Happy snowy Monday and welcome to the first Monday Morning News Brief of 2025! While I have you, allow me to ask you to take our 2025 Predictions for the Accounting Profession survey — it’s quick, simple, and we don’t want your email. It’s going well so far (not sarcasm):
Alright, some news.
A user on r/recruitinghell was rejected from a top 50 firm on Christmas.
This is a top 50 firm's rejection message apparently. pic.twitter.com/lXmVQ0T11F
— Going Concern (@going_concern) January 6, 2025
People in the comments are ragging on the terse email but honestly I don’t hate it? Don’t waste my time with a bunch of BS that you don’t actually mean, ya know? Tell me to fuck off and we can both move on.
Also:
1.2k updoots lol.
KPMG is up to something:
Accounting giant KPMG is moving to launch a new legal services business in the United States, taking advantage of relaxed law firm ownership rules in Arizona.
KPMG Law US, a subsidiary of KPMG US, applied to the Arizona Supreme Court to operate as an alternative business structure under a state program that allows non-lawyers to co-own law firms, a KPMG US spokesperson told Reuters.
A committee will discuss KPMG US Law’s bid at a Jan. 14 meeting, according to the court’s website. The court will decide on approval if the committee recommends licensure.
Business Insider wrote up a PCAOB report that discusses culture at the top six firms:
Accounting firms have been making more errors, but bosses are split on whether remote work is to blame
64% of respondents said that improving work-life balance for firm personnel improves audit quality.
However, roughly a third of senior executives and partners from the six major firms surveyed said that contemporary remote and hybrid work culture has negatively affected auditing firms’ quality control.
They said a loss of in-person interactions was making assimilation into the firm’s culture more difficult, leaving newer recruits less attuned to the cultural importance of audit control.
Development opportunities were another concern, with some respondents saying firms were losing the “apprenticeship culture” they traditionally favored.
Sure it has nothing to do with the (tens of?) thousands of Indians firms have on the grind for them these days. See more from the PCAOB: Insights on Culture and Audit Quality [PDF].
Stephen Foley also addressed the PCAOB report in the FT opinion pages:
The Gen Z problem for audit firms
The report noted, hardly uniquely, that “the younger generation have differing views on careers than their older counterparts, with many viewing their work more as a job, rather than a career, and are therefore more likely to leave the profession if presented with more attractive opportunities”.
Intriguingly, it also noted that audit firms with the highest deficiency rates in recent years seemed to have the highest percentage of senior managers and partners who were hired from other firms rather than having started their career in house. This suggests firms that can hold on to employees for the long term have an advantage in building a strong culture and keeping standards high.
Remember this?
Firms have expressed their “concerns” too. FT:
Accounting firms say the metrics tell investors little about whether an audit is being done well and are likely to be misunderstood without additional context.
“The value of the metrics is speculative and may in fact confuse investors and other stakeholders, rather than benefit them,” Deloitte wrote in a letter to the SEC.
CohnReznick wrote: “No two firms are identical as are no two issuer audits.”
Several accounting firms argued disclosing the metrics to the audit committee of a company’s board would be better than making them public for shareholders because that is the committee that ultimately appoints the auditor.
As a refresher, these are the metrics the PCAOB wants firms to start reporting:
- Partner and Manager Involvement. Hours worked by senior professionals relative to more junior staff across the firm’s large accelerated and accelerated filer engagements and on the specific engagement.
- Workload. For senior professionals who incurred hours on large accelerated or accelerated filer engagements, average weekly hours worked on a quarterly basis, including time attributable to all engagements, administrative tasks, training, and all other matters.
- Training Hours for Audit Personnel. Average annual training hours for partners, managers, and staff of the firm, combined, across the firm and on the engagement.
- Experience of Audit Personnel. Average number of years worked at a public accounting firm (whether or not PCAOB-registered) by senior professionals across the firm and on the engagement.
- Industry Experience. Average years of career experience of senior professionals in key industries audited by the firm at the firm level and the audited company’s primary industry at the engagement level.
- Retention of Audit Personnel (firm-level only). Continuity of senior professionals (through departures, reassignments, etc.) across the firm.
- Allocation of Audit Hours. Percentage of hours incurred prior to and following an issuer’s year-end across the firm’s large accelerated and accelerated filer engagements and on the specific engagement.
- Restatement History (firm-level only). Restatements of financial statements and management reports on internal control over financial reporting (“ICFR”) that were audited by the firm over the past three years.
Holthouse Carlin Van Trigt of Los Angeles explains its growth strategy to Los Angeles Business Journal after opening a new office in Salt Lake City:
Chief Executive and Managing Partner Vicken Haleblian said the firm – typically referred to as HCVT – made the decision based on its “go to the talent” growth strategy.
“Rather than make acquisitions, we are expanding in – and to – dynamic metro areas with thriving business communities, pools of experienced talent and a concentration of exceptional accounting programs,” Haleblian wrote in an email. “The presence of accounting programs is important – if not essential – to this approach, because the schools give us ongoing access to high-caliber job candidates each year and a sizable, alumni network with professional accounting experience.”
The firm says that it’s a hard sell to get accounting professionals in SLC to move to SoCal so they decided they’ll come to them instead.
One of the partners thrown under the bus post-tax scandal by PwC Australia has cleared his name:
The main disciplinary body for the big four accounting firms has dropped an investigation into a former PwC partner forced out by the firm after being linked to its tax leaks scandal.
The inquiry into Wayne Plummer was dropped late last year with no findings against the former tax risk leader, but Chartered Accountants Australia and New Zealand says it is still investigating individuals alleged to have been involved in the scandal.
Dropping the investigation comes after Mr Plummer secured a settlement against PwC reportedly worth about $2 million, after flagging legal action over its decision to publicly link him to the scandal and remove him from the partnership over unspecified adverse findings.
Earlier:
OK, that’s all I have for now. If you see an interesting story, have a tip to share, or are just really lonely and need someone to pretend to be happy for you because you decided to do Dry January reach out via email or text any time. Have a wonderful week!
