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Friday Footnotes: Eff You, Pay Me; KPMG is Reading Your Thoughts; EY Adds Meme Coins to Blockchain Tech | 2.24.23

US currency in little shopping carts


The new math in recruiting at accounting firms [Puget Sound Business Journal]
You have to scroll way too far down in this article to see a mention of salary. Shocking.
When they’re not striving for the pinnacle of their sports, internationally famous mountaineer Jimmy Chin and teenage tennis phenom Coco Gauff are promoting accounting firm Baker Tilly as brand ambassadors. The press releases drop phrases like “new horizons” and “blazing new trails” to maximize the star power in an industry typically noted for its stodginess. It’s part of a larger trend of accounting firms trying to find young talent as the industry wrestles with staffing shortages. There is an added challenge in the Seattle area, where firms must also compete with big tech companies like Amazon and Microsoft. Local accounting firms pitch the breadth of experience young accountants gain working for them. “You’re getting exposed to a lot of variety and a lot of industries,” said Kelly Nelson, Seattle managing partner for Baker Tilly. “We have access to some of the greatest minds in the Seattle landscape through who our clients are.”

9 in 10 Accounting and Audit Firms Struggle to Find Talent [CPA Practice Advisory]
Sensing a pattern here…
What is the fastest-growing challenge facing accounting firms and internal audit departments today? More than 90% point to hiring and retaining skilled accountants and auditors. Some are even turning away business due to a shortage of staff. That’s the finding of two newly released reports by leading software provider Caseware International, which surveyed more than 6,000 accountants and auditors globally. According to the surveys, to tackle this challenge and boost client collaboration, accounting and auditing organizations are ramping up the adoption of advanced technologies such as cloud services, data analytics and business intelligence.

How CPA Firms Are Engaging the Next Tax and Accounting Pros [Bloomberg Tax]
And here’s another one with some crap about talent strategies that don’t include PAYING PEOPLE MORE MONEY smh.
According to the CEO Purpose Report 2022, completed by Brandpie Consulting, helping workers integrate their personal purpose into the workplace is critical to attracting and retaining ideal talent. When employees feel a sense of purpose, they’re more motivated and committed to their organization. This leads to increased productivity, higher job satisfaction, and lower turnover rates. If executed well and with noble intentions, integrating purpose into the accounting industry’s culture and strategy can be a solution that addresses its talent challenges.

McKinsey will reportedly cut about 2,000 jobs amid restructuring [MarketWatch]
McKinsey & Co., the management consulting firm known for often recommending layoffs to companies in distress, plans to slash about 2,000 jobs as part of a restructuring plan of its own, according to reports Tuesday. Bloomberg News reported that McKinsey’s job cuts will focus on its non-client-facing support staff, and will be among the company’s largest round of layoffs ever. The Wall Street Journal later Tuesday matched Bloomberg’s reporting. Bloomberg reported the plan to streamline operations is expected to be finalized in the coming weeks, and the final number of job losses may change.

Big 4

Verizon Business and KPMG collaborate to bring private 5G to KPMG Lakehouse [Verizon]
Verizon Business and KPMG LLP have collaborated as part of their alliance relationship to deliver 5G solutions designed to help transform the healthcare and life sciences sectors. KPMG has now deployed Verizon’s Private 5G wireless network into its Ignition Center inside KPMG Lakehouse to further that collaboration. Building on top of this next-generation network, KPMG is creating a Healthcare Lab experience where clients can interact and experiment with the latest in healthcare technologies while helping to define their own future healthcare vision powered by Verizon 5G.

Resiliency Lies in More Adaptive, Innovative Workflows According to ServiceNow/Deloitte Clients in 2023 Trends Report [PR Newswire]
Smarter workflows can help businesses not only survive — but thrive in a changing world, according to Deloitte and ServiceNow’s “2023 Workflow Automation Trends” report. In the face of volatile economic, political, social and environmental realities, a business’s ability to adapt is key to success and resiliency. The report outlines the top five trends customers are currently prioritizing amid industry headwinds and provides a guide for organizations looking to leverage these trends to continuously deliver innovation and remain competitive.

Spotlight on PwC’s Washington National Tax Co-Leader Rohit Kumar [Bloomberg Tax]
Kumar advises clients on all aspects of domestic policy, including tax policy, so they can develop legislative strategies from both a technical and political perspective. Before joining PwC, he was the domestic policy director and deputy chief of staff for Senate Republican Leader Mitch McConnell and served 11 consecutive years in the Office of the Republican Leader for three different senators. When he’s not working, you might find Kumar watching “The Amazing Race” with his daughter, snacking on Reese’s peanut butter cups, or dreaming about being a scuba diving instructor.

