Good morning, numbernauts. Can I interest you in some news?
This is fine. Everything is fine. Accounting errors force US companies to pull statements in record numbers, writes FT:
The number of US companies forced to withdraw financial statements because of accounting errors has surged to a nine-year high, raising questions about why mistakes are going unnoticed by auditors.
In the first 10 months of this year, 140 public companies told investors that previous financial statements were unreliable and had to reissue them with corrected figures, according to data from Ideagen Audit Analytics.
That is up from 122 in the same period last year and more than double the figure four years ago. So-called reissuance restatements cover the most serious accounting errors, either because of the size of the mistake or because an issue is of particular concern to investors.
The Times did a long read on PwC UK and mountains new senior partner Marco Amitrano has to climb. TLDR:
A longer excerpt from the intro:
Spirits were high at PwC in June. Britain’s biggest professional services firm was celebrating its 175th anniversary at The Rooftop, a cocktail bar overlooking Trafalgar Square, with panoramic views stretching across the capital.
On that warm summer’s evening, waiters hovered with canapés and champagne, while the firm’s business/casual-clad top brass were also toasting a change of the guard.
Kevin Ellis, PwC’s avuncular boss, was handing the reins over to Marco Amitrano, a British-Italian PwC lifer with an easy charm. In a short speech, Amitrano, whose accent belongs to his home town of Luton, thanked his predecessor and delivered a rallying cry for the firm’s continued success. He also thanked the two women he had pipped for the top job, Laura Hinton and Hemione Hudson.
Six months on and the mood is less relaxed at PwC, the biggest of the big four accounting and consulting giants in the UK. In the face of falling profits, which are blighting all its rivals, too, Amitrano has been cutting from the firm’s partner ranks and wrestling with a sprawling structure that he believes, insiders said, has become “flabby” and inefficient after years of double-digit growth.
His work is not done. Insiders believe that in an effort to further clamp down on costs, Amitrano could also cut from PwC’s large pool of middle-ranking staff — the well-paid employees below partner level. The cuts will be painful, but many in the partnership believe they are vital for the long-term health of the firm.
Some good news for the PCAOB haters out there:
PCAOB Critic Picked for SEC Chair, Raising Potential for a Smaller Audit Watchdog
President-elect Donald Trump’s plan to nominate Paul Atkins, a longtime critic of the Public Company Accounting Oversight Board, to lead the regulator that oversees it could spur major changes at the audit watchdog, possibly including a move to abolish it.
If approved, the conservative lawyer and former Republican member of the Securities and Exchange Commission during the George W. Bush administration would serve as chair of the securities regulator.
Atkins is expected to ease overall oversight, including of cryptocurrency firms, but his past criticism of the PCAOB could signal an even more drastic shake-up to audit regulation. That would likely mean a softer regulatory touch with accounting firms and a new leader to replace Chair Erica Williams, longtime observers say.
Deloitte announced Jason Salzetti has been named chair and chief executive officer of Deloitte Consulting LLP, effective Jan. 27, 2025:
“Jason is a visionary leader with a proven track record of achieving impactful results for our clients and fostering a culture of apprenticeship and growth for our professionals,” said Jason Girzadas, chief executive officer, Deloitte US. “As we navigate a complex and dynamic environment, we are confident that Jason will drive Deloitte’s continued market leadership while bringing innovation and transformation capabilities to our clients to help position them for their success.”
Salzetti began his career at Deloitte and brings nearly 30 years of experience in large-scale technology and business transformations.
Salzetti succeeds Dan Helfrich who has led Deloitte Consulting since 2019. Coincidentally, Georgetown University just wrote an article about Helfrich’s side hustle:
It’s 3 p.m. on a Friday, and Dan Helfrich (SFS’98, MBA’99) is in the press box above Georgetown’s soccer field.
Broadcast headset on, Helfrich scans a stat sheet while keeping a close eye on the game.
“Providence just isn’t able to find a way through the impenetrable Georgetown defense,” he says with 17 minutes left as the Hoyas maintain their 3-0 lead.
Helfrich is the U.S. chair and CEO of Deloitte Consulting. He leads 85,000+ employees to provide consulting services for clients across the United States.
But every fall, no matter his schedule, he carves out time for his “side hustle”: broadcasting Georgetown men’s soccer games.
Ed Mendlowitz talks about departing AICPA CEO Barry Melancon’s words of wisdom to small firms:
Barry Melancon is retiring as president and CEO of the AICPA at the end of this month. One of his last presentations in that role was at the Accountants Club of America last week.
[snip]
Barry feels there is an important and definite need that small firms are filling. But he suggests that small practices would be better positioned for the future if they concentrated on developing a specialization in a niche. To do this, they should decide on their business model, who their market is, what they feel they could do better than anyone else or at least excel at, examine what their clients’ needs are and what the market would value. They should also recognize who they could partner with when a client requires services beyond their expertise. He suggested that a small firm can no longer be all things to all clients as many have been in past times through to the present.
I liked what Barry said, how he said it and I agree with him. However, I think that when niches are identified, they refer to technical services, types of accounting services or industries. I think that small accounting practices need to consider “trusted advisor services” as a niche. I would define this as being available to clients when they need guidance, want a knowledgeable and independent sounding board, need someone who is aware of their entire situation and who is responsible for keeping everything on track.
Raconteur asks if less schooling is the solution to the accounting talent crisis. At this point we know the answer.
One viewpoint:
“Less schooling is definitely the answer to getting Gen Z and Gen Alpha engaged in an accountancy career,” says Kevin Fitzgerald, a managing director at HR platform Employment Hero. “I know so many people who are put off by the quantity of studying and exams required.”
Fitzgerald trained as an accountant through the ACCA. During this time, he worked at a small accountancy firm to gain experience, but fitting this around his study schedule was difficult. “I liked the fact I could gain actual business experience,” he says. “The downside was the 16-hour days working and studying, which meant no real work/life balance, but more stress and a feeling of burnout. It’s certainly not for everyone.”
Another viewpoint from the managing director of an outsourcing firm:
Others are less convinced. “Changing the requirements should, in theory, allow more people to gain licenses quicker,” says Vipul Sheth, managing director of accountancy outsourcing firm Advancetrack. “However, there is a risk that quality is compromised if the newly licensed professionals lack the appropriate skills to handle the responsibility that comes with them.”
Respondents to a PwC survey want to see results from AI:
The potential applications of artificial intelligence (AI) have driven stock market performance in recent years, but “the pressure is on” for companies to start delivering results over the next year, according to a new report by PwC.
After a prolonged period of speculation surrounding the technology’s uses, it found that 66% of investors want to see proof of improved productivity over the coming 12 months thanks to the adoption of AI.
Over the next year, 63% of those surveyed want to see revenue increases as a direct result of AI, with 62% expecting an increase in profitability thanks to the technology.
Kk that’s it for now. Give me a holla via email or text if you see something interesting, have a tip, or just want to complain. Now go out there and make a difference or something.