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October 1, 2023

Friday Footnotes: Troubled KPMGer Kicks Rocks; Stay Home, Auditors; Grant Thornton Plays Defense | 4.2.21

Partner who led KPMG’s audit of Carillion leaves Big Four firm [Financial Times] The partner who led KPMG’s audit of Carillion, the collapsed government contractor, has left the Big Four firm as the UK accounting regulator’s investigation into the scandal reaches an advanced stage.

IRS provides details on April 15 postponement [Journal of Accountancy] On Monday, the IRS issued guidance with details on its postponement of the April 15 tax deadline for individuals (Notice 2021-21). The IRS had announced in a news release on March 17 that it was delaying the April 15 deadline for individuals until May 17, 2021. Monday’s notice clarifies and adds details about the postponement. Like the news release before it, the notice does not extend the April 15 due date for estimated tax payments.

A Summary of Early Critical Audit Matter Reporting [The CPA Journal] Since the PCAOB issued its requirements for the reporting of critical audit matters (CAM), there has been much debate about how to interpret and implement the guidance. The authors examined CAM disclosures in SEC filings and found that audit reports with CAMs were often twice as long as those without. The most frequent CAM topics were revenue recognition, goodwill and other intangible assets, and taxes.

Grant Thornton defends audit of troubled Liverpool Council [City A.M.] A recent report into Liverpool Council found a litany of failures, including around a “rotten culture” of dubious contracts and backroom bullying. Official records of the council were reportedly dumped in skips.

This accounting firm will let staff choose start times — and clock off early in the summer [MarketWatch] Spoiler, it’s PwC: The accounting giant said it expects its 22,000 employees in the U.K. to spend an average of 40–60% of their time working with colleagues, either in its offices or at client sites, once pandemic restrictions are lifted, with the freedom to work remotely the rest of the week. Under the “hybrid” working model — dubbed the “Deal” — PwC employees will also be able to personalize their working hours, for example by starting or ending the day earlier.

FASB Gives Private Companies Goodwill Accounting Break [CFO] Private companies and nonprofit organizations got some breathing room on goodwill accounting this week. The Financial Accounting Standards Board published an update to U.S. accounting rules that allows private companies and nonprofits to only test for goodwill impairments at the time they are closing their books, instead of when triggering events occur.

Remote auditing not going away post-pandemic [CFO Dive] Auditors’ use of video, GPS, smart glasses and other technologies that enable remote work is poised to increase now that the advances have been tested during the pandemic, Julie Bell Lindsay, executive director of the Center for Audit Quality, told CFO Dive last week. Combining video with GPS technology so auditors can conduct inventory observations without having to go on-site has been under development for years and signals the direction the auditing profession wants to go in, Lindsay said.

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