You won’t find trash cans at the desks in Deloitte’s new 138,000-square-foot office at Millennium Partners’ Winthrop Center tower in Boston’s Financial District.

That’s because the professional services giant’s leaders want employees getting up and going to common receptacles for trash, recycling and composting, part of the sustainability push that led the firm to sign a lease at the new building.

Said Deloitte New England MP Rebecca Chasen, “It forces people to go out and do the right things with their trash.” First you force people back into the office and now you won’t even give them their own trash cans?

We don’t know what type of trash cans Deloitte uses so we’re just going to have to guess on this one. Trash Cans Unlimited (seems legit) sells a 30-pack of these 14 gallon plastic desk side cans for $223.86, so approximately $7.46 per can.

Times about 3,500 employees in the Boston office and that’s a savings of $26,110.

When announcing the deal via press release last summer, the developer said that Deloitte’s Winthrop Center lease was the largest office lease signed in Boston and the surrounding community up until that point in 2023. They also said:

Located in the heart of Boston, the next-generation office space features a floor plate designed for a collaborative, flexible work environment; outdoor space on every floor; and amenities geared toward enhancing the everyday experience and wellbeing of organizations’ most important assets, their people. The newly signed lease is the largest office lease signed in Boston and the surrounding community this year. Deloitte is targeting to move into its new space at Winthrop Center in fall 2024.

Trash cans not included.

The post This Deloitte Office Has Eliminated Trash Cans at Desks to Make Staff Get Up Off Their Asses appeared first on Going Concern.

WSJ reports today that KPMG is laying off a few hundred people in audit “as it works to make up for lower levels of voluntary turnover.” Meaning attrition is still too low.

The Big Four accounting firm last week notified about 330 people, or nearly 4% of its roughly 9,000-person U.S. audit workforce, that they would be let go in the coming weeks, people familiar with the matter said. The cuts have focused on employees such as associates and managers, and included no partners, the people said.

“The actions reflect our ongoing focus to align the size, shape and skills of our workforce to the market, while addressing continued low levels of attrition,” KPMG said in a statement to WSJ. “We remain focused on investing in our people to grow our business with quality.”

The Americas region is the only segment of KPMG’s global business that shrunk in headcount last year — from 66,892 to 62,781. Revenue results haven’t been released yet — KPMG is last to report of the Big 4, usually around December — so we don’t have a full picture on how their year shook out. All we know is that not enough people are quitting.

The last time KPMG did a serious round of layoffs was last summer. See: Layoff Watch ’23: The KPMG Workforce is Shrinking By About 5% (UPDATED)

Shortage? What shortage?

KPMG to Lay Off 4% of U.S. Audit Workforce to Counter Fewer Voluntary Exits [WSJ]

The post Layoff Watch ’24: KPMG Shrinks Audit By a Few Hundred People appeared first on Going Concern.

By the numbers:

• Revenues grew by 3.7% in local currency and 4.3% in US dollars
• Workforce grew to over 370,000 people in 149 countries

That’s a significant drop from last year’s growth of 9.9% in local currency and 5.6% in freedom bucks.

PwC says they added 6,161 jobs in FY24 and 68,681 over the prior two years. Since the fiscal year ended on June 30, that doesn’t include losses from recent PwC US layoffs obviously.

In his first revenue announcement since taking the big chair at PwC last year, PwC Global Chairman Mohamed Kande said: “It’s been a year full of successes and challenges, in which we’ve supported our clients and made meaningful contributions to our stakeholders in the regions and communities where we live and work. Despite a backdrop of economic headwinds, we’ve seen revenue growth across all of our lines of business, deepened our strategic alliances, and invested $1.5 billion to expand and scale our AI capabilities. As a network, we are focused on building trust and delivering quality services that our clients need to prosper today and to reinvent their businesses for tomorrow. We are focused on collaboration and innovation to help our stakeholders navigate an increasingly complex global environment, and I am proud of what our 370,000 people have accomplished this year.”

The firm chose to use the words “economic and business headwinds” to describe the hits the firm has taken in Australia due to that whole tax scandal thing because it would be weird to say “we fucked up and lost business” in an official revenue announcement. See also: PwC Australia flags revenue hole, partner profit cut due to tax scandal legacy published by Reuters in August of 2023.

But let’s see the rest of the good and bad of their year around the world:

While economic growth remains sluggish in a number of countries and political uncertainty dampened demand in some markets, overall revenues continued to grow year-on-year across the PwC network.

• Europe, Middle East and Africa (EMEA) revenues were up by 8.6%. The consolidated revenue of the UK and Middle East rose strongly reflecting increasing demand for services in the Middle East.  Germany had a steady year of growth, while there were particularly strong performances from Sweden and France. Across Africa overall, revenues declined due to ongoing tough economic conditions, however in South Africa business was buoyant. Central and Eastern Europe (CEE) had another solid year of growth.
• Some difficult market conditions in Asia Pacific meant revenues were down overall by 5.6%. Demand was particularly slow in China where revenues fell, and in Australia economic and business headwinds, as well as the divestment of the firm’s government consulting business, contributed to a decline in revenue over last year. India continued to perform very well with a strong increase in revenues.
• Across the Americas revenues were up by 3.4% reflecting difficult market conditions in the US. Demand for services continues to be strong in Brazil

Revenue and growth by service line:

• Assurance: $19.5 billion, growth of 3.4% (FY23: US$18.7 billion)
• Advisory: $23.3 billion, growth of 2.6% (FY23: US$22.6 billion)
• Tax: $12.6 billion, growth of 6.3% (FY23: US$11.8 billion)

A few areas in which advisory won in FY24:

We have continued to invest in the work that we undertake with our key technology alliance partners as we help our clients with the ongoing digital transformation of their operations. Wins with our alliance partners grew by 24.5% in FY24. Our investment in alliances will continue in the coming years and we see this as an increasingly important segment of our advisory business. [Ed. note: PwC announced in May that it became the first reseller for ChatGPT Enterprise ever, giving us an opportunity to use a very dated Hair Club for Men reference as they’re also an OpenAI customer.]

In the past 12 months we also saw healthy and growing demand for our Managed Services business which now employs 58,000 people across the world. Our work helping organisations in financial difficulty and facing liquidation also continued to grow with wins from this segment of our business up by 30% in FY24.

It seems clear at this point that Deloitte is winning this year’s revenue contest (again) although their overall growth lagged behind PwC at just 3.9% in US currency.

• Deloitte: $67.2 billion
• PwC: $55.4 billion
• EY: $51.2 billion
• KPMG: TBD, last to report

Wouldn’t it be funny if KPMG ends up announcing double-digit growth? Ha-ha!

The post PwC Reports Un-Chadly Revenue For FY24 appeared first on Going Concern.

The obligatory press release:

Dignari’s 300-strong workforce utilizes innovation at scale and data-driven strategies to advise US government clients. Since 2013, the company has been driving successful program implementations, designing high-impact solutions that maximize effectiveness, prototyping emerging technologies and using data science to improve performance measurement.

“We are excited about welcoming the world-class Dignari team to the EY Government & Public Sector practice,” said Doree Keating, EY Americas Government & Public Sector Leader. “We believe that blending EY US’s commitment to provide customers with mission-ready solutions and Dignari’s IAM capabilities in the homeland security space will offer a highly differentiated value proposition for our government clients.”

“For over a decade, Dignari has made a significant impact on furthering the federal government’s security mission with modern technologies,” said Gena Alexa, Dignari Founder and Chief Executive Officer. “These efforts can be scaled across local and state governments as well — and when combined with the power of the EY network will strengthen outcomes for both the public sector and the people it serves.”

Dignari salaries from Indeed if anyone’s curious.

According to the 2023 Top 100 Contractors report (the Excel sheet can be found here from SAM.gov) that lists the top 100 vendors for the US Government by dollars obligated each fiscal year, Deloitte ranks #26 with $3,711,875,824.60 obligated. Big D holds the distinction of being the only Big 4 firm on the list, ahead of Accenture at #34 but unsurprisingly behind Booz Allen Hamilton at #16. As Trump fans are currently beefing with Deloitte and calling for their government contracts to get cancelled faster than a B-list comedian tweeting on Ambien, now seems like a great time for the other firms to make big moves in what has historically been a space Deloitte dominates.

The Department of Defense is by far EY’s biggest government client according to data on USASpending.gov. For FY23, EY received $312,906,294 in DOD obligations. The next largest obligation amount is the General Services Administration (GSA) with a comparatively tiny $37,306,035.

Security powerhouse Dignari joins EY to accelerate mission enablement across the public sector [EY]

The post EY’s Growing Its Public Sector Practice With a New Acquisition appeared first on Going Concern.

According to a Deloitte survey released last week, half of full-time workers at companies with a minimum annual revenue of $100 million surveyed are “very or extremely worried that the future generation of workers may enter the workforce without sufficient interpersonal and business skills.” Yeah, that’s already happening. See also: Big 4 Firms Are Noticing a Sudden Skills Gap in New Hires and ‘Lockdown-Damaged’ New Hires Struggle to Socialize at KPMG UK. All this time we thought the art of water cooler chitchat was a useless skill but instead it’s a dying one.

Many of those surveyed feel their employers focus too heavily on technical training and not nearly enough — or even at all — on human skills.

Said Deloitte:

In a workforce increasingly leveraging both humans and machines, human capabilities play an essential role in career development, according to nearly 9 in 10 respondents across generations. Concurrently, respondents want their employers to prioritize a myriad of human skills, but teamwork and collaboration ranked at the top (65%), followed by communication (61%) and leadership (56%) more than technical skills like AI integration and data analysis (54%).

Employers: “Best I can do is a mandatory online learning session about ChatGPT prompting.”

Above all, respondents believe these human competencies have staying power. Nearly all surveyed (95%) agree human skills are “timeless” and always important. Yet, 70% of respondents report having worked at a company that pushed employees to learn a new technology-based skillset, only for that technology to fall out of use.

Some more key findings:

• 87% of workers see human skills like adaptability, leadership, and communications as integral to their career advancement.
• Only 52% think their company values employees with human skills more than those with technical skills.
• 94% of respondents are concerned that future generations will enter the workforce without the necessary human skills.
• Workers want their employers to prioritize teamwork and collaboration (65%), communication (61%), and leadership skills (56%) more than technical skills like AI integration and data analysis (54%).

And finally, a pretty picture putting it all together. Deloitte made this a PDF for some reason, sorry.

Most Workers See Need for Greater Balance Between Tech and Human Skills: Deloitte Survey [Deloitte]

The post Deloitte Survey: Machines Are Taking Over; Employees to Become Even More Awkward and Uncollaborative appeared first on Going Concern.

On October 5, the tropical storm soon-to-be-called Hurricane Milton formed in the Gulf of Mexico and by Monday, October 7 became a Category 5 hurricane with winds of 180 mph. Milton would go on to earn the distinction of being the second-most intense Atlantic hurricane ever recorded over the Gulf of Mexico.

On October 6, 35 counties across the State of Florida were under a state of emergency; by the following day, that number had grown to 51. Ahead of Milton’s expected landfall on Wednesday or Thursday of that week, more than a dozen counties in and around Tampa issued mandatory evacuation orders for residents. “Failure to adequately shelter may result in serious injury or loss of life,” wrote National Hurricane Center forecasters in a report issued on October 8. “Milton has the potential to be one of the most destructive hurricanes on record for west-central Florida.”

Milton’s death toll stands at 32 in the US and three in Mexico as of October 21. It’s currently estimated that economic losses from Hurricane Milton could be over $100 billion.

So while PwC staff outside of Tampa were getting pink slips the week Milton was angrily swirling straight at the west coast of Florida, the firm made the decision not to fire people who were likely under evacuation orders from a once-in-a-lifetime hurricane. A tipster originally told us the week of the 7th that PwC would wait until the following Monday to axe Tampa staff but according to Tampa Bay Business Journal, cuts the Tampa office came last Thursday. This aligns with what we were told by our tipster who said PwC “dropped the axe” on October 21 and “destroyed Florida.”

TBBJ didn’t have numbers on how many people were affected, nor do we, but we’re told most cuts happened from senior associate to senior manager level. PwC US COO Tim Grady told TBBJ in a statement that they’re “adapting to meet the needs of our clients and the rapidly changing market.”

“To remain competitive and position our business for the future, we are continuing to transform areas of our firm and are aligning our workforce to better support our strategy, including attracting and moving the right talent and skill sets to the areas where we need them most,” he added.

“It’s not over,” our tipster warns. “Other groups are being evaluated.”

The post PwC Was Thoughtful Enough to Wait Until After Hurricane Milton to Lay Off Tampa Employees appeared first on Going Concern.

We’re also hearing scattered reports of layoffs at Deloitte US which…what? Evidently they forgot to put some names on the list when they first did this back in August. The good news is some of you will be free to trick or treat with your kiddos next week I guess. Someone should go as a Business Update meeting, that’s about as scary as it gets.

Doesn’t it feel like they’ve been saying consulting work has been slow for a suspiciously long time now? Just going to leave this here.

Comment
byu/AngelaNoelMartin from discussion
indeloitte

Deloitte axes 250 UK employees in performance-related cull [FT]

The post Layoff Watch ’24: Deloitte UK Cuts Another 250 People appeared first on Going Concern.

Posts from the big4
community on Reddit

Well now Financial Times is reporting a bunch of people got swept up in a wave of CPE policing centered around their taking multiple courses at the same time during EY Ignite Learning Week in May. “We all work with three monitors. I was hoping to hear new ideas that I could bring to the table to separate myself from others,” said one of them to FT. Mission accomplished?

The recently shitcanned “did not believe they were violating EY policy and were just trying to take advantage of interesting sessions that ranged from ‘How strong is your digital brand in the marketplace?’ to ‘Conversing with AI, one prompt at a time’,” said FT.

As we know, the EY organization is extra sensitive to cheating after they received a record $100 million fine from the SEC in 2022. In that instance it wasn’t so much the cheating itself that got the SEC so worked up but the fact that EY knew of it happening and failed to inform the SEC of such when the SEC asked “are your people sharing answers?” Also that they weren’t just sharing answers on CPE, they were using an exploit that would give out a passing score even if you only answered one question right. “Many professionals acknowledged during the firm’s investigation that they knew their conduct violated EY’s Code of Conduct, but they cheated because of work commitments or an inability to pass training exams after multiple attempts,” read the SEC’s order. Hmm, we’re sensing a theme here.

Apparently the firm did warn staff not to take multiple sessions at once in this most recent case — some of the former EYers speaking out disputed this — but whether they did or not, staff were just demonstrating that go-getter culture of the Big 4. “EY ‘breeds a culture of multitasking’, said one of the axed employees to FT. “If you are forced to bill 45 hours a week and do many more hours of internal work, how can it not?”

“I know a partner who will do two [client] calls and switch their camera on and off depending on who he is talking to. If this is unethical, then that is unethical, too,” said another. Are we sure the partner isn’t overemployed?

Would giving people two weeks off to complete their required 40 hours of CPE perhaps begin to address this pervasive issue once and for all?

EY fires staff who took multiple online training courses at once [Financial Times]

The post Studious EY Employees Just Trying to Grind Out CPE Get F**king Fired appeared first on Going Concern.

To our knowledge, no photos of a mustachioed Joe Echevarria circa 1980 are floating around the internet so you’ll have to use your imagination with this horribly dated commercial.

That story comes from a 2013 Fortune interview in which the Bronx born-and-raised Echevarria reveals he had “rough edges” and desperately needed to acclimate to the polished culture of Big 8 (as we know, that’s now down to 4) if he was going to go the distance:

I had a big mustache and bad hair. Also, I had two suits, one brown and the other green polyester. I had no social graces, either — I didn’t know where the bread plate goes on a table, had never drunk coffee out of a cup with a saucer. It took me a long time to realize that these things matter in the corporate world. No one was willing to tell me.

Until a boss — who he refers to as “mom” in the interview — set him straight:

I had a boss, a Hispanic woman, who gave me good advice. Right before I left on vacation, she said to me, “You’re coming back without that mustache. You will never make it into management if you look like the Frito Bandito.” I had never realized that was holding me back.

In that same interview, he also calls his alma mater the University of Miami “a not-so-great school” (“it was nicknamed Suntan U.”) but they must not have been too pissed about that because they just named him actual president and no longer just an acting one. He’s the seventh president of UM and the first alumnus (’78) to hold that title.

Prior to this he served on the UM Board of Trustees from 2012 to 2019 and became Chief Executive Officer of UHealth in 2020 followed by CEO of the whole university two years later.

Nobody bleeds orange and green like Joe Echevarria!!

Congratulations on being named the seventh president of the @univmiami! pic.twitter.com/m2xUoejqaR

— Miami Hurricanes (@MiamiHurricanes) October 18, 2024

Reaction to the news on social media seems mostly positive except these people in r/professor griping about “how corporate universities have become.”

Joe Echevarria named seventh president of the University of Miami
byu/TheProfessorO inProfessors

Fans of Miami Hurricanes football seem particularly pleased with the appointment.

“Excellence, continuous improvement, and impact are more than shorthand for rising to our immense potential. Those words remind us that unless we are giving our very best—in academics, in research, in patient care, and in athletics—we are not worthy of ‘The U.’”

— Joe Echevarria pic.twitter.com/BoyDsUiapF

— GO ‘CANES! (@83_87_89_91_01) October 21, 2024

“[Coach Mario Cristobal] is the right person at the right time.”

— President Joe Echevarria pic.twitter.com/cP66cquQ7D

— GO ‘CANES! (@83_87_89_91_01) October 20, 2024

What better time then after a win to welcome our new @univmiami president?

Thanks for being right there with us for our victory against Louisville, President Joe Echevarria! #GoCanes pic.twitter.com/v0lwTYqyI0

— Miami Hurricanes Football (@CanesFootball) October 20, 2024

It’s been ten years since Joe surprised everyone by dipping out of Deloitte at the end of his first term as CEO despite not having reached mandatory retirement age. Joe said he left so he could focus on his “passion for public service” but some people floated the idea that he wouldn’t have been able to secure re-election had he stayed. Whatever the reason, seems he’s doing just fine these days.

For those who weren’t around back in those days, please enjoy this small selection of Joe Echevarria lore:

• Unfounded Crackpot Theory of the Day: Did Joe Echevarria Want to Stick It To Deloitte?
• Joe Echevarria Was a Hipster Before It Was Cool
• Deloitte CEO Joe Echevarria Doesn’t Want to Hear About the Troubles You’ve Had Selling Your House
• We Read This Awful Interview with Deloitte’s Joe Echevarria So You Don’t Have To

The post It’s a Good Thing Ex-Deloitte CEO Joe Echevarria Already Had Green in His Blood appeared first on Going Concern.

A press release finally showed up this afternoon.

The real story is that EY’s headcount shrunk for the first time since 2010. They were sitting at 393,000 people as of June 30, 2024, down almost 2,500 (2,450, said FT) from June of 2023.

The year sucked so bad they resorted to bragging about how many badges their people earned in fiscal 2024. And the 192 million lives they’ve impacted [citation desperately needed, EY*].

In her first Value Realized letter as CEO, Janet Truncale acknowledged the terrible year they’ve but said she sees “a powerhouse organization in great shape.” She also said “we will continue to invest in EY people” despite how many people at EY US got ripped off on raises, bonuses, and promotions this compensation season. “We have a refreshed people proposition that focuses on the things EY people told us they care about the most: developing skills; being empowered to prioritize their wellbeing; and building an
inclusive and positive culture.” EY people told you that did they?

What even are these snapshots in the annual report? How many countries watched videos?

This is what we’re here for: revenue and growth by service line.

LOL at the small text under Preferred Auditor.

Total revenue of EY global in US currency: $51.2 billion, growth of 3.9% in local currency.

• Assurance: $17.3 billion, growth of 6.3% in local currency (5.8% in USD)
• Consulting: $15.6 billion, growth of 0.1% in local currency (unchanged in USD)
• Strategy and Transactions: $6.2 billion, growth of 2.3% in local currency (2.8% in USD)
• Tax: $12.1 billion, growth of 6.3% in local currency (6.7% in USD)

So single digit growth across the board. Poor consulting, that’s rough.

The EMEIA region (Europe, the Middle East, India, and Africa) saw the most growth at 6.9% while Americas grew by 2.7% and Asia-Pacific didn’t grow at all.

This news puts Deloitte in the lead of the Big 4 revenue race as expected:

• Deloitte: $67.2 billion
• EY: $51.2 billion
• PwC: TBD, next to report
• KPMG: TBD, last to report

Just gonna drop the whole report here so we have it for easy reference later if we need it. It was impossible to find on EY’s site earlier.

EY reports global revenue of US$51.2b for fiscal year 2024 [EY]

*This figure is related to the EY Ripples program. We’re still gonna need a citation.

The post EY and the Terrible, Horrible, No Good, Very Bad Year appeared first on Going Concern.

Under normal circumstances we wouldn’t be terribly interested in news coming out of PwC Netherlands but in this case it’s relevant because the thing they did earned Dutch KPMG the largest PCAOB fine to date when they got caught doing it in 2023. Why’s our audit regulator fining overseas firms when they should be worried about our firms flunking audit inspections? Your guess is as good as mine. Appearances.

The TLDR is PwC Netherlands caught its people cheating. On their wives? No. On their taxes? Also no. The firm discovered that their people were sharing answers to e-learning, a phenomenon that happens at every large accounting firm all the time but one that regulators — particularly our regulator in the US — like to clutch pearls about as if this thing is unconscionable and unique to the firms they catch doing it. On its face, cheating on exams isn’t a great look for a profession that’s supposed to protect the public and holds itself out as a bastion of ethics. But come on.

PwC Canada was sharing answers like crazy up until 2020 and managed to get a completely flawless PCAOB inspection during this same period which you’d think demonstrates that these people know how to do their job. Isn’t that what these trainings are testing? Again…appearances.

Dutch Deloitte and Mazars (now Forvis Mazars but just Mazars back when this happened) have had their own little cheating scandals but what sets them apart from KPMG is that KPMG “submitted – and failed to correct – multiple inaccurate representations to the PCAOB” and claimed the firm had no knowledge of answer sharing by its personnel until it received a July 2022 whistleblower report. Oops. The PCAOB will let abysmal audit quality slide but don’t you lie to them, they hate that. That goes for you too, Europeans.

In 2023, the rampant cheating in their country prompted the Dutch Authority for the Financial Markets (AFM) to ask the big audit firms to investigate themselves to root out any possible answer sharing. Revealed in their 2023/2024 Transparency Report [PDF], PwC says they found just that. What a shocking turn of events. Who could have seen that coming.

Said the firm:

The investigation has found that improper answer sharing has occurred within PwC Netherlands. We know that this behavior stands in contrast to the integrity and trust that must serve as the foundation of our firm, and we are committed to addressing the issue thoroughly.

The scope of PwC’s investigation includes the period from July 2017 to October 2023 and all parts and job levels of the organization. This investigation is ongoing and is expected to be finalized by fiscal 24/25. So next year.

In the meantime, they’ve implemented measures to crack down on this behavior:

While the investigation remains ongoing, we have already implemented a number of measures, such as, the introduction of a Learning Code of Conduct to provide clarity of the firm’s expectations and requirements related to participation in and the delivery of training, improving the way e-learnings are organised by converting some of them into classroom training sessions and the implementation of detective controls to flag possible improper behavior in relation to mandatory e-learnings. We are also taking action to hold colleagues accountable where appropriate, such as corrective conversations, written warnings, financial penalties, loss of position or leaving the firm.

We’ve heard stories about people at EY US getting canned for BSing through e-learning ever since EY got hit with a $100 million fine for cheating in 2022, a fine that was no doubt multiplied by the firm making false submissions to the SEC, so it isn’t too strange to hear that PwC might be axing people for it too. Or maybe they’re just saying that. Let’s be real, the high performers are getting “corrective conversations” at most. Assuming PwC didn’t lie to regulators about it they should be in the clear on a hefty fine.

PwC Netherlands said they are “engaging in a root cause analysis to identify and interpret the underlying causes of improper answer sharing.” Maybe, and I’m just spitballing here, it has to do with the intense pressure of Big 4 grind culture and a lack of fucks given on the part of overworked staff forced to sit through checkbox trainings? “The results of this analysis will be finalized after completion of the investigation and used to strengthen the measures already taken and introduce any new measures as appropriate,” said PwC. Can’t wait.

“Few things erode trust like impaired ethics,” said PCAOB Chair Erica Y. Williams in April 2024 when the PCAOB announced fines against Deloittes Indonesia and Philippines for cheating. “To protect investors, the PCAOB will continue to address serious quality control deficiencies at PCAOB-registered firms around the world.”

“Yeah, we know. Do you really have nothing better to do?” I asked in the write-up of those fines.

Since PwC came clean about the situation we shouldn’t expect them to earn a big fine for this. A slap on the wrist at most if even that.

Related I guess:

The post PwC Joins Deloitte, KPMG, and Mazars in the Cheater Hall of Fame appeared first on Going Concern.

FT:

On a call with staff, EY-Parthenon bosses blamed a disappointing market for mergers and acquisitions and private equity activity, meaning advisory revenue growth has been slower than expected since the start of the firm’s fiscal year in July, according to people familiar with the discussion.

EY said the decision to delay start dates for a second year running was made “after careful consideration of the current M&A environment and our business needs” and that it would “ensure that our new joiners have the quality and breadth of assignments to ensure a successful start and strong professional trajectory”.

The firm will provide stipends ranging from $12,000 to $35,000 to those affected, depending on their original start date and whether they are joining with an undergraduate degree or an MBA, according to a person familiar with the figures.

Just last week, on the same day PwC began a big batch of layoffs, it was reported EY partners would be getting about two percent sliced off of their yearly compensation, money that will go back into the business to manage cash flow.

When EY compensation numbers came out in August, several people reported no raise, no bonus, and/or no promotion. To quote one manager who received a 2.4% salary increase and 0.88% bonus: “Balls in my throat.”

EY is certainly not the only Big 4 firm dealing with a significant slowdown in deals activity but it is the only Big 4 firm that burned a $500 million hole in its pocket to explore a split of audit and consulting practices that never materialized. After Project Everest crashed and burned, the firm went on to lay off 3,000 people immediately after (they claimed this axing of 5% of the workforce was totally unrelated to Everest) and forced out an unknown number of partners just before Christmas.

We expected EY’s FY24 revenue announcement to come out some time in September so obviously that’s late. Whether or not it’s an intentional delay is anyone’s guess.

EY delays start dates for graduates because of slowdown in deals [FT]

The post EY Tells 200 Grads Expecting to Start Soon to Hit the Bench Until Next Year appeared first on Going Concern.

“Trump has just so thoroughly failed to deliver on his economic populism (excepting a disjointed China policy),” Vance wrote in February 2020.

“I think Trump will probably lose,” he wrote in a message in June 2020, a few months before ballots were cast in an election that Vance would later claim, falsely and repeatedly, was stolen by the Democrats.

It’s no secret JD Vance used to be a Trump critic. In 2022, Vance’s former roommate Josh McLaurin (now a Georgia state senator) shared Facebook DMs from Vance he received in 2016 that said, among other things, “I go back and forth between thinking Trump is a cynical asshole like Nixon who wouldn’t be that bad (and might even prove useful) or that he’s America’s Hitler.”

Although WaPo chose not to name the recipient of the 2020 DMs leaked to them due to the potential for retaliation, Breitbart was more than happy to do so in the spirit of such. In “Exclusive — Deloitte Consultant Behind Ethically Questionable Leak of JD Vance Communications to Washington Post,” Breitbart reveals the leaker to be Deloitte principal Kevin Gallagher:

But what the Post did not do is tell its audience who Vance was communicating with in these messages, or provide the full context of the conversation, since it only reported part of one side of it. The Post argued it granted the source who provided these messages anonymity “because of concerns about retaliation,” but Breitbart News can reveal the person’s identity here for the first time as a well-connected Deloitte consultant.

Oh no, here it comes.

The Deloitte consultant, whose identity the Washington Post’s Peter Jamison hid from the newspaper’s readers, is named Kevin Gallagher. Deloitte’s website lists Gallagher as a “principal” with the firm, based in Connecticut. Breitbart News has seen a screenshot of messages that Vance sent to Gallagher—the other side of the conversation is not available, because Gallagher had deleted his account, thereby deleting the messages—confirming that Gallagher is in fact the recipient of these.

