Friday Footnotes: Intuit Pisses Off Tax Practitioners; Deloitte Won’t Talk About Tax Dodging; Whatcha Up To, KPMG? | 10.4.24

Posted on by Going Concern News Desk
dog peeking out of door into hallway

News

PayPal Completes Its First Business Transaction Using Stablecoin [Bloomberg]
They paid an EY invoice LOL
PayPal Holdings Inc. completed its first business payment using its proprietary stablecoin as a way to demonstrate how digital currencies can be used to improve often-clunky commercial transactions. PayPal paid an invoice to Ernst & Young LLP on Sept. 23 using PYUSD, the stablecoin the firm launched last year, relying on an SAP SE platform to complete the transaction. SAP’s platform, known as the digital currency hub, allows enterprises to send and receive digital payments instantly, around the clock. The invoice amount wasn’t disclosed.

SEC Charges Olayinka Oyebola and His Accounting Firm With Aiding and Abetting Massive Fraud [SEC]
The Securities and Exchange Commission charged Olayinka Oyebola and his Public Company Accounting Oversight Board-registered accounting firm, Olayinka Oyebola & Co. (Chartered Accountants), with aiding and abetting a massive securities fraud perpetrated by Mmobuosi Odogwu Banye, also known as Dozy Mmobuosi, and three related U.S. companies that Mmobuosi controlled (the Tingo entities). The SEC recently obtained a $250 million final judgment against Mmobuosi and the Tingo entities.

Tax

There’s some Intuit drama coming to a boil. See here:

Big 4

After a Deloitte client’s $2.4B tax dodge faltered, the accounting giant won’t say if it helped others exploit the same loophole [International Consortium of Investigative Journalists]
Late last year, the Internal Revenue Service notched a significant win in its fight against high-end tax dodging when a federal judge in Colorado upheld the agency’s challenge to a $2.4 billion tax deduction claimed by Liberty Global, a multinational telecommunications firm. The case, which centered on a complex offshore tax maneuver that generated the huge write-off for the corporation, was described by one industry observer as the “worst nightmare for tax planners” who seek out vulnerabilities in federal tax law. Yet the role of Liberty Global’s own tax advisor — the accounting giant Deloitte — has received little scrutiny, despite U.S. authorities describing the firm as playing a key role in designing the scheme. Liberty Global’s controversial tax maneuver, code-named “Project Soy,” shuffled assets between the firm’s companies in countries such as Belgium, the Netherlands and Slovakia in order to exploit a loophole in a landmark Trump-era tax law, according to court filings. The Justice Department asserted that Deloitte had approached Liberty Global with the original idea for Project Soy, a claim Liberty Global has denied in multiple court filings. If Deloitte did market the loophole, as the Justice Department suggested, it could add to a rich history of Big Four accounting firms selling their well-heeled clients on complex and aggressive ways to avoid tax. It would also raise questions about whether other multinationals received the same advice as Liberty Global — and whether additional challenges could be coming.

Evergrande Auditor PwC China Flops in First US Inspection [Bloomberg Tax]
PwC’s Chinese arm, battered from a $62 million penalty for its botched audits of developer Evergrande, struggled to meet basic US auditing requirements including testing property and equipment values and conflict of interest rules. Public Company Accounting Oversight Board inspectors found fault with each of the seven PricewaterhouseCoopers Zhong Tian LLP audits they reviewed last year, according to results the regulator released on Wednesday.

What’s this? 🤔

Just got this in the mail, I was laid off over a year ago.
byu/NoAdhesiveness3384 inBig4

KPMG Appoints Maura Hodge to Lead US Sustainability Practice [ESG Today]
Professional services firm KPMG announced that it has appointed Maura Hodge to lead its US sustainability practice, taking over the role of US Sustainability Leader from Rob Fisher, who in turn has been appointed KPMG US Consulting Sector Leader for Financial Services and Insurance Hodge has been with KPMG for nearly 20 years, most recently serving as ESG Audit Leader, leading the firm’s national efforts around ESG measurement, reporting, and assurance.

Firm Watch

Energy equipment supplier Holtec files lawsuit against accounting firm CBIZ [Reuters]
U.S.-based energy equipment supplier Holtec International has filed a joint lawsuit with two other firms against accounting firm CBIZ and its senior executive Lonnie Davis, the company said on Thursday. The company also alleged business misconduct, including fraud, breach of contract and accounting malpractice, against CBIZ and two former Holtec executives, Chief Financial Officer Robert Galvin and General Counsel Andrew Ryan.

CliftonLarsonAllen to move Valley operations to Hayden Ferry Lakeside campus [Phoenix Business Journal]
A major accounting firm with national reach is moving its local operations to Tempe Town Lake. CliftonLarsonAllen, or CLA, announced Oct. 1 it is taking about 55,000 square feet at the Hayden Ferry Lakeside office campus in Tempe. CLA is expected to move into the building and operate a new “connection center” and office across multiple floors beginning in December 2025. That connection center is a dedicated space for employee learning and development, leadership training, collaboration, events and client meetings.

