PwC Israel, also called Kesselman & Kesselman CPAs, today was sanctioned by the Public Company Accounting Oversight Board for widespread training exam misconduct.

From 2017 to 2022, hundreds of individuals at PwC Israel cheated — by sharing questions or answers, or by receiving access — on online tests for mandatory internal training courses related to the firm’s U.S. auditing curriculum, professional independence and professional ethics.

“The PCAOB will not tolerate cheating or other unethical behavior at PCAOB-registered audit firms, regardless of whether the firm is located in the United States or abroad,” PCAOB chair Erica Williams said in a statement. “We will hold firms accountable when they put investors at risk by failing to comply with the PCAOB’s quality control standards.”

Krisztian Bocsi/Bloomberg

Since 2021, the PCAOB has sanctioned 10 registered firms for quality control deficiencies related to internal training exam misconduct. In April 2024, it levied a $25 million fine against KPMG’s firm in the Netherlands, as well as $2 million in fines against Deloitte’s firms in Indonesia and the Philippines, for cheating on exams.

“Integrity is fundamental to effective auditing,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement. “Investors must be able to trust that auditors will act with integrity when performing their professional duties.”

Without admitting or denying the findings, PwC Israel agreed to pay a $2.75 million civil money penalty. The firm was censured by the PCAOB and is required:

1. To review and improve its quality control policies and procedures to provide reasonable assurance that its personnel act with integrity in relation to internal training; and,
2. To report to the PCAOB that it has done so within 150 days.

PwC Israel’s legal counsel did not immediately respond to request for comment. 

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Like many professional advisors, I love checking out all new shiny objects coming down the pike. If they can make our professional lives easier, why not? Sometimes, it’s a new app or a new way of doing business or the latest AI improvements. Hearing about the next big thing gets excited about the future ahead. That’s the fun part of our profession.

But Alex Hormozi, an accomplished entrepreneur, author, and investor, believes that when you’re running a business, you have two competing buckets taking up your time and energy: (1) problems and (2) missed opportunities. Cool tools, like AI, new technology or even new niches to pursue, offer the potential to make your business even better. It’s human nature not to want to suffer from FOMO (fear of missing out). But there’s an opportunity cost to pursuing those shiny objects. 

Meanwhile, stubborn problems in your business may be holding you back from reaching your full potential. Like Hormozi, I believe you should address these impediments first. For instance, is your team failing to get back to clients promptly? Is your firm’s Net Promoter Score sinking? Is staff turnover higher than you’d like it to be? Are you chronically underbilling your clients? 

You know you should address these basic blocking and tackling issues, but Hormozi believes many business owners — including professional service firm leaders — would rather pursue the next hot thing instead. The reason? Solving problems is hard. It’s not sexy. But shiny objects are fun and exciting. In other words, missed opportunities are about doing more. Problems are about doing less — but better.

Low-tech solution to a high tech issue

So, how can you stay focused on your most important business problems without being distracted by the shiny objects? Keep a notebook. Better yet, keep two notebooks with you at all times: One for problems and one for missed opportunities. 

In the missed opportunities notebook, write down every shiny object pining for your attention, and let it sit for 60 days. After several months have passed, revisit those opportunities. More often than not, those fantastic ideas from a month or two ago may not seem so great today. They may not seem very realistic to implement. This approach prevents you from making impulsive decisions that waste your valuable time, resources, and mental energy. Meanwhile, if an idea from several months ago still seems worth pursuing, then you can move it to the next level of consideration. But only after you’ve tackled your core problems first. 

Here’s why. 

Your clients don’t care about the new AI tool you are implementing if it still takes you six days to call them back. I’m guessing they won’t be impressed by the new client portal you’ve rolled out — with all the bells and whistles — if you can’t keep a senior tax manager for more than 18 months because of your firm’s toxic culture. 