That same day, Donald Trump Jr. accused Gallagher — who has since gone into internet hiding — of interfering in the election and asked if it’s time for the GOP to “end Deloitte’s taxpayer funded gravy train.”

An executive at @Deloitte named Kevin Gallagher decided to interfere in the election & leak private convos with JD Vance to help Kamala Harris. Deloitte also gets $2B in govt contracts. Maybe it's time for the GOP to end Deloitte's taxpayer funded gravy train?

CC @speakerjohnson pic.twitter.com/gAOs1TBt86

— Donald Trump Jr. (@DonaldJTrumpJr) September 27, 2024

Conservative newsletter Amuse echoed this sentiment in a long-ass tweet:

The sheer audacity of Gallagher’s interference would be appalling on its own, but it is especially outrageous when considering his position at Deloitte—a firm that has raked in billions in government contracts. Over $2 billion, in fact, has flowed into Deloitte’s coffers from taxpayer-funded projects. Why, then, are we allowing such an entity, whose executives play politics for personal gain, to enjoy the spoils of government largesse? Deloitte has been cashing checks courtesy of American taxpayers while its leadership engages in partisan warfare. The GOP must recognize this glaring conflict and take swift action to curtail Deloitte’s access to federal contracts.

Not to ackshually here but ackshually, Deloitte plays both sides because what they value above all else is revenue. Here’s some data from government transparency group OpenSecrets. Remember they’re tracking individual donations among these.

LOL at the 77.45% to Republicans in 2002, the year Sarbanes-Oxley rose like a phoenix from the ashes of Arthur Andersen’s literal tons of shredded documents. Surely unrelated.

Here’s a breakdown by affiliate for the 2024 election cycle (a.k.a. the nightmare in which we are currently residing):

Lastly, recipient data from the 2024 election cycle. What this says is that individuals associated with Deloitte are throwing more money at Kamala Harris than Donald Trump. What it doesn’t say is that Deloitte endorses Kamala Harris. They’re gonna quietly endorse whoever is going to allow them to make the most money, which is probably why Kevin Gallagher is not getting invited to happy hour any time soon because this kind of heat is bad for business.

Wrote WaPo’s Peter Jamison in a follow-up article:

On Sept. 27, Donald Trump Jr. exposed the employee’s name and photograph to millions of people on social media, writing, “Maybe it’s time for the GOP to end Deloitte’s taxpayer funded gravy train?” Others — including Vance’s chief spokesman and a Republican senator — circulated Trump Jr.’s comments, and the conservative website Breitbart published a story naming the man and highlighting his job.

Deloitte receives about $3 billion annually from federal agencies including the Department of Health and Human Services and Department of Defense.

Ethics experts said the episode is a potentially ominous preview of how a second Trump administration might use the enormous power the federal government wields over private industry to punish political acts by individual workers. Although federal contracting laws prohibit cutting off a business because of its workers’ private political views, such threats could have a chilling effect, they said.

Added Jamison:

“I’ve never seen anything like this,” said Kedric Payne, senior director of ethics at the nonpartisan Campaign Legal Center and former deputy chief counsel in the Office of Congressional Ethics, adding that the goal was probably to pressure Deloitte into firing the worker. “You can’t imagine that if one employee out of thousands made a statement that offended an official, that then the government contracts would be in jeopardy.”

Yeah, they’re probably not. The #boycottdeloitte hashtag is pretty quiet all things considered.

“This individual shared private personal messages on his own volition without the knowledge of Deloitte, which is a non-partisan firm,” Deloitte told WaPo in a statement. “Deloitte is deeply committed to supporting our government and commercial clients and we have a long track record of doing so across parties and administrations.”

Comments are open, don’t make us regret it. Behave like the educated adult professionals you are please and thank you.

The post Here’s Why Trump Fans Are Mad at Deloitte appeared first on Going Concern.

Deloitte has added Greenhouse #6 to its stable of Greenhouses across the US in San Francisco, New York, Washington, Houston, Deloitte University in Westlake, TX, and now Chicago.

What are Greenhouses? “Deloitte Greenhouses are cutting-edge physical spaces located around the world designed to help clients tackle their complex problems,” says Deloitte. That’s not really helpful is it?

Digging deeper, we find Deloitte uses scent to “enhance group productivity” at corporate Greenhouse sessions. Not making this up. Here’s what they say:

Quick, which is your most powerful sense? It isn’t sight. It isn’t sound. It’s smell!

Your sense of smell is more than a million times more sensitive. And as many people know, scent has a powerful effect on our emotions, memory recall, and state of mind.

Many innovative workplace designs expend most of their effort on sight and sound [Ed. note: the CIA is a fan of this too], but often forget about scent. Did someone think we were motivated by the smell of office carpet and printer toner? It’s time to give the olfactory nerve some respect.

Ah, this explains why you have trouble getting work done at home when your cat just dropped a fat log in the next room.

When participants come to The Deloitte Greenhouse® space to solve complex problems, we consider the multi-sensory experience that can impact a participant’s cognition, physiology, and behavior—all critical in promoting disruptive thinking and productive action. And as part of that, each dedicated Deloitte Greenhouse® space draws upon the science of scent to help Lab participants shift mindsets, accelerate breakthroughs, and confound expectations.

Our experience designers call it “holistic sensory activation.” You may just think “hmm, that smells nice.” These elements are just another tool that helps you and your colleagues work together in ways that will blow away your previous workshop experiences. When you visit a Deloitte Greenhouse® space, you’ll know from the moment you walk in–innovation is in the air.

Smells like the refreshing aroma of cash in Deloitte’s pocket.

If anyone’s interested, they’re hiring Lab Leads, Lab Managers and Lab Producers. Relevant Fishbowl discussion.

Earlier:

The post Deloitte Unveils Its Chicago Trip Cave appeared first on Going Concern.

According to exclusive reporting by Mark Maurer at WSJ, PwC will be laying off about 1,800 people, or about 2.5% of the workforce. That’s PwC US, guys. The reason given is “restructuring its products and technology group to simplify operations and address declining demand for certain advisory services.”

The Big Four accounting firm is in the process of cutting employees in the U.S. and elsewhere, primarily in its U.S. advisory and products and technology operations, according to people familiar with the matter. The cuts, about half of which are offshore, span employees ranging from associates to managing directors and include business services, audit and tax, the people said.

Wait, they’re cutting offshore people? What is happening. The worst part is that the firm won’t be informing the soon-to-be-axed until October, according to WSJ’s sources.

We were informed last year that PwC would be raising the bar in performance reviews for the express purpose of trimming some fat without outright laying them off and it sounds like that continued this year. That and a soft return-to-office must not have been effective enough to avoid this unfortunate situation.

The last time we wrote about PwC layoffs on our side of the world was back in 2009: People Are Still Talking About Those PwC Layoffs. Allow us to quote a bit of that article written 15 years ago:

It’s rough out there. And the firm making people sweat it out for a month before they find out if it’s their head on the chopping block isn’t making it any easier.

PwC Laying Off 1,800 Employees as It Plans Restructuring of Products Business [Wall Street Journal]

The post Layoff Watch ’24: PwC is Giving 1800 People the Axe Next Month appeared first on Going Concern.

US partners at EY have been told the firm will hold back some of their pay for 2024 after a tough financial year that has left the accounting firm’s leaders facing criticism from their rank and file.

The decision to defer around 2 per cent of partners’ annual compensation was taken to help the firm manage cash flow, according to people familiar with internal communications, and has compounded disappointment over relatively modest pay increases for the financial year that ended in June.

…

EY has also cut the proportion of expected profits for the current year that it pays partners in advance in monthly installments, deferring more than usual to be paid after the end of the fiscal year.

So we can safely assume those accounting tricks they were going to use to plug the giant hole left by Project Everest didn’t work out eh? Managing Partner Julie Boland apparently got an earful from partners on a recent webcast, partners being annoyed that they didn’t get the million-dollar payouts Everest cheerleaders promised and wanting someone to pay for this whole mess. Remember when Carmine said the firm was missing out on $10 billion in consulting cash due to conflicts of interest Project Everest would have liberated it from? Maybe they shouldn’t have named it after a mountain known for hosting hundreds of dead bodies belonging to brave and adventurous people who attempted to climb it.

Let’s update that old slide EY created to sell the Project Everest audit/consulting split to staff.

Related:

Anyone at EY who got boned on a promotion and/or bonus this year — and there were many — should at least feel somewhat better knowing partners got screwed a little too. Maybe.

Will the deferred pay make its way back into partners’ pockets when consulting warms up again? Nope. FT says they’ll have to wait until they retire or leave “since it will be added to the capital they are required to keep in the firm.”

EY revenue isn’t out yet, it’s either them or PwC due to report next after Deloitte. Our guess was PwC due to their recent layoffs which often accompany crunching of the final numbers for the year but who knows at this point. EY’s revenue results usually show up mid-to-late September and PwC in October. Clearly EY is deferring the matter.

What we do know is it’s safe to assume Deloitte has won the revenue race for FY24.

EY to hold back some pay from US partners after tough year [Financial Times]

The post Well F**k EY Partners Then I Guess appeared first on Going Concern.

When she left the Green Dot at the end of FY19, Engelbert made the transition to commissioner of the WNBA where she remains to this day, taking flak from fans for being too businesslike and speaking in PR. Those years of Deloitte training are really paying off for her. At the same time, the WNBA is stronger than ever with 2024 its most-watched regular season in 24 years, game attendance at 22-year highs, and merchandise sales up 601% from 2023.

With WNBA playoffs underway, Fortune decided to see what she’s up to and asked what her average day looks like.

8:30 a.m.: Engelbert arrives at the office, often a bit earlier than her colleagues. After spending the majority of her career in the corporate world, Engelbert says she had to adjust when she entered the sports industry.

“You got in really early when you were in the corporate world, you were trying to beat the traffic that commute and you had meetings, sports, because there’s so many games and so many things that night and weekends,” Engelbert said.

“My first day, I got in at 7:30, but no one else arrived until about nine,” she said. “Now I aim to get in around 8:30 or 9.”

Oh and she still practices SMOR, a recharging technique she learned in her public accounting days. “I learned this at Deloitte because when you’re running a firm of that size, you have to find time,” she told TIME in 2022. “We dubbed them smors. My EA used to put them on my calendar: Small moments of recovery. You need moments during the day.”

Yep, still taking those small moments of recovery and still under the same acronym.

12 p.m.: Engelbert adheres to a time-saving regime she refers to as “SMORE,” an acronym for “small moments of recovery.” She adds these to her calendar, seeing lunch as a networking opportunity or a chance to take a break and get outside.

“Usually over the lunch hour, I need to get out. If I’m working from home, I go for a walk and then have lunch when I get back,” she said.

Good reminder to all of us to go get a little sun on our cheeks in the middle of the work day. Especially now that daylight is quickly slipping away.

From Deloitte CEO to WNBA commissioner: Inside Cathy Engelbert’s daily routine [Fortune]

The post Five Years After Leaving Deloitte, Cathy Engelbert is Still the First Person in the Office in the Morning appeared first on Going Concern.

TLDR: Big D partners won this round by quite a bit.

Woe Be Unto PwC UK Partners

PwC UK partners pocketed £862,000 on average for the year ended June 30, 2024 — that works out to more than $1.14 million in freedom units. This is down from £906,000 in 2023 and way down from 2022’s record of £1 million, the latter having been boosted by the sale of PwC’s Global Mobility Tax and Immigration Services business. Total revenue at PwC UK was £6.3 billion ($8.4 billion USD) for 2024, heavily bolstered by 26% growth in the Middle East business while the UK business trudged along at 3% growth overall.

Revenue totals for PwC UK:

Now Let’s See Why They’re Called Big D

Deloitte didn’t have a spectacular year either yet its partners still took home an average of £1.01 million for the year ended May 31. Revenue results released this week show an increase of 2.4% to £5.7 billion ($7.6 billion USD). So they made less than PwC without a Middle East of their own to carry them and partner pay dropped by 5% but still beat PwC in partner take.

Consulting revenues contracted by 1% from £1.6 billion in FY23 to £1.58 billion in FY24 and Financial Advisory “faced a challenging market” to come out at £653 million in FY24 (down from £669m in FY23).

Deloitte didn’t whip up a snazzy autumnal-colored chart for their revenue results, just this screenshot of a table in what we assume is Word.

Since September of 2023, Deloitte has laid off nearly 1,000 people (that we’re aware of). Said the firm in their revenue announcement:

In response to a challenging market we had to take the difficult decision of making a number of targeted redundancies early in the year. However, we have continued to hire in areas of growth, with 3,387 new colleagues, including 2,150 graduates, apprentices and interns joining the firm. 6,800 of our 27,000 people were promoted this year – 80 of them to partner.

As of June 2024, the number of partners at Deloitte UK is 1,369, 30% of whom are women.

More:

• PwC UK partner pay falls to £862,000 as growth slows [FT]
• Deloitte UK partners pocket £1mn despite slowdown [FT]

The post Pissing Match of the Day: Deloitte vs. PwC Partner Pay appeared first on Going Concern.

SecurityWeek reports:

The hacker known as IntelBroker announced late last week on the BreachForums cybercrime forum the availability of “internal communications” obtained from Deloitte, specifically an internet-exposed Apache Solr server that was accessible with default credentials.

The hacker claims the stolen data includes email addresses, communications between intranet users, and internal settings.

The data is available for download to the hacking forum’s active users or those who have purchased credits.

Cyber Security News has a screenshot of the forum post, a forum we won’t be visiting tyvm.

According to CSN, the compromised data includes email addresses and communications between intranet users, among other things. Deloitte told SecurityWeek an internal investigation “has found no threat to client data or other sensitive data related to this incident.”

A quick search of our archive reveals a few prior hacking incidents for Deloitte:

• Deloitte Tries To Play It Cool After Cyberattack
• Sony Hack Also Leaked Deloitte Salaries, Reveals Gender Gap*

The latter incident wasn’t Deloitte’s fault, to be fair. Sony got breached hard in 2014 and an ex-Deloitte employee who worked for Sony HR at the time just happened to have a spreadsheet with the 2005 salaries of 31,124 Deloitte employees. The sheet also contained race and gender data.

Just going to leave this here for Deloitte to pursue at their leisure.

The post Hackers Say They Got Their Hands on Deloitte Intranet Communications appeared first on Going Concern.

While we await EY revenue numbers that should drop some time next month, sources inside EY are running to The Times to say partners are being warned of a second year of pay cuts ahead.

Partner pay at EY is set to fall for the second year in a row while senior staff will forgo a pay rise, in a sign that professional services firms are still battling a downturn.

Benoit Laclau, the firm’s managing partner who runs the consulting division for UK and Ireland, told senior managers and directors on a call last week that average partner pay would be down this year, according to EY sources.

But we already knew the partners have been warned, stories about it came out back in April. Prior to the end of EY’s fiscal year on June 30, EY UK & Ireland Managing Partner, Finance and Transformation, Stuart Gregory gave a presentation to the partners letting them know partner profit could drop as much as 15 percent this year. Based on prior year partner payouts, a 15 percent drop would be somewhere in the neighborhood of £646k ($865k USD), putting them only slightly above 2020’s low of £667k.

2023 was the first time EY UK partner profits had taken a hit since all that stuff happened with a certain virus we don’t talk about anymore. Partner pay at EY UK so far for this decade:

• 2024: ?
• 2023: £761,000
• 2022: £803,000
• 2021: £749,000
• 2020: £667,000
• 2019: £679,000

Earlier this month it was reported that many service lines at EY UK received pay cuts for raises this year.

The post EY UK Partners Warned Again Pay Will Suck This Year appeared first on Going Concern.

This bit though:

83 percent of the 1,345 CEOs surveyed expect a full return to office over the next three years, up from 64 percent in 2023. That number increases to 87 percent for CEOs in the 60-69 age group because boomers are actually the worst.

Male CEOs are more gung ho (the spellcheck wants to correct this to “bunghole” and honestly…) on a full return to office compared to their female counterparts: 84 percent of them expect a full return to office within three years while 78 percent of female CEOs feel the same.

Guess the era of the employees having all the power is gone, or at least that’s what CEOs think. Was nice while it lasted.

The post CEOs Surveyed By KPMG Feel a Full Return to Office is Imminent appeared first on Going Concern.

OP says:

I’ve been working here a year in an office in New York and we had a call yesterday that went terribly. I believe the call was supposed to just be a tech training but it devolved into discussion over why this year was the way it was.

The biggest offender was a partner who explained the new PTO change as “now we don’t have to pay people out when they leave which is just good business let’s be real” like… ummmm WHAT?! He basically just admitted they made the policy to screw us over.

After months of rumors, KPMG announced firmwide unlimited PTO earlier this month. It was only a matter of time before some bullshit started coming out.

We all know “unlimited” PTO is a) a scam and b) a good way to avoid having several tens of millions of dollars a year hanging over your head as was stated in the email sent among EY leadership leaked in late 2020 when they made the switch to unlimited PTO. Text from the EY email quoted directly (emphasis ours):

A few key takeaways from the slide deck that support the reason for the change include:

• Provides cost savings of about $36M per year (2019 cost) associated with paying unused vacation at termination.
• Freezes the current vacation lability for the growing number of states with an accruat cap vs. a “use it or lose it approach, which significantly increases cost of paying unused vacation at termination. CA, CO, IL, MA, LA and i have accrual cap 1.5x annual allotment (25% of our people)
• Aligns with One EY, moving personnel to a single vacation policy and away from variances necessitated by varying state laws around treatment of accrued vacation
• Better aligns with culture of trust, flexibility and wellbeing
• Eliminates entitlement mentality and need for carryover of unused time or sense of “loss” by our people
• Positions EY as a “first mover among the big 4, providing a competitive advantage and serving as a differentiator on campus

For your reference, attached are the communication plan and a comprehensive list of questions and answers. Some of the key points above may not be shared with our people (e.g. $36M savings), but as business leaders you to know that this is a significant reason for the change.

Make sure the grunts don’t hear about the cost savings of $36 million that we listed as the first reason for the change! No sir. People know that’s a big reason why a firm would make this switch, you just don’t expect a partner to say that part out loud.

It’s just good business let’s be real!

The post QOTD: “Now We Don’t Have to Pay People Out When They Leave Which Is Just Good Business” appeared first on Going Concern.

“When Anna joined this specific team, she was told that many employees had resigned due to the excessive workload, and the team manager told to her, ‘Anna, you must stick around and change everyone’s opinion about our team.’ My child didn’t realize she would pay for that with her life,” the email said.

A tweet by @kaay_rao — which is where we first saw the letter shared yesterday — has 3.2 million views as of publication time.

Heartbreaking news from EY Pune – a young CA succumbed to the work pressure and nobody from EY even attended her funeral – this is so appalling and nasty!!! pic.twitter.com/pt8ThUKiNR

— Malavika Rao (@kaay_rao) September 17, 2024

Social media reaction and media coverage since the letter dropped yesterday has pushed EY India into issuing a statement. “Anna was a part of the Audit team at S R Batliboi, a member firm of EY Global, in Pune for a brief period of four months, joining the firm on 18 March 2024. That her promising career was cut short in this tragic manner is an irreparable loss for all of us,” EY’s statement said [source: Economic Times]. She passed away on July 20.

“We are taking the family’s correspondence with the utmost seriousness and humility. We place the highest importance on the well-being of all employees and will continue to find ways to improve and provide a healthy workplace for our 100,000 people across EY member firms in India,” they said.

The statement, brusque and hollow even by corporatespeak standards, is not being well-received by the public so far.

EY’s response is a classic lesson on how to say nothing will change without saying nothing will change. pic.twitter.com/HuHIDScGLf

— Lavanya Mohan (@lavsmohan) September 18, 2024

More conversation in @kaay_rao’s replies.

Earlier: Mother Pens Letter Calling Out EY After Her Overworked Daughter Suddenly Passed Away at 26

The post EY Responds to the Viral Letter From Bereaved Mother of a Deceased Auditor, Social Media Calls BS appeared first on Going Concern.

She writes:

Anna would retum to her room utterly exhausted, sometimes collapsing on the bed without even changing her clothes, only to be bombarded with messages asking for more reports. She was putting in her best efforts, working very hard to meet the deadlines. She was a fighter to the core, not someone to give up easily. We told her to quit, but she wanted to learn and gain new exposure. However, the overwhelming pressure proved too much even for her.

Everything was new to her-the organization, the place, the language and she was trying very hard to adjust. You should show some consideration to new employees, Instead, the management Took full advantage of the fact that she was new and overwhelmed her with both assigned and unassigned work This is a systemic issue that goes beyond individual managers or teams. The relentless demands and the pressure to meet unrealistic expectations are not sustainable, and they cost us the life of a young woman with so much potential

She goes on to call EY out for being a “company that speaks of values and human rights” but that didn’t even send anyone from the firm to the funeral of a recent starter:

Anna’s death should serve as a wake-up call for EY. It is time to reflect on the work culture within your organization and take meaningful steps to prioritize the health and wellness of your employees. This means creating an environment where employees feel safe to speak up, where they are supported in managing their workload, and where their mental and physical well-being is not sacrificed for the sake of productivity.

No one from EY attended Anna’s funeral. This absence at such a critical moment, for an employee who gave her all to your organization until her last breath, is deeply hurtful. Anna deserved better, and so do all the employees who continue to work under these conditions. My heart aches not just for the loss of my child but also for the lack of empathy shown by those who were supposed to guide and support her. After her funeral, I reached out to her managers, but received no reply. How can a company that speaks of values and human rights fail to show up for one of its own in their final moments? Becoming a Chartered Accountant involves years of toil, hardship, and sacrifice-not only for the student but also for the parents. Years of my child’s hand work have been snuffled out by just four months of EY’s callous attitude.

The heartbreaking letter ends with:

I hope my child’s experience leads to real change so that no other family has to endure the grief and trauma we are going through. My Anna is no longer with us, but her story can still make a difference

Full letter below as shared by kaay_rao on Twitter.

Update: EY made a statement. “We are taking the family’s correspondence with the utmost seriousness and humility. We place the highest importance on the well-being of all employees and will continue to find ways to improve and provide a healthy workplace for our 100,000 people across EY member firms in India,” they said, unconvincingly.

The post Mother Pens Letter Calling Out EY After Her Overworked Daughter Suddenly Passed Away at 26 appeared first on Going Concern.

Meanwhile, EY China put out this press release:

EY Greater China Region (EY) joins hands with Yan Chai Hospital and Share for Good for joint charitable initiatives. A group of 25 volunteers took part in visiting and distributing mooncakes, sharing holiday blessings and warmth with more than 800 underprivileged children, seniors and families from multiple beneficiary institutions.

The Mid-Autumn Festival — also called the Moon Festival or Mooncake Festival — is celebrated every year on the 15th day of the 8th month of the Chinese lunar calendar, so sometime in late September or early October on the Gregorian calendar. Here’s a quick explainer from South China Morning Post for the unfamiliar:

The press release continues:

Jasmine Lee, EY Hong Kong and Macau Managing Partner, says: “My heartfelt thanks to the charitable organizations and volunteers for their support on this campaign and their charitable efforts. Their support and facilitation have enabled our series of activities to be held smoothly. Akin to the Mid-Autumn Festival full moon, mooncakes symbolize reunion and harmony, while the society serves as a whole, and we are all a part of it. On top of adding the festivities to the holiday through these activities, allowing everyone to welcome and enjoy the Mid-Autumn Festival, we witnessed the coming together of community resources and strength. More importantly, we hope to continue conveying the message of care and support to the underprivileged, and to encourage the spirit of community and charity, where everyone cares for each other and build a society of inclusivity and kindness.”

The firm has been known to hand out mooncakes to staff this time of year, too.

There, some nice news for once.

The post While PwC Begs Clients Not to Leave, EY Hands Out Cake appeared first on Going Concern.

Wrote SFC:

The deal comes after KPMG in March moved to extend its lease at its current office at 55 Second St., which it has occupied since 2003, on a short-term basis of less than three years. Its future home is located two blocks south, near Salesforce Park.

“Our planned move not only reaffirms our longstanding commitment to the city of San Francisco but also demonstrates our dedication to investing in both our people and capabilities to deliver the most innovative solutions to our clients,” said KPMG’s Chris Cimino, a managing partner in San Francisco, in a statement. “This new building, including nearly 100,000 square feet of space for our teams, will provide a superior in-office experience and foster collaboration and creativity.”

The new office will be 100,000 square feet at 505 Howard St, pictured here on Google Street View:

Look how much cleaner those curbs are at the new spot. We wouldn’t recommend eating off of them — it’s San Francisco after all — but they sure are surprisingly sparkly for downtown.

A spokesperson told the paper the new, smaller space is “consistent with market trends” and “best suited for our people and our clients.”

As far as we know, most of KPMG is operating a roughly 3-day in office hybrid model. The 1,000 people working at KPMG San Francisco will be building neighbors with Intuit, who will be taking possession of about 36,500 square feet in January 2025.

Terms of the lease weren’t disclosed.

Bonus Google reviews of KPMG San Francisco since we happened to be on Google Maps anyway:

KPMG is downsizing its San Francisco office. Here’s where the accounting giant is moving [San Francisco Chronicle]

The post KPMG Is Ditching 38,000 Square Feet in San Francisco appeared first on Going Concern.

The total reported aggregate global revenue (unaudited): $67.2 billion for the fiscal year ending May 31, 2024. That’s a 3.1% increase in local currency (3.6% increase in USD) from FY2023. By comparison, the jump from 2022 to 2023 was a 14.9% increase; revenue growth from 2021 to 2022 was a staggering 19.6%. from Deloitte’s 2022 revenue, not quite as big a jump as the 19.6% increase between 2021 ($50.2 billion) and 2022 ($59.3 billion). It was only a few revenue announcements ago that Deloitte became the first Big 4 firm in history to break $50 billion in global revenue.

• 2024: $67.2 billion
• 2023: $64.9 billion
• 2022: $59.3 billion
• 2021: $50.2 billion
• 2020: $47.6 billion

“In a complex global environment over the past year, Deloitte successfully sustained a growth trajectory while investing heavily in the next generation of capabilities aligned to emerging areas of client demand,” says Joe Ucuzoglu, Deloitte Global CEO. “Our unrivaled breadth of capabilities spanning advanced technologies, sector depth, and expertise in critical business functions, positions Deloitte uniquely to help clients, markets, and society at large maximize the value of tech-driven transformation.”

Scrolling through the press release to figure out what information needs to be passed along to dear reader we got the idea to plug this thing into a word counter. Supposedly it’s “only” 2,718 words. Feels like five times that.

Growth — or shrink — by service line (in local currency):

• Tax & Legal: 8.7%
• Audit and Assurance: 4.1%
• Risk Advisory: 3.2%
• Consulting: 1.9% (ouch)
• Financial Advisory: -3.8% (double ouch)

There’s nothing else of value in this press release unless you enjoy the text version of those obscure videos of some guy trying to get his mouth around his own junk.

PwC or EY should be next to report revenue results, we’re going to guess it’s PwC since they just kicked off a round of layoffs.

Deloitte reports FY2024 revenue [Deloitte]

The post Deloitte’s Bringing a Small D to Revenue Season This Year appeared first on Going Concern.

Wrote AP:

China’s Ministry of Finance said in a statement Friday that it was imposing 116 million yuan ($16.35 million) in fines and confiscation of illegal gains on PwC Zhong Tian, also known as PwC China, as well as a six-month business suspension, revocation of PwC’s Guangzhou branch and an administrative warning.

In a separate action, the China Securities Regulatory Commission punished them to the tune of 325 million yuan ($45.8 million). This brings them to a grand total of a little more than $62 million yeeted from their revenue of approximately $1.1 billion (2022 revenue), so a 5.6% hit.

To date, this is the worst punishment a Big 4 firm has received in China. #1 in something yet again, PwC! You go.

In a statement addressing the ban, PwC said they are “disappointed” by PwC’s audit work “which fell unacceptably below the standards we expect of member firms of the PwC network.” They also threw some people under the bus:

PwC China has a long history of high quality audits and we do not believe that the behaviour of a very small number of engagement team members is representative of the work of the vast majority of PwC China’s 18,000 professionals.

