Morning! Here’s some news I scraped up, kinda dead out there.
Bloomberg talks about Big 4 firms implementing AI. Funny Bberg framed it as a fast track to partner considering how few people actually want to be partners these days. There’s a whole discussion to be had about how repetitive grunt work in your early years actually serves a purpose but we’ll save that for another day. Said Bret Greenstein, Data and Analytics Partner at PwC US, about the grunt work, “For many of us, we started our careers doing the necessary but often tedious work in support of senior professionals. A lot of this work — writing drafts, taking meeting minutes, researching topics — is greatly aided by GenAI today. This allows junior employees to be more productive and impactful much quicker.”
Consulting giants and law firms are looking to artificial intelligence to speed up the time it takes junior staffers to make it to the prestigious partner level as the technology eliminates vast swaths of the repetitive, time-consuming tasks that typically filled up their first few years on the job.
At KPMG, for instance, freshly-minted graduates are now doing tax work that was previously reserved for staff with at least three years of experience. Over at PwC, junior staffers are spending more time pitching clients rather than the hours they used to spend prepping meeting documents.“Consulting Giants See AI Shaving Years Off the Path to Partner,” Bloomberg News December 4, 2023
Financial Times was talking about Big 4 firms and AI too, though their headline and accompanying short text feels pretty skeptical LOL
A guy from Deloitte called bullshit on EY’s claim that their new AI “detected suspicious activity at two of the first 10 companies checked.” In those cases, clients confirmed EY’s findings but the firm didn’t elaborate on what exactly the fraud was nor would they discuss specifics on the AI.
However, Simon Stephens, AI lead for audit and assurance at the UK business of Deloitte, another of the Big Four audit firms, pointed out that frauds were relatively rare and tended to differ from each other. That would mean there were not necessarily tell-tale patterns for AI systems to pick up.
“Frauds are . . . unique and each is perpetrated in a slightly different way,” Stephens said. “By nature they are designed to circumvent safeguards through novel uses of technology or exploiting new weaknesses, and AI doesn’t play well there right now.”“EY claims success in using AI to find audit frauds,” Financial Times December 3, 2023
How do you teach AI to be skeptical? That’s the question to be answered in the next few years.
Speaking of EY, they’re cutting more jobs in the UK. 150 to be exact.
The cuts will affect staff in EY’s legal arm, as well as employees at EY-Parthenon, its strategy and transactions advisory business.
The firm is also in the process of shutting EY Riverview Law, the Manchester-based legal services business it bought in 2018, which will result in the majority of its employees being laid off, the people said.“EY to cut a further 150 UK jobs as Big Four firms grapple with waning demand,” Financial Times December 3, 2023
KPMG Canada is taking a self study class in the Streisand Effect.
In a court hearing last April, a judge agreed to restrict public access to documents in a $37-million tax “sham” case.
KPMG Law requested the temporary sealing order in the case regarding its client Gold Line Telemanagement, which the Canada Revenue Agency alleges was involved in a “carousel scheme.”
Now, The Fifth Estate has learned that KPMG has applied to the court to have the affidavit at issue struck from the record completely — preventing the public from ever knowing what was in that CRA document and accompanying exhibits filed with the court last February by the Department of Justice.
While the contents of those documents are so far unknown to the public, they could provide key information regarding how an alleged $37-million tax scheme was perpetrated against the Canadian Treasury.“KPMG wants CRA affidavit in tax ‘sham’ case struck from public record,” CBC’s The Fifth Estate November 29, 2023
Here’s some KPMG news a bit closer to home from ProPublica:
Last month, Microsoft disclosed that the IRS had sent the company a bill for $28.9 billion in back taxes as part of an audit. The examination, which began more than a decade ago, is the largest in the agency’s history, and it’s far from over, as Microsoft has vowed to appeal the findings.
The centerpiece of the audit, as ProPublica detailed in an investigation nearly four years ago, is a 2005 transaction that moved tens of billions of Microsoft’s U.S. profits to Puerto Rico to help the software giant save billions in taxes. In a letter sent Wednesday, three senators, citing ProPublica’s reporting, focused attention on the company that helped Microsoft cook up that scheme: the mega-consultancy KPMG.
