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February 2, 2023

Friday Footnotes: PwC in Trouble?; A Backwards Accountant; Audit Committee Musical Chairs | 1.13.23

Big 4

Isio Group inks deal to acquire Deloitte’s U.K. retirement advisory business [Pensions & Investments]
Consultant Isio Group agreed to acquire Deloitte Total Reward and Benefits, the U.K. pensions advisory business of Deloitte, a spokesman confirmed Wednesday. Terms of the deal were not disclosed. The transaction, which is subject to regulatory approvals from the Financial Conduct Authority, will complete in the spring. The deal will see 200 employees joining from Deloitte across nine U.K. cities. Isio will also gain an office in Belfast.

Minority shareholders denounce Brazil’s Americanas for ‘multi-billion fraud’ [Reuters]
A group representing minority shareholders on Friday filed a complaint with Brazil’s securities regulator against Americanas SA after the retailer uncovered “accounting inconsistencies” totaling 20 billion reais ($3.89 billion). The Abradin association said it was denouncing Americanas for what it called a “multi-billion fraud,” while also asking regulator CVM to investigate the retailer’s auditor, PwC. Shares in Americanas plummeted more than 75% on Thursday, wiping out 8.4 billion reais in market value after the company’s chief executive Sergio Rial resigned, citing the discovery of inconsistencies. “Calling it ‘inconsistencies’ is nothing more than an attempt to use a euphemism for a multi-billion fraud that not only destroyed the assets of shareholders but also undermined the credibility of Brazil’s capital markets,” Abradin said in a document seen by Reuters.

Audit Committee Composition Changing Amid Expanded Scope and Emerging Risks, According to New Report from Deloitte and the Center for Audit Quality (CAQ) [PR Newswire]
Corporate boards are taking a fresh look at their audit committee structures and practices in light of emerging corporate reporting areas and increased risks, according to a new survey and collaborative report from Deloitte’s Center for Board Effectiveness and the Center for Audit Quality (CAQ). “Audit Committee Practices Report: Priorities and Committee Composition,” a survey of 164 audit committee members of primarily large-cap, public companies in the U.S., provides insight into shifting oversight priorities and practices related to audit committee composition. Over the next 12 months, one-quarter of respondents expect to make changes to the composition of their audit committee, with 25% anticipating increasing the size of their audit committee, 28% planning on replacing their audit committee chair, and 42% expecting to replace one or more committee members.

ICYMI:

EY earmarks $2.5bn for consulting arm M&A splurge after planned split [Financial Times]
EY is setting aside $2.5bn to fund an acquisition spree for its consulting arm following its planned separation from the Big Four firm’s audit business, as it presses ahead with preparations for the historic split. Bosses have also earmarked a budget of up to $400mn to be ploughed into building a new brand for the consulting business, which will no longer use the EY name after the split.

We want to highlight a comment left this afternoon on Do Looks Matter at Big 4 Firms? And If So, Do They Matter at PwC the Most? as that post is from a few weeks back therefore this comment is likely to get buried:

I hope she did get an attorney, but seems as though we would have heard about a big scandalous court proceeding if it had gotten very far, which we didn’t.

I hope she found a place where she could do quality work without constant remarks about her appearance, or expectations of her that have nothing to do with the work she was hired to do.

I will admit that I have never been the kind of woman to receive such horrendous and insulting behavior directly by men I work with, so I don’t fit this category, but I have been around for the inappropriate jokes and the uncomfortable environment.

There are men who don’t think this kind of behavior is a problem. There are women who blame women for bringing it on themselves based on what they do or do not wear. These are both ridiculous attitudes born out of the patriarchal system we continue to perpetuate especially in traditional fields, like accounting.

As a woman, a professional, and a mother, I am embarrassed that things like this continue to happen in the 21st century.

 

News

Trump’s Company Gets Maximum Punishment for Evading Taxes [New York Times]
Former President Donald J. Trump’s family real estate business was ordered on Friday to pay a $1.6 million criminal penalty for its conviction on felony tax fraud and other charges, a stinging rebuke and the maximum possible punishment. The sentence, handed down by a judge in State Supreme Court in Manhattan, caps a lengthy legal ordeal for Mr. Trump’s company, the Trump Organization, which was convicted in December of doling out off-the-books perks to some of its top executives.

Paul Munter Named Chief Accountant [SEC]
The Securities and Exchange Commission today announced that Paul Munter has been appointed Chief Accountant. He has served as Acting Chief Accountant since January 2021. As Chief Accountant, Mr. Munter will continue to lead the Office of the Chief Accountant (OCA) and serve as the principal advisor to the Commission on accounting and auditing matters. He also will be responsible for assisting the Commission in discharging its oversight of both the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).

