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October 2, 2023

Friday Footnotes: EY Buffs PE Practice; A Thirst for Integrity; “Everyone Feels KPMG Is 4th” | 6.10.22

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SEC Acting Chief Accountant Cautions Against “Checklist Compliance” Approach to Auditor Independence [JD Supra] SEC Acting Chief Accountant Paul Munter re-emphasized the SEC’s focus on auditor independence in his June 8 statement on “The Critical Importance of the General Standard of Auditor Independence and an Ethical Culture for the Accounting Profession.” This latest statement follows a pair of statements issued in October 2021 and December 2021, both of which similarly highlighted auditor independence. This time, however, the statement goes further in describing both the application of the general independence standard and common recurring issues from auditor independence consultations with the Office of the Chief Accountant (“OCA”).

Reality TV stars convicted of fraud and tax evasion [Department of Justice] Following a three-week trial, a federal jury found Todd and Julie Chrisley guilty of conspiring to defraud community banks out of more than $30 million of fraudulent loans. The jury also convicted Todd and Julie Chrisley and their accountant, Peter Tarantino, of a number of tax crimes, including conspiring to defraud the IRS. The Chrisleys were found guilty of tax evasion, and Peter Tarantino was found guilty of filing two false corporate tax returns on behalf of the Chrisleys’ company. The jury also found Julie Chrisley guilty of wire fraud and obstruction of justice. You’ll recall the Chrisleys’ accountant tried to weasel out of any blame by saying he failed the CPA exam a bunch of times so obviously he shouldn’t be advising clients.

Certain tax services do not violate US ban on provision of accounting services in relation to Russia sanctions [Journal of Accountancy] A U.S. accounting firm is not prohibited by a White House executive order regarding U.S. sanctions against Russia from providing tax advisory and preparation services to the U.S. subsidiary of a Russian company in certain scenarios, according to guidance issued Thursday by Treasury’s Office of Foreign Assets Control (OFAC).

Innovation and integrity are key to accounting’s future [Accounting Today] “What we bring to the table as a profession is this incredible reputation of trust, in what we do, how we give advice, our willingness to do the right thing, to volunteer and make a difference in the communities where we live, and so much more,” president and CEO Barry Melancon told attendees of a keynote panel at the institute’s Engage 2022 conference, held this week in Las Vegas. “We could not be better positioned as a profession — the thirst for that integrity has never been greater in any part of the world. It’s one of those hallmarks that I hope you talk about with clients and employees. We have to leave that to the next generation of accountants.”

Accounting firm CEO challenges outdated talent paradigms to declare an organizational purpose [Thomson Reuters] Spoiler: it’s pretty much exactly the same just with more buzzwords: The professional services industry long has been known for the billable hour, long working hours, and the dedicated strive toward promotion to partnership that is the mark of highly-sought-after success. The acceptance of these industry structures for decades unfortunately has perpetuated survival of the fittest mentality, and most employers and employees assumed these were necessary work practices, done in the name of client service. Alan Whitman, CEO of Baker Tilly, is taking on these long-standing paradigms – what he calls breaking the mold – and declaring the firm’s purpose to “unleash and amplify talent.” “With everything else staying the same, our mission and our vision — which are, respectively, to enhance and protect our clients’ value and create the advisory CPA firm of the future, today — were all part of our strategy before the pandemic,” Whitman explains. “When during the pandemic we learned so much about ourselves, how we work together, and what people wanted, it clarified our organizational purpose centered around talent.”

Why was this posted to r/accounting?

Deloitte Spots A Digital Transformation Silent Killer — Toxic CFO-CIO Tension [Forbes] Deloitte’s CFO Signals quarterly report details finance executives’ perspectives on economic conditions, business risk and performance prospects. Tucked in the most recent edition is a special “managing the IT function” feature which outlines senior finance leaders’ views on tech spending, business value and performance.

EY to invest US$1b to expand private equity offering and appoints Bridget Walsh as EY Global Private Equity Leader [EY] “PE services are a key strategic priority for the EY organization, and this investment will help to enhance client services through recruitment and training of high-quality talent. Bridget is highly respected, both internally and in the wider global PE community, and I am thrilled that she will be leading this initiative. She has a strong track record working with some of the largest PE clients on significant global deals and brings exceptional operational knowledge and experience in leading and managing industry teams across the globe,” says Andy Baldwin, EY Global Managing Partner – Client Service.

Big Four pay rises: £1k at EY, £2-4k at KPMG [eFinancialCareers] LOL: By nature of being lumped into the term “Big Four,” you can’t talk about EY without comparing them to Deloitte, KPMG and PWC. “Everyone feels like KPMG is fourth,” the Audit Associate told us, ranking EY third, PWC second and Deloitte first.

UK accounting watchdog fines PwC over Galliford Try, Kier audit failures [Reuters] The Financial Reporting Council has fined accounting firm PwC around 5 million pounds ($6.22 million) as part of a package of sanctions following an investigation into audit failures at construction firms Kier and Galliford Try. The FRC, Britain’s accounting watchdog, said PwC and audit partner Jonathan Hook had failed in a number of relevant requirements, including identifying and correcting errors in Kier’s income and cash flow statements relating to the presentation of gains on corporate sales completed in 2017.

SEC Tackles New Behind-the-Scenes Crypto Accounting Questions [Bloomberg Tax] US Securities and Exchange Commission accountants continue to tackle behind-the-scenes questions about how companies account for cryptocurrencies, and not just about recently-issued guidance on how companies report obligations to safeguard customer crypto, a senior SEC staff accountant said Thursday.

IRS increases mileage rate for remainder of 2022 [IRS] For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13PDF, issued today.

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