Monday Morning Accounting News Brief: Chief Purpose Officer Dips Out of KPMG Dumpster Fire; EY Teases a New Quantum Computer | 8.3.26

Give the PCAOB a Piece of Your Mind on AI Standards

Do you think the PCAOB should hurry up and put out some real AI standards? You aren’t alone. In a piece for Bloomberg Tax, Jack Castonguay writes:

In a recent request for public comments, the board asked commenters if it should pursue standard setting and research into this area. I hope the question was rhetorical, because the answer is a resounding yes and it should have started yesterday.

The board has taken some action on AI. It formed an inspections modernization council last month to improve audit quality. It reached out to firms about using generative AI in audits and has monitored AI use by auditors. Former PCAOB chair Erica Williams emphasized that AI adoption is no substitute for an auditor’s own knowledge and judgment.

It’s a good start, but it’s insufficient because it’s largely just applying existing standards to a new paradigm. The PCAOB needs to establish clear guidance on acceptable AI use before we have an audit failure resulting from improper AI use. Odds are we’ve already had one but just don’t know it yet.

In the last two years, three of the four largest global accounting firms had to retract reports because of AI hallucinations. It’s only a matter of time until a firm is forced to retract an audit report because the AI hallucinated audit evidence or the auditors didn’t properly review or supervise the AI agents collecting and analyzing audit evidence.

The comment period for PCAOB Release No. 2026-005 [PDF] is open until August 7 (reminder: August 7 is mere days away wtf how). In that request for public comment on standard setting they’re asking about several items, not just AI. Should be some good comments when all’s said and done.

Small Firms Talk About How They’re Using AI

On the topic of AI, Journal of Accountancy shares a few ways small firms with fewer than 10 employees are using AI. I always like these kinds of articles because it actually explains the how and why (and how much it costs) for those who may not know where to start.

The Grant Thornton Borg Grows

Grant Thornton Australia will be looking at add new entities to the GT Borg posthaste. Reports AFR:

Grant Thornton Australia has set aside a war chest worth hundreds of millions of dollars to buy accounting firms after its 200-strong partnership voted in favour of a $1 billion private equity buyout.

The deal means US-headquartered Grant Thornton Advisors, majority-owned by private equity group New Mountain Capital, will add the Australian firm to its global network spanning the Americas, Europe, the Middle East and Asia-Pacific.

Show us that INSTINCT for growth, bois. Wait, phrasing…

EY Flexes an In-House Quantum Computer

Ooooh, fancy. I didn’t think quantum computing was at the point where Big 4 firms would be scrambling to acquire the tech (because $$$$) but according to this EY press release, they did:

EY Canada today [July 29] announced the expansion of its quantum computing capabilities to help clients solve increasingly complex business challenges in areas of optimization, fraud detection and large-scale risk management. The investment in an on-site quantum computer further enables the processing of highly sensitive workloads within Canadian borders, helping organizations meet growing security, privacy and regulatory requirements.

“We’re shifting the conversation on quantum computing from concept to practical use for our clients in Canada and globally,” said Biren Agnihotri, Chief Technology Officer, EY Canada. “Quantum computing has the ability to solve complex challenges that classical computing alone cannot address. By combining local and global talent, ecosystem collaboration and leading-edge in-house quantum infrastructure, we’re accelerating how organizations translate quantum innovation into real-world capability.”

Now I don’t know about you but I’m a nerd and I wanted to see this quantum computer. Or read about specs at least. There weren’t any specifics in the press release so I had to go hunting and found this on PostQuantum.com: EY Installed a Quantum Computer in Toronto. Nobody Will Say What It Is.

Scrolling to the bottom of that article we find this bit under the “The Bottom Line” heading:

EY installed a photonic quantum computer in Toronto. The vendor, model, architecture, qubit count, fidelity, programming model, and benchmark performance remain undisclosed. Two photonic vendors, Xanadu and ORCA Computing, are plausible suppliers based on the public record. Neither has been confirmed.

Whatever the vendor, no current photonic quantum computer can deliver production-scale or classically advantaged performance in optimization, fraud detection, data protection, or risk management. The system should be understood as an early-stage photonic platform for experimentation and operational learning, not as the enterprise computing capability implied by EY’s press release.

That is still a defensible reason to acquire one. An on-site system can help EY’s teams learn about quantum hardware integration, build operational expertise, develop a more informed view of an emerging technology, and strengthen its PQC and quantum-readiness advisory practice. Those are commercially rational investments in an organization that advises Fortune 500 clients on technology risk.

The problem is not that EY bought a quantum computer. The problem is the distance between what Depa told a journalist and what EY told the world.

So you’re saying they may have oversold? Interesting.

KPMG’s Chief Purpose Officer Has F**ked Off

As KPMG Australia continues to deal with the fallout from its latest scandal, the firm’s Chief Purpose Officer decided it’s time for him to exit stage left.

Writes AFR columnist Hannah Wootton:

Back in 2022, in the midst of a different whistleblower scandal, KPMG’s then-chief executive Andrew Yates created a new executive role with a title straight out of management consulting school: chief purpose officer.

He appointed Richard Boele to the role and spruiked how he would be the “challenging voice” to ensure the firm didn’t sway so far from its values again. But if it did, he would hold KPMG’s leadership accountable and “make sure we learn and embed what we’ve learnt”.

So, you’d think KPMG’s current scandal would be a pretty important time for the “CPO”. Justification for Yates’ creation of the role, even, which was broadly dismissed as public relations spin at the time. Except Boele has retired!

Here’s his retirement announcement on LinkedIn.

Whatever, it’s a bullshit role anyway.

CRA, IRS, Whatever. It’s All the Same Headache For Tax Pros

While this Financial Post piece is about the Canadian version of the IRS I’m sure many of you can relate to the headache expressed by the article’s author. The gist is that if revenue authorities were actually businesses they’d get fired.

Writes Daryl Ching:

I run an accounting firm that works with small and medium-sized businesses, which means my team spends part of every month inside Canada Revenue Agency reviews. Here is what it can look like from our side of the desk. A review that should take months stretches into years. Every so often, the file lands on a new agent, and we start over: re-explain the history, resend the documents, reargue points that were settled two agents ago. When numbers come back wrong again, we refile and wait months more.

While that clock runs, other filings sit in limbo. Refunds are held. Balances under dispute keep accruing penalties and interest. Though the agency owns the delay, the meter runs on the taxpayer.

Clients may think it’s all fun and games and billable hours, Daryl says otherwise:

You might assume CRA’s dysfunction is good for my business. It is not. Once we file a dispute, we follow up every two weeks, sit on hold, and re-explain the situation. We billed that work once, and we do not charge clients for the agency’s delays. A second invoice for the CRA’s failure would only compound the insult. Nobody builds a firm hoping to shepherd a file to its fourth agent.

Just How Regulated Should Tax Prep Be?

Let’s wrap this up with a Xitter post. @cordes_tax has a question for the peanut gallery: “Should Congress pass tax preparation regulation legislation? Are we cool with the status quo? Will AI render this conversation moot?”

Let’s talk occupational licensing:

I despise how this works in many states and municipalities for all manner of industries, from hair braiders needing cosmetology licenses to a pool contractor needing a general contractor license. Many times it is a hindrance and harm rather…

— Matthew J. Cordes, EA (@cordes_tax) July 31, 2026