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ICYMI
Here are the five most-read stories on Going Concern this week:
- The Era of the Non-Equity Partner Is Upon Us
- Layoff Watch ’24: KPMG Australia Throws Out Babies and Bath Water in Consulting
- Deloitte Survey: Management Thinks Everyone Is Doing Way Better Than They Actually Are
- As Prophesied, the IRS Is Struggling to Hire All Those New Agents
- AI’s Hype Phase is Dying and Fast
DEI
Companies Are Watering Down Their Diversity Recruiting Programs [Wall Street Journal]
White-collar companies that once championed programs to recruit diverse employees are now tiptoeing away from them. PricewaterhouseCoopers and JPMorgan Chase JPM 1.04%increase; green up pointing triangle are among those that recently removed or altered descriptions of their programs for underrepresented students. The shift came after an “anti-woke” movement took aim at U.S. companies and a Supreme Court decision overturned affirmative action in college admissions.
Deloitte named a Top 50 Employer for Gender Equality [Deloitte]
Deloitte UK has today been named in The Times Top 50 Employers for Gender Equality list for the ninth year running. Deloitte in the UK continues to remain committed to offering our people flexibility in where and how they choose to work and our approach to hybrid working is an important part of how we support our people. We have expanded our Future Leaders Programme, launched in June 2022, to 1,000 people, aiming to improve the representation of women and underrepresented ethnic groups at all levels of our firm. This year’s Deloitte UK partner promotions saw 27 (33%) women being promoted, increasing the total number of Deloitte’s women partners to 412 (30%).
Big 4
KPMG to cut further 200 UK jobs amid market slowdown [Financial Times]
The accounting and consulting business told staff on Thursday that it would axe about 200 back-office and client-facing roles following a review of its cost base, according to people familiar with the matter. As part of the restructuring, KPMG will merge certain back-office functions and “reduce duplication” in parts of its client-facing operations, the people said. The firm declined to comment on which client-facing business lines would be affected.
Local PwC managing partner on how firm is stepping up philanthropic work in Charlotte [Charlotte Business Journal] PwC has leaned in more towards the Mayor’s Racial Equity Initiative, a $250 million public-private venture focused on upward mobility through a range of jobs, technology, neighborhood and educational initiatives. The professional services firm’s engagement with that commitment focuses on bridging the digital divide, Charlotte office MP Emily Pillars said. PwC has pledged $1 million in funding and another $1 million toward pro bono services for the equity initiative. “The funding goes towards providing electronic devices, computers and laptops to underserved communities within the Mayor’s Racial Equity Initiative geography,” Pillars said.
National accounting firm names new Baltimore office head [Baltimore Business Journal]
Baltimore native Mary Kate Federico will lead Ernst & Young LLP’s Baltimore office starting July 1. Federico will replace Arun Subhas, who has run the Baltimore office since 2019. Subhas will continue to work at EY’s local office but was selected to serve as lead tax partner for one of the firm’s multinational clients. Federico will manage EY’s 250-person office, which ranks among the largest accounting firms in Greater Baltimore.
Surveying a Shifting Landscape: The Big Four and the Rising Tide of Advisory Services [CPA Journal]
Around the turn of the century, the largest public accounting firms featured fast-growing advisory services divisions. Tension within these firms, and stricter regulations in the form of the Sarbanes-Oxley Act (SOX), led to divestitures and significant changes in firms’ mix of revenues. The landscape has again shifted, as advisory services have once again expanded and, in some cases, eclipsed traditional assurance work. This article illustrates these trends, describes the contemporary reaction from selected global regulators, and ponders the potential impact on the audit profession.
Technology
AI hallucinations: what business leaders should know [PwC]
If your company is like most, generative AI (GenAI) is already at work. Probably, you’ve stood up a few use cases. Maybe (as we have done at PwC) you’ve already scaled up some. And, most likely, your enterprise software now has embedded GenAI capabilities, which your people are using every day. But as GenAI becomes more critical to daily operations, a common question persists: Can I trust it? Trust in GenAI requires all the traditional drivers of trust in tech: governance, security, compliance and privacy. As with traditional AI, you also need to mitigate bias. But GenAI also adds a new risk, “hallucinations” — outputs that seem plausible but have no basis in reality. Traditional AI sometimes hallucinates too, but more rarely, and it’s usually operated by specialists who can catch these errors. With GenAI, hallucinations can — in some specific instances — pose a risk, especially for GenAI users who don’t have deep AI experience.
Practice
Accounting Guidance for ESG Projects & AI Usage in Auditing [Resourceful Finance Pro]
In a matter of months, companies will possess first-ever guidelines for environmental credit accounting. Public and private firms will be required to follow one model for marking down projects like carbon dioxide offsets. The Financial Accounting Standards Board (FASB) unanimously approved Accounting for Environmental Credit Programs (AECP) on June 17. FASB started working on AECP in 2022, at least in part, to rectify widespread “greenwashing” done by corporations, particularly in the oil & natural gas sector.
The P Word
The Allure of Law Firms for Private Equity [The Deal]
Recent investments by sponsors in accounting firms suggest PE would find attractive targets in the legal profession if more state bar associations allow nonlawyers to own stakes in law firms.
