Hey! Happy Monday and an early Happy Valentine’s Day to you. Anyone have any nice plans?
Project Everest cost more than we thought. According to this FT report, $700 million.
EY piled more than $700mn of extra debt on to its global operating business to deal with the costs of the failed plan to spin off its consulting arm, according to newly filed accounts.
The firm’s borrowing soared to $983mn at June 30, 2023, up from $269mn a year earlier, as it expanded an existing floating rate credit facility and took out a second. The extra debt is designed to smooth the costs of Project Everest across more than one financial year.
Someone you know spoke to NPR’s Marketplace for this story: Some accountants are turning away new customers this tax season
Tax filing season is here and if you’ve been putting off finding a CPA, good luck. Between a wave of retirees and a drop in the number of people graduating with accounting degrees, the whole profession is struggling to staff up.
“We get calls all the time saying, ‘Hey, my CPA just retired. Do you have room?’ And we don’t,” said Jenni Merrell, a CPA in Chico, California .
That’s been happening across the industry, according to Adrienne Gonzalez, who edits the accounting blog Going Concern.
“Turning away work has been a very new development,” she said.
With young people opting for higher-paying fields out of college, Gonzalez said that lots of accounting firms just can’t take on a lot of new business. Some are finding solutions overseas.
Related:
The National Pipeline Advisory Group formed by the AICPA last year is up and running and throwing out some facts and figures:
Higher salaries, flexibility, and office culture are key to keeping accountants on the job
Once accounting professionals enter the workforce, how do we keep the best and brightest, when consulting, finance, tech companies, and Wall Street firms beckon? Addressing the retention challenge begins with understanding why people are leaving and where they are going once they leave.
In fall 2023, the National Pipeline Advisory Group (NPAG) launched focus group polling conducted by state CPA societies and the AICPA to explore barriers and solutions to grow the profession’s talent pipeline. Eighty-nine percent of the 1,600 poll respondents said understanding retention trends was as important as attracting new entrants to the profession.
The Australians at INTHEBLACK offer advice on how accountants can master public speaking, a relevant topic regardless of which direction the water swirls down your toilet bowl (that’s a myth btw):
Few people relish the idea of getting up to speak in front of a crowd. However, public speaking is a skill that anyone can master.
Leadership communication expert Shane Hatton says most fears about public speaking stem from three main concerns – a lack of confidence, a lack of clarity (or difficulty articulating ideas) and fear of losing credibility.
Addressing the first two will help cancel out the third, Hatton says.
“If lack of confidence is the problem, the answer is practice. For lack of clarity, it is process – so you need to find a good system or framework that you can use to give you structure to your thinking.”
You can also do what Sims do to level up their charisma and practice in the mirror. Serious.
Canadian Accountant put out a piece on the auditor shuffle using some Ideagen Audit Analytics data:
While the annual data provided to Canadian Accountant by an American data analytics firm always contains a few fascinating odds and ends — and that year was no different — the most recent data available presented a mystery.
How did one American firm gain 20 net new auditor engagements? And how did another American firm earn more than six million dollars in net new audit fees? It was a question we asked ourselves in a special report. Now that mystery has been solved. We were not the only ones who had taken notice.
While the rise and fall of foreign accounting firms was the headline theme of the data on new client gains and losses, there were other curiosities and mysteries solved.
For example, even though KPMG Canada lost George Weston Limited (GWL) — the parent company of Loblaw and Shoppers Drug Mart — to PwC Canada after more than 25 years with KPMG, the firm still placed first in net new audit clients gained in 2022. Its success helps in part to explain why KPMG is a surprising second to Deloitte in revenue among the Big Four in Canada.
Charlotte Business Journal ranked the largest local firms by number of staff and asked the firms how they’re using AI in their practice:
Deloitte tops the list with 1,911 professionals, including 297 CPAs, in its local office, followed by EY with 1,743 professionals and KPMG with 685. EY and KPMG have 294 and 169 CPAs in their local offices, respectively. PwC declined to participate in this year’s ranking.
AccountancyAge asks “Can AI eliminate audit scheduling headaches?”
Auditing financial statements is a bit like trying to put together a jigsaw puzzle blindfolded. Without the critical clues provided by audit schedules, auditors face an uphill battle in verifying accuracy and sniffing out errors. Yet the process of manually creating these complex schedules has scarcely changed over the past century, demanding tedious effort and keeping auditors shackled to their desks.