Deloitte once again named Tax Firm of the Year at the ITR Asia-Pacific Tax Awards 2024 [Deloitte]
The “once again” is a little sassy, no?
The International Tax Review (ITR) Asia-Pacific Tax Awards 2024* rankings were recently announced and Deloitte is extremely proud to announce that we have been named as the New Zealand Tax Firm of the Year for the second consecutive year. In the wider Asia-Pacific region, Deloitte was also the winner of:

  • Tax Firm of the Year
  • Transfer Pricing Firm of the Year
  • Global Executive Mobility Tax Firm of the Year
  • Indirect Tax Firm of the Year
  • Tax Compliance and Reporting Firm of the Year
  • Tax Innovator of the Year
  • Tax Technology Provider of the Year

Baker Tilly Acquires Alirrium, Expanding Robotic Process Automation and AI Capabilities [Baker Tilly]
Effective Nov. 1, the move strengthens Baker Tilly’s capabilities in RPA, artificial intelligence (AI) and machine learning to better support businesses in modernizing their operations and improving their competitive edge. Alirrium is known for its expertise in intelligent RPA integration, serving a diverse client base that includes both government and commercial enterprises.

Citrin Cooperman Announces 2024 Partner Class [Citrin Cooperman]
Congrats to all nine of them. We mean that.
“I could not be prouder of this dynamic group of leaders,” said Citrin Cooperman Advisors LLC CEO Alan Badey. “They embody the best of Citrin Cooperman and have all demonstrated a deep commitment to the core values that drive our success. I am confident that their collective focus on strengthening our culture, providing outstanding client service, striving for professional excellence, and driving innovation will serve the Firm well in 2024 and beyond.”

BDO USA Announces New Principal Class [BDO]
BDO USA has promoted 56 professionals to principal, effective October 1.

Brown Plus Grows Firm by Welcoming Three New Team Members [PRWeb]
Wait, did they really put out a press release for this?
Martina Shea joined Brown Plus as an Outsourced Accounting Senior Associate with 20 years of accounting and office management experience. She has an Associate’s degree in Accounting from Harrisburg Area Community College. Martina is located at the Brown Plus office in Hanover, Pennsylvania.

Talent

City’s accounting firms see a slowdown in hiring amid industry-wide workforce shortage [Crain’s New York]
New York’s largest accounting firms’ growth may finally be leveling out; their headcounts increased by an average of just 6.8% in 2024, down from a 12% uptick last year and a 34% jump in 2022.

Is your firm hiring? If so, you’ll want to check out this week’s top remote accounting candidates from Accountingfly.

Top Remote Accountants of the Week | October 3, 2024

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Silicon Valley Seeks CFOs to Hop on IPO Train [CFOJ]
The IPO boom in Silicon Valley is creating another mini-boom in demand for experienced financial executives. While demand for new chief financial officers has been somewhat slow at Fortune 500 companies and private-equity backed firms this year, executive recruiters say the market is on fire in Silicon Valley.

No Easy Answer on Tax Issue [WSJ]
After two decades of bipartisan tax policy, nearly half of all American households don’t pay federal inco lican presidential candidates are making a politically challenging case to change that fact. Most working Americans do pay Social Security and Medicare payroll taxes. But because of tax breaks for seniors and inducements for work and raising children, among other accumulated changes to the tax code, many manage to avoid income taxes altogether. The nonpartisan Tax Policy Center in July pegged that number at 46% of U.S. households for this year.

Democrats’ road tour strikes back at GOP’s stand against raising taxes [WaPo]
On Wednesday morning, as his tinted black bus pulled into Randy Hultgren’s congressional district, President Obama told residents that Republicans like Hultgren must be willing to raise taxes to reduce the deficit. A few hours and 90 miles away, Hultgren’s own constituents had picked up the message, repeatedly hectoring the freshman congressman at a town hall meeting to raise taxes on the wealthy and corporations.[…] “I just have one question for you tonight,” said another [man]. “Did you sign Grover Norquist’s pledge to never raise taxes?” — referring to the promise that has been signed by most congressional Republicans, including Hultgren. “Don’t you have the confidence in your own ability in Congress to make up your own mind? You need Grover Norquist to tell you?” the man continued.

BofA’s Moynihan Says to Expect 3,500 Job Cuts [Bloomberg]
Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan told his managers at the biggest U.S. lender to expect 3,500 job cuts this quarter. Some employees have already been informed of the firings, which are in addition to 2,500 reductions made this year, Moynihan said in a memo to staff yesterday. The cuts aren’t part of the Charlotte, North Carolina-based firm’s expense-trimming effort called Project New BAC, according to the document.

Let the “Condorsement” Games Begin [TAO]
Tom Selling: “The SEC has finally conceded that its efforts to adopt IFRS have failed. Damage control has begun in earnest, but the ship is still taking on water.”

Institutes attack US mandatory rotation plan [Accountancy Age]
UK institutes have questioned whether forced firm rotation will have the desired impact, saying it could be detrimental to quality and increase audit errors. ICAEW executive director Robert Hodgkinson said mandatory firm rotation has been debated for decades, concluding: “The evidence to date has not been supportive and has pointed towards a potential loss of audit quality”.

Top Stock Picker Jain Won’t Touch Chinese Banks on Bad Debt [Bloomberg]
“We have not owned a Chinese bank, and I don’t see owning one any time soon,” said Jain, who oversees about $15 billion, including three funds that beat 99 percent of peers this year, data compiled by Bloomberg show. “If you look at the accounting, I don’t see how anyone could put a penny there.”

Analysis: Critics say new law makes them tax agents [Reuters]
A U.S. law meant to snuff out billions of dollars in offshore tax evasion has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service — something no other country does for its tax regime.

Ernst & Young Announces Leadership Additions in the Carolinas [E&Y]
Charlotte OMP Curt Fochtmann will now run the entire Carolinas region.

happy dog on a leash in a lush forest

Friday Footnotes: Someone Hates the Quality Control Standard; EY Associate Doesn’t Care; Deloitte Doesn’t Build Ships | 9.13.24

Footnotes is a collection of stories from around the accounting profession curated by actual humans […]