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Friday Footnotes: Accountant Shortage Ramps Up Work Pressure; Celebrities’ Trusted CPAs; ERC Reverse Card | 12.8.23

Portrait of a cool dachshund dog, wearing black and silver star-shaped glasses for a party, who sits on a yellow background
Footnotes is a collection of stories from around the accounting profession curated by actual humans and published every Friday at 5pm Eastern. While you’re here, subscribe to our newsletter to get the week’s top stories in your inbox every Tuesday and Friday. 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 contact the editor or hit us up on Twitter @going_concern. See ya.

Cool People

The 2023 Top 100 Most influential People in Accounting [Accounting Today]
As with every year, it is difficult to narrow the list to just 100, so AT focused on those who have been influential over the last six months and are projected to continue that influence over the next six.

Peak W-2: What’s It Take to Be the Accountant to the Stars? [Town & Country]
Frank Selvaggi and Anthony Bonsignore are accountants. They’re also the go-to confidants and advisors for hundreds of A-listers, and two of the most popular guys from the Hamptons to Hollywood.

Citrin Cooperman CEO on ‘Life Lessons from the Accounting World’ [The Ionian]
Citrin Cooperman CEO Alan Badey presented the story of his career in the accounting world and valuable life lessons from his career experience in the LaPenta School of Business, moderated by LSB Dean John Demelis, M.B.A., C.P.A. At the core of Badey’s talk is his process of self-discovery, a theme which he recognizes as relevant to many college students. “When I was your age, I wanted to be independent,” explains Badey, “I was willing to work as hard as I needed to work to be independent.”


The AICPA and NASBA’s Inadequate Response to Reaching 150 Hours [CPA Journal]
The 150-hour requirement is a considerable barrier for students wanting to become a CPA or considering accounting as a major, even if it is not the dominant barrier. Recent surveys by the CAQ and Illinois CPA Society have identified starting salaries, work environment (e.g., hours), and quality of work performed as leading barriers. The requirement of an additional 30 credits over a standard bachelor’s degree, adds, even at an in-state public university, an average of $27,940 in costs (College Board 2022 Trends in College Pricing), frequently funded through more student loans.

Expand the accounting pipeline with a mentorship circle [Journal of Accountancy]
At a time when the CPA pipeline is running slow, mentoring can be a powerful tool to recruit potentially interested students into accounting and guide them to careers in the profession.

Auditors say accountant shortage ramps up work pressure: CAQ [CFO Dive]
A shortage of accountants has intensified pressure and ramped up workloads for accounting teams at U.S. companies while hindering recruitment and retention, according to 78% of audit partners surveyed by the Center for Audit Quality. In an effort to overcome a talent shortage, about one in three companies are increasing compensation and workplace flexibility, the CAQ said Wednesday. “Audit partners see challenges ahead for businesses as inflation remains above historic levels, new regulations affect compliance costs and cybersecurity threats remain high,” Julie Bell Lindsay, the center’s CEO, said in a statement. The CAQ surveyed 748 audit partners at eight of the largest accounting firms about conditions for their clients.


IRS expands work on aggressive Employee Retention Credit claims; 20,000 disallowance letters being mailed, more action and voluntary disclosure program coming [IRS]
As part of continuing efforts to combat dubious Employee Retention Credit (ERC) claims, the Internal Revenue Service is sending an initial round of more than 20,000 letters to taxpayers notifying them of disallowed ERC claimsIRS is disallowing claims to entities that did not exist or did not have paid employees during the period of eligibility to prevent improper ERC payments from being made to ineligible entities. This group of letters will cover taxpayers ineligible for the ERC either because their entity did not exist or did not have employees for the time period when the credit was claimed. “With the aggressive marketing we saw with this credit, it’s not surprising that we’re seeing claims that clearly fall outside of the legal requirements,” said IRS Commissioner Danny Werfel. “The action we are taking today is part of an initial set of steps in our compliance work in this area, and more letters will be going out in the near future, including both disallowance letters and letters seeking the return of funds erroneously claimed and received.”

Avalara Survey Finds US Tea Merchants and Small to Medium Businesses Struggle to Navigate Tax Complexity and Daily Tax Rate Changes on Eve of 250th Anniversary of Boston Tea Party [PR Newswire]
76% of tea merchants have received penalties or fines for non-compliance with sales tax obligations, with the average fine being $2,000, as they navigate more than 900 different tax rules on tea products across the country.


SEC approves new PCAOB audit confirmation standards targeting fraud [CFO Dive]
The Securities and Exchange Commission has approved a new standard tightening the requirements for auditors when confirming details of an audit, including verifying with a third party assertions made by a client in a financial statement. The standard for the auditor confirmation process was adopted by the Public Accounting Oversight Board in September, replacing an interim rule enacted more than 20 years ago. It adjusts to the use of email and other technology widely adopted in recent decades, and bolsters confirmation procedures with the aim of averting fraud. “The new standard will help auditors detect fraud and better protect investors now and into the future,” PCAOB Chair Erica Williams said Monday. The SEC approved the standard on Dec. 1.


