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Audit
Investors settle with KPMG over Silicon Valley Bank collapse [Reuters] Investors involved in a class action lawsuit over the 2023 collapse of Silicon Valley Bank (SVB) have reached a $224.5 million settlement with external auditor KPMG LLP, Norway’s sovereign wealth fund said on Friday. KPMG said the settlement was not an admission of wrongdoing and that it stood by its work.
PCAOB Issues Notices of Delinquency and Impending Withdrawal to 97 Audit Firms [PCAOB]
“This action provides investors and other market participants with a more accurate picture of the audit firms that remain active in the public company audit space,” said PCAOB Chairman Demetrios (Jim) Logothetis. “Maintaining complete and accurate registration records is a basic and essential function of the PCAOB and an important part of our mission to protect investors and the integrity of our capital markets.”
6 largest audit firms told to self-assess after breaches of auditor independence found [Accounting Times]
Australian Securities and Investments Commission’s latest surveillance found that preparers of financial reports and auditors are still not nailing the fundamentals. The report has landed at a time when big audit firm KPMG continues to be in the spotlight for its alleged audit misconduct, mishandling of confidential client information, and handling of the whistleblower who aired the allegations.
AI
KPMG Tests Advanced AI on Private Company Audit Clients First [Bloomberg Tax]
Hundreds of KPMG audit teams are field testing advanced AI agents as they gear up for their busy season of vetting companies’ annual financial reports. Staff with the Big Four accounting and advisory firm this fall gained access to a suite of artificial intelligence agents to support their work checking the revenue and asset values of privately held clients across 30 countries. The agents could touch more than 500 audits, performing tasks once handled by humans like selecting financial transactions that require closer inspection.
Accountants focus on their clients, and use AI for routine tasks [Irish Examiner]
Said Paul O’Connell, area managing partner at Xeinadin:
For graduates, the skill set will therefore evolve. Strong technical accounting and tax knowledge will remain fundamental, but it will increasingly sit alongside data literacy, confidence using AI tools, critical thinking and communication skills. Importantly, accountants will also need to understand the limitations of AI. Professional judgement, scepticism, ethics and accountability cannot simply be delegated to technology.
AI’s Role in Finance Is Here to Stay—and Adoption Near Universal: BDO [Wall Street Journal]
Artificial intelligence tools are now heavily integrated into crucial financial operations. And many senior executives say such technology has been an important boost for tasks such as forecasting, asset valuations and auditing. That’s according to BDO’s third annual Audit Innovation Survey, which polled 200 finance leaders to explore how AI is reshaping companies and the audit function. (By the way, more than half, or 54%, of respondents hold the title of finance director/VP of finance, about one third are CFOs and 9% are controllers.)
Deloitte launches AI-powered compliance tool to curb corporate greenwashing [ESG Dive]
The “Green Claims Navigator” is powered by artificial intelligence and designed to identify misleading statements a company has made about the environmental benefits of its product or practice within minutes, the consulting firm said. The tool — available in Europe, the Middle East and Africa — vets claims made in the company’s sustainability reports, websites and marketing campaigns, as well as packaging materials.
Talent
State auditor Joseph Maestas plans tech upgrades, addresses CPA gap in New Mexico [KOB]
Maestas spoke with KOB 4 reporter Blake Troli on election night about his goals for the new term. “We’re going to integrate technology to make sure the office runs much more efficient, we’re going to address this national workforce crisis,” Maestas said. “There’s a shortage of accounting talent. So I’m working with all stake holders, especially higher education to re-establish a pipeline of talent in accounting. 75% of the CPAs are eligible to retire, there’s a loss of interest in the field of accounting. And so I’m going to put this on my shoulders and take this workforce crisis on, and I believe the next governor is going to help me do that.”
Korea accounting bodies urge cutting CPA intake to 850–1,000 amid AI shift [ChosunBiz]
The Korean Accounting Association research team said, “The growth rate of accounting firm revenue has slowed to an average of 2.8% over the past three years, and net employment is expected to decrease from 1,160 in 2023 to 370 in 2025,” adding, “As of last month, the number of those without assigned practical training placements is estimated at about 300, and the proportion of that year’s passers who began training fell sharply to 63.6% last year, compared with 89.2% in 2022.”
Ethics
AICPA proposes ethics guidance for alternative practice structures [Journal of Accountancy]
The AICPA Code of Professional Conduct has had alternative practice structure provisions in place since 2000, according to the release, but the quickened pace of private-equity investment in the profession prompted PEEC to look at ways to refine and clarify rules on independence and conflicts of interest to reflect unique situations when a firm providing audit and attest services is closely aligned with an entity that has financial and operational relationships with an investor.
Mergers & Acquisitions
Private Equity Group Raises $21.5M to Acquire Accounting Firms in Under $5M Range [CPA Practice Advisor]
The latest venture, Numica, announced it raised $21 million in combined equity and debt financing from Roosh X and Flashpoint Capital. Numica bills itself as “an AI-first accounting platform that acquires and modernizes small” U.S. accounting” firms.
EisnerAmper buys RSM’s Sage Intacct practice [Consulting.us]
The carve-out, which is slated to close in early 2027, will add a team of more than 35 professionals to EisnerAmper’s existing Sage Intacct practice.