“The work performed by PwC Zhong Tian’s Hengda audit team fell well below our high expectations and was completely unacceptable,” said PwC Global Chair Mohamed Kande. “It is not representative of what we stand for as a network and there is no room for this at PwC. That is why, following a thorough investigation, we ensured that actions were taken to hold those responsible to account and a comprehensive remediation programme will build a stronger PwC China firm for the future. China remains an important part of the PwC network and I remain confident in the China firm’s partners and staff as we work together to rebuild trust with stakeholders.”

PwC China and its Governance Board, with support from the PwC network, took a few accountability and remedial actions to address this matter. They:

• Terminated the employment of 6 partners and exited 5 staff directly involved in the Hengda audit work [Ed. note: Hengda is the principal subsidiary of China Evergrande Group, a listed company in Hong Kong.]
• Have taken accountability actions and commenced the process of issuing financial penalties for current and former firm leadership who were responsible for the business.

Daniel Li agreed to step down as PwC China’s Territory Senior Partner (TSP) given his former responsibilities as PwC China’s Head of Assurance. He will continue to support the business in his role as Chief Accountant of PwC Zhong Tian. Hemione Hudson, PwC’s Global Risk & Regulatory Leader, has been appointed to serve as the interim TSP and will relocate once the steps required to effect her transfer to PwC China have been completed.

Kevin Wang, Head of Assurance, will have an elevated role leading the audit and assurance business for PwC China.

When FT reported on the expected ban last month, they said PwC “assured clients that staff will keep working during the suspension and will be able to certify the audit opinions on their 2024 annual reports once the ban is lifted in March.”

The post China Puts PwC in the Punishment Corner For Six Months and Confiscates ‘Illegal Gains’ appeared first on Going Concern.

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“We will start sharing your individual working location data with you on a monthly basis from January as we do with other data such as chargeable hours,” wrote PwC UK Managing Partner Laura Hinton in a memo to PwC’s 26,000 people last week. “This will help to ensure that the new policy is being fairly and consistently applied across our business.” Uh huh. We trust you, Laura.

Reaction to this news has been plentiful across the mediasphere. And not particularly positive:

Is Workplace Trust Dead? A ‘Big Four’ Firm Will Soon Use Location Data to Track Employees [Entrepreneur]

PwC is ‘tipping the balance’ of hybrid working and will start tracking its workers’ locations [Fortune]

PwC tells employees it will use location data to police ‘back-to-office’ rule [CNN]

This one from Inc. is especially interesting: Companies Such as PwC Are Now Tracking Employee Location to Enforce RTO, and It Could Backfire

Writes Chris Morris:

Tracking employee location data is a new way of enforcing RTO policies–and it’s not one without some accuracy risks. The trend of coffee badging has been on the rise this year, where employees scan their badge and go into the office, but only stay long enough to grab a cup of coffee and maybe attend one meeting before leaving early.

…

There’s also the very real potential problem of employees resenting being tracked so closely–and so clinically. (Some 28 percent of employees said they would “consider quitting if RTO policies occurred at their company,” according to the report from human resources software company BambooHR.) That could give an advantage to small businesses and startups that offer employees more flexibility, particularly when it comes to hiring. 

Chris, we’re going to have to tell you something. PwC wants people to quit. The King’s PwC tried to get as many as 600 people to quit so they wouldn’t have to lay them off late last year and as recently as June it told a group of “voluntarily separated” individuals they should fib in their farewell emails to colleagues to make it sound like it was fully their decision to leave this wonderful firm at which they’ve learned so much and met so many great people.

PwC UK, like Big 4 firms closer to home, is being hit with a trifecta of issues: Overhiring a few years ago when everyone started panicking about shortages, a significant decrease in demand for certain advisory services, and higher-than-expected attrition. That last one is important. The business model has a certain amount of turnover baked in and when not enough people leave, it’s either layoffs (or, in PwC’s case, “voluntary separations” which are just layoffs with a better severance package and without icky headlines about layoffs) or you make people hate their job so much they leave. It is quite clear to us PwC is engaged in the latter. The firm not only couldn’t care less if people leave due to this policy change, they want them to leave.

Anyway, Kate Andrews at The Telegraph covered this issue as well and went so far to say PwC is desperate. In ‘The full costs of telling people to work from home are only now becoming clear’ she writes:

“We’re in a war for talent, because we’re busy,” Kevin Ellis, the then-UK chairman of the “big four” accounting firm, told The Times in the summer 2021. Rather than penalise employees for working from home, PwC would try to avoid the threat of pay cuts other companies were making. “A lot of other businesses with the same skills that we need are busy,” he told the newspaper. “I think that’s not something to consider at this stage.”

That stage in the process has come and gone. Three years later, PwC is not only mandating its staff spend more hours in the office and face-to-face with clients, it plans to keep track of them too.

Even the greatest advocates of office working might find this a bit much. It’s one thing to issue instructions to your workbase. It’s a much bigger, rather Orwellian step to physically track them, seemingly to make sure they’re following orders.

From some angles, this might look like a power move from the firm. But it appears, to me anyway, to be an act of desperation. 

She goes on to describe a breakdown of trust, implying that PwC sucks at managing a hybrid workforce (probably at least a little true) and this is how they’re going to manage it.

It seems highly unlikely that PwC’s new policy is going to improve trust and goodwill between the company and its employees, which raises the question – why go ahead with this policy? When PwC took the light-touch approach three years ago, it made a record-breaking profit of £1.2bn, achieved with the vast majority of its staff working from home. Yet last autumn it was reported that PwC’s growth was lagging behind its competitors in the previous financial year.

PwC revenues are due any day now and it’s unclear if partners will once again be taking a hit but we’re going to assume yes given recent decisions, keeping in mind that slower growth is considered a hit. The firm’s 1,000 or so partners took home £906,000 ($1.2 million USD) last year, down from £1 million ($1.3 million) in 2022. In 2019, that number was £765,000 ($999,608). Partners are like vicious dogs with miswired brains, once they taste flesh — in this case, million dollar years — they will crave it. They will do whatever they have to do to get it.

Things have changed since 2021. A lot. Business is slow, people aren’t leaving, and there’s a lot of dead weight sitting on the payroll. RTO mandates are intended to make people quit, RTO mandates with a side of Orwellian tracking will get the job done faster and more effectively.

All without the icky layoff headlines. PwC may or may not be desperate but it’s not for the reason she thinks.

Further reading:

• Survey Confirms What We Already Knew: RTO Mandates Were Intended to Get People to Quit
• Comp Season PSA: If You’re Disappointed, It Might Be Because They Want You to Quit

The post PwC Isn’t Used to Being Called Desperate But Here We Are appeared first on Going Concern.

Rumors have been swirling for weeks like so many unflushable logs that KPMG was about to announce unlimited PTO, something their competitors at EY did four years ago.

As seen on r/KPMG:

You all were right. They just announced unlimited PTO
byu/Active_Ease_2367 inKPMG

EY’s switch to unlimited PTO was immediately shat upon, and rightfully so, after a leaked senior management email made the rounds. The email mentioned a cost savings of $36 million per year “associated with paying unused vacation at termination” as a primary motivator for the change. “Eliminates entitlement mentality and need for for carryover of unused time or sense of ‘loss’ by our people,” the email said.

It appears at first glance KPMG didn’t want to make the same mistake (though they’ll still be saving money on vacation that no longer accrues, to be clear). This is what KPMG said in their announcement, according to a commenter:

All PTO balances remaining at the end of FY24 (after the annual carryover limit is applied, where applicable) will remain with you and will be paid out to you when you leave the firm, based on your pay rate when you leave.

Elsewhere in the Paid Time Off Policy it says:

Regular Exempt Employees who have accrued, unused vacation as of September 30, 2024, under the firm’s previous Personal Time Off Program shall have all unused accrued vacation as of that date “frozen” (after the annual carryover limit is applied) and paid out at the time of separation, or paid out or used at such other time and circumstances as the firm determines in its sole discretion, at the employee’s then pay rate.

Wonder how many lawyers it took to write that.

Related read: The smoke and mirrors of unlimited paid time off

The post KPMG Gets Aboard the Unlimited PTO Train appeared first on Going Concern.

“Face-to-face working is hugely important to a people business like ours, and the new policy tips the balance of our working week into being located alongside clients and colleagues,” said PwC UK managing partner Laura Hinton in a statement to Bberg.

Anyone at PwC UK who’s angrily polishing up their resume this afternoon after receiving this news should read this: Survey Confirms What We Already Knew: RTO Mandates Were Intended to Get People to Quit.

In July, Financial Times broke the news that raises and bonuses were stingy at the King’s PwC this year, too. At least for some teams/service lines. They also axed the popular half-day summer Fridays, actions that when considered in the aggregate would compel a reasonable person to assume they really do hate you and want you to leave. See also: Comp Season PSA: If You’re Disappointed, It Might Be Because They Want You to Quit

Attrition must still be too high. Much like PIP distribution. Almost as if all these things are connected…

PwC UK, perhaps more so than other Big 4 firms or maybe it only appears that way because they keep getting stories about it in the news, is highly motivated to maintain an appearance of business as usual despite challenging market conditions. When they did a round of voluntary separations in June, the firm told staff to fib about their departure even though people talk and news of silent layoffs had been hanging in the air for weeks by the time people started abruptly disappearing.

Getting a bunch of people to leave because they don’t want to be in the office for at least 60% of the week is far cleaner than having to quietly usher another batch of people out of the back door before anyone notices.

Update: Financial Times followed up on this RTO news with a bit more info: the firm let everyone know they’ll be tracking them like cattle to ensure compliance with the new policy and that location data will be sent to staff career coaches.

In a memo sent to staff on Thursday, seen by the Financial Times, managing partner Laura Hinton said that the firm would begin sending staff their working location data every month, adding that employees must now spend “a minimum of three days a week” in the office or at client sites.

“We will start sharing your individual working location data with you on a monthly basis from January as we do with other data such as chargeable hours,” Hinton wrote in the memo. “This will help to ensure that the new policy is being fairly and consistently applied across our business.”

This applies to 26,000 people working at PwC UK.

Big Four Accounting Firm PwC UK Orders Staff Back to the Office [Bloomberg]

The post PwC UK Orders the Troops Back to the Office For Three or More Days a Week (UPDATE) appeared first on Going Concern.

On Saturday, Financial Times reported that due to a “market slowdown,” EY UK has gotten rid of a small number of partners and given out annual salary increases of 2.2% to its 4,400-person tax advisory business. It was six percent in 2023 and 10 percent in 2022. FT said bonuses would be smaller as well (£500 for junior staff — that’s $655 USD — to £4,000 for directors) and explained the math thusly:

Bonuses for EY employees are calculated using a “variable performance share price” system where each employee has a specified number of “shares” according to their rank, people familiar with the matter said. The number of shares is multiplied by the value of one share — a figure set by management each year — to determine what bonuses are paid out.

High performers would, as always, receive more though no number was given. EY brazenly told FT that its tax practice “continues to grow” and said that raises and bonuses “vary based on individual and business unit performance.”

FT said tax advisory usually does OK during market turbulence, or at least shouldn’t be suffering as hard as deals and consulting in this market.

The firm gave the same spiel about difficult market conditions last year, saying that due to rising costs and a difficult economic outlook, just about everyone would get a smaller bonus as it cut the raise and bonus pool by about 30%. The firm wouldn’t tell FT what raises and bonuses were for other service lines this year, hopefully some birdies with big flapping mouths are in reporters’ inboxes right now spilling those specifics.

After peaking at 11.1% in October 2022, consumer price inflation in the UK was down to 2% in the 12 months to June 2024 with services inflation at 5.7%. Taylor Swift was partially blamed for the higher-than-expected 2% increase (we’re not joking). Core CPI was at 3.5% as of June, officially making these raises a pay cut assuming EY UKers use energy and pay rent.

EY UK partner pay took a hit last year, dipping from £803,000 ($1.1 million USD) in 2022 to £761,000 ($997k USD) for the year ended June 30, 2023.

We’ve seen similar disappointment here on our side of the pond with some EYers reporting NO raise or bonus this compensation season. Y’all, they want you to quit. How many times do we have to say this.

EY cuts pay rises and bonuses for UK tax staff after slower year [FT]

The post The King’s EY Gives Out Pay Cuts For Raises appeared first on Going Concern.

The someone added:

Just remember that Deloitte employees are never “let go” from their jobs, they are rightsized to align with the firm’s strategic objectives in light of economic uncertainty and sector level trends

Well, apparently a lot of people in audit are being rightsized this week.

Exhibit A: Plot twist, I’m ALSO being laid off.

After getting no real work done today, completely consumed by today’s events i.e. everyone around me being laid off… I also received my business update email to the shock, not only of myself, but of my team. I know you’ll all be in the comments asking, so let’s get that out of the way, I’m an audit senior, west region.

So my staff and I were laid off, it honestly feels like a mistake. There will be no one left on my team except for my manager and above, I feel a little sorry for them too. We had deadlines coming up.

I know the people around the office will try and make sense of this all, “they must’ve been a low performer” or “they must’ve missed too many time sheets.” Etc…

For the record, I was rated strongly agree on my last snapshot for both metrics. I was explicitly told this. I had made strong relationships with my team and the client. I was leading the engagement. I was doing well and my managers made that known. I hadn’t missed a time sheet this year, although I think I missed 2 last year so maybe that’s what did me in lol. Maybe it was some compliance thing that I missed last year? Who knows? They’ll chalk it up to market conditions. And no, I don’t have my cpa, even people with cpa were being laid off today/tomorrow.

TLDR: I received the “business update meeting” invite and spoiler the update is that I no longer work here anymore.

Another: Got laid off. It’s not performance related. It’s related to low business. I kind of already knew but it still stings

We don’t have much info other than a few Reddit posts, will see what more we can dig up and let you know. We don’t anticipate Deloitte will be making a public announcement but perhaps with enough stink they’ll feel forced to (spoiler: they won’t). It sounds like the numbers will be significant when all’s said and done. Wasn’t AI supposed to prevent a bloodbath like this?

Let us know if you were affected by this round of cuts and/or have more info by text or email.

The post Layoff Watch ’24: Deloitte’s Busy Scaring People with Business Update Meetings appeared first on Going Concern.

Perhaps our own regulators could learn a thing or two from China about handing down punishments to audit firms. If you want it to hurt, hit ’em where it counts: their pockets.

For months now, PwC China has been dealing with the fallout of former client and currently bankrupt property developer Evergrande inflating revenues and then defaulting on its debts. Early this year a damning letter titled “Who brought PwC into the fire pit of Evergrande?” purportedly signed by anonymous partners began circulating around Chinese social media. The salacious note accused PwC of turning a blind eye to Evergrande fraud for a decade. PwC Hong Kong soon after put out a statement to say “the letter contains inaccurate statements and false allegations concerning PwC and certain of our partners.”

“The inaccurate statements and false allegations could tarnish PwC’s reputation and infringe our legal rights,” added that statement.

Yeah, it’s a little worse than a hit to reputation. Though the Hong Kong audit regulator did say in July it found no evidence to support the letter’s claims.

As a direct result of the Evergrande situation, PwC began to bleed clients. And because they were losing clients, they needed to lose some staff. With a headcount of 781 partners and almost 19,000 employees in mainland China, the firm was looking at laying off half of its financial services audit staff and as much as 20% of staff elsewhere in the firm including non-audit service lines.

And now FT is reporting that PwC China has begun warning clients that the firm expects to catch a six-month ban as part of its suite of punishments for what happened with Evergrande. This is double the three-month ban Deloitte Beijing caught for sloppy auditing of China Huarong Asset Management Co Ltd in 2023.

Said FT:

The action against PwC comes after China’s securities regulator in March said Evergrande had inflated its mainland revenues by almost $80bn in the two years before the developer defaulted on its debts in 2021, despite PwC’s China unit giving the accounts a clean bill of health.

The business ban, potentially accompanied by a large fine, would be the toughest ever action by Chinese regulators against a Big Four firm. It comes as Beijing steps up scrutiny over the role played by auditors in financial scandals, in this case in the crisis-hit property sector, which once contributed around a quarter of the country’s gross domestic product.

Clients were told PwC will be unable to sign off on financial statements during this ban but the firm “assured clients that staff will keep working during the suspension and will be able to certify the audit opinions on their 2024 annual reports once the ban is lifted in March,” FT wrote. Of course they will keep working.

PwC braced for 6-month ban in China over Evergrande audit [Financial Times]

The post China’s About to Dropkick PwC Right in the Wallet appeared first on Going Concern.

The Best Places to Work for Disability Inclusion list belongs to Disability:IN, a nonprofit “committed to empowering business to achieve disability inclusion and equality.”

The Disability Equality Index covers Culture & Leadership, Enterprise-Wide Access, Employment Practices, Community Engagement, Supplier Diversity and Responsible Procurement (unweighted). They explain it more in the FAQ:

To make it on the list, an employer needs to score 80 or above on the self-submitted assessment that asks about things like diversity policies, accommodations for people with disabilities, and if anyone in leadership has made a public statement in support of people with disabilities in the last year such as a speech or being quoted in an article. Disability:IN corporate partners do not have to pay to submit for the list — all firms listed below are corporate partners, Forvis and Wipfli are too but either didn’t make the list or chose not to submit — and the fee for non-partners is $900 for the US alone or $2,300 if they want to submit for all eight countries in which D:IN has an index.

All accounting firms on the 2024 list scored 100 with the exception of Crowe at 90:

• Crowe (90)
• Deloitte (100)
• EY (100)
• Grant Thornton (100)
• KPMG (100)
• PwC (100)
• RSM (100)
• Withum (100)

The group notes that “a score of 100 on the Disability Equality Index does not indicate or imply perfection.”

God bless whoever had to fill this questionnaire out because boy, it’s a lot. Here’s the Excel sheet if you want to check it out.

The post These Firms Scored High in Disability Friendliness appeared first on Going Concern.

Because she doesn’t start until October, her KPMG profile is still live:

Helluva resume there. Harvard Law School, working for President Biden back when he was just Senator Biden, US Department of Housing and Urban Development, Special Assistant to Obama for Justice and Regulatory Policy at the White House…and KPMG.

Vanguard couldn’t be more excited. “Tonya is an accomplished lawyer and trusted business leader who brings extensive experience in the public and private sectors,” said Vanguard Chief Executive Officer Salim Ramji. “She has spent her career championing access and transparency for individuals across a range of issues and amid increasingly complex legal and regulatory landscapes. We are pleased to add her counsel, business acumen, and policy expertise to further our mission of giving individual investors the best chance for investment success.”

For her part, Tonya is “thrilled” herself. “I’m thrilled to join Vanguard, a firm with a rich history of helping everyday investors get a fair shake,” she said. “For nearly 50 years, Vanguard has helped families save for their education and retire better with a strong ethos of integrity and commitment to client success. I welcome the chance to work with Vanguard’s talented and purpose-driven management and legal teams to help propel the next 50 years of the firm’s impact on helping investors reach their goals.”

Vanguard Announces Tonya T. Robinson as General Counsel [Vanguard]

The post Vanguard Poaches Someone From KPMG and Issues a Press Release appeared first on Going Concern.

Partners at KPMG Saudi Levant and KPMG Lower Gulf have voted overwhelmingly in favor of a proposed integration of their businesses. The integration will result in the establishment of a new limited liability partnership and, once implemented and necessary regulatory approvals obtained, will see a collective KPMG business comprising over 5,000 employees operating across Saudi Arabia, Jordan, Lebanon, Iraq, the United Arab Emirates and Oman.

OK, whatever. But then there’s this bit:

The proposed integration is consistent with KPMG’s Global Collective Strategy, which includes the clustering of member firms across the network. Greater integration brings a number of benefits to clients, people and the communities in which KPMG operates. Importantly, it underpins KPMG’s commitment to greater consistency and quality albeit continuing to service clients through separate legal entities that have operated in the respective markets.

In May, KPMG UK and KPMG Switzerland announced they were hooking up to form a $4.4 billion firm. So that’s two KPMG hookups in twice as many months.

To rehash what KPMG UK CEO Jon Holt said at the time of the UK/Swiss nuptials: “This marks a historic moment for both firms. We will be stronger as one combined firm and together we will have the scale to significantly enhance our ability to deliver great outcomes for our clients both internationally and within our domestic markets. Merging brings huge benefits for our clients, our people, and our partnership and means we can now grow faster, be more profitable and invest together to create new services in a sustainable way.”

Financial Times had spilled the beans about the UK/Switzerland mashup some months before it was voted on and “overwhelmingly” endorsed by the two firms’ partners. In their December 2023 piece, they said KPMG executives were hoping to “boost growth and profits at the smallest of accounting’s Big Four.”

And Jon Holt said in a statement to FT: “Bringing together our two firms would give us more collective power to invest, build new services for our clients and provide our people with significant global career opportunities. Together, we would grow faster, be more profitable and do so in a sustainable way.”

Is this KPMG’s big picture global plan?

The post Another KPMG is Merging With KPMG appeared first on Going Concern.

EY Australia reported (unaudited) revenue of $2.81 billion ($1.86 billion USD) in FY24, down from $2.97 billion ($1.97 billion freedom bux) in FY23. For the mathletes counting along at home, that’s a 5.5% hit.

It was, said EY, “a year marked by challenging market in slowing economy.” And also that whole thing with PwC blowing up the consulting business over there because they wanted to double dip but let’s not give that dead horse yet another punch.

Unfortunately we can’t compare service line performance from FY23 to FY24 because the firm reorganized the business. Some parts of the risk business moved from consulting to assurance and parts of people advisory moved to consulting. All EY said in the press release is that the assurance business “saw strong growth” and tax “experienced another solid year.” And provided these numbers:

Revenue for the firm’s Assurance service line reached $0.71b, while Tax delivered $0.61b. Despite Consulting trending downwards, its revenue was $1.04b in FY24. Its Strategy and Transactions service line delivered $0.45b.

On hiring and partner promotions in FY24 EY said:

In the last fiscal year, EY Australia appointed 53 new partners, including 31 promotions to partner and 22 new partners hired. The firm also appointed 20 associate partners (including 12 promotions and 8 hires) and hired 658 graduates. Of newly promoted partners and associated partners, 32 per cent and 50 per cent are women, respectively.

“Notwithstanding the very tough market conditions, and a heightened focus on professional services more broadly, we’re extremely proud of what we’ve accomplished and thank everyone for their contribution,” said EY Regional Managing Partner and CEO Oceania David Larocca.

He also mentioned last year’s scathing culture report that was prompted by an auditor being found dead at the Sydney office in 2022. “A year on from the release of the EB&Co. report, we’ve made strong progress addressing the recommendations we accepted. We will continue to be transparent about how we’re progressing in our annual Value Realised Scorecard,” he said. “We acknowledge, however, that transformative culture change isn’t delivered overnight – nor will it ever be ‘job done.’ It remains a long-term, continuous investment to ensure we build upon a diverse, respectful workplace where our people feel they can belong, perform and thrive.”

Just a few months ago, down under EY’s culture was in the news again. More on that below:

Now we really can’t wait to see those global numbers!

EY Australia announces 2.81 billion in revenue, down 5.5% from previous year [EY]

The post Revenue is Down More Than 5 Percent at EY Australia appeared first on Going Concern.

So in 2025, PwC is paying summer interns $30.75 – $40.75. The winter intern posts we found don’t have a pay range listed.

Here’s the YouTube video they linked if anyone would like to spend three minutes and 36 seconds getting elevator pitched on this internship.

On the topic of working in audit at PwC, we have a much better video coming up that we’re almost done editing. The original is a relic that will make you pine for Pizzarias and Surge.

The post This is What PwC is Paying Its Audit Interns in 2025 appeared first on Going Concern.

The FRC explains the rule EY broke:

The Revised Ethical Standard 2019, which reflects the requirements of UK law, imposes restrictions on the amount of non-audit services that an audit firm may provide to a Public Interest Entity. The cap on non-audit work is 70% of the average of the fees paid to the audit firm over the previous three consecutive years. The cap applies at both Network level (i.e. members of the global EY network) and at Firm level (EY UK). EY UK tested the fee ratio at Network level but not at Firm level, and so accepted and carried out non-audit work in breach of the 70% fee cap. This breach was not intentional or dishonest.

EY was the auditor of record for Evraz from the time it was listed on the UK stock exchange in 2011 until late 2022 when the UK government imposed sanctions on Russia due to their invasion of Ukraine.

As for what exactly happened:

In early 2021 EY accepted an engagement by Evraz to carry out non-audit work in connection with a proposed disposal of the Evraz Group’s coal-related interests. These were principally held through a Russian company, PJSC Raspadskaya. It was proposed that this company would demerge from the Evraz Group and that a dividend in kind would be paid as part of the demerger. The proposed disposal was known as Project Gemini.

EY’s non-audit work in connection with Project Gemini related to the provision of working capital reporting, assistance with correspondence with the Financial Conduct Authority (“FCA”), and a comfort letter in connection with the information in the circular that was prepared to support the demerger.

The average of the fees paid to EY UK for its audits of Evraz in the three consecutive financial years prior to it carrying out work on Project Gemini was $400,462. 70% of this figure is $280,323. The total fees for EY UK’s non-audit services on Project Gemini that were subject to the 70% cap amounted to $535,000 and therefore exceeded $280,000 by a significant margin.

For their sins, EY received the following financial and non-financial wrist slaps:

• A financial sanction comprising: i) £121,305 in respect of disgorgement* of profits earned on fees in excess of the fee-cap; and ii) an additional £200,000 component. The additional component has been discounted for admissions and early settlement to £130,000, such that the total financial sanction is £251,305.

*The disgorged sum represents the profits on non-audit work that EY earned from Evraz plc, over and above the fee cap, which it would not have earned had it complied with the Ethical Standard, and which the FRC has now required EY to give up as part of the financial sanction imposed.

Non-financial sanctions as follows:

• A published statement in the form of a reprimand.
• A root-cause analysis report to be prepared and presented to the FRC identifying the reasons for the breach and actions taken since, including in response to the wider issue around EY’s handling of the approval and assessment of non-audit services, identified in the FRC’s 2023 Audit Quality Inspection and Supervision Report.
• Any further remedial action proposed by the FRC to be implemented as necessary.

“The Ethical Standard sets clear limits on the value of non-audit services an auditor can provide. Its aim is to uphold high standards of auditor independence and ensure public confidence in audit,” said Claudia Mortimore, Deputy Executive Counsel at the FRC. “In this instance, EY’s systems and controls failed to ensure compliance with the Ethical Standard which led to the fee-cap being breached. In addition to the financial sanctions announced, EY is required to report to the FRC on the reasons for the breach and to provide assurance that appropriate measures are in place to avoid any future recurrence.”

We’re sure they’re very, very sorry and won’t ever get caught doing do this again.

The post EY UK Gets Hit With a Weakass Fine for an Ethics Conflict appeared first on Going Concern.

Amid GCC boom, Big Four in India are boosting hiring of ‘tech architects’

This should be good.

If you don’t know the GCC acronym, you certainly know the concept. GCCs, or Global Capability Centers, are the offshore warehouses where they stuff all the people who work cheaper than you (the average cost of a full-time equivalent at a GCC was $22,939 including salary and other overhead, we’ll cover that in a moment below). Except GCCs aren’t like the cramped back alley cube farms where scammers named “Patrick” attempt to rip off your grandma, many of the offices look a lot like yours. GCCs could be worth more than $110 billion by 2030.

Last year, Reuters reported that Big 4 accounting firms were going to spread their tentacles out from big cities in India — Mumbai, Delhi and Bengaluru, for example — to so-called “tier-two” cities because the big city operations are starting to cost too much:

The world’s major accounting firms are stepping up investments in new Indian facilities away from bigger cities as global demand for cheaper back office operations grows and smaller towns move up the economic value chain.

…

Business service exports have become a critical part of India’s economy but the sector has been hit by a slowdown in global demand for software and challenges in big urban centres such as rising costs, high attrition and slow progress in getting workers to return to the office after the pandemic.

