Footnotes is a collection of stories from around the accounting profession curated by actual humans and published every Friday at 5pm Eastern. While you’re here, subscribe to our newsletter to get the week’s top stories in your inbox every Tuesday and Friday.
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Big 4
PwC under fire after backing in executive who tweeted Hamas propaganda, suggested Israel invented reports of mass rape on October 7 [Sky News Australia]
Consulting firm PwC has been accused of antisemitism after one of its senior leaders was exposed for tweeting terrorist propaganda and anti-Israel conspiracies. The new storm involves its Melbourne-based Jim Christodouleas, PwC Australia’s banking and capital markets solutions and capability leader. Mr Christodouleas has tweeted hundreds of times about the conflict in Gaza since the Oct 7 terror attacks in Israel, including telling followers on his public X account on May 26 to “go f*** yourself with your fake outrage” over the International Criminal Court chief prosecutor seeking arrest warrants for Israeli Prime Minister Benjamin Netanyahu and other Israeli officials.
After being alerted to the posts by Sky News, a PwC Australia spokesperson said the firm had “spoken to the individual to remind them that while they are free to express themselves, everyone should do so in a measured and respectful fashion.” It’s understood PwC accepted its employee’s explanation that he did not think the posts were offensive, but would review his posts and take a break from the social media platform.
KPMG launches radical overhaul, cuts 200 senior jobs [Financial Review]
KPMG Australia will overhaul its consulting business to focus on tech-related advisory and software installation as part of an $80 million cost-cutting exercise that will include shedding about 200 jobs. Consulting leader Paul Howes said the changes were being made in response to a “fundamental shift in that market” at a global level away from “legacy assessment and advice services”. KPMG partner Paul Howes is going to overhaul the firm’s consulting arm. The cuts, which will be finalised by the end of next week, represent about 5 per cent of the firm’s roughly 4000 advisory staff and come after KPMG cut 300 staff across the firm last year and dozens this year.
PwC Is Doing Quiet Layoffs. It’s a Brilliant Example of What Not to Do [Inc.]
PwC conducted layoffs at the end of 2023. The company’s employees know this. They may be nervous that more layoffs are on the horizon. By trying to keep these layoffs a secret, PwC is ensuring that employees will only continue to be nervous about their jobs becoming redundant. Instead, be honest: “We need to reduce our headcount, and we are doing so by asking for volunteers. Here is what you would be eligible for if you volunteered …” That’s a much better message than, “Everything is fine! Don’t worry about Nigel! He’s looking forward to spending more time with his family!” The only reason to hide something is because you’re embarrassed about it. Presumably, you don’t want clients to know you’re struggling financially. That makes sense, but they will figure it out soon enough, once Nigel is no longer taking their calls.
Evergrande liquidation law firm probing PwC, others for potential claims, sources say [Reuters]
Lawyers appointed by the liquidators of China Evergrande Group, opens new tab are investigating some of the property developer’s service providers including its former auditor PricewaterhouseCoopers, to potentially recoup losses for creditors, three sources said. Evergrande, once China’s largest property developer, was ordered to be liquidated by a Hong Kong court in January, after it failed to deliver a concrete restructuring plan for its $23 billion worth of offshore debt deemed to be in default.
PwC India boss pleads case for seat at firm’s global top table [Financial Times] PwC’s India boss is lobbying for a seat on the Big Four firm’s global executive committee alongside his counterpart in China, arguing that the fast growth of its business and the rising importance of the Indian economy merit a position at the $53bn network’s top table. The move has caused ructions within the accounting and consulting firm, with one senior figure familiar with the discussions saying that while the issue has not yet risen to the level of “tensions”, it is regarded by some within the network as a “problem”.
People
Woman gives up top accountancy job to earn five figures a week escorting [UNILAD]
After getting a Bachelor of Commerce with Distinction, Graduate Diploma of Chartered Accountancy, and two University awards, Katija went to work at a big accountancy firm and ‘was promised lots of things in return for working harder than everybody else’. However, despite three years in the company working ‘like a dog’, she ‘was still getting the exact same as those who did the bare minimum’ and something ‘broke’ inside of her.
She reflects: “Making partner and the partner salary is the carrot they dangle in order to get staff to endure this process. But then it doesn’t stop there. “Even partners have levels and ranks between themselves. So a new partner will not be making as much as a senior partner, and a senior partner won’t be making as much as the even more senior partner. [..] It’s just this never ending cycle of carrot dangling to entice you to slave away for the firm. And it is highly effective.” “When I was working at my old firm some of us for a laugh would divide the amount of hours we actually worked by the amount of money we were getting paid (because the two are not synonymous when on a salary at a big firm) and when you workout the amount you’re actually paid per hour it is WAY below minimum wage”
CLA Global Welcomes New CEO [CLA Global]
CLA Global Limited (CLA Global), a leading international organization comprised of independent accounting and advisory firms announced this week that it has appointed Paul English as CEO. English will replace Sancho Simmonds and Joseph Kask, who have held the role of co-CEO’s of CLA Global since the network was formed in July 2022. Simmonds and Kask have been instrumental in recruiting high-quality, ambitious, like-minded firms to join CLA Global during their tenure, continuing to build the network’s development and strategy, resulting in 12 Network and 12 Alliance members currently across the globe.
