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Friday Footnotes: Private Equity DGAF; Controllers Reflect on Their Future Skill Set; PCAOB Does Something | 9.27.24

VaselineSeptember 27, 2024

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Friday Footnotes: Private Equity DGAF; Controllers Reflect on Their Future Skill Set; PCAOB Does Something | 9.27.24

Footnotes is a collection of stories from around the accounting profession curated by current humans and published every Friday at 5pm Eastern. While you’re here, subscribe to our newsletter to get the week’s top stories in your inbox every Tuesday and Friday.

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Hot Takes

Welcome the whip-crackers (Accounting Today)
Dan Hood has an, uh, interesting perspective on private equity’s influence in the accounting profession.
Providing the capital necessary to fund the retirement plans of the profession’s baby boomer and Gen partner group accountable. That’s because PE doesn’t just bring the capital that accounting firms lack; it also brings a seriousness about goals and bottom lines and key performance indicators that accounting firms have often let slip in the interest of maintaining a collegial atmosphere. PE firms also bring more of a willingness to have those difficult conversations: Collegiality is nowhere near as much of a priority for them as profit.

Survey Says

Deloitte: 50% More Professionals Rank Data Privacy as a Top GenAI Concern in 2024 (TechRepublic)
Concerns over data privacy in relation to generative AI have emerged, a new report from Deloitte has found. While last year only 22% of professionals ranked it among their top three concerns, this year the figure has risen to 72%. The next highest ethical GenAI concerns were transparency and data provenance, with 47% and 40% of professionals ranking them in their top three this year. Meanwhile, only 16% expressed concern over job displacement. Staff are becoming more curious about how AI technology operates, particularly with regards to the sensitive data. A September study by HackerOne found that nearly half of security professionals believe AI is risky, with many seeing leaked training data as a threat. Similarly, 78% of business leaders ranked “safe and secure” as one of their top three ethical technology principles, marking a 37% increase from 2023, further demonstrating how the issue of security is top of mind.

Controllers prep for ‘dramatic’ role changes, focus on value creation: EY (CFO Dive)
Over the past decade, CFOs have seen their roles evolve from a purely numbers-focused position to one where they are expected to be a strategic driver for their organizations — and financial controllers are right behind them. Eighty-six percent of controllers believe their role will change “dramatically” by 2030, according to a report by Big Four firm Ernst & Young released Wednesday. While controllers recognize that change is coming, and coming quickly, they “don’t necessarily have a view on what that will look like,” Myles Corson, EY global and EY Americas strategy and markets leader, financial advisory services said. Indeed, 26% of controllers expect their roles will require completely different, or “unknown” skills by the end of the decade, EY’s Inaugural DNA of the Financial Controller report found — meaning both finance chiefs and controllers must prepare for a coming future where their roles look very different than they do in present-day.

Talent

Hey employers, are you looking to hire accountants to fill remote or hybrid roles? Accountingfly has some right here! Check out this week’s top remote accounting candidates and sign up for Always-On Recruiting to get a fresh batch in your inbox every week. It’s free!

Audit

PCAOB Sanctions Five Audit Firms for Violations Related to Audit Committee Communications or Reporting Requirements (PCAOB)
The PCAOB imposes censures, $165,000 in total purposes, and remedial undertakings that include training and improvement of policies and procedures. Four sanctioned firms failed to make certain required communications with audit committees, as required by AS 1301, Communications with Audit Committees, and/or Rule 3524, Audit Committee Pre-approval of Certain Tax Services. The firms are the following: Accell Audit & Compliance, PA (PDF) – $40,000 civil money penalty and censure; Crowe MacKay LLP (PDF) (Canada) – $30,000 civil money penalty and censure; Ernst & Young AG (PDF) (Switzerland) – $45,000 civil money penalty and censure; Grant Thornton LLP (PDF) (Canada) – $30,000 civil money penalty and censure. Two of these firms, Crowe MacKay LLP and Grant Thornton LLP, also failed to document audit committee pre-approval of certain services, in violation of AS 1215, Audit Documentation. In addition, Accell Audit & Compliance, PA failed to communicate in writing all material weaknesses to an issuer’s audit committee, in violation of AS 1305, Communications About Control Deficiencies in an Audit of Financial Statements.

Auditor Proud Day hits decade of international recognition (Accountants Daily)
Auditor Proud Day lands on the last Thursday of every September and is aimed at attracting more people to the profession and celebrating those already working within it. The day is a CA ANZ-led annual social media movement around the world which attracts all peak accounting bodies to celebrate the audit profession.

