Good morning, happy Monday, etc. etc. Here’s the news or what passes for it in our sector this time of year.
Project Everest claims another one.
How it started:
Our article: Woman Quits Her Job to Be CFO For Big 4 Business That Doesn’t Exist Yet (January 12, 2023)
EY finance chief left after failure of spin-off plan
Jamie Miller, who was appointed global chief financial officer of EY in January, quit the accounting firm after less than six months following the collapse of its plan to spin-off its consulting business.
Miller, a veteran finance executive who was lured to EY from the commodities trading firm Cargill, had been lined up to become chief financial officer of the consulting business if the spin-off had gone ahead.
Her resignation in June, which has not previously been reported, came just weeks after EY cancelled the break up.
“I joined EY to help the organisation pursue a transaction,” Miller said in a statement to the Financial Times. “With that off the table I have left to pursue other opportunities. EY is an exceptional organisation with thoughtful leaders and I am proud to have been part of their journey.”
The Illinois CPA Society (ICPAS), in partnership with the Center for Accounting Transformation, is launching a new, national survey to gain fresh insight into what’s driving the decline in individuals pursuing the certified public accountant (CPA) credential:
This survey will expand the reach of the one ICPAS deployed in fall 2020, allowing for direct comparisons against previous findings, which were published in the 2021 Insight Special Feature, “A CPA Pipeline Report: Decoding the Decline.” The new findings will be published and shared to bring awareness of, and renew focus on, the most relevant and effective strategies to promote the CPA credential and ensure its sustainability and relevance moving forward.
A key focus of this survey is to understand why a growing number of accounting students and young professionals in accounting and finance careers don’t finish the CPA exam or elect to never take it at all. Accounting and finance students and professionals under the age of 35, with and without the CPA credential, are encouraged to complete the survey. The organizing partners also encourage all accounting and finance professionals to share the survey link with those they know in the target audience.
The survey will close Dec. 15, 2023.
Here’s an interesting case. An analyst sued BNY Mellon and Deloitte in 2019 over a valuation tool he created that Deloitte reverse-engineered so they could use it too. An appeals court just shot him down and the judge said he should have put a password on the spreadsheet:
A U.S. appeals court on Friday revived a single claim in an investment analyst’s lawsuit accusing Bank of New York Mellon Corp of improperly sharing a valuation tool he created with Deloitte, allowing the consulting firm to reverse-engineer his work.
A three-judge panel of the New York-based 2nd U.S. Circuit Court of Appeals said analyst Andre Pauwels failed to take steps to safeguard his model for evaluating energy-sector investments, and could not now claim that it was a trade secret and the two firms had misappropriated it.
But in a 2-1 split, the court said Pauwels could pursue an unjust enrichment claim against BNY Mellon for allegedly sharing the model with Deloitte to avoid paying the firm to develop a similar one.
Pauwels, who is based in London, began working with BNY Mellon as an independent contractor in 2009 and later developed a model for valuing energy investments, according to court filings.
Pauwels could have sought assurances that his model would be kept confidential before sending it to various BNY Mellon employees, or protected the spreadsheets with passwords or encryption, Circuit Judge Robert Sack wrote.
Puget Sound Business Journal wrote “Lakemont estate owned by former EY accountants hits the market” so of course we had to check it out. Both CPAs, Mike Gibson is a retired audit partner and his wife Kristy worked at EY too, now she runs a recruiting firm. Who says accounting doesn’t pay??
The PwC tax scandal has eroded the public trust and is leaking over into the already quite untrusty audit sector. AFR:
Retailer shareholders were “extremely disappointed” by the PwC tax leaks scandal because it raised doubts about the big four firms’ ability to carry out high-quality audits of listed companies, the Australian Shareholders’ Association has told an inquiry into the sector.
A joint parliamentary inquiry into the way the big four accounting firms are structured also heard on Friday that the scandal was “symptomatic of a structural problem” within the accounting sector caused by the tension between the firms acting to maximise profits while also being expected to act in the public interest.
Shareholders needed to be able to trust financial reports that have been signed off by an auditor, the association’s chief executive, Rachel Waterhouse, told the inquiry on Friday.
“We know from our retail shareholders that they’re extremely disappointed by the PwC failure,” Ms Waterhouse said.