Ernst & Young adds Dogecoin to its new blockchain analyzer feature [Finbold]
The fourth generation of Ernst & Young’s (EY) Blockchain Analyzer: Reconciler has been released into production. Reconciler with new features for blockchain and cryptocurrency audit services now supports Dogecoin (DOGE), in addition to Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), Ethereum (ETH) and Ethereum Classic (ETC) blockchains, according to a press release published on February 20. Accessible through the software as a service (SaaS) platform, this web-based analytics solution is accessible to EY Audit teams all around the world.

Big 4 Firm Disputes Foreign Tax Credit Reattribution Asset Rule [Thomson Reuters]
Responding to an IRS request for public input on pending foreign tax credit (FTC) revisions, practitioners from KPMG weighed in on issues arising from an aspect of how foreign taxes are allocated and apportioned.

Firm Watch

Armanino Honored with ClearlyRated’s Best of Accounting® Award for Outstanding Client Satisfaction [Business Wire]
Armanino LLP today announced that it has been awarded ClearlyRated’s Best of Accounting award for the eighth consecutive year, earning its fourth Diamond Award, a special designation for firms that make the prestigious list for at least five consecutive years. This award, which fewer than 1% of all accounting firms in the U.S. and Canada achieve, spotlights Armanino’s commitment to providing clients with exceptional service. “We mean it when we say we take genuine care of our clients, and receiving our fourth Diamond Award from ClearlyRated is a reflection of our ongoing commitment and success,” said Matt Armanino, CEO and managing partner of Armanino LLP.

2023 Best Firms to Work For applications being accepted [Accounting Today]
Accounting Today and Best Companies Group are currently accepting applicants for the 2023 Best Accounting Firms to Work For list. The list, which ranks the best workplaces in the accounting profession across the country and is now in its 16th year, will be released later in the year, with the annual report appearing in the September issue of Accounting Today.


PCAOB Enforcement Activity Up Sharply in 2022 [Cornerstone Research]
The Public Company Accounting Oversight Board (PCAOB) increased its enforcement activity sharply in 2022, disclosing the most enforcement actions in five years, and handing down the highest monetary penalties since its establishment in 2002, according to a new report released today by Cornerstone Research.

The report, PCAOB Enforcement Activity—2022 Year in Review, found that in 2022, the PCAOB disclosed 29 disciplinary actions involving the performance of an audit and/or a firm’s system of quality control, up 61% from 2021 and the most since 2017. Nearly half of those actions were disclosed in the fourth quarter. Monetary penalties in 2022 totaled close to $10.5 million, almost ten times more than in the previous year, with $8.8 million tied to Q4 actions.

“The sharp increase in the number of enforcement actions was primarily driven by 15 actions involving non-U.S. respondents,” said Elaine Harwood, a report coauthor, senior vice president, and head of the accounting practice at Cornerstone Research. “The non-U.S. actions involved 19 auditors and audit firms in seven countries outside the U.S.”

For the first time in PCAOB history, enforcement activity in 2022 involved more non-U.S. respondents than U.S. respondents. The percentage of actions involving non-U.S. respondents—52%—was double the 2017–2021 average. Since 2017, the PCAOB has brought actions involving respondents in 17 countries outside the United States.

“The record penalties were consistent with statements made by Chair Erica Williams that the PCAOB would not be limited to the levels of penalties in past years,” said Alison Forman, a Cornerstone Research principal and report coauthor. “Penalties totaling $7.9 million were imposed on the 10 actions disclosed in December alone.”

Investors Press Regulator to work on Audit Quality Indicators and Quality Control Rules at the Same Time [Thomson Reuters]
The Public Company Accounting Oversight Board’s (PCAOB) Investor Advisory Group (IAG) once again pressed the board to complete a slow-moving rulemaking project that would provide information that investors could use to gauge the quality of a public company financial statement audit: audit quality indicators (AQIs). This time, members of the IAG are requesting the board to work on AQIs in response to a proposal the board issued in November 2022 that would revise the PCAOB’s quality control standards that audit firms must follow. The advisory panel wants the PCAOB to work on both AQIs and quality control standards at the same time, and it did not mince words in urging the board to do so. “The process of establishing a quality control standard naturally fits simultaneously with the establishment of audit quality indicators,” IAG wrote. “How else can consistent audit quality be maintained if it is not measured and quantified? The proposal fails to establish even a few audit quality indicators.”


UNI accounting professor part of only team awarded NASBA research grant [Waverly Newspapers]
The University of Northern Iowa’s Gabe Dickey, an assistant professor of accounting, and his co-authors were the only recipients of the 2022 Accounting Education Research Grant from the National Association of State Boards of Accounting (NASBA) for their work researching metacognition and online adaptive learning technology. The grant will propel Dickey’s research into its next phase and allow for the hire of a graduate assistant to record and maintain data. Dickey and his team will also present at the NASBA Annual Meeting next week, leading to more exposure for the study and the UNI College of Business. “I’m very excited,” Dickey said. “We all have an interest in seeing the accounting profession continue to thrive. We’re hoping to give more insight into how to recruit and retain students in the profession and develop them as well.”