Friday Footnotes: The Metaverse’s First CPA Firm Gets Sued; CPA Exam Blueprints; Mad Mergers | 1.6.23

Wooooo it’s the first Footnotes of 2023! Here’s what’s going on, there’s not a whole lot of it:

Long Read

FTX Customers Take Enron, WorldCom Path in Legal Fight for Cash [Bloomberg Law]
FTX customers going outside bankruptcy court to recover losses from Sam Bankman-Fried’s failed crypto empire are using a legal path that has worked in past collapses such as WorldCom and Enron: They’re going after the supposed enablers. Laws that freeze claims against debtors in bankruptcy don’t apply to third parties. So customers have filed more than a half-dozen proposed class actions against the NFL’s Tom Brady, accounting firm Prager Metis and Bankman-Fried as an individual, among others. “When you have a massive financial collapse like FTX, there are going to be many, many institutions—and perhaps individuals—who allegedly profited improperly along the way,” said Samuel Issacharoff, a New York University law professor. History shows such actions have a shot at paying off, said James Park, a UCLA School of Law professor. The implosions of WorldCom and Enron two decades ago, also amid fraud revelations, led to class-action settlements in the billions of dollars paid out by underwriters, banks and other parties.

CPA Exam

2024 CPA Exam Blueprints released [Journal of Accountancy]
Changes to the Blueprints and the Exam “really focus on additional technology concepts, including System and Organization Controls (SOC) engagements, data, technology, and a new element in the Exam, personal financial planning,” said Joe Maslott, CPA, associate director–Content Management at AICPA & CIMA, together as the Association of International Certified Professional Accountants. “The Blueprint structure has not changed, but the underlying content in each Core and Discipline Exam section is different, which is why being familiar with each section Blueprint is imperative.”

Employment

Employers added 223K jobs in December, but cut 1,100 in accounting [Accounting Today]
Nonfarm payrolls increased by 223,000 in December and the unemployment rate ticked downward by two-tenths of a point to 3.5%, the U.S. Bureau of Labor Statistics reported Friday, but employment in accounting and bookkeeping services fell by 1,100 jobs.

Money Diary: A Senior External Auditor On 54k [Refinery29]
“I’m 27 years old and currently working as a senior external auditor at an accounting firm in London. I work physically in the office or at the client’s site around three times a week and I work from home for the remainder of the week. My job can be pretty stressful and there is a constant struggle maintaining a good work-life balance. I’m satisfied with my job for now, although I’m not sure how long that will last. I’m an immigrant and I moved to the UK in 2021. I initially lived with my sister outside London and moved into the city in January of this year. I currently stay in a shared house with seven other housemates, which sounds like a lot of people but it’s not so terrible.”

California Program Offers Black Students Path to Accounting [Bloomberg Tax]
Black students in California can prepare for and take the certified public accountant or certified management accountant exam for free under a pilot program that aims to help diversify the accounting profession. The program, spearheaded by six major accounting groups, also aims to entice Black professionals who already have accounting degrees or MBAs to teach accounting to the next generation of accountants.

Practice

Challenges And Opportunities For Accounting Departments In 2023 [Forbes]
In 2023, accounting departments likely will face challenges in four areas: budget uncertainty, creating sound estimates in an uncertain environment, applying new accounting and financial reporting standards to comply with U.S. GAAP, and labor market uncertainty.

Tax

CPAs rev up for a new tax season [Journal of Accountancy]
JofA highlights a few new issues that will require preparers’ attention for this tax season.

Firm M&A

Melanson Merges Into Marcum [Marcum]
Melanson, P.C. of Merrimack, New Hampshire, merged into Marcum, effective January 1. The firm’s 13 partners, 100 associates, and four offices in Maine, Massachusetts, and New Hampshire become part of Marcum’s New England region. They join Marcum’s eight established New England offices. Terms of the deal were not disclosed.

The Arnold Group has been acquired by KPMG [KPMG]
KPMG LLP announced it has acquired The Arnold Group LLC, a consultancy firm providing growth-oriented strategy development for market leaders in the technology sector for the past 20 years. This acquisition creates a unique capability of strategy, design, and implementation that enables KPMG to quickly gain critical mass and scale. The Arnold Group complements KPMG’s existing services footprint by bringing strategic capabilities in the commercial sales and revenue enhancement areas. As part of the transaction, all Arnold Group team members joined KPMG when the acquisition closed on January 1, 2023. Financial terms of the transaction were not disclosed.

Withum Acquires IPA 200 Firm [INSIDE Public Accounting]
Expanding its footprint in New England, Princeton, N.J.-based IPA 100 firm Withum (FY22 net revenue of $425.3 million) is merging in Braintree, Mass.-based IPA 200 firm O’Connor & Drew (FY21 net revenue of $22.1 million).

CLA Acquires Ohio-Based CPA Firm Gilmore Jasion Mahler [CPA Practice Advisor]
CliftonLarsonAllen (CLA) said on Tuesday that it acquired Ohio-based accounting firm Gilmore Jasion Mahler (GJM) as of Jan. 1. The deal increases CLA’s presence in Toledo to 150 people. Established in 1996, GJM was the largest locally owned public accounting firm in Northwest Ohio, with more than 100 people in Toledo and Findlay, and was recognized as a regional firm with national and international capabilities.

Other Stuff

Six years later, SEC drops claims of accounting fraud against biotech exec [Endpoints News]
The US Securities and Exchange Commission has dropped its claims against the former CEO of Osiris Therapeutics, who was accused of lying about the regenerative medicine player’s financial performance. All claims against Lode Debrabandere have been dismissed, according to a court filing from late November, capping a legal saga that goes all the way back to 2017. “The SEC’s allegations had no merit, and the complete dismissal is the only correct, fair, and just outcome,” Debrabandere wrote in an email to Endpoints News. “I am grateful that the SEC ultimately recognized it should drop the action against me.” The SEC did not explain why the claims were dropped and did not respond to requests for comment.

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