Sup! We usually do these on Monday but since many of you were off both Monday and Tuesday for Independence Day let’s do it now. Hope everyone had a safe and restful holiday. GO ‘MURICA.
On Monday we asked Twitter who’s off, the majority of respondents were. I’d heavily judge that 15.4% who were off but working but I did some work on Monday too. ICYMI: Hype man Peter Olinto is leaving Becker.
Who’s off today and tomorrow?
— Going Concern (@going_concern) July 3, 2023
So what happened while we were celebrating independence?
Google is said to have received confidential information about the start date of a new tax law leaked from Australian government tax briefings, reported Reuters. This is the first time a company has been directly linked to the national scandal involving the “big four” accounting firm that was first revealed in January, they said.
In one instance, one of these colleagues emailed a Google employee in August 2015 to confirm the likely start date for the government’s Multinational Anti-Avoidance Law (MAAL), according to one of the sources.
While the Jan. 1, 2016 start date for the law had been announced in the government’s budget papers in May 2015, the confirmation that the government would go ahead with that date came from confidential government briefings, the source said.
At the time, a number of organisations had called for the government to delay the planned January 2016 start date.
The former partner did not tell Google the information was confidential, the source said.
The Florida State Fire Marshal is investigating a suspicious fire at Orange Park CPA in the Jacksonville burbs. The fire is “suspicious in nature,” reported Action News Jax.
Point to TaxNotes for this headline: IRS to Beyoncé: Pay Your Tax ‘Bills, Bills, Bills’
S&P 500 companies paid $5.3 billion in audit fees in 2022 according to data from Ideagen Audit Analytics. That’s only 3.2% than they paid in 2021, beating inflation of 6.5%. PwC gets the biggest slice of the pie and brought in $1.9 billion in 2022, no more than the prior year. More from FT.
From CPA Journal: ICYMI | Independence Matters
Auditor Independence is integral to the financial reporting system and trust in the capital markets. But recent cases against large audit firms underscore the challenges firms face in ensuring independence and the seriousness with which the SEC enforces its regulations. In the author’s opinion, too many auditors misinterpret the SEC’s independence rules, which results in a checklist mentality to compliance that misses the true spirit of the SEC’s independence requirements.
The recent SEC proceedings against Ernst & Young and three of its partners provide a vivid reminder of some of the pitfalls that may result in serious independence violations by unwary auditors. Ernst & Young (EY) and its partners solicited and obtained from the audit client’s chief accounting officer (CAO) other firms’ bid proposals and other confidential information and contravened the audit committee’s intent to conduct a fair and competitive search process [Accounting and Auditing Enforcement Release (AAER) 4239 (August 2, 2021)]. “EY and EY Partners,” the SEC noted, “should have known that the manner in which EY obtained the engagement would cause a reasonable investor to conclude that EY was not capable of exercising objectivity and impartiality upon becoming Issuer’s independent auditor and that such conduct therefore would result in a violation of the Commission’s and the [PCAOB] auditor independence rules.” The issuer was not named in the release, but press reports identified it as Sealed Air.
If you’re feeling down about your pay, just look at what Big 4 firms pay in Ireland. Employees of Deloitte in Ireland have an average base salary of €39,000, and an average bonus of €3,000. For junior accountants, average pay is €26,954 ($29,311 USD). According to Payscale, EY has the best average pay of the Big Four in Ireland at €50,000, with an average bonus of €8,000 bonus. The figures are bolstered by senior executive positions such as technical director (€112,189) and executive director (€129,005), and management positions like senior IT project manager (€82,337), operations project manager (€65,272) and senior tax manager (€82,117). KPMG Ireland staffers earn an average of €44,000, with average bonuses of €4,000, and at PwC, workers earn €36,000 per year on average, with an average bonus of €8,000.
In Australia, a former KPMG partner turned whistleblower has urged the federal government to consider a royal commission into the consulting industry and to formally ban firms that breach legal and ethical standards. The Guardian:
In late 2021, Brendan Lyon told a New South Wales parliamentary inquiry that he was pressured to amend his work, which found the state’s budget was $10bn worse off than Treasury claimed.
He told the committee he believed senior partners at KPMG were conflicted because they had promised Treasury they could achieve a result that was not possible – a claim rejected by KPMG.
Lyon has now told a separate Senate inquiry into the federal government’s use of consultants that a more thorough, wide-ranging investigation of the industry would be beneficial.
Employees are rushing to experiment with artificial intelligence tools that can help them do their jobs more efficiently, but in the process they might be putting their employers at risk, according to a new report by KPMG Canada.
Interest in artificial intelligence has exploded in recent months, said Zoe Willis, who leads KPMG Canada’s data and digital practice. Though the technology has existed for two decades, it has only recently become accessible to the public through tools such as ChatGPT, the AI chatbot released in November. Some companies have been caught off-guard by employees’ sudden adoption of AI.
“Businesses just haven’t been ready,” Willis said. “They don’t have the policies or the frameworks in place to actually understand how employees and people at work can use it in a safe and responsible way.”
Willis said that while employees are trying to do things “faster and smarter,” a lack of understanding of the technology and its limitations may lead to problems — if, for example, the responses from chatbots are not checked for context and accuracy “because it’s not 100 per cent factual what you get back.”
That’s all I’ve got for now, kinda slow out there. If you see something interesting on your travels across the internet this week, do give me a shout. Have yourself a good short week.