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.

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.

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.

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.

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.

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.

“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.

“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.

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.

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.

View this post on Instagram

A post shared by TeamNL Turnen (@teamnlturnen)

View this post on Instagram

A post shared by Frank Rijken (@frank.rijken)

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.

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.

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.

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]

The post PwC Forces People Out and Then Tells Them to Fib in Their Farewell Emails appeared first on Going Concern.

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]

The post At the Forefront of Billing for AI, PwC Gets in Bed with OpenAI 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

On the night of February 25, 2017, PwC partner Brian Cullinan — who could have had a promising career as a Matt Damon stunt double — probably went to bed filled with excitement for the evening to come, his black tie penguin suit neatly laid out for the big event. As one of the two partners whose job it was to make sure there are no snafus at the year’s Oscar awards, he was supposed hand the all-important Best Picture envelope to presenter Warren Beatty at the 89th Academy Awards on February 26, 2017.

Little did he know when he put on his snazzy tuxedo that night he was about to make the biggest mistake of his career. And he did it in front of 33 million people.

For the first time in Oscars history, which goes back to 1929, the wrong movie was announced as Best Picture because Cullinan handed over the wrong envelope. Imagine you’re on the La La Land team at this moment. Imagine you’re on the Moonlight team. Imagine you’re in the room at all.

Oh God it just keeps going . I forgot how hard this was to watch. Look at him checking the envelope in a panic at 2:41.

A post in r/popculturechat today included this incredible collage of reactions:

Asked about his much-memed reaction to the error, 2017 Best Actor winner and La La Land actor Ryan Gosling said, “I was watching people start to have this panicked reaction in the crowd. Guys were coming on with headsets and I felt like someone had been hurt. I thought there was some kind of medical situation, and I had this worst-case scenario playing out in my head. And then I just heard Moonlight won and I was so relieved that I started laughing.”

7 years since the oscars “envelopegate”, when ‘la la land’ was mistakenly announced as the best picture
byu/vintageseashell inpopculturechat

In response to the embarrassing and very public mistake, PwC rushed out a statement to Twitter at 10 pm that night:

As you can imagine, social media reaction to the snafu was swift. And brutal.

"If they were my accountant, I would fire them." — Les Moonves on @PwC and Oscar flub pic.twitter.com/ZteOctGxHf

— CBS Mornings (@CBSMornings) February 27, 2017

Never forget Emma Stone's reaction to #Envelopegate at the 2017 #Oscars pic.twitter.com/QYYOBYZiKq

— Variety (@Variety) February 23, 2019

We love this clever display of #envelopegate from the #plattevillelibrary! Clever and fun!!! #moonlight #lalaland #oops pic.twitter.com/7Jf0dlvnW5

— BNCliftonCommons (@BNCliftonCommon) March 1, 2017

Greg Kyte drew a comic:

Fortune pushed out an article titled 5 PwC Scandals Far Worse than Oscar Envelopegate Mix Up and of course we at Going Concern squealed in delight at having something so ridiculous to make fun of for a while.

Immediately following the mistake, many observers said Cullinan was too busy tweeting about the show to pay full attention to his one job. A tweet he’d sent of Emma Stone backstage just before the Best Picture screw-up was quickly deleted, perhaps to hide the evidence that he was tweeting when he was supposed to be not fucking up the Oscars.

We managed to archive the tweet here. “Looks like you can sell your tuxedo to someone at E&Y,” replied one person to the tweet before it was deleted. “You should have been watching the envelopes instead of the ladies,” said another.

Making matters worse, as hard as it is to imagine this being any worse than it already was, Huffington Post ran a Huffington puff piece just days before: What Would Happen If A Presenter Announced The Wrong Winner At The Oscars?

The universe has a sick sense of humor.

PwC has protocol should such a glitch occur. Heading into Oscar night, only two people know the winners list: Brian Cullinan and Martha Ruiz, who supervise the counting procedures. They’re the briefcase holders who walk the red carpet every year and often appear at some point during the show.

The tally involves enough “redundancies” to ensure accuracy, as does the stuffing of the envelopes. “It’s him checking me and me checking him, and we do it multiple times against each other to make sure that when we leave and are ultimately handing the envelopes to someone, we’re very confident they’re getting the right envelopes and the contents in them are accurate,” Ruiz said.

HuffPo could have stopped there but they went even deeper into the fail-safes meant to prevent what happened in 2017 from happening:

Throughout the telecast, Cullinan and Ruiz are stationed on opposite sides backstage. The duo will have memorized the winners, thereby preventing the need to list them on any documentation that could land in the wrong hands. As the night progresses, Cullinan and Ruiz ensure every category’s presentation is factual. Should a presenter declare a false winner for any reason, they are prepared to tell the nearest stage manager, who will immediately alert the show’s producers.

Cullinan and Ruiz, who spoke to The Huffington Post last week, say the exact procedure is unknown because no mistake of that kind has been made in the Oscars’ 88-year history.

“We would make sure that the correct person was known very quickly,” Cullinan said. “Whether that entails stopping the show, us walking onstage, us signaling to the stage manager — that’s really a game-time decision, if something like that were to happen. Again, it’s so unlikely.”

“He feels very, very terrible and horrible. He is very upset about this mistake,” PwC’s Tim Ryan told Variety in a post-Envelopegate interview. “While I am concerned I hope we will be judged on how quickly we reacted and owned up to the issue.”

Wrote The Hollywood Reporter about the fallout and the Academy’s discussions behind the scenes:

In an email to Academy members Wednesday morning, Boone Isaacs summed up the discussions that the Academy has been having with PwC since Oscar night. “Heading into our 84th year working with PwC, a partnership that is important to the Academy, we’ve been unsparing in our assessment that the mistake made by representatives of the firm was unacceptable.” She went on to say that the Academy has been reviewing all aspects of its relationship with PwC, and after PwC presented revised protocols and controls, “the board has decided to continue working with PwC.”

Not all board members felt an apology was sufficient, with some growing heated about the indefensible nature of the blunder that has caused their organization so much embarrassment. Academy CEO Dawn Hudson informed the board that she had become aware, before the 2017 show, that Cullinan had used his smartphone and social media while working on past Oscars ceremonies, and had explicitly instructed him not to do so this year; he disobeyed her, ostensibly causing him to be distracted while performing his duties near the end of the ceremony.

It also was revealed that Cullinan, a Matt Damon look-alike who clearly relished the media spotlight since becoming a “balloting leader” in 2014, had thrown a party the night before the Oscars and frequently boasted about knowing the winners — a far cry from the buttoned-up behavior that the Academy had come to expect from its accountants.

In the end, PwC was able to keep the Oscars gig they’ve held since the 1930s and eventually the social media mocking died down. Even more fail-safes were introduced to prevent this from happening again, including a third PwCer to oversee the envelopes, and of course the Oscars duo of Brian Cullinan and Martha Ruiz were taken off the client (think they got put on a PIP too?). The Academy doesn’t seem to hold a grudge because they let PwC prepare their taxes too (see: their most recent Form 990 [PDF]).

Interestingly, Oscars viewership peaked in 2017 (32.9 million). Viewership has steadily declined since, from 26.5 million in 2018 to just 18.7 million in 2023.

But anyway. PwC owned the mistake, kicked the people who made it off the engagement, managed to keep the client, and has gotten the job done since so no harm, no foul. Well, maybe a little friendly ribbing and rehashing of old shit by petty accounting blogs. And Google autocomplete suggesting “mistake” when anyone types in “Oscars 2017.”

Earlier:

• And the Award For Worst Oscars Gaffe Goes To… PwC (Feb. 27, 2017)
• Here Are Some of the Best Tweets Roasting PwC for #EnvelopeGate (Feb. 27, 2017)
• PwC’s Recruiting Will Take a Hit Over the Oscars Debacle (March 1, 2017)
• PwC Keeps the Oscars Gig (March 29, 2017)
• PwC Not Talking Up Its Role in the Academy Awards This Year, Obviously (Feb. 1, 2018)
• #Envelopegate Redux: PwC Failed to Predict the Worst-Case Scenario (March 1, 2018)

The post PwC Celebrates Seven Consecutive Years of Not Screwing Up the Oscars appeared first on Going Concern.

Neil Dhar, who had been considered a frontrunner to replace Tim Ryan as US senior partner, was removed as a candidate in December and dropped from his role as co-leader of the US consulting business, said people familiar with the matter.

Two allies — John Garvey, PwC’s global financial services leader, and Julien Courbe, global chief client officer — had their management roles taken away at the same time, according to internal communications described to the Financial Times. Garvey announced his retirement last week.

¡Escandalo!

Their violations aren’t described in graphic detail by FT (thus robbing us of what could be some deliciously messy gossip) but the article does say:

PwC’s US election rules set limits on using partner meetings and electronic communications to campaign so that the race would not distract from the normal operations of the business.

Knock yourself out imagining what they did outside of the allowed campaigning. I’m leaning FONV Vault 11 type slander followed by threats of sacrifice.

@lore_tours Vault 11 had a pretty horrible experiment conducted on its inhabitants… #falloutlore #fallout #falloutnewvegas #videogames #fypシ #fyp #foryou #blowthisup #foryoupage #fallouttok #falloutvaults ♬ original sound – Lore Tours

When Bloomberg Tax reported the potential successors to Tim Ryan in January Neil Dhar didn’t make the list which makes sense if he got himself disqualified in December:

Kathryn Kaminsky, who co-leads the firm’s trust solutions practice; Jenny Koehler, PwC’s strategic growth and business development leader; and Paul Griggs, US markets leader, are currently the finalists for the role, according to multiple sources familiar with the nominating committee’s deliberations.

Last time we linked the above article PwC sent us both an urgent email and a Twitter DM to request a correction of the finalists’ titles so let’s preemptively do so:

Kathryn Kaminsky, US Trust Solutions Co-Leader, Jenny Koehler, Strategic growth and business development leader, Paul Griggs, US Markets and sponsor of My+ people strategy.

Paul Griggs ultimately came out on top.

“When concerns about our election were raised in November, consistent with our speak-up culture, those concerns were investigated objectively, our governance bodies responded and took prompt and appropriate action,” PwC US governance committee chair Ellen Walsh was quoted as saying. “The governance process worked as designed.”

Dhar appeared in a Forbes piece last year entitled “PwC Vice Chairman Offers Career Advice From His 30 Years Of Experience” in which he was asked what’s the secret sauce to staying in the same spot for three decades. He said:

Oh yeah, I remember that guy. Well, sucks for him I guess.

PwC strips partners of leadership roles over election rule breaches [Financial Times]

The post The Race to Replace Tim Ryan at PwC Unexpectedly Turned Into Game of Thrones appeared first on Going Concern.

On its website, Nashville Yards is described as “a 19-acre mixed-use development marked by thoughtful design, a layered environment, and a stream of pedestrian pathways, open green spaces, and plazas. Infused with energy and enlivened by top-tier tenants, Nashville Yards evokes a next-generation sense of place with Class A+ office, retail, entertainment, hospitality, and residential towers in one authentic, irreplaceable community.”

The renders are incredible. It’s like they photoshopped in every single person who lives in Nashville.

“The brand-new office will reflect the firm’s updated ways of working and put our people, clients and community experience first. In the past few years, PwC Nashville has nearly doubled our headcount, which sparked the need to move and assess how we use space,” said a PwC spokesperson to the Business Journal.

It’s been ten years since PwC signed a 10-year lease for a little more than 10,000 square feet at Pinnacle at Symphony Place. The firm will be taking the entire 19th floor at the new space in Nashville Yards and is expected to start moving in next year after the development is completed.

PricewaterhouseCoopers nearly triples local footprint in move to Nashville Yards [Nashville Business Journal]

The post PwC’s Moving to a New Office in Nashville That’s Three Times Bigger Than the Old One appeared first on Going Concern.

Ad Age reported earlier this month that PwC has appointed Interpublic Group of Cos.’ McCann — we’ll just call them McCann — as its global creative agency per a memo someone slipped Ad Age‘s way. They said:

Multiple people close to the situation confirmed the appointment. McCann declined to comment and referred calls to PwC, which declined to comment.

It is unclear if PwC previously had a global creative agency lead.

We’ve got you, Ad Age reporter who isn’t fully caught up on the Big 4 professional services firm design lore.

In 2010, PwC underwent an ambitious rebranding (a story we managed to break because we enjoy ruining big reveals) that ditched the old “graphic designer driving down pothole-filled road in a car with busted suspension when they created this” PricewaterhouseCoopers branding and replaced it with the autumnal logo and recognizable color palette the firm uses to this day.

The lowercase ITC Charter Black name was intended to lend a more “human” look as capital letters would be “too authoritative.” And the flower — which I always assumed was a butterfly? — was intentionally given a pixelated look because 2010 graphic capabilities across various systems were spotty at best.

The rebranding was the work of branding powerhouse Wolff Olins and eight years in the making by the time it became official on October 4, 2010.

Not everyone was happy when the new logo debuted. Actually, a lot of people weren’t. Like this person who CC’d us on the email he sent directly to then-PwC US Chairman Bob Moritz lambasting PwC’s child-like and unprofessional new logo:

To be perfectly honest, I’m not a fan of the new branding. In your email you wrote “…we are altering what we believe is an outdated visual identity to better express the kind of vibrant and relationship-based firm we have evolved into.” I find it ironic that you referred to our former visual identity as outdated when our new brand looks like a throwback – a 70s color scheme meets an IT startup.

I completely agree with the comments on the website where the brand is repeatedly referred to as child-like and unprofessional. I feel like the explanation for the symbol is also very complex. The *connectedthinking brand was simple and easy to understand. With the new symbol, everything has a meaning, from the colors to the solid blocks to the transparent blocks. A symbol should be fairly self explanatory – this one requires too much explanation.

I love the fact that the company has been focusing more on changing behaviors and placing a greater emphasis on building relationships. However, I fail to see where a new brand would affect this. Colors and symbols don’t represent PwC, the staff does. In one of the online discussions it was pointed out that following a salary freeze one year and layoffs the following year, it almost seems foolish to spend so much money to “reinvent” ourselves. To quote a wise PwC employee, “A new brand isn’t going to win business, motivated people will.” I find it hard to believe that this new, colorful symbol will be the motivation that people need to help expand our business and improve relationships with clients. A better way to motivate the staff would be more incentives – bonuses, rewards, raises – positive reinforcement. Pavlov was definitely on to something with the concept. Interactive gallery stations complete with iPads to show off the brand? Activities revolving around the launch of this new brand? Is this really the best method of spending funds?

BoMo must have gotten several of these emails because he sent out a FAQ to all employees shortly before the new logo dropped for real:

By now you’ve likely checked out the new PwC brand. Not surprisingly, I’ve gotten strong feedback from around the firm. Many love it. Some don’t. Few are neutral. With a firm of 30,000 smart people, there are going to be lots of opinions…and that’s okay. I ask that you don’t get caught up in the colors and logo; these changes to our visual identity are simply what we think reflects the evolution that has taken place within our firm as we continue to build a relationship-based, value-driven culture.

You know this whole thing had to be incredibly controversial to inspire a bunch of accountants to get pressed about some pictures to the point they were writing strongly worded letters to top leadership about it.

Then there was the issue of destroying literal tons of letterhead and business cards to make way for new ones. At the time, PwC had around 236,000 employees in 157 countries. Of course not all of them had a large cache of PricewaterhouseCoopers business cards, even back then, but still. This was right around the time Big 4 firms were starting to pretend they cared about the environment.

There will be some costs associated with the change. In the US, they will include the cost of building signage and consumable items such as stationery, business cards and printed materials. Overall, this spend is minimal in relation to our size and is certainly not significant to our annual operating budget. If we treat the brand re-launch as an important opportunity to engage with our clients and each other–to discuss how together we will improve relationships and create value–the money we spend on the launch will be paid back many times over.

You have to remember this happened in 2010, about a year after the U.S. National Bureau of Economic Research declared the Great Recession over. So that was another concern.

With the economy just climbing out of a recession, why are we spending money on this change now?
A: Timing was clearly a consideration. We have set ambitious goals for our network of firms–and we are counting on our brand to work harder for us as we distinguish ourselves from our competitors. There will never be a better time to begin the transition to our new brand, and by starting now, we will be well-positioned as the economy improves.

OK that didn’t really answer the question. And the orange-sorta red-purple color scheme intended to improve client relationships, generate value, and other such corporate fart-huffing doesn’t seem to be helping to generate business in the current day deal slowdown.

Ad Age said McCann will be launching a creative platform for PwC in collaboration with “brand-led business transformation company” FutureBrand later this year. FutureBrand are the ones who gave a redesigned Nesquik rabbit to the world (along with adding unnecessary jizz milk squirts to the Nesquik name) so we’re looking forward to seeing what unnecessary 3D Blender animations they bring to the traditionally 2D world of professional services.

The post Is PwC Cooking Up Another Big Rebranding? appeared first on Going Concern.

A recent FT piece says almost 100 baby consultants will not be getting the promotion they expected in July and will instead have to wait until January 2025.

PwC is forcing some junior consultants in the UK to spend an extra six months on its graduate scheme because there is not enough work to promote them.

Staff were told that the decision was taken because of a reduction in business demand, challenging market conditions and headcount pressures facing the firm.

The delay affects those who joined in fall of 2022. Specifically the batch who started in October and November of that year, the group that started in September are eligible for promotion. This promotion would of course mean better pay.

“None of us can understand the logic they’ve used to choose September grads over us,” said one affected person to FT. “They might as well have picked our names out of a hat.”

“Partners will purport to care about your development as a graduate but in reality that’s far from the truth. They only care until it affects their pockets.”

In its FY23 financial results, PwC UK revenue was up 16% to £5.8 billion ($7.3 billion USD), with increases across all business lines. Consulting revenue was up 30%, down a couple points from 33% in FY22. Partners at PwC UK took home about £906,000, down from the £1 million they took home the year prior that was partially boosted by the sale of PwC’s Global Mobility Tax and Immigration Services business to private equity firm Clayton, Dubilier & Rice for $2.2 billion (£1.83 billion).

In June of last year, PwC UK told its 25,000 people to expect smaller raises and bonuses, possibly pay freezes, because the market is so darn “challenging.”

PwC delays graduate scheme promotions as client demand slows [Financial Times]

The post PwC UK Partners Teach Young Hires an Important Lesson: “We Don’t Care About You” appeared first on Going Concern.

Reported Sky News:

Sky News has learnt that the world’s biggest accountancy firm has initiated the process through which its supervisory board – consisting of PwC partners – will oversee the installation of a successor to Kevin Ellis.

The firing of the starting-gun on the process to fill arguably the most prestigious job in British professional services has ignited internal speculation about the identity of Mr Ellis’s replacement.

While a shortlist will not be identified until April, when the election of a new UK chair will also take place, insiders have pointed towards several female partners as credible contenders.

Isn’t Deloitte the biggest?

Over the past few years Ellis has shown up in these pages talking about how the firm is trying to get people back into the office. See:

• PwC Chair Basically Threatens AI Will Replace You If You Don’t Come Into the Office
• Old Guy at PwC Wants Young People In the Office Because Something Something AI

Would be pretty funny if the firm replaced him with AI.

He was elected to his position in 2016 and scored a second term in 2020. “Over the past four years the world our clients operate in and the challenges we help them solve have become more complex. We will continue to invest in quality, upskilling our people and technology as we respond to the fourth industrial revolution,” he was quoted saying in a press release about his second term. In 2021, Ellis took home £4.4 million ($5.6 million USD).

As to his replacement, a spokesperson told Sky News the process begins this month and final candidates will be known in April. Let’s hope the next one is a bit more open-minded about hybrid work.

The post PwC UK Will Be Getting a New Top Dog appeared first on Going Concern.

You should know this but Part I.A. deficiencies are those of such significance that the PCAOB believes the firm, at the time it issued its audit report, had not obtained sufficient appropriate audit evidence to support its opinion on the issuer’s financial statements and/or ICFR. When people say “deficiencies” in relation to PCAOB reports, that’s what they mean.

New to 2022 inspection reports is the Part I.C section intended to flag instances of noncompliance with PCAOB rules related to maintaining independence and potential noncompliance with U.S. Securities and Exchange Commission independence rules. According to PwC, Part I.C of their upcoming 2022 inspection report includes 129 instances across 74 issuers identified through their own compliance procedures, and one instance identified by the PCAOB.

On the 2023 inspection cycle the firm said:

Our FY23 internal inspections program is substantially complete, and of the 201 audit engagements subject to internal inspection, 97% were deemed compliant. In addition, the PCAOB’s most recent 2023 inspection cycle (generally covering 2022 audits) is substantially complete. In both our internal and external inspections, we have noted a modest increase in observations related to executing routine and non-complex audit procedures in normal risk areas.

Based on our analysis to date of potential contributing factors we do not believe any of the observations raised are indicative of a systemic issue or broader issue in a particular audit area. As a learning organization, we took prompt actions to assess and respond to the nature of the matters identified, and we continue to monitor, assess, and respond to feedback to maintain and further enhance audit quality. Through guidance and various communications, we’ve reinforced to our teams the importance of consistent execution in our day-to-day work — from planning through completion of the audit. This includes both the careful preparation of audit work and the appropriate level of supervision and review throughout the audit. We’ve also encouraged our teams to seek additional opportunities to enhance experiential learning and team collaboration.

It could be worse. EY said in November the PCAOB identified deficiencies in almost half (46%) of their audits inspected for the 2022 report, also not yet released. At a Baruch speech late last year, newbie member of the board George Botic said of upcoming inspection results 40% of all audits reviewed will have one or more Part I.A deficiencies and “the average Part I.A finding rate across the six U.S. Global Network Firms will increase from approximately 20% of audits reviewed in 2021 to 30% in 2022.”

Feel free to do the math to figure out who else is dragging the average down. You are also free to complain about the PCAOB in the comments as always.

Related:

The post PwC Admits the Next PCAOB Inspection Report Won’t Be Great appeared first on Going Concern.

PwC has dropped some of its diversity targets in the US and opened up previously off-limits scholarships to white students after pressure from right-wing activists and a Supreme Court ruling against affirmative action.

The Big Four accounting firm, which employs 46,000 people in the US, said it was applying “rigour” to its diversity, equity and inclusion efforts to reflect the new legal backdrop.

The changes included ending race-based eligibility criteria for a student internship programme and for scholarships to help candidates prepare for professional accounting exams, two initiatives that were designed to increase the diversity of the firm’s employee base, according to executives and changes made to PwC’s website.

The Supreme Court ruling they refer to is the one on race-conscious admissions (more commonly known as affirmative action) in higher education decided June 29, 2023. You can read all 237 pages of that here [PDF].

After the Supreme Court ruling, the nonprofit group founded by ex-pres Trump’s senior advisor Stephen Miller calling itself America First Legal sent PwC a cease and desist letter demanding the firm stop using “racial preferences in hiring and internship programs.” The press release AFL put out at that time went something like this:

PwC is an internationally recognized name as one of the “Big Three” accounting firms. But in the United States, they are among one of the worst offenders when it comes to implementing racially discriminatory practices. Not only does PwC have two explicitly race-based internship programs (i.e., one must be a certain race to qualify), but it also administers a third and its principal internship program in a discriminatory manner. Furthermore, PwC has hiring and promotion quotas based on race and sex, discriminating against individuals at every step of their careers.

In light of recent Supreme Court of the United States cases on this topic, AFL sent a notice letter to Tim Ryan, the Chair of the U.S. Board for PwC, alerting him that these practices expose the firm to lawsuits and the partners to personal liability. The letter is also an open letter to the partnership, encouraging them to push back against these racist policies. It is also an open letter to PwC employees and applicants, urging them to come to AFL to seek representation if they are denied a job or promotion due to their race.

Last time I wrote this up, I neglected to point out how AFL said “one of the ‘Big Three’ accounting firms” in their press release and was called out in the comments for letting such a choice opportunity pass me by. Allow me to remedy that now and say HAHAHA THEY SAID BIG THREE. Guess KPMG won’t be getting a strongly worded letter about diversity programs.

AFL named four PwC programs they deemed “facially unlawful” in light of the Supreme Court ruling: The “Start Internship”, the “Advance Internship”, the “While You Work – CPA Acceleration Program”, and the “Enrich” program. And added:

Also, the partnership’s official statements — styled “Purpose and Inclusion Reports” for FY 2021 and FY 2022 — contain disturbing evidence of unlawful racial, national origin, religious, and sexbased quotas in hiring, promotion, and other business practices. Either the partnership is affirmatively misrepresenting its hiring and promotion practices or admitting to egregious and morally indefensible violations of the law. There is no third alternative.

Let’s talk about those reports. PwC’s FY23 Purpose and Inclusion Report was released Monday, offering fresh new information that was clearly impacted by the affirmative action decision. In the report, the firm discusses how DEI is “an essential aspect of our purpose, values and culture.” Said PwC:

As our efforts continued to evolve and we focused further on our desired progress, in the summer of 2020, we committed to tracking and reporting annually on 14 indicators most material to our business. We added an additional four indicators in FY21. Several challenges–new and ongoing–marked the year, from increased climate regulation, continued social unrest and unpredictable economic market conditions to the Supreme Court ruling on affirmative action in higher education.

While the world has moved in ways we never could have anticipated over the last few years, we remained focused on workforce representation, talent attraction and the makeup of our partnership as areas that guided our DEI strategy and reporting throughout FY23. We’ve also reflected on the Supreme Court ruling and applied rigor to advance our diversity commitment in a way that fully accords with the changing legal landscape. In addition to sharing the data that helps inform our strategy, this report is also designed to help us hold ourselves accountable to support sustainable progress. Cultivating a diverse workplace and sustaining an inclusive culture is an ongoing endeavor. We continue to evaluate our indicators, and in the areas where we seek to do more to support the career trajectories of our people, we have guideposts for disciplined reflection, to evaluate and accelerate progress.