Said EY in its Future of GCCs in India – a vision 2030 report published June 2023 [PDF]:

In India, the focus cities for GCC set-ups continue to remain Bengaluru, Hyderabad, Chennai, Mumbai, Pune and Delhi NCR. However, tier-II cities such as , Jaipur, Vadodara, Kochi, Chandigarh are becoming popular for new set-ups owing to its improving infrastructure, favorable state policies, and lower real estate and talent costs. The total number of new GCC set-ups every year can jump up to 115 by the year 2030.

In that report, EY said the cost per full-time equivalent at the approximately 1,600 GCCs currently in operation in India has increased by 27% from 2019 to 2023. That figure is expected to increase by 30% from 2023 to 2030. 85% of that is salary, the rest is travel and other overhead. EY estimates the current headcount of 1.9 million at Indian GCCs will surge to 4.5 million by 2030. For the moment, GCCs account for only about one percent of India’s GDP.

But let’s discuss the matter at hand: the latest on Big 4 firms hungry for tech architects in India:

Deloitte India has over 500 such architects and the company says there is a growing demand for them across the consultancy’s clients.

“With the overall demand for architects across our clients growing at 20-25 per cent, Deloitte India has robust hiring plans in place to meet these growing demands,” said Deepti Sagar, chief people and experience officer at Deloitte India.

Purushothaman KG, partner and head – Technology Transformation & Telecom, KPMG in India said that they have also increased the hiring of these architects. “Our hiring strategy has been domain specific and platform specific,” he said.

Ranjan Biswas, EY India leader for Technology, Media and Entertainment, Telecom (TMT) and South region, said, “Our proposition for GCCs is a strong combination of business consultants and technology architects who work together to solve their business problems and, in many cases, lead their end-to-end transformation needs.”

EY India’s team servicing GCCs, including tech architects, has grown almost three times to about 11,000 people in 2023-24 from 4,200 in 2020-21.

The EY report mentioned in this article is embedded below for anyone who would like to read it.

Amid GCC boom, Big Four in India are boosting hiring of ‘tech architects’ [Business Standard (India)]

The post Big 4 Firms Have Specific Hiring Plans in India appeared first on Going Concern.

Exhibit A:

Exhibit B:

While one might feel compelled to handwave these posts as a skill issue specific to the people who posted them (that certainly could be the case), the FY25 EY compensation thread is enlightening to say the least. Some highlighted comments from the consulting side, where the majority are reporting single-digit salary increases:

• M1->M2 with a 2.4% salary increase, 0.88% bonus: “Balls in my throat”
• A2 (no promotion) with a 2.13% salary increase, $1000 (1.04%) bonus: “”
• M3->M4 with a 0% salary increase, 2.93% bonus: “Rethinking life choices”

On the assurance side, you have majority double-digit salary increases, plenty of promotions, and zero crying emojis.

This S3 in consulting with a 0% salary increase and a 0.74% bonus gets it: “They want us to quit.”

Craig here gets it too:

This is a back door to way to reducing headcount without firing people. If you aren't getting a raise and have met all production goals, then they are indirectly telling you "you're fired".

— Craig Hausz, CPA (@CPATaxTeam) August 5, 2024

Repeat after me: They want you to quit.

They want you to quit.

They want you to quit.

Headlines about mass layoffs are ugly and make clients skittish. Why do that when they can just discourage people right out the door? It seems pretty obvious that’s what’s happening here.

To be clear, they’re doing layoffs too. Guess that attrition is still way too low.

For fiscal 2023, EY US reported 12 percent revenue growth from FY22 for total revenue of $21.5 billion. No specifics yet on just how bad the year ending June 30, 2024 ended up being.

The post Comp Season PSA: If You’re Disappointed, It Might Be Because They Want You to Quit appeared first on Going Concern.

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According to Insta, LinkedIn, etc. 27-year-old Rijken is an M&A advisor. And he’s still working, just a normal amount like 40 hours a week.

Underrated MAG thing is Frank Rijken from NED who was at AA finals today also has a full time finance? job at PwC in the Netherlands. That’s crazy.

— con (@conmccool) July 31, 2024

Supposedly there’s video of him talking about working full-time while training but we couldn’t find it. If anyone has it, let us know.

When big 4 M&A just isnt enough.
byu/OrdinaryPhilosophy32 inBig4

How do you say “Good luck, Frank!” in Dutch?

The post PwC Associate Becomes an Olympian to Avoid Working 60-Hour Weeks appeared first on Going Concern.

“These artificial intelligence capabilities enhance our overall transformation to deliver a better audit experience for our people and the companies we audit,” he added. “Our AI capabilities will further strengthen our engagement teams to more effectively engage Audit committees and management committees.”

And now, the press release talking points:

KPMG Clara with AI is connected to our broader transformation efforts to enhance audit quality through our Trusted AI framework. For example, new generative AI capabilities will help teams:

• Refine risk assessments: AI assistants can review documents to help engagement teams identify risk factors. For instance, within KPMG Clara, engagement teams can leverage AI to help review meeting minutes and flag possible accounting and fraud risks.
• Develop substantive testing procedures: Our AI assistant has direct access to our audit methodology, enabling auditors to design appropriate substantive testing procedures to respond to risks quicker.
• Enhance audit documentation: By working with our AI assistant, team members can quickly summarize, question and consider improvements to engagement-specific audit documentation within KPMG Clara.

And:

KPMG today also unveiled AI and generative AI capabilities that will be deployed in the workflow in the coming months. These include:

• A growing prompt library that will, over time, include AI-powered agents to assist Audit teams in driving audit quality;
• Automated quality scoring to generate AI assessments and deliver feedback to Audit teams on actions for quality improvement;
• Use of AI and machine-learning to automate the review of financial statements, augmenting engagement teams’ assessment that all required disclosures have been made to the capital markets; and
• Assurance capabilities integrated into the workflow for teams delivering assurance over disclosures, such as emissions disclosures. 

“All of our auditors are trained on how to effectively use AI with a human-in-the-loop mindset to maintain quality, accuracy and professional skepticism,” said Thomas Mackenzie, KPMG U.S. and Global Audit Chief Technology Officer.

We trust this development will help KPMG push its deficiency rate below 25% for the first time since 2011.

KPMG Announces AI Integration into Global Smart Audit Platform, KPMG Clara [KPMG

The post Maybe AI Will Help KPMG Finally Get Gud at Auditing appeared first on Going Concern.

In a lawsuit filed on July 22, former PwC principal, FinTech magazine top woman in fintech, and 55-year-old Asian-American Nina Owens alleges that she was ousted from the firm one day before her five-year anniversary “that would have afforded her greater job protection and full vesting of her 401(k) account.” This despite exceeding revenue targets and high praise from clients, she claims.

Why is her Asian-ness relevant to the story? We’ll let the lawsuit tell it.

As a 55-year-old Asian-American woman, Owens did not get the support and recognition that PWC gave to partners and principals who were men, white, and/or younger. PWC’s age bias is so open, that it has mandatory retirement for partners and principals at age 60.

PWC has gotten away with this blatant age bias by taking the position that its thousands of partners and principals are not in fact employees entitled to the protections of the civil rights laws and (at least until some recent changes in federal law) by forcing them into secret arbitrations.

PwC is no stranger to age-based lawsuits. A recent class action settlement required PwC to pay $11,625,000 after an older CPA was denied employment at the firm.

Now let’s get to the (alleged) hater-ass white guys:

PWC brought Owens in as a principal in 2019 to build out a digital transformation focused on payments, a business area that had languished for the past several years. Owens was soon disappointed. Her first manager, a white man, did not provide her with any
support or integration into the firm, prohibited her from pursuing new business opportunities outside of consumer credit cards, and took away leads that Owens generated and provided them to male partners and directors. Another white, male partner stole credit for revenue from Owens, making her tracked revenue look less positive than it actually was, and blocked her promotion to a senior role leading an account. Another male partner engaged in gender-based abuse to Owens, tried to steal revenue credit from her, and tried to get her removed from her primary account. His conduct was so egregious that Owens filed two complaints and a female Latina Director filed an additional complaint against him with PWC’s internal Ethics & Compliance (“E&C”) department in August/September 2023. Owens repeatedly raised concerns about all this conduct to PWC, but PWC did not take any genuine remedial action. Instead, PWC punished Owens.

Things started looking up in early 2023 but not for long:

In January 2023, Owens got a new manager who removed prior obstacles and allowed her to pursue a new line of business she had been trying to develop for years. Almost immediately, Owens’s revenue began to increase, and after that grew exponentially. Rather than applaud Owens’s success, PWC notified Owens on March 25, 2024, that she was being forced to “withdraw” from the firm no later than June 26, 2024. As of December 31, 2023, six months into PWC’s fiscal year, Owens had already exceeded her annual revenue target. As of June 26, 2024, Owens’s revenues were approximately 122% of her target, even accounting for the fact that PWC pushed Owens to give up to other partners 60% of revenues she sold.

Mentioned in the suit is the partner to whom she reported Jim Russell, payments practice leader and white guy in his 40s. “Russell became increasingly negative in his interactions with Owens, despite her success in her first year,” says the suit. “He also began to make public comments about her age. For example, during a team meeting Owens said that Gerson Lehrman Group (“GLG”), a financial services company that provides experts, had asked to interview her. Russell said, in front of the entire team, that “GLG only asks people to serve as experts who are old.”

The alleged hater also limited her opportunities to generate revenue, she says:

Owens was not permitted to solicit clients with whom she had worked at Accenture due to restrictive covenants. Despite this, Russell provided Owens with fewer than five leads in three years. Russell provided leads to young, white, male Directors and to his fellow white, male principals in payments. Russell also did not offer Owens any thought leadership or speaking engagement opportunities, except for one opportunity in December 2021. Russell gave opportunities to participate in conferences to younger, white men.

And another male partner, presumably a non-white one but let’s not assume:

In July 2023, Owens sold three projects with combined revenue in the seven figures to Client A. She agreed to co-deliver with, and split the revenue with, Vishal Rawal, a male partner in the Strategy& group about 15 years younger than her. Although the COO of Client A had asked Owens to scope the work, Rawal changed the EP signature to his name in the final version of the contract in July 2023, which Owens did not know at the time.

In July and August 2023, Owens repeatedly complained to Hoover and Vennetti that Rawal was trying to push her off the account, was allocating more than 50% of the revenue to himself, and was engaging in gender-based harassment toward her. Rawal was abusive and disrespectful toward Owens. For example, he told Owens not to speak on conference calls and said he would do all the speaking; he pulled her into conference rooms to threaten and berate her; he told the male Directors to exclude Owens from meetings and not to follow her directions; he yelled at her in front of Directors; and he sent emails denigrating her, on which he copied junior employees. Owens never saw Rawal treat any men that way.

OH and she claims she was consistently underpaid by 15-40% compared to her male and white partner/principal peers from FY20 to FY22 and for FY24, was paid 30% less that the average PwC partner in the US at her level and 38% less than the average direct admit partner in the US.

Owens asserts the behavior described in the suit constitutes race discrimination and retaliation according to Section 1981 of the Civil Rights Act of 1866, Employee Retirement Income Security Act (ERISA) violations, and violations of New York city and state laws.

In a comment to HR Dive, a PwC spokeswoman said Owens’ claims are “baseless” and that PwC treated her fairly. “The decision to withdraw her from the partnership was based on legitimate business considerations and determined in accordance with PwC’s partnership agreement to which she agreed when she was admitted — which also requires she pursue her claims before a neutral arbitrator. PwC will have these meritless claims moved to arbitration, and then will defeat them,” she said.

Coincidentally, this month marks ten years since PwC introduced arbitration for employee beefs. It also marks ten years since a PwC spokesperson told us the move to arbitration was “a noncontroversial decision” despite us having heard and read quite a bit of griping about it in the time since. And a follow up to that first story we published in March 2014: PwC Issues New Offers to New Hires, Now With Bonus Mandatory Arbitration.

Full suit for your reading pleasure below.

The post Asian-American Ex-PwC Principal Alleges White Guys at the Firm Are Hatin’ Ass Haters appeared first on Going Concern.

CPA Journal has published an intriguing deep dive into Big 4 revenue, specifically how the firms started making more money in advisory than audit or tax in the last 10+ years. You should go read it if this is at all interesting to you but we’re just going to focus on two charts because the Going Concern audience, and its editorial team, have the attention span of squirrels that got into a case of Red Bull.

Covered in the article are several events over this 23-year period that put upward or downward pressure on Big 4 revenue, things like the collapse of Arthur Andersen dumping all those clients on other firms, Sarbanes Oxley, the 2008 financial crisis, and PCAOB paper-pushing.

Writes The CPJ:

Over this period, audit revenue declined while advisory service revenue increased. Overall, the revenues of the Big Four have increased from $28 billion (2000) to $79 billion (2022); this represents a 183% increase over 23 years. The increase in overall revenue was interrupted by a decrease in total revenues from 2004 to 2006, during which time the firms (except for Deloitte) sold off their advisory service practices. The 2008 financial crisis contributed to the leveling off of revenues from 2009 to 2010. Contributions to revenue from advisory services were the lowest (14%) in 2005, while assurance and tax services were 62% and 24%, respectively. This sharply contrasts with 2022, when advisory service revenues were 51%, and assurance and tax service revenues were 27% and 22%, respectively.

And now, Exhibit 2.

Exhibit 2 shows that Big Four advisory service revenues grew from $11 billion (2000) to $40 billion (2022); this represents a 274% increase over 23 years. Revenue from advisory services was temporarily constrained by the enactment of SOX, which prohibited auditors from providing advisory service to assurance clients. In response, the Big Four sold off their advisory service practices one by one, except for Deloitte, which did not do so due to market conditions. Deloitte’s failure to divest may have provided an example of how advisory services may be sold to non-audit clients without violating SOX. Therefore, as the non-compete agreements with their former advisory arms expired, the other three firms began to replicate the success of the Deloitte business model. Advisory service revenue doubled from 2010 to 2015 and has continued to increase rapidly since then, leading to a concern about the impact of advisory services on public accounting firms (Alyssa Schukar, “Big Four Accounting Firms Come Under Regulator’s Scrutiny,” Wall Street Journal, March 15, 2022). Since 2014, total advisory revenues have exceeded total assurance revenues for the Big Four by 50% or more and growing. Deloitte is the clear leader in advisory revenue, followed by PwC, EY, and KPMG.

Here’s a link to that WSJ article should you care to peruse it.

During the period analyzed, cumulative assurance revenues at Big 4 firms doubled — from $11 billion in 2000 to more than $21 billion in 2022 — and tax went from $7 billion in 2000 to $18 billion in 2022, an increase of 168%.

They go on to analyze the individual firms’ revenue by service line, go check it out if you want.

The post Who Wants to See How Much Big 4 Revenue by Service Line Has Changed Since SOX? appeared first on Going Concern.

Law.com has them at #5 in revenue after Kirkland & Ellis, Latham & Watkins, DLA Piper, and Baker McKenzie. A few sources, some of them at least a couple years old, say Dentons does lead the global law syndicate in size by headcount. Still others, many of which appear suspiciously aligned with ChatGPT’s dialect, contradict this claim. Our former sister site Above the Law has a story from 2023 detailing how Dentons became the world’s largest law firm in 2015 and it wasn’t from hiring 6,000 lawyers (Vault calls it “the Pac-Man of law firms“). Anyway, splitting hairs here.

How about that press release:

Dentons, the world’s largest global law firm, today announced that its Global Board of Directors and Global Advisory Committee have elected Kate Barton as the Firm’s next Global CEO. Barton will join Dentons from EY, where she has had a highly distinguished 35-year career in a variety of executive leadership roles, most recently as Global Vice Chair. She will succeed Elliott Portnoy, the founding Global CEO, who has served since the Firm’s launch in 2013.

As one can imagine would happen over a 35-year tenure, Barton held numerous positions since starting out as an intern in 1985. New England Tax Managing Partner, Northeast Sub-Area Tax Managing Partner, New York Office Managing Partner, Americas Vice Chair, Tax, Law and People Advisory Services, Global Vice Chair – Tax, Law and People Advisory Services, and her most recent title of Global Vice Chair.

The handover period begins in September and her first official day is November 10.

Do we want to read the obligatory corpospeak quotes? We do.

“Kate has extensive experience in leading a complex and global professional service organization and has an outstanding skillset in managing people, processes and systems. Her successful client service experience, coupled with her thoughtful approach to integration, make her the ideal individual to lead our Firm,” said Elliott Portnoy, Global CEO. “She has my unqualified support, and I am confident she will lead Dentons from strength to even greater strength and success.”

Reflecting on her appointment, Kate said, “I have watched Dentons redefine the legal services landscape with its pioneering business strategy and client offerings. Under Elliott’s leadership, this Firm has differentiated itself with its polycentric approach and integrated cross-border and multidisciplinary client engagements, proving that uniting and operating as one firm is far more impactful. I am looking forward to working with Elliott on a transition and to collaborating with Dentons’ accomplished regional leadership to continue challenging industry norms and adapting to the ever-changing world of technology and innovation faced by law firms and professional service firms around the world in order to deliver excellence for the benefit of our people and our clients.”

Well that sure was a spectacular corporate meat beating.

The post ‘The World’s Largest Global Law Firm’ Snags a Longtime EY Veteran appeared first on Going Concern.

Now KPMG Australia is nuking its law practice. Fellow Americans reading this are probably like “KPMG has a law practice?” Well, it did. That’s a thing they’re allowed to do over there. It sounds like they finally arrived at the conclusion that’s fucking stupid and they should stick to what they know.

Writes Maxim Shanahan in Australian Financial Review:

The decision will cost dozens of jobs and marks the end of the big four consultancies’ ambitious attempt, launched at the peak of their influence, to take on established major law firms in traditional commercial practice areas.

KPMG Law’s Tax Controversy & Disputes practice will be incorporated into the firm’s tax division, but the big four firm will no longer operate its own distinct commercial law practice.

Ben Travers, head of the firm’s tax and legal division, said KPMG would now “look to further develop alliances with law firms that offer complementary services to ours, rather than invest in our own commercial law businesses”.

Sky News clip for the reading-averse:

The firm believes rolling the Tax Controversy & Disputes people into tax will work out much better than the separate law practice. “We have an ambition to be Australia’s leading firm in tax controversy and disputes,” said Ben Travers to AFR. “We believe focusing on [this area], and extending alliance relationships, will enable clients to better leverage broader capabilities to solve their issues.”

So who or what is next to go at KPMG Australia? Fiscal ’24 revenue is due to come out in August, wouldn’t be surprised if another significant slashing comes immediately after.

KPMG axes legal division, dozens of jobs to go [Australia Financial Review]

Related reading: The Reemergence of the Big Four in Law [Harvard Law School’s The Practice, 2016]

The post KPMG Australia Gives Up on the Idea of Competing With Big Law (or Medium Law, or Small Law) appeared first on Going Concern.

The firm, with 781 partners and nearly 19,000 employees in mainland China as of last September, according to its website, is also mulling laying off about 20% of the staff in other auditing teams and non-auditing business lines, they added.

PwC China’s layoffs started last week, and the overall target is expected to be met over a period of time, said the sources, who declined to be identified as they were not authorised to speak to media.

“In light of changes to the external environment, we are making some adjustments to better optimise our organisational structure to align with market demand,” a PwC spokesperson said in an emailed statement.

Bloomberg reported last week that PwC China began “mass layoffs” due to losing dozens of clients as a direct result of the Evergrande debacle (timeline of that situation here, we don’t need to get into it here). The number they threw out was 100 people from different teams working in Beijing, Shanghai, and others; one person told Bloomberg more than half of one team was laid off.

At that time, a spokesperson gave Bloomberg the same “changes to the external environment blah blah” spiel and added: “These adjustments are a difficult decision. We are actively communicating with our people and will ensure that the plan is in compliance with all relevant labor laws in China.”

It was reported in March that Chinese authorities — a group of people you really don’t want to get on the bad side of — were looking into PwC and questioning some of the people who worked on the Evergrande engagement. “There are serious questions about PwC’s role in the Evergrande fraud, specifically what it knew about the improper revenue recognition,” said Nigel Stevenson, analyst at Hong Kong accounting research firm GMT Research Ltd., to Bloomberg. At that same time, Evergrande founder Hui Ka Yan was fined 47 million yuan ($6.5 million USD) and totally banned from China’s capital markets for the remainder of his miserable days on Earth.

According to a Reuters source, earlier this month the firm asked the 1,000 people working in financial services audit in Shanghai to take 15-day leave in July and August during which time they’d be paid 1/5th of their usual salary.

Exclusive: PwC weighs halving of China financial services audit staff, say sources [Reuters]

Update: Financial Times has followed up with a story published on July 16: PwC loses two-thirds of accounting revenues from clients listed in mainland China

The post Layoff Watch ’24: Things Aren’t Looking Good at PwC China [UPDATED] appeared first on Going Concern.

In guidance sent to affected employees, reviewed by the FT, PwC said: “Should you decide to accept this voluntary offer, it is possible for you to send out a note to a defined group, however this must not refer to the voluntary severance offer or the circumstances of leaving (suggested wording for this note is given below but we recognise that you will naturally want to personalise this).”

“Naturally, it must also not be derogatory to PwC or its employees/partners. It is down to business discretion as to when this message can be sent out and if the business wishes to review messages before they are sent out.”

The guidance continues: “The content of your comms should follow this approach . . . ‘Following recent discussions with my [relationship leader], I have taken the decision to leave PwC. It hasn’t been an easy decision for me to reach but now that I have, I am excited about what the future holds for me and the new opportunities on the horizon. I have really enjoyed my time at PwC and the opportunity to work with such talented colleagues.’”

“PwC asks for silence from departing staff in programme of UK job cuts,” Financial Times, June 7 2024

Well guess the cat’s out of the bag about how bad things are at the King’s PwC because FT just published this:

PwC has warned its 26,000 UK staff that it will pay lower bonuses in some divisions, hand out smaller salary increases and curb a practice of half-day Fridays as the Big Four firm battles “challenging market conditions”.

Ian Elliott, chief people officer, wrote in a memo that “our bonus pool will be similar to last year” but “a number of areas” would see “reductions in average bonus per head”, while some would also see lower pay rises.

NOT HALF-DAY FRIDAYS. You absolute demons. Oh and about the bonus pool last year: Already Underpaid PwC UKers Get Told Bonuses Will Suck This Year

Apparently at least one senior partner thinks reduced summer hours are “disruptive to a client-facing business” and FT says some partners expected the firm’s new leadership — as in PwC UK Senior Partner Marco Amitrano and his new management board who were handed the keys on July 1 — to ditch this perk faster than you can say why are you showing as Away on Teams? “Given market conditions, it’s especially important that we carefully balance [summer working hours] with the needs of our clients, teams and work commitments, which should continue to take priority,” said Mr. Elliott in another memo, according to FT’s reporting. Have you guys figured out yet that they want you to quit? Seems patently obvious at this point.

When PwC UK announced financial results for fiscal ’23 last August, they said they had “strong, stable growth backed by investment in people and technology.” Of their 16% growth in fiscal 2023 (up from 12 percent in 2022) and revenue of £5.8 billion ($7.5 billion USD), then-PwC UK Senior Partner Kevin Ellis said “Considering the sizable investments we’ve made in our people and technology, partner profits beat our forecasts. Our strong performance is due to the adaptability of our business in supporting our clients and is a credit to the talent of our people.” A few months later, they asked 500-600 people to leave voluntarily or they’d be fired. Erm, let go.

Partner pay for 2022 broke records at £1 million, up quite a bit from £868,000 the prior year and a lot up from 2019’s payout of £765,000. Alas, poor PwC UK partners took home a paltry £906,000 ($1.2 million USD) in FY23.

Although the line continues to be “demand for consulting services is way down,” PwC UK consolidated group revenues, which includes PwC UK, Channel Islands and Middle East firms, for consulting alone hit 30 percent growth in FY23, down slightly from FY22’s 33 percent. “This was driven by demand in the Middle East, as clients invest in programs to modernize and diversify the region’s economy beyond oil. Energy diversification and sustainability are also behind many UK transformation projects, as the climate crisis and new reporting requirements galvanize businesses to move towards net zero,” said PwC. The next revenue announcement should appear in the next month or so, who wants to bet they’ve swapped out sustainability for generative AI? You know they will.

There’s a ton more in the FT article, go read it. At least inflation in the UK isn’t burning hot at 11 percent anymore or a 3 percent raise would really be a pay cut. Let’s be real, it still is for anyone who needs to eat food or rent a flat.

The post Bonus Watch ’24: It’s Going to Be a Stingy Summer at the King’s PwC appeared first on Going Concern.

Find something here to criticize, I dare you. Even the track they picked for this quick video tour is a banger.

This link from Architizer has a lot more info thanks to lead architect Dubuisson Architecture submitting tons of pics and tells you exactly what products were used where if you want to replicate the look at home because who wouldn’t. A few highlights:

The journey to the new campus started in 2016 when Deloitte chose this region out of 88 potential locations. A bit more background from the English version of the press release:

The location was selected against a range of sustainability, transportation, and accessibility criteria, as well as its proximity to the French capital. The facility meets high sustainability standards, notably through the use of sustainable materials and renewable
energy, as well as the installation of water and green spaces to promote biodiversity across the site. Built in BaillyRomainvilliers and in Magny-le-hongre, Seine-et-Marne, Deloitte University EMEA stands out as a large-scale and innovative project within an urban and economic hub.

The old DU EMEA joint was in Belgium and, well, sad compared to the new one:

And here I found one of the rejected designs for the new campus. Macfarlane+Associates envisioned “an educative orchard, a growing kitchen, sports pitches and various ecological habitats – meadows, woodland, lake, rain water gardens and swales with trails weaving through the different habitats” and said the circular design “was based on Deloitte University’s ethos of continuous learning and self-improvement, using circular geometries that represent movement, orbiting and reflection.”

Deloitte’s sure come a long way from breaking ground on the first DU in Westlake, Texas 15 years ago. Now we just have to ask…do they eat brisket in France?

The post Deloitte Ups Its Brainwashing Game in Europe and It’s Beautiful appeared first on Going Concern.

It was a given that Carmine, an enthusiastic promoter of the Project Everest plan to split audit and consulting practices, would probably make an exit after the much-hyped plan was shelved last April. What wasn’t known was who would slide in to take his place though Global Managing partner, Brit, and extreme Everest fanboy Andy Baldwin was considered a strong contender. This came as a shock to us as we expected him to shuffle off into the sunset or get shoved under the bus when Everest collapsed but no. Had he secured the role, he would have been the first non-American to lead the global firm.

“Andy is the favorite by a large margin, but things can get weird in a hurry,” said one person in the inside of the race to replace Carmine to Financial Times in August.

“The global executive [committee] has put the firm through the wringer and we need significant, maybe even wholesale, change,” said another to FT. “Andy needs to wear this debacle. He needs to be held accountable for pushing so hard and listening so little.”

“We need to reinstitute the ban on senior management retirement extensions that clog up the pipeline and hinder the development of future leaders,” said still another. 57 years old at the time, Baldwin griped about potential age discrimination were he to be passed up for the role. “Baldwin warned people involved in the selection process that UK discrimination laws bar taking age into consideration without a specific business reason, according to people familiar with the conversation. He was unhappy that age was considered so prominently in the process, they said,” wrote FT in a story about the leadership race published in November. Some people on the global executive committee expressed concern that Baldwin would reach mandatory retirement age of 60 before the end of the four-year CEO term. Plus they had a reason other than age to pass him by: the $500 million hole Everest burned in the global firm’s pocket.

Janet Truncale, meanwhile, is in her early 50s so she can squeeze out at least one term. In “Inside the race to lead EY after bungled break-up plan” (August 2023), FT threw her in toward the bottom as a highly unlikely contender:

Other mooted candidates included two Americans: Janet Truncale, who runs EY’s financial services business in the Americas, and Ryan Burke, who heads the firm’s practice serving private businesses. Truncale is seen as an ally of the global executive committee in its long-simmering tensions with other members of the US leadership, making it unclear if she could win Boland’s support, said several people familiar with the matter.

That’s then-EY US Chair Julie Boland, the person most likely to get thrown under the bus after Everest failed. See: EY Split Update: There’s a Battle Royale Going Down This Week. She was in support of the split as a concept but had concerns about the details and her dad was one of the many retirees holding up the split over concerns their pension payouts could be affected. See: Legal Liabilities and Pensions Are Holding Up the EY Split.

