Hello and happy Monday! Here’s some news.
Publications around the world continue to discuss the tragic sudden death of a young auditor at EY India and dirt keeps making its way to the surface. This is Latin Times:
Accounting Firm Where Woman Died from ‘Overwork’ Has Operated for Decades Without a Cap on Work Hours
Soon after Shailendra Pol, Additional Labor Commissioner for the Indian state of Maharashtra, began the investigation, he noted that EY’s registration under the state’s Shops and Establishments Act was not current. The permit is required to help regulate how many hours an employee works – nine hours per day and 48 hours per week.
While EY had applied for the registration in February 2024, it was rejected because the company had not applied since 2007. The office was given a total of seven days to address its non-compliance.
More from Reuters: Probe into EY Indian employee’s death finds office lacked labour welfare permit
This recent r/CPA vent post isn’t being received too well (“Stop with the xenophobic drivel.”):
US CPA doesnt mean anything now thanks to AICPA
Btw, did u know AICPA is allowing anyone from overseas to take United States CPA exams in their countries? Yes the same United States CPA designation u guys are studying for.. They opened up testing centers all around India in 2020 and Philippines in 2024 and allowing people there without any US college credits to sit for exams. Once they pass they will earn the same US CPA license so ur cpa license doesnt mean a damn thing in couple of years. Also big fuck u in the face is that India only require 120 hours of college credits (none has to be from us colleges) to test for US cpa. This career is going to be like a sweatshop here in 3-5 years once the job market is full of US CPAs from overseas who are happy to do this job for 25% of US salaries
Edit- this is against AICPA selling US CPA licenses overseas to benefit big american accounting firms and PE corporations buying up accounting firms here in USA. AICPA is not looking out for accountants here in USA and their actions show they are in beds with US firms to get cheap labor. This post is not to say people overseas are bad or not good at accounting.
A tale of two headlines.
Deloitte partners suffer £48,000 pay cut
Deloitte cut its UK partners’ pay packets by £48,000 in the last financial year as it sought to promote more people to its senior ranks.
The “big four” firm said average partner pay was down to £1.012m for the year to the end of May, compared with £1.060m in 2023. It said this reflected the fact it had been increasing its number of people in senior posts, with 80 of its employees promoted to partner over the past 12 months.
£48,000 = about $64k USD.
Deloitte UK partners pocket £1mn despite slowdown
Deloitte’s UK partners took home about £1mn on average for the fourth year in a row, despite the Big Four firm suffering a sharp slowdown in revenue growth due to waning demand for its advisory services.
Partners received payouts of £1.01mn on average for the year to the end of May, 5 per cent less than the previous year, following an increase in the number of equity partners who share in the firm’s profits. Its top ranks swelled from 714 last year to 749, while the profit pool to be shared between them remained flat at £756mn.
Deloitte is the only Big Four firm in the UK to report an average partner payout higher than £1mn in the last two financial years.
Yeah, don’t think they’re too worried about missing out on that $64,380 this year.
Elsewhere in the Big D ecosystem, Deloitte India wants to hit $5 billion in revenue by 2030 (which btw is about five years away). They’re currently at $1.19 billion.
Accounting giant Deloitte has set an ambitious target to quadruple its revenue from its India operations to $5bn by the year 2030.
Romal Shetty, the CEO for South Asia, in an interview with Indian news agency PTI, revealed the company’s aspiration to become the preeminent leader in professional services.
During FY23–24, Deloitte India’s revenue reached the Rs100bn milestone, a significant 30% increase.
Former EY top dog Carmine Di Sibio has a new item added to his robust dance card:
Advent International (“Advent”), one of the largest and most experienced global private equity investors, today announced the appointment of former Ernst & Young LLP (“EY”) Global Chairman and CEO Carmine Di Sibio as an Operating Partner. Di Sibio will play an active role in helping the firm identify, source and execute new deals in the business and financial services space and will work closely with Advent’s team and current portfolio of investments.
“We are thrilled to welcome Carmine to our growing roster of talented, specialized and hands-on Operating Partners,” said Chris Egan, Managing Partner at Advent. “After a distinguished career of nearly four decades at EY, Carmine brings an incredible wealth of knowledge and expertise in the professional services, financial services and technology industries, which we believe will be invaluable as we continue to expand our investments in this space. We are excited about the opportunity to leverage Carmine’s experience to drive even further growth and innovation across our firm and portfolio.”
Di Sibio currently holds director positions on the boards of PayPal and Prudential Financial, as well as playing an active role in the World Economic Forum.
