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Attorney General Merrick Garland said on Wednesday the investigation of who leaked reams of tax information about wealthy Americans to the ProPublica news organization will be a priority for him, calling the situation “astonishing.” In an appearance before the Senate Appropriations Committee, he described it as "an extremely serious matter," adding "People are entitled, obviously, to great privacy with respect to their tax returns.” ProPublica reported on Tuesday that it had obtained tax information covering more than 15 years that shows the richest Americans - including Amazon founder Jeff Bezos, media titan Michael Bloomberg and investor Carl Icahn - paid little or no federal income taxes. The nonprofit news organization said it didn’t know the source of the information and didn’t solicit it.

 

CNBC

Politico

The senior Republican on the House Financial Services Committee said he’s opening an investigation into the SEC's dismissal of William Duhnke III from the role of PCAOB chairman. Representative Patrick McHenry (R-NC) described the move as "partisan," and an “unprecedented attempt to politicize” the audit watchdog.  The SEC announced Mr Duhnke’s termination last Friday, after a pressure campaign by progressive Democrats and investor advocates who argued that the PCAOB had been defanged during the Trump administration. The SEC also said that it’s seeking replacement candidates for all five of the regulator’s board members. 

 

Bloomberg

Clients anticipate that audit fees will increase nearly two-thirds in 2021 due to the impact of inflation, COVID-19, acquisitions and divestitures, according to a survey by Gartner. The 62% increase that’s expected may be offset by technology savings, however. Organizations that automate at least 25% of their internal controls paid 27% lower audit fees on average, according to Gartner’s survey of 166 publicly traded and privately held companies. Of the respondents, 81% used a Big Four audit firm. Companies with fewer than 50 controls, and more than 25% of them automated, reported 52% lower audit fees relative to ones with less than 25% of their controls automated. In comparison, companies with 50 to 250, as well as more than 250 controls and more than 25% automated, showed 27% lower audit fees. “With audit fees increasing significantly, finance leaders should take note that organizations with higher levels of internal control automation saw substantially lower external audit fees on average,” said Ashwani Gupta, director in the Gartner Finance practice, in a statement. " Automation of internal controls can play a role in not only reducing financial reporting and audit risks but also audit costs. As organizations invest in internal controls automation it will likely become a prominent argument for audit fee reductions in the future."

 

Accounting Today

AICPA's Auditing Standards Board has amended its standards to include guidance on the use of specialists and pricing information. Statement on Auditing Standards (SAS) No. 144 amends two earlier auditing standards, SAS No. 122 and SAS No. 143, to address some of the comments the board received on an exposure draft of SAS No. 143. The amendments provide guidance on applying SAS No. 143 when a company has used the work of a specialist to develop accounting estimates, when the auditor evaluates management’s estimates related to the fair value of financial instruments, and when a firm uses the work of an auditor’s specialist. The guidance takes effect for audits of financial statements for periods ending on or after December 15th 2023.

 

Accounting Today`

Armanino LLP will merge with St. Louis-based Brown Smith Wallace, effective August 1st. The deal adds Brown Smith Wallace’s strong presence in the Midwest to Armanino’s home base in California, as well as its growing operations in the Pacific Northwest, Texas, and the Chicago area.

 

Accounting Today

Business executives are warning that an under-developed infrastructure is holding America back economically. A new survey by RSM of middle-market executives, conducted in partnership with the U.S. Chamber of Commerce, found that 63% of respondents say that an aging infrastructure restricting growth of the national economy. When asked about 21 specific initiatives , such as improving interstate highways, bridges, ports and railways, at least 63% of executives said those improvements would have minor, moderate or significant benefits to their company's day-to-day operations. There was even stronger support for modernizing certain elements of infrastructure: telecom network security (95%), local roads or highways (94%), telecom networks such 5G (94%) and the energy grid (90%). "The middle market is signaling to the political authority that we need to improve overall efficiency and productivity because the roads, bridges, waterways and conditions of broadband technology are holding us back," said RSM chief economist Joe Brusuelas. "We need to invest in the future." The findings come as President Joe Biden works to convince Republicans in Washington to support his $2tn American Jobs Plan that would aim to modernize roads, bridges and broadband and invest in clean energy.

 

CNN

The National Retail Federation said on Wednesday that it expects U.S. retail sales to jump 10.5%-13.5% to $4.44tn-$4.56tn this year compared with last – close to double the forecast it gave in February, when it predicted that spending would increase 6.5%-8.2%. The new projection compares with $4.02tn in total retail sales in 2020 and $3.76tn in 2019. The NRF also increased its projection for full-year GDP growth to about 7%, compared with the 4.4% to 5% it expected earlier this year. Group chief economist Jack Klenhenz said government stimulus has flowed through the economy, fueling shoppers’ appetite for spending and a quicker-than-expected recovery. “We are seeing clear signs of a strong and resilient economy,” he said, adding that households “are ready to resume some normalcy of living, working and playing”.

 

CNBC

Reuters

Wall Street Journal

Jewelry retailer Alex and Ani has filed for Chapter 11 bankruptcy protection, listing assets and liabilities of $100m-$500m each. Mall owners Simon Property. and Brookfield Property are among its largest unsecured creditors; each are owed more than $3m in rent payments. The filing comes nearly two years after the firm sued Bank of America for more than $1bn, in a lawsuit which accused the bank of fraudulently declaring Alex and Ani in default of a $50 million line of credit and of driving it toward bankruptcy. The case was dropped in August 2019.

 

Bloomberg

Reuters

JBS USA Holdings chief executive Andre Nogueira has disclosed that the firm paid an $11m ransom in bitcoin to cybercriminals who last week temporarily knocked out plants that process roughly one-fifth of the nation’s meat supply. “It was very painful to pay the criminals, but we did the right thing for our customers”, he said, adding that the payment was made after the majority of JBS plants were up and running again. The subsidiary of Brazilian firm JBS SA halted cattle slaughtering at all of its U.S. plants for a day last week in response to the cyberattack, which threatened to disrupt food supply chains and further inflate already high food prices. A Russia-linked hacking group is behind the cyberattack against JBS, a source familiar with the matter said last week. The Russia-linked cyber gang goes by the name REvil and Sodinokibi.

 

Reuters

Wall Street Journal

Global inequality is likely to widen this year as a small number of major economies power the fastest recovery in 80 years while many poorer countries struggle to return to pre-pandemic income levels, the World Bank said. The global economy is set to grow by 5.6% this year, up from a January forecast of 4.1%, marking the fastest recovery from five post-World War II recessions, the bank said in its semiannual Global Economic Prospects report. While about 90% of advanced economies are expected to regain their pre-pandemic per capita income levels by 2022, only about one-third of emerging-market and developing nations are likely to do so, the bank said, in part because of uneven access to COVID-19 vaccines. Growth in the U.S., the world’s largest economy, is projected at 6.8% this year, up from the bank’s January forecast of 3.5%. Growth is forecast at 8.5% in China, the second-largest economy, 8.3% in India and 4.2% in the euro area.

 

Wall Street Journal

Bitcoin's value shot up after El Salvador became the world's first country to accept it as legal tender. As of 3:30 a.m. ET on Thursday, the virtual currency was trading at $36,849 per coin, jumping about 7.9% over the last 24 hours, according to CoinDesk. On Wednesday, lawmakers in the Central American country passed a law that made bitcoin legal tender. It means prices can now be shown in bitcoin and tax contributions can be paid with the digital currency. The country has struck a partnership with digital wallet company Strike, to build the country’s modern financial infrastructure using bitcoin technology

 

CNN

CNBC