PwC shared some stats in the report, too. Just a few of them in image form:

Check this out, they even have turnover.

And pay equity:

Said the report in words (I purposely put the word after the pictures so you can tune out here if you want):

When we began reporting expansively on our DEI data in FY20, we sought aspirations focused on workforce representation, talent attraction and the makeup of our partnership. These aspirations continued to guide us throughout FY23:

• To attract a workforce in the US that better reflects the diverse makeup of US higher education enrollment: 56.5% women, 20.9% Latino/Hispanic and 14.7% Black
• To aspire toward 35% Black and Latino/Hispanic representation among our experienced hires, entry level hires and interns
• To aspire toward our overall partnership being made up of 50% women and 35% racially/ethnically diverse individuals

Using these as guideposts, we have been tracking our progress since FY20 to measure the efficacy of our actions.

• We aspired to increase our Black and Latino/Hispanic workforce and have made considerable progress. In four years, we have increased from 6,955 to 9,494–a 37% growth in our Black and Latino/Hispanic population.
• We aspired to increase the female and racial and ethnic diversity within our partner pipeline.
  For women, we have seen a 15% increase from 253 to 290 in partner pipeline candidates, and we have more work we want to do. We have experienced a 41% increase in our racial and ethnic diversity partnership pipeline, going from 222 to 313.
• We also aspired to increase the level that we award our reportable spend to certified diverse suppliers. We have gone from 22% to 35%, making significant progress. However, in FY24 we will experience the loss of a diverse supplier that will impact our progress and have us reevaluate other ways to keep our momentum.

It will be interesting to see what next year’s report looks like. In the meantime, PwC remains the only Big 4 firm listed on America First Legal’s Woke Corporations page.

The post PwC Is Dropping Diversity Targets After the Supreme Court Affirmative Action Decision appeared first on Going Concern.

What a coincidence that AI is going to lead to the things executives wanted to do anyway, like mass layoffs and forcing people back into the office pic.twitter.com/Ev0FdPYpZW

— McRib Hard Seltzer (@kleib323) January 16, 2024

And this is from “PwC Chair Basically Threatens AI Will Replace You If You Don’t Come Into the Office” published June 5, 2023:

For two years now, PwC UK chairman Kevin Ellis has been trying to get people back into the office. In 2021, he said he wanted to “create a buzz around returning to the office,” luring his people back with the promise of human contact we were all starved for in 2020.

When “having to see other people” didn’t work to get people flocking back to the office, he said this to The Telegraph:

Kevin Ellis, chairman of PwC, said the popularity of AI software will drive employees to abandon working from home as they want to “differentiate themselves from a robot”.

During a livestream event on AI technology for 25,000 of his staff last week, Mr Ellis told workers: “For professional services, where researching and summarising data is a key part of junior roles, AI has the potential to fast-track year one trainees to year three. You’re freeing people up to do more.

He added: “The latest wave of AI will likely bring people back to the office. People are going to want to learn from others face to face, and the best way a human can differentiate themselves from a robot is in person.”

So you can understand why the article Bloomberg published Monday seemed so eerily familiar. Nope, not the same thing, just a rehash of what he said last year. Guess the vague threat isn’t working.

Young Staff Need to Be in the Office Because of AI, Says PwC’s UK Boss

Junior staff should spend more time in the office to get quicker promotions, the UK boss of accounting giant PricewaterhouseCoopers said, as AI is poised to take on routine tasks traditionally given to younger workers.

Generative AI is removing “tasks that in the past our more junior staff trained and cut their teeth on,” Kevin Ellis, the chair of PwC UK, said during an interview at the World Economic Forum in Davos, Switzerland. Without those tasks, “you’ve somehow got to get people through the career path faster,” he added.

“It’s a lot more face-to-face time being important and a lot more developing,” Ellis said. “So you have to get people in the office more working together.”

…

“If you’re asking me my opinion on how you succeed in your career,” he said. “I’d be in the office four to five days a week.”

Only five? That’s not very high performer of you, Kev.

As we pointed out last time Kevin vaguely threatened AI would replace you if you don’t show your face around the office enough, he started at PwC back in 1984. Microsoft Excel wasn’t even on the market yet. Do you reckon there was some old timer in his office who told young staff they should keep paper spreadsheets and ledgers to differentiate themselves from people using computerized ones?

Unless you’re on the partner track, who cares. Don’t let this guy bully you into the office five days a week.

The post Old Guy at PwC Wants Young People In the Office Because Something Something AI appeared first on Going Concern.

The following message we’re about to share with you was sent out as a firmwide email from then-Chairman Dennis Nally to everyone at PwC almost exactly 15 years ago to the day. To my knowledge it’s never been published here, because back when it went out to everyone working at PwC US in January 2008, Going Concern didn’t exist yet and wouldn’t for another year and a half. Funny enough, GC was originally created by the same people who own Above the Law, perhaps it was emails like this that made them realize accounting deserves its own gossip rag separate from that of law’s. We’ve since been passed around to a few different owners like a poorly rolled joint but that’s neither here nor there.

Anyway, @twuench brought this to our attention on Twitter this morning and we’re publishing it because A) today is MLK Day and B) this one deserves a spot in the Museum of GC next to all the other stupid emails from Big 4 leaders we’ve posted over the years.

A tipster — who my brief and former colleague Above the Law’s David Lat described as “incensed” — wrote this to ATL, their words forever immortalized in a post published January 28, 2008.

[A friend] at Price Waterhouse Coopers forwarded this offensive message, which was sent from the head of PWC US to all US employees. It is one thing for firm management to decide not to observe Dr. King’s birthday. It is quite another to dress up that decision, which was clearly motivated by a refusal to bear the costs of observing the holiday, as a noble gesture in honor of Dr. King’s achievements.

Clearly, the firm believes that its employees (many of whom are attorneys — hence the email to Above the Law) are unintelligent enough to believe that this thinly veiled insult was intended to honor Dr. King. Even more offensive is the fact that the firm denigrates Dr. King’s extraordinary struggles and achievements by equating them with the daily work of accountants, auditors and tax professionals as they work to save tax dollars and maximize profits for mega-corporations.

The comparison is laughable and utterly offensive. I trust that ATL will not allow the insult to go unnoticed.

Do you think that tipster thought this email would resurface 15 years later? Probably not. Never underestimate the pettiness of gossip rags. Nor our tendency to bring up old shit and beat dead horses to within an inch of their afterlife.

At last, the message:

MESSAGE FROM CHAIRMAN DENNIS NALLY TO PRICEWATERHOUSE COOPERS EMPLOYEES

From: Dennis M. Nally

Sent: 01/18/2008 09:15 AM EST [Ed. note: I’m so stoked this came with a time stamp and everything]

To: PwC US Staff

Subject: In honor of Dr. Martin Luther King, Jr.

This coming Monday, we commemorate the birthday of Dr. Martin Luther King, Jr., one of the preeminent leaders in the civil rights movement. At the age of 35, Dr. King was the youngest person at that time to receive the Nobel Peace Prize, and he is widely known for his work toward ending racial segregation in public schools and promoting meaningful civil rights legislation, including a law that would prohibit racial discrimination in the workplace.

Dr. King was a remarkable speaker, and his “I Have a Dream” speech is considered one of the most impactful dissertations of all time. But there is another quote he delivered that I think is particularly important for us as a Firm:

“Human progress is neither automatic nor inevitable… Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals.”

Many US companies have decided to give employees the “day off” in commemoration of Dr. King’s birthday. But as you read the quote above, you realize that Dr. King believed that the efforts around basic human rights could never take a holiday. As a result, we consider Dr. King’s birthday as a “day on;” a day to take action; a day to recognize that progress is not automatic.

Throughout many of our offices this Monday, we will be hosting talented high school students from our local markets. The intent of these gatherings is to introduce these students to the vast array of career opportunities that are available to them, not just in our profession, but in the business world in general. In keeping with Dr. King’s passion for equal opportunity, I believe this is a fitting tribute to his work.

I’ll leave you with one final quote from Dr. King; “Our lives begin to end the day we become silent about things that matter.” Equal rights cannot be taken for granted, either personally or collectively as a Firm. I hope that you will take a moment to reflect on the significance of this holiday and find some way to recommit to the equality and respect for all individuals that Dr. King talked about so many years ago.

Regards,

All I got from this was “take a moment to reflect on Dr. King’s legacy, charge it to admin, and get back to work.” It’s too bad the comments on ATL have been lost to time, you just know they had to be good.

Reflected Tony:

I was a first year senior, 25, on a big job. Nobody would ever accuse me of being “soft.” The email made me uncomfortable. We got it – busy season at a service firm, volunteering on MLK Day may not be plausible, but seek opps when schedule permits.

— ᴛᴏɴʏ ᴡᴜᴇɴᴄʜ (@twuench) January 16, 2023

Take note, Big 4 leaders: these kinds of things stick in people’s minds. And not just because aging tabloids with nothing better to write about decide to bring them up a decade and a half later.

The post Remembering the Time Everyone at PwC Had to Work on MLK Day As a Noble Gesture to Honor Dr. King appeared first on Going Concern.

Here’s what happened. 445 professional staff — 93 percent auditors and seven percent tax and advisory — participated in answer sharing during mandatory, open-book internal training assessments between 2016 and 2020. This included training on accounting and auditing standards, audit strategy, planning, procedures and documentation, professional integrity and independence matters, and specific issues that arise in audits. Despite all this widespread cheating, PwC Canada actually had a completely flawless PCAOB inspection report in 2020 [PDF] so at least some auditors over there must have known what they were doing.

Ever since KPMG was fined $50 million by the SEC for cheating in 2019 it’s been a free-for-all on the answer sharing punishments around the world. EY US got fined $100 million by the SEC for doing it in 2022 though theirs was a bit worse as they were also cheating on the ethics exams one must take to be licensed as a CPA and not just WBLs.

And just a few weeks ago, the PCAOB announced it was fining PwC China and PwC Hong Kong a total of $7 million USD for their own cheating: From 2018 until 2020, over 1,000 individuals from PwC Hong Kong, and hundreds of individuals from PwC China, engaged in improper answer sharing – by either providing or receiving access to answers through two unauthorized software applications – in connection with online tests for mandatory internal training courses related to the firms’ U.S. auditing curriculum.

When PwC Canada was fined for cheating by the PCAOB in 2022, it was revealed PwC Canada personnel maintained shared drives packed with answers to at least 46 of PwC’s audit tests. So we kinda already knew there was some cheating going on over there.

From at least 2016 to early 2020, more than 1,200 PwC Canada personnel were involved in improper answer sharing related to training tests. Firm personnel primarily shared answers through use of several shared drives that professionals had created on the Firm’s computer network (the “Shared Drives”), and on which professionals had posted the answers for others to view and provide supplemental answers. In addition, individuals shared answers by sending emails with attached documents containing answers to training test questions, by providing answers in hard copy documents, or by discussing answers when taking tests in the presence of others.

Instances of improper answer sharing primarily occurred in connection with tests that were a part of the Firm’s mandatory Assurance training. The Shared Drives contained answers for at least 46 of the Firm’s approximately 55 mandatory Assurance tests, as well as answers for some mandatory Firm-wide tests containing content concerning professional integrity and professional independence.

Improper sharing of training test answers occurred among junior staff, managers, directors, and partners at the Firm. After Firm leadership learned of the practice, it conducted an internal investigation. The Firm’s investigation revealed that the misconduct was widespread within the Firm’s audit practice, including among those who performed work on audits governed by PCAOB standards. At least 1,100 professionals in the Firm’s Assurance practice were involved in answer sharing.

And the CPA Ontario order says essentially the same thing:

Specifically, Answer-Sharing occurred in the following ways:

a. Repositories of Answer-Sharing Documents were created on Google Drives and generally accessible by invitation. Google Drives are electronic storage tools within the Google Workspace platform used by PwC that contain folders and documents;
b. Answer-Sharing Documents were created and shared by email documents;and
c. Professional Staff worked together at the end of in-person training sessions and referred
collectively to Answer-Sharing Documents.

The CPA Ontario order mentions that rather than seeing answer sharing as a bad thing, the attitude at PwC Canada was that answer sharing is part of a greater “collaborative culture” at the firm.

There was a consistent mindset among the participants that engaged in Answer-Sharing that it was both widely-known and appropriate. Many viewed sharing answers as part of a collaborative culture at PWC and because the assessments were open book, some did not view answer sharing as ethically improper.

That changed on November 21, 2019 when assurance staff were told via webinar to “complete assessments independently.”

The communication was motivated by the publication of press releases and news stories regarding a different firm’s manipulation of its training assessment system in another jurisdiction and was not related to any awareness by the Firm that its own Professional Staff had been actively engaging in Answer-Sharing to that point in the Relevant Period. Despite this instruction, Answer-Sharing amongst some Professional Staff continued following the webinar for over one month.

Said CPA Ontario:

PwC admits it failed to have appropriate policies and procedures and a system of quality control in place to ensure that mandatory internal training assessments were being completed independently. The firm failed to adequately communicate the requirement for independent completion and did not have appropriate procedures in place to prevent, detect or monitor for answer sharing. The mandatory assessment process was therefore not effective in demonstrating whether the substantive professional competencies being evaluated were in fact attained.

“PwC failed to create and foster a culture in which the high standards of ethics and integrity required of professional staff were conveyed and applied to internal training assessments,” said Janet Gillies, CPA, CA, executive vice-president, Regulatory and Standards, CPA Ontario. “This failure undermines the public’s confidence in the ethics and integrity of the participating staff and the profession as a whole.”

From now on, PwC Canada will engage in periodic monitoring of assessments to ensure they are completed independently. And PwC Canada’s junior auditors will learn to keep this thing everyone does on the down-low going forward.

We feel compelled to ask — does anyone other than regulators give a shit if some overworked auditors share answers on open book, checkbox assessments? Truly?

Related:

The post Cheaters at PwC Canada Thought Sharing Answers With Each Other Was “Collaborative Culture” appeared first on Going Concern.

Adds FT:

It comes as the Big Four accounting firms — Deloitte, EY, KPMG and PwC — seek to trim costs and as large employers cut back on travel to reduce their carbon emissions, relying more on video calls to conduct meetings.

PwC has pledged to cut emissions from its operations to net zero by 2030. Business travel remains PwC UK’s single-largest source of carbon pollution, with flying accounting for more than two-thirds of the firm’s emissions in 2022.

Business-class seats have a higher carbon footprint than economy ones because they take up more room and are more frequently empty.

Right but they cost more. In money, not emissions. And money seems to be tight the the King’s PwC.

Just a few weeks back it was reported, again by FT, that PwC UK would ask 500-600 staff to voluntarily resign. Should they not leave by choice, the firm would resort to laying them off. So yeah, money is tight.

Relevant reaction to the new flight rule from FlyerTalk forums:

“It’s bizarre when partnerships do this. When I was a partner in a PE firm we had no real rules – all J, everywhere, and £300 hotel per diem (which with inflation would now be £500+) – because it was a partnership and it was our money, so what?”

“J” = business class

PwC partners’ money.

PwC UK imposes restrictions on business-class travel [Financial Times]

The post Bye-Bye Business Class for PwC UK Partners appeared first on Going Concern.

It was an honor to volunteer for a great cause at the Pie A Partner event in Washington, D.C. earlier this month!

Whether we volunteer or donate, I encourage us all to give back to our communities this #GivingTuesday. pic.twitter.com/CnZ7ZLtWRU

— Tim Ryan (@Timothy_F_Ryan) November 28, 2023

According to some pics we found, the event benefits “various charities” including Sunflower Bakery, DC Scores, and N Street Village. Nice.

All firms should do this. Regularly.

The post Tim Ryan Got Hit With a Pie appeared first on Going Concern.

The article referenced layoffs at both the King’s and down under PwC (UK and Australia), both of which had been mentioned all over the media including here. See: Layoff Watch ’23: PwC UK Needs a Few Hundred People to GTFO (November 7) and Layoff Watch ’23: PwC Australia Is Cutting 4 Percent of the Workforce (November 8). Combined the workforce reduction would affect a little less than 1,000 people depending on how many staff in the UK chose to voluntarily separate themselves.

Though no layoffs had been announced at PwC Canada at this point, the law firm said in their article at least two dozen former PwC Canada staff had contacted them “claiming that they have been let go by the company” and that their lawyers were reviewing these folks’ severance offers. We reached out to the law firm shortly after their article went up but didn’t hear back and so went digging for more info instead.

On November 24 The Globe and Mail published “PricewaterhouseCoopers cuts Canadian jobs, faces legal challenge over severance” and included in it some comments from a lawyer at the firm that published the original notice:

“They have been told it is a restructuring and they have been offered not fantastic packages,” Samfiru Tumarkin employment lawyer Fiona Martyn said in an interview. “They are not insultingly low offers, but they are also not incredibly reasonable or incredibly fair, especially when looking at some of the factors that the courts will look at.”

According to one termination e-mail obtained by The Globe, PwC offered employees whose “services are no longer required” one week of pay per year of service, with benefits to be terminated one week from the date of dismissal. The e-mail also said the severance offer “includes all of our obligations to you, whether statutory, contractual, at common law, or otherwise.”

Within two days the Globe was able to get a statement from PwC and updated their article. Spokesperson Anuja Kale-Agarwal confirmed in an email to them that the firm had indeed made “some limited job reductions,” less than two percent of PwC Canada’s headcount according to her. “These decisions are very difficult and are never taken lightly,” she said. “The impacted individuals were treated fairly.”

PwC Canada employs 7,700+ partners and staff. Subtracting PwC Canada’s 308 partners, a workforce reduction of two percent works out to about 148 individuals, so many more than just the two dozen who initially reached out to the law firm.

Other than the spokeswoman statement there’s been no official announcement from PwC. Though there’s been plenty of reaction to the news and the firm’s lack of transparency. One person we spoke to about the sneaky layoffs had this to say:

“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. 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.”

Anonymous PwC Canada Employee on recent sneaky layoffs

This sort of action by a Big 4 firm in a time of low attrition and slow business does not lend much credence to statements like “We are not planning layoffs currently as a firm.” Just be real about it, people are going to figure out their colleagues are leaving whether you announce it or not. Why erode trust by choosing to be silent on their sudden disappearance?

The post PwC Canada’s Sneaky Layoffs: ‘Leadership Lacks Empathy and Transparency’ appeared first on Going Concern.

According to the news release, Komodromos and PwC Greece knew going into it the audit came with a parade of the reddest of red flags to rival that of a CCP parade. They understood that an executive at Aegean with significant control over the company had previously been criminally convicted for fuel smuggling involving “virtual invoicing” and been accused of a variety of other criminal activity. As such, because of concerns about the integrity and ethics of management, Komodromos and the engagement team assessed a significant risk of material misstatement due to fraud.

Did the engagement team proceed to check every box on this audit? Obviously not if we’re talking about a PCAOB order and penalty of $3,080,000.

Komodromos and the engagement team disregarded and did not resolve inconsistencies from certain contradictory audit evidence about the unusual transactions with the four customers, despite the heightened risks of fraud at Aegean and the engagement team’s initial concerns about the transactions. This contradictory evidence should have been viewed as red flags that raised substantial doubt about management’s assertions in Aegean’s financial statements related to the four customers’ transactions and balances.

Well how bad could it be…

For example, the firm engagement team encountered substantial difficulties obtaining street addresses for the four customers from Aegean to use in the firm’s accounts receivable confirmations to those customers. When the engagement team finally received the street addresses, the team requested that an affiliated PwC network firm visit the customers at those addresses to verify their existence. When the PwC network firm visited the first three addresses, it found that one address did not exist and two were residential apartment buildings with no businesses located there. Although the affiliate found no evidence that the customers were located at the addresses, Komodromos and the engagement team failed to respond appropriately to that and other contradictory audit evidence – or even document the attempted site visits in the workpapers. Instead, Komodromos instructed the team to cancel the remaining site visit and relied on other inadequate audit evidence to issue an audit report containing unqualified opinion.

In 2018, Aegean publicly disclosed that its audit committee and board of directors had concluded that the transactions with the four customers lacked economic substance, as the relevant customers were shell companies with no material assets or operations and were owned or controlled by former employees or affiliates of the company. In 2021, PwC Greece agreed to pay $14.9 million to settle a lawsuit brought on by Aegean Marine shareholders who accused the firm of failing to catch a $300 million fraud. Deloitte Greece also got tied up in Aegean Marine’s mess, having audited the company  from 2006 through 2015 before PwC dumbly took on this shitty client.

Without admitting or denying the Board’s findings, PwC Greece and Komodromos each consented to the PCAOB’s respective order against them. The PwC Greece order censures the firm, imposes a $3 million civil money penalty on the firm, and requires the firm to complete remedial undertakings. Those remedial undertakings require the following:

• The firm’s associated persons involved in PCAOB audits will complete additional hours of professional training related to certain PCAOB standards.
• For the next two years, the firm will obtain pre-issuance reviews by a third party for each issuer audit in which the firm prepares or issues an audit report or plays a substantial role in the preparation or issuance of an audit.

The Komodromos order censures him, imposes an $80,000 civil money penalty on him, and bars him from being an associated person of a registered public accounting firm for two years.

Further reading: Auditors’ Duty to Detect Related Party Transactions, to be Professionally Skeptical, and to Detect Fraud: A Case Study of Aegean Marine Petroleum Network, Inc. from Journal of Economics, Finance and Management Studies, Volume 4, Issue 06 June 2021 [PDF]

The post PwC Greece and Partner Get Punished For Running Out of F*cks to Give About This Awful Audit appeared first on Going Concern.

Australia getting cucked

https://www.afr.com/companies/professional-services/pwc-cuts-hundreds-of-jobs-as-scandal-slowdown-hits-20231107-p5eibh

The link leads us to Financial Review where we find:

The nation’s once dominant consulting firm, PwC Australia, will cut 344 roles, or more than 4 per cent of its 8000-strong workforce, as fallout from its tax leaks scandal and the economic slowdown reduce demand for its services.

Affected staff were told on Wednesday they were being made redundant. The cuts mean PwC will effectively shut down its Adelaide-based Skilled Service Hub. That will make 141 staff redundant, while another 197 staff across the firm will also be cut. Another six PwC staffers who declined to move to Scyne are being terminated and will not be eligible for statutory redundancy because they were offered like-for-like roles.

Included in the redundancies are the majority of the 78 staff who were initially set to join spin-off Scyne but were instead sent back to PwC last month.

Scyne is the government consulting business the firm sold off to Allegro Funds for a single Australian dollar (67 freedom pennies) in June. “We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the 1,750 talented people in our government business,” said PwC Australia Board Chair Justin Carroll on the deal when announced by the firm. “This transaction will result in the first pure play, at scale, government business in the market. This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders.”

The Australia cuts come just a day after it was reported PwC UK will be asking 600 people to voluntarily quit (and firing them if they don’t, obviously).

PwC Australia reported revenue of $3.4 billion ($2.2 billion USD) for the fiscal year ended June 30, 2023 with underlying revenue growth of eleven percent. FY23 annualized partner pay ranged from $374,000 to $4,043,000 (former CEO Tom Seymour’s take home); average partner income declined by 12 percent versus 2022. Despite the slowdown in client demand and all the messy scandal stuff PwC Australia has been dealing with all year, consulting saw 12 percent growth.

PwC reported global gross revenues of $53.1 billion USD a couple weeks ago.

Said PwC Australia CEO Kevin Burrowes in a statement:

“These are extremely difficult decisions and my thoughts are with all of those people and their families impacted by the changes we have been forced to make.

“While we are optimistic about the future, PwC must take pragmatic action to manage these challenges and make difficult decisions to meet the needs of its clients and to ensure the long-term success of the firm.

“In South Australia and across the rest of the country, we will continue to serve our clients with the highest degree of quality and professionalism – and we are grateful to our people for the resilience and dedication they have shown their clients.”

PwC cuts hundreds of jobs as scandal, slowdown hit [AFR]

The post Layoff Watch ’23: PwC Australia Is Cutting 4 Percent of the Workforce appeared first on Going Concern.

Said FT:

The firm will launch a voluntary redundancy programme for 500 to 600 people but will cut jobs on a compulsory basis if not enough staff opt to leave, people familiar with the matter told the Financial Times.

PwC was the last holdout against significant UK redundancies among the Big Four accounting firms but bosses acted after a fall in the number of people resigning in recent months.

When all’s said and done we’re talking at most 2.4 percent of PwC UK’s 25,000 people. As expected, most of the cuts are to come from advisory ranks though a few tax people are also on the chopping block. “The audit division would not be affected,” wrote FT of what they were told by their source.

The cuts will be at director and down “with a greater number of junior and mid-level roles to be cut, reflecting the firm’s bottom-heavy structure,” wrote FT.

PwC UK chair Kevin Ellis said they decided cutting people was better than delaying or canceling new hire offers:

This was partly a matter of “fairness” in not cutting off opportunities for people starting their careers and who have not yet been trained, said Ellis. Slowing down hiring would also have a negative impact on the firm’s diversity and social mobility efforts as new hires are generally more diverse than the organisation as a whole, he added.

Retaining staff in their current roles rather than continuing to hire into teams that were growing “would make our business lopsided”, Ellis said.

First years are not up for cutting, those staff who are and who leave on their own accord will receive a bigger severance package than anyone who may be forced out should not enough people leave in the voluntary resignation round. According to the person who blabbed to FT, that is.

We’ll let you know if we hear more.

PwC to cut up to 600 UK jobs as attrition rate plunges [Financial Times]

The post Layoff Watch ’23: PwC UK Needs a Few Hundred People to GTFO appeared first on Going Concern.

For the 12 months ending June 30, 2023, PwC firms around the world reported record gross revenues of $53.1 billion, growing by 9.9% in local currency and 5.6% in US dollars over the gross revenues of $50.3 billion for fiscal 2022.

