Comments are closed on Friday Footnotes and the Monday Morning Accounting News Brief by default. If you have something to say about any stories linked here you are welcome to email the editor, text us at 202-505-8885, or hit us up on Twitter @going_concern. See ya.
F You, Pay Me
KPMG tech cuts come with a severance sum some staff call insulting [The Register]
KPMG UK is laying off staff from the Tech and Data areas of its Advisory division and offering severance terms that one affected employee described as “insulting and disgraceful.” The job cuts, affecting about 4 percent of the Advisory staff, were announced internally in July. Affected workers in the AI, Cyber, SAP, and Testing teams are scheduled to leave the consulting business next month. Insiders have now shared with The Register details of the payments offered to those set to depart.
PwC Consultants Brace For Big Bonus Cuts In Switzerland Amid AI [Bloomberg]
PricewaterhouseCoopers is planning to halve bonuses in Switzerland as the Big Four accounting firm seeks cost cuts in response to artificial intelligence and a challenging economic environment, according to people familiar with the matter. The reductions were announced internally during several town-hall meetings with specific teams in recent weeks, according to the people, who asked not to be identified discussing internal business. There was no written internal communication about the measures, they said.
Return to Office
How to entice workers to the office? EY says it found the answer in Atlanta. [Atlanta Journal-Constitution]
Joe Pearson, EY’s Southeast facilities manager, told The Atlanta Journal-Constitution on a recent tour that he knows “people usually push back” when told to return to a physical office. But he said he hopes the new Atlanta workplace is an exception, a retention tactic also designed to win the war for talent.
Audit
IAG dumps KPMG from $11.6m audit after more than two decades [Financial Review]
The statement IAG made doesn’t rag on KPMG, sadly.
Insurance Australia Group will search for a new auditor after having KPMG check its books since it listed on the ASX in 2000, as the big four firm struggles with an ongoing scandal related to audit partners misusing client data to win work. The company has explicitly excluded KPMG from a competitive audit tender process it will conduct in 2027, according to a statement to the ASX on Friday.
Inside the KPMG whistleblower claims rocking Macquarie’s board [Financial Review]
OMG it just keeps going.
Macquarie director Michelle Hinchliffe has been accused of helping KPMG, the accounting firm where she was a partner for decades, to wargame its bid for the financial giant’s lucrative audit by relaying commercially sensitive information about rivals and suggesting what skills were most critical.
Technology
How AI is creating new risks for the big four accounting firms [Financial Review Opinion]
Accounting is not the most glamorous of professions, but some excitement has crept into the job lately. “Technology is changing the role of auditors to make the work much more interesting than when I started,” Catherine Burnet, KPMG’s UK head of audit, told me last week.
AI safety debate expected to put more pressure on CFOs [CFO Dive]
Growing concerns about artificial intelligence safety and reliability could raise the stakes for CFOs evaluating potential investments in the technology, according to a finance leadership expert and an AI consultant. While the debate is not expected to ease AI adoption pressures, experts say it could force deeper conversations about risk management as part of the investment decision-making process.
Regulation
KPMG Australia Scandal Shows Misconduct Rules Need Strengthening [Bloomberg Tax]
As Australia considers breaking up its Big Four firms because of renewed scrutiny, policymakers should recognize that separating audit from consulting is only part of the answer. They must also address misconduct within auditing and ensure the actors responsible bear financial consequences. Australia’s scandal may also prove a useful warning for US policymakers — and its response may offer a useful test bed. Policymakers should focus closely on how audit firms win business. Regulators should require stronger controls on who can access confidential client information, independent review of all major sales pitches, and compensation arrangements that ensure improper gains are recoverable after the responsible partners leave the firm. Such measures would target a problem that structural separation alone can’t solve.
Capping accounting partners weakens audit quality: EY Australia [Accounting Times]
EY Australia’s submission to Treasury’s options paper on regulating Australian accounting, auditing and consulting firms said the accounting giant does not support mandating changes to the legal structure and organisational form of multidisciplinary audit firms.
Tax
Despite upgrades, IRS cyber program still ‘not effective,’ watchdog says [FedScoop]
An ineffective IRS cybersecurity program in fiscal 2026 could leave taxpayer data vulnerable to bad actors, the agency’s watchdog warned in a report published Friday. According to the Treasury Inspector General for Tax Administration, the IRS’s information security program was deemed “not effective” for the most recent fiscal year based on Federal Information Security Modernization Act assessments.