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Big 4
KPMG accessed rival audit bids, contradicting firm’s defence [Financial Review]
A KPMG partner accessed confidential Lendlease board papers evaluating audit pitches by rivals EY and PwC, contradicting claims that the data was not sensitive and did not help it win any new business. The content of the documents may have given KPMG insight into its competitors’ strengths and weaknesses, as well as the mindset of the Lendlease board.
Deloitte UK to Shed Up To 175 Auditors in Voluntary Job Cuts [Bloomberg Tax]
Deloitte UK is planning voluntary job cuts across its audit business as the firm has grappled with low levels of attrition and stagnant revenue. The firm is offering voluntary redundancy packages to a number of staffers in a response to low levels of staff attrition in its audit practice, a spokesperson for Deloitte said in an emailed statement.
PwC UK boss Marco Amitrano wins bigger role in international shake-up [Financial Times]
PwC’s UK boss Marco Amitrano has won a larger role inside the Big Four consultancy’s global network, after a clearout of international executives designed to centralise decision-making across the 364,000-person firm. The changes, due to go into effect on July 1, include axing the global role historically held by the head of PwC’s German member firm and replacing some international executives with partners from the UK and the US businesses.
AI
Private equity bosses warn of AI threat to bets on law and accountancy [Financial Times]
Law and accountancy are among the businesses most vulnerable to AI disruption, top private capital executives have warned, adding to the worries of buyout groups that have invested heavily in professional services. “Apologies to the lawyers, accountants, consultants in the room,” Apollo Global Management executive Scott Kleinman told SuperReturn delegates. “You’re going to see a lot of pressure.”
Hesitancy over AI still affecting accounting firms [CFO Brew]
Said HubSync CEO John McGowan to CFO Brew when asked “With private equity, is it more of a push or a pull toward AI? Do firms want to partner with PE so they can invest in AI, or are PE backers investing in AI for the firms they’ve bought into?”:
I think it’s mutual…There’s definitely a push coming from PE, but I do think the reasons why, at least the firms we’ve talked to, are doing this is, number one, obviously the capital to grow and scale…And there’s also been this desire for a long time, especially at the upper end of the market, [to] start to compete against the Big Four…
AI is eroding trust. Accounting and finance professionals can rebuild it [CFO.com]
Writes Mike DePrisco, president and CEO at The Institute of Management Accountants:
AI and advanced technologies are a growing concern for accounting and finance professionals — and are changing the role they must play in their organizations.
SMBs are acting on financial advice from AI chatbots — before talking to their accountant, as experts warn ‘that pressure is only going to grow’ [TechRadar]
Nearly three-quarters (70%) of UK SMEs say they often or always act on AI-generated financial, tax or business advice before they consult their accountant, according to a new report of 500 UK SMEs commissioned by Ravical. Conversely, only 5% rarely or never do this, highlighting just how widespread AI adoption is when it comes to seeking advice. Answering tax questions, responding to financial planning queries, serving up business strategies and triaging day-to-day accounting issues are among the most common use cases, with accountants instead being used to validate AI-generated advice as a secondary layer.
EY Hanyoung and UBC Embark on Joint Development of Humanoid Robots [The Asia Business Daily]
Global accounting and consulting firm EY Hanyoung has embarked on the development of humanoid robots in collaboration with an artificial intelligence transformation (AX) company. On June 16, EY Hanyoung announced that it has signed a memorandum of understanding (MOU) with UBC, a company specializing in digital twin-based manufacturing AX solutions, to jointly develop autonomous manufacturing technology for humanoid robots using physical artificial intelligence (AI) based on NVIDIA Omniverse.
Careers
Entry-level work didn’t disappear, PwC finds with ‘seniorization.’ It just morphed into something young workers can’t get [Fortune]
In the most AI-exposed occupations, 52% of new skills appearing in entry-level job postings were skills traditionally associated with experienced workers. In the least AI-exposed occupations, that figure was 7%. PwC calls this “seniorization,” and the numbers around it are stark. Job openings for these redrawn entry-level roles—the ones that now ask a 22-year-old to demonstrate capabilities a 35-year-old would have—have grown 35% since 2019. Traditional entry-level openings, in the same period, shrank 10%.
Tax
Advisory panel urges sustained IRS funding, expanded AI, tax simplification [Journal of Accountancy]
The IRS’s outside technology advisory panel called on Congress to provide stable, multiyear funding; expand the use of artificial intelligence; and simplify tax administration. It also warned that resource constraints and complexity risk undermining recent modernization gains. In its 2026 Annual Report to Congress issued Wednesday, the Electronic Tax Administration Advisory Committee outlined a broad set of recommendations aimed at modernizing the tax system, improving compliance, and strengthening taxpayer service. Central to the report is a warning that sustained funding is critical to maintaining progress on technology upgrades and meeting growing demands on the agency.
