The big story over the weekend, and one I’ll probably be writing a biased editorial article on later because I unapologetically hold the opinion that the PCAOB is 99% tedious paper-pushing, comes from Financial Times:
Republican lawmakers are planning to shut down the US audit regulator, which was founded in the wake of the Enron scandal more than two decades ago, as part of a reform package designed to deliver Donald Trump’s deregulatory agenda.
The proposal to eliminate the independent Public Company Accounting Oversight Board was published late on Friday by the leadership of the House Committee on Financial Services, for inclusion in the giant tax and spending bill being considered by Congress.
Oh. There’s a whole bill. Well I better read it before I say more. We don’t base whole-ass opinions on a headline and a few lines of text over here.
I stand by what I said about the PCAOB.
A CPA Journal article asks “Did the CPA Evolution Leave Educators Behind?” Authors Walied Keshk, PhD, CPA and Edward J. Lynch, PhD, CPA did a little research on the ground to answer the question:
During the 2024 spring semester, the authors surveyed 97 accounting faculty members from 45 different universities across 21 states. Among other things, the survey inquired about respondents’ readiness to adapt their courses and teaching methods to the new CPA exam requirements. Surprisingly, roughly one-third of the faculty members responded that they do not feel fully prepared. Faculty members who believe they are not prepared (as well as some who do believe they are prepared) responded that they need additional resources to help them prepare their students for the new CPA exam and careers in public accounting. In addition to the survey results, this article reports the additional resources suggested by faculty to fully adapt their courses and teaching methods to the new CPA exam, including how they believe CPA firms can assist.
An interesting bit that by no means reflects the majority view of respondents:
Fourteen faculty members (including 0 adjuncts) suggested that public accounting firms share training materials and ideas for class activities and assignments. Specifically, faculty members would like firms to share materials related to the topics that are now emphasized in the new CPA exam, such as SOC reports, data analytics, and technology; as well as the skills being tested, such as critical thinking, analytical, and evaluation skills. Again, numerous accounting firms have already been sharing materials with educators for many years, but this survey indicates that faculty would like to see materials focused on topics now emphasized on the new CPA exam.
In addition, 13 faculty members (including 1 adjunct) suggested that accounting and auditing professionals work more closely with faculty members to update the accounting curriculum. This could be implemented in numerous ways. For example, many accounting departments have local accounting firm partners on their advisory boards and they meet regularly to discuss curriculum changes, scholarships, and student recruitment. Furthermore, accounting and auditing professionals can participate with faculty members in designing relevant class projects, attending student presentations, and evaluating students’ written work.
Reminder to academics: you all hold the keys to firms’ precious pipelines. Make ’em work for it!
Deloitte surveyed 200 CFOs across five sectors who work at organizations with at least $1 billion in revenue and found employee engagement (50%) and lack of skilled talent (45%) are among their biggest workforce challenges.
The situation could intensify as increasing numbers of experienced finance employees reach retirement age and the number of college graduates with accounting degrees continues to decline. When we asked CFOs to name their biggest worries related to pipeline concerns about accountants (figure 1), increased workload for existing employees was the top response (44%). Loss of credibility with institutional and private investors was the second most cited concern (42%) about pipeline issues for accountants. Erosion of board confidence in finance (41%) was third on the list.
An employee stole more than $100,000 from a Salt Lake County liquor store over a 3½-year period, according to a report from the state auditor that the Utah liquor commission’s chair described as “scathing.”
The audit’s findings included the revelation that a liquor store employee stole $112,809 from an unidentified liquor store in Salt Lake County between January 2021 and June 2024.
At the New York Stock Exchange, Diasio outlined how EY teams are leading the charge in artificial intelligence (AI) transformation. “Before we advise our clients, we needed to introspect and transform our own business practices,” he stated. This client-first approach has led to the creation of a comprehensive playbook designed to guide organizations through their AI initiatives, so they are equipped to navigate the evolving landscape.
One of the standout revelations from this journey was the essential role of executive engagement. Diasio noted, “It took significant involvement from our executives to not only understand AI but to be prepared to implement it effectively.” This proactive engagement is vital for organizations aiming to leverage AI’s potential while addressing its inherent challenges.