But none of that matters now. It’s a new era for the global EY organization and as of today, they have a new captain at the helm. Just days before her first official day she issued a proclamation that the ghost of Everest is to be exorcised from EY once and for all (sorry, Andy). At the same time, she introduced EY’s new catch phrase: All in.

Today we launched the new EY global strategy – All in – which sets out a bold ambition to create new value for EY clients, people and stakeholders.

All in is not just a business strategy, it captures an attitude and way of working – combining the multi-disciplinary skills of the 400,000 person strong EY workforce to anticipate and navigate a changing world – so that EY clients and EY people can shape the future with confidence.

Predictions for the next four years are welcome in the comments. Best of luck, Janet. And we don’t mean that in the assy “you’re inheriting a pile of hot garbage” way. We would have meant it that way if Baldwin got your spot though.

The post It’s the Dawn of a New Era at EY Today appeared first on Going Concern.

As former cheerleaders of Project Everest make their hasty exits, Carmine Di Sibio’s successor made a strong statement to EY people yesterday that a split of audit and consulting practices is not on the menu. Her comments sound a lot like what was said by Deloitte Global CEO Joe Ucuzoglu about his firm’s superior “multidisciplinary private partnership model” when the Green Dot and P-Dubs were busy rebuking the EY split plan in its early stages. You know, before the whole thing fell apart.

FT has the deets:

EY’s new global chief executive Janet Truncale has ruled out an immediate revival of the Big Four accounting firm’s plan to split in two, unveiling an alternative strategy that involves slimming down its central bureaucracy.

Truncale told the firm’s 400,000 staff in a memo on Thursday seen by the Financial Times that the business would “recommit to working together as one organization” and that her new leadership team planned to simplify the way the firm operated.

“There is huge power in our global scale and connectivity. So looking ahead, we’re going to recommit to working together — with EY clients, our ecosystems, and each other — as one organization,” she wrote.

Oh and there’s gonna be a new strategy in town now that Vision 2020 is four years behind us. Are you ready?

“All in”

Wise choice not to put a year on it.

Here’s what Truncale, whose first official day of work as EY Global Chair and CEO is July 1, said in a press release issued yesterday:

Today we launched the new EY global strategy – All in – which sets out a bold ambition to create new value for EY clients, people and stakeholders.

The world’s organizations face issues that are more complex and inter-connected than ever before. The All in strategy will ensure that EY’s globally integrated, multi-disciplinary network continues to lead through a rapidly evolving AI and technology-driven era.

In the last decade, EY has experienced extraordinary success and market leading growth, doubling in size to achieve US$50b in revenue. The All in strategy is about shaping EY’s next US$50b through purposeful growth – making intentional, future-focused investments in areas where we are uniquely positioned to lead – such as transformation, managed services and sustainability. All alongside an unwavering commitment to audit quality.

We will also build an even stronger organization by creating new ways to collaborate across EY’s vast geographical footprint and continuing to invest in the market-leading sector capabilities organizations need to address their most pressing issues, augmented by the accelerated adoption of AI.

All in is not just a business strategy, it captures an attitude and way of working – combining the multi-disciplinary skills of the 400,000 person strong EY workforce to anticipate and navigate a changing world – so that EY clients and EY people can shape the future with confidence.

How do we feel about that? A little plain, no? And lacking in the punniness of PwC’s New Equation.

New EY chief rules out reviving plan to split Big Four firm in two [Financial Times]

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Q: You’ve been driving AI transformation at EY, and you have been watching it reshape the broader world of tax services. How is it changing your industry?

A: I’m seeing whole companies shift to an “AI first” mindset. People are using AI as a digital assistant that sits alongside the other productivity tools they use every day. Tax and finance professionals are automating routine tasks, which frees up critical time for more strategic activities. AI is also helping with those strategic activities by summarizing information, identifying anomalies, and highlighting key themes. We’re already seeing up to 14 hours a week in time saved from these basic productivity gains.

In response to a different question she adds:

EY research shows that the typical tax team spends somewhere between 40 and 70 percent of their time gathering and manipulating data. Tax teams also face increasing levels of complexity around regulation and real-time reporting, downward pressure on budgets, and increased costs of keeping the technologies they use updated. They’re responsible for about the same number of decisions and actions today as they were 12 years ago, but they need to base those on 50 times the amount of data. Then there’s the ongoing headache of the growing skills gap.

AI is already helping to solve many of these challenges. The ability to process vast amounts of data more quickly and more accurately is a game changer for tax return compliance and reconciliation. Our ability to analyze and interpret regulations combined with predictive insights from AI will also help us move to real-time forecasting and make strategic planning decisions based on greater insight into future tax implications.

Earlier this week, EY announced via press release they will “transform” the global sales operation by “equipping the workforce with Microsoft client management tools and AI capabilities.” This, they said, will position the EY organization as one of Microsoft’s largest customers worldwide when the Microsoft Dynamics 365 Sales implementation reaches at least 100,000 EY professionals across 700 offices and 150 countries by January 2025.

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Only 43% of workers say their organizations have left them better off than when they started.

Well-being isn’t doing so well either. Not for workers and not for their managers and leaders:

For the third year in a row, some people reported that they’re still struggling with their well-being. Just 56% of workers feel their overall well-being is “excellent” or “good.” In fact, workforce well-being remains relatively unchanged since we first began surveying workers in 2022, suggesting that most organizations may not have figured out a way to move the needle on this yet.

Leaders aren’t immune to well-being challenges either. At least four out of 10 workers, managers, and executives say they “always” or “often” feel exhausted or stressed. The situation is so bad that 59% of workers, 66% of managers, and 71% of the C-suite say they’d seriously consider taking a job with another company that would support their well-being.

The theme of the survey is “human sustainability” but what even does that mean? It’s a fancy phrase for not treating people like shit. Explains Deloitte:

Leaders may wonder whether a focus on human sustainability is what’s best for their business. Facing growing stakeholder pressures, dwindling worker health, and other workforce-related risks, our survey found that shifting from a mindset that centers on extracting value from people toward an approach that focuses on helping humans thrive is a leading course of action.

The irony of Deloitte writing this is not lost on us. Clearly it is on them.

Here’s another fun section. Deloitte has mapped out the difference between leadership and worker views on a few factors like workloads, bringing your whole self to work, fairness, flexibility, and autonomy. Although 71 percent of the C-suite is ready to GTFO to a more well-being conscious company because they’re so stressed, for some reason almost 90 percent of them think their workers’ workloads are always or often reasonable.

They also think they’re doing great on the human sustainability front (they aren’t).

Here we see a figure that shows more disparity between the perceptions of the C-suite and the actual experience of workers. Note the 22 percent of workers who rank their financial well-being as poor or very poor (literally).

Said Deloitte, again with a complete lack of awareness:

For executives, these disconnects should signal that it’s time for a change. It’s important for leaders to develop a more accurate picture of how workers are really doing if they want to move human sustainability efforts forward. Leaders should involve workers to help identify their needs and values, how they perceive their current experience at work, and how human outcomes can be pursued together. Furthermore, they should engage not only their own team members, but also future workers, community members, and other members of the organization’s human ecosystem.

Worker surveys, forums, interviews, or focus groups, are all good options for helping leaders understand the big picture around how their workers are faring. Otherwise, absent any impetus for change, organizations may elect not to take any action around advancing human sustainability.

Ah yes, those notoriously accurate worker surveys in which people are eager to share their true views and not at all afraid of retaliation.

Read more: The important role of leaders in advancing human sustainability [Deloitte]

Related surveys:

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As a direct result of this unpleasant market, KPMG Australia is laying off another 200 people (on top of the 3 percent reduction of headcount last year) and completely changing up their consulting business. That means they’re going to start emulating Accenture, not McKinsey.

Reports 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”.

“I think the era of generalist management consulting being standalone is over, and that all consulting into the future will need to be tech-enabled,” Mr Howes told AFR Weekend, describing the year as a “bumpy” one for the firm.

All cuts will be at the senior consultant level and above. A fortunate 50-ish people will be spared from layoffs and will instead get reshuffled elsewhere in the firm.

On the topic of a troubled market, KPMG Australia reported total revenue of $2.55 billion AUD ($1.7 billion USD) for fiscal 2023, an increase of 9.1 percent from prior year. That figure includes $0.175 in recoverable expenses and actual revenue of $2.38 billion. At the time they released these numbers in August 2023, the firm talked about beginning to take hits in December of 2022 and CEO Andrew Yates said KPMG had to “adjust our business” in order to “reflect the new landscape.”

Revenue by service line (percentage change over 2022 in parentheses) for FY23 broke down to:

• Audit, Assurance & Risk Consulting: $671 million (+4%)
• Deals, Tax & Legal: $401 million (-2%)
• Enterprise: $361 million (+23%)
• Infrastructure, Assets & Places: $200 million (+22%)
• Management Consulting: $745 million (+12%)

They’re hoping to make tech consulting about 60 percent of the consulting take going forward.

Added AFR’s story, Howes said part of this consulting transformation will include “looking at org design, understanding working behaviours … [and] organisational psychology in terms of the way in which you actually get different bits of quite a large sprawling company to talk to each other.” Hmm. Maybe some delayering too?

KPMG launches radical overhaul, cuts 200 senior jobs [Financial Review]

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As head of the UK firm, the second largest in EY’s global network behind the US, Ball was an influential figure as the firm’s global bosses tried and failed to split its accounting and consulting arms globally. 

The 61-year-old was a strong proponent of the deal, codenamed Project Everest, which would have transformed the business model that has dominated the accounting profession for decades. 

In his note to partners, Ball said he would agree a transition plan with his successor but that he did not envisage a lengthy handover period. 

“The commitment I made was to navigate the UK business through the uncertainties that came after our separation discussions,” Ball said in the note, adding that the firm had needed to “regroup” after Project Everest was abandoned last year. 

Fellow Everest cheerleader Carmine Di Sibio — who got a retirement exception of his own as his time was coming up while Everest was still on the table — announced his exit last summer and will join the PayPal board effective July 1.

By all accounts, Ball intended at the time of his second extension to see the term through to the end of June 2025. But nah, he’s out.

Ball took home a cool £3.6 million ($4.6 million USD) in pay last year. Meanwhile, EY UK has made multiple cuts including laying off 150 people three weeks before Christmas 2023. Even partners have been suffering as their payouts shrunk from £803,000 (a little over $1 million USD) to £761,000 ($966k USD) in 2023.

Hywel Ball has called EY home since 1983.

The post Another Project Everest Cheerleader Bites the Dust appeared first on Going Concern.

According to a press release they put out yesterday, EY plans to invest a billion dollars over three years on talent and technology “to revolutionize the experience of early career accounting professionals and improve the attractiveness of the profession.” Let’s see what exactly they think that looks like:

This investment includes a significant increase in early career compensation, artificial intelligence (AI)-enabled audit and tax platforms, an innovative new “360 Careers” experience, outreach and support for college students, and enhanced wellbeing benefits.

Call us skeptical but this sounds like a lot of non-compensation stuff that could eat up a healthy chunk of that billion bucks. They did say the salary bump will put accounting “on par with other business majors” though:

EY US will increase early career compensation as part of a total rewards package that recognizes the value of a certified public accountant (CPA) career path. This investment will place the profession and accounting degree on par with other business majors and position EY US as a pay leader in an increasingly competitive US market.

No salary number was given so we’ll just have to keep an eye on the next few compensation seasons to find out just how much more they’re paying.

Added the firm:

EY US will continue to be a beacon for top talent, supporting professionals as they pursue a degree in Accounting and as they progress in their career, through:

• Pathways to CPA licensure, including the EY Career Path Accelerator, to remove barriers to entry and create a growing pool of future CPAs
• New EY 360 Careers experience for early career professionals starting in 2025, which will serve as a launch pad and accelerator to give campus recruits the essential skills they need to grow as leaders at the global EY organization, forge their paths as entrepreneurs or advance to prominent C-suite positions later in their careers
• Wellbeing enhancements to help professionals perform at their best, including dedicated coaching and wellbeing assistance for audit and tax teams during periods of peak performance

If you didn’t know, EY Career Path Accelerator is “an accessible, affordable, and relevant alternative for students to meet the 150 hours of education required for CPA licensure” meant for people who aren’t on the Master’s track. This is what’s currently on offer:

Says EY about the program, the Career Path Accelerator “offers hands-on learning through our EY internship, ensures participants receive the guidance they need to be successful, and equips students with the future-focused skills and subject-matter experience that they’ll need upon entering the workforce.” The program is administered by Hult International Business School.

Let’s wrap this up with the expected quote:

“Investors and global capital markets depend on a thriving accounting profession,” said Ginnie Carlier, EY Americas Vice Chair – Talent. “Our goal is to make EY US the most preferred place to launch an audit or tax career and become a springboard for future business leaders – for our own organization and leading public and private enterprises.”

EY US to invest $1 billion in compensation and technology to improve the attractiveness of the accounting profession [PR Newswire]

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In another round of “voluntary separations” (aka silent layoffs with goodbye perks) at PwC UK — not to be confused with an earlier round of voluntary separations last November — the firm is demanding staff not mention that whole being forced out thing in their final emails to colleagues. Oh, and don’t disparage the firm or partners and be sure to add how much you’ve enjoyed your time working here. At least that’s what Financial Times has reported.

The layoffs have not been announced (that always goes over well, it’s not like anyone will notice members of the team up and disappearing like they’ve been raptured) and it’s unknown just how many people have been cut, only that it’s a “significant round” affecting consulting, risk, and operational and managed service lines according to someone in the know. Clearly PwC wanted to keep this all under wraps so kudos to whoever leaked this nonsense to FT.

FT:

Staff who have been offered a package to leave have been notified individually, the people said. They have been told they must not tell other staff if they accept the offer and to follow a script provided by HR if they want to send leaving notes to colleagues.

In guidance sent to affected employees, reviewed by the FT, PwC said: “Should you decide to accept this voluntary offer, it is possible for you to send out a note to a defined group, however this must not refer to the voluntary severance offer or the circumstances of leaving (suggested wording for this note is given below but we recognise that you will naturally want to personalise this).”

It’s hard to imagine this getting any worse but it does. PwC says they reserve the right to review any messages before they’re sent out. And if someone takes it upon themselves to send an off-message email? What are they going to do, fire you?

To ensure departing staff color within the lines on their goodbye notes, the firm insisted any communications “not be derogatory to PwC or its employees/partners” and provided this template:

“The content of your comms should follow this approach . . . ‘Following recent discussions with my [relationship leader], I have taken the decision to leave PwC. It hasn’t been an easy decision for me to reach but now that I have, I am excited about what the future holds for me and the new opportunities on the horizon. I have really enjoyed my time at PwC and the opportunity to work with such talented colleagues.’”

It’s one thing to request staff not mention they’re being pushed out but to demand compliments on their way out too? Lame. That better be one helluva severance package.

PwC asks for silence from departing staff in programme of UK job cuts [Financial Times]

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Said the press release:

End Point’s team is one of the premier implementers of EpiTrax, an open-source platform for collecting, organizing and maintaining epidemiological data. Together with Deloitte’s GovConnect digital assets, they will help enable public health agencies to better identify, investigate and mitigate communicable diseases, environmental hazards, and bioterrorism events, while fortifying their emergency response efforts.

End Point is the developer behind CasePointer. As part of the deal, Deloitte is getting End Point’s former chief technical officer Jon Jensen who is quoted as saying, “Since 2008, End Point’s CasePointer business has worked with open-source public health software to modernize tools, automate processes, improve the user experience, and provide better return on investment to state and local public health agencies for their disease surveillance and epidemiologic needs. We are excited to work with Deloitte’s team of professionals and serve their broad client base. Together, we expect to make an even greater impact for government health organizations.” They’re your team now, buddy.

The press release goes on to fluff Deloitte’s public health business with the usual quotes, we can skip that.

Deloitte Bolsters its Public Health Transformation Capabilities With Acquisition of End Point’s Industry-Leading Disease Surveillance Business [PR Newswire]

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As Big 4 firms scramble to be the fastest, trustiest, and billing-est firm in the race to monetize generative AI, PwC announced today it is not only ChatGPT’s biggest enterprise customer, it will be shilling the service to clients.

It’s giving Hair Club For Men (I’m really dating myself with that reference aren’t I?).

Said PwC in the press release:

The power of generative AI (GenAI) is already reshaping our work environments and daily lives, signifying a decisive tipping point. Recognizing the immense potential of AI, we have strategically invested in this area for years.

Citation needed on years. I did dig up this CIO Dive article from last year containing an interview with Scott Likens, Global AI and Innovation Technology lead at PwC and certified hipster beardo. It says:

PwC has invested in AI for years and in generative AI from a research and development perspective since the transformer architecture was invented in 2017, Likens said. When the current wave of enthusiasm hit, the company wanted to treat itself as client zero, which meant taking a hands-on approach to fine-tuning tools, frameworks and training programs.

Last year, just as the AI buzz was really heating up, PwC announced it would invest a billion dollars over three years to “expand and scale its artificial intelligence offerings and help clients reimagine their businesses through the power of generative AI.”

Said PwC of the OpenAI deal, the firm will be the first reseller for ChatGPT Enterprise ever — not just the first Big 4 firm, the first company of any category — and the largest user of the product. Rather than speaking in nebulous terms that sound cool but don’t tell us much about actual applications, they chose to describe two specific ways in which they’re using GenAI right now. Props to them for that.

[W]e are already developing custom GPTs to help our workforce with reviewing tax returns, proposal response generation, software lifecycle assistants, dashboard and report generation and more. These practical applications demonstrate how PwC will leverage GenAI solutions to help solve complex business problems.

We are actively engaged in GenAI with 950 of our top 1,000 US consulting client accounts alongside discussing the use and implications of AI with many of our audit clients, emphasizing the near universal demand across industries for the transformative power of this technology.

Just going to drop this link here in case we need it later. No reason.

Digging around on PwC’s website, we find a few more quantified examples of how the firm is using AI internally to get shit done.

• IT: 20% to 50% productivity gains in software development processes. Software development is critical to our operations. Our in-house teams develop the applications that make our firm run — and help clients develop customized software too. GenAI has revolutionized how our development teams work: Customized tools help synthesize data, complete and review code, generate documentation, conduct fast, granular troubleshooting (through root cause analysis) and more.
• Finance: 20% to 40% productivity gains in accounting and tax. Data analysis, document summarization and generation, chat-based Q&A and more are all faster — thanks to a mix of specialized GenAI tools. For example: one GenAI tool now enables our finance function to create first drafts of new contracts and extract key information from existing ones within seconds.
• Marketing: 20% to 30% productivity gains from our specialized GenAI model to help generate marketing content, and from firmwide models to automate documentation of work processes, review documents for risks, summarize and analyze documents and audio, and enable Q&A access to data analysis. Our people create our marketing — GenAI is helping them produce it more quickly and making it more data-driven and customized.

Added the firm in today’s announcement:

We have entered the ‘prove it’ phase, where we are actively demonstrating the capabilities and benefits of GenAI. We have already identified over 3,000 internal GenAI use cases, which is driving an end-to-end transformation within our own business and represents endless potential applications for clients across various industries, including financial services, healthcare, manufacturing, hospitality and more. We are taking a holistic approach and leveraging our deep industry experience to help transform our clients with AI, linking sources of value to common AI patterns to drive increased impact. This approach enables our clients to achieve faster outcomes with greater productivity, consistency, and efficiency.

We’d love to see the financial details of this deal, alas none are given so we’ll just have to use our imaginations.

PwC is accelerating adoption of AI with ChatGPT Enterprise in US and UK and with clients [PwC]

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They’re doing this because according to them:

In a fast-paced, globally focused business environment driven by new technology and increasing regulatory complexity, clients’ needs have also evolved. To meet these, both firms will bring their complementary strengths and technology solutions together to enhance the range of services offered across audit, tax and legal, and advisory. With a wider geographic coverage, the new firm will be able to expand its service and sector expertise complementing the already deep local market understanding for its national and international clients.

Partners at both firms voted “overwhelmingly” for the merger. “This will make the firm the second largest in the KPMG network by some distance,” said the press release. That distance being about $32 billion behind KPMG US’s $36 billion in revenue. [disregard, we’re dumb and used global revenue here]

You may recall a dubious rumor floating around last year that KPMG US, UK, and India were exploring merging their advisory practices. After we included a link to an Economic Times of India story about so-called Project Himalaya, this was quickly debunked by a KPMG spokesperson who reached out to us saying “KPMG is a network of member firms, which are independent of each other. We are, as always, focused on opportunities for greater collaboration within our existing India-based client delivery network.”

A potential UK/Switzerland deal, however, was correctly floated by Financial Times back in December:

KPMG is planning to merge its UK and Swiss businesses in a tie-up that executives hope can boost growth and profits at the smallest of accounting’s Big Four. 

Partners in KPMG’s operations in the two countries were told last Friday that the firms were in discussions over a possible combination, people familiar with the matter told the Financial Times. Rank-and-file employees were given a more limited briefing on Monday. 

The merger, which would be subject to partner votes in both countries, would be the biggest strategic shift at the Big Four accounting firm since UK chief executive Jon Holt took over in 2021 after the sudden resignation of his predecessor Bill Michael. 

Holt is seeking both to repair KPMG’s reputation, after a series of fines and scandals, and to boost profits, which have lagged behind those of rivals. 

Quick refresher on what happened with Bill Michael:

Related: KPMG UK Asks Staff to Stop Snitching to the Media When the Firm Does Something Stupid

Although total revenue was up nine percent from the year prior, KPMG UK laid off six percent of its deals people in October and froze pay for 12,000 staff across all service lines while reducing bonuses for some. So they’ve had a rough go of it lately and that’s not counting the tongue-lashings and fines they’ve received from regulators in recent years.

Of the news, the press release of course has complimentary quotes from the CEOs.

“This marks a historic moment for both firms,” said Jon Holt, chief executive and senior partner of KPMG UK. “We will be stronger as one combined firm and together we will have the scale to significantly enhance our ability to deliver great outcomes for our clients both internationally and within our domestic markets. Merging brings huge benefits for our clients, our people, and our partnership and means we can now grow faster, be more profitable and invest together to create new services in a sustainable way.”

“Both partnerships have made an important decision today, which will evolve and future proof our firms for the global business challenges ahead,” KPMG Switzerland CEO Stefan Pfister said. “Together we will be more agile and can bring the best of KPMG’s multidisciplinary model and sector expertise to clients nationally and internationally while at the same time maintaining our local market understanding and execution power.”

As for the structure of the merged firm, KPMG will establish a new limited liability partnership comprised of equity partners and the LLP will own the existing UK and Swiss firms. Jon Holt will lead the new partnership as Group CEO and Stefan Pfister will get the consolation prize of the title Group Deputy CEO.

October 1 will be MechaKPMG’s first official day.

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As an industry publication that started out as a voice for millennials (and cool Gen Xers), we’ve never bought into the “Gen Z is lazy” stereotype because that stereotype was pinned on our generation too when we started entering the workforce at the turn of the millennium. It’s clear the root of it is less that an entire generation is lazy — some are, no doubt — but that the old guard couldn’t understand why young people were not interested in taking shit from their employers like they did back in their day. See, in their day they paid less than $5k for college and could afford a house and a couple kids on a single salary. We, the 40-something and unders, know we have to job hop to get good salary increases and learned early on that unless you really like the work or have eyes on a corner office, there’s very little incentive to stay with the same employer for too long. That’s all that is.

Alas, the lazy stereotype persists. And the 433 interns across tax, audit, and advisory service lines KPMG surveyed for its Intern Pulse Survey are over it.

You’ll notice none of these key takeaways say anything about TikTok or Fortnite.

• Gen Z talent is seeking stability amid a tight labor market and is pushing back against the notion that they are lazy.
• Gen Z is fully embracing GenAI – both in their personal and professional lives – and the availability of AI-related trainings is an important factor when considering a future employer.
• Gen Z strongly values a positive culture and working environment with opportunities to engage coworkers in-person and up-level their soft skills, but don’t forget salary.
• Gen Z values home ownership most when it comes to their long-term financial goals and most plan to vote in the U.S. presidential election this year.

Bonus points to KPMG for that “but don’t forget salary.” Gen Z, like all of us, doesn’t want to work in a hellhole staffed with actual demons, power-trippers, and Machiavellian managers who mentally torture you for sport. But their desire (or ability) to avoid such an environment is trumped by the bottom-most sections of Mazlow’s hierarchy of needs — that is to say food, shelter, sleep. You know, the basics. Basics that have grown increasingly expensive just in the past few years. Corporate leadership loves saying Gen Z values purpose as if that’s the only thing they value but let’s be honest, the rent’s got to get paid above all else. And the rent is obscene right now.

Here’s what KPMG says about their interns’ opinions that third bullet:

“Purpose, culture, sustainability and opportunity are all important factors as Gen Z talent consider job opportunities, but this generation is more confident talking about what they need – from salary to work-life-balance. It’s important that employers continue to actively manage these expectations,” said Derek Thomas, National Partner-in-Charge, University Talent Acquisition at KPMG U.S.

• When asked for the top three factors they value most in a future employer, respondents identified salary as most common (25%), closely followed by a positive culture and working environment (24%) and opportunities for advancement (20%). Scheduling flexibility (15%) was an additional factor, followed by learning and development as well as benefits—such as good options for paid time off, healthcare/dental/vision coverage, and mental health benefits and programs.
• 78% agree or somewhat agree that an employer’s ESG efforts (e.g., prioritizes environment/sustainability; is committed to DEI and social equity; and demonstrates ethical business practices) is an important factor when considering a job/employer.
• 89% agree or somewhat agree that access to trainings on “soft skills” or professional skills (e.g., presentation skills, executive presence, client etiquette, interpersonal skills) is an important factor when considering a job/employer.
• 82% believe a hybrid work model will provide the most opportunity for growth as they start their career. However, the survey does not find a significant desire for fully in-person or remote work. 14% believe that fully in-person will be most conducive to career growth, and only 4% think that fully remote is best.

Also of note: Nearly half of all respondents (48 percent, and mind you these are current KPMG interns) believe that 20 percent of their future full-time job as it exists today will be automated by AI. 39 percent are using ChatGPT frequently, 14 percent say they’ve never used it. A little more than half (51 percent) use generative AI for work-related purposes (or claim to be doing so), be it for administrative tasks not detailed in the survey results of project-based tasks. Almost three-quarters (72 percent) agree that being offered AI-related training and tools is an important factor when looking at potential employers.

And here’s an interesting footnote on salary they stuck in there:

A KPMG 2022 survey found alumni who stayed with KPMG for an extra year saw an 18% increase in their annual compensation value. Projecting this accelerated earnings potential over a nearly 40-year career period could potentially yield millions in extra lifetime earnings.

So you’re saying there’s value in loyalty after all?

The post KPMG Interns Firmly Disavow the Lazy Gen Z Stereotype appeared first on Going Concern.

“We have been preparing for this transition to a new senior partner and know that Paul’s passion for innovation and dedication to our clients and people positions Paul as the leader to take the firm forward,” said Karen Young, chair of PwC’s U.S. board, to WSJ.

Paul takes the reins at an interesting time for PwC as they just recently announced a realignment that will throw out that whole Trust experiment from a few years ago and rearrange service lines back to Assurance, Tax, and Advisory. They’ll also be throwing out tons of nonsense words from leadership job titles, a decision graphic designers everywhere can applaud.

Earlier:

The post Tim Ryan Is Dipping Out of PwC Early, the Leadership Transition Gets Bumped Up to RIGHT NOW appeared first on Going Concern.

Who or what is Fair360, you ask? Who cares!

For real though, Fair360 used to be called DiversityInc, a name that might be slightly more familiar to you. They rebranded last year, citing “the ever-changing sociopolitical landscape and our commitment to a holistic approach to workplace fairness” as why. The list methodology is long and complicated, let’s not get too deep into it. The ranking is “based on empirical data obtained through organizations completing and submitting the online survey” and this next part is too long for quotation marks so here you go:

The assessment provides detailed insights into representation metrics across several dimensions and intersectionality segments including race/ethnicity, gender identity, sexual orientation, disability status and veteran/active military status of employees, leadership and board of directors. In addition, the assessment captures information regarding supplier fairness and philanthropy-related spending and practices to generate relevant benchmarks, best practices and research.

