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November 23, 2022

Accounting News Roundup: EY Does Non-Accounting Stuff; Reporting to the Pope; Nightmare Clients | 11.17.16

EY does non-accounting stuff

One of the things we occasionally talk about around here is the fact that the Big 4 accounting firms aren't as accounting firm-y as they used to be. In fact, you get the sense from this Business Insider article that you could put the word "digital" in front of anything and they probably offer it:

EY's move into the digital consulting space started about a decade ago, and has now become a "multi-billion dollar" business, according to Jeff Liu, global executive of EY-GE Digital Alliance. The business includes everything from consulting to software development, and spans every industry from the oil and gas to aviation sectors.

These efforts have opened up a huge new market opportunity that could be worth as much as $100 billion, according to IDC's global research director Michael Versace.

And if there's one thing Big 4 firms have a knack for, it's throwing money at something and turning it into a business:

As part of this plan, EY has made 26 acquisitions and signed 7 new partnership agreements in this year alone. The acquisitions covered a number of different areas, such as cognitive engineering, consumer web design, and app development. EY also plans to hire over 2,500 people in its global consulting service by 2020.

At some point in the future, auditing and tax work will be to the accounting firms like coffee was to Lloyd's. Those businesses will seem quaint compared to the digital consulting side of things. I imagine an elderly CFO walking into an EY office to visit their audit partner and have to take one of those antique elevators with the screaming gates down to the "Olde Time Audit Deparment." Meanwhile, the digital consultants will joke openly of the days when "independence" was something the firm had to worry about while they ride turbolifts. The future is going to be amazing.

Accountingness is next to Godliness

I probably missed it, but a couple of years ago, a bunch of accountants got a private meeting with Pope Francis after the World Congress of Accountants in Rome where he "challenged them to do more in the global battle against fraud and corruption." That's a lot of pressure with some vague expectations! If it was anyone other than Pope Francis, I'd say that he was just being nice, but I'll bet he really believes that you should all be doing more to fight fraud. He should really start a campaign to help bring around all those people in the profession clinging to the expectations gap.

Nightmare clients

The City of Richmond, Virginia just engaged CliftonLarsonAllen as its auditor. CLA replaces Grant Thornton who released the city's comprehensive annual financial report for the year ended June 30, 2015 last week. GT served as the city's auditor for one year after Cherry Bekaert fired Richmond "because of problems that the firm experienced in conducting the audits for the 2013 and 2014 fiscal years."  Best of luck to the CLA team taking on this charlie foxtrot.

Previously, on Going Concern…

In Open Items, Peter Reilly is searching for collaborators who know tax provisions.

In other news:

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