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Technology
Karbon State of AI in Accounting 2025 Report Reveals Competitive Advantage for Firms Embracing AI [Globe Newswire]
Today, many accounting firms are feeling the pressure of the industryās ongoing talent shortage. The industry has seen a 33% decline in candidates sitting for the CPA exam (from 2016-2021), highlighting the urgent need to boost productivity and do more with less. The report reveals that mid-sized (21-50 employees) and large firms (over 200 employees) are leading AI adoption. Findings also uncover an industry paradoxāwhile 85% of respondents are optimistic about AIās potential in accounting, far fewer (37%) are actively investing in AI training for their teams, leaving firms at risk of falling behind and impacting profitability.
How a Once-Hot Fintechās AI Bet Led to Bankruptcy [Bloomberg]
Bench Accounting, like many fintech startups, had ambitions to shake up a boring but important corner of finance ā in this case, bookkeeping for small businesses. It racked up more than 10,000 clients in a little over a decade, and seemed well on its way. Yet that wasnāt fast enough to make it the hot fintech it aspired to be when it raised over $100 million in venture financing. In a final push to improve its business, Bench turned to techās favorite new go-to: AI. It laid off staff and introduced new automation programs, including a bot named BenchGPT. It all culminated in nothing short of a disaster, punctuated by a troubled 2023 tax season when the company needed to request extensions for many of its clients, according to former employees. The next year was no better. As 2024 ended, Bench told clients it couldnāt handle their books. This January, the company filed for bankruptcy, hammering investors including Contour Venture Partners, Bain Capital Ventures and Inovia Capital. Its customers were temporarily left in limbo until an acquirer agreed to buy its assets and revive the business.
Prompt engineering: interacting with generative AI tools [ICAEW Insights]
Prompt engineering is fast becoming a critical skill for accountants who want to make the best use of emerging generative artificial intelligence (GenAI) tools. Knowing how to create prompts for such tools will boost productivity, accuracy and speed. It is also becoming a job in its own right, with a variety of industries beginning to advertise for these roles. Just Google āAI prompt engineerā and discover the salary range for this nascent job type, which currently ranges between Ā£30k and Ā£400k depending on experience and industry.
AI In action: Transforming Canadaās public sector [CPA Canada]
āThe thing with AI is it can be such a pervasive technology that thereās a lot of places where it could be used depending on the type of AI weāre talking about and the types of information itās dealing with,ā says Melissa Robertson, principal of data integrity and assurance with CPA Canada, focused on research, guidance and support.
Private Equity
Government backtracks on tax hike for private equity firms [City AM]
The government has reversed a decision to hike taxes on private equity firms by ditching changes to the tax treatment of members at limited liability partnerships (LLPs). The new guidelines, which were released last year, targeted salaried members on what tax contribution they pay, which affected the partner compensation at most firms. Much of the professional services industry falls under this rule, as law firms, accountancy firms, private equity and many consultancies tend to operate as an LLP.
Private Equity Eyes AI for Efficiency Gains [Digit News]
The majority of venture capitalists and private equity firms expect automation and AI adoption to continue playing an outsize role in fund management this year, however uncertainties around ESG reporting requirements are causing some concerns, according to a new report from Dynamo Software. Based on a snapshot from eighty chief financial officers, fund accountants, and managers over the past eight weeks, the Trends, Challenges, and Insights from Leading PE/VC Fund Accountants report found 70% agreeing that AI adoption will gain more momentum in the sector over 2025, with 61% saying the technology will be pivotal to future investment management.
Further Investigation Needed
Looking at the AICPA’s 2022 Form 990 for reasonsā¦ did you know Barry Melancon was paid $2.7 million a year? And that the AICPA paid EY $14.8 million for consulting? š¤
ā Going Concern (@going_concern) February 19, 2025
Firm Watch
Baker Tilly eyes London for Ā£300m listing [The Times]
One of Britainās biggest accountancy firms is considering a Ā£300 million-plus flotation in a potential boost to Londonās under-pressure stock market. MHA, which is the UK arm of Baker Tilly International, is understood to have hired advisers from Cavendish, an investment bank, to examine a possible listing on the junior Aim market in a share sale that would probably result in lucrative windfalls for at least some of the firmās 147 partners. A deal could raise as much as Ā£125 million, including between Ā£30 million and Ā£50 million of new money, City sources said. A valuation of more than Ā£300 million is being targeted.
