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Monday Morning Accounting News Brief: Law Firms Celebrate EY’s Failure; PwC ‘Nature Specialists’; UK Tax Scandal | 5.1.23

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The EY split is really dead. Were there any doubts? A WSJ exclusive:

Leaders of EY’s dominant U.S. and U.K. operations are focused on repairing the damage from the 18-month effort to split the firm’s auditing and consulting operations, known as Project Everest.

“My message to everyone about Everest is, it’s behind us,” Kevin Flynn, head of tax at EY’s U.S. arm, told his staff recently, according to a recording of a webcast heard by The Wall Street Journal. “Let’s not spend time in the rearview mirror.”

Dividing the tax unit was a major sticking point in the breakup. “We did go down the road of splitting the tax practice, and that…caused some division,” Mr. Flynn said on the call. “Tax has been through a lot around the Everest transaction and now it has ended we need to stabilize…and what I mean by that is not jumping right into the next thing, not looking to break tax apart.”


EY Failed Split Gives Break to US Law Firms Fearing Competition:

The spin-off would have allowed EY to more aggressively pursue the legal services side of its business, said Mark Vorsatz, chief executive officer of consulting firm Andersen.

“The split would have unleashed the capabilities of an international firm with few peers in terms of platform,” Vorsatz said. The opportunities for a slimmer legal and tax advisory group “would have been endless,” he said.

Law firms have long fretted about the scale of competition they’d face should accounting firms plunge into the US legal practice, as they have done in Asia and South America. EY collected $45.4 billion in revenue in fiscal 2022, compared with $6.5 billion by the largest law firm, Kirkland & Ellis, that calendar year.

“Think about the resources they can bring to bear,” Marcie Borgal Shunk, president of the Tilt Institute law firm consultancy, said of accounting operations. “They have a big advantage.”

PwC has launched a new global Centre for Nature Positive Business:

The firm said it would double the size of its team of “nature specialists” in the next 12 month from 500 to 1,000. PwC’s specialists work on engagements in “nature positive strategy and transformation, nature risk management and reporting, nature technology, data and measurement, and nature finance and fund management,” according to a press release from the Big Four accounting network.

Deloitte’s Women @ Work report reveals signs of progress, but much work remains to improve women’s experiences in the workplace:

Now in its third year, Deloitte’s Women @ Work: A Global Outlook, a survey of 5,000 women across 10 countries, finds some signs of progress for women in the workplace: during the survey period, rates of burnout dropped, non-inclusive behaviors declined, and hybrid work experiences improved. But these issues are still a challenge for many, and other factors have worsened since last year. There has been a significant decline in the number of respondents who feel comfortable talking about mental health in the workplace. Fewer women feel they get adequate mental health support from their employer. More women feel unable to switch off from work, even as they bear the greatest responsibility for household tasks. And a lack of flexibility at work is driving career decisions—more women worldwide have left their jobs in the past 12 months than in 2021 and 2020 combined, and lack of flexibility is among the top reasons cited.

KPMG reviewed its secrecy provisions after PwC tax leak:

KPMG paid for an independent review of confidentiality processes and reminded staff not to leak sensitive information after it was revealed that PwC former partner Peter Collins shared secret government policy material about a crackdown on tax avoidance by multinationals.

The PwC tax leak effectively triggered an inquiry into conflicts of interest at Australia’s largest consulting firms by a Senate committee.

MassCPAs Announces CEO Succession:

On May 1, 2023, MassCPAs announced that President and CEO Amy Pitter will retire on December 31, 2023. After a robust selection process, the selection committee of the Society’s Board of Directors, unanimously elected Zach Donah, CAE, to succeed Pitter as President and CEO, effective January 1, 2024. As part of this planned leadership succession and in connection with his promotion, Donah was named Deputy CEO, effective May 1, 2023.

Some more stuff:
JPMorgan Chase acquires substantial majority of assets and assumes certain liabilities of First Republic Bank
Accounting for Bank Failure
AI to help with ‘day two’ lease accounting
Apostle Accounting: Hundreds face tax demands in rebate scandal
IRS seeking applications for TCE and VITA grants; organizations provide free tax return help for seniors, underserved
RSM US LLP Names John Brackett Chief Risk OfficerBDO commits to landmark lease for new office in Sydney’s CBD

That’s it. You have a good week now, ya hear?