Hi and happy Monday. Hope everyone had a lovely weekend, I spent mine having my spine jumpscared out of my body by all manner of ghosts and malfunctioning hallway lights in Visage. Unreliable home electrical is truly terrifying.
Since it’s the end of the month, I’m going to share the five most-read articles of January for you to catch up on if you’re so inclined.
- 5. To No One’s Surprise Except the AICPA’s, AICPA Membership Is Falling
- 4. SEC Sues Marcum Partner Who Thinks Reviewing the Engagement Team’s Work Is For Chumps
- 3. Accounting Ranks First In Something Good For Once More
- 2. Grant Thornton Gets Downgraded to a Tier 2 Firm, That’s Probably a Good Thing
- 1. EY Is Going on a Hiring Spree in the Philippines
According to a Financial Times story published this morning, RTO isn’t going so hot at the King’s EY.
EY starts monitoring UK staff office attendance with turnstile data
EY has started monitoring UK employees’ office attendance, with swipe card entry data being circulated at senior levels of the firm as some of its staff flout its hybrid working guidelines.
Some partners at the Big Four firm have been shown anonymised “turnstile access” data in recent weeks showing how frequently staff are attending its offices, people at the firm told the Financial Times.
One person said the statistics would be used in parts of the business as a “carrot rather than a stick” to influence teams to comply with EY’s hybrid working guidelines. They added that at least 50 per cent of some teams were failing to meet its policy of being in the office at least two days a week.
NYSSCPA CEO Calvin Harris, CPA said in a column for CPA Journal:
But the winds of change have long been upon us. We are in the midst of a transformation, if not a revolution, whereby the role of an “accountant” is no longer confined to ledgers and balance sheets, but extends to realms previously unimagined. This is part of why New York Governor Kathy Hochul’s recent signing of “non-CPA ownership” into law is such a big deal. We will be representing your interests as we support the state in its implementation. Be on the lookout for more information on this transformative legislation.
More on the New York non-CPA ownership bill.
In the column he referenced this ancient document (August 1993) entitled “The case for non-CPA owners in CPA firms.” You know how much I love my ancient documents! Let’s read a little bit.
Why the Question?
Do firms want non-CPAs to be part of the ownership ranks, or is this strictly a rhetorical question? The answer is non-CPA owners are already a part of the profession, either disguised under the name of principal or some similar title, or wearing the label of partner. This latter situation, as noted earlier, is not prohibited by the AICPA Code of Conduct and exists even though no state licensing board presently officially recognizes non-CPA partners in CPA firms.
These non-CPAs ascended into ownership positions because the professional and business activities of CPA firms demanded that they be there. These non-CPAs are highly educated, motivated, and talented professionals that bring respect, knowledge of other disciplines, and answers to clients and, in some cases, the CPA firms themselves. We are talking about actuaries, engineers, lawyers, managers, and other specialists that are essential for the conduct of successful businesses, including professional firms.
Those opposing non-CPA ownership say that these skills are available in other places to assist clients and CPA firms and that they can be contracted for when needed. This is quite true. And for the smaller practice unit that may be the only practical way to approach it. But for many firms, including many local practitioners, one or more of professional specialties are being called for by clients almost daily. The answer for them is to bring the talent and the expertise into the firm. The result is improved responsiveness and better control. It also provides assurance to clients about the firm’s future ability to meet their ongoing needs.
Clients want assurances that those from the firm attending to their attest needs are licensed, highly trained, and eminently qualified to deliver that all-important attest report in full compliance with professional standards. That will always be the case, and that can not be compromised. But clients seek delivery of specialized services from the CPA firms knowing that they will be provided within an existing framework of quality, professionalism, discipline, and control.
Related opinion piece on non-CPA ownership to chew on:
An unnamed accounting firm discovered a painting stolen by mobsters in the 1960s while doing a bit of cleaning up for the FBI:
An original, “priceless” John Opie painting that was stolen by mobsters in the 1960s was found in Utah and returned to its rightful owner after an investigation that took two years.
An FBI investigation was initiated in December 2021 after an accounting firm was hired to liquidate a client’s property upon his death in 2020 and found the piece of art.
While going through the client’s belongings, the accounting firm discovered the painting, which was appraised to be original artwork that was stolen in 1969.
Tupperware is hanging on by a thread hoping KPMG can keep the business alive:
Embattled Tupperware Brands Corp. has hired KPMG LLP to vet its financial statements almost three months after its auditor of 28 years quit amid a tumultuous period for the food storage container business.
