String of Firms That Imploded Have Something in Common: Ernst & Young Audited Them [Wall Street Journal] This year, $2 billion is missing at a German fintech company, $300 million of sales has been found to be fabricated at a Chinese coffee chain and $5 billion in undisclosed debt has been uncovered at two related companies listed in the U.K. Together, the incidents cost shareholders of the companies roughly $30 billion. All had been audited by Ernst & Young. Last year, EY also audited office-space company WeWork, which nearly collapsed after fumbling a planned initial public offering.
AICPA Foundation Awards 50 CPA Exam Scholarships [CPA Practice Advisor] The foundation’s CPA Exam Scholarship provides $1,500 to AICPA Student Affiliate members or AICPA CPA Exam Candidate Affiliate members in the U.S. to reimburse fees for taking the CPA Exam as well as exam preparatory courses and materials. “We are pleased to support these young accountants on their path to becoming CPAs,” said Ernie Almonte, AICPA Foundation president. “This scholarship is an investment in the profession, and we look forward to seeing these individuals excel in their careers.”
Wall Street Executives Urge Another Round of Federal Stimulus [Bloomberg Tax] Goldman President John Waldron applauded the federal government’s rapid financial response in the early months of the coronavirus pandemic, but said more needs to be done. The absence of additional stimulus could hamper the comeback, particularly in the U.S., he said during the Institute of International Finance annual membership meeting, held virtually this year.
How COVID-19 Is Accelerating Change in CPA Firms [The CPA Journal] Another thing I have learned during the pandemic is that clients are just as adaptable as CPAs. The clients who we might have thought would never try a Zoom meeting figured out how to join one; they figured out how to upload documents securely, and sign a document electronically. I think in the past the profession has held itself back by using clients as an excuse or a crutch to deny that we can change something.
Pandemic increases need for specialists to aid accounting teams [CFO Dive] Firms are hiring, or wondering if they should hire, more specialists outside of accounting or auditing to assist accountants during the pandemic. This is raising issues for CFOs, an American Institute of CPAs (AICPA) report says. More specialists are being brought in because in-house accountants have spotty access to the resources to ensure competent performance with laws enacted in response to COVID-19.
Big Four’s audit income rises 7% [Private Equity News] Meanwhile, across the pond: “Audit income for the Big Four accountancy firms rose 6.9% in 2019 as they maintained their iron grip on the FTSE 100 audit market. Data released by audit watchdog the Financial Reporting Council FRC showed EY, KPMG, Deloitte and PwC audited the entire FTSE 100 last year and also dominated the FTSE 250, with only two firms outside the Big Four auditing at least 10 companies on the index.
KPMG delays results in face of ‘significant uncertainty’ [Accountancy Daily] The firm’s results for the year ending in September, due out in December, will not now appear until the New Year. A KPMG UK spokesperson said: ‘Our business remains resilient and we are focused on advising our clients as they respond to the demands of Covid-19 and adapt their business models for growth.
BDO may have to bail out sister firm in Spain after €126.8m penalty [The Guardian] Accountancy firm BDO is facing the prospect of a significant financial hit after its Spanish sister company was ordered by a court to pay part of a €126.8m (£115m) penalty for its alleged role in an accounting scandal. The Audiencia Nacional, Spain’s highest criminal court, named BDO among firms and individuals convicted of involvement in falsifying the accounts of Galician fishing firm Pescanova between 2010 and 2012.