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The International Accounting Standards Board (IASB) has published a consultation document containing new proposed illustrative examples to improve climate-related information in financial statements. The examples were developed in response to stakeholder demand, particularly from investors, who expressed concerns about insufficient or inconsistent climate-related information in financial statements. The proposed examples focus on materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information. The IASB aims to enhance transparency and strengthen the connection between financial statements and other parts of company reporting, such as sustainability disclosures. This initiative is part of the IASB's ongoing efforts to help companies report on climate issues. Andreas Barckow, Chair of the IASB, stated that the proposed examples aim to provide clarity and help companies communicate how climate-related and other uncertainties affect their financial position and performance in their financial statements.

 

Accounting Today

ESG Today

An annual PCAOB report has revealed an increase in the percentage of broker-dealer financial reports with audit deficiencies. The report highlights the nature of the deficiencies and provides advice for avoiding future occurrences. In 2023, at least one deficiency was identified in 70% of the 103 audit engagements reviewed, up from 56% the previous year. The four largest firms inspected had a 59% deficiency rate, while firms being inspected for the first time had a 90% deficiency rate. The most common deficiencies were related to evidence sufficiency, revenue, audit result evaluation, net capital, and related party relationships. The report offers hypothetical scenarios to guide good practices, including considerations for service auditor's SOC 1 report, testing investment advisory fee revenue assertions, examining journal entries for possible fraud, and enhancing communication with audit committees and management.

 

Journal of Accountancy

A report, titled "Seizing the AI & Automation Opportunity: Where CFOs Stand," reveals that 59% of finance executives prioritize business continuity and resilience in 2024, up from 51% in 2023 and 40% in 2022. The report also highlights the need for automation and technology investments to support long-term growth, as 84% of finance executives believe manual tasks still consume too much time. Additionally, 69% of finance executives report that their organizations are either using, exploring, or investing in AI in finance, with 60% feeling ready to implement AI tools. The report emphasizes the importance of digital transformation and technological readiness for CFOs to achieve their business goals. Sarah Spoja, CFO of Tipalti, states that CFOs who adopt a value creation mindset are more likely to exceed their organizational goals and expectations. The report provides insights into CFOs' priorities in finance automation, preparations for AI, and the challenges hindering their teams.

 

CPA Practice Advisor

Steven Wasserman, a Consulting CFO and Finance professor at Bentley University, shares insights on the complex decision-making process for CFOs considering a career move in venture-backed companies. A CFO contacted him to discuss a job opportunity and whether to stay at his current company despite limited equity upside due to stagnant revenue growth and high liquidation preferences favoring preferred stockholders. Wasserman draws from personal experiences, including staying through a company sale where common shareholders lost their investment and leaving another company before a sale. Benefits of staying include enhancing the resume, potential deal bonuses, future opportunities through board member networks, and familiarity with the existing work environment. However, leaving might offer significant equity upside, improve market perception, and broaden networking opportunities. Risks of leaving involve potential burned bridges and uncertainties about the new position's workload and satisfaction. Wasserman advises CFOs to provide ample notice and consider the timing of their departure carefully, especially during critical company milestones like sales processes. For board members, he suggests implementing a contingent deal bonus plan to incentivize key executives to stay through important transitions. In the end, the CFO chose to leave for a new opportunity, pleased with the decision, while Wasserman reflects on both the benefits and drawbacks of his own career choices.

 

Forbes

Fulton Financial has appointed Richard Kraemer, formerly of Valley National Bank, as its new CFO. Kraemer will join Fulton in September and officially take on the role in the fourth quarter. He will oversee various financial functions and advise the CEO and board of directors. Kraemer will report to Fulton Chairman and CEO Curt Myers and oversee accounting, treasury, corporate development, tax, financial planning and forecasting, and investor relations. The company said he will advise the CEO and board on all financial matters.

 

American Banker

As speculation grows over who Kamala Harris will choose as her running mate for the White House, several candidates with unique tax backgrounds have emerged. Pete Buttigieg, the Transportation Secretary, shares similar tax policy positions with Ms. Harris, including a call to revert the corporate tax rate to 35%, along with support for tax credits to promote renewable energy.  Josh Shapiro, Roy Cooper, and Andy Beshear, Democratic governors of Pennsylvania, North Carolina and Kentucky respectively, have expressed opinions in line with Ms. Harris's tax policy priorities but have faced challenges from divided or Republican-controlled legislatures. Sen. Mark Kelly (D-AZ) has shown alignment with Ms. Harris on issues such as cannabis banking and a national gas tax holiday. Scholar Aaron Mannes suggests that Sen. Cory Booker (D-NJ) could be a close alignment with Ms. Harris due to their work together on marijuana reform and shared policy positions. These potential running mates bring diverse tax perspectives that could influence the policy direction of a Harris administration.

