The Thursday Accrual: February 13, 2025

February 13, 2025

Well, hi there! Sit back, enjoy, and relax as you’re currently on the Daily Accrual.

Every day, I sift through the accounting noise so you don’t have to. I share to you the most relevant, juicy accounting insights that really matter – nothing phony, just some good, accounting testimony! 

📊 Accountants Gone WILD 

PCAOB Sanctions $75,000 fine on Former Deloitte Colombia Partner for Audit Violations

The Public Company Accounting Oversight Board (PCAOB) has sanctioned Gabriel Jaime López Díez, a former partner at Deloitte & Touche S.A.S. in Colombia, for serious violations of auditing standards during the 2016 audit of Bancolombia S.A. López authorized the issuance of unqualified audit opinions on Bancolombia’s financial statements and internal controls without completing necessary audit procedures or obtaining sufficient evidence.

Investigations revealed that López and his team improperly altered audit documentation and conducted key audit procedures—such as those related to revenue, interest expenses, internal controls, and loan portfolio valuation—only after issuing the audit report. Additionally, López failed to maintain proper audit documentation, further violating PCAOB standards.

As a result, PCAOB imposed a $75,000 fine and barred López from associating himself with any registered public accounting firm for two years, with the option to reapply afterward. This case underscores the PCAOB’s commitment to holding auditors accountable for ensuring accurate and independent financial reporting, emphasizing its global oversight authority over non-U.S. firms auditing U.S. issuers.

Source: Public Company Accounting Oversight Board (PCAOB)

🧼 COOL AF! (Cool Accounting Facts!)

Did you know that your favorite celebrity or musician might have been an accountant?

Before he was the electrifying frontman of The Rolling Stones, Mick Jagger was hitting finance and accounting textbooks at the London School of Economics. Apparently, this was his fall back plan in case his side gig singing in the renowned band didn’t work out.

Imagine a world where Led Zeppelin didn’t have its iconic voice. That was nearly what happened without lead singer Robert Plant. The singer was just two weeks into training as a chartered accountant before ditching last minute and going back to college and pursuing music. Safe to say, he ultimately made the right call!

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🔱Numbers don’t Lie 

US House passes BOI Reporting Deadline Extension 

The U.S. House unanimously passed H.R. 736, the Protect Small Businesses From Excessive Paperwork Act of 2025, extending the deadline for small businesses to report their beneficial ownership information (BOI) under the Corporate Transparency Act (CTA) from January 1, 2025, to January 1, 2026. The bill, now currently moving to the Senate, provides relief to an estimated 32 million small businesses affected by the CTA’s tedious requirements. 

Only entities formed before January 1, 2024, would benefit from the extension, as newly established companies must still comply with existing deadlines. The American Institute of CPAs (AICPA) welcomed the move, highlighting the need for more time to navigate compliance hurdles, while the Financial Crimes Enforcement Network (FinCEN) encouraged voluntary filings amid legal uncertainties.

Meanwhile, ongoing court cases have further complicated the enforcement of BOI reporting. The government cited a Supreme Court decision that overturned a similar injunction and proposed either lifting the ban entirely or limiting it to the plaintiffs involved. If the injunction is stayed, FinCEN may grant a 30-day filing extension. Under the CTA, companies must disclose their beneficial owners or face penalties of up to $10,000 and two years in prison. 

Source: Journal of Accountancy

🐩 Twitter Showdown 

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