Audit
Trump Media Auditor’s Shutdown Strands Nearly 40% of Ex-Clients [Bloomberg Tax]
The approximately 70 former BF Borgers clients that remain in auditor search mode range from Nasdaq-listed Japanese luxury real estate developer Lead Real Estate Co. to aspiring hoverboard seller MoveIX Inc., traded on the pink sheets, according to a Bloomberg Tax review of securities filings. Costs are an obstacle for some of the smaller former Borgers clients. Others have faced pushback from potential new auditors leery about starting financial checks from scratch, ex-Borgers clients told Bloomberg Tax.
Global Audit Quality Report: a commitment to continuous improvement [EY Global] The full report can be downloaded at that link.
Stakeholders need confidence in the capital markets to make important decisions that drive economic growth. Auditors can help build this confidence through their proven ability to validate and interpret data objectively and independently, before providing the appropriate level of challenge. In this way, audit quality plays a crucial role in creating long-term value for all stakeholders.
Tangentially Related
How Much The Winning Caddie Makes At The 2024 KPMG Women’s PGA Championship [Golf Monthly]
The KPMG Women’s PGA Championship prize money has increased at an extraordinary rate over the past few years, with over $10 million on offer in 2024 compared to $4.5 million in 2021. For many years before that, there was much more of a gradual increase in the total prize pot, having only reached seven figures for the first time in 1990. While the payout figure has generally climbed over the years, it did also briefly fall in 2013 before a 50% jump to $3.5 million in 2015.
Talent
Accounting Firms in OC Report 3% Growth in Employees [Orange County Business Journal]
Of the 47 accounting firms surveyed by the Business Journal, the number of OC employees rose nearly 3% to 6,727 last month from the year earlier, while the number of local CPAs increased less than 1% to 2,003. Local accounting firms showed a third year of growth. Deloitte, a Big Four stalwart, kept its usual No. 1 ranking though the number of employees in its Costa Mesa office dipped slightly to 1,081 from 1,097 a year ago. The CPA ranks increased 7% to 238. Global giant Ernst & Young in Irvine held on to second place by local headcount while PwC moved one notch to No. 3. The largest OC-based accounting firm was Irvine’s Omega Accounting Solutions, whose headcount stayed steady at an estimated 187.
If you’re in the market for the best talent on the block and you’re one of those smart firms that embraces remote work, check out Accountingfly’s top remote accounting candidates of the week! And sign up for Always-On Recruiting to get a fresh batch of tax professionals, auditors, and accountants in your inbox every week with no obligation to hire. It’s like window shopping but for people. Wait, that sounds kind of creepy.
Here’s a sampling of this week’s candidates to save you a click:
FTE Tax Manager | Candidate ID #21914340
- Certifications: CPA
- Education: BS Accounting
- Experience (years): 10 years accounting and tax experience
- Work experience: 9+ years in public accounting
- 4+ years as Tax Manager
- Led a team of 7
- Preparation and review of tax returns
- Tax planning and advisory services
- Client niches: SMBs, Healthcare, Services
- Tech Stack: QBDT / QBO, Xero, Lacerte, UltraTax, Axcess, ProSystem fx, Engagement, SageFAS Fixed Assets
- Remote Work Experience: Y
- Goal: Professional growth, work life balance, new challenges
- Salary: $115k
- Time Zone: Eastern
- Sign up to learn about this Candidate
PT Freelance Tax and Accounting | Candidate ID# F20590940
- Certifications: Enrolled Agent
- Education: BS Accounting
- Experience (years): 15+ years accounting experience
- Work Experience: 15+ in public accounting
- Own practice for 7+ years
- Outsourced full cycle accounting and financial reporting
- 14+ years Federal, State and Local tax preparation
- Client Niches: SMBs, Retail, Services
- Tech Stack: QuickBooks
- Remote Work Experience: Y
- Goal: Contract tax engagements, project or hourly based
- Time Zone: Eastern
- Sign up to learn about this Candidate
FTE Tax and Accounting Senior | Candidate ID #20385321
- Certifications: QBO ProAdvisor, CPA in process
- Education: BBA Accounting
- Experience (years): 6+ years of tax and accounting experience
- Work experience: 4+ years with a CPA firm
- 400+ returns prepared in 2023, 60% business and 40% individual returns
- Full service accounting experience
- Client-facing experience
- Client niches: Local government, Construction, Manufacturing, Services
- Tech Stack: QBDT / QBO, CCH, Xero, Bill.com, Expensify, Shopify
- Remote Work Experience: Y
- Goal: Seeking a remote tax and accounting opportunity with professional growth
- Time Zone: Eastern
- Sign up to learn about this Candidate
It’s time to rethink what it means to be an accountant [AccountancyAge]
When we think of an accountant, the image that often comes to mind is one of a stuffy, dull professional, hunched over a desk crunching numbers all day. It’s a perception that has long plagued the accounting industry, making it challenging to attract the next generation of talent and clients. But the reality is that accounting has evolved significantly, with accountants now playing a vital role in driving business growth and innovation. The accounting profession has undoubtedly undergone a transformation, with advancements in technology, the increasing demand for advisory services, and the growing emphasis on sustainability and social responsibility. Yet, the outdated stereotypes persist, and it’s time for the industry to take a proactive approach to redefining what it means to be an accountant.