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February 2, 2023

Friday Footnotes: A (Fake) Day in the Life at Deloitte; DYNAMIC Merger For Grant Thornton; CPA Awareness | 12.9.22

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News

Trump Organization found guilty on all counts of criminal tax fraud [CNN]
A Manhattan jury has found two Trump Organization companies guilty on multiple charges of criminal tax fraud and falsifying business records connected to a 15-year scheme to defraud tax authorities by failing to report and pay taxes on compensation for top executives.

Crypto

FTX hires forensics team to find customers’ missing billions: Report [Cointelegraph]
The new management for bankrupt crypto exchange FTX has reportedly hired a team of financial forensic investigators to track down the billions of dollars worth of missing customer crypto. Financial advisory company AlixPartners was chosen for the task and is led by former Securities and Exchange Commission (SEC) chief accountant Matt Jacques, according to a Dec. 7 report from the Wall Street Journal. It is understood that the forensics firm will be tasked with conducting “asset-tracing” to identify and recover the missing digital assets and will complement the restructuring work being undertaken by FTX.

Blockchain Entrepreneur Arrested in California on Fraud Charges [Coindesk]
The Justice Department has accused Rikesh Thapa of defrauding his startup tech firm of more than $1 million in U.S. currency, cryptocurrency and utility tokens, according to a press release on Wednesday. According to the indictment, in 2018, Thapa agreed to receive and hold $1 million of his company’s money in his personal bank account while the firm explored other banking options. Thapa soon began using the funds on personal expenses such as nightclubs, travel and clothing, despite reassuring the company that he was only holding the money “for safekeeping.” Thapa even falsified bank statements to conceal his theft, and in 2019, he refused to return the $1 million, according to the indictment.

Big 4

Deloitte moving Omaha office to Capitol District [Omaha World-Herald]
Dan Kinsella, the managing partner of Deloitte’s Omaha office, said that as a longtime member of the community, “we’re excited to commit to the Capitol District and be at the center of Omaha’s ongoing revitalization of the urban core.” Deloitte will join more than 20 restaurants, bars and businesses already open in the Capitol District, which is bounded by 10th Street, 12th Street, Dodge Street and Interstate 480.

Reusing Existing Elements to Create a Flexible Space: EY Melbourne [ArchDaily]
A look at EY’s Melbourne office from a design perspective. With pictures!
With transitions from large scale rooms to smaller intimate spaces, the project captures different types of work environments, which, in words of the jury, “showcases an understanding of the evolving workplace and an intention to prioritize human connection.” Complementing its flexible strategy, the design also incorporates curtains –which open or divide spaces– to enable a diversity of uses, activities and scenarios, hence creating a dynamic experience for the user. Balancing live and digital experiences, the workplace blends interaction spaces with technology, audiovisual, enhanced digital activities and modularity of components. When using the space, users have complete flexibility to reconfigure all the furniture in order to fulfill their unique preferences and requirements.

I think we’ll have a shallow recession, says KPMG chief economist Diane Swonk [CNBC]

Firm Watch

Grant Thornton merges two Orlando offices as firm continues to grow in Florida [Grant Thornton]
A DYNAMIC office change for Grant Thornton’s CHOSEN MARKETS in Florida.
Grant Thornton LLP will merge its two locations in Orlando, Florida. The merger will become effective January 1, 2023, as teammates in the firm’s downtown office on Orange Avenue join their colleagues at the office the firm opened in Orlando’s Lee Vista office park in 2021. According to Dawn Olivardia, Grant Thornton LLP’s office managing partner in Orlando, the merger will help the firm focus its growth in an office designed for the future of work. “As Grant Thornton continues to embrace a flexible approach to the future of work, our Orlando space provides the amenities our people need to focus and collaborate in an office setting,” said Olivardia, who is also the firm’s Florida Tax partner in-charge. “We’re hiring many new colleagues for our Orlando practice, and this singular location will complement our ongoing investment in this city, the state of Florida, and the clients we are proud to serve.”

BDO Ireland creates 100 jobs as it moves to new office in Dublin [RTÉ]
Accounting, tax audit, and business advisory firm BDO is investing €5m in a new office as it creates 100 new jobs. This marks the biggest investment BDO in Ireland has made in the last 20 years. The 100 new jobs in Dublin will be across all service lines – audit, tax, advisory, consulting, business services and recruitment. BDO currently employs 500 people in Ireland.

Investigations, scandals suggest Florida should think twice — at least — before paying company $1.5M [Florida Politics]
As we enter the season of giving, it seems that employees of a Mississippi-based accounting firm with a lucrative Florida contract have allegedly been caught gifting themselves funds intended to help citizens in need. The firm, Horne LLP, is currently facing possible investigation following reports that some employees intentionally mismanaged the administration of a federal $147 million relief fund for Louisiana homeowners, receiving money themselves from the very grant program they were contracted to administer for individuals in actual need.

Baker Tilly Shops for US Law Firm as Big Four Expand Services [Bloomberg Tax]
The Baker Tilly CEO sure seems to be doing a lot of interviews lately. Something’s up 🤔
Baker Tilly is seeking to partner with a law firm in the US as the global accounting firm aims to expand the range of services it can offer clients. “The legal network for Baker Tilly will be in the US in the near future,” the firm’s chief executive officer, Alan Whitman, said in an interview. The move would boost competition for US law firms, who are already seeing non-lawyer-owned legal operations gaining footholds in states such as Arizona and Utah that are testing new service-delivery models.

remote accounting jobs meme

Do you have a wandering eye? Check out these remote accounting jobs at Accountingfly. Never going into the office sounds pretty great.