New Jersey Society of CPAs CEO and executive director Aiysha (AJ) Johnson gave an interview to NJBIZ now that she’s been in her seat for a few months and has been meeting with members to get caught up on what’s important to them. Of course the pipeline is a hot topic on NJCPA members’ minds, here she is on 150:
Q: Do you think the 150-credit hour educational requirement has helped to exacerbate the CPA shortage?
A: The AICPA and state accounting societies are talking about it, and the impact on the profession’s future. In New Jersey, innovative work-credit programs have been launched at Saint Peter’s University and PwC; and at Seton Hall and Withum. We will have additional conversations around this. If the 150-hour requirement is here to stay, then we’ll see what else firms can do to help. NJCPA also has a task force looking into this, and the team will make their recommendations to the board in December.
The Kiplinger Tax Letter covers two Supreme Court cases that could change the tax landscape:
First, is taxing unrealized income valid? This has come up in a case in which a couple who are minority owners of an Indian corporation were charged the repatriation tax. The 2017 tax law assessed a mandatory one-time tax of up to 15.5% on previously untaxed offshore accumulated earnings of many U.S.-owned foreign corporations. The tax was due from U.S. owners based on their ownership, regardless of whether they got a distribution. The couple asserts that because the tax is assessed on unrealized earnings, it’s not an income tax and must be apportioned among the states to be a constitutional tax under the Sixteenth Amendment.
A second case involves the judicial deference given to government regulations.
PwC US chief strategy and communications officer J.C. Lapierre talks about how to overcome imposter syndrome for Insider:
In my 27 years at PwC where I currently serve as chief strategy and communications officer, I’ve built a career I never could have imagined. But that would not have been possible if I’d let my fear win, closing doors before I even knew I might want to knock on them.
Sometimes it’s been difficult not to give into the instinct to flee to my comfort zone — I felt it the first day I walked into PwC.
It was a complete 180 from my previous job working in a restaurant. I had never had an internship, knew nothing about accounting (I’d never even done my own taxes!) and I didn’t even know what the firm did. It was terrifying — the first of many times impostor syndrome has crashed the party during my career.
Tuesday, October 10 is World Mental Health Day, I know this because CPA Letter Daily is focusing solely on mental health topics for today’s newsletter and will not be publishing tomorrow. Here are two of the articles they linked to:
6 things we get wrong about self-care from CPA Australia’s INTHEBLACK:
1. Self-care is an occasional treat.
Self-care is about more than an occasional massage or weekend away. Self-care is essential, regular maintenance of a person’s mental, emotional and physical wellbeing. It includes getting enough sleep and exercise, eating well and more.
2. Self-care is just a box to tick off on the “to-do list”.
Self-care should be prioritised and embedded into the fabric of everyday life, rather than be seen as something to cram onto an already-packed schedule.
3. Self-care is about body improvement.
Self-care is not about pleasing others, physical appearance or self-improvement to suit culturally prescribed ideals. Rather, it is the act of individuals nurturing themselves for their own sake.
Tips to avoid loneliness when working from home from FM Magazine:
The COVID-19 pandemic accelerated a shift to remote work that was already happening. But while people may love the lack of a commute and the freedom, they may also miss the social side of the office. A 2021 survey of 2,000 UK and US office workers by Kadence, the hybrid workplace software company, found that 81% of workers under the age of 35 and 64% of workers over 35 were concerned about loneliness if they were to continue to work from home full time. Other research has drawn links between tech-enabled distance working and loneliness. So, if you are feeling isolated while working remotely, what can you do about it?
This year’s World Mental Health Day theme is “mental health is a universal human right.”
Purposely last and possibly least, RSM’s Brian Becker gave a speech (and a pitch, it seems) at the Tippie College of Business at the University of Iowa last week:
“The pandemic changed things. There’s never been a time when people have been more lonely,“ Becker said. ”(In the speech) I’m going to emphasize on connecting with people on a more human level — so you can understand what people are trying to accomplish and help.
“Successful accountants are able to have conversations person-to-person to really understand where the skills are,” he said. “Professionals need to be able to communicate. A lot of people listen to respond, rather than listening to understand.”
Becker, 57, lives in Cedar Rapids and manages the Chicago-based RSM from Eastern Iowa. He said listening is a learned skill. At RSM, they are teaching how to listen and how to understand, he said.
That’s enough news for now. Hope you all have a pleasant week and if you see anything we should know about, do reach out.
