Friday Footnotes: Deloitte Busted Using AI in Expensive Reports Again?; For the Last Time, Christmas Parties Aren’t For Hooking Up | 11.28.25

Posted on by Going Concern News Desk
two dogs on a picnic table
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Escándalo!

How Christmas party cost senior partner his $850K job: ‘Wanted to sleep with her’ [New York Post]
Leonard Nicita was terminated from his role as a senior partner in the firm’s Transaction Tax team in November 2023, according to a decision from Justice David Mossop in the ACT Supreme Court last month. The first incident happened at a 2022 Christmas party which had a “Miami Vice” dress-up theme, and resulted in a female partner making a complaint to management, the decision said. During the party, as Nicita’s managing partner described it, he “made comments to the complainant to the effect that you thought she was beautiful, you wanted to sleep with her and, when the complainant said she was married, you noted that most of your affairs are with married women”.

Major N.L. healthcare report contains errors likely generated by A.I. [The Independent]
Authored by global consulting firm Deloitte and published by the Department of Health and Community Services in May, Newfoundland and Labrador’s Health Human Resources Plan contains at least four citations which do not, or appear not to, exist. The report cost the province nearly $1.6 million, according to documents obtained through an access to information request and published on blogger Matt Barter’s website.

State of the Profession

The Accounting Comeback [The CPA Journal]
Dale Goldstein, MBA, CISA has some things to say about how accounting is doing these days.

The Ghost of Enron

Nvidia’s ‘I’m Not Enron’ memo has people asking a lot of questions already answered by that memo [The Verge]
Over the weekend, a strange Substack post from what appears to be a CEO of a pet relocation company went very viral. This post — which to be clear, is bullshit — alleges that Nvidia is engaged in what “may become the largest accounting fraud in technology history.” That’s a load-bearing “may,” in the sense that there’s no credible reason to believe Nvidia is engaged in fraud at all. Apparently this spooked Nvidia, which — as first reported by Barron’s — has sent a note to analysts clarifying that it is not, in fact, Enron. That note, which The Verge has seen, addresses the specific allegations in that Substack, as well as claims by famed short seller Michael Burry that Nvidia’s accounting of stock-based compensation didn’t make sense. (According to Nvidia, Burry seems to have incorrectly added taxes on restricted stock units to get his numbers.)

Law & Order

Former Savannah School District Accountant sentenced for embezzlement [KQ2]
A Savannah, Missouri, man was sentenced in federal court Monday for embezzling funds from the Savannah R-III School District and his employees. Anthony S. Moon, 44, worked as the Savannah School District’s accountant. In addition, he was also the owner and president of Parker and Associates, LLC, a tax preparation and bookkeeping service company.

A Figment of the Protester’s Imagination: GAO Rejects EY’s Discussions Argument [JD Supra]
In Ernst & Young, LLP, B-423491.2 (Sept. 26, 2025), Ernst & Young (EY) protested the scope of corrective action taken by the Department of the Army following EY’s earlier protest of the Army’s award to Guidehouse for support of the Army Financial Improvement program. EY’s initial protest resulted in a voluntary corrective action, during which the agency announced it would reevaluate proposals and make a new award decision. However, during implementation of that corrective action, Guidehouse informed the Army that one of its proposed key personnel was no longer available. That development led the Army to open limited discussions focused on key personnel substitution, which in turn became the focus of EY’s follow-on protest.

AI

Uh-oh, accounting concerns circle the AI boom [SiliconANGLE]
As investors start to care about returns from all the spending on artificial intelligence, accounting is becoming a big topic of concern. In his Breaking Analysis this week, Dave Vellante makes the case that GPUs have plenty of legs, quelling most concerns that lengthening depreciation times are a red flag. That said, Meta is particularly, shall we say, creative, when it comes to accounting for, or not accounting for, its multibillion-dollar spending on data centers.

