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Talent
The future of audit talent [Thomson Reuters]
The landscape for audit talent is shifting significantly. Projections indicate a growth in employment opportunities for accountants and auditors, while roles focused on bookkeeping and data entry are expected to decline. This shift is largely due to the integration of AI and automation technologies, which streamline routine tasks and open up opportunities for auditors to engage in higher-value work. This transformation in the job market demands a workforce that is adept at leveraging technology for more complex and strategic tasks.
Top Remote Accounting Candidates of the Week [GC]
Are you struggling to find remote accountants, CAS experts, auditors, or tax professionals for your firm or internal team? Accountingfly can help! With our Always-On Recruiting service, access a pool of top remote accounting candidates without any upfront costs. Sign up now to see the complete candidate list and connect with potential hires.
How to handle an underperforming employees according to HR leaders from Salesforce, EY and Microsoft [Fortune]
“We don’t need to prevent underperformance. The reality is it can happen,” said Ginnie Carlier, vice chair of talent for EY Americas. “In fact, it is often the pain point for an individual that catalyzes growth and learning.”
My Milestone Rewards: A personalized approach to celebrating PwC careers [PwC]
To offer more frequent, personalized rewards throughout a PwC career, we launched My Milestone Rewards on July 1, 2024 to employees across the US and Mexico. It expands on prior programs to reward more employees, while offering opportunities to select how they celebrate key tenure milestones. Key elements include:
- Awards as early as three years into an employee’s tenure. At the three, six, 10, and 15 year milestones (and every five years thereafter in the US, or every five years in Mexico), employees have the opportunity to personalize their reward selection.
- Enhanced reward options, including new well-being offerings. The program includes options for well-being and purpose-driven experiences, in addition to time away or cash. Employees can choose the rewards and experiences that matter most to them – whether it’s a purpose adventure volunteering abroad, or time off with their loved ones.
To Recruit More CPAs, Show Them What’s Possible [FEI]
Auditor, chief financial officer, data scientist, regulator, entrepreneur. Those are some of the many careers available to a certified public accountant (CPA). Unfortunately, however, interest in the accounting profession is waning. And with the stability of capital markets and the business world overall dependent on a thriving profession, the time to act is now. We need to come together as public accounting firms, public and private companies, industry associations and CPA societies to sell a career in accounting differently. We need to create greater awareness for the work of a CPA and the impact it has. And that starts with storytelling.
Audit
BDO sinks to bottom of US audit quality league table [Financial Times]
There are still “unacceptable” numbers of flaws in the work carried out by the largest US audit firms, the industry’s regulator said on Thursday, after its inspections showed a surging rate of deficiencies at mid-tier firms BDO and Grant Thornton in particular. At BDO, 86 per cent of audits inspected by the PCAOB were found to be deficient, meaning that the firm had failed to collect enough evidence to support at least part of its audit conclusion. At Grant Thornton, a little over half of audits inspected contained flaws.
Big Four Audit Shortfalls Stabilize, Latest Inspections Show [Wall Street Journal]
PricewaterhouseCoopers and Deloitte experienced greater deficiencies in their audits of public companies’ 2022 financial statements compared with the previous year, while the overall rate of Big Four accounting firms’ shortcomings stabilized, according to the latest annual inspection reports. The Public Company Accounting Oversight Board last year inspected 230 audits conducted by the Big Four firms in the U.S.—Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers—up from 215 a year earlier. The firms collectively had an average deficiency rate of about 26%, the same as a year earlier. PCAOB Chair Erica Williams said the findings from the inspections released Thursday, which covered audits of 2022 financials, were still unacceptable. The Big Four averaged a rate of 20% over the previous five years, reports show.
PwC fined £15m for failing to report suspected fraud at City firm [The Guardian]
The UK financial services watchdog has fined PwC a record £15m after audit staff failed to tell regulators they suspected fraud at a City firm that collapsed in 2019, leaving more than 11,000 investors almost £240m out of pocket. It marks the first Financial Conduct Authority (FCA) fine against an auditor, and comes three months after PwC was hit with a £4.9m separate penalty by the Financial Reporting Council over the handling of London Capital & Finance’s accounts. LC&F collapsed after taking about £237m from 11,600 investors. Its mini-bonds promised stellar returns of up to 8% a year, but put only a small amount of cash into safe interest-bearing investments. The rest was funnelled into speculative property developments, oil exploration in Faroe Islands and even a helicopter bought for a company controlled by LC&F. The collapse in January 2019 led to reprimands for the FCA and a criminal investigation by the Serious Fraud Office, which is still open. The latest fine, the largest ever imposed on PwC in the UK, draws a line under the FCA’s investigation into the affair.