As we’ve discussed in prior articles, clients don’t leave your firm because you lack tools. They leave because they don’t feel important. What’s the best tool to make them feel important? The telephone. Use it. Give them a call and remind them how valuable they are to your firm and that you’ve got them covered at all times.

Again, exploring shiny new objects is much more fun than addressing your longstanding problems. But once you make the commitment to fixing your problems, many other challenges in your business will start to solve themselves. 

Solving persistent problems

When you take out your problems notebook, write down the three biggest core problems in your business. Ask your team: 

• “What’s going on with our client service? What’s our core problem there?” 
• “What’s going on with our team? What are their biggest issues?”

Then ask: “What’s going on at the business level, and what’s the biggest problem there? Next, pick one problem — one problem only — and be relentless about solving it. 

You can’t work on three problems simultaneously and hope to solve them all. Mobilize the entire team and put a laser focus on the highest priority issue and get after it. If someone brings up another problem, that’s fine. Write it down in your problems notebook and file it away. 

If everyone on your team is rowing in the same direction and focusing on the same goal, solving the problem won’t take nearly as long as you think. But if you and your people are continually distracted by different problems and opportunities, you won’t make any progress. 

Have the courage to clear the decks and say, “This is all we’re working on right now. We can’t focus on new stuff until we lock the back door and solve the issues weighing us down?” Tackle the core problems first because if one of the opportunities works out and doubles your business overnight, guess what?  You’ll have exponentially more problems. People will burn out and leave. Clients may drop you. Morale will plummet, and your reputation will take a big hit. 

That doesn’t sound like such a great opportunity after all, does it?  So right the ship first. Then, you can pull the lever on opportunities as much as you want. 

Just don’t tell me you have no problems to address. All of the client feedback is great? Really! No one is saying client service could be better? C’mon! You’re having no trouble attracting and retaining talent? And at the business level, are all of your numbers where they should be? I didn’t think so. 

Instead, write down your most significant problem in each of those three areas, focus on that one thing, and then have everyone focus on the same problem relentlessly until you can say: “OK. We’re 80% there. This is good. Let’s move on to the next problem.” 

Take the time to fix what’s broken before chasing the next shiny object. You’ll be better positioned to capitalize on future opportunities when the time is right. How is your firm addressing challenges and pursuing new opportunities? I’d like to hear more.

Zimbabwe’s market regulator is seeking clarity from the central bank on new rules that require companies to report results in the local currency, forcing them to adopt hyperinflationary accounting and increasing the cost of doing business.

The Securities and Exchange Commission is “engaged” with the relevant authorities on the way forward, Zimbabwe Stock Exchange Chief Executive Officer Justin Bgoni said Monday. 

Governor John Mushayavanhu earlier this month ordered companies listed on the exchange to adopt the ZiG, short for Zimbabwe Gold, for reporting purposes with “immediate effect,” including for the 2024 audited financial statements. 

The ZiG is used in 30% of all transactions in the economy with the rest in US dollars.

The exchange has since 2023 allowed companies to report results in dollars, with firms including beverage manufacturer Delta Corp Ltd. switching. 

The nation last used this type of accounting when the Zimbabwean dollar was still legal tender. Consultancy KPMG said signs of hyperinflationary economies include a preference by the population to hold a stable foreign currency to preserve value. 

A supermarket till operator displays a 10 ZiG banknote and 5 Zig coin

ZSE-listed FBC Holdings Ltd. warned the move could introduce “accounting complexities, inflation translation risks, investor concerns and regulatory challenges,” the Harare-based lender said in a recent client note.

It will also require companies to adjust accounting software, financial models and auditing procedures and “the application of IAS 29 — financial reporting in hyperinflationary economies — guidelines, leading to frequent revaluations,” it said.

The ZiG is the nation’s sixth attempt at a functioning local currency since 2009. It has shed 95% of its value since its debut, amid exchange-rate volatility that forced authorities to devalue the currency in September.

The southern African nation’s difficult operating environment recently led to the exit of global accounting firms Deloitte LLP and PwC LLP.