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Monday Morning Accounting News Brief: Pissed Off Wipfli Employee Got the Office Shut Down; New PwC Flight Rules | 12.11.23

fluffy black cat scrunging

Morning! Please let there be some news happening.

An upset Wipfli employee caused the entire Lincolnshire, IL office to get shut down for a week. No one was harmed and detectives determined the threat was empty.

An office building in Lincolnshire was closed for the entire week after an upset employee made a threat to harm others but police have released few details.

The Lincolnshire Police Department on Monday received a report of a threat made to Wipfli, located at 100 Tri-State Drive in Lincolnshire.

Lincolnshire Deputy Police Chief Kimberly Covelli told Lake and McHenry County Scanner that detectives began an investigation after receiving the report.

They learned an employee made a threatening comment after becoming upset by a management decision.

If anyone at Wipfli has more info on this (like what management decision?), text us at 202-505-8885 or email.

PwC UK has new rules about flying business class, says FT:

PwC told senior UK staff in October that only people travelling on long-haul night flights or those flying for “business-critical” reasons would be allowed to sit in business class, people familiar with the matter told the Financial Times.

PwC has pledged to cut emissions from its operations to net zero by 2030. Business travel remains PwC UK’s single-largest source of carbon pollution, with flying accounting for more than two-thirds of the firm’s emissions in 2022.

The victims of Wednesday’s shooting at UNLV have been identified, one was an assistant professor of accounting:

Patricia Navarro-Velez, 39, an assistant professor of accounting originally from Puerto Rico, “was a pioneer who worked her way through three universities into a challenging job at one of the largest public accounting firms in the world,” said Jason Smith, professor and chair of the accounting department.

Navarro-Velez joined the department at UNLV in 2019. Her research zeroed in on cybersecurity disclosures and assurance, internal control weakness disclosure, and data analytics, the school said.

“Pat immediately made a positive impact in the lives of students and her colleagues,” Smith said Friday. “She had a larger-than-life personality, an infectious smile, and a genuine kindness that made everyone around her feel like family.”

Mandatory audits don’t provide protection the entities mandated them think they do according to new research. Scroll down to point three.

In new research, Matthias Breuer, Anthony Le, and Felix Vetter find that when companies are required by the government to seek a third-party financial audit, they turn to lower quality auditors. As a result, the accounting industry grows, but touted benefits for markets and corporate stakeholders appear elusive.

Say the researchers:

First, we find that the likelihood of obtaining an audit increases with a company’s size independent of any government mandate, reflecting the fact that larger companies face greater financial complexities and more diverse stakeholders and thus have a greater private demand to obtain a financial statement audit.

Second, we find that audit mandates benefit the auditors by creating new demand, particularly from smaller companies just above the exemption threshold.

Third, using detailed German administrative data that allow us to separate workers by industry and occupation, we find that the number of auditors in the market also grows. The impact of the audit mandates on the average wage within the audit occupation, however, is negative. That is, while the total compensation paid to all employees increases due to the growth in the number of auditors, the average wage paid to auditors decreases. At first sight, this result appears puzzling as it seems to suggest that more auditors can be attracted with lower wages. The puzzle can be solved by considering a critical feature of the audit market: product differentiation.

ICYMI: AICPA seeks comments on criteria for stablecoins

This guy thinks accounting events are now just a shameless sales grab:

Accounting events have lost their way and stopped thinking about what their audience really needs, according to professional services marketing specialist Trent McLaren.

Mr McLaren, who co-founded marketing consultancy Journey almost a year ago, said vendors were spending tens of thousands on events and the shows themselves were proliferating, but the tax profession had lost interest.

“I think we’re losing our way,” he said on the latest Accountants Daily podcast. “We’ve stopped understanding what it is that we’re trying to do and what our motivations are for doing them in the first place.”

He said vendors and event organizers were too focused on profit and sales leads, instead working out a recipe so that everyone could win. The internet meant a world of content was just a click away and simply recycling webinars would fail. Tired content was leading to dwindling audiences.

Baker Tilly-endorsed tennis star Coco Gauff is the highest-earning female athlete of 2023.

Australian Big 4 firms would be hit with penalties of up to $514 million USD ($782.5 million AUD) if they breach the tax code as PwC Australia did under a new government proposal. AFR:

The move is part of a broader multi-year suite of reforms being pursued by the government following the PwC tax scandal that are designed to ward off similar conduct and severely punish it if it does occur.

The changes are detailed in a discussion paper released on Sunday by Assistant Treasurer Stephen Jones, who said while the vast majority of tax agents were doing the right thing, the PwC tax leaks scandal showed the existing laws were “insufficient” to respond when misconduct occurred.

“If these were in place back then, I’m confident that PwC would not have happened,” he said. “Everyone is now on notice. [These] penalties will punch a hole in the earnings of the partnership and end the careers of the culprits.”

EY dropped its third annual EY Future Workplace Index:

…which tracks C-suite and executive sentiment and behavioral data around the workplace of the future. The Index found the number of respondents reporting a remote workplace model has plummeted from 34% in 2022 to 1% in 2023. Now, 80% of respondents say employees are in the office three or more days a week. This data confirms that the office isn’t dead; it just looks different. So what should executives do to maximize the value of the hybrid office?

“It’s clear that hybrid work is no longer in a test-and-see period; it’s here to stay,” says Mark Grinis, EY Americas Real Estate, Hospitality & Construction Leader. “As at least two to three days a week in office is the norm, leaders need to ‘earn the commute’ and enable greater opportunities for productivity, collaboration and creativity than employees experienced working remotely. With this, there is now an increased spotlight on workplace investments — from AI integration to expanded office footprint and virtual collaboration resources.”

KPMG Netherlands has been researching Dutch trust in algorithms for the last seven years. Here’s where we’re at in 2023:

Netherlands residents have little trust in algorithms, and that trust has been declining sharply for five years, according to a study by KPMG Netherlands. Trust in generative AI like ChatGPT is also low, with only 21 percent of Netherlands residents saying they believe the answers provided by the AI are correct.

The researchers found that more knowledge of algorithms leads to less trust. “We see that people who are familiar with algorithms are less likely to trust them than people who are not familiar with them or have not yet formed an opinion,” Frank van Praat of KPMG’s Responsible AI team said. About three-quarters of Dutch people know what an algorithm is, and young, theoretically trained people are most familiar with its application.

For example, 79 percent of people who are familiar with algorithms understand that the use of ChatGPT and other generative AIs entails risks. For people unfamiliar with algorithms, that was only 50 percent. Despite that, only 39 percent of Netherlands residents check the answers they get from ChatGPT.

PwC Hong Kong has asked 200 to 300 of its people to take leave because business is slow:

PwC responded that it is committed to caring for the staff’s physical and mental health, without denying the report.

The directive targets employees who are mainly responsible for initial public offerings and auditing and assurance for listed firms, as Hong Kong’s new listings and stock market have been lackluster and underperformed its global peers this year.

A sit down with Deloitte India CEO Romal Shetty, at the very beginning he talks about the India workforce and the global stage. “Deloitte in India has about 120,000 people, of which about 27 or 28,000 people service the local markets, about 90,000+ people service the global markets.”

That’s all I’ve got for now. Let me know if you come across anything of note while you’re doomscrolling this week.