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Monday Morning Accounting News Brief: Consulting Really Sucks Right Now; Inside a PwC Leadership Race | 3.25.24

dog peacefully asleep in bed

Hey. Hope everyone is well and ready to tackle another week. I’m in gardening mode so I’ll be unusually happy for at least the short-term until my petunias start dying off or something. Now’s the time to ask me for favors. I might even answer some of the millions of idiotic press releases I get in my inbox.

ICYMI: Last weekend’s discussion item: Does leadership even know what gen AI is? Are we to believe boomer CEOs have any idea what they’re talking about when 95% of them say they’re adopting generative AI in their business in the next 12 months? Using ChatGPT in lieu of Google doesn’t count.

The consulting business is rough right now.” Yeah, no shit.

Times are tough for the consulting business.

The professional services firm Accenture has cut its revenue forecast for 2024, according to its quarterly report. The firm previously said it was expecting revenues to grow between 2% and 5% this year but is now expecting a growth rate of about 1% to 3%.

In a call, Accenture’s chief executive, Julie Sweet, told analysts that clients continue to cut back.


Accenture reported that new bookings in generative AI brought in over $600 million in the most recent quarter and $1.1 billion through the first half of the fiscal year.

McKinsey said it’s also seeing significant revenue related to generative AI, The Wall Street Journal reported. Sven Smit, a senior partner at McKinsey, told The Journal that there is demand for using generative AI for both productivity and restructuring workforces.

“Consulting firms are cutting projections and tightening their belts as demand for their work slows,” Business Insider March 23, 2024

Perhaps related to this, perhaps not, Deloitte Australia is making some cuts. Cuts that were promptly minimized by a Deloitte spokesperson.

Deloitte has made a “small number of redundancies” across the firm’s national operations, following suit from its fellow Big Four peers and on the back of a major restructure.

A Deloitte spokeswoman said on Monday the job cuts had been in response to “significant structural shifts in client need and demand”, although it is not clear how many heads are going to roll.

“The current market and economic conditions are challenging and we are seeing some meaningful changes in how our clients are buying some of our services,” she said.

“Deloitte becomes latest professional services firm to reduce headcount amid huge global restructure,” The West Australian March 25, 2024

I thought Deloitte’s magical AI job-saving technology was supposed to prevent exactly this thing from happening.

The Telegraph wrote a big long thing about PwC UK’s leadership race.

When political tensions run high and the House of Commons descends into infighting, leading executives like to emphasize that their world is different.

Populism has no place in professional life, they say. Such grubby electioneering is beneath the experts who manage the nation’s blue chip companies – and who do their books.

LOL tell that to PwC US and the senior partners who ran a really grimy election to replace Tim Ryan.

At PwC, about 1,000 partners will be hoping – perhaps nervously – that they are right. A leadership election is looming at the Big Four accountant’s UK practice, and the battle lines have already been drawn.

“Our job is to serve the brand, the business, for the future […] This firm is 175 years old. It’s all about legacy,” Kevin Ellis, the current holder of the position, told the Leadership Unplugged podcast last month.

However the 60-year-old is judged by history, his colleagues’ thoughts are already focused on who will replace him in charge of the partnership’s UK and Middle East offices.

The official shortlist of candidates is expected to be announced at the start of next month, after being finalised by an independent supervisory board made up of PwC partners.

“Inside the race to run PwC,” The Telegraph March 25, 2024

EY has a tech update:

According to the EY report, the top 10 opportunities in technology for 2024 are:

  1. Inject GenAI into digital transformation strategies and establish a “control tower”
  2. Experiment with GenAI in targeted front-office and back-office use cases
  3. Invest in new forms of digital infrastructure in the burgeoning “edge economy”
  4. Establish additional supply lines in emerging markets
  5. Shape corporate investment strategy around the AI roadmap
  6. Harness platform business models to industrialize and scale advancing technologies
  7. Establish proactive and holistic responses to new and forthcoming tax burdens
  8. Prioritize energy efficiency of data center in environmental efforts
  9. Invest in advanced risk tools and revisit trade-offs between costs, risks, resiliency and agility
  10. Deploy advanced technology to reduce current and future cyber risks

“In 2023 the technology industry navigated global economic headwinds and geopolitical tensions, while building widespread expectation around the potential of AI,” said Ken Englund, EY Americas TMT Leader. The opportunity for the year ahead is clear. By putting AI at the center of their strategies, technology businesses could leapfrog competitors who were previously ahead, not only by accelerating their transformation journeys but also repositioning operations to capitalize on rapidly emerging technologies and business models.”

I dare you guys just once to use plain English in these things.

I don’t drink anymore these days but boy did I get excited when I saw this in Google News. Sadly it’s missing a colon (as in PwC: Wine contributes blah blah), not a story about how PwC has its own wine.

This episode of Blake Olivier and David Leary’s The Accounting Podcast popped up in my recommended on YouTube this morning, I think because my rugs are dirty.

The Financial Reporting Council, audit watchdog to those zany Brits, said today that it won’t be able to increase headcount just yet because something something laws.

Britain’s accounting watchdog said on Monday it would scrap a planned increase in staff because of continued delay in obtaining new powers to crack down on lax auditors after a string of high-profile company failures.

