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. See ya.
The Office
Ernst & Young out of Triad market after closing Winston-Salem office [Triad Business Journal]
The Triad now has offices for only two of the Big Four global accounting firms. EY has moved out of about 4,000 square feet at the Winston-Salem Foundation building at 751 4th St. NW, Triad Business Journal has learned. EY closed an office in Greensboro in 2009. John Reece, the managing partner of building owner Tight Lines Partners LLC, confirmed that EY moved out at the beginning of May. A message left for the EY media relations team was not returned Thursday afternoon. The closure leaves KPMG and PricewaterhouseCoopers as the only Big Four firms with offices in the Triad, both in Greensboro (North Carolina).
Accounting firm Moss Adams expands Houston office in Brookfield Properties’ One Allen Center [Houston Business Journal]
Moss Adams renewed its lease in One Allen Center at 500 Dallas St., opting to occupy 21,118 square feet in the office tower through 2035. That represents nearly all of a 28,969-square-foot floor in the tower. Brookfield Properties declined to disclose how much of an increase the new lease will be, but the accounting, consulting and wealth management firm will move to a new location within the building.
Offices and workplaces gradually becoming busier, EY study finds [The Irish Times]
Offices and workplaces around the world are gradually becoming busier, leading to a noticeable increase in public transport usage, according to a study by EY. The latest EY Mobility Consumer Index, which is a global index of over 15,000 people in over 20 countries, finds more than half (52 per cent) of workers report some form of hybrid work – up significantly from the one in three (33 per cent) reporting hybrid work pre-pandemic. For those working in a hybrid manner, one or two days of remote work per week is the most common arrangement.
Recruiting
Career Services: Back At It [Pace University]
Career Services wrapped up the Spring 2023 semester with the first-person job and internship fair since the start of the COVID-19 pandemic. Best of all? There was record-breaking student turnout, making it the largest job fair in Pace’s history. Hundreds of students turned out for the fair to meet and connect with representatives from more than 150 companies, including Barclays, Morgan Stanley, Regeneron Pharmaceuticals, US Department of State, Internal Revenue Service, Con Edison, Deloitte, US Environmental Protection Agency, Montefiore, Northwell Health, and the Federal Bureau of Investigation, among many others. The fair was open to all majors and was sponsored by PricewaterhouseCoopers (PwC), which is among the Big Four accounting firms, offering clients various professional business services, including accounting, auditing, human resources consulting, and strategy management.
DLA, LLC Announces Hiring of Managing Director [Business Wire]
DLA, LLC announces that John Weber will be joining the firm as a Managing Director of Accounting Advisory, Technical Accounting. John Weber has over 30 years of experience in accounting specializing in complex technical accounting matters and financial reporting for public and private companies. Prior to joining DLA, John served as a Partner with two National professional services firms, where he was the subject matter expert on business combinations, impairment analysis, income tax accounting, stock compensation, revenue recognition, and going concern analysis.
Big 4
Not a great look after laying off 5% of the workforce two weeks ago 🤦
One of those laid off in that round told us it’s “a slap in the face.” https://t.co/e09WUqBOZk
— Going Concern (@going_concern) July 12, 2023
PwC to ban political donations over tax leaks scandal [Australian Financial Review]
PwC Australia will cease most of its political donations as part of a plan to rehabilitate its public image amid the ongoing tax leaks scandal, depriving the major political parties of contributions worth an average of more than $200,000 a year.
From Olympic Day to 1 Year to Go: Deloitte kicks off month-long programme to ‘ignite the champion within’ its people [International Olympic Committee]
Worldwide Olympic Partner Deloitte marked Olympic Day Let’s Move initiative on 23 June with the launch of an exciting month-long programme of Olympic-themed activities for its 415,000+ people, helping them to “ignite the champion within” leading up to the one-year-to-go milestone for the Olympic Games Paris 2024. To kick off the campaign, Deloitte hosted a webinar on Olympic Day, focusing on the significance of movement and mental health as part of a holistic approach, exploring what it takes to be an elite athlete and how many of those practices help them beyond sport to find balance and purpose in both their professional and personal lives. The 45-minute webinar, titled “Exploring the Elite Mindset”, featured Deloitte US Chief Well-being Officer, Jen Fisher, as the host, with insights from renowned Australian athlete Natalie Cook OAM OLY, gold-medalist, and five-time Olympian in beach volleyball and Ian Dors, US Paralympic triathlon Paris 2024 hopeful.
