Welp, they’re announcing a PE deal
byu/User0273649362539506 inAccounting

Text:

Welp, they’re announcing a PE deal

Not looking forward for what’s to come. We are currently very hybrid. Love the current firm culture but now I’m afraid that will change. Does this ever end in a positive light? Public accounting stinks.

These comments are a joy.

Some people are speculating it’s Crowe. I’d say possibly CohnReznick since there’s a rumor they’ve got a PE deal in the works but I don’t think they meet the culture requirement, by all accounts that place is a dumpster fire.

Crowe wasn’t listed as one of the two firms in the top 25 exploring private equity investment in Forbes‘ September piece “Why Private Equity Is Rushing To Buy Up Accounting Firms.” Carr, Riggs, & Ingram is though and it’s been rumored for months that they’re close to making a private equity deal official. The only other firm Forbes listed as “just looking” is Armanino whose minority investment from Further Global Capital Management quietly made the news a few weeks ago.

We’ll see if OP updates. Feel free to speculate in the meantime.

Update: Tips are saying it is in fact Carr, Riggs, & Ingram and that an external announcement will be made Monday.

Update #2: It appears that intel was good. PKF O’Connor Davies announced a deal of their own on the same day.

The post Let’s Speculate Wildly About Which Mid-Tier Firm is About to Announce a Private Equity Deal (UPDATE) appeared first on Going Concern.

In “Offshoring for CPA firms: The hows and whys,” JofA throws out some figures on outsourcing — both foreign and domestic — based on responses from its MAP survey and sticks to the official line about how the CPA talent shortage is forcing these poor firms to look elsewhere for talent. We’ll ignore how much cheaper offshore talent is compared to their onshore counterparts. We’ll also ignore that firms are laying tons of people off in the US while greatly increasing their headcounts in other countries and not even trying to hide it (see: Firms Really Aren’t Helping This Pipeline Problem, You Guys). Anyway, the AICPA numbers:

Of the more than 1,100 firms that participated in the AICPA’s 2023 National Management of an Accounting Practice (MAP) survey, about 30% said they outsourced domestically and 25% said they outsourced to offshore workers. Another 14% said they planned to start outsourcing domestically, and 12% said they planned to start offshoring.

The CPA talent shortage and an increase in demand for accounting services in the United States are prompting many firms to go beyond their traditional hiring practices and explore the global talent pool and staffing across time zones.

As evidenced by the article’s title, it’s mostly advice for firms on outsourcing best practices. Blah blah. But at the very bottom there’s a sort of case study about a firm in Atlanta that consisted of five employees when they started offshoring “part of its expanding load” in 2018. At first they used a third-party vendor in India which meant this vendor handled the hiring and training of offshore staff, starting with one person and eventually expanding to three.

The firm’s team members, who were used to working virtually, understood the importance of setting up workflows, processes, and controls before pushing tax return billable hours offshore. The approach proved successful, and within months the firm had offshored enough work to India to keep three people there busy.

Would really love to hear from the firm’s team members here.

But then…

One year into the contract, the vendor experienced turnover. The firm initially switched to offshoring project by project and then decided to become the employer of record for its India staff. The firm hired one employee in India they had worked with the year before who was groomed to become team leader, recruited eight others, and took over onboarding, training, and managing the offshore employees.

Man, that leader was really putting in work eh? So fast-forward to current day and they’ve got eight staff of their own in India. And they’re offshoring 12,000 hours to India per year. The offshore staff are doing the preliminary work of gathering documents and drafting emails to clients requesting any missing data that is then pushed back to the onshore manager who communicates with the client and ultimately completes the tax return.

According to 20 seconds of Googling, the median salary for a tax accountant in India is ₹ 600,000 ($7,109 USD). Meanwhile, the average for a tax associate in Atlanta is $61,866 a year. Would ya look at that, 61,866 divided by 7,109 is approximately 8.7. Tell us again how this is because of the CPA shortage when the shortage itself was caused in large part by consistently pathetic pay.

Related: Cheap-Ass Firms Are Loving This Outsourcing Thing

The post One Quarter of Firms Say They’re Offshoring, Another 12 Percent Plan to Start appeared first on Going Concern.

Obviously the answer is that they’re sadists and they enjoy fucking with people.

For real though, people have been asking this since the CPA exam was computerized in 2004. The answer is not “because there’s a conspiracy to artificially inflate/deflate passing numbers to keep the credential prestigious” but that questions are weighted so it isn’t as simple as pass/fail for all questions and a passing score of 75 or above doesn’t translate into “75% or more correct answers.” Throw in the additional complication of moving to a new exam format this year and it takes even longer for The Powers That Be to ensure exams are being scored properly. “It is a necessary part of the high-stakes testing process,” says NASBA.

Here’s what the AICPA said about the current atrocious score release schedule earlier this year:

Whenever a new exam is launched, additional analysis is needed before candidate scores can be released. The schedule for score releases in 2024 is like 2011 and 2017, when new versions of the CPA Exam were launched. With the new CPA Exam Blueprints, there is a significant amount of new exam content, and this requires additional analysis after candidates have completed testing.

Ensuring the accuracy and fairness of the redesigned CPA Exam requires careful attention to detail, precision and the utmost care, which is why the AICPA has implemented score holds, which are brief delays in when scores are available following exam completion. These score holds help ensure consistency, fairness and statistical validation of the exam content.

Standard protocol for licensure exams with significant changes involves placing score holds so that test scores can be thoroughly reviewed and analyzed for accuracy and fairness. This process ensures that the test results are reliable and can be trusted to make crucial pass or fail decisions.

It doesn’t happen often but there have been cases of them getting scoring wrong. See this incident with FAR and REG exams taken between Q1 2011 to Q3 2012. But for the most part this tedious and annoying (to candidates) process works as intended. They’re really trying to avoid a hanging chad situation here (old people will understand the reference).

Hey, while we’re here, get a load of this guy.

Comment
byu/Fragrant_Engine6610 from discussion
inCPA

The post CPA Candidates Would Like to Know Why We Can Determine Presidents in a Day But Not CPA Exam Scores appeared first on Going Concern.

Grant Thornton’s 2024 State of Work in America survey was released today and these key findings alone will make you depressed (if you aren’t already).

• 51% of respondents reported to have suffered burnout in the past year
• 63% named mental and emotional stress as the top cause of burnout
• 40% said people shortages are the most stressful part of working at their organization

Fun. It gets worse. The number of respondents suffering from burnout in the past year jumped by 15 percentage points from last year’s survey.

Respondents said the top causes of burnout were mental and emotional stress at 63%, followed by long hours at 54%.

Alongside the rise in burnout, respondents reported a decline in their overall well-being in 2024, noting a decline in key areas, including mental (32%) and financial (30%) health.

Said Joe Ranzau, managing director of Growth Advisory Services at Grant Thornton: “External factors such as increasing global conflicts, post-pandemic inflation and a particularly stressful political environment are all outside stressors that can burden the minds of employees, who in turn bring these worries with them into the workplace.” Tell us, are global conflicts and politics weighing on your mind at work?

Here’s what respondents had to say about why they’re burned out at work:

And here’s what they had to say about which parts of their job are most stressful:

Now let’s talk compensation. Rather, let’s let GT’s press release talk compensation:

When asked what initially drew them to their organizations, respondents cited benefits (48%) and base pay (45%) as the top two factors. These same elements also play a key role in retention, with 53% identifying benefits and 44% highlighting base pay as the main reasons they remain with their current employer.

Now, with rising costs and inflation continuing to impact households, employees are becoming more critical of their wages and the costs associated with their benefits. To address this, leaders must leverage market data to stay competitive, practice transparency regarding their organization’s financial standing and ensure clear pay practices are in place.

Alright, we’re with you so far.

Rob Ginzel, director of Growth Advisory Services at Grant Thornton, notes that, over the past few years, workers have had the advantage in compensation negotiations, resulting in widespread wage increases. However, inflation over the last year has eroded those wage gains, and the hiring dynamic is now shifting back toward an employer-favored marketplace.

“In times of financial constraints, employers need to recognize that compensation isn’t just about salary,” said Ranzau. “Employees value flexibility in areas such as work schedules, job content and how and where work is done. But employers should be mindful that when salaries are lower, trade-offs — such as adjusting workloads or expectations — may not be as effective in retaining talent.”

Accounting firms:

Continuing on:

An interesting finding from the survey is that only 10% of workers expressed concern about potentially being laid off in the next year, despite job security ranking highly as a motivator for staying with an organization. The survey also found that 25% of workers currently hold a second job, and 37% are considering one, which can quickly contribute to declining wellness and increasing burnout.

A lot of them are probably not all too concerned because they want to get laid off.

Respondents also seem to be fairly confident they won’t be replaced by AI in the next 12 months. To the statement “I am concerned that my job will be reduced/replaced by AI in the next 12 months,” 28% fell in the agree pile, 16% neither agreed nor disagreed, and 56% disagreed or completely disagreed. This despite AI being incorporated into many of their workplaces in the past year.

You can find the full survey here.

Grant Thornton survey: Employee burnout continues to surge as mental and emotional stress mount [Business Wire]

The post Feeling Burned Out? Join the Club appeared first on Going Concern.

High Demand and Job Security

In today’s competitive job market, few professions offer the level of stability and demand as accounting. Every business, regardless of size or industry, requires skilled professionals to manage finances, prepare taxes, and provide strategic guidance. And with an annual projected demand of over 125,000 new Accounting positions over the next decade, the time has never been better to make a change.

OK, we’re with you. Granted firms have been laying off people left and right lately — and that’s not even getting into the more insidious silent layoffs — but generally speaking this is true. It could definitely be worse.

Related 2022 post that aged like milk: At Least We Aren’t in Tech, Boast Smug Accountants Who Didn’t Get Laid Off Today

Also the job market sucks right now for a lot of people unless you’re someone with an accounting background living in Manila but you know what, let’s move on.

Global Opportunities

Here’s what they have to say about the global opportunities afforded to the chosen few who take the blessed path of accounting:

Accounting is a truly global profession, with opportunities to work and collaborate across borders. As businesses expand their operations internationally, the demand for accountants with a global mindset and cross-cultural competence continues to rise. Whether you’re interested in working for a multinational corporation, a global accounting firm, or an international NGO, an accounting career can open doors to exciting opportunities around the world.

The biggest global opportunity afforded to accountants in 2024 is interacting with the ever-growing offshore team.

Diverse Career Paths

One of the most appealing aspects of an accounting career is its versatility, they said.

Accountants can choose from a wide array of career paths, ranging from public accounting firms to corporate finance departments, government agencies, non-profit organizations, and beyond. Moreover, within each sector, there are opportunities for specialization in areas such as tax planning, forensic accounting, auditing, financial analysis, and managerial accounting. This diversity allows individuals to tailor their career trajectories to align with their interests, skills, and long-term goals.

Alright, we’ll give them this one. Get through the public accounting gauntlet for two years and you can go do something better.

Intellectual Challenge and Continuous Learning

Do you ever wonder if they get paid off by the AICPA to say stuff like this?

Accounting is far from a monotonous profession. It requires analytical thinking, problem-solving skills, and a knack for attention to detail. As regulations and technologies evolve, accountants must stay abreast of changes and innovations to remain effective in their roles. This constant learning and intellectual challenge ensure that no two days are alike in the world of accounting, making it an ideal field for individuals who thrive in dynamic environments and enjoy tackling complex problems.

It’s also a great career for people who enjoy doing the same thing year after year after year after year after year.

Alright, here’s what we’re here for…lucrative compensation!

Lucrative Compensation

Beyond job security, accounting offers attractive financial rewards. The combination of high demand and specialized skills often translates into competitive salaries and benefits packages. The average annual salary for those with a Master’s degree in accounting is $80,000, whereas Accountants without a Master’s degree only average about $57,000 per year.

Hmm. Lucrative…

$80,000 isn’t a bad deal for someone from 2010 living in a LCOL city clocking a straight 9-5 five days a week. Lemme bust out a handy dandy chart here:

Oh.

Here’s another analysis that @kleib323 did on how much accounting salaries have increased since 2019 for partners and professional staff. Y’all are accountants so we don’t need to explain what the minus sign means in the % change column.

They would have been better off using lifetime earning potential in their argument, the math maths a lot better.

The post Bold Move Listing ‘Lucrative Compensation’ As One of Five Reasons to Pursue Accounting, Montclair State appeared first on Going Concern.

How X is feeling.

TurboTax states they’ll beat your last preparer’s 2023 price by at least 10% if you’ve got a receipt. Full Service currently starts at $129 for simple filers.

Has anyone worked as a TurboTax live expert? Let me know, I’d be curious to hear your experience.

The post Weekend Discussion: TurboTax Declares Itself Direct Competition of Tax Pros appeared first on Going Concern.

Tinfoil hat – Personally feel like it’s a money grab, AICPA/NASBA/State Boards purposely don’t tell you what questions you got wrong and how they grade the tests so it’s not about application of what you know, it’s more about memorizing as much as you can while hopefully getting lucky on what questions you get on the exam. They’re hoping you fail at least once so they can make more money off it. If they cared about actually testing you on accounting principles and knowledge, they’d remake the test to be standardized, but with a large question bank, and inform you on how it’s scored and what you got right/wrong each time. But they don’t because they want you to keep taking it until you blindly pass.

The question they were responding to was why does FAR have such a terrible pass rate. For Q1 2024, FAR has the lowest pass rate of the core exam sections at 41.92%.

Core Exam Sections

• AUD: 44.63%
• FAR: 41.92%
• REG: 63.42%

Check out that Business Analysis and Reporting (BAR) pass rate tho:

Discipline Exam Sections

• BAR: 42.94%
• ISC: 50.93%
• TCP: 82.36%

But let’s address the tinfoil hat theory. If you aren’t aware, NASBA publishes an annual report every year. In this report, we can see total revenue broken down by revenue source. This is from 2023 [PDF]:

Keep in mind 2023 revenues were temporarily inflated as a result of candidates rushing to sit for the exam before CPA Evolution launched in 2024.

And 2022:

Apologies for the potato quality screenshot, that’s how it looks in NASBA’s PDF.

And let’s revisit 2021, a recovery year that followed significant revenue hits in 2020 due to lockdowns and Prometric closures on top of declining CPA examination numbers. This one is also potato quality unfortunately.

There’s a bit in the 2021 annual report that I think is relevant if we’re going to be donning our tinfoil hats. Said NASBA of 2021 revenue:

Total revenue in fiscal 2021 increased by 27.2% from fiscal 2020. Most of this increase is from examination-related services. This revenue rebounded in fiscal 2021, after a decline in the prior year, due to the effects of the pandemic. One-time anomalies, such as the extension of notice to schedule expiration dates from fiscal 2020 into fiscal 2021, along with other pandemic-related circumstances, brought upon significant swings in revenue between fiscal 2020 and fiscal 2021. In addition, expanded testing opportunities to assist CPA Examination candidates living in countries outside the United States increased examination-related international testing revenue. The increase in this service is shown in the international section volume on the previous page.

It was announced in early 2020 that candidates in India could sit for the CPA exam at eight Prometric testing centers across the country without having to leave home. Well, they’d have to leave their home. Just not their home country. At the time, NASBA said the decision was driven in part by concern for candidate safety related to the pandemic as if this decision was made in March 2020 and implemented the following month and not something that had been in the works long before the Rona existed:

At the time of the announcement they said:

During this extraordinarily challenging time, we know you have many concerns — the health of your families and friends, your coworkers and your communities. The Coronavirus pandemic has affected all of us in ways we could not have imagined. Nearly overnight, the world has changed.

Amidst this disruption, we want to help alleviate one concern you may have — taking your U.S. CPA Examination. We know you have dedicated an incredible amount of time preparing for this next step in your professional development. We also recognize that current travel restrictions, test center closures and other factors make it difficult or impossible for you to take the U.S. CPA Examination as planned. So, to support you on your pathway to CPA licensure, and to maintain your health and safety, we will now administer the Exam in India at eight Prometric test centers (Ahmedabad, Bangalore, Calcutta, Chennai, Hyderabad, Mumbai, New Delhi and Trivandrum). We hope the convenience of taking the Exam in your country eases some of your burden while you think about your family, friends and colleagues.

Sure, they could intentionally fail domestic CPA candidates to pump up those examination fees — which, by the way, have increased over the time period discussed here both nationally and in some states — but wouldn’t it be more lucrative in the long run to open up CPA exam testing to international markets like they just did in the Philippines? It’s not like they have to personally build testing centers, Prometric is already set up abroad.

Since international CPA exam testing was first launched in 2011 with Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates, many more countries have been added. This is the full list as of September 2024:

• Bahrain
• Brazil
• Egypt
• England
• Germany
• India
• Ireland
• Israel
• Japan
• Jordan
• Kuwait
• Lebanon
• Nepal
• Philippines
• Republic of Korea
• Saudi Arabia
• Scotland
• United Arab Emirates

I’ll see if I can dig up some numbers on international CPA exam testing revenue. Then we can really get the foil burning.

The post Unsubstantiated Conspiracy Theory of the Day: The AICPA Wants You to Fail the CPA Exam appeared first on Going Concern.

But are they? Are they really? Sure, demand for consulting services is down as businesses clench their buttholes in anticipation of a significant economic downturn — sphincters have been getting a workout for like two years now and so far a spectacular crash hasn’t come — but how do you explain all the audit cuts? The official line from firms is “lower than expected attrition” on top of “business conditions” but there’s got to be more to it than that.

More importantly, how can these firms look people in the eye as they recruit on college campuses and go into high schools to preach the joys of a career in accounting when you have headlines like this followed by large layoffs just two months later?

A total coincidence, surely.

Last year BDO told the Financial Times it was the accountant shortage that was driving them to double its offshore workforce. “We are seeing a tremendous talent shortage in the profession,” said BDO USA CEO Wayne Berson to FT. “While it would be nice to just hire domestically, you have got to be open to the notion that maybe someone else has something that you don’t have, that you can buy.”

In early 2023, BDO laid off about 125 people and then leadership hopped on a plane to India to party. Bad optics to say the least.

“Accounting is stable,” the peddlers of the profession say. We say it too. I was working in CPA review back in 2007 when the economy began to sour and as the shit was unceremoniously introduced to the fan in 2008, business was booming. Accounting and government, those are the two industries that consistently hired throughout the financial crisis. Perhaps the only two. Stability has always been the profession’s biggest

Sure there were layoffs back then. Offers occasionally got rescinded, incoming classes of associates were slimmer than the fat years that had come before. But on the whole, unemployment in the sector remained low.

What’s different now in 2024 compared to 2008, besides needing to Klarna your groceries, is that outsourcing was practically unheard of back then. In 2010, less than 2% of PwC UK’s audit work was performed offshore. We’ve heard of firms with as much as 60-70% of work being done needfully these days.

I don’t want to hear shit about an accountant shortage anymore.

The people have told firms what needs to be done to get students interested in accounting, meanwhile firms are thumbing their noses at the idea of paying people with five years of education what they’re worth and holding out for a near future where AI can effortlessly do the work of 25 interns, supervised by offshore seniors getting paid 1/6th of onshore ones. Firms are doubling and tripling down on offshore staff, stretching their tentacles into smaller cities in India because, get this, rent’s too high in Mumbai. This is Reuters in July 2023:

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

…

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

And then you’ve got The Powers That Be who, in their infinite wisdom, are opening up the gates so that foreigners don’t even have to leave their town to be licensed as a Certified Public Accountant in this country. Some 300,000 workers in the Philippines currently answering customer service calls for US businesses are about to be put out of work by AI, that’s a whole lot of bodies to throw at accounting grunt work. The outsourcing industry has its own training programs that can turn an unemployed call center worker into an offshore associate for a US-based accounting firm in a matter of months or even weeks. See where this is going? Nothing against offshore workers, this isn’t their fault.

Of course students aren’t buying what the profession is selling. Look at what the biggest, most profitable accounting firms in the country — and world, really — are doing.

Lemme loop in this comment quick:

Comment
byu/Tiny_Basis1852 from discussion
inAccounting

The experience is being offshored as well. What’s the next generation going to learn if all the work they used to do to cut their teeth is sent overseas?

Maybe in five or ten years when excessive offshoring starts blowing up in firms’ faces things will change for the better. Or maybe that’s a quixotic position to take and we should all start being extra nice to the offshore team because they’ll be the managers some day in the not-so-distant future.

See also:

The post Weekend Discussion: Firms Really Aren’t Helping This Pipeline Problem, You Guys appeared first on Going Concern.

OP says:

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

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

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

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

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

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

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

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

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

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

From the press release they put out today about the proposed CPA Competency-Based Experience Pathway:

Designed to increase flexibility for candidates, respond to market conditions, and protect the public, the pathway allows candidates to meet the final stretch of licensure requirements by exhibiting competencies according to a model framework that has been developed by AICPA and NASBA. The framework was developed with significant input and advice from a diverse cross-section of the profession, including members of an AICPA and NASBA working group made up of practitioners, regulators, academics, and state society leaders.

Recycling this gif from “Did the Anti-150 Hour Crowd Finally Beat the AICPA Into Submission? Looks That Way” because lol:

“The proposed pathway encompasses the perfect mix of flexibility for CPA candidates while maintaining rigor for public protection,” said NASBA President and CEO Daniel J. Dustin, CPA. “We look forward to the input and direction from the 55 U.S. Boards of Accountancy on this important and necessary framework to strengthen the CPA pipeline.”

Let’s remember this is the same group that fought hard to keep the 150-hour rule in place even when everyone else, even academia, was saying the profession should think about ditching or at least modifying it. The 150-hour rule has been successful in artificially inflated Underwater Basket Weaving 101 class lists at universities across the country for two decades, making better CPAs not so much. But sure, let’s talk about “maintaining rigor for public protection” now.

Said Journal of Accountancy in their write-up:

The proposed professional competencies are:

• Ethical behavior;
• Critical thinking and professional skepticism;
• Communication;
• Collaboration, teamwork, and leadership;
• Self-management and continuous learning;
• Business acumen; and
• Technology mindset.

The proposed technical competencies are:

• Audit and assurance;
• Tax; and
• Business and financial reporting.

The competencies, which would be verified in the workplace by licensed CPAs, are expected to take most candidates a year, but there is flexibility in the timing for completion.

Comments on the CPA Competency-Based Experience Pathway are open until December 6. If you have unhelpful troll comments to make or shitposting to do, please do so in our comment section and not the AICPA’s form. I’m serious.

Exposure draft in its entirety below:

Exposure draft: Proposed “CPA Competency-Based Experience Pathway” [AICPA]

The post Benevolent Overlords of CPA Licensure Float Batshit Insane Idea to Prove Competency, Not Just Credits appeared first on Going Concern.

The post Can Anyone Help This Eager Applicant Figure Out Why They Can’t Get an Interview at Deloitte? appeared first on Going Concern.

Imagine thinking this is true#TaxTwitter pic.twitter.com/ClJT86yG6Z

— TaxBirdie (@tax_birdie) September 10, 2024

Thread

The post Dumbass Take of the Day: This Guy 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.

The pitch:

View this post on Instagram

A post shared by Paul Andon (@bized2052)

The contest is open only to UNSW students over the age of 18 who reside in Australia so no one in our audience get any bright ideas. Don’t think that’ll be a problem anyway.

The winner will receive $5,000 ($3,331 USD); runner up gets $3k and third place $2k.

Accounting in 60 Seconds – Student competition [UNSW]

The post You Couldn’t Pay Me Enough to Make Accounting Sound Cool appeared first on Going Concern.

Brad is coming into this from the business leader side, not the accounting firm side. As the largest employers of accounting graduates by far, it’s the firms people talk about most when they talk about raising pay and lowering hours so it’s nice to get a different perspective from another side of the profession.

His TLDR: “As business leaders, we can change the narrative on accounting from a procedural, ‘must have’ function to a dynamic, value-adding operation that is attractive for new talent to find professionally fulfilling. Leaders can take several steps to help chart a path forward.”

Cool. Right. Let’s see your steps, Brad.

Number one:

See accounting and audit as less of an overhead cost center and more as a partner in the business’s overall health and growth. For more than a year, several companies have been listing the accountant shortage as a material weakness in their internal control over financial reporting, indicating that a material misstatement could occur as a result.

Organizations should dedicate additional resources and focus to securing their accounting talent as they would to securing their revenue-generating talent.

If businesses could get away with using ChatGPT for all their accounting needs, they would. Countless people who don’t know what accountants do are convinced accountants will be as obsolete as cobblers, telephone operators, and accounting bloggers within the next five or ten years thanks to AI. Here’s a good Threads thread about why those people are dumb.

Keeper proudly debuted its Ask an AI Accountant GPT-4 tool last year and it’s scary good at answering specific tax questions when the asker knows what they’re supposed to be asking. Like all current day AI tools, it sometimes pulls things out of its ass.

For now, accountants more than justify their line items on the payroll. It’s just that their employers don’t get that. If the AI were good enough, they’d replace you all tomorrow. For now, paying poverty wages to people halfway across the world will have to do.

Alright, that’s depressing. Hopefully number two is better:

Invest in accounting teams through training and other upskilling programs. As with any profession, the classroom only takes experience so far. Helping individuals upskill can have broader organizational benefits.

He mentions mentoring programs, companies paying for continuing education (um, they better), basic and advanced upskilling, all that good stuff. Great. Do that. Pay for advanced degrees, too.

Number three:

Create closer relationships between accountants and students. Developing talent begins with education about the various career opportunities an accounting degree or CPA can provide. Such education could also be an opportunity to diversify the accounting or CPA pipeline.

Firms and the various bodies working hard to address the accountant shortage in any way that doesn’t involve paying people a ton more money are big on this one. So they’re sending CPAs into schools to talk about their career (and throw candy at the students). By all means, go for it and get in those schools. Read this first before you do, please: Want to Do Your Part to Help the Accountant Shortage? Here’s What You Can Do Right Now

Number four:

Consider how technology can help responsibly ease the burden of administrative or data-centric tasks, and provide a reprieve in the talent shortage. Technology has changed the way we work, and the accounting profession should continue to evolve. Consider what tools can help with the “first run” of mundane or repetitive tasks, freeing up time for more elevated or nuanced tasks.

I wonder how many people quit EY mostly because of having to interact with Mercury?

Last one:

Establish tone at the top within the function and in the organization to instill best practices and gravity of the function’s purpose. As leaders, we can create programs and policies, but exemplifying the words on paper through our actions will drive results.

Leaders should consider how their actions contribute to the future of the profession. This could means evangelizing on behalf of the profession, explaining complex scenarios, demonstrating thoroughness in day-to-day activities, or helping troubleshoot emerging issues. Teams will remember our actions as they grow in their own careers. As leaders, most of us can likely cite the long-term impact a mentor’s actions have had on our own career growth or journey.

He wraps up:

Failure to safeguard the talent pipeline for accounting can have ripple effects in the business world at large. By demonstrating the value of accounting and auditing to rising professionals, business leaders can attract qualified talent to the accounting field, restoring a profession that would benefit from a boost.

Related, I guess: Job Security Isn’t Enough to Keep Many Accountants From Quitting [WSJ]

The post Let’s Critique This Guy’s Five Steps For Business Leaders to Address the Accountant Shortage appeared first on Going Concern.

The Philippines is experiencing a shortage in accountants, a predicament that will likely worsen given the declining number of students taking accounting-related courses coupled with other emerging trends that seem to be taking a chunk out of the talent pool of traditional accounting firms.

Marvin Galang, co-founder of financial mobile app built for freelancers called Beppo, said on Friday that they found alarming the results of a survey showing that there is a 41-percent decline in student enrolment in local accounting programs.

“Subsequently, we also saw a decline of 35 percent in the number of [certified public accountant] examinees from 2019 to 2023,” Galang said during a conference focused on the local accounting industry.

Check out this response to my tweet of that article:

I would strongly disagree and suggest some fact checking. As the second largest employer of accountants in the Philippines we get over 4000 applications a month. A bit of scare mongering….

— Nick Sinclair (@nickqsinclair) August 22, 2024

I wrote about a potential shortage of accounting talent in the Philippines way back in 2023. That article contains a couple figures that were up-to-date as of publication time: namely a decrease in candidates sitting for the Philippines certified public accountant exam, a notoriously difficult exam with a pass rate below 35%. No worries though, Filipinos can now sit for the US CPA exam without even getting on a plane. Please, contain your rejoicing.

In both our article and the Inquirer one, there’s an important distinction when the word “shortage” is used. That is, onshore firms in the Philippines are having trouble finding talent. And it’s pretty clear why if you do the math. If you’re a Filipino who knows your debits from credits then you’re far better off working for an offshore outlet than you’d be working for a Philippines firm because your salary is double or more. Compare a starting salary of ₱15,000 (about $267 USD) at a Philippines firm to Php 45,000 ($800 USD) doing grunt work for a firm in the US, UK, or Australia. And the outsourced offices have karaoke!

Anyway, yesterday I saw this Bloomberg article on Twitter: The World’s Call Center Capital Is Gripped by AI Fever — and Fear. The headline pretty much gives it away but the gist is that AI is quickly embedding its capable tendrils into the robust business process outsourcing industry in the Philippines. Because of course businesses that are already paying poverty wages to people in poorer countries are going to save even more money not having to pay wages at all. Did we expect any less?

Avasant, an outsourcing advisory firm that works extensively in the Philippines, estimates that up to 300,000 business process outsourcing (BPO) jobs could be lost in the country to AI in the next five years.

“This poses a once-in-a-lifetime risk and opportunity for the industry in the Philippines,” said Akshay Khanna, managing partner at Avasant, whose analysis estimates AI could also create up to 100,000 jobs in new roles like training algorithms or curating data. “It’s not all doom and gloom.”

It’s hard to overstate the importance of the BPO sector to the Philippines. It’s the country’s biggest source of private sector jobs and the biggest sectoral contributor to gross domestic product. Socially, the centers are a source of decent money for non-university-educated Filipinos that doesn’t require them to work abroad. The government had been banking on the industry to help it move up the value chain, propel its 100-million-plus citizens into the middle class and kickstart the creation of other white-collar jobs. But AI arrived before that’s happened.

You see where I’m going with this?

According to Glassdoor, the average salary for a BPO in Manila is ₱18,612, so only slightly more than an entry level job at a Philippines accounting firm (LOL, of course working at a call center pays better…of course it does). Lack of education isn’t a problem because the companies outsourcing to US firms offer their own training programs and can have ex-call center grunts hitting the spreadsheets in months or even weeks.

Yeah, they’re not going to have any problem finding warm bodies to throw at US bitch work. And you know the firms will be more than happy to send it over there while continuing to charge clients US fees.

