Comments are closed on Friday Footnotes and the Monday Morning Accounting News Brief by default. If you have something to say about any stories linked here you are welcome to email the editor, text us at 202-505-8885, or hit us up on Twitter @going_concern. See ya.
Programming note: It’s that time of year when we start assembling retrospective lists to look back on the year that’s almost behind us. We’d like to do an update on this article from 2014: The 20 Most Overrated Things In Accounting. If you want to weigh in on the most overrated things in accounting for 2024, get in touch.
Private Equity
SEC’s Top Accountant Keeps Close Eye on Firms’ Private-Equity Deals [Wall Street Journal]
A wave of midsize accounting firms is welcoming private equity into their bloodstream. For the top accountant at the Securities and Exchange Commission, those deals present a number of risks. Several midsize audit and consulting firms in the U.S. are selling stakes, both large and small, to outside investors, often to boost funds for technology and talent. Grant Thornton’s U.K. unit, PKF O’Connor Davies and Carr, Riggs & Ingram were among the firms that last month unveiled private-equity investments. Grant Thornton’s U.S. unit in May became the largest firm to do such a deal so far. Accountants and regulators have questioned whether the independence of auditors can be preserved or not under new buyers. These deals must not result in a significant culture shift away from its focus on audit quality, SEC Chief Accountant Paul Munter said in an interview with The Wall Street Journal at a conference in Washington, D.C.
LMP Helps Fuel PE’s Ongoing CPA Shopping Spree [Mergers & Acquisitions]
Lovell Minnick Partners recently invested in its first accounting firm, a trendy sector that PE continues to pile into. LMP partner Jason Barg tells us why the financial services specialist took the CPA plunge. “It’s an industry that’s very large. It’s got a massive, addressable market. It’s an industry that’s highly fragmented,” Barg says of the 45,000 accounting firms, most of which remain founder-owned. “It’s a recurring revenue model. It’s mission-critical and it’s an industry going through some changes.” In particular, many accounting firms use antiquated technology and offshore tasks that can be done more cheaply and efficiently with tech upgrades.
Earlier:
Redmond accounting firm acquired by private equity-backed Dallas group [Puget Sound Business Journal]
Redmond accounting office Clark, Raymond & Company Advisory inked a deal Thursday that brings it under the banner of Springline Advisory, a private equity-backed advisory firm based in Dallas.
Cohen & Company to acquire CPA firm TWM [International Accounting Bulletin]
Cohen & Company, a tax and accounting firm, has agreed to acquire Tax and Wealth Management (TWM), a boutique CPA firm, to enhance its services for high-net-worth individuals (HNWIs). The firm brings approximately 15 employees to the Cohen & Company team, upon completion of the deal.
Atlanta accounting and advisory firm Aprio acquires cybersecurity company [Atlanta Business Chronicle]
Aprio, an Atlanta-based business advisory and accounting firm, is acquiring cybersecurity firm Securitybricks Inc., a Microsoft partner which serves the government and tech sectors. Aprio plans to use the acquisition to serve clients with digital security needs. The terms of the deal were not disclosed. This acquisition follows Boston-based private equity firm Charlesbank’s recent purchase of a stake in Aprio.
Research
The war for accounting talent can make corporate audits worse [Phys.org]
The first quarter of the calendar year is not a great time to be an auditor at a public accounting firm. During this “busy season,” auditors often work brutally long hours to examine financial statements destined for the 10-Ks of publicly traded client companies. In this exhausted, stressed-out state, auditors are dangerously susceptible to distraction, according to research by Young Hoon Kim, assistant professor of accounting at Costello College of Business at George Mason University. Kim’s research concentrates on job postings that seem to offer an escape to greener professional pastures. The opportunity to make the leap—in reality or fantasy—to a less demanding, often better-paying role as an in-house accountant steals auditors’ attention away from their duties. Their work can suffer as a result, in quantifiable and costly ways. “The postings we are focused on explicitly call for applicants to have public accounting experience,” Kim clarifies. “That means there is a really targeted demand for these talents.”
CEOs Embrace Innovation, ESG, and AI Amid Economic Uncertainty, KPMG Survey Reveals [CEOWORLD]
A recent KPMG survey of over 1,300 corporate leaders worldwide reveals a surprising optimism among CEOs, even as global economic confidence wanes. Despite the economic pressures, an overwhelming 92% of CEOs plan to expand their workforce over the next three years, a level of hiring enthusiasm not seen since 2020. Simultaneously, 72% of these leaders acknowledge the growing responsibility to secure their businesses’ future prosperity.