EY China locked in dispute with global bosses over IT costs [Financial Times]
EY’s Chinese business has been refusing to pay fees owed to the Big Four firm’s global headquarters for more than a year in a dispute over IT services that it says cannot be fully used in China, according to people familiar with the matter. The tussle is playing out just as stringent new laws from Beijing require that more data considered of importance to national security be kept inside the country, prompting some western companies to examine the option of hiving off their Chinese IT operations. “Greater China is able to use less of the tech stack than expected, given that the regulatory environment has changed,” said one person familiar with the negotiations. Outstanding fees owed by the Chinese business have been mounting for more than a year, according to two people familiar with the dispute.
Clop Crime Group Adds 62 Ernst & Young Clients to Leak Site [BankInfoSecurity]
The Clop ransomware group’s supply chain attack on the popular MOVEit file transfer software leaked 3 terabytes of critical information about Ernst & Young clients including financial reports and accounting documents in client folders, passport scans, Visa scans, risk and asset management documents, contracts and agreements, credit agreements, audit reports and account balances. Most of the recently named victims are from Canada and include Air Canada, Altus, Amdocs, Constellation Software, EY-Continental Transition, Laurentian Bank of Canada, LendLease, Sierra Wireless, SSC Fraud Risk Assessment, St. Mary’s General Hospital Surgical Services Review, Staples Canada, Sun Life Assurance of Canada, United Parcel Service Canada Ltd. and more.
Earlier: EY and PwC Among the Many Entities Caught Up in the MOVEit Cybersecurity Breach Ransom
Practice
What CPAs Need to Know about Employee Retention Credit Fraud [The CPA Journal]
Most taxpayers have likely received a solicitation recently claiming that they may be entitled to thousands of dollars in employee retention tax credits. The solicitations involve the Employee Retention Credit (ERC), a payroll tax credit created by the Coronavirus Aid Relief and Economic Security (CARES) Act that has been credited with preserving millions of jobs during the pandemic. According to the IRS, many of these solicitations are offering credits that are “too good to be true”—in some cases, they are downright fraudulent. The IRS is targeting these ERC schemes aggressively. Within the past month, it has issued its third warning to taxpayers to be wary of ERC promoters, singled out ERC fraud on its 2023 “Dirty Dozen” list of abusive tax schemes, and issued guidance, doubling as warnings, to tax professionals with respect to the requirements of Circular 230 as applied to ERC claims. Criminal prosecutions have begun, and promoter investigations and congressional investigations are likely to follow.
ICYMI: Writing advanced Excel macros with ChatGPT-4 [Journal of Accountancy]
With the right prompts, natural language AI can create complex macros to automate processes like data cleansing, data summarization, carrying out intricate computations, building PivotTables, and producing unique reports. While most of the generative AI tools can probably create macros, this article focuses on how to write prompts for OpenAI’s GPT-4 to create complex Excel macros.
Data volumes and quality ‘crucial’ to AI success in accounting firms [AccountancyAge]
Accountancy firms must better organise their data to maximise the potential of artificial intelligence (AI), according to Becky Shields, head of digital transformation at Moore Kingston Smith. “A lot of businesses need to work on their data strategies as they’re too siloed at the moment,” she says. “The data is there but it’s not organised or catalogued effectively.” Shields believes firms shouldn’t embrace AI until their data has been properly curated as the AI models could be learning from inaccurate information.
Accounting and legal firms should commit to an internal ESG strategy to better position themselves for advisory work [Thomson Reuters]
Tax & accounting firms are in a good position to gain a competitive advantage in advisory work in the environmental, social & governance (ESG) area because firms have the expertise to dominate in both the accounting and audit areas that are at the center of certain new regulations. In addition, tax & accounting firms are more likely to focus on financially material issues — including data governance management — given their IT governance expertise. At the same time, both tax & accounting and legal services providers have a ways to go in executing their own internal ESG strategies, even as client demand for this information through the procurement process is exploding. Indeed, I constantly have to remind firms that their own house has to be in order, because one of the first questions a prospective client is going to ask is, “What are you doing for ESG within your own firm, if you are here to advise me?”
News
Crypto’s Game-Changer: Triple Entry Accounting [The Street]
In a recent roundtable discussion, Luke Stokes, a prominent Crypto Evangelist, and Rob Nelson, The Roundtable anchor, provided unique insights into how cryptocurrencies and blockchain technology are reinventing our societal structures, with profound implications for finance, supply chain management, and beyond. The concept of trust in transactions was central to Stokes’ explanation. “The big difference with this new system is that they call it triple entry accounting. Most people are familiar with double entry accounting. You have credits, you have debits, and they have to balance out. The third part of it is validation,” he said, emphasizing the role of global validators in the blockchain ecosystem who make sure transactions are true.