Fear of AI-driven job displacement nearly doubles in a year: KPMG [CFO Dive]
Fifty-two percent of U.S. workers now fear job displacement due to artificial intelligence — nearly double last year’s level, according to survey results released Monday by KPMG. “Workers are using AI to become more effective, but they don’t see how that effectiveness translates back to them,” Katie Dahler, human capital advisory leader at the Big Four accounting firm, said in a press release. “By reinvesting AI-driven productivity gains into the upskilling that employees are demanding, companies can prove they see their people as partners in transformation and build trust for the long term.”

Related Posts

Accounting News Roundup: Olympus Culture ‘Rotten to the Core’; NYC Schools Ex-CFO’s Email Use; Your Florida Tax Scam Du Jour | 12.07.11

The Culture Was Corrupt at Olympus, Panel Finds [NYT]
An outside panel appointed by Olympus to investigate its financial scandal issued a harsh report Tuesday, calling the company’s recently departed management “rotten to the core.” The panel, led by a former Japanese Supreme Court judge, also details the roles it claims were played by three former Nomura bankers in arranging a cover-up, and it says Olympus paid the bankers for their efforts. It also criticizes Olympus’s auditors, KPMG AZSA and Ernst & Young ShinNihon, for failing to expose fraud at the company.

PCAOB Warns of Audit Concerns introng> [AT]
The alert aims to help auditors identify matters that require additional attention. “Today’s volatile economic environment may affect companies’ operations and financial reporting, which has implications for audits,” said PCAOB chairman James R. Doty in a statement. “The alert reminds auditors of their responsibilities under these conditions.”

Olympus auditors trashed by investigators [Accountancy Age]
KPMG’s unqualified audit report in March 2009 was “inappropriate” and relied too heavily on outside experts’ opinion of Olympus accounting, the committee concluded. Ernst & Young was appointed auditor later that year and the investigation criticised the firm for allowing a questionable consulting fee to be treated as goodwill. “Even when we account for the fact that they [had] just assumed their position as auditor and they lacked knowledge of the past events, we cannot conclude this was appropriate,” the committee said.

Schools’ Ex-CFO Is Fined [WSJ]
The former chief financial officer for New York City schools has been fined $6,500 for using his city email account to line up his next job and manage his personal real-estate investments. An investigation earlier this year found that George Raab, who was responsible for handling the department’s roughly $20 billion operating budget, had started planning his “exit strategy” from the Department of Education less than a year after he started in October 2008.

IRS Backs Off On Penalties Against Billionaire Leon Cooperman [Forbes]
As detailed in a U.S. Tax Court settlement filing, Cooperman still is required to pay nearly $14 million plus interest to cover what the IRS said was a non-tax deductible contribution. But Cooperman, who said he had acted in good faith when he followed bad advice from tax advisers, doesn’t have to pay the $5 million the IRS originally demanded in accuracy-related penalties. His bill now for penalties: a mere $29,191.


South Florida residents in $120M tax fraud bust [SFBJ]
They are accused of filing more than 380 false tax returns for 180 clients from 30 states. They requested more than $120 million in fraudulent tax refunds. Most of the tax returns were filed for the 2008 tax year, and the forms reported personal debt obligations as both income and federal tax withholding. Holding seminars in Florida and Tennessee, the defendants told prospective clients about a “redemption theory” where they could ask the IRS for refunds to cover their outstanding personal debt, according to federal authorities. The clients paid $750 for the preparation of the tax return and agreed to share 10 percent of their tax refund with the defendants.

FASB, IASB Chiefs Agree New Convergence Model is Needed [JofA]
The heads of the U.S. and international accounting boards that have been working to resolve standards differences agree that their current convergence process should be replaced by one that is more manageable and effective. FASB Chair Leslie Seidman said Tuesday at the AICPA National Conference on Current SEC and PCAOB Developments that side-by-side convergence is not the optimal model in the long run. Hans Hoogervorst, chair of the International Accounting Standards Board (IASB), spoke immediately after Seidman at the conference in Washington and echoed her sentiment.