The post There’s About to Be a Ton of Warm Bodies to Throw at Offshore Accounting Outlets in the Philippines appeared first on Going Concern.

Thus I went digging around in our archive and revisited the story I wrote about their getting in bed with private equity on September 14, 2021: Private Equity Is Now Dipping Its Toes In Public Accounting Firms

What I found there made me cringe into another dimension.

You see, I’ve written 3,792 posts on this website over the last 15 years. I’m old so my memory isn’t what it used to be and what it used to be already sucked so I can’t possibly remember everything I’ve written. Regular readers of Going Concern will know my approach to anything accounting firms say is usually cynical, perhaps overly negative, and dotted with profanity.

For some reason, I threw skepticism out of the window for the EisnerAmper private equity deal and like an absolute fool I naively believed the PR line at the time which was that private equity investment would give accounting firms necessary funding to make big investments in talent and technology. And unlike bad takes of years past, I can’t say I was drunk when I wrote it because I no longer drink. Excerpt of the old article in italics:

Per the press release:

TowerBrook’s significant capital infusion will help drive EisnerAmper’s long-term growth initiatives, which include accelerating the evolution of service offerings, investing considerably in talent and technology, and strategically expanding via organic growth and targeted mergers and acquisitions—all directed at exponentially enhancing client service.

We can safely extrapolate from this bit that Eisner understands it will take more than squeezing clients for every dime billable hours to compete in the ongoing (and escalating) talent war.

Fucking idiot. Naive nitwit. What was I thinking? Why did I, for once in my life, blindly believe an accounting firm’s flowery press release? This was right about the time ‘The Great Resignation’ was well underway and Wall Street Journal jumped on the accountant shortage train, pushing out article after article about how dire the situation was becoming and would be in the near future. I suppose I believed firms were panicking about the talent thing and would take appropriate measures to recruit and retain talent. YOU ABSOLUTE FOOL.

Someone even called it out in the comments at which point I should have deleted the post in shame but we don’t do that so it forever remains a reminder of how naive I can be despite my deeply embedded cynicism toward the motives of accounting firms.

And another one.

Sigh. Look at Miss Cleo up here knowing what’s up. It shouldn’t have been difficult for me to foresee either, firms had been headed that direction for more than a decade by that point and I’ve been observing them for long enough to know all too well how they operate (that’s where the cynicism comes from, after all). At least now they’re being honest about what they’re using private equity for.

Boomer Partners Selling Out To Private Equity And Riding Off Into The Sunset
byu/ConcentrateMedical61 inAccounting

I can admit when I’m wrong and in this case, I was embarrassingly wrong. Wrong. More wrong than I’ve been on anything else.

I promise to be more skeptical of obvious bullshit in the future.

The post I Was a Naive Fool to Think Firms Wouldn’t Be Money-Grubbing Pricks appeared first on Going Concern.

Immediately following this chart the report says:

If 2022 starting salaries were the primary determinant for business students choosing a major, accounting would be their last choice among this slate of options.

With the proliferation of salary information and ChatGPT at their fingertips, students and parents are savvy enough to understand and consider this as a factor. In a recent Journal of Accountancy interview with academic leaders, Professor Nancy Bagranoff of the University of Richmond said, “One change we have noticed is increased salary transparency. Students make use of online tools to compare salaries and are more aggressive in negotiating terms.” As these tools and pay transparency become more common, new recruits and experienced accountants are expecting higher salaries, and employers must respond.

Quote from National Pipeline Advisory Group’s Accounting Talent Strategy Report, page 59

The post Chart of the Day: Accounting Salaries Just Don’t Add Up appeared first on Going Concern.

“We are no longer a capital-light profession, we’re a cap-heavy profession,” said Francesca Lagerberg, chief executive of Baker Tilly International, whose 110 member firms had $5.2bn in annual revenue. “There’s an amount of spaghetti against the wall as everybody is trying different things, but no one wants to be the network that didn’t make the moves and wasn’t able to take advantage of the opportunities.”

“US accounting firms rethink global networks,” Financial Times 7.30.24

We’ve always said firms should take more risks and learn to be proactive rather than reactive but I’m not sure this is what we had in mind.

For shits and gigs, I pulled out my tarot deck to get a quick single-card insight into the near future for accounting firms.

After a thorough shuffling of the deck and a brief reflection on the current state of the profession — particularly the PE deals of the last couple months — I pulled chariot reversed (deck is Blooming Cat btw).

Says Labyrinthos of chariot reversed:

Reversed Career Meaning	Reversed Finances Meaning
lack of ambition, too aggressive in career goals	rushing into or hesitant about financial decisions

Career Meaning – Reversed Chariot

Reversed, the Chariot can signal either a lack of ambition, focus or drive, or alternatively, too much of it. Ultimately, this card brings up questions about how forceful or aggressive you are when pursuing your goals. Are you someone that waits around passively for things you want to happen, hoping that they’ll fall in your lap? Or are you so forceful, that you are inconsiderate of others in your pursuit of success? Both approaches can bring you trouble. Being aggressive to the point of hostility can backfire on you, while being so passive can never bring you the kind of happiness you desire. Are you okay with either of these options? What does a healthy middle ground look like?

I’m sure it’s fine. Anyway, feel free to sound off in the comments about the direction things are headed or, if you prefer, you may ruminate to yourself. Have a good weekend.

The post Weekend Discussion: We’re in the ‘Throwing Spaghetti at the Wall’ Stage of Accounting Firm Strategy appeared first on Going Concern.

Just the other day, Moved on in Arizona asked a question about workplace etiquette, specifically if it’s OK to complain about your colleagues constantly dipping out to do stuff for their kids if you yourself don’t have any. He’s since resigned but his boss keeps checking in to see how he’s doing. He writes:

DEAR ABBY: I worked for 11 years in the accounting department of a busy law firm.

During my tenure, my three much younger colleagues married and started families. Due to the inevitable trials of raising kids, planned, unplanned and often simultaneous absences became commonplace, which left me to run the department alone.

During my last performance review, which I presumed to be confidential, I shared with our boss my exhaustion and health-impacting stress.

My appeal for additional personnel was rejected.

Rather than address the matter in the context of firm productivity, our boss informed each of my co-workers that I had complained about their chronic absenteeism, drawing charges that I, a middle-aged male with no children, was “insensitive” to their familial obligations.

I mended fences to the best of my ability but resigned shortly thereafter. I never confronted my boss, and he was never aware I had any knowledge of his manipulation. He now contacts me monthly to feign concern for my health and tell me how much I am missed, all of which is disingenuous.

As my former colleagues have now left the firm and face no retribution, I would like to end his contacts with an appropriate expression of my contempt. Or should I simply block him and be done with it? — MOVED ON IN ARIZONA

Abby — real name Jeanne Phillips who’s held the Abby post since 2000 — essentially curved the childless accountant vs. parents issue completely and said only that Moved On should move TF on and ignore his boss. “As a former employee of that firm, you are under no obligation to have any more contact with your former boss,” she wrote. “If you are still in the working world, refrain from venting about your contempt.”

What do we think? Should he tell his ex-boss off? Should he have complained in the first place? Was the boss a dick for snitching?

Related:

The post Childless Law Firm Accountant Asks If It’s Cool to Complain About Your Coworkers’ Familial Obligations appeared first on Going Concern.

I wasn’t able to find any information on the average cost of those extra 30 units, probably because it varies so much so instead let me drop two relevant links. You all are welcome to tell us how much you paid for your 30 units in the comments (or by email).

Rethinking the 150-Hour Requirement for CPA Licensure [CPA Journal] This one does a pretty good job of explaining the current debate over 150 units as well as the arguments for and against.

Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities [Center for Audit Quality] This CAQ research, now exactly a year old, dives deep into why students aren’t pursuing accounting or, if they did, why they aren’t interested in getting licensed. According to their research, 81% of undergraduate accounting majors plan to get their CPA. This research talks extensively about why the remainder don’t go that route and the cost of those extra units comes up quite a bit. As you can see from the chart below, cost is a hurdle to both the to CPA and to not CPA groups.

What doesn’t come up at all in that research is how people who scrimped and saved to make those 30 units happen are going to feel if the requirement is suddenly lifted in their state. Hell, even people who could afford it might feel some type of way.

Discuss. And let’s keep in mind this is tagged as a crazy idea, not a plausible and immediately actionable one.

The post Crazy Idea of the Day: If 150 Units Goes Away, Refund Everyone’s University Fees appeared first on Going Concern.

In the wake of Colorado firm and former Trump Media auditor BF Borgers being charged with “massive fraud” by the SEC in May, law firm Armstrong Teasdale has helpfully crafted some thought leadership aimed at those seeking audit services. The TLDR is don’t trust them, bro. The actual text can be found a few paragraphs down but first let’s catch you up on the story if you don’t know it.

Former Borgers clients were unceremoniously launched into the auditorless abyss by the quick shuttering of Borgers’ “sham audit mill” and there were so many of them that the SEC put out a notice aimed directly at these clients to remind them of all the stuff they are required to do upon finding out their auditor is trash. Losing your auditor at a time even larger audit firms are exiting the public company audit space completely is not a good time. Luckily for capital markets, most Borgers clients were small fry so their inconvenience didn’t exactly send 2008-level shockwaves through the economy.

But we aren’t talking small violations at Borgers here. It takes a lot to get “permanently closed” by regulators. Just look at Big 4 firms still happily chugging along despite racking up record fines over the years.

The lesson: Do your due diligence before choosing your audit firm, clients. Borgers’ reputation for shoddy drive-thru audits was known long before the SEC started typing out an order. Then again, maybe that’s why some clients chose them (not accusing anyone, just sayin’). Anyone seeking rubber stamp audits I guess can just ignore this advice and look for a firm that gets really pissed off at you if you start asking questions.

These are just a few basic questions Armstrong Teasdale encourages clients to ask potential auditors. Yes, it’s tedious. Yes, it’s a lot. Yes, they could still bullshit you.

• Basic Firm Information: What is the name and address of the firm, how long have they been in business, and how long have they been registered with the PCAOB? Are onsite client visits available? Does the firm have any references from its existing clients? Has the firm been involved in previous litigation brought by a client, and if so, how was it resolved?
• Organizational Information: What is the corporate structure of the firm? Are decisions made by a board of directors, officers or a management committee? Who conducts supervision over an audit engagement, and how is that review documented?
• Ownership and Leadership: Who are the individual owners, executives or managers of the audit firm? Do publicly available records reflect any risk concerns with respect to those individuals?
• Regulatory Oversight: Does the PCAOB have any records that reflect concerns with the firm? The PCAOB oversees audits of publicly traded companies and broker-dealers. The PCAOB inspects registered accounting firms, and portions of the inspection reports are publicly available. The registration application, annual reports and any disciplinary proceeding information are also available on PCAOB’s website. PCAOB status is also relevant to investment advisers in their SEC Rule 206(4)-2 obligations.
• Business Risks: Does the audit firm maintain written policies requiring it to comply with the PCAOB requirements? How often are those policies updated? Does it maintain audit documentation as required by PCAOB standards? Does it maintain an internal Code of Ethics, a business continuity plan or controls to maintain the privacy of client information?
• Audit Firm Engagement: Is the audit firm willing to respond to a due diligence questionnaire? Does the engagement letter with the auditor contain a limitation of liability in favor of the audit firm? Alternatively, does it provide that the audit firm will defend or indemnify the client against any losses caused by the audit firm’s services?

In recent years the PCAOB (that’s the Public Company Accounting Oversight Board for the plebs) has made it super easy to search inspection reports to dig up dirt on audit firms. It can be a little tough for people unfamiliar with the language of PCAOB inspection reports to parse what’s genuinely bad and what’s just PCAOB nitpicking but they do you a solid and put the deficiency rate for a particular year in the search results. Part I.A. Deficiencies are the bad ones on the PCAOB scale, “deficiencies that were of such significance that [the PCAOB believes] the firm, at the time it issued its audit report(s), had not obtained sufficient appropriate audit evidence to support its opinion(s) on the issuer’s financial statements and/or ICFR. 100% Part I.A. Deficiency Rate = couldn’t audit their way out of a paper bag. See:

A reasonable person could argue here (and probably will in the comments) that PCAOB deficiencies are often meaningless paper-pushing unless restatements and/or lawsuits get involved but let’s not confuse the clients OK?

For more tips on picking an auditor, see “Hiring a quality auditor: Your guide to the selection process” [PDF] from the AICPA.

The post PSA to Clients: Be Sure to Ask Your Auditor If They’ve Committed Egregious Standards Violations Before Signing That Engagement Letter appeared first on Going Concern.

Many months pass and now the candidate’s firm is bought by another firm. The culture is rapidly changing for the worse, people are getting PIP’d to death and laid off, and the survivors are anxious they’ll be next on the chopping block. So the job seeker reaches out to the recruiter and says she’s once again on the market. The recruiter contacts that other firm and says “Good news! That auditor you liked is looking to make an exit now.” “No thanks,” said the firm. “That bridge has been burned.”

As far as the firm was concerned, the job seeker pitted them up against the current firm and leveraged their interest in her to secure a raise.

The candidate is still on the market.

I’m positive we’ve written a lot about counteroffers over the years but all I could find in the archive after 20 seconds of Googling was this old Open Items post: Should I stay or should I go now? (Counter-offer). Sadly any comments made on that post were forever lost when we switched away from Disqus for comment management some years ago. Hope that person figured it out.

Thus, I’m posing the question to the audience now. Counteroffers: yea or nay? Anyone have good or bad experiences to share? Is there anything wrong with using other firms to force your current one into a generous counteroffer?

Oh and here, I found another old article: Counteroffers Rarely Work for Employees Jumping Ship. Same topic, different perspective.

The post Weekend Discussion: Let’s Talk Counteroffers appeared first on Going Concern.

Are y'all seeing this too?

I get this type of comment on my videos often. pic.twitter.com/NItQUjoA3W

— Logan Graf (@LoganGrafTax) June 23, 2024

Just going to leave this here.

Twitter thread.

The post Weekend Discussion: What, No Mention of the Long Hours? appeared first on Going Concern.

If you prefer, you can watch the episode on YouTube.

If we can understand the why of the shortage, we can take steps to fix it. In this article, we’ll talk about that why but also how. How accounting firm leadership can do their part, that is.

The Value Proposition: It’s a Bit Meh, Isn’t It?

Those already inside the accounting profession know the value their work provides to clients and capital markets but to students looking in from the outside, the message they’re getting blasted at them on social media like a firehose is that spending your career tied to a desk at an accounting firm is as fun as a trip to the dentist. Except unlike the dentist chair, sometimes you’re there for 60 hours a week.

While a career in accounting opens all kinds of doors, tends to be stable even in economic downturns, and isn’t such a bad way to spend your life, the value proposition leaves a lot to be desired for those who don’t even know what being an accountant is like. As Jeff so eloquently puts it, “Our value proposition needs a facelift.” Translation? We need to shake up the damn “we’ve always done it this way” snowglobe if we want to attract top talent.

• Fix it: So, how do you give your value proposition a much-needed makeover? Pay more (you’re probably not at market rates for talent), make work more flexible and meaningful, and stop caring where your next hire lives–embrace remote talent!

Then make sure you’re offering ample perks. Ask yourself — and be honest with yourself because we’re being real here — if you’re bringing enough to the table. Better yet, ask your last four employees the honest reason why they left and start there. That should give you insight into where you might be coming up short.

The Battle Royale for Talent: Let the Games Begin

It’s not just other accounting firms we’re competing against – it’s a veritable Hunger Games of talent acquisition. We’re talking consulting firms, tech giants, the whole shebang. And they’re pulling out all the stops to woo potential hires. If you want to have a chance against these attractive employers, you have got to bring your A-game. You don’t just need better perks than the firm down the street, you need the best perks on the entire block.

• Fix it: To win the talent war, think outside the box and offer perks that your competitors and other companies can’t match. If you’re not paying at or above market, you can’t get in the game. If you are, keep reading–Think: paid sabbaticals, flexible work arrangements, profit-sharing, and bonuses or raises based on results not years in a seat.

Show ’em why you are a great leader, communicator, and how your role is first to make sure THEY have what they need to be successful. By creating a workplace that’s as fun as it is rewarding, you’ll have candidates lining up at your door (or inbox).

Let’s Crunch Some Numbers… and Dreams

Now, let’s crunch some numbers and see what the data has to say. According to Jeff, we’re facing a pretty hefty gap between the number of jobs available and the number of warm bodies to fill them. It doesn’t take an accountant to understand the job market doesn’t balance so really, we don’t need to crunch numbers at all.

• Fix It: Jeff’s biggest piece of advice: focus on what we can control. Whether it’s offering flexible work arrangements, investing in employee training and development, or revamping your hiring processes, there are plenty of steps you can take to turn the tide in our favor. Which one to start with you ask? “Stop asking me and ask your team,” said Jeff, sarcastically. “They will tell you.”

Looking Ahead: What’s on the Menu for Future Episodes?

Get ready for a smörgåsbord of topics in the next few episodes of the Accounting Talent Podcast. From domestic remote work policies to top-grading initiatives for rising leaders and beyond, consider it another great stop for all things talent management in the accounting world. Stay tuned as Jeff and Rob discuss real-life case studies from organizations that have cracked the code on talent acquisition. By learning from their triumphs (and maybe a few missteps), we can all learn to chart our own course. And if you have a talent question for Jeff you’d like to see answered on a future episode, feel free to reach out.

Let’s Get this Party Started

It’s time to roll up our sleeves and dig our way out of the talent problem. The road ahead will definitely be bumpy, but with a healthy dose of getting out of your own way and a sprinkle of humor, we can conquer it.

Working with Accountingfly

If you’re interested in a regular flow of pre-screened candidates with no hassle and no upfront cost, you can get more information and register for Always-On Recruiting on our website. 

We also offer dedicated searches and freelance/contractor placements and are generally a lot of fun to work with. Click here to schedule a call or get more information.

The post Why’s There a Talent Shortage and How Firms Can Do Their Part to Fix It appeared first on Going Concern.

The natives are restless pic.twitter.com/F21X8uzzI3

— Going Concern (@going_concern) June 12, 2024

Lifted from Reddit here.

This isn’t about one particular firm — though individual firms are doing a great job shattering trust among their own people in recent weeks (see: PwC, GT) — rather, it’s about how all of this looks to students, people in the first few years of their career, and the public. For a profession that’s supposedly super stable even in economic downturns, things sure aren’t looking very stable right now.

Something else of interest I saw on Twitter:

More thoughts on Private Equity (PE) and Public Accounting firms.

The Grant Thorton private equity (PE) deal closed on 5/31/2024. New Mountain Capital LLC is the PE firm.

As usual, the auditing practice was spun off.

Prior to purchase, Grant Thorton was the 7th largest…

— Mike Sylvester, CPA (@MikeSyl36625988) June 14, 2024

Why does it feel like something really bad is about to happen?

The post Weekend Discussion: Fear and Loathing in Public Accounting appeared first on Going Concern.

Seeing postings from other local CPA firms paying their employees $15-20 an hour for an accountant. Crazy.

— TailorCPA (@tailor_hartman) June 6, 2024

The tweeter, who is not the jackass, lives in Madison, WI (GO BADGERS!). Here is a handy living wage chart for that area.

You’d be better off pushing carts at Target.

The post Weekend Discussion: You, Sir or Ma’am, Are a Jackass appeared first on Going Concern.

The first day of Pride fell on a Saturday this year so naturally we assumed it would be someone’s job to quickly log in over the weekend and swap in the rainbow logo. Logos that already exist so it’s not like someone is having to build them from scratch after hours, we’re talking a five minute job. Still, it was worthy of a lol working on the weekend at Big 4 amirite joke.

Someone's gonna be working on Saturday switching in those rainbow profile pics pic.twitter.com/KCPawE2G5W

— Going Concern (@going_concern) May 30, 2024

Two or three years back, on a very slow day in June, I was going to put it to the audience to vote which Big 4 firm has the best rainbow-clad logo (personally I prefer KPMG’s rainbow vape thing, it feels the least hamfisted in there) but never published the article because halfway through I realized it was stupid (I have this realization far more often than you’d think). This image conveniently still exists due to that abandoned article. This is what their profile pictures should look like right about now:

And this is what they looked like on Monday:

OK so maybe three of the firms, in uncharacteristic consideration for the sanctity of their employees’ weekends, decided not to make the guardians of Twitter change the profile pics on Saturday. Or Sunday. Or Monday.

It’s now Thursday and everyone but PwC is still the same. Deloitte did change the @lifeatdeloitte one but the main accounts — @deloitte and @deloitteus — are the same.

It appears every Deloitte regional is unchanged except for those happy folks in Belgium:

KPMG:

KPMG India’s account along with KPMG UK and KPMG UK’s recruiting account all have rainbows. And of course KPMG Belgium because Belgium is apparently the proudest country as I’m learning from putting together this article.

EY:

A small handful of specialized EY accounts have rainbows, like @EYPrivateEquity and the ever-popular @EY_MiningMetals. The latter appears to be abandoned and the account it points to — @EY_Energy — is not Prideified.

Is…rainbow capitalism over?

Related:

Also related: The Accounting Profession is Scaring Away Gay People (and Lesbians, and Transgender People, and…)

Comments are open but please keep it light and on topic.

The post Yo, Where Are the Rainbows? appeared first on Going Concern.

While scrolling Twitter today as I do every day, I kept coming across articles about some AI expert claiming that there’s a 99.9% chance AI will make the human race extinct. Perhaps you’ve seen the same headlines in the past day or so and perhaps you got a little freaked out too. Note the expert was talking about a 100-year timeline, not next year. This podcast interview with Dr. Roman Yampolskiy (Wikipedia) is what the articles are referring to and you might want to listen to the whole thing to fully understand what was said.

Not going to lie, it gets pretty dark.

So this “there’s a 99.9% chance AI will kill off the human race” headline is floating around. At the same time, a group of both current and former OpenAI and Google DeepMind employees warned on June 4 that AI in its current, unregulated state grants far too much power to AI companies that are beholden only to themselves. Remember pre-Enron when audit firms mostly regulated themselves because people assumed these trusted servants of capital markets would willingly do the right thing? Yeah.

Full text of the letter posted to righttowarn.ai:

In alphabetical order, the employees who signed the letter are: Jacob Hilton (formerly OpenAI), Daniel Kokotajlo (formerly OpenAI), Ramana Kumar (formerly Google DeepMind), Neel Nanda (currently Google DeepMind, formerly Anthropic), William Saunders (formerly OpenAI), Carroll Wainwright (formerly OpenAI), and Daniel Ziegler (formerly OpenAI). Four current and two former OpenAI employees elected to be anonymous. Additionally, the letter is endorsed by OG computer scientists Yoshua Bengio (Wikipedia page), Geoffrey Hinton (Wikipedia), and Stuart Russell (Wikipedia).

And all their footnotes with quotes and everything:

1. OpenAI: “AGI would also come with serious risk of misuse, drastic accidents, and societal disruption … we are going to operate as if these risks are existential.”
2. Anthropic: “If we build an AI system that’s significantly more competent than human experts but it pursues goals that conflict with our best interests, the consequences could be dire … rapid AI progress would be very disruptive, changing employment, macroeconomics, and power structures … [we have already encountered] toxicity, bias, unreliability, dishonesty”
3. Google DeepMind: “it is plausible that future AI systems could conduct offensive cyber operations, deceive people through dialogue, manipulate people into carrying out harmful actions, develop weapons (e.g. biological, chemical), … due to failures of alignment, these AI models might take harmful actions even without anyone intending so.”
4. US government: “irresponsible use could exacerbate societal harms such as fraud, discrimination, bias, and disinformation; displace and disempower workers; stifle competition; and pose risks to national security.”
5. UK government: “[AI systems] could also further concentrate unaccountable power into the hands of a few, or be maliciously used to undermine societal trust, erode public safety, or threaten international security … [AI could be misused] to generate disinformation, conduct sophisticated cyberattacks or help develop chemical weapons.”
6. Bletchley Declaration (29 countries represented): “we are especially concerned by such risks in domains such as cybersecurity and biotechnology, … There is potential for serious, even catastrophic, harm”
7. Statement on AI Harms and Policy (FAccT) (over 250 signatories): “From the dangers of inaccurate or biased algorithms that deny life-saving healthcare to language models exacerbating manipulation and misinformation, …”
8. Encode Justice and the Future of Life Institute: “we find ourselves face-to-face with tangible, wide-reaching challenges from AI like algorithmic bias, disinformation, democratic erosion, and labor displacement. We simultaneously stand on the brink of even larger-scale risks from increasingly powerful systems”
9. Statement on AI Risk (CAIS) (over 1,000 signatories): “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”

On a more positive, or rather absurd, note there’s also this making the rounds:

You may have noticed AI “overviews” dominating any Google searches you’ve done in the past few weeks, summaries that are similar to the featured snippets we’re all used to but with pretty colors and an affinity for being batshit insane. I’d screenshot an example but I’m suddenly not seeing them in search…because they went so haywire Google decided to reduce their frequency by 70 percent. Luckily this recent article published by 404 Media has one.

From “Google Is Paying Reddit $60 Million for Fucksmith to Tell Its Users to Eat Glue“:

Screenshots of Google’s AI search going awry have gone repeatedly viral and highlight how hellbent the company is on giving its customers the most frustrating possible user experience while casually destroying the livelihoods of people who work for or make websites. They also highlight the fact that Google’s AI is not a magical fountain of new knowledge, it is reassembled content from things humans posted in the past indiscriminately scraped from the internet and (sometimes) remixed to look like something plausibly new and “intelligent.”

Seems the origin of the Google AI’s conclusion was an 11 year old Reddit post by the eminent scholar, fucksmith. https://t.co/fG8i5ZlWtl pic.twitter.com/0ijXRqA16y

— Kurt Opsahl @kurt@mstdn.social (@kurtopsahl) May 23, 2024

In a May 30 blog post titled “AI Overviews: About last week,” Head of Google Search Liz Reid was a little hand-wavy about just how bad AI Overviews were and why. TLDR: Fake news! Trolls!

Separately, there have been a large number of faked screenshots shared widely. Some of these faked results have been obvious and silly. Others have implied that we returned dangerous results for topics like leaving dogs in cars, smoking while pregnant, and depression. Those AI Overviews never appeared. So we’d encourage anyone encountering these screenshots to do a search themselves to check.

But some odd, inaccurate or unhelpful AI Overviews certainly did show up. And while these were generally for queries that people don’t commonly do, it highlighted some specific areas that we needed to improve.

…

In other examples, we saw AI Overviews that featured sarcastic or troll-y content from discussion forums. Forums are often a great source of authentic, first-hand information, but in some cases can lead to less-than-helpful advice, like using glue to get cheese to stick to pizza.

In a small number of cases, we have seen AI Overviews misinterpret language on webpages and present inaccurate information. We worked quickly to address these issues, either through improvements to our algorithms or through established processes to remove responses that don’t comply with our policies.

I could speak at length to how Google is destroying the internet but I’ll spare you for today. Let’s just say if the AI is blindly accepting random Reddit comments as authoritative fact, the truth is in trouble. Whatever happened to “don’t believe everything you read on the Internet”?

The post The Internet Is Rife with AI Buffoonery This Week appeared first on Going Concern.

Totally 100% coincidentally and definitely not at all related to his planned departure, it was announced the day after his big announcement that the AICPA was softening its opposition to making changes to the 150 hour rule in light of the worsening CPA shortage. Now, that article did get a lot of views. The lesson here is that people care much, much more about 150 than they do about a man who has been stubbornly hanging onto it.

So we should just move on and focus on the next chapter. Who will be next CEO? My vote, and this depends on A) if she’s available and B) if she even wants it which honestly that’s asking a lot of anyone right now, is Kimberly Ellison-Taylor. She’d bring a ton of charisma to the role which is exactly what the profession needs right now after 30 years of…you know what, never mind.

At the moment, the AICPA has a trust problem. Over the past several years, I’ve spoken to countless CPAs who express a loss of faith in their representation and that’s not even getting into the brutal social media comments splattered everywhere that everyone sees. But not all is lost. The right leader and the right messaging — REAL messaging, not this self-serving bullshit they’ve been shoveling lately — could go a long way toward righting the ship and heading into the next decade stronger than ever. Damn me and my irrepressible optimism.

Anyway. Sound off in the comments or, if you prefer, let me know your thoughts by email. I’ll say this, I haven’t been this excited about the prospect for real change in…ever?

The post Weekend Discussion: So What’s Next For the AICPA? appeared first on Going Concern.

Stories about the AICPA are like buses, you don’t see one for an hour weeks and then three show up at once. Today I come bearing a gift from this Journal of Accountancy article about new AICPA Chair Carla McCall, CPA, CGMA.

Let’s see what “New AICPA chair: ‘We need to promote the cool work we do’” has to offer us. Gotta be something cool and exciting, right?

Emphasize the future of the profession

Attracting the next generation of accountants starts with a paradigm shift within the profession, McCall said. “We need to promote the cool work we do. We need to stop talking about hours, stop using the term ‘busy season,’ and stop talking about how stressed we are.”

Instead, accountants should point to positive examples, such as guiding clients through complex financial transactions like IPOs and mergers and providing essential support during crises like the COVID-19 pandemic, to emphasize the dynamic and varied nature of the profession, she said.

Oh. I posted a screenshot to Twitter earlier and let’s just say it’s not being received very well. Can’t imagine why.

The post Profession Leader Humbly Requests You STFU About Long Hours, Busy Season, and Stress appeared first on Going Concern.

Sad prediction:

AI and offshoring are going to wreck the accounting profession in the next decade.

Combine that with the pain every company has with this function and it’s a recipe for economic disaster.

— Michael Girdley (@girdley) May 14, 2024

There are two types of people: those who don’t find this sad (only accountants fall into this category) and those outside of the profession who think bookkeepers and payroll clerks (RIP) are what make up “the accounting profession.” The latter are definitely on the endangered species list.

We can tell which category this guy is in without even checking his username.

Y’all keep promising this, and we keep begging y’all to make it come true…

— Jeremy Wells (@JWellsTax) May 14, 2024

Of all the responses (“It can’t come soon enough” was my favorite), it’s this one I want to flag.

The desire to enter the profession in the first place is on the decline as well.

There is still a need (likely always will be) for the expertise at the top end of the profession.

But how do you get people through the pipeline to the top end?

For a profession that instills…

— Jason Turnwald, CPA (@JasonTurnwald) May 14, 2024

Text:

The desire to enter the profession in the first place is on the decline as well.

There is still a need (likely always will be) for the expertise at the top end of the profession.

But how do you get people through the pipeline to the top end?

