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October 2, 2023

Monday Morning Accounting News Brief: PwC Sells Off; Minnesota’s Oldest Woman Accountant | 6.26.23

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Welcome to the last Monday morning news brief for the month of June. We’ll have some big layoff news coming this afternoon, if you work there you have already gotten a calendar invite (sorry!). Anyway, here’s what else is going on.

Early this morning Reuters published a gruesome timeline of PwC scandals and failures going all the way back to 2009. Remember Satyam? Five giant screw-ups in 14 years isn’t that bad.

PricewaterhouseCoopers (PwC) Australia is under fire after a former partner leaked confidential government tax plans between 2014 and 2017 which were then used to drum up work with multinational companies hoping to sidestep new rules. The Australian scandal is the latest in a number the “big four” professional services firm has faced around the globe.

Related: PwC is selling off its scandal-plagued government consulting business for 67¢ ($1 AUD). From a statement issued by the firm:

PwC Australia has announced today that it has entered into an exclusivity agreement to divest its federal and state government business to Allegro Funds for $1. Both parties are targeting signing a binding agreement by the end of July.

The divestment will create two independent firms, while ensuring that there will be no disruption in vital services to public sector clients. PwC Australia will work with Allegro Funds to ensure a seamless transition.

“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the c.1,750 talented people in our government business. This transaction will result in the first pure play, at scale, government business in the market. This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders,” said Justin Carroll, Board Chair, PwC Australia.

PwC Australia’s acting CEO Kristin Stubbins was asked about the sale in a parliament inquiry:

NSW Greens MLC Abigail Boyd told the inquiry the sale was a “PR exercise” and asked Ms Stubbins if that was an admission PwC could not conduct government business in an “ethical manner.”

“No, it’s not,” Ms Stubbins said. “It’s an announcement that looks at the situation and what is best for our people, and to ensure continuity of service to our government clients.”

“There will be no question around management of conflicts at all in a completely separate business.”

And one more from AFR: PwC needs a ritual sacrifice to staunch the bleeding

MOVING ON.

In a milestone moment for the creation of a global common language for sustainability reporting, the International Sustainability Standards Board (ISSB) on Monday issued its first two standards. Journal of Accountancy reports:

IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2, Climate-related Disclosures have an effective date of Jan. 1 for some portions, pending adoption in more than 140 jurisdictions worldwide.

IFRS S1 features a global baseline for reporting requirements on the disclosure of sustainability-related risks and opportunities. IFRS S2 features reporting requirements specific to climate-related disclosures, in concert with the reporting framework established by IFRS S1.

“Today represents the outcome of more than 18 months of intense work to deliver an inaugural set of sustainability disclosure standards for the global capital markets,” Emmanuel Faber, ISSB chair, said in a news release. “The ISSB standards have been designed to help companies tell their sustainability story in a robust, comparable, and verifiable manner. We have consulted closely with the market to ensure the standards are proportionate and will result in disclosures that are relevant for investment decision-making.

On Thursday, U.S. Senator Rand Paul (R-KY) joined Senators Bernie Sanders (I-VT) and Chuck Grassley (R-IA) in introducing legislation that would require the Department of Defense to finally pass a full, independent audit in fiscal year 2024. If enacted, the Audit the Pentagon Act of 2023 would require any DOD component that fails to complete a clean audit opinion to return 1 percent of its budget to the Treasury for deficit reduction. “From buying $14,000 toilet seats to losing track of warehouses full of spare parts, the Department of Defense has been plagued by wasteful spending for decades. Every dollar the Pentagon squanders is a dollar not used to support service members, bolster national security or strengthen military readiness,” Grassley said. “The Department of Defense should have to meet the same annual auditing standards as every other agency.”

Men are giving up remote work and returning to offices in the US faster than women, according to new government data, reports Bloomberg:

The share of men who worked at least partly at home on an average day dropped to 28% in 2022 from about 35% the year before, results of an annual survey published Thursday by the Bureau of Labor Statistics showed. For women, the share working at least partly at home fell only slightly, to 41% from 41.5%.

In total, 34% of Americans said they worked at least partly at home in 2022, down from 38% in 2021. But that was still well above the 24% who reported working at least partly at home in 2019.

Here’s a cool profile on Myrna Bowie, who was among Minnesota’s first women Certified Public Accountants and is now likely the oldest practicing one at 90. “I don’t feel much different than when I was 21. But I think loving what you do every day and a grateful heart, I think that goes a long way,” she told the Post Bulletin:

When Myrna Bowie took a job as a junior accountant in 1958, her boss at the tax practice made clear to her that she would not be meeting clients outside of the office.

Myrna was a 25-year-old former farm girl in a male-dominated profession, after all, and her boss was convinced that his clients would not accept a woman accountant. Best to keep her in a hot muggy office without air-conditioning where you wouldn’t be seen. But Myrna was determined. And after persistently bugging him, her boss relented and allowed her to attend a business trip in Brownsville to meet with farmers about their tax returns.

Ex–Edward Jones advisor Jonathan LeVar helped a married couple transfer and consolidate four IRAs but was hit with a complaint when they incurred a tax penalty, he has won expungement:

LeVar’s instructions “concerning the IRA rollovers were apparently partially correct, and but for the fortuitous circumstance of the IRS’s modifying permissible IRA rollovers, they would have been totally correct if the transfers occurred prior to January 2015,” wrote arbitrator Paul Allan Massaro.

LeVar conceded that he had not been aware of the rule change when he issued the rollover instructions but added that he had not been authorized by Edward Jones to provide tax advice, that he never told the clients that he was a tax advisor, and that the clients had been working with a certified public accountant at the time, Massaro noted.

Some other stuff:

Have a great week! I mean that.

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