Some things are happening today. Bank Fail Friday is back!
What does Silicon Valley Bank’s collapse mean for the financial system? [The Economist]
Two ways. Gradually, then suddenly. That is how Silicon Valley Bank (svb), the 16th-largest lender in America, with about $200bn in assets, went bust. Its financial position deteriorated over several years. But just two days elapsed between the San Francisco-based bank’s announcement on March 8th that it was seeking to raise $2.5bn to plug a hole in its balance-sheet, and the declaration by the Federal Deposit Insurance Corporation, which regulates American bank deposits, that svb had failed.
Big 4
The original post was deleted and disappeared just before press time. Have a screenshot instead and check out that upvote ratio (!)
And I oop–
It’s true (Part II, Item 8 “Report of Independent Registered Public Accounting Firm”). KPMG has served as SVB auditor since 1994.
Deloitte Appoints Dipti Gulati as Chair and CEO of Deloitte & Touche LLP and Carin Giuliante as Chair and CEO of Deloitte Tax LLP [PR Newswire]
“As strategic leaders, Dipti and Carin have proven track records of serving our clients with dedication and quality, and of fostering a culture of engagement, inclusion and purpose among our people and the communities we serve,” said Jason Girzadas, CEO-Elect, Deloitte US. “This is an incredibly dynamic time for our organization, and I look forward to working with these visionary leaders who are well positioned to drive Deloitte’s continued marketplace leadership with a focus on meeting the evolving needs of our clients, supporting our people and helping build trust and confidence in capital markets.” Gulati will succeed Lara Abrash, who has been elected chair of the Deloitte’s US board of directors effective June 4, 2023, and Giuliante will succeed Steve Kimble.
PwC CEO defends firm over robo-debt work [Australian Financial Review]
PwC chief executive Tom Seymour has defended the firm’s robo-debt work, saying its consultants highlighted problems with the program and routinely communicate findings to clients in slide presentations instead of written reports. His comments come after the royal commission into the illegal scheme heard PwC’s final report into the program was never delivered and that the firm’s findings were going to be marked for cabinet consideration to ensure they were not made public. “What happened was we issued a slide presentation with all the facts to the government, and what the government said [this week] in the royal commission was, ‘We got that, that told us what we needed, and it told us what we had to do to fix the issues’,” Mr Seymour told The Australian Financial Review Business Summit on Wednesday.
Deloitte, EY Offer Competing Tools to Curb Carbon Emissions [Bloomberg Tax]
Big Four rivals Deloitte and Ernst & Young announced Wednesday similar offerings to help companies weigh options to reduce their emissions of planet-warming greenhouse gases.
Tax
These Philadelphia high school students can do your taxes as well as any CPA — for free [KYW Newsradio]
Students in the VITA program gain skills that can bolster their resumes, said Denise Magasich, a business and finance programs specialist from the school district’s career and technical education office. “If you could see a student has IRS certifications for three years, QuickBooks and Microsoft certification, that’s going to really set them apart of other students who are going for the same type of job. So it really qualifies our students and gives them a leg up,” she said.
U.S. deficit grows to $262 billion in February as tax refunds surge [Reuters]
The U.S. government posted a $262 billion budget deficit in February, up 21% from a year earlier, as outlays grew and revenues fell, due largely to higher tax refunds issued as the Internal Revenue Service worked through a substantial backlog of unprocessed returns. The Treasury Department said on Friday the deficit last month compared to a $217 billion budget gap in February 2022. Receipts for the month fell $28 billion, or 10%, to $262 billion, while outlays grew $18 billion, or 4%, to $525 billion.
Biden set to unveil more than $2 trillion in tax hikes in budget [The Hill]
President Biden is set to formally propose an array of tax increases on wealthy individuals and corporations in a budget plan that he says will reduce the deficit by $2 trillion over the next decade, setting up a battle royal with Republicans on Capitol Hill. Biden told lawmakers during his State of the Union address last month that his budget will lower the deficit and extend the solvency of the Medicare Trust Fund “by making the wealthy and big corporations begin to pay their fair share.” He has pledged not to raise taxes on anyone earning less than $400,000 annually.