Revenues were up by 10.7% across the Americas with the US growing by 11.2%, Canada by 4.5% (10.9% for Continuing Operations). This is down from 16% growth across the Americas and 17% growth for the US business in 2022. No biggie, it’s been a rough year for everyone.

Revenue by service line in US currency, PwC was even kind enough to include the FY22 figures:

• Assurance grew by 8.9% to $18.7 billion (FY22: $18.0 billion)
• Advisory grew by 13% to $22.6 billion (FY22: $20.7 billion)
• Tax, Legal and Workforce grew by 12.5% to $11.8 billion, PwC notes this growth was strong compared with growth of 8.7% in the previous year but does not include the FY22 number as they did with assurance and advisory: it’s $11.6 billion (is that math not mathing??).

Ah wait, here’s their chart.

Aggregated revenues of PwC firms by line of service (US$ millions)

*The growth rates for Tax and Legal services includes revenues from our Global Mobility and Immigration business, which was sold on 29th April 2022 in the prior year comparison. Excluding revenues from the sold business, revenues at constant exchange rates grew by 12.5% instead of 5.8% and at variable exchange rates by 7.8% instead of 1.6%.

Some other stuff per the press release:

Across the PwC network, we invested US$3.7 billion during FY23, following investments of more than US$3.1 billion in FY22.

In addition to investments in attracting experienced teams and people to PwC firms around the world, PwC firms completed 17 acquisitions and five strategic investments around the world in FY23, expanding our professional capabilities in a number of key areas particularly in the areas of technology consulting and cloud.

Across our network we are investing nearly $2 billion to grow and scale our AI capabilities by launching partnerships with multiple AI leaders, as well as rolling out AI tools across all of our lines of service.

The press release also mentions PwC’s 2021 goal to create 100,000 net new jobs by 2026. They say they created more than 32,000 new jobs in FY22 and added more than 36,000 positions in FY23. If they keep up this pace they’ll hit the goal by 2024, two years ahead of schedule. That brings PwC’s global headcount to more than 364,000 professionals in 151 countries.

The firm also said the average amount of time spent on training a PwC person in FY23 was 65.7 hours.

Let’s throw this in, too:

While there is always more to do in making PwC the best place to work for our colleagues, last year eight in 10 of our people said: PwC is a great place to work (80%), a place where they ‘belong’ (79%), a place to apply newly developed skills (82%), and a place they expect to be still working at in a year (78%).

Today’s announcement bumps EY out of the second spot (as expected) in the Big 4 pissing contest of money generating for FY23 and marks the eighth year in a row PwC has watched Deloitte dominate from the top.

Big 4 Revenue Leaderboard:

1. Deloitte: $64.9 billion
2. PwC: $53.1 billion
3. EY: $49.4 billion

KPMG always announces last, typically in December, and at $35 billion for 2022 it would be a miracle if they beat out EY to take third.

The post PwC Announced $53.1 Billion in Global Revenue appeared first on Going Concern.

Reported by Bloomberg last week, PwC is putting AI to work. Officially.

PricewaterhouseCoopers LLP has teamed up with ChatGPT owner OpenAI to offer clients advice generated by artificial intelligence as the Big Four audit firms look to cut costs and boost productivity. [emphasis ours]

The accounting firm will use AI to consult on complex matters in tax, legal and human resources, such as carrying out due diligence on companies, identifying compliance issues and even recommending whether to authorize business deals.

PwC is the first of the Big 4 to partner with OpenAI. A $1 billion AI investment and some scheme to use GPT-4 and Microsoft’s Azure OpenAI service was announced in April.

Speaking of Microsoft, KPMG announced its own partnership with Microsoft over the summer, a $2 billion investment in artificial intelligence and cloud services over five years that the firm expects to bring in $12 billion over that period. The timing of that particular partnership was not great.

Not a great look after laying off 5% of the workforce two weeks ago

One of those laid off in that round told us it’s “a slap in the face.” https://t.co/e09WUqBOZk

— Going Concern (@going_concern) July 12, 2023

ANYWAY, the above is relevant given the latest OpenAI announcement as the AI will “consult on complex matters,” probably with superior efficiency and accuracy to early career consultants which isn’t saying much about either’s abilities. Of the concern that this technology will put people out of jobs, PwC chief products and technology officer Joe Atkinson has been quoted many times in many places assuring PwCers that AI will complement their job, not steal it.

For example, this is from “Big Four Agree: AI Will Not Replace Accountants” published in the NYSSCPA newspaper in August:

“I think there’s a role for both,” he told Accounting Today. “I’m not a purist on one side or the other. But I think the power of augmentation ultimately will unlock the power of automation by itself. We’ve been on the automation journey [for many years] and we’ve benefited enormously.”

“I don’t love a vision of allowing a computer to do [an engagement] end to end,” said Atkinson. “This is where you get into the trust, integrity and responsible use of AI. AI tools are really good at pulling out information and making predictive choices but they can’t replace human judgment.”

And here he is in “A.I.’s Threat to Jobs Prompts Question of Who Protects Workers” by New York Times:

What spurred the [$1 AI investment] initiative was the chief executive’s trip to the World Economic Forum’s gathering in Davos, Switzerland, where he heard constant discussion of generative A.I.

“A number of us walking out of that room knew something had changed,” recalled Joe Atkinson, the company’s chief products and technology officer.

PwC’s workers have expressed fears about displacement, according to Mr. Atkinson, especially as their company explores automating roles with generative A.I. Mr. Atkinson stressed, though, that PwC planned to retrain people with new technical skills so their work would change but their jobs wouldn’t be eliminated.

Back to Bloomberg:

The OpenAI partnership, which is not based on ChatGPT, won’t result in jobs cuts in the near-term, PwC said. [emphasis again ours]

PwC’s new AI system is already “behaving like a 25-year tenure partner,” Bivek Sharma, chief operating officer for tax, legal and people at PwC UK, said in an interview Monday.

“The compliance burden globally is increasing and with geopolitics, the level of complexity that the C-suite is facing is like you’ve never seen before,” said Sharma. “A lot of people talk about how there’s gonna be job displacement with AI, but the reality, to navigate these very complex situations, AI is going to be necessary to actually do that work.”

All this time we’ve been worried about the low level grunts getting put out of a job by technology, do partners have to worry too?

The post What Do We Think About PwC Putting AI to Work Offering Clients Advice? appeared first on Going Concern.

As you all know by now the PwC Australia tax scandal continues to claim victims and slander the good name of consultants everywhere. In yet another senate inquiry last week, former CEO Luke Sayers got beat up a little by senators sick of hearing “I don’t recall” from former and current senior leadership:

Something else came out of those hearings, too. Per Financial Review reporting, PwC Australia Chief Risk and Ethics Leader Jan McCahey told the inquiry the firm didn’t file the requisite PCAOB Form 3 they were supposed to file within 30 days of a “reportable event.”

A Form 3 is required whenever a firm or partner, shareholder, principal, owner, member, or audit manager of the firm has become a defendant or respondent in a government-initiated civil or alternative dispute resolution proceeding, or an administrative or disciplinary proceeding (other than a PCAOB proceeding), arising out of conduct in the course of providing professional, audit or other accounting services, or any such proceeding has been concluded as to the firm or the individual.

It was Jan 22, 2023 when AFR first reported a PwC partner leaked government tax plans to clients and November 16, 2022 when the Tax Practitioners Board (the TPB) decided to impose an Order on PwC under section 30-20 of the Tax Agent Services Act 2009 (TASA) related to said partner leaking tax plans to clients (and his colleagues).

“[It] was an untimely reporting in view of the difficulties that we have had,” AFR quoted McCahey saying in response to questions from Labor senator Deborah O’Neill. “We remain in discussions with representatives of the PCAOB in relation to that.” Asked when the PCAOB “discussions” would conclude she said: “I’d like it to be finished quickly, senator, but that would be an inappropriate thing to say, I’m sure. But we will continue the dialogue with them and provide all such information as they request. They have, of course, the very appropriate regulatory powers, and we will continue to work with them.” She also mentioned that “information wasn’t available to those who are doing the reporting until the announcement by the TPB was made earlier in the year.”

The PCAOB fined Cohn Reznick $20,000 earlier this year for failing to report a $1.9 million penalty from the SEC issued in June 2022 that the firm didn’t report until December of that year. The Board also fined RSM Hong Kong $10,000, Deloitte & Touche Ltda. of Colombia $15,000, and PwC and BDO member firms in Hong Kong $10,000 each for failing to report their own events (in Deloitte & Touche Ltda.’s case seven events) in 2019.

Given the Board’s recent hard-ass stance on registered firms we should expect a fat, juicy fine and perhaps a slap on both wrists.

The post Looks Like PwC Australia Is Getting in Trouble With the PCAOB For Failing to Report an ‘Event’ appeared first on Going Concern.

From AFR‘s write-up on the leadership shakeup:

Mr Burrowes told The Australian Financial Review he wanted to end the “boys’ club” method of appointing partners to senior leadership roles as part of extensive reforms to the way the firm operates.

“I’ve already announced that senior roles and positions inside PwC Australia will be merit-based, it won’t be me appointing [in a] ‘boys’ club’ approach,” he said last week ahead of the reports being made public.

“That’s something I successfully introduced in PwC in the UK, it works really well. It’s about merit, it’s about partners putting themselves forward. That will bring different voices into the room, it will bring different challenge into the room.”

Although we’d all like to believe Kevin had the revelation that PwC’s existing good ole boy culture sucks while sitting on the toilet one night it’s more likely the move is inspired directly by the recently released Switkowski report [PDF], an investigation into governance, culture, and accountability at PwC Australia commissioned by the firm itself. That report identified several key shortcomings, culture issues that encouraged if not directly led to ex-partner Peter Collins eagerness to leak confidential government information back to the firm. According to the report those shortcomings are:

• Lack of independence and external ‘voices’ within the 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

Under “Overly collegial culture inhibiting constructive challenge,” the report notes:

Historically at PwC Australia, partners have built and relied upon a high degree of trust in each other, with a preference for maintaining harmony. In practice there is not a lot of constructive dissent, with relationships and loyalty being key to career progression. In recent years, the emphasis on growth coupled with high levels of trust and reluctance to challenge created blind spots. It may also have contributed to a willingness of partners to tolerate poor behaviors of ‘rainmakers’. Against this backdrop, the overplaying of collegiality creates risk.

PwC Australia partners and staff are high achievers. This tends to be associated with a lack of comfort in accepting the fallibility of humans, and a reluctance to reflect on what is not working well. PwC Australia exhibits a ‘good news’ culture at the enterprise-level where “good news gets communicated and bad news gets held back”. The Review found there is a general hesitancy to delve into uncomfortable conversations, to learn from mistakes and to be prepared to hold others to account.

Readers of Going Concern and soldiers of Big 4 both past and current know exactly what is meant by “overly collegial culture” and know the issue is not unique to PwC. It’s just that PwC got busted doing bad things because of it and now they have to do something to address it in an excessively public manner.

Australian Financial Review detailed PwC’s culture problems as identified by the Switkowski report even deeper (words with funny Aussie spellings have been Americanized for our audience):

• 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.

And there it is. As explained by the Switkowski report:

While there has been a significant and successful focus on aspects of diversity and inclusion at PwC Australia in recent years, this has largely extended to social diversity as opposed to cognitive diversity. When leadership positions are assigned to people that senior leaders know and trust, with less priority given to capability-based criteria, the cognitive diversity at senior leadership levels may suffer.

When cognitive diversity is lacking, dialogue and decision-making is less conducive to dissenting voices and constructive challenge. It appears this has been the case at PwC Australia. It was commonly reported that there needs to be a greater diversity of views, particularly amongst the senior leadership groups.

In other words, “diversity” as we commonly understand it to mean in race/gender/sexual orientation isn’t so bad at PwC, it’s the diversity of thought at the top that is a problem. This again boils down to those most adept at playing the game being the ones who ascend the leadership ladder.

The new leaders, on whom a tremendous amount of pressure to disrupt the culture now exists, are:

• Louise King, Technology, Media and Telecommunications (23 years at PwC)
• Guy Chandler, Energy, Utilities and Resources (5 years at PwC)
• Brian Man, Retail and Consumer Industry (almost 5 years at PwC)
• Nicola Lynch, Health and Education Industry (14 years at PwC)
• Barry Trubridge, Financial Services Industry (almost 9 years at PwC)
• Troy Porter, Private Equity Industry (almost 30 years at PwC)

Best of luck to them and to Kevin’s toilet as a source of good ideas going forward.

The post Shamed For Its Culture, PwC Australia Decides to Try Out Merit As a Reason to Promote Someone to Leadership appeared first on Going Concern.

After the deal, one of the largest such combination deals in the region, Deloitte will have 28 partners and 800 people, a person with direct knowledge of the matter said.

PwC’s Sri Lanka and Maldives firms will join Deloitte with effect from Oct. 28, the memo said.

In the memo, Deloitte South Asia CEO Romal Shetty said the deal is “a transformative chapter in our history and marks a strategic leap forward.” Earlier this year, Shetty said Deloitte plans to have around 30% of its workforce operating from India within the next four years. The PwC deal will further expand Deloitte’s foothold in the region and open the door for Deloitte to diversify away from mostly audit services and into advisory and particularly technology consulting.

A Deloitte spokesperson confirmed the transaction but did not provide any details. On the PwC side, Reuters reviewed a memo sent to clients that said the soon-to-be ex-PwC network firms are “committed to effecting a seamless transition as we prepare to join Deloitte.”

The deal will make Deloitte the second largest professional services firm in Sri Lanka, the first largest being — brace yourself — KPMG (according to Reuters’ source, anyway).

The post Deloitte Is Taking PwC’s Sloppy Seconds in South Asia to Get Into Technology Consulting appeared first on Going Concern.

In four separate exposure drafts that amend the Taxation Administration Act 1953 (TAA) and/or the Tax Agent Services Act 2009 (TASA), the government is seeking stakeholder comments on proposals that would strongly discourage the behavior that led former PwC partner Peter Collins to bring confidential Australian Tax Office information back to the firm for the purposes of converting this information to billable hours. Australian Financial Review‘s Neil Chenoweth calls the proposals a “tax sector crackdown” and explains the finer details here.

We’re just going to pull the proposals directly from Treasury’s website. The goals are to strengthen the integrity of the tax system, increase the power of regulators because this is why we can’t have nice things, and strengthen regulatory frameworks to ensure they are fit for purpose. Factsheets and the full drafts can be found at each link below.

Response to PwC – reform of promoter penalty laws

These amendments relate to the priority area identified for action in the government’s PwC response: Strengthening the integrity of the tax system.

The draft legislation will:

• increase the time the Australian Taxation Office (ATO) has to bring an application for civil penalty proceedings in the Federal Court of Australia from 4 years to 6 years
• align the maximum civil penalties that the Federal Court of Australia can impose on promoters with those in the Corporation Act 2001
• expand the application of the current regime, including broadening the scope of important definitions, to overcome difficulties faced in the application of the provisions.

Note: Promoter penalty laws were introduced in 2006 to deter tax practitioners from promoting tax avoidance and evasion schemes to their clients, clearly they weren’t strong enough. Says the government response to the PwC tax leaks scandal (embedded at the bottom of this post):

Collectively, these changes will ensure promoters of tax exploitation schemes face significant consequences for their actions and make it uneconomic to engage in this behavior.

This will deter tax practitioners from making unauthorized disclosures of confidential information, or misusing confidential information, as occurred in the case of PwC, for financial gain.

Response to PwC – information sharing

These amendments relate to the priority area identified for action in the government’s PwC response: Increasing the power of our regulators.

The draft legislation will:

• remove limitations in the tax secrecy laws that were a barrier to regulators acting in response to PwC’s breach of confidence, and
  enable the Australian Taxation Office and Tax Practitioners Board to refer ethical misconduct by advisers (including but not limited to confidentiality breaches) with prescribed professional associations for disciplinary action.

Response to PwC – Tax Practitioners Board reforms

These amendments relate to the priority area identified for action in the government’s PwC response: Increasing the powers of our regulators.

The draft legislation will:

• enhance Tax Practitioners Board (TPB) investigation processes by extending the time period the TPB has to conduct investigations into suspected misconduct from 6 months to 24 months
• improve the TPB Register by lifting its functionality and utility, and increase the transparency of tax practitioner misconduct.

Response to PwC – whistleblower protections

In August 2023, the government announced a package of reform in response to tax adviser misconduct in Australia, to ensure that tax advice is provided in accordance with appropriate professional and ethical standards.

The package of reforms included:

• extending whistleblower protections for disclosures to the TPB, as well as a number of bodies that provide assistance in relation to whistleblower disclosures
• aligning some protections in the tax whistleblower regime with the Public Interest Disclosure regime,
• enabling the Australian Taxation Office, ACNC and TPB to share disclosed information more effectively.

The comment period closes on October 4.

As for the full package of reform, find that below. It’s essentially eleven pages of mammoth paperwork the Australian government has to do after PwC naughtily endeavored to help clients avoid future tax laws while destroying the firm’s — and all of consulting’s — relationship with not just the Australian Tax Office but the whole of Australian government. Nice job, guys.

Australian government response to PwC tax leak scandal by Adrienne Gonzalez on Scribd

The post Look What PwC Made the Australian Government Have to Do appeared first on Going Concern.

Inspection reports

• De Visser Gray LLP (Canada)
• Ernst & Young Limited Corp. (Panama)
• Frost, PLLC
• Harbourside CPA LLP (Canada)
• Keith K Zhen CPA
• Maggart & Associates, P.C
• Miller Wachman LLP
• PBMares, LLP
• PKF O’Connor Davies, LLP
• PricewaterhouseCoopers LLP (Canada)
• Rehmann Robson LLC
• Schneider Downs & Co., Inc
• UHY LLP
• Warren Averett, LLC
• Zwick CPA, PLLC

Expanded reports

• Baker Tilly US, LLP (12/21/2020 Report)
• Ernst & Young, S.L. (Spain) (9/9/2021 Report)
• MaloneBailey, LLP (12/17/2020 Report)

Today we’re going to talk about PwC Canada, if you want to check out the others head over to the PCAOB’s inspection report lookup.

The 2022 inspection of PwC Canada [PDF] is not great. Some might even say bad. Compared to prior year inspections and some of the catastrophic issues the PCAOB has uncovered in audit firms of all sizes over the last several years, it’s not terrible. In a time of deteriorating audit quality, an inspection report of this caliber might not stand out as bad compared to other firms but PwC US had a deficiency rate of 1.9% in its most recent inspection thereby making their cousins in the North look incompetent by comparison. Worse, PwC Canada’s last inspection was flawless, making this tumble from their own perfection more pronounced.

Of the eight audits selected by the PCAOB for inspection for the 2022 inspection of PwC Canada, 63% had Part I.A deficiencies. For one of these lucky audits, PwC Canada was not the primary auditor. The PCAOB did not ding the firm for issuing incorrect opinions on the financial statements and/or internal control over financial reporting but mostly for a lack of substantive procedures.

For 2022, the PCAOB was especially interested in reviewing revenue and business combinations; last time around it was use of other auditors that they put the magnifying glass on which makes it extra funny that PwC Canada got dinged for this very issue this time around.

Part I.A focuses on audits with unsupported opinions. For one energy issuer, the firm selected for testing a control that consisted of management’s review of the impairment analysis of long-lived assets. The firm did not identify and test any controls over the accuracy and completeness of a report, which included discounted cash flows, used in the operation of this control. (AS 2201.39)

In the same issuer, the issuer engaged an independent qualified reserve engineer to estimate its oil and gas reserves, which were then used in the (1) calculation of depreciation, depletion, and amortization; (2) impairment analysis of long-lived assets; and (3) valuation of a business combination. The reserve estimates were also used in the operation of certain controls over the above activities that the firm selected for testing. The firm did not identify and test any controls over the (1) accuracy and completeness of information prepared by the issuer, (2) relevance and reliability of data from external sources, and (3) methods and assumptions; all of which were used by the company’s specialist to
develop the reserve estimates. (AS 2201.39)

Nor did the firm:

• Test the accuracy and completeness of information prepared by the issuer and used by the company’s specialist to develop the reserve estimates; (AS 1105.A8a)
• Evaluate the relevance and reliability of external data used by the company’s specialist to develop the reserve estimates; (AS 1105.A8a)
• Evaluate the reasonableness of the assumptions developed by the company’s specialist and used to develop the reserve estimates; (AS 1105.A8b) and
• Evaluate whether the methods used by the company’s specialist to develop the reserve estimates were appropriate under the circumstances, taking into account the requirements of the applicable financial reporting framework, beyond inquiry of the methods used with the company’s specialist. (AS 1105.A8c)

In another issuer, the PCAOB identified deficiencies in the financial statement audit related to revenue, unbilled receivables, and deferred revenue. In this case, the PCAOB found the firm did not perform substantive procedures outside of the selected contracts, unbilled receivables and deferred revenue the firm selected for testing. This was a new client and therefore PwC Canada’s first audit of said issuer.

The PCAOB dinged them again for deferred revenue in the audit of an information technology issuer:

To test the existence of deferred revenue, the firm selected a sample of items for testing. The sample size the firm used in its substantive test of details was too small to provide sufficient appropriate audit evidence because the firm did not take into account the characteristics of the population in determining its sample size. (AS 2315.16, .23, and .23A)

AND they got them on the audit on which PwC was not the primary auditor. The firm’s report on Form AP omitted information related to the
participation in the audit by an other accounting firm meaning the firm was non-compliant with PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. *clutches pearls*

In its response to the report, PwC gave the usual canned speech. Apologies for the deep-fried jpg, this is how it looks in the inspection report.

2022 PCAOB Inspection of PwC Canada [PDF]

The post PwC Canada Totally Blew Their Perfect Score on PCAOB Inspections This Time Around appeared first on Going Concern.

PwC is planning to give up tens of millions of dollars of consulting work for its US audit clients to reduce the risk of conflicts of interest, challenging its rival Big Four firms to follow suit.

The accounting firm has begun to tell clients it will stop offering them some advisory services, even though they are permitted under US rules, as part of a wider revamp of its audit work.

Knowing what we know about Big 4 firms, not a single one of them would voluntarily give up millions of dollars unless they had to. So what’s up? “Sarbanes-Oxley was not proactive,” PwC US chairman Tim Ryan told FT. “It happened as a result of a breakdown in our capital markets. The reality is there’s room for improvement in our profession, both in substance and in appearance, and there’s things that we need to think about proactively.”

“There was a perception that we do a lot of consulting work for our audit clients,” he said. “We have no desire to be close to the line.”

Could it have something to do with the heat on their counterparts in Australia? Because consulting firms over there are getting proctologically inspected by all manner of politician and media professional about everything from salaries to clients.

Apparently PwC tried to get other behemoth audit firms on board with cleaning up perceptions, the others weren’t down:

PwC first floated the idea of all the large accounting firms acting together via an industry group called the Center for Audit Quality, according to three people familiar with the discussions, but it did not get cross-industry backing for its ideas.

“We have really good competitors but what they do is up to them,” said Tim Ryan, senior partner of PwC US.

Wall Street Journal‘s take on the situation says PwC is planning several new initiatives through 2026 “in areas such as auditor independence and transparency to meet growing expectations for auditors.” One of these initiatives will mean clawing back pay for high-level leadership in the event of an ethics scandal which should have been a thing all along.

The firm moved forward with the 12 policies after conversations with investors, audit committees and businesses and a review of 15 years’ worth of academic studies conducted on the profession, said Tim Ryan, senior partner at PwC’s U.S. unit. “We saw a number of stakeholders just demanding more transparency of businesses and those in the business ecosystem,” Ryan said. “As we see needs changing, we have a desire and a commitment to be more proactive going forward.”

Under PwC’s plan, it would cease providing certain consulting services by 2025 to SEC-registered audit clients such as advising a client on implementing a supply chain or other operational system. PwC also will stop helping audit clients migrate their operational data to the cloud, because these data are increasingly used in financial reporting and could pose a conflict, the firm said.

Services that are core to accountants’ skill sets will still be provided to audit clients, PwC said. For example, PwC still will sell a nonaudit-related product known as a disclosure checklist, which helps audit clients prepare for financial disclosures.

You’ll note that PwC is the trust-iest Big 4 firm, spitting out the word “trust” a whopping 202 times in its 17-page 2022 Global Annual Review. It isn’t just a word, it’s a way of life.

In its last revenue cycle, advisory’s take of $20.7 billion grew PwC’s global revenue by 23.5% compared to 7.6% growth in audit and 6.8% in tax & legal. We don’t have exact numbers on PwC US’s part of that but we do know that the US business grew 17% in fiscal 2022. So that’s a lot of money to leave on the table for the sake of perception, specifically between $50 million and $100 million in annual revenue by PwC’s estimate.

PwC to curtail consulting work for US audit clients to reduce conflict risk [Financial Times]

The post PwC Is Suddenly Scared of Making Money appeared first on Going Concern.

Reports The Guardian:

More than 1,000 partners at the UK division of the “big four” accounting firm PwC will be paid £906,000 this year, a slight fall on last year’s record payout as profits fell despite rising revenues.

Unaudited accounts released by the company showed that PwC’s UK profit fell from £1.5bn to £1.3bn in 2022, although last year’s figure was boosted by a £139m gain from the sale of its global mobility business.

Excluding the asset sale, revenues rose by 18%, from £4.9bn to £5.8bn.

More than 1,000 partners = 1,057. 1057 partners x £906,000 a piece = £957,642,000 ($1,217,641,803 USD).

Last year’s exceptional payout numbers were boosted by the sale of PwC’s Global Mobility Tax and Immigration Services business to private equity firm Clayton, Dubilier & Rice for a cool $2.2 billion (£1.83 billion), a transaction that put another £100,000 in each partner’s pocket. Actual profit per partner in the year ended June 2022 was £920,000 so while this year’s payout is down they still did quite well all things considered.

