The number of accounting-related securities class-action filings increased slightly in 2024, but were filed against smaller companies, according to a new report.

The report, released Wednesday by Cornerstone Research, found that filings rose to 57, up from 56 in 2023. Even though the number (35) of accounting-related securities class-action settlements in 2024 remained consistent with 2023, the total value associated with these settlements dropped significantly, from $1.6 billion in 2023 to $1.1 billion in 2024, the second-lowest level in the past 10 years. That was partly due to the finding that there was only a single mega settlement larger than $100 million in 2024, compared to the historical average of four mega settlements per year.

While the number of settlements remained the same as 2023, the total value of those settlements declined by 36% from the prior year.

While the number of accounting cases remained steady last year, they were filed against smaller issuer defendants. The median pre-disclosure market capitalization of issuer defendants dropped to $445.6 million, the lowest level in the past 10 years. In addition, the DDL Index (the dollar-value change in the defendant firm’s market capitalization) of accounting cases fell 42% to $45.6 billion and was 17% lower than the 2015–2023 historical average of $54.8 billion.

Last year, some of the filing trends changed. “For many years, revenue recognition had been the most common GAAP violation alleged in accounting-related securities class action filings,” said Frank Mascari, a report coauthor and vice president at Cornerstone Research, in a statement. “That changed in 2024 when, for the first time since tracking began, allegations related to asset valuations and/or impairments were the most common.”

For the fourth consecutive year, the median pre-disclosure market capitalization of issuer defendants declined in 2024. Accounting cases filed in 2024 involving restatements decreased over 30% from 2023, returning to historical levels. Since 2015, 32 issuers had at least two separate complaints that included accounting allegations filed against them.

The median pre-disclosure market capitalization of issuer defendants decreased by 39% in 2024 to $745.5 million, which is consistent with lower median and average settlement amounts, as issuer defendant size is a proxy for the resources available to fund the settlement. The average settlement amount declined from $47 million to $30.1 million, while the median settlement amount fell from $15.4 million to $12 million.  

After a spike in 2023, the average time from filing to settlement for accounting cases declined by over seven months, returning to a level consistent with the average over the previous nine years. 

“The single most important factor in explaining individual settlement amounts is ‘plaintiff-style damages,’ a proxy for the amount of potential investor losses that plaintiffs may claim in a securities class action,” said Elaine Harwood, a report coauthor and senior vice president at Cornerstone Research, in a statement. “The sharp decline in the size of accounting case settlements in 2024 can be explained, in large part, by the nearly 50% decline in the median plaintiff-style damages for accounting case settlements compared to 2023.”

Accounting case settlements with both alleged GAAP violations and allegations of internal control weaknesses dropped to the lowest level in the past decade. The value of accounting case settlements for cases involving allegations of internal control weaknesses also decreased to just 27% of the total of all accounting case settlements.

While the number of accounting case settlements involving restatements increased, the median settlement amount was 85% lower than in cases not involving a restatement.

The median settlement amount as a percentage of plaintiff-style damages for accounting case settlements in 2024 was in-line with the 2015–2023 average for cases involving restatements and/or GAAP violations; however, cases involving a write-down were 42% lower than the average.

Earlier reports from Cornerstone Research have presented “simplified tiered damages” as a measure of potential investor losses. This year’s report is introducing “plaintiff-style damages” as a way of measuring potential investor losses that accounts for more case-specific data while still employing a consistent approach across a large volume of cases, drawing on investments in big data analytics and other capabilities from Cornerstone Research’s Data Science Center.

The accounting profession, like many others, is experiencing a demographic shift. Millennials and Gen Z are increasingly populating the workplace, bringing different expectations, work styles and technological proficiencies. 

By 2030, Gen Z alone will make up 30% of the labor force. Additionally, the AICPA has reported that 75% of today’s public accounting CPAs will retire in the next 15 years. That means there are going to be many jobs to fill and new generational ideas shaping the industry in a big way. 

Why should we prioritize having a multigenerational workforce? Beyond necessity, one compelling reason is teams with an age spread of more than 10 years are twice as successful in their decision-making. By embracing the collective wisdom of our employees, we will undoubtedly transform our work, experiences and the entire industry.

Managing this multigenerational workforce presents both challenges and opportunities for accounting firms, especially for owners and directors who grew up in an industry that had strong ideas about work expectations and “paying your dues.” 

As the head of HR at Platform Accounting Group, a collective of more than 40 local firms across the United States, I have seen firsthand how complicated these differences can be, but I’ve also seen how amazing it can be to have multiple generations seeking to understand each other and working to get things done. Successfully managing a multigenerational team requires a tailored approach that acknowledges these differences while leveraging the strengths of each generation, vs. trying to force-fit or assume one way works better.

Here are four main strategies I’ve seen work effectively for supporting a multigenerational team:

1. Make sure the work is engaging. A Gallup Report on employee engagement shows that companies with a highly engaged workforce have 21% higher profitability. They also have 17% higher productivity than companies with a disengaged workforce. How do you engage people in the work? Involve them in the client story as early as possible so they see the impact of their work and opportunities to be even more effective as they gain experience. Ensure they’re taking advantage of their strengths, interests and passions, and continually check in on what’s energizing them. If people are excited about their work, they have better results and contribute to a positive culture, and the workplace is a stronger place for everyone to be. 