CPA Exam
The Dying Language of Accounting [Wall Street Journal]
KPMG Chair and CEO Paul Knopp writes for the WSJ Opinion pages:
According to a United Nations estimate, 230 languages went extinct between 1950 and 2010. If my profession doesn’t act, the language of business—accounting—could vanish too. Our profession must remove hurdles to learning the accounting language while preserving quality. In October, KPMG became the first large accounting firm to advocate developing alternate paths to CPA licensing. We want pathways that emphasize experience, not academic credits, after college.
Big 4
PwC renews Seaport lease in win for office sector [Boston Business Journal]
PricewaterhouseCoopers has renewed its lease on the Seaport District tower that bears its logo, handing a victory to a Boston office sector struggling with high vacancy. The accounting powerhouse is taking 335,000 square feet at 101 Seaport Blvd., down slightly from the 360,000 square feet it has today, spokesperson Lindsay Thomas said Wednesday. The renewal is through 2036, she said.
From failed accountant to Marvel and Barbie star: Simu Liu shares how he got out of ‘rock bottom’ [NBC New York]
Fuck you, Deloitte! I’m a star now!
“I spent maybe the first 22 years of my life trying to live somebody else’s definition of success,” he told CNBC’s Samantha Vadas. “In the process of losing my job and kind of hitting a rock bottom, but then ultimately being liberated from that idea allowed me to define success on my own terms,” he said. Liu was born in China and moved to Canada as a child. In 2011, he joined accounting firm Deloitte in Toronto, losing his job after eight months when he “skipped work” to take a role as an extra in the action movie “Pacific Rim,” according to his LinkedIn profile. “Suffered an existential crisis that led to enlightenment regarding the definition of success on one’s own terms. Became an actor instead,” Liu’s profile states.
EY worker’s death spotlights India’s unprotected white-collar labour [Reuters]
Authorities in two Indian states that are driving its economic growth are drafting tighter workplace rules and inspections to protect white collar employees following the death of a young executive at global consultancy Ernst & Young (EY), which her family blamed on overwork. India’s decades-old labour laws are largely focused on blue-collar workers, leaving others vulnerable to workplace abuse such as punishing work schedules and summary dismissals, unions say. Labour authorities in the states of Maharashtra and Karnataka said they have stepped up scrutiny of office practices at private firms in an effort to protect white-collar workers after a string of complaints, four officials in the two states told Reuters.
AI
Gravitating to gen AI: CPA leaders show increased interest [Journal of Accountancy]
Interest in the implementation of generative artificial intelligence tools has risen among CPA decision-makers in business and industry over the last year, a steady progression that could signal rapid change on the horizon. Thirty percent of business executives in the quarterly AICPA & CIMA Economic Outlook Survey said they are experimenting with generative AI in business applications, a modest rise from 23% a year ago. However, the percentage not even contemplating the use of generative AI dropped from 56% to 38% in the survey of 273 CPA decision-makers. “The data suggests we’re right on the cusp of broad adoption of gen AI,” Tom Hood, AICPA & CIMA’s executive vice president–Business Growth & Engagement, said in a news release. “We’re rapidly moving from the contemplation to experimentation phase. This technology has seen faster take-up rates than other adoption cycles, so we expect implementation to move quickly as well.”
Talent
I’m happy as a CPA. Accounting is a fast track to an upper-middle-class life. [Business Insider]
This guy is getting roasted on r/accounting. And they say Going Concern is too negative!
EY’s head of global talent attraction and acquisition leads a team that handles 5.1 million applications, 100,000 hires annually [HR Brew]
Irmgard Naudin ten Cate believed she was destined to be a lawyer—until, in her last year of law school, she realized she wasn’t passionate about the hours of research the law career required. “Towards the end, I kind of thought, ‘Oh, my God, I’m going to be sitting in the library all day, and I want to talk to our clients,’” she told HR Brew. “I suddenly realized what I didn’t truly enjoy about that profession.”
Is your firm hiring? Are you feeling not so thrilled about the options out there? Check out Accountingfly’s top remote accounting candidates of the week and sign up for Always-On Recruiting to get great candidates like these in your inbox every week. It’s free!
My Tax and Spending Reform Plan [