An Accountant’s Weekend Reading | 12.27.24

Posted on by Adrienne Gonzalez
Dog in lap with open book, relaxing at home

Friday Footnotes will return on January 3, 2025. That’s next Friday, just by the way. Instead of a wrap up of the week’s accounting news (there is none), here are a few items for your consideration. Comments are open if you’d like to share your opinion on anything here, or any other relevant happenings in and around the accounting profession. Have a great weekend!

Private Equity Meets Public Accounting [TaxGPT newsletter]

In this TaxGPT newsletter from earlier in the year, Andrew Sedlacek discusses private equity’s “ominous entry into our wonderful profession.” He points out because PE in accounting is such a new phenomenon, we don’t have any historical data to go off of when thinking about what may happen in coming years (we can make some educated guesses though).

Here he outlines some things that have happened at individual firms since their PE deals were announced:

EisnerAmper: this is all you need to read. Some highlights:

  • Atrocious scheduling
  • Mass offshoring to India; abysmal quality of work, especially outsourced billing
  • “From a client perspective, Eisner is god awful.”
  • Extremely disorganized; partners getting fired “left and right”

Citrin Cooperman:

If you believe what both Citrin and PE partner New Mountain Capital say, everything is sunshine and rainbows. In all honesty, there isn’t much for negative noise, but the acquisitions have been fast and furious. We’ll watch this one from the sidelines. [Ed. note: Lemme help you out — Layoff Watch ’24: PE-Backed Citrin Cooperman Let Some People Go This Week]

Cherry Bekaert:

Similar to Citrin, this company doesn’t make much noise. Reviews have been mixed on Glassdoor since the acquisition.

Baker Tilly:

Less than a year prior to the PE deal, then-CEO Alan Whitman abruptly resigned, effective immediately. Per Bloomberg’s paywalled article, Whitman disagreed with the firm’s other leaders on how to execute on the company’s business strategy. During mid-2023, there were also around 180 layoffs. Whether all of this is related to the PE investment is uncertain.

Grant Thornton:

Rounds of layoffs of 300 in May 2023, 200 in November 2023, and 350 in May 2024. Roughly 10% of its workforce has been reduced leading up to the PE investment. Read about the most recent round of layoffs here, and learn about the start-date push-backs here.

My thoughts on all of this:

I am staunchly opposed to PE’s entry into public accounting. PE is notorious for bleeding companies out with a laser focus on profits. Public accounting demands strict professional standards, no matter the type of engagement. Looking into the future, I believe we’ll see the following:

  • Extreme cost cutting leading to reduced work quality
  • Undermining of professional ethos in favor of increased profit
  • Limits on career growth for younger professionals
  • Even higher workloads and less work-life balance

We should tack Aprio onto his list but that’s a topic for another day.

Bench is abruptly shutting down [Logan Graf on X]

Select reaction:

The Wikipedia page has already been updated:

Bench Accounting (branded as “Bench”) was a fintech company that used proprietary software to automate bookkeeping and provide financials for small business owners. The company provided subscription access to cloud-based software in combination with in-house bookkeepers. Bench raised over $100M in funding before shutting down and employed around 650 people out of its Vancouver headquarters.

Christmas spirit is officially dead [Everywhere]

I just want to complain about Coca-Cola’s holiday ad this year, quite obviously made with AI. Absolute garbage.

The technology used to produce this slop is the ironically named Real Magic, a DALL-E/GPT-4 hybrid developed by OpenAI and Bain & Co. Because when one thinks about holiday spirit, the first thing that comes to mind is Bain of course.

I hate it here.

Speaking of AI slop…

Source

Looking forward to the peak of the competency crisis that we’re currently creating. See also: Firms Tell the PCAOB There’s an Offshoring Brain Drain.

Here’s part of the Grok query that was in response to:

Tech salaries have not uniformly kept up with inflation over the last ten years. According to various analyses, while nominal salaries in the tech industry have increased, the real value of these salaries, after adjusting for inflation, has often not matched the rise in living costs:

  • A report from Hired in 2022 showed that 82% of employees living close to their workplace and 64.5% of remote tech workers felt a squeeze on their salaries due to inflation, with U.S. tech salaries rising only by 3.2% to an average of $159,000, which was below the inflation rate at the time.
  • Forbes articles from 2022 and 2023 discussed how salary increase budgets in tech have trailed behind inflation, with salary increases not aligning with the cost of living increases.
  • Reddit users in tech-related discussions have also shared experiences where their pay did not keep pace with inflation, with some noting that only job hopping or promotions significantly countered the effects of inflation.

On the other hand, some sources suggest that certain segments of the tech industry or specific roles might have fared better:

  • The professional and scientific industry, which includes tech, was noted by the Office for National Statistics in 2022 as one where wage growth has matched inflation in recent years, particularly in the UK.
  • However, even within this industry, the growth hasn’t been consistent across all roles or locations, with some positions or areas experiencing wage stagnation or decline when adjusted for inflation.

Posts on X also reflect a sentiment that tech salaries, particularly outside of top-tier positions or companies, have not kept pace with inflation over the last decade, with some users expressing frustration over stagnant real wages in tech despite high demand for tech skills.

Remember this?

Just How Much Have Accounting Salaries Increased in the Last Five Years?

Conclusion: It sucks for everyone.

Let’s end this on a semi-positive note. The National Taxpayer Advocate wrote a holiday poem and a letter to Santa.

‘Twas the night before tax season, and all through the land;
Tax professionals were working, each with pen in hand;
The forms were all sorted with numbers just right;
who says tax accounting can’t thrill and excite?

Tax professionals nestled all snug in their chairs;
While visions of timely refunds danced through the air.

With spreadsheets and calculators, they crunched through the night;
And when the figures all balanced, they squealed with delight.

As we dive into the season of twinkling lights;
Cookies, and holiday sweaters, a “creative” delight;
I offer a heartful thank you to all (and to all a good night).

Points for effort but this is depressing.

The Purple Book.

Be well. I better not catch any of you working this weekend.

Related Posts