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Monday Morning Accounting News Brief: PwC Is Turning Work Down?; TIL the President of Nigeria Worked at Deloitte | 9.11.23

Funny white cat-an athlete in a yellow sports headband, lying with yellow footballs, dumbbells and a yellow alarm clock standing nearby.

Yay it’s Monday again! Praise Pacioli, there’s actually some stuff going on this morning.

Meet a 29-year-old accountant whose ‘resentment’ only climbed after her firm raised her salary from $60k to $90k as she made millions for them. She has her own firm now:

Stephanie Heredia’s promotion came a year too late and more than a few dollars short. Heredia, 29, started an accountant job at a small Tampa, Florida firm, with the promise that her $60,000 base salary would rise to $100,000 after one year.

But at the last minute, she told Fortune, the timeline became two years. Her eventual salary—$90,000, plus commissions. As the firm grew from four people to 25, Heredia’s responsibilities ballooned. She was charged with opening a new unit in Puerto Rico, which went on to generate an additional $2 million annually for the firm, but asking for a raise felt “like talking to a brick wall,” Heredia said.

“I’d have sales over $300k annually but was only making $90k while doing ALL the work of the clients I brought in [and] the other work at the firm,” Heredia said, adding, “I sadly have way too many spreadsheets comparing the money I was bringing in [versus] bringing home!”

“I was starting to realize I was burning out pretty quickly,” she recalled. “I made the decision that I couldn’t keep building someone else’s dream.”

Yesterday on FT:

PwC to curtail consulting work for US audit clients to reduce conflict risk

PwC is planning to give up tens of millions of dollars of consulting work for its US audit clients to reduce the risk of conflicts of interest, challenging its rival Big Four firms to follow suit.

The accounting firm has begun to tell clients it will stop offering them some advisory services, even though they are permitted under US rules, as part of a wider revamp of its audit work.

If clients are hard up for consulting services we hear the mid-tiers will be very available minus all the conflict.

KPMG has established a new AI and Digital Innovation Group to be led by ex-US consulting leader Steve Chase. Straight from the horse’s mouth:

KPMG LLP, the U.S. audit, tax and advisory firm, today announced the establishment of an AI and Digital Innovation group led by a newly named Vice Chair, Steve Chase. This new role gives emerging technology leadership a critical seat at the table on KPMG’s Management Committee led by Chair and CEO Paul Knopp.

Chase will spearhead efforts to invest in and incubate new services and solutions for clients, integrate emerging technologies into existing services, enable internal transformation and new ways of working, and ensure KPMG maintains leading governance and responsible use programs. He will oversee KPMG’s AI Center of Excellence, which will encompass KPMG’s extensive AI client services, AI Innovation Lab and responsible use principles and policy, among other programs.

EY UK’s former head of tax done fucked up:

John Dixon, 64, an undischarged bankrupt who owed the taxman almost £1 million, carried out a string of sham transactions designed to mislead his creditors into believing he had no assets or income, court documents allege.

Now his trustees in bankruptcy have turned to the High Court in London, where they are seeking orders to set aside the transactions, and orders forcing Janet Dixon to hand over half of the sale price of two properties.

Mr Dixon was the managing partner and head of taxation at top firm Ernst & Young until about 2014, and was ruled bankrupt in 2017, owing the taxman £627,302.59 for the years from 2009, a High Court claim says.

In September 2010 he tried to get rid of his assets by declaring that they were held in trust for his wife absolutely, the High Court will hear.

He passed over to his wife a £1.78 million flat at Tea Trade Wharf, in London and four vehicles, including a 2008 black Range Rover and an orange Audi Quattro, his capital account and undrawn profits from his partnership at Ernst & Young, and his “residual estate” of assets and income, according to the court documents.

And he also bought a three-bedroomed flat in Barbados in her name in 2014, the claim says. In 2015 and 2016, The Stonehouse was sold for £1.2 million, leaving a shortfall of £115,302.95 secured on the property which Dixon paid off, and another property in Cambridge was sold for £470,000, providing a balance of £126,202,82 which was paid to Mrs Dixon.

Deloitte’s making moves in private equity consulting:

Deloitte is planning a private equity hiring spree as it looks to win more business from buyout shops.

The Big Four firm told Private Equity News that it has set an internal target of 150 new hires for its strategy and consulting business over the next three years, with an aim to build its PE consulting team to 500 people by 2026.

The majority of the new hires are expected to be in the UK, Deloitte said.

Nigerian president Bola Ahmed Tinubu spoke to Nigerians on the sidelines of the G-20 Summit in India about his path in life:

At the ceremony, which had several Nigerian students in attendance, Tinubu remarked that if they were committed and diligent, they could reach the zenith of their careers.

Reflecting on the trajectory of his life and how it prepared him for leadership, the President narrated how he worked as a security guard before landing jobs at Deloitte and Exxon Mobil.

“Good education brought me here and I am happy to stand before you here as the President of Nigeria. I started small,” Tinubu said.

“I was a security guard. I was a tutor in school. I was a brilliant student. I joined Deloitte and was trained by one of the biggest accounting firms in the world, because of my education.

“When I joined them, I asked them, Do you have branches in Nigeria? And they said, ‘We have a lot of clients, we will take you if you want to go home’.”