Accounting News Roundup: Morgan Stanley’s CFO Has Some War Stories; Lamar Odom Sues IRS; More on Too Few to Fail | 11.10.10

A Female Wall St. Financial Chief Avoids Pitfalls That Stymied Others [NYT]
Ruth Porat, the CFO at Morgan Stanley, gets a write-up in the Times which doesn’t hesitate to point out all the women CFOs that have failed before her, “In Ms. Porat’s case, she is often reminded about recent Wall Street history. ‘Be careful in everything you do, because we all know how this ended before,’ another stock analyst told her at a cocktail party earlier this year on the 41st floor of Morgan’s Stanley’s headquarters in Midtown Manhattan, according to attendees.

The comment was a not so subtle reference to the last two female chief financial officers on Wall Streehman Brothers and Sallie L. Krawcheck at Citigroup. Ms. Callan resigned from Lehman just months before it filed for bankruptcy and is now under investigation by regulators. Ms. Krawcheck struggled as chief financial officer at Citigroup and was publicly demoted in early 2007.”

But the boys’ club might be able to relax on this one, as Ruthie sounds committed, “In 1992, during the birth of her first son, she was on the phone in the delivery room making client calls.” Oh, and there was this time that she threw her back out finished a presentation on the boardroom table. Legendary!

Ambac Has Stipulation With IRS Over Tax Dispute [Bloomberg]
Ambac Financial Group Inc., the bankrupt holding company for a failed bond insurer, has a stipulation with the Internal Revenue Service over a dispute about whether the agency can seize at least $700 million in tax refunds, an Ambac lawyer said in bankruptcy court today.

Under the stipulation, the IRS has agreed not to take enforcement action against Ambac or its subsidiaries without giving five days’ notice. The agreement will remain in place until Ambac holds a hearing to decide whether it can get a judgment to decide the issue.

Google to Give Staff 10% Raise [WSJ]
Chief Executive Eric Schmidt disclosed the raise in an email to employees, saying the company wants to lift morale. “We want to make sure that you feel rewarded for your hard work,” Mr. Schmidt wrote. “We want to continue to attract the best people to Google.”

The S.E.C., Whistle-Blowers and Sarbanes-Oxley [DealBook]
The S.E.C., led by Mary L. Schapiro, released its proposal last week. Unfortunately for businesses, the S.E.C. must comply with the Congressional directive that puts the interest of attracting tips about corporate wrongdoing ahead of the internal compliance programs that most corporations set up under the Sarbanes-Oxley Act, which passed eight years ago. For businesses, it looks like Congress may be willing to use the new whistle-blower programs to undermine Sarbanes-Oxley.

Lamar Odom Seeks Tax Deduction For NBA Fines and Fitness Fees [Forbes]
Odom is going pro se before a U.S. Tax Court to get back “$12,000 in sports fines and another $178,000 spent getting himself in shape.” His wife, no stranger to tax-related fiascos, must have told him that it was the smart move.

Does the GOP Really Want to Slash Spending in a Weak Economy? [TaxVox]
No doubt the GOP wants to shrink government. And there isn’t much doubt that some voters agree with them. But is this the time? Will voters be quite so enthusiastic once they realize spending cuts mean more than eliminating ever-popular waste, fraud, and abuse? Will they embrace actual reductions to those government services and benefits that they have grown to love? And, most important, will they accept these government spending cuts in the teeth of a still-sluggish economy?


The Big Four: Too Few to Fail [Accounting Onion]
We need at least a fifth firm, but preferably lots more, that are capable of taking on the largest corporations as clients. Surely, the public has learned more than they wanted to know about the concept of moral hazard from the too-big-to-fail banks. And just as surely, the Big Four are too few for financial regulators to let fail. This version of moral hazard is that each of the firms knows the position the financial regulators are in, and they take on more risk as a result.

IRS Announces 2011 VITA Grant Recipients [TaxProf Blog]
Glenn Beck can rest easy, ACORN isn’t on the list.