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Long Reads
Deloitte held close ties to a now-sanctioned Cyprus firm accused of shielding oligarchs’ wealth, records reveal [International Consortium of Investigative Journalists]
In March 2023, amid a wartime clampdown on secretive Russian financial networks around the world, the accounting giant Deloitte publicly denied having any recent affiliation with an obscure financial firm in the Mediterranean republic of Cyprus. The firm, MeritServus, was on the verge of being sanctioned by British authorities for helping hide assets tied to a key billionaire close to Russian President Vladimir Putin. “Since 2005, MeritServus has not been part of, or affiliated with, Deloitte Cyprus or any other Deloitte firm,” the accounting firm told The Guardian. Deloitte had good reason to make the statement: MeritServus had started as a division of Deloitte in Cyprus and was now coming under intense scrutiny from media and regulators. But Deloitte’s statement masked more than a decade of the two firms’ official business relationship, according to corporate filings in Cyprus and leaked email exchanges.
What we now know about large accounting firms, and what we don’t [The Mandarin]
The accounting profession is currently the focus of lawmakers trying to work out how best to legislate to improve professionals’ behaviour and minimise harm to the community following PwC Australia’s much-publicised breach of confidentiality almost a decade ago. The PwC tax leaks saga that blew up in January 2023 has seen a revisitation of old debates about the accounting profession, management of conflicts of interest, government consultation with experts, breaking up or refashioning business structures, and defining what firms can do for audit clients. What anyone without a sense of history needs to appreciate is that the world’s toughest regulators have tried to tackle these issues for years. There are no easy solutions.
Audit
Is Anyone Crazy Enough to Audit Super Micro Computer? [Wall Street Journal]
Super Micro Computer’s stock has been in a tailspin since Ernst & Young dumped the company as an audit client about a year after it replaced Deloitte & Touche. If EY found something that Deloitte missed then the situation could get even trickier for the server maker that once seemed unstoppable. There are enough red flags that Deloitte should be trying to find out what happened.
The Profession
The problems PE solves [Accounting Today]
Accounting Today is just full on jerking off private equity now. This will age like milk:
Firm Watch
Cover & Rossiter ‘goes big’ with Bonadio merger [Delaware Business Times]
Cover & Rossiter offers audit, tax and trust services as well as financial planning to clients as well as accounting services to small to medium businesses. Holliday said that joining Bonadio Group is a natural progression for the firm to evolve as accounting firms faced headwinds during the COVID-19 pandemic. When Paycheck Protection Program (PPP) loans and Emergency Injury Disaster loans (EDIL) were issued to thousands of businesses in the state, Cover & Rossiter had to quickly rise to meet the needs to ensure the paperwork was on point. “When the pandemic hit, the pressure was really on and we had to rapidly pivot to deal with those programs and, as a smaller firm, we didn’t necessarily have the bandwidth,” MD Marie Holliday told the Delaware Business Times. “I also feel there’s a shortage in accountants, as we compete against banks and trust companies, so it got harder over time to keep talent. With artificial intelligence coming in, it became clear we couldn’t handle this on our own. So we thought, ‘We have to go big or go home.'”
Aprio Expands to Southern California with Addition of Kirsch Kohn & Bridge [PR Newswire]
Aprio announces its expansion to Southern California with the combination with Kirsch Kohn & Bridge (KKB), located in Woodland Hills, Calif. Effective November 1, 2024, KKB joined Aprio, adding five partners and more than 30 professionals.
Accounting firm KSM announces move to new nearby office [IBJ]
Katz Sapper & Miller—the largest accounting firm in Indianapolis—plans to relocate to a new office in mid-2026 in a move that KSM says represents its embrace of post-pandemic work habits. “I think there’s a benefit to being in the office, and the purpose of the design is to enhance the office experience,” CEO Tim Cook said. “We’re trying to create space that reflects how we work today, versus maybe how we did five or 10 years ago.”
Talent
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Chicago’s largest accounting firms see decreasing headcounts among major players [Crain’s]
Crain’s pinned this on the accountant shortage but anyone with half a brain knows that’s bullshit. Kindly do the needful and show us how much work these firms are shipping overseas.
The largest accounting firms in the Chicago area, which are ranked by local professional staff as of June 30, barely saw an increase in numbers from 2023 to 2024. These firms saw median growth of less than 1%. The top 25 firms didn’t see much of an increase in local certified public accountant, or CPA, headcounts either, with median growth hovering slightly above 0%.
Addressing the talent shortage in the accountancy profession: Singapore’s strategic initiatives [FutureCFO.net]
The accounting industry in Singapore is experiencing a talent shortage. This is exacerbated by the rapid pace of technological advancement that demands a workforce skilled in both traditional accounting practices and new digital tools. To address these challenges and come up with strategies to ensure a robust pool of accountancy talents, the Accounting and Corporate Regulatory Authority (ACRA) with the support of Singapore’s Ministry of Finance (MOF) has set up the Accountancy Workforce Review Committee (AWRC) in 2022. After 48 meetings and focused group discussions (FDGs) amongst over 300 participants, AWRC has come up with a report highlighting recommendations to build a quality and sustainable talent pipeline for the accountancy profession.
ESG
66% of Young Professionals Feel Responsible for Driving ESG Initiatives: KPMG Report [ESG News]
A recent KPMG International report, Leaders 2050, reveals that young professionals worldwide are feeling disempowered in supporting their organizations’ climate goals. The survey, involving over 800 young people aged 18 to 35 across 48 countries, indicates that while 66% of respondents feel responsible for driving Environmental, Social, and Governance (ESG) impact, only 10% feel they have the autonomy or empowerment from leadership to act effectively.
Only 41% of Global Companies Have a Published Climate Transition Plan: EY Report [ESG News]
The 2024 EY Global Climate Action Barometer reveals that while climate disclosures have improved significantly over recent years, urgent action remains lacking among companies to combat the intensifying climate crisis. Despite an increase in disclosure coverage to 94% and a quality score of 54%, this growth is not sufficient to align with the global climate agenda.
Fraud
West Fargo woman accused of stealing nearly $830K from Fargo employer [KFGO]
According to court records, Mary Peterson was in charge of making cash deposits for Lunde Auto until she was fired in 2022. Her firing came after the general manager learned she had embezzled nearly $830,000 over seven years. The theft came to light in January 2022 when the company’s accounting firm realized a large amount of money was missing from a bank account. An accountant suspected Peterson was stealing from the company after an email exchange with her over a $450 discrepancy.