KEY ACCOUNTING INDUSTRY INSIGHTS AND UPDATES – AUGUST 2023
1. BDO USA Continues on Sustainable Growth Path; Reports Revenue Increase of Over 13%
One of the nation's leading accounting and advisory firms, today announced revenue of $2,822,600,000, representing a year-over-year increase of 13.3% for the 12-month period ending April 30, 2023. This is the eleventh consecutive year of growth under CEO Wayne Berson’s leadership. Within the firm, every practice increased revenue, with advisory, assurance and tax experiencing increases of 12.1%, 13.4% and 14.4%, respectively. Read More.
2. PCAOB renews inspections in China as tensions mount
The Public Company Accounting Oversight Board sent a team to Hong Kong last month to review 2022 audit reports of some of the most high-profile Chinese stocks listed in the U.S., according to people familiar with the matter who asked not to be identified discussing private information. Read More.
3. AuditFile Announces Acquisition of Advantage Audit from Wiley
AuditFile, Inc., the developer of the award-winning cloud-based audit automation platform, has announced aquired Advantage Audit from John Wiley & Sons, Inc. Advantage Audit is an audit planning aid and audit program series designed to help auditors comply with risk-based professional standards in a straightforward and efficient manner. AuditFile also announced it has relaunched the Advantage Audit product as “AuditFile Advantage Audit AI.” Read More.
4. IRS quietly changes rule on how your children's inheritance is taxed - here's what you need to know to avoid a shock bill
The IRS has quietly changed the rules around taxes on inheritances, putting Americans in danger of being caught out if they try to transfer assets to their children. The agency has curbed the tax break on a particular kind of trust often used to minimize estate taxes.In the last decade, more families have begun utilizing 'irrevocable' trusts - that allow Americans to protect their assets and avoid a lengthy probate process when a relative dies. Read More.
5. Xero Launches Beautiful Business Fund for Small Businesses
Coinciding with Xero Day 2023 – the day of Xero’s founding 17 years ago – Xero, the global small business platform, today announced a new global small business fund with more than NZ $750,000 (apx. US $460,000) in funding, to support the future aspirations of small businesses globally. The Xero Beautiful Business Fund will officially launch with a call for entries at Xerocon Sydney, taking place in Sydney on 23-24 August 2023. Read More.
6. PwC tells UK staff to expect smaller pay rises and bonuses as Big Four hit by slowdown
PwC has warned its 25,000 UK staff to expect smaller pay rises and bonuses this year as Big Four accounting and consulting giants face a slowdown. The firm said that “challenging” market conditions meant workers should not be anticipating major pay bumps despite inflation remaining stubbornly high. Read More.
7. IFAC offers quality management guidance for small audit firms
The International Federation of Accountants released the second installment Wednesday of its advice for implementing the International Auditing and Assurance Standards Board's quality management standards. Installment Two: Developing a Detailed Implementation Plan offers a step-by-step approach to identifying a firm's quality objectives; completing its quality risk assessment process; identifying existing, or creating new, responses to those quality risks; and implementing, documenting, and communicating their system of quality management. Read More.
8. Wipfli announces that Clayton & McKervey will join firm
Wipfli, a top 20 national advisory and accounting firm, announced today it has entered into an agreement with Clayton & McKervey that will result in more than 90 Clayton & McKervey shareholders and associates joining Wipfli. Clayton & McKervey is a full-service public accounting firm, providing tax, audit, digital advisory and business consulting to domestic and foreign clients. Read More.
9. UBS picks EY as main auditor for Credit Suisse combo
UBS Group AG has retained EY as the main auditor for its combined business with Credit Suisse starting next year, according to a person familiar with the matter. EY has been UBS's main auditor since 1998 and the bank paid the auditing firm $70 million in fees for 2022, according to its annual report. Credit Suisse had previously used rival big-four auditing firm PwC as its main auditor and paid $90 million in fees for 2022, according to its annual report. Read More.
