Remember tomorrow is April Fool’s. We aren’t planning anything, every day is a joke for us. For nostalgia’s sake, here’s a look back on the time we wrote only about bitcoin and put a fake bitcoin paywall on the site for a couple hours. People did not enjoy that.
Big 4
EY Fails to Reach Deal on Split [Wall Street Journal]
The unexpected revolt that has upended the planned breakup of accounting firm Ernst & Young is being driven by two longtime U.S. auditors who believe their part of the firm could end up weakened by a deal. John King and Frank Mahoney, senior U.S. EY executives, have emerged as key opponents to the firm’s plan for a worldwide split of its auditing and consulting arms, according to people familiar with the matter. After a year of planning and tens of millions of dollars in costs, the split of the 390,000-person accounting firm was put on hold earlier this month. A meeting in Silicon Valley this week failed to reach a deal. Carmine Di Sibio, EY’s global leader, and Julie Boland, head of the firm’s U.S. arm, said in a joint statement Friday they were “continuing to work toward a transaction.” The deal is “very complicated, and we agree it is critical that we get the key elements right,” the statement added.
Pace University Hosts First In-person Job Fair Since the Start of the Pandemic [Pace University]
The fair was open to all majors and was sponsored by PricewaterhouseCoopers (PwC), which is among the Big Four accounting firms, offering clients various professional business services, including accounting, auditing, human resources consulting, and strategy management.
Big Four firms see spike in client requests for AI integration [The Economic Times]
The Big Four firms, Deloitte, EY, KPMG and PwC, are receiving increasing client requests for AI integration in projects after the success of ChatGPT, while also actively exploring the use of AI technology within their own service offerings. “Clients are really excited about generative AI and what it can do for their businesses. We are seeing interest in several large customer service projects that we are currently involved in. We have already begun embedding some bits of generative AI into these projects, which is truly remarkable,” said MaheshMakhija, leader, digital and emerging technologies, EYIndia.
KPMG JOINS FORCES WITH STEPHEN CURRY AS TITLE SPONSOR FOR UNDERRATED GOLF TOUR [PR Newswire]
WHY ARE YOU YELLING
Today, Stephen Curry’s UNDERRATED Golf program announced KPMG LLP, the U.S. audit, tax and advisory firm, as title sponsor in an effort to advance equity, access and opportunity for underrepresented and underrated youth in the sport of golf. KPMG will bring a multitude of new offerings to enhance the tour, including a mentoring and leadership development program for the participating youth. “KPMG’s sponsorship of UNDERRATED Golf further exemplifies our focus on advancing diversity, equity and inclusion within our firm and the broader marketplace,” said KPMG U.S. Chair and CEO Paul Knopp. “We look forward to working with Stephen Curry, Mariah Stackhouse and the UNDERRATED Golf team to positively impact the diversity pipeline in golf and empower young athletes as leaders both on and off the course through meaningful leadership development and mentorship opportunities.”
Teacher transitions from the classroom to a major accounting firm — and reminds others ‘you haven’t just taught’ [Insider]
Sanders was still passionate about his job and the subject matter. But when he took a hard look at his finances, he realized over two-thirds of his take-home pay was going toward his rent — and it made him wonder what the next five years of his life could look like. “If I stayed in the industry, not just that one school, or one system, but, if I stayed doing this, even if I hopped around, what realistically could I expect,” Sanders, 27, said in an interview with Insider. He’d entered the teaching profession with no illusions about money. He figured it would be an opportunity to work and support himself, while staying involved in his favorite subject, but when it became harder to make ends meet, it pushed him to find other options. Sanders, who is now a CEO Action for Racial Equity Fellow at PricewaterhouseCoopers, a Big Four accounting firm, talked to Insider about his teaching experience and how he transitioned into his current role.
Brazil’s Americanas faces extended bankruptcy battle with creditors -sources [Reuters]
Only creditors that are not suing Americanas will be able to participate in those proposals, according to the plan. For creditors who decide to sue the retailer, the plan proposes a discount of 80% to be paid in March 2043. The company must win approval for the plan from the majority of its creditors in time for a general meeting expected by this semester. Aurelio Valporto, who heads the Brazilian investor group Abradin and has asked the country’s securities watchdog CVM to investigate the company, its executives and accounting firm PwC, said the treatment given to “class 3” creditors was unreasonable and “disrespectful.” “All the confidence the banks showed by providing unsecured loans to Americanas was repaid with a failure in the billions of dollars,” he said. “It’s clear that this plan won’t be approved.”
