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February 6, 2023

Friday Footnotes: PwC Partner$; The Ketamine Accountant; Deloitte Mexico Missed Some Stuff | 7.8.22

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Wirecard’s former top accountant admits forging documents for KPMG special audit [Financial Times] Wirecard’s ex-head of accounting has admitted to forging documents requested by KPMG during a special audit, ahead of a trial that is set for later this year, according to people familiar with the matter. Stephan von Erffa is one of three defendants in a case brought by Munich prosecutors over the spectacular downfall of one of Germany’s highest-flying technology companies.

Deloitte Was a Common Factor at Troubled Mexican Shadow Banks [Wall Street Journal] Unregulated lenders in Mexico that specialize in loans to low-income people grew at a breakneck pace over the past decade, until accounting irregularities at three Deloitte-audited firms threw the sector’s credibility into question. The three lenders—Crédito Real SAB de CV, AlphaCredit Capital SA de CV and Grupo Finmart—have discredited some financial statements as unreliable. All retained the same auditor for years: Deloitte Mexico, the Mexico City-based unit of Deloitte Touche Tohmatsu Ltd.

PwC partners to earn £1m each as firm sets new pay records [The Guardian] Partners at PwC will receive an average of more than £1m in pay for the latest financial year, a record for the “big four” accountancy firm. PwC made an average profit per partner of £920,000 in the year to the end of June 2022, up from the previous record of £868,000 the year before and £765,000 in 2019 before the pandemic, according to unaudited figures.

SEC Acting Chief Accountant cautions again about auditor independence concerns, especially the “checklist compliance mentality” [JD Supra] In this June statement, Acting Chief Accountant Paul Munter again addresses auditor independence. The SEC, he observes, “has long-recognized that audits by professional, objective, and skilled accountants that are independent of their audit clients contribute to both investor protection and investor confidence in the financial statements.”

Accountant turned to dealing ketamine to pay off debts [Gazette & Herald] “This will affect your career and there’s nothing I can do about that,” Judge Jason Taylor said at sentencing.

Are you getting paid per mention or something?

Anyone else?

How should accountants react to sanctions evasion proposals? [ICAEW Insights] Evading sanctions should be harmonised as a criminal offence across the entire EU, according to Brussels proposals. What does this mean for the accounting profession?

EY launches financial literacy summer camp for employees’ kids [Employee Benefit News] The EY program offers sessions tailored to different age groups — younger children can participate in online classes that teach them about how to save, as well as the importance of giving back to charity. Older participants can learn about how banks work, as well as tips for building credit and signing up for a first credit card. Campers can also get a rundown of how to manage their first job by learning about employee benefits and how taxes work.

BDO Canada, other firms pause sponsorship of Hockey Canada [Consultancy.ca] BDO Canada and other large companies have paused their sponsorship of Hockey Canada following public outcry over the hockey federation’s handling of an alleged sexual assault.

Anyone wanna talk about it?

Drug company AbbVie used Trump tax law to shield profits, Senate report finds [The Hill] Pharmaceutical giant AbbVie generates almost all of its sales in the United States but has allegedly exploited former President Trump’s tax law to shield much of its sales from taxes, according to an interim report released Thursday by Democrats on the Senate Finance Committee. The report details how loopholes in the 2017 tax law have allowed AbbVie, a large multinational corporation headquartered in the U.S., to substantially shrink its tax burden and stash profits overseas to avoid paying taxes on prescription drug sales.

IRS asks watchdog to look into audits of Trump foes James Comey and Andrew McCabe [AP via LA Times] The IRS commissioner has asked the Treasury Department’s inspector general to immediately review the circumstances surrounding intensive tax audits that targeted ex-FBI Director James B. Comey and ex-Deputy Director Andrew McCabe, both frequent targets of President Trump’s anger.

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