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Law & Order
First Brands Creditor Sues Auditor BDO Over Missed Red Flags [Bloomberg]
A lender that owns First Brands Corp. debt sued auditor BDO USA P.C., alleging it failed to detect problems at the auto parts supplier before it collapsed into bankruptcy and federal prosecutors accused founder Patrick James of fraud. Funds managed by Black Diamond Capital Management said in an April 29 lawsuit that BDO’s audits did not comply with generally accepted auditing standards because they missed “numerous” risk factors, including First Brands’ extensive use of factoring and hundreds of millions of dollars in transfers to James’ personal trust.
Livermore accounting firm seized over alleged unlicensed law practice [Pleasanton Weekly]
The California State Bar announced last week that it had taken over a downtown Livermore business whose owner allegedly provided unlicensed legal services and advice on immigration filings that led one client to risk removal from the country and separation from his family for up to 22 years. When contacted by investigators with the state bar looking into the complaint that was submitted in 2024, owner Irene Raygoza said that she had not meant any harm to the family and acknowledged that she was not a licensed attorney or an “accredited representative.” She admitted to preparing a form for the family, but said that she is not an authorized immigration consultant, and denied advertising immigration services, according to state bar officials.
Deloitte Can’t Escape Trade Secrets Suit Over Vaccine Software [Bloomberg Law]
Deep Dive without paywall here.
Deloitte Consulting LLP failed to convince a federal judge to dismiss the bulk of a trade secrets lawsuit accusing the company of stealing vaccine-tracking technology that generated at least $80 million in payments from the US Centers for Disease Control.
Deloitte Consulting Charged with Discriminating Against Employees Who Take Parental Leave [Lawyers & Settlements]
On April 9, Joanne Barela brought a class action lawsuit against Deloitte Consulting LLP alleging violations of federal and California labor law. Joanne Barela v. Deloitte Consulting LLP accuses Deloitte of discriminating against workers who took parental leave. The discrimination, however, is buried in a formula that affects wage, promotion, and retention decisions for all employees.
Marshall County tax assessor indicted in connection with federal fraud [FOX13 Memphis]
Federal attorneys accuse Barbara Belfoure of “executing and attempting to execute part of a scheme to defraud the United Small Business Administration” by submitting a “false and fraudulent” PPP application, according to documents obtained by FOX13.
Financial Reporting
Refunds on Trump Tariffs Pose Accounting Dilemmas for Companies [Bloomberg Tax]
Nike has paid $1 billion in International Emergency Economic Powers Act tariffs invalidated by the Supreme Court, though potential refunds remain “highly uncertain,” the footwear maker said in its latest quarterly report filed April 1. Meanwhile, Levi Strauss & Co. told investors it would recognize a refund related to $80 million in IEEPA tariffs it paid when accounting rules are met relating to contingencies, or situations with uncertain outcomes that will be resolved in the future.
Tax
Tax committee considers 100% tax on money acquired by fraud [Minnesota House of Representatives]
They’re calling it “The Take It Back Act.” So said Rep. Patti Anderson (R-Dellwood) of HF5040, a bill she sponsors that, as amended, would impose a tax on a person or organization convicted of fraud in a state or federal court. The tax would be equal to 100% of the amount of money acquired by fraud of a public program.
Fifth Circuit reverses Tax Court on ‘limited partner’ definition [Journal of Accountancy]
The Fifth Circuit vacated and remanded a Tax Court decision, holding that the limited partner exception from net earnings from self-employment under Sec. 1402(a)(13) applies to a partner in a limited partnership with limited liability. The court rejected the IRS’s and Tax Court’s “passive-investor” definition of limited partner for purposes of the Sec. 1402(a)(13) exception.
IRS offers extension option for taxpayers facing ERC claim deadlines [Journal of Accountancy]
The taxpayers must (1) be waiting for the IRS to consider the taxpayer’s response to the notice of disallowance on Letter 105-C or 106-C and (2) have six months or less remaining before the two-year period to resolve their claim administratively or to file a refund suit expires.
Stevens introduces bill requiring members of Congress to publicly release tax returns [WLNS]
U.S. Rep. Haley Stevens, D-Birmingham, introduced legislation Thursday that would require all members of Congress and congressional candidates to publicly disclose their federal tax returns each year. Stevens says it’s a challenge to a culture of financial secrecy in Washington. The bill comes days after Stevens voluntarily released her tax return ahead of Tax Day. Her return showed an adjusted gross income of $169,970, a standard deduction of $22,272, and a total tax liability of $28,249. The return showed that she earned no income outside her congressional salary.
HR
‘Resign or be fired’ ultimatum costs Auckland firm $7,000 [Human Resources Director]
Courtney Jansen started at the small Auckland firm on 4 November 2024 under an employment agreement containing a valid 90-day trial provision. By early December, cracks were showing. After a colleague resigned, she found herself managing five inboxes and juggling 44 of the 130 tasks on the firm’s administrative master-list, while still learning the ropes.
Deloitte, Zoom benefit cuts threaten employee trust and retention, experts say [HR Dive]
Erin McAuley, chief people officer at Springline Advisory, an accounting and advisory services firm, said the changes aren’t surprising. “Firms are definitely under real pressure right now between cost structure and our workforce models, client expectations,” she said. But she urged caution. “Benefits aren’t perks, really; they’re signals to people,” McAuley said. “When you think about them as signals — and signals [of] how people translate their value — you have to be very cautious about the different decisions that you’re making.”
Firm Watch
Grant Thornton US to buy Australian sister firm as part of global spree [Financial Times]
Haha FT used the words “sold out” in this article.
Grant Thornton’s private equity-backed US business has announced plans to buy its sister firm in Australia, the latest move in a race with its UK sister firm to consolidate the world’s seventh-largest accounting network. The Australian business will follow Grant Thornton member firms in France, Spain, the United Arab Emirates and a host of others that have already sold out to the US business, which is majority owned by New Mountain Capital.
Grant Thornton CEO rejects private equity quality fears [Financial Review]
Grant Thornton Australia chief executive Said Jahani declined to indicate how much the deal would be worth. But people close to the negotiations, who requested anonymity to speak freely, say the business was worth more than $800 million, or about two times current revenue. “Private equity does not mean that it’s mutually exclusive with quality … [our US colleagues] only want to invest in high-quality firms. They don’t want to invest in high-risk businesses.”
Sikich Acquires Jefferson Wells U.S. [Business Wire]
Sikich, a professional services company specializing in consulting, technology and compliance today announced it has acquired Milwaukee-based Jefferson Wells and their 300+ employees in the U.S. from ManpowerGroup. Jefferson Wells delivers solutions in risk & compliance, finance & accounting, and tax – across a diverse range of industries, including to public and highly regulated companies – through project consulting, integrated resourcing and executive search.
PwC accused of ignoring risk signals during Corporate Travel audits [Financial Review]
PwC appears to have ignored risk signals and failed to exercise sufficient professional scepticism during its long tenure auditing Corporate Travel Management, an accounting expert says. Professor Gary Monroe said PwC should have asked management tougher questions and obtained direct confirmation from the British authorities, given the complexity of the travel company’s government contracts and the scale of the overcharging at the time.
AI
Over 1 in 2 firms have AI privacy concerns: Intuit [Accounting Times]
Cost and time barriers remain key challenges for AI transformation, with many accounting firms expressing concerns about client information privacy and the reliability of these tools, according to Intuit QuickBooks research.