Talent
Falling short: Accounting firms feel labor squeeze [Virginia Business]
The profession’s numbers are being crunched from both ends, both nationwide and in Virginia. “It’s a war,” declares Fran Randall, a partner and Richmond market leader for Forvis, one of the nation’s top 10 accounting firms. “Everyone is fighting for the same talent.” Stephanie Peters, CEO and president of the Virginia Society of CPAs (VSCPA), seconds that assessment. The state has about 28,000 licensed CPAs, she says, but “even to maintain [those numbers] will be an effort.”
KPMG adds eight professionals to tax business [Consulting.us]
KPMG US has announced the hiring of eight partners, principals, and managing directors across its tax business line. One each from Deloitte, EY, and PwC, and one — Christopher Bajec (partner, state and local tax, Fort Worth)– rejoins the company from The Energy & Minerals Group, where he was chief tax officer. He previously held various tax roles at KPMG.
Accountants’ Salaries Are Rising, but It May Not Add Up to More Accountants [Wall Street Journal]
The salaries offered to U.S. accountants and auditors last year climbed at their quickest pace in recent years, but industry observers say increasing pay alone may not be enough to remedy a national shortage of accountants. “For what we do, the amount of work we put into it and for as critical as we are to the overall health of the financial markets, it’s not paid enough,” said Dane Dowell, an accounting and auditing consultant. Pay across five seniority levels, from entry level through vice presidents, is also up. These average salaries climbed by 12% to nearly $87,000 in 2022 and by 9% to nearly $90,000 this year through February, compared with prior periods, Revelio Labs data showed.
Audit
U.S. Audit Watchdog Proposes Move to Get Inspections Started Faster [Wall Street Journal]
The Public Company Accounting Oversight Board proposed cutting by more than half the amount of time auditors have to assemble final audit documentation, which might allow the audit watchdog to start its inspection process up to a month earlier and provide key information to investors sooner. The U.S. audit regulator has been working to update more than 30 standards that have gone largely unchanged since they were adopted on an interim basis roughly 20 years ago from the American Institute of Certified Public Accountants. With the proposal released Tuesday, the PCAOB suggested consolidating and modernizing four interim standards into one standard on auditors’ core responsibilities, including areas such as professional skepticism, independence, competence and professional judgment. As part of that update, auditors would have up to 14 days to assemble their final set of audit documentation, as opposed to the 45 days they are now granted. These documents usually help show whether the audit work complied with PCAOB standards.
Audit Regulatory Board Mum on Bank Failures as Critics Question Clean Audit Opinion for Silicon Valley Bank [Thomson Reuters]
For now, the Public Company Accounting Oversight Board (PCAOB) will not publicly address recent bank collapses, triggered by the abrupt, stunning failure of Silicon Valley Bank (SVB) three weeks ago. “I understand recent bank failures may be top of mind for many of you,” PCAOB Chair Erica Williams said at a meeting of the Standards and Emerging Issues Advisory Group on March 30, 2023. “The PCAOB is acutely aware of concerns from investors, and I know there are outstanding questions that must be answered,” Williams continued. “But today’s meeting is not the forum for providing those answers, and it’s important we avoid speculation.”
Get Ready for the Future of Auditing [The CPA Journal]
The increasing use of technology is changing how businesses operate, which methodology and technology auditors use, and what career paths they follow. But the future of audit is not only digitization and automation but also the increased interest of stakeholders—employees, investors, and customers—in an organization’s sustainability positioning, thinking, and actions. The demand for reporting to better understand a company’s performance and related risks is being coupled to technology to accelerate change in the audit profession.
Three key areas of transformation will be critical for the profession:
- The scope of what auditors are analyzing is broadening beyond financial information to include environmental, social, and governance (ESG) topics, as well as advanced and automated technologies.
- Technology and automation are increasingly being used to enable the audit.
- Auditors will need next-generation skills to use these new technologies and audit these new areas.
Tax
New Corporate Minimum Tax Could Ensnare Some Firms Over One-Time Moves [Wall Street Journal]
A new corporate minimum tax is stoking concern among some companies that one-time activities, such as the sale of a business unit, will push them over the threshold for the levy even though the companies wouldn’t otherwise qualify. Some business leaders and companies, such as CenterPoint Energy Inc. and American Water Works Co., are raising the particular problem of so-called extraordinary items in which business segments were sold off and those transactions pushed average profits over the $1 billion mark even though the ongoing businesses aren’t above the threshold.
Up until now, we’ve heard more about accounting professors losing their clothes (
