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Public Accounting Trends
Data Reveals The CPA License Is Losing Ground [INSIDE Public Accounting]
The CPA credential remains a cornerstone of the profession, but new data indicate its prominence is steadily declining. Between 2020 and 2024, the average percentage of staff holding CPA licenses across all firms dropped from 56.0 percent to 48.4 percent. This decline has occurred across all firm sizes, suggesting a systemic shift in both hiring practices and credentialing trends. Larger firms, which tend to offer a broader array of advisory and consulting services, report even lower CPA ratios, with only 41.5 percent of staff holding licenses in 2024.
CPA society leader Johnson sanguine about future of profession [ROI-NJ]
Aiysha Johnson, executive director at the New Jersey Society of CPAs and the first Black woman to lead the state CPA society, is optimistic about the future of the profession. Johnson said accounting firms are being more aggressive and strategic in attracting prospective accountants.
Talent
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Firm Watch
CohnReznick acquires Piascik Certified Public Accountants [Consulting.us]
The deal will expand CohnReznick’s presence in the Mid-Atlantic region, adding a Richmond office to its eight locations across Metro DC, Baltimore, Charlotte, and South Florida. Steve Piascik will join CohnReznick as office managing partner for Richmond while Ryan Losi will join as a partner in the international tax practice.
Grant Thornton US and UK compete for German sister firm [Financial Times]
The competition underlines a new dynamic between the firms following their recent injection of private capital. Grant Thornton’s US arm has been on an acquisition spree after selling a majority stake to a consortium led by New Mountain Capital last year, in what was the biggest private equity takeover of an accounting firm.
Law & Order
Credit Fund’s Collapse Leads to $1 Billion Lawsuit Against EY [Bloomberg]
Bridging Finance Inc.’s receiver is suing Ernst & Young LLP for C$1.4 billion ($1 billion), alleging the auditor failed to detect fraud and misstatements that contributed to the Toronto private lender’s collapse. In a claim filed with Ontario’s Superior Court last month, PricewaterhouseCoopers alleged that EY issued unqualified opinions on Bridging’s books from 2014 to 2020 despite red flags, including inflated asset values and hidden defaults.
N.Y. state auditor whose job is to uncover financial fraud accused of financial fraud himself [CBS News New York]
A state auditor whose job was, in part, to uncover financial fraud is now accused of committing financial fraud himself. Tobias Otieno, 41, is charged with grand larceny as a public corruption crime. Otieno worked for the New York state comptroller. He’s accused of stealing $408,000 from the Town of Wallkill. “It’s appalling and it’s hard to express the level of outrage from the comptroller and all members of this office at this absolutely abhorrent and rogue behavior by a staff member,” said Nelson Sheingold, chief counsel to state Comptroller Tom DiNapoli.
Audit
UK’s FRC probes Deloitte and Azets over fintech Stenn audits [International Accounting Bulletin]
Stenn entered administration in December 2024, following lender concerns over suspicious transactions. The focus of the probe is on the audits conducted between 2017 and 2023, a period during which Deloitte succeeded Azets as the auditor for the 2023 financial year.
Auditors Fail in Role of Safeguarding Carbon Offsets: Study [Bloomberg Law]
Auditors are failing in their role as third-party guarantors of the quality of carbon offsets, according to new academic research. In a paper published Thursday in Science, an international peer-reviewed journal, Cary Coglianese, a law and political science professor at University of Pennsylvania, and Cynthia Giles, a former senior advisor at the U.S. Environmental Protection Agency, conclude that auditors selected and paid by the companies they inspect can’t affirm the credibility of the projects they assess. This is largely due to “economic incentives and an unconscious bias to make findings that work to their client’s advantage,” the authors wrote. “It is hard to see how auditors could maintain their livelihoods if they were to disapprove” the amount of junk credits that have been identified in the market, they wrote.
Technology
Abacus raises $6.6M to bring AI assistants to accounting firms [silicon ANGLE] “The idea for Abacus came from our own CPA issuing us a ‘7216 consent form’, essentially telling us that the bulk of our tax prep work was going to be offshored,” said Chief Technology Officer Brandon Sugarman. “This sparked a curiosity in the industry and eventually led to our first paying customer.”
Leaders will soon be managing AI agents – these are the skills they’ll need, according to experts [World Economic Forum]
Nvidia CEO Jensen Huang said in October 2024 that he hopes the company will one day employ 50,000 people, working with 100 million agents. “AIs will recruit other AIs to solve problems. AIs will be in Slack channels with each other, and with humans,” Huang said. “We’ll just be one large employee base, if you will – some of them are digital and AI, and some of them are biological.”
Financial Reporting
Non-US firms are shrewd accounting standards shoppers [CFO Dive]
“This research shows that accounting regime selection is not merely a matter of regulatory compliance,” the lead researcher Dr. Heylel-li Biton of the Hebrew University Business School said in a July 2 release on the findings that were published in The International Journal of Accounting. “It reflects calculated decisions by firms to align their financial reporting with operational goals and cost structures.”
Tax
AICPA: Guidance needed on catch-up contributions under Roth mandate [Journal of Accountancy]
The AICPA requested additional guidance from Treasury and the IRS on catch-up contributions that are designated as Roth contributions in Section 603 of the SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328). “Post-SECURE 2.0, employers and plan administrators will need clear guidance to ensure compliance of the law regarding Roth-mandated catch-up contributions,” said Kristin Esposito, director–Tax Policy & Advocacy at the AICPA. “Our recommendations to the regulations proposed by Treasury and the IRS, if adopted, will make it easier for plan administrators to implement the law.”
The Good, the Bad, and the Ugly in the One Big Beautiful Bill Act [Tax Foundation]
The One Big Beautiful Bill Act (OBBBA) is now law. Any comprehensive tax legislation is going to have its wrinkles, and the One Big Beautiful Bill is no different. We have previously published estimates of the budgetary, economic, and distributional effects of the House legislation and the Senate legislation, but the final version has plenty of good, bad, and ugly to cover as well.