Ed. note: Happy New Year, everyone! Thank you for spending 2021 with us, believe it or not we’re grateful to each and every one of you for stopping by. See you next year!
Deloitte sued by female former employee over harassment claims [Financial Times] Deloitte has been sued by a former female employee who alleged the Big Four firm failed to protect her from bullying and harassment by one of its male partners and that its investigation into his conduct was designed to ensure he kept his job. Katrina Jones, who joined the consulting firm as a risk and compliance analyst in 2015, said in court documents obtained by the Financial Times that she suffered psychiatric harm as a result of “oppressive, manipulative and abusive” behaviour by Christopher Holliday, a partner in its quality and risk team.
KPMG chair Bina Mehta vows to put auditor’s house in order [The Times] Last month, Bina Mehta was elected as chairwoman until February 2024, three years from when she first stepped in. She says it is time to “face in” to the issues confronting the firm and “learn from them, act on them”. “I’ve been here for 30 years and I don’t think I have felt like this before. It feels difficult. It’s not just about how it makes me feel as a partner but how does it make colleagues feel, because their family and friends ask them questions,” she says.
Audit profession unattractive to new recruits, says PwC boss [Financial Times] The UK boss of PwC said criticism of the audit industry from politicians and regulators was harming the profession and risked making it more difficult to attract new recruits. Retaining qualified auditors also “becomes much harder if there’s a current of external negativity”, Kevin Ellis, UK chair and senior partner at PwC, told the Financial Times.
Another SPAC Headache in Accounting for Business Combinations [Bloomberg Tax] The problem comes down to what seems like a simple question—which party acquires the other in a merger? It requires judgments about who ultimately controls the company that debuts on the stock exchange. And every transaction is different, said Nina Kelleher, director at Eisner Advisory Group LLC. “There’s no cookie-cutter path,” she said.
Stole something? IRS says stolen property and bribes must be reported as income [USA Today] Did you steal a car in 2021? How about taking a bribe? If you did, the IRS says to make sure you report it on your taxes. Those provisions went viral Monday following a tweet alerting taxpayers to those somewhat surprising requirements to note the value of your ill-gotten gains:
Tax szn is around the corner. Remember to report your income from illegal activities and stolen property to the IRS pic.twitter.com/c4S1yMZJLz
— litquidity (@litcapital) December 27, 2021
Auditors expecting to continue working remotely [Accounting Today] An Institute of Internal Auditors poll found that 58% of chief audit executives said in October and November that their teams are doing all or most of their work remotely, while 22% said their teams are utilizing a hybrid approach of roughly equal remote and in-person work.
Consultants share their predictions for 2022 [Consultancy.uk] As a new year brings an end to some long-running issues, many more uncertainties remain, and businesses must still reckon with challenges regarding digitalisation, changing workplace relations and the resurgent pandemic. To help clients prepare for the future, consultants from a range of different specialisms have offered their views on what the key trends for the coming 12 months may be.
Federal Court Permanently Shuts Down Two Miami-Area Tax Return Preparers [Department of Justice] The complaint filed against the defendants alleged that they prepared tax returns that significantly understated their customers’ tax liabilities by claiming deductions for fabricated or inflated charitable deductions, medical expenses and employee business expenses. The complaint further alleged that the defendants significantly understated their customers’ tax liabilities by reporting false or inflated business losses. In addition, the complaint alleged, the defendants often deducted hundreds of dollars in fees from their customers’ refunds, in many cases without disclosing the fee that they charged. According to the complaint, based on IRS estimates from audits of some of the defendants’ customers, the defendants’ fraudulent activities likely cost the United States millions of dollars in lost tax revenue.
Accounting Services Global Market Report 2022 [Yahoo! Finance] The global accounting services market is expected to grow from $1175.88 billion in 2021 to $1324.77 billion in 2022 at a compound annual growth rate (CAGR) of 12.7%. The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $2019.02 billion in 2026 at a CAGR of 11.1%.
SEC and PCAOB Prepare to Implement the Holding Foreign Companies Accountable Act [JD Supra] The U.S. Securities and Exchange Commission (SEC) has adopted final amendments that, in conjunction with final rules adopted by the Public Company Accounting Oversight Board (PCAOB) earlier this year and the recent determination by the PCAOB that it is unable to inspect or investigate completely any registered public accounting firm in China and Hong Kong, will set the stage for the SEC to designate companies as “Commission-Identified Issuers” based on annual reports filed for fiscal years beginning after December 18, 2020.
Be a skeletal accountant in this spreadsheet game [PC Gamer] Alexander King, a professor of game design at NYU’s Game Center, gave his students an assignment: Make a prototype game that exists within a spreadsheet. One of these projects, by design student Jordan Grayson, is Dividends & Decay: Accounting for the Damned, and it’s somewhere between a joke about my favorite kind of game and an actual example of my favorite kind of game. Described thusly: “Play as an undead accountant managing the evil spreadsheets of a necromancer!”