Hi and welcome to another week (the lack of an exclamation point here should tell you how I’m feeling about it). ICYMI: the weekend discussion was about this new TurboTax ad making waves among tax practitioners:
The motivational poster in the background is 😙🤌
PwC UK is restructuring. That’s rarely good news, especially given recent layoffs and lowered partner payouts they’ve had in the last year or so.
PwC’s new UK chief has launched an overhaul of its operations in the country, which will involve creating a standalone technology and artificial intelligence unit, in a move that bosses acknowledged could be “unsettling” for staff.
Yeah, that doesn’t sound good.
The Big Four accounting firm told employees last week that it would embark on a reorganisation of areas of the business affecting about 2,700 staff and partners, adding that it was part of its “new vision to become the pre-eminent firm”, according to a document seen by the Financial Times.
Under the plan, PwC will create a “digital delivery unit” focused on tech innovation, AI engineering, cloud and data. The firm will also overhaul parts of its consulting, deals, risk and tax practices by moving and merging certain functions, creating six new teams.
This story was mistakenly left out of Friday Footnotes so putting it here instead. The AICPA is putting in work for taxpayers affected by Hurricane Helene:
The IRS announced relief for taxpayers in all or part of seven states that Hurricane Helene damaged (IR-2024-253). The AICPA, which requested IRS relief in a comment letter, on Thursday also requested filing extensions from the Financial Crimes Enforcement Network (FinCEN) related to the filing of beneficial ownership information (BOI) and reports of foreign bank and financial accounts (FBAR) for major disaster victims.
The IRS is providing disaster relief for individuals and businesses affected by Hurricane Helene, including all of Alabama, Georgia, North Carolina, and South Carolina. The relief also covers 41 counties in Florida, eight counties in Tennessee, and six counties and one city in Virginia.
BDO unironically released a survey about what clients expect from their audit firms.
The inaugural 2024 BDO Audit Innovation Survey, released today, finds that companies increasingly expect their audit firms to leverage advanced technologies like AI to enhance the audit process, believing that this will lead to a higher-quality audit. However, survey results also indicate that companies believe working with experienced, effective audit professionals is just as important as ever, even with the advent of new technologies.
Highlights:
- Finance leaders believe technology can improve audit quality: Just over half of respondents anticipate technology will enhance audit quality (54%); however, finance leaders continue to place high importance on auditor industry knowledge and professional skepticism as contributors to a high-quality audit.
- Mindfully deployed technology unlocks new levels of trust: 63% of senior finance leaders say trust is somewhat or significantly enhanced for them and their key stakeholders when auditors use advanced technology, and 64% say they look for a firm to use AI before even engaging with an auditor.
- Finance leaders will leverage AI to supplement the talent shortage: Although recruiting experienced accountants is the top strategy for companies grappling with the labor shortage, 61% plan to improve workforce inefficiencies with AI.
Cool, now do one about offshore work.
I learned something new today thanks to the Zoomers on TikTok obsessed with Lyle and Erik Menendez. Apparently their dad’s dad owned an accounting firm in Cuba:
José Menendez came to the United States as a penniless teenager and was determined to succeed, demanding excellence of himself and later his two sons, Lyle and Erik. However, the Menendez brothers would eventually say that drive for prestige and fortune came with a dark side that nobody knew about—leading them to take deadly action.
José Menendez was born in Havana, Cuba, in 1944. According to crime researcher and author Rachel Pergament, his father was a soccer player who owned an accounting firm, while his mother was a star swimmer and member of the country’s sports hall of fame. He had two older sisters, Terry and Marta.
AND their dad got his first job at what would eventually be PwC:
Now with a family to support, José was more determined than ever to succeed in America. According to The Los Angeles Times, he picked up his first professional job at the Coopers & Lybrand accounting firm. One of his clients, Lyon’s Container Service in Illinois, was so impressed by his work that the company hired him away to become its comptroller. Within three years, José was company president.
Well I guess I need to force myself to watch one of these new documentaries because I was a kid when the Menendez brothers’ trial happened back in the 90s and certainly wouldn’t have been interested in their dad getting his start in Big 4. The Big 4 for me back then was Mountain Dew, Doom, Nuthin’ but a ‘G’ Thang, and sleeping until noon.
Did you guys see this thing with a Deloitte principal leaking a text conversation he had with JD Vance back in 2020? We really should write it up. Well now apparently Deloitte is getting some heat from the red side, reports Washington Post:
Republicans backing Donald Trump are threatening Deloitte, a consulting firm that is one of the federal government’s largest business partners, with the loss of billions of dollars in contracts because an employee shared messages from 2020 in which GOP vice-presidential nominee JD Vance criticized the former president’s record.
…
“I’ve never seen anything like this,” said Kedric Payne, senior director of ethics at the nonpartisan Campaign Legal Center and former deputy chief counsel in the Office of Congressional Ethics, adding that the goal was probably to pressure Deloitte into firing the worker. “You can’t imagine that if one employee out of thousands made a statement that offended an official, that then the government contracts would be in jeopardy.”
When WaPo first reported it they didn’t name the principal — it’s Kevin Gallagher (don’t worry that cat has been out of the bag for a while) — so Breitbart wrote this on September 27: Exclusive — Deloitte Consultant Behind Ethically Questionable Leak of JD Vance Communications to Washington Post.
This could get messy.
EY is still dealing with headaches related to its work on NMC Health. If you can call it work. FT:
EY missed a chance to spot fraud promptly at collapsed hospital administrator NMC Health because it failed for seven years to access a key financial register, according to a $2.7bn legal claim brought by administrators.
A skeleton argument prepared for a procedural hearing at London’s High Court on Friday said the auditor would have “quickly” identified the alleged fraud that led to NMC’s collapse if it had secured access to the company’s general ledger. Inspecting the general ledger — a record of all a company’s financial transactions — is regarded as a basic yet critical task in an independent audit.
Earlier:
Young professionals at PwC Belgium will be driving to and from the client site in new Mini Coopers:
According to PwC Belgium, the procurement is likely to enable the company to meet its fleet emission targets faster than initially assumed. In 2021, the Belgian PwC subsidiary committed to reducing the emissions of its vehicle fleet by 20 per cent every two years – with the aim of being emission-free by 2030. By phasing out 200 BMW 1 Series and purchasing new electric Minis for the company’s young professionals, it could now reach its target as early as 2028.
[M]ore than three-quarters (77%) of its vehicle fleet is now electric or partially electric. However, the company does not state the total number of cars in its fleet. A total of 200 Mini Cooper electric vehicles will be delivered by the end of the year. At a recent event organised by manufacturer Mini Belux and PwC Belgium, almost 160 young employees were welcomed in Vilvoorde to introduce them to the vehicle and hand over the keys.
Why don’t all PwCs give out Mini Coopers? It’s perfect!
I think that’s enough for now. Let me know by email or text if you spot a story we should write about, have a tip, or just want to share an observation on the current state of the accounting profession. I will be deeply engrossed in Silent Hill 2 beginning tomorrow but promise I’ll get back to you.
Have a great week! That exclamation point I meant.