For a profession that instills trust & confidence in the market…your concern is extremely valid.

In all the talk about AI and offshoring eliminating accounting as we know it, one aspect not talked about enough is the first 1/4th of the pipeline. We’re so worried about getting enough fresh meat into it and not thinking about the people who’ve recently entered it.

AI and tremendous amounts of offshoring appeared seemingly overnight — we went from about one-to-two percent offshoring in 2010 to as much as 60 percent or more now — and as such, little thought was given to what happens to the onshore young people coming up through the pyramid structure. A fresh-faced batch of youngsters come in every spring and winter, learn the ropes, and those who stick around pay it forward to another batch of not-yet-bitter youth. On and on, year after year, so goes the machine. Now the tasks they used to cut their teeth on are being sent overseas to underpaid associates or given to algorithmic models that never bitch about busy season or leave in the middle of it. Meanwhile, India has been not-quietly gathering up all that knowledge. See: India’s answer to Big Four firms could be in the works: Here are the details in Business Today.

Can India have a home-grown mega sized CA firm that can go global and compete with the Big Four firms? It may be in the works. The Institute of Chartered Accountants of India (ICAI) and the Ministry of Corporate Affairs are laying down the ground work for this.

“We have made a Committee for Aggregation of CA firms. It is working very effectively on how to frame guidelines for networking, multidisciplinary partnership, international networking, merger and demerger and advertisement. We are working on these five fronts so as to empower Indian firms to become global,” said ICAI President Ranjeet Kumar Agarwal.

In an interaction with BT, Agarwal said ICAI is working on these five fronts to empower Indian CA firms to become global. It is also going to make a presentation before the ministry of corporate affairs on this. “The ministry is also very keen on how Indian CA firms can grow big,” he said.

Did we really think they would be content to do our bitch work for 1/5th of the price forever?

“We want to leverage and we want to allow them to merge so that they can become bigger. For merger, they need some incentives, policies and tools on which we are working,” said Agarwal, underlining that Indian firms have the capacity to grow big and become global but they need some handholding.

“India has no dearth of talent. A large number of Indian CAs are also working abroad,” he highlighted. Out of a total of 400,000 CAs in the country, about 160,000 are practicing professionals.

At least a few people are talking about this future problem of onshore associates missing out on solid foundations. See this year-old thread: AI won’t take our jobs, but Outsource will

Comment
byu/heyhaythrowaway123 from discussion
inAccounting

Comment
byu/heyhaythrowaway123 from discussion
inAccounting

See also: I didn’t beleive [sic] it! Big 4’s ultimate goal is indeed to offshore!

I remember a time many years ago when we were asking what if 20 percent of audit work is performed offshore as if this were a ridiculous scenario that could only be dreamed up on the fifth day of Burning Man (i.e. you’d have to be high as balls to think it could ever happen).

A 1997 paper entitled Challenges confronting accountancy in the 21st century by Carolina Koornhof [PDF] basically predicted the future we live in now.

There’s little to be done about it now other than the same reactionary freakouts the profession has engaged in for as long as I can remember. Just like the talent shortage thing that was building up for a DECADE before people really started freaking out. I mean, we were freaking out but that’s only because we’re overly negative and enjoy pointing out potential disasters on the horizon as well as current ones.

Guess we should be extra nice to the Indians, we might be working for them in the not-so-distant future.

Related:

The post Accountants Will Go Extinct in the Next Decade, Says Guy appeared first on Going Concern.

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

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

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

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

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

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

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

Yeah, we’re gonna have to Google that.

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

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

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

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

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

In it, Mainebiz speaks to Tabitha Swanson, founder of the 33-person firm Swanson Group LLC based in Westbrook, Maine.

When asked what’s her biggest challenge, she says “juggling the pricing increases with the costs, some increasing unexpectedly without much notice while we only increase our rates annually and the bulk of our business flows in over a few months’ period.” Like one of her software products — which she doesn’t name — that “more than doubled” its pricing with a month’s notice.

But here’s the bit I wanted to call attention to:

We increased our [fixed and hourly] rates by 20% to 25% in 2024, and I suspect we will need to have a similar increase for 2025. We have continued to see pricing increases on products/services we utilize this year, and our pay for all staff needs to continue to increase in order to maintain a qualified staff to service our clients properly.

Here’s one reaction to that:

I’m sorry but back to back 20% increases is absurd even in this environment. Full stop

— Neymar Level Effort (@tankadelphia) May 10, 2024

This prompted me to wonder, in the context of rising costs on literally everything and many accounting firms undervaluing the work they do, is there a such thing as overdoing it on fee increases? A hobby economist such as myself might suggest if clients are willing to pay it then you’ve properly aligned your services with their value in the market. Others might say this lady is insane and, like this person, see an opportunity to poach some disgruntled clients (as if anyone desperately needs more work).

A 2022 article in the same publication says Swanson Group is “the largest 100% female-owned accounting firm in Maine” and 2023 revenue was projected to be more than $4.35 million.

The post Weekend Discussion: How Much Is Too Much When Raising Fees? appeared first on Going Concern.

Let’s talk about cover letters. I’ve always been a fan but that’s because I write for a living so pounding out 400 fluffed-up words is nothing to me. For the non-linguists out there, it’s in competition with the 90-minute assessment test for the worst part of the job hunt.

Enter ChatGPT. Finally, humanity’s cover letter problems are solved. Or are they?

CNBC’s Make It published a little something on Monday that says the younguns are getting busted using AI because all the cover letters are the same:

Shoshana Davis, a Gen Z career expert and founder of the career consultancy Fairy Job Mother, told CNBC Make It in an interview that the generation (generally defined as those born between 1996 and 2012) have become too reliant on AI tools like ChatGPT to generate cover letters and job application answers.

“So I speak to businesses and employers who hire anything from like 10 to 1000s of Gen Z every year,” Davis said. “And one of the main challenges that I’m seeing at the moment is the use of AI, specifically ChatGPT, and it’s not being used in the right way, and it’s not being used effectively.”

Davis explained that “employers are getting hundreds of the exact same cover letters word for word,” or answers to job application questions that are the same, and suspect that ChatGPT use is in play.

Although we haven’t heard of a similar official stance on our side of the Atlantic, The Telegraph reported just last month that Big 4 firms have “banned” the use of AI in the job application process.

Big Four accountants have warned applicants not to use AI to complete applications or online assessments during the hiring process.

Job hunters applying to KPMG and Deloitte must now confirm they have finished online tests without external tools such as AI.

PwC said it is reviewing applications to check for activity, which “undermines the integrity” of its recruitment operation and will take action against rule breakers.

BDO took it a step further and is using “plagiarism checkers” to sniff out AI responses.

For now, there’s no fool-proof AI detector and even OpenAI says in an educator FAQ that asking ChatGPT if it wrote something will get you whatever answer it feels like giving you with “no basis in fact”:

ChatGPT has no “knowledge” of what content could be AI-generated or what it generated. It will sometimes make up responses to questions like “did you write this [essay]?” or “could this have been written by AI?” These responses are random and have no basis in fact.

With that said, ChatGPT does tend to have a linguistic watermark. I asked it for a list of its most-used words and, after it initially spit out a joke list with words like the, a, an, and, or, and of like a real asshole, it gave me a real list when prompted correctly.

• Tapestry
• Delve
• Intriguing
• Insight
• Paradigm
• Spectrum
• Nuance
• Profound
• Venture
• Dimension
• Noteworthy
• Plausible
• Expound
• Eloquent
• Ambiguous
• Conundrum
• Enigmatic
• Illustrative
• Ubiquitous
• Ponder
• Allude
• Albeit
• Juxtaposition
• Amidst
• Embark

These are just 25 examples of words ChatGPT likes to use and for all we know it made that list up too. It really does love the word delve though.

Are medical studies being written with ChatGPT?

Well, we all know ChatGPT overuses the word "delve".

Look below at how often the word 'delve' is used in papers on PubMed (2023 was the first full year of ChatGPT). pic.twitter.com/iNxZfFLkxL

— Jeremy Nguyen (@JeremyNguyenPhD) March 30, 2024

When it comes to cover letters, no one is expecting you to throw heaps of complicated words around like James Joyce, you don’t need ChatGPT to insert unnecessary juxtapositions and paradigms. Be more like Hemingway and you’ll be fine.

Or say fuck it and use ChatGPT anyway. What are they going to do, not hire everyone?

The post We Delve Into the Vibrant Landscape of Gen Z Overusing ChatGPT in Cover Letters appeared first on Going Concern.

May is Mental Health Awareness month—a time to focus on deepening our understanding about the full spectrum of psychological experiences for ourselves and those we care about. Significant strides have been made to emphasize and prioritize psychological health in the workplace, communicate openly about it, and improve the pathways that support our dynamic psychological selves. At Deloitte, we believe a psychologically-informed culture can impact how our people show up in the world—both personally and professionally. In my own experience, showing authentic leadership and cultivating a sense of purpose are two ways to demonstrate our commitment to support mental health in the workplace.

Four years ago Journal of Accountancy put depression front and center on its cover, quite a revolutionary choice for a profession known for sucking it up and suffering in silence.

You can read Mark J. Cowan, CPA, J.D.’s story here. He lives with something called persistent depressive disorder, also known as dysthymia. It’s described as a milder, but long-lasting form of depression characterized by losing interest in normal activities, hopelessness, low self-esteem, low appetite, low energy, sleep changes, and poor concentration.

A 2023 report based on an international survey of thousands of professionals by the Association of Chartered Certified Accountants found 71 percent of accountants want more help from their employers to manage their mental health and, directly related to that, 88 percent want a better work-life balance. Is it any wonder people are fleeing the profession in droves?

Unfortunately leaving isn’t always a fix:

The causes of anxiety and depression can vary and, without professional help, be misconstrued. Someone may be predisposed to anxiety or depression because of a complex mix of heredity, brain chemistry, childhood experiences, past trauma, or other factors. But symptoms may not manifest unless triggered by stimuli — like personal losses or stressful work situations. Because the existence or sources of the predisposition are often unknown and the stimuli are usually apparent, many conclude the stimuli alone are to blame for the anxiety or depression. Those who try to cure themselves without professional help may erroneously think the solution is to remove the stimuli. A CPA with anxiety, for example, might attribute the problem to stressful work projects (the stimuli) and leave the profession. If the CPA fails to seek professional help in addressing the underlying causes (the predisposition), however, the anxiety may return as soon as a new stimulus arrives. The CPA may have been better served keeping the job and going through therapy to address the underlying condition — better positioning the CPA to manage any future stimuli.

“How CPAs and employers can support mental health,” Journal of Accountancy November 2021

Here’s another survey that shows why employer help lines offered by accounting firms tend to go unused:

Accountants are significantly more stressed than employees across other sectors, with workload, long hours and the lack of margin for error in the job tipping many over the edge, new research has found.

Almost half of accountants (48%) were worried about being treated differently (compared with 33% of employees), while 42% feared an impact on their career progression (up from 27% of employees). Alarmingly, almost a third of accountants said they would be concerned about their manager or HR department believing them to be unreliable if they sought help for their mental health.

While symptoms vary depending on the condition, some signs that signal a possible mental health condition are:

• Feeling sad or down
• Confused thinking or reduced ability to concentrate
• Excessive fears or worries, or extreme feelings of guilt
• Extreme mood changes of highs and lows
• Withdrawal from friends and activities
• Significant tiredness, low energy or problems sleeping
• Detachment from reality (delusions), paranoia or hallucinations
• Inability to cope with daily problems or stress
• Trouble understanding and relating to situations and to people
• Problems with alcohol or drug use
• Major changes in eating habits
• Sex drive changes
• Excessive anger, hostility or violence
• Suicidal thinking

One thing a therapist told me many years ago that’s been helpful is to consider your baseline. If you’re generally a low energy person then being low energy may not necessarily signal depression. But if you’re an upbeat person who suddenly feels low energy and can’t escape from it no matter how much you sleep or rest, maybe it’s worth speaking to someone. Understanding your baseline can help you recognize unusual patterns in your mood, it’s those anomalies to be aware of.

If you need them, here are some resources from the National Institute of Mental Health to get you started. You can also check in with your primary care provider if you have one, or browse Psychology Today to find a therapist near you.

Do something nice for yourself today, OK?

The post Weekend Discussion: It’s Mental Health Awareness Month appeared first on Going Concern.

Their research polled two distinct groups of professionals — entry- and mid-level CPAs nationwide who have left their firm or the profession within the last five years (“Career Changers”) and Pennsylvania CPAs with 3-10 years of experience who are still on the grind (“Current Talent”). The goal? To find out what made the first group dip out and what keeps the second group not only at their current firm but in the wider profession.

“The findings from our latest report emphasize the complexity of talent retention and the necessity for firms to adopt innovative strategies that address both individual and organizational needs,” says Jennifer Cryder, CPA, MBA, CEO of PICPA. “We want to make sure that the ‘Current Talent’ group does not become ‘Career Changers’. This report aims to guide accounting firm leaders towards effective strategies that we believe, when properly implemented, will enhance both retention and firm performance.”

You’ll recall it isn’t only the scary “75% of current CPAs will retire by 2035” AICPA figure nor plummeting accounting enrollments and low CPA exam numbers that the profession is worried about but also a significant number of experienced professionals leaving accounting completely. See: Job Security Isn’t Enough to Keep Many Accountants From Quitting from Wall Street Journal (published Sept. 22, 2023). So making current professionals “stickier” should be as high a priority as recruiting young people into the profession at the high school and college level. So far it’s the pipeline that’s getting most of the attention.

Notable findings from the 323 professionals in the Career Changers group who have 0-15 years of public accounting experience and have left their firm or profession within the past five years:

• When asked to complete this statement “My desire to stay at my previous firm or in the accounting field would have increased if…” the leading response was higher salaries (39.7%).
• Other top responses were: “there were more flexible work options” (35.6%), “entry- and mid-level employees were more valued” (33.5%) and “there were better benefits offered” (30.4%).
• When provided the same statement but specific to work-life balance, the leading response was: “there were more flexible work options around hours and location” (35.6%).

We’re giggling at the inclusion of people with 0 years of experience. Washouts!

And key findings from the 449 Pennsylvania CPAs with 3-10 years of experience in the Current Talent group:

• The majority of respondents (56.7%) stated they have a higher desire to stay in public accounting, with 73% stating they would like to stay with their current firm.
• Career development is a critical factor for retention with 85% of respondents saying their firm actively supports their career development, and 78% saying their firm offers interesting career opportunities.
• Still, the number one response to the question “What would increase your desire to stay at your firm in the accounting field?” was “there were higher salaries” (46.9%), followed by “my working hours were capped” (42.3%) and “there were better benefits offered” (37.4%).

PIPCA’s suggestion is not to pay everyone more. Rather:

With over 70% of CPAs nearing retirement and a notable decrease in accounting graduates and CPA exam takers, the need for firms to fundamentally move away from the traditional “pyramid” model to a more robust “pentagon” model, better leveraging automation, AI, and outsourcing is critical to long-term success. [emphasis ours] This shift reduces reliance on a broad base of entry-level talent, allowing firms to focus on hiring fewer, but better retained staff while fortifying the middle managers with higher compensation and more diverse career opportunities. The PICPA believes this approach not only can help meet client needs effectively but also aligns with salary expectations and improves work-life balance, ensuring high-quality work without compromise.

Petition to use a five-pointed star model instead of a pentagon.

Reading between the lines, or rather the words in the above paragraph as it’s all plainly laid out, they’re suggesting firms move away from the cattle calls of young, disloyal talent that will leave within two years and pivot instead to automation, technology, and compartmentalized outsourced talent to replace them along with “fortifying the middle managers” who’ve been loyal thus far with better pay and career opportunities.

Are we finally living in the disruptive future we were promised?

The post CPAs Would Probably Stick Around If Firms Paid Them More, Let’s Just Outsource Instead appeared first on Going Concern.

So some guy tweeted the following on April 23:

Me: really enjoyed the call. Please see attached financial modeling test

Gen Z applicant: this looks like a lot of work. Without knowing where I stand in the process, I’m not comfortable spending 90 minutes in Excel

Me:…well…I can tell you where you stand now

— m. stanfield (@mu2myoc) April 23, 2024

As of today, it stands at 7.9 million views, nearly 12k likes, 1.6k replies, and 1.2k quotes. This is the top response:

Finally, a hero who will stand for the downwardly-mobile

— m. stanfield (@mu2myoc) April 23, 2024

Funny.

If you expected this guy to get ratioed hard, I’ll remind you this is Twitter not r/antiwork. Actually, I bet he’s been posted there already. Yep.

In one reply, the guy says the candidate knew there would be an assessment:

Absolutely. One of the first things discussed in the interview is the steps in the process.

I'm hiring an investment analyst. Underwriting potential real estate investments is the bulk of the job. No one was surprised when I sent the test.

— m. stanfield (@mu2myoc) April 24, 2024

And added this:

A response I would have actually enjoyed would have been. “I’m good at this and do t work for free. Give me $1,000 and I’ll break this deal down in amazing detail”

Would have gladly paid and probably hired

— m. stanfield (@mu2myoc) April 23, 2024

Easy for him to say after the fact when he’s getting pounded in the quote tweets. But good to note for anyone who’s been tempted to draw up an invoice for a potential employer requesting hours-long assessments.

To get the opinion of a recruiter in the accounting space we tracked one down to ask. “Some employers have abused the privilege of assessments, using hours and hours of someone’s time. In some cases (creative fields or marketing, for example), the candidate was not hired but their ideas were used by the hiring employer. Not cool,” she said. “In accounting or analytical positions, I don’t think it’s bad to ask someone to complete an assessment within reason. An assessment shouldn’t take longer than 15 or 20 minutes. Between that and good interviewing techniques, an employer should be able to get an understanding of a candidate’s technical skills. If a candidate is qualified then a quick assessment shouldn’t be a problem for them.”

Before you’re allowed to comment on this post with your own opinion, we’re going to need you to first complete the 16Personalities MBTI assessment, the HEXACO Personality Inventory, and the Official Hogwarts House Sorting Quiz. When you’ve finished with that, please submit a Google Doc of five sample comments with a short PPT explaining how you arrived at those comments. Thanks and maybe we’ll call you.

The post The Most Divisive Topic on the Internet This Week Is a Pre-Employment Excel Assessment appeared first on Going Concern.

I came across this CNBC Make It article the other day about LinkedIn’s ‘open to work’ banner and apparently using this is a red flag to know-it-all recruiters.

When you’re looking for a new job, it may seem like a no-brainer to let as many people as possible know. But career experts differ on their opinions about LinkedIn’s “open to work” banner, the green sign that shows up just under your photo if you choose to activate it.

“It is the biggest red flag” in a job candidate, says Nolan Church, former Google recruiter and current CEO of salary data company FairComp.

“There is a truism in recruiting that the best people are not looking for jobs,” he says, and therefore those people would not be advertising that they’re looking for work either. Former Amazon recruiter and current career coach Lindsay Mustain agrees.

They included some facts, too: 33 million LinkedIn users are currently using the feature that was introduced in the early days of COVID-19 when people lost their jobs en masse and people who have it on are twice as likely to be contacted by recruiters, per LinkedIn data.

Nolan was quoted in a different CNBC article a few months ago saying it makes you look desperate:

When it comes to job interviews, you want to give the company you’re interviewing with the sense that you have other options and that they have to fight for you. “Recruiting is like dating,” says Church. “You have to make the other side feel like you’re exclusive.”

What you’re signaling to hiring managers with the “open to work” sign on LinkedIn is that you’ll take any job, says Church, from whoever reaches out to you, because maybe nobody is. “It actually feels to a hiring manager like desperation,” he says.

As a recruiter, “you want to feel like that person really wants to work at your company versus any company,” says Church. And that sign makes it look like the opposite.

But he also says “the best people are not looking for jobs” and that “you have to go and pull them out.”

This is also him:

To quote LinkedIn “influencers”…Thoughts? Agree?

The post Weekend Discussion: ‘Open to Work’ on LinkedIn, Yay or Nay? appeared first on Going Concern.

No longer!

“Phygital” sounds like something my cat does on the carpet involving slimy logs of fur.

The word isn’t new and clearly wasn’t coined by EY (I don’t need to dive deep into Google to determine that) but this is the first I’m seeing it. Maybe I’m behind on my buzzwords. According to Google Trends, the word started floating around in earnest around 2019. That was only a year or two ago right?

According to this, the word was birthed way back in 2007 by Momentum Worldwide CEO Chris Weil to describe the integration a of physical and digital experiences “from a holistic point of view.” Really what it means is we’re all online now and they need to find ways to get us to buy stuff IRL.

Another source, American Business School Paris, says phygital came about in 2013:

The term phygital comes from the combination of the words “physical” and “digital”. This neologism was coined by the Australian agency “Momentum” in 2013 and is now commonly used to describe the breakthrough of the omnichannel approach. It also reflects the convergence of two completely different spheres that seem to have nothing in common: the online and the bricks and mortar experiences.

A phygital marketing strategy thus consists in integrating digital data and practices within a bricks and mortar store to boost its sales performance. Companies can rely on the ubiquity of smartphones to implement this winning strategy that aims to improve customer experience both online and offline.

Consumers are continuously connected today. This is a huge opportunity for brands to not only communicate with their clients and prospects but also to use data to better understand their behavior and expectations.

So this basically.

@heckinsick

Walgreens replaced their fridge doors with TVs

♬ original sound – Logan Ivey

Awesome.

And this:

I hate it here.

Digging deeper (damnit, I said I wasn’t going to do that), here’s an excerpt from Chris’s profile on AdForum to find out what would motivate someone to create such an obnoxious word:

Chris Weil believes that experience creates the connections that lead to loyalty, advocacy and sales. He leads Momentum in imagining and creating those memorable moments for brands, as the Total Brand Experience. Weil believes that what a brand does is more important than what it says and that these days people demand more from brands than just products or service — people need these relationships to have meaning.

In 2007, Chris introduced the concept of “Phygital” — a word describing the inseparable experiences between the physical and the digital world. Newly inspired by the modern consumer as “connected protagonist” – desiring currency to fulfill needs for entertainment, information, connection and experience in this Phygital world – Chris has shaped his global network into a company that can create anything and partner with consumers to inspire, activate and personalize what experience is created.

Take me back to 1995, please.

The post EY Introduces Us to the Worst Buzzword Yet appeared first on Going Concern.

Industry OG and commentator Gene Marks has written an opinion piece for The Hill about what audits actually are that is less opinion and more brutal fact: Why you should be very skeptical of that auditor’s report. Those of us who’ve worked or even simply seen behind the curtain of audit know the things he points out to be true — assurance is reasonable not absolute, financial statements are the responsibility of management not auditors, “finding fraud” is not the ultimate goal of audits — but do investors? Probably not, that’s why they’re always suing audit firms when companies go bust with millions of dollars of fraud hidden in plain sight on their balance sheets. Most of the time, auditors can confidently (and legally) shrug their shoulders and say “not my job.”

He writes:

Basically, the accountant is saying to the world that all the information in the financial statements comes from management and that they’ve made efforts to verify that the financial statements are mostly right. But if the you-know-what hits the fan, their attorneys have plenty of cover (and insurance) for when the litigation starts.

So they might catch a fine from the audit regulators. What’s a few hundred thousand or even million dollars to a firm bringing in tens of billions a year? The PCAOB is busy going after firms for sharing answers on internal training exams anyway, who has time to figure out ways to fine audit firms for doing the minimum audit work required by existing standards.

The entirety of his article is worth a read and should be passed along to any naive investors in your life. I wanted to call attention to this bit though:

During an audit, the lion’s share of critical work on the ground (inventory observations, cut-off testing, analytical reviews, receivables confirmation) is being done by children — yes, children — who are still hung over from their college graduations. I was once that person, and looking back, I am shocked by the responsibility I had, given my lack of experience at the time. The accounting profession’s desperation to find recruits has not only lowered the competence bar but also added more tasks on the shoulders of an already exhausted staff, to the point where reports are being delayed.

To address this particular issue, he has a crazy idea:

And on the topic of partners, they and their managers need to cut down on the client lunches and instead get in the trenches. Like our annual continuing professional education requirements, the leaders of accounting firms should be professionally required to do a portion of staff work, like observing inventories, grilling the accounting managers on expenses or even checking bank reconciliations. Why? Because someone my age not only has more experience, they have a much different perspective on these things than a green 22-year-old. The devil’s in the details, people.

I dunno, you guys. I feel like partners would rather eat the million dollar fines.

The post Audits Are a Joke and Here’s Why According to a Salty Old Industry Veteran appeared first on Going Concern.

Some time last year I noticed more and more practitioners and firm owners on #TaxTwitter expressing a desire to take a step back and sort out the problem clients before filing season hits. We observed many of them raising prices, implementing thorough onboarding procedures that would immediately eliminate the pain in the ass clients who can’t fill out basic paperwork in a timely manner, and best of all (for them, not the clients), tax preparers across the board were turning away clients left and right. How do we know? Because mainstream media was talking about how it might be hard to find a tax preparer this year. As we all know, they normally ignore this entire sector and pretend the science of accounting doesn’t exist if they can help it.

Filing Season 2024 definitely sucked for many clients.

So how’d it go? How are you now? What are you doing to decompress and rejoin the land of the living? Drop a comment or, if you prefer, shoot me an email.

And should any clients come across this, please remember:

If your tax person isn't answering your calls and emails today, you don't have to worry. We're okay. We just need a few days to recover. #TaxTwitter pic.twitter.com/R2f7G1qvgc

— Jan Roberg (@RobergTax) April 18, 2024

p.s. if you need it, check out this quick article on caring for your mental health from NIMH.

The post Weekend Discussion: So How Was Tax Season? appeared first on Going Concern.

ChatGPT TLDR summary: The Supreme Court is debating whether Capitol rioters can be charged with Sarbanes-Oxley violations for obstructing Congress during the January 6 riot. The debate centers on whether the law applies to rioters and the meaning of “corruptly.” Some argue it’s selective prosecution, while others see it as fitting within the law’s catchall language. There’s criticism that prosecutors are misusing Sarbanes-Oxley, which was initially aimed at corporate fraud, leading to concerns about expansive interpretations and unintended consequences.

Wanting nothing more than to never read political news in my life, I’ve been out of the loop on the post-storming of the Capitol aftermath. It has apparently made its way to the Supreme Court and ridiculously enough, justices are now debating whether or not January 6 participants can be charged with Sarbanes-Oxley violations.

Were some people secretly shredding government documents while the rest of the party was breaching barricades and causing mayhem? No. Not to our knowledge anyway. The government’s position is that January 6 rioters disrupted Congress affirming presidential election results, that this process of affirmation falls under “an official proceeding,” and thus January 6 rioters obstructed or impeded said official proceeding under 18 U.S.C. § 1512. The section of Sarbanes-Oxley at issue reads:

TITLE XI—CORPORATE FRAUD ACCOUNTABILITY

SEC. 1101. SHORT TITLE.
This title may be cited as the ‘‘Corporate Fraud Accountability Act of 2002’’.
SEC. 1102. TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN OFFICIAL PROCEEDING.
Section 1512 of title 18, United States Code, is amended—
(1) by redesignating subsections (c) through (i) as subsections (d) through (j), respectively; and
(2) by inserting after subsection (b) the following new subsection:
‘‘(c) Whoever corruptly—
‘‘(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or
‘‘(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.’’

Defendant Joseph W. Fischer, a former police officer, wants the obstruction charge thrown out and so the highest court of the United States debated today if the Sarbox “obstruction” clause applies in Fischer v. United States.

Justice Thomas wasn’t having it.

NYT writes:

Justice Clarence Thomas, who returned to the bench after an unexplained absence on Monday, asked whether the government was engaging in a kind of selective prosecution. “There have been many violent protests that have interfered with proceedings,” he said. “Has the government applied this provision to other protests?”

Justices Samuel A. Alito Jr. and Neil M. Gorsuch asked questions along similar lines.

But the justices mostly considered whether a provision of the Sarbanes-Oxley Act, enacted in the wake of the collapse of the energy giant Enron, covers the conduct of a former police officer, Joseph W. Fischer, who participated in the Capitol assault, on Jan. 6, 2021.

And a WSJ opinion piece credited to the Editorial Board published yesterday says:

Sarbanes-Oxley, though? Congress enacted Sarbox, as it’s often called, in the wake of Enron and other corporate scandals. One section makes it a crime to shred or hide documents “corruptly” with an intent to impair their use in a federal court case or a Congressional investigation. That provision is followed by catchall language punishing anybody who “otherwise obstructs, influences, or impedes” such a proceeding. Now watch, as jurists with Ivy degrees argue about the meaning of the word “otherwise.”

Here we go again.

In Mr. Fischer’s view, the point of this law is to prohibit “evidence spoliation,” so the “otherwise” prong merely covers unmentioned examples. The government’s position is that the catchall can catch almost anything, “to ensure complete coverage of all forms of corrupt obstruction.” The feds won 2-1 at the D.C. Circuit Court of Appeals.

Judge Gregory Katsas filed the vigorous dissent. The government “dubiously reads otherwise to mean ‘in a manner different from,’ rather than ‘in a manner similar to,’” he argued. The obstruction statute “has been on the books for two decades and charged in thousands of cases—yet until the prosecutions arising from the January 6 riot, it was uniformly treated as an evidence-impairment crime.”

Did the government not learn its lesson when it tried to charge the KPMG/PCOAB cheaters with wire fraud? The KPMG 5 case that got bazillions of headlines a couple years ago hinged on the determination that the confidential PCAOB audit inspection list was “intangible property” therefore the people at KPMG and formerly of the PCAOB deserved wire fraud charges for stealing and sharing it. Try again. The convictions of Cynthia Holder, Jeffrey Wada, David Middendorf, Thomas Whittle, and David Britt have all been thrown out.

Law Firm Zuckerman Spaeder has a compelling (and long) article about applying 18 U.S.C. § 1512 to the January 6 cases. I’m putting this at the end of the article so you guys are less likely to complain about having to scroll past it.