Auditors have long relied on nothing more than spreadsheets, stubby pencils, and repetitive procedures to schedule their audits. Now, they stand at the vanguard of a new technological revolution driven by artificial intelligence that threatens to shake up the stodgy world of auditing. As AI capabilities rapidly advance, auditors finally have an opportunity to entrust the tiresome task of preparing audit schedules to intelligent algorithms and automation.
“Fiscal arrogance” is an awesome phrase.
A second audit of the Tourist Development Council — the entity that handles tens of millions of public dollars to bolster tourism in the Florida Keys — finds that a long-term contractor used a fake company to request reimbursements for services.
The latest audit, released Thursday by the Monroe County Clerk of Circuit Court & Comptroller, follows a scathing audit released last October by the same auditor. The previous audit reviewed the TDC’s financial documents, alleging mismanagement and ‘potential double-billing’ from the tourist council’s public relations contractor, NewmanPR.
Auditors report that NewmanPR, which has provided public relation services for the tourist council for years and receives an annual agency fee of $733,688, is alleged to have created a fake company called Graphics 71.
With Valentine’s Day just around the corner, the IRS Criminal Investigation Atlanta Field Office wants to remind the lonely souls out there not to fall for romance scams:
“Valentine’s Day provides a timely reminder for the public to not fall prey to criminals using love to scam their way into their victims’ hearts for monetary gain,” Demetrius Hardeman, Acting Special Agent in Charge, Atlanta Field Office, said. “To avoid becoming a victim, people need to be aware of the telltale signs that they are being manipulated.”
“Many of these scammers do not act alone and in many cases are part of a criminal enterprise dealing in other illicit activities such as human trafficking, gambling and loansharking,” Hardeman said.
Also in IRS news, they’ve done some work to prevent another big leak but maybe not enough according to this Wall Street Journal article:
The Internal Revenue Service clamped down on employees’ and contractors’ access to confidential taxpayer data after a damaging 2021 leak, but some risks still remained, according to a report that provides new details on the agency’s response.
The IRS now also requires executive approval for employees and contractors who download data onto external hard drives or USB drives. Charles Littlejohn, a former IRS contractor who pleaded guilty to leaking the tax data, was able to put some taxpayers’ information onto an iPod and other personal devices and then give it to news outlets. Littlejohn was sentenced last month to five years in federal prison.
The inspector general’s report criticized the IRS for failing to shut off system access for 279 of more than 90,000 employees and contractors who can use sensitive systems. That finding kicked off a dispute between IRS officials and the inspector general.
UK Big 4 firms are really hurting. First Deloitte laid off 100 people (on top of the 800 let go in September), now PwC is pushing back promotion dates for some grads:
PwC is forcing some junior consultants in the UK to spend an extra six months on its graduate scheme because there is not enough work to promote them.
The move affects the graduate intake that joined PwC’s consulting business in autumn 2022. However, it only applies to those who started the scheme in October and November 2022, with those who joined in September of the same year eligible for promotion.One person hit by the change said: “None of us can understand the logic they’ve used to choose September grads over us. They might as well have picked our names out of a hat.”
“Partners will purport to care about your development as a graduate but in reality that’s far from the truth. They only care until it affects their pockets.”
Now would be a good time to revisit this excellent piece The Tab published last year:
According to UK law, maximum working hours are 48 per week. But you can sign your life away – and many Big Four grads do. “You do the hours because everybody else is doing it, even though you could just stop. You can’t look your team and your friends in the eyes and walk out the door at five,” he adds. “You’re all in the torture together. Everybody’s shattered Thursday and Friday— but you still go for a beer because it’s been a shit week.”
As grad schemes go, the Big Four is generous on paper. James was paid £28.5k in year one, £30.5k in year two and £34.5k by his final year. But broken down into an hourly rate, he was earning below minimum wage for significant chunks of the year. “The idea is that when you qualify your salary jumps up to £45-50k,” he says. “But, to be honest, once you pass all your exams you can get paid more somewhere else.”
James claims, even after exams, things don’t get better. “The grad scheme and training can be good if you can survive it,” he says. “But your workload just gets heavier and you get more responsibilities afterwards. If I had to give anybody advice, it would be: Get out.”
Oh hey, take this quick survey: What was your starting salary? We are especially interested in getting feedback from people who graduated before yours truly and much of the GC readership was born. So pre-Abba.
Alright that was more news than I expected for an otherwise unremarkable Monday in February. Nice. Please let me know if you see anything interesting and follow us on X/Twitter for more lukewarm takes. You are also welcome to submit a letter to the editor if you have extensive thoughts on, well, anything. Accounting-related that is. We also accept guest posts if they meet our rigorous guest post guidelines.
Have a good one and know that if no one else does, I love you.
