Monday Morning Accounting News Brief: How About That Entry Level Job Market!; The Failed Client That Could Cost PwC $8 Billion | 5.18.26

EY Settles a Matter That’s Been Dragging Out

It seems EY quietly settled that £2 billion lawsuit brought on by administrators of failed client NMC Health, who EY audited for 14 years. The Times reports:

EY is believed to have paid more than £100 million to settle the High Court claim brought by the administrators of NMC Health, a former FTSE 100 company that collapsed amid an alleged fraud scandal.

The big four audit firm and the healthcare provider reached a confidential settlement in February after a long-running legal battle. A new report by Alvarez & Marsal, the administrators, shows that NMC has received £105.5 million in relation to the resolution of litigation.

EY did not admit liability and has maintained this whole time that they shouldn’t have been expected to find billions of dollars hiding off sheet.

The last time we wrote about NMC Health they — rather, their administrators — were trying to use the court to meddle in the Project Everest split to make sure they got their money if the split went forward as planned. At that time, Everest was starting to fall apart so it’s extra funny that they still elbowed in.

The Failed Client That Could Cost PwC $8.4 Billion

And in the Pacific, Evergrande liquidators are seeking billions from PwC.

Liquidators for Evergrande Group, the failed Chinese property giant, are ‌seeking 57 billion yuan ($8.4 billion) in damages from PwC, accusing it of being negligent in its auditing work, a Hong Kong court was told on Monday.

Potential damages would come on top of hefty fines imposed on the global auditing group by mainland ​Chinese and Hong Kong authorities after Evergrande collapsed with more than $300 billion of liabilities, becoming one of ​the biggest casualties of China’s property sector crisis.

Evergrande has already been incredibly painful to PwC both in money and reputational damage.

AICPA comments on the IRS Priority Guidance Plan

The AICPA had some things to say to the IRS about its plans for the upcoming year. 193 things to be exact. Journal of Accountancy has the details:

The AICPA submitted almost 200 comments to the IRS this week regarding its 2026–2027 Priority Guidance Plan, encouraging the agency to concentrate on 10 areas and to continue pursuing tax simplification.

“The recommendations ensure that the IRS guidance reflects practical, real-world application for taxpayers and practitioners,” Kristin Esposito, director–Tax Policy & Advocacy at the AICPA, said in a news release issued Friday. “Given that our recommendations are ranked by priority within each area, we encourage a focus on the highest-priority items.”

Audit Professors Could Steal This Example For Class

A lesson in the importance of internal controls from the town of White Castle, Louisiana as a town clerk was caught putting town money where it shouldn’t be:

A former White Castle town clerk deposited more than $19,000 in local government money into her own personal accounts, an audit released by the Louisiana Legislative Auditor’s Office says.

The funds that were transferred to Lee’s account included town revenue checks from video poker revenue and franchise fee revenue. Lee allegedly initiated unauthorized ACH payments from the Town’s general fund bank accounts to pay personal expenses.

Lee’s job, the audit says, involved receiving checks, recording transactions, preparing deposits, initiating ACH payments and performing bank reconciliations.

It’s like reading an Audit 101 textbook.

My Thoughts on the Entry Level Job Market

r/accounting has been on fire all weekend, I think more than a few people got into the mind-opening chemicals this weekend. First, someone realizes that the accountant shortage was bullshit and then you have this:

I have been sitting with this thought for a while and I need to put it somewhere.

AI is doing the transactional work now. Bank recs, invoice matching, journal entry coding, cash reconciliations, basic variance analysis. Tools are handling all of it faster and cheaper than any of us ever could. Offshoring took the first wave and AI is just finishing the job

That “low value” transactional work wasn’t just busywork. It was how we learned. You did the recs, you lived in the numbers, you started noticing things that didn’t add up. That’s how junior accountants built the intuition that eventually made them good at the hard stuff. Technical accounting, SOX, complex close work, none of that makes sense if you’ve never actually gotten your hands dirty at the foundation.

People always bring up how the profession survived before. Spreadsheets were supposed to wipe out bookkeepers. They didn’t, bookkeepers just evolved. ERPs were supposed to make controllers obsolete. Also didn’t happen, controllers just moved up the value chain. Every time, accounting adapted and found its footing.

Tbh tho, AI is not giving junior accountants a chance to evolve into something new. It’s just removing the floor entirely.

So yeah, accounting will probably survive. But I keep thinking about who is going to be doing the senior work in 10 years, and how exactly they learned it, if the bottom of the ladder just doesn’t exist anymore.

You also have someone asking about bathroom breaks at Big 4 as if you can’t just get up and use the bathroom when you need to so, you know, they can’t all be bangers.

Gran Turismo For Tax Training?

On the subject of training up the next generation, Business Insider continues glazing KPMG’s AI initiatives and in its latest, discusses AI tools for tax juniors:

The company is testing an AI-powered simulation tool designed to help employees build the skills they once gained through years of pencil pushing.

The goal is to allow junior staffers, in particular, to learn the ins and outs of tax prep as AI begins to take over tasks, said Brad Brown, the company’s chief digital officer for tax.

“You’re not going to get as many repetitions of doing that task as you would have in the past,” he said. “So we needed something to fill that void.”

The idea behind the AI training is similar to how the game “Gran Turismo” simulates zipping around a Formula 1 course, said Kes Sampanthar, cofounder and CEO of Centaurian AI, which developed the tool with KPMG.

If anyone wants to give us a field report on this tool once it’s widely available please do so via email or text.

To Be Fair Everyone Hates Lease Accounting

The Department of War has a bunch of space it isn’t tracking and the data they do have isn’t always great:

The Department of Defense/War is not fully tracking the space it owns or leases in the national capital region, says a GAO audit suggesting that there is much more of it than in the department’s accounting.

The report, coming at a time of emphasis on shedding underused federal office space, pointed to a need for better coordination among the military services and the Washington Headquarters Service, saying the department currently “lacks key information” for making such decisions. The report comes soon after a GSA release of data showing that nearly 10,000 owned or leased spaces occupied by other agencies don’t meet occupancy standards set by a late-2024 law.

Washington amirite.