Good morning and welcome to another edition of the Monday Morning Accounting News Brief, a wrap-up of the stuff you missed over the weekend, some of the stuff we missed last week, and whatever went down on the other side of the world while we were sleeping on Sunday.
AICPA and NASBA to Launch Learning Program Designed to Ease Path to CPA Licensure
The American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA) will launch an innovative post-graduate program this fall in collaboration with the Tulane School of Professional Advancement (SoPA). The program blends rigorous online learning with on-the-job professional experience for college accounting graduates, offering a less costly and more flexible way to complete the 150-hour course credit requirement to become a licensed CPA.
There has been widespread concern within the CPA profession about a decline both in the volume of accounting graduates and the number of candidates who subsequently go on to take the CPA Exam. The AICPA-NASBA initiative, called the Experience, Learn and Earn (ELE) program, is designed to help resolve some of the financial hurdles to college graduates’ pursuit of the CPA license by integrating relevant online study with work experience through a participating accounting firm. Tulane SoPA will pilot the innovative program during the upcoming academic year, with initial classes beginning in January, and there are plans to add other universities in short order.
Anything but 120 units, I guess.
Because I know the internet rarely reads the articles and only the headlines, if you happen to see this one floating around please know it has nothing to do with us. Some will be disappointed to hear that.
Glorious headline here from The Chaser: KPMG way worse than PwC according to damning report by PwC
PwC has permanently fucked things up for the future of two-faced consulting and conflicts of interest. WAY TO GO, CLOWNS.
Australia will drastically toughen penalties against promoters of dodgy tax schemes and beef up regulatory powers under reforms announced on Sunday in response to a scandal over the use of leaked fiscal plans by PwC Australia.
The leak of the confidential government documents, by a former partner at the professional services firm, was revealed in January.
It caused a scandal that has forced out 12 PwC Australia partners, including the chief executive, triggered the sale of its lucrative government consulting wing for $A1, and embroiled clients Google, Uber and Facebook.
Bills to be introduced this year would raise the maximum penalty for promoting tax exploitation schemes 100-fold to A$780 million ($510 million) and make prosecution easier by expanding how the rules, which have only been used six times, are applied, according to a government statement.
PwC Australia was not fined for the breach under the existing rules, and the changes will not applied retroactively, a Treasury spokesperson told Reuters.
And then Elizabeth Knight, business columnist at Sydney Morning Herald, wrote an opinion piece entitled “How the PwC virus infected the industry” in reaction to the above news.
The government has seemingly belatedly woken up to the fact that these consulting partnerships operate outside the corporations law, are largely self regulated, have limited transparency, and have been left to their own devices in dealing with significant conflicts of interest. It’s a mix that was always likely to blow up and bring pain to the big four industry players.
It is now overwhelmingly in the government’s interest to wrap its arms around what has been going on inside these firms. The public outrage is palpable, giving the government little choice but to seize the opportunity to get in on the retaliatory action. That’s just good politics.
But it is the government’s own departmental bureaucracy that has enabled the big four by awarding them contracts with insufficient scrutiny or by letting the likes of PwC’s Collins inside the information tent, although he was being paid by clients in whose interests it was to avoid tax.
The big four accounting firms have been desperate to maintain the industry status quo – the cosy and mostly unquestioned relationships with corporate and government clients that have allowed these firms to become money making machines.
But with the ground shifting beneath them, the firms now all claim to be happy with the increased oversight and penalties that are coming down the pike. But then what else could they say?
Also coming out of Australia and totally related to PwC because no one would have said anything had PwC not gotten a red hot spotlight directly on consulting:
Consulting firm KPMG overcharged Defence while raking in billions of dollars, whistleblowers say
Consulting giant KPMG has been accused by two whistleblowers of repeatedly ripping off taxpayers while contracted by the Department of Defence — submitting inflated invoices and billing the federal government for hours never worked.
The whistleblowers – one from KPMG, the other from Defence – told Four Corners the ongoing cosy relationship meant new work was awarded with little scrutiny, allowing KPMG to charge the department a staggering $1.8 billion over the past decade.
One whistleblower said KPMG had “significant influence” over senior Defence staff.
