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PwC denies allegations in anonymous letter on Evergrande work

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PricewaterhouseCoopers LLP said it will investigate an anonymous letter circulating on social media that made “false allegations” about the company and its partners over its role in auditing China Evergrande Group. 

“We believe the letter contains inaccurate statements” that “could tarnish PwC’s reputation and infringe” its legal rights, the company said in a statement on Tuesday. PwC Hong Kong has reported it to relevant authorities, and is “treating this incident with high priority,” it said.

PwC has been under the spotlight after China launched one of the biggest investigations of financial fraud in history. Authorities said developer Evergrande’s main onshore unit overstated its revenue in the two years through 2020. The government is examining PwC’s role as a former auditor for the real estate company, people familiar said in March.  

The lobby of PricewaterhouseCoopers Australia office in Sydney
The lobby of PricewaterhouseCoopers Australia office in Sydney

Brent Lewin/Bloomberg

The letter questioned PwC’s role in Evergrande’s accounting fraud among other corporate governance issues.

Bloomberg was unable to verify the authenticity of the letter.

The auditor has run into trouble in other regions. It pledged to boost governance controls in Australia over questions of a serious conflict of interest in leaking government tax plans to its clients. Its U.K. network was also fined £5.6 million ($7 million) for failures in auditing Babcock International Group Plc.

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Accounting

IRS accelerates ERC claims processsing

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The Internal Revenue Service says it has processing underway on some 400,000 claims for the Employee Retention Credit, representing about $10 billion of eligible claims.

Work on the claims for small businesses and others is ongoing as the agency continues to wade through claims from the complex — and at times misused — pandemic-era credit. A significant number of the ERC claims came in during what the IRS calls “a period of aggressive marketing” by promoters, leading to a large percentage of improper, ineligible claims.    

“In recent weeks, the IRS has made substantial progress in separating eligible claims from the wave of ineligible claims that have come in,” said IRS Commissioner Danny Werfel in a statement, “and we continue working to refine our models to identify more eligible claims.”    

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IRS Commissioner Daniel Werfel testifying at a Senate Finance Committee hearing

The claims being processed include eligible and ineligible claims, with most being processed for approval. Checks are being mailed for eligible claims with refunds.

The ERC program increasingly became the target of aggressive marketing well after the pandemic ended. Some promoter groups called the credit by another name, such as a grant, business stimulus payment, government relief or other names. The IRS is continuing to work denials of improper claims, intensifying audits and investigating potential fraud and abuse. 

Last month, the agency opened a supplemental claim process to help third-party payers and their clients resolve incorrect ERC claims, and warned that its second Employee Retention Credit Voluntary Disclosure Program ends Nov. 22.

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Accounting

Intuit steps up, and other accounting technology stories you may have missed

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Intuit launched an all-in-one accounting solution for mid-market businesses, LiveFlow raised $13.5 million to modernize accounting, a host of developments in AI, and other technology stories you may have missed in the last month and how they’ll impact your clients and your firm. 

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Accounting

AICPA & CIMA names Mark Koziel as next CEO, succeeding Barry Melancon

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Allinial Global president and CEO Mark Koziel has been tapped as the next president and CEO of the Association of International Certified Professional Accountants, succeeding longtime chief Barry Melancon, who is retiring at the end of this year.

Koziel has extensive experience at the AICPA, having worked in various roles there for over 14 years, most recently as executive vice president of firm services. He left for Allinial Global in 2020 to head the association of independent accounting and advisory firms but had long been seen as a potential successor to Melancon. Melancon announced his retirement in May at the spring meeting of the AICPA’s governing Council and a search process began for the next head of the AICPA & CIMA. Koziel will step into the role in January after a handover period.

“I am excited and honored to be appointed CEO of the world’s largest accounting membership body,” Koziel said in a statement Wednesday. “I look forward to playing a key role in leading the organization and the profession to new heights. The profession is well positioned to expand and continue to evolve the value it brings serving the public interest and addressing the challenges faced by economies, business, and society. I cannot wait to start working closely with members, candidates, volunteers, and staff to do just that and drive our great profession forward.”

Mark Koziel at Engage 2018

Mark Koziel at AICPA Engage 2018

Koziel began his accounting career in 1991 at the firm Lumsden McCormick in Buffalo, New York, later joining Dopkins & Co. and Joe Slade White & Co., two other firms in the area. 

Melancon has been leading the American Institute of CPAs since 1995 and spearheaded its expansion into the Association of International Certified Professional Accountants, the AICPA & CIMA, after a deal with the U.K.’s Chartered Institute of Management Accountants in 2017. He has long been ranked by his fellow accountants as the most influential person in the accounting profession.

“Serving the profession over the last 30 years has been a great honor, and I have been fortunate to have played a part in its transformation,” Melancon stated. “I am thrilled to see Mark appointed to the role, knowing his passion and vision for the profession and AICPA & CIMA. Mark will do a fantastic job.”

The board of directors of the AICPA & CIMA announced Koziel’s selection Wednesday after an extensive search process.

“We are delighted to announce Mark as our new CEO for the Association,” said Simon Bittlestone, CIMA president and chair of the Association, in a statement. “The appointment follows an open and extensive global search that attracted a strong pool of candidates from around the world. Mark is a dynamic, values-led leader with extensive experience and knowledge of our profession. The board looks forward to working with him in leading our members, candidates, and the profession into the 2030s and beyond. I would like to thank Barry Melancon ahead of his retirement for his leadership of AICPA & CIMA and lifelong commitment to advancing the accounting and finance profession — a remarkable 30 years of dedication.”

AICPA chair and co-chair of the Association Carla McCall, added, “In a strong field of applicants, Mark was the standout candidate because of his knowledge, understanding, experience, and vision for the profession and the organization. These are transformative times for our profession. I look forward to working with Mark to seize the opportunities in front of us.”

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