Tax Pro Roundup: July Edition
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SurePrep integrates with leading tax software to streamline the 1040 process for tax pros and taxpayers.
AICPA Updates Practice Aid for Auditing Digital Assets
CPA Practice Advisor
[6/6] The American Institute of Certified Public Accountants (AICPA) has updated its free practice aid regarding accounting and auditing digital assets. Additional guidance has also been included to address valuation and procedures.
"The practice aid, Accounting for and Auditing of Digital Assets, is intended to provide nonauthoritative guidance on how to account for and audit digital assets under U.S. GAAP for nongovernmental entities and GAAS, respectively. The AICPA said practitioners who prepare financial statements and auditors with a fundamental knowledge of blockchain technology will find the guidance most useful."
Plan for New Accounting Rules on Software Costs Moves Forward
The Wall Street Journal
[6/18] The Financial Accounting Standards Board (FASB) voted to propose a new regulation that would require to report cash amounts related to software costs. The rule would help to better determine when to expense or capitalize costs. The board aims to formalize a proposal by the end of 2024.
"'I’m supportive of moving forward by taking more software off the balance sheet, which I think is what we’re doing here,' FASB Chairman Rich Jones said."
PwC agrees deal to become OpenAI’s first reseller and largest enterprise user
CNBC
[5/29] PwC signed an agreement with Microsoft-backed artificial intelligence (AI) firm OpenAI to offer ChatGPT Enterprise to its employees and clients. The agreement marks the first time OpenAI has used a resale model for its popular AI products.
"PwC will hand ChatGPT Enterprise licenses to more than 100,000 employees — 75,000 in the U.S. and 26,000 in the U.K. — according to The Wall Street Journal, which earlier reported on the deal. PwC did not specify the number of workers who would use ChatGPT Enterprise."
EY US to Invest $1 Billion in Compensation and Technology to Entice Young Professionals
INSIDE Public Accounting
[6/13] EY US plans to invest $1 billion over three years in talent and technology. From boosting compensation to increasing AI-enabled capabilities, the Big Four firm plans to be a destination for recent college graduates while driving accuracy and efficiency in its processes.
"EY US is leading the way with market-leading AI technology to transform the roles of audit and tax professionals and to serve as a catalyst for new perspectives within the audit. AI-powered capabilities are being built into the global EY organization’s core audit platform tools to enhance audit quality, improve productivity, support risk assessment and deliver better insights on key business issues."
EY Rolls Out Double-Digit Pay Hikes to Recruit New CPAs
Bloomberg Tax
[6/14] EY announced that it will reset base salaries for its accounting recruits. Starting this fall, new recruits will see pay raises of more than 10%. EY also plans to continue increasing salaries for other early-career accountants.
"Bigger paychecks from firms like EY that dominate the market will set the pace for higher wages across the industry, pressuring mid-tier and even smaller regional firms to step up and boost their entry-level pay. EY wants to woo top students from US business schools to supply skilled staff needed to shoulder an increasingly complex workload, while also combating a shrinking pool of accounting graduates, said Dante D’Egidio, vice chair of assurance for EY Americas, in an interview Friday with Bloomberg Tax."
7 Sure-Fire Ways Accounting Firms Can Attract and Retain Talent
CPA Practice Advisor
[6/27] Your firm's processes are only as effective as the professionals managing them. To find and retain qualified employees in a tight job market, you need to get creative. Consider these 7 tips to cultivate a great accounting team and minimize turnover.
"Some accounting firms limit themselves to one or two meetings per quarter to reach out to their staff. However, this is insufficient. To build trust and foster a strong sense of community among staff members, accounting firms should establish a system of open and transparent communication."
Dear CFOs, the accountant shortage isn't going away*
Accounting Today
[6/4] Industry data suggests that the accounting industry's staffing shortage won't be improving soon. Megan Moody notes the implications of this situation and shares some preventive strategies for protecting your firm from talent depletion.
"Other fields typically offer starting salaries at least 20% higher than entry-level accountants, making it nearly impossible for companies to compete for new accounting talent. Early career accountants often find their starting salaries don't make up for the steep hours expected of them."
Failure to Keep Pace with Technology is Biggest Risk for Accounting Pros
CPA Practice Advisor
[6/25] A survey from Intuit QuickBooks offered new insights on the state of the accounting industry. One major takeaway: AI continues to be top of mind, both as an opportunity and a point of anxiety. More than half of the respondents plan to invest in AI and automation tools within the next year.
"Since 2023, hiring struggles persist, with 94% of respondents saying hiring has been a challenge across the board — up 8 percentage points compared to last year’s QuickBooks data."
