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The fourth annual U.S. Bank CFO Insights Report has found that U.S. corporate finance leaders are increasing their focus on cutting costs to prepare for potential economic and geopolitical uncertainty. The top priorities identified in the survey of over 2,000 senior finance leaders nationwide are cutting costs within the finance function and across the entire business. Driving revenue growth is a lower priority. The report also highlights the increasing importance of improving risk identification and mitigation. Geopolitical tension has jumped in ranking as a top risk, while high inflation is cited less often. Finance leaders are prioritizing technology investments and AI to achieve cost cuts and efficiencies. Despite the challenging operating environment, a significant percentage of finance leaders remain optimistic about their business's financial outlook. The report emphasizes the challenges faced by CFOs in the current circumstances and their focus on cost cuts and risk management while not neglecting investment priorities.

 

ABL Advisor

A recent survey by AICPA and CIMA reveals a stark contrast in outlook among finance and accounting professionals, with those identifying as finance business partners significantly more optimistic about the future of their profession. According to the findings, 84% of respondents who see themselves as business partners are optimistic, compared to just 15% among those who do not view themselves in this role. This optimism is largely attributed to their role in providing crucial data for strategic decision-making and developing business models, essential in today's data-driven market environment. However, concerns about automation loom large, with two-thirds of finance business partners worried about the potential of technology to replace their jobs—a fear that escalates to 92% among those not identifying as business partners. Andrew Harding, head of management accounting at AICPA and CIMA, emphasizes the growing demand for strategic, value-creating finance teams as business models evolve and the need for data-driven decision-making increases.

 

AICPA & CIMA

Chemours' CFO Jonathan Lock has resigned two months after the company announced an internal investigation into its accounting practices. Lock, along with two other executives, was put on leave during the investigation. The Delaware-based chemical maker shocked the market when it suspended its CEO, CFO, and controller. The investigation is focused on the company's accounting. Lock is not entitled to severance pay but can receive three months of healthcare premium payments.

 

Bloomberg Tax

Customers Bancorp has announced that the departure of CFO Carla Leibold was by mutual agreement, contradicting an earlier statement that she was terminated for violating company policy. Leibold disputed the characterization of her separation. As part of the agreement, Leibold will receive $2.5m in compensation paid in installments over two years. She also forfeited her unvested equity awards.

 

Bloomberg

Kevin Dehner, EY Americas sustainability tax deputy leader, writes that transparency is a critical component of sustainability, especially in the areas of supply chain, employee management, and business decision-making. He says that to achieve sustainable business models and create long-term value, companies must embrace transparency with stakeholders. Tax transparency is becoming increasingly important, with regulators, investors, and the public demanding greater visibility into corporate tax profiles. From expanded disclosures in the U.S. to public Country-by-Country Reporting legislation in the EU, companies face new tax information responsibilities. Dehner states that adapting to these changes is crucial for addressing risks, embracing opportunities, and effectively communicating a tax narrative. He adds that companies must also address new data and technology needs associated with reporting requirements. By proactively embracing tax transparency, companies can enhance trust with investors, customers, and the public, and gain a competitive advantage. He ends by saying that tax transparency is here to stay, and companies must develop action plans to respond.

 

Accounting Today

A global accounting standard-setter has launched a comprehensive review of intangibles accounting following complaints that current rules overlook assets such as intellectual property in financial statements. The International Accounting Standards Board (IASB) decided to include the project in its work plan after receiving feedback on its strategy through 2026. The board has initiated initial research to determine necessary changes, with the project potentially being completed in multiple stages. The review aims to address the concerns of investors and others who have expressed a strong desire for rule changes.

 

Bloomberg Tax

The California Department of Tax and Fee Administration (CDTFA) has published information on the use tax collection requirements for out-of-state sellers. According to the publication, out-of-state retailers engaged in business in California must register with the CDTFA and collect California use tax if they meet certain criteria, such as maintaining a physical place of business in the state, having a representative operating in the state, leasing or owning property in the state, or having total combined sales exceeding $500,000 for delivery in the state. This new requirement aims to ensure that out-of-state sellers contribute their fair share of taxes.

 

Bloomberg Tax

Navigating a toxic workplace is a challenge that disproportionately affects those without the financial flexibility or professional leverage to simply leave their jobs. A study by INTOO and Workplace Intelligence highlights that 35% of employees would accept a lower salary to escape such an environment. The study identifies key factors contributing to workplace toxicity, including favoritism, office politics, and aggressive management styles, which are particularly intolerable to younger employees. The impact of a toxic work environment is profound, with 84% of employees reporting reduced engagement and 79% noting decreased productivity. Furthermore, 44% of employees have used personal or vacation time to avoid the toxicity, and a third have pretended to be sick for the same reason. The role of CFOs and other financial leaders in creating a positive company culture is becoming increasingly important. Effective strategies for addressing workplace toxicity include fostering a culture of humility and toughness on toxicity, recognizing good work, and disciplining employees who contribute to the negative environment. Moreover, transparency and enforcing rules impartially are crucial.

 

Intoo

A global insurance coalition, the Net Zero Insurance Alliance (NZIA), has been disbanded and replaced by the Forum for Insurance Transition to Net Zero (FIT) in response to companies leaving over allegations of collusion by Republican politicians in the United States. The move comes as Republican-led attacks on environmental initiatives dilute efforts to tackle climate change. The FIT will focus on sustainable insurance practices and engagement with companies in different sectors. The NZIA lost over half its members, including AXA and Lloyd's of London, after Republican officials sought information about insurers' membership. The FIT is launching with 46 organizations, including Aviva and Generali, and will be supported by a legal team. Regulators from various countries are also involved. Other UN-backed financial coalitions are also trying to prevent member departures.

 

Reuters

A U.S. bank regulator has decided not to impose stricter oversight on asset managers with significant investments in banks. The Federal Deposit Insurance Corporation (FDIC) postponed votes on two competing proposals that would have allowed for more scrutiny on asset managers, as neither proposal had majority backing. However, officials plan to refine the proposals and continue discussions on oversight of asset managers with large bank stakes. "The matter merited more attention," said agency officials.

 

Reuters

Cisco Systems has said that hackers have subverted some of its digital security devices to break in to government networks globally. The company's Adaptive Security Appliances, which combine various digital defense functions, were found to have vulnerabilities that were exploited by a group of hackers known as "UAT4356." Cisco described the group as a "sophisticated state-sponsored actor" and urged customers to update their software immediately. The breaches date back to earlier this year. Cisco also warned that the hackers were interested in attacking network devices from Microsoft and other vendors. The Cybersecurity and Infrastructure Security Agency (CISA) has not confirmed evidence of this activity affecting U.S. government networks.

 

Reuters

Official figures show that the U.S. economy expanded at an annualized rate of 1.6% in Q1, falling short of the 2.4% forecast by analysts and the 3.4% growth recorded in Q4 2023. Meanwhile, U.S. Department of Commerce data shows that inflation increased by 3.4% in the first three months of 2024, compared to an increase of 1.8% in the final three months of 2023. Stuart Cole, chief macro economist at Equiti Capital, said the rate-setting Federal Reserve is "finding itself caught between a rock and a hard place.” He added that while growth data suggests monetary policy “has worked its magic and the Fed's foot on the monetary brake can be eased somewhat," inflation figures suggest otherwise, “and potentially even point to the need for a further tightening."

 

Reuters