Monday Morning Accounting News Brief: Every Day Is Fools’ Day For Some Accounting Employers; McKinsey Now Paying People to Leave | 4.1.24
A belated Happy Easter to those who celebrate and an on-time Happy April Fools’ Day to all. We aren’t planning any shenanigans today so you won’t see any fake stories here today. TBH our brand is still recovering from the great Bitcoin debacle of April Fools’ Day 2014. Plus who can even tell what’s real and what’s fake on the internet these days? Here are some things I’m pretty sure are true.
Business Insider wrote about the accountant shortage, specifically Tupperware griping in regulatory filings that it can’t find enough people (again):
The accountant shortage is so bad that companies are delaying filing key mandatory reports.
On Friday, Tupperware said it didn’t have enough accountants to get its annual report out on time. The storage container manufacturer is the latest on a growing list of companies that have delayed their annual reports for a host of reasons. About 70 companies have postponed annual reports this year, up 40% from last year, research company Intelligize tallied last month.
In a regulatory filing, Orlando-based Tupperware blamed the delay on “significant” past and present accounting attrition, “which has resulted in resource and skill set gaps, strained resources, and a loss of continuity of knowledge.”
Tupperware added that previous delays in filing its 2022 annual report led to postponement of its quarterly reports, which subsequently pushed back work on its 2023 annual report.
No mention what Tupperware pays but it does say they’ve got a single job opening up on LinkedIn for an AP Accountant in Poland. Salary.com says an entry level staff accountant at Tupperware makes an average of $59,401 as of February 26, 2024, but the range typically falls between $54,201 and $65,401. The company doesn’t list salary on Workday openings I found and only lists a handful of positions like a Sr. Tax Analyst in Orlando and “Manager, Corporate and Intercompany Accounting” in Mexico. Finally, Glassdoor has some crazy numbers based on two data points:
If this were anywhere near accurate, they wouldn’t be having these issues.
Related to this I suppose, Alaska Public Media did a story on the city of Anchorage having some municipal audit problems:
A long overdue financial audit of Anchorage’s bookkeeping may keep the city from getting tens of millions of dollars in grant money.
Annual, audited financial records are a condition to keep various grants flowing to the city from the state and federal governments. For at least one program, the city is at risk of running out the clock on its fourth extension with the state to close out its 2022 books.
It’s Joy Merriner’s job as an independent auditor with the firm BDO to go through the city’s financial statements and make sure they are fair and accurate. She told an Anchorage Assembly committee last month that there is no evidence of money “walking out the door,” but a lot of transfers have been recorded incorrectly and inconsistently amid heavy staff turnover in the city’s finance department.
The city controller acknowledges why there’s such a problem:
City Controller Michael Cipriano told an Assembly committee that turnover and staffing shortages have been the biggest challenge to getting the financial audit done. When he started in the position last May, he said he only had seven out of 17 accountant positions filled.
“A lot of this work that we’re doing is, I’d call it forensic accounting,” Cipriano said. “We’re looking backwards at work other people have done to try and figure it out. So that’s – that’s a – it’s difficult.”
He said he’s up to 15 accountants now. But they could be poached at any time.
“There’s a shortage of accountants out there,” he said. “You have to pay them, and they know – everyone on my team is well aware, if they go across the street and work for the state, they can get a 20% raise and work remote.”
Let’s be clear, this issue isn’t limited to Anchorage. And it’s going to get much, much worse.
Journal of Accountancy on what CPAs need to know about Microsoft’s big AI rollout:
Microsoft is investing heavily in Copilot, a suite of AI-powered features for applications across its portfolio. The upgrades are already rolling out to business users of productivity apps including Excel, Office, and Outlook, as well as for business tools like Power Platform. Early reviews indicate Copilot could be a powerful new force for accountants and other knowledge workers.
“Is it hype or reality? It’s definitely reality. It’s such a game-changer,” said Virginia-based Cherie Gartner, KPMG’s global lead partner for Microsoft, who has helped activate Copilot features for her firm and some of its clients.
The scope and scale of Microsoft’s Copilot effort is a “shocking signal” of the potential the company sees in large language models, the machine-learning technology that underpins GenAI, said Jason Staats, CPA, a former accounting firm head in Portland, Ore., who founded and runs the accounting technology community Realize.
“Long term, there is no aspect of our work that I don’t see being impacted by this, in the very best way,” he said.
The consulting market in the UK really sucks right now. The Times on what McKinsey is up to over there:
McKinsey is offering to pay hundreds of its senior employees to leave the firm and look for work elsewhere, the latest attempt by the consulting giant to reduce staff amid a sector-wide downturn.
Managers at the UK side of the business are being given the chance to spend up to nine months “on search”, an internal phrase referring to employees who are spending their time looking for a new job, rather than working on client projects. Staff would still be receiving their full salary, which would run into the hundreds of thousands of pounds if they spent the maximum nine months trying to find employment elsewhere.
If the employees have not found a new employer by the end of the nine months they have to leave the firm.
Well at least it isn’t that bad over here…
Managers at the US firm have received similar offers but the period of time allowed to search for work may differ, according to those familiar with the situation. It is understood that hundreds of employees between the two firms will be weighing up these proposals, although final numbers are still being worked out.