KPMG naturally put out a press release to inform everyone of this wonderful news.

KPMG LLP ranked #5 on Fair360’s 2024 Top 50 Companies list, appearing on the list for the 18th consecutive year. The announcement was made live on May 13, 2024, at Fair360’s annual event in New York.

Since 2001, the Fair360 (previously known as DiversityInc) Top 50 survey has recognized U.S. employers that are committed to overall workplace fairness.

The obligatory leadership fluff:

“The world is growing increasingly complex, and the future leaders of our industry will be those who attract the most innovative and skilled people, create diverse and well-managed teams, and build connections based on trust with their clients and our society,” said KPMG U.S. Chair and CEO, Paul Knopp. “By fostering a work environment where everyone feels valued, respected, and empowered, we unlock the full potential of our people and create a culture of innovation and excellence.”

And more fluff:

As a values-driven organization, KPMG has a long-standing commitment to advancing diversity, equity, inclusion and a sense of belonging both within the firm and in the broader marketplace, and it continues to be a strategic priority. 

And MORE fluff:

“At KPMG, we prioritize a culture of genuine understanding and empathy, so we are equipped to meet the unique needs of our workforce,” said KPMG U.S. Chief Diversity, Equity and Inclusion Officer, Elena Richards. “Together, we are building an environment where everyone can flourish and reach their highest potential.”

OK, we’ve gotten to the end of the fluff. Really was worried for a minute there it was going to go on for many more paragraphs.

KPMG moved up one spot from #6 on last year’s list and amazingly, this isn’t their first time as the only Big 4 firm on the list. See our 2019 report: KPMG Gets Another Award For Being the Big 4 Firm That Is the Least Old, Male, and Pale

We suppose it’s worth noting that neither EY nor PwC qualify for the Top 50 list as once a company earns a #1 spot, they’re forever retired to the Hall of Fame. PwC took #1 in 2012, EY in 2017. This makes them ineligible for inclusion in the Top 50, possibly to prevent the kind of PwC/Deloitte domination we’ve witnessed year after year on the Vault rankings. Only makes sense an organization called Fair360 would like to give others their fair shot at glory.

Fans of lists will love to hear that there are even more lists, Fair360 has conveniently listed (ugh) them out and included KPMG’s rank for each.

Specialty Lists

They better watch out, EY is dangerously close to unseating them as supreme leader of employee resource groups.

Congrats to them and maybe if they keep self-reporting performing as well as they have they will one day join PwC and EY in that storied Hall of Fame.

KPMG named No. 5 on Fair360 Top 50 Companies List [KPMG]

The post You’ll Never Guess Which Big 4 Firm Is the Only One to Make This Top Companies List appeared first on Going Concern.

He may be CEO now but unlike some naturally talented, born-to-lead handshakers, he didn’t get there right away. Before finally ascending to the highest rung on the ladder, he didn’t make partner (twice!) and came in second in his first race to be CEO. He got there eventually, obviously.

On the most helpful career feedback he’s received, here’s what he said:

It’s interesting. You usually get this feedback when you fail, “just keep doing what you’re doing, you’re doing a good job.”

Now that is BS feedback because every human always needs to improve.

I need to keep growing and learning as a CEO every single day in my role. So if someone tells you that you’re doing fine, and you don’t need to do anything else, that is the worst possible piece of feedback and advice you can ever get.

You should be asking, “what else can I do?” As I said to you before, “how am I perceived?”

The second year I failed to make partner, I kept asking why, why, why, why? And eventually, I got that feedback, “you are perceived as a larrikin, as a lad, you have the gravitas.” And then we started to talk about feedback. “Okay, what can I do to change that perception?” And that feedback I could use, and I could apply for the rest of my career.

Yeah, we’re gonna have to Google that.

Larrikin is an Australian English term meaning “a mischievous young person, an uncultivated, rowdy but good-hearted person“, or “a person who acts with apparent disregard for social or political conventions“.

It used to mean “a lout, hoodlum, or hooligan.” Further reading from this century: Q&A: The origin of “larrikin”

Anyway, seems ol’ Adam took that advice to heart and changed not who he is as a person — “I’m still a larrikin. You can’t take that out of someone,” he told AFR — but how he is perceived. When it comes down to it, that’s all that matters in professional services after all. His colleagues at PwC know all about that.

Adam Powick failed to make partner twice. Now he runs Deloitte [Financial Review]

The post Mischievous Deloitte Partner on Why ‘Keep Doing What You’re Doing’ Is the Worst Career Advice appeared first on Going Concern.

For some reason, we’re fascinated with Big 4 office spaces. Perhaps because we don’t have to work in them and can instead admire (or criticize) from a safe distance. There have been a few interesting ones in recent years, like Deloitte’s ‘future of work’ office in Edinburgh, Scotland and the building PwC is moving into in San Jose soon — just down the street from Winchester Mystery House — has some promise.

Today we’re checking out the EY Regional Shared Service Center (RSS) in Bulgaria’s capital city Sofia. At RSS they do talent, finance, risk, and communications processes for “a diverse clientele” from 29 EY countries throughout Central, Eastern, and Southeastern Europe and Central Asia. This ain’t your mother’s cramped Indian call center.

Those chairs appear to be the West Elm Humanscale task chair, did they really drop a thousand bucks a piece for those things? Business must be good.

“This new facility marks a new chapter in our journey. Today, we stand in an office that is a manifestation of our vision, determination, and perseverance. Not only will this make our daily office life more comfortable but most importantly it will provide a platform for people to share ideas, to innovate, to integrate and thus further transform and enhance our capabilities“, said Rafal Olejniczak, EY’s Regional Director of Operations during the opening ceremony.

Check this guy out. Why are Europeans so effortlessly cool?

Said the firm breathlessly of the new space:

The new office stands as a testament to EY RSS’s dedication to cultivating a culture that emphasizes the importance of quality and excellence in delivering key business services. The office’s contemporary design embodies the company’s progressive mindset. Its bright and spacious interior is suffused with natural light, creating a welcoming environment that stimulates intellectual activity, creativity and innovative thought. The layout of the office includes a mix of open-plan areas for collaboration, secluded spaces for concentrated work, and casual breakout zones, ensuring its adaptability to meet the diverse needs of its dynamic workforce.

Understanding that innovation thrives in diverse settings, RSS has meticulously designed its new headquarters with versatility at the core. The design allows employees to choose their optimal working environment, be it amidst the vibrant atmosphere of communal worktables, the comfort of lounge areas, or the quietude of soundproof pods.

Each area is equipped with cutting-edge technology that seamlessly integrates into daily workflows, allowing teams to collaborate effortlessly, whether they are in the same room or scattered across the globe. High-speed internet, smart conferencing facilities, and real-time collaboration tools ensure that every team member stays connected and engaged.

So they have phones and wifi, got it.

Perhaps it’s cause for concern that firms are sinking all this money into off-campus service centers in other countries (see this prescient 2013 article: Are Some U.S. Companies Preparing to Trim Their Tax Department Fat?) but let’s not worry about that today.

EY’s Regional Operations embarks on a new era of integration and innovation with the opening of its modern office [EY]

The post EY’s New Shared Service Center in Sofia Isn’t as Plain as a Bulgarian Pin-Up appeared first on Going Concern.

Since then, partners have been ousted, a tainted practice sold off, clients lost, trust shattered, leadership not only at PwC but all Big 4 firms relentlessly grilled by lawmakers, and worst of all the prestige-iest Big 4 firm in the world has lowered itself to groveling for a crumb of forgiveness. Like this:

Now the sad-faced CEO in that apology video is saying it’s time for everyone to move on. I mean, what do you all want? They released an independent report! Let it go already.

AFR:

PwC chief executive Kevin Burrowes says it is time to draw a line under the damaging tax leaks scandal that has plagued the big-four firm, while conceding the task of restoring its tattered reputation will take years.

After a horror period in which PwC was blackballed from lucrative federal government contracts, forced to hive off its 100-partner public sector consulting business for $1 and lost another 200-odd partners, Mr Burrowes said he was confident “enough progress” had been made to begin rebuilding.

“We feel we’re in a good position now to start to turn to a new chapter, look to the future and drive the firm with a new strategy,” he said.

That new strategy includes four items, only one of which is related directly to the post-scandal rebuilding while the other three essentially translate to “making us money”:

• Reaffirms the firm is delivering on its Commitments to Change;
• Repositions the firm to support clients in an era of disruption and economic uncertainty;
• Highlights multi-disciplinary support for clients across core market-leading capabilities such as; audit, tax and deals, risk and transformation, cloud and digital; and
• Prioritizes four new key market areas; artificial intelligence, trust in what matters, climate and business model reinvention.

“Never in my 30 years working in this firm have I seen the level of corporate disruption that is happening at the moment,” Burrowes said to AFR. “We have to look at that level of corporate disruption and make sure the firm is able and capable to serve those clients in the way they want to be served. And that’s why it’s the right time to launch a strategy.” See, moving on isn’t for the firm, it’s for the clients. Why won’t these rabid senators and media jerk-offs think of the clients! Do I need an /s here? Hope not.

We’re curious how Kevin’s counterparts at Deloitte, EY, and KPMG feel about his desire to put this all in the past. They too have lost business as a result of PwC’s actions and have gotten pummeled in Parliament…

…and investigated by a media that was wholly disinterested in what happens behind the curtain up until this salacious story made its way to the public eye.

Kev admits there’s work left to do but that could take years. It’s not easy to upend a culture that breeds the sort of egregious behavior that led to this happening in the first place. “It was never going to be something that was done in six months,” he told AFR. “It’s probably going to take us a couple of years, if not longer, to get all of the actions embedded.”

And who will service clients in the meantime?? Grant Thornton?! Please.

Burrowes wants everyone to move on from PwC’s tax scandal [Financial Review]

The post Let’s Brainstorm Shopping Ideas For Underwear Strong Enough to Accommodate This PwC CEO’s Massive Balls appeared first on Going Concern.

Deloitte Digital, in partnership with the International Olympic Committee (IOC), has produced a video to get everyone excited about the 2024 Summer Olympics in Paris and remind us why Deloitte was chosen to be Flavor Flav to the IOC’s Public Enemy. GET HYPED.

Highlighted in the video are Sarah Attar, Saudi Arabia’s first female Olympic athlete; Natalie Du Toit of South Africa, the first amputee to compete in Olympic swimming; Abdellatif Baka, a visually impaired Paralympian runner from Algeria who won gold in Rio in 2016 and holds the distinction of being the first Paralympian to beat the winning time of an Olympian in the same event (also it’s his birthday today so happy birthday, guy); and Rose Nathike Lokonyen, a track and field athlete originally from South Sudan who competed in Rio on the Refugee Olympic Team, a first for the Olympics. Her family fled South Sudan when she was just ten and she was discovered at a refugee camp. No joke:

The International Olympic Committee and Tegla Loroupe Foundation held races inside refugee camps as tryouts for possible participation in the 2016 Summer Olympics. Lokonyen first tried out, while running barefoot, at the 5,000 meter distance and won her race, allowing her advance to Ngong. She continued to train alongside other Olympic hopeful refugees in Ngong before being notified via a livestream from Geneva, Switzerland that she had been chosen to compete.

She was selected by the International Olympic Committee (IOC) to compete for the Refugee Olympic Team in the women’s 800 m at the 2016 Summer Olympics in Rio de Janeiro, Brazil. The Refugee Olympic Team was the first in Olympic history. Lokonyen was one of five athletes on the refugee team born in South Sudan and was the team’s flag bearer at the opening ceremony. Nathinke finished seventh in her first round heat with a time of 2:16.64. She did not advance.

Additional reading: The Olympic Refugee Team Was Created to Offer Hope. Some Athletes Are Running Away From It in TIME.

The full First Effect campaign has many more firsts, we’d tell you what they are in detail but Deloitte is really weird about cookies so you’ll just have to check it out yourself:

I’d rather not, thanks.

But let’s not forget about the most important first of all, holding eight years in a row of gold medals in Big 4 global revenue.

Earlier:

The post Deloitte’s New Olympics Campaign Inadvertently Reminds Everyone They’re First in Revenue appeared first on Going Concern.

Today EY released the results of its 2024 Human Risk in Cybersecurity Survey and Gen Z workers who use work-issued laptops or computers for their jobs are feeling not so great about their scam-detecting skills:

Gen Z is losing confidence in their ability to recognize phishing attempts — one of the most common and successful tactics of social engineering attacks — and is most likely to admit to opening a suspicious link. And now, with the power of AI-generated phishing emails, spotting malicious links and content is getting even harder. Although they are a digital-first generation, only 31% of Gen Z feel very confident identifying phishing attempts, marking an alarming nine percentage point drop from 40% in 2022, and 72% said they have opened an unfamiliar link that seemed suspicious at work, far higher than Millennials (51%), Gen X (36%) and Baby Boomers (26%).

The boomers are lying.

More than half of millennials and almost two-thirds of Gen Zers surveyed are worried they’ll get fired if they leave the company door open to a breach.

Nearly two-in-three Gen Z and Millennial workers are particularly fearful about repercussions surrounding cybersecurity, including 64% of Gen Z and 58% of Millennials who fear they would lose their job if they ever left their organization vulnerable to an attack. Younger generations are also more likely to not fully understand what their organization’s process is to report suspected cyber attacks, even though their organization has a process in place (39% Gen Z and 29% Millennials vs. 19% Gen X and 15% Baby Boomers).

Although the numbers seem to show Zoomers don’t have faith in their scam-avoiding skills, more of them feel knowledgeable about cybersecurity than the last time EY did this survey in 2022 (86% vs. 75%). EY says this points to “opportunities to better equip younger workers to turn this knowledge into confidence by investing in upskilling and training that caters to their unique experience as true digital natives.”

The only other figure of note from EY’s press release is this one:

A vast majority of employees (91%) say organizations should regularly update their training to keep pace with AI, especially as AI’s role evolves in cyber threats; but only 62% say their employer has made educating employees about responsible AI usage a priority.

New EY research reveals cybersecurity fears are on the rise among US workers, with a vast majority concerned about AI in cybersecurity [PR Newswire]

*by “hacked” they mean “compromised,” usually through the owner being bamboozled by a fake log-in or using recycled passwords.

The post Note to Partners: Make Sure Your Interns and Associates Know How to Avoid Sus Links and Phishing appeared first on Going Concern.

Wrote Financial Times on April 14:

The three candidates shortlisted to become PwC’s next UK senior partner will fly to Dubai this month for what is set to be a crucial hustings in the race to succeed outgoing boss Kevin Ellis.

The fast-growing Middle East division, which brought in revenues of £1.6bn last year (nearly $2 billion USD), is now home to more than a quarter of the roughly 1,400 partners who can vote, making it a key constituency in the race to replace Ellis, who has led the firm since 2016.

“The Middle East partners will be a very important grouping,” said one senior accounting executive. “Whether they vote as a bloc or not could determine the outcome [of the race].”

“PwC Middle East partners to play key role in selection of UK boss,” Financial Times April 14, 2024

Our PwC here in the US had its own race for supreme leader this year that ended with the exceptionally photogenic Paul Griggs set to take the helm from Tim Ryan and three senior partners getting stripped of their management roles after they committed “significant violations” of PwC’s leadership election rules. We don’t know what exactly those significant violations were but it sounds like the campaigning partners may have run afoul of PwC rules that prevent candidates from dominating partner meetings and blowing up people’s inboxes to plead their case to the partnership.

The Telegraph, the across-the-pond paper that’s been thoroughly covering the race to choose a senior partner of the PwC UK and Middle East, has dropped a story today with the salacious title of “PwC partners in the Middle East accused of blocking first woman boss.”

PwC is facing a backlash from its own staff amid allegations that Middle Eastern partners prevented the appointment of a woman as the firm’s new boss.

Senior partners in London are understood to believe that voters at the firm’s offices in Saudi Arabia, the United Arab Emirates and other parts of the Middle East played a decisive role in the victory of Marco Amitrano over his two female rivals.

The Telegraph also published this on Friday:

Of the three candidates shortlisted by a 12-person election committee — Marco Amitrano, audit leader Hemione Hudson, and tax leader Laura Hinton — Telegraph says Amitrano was “the underdog” and it was Hudson who was in the lead.

Hudson, a big proponent of gender equality in the workplace, has been at PwC since 2005 and worked part-time for ten years after having children.

In this keynote talk, she shares the incredulous reaction of a PwC partner who couldn’t believe she was choosing to focus on motherhood at 24 years old instead of going all-in on the career grind (“Such a shame. Throwing your career away.”). Timestamped:

Although audit billings have been high throughout her five-year tenure as audit leader, the firm has also racked up a few hefty fines. Last year, PwC UK was fined £7.5 million ($9.4 million USD) by the Financial Reporting Council for failure to follow basic audit requirements and even faking audit evidence. The year before that, they got hit with a £1.8 million fine for failing to obtain sufficient appropriate audit evidence and forgetting that auditors are supposed to exercise proper professional skepticism in their 2017 audit of communications giant British Telecom.

But neither of these audits happened while she was leading the service line. “A lot of the most problematic audits happened before her watch. She’s done a good job of improving things and cleaning up.” a colleague told Financial Times in March. We’re mentioning it anyway because that could be a factor in how many Middle East partners voted if they’re Bitter Betty about the four large FRC fines PwC has paid out since 2019 regardless of whose fault it is.

According to the Telegraph article, senior partner winner Marco Amitrano doesn’t think his Middle East colleagues made their choice solely because he was the only guy in the race.

In an interview shortly after his election, Mr Amitrano insisted that he was not chosen because of sexism in the Middle East.

He told The Telegraph: “Our Middle East firm is very progressive. And actually, the leadership and governance at the Middle East firm alongside the UK firm in selecting our senior partner actually determined the shortlist.

“So the fact that they were part of determining two females and one male when there were other options should underline for you the fact that they are far from not supportive of females.”

We’ll let you know if more concrete info emerges.

PwC partners in the Middle East accused of blocking first woman boss [The Telegraph]

The post People Are Accusing Middle East Partners of Sexism in the Senior Partner Vote at PwC UK appeared first on Going Concern.

According to the most recent data from the gubmint, the cannabis market in Canada was a $5.07 billion Canadian dollar ($3.7 billion USD) business in 2023, up 12.2 percent from the prior year.

And now KPMG is walking away from it.

The post Once Leaders in the Cannabis Space, Canuck KPMG Decides to Ditch All Its Weed Clients appeared first on Going Concern.

Here’s the Aussies’ three-year strategy:

• Reaffirms the firm is delivering on its Commitments to Change;
• Repositions the firm to support clients in an era of disruption and economic uncertainty;
• Highlights multi-disciplinary support for clients across core market-leading capabilities such as; audit, tax and deals, risk and transformation, cloud and digital; and
• Prioritises four new key market areas; artificial intelligence, trust in what matters, climate and business model reinvention.

They of course mention the Commitments to Change report [PDF] they produced in response to the independent review completed last year by respected Australian business leader Dr. Ziggy Switkowski AO (the AO stands for Officer of the Order of Australia, given by the government to individuals for distinguished service of a high degree to Australia or to humanity at large). But only briefly:

PwC Australia has confirmed its new firm strategy, with clients and culture at the heart, while continuing to deliver on its Commitments to Change. 

A quick refresher on the key shortcomings relating to governance, culture, and accountability at PwC Australia identified in the Switkowski report [PDF]:

• Lack of independence and external ‘voices’ within the ultimate governing body
• Excessive power conferred on the CEO
• Disproportionate focus on revenue growth and market leadership as the strategic imperatives
• Decentralized business model without sufficient visibility of the enterprise view
• Complexity and fragmentation contributing to ineffective structures and processes
• Unclear responsibilities and accountabilities creating gaps and risks
• Overly collegial culture inhibiting constructive challenge

And some more observations as highlighted by Australian Financial Review in their write-up of a different independent review by law firms

• Leaders ‘tolerate aberrant behavior’ from those who bring in big revenue.
• Operations drive competitive behavior and a financial focus.
• Trust in partners leads to ‘overconfidence in decision making’.
• Networks and relationships ‘weaken cognitive diversity’ in top roles.
• Fears about reputation and advancement inhibit people from speaking out.
• Focus on good news and avoid discussion of failures.

Do we need more? You get it. They’re not going to let all that messiness get in the way of helping clients through a changing landscape though:

PwC Australia has also outlined its ongoing focus on being a well-managed firm, for example, by having a market relevant operating model, leading governance, risk and ethics, and responsible business practices. Building a leading culture is also emphasised as a key driver for the firm to deliver its purpose.

PwC Australia CEO Kevin Burrowes said business reinvention is needed to truly support clients facing rapid disruption.

“We are excited for the opportunity to create better outcomes for our clients and people as we launch this strategy,” he said.

Reminder: the tax scandal they’re still digging their way out from under involved tipping big corporations to confidential specifics of the government’s Multinational Anti-Avoidance Law (MAAL).

“[T]ax partners at the firm proposing tax structures relating to the then-new MAAL for two clients were so aggressive that the Tax Office forced the companies involved to unwind the arrangements and replace them ‘with a structure acceptable to the ATO’,” wrote AFR’s Edmund Tadros in “How PwC failed to identify or deal with tax leaks scandal” dated September 2023. And in “PwC Australia ties Google to tax leak scandal, sources say” Lewis Jackson wrote for AFR, “Tax officials told parliament in May they foiled several attempts by unnamed multinational firms to subvert the multinational anti-avoidance law in early 2016, months after confidential information had leaked.” But the firm is gonna put all that behind it and blaze ever onward. With 2x the trust!

“We are on the journey to transform through technology and AI that delivers leading insights, quality and outcomes for our clients. This will also ensure we provide our people the best possible working environment, skills uplift and career development in a firm they are proud to be part of.

“This reinvention imperative impacts every organisation in our country, and we are no different. We must act swiftly to stay ahead of the curve.”

The strategy will see the firm prioritise four key areas; artificial intelligence, trust in what matters, climate and business model reinvention. It will also invest in core capabilities such as audit, tax and deals, risk and transformation as well as cloud and digital. PwC will support clients with a multi-disciplinary approach, supported by the whole firm working together.

“With a simpler, more resilient business model and robust governance, we will be well positioned to tackle the challenges of today and tomorrow. By leading with a strong cultural foundation, together we will live our purpose, which is to build trust in society and solve important problems,” said Mr Burrowes.

K.

The post PwC Australia Makes AI a Key Part of Its Three-Year Plan Because AI Isn’t Invited to the Secret Government Tax Meetings appeared first on Going Concern.

Jeffrey Johanns, associate professor at The University of Texas at Austin McCombs School of Business and regular audit industry commentator, wrote a really good LinkedIn Pulse post about the situation when the redaction first appeared. This, uh, unique choice by the PCAOB obviously led to more questions than answers. Such as:

· The other 13 reports issued along with KPMG’s included each firm’s Deficiency Rate, including the other three Big 4 firms. Why was KPMG handled differently?

· In KPMG’s listing of “Audits with Unsupported Opinions”, containing issuers labeled as “A” through “P”, issuer “N” is omitted from the list? Who is the mysterious Issuer N? Are there other missing issuers?

· After more than two years of inspection, discussion, and negotiation with KPMG, why can’t the PCAOB decide whether any particular audit is deficient? It is the regulator. The Board has the final say. It is their responsibility to draw a conclusion and move on, whether the firm agrees or not. The purpose of the response letter included in the report is for the inspected firm to indicate if they have any disagreements with the determinations in the report. If KPMG doesn’t agree with the Board’s decisions about individual audits, they should say it in their response letter.

· Why didn’t KPMG (apparently) not agree with some of the Board’s conclusions, or object in the normal inspection process? This question raises a lot of speculation, not particularly helpful to KPMG. Are there one or more audits they are being advised not to agree to as deficient? For what reasons?

We still don’t have answers to those questions but we do now have a number: 30 percent.

So a 30 percent Part I.A. deficiency rate, up from 26 percent in 2021 and 2020. Why does this feel so anticlimactic?

The number of audits selected for review was on par with previous years:

What was the secrecy all about then?? Why is this all so weird? Bloomberg Tax has an explanation:

The US accounting oversight board issued a complete version of KPMG LLP’s 2022 inspections review on Friday that detailed an extra audit with a single deficiency tied to income tax accounting.

KPMG had appealed portions of the Public Company Accounting Oversight Board’s inspection findings resulting in the release of a partially redacted report in February. In total, inspectors found fault with 30% of the firm’s inspected audits, work that generally covered 2021 financial statements, according to the amended report.

Quick update: The PCAOB tweeted about the inspection report and didn’t even mention KPMG by name. HMM.

This low-key post is in reference to the @KPMG_US 2022 Inspection Report that previously redacted key #audit deficiency related information, including the firm's overall Part 1A deficiency rate (now known to be 30% of audits inspected) and the nature of the previously redacted… https://t.co/LPBWdv9ACP

— Jeffrey Johanns (@JohannsAudit) April 28, 2024

Full report embedded below for your reading pleasure.

The post Solved: The Mystery of KPMG’s Redacted PCAOB Inspection Report (Kinda) appeared first on Going Concern.

For accountants under some categories — Chartered and certified accountants Accountant (qualified), Auditor (qualified), Chartered accountant, Company accountant, Cost accountant (qualified), Financial controller (qualified accountant), and Management accountant (qualified) — the standard going rate is now £46,800 ($58k) or £24.00 ($30) per hour. Here’s a good read from a UK immigration lawyer on all the specifics.

After net migration to the UK hit a record 745,000 in 2022, Prime Minister Rishi Sunak expressed his displeasure and a desire to get those numbers down.

But that’s another issue. For people under 26, the minimum they must earn to qualify for a visa is £30,960 ($38k-ish). Apparently this was too much for KPMG so they’ve yanked job offers from some foreign grads who were expecting to start their careers at the House of Klynveld.

Reports FT:

KPMG has revoked job offers to some foreign graduates in the UK after the government tightened visa rules for overseas workers in an effort to cut record immigration.

The Big Four firm, one of the UK’s biggest graduate employers, told affected incoming staff this week that their offers had been rescinded, pinning the move on the government’s decision to raise the minimum salary required to sponsor a skilled worker visa in the UK, according to documents seen by the Financial Times.

KPMG said the changes to eligibility criteria had “unfortunately impacted some of our graduate programmes that were previously eligible for sponsorship under the skilled worker visa category”, according to the documents. The firm declined to comment on how many offers had been revoked.

FT said the average graduate makes between £25,000 and £35,000 at Big 4 firms in the UK.

KPMG has stopped hiring overseas graduates who need skilled worker visas outside of London as a result of the changes to the eligibility rules, said FT. Except for junior actuaries, they’re still in.

The post KPMG Was Too Cheap to Pay Foreign Graduates More So They Yanked All Their Job Offers appeared first on Going Concern.

Deloitte’s Women @ Work report shows stagnating progress in and outside the workplace for women

Your report takeaways from the survey of 5,000 women in 10 countries (Australia, Brazil, Canada, China, Germany, India, Japan, South Africa, United Kingdom, United States) are:

• Half of women say their stress levels have increased since last year, and despite some progress, they are still not receiving adequate mental health support in the workplace
• Women’s disproportionate share of domestic responsibilities, including a sharp rise in those caring for another adult, is taking a toll on their careers and mental health
• Nearly half of women are concerned about their personal safety at work or while traveling to or for work
• Many women who experience challenges related to menstrual disorders, fertility, and even more so for menopause, feel unable to seek support or take time off from work
• Experiences with hybrid work are improving, but some women say they have made adjustments to their work and personal lives following return-to-office policies

“Despite a small number of improvements since last year, our survey tells us that women are facing mounting pressures in the workplace, their personal lives, and in their communities,” says Emma Codd, Global Chief Diversity, Equity, and Inclusion Officer, Deloitte. “Globally, women feel their rights are backsliding, they are experiencing increased stress and taking on the majority of household tasks at home. Alongside this they are experiencing non-inclusive behaviors at work, are concerned for their safety and feel unable to disclose when they are experiencing women’s health challenges. This is a situation that must change—and employers must enable this.”

Because Going Concern is a publication for accounting professionals, allow us to call special attention to this section.

