November 29, 2021

Friday Footnotes: Deloitte Deals With Lookers; PwC Gets Fired; Auditors and Climate Change | 3.12.21

UK watchdog investigating Deloitte audits of Lookers [Reuters] Britain’s accounting watchdog said on Friday it had opened an investigation into audits conducted by Deloitte of car dealership operator Lookers. The investigation will look at financial statements for the years ended Dec. 31 2017 and 2018, the Financial Reporting Council said in a statement.

Babcock parts ways with long-term auditor PwC [Financial Times] Babcock International, the UK’s second biggest defence contractor, is parting ways with PwC, its longstanding auditor, as new chief executive David Lockwood puts his stamp on the group. The company has appointed Deloitte as its new external auditor, subject to shareholder approval at this year’s annual meeting. PwC has advised Babcock since 2002.

A Critical Audit Matter: It’s Time For Auditors To Come Clean On Climate Change [Forbes] To the extent a company’s financial statements do not take into account the material climate risks posed to their assets and ability to operate as an ongoing concern, they risk presenting a misleading view. Investors should use their votes on corporate board members and the company’s auditor to signal demand for reliable financial reports that make climate impacts clear.

The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021 [Tax Foundation] Over the course of many years, the IRS has been tasked with an ever-growing list of administrative duties that go well beyond simple revenue collection—everything from poverty alleviation to education, housing, and health-care benefits. The American Rescue Plan, in addition to other pandemic response measures, would now require the IRS to administer additional benefits on a recurring monthly basis, much as a traditional spending agency, all while processing upwards of 160 million tax returns.

Audit client turnover 2020: EY ends Deloitte’s streak; PwC, KPMG lag behind [Compliance Week] In Audit Analytics’ 2020 summary of auditor changes as reported in Securities and Exchange Commission filings, EY (37) edged out Deloitte (26) to rank first among all audit firms in total new SEC engagements in 2020. EY and Deloitte also ranked first and second in net audit fees won at $57.1 million and $42.7 million, respectively.

FASB Appoints New Members to Emerging Issues Task Force [Monitor Daily] The Financial Accounting Standards Board appointed Dan Palomaki and Jay Seliber as the newest members of its emerging issues task force (EITF). Palomaki is a managing director and institutional clients group controller at Citigroup. Seliber is a partner at PwC.

Wanted: More systems and analytics training for accounting students [Journal of Accountancy] College and university accounting departments should update their curricula to meet the demands of practice, an AICPA-National Association of State Boards of Accountancy (NASBA) gap analysis survey found.

A Love Letter to My Accountant [New York Times Opinion] My accountant taught me that even in a life of pursuing art, where uncertainty is built in, some care can be taken to make plans, to plan for success, not just wish to succeed, and in planning offer myself some ballast against nothing at all going according to plan.

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