Citrin Cooperman’s dedicated Financial Services Industry Practice’s team continues to grow and develop a deep bench of talent to be able to provide our clients with professionals that have a subject matter expertise and an understanding of their unique needs and have the skills to help them stay current with the latest industry and regulatory developments.

FRANCHISING INDUSTRY PRACTICE The franchise community faces many of the same challenges that other industries face: talent shortages, cyber-attacks, excess or underutilized space, in addition to the reduced traffic at malls and other retail locations due to the hybrid remote workforce. “Although regulations, interest rates, the economy, and other outside factors are constantly at the forefront of many franchisors and franchisees, there is something very special about the franchise community in the way that the entire community rallies together, feeling each other’s pain and as a united force, stays one step ahead of everyone else,” notes Practice Co-Leader Michael Iannuzzi. Between the dedicated work of the International Franchise Association (IFA) staff and board, and the many dedicated franchisor, franchisee, and supplier members, the franchise community continues to be strong, grow, and innovate.

“I have been fortunate to work alongside IFA staff and IFA executive committee board members on various special tax and accounting task forces, in Washington and throughout the country, protecting and enhancing the franchise opportunity. I’ve watched these task force members work tirelessly and selflessly in their efforts to protect, enhance, and promote the franchise model. Franchising continues to be the backbone of entrepreneurship and job creation in this country,” says Aaron Chaitovsky, practice co-leader. Additionally, private equity continues to view franchising as an ideal investment and many emerging highly capitalized concepts continue to come to market and want to be involved in franchising, because what makes franchising so unique is that it is not an industry, it is a way of doing business.

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GOVERNMENT CONTRACTING INDUSTRY PRACTICE Forbes reports that machine intelligence, the blurring of the boundaries between real and virtual, and shaping the ongoing evolution of the internet will all radically impact our lives. Governments around the world have been increasingly focusing on incorporating emerging technologies like artificial intelligence (AI), cybersecurity, cloud computing, and data analytics into their operations. The Government Contracting Industry Practice’s team is working with our clients to ensure they are keeping up with the current technological trends while also preparing for economic changes, whether it’s a recession or a continuous high growth environment.

The ongoing government shutdowns have forced contractors to rework their business models, and they look to us for guidance navigating the uncertainty that has become a trend in the state of the economy. In 2022, we saw inflationary pressures and rising salary costs peak. This has continued to constrain contract pricing and company budgets. With the move to a more tech and AI driven workplace our clients will be able to keep up with the cost, especially in competitive bids.

Practice Leader Sirena Johnson states, “The convergence of inflationary pressure and other economic drivers, as well as the growing impact of new technologies, requires a dedicated team of advisors who understand the trends and can work with our clients to provide them forward thinking insights to drive their business further.” This trend is likely to continue as technology continues to advance and the Government Contracting team will continue to stay informed and up to date on the upcoming changes. Our clients trust us to navigate their company’s regulatory, compliance, accounting and finance needs in these challenging times as well as assisting them with pricing on competitive bids.

HEALTHCARE INDUSTRY PRACTICE As COVID-19 moved from a pandemic to endemic, including the end of the public health emergencies with additional funding and flexibility for healthcare providers, many hospitals and health systems focus on continued recovery from the significant financial and operational impacts including the significant workforce shortages. However, like other industries, the pandemic accelerated some trends like the adoption of telehealth and also acted as a catalyst to reimagine the care delivery model of the future. Strategies are now being developed to capitalize on this and other learning points.

The pandemic forced healthcare systems to create an accelerated path to market for products and services, adapt new technologies, and change the way healthcare is delivered. Advisors must now work with clients’ strategy and finance teams to develop strategies to take advantage of these new conditions in the healthcare industry.

For physician groups, private equity ownership continues to be an attractive alternative to merging with a hospital or larger group practice. “The future of physician practices is dynamic, with various paths to consider. Whether you choose to remain independent, explore a merger with a hospital-supported group, or engage with private equity, it’s essential to assess the capital requirements, analyze the data, and evaluate the potential benefits and trade-offs,” notes Blake Spina, practice co-leader, in an article on M&A for physician practices.

Post-acute care providers are facing a challenging year-end, with government support ending and the pandemic’s impact still lingering, causing slow recovery in occupancy and census levels. The primary concern revolves around maintaining sufficient cash flow to sustain operations and high-quality care amidst rising costs and stagnant reimbursements, coupled with the escalating expenses of staff recruitment and retention. Director Lauren Florio states, “to thrive, providers are advised to rethink fundraising strategies, focus on realistic budgeting, anticipate changes in reimbursement rates, explore alternative revenue sources, and remain vigilant about financial covenant compliance.” Michael Criscione, practice coleader, affirms that sentiment, “In this complex landscape, adaptable planning and creative solutions are the keys to navigating the road ahead successfully.”

