September 24, 2022

Friday Footnotes: Crippling Staff Shortages in Consulting; Hold Auditors Accountable; AICPA is Mad | 8.12.22

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How to follow up after a job interview [Journal of Accountancy] You aced the job interview. What’s next? This is just one of many questions that have baffled accountants of all ages and experience levels for decades. How often should you reach out? Should you do it via phone or text? How do you know when it’s time to move on? You’re not alone if you’re uncertain about what to do after an interview. Here’s how recruiters and career experts recommend that you proceed.

Hold Auditors Accountable for Complicity in Corporate Fraud [Bloomberg Tax] Unfortunately, since the fall of Arthur Anderson in the wake of the Enron scandal, the SEC and PCAOB have often failed to go after auditors playing fast and loose with the rules. The death knell of Arthur Andersen—which was one of the “Big Five” auditing firms—was a massive blow to the accounting industry and gave many regulators cold feet in bringing claims against audit firms. When the Supreme Court later overturned the government’s obstruction of justice case against Arthur Andersen, it further dampened enforcement efforts.

Open borders but talent not flowing: consultants hunt 4000-plus staff [Australian Financial Review] Big four consultancy Deloitte has the most open roles with around 1500 positions to fill, followed by EY (980), KPMG (850), PwC (500) and Accenture (several hundred). Firm leaders said that while the talent crunch was easing compared to last year, they were still facing crippling staff shortages caused by ongoing visa delays at the same time as client demand soared to near-record highs. “It’s not quite as bad as last year, but talent is still our number one priority in the firm,” KPMG national managing partner of people Dorothy Hisgrove said.

PwC fined nearly £1.8m over BT fraud audit failures [The Guardian] PwC has been fined almost £1.8m for failing to properly scrutinise the accounts of telecoms company BT after a £500m accounting fraud had been uncovered at its Italian operation. The accounting giant failed to act with the “requisite professional scepticism” and did not obtain “sufficient appropriate audit evidence” in its work on BT’s 2017 financial statements, which had to be adjusted by £513m because of the Italian scandal, according to the Financial Reporting Council (FRC).

Explaining Hollywood: How to get a job as a production accountant [Los Angeles Times] The scramble for production accountants stems from a couple of factors. The arrival of multiple new streaming platforms created a hunger for new shows to fill their pipelines and fend off competition. But the pandemic slammed the brakes on the system, shutting down many productions and forcing others to cobble together ways to film remotely. Now, with filming back in full swing, the pent-up demand for content has led to a dearth of trained crews. Those who manage the money are no exception. Another factor is that many finance specialists retired during the pandemic, exacerbating the shortage. “It’s an issue that the industry is definitely grappling and challenged with, in a big way,” said Mark Goldstein, president and CEO of the film production services company Entertainment Partners.

Aww bless their hearts

IRS seeks armed accountants ready for ‘deadly force’ [Washington Examiner] They have to work a minimum of 50 hours and be on call 24/7. And they have to look good. And all for a salary of $50,704-$89,636 and 24 days off.

IRS workers describe shortages of staff and printer paper. Critics see a powerful agency hostile to taxpayers. [NBC News] At the IRS office in Cincinnati, where Will Kohler works as a tax examiner, supply shortages mean he sometimes has to use his own pens and paper clips. He has even brought in paper for the copy machine over his 10 years there, which he says is just part of the job at the chronically paperbound and technologically outdated agency.

AICPA Addresses Level of Service with Practitioner Phone Line [AICPA] The American Institute of CPAs (AICPA) submitted a letter to the Internal Revenue Service (IRS) addressing the plummeting level of service for the Practitioner Priority Service (PPS) telephone line and providing recommendations for improvement. Despite recent efforts by the IRS to ease the burden the backlog has caused for taxpayers and practitioners, the AICPA notes that service levels for the practitioner priority service phone line had been in continuous decline for several years.

Tax Season as a Gallon of Milk [CPA Journal] My daughter is learning about volume and liquid capacity in her math class. She frequently asks me questions like, “How many quarts are in a gallon?” or “How many pints are in a quart?” There are many analogies one could use for tax season, but volume and capacity are great examples for the mind’s eye. So, how is tax season like a gallon of milk? In 1955, there were 929 pages in the federal tax code. This is our gallon of milk. Tax season is our container, and milk represents the federal tax code. Since 1955, Congress has continued pouring milk (i.e., tax legislation) into a container that was already full — actually, they have poured enough milk to fill an additional six gallons. What would happen if you continued pouring milk into a full container? It would overflow and spill, making a huge mess. You would immediately recognize that you need another container to hold the additional milk. Today, our federal tax code is more than 6,600 pages. Why are we processing seven gallons of milk in a one-gallon container?

Gensler Defends SEC Staff Accounting Bulletin on Crypto, Says FASB Should Act ‘Expeditiously’ [Thomson Reuters] “It’s very different than other parts of the market,” Gensler said. “Custody in crypto often means the public no longer has ownership of their bitcoin or crypt-ocurrency. And in fact, if the wallet provider or the crypto exchange or crypto lending platform goes bankrupt—we had a number of them go bankrupt in the last two months—when they go bankrupt, guess what, customers are … in line in bankruptcy court. So, we’ve had a lot of problems over the years with companies trying to push things off the balance sheet.”

Tax Twitter continues to cast off obnoxious clients

Navigating Accounting Firm Mergers and Shakeups (Podcast) [Bloomberg Tax] On this episode of Talking Tax, Schlisselfeld, senior managing director of CBIZ Marks Paneth, speaks about his experience of overseeing an accounting firm merger, focusing on the challenges faced and lessons learned, as well as sharing advice about how to retain talent and manage major changes.

Big Four switch: Alliance Pharma hires Deloitte as its new auditor after KPMG resigns [City A.M.] KPMG has submitted a resignation letter to Alliance Pharma letter explaining its reasons for terminating its relationship with Alliance Pharma. “The reason connected with our ceasing to hold office relate to concerns expressed to the Board with regard to the aspects of company’s approach to corporate governance relating to the preparation of the financial statements, which has ultimately resulted in a breakdown in our relationship,” KPMG said

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