This would have been your Monday news brief but we’re assuming at least a couple people got the day off yesterday. Welcome back to the grind.
Candidate numbers for US accountancy exams drop to lowest in 17 years
New figures from the American Institute of Certified Public Accountants showed the shortage of CPA candidates that has plagued the profession in recent years worsened in 2022, dashing hopes for a quick rebound from the pandemic.
The number of people taking CPA exams in 2022 was just over 67,000, down from 72,000 in 2021 and short of the institute’s forecast of 74,000, according to a note in AICPA’s annual report published this month. That was the lowest level since the beginning of records for the modern exam in 2006.
Details shared among the AICPA’s governing council showed that even that figure was flattered by candidates from overseas. The number of CPA exam modules being sat by US candidates fell more than 10 per cent year on year.
Meanwhile, this is from South China Morning Post:
The demand for accounting professionals in mainland China has been steadily rising over the past few years, and is only expected to increase further with the development of the Greater Bay Area, according to industry experts.
ACCA, an international accounting body, said its membership numbers in mainland China had increased by 20 per cent to 29,000 in the five years to March 2022, representing 12 per cent of its global total of 241,000.
There are another 169,000 prospective members on the mainland in the form of those studying to qualify as accountants.
“We have seen the demand for accountants rising across China to meet business growth goals, especially post-Covid, following the hiring backlog created by the pandemic,” said Helen Brand, the CEO of ACCA, in an interview with the Post during a recent visit to Hong Kong.
Ian Gow and former KPMG director Stuart Kells, authors of the 2018 book “The Big Four: The Curious Past and Perilous Future of the Global Accounting Monopoly,” write about Big 4 integrity for The Mandarin:
The PwC affair is of course not the first of its kind, even for PwC. In the 1990s and 2000s, Caterpillar Inc. reportedly paid PwC US$55 million to establish a tax arrangement that shifted profits from the US to Switzerland, delivering tax savings estimated at more than US$2.4 billion.
PwC partner Thomas F. Quinn, who helped design the Caterpillar scheme, told a colleague that they had to ‘create a story’ and ‘put some distance’ between Caterpillar’s US managers and the company’s Swiss spare-parts business. ‘Get ready to do some dancing,’ Quinn famously confided.
The other Big Four firms have had their share of tax scandals — some of them at least as serious as the current PwC one.
Institute of Chartered Accountants in England and Wales (ICAEW) is hoarding the funds paid to it as a result of fines, writes Richard Murphy on his blog Funding the Future. There is apparently a press release about these findings that is inexplicably in PDF format, thankfully he ctrl+V’d it in the blog post.
It is time for the Institute of Chartered Accountants in England and Wales to put the fines paid by to [sic?] members to use for the benefit of society
New research on the accounts of the Institute of Chartered Accountants in England (ICAEW) and Wales by researchers at the Corporate Accountability Network and academics at the Sheffield University Management School has shown that the ICAEW has benefitted from £148 million of fines and related cost recoveries in excess of expenditure incurred since 2015.
The penalties in question have all been paid by chartered accountants who are members of the ICAEW in respect of substandard work that they have done at cost to members of society at large.
Under an arrangement between the ICAEW and the UK Financial Reporting Council (FRC) reached in 2004 that institute guaranteed to underwrite the cost of its members being disciplined by the FRC. The ICAEW imposes a levy on its members to cover the costs the FRC bills to it for doing this. In exchange the FRC returns fines on ICAEW members to that institute.
As the scale of accounting scandals, and public and political anger about them, has grown in recent years so too has the level of fines charged on ICAEW members. They averaged £13 million a year, or £104 million in total, over the period. Costs paid by those who have been fined also exceed those the ICAEW incurs, adding more than £40 million of additional funds to the ICAEW’s coffers.
There is no evidence that the ICAEW has spent any of this money, which now sits on its balance sheet. The ICAEW says that the funds form a strategic reserve but its current strategic plans all look to relate to issues that should be funded by its members and none look to have any significant cost attached to them.
More on that later.
Consulting giant PwC blocked the Australian Tax Office’s attempts to garner more information about its involvement in the tax leak scandal at least six years ago, prompting the ATO to report its “significant concerns” to federal police in 2018.
ATO Commissioner Chris Jordan told a parliamentary committee on Tuesday evening his office noticed that a few multinational companies had “suspiciously and quickly” tried to rearrange their affairs after the Multinational Anti-Avoidance Law was introduced in January 2016.
Jordan said swift action in 2016 from the tax office saved the federal government from losing about $180 million a year, but the ATO’s investigations into what had occurred were frustrated by false claims of legal professional privilege.
“We had to issue further notices to obtain information that was clearly not subject to [legal professional privilege] such as internal PwC emails,” he said. “Despite our best efforts, due to the obstacles placed in our path, it took a long time to obtain the information requested.”
The accelerator backed by the Irish rock band you haven’t thought of since they forced an album onto your new iPod has partnered with KPMG:
U2-backed accelerator Endeavor Ireland has joined forces with Big Four accounting firm KPMG and international law firm Maples to identify and mentor high-impact entrepreneurs across the country.
Endeavor, a global not-for-profit, established an Irish operation in 2019 and now works with 11 founders across eight Irish businesses. The business here is chaired by U2′s The Edge.
You have until the end of the day to submit comments to the PCAOB on Modernization of Standards Addressing Core Auditing Principles and Responsibilities.
High Point University class of 2023 graduate Tyler Schmitter has been featured on the school’s website, he’s joining Deloitte as a tax delivery consultant in the International Tax Group.
Juventus Football Club has been fined for “a wide-ranging scandal involving false accounting and transfer trickery that has rocked Italian football.”
Some other stuff:
New [Accounting] Rules Reveal $64 Billion of Hidden Leverage at Big US FirmsPwC Australia Puts Nine Partners on Leave as Scandal DeepensEY UK named Financial Times Europe Climate Leader for a consecutive yearTikTok Creators’ Financial Info, Social Security Numbers Have Been Stored In China
Looks like that’s all I’ve got. Be well and if you see anything interesting go down out there this week do give me a shout.