Friday Footnotes: Don’t Trust Your Auditors; KPMG Partners Score; A PwC TikTok Star | 8.6.21
Your Auditor Is Not Your Friend [Bloomberg Opinion] Accounting is an unusual professional-services business because a lot of what accounting firms do — tax and structuring advice, consulting, etc. — is very much in this vein of wise trusted advice, but one core function of accounting firms — public-company auditing — is … only partly like that. Public-company executives do, to some extent, think of their auditors as “the people I call with accounting questions,” and they want to hire auditors whom they like and trust and who they think have good judgment and good bedside manner. But auditors are also in a somewhat adversarial position to their client companies, or rather to the clients’ executives: Their job is to audit the clients’ accounts, to check them for mistakes, to flag problems, to certify to the market that the accounts have been reviewed independently and found to be acceptable. If the auditors are best friends and trusted advisers to the executives, then they can’t be independent, and the market can’t trust their audit results.
FRC begins hunt for new chair after its governance dubbed a ‘grave risk’ [City A.M.] Just two weeks ago, the interim head of the Financial Reporting Council, Keith Skeoch, warned of a “grave risk” that the slow pace of appointing board members could result in delays to the watchdog’s reformation plans, in its annual report.
KPMG partner profits jump 17pc on strong client demand [Australian Financial Review] KPMG has posted a 17 per cent increase in annual partner profits thanks to ongoing strong demand for consulting services despite the pandemic, meaning eligible staff are now in line to receive double their expected bonus. Overall revenue at the firm increased by more than 9 per cent to $1.9 billion in the year to June. The partner profit jump comes just a year after the profit pool shrunk by 12 per cent due to the initial virus-related slowdown.
Deloitte Makes Fifth Cybersecurity Acquisition In 2021: aeCyberSolutions [CRN] The acquisition, which is Deloitte’s fifth cybersecurity-related acquisition so far in 2021, aims to quickly expand the company’s capabilities in this business, said Wendy Frank, Deloitte Risk & Financial Advisory Cyber 5G and IoT leader and principal of Deloitte & Touche.
Shrinking the Tax Gap Requires a Renewed IRS Workforce [Government Executive] In addition to replenishing its ranks, the agency must redefine the skills and expertise required of those employees, and then recruit, train, deploy and, above all, hold them accountable for successfully shrinking the tax gap. An integral part of doing that is providing first quality service to every taxpayer who interacts with the IRS.
Former Enron Adviser Praises ‘Accounting Gimmicks’ [Wall Street Journal Opinion] These days truth seems to be getting much stranger than fiction. Now a former adviser to Enron, which collapsed in an infamous 2001 accounting scandal that sent various of the firm’s executives and bankers to prison, has published an astounding endorsement of “budget chicanery.”
This North Texas Archer Has More TikTok Followers Than Most Olympians [TexasMonthly] Jennifer Delaney is a “mergers-and-acquisitions consultant” at PwC.
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