October 2, 2022

Friday Footnotes: ‘KPMG Did Not Know What They Were Doing’; Are You Boring?; PCAOB Warns About Confirmations | 3.25.22

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These are the 5 most ‘boring’ — and exciting — jobs in the world, according to a recent study [CNBC] You’ll be happy to hear accounting made #2 on the most boring list. Don’t feel bad, MY job ranked #3 most exciting and I assure you it absolutely is not, I write about accounting after all. “I would have thought that accountants would be seen as boring, but effective and the perfect person to do a good job on your tax return,” Wijnand Van Tilburg, a study co-author and senior lecturer in the university’s psychology department, said in a statement last week.

I’m just going to leave this here:

Finding ‘untapped’ talent pools of CPAs [Journal of Accountancy] Gee I have no idea why it’s getting so hard to find CPAs hmmm…OH maybe because this is the kind of advice being handed out: “Put aside preconceived notions about what experienced CPA job seekers are looking for in their jobs. At times, these professionals are not interested in traditional career trajectories and may not be looking to make as much money as a hiring professional may think. Instead, they may be seeking greater workplace flexibility, robust benefits, shorter commutes, or the ability to work remotely.”

Climate Plan Puts SEC in Rare Role as Accounting Rule-Writer [Bloomberg Tax] The U.S. Securities and Exchange Commission’s landmark climate change proposal thrusts the Wall Street regulator into a role it usually takes pains to avoid: setting accounting rules.

PCAOB cautions firms on use of outside service providers for audit confirmations [Accounting Today] The Public Company Accounting Oversight Board issued a Spotlight publication Monday containing some observations and reminders for auditing firms about relying on outside service providers for electronic audit confirmations. Many firms turn to third-party service providers to send and receive electronic audit confirmations to and from “confirming parties,” including banks, financial institutions, investment and brokerage firms, and law firms. The new publication includes some observations from PCAOB staff about how firms are leaning on such providers and suggests procedures for auditors to follow as they plan and perform audits. In some cases, auditing firms may be relying too heavily on such outside companies. PCAOB Spotlight PDF here.

U.S. regulators see deal with Beijing on audits as ‘premature,’ will continue to engage [Reuters] The Public Company Accounting Oversight Board (PCAOB) said recent media speculation about an imminent deal that would stop hundreds of Chinese companies from being kicked off American stock exchanges was “premature.” The regulator added that any agreement would only be a “first step” and that the PCAOB would then investigate to ensure that the deal is being followed.

IRS ramps up marijuana business audits after COVID-19 lull, sources say [MJBizDaily] “There was a lot of slowdown in the IRS because of COVID in the IRS,” said Rachel Gillette, a Denver tax attorney with the Holland & Hart firm. “Now, we’re seeing (IRS audits) all over the country, from East Coast to West Coast, and it’s wherever cannabis is legal.” Gillette said she’s seen a “significant increase” in audit notification letters being sent to marijuana company clients of hers.

Auditor of ‘Sham’ Akazoo Streaming Service Sued For $40 Million: ‘Crowe Committed Fraud’ [Digital Music News] Back in April of 2020, streaming service Akazoo, which claimed to have a material presence in emerging markets, faced accusations of fraud in a damning report. Akazoo fired its CEO and saw its stock price tumble shortly thereafter, and investors have now filed a $40 million lawsuit against the accounting firm that audited the defunct company’s financials.

The SEC Wants to Stop Activism [Bloomberg Opinion] Recently the U.S. Securities and Exchange Commission has proposed some rules to … stop activism? This seems bad, and also like a strange priority for the SEC to have.

More U.S. Companies Wade Into NFTs Despite Lack of Accounting Rules [Wall Street Journal] More U.S. companies are investing in nonfungible tokens even though there are no specific accounting rules or disclosure requirements for them.

Quite a bit went down in Australia this week:

Feds still spraying money at Deloitte through a firehose [InnovationAus] The first two years of the pandemic have been a winner in Canberra for consulting giant Deloitte, which has grown revenue from federal contracts by nearly 70 per cent, or $109 million additional dollars. Deloitte revenue from federal government contracts for calendar year 2021 as reported to AusTender amounted to $265.3 million. This was a 23 per increase – or $51 million – over the 2020 calendar year, when Deloitte enjoyed $214 million worth of federal business.

