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Monday Morning Accounting News Brief: EY Embarrasses Itself (Again); Archaic IRS Tech; Partners Battle It Out | 2.27.23

orange cat in embarrassed pose

In Australia, EY is still bungling this one up:

EY accidentally leaked the personal details of current and former employees while trying to launch a massive review into the firm’s workplace culture.

The Big 4 Accounting firm announced the independent review following the tragic death of EY worker Aishwarya Venkatachalam, 27, who fell to her death from the 11th floor of the company’s Sydney office in August last year.

The incident sparked a furious backlash against EY’s intense work culture as Ms Venkatachalam’s grieving friends and family claimed she had been bullied and racially insulted while working there.

While organising the review, a series of emails from EY were published online that revealed the firm had mistakenly leaked the email addresses of staff.

One screenshot from an employee showed EY desperately trying to recall the email with the leaked addresses multiple times in the space of 18 minutes.

“IRS tech is so ‘archaic’ the agency struggles to find people to work it” from The Washington Post:

The Internal Revenue Service, which funds nearly everything the federal government does, uses information technology that is creaking with old age. Some of its computer systems are so antiquated, a federal watchdog complains, that it’s difficult to find people who know how to work them.

In one example, a Government Accountability Office report released this month notes the tax agency’s use of an “obsolete programming language” called COBOL, which could lead to “difficulty finding employees with such knowledge,” adding this “shortage of expert personnel available to maintain a critical system creates significant risk to an agency’s mission.”

That means, the report continues, the “IRS will face mounting challenges in continuing to rely on a system that has software written in an archaic language.”

GAO deemed 33 percent of IRS applications, 23 percent of software and 8 percent of hardware as “outdated but still critical to day-to-day operations.” This includes applications 25 to 64 years old and software up to 15 versions behind. “These legacy assets will continue to contribute to security risks, unmet mission needs, staffing issues, and increased costs,” GAO declared.

“A private company with tens of millions of customers would go belly up if their information technology was older than the CEO’s parents,” said Tony Reardon, president of the National Treasury Employees Union, which represents IRS employees. “Yet that is what the IRS deals with every day.”

In an article titled “Interactive Auditor-Client Negotiations: The Effects of the Accumulating Nature and Direction of Audit Differences” a team of researchers further examined what happens during these discussions and how the negotiations can affect the magnitude of audit adjustments made to financial statements. The study is authored by Richard Hatfield from the University of Alabama, Curtis Mullis of Georgia State University, and Ken Trotman from the University of New South Wales.

From FloQast:

Six in ten (63%) U.K. accounting and finance professionals are concerned about the accuracy of their company’s monthly financial statements; one in three U.K. companies have less than six months cash runway; 87% of accounting and finance professionals report greater stress at month end, with 69% concerned about burnout.

Owner of Buffalo CPA firm denies claims of financial, workplace wrongdoing from The Buffalo News:

The two partners who own a Buffalo-based accounting firm are waging a bitter fight over the company’s future.

The fight has moved into a courtroom amid accusations of fraud and sexual misconduct by one and a claim that the matter is nothing more than a power grab from the other. And following an appearance before a judge last week, both sides were claiming victory.

Daniel Garigen, who holds a 40% stake in Dansa D’Arata & Soucia CPAs LLP, has accused managing partner Eric Soucia of financial and workplace misconduct in a lawsuit filed this month in state Supreme Court that seeks to force Soucia to give up control of the company.

Garigen’s suit accuses Soucia of potentially costing the firm up to $750,000 because of mismanagement of the company’s 401(k) account and, additionally, of harassment and other mistreatment of Dansa D’Arata employees.

Sitao Xu, chief China economist and partner at Deloitte LLP, discusses his views for China’s economy post reopening after Covid-19. He speaks with Bloomberg’s Haidi Stroud-Watts and Shery Ahn on “Bloomberg Daybreak: Asia.

Some more stuff:

That’s all I’ve got for now. Go forth and account.