AI in Accounting
KPMG Survey: GenAI Dramatically Shifting How Leaders Are Charting the Course for Their Organizations [KPMG]
The survey of 225 senior business leaders at companies with $1 billion or more in revenue found that the majority are already seeing the impact of GenAI on their business: 71% are leveraging data in decision making, 52% say it is shaping competitive positioning, and 47% say it is opening new revenue opportunities. 83% believe that GenAI investments will increase over the next three years.
- Executive management says revenue growth is the top goal for GenAI investment, while the rest of the respondents say their top goal is productivity.
- 78% are confident in the ROI of planned investments in GenAI over the next 1-3 years, including 11% who are highly confident. ROI is defined by revenue growth, profitability, cost savings, efficiency, employee engagement, and more.
- 24% plan to deeply integrate generative AI into business processes and strategy.
- 61% plan to expand the application scope of current GenAI initiatives, 55% plan to introduce GenAI into new business functions, and 55% plan to invest in upskilling employees, recognizing the importance of preparing their workforce for the future.
Navigating AI challenges for tax research [Thomson Reuters]
While the future of AI in tax research is certainly promising, it’s important to understand the benefits and challenges to successfully harness the power of AI for a competitive edge. This blog delves into the concerns associated with AI adoption in professional settings and offers strategies to mitigate them, ensuring a smooth transition into an AI-powered future.
International Happenings
Consultants allegedly advising on avoiding Labour tax clampdown [Consultancy.uk]
We shared the original Guardian article about this but Consultancy.uk just got around to writing it up so ICYMI…
Stuart Clifford, a principal at Baker Tilly Isle of Man, said to an undercover reporter at the event, “My last one I did of these – £30 million… [The client] said … ‘That’s my kids’ money. So let’s protect it from IHT today.’ [The] day he got it – £30 million [went] into [the offshore product]. He’s not doing anything funky. He’s not paying a lot for it, that’s just going through investment managers and what have you.”
Deloitte’s Adrian Mills and Matt Lawson go independent [AdNews]
Deloitte Digital down under is changing things up and these two dudes are outta there.
Admen Adrian Mills and Matt Lawson will establish an independent agency and formally separate from Deloitte Digital from mid September. The agency will be called ATime&Place and will deliver advertising work for top tier brands, including Deloitte. Deloitte Digital is re-balancing its offering portfolio to focus on customer and brand strategy, integrated customer experience design, marketing technology implementation and marketing, sales and service transformation. Adrian Mills and Matt Lawson joined Deloitte Digital in 2017 from McCann and went on to establish creative, brand and advertising services.
EY, KPMG benefit most from PwC China’s regulatory woes [Reuters]
Ernst & Young (EY) and KPMG have snapped up over half of PwC’s corporate clients in China that have fled the market’s leading accounting firm as it faces a regulatory probe, filings show. Chinese authorities have been investigating PwC’s role in auditing China Evergrande Group after the securities regulator accused the troubled property developer in March of a $78-billion fraud. PwC audited Evergrande for almost 14 years until early 2023. Regulators have also asked several large state-owned clients of PwC to drop the auditor since at least April. “Compared to previous years, what we’re seeing this year is certainly an unusual client exodus from PwC,” said Fan Zhongwen, an accounting professor at City University of Hong Kong.
News
Deloitte replaces Atos as Olympics lead tech integrator for LA 2028 [SportsPro]
Now, starting with Milan Cortina 2026, Deloitte will be responsible for managing the entire Olympic IT operation, managing equipment and resources from multiple tech vendors at the Technology Operations Centre (TOC). It will design, build, implement, operate and secure the IT infrastructure, key applications, and cybersecurity provisions, building technologies that can be reused and adapted to the needs of individual Olympic and Paralympic Games. Everything from accreditation and scheduling through to results and team management software will come under its expanded remit.
CPA firm says city’s audit not ready to present [Natchez Democrat]
More muni mess.
The Natchez Mayor and Board of Aldermen expected to hear results from its FY 2023 audit, but that didn’t happen. Carr Hammond, CPA and managing partner at Silas Simmons, the accounting firm the city contracts with for its audits, was not available to attend Tuesday’s board meeting, but sent word to Mayor Dan Gibson that the audit was not ready to present. “We will not be satisfied with any audits late in this administration again and that has been made aware to all parties involved,” Gibson said.