10. U.S. Inflation Drops to 3%
The U.S. inflation rate slid to a more than two-year low, a major step toward ending the cost-of-living emergency — and possibly the Federal Reserve’s historic monetary tightening, too. At 3% last month, consumer-price inflation is now just one-third of the level it reached a year ago, which was the highest in four decades. And the details for June were also better than expected, with key measures of underlying inflation coming in below forecasts. Read More.
11. Tech News: KPMG to invest $2B in AI
Big Four firm KPMG will be investing $2 billion over five years in AI services and capacities in partnership with Microsoft. As an early access partner for Microsoft 365 Copilot and Azure OpenAI Service, KPMG professionals will pilot the technologies with select business groups across the global organization to enhance client engagements and accelerate digital solution development. Read More.
12. Ryan Expands Property Tax Team with Acquisition of MJI Consulting
Ryan, a leading global tax services and software provider, has announced the acquisition of MJI Consulting Group, a property tax advisory firm serving clients in Western New York and Connecticut. Read More.
13. UK businesses plan to expand to India, says Grant Thornton
New research from Grant Thornton UK LLP’s business outlook tracker found that India is a core focus international growth market for the UK mid-market. The firm’s tracker, which surveyed 608 mid-sized businesses in the UK, revealed that over one third (36%) of UK business leaders are planning to invest more in growing internationally in the next six months. Many of these businesses have their sights set on India, with 73% of respondents identifying the country as a focus international growth market. Read More.
14. House Republicans Push for New Crypto Rules After Ripple Decision
Key Republican members of the US House of Representatives formally unveiled a bill to establish rules for oversight of crypto markets in the wake of a recent court ruling that is viewed by some observers as favorable for the sector. Read More.
15. IRS offers FTC relief for cost-recovery, attribution rules
The IRS released proposed regulations (REG-112096-22) on Nov. 18 that provide limited relief for unpopular final regulations issued in January. The new proposed rules soften the cost-recovery requirement for foreign taxes, offer a new exception from the source-based attribution requirements to royalty withholding taxes, and exclude disregarded sales from the definition of “reattribution asset” for purposes of allocating and apportioning foreign income taxes. The new proposed regulations were highly anticipated by taxpayers and practitioners after the final FTC regulations were heavily criticized for tightening the rules too much for determining which foreign levies are creditable foreign taxes. Read More.
16. Top US Consumer Watchdog Plots More Regulation for AI in Lending
The top US consumer financial watchdog is sharpening his focus on lenders’ use of artificial intelligence when making credit decisions, signaling that fresh restrictions loom for financial firms. Rohit Chopra, director of the Consumer Financial Protection Bureau, indicated that new regulation may be coming soon. The CFPB’s broad mandate means that everyone from banks to online lenders and mortgages-servicing firms could be affected. Read More.
17. Booz Allen pays $377.5M over cost accounting
Booz Allen Hamilton Holding Corp. said it will pay $377.5 million under a settlement agreement with the Department of Justice to settle a civil investigation related to its cost accounting. The case is "one of the largest procurement fraud settlements in history," Principal Deputy Assistant Attorney General Brian Boynton said in a press release. The U.S. alleged that from 2011-2021, Booz Allen improperly charged costs to its government contracts that should have been billed to commercial and international ones. The DOJ was acting for the Defense Contract Management Agency in the matter. Read More.
18. UK’s policymakers urged to accelerate creation of a trustworthy AI ecosystem
The UK government needs to work fast on the detail of regulating artificial intelligence (AI) to give business the certainty it requires. At the same time, the UK should work to secure international co-operation and interoperability, while ensuring that on the domestic front there is a high level of joined-up thinking across sectors and stakeholders (government, business, regulators and civil society) to avoid duplication or things falling into gaps between different regulators. Read More.
19. Pod Point hires KPMG as new auditors
Pod Point has announced that the board has approved the appointment of KPMG LLP (KPMG") as the company's new external auditor following the conclusion of a competitive tender process led by the company's Audit and Risk Committee. Read More.
20. On the move: MACPA elects a new chair
KPMG partner Christina Aspell will lead the Maryland Association of CPAs' board; Dean Dorton consolidates in Raleigh; BPM dives further into carbon accounting; and other firm and personnel news from around the accounting profession. Read More.
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