Iowa state auditor slams bill that would limit state watchdog [The Gazette]
Limits would be placed on what personal information the state taxpayers’ watchdog could demand during an audit under legislation being advanced by state lawmakers. How Senate File 478 would impact the state auditor’s ability to conduct investigations in an independent, nonpartisan fashion is the subject of stark disagreement between the current state auditor and the lawmaker who crafted the legislation.
Research
PwC and KPMG fall behind in promoting women to run major audit work [Financial Times]
PwC and KPMG are falling behind rivals EY and Deloitte in promoting women to run the most prestigious audits in corporate America, new data shows. Women still only account for 20 per cent of the lead engagement partners on audits of S&P 500 companies, according to a study published on Tuesday by the CFA Institute, the professional body for the investment industry. The figure, covering audits from 2021, represented an improvement from 15 per cent four years earlier but showed the need for faster progress at some firms in particular, said Sandy Peters, head of global advocacy at the institute. “Half of those entering the accounting profession are women,” Peters wrote in the study. “The issue in Big Four firms is leakage from the pipeline. Within 10 to 15 years — the time it takes to become a partner — the near-majority of women in accounting turns into a minority.”
PwC-Workiva study finds businesses not waiting for SEC ruling on climate disclosures [Business Record]
A new survey released Tuesday by PwC U.S. and Workiva Inc. finds 70% of business leaders report they are not waiting for the U.S. Securities and Exchange Commission to finalize the climate disclosure rules and will proceed with compliance regardless of when they become U.S. law. According to a news release, business leaders who say they feel prepared also acknowledge there will likely be significant challenges to complying with the SEC’s proposed climate disclosure rules, including deadlines, resourcing, technology and budget. Seventy percent of executives report their companies already seek voluntary, independent assurance – and will continue – even if it is not required for reporting scope 1 and 2 greenhouse gas emissions. Almost all leaders (96%) say they will proceed with assurance, regardless of whether it is included in the final SEC rules.
PwC study: 18-year-old women starting work today will not see pay equality in their careers [Investment Week]
In its annual Women in Work Index study, PwC found that progress towards gender equality at work in the past decade has been “exceedingly slow”, with a persistent gender pay gap of 14%, down only 2.5 percentage points since 2011. PwC noted that the slight year-on-year improvement was not as a result of positive, systematic changes; rather it was a symptom of the economic recovery from Covid-19 labour markets. It “does not demonstrate genuine progress towards gender equality”, the report stated.
Firm Watch
RubinBrown acquires third business advisory firm since mid-2021 [St. Louis Business Journal]
Clayton-based accounting firm RubinBrown LLP has acquired an Alabama management consulting firm, the third expansion of its business advisory services in less than two years. Terms of the acquisition of KnowledgePath Consulting were not disclosed and RubinBrown declined to discuss how it was financed. The acquisition by merger takes effect March 15.
Crowe names Rachael Gibson chief diversity, equity and inclusion officer [PR Newswire]
As part of its ongoing commitment to cultivating an inclusive workforce, Crowe LLP, a leading public accounting, consulting and technology firm in the U.S. with offices around the world, today announced the appointment of Rachael Gibson as its new chief diversity, equity and inclusion officer (CDEIO).
In the Hunt for Fraud, the Red Flags Start With the Auditor [Institutional Investor]
Hindenburg Research’s scorching report on Adani Group alleging pervasive fraud at the Indian conglomerate had some sound advice for safety-minded investors. Check out the auditor.
Practice
How to effectively onboard remote hires [Journal of Accountancy]
Onboarding remote employees — whether they’re working from another country or a home in the suburbs — is about more than shifting face-to-face meetings to videoconferences. To be sure, virtual onboarding is as important as a new hire process that’s in person, and the end result may be the same.
Ways to Solve Your Accounting Firm’s Last-Minute Staffing Needs [CPA Practice Advisor]
This is admittedly a grim outlook for CPA firms everywhere in need of talent, and not just at tax time. To turn things around, managers need to get creative. Here’s a look at three ways to address your accounting firm’s last-minute staffing needs while also laying the foundation for a staffing strategy that will help ensure you can always access a supply of skilled accounting talent when you need it.