Deloitte & Touche LLP partners and staffers failed to make financial disclosures required to ensure the independence of their audit work, according to new details from the firm’s 2018 PCAOB inspection. [Bloomberg Tax]
Britain’s accounting watchdog said on Monday it will monitor whether auditors were making spot checks on their compliance with environmental, social and governance (ESG) reporting requirements in company audits. Regulators across the world are seeking to prevent ‘greenwashing’, or exaggerated sustainability claims from companies to attract investors. The Financial Reporting Council (FRC) said it will continue to pay attention to work by auditors on climate-related risks faced by the companies whose books they check. [Reuters]
ChatGPT was prompted to write an article for Accounting Today about why it is not a threat to accountants: While AI can process vast amounts of data at a rapid pace, it is not capable of the critical thinking and decision-making that human accountants are trained to do. The field of accounting requires a deep understanding of complex financial regulations and laws, as well as the ability to navigate ethical dilemmas. These are skills that AI simply cannot replicate. [Accounting Today]
EY came close to discovering fraud at the heart of Wirecard in 2016, when the collapsed payments firm’s trustee in Singapore accidentally told the auditor the truth, stating he did not hold any money on its behalf. At the time, Wirecard’s accounts fraudulently stated that Citadelle Corporate Services in Singapore oversaw escrow accounts in Asia that held about €150mn in cash. These escrow accounts were at the centre of the Wirecard fraud. Purportedly set up in 2015, the company said they held cash generated by its outsourced operations in Asia. [Financial Times]
The man who led the Tax Office’s crackdown on multinational profit shifting says revelations about the PwC tax leak offer a “once-in-a-lifetime” opportunity for the agency to “get rid of the drivers of tax planning” by targeting accounting firms that provide aggressive taxation advice. As the former longtime Australian Tax Office deputy commissioner charged with dealing with multinational companies, Mark Konza was on the front line of the battle to stop aggressive tax advice by big four firms that was costing the taxpayer billions in lost revenue. He said the major accounting firms needed to win back the ATO’s trust by helping officials identify loopholes rather than advising clients on how to exploit these gaps. [Australian Financial Review]
One-third of Gen Zers in a recent KPMG survey of 5,700 UK adults said they’d rejected a job offer because they didn’t like a company’s green credentials. [INSIDER]
The accounting scandal that led to a $4 billion hole in the balance sheet of major Brazilian retailer Americanas SA centers on a common funding tool with notoriously opaque reporting: supplier finance. Americanas, which nosedived into bankruptcy protection last week, is an extreme example of how the arcane practice, also called supply-chain finance or reverse factoring, can take advantage of loose accounting rules to flatter a company’s balance sheet. The process involves a bank or third party paying a buyer’s suppliers at a discount earlier than they would be otherwise. [Bloomberg Law]
The IRS has released new guidance for an accounting method real-estate developers can use to determine when common improvement costs can be included in the basis of a project’s individual units. [Bloomberg Tax]
A professor writes: There are probably many factors at play, but one significant reason might be the increasing number of opportunities out there for new hires. There are so many new roles in the tech, banking, finance and other industries in which new hires are receiving higher entry-level pay than they would at a CPA firm. Another factor might involve the view that some think automation is going to make accountants obsolete, thus students believe that accountants now have less job security. As a professor who works with accounting students at Columbia College on a daily basis, I see this trend first hand. Students have certainly been more interested in obtaining roles outside the traditional tax or audit route. I have had only one or two students interested in working for a CPA firm the last couple of years. Although that is common at a school this size, it did seem that I had more students interested in those traditional roles in prior years. I even had a senior accounting student tell me he doesn’t want to do anything in accounting at all! [Columbia Daily Tribune]
A 26-year-old accountant from Delhi was arrested for allegedly stalking and harassing his ex-fiance online by creating her fake account on Instagram and posting her private pictures on his WhatsApp status with vulgar comments to defame her, police said on Monday. [ThePrint]
In a new conversation with ThinkAdvisor about the CPA talent shortage, Ryan Losi, an executive vice president of the boutique certified public accounting firm PIASCIK, said the situation is likely to “get a lot worse before it gets a lot better.” “I do think the CPA talent issue is a major emerging problem, both for CPA firms but also for financial planning professionals and closely regulated corporations,” Losi said. “All of the managing partners of the big CPA firms are out there talking about this. You hear about this concern at all the big meetings of accounting organizations. It’s a reality.” [ThinkAdvisor]
Introduced in early January, the GOP tax proposal would eliminate income, payroll, estate and gift taxes, to be replaced with a 23% national sales tax. The proposal also aims to decentralize the IRS by slashing the agency’s funding, relying on individual states to administer the levy. [CNBC]
He isn’t wrong:
The CPA shortage has been around for 20 years. Not saying its a hoax.. like climate change which has been around since I was born. But… “CPA shortage” has been the mantra since the 90s.
— Daniel Skipworth, CPA/CVA (@Skipworth_CPA) January 29, 2023
Someone quit their job at Deloitte without notice (“Happiest day of my life!”), posted about it on Reddit, and included this video in their post.
One of these days I’m gonna’ blow my top
And that sucker, he’s gonna’ pay
Lord, I can’t wait to see their faces
When I get the nerve to say
Take this job and shove it
I ain’t working here no more
Johnny also has a track on GTA V’s Rebel Radio.
One quick editorial item: we’re working on a piece about your career at various stages in your life. Right now I’m looking for current and former public accountants in their 40s and 50s to talk about their experiences and any specific challenges they’ve encountered related to age. If you are open to answering some quick questions, gimme a shout. Thanks to the folks who have already agreed to participate.
That’s all I’ve got for today. Reach out if you come across anything interesting and have a wonderful week.