Friday Footnotes: Deep Bench Has Government Consultants Worried; Accounting Programs Add AI; Make M&A Great Again | 3.7.25

We See You, #TaxTwitter

Have you reached the eye twitch part of tax season yet?

— Logan Graf (@LoganGrafTax) March 6, 2025

Consulting

Trump administration to expand blitz against spending on consultants [Financial Times]
An FT analysis of federal data shows that more than 30 contracts held by the 10 consultants have been completely or partially cancelled. The largest is an umbrella contract covering IT services for the Internal Revenue Service, led by Deloitte, valued at up to $1.9bn over seven years.

Deloitte and Accenture workers worry about losing their jobs as DOGE focuses on consulting contracts [Business Insider]
Workers within Deloitte’s Government & Public Services division told BI that the Big Four firm had not made any overt policy changes in reaction to federal contracts being under review. But one employee described the atmosphere as “stressful” and said that projects were getting pulled, which had created a very large bench. “There really isn’t a lot of work available to apply for,” the worker said, adding that they thought it was best to leave government consulting and return in a few years “when things have settled.”

Analysis: PwC’s Saudi ban is a warning sign [Semafor]
Two unrelated events this week suggest that the boom time for foreign consultants in Saudi Arabia may be ending: Oil prices hit a three-year low of $68 a barrel on Wednesday, and PwC has reportedly been halted from securing new consultancy and advisory contracts with the Public Investment Fund until next year. The Gulf is one of the few remaining growth markets for global consultancy firms, and Saudi Arabia has been a particularly lucrative destination. The kingdom’s Vision 2030 transformation has relied heavily on firms like McKinsey & Co., Boston Consulting Group, PwC, and others to design and execute economic and regulatory overhauls. Entry-level compensation is higher than London “even without adjusting for taxes,” according to The Financial Times, and the region has become a bright spot in a declining industry.

The Future of EY Consulting: A People-First Approach to Unlocking AI’s Possibilities [CBS News]
Wonder how much EY paid CBS for this obvious ad?

Consulting Firm BRG Suffers Cyberattack Amid Debt Sale [Bloomberg]
Berkeley Research Group suffered a cyberattack last week, according to people with knowledge of the matter, just as banks have been looking to wrap up a debt sale that would finance the consulting firm’s buyout by Towerbrook Capital Partners. The firm discovered its systems had been breached on March 2, and received several ransomware notices from a hacker, according to the people, who asked not to be identified discussing a private transaction.

Private Equity

A weakening economy could help private equity [Axios]
A giant reason why PE/VC funds have refused to sell or take portfolio companies public over the past few years is that they’re waiting for valuations to grow into the inflated prices they paid in the first place (plus a premium). Particularly for deals done in 2020 and 2021.

Related:

“MAGA doesn’t stand for ‘Make M&A Great Again,’” says Treasury Secretary Scott Bessent.

— Squawk Box (@SquawkCNBC) March 7, 2025

Audit

Chair Williams To Host Chicago Forum for Auditors of Small Businesses and Auditors of Broker-Dealers [PCAOB]
The Public Company Accounting Oversight Board (PCAOB) that PCAOB Chair Erica Y. Williams will host an in-person forum on auditing in the small business environment and on auditing broker-dealers in Chicago on April 3, 2025. Tailored to PCAOB-registered firms auditing smaller public companies or broker-dealers, the forums provide a unique opportunity for auditors to interact with representatives from the PCAOB and other regulators.

US to Audit Any Bitcoin Reserve Holdings, White House Says [Bloomberg]
One of the first steps after the establishment of a US strategic Bitcoin Reserve and a separate stockpile of other digital assets will be an audit of how much cryptocurrency the government holds, according to White House crypto czar David Sacks. President Donald Trump signed an executive order late Thursday creating the Strategic Bitcoin Reserve and the separate stockpile of other digital assets, to be capitalized with crypto forfeited in legal proceedings. Both the reserve and the stockpile will contain crypto forfeited as part of legal proceedings, the action said.

Education

Colleges Inject AI Into Accounting Programs to Increase Appeal [Bloomberg Tax]
“One of my favorite lines is: ‘AI may not replace your job, but the person who knows how to use it will,’” said Derek Thomas, national partner-in-charge of university talent acquisition at KPMG US.

Firm Watch

Cohen & Co Announces Acquisition of Tassi and Company [INSIDE Public Accounting] Cleveland-based IPA 100 firm Cohen & Company (FY23 net revenue $153.9 million) announced the acquisition of Chicago-based firm Tassi and Company.

Talent

Discarded IRS Workers Enter a Market Hungry for More Accountants [Bloomberg]
Accountants and auditors being purged from the IRS are entering a labor market desperate for their experience and know-how in complex areas of corporate and international tax. IRS workers who lose their jobs will have options. Many are expected to return to the Fortune 500 jobs they left to join the federal tax agency—swapping bigger paychecks for the flexibility to work from home, limited overtime and what they thought would be long-term job stability.

Maryland accounting leaders seek new solutions amid historic CPA shortage [Baltimore Business Journal]
The lack of CPAs has led many local firms to merge, often with private-equity-backed national firms, in order to stay competitive. Accounting industry leaders though, say that trend may not be sustainable and that accounting firms will need to focus on developing from within while also advocating for changes to CPA licensing that could make it easier for people to enter the industry.

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