Moving on. This firm in Minnesota no one’s ever heard of put out the cutest press release:
DHA CPAs is happy to announce new talented professionals joining their team for accounting and financial services. The firm is expanding to meet client demands and maintain a high level of service and expertise in the industry.
The new employees have unique experiences and skills that will strengthen the company’s abilities and guarantee excellent financial solutions for our clients. Their knowledge of public accounting and finance will enhance our dedication to offering customized services for businesses and individuals.
Among the notable new team members are:
1. James – Senior Accountant
2. Kindre – Staff Accountant
3. Tyler – Tax & Accounting Intern
4. Walter – IT Support Specialist
Oh and congrats to Cameron who passed their fourth and final section of the CPA exam in July.
UK firms see audit costs climb as fines and skills shortage push up auditors fees
The total amount in audit fees paid by the UK’s largest 500 companies has risen by 14 per cent in the past year, according to new data.
Commenting on the findings, Kathryn Cearns, former chair of the Office for Tax Simplification, said: “There is a lot of focus on audit quality and that’s putting pressure on auditors to up their game.”
“There is also a scarcity of talent, which is putting pressure on audit fees,” she added.
To attract new recruits and retain existing staff, the Big Four accounting firms – EY, PwC, KPMG, and Deloitte – were forced to increase salaries across the board last year.
However, that sector pay battle has eased over the course of the year as the national and global economic outlook remains uncertain.
PwC told its 25,000 staff in the UK in June to expect smaller bonuses and pay rises this year, with Ian Elliott, the firm’s chief people officer, reportedly writing to staff that the “exceptional” pay rises handed out last year would not be repeated.
Similarly, KPMG said in May that bonuses would be slashed as its profits falter amid a slowdown in the dealmaking environment this year.
Let’s remember that UK firms have been raising audit fees for YEARS long before anyone was talking about staff shortages and the chair of their audit regulator told them recently that they make plenty of money so there’s no reason they can’t pay staff better. Raise fees all you want, just be real about why.
Experts have spent the year insisting that, with enough time and evidence, there’s no longer a doubt that remote work throws a wrench into productivity. Like it or not, in most industries, hybrid work is certain to remain a fixture, leaving the productivity levels of the office-only 2010s firmly in the past. But office buildings have barely crested to a half-full point this summer, per data from Kastle Systems provided exclusively to Fortune. Why, then, did the surprisingly strong second quarter include a boost in productivity as well? This is not what the remote work critics said would happen.
The Elon Musk-led firm did not specify a reason for the departure of Kirkhorn, who has been with Tesla for 13 years. He will remain with the company through the end of the year to aid a smooth transition.
During his tenure, Tesla posted its first quarterly profit after it launched the mass-market Model 3 compact sedan and hit a market valuation of more than $1 trillion.
Kirkhorn’s appointment in 2019 and his predecessor Deepak Ahuja’s exit were disclosed by Musk in a surprise move toward the end of a conference call with analysts to discuss the company’s quarterly results.
“Being a part of this company is a special experience and I’m extremely proud of the work we’ve done together since I joined over 13 years ago,” Zachary Kirkhorn said in a LinkedIn post.
RSM’s chief economist talks about the country’s labor market:
There’s other evidence the job market, while still healthy, is losing momentum. The Labor Department reported Tuesday that job openings fell below 9.6 million in June, lowest in more than two years. But, again, the numbers remain unusually robust: Monthly job openings never topped 8 million before 2021. The number of people quitting their jobs – a sign of confidence they can find something better elsewhere – also fell in June but remains above pre-pandemic levels.
The Fed wants to see hiring cool off. Strong demand for workers pushes up wages and can force companies to raise prices to make up for the higher costs.
The U.S. labor market “is now cooling in a gradual and orderly fashion in line with the policy goals at the Federal Reserve, which points to a growing probability of a soft landing for the economy,’’ said Joe Brusuelas, chief economist for the tax and accounting firm RSM. “Demand for labor remains solid but is clearly cooling compared to the torrid pace in 2021 and 2022.”
Alright, that’s plenty for today. If you see something interesting while you’re traversing the murky depths of the internet that you think we should write about do let me know. Oh and we’ve been tipped off to a strange happening at BDO, something about a last-minute partner meeting despite the firm being on a travel freeze–if you know anything about the why of it please get in touch. I won’t tell Wayne you called me.