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MANUFACTURING AND DISTRIBUTION INDUSTRY PRACTICE “Like many industries, the full effects of inflation and interest rates have hit manufacturing and distribution companies during 2023. Now more than ever, we are helping our clients institute best practices to improve their cash conversion cycles, monitor working capital requirements, and ultimately improve overall profitability. Our clients are very focused on their lending relationships and overall efforts to improve financial flexibility and reduce costs,” says Mark Henry, practice co-leader.

Our 2023 Manufacturing and Distribution Pulse Survey revealed four drivers of financial health integral to another year of strong results from our respondents. “Technology continues to play a strong role in the success of our clients.

Understanding consumer behavior through the use of data analytics and artificial intelligence can overcome inflationary pressures because consumers are willing pay more for an exceptional experience,” states John Giordano, practice coleader.

NOT-FOR-PROFIT INDUSTRY PRACTICE Not-for-profit organizations play a vital role in addressing various social and environmental issues, but they have faced and will continue to see challenges in the upcoming year. Top of mind for many organizations is liquidity and financial sustainability. In particular, the ability to attract and retain donations, grants, and host fundraising events to support their operations. Coupled with the unknown economic landscape of government funding, social economic trends, and the need of volunteers to aid in the delivery of additional programmatic needs, not-for-profits must become agile to solve these challenges. As such, technological adaptations will be necessary to seek new data, engage volunteers, and solicit donations from other resources in furtherance of their mission. These are just a few of the challenges that not-for-profits might face in the coming years. However, with creativity, strategic planning, and a focus on building strong relationships, not-for-profits can overcome these challenges and continue making a positive difference in the world. Practice Leader John Eusanio states, “Not-for-profit organizations are vital to the heart and soul of communities and are fueled by the belief that we can make a better world together.”

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PROFESSIONAL SERVICES INDUSTRY PRACTICE Talent shortages, frequent turnover, quiet quitting, and a job market with no physical boundaries are hitting professional businesses hard in an industry where human capital is the most important asset. “An unstable workforce challenges the customer experience and causes margin erosion for professional service firms, as well as forcing owners to turn away opportunities. In addition to talent challenges, the amount of personal data companies in our industry collects makes them a target for cyber-attacks,” says BJ Hoffman, practice leader.

Law firms are experiencing succession issues as more baby boomers retire. “It is crucial to a law firm’s financial health to make their clients aware that despite the retirement of a given partner, their customer experience will remain strong.

If retiring partners begin to pass off portions of their clients work to younger partners in advance of retirement, it will help build continued trust with clients and maintain a positive relationship during and after the transition,” says John Fitzgerald, Law Firms Industry Practice leader and managing partner – Long Island.

REAL ESTATE INDUSTRY PRACTICE Forbes Advisor reports that 59% of the U.S. workforce is in office, 28% have adapted some form of hybrid model and the remaining 13% are full-time employees who work from home. The commercial real estate industry is entering into a period of uncertainty as the workforce and employers struggle to find common ground with the hybrid work model.

“Owners should have a strategy in place with financial modelling which includes 1) alternative use of space; 2) lease renewals scenarios; 3) how excess vacancies and additional investments will affect cash flows; and 4) funding plans and debt requirements,” says Mark Mindick, practice leader.

The current interest rate environment has also prompted owners to look for ways to offset the increased cost of capital.

“Real estate finance operations are conducive for efficient outsourcing, allowing owners to focus their resources on managing and expanding their businesses,” said Adam Lazarus, partner.

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RESTAURANTS AND HOSPITALITY INDUSTRY PRACTICE More than ever, restaurant clients are integrating technology to improve efficiency while serving the wildly diverse preferences of every generation. Some establishments are adopting digital menus and online ordering systems to facilitate convenience, while others are making further investments by integrating predictive analytics technology to automate scheduling and better track inventory and diminish food waste.

The proliferation of food delivery services has made eating at home convenient, but there is still an abundance of consumers who enjoy the dining out experience and are willing to pay increased menu prices. Overall, there should be fewer and lower price increases this year versus last year, although menu prices will likely remain elevated. Restaurants and Hospitality Industry Practice Co-Leader, Robert Gilbert says, “We are keeping our clients focused on the economics of their business as they continue to rise the post-covid demand wave.”

Labor shortages have continued to plague the restaurants and hospitality industry in 2023. Many owners and operators have turned to business process outsourcing for remote functions, so they can focus their energies on the critical restaurant and hotel staff. “Outsourcing specific finance, accounting, and processing responsibilities can cost less than hiring a new employee and allows you to tap into a much larger talent pool that delivers services outside your area of expertise,” says Jennifer Hogencamp, partner and practice leader – Hotels and Lodging.

