KEY ACCOUNTING INDUSTRY INSIGHTS AND UPDATES – DECEMBER 2023

1. Gerald Edelman acquires major stake in WTT
   Mid-tier accounting firm, Gerald Edelman, has taken a major share in WTT, a consulting and advisory services business focused on contractors. Operationally, the firms will remain as independent businesses on a day-to-day basis. However, from a group perspective the entire staff and two directors of WTT, comprising 17 people, will be added to the headcount of Gerald Edelman. Read More
2. ACCA welcomes strengthening of UK auditor ethics code
   FRC urged to keep guidance up to date and monitor emerging issues. ACCA, the world’s leading global accountancy body, is broadly supportive of the UK’s update to ethical standards (ES) for auditors to align with international best practice. However, it notes the need for clarification and additional guidance. Read More
3. House Financial Services Chair Urges IRS to Revised Proposed Digital Asset Reporting Regs
   In a letter to Assistant Treasury Secretary Lily Batchelder, the Chair of the House Financial Services Committee and a bipartisan group of other House members have urged the Treasury Department to revise the proposed digital asset reporting regs released this past August. According to the letter, the proposed reg “would inhibit innovation and harm the digital asset ecosystem, if finalized in its current form.” Read More
4. PCAOB’s 2024 Budget is Set to Increase 11%

   The Public Company Accounting Oversight Board (PCAOB) on November 16, 2023, voted unanimously to approve its 2024 budget of $384.7 million, which is a significant increase of 11% over its revised 2023 spending plan of $347.3 million. When the board estimated its 2023 budget in November 2022, it was $349.5 million. The 2024 spending plan follows a substantial increase of 13% for 2023 over its 2022 budget of $310.3 million. Read More

5. Abip CPAs & Advisors adds two firms.
   Abip CPAs & Advisors, a Houston-based firm, merged in Matthews & Johnson CPAs LLC, a tax, accounting and advisory firm based in New Braunfels, Texas, effective Nov. 1, 2023, and with Brehm, Havel & Co., a San Antonio-based CPA firm, effective Jan. 1, 2024. The Matthews & Johnson deal will extend Abip's market into a new location, where it offers the resources of a larger firm with offices in San Antonio, Houston and The Woodlands, Texas. Read More

6. Accountability Services merges with Boulder Valley CPAs

   Accountability Services, a Seattle-based firm, has combined with Boulder Valley CPAs, a firm based in Lafayette, Colorado. Financial terms of the deal were not disclosed. The combined firm, which will retain the Accountability Services name, will now have 31 team members, including three owners, and 11 staff members coming from Boulder Valley. Read More

7. Nepsis acquires SBGB
   Nepsis, a Minneapolis-based financial advisory and investment management firm, has acquired Sevenich, Butler, Gerlach, & Brazil, a tax, accounting and consulting firm in Saint Paul, Minnesota. Read More

8. Pentagon fails its financial audit for sixth straight year
   The U.S. Defense Department failed for the sixth consecutive year to score a clean financial audit, a goal routinely achieved annually by businesses that have a fraction of its $3.8 trillion in assets and $4 billion in liabilities. Pentagon officials nonetheless claimed significant progress in tracking its assets and correcting hundreds of deficiencies in its accounts. Read More

9. EY names first female global CEO
   Ernst & Young LLP picked Janet Truncale as its next chief executive officer, placing the first woman atop a Big Four audit firm's international network. She will succeed Carmine Di Sibio on July 1, according to a statement from the London-based accounting giant. Truncale most recently was the regional managing partner for EY's financial services organization in the Americas, which includes 14,000 professionals, according to the statement. Read More

10. IRS appoints next CIO
    The Internal Revenue Service has appointed Rajiv Uppal as its next chief information officer, to assist with the agency's transformation work, beginning in early 2024. Uppal, who currently serves as the director of the Office of Information Technology and chief information officer for the Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services, has more than 25 years of information technology expertise in both the public and private sectors. Read More