“KPMG’s role in Microsoft’s tax evasion is deeply disturbing, indicating that KPMG helped Microsoft reward shareholders and executives, while depriving the federal government of billions in tax revenue needed to pay for health care, environmental protection, infrastructure, and more,” says the letter, which was signed by Democratic Sens. Elizabeth Warren, Bernie Sanders and Sheldon Whitehouse and sent to KPMG’s CEO. “You owe Congress an explanation for your firm’s actions.”“Senators Question KPMG Role in Microsoft Profit-Shifting Scheme,” ProPublica November 30, 2023
One last KPMG story, a positive one. KPMG UK raised a bunch of charity money:
KPMG in the UK has now raised over £1 million ($1.3 million USD) for Marie Curie, two years after staff voted for a partnership with the end-of-life charity.
The firm’s flagship Big Walks, which took place in the summer months, were a key contributor to the total raised so far. This year, 5,300 colleagues collectively travelled a staggering 94,000km, with the fundraising walks and distance challenges raising over £320,000. This surpassed the £222,000 raised the prior year.
PwC UK has announced an effort to help recruits from lower socioeconomic backgrounds. This means:
- School leavers and graduates will be able to advance up to a £1000 of their first month’s salary. The option will be open to everyone, helping to reduce any potential stigma associated with the request.
- Socio-economic background data will be incorporated into the way PwC monitors work allocation to ensure there is fair access to high profile clients and projects
- Salaries will be published on job descriptions for our school leaver apprentice programs, with a view to expanding this to all entry level roles.
- Increased mentoring will be made available for new joiners from lower socio-economic backgrounds.
PwC is taking a number of new steps to support new joiners from lower socio-economic backgrounds* settle in and progress in the firm. The actions, which include the option of a salary advance for next year’s graduate and school-leaver intake, follow a significant research project with Thinks Insight & Strategy.
*socio-economic background defined by the occupation of a person’s main household earner when they were aged 14, which is the most accurate measure according to the Social Mobility Commission.
Chief people officer Ian Elliott had this to say about it:
“We’re proud of the strides we’ve made broadening access to the firm, focusing on potential not pedigree. But equally important is how we support people to settle in and develop once they get here. We wanted to better understand the experiences – warts and all – of prospective and new joiners, particularly those from lower socio-economic backgrounds. By learning what’s working well and what isn’t, we’ve been able to identify changes that we hope will make a significant difference to their experience.”
“A vicious cycle emerges whereby people who may already feel daunted by corporate life, don’t establish the same support networks and lose confidence. We want to help everyone start on the same footing. There are many factors at play. The actions we’ve identified cover everything from making the application process more accessible, through to financial wellbeing, mentoring, and how work is allocated.”
Reminder to accounting and finance students and professionals under the age of 35: you have until December 15 to take this Illinois CPA Society pipeline survey. Individuals with or without the CPA credential are invited to participate.
A threatening quote from the director of the Hong Kong Audit Commission in SCMP today:
“The coverage of our scrutiny is all-encompassing, touching on every institution about its use of every dollar,” he said. “When the situation warrants, we will look into the use of public money in every aspect. The scrutiny covers all universities and tertiary institutions.”“Hong Kong Audit Commission head brushes off accusations body targeted Chinese University, says it scrutinizes all use of public money,” South China Morning Post December 2, 2023
Apparently there’s some drama going on with the Commission and the university, eloquently discussed here in Hong Kong Free Press:
One of the recurring sad features of recent years has been the way that government branches previously regarded as professional and impartial have been sucked into the cesspit of partisan persecution of people the government does not like.
The epidemic has now progressed so far that it is easier to list the few survivors. One of which used to be the Audit Commission. For many years the commission engaged in the entirely apolitical pursuit of financial glitches in the smooth working of public administration.
Amid some bleating from the victims, it cautiously spread its purview from the counting of beans to the more delicate question of whether spending was producing the desired results.
It has not previously made a habit of extending its activities to local universities, possibly because they are not financed in the way in which government departments are. Universities get a block grant from the University Grants Committee; it is up to them what they do with it. Also the objectives of a university are difficult to define. Unblocked drains or solved crimes can be counted. The inculcation of wisdom or the creation of knowledge are harder to quantify.“It’s the turn of Hong Kong’s Audit Commission to be sucked into the cesspit,” Hong Kong Free Press December 3, 2023
That’s it. Really, there’s nothing else happening. I beg you, send me something interesting if you see it. Oh and p.s. when today is over there are three Mondays remaining in 2023, one of which is Christmas so really two.