Berry, Dunn, McNeil & Parker Agree to $7.25 Million Data Breach Settlement [The HIPAA Journal]
Berry, Dunn, McNeil & Parker, LLC (BerryDunn) has agreed to settle a class action lawsuit that alleged negligence for failing to prevent a data breach that affected more than 1.1 million individuals. BerryDunn has agreed to establish a $7.5 million settlement fund to cover attorneysā fees, legal costs, expenses, and claims from class members.
Ascend Adds VP of Partnerships [INSIDE Public Accounting]
Arlington, Va.-based Ascend, a partner for regional accounting firms supported by private equity firm Alpine Investors, announced it has added a VP of partnerships to its growing leadership team. Effective Feb. 17, Maureen Churgovich Dillmore will oversee the expansion of Ascendās modern growth platform for regional accounting firms into new markets across the U.S.
EY Names Richard Clough as Global Chief Data Officer [Technology Magazine]
He outlines his priorities in a LinkedIn post: āAs the Global CDO, I look forward to driving our AI Ready data strategy to deliver tangible value for EY and our clients. This includes building a strong AI Ready data foundation, leveraging synthetic data and partnering with stakeholders both external and internal across our ecosystem including our tech alliances.ā
Moore Global delivers record revenues after private equity boost [The Times]
Cash injections from private equity firms helped one of Britainās largest mid-tier accountancy groups to deliver record revenues last year. Moore Global, which is made up of 227 member firms in 114 countries, grew its revenues by 13 per cent to $5.1 billion in 2024. A small portion of that increase came from the addition of 14 new firms to its network but most of the growth was organic. Six of Moore Globalās ten largest members have received investment from private equity, including US-based Citrin Cooperman, which recently sold a stake to Blackstone.
Grant Thornton invests Ā£1m in data and digital training [Accountancy Today]
Grant Thornton UK has announced a Ā£1m investment in a ācutting-edgeā business transformation programme with Data Literacy Academy, which has been designed to āempower its people to step into the futureā with a data-driven, digital mindset.
The Profession
Thoughts on the rise or fall of accounting [Accounting Today]
Marc Rosenberg writes in an AT column:
Our profession has withstood many sea changes and survived them ā¦ and then some. Looking over the most recent 40 years of the CPA industry, there have been epic positive changes that the CPA profession made to avoid declining: Being able to sell without ethical restraints; Providing services other than basic compliance work; Running a firm like a real business instead of a bunch of collegial buddies with no one really in charge; The advent of computers, causing legions of CPAs to do things with technology that they used to do by hand; The consolidator storm of the late 1990s, closely followed by merger mania that shows no signs of letting up; Remote work, necessitated by COVID, prevented legions of staff, especially younger ones, from benefitting and developing from the collegiality and learning that is best cultivated by being in an office with co-workers. Today, the trend is getting back to more time in the office, such as hybrid schedules that require staff to be in the office three days a week.
Talent
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News
IRS blocks Musk aide from accessing taxpayer data [Reuters]
The U.S. Internal Revenue Service has blocked a key aide to tech billionaire Elon Musk from accessing individual taxpayer returns or other personal information as part of a deal signed between the tax-collecting agency and the Trump administration. The agreement would seem to avert what some IRS officials had privately described as a worst-case scenario, in which the aide, 25-year-old software engineer Gavin Kliger, had free reign of the agencyās databases containing sensitive taxpayer data.
Big Four accounting firm gets plush new Raleigh office (Photos) [Triangle Business Journal]
PricewaterhouseCoopers (PwC) has moved into a 23,000-square-foot office at 4114 Center at North Hills St., part of Kane Realtyās remake of the Main District. Itās a significantly larger space than the firmās former 15,000-square-foot space in the nearby Captrust tower along Six Forks Road.
KPMG Says Big Four US Moves Would Displace Some Law Firm Service [Bloomberg Law]
A top KPMG executive predicts US corporations will increasingly turn to accountingās Big Four for legal work because they have better technology to handle matters including huge data sets and multiple contracts. The massive accounting firmsā harnessing of technology will push companies to direct large-scale legal work to them, said Stuart Bedford, KPMGās global head of legal services, in an interview. The firms can harmonize thousands of legal contracts as part of post-merger integration or help re-orient supply chains in an uncertain tariff environment under President Donald Trump, he said.