CFOs have gotten used to inflation affecting nearly every aspect of business: salaries, supplies, equipment, and more. However, one aspect of business seems to have eluded the pull toward higher prices: audits. For now.

So can CFOs expect an audit price increase as inflation catches up? The answer could be yes, in a big way, but not necessarily just because of inflation, which may only drive a portion of the increase, Dennis McGowan, vice president of professional practice and anti-fraud initiatives at the Center for Audit Quality, told CFO Brew.

Instead, proposed PCAOB standards that require auditors to more thoroughly identify clients’ non-compliance with laws and regulations (NOCLAR) will expand the scope and scale of the auditor’s role and “could increase audit costs by more than five times,” McGowan estimates.

Here’s what CFOs need to know concerning both how much audit costs might go up and the underlying reasons why in order to manage costs and ensure compliance.

Continue reading.—SW

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When someone tells you the government is giving away a pile of free money, sometimes the claims are, in fact, too good to be true. The IRS is taking a closer look at fraud cases related to the Employee Retention Credit (ERC), after getting through a backlog of applications related to the pandemic relief program.

“The further we get from the pandemic, we believe the percentage of legitimate claims coming in is declining,” IRS commissioner Danny Werfel said at the IRS Nationwide Tax Forum in Atlanta in late July. Instead, Werfel said, the IRS is seeing “more and more questionable claims coming in following the onslaught of misleading marketing from promoters pushing businesses to apply.”

The IRS says contractors offering tax preparation services, rather than companies filing for ERC credits themselves, are a source of illegitimate claims. These contractors engage in “false and misleading public advertisements and scams taking advantage of taxpayers,” according to an IRS post.

Keep reading.—SW

Whether you’ve gone back to the office may depend on what part of the country you live in.

That’s according to a new survey by workplace occupancy statistics provider Basking.io. It found that Midwesterners were more than twice as likely to have returned to the office as people in the Northeast. In the first half of 2023, companies in the Midwest had a 56% weekly average peak office occupancy rate. The Northeast had the lowest rate, at 24%, while the South and West both came in at 31%.

Blame it on big city traffic. Easier commutes may be the reason the Midwest has so many more people headed to the office, a Bloomberg article suggested. “In the Midwest, it’s easier to get into the office, that’s why you are seeing more frequent visits,” commercial real estate executive David Mirmelli said in a webinar on the survey.

Hybrid work schedules are also popular, the survey data showed. In the US, more people went back to the office two or three days a week than any other schedule, except in the South, where one office visit a week was most common. The Midwest had the highest percentage of people going back four or five days a week: 34%.

Continue reading.—CV

Today’s top finance reads.

Stat: 78%. That’s Honda’s bump up in profits last quarter. Pent-up North American demand drove a steep sales boost for the automaker. (Reuters)

Quote: “Generally speaking, there is no deflation in Chinese society and there won’t be in the future.”—Fu Linghui, an official with China’s National Bureau of Statistics, after it was announced that prices across a variety of sectors are falling earlier this week—a troubling sign of deflation risk increasing in China. (the New York Times)

Read: The slow, painful unraveling of WeWork (Hint: The balance sheet is a hot, hot mess ). (the Washington Post)

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