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Audit
US audit regulator weighs deep staff cuts to unit overseeing accounting firms [Financial Times]
The US audit regulator is considering deep cuts to the number of staff inspecting accounting firms, in a downsizing of the Enron-era watchdog designed to align it with Trump administration priorities. The Public Company Accounting Oversight Board is also examining cuts to its enforcement division and other restructuring options as it takes a less confrontational approach to its dealings with audit firms, according to people familiar with the matter.
Crunching the Numbers: The Impact of GenAI and Agentic AI in Auditing [Bipartisan Policy Center]
Use of generative and agentic artificial intelligence is spreading rapidly through the economy, impacting many office-based jobs. An example of this transformation can be seen with financial auditors, a role once defined by painstaking manual review that is now at the frontier of an AI-driven transformation. The Bipartisan Policy Center examines the role of public company auditors and their use of AI to understand how it might shape their roles and work. We are grateful to the Center for Audit Quality (CAQ), which represents the public company audit profession, for input and assistance.
Two ex-Carillion finance directors fined by accountancy regulator [Financial Times]
The Financial Reporting Council fined Richard Adam and Zafar Khan a combined £282,000 for acting “recklessly” in preparing the construction group’s accounts, eight years after it collapsed.
DoD faces mounting pressure to pass clean audit for the first time [Military Times]
House lawmakers and government watchdogs expressed skepticism Wednesday about the Defense Department’s ability to produce a clean financial audit by a Dec. 31, 2028, statutory deadline. The House Committee on Oversight and Government Reform held a hearing on the DoD years-long struggle to produce a clean financial audit despite claiming around half of the government’s discretionary spending.
Tax
Taxpayers advised they can ignore CP53E notice — after verifying error [Journal of Accountancy]
Taxpayers who aren’t due a refund but received a CP53E notice anyway can ignore the notice after they confirm its validity online, the Taxpayer Advocate Service (TAS) said. Most IRS notices are sent automatically, meaning a processing error or an adjustment to a taxpayer’s return could have caused a taxpayer to receive the notice, according to a TAS news release.
Firm Watch
Forvis Mazars adds Chinese and Japanese desks to support US MNEs [International Accounting Bulletin]
In a statement, the professional services company said the new desks will provide a single point of contact and strengthen coordination between Forvis Mazars’ US teams and professionals based in China and Japan.
Fraud, Alleged or Otherwise
Billionaire Gautam Adani and nephew agree to pay $18 million in SEC settlement over fraud allegations [CNBC]
The Securities and Exchange Commission had alleged that the two men misled investors as part of a bribery and fraud scheme tied to solar contracts in India. Under the settlement, Gautam Adani will pay a $6 million penalty, while Sagar Adani will pay $12 million. Both men have consented to “entry of the final judgment without admitting or denying the allegations made in the civil complaint,” and payment of penalties, Indian renewable energy firm Adani Green said in a filing to the Indian stock exchanges.
Big 4
KPMG admits partner used confidential Lendlease files in Westpac pitch [Financial Review]
KPMG Australia has admitted a senior audit partner improperly accessed and displayed confidential board documents from longtime client Lendlease when the firm was pitching for a major Westpac contract. The admission followed claims, aired in parliament by Labor senator Deborah O’Neill in March, that senior executives misused confidential client information and leveraged conflicted contacts to secure work.
Why Deloitte Cut Benefits For Some Workers But Not Others [Forbes]
When Deloitte announced cuts to family leave and fertility-related benefits for some of its U.S. employees, critics framed the move as anti-women, short-sighted and damaging to retention. Those criticisms may be valid. But they miss the larger signal. The word “some” is doing a lot of work in that announcement. The cuts do not apply to Deloitte’s entire U.S. workforce of roughly 181,000 people. They apply specifically to employees classified under what the firm calls its “Center” talent model, a segment that broadly covers internal support functions such as administration, IT support and finance. These cuts are not really about paid parental leave policy. They are about the future of work in an AI economy.
Anthropic and PwC Expand Alliance, Driving Impact Across Client Work and the Firm [PwC]
PwC will roll out Claude Code and Cowork starting with U.S. teams and expanding toward a global workforce of hundreds of thousands of professionals, establish a joint Center of Excellence, and train and certify 30,000 PwC professionals on Claude.