Stress and long working hours take an increased toll on women’s mental health

Half of women say their stress levels are higher than they were a year ago and a similar number say they’re concerned or very concerned about their mental health. Mental health is a top three concern for women globally (48%), falling behind only their financial security (51%) and rights (50%).

There are a number of potential factors behind declining mental health levels, but among them is an inability to disconnect from work. The survey findings show a link between working hours and mental health: While half of women who typically just work their contracted hours describe their mental health as good, this declines to 23% for those who regularly work extra hours. Only 37% of women say they feel able to switch off from their work.

Despite these concerning findings, more than half of women say they aren’t receiving adequate mental health support from employers, and two-thirds of women don’t feel comfortable talking about their mental health in the workplace. Though this highlights a need for significant improvement, it does show progress from last year’s findings when even more women said they did not receive adequate mental health support from their employer and did not feel comfortable speaking about mental health in the workplace.

It’s no wonder women are stressed out and having trouble turning off. Because…

Women are feeling the weight of misbalanced caregiving and domestic responsibilities. Notably, 50% of women who live with a partner and have children say they take the most responsibility for childcare—up from 46% in 2023, with only 12% saying this falls to their partner. Further, 57% of women who live with a partner and are involved in care of another adult say they take the greatest responsibility for this—up from 44% in 2023, while only 5% say this responsibility falls to their partner. Meanwhile, more than two in five women bear the most responsibility for cleaning and other domestic tasks, similar to 2023. These pressures are taking a toll: women who take on the greatest share of household responsibilities are far less likely to say they have good mental health than those who do not. And nearly half say they have taken time off work for mental health reasons in the past year, compared with just under a quarter of women who don’t have the greatest responsibilities for these tasks.

The result of this disproportionate allocation of responsibilities makes it more challenging for women professionally—only 27% of women who bear the greatest responsibility at home say they can disconnect from their personal life and focus on their careers.

Worse, the report showed that women feel even less supported by their employers than last year. One in ten of them feel they can talk openly at work about work/life balance and almost ALL of them (95 percent) feel that requesting or taking advantage of flexible working opportunities will affect their likelihood of promotion. And if they do speak up to ask for flexible work options, 93 percent of respondents don’t think their workload would be adjusted accordingly.

It’s not looking good, y’all.

The post Deloitte Checks in on Women at Work, the Results Aren’t Good appeared first on Going Concern.

WSJ:

PricewaterhouseCoopers is looking to shrink its new class of U.S. consulting partners by more than 50% compared with last year as demand for advisory services continues to slow and the firm reorganizes its business lines.

The Big Four accounting firm is considering adding about 85 U.S. consulting partners effective July 1, down from 174 a year earlier and more than 200 two years earlier, people familiar with the matter said. The figures include both partners and principals, which are partners who aren’t certified public accountants.

That number could change as the figure for the coming fiscal year is finalized, likely in the coming weeks, the people said.

They didn’t have numbers on the total expected partner class. Dear reader is welcome to make an educated guess using the information below.

Of the 283 new partners and principals in 2022, 203 of them were in ‘Consulting Solutions,’ almost three times as many as assurance and tax promotions that year (76) if we’re being generous with the math for simplicity’s sake. In 2023, the number of consulting partners shrunk to 174 versus 77 in the soon-to-be-defunct “Trust” category.

For fun, let’s search the archive and take a look at the total partner and principal classes of PwC’s past to find out if we should be worried.

• 2023: 258
• 2022: 283
• 2021: 210
• 2020: 232
• 2019: 249
• 2018: 233
• 2017: 212
• 2016: 226
• 2015: 201
• 2014: 180
• 2013: 157
• 2012: 165
• 2011: 136
• 2010: 83

We’re not going to dig around in all those old posts to find out just how many people in advisory climbed to the very top of the ladder in a particular year but looking at the data from a decade ago, it was 61 people in 2014. While we’re rooting around in the past, let’s look at revenue from that year. The total global take for the fiscal year ended June 30, 2014 was $34 billion with advisory accounting for 29 percent of it ($10 billion, they said). This represented a doubling of global advisory revenues in the five years leading up to 2014.

Meanwhile, back in our current decade, PwC firms around the world reported record gross revenues of $53.1 billion for the 12 months ended June 30, 2023. Advisory grew by 13% in FY23 to $22.6 billion, up from $20.7 billion in 2022.

We won’t know until October-ish just how tough a year it’s been for PwC, that’s when 2024 revenue will show up and tell all. New partners officially enter the thunderdome on July 1 every year, the firm’s announcement always follows in August.

The post The PwC Partner Class Will Be Much Smaller This Year appeared first on Going Concern.

Stuart Gregory, EY UK & Ireland Managing Partner, Finance and Transformation, supposedly gave a presentation informing fellow partners that profit per partner could go down as much as 15 percent for this fiscal year ending June 30.

Last year, partner profits at EY took a hit for the first time in three years, dipping from £803,000 (approx. $999k USD) to £761,000 (~$947k USD). So if they take a 15 percent hit, they’re looking at £646,850 ($804,290.06 USD as of publication time).

EY UK reported revenue of £3.8 billion, double-digit growth, and a “third year of market leading growth in the UK” when they released their revenue press release last October.

Added Sky News to their report:

Insiders at the firm cautioned, however, that his comments did not amount to a firm profit forecast, and said that trading in the first part of its final quarter had been robust, with a strong pipeline of business over the next ten weeks.

EY reported combined global revenues of $49.4 billion for FY23, up from $45.4 billion the prior year. Of Big 4 firms, they’re usually second to report revenue after Deloitte some time in the late summer/early fall.

EY warns UK partners of potential profit slide [Sky News]

The post Tragedy Strikes EY Partners’ Pockets appeared first on Going Concern.

Here’s the news as it was delivered to me:

Today, PwC US’ next senior partner, Paul Griggs, introduced our new leadership team—the Operating Committee. You can learn more about all the leaders here [link to the Our US Leadership Team page on PwC’s website].

Who cares. You’ll notice though that the new leadership roles that take effect on June 30, 2024 use fewer nonsense words than the current ones.

Current:

New:

So that’s nice. What else?

Paul also announced that PwC US is aligning its organizational structure across three lines of service— Assurance, Tax and Advisory—to better serve client needs, their buying patterns and the market.

Oh! Well that’s interesting. If you don’t know, Paul is taking Tim Ryan’s place as overlord of PwC US when Tim leaves in June.

This is the LinkedIn post, I took a screenshot because LinkedIn hates embeds.

You tried to click play didn’t you. All it is is these faces appearing one-by-one.

Text:

I’ve spent more than half my life at PwC because it’s given me the space and support to grow. It’s part of why I’m so energized about our future and the incredible opportunities ahead. And I’m thrilled to share a few updates that will help #TeamPwC be even more client-centric, tech-powered and agile—ready to take on just about anything, together.

I’d like to introduce our Operating Committee—our incoming leadership team—effective July 1. These leaders are market focused, inspiring and committed to harnessing the amazing talent, capabilities and creativity of this firm to help us as we continue to deliver quality and grow in new ways—as a team and as individuals. You can get to know them here: https://lnkd.in/e5dez-Gy.

We have the right leadership, people and technical capabilities to achieve remarkable things. And we will be relentless in our pursuit of providing quality work across the firm and in serving our clients, the markets and our stakeholders.

It’s never good when they start throwing words like “agile” around. Here’s an example: now-PwC global chairman and former PwC US top dog Bob Moritz telling a story about the importance of being agile:

Heat-tested in Texas. Here’s a great story about the importance of being agile and learning all you can from the opportunities you’re presented with. Early in her career, one of my partners at PwC was assigned to our Houston office. She was asked to look at some R&D credit projects for one of our oil industry clients. She found herself working in a trailer with feeble air conditioning, wearing then-standard formal business attire, in the middle of the Texan summer. She felt — almost literally — like a fish out of water. But the experience turned out to be pivotal for her. She was out in the field — observing refineries, studying plans, learning from the engineers who knew their business best — and she was developing energy industry expertise from the ground up. That project led to another and another, and that former junior staffer now leads our energy practice in the United States.

It was only a few weeks ago Financial Times reported Deloitte will be trimming its five main service lines down to four–audit and assurance; strategy, risk and transactions; technology and transformation; and tax and legal. “In an attempt to eliminate silos, some staff will be transferred to an expanded audit and assurance arm, including those working on environmental, social and governance,” said FT in their piece.

So expect some moving around in the coming months at PwC I guess? And more succinct job titles.

The post PwC Announces It’s ‘Aligning Its Organizational Structure’ and Using Fewer BS Words in Job Titles appeared first on Going Concern.

Here’s LinkedIn’s pitch:

Our 8th annual LinkedIn Top Companies list highlights the 50 best large workplaces to grow your career in the U.S. right now. Fueled by unique LinkedIn data, the methodology analyzes various facets of career progression like promotion rates, skill development and more among employees at each company. You can read more about how we compile the list at the bottom of the article.

This year’s honorees are proving that investment in the employee experience is vital in today’s workplaces. Whether it’s launching upskilling initiatives or offering flexible working arrangements, these are the companies leading the way in not only attracting workers, but retaining them in our ever-changing world of work.

JP Morgan Chase took overall #1 followed by Amazon and Wells Fargo. And then there’s the Big D at #4.

Right after Deloitte in the fifth spot (and missing a logo for some reason) is PwC.

We have to scroll down to #18 before we see another accounting firm and it’s EY.

KPMG shows up at #27.

The only other accounting firm on the list is BDO at 46.

It might be useful to share LinkedIn’s methodology for this particular list. It is, of course, deeply dependent on LinkedIn data.

Our methodology uses LinkedIn data to rank companies based on eight pillars that have been shown to lead to career progression: ability to advance; skills growth; company stability; external opportunity; company affinity; gender diversity; educational background and employee presence in the country. Ability to advance tracks employee promotions within a company and when they move to a new company, based on standardized job titles. Skills growth looks at how employees across the company are gaining skills while employed at the company, using standardized LinkedIn skills. Company stability tracks attrition over the past year, as well as the percentage of employees that stay at the company at least three years. External opportunity looks at Recruiter outreach across employees at the company, signaling demand for workers coming from these companies. Company affinity, which seeks to measure how supportive a company’s culture is, looks at connection volume on LinkedIn among employees, controlled for company size. Gender diversity measures gender parity within a company and its subsidiaries. Educational background examines the variety of educational attainment among employees, from no degree up to Ph.D. levels, reflecting a commitment to recruiting a wide range of professionals. Finally, employee presence in the country looks at the company’s number of employees in the country relative to other companies, as a means of capturing companies that provide a diverse work environment and more opportunities for career advancement and networking.

Peep the bolded part:

To be eligible, companies must have had 5,000 or more global employees with at least 500 in the country as of Dec. 31, 2023. Attrition can be no higher than 10% over the methodology time period, based on LinkedIn data. Similarly, organizations that have had layoffs of 10% or more of their workforce based on corporate announcements or public, reliable sources between Jan. 1, 2023 and the list launch, are not eligible. These decisions are made by the LinkedIn News team based on company statements and/or reputable news outlets. Only parent companies rank on the list; majority-owned subsidiaries and data about those subsidiaries are incorporated into the parent company score. The methodology time frame is Jan. 1, 2023 through Dec. 31, 2023. This analysis represents the world seen through the lens of LinkedIn data, drawn from the anonymized and aggregated profile information of LinkedIn’s members around the world.

The last time we covered Big 4 exits, Wall Street Journal had reported about 307,000 total Big 4 exits in 2023 through October, up 15.4% from the same period the prior year according to data from workplace data outlet Revelio Labs. The Big 4 business model has 15-20% turnover baked in, hence why they’ve been doing layoffs (announced and otherwise) this past year. We don’t have exact figures for each firm however outgoing EY CEO Carmine Di Sibio said last almost a year ago that his firm went from over 20 percent attrition down to 12 “pretty suddenly.”

We’ll assume LinkedIn went off people’s job-switching profile data to determine if a company qualifies for the list with attrition no greater than 10 percent. Because if not, brace yourselves for more layoffs.

The post Three Quarters of Big 4 Firms Made the Top 20 on LinkedIn’s Top Companies 2024 List appeared first on Going Concern.

Getting called out by senators in parliamentary ass-whoopings is one thing…

…losing business is quite another. With consulting practices around the world struggling to drum up business these days, the timing couldn’t be worse. According to an article in Financial Review authored by Beaton Research + Consulting Executive Chairman George Beaton, Big 4 firms in Australia are gonna be in struggle mode for a while.

Public trust in professional services has been trashed. The damage that the big four sustained is substantial.

A study conducted by Beaton Research + Consulting into the brand and reputation of firms in the sector makes this clear. For the past 20 years, we have asked thousands of clients directly for their ratings and opinions on hundreds of firms of all sizes.

This year, for the first time, the big four have fallen out of favour for the majority of government clients. More than half of government client respondents, 57 per cent, said they would not consider using a big four firm for their future needs.

This contrasts with 43 per cent last year, representing a significant 14 percentage point drop.

Most of those same government clients now say they are considering using the next-largest firms for their work. Known as the “next four”, these are BDO, Grant Thornton, Pitcher Partners and RSM.

Imagine losing business to Grant Thornton.

But wait! There’s more!

These results confirm news covered extensively in the press: that federal agencies cut spending with the big four consulting firms. The big four’s federal consultancy work reportedly fell from $36.8 million in the last quarter of 2022 to $21.8 million in the same period last year.

But the reaction is not limited to government clients. Trust in the big four is also waning among small-to-medium enterprise clients and large corporate clients.

Early last year, 54 per cent of smaller clients reported one of the big four as their primary adviser. This has halved in less than a year to just 26 per cent.

We should start seeing these hits to the bottom line reflected in Big 4 financials when they start releasing their numbers later in the year.

PwC Australia reported $3.4 billion ($2.2 billion USD) of total revenue for FY23 and underlying revenue growth of eleven percent but added in its September 2023 revenue announcement that “profit remained flat year-on-year against the backdrop of the challenges faced by the business in the last quarter due to the sharing of confidential Treasury information and past failures in professional, ethical or leadership responsibilities.” Revenue season promises to be interesting this year.

The post PwC Partners Will Be Getting Dirty Looks at the Country Club for the Foreseeable Future appeared first on Going Concern.

The methodology is as follows:

The Vault Accounting 25 is compiled using a weighted formula that reflects the issues accounting professionals care most about, combining quality of life rankings (such as culture, satisfaction, work/life balance, and compensation) with overall prestige.

While PwC’s placement is no surprise, the rest of the list contains a few. The top ten with their 2024 ranking in parentheses. Look at you, EY! They came so close to falling off of the list last year.

1. PwC (1)
2. KPMG (3)
3. EY (25)
4. BDO (4)
5. Plante Moran (7)
6. CohnReznick (9)
7. Baker Tilly (8)
8. RSM (5)
9. Schellman (22)
10. Moss Adams (6)

Where’s Deloitte? NOWHERE TO BE FOUND. Not on the top ten, not on the Vault Accounting 25 at all. The rest of the list, in order:

11. Marcum
12. PKF O’Connor Davies
13. H&CO, LLP
14. Eide Bailly LLP
15. Frank, Rimerman + Co. LLP
16. Grassi
17. Withum
18. KSM (Katz, Sapper & Miller)
19. BPM LLP
20. Whitley Penn
21. Aprio
22. HCVT
23. Akram
24. Cherry Bekaert Advisory, LLC
25. Armanino LLP

The Most Prestigious Accounting Firms list looks more like what we’d expect from a list of accounting firms with swag. As you’ll see from last year’s firm rankings in parenthesis, PwC and Deloitte swapping spots is the only different from the 2024 list.

1. PwC (2)
2. Deloitte (1)
3. EY (unchanged)
4. KPMG (unchanged)
5. Grant Thornton (unchanged)
6. BDO (unchanged)
7. RSM (unchanged)
8. Baker Tilly (unchanged)
9. Crowe (unchanged)
10. CohnReznick (unchanged)

Check out both lists and details on each firm from Vault here: Most Prestigious Accounting Firms and Vault Accounting 25.

The post PwC Is the Best, Prestige-iest Accounting Firm on the Vault Accounting 25 appeared first on Going Concern.

As described in the PCAOB’s orders, from 2017 to 2019, Deloitte Philippines’s audit partners and other personnel engaged in widespread answer sharing – either by providing answers or using answers – or received answers without reporting such sharing in connection with tests for mandatory firm training courses. Baltazar directly and substantially contributed to Deloitte Philippines’s violations. On at least six occasions, Baltazar, in his capacity as the partner responsible for e-learning compliance, shared answers to training assessments with other audit partners at the firm. (Baltazar has since left the firm.)

In his role as National Professional Practice Director, Baltazar was responsible for, among other things, promoting audit quality, facilitating audit consultations, and monitoring and managing the compliance by the firm’s auditors with online training and professional training requirements.

The order against him explains what happened:

During the relevant time period (2017-2019), Respondent recognized that the Firm’s audit partners had fallen behind in their rates of compliance with trainings because their workloads and utilization rates made it difficult for them to keep up with required continuing professional education and trainings. Respondent e-mailed answers to e-learnings to the audit partners and others in the Firm at least six times from 2017 through 2019. For example, on January 4, 2019, Respondent sent an e-mail to the audit partner listserv with the subject “IFRS E – Learnings.” The email included answers to 21 different questions on three different IFRS topics. Respondent explained that those answers would result in a passing rate, but not a score of 100%.

Brilliant actually. The PCAOB did not find this brilliant.

Respondent violated PCAOB Rule 3502 because he knew, or recklessly did not know, that his actions and omissions would directly and substantially contribute to the Firm’s violations described above. As the NPPD, Respondent had responsibility for Firm personnel’s compliance with the Firm’s e-learnings and trainings. When Respondent recognized that Firm personnel’s compliance rates had fallen, he began sharing answers to exams.

As described above, Respondent shared answers with the Firm’s audit partners on at least six occasions from 2017-2019. Additionally, he was aware that others at the Firm were involved in improper answer sharing. Respondent failed to put a stop to or report that misconduct during the relevant period, despite his responsibilities for personnel management and promoting an ethical culture at the Firm.

Instead, as the Firm’s NPPD in charge of Firm training, Respondent created and fostered an environment in which it was acceptable to share answers and use shared answers on e-learning and training tests.

As for the situation at Deloitte Indonesia, says the PCAOB in the press release:

Additionally, from 2021 to 2023, more than 200 Deloitte Indonesia professionals engaged in answer sharing. The firm’s failure to detect and deter improper answer sharing by its personnel occurred despite numerous warnings from Deloitte Global and regional leadership that answer sharing was impermissible.

Legit, they really didn’t give a shit even when Deloitte Global started telling everyone to cool it on the answer sharing. Says the order:

During the relevant time period, large numbers of DT Indonesia personnel were involved in improper answer sharing. Indeed, more than 200 of its personnel, including two partners, participated in instances of improper answer sharing by, among other means, sending emails with answers to training test questions, providing screenshots of training questions and answers, or discussing answers when taking tests in the presence of others.

Despite this widespread answer sharing by the Firm’s personnel, none of those aware of the improper answer sharing timely reported the answer sharing (a) to anyone at the Firm not involved in answer sharing; (b) to anyone within regional leadership or Deloitte Global; or (c) to any relevant regulator. Moreover, the misconduct occurred notwithstanding numerous warnings from Deloitte Global and regional leadership that answer sharing was improper.

Beginning in October 2019 through September 2022, DT Indonesia partners were repeatedly told through a series of calls, townhalls, meetings, emails, and mandatory e-learnings that answer sharing was not acceptable. Despite these warnings, answer sharing at DT Indonesia continued until 2023, when the Firm discovered the misconduct and began an internal investigation.

“Few things erode trust like impaired ethics,” said PCAOB Chair Erica Y. Williams. “To protect investors, the PCAOB will continue to address serious quality control deficiencies at PCAOB-registered firms around the world.”

Yeah, we know. Do you really have nothing better to do?

PCAOB Imposes $2 Million in Fines on Deloitte Indonesia and Deloitte Philippines, Bars Firm Leader After Exam Cheating [PCAOB]

The post We Forgot to Mention Deloitte Got in Trouble For Cheating This Week, Too appeared first on Going Concern.

The section on Generative AI is of particular interest as it covers GenAI application, deployment, and concerns over the next 12-18 months. We have no way of knowing just how many of these CEOs actually know what generative AI is or how it can be used in their business beyond asking ChatGPT for some fun ideas for Employee Appreciation Day though 77 percent of them did say they’re confident leadership has a good understanding of it [X].

In order, the surveyed CEOs said the top challenges in deploying GenAI are:

• Ethical challenges (38%)
• Security and compliance (36%)
• Integration with existing systems and processes (33%)

A bit concerning that only 19 percent of CEOs surveyed said they’re currently using watermarks or disclosures that would let consumers know content is made with the assistance of AI. And that only 37 percent of them say they’ve prioritized data privacy using “robust data anonymization techniques.”

The Talent & Culture section shows that hybrid work rules the day while fully remote models are on the decline. What happened between February/March 2024 and last year that made them pull back on 5 days a week in the office?

Revisiting the 2023 CEO Outlook released last October, 64 percent of CEOs surveyed for that report said they anticipated a full return to office within three years. And 87 percent of them said they were likely to reward employees who make an effort to come into the office with favorable assignments, raises or promotions (hey, we just talked about remote workers getting passed over for promotions and raises yesterday).

Although workplace wellness programs are a joke and scientifically proven to do jack shit for individual employee mental health if the workplace itself is broken, respondents say they’re doing the following to address employee well-being and prevent burnout:

• Implementing more initiatives focused on mental well-being such as digital wellness solutions, mindfulness seminars, resilience workshops and coaching sessions (74%)
• Encouraging employees to use GenAI to automate mundane tasks to better manage their workload and relieve stress (61%)
• Facilitating opportunities for employees to strengthen personal relationships with coworkers, such as employee volunteering and in-person training and development (60%)
• Implementing trainings for managers to more effectively address well-being concerns and burnout among their direct reports (56%)
• Exploring new organization-wide work schedule shifts such as 4-day or 4.5-day workweek (30%)

That’s it. Well, there’s a last section on sustainability and ESG but who cares. Certainly not the CEOs.

KPMG Study: CEOs tackling risks to growth including geopolitics, cyber and structural changes such as tight labor market, new regulations [KPMG]

The post CEOs Feel Good About the Economy and Hybrid Work Is Winning, Says KPMG in This CEO Survey appeared first on Going Concern.

First, the earlier reporting. DutchNews wrote in July 2023:

At least 500 workers at KPMG in the Netherlands have cheated during the compulsory exams which accountants are required to take, the consultancy group has confirmed.

KPMG said it had imposed sanctions on an unknown number of employees, and “a handful” had been fired following an internal investigation into the claims that staff had swapped answers to the tests.

KPMG Nederland director Marc Hogeboom is also stepping down as boss of the accounting arm, but remains an auditor and partner at KPMG. He said in a statement he “should have been more alert to signals” that pointed towards workers sharing their answers.

We brought the situation up again late last month when Mazars’ Dutch arm reported their own “misconduct on exams” in its annual report. If the PCAOB wasn’t interested in digging around already, that certainly would have gotten their attention.

Alas, they had already been on the case. Announced today, the PCAOB has hit both KPMG Netherlands and former Head of Assurance Marc Hogeboom with some hefty fines related to cheating.

Said the PCAOB in a press release:

As described in the PCAOB’s orders, from 2017 to 2022, hundreds of professionals at KPMG Netherlands engaged in improper answer sharing – either by providing access to test questions or answers, or by receiving such access without reporting it – in connection with tests for mandatory firm training courses. These courses related to a variety of topics, including U.S. auditing standards, professional ethics, and independence. The improper answer sharing reached as far as partners and senior firm leaders, including Hogeboom (at the time the firm’s Head of Assurance and a member of the firm’s Management Board). The growth of this widespread answer sharing was enabled by the firm’s failure to take appropriate steps to monitor, investigate, and identify the potential misconduct. For example, starting in June 2020, the firm was aware that (1) answer sharing had occurred at a KPMG service delivery center serving KPMG Netherlands and KPMG LLP (United Kingdom) and (2) the sharing had extended to the U.K. firm’s personnel. Nevertheless, KPMG Netherlands took virtually no steps to investigate potential answer sharing among its personnel until a whistleblower reported such misconduct in July 2022.

During the PCAOB’s investigation, the firm submitted – and failed to correct – multiple inaccurate representations to the PCAOB. In the submissions, the firm claimed that it had no knowledge of answer sharing by its personnel until it received the July 2022 whistleblower report. These submissions, reviewed by the firm’s Management Board and Supervisory Board, were false because members of those two Boards had themselves already engaged in answer sharing misconduct before July 2022.

The above misconduct revealed an inappropriate tone at the top of KPMG Netherlands and a failure by firm leadership to effectively promote an ethical culture among firm personnel with respect to improper answer sharing and monitoring of the firm’s system of quality control.

“The PCAOB will not tolerate cheating nor any other unethical behavior, period,” said PCAOB Chair Erica Y. Williams. “Impaired ethics threaten the investor confidence our system relies on, and the PCAOB will take action to hold firms accountable when they fail to enforce a culture of honesty and integrity. I thank the Dutch Authority for the Financial Markets for its cooperation in the investigation of this matter and applaud the enhanced supervision measures it has taken to hold the firm accountable going forward.”

Don’t say we didn’t warn you.

Look, a historic fine is great and all but the question that always gets asked in the comments every time this issue comes up is does it really matter? There was a big scandal with PwC Canada sharing answers that came to a head in 2020 — staff thought helping each other out on these bullshit training exams was “collaborative culture” — yet while it was happening the firm was getting ZERO deficiencies in its PCAOB inspections. Isn’t that what we want? Isn’t that peak performance?

To be fair, the lying to the PCAOB part is a little out of line.

PCAOB Imposes Record $25 Million Fine on KPMG Netherlands and Bars a Firm Leader After Exam Cheating, Misinforming Investigators [PCAOB]

The post The PCAOB Just Handed Out Its Biggest Fine to Date to Some KPMG Cheaters appeared first on Going Concern.

This year, they only narrowly beat out Deloitte again.

Plante Moran and Deloitte climbed from 16 and 17 (respectively) on last year’s list where they were also close neighbors.

Other accounting firms on the list sorted by descending order with last year’s rank in parentheses are:

• #22: PwC (30)
• #32: Crowe (60)
• #44: RSM (42)
• #54: Ryan (56)
• #64: EY (50)
• #72: KPMG (38)

So Deloitte stayed in the top 20, PwC climbed a few spots up from #30 last year, EY tumbled 14 places to #64 and KPMG…well.

Full list and company profiles here.

The post Mid-Tier Firms Are Kicking Big 4’s Ass on Fortune’s 2024 Best Companies to Work For List appeared first on Going Concern.

Under the “Remuneration” section, the two sections below cover salary satisfaction. The first, how satisfied professionals are with their salaries broken down by type of employer. Those working in government and academia are least satisfied, that is to say a larger proportion of them disagreed with the statement “I am satisfied with the level of pay I receive for the role I perform.” The self-employed and those in the large corporate sector, or what we colloquially call industry, are most satisfied with 41 percent of each group agreeing with the satisfaction statement. Still, the self-employed are the only group where less than half of them reported being unsatisfied with their salaries.

See below:

Another bunch of data conveniently charted out in image form by the ACCA (thank you) provides a breakdown to the above question (if you forgot already it’s “I am satisfied with the level of pay I receive for the role I perform”) by generation. We aren’t surprised the under 43-and-under group are less satisfied than Gen X and Boomers, we are however surprised that Millennials are less satisfied than Gen Z. Maybe because employers bumped salaries slightly when the great accountant shortage panic began and that aligns with a lot of them graduating into the workforce? Feel free to espouse your own theories on that in the comments.

According to the survey, work-life balance is a bigger concern than pay though the two issues are intrinsically tangled up in each other (as the shortage worsens, workloads for those left behind get even heavier).

You know what, let’s throw this one in here too. On the topics of attraction and retention, it appears dissatisfaction with pay is a bigger problem for retention than attraction across all generations.

Check out those Big 4 respondents on the topic of retention:

There’s more worth diving into in the Attract, Engage, Retain report, this’ll do for now.

