Morning! Or afternoon as that’s probably when you’re reading this. We will not be discussing politics today — I try to avoid the topic just in general these days because oof — but I’ll say this…what a weekend eh? Anyway, accounting news awaits.
This one from Fast Company is sort of related to accounting right? It certainly affects firms, particularly Big 4, as they require yearly sacrifices from the God of Higher Education to keep the machine grinding away.
The college-to-corporate pipeline is facing extinction. Here’s why
A third of Gen Z is skipping college before joining the workforce—and opportunities in the internet economy are a major reason why. It’s an inflection point that decades of corporate dread have been building toward.
As the first generation to be raised by the internet, Gen Z didn’t spend our childhoods outside—we spent them online. We exchanged ideas and connected with one another over chatbots long before we learned how to prepare for an interview or apply for a job. We participated in makeshift economies in virtual games long before we opened a bank account or submitted a summer job application.
Our comfort in exploring the internet is why we don’t feel tied to traditional models of work and life that kept people busy for decades—especially as burnout, low wages, and debt continue to dominate headlines post-pandemic. For Gen Z (and the generations to come) inheriting this new reality, the question has evolved from “Where should I apply to college?” to “How can I make money online?”
This doesn’t bode well for the already unpopular accounting track.
An Ohio firm, Payne Nickles & Co. CPAs and Business Advisors, celebrates some promotions in the Sandusky Register. Check out this blurb:
Brennan Otto, a certified public accountant, recently received a promotion to partner in training in “recognition of his dedication, hard work and contributions to the firm,” according to a company statement.
Otto’s journey with Payne Nickles & Co. began as an intern during the tax seasons of January 2015 and January 2016 while he was still completing his degree. After graduating from Kent State University in 2016 with a bachelor’s degree in business accounting, Otto joined the firm full-time in December 2016.
In October 2018, Otto left Payne Nickles to explore opportunities elsewhere. But “recognizing the strong professional environment and growth opportunities at Payne Nickles, he returned to the firm in October 2019,” the statement read. “His experience during this period enriched his perspective and expanded his professional expertise.”
We probably won’t be writing up the recent PCAOB inspections for Deloitte Canada and Canadian megafirm MNP unless this week ends up being an accounting news desert (it’s mid-July, it could be) and we get desperate so here’s Canadian Accountant:
The Public Company Accounting Oversight Board in the United States released two new audit inspection reports this past week for Deloitte Canada and MNP LLP. After finding fault with Canadian audit quality in recent years — not only with regional accounting firms but with members of the Big Four in Canada — the US audit watchdog found little fault in its most recent reports.
MNP received a clean bill of health from the PCAOB for two audits inspected in 2022. According to the inspection report, the PCAOB found “no deficiencies that were of such significance that we believe the firm, at the time it issued its audit report(s), had not obtained sufficient appropriate audit evidence to support its opinion on the issuer’s financial statements.”
The conclusion is in stark contrast to the PCAOB’s previous inspection of MNP, which occurred in 2019, when it found deficiencies in 67 per cent of the three audits it reviewed.
Deloitte Canada’s inspection report focused on five audits inspected by the PCAOB — the same number inspected by the PCAOB in 2021. In both cases, the US audit watchdog found deficiencies in 20 per cent of the audits reviewed, four of which were audits in which the Big Four accounting firm was the principal auditor. In Deloitte’s audit of “Issuer A,” the PCAOB identified deficiencies in the firm’s financial statement audit related to revenue, for which the firm identified a fraud risk.
Grant Thornton snagged a CFO Advisory principal with an impressive resume:
Grant Thornton today announced that Krystn Hammond has joined the firm as a CFO Advisory principal within the Advisory Services practice.
With more than 15 years of experience, Hammond has advised pharmaceutical and life sciences clients on transactions and tax restructurings, including acquisitions, divestitures, spin-offs and intellectual property migrations. Her experience spans across industry subsectors, such as big pharma, biotech, medical devices and diagnostics, generics, specialty, animal health, consumer and services.
Chipman69 will appreciate the quote she gave for the press release:
“I’m grateful to be part of a firm that sets exemplary standards in everything from client service to company culture,” said Hammond about her new role at Grant Thornton. “I look forward to working with a team of dynamic valuation professionals to help our life sciences clients make well-informed strategic decisions to add value to both patients and shareholders.”
Deloitte released the results of its 2024 Back-to-School Survey and says K-12 parents will be spending “cautiously” this upcoming school year:
- Back-to-school spending for K-12 students will likely remain flat, estimated to reach a collective $31.3 billion, or approximately $586 per student, according to those surveyed.
