RSM Tenon shares plunge 29pc on profits warning RSM on Monday saw the resignations of Andy Raynor, chief executive, and, Bob Morton, chairman, as the firm revealed it may have to restate its accounts. Mr Morton, who holds 8pc of the firm, will stay on as an independent director. RSM, which has 50,000 customers including the British Government, now faces a potential covenant breach over its £88m debt pile. It has also launched a full review into how accounts misjudged its debts and credits, leaving it on alert to swing from a £6m profit to a possible £10m loss. Adrian Martin, who was promoted to executive chairman from a non-exec role, said the board could not allow the situation to continue deteriorating and were forced to push for changes. Mr Martin is a former managing partner of rival BDO-Stoy Hayward, and has already enlisted former colleague Jeremy Newman as a consultant to help the business recover. Adrian Gardner, who was brought in as finance director in October in the first wave of the shake-up, said financial assumptions at RSM had been "too stretchy." Revenue is expected to be down 10pc from £240m, said Mr Gardner, who added this did not include any re-calculations on prior assumptions in the 2011 accounts. RSM, an "award winning company" that operates across audit, advisory, risk and financial management, could now be vulnerable to clients moving firms. RSM has been a strong advocate for new regulation to challenge the dominance of the Big Four auditors. But according to a rival accountancy company, "today's news is likely to confirm companies" faith in the bigger firms." Mr Martin strongly denied this - insisting there was no read-across in clients" faith in RSM's work and the firm's management of its own accounts and risks. RSM pays £4m of interest a year and has a debt-to-earnings covenant that prevents it from having more than three times leverage. In July the company also has to pay back part of its overdraft and long term loans - meaning a reduction of £38m at the end of June. "RSM used to be a series of partnerships," said Mr Odey. These partnerships cared about costs. When they went, people went soft on costs and made questionable acquisitions. There is no reason why a company with £245m of sales shouldn't make margins of 10pc.