PwC UK Chair Kevin Ellis wasn’t exactly thrilled about the past year. Such as:

“In my working life, we haven’t seen a year like this year in terms of political and economic turbulence, so I’m quite comforted with how we performed against that backdrop.” (He began his career at PwC in 1984)

Still, he’s hopeful dried-up deals will get going again soon. “We’re still waiting for the moment when the deals market goes gangbusters again,” he said to Daily Mail. “What everyone’s waiting for is certainty around inflation and interest rates. Then deals will take off again.”

In the official press release on the year’s performance his communications people were he was a bit better at projecting the right narrative for a global professional services behemoth that is having the same bad year as everyone else. “Against a backdrop of political and economic upheaval, our multidisciplinary business has charted a strong course. 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.”

UK headcount including partners increased from 24,500 to 26,000 for the year and the firm invested invested £100 million in new technology including generative AI and skills training.

And this is where the money is coming from:

Overall PwC UK consolidated Group revenues, which include the consolidated revenues for the PwC UK, Channel Islands and Middle East firms, grew 16% to £5.8bn, up from 12% growth in FY22.

The Group’s consulting revenues maintained the significant growth levels of the previous year, with growth of 30% (33% in FY22). This was driven by demand in the Middle East, as clients invest in programmes to modernise 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 galvanise businesses to move towards net zero.

Expanded reporting requirements have likewise increased client demand for the Group’s audit services. Group audit revenues recorded 19% growth, with the UK practice winning a number of high profile mandates, including becoming auditor to Natwest from 2026, and being reappointed by HSBC.

Tax, which includes People & Organisation and Legal services, recorded 19% Group revenue growth, and spearheaded PwC’s global investment in Generative AI platform Harvey.

The Group’s risk and deals divisions outperformed in a tough market, each achieving 6% revenue growth.

Financial services remains one of our key industry sectors, with 15% growth in the UK in FY23.

That’s it from across the pond, PwC Global revenue should be out some time in October.

The post PwC UK Partners Will Not Be Celebrating Record-Breaking Million Dollar Payouts This Year appeared first on Going Concern.

82,217 Banco Popular customers may be affected and all of them will be getting this letter which specifically mentions “compromised personal information” being provided to PwC as part of the firm’s audit work on the bank:

Dear [person]:

We write to inform you that one of our vendors, PricewaterhouseCoopers (PwC), has been a victim of a cybersecurity breach that included certain personal information of our customers. The breach involved the compromise of a software, MOVEit, used by PwC to transfer files for a small number of its clients, including Banco Popular de Puerto Rico (Popular).

As a public corporation that trades in the stock market, Popular is required to use the services of an auditing and accounting firm such as PwC. The job of auditing Popular requires, due to its nature, that Popular share client information so that PwC can perform certain independent validations necessary for Popular to issue financial statements.

Upon learning of the incident, PwC immediately launched an investigation and ceased using the impacted software. As a result of this investigation, it was determined on July 24th, 2023, that certain of the files compromised in the incident included personal information of our customers. The compromised personal information includes your name, Social Security number, mortgage loan number ending in , and mortgage-related fields.

The remainder of the letter explains to customers several ways they can protect their credit and offers two years of free monitoring from Equifax.

PwC has audited Popular for at least two decades, 2003 was the earliest annual report we could dig up in several minutes of searching. The bank is one of the 50 largest U.S. banks by assets and has operated in Puerto Rico for more than 125 years (more than 52 years in the mainland United States).

Story spotted on Cybernews: PwC breach spills into Banco Popular de Puerto Rico

The post PwC Audit Client Gets Added to the List of Companies That Have to Send Out Letters to Customers About a Data Breach appeared first on Going Concern.

“We understand that students who missed out on face-to-face activities during the pandemic are keen to learn skills such as networking and presenting,” Ian Elliott, PwC’s chief people officer, said. “That’s why this year we’ve got an increased focus on face-to-face training, to ensure the students we work with have more exposure to in-person activities, our people and our clients.”

Privately, partners at all Big Four professional services firms, and some of the smaller accountancy groups, have acknowledged that some younger members of staff, who were at school or university during the pandemic, have “skills gaps” compared with other generations.

While many are more adept at certain tasks, such as working independently, they struggle with other basic skills that would have been expected of earlier joiners, including speaking up in meetings, collaborating with colleagues and networking.

In an interview with the Financial Times a couple months back, Elliott said basically the same thing, that new hires who spent most if not all of their college years deprived of human contact have confidence issues and seem reluctant to speak up in meetings. And in March he said PwC was “acutely aware that lockdown will have impacted students in all sorts of ways” when discussing the possibility of the firm softening its stringent hiring requirements to allow for the fact that young people today might not do as well in interviews as the students who came before them in 2019 B.C. (Before Covid) and earlier.

The plan is to have interns working in-office or at the client site for at least half the week. PwC UK has been trying to herd all of its people back into the office for longer than its American counterpart, PwC US only announced a very soft and totally-not-mandated part-time return to office for certain employees a few months ago. In 2021 UK chair Kevin Ellis tried to “create a buzz around returning to the office” and when that didn’t work he told 25,000 people on the payroll “the latest wave of AI will likely bring people back to the office. People are going to want to learn from others face to face, and the best way a human can differentiate themselves from a robot is in person.”

While there’s no denying the pandemic had a profoundly negative effect on an entire generation that missed out on the time-honored formative tradition of getting taunted by a bully in gym class to sharpen their people skills, it also appears that PwC has been looking for all kinds of reasons to get their people back under the fluorescent lights. This just happens to be a good one.

The post PwC UK Interns to Undergo Intensive Training in the Ancient Art of Pointless Water Cooler Chitchat appeared first on Going Concern.

AFR columnist Joe Aston writes:

A month ago, embattled consultancy giant PwC announced it was booting eight partners, including Sydney-based Peter van Dongen, following an internal investigation into its tax leak scandal. This week, van Dongen made his departure from PwC LinkedIn official, with a decidedly different perspective on events.

“Almost 40 years since starting as an undergraduate in the Melbourne assurance practice, I have agreed with PwC to bring forward my planned retirement by a few months, and voluntarily retire,” he wrote, adding he wished PwC nothing but great success. “Now for a short career break – and then to re-emerge for whatever is next …”

On Monday July 3, after the sacrifice of CEO Tom Seymour wasn’t sufficient to call off the hounds, PwC Australia announced via press release that eight partners have exited or were in the process of being removed from the partnership after an internal investigation. The investigation was intended to get to the bottom of circumstances that caused a high ranking partner to try and monetize confidential government tax information, or rather the investigation’s purpose was to gas up the bus and find a few people to throw under it.

Said that press release:

The investigation identified a number of specific examples where professional standards were breached with respect to misuse of confidential information or other matters reviewed by the ATO [Australian Tax Office]. Furthermore, the investigation identified a failure of leadership and governance to adequately address the matters, either at the time or whilst the matters were under investigation by the TPB [Tax Practitioners Board] or ATO. This enabled poor behaviours to persist with no accountability. These behaviours are not, and never have been, acceptable under PwC’s standards.

Two partners — Peter Konidaris and Eddy Moussa — exited the PwC partnership because their actions failed to meet their professional responsibilities and two others — Pete Calleja and Sean Gregory — were counseled out of the PwC partnership “as a result of their failure to adequately exercise their expected leadership or governance responsibilities to prevent these actions or to address the deficiencies in culture at the firm or hold others accountable for their behaviors.” Our boy van Dongen was grouped with Wayne Plummer and former CEO Tom Seymour as one of the three partners who “have been given notice of PwC Australia’s findings against them and the same process started under the Partnership Agreement to remove them from the partnership.”

Ironically, as it relates to van Dongen’s LinkedIn post, acting CEO Kristin Stubbins provided a juicy quote in that press release about the importance of accountability. “Accountability is critical to improving our culture and based on our investigation to date, it is clear that the conduct of a number of partners fell short of what was expected of them. They are now being held accountable for their misconduct. While we cannot change the past, we can control our actions today and in the future,” she said.

Or we can just sweep it under the rug and wait for it all to blow over.

It seems van Dongen’s connections did not receive that July 3 press release regarding the reasons behind his departure. From his LinkedIn post (archive):

Note to Associates: the next time someone tells you be careful not to burn bridges because public accounting is a small world, you tell them to go fuck themselves and then write a LinkedIn post congratulating yourself for leveling up to your next great opportunity after security escorts you out of the building.

The post Disgraced PwC Partner Who Got Forced Out Forgot to Mention the Disgrace in His Farewell LinkedIn Post appeared first on Going Concern.

Saw something interesting in Fortune yesterday and thought it worth sharing as it gives us a look at PwC’s AI upskilling plans and demonstrates how difficult it is to train your people on a technology moving faster than any technology before it.

Here’s what Fortune said:

For consulting firm PricewaterhouseCoopers LLP, that means rolling out mandatory training to its entire US workforce over the course of five months, starting in August. Given the concern among workers about what AI means for their jobs, PwC’s US Chief People Officer Yolanda Seals-Coffield said the first step is demystifying the technology. “The sooner we can get out and start to teach people about this technology, the sooner we can dispel some of that,” she said.

The company is dividing its workforce into three layers based on how deeply each needs to understand the new technology. The first and the broadest is mandatory training to bring all employees, regardless of role, up to speed on generative AI basics: what it is, how it works, best practices and how to use it ethically and responsibly.

A more defined second and third tier consist of software engineers, who need more technical training in order to integrate AI into internal systems, and senior leaders, who need a thorough understanding so that they can help clients transform their own businesses. “We don’t want and don’t need to have 75,000 deep subject matter technologists. That’s not the goal,” Seals-Coffield said.

Though the training roadmap is detailed, the firm explicitly chose not to extend it past December. “Quite frankly we didn’t go beyond that because we think the technology will continue to evolve,” Seals-Coffield said. “We want to make sure that we’re not stuck and committed to something that by January will need to be completely redone.”

This training got a mention in PwC’s April press release about investing $1 billion in AI as did PwC’s Responsible AI Framework, a set of warning flags for the various ways AI can go wrong. One set of risks from this framework in case you’re worried about sleeping too well at night:

Societal risks include:

• Risk of misinformation and manipulation
• Risk of an intelligence divide
• Risk of surveillance and warfare

AI solutions are designed with specific objectives in mind which may compete with overarching organisational and societal values within which they operate. Communities often have long informally agreed to a core set of values for society to operate against. There is a movement to identify sets of values and thereby the ethics to help drive AI systems, but there remains disagreement about what those ethics may mean in practice and how they should be governed. Thus, the above risk categories are also inherently ethical risks as well.

Don’t sweat it, we can trust PwC. They told us so.

PwC chief products and technology officer Joe Atkinson, fresh off a trip to World Economic Forum in Davos, said in May that the firm would be retraining its people with new technical skills so they’d be able to keep a job though their work might be very different from what they’re doing now.

Like it or not, the robot revolution is upon us. It’s going to be an awkward couple of years as historically way behind companies (looking at you, accounting firms) struggle to keep their people ahead of the curve without fully knowing what the curve could look like next month or even next week.

The post AI Is Moving So Fast PwC Couldn’t Even Commit to a Year-Long Training Program appeared first on Going Concern.

First, the press release:

Today, America First Legal’s (AFL) Center for Legal Equality sent a cease and desist letter to the accounting firm PricewaterhouseCoopers (PWC) demanding they stop using racial preferences in hiring and internship programs.

PwC is an internationally recognized name as one of the “Big Three” accounting firms. But in the United States, they are among one of the worst offenders when it comes to implementing racially discriminatory practices. Not only does PwC have two explicitly race-based internship programs (i.e., one must be a certain race to qualify), but it also administers a third and its principal internship program in a discriminatory manner. Furthermore, PwC has hiring and promotion quotas based on race and sex, discriminating against individuals at every step of their careers.

In light of recent Supreme Court of the United States cases on this topic, AFL sent a notice letter to Tim Ryan, the Chair of the U.S. Board for PwC, alerting him that these practices expose the firm to lawsuits and the partners to personal liability. The letter is also an open letter to the partnership, encouraging them to push back against these racist policies. It is also an open letter to PwC employees and applicants, urging them to come to AFL to seek representation if they are denied a job or promotion due to their race.

The Supreme Court decision they reference was in regards to “race-conscious” admissions at higher education institutions.

“Over the decades, PwC earned a reputation for integrity and excellence,” said Reed D. Rubinstein, Senior Counselor and Director of Oversight and Investigations. “But the evidence suggests that the partnership’s current leadership is prepared to burn it all on the altar of woke. Workplace discrimination and contracting based on race, color, national origin, religion, and sex are always immoral and illegal. But PwC has failed to catch this basic and self-evident truth, leading one naturally to wonder — what else have the accountants missed?”

The letter [PDF] calls out several PwC programs by name, like the Start Internship tagged “PwC’s diversity internship experience” on the firm’s site. Let’s check it out:

PwC’s official website reports at least four facially unlawful employment programs: the “Start Internship”, the “Advance Internship”, the “While You Work – CPA Acceleration Program”, and the “Enrich” program. Also, the partnership’s official statements — styled “Purpose and Inclusion Reports” for FY 2021 and FY 2022 — contain disturbing evidence of unlawful racial, national origin, religious, and sexbased quotas in hiring, promotion, and other business practices. Either the partnership is affirmatively misrepresenting its hiring and promotion practices or admitting to egregious and morally indefensible violations of the law. There is no third alternative.

PwC advertises its Start Internship Program as the “first step in PwC’s Internship Experience” for college sophomores and rising juniors.  Therefore, the Start Internship Program is an “apprenticeship or other training program” under 42 U.S.C. § 2000e(2)(d). The law provides that it is an unlawful employment practice for PwC to “discriminate against any individual because of his race, color, religion, sex, or national origin in admission to, or employment in, any program established to provide apprenticeship or other training.” However, PwC’s “Eligibility” tab for this program states that for a prospective student “[t]o be eligible for the Start internship,” that student “must self-identify as a member” of an “underrepresented racial and ethnic minority group[].” The page clarifies that these include only “Black or African American, Hispanic or Latino, American Indian or Alaska Native, Native Hawaiian, or Other Pacific Islander, or two or more races.” Persons with white skin and who “self-identify” as non-Spanish European or American, and anyone of Asian background and/or national origin, are unlawfully excluded. In fact, of the 1,007 students who participated in the Start Internship in FY22, fewer than 10% were white. Considering that the Start Internship is 2% of the size of the entire firm’s reported employment—and the program undoubtedly is a pipeline for new hires— PwC’s conduct is unlawful.

In a separate letter to the Equal Employment Opportunity Commission [PDF] — which they erroneously address to the “Equal Opportunity Employment Commission” — the group complains about PwC’s While You Work CPA Acceleration program, a paid part-time fellowship collab between PwC and Northeastern University that helps self-identified Black and/or Latinx individuals get their 150 units for CPA licensure.

From AFL’s letter to the EEOC:

PwC’s website and Inclusion Report also advertise the “While You Work—CPA Acceleration Program.” “This unique one-year program is designed to provide a path for eligible individuals who … identify as an underrepresented minority, to obtain additional credit hours and a Master’s Degree while working at PwC.” Under the “Fellowship eligibility” tab, the website clarifies that, “[y]ou are eligible to apply for the CPA Acceleration program if you self-identify as Black and/or Latinx [sic].” Accepted students “earn a tuition-paid master’s degree in accounting … [w]hile they work part time at PwC” to “earn the final 30 credit hours” needed “to meet the 150 credit hour requirement for a CPA license.” Or as Leah Houde, PwC Chief Learning Officer said, “We pay their tuition, so they come out of it with zero additional debt. Participants earn credit, gain work experience and get competitive compensation the entire time, while earning their master’s.” This program facially violates both 42 U.S.C. §§ 2000e(a)(2) and 2000e(d).

PwC inexplicably takes pride in discriminating against white, Asian, and (apparently) Jewish men with respect to their compensation, terms, conditions, or privileges of employment, and in limiting, segregating, or classifying them in ways that deprive or tend to deprive them of employment opportunities because of their race, color, religion, sex, or national origin. Its self-reported data shows a pervasive and unlawful focus on immutable characteristics at all levels, including associate, senior associate, manager, senior manager, director, and managing director.22 Similar trends appear in PwC’s workforce and promotion data. For example, the FY21 PwC Purpose Report states, “While we have made some progress year-overyear, we did see a decrease in our experienced hires for women (44% to 38%) and our Latinx experienced hires (8% to 7%) from FY20 to FY21. We want to course correct.” The very next year, PwC touted its “focus on diversity” and boasted that it was “able to increase the proportion of women, racially/ethnically diverse [sic]” hires. PwC claimed that among the 8,041 “Experienced Hires” in FY22, 43% were white,27 down from 49% in FY19.

Here’s PwC’s FY22 Purpose and Inclusion Report for anyone curious.

The accounting profession has long been accused of being too white. Advocacy and outreach group the National Society of Black Certified Public Accountants says it’s difficult to know for sure but frequently cited figures put the number of Black CPAs in the United States at three percent at most or one percent at least. “And whether you think the answer is 1% or 3% the constant is the representation of Black CPAs is horrendous and we need to do something about it,” reads their website.

The 2021 AICPA Trends report says diverse hiring of new bachelor’s and master’s of accounting graduates into accounting/finance functions at US CPA firms increased by almost five percentage points (includes multiethnic hires) compared to its report two years prior and that Asian or Pacific Islander, Black or African American, and Hispanic or Latino new graduate new hires in accounting have all increased by near one or more percentage points (1.9, 0.6, 1.6 percentage points, respectively).  Those three groups comprise their highest (or very near their highest) percentage of the whole of new graduate new hires in the history of Trends’ data collection. The AICPA has offered its Fellowship for Minority Doctoral Students program since 1969 to ensure that CPAs of diverse backgrounds are visible in college and university classrooms. For the 2021–22 academic year, the AICPA awarded scholarships to 25 full-time accounting doctoral-level students, totaling $300,000. And that’s not the only program the AICPA operates to introduce students of diverse backgrounds to accounting as a profession and to assist those individuals with tuition (on top of the many, many AICPA scholarships available to people of all backgrounds). So expect AFL to go after them next.

AFL encourages any PwC employees or applicants who believe they have been denied employment or promotion because of their skin color or sex to contact America First Legal at https://aflegal.org/hotline/. If anyone does contact them please report back.

Full letter to PwC embedded down here:

7/26/23 letter from America First Legal to PwC on discrimination by Adrienne Gonzalez on Scribd

The post Nonprofit Group Morally Opposed to Diversity Initiatives Accuses PwC of Being Unlawfully Woke appeared first on Going Concern.

As part of its severe punishment for this malfeasance — as if the catastrophic reputational damage isn’t punishment enough — PwC has issued its first compliance report required by the TPB to show that the firm is explaining to grown professional adults what the word “confidential” means. The full report [PDF] is embedded below and a copy of the TPB order can be found here, we’re going to run through the TPB requirements quickly.

From December 2022 to December 2024 PwC is required to:

1. Ensure that appropriate training is provided on a 6-monthly basis to relevant partners and staff on compliance with the Code of Professional Conduct and PwC’s policies on conflicts of interest, particularly including PwC AU’s policy for managing conflicts of interest arising from engagements of partners and staff by Treasury, the Board of Taxation and/or other Australian Government agencies. [Note: PwC sold off its poisoned public sector consulting practice so…that’s one less conflict]
2. Ensure that the Head of Regulatory Affairs (or their delegate) takes all reasonable steps to maintain the central register of confidentiality agreements, including regular status-checks with relevant partners and staff on the register.
3. Ensure that the Chief Strategy, Risk and Reputation Officer (or their delegate) reports every 6 months to the Executive on the management of the participation of relevant partners and staff in confidential tax consultations with Treasury, the Board of Taxation and/or other Australian Government agencies.
4. Provide a compliance statement to the Tax Practitioners Board every six months confirming:

• • that PwC AU has complied with the requirements detailed in (1), (2) and (3) above
  • the names of all relevant partners and staff who attended the training outlined in (1) above
  • the content of the training provided under (1) above.

Thus we are here now talking about the first compliance report and, more specifically, the training modules the firm was required to put together to adequately train tax partners and staff on the art on not screwing up. The report is, as expected, branded in PwC autumns but clearly the in-house designer was directed not to spend too much time making it fancy like they do sales materials and recruiting brochures.

I mean, compare this:

To this from a report that wasn’t required by a supervisory body as a direct result of bad behavior:

Whatever, it’s not like they’re trying to win business from anyone on the Board.

The report says PwC developed “a targeted training course focused on the Tax Agent Code of Conduct and Regulatory Consultation processes” that specifically covers professional conduct, PwC policies on conflicts of interest, and PwC policy for managing conflicts of interest arising from confidential consultations. The course was completed by all Registered Tax Agent Partners and Managing Directors (via video conference) during the period November 2022 through February 2023 and training was tracked for attendance. The training course material was then converted to an eLearning format and was subsequently provided to all Tax and Private Tax Partners and staff during May and June of this year.

Appendix B of the report includes the whole shebang (starts on page 24 in the embedded report below).

Just in case any well-educated professionals over the age of 40 are confused on the definition of NDA (as it seems Peter Collins was), there’s a bit on that too. A lot on that, actually.

It’s too bad this training didn’t exist years ago or maybe we wouldn’t be here talking about it. Oh well. Now because they were forced by the TPB to do this after the fact they have to write all of this out as if they’re going to be invited to confidential consultations with the government anytime soon. Here’s a bit of the text, some of which they highlighted in red for extra emphasis. TL;DR: DO NOT GET US IN FUCKING TROUBLE

Finally, confidential information is not limited to client information. It may also extend to any information you receive when you are working on a tax confidential consultation with government or a regulator where you have entered into a confidentiality agreement.

 Tax confidential consultations

• A tax confidential consultation is where PwC has been asked to contribute ideas or make recommendations to government, government agencies or regulators (e.g. ATO / Board of Taxation / Treasury) as they develop policy positions or undertake regulatory reform.
• PwC’s contributions may, on a case-by-case basis, analyse the technical and / or broader merits of proposals and in doing so we may identify inherent weaknesses and biases for consideration by a government, government agency or regulator.
• These consultations may be performed under normal commercial engagements, pro bono / low bono or on secondment.
• You may also be asked to sign a confidentiality agreement when working on a tax confidential consultation.

Conflicts of interest and confidential information

• Participation in a tax confidential consultation with government or a regulator means that the participant will receive and have access to confidential information.
• The participant must at all times observe their duty of confidentiality to the relevant government department or regulator. Different consultations may involve different obligations.
• The confidential information may be relevant to the commercial or strategic interests of one or more of our clients but still may not be disclosed to the client and, in many cases, cannot be disclosed even to fellow colleagues.

In some circumstances, disclosure of confidential information can constitute a criminal offence. If you are not sure about the scope or content of a confidentiality obligation, please seek advice from the Office of General Counsel and FA Risk & Quality.

Quiz: can you consult the government with one hand and clients with the other using information you aren’t supposed to monetize? No, no you cannot.

In a news release on its website the Tax Practitioners Board said:

TPB Chair, Peter de Cure AM, acknowledged the report and said ‘PwC have agreed to pro-active transparency with the TPB. This report shows steps PwC has taken to comply with the TPB’s Order, including additional training on legal and ethical issues for over 1,300 personnel.’

Mr de Cure went on to say ‘the Compliance Report states that PwC have improved their management of confidential consultations with government, including a central approval and registry process, and oversight by their Executive Board. The TPB welcomes improvements made by PwC and all tax practitioners, to enhance professional standards, including integrity, confidentiality and conflict of interest management’.

See you again in six months for the next report.

PwC Compliance Report via Tax Practitioners Board by Adrienne Gonzalez on Scribd

The post PwC’s Mandated Conflict of Interest eLearning AKA a BuzzFeed Quiz on Ethics and Integrity appeared first on Going Concern.

The Guardian:

In November 2021, a PwC partner sent an unsolicited email to a public servant spruiking the firm’s IT solutions [Ed. note: spruiking = spiel for us Yanks]. The pitch relied on information the partner had received from a colleague who was also working for the department.

“Our PwC strategic partner team has let me know that the [ICT] session on Tuesday spent some time talking about grants management and a view that the overall capability, process, involvement of other agencies as well as tech needs to be reviewed,” the partner wrote.

The PwC partner was familiar with a need to replace existing ICT software and offered the public servant a demonstration of her proposal and a briefing with more information.

Internal emails show the unsolicited approach set off alarm bells within the department and was referred to senior management for consideration.

“Obviously this is poor form,” wrote the public servant who received the pitch. “[They are] using knowledge from PwC’s unique engagement with [us] and our programs, both which they have undertaken maturity assessments of and are currently supporting”.

In reply, another senior bureaucrat wrote “there have been similar things in the past like spamming the senior executive service with invites to PwC future of work seminars and drafted scopes of work turning up that were not requested”.

This is not exactly brand new information, though the bureaucrats’ comments are. A May 2023 Australian National Audit Office report [PDF] explains how the Enterprise Program Management Office (EPMO) found out that PwC was using information obtained from one engagement to create another:

EPMO identified high levels of direct sourcing and concerns around the strategic partner using confidential information to make unsolicited proposals. In November 2021, EPMO identified an instance where the strategic partner offered an Information Technology solution to DAWE as a result of insights gained by the strategic partner firm from attending ELT [executive leadership team] meetings.

EPMO implemented processes to reduce direct sourcing and continued monitoring against direct sourcing levels as part of its reporting. Senior representatives of DAWE [the old name for the department of agriculture] met with and wrote to the strategic partner in relation to contractual confidentiality requirements in response to the concerns around unsolicited proposals.

No mention of the word “spam” in that report, sadly.

A PwC spokesperson told The Guardian the firm “acknowledges the feedback from our client”.

