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Monday Morning Accounting News Brief: Details on Grant Thornton’s PE Deal; What Is ‘Presented Fairly’ Anyway? | 5.13.24

dog reading a book in bed

Hey, people. Monday! Woo. Let’s get this over with.

Look out, Big 4. AT&T is coming for your recruits:

AT&T Woos Accounting Students, Bypasses Big Four Training Ground

AT&T Inc.’s top accountant is confronting a competitive job market by rethinking the company’s traditional reliance on large CPA firms as a training ground for new hires, taking her recruiting pitch on-campus instead.

Sabrina Sanders, AT&T’s chief accounting officer, is targeting graduate students for the company’s two-year-old, in-house training program. It’s a shift in strategy from the telecom giant’s past practice of hiring alumni from the biggest accounting firms, where young accountants often start their careers before turning to corporate jobs that typically offer higher pay and more predictable schedules.

“With our world rapidly changing, it’s just one of the ways that we’re trying to respond to everything going on across the industry,” Sanders said in an interview with Bloomberg Tax. She’s spent more than two decades at AT&T, steadily working her way up to the C-suite from a role as an accounting manager.

On June 4, Cherry Bekaert is holding a Employee Retention Credit updates webinar. Just want to add this screenshot.

Deloitte inserts itself into some Oregon political drama, an extensive Willamette Week report:

State Invoices Show Oregon’s Favorite Fixer Playing a Key Role in Mopping Up Measure 110

In 2022, Oregon state officials faced a growing mess. Voters had decriminalized small amounts of hard drugs and, on the same ballot measure, directed state officials to funnel hundreds of millions of dollars to new addiction treatment programs. Those Measure 110 treatment dollars couldn’t come at a better time, since fentanyl was rampaging on Portland’s streets.

The problem: That funding wasn’t getting out the door.

So the Oregon Health Authority, the agency in charge of the funds’ distribution, turned to its favorite fixer: Deloitte, the British consulting firm that had previously mopped up the Cover Oregon mess in 2014. (Another consultant, Oracle, was paid $240 million to build an insurance marketplace that didn’t work. Deloitte’s replacement was glitchy, but at least it functioned.) This time, Deloitte sent a team of dozens of young consultants who got to work triaging complaints from fed-up recipients of Measure 110 grants.

WW issued a public records request to review the Oregon Health Authority invoices and found:

[T]he contracts list over a dozen broad tasks, from coordinating community events to staffing phone lines, but offer few details about why the state needed high-priced consultants to do them.


The invoices break down costs by broad topic area and role, which range from “analysts” being paid $245 per hour to top directors earning $395 per hour. The bulk of the work on the behavioral health contract, which was signed in June 2022, went to “business analysts” earning $280 per hour.

EY Canada has named a new Chair and CEO. This is the first I’m noticing the acknowledgement of First Nations peoples in their press release dateline.

Anyway, Alycia Calvert’s CV:

Calvert has been with EY for more than 25 years and a member of the EY Canada Executive Committee for ten years, most recently as the Chief Operating Officer where she was responsible for achieving long-term value and sustainable growth for the Canadian business across service lines, functions and geographies. Previously, Calvert served as Managing Partner for Markets and Accounts, as well as Managing Partner for the Tax practice. In 2018, she was recognized as a Fellow by CPA Ontario.

PCAOB Chair Erica Y. Williams delivered an update on proposed new standard General Responsibilities of the Auditor in Conducting an Audit (AS 1000) this morning:

In order to clarify that the standard’s introductory language does not create any new legal obligation for auditors, we revised the introductory paragraph from what was proposed to clarify that we are expressing a longstanding principle of public accounting — specifically, that the auditor’s responsibility to protect investors transcends the auditor’s relationship with management and the audit committee of the company under audit. We have further clarified that this responsibility provides the foundation for an objective and independent audit.

We moved the requirements addressing the engagement partner’s responsibility for due professional care into a separate paragraph to highlight the important role engagement partners play and to help draw a distinction between the responsibilities applicable to all auditors and those that are incremental for engagement partners.

We included additional clarification that an auditor’s professional skepticism extends to other information that is obtained to comply with PCAOB standards and rules. This would include, for example, information obtained by the auditor from other auditors in a multilocation audit, to comply with the requirements to properly complete Form AP.

Our proposal to clarify what is meant by the phrase “presented fairly” through amendments to AS 2810, Evaluating Audit Results, was not intended to change the auditor’s existing responsibilities for evaluating whether the financial statements are presented fairly in conformity with the applicable financial reporting framework. However, several commenters interpreted the proposed requirements differently. As such, we made changes to address this concern.

And, we are providing a phased-in approach related to the requirement to assemble a complete and final set of audit documentation for retention not more than 14 days after the report release date. This will give smaller firms additional time to comply with the new documentation completion deadline.

