September 24, 2022

Tuesday Morning Accounting News Brief: PwC’s Skepticism Fail; KPMG’s Appalling Work; Marcum Deal Done | 9.6.22

Ed. note: we usually do these headline roundups on Monday but since Monday was a holiday (I know, some of you probably didn’t notice), you’re getting it on Tuesday instead. Welcome to a new work week! YAY!

A former accounting specialist for WFYI Public Media in Indianapolis has been charged with conspiracy to commit wire fraud and faces a maximum penalty of 20 years in federal prison if convicted. Stanford Law School professor and former SEC commissioner Joseph Grundfest argues that the SEC’s proposed prohibitions on certain contract terms in investment advising go far beyond disclosure and impose substantive regulatory obligations. Marcum and Friedman are now officially merged as of September 1; the approximately $1 billion, 3,500 person firm is called — drum roll — Marcum. KPMG has been accused of “appalling” audit work that allowed a US-listed Chinese biotechnology company to carry out a “brazen” $400 million accounting fraud, the Hong Kong High Court heard on Monday. EY’s leaders are expected this week to give the green light to splitting its auditing and consulting businesses, paving the way for the biggest shake-up in the accounting profession in more than 20 years, read the Wall Street Journal exclusive. FASB isn’t including NFTs in its crypto accounting review. An investigation from the Financial Reporting Council (FRC) has determined that PwC, and Partner Richard Hughes “failed” to approach the audit of BT’s treatment of the debt adjustments with “the necessary professional scepticism”, adding that they had not “adequately” documented the work across the entirety of the BT Italy adjustments (air quotes from Consultancy.uk).

Who got yesterday off?

I finally bought Daniel Susskind’s “A World Without Work: Technology, Automation, and How We Should Respond,” book review to follow. Also reading “Advice for a Successful Career in the Accounting Profession: How to Make Your Assets Greatly Exceed Your Liabilities” by Jerry Maginnis and Jerry has been kind enough to let me grill him about it when I’m done. Stay tuned.

Here’s what we’re working on this week:

  • Are 2022 raises lining up with salary projections from last year?
  • Keeping an eye on the post-Labor Day RTO push
  • A long overdue discussion of mental health in the profession
  • Does Big 4 have a bullying problem?
  • Revisiting the issue of unionization at accounting firms, why not?
  • Is there anything that can be done about the morale problem at accounting firms?

Oh and we need to have a chat about the auditor shortage. In May, I asked if auditors are harder to find than a PS5, knowing of course that the answer was yes. All these months later I finally have my PS5 (woooo!) and yet we’re hearing that the auditor shortage is only getting worse.

That’s all I’ve got. Hope everyone had a nice Labor Day. As always, reach out to us if you have a story idea, want to swap cat pics, or just need to vent. And subscribe to our newsletter for more headlines like these, sometimes even with cat pics.

Just for shits and gigs, here’s 12 minutes of satisfying hydraulic press crushing. Fast-forward past the Kirby at 3:46.

Have a great week, everyone!

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