Cruising the #AuditorProud hashtag, it looks like everyone else forgot about it too. Not these guys though.

happy #AuditorProud day!👩‍💻 Today is about celebrating our #audit teams worldwide who ensure transparency, trust and accountability in today’s financial landscape. Thank you for your commitment and excellence! We are always looking for our #NextGenAuditors: https://t.co/Ps7of7fCQq pic.twitter.com/or2hfiyi4s

— Forvis Mazars Group (@ForvisMazarsGrp) September 26, 2024

Happy Auditor Proud Day! 🎉 Celebrating our advisors who champion transparency and trust. Thank you for your dedication to excellence! #AuditorProud #AuditorProudDay #Audit #Accounting pic.twitter.com/B2MHhrc01C

— Grassi (@GrassiAdvisors) September 26, 2024

Firm Watch

Deloitte Named ESG Firm of the Year at International Tax Review 2024 Americas Tax Awards (PRNewswire)
Deloitte announced today that it has received four awards at the 2024 International Tax Review (ITR) Americas Tax Awards, honoring its accomplishments delivering market-leading services and solutions. Deloitte was named “ESG Firm of the Year” and “Diversity Equity & Inclusion Firm of the Year,” becoming the first winner of the ESG award category in its inaugural year recognized by ITR. Additionally, Deloitte was named “Tax Technology Firm of the Year” in the Americas region for the seventh consecutive year, as well as “Tax Innovator of the Year” for the fourth consecutive year.

Katz Nannis & Solomon Accounting Firm Sued Over 2023 Data Breach (Bloomberg Law)
Massachusetts-based accounting firm Katz Nannis & Solomon PC failed to protect the personal information of thousands of people that was exposed in a November 2023 data breach, three proposed federal class actions said. Bertha Godbee, Phenicia Brown, and Delores J. Williams alleged in separate lawsuits that KNS breached its duties under common law, contract law, industry standards, and the Federal Trade Commission Act to implement reasonable and adequate measures to protect sensitive data as well as failed to provide accurate and prompt notice of the breach.

PKF O’Connor Davies Welcomes Donald Melody as Partner (PRWeb)
Melody joins the organization’s Public Company and Financial Services practice areas with over two decades of experience conducting and supporting audits and providing consulting advice to broker-dealers, including prior service as a Branch Chief with the Securities and Exchange Commission (SEC) and an Inspections Leader for the Public Company Accounting Oversight Board (PCAOB). “Don’s career spans the auditing spectrum, and his multifaceted background has equipped him with an invaluable and in-depth understanding of the complexities involved with ensuring compliance for organizations of all types,” said Clare Cella, Managing Partner of PKF O’Connor Davies LLP . “In particular, his time with the SEC and PCAOB has afforded him an insider’s perspective into the evolving regulatory landscape that will benefit our clients and our team immensely.”

Barnes Dennig, one of Cincinnati’s largest accounting firms, merges with Indianapolis company (Cincinnati Business Journal)
One of Greater Cincinnati’s largest accounting firms is getting bigger. Downtown-based Barnes Dennig has finalized a transaction to merge an Indianapolis CPA firm into its operations. The deal that will combine Barnes Dennig with Greenwalt CPAs is due to be completed Jan. 1, 2025. “This is a very big deal for us,” Jay Rammes, Barnes Dennig managing director, told me. “It’s quadrupling our presence in that marketplace. You have to be a certain size in a market to build a brand and attract talent. “We wanted to get some critical mass there.”

Technology

Building an AI-ready firm: Strategies for responsible integration and growth (Thomson Reuters)
As evidenced in the 2024 State of the Tax Professionals Report, recruiting and retaining new professionals is a top priority given the shortage of tax and accounting talent and a shrinking labor pool. That’s why many accounting firms are now directing more of their energies toward hiring, training, and engaging high-performing staff, as well as cultivating an AI-savvy work culture. Not only is culture important, but AI must align with your accounting firm’s business goals. AI should not be adopted for its own sake but with clear objectives like improving efficiency, enhancing client service, and driving growth.

Accountants Behaving Badly

Marshall woman accused of bilking family company and spending money at casino (Minnesota Star Tribune)
The former accountant of a family construction company skimmed more than $95,000 from the business and spent it on gift cards, a Spotify subscription and trips to casinos among other things, county prosecutors said. Rikki Lee Kor, 49, of Marshall was charged with 24 criminal counts of fraud in connection with the alleged embezzling that spanned about a year until this summer.

Education

UVM $15M Gift from Grossman Family Foundation to Launch Undergraduate Business Co-op Program (University of Vermont)
A $15-million gift to the University of Vermont’s (UVM) Grossman School of Business will create the university’s largest experiential Co-op program, providing students with real-world experiences working in leading companies to better prepare UVM Catamounts for impactful careers and leadership in business and entrepreneurship. The new undergraduate Co-op program will enhance experiential opportunities for students in the school’s four concentrations (accounting, finance, marketing, business analytics) and themes (entrepreneurship, sustainable business, and global business). More immersive than a typical internship, a Co-op is a rigorous academic experience through which students alternate between classroom education and full-time employment, gaining practical, hands-on experience in their field of study as part of their undergraduate degree. Working in a partner company for a full semester, students apply their classroom knowledge to meaningful, real-world business situations.