News
Greens call for accounting firms to be limited to 100 partners [Financial Review]
The maximum size of accounting partnerships should be cut to 100 – down from 1000 – audit firms should be forced to separate from their consulting divisions, and a new regulator should be created to police the consulting sector, according to the Greens. Greens senator Barbara Pocock, who was instrumental in establishing the Senate committee inquiring into the consulting industry, slammed the inquiry’s final report. “The modest recommendations in the final report are inadequate to meet the crisis uncovered by this inquiry,” she said after the release of the report on Wednesday afternoon. “We need stronger action to put an end to conflicts of interest, to ensure value for money and to promote public sector regrowth after decades of neglect.”
Michigan’s largest accounting firm opens first office in New York City [Bloomberg]
Plante Moran, a century-old accounting and management consulting firm based in Michigan, is expanding its presence beyond its Midwestern US base with an office in New York City. The closely held company said its midtown Manhattan location, its first office in the US financial hub, opened June 10 after a lease was signed in November. A grand opening event is planned for later this month.
University of Richmond Accounting Professor Ashley Austin Awarded Grant Funding for Research on AI in Auditing [University of Richmond]
Austin and her partners at the University of Virginia and University of Georgia will develop strategies to help auditors examine AI-generated financial reports with sufficient skepticism. “Generative AI can be used to great benefit to create detailed and accurate financial statements, forecasts, and analyses,” says Austin. “However, despite their high level of accuracy and persuasiveness, AI insights are not absolute fact. Auditors would benefit from safeguarding measures to enhance their own skepticism when evaluating insights that a client generated with AI assistance.”
MPS chief financial officer retires immediately amid accounting crisis [Milwaukee Journal Sentinel]
Milwaukee Public Schools Chief Financial Officer Martha Kreitzman has retired, school board members announced Thursday before voting on a budget for the upcoming school year amid a crisis of public trust. Kreitzman is the third MPS official to lose a job after revelations that the district was using an error-prone accounting system and is nine months late to submit key financial reports to state officials.
Practice Management
Google reviews for mid-market accounting firms [Canadian Accountant]
Should mid-market accounting firms seek out Google reviews from their clients? Most of the firms I work with have fewer than 20 reviews despite having thousands of clients, so I guess the consensus is, “No.” It’s easy to understand why. Your firms are already busier than ever. Finding capable people to do the work can be harder than finding the work itself. Moreover, leads from referrals and word of mouth are far more valuable than cold calls from people on the internet. Nonetheless, I still believe that soliciting Google reviews from satisfied clients is worth it. In this article, I share data on how many Google reviews your competitors have, assert why Google reviews should matter to your firm.
How accounting firms can tackle the capacity crunch with technology [Elite Business] Workloads are increasing, driven by growing regulatory complexity and heightened client demands. An ageing workforce is seeing more and more experienced accountants approaching retirement just as high stress, workload challenges and broken partnership models are seeing staff turnover rates increase exponentially. The competitive job market further intensifies this challenge, as accountants with in-demand skills are aggressively recruited by other firms and even other industries.
In fact, the ATT predicts a shortfall of 60,000 qualified accountants by 2050, leading to an urgent need for firms to act quickly. This shortfall is leading to capacity issues that are now impacting beyond just the busy periods, creating bottlenecks that further strain resources and staff. With constraints on staff availability and capacity, firms are evenrestricted in their ability to take on new clients or expand services. Ultimately, this hinders growth opportunities for both the practice and the remaining team.
Remote Work
By the Numbers: How RTO drives productivity at work [Ragan Communications] According to the EY Future Workplace Index report, 54% of remote workers polled in the study reported that they were much more productive in a remote model. That was higher than the rate of either hybrid or in-office workers who reported high productivity levels in their work situations. But leaders felt markedly differently about the problem. The report also said that 28% of leaders reported that their employees were just as productive at home as they were in the office. Additionally, 29% of leaders revealed that the top reason for bringing employees back to the office was to increase productivity.
Accounting Firm Leaders Discuss Challenges/Benefits of a Remote Workforce [Thomson Reuters]
Employers and payroll professionals face a complex web of challenges while managing remote and hybrid work arrangements, particularly concerning state income tax withholding and compliance with varying state labor laws. However, implementing clear policies, fostering effective communication, and leveraging technology can help organizations navigate the ever-evolving landscape of remote and hybrid work. Recently, Checkpoint Payroll Update spoke with Kim Wylam, Managing Principal of Baker Tilly’s human capital consulting practice and Timothy J. Beary, a state and local tax (SALT) principal with Baker Tilly’s specialty tax practice, about managing the obstacles and highlighting the benefits of a remote workforce.
We usually throw this under Talent but today you get it in the Remote Work category. If your firm is hiring you should check out this week’s top remote accounting candidates from Accountingfly!