Bookkeeper May Have Embezzled Hundreds of Thousands of Dollars from Humboldt County Fair Association, GM Says [Lost Coast Outpost]
Humboldt County Fair Association General Manager Rich Silacci is hesitant to speculate about how much Tafarella may have embezzled until a Fortuna accounting firm completes a forensic audit of the nonprofit fair association’s books, but after looking through the available financial documents himself he believes the figure could be between $300,000 and $400,000. “It looks that way,” Silacci said in a recent phone interview, “but I want a professional to say, ‘This is what it is.’”

Firm Watch

Coco Gauff and Baker Tilly: Game, Set, Match [Baker Tilly]
Baker Tilly US, LLP (Baker Tilly) announces tennis star Coco Gauff as its new brand ambassador. Heading into next week’s 2023 Australian Open, Coco has a commanding start to the season having just won her third career WTA singles title at the ASB Classic in Auckland, New Zealand. “Coco Gauff is a trailblazer whose quiet confidence and steely courage are riveting to watch,” said Baker Tilly CEO Alan Whitman. “We are proud and honored to partner with Coco. She is a role model with a worldwide following who inspires us all to reach for what’s possible.” [some more press release copy] “I am excited to partner with Baker Tilly, a dynamic organization who, like me, dreams big and thinks bold,” said Coco Gauff. “I look forward to building a rewarding relationship and blazing new trails together.”

Cherry Bekaert Joins Accounting+ to Advance Diversity, Equity, and Inclusion Within Profession [PR Newswire]
Cherry Bekaert is joining Accounting+, a growing coalition committed to advancing diversity, equity and inclusion (DEI) within accounting through a nationwide campaign to attract a new generation of students into the talent pipeline. Led by the Center for Audit Quality (CAQ), a nonpartisan public policy organization serving as the voice of U.S. public company auditors, Accounting+ is a first-of-its kind, profession-backed campaign to actively engage high school and college students with dynamic, tailored resources on the benefits of a career in accounting, including paths to entrepreneurship and to helping build vibrant local communities. The campaign dispels misperceptions about accounting – namely that it is not interesting or a profession that can help them reach their goals. The Accounting+ campaign is based on research that found substantial openness to accounting as a profession. “We are focused on addressing the diversity gap that exists within accounting,” said Liz Barentzen, Vice President Talent Initiatives, CAQ. “With Accounting+, our goal is to reach the next generation of accounting professionals and ensure that students can see themselves within this exciting, high-demand field.”

Talent

Are midcareer CPAs happy in your firm? [Accounting Today Opinion]
With baby boomers reaching retirement age and fewer accounting graduates choosing to enter public accounting, the pool of talent available to CPA firms is shrinking at both ends. That dynamic heightens the importance of the midcareer professionals at each firm, but two Hinge Research Institute studies suggest these accountants are unhappy in their current jobs and among the most likely professional service providers to be considering a job change. With the value of these employees at a premium, firms that want to retain them (and to attract those who are unhappy elsewhere) should be asking what’s driving the dissatisfaction in this group and how to improve retention of these key employees and attract new ones.

Orlando lands among worst-paying metro areas for accountants [Orlando Business Journal]
Central Florida ranked poorly — fourth from the bottom — when it comes to competitive salaries for large metro areas’ accountants, per Smartest Dollar’s The Best-Paying American Cities for Accountants in 2022 report. Metro Orlando’s median annual wage in the field was higher than the state average, but it fell far below the national average of $77,250. Florida ranked No. 49 out of 50 states with $63,198 in adjusted median annual wage for accountants.

Including this under “Talent” just because:

Discussion here and here

Tax

IRS sets January 23 as official start to 2023 tax filing season; more help available for taxpayers this year [IRS]
The Internal Revenue Service today announced Monday, January 23, 2023, as the beginning of the nation’s 2023 tax season when the agency will begin accepting and processing 2022 tax year returns. More than 168 million individual tax returns are expected to be filed, with the vast majority of those coming before the April 18 tax deadline. People have three extra days to file this year due to the calendar. With the three previous tax seasons dramatically impacted by the pandemic, the IRS has taken additional steps for 2023 to improve service for taxpayers. As part of the August passage of the Inflation Reduction Act, the IRS has hired more than 5,000 new telephone assistors and added more in-person staff to help support taxpayers.

Accountants Doing Stuff

This Italian accountant holds the world record for most books typed backwards. [Literary Hub]
Among his backwards-typed books are: the Epic of Gilgamesh, the Code of Hammurabi, the Bible, all of Leonardo da Vinci’s writings, and Guinness World Records 2002. 63-year-old Italian accountant Michele Santelia cites da Vinci, one of the world’s first known practitioners of mirror writing, as the inspiration behind his decision to pursue mirror typing: “It is to his enlightened mind that I, with great humility, attempt to compare [myself] in order to try to understand his mysteries, his secrets and ancient virtues!”

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