As discussed below, January 6 cases have exposed a significant lack of clarity around the meaning of “corruptly.” Why should white collar defense lawyers care? For one thing, they might find themselves in the position of representing a defendant charged with acting “corruptly” under § 1512(c)(2). Before its time in the spotlight for its use in January 6 cases (including Mr. Trump’s), § 1512(c)(2) figured prominently in white collar cases, such as the prosecution of a lobbyist involved in the Jack Abramoff scandal for allegedly causing the submission of misleading information to a Senate committee and a grand jury. United States v. Ring, 628 F. Supp. 2d 195, 204 (D.D.C. 2009). For another, the statutory language of a “corrupt[]” mens rea is not limited to § 1512(c)(2). Far from it: “there are around 50 other references to ‘corruptly’ in Title 18 of the U.S. Code.” United States v. Fischer, 64 F.4th 329, 341 (D.C. Cir. 2023) (opinion of Pan, J.). Many of these “corruptly” statutes might well ground the sorts of charges even more likely to cause a client to turn to a white collar attorney. These include corruptly obstructing a regulatory examination of a financial institution, 18 U.S.C. § 1517; bribery involving public officials, 18 U.S.C. § 201(b); offering gifts in connection with procuring loans or influencing other business of financial institutions, 18 U.S.C. § 215(a); and impeding the FDIC when acting as conservator/receiver, 18 U.S.C. § 1032(2), (3).

Courts analyzing the meaning of “corruptly” as used in January 6 cases have settled upon three possible definitions. As Judge Pan summarized in Fischer, past decisions have suggested that “corruptly” might mean: 

• “[W]rongful, immoral, depraved, or evil.” See 64 F.4th at 340 (opinion of Pan, J.) (quoting Arthur Andersen LLP v. United States, 544 U.S. 696, 705 (2005). 
• Acting “with a corrupt purpose, through independently corrupt means, or both.” Id. (internal quotation marks and citation omitted). This is the interpretation the government urged in Fischer.¹  
• Acting “voluntarily and intentionally to bring about either an unlawful result or a lawful result by some unlawful method, with a hope or expectation of either financial gain or other benefit to oneself or a benefit of another person.” Id. (quoting United States v. Aguilar, 515 U.S. 593, 600 (1995) (Scalia, J., concurring and dissenting in part)).   

To Judge Pan’s list, we might add a fourth potential definition, which at least in the past has been the position of the United States Department of Justice: “The word corruptly simply means with a bad or evil purpose. It is also frequently defined to mean the same thing as willfully, and thus to connote specific intent.”

And here’s a paper from Northwestern’s School of Law’s Journal of Criminal Law & Criminology that suggests prosecutors are misusing and courts misinterpreting the Sarbanes–Oxley obstruction of justice statute, 18 U.S.C. § 1512(c)(1). This thing is 12 years old.

A proper statutory construction that explores the statute itself, related provisions, canons of construction, the legislative history, and the investigatory process at the Securities and Exchange Commission shows that Congress could not have intended the limitless sweep of the statute that some courts and prosecutors have fashioned. In fact, an expansive definition of the terms within § 1512(c)(1) carries with it a host of unintended and unwanted results. Specifically, such an interpretation is at odds with congressional intent, creates absurdities and unfair sentencing disparities, renders the statute void for vagueness, and encourages judicial and executive legislating. Courts should recognize and limit efforts to expand § 1512(c)(1)’s reach.

Congress could not have been clearer about the behavior it intended to capture under the Sarbanes–Oxley criminal provisions. The Act’s preamble explicitly states that the bill was designed to “protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws.” Although some courts may give short shrift to an Act’s preamble, it nonetheless represents the very first words out of Congress’s mouth about the purpose and scope of the Act. In this case, the preamble explicitly refers to the limited types of behavior captured by the criminal provisions in Sarbanes–Oxley.

Ya know, like Big 5 accounting firms shredding documents.

Further reading for the five of you who didn’t hit the back button long ago:

• Supreme Court Appears Skeptical of Using Obstruction Law to Charge Jan. 6 Rioters [New York Times]
• Supreme Court casts doubt on obstruction charges against hundreds of Jan. 6 rioters [Los Angeles Times]
• The Jan. 6 Riot Reaches the Supreme Court [WSJ Opinion]

From the Going Concern archive:

The post Supreme Court Justices Discuss Among Themselves If Sarbanes-Oxley Applies to Rioting appeared first on Going Concern.

I’m noticing an increasing reluctance for associates and even seniors to just pick up the damn phone… This culminated today when my first year associate told me to ask permission before calling him. I can’t possibly imagine telling my boss to request permission to call me!

I no longer want this associate on my jobs. I’ve lost confidence that he can handle client conversations appropriately and frankly I don’t believe that he’s actually working at home. He’s also the kind to hide behind emails instead of just calling, which just wastes time and is a poor excuse for not completing assigned workload.

If this is genuinely an issue for him (instead of an attitude problem) I think he needs to address it, or he isn’t going to cope in the workplace.

Am I missing something? AITA?

It sounds like OP doesn’t trust that the associate is actually working from home but that’s a separate issue.

It’s worth pointing out that OP says in the comments their partners don’t ping and recognizes that this likely contributes to their position on surprise phone calls.

The majority of commenters said OP is indeed an asshole and that a pre-call ping is a commonly accepted courtesy. Most, not all.

Comment
byu/HuntDiligent5267 from discussion
inBig4

Comment
byu/HuntDiligent5267 from discussion
inBig4

Related Glassdoor discussion:

Although OP got slaughtered in the comments on that Reddit post, it seems we as professional working adults haven’t yet reached an agreement on the ping after all. To ping or not to ping?

The post Weekend Discussion: To Ping or Not to Ping Before a Phone Call? appeared first on Going Concern.

The study abstract:

Work from home (WFH) has been a part of the professional landscape for over two decades, yet it was the COVID-19 pandemic that has substantially increased its prevalence. The impact of WFH on careers is rather ambiguous, and a question remains open about how this effect is manifested in the current times considering the recent extensive and widespread use of WFH during the pandemic. In an attempt to answer these questions, this article investigates whether managerial preferences for promotion, salary increase and training allowance depend on employee engagement in WFH. We also explore the heterogeneity of the effects of WFH on careers across different populations by taking into account the employee’s gender, parenthood status, frequency of WFH as well as the prevalence of WFH in the team. An online discrete choice experiment was run on a sample of over 1,000 managers from the United Kingdom. The experiment was conducted between July and December 2022, and thus after the extensive use of this working arrangement during the COVID-19 pandemic. The findings indicate that employees who WFH are less likely to be considered for promotion, salary increase and training than on-site workers. The pay and promotion penalties for WFH are particularly true for men (both fathers and non-fathers) and childless women, but not mothers. We also find that employees operating in teams with a higher prevalence of WFH do not experience negative career effects when working from home. The findings underline the importance of individual factors and familiarisation as well as social acceptance of flexible working arrangements in their impact on careers.

Tony Trueman of British Sociological Association writes in Phys.org:

A survey of 937 UK managers found that they were 11% less likely to give a promotion to staff who worked entirely from home than to those who were completely office-based.

Hybrid workers—those working partly in the office and partly at home—were on average 7% less likely to be promoted.

Managers were 9% less likely to give a pay rise to staff working entirely from home than to those who were completely office-based, and 7% less likely to give one to hybrid workers.

The research found a gender gap: managers were 15% less likely to promote men who worked entirely from home than those who were completely office-based, and 10% less likely to give a pay increase. The figures for women were 7% and 8%, respectively.

FWIW this was all hypothetical. The managers were given two profiles of made-up staff who worked full-time in office, full-time at home, or hybrid with three days in-office and two at home. From there the managers were asked to choose which one they’d promote and which one they’d give a raise.

Here’s the part that should get the attention of our friends with Big 4 email addresses [emphasis ours because we know y’all don’t read entire paragraphs]:

They found that in organizations with very demanding work cultures, the managers were around 30% less likely to promote and 19% less likely to give a pay rise to men who worked entirely from home than to men who worked solely in the office. The figures for women were 15% and 19%, respectively. In organizations with more supportive environments, no penalty to staff for flexible working was found.

“In more supportive organizations, so where there is less pressure and long working days and where family-friendly policies exist, we don’t find such negative consequences of remote work,” said co-author Agnieszka Kasperska presenting the study to the British Sociological Association at their annual conference on April 5th.

“[O]ur findings indicate that individuals working from home still encounter career penalties, irrespective of the widespread adoption of this mode of work. Both male and female remote workers experience career penalties, but they are substantially larger for men.”

Obviously we need more data to know for sure if this is a thing and if it’s something most people care enough about to go back into the office.

The post Research: You Might Get Passed Over For a Raise If You WFH, Especially If You’re a Man appeared first on Going Concern.

On April Fools’ Day, California Assemblymember Matt Haney announced he’s introduced AB 2751, a proposal that “guarantees California workers uninterrupted personal and family time by creating a ‘right-to-disconnect’ from emails, texts, and calls after work hours.”

His office’s statement explains:

The bill mandates that all California employers create and publish company-wide action plans to implement the new right-to-disconnect laws as well as requiring that all employment contracts in the state clearly outline working and non-working hours. AB 2751 also empowers the California Labor Commissioner’s office to investigate and fine employers that exhibit a pattern of right-to-disconnect violations.

“Work has changed drastically compared to what it was just 10 years ago. Smartphones have blurred the boundaries between work and home life,” said Haney. “Workers shouldn’t be punished for not being available 24/7 if they’re not being paid for 24 hours of work. People have to be able to spend time with their families without being constantly interrupted at the dinner table or their kids’ birthday party, worried about their phones and responding to work.”

The bill’s language specifically says:

Existing law, including statutory provisions and orders of the Industrial Welfare Commission, as enforced by the Division of Labor Standards Enforcement, regulates the wages, hours, and working conditions of employees. Existing law makes it a crime for an employer to require or cause any employee to work for longer hours than those fixed or under conditions of labor prohibited by an order of the commission or to violate or refuse or neglect to comply with specified statutes on wages, hours, and working conditions or any order or ruling of the commission.

This bill would require a public or private employer to establish a workplace policy that provides employees the right to disconnect from communications from the employer during nonworking hours, except as specified. The bill would define the “right to disconnect” to mean that, except for an emergency or for scheduling, as defined, an employee has the right to ignore communications from the employer during nonworking hours. The bill would require nonworking hours to be established by written agreement between an employer and employee. The bill would authorize an employee to file a complaint of a pattern of violation of the bill’s provisions with the Labor Commissioner, punishable by a specified civil penalty.

If this bill gets anywhere, it would make California the first state in which employees are legally entitled to a “right to disconnect” after hours.

Yay or nay?

The post Weekend Discussion: Should After-Hours Emails Be Illegal? appeared first on Going Concern.

Sigh.

They weren’t taking liberties with the word “sexy” either. The intro paragraph reads:

In tiktok parlance, “accountant” is code for a sex worker. Now proper beancounters want to reclaim the title and make it appealing to prospective recruits, on the popular short-video app and elsewhere. The American Institute of Certified Public Accountants (aicpa), the profession’s main trade group in America, has a TikTok feed laden with career tips and young accountants (the real sort) living their best professional lives. It has 27,000 followers—and its work cut out.

How about instead of trying to wrestle the title of “accountant” from people who sell pictures of their feet on the internet the profession focuses on improving the two key issues that conspired to scare young people away: low starting salaries and poor work-life balance. No? “Sexy” TikToks is what we’re doing? OK.

There’s nothing sexier than money and every weekend off, change my mind.

The post Weekend Discussion: Accounting Doesn’t Need to Be Sexy appeared first on Going Concern.

Some key points from the KPMG survey, as key-pointed by KPMG:

• 97% of leaders are investing in GenAI over the next 12 months, with 43% of leaders saying their organizations plan to invest $100 million or more.
• 51% of leaders are currently measuring GenAI-related ROI through productivity gains, followed by employee satisfaction (48%) and revenue generated (47%).
• Many organizations have already or are planning to provide mandatory GenAI skills training for both employees (75%) and leaders (77%) in the next 12 months.
• 54% of leaders expect new business models to support their growth strategies in the next 12 months, followed by new product and revenue streams (46%), productivity (39%) and profitability (31%).

“We’re entering the next phase of GenAI, moving from pilots to transformational programs,” said Steve Chase, KPMG’s Vice Chair of AI & Digital Innovation. “Early experimentation has proven the potential of GenAI, sparking a readiness for greater investments that will deliver enterprise-wide productivity gains, reshape business models and create new revenue streams. Our experience at KPMG and with our clients has underscored that the readiness of your workforce will ultimately dictate success with GenAI, and this will be truer than ever as we enter this next phase.”

Remember when blockchain was the hot new technology and all the C-suite execs surveyed were overwhelmingly enthusiastic about its adoption and potential for transformation? Yeah.

Related: OpenAI CEO Sam Altman said on a podcast that GPT-4 sucks.

Also related: AI’s Dirty Secret: Poor People in the Developing World Are Doing Most of the Work

The post Weekend Discussion: Does Leadership Even Know What Gen AI Is? appeared first on Going Concern.

I mean…phone it in hard enough and you should be good right?

The post How to Get Laid Off? appeared first on Going Concern.

BUT ANYWAY. Twitter had quite a lot to say yesterday not necessarily about GT but about private equity. This is a new trend in the profession and as such, it’s difficult to say for sure what effect it will have ten or even five years down the road. But we’ve seen what happens in other industries. See: The Secretive Industry Devouring the U.S. Economy

It’s funny, if you search “private equity bad” of course you find articles like the above piece from The Atlantic but if you search “private equity good” you get…more negative articles. Like this NYT opinion piece. Hmm. Maybe accounting isn’t the only sector filled with unusually negative people.

The Xitter response and buzz around this deal thus compelled me to pose the question to you, dear reader, as this week’s weekend discussion. How do you feel about private equity in the accounting profession? Thoughts, gripes, hopes, predictions, and general curmudgeonry from all perspectives are welcome. It would be especially nice to hear from some of the senior partners who will be bailing out of the plane with a parachute made of private equity money.

Have at it, the floor’s yours.

The post Weekend Discussion: Private Equity is Good, Bad, or Ugly For the Accounting Profession? appeared first on Going Concern.

Let’s check out what Bberg said before I inject too many unrelated metaphors into this:

Mistakes continued to pile up this earnings season in the wake of Lyft Inc.’s market-roiling typo: Planet Fitness Inc., Mister Car Wash Inc. and Rivian Automotive Inc. all had to correct their quarterly earnings statements. These types of errors shake investor confidence and in extreme cases can result in heavy fines from the US Securities and Exchange Commission.

While it’s unclear what exactly led to the mistakes in each of these cases, one major risk factor has reached crisis levels: a shortage of certified public accountants.

Seasoned practitioners are retiring while the profession isn’t drawing the next generation of workers entering the labor market. The lack of help means current accountants’ hours and workloads can be grueling, upping the odds of mistakes and burnout.

Hints of a potential problem began to emerge in 2014-ish though up until the past few years it was only us screaming into the void about a talent shortage while accounting enrollments declined further every year. Then Wall Street Journal took notice and, well, the accounting news market has been saturated with SHORTAGE! articles since. And every time one of those is posted to r/accounting, a cacophony of voices cry, “There’s not a shortage problem. IT’S A SALARY PROBLEM.” (Side note mostly to self: Don’t write blatantly sarcastic headlines about this matter as all of r/accounting except for the one person who read the article will call you a moron and jerk)

It’s refreshing that the Bloomberg article addresses the salary issue rather than asking as if the answer isn’t already known “where have all the accountants gone??” Author Jo Constantz deserves a for that. She could have given it a sentence or two, worse she could have hand-wrung about it like the AICPA does when they come up with dozens of reasons other than low starting salaries for why the accounting profession isn’t as attractive as it once was in their regular brainstorming meetings. Instead she not only thoroughly acknowledged it, she threw some actual numbers in there, too.

For many 22- to 27-year-olds, known as Generation Z, their average student debt of more than $20,000 and the lure of higher-paying Wall Street and Silicon Valley firms means the time and effort required to become a CPA doesn’t pencil out.

Last year, the median salary for full-time entry-level accounting jobs was roughly $62,500, up from about $50,000 in 2020, according to Handshake data. The median pay advertised for entry-level management consulting and financial analyst roles, by contrast, was $70,000 and $75,000, respectively. For software engineers, the median entry-level pay was $93,000.

To attract people to accounting, the profession must “own up” to stagnant wages, Paul Munter, chief accountant to the SEC, told an American Institute of CPAs conference in December.

Note: The esteemed Paul Munter graduated from Leeds School of Business in 1978. Here are some figures from a 1982 Bureau of Labor Statistics report entitled Occupational salary levels for white-collar workers (1982 is basically 1978 right):

LOL:

$17,266 for a public accountant starting out in 1982 = $55,524 today. While demand for accountants has increased significantly since, as has the regulatory and compliance burden AND the base level knowledge expected of even the dumbest accountants, salaries have stayed…meh. It is literally not worth it for many students. Gen Z is smarter than we geezers give them credit for.

Back to the topic at hand. While we aren’t sure a shortage is to blame for all these restatements, we do know material weakness disclosures due to lack of accounting staff started appearing in SEC filings last year and there is a municipal crisis brewing as cities lose their credit ratings due to late filings and audits, too. The dominoes are falling. Too bad no one did something about it back when there was still time to turn it around.

The post Low Salaries Are Wreaking Havoc on Capital Markets appeared first on Going Concern.

Two themes repeatedly emerge from the comments:

1. The early-career busy work has been outsourced away and this is the inevitable result
2. The pay is too low and workload too high, new hires are wise not to bust their asses for the firm given these two facts

And a third factor: Young people have always been kind of dumb and OP probably forgot how dumb they were when they were an associate.

Regardless of your view, the comments are worth a read.

A few days after the above post, this one appeared:

Shockingly, being overworked and not paid enough to care makes another appearance. Almost as if this is a pervasive problem at Big 4 firms or something. This comment describes the situation well:

It’s likely that the firm does not incentivize Seniors and Managers to invest in their staff. They are also overworked and coaching + really helping someone understand something generally takes more time than just telling you what to fix. You also have to consider if the Senior actually knows what is going on themselves, as many don’t – especially if the experience you’re describing is similar to what they had at your level.

Anyway, discuss.

The post Weekend Discussion: Is Everybody Dumb Now? appeared first on Going Concern.

One post was this: In Honor of International Women’s Day, Let’s Recall Some Important Rules For Women In the Workplace. The “important rules” were bullshit from that sexist training seminar EY got in trouble for some years ago. Better known as the origin of the “waffles and pancakes” joke (attendees were told that “women’s brains absorb information like pancakes soak up syrup so it’s hard for them to focus” whereas men’s brains are like waffles and all the knowledge pools in all the books and crannies).

The 30-some leaders who attended the seminar — all of whom were women — were given a score sheet to rank themselves on feminine and masculine qualities. “Childlike,” ugh.

But there’s another post that I completely forgot about because it was ten years ago and I used to drink a lot at work back then: EY Got a Bunch of Old White Guys to Talk About Women in the Workplace

In that post, EY tweeted this:

Top tips from #EY’s male leaders on how to make the gender mix work #BBWW http://t.co/NcZDDKdW4w

— EY (@EYnews) July 1, 2014

Which led to the below PDF. EY’s link is dead now, as so many ancient links across the internet are, but we uploaded the PDF to Scribd at the time so here you go:

We’re happy to report EY is not pushing out male-centered content for this International Women’s Day.

Inclusion today. Inclusion every day.

Today we spotlight the stories of just a few of the remarkable women at EY who have been sharing their social equity experiences. https://t.co/F6I27Amm9N

Happy International Women’s Day #IWD2024 #UpliftSocialEquity pic.twitter.com/HCptwRTmEU

— EY (@EYnews) March 8, 2024

Happy International Women’s Day!

The post Remember When Firms Would Get Only Dudes to Talk About International Women’s Day? appeared first on Going Concern.

Happy #EmployeeAppreciationDay to our incredible team! Today and every day, we celebrate the hard work and passion each of you brings to the Firm. Your dedication doesn't just drive success — it creates a vibrant and supportive community that we are all proud to be part of. pic.twitter.com/kxeLW2VsAM

— Marcum LLP (@MarcumLLP) March 1, 2024

RSM joined in too with an eight second video.

Happy #EmployeeAppreciationDay!

Our unique professionals are what makes our firm great—providing exceptional client service and creating a collaborative work culture. https://t.co/wO8WUF1WTs #BeYouatRSM pic.twitter.com/goZdMA1TFd

— RSM US LLP (@RSMUSLLP) March 1, 2024

According to the always trustworthy Wikipedia, Employee Appreciation Day was the brainchild of Dr. Bob Nelson in 1995. It was basically a stunt to promote his book 1,001 Ways to Reward Employees, pictured below.

I trust everyone at least got a slice of pizza and gets the weekend off (LOL).

The post Let’s See What You Got For Employee Appreciation Day appeared first on Going Concern.

This person on r/Big4 seems to have had an epiphany that partners are better at people-ing than they are at the technical aspects of the firm’s business. Quite the revelation!

Why does it feel like the people who make it to partner are better at schmoozing than accounting?
byu/TheU_isBack inBig4

Take note, overachievers and aspiring partners: Technical skill matters most when you’re in the trenches. You could have Excel acumen that makes Andrew Ngai look like someone’s tech-averse grandma but if you can’t schmooze you’ll never go all the way.

This doesn’t explain the partners who are terrible at both yet made it to the top anyway. We’ll assume they slept with and/or blackmailed the right people on the way up.

The post Weekend Discussion: Are Partners Basically Better-Dressed Used Car Salesmen? appeared first on Going Concern.

Fortune has written up an Indeed survey of 1,500 employers and 1,500 workers in the UK that found two-thirds of workers surveyed have “ghosted” a prospective employer in the last year. Blowing off an interview isn’t the worst of it though:

A whopping 93% of Gen Zers told the global recruitment platform that they’ve flaked out of an interview.

Worse still, a staggering 87% managed to charm their way through interviews, secure the job, and sign the contract, only to leave their new boss stranded on the very first day.

Their reason for doing so? According to the survey, it makes them “feel in charge of their career”.

NGL you almost have to respect it.

Anecdotally, we’ve heard several stories of this happening at accounting firms recently. In fact, here’s a first day at the job ghosting story tweeted by someone in the #TaxTwitter gang. We wrote it up in the hopes the person would step forward and allow us to donate the fuck to give they are lacking.

A woman agreed to work for our firm. Did all the paperwork. Came in for first day of training. Took a break to “move her car.” Never came back. It’s become legend and a thing to tease the one guy she met with.

The woman later came crawling back to the firm asking for a second chance. Lame.

This isn’t the first time Indeed has tackled the emerging issue of ghosting by both employer and prospective employee or new hire. For December 2023’s “When Candidates and Recruiters Vanish: Indeed’s Ghosting in Hiring Report,” the job site surveyed 4,516 job seekers who admit to ghosting employers, as well as 4,517 employers who have been ghosted across the US, UK, and Canada. Here’s what they found:

Job seekers are also now more prepared to admit they’ve ghosted before: 78% say they ghosted an employer prior to 2022. In our 2022 survey, the percentage who admitted ghosting prior to 2021 was considerably lower, at 68%.

Employers share the sense that ghosting has increased: 77% say it became more common among job seekers during 2022 in comparison to previous years. In addition, more than half (57%) say it had never happened to them prior to the past 12 months. This is a notable increase from 54% who said the same in our 2022 survey and 45% in 2019.

All of this is leading large majorities of both US job seekers (75%) and employers (74%) to say that ghosting has become entrenched in the hiring landscape.

We would like to know how many of these employers who say they’ve been ghosted require one-way video interviews and/or excessively long aptitude or personality tests. Because NO.

This isn’t the first time we’ve covered ghosting either. Way back in 2018 we were compelled to discuss job ghosting from both sides after Journal of Accountancy published a piece on the phenomenon:

[JofA] just did a story about job candidates ghosting during the recruiting process that is essential reading for anyone on the receiving end of a ghost.

It’s happening more frequently: A hiring manager begins the recruitment process with a job candidate, only to have that candidate disappear or “ghost” them at some point — not returning calls, texts, or emails.

Pat Cassady, talent acquisition director at BKD CPAs & Advisors in the Kansas City area, can tell her fair share of stories her staff witnessed: a college student who went through a full round of interviews, and then stopped responding when a job offer was extended; an experienced professional with connections to an employer who stopped responding upon receiving an offer letter; and many others.

“What Is Job Search ‘Ghosting,’ and Why the Hell Is Everyone Doing It?,” GC October 9, 2018

So why is this happening at the scale it is? Luddites might argue that it’s due in part to the impersonal nature of the modern recruiting process (this also applies to online dating), that people aren’t just personally invested in the digital process. Maybe it is really a way for workers to feel they have control of a situation. It could be any number of things really but we know this for sure, it’s not going away any time soon.

The post The Job Ghosting Is Getting Out of Hand appeared first on Going Concern.

In my view, the system is very close to a tipping point of massive non-compliance in a number of areas of tax law. Put simply, if taxpayers and their advisers (and even tax specialists) have a hard time understanding new legislation, it can and will lead to non-compliance. The system then breaks down.

Combine the challenges of finding new talent to enter the accounting profession, interpreting massive new and complex legislation and reporting requirements, and the increased attrition (because of older accountants retiring and some outright leaving the profession because of the above issues) and there is a significant shortage of accountants that may leave some people having trouble finding one when needed.

The author may be from Canada but it’s no different down here.

You’re welcome to discuss on X, in the comments below, or screenshot the text and put it on Reddit, we don’t care. Please just read the whole thing first.

Give your accountant a hug — you may not find another one [Financial Post]

The post Weekend Discussion: “The System Is Very Close to a Tipping Point of Massive Non-Compliance” appeared first on Going Concern.

First off, we feel compelled to point out how utterly cool this guy is. That is not sarcasm.

As you can see from the screenshot above, his whole thing is wellbeing.

Here’s the abstract of the study which was based on survey data from 46,336 workers in 233 organizations in the UK:

Initiatives that promote mental well-being are formally recommended for all British workers, with many practices targeting change in individual workers’ resources. While the existing evidence is generally positive about these interventions, disagreement is increasing because of concerns that individual-level interventions do not engage with working conditions. Contributing to the debate, this article uses survey data (N = 46,336 workers in 233 organisations) to compare participants and nonparticipants in a range of common individual-level well-being interventions, including resilience training, mindfulness and well-being apps. Across multiple subjective well-being indicators, participants appear no better off. Results are interpreted through the job demands–resources theory and selection bias in cross-sectional results is interrogated. Overall, results suggest interventions are not providing additional or appropriate resources in response to job demands.

In other words, wellness programs don’t “undo” the damage of a stressful work environment. So what does? The existing evidence base suggests organization-level initiatives such as improvements in scheduling, management practices, staff resources, or tailored job design would be a good place to start.

A 2019 Harvard Business Review piece makes an important distinction between employee wellness and business benefit. Naturally, happy workers make for a better workplace — “Healthier people. Better business.” is the tagline of one service selling psychiatry services, coaching, and mindfulness to employers — but is on-site yoga helping the employee?

Wrote Charlotte Lieberman in HBR:

From coal mines to conference rooms, employers’ motivation is simple: keep workers healthy, keep company costs down.

But just because these programs can be positive for business outcomes doesn’t mean their primary purpose is to improve employees’ daily lives. For prospective hires, five-star Glassdoor reviews mentioning perks like free kale salads and onsite massages stand out like glittering constellations. But for employees, these benefits can feel like a tacit transaction. Ben, a designer and programmer I interviewed who has bipolar disorder, works at a company that offers a vast array of wellness benefits like culinary events (including fresh arepas!) and weekly afternoon yoga. “Company bulletins emphasize that these things are intended to offset work stress, and at the same time obliquely reinforce the idea that work stress is the inherent byproduct of being good at what you do and working hard at it,” he told me. “These things are often pitched as indulgent bribes to make up for the demanding expectations.”

She then says, skeptically:

I am personally not convinced that lunchtime yoga and mason jars of trail mix are the antidote to our global epidemic of workplace stress and burnout. For all the attention (and money spent) on workplace wellness, the jury is still out on whether these programs are really beneficial to our health. A recent study examining over 30,000 employees at a U.S. warehouse found that those exposed to a workplace wellness program reported no significant differences in absenteeism, healthcare spending, or job performance than those who were not — though they did report greater rates of some positive health behaviors, like engaging in regular exercise.

150 push-ups and 1,200 sit-ups a day is a good place to start.

Said Dr. Fleming of his research, “There’s growing consensus that organizations have to change the workplace and not just the worker. This research investigates well-being interventions across hundreds of workplaces, supplementing trials that often take place in single organizations, and the lack of any benefit suggests we need more ambition when it comes to improving employee well-being. I hope these results can spur on further research and employer action.”

Read more: Study finds no evidence that individual-level mental health interventions improve employees’ well-being [Phys.org]

Related:

The post Oxford Study Finds Workplace Wellness Programs Do Diddly Squat For Mental Health appeared first on Going Concern.

Over the years, we have covered various incidents of college-educated professionals behaving as though they were raised in a barn when utilizing the office restroom. In one such case, one EY office was so plagued with restroom problems an employee felt compelled to produce the guide pictured below and stuck it to the lunchroom wall. The note remained there for exactly 22 minutes until the OMP swung by to see to its removal. Guess we know who the biggest offender was.

Cameras in the client’s restroom? There’s got to be a story there. We don’t have a peeping clients story but we do have a story about an accounting professor recording students who came to his house to party taking a piss that will have you checking tissue boxes in bathrooms from now on.

At another office, EY had to spend money on stickers reminding the “if it’s mellow, let it yellow” crowd to flush.

We can’t help but wonder if this pervasive issue is part of the reason why they moved away from the “Quality In Everything We Do” tagline when they rebranded, clearly employees of the firm were struggling with the “everything” part.

And somewhere in another EY office, one exasperated public accountant urged colleagues to keep business out of the restroom. The other business, that is.

Also, keep business out of the restroom, even if a colleague wishes to talk business suggest that the conversation be moved elsewhere.  No-one wants to talk about the “unhh, grunt, grunt..” unpaid invoice from inside a stall.

These incidents happened years ago, long before professionals were spending entire weeks working from home and pissing all over their own toilet seats. You can still do that…at home. But let’s remember some basic bathroom manners apply when you’re sharing the space with others that may have been forgotten because we were working from home.

Here are just a few rules users of office restrooms should keep in mind when hitting the head.

Flush

Look, I get it, I lived in California for a long time. In a communal restroom situation, you are expected to flush it down every time regardless of what “it” is. Unless “it” is wet wipes or feminine hygiene products in which case there’s usually a handy receptacle called a trash can. Flushing wipes — and yes, even the ones that claim to be flushable — is a no-no and can lead to something horrifying called a fatberg that lurks in the sewers and screws up our fancy modern day wastewater systems.

