How sleuthy should auditors be when they’re poring over a company’s financial statements?

Wading into the debate last week, the International Auditing and Assurance Standards Board gave its suggestion: significantly more sleuthy.

The form that answer took was its proposal for a new standard on The Auditor’s Responsibilities Relating to Fraud In an Audit of Financial Statements. (Not exactly flashy, but as headline writers ourselves, we admire the clarity.)

While leaving the main responsibility to stop fraud with a company’s management and governance, the new standard “focuses on the key role that auditors play,” IAASB chair Tom Seidenstein said in a statement announcing the 162-page proposal.

That leaves plenty of time for debate on the role of financial statement auditors, which has come under increasing scrutiny over the last decade due to high-profile failures to spot fraud—most notably at Wirecard, the German payment processor that was dissolved in 2020 after auditors were unable to find a “missing” €1.9 billion ($1.99 billion) in its accounts.

For more on the proposed audit standards, click here.—GD

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Climate, China, hacking, AI, interest rates: You could fill a macroeconomic bingo card with recent headlines about Duke Energy.

The utility company, which has some 8.4 million electric customers in six states and 1.7 million gas customers in five states, posted its Q4 2023 earnings last week. Its full-year adjusted earnings per share was $5.56, about 6% higher than in 2022, but its Q4 EPS was slightly below analysts’ expectations. Its reported earnings for the year were $4.2 billion for electricity and $519 million for gas, up from $4 billion from electricity and $468 million from gas in 2022.

The earnings growth was driven by a lower tax rate, lower operations and maintenance expenses, and “contributions from rate cases” (read: permission to raise prices), the company said in a statement. Duke also gained a record 195,000 new customers last year, largely in the Sunbelt states of Florida and the Carolinas.

Headwinds the company faced in 2023 included high interest rates, depreciation, and what it referred to in an earnings call as “record mild weather.” The weather—which most of us thought of as, well, pretty hot—cost Duke Energy’s electric utilities segment around $245 million pretax and brought its EPS down by 25 cents.

Click here for more on Duke Energy’s earnings.—CV

With buyers ranging from Taylor Swift to Apple, carbon offset credits seem poised to grow in the coming decades as companies work to meet compliance requirements and climate goals.

But it’s been an especially rough few years for the often controversial financial device, in which companies—or individuals—can buy credits for projects that claim to have reduced emissions or removed carbon from the atmosphere to offset (hence the name) their own carbon-producing activities. Multiple reports have questioned the veracity of claims made by projects sold on the voluntary carbon market, casting a pall over the whole system.

Carbon offset credits have often been at the center of accusations of “greenwashing”—marketing that exaggerates the eco-friendliness of a product—because they allow companies to effectively outsource decarbonization initiatives while continuing to emit carbon themselves. But in ideal practice, they can help fund decarbonization efforts like reforestation and solar installation from companies that might be polluting either way.

Click here to continue reading IT Brew’s story on managing carbon offsets.—PK

Today's top finance reads.

Stat: $600 million. That’s how much Jeff Bezos will save in taxes by moving to Miami, which he announced last year. The timing was auspicious: A new Washington state capital gains tax from 2022 meant Bezos would actually have to pay taxes on stock sales, since Washington has no personal income tax. We hope he enjoys…the sunshine. (CNBC)

Quote: “We’re working on fragrances [with ingredients from the Middle East] and bringing retail into where we are today. It’s interesting to think about the future of retail—what does that look like and how do you engage with customers in different ways? We’re going to be opening up in Spain, where we’ve never been. Europe is really exciting for us at the moment.”—Tory Burch on her eponymous company’s 2024 strategy (the Wall Street Journal)

Read: In the “everything old is new again” department, read about the return of the travel agent. The only difference this time around is that it’s a robot. (The Verge)

Career chat: Register for Gallagher’s virtual webinar Navigating Your Career Trajectory on March 6 to hear from an entire panel of women leaders. Learn how to level up your career with practical advice + actionable tips.*

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