“When the matter was raised by the client we addressed the feedback immediately and the engagement continued,” they said.

In earlier coverage, Department of Agriculture, Forestry and Fisheries (DAFF) deputy secretary Cindy Briscoe explains how her department realized confidential information from the ELT meeting made its way through PwC. Because PwC couldn’t help but reveal what it knew:

“[The email] acknowledged that their colleague had provided feedback, that in a recent executive leadership team meeting, there was a discussion around — in this case it was grants — and that ‘we believe we have some products that may be able to assist’,” Briscoe said.

Briscoe continued to tell senate estimates the email came from a different part of PwC, leading the department to conclude that information from the senior leadership meeting was passed on elsewhere.

The public servant added advice was sought by the department, which said it would be a “perceived conflict of interest because it didn’t actually result in any harm from any confidential information being leaked”.

DAFF secretary Andrew Metcalfe added the way the unsolicited proposal had been handled showed how carefully the department was managing the PwC contract.

“On that occasion, we were not happy with what the firm did and we let them know that,” the secretary said.

Meanwhile, EY Oceania CEO David Larocca told a parliamentary inquiry this week that EY is nothing like PwC, saying EY “takes its ethical obligations extremely seriously.”

“At EY, we don’t deliberately breach confidentiality,” he said. Someone write that down, it may come in handy later.

Public servants complained about PwC ‘spamming’ them with unsolicited work offers, emails reveal [The Guardian]

The post PwC Australia Spammed Government Offices to Sell Solutions to Problems They Weren’t Supposed to Know About appeared first on Going Concern.

We’ve been informed of a situation at PwC, one that apparently has been brewing for days but that we only found about this afternoon because browsing the r/pwc subreddit isn’t something we do on a regular basis. Thank you to a tipster for reaching out and providing us with all the details. They write:

PwC did not pay 3,000 of their interns. Someone in payroll messed up, and we weren’t paid. Many of my fellow interns won’t sign full-time offers because of this. HR is dismissive and won’t resolve the issue. We were also supposed to get our sign on bonus with this paycheck. It’s been a month since we have been paid. One intern couldn’t pay his rent and is sleeping in his car in NYC.

Bet you there’s more than one PwC intern in NYC sleeping in their car tonight, rent’s no joke up there.

Additional information from our tipster: interns were supposed to be paid July 7th, the last check they received was June 20th. “HR has no idea what’s going on,” they said. “They’re blaming the banks and Federal Reserve.” There’s been no email communication from the firm to interns, rather individual interns have been calling to check the status of their paychecks, which are supposed to include bonuses, and having trouble reaching anyone at HR due to a backlog of thousands of interns wondering where TF their money is. We were provided screenshots that showed the intern bonus was “successfully completed” (paid) effective 6/30.

The issue may be related to the firm switching from ADP to DayForce a couple months ago, it’s unclear. Calendars also show something called “Workday Payroll Data Freeze,” no one seems to know what that is or if it’s related to the intern pay issue.

“Leadership is acting like everything is okay and PwC is the best accounting firm to work for,” added our tipster. “The firm is trying to not make it seem like anything is wrong. That’s why they haven’t sent us anything. And that’s why HR was so dismissive on the phone and through chat.” Several people on r/pwc who did get through to HR said they were told interns would be paid on July 20, a full month after their last paychecks.

A couple r/pwc posts on the subject:

Pay
by u/UltimateLyrker in PwC

Have any interns been paid yet for the period ending June 30th?
by u/Particular-Plate6791 in PwC

We’ll keep you posted if we hear more. If anyone can host displaced PwC NYC interns in the meantime let us know.

The post PwC Has Not Paid Its Interns (UPDATED) appeared first on Going Concern.

While us Yanks were picking up hot dog buns and fireworks in preparation for the 4th, PwC Australia was pushing out a press release to announce eight partners connected to the tax scandal were on their way out (on top of the four already gone). The news release said the firm “has reached conclusions in its investigation into the handling of confidential Treasury information and past failures in professional, ethical or leadership responsibilities.”

“Today’s announcement is the latest in a series of actions that PwC Australia has taken over the past several weeks to take accountability, reshape the firm’s culture, and most importantly, re-earn trust with its stakeholders,” it said. On the PwC site, “has taken” is bolded and links an earlier PwC press release: PwC Australia appoints new CEO Kevin Burrowes; intent to divest Government Business to Allegro Funds. See our take on that here: PwC Sold Off Its Scandal-Plagued Government Consulting Business For 67 Cents

Eight partners have exited or are in the process of being removed from the partnership as a result of the internal investigation’s findings, said PwC. It’s a nice twist on the “we investigated ourselves and found no wrongdoing” trope, in this adaptation wrongdoing was found but somehow limited to only a handful of partners who are now sludgy meat piles splattered across the pavement underneath the bus.

In response to PwC’s announcement, Australian Financial Review columnist Neil Chenoweth points out how strange it is that no one at PwC was actually running this show:

According to PwC, not only was no one directing it, the tax leaks actually ran themselves – look, no hands! A sort of immaculate misconception, with no guide rail and almost no tax partners.

Perhaps most surprising, Monday’s list of defenestrated partners includes only two people in the tax practice – Eddy Moussa (tax controversy) and Richard Gregg (R&D) – because “their actions failed to meet their professional responsibilities”. Peter Konidaris is the only other partner in this direct category, and he’s in infrastructure! Talk about swimming outside your lane.

PwC also lists four partners who have already left the firm including Collins, but remarkably, while this was a scheme that targeted international tech companies, PwC says it didn’t involve much in the way of international tax partners or transfer pricing specialists.

Right, let’s go back to PwC’s groveling admission:

The investigation identified a number of specific examples where professional standards were breached with respect to misuse of confidential information or other matters reviewed by the ATO. Furthermore, the investigation identified a failure of leadership and governance to adequately address the matters, either at the time or whilst the matters were under investigation by the TPB or ATO. This enabled poor behaviours to persist with no accountability. These behaviours are not, and never have been, acceptable under PwC’s standards.

Consequently, Peter Konidaris and Eddy Moussa have exited the PwC partnership because their actions failed to meet their professional responsibilities. For similar reasons, Richard Gregg has been given notice of PwC Australia’s findings against him and a process has started under the Partnership Agreement to remove him from the partnership.

Additionally, Pete Calleja and Sean Gregory have exited the PwC partnership as a result of their failure to adequately exercise their expected leadership or governance responsibilities to prevent these actions or to address the deficiencies in culture at the firm or hold others accountable for their behaviours. For similar reasons, Peter van Dongen, Wayne Plummer and Tom Seymour have been given notice of PwC Australia’s findings against them and the same process started under the Partnership Agreement to remove them from the partnership. Tom Seymour’s recommended exit is earlier than his previously announced retirement date.

These departures are in addition to the four former partners: Michael Bersten, Peter Collins, Neil Fuller, and Paul McNab, who were previously named as being involved in confidentiality breaches.

Because their titles are not included in PwC’s press release, we’ll snag them from LinkedIn and wherever else we can find them. For posterity, natch.

Peter Konidaris – National Government, Health, Infrastructure & Defence Leader

Eddy Moussa – Eddy’s just says Tax Partner, hilariously the description says he’s on PwC’s “tax controversy and dispute resolution team, providing legal advice to clients on tax matters and supporting clients in disputes with the Australian Taxation Office.”

Richard Gregg – No LinkedIn for him, R&D Tax Incentive

Pete Calleja – Partner in PwC Australia’s Financial Advisory business

Sean Gregory – Partner, responsible for strategy and reputation; including brand, government and regulatory affairs, mainstream and digital media, risk and legal affairs. Let’s add this part from his LinkedIn, too: With experience in the private and government sectors, Sean provides advisory services in PwC’s Deals unit, including financial due diligence; vendor due diligence; vendor assistant; bid support or defence; capital markets; delivering deal value; and, M&A tax services.

Peter van Dongen (great name) – Immediate Past Chairman, Board of Partners. Says his description, “Peter is the immediate past Chairman of PwC Australia’s Board of Partners, remains a Board Member and leads the firm’s national Non-Executive Director Program, Many Hats. His role is to help Australian Boards and NEDs navigate the complex issues they face, connect them to relevant networks and insights, and together – help shape a more prosperous Australia.”

Wayne Plummer – Corporate Tax at PwC. You knew this guy was going to get thrown to the wolves: “Wayne is an Australian Corporate Tax Partner and advises a range of multinational companies in relation to their Australian tax affairs.”

Not included in the newest list: Tom Seymour. We know who he is and what he did.

The next guys were already named and shamed prior to Monday’s press release. Not included: Peter Collins, this is all his fault.

Michael Bersten – Lawyer and ex-Tax partner pictured below. ATO is the Australian Tax Office.

Neil Fuller – Again, no LinkedIn for him. The Klaxon piece linked above shows a contact card listing his division as International Tax and Transaction Services.

Paul McNab – Left PwC for DLA Piper in 2020.

“Accountability is critical to improving our culture and based on our investigation to date, it is clear that the conduct of a number of partners fell short of what was expected of them,” said acting CEO Kristin Stubbins who has been apologizing for this thing for months. “They are now being held accountable for their misconduct. While we cannot change the past, we can control our actions today and in the future. Moving forward, the PwC Australia management team will continue to take all appropriate steps to improve the firm’s culture and standards,” she or whoever writes her quotes for press releases said.

“PwC Australia’s investigation to date has been extensive and whilst further work in some areas remains ongoing, these conclusions are an important milestone,” read the press release. “The firm is fully committed to working cooperatively with all relevant regulatory bodies.”

The leak was referred to Australian federal police for criminal investigation in May. PwC might need a bigger broom and an even bigger rug to get this swept under.

The post Fuel Up the Bus, PwC Australia Has Named and Shamed Eight Partners Tied to the Tax Leak Scandal appeared first on Going Concern.

That leaves just one Big 4 firm. Here’s what PwC had to say about the possibility of layoffs:

So far PricewaterhouseCoopers LLP is the only one of the “Big Four” accounting firms that has not announced layoffs and said it had no plans to. The firm did allude to attrition in a statement to The Business Journals, but stressed that it did not serve to reduce overall headcount — and that it occurred year-round.

“We are not planning layoffs currently as a firm,” the company said in a statement.

PwC said “attrition is a natural part of our high-performing culture, so too is our philosophy of shared success.”

Attrition seems to be the word of the day. KPMG said in their Monday statement that “economic headwinds, coupled with historically low attrition” led the firm to make the decision to let people go. As much as we at Going Concern get a thrill out of calling bullshit, it looks like firms of all sizes are dealing with low attrition and therefore higher numbers of people who are choosing not to jump. Because leavers are specifically accounted for in firms’ business plans, that means churn must be forced if it doesn’t happen naturally. So that’s where we are.

We’ve heard from sources inside PwC that performance matters much more this year than last year and various posts on Reddit and Fishbowl confirm exactly that. See:

Beware of “performance-based” layoffs
Is PwC doing silent layoffs and calling it performance based?

And this recent thread on Fishbowl:

How has PwC not had layoffs make the news? I’ve heard so many friends getting silently laid off this past month, but not sure what’s true.

Posts all seem to use the same creepy language about people disappearing as if they were raptured or something.

On the other hand, you have plenty of OG commenters who say this happens every year (it does, to an extent) and that recent performance-based separations are just that, performance-based. If we believe what PwC sources have told us, it’s just that the definition of low performer has widened to include more people.

Stay billable, friends.

The post PwC Goes on Record to Say There Will Not Be Layoffs (Not Loud Ones Anyway) appeared first on Going Concern.

In July 2019, ESL announced that a review had been conducted into its prior year financial statements. Following this review, ESL disclosed significant prior year accounting adjustments to the 2017 financial year. Said the FRC, KPMG and engagement partner Nicola Quayle breached Relevant Requirements in some of the areas which were subject to prior year adjustments.

The audit went bad around the following:

• property transactions entered into by ESL, and the disclosure in the financial statements regarding those transactions. These transactions had a
• significant effect on ESL’s financial performance, and without the profit generated from them, ESL would have been in a loss-making position;
• dilapidations; and
• accounting for a subsidiary company.

Regarding the property transactions, auditors failed to obtain sufficient appropriate evidence of services provided by ESL in those transactions to allow revenue to be ascribed to the provision of those services and recognized up-front in the financial year. On top of that, the disclosures in the financial statements relating to the property transactions did not adequately explain the impact of those transactions on ESL’s financial performance.

The failings were serious but not pervasive, said the FRC.

And here’s the pound of flesh:

Against KPMG:

• A financial sanction of £1.35 million, discounted for admissions and early disposal to £877,500. KPMG’s poor disciplinary record was noted as an aggravating factor;
• Non-financial sanctions, comprising:
  • a Severe Reprimand;
  • a declaration that the 2017 audit report did not satisfy the Relevant Requirements; and
  • an order requiring KPMG to take specified actions to prevent the re-occurrence of the contravention.

Against Ms Quayle:

• A financial sanction of £70,000 discounted for admissions and early disposal to £45,500. Notable aggravating factors were Ms Quayle’s seniority at the point of signing the audit report and past disciplinary record;
• Non-financial sanctions, comprising:
  • a Severe Reprimand; and
  • a declaration that the 2017 audit report did not satisfy the Relevant Requirements.

Engagement partner Nicola Quayle quit performing statutory audits in 2020 and no longer holds a practicing certificate. She has pledged not to carry out statutory audits or sign their reports going forward.

“There were some serious failings admitted in this case; although they were not pervasive throughout the audit,” said FRC Deputy Executive Counsel Claudia Mortimore. “The case highlights the importance of, firstly, the auditor’s work in ensuring that disclosures in financial statements enable users to understand the impact of particular transactions on the entity’s financial performance; and secondly, ensuring that advice received in technical consultations is effectively implemented.”

PwC’s reprimand for their 2018 audit of ESL was a bit less harsh. Both the firm and the engagement partner received sanctions, neither got mentions of poor disciplinary records.

Against PwC:

• A financial sanction of £3.5 million adjusted for the mitigating factor of exceptional cooperation and further discounted for admissions and early disposal to £1,990,625.
• Non-financial sanctions, comprising:
  • a Severe Reprimand;
  • a declaration that the 2018 audit report did not satisfy the Relevant Requirements; and
  • an order requiring PwC to take specified actions to prevent the occurrence of the contravention.

Against Mr Storer:

• A financial sanction of £90,000 adjusted for the mitigating factor of exceptional cooperation and further discounted for admissions and early disposal to £51,187.50.
• Non-financial sanctions, comprising:
  • a Severe Reprimand; and
  • a declaration that the 2018 audit report did not satisfy the Relevant Requirements.

There were numerous serious failures in relation to PwC’s audit work on ESL’s property transactions, including a failure to identify revenue recognition on those transactions as a significant risk of material misstatement; failing to carry out a formal consultation on the technical aspects of accounting for these transactions; a lack of challenge of management’s selection of accounting policy; and a lack of professional judgement in their work on the transactions. Furthermore, the disclosures in the financial statements failed to adequately explain the impact of the property transactions on ESL’s financial performance.

PwC and Storer assisted in the investigation by making comprehensive early admissions (including admissions relating to matters which were not in the communicated scope of the investigation) for which the FRC gave a discount to the financial sanction of 12.5% (in addition to the 35% reduction for early settlement) to reflect what the FRC describes as exceptional cooperation as a mitigating factor.

ESL almost imploded in December 2019 until saved by an investment of £55 million from shareholder and financier DBay Advisers. A couple months before getting rescued by DBay, ESL’s terrible revenue recognition led to a £2 million accounting error, thus leading the FRC to open inquiries into its two most recent auditors.

Sanctions against KPMG LLP and former audit partner [FRC]
Sanctions against PricewaterhouseCoopers LLP and audit partner [FRC]

The post KPMG Got Extra Roasted By the FRC Thanks to the Firm’s “Poor Disciplinary Record” appeared first on Going Concern.

Reports Financial Times:

The firm’s junior auditors were told on a webcast last week that the pay band for one cohort would be frozen while others would increase by 3 or 6 per cent, resulting in real-terms pay cuts, firm insiders told the Financial Times. UK inflation stood at 8.7 per cent in May.

The presentation followed a memo to employees in which PwC’s chief people officer Ian Elliott said pay rises would be smaller than last year when it gave out record increases to retain staff in the face of a hot labour market and soaring inflation.

One junior auditor told the FT they were “shocked” that pay was being frozen for many senior associates in the audit division and that they and others might quit as a result. PwC’s most junior auditors are paid between £26,000 and £34,000 a year depending on location, an insider said.

Quick recap on PwC UK partner pay the past few years:

• 2019: £765,000
• 2020: £685,000 (fuck you, Rona)
• 2021: £868,000
• 2022: £1,000,000 thanks in part to the £1.83 billion ($2.2 billion USD) sale of a business providing tax advice for companies moving staff overseas to US private equity firm Clayton, Dubilier & Rice

Two weeks ago, Financial Reporting Council chair Jan du Plessis told FT audit firms should — and can — pay their junior auditors more. “There has been a significant increase in profitability at all the audit firms. They have the resources available to increase the pay levels of more junior people that they want to attract into their firms and it’s up to them whether they want to do so,” he said. Guess PwC UK leadership didn’t see that article. Suck it, du Plessis.

The rest of the FT article lines up with what we’re seeing here on our side of the world: too many folks on the bench and firms being too generous with performance reviews, the latter being a result of firms intentionally taking it easy on people last year to hang onto talent and historically low attrition preventing the usual churn baked into firms’ business models.

While parts of the business were growing strongly, Elliott said in his memo that “the market has been challenging”.

There would be a similar number of promotions to last year (which are typically accompanied by big automatic pay rises attached to seniority), he said. But while the bonus pool would be bigger this year, average individual awards would be smaller because staff numbers had grown, he added.

Some PwC divisions have also significantly increased the number of staff being placed on “performance improvement” programmes, according to people at the firm. These programmes are typically used by consulting firms as a prelude to removing a proportion of employees each year.

They were less prevalent as the sector battled to hire and retain staff to keep pace with post-pandemic demand for advice on deals and ways to adapt business models to the rise of online commerce.

A PwC insider told the FT that one team had gone from having only a small fraction of staff whose performance was under review last year to as many as 15 or 20 per cent this year.

“Following record pay increases last year, we have again invested in salary uplifts across our business,” said PwC to FT. “Our decisions are informed by the firm’s performance, external market conditions and the investments we make in response to client demand.”

The post Already Underpaid PwC UKers Get Told Bonuses Will Suck This Year appeared first on Going Concern.

Yesterday’s news cycle was quickly dominated by news that KPMG US would be slashing its workforce by 5% but we would be remiss not to remind everyone that while us Americans were blissfully snoozing away on Sunday night, PwC Australia sold off its poisoned consulting business. This is the latest of many moves by the firm to shake off the reputational damage from former partner Peter Collins leaking confidential government tax information back to the firm.

From the firm’s press release on Sunday:

PwC Australia has announced today that it has entered into an exclusivity agreement to divest its federal and state government business to Allegro Funds for $1. Both parties are targeting signing a binding agreement by the end of July.

The divestment will create two independent firms, while ensuring that there will be no disruption in vital services to public sector clients. PwC Australia will work with Allegro Funds to ensure a seamless transition.

“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the c.1,750 talented people in our government business. This transaction will result in the first pure play, at scale, government business in the market. This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders,” said Justin Carroll, Board Chair, PwC Australia.

For PwC Australia, the transaction will result in an exit from all government advisory work, at both the state and federal levels. The divestment of this business, which represented c. 20% of the firm’s FY23 revenue, will impact the firm’s future size and operations. However, it allows the firm to move forward with predictability and focus, and ensure stability for the rest of PwC’s clients in other parts of the business.

“This transaction marks a new direction for PwC Australia and puts us on a path for success as we focus on our people and serving clients across Australia and our critical role in supporting the capital markets,” said Carroll.

“What I’m concerned about is the cultural practices that have now been revealed at PwC morphing across under a different name and title,” said NSW Labor senator Deborah O’Neill who absolutely will not let this thing go. The firm will not say if the business’s 130 partners and nearly 2,000 staff will be guaranteed to keep their jobs as part of the deal.

The firm also announced the appointment of a new CEO. PwC veteran Kevin Burrowes, who first joined the firm in 1986 and is currently the PwC Network’s Global Clients & Industries leader, will step into the CEO shoes vacated by Tom Seymour in May. He will become a partner in PwC Australia and relocate to Sydney upon completion of the Australian immigration process, said the firm. As well as working for PwC earlier in his career, Kevin has held senior executive positions at IBM, Credit Suisse and Royal Bank of Scotland. He has been a PwC partner for 19 years, having re-joined PwC UK in 2009. He has lived and worked in London, New York, Singapore and Frankfurt.

Says the press release:

The appointment of a new CEO and the intent to divest the government business is the latest in a series of actions taken by the firm to enhance its governance, culture and accountability. As previously stated, PwC’s clients were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax.

Meanwhile, current acting CEO Kristin Stubbins was getting grilled by parliament yesterday, vowing that those involved in the leak will be named and shamed (this despite the firm releasing information in dribs and drabs up until now) “This is a comprehensive, detailed investigation and as you can appreciate, we need to get it right,” she told the inquiry. “When the investigation is complete, which it will be shortly, we will be naming all those people who did anything wrong and there will be appropriate accountability.”

And now you’re all caught up. For today.

The post PwC Sold Off Its Scandal-Plagued Government Consulting Business For 67 Cents appeared first on Going Concern.

It is understood a term sheet about a potential deal has been drawn up outlining details of the deal. But there are ongoing discussions about the remit of any new independent firm and whether it will work only for the public sector or also take on private sector clients.

AFR Weekend has been told that the potential deal could include 100 partners and 1000 staff, or roughly 10 per cent of the existing firm. That means the business would theoretically generate about $200 million to $250 million in billings.

The partners that would be part of this deal believe that the move will provide them with independence from PwC and allow them to again bid for government contracts.

A PwC spokesman told AFR they would not “comment on market speculation”.

For months now PwC has been dealing with a PR storm, the loss of critical clients, and government inquiries directly related to the leak of confidential government tax information by ex-partner Peter Collins, information that was then leveraged to hatch tax avoidance schemes to sell to clients. The tax scandal has destroyed the firm’s existing engagements and brought the issue of government overreliance on outside consultants to the mainstream. Labor senator Deborah O’Neill, who has been verbally handing PwC their ass since this started, is not impressed by this plan. “If this potential deal is to be believed, it indicates that, yet again, PwC is putting its reputation and profit ahead of truth-telling,” Senator O’Neill said.

The Senate Finance and Public Administration References Committee released a damning report earlier this week (embedded below, published to their website as PwCAcalculatedbreachoftrust.pdf LOL) that outlines exactly what happened with Collins and how the firm used thousands of claims of legal professional privilege to conceal its internal documents from the Australian Tax Office. “The question of who inside PwC was involved in the misuse of confidential information remains unanswered,” reads the report.

Because the Tax Practitioners Board (TPB) found that PwC had failed to have adequate arrangements in place to manage conflicts of interest that arose in relation to its activities as a registered tax agent and breached subsection 30-10(5) of the Code of Professional Conduct, PwC is required to take certain steps to manage conflicts of interest.

These steps include:

• ensuring the education of its staff about conflicts of interest;
• ensuring the coordination of registration of conflicts;
• introducing a better governance and reporting system within the firm; and
• twice a year PwC will be required to report to the TPB on the progress of the changes they are making.

Nowhere does it say “sell off the cursed business and resume as usual.”

A recent survey by public policy think-tank The Australia Institute found that four-in-five Australians (79%) want PwC banned from receiving new government work, nearly half of those surveyed think the ban should be permanent. Just 2% did not think PwC should be banned from government work, while 19% did not know or were not sure.

45% thought the ban should be permanent while the remainder supported a ban for at least some period of time, either less than two years (5%), between two and five years (12%), or between five and 10 years (16%).

The full PwCAcalculatedbreachoftrust.pdf report for your reading pleasure:

PwC: Calculated Breach of Trust by Adrienne Gonzalez on Scribd

The post PwC Is Allegedly Looking to Sell Off Its Poisoned Government, Education and Healthcare Practice appeared first on Going Concern.

According to Tech Crunch, a dozen or so US agencies have active MOVEit contracts, among them the Department of the Army, Air Force, and the FDA. AFR is reporting PwC and EY are among the affected, too.

The cybercrime group Cl0p first broke into the file service, which is called MOVEit, in late May and began stealing data from entities including US federal agencies, energy giant Shell and the BBC. Rival consultancy EY was also affected in the breach, which is growing larger by the day as companies reveal they have been targeted.

On Monday, PwC Australia confirmed it had used the software for a “limited number” of its clients, adding to its woes stemming from the Collins tax scandal.

“We are aware that MOVEit, a third-party transfer platform, has experienced a cybersecurity incident which has impacted hundreds of organisations including PwC,” a PwC spokesman said. He declined to comment on the ransom demand.

That spokesperson told AFR the firm stopped using MOVEit as soon as they were aware of the breach and spoke to clients whose files were exposed, along with opening an investigation. EY meanwhile:

A spokeswoman for EY said it learned of the breach on May 31, when an American firm called Progress, which makes MOVEit, confirmed the vulnerability in its software. “We immediately launched an investigation into our use of the tool and took urgent steps to safeguard any data,” the spokeswoman said. She also declined to comment on the ransom demand.

The EY spokeswoman said most of its systems that use the transfer service were not compromised but the firm was manually investigating where data may have been accessed and communicating with customers and authorities.

It seems the ransomware group is not interested in government data at all. “If you are a government, city or police service do not worry, we erased all your data. You do not need to contact us. We have no interest to expose such information,” reads Cl0p’s dark web leak site according to CNN. We were not able to connect to the .onion to confirm (502 Bad Gateway), others seem to be having the same problem.