From Wikipedia:

A fatberg is a rock-like mass of waste matter in a sewer system formed by the combination of flushed non-biodegradable solids, such as wet wipes, and fat, oil, and grease (FOG) deposits. The handling of FOG waste and the buildup of its deposits are a long-standing problem in waste management, with “fatberg” a more recent neologism. Fatbergs have formed in sewers worldwide, with the rise in usage of disposable (so-called “flushable”) cloths. Several prominent examples were discovered in the 2010s in Great Britain, their formation accelerated by aging Victorian sewers. Fatbergs are costly to remove, and they have given rise to public awareness campaigns about flushable waste.

Oh my God, Wikipedia has a “notable fatbergs” section.

12 September 2018: Workers in Macomb County, Michigan, US discovered a fatberg 100 feet long, 11 feet wide and as much as 6 feet tall. The Michigan Science Center launched a ‘fatberg’ exhibit in December 2018, which included real pieces from the mass found in September.

First In First Out

Unless your bowels are erupting at that very moment, don’t barge your way into a stall if someone is waiting ahead of you. Give the person exiting the stall plenty of space to finish their business and wander over to the sink to (hopefully) wash their hands.

It goes without saying, if you stand too close to the stall the user will automatically assume you’re peering through the unfortunate gap. Don’t do this. Unless you’re purposely peering through the unfortunate gap in which case, seek help weirdo.

Avoid Eye Contact

This one is mostly for the guys. Eyes up, gentlemen. The last thing you need is an eyeful of the top performer at your office.

Wash Your Hands

Do you all remember how at the beginning of 2020 the Centers For Disease Control actually had to produce an excess of content explaining to grown adults in the first world that you’re supposed to wash your hands?

For anyone who may have missed those copious PSAs, here’s a refresher. Remember: use soap!

Keep the Crying to a Minimum

Remember there are other people waiting to cry in the bathroom.

I'm all for crying in the bathroom but when there's only one stall, maybe limit your bathroom crying time to 5 mins please

— Sabrina the SALTy CPA (@IraGilligan) September 6, 2023

Clean Up After Yourself

Just because someone gets paid to clean up after you doesn’t mean you can’t clean up after yourself, too. Don’t leave a trail of toilet paper pieces scattered all over the floor or unravel the entire roll of TP like a cat high off his ass on nip.

With these few things in mind and the right attitude, we can all work together to make the office restroom a less disgusting place. Maybe. Hopefully.

The post Let’s Discuss Bathroom Etiquette Now That We’re Returning to the Office appeared first on Going Concern.

Thank goodness for the Connecticut Society of CPAs! Without their posting, it would have taken me longer to learn about the latest half-baked idea by NASBA regarding the education requirements to become a CPA. It seems NASBA wants to keep this under wraps. I could not find mention of this exposure concept on NASBA’s website, and certainly no link for comments. I suppose they only want to hear from the echo chamber. Requesting comments during busy season was not safe enough, I suppose, to keep them from possibly hearing things they don’t want to hear.

What is NASBA up to now? They have formed a task force to look at the licensure model and their first idea is to further weaken, rather than repeal, the worthless education requirement of an extra 30 hours of course work. There are no educators on the task force. Not only does NASBA not want to hear from CPAs who are not members of the entrenchment club, but they also don’t want an educator’s voice in a discussion of the education requirements.

To become a CPA, one must meet the requirements of three Es: education, exam, and experience. The AICPA and NASBA want to retain the 150-hour education requirement that has been questioned repeatedly by rigorous peer-reviewed academic studies, by the Center for Audit Quality, and on these pages from the multiple perspectives including diversity and learning efficacy. Many potential CPA candidates never enter the pipeline due to the tuition cost and time involved to obtain an extra 30 credit hours. Rather than proposing to do away with the extra-30 requirement that has no demonstrated value, the AICPA created an Experience, Learn, and Earn (ELE) program. I have previously questioned the wisdom of the ELE approach. ELE candidates work for a sponsoring firm in a benefited position while enrolling in low-cost fully online courses where they earn credit hours on a transcript. Low cost might mean low value. A determinant of low value might be low effectiveness. We don’t know. ELE is currently promoted as a pilot program.

Ideally a pilot program would inform us about the efficacy of the pathway. Will ELE candidates complete the credit hours in a reasonable time frame? Will they pass the CPA exam in one 30-month window? Will they stay in the profession even a year beyond what might be required to not repay tuition benefits under their sponsoring firm’s employment contract? I would bet 20 to 1 that we’ll never know.

We won’t know for two reasons. The AICPA will not collect and report the relevant information. Secondly, NASBA and the AICPA will push through an alternative scheme that makes questions about the current form of ELE moot. NASBA is focusing discussions on an equivalent path to licensure without the need of having those extra 30 hours on a transcript. Instead, candidates could complete a “structured professional program” while they work. Hmm. That sounds like an experience equivalent to me.
Why not simply allow students who hold a bachelor’s degree to become CPAs with an additional year of experience over students who hold a master’s degree?

Oh, I know! Allowing bachelor’s degree holders to become licensed after two years of experience would remove the need for a “structured professional program” and the fees that such a program could generate for AICPA and NASBA. ELE could be offered solely by the AICPA. There would be no need for a university partner who would charge tuition. The AICPA could capture enrollment fees. And, who would certify a program as “structured”? That sounds like a potential revenue stream for NASBA. Like how CPE providers pay to join NASBA’s National Registry of Sponsors, firms that provide structured professional programs could pay to have their programs approved by NASBA.

Enough already! NASBA’s exposure concept of creating a structured professional program would evidently require legislative action in at least some states. If a “solution” that requires legislative action is being proposed, that solution should be to change the education and experience requirements to be what they once were in many states – license with a master’s degree plus one year of experience, or license with a bachelor’s degree and two years of experience.

The post Just Eliminate the Extra 30 For CPA Licensure Requirement! appeared first on Going Concern.

The new research by MIT Sloan associate professor of accounting Andrew Sutherland, Mattias Uckert of University of Amsterdam, and Felix W. Vetter of University of Mannheim entitled Occupational Licensing and Minority Participation in Professional Labor Markets (Journal of Accounting Research, forthcoming) says both. From the abstract:

We find a 13% greater entry decline following the [150 hour rule’s] enactment for minority than nonminority CPA candidates. Our analyses of parental income and financial aid availability point to a socio-economic status channel explaining the differential entry declines. Studying exam passing patterns, professional misconduct, and job postings we find a deterioration, or at best, no change in CPA quality following enactment.

From MIT Sloan’s article about the paper:

In the field of accounting, some observers argue that the current logjam in talent can be traced back to a four-decades-old rule that was implemented by the American Institute of Certified Public Accountants: To obtain a CPA license, accountants must complete 150 credit hours (five years) of university study rather than 120 hours (four years).

At the time the rule was implemented, the AICPA said that students needed the additional hours of study to keep up with new tax laws and more sophisticated approaches to auditing.

Naturally this is why the additional 30 hours can be in anything, because underwater basket weaving covers tax law. In We Get to the Bottom of Why the 150 Hour Rule Doesn’t Require Specific Courses, we recently dug up a statement of AICPA policies published in the 80s — just as the 150 hour rule was being adopted by a handful of states — that talks about why additional education should be required for licensure. Good read for anyone interested in what is increasingly seeming like an arbitrary and nonsensical rule.

“Tuition in professional fields like accounting is expensive, and forgoing a year of income to complete a fifth year of college entails a sacrifice,” Sutherland said. “Naturally, the burden of such requirements tends to fall on those least able to afford the additional year.”

HMM. It’s almost like we knew this already. No sassiness toward Prof. Sutherland intended. This is from the CAQ report mentioned above:

While the research showed the 150 credit hour requirement is a barrier across the board, it is more conspicuous for Black and Hispanic nonaccounting students, and in particular those students who considered accounting but opted out, meaning that these students looked into accounting as a major but ultimately went elsewhere due to the additional credit hour requirement. These students perceive the rule as an expensive, time-consuming requirement to advance their future career. To be sure, these students see the CPA license as a valuable certification, but they don’t view it as worthwhile to pursue.

“the research showed the 150 credit hour requirement is a barrier across the board”

In looking at the data, the MIT research identified a 26% decline for minority CPAs versus a smaller 14% decline for nonminority CPAs. Can the profession afford double-digit declines in any candidates?

For anyone wondering “what about Asians?” we’ve got you. Researchers found no statistical entry decline for Asians, “whose average income and wealth are comparatively high.” Here’s what they did find though:

Second, following enactment [of the 150 hour rule], CPAs increasingly come from universities whose students have high parental income. Third, cross-sectional tests show that entry declines are concentrated in states offering the least financial aid. Moreover, the parental income and aid patterns are evident in both minority and nonminority subsamples, indicating that financing constraints influence how and for whom the 150-hour rule affects entry.

All the half-assed diversity initiatives in the world are useless (other than making leadership feel like they’re the good guys) if minorities — and those from low socioeconomic backgrounds — are effectively locked out from the profession.

Just another check in the “maybe the profession should reevaluate this whole 150 hour thing” column.

Occupational Licensing and Minority Participation in Professional Labor Markets [SSRN]
‘150-hour rule’ for CPA certification causes a 26% drop in minority entrants [MIT Sloan]

The post At This Point It’s Almost Like the Gatekeepers of the Profession Want to Keep Minorities Out appeared first on Going Concern.

A woman agreed to work for our firm. Did all the paperwork. Came in for first day of training. Took a break to “move her car.” Never came back. It’s become legend and a thing to tease the one guy she met with.

She called this week asking for a second chance.

What would you do?

Second chance? Or nah?

The post Which One of You Was This? appeared first on Going Concern.

But hey, let’s pretend like this is some novel concept in this Forbes piece “What We Want From Work Is Changing — For The Better“:

A staggering 82% of employees believe it’s important for their company to have a purpose — but why does purpose at work matter so much?

Shannon Schuyler, US Chief Purpose and Inclusion Officer at PwC, thinks it has to do with impact. “When you look at the psychology of why individuals find meaning, and why they engage in things that are other than themselves, it’s because they realize they play a larger part.”

In the old days people found this meaning through community, church, or raising a family, now apparently we find it through the money-generating activities of commoditized professional services.

The 82% figure referenced by Forbes comes from a 2022 McKinsey study. You know, McKinsey, that benevolent organization known worldwide for its purpose-driven mission. (That’s a joke.) That study was about how to con people into going back to the office, not about making them feel like work has some sort of meaning:

“Return to office” plans have been making headlines since mid-2020. Whether the prevailing message is hybrid, team-based, or prescriptive, these pronouncements often fail to achieve leaders’ desired results. And when employees are slow to return voluntarily, companies resort to ineffective mandates, exacerbating trends like the Great Attrition.

Employees are leaving because they don’t know why to stay, much less commute.

To address this, and to turn the office into a competitive advantage, executives should focus on making their workplaces matter and measuring their success. They should design and activate offices that foster human connection, and create tailored, authentic experiences with a hospitality mindset. A more valuable, fulfilling work day can clarify the benefits of collocating with colleagues, in turn helping prevent decision fatigue as employees ask, “Do I go into the office tomorrow or not?”

At the bottom there’s a link to learn more about McKinsey’s People & Organizational Performance practice because that is McKinsey’s purpose, generating income for themselves (not that there’s anything wrong with that). So all this is is corporate pornography fueling a C-suite circlejerk whereupon they convince each other that their workforce is motivated by a sense of belonging and not by money in the bank and time to pursue activities that actually mean something to them other than work.

Buckle up, we’re going back in.

When talking about PwC’s own journey in developing its purpose several years ago, Schuyler says, “It wasn’t that we were an organization that for 175 years were without a purpose — we just didn’t define it.” Reflecting on why PwC started doing what they did in the first place, and why it was important 175 years ago, gave clarity to what had simply carried over during the years, and what was truly their “why.”

After a business does that work, the end result — the purpose statement — shouldn’t be a surprise, nor a grand reveal. “We made a strong decision not to put our purpose external for years, because we felt that our clients should know it,” says Schuyler. “If we’re living it, they should be able to say that they trust us. We wanted them to say it before we said it.”

What. Your purpose is to provide professional services and receive money from clients in return. Why must you make this so complicated?

“The only way we got people to truly understand purpose, and look at it as a lens, was when we allowed them to go through the challenge of finding their own purpose. This helped people understand that their own role within PwC was more than just a transaction. And that for us was a game-changer.”

Here’s the worst quote:

Finding your individual purpose is hard work. “Years ago, people would say that they don’t want to be a cog in a wheel. Now, they’re okay with that — but they want to know what their wheel does. And they want that to be meaningful.”

The meaning is having PwC on their resume so they can eventually leave for a better job with fewer hours. You’re way overthinking this.

The post Grab the Barf Bag, Leadership Is Talking About ‘Purpose’ Again appeared first on Going Concern.

Traipsing haphazardly across the internet as one does, I came across this ancient scroll dated 1988 and entitled “Education requirements for entry into the accounting profession: a statement of the AICPA
policies.” When I say ancient, I mean ancient. Serif fonts hadn’t even been invented yet.

The introduction looks familiar. As the profession evolves, the profession’s gatekeepers are tasked with periodic review of the requirements to become a CPA. This is how BEC got killed off and we ended up with CPA Evolution, because the necessary entry-level knowledge of a CPA today is much different from that of a CPA 15 years ago. Reasonable.

It is the policy of the American Institute of Certified Public Accountants (AICPA) that “ the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA” and “the AICPA should review periodically the standards of admission requirements for CPAs.” To fulfill the AlCPA’s responsibility under this policy, the Education Executive Committee decided in 1986 to review the 1978 Education Requirements for Entry Into the Accounting Profession (the Albers report) to determine how the sample program contained therein should be modified to reflect changes that had taken place and trends that were expected to continue. After identifying significant changes occurring in public accounting, industry, and not-for-profit organizations, the Education Executive Committee engaged in extensive discussions of the impact these changes should have on education for CPAs.

And this is the AICPA’s official policy on education requirements for entry into the accounting profession in 1988:

1. The CPA certificate is evidence of basic competence of professional quality in the discipline of accounting. This basic competence is demonstrated by acquiring the body of knowledge common to the profession and passing the CPA examination.
2. Horizons for a Profession is authoritative for the purpose of delineating the common body of knowledge to be possessed by those about to begin their professional careers as CPAs.
3. At least 150 semester hours of college study are needed to obtain the common body of knowledge for CPAs and should be the education requirement. For those who meet this standard, no qualifying experience should be required to sit for the CPA examination.
4. The scope and content of the educational program should approximate what is described in Academic Preparation for Professional Accounting Careers and should lead to the awarding of a graduate degree.
5. At the earliest practical date, the states should adopt the 150-semester-hour education requirement. The date by which implementation of this policy may be practical may be dependent upon the following factors: (1) the current education requirement in each jurisdiction, (2) the availability of graduate accounting education in each jurisdiction, and (3) appropriate lead time to permit individuals to meet proposed education requirements.
6. Candidates should be encouraged to take the CPA examination as soon as they have fulfilled the education requirements, and as close to their college graduation dates as possible. For those graduating in June, this may involve taking the May examination on a provisional basis. [Ed. note: At the time this was published the CPA exam was given only twice a year, in May and November]
7. Student internships are desirable and are encouraged as part of the education program.
8. The AICPA should encourage the development of quality programs of professional accounting (or schools of professional accounting) and participate in their accreditation.
9. Educational programs must be flexible and adaptive, and this is best achieved by entrusting their specific content to the academic community. However, the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA.
10. The AICPA should review periodically the standards of admission requirements for CPAs.

Published prior to the moon landing, Horizons for a Profession – The Common Body of Knowledge for Certified Public Accountants [PDF] is so old it may have initially been written on papyrus paper. That’s what they’re referring to when they say “Horizons” above.

The scanned version is 346 pages so we won’t dig too deep into it but there are some interesting bits in there if you are a nerd who’s into accounting history (me).

Like how many firms performed what services:

Point being, Horizons gets many mentions in the 1988 report as does the “Education requirements for entry into the accounting profession” report published ten years before the one we’re talking about [PDF]. Dubbed the Albers report, the 1978 version came out five years before Florida became the first state to adopt the 150-hour rule.

But let’s get back to 1988 and this part in particular. Many people have questioned why the 150 hour rule lacks any requirement for specific education, especially so now that there’s a contentious debate raging about its continued existence. I mean, if it’s so critical to the public interest then why can it be met with whatever? The 150 hour rule may not have improved the quality of professionals since its widespread adoption but it sure gave us a lot of expert underwater basket weavers.

This is what the report says:

The profession requires that its entrants be men and women whose education has provided them with the foundations for lifelong learning, development, and growth. No attempt is made here to completely delineate the content of a CPA’s general education because it does not always relate directly to the demands of professional practice. Students should come to understand humankind, its history, the philosophies by which it lives, the languages in which it communicates, and the arts and sciences that enrich its existence. Emphasis should be on developing analytical abilities and problem-solving skills, as well as perception, judgment, and integrity. [emphasis ours]

Huh. Who knew.

The post We Get to the Bottom of Why the 150 Hour Rule Doesn’t Require Specific Courses appeared first on Going Concern.

Believe it or not, Big 4 bigwigs get invites, too. To be there rubbing elbows with the movers and shakers they’ve got to be a member of the World Economic Forum (individual membership comes at the low, low price of $52,000, $263,000 if you want to be an “Industry Partner”) and shell out $19,000 for a ticket. That of course doesn’t include flight, lodging (starts at $500 a night for basic accommodation), and all the other stuff that comes with jet-setting to the Swiss Alps to attend Corporate Burning Man for a week.

For the eternally curious looking to get a peek behind the curtain at the levers being pulled by the wizards, Consultancy.eu helpfully wrote an article about the consulting firms attending this year and their agendas. It’s no big surprise generative AI is this year’s star.

Deloitte

This Big Four firm actually has its own venue in Davos – Deloitte Haus, which is set up as a place to “connect with leaders, speakers, and innovative solutions,” in their words. The firm is hosting events on issues such as “trust, sustainability and climate, AI, equity, purpose, and governance.”

The Deloitte delegation is headed by Global CEO Joseph Ucuzoglu, who is there accompanied by other top leaders at the firm. With AI taking center stage at the forum, Deloitte chose it as the perfect moment to unveil their large-scale survey of C-Suite attitudes towards AI.

“Deloitte Haus is your place to connect with leaders, speakers, and innovative solutions,” says the firm on it’s Davos page. Along with Joe U, the Deloitte delegates are Anna Marks, Stacy Janiak, Richard Houston, and Jason Girzadas. We’ll leave it to you to Google their titles if you want. Nice to see the Davos entourage has evolved from the sausage fest it was a decade ago.

KPMG

For their part, KPMG is participating in this year’s Davos Forum by facilitating collaboration, encouraging public-private cooperation, and collaborating with others to devise solutions that contribute to a more sustainable future. The firm has focused on the energy transition, scaling renewables, and ESG strategies. AI – essentially a must at this point – is also on their agenda.

Here’s KPMG Chair and CEO Paul Knopp’s interview with Quartz on those topics and more should you care. A highlight of that interview:

Quartz: Is this going to become a key differentiator in the consulting space, how consulting companies can help clients with AI?

Knopp: My expectation is that we will be able to use AI to differentiate ourselves in the short term—with the recognition that our competition is really excellent, and that they have at their disposal the same software providers and technology companies from which we’re procuring. The first mover advantage could be very meaningful, but you also have to be ever cognizant of the fact that everybody else is moving, too, and we’re all trying to develop what I say is AI at scale.

I still think that the elements of the human touch, the culture of your organization, is going to be critically important with the way you deliver the products and solutions that are accompanied by generative AI. So number one is making sure your culture is one where your clients trust that you’ve done things with an ethical framework that allows what you’ve produced to be really impactful and can be trusted.

PwC

At Davos, PwC is engaging in dialogues with global leaders, focusing on critical issues like economic growth, AI, and climate strategies. Serving as a strategic partner to the World Economic Forum, PwC aims to contribute impactful, forward-looking solutions for sustainable inclusive growth.

In their presence at Davos, PwC is focusing on sustainability, diversity, digital trust, the global economy, and – yes, you guessed it – AI. The firm aims to contribute insights to key conversations shaping the world’s future.

PwC revealed the findings of their 27th Annual Global CEO Survey this year, saying “responses reveal that economic optimism among CEOs has more than doubled compared to 2023, yet almost half of CEOs do not believe their businesses will be viable in a decade as tech and climate pressures accelerate.” Fun.

Outgoing global chair Bob Moritz no doubt took many opportunities to inject PwC’s favorite keyword into the conversation, as in this quote: “Economic headwinds, geopolitical tensions, climate change and technological disruption present complex challenges for leaders around the world. As these trends bring to bear new uncertainties and opportunities, it has never been more important for the private and public sectors to collaborate to build trust and deliver sustained outcomes for people and the planet.”

EY

As for EY’s participation in the WEF meeting, their India Chairperson Rajiv Memani has been making the rounds for his talk on interest rates and why he does not foresee them coming down as quickly as some expect. The firm also focuses quite a bit on AI (surprise, surprise), with a recent survey they released in anticipation of the Davos Forum finding that 70% of CEOs were uncertain about GenAI.

Interestingly, some of the buzz around EY at Davos has been related to comments about the possibility that the consulting giant could break up into a number of separate, smaller firms. Though the idea was tossed out last year, it was floated once again by Global Managing Partner Andy Baldwin in Davos.

“Floated” is generous. What he said was “Obviously the separation would have unlocked a lot more market growth potential. I don’t see us revisiting the sale of the consulting business in the short term.”

It doesn’t appear EY updated their Davos landing page for 2024, last year’s leaders were of course Carmine Di Sibio, Andy Baldwin, Marie-Laure Delarue, Julie Linn Teigland, and Julie Boland. Again, way to go with the female representation. Did Julie Boland get invited this year? We seem to recall there was some minor drama swirling around her last year.

We’ll leave you with this clip of Joe U on Squawk Box to chew on.

And this comment from that video for shits and gigs.

The post Here’s What’s on the Big 4 Agenda at Davos This Year appeared first on Going Concern.

We’ll share the full results after the survey closes but for now I wanted to highlight this response to the question “What issue ISN’T being talked about and should be?”

Why not have more schooling for a CPA. Attorneys did this years ago, and there is not a shortage of Attorneys. I think if CPAs were a more elite group, although it may take a while there will be more CPAs once people realize that it is an elite group. Also, why do we care so much if there are fewer accountants, just let some of these clients go without an accountant when they complain about the fees. Why does this profession think that there ought to be no client left behind. This profession isn’t a public school. We should have waiting lists for new clients. We should dump about half our clients and charge 150% more than we are charging now. Then we could afford to pay staff more.

Breezing right past the suggestion that CPAs need more schooling, they make an excellent point. Maybe it’s just the #taxtwitter accounts we see often in our feed (as in, the influencers and disruptors who are leading the charge to…well, charge) but there has definitely been a shift in the past few years away from lowballing yourself and toward charging what you’re worth and being picky about which clients you take on. FINALLY. Maybe preparers are starting to internalize the messaging.

A few examples:

2024 Pricing Update
I am more or less doubling fees to $2500 individual, $10,000 business minimum. I expect big drop off. That is intentional. But 2024 services are bundled and that will help everyone. I will have room to add 10-20 new clients so started advertising. #taxtwitter

— Tony Novak (@tonynovak) December 29, 2023

Thank you, Logan, Mike, Brian Tax Season 2024 I am implementing the tools I learned from #TaxTwitter You inspired me to make a change and start raising prices and asking for a deposit. Thank you! You made a difference in this small firm's success.

— Howard Knudsen CPA (@howard_knudsen) December 18, 2023

I'm trying really hard to break the cycle. I'll be releasing clients, better defining my ideal client/niche, requiring retainers, and raising prices. What about you, #TaxTwitter and accounting friends? pic.twitter.com/KFyJA3xXtj

— JL CPA (@JLoBeanCntr) November 22, 2023

Yes to all. Our staff want raises so the fee increases should be consistent.

— Craig Hausz, CPA (@CPATaxTeam) November 21, 2023

But then we also have:

I know we've all seen some low fees but this has to be the lowest I've seen given the detail of the return. Rates your rates folks. #TaxTwitter pic.twitter.com/qPlFWxV9JC

— Albert J. Campo, CPA, MBA (@ajthecpa1226) December 12, 2023

And Albert again with another:

So it seems that the new race to the bottom for fees is for monthly bookkeeping services. I get outsourcing can play a role here but some of these prices firms are charging is insane. Their profit margins have to be awful. #taxtwitter

— Albert J. Campo, CPA, MBA (@ajthecpa1226) October 20, 2023

Awfully low. As in $250/month for an avg of 400 monthly transactions.

— Albert J. Campo, CPA, MBA (@ajthecpa1226) October 21, 2023

I was doing some much overdue shredding today and I came across my husband‘s tax returns from 1996 done by H&R Block where they charged him $140. When W-2, two states both part year returns. I know people charging that much or less. It’s time to stop that.#taxtwitter

— Debra Beckman (@SeptemberAcres) September 28, 2023

Can we shout this from the rooftops and rafters so ALL of #TaxTwitter can have faith that if clients leave just because you raised prices you Can Still Make $!

— Seth Fineberg (@B2BSeth) October 25, 2023

Look, I don’t know who needs to hear this but you’re allowed to charge more. You will probably lose some clients, so what. They’re cheap and don’t value what you do for them. DITCH THEM.

The post ‘Why Does This Profession Think There Ought to Be No Client Left Behind?’ appeared first on Going Concern.

Membership of the American Institute of Certified Public Accountants, the US professional body, fell from 430,000 in 2017 to 415,000 last year and it has missed membership targets in four of the past five years.

My mother was kind of an asshole (that’s where I get it from, thanks mom) so she never taught me that bit about not saying anything should you have nothing nice to say, hence I shall say this:

Let’s check out the AICPA/CIMA annual reports (found here) for more on these targets. Working back from 2021:

Note: It was 2017 when AICPA & CIMA joined together “to forge a powerful international alliance that promotes accounting and finance in every corner of the world.” Actually they use the words “came together” on the website but I refuse to use that phrase as I’m perpetually 15 years old. So it appears AICPA membership got a boost from that for a bit.

In 2022’s annual report (found here) they changed things up:

I like how they just gave up with the verbose excuses in the discussion column. Pipeline challenges *insert jerking off motion here*

Whatever. Not my circus, not my spreadsheet jockeys. If you’re one of the many people who haven’t renewed your AICPA membership these past few years and care to tell us why, reach out if you want.

Buckle up, the next few years are going to be fun.

Dire shortage of accountants prompts calls for shake-up [Financial Times Opinion]

The post To No One’s Surprise Except the AICPA’s, AICPA Membership Is Falling appeared first on Going Concern.

Here’s what they said:

Accountants take the bronze medal in the United States. AI is used in accounting firms to generate financial reports and arrange expenses efficiently. Despite these advantages, using AI within accounting can lead to detrimental data breaches from cyber criminals searching for investment decisions.

Um. You know what, never mind. Here’s a better source on generative AI and risks to CPA firms from the esteemed Journal of Accountancy. While the security of client data is a huge concern and why firms immediately started warning staff not to put client data into ChatGPT shortly after it started getting popular among the non-techies, the bigger issue for the profession is the reliability of AI’s output. From the above JofA article:

Unlike you, ChatGPT and other generative AI tools have not been formally educated and trained in the practice of public accountancy and are not licensed CPAs. It is important to supervise and review the output from generative AI just as you would the work of any other engagement team member. Indeed, ChatGPT terms of service at the time of this writing remind users to “evaluate the accuracy of any output as appropriate for your use case, including by using human review of the output.” Consider requiring firm personnel to inform their supervisor when work has been created or developed using generative AI. Doing so will help ensure that the output is properly reviewed.

On the topic of output, we’re getting there. Last April, tax app Keeper unveiled its scary good GPT-4 “Ask an AI accountant” tool. After being trained on 2023 tax updates, the AI accountant could broadly answer tax questions correctly 84.19% of the time (its work was checked by human professionals). It was quite good at knowing which tax forms to apply to which situation and understanding real estate tax implications but not so good at getting tax form details right, including what certain lines and boxes are intended for. Checkmate, robots. As skilled as it is at certain repetitive and pre-trained tasks it still needs close human supervision for most applications.

We’re not sure what search data DevRev looked at to come up with their list because here’s what the last 90 days of Google Trends looks like for four search terms:

will AI replace accountants

How will AI affect accountants

will AI replace lawyers

How will AI affect lawyers

For both lawyers and accountants there were no results for “how will AI affect ____” so we ran it again with a more generic term and went back 12 months.

Yeah, lawyers win.

The post Accountants Aren’t the Scarediest About How AI Will Affect Them appeared first on Going Concern.

The post Quick Survey: What Will Be the Biggest Issue Affecting the Profession in 2024? appeared first on Going Concern.

While you’re here, let us say thanks for reading and we’ll see you in 2024. Now, the list.

#10.

#9.

#8.

#7.

#6.

#5.

#4.

#3.

#2.

And the biggest story of the year was…

#1.

Great job, Deloitte, you came in #1 yet again.

Happy New Year, everyone!

The post The Ten Most Read Stories of 2023 appeared first on Going Concern.

Before I look back on what I think were the best posts (ranked arbitrarily by me), allow me to resurrect this post from January 7: Let’s Start the Year Off With Some Doomsaying Predictions For the Profession in 2023. Yes, let’s.

Jack Castonguay, PhD, CPA (who is currently boycotting Twitter but whose back catalog can be found at @profjack) tweeted these predictions, or and commentary in brackets added by me.

The accounting profession is in for a bumpy road in 2023:

1. Staff shortages will persist – salaries remain low & hours high [Yep. And firms started pulling back on the generous raises and bonuses of 2021]
2. CPA Evolution will depress the pipeline further [See: CPA Exam Changes and Pipeline Woes Are a Perfect Storm of Problems For the Profession and No One Will Be Surprised to Hear CPA Exam Candidate Numbers Are Down in Every Way the Numbers Can Be]
3. Audit failures will become more frequent & high profile (#FTX now, what next year?) [what we lacked in audit failures we made up for in testicularly massive tax scandals]
4. Turnover will likely increase – the dam is cracking & will break [the dam is cracking however turnover was historically low this year, probably due to uncertainty around the economy]
5. Regulators will increase pressure to improve audit quality, as they should [the PCAOB was very busy this year]
6. More pressure = more hours = more turnover = more pressure… [LOL there was literally an article about this the other day: Auditors say accountant shortage ramps up work pressure: CAQ]

With that out of the way, off we go.

Tech layoffs started happening way before we started seeing mass layoffs in our own sector and it seems EY thought they’d be able to clean up on all that talent on the market. Surprise, the tech people didn’t want to work for EY.

