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The leading auditing firms grew their share of public audits in 2021, according to Audit Analytics. The group's annual Who Audits Public Companies report revealed that the 10 firms with the most public company audit clients - the Big Four, Grant Thornton, BDO USA, RSM US, Marcum, Withum and BF Borgers - accounted for 68.8% of the total market, up from 66.8% in 2020; they audited 4,578 registrants, versus 4,030 in 2020. Almost all of the auditors in the top 10 increased their number of clients, but the biggest jump, proportionally, was at BF Borgers, which climbed from 133 to 169, and increased its share of the overall market from 2.2% to 2.5%.

 

Accounting Today

EY has rejected speculation that a proposal to separate its audit firm from its consulting practice is linked to the record $100m penalty it received from the Securities and Exchange Commission (SEC) on Tuesday. A cohort of the Big Four firm's audit professionals were found to have cheated on exams required to obtain and maintain their CPA licenses, and for withholding evidence of the misconduct from the SEC’s Enforcement Division during an investigation. “The SEC investigation is more than two years old, and this resolution has been in the works for some time,” said EY spokesperson Brendan Mullin. “It is unrelated to any analysis of the EY structure and our competitive landscape. As the most globally integrated professional services organization, we regularly conduct scenario planning and review EY businesses on a global basis to determine that we have the optimal strategy, structure and footprint to focus on delivering high-quality audits and exceptional service to all clients across EY.” 

 

Accounting Today

Brixey & Meyer, a Columbus-headquartered accounting and consulting firm that is part of the BDO USA Alliance, has launched an environmental, social, and governance (ESG) service line offering. The new offering will help clients assess ESG risks and opportunities, develop actionable recommendations, and implement impactful solutions to improve business performance in ways that benefit society and the environment. It will be headed up by Matt Deptola, who spent the last eight years at non-profit economic development corporation JobsOhio, where he most recently served as director of operations for the project management team.

 

Consulting.us

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An appellate court judge upheld Seattle's JumpStart payroll tax on Tuesday, doubling down on a decision made in King County Superior Court last year. The Division I Court of Appeals deemed Seattle's JumpStart tax lawful, affirming a lower-court dismissal of a lawsuit filed by the Chamber of Commerce in late 2020. The tax, passed by the Seattle City Council in 2020, requires businesses with at least $7m in annual payroll to pay between 0.7% and 2.4% on salaries and wages paid to Seattle employees who make at least $150,000 per year. The highest rate is applied only to salaries of at least $400,000 at companies with at least $1bn in annual payroll. In 2021, the first year of collection, JumpStart brought the city $231m in revenue, exceeding the city's $200m estimate. While the companies are responsible for the tax, some believe JumpStart is an unlawful tax on those making a living wage. The court disagreed with this interpretation in its opinion, adding: "Engaging in business is a substantial privilege on which the city may properly levy taxes. And the use of a business's payroll expense is an appropriate measure of that taxable incident".

 

CPA Practice Advisor

Sen. Marco Rubio (R-FL) has introduced the No Tax Breaks for Radical Corporate Activism Act - a bill that would prohibit employers from deducting expenses related to their employees’ abortion travel costs or so-called “gender affirming care” for young children of their employees. “Public policy should be used to strengthen families, not woke executives. We must work to strip the latter of undeserved benefits while empowering the former," Mr. Rubio said. "That means further expanding the child tax credit to relieve the financial burden of raising children."

 

Sierra Sun Times

The FASB recently decided to tackle a project that could result in new rules being created on how companies should account for environmental credits, such as renewable energy credits and carbon offset credits. Last February, SEC Acting Chief Accountant Paul Munter recommended that the FASB take a hard look at potential standard setting regarding climate-related transactions and disclosures. After receiving feedback from investors and stakeholders, the FASB on May 25th added a project to its technical agenda on the recognition, measurement, presentation, and disclosure requirements for participants in compliance and voluntary programs that result in the creation of environmental credits. These credits include but are not limited to those created under compliance programs, such as cap and trade and baseline allowance programs; renewable energy credits and certificates; and carbon offset credits. The FASB project also includes financial reporting requirements for nongovernmental creators of environmental credits. FASB Chairman Richard Jones said an example of creator accounting would be an electric car manufacturer that generates credits that can then sell those credits to an automaker that makes gasoline-powered cars.

