Please ensure Javascript is enabled for purposes of website accessibility

Friday Footnotes: KPMG’s ESG Conflict; PwC Fails to Deliver; FASB Turns Attention to AI | 3.3.23

happy shiba

Big 4

How auditing giant KPMG became a global sustainability leader while serving companies accused of forest destruction [International Consortium of Investigative Journalists]
The firm vouched for an Indonesian company with a supply chain beset by deforestation allegations and a project in Canada that led to an Indigenous forest’s “death by a thousand cuts”.

‘Happy days’: PwC was confident it would win more robo-debt work [Australian Financial Review]
Consulting firm PwC was confident it would win three more years of work with the mega Human Services Department, including a lucrative data analytics contract, after changing the scope of its robo-debt review to get the minister “off their back”. The robo-debt royal commission heard last month that a final PwC report on the troubled scheme was not delivered.

Sinclair Broadcast Group Teams With Deloitte to Launch New Virtual Community in the Metaverse [PR Newswire]
Deloitte and Sinclair Broadcast Group Inc. today announced the forthcoming launch of a new metaverse sports fan community experience. Announced to coincide with Deloitte’s presence at Mobile World Congress 2023, this new community leverages Epic Games’ Unreal Engine to enhance the ways in which fans and audiences can build connections and engage with the content they love. The fandom community was built by Deloitte’s Unlimited Reality™ practice, which brings together 3D computing, artificial intelligence, Web3.0, immersive experiences and advanced connectivity to help clients create business value. The community makes use of Epic’s Unreal Engine — a powerful 3D creation tool that brings robust experiences to life in real time. This joint initiative marks an exciting next step in Sinclair’s plans to deepen engagement with its viewing community and drive new revenue streams through experiential gaming.

EY US launches Center for Government Modernization [PR Newswire]
Side note: why are they still using Ernst & Young in press releases?
Ernst & Young LLP (EY US) today launched the EY Center for Government Modernization (the Center), an initiative of the EY US Government & Public Sector. The Center will position the EY organization at the forefront of helping US federal, state and local government agencies modernize in response to today’s biggest challenges. “The Center, which encompasses our expertise, relationships and technology solutions, will produce cutting-edge insights for public sector leaders and support government agencies as they build a stronger nation,” says Gerry Dixon, EY US Government and Public Sector Managing Partner. “We imagine a world in which our country and all people can thrive, and government modernization is key to making this happen.”

Crypto

US lawmakers argue SEC accounting policy places crypto customers at risk [Cointelegraph]
Two United States lawmakers have criticized crypto accounting guidelines outlined by the national securities regulator, arguing they places crypto customers at greater risk of loss. The guidelines came from the United States Securities and Exchange Commission and became effective in April last year. The guidelines ask financial companies holding crypto for customers to recognize all digital assets they do not control as a liability. They also state that digital assets should be backed by a safeguarding asset.

Bitcoin Miner Marathon Digital to Restate Some Results on Accounting Issues [CoinDesk]
Marathon Digital (MARA) said it will need to restate portions of its audited 2021 results and currently unaudited quarterly reports from 2022 after an inquiry from the U.S. Securities and Exchange Commission (SEC) flagged technical accounting matters. At issue were the company’s method of calculating impairment on digital assets and its determination of acting as an agent in operating a third-party mining pool rather than a principal, according to an SEC filing. The restatements are not likely to have any impact on total margin, operating income or net income in 2021 or any of the quarterly 2022 results, said the company, which also said it does not expect to be able complete its 2022 10-K filing by the March 1 deadline. Marathon does anticipate it will file the 10-K within 15 days of that deadline.

Bitcoin Miner Accounting Woes Reflect Lack of Official Rules [Bloomberg Law]
The accounting slip-ups that forced two Bitcoin miners to flag this week that they’d have to redo several quarters of their past financial statements could soon be a moot point, as US accounting standard-setters eye a crypto accounting fix. Marathon Digital Inc. and Riot Platforms Inc. both announced accounting restatements after miscalculating drops in the value of the Bitcoin they hold in their coffers. Specifically, they erred in the method they used to determine whether the value had dropped so they could book impairments, accounting calculations that ding earnings.