Eide Bailly (FY23 net revenue of $616.5 million) has changed the name of Eide Bailly Financial Services to Eide Bailly Wealth. As part of this change, Eide Bailly Wealth is emphasizing its fiduciary role by leaving its broker dealer and only conducting business going forward as a full-service registered investment advisor.

From Fortune by way of Yahoo:

Why ‘I quit’ comes soon after ‘you’re promoted’—and companies keep bungling the career advancement process

An accountant who quit because her promotion into a six-figure job only stoked her “resentment.” A plumber who started his own shop after getting a raise to $45 an hour at a highly regarded company. A business strategist who left a $200,000 CFO position because the boss kept his promotion a secret from the team.

These might sound like bizarre outliers in America’s career chronicles. In fact, these three workers who spoke with Fortune are part of a new trend, research shows. New data from payroll processor ADP, released this week, show that promotions increase the chance that a person will leave their job. The research [PDF] found that 29% of workers who were promoted left within a month—compared with just 18% for those who weren’t.

Two months after putting down roots in Denver, Atlanta’s Bennett Thrasher bought a tax practice:

The deal incorporates the tax reporting valuation practice of Intrinsic LLC. A transaction advisory and valuation firm, the Denver company recently reshuffled its long-term strategy, said Rob Swanson, the acting Intrinsic CEO.

The result was a renewed focus on the firm’s private equity clients, meaning its tax practice might be better leveraged through a larger company, Swanson said. The tax group primarily serves family offices and estate planning attorneys, making Bennett Thrasher’s client base a great fit.

Grant Thornton names a Houston managing partner, has big plans:

Tracy Hennesy was named the new local market leader for the firm Aug. 17. She succeeds Georgene Britz, who retired from the company July 31 after serving as the Houston office managing partner since 2018.

Hennesy has been with Grant Thornton since 2007, initially working in the company’s Chicago office before moving to the Houston office about nine years ago. She moved to Houston to build out a team and resources for the firm’s mergers and acquisitions tax consulting practice in Texas, of which she also serves as partner.

Grant Thornton has significant growth plans for the Houston market — as well as other markets — over the next three years, Hennesy said. That includes increasing hiring and continuing to retain employees locally, especially as the accounting industry struggles with a declining workforce.

Baker Tilly-sponsored tennis star Coco Gauff defeated Aryna Sabalenka in the U.S. Open final on Saturday. Gauff, 19, is the youngest Open champion since 17-year-old Serena Williams won in 1999.

Simon Dolan made a lot of money from owning his own accounting firm. Here he talks about what inspired him to get rich:

I later worked for a local accountancy firm for 18 months after leaving school to go to college. My boss had no impact on me whatsoever other than the fact that he had identified a niche of business that I later made a fortune out of. He had inadvertently given me what was soon to become SJD Accountancy.

I set up in 1992 and sold out in 2014 but never made any real money for the first eight years. This modern belief that you can build a business really quickly and sell out for a fortune is totally wrong. The trick that I had, coming from a sales background, was working month to month and developing a business with foundation. Every month my aim was to do more than the previous one, which I did consistently for 22 years. I wasn’t planning that but it worked.

The fallout from PwC Australia’s behavior continues. Pass the fine-tooth comb:

Inquiry chair flags public service code of conduct for consultants

The chair of a high-profile inquiry into the use of consultants in NSW has flagged the committee is looking at tightening the ethical requirements and regulations by putting public sector conduct codes into procurement contracts.

Former corporate lawyer Abigail Boyd, the Greens representative in the NSW upper house, told The Mandarin that the Public Accountability and Works Committee is taking seriously suggestions made by whistleblower Brendan Lyon for the inclusion of ethical codes in contracts.

Lyon left accounting firm KPMG following concerns about the way the firm handled services for separate departments related to the creation of a new entity known as the Transport Asset Holding Entity, which housed depreciating transport assets.

The previous state government created TAHE to put depreciating assets “off budget”, making its bottom line appear healthier.

The NSW Audit Office released a report in January branding the creation of TAHE, which began operations in July 2020, as “not cohesive or transparent”.

“It delivered an outcome that is unnecessarily complex in order to support an accounting treatment to meet the NSW Government’s short-term Budget objectives, while creating an obligation for future governments,” the audit office report said.

The New York attorney general said on Friday her office actually underestimated how much Donald Trump bloated his net worth when running his dad’s real estate empire:

Based on evidence that Letitia James says the former president doesn’t dispute, he overstated his value by $3.6 billion, up from the $2 billion that her office reported last week in court papers.

Valuation experts and accountants working with AG investigators found Trump inflated his net worth by $1.9 to $3.6 billion during the decade James’s case covers when accounting for modern-day market factors, the AG said. The evidence Trump doesn’t dispute — like valuing his Trump Tower Triplex based on it being around 33,000 sq ft when, in reality, it’s around 10,000 sq ft — shows him annually inflating his worth by between $812 million to $2.2 billion, James showed in court filings last week.

James described the astonishing $3.6 billion sum as still conservative when considering that “many of the inputs and assumptions used by” Trump and his codefendants that valuation experts accepted for argument’s sake “would otherwise be rejected in a full-blown appraisal review.”

Alright that’s it. Have a great week and let me know if you see anything interesting.