 

CPA Practice Advisor

The US Federal Trade Commission (FTC) is suing Walmart, alleging that the retailer allowed its money-transfer service to be be used to facilitate fraud such as impersonating the IRS or other government entities that request money. Between 2013 and 2018, over $197m in payments sent or received at Walmart were the subject of fraud complaints, it said. The agency said Walmart was aware that scammers were using its systems and didn’t do enough to stop it. Walmart stores allow shoppers to transfer money using services such as Western Union and Ria for a fee. Customers can send or pick up cash or make bank deposits in the US, Puerto Rico and Mexico, as well as through a network of partner locations in other international locations. In a statement, Walmart called the suit “factually misguided and legally flawed,” and that the FTC denied it the due process of hearing from the company directly. In other Walmart news, the firm is being investigated by Texas Attorney General Ken Paxton regarding whether it improperly filled prescriptions and failed to report suspicious orders when selling opioid drugs. The investigation focuses on Walmart's compliance with a requirement to submit documentation related to its opioid orders to the US Drug Enforcement Administration and all state agencies in Texas, Mr Paxton said.

 

CNN

US News and World Report

US News and World Report

Wall Street Journal

Home-price growth slowed slightly in April as competition for homes remained fierce despite rising mortgage-interest rates. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 20.4% in the year that ended in April, down from a 20.6% annual rate the prior month. The 10-city index gained 19.7% over the year ended in April, compared with a 19.5% increase in March. The 20-city index rose 21.2%, after an annual gain of 21.1% in March. Price growth decelerated in 11 of the 20 cities. Tampa had the fastest home-price growth in the country, at 35.8%, followed by Miami, at 33.3%. A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found an 18.8% increase in home prices in April from a year earlier. Economists largely expect home-price growth to slow in the second half of the year as demand wanes due to higher borrowing costs. “We continue to observe very broad strength in the housing market,” said Craig Lazzara, managing director at S&P Dow Jones Indices. “A more-challenging macroeconomic environment may not support extraordinary home price growth for much longer.”

 

CNN

Advisor Perspectives

Wall Street Journal

U.S. consumer confidence fell sharply in June as worries about high inflation left consumers anticipating economic growth would weaken significantly in the second half of the year. The Conference Board said on Tuesday its consumer confidence index dropped 4.5 points to a reading of 98.7 this month. The board’s expectations index, which measures consumers’ short-term outlook about the labor market, business and income, reached a low of 66.4 in June from 73.7 the prior month. That was its lowest reading since March 2013. “Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices,” said Lynn Franco, senior director at the Conference Board. “Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year-end.”

 

Bloomberg

Reuters

Wall Street Journal

U.S. prosecutors have dropped charges against two people accused of attempting to bribe officials in Haiti after new evidence came to light regarding lost recordings of calls that undercover agents conducted with one defendant. A judge dismissed the Justice Department’s case against Roger Richard Boncy and Joseph Baptiste. The two men were slated to go on trial at the U.S. District Court in Boston for a second time in July on charges that they solicited bribes from FBI agents posing as potential investors in a project to develop an $84m port in the Mole-Saint-Nicolas area of Haiti. The culmination of the FBI’s belated disclosure of new evidence about the two calls, along with a prior appeals court loss that had forced prosecutors to retry the case, weighed against further prosecution, prosecutors said. “As the government, our charging decisions deeply impact people’s lives,” U.S. Attorney Rachael Rollins said in a statement. “After a careful review of this entire matter, we dismiss these charges in the interest of justice.”

 

Wall Street Journal

U.S. companies’ spending on private jets for personal use by chief executives and chairs hit a decade-high last year, up 35% to $33.8m, according to ISS Corporate Solutions.