Audit

Audit reform should not dance to the Big Four’s tune [Financial Times Opinion]
Britain’s biggest companies and their auditors are playing a £10bn game of musical chairs. When the music stops we will have learnt something about how seriously we should take the Big Four accountants’ opposition to audit market reforms. Mandatory auditor rotation was introduced by the EU in 2016, aimed at eliminating supposed cosiness between companies and auditors. Lloyds Banking Group, Barclays and BP were among the businesses whose auditors had served for more than a century. Much of the accounting profession, led by the Big Four — Deloitte, EY, KPMG and PwC — opposed mandatory rotation. The accountants argued a compulsory merry-go-round was unnecessary and would hurt audit quality. Forced rotation would limit companies’ discretion to pick “the most capable auditor” and impose “additional financial and administrative burdens on companies”, Deloitte said in 2012. Companies “would need to continually educate new auditors on their businesses and risks”, it added. Early evidence suggests the accountants’ objections were wide of the mark.

Auditor Independence is Currently Not on SEC Rulemaking Agenda, Senior Officials Says [Thomson Reuters]
During a speech in July, Securities and Exchange Commission Chair Gary Gensler said that the commission and the PCAOB should holistically review auditor independence rules and consider whether updates are needed because, among other issues, the board’s audit inspection continues to find problems related to independence. But at least for now, it is unclear what will come of it. In September, SEC Acting Chief Accountant Paul Munter told Thomson Reuters that his office—the Office of the Chief Accountant (OCA)—is looking at independence rules and is also engaged with the PCAOB, which the commission oversees. Two and a half months later, Munter’s deputy at a conference seemed to indicate that a specific rulemaking project at this juncture may not be on the table. “It’s not currently on the actual rulemaking agenda; so, you would have to think about the priority of where that is. But the chair did direct both the SEC and the PCAOB,” said Diana Stoltzfus, a deputy chief accountant in OCA said at the 17th Annual Audit Conference hosted by the Baruch College Zicklin School of Business in New York on Nov. 29, 2022.

FRC introduce new measures to support smaller audit firms and ‘improve competition’ [AccountancyAge]
The Financial Reporting Council (FRC) has revealed plans to launch a new initiative – ‘Audit Firm Scalebox’ – aimed at assisting smaller audit firms in growing their share of the market. The new supervision measures will aid smaller firms auditing listed and other public interest entities (PIEs) by helping them to develop robust quality control systems. “To improve competition and choice in the market it is vital that the smaller firms have the capability and capacity to ‘scale up’ without compromising audit quality,” said Sarah Rapson, FRC executive director of supervision.

‘Data Nerd’ Regulator Preps for Digital Auditing Future (Podcast) [Bloomberg Tax]
Christina Ho, a member of the Public Company Accounting Oversight Board, has called technology the “audit quality challenge of the 21st century.” She’s leading a working group of technologists, data scientists, and more traditional finance leaders to help the regulator plan for the future of digital auditing—setting the stage for guidelines that could boost audit quality—and facilitate an even playing field for large and small firms.

Some Other Stuff

WCU announces FORVIS as new name for its accountancy programs [Western Carolina University]
Western Carolina University leaders gathered with representatives of the nation’s eighth largest accounting firm Friday, Dec. 2, to mark a subtle but meaningful change in the College of Business as its accountancy programs now have a new name. Previously christened the Dixon Hughes Goodman Accountancy Programs in recognition of $1 million in gifts and pledges in 2015 from more than 50 WCU alumni employed by the firm, the programs are now called the FORVIS Accountancy Programs. The name change comes in the wake of the recent merger of the limited liability partnerships known as Dixon Hughes Goodman and BKD to create a new firm called FORVIS. The new moniker stands for “forward vision,” said Michael Crawford, a 1987 WCU graduate who serves as FORVIS chief performance officer.

CPAs reaching out to students to address shortage in profession [C&G News]
The Michigan Association of CPAs is calling all potential young accountants, CFOs and financial advisors. The organization, commonly known as MICPA, is working to raise awareness of accounting career opportunities among high school students by sending its members into numerous Michigan schools to educate and share their personal journeys within the profession. “What the MICPA is doing is to raise awareness of what the certified public accountant profession is. When we go into schools, students often don’t even know what a CPA is. We want to make them aware of the possibilities,” explained Matthew Kidd, one of the MICPA members working in the schools. “Either MICPA develops relationships with the high school educators and they arrange for the speakers to come in, or the CPAs directly speak with local high schools and they arrange for a speaker to come in. … It’s generally the CPA going classroom to classroom, focusing on business or accounting classes.”

The Baby Boomer’s Guide to CPA Firm M&A Happiness [CPA Practice Advisor]
Boomer firm owners might start having succession issues due to a saturated market.
Succession is a front-and-center issue for “baby boomer” CPA firm owners looking toward retirement. For many, however, internal succession is not an option. So, they look to M&A with another firm to secure an exit. The harsh reality in today’s M&A market? Too many other baby boomer firm owners are crowding the market! And they’re hungry to sell. The supply of practices owned by older firm owners is large and the demand for them is shrinking. Valuations for firms are under pressure and boomers have many reasons for gloom.

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