- Surveyed parents plan to decrease their spending on technology products by 11% year-over-year while increasing spend on other categories like personal hygiene and educational furniture by 22%. Spending on clothing and school supplies remains unchanged.
- Shoppers surveyed prioritize retailers offering value and convenience as mass merchants (77%) and online retailers (65%) are top destinations. In search of deals, parents plan to shop across 4.7 retail formats on average, up from 3.9 in 2023, and may sacrifice loyalty to stay within budget.
The new EY AI Pulse Survey asked 500 US senior leaders across industries about their AI technology investments, impacts and challenges. Here’s what they learned:
After more than a year of hype around generative AI’s potential, business leaders report that they are already seeing a return on their artificial intelligence (AI) investments and plan to increasingly become more bullish, according to new data from Ernst & Young LLP (EY US). Among the 95% of senior leaders who report that their organizations are currently investing in AI, the number of companies investing $10 million or more in the technology is set to nearly double next year to 30%, up from 16% currently investing at that level. However, despite the forecasted investment boom, the survey also found that many leaders are ignoring the foundational functions AI needs to thrive.
This contradicts the findings of Lucidworks’ Generative AI Global Benchmark Study released in June:
Who even knows. I’m convinced many of the CEOs and CFOs surveyed for these things have no idea what AI can really do, they just say they’re making investments in it to seem with it and cool. See this weekend discussion: Does Leadership Even Know What Gen AI Is?
And here’s World Economic Forum on young people and AI:
How young workers can thrive with AI when they have the right skills
For the young, the future is still unwritten. This reality can bring both excitement and uncertainty.
Today’s young people are entering the world of work at a defining moment, just as AI begins to transform it. This prospect may give rise to conflicting emotions. On the one hand, they might feel excited that AI can help them work more quickly and efficiently while making their jobs more enjoyable. On the other, they may be concerned that AI is reshaping the job market as they start their careers.
So, how is AI transforming the workplace – and how are young people navigating this shift? Recent research from PwC helps to shed new light on these questions. And the resulting insights confirm that while AI radically changes the world of work, young people who learn to harness it can open up enormous opportunities.
Moreover, young people appreciate the opportunities that AI brings to them and their careers, suggesting they can – and will – fully embrace its potential in the years to come.
Investor Place discusses three stocks that are sorry they used ‘sham audit mill’ BF Borgers:
- Trump Media & Technology Group (DJT): The embattled social media company hardly inspired confidence.
- SS Innovations (SSII): The BF Borgers scandal may upend the medical device company’s efforts to raise funds.
- Red Cat Holdings (RCAT): This small drone company isn’t ready to take off yet.
Related:
An Indianapolis CPA with one of those fancy .CPA domains from the AICPA went overboard on making clients happy:
An Indianapolis-based Certified Public Accountant (CPA) pleaded guilty in federal court to filing false tax returns for his clients and participating in an illegal tax shelter that cost the IRS millions.
Jason L. Crace, the founder of Crace.CPA, pleaded guilty in federal court on Wednesday to participating in an illegal tax shelter. He will be sentenced on Jan. 14, 2025, and faces up to three years in prison.
According to the United States Department of Justice, Crace helped clients in Mississippi and elsewhere file false business deductions for so-called “royalty payments” in the amount of millions of dollars between the years of 2013 and 2022.
The DOJ argued that Crace knew these “royalty payments” were circular flows of money purposely designed to give the appearance of genuine business expenses.
FedScoop talks about Direct File and how the IRS got it right:
The way Merici Vinton tells it, the first official user of the IRS’s Direct File pilot nearly had tears of joy in her eyes when she submitted her return to the free electronic filing program, a milestone for the tax agency and a potential game-changer for frustrated taxpayers across the country.
There was only one problem: a bad connection that resulted in that maiden filer’s return getting stuck in a queue.
“This would have been a failure,” said Vinton, deputy service owner for Direct File. “And not just a failure — our users wouldn’t have had trust in it.”
The reason it wasn’t a failure is that the Direct File team noticed the issue right away, resetting the connection to quickly free the return from its digital abyss. And thanks to a controlled rollout to only a limited cohort of volunteers and government employees, the system’s inauspicious start was a blip and not a death knell.
Earlier:
And that’s that. Should you have a tip or news story you think we should write about, reach out via email or text (anonymously) and I’ll be happy to take a look. Have a fantastic week, you deserve it. Later!