We were able to access today and read their totally cool message pic.twitter.com/3cuXqyp2Xr

— vx-underground (@vxunderground) June 16, 2023

It’s said the group gave non-government breach victims until last Wednesday to reach out and discuss ransom terms, after that Cl0p would publish names. So far they’ve listed Boston Globe, East Western Bank, biotech company Enzo Biochem, Microsoft-owned AI company Nuance, 1st Source, First National Bankers Bank, and Shell, among others.

A joint advisory issued by the Federal Bureau of Investigation (FBI) and the Cybersecurity and Infrastructure Security Agency (CISA) explains how exactly MOVEit was compromised:

According to open source information, beginning on May 27, 2023, CL0P Ransomware Gang, also known as TA505, began exploiting a previously unknown SQL injection vulnerability (CVE-2023-34362) in Progress Software’s managed file transfer (MFT) solution known as MOVEit Transfer. Internet-facing MOVEit Transfer web applications were infected with a web shell named LEMURLOOT, which was then used to steal data from underlying MOVEit Transfer databases. In similar spates of activity, TA505 conducted zero-day-exploit-driven campaigns against Accellion File Transfer Appliance (FTA) devices in 2020 and 2021, and Fortra/Linoma GoAnywhere MFT servers in early 2023.

A June 2020 info article by EY entitled Ransomware: to pay or not to pay? covers the issue extensively, ultimately advising readers not to pay up . “While we at EY do not suggest organizations pay ransoms, we do acknowledge this option exists,” it reads. “We have therefore created this concise guide on the subject with the caveat that organizations who are faced with this scenario should seek legal counsel, recommendations from any cyber insurance providers, input from law enforcement as well as expert security advice before making any final determination as to the appropriate course of action.”

The post EY and PwC Among the Many Entities Caught Up in the MOVEit Cybersecurity Breach Ransom appeared first on Going Concern.

KPMG boss Andrew Yates publicly rebuked PwC for the tax scandal that is impacting the entire multibillion-dollar financial consulting industry while apologising for his firm’s own failings, which include 1000 staff cheating on an exam about acting with integrity in their work.

Yates told a Senate committee on Wednesday that it was essential that government can have absolute trust in the private sector companies it works with.

“That’s why the PwC issue is so disturbing. Based on the findings of the Tax Practitioners Board, and the more recent revelations from Senate estimates, the conduct at PwC was clearly unethical and unacceptable,” he said.

He added that had KPMG been in the same position, the firm would have released the names of any staff involved. “There would have been strong action taken by our chairman and board, and subject to any legalities that I’m unaware of, the names would have been shared,” he said.

PwC tax scandal disturbing and unacceptable, says KPMG boss [Sydney Morning Herald]

The post Finally Having Something to Roast Them About, KPMG CEO Takes This Opportunity to Talk Sh*t About PwC appeared first on Going Concern.

Bloomberg has the details:

Australian Retirement Trust, which manages A$240 billion ($159 billion) for 2.2 million members, “will not be undertaking any new contracts with PwC at this time,” a spokeswoman told Bloomberg in an emailed statement.

PwC stands to lose millions of dollars in revenue as clients review their relationship with the accounting agency. The firm describes itself as an “active participant” in Australia’s A$3.4 trillion pension industry, known locally as superannuation, according to its website.

AustralianSuper and Australian Retirement Trust manage $514 billion AUD ($342 billion USD) between them. AustralianSuper also has a $1.3 million audit contract with PwC it is reportedly reviewing. “AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” said a fund spokesman to numerous media outlets.

PwC has already been effectively banned from doing business with the Australian government.

The interesting thing about all of this fallout now is that up until recently it looked like the entire thing was going to be swept under the rug, the thing having happened way back in 2015. Leaky former partner Peter Collins was banned from practice for two years in January and the Tax Practitioners Board — which handed out Collins time out — ordered PwC to review and improve its conflict of interest training. PwC issued the usual “this is bad and we’re sorry” statement and that was mostly that. Or so they thought.

For the whole background on the PwC tax scandal, check out this killer reporting from Australian Financial Review. AFR has been on top of this from the very beginning and might be singlehandedly responsible for preventing the firm from receiving only a light slap on the wrist for all of this for which we salute them: The inside story of PwC’s tax scandal.

The post Naughty PwC Is Bleeding Big Pension Clients appeared first on Going Concern.

At issue, if you make your residence under a rock, is how former PwC partner Peter Collins took confidential information he received through consulting the government on tax matters and leveraged this information to advise large multinational clients on how to avoid the tax law he’d just consulted on, a measure that was specifically designed to prevent tax avoidance. Collins is now barred from practice (for a couple years) and may face criminal charges. Internal emails exposed by legislative committee in May showed that dozens of partners and staff received emails discussing how the firm could “exploit, for profit, information the former partner had gleaned while advising the government on creating the multinational tax avoidance laws.”

The letter is credited to former assurance head and acting CEO Kristin Stubbins who must have done something awful in a past or current life to be shoved into this position after former CEO Tom Seymour stepped down. The words you are about to read should have been posted in 8pt text to truly capture the minimizing within but then no one would read it.

Monday, 29 May 2023

Open letter from PwC Australia acting chief executive Kristin Stubbins

I want to apologise on behalf of PwC Australia. For sharing confidential government tax policy information and for betraying the trust placed in us.

Specifically, I apologise to the community; to the Australian government for breaching your confidentiality; to our clients for any questions this may have raised about our integrity and trustworthiness; and to the 10,000 hard-working, values-driven PwC Australia partners and staff who have been unfairly impacted.

Although investigations are still underway, we know enough about what went wrong to acknowledge that this situation was completely unacceptable. No amount of words can make it right. But I am fully committed to taking all necessary actions to re-earn the trust of our stakeholders. And, as we work through this process, I am committed to being fully transparent.

Our previously announced investigation, supported by external counsel, is well underway and so I wanted to set out what we know so far, explain the steps we have taken and are committed to take, and address some of the questions that remain about what happened.

What happened

We failed in three ways.

First, there was a clear lack of respect for confidentiality.
A former PwC Australia tax partner, Peter Collins, breached confidentiality in connection with tax consultations with the Department of Treasury and the Board of Tax in which he participated. Contrary to the obligations he undertook with the government, as well as PwC policy and values, he shared information with certain PwC Australia personnel and a limited number of overseas PwC personnel.

Second, PwC Australia did not have adequate processes and governance in place.
There was poor decision making. The breach of confidentiality exposed weaknesses in our culture and processes. What is evident now, is that we failed to conduct an appropriate root cause investigation and thorough assessment of accountability for both the conduct at issue and the culture that allowed the underlying conduct to occur. That was the result of a failure of leadership and governance. This is deeply regrettable and has led us to where we are today.

Third, we had a culture at the time in our tax business that both allowed inappropriate behaviour and has not, until now, always properly held our leaders and those involved to account.
At the time this occurred, there was a culture of aggressive marketing in our tax business. Over a period, this aggressive behavior and drive for growth permeated certain parts of our leadership and allowed for profit to be placed over purpose. Our governance process failed to identify and keep this in check.

What we are doing about it

In 2021, PwC Australia commissioned a review of the effectiveness of our tax governance and internal control framework, which was conducted by former Australian Taxation Office (ATO) official Bruce Quigley. The ATO participated in this review and all recommendations were implemented, including prohibiting market facing partners from participating in confidential tax consultations.

However, it is clear, in hindsight, that PwC Australia did too little too late.

As we have commenced our broad investigation to determine root causes, we have taken the following actions over the last few weeks:

• Tom Seymour stood down as CEO on 8 May 2023;
• Two Executive Board members have stood down from their leadership positions;
• We commenced a comprehensive investigation, with the assistance of external counsel, into who may have shared or misused confidential information in connection with these matters;
• On 15 May 2023, we announced that Dr Ziggy Switkowski AO will lead an independent review of the firm’s governance, accountability and culture; and
• Tony O’Malley, a PwC partner and legal and governance expert, was appointed on 15 May as Chief Risk and Ethics Leader for PwC Australia. He will have responsibility for all aspects of risk and ethics at the firm and will help lead the implementation of the independent review’s findings.

My team and I are committed to taking any and all further action to enhance accountability, governance, and culture. To that end, we are announcing the following additional actions:

Accountability

• PwC Australia has directed 9 partners to go on leave, effective immediately, pending the outcome of our ongoing investigation. This includes members of the firm’s Executive Board and Governance Board.

Governance

• Two independent, non-executive directors will be appointed to PwC Australia’s Governance Board and this process is underway. External board members will bring independent, outside-in perspective and objectivity to the firm’s governance.
• In addition, the Chairs of the Governance Board and its designated risk committee have decided to step down from their respective roles. These decisions are in addition to the leadership actions already announced.
• PwC Australia has commenced a process to ringfence the provision of services to Federal Government Departments and Agencies to enhance our controls to prevent conflicts of interest. We are moving to quickly establish separate governance and oversight arrangements for the business by the end of September. It will cover all services to Federal Government Departments and Agencies, include people, operations and governance within its perimeter and be operationally ringfenced from other businesses within PwC Australia. The business will have a standalone Executive and Governance Board who will have the responsibility to consider the strategic options for the business. This will establish independence and enhance controls relating to confidentiality and conflicts. PwC will consult with the Australian government on these arrangements including timing and process.

Transparency

After listening to our stakeholders, we will publish Dr Ziggy Switkowski’s report and recommendations, in full, at the conclusion of the Independent Review in September.

Correcting misunderstandings

There is no excuse for breaching confidentiality. However, I want to address two important points.

First, I fully understand and acknowledge the calls for PwC to release the names of the individuals in the emails released by the Senate on 2 May 2023. There has been an assumption by some that all those whose names have been redacted must necessarily be involved in wrongdoing. That is incorrect. Based on our ongoing investigation, we believe that the vast majority of the recipients of these emails are neither responsible for, nor were knowingly involved in any confidentiality breach. We have and will continue to take appropriate action against anyone who is found to have breached confidentiality or failed in their leadership duties.

Secondly, in relation to the breach of confidentiality, our clients were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax.

Let me close by again apologising for our breach of trust. I have worked at PwC for my whole career, and this has been personally and professionally devastating for me and my colleagues at PwC. I am fully committed to doing everything it takes to make the wrongs of our past right, and to re-earn your trust.

Yours sincerely,

Kristin Stubbins
Acting Chief Executive, PwC Australia

Just going to leave this here:

And this:

PwC Issues a Groveling Apology Video (Not Really)

See also: Why PwC’s latest grand apology falls flat [Australian Financial Review]

The post PwC Australia is Very Very Sorry, You Guys appeared first on Going Concern.

The article references a May 16 senate subcommittee hearing chaired by Senator Richard Blumenthal at which OpenAI’s Sam Altman is told Mr. Blumenthal’s greatest nightmare is AI causing massive job loss. “There will be an impact on jobs,” Altman responded. “And I think it will require partnership between the industry and government, but mostly action by government.”

Full video if you’re interested and have two hours and 50 minutes to spare:

While the government works all that out — there were discussions about creating a new AI-focused letter agency — we have to put our faith in AI’s overlords and the corporate entities partnered with them to not unleash a monster upon humanity from the depths of Pandora’s digital box. Enter this bit from the NYT article explaining how one professional services behemoth intends to prevent massive job loss:

Workers could benefit, for example, from employer apprenticeships and retraining programs. The accounting giant PwC recently announced a $1 billion investment in generative A.I., which includes efforts to train its 65,000 workers on how to use A.I. What spurred the initiative was the chief executive’s trip to the World Economic Forum’s gathering in Davos, Switzerland, where he heard constant discussion of generative A.I.

“A number of us walking out of that room knew something had changed,” recalled Joe Atkinson, the company’s chief products and technology officer.

PwC’s workers have expressed fears about displacement, according to Mr. Atkinson, especially as their company explores automating roles with generative A.I. Mr. Atkinson stressed, though, that PwC planned to retrain people with new technical skills so their work would change but their jobs wouldn’t be eliminated.

In the April press release announcing PwC’s one billion dollar investment in AI, there was but a small mention toward the bottom about how the firm will leverage this technology to train up its people, enveloped in lots of client-focused (read: billable) language:

In parallel, PwC will modernize its internal platforms to embed this new, secure generative AI environment, building on its existing foundation of using AI to deliver productivity gains across tax, audit and consulting services to clients. At the same time, as part of My+, PwC US will invest in upskilling its 65,000 people on AI tools and capabilities in order to work faster and smarter, help grow their careers, and advise clients on the benefits of AI as well as other transformative technology.

Let’s check back in a year and see how well this promise has aged.

The post PwC Chief Products & Technology Officer Says Not to Worry, They Don’t Want to Replace You With AI appeared first on Going Concern.

It appears he is wearing a hoodie from Deer Valley Ski Resort in Park City, Utah.

The Google tells me Bunnings is like Home Depot, just without the bright orange safety aprons, so it can be safely assumed that he’s working on some kind of DIY home improvement. If anyone would care to analyze the photo, knock yourself out.

And before you ask, yes it is a slow news day.

See Australian Financial Review for actual news about Seymour’s exit from PwC and the firm’s tax leak scandal.

The post Disgraced Ex-PwC CEO Tom Seymour Finally Shows His Face in Public appeared first on Going Concern.

A message from PwCpic.twitter.com/3DoR61BheQ

— Mark Humphries (@markhumphries) May 18, 2023

The skit ran on the Australian Broadcasting Corporation’s evening news and said Humphries in a tweet, “I’d wager the ABC legal department spent more time considering the legal risks of this sketch than certain individuals at PwC spent considering the ethics of their actions.” Just in case PwC’s lawyers take it down, we’ve saved a copy.

Looks like Down Under PwC continues to be down bad.

The post PwC Issues a Groveling Apology Video (Not Really) appeared first on Going Concern.

FT:

International executives — some of whom were flown to Sydney by the Big Four accounting firm to assess the immediate damage to its brand — are set to remain in place for an extended period, according to two insiders with knowledge of the decision.

While PwC’s national businesses have autonomy over their operations, its global headquarters is using its rights under the international network’s rules in order to exert influence over the Australian business in response to the misuse of government information, said one of the people, who spoke on the condition of anonymity. PwC’s global office declined to comment.

For weeks, PwC Australia has been battered by negative headlines and reputational damage spreading far beyond our tiny cove of professional services and unusually negative accounting blogs. It doesn’t seem to be healing with time.

A few weeks back, it came to light that once-CEO Tom Seymour was on the emails originating from leaker Peter Collins, emails that contained confidential information from government tax authorities that was then leveraged to generate fees from certain high profile clients. Apple, Google and Microsoft are believed to be among the 23 tech firms PwC Australia approached with scheme to sidestep a tax avoidance law announced in 2015 by treasurer Joe Hockey.

Here’s something else funny:

The scandal came as insiders said the firm had been preparing to publicly roll out the next phase of a plan to increase the independence of its auditors and “build trust” in its business, a central plank of its global branding since 2021.

This was so not in the New Equation.

In an email to select retired partners, acting CEO Kristin Stubbins apologized deeply and promised to fix the firm’s tattered reputation.

“I want to start this note with an apology for not having been able to reach out over the last week to address the issue of unauthorised sharing of confidential tax policy information,” she wrote in the email, as reported by Australian Financial Review (which continues to report everything related to the PwC tax leak with GOAT-like precision and detail). “It’s important you are aware that we have also set up a full response plan which [partner] Nicole Salimbeni is leading with me, and that work streams are under way to ensure we get our business reputation back on track,” she wrote. “We recognise we need to rebuild trust. We’re listening closely to clients and other stakeholders, including the federal government and regulators, and will engage openly and transparently as we move forward. Finally, I’m sorry that the actions you’re reading about don’t reflect the high standards we expect of ourselves and the firm.”

One retired partner who spoke to AFR said the email seemed “a bit cynical … there’s no real surgical removal [of those involved]. They’re trying to buy time. They’ve got a review which will take until September.” Another said quite reproachfully: “I think they must have believed that if they keep their heads down it will go away.”

PwC’s global bosses to seize oversight of scandal-hit Australian team [FT]

The post PwC Australia Got in Trouble With Mom and Dad, Will Be Grounded For a While appeared first on Going Concern.

The plan as it stood last Monday was for Seymour, who has been a partner at PwC since 2002, to stay on at the firm and continue to provide the valuable insights that come from two decades of experience at the top. Per his LinkedIn, which is desperately in need of an update [archive]:

Tom has more than 25 years’ experience on taxation matters, particularly in the infrastructure, mining and energy industry sectors. Over his career Tom has led PwC teams advising on some of Australia’s largest public and private transactions. He has played a key role in PwC’s tax policy agenda, working with both state and federal governments seeking to improve Australia’s tax system, and has been a regular contributor to public debates on tax policy and broader economic reform.

It’s unfortunate that he likely won’t be remembered for any of that. Today, the firm said he won’t be sticking around after all and his last day will be September 30th.

Australian Financial Review has been all up on this story since day one — they broke it — and today’s news is no different. Somehow things have gotten worse:

The federal government is exploring options to try to ensure PwC Australia pays a “financial penalty” over the tax leaks scandal to punish it for using confidential tax information to drum up business, as the firm announced former chief executive Tom Seymour would retire early from the partnership at the end of September.

In other developments on Monday afternoon in what has become a global crisis for the firm, PwC appointed former [massive Australian telecommunications company] Telstra CEO Ziggy Switkowski to lead a review into the leaks.

Dr Switkowski will examine all aspects of PwC’s governance, accountability and culture and report back to the big four consulting firm by September. The firm has pledged to make a summary of his key recommendations public.

Dr. Switkowski has a hell of a resume: nuclear physicist, chairman of both NBN Co and Suncorp, a director of Healthscope, Oil Search and Tabcorp and the Chancellor of the Royal Melbourne Institute of Technology. PwC Australia acting CEO Kristin Stubbins said that Dr. Switkowski “will have access to all the people and information he needs to conduct a rigorous review.”

“We are committed to learning from our mistakes and ensuring that we embrace the high standards of governance, culture and accountability that our people, clients and external stakeholders rightly expect,” said Stubbins.

It’s expected that more “retirements” will follow.

The post One Week After He Stepped Down as CEO, PwC Announces Tom Seymour Will GTFO Completely appeared first on Going Concern.

You know it’s bad when our headlines about the situation are chill and The Guardian calls it a “crisis.” And this was Sydney Morning Herald‘s story yesterday:

‘Devoid of an ethical backbone’: PwC scandal raises questions about the firm

Senator Deborah O’Neill – who chairs the Corporations and Financial Services Committee, which last week released a damning 148-page document revealing the scale of the firm’s profiteering from leaking confidential government tax plans to potential clients – said the cultural problems the scandal highlighted raised questions about the global firm’s entire business.

“You cannot provide a level of assurance as required by our financial markets, let alone by the government, if you are operating out of a model that is so clearly devoid of an ethical backbone,” O’Neill said.

Public policy think tank The Australia Institute said Seymour’s resignation as CEO reflects a need for reform across the entire industry, calling into question the relationship between consultants and governments.

Said Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program: “While the resignation of the PwC CEO is welcome it will not fix the ongoing structural issues with the consultancy industry. The government has an over-reliance on consulting firms for core Government work, and consultants’ advice can be used to distort the public debate. What Australia needs is a reinvigorated and properly-funded public service that is prepared to give frank and fearless advice to the government. The public service need the skills and knowledge to do in-house what has been outsourced to expensive and self-interested consultants.”

The Australia Institute’s submission to the parliamentary inquiry into consultancies found that:

• When consultants are contracted to do work that public servants could do, it stops the public service from developing skills and knowledge in-house.
• Consultants lead governments to make bad decisions when they produce flawed analysis, tell the government what it wants to hear or bury reports that are unfavorable to the government.

The group said PwC should donate the $2.5 million it took for advice on tax avoidance based on confidential information to charity and recommended to parliament that PwC be banned from receiving government contracts or confidential government information.

Then you have The Guardian. They didn’t run an explosive headline like Sydney Morning Herald but their story did highlight comments at the parliamentary inquiry that suggest consulting firms form “a shadow public service” operating in darkness behind the curtains of government.

Dr Erin Twyford, a senior lecturer at the University of Wollongong who has previously worked for consultancy firm Deloitte, told the inquiry that conflicts of interest were “rife within the engagement of consultants”.

“There is an entrenched relationship between the consulting industry, shareholder-value maximising firms and what I perceive as a hollowed out and risk averse public sector,” Twyford told the inquiry.

“Big consulting firms are secretive partnerships, not companies, and they do not have to disclose where their money is coming from, even though they are the most powerful private institutions in the world.”

Prof Fran Baum, a public health expert at the University of Adelaide’s Stretton Institute, questioned the government’s ability to scrutinise any conflicts of interest given consultancy firms don’t always publicly disclose their clients.

“These consultancy firms are now forming a shadow public service, in effect,” Baum told the inquiry.

“There is now so much work contracted out that it means a whole lot of the work of public servants is on managing those contracts. That’s obviously … detracting from other areas of their work, but also probably pushing their capacity to do so as effectively as they would like.”

And one more:

Andrew Podger, a former Australian public service commissioner and former health department secretary, said consultants may be influenced by commercial motives when giving government advice.

“There is a [risk], when you become reliant on consultants and the consultants also want to continue to get business, that they may tailor their work in order to ensure that they get future business and they won’t necessarily be as independent as you would desirably want,” Podger told the inquiry.

“I think this does occur from time to time.”

Podger went on to say that an over-reliance on consultants had seriously eroded the capability of the public service, suggesting that consulting firms have access to the best talent and essentially put it behind a paywall when the government needs to access it. He was with Australian Public Service from 1968 to 2005 and is currently Honorary Professor of Public Policy at Australian National University.

Labor senator Deborah O’Neill called the PwC tax leak “a betrayal of the ethical and professional standards they should be upholding” and has said she’s concerned other firms may be engaging in the same behavior that PwC is now in the hot seat for but unlike PwC haven’t been caught doing it.

Macquarie University emeritus accounting professor James Guthrie said in a submission to parliament that consultants are “working both sides of the street,” helping to write federal tax legislation then turning around and advising clients on how to get around it. “To fully understand how a consulting firm’s clientele might affect its advice, consultancy contracts should no longer be allowed to operate under a veil of secrecy,” he wrote. “Consulting firms that want to work for governments should be made to disclose things such as any clients they advise that could potentially conflict with the public sector work and the advice provided.”

Wrote columnist Elizabeth Knight:

The six to eight partners who shared the emails have apparently now all gone, but this scandal is far from over.

If those running PwC believe that undertaking some kind of internal investigation into the culture of their organisation will provide them with a get-out-of-jail-free card, they are woefully mistaken.

It is hard to see how the firm is now qualified to undertake such introspection.

Relationships between client and adviser are built on trust – which, once broken, is tremendously difficult to restore. The external push for accountability and payback has picked up a lot of momentum.

It has bled into the broader industry and spurned a larger Senate inquiry into the conflicts of interest between the governments and the big four accounting firms that provide it with expert advice.

Politicians (particularly the Greens) are placing PwC in the middle of their dartboards – and getting plenty of publicity mileage while the demoted Seymour is handing out profuse apologies.

But this is a sideshow.

Expect more salacious headlines to come.

The post PwC Is Getting Rekt in the News appeared first on Going Concern.

While most of us were sleeping, PwC Australia was starting its Monday minus one CEO. Tom Seymour has stepped down following a board of partners discussion after it was revealed last week he was one of several partners who received confidential government intel that was then used to advise clients on tax matters. “We have agreed with Tom that it is in the best interests of the firm and our stakeholders,” said PwC in a statement.

We haven’t written much about the PwC tax leak, first brought into the spotlight by Australian Financial Review back in January, other than a few passing mentions in linkwraps so you may need a little catching up. The TL;DR is international tax leader Peter Collins — who was named corporate tax adviser of the year by the Tax Institute of Australia in 2016 — shared confidential information he received from tax authorities about plans to push out new tax avoidance laws with PwC partners and clients. As a result of the violation, he ended up banned from practice for two years by the Tax Practitioners Board.

This is from the Tax Practitioners Board’s January 23 news release:

The TPB conducted an investigation into Mr Collins’ conduct. The investigation revealed Mr Collins, while a partner of PwC, was part of a confidential consultation by Treasury in a confidential consultation to improve tax laws. This included new rules to stop multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens. Mr Collins made unauthorised disclosures of this confidential law reform information to partners and staff of PwC.

The TPB found Mr Collins failed to act with integrity, as required under his professional, ethical, and legal obligations, and terminated his tax agent registration.

In addition, the TPB investigation determined that PwC had failed to properly manage conflicts of interest, when this confidential law reform information was shared with partners and staff in their tax practice. PwC breached its obligations under the law and the Code of Professional Conduct. The TPB ordered PwC to have processes and training in place to ensure conflicts of interest are adequately managed.

Documents released March 10 by the Treasurer under Freedom of Information relating to the PwC tax leak [PDF] explain the exact details of Collins’ access to confidential information.

Peter Collins was a member of the BEPS Tax Advisory Group: a targeted consultation group established by Treasury in late 2013 to discuss confidential policy and technical issues arising from the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. It included Treasury and ATO officials, tax practitioners and industry and peak body representatives familiar with international tax issues. Around 12 to 15 non-government participants were involved. The Group first met in November 2013 and last met in June 2017.

The Group provided input that contributed to Australia’s implementation of various BEPS measures designed to prevent multinational tax avoidance.

In addition, some of the members of the Group, including Mr Collins, were involved in separate targeted and confidential Treasury consultations on developing Australia’s Multinational Anti-avoidance Law and Diverted Profits Tax legislation (two unilateral measures aimed at addressing multinational tax avoidance).

In respect of the BoT, Mr Collins participated in a number of consultation sessions regarding the BEPS initiatives.