Tupperware hired the Big Four auditor on Jan. 24, it said in a Monday securities filing. PricewaterhouseCoopers LLP, which had audited the direct-sales company since 1995, told the company in October that it didn’t want to continue.
And in other PwC news, that perfect PCAOB inspection score of the past is slipping away:
PwC LLP said Monday that the number of its flawed audits US inspectors flagged more than doubled in 2022 even as the Big Four firm rolls out a series of reforms meant to bolster its reviews of corporate accounting.
The US audit regulator is expected to report that PwC had violations in five out of 54 audits reviewed, compared to just two problem engagements the year before, the firm said in a midyear update on its audit quality.
“We are proud of our record of profession-leading PCAOB inspection results,” the update said, referring to the Public Company Accounting Oversight Board, which reviews the work of the largest US firms annually.
The PCAOB has been teasing terrible inspection results for half a year now, get on with it already.
British grocery chain Asda is without an auditor after a senior partner at EY hooked up with co-founder Mohsin Issa, says The Telegraph. According to EY, she resigned as partner and never worked on the Asda audit. But, you know, better safe than sorry.
EY has quit as auditor to Asda amid one of its senior partners starting a romantic relationship with billionaire chief executive Mohsin Issa, The Telegraph can reveal.
The Big Four accountant informed the supermarket of its decision in July. However, Asda has not made any public disclosure about EY’s resignation in filings to Companies House or during senior management’s recent questioning by MPs.
Asda said it had told lenders of its listed bonds in August and a source close to the supermarket said EY had formally confirmed there were no reasons for its resignation that should be brought to the attention of investors or creditors.
What is it with EY and banging the client? Randy bunch, those EYers.
A little situation in Florida:
The Broward School District has been unable to collect more than $300,000 that auditors say were overbilled by a former supplier of graduation caps and gowns, a new audit shows.
The district issued a demand letter dated Oct. 24, 2023, to Chuck Puleri and Associates, the district’s former vendor for Herff Jones graduation products, for $301,489 in October, according to a Jan. 5 letter from district administrator Joe Phillips to Chief Auditor Joris Jabouin.
The company overcharged the district for certain items, such as honor cords, stoles and diplomas between 2016 and 2021, according to audits from the Alabama accounting firm Carr, Riggs & Ingram. The district does not expect to get that money back, Phillips wrote.
“Our understanding is that the business is no longer in operation. Therefore, the recuperation of funds may not be likely,” he wrote.
The local news covers another newbie accountant. Local to New Zealanders, that is.
An accounting firm’s scholarship for Wakatipu High school leavers has kicked off with the first successful applicant undertaking a summer holiday internship.
The inaugural BDO Southern Lakes & Central Otago accounting scholarship’s been awarded to 17-year-old Madi McLean.
It’s providing her $2500 a year for three years towards living/course costs at Dunedin’s University of Otago, plus paid holiday internships and the offer of employment afterwards.
Madi, who started at BDO’s Queenstown office last week, will be doing a double degree in commerce, with accounting and economics, and law, with the aim of becoming a chartered accountant.
Local BDO partner Nathan Keil says “we’re trying to do our bit to support students and provide accounting as an option for them, because it’s difficult, as it is with a lot of professions, to attract staff”.
The Jamestown Sun of Jamestown, North Dakota spoke to a local accountant about the demand for accounting services. Nothing of particular interest here, not to our readers anyway as we’re all intimately familiar with the science of accounting and its practitioners, but I found this word choice interesting: the industry has “compressed.“
Q. What are some other interesting topics related to CPAs and how they help their clients?
A. As the accounting industry compresses due to lack of interested graduates and career accountants retiring, the CPA profession will flex to incorporate many technological opportunities whether through computerized processes, remote workers, or streamlined service avenues. But these situations have occurred in prior decades as well and in other industries. The tools and trends will be interesting and exciting to witness.
And one last thing for you, courtesy the CPA Letter newsletter:
Layoffs Could Be Coming: What if You’re Near Retirement?
After a year of layoffs and rumors of a potential recession, what will 2024 look like for the job market? According to Randstad RiseSmart’s 2023 Global Severance report, 92% of employers are predicting more layoffs. But what happens if you find yourself out of a job right before you’re set to retire?
In times of economic uncertainty, it’s best to expect the unexpected. Even if you are confident in your current job status, planning for a job loss will set your finances up for success if it should happen.
OK that’s it, I’m out. Have a wonderful week and don’t hesitate to give me a shout if you see something interesting or just want to shoot the breeze about all the happenings in and around the accounting profession.