Tax

Tax tips for influencers are everywhere. We spoke with a CPA about what to know [Marketing Brew]
Recently, conversations have been brewing online around influencers and taxes. Specifically, what they should—and shouldn’t—write off, and the potential risks associated with not filing correctly. Garrett Alexander is a CPA and co-founder of accounting firm Orsini & Associates, which has started to work with content creators and influencers in the past few years. He told us that 1) accountants in the space are in short supply and 2) misconceptions around how influencers should approach taxes are plentiful because of social media. Alexander shared a few financial points that are worth keeping in mind for influencers, not just ahead of tax season, but year round.

Texas property tax bill excludes divorced, LGBTQ couples from getting relief [The Hill]
A new Texas House bill that provides property tax relief based on the size of a family excludes LGBTQ couples and divorced parents with children, among other parties, from getting the tax advantage. Texas House Bill 2889, introduced this week by state Rep. Bryan Slaton (R), would supply a homestead tax credit to “certain married couples” in the state with either biological or adopted children of any age. Qualifying couples under the bill are entitled to annual tax relief corresponding to the size of their family, with four children equal to a possible 40 percent property tax reduction. Couples with 10 or more children may pay no property tax at all, according to the bill.

This is why you shouldn’t get your tax advice from Twitter. Exception made for #taxtwitter-to-#taxtwitter exchanges among professionals.

News

Impeachment inquiry resolution filed in $3.5 billion state accounting error [WIS]
Thursday a resolution was filed that could begin an impeachment inquiry after a $3.5 billion accounting. Representative Gil Gatch (R-Summerville) filed the resolution directing the South Carolina House Judiciary Committee to begin an inquiry into if South Carolina Comptroller General Richard Eckstrom should be impeached. Eckstrom told the Senate Finance Committee in February that the state’s Annual Comprehensive Financial Reports have overstated how much reserve cash the state had. The error accounted for $3.5 billion over a ten-year period. After the error was reported, a dozen Democratic state representatives filed a letter requesting an audit and further inquiry into the error.

U.S. Accounting Rulemakers Studying How Investors Use Artificial Intelligence to Consume Financial Data [Thomson Reuters]
FASB and GASB are actively monitoring the evolution of electronic financial reporting, including how investors use Artificial Intelligence (AI) to consume data, Chairs of the accounting rulemaking boards said on Feb. 28, 2023. The FASB is keeping tabs on the use of AI, including chatbots such as ChatGpt, studying how users of financial statements consume financial reporting information these days, FASB Chair Richard Jones told trustees of the Financial Accounting Foundation (FAF) on Tuesday. “No, we’re not going to use it to write our standards – I would just note that,” he said. “But I think it is important and that’s part of our continuous outreach with investors in understanding their ability to process data, how they’re processing data, how do we get the most important data information in our investment capital allocation decisions.”

Xero announces new Chief Product Officer, Diya Jolly [Xero]
Jolly comes to Xero from Okta where she was Chief Product Officer, responsible for leading product innovation for both its workforce and customer identity business. Prior to Okta, Jolly was Vice President of Product Management at Google, where she was focused on driving adoption for some of the companyʼs leading products including Google Home, Nest, YouTube monetisation and Gmail monetisation. She has an MBA from Harvard Business School and a Bachelor of Electrical Engineering and Economics from the University of Michigan.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

dog with pink heart glasses

Friday Footnotes: An Outsourcing Shortage Now Too?; Finally, Some Disruption; PwC Haters Celebrate Government Inquiry | 3.17.23

There’s a lot happening this week. Which YAY because hooooo boy can it get boring around here when there isn’t. First things first, check out what the AICPA is working on and when you’ve had a chance to review their idea, reach out with your feedback if you want. Comments are closed on Footnotes because […]

big ole stack of books

MNCPA to Educators: “We Do Not Need New CPAs Who Have Additional College Credits; We Need More CPAs, Period.”

Minnesota Society of CPAs has sent a message to educators in the state regarding legislation that would introduce an alternative pathway to CPA licensure and the message to these stewards of the next generation of accountants is clear: no one is trying to eliminate MAcc programs. As you should well be aware, MNCPA wants to […]