Let’s start this off with some good news: EY Canada has drastically lowered its PCAOB deficiency rate. If you’re more of the glass half empty sort, you’ll note that means they went from 50% deficiencies to a quarter.
Big Four accounting firm Ernst and Young lowered its audit deficiency rate from 50 to 25 per cent in the past two years, according to the latest inspection report from the Public Company Accounting Oversight Board in the United States. The PCAOB inspected four EY Canada audits conducted in 2024 — the same number they inspected in 2022 — and found deficiencies in one (25% with Part I.A deficiencies).
The US audit watchdog also inspected four EY Canada audits in 2020 and found deficiencies in half the engagements.
The IRS is hiring customer service people but there’s a but. A big one.
The IRS is changing up its plans to hire more customer service employees ahead of next year’s filing season.
Instead of filling thousands of full-time contact service representative positions, as expected this summer, the IRS is now focused on hiring seasonal employees with fewer job protections.
The IRS is now looking to fill more than 2,150 frontline customer service positions. More than 70% of those job posts are for seasonal hires that can’t stay on the job for more than four years.
ProMarket, a publication of the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business, throws some ginormous jabs at “reputable Western financial service providers” (PwC is mentioned by name, specifically) in “Global Corruption Would Be Impossible Without Help From the West” by Alexander Cooley:
The looting of Malaysia’s 1MDB sovereign wealth fund. The embezzlement of hundreds of millions of dollars from Angola’s oil wealth by the former president’s daughter. One of Russia’s wealthiest oligarchs using Cypriot banks to swiftly evade European sanctions following Russia’s invasion of Ukraine in 2022. These scandals share a troubling feature: reputable Western financial service providers played pivotal roles in facilitating these massive corrupt schemes. The investment bank Goldman Sachs was complicit in Malaysia, the management consultants of Boston Consulting Group had their hands in Angola, and the Russian oligarch couldn’t have done it without accounting firm PricewaterhouseCoopers in Cyprus. These high-profile examples reveal that Western professional service providers are entangled in most of the large corruption scandals uncovered worldwide.
Almost reflexively, we tend to divide the world into “clean” countries and “dirty” countries, which generally overlap with wealthy Western and Asian countries and then all the rest. Prominent international corruption rankings and indices, such as Transparency International’s Corruption Perceptions Index, help to reinforce this view. Transparency International’s index is perhaps the most widely recognized of all and has, since 1995, ranked countries in the world according to perceived levels of public sector corruption, creating a seemingly clear global moral geography.
But perceptions of public corruption are only one part of what is a long, complex, transnational chain. Consider this scenario: a Chinese regulator accepts a bribe from a foreign company, then uses an accounting firm in Hong Kong to purchase an opaque offshore shell company from a law firm in Panama. Within this shell company, an entity registered in the British Virgin Islands opens a Swiss bank account, which then purchases a Manhattan apartment for the official’s family members. In this chain of corruption and money laundering, the jurisdictions that facilitate each step—Hong Kong, Panama, the British Virgin Islands, Switzerland, and New York—would likely remain undetected and unacknowledged in our conventional understanding of where corruption “happens.” Yet these supposedly “clean” financial centers are indispensable to making the whole scheme work.
Business Insider covers the consulting ladder getting wiped out:
‘Culling of the herd’: Consulting could be headed for a decadelong shift that’ll make it harder to climb its career ladder
A combination of AI, shifting customer demands, and tougher paths to promotions means the consulting industry is on the cusp of being completely reshaped, writes Business Insider’s Jennifer Sor.
Consultants are no strangers to volatility. In fact, a big part of their business is advising clients on the best ways to navigate change.
But the current trends giving consultants plenty of work — operating more slimmed-down workforces and leveraging AI — are also impacting their own ranks. Analysts told Jennifer that the end result isn’t clear, but early signs point to a tightening of senior and junior roles in the industry.
Meanwhile, AI engineers are getting paid $900 an hour to help large companies troubleshoot, adopt, and integrate AI with enterprise data, reports Fortune.
Inc. provides 4 Prompts You Can Use to Replace Consultants With AI if that’s more your speed.
EY didn’t clean up like they said they would post-Wirecard, alleges a longtime EY veteran in this FT expose:
Joe Howie, who was part of a team tapped to conduct a post-Wirecard revamp of EY’s processes, says he was pushed out after he urged EY to drop risky clients and refused to sign off on quality control systems he thought were flawed.
After losing a string of internal battles over the issues, causing an early end to his 35-year career with the firm, he has taken his campaign public with a lawsuit and tells the Financial Times that, in his view, EY is failing investors who rely on it to endorse corporate accounts.
Loved this line in particular:
“I may be a Big Four snob, but there’s a difference between a Big Four firm and somebody in a strip centre,” he said. “There’s a responsibility we have because of what we build ourselves out to be, beyond the normal professional standards and conduct.”
K we’re done. Email or text if you have a tip, have seen a story you think we’d like, or have some pithy observation about the general state of things you think worthy of sharing with the class. Love ya bye.
