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Monday Morning Accounting News Brief: Bad Audit Haunts EY; Big 4 RTO in India; Why Can’t PwC Hire?? | 3.20.23

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Hello and happy Monday. Or just Monday, I’m not here to force emotional responses. Here are a few things going on in our little corner of the world.

From Forbes’ America’s Best Management Consulting Firms: For the second year in a row, both Bain & Company and Deloitte were the most-recommended consultancies, with star ratings in all 32 categories. Deloitte being the only firm to receive 4 and 5 stars in each. They were followed by Boston Consulting Group and McKinsey & Company, with star ratings in 31 categories. Accenture received the most 5-star ratings, with 25.

The Ghost of Audits Past is haunting the EY split:

EY’s plans to split its auditing and consulting arms have been dragged into a $2.7 billion lawsuit brought in London by the administrators of troubled hospital operator NMC Health PLC over concerns EY would be unable to pay if it loses the case.

“NMC will be aware from press coverage … that the potential separation under consideration is paused,” the document said. EY did not immediately respond to a request for comment on the document.

NMC, which sued EY last year for allegedly failing to identify that NMC’s financial statements were materially misstated between 2012 to 2018, is asking for a court order requiring EY to provide details of the potential split.

Its lawyer Simon Salzedo said in court filings that NMC is concerned that the proposed separation would “reduce EY’s assets and future income”, and that EY would be unable to pay $2.7 billion if NMC is successful at trial.

However, EY – which denies any breach of duty to NMC – says it has already agreed to provide relevant information about the potential split to NMC.

Here’s some good anecdotal news. IT’S ABOUT GODDAMN TIME

In India, Big 4 firms want their (outsourced) people to get back to the office:

The India-based back-offices of at least two of the Big Four professional services firms have advised select teams to return to offices, indicating that they could be transitioning to a hybrid workplace model in the near term.

EY Global Delivery Services (EY GDS) and KPMG Global Services (KGS) employ around 50,000 people between them in India, providing services to the member firms of their parents, EY and KPMG, globally.

Both EY GDS and KPMG have sent emails asking specific teams and newly joined employees to “return to office”, people in the know said.

KGS in an email asked its consulting teams to return to work from physical offices for at least two days a week from April 3. ET has seen the mail.

KPMG Canada reports on the state of “the great green transition” up north:

Most medium-sized businesses in Canada are calling for additional incentives to help with the green transition in the upcoming federal budget, according to a survey by KPMG Canada on Wednesday.

Out of the 505 medium-sized enterprises it surveyed, 80 per cent are calling for additional tax incentives and investment tax credits to help make it more affordable to adopt clean technology, and compete with green tax legislation in the U.S. and European Union.

“Canada’s business leaders are ready to make the green transition but need government to create a more supportive environment, including further tax relief to help them transition away from carbon-intensive products and invest in clean energy and net-zero technologies,’’ Lucy Iacovelli, Canadian managing partner for tax at KPMG Canada, said in the press release.

Wanted to write about this but it seems the AICPA has taken the link down. What’s up with that?

It do be like that.

Meanwhile, across the pond:

In October 2022, professional services firm Deloitte introduced a flexible pension policy that gave its 22,000 UK employees more control over their finances, while still centring the importance of retirement savings.

The policy allows staff to receive a cash payment in place of their pension contributions, in order to help people meet immediate financial needs.

However, rather than simply facilitating large numbers of opt-outs, the new policy was designed to be proactive and education-focused.

Will Aitken, director at Deloitte, says: “Deloitte’s people now have the opportunity to take even greater control over their finances. We deliberately structured the new policy to be more pro pensions than it was.

“Whereas previously people opted out and stayed out of pensions for three years, now we automatically enrol them back into pensions annually; although they have still the option to opt out again.”

This headline means something different in Ghana: “PwC employees engage adolescent girls in Jamestown

Female employees of PwC Ghana, as part of activities to mark international Women’s Day, (IWD) last Friday interacted with adolescent girls from two schools in Jamestown, a suburb of Accra.

The event which was attended by about 100 girls from the Accra Sempe Basic School and Accra Royal School focused on menstrual and personal hygiene, staying safe on the Internet, choosing careers and financial literacy.

Some other stuff:

Have a good one! Hit me up if you see anything interesting.