\n<\/p>\n
Reminder to\u00a0take our 2025 Predictions for the Accounting Profession survey<\/a>, it\u2019s quick we promise.<\/em><\/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 MicroStrategy Suddenly Has a Tax Problem, and Needs Help From Trump\u2019s IRS<\/strong> [Wall Street Journal<\/a>] Accounting Firm\u2019s AI Caught Telling Customers About Each Others\u2019 Financial Records<\/strong> [The Byte<\/a>] AI chat firm GameOn couple arrested for defrauding investors of over $60M to finance wedding and more<\/strong> [VentureBeat<\/a>] Deloitte Davos Survey: Gen AI Projects Face Scale Hurdles<\/strong> [Technology Magazine<\/a>] Companies need to expose employees to AI so they start seeing it as a \u2018digital colleague,\u2019 says PwC head<\/strong> [Business Insider<\/a>] KPMG Slated to Post Best Audit Inspection Report in 15 Years<\/strong> [Bloomberg Tax<\/a>] UK ministers explore shelving stricter audit rules for private companies<\/strong> [Financial Times<\/a>] KPMG appoints Scott Flynn as Global Head of Audit<\/strong> [KPMG<\/a>] Why Minnesota\u2019s accounting sector is losing talent \u2014 and what can be done<\/strong> [Minneapolis\/St. Paul Business Journal<\/a>] Presented without comment:<\/em><\/p>\n AND IF you are a remote employee, you can claim ANY state has harmed you. <\/p>\n Why can the outsourced labor at your company, who is working for Deloitte, Cognizant, or Infosys, work from ANYWHERE in India but you’re not allowed to work in Pennsylvania or Montana?<\/p>\n \u2014 Unfiltered Truth (@UnfiltdTruth) January 24, 2025<\/a><\/p><\/blockquote>\n Is your remote or hybrid firm hiring? Check out this week\u2019s top candidates from Accountingfly and sign up for Always-On Recruiting<\/a> to get more candidates like these in your inbox every week.<\/em><\/p>\n CBIZ Board Adds Kathy Raffa as Independent Director<\/strong> [Business Wire<\/a>] The CEO of a $5 billion consulting firm explains why she has no ambition to be a lesser version of a Big Four giant<\/strong> [Business Insider<\/a>] Muhammad Ali\u2019s Accountant Tells His Story For The First Time!<\/strong> [Athlon Sports<\/a>] CEOs ramp up deal outlook under Trump, EY survey shows<\/strong> [Reuters<\/a>] ARRESTED AGAIN: Former Calgary accountant charged with ripping off second business for more than $500,000<\/strong> [Western Standard<\/a>] FinCEN says BOI reporting remains on hold<\/strong> [Journal of Accountancy<\/a>]Tax<\/h2>\n
If you think MicroStrategy\u2019s business model is wild, wait until you see its tax issues. After years of raising money through stock and debt offerings to buy bitcoin, MicroStrategy owns a stash worth about $47 billion, which includes $18 billion of unrealized gains. In an unusual twist, it could have to pay federal income taxes on those paper gains\u2014even if it never sold a single bitcoin. The tax bill could total billions of dollars starting next year, according to a new disclosure this month by MicroStrategy that has received little attention.<\/p>\nAI<\/h2>\n
Sage Group, a self-described \u201cleader\u201d in accounting and financial tech for businesses, temporarily suspended its Sage Copilot AI assistant after it was caught giving out customer\u2019s financial records, The Register reports. All you had to do to get this information, which allegedly included recent transactions, was ask. \u201cA customer found when they asked [Sage Copilot] to show a list of recent invoices, the AI pulled data from other customer accounts including their own,\u201d a source told The Register last week. In a statement to The Register, its spokesperson described the AI blunder as a \u201cminor issue\u201d that only involved a \u201csmall amount\u201d of customers.<\/p>\n
Authorities yesterday arrested GameOn Technology founder Alexander Charles Beckman and attorney Valerie Lau Beckman (a married couple) for allegedly defrauding investors of $60 million. In a 25-count indictment, the U.S. Department of Justice said the couple allegedly falsified dozens of bank statements and audit reports defraud GameOn investors. The alleged fraud spanned six years.<\/p>\n
The rapid development of generative AI (Gen AI) has prompted a wave of enterprise experimentation over the past year, with companies across sectors testing applications from content creation to software development. Yet the path from pilot projects to full-scale deployment presents significant challenges, according to new research from\u00a0Deloitte.<\/p>\n
Don\u2019t be afraid of AI in the workplace \u2014 think of it as your digital colleague. That\u2019s what the global chairman of PwC, Mohamed Kande, said about AI augmentation during a panel at the World Economic Forum conference in Davos, Switzerland, on Tuesday. \u201cPeople fear what they don\u2019t understand, so exposing them to the technology, putting in their hands makes a big difference,\u201d Kande said about AI. Doing so allows employees to view AI as a \u201cdigital colleague\u201d they can work with, said Kande.<\/p>\nAudit<\/h2>\n
