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January 27, 2023

Monday Morning Accounting News Brief: Living in Mom’s Basement; OnlyFans Tax Investigations; Finance vs. Accounting | 12.12.22

a kitten sleeping in a little bed

“I don’t care how messy your accounting is … you’re definitely going to notice if you find an extra $8B to spend,” tweeted Coinbase Chief Executive Brian Armstrong about FTX. “​​Even the most gullible person should not believe Sam’s claim that this was an accounting error.” Today we learn that Arkansas is not being hit with the accountant shortage as bad as other states: In Arkansas, the decline is not as severe. The Arkansas State Board of Public Accountancy said the number of active CPAs in the state has dropped by 2% in the last six years; “For Arkansas, it’s not terrible as far as a pure numbers perspective,” said Jimmy Corley, the executive director of the state board. “We are not quite replacing them 100%. I wouldn’t say it is an emergency issue here like it is in some places. It is a problem we are looking at.” KPMG UK unveiled a new tool to extract and report personally identifiable information (PII) / personal data (PD), making it easier for organisations to perform Data Subject Access Requests (DSARs) and PII Identification and Review. PwC said on Saturday it plans to invest more than 1 billion yuan ($140 million) to establish an education and innovation centre China’s island province of Hainan, a tourism hub. John Reed Stark, a former U.S. Securities and Exchange Commission (SEC) regulator, said that Binance’s recent “proof of reserves” report is how he defines a red flag. Marcum CIO Peter Scavuzzo on audit disruption: “I think we are in for another transformation in the audit space. There’s a lot of different vendors racing to bring the next generation of audit platforms into the future. The industry has been on these [kinds of] platforms for a decade and I think the next few years will be interesting in how these platforms turn out. When anything new comes out, prime time is years afterwards, so audit platforms and how audits are done with this new technology is still unfolding as we speak,” he said.

If you have recruiting or interviewing questions, you should be on r/accounting at 3pm EST this Wednesday, Beth from Accountingfly will be answering them (and maybe I can encourage her to share some of her interview candidate horror stories). You can send questions in early if you’d like.

From NPR:

Eric Salazar, 28, is an accountant living in his parents’ basement.

In Eric’s case, he hopes to buy the whole place one day. He’s an accountant with a master’s degree and says he can’t do much to increase his earning potential. He invests around 60% of his income but says he’ll likely have to rent out the rooms to make ends meet once he owns the house. His parents don’t charge him rent.

The IRS is going after OnlyFans performers:

OnlyFans content creators have recently been contacted in connection with a criminal tax investigation, according to multiple sources within the tax community. “Over the last several days, pairs of IRS Special Agents across the country descended on the homes and offices of OnlyFans personalities and their tax return preparers, delivering grand jury subpoenas,” John Colvin, a Seattle tax defense attorney told me.

According to Colvin, “There is quite a bit of publicly available information about the revenue generated by performers, and the government appears to have targeted some of the higher grossing acts. Whether there are any problems on the performers’ tax return filings—or indeed whether there are any commonalities—remains to be seen.” Colvin and other sources are correct—many OnlyFans creators are known for their eye-popping income and ostentatious displays of wealth. It is likely one of the disputes between creators and the IRS will be whether and to what extent those displays of wealth are ordinary and necessary parts of earning income on the platform. Is such a dispute really a criminal matter? That remains to be seen.

On Deloitte’s “zombie” ad that ran during the Walking Dead series finale:

AMC’s long-running show “The Walking Dead” recently had its series finale, and Deloitte saw the finale as an opportunity to boost viewership and recruit potential employees through linear TV.

Deloitte was looking for clever ways to attract young recruits. So the company produced an ad featuring a zombie asking the viewer if they are “hungry for a new opportunity” before zooming into the zombie’s hideout, which also happens to be a Deloitte office. Deloitte worked with AMC on the co-marketing initiative with the goal of building a deeper connection with the fan base of a long-running series, something that marketing executives and industry analysts say has become difficult due to streaming.

Our take on the Deloitte zombie ad.

Here’s what we’re working on this week:

  • We’re going to talk about CPA exam fees, I’ll try to make it interesting
  • Bonuses are so out this season
  • Interview tips from some guy at Deloitte
  • idk what else, it’s a slow news month

Lastly, “finance or accounting?” explained in 15 minutes:

Have a great week, all!

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