The confidentiality agreement as of 2022 looks a little something like this. You’ll note it specifically says the agreement does not extend to an individual’s organization:

This recent AFR story explains how PwC then leveraged the info Collins was supposed to keep to himself to advise clients who might be interested to know new tax haven rules were coming down the pipe. Heavily redacted internal emails released Tuesday by the Tax Practitioners Board (TPB) use words like “brand-defining” to describe the business opportunity presented by Collins’ early access to this info. “We got this outcome because … we were aggressive in telling these relationships they needed to act early (heavily helped by the accuracy of the intelligence that Peter Collins was able to supply us, and our analysis of the politics),” reads one email written by a partner. “In total, we expect (based on fee estimates that we have agreed with clients) that revenue from this first stage of the MAAL projects will be approximately $2.5 million.”

In addition to Collins’ two-year ban and sanctions against PwC, the leak led to government inquiries, calls for PwC to be barred completely from government work, and of course calls for PwC Australia CEO Tom Seymour to step down. On Friday, Seymour admitted that he had in fact received naughty emails discussing how PwC could use this information to advise clients.

AFR reporting on Friday:

On Friday afternoon, after months of stonewalling questions about what he knew about the leaks of government documents, while PwC privately briefed that none of the senior leadership knew about it, Seymour confirmed in a partners’ meeting what had become increasingly obvious: he was in the emails.

Partners told AFR Weekend that Seymour said only “six to eight” partners actually shared confidential information, but 30 to 40 (including Seymour himself) were on emails where the plans to use the information to market to clients were made.

Seymour has headed up PwC Australia since March 2020. Assurance head Kristin Stubbins will now serve as acting CEO and partners will vote on a permanent appointment in coming months.

The firm hasn’t gotten around to updating his profile yet (archive as of May 8). He will remain at PwC, just not as top dog. See update at the top of the page, he’s outta here.

The post PwC’s Tom Seymour Just Stepped Down Because He Was On a Naughty Email Chain (UPDATE) appeared first on Going Concern.

For weeks there’s been a conspiracy theory floating around that PwC and Deloitte both will use soft return to office mandates (in PwC’s case, “expectations”) to call the bluff of everyone who said “if I ever get forced back into the office I’ll quit.” Lo and behold, Tim Ryan announced a sort of return to office at PwC yesterday.

A return to office will no doubt trim some fat but we’re also hearing that performance discussions are going to be extra hard this year.

Here’s what our source says about upcoming career round table talks at PwC:

CRTs this year will be hard on people, last year they were allowing people to get by with things due to need but it’s going to be a rough CRT for people not hitting goals. They plan on cutting fat.

If the headcount reduction conspiracy is true, how are firms’ benches deep enough for all this fat cutting? Haven’t we heard nothing but ACCOUNTANT SHORTAGE for at least a year if not longer? One idea I’ve seen floated is that turnover is not as high as expected now that the economy has gone sour and the big spectacular offers of the recent past are beginning to dry up. The market for accountants is still hot, just not scalding like it was.

It was good while it lasted I guess.

The post We’re Hearing PwC CRTs Will Be Rough This Year appeared first on Going Concern.

A source tells us:

50 percent “people together,” virtual channel staff three times per month, firmwide events requirement two times per quarter. So return to work 50 percent starting July.

r/PwC is discussing it and even had a poll earlier today getting opinions on what people would do if Tim Ryan announced an RTO.

Return to office poll
by u/Over-Strawberry809 in PwC

We’ll update if more info comes in.

Earlier: That PwC Return-To-Office Rumor Might Be True (Includes Potential Confirmation)
Someone’s Starting Rumors That PwCers Are Getting Forced Back Into the Office

This post did not age well.

While Other Industries Have Turned to the Stick, Accounting Firms Continue to Use the Carrot to Encourage RTO

The post The Rumor Is True, PwC Is Returning to the Office appeared first on Going Concern.

It wasn’t that long ago that Big 4 accounting firms were cagey about staff playing around with ChatGPT on company equipment, consumed by the fear of sensitive client information being fed into the AI black hole. But then they got over it and both PwC and KPMG proudly announced proprietary AI tools, leading the way in what will no doubt be a transformative time for professional services. In PwC’s case, the new AI on the block was a ChatGPT-based platform that uses natural language processing, machine learning and data analytics to automate and enhance various aspects of legal work called Harvey. PwC’s Global Tax & Legal Services (TLS) says Harvey will catalyze the ability of Legal Business Solutions professionals to deliver comprehensive, cost-efficient and market-relevant solutions to our clients. That’s a direct quote btw, if you couldn’t tell. Harvey, which is backed by the OpenAI Startup Fund, may even end up bringing in its own business as is working with the startup to take the platform to market “to help clients further streamline their in-house legal processes.

But they didn’t stop there. Yesterday, PwC US announced plans to invest an eye-watering one billion dollars over the next three years to “expand and scale its artificial intelligence (AI) offerings and help clients reimagine their businesses through the power of generative AI.” This investment, says the press release, builds on PwC’s long-standing commitment to AI, strengthening its ability to deliver human-led and tech-powered solutions and to build trust and drive sustained outcomes in line with its global strategy, The New Equation. Again, that’s clearly a direct quote.

The firm is partnering with Microsoft to create a scalable offering using GPT-4 and Microsoft’s Azure OpenAI service.

“We are at a tipping point in business and society where AI will revolutionize how we work, live and interact at scale,” saaid Mohamed Kande, Vice Chair, US Consulting Solutions Co-Leader and Global Advisory Leader, PwC. “PwC has long been a pioneer in responsible AI and this latest investment and collaboration with Microsoft will help our people and clients realize the augmented productivity and new growth opportunities associated with generative AI, doing so in a responsible way while driving the right results.”

Although we did not see any press releases about it, it seems PwC had already been using Azure OpenAI for clients in various industries including insurance, aviation, and healthcare. These solutions have successfully enabled clients to save time and costs while helping accelerate revenue, the firm says.

In its Responsible AI framework, PwC lays out some risks associated with AI use in its current form, all things worth considering as we speed toward a future in which busy work is practically eliminated thanks to these clever tools. Let’s review them quickly.

• Performance:
  • Risk of errors
  • Risk of bias and discrimination
  • Risk of opaqueness and lack of interpretability
  • Risk of performance instability
• Security:
  • Adversarial attacks
  • Cyber intrusion and privacy risks
  • Open source software risks
• Control:
  • Lack of human agency
  • Detecting rogue AI and unintended consequences
  • Lack of clear accountability
• Economic:
  • Risk of job displacement
  • Enhancing inequality
  • Risk of power concentration within one or a few companies

The next two risk sets are particularly interesting, if not slightly unsettling: societal and enterprise.

The widespread adoption of complex and autonomous AI systems could result in “echo-chambers” developing between machines, and can have broader impacts on human-human interaction.

Societal risks include:

• Risk of misinformation and manipulation
• Risk of an intelligence divide
• Risk of surveillance and warfare

AI solutions are designed with specific objectives in mind which may compete with overarching organisational and societal values within which they operate. Communities often have long informally agreed to a core set of values for society to operate against. There is a movement to identify sets of values and thereby the ethics to help drive AI systems, but there remains disagreement about what those ethics may mean in practice and how they should be governed. Thus, the above risk categories are also inherently ethical risks as well.

Enterprise risks include:

• Risk to reputation
• Risk to financial performance
• Legal and compliance risks
• Risk of discrimination
• Risk of values misalignment

Oh, and while PwC is helping clients to understand the risks and benefits of AI, it will also “modernize its internal platforms to embed this new, secure generative AI environment, building on its existing foundation of using AI to deliver productivity gains across tax, audit and consulting services to clients.” Isn’t it funny the firm that was still using Lotus long after everyone migrated to Office and Google is now at the forefront of AI?

PwCers can look forward to a focus on upskilling as part of My+, all in the service of using AI “in order to work faster and smarter.” Sure you all will be excited about that.

“We are excited that PwC will utilize Azure OpenAI Service to transform the way they work, and to deliver innovative customer solutions that take advantage of the world’s most advanced AI models, backed by Azure’s trusted enterprise-grade capabilities and AI-optimized infrastructure,” said Eric Boyd, Corporate Vice President, AI Platform, Microsoft. “Our collaboration with PwC and OpenAI will be a game-changer that opens the floodgates for businesses to experience generative AI applications in a safe and secure manner.”

Exciting times we live in.

The post PwC Has Set Aside $1,000,000,000 for AI appeared first on Going Concern.

While prestige is the most important factor in the Vault Accounting 25 ranking formula, the 11,000 accounting professionals surveyed also value the following factors: firm culture, type of work, location, work/life balance, compensation, business outlook, and training opportunities. Prestige accounts for 35 percent of the ranking formula; culture makes up 20 percent; satisfaction, compensation, and work/life balance each account for ten; business outlook, formal training, and informal training round it out with 5 percent each. And now you know how Vault comes up with each firm’s score.

PwC is widely considered to be the world’s most prestigious and progressive accounting firm (that’s Vault’s language, not ours. Though we don’t necessarily disagree) yet interestingly ranked #2 in Vault’s Prestige Rankings this year, losing their spot to Deloitte for 2024. The Accounting 25 rank tells us factors other than prestige — like culture, satisfaction, compensation, and training — pushed PwC to #1.

PwC also ranks first in all three Practice Area Rankings (Audit & Assurance, Tax, and Forensic Accounting). Accountants at peer firms told Vault that PwC is “progressive,” “diverse,” “the gold standard,” “the top dog of the Big 4,” “super prestigious,” and “filled with great people.” It also offers “thorough training resources” and “great benefits.” And PwCers say the firm has an “amazing culture” with “smart, caring, friendly, motivated people,” and rave about the “challenging work and opportunities for growth and development.”

The Top 10 Firms in the Vault Accounting 25 (2024) and their scores are:

1. PwC 8.584 (down from 8.807 in 2023)
2. Deloitte 8.432
3. KPMG 7.962
4. BDO USA 7.653
5. RSM US 7.578
6. Moss Adams 7.576
7. Plante Moran 7.560
8. Baker Tilly 7.484
9. CohnReznick 7.347
10. PKF O’Connor Davies 7.133

You’ll notice a name missing from the top ten. EY came in allllllll the way down at #25 with a score of 2.984.

“Our recent survey and new rankings of the top accounting firms reflect the real-time pulse of over 11,000 accounting professionals, providing unique insight into the inner workings at the top firms,” said Eric Stutzke, SVP & General Manager of Vault. “While the busy season workload is certainly not declining, our survey reveals that firms have are making strategic investments to support their talent’s work/life balance. They’re doubling down on wellness benefits, increasing paid time off, and improving various workplace benefits to raise employee satisfaction.”

When the first Vault Accounting list debuted for 2011 it included twice as many firms and was topped by Deloitte until PwC overtook them to steal first place where they’ve been ever since. Shoutout to KPMG for crawling all the way up from its 2011 rank of 22 to third place for 2024.

Back in the day you used to be able to browse disparaging reviews of the firms on the list but then Vault got married to Firsthand and they tried to clean up the joint by removing sweet bonus content like this:

We miss you, Vault snark.

Full list here.

Vault Releases 2024 Rankings of Top Accounting Firms To Work For [PR Newswire]

The post PwC Once Again Tops the Vault Accounting 25, EY Almost Didn’t Make the List appeared first on Going Concern.

This morning Going Concern received a copy of a memo that appears to confirm just about everything the original rumor-spreader said, as well as various details we’ve been given over the past several days. We’re told this went out in late March. We’re working on digging in further, in the meantime I’ve transcribed the text for your reading pleasure. Key words here are “expectations and not mandates.”

Starting after the July firmwide shutdown for US employees.

• • Virtual profile team members will be expected to work up to 3 days per month, on average, at a PwC office or in-person setting. Note: The majority of P&T is within the virtual profile. We will continue to allow our people to self their way of working profile.
  • Hybrid profile (previously “Flex”) team members will be expected to work an average of 50% at a PwC office or in-person location over the course of a year (previously 1-3 days per week on average).
  • All employees (including virtual profiles) will also be expected to join at least two in-office activities per quarter (e.g. Leaders in Action, Promotion Day).

There are expectations and not mandates. Partners will work with their teams to determine the approach that best meets the needs of their clients and people, while recognizing the unique role that many of our P&T people play.

Rolling this out in July provides flexibility for employees who need additional time to plan for these changes, working with their leader as needed.

Mexico and our ACs are working through their return to in-person guidelines, which will be tailored to reflect local regulations and culture.

The note we saw is cut off after this sentence:

First, please keep this news confidential and do not share any messages or materials with others until after the May 3 firmwide announcement.

Oops.

If you hear anything, please let me know.

The post That PwC Return-To-Office Rumor Might Be True (Includes Potential Confirmation) appeared first on Going Concern.

This screenshot couldn’t have worked out better.

Since late 2021, PwC has touted a super flexible remote work policy. Come in, don’t, whatever. This depends on your team and clients of course but as far as we are aware there hasn’t been any blanket policy to get people back into the office.

One thing to note, and others threw this out there in the Reddit post, a conspiratorially-minded person might suggest that if a business were looking to make cuts without the accompanying bad publicity that comes from layoffs, forcing people back into the office would be a really good way to do it. At least some of those people who threatened to leave if they can’t work remotely will actually leave, still more will not leave but phone it in so hard they can get counseled out without much controversy. Boom, you just eliminated a bunch of people without some business rag putting your layoffs on blast.

One other thing to acknowledge: we have seen advisory layoffs at other firms in recent months. Consulting demand is down across the board. At least down under, Big 4 firms have all said the business is slowing down and PwC Australia specifically told AFR the firm “had no plans to cut jobs despite the fall in client demand.” The red hot job market has cooled, turnover is down a bit from its frenzied peak last year, and firms are lowering their hiring targets to keep headcount numbers under control (plus there’s that whole shortage thing anyway). Steps firms are already taking appear to be sufficient for now unless the business really starts suffering. There doesn’t seem to be much reason for PwC to make a controversial move like this right now. What benefit does it serve the firm?

But wait. Is turnover actually down? No idea. These comments are all over the place.

And then there’s this from Fishbowl:

Wait what? This needs more digging into. Keep you posted. For now this rumor is definitely just a rumor unless we hear otherwise.

The post Someone’s Starting Rumors That PwCers Are Getting Forced Back Into the Office appeared first on Going Concern.

There is one group particularly disrupted by the events of 2020, a group that sadly doesn’t get much attention when we talk about things the pandemic screwed up and the lasting effects of that disruption: students. According to The Times, the King’s PwC is thinking about giving those kids a break and adjusting its hiring process to accommodate them.

Accountancy firm PwC is considering revamping its recruitment and training schemes for the “lockdown cohort” of school leavers and graduates whose education was interrupted during Covid when many did not sit exams under the usual conditions.

The firm is considering tailoring its hiring process to make it less imposing for these candidates.

It has noticed that some of its latest recruits have needed extra help in their study for professional exams, having missed out on sitting formal exams for GCSEs, A-levels and other qualifications.

Ian Elliott, PwC’s chief people officer, said: “We’re acutely aware that lockdown will have impacted students in all sorts of ways. It would be remiss for us not to look at our approaches … to make sure we … are providing the best support.”

Decisions have not been made about any changes, but PwC currently uses a mix of online and face-to-face meetings and is looking at whether this is appropriate.

As you are currently reading a Yankee rag, some definitions might be in order:

• School-Leaver: a young person who is about to leave or has just left secondary school
• GCSEs: The General Certificate of Secondary Education is an academic qualification in a particular subject, taken in England, Wales, and Northern Ireland
• A-Level: The A-Level (Advanced Level) is a subject-based qualification conferred as part of the General Certificate of Education, as well as a school leaving qualification offered by the educational bodies in the United Kingdom and the educational authorities of British Crown dependencies to students completing secondary or pre-university education

PwC UK has a notoriously rigorous hiring process that includes psychometric assessments. There’s even an entire cottage industry built around helping candidates prepare for and ace these, which PwC does not endorse and instead directs candidates to its own e-learning modules. These assessments are just 11.1% of the nine-step hiring process, laid out in pretty PwC autumn hues below:

There are also the standard, incredibly lame and insanely creepy video interviews which candidates can also prepare for using PwC’s own modules.

92,000 people applied for entry-level roles at PwC UK in the first half of 2022, fighting for about 1,900 jobs. Despite the flood of applicants — which was up from 71,000 the same time the year prior — only 80% of these jobs were filled. Meaning a huge number of the 92,000 trying to get into PwC did not meet their standards, or so PwC said.

A cynical person might suggest that PwC is now rethinking the gauntlet it puts aspiring candidates through out of sheer desperation but it could be that they want to make sure they aren’t missing out on young talent just because someone does not check all the right boxes. Especially someone who has a helluva excuse for why they weren’t able to get those boxes checked in the last three years.

The post PwC UK Has a Soft Spot For Students Who Got Wrecked By the Pandemic appeared first on Going Concern.

This is from PwC’s statement, you know we wouldn’t write like this:

Harvey, which is backed by the OpenAI Startup Fund, is built on OpenAi and Chat GPT technology. It is a platform that uses natural language processing, machine learning and data analytics to automate and enhance various aspects of legal work. Harvey will help generate insights and recommendations based on large volumes of data, delivering richer information that will enable PwC professionals to identify solutions faster. All outputs will be overseen and reviewed by PwC professionals.

The strategic alliance builds on PwC’s ability to bring human-led and tech-enabled solutions to clients, delivering on its global strategy, The New Equation.

The firm says access to the technology will be used to support many of PwC’s global clients — you’ll note the careful wording there. “Access to,” “will be,” “to support.” Let’s be clear: Harvey will be closely supervised. And it will not be used to provide legal advice to clients and AI will not replace lawyers, nor be a substitute for professional legal services. WILL NOT.

And here are the purported benefits, for PwC professionals and for the firm’s clients:

• Harvey will give PwC’s professionals across 100+ countries access to leading generative AI technology. This will enhance the ability of PwC’s network of more than 4,000 legal professionals to deliver human led and technology enabled legal solutions in a range of areas, including contract analysis, regulatory compliance, claims management, due diligence and broader legal advisory and legal consulting services.
• PwC will work with Harvey to take the platform to market to help clients further streamline their in-house legal processes.
• PwC will also look to develop and train its own proprietary AI models with Harvey to create customised products and services for its own use cases and for clients across Legal Business Solutions.

There are a bunch of quotes in the statement, all of them predictably excited about the tool. PwC Global Tax & Legal Services Leader Carol Stubbings (PwC UK) says Harvey marks a huge shift in the way that tax and legal services will be delivered and consumed across the industry. PwC Global Legal Business Solutions Leader (PwC Australia) Tony O’Malley says it will transform the way PwC provides legal solutions across the globe. Buzzwords like “game changer” and “paradigm shift” make an appearance. And Harvey’s two founders are both thrilled (one used that word) to partner with PwC. Harvey apparently was not asked for comment.

Here’s a quote the grunts might like. This is from Sandeep Agrawal, PwC’s Global Leader for Legal Technology (PwC UK): “With the use of Harvey, our Legal Business Solutions professionals will be at the forefront of industry developments, catalysing their ability to deliver comprehensive, cost-efficient and market-relevant solutions to our clients. Integrating Harvey into our day to day activities will free-up much needed time and resources allowing our people to focus more on innovation and value accretive tasks.”

Harvey currently has a waitlist. It was founded by Gabriel Pereyra, who used to be a research scientist at DeepMind, Google Brain, and Meta AI, and former securities and antitrust litigator Winston Weinberg. In a November 2022 TechCrunch interview, Pereyra explains what exactly the tool offers legal professionals:

“Our product provides lawyers with a natural language interface for their existing legal workflows,” Pereyra told TechCrunch in an email interview. “Instead of manually editing legal documents or performing legal research, Harvey enables lawyers to describe the task they wish to accomplish in simple instructions and receive the generated result. To enable this, Harvey leverages large language models to both understand users’ intent and to generate the correct output.”

More concretely, Harvey can answer questions asked in natural language like, “Tell me what the differences are between an employee and independent contractor in the Fourth Circuit,” and “Tell me if this clause in a lease is in violation of California law, and if so, rewrite it so it is no longer in violation.” On first read, it almost seems as though Harvey could replace lawyers, generating legal arguments and filing drafts at a moment’s notice. But Pereyra insists that this isn’t the case.

Sounds like something an aspiring lawyer AI would say…

“We want Harvey to serve as an intermediary between tech and lawyer, as a natural language interface to the law,” he told TechCrunch. “Harvey will make lawyers more efficient, allowing them to produce higher quality work and spend more time on the high value parts of their job. Harvey provides a unified and intuitive interface for all legal workflows, allowing lawyers to describe tasks in plain English instead of using a suite of complex and specialized tools for niche tasks.”

“Working with PwC provides a unique opportunity to further enhance AI’s potential to solve the most complex legal problems,” said Pereyra in the firm’s announcement. “The scope of PwC’s capabilities enables us to collaborate on AI systems that expand on Harvey’s core legal use cases to provide more comprehensive solutions for PwC and their clients.”

Anyway, kinda cool. Thought we’d share.

Update: A month after the PwC partnership was announced, Harvey raised $21 million in a Series A funding round led by Sequoia Capital.

The post PwC Has a Fancy New AI Tool to Law Around With appeared first on Going Concern.

The FRC identified numerous, serious breaches — which were admitted to by PwC and former engagement partners Nicholas Campbell Lambert and Heather Ancient — including:

• Repeated failures to challenge management and obtain sufficient appropriate evidence, reflecting a general reluctance to challenge management across these parts of the audits; and
• Failure to follow basic audit requirements, evidencing a lack of competence, care or diligence. For example, there was no evidence that the audit team had, whether in FY2018 or before, obtained and read a 30-year Public Private Partnership contract with FY2018 revenue of c.£77m and lifetime revenue of £3bn, and one contract – with an initial value of c.€640m – was written in French, but the audit team neither possessed French language skills nor obtained a translation of the contract.
• For Babcock subsidiary Devonport Royal Dockyard Limited (DRDL), the FRC also discovered a false record of the audit evidence actually obtained in one workpaper relating to a sensitive government contract for FY2018.

The FRC says many of the matters to which the breaches relate were qualitatively material to users of the financial statements. In aggregate, the breaches ran the risk that a material misstatement in the FY2017 and/or FY2018 Babcock group Financial Statements may have gone undetected. In particular, had the auditor appropriately applied the audit standards in FY2018, they should have required clear disclosures in Babcock’s FY2018 Financial Statements explaining the positive impact on operating profit of significant one-off items.

As often happens in the UK, the FRC gave PwC and the partners a break on fines in exchange for admission of naughtiness. PwC has been fined £7,500,000, adjusted for aggravating and mitigating factors and discounted for admissions and early disposal by 25%, so that the financial sanction payable is £5,625,000. Mr Campbell Lambert has been fined £200,000, of which he will pay £150,000. DRDL engagement partner Ms. Ancient was fined £65,000 and will pay £48,750. Everyone involved is required to sign declarations stating, in essence, that they screwed up.

The FRC’s investigation into PwC’s work on the FY2019 and FY2020 Babcock audits is ongoing.

Said FRC Deputy Executive Counsel Claudia Mortimore: “The quality of these audits fell far short of the standards expected of statutory auditors. Of particular concern is the lack of scepticism applied and the failures to follow some basic audit requirements. This robust package of sanctions seeks to deter future breaches and encourage improvement by the firm., in circumstances where PwC has now been sanctioned four times since 2019. The financial sanctions have been reduced by 25% to reflect the admissions made and the settlement reached. PwC conducted effective self-reviews into four of the areas under investigation, and in this respect exhibited exceptional cooperation. However, this has not attracted a further discount to sanctions, as it was countered by examples of errors, omissions and delays in providing material to the investigation, as well as the provision of some unclear or inaccurate responses.”

Full Final Settlement Decision Notice here (PDF)

Sanctions against PwC and two former audit partners [Financial Reporting Council]

The post PwC UK Fined £7.5 Million For Faking Evidence and Other Such Terrible Auditing of a Government Contractor appeared first on Going Concern.

When Australian Financial Review wrote up the KPMG cuts, they mentioned that competitors at EY and Deloitte did not plan to cut jobs, despite having observed market conditions similar to those that spurred KPMG to cut people loose. “We are still experiencing solid growth and demand for our services across many parts of our business,” said EY Oceania CEO David Larocca. “We have pulled back on recruitment where necessary. We do not currently have any plans for reductions in our headcount.” Deloitte shook the whole thing off, with Deloitte Australia Chief People and Culture Officer Pip Dexter saying the firm was experiencing solid growth and planned to increase overall staff numbers (OK good luck with that, Pip).

Now PwC Australia has weighed in — and we can officially stop adding “Australia” after every firm name now that it’s been established that this article is about Down Under Big 4 firms — to say that while they’ve already seen client work drop off a bit, they don’t plan to get rid of anyone.

AFR:

PwC Australia has experienced a fall in client demand from the peak hit early last year but, unlike KPMG, has no plans to go through the “painful” process of cutting jobs, chief executive Tom Seymour says.

In fact, the firm has 1100 open positions and has forecast growth of between 10 per cent and 15 per cent this financial year. That’s down from 17 per cent in 2021-22 but still above its long-run average growth rate.

The outlook for the nation’s largest professional services firm is consistent with rivals Deloitte and EY, which have told The Australian Financial Review they too had no plans to cut jobs despite the fall in client demand. These firms also reported that staff turnover had fallen as companies across the economy eased back on hiring.

Over the years, we at Going Concern have observed a pattern in times of economic trouble and you probably have, too. Firms say “we are not firing anyone” and technically they don’t, they just ratchet up PIPs and cut the “low performers” or worse, don’t put people on a PIP at all and say it was low performance anyway. We saw this during the early days of the pandemic when EY on this side of the globe fired a bunch of people who weren’t on PIPs “for low performance” and then, when questioned about it by staff who clearly knew what was going on, said there’s no rule saying they need to be on a PIP. Side note: you can read a powerful letter calling out EY management for the way they handled these layoffs-but-not-layoffs here.

