January 21, 2022

Friday Footnotes: Another PwC Failure; Excel JPGs; Busy Season Rants | 1.6.22

a black cat peeking out of a patterned blanket

Elizabeth Holmes and her Big 4 audit firm buddies at Theranos [The Dig] When audit firms don’t live up to their public duty, everyone gets hurt. The harm at Theranos was more than financial.

PwC ‘Failed Dismally’ as Auditor of South African Airways [Bloomberg Tax] A South African judicial report has sharply criticized PwC for overlooking fraud and corruption as auditor of South African Airways. “This commission has concluded that state capture has been established,” acting Chief Justice Raymond Zondo said in a report concerning allegations of wrongdoing at South African Airways and its affiliates. PwC audited SAA for five years between 2012 and 2017, at times in conjunction with Nkonki Inc. “PwC and Nkonki gave clean audits to SAA for five consecutive years between 2012 and 2016,” according to the report.

Prager Metis is First CPA Firm in the Metaverse [New Jersey Business] Prager Metis’ metaverse office will offer traditional and nontraditional advisory and accounting services for individuals and businesses in Decentraland

Ore. Panel Revives Suit Against PwC In $22M Tax Dispute [Law360] An Oregon appeals court revived negligence claims a construction company’s owners lodged against PwC and a law firm regarding advice on an asset transfer that resulted in courts finding the owners liable for trying to dodge $22 million in taxes.

Mazars fined over local government audit failings [Financial Times] Mazars has been fined £250,000 by the UK accounting regulator for failings in the mid-tier firm’s audit of an unnamed local government authority. The Financial Reporting Council, which oversees audit quality for larger local authorities in England, said its enforcement committee had “found failures in the reviewed audit, which it considered fell far short of the applicable standards and regulations and had the potential to undermine confidence in the standards in general of registered auditors.”

Tweet of the week:

Former Deloitte restructuring chiefs swoop on KPMG offshore arm [Sky News] The strategic consulting firm which last year led the buyout of Deloitte’s UK restructuring operations will this week swoop on an overseas unit of KPMG. Teneo is close to announcing the acquisition of KPMG’s Cayman and British Virgin Islands restructuring division, giving it a foothold in key global markets for offshore insolvency activity.

Busy season rants:

You guys weren’t joking about busy season. from Accounting

You guys were right. Busy season at B4 is truly awful from Accounting

5 key things CPAs should do when updating their CV [CPA Canada] This advice from CPA Canada is of course directly related to the above Reddit posts.

50 Accounting Puns for CPAs, Accountants, and Anyone Who Needs a Laugh During Tax Season [Parade] Be audit you can be, guys.

COVID-Related Tax Resources [The CPA Journal] In addition to the human health, remote work environment, and technology challenges presented by the coronavirus (COVID-19) environment, tax practitioners have had to absorb and apply several tax law and related changes in the past two busy seasons. These included the Coronavirus Aid, Relief, and Economic Security (CARES) Act of March 2020 and the Coronavirus Response and Consolidated Appropriations Act of 2021 (passed in December 2020). The American Rescue Plan Act of March 2021 continued many of the previous programs, and it added new economic assistance provisions.

GASB to consider governmental going concern standards [Journal of Accountancy] Shout out from GASB! Oh wait…nm. GASB is undertaking a major project on going concern uncertainties and severe financial distress, as well as pre-agenda research activity on subsequent events, as part of its technical plan for the first four months of this year.

Countdown Starts to Private Company Lease Accounting Overhaul [Bloomberg Tax] By all accounts, figuring out how to comply with the Financial Accounting Standards Board’s new lease accounting standard will be a major undertaking. Luckily, private companies don’t have to comply as soon as the calendar turns to January. Private businesses have until their first annual report of 2022, which for most calendar-year companies will be Dec. 31, 2022

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