Excerpt:

While their employees were quietly boasting about not losing their jobs, it seems EY leadership was waiting in the wings hoping to snap up some of the newly-liberated tech talent. Hilariously, that didn’t work out for them.

At the World Economic Forum in Davos this week, EY CEO and future King of Advisory Carmine Di Sibio told Bloomberg that “it’s business as usual” when it comes to hiring, which means the firm is having trouble finding talent though he didn’t say as much. In fact he said the opposite. Gotta keep up appearances for that consulting IPO after all.

“We’re not struggling to source talent, but it’s not like we’re seeing a rash of talent that’s all of a sudden available,” he said. “If you just read the headlines around what’s going on, you might think, there’s all kinds of people who know technology out there.”

Oh if only he knew in January what was to come just four months down the line…

In 2023, there was a great beef between the AICPA and Minnesota that is still ongoing. The TLDR is Minnesota wants to add a second pathway to CPA licensure of 120 units and two years of work experience, the AICPA wants them to not because they refuse to let this 150 thing go. When all the bickering started earlier in the year I was getting some great inside information about the fight behind the scenes and frankly I’m a bit disappointed in the AICPA (they know what I’m talking about).

A lifelong commitment to the profession:

One of these days I’m going to convince an artist to tattoo A = L + E on my knuckles.

I completely forgot this post existed until just now when I was putting this list together. Shortly after it was published, NASBA pulled the entire merchandise section down (though that could be mere coincidence). It’s back now.

How could we forget this gem:

This headline might be my favorite of the whole year. No, it definitely is.

“I Love Accounting. So I Had to Leave” was a great guest post published in May, here’s an excerpt if you’re opposed to clicking on things:

On the comp side, accountants are routinely gaslit about their worth and how much they’ll earn because only a few firms control most of the salaries (which have barely risen in 10 years).

So, with costs rising and an income barely enough to survive on, accountants are naturally thrown into the pressure cooker just to survive.

Ok, fine, fine. We’ll do the tasks, and we’ll take a less-than-fair salary. But buckle up; here comes another train.

Apparently, organizations see accountants as expensive ditch diggers. Whereas if you aren’t constantly doing something and making visible progress, you are stealing time. Forget thinking and processing (the thing we do); You must be fully optimized all the damn time for you to be considered a resource rather than a burden.

And finally, for those brave souls inclined to go above and beyond in completing tasks or finding a way to make them better/faster, your reward is… you guessed it… more work! (Hint: The answer is always more work)

Key findings from Deloitte’s 1,567th survey of the year:

• Workforce well-being is declining, but, in general, employees feel that some executives don’t recognize this. Most employees feel their health worsened or stayed the same last year — only around one-third say their health improved. However, more than 3 in 4 C-suite leaders believe their workforce’s health improved.
• For some, work remains an obstacle to well-being. Eight in 10 respondents are struggling to improve their well-being, with a heavy workload and stressful job topping the list of obstacles they face. The result is that compared to last year, an even greater number of people — 60% of employees, 64% of managers, and 75% of the C-suite — say they’re seriously considering quitting for a job that would better support their well-being.

Sigh.

Hey remember this anti-WFH propaganda shit out by a UK furniture company? They threatened that this is what you’ll look like at 70 if you continue to work from home. How’s everyone doing on the claw hands? Mine are coming along nicely.

I too had to Google delayering after a tipster gave me the details on this particular all-hands call.

I shouldn’t have to explain why this was one of my favorite headlines of 2023.

A man commented on a PCAOB proposal from his iPhone:

A headline like this brings me back to a decade ago when this site was much better than it is now.

Wall Street Journal went really hard on the accountant shortage stuff this year (didn’t we all), really the entire thing is explained by one salary chart they shared in one of their many shortage articles.

To give the dead horses a temporary reprieve I’ve tried to avoid an excess of talent shortage/pipeline articles in this look back on the year but just had to include this one: An article in CPA Journal basically put the shortage on TB4A. Damn you, social media.

Shout-out @TheBig4Tweets in CPA Journal LOL

"The message conveyed is that firms will work you to death with minimal pay increases, there is little long-term career pay-off for the majority of new hires, and the work is mundane and boring." pic.twitter.com/jX9fif7ogJ

— Going Concern (@going_concern) December 4, 2023

And that’s it. Next time we’ll do the most read stories of 2023, fans of news and profanity-free headlines will probably appreciate it.

The post Editor’s Choice: The Least Worst Stories of 2023 appeared first on Going Concern.

Asked about his vocal stance on the importance of firm culture in maintaining professionalism — which includes independence — and if there are any particular cases that make firm culture a priority now, Munter referenced numerous “troubling things” on the cheating front that have happened in recent memory. Specifically:

• “[T]he issue with Deloitte in Canada backdating work papers“
• “[E]xam cheating that we sanctioned Ernst & Young in the US on“
• “[E]xam cheating in other jurisdictions as well: PwC Hong Kong and PwC China just last week with the PCAOB”

He was then asked if he considers the above settlements part of a trend to which he responded, “Someone might characterize each one of these as one-offs, but when you see a number of these happening in close proximity to one another, it’s troubling, and we thought it was an appropriate time to reinforce messaging about the importance of firm culture and that being a question not just with the audit practice, but for the entire firm, and network for that matter.”

Various other cheating issues have popped up around the globe in the last two years. Just a few:

More than 1,200 people at PwC Canada were involved in answer-sharing, either giving or receiving answers. As a result the firm was fined $750,000 by the PCAOB and $200,000 by the Canadian Public Accountability Board in early 2022.

KPMG UK and KPMG Colombia were busted by the PCAOB for answer-sharing (aka “cheating”) in December 2022.

KPMG Australia engaged in widespread answer-sharing from 2016 to 2020, the PCAOB hit them with a $450,000 fine in late 2021.

Everyone would be wise to keep the answer keys on the down-low for the foreseeable future. The SEC is watching.

The post Y’all Probably Need to Cool It on Sharing Exam Answers For the Time Being appeared first on Going Concern.

When millennials began entering the job market at the turn of the century (yes, we’re that old), “dad leave” wasn’t a widespread thing. In fact, dad leave wasn’t a thing at all really until EY became the first Big 4 firm to offer it in 2006 (we think). Of all the things Big 4 deserves criticism for, and there are many, parental leave policies generally aren’t among them. In current year, all four firms offer various forms of leave for moms and dads. Even adoptive ones. Sweet.

There’s a problem though. Given the high-pressure, work-til-you-drop culture of Big 4, many parents don’t want to take the leave available to them. This is especially pronounced among men (duh) and a recent study published in Accounting Horizons dove into why. The sample size is a bit small — two coauthors interviewed 13 actual and former men auditors in three Big 4 and two mid-tier auditing firms — but we all know these baker’s dozen men aren’t uniquely reluctant to take leave.

Here’s the summary from Men’s Experiences of Paternity Leaves in Accounting Firms authored by Claire Garnier (KEDGE Business School), Claudine Mangen (Concordia University), and Edwige Nortier (Université Paris Dauphine-PSL):

Accounting researchers and practitioners have made strides in addressing persistent gender inequalities in the accounting profession. However, these efforts have largely sidestepped men and masculinities. Our study considers the role of men and masculinities in gender inequalities by exploring how men in accounting experience paternity leaves. We conduct interviews with 13 men in audit firms in France. We find that fathers are reluctant to take leaves, which they view as vacation periods incompatible with their professional work. They see audit firms as offering less support to fathers than mothers, with support for fathers growing but still marginal. Finally, they experience a variety of emotions, including positive emotions around fatherhood and negative emotions around difficulties in reconciling fatherhood with professional responsibilities and paternity leaves. Practically, our findings imply that to address gender inequalities further, accounting firms need to change the norms around care work, including paternity leaves.

Well yes, academics, they do indeed need to change the norms just in general, not only as the norms pertain to care work.

Making things worse when it comes to the guys the researchers interviewed, France has generous parental leave policies. Not just at audit firms, everywhere. Europeans’ obnoxious and often unwarranted smugness toward Americans is, in this case, justified.

Benefits in cash (maternity and paternity leave)

• You are paid for medical costs in cash, provided that you stop all forms of paid work.
• If you are a father, you are also paid allowances for paternity leave.
• In the event of adoption, the daily leave allowance may be shared between the father and the mother.

The researchers say that professional service firms (PSFs) in accounting address gender inequalities via schemes like paternity leave (“schemes” in the European way, not what we call schemes in America as in the Crazy Eddie way) and programs such as Women @Deloitte. “These efforts have yielded results, notably in junior positions, which Big 4 firms extensively communicate about,” they wrote. Nice dig at accounting firms’ self-fellating press releases there. “However, gender inequalities remain significant, especially in senior positions. Women represent 19 percent of partners in U.S. Big 4 firms and 10–15 percent of partners in French audit firms.”

The intro continues:

Whereas accounting research has explored gender inequalities from women’s perspectives, it has been less concerned with men. This oversight is problematic, conceptually and practically. Conceptually, gender involves women, men, and nonbinary individuals; understanding and addressing gender inequalities thus requires exploring not just women’s perspectives but also other viewpoints, including those of men. Practically, practices dealing with gender inequalities that focus on women alone are ineffective if men and masculinities are critical for these inequalities yet not considered.

Now hang on, we’re about to get on the dead horse topic of the talent shortage here.

Gender inequalities remain problematic for PSFs: they contribute to employee turnover and discourage younger generations from seeking accounting careers, given their interest in work-life balance. The primary purpose of this study is to unpack men’s experiences of paternity leaves and how these experiences relate to gender inequalities, thus bringing men and masculinities further into the conversation about gender inequalities in accounting. Moreover, the paper aims to provide practical recommendations for mitigating gender inequalities. PSFs face difficulties attracting and retaining employees, including men who do not embrace the culture of overwork. Our findings suggest that addressing this culture requires attention to gender inequalities in care work (e.g., leaves for childcare).

OK cool, we’re getting somewhere.

To date, accounting research on gender inequalities and men remains limited. Accounting PSFs are imbued with masculine cultures that promote the ideal professional as a white, heterosexual, and nondisabled man who is enthusiastic, client-oriented, and flexible, works long hours, and socializes with coworkers outside of the office. This ideal was reinforced during the COVID-19 pandemic. Men are represented and valued as breadwinners; they are financially rewarded for parenthood via the fatherhood bonus, whereas women are portrayed as caregivers, experience a motherhood penalty, and are constructed as fragile.

Interesting reading on the fatherhood bonus and motherhood penalty referenced above here: Career Paths and Compensation for Accounting Graduates. Actually there is a ton of earlier research they’ve referenced in this paper, might be a fun way to waste an afternoon if you’re into academic research.

Although men in PSFs benefit from these privileges, they also face challenges: they can feel powerless to question the professional ideal since adhering to it signals professional commitment to the firm. Instead, they are committed to reproducing and enforcing the rules of the overwork game in which they remain insecure despite their success.

OK so what can be done about it? One suggestion: tone from the top. “Individuals, especially those with power, like partners, can act as role models in enacting and discussing caregiving.” Excellent. What else? “Professional services firms can alter their communications around caregiving and design practices encouraging men to engage in caregiving.” And “human resources departments can integrate more men into policies that balance work and caregiving.”

We leave you with words of wisdom for Big 4 dads contemplating paternity leave written by GC founding editor Caleb Newquist way back in 2014:

Ignore the fear of a “career limiting move.” That job doesn’t love you. Ignore the backwards thinking clowns that will judge you for taking time to learn how to care for a child. Those people are relics and are scared stiff of the responsibility. Ignore your stupid interior monologue that says you shouldn’t have to change diapers, wear a Babybjorn or, gasp, buy a minivan.

Do the right thing and take your paternity leave. All of it.

Men’s Experiences of Paternity Leaves in Accounting Firms [American Accounting Association’s Accounting Horizons]

The post Research: Big 4 Dads Still Aren’t Embracing Paternity Leave appeared first on Going Concern.

All else being equal, those highest on cognitive ability experience a 22% (53.2%) increase in the probability of realism (pessimism) and a 34.8% reduction in optimism compared with those lowest on cognitive ability. This suggests that the negative consequences of an excessively optimistic mindset may, in part, be a side product of the true driver, low cognitive ability.

Looking on the (B)right Side of Life: Cognitive Ability and Miscalibrated Financial Expectations

So basically if you think everything is hunky dory all the time, you’re dumb.

“Forecasting the future with accuracy is difficult and for that reason we night expect those with low cognitive ability to make more errors in judgments, both pessimistic and optimistic. But the results are clear: low cognitive ability leads to more self-flattering biases – people essentially deluding themselves to a degree.” said Dr Chris Dawson of the University’s School of Management. We salute you, Dr Dawson.

Here’s a video from Neuroscience News if you’re short on verbal cognitive ability today because you naively thought it was going to be a good day when you woke up this morning.

Related research:

Go forth and be negative, friends.

The post Science Has Finally Explained Why Accountants Are Good With Numbers: Because They’re Cynical and Negative appeared first on Going Concern.

The message conveyed is that firms will work you to death with minimal pay increases, there is little long-term career pay-off for the majority of new hires, and the work is mundane and boring.

OK, context. The article “What Can the Profession Do?” is predominantly about the profession’s diversity problem and how despite “decades of effort” to diversify accounting programs and CPA firms, Black representation is still low. Great topic and they did a great job laying it all out but should you scroll down, you find a criticism of the overall messaging that deters not only Black students but, well, everyone (see also: Research: Why Students — Particularly Diverse Ones — Aren’t Pursuing Accounting). By “messaging” they mean all the negative things accountants talk about on the internet like “I feel so trapped. I worked so hard in college to still not be able to afford to live comfortably. I hate my job” and “I had a manager last year who had a nervous breakdown and was hospitalized, but was back at work after a week to keep the partner happy and he’s on his way towards another breakdown. It’s not normal.”

TLDR kids are hearing horror stories about accounting on social media and it’s scaring them away.

This is exactly what was said about messaging:

And what if the messaging has some truth to it? What if TB4A has 665,000 followers because the memes are relatable and painfully accurate? There are 428,000 members of the AICPA (as of 2020) which means TB4A beats them out in followers by 237,000 people. What does that say?

Messaging is not the problem. Stop blaming the messengers.

accounting doesn’t have a “marketing” problem

it has a “salary that doesn’t match the hours worked compared to other majors” problem

— TB4A.com (@TheBig4Tweets) November 30, 2023

The post Quote of the Day: ‘The Message Conveyed is That Firms Will Work You to Death with Minimal Pay Increases’ appeared first on Going Concern.

Here’s what the AICPA has found on their quest to pinpoint reasons for the pipeline problem, in Sue’s words:

[T]here’s also a lot of data that we’ve been kind of parsing through to determine other root causes of the talent challenges we’re having. And we’re finding that there are leakage points in a couple of key areas that are kind of driving our focus as part of this initiative. One is in the college to graduation group and about 208,000 on any given year declare an accounting major, but then by the time they graduate, only 50,000 are graduating in accounting. So there’s something going on in that declaration of a major to graduation and university.

AICPA’s Sue Coffey speaking on the Accounting Today podcast episode “A pipeline progress report“

In other words, something’s happening junior/senior year to pivot a lot of willing victims eager students away from accounting and into something else. Something other than Intermediate alone, probably.

Brushing past that, they somehow figured out that people who no more than five years in public accounting are poisoning the well and tales of their negative experiences are echoing down as far as high schools. For every pair of cool accounting professors giving talks at the local high school, you’ve got however many hundreds of comments online contradicting everything the profession’s cheerleaders are saying out on their roadshows.

Another area we’re finding relates to retention and how retention in firms is impacting the beginning of the funnel and the desire for people to come into our profession. And so that one to five year group of professionals that are within a firm and tend to leave within that period and may not have a good experience are impacting what, for example, high school and college students think about our profession and that’s creating pipeline challenges.

This was CSU Monterey Bay professor Shaowen “Sharon” Hua speaking to students at North Salinas High School about why accounting is a pretty good career earlier this year:

“Accounting jobs pay well,” she told them. “Accounting jobs are fun.”

“I have a [former] student who works for Driscoll,” Hua said of the Watsonville-based berry grower. “She travels to England, Singapore and Japan because Driscoll has businesses all over the world.”

“You might work with clients from Pebble Beach, the NBA and Hollywood,” she said. “They have so much money, they don’t know where to put it and you get to service them.”

And this is the other side of the coin, one of the first posts one is greeted by when visiting r/accounting today.

When did you realize that it was time to get out of public accounting?
byu/stanerd inAccounting

The other thing I feel compelled to point out from Sue’s appearance is this. SALARY is a naughty word.

We’ve been talking about the S issue for many, many months now, right? Starting salaries are not where they need to be in our profession, and those young adults and young professionals see more opportunity elsewhere for higher pay.

The S word. I mean, it is obscene how little they pay early-career public accountants, maybe we should have been censoring the S word all along.

The post It’s Official, All the Complaining Is Directly Contributing to the Pipeline Problem appeared first on Going Concern.

We included the following story in this week’s Monday Morning News Brief, including it again in case you missed it. When all this holiday stuff is over we really need to talk about mental health in the profession, it’s been almost four years since Journal of Accountancy put a feature about a CPA with depression on the magazine cover.

Here’s something tremendously boring but relevant: a Deloitte report on Six leader/worker disconnects affecting workplace well-being. The short of it is leaders think the workforce is doing great, the workforce does not.

Wall Street Journal did a long-ass piece on the two recent Big 4 leadership shakeups. A preview:

EY picked Janet Truncale, 53, head of its Americas financial-services business as its new global chair and chief executive last week. Truncale, who rose from being an EY intern to her appointment as the first woman to run a Big Four firm, is a certified public accountant by training with core skills in auditing, accounting and consulting, which will be key to moving the firm beyond the abandoned split of its advisory and audit arms into separate businesses.

Mohamed Kande at PwC charted a different path—as an electrical engineer-turned-consultant—to become PwC’s global advisory head and the first consultant to be global chair, an appointment he received on Oct. 30. A naturalized American who grew up on Africa’s Ivory Coast, Kande, 56, would be the first Black leader to helm a Big Four firm pending member-firm approval.

Both Kande and Truncale are set to start their new jobs on the same day, July 1, an unusual footnote that marks two major leadership changes among the Big Four. PwC and EY’s fiscal years are aligned, unlike the other firms. The appointments represent progress in leadership diversity, following decades of the Big Four primarily having been overseen by white males.

“EY and PwC Diverge in Choice of Global Head,” Wall Street Journal November 21, 2023

Speaking of white males, we’ve heard from a couple people that Tim Ryan was gently forced out of PwC over something to do with diversity? Reach out if you have something to say about the matter. The other side of the story is that he would have made a terrible global leader because of his hardcore view of work and life which is why he gracefully bowed out instead of stepping into Bob Moritz’s shiny shoes. I was going to say “sexy” but objectification isn’t cool. Anyway, here he is talking about diversity to CNN in 2020, unfortunately CNN won’t let me embed the video.

I was going to blockquote parts of this CPA Journal piece on the pipeline but we’re all sick of that topic so forget it, read it if you want.

This has absolutely nothing to do with accounting but this recent Let’s Game It Out video killed me, I just wanted to share.

Hope that’s enough to keep you busy for a bit. If you’re still bored, there are almost 16,000 posts on this website for you to read and some of them are even good (I suggest checking out the 2011-2014ish era). A few of my favorites that I can somehow remember after all these years:

Regarding the post above if you don’t know your profession lore, Rothstein Kass was a decent sized firm and favorite of hedge funds at the center of a juicy merger rumor in 2014. Accounting Today even jumped into the fray, no doubt trying to get a piece of the buzz we were whipping up with gossip at the time. Rothstein Kass leadership swore up and down they weren’t for sale and CEO Steve Kass even denounced the rumors suggesting that they were manufactured by his enemies trying to put a stain on his firm (he famously said in an internal letter to staff the rumors were “started or perpetuated by competitors who don’t want to compete with us on a level playing field and recruiters who use the rumors to create opportunity.”). Anyway, KPMG acquired them as the prophesy foretold.

And probably one of my favorite posts of all time:

Hope that’s enough stupid news to keep you stuffed on this fine Thanksgiving. Gimme a holla if you have an interesting story or link, like many of you I’m fundamentally unable to disconnect from work and will be checking emails and texts (tipline: 202-505-8885). Though I do it at the table while giving Kevin the evil eye because fuck that guy. Happy Thanksgiving!

The post Here Are Some Things to Read If You’re Hiding Out From Your Family Today appeared first on Going Concern.

Of the finance and accounting sector the report says:

In a field known for ‘churn and burn,’ last year was one for the record books with higher job turnover than in any other three-year period. Those now settled into new jobs are not in a hurry to leave. A turbulent economy plus healthy compensation packages over the past few years have decreased the pool of candidates and increased the competition for talent.

As employers continue to face a tight job market, they will need to take a closer look at their compensation packages and be prepared for counter offers. Beyond salary levels, evaluate what creative work/life balance and benefits may entice candidates from paid paternity leave to on-site daycare or more flexible vacation packages.

And:

Despite a complex economy that requires more guidance from financial and accounting professionals, there’s a serious talent shortage that’s going to worsen in the next few years. While 75% of CPA’s reached retirement age in 2020, the good news is that finance and accounting are now ranking as top career choices among Gen Z candidates.

Say what now? Whatever, moving on…

Recruiting for these positions goes beyond attractive compensation packages to revisiting upskilling of in-house teams as well as more focus on under qualified candidates who have potential but require training and certifications. Employers will need to reward employees who earn CPAs, CFAs, and CFPs or risk losing them to competitors. Many companies also expect to increase outsourcing to fill the gaps.

Now that you bravely skimmed four entire paragraphs of icky words, here are national average salaries for various accounting positions according to the report.

There are a few more operational and lower level roles in the report such as Bookkeeper ($51,989) and Data Entry Specialist ($41,020), let’s go ahead and skip those.

The report also offers a comparison of accounting function roles and average salaries in Atlanta, Austin, Boston, Charlotte. The most lucrative of these is being a CFO in Boston ($302,309 versus national average of $261,739). The worst is being a data entry specialist…anywhere. To keep things simple, we’ll stick to the tax and audit roles.

Thoughts, feelings, complaints, and accusations of inaccuracy are welcome in the comments.

The post Here Are Even More 2024 Accounting Salary Projections appeared first on Going Concern.

For “Broader career paths attract accountancy talent” ICAEW spoke to Michael Smets, Professor of Management at University of Oxford’s Saïd Business School, an expert of sorts who’s dedicated two decades of his life to observing, analyzing, and advising professional service firms (and also has a cool George Michael circa Faith era beard).

He talks about how the current model is broken, how certain people with exceptional technical skill may fall short in the checklist of things that make a good partner like relationship building and bringing in business, and how professional services firms could retain more talent if they didn’t operate a caste system whereupon partner-type partners sit at the top. On director roles he says: “What that has implicitly done is relegated all other contributions to the firm to inferior or second rank. In the words of one research participant who had just been promoted to director level, ‘my business card might as well say, not partner’.”

Most of note in the post is this part:

“One of the key problems for professional service firms is that many associates simply no longer want to make partner. And if the major carrot you’re dangling in front of everybody’s nose suddenly doesn’t seem so appetizing any more, you need to think very hard about what motivates people to deliver the kind of work that is expected of them.

“That career typically means very long hours, lots of personal sacrifices, typically a poor work/life balance. I hear time and again from senior associates: ‘Why should I work so hard only to get permission to work even harder?’ Does everyone have to become a partner? Does everyone have to become a leader? Or is there a place for technical experts to remain in the firm even if they don’t step into a revenue-generation business development-type role?”

So we know the traditional partner carrot doesn’t work, you can’t string someone along with the promise of one day being a thing they don’t want to be. And as much as “human capital” thought leaders throughout the profession love to convince themselves that conveying a higher purpose is key to motivating the younger generation to sacrifice their best years for the greater good, real or imagined “purpose” clearly isn’t working right now either. If only there were some effective way to motivate people hmm…

We’ll leave you with this to chew on should any leaders be reading this:

The symbiotic relationship between the different roles is the key to success, Smets explains. “You can have a business that wins a lot of business but if no one is there to deliver the projects, you won’t have any client retention. If you have great leadership and great execution but nobody wins new business, you’re going to be very profitable for a very short period of time, and then you’re likely to go under or be acquired. And if you have partners who deliver very well or generate business very well but there is no leadership, you will degenerate into a mercenary set of personal siloed fiefdoms.”

Sounding a little too familiar these days.

Broader career paths attract accountancy talent [ICAEW Insights]

The post Senior Associates Ask: ‘Why Should I Work So Hard Only to Get Permission to Work Even Harder?’ appeared first on Going Concern.

We don’t have all day so let’s look at the main points:

• Survey respondents in the 18-to-38-year-old age cohort, who experienced the highest turnover rates (39%) in the past 24 months, are most likely (26%) to leave their current employer in the next 12 months. Furthermore, as many as 8% of them are considering leaving the accounting and finance profession in the next 12 months.
• Approximately 30% of those who intended to leave their current employers in the next 12 months expressed dissatisfaction with their work and co-workers. They were also five times more likely than those intending to stay to feel disengaged at work.
• Career advancement concerns significantly influence respondents’ decision to leave their employer or the profession. Those with the intention to leave were nearly three times more likely to cite that they do not expect to advance in their organization.
• Professionals intending to leave their employers, or the profession, were four times more likely to highlight the absence of a strong sense of belonging within their organizations.

It’s too bad they didn’t break the 18-38 group down further, would be nice to see the difference between early career professionals and manager level where talent is more scarce. Here’s turnover anyway:

Almost half of remote workers surveyed had left their employer voluntarily in the past 24 months (47%) compared to 26 percent of hybrid workers and 23 percent of on-site.

Overall job satisfaction isn’t too bad; 87.14 percent of respondents said they are satisfied with the work they are required to perform, 86.48 percent are satisfied with their coworkers, and 78.44 percent are satisfied with their supervisors.

Of note, 79 percent of accounting and finance professionals intending to stay with their employer reported receiving outstanding perks on the job. So employers should probably make sure that’s taken care of first before they go firing all the bad managers.

The study goes on to cover workplace flexibility, sense of belonging, and engagement. We’ll include that last one just to point out that engagement and resulting disengagement from overwork aren’t making people leave the profession as strongly as bad management is.

Lastly, a few choice quotes they got from professionals who intend to leave their employer or the profession completely. There are four pages of this in the report.

“If I decide to leave, it’s due to narcissistic management, lack of hybrid work offerings, low pay, limited benefits, inflexibility, unfriendly staff, no advancement opportunities, no work-life balance, excessive overtime, and being contacted outside of working hours.”

“The compensation is low given the number of hours required, especially when compared to fields like IT.”

“There is a noticeable lack of opportunities for meaningful advancement.”

“I’m at the age of retirement, and reflecting on it, choosing accounting as a career hasn’t been fruitful for me. If given another chance, I wouldn’t pursue a CPA designation.”

“I dislike the work, and my manager is incompetent and unreasonably demanding without understanding what he’s asking for.”

“First and foremost, there’s the unfair treatment, bias, and weak leadership competence. The line between ethics and morals is razor-thin, and leadership positions are given by the board or influential people. I won’t compromise my morals for an underpaid job.”

“There’s a lot of politics in my organization I don’t agree with. Many employees, including me, are taken advantage of. Despite good pay, the disparity between favored employees and those who drive the company is huge. When things work based on my insights, others get the pay and bonuses, while I work long hours.”

“I can’t maintain 65-hour workweeks. The impact on my health from such demands is due to poor leadership.”

“Being perpetually short-staffed means taking on more duties and working extra unpaid hours, affecting my work-life balance.”

“The pay is low for the amount of work, and the commute is far from my residence.”

“If opportunities for better pay or more engaging work arise, or if I can pursue my passion for politics, I might leave. Pay is a growing concern, especially with rising costs and student loans.”

“Micromanagement is rampant with the new COO, and the pay in accounting is not fair compared to the rest of the organization.”

“The environment is stressful due to long hours. Hiring competent newcomers is lacking, resulting in more pressure on the veterans.”

“The pay doesn’t justify the 24/7 availability they demand. The firm’s reluctance to hire or invest in workload-reducing technology is concerning. There’s also a mismatch between the firm’s DE&I values and some client beliefs.”

“Leadership is lacking, and we’re often understaffed to save money. This leads to long work hours and more tasks. The focus is more on closing books quickly than accuracy. I’m burned out and even considering leaving the profession.”

“The general challenges with the CPA profession combined with the firm’s push to return to the office instead of promoting remote work are problematic.”

“I recently quit a high-paying tax job. The documentation was poor, feedback was demoralizing, and timelines were tight.”

“Public accounting’s long hours don’t feel worth the pay, especially without overtime. The reward structure benefits partners more.”

“High staff turnover at lower levels leaves more work for management.”

“The hours are long and unreasonable. I’m in my 40s, financially secure, and ready for a change. The CPA profession is stressful.”

“The CPA profession hasn’t advocated for its members’ better working conditions. While new standards are being introduced, the core issue of limited tools remains unaddressed.”

“I don’t believe the industry is set up for long-term success. The demands on young staff, coupled with unrealistic work-life balances, lead to early-career burnout.”

“I left the profession due to the low pay, excessive work hours, and the overall negative atmosphere among my coworkers.”

And let’s end with this one:

“I struggle to see the benefits of the work and often disagree with our direction. We’re responsible for our own talent shortage, and we seem trapped in our ways.”

Sounds about right.

Talent Retention in the U.S. Accounting and Finance Profession [IMA and Robert Half]

The post Accountants on Why They’re Leaving: ‘The Hours Are Long and Unreasonable, Compensation Is Low’ appeared first on Going Concern.

The phys.org write up is titled:

Accounting is facing a labor crisis. Could fraud be part of the solution?

OMG they’re serious. And it says:

Expert concerns of a potential rise in financial fraud with fewer accounting professionals in the field notwithstanding, fraud plays a surprising role in the accounting labor force, according to new research from the University of Florida.

“Research to date suggests that financial fraud can have damaging consequences, like increased criminal activity as well as reduced trust and participation in capital markets,” said Assistant Professor Robert Carnes. “Insights from these studies imply that fraud would create a negative stigma around the labor market for all business fields, and accounting in particular, but we find the opposite.”

Carnes, along with co-authors Paul Madsen of the University of Florida and Dane Christensen of the University of Oregon, find that incoming students are actually more likely to major in accounting when local frauds occur during their formative years. Specifically, the researchers find a 4% increase in the likelihood of majoring in accounting when local financial frauds are covered by the news media during students’ formative high-school years.

“This size effect is modest,” Carnes explained. “But we view it as meaningful because it suggests that fraud does not harm the flow of students into the accounting major, but rather it attracts more students.”