 

Tax Notes

IRS Commissioner Danny Werfel was honored with the Vanguard Award by the National Association of Tax Professionals (NATP) at Taxposium 2024. The award is given annually to an individual who contributes significantly to advancing the federal tax industry while promoting fairness, efficiency, and compliance. NATP chief executive Scott Artman praised Mr. Werfel's dedication and innovative leadership in improving the tax system. Mr. Werfel, in turn, recognized the IRS workforce as the true drivers of progress and excellence. Taxposium is NATP's flagship event, where tax professionals gather to exchange ideas with industry leaders and educators.

 

CPA Practice Advisor

Corporate America is preparing for a potential shift in diversity policies: the upcoming election could bring changes to the current supportive environment. While Joe Biden repealed Donald Trump's executive order restricting diversity initiatives, a second Trump administration could reinstate it, putting pressure on companies. Many businesses have already become cautious about promoting their diversity programs publicly due to legal attacks and criticism. A Trump administration could use various levers of power to influence corporate policy, including anti-DEI rules for federal contractors. However, despite the potential backlash, a majority of Americans still support diversity programs. Kamala Harris is expected to continue the Biden administration's agenda on diversity, avoiding being labeled as too liberal. Younger employees, in particular, value diversity in the workplace. Regardless of the election outcome, companies are advised to carefully consider their diversity policies and not simply change them for political reasons.

 

Bloomberg

The Government Accountability Office (GAO) has called on the Administrative Office of the U.S. Courts to take stronger action against workplace misconduct. The GAO's report revealed over 500 allegations of misconduct, including nearly 200 cases of discrimination, within the court system between 2020 and 2022. The report highlighted the need for improved data collection, better identification and addressing of misconduct, and equal treatment of complaints. Representative Norma J. Torres emphasized the importance of holding the federal Judiciary to high standards of integrity and ethical conduct. The report also criticized the court system's policies for not aligning with recommended practices to prevent harassment. The GAO's findings have prompted calls for change and increased efforts to protect the over 30,000 employees within the federal Judiciary.

 

Washingtonpost.com

AI startup Tezi has raised $9m in seed funding to develop an AI bot that seeks to revolutionize the HR recruiting process. The bot will sift through resumes, schedule interviews, and send out emails to candidates that match hiring criteria. Tezi's founders believe that existing tools fall short and that an end-to-end workflow is needed. While the process still requires human engagement, the hope is that it will become fully automated as models improve. The founders are also working on minimizing bias in the hiring process. Tezi has trained its models on 250 million profiles and is currently working with design customers. Tezi CEO and co-founder Raghavendra Prabhu acknowledged that HR has been using automated resume screening for some time, but the company saw an opportunity with the new generation of large language models (LLMs ) to build a more sophisticated recruiting tool for HR. “I think it's the combination of reasoning and natural language that we felt gave us an option to build something very, very different from what's historically been done by software in this space,” he explained.

 

Techcrunch

CBIZ has announced that it has entered into a definitive agreement to acquire the non-attest business of Marcum LLP, a $2.3bn cash-and-stock deal that will make it the seventh-largest accounting services provider in the U.S. with approximately $2.8bn in annual revenue. With approximately $1.2bn in revenue and more than 3,500 professionals, Marcum ranks as the 13th-largest accounting firm in the U.S. Marcum provides a wide range of professional services to entrepreneurial companies, midcap and micro-cap SEC registrants, and high-net-worth individuals. The transaction is expected to close in the fourth quarter of 2024 subject to the approval of CBIZ stockholders, the approval of Marcum's partners and other closing conditions.

 

PR Newswire

Federal Reserve Chair Jerome Powell said officials could cut interest rates at their meeting in September, moving closer to a new phase that seeks to avoid weakness in the labor market in the midst of signs inflation is heading lower. “The broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate,” he said at a news conference on Wednesday. “A reduction in the policy rate could be on the table as soon as the next meeting in September.” While Wednesday’s decision to leave rates in a range between 5.25% and 5.5%, a two-decade high, was unanimous, Mr. Powell suggested that at least one official had argued in favor of lowering rates at this week’s meeting. He added that inflation has come down notably in recent months, adding, "It's just a question of seeing more good data."

 

USA Today

CNBC

Washington Post

Wall Street Journal

America’s gross national debt topped $35tn for the first time on Monday, according to the Treasury Department. The milestone comes just months after the U.S. eclipsed the $34tn threshold in early January 2024, while the $33tn mark was reached in September 2023. The Treasury said it borrowed $234bn in the three months to the end of June, less than it anticipated, adding that it expects to borrow $740bn over the three months to the end of September. "This news is incredibly sobering – and incredibly unsurprising for anyone who has been following our fiscal trajectory," Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said in a statement. "Just last month the Congressional Budget Office warned Americans that debt held by the public is on its way to a new record share of the economy in three years. The deficit will be nearly $2tn this year and nearly $3tn in ten years."

 

Fox News

New York Times