2. Personalize development, work situations and career pathways. While accounting has some old-school ideas about work hours and “paying your dues,” the world has shifted. Remote work is much more common, and younger generations are looking for more flexibility, working in ways that work for them, and fewer one-size-fits-all opportunities. While older generations may be anchored on the way they did things, in order to attract and retain young talent, there needs to be an understanding that technology has made it possible for work to be done differently. Additionally, giving people the opportunity to personalize their career pathways and scale up and down during different seasons of life is the norm in most industries, and to compete, we have to be willing to do the same. Not everyone wants the same thing, and respecting these differences can be vital to creating a healthy, engaged workforce.

3. Foster healthy communication and empathy. One challenge we face is differing views on work-life balance and what type of hours are needed in our industry, which historically has been thought of as very high demand and long hours. I continually remind managers to remember how they felt starting out and that the younger generations are right — our lives should not only be our jobs. We clearly need to get our jobs done and serve our clients well, but working long hours just to work long hours is an outdated idea that doesn’t serve anyone. Additionally, I remind our younger workers that previous generations had to work hard to get here, and we need to respect all they’ve invested in the profession. With a better understanding of others’ needs, we can collaborate on reshaping how work gets done.

4. Lead with values and remind people their work matters. Younger workers want to ensure their values align with those of their employer, so it’s important to highlight what’s important to our company, how we make decisions, and how we shape our culture. It’s easy to be heads down with the amount of work we have on our plates but remembering the “why” behind all of this is critical.  Accounting and tax advisement is essential to keep the world running, and what we do adds enormous value to our clients, their lives and their businesses. As we remind ourselves of our common values and how important the “why” behind what we do is, it helps us work through our differences and recognize we’re all on the same team. 

As we navigate the changes within our workforce, I’ve tucked a couple of secret weapons into my toolkit that help reframe challenges into opportunities. I invite you to do the same and know that over time these become a new way of thinking about the part we play at work.

• Always be curious. We don’t have to guess what different people and different generations want, and we shouldn’t make assumptions. Ask people what energizes them, what’s important to them, what their boundaries are and so forth. Being curious keeps us from being judgmental. Do something with what you learn.
• Commit to supporting others. We need to be emotionally invested in each other’s success, so we should prioritize building relationships. Training and career development should be continuous. Even the most tenured, engaged and happy individuals need a little support now and then. 

Another difference between generations is how long employees tend to stay with an employer, and that timeframe has been on a downturn for quite a while. While the average tenure might adjust again, we are best served by embracing the time we do have with our employees and recognizing our duties to one another in order to make the most of it. The alternative is to be frustrated with the perceived reduction of loyalty, which means we are unlikely to invest in employees as much as we should (which makes them exit even faster).

While managing a multigenerational workforce requires effort and a willingness to be flexible, the benefits are significant. Diverse teams bring a wider range of perspectives, skills and experiences, leading to greater innovation, creativity and problem-solving. By embracing the strengths of each generation, accounting firms and departments can create a more dynamic, productive and successful work environment. This, in turn, will help attract and retain top talent, ensuring a better future for the accounting profession.

Gary Shapley, a former special agent in the Internal Revenue Service’s Criminal Investigation division who investigated Hunter Biden’s taxes and testified before Congress about interference, will reportedly be named acting commissioner of the IRS after the resignation of the current acting commissioner, Melanie Krause.

Shapley and a fellow special agent, Joseph Ziegler, testified in 2023 before the House Oversight Committee that then-President Joe Biden’s son Hunter received preferential treatment during a tax-evasion investigation, and they had been removed from the investigation after complaining to their supervisors in 2022.

Both of them were promoted last month to senior advisors to Treasury Secretary Scott Bessent, and Shapley was made deputy chief of IRS Criminal Investigation. Now he will reportedly become acting commissioner, according to the Washington Post and CBS News. He will be replacing Krause, who accepted a voluntary buyout offer under the IRS’s deferred resignation program after a dispute over sharing confidential taxpayer data with immigration authorities at the Department of Homeland Security’s Immigration and Customs Enforcement division. 

Senate Judiciary Committee chair Chuck Grassley, R-Iowa, hailed the decision to name Shapley as acting IRS commissioner with a post on X saying, “It’s GR8 NEWS whistleblower Gary Shapley will b taking over as Acting IRS Commissioner Pres Trump’s administration is catching on 2 my advice not only shld WBs who faced retaliation b reinstated they shld b PROMOTED Need more patriots like Gary in leadership.”

The IRS referred inquiries to the Treasury Department, which did not immediately respond to a request for comment.

The acting IRS commissioner post has been a revolving door in recent months. Krause, who was chief operating officer at the IRS, took the job in February following the abrupt retirement of former acting commissioner Douglas O’Donnell and the departure of the previous commissioner, Danny Werfel, in January. President Trump had named former congressman Billy Long, R-Missouri, as the next IRS commissioner even before his inauguration, prompting Werfel’s departure on Inauguration Day. However the Senate has not yet held a confirmation hearing for Long.

Shapley and Long will be overseeing a series of planned reductions in force of the IRS of up to 40%, according to the Federal News Network. According to an internal memo, the plan would reduce the IRS’s workforce of approximately 102,000 people to about 60,000 to 70,000. Among the parts of the IRS expected to take the heaviest cuts are the IRS Taxpayer Experience Office, Transformation Strategy Office, Online Services Office. Office of Civil Rights, Taxpayer Services and Compliance. Approximately 22,000 employees have already accepted the latest voluntary buyout offer under the IRS’s second deferred resignation program, according to Politico.