The standard: General Responsibilities of the Auditor in Conducting an Audit (AS 1000)

EY pushed out an ad singing the praises of its global alumni network. In it, Trent Henry (EY Global Vice Chair – Talent) says:

I’m always proud to hear of former colleagues finding success in roles outside of EY – and even more so when someone leaves for a role and then returns to us. Like Antonio Lage, who left EY audit practice only to rejoin a few years later and eventually become Latin America’s Deputy Strategy and Transactions Managing Partner and Strategy and Transactions Managing Partner at EY Brazil. Each year, a strong proportion of EY leavers come back to us because we stay in touch and continue to share learnings, better services, connections and experiences — even long after they’ve departed from the organization. In our last fiscal year, more than 16% of our experienced global hires were EY alumni. In the first half of this year, we’re at 15%.

Ye old Big 4 revolving door is still in effect.

PwC’s LA office will soon have a photogenic new managing partner:

Amid broader leadership shuffling and an organizational restructuring, accounting firm PricewaterhouseCoopers has named a new Los Angeles managing partner to lead its 2,000 employees and 160 partners in the city.

Andrew Sofield will replace Stefanie Kane as the accounting firm’s market lead this month. Kane, who helmed local operations for seven years, now leads the firm’s U.S. tech, media and telecommunications strategy.

Sofield, who has resided in Los Angeles for nearly two decades, has been with the firm for more than 14 years. Most recently, he was the U.S. Southwest advisory leader.

Asked about how PwC’s restructuring will affect the LA office he said “I don’t really think it will change too much day to day. Our tax professionals are already serving our clients in the same way that they’re going to continue to serve our clients going forward.”

He doesn’t have a headshot on LinkedIn I can snag so here, take this instead.

Also in PwC news, they’ve apparently squashed a rumor that the firm will be pulling out of China:

Regarding the rumors such as “Chinese operations may be suspended,” in the early morning of May 10th, PricewaterhouseCoopers (PwC) issued a statement on its official WeChat account, stating that it had noticed false information about PwC spreading on social media platforms. These false claims falsely stated that they came from official channels within PwC. This information did not come from PwC, and PwC’s trademark was also used without authorization. The content is all untrue information.

PwC stated that it takes this matter very seriously and will deal strictly with unauthorized use of trademarks and fabrication of false information. They have requested relevant parties to delete the related information and will take other necessary actions accordingly.

Seems there’s been a lot of ‘unauthorized’ stuff happening over there lately. See: China Evergrande: PwC refutes letter claiming fraud tied to indebted developer, vows to investigate ‘fabricated’ claims

And one more PwC story. Last week, PwC Australia CEO Kevin Burrowes expressed a desire to move on from the tax scandal that’s been casting a dark, stinky shadow over his firm for more than a year (see: Let’s Brainstorm Shopping Ideas For Underwear Strong Enough to Accommodate This PwC CEO’s Massive Balls). We found this ridiculous and, frankly, ballsy but it’s looking like he might get his wish.

ABC News Australia:

Bureaucrats in charge of the nation’s finances have opened the door to giving scandal-plagued consulting firm PwC Australia new taxpayer-funded contracts by Christmas.

A missive published by the Department of Finance says PwC Australia has agreed not to bid for work until December 1, 2024.

But the news came the same day a company it owns 49 per cent of won more than $700,000 in new taxpayer-funded work.

“It’s a sign that they’re out of the freezer,” says international governance expert Dr Andy Schmulow, who has followed the issues at consulting firms for years.

An update on the Grant Thornton private equity deal from Pitchbook:

Timing is accelerated on the $1.8 billion term loan B for Grant Thornton, and commitments to the deal, originally due May 16, are now due by 5 p.m. ET on Tuesday, May 14, according to sources. No other changes were announced.

Corporate and facility ratings are B/B2, with stable outlooks, and there is a recovery rating of 3 on the loan from S&P Global Ratings. Grant Thornton Advisors, LLC is the borrower on the term loan.

Proceeds from the deal will be used to finance the acquisition of the company by an investor group led by New Mountain Capital. In addition to the TLB, the buyout will be funded with $1.4 billion of new cash equity from the investor group and $950 million of rollover equity, according to Moody’s. The company will have a $375 million revolving credit facility due 2029 with a springing first-lien leverage covenant. The transaction was announced in March and is expected to close in the second quarter.

Forbes wants you to meet America’s Top 200 CPAs 2024. Author Steel Rose, CPA starts the article with a love letter to the protectors of capital markets:

“I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants,” Elvis Presley once said. And who can argue with the man, knowing what we now know about the financial skullduggery of his manager, Tom Parker? Indeed, CPAs are often called upon to fill the role of separating financial fact from fiction. A reliable CPA is a bodyguard for your accounting. And as with a bodyguard, the time to discover that you need one is not when it’s already too late.

This is why Forbes has compiled its inaugural compendium of the 200 finest practicing CPAs in America, following almost a year of research to ensure this selection represents a new standard of excellence for the best in the profession. Indeed, the job of curating the top 200 CPAs from a sea of talent was a task that echoed the very principles on which this profession stands—most of all, a fierce commitment to the staunch independence that delivers reliable financial data, upon which the American economy resides.

That’s all for now, it’s a bit quiet out there as far as scandalous gossip goes. Let me know if you see anything of interest by text or email, don’t worry too much about how newsworthy you think I think it is. My standards are low.