September 24, 2022

Friday Footnotes: Accounting Salaries on the Rise; PwC Sets a Record; Succession Suggestions? | 9.23.22

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Salaries

Salaries in Finance & Accounting on the Rise as Executives Adapt to Fluctuating Market Pressures, Says New Report [Randstad] According to a new report from Randstad USA, finance and accounting professionals remain in the driver’s seat of the labor market, with demand rising for roles like financial analysts and staff accountants. Other positions requiring similar skills that are especially in demand include accounting managers, controllers, and payroll coordinators/clerks. Randstad’s 2023 Finance & Accounting Salary Guide found that demand for these roles is most acute in California, Texas, New York, Florida, Illinois, North Carolina, Ohio, and Georgia. Overall, there was a high regional variance between average salaries for finance and accounting professionals, which can be explained by variations in the cost of living and the fact that employers are offering higher salaries to attract workers back into the office in some markets. The report found that salaries are highest for finance and accounting professionals employed in San Francisco and Los Angeles (+64.8% and +57.6% above the national average, respectively) and lowest in Little Rock and Kansas City (-8.0% and -6.1% below the national average, respectively).

The Disruptive Future We Were Promised

New Deloitte, IMA Survey Indicates Majority are Unprepared for the Future of Accounting and Finance [PR Newswire] A new multi-national survey from Deloitte’s Center for Controllership and IMA (Institute of Management Accountants) finds that even though 76% of more than 1,300 surveyed finance and accounting professionals, including analysts, managers, controllers and CFOs, say that their organizations’ controllership functions have begun transformation journeys, nearly all (95%) report they have more work to do or aren’t progressing quickly enough. Another 65% admit their organizations’ controllership function is not prepared or is only somewhat prepared to meet future demands. The survey report, titled “Stepping into the future of controllership: From accounting to insight,” also details the transformative effect the global COVID-19 pandemic has had on the finance and accounting function and how finance and accounting professionals can use that momentum to drive innovation within controllership and deliver more value to their organizations.

AI ethics a growing concern [Accounting Today — subscription] The increased use of artificial intelligence in accounting software has brought with it growing concerns over the ethical challenges this technology creates for professionals, their clients and the public as a whole. The past few years have seen a growing number of accounting solutions touting their use of AI for a wide range of applications, from tax planning and audits to payroll and expenses to ERP and CAS. The accounting profession spent $1.5 billion on such software in 2021 and is projected to spend $53 billion by 2030, according to a report from Acumen Research and Consulting.

Regulation is coming to crypto: What that means for tax & accounting professionals [Thomson Reuters] Cryptocurrency has expanded beyond its initial nascent phase to become a pervasive asset class that exists throughout today’s financial ecosystem. One might not realize it, but institutions are adopting cryptocurrencies and digital assets at record paces; and trading, buying, and holding crypto is now just as easy as trading any other asset, like stocks or bonds — perhaps even easier. And perhaps, a little too easy.

Big 4

Deloitte to grow UK consulting practice by 40% by 2027 [Deloitte] UK headcount will grow to around 11,000 by 2027 and will build on the approximately 1,200 new jobs created across the country in FY22, £220m (USD$239m) to be invested in Deloitte’s expertise in digital transformation, technology and advisory over the next five years

Former EY director to pay $24K for insider trading [Compliance Week] A former Ernst & Young business development director agreed to pay $23,900 to settle charges levied by the Securities and Exchange Commission (SEC) he engaged in insider trading.

FC Barcelona replaced EY with Grant Thornton after warnings [Consultancy.eu] Spanish football [soccer for us Yanks] giant FC Barcelona has reported a strong profit for its latest financial year, months after it installed Grant Thornton as its new auditor. The firm took over from EY, shortly after the Big Four auditor warned of ‘a hole’ in the football club’s finances worth hundreds of millions of euros.

PwC Middle East sets a new record welcoming +500 new graduates with 54% female joiners [Zawya] PwC Middle East welcomed 412 graduates this summer, setting a record high of 529 new graduates throughout 2022 and reinforcing PwC’s commitment to investing in the region’s talent. The newly hired graduates are across all of PwC Middle East’s lines of service. Their comprehensive training will enable them to join the firm’s community of solvers, where they will have the opportunity to immerse themselves in different sectors including ESG, digital transformation and financial services.