We may be in for choppy seas ahead so keep your head down and your utilization high if you want to sail through it, no matter what the firms say.

The post PwC Australia Says It Will Not Be Firing People Just Because Client Work Slows Down appeared first on Going Concern.

Australian Financial Review reports that in this morning’s internal newsletter, PwCers were told not to feed client data into ChatGPT and to be wary of potentially conflicting output from this emerging technology.

PwC is encouraging staff to experiment with ChatGPT but has warned them against using any material created by the artificial intelligence chatbot in client work, as it explores ways to make use of such breakthrough technology in its operations.

The consulting group’s guidelines about the use of AI tools, sent out in the PwC internal newsletter on Monday morning, bans sharing firm or client data into such third-party tools and says the technology is prone to producing false information.

“PwC allows access to ChatGPT and we encourage our people to continue to experiment with ChatGPT personally, and to think about the role generative AI could play in our business, subject to important safeguards,” said Jacqui Visch, the firm’s chief digital and information officer.

“Our policies don’t allow our people to use ChatGPT for client usage pending quality standards that we apply to all technology innovation to ensure safeguards. We’re exploring more scalable options for accessing this service and working through the cybersecurity and legal considerations before we use it for business purposes.”

Beyond the obvious infosec risks, the message reminded staff that what ChatGPT spits out isn’t reliable and can vary wildly even when using the same or similar prompts. “They are stochastic in nature (meaning you could get a different answer every time you ask the same question), they can present inaccuracies as though they are facts, and they are prone to user error. They will require review and oversight and cross-validation of results before they can be relied upon for tasks that demand precision,” wrote Visch.

ChatGPT essentially warns you of this when first accessing the tool:

And when you get through that screen, the next one tells you not to share sensitive data:

The firm is actively looking into ways to use AI tools in a “consistent manner across the firm”, she said. She went on to say that any staff wishing to use AI output have to run that by the legal department or risk management first. It sounds like anyone who does so will, for now, be hit with an emphatic “NO.”

AFR goes on to say that while Deloitte too allows access to ChatGPT on work computers, KPMG “has taken a more conservative approach” and has blocked ChatGPT on firm PPE except for limited use by teams investigating its potential.

PwC warns staff against using ChatGPT for client work [AFR]

The post Unable to Bill For It (Yet), PwC Australia Tells Staff They Can’t Use ChatGPT For Client Work appeared first on Going Concern.

First, the graphic:

1. Businesses will be the metaverse power users

A lot of metaverse talk in 2022 was about consumers, especially younger ones: activities such as games, virtual experiences or shopping with cryptocurrency and other digital assets. These activities will continue to grow, but we believe that in 2023, business applications will take the lead. One sign? In PwC’s 2022 US Metaverse Survey, the metaverse use case that business leaders said they were most likely to explore (cited by 42%) was “onboarding and training.” Tied for second place were “interacting with work colleagues” and “creating virtual content for customers,” both cited by 36%.

Consumers don’t give a shit about the metaverse because we can accomplish pretty much the same thing (but better) on Steam and our phones. OF COURSE businesses are planting their flags in (on?) the metaverse, thought leaders” like PwC keep telling them it’s important. No one has been able to explain to the masses exactly why in anything other than nebulous gibberish, it just is okay.

To complete the bridge between the consumer and business metaverses in the coming years, we also expect to see more metaverse-specific products and services: avatar-driven contact center support, financial education, telehealth and new, fully immersive commerce experiences.

Oh joy, can’t wait.

2. Trust will make or break metaverse success

That isn’t going too well so far. Moving on.

3. AI and XR will be metaverse BFFs that drive transformation

There’s been a lot of talk of VR (virtual reality) — and frankly, we are believers. VR is incredibly exciting and practical. In our own firm, we use it for onboarding, training, workplace collaboration, customer experience and more. Yet there are other paths into the metaverse, ranging from augmented reality (AR) devices to laptops and smartphones.

The technology that we believe will be foundational but is still transformational: artificial intelligence (AI). AI can draw insights from troves of data and simulations, such as what metaverse avatars buy or do, how they play or work, who they meet and how they engage with brands. AI can make it possible even for those without technical experience to create immersive metaverse experiences. Just as you don’t need to be a coder to design a web page on today’s internet, you won’t need to be a techie to make a metaverse space. AI can also increasingly power “digital humans” — computer-generated avatars that look realistic and, perhaps, inspire people to interact with them as they might with fellow humans.

The sixth season of Black Mirror is gonna be fire.

4. The metaverse will redefine every business leader’s agenda

The metaverse may soon touch upon nearly every aspect of your company. In PwC’s Metaverse Survey, 82% of executives said they expect metaverse plans to be part of their business activities within three years. With the metaverse potentially everywhere, every top executive should play a role — and some non-tech executives may be especially crucial.

Spoiler: it will not. In an informal survey of executives I pulled out of my ass, 74% of them only say they expect metaverse plans to be part of their business activities within three years because they fear sounding out of touch and tech illiterate if they say otherwise.

5. The metaverse will be a force for good

Seeking a more diverse and inclusive workforce, and more universally accessible services and products? By making more of your operations virtual — freeing them from geographic boundaries and many bodily limitations — you can reach and include far more people. The metaverse’s realistic simulation can also help boost accountability and transparency, by enabling you to invite stakeholders anywhere to observe, participate and engage.

Yet this potential for the metaverse to be a force for good requires a determination to make it so. You may, for example, want to invest in closing the digital divide in underserved communities so that those who need the metaverse’s benefits most can access them.

They might be onto something with this one. According to a survey of 4,420 respondents conducted in March 2022, 12 percent of online adults said they were very interested in using the metaverse and 24 percent reported being somewhat interested. Overall, 52 percent of Hispanic adults stated they were interested in using the metaverse, and an equal share of Black adults also reported the same. White adults had the least amount of interest in using the metaverse, with 46 percent saying there were not at all interested [via Statista].

Find more statistics at Statista

Though most of the things PwC mentioned can already be accomplished with existing, perfectly sufficient tools. You know, like the internet.

6. Your company will scramble for skills never needed before

Any new technology demands new skills. But the metaverse and the technologies that can support it require some highly specialized ones. Some of these skills barely existed a few years ago. One example is the need to monitor and validate transactions, gather data and protect data in the web3 ecosystem, which is growing to support many metaverse activities. Other skills aren’t that new but previously only existed in specific sectors. Do you have a 3D modeler on staff, along with 3D artists and designers, to help create immersive experiences? Unless you’re a gaming company, the answer is probably no.

Dude we can’t even get clients to go paperless and you want businesses to employ teams of 3D designers? GOOD LUCK. At least all those kids with game design degrees from Full Sail University who couldn’t get hired at AAA studios will have something to do.

I’ve set a calendar reminder to revisit this post in 2024. If the metaverse has made any progress toward widespread adoption and/or avatars that don’t look like they were plucked out of the original Half Life I will eat my virtual hat. As this aptly-titled Medium piece “The Metaverse Is Stupid” says, for now the metaverse is only half-cooked. For the moment it’s Cyberpunk 2077 in 2020: greatly anticipated, overhyped, and incredibly disappointing at launch because it needs more time in the oven. Perhaps if we keep our expectations low and give it some time to bake the metaverse will surprise us, much like Cyberpunk today (or so I hear).

¯\_(ツ)_/¯

Beyond the hype: what businesses can really expect from the metaverse in 2023 [PwC]

The post No One Cares But Here Are PwC’s 2023 Metaverse Predictions Anyway appeared first on Going Concern.

It would be tough for PwC to top its 2020 inspection report as it was nearly blemish-free. Of the 52 audits reviewed by inspectors during that inspection cycle, only one mistake was found—related to the firm’s testing of controls over and substantive testing of revenue and related accounts and inventory—for a deficiency rate of 1.9%. We’re fairly certain that was an all-time-low error rate for a Big 4 firm.

In its 2022 Audit Quality Report, released a few months ago, PwC seemed pretty confident it would have a stellar 2021 inspection report too (bold part added by us for emphasis):

Part I, which is the public portion of the PCAOB inspection report, contains an overview of the inspection procedures and observations on the engagements inspected. Part 1.A includes discussion of deficiencies identified by the PCAOB in its inspection of issuer audits. Only one audit is included in Part 1.A of our 2020 Inspection Report—a significant decrease that reflects the positive impact of the investments we have made in audit quality. The PCAOB’s most recent 2021 inspection cycle (covering 2020 audits) is substantially complete, and the preliminary results are similarly positive.

Now that P. Dubs’ 2021 inspection report is out, let’s see how the folks in Trust Solutions did. But first, a quick word from the PCAOB:

In the 2021 inspection of PricewaterhouseCoopers LLP, the PCAOB assessed the firm’s compliance with laws, rules, and professional standards applicable to the audits of public companies.

We selected for review 56 audits of issuers with fiscal years generally ending in 2020. For each issuer audit selected, we reviewed a portion of the audit. We also evaluated elements of the firm’s system of quality control.

We also selected for review two reviews of interim financial information (“interim reviews”). Our reviews were performed to gain a timely understanding of emerging financial reporting and auditing risks associated with issuers that were formed by mergers between non-public operating companies and special purpose acquisition companies (SPACs). We did not identify any instances of non-compliance with PCAOB standards related to the interim reviews that we reviewed.

It also should be noted that this is the second-straight year the PCAOB has inspected firms’ audits virtually because of the COVID-19 pandemic. 

Of the 56 audits reviewed by the PCAOB in 2021, only two contained significant deficiencies—for an error rate of 3.6%. So in the past two inspection cycles, PCAOB inspectors found only three significant errors in 108 PwC audits that were reviewed—for a deficiency rate of 2.8%. Not too shabby, PwC. 

One of the audits selected by the PCAOB had deficiencies in both internal control over financial reporting and in the financial statement, while the other audit had deficiencies in the financial statement only.

There were three audit areas in which deficiencies were found, according to the PCAOB. They were:

• Long-lived assets: The deficiencies related to substantive testing of, and testing controls over, the valuation of oil and gas properties.
• Equity and equity-related transactions: The deficiency related to evaluating the appropriateness of the issuer’s accounting method for certain warrants.
• Business combinations: The deficiency related to evaluating the appropriateness of the issuer’s accounting method for certain equity awards in connection with a business combination.

The two deficient PwC audits were found for an issuer in the energy sector and for an issuer in the industrials sector. The lone deficient audit in PwC’s 2020 inspection report was also in the industrials sector.

We’ll take a look at the other five 2021 PCAOB inspection reports in the coming days. Spoiler alert: none of them are as good as PwC’s, which you can look at below.

The post PwC’s 2021 PCAOB Inspection Report Shows Once Again It Is Less Awful at Auditing Than the Other Big 4 Firms appeared first on Going Concern.

At the top of this list with the most jobs? Deloitte and PwC. Interestingly, Indeed lists the two firms as different industries.

1. Deloitte
Share of jobs*: 1,774

Industry: Management & Consulting

2. PwC
Share of jobs*: 702

Industry: Financial Services

Indeed explains the methodology thusly: Companies featured on this list have the highest share of new tech job postings, with over 100 jobs per million, posted between 11/18/22 – 12/2/22 in the US. ‘Share of new jobs’ refers to the number of new tech job postings per 1 million total new jobs posted on Indeed.

Deloitte came in first by a wide margin, the companies at the bottom half of the list have share of jobs numbers hovering around 100 or so. Third on the list is Accenture with 414, no other accounting firms appear among the 20 companies on the list though Booz Allen sits neatly at #10 with 188.

You can find links to each company’s Indeed job listings at the original post. If a single click is too much work for you, here is Deloitte and PwC. Recommending hitting those links to see each firm’s Work Happiness Score, see if you can guess which one this is:

20 Companies Hiring Now in Tech [Indeed]

The post Deloitte and PwC Top This Indeed List of Companies Hiring Tech Workers appeared first on Going Concern.

Apparently so, according to the latest ranking of the best HR internships for 2023 by Vault and Firsthand. Only five companies’ internship programs made the list for 2023. Coming in behind SAP and Home Depot and ahead of Centene and Union Pacific is P. Dubs.

Something tells me the crash course PwC interns are getting in all things HR doesn’t cover things like what to do when the firm does stealth layoffs during the first summer of a global pandemic or how to “fully investigate” a female employee’s claims of sexual harassment from male co-workers.

Related articles:

2023 Accounting Internship Programs, Ranked
How Do Big 4 Consulting Internships Stack Up Against MBB?

The post Apparently Interns Are Flocking to PwC to Learn More About … HR appeared first on Going Concern.

In October, PwC Global Chairman and 2012 Going Concern Hottest Accounting Firm Leader winner Bob Moritz told the Financial Times in no uncertain terms that his firm would be stealing as many senior managers as they can get from EY, an extra disrespectful move given the critical talent shortage at that level.

In case EY leadership didn’t read that article in October, PwC is talking to the Financial Times once again and putting EY on notice:

The PwC partners have been urged to help win over executives from rivals, with a particular focus on EY, which is in the middle of a tumultuous decision over whether to split the firm. PwC’s US leadership has told them it wants to attract EY partners with expertise in tax, cloud services, financial crime and environmental, social and governance advice among other areas, one of the people said.

Although PwC has not set a target for the number of people it wants to poach, it has said internally that there is “capacity” to bring in 500 people at partner level in the US in the next 18 months, the people said. Partners brought in from outside, rather than promoted internally, are known as “direct admit” partners.

An EY spokesperson — likely the same one who told FT “they should be worried about us poaching from them” back in October — called bullshit.

“We are hiring more than ever and we are also targeting direct admit partners from other firms,” including from PwC, an EY spokesperson said, adding that 20 US partners had come from PwC in the past 18 months. “Our partners are excited about being leaders of the profession and leaders of their sector, and we are seeing no attrition, period.” [X]

Hilariously, a partner who spoke to FT suggested that if PwC can’t poach, they are happy just to troll EY with the threat of poaching:

One partner said the effort to poach staff from EY extended beyond the US to areas including Germany, France and the Middle East, and even if it failed, it could force EY to pay more to retain the partners that were approached.

“All’s fair in love and war,” the person said. “There’s a concerted effort by us to unseat EY partners, and if we don’t unseat them then at least we disrupt them and push up their cost base.”

Although it hasn’t gone to vote yet, EY Israel has already rejected the very idea of a split, Managing Partner Doron Sharabany told FT that from their point of view “the split will not create benefits.” We haven’t heard much dissent from current partners other than that, though 150 former partners did write a three-page, strongly-worded letter to the firm’s board warning that a split would undermine audit quality and weaken both sides of the business. “The bifurcation could result in neither practice having the size, scale and competence to be truly viable in the marketplace,” it said.

This beef is heating up. Who will win?
PwC targets rival EY in bid to expand partnership [Financial Times]

The post PwC Declares a Poaching War on EY appeared first on Going Concern.

Loneliness was a real issue in lockdown. We gave people as much support as we could, from webcasts with psychologists to free subscriptions to the Headspace mindfulness app, but there’s no substitute for in person contact and having a reason to get out and about in the dark winter months. Other people had the opposite problem to loneliness; living in flatshares with people they had never intended to work alongside day in day out, they needed an escape.

That’s another reason why I’ve said our people can use our offices if they need to, and we won’t be asking questions about why they’re coming in. I’ve been struck by research showing that employers are one of the most trusted elements of society, and this trust is a two-way street – we have to trust employees to make the right decisions.

We aren’t sure how many people took him up on this offer (hopefully none) but we do know that this year, that number will be zero. PwC is turning off the lights and locking the doors. Because the firm wants to encourage people to stay away from the office on the holidays? Not exactly.

Reports BBC, which got the info from The Telegraph which saw an internal memo to PwC UK staff from Ellis:

PwC, which employs about 24,000 people, will shut its main London office from 23 December to 3 January, as well as some smaller sites.

Its chairman Kevin Ellis said having all offices open over the festive period “doesn’t make sense at a time of energy scarcity”

You see, there’s a bit of an energy crisis across the pond and Ellis says PwC UKers wanted the firm to “do our bit to reduce energy consumption.”

“Office life is hugely important to our culture and business,” he said. “But having all our offices open over the holiday period doesn’t make sense at a time of energy scarcity.”

The soon-to-be dark PwC office at Embankment Place is one of the most sustainable buildings in the world. In 2014, it was the greenest building in the world. From an old Guardian article:

During the work, 95% of materials were sourced responsibly and 96% of construction waste was diverted from landfill.

The result is a building with Environmental Performance Certificate A and a BREEAM score of 96.31% – surpassing all others internationally. Today the building emits 40% less carbon than one typical of its size; and 20% of heat and 60% of its energy needs are produced on-site [using recycled waste vegetable oil that is collected and refined locally].

Estimates suggest a utility bill saving of £250,000 a year, but PwC forecasts more: electricity (-221%); gas (-11%); and water (-33%).

For those lucky few who absolutely need to go into the office for whatever, workspace will be available at PwC’s other London office, More London as well as some of the firm’s 19 regional offices.

PwC to shut offices for two weeks to save energy [The Telegraph]

The post Lonely Workaholics at PwC UK Will Have to Find Some Other Place to Go For Christmas appeared first on Going Concern.

From the press release [PDF]:

On 10 November 2022, the Securities Commission of The Bahamas (“the Commission”) applied to the Supreme Court to appoint Mr. Brian Simms, KC as a court supervised provisional liquidator. Further, on 14 November 2022, Messrs. Kevin Cambridge and Peter Greaves of PricewaterhouseCoopers (“PwC”) were approved by the Court as joint provisional liquidators.

Given the magnitude, urgency, and international implications of the unfolding events with regard to FTX, the Commission recognized that it had to, and moved swiftly to use its regulatory powers under the Digital Assets and Registered Exchanges Act, 2020 (“DARE Act”) to further protect the interests of clients, creditors, and other stakeholders globally of FTX Digital Markets Ltd. (FDM).

Over the coming days and weeks, the Commission expects to engage with other supervisory authorities on a regulator-to-regulator basis as this event is multijurisdictional in nature.

FTX filed for bankruptcy protection in the U.S. late last week.

Related:
Sam Bankman-Fried’s FTX Empire Faces US Probe Into Client Funds, Lending [Bloomberg]

The post A Couple PwC Partners Have Been Quickly Assigned as Joint Provisional Liquidators of FTX appeared first on Going Concern.

EY, KPMG, and PwC employ 15,000 people in Russia between them and it was never going to be as simple as global firms kicking out their Russian arms and ghosting Russian and Russia-adjacent clients. Earlier in the year, Deloitte said their exit from Russia would take a few weeks, PwC said it would be “completed as soon as practicably possible,” KPMG didn’t give an ETA at all, and EY said it could take eight to 12 months meaning they are likely still untangling Russian operations. All that to say, it’s complicated.

PwC’s break was perhaps the least complicated, if not the most extreme. On March 6, PwC Chairman and my Big 4  leader mancrush Bob Moritz tweeted a statement regarding the situation in Ukraine which said that under the circumstances, PwC should not have a member firm in Russia and consequently PwC Russia will leave the network. Shortly thereafter, the firm said in a June statement that “any sanction on Russian entities or individuals that is passed anywhere in the world will be applied everywhere in the world.” Meaning they would respect all sanctions anywhere, whether legally required to or not.

Well today we’ve learned that three partners from the PwC Cyprus office who are bound and determined to provide exceptional client service to Russia-connected clients took early retirement in June and are setting up their own practice that will allow them to continue to serve these clients. They’re calling the new joint Kiteserve and City A.M. has some details. Curiously, the addresses listed on Kiteserve’s website — Julia House, 3 Themistocles Dervis street in Nicosia and City House, 6 Karaiskakis Street in Limassol — are PwC addresses.

A PwC spokesperson told City A.M. the new firm is temporarily subletting the space and they will be working in a completely separate space from the PwC Cyprus team.

FT says PwC’s stance on sanctions “had a particularly large effect on PwC Cyprus, given the extensive links between Russia and Cyprus, thinning the firm’s roster of clients” which motivated the newly-separated partners to start up their own firm. “The Big Four went well beyond the sanctions imposed by these countries . . . and, effectively, we’re covering that space to a certain extent, but . . . we were very selective,” said Kiteserve MP Theo Parperis. He estimates about half of Kiteserve’s clients had ties to Russia.

Per FT, the founders struck a deal with PwC Cyprus that freed them from the five-year ban on former partners selling audit, tax, or compliance services and the new firm will be allowed to poach talent from their former firm. No word on how much this deal cost them but we imagine it wasn’t cheap. Anyone else think this sounds a bit sus? So these guys have no restriction on competing with the firm post-retirement, they’re working out of the same office, and the firm is cool with them hiring away talent? Hmm.

Cypriot PwC partners set up new firm to continue working with Russian clients [City A.M.]

The post Some Partners at PwC Cyprus Did Not Want to Lose Their Russian Clients So They Started Their Own Firm appeared first on Going Concern.

The Dallas Morning News reported on Monday:

The U.S. Supreme Court declined on Monday to review the case of former Dallas police officer Amber Guyger, who is serving a 10-year prison sentence for the murder of Botham Jean in his apartment.

The high court’s refusal to hear Guyger’s case upholds her 2019 conviction and sentence. Through a series of appeals, Guyger argued her mistaken belief that she was in her own apartment should negate her culpability for murder.

The Supreme Court did not vote on the merits of her argument. Guyger’s defense lawyer, Michael Mowla, did not respond to a request for comment.

This was Guyger’s last-ditch effort to get someone wearing a black judge’s robe to hear her appeal. According to the Dallas Morning News, the Court of Criminal Appeals in Texas also declined to review her case this year. The last court to hear her case, the Fifth Court of Appeals in Dallas, rejected her argument last year. She is eligible for parole in 2024.

Jean, a 26-year-old risk assurance associate in PwC’s Dallas office, was fatally shot in his South Side Flats apartment on Sept. 6, 2018 by Guyger, who had just gotten off shift and told authorities that she mistook his apartment for hers. She believed her apartment was being burglarized. Guyger lived in an apartment one floor directly below Jean’s apartment and had told authorities she parked on the wrong level of the South Side Flats apartment complex’s garage—the fourth floor instead of the third, where her apartment was located.

Guyger was arrested and charged with manslaughter on Sept. 9, three days after she shot and killed Jean. Guyger was released from jail on $300,000 bond. The Dallas Police Department fired Guyger on Sept. 24 for engaging in adverse conduct. She had worked at the department for nearly five years.

After two days of hearing evidence in late November, a Dallas County grand jury on Nov. 30 upgraded Guyger’s charge from manslaughter to murder. She turned herself in to authorities that afternoon and was released on $200,000 bond.

A jury of eight women and four men sentenced Guyger to 10 years in prison on Oct. 2, 2019 for killing Jean, a day after the jurors convicted her of murder.

You can find all of our coverage of Botham Jean’s murder here.

U.S. Supreme Court rejects request to review ex-Dallas cop Amber Guyger’s murder case [Dallas Morning News]

The post The Supreme Court Had Better Things to Do Than Hear Appeal From Ex-Dallas Cop Who Murdered PwC Accountant appeared first on Going Concern.

The allegation is that former PwC north of England head Ian Green leaked sensitive information about his client, telling an outside M&A banker that the client was going to run out of cash, making the client ripe for a takeover. The client — an insurance and technology group now called Watchstone but called Quindell at the time of the alleged leak — engaged PwC in 2014 for a review of its financial condition and accounting practices, paying more than $5 million for these services. So it stands to reason that the firm had a pretty intimate view of Quindell’s finances at the time.

Via FN:

The Big Four firm is being sued for £63m by Aquis-listed insurance firm Watchstone — formerly known as Quindell.

Watchstone claims Green leaked confidential information about it to a Greenhill banker in 2015, who was advising law firm Slater & Gordon on the acquisition of Quindell’s professional services arm.

“We deny these allegations and are vigorously defending this claim,” PwC said in a statement. Green could not be reached for comment.

PwC was engaged by Watchstone — then Quindell — in 2014 to review its finances and its accounting practices. Quindell paid PwC more than £5m in fees during 2014 and 2015.

According to Watchstone’s claim, which it filed against PwC in August 2020, Greenhill banker Gavin Davies told colleagues that “if we find [Quindell] are in a real corner we can take them to the cleaners”.

In an email to colleagues at Greenhill following the meeting, Davies said Green — then a senior restructuring partner at PwC — had told him Quindell would run out of cash in mid-2015 and that Green would “quietly” look further into the company’s finances on the behalf of Davies and Slater & Gordon. Davies left Greenhill in 2018 for broker Zeus Capital.

What’s funny is the only reason the leak accusation came out is because Slater & Gordon sued Quindell for misrepresenting the value of its professional services division when it bought it from them for $637 million in 2015.

Ian Green left PwC Green left PwC in June 2021, at which time PwC said in a statement that his exit had been “planned for some time and is not related to the claim.”

Related:
PwC partner accused of leaking client information in £63m lawsuit exits firm [Financial News]

The post Did a PwC Partner Leak Client Financial Data? A Court Will Decide appeared first on Going Concern.

Tanoh Kpassagnon sacks Tom Brady pic.twitter.com/JUjAQvjhFF

— Jason Bramwell (@bramweller) October 23, 2022

Kpassagnon, who double-majored in accounting and finance at Villanova University, was a DE on the Super Bowl-winning Kansas City Chiefs team in 2020.

Hope you have a good rest of the weekend, and may your fantasy football teams not suck today.

Related article:

Life as a Super Bowl Winner Is Probably Much Better Than Life at PwC

The post Watch Ex-PwC Intern Sack Tom Brady appeared first on Going Concern.