KPMG LLP may have finally cracked the code on delivering better audits to investors: Giving its staff more time to do their work and ensure they increasingly have weekends off during the busy corporate filing season. Those steps have led the US accounting firm to expect its best annual inspection results in 15 years with a deficiency rate of 20%. \u201cIt turned out that what our people needed was just a little bit more time,\u201d Christian Peo, the firm\u2019s national managing partner for audit quality and professional practice, said in an interview. \u201cIf you\u2019re in hour 63 of a week in February, you might not be at your best.\u201d<\/p>\n
UK ministers are exploring scrapping promised stricter audit rules for private companies as the government seeks to dial back regulation in a bid to boost economic growth. Business secretary Jonathan Reynolds and employment minister Justin Madders have met large audit firms and big investors in recent months to discuss watering down or axing reforms that would designate about 600 companies \u201cpublic interest entities\u201d, according to people familiar with the talks.<\/p>\n
Scott Flynn, currently the Head of the US firm\u2019s audit practice, will become KPMG\u2019s Global Head of Audit on 1 April 2025. Scott brings more than 30 years of experience working with some of the world\u2019s leading multinational companies and has been Head of Audit, KPMG in the US since 2020. He brings strong international experience from three years working in Asia and leading the US GAAP and Risk Management teams within the Chinese firm\u2019s Shanghai office.<\/p>\nTalent<\/h2>\n
The CPA exam\u2019s requirement of 150 academic credit hours is a major obstacle, observers say. The typical college degree requires just 120 hours. \u201cWe did not structure [the rules] in a way that provided flexibility,\u201d said Geno Fragnito, government relations director for the Minnesota Society of CPAs (MNCPA). \u201cThe profession evolved, the economy evolved, the world evolved and things have changed.\u201d When it comes to the credit hours fix, \u201cnothing else is a quicker, tangible fix,\u201d said Boz Bostrom, an accounting professor at the College of Saint Benedict and Saint John\u2019s University and board chair of MNCPA. Other issues are going to take several years to play out, such as struggles to increase diversity and continue appeals to younger generations.<\/p>\n\n
Firm Watch<\/h2>\n
Raffa was added to the Board of Directors pursuant to CBIZ\u2019s acquisition of the non-attest assets of Marcum, which closed Nov. 1, 2024. Ms. Raffa was President of Raffa, PC, a top 100 accounting firm based in Washington, D.C., where she also served as an Audit Partner for over 25 years prior to its merger with Marcum in 2018. She then served as the Office Managing Partner for Marcum\u2019s offices in the D.C. region until her retirement in October 2023. Ms. Raffa has more than 40 years of experience providing audit, accounting and consulting services to clients primarily in the nonprofit industry.<\/p>\n
Francesca Lagerberg is CEO of Baker Tilly, one of the world\u2019s 10 biggest accounting firms. In an interview with BI, Lagerberg explained why her firm has managed to buck the downward trend in the sector and how she doesn\u2019t want to turn Baker Tilly into a lesser version of a Big Four firm.<\/p>\nPeople<\/h2>\n
When Mohammed Ali needed an accountant, he turned to Arthur Andersen, one of the world\u2019s largest accounting firms, which put a 23-year-old, Elliott Broidy in charge of Ali\u2019s dollars and cents. Broidy came to see a surprising side of the world\u2019s most iconic boxer. \u201cI was just lucky I got assigned an account like that,\u201d Broidy said. \u201cI was a big boxing fan and obviously a huge fan of Muhammad Ali\u2019s.\u201d<\/p>\nNews<\/h2>\n
Global chief executives see much more corporate dealmaking in 2025, with an increased number expecting to pursue mergers and acquisitions after U.S. President Donald Trump was elected to a second term in November, a survey showed. Some 56% of CEOs expect to actively pursue M&A activity in 2025, compared with just 37% in September, according to an EY-Parthenon CEO Outlook Survey in November and December. The deal appetite was the largest in nearly two years, with 60% of global CEO respondents expecting an increase in transactions worth more than $10 billion, the consultancy\u2019s survey released on Tuesday showed.<\/p>\n
A 46-year-old woman from Gold River, B.C., has been charged with fraud and theft after allegedly embezzling over $575,000 from her Calgary employer over a four-year period. The owner of the company came forward to police after reading about another case Manhas was involved in. In 2023, Calgary police arrested Manhas and alleged that between October 2013 and September 2015, a woman worked at a local oil and gas company on a temporary contract posing as an accountant.<\/p>\n
Reporting companies covered by the Corporate Transparency Act\u2019s (CTA\u2019s) beneficial ownership information (BOI) reporting requirement do not have to file the reports while an injunction remains in place, the Financial Crimes Enforcement Network (FinCEN) said Friday morning. Companies that do not file BOI reports also are not subject to liability while the injunction remains in place, FinCEN said. However, the estimated 32 million small businesses covered by the reporting requirements may submit their BOI reports voluntarily,\u00a0FinCEN said<\/a>.<\/p>\nRelated<\/em><\/h3>\n<\/p><\/div>\n