He says 2025 is the year “we will see AI systems that can take actions on behalf of users.”
About a week after Jackson city leaders said it could be time to bring on a new CPA firm, the city’s current CPA says the problem is not with him, but this time with JXN Water.
On Thursday, the City Council’s Finance Committee heard from Scott Hodges, a partner with Tann, Brown & Russ, to discuss the 2023 Comprehensive Annual Financial Report.
He told members that he still has not gotten the data from JXN Water to complete the audit.
A key US banking regulator unveiled settlements with two former Wells Fargo & Co. auditors who were alleged to have ties to the bank’s systemic sales-practice misconduct, according to a statement Friday.
The orders resolve actions the Office of the Comptroller of the Currency initiated against David Julian, former chief auditor, and Paul McLinko, former executive audit director. The regulator assessed a $100,000 civil money penalty against Julian and a $50,000 civil money penalty against McLinko.
In 2020, Wells Fargo agreed to pay a $3 billion fine related to its 2002-2016 scheme to artificially inflate sales numbers by opening millions of accounts without customers’ knowledge or consent.
OK I think we’re done here. As always, please email or text if you have a tip, see an interesting story, have a topic you think we urgently need to discuss, or just want to complain. Anonymity is assured.
Be well, go out and touch some grass, and have a great week!
Nokia, Microsoft Join Forces to Challenge Apple, Google [Bloomberg]
Nokia Oyj, the world’s biggest maker of mobile phones, said it’s forming a software partnership with Microsoft Corp., betting that together the two companies can challenge Google Inc. and Apple Inc. Nokia fell as much as gest drop in a almost 10 months, after its plan to make Microsoft’s Windows its primary software was seen as a sign of the extent of its troubles taking on Apple’s iOS and Google’s Android platforms. “It’s a clear admission that Nokia’s own platform strategy has faltered,” said Ben Wood, a London-based analyst with CCS Insight. “Microsoft is the big winner in this deal, but there are no silver bullets for either company given strength of iPhone and Android.”
Seven Networking Event No-Nos [FINS]
Large-scale job-search networking events can help you bolster your rolodex and make connections that can land you a job. Coming across as both professional and engaging to those new contacts, however, isn’t as simple as it may seem.
Obama’s Fannie, Freddie plan may boost mortgage rates [WaPo]
The Obama administration proposed raising fees for borrowers and requiring large down-payments for home loans as part of a long-term effort to reduce the government’s outsized footprint in the housing market, but warned that these moves could increase mortgage rates and potentially reduce the availability of the 30-year fixed rate mortgage, a mainstay of American housing for decades.
End of the road for ‘American Idol’ CPA [CPA Success]
I’m devastated. On the bright side, I don’t have to worry about listening to Steven Tyler feign insults about lackluster performances anymore. As for Steve, he’ll always have auditing.
Excel FAQs: Hours and minutes [AWUK]
News you can use.
Upload Data to Aid Form [WSJ]
And a little more, for any of you filling out a FAFSA.
British Pubs Argue for Freeze in Beer Duty [Tax Foundation]
Brits don’t like their pints taxed. Just like us!
A Wells Fargo Exit Puzzles [WSJ]
The circumstances surrounding Mr. Atkins’s Tuesday departure were as puzzling to employees and regulators as they were for analysts and investors. In a news release about Mr. Atkins’s exit, the company said only that it had nothing to do with the company’s “financial condition or financial reporting.” The full details were kept in a very small circle at the top echelon of the company, people familiar with the matter said. On Tuesday afternoon, some of the bank’s senior executives seemed unaware that Mr. Atkins was preparing to leave, according to people familiar with the matter. Industry regulators and some of the bank’s top advisers also were taken by surprise, these people said.
‘Audit must change’ – Barnier [Accountancy Age]
Internal markets commissoner Michel Barnier […] left the audit profession in no doubt that reform was on the way when he spoke at a Brussels conference on the subject and said: “One can no longer say ‘Move on, there is nothing to see’ on audit issues.”
Speaking yesterday he added: “The status quo is not an option for the auditing world. It’s not about changing for the sake of change, but to reply to very real needs which we can no longer ignore.”
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Nokia, Microsoft Join Forces to Challenge Apple, Google [