Monday Morning Accounting News Brief: How CPAs Are Actually Using AI; Ex-Big 4 Guy on How to Navigate Worklationships | 6.2.25
Well it’s June so you know what that means…actually no, wait. Up until last year, it meant that firms slap rainbows on their logos for 30 days but the rainbows were suspiciously absent last year, not only from the Middle East branches but everywhere. See: Yo, Where Are the Rainbows? published June 6, 2024. We expect more of the same this year and will be retiring this meme.
If you don’t mind, let us know if your firm is doing anything to recognize its LGBT staff this Pride month .
Alright, news.
Journal of Accountancy asked six CPAs how they’re using AI. I don’t know about you but I really appreciate articles like this filled with actual use cases and not just generalizations about how everyone should be using AI without much meat and potatoes.
Karl Spanbauer, CPA, controller at Capital Area Food Bank in DC, explains how his non-profit is using automation to handle its physical mail problem:
Drawing on his experience with Microsoft Power Automate and other software, Spanbauer built his own solution to scan, summarize, and respond to mail.
Here’s how it works:
- Staffers run all business-related mail through a scanner.
- The scanned file is automatically saved to a shared drive.
- An image analyzer extracts the text of the image.
- The text is analyzed by a secure large language model (LLM), which generates a summary.
- A ticket is opened in Jira, the team’s workflow system, which includes the summary and the original mail.
- The team tackles the tickets, responding to the mail as needed.
Spanbauer has added further automations to the system, making it easier to look up the status of scanned invoices and carry out other follow-up actions.
JofA then breaks it down even further:
- Degree of difficulty: Spanbauer relied on deep experience with Power Automate and other tools. The solution was quick to implement but was built on top of months of work to connect systems and data.
- Cost: The project didn’t bring any additional costs to implement; it relies on the team’s existing licenses.
- Payoff: The team now tackles the mail in 20-minute sprints for “Mail Mondays,” saving about four hours of total staff time per week.
- The takeaway: The project worked because Spanbauer already had a robust digital environment — he just needed a way to bring the postal mail into it. “AI can’t interact with a piece of paper sitting on my desk. I had to get that piece of mail into that ecosystem,” he said.
Cool piece, right? More like this please.
Here’s another good one from JofA for employers: How employers can hire the best accounting students
TLDR students want to hear about what sets you apart as a firm.
A Business Insider “As Told To” essay: I quit my job at EY after 13 years to launch my own business. Here are the 5 lessons I learned from my Big Four career. 13-year EY Joshua Lee, who graduated from UCLA with a major in business economics and a minor in accounting, had this to say about how he got there:
After my father passed away when I was young, Uncle Jack stepped in as a father figure. He worked at BDO Global and encouraged me to speak with consultants and shadow his colleagues so I could decide for myself if the Big Four path was right for me.
Let’s highlight this lesson he offered up. Call it a hunch, I feel like some of you need to read this today.
The 80/15/5 rule
Former senior partners at EY gave me this framework early on: 80% of people will love you, 15% are undecided, and 5% just won’t, no matter what you do or say. Focus on that 15% and try to win them over. Don’t forget to nurture the 80%. But stop losing sleep over the 5%.
It still affects me today. However, it’s gotten better as I get older, perhaps because I still care but don’t have as much time or energy to worry about what others think about me.
Here’s a good one from Thomson Reuters: Some tax, audit & accounting firms are rejecting private equity in favor of independence
Amid a dizzying flurry of mega-mergers and private equity acquisitions among tax, audit & accounting firms over the last few years, a growing number of firm leaders are publicly proclaiming their intention to decline any private equity capital infusion or purchase by a larger firm.
Managing Partner Tom Barry, for one, says maintaining the flexible, family-first culture at Los Angeles-based GHJ Advisors is just one reason to declare independence. “I think we all know that if we didn’t remain independent, we’d lose control of that,” Barry says. “That culture is going to be done on Day One, no matter what anyone tells you.”
Of course, that doesn’t mean it didn’t take some soul-searching to make the decision.
“We have people knocking on our door every day for acquisitions and private equity,” Barry explains. “You can’t just be blind to it. You still have to understand it and know what it is. I have a custodial responsibility to understand what the best options for the firm are. We sat down last year and went through financial modeling, what we have to do [to remain independent], what are ‘nice-to-haves,’ what are non-negotiables.”
We don’t trust any firm that says “we’re a family” unironically but it’s something.
A Hollywood firm with a $1.2 billion Registered Investment Advisor business is for sale, allegedly:
Singer Burke, a Los Angeles-area accounting and business management firm with a $1.2bn RIA arm, is pursuing a sale, according to sources with knowledge of the situation.
A source said Singer Burke has retained Dalphia Partners to serve as its financial advisor leading the sale effort. The company is looking to sell itself to a strategic wealth management acquirer, according to a source.
Various sources put Singer Burke’s revenue between $9 million and $17 million.
Vancouver’s Smythe is halfway back in the good graces of the Canadian PCAOB, reports Canadian Accountant:
Two years after prohibiting Smythe LLP from accepting new publicly traded audit clients, the Canadian Public Accountability Board is easing its restrictions on the Vancouver-based accounting firm. Instead of prohibiting the firm from accepting new reporting issuers, the Canadian audit watchdog’s restriction has been modified, and the firm is prohibited from accepting new high‐risk reporting issuers, including those resulting from initial public offerings, reverse takeovers or other transactions.
The move comes two months after the Public Company Accounting Oversight Board — the American equivalent of CPAB — found Smythe LLP had a 100 per cent deficiency rate in three 2023 audits the PCAOB inspected in 2024. The PCAOB, as reported by Canadian Accountant, also found Smythe non-compliant with rules related to communications with issuer audit committees and reporting.
PwC made some cuts in Hong Kong:
PricewaterhouseCoopers, or PwC, is said to have let go of around 50 partners in Hong Kong, with multiple departments having pay cuts of up to 30 percent, according to media reports.
Some of the partners are leaving the accounting firm voluntarily, while others are being sacked, local media reported on Monday.
PwC will focus its resources on the Technology, Media, and Telecommunications (TMT) sector in the future, the report said. Chinese tech giants Tencent and Alibaba are currently among PwC’s clients.
And in Korea, their measure of audit quality is up, as in getting better. The translation is a bit rough but you get the idea:
Last year, an average of 8.7 improvement issues in audits was recorded per accounting firm. Since the implementation of the registering system for auditors of listed companies in 2020, the number of identified issues has shown a consistent downward trend.
This year, reviews were conducted on a total of 14 accounting firms, including two major firms, Samjong KPMG and Deloitte Anjin. The identified issues averaged 6.0 for major accounting firms and 9.2 for others.
By element, there were an average of 2.2 issues in work performance, 1.9 in leadership responsibility, and 1.5 in ethical requirements and human resources.
Was that enough news for you? It was for me.
As always, dear reader is encouraged to email or text with any thoughts, tips, or news stories you think we’d like. Have a wonderful week, you.