When ‘fake coal’ alarm bells rang for EY auditors [Australian Financial Review] A letter from auditors EY has outlined how the accounting overseers became concerned about miner TerraCom’s alleged involvement in a scam to falsely boost coal results. In the letter to the corporate regulator, obtained by AFR Weekend, EY refers to an email trail that allegedly shows at least one TerraCom employee “may have been aware of the modification to at least one of the coal sample results”.

Star CEO ‘berated’ KPMG report authors [The Singleton Argus] A report into Star’s compliance with anti-money laundering and counter-terrorism financing laws, which eventually sparked an inquiry into the company, was earlier subject to a “very tense” meeting of its audit committee. Star CEO Matt Bekier was the last to arrive at the May 2018 meeting, “making a show of throwing (the report) on to the table” and saying it was inaccurate, according to Star’s former chief risk officer Paul McWilliams. The “broad theme” of the CEO’s reaction was that the report contained multiple errors and KPMG did not know what they were doing.

PwC Australia Misused Legal Privilege in Shielding Documents [Bloomberg Tax] PwC’s Australian unit used legal privilege inappropriately to hide documents from the country’s tax office during tax audits of a multinational business, the Federal Court of Australia said Friday.

And here’s a bit of positive encouragement from Twitter. We don’t see that often do we?

SEC accepts FASB’s 2022 reporting taxonomies [CFO Dive] The Securities and Exchange Commission has accepted updates to the Financial Accounting Standards Board’s GAAP Financial Reporting Taxonomy and SEC Reporting Taxonomy, FASB has announced. This year’s GAAP Taxonomy contains updates on amendments to accounting standards and other recommended changes to several topics and disclosure issues, including credit losses, balance sheet offsetting, pledging and recourse, and deprecations from superseded guidance.

Accounting firm professionals name their favorite TED talks [Journal of Accountancy] Most accounting firm professionals are now working remotely, meaning more time behind the computer screen to not only help clients, companies, or students — but to spend time visiting thought-provoking sites on the web. So for the third time since 2016, we reached out to accounting professionals, asking them to describe their favorite TED talks and why these short and thought-provoking speeches are meaningful to them.

Finally, here’s just a slice of this week’s crime blotter:

Former IRS Employee Arrested for Assisting in Preparation of False Tax Returns, Identity Theft [Department of Justice] Frederick Louis, 57, of Cincinnati, Ohio, was indicted on 16 counts of aiding or assisting in the preparation of false tax returns, 4 counts of wire fraud, and 4 counts of aggravated identity theft. On March 18, 2022, Louis was arrested by IRS Criminal Investigation Special Agents. The indictment alleges that Louis served as a “ghost preparer,” meaning that he prepared tax returns for compensation but failed to sign or otherwise declare the tax returns he prepared for other individuals. Louis worked as a Tax Examiner for the IRS from 1985 to 1994. It is alleged that due to his prior IRS employment, Louis knew that by law individuals who are paid to prepare or assist in preparing tax returns must have a valid Preparer Tax Identification Number (PTIN) and sign and include their PTIN on the returns they prepare. Louis also held himself out to be an accountant who prepared tax returns for pay or as a favor to friends. In actuality, Louis does not have an accounting degree, is not a Certified Public Accountant, and did not have a PTIN.

Model, 27, is scarred for life after ‘misogynist’ accountant she had never met before smashed a pint glass over her face in a Manchester bar, ‘because she was a woman’ [Daily Mail] Amy Hallam, 27, needed 20 stitches after she was assaulted at random by ‘misogynist’ chartered accountant Khalil Bangi, 32, who targeted her in a busy bar in Manchester. Initially, Bangi aggressively blocked Miss Hallam’s path to stop her walking past him before he got in her face and called her a ‘f*****g sl*t.’

Man shot, killed his boss and shot accountant before taking his own life at Burr Ridge office complex [CBS Chicago] Police on Wednesday said a day before, a 31-year-old gunman barged into three separate businesses in a Burr Ridge office complex – all of which he had worked for at some point – and fired at least five shots before taking his own life. The gunman – identified as Jeremy Spicer of Arkansas – shot and killed his boss and wounded an accountant.

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