Busy Month For Deloitte: Consulting Giant Announces Major B-School Initiatives [Poets & Quants] One of the biggest consulting companies in the world is also one of the biggest employers of business school graduates. So it’s news when Deloitte announces a new partnership with a leading B-school — even more so when it announces more than half a dozen of them. Deloitte this month unveiled the names of six universities and colleges that will participate in the second year of its Future of Work Institute; the schools are Boston University, Florida State University, Howard University, the University of Nebraska-Lincoln, the University of Southern California, and Dallas College.

CFOs

Netflix Chief Accounting Officer Ken Barker Resigns After 3 Months In Role; CFO Spencer Newman To Assume Duties During Replacement Search [Deadline] Ken Barker, the principal accounting officer at Netflix, has resigned from the company just three months after he arrived. In an SEC filing, the company said Barker submitted his resignation on Thursday. The filing described it as a “personal decision” and emphasized that it was “not the result of any disagreement with the company on any matter relating to the company’s financials, operations, policies, or practices.” Barker joined Netflix last June after a 19-year run at Electronic Arts. Before EA, Barker worked at Sun Microsystems and Deloitte & Touche.

CFOs continue talent retention battle [CFO Dive] CFOs looking to attract and retain the right kind of talent amidst inflationary pressures, rising interest rates and other economic tensions need to “double down on recognition and meaningful work for employees,” said Jessica Bier, managing director of Deloitte Consulting, in an interview. In order to attract and retain viable talent to keep business afloat, 71% of CFOs indicated that a flexible workplace environment was their approach, 63% said clarity around career development and growth opportunities and 62% pointed to increased salaries, per the second wave of data in the Q3 CFO Signals report.

Audit

China sends regulators to Hong Kong to assist U.S. audit inspection-sources [Reuters] Beijing has sent a team of regulatory officials to Hong Kong to assist the PCAOB with onsite audit inspections involving Chinese companies, four people familiar with the matter said, as part of a landmark deal between the two countries.

Revolution Beauty auditor raises ‘serious concerns’ over accounts [Financial Times] Revolution Beauty, the online retailer that floated in London last year, has slashed forecasts and revealed its auditors have refused to sign off its accounts. The company said on Friday that BDO had informed it of “a number of serious concerns” regarding its accounts for the year to February 2022. Among issues highlighted by the auditor was the company’s “ability to provide sufficient and accurate audit evidence” in several areas and “the validity of certain commercial arrangements entered into by the company”.

OSC contacts audit firms for information about internal policies and procedures [Ontario Securities Commission] Meanwhile, in Canada: The Ontario Securities Commission (OSC) announced today it will be making targeted inquiries to certain public accounting firms that conduct audits of Ontario reporting issuers. As a result of ethical violations identified by regulators in Canada and other jurisdictions, the OSC will request specific information about audit firms’ internal policies and procedures. The scope of this review does not presently include individual audits of reporting issuer financial statements previously filed with the OSC. Among other things, the OSC will seek information about firm policies related to compliance with relevant ethical requirements and the operation of internal whistleblower programs. The OSC will also request details about firm procedures with respect to the dating of audit work performed and the implementation of internal training courses.

Practice

What small firms need to know about succession and M&A [Journal of Accountancy podcast] Listen in as Terrence Putney, CPA, managing director with Whitman Transition Advisors and a leading adviser on accounting firm mergers, discusses succession and related M&A trends with Small Firm Philosophy host Jeff Drew, a manager with PCPS. Over his 44-year career, Putney has been involved with hundreds of accounting firm M&A deals and also co-written more than 20 articles on succession-related issues for the JofA.

News

Trump’s Former Accounting Firm Begins Turning Over Documents to Congress [New York Times] Mazars USA, the longtime accounting firm for former President Donald J. Trump that cut ties with him and his family business this year, has begun turning over documents related to his financial dealings to Congress. More tranches of documents are expected to follow.

Investors demand overhaul of ‘outdated’ US accounting rules [Financial Times] “Investors have increasingly voiced concerns that accounting standard-setting has not kept pace with the evolution of the sources of value and risk, leaving investors without the information they need to value modern companies,” the US Securities and Exchange Commission’s investor advisory committee wrote in a resolution passed on Wednesday.

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