The abstract explains further (emphasis ours):

Financial statement fraud generates many negative effects, including reducing people’s willingness to participate in the stock market. If it also stigmatizes accounting, it may similarly adversely affect the quantity and quality of workers willing to become accountants, thereby potentially creating negative effects for years to come. We examine the impact of fraud on the labor force entering the accounting profession, which is a key input into the production of accounting information (i.e., the output). Using data describing millions of college students across the United States, we find incoming students are actually more likely to major in accounting when local frauds occur during their formative years. These students are also more likely to have attributes desired by the accounting profession (e.g., high academic aptitude) and are more likely to subsequently serve in public accounting and become Certified Public Accountants. In the context of other fields (i.e., all college majors), we find that fraud similarly spurs interest in other business disciplines, but not in majors outside of business schools. Those attracted to other business disciplines, however, generally possess different traits. Specifically, students entering accounting are distinctively more likely to exhibit values espoused by the accounting profession, including a predisposition to public service and less commercial orientation. Thus, nonpecuniary motives appear to uniquely drive accounting student enrollment following fraud. Collectively, our findings suggest that, while fraud is unmistakably bad, it appears to have the positive unintended consequence of attracting labor into business disciplines and, in accounting, increasing the prevalence of desirable traits among entrants.

Well clearly there have to be some nonpecuniary motives at work otherwise accounting graduate numbers would be even lower than they already are.

The data also suggests that accounting graduates with higher rates of fraud exposure in high school are more likely to work in public accounting, work for a Big 4 firm, and become CPAs. So get to frauding, people!

The post Who Had ‘Do More Fraud’ on Their Things That Could Save the Accounting Profession Bingo Card? appeared first on Going Concern.

Says the AICPA, bachelor’s degree completions in accounting dropped 7.8% from 2021–2022 after steady decline of 1-3% per year since 2015–16. Master’s degree completions also fell in 2021–2022 (-6.4%) but the percentage decline is significantly less than in 2019–20.

65,035 total accounting degrees completed for 2021-22. So 3,964 fewer bachelor’s and 1,246 fewer master’s for a total of 5,480. Since accounting graduate numbers peaked in 15-16, here’s the difference by year compared to prior year. As always, accountants are encouraged to audit the math:

• 2016-17: 1,336
• 2017-18: 394
• 2018-19: 2,204
• 2019-20: 3,391
• 2020-21: 2,408
• 2021-22: 5,480

Comparing the latest report to 2015-16 that’s 14,819 fewer BS and MS degrees for 2021-22.

Anyway, while we crunch some numbers and work up some obnoxiously snarky observations on the 2023 Trends report, you can catch up on where we were when the 2021 report was released in early 2022: State of the Accounting Profession 2022 Via the AICPA Trends Report

The post The 2023 AICPA Trends Report Shows Things Are Looking Up For Accounting Grad Numbers! JK They Suck appeared first on Going Concern.

The Illinois CPA Society (ICPAS), in partnership with the Center for Accounting Transformation (the Center) and other stakeholders, has launched a survey to figure out why modern day accounting students and professionals are so uninterested in pursuing the CPA credential. ICPAS tackled the issue before in 2020’s A CPA Pipeline Report: Decoding the Decline but things have changed since then and young people who graduated into the pandemic may have unique perspectives. Or it will just be the same perspectives and the profession will have more data points echoing them. The new findings will be published and shared to bring awareness of, and renew focus on, the most relevant and effective strategies to promote the CPA credential and ensure its sustainability and relevance moving forward, said ICPAS in a press release.

They also said:

A key focus of this survey is to understand why a growing number of accounting students and young professionals in accounting and finance careers don’t finish the CPA exam or elect to never take it at all. Accounting and finance students and professionals under the age of 35, with and without the CPA credential, are encouraged to complete the survey. The organizing partners also encourage all accounting and finance professionals to share the survey link with those they know in the target audience.

The responses are anticipated to reveal recent trends and key issues that will arm CPA profession leaders and stakeholders with a deeper understanding of the current perceptions of the profession, the decision-making process regarding pursuing or not pursuing the CPA credential, and the perceived value and relevance it holds today.

“The profession is aligning on the approaches necessary to help stem the tide and ultimately reverse the negative CPA talent pipeline trend we’re collectively facing,” says Geoffrey Brown, CAE, ICPAS president and CEO. “While there’s more research than ever on this topic, interest continues to be high in learning more about the perceived barriers deterring prospective CPAs from ever pursuing the credential. A lot has happened in the three years since our last survey was issued, which is why we were compelled to partner with influential stakeholders across the country to garner a fresh look.”

Survey here, it takes about 10 minutes to complete and you have until December 15, 2023 to do so.

The post Students and Professionals Under Age 35 Are Invited to Take This Pipeline Survey appeared first on Going Concern.

From “Why No One’s Going Into Accounting” published today by Wall Street Journal. There’s your answer.

The post Fun Chart of the Day: Well F*ck Accountants Then I Guess appeared first on Going Concern.

“I always do an icebreaker at every start of every meeting,” says Golden, adding that, “an easy one is, ‘you have 30 seconds, go grab something, no matter where you are, and you have to come back and in less than 30 seconds, you have to tell us why you grabbed it.’”

This also helps people disconnect and get some blood flowing in their brains and bodies, and puts “an ease to solving some of the challenges that you’re solving in that 30 minutes,” she says.

Appropriate Twitter response:

*grabs resignation letter*

— Monero Matteo (@moneromatteo) September 29, 2023

Well she’s on Make It again and this time she’s offering up a tip on how to make your resume stand out among the pack:

personality

“I think when the resume can exude some personality is the most eye catching to me,” she said.

Other than using crayons to create it how exactly does one zhuzh a resume up with personality?

Listing the multiple languages you speak or including that you’ve “traveled around the world 17 times,” says Golden, are examples of what can round you out on your resume. You could include athletic or artistic accomplishments as well. And volunteer work is effective because “you’re there because you love it,” she says. “You’re not there because you were told to do it and I think that actually says a lot, too, about your personality.”

You could also “think about what makes you happy and what you want from that job and put it in a sentence,” she says. She gives the example of her own job and the kind of thing she could say to describe her passion for it. Why does she want to be in innovation?

“I really want to solve really hard problems,” she says. “I’m really good at solving really hard problems.”

Now you could put these under “Interests” somewhere at the bottom of your resume but that’s not what she advises:

But Golden would advocate for putting those pieces even higher up. “Put the good nugget at the top of the resume,” she says. You could include a line about your passions in a professional summary, for example.

Remember, complaining about your job on Reddit is not a passion.

The post Deloitte Exec With a Stupid Title Has a Tip to Make Your Resume Stand Out appeared first on Going Concern.

The New York resident found accounting work monotonous, with little room for creativity or growth, and maximum salaries weren’t as high as he would have liked.

“The job security and the ability to have a comfortable life motivated me at first,” said Khokhar, who served as a senior accountant at two construction firms and senior auditor at an accounting firm. “But once I started, had some work and life experience, I realized there are better options out there.”

Khokhar earlier this year joined JPMorgan Chase as a treasury sales associate in its commercial real-estate banking division.

Then just for fun WSJ kicks the profession while it’s down and adds an organized list of downsides of a career in accounting recognized for years by students, academics, Xitter users, and washed-up accounting blogs:

The 30-year-old isn’t alone in his discontent with the industry. Accountants have long been viewed by people in the profession as underpaid and undervalued compared with positions in tech and banking. Now the foot soldiers of the profession are leaving the field in droves. Accountants cite low salaries, mundane tasks, burnout and the threat of new technology like generative AI as reasons for considering other industries.

Up until now, most accountant shortage discussion has been focused on students choosing other fields, CPA exam numbers lower than they’ve been in almost two decades, and boomers retiring from accounting en masse. That last one was the first sign a shortage was coming down the road, mentioned here by the Illinois CPA Society back in 2017:

An impending mass exodus of CPAs over the next 15 years is the most obvious contributor to shrinking CPA numbers. The AICPA often cites that the large pool of retiring Baby Boomers will leave a gaping hole in the supply of experienced CPAs.”

Statistics from the AICPA suggest that 75 percent of current CPAs will retire in the next 15 years, leaving a huge vacuum in the industry.

The AICPA cited that figure in this 2015 exposure draft [PDF] about adding a “retired” CPA designation to the Uniform Accountancy Act. Perhaps there are earlier mentions of the boomer exodus, I don’t feel like digging them up. All that to say, it was no big surprise there would be a vacuum to fill yet it’s only in the last two or so years the hand-wringing began.

Here’s what’s concerning and what makes this particular accountant shortage article different from the thousand others that have come before it. WSJ backs up Omar’s anecdote with hard evidence from Live Data that shows existing accountants are dipping out at the level where they really know their stuff and making their way to other fields. So the dry pipeline isn’t the only problem, there’s a building knowledge vacuum too.

Former accountants have largely moved to nonaccounting roles in finance, as well as working as financial analysts or in business operations, human resources and banking, according to employment data provider Live Data Technologies.

A greater percentage of accountants are leaving the profession later in their careers now than in years past. About 82% of workers who exited accounting this year through Sept. 1 had at least six years’ experience, up from 77% and 71% in full years 2022 and 2021 respectively, Live Data said.

The average tenure and age of accountants are increasing, meaning that any given exit is likely to be someone with a longer tenure, said Jason Saltzman, director of growth at Live Data.

The article also mentions a 28-year-old sole practitioner who’s getting out because “the work is often tedious and he doesn’t feel as if he’s making a difference in his clients’ lives,” a 33-year-old tax accountant who says “she feels overworked year-round,” and a 32-year-old senior accountant with her CPA who’s thinking of going to nursing school “because that career likely would yield more meaningful work and potentially a better work-life balance.” Said the sole practitioner, who graduated in 2019, “There are good things about the profession. It’s just that some of the negatives are so negative sometimes, it’s hard to always dwell on the positive.” We tried dwelling on the positive once, traffic plummeted.

It wasn’t even a year ago that WSJ wrote about the shortage and got a quote from someone at Robert Half who suggested a recession would fix the talent problem right up:

In a downturn, students tend to gravitate toward degrees in accounting and finance because they are considered more stable career paths than, for example, marketing and communications.

And yeah, that is what happens when the economy gets bad. We observed it in 2008 and the tough years that followed. Predictable patterns based on past experience can’t be counted on though, as Surgent VP Liz Kolar explained in this guest post she did for us last month: CPA Exam Changes and Pipeline Woes Are a Perfect Storm of Problems For the Profession. With a huge CPA exam change just a few months away, CPA review companies should be seeing a large number of people rushing to get the exam over with before the change. They aren’t. Here’s Liz:

Unless you’ve been living under a rock, you’re likely aware that the accounting profession is experiencing two simultaneous massive shocks.

These shocks (of our own making) are the collapse of the CPA candidate pipeline and launch of the CPA Evolution, the largest change to the CPA exam since the exam went digital nearly 20 years ago. Of course, exam computerization came after current partners had to walk uphill in the snow both ways to make it to and from the client site. Cue the violins.

Many of the discussions about these shocks have come in a vacuum, mentioning either the pipeline collapse or CPA Evolution, but the two are as connected as they’ve ever been. I’ve seen several major changes to the CPA exam throughout my career as a practicing accountant, university professor and exam prep instructor: 1994 – the exam was shortened from 19.5 hours to 15.5 hours; 2004 – the exam went from a paper and pencil exam to a computerized exam; 2011 – the first Computer-Based Testing Evolution (CBT-e) was enacted and the task-based simulation format was introduced; 2017 – higher order skill testing was introduced; and 2018 – Excel was added as a tool, along with a new user experience. Now, we’re facing the CPA Evolution’s arrival in 2024. Typically, each major change is accompanied by a tsunami of candidates rushing to test before the change takes effect and is followed by a drought of candidates signing up to test immediately after the new exam changes go live. We’re seeing more of a ripple than a tsunami this year and could be in for a massive drought in 2024 and 2025.

So that’s where we’re at. Job security isn’t keeping people in the profession and a big scary CPA exam change isn’t compelling graduates to flock to the current exam. Can’t wait to see the 2023 AICPA Trends report.

Job Security Isn’t Enough to Keep Many Accountants From Quitting [WSJ]

The post Now the Profession Is Losing Experienced Accountants Too appeared first on Going Concern.

“Right now, Gen Z is particularly important as the newest generation of consumers, employees and citizens that will dramatically impact businesses today and into the future,” said Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader. “Our research has consistently found that mental health is an ongoing challenge for Gen Z. As the generation moves into our prime workforce and consumer markets, several shifts are happening simultaneously. The oldest Gen Z are aging out of their parents’ health care plans this year, and they are feeling the impact of financial independence amid economic uncertainty. These factors are shaping their views of work and life and what success looks like.”

Placing importance on making money has consistently increased year-over-year, 46% of respondents said it was a top priority in the 2023 survey compared with 32% in 2021 and 38% in 2019.

Among the financial fears for Gen Z are (quoted directly from EY’s press release and the report):

• More than a third (39%) said they are very or extremely stressed or worried about making the wrong choices with their money.
• 69% rate their current financial situation as only “fair” or worse, with 32% rating their current finances as poor or very poor.
• Gen Z normalizes working multiple jobs to hedge their bets against the future by preparing well now. Nearly two-thirds (65%) of Gen Z were employed in a part-time or full-time job last year, while 56% earned money from freelance or “side hustle” work. Moreover, 39% of Gen Z earned money working both a job and a side hustle. This pragmatic need to get ahead by whatever means necessary is changing how they view work, how they approach savings, and when and how they choose to spend their money.
• While they are concerned about having enough money, they are less focused on having a lot. Compared to millennials at a similar age, Gen Z teens in 2021 were less likely to believe that they will become rich in the future (63% and 51%, respectively).

To that last point, it’s not that they are less focused on having a lot, it’s that they’ve seen what happened to millennials and have accepted their fate. They figured out earlier than we did that things like home ownership and being able to provide for a family on a single income are relics of the past except for a select few in well-paid careers.

Huh, things must have changed drastically between 2021 and now because this is how this survey looked the last time EY did it:

They tried to pull this crap on millennials too, claiming we valued purpose above all else when we started hitting the job market in the early 2000s and continuing to suggest it’s a critical motivator for us today. Purpose is nice but let’s be real, if it was that important, we’d all be working at non-profits.

Also from the 2021 report:

Cap.

Again, it is more likely anxiety-riddled Gen Z is too worried about their current financial situation and how that relates to the economy and job market to fantasize about making a lot of money. Here’s where they’re at in 2023:

“With inflation surging to its highest level since the early 1980s, Gen Z is experiencing unprecedented prices increased against most goods and services categories, and wage growth is only now starting to outpace inflation, so that wages adjusted for inflation have essentially stagnated over the past four years,” said Gregory Daco, EY-Parthenon Chief Economist, Strategy and Transactions.

Understandably, Zoomers are anxious in general. Aren’t we all. The 2019 and 2021 surveys called out stress and anxiety as “a hallmark of this generation,” now it’s even higher.

Almost half of Gen Z (47%) respondents report excessive anxiety or worry that is difficult to control on an ongoing basis. Said EY in the 2021 survey [PDF]:

They live in a constant state of overwhelm. They are admittedly high-stress, anxiety-ridden and untrusting of the world around them.

Now, 54% of Gen Z said they were moderately, very or extremely worried across a variety of topics, up from 46% in 2021 and 30% in 2019.

This is depressing, I’m gonna wrap it up. You can read the full report here (PDF).

The post EY Survey: Gen Z Is Broke, Anxious, and Extremely Worried About Everything. We Can’t Blame Them appeared first on Going Concern.

The AICPA announced the formation of a National Pipeline Advisory Group, published an article about its focus on the accounting talent shortage, and scheduled a webinar titled “Special Pipeline Series: Path to 150.” All of this happened after the Center for Audit Quality (CAQ) released its study titled “Increasing Diversity in the Accounting Profession Pipeline.” I previously wrote about this CAQ diversity study and I have been watching for the AICPA to acknowledge its existence. I have yet to see it.

Why is the AICPA ignoring a study that provides insight on an issue the AICPA has been trying to address since the mid-1960s? From 2008 to 2011, I served on the AICPA’s Minority Initiatives Committee and learned the history of various initiatives. Yet, the AICPA is ignoring a sound study that identifies root causes for the lack of diversity in the profession pipeline.

Maybe the study shows something the AICPA and NASBA do not want known. That is, the 150-hour rule has a disproportionate effect on underrepresented minorities. Those arguing to keep some version (any version – no matter how watered down) of the 150-hour rule will not consider other points of view.

The CAQ surveyed 1399 undergraduate business students with 35% identifying as Black/African American and 33% identifying as Hispanic. Black and Hispanic students change majors during college at a higher rate than other students. Overall, 40% of non-accounting majors considered majoring in accounting, and the percentage is higher among Black and Hispanic business students at 50% and 48%, respectively. Given such a high percentage considered majoring in accounting, it is important to understand why they ultimately decided against it. There are many reasons; please read the study.

Relevant to this commentary, is that 56% of White students who decided against accounting as a major identified not wanting to pursue 150 hours to become a CPA as a reason. This percentage jumps to 64% and 70% for Black and Hispanic students, respectively. Data show the 150-hour rule is a barrier and it is more of a barrier for Black and Hispanic students than for White students.

Rather than removing the barrier, some professional associations propose alternative paths to obtain the 150 hours. Those paths, however, may be a way to keep down those from humble beginnings.

Academic research finds no value in a 150-hour rule. Conversely, it demonstrates the value of a master’s degree. Dr. John Barrios found those with a master’s degree are more likely to be employed by a Big N firm, spend less time at each position, have more jobs, and are promoted more quickly. Dr. Alisa Brink and her coauthors found that individuals obtaining a 150-hour bachelor’s degree compare unfavorably to those who obtain a graduate degree in the likelihood of promotion from Senior Manager to Partner. The Experience, Learn and Earn (ELE) program created by the AICPA and promoted by NASBA falls in the 150-hour bachelor’s program category. ELE students do not earn a graduate degree.

A master’s degree is the most valuable way to meet the 150-hour rule. Students with the means to pursue this path will continue to do so. For those students without the means, less-valuable paths are available and ELE is yet another one. That less-valuable path may just “keep you in your place” – with more time in your position and a slower promotion track. Is that really what we want? The decision to keep a 150-hour rule where NO research demonstrates it has value is making our lack of diversity more pronounced.

If you believe that the CPA profession can be a life-changing choice for individuals, particularly those who come from humble beginnings and are willing to learn, work hard, and improve their communities, remove the 150-hour barrier.

The post Keeping the 150 Hour Rule Is Making the Profession’s Diversity Problem More Pronounced appeared first on Going Concern.

To summarize most of the article: barrier to entry, US workforce hemorrhaged 334,000 accountants and auditors in two years, pipeline pipeline pipeline, blah blah. Scrolling down we get to the important bit:

First-year audit associates can expect to earn $59,000 on average this year, up from previous years, while entry-level corporate accountants can bring in $65,500 on average, according to Robert Half salary data.

Wages rose quickly in the last two years, although growth has slowed this year, Britton said.

Companies, not just CPA firms, are struggling to fill senior accountant roles and jobs for accountants with three to five years of experience. The staffing shortage has driven up market rates, pushing typical salaries for senior accountants to $100,000, said Frances Moreno, managing partner of staffing firm Vaco’s Los Angeles office.

Despite recent pay increases, salaries haven’t kept up with the high cost of college tuition and wages for roles in competing fields such as finance, data analysis, or computer science.

Surgent’s Castonguay dismissed the recent raises, calling them a “temporary blip, not a correction.”

“How you improve the brand is by improving the work experience,” he said. “That’s getting rid of the 150 hours so people come into the profession, and paying them more.”

Professor Castonguay isn’t getting invited to any AICPA dinners any time soon.

Over at Financial Times, Stephen Foley delivered his own article on the pipeline topic, this one packed with juicy quotes from various Chicken Littles* warning that the sky is falling. Except it actually is and by the time the king does something about it, it will probably be too late.

Here’s Bob Cedergren, chair of the Minnesota Society of CPAs:

“The Deloittes and PwCs of the world have the masses, they have offices everywhere and the ability to draw on overseas talent,” he said. “We needed to take some action.”

And Julie Blaha, Minnesota state auditor:

“This is now a severe shortage, and it is causing a tsunami of problems. It’s a shallow pool, and we have to do something about the leak.”

And some Big 4 people who didn’t want to be named:

“The 150-hour rule has prevented many talented folks from joining the profession,” said one Big Four audit executive. “The cost of an extra year of school is prohibitive and isn’t necessary to succeed in public accounting, or business in general.”

At another Big Four firm, one executive pointed out that many states do not require that courses taken in the fifth year of education have anything to do with accounting. A senior partner involved in recruiting there asked: “Is there an alternative, such as learning on the job, which is as good as or better than learning in the classroom?”

Representing the king is longtime Going Concern favorite Sue Coffey (hey Sue, I know you are reading this ) of the AICPA:

[She] said having the equivalent of five years of higher education remains a good idea, and removing the requirement is no silver bullet for dealing with a talent shortage. It took about two decades of work to align all 50 US states around the current standards and get agreement to recognise each other’s licences, and trying to repeat the feat looks daunting.

“What exists is a very delicate system of agreement and trust,” she said. “This has been my challenge with Minnesota. It just takes one to upset the applecart and that could upend mobility across the country.”

Alright so if the profession can’t agree on 150 that leaves salaries as the next problem in need of solving. That one should be easy.

*I did not intend to imply any of the people quoted in this article are “yo-yo wielding simpletons“

The post 150 Hour Rule: Let’s Keep Arguing About What Color the Drapes Should Be While the House is Burning Down appeared first on Going Concern.

Anyway, enough with the corny shit. When this opinion piece popped up in my Google News I was hoping for a refreshing take on the benefits of accounting as a career and some passionate cheerleading. Maybe a field report from some young, enthusiastic former partner who started in public and ended up controller at a cool startup or doing taxes for NBA stars or something. Perhaps finally some common misconceptions would be smashed!

Nah.

Accounting is a field with high demand, and successful accounting students are virtually guaranteed employment upon (or even prior to) graduation. I’m involved in recruiting for one of the largest accounting firms in Connecticut. When I talk to students about their biggest concerns in pursuing an accounting degree and a career in public accounting, they typically point to four misconceptions: lack of work-life balance, the difficulty of the CPA exam, lower pay compared to other financial career paths, and lack of excitement in the work.

Each of these objections is based on a misunderstanding of what a public accounting career is really like in 2023.

With all due respect, sir, these are not misconceptions. Pretending as if they are does a great disservice to young people and is part of the reason why the younguns have issued a collective “fuck that” when it comes to accounting. It depends on the firm of course but given that professors across accounting departments everywhere urge students to go into public accounting (miserly Big 4 firms in particular) with the threat of a pathetic career doing taxes in a strip mall for the rest of your life if you don’t, we need to be honest about starting salaries at public accounting firms. Yes, accountants have incredible lifetime earning potential. Fact. Yes, CPAs do even better over a lifetime. Fact. Good luck selling that to a 22-year-old kid with data analytics skills who can make buckets more money out of the gate in a different field when there’s a cost of living crisis.

The disappointment only grows from there. Here’s his take on work-life balance:

In accounting, finding balance is a matter of weighing the value of hard work and career progression. You get out of the job what you put into it. But the job doesn’t have to include excessive overtime hours every January through April. There’s been a shift in expectations in the industry — while you may be asked to work some overtime during the busier times, you have more flexibility around your schedule to accommodate other events in your life.

“You get out of the job what you put into it” compelled me to Google this guy, you can imagine my shock when I found a young Gen Xer and not an old man who had to walk to the uphill both ways in the snow to sit for all four parts of the CPA exam on a hard chair in a cattle barn on the Indiana State Fair Grounds over two days.

Way to minimize the reality for countless public accountants. Some of them are working more than ever due to firms being short-staffed, the offshore teams have it even worse. This claim is disingenuous at best, he should have stuck to the “yeah you have to pay your dues early on but it pays off as you advance up the ladder” pitch. Is there greater flexibility these days? Sure. Because people started quitting en masse if they couldn’t get it. It shouldn’t have taken a worldwide pandemic for firms to start letting people pick their kids up from school in the afternoon and finish their work from home later in the evening. Do many government and industry accountants have it better? Yep. Could have led with that, at least that’s mostly factual. And a big reason why so many accounting grads are bypassing public completely and going straight to industry or sticking to the more progressive tech-focused small firms. Let’s not lump them in with the public accounting meat grinder.

Moving on. The CPA exam is hard. Fact. Much like the ritual beating one must endure to gain lifetime membership into a street gang, it is at its core a test of one’s dedication to the profession with a test of entry-level knowledge secondary to that. “The path to becoming a CPA is challenging, but doable if approached strategically,” he says. Well obviously. If it wasn’t doable, no one would do it. Increasingly, they aren’t. This is a value proposition problem and as of now, the profession has not done a good enough job demonstrating value, something you’d think a bunch of accountants would excel at (no pun).

It’s true that becoming a CPA takes effort and dedication. A fifth year of college is generally required (to obtain the 150 credit hours required to become a CPA) even if you’re not getting a master’s degree in accounting.

Also, the CPA exam is hard. Only about 20 percent of candidates pass all four sections on the first try — a lower pass rate than the bar. But you don’t have to take all four parts at once, and the rates for passing each section are much higher, about 50 percent. As the AICPA points out on its website, “The Exam is not harder or easier to pass at different times. An increase in pass rates simply means that candidates are better prepared.”

The exam is doable if you approach it strategically, and the additional time and effort invested in becoming a CPA is worth its weight in gold.

This is your selling point? If I’d written this, I might have referenced This Way to CPA’s Why CPA? page. Under the “What’s in It For You?” section:

10-15% higher salary than regular accountants
Becoming a CPA is an investment. CPAs have the potential to boost their earnings by $1 million of their lifetime compared to a non-CPA in the same position.

I would not have referenced this from UWorld Roger CPA Review:

According to Monster Jobs, a CPA’s earnings over the course of 45 years is $3,200,000 if the starting pay is at $46,200 and the pay at 20+ years is $76,000. Such salary data was compiled by looking at the expected lifetime median earnings which were calculated for a 45-year period based on median annual pay levels for 1, 5, 10, and 20 years of experience in each position.

Yeah that’s got to be old info. It checks out though.

Thankfully those numbers have edged up in the last few years though it’s looking like the big jumps of last year are cooling off now.

Finally, here’s his pitch on salaries:

CPAs have a very strong starting salary, and comparisons can be deceiving

The idea that the pay for an accounting major coming out of college is lower compared to other finance or business careers is a bit misleading. Most college students in accounting have a job locked up by the beginning of their senior year — demand is that high. Everyone who leaves school with an accounting degree seems to get a job.

Bro at no point in that paragraph did you explain why it’s misleading, all you did was gaslight people about the accuracy of countless salary reports.

He does add:

Starting salaries in public accounting in 2023 are very good, typically exceeding $70,000. While other financial and professional fields might state similar or higher starting salaries, it’s important to note that they aren’t typically placing as high a percentage of students. It’s harder to get those jobs, and there aren’t very many of them, despite the volume of the surrounding buzz.

Like how he says “might state” as if investment banker salaries are some wildly unreliable As Seen on TV claim. Per the US Census Bureau, the median annual income for Americans in 2021 was $70,784. “Very good” is dependent on a lot of factors, for some people $70,000 is in fact very good. Let’s not kid ourselves, accounting salaries have lagged behind other fields for a very long time (see this 2022 Bloomberg Tax article “Accounting Faces Reckoning After Years of Sluggish Pay Growth“).

Now, high demand is an accurate selling point. In fact, it might be the best one the profession has. Young people may fall victim to being seduced into other career paths with the lure of better starting pay but at least some of them could be swayed into accounting by emphasizing that even in difficult economic times, accountants can find work more reliably than their classmates who went into tech or law. See also: At Least We Aren’t in Tech, Boast Smug Accountants Who Didn’t Get Laid Off Today. Sadly the layoffs came later.

In September 2009, Rick Telberg’s CPA Trendlines shared that the accounting industry added 2,300 jobs in August of that year while the broader US economy lost 216,000 jobs and unemployment hit 9.7 percent. For those not old enough to have experienced the Great Recession as an adult, that was a big deal and evidence of the profession’s resiliency even in tough times because boy were things dire back then. This is a strong selling point and one that is unique to accounting. Can lawyers say the same? No, see the “Notes From the Breadline” tag on Above the Law. Not that accounting escaped that period of time completely unscathed, comparatively speaking it hurt a lot less.

Next time go hard on the employability thing. That one’s not misleading. Talk about specific career opportunities available to accounting majors and tell stories of the people who work in and around the profession, especially those who aren’t in public because they seem to be happiest with their chosen career. That’s a better pitch than “the money isn’t that bad and the work-life balance is fine most of the time except for several months out of the year.”

The post Guy Who Works at a Firm Actually Named FML on Why Accounting Is a Great Career appeared first on Going Concern.

A friend asked why I believe the 150-hour requirement is more of a barrier of entry to the accounting profession than a 120-hour requirement with added experience.

That is a great question. Although, it does not matter what I think. What have we learned through research? And, how good is the research?

The AICPA and several state societies have cited a study by the Illinois Society of CPAs to say the 150-hour rule is not one of the top 5 reasons students do not pursue a CPA. A leader in the profession told me privately that the Illinois study is “bunk.”

So why is the Illinois Society study questionable? First – the survey went to accounting students, graduates, and young professionals. It did not go to those who chose to study something other than accounting. Those who decide NOT to study accounting are not in the sample. Additionally, 89% of students who responded were already on a CPA track. We need to know whether the 150-hour rule prevents students from entering the pipeline. This study does not give us that information.

Second – I question the results. The participants selected three challenges or barriers associated with becoming a CPA. Workload time commitments and personal time commitments are the top two reasons. These variables sound like they might be capturing the same thing. We do not know how the results would change if these two highly correlated variables were collapsed into one called “time commitment.” An independent reviewer likely would have asked for this analysis, if the study was submitted for publication in a peer reviewed academic journal. The next three variables are similarly highly correlated: difficulty of the exam content, difficulty of applying for the exam, and fear of failure. With multiple highly correlated variables, the ability to pick only three, and the fact that the respondents were already in the pipeline and therefore had already sunk time and cost towards obtaining 150 credit hours, it is no wonder that the 150-hour rule is not in the top 5 barriers listed. Additionally, the impact of the 150-hour rule might already be captured with the time commitment variables.

