Friday Footnotes: KPMG, PwC Have a Rep Problem; CPAs Start Trippin; Eff You, Pay Me | 3.20.20

CPA business executives worried about coronavirus [Accounting Today] CPAs who are also business executives are concerned about the potential global fallout from the coronavirus outbreak, although their outlook on the U.S. economy has risen in recent months, according to a new survey by the American Institute of CPAs.

CPAs gather at State Capitol [Edmond Sun] Look, I love legislative advocacy as much as anyone but WHAT ARE Y’ALL DOING? GO BACK INSIDE!

FDIC Chairman Asks for Accounting-Policy Changes Due to Coronavirus [Wall Street Journal] In a letter, FDIC Chairman Jelena McWilliams requested the Financial Accounting Standards Board, which sets U.S. accounting standards, to give large public lenders the option to defer implementing a new rule on expected future credit losses. The companies that decide to delay implementation would revert to the old model of recognizing losses once they had evidence the losses had been incurred.

KPMG, PwC Work to Repair Reputations Following Scandals, Fines [Bloomberg Tax] Two of the largest U.S. accounting firms, rocked by scandal and large SEC fines, are changing course in an effort to bolster their scrutiny of public company finances and repair their reputations. Both KPMG LLP and PwC LLP have taken similar steps to address ethics lapses that resulted in SEC enforcement cases in 2019. Both have updated audit practices for risk assessment, worked to put better tools and technology into the hands of auditors, and emphasized the importance of ethics and integrity.

Tough decision for some small business owners in Texas: Pay sales tax or pay employees? [Click2Houston] “This is a complex and rapidly evolving situation,” Texas Comptroller Glenn Hegar said in a statement. “Many of our fellow Texans are facing devastating economic conditions as bars, restaurants, retail outlets and other businesses make difficult staffing decisions. The economic impacts are currently the most visible, but a more pressing concern is simmering behind the economic concerns,” the statement said. “A looming health emergency may strain our abilities to provide adequate care and emergency services to our fellow Texans. We must pull together to ensure we can meet the needs we will inevitably face. As part of that pulling together, I ask businesses to remit the taxes they collected from Texans by the established due date.”

How the coronavirus may affect financial reporting and auditing [JofA] Fieldwork could pose a particular problem for auditors. The regulators expressed concern that auditors may have difficulty gaining access to the evidence and people they need to support their audit opinion. The most immediate effect the regulators raised in the statement concerned the disclosures mandated by FASB Accounting Standards Codification (ASC) Topic 855, Subsequent Events. For the time being, the Center for Audit Quality (CAQ), which is affiliated with the AICPA, is advising practitioners to monitor regulators’ statements closely and keep them in mind when planning audits and carrying out their audit and review procedures.

Michael Cohen sues accountant for allegedly screwing up tax returns [New York Post] Michael Cohen has filed a $500,000 negligence lawsuit against his accountant for allegedly making errors on three years of tax returns. Cohen — who is currently serving out a three-year prison sentence — sued accounting firm Getzel Schiff & Pesce, LLP and accountant Jeffrey Getzel in Manhattan Supreme Court Friday for “negligence in preparing Mr. Cohen’s tax returns for the tax years 2013 through 2016.”

US Whistleblower Center Calls for Coronavirus Fraud Task Force [OCCRP] The head of America’s national whistleblowing watchdog has called for a dedicated task force to fight coronavirus-related fraud and corruption among government contractors. Stephen Kohn, the lawyer who chairs the National Whistleblower Center, asked Attorney General William Barr on Wednesday to set up a unit specifically “to monitor and investigate violations of the False Claims Act related to allegations of fraud committed in federal programs related to the Coronavirus outbreak.”

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