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According to EY's 2024 Global Corporate Reporting Survey, a significant number of CFOs globally are worried about greenwashing risks in sustainability reporting. The survey, which included 2,000 finance leaders and 815 institutional investors, revealed that 96% of finance leaders reported issues with the integrity of their nonfinancial data. Matt Bell, EY Global Climate Change and Sustainability Services Leader, noted: “While it's relatively easy for an organization to put in place an ambitious sustainability target, once finance leaders start drilling into the data... their conservative tendency perhaps starts to kick in.” Despite these concerns, 78% of investors believe that emerging regulations will enhance the accuracy of sustainability disclosures. The survey also highlighted a growing trend of companies appointing ESG controllers, with 36% already having this role and 58% planning to establish it soon.

 

ESG Today

Shai Gabay, cofounder and CEO of Trustmi, highlights the evolving role of CFOs in combating cyber threats. With cybercriminals increasingly using generative AI, CFOs must deepen their understanding of cybersecurity's impact on financial health. Payment fraud, particularly during vendor onboarding, poses significant risks due to sensitive data exchanges. Gabay emphasizes, "CFOs can start by creating a comprehensive framework incorporating due diligence, stringent cybersecurity assessments." Additionally, email communications and complex supply chains are vulnerable to attacks, necessitating CFOs' active involvement in security measures. By leveraging AI and collaborating with IT, CFOs can enhance fraud detection and protect their organizations from financial losses and reputational damage. A holistic approach to payment security is essential for safeguarding against evolving cyber threats.

 

Forbes

AI is transforming the accounting industry, with a recent survey indicating that 90% of firms are utilizing AI in some capacity. According to KPMG’s report, 72% of companies are employing AI for financial reporting, enhancing accuracy and efficiency in tasks like reconciliations and forecasting. AI helps streamline processes by rapidly analyzing complex datasets, identifying errors, and generating structured reports. Additionally, AI is improving accounts receivables by automating invoice management and cash flow projections. Katie Thomas, CPA and owner of Leaders Online, emphasizes that integrating AI gradually can lead to sustainable growth for accounting firms. "Embracing AI advancements now can help your firm enjoy sustainable growth well into the future," she says.

 

CPA Practice Advisor

According to BDO's 2024 Board Survey of 250 public company directors, boards are preparing for 2025 by focusing on technology-driven growth while addressing associated risks. Emerging technologies, particularly machine learning and generative AI, are seen as pivotal to business advancement, with 34% of boards actively implementing and training employees on these tools. Key concerns include cybersecurity, cited as the top risk by 25% of directors, and lagging tech adoption, noted by 27%. Boards are dedicating more time—285 hours per director annually—on areas like enterprise risk management, innovation in corporate strategy, and succession planning, with tech and strategic expertise in high demand. 

 

BDO

EisnerAmper has introduced a new CFO advisory service tailored to the energy sector, led by Julie Munn-Sims and Candice Wilson. The firm aims to address the unique challenges faced by business leaders in this industry, stating: “Business leaders in the energy sector face unique challenges as they strive to meet the demands of shareholders and regulators.” With a focus on transformational excellence and strategic innovation, the advisory team leverages decades of experience across various energy domains, including renewable energy and traditional utilities. Based in Houston, EisnerAmper is committed to providing specialized accounting and tax solutions that foster sustainable growth and adapt to the evolving marketplace. Mark Staley, managing partner of the advisory practice, expressed enthusiasm for engaging with clients in the energy sector, emphasizing the importance of bespoke advisory services.

 

CPA Practice Advisor

Forbes

The influx of private equity (PE) investment is significantly altering career paths in the accounting profession, as highlighted in the Accounting MOVE Project report. Bonnie Buol Ruszczyk, president of the project, stated: "While the influx of cash is grabbing headlines, we believe the real story is how this new structure will transform firm dynamics and career opportunities." The report emphasizes that traditional partnership structures are merely "speed bumps" for investors seeking returns. It suggests that PE firms can enhance diversity, equity, and inclusion (DEI) initiatives, which are crucial for sustainable growth. The report also lists the Best CPA Firms for Women and Equity Leadership, showcasing firms that prioritize these values. The findings indicate a promising shift towards more inclusive and dynamic career opportunities in accounting, particularly for women and minorities.

 

Accounting Today

The Accounting and Financial Women’s Alliance, along with the Accounting MOVE Project, has unveiled its 2024 lists of exemplary CPA firms, highlighting the Best Firms for Women and Best Firms for Equity Leadership. Bonnie Buol Ruszczyk, president of the Accounting MOVE Project, said: “While the influx of cash is grabbing headlines, we believe the real story is how this new structure will transform firm dynamics and career opportunities for its team members, particularly women and people of color.” The report emphasizes the impact of private equity on firm culture and employee opportunities, showcasing firms that prioritize transparency, accountability, and comprehensive support for their diverse workforce. Notable firms include Abbott, Stringham & Lynch, Armanino, and BeachFleischman, all recognized for their commitment to gender equity and leadership development.