The Center for Audit Quality (CAQ) recently released a more credible study. The AICPA should be reading and reacting to this study. The CAQ surveyed all business majors and asked those who did not study accounting, why not? Some interesting results from this study are that more than 40% of non-accounting majors considered majoring in accounting. Of those who considered majoring in accounting but decided against it, 60% cited not wanting to pursue 150 hours as either the major reason or part of the reason they did not study accounting. Of those who did not consider studying accounting, 54% cite not wanting to pursue 150 hours as part of the reason. For those who considered but decided against accounting, starting salary was the primary reason. That is a topic for another day.

Even more credible than the CAQ’s study is one by Dr. John Barrios, based on his dissertation, and published in what is unarguably one of the top three academic journals for accounting research. I encourage you to read it. You will gain an appreciation for the peer review process and an understanding of why it can take a long time to do a thorough academic study. Although I have read it a few times, I was fortunate to see Barrios present his findings. It was much easier to understand that way.

Barrios’s study tells us a great deal. But, relevant to this commentary, it tells us that implementation of the 150-hour rule resulted in about a 40% decline in the number of first-time candidates taking the CPA exam. The loss of pipeline was all through the distribution; both high-performing and low-performing students decided against pursuing the CPA after implementation of the 150-hour rule. And, through collected LinkedIn data, he shows that there is no difference in the career outcomes for those who became CPAs under a 150-hour regime and those who became CPAs under a 120-hour regime.

Satisfyingly, Barrios found value in earning a master’s degree. He did not find value in a hollow extra 30 credit hours. Those with a master’s degree are promoted faster. As the academic director of the MACC and STEM-Qualified Master of Science in Accounting, Technology, and Analytics at the University of Denver, I enjoy reading research that supports my personal observations. Our graduate degree holders are promoted quickly, given big raises, and constantly recruited by placement professionals.

Based on the research, I suggest states reduce the barrier to becoming a CPA and recognize the value of graduate education by requiring two years of experience for baccalaureate degree holders and one year of experience for graduate degree holders. Notice I did NOT say, 150 or 120 hours. The education requirement should be based on earning a degree, not random hours.

The post 150 Hours is a Barrier – Really! appeared first on Going Concern.

Some key insights:

How professionals’ hopes for generative AI are centered around improvements in operational efficiencies that will provide greater productivity. They also envision that the freed-up time resulting from the removal of mundane work will make them available for higher-value tasks. We at Thomson Reuters believe this will largely be achieved over the next five years.

How true transformation will occur around talent. While many can see the positive impact AI will have on recruitment, training, career paths, and well-being, there is uncertainty. This unease showed up in the research findings as fears around job loss and, for some, the demise of their professions altogether. We at Thomson Reuters believe jobs will change and tasks will be automated, but AI will create greater capacity for professionals to provide even more value to customers and stakeholders.

How professionals acknowledge the transformational impact AI will have on their work over the next five years. Society and economies have been shaped by our ability to keep pace with innovation. This study shows professionals are ready to embrace change and harness new technology to enable productivity and efficiency, and offer a greater customer experience. At Thomson Reuters, we believe it is too early to fully understand the full scope of these changes and the subsequent impact, but we must partner across industries and create new applications of AI responsibly to achieve the most desirable outcomes.

Fabulous. We’re not here to talk about that though, we’re here to talk about the intersection of work and mental health and how professionals surveyed feel about work’s influence on their mental well-being. It is not nearly as bad as you might expect.

With maintaining a healthy work-life balance being cited as the second most important motivator for professionals, it is easy to connect the dots to understand how work impacts overall mental health and well-being, given that many professions in the legal and accounting industries are known for long hours and high stress. Interestingly, more than half (53%) of the professionals surveyed said that their work had a strongly or moderately positive impact on their mental health and well-being. And just under half of legal professionals at law firms and in the government sector agreed their work positively impacted their mental health and well-being.

You read that right. More than half (about 636 people) of all respondents said work has a positive impact on their mental health, 22 percent of tax and accounting professionals surveyed said strongly positive. 58 percent of tax and accounting people are in the “positive” range, beating out the law folks by nearly 10 percent. Legal professionals working at law firms also have a larger chunk in the moderately negative and strongly negative categories

When you get down into the weeds you see that men seem to feel better about work than women by a significant margin and that boomers unsurprisingly report higher positive effects than Gen X and millennials. I’d propose it’s possible that Gen X and especially millennials are more aware of mental health than boomers and therefore better able to identify ways in which work impacts it but who can say? On the flip side of that, only two percent of boomers report a strongly negative impact on their mental health compared to five percent of millennials. I’m intentionally ignoring Gen X’s eight percent as is tradition when it comes to their generation.

Said the report:

The positive nature of gaining mental health and well-being benefits from work suggests a good portion of professionals will be able to cope well with the disruption that AI inevitably will bring. Intentional focus by professionals on their mental health and well-being during this transition therefore will be very important to maintaining this positive state.

Directly related to mental health, respondents were asked for their opinion how AI will affect the hours they work in the next five years. Deeply rooted in reality, a good amount of them are tempering their expectations and still others think AI will somehow make hours worse.

Although, as stated above, some professionals can see potential for AI to improve mental health and well-being, it must be acknowledged that not all professionals agreed with this optimistic standpoint. Indeed, some professionals believe AI will have a negative impact on their work-life balance and mental well-being, in part because of skepticism as to whether the benefits of AI will actually materialize.

In fact, the collective opinion among survey participants is divided as to whether working hours will shorten or indeed increase. A lack of clarity on the impact of AI on working hours was the dominant view, although the proportion of professionals who expect AI to result in longer working hours was twice that of those who predicted shorter hours in the short term.

Bless those 13 percent of people who think they’ll be working fewer hours 18 months from now with the help of AI. We can only hope.

There’s a bunch more but it would have a negative effect on my mental health if I had to write it all up so find the other 34 pages of the report below.

Future of professionals report: How AI is the catalyst for transforming every aspect of work [Thomson Reuters]

The post Work Is Destroying Tax and Accounting Professionals’ Mental Health Much Less Than You’d Think appeared first on Going Concern.

Unless you’ve been living under a rock, you’re likely aware that the accounting profession is experiencing two simultaneous massive shocks.

These shocks (of our own making) are the collapse of the CPA candidate pipeline and launch of the CPA Evolution, the largest change to the CPA exam since the exam went digital nearly 20 years ago. Of course, exam computerization came after current partners had to walk uphill in the snow both ways to make it to and from the client site. Cue the violins.

Many of the discussions about these shocks have come in a vacuum, mentioning either the pipeline collapse or CPA Evolution, but the two are as connected as they’ve ever been. I’ve seen several major changes to the CPA exam throughout my career as a practicing accountant, university professor and exam prep instructor: 1994 – the exam was shortened from 19.5 hours to 15.5 hours; 2004 – the exam went from a paper and pencil exam to a computerized exam; 2011 – the first Computer-Based Testing Evolution (CBT-e) was enacted and the task-based simulation format was introduced; 2017 – higher order skill testing was introduced; and 2018 – Excel was added as a tool, along with a new user experience. Now, we’re facing the CPA Evolution’s arrival in 2024. Typically, each major change is accompanied by a tsunami of candidates rushing to test before the change takes effect and is followed by a drought of candidates signing up to test immediately after the new exam changes go live. We’re seeing more of a ripple than a tsunami this year and could be in for a massive drought in 2024 and 2025.

It doesn’t look like our profession or university accounting programs should expect the calvary to be coming anytime soon. It’s likely the well-documented pipeline shortage is going to get worse initially because of the CPA Evolution, not better. Fewer candidates are racing to test before the changes despite Business Environments and Concepts (BEC), having the highest pass rate and being a known evil, being eliminated as a section in 2024. This is why Surgent, along with the editors at Going Concern, are encouraging any candidates to sit for BEC (and AUD!) before 2024.

Exam review providers like Surgent know what BEC questions and writing prompts look like. We know how to prepare candidates. And so do professors in accounting programs. The discipline sections replacing BEC are all new: Business Analysis and Reporting (BAR), Tax Compliance and Planning (TCP), and Information Systems and Controls (ISC). Exam candidates must pass one of the three to be licensed. We don’t know how these disciplines will be scored. And the AICPA will need time to collect data and assess performance; it’s why they are bringing back testing blackout periods in 2024.

The change to a discipline-focused CPA exam brings us to the most pressing pipeline issue – the impact that the CPA Evolution will have on enrollments in accounting programs at colleges and universities. Sure, we need more CPA exam candidates to have more CPAs, but given licensure requirements, we need even more collegiate accounting students to have more CPA exam candidates. Exam candidates are in the middle of the funnel. Because the current licensure model requires 150 hours of collegiate credit and a set number of hours in accounting specific courses, accounting students are the top of the funnel and the most important piece. If we don’t get more students to major in accounting, there is no pipeline.

The CPA Evolution may squeeze the funnel even more for colleges and universities by further focusing the exam on more analytical and information systems topics such as digital acumen, data literacy, data analytics, and internal control structures. Do these sound like subjects many accounting students learn in their typical accounting courses? They aren’t in most traditional curricula.

And most universities outside of elite schools and large state schools don’t have the resources or ability to integrate them into the curriculum before 2024. Many universities typically need four to five years, at a minimum, to implement large scale curricula changes. That’s just the nature of the academic beast. There’s already only one semester remaining between now and the CPA Evolution. So, students will be left to rely on exam review providers, YouTube, and other self-study programs to fill the gaps.

At least students knew the old exam matched their coursework. The new one will in time, but that will take four to five years, not the 18 months’ notice the industry was given.

Many accounting degree programs have gone largely unchanged this millennia apart from some added Excel assignments and data analytics courses sprinkled in. And getting those changes took years! The CPA Evolution ignores the pace of play in higher ed. Universities were given less than three semesters to adapt their curricula and prepare their students – the future CPA candidates – and single biggest pipeline fillers. Many have not adapted and are questioning if they even can. Others are wondering which courses they need to change – implying they’ve not responded at all. I believe all the schools want to give their students the best education to match the needs of the profession. But, higher ed is more bureaucratic than the federal government. It does move. It just doesn’t move in three semesters. It rarely moves in three years.

I’ve been in the accounting industry my entire life. I want the profession to succeed. I want the pipeline to grow. Change is often good for industry. But too much change, too quickly, can make our already difficult problems even worse. I worry the CPA Evolution solves a future problem in preparing students for the needs of the firms but comes at the cost of fewer people available to the firms. We could have had both if we gave universities and students the time to prepare.

The post CPA Exam Changes and Pipeline Woes Are a Perfect Storm of Problems For the Profession appeared first on Going Concern.

The below essays reflect the author’s opinion not necessarily the opinion of The Pennsylvania State University nor that of Going Concern.

Why I Am Quitting the AAA

by J. Edward Ketz

The American Accounting Association (AAA) is the organization for accounting professors not only in the U.S. but throughout the world. It is a prestigious group for advancing accounting thought, developing improved teaching methods and materials, improving the public’s understanding of financial reports and the tax system, and enhancing ethics and the public trust. Unfortunately, the latter function is broken.

The AAA approached me in July of 2022, asking me to write an opinion piece “to provoke thought on an important contemporary issue,” similar to an essay penned by Maurice Moonitz in January 1979. I agreed and soon sent the accompanying essay about E&Y personnel caught cheating on an ethics exam and the SEC’s claim about the firm’s interfering with its investigation of the incident. Initially I was congratulated about discussing a topic on many minds. Shortly thereafter I was told that some in the organization wanted a temporary halt to the publication and wanted to study the “process” of putting opinion pieces into its publications. I was reassured that it was only a matter of time before the piece could see the light of day.

During the past year, there has been a snail-like pace by the Board and then by Management of the AAA. Nobody wanted to reject the paper but neither did anybody want to accept it. I have been put off for a year with no resolution in sight. So now I seek an alternative publication space.

Admittedly the story is a year old, but the questions are not resolved. The issue remains whether the profession wants to get serious about ethics.

In the meantime it appears that the AAA is not serious. Therefore I am saying good-bye to the AAA.

Ernst & Young in an Ethics Scandal: Ho-Hum

By J. Edward Ketz

Written for Accounting Education News, not published.

On June 28 of this year the SEC announced its largest penalty ever levied against a large accounting firm because E&Y had many of its audit professionals cheating on ethics exams. (How deliciously ironic when one cheats on an ethics exam!) Says the SEC, the firm “hindered our investigation” by “withholding evidence of this misconduct.” E&Y, in the end, agreed to pay a fine of $100 million to settle the matter, which follows similar incidents by PwC Canada earlier this year and by KPMG in 2019.

When this announcement was made public by the SEC, news agencies, blogs, and twitter feeds exploded with tsking, booing, alas-ing, and pshaw-ing. There was shock and dismay—how could they do this? There was surprise and bewilderment—what is going on with those entrusted to ensure financial integrity? And, of course, there was condemnation and finger pointing.

Going Concern, for example, says that “there’s a serious ethics problem at large firms that clearly isn’t being addressed.” Michael Shaub says he felt anger at first, now replaced by sorrow. He asks why the public trusts us with audits of corporate reports. They show outrage at this lapse of professional ethics, and I agree that such episodes are repugnant, but let’s shift attention to the question of who is surprised by the incident. Given the many ethical lapses of the last (say) 25 years, why does anybody express astonishment?

Instead of our collective chest thumping about how independent auditors are paragons of integrity, we should examine humbly the human situation. In The Cheating Culture David Callahan asserts that the U.S. society is seeing an ever-increasing amount of cheating, and “everybody does it.” Temptations abound, which are dangerous with America’s winner-take-all attitude and the rewards for success bigger than ever. Dan Ariely contributes to this discussion in his The (Honest) Truth about Dishonesty. He claims people desire to view themselves as honest individuals, but cheat because they gain many benefits from duplicity. He advances the fudge factor theory to account for both tendencies. What is most interesting about this theory is that Ariely practices what he preaches. In an expose by Alexander Danvers, Ariely was found faking data in a 2012 honesty study!

If Callahan and Ariely are correct, one wonders how humans, free moral agents, have devolved to this nadir. Gary Becker assists this understanding by postulating an economic model of crime in which rational beings will commit crime if the rewards are sufficiently high, the odds of getting caught sufficiently low, and the punishments if caught sufficiently low. Ariely claims that this model is not quite correct because, wanting to be seen as “good,” humans typically will commit crime only to a point. Callahan does not address these economic accounts, resting instead on social forces.

Regarding E&Y, there are plenty of examples that are congruent with Callahan, Ariely, and Becker and beg the question why anybody is surprised at what transpired. One recalls the egregious tax shelter set up by E&Y to benefit Sprint and its top executives. Another incident involved an E&Y auditor and her romantic entanglement with the CFO of the firm being audited. There was also a case that involved an E&Y auditor’s spending a fortune on football and hockey games and vacations with the CFO of the firm for which he was the audit partner in charge. Another demonstration focused on auditor independence when the independent E&Y auditors interfered with a firm’s auditor proposal process. And let us not forget the sad and ineffective audit at Wirecard; it was not the profession’s finest hour. I should add that there exists a plethora of similar episodes at the other large accounting firms. (Also see my essay “The Myth of Auditor Independence.”)

Researchers should find fertile territory to study. What is the cost-benefit calculus that auditors employ when deciding to cheat on ethics exams? What social factors and historical antecedents explain the behavior of the accounting industry? How are juniors socialized in the practices of their chosen profession and to what are they socialized?

These incidents also impact our teaching mission. How are we to teach professional ethics and tenets like independence—are they desired ideals or mere myths?

These situations do not occur every day, so many conclude that these events merely prove that there are some bad apples in the profession. In this case, “over 200 EY audit professionals” cheated. How many ethical lapses does one need to see a cultural paradigm rather than isolated incidents? It is no longer meaningful to deny the obvious.

Having auditing professionals cheat on ethics exams is tragic, sad, appalling, and confusing. But surprising? Hardly.

About the author: J. Edward Ketz is Associate Professor of Accounting at Penn State and has been a member of the faculty since 1981. Ed has authored and edited 17 books as well as numerous articles. He has been cited often in the popular and business press; he also has appeared as an accounting commentator on radio and television. Besides teaching and writing, he serves as an accounting expert witness from time to time.

The post ‘The American Accounting Association Is Not Serious’ and Other Such Thoughts From a Professor Who’s Quitting the AAA appeared first on Going Concern.

Journal of Accountancy:

The AICPA has formed an advisory group of accounting stakeholders that will help to shape strategy to address the profession’s talent shortage.

The National Pipeline Advisory Group represents a broad spectrum of leaders in the accounting profession. The group’s work on a national pipeline strategy will be informed by the use of technology, surveys, and in-person forums to solicit insights and input from diverse groups nationwide, the AICPA said in a news release.

“The slowdown in young adults choosing accounting as a career is a collective problem for the CPA profession and requires a collective and inclusive solution,” said Sue Coffey, CPA, CGMA, CEO of Public Accounting for AICPA & CIMA, together as the Association of International Certified Professional Accountants. Coffey is executive sponsor of the initiative and member of the advisory group.

“We want to make sure we have a broad range of viewpoints and perspectives to help define the profession’s pipeline strategy moving forward,” Coffey said. “This deep, capable, and experienced group will play a critical role in guiding that conversation and subsequent call to action.”

Now, before you say “didn’t they do this already?” you should know that ‘The National Pipeline Advisory Group’ “is focused on developing a cohesive and agile national strategy.” Says JofA, that strategy goes beyond the elements of the Pipeline Acceleration Plan, a set of initiatives already underway or being explored. Whew, here I thought they were demonstrating to us the meaning of insanity in practical application.

The Pipeline Acceleration Plan (known around these parts as the AICPA’s 12-Point Plan to Do F*ck All to Solve the Accountant Shortage approved in May at Council):

What the plan actually needs to look like:

Pay people better then you can hire more people which would address public accounting’s second biggest issue of relentlessly long hours. While you’re at it start promoting entrepreneurship, small firm, and straight-to-industry as viable options for accounting majors instead of professors aggressively advertising Big 4 as the be-all end-all of accounting because that gateway to Hell is scaring a lot of people away. You’re welcome for that freebie, AICPA.

The Center for Audit Quality just released a report on increasing diversity in the pipeline that, while clearly focused on diverse students (it’s literally in the title of the paper), gives us a wealth of data on why young people are choosing other majors. It also gave us this quote:

So we already have a wealth of answers to the “why” in the “why aren’t young people pursuing accounting?” Is a new group somehow going to unearth an as yet undiscovered, mysterious reason for why young people are choosing majors other than accounting? Sure hope so, this song and dance is getting old.

No offense intended to members of the group, sure you all are wonderful people.

The post The AICPA Has Cooked Up Yet Another Plan to Do F*ck All to Solve the Accountant Shortage appeared first on Going Concern.

The masters of the poll at Gallup have released their State of the Global Workplace 2023 Report and by quickly skimming it we discover that the majority of the world’s employees are “quiet quitting.” The majority being 59% and quiet quitting defined by Gallup as:

These employees are filling a seat and watching the clock. They put in the minimum effort required, and they are psychologically disconnected from their employer. Although they are minimally productive, they are more likely to be stressed and burnt out than engaged workers because they feel lost and disconnected from their workplace.

As opposed to the mere 23% of employees who are thriving at work:

These employees find their work meaningful and feel connected to the team and their organization. They feel proud of the work they do and take ownership of their performance, going the extra mile for teammates and customers.

Then we get to the 18% of loud quitters. You’d think loud quitting means a PwC auditor telling her soon-to-be former team members “you’re fake important and you stink,” “I can give two shits about your animals, maids, brother,” and “You hate yourself and your job, let’s be honest. Your cat doesn’t care about you so stop caring about it. Stories about your nasty cat are unbearable. Seriously, I can’t even deal. Beyond gross! You’re fake ratchet! I hear you giving weird remarks that are borderline weird….I can definitely hear the twang in your voice” in a 5,000 word farewell email but somehow it doesn’t.

Nor does loud quitting mean this:

No, Gallup says a loud quitter is an employee who is not only actively disengaged with their work (i.e. could not find it within themselves to give a single solitary fuck) but actively engaged in sabotage:

These employees take actions that directly harm the organization, undercutting its goals and opposing its leaders. At some point along the way, the trust between employee and employer was severely broken. Or the employee has been woefully mismatched to a role, causing constant crises.

This situation naturally leads to higher stress in the disengaged, probably because everything pisses them off and all they can think about is that glorious day they get to turn in their laptop.

As far as the office vs. WFH discussion, Gallup analysis finds that engagement has 3.8 times as much influence on employee stress as work location. They say:

In other words, what people experience in their every day work — their feelings of involvement and enthusiasm — matters more in reducing stress than where they are sitting. Leaders need to ask if poor remote work performance or poor hybrid work performance is a location problem or a management problem. No location can *fix* poor management, and the office alone has no magic to create a great organizational culture.

Let’s hope leadership is reading this. The report gives them a little advice:

For leaders and managers, loud quitting can signal major risks within an organization that are important not to ignore. Conversely, quiet quitters are often your greatest opportunity for growth and change. They are waiting for a leader or a manager to have a conversation with them, encourage them, inspire them. A few changes to how they are managed could turn them into productive team members.

I’m curious how many of you reading this would consider yourself quiet quitters and if so, what changes your leaders could implement that might get you engaged at work. More pizza?

State of the Global Workplace: 2023 Report [Gallup]

The post We’re Loud Quitting Now appeared first on Going Concern.

First, the chart. Priorities are aggregated by number of mentions from surveys of more than 500 tax leaders around the world and grouped by theme:

Here’s another. Ignore that we skipped Figure 2, it’s coming.

The report clarifies that just because talent slipped to the fourth spot overall it doesn’t mean firms no longer care about it. Big firms absolutely do.

“It should be noted that although the order of priorities may have changed, this doesn’t necessarily mean firms care any less about any given priority, it’s just that respondents’ primary focus may have shifted,” says the report. “As a practical matter, all of these priorities are inter-related, and the statistical difference between the top three priorities, for example, is only a few percentage points. And although finding and developing talent did drop from the top spot to the fourth spot overall due to input from small and midsize accounting firms, the hunt for talent is still very much a top priority at large firms.”

For firms with 30 or more people (Large firms in Figure 2 below), recruiting, developing, and retaining talent is still the highest priority. But at what the report defines as Midsize firms (between four and 29 people), the top priorities are efficiency and client service.

With talent out of the way, let’s talk about client service. “The prioritization of client services is especially evident at midsize accounting firms, where both individual and business clients are asking their accountants to play a more active advisory role,” the report says. “Midsize firms see expanding their services into areas such as tax strategy, financial planning, and business guidance as a key growth strategy, both to differentiate themselves from small-firm tax preparers and to compete with larger accounting and auditing firms, most of which already provide such services.” Three years ago we might say you need talent to expand into advisory areas but the report reminds us that technology and a seemingly unlimited supply of overseas accountants can get at least some of the work done. Too bad there isn’t actually an unlimited supply of overseas accountants.

Wrapping things up here:

Overall, the results of our 2023 report suggest that in the face of a possible recession, accounting firms are looking for ways to streamline their operations — through both process re-evaluation and the adoption of new technologies — and doing what they can to position themselves for growth in 2023.

To be sure, tax leaders are still dealing with a serious labor shortage, but they are also pursuing alternative strategies to achieve their goals, including greater investment in tax technologies, better training on existing systems, outsourcing, and even freelance contractors. Client demand for a broader range of advisory services and more flexible pricing models is also driving decision-making going into 2023, as is competition for higher-quality clients and the need to hire, develop, and retain experienced tax professionals at all levels.

RIP workers’ market, we hardly knew ye.

Thomson Reuters Institute 2023 State of the Tax Professionals Report [PDF]

The post If We Believe This Report, Talent Is No Longer Firms’ Number One Priority appeared first on Going Concern.

H. Dennis Beaver, Esq. (great name btw), I don’t know who you are but I do know I’m glad you wrote this article for Kiplinger. Somewhere out there there’s a firm managing partner asking himself what he should do if he finds out a treasured but lonely manager is tangled up with a Tinder Swindler out to steal client data. This is that MP’s lucky day.

Mr. Beaver opens with this:

Why does someone stay in a romantic relationship with a con artist? We are talking about a responsible person who should be aware that their significant other is dishonest and capable of causing them and their employer significant harm.

Is there a way for their employer, family and friends to help them see the light and get out of the toxic relationship? And if the employee refuses all offers of help, could that be a basis for termination?

Apparently the story that Mr. Beaver, a lawyer, shares is a real one. It began with a phone call from the CEO of an accounting firm, he writes. “One of our CPAs is involved in a relationship with a woman who is an emotional con artist. I am hoping that you can help him see the quagmire that he is in and the danger it creates for our firm.” The CPA stopped by Beaver’s office the next day and outed himself as an easy mark within moments. “It was instantly clear that his extreme fear of being alone and obsessive need for companionship had exposed him to a peril he refused to see, or even accept that it was possibility,” wrote Beaver. Poor Chuck, the guy was already down bad why you gotta out him like that.

“I am dating a wonderful gal who is the emotional answer to my needs,” said the divorced Chuck. “My employer hates her because she goes by different names, exaggerates and has claimed to be an M.D., which I found not to be true. I’m not worried despite what everyone is telling me. I can’t survive without … being loved, having someone to love. It makes me so happy to see how appreciative she is when I give her presents; my ex never even said thank you! I would do anything she asks.” Chuck added, rationalizing, “I am keeping just close enough to the campfire to be kept warm, but not get burned.”

Chuck, are you sure she’s real? Have you met her in the flesh? Because this sounds like someone who plays long-distance girlfriend to lonely guys by day and HR professional/crypto expert/stranded military man needing $500,000 to get his belongings out of Afghanistan by night. Actually this whole story seems fake but whatever.

Just in case she does exist, attorney and business law professor David D. Schein was luckily available to explain the dangers of Chuck’s obsessive loneliness for the purposes of this article. “Just picture Chuck working from home, his computer having accessed client files, and he takes a nap,” he says. “This becomes an invitation for the girlfriend to search client files for her next mark.” OK, I’m picturing it. The girlfriend is wearing all black, doing that sneaky robber stock photo walk toward Chuck’s work laptop and making that “heh heh” sound cartoon robbers make when they’re about to jack something. You know:

Schein’s suggestion for the accounting firm CEO is to offer Chuck an ultimatum: “Either she agrees to a detailed background check, including fingerprints, photo scan and DNA analysis, or Chuck could be out of a job. It is that serious when you have a known con artist in such a close relationship to your employee, especially for a CPA firm. Even then, Chuck may be too great of a risk to the firm.”

SO. Who’s sticking around when leadership starts demanding background checks for every guy or gal you scoop up off Tinder? And why didn’t Chuck just get a dog?

The post How to Protect Sensitive Client Data When Your Pathetic Staff is Bringing Shady Ladies Home to Bang appeared first on Going Concern.

Dr. Tspipursky—aka the “Office Whisperer,” aka the “Hybrid Expert”—wrote in a recent Forbes piece that leaders who believe forcing employees to return to the office will naturally lead to mentoring and development are huffing cope. If anything, the pandemic has shown that employees can get shit done outside the office, which means demanding them to come back is, well, you know, not very smart.

There is no denying that every professional, accountants included, began to rethink how they do their jobs when they were forced to work remotely. In the accounting industry, the enticement—and offerings—for remote work roll on. As of May 2023, there were more than 600 remote accounting jobs listed on the job board of talent solutions firm Robert Half.

And there more, according to the ConvergenceCoaching ATAWW Survey, the percentage of accounting firms allowing their folks to work remotely in 2022 on a regular or fluid basis nearly doubled to 80%. And get this: 43% say they are adding remote recruiting to their talent strategy.

So, if you don’t give accounting talent what they are looking for, as Dr. Nicknames says, you may be shit out of luck. A Thomas Reuters’ article says that the desire for remote or hybrid positions remains strong, with 41% of finance and accounting professionals either looking or planning to seek new employment in the first half of 2023. Among those professionals, 63% plan to go hybrid, with 47% interested in a fully remote position.

According to a PwC Remote Work Survey, pre-pandemic, only 29% of financial services firms had at least 60% of their workforce working from home at least once a week.

So, as Dr. Tspipursky, who really is CEO of future-of-work consultancy firm Disaster Avoidance Experts, says:

Instead of forcing everyone to return to the office and hoping for osmosis-driven mentoring, it’s imperative to create a hybrid mentoring program that encompasses in-person and virtual mentoring elements. Such a program has been successfully implemented for several of my clients, such as the companies mentioned earlier. The result was happier senior staff and more effective mentoring.

Why are senior staff more willing to come to the office to do mentoring rather than through a mandate? Well, my focus groups with senior staff showed that they overwhelmingly realized the value of in-person mentoring: not only did they get in-person mentoring themselves, but they also recognized that in-person connection is very important for building trust. It allows junior people to be vulnerable when they ask questions that reveal vulnerability.

And he has the goods to back up everything he says:

From my experience, a hybrid mentoring program requires several key activities:

• Individual lunch sessions with senior professionals: One-on-one interactions with senior professionals are the most powerful form of mentoring, but given the scarcity of time for senior professionals, this should not be the only mentoring activity.
• Virtual coffee roulette with senior professionals: A lower time burden for senior professionals, allowing for more accessible mentoring arrangements, even though less impactful than individual lunch sessions.
• Group lunch sessions with senior professionals: A senior employee takes out a few junior employees for lunch, which facilitate knowledge sharing and relationship building in a time-efficient manner for senior professionals.
• Group mentoring: A senior employee mentors a cohort of junior employees, fostering a collaborative learning environment and reducing time demands on senior staff.
• In-person coworking sessions: One senior and several junior employees work together on their individual tasks in shared spaces in the office for a couple of hours. Junior team members can ask questions as they come up, while the senior staff person can check in on their work every half-hour or so. Doing so promotes teamwork and organic knowledge transfer, while decreasing the burden on senior employees.
• Virtual coworking sessions: Similar to in-person coworking, but conducted via videoconference for increased flexibility.

Firms with a heavy RTO hand should take heed and reconsider their “collaboration” mandates. If they don’t, the Robert Half folks are going to love all the job placement contracts.

The post Forcing People Back Into the Office to Foster Mentoring Will Only Foster Resentment, Says Cringe Nicknamed Doctor appeared first on Going Concern.

Is this like the time EY said it “saved” $400 million on Everest because the business freeze and deferments as a result of its planning meant they didn’t spend $400 million on other things during that period? Is it possible that black belts of financial martial arts could be fudging the truth?

The post Conspiracy: Firms Aren’t Investing As Much Money Into AI Technology As They Claim appeared first on Going Concern.