KPMG plans merging UK and Swiss businesses [Reuters]
KPMG, one of the world’s Big Four accounting firms, said on Thursday that it is exploring a merger of its UK and Swiss businesses in a bid to boost profit. KPMG UK had started talks with the Swiss unit to explore working together closely to benefit clients and partners, Jon Holt, CEO of KPMG UK, told Reuters in an emailed statement. “Together, we would grow faster, be more profitable and do so in a sustainable way,” Holt said.

McKonly & Asbury Welcomes Philadelphia Based Morris J. Cohen & Co., P.C. [McKonly & Asbury] The merger will be effective January 1, 2024. Morris J. Cohen began its professional practice in 1929 and is highly regarded in the Philadelphia area for their experience in audit and tax planning, and compliance. The addition of the Morris J. Cohen professional and administrative personnel to the McKonly & Asbury team will enhance these service capabilities. The Philadelphia office, led by Managing Directors Frank Cellucci, CPA and Michael Bonventure, CPA will continue operating from the current location at 1601 Market Street, Suite 2525.

Child-feeding program reimbursements delayed due to NC accounting software switch [WRAL]
The Child and Adult Care Food Program reimburses daycares that serve low-income families for food they provide, as long as the meals are nutritious and the daycare meets requirements. The program is federally funded, but the money flows through the state Department of Health and Human Services. In recent months, DHHS has moved the program to a new data system and transitioned it to a new accounting system now used by all state agencies. The changes delayed millions of dollars in payments in October. Millions more are delayed now, though the department said Thursday that it expects the $6.8 million outstanding reimbursements — to cover food daycares purchased in October and November — will be paid by the end of this week.

Opioid trust transparency questioned after accounting firm choice [The Center Square]
The Pennsylvania opioid trust recently chose an accounting firm to steward the money dedicated to assuaging the impact of drugs and addiction in the commonwealth. Some of the trust’s board members, though, voiced concern over how the firm, Pennsylvania-based Maher Duessel, got chosen. Ratified in a vote during the Nov. 30 public meeting of the trust, Duessel will provide accounting services and relieve the County Commissioners Association of Pennsylvania from those duties. Association officials were anxious to end their accounting responsibility for the trust before Dec. 15, when money will be sent out to county governments and other localities. Criticism of the accounting change wasn’t specific to Maher Duessel’s qualifications but to the selection process itself.

Former Jacksonville Jaguars employee accused of stealing more than $22 million from NFL team to fund lavish lifestyle [CNN Sport]
A former employee of the Jacksonville Jaguars has been accused of stealing more than $22 million from the NFL team to fund a lavish lifestyle, according to court documents filed in US District Court this week. The court filing says Amit Patel used the money to fund online gambling, pay for private travel and accommodation for himself and friends as well as sporting tickets, acquire a new Tesla car, Nissan pickup truck, purchase cryptocurrency and buy a property in Ponte Vedra Beach, Florida. According to the court documents, Patel is accused of wire fraud and illegal monetary transaction, stealing millions via the team’s virtual credit card (VCC) system over a four-year period.

Patel is accused of stealing the money from an organization referred to as “Business A,” but the Jaguars confirmed to CNN Sport that they had employed Patel and were the victim of his alleged crimes. “We can confirm that in February 2023, the team terminated the employment of the individual named in the filing,” the team said in a statement sent to CNN. “As was made clear in the charges, this individual was a former manager of financial planning and analysis who took advantage of his trusted position to covertly and intentionally commit significant fraudulent financial activity at the team’s expense for personal benefit. The team engaged experienced law and accounting firms to conduct a comprehensive independent review, which concluded that no other team employees were involved in or aware of his criminal activity.”

Hunter Biden hit with 9 tax-related charges, including 3 felony counts [NBC News]

‘To whom much is given, much is expected’ | Accounting firm employees hit San Antonio streets with $40,000 giveaway task [KENS 5]
Michael Perkins’ speech to his employees is off the cuff, but from the heart. “Not only will we bless the people that we give to you today,” Perkins said. “We’ll bless a lot more people than that.” Each year, the CEO and managing partner of Slattery Perkins Ramirez (SPR) gives the accounting firm’s employees strong encouragement for their annual “Giving Legacy” challenge. The firm started the challenge three years ago after seeing a video produced by Red Wagon Properties in San Antonio. In the video, the employees get put in charge of the property management’s charitable. Cash gets handed out, and the workers must go out to make a difference because “they are the company.” “It instills in them a spirit of generosity that they may not otherwise know or have,” Perkins said. After submitting their ideas two weeks before the money distribution, SPR provides its employees $1,000 each. “No rules. Just go be a blessing in the community,” Perkins said.


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