11. PwC defends plans to cut 600 jobs rather than bosses’ pay
    PwC’s chair has defended plans to cut up to 600 jobs rather than cut partner pay amid a slowdown in client demand, saying it was important to offer “competitive” pay packages to senior staff. The accounting and consultancy firm said it was trying to right-size the business after weaker growth, rising costs and a drop in the number of employees quitting on their own accord, in a process usually referred to as natural attrition. Read More

12. EY cuts U.K. partner payouts as Big Four face slowdown.
    Ernst & Young LLP partners in the U.K. saw their share of profits drop for the first time in three years as the Big Four audit firms face economic uncertainty. Partners at the accounting firm's U.K. arm pocketed an average of £761,000 ($923,000) last year, compared with £803,000 the year before. The firm also cut its pay rise and bonus pool by about 30% to £155 million. Read More

13. Adani auditor EY faces inquiry by India’s accounting regulator
    India's accounting regulator is investigating an EY member firm that audits five companies that are part of billionaire Gautam Adani's eponymous conglomerate, a source familiar with the matter said on Wednesday. The National Financial Reporting Authority (NFRA) started an inquiry into S.R. Read More

14. PCAOB fines Canadian firm $175K
    The Public Company Accounting Oversight Board imposed a $175,000 fine on Smythe LLP, a Canadian firm based in Vancouver, for violating its rules and quality control standards on four audits. Read More

15. NetSuite beefs up AI capabilities.
    Cloud-based accounting software provider Oracle NetSuite announced a number of enhancements to its core products, even as it marked the 25th anniversary of its first iteration as NetLedger, at its user conference, SuiteWorld, last week. Read More

16. IRS opens PTIN renewal period for 2024
    The Internal Revenue Service began allowing nearly 800,000 tax preparers to renew their Preparer Tax Identification Numbers for next year on Tuesday. The PTIN renewal fee has been drastically reduced for 2024 after a long-running lawsuit. The fee to renew or obtain a PTIN for 2024 is $19.75, down from $30.75 for 2023. The fee is set at $11 per application or renewal, plus an $8.75 fee payable to a third-party contractor. The PTIN fee is nonrefundable. Read More

17. Eide Bailly to merge in High Plains Technology
    Eide Bailly, a Top 20 Firm based in Fargo, North Dakota, is adding High Plains Technology, a technology solutions company based in Sioux Falls, South Dakota, effective Jan. 8, 2024. The deal will add four partners and 14 staff to Eide Bailly's Sioux Falls and Fargo offices. Financial terms were not disclosed. Eide Bailly ranked No. 19 on Accounting Today's 2023 list of the Top 100 Firms. The firm earned revenue of $617 million over the past year and has over 3,300 staff members and more than 350 partners. Read More

18. McMillan Consulting acquires Paul Rafanello’s CPA practice
    McMillan Consulting LLC, a firm in Warwick, New York, has acquired the practice of Paul Rafanello, whose CPA practice is also located there. The acquisition will provide clients of both firms access to counsel from McMillan Consulting president and CEO Patricia McMillan, a CPA for more than 39 years. Her firm provides tax preparation for individuals and businesses and consulting in the areas of general finance, credit and debt, risk management and auditing. Read More

19. IRS urged to crack down on wealthy tax cheats in Puerto Rico
    A group of U.S. lawmakers is asking tax authorities to accelerate an investigation into rich Americans seeking lucrative tax breaks in Puerto Rico. Twelve Democratic members of the House of Representatives asked the Internal Revenue Service on Friday to expedite a congressional request for information about efforts to root out people allegedly abusing Puerto Rico's tax benefits. Read More

20. New regs proposed on conservation easement deductions
    The Department of the Treasury and the IRS have issued proposed regulations of guidance under a new section of the law that disallows deductions for certain charitable conservation contributions by partnerships and other pass-through entities. The SECURE 2.0 Act of 2022 added new subsections to the part of the tax law that provides rules for deductions for charitable contributions under IRC Sec. 170. Read More

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