 

CPA Practice Advisor

As the election approaches, both Vice President Kamala Harris and former President Donald Trump have introduced extensive tax proposals, accumulating trillions in estimated costs. Lawmakers and tax experts caution that these ideas are more about campaign promises than feasible legislation. Senate Finance Committee member James Lankford remarked: “It’s campaign season, and everybody’s making promises.” Christopher J. Armstrong of Holland & Knight LLP echoed this sentiment, stating, “It’s easy to toss out ideas like this; it’s a lot harder to legislate.” The Committee for a Responsible Federal Budget estimates Harris's proposals at $3.5 trn and Trump's at $7.5 trn, with neither candidate's offsets likely to cover the full costs. As the political landscape evolves, tax policy remains a critical issue, with implications for the economy and voters' wallets.

 

Tax Notes

The IRS has officially launched a new pass-through field operations unit within its Large Business and International (LB&I) division to enhance the efficiency of audits for pass-through entities, which include partnerships, S corporations, and trusts. This initiative, announced on October 22, 2023, aims to address the historically low audit rates for these complex tax arrangements often utilized by high-income individuals. IRS Commissioner Danny Werfel said: “The establishment of pass-through field operations is a significant step in our goal to increase fairness in enforcement while improving service.” The IRS plans to leverage funding from the Inflation Reduction Act and advanced technology, including artificial intelligence, to better detect tax cheating and improve audit processes. The new unit will consolidate expertise and streamline workflows, ensuring a more consistent experience for taxpayers.

 

CPA Practice Advisor

Companies developing in-house software are set to receive new guidance on accounting for development costs, particularly for cloud-based services. The FASB has proposed changes aimed at modernizing financial reporting for software created or acquired for internal use, such as payroll systems and websites. FASB Chair Rich Jones said: “Stakeholders expressed the desire for updated accounting guidance that better aligns with how software is developed.” The proposed changes seek to enhance transparency regarding development costs and provide neutral guidance for stakeholders.

 

Bloomberg Tax

Accounting Today

Journal of Accountancy

Reuters reports that legal attacks and adverse court decisions are slowing rulemaking by the Securities and Exchange Commission (SEC) in a crucial election year. As a consequence, agency officials are rethinking rulemakings and some enforcement actions to help ensure they can survive legal attacks, according to four people familiar with the matter. Reuters notes that adverse court decisions over the past two years have blocked the SEC from overseeing the $27 trillion private funds industry; criticized its economic justification for new share buyback disclosures; and curtailed its powers to punish bad actors. Republican presidential candidate Donald Trump has vowed to fire SEC Chair Gary Gensler and slash regulations if he wins the election next week. "When the SEC does act, it's going to have to work harder to justify its position and it's going to face more skeptical courts," observed Jill Fisch, a University of Pennsylvania law professor who focuses on regulation and capital markets. "That world is going to limit what any agency chair is going to be able to accomplish."

 

Reuters

The Federal Trade Commission (FTC) has passed a new antitrust rule regarding mergers and acquisitions with a rare unanimous 5-0 vote, surprising many observers. This bipartisan decision involved both Republican commissioners, Andrew Ferguson and Melissa Holyoak, who typically oppose Chair Lina Khan's initiatives. Ferguson said:  “While I would not have included every item in the Final Rule, overall, it modernises the filing requirements to be more congruous with today's economy.” The rule aims to enhance compliance with the Hart-Scott-Rodino Act and follows months of negotiations, resulting in concessions for the Republican commissioners. The FTC plans to reinstate quicker reviews for non-problematic deals and has withdrawn from a controversial agreement with the Biden administration's labour agencies. The final rule will take effect 90 days after publication in the Federal Register. Democratic commissioner Rebecca Kelly Slaughter acknowledged the compromises made, saying: “With the unanimous support of all the commission, we can have confidence that the rule will have staying power.”

 

Bloomberg Law

Super Micro Computer's shares plummeted over 30% following the resignation of Ernst & Young (EY) as its public accounting firm. The resignation occurred during an audit for the company's latest fiscal year, amid EY expressing concerns about transparency and internal controls in financial reporting. The firm stated it could "no longer rely" on management's representations and could not provide audit services "in accordance with applicable law or professional obligations." Despite Super Micro's disagreement with EY's decision, the company acknowledged the seriousness of the concerns raised and is conducting an ongoing review. The resignation of EY follows a report from Hindenburg Research alleging significant accounting manipulation at Super Micro.

 

Reuters