Shit. This is what happened in the US last week:
McKinsey & Co. warned some US consultants last week they are running out of time to win promotion, raising the “up or out” pressure on staff as the global consulting industry struggles.
The memos were sent to some engagement managers and associate partners in North America, reminding them staff in this role have an average of two and a half years to be promoted, people familiar with the matter said. It’s the latest sign that McKinsey may be rethinking its staffing following several years of aggressive hiring and low attrition rates.
“We have always maintained a high bar for performance,” according to a statement from McKinsey. “We routinely refine our approach to development and performance to ensure we continue to meet these goals, and we continue to recruit and hire robustly.”
FT’s Moral Money newsletter talks about EY’s ambitious net zero plan maybe not panning out by the deadline they set for themselves:
EY climate plan hit with a dose of reality
As businesses rushed to roll out long-term green targets in the run-up to the COP26 climate summit, the Big Four accounting firm EY decided it wanted to make a bigger splash.
While other companies pledged to reduce their carbon emissions to net zero by 2030 or 2050, EY grabbed headlines in 2021 by saying it would achieve this milestone within just four years.
Now, a year away from its 2025 deadline, EY is reconsidering its climate plan — a move that reflects rising standards and scrutiny around such green corporate pledges.
When I asked EY if it could confirm its commitment to achieve net zero status next year, it declined to do so. Instead, it gave the following statement:
“EY remains committed to a net zero target. We are currently working on the next phase of our science-based decarbonization plan, integrating new and emerging standards. At this time, we cannot confirm the timeline for that plan, but we will provide a substantive update later in the year.”
Well that answers that.
Crowe announced a FY25 partner class of 52 people today. Would be pretty funny if they take it back tomorrow.
Orlando Weekly says Deloitte is trying to distance itself from the Florida unemployment system years after the system they built collapsed under the weight of early COVID claims:
After facing weeks of criticism because of Florida’s troubled unemployment system, Deloitte Consulting LLP said in a newly filed court document that it has had “no connection” to the online system in more than five years.
Deloitte filed the document Monday in Leon County circuit court as it and the Florida Department of Economic Opportunity argue for the dismissal of a potential class-action lawsuit filed on behalf of residents who have faced trouble getting benefits amid the COVID-19 pandemic. Deloitte had a state contract to develop the CONNECT unemployment system, which began operating in 2013.
“Deloitte has had no involvement in the implementation, maintenance or upgrade of the CONNECT system for more than five years,” the company’s attorneys wrote in a motion to dismiss the lawsuit. “And it has never had any involvement in processing or adjudicating the state’s unemployment benefit claims, including during the COVID-19 pandemic. Despite plaintiffs’ frustrations given the current circumstances, a private software consulting firm is an improper target for claims arising from denied or delayed unemployment benefits. Simply put, Deloitte should not be in this case.”
Earlier:
I got super excited when I saw a headline about former Deloitte CEO and Dr. Phil lookalike Barry Salzberg joining Embark’s board of directors but then I realized it wasn’t the doggy DNA company Embark but some advisory firm so meh. Whatever, here’s a press release.
PwC Japan elected a new CEO, here’s what he said (which is funny considering all the stuff his colleagues in Australia have been dealing with for more than a year):
“As social uncertainty increases, the need for trust is increasing day by day. In my opinion, auditing firms are playing an increasingly important role in society in this sense. As auditing has formed one of the foundations of society, we will increase our efficiency and pursue greater quality by, for example, leveraging technology. It is my belief that we will be further required to provide society at large with the broad know-how we have acquired in conducting high-quality audits, which includes our know-how in digital technologies and non-financial information. This applies not just to audits but to other services as well. As we advance, we will build a forward-looking auditing firm capable of meeting society’s expectations together with our stakeholders.”
I like how they included this profile of his career progression at PwC, saves me trying to get around LinkedIn’s ridiculous blocks for people who aren’t logged in:
Charlottte Business Journal wrote a fluff piece about PwC’s AI initiatives:
PricewaterhouseCoopers has rolled out two artificial intelligence tools for its employees companywide, including for around 1,000 workers in the Charlotte region that have access to the technology.
Professional services firm PwC has been leveraging and investing in AI since about 2017, said Emily Pillars, PwC’s Charlotte managing partner as of Jan. 1. Now, it’s leaning more into the space with the launch of its latest tools My Marketplace and ChatPwC, which were each designed to help its employees gain better control of their careers and boost productivity.
“What we found is our employees’ expectations and interests have changed, and they want to be more involved in their careers, and they want the trust with which to do that,” Pillars said.
PwC’s My Marketplace is an interactive talent platform powered by AI that allows employees to have access to various opportunities within the firm and provides the skills needed to succeed in those roles. My Marketplace also allows its U.S. employees to match new opportunities with their current skills and interests, learn all of the strategies the company uses to serve clients and offer methods to make connections to grow their professional network.
On that note, I’m out. Have a good week and remember, don’t believe everything you read. Not only is it April Fools, it’s an election year. I’ll try to keep the headline sensationalizing to a minimum.
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