TECHNOLOGY INDUSTRY PRACTICE 2023 continued the uncertainty of the tech market. The failure of Silicon Valley Bank, who provided financing for about half of all U.S. venture-backed technology and healthcare companies, made an already difficult capital market even more challenging.

“Despite the challenging start to the year the tech industry faced, our clients saw many growth opportunities both internally and externally through optimization of their AI systems. Utilization of these systems led to greater reliability of data and improved decision making, increased their product delivery and connectivity via cloud-based platforms.

There was a greater focus on tapping into their business models in order to re-engage employees and customers and to expand into new ecosystems. All with the goal of increasing revenue and profitability. We are helping our clients analyze their operations and develop effective strategies as they assess the needs of the market for these products. In 2024 we expect to see continued transformation in order meet employee and customer needs and we will be there alongside them,” says Thomas Porricelli, partner and member of Citrin Cooperman’s Technology Industry Practice and Franchise Industry Practice.

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Giving Back Citrin Cooperman is committed to supporting the communities in which we live and work through several charitable initiatives. Throughout the year, each of our offices host “Charitable Fridays” to collect donations, support holiday fundraisers, and contribute to food drives for numerous mission-driven organizations. Our firm proudly matches each monetary contribution made from our partners and team members to further support these impactful initiatives. We are proud of the charitable spirit our firm demonstrates. Below are some of the initiatives Citrin Cooperman supported in 2023 and 2024.

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African American History Museum

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Alzheimer’s Organization

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Femme House

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Girls on the Run

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Greater Good Charities – Clear the Shelters

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House of Ruth

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Leukemia & Lymphoma Society’s LLS Light the Night Event

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March of Dimes

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Maui Food Bank

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Movember

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National Civil Rights Museum

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Pan Mass Challenge

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Queens World FF

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The Birthday Party Project

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Trevor Project

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Women for Women International

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Wounded Warrior Project

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Rankings and Awards Citrin Cooperman’s foundation is built on the strength and skills of our incredible partners and staff. We are proud of the achievements of our firm, as demonstrated through recognition in several impressive award categories in 2023 and 2024.

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Best Places to Work in New Jersey NJBIZ (2023)

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Best Places to Work in Westchester 2023 – 914INC. (2023)

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Best Places to Work in Westchester 2024 – 914INC. (2024)

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COMMERCE and CIANJ “Enterprising Women: Woman to Watch” – Courtney Rotola and Sylvie Gadant (2023)

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COMMERCE and CIANJ Companies that Care “Champion of Good Works” (2023)

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Named as a “Leader in Tax” and “Pacesetter in Growth” – Accounting Today’s Top 100 Firms (2023)

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NJBIZ Empowering Women Award Honoree – NJBIZ (2023)

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NJBIZ ICON Award – Wilfredo Hernandez (2023)

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NJBIZ Power 50 Accounting List – Harry Carpenter, Scott Derco, Tracey Early, David Untracht (2023)

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NJCPA Ovation Award – Woman to Watch – Yetty Handayany (2023)

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Ranked in USA Today’s “America’s Most Recommended Tax and Accounting Firms 2024” (2024)

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Ranked 11th on “The fastest-growing firms in the U.S. in 2023” – Accounting Today (2023)

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Ranked 15th on “The Top 50 Construction Accounting Firms™” – Construction Executive (2023)

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Ranked 21st on “The Top 100 Firms” list, 21st on “The Top Tax Firms” list and 3rd among “The Top Mid-Atlantic Firms in 2023” – Accounting Today’s Top 100 Firms (2023)

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Ranked 23rd on “The 2023 IPA Top 100 Firms” list – Inside Public Accounting (2023)

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Ranked in Top 3 for “Best of 2023” in seven categories, including Forensic Accounting, Litigation Valuation Provider, and Corporate Investigations Provider – Legal Intelligencer (2023)

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ROI-NJ “Champions of the C-Suite” Alex Serrano (2023)

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ROI-NJ Influencers – Women in Business – Sylvie Gadant and Stacy Gilbert (2023)

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ROI-NJ Influencers Power List – Alex Serrano, Tracey Early, David Untracht (2023)

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CITRIN COOPERMAN’S IMPACT REPORT

citrincooperman.com

"Citrin Cooperman" is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure. The entities of Citrin Cooperman & Company, LLP and Citrin Cooperman Advisors LLC are independent member firms of the Moore North America, Inc. (MNA) Association, which is itself a regional member of Moore Global Network Limited (MGNL). All the firms associated with MNA are independently owned and managed entities. Their membership in, or association with, MNA should not be construed as constituting or implying any partnership between them.