Two students from the University of Missouri’s Robert J. Trulaske, Sr. College of Business discuss their experiences with the KPMG Global Internship Program:
Ryan Klostermann and Katie Mitchell were among just 25 interns selected from a pool of 650 applicants nationwide. Klostermann gained valuable experience in Aberdeen, Scotland, while Mitchell completed her four-week internship in Malaysia. KPMG firms operate in 143 countries and territories across the globe, offering audit, tax and advisory services.
China told PwC to get their shit together and not screw up again, says South China Morning Post:
China’s vice-finance minister met the global chair of PwC in Beijing, after the accounting firm’s mainland unit was slapped with a hefty fine and suspended for six months, according to a finance ministry statement on Monday.
Vice-Finance Minister Guo Tingting told PwC’s global chair Mohamed Kande during their meeting on September 19 that he hoped the Big Four firm would strictly abide by China’s laws and regulations, and adopt effective measures to correct mistakes, the statement said.
ThinkChina wonders out loud if PwC will be able to pull off this reasonable request in this long read:
[Big read] Colluding in deceit: Will PwC get a second chance in China after the Evergrande scandal?
Peng Shugang, a lawyer at China Commercial Law Firm (Shanghai), told Lianhe Zaobao that the penalty document from the MOF used the phrase “aware of” 21 times and “should have known” five times, while the CSRC’s penalty statement used the phrases “failed” or “completely failed” five times. Indeed, both agencies believe that PwC’s actions in auditing Hengda showed obvious intentional wrongdoing and gross negligence.
Professor Mak Yuen Teen of the National University of Singapore (NUS) Business School said that the regulatory accusations suggest that it was not just a case of audit failure due to a failure to follow proper audit procedures or exercising professional scepticism, but that of “collusion with the client and likely not limited to just a few staff”.
UK-headquartered PwC is one of the Big Four accounting firms and the highest-earning auditing institution in China in 2022. So, what drove it to take such a huge risk and condone, or even facilitate, Evergrande’s financial deception?
Earlier: China Puts PwC in the Punishment Corner For Six Months and Confiscates ‘Illegal Gains’
Thomson Reuters talked to a guy with all the letters after his name about the future of the audit profession:
A conversation with Jeff Forrestall, CPA, CFF, ABV, CVA, PFS
Q: Are you seeing shifts related to training, recruitment and retention in the audit industry?
Jeff Forrestall: We’ve had to look around outside of the traditional path. I have a couple of attorneys on staff and one of my auditors is an attorney. Great hire. Never had an accounting class in her life.I have a couple of STEM majors who don’t have any kind of background. Younger prospects have jumped jobs a lot due to COVID, so they don’t have the background we need.
We’re looking for more experienced people. And we’re actually home-growing them ourselves with the AuditWatch program. We make everyone go through it.
Long story short, the industry is changing. National and regional firms are traveling auditors to death.
Starting next year, we will work a 40 hour workweek. Our audit groups don’t travel. We’re the only ones because we’re trying to attract and retain people. So within the last six months, I’m seeing a lot of auditors are applying to us again.
We like you, Jeff.
Adviser Joseph Floyd discusses the PCAOB’s new quality control standard in Bloomberg Law:
The new requirements are akin to combining the mandate to document, test, and certify the effectiveness of a public registrant’s internal controls under Section 404 of the Sarbanes-Oxley Act—the law that created the PCAOB—with creating an audit committee equivalent for oversight of an audit firm’s quality control system.
Section 404 greatly improved the quality of financial reporting for public registrants and lessening restatements, and QC 1000 has the potential to improve audit quality and lessen audit deficiencies. The need for improvements in audit quality is obvious when reviewing the growing deficiency rates reported for the industry based on PCAOB inspections.
The concept of an independent oversight function for audit firm quality isn’t new. Individuals may recall the Volcker plan in early 2002 to save Arthur Andersen in its final days. The plan involved former Federal Reserve Chair Paul Volcker leading an oversight function for Andersen’s audit quality. The Volcker plan never happened but now, decades later, the concept will become reality for the entire audit industry.
For the new quality control requirements to reach their full potential, the external function’s role must be highly respected within the audit firms; for it to be most effective, recruiting individuals who will be independent is critical.
Aaaand that’s plenty of news for now. Please let me know if you spot something interesting, have a tip to share, or just want to complain, complaining is allowed too. Encouraged, actually. Reach me via text or email, or hit us up on the artist formerly known as Twitter. Byyyye.