The post Survey Says: Which Group of Auditors Are Most Satisfied With Their Salaries? appeared first on Going Concern.

FT:

Deloitte has taken on extra office space in central London less than two years after making cutbacks, in an about-turn that indicates staff in professional services are returning to the workplace more regularly.

The Big Four accounting and consulting firm took on about 70,000 sq ft of space near its New Street Square headquarters in February, people familiar with the details told the Financial Times, increasing the size of its central London estate by almost a fifth.

Deloitte sharply reduced its office space because of the pandemic and the shift to working from home, closing two of its buildings in central London in 2021 and 2022. At the time, the firm said the move reflected its “ways of working” and “sustainability objectives”.

In June 2021, Deloitte UK pushed out this press release titled “Deloitte gives its 20,000 people the choice of when and where they work.” It said:

Deloitte’s chief executive, Richard Houston, has today confirmed that all of its UK people will be able to choose when, where and how they work in the future, once it is safe to do so.

Deloitte has long been a champion of agile working, with extended flexible working in place since 2014. While less than half of the firm’s UK workforce worked from home on a regular basis pre-COVID-19, the pandemic has accelerated Deloitte’s hybrid working model. Up to 20,000 people in the UK have worked from home or remotely since March last year.

Richard Houston, senior partner and chief executive, Deloitte, commented: “The impact of the pandemic has profoundly changed our way of life, not least in the way we work. The last year has really shown that one size does not fit all when it comes to balancing work and personal lives. It has also shown that we can trust our people to make the right choice in when, how and where they work.

“Once the Government has lifted all of the COVID-19 restrictions and we’re back up to full office capacity, we will let our people choose where they need to be to do their best work, in balance with their professional and personal responsibilities. I’m not going to announce any set number of days for people to be in the office or in specific locations. That means that our people can choose how often they come to the office, if they choose to do so at all, while focusing on how we can best serve our clients.”

A recent staff survey revealed that 81% of respondents anticipate working from a Deloitte office for up to two days a week in the future. The research also showed that 96% of Deloitte’s people want to have the freedom to choose how flexibly they will work in the future.

In addition, 86% of respondents ranked ‘collaborating with team colleagues’ and ‘interacting with others’ within their top three ways they envisage using the office in the future.

In April 2022, they scored themselves a nice little story in The Times for downsizing their office space in London:

Deloitte does the numbers and makes hybrid working permanent

Working from home is here to stay at Deloitte, which has scaled back its London office space in one of the biggest reductions of its kind since the pandemic.

The accountancy and consulting firm has cut its office space in the capital by more than a third as employees increasingly adopt a hybrid model of working partly in the office and partly from home.

It has abandoned two buildings which had 250,000 sq ft of office space in total, cutting its holdings to just two remaining sites with 485,000 sq ft of space for workers.

And now we’re here. As far as we’re aware, Deloitte UK hasn’t issued an official return-to-office mandate but with all the layoffs over there in the past year, one might be wise to make their presence known in the office if they’re on a team where such a thing matters.

Deloitte reverses Covid cuts by expanding office space in London [Financial Times]

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In that article we focused on the work side of an independent report EY Oceania commissioned itself after a young auditor was found dead at the Sydney office on a Saturday in August 2022. 46% of the 4,500 current and former staff surveyed for the report reported that their health had been negatively affected as a result of long hours and overwork, two in five people were considering quitting, and 31% of people at EY were working 51 or more hours in a week, at least one week out of every four. Worse, approximately one in ten (11%) were working 61 or more hours in a week.

What we breezed right by was this nugget:

• 15% of people have experienced bullying, 10% indicated they had experienced sexual harassment, and 8% of people experienced racism.

Interestingly, 78 percent of staff surveyed said they believed the firm could make meaningful change in relation to sexual harassment, 74 percent in relation to racism, and 70 percent in relation to bullying. Only 31 percent said they were confident EY Oceania could change a culture of long work hours and overwork. The other 69 percent are clearly in denial.

Fast-forwarding to current day. Last month, Stuff of New Zealand wrote about the mysterious departure of EY New Zealand chair, partner, and business development leader Braden Dickson due to a “historical behavioral matter.” What exactly it was was anyone’s guess but Stuff did some digging around. This might offer a clue later:

A couple days after the initial report, Stuff followed up with “Departure of top EY boss exposes concerns over culture.” All of what’s mentioned below will sound familiar to anyone who’s ever done time at a Big 4 firm regardless of continent.

One former employee, who spoke on condition of anonymity because “the accounting world is small in New Zealand”, described sexist and homophobic comments making staff uncomfortable.

“I recall one of the audit partners [who Stuff has chosen not to name] … saying things like ‘nothing worse than a team of females when it’s that time of the month’, or he would joke about someone being gay.

“It doesn’t give you any comfort that you could raise an issue.”

Multiple former staff have described the impact of tolerance of workplace affairs.

“When you’re a 21 or 22-year-old and that stuff is blatantly in your face with no effort to hide it, it creates this atmosphere of ‘anything goes’.”

It would lead to tension between the company’s partners because some disapproved of others’ behaviour.

Multiple former employees have raised concerns about an excessive drinking culture, under which staff would begin drinking at 5pm on a Friday and continue until midnight before often heading into town, and then “drag yourself back in on Saturday or Sunday or possibly both”.

“You’d work long hours, then socialise with workmates, and that was your life,” said one. “People outside the ‘big four’ didn’t understand what was going on.”

The former staff who spoke to Stuff hadn’t heard Braden Dickson left but said she was “not surprised.”

Stuff‘s initial reporting brought more people out of the woodwork, current and former staff who seemed eager but afraid to speak up. They then found out about a senior employee — service line and position not mentioned in the article — who got promoted after a serious sexual harassment complaint against him. “‘Big Four’ accounting firm under fire over sexual harassment” discusses this and many, many more incidents experienced by current and former EY staff. Women, specifically:

Another senior executive who was the subject of at least two separate complaints also continued to be employed, while the women who made the complaints left the firm.

“It sends a pretty clear message that revenue is more important to the partner group than the safety of women,” said one, “and given how recent these examples are, the sincerity of EY’s intention to meaningfully implement the recommendations included in [the review] seems questionable.

“I think the men who behave like this know that they would be more likely to be managed out for not meeting their revenue targets than for sexually harassing a junior employee.”

“‘Big Four’ accounting firm under fire over sexual harassment,” Stuff March 30, 2024

“In order to preserve their own incomes the partners will overlook even the most serious of indiscretions committed by their peers, provided said peers are still bringing significant revenues to the firm,” said another former EY staff who talked to Stuff.

Still another person talked about a partner they said was “a widely known predator but nevertheless a protected species.”

“He is well known to push heavy nights on the drinks and then grope, kiss and make sexual advances and even lick the junior colleagues in his teams — all in front of stunned onlookers who are powerless to intervene and scared into silence.

“Ultimately, all the partners care about is the revenue he brings.”

One woman who also left the firm called making a complaint “scary” and said she had to “sign a piece of paper saying I couldn’t talk about it.”

“The process is slanted in favor of the perpetrator,” said still another ex-EYer who made her own complaint. “They make you feel like a piece of [shit], like you’re doing something to that person that might ruin their career. But there was no consequence for him. The women go through this horrible process and get nothing at the end. Not [in terms of] money, which I couldn’t care less about. Justice, or a sense of relief, or anything.” That might explain why more than nine in ten of people surveyed for the independent culture report agreed that they always feel safe in their workplace (94%) and that people behave in a respectful manner towards others (92%).

There’s more if you choose to read the Stuff piece. They haven’t outright said Dickson departed the firm due to the same behavior mentioned in the article, only opened the floor to a discussion about culture and partners abusing their power to get away with appalling behavior as long as they’re bringing in clients.

The post EY Oceania’s Appalling Culture Is Back in the News With Gruesome New Details appeared first on Going Concern.

Accounting firm PricewaterhouseCoopers has signed a long-term lease for 141,000 square feet in Federal Realty Investment Trust’s Santana Row development, according to a Federal Realty press release.

PwC’s current 15-year lease in downtown San Jose expires in 2025 and the agreement allows the firm to move to One Santana West in 2026.

The total size of One Santana West at 3155 Olsen Dr in San Jose is 395,601 square feet according to a LoopNet listing.

Per TRD, the firm signed a 15-year lease for 209,000 square feet at its current location in 2010 and was occupying 183,000 square feet of it when the building at 488 S. Almaden Boulevard was sold in 2021.

The new spot is distinctly not downtown. It is however a nine minute walk to the Winchester Mystery House. Hope no one brings any spirits back should they visit on their lunch break.

PwC signs 141K sf lease at Santana Row in San Jose [The Real Deal]

The post PwC Signed a 141,000 Sq Ft Lease For a New Office in San Jose appeared first on Going Concern.

“We are very pleased about the planned addition of Carmine to our Board given his demonstrated record of championing innovation, extensive experience advising regulated financial companies, and keen understanding of what it takes for global companies to succeed,” said Alex Chriss, President and CEO, PayPal. “If appointed, Carmine will be helpful in sharing his expertise in driving transformation and profitable growth in markets around the world to help us revolutionize commerce globally.”

We implore you, just one time can you use actual language human beings use in these press releases? Pretty please?

The post PayPal Wants to Snap Up Carmine Di Sibio When He Leaves EY This Summer appeared first on Going Concern.

Fresh from the Public Company Accounting Oversight Board (PCAOB), just now they’ve announced a settled disciplinary order sanctioning PwC for violations of PCAOB quality control standards relating to the maintenance of auditor independence that will cost the firm $2.75 million in penalties. PDF of the order here.

Says the PCAOB:

The PCAOB found that PwC’s quality control policies and procedures were deficient because they did not provide reasonable assurance that the firm’s personnel would timely consult with qualified individuals or refer to authoritative literature or other sources when dealing with certain complex, unusual, or unfamiliar independence issues.

OK so this probably isn’t so bad…

These deficiencies came to light in 2018, when numerous PwC leaders and partners failed to consult with PwC’s Independence Office or conduct other appropriate independence analysis as PwC explored the possibility of terminating its audit relationship with an issuer client to allow for a joint business relationship (JBR) with the client. PwC did not raise the JBR‑related discussions to its Independence Office – or perform an appropriate analysis of PwC’s independence in light of those discussions – until PCAOB investigators raised questions about PwC’s independence from the issuer.

Do you need a TLDR for this?

The PCAOB further found that, in 2018, members of PwC’s Tax group prepared and shared with members of PwC’s Assurance group a “business case” document showing that PwC could generate substantially more revenue from a JBR with the issuer than it was earning as the issuer’s auditor. In response to that business case document and at the instruction of one of PwC’s national leaders for Assurance, two PwC partners – including the engagement partner for the issuer’s then‐ongoing 2018 integrated audit – met with the issuer’s CEO and the issuer’s President in November 2018 and discussed, among other things, business opportunities that PwC and the issuer could pursue in a JBR. Both during and after the meeting, the issuer’s CEO expressed enthusiasm for a JBR with PwC, which the CEO understood might be worth tens of millions of dollars to the issuer.

Shortly after the November meeting, PwC and the issuer began exploring the possibility of transitioning the audit to another auditor. At the same time, however, PwC planned to continue performing the audit of the issuer’s December 31, 2018, financial statements and to also perform the next quarterly review. PwC’s then‐existing independence policies and procedures did not require an Independence Office consultation in these circumstances.

The issue was brought to PwC’s Independence Office only the PCAOB’s Division of Enforcement and Investigations sent PwC a document and information request concerning PwC’s independence from the issuer. At that point, the Independence Office then considered the above circumstances, alongside PwC’s other non‐audit interactions with and involving the issuer and determined that there was a risk that a reasonable investor could conclude that PwC was not independent of the issuer in 2018. Before completing the 2018 audit, PwC was terminated as the issuer’s auditor.

Without or admitting or denying the PCAOB’s findings, PwC consented to the order. They’ve earned themselves a $2.75 million civil money penalty and will have to do the usual performative “remedial undertakings” which are:

• Review and revise or supplement, as necessary, its independence‐related quality control policies and procedures;
• Make certain communications to the firm’s professionals regarding certain independence rules and standards, and related firm quality control policies and procedures; and
• Ensure that all current firm professionals, and all professionals hired in the next five years, complete four additional hours of professional training related to certain independence rules and standards, and related firm quality control policies and procedures.

We’ll dig deeper into the order later.

PCAOB Fines PwC $2.75 Million for Quality Control Violations Relating to Independence [PCAOB]

The post The PCAOB Just Hit PwC With a Massive Independence Violation appeared first on Going Concern.

Prior to the Engagement Management System (EMS) update in November 2016, Deloitte auditors were permitted to manually enter sign-off dates for both audit work and reviews. After the update, now hindered by a software limitation, some auditors got creative and changed the date on their computers to do effectively the same thing for over 930 audit working papers in at least 39 audit engagements. Eventually they got caught when Deloitte ratted themselves out to regulators at CPA Ontario in 2019, leading to a $1.59 million ($1.2 million USD) fine. And some mild embarrassment.

Before bringing the matter to CPA Ontario, Deloitte implemented a software update that prevented anyone from changing the date and time on their computers. After March 2, 2018, anyone trying to do so would get a pop-up that says “you do not have permission to perform this task. Please contact
your computer administrator for help.”

Bringing things back to current day, The Globe and Mail had an update last week on the five partners involved in this backdating saga now that their CPA Ontario hearings are over. G&M specifically called out the fact that CPA Ontario included information on the partners’ performance ratings in each of their orders which is hilarious. Let’s take a look, shall we? We’ll include how many workpapers each partner personally backdated so we can keep score.

Nancy Ewings, with Deloitte since 1995, was the deputy leader of its private audit practice for Ontario at the time and remains a partner today.

The regulator says Deloitte lowered her quality rating for the 2019 fiscal year – a performance metric used in part to determine incentive pay – to “Meets Expectations” from “Exceeds Expectations,” resulting in a reduction of $56,000.

Workpapers backdated: Unknown. According to CPA Ontario, Ms. Ewings could not recall which working papers or engagements were impacted and Deloitte did not provide CPA Ontario with information sufficient to specifically identify the impacted working papers and audits. She served as lead engagement partner on 80 audits during the time period in question.

Still at Deloitte: Yes.

CPA Ontario settlement agreement [PDF]

Steven Lawrenson, with Deloitte since 1991, leads its Southwestern Ontario public-company audit practice.

CPA Ontario says Deloitte lowered his quality rating for the 2018 fiscal year to “Improvement Required” from “Meets Expectations,” resulting in a pay reduction of $65,750.

Workpapers backdated: 241

Still at Deloitte: Yes.

CPA Ontario settlement agreement [PDF]

Stacy Levac, with Deloitte since 2016, worked in audit in the Ottawa office exclusively for privately owned companies.

Deloitte lowered his quality rating for the 2019 fiscal year to “Improvement Required” from “Meets Expectations,” eliminated his incentive compensation and reduced a discretionary bonus by $10,000.

Workpapers backdated: 199

Still at Deloitte: No.

Ratan Ralliaram, with Deloitte since 1993, was the team leader for the GTA audit financial services group from 2017 to 2019.

CPA Ontario says Deloitte lowered his quality rating for the 2018 fiscal year to “Improvement Required” from “Meets Expectations,” resulting in a pay reduction of $52,600.

CPA Ontario settlement agreement [PDF]

Workpapers backdated: 268+3. He told two auditors underneath him to backdate three workpapers on top of the 268 he backdated personally.

Still at Deloitte: Yes.

Mervyn Ramos, with Deloitte since 2002, had been a lead engagement and EQCR partner and worked for clients in the financial services industry.

CPA Ontario says Deloitte lowered his quality rating for the 2018 fiscal year to “Meets Most Expectations” from “Meets Expectations.”

Workpapers backdated: 41

Still at Deloitte: No.

CPA Ontario settlement agreement [PDF]

Earlier: Deloitte Auditors Got Caught Changing Their Computer Clocks to Backdate Workpapers

The post Deloitte Partners Tragically Hit With “Improvement Required” Performance Ratings For Backdating Workpapers appeared first on Going Concern.

In his new role, Smith will be responsible for leading 14,000 people in FSO, almost six times as many people as he’s responsible for herding now as managing partner of tax.

The press release is the usual pap.

“I am proud to announce Shawn as my successor in FSO. Shawn is a highly seasoned leader with deep financial services market expertise,” Truncale said. “His innovative thinking and focus on the future, passion for clients, and commitment to next-gen talent development make him a strong leader who will continue to build on the strength and success of EY and FSO.”

“Now more than ever, financial services companies need a trusted partner to assist them in navigating unprecedented challenges and opportunities. From building consumer trust, making strategic investments in new technology like AI, to upskilling workforces and creating a more inclusive industry, FSO is providing the strategic council that helps businesses and economies all over the world prosper,” Smith is quoted as saying even though no one actually talks like this. “I am honored to be stepping into the role of Americas FSO Leader and excited to work with this exceptional team as we partner with our clients in defining and achieving their ambitions.”

EY names Shawn Smith as Americas FSO Leader [EY]

The post EY Taps a Loyal Soldier For the Next FSO Leader appeared first on Going Concern.

FT:

Under the plan, Deloitte’s main business units will be cut to four — audit and assurance; strategy, risk and transactions; technology and transformation; and tax and legal — from the five the firm has had since 2014.

The reorganisation will reduce costs across the firm, said one person familiar with the plan, but added that a figure had not yet been put on the savings.

Deloitte’s global chief executive Joe Ucuzoglu is spearheading the shake-up that will take a year to implement across the more than 150 countries the firm operates in.

In an email sent to Deloitte’s partners on Monday, Ucuzoglu said the plan would reduce the firm’s “complexity” and “free up” more of them to work with clients rather than manage staff internally. Deloitte employs about 455,000 people globally.

Sounds like some delayering will be going down.

From what FT was able to glean from the email sent to partners, assurance will remain as it is; consulting, financial advisory, and risk advisory will be condensed into two new units — strategy, risk & transactions (which includes M&A advisory), and technology & transformation. Tech and transformation will include engineering, AI, data, and cyber.

The important bit staff should know:

In an attempt to eliminate silos, some staff will be transferred to an expanded audit and assurance arm, including those working on environmental, social and governance.

Tax and legal will remain a standalone business within the new structure as Deloitte tries to wring benefits from the decision to keep its audit and consulting businesses together.

If the “Deloitte is restructuring” story sounds familiar, it should. Deloitte UK cut about 100 people from its financial advisory business — including partners — last month for the same nebulous reason. “The Big Four firm is planning to restructure its corporate finance advisory business,” wrote FT at the time.

It popped up before that in September when Deloitte laid off about 800 people. Said Deloitte UK CEO Richard Houston in a statement last September, “Today we announced some targeted restructuring across our businesses, which may — subject to consultation — put some roles at risk of redundancy. This follows a slowdown in growth, which, combined with the ongoing economic uncertainty, means we have to consider the shape of our business.”

Deloitte bragged last year they were using AI “to evaluate existing staffers’ skills and map out plans that would shift employees away from quieter parts of the business and into roles that are more in demand” so perhaps a mass restructuring is just that on a much bigger scale. We’ll have to wait and see.

The post Guess the AI Told Deloitte to Restructure Its Entire Business appeared first on Going Concern.

Today’s lucky contestants are CHOI Chung Chuen (“Choi”), MA Hong Chao (“Ma”), and DONG Chang Ling (“Dong”), all partners of mainland China-based KPMG Huazhen LLP.

The three were accused of violating PCAOB standards in connection with the firm’s audit of the 2017 financial statements of Tarena International, Inc. (n/k/a TCTM Kids IT Education Inc.), a mainland China-based education service provider listed in the United States. In 2019, Tarena restated its 2017 financial statements for, among other things, intentional revenue inflation and improper charges against accounts receivable.

Tarena’s audit committee opened an independent investigation in April 2019 and retained Kirkland & Ellis International LLP as independent legal counsel to advise the committee. K&E was assisted by Deloitte & Touche Financial Advisory Services as forensic accounting expert.

That investigation revealed quite a bit:

• Revenue Inaccuracies: The Audit Committee’s independent review found that the Company’s reported revenues for fiscal years 2014, 2015, 2016 and 2017 and previously announced unaudited revenues for each quarter of and full year 2018 were not accurate. Factors contributing to the misstatement of revenue included intentional revenue inflation, inaccurate student account, status and loan data recorded in the company’s customer relationship management (CRM) system, premature recognition of revenue from certain students, and inaccurate accounting treatment of tuition refunds.

• Expense Inaccuracies and Irregularities: The audit committee discovered instances of improper charges against accounts receivable and/or bad debts through payment to third parties, as well as guarantee payments to certain financial institutions or peer-to-peer financial tools for certain overdue student loans. The audit committee also identified certain expenses that were not supported by appropriate documentation and indications that funds or other benefits were provided to third parties contrary to company policy.

• Conflicts of Interest and Related Party Transactions: The audit committee found evidence that the company engaged in business transactions with organizations owned, invested in or controlled by company employees or their family members which in some instances were not properly disclosed by the company.

• Interference With External Audit Process: It was found that certain employees interfered with the external audit of the company’s financial statements for certain periods.

Back to the PCAOB order against Choi, Ma, and Dong. Specifically, the PCAOB found that Choi and Ma, the engagement partner and a second partner on the 2017 audit, respectively, failed to obtain sufficient appropriate audit evidence to support Tarena’s reported revenue. In evaluating Tarena’s revenue, Choi and Ma planned to rely on the company’s internal controls, including information technology-related controls. However, after learning of numerous unremediated deficiencies in Tarena’s IT Controls, Choi and Ma improperly continued to rely on those controls to support their audit conclusions as if those controls were effective.

The PCAOB also found that Choi and Ma failed to exercise due care and professional skepticism and failed to obtain sufficient appropriate audit evidence to support Tarena’s net accounts receivable. Specifically, they did not appropriately evaluate the reasonableness of Tarena’s allowance for doubtful accounts. Choi and Ma did not obtain an adequate understanding of how management developed the estimate, did not appropriately evaluate its reasonableness, and did not adequately consider evidence indicating that the estimate might not be reasonable.

Finally, the PCAOB found that Dong, the partner with overall responsibility for the involvement of the Firm’s IT professionals in the Tarena audit, failed to sufficiently supervise those IT professionals. As a result, Dong failed to identify several deficiencies in the IT audit procedures.

Without admitting or denying the findings, the respondents consented to the PCAOB order that includes censure, civil money penalties in the amounts of $75,000 on Choi, $50,000 on Ma, and $25,000 on Dong, and the usual stuff like Choi and Ma being barred for at least a year and continuing professional education for all involved.

Earlier settled enforcements with China firms are below. Two were for violating PCAOB quality control standards related to integrity and personnel management (they were sharing exam answers), the third was more serious with issuing a false audit report, failing to maintain independence from their issuer client, and improperly adopting the work of another accounting firm as their own among the violations.

PDF alert

• PricewaterhouseCoopers Zhong Tian, LLP (“PwC China”)
• Hong Kong-based PricewaterhouseCoopers (“PwC Hong Kong”)
• Shandong Haoxin Certified Public Accountants Co., Ltd. (“Haoxin”)

Article:

PCAOB Sanctions Three Partners of KPMG China for Violations of Audit Standards [PCAOB]

The post The PCAOB Racks Up Its Fourth Enforcement Against a Chinese Affiliate With This KPMG China Order appeared first on Going Concern.

I mean…phone it in hard enough and you should be good right?

The post How to Get Laid Off? appeared first on Going Concern.

It’s been more than a year since Australian Financial Review blew the PwC Australia tax scandal wide open and it’s been nothing but migraines for PwC leadership (and their cousins at other Big 4 firms also subject to relentless grilling by Aussie senators) since. Unfortunately the pain isn’t limited to the handful of partners who conspired to generate billable hours from confidential government tax information but for staff, too. Perhaps it’s a small blessing to get culled from the current shit show, this thing ain’t going away.

AFR reports on the latest round of “cost-cutting” at PwC:

Embattled professional services firm PwC Australia will swing the axe in a second round of major job cuts in as many years, with 329 staff and up to 37 partners to be forced out.

The job cuts represent about 5 per cent of the firm’s 7000-strong staff and are being done as part of a broader restructure aimed at cutting $100 million in ongoing costs amid a slow consulting market. The partner cuts also represent about 5 per cent of the more than 750 partners at the firm.

Partners were briefed on the closely-held plans, known internally as Project Maple, in a partner webcast held at 5pm on Tuesday. Staff were informed on Wednesday.

As part of the restructure back office and other support functions that have been split between the firm’s three divisions – consulting, assurance and financial advisory – will be centralised. The aim is to create more oversight of the firm’s operations and simplify the business.

Many of the 329 staff are redundant back office folks and those in consulting though losses will be spread to other service lines as well. On top of that, up to 37 partners will be forced into early retirement between now and the end of the year.

New partner promotions are back on the menu this year after the firm skipped last year because of that whole messy tax scandal thing.

PwC Australia already cut four percent of the workforce in November. They also sold off the poisoned government consulting business tied to the scandal for a buck in June. Do Australians call a dollar a buck? Probably not. Oh look at that, they do. Anyway, that works out to .66 cents (.67 at the time) in our measure of debts public and private. That transaction was supposed to save the 1,500 jobs tied to that practice however 78 of them ended up being lost at completion of the sale.

Our condolences to anyone caught up in this latest round of cuts. We promise there are better days ahead. Well, maybe not for PwC leadership any time soon.

The post Formerly Prestigious Firm Fires 327 People and Three Dozen Partners After Genius Money-Making Scheme Backfires appeared first on Going Concern.

Thankfully people with big mouths regularly speak to Financial Times which is how we now know about a survey in EY’s strategy and transactions business that accuses leadership of being as transparent as a lead wall. Staff still around after the last round of cuts used words like “shocked,” “defeated,” and “insecure” to describe how they feel after watching their colleagues get culled like unnamed tributes from a distant district.

FT:

Staff in EY’s UK deals business have hit out at the company’s management for the way recent job cuts were handled, saying “trust is broken” and that employees feel “deflated” as sales in the department slump.

In a survey, employees at a division of EY’s strategy and transactions business criticised bosses for a lack of transparency and for allegedly misleading comments about a recent redundancy round dubbed “Project Century”, according to an internal presentation seen by the Financial Times.

Some staff accused managers of using messaging that lacked transparency, saying they were told that jobs were not “currently” at risk before the cuts were announced.

One respondent said: “Trust is broken and as soon as the market improves I would [sic] jump ship.” Another said: “Still in shock, lack of transparency resulting in [a] lack of trust, the floor looks disconnected.”

Net revenues for deals are down about seven percent between the beginning of EY’s fiscal year in July and this past January compared to the year prior and gross margins have dropped almost 14 percent per FT per what they saw in the above-mentioned presentation. In the 12 months to EY’s FY23 year end in June 2023, deals revenues were up eight percent to approximately £635 million (~$811 million USD). Worldwide, EY’s consulting business saw 21.6% growth between 2022 and 2023 for $16.1 billion of the $45.5 billion global revenue take.

“This was an informal poll completed by 70 people, or 0.3 per cent of our UK workforce,” EY told FT. Oh, well, in that case NBD then.

We included a link to the FT story in the Monday Morning Accounting News Brief yesterday and received this note from a reader (hey, reader):

I was part of EY government practice till they laid me off last September because my EY partner lost the federal client. I’ve heard rumors about other EY government contracts. Low morale at EY is far beyond the EY strategy practice.

When PwC Canada sneakily laid off several dozen people last year we heard similar sentiment from an employee who watched their colleagues quietly disappear. “A coworker I knew very well was terminated from his position recently. However, there was no communication from the company regarding the situation or the rationale behind the let-go,” they wrote. “The rest of the team continued to act as if everything was normal. This left us uneasy, unsure of who might be affected next. It felt as though we were regarded as disposable resources, easily discarded during economic downturns.

“I must express that the Canadian PwC leadership lacks empathy and transparency in handling layoffs, especially when compared to many other prominent companies in Canada.”

The job market may suck right now and consultants may be reluctant to quit because of it but people remember being treated like this when things are bad.

The post It Just So Happens Firing People Isn’t Good For Morale appeared first on Going Concern.