The collapse of retailer BHS, builder Carillion and cafe chain Patisserie Valerie triggered three government-backed reviews that recommended root-and-branch changes to improve audit quality, including a more powerful regulator to replace the Financial Reporting Council (FRC).

A draft law has yet to been proposed to parliament to implement the reforms.

“Given the delay to legislation that would have expanded its remit, the FRC has decided against the previously planned 16% headcount increase to 590 staff,” the watchdog said on Monday.

Headcount would remain flat at around 506 in 2024-25 to avoid unnecessary cost increases for levy payers, the FRC said.

“Britain’s audit watchdog pauses hiring after delay in new powers,” Reuters March 25, 2024

FRC fines have almost doubled in two years.

And the Financial Conduct Authority, regulator of financial services in the UK, is being criticized for its hiring of a chief internal auditor who may be too embedded to be impartial:

The Financial Conduct Authority hired a chief internal auditor who does not have audit qualifications after advertising the role for only five working days, leading to claims that the recruitment process had been rigged in favor of an internal candidate.

The appointment of Robin Jones, who has spent more than two decades working at the City regulator, has been greeted with surprise and anger in the internal audit profession.

It can now be revealed that the FCA posted the role, which had an advertised salary of up to £220,000, on Monday, October 30, with a closing date of Sunday, November 5. Recruitment experts said senior roles should typically be advertised for four to six weeks.

A former FCA worker who has asked MPs on the Treasury select committee to look into the appointment claimed that it was “common knowledge within the regulator that the FCA will on occasion rig a recruitment process to stack the odds in favour of a preferred internal candidate”.

The former worker, who spoke on condition of anonymity, alleged: “They do this by adding ‘essential skills’ to the job specification that the preferred candidate is particularly strong in and then advertising the role for as little time as possible to minimise the chances of stronger candidates applying.”

“Anger at FCA’s speedy recruitment of ‘unqualified’ internal auditor,” The Times March 25, 2024

The Office of the Auditor General in Michigan is facing a $8.3 million cut to its budget and then this happened:

A new audit of Michigan’s Liquor Control Commission is raising eyebrows in the state government. The report found that the agency was unable to account for a significant portion of its inventory, as much as 30% in one warehouse.

“This is concerning,” said Rep. John Roth, R-Interlochen. “Probably the most concerning thing is we’re just hearing about it now.”

The report found that the MLCC lost track of nearly a million dollars in alcohol in 2022, a finding that’s spurring discussion among lawmakers about oversight in the state government.

But the most striking finding is that the commission was unable to account for over 62,000 bottles of various products in 2022, totaling nearly $1 million.

“Audit finds Michigan Liquor Control Commission lost 62,000 bottles in 2022,” 9&10 News March 22, 2024

Deloitte finds that Gen Z and Millennial drivers in the UK are most likely to favor a subscription service for cars over ownership. What. Also, are we still capitalizing Millennial or nah?

  • One in five consumers of all ages (18%) prefer car subscription service and this interest increases among 18-34-year-olds (28%);
  • Nearly a third (32%) of consumers say they would consider purchasing insurance directly from the manufacturer if given the option;
  • Nearly three quarters of consumers (71%) say they expect to spend less than £30,000 for a new or used vehicle;
  • 46% worried about the lack of public electric chargers.

PwC Australia tries to deflect from them not releasing that tax leak report with the announcement of a new Chief People Officer:

PwC Australia has today announced Karen Lonergan as its new Chief People Officer, as the firm continues to implement the commitments it made to enhance its culture, governance and accountability.

With more than 25 years of experience, Karen has worked for a diverse range of sectors, leading people, culture and engagement teams at a number of iconic Australian organisations. She has implemented transformational programs across a range of business stages and cycles, helping to position large corporations for growth and long-term success.

As a member of the firm’s Management Leadership Team, Karen will play a crucial role in delivering on the commitments the firm made to enhance its culture, as outlined in its Action Plan.

Here’s a fun press release fresh off the wire this morning: A wolf in auditor’s clothing: value-for-money audits are part of plans to gut municipal child care across Ontario, says CUPE

In the Conservative playbook, when outright attacks on public services don’t work, you switch to veiled threats backed up by the consultant class. That playbook is being deployed again in the Ministry of Education’s recent calls for value-for-money audits of municipally run child care centres.

According to child care advocates, experts, and workers, the real purpose of these audits is to justify the closure of municipal child care centres, opening the door for further privatization.

“We’ve seen this before. They talk about an independent third-party review, but we know what that means. They’re going to give fat contracts to consultants from KPMG or Ernst and Young who are going to tell them exactly what they want to hear to further their agenda of cuts,” said Fred Hahn, President of the Canadian Union of Public Employees (CUPE) Ontario. “These audits have been used to justify mergers, amalgamations, and privatization around the province and it’s never been to the benefit of families or workers. And that’s by design. The Ford government doesn’t care about service quality anymore than they care about actual working-class people. It’s just about starving the public sector.”

Well the consultants would probably appreciate the business right now.

And that’s the news for this fine Monday morning. Be good. I don’t mean well, I mean behave yourselves. Shout if ya see anything interesting.