\n<\/p>\n
Footnotes is a collection of stories from around the accounting profession curated by actual humans and published every Friday at 5pm Eastern. While you\u2019re here, subscribe to our newsletter<\/a> to get the week\u2019s top stories in your inbox every Tuesday and Friday.<\/em><\/p>\n Comments are closed on Friday Footnotes<\/a> and the Monday Morning Accounting News Brief<\/a> by default. If you have something to say about any stories linked here you are welcome to email the editor<\/a>, text us<\/a> at 202-505-8885, or hit us up on Twitter @going_concern<\/a>. See ya.<\/em><\/p>\n Share Your Input on CPE Standards by Dec. 16<\/strong> [NASBA<\/a>] The Big Four are choosing profit over promotion<\/strong> [AccountancyAge<\/a>] Representation and Retention: New Study Explores Career Paths in Accounting<\/strong> [Bentley University<\/a>] Watch out for Big Law\u2019s latest competitor: accountancy firms<\/strong> [Financial News<\/a>] Jeffrey Epstein\u2019s accountant of 22 years raised alarm bells at JPMorgan. Now Congress wants answers.<\/strong> [Business Insider<\/a>] Ernst & Young Fails to Halt $250 Million Army Accounting Award<\/strong> [Bloomberg Law<\/a>] Sudbury Business Owner Pleaded Guilty To Paying Employee $1.6M Under The Table, USAO<\/strong> [Patch<\/a>] AICPA warns that merger of IRS offices would \u2018confuse\u2019 taxpayers<\/strong> [Journal of Accountancy<\/a>] Unpaid state taxes soar, and Nebraska auditor questions why<\/strong> [Nebraska Examiner<\/a>] AI and the audit: Finance leaders strongly support forward-thinking firms<\/strong> [Journal of Accountancy<\/a>] OpenAI\u2019s US auditor is Deloitte: report<\/strong> [Seeking Alpha<\/a>]CPA Licensure<\/h2>\n
NASBA and the American Institute of CPAs (AICPA) have released an exposure draft of proposed revisions to the Statement on Standards for Continuing Professional Education (CPE) Programs and are inviting public comment through December 16, 2025.<\/p>\nBig 4<\/h2>\n
New data reveals that the Big Four: Deloitte, PwC, EY, and KPMG have collectively promoted just 179 new partners for the 2025 cycle. This represents a five-year low, a sharp contraction from the post-pandemic optimism of 2022 when 276 new leaders were elevated. For the ambitious Director or Senior Manager reading this, the headline figures are sobering. But for the firms themselves, this is a calculated act of self-preservation. Faced with a \u201cconsulting crunch\u201d and the uncertain spectre of AI, the Big Four are circling the wagons to protect their most sacred metric: Average Profit Per Partner (PEP).<\/p>\nAcademic Research<\/h2>\n
As corporate America questions the future of diversity, equity and inclusion initiatives, new research from Bentley\u2019s Rani Hoitash, John E. Rhodes Professor of Accounting, and Eric Krause, PhD \u201925 offers clear evidence of why they matter. In a\u00a0study published in The Accounting Review<\/a>, Hoitash, Krause and their co-authors examine how gender, race and ethnicity shape careers in public accounting. Using employment data from LinkedIn, they analyzed the work histories of more than 100,000 auditors who began their careers in large U.S. firms. Their data captured not only when employees left, but also demographic details of the organizations they joined next \u2014 allowing them to draw a connection between workplace diversity and departure decisions.<\/p>\nNews<\/h2>\n
Watch out for Big Law\u2019s latest competitor: accountancy firms. For private equity funds that have poured into the accountancy sector, a key growth driver is now the expansion of their legal services.<\/p>\n
Congressional investigators interested in how Epstein made and spent his money \u2014 and whether banks ignored red flags that should have alerted them to sex-trafficking \u2014 now have Harry Beller in their crosshairs. In lawsuits involving Epstein, Beller comes across as something of a financial Forrest Gump \u2014 turning up repeatedly in the paper trail. He hasn\u2019t been named as a defendant in any of the lawsuits, but his name crops up on incorporation papers for Epstein\u2019s web of companies, on Ghislaine Maxwell\u2019s tax forms, on checks, and on cash withdrawal records for Epstein\u2019s bank accounts, which for years were held by JPMorgan Chase.<\/p>\n
Guidehouse Inc. can move forward with a $250 million maximum value contract to provide the US Army with accounting, auditing solutions, and change management support services, the GAO said in a decision released Friday. Protester Ernst & Young LLP didn\u2019t show that the Army conducted an improper corrective action, following an earlier protest, by not allowing bidders to make wholesale changes to their bids, the US Government Accountability Office said.<\/p>\n
Charles D. Katz, 63, the owner of accounting firm CD Katz LLC and real estate firm Gebsco Realty Corporation, was charged with conspiracy to defraud the U.S. and two counts of loan fraud. Katz and an employee, who served as the Director of Corporate Services at his accounting firm and the CEO of his real estate firm, agreed that he would pay the employee off the books. This was so the employee would have tax-free income and that Katz would have lower employment taxes.<\/p>\nTax<\/h2>\n
The AICPA opposes the proposed merger of the Office of Professional Responsibility (OPR) and the Return Preparer Office (RPO) \u201cbecause it would inappropriately consolidate credentialed and uncredentialed return preparers under OPR, create potential conflicts of interest, and divert resources from the primary role of OPR,\u201d\u00a0the AICPA wrote in the letter<\/a>, dated Nov. 14.<\/p>\n
The amount of state tax obligations Nebraska taxpayers have evaded has soared beyond $310 million, growing by 15% this past year, according to a letter released Monday by the Nebraska State Auditor. \u201cWorse yet, they are being allowed to get away with it,\u201d Auditor Mike Foley said in a statement. The \u201cstaggering\u201d amount, according to Foley, is a cumulative result of unpaid corporate and individual income taxes, sales and use taxes, partnership income taxes and withholding taxes.<\/p>\nAudit<\/h2>\n
When finance leaders go shopping for audit solutions, their preference for firms leaning into artificial intelligence (AI) and other advanced technologies is growing, right along with their trust. Nearly all (97%) of leaders said they are willing to pay more to partner with audit firms that leverage advanced technologies, according to BDO\u2019s Audit Innovation Survey. The survey canvassed 210 senior finance leaders \u2014 predominantly CFOs and finance directors at public and private U.S. companies \u2014 and found that 81% have greater trust in audit firms that invest in and actively use advanced technology, an 18-percentage-point increase from the first survey a year ago.<\/p>\n
On Wednesday, investor Michael Burry, who has taken to the social media X platform to express his concerns about the artificial intelligence spending boom, openly pondered which firm was auditing OpenAI\u2019s books. \u201cOpenAI is the linchpin here,\u201d Burry wrote<\/a>. \u201cCan anyone name their auditor?\u201d<\/p>\n<\/p><\/div>\n