Coca-Cola, IRS Face Off in Tax Appeal With Huge Stakes for Both [Bloomberg Tax]
A lot is on the line in Coca-Cola Co.’s big court battle against the IRS. For the company: as much as $20 billion. For the IRS: how much leeway it will have in pursuing multinational companies. The beverage giant and the government will square off in oral arguments next week before the US Court of Appeals for the Eleventh Circuit in Miami. Coca-Cola is appealing US Tax Court rulings that side with the IRS over the company’s transfer pricing—how it priced transactions with its own foreign affiliates. “We’re talking about truly massive dollars, almost unprecedented in the transfer pricing context,” Chad Martin, a principal at Eide Bailly, said. The case is “the Super Bowl of transfer pricing controversy.”
IRS live chat apps have room for improvement, watchdog finds [FedScoop]
The Treasury Inspector General for Tax Administration found that the IRS hasn’t analyzed its chat apps, nor does it have reliable metrics around their use. The agency piloted live chat functionality in 2017 and launched automated chatbots in 2021. In conducting its audit, TIGTA reviewed statistical reports that didn’t add up. One showed a live assistor handling up to 603 live chats simultaneously — a stat the IRS admitted was incorrect due to an internal cap for the number of concurrent chats set at three.
Tax Controversy Lawyer Is in Line for Top Counsel Job at IRS [Bloomberg Law]
Private-sector lawyer Jim Gadwood is being vetted to become IRS Chief Counsel, according to a person familiar with the process. If confirmed, he would be the fourth person in the role since President Donald Trump took office. His nomination could be sent to the Senate next week, the person said. Senate Finance Committee Chair Mike Crapo (R-Idaho) said in an interview Thursday he was aware of Gadwood’s nomination, but did not know him personally.
Audit
CT secretary of the state’s office failed to withhold employee’s Social Security taxes, audit finds [CT Insider]
The Office of the Secretary of the State failed to withhold more than $12,000 in Social Security and Medicare taxes for one employee, a new state audit found. “It appears a clerical error led to this employee being placed in a FICA-exempt status upon hire,” auditors wrote in the report. The Secretary of the State’s Office was also criticized for not keeping track of inventory, improperly handling purchase card transactions and not fully documenting sales of various publications.
Audit finds VA automation glitch ruined 98% of veteran survivors’ benefits claims [WHQR]
“VA OIG, the Office of Inspector General, included a review of 8,100 cases of these automated DIC decisions and found that in 8,000 of them there were errors. So, this is essentially every case,” said Claire Hillan Sosa, a Senior Disability Attorney with Deuterman Law Group, which has offices in Greenville. She said the mishandled DIC cases contained legal or procedural errors, causing a wave of incorrect notification letters, missing evidence summaries, and millions in improper financial distributions. “I think technically some of them are AI, some of them are not,” Hillan Sosa explained.
Here’s how much financial aid ‘ghost students’ stole from Utah’s public colleges and universities, auditors found [The Salt Lake Tribune]
So-called “ghost students” stole about $500,000 in financial aid from Utah’s public colleges and universities over the last academic year, according to a state audit released Tuesday. That’s only counting the confirmed losses. Schools reported another roughly $334,000 in “potential” losses that are still being assessed, plus more that might remain “undetected,” landing the total somewhere near a potential $1 million that’s irrecoverable.
Firm tapped for audit of Mecklenburg school system finances [Mecklenburg Sun (Virginia)]
The Mecklenburg County School Board has tapped a Raleigh-based accounting firm to conduct a forensic audit of the school division’s books in the wake of a financial scandal that led to the ouster of two top administrators. At its monthly meeting Monday in Boydton, trustees approved a contract with Keiter CPAs of Raleigh, N.C. to conduct the deep-dive review of the division’s finances. The board’s decision comes on the heels of allegations that former assistant superintendent Christy Peffer and former finance director Amber Barbour used school funds to make unauthorized personal purchases.
Florida CFO flags ‘troubling irregularities’ involving Kissimmee mayor, refers case to FDLE [Spectrum News 13]
Florida’s Chief Financial Officer Blaise Ingoglia and his office shared that their office has raised concerns involving Kissimmee Mayor Jackie Espinosa and a grant program. “The CFO’s office regularly conducts various audits. Recently, the auditing team found some troubling irregularities concerning the Kissimmee mayor and a grant program that we’ve now referred to the Florida Department of Law Enforcement’s Public Corruption Unit and the appropriate state and local ethics authorities,” Communications Director Sydney Booker from the Office of Chief Financial Officer Ingoglia said. “Our office will work with them to ensure they receive all necessary support during an investigation.”