Finding qualified staff tops ranking of CPA firm top issues
Journal of Accountancy
[6/7] Sole practitioners chose "keeping up with the changes and complexity of tax laws" as their top challenge in the biennial Private Companies Practice Section (PCPS) CPA Firm Top Issues Survey. The 2024 survey findings highlighted recruiting, staff compensation, aging owners/partners, and more. In 2022, IRS challenges were a top concern due to the backlog caused by the COVID-19 pandemic.
"'The interplay between talent and technology is interesting, since we know that using technology effectively can have a significant impact on a firm's ability to leverage staff to provide higher-value services to clients,' Lisa Simpson, CPA, CGMA, vice president–Firm Services for AICPA & CIMA, said in a news release. 'As firms look to recruit, retain, and develop staff, being a technology-forward firm is attractive to professionals who are looking for innovation in how work gets done.'"
How do different accounting firms use AI?
Thomson Reuters
[6/3] AI and generative artificial intelligence (GenAI) are helping firms streamline their processes and deliver more value to their clients. The 2024 Generative AI in Professional Services Report explains how many accounting firms are using AI, what the Big 4 is doing with this advanced technology, and more.
"Among the firms actively using or planning to use GenAI, 42% said they use the technology daily, if not multiple times a day. An additional 31% said they are using it weekly."
99% of accountants using AI to boost efficiency and client services
Accountancy Age
[6/10] More accountants are relying on AI tools due to increased demand for their services, according to new research from Intuit QuickBooks. UK-based accountants were polled for the 2024 Intuit QuickBooks Accountant Technology Survey, revealing that 75% experienced increased demand for financial management support and that 99% have used AI to assist clients.
"Accountants are rising to the occasion, leveraging technology to cut time with compliance and elevate the quality of their strategic business advisory. On average, 6 in 10 (60%) of respondents’ clients have experienced profit growth over the last 12 months and accountants rank implementing or optimising accounting technology solutions (63%) as the service that has contributed the most to their clients’ increasing profits."
The past and future of accounting ethics*
Accounting Today
[6/27] The American Institute of Accountants published their original ethical code in 1917. But the accounting practice and the world it services have since evolved, and ethical standards have evolved with them. There are five subdivisions of principles that CPAs are now required to follow.
"Professional accountants are required to maintain their knowledge and skills at the level needed to provide the best service to clients or employers. This level is based on current developments in practice, legislation and techniques in the accounting industry."
Leader at accounting firm discusses trends and best practices regarding unclaimed wages
Thomson Reuters
[6/27] Cathleen Bucholtz, Principal and Unclaimed Property Practice Leader at Baker Tilly, sat down with Thomson Reuters to explain how payroll professionals can best mitigate liability regarding unclaimed wages.
"'One of the best practices of a company to keep their payroll clean is to be tracking it when those checks become stale-dated,' Bucholtz said. She additionally advised businesses to never reissue an uncashed check without first confirming the need and details with the employee, as just reissuing stale checks is not a valid defense in audits."
Ditch the hourly grind: Unlock the power of value pricing*
Accounting Today
[6/13] Remodeling your tax practices established billing system might sound daunting. But it just might be a prime opportunity to upsell your clients on additional services while delivering better guidance and expertise. Ted McRae explains how.
"Our clients don't care about how many hours we put in. They care about the results we deliver, the insights we provide, and the peace of mind we offer."
4 Big Trends Driving Change in Learning & Development in 2024
Boomer Consulting
[6/14] How are you ensuring that your team is developing the skills and experience to thrive in an evolving industry landscape? Boomer Consulting breaks down some of the most notable trends in the L&D sector of the accounting space.
"A blended learning approach is getting more attention as firm leaders seek more efficient and effective learning solutions. By blending traditional methods with innovative digital tools, firms can reimagine learning experiences to meet modern learners' diverse needs and preferences."
Accounting Firm Leaders Discuss Challenges/Benefits of a Remote Workforce
Thomson Reuters
[6/11] Countless tax practices were forced to shift to remote or hybrid work during the 2020 pandemic, and many have since maintained that setup in some capacity. Two leaders at Baker Tilly talked with Thomson Reuters about the advantages and drawbacks of the virtual workplace.
"[Managing Principal Kim Wylam] said that hybrid work is the preferred method for both employers and employees, based on several studies and surveys she recently read. Wylam noted the importance for employers to define their hybrid relationship and provide clear expectations for both parties."
Building a Scalable Accounting Firm: A Q&A on Growth Strategies for Accountants
CPA Practice Advisor
[6/7] BILL CMO Sarah Acton asks CPA Jason Blumer to discuss firm growth and share what he believes firms really need to scale successfully. As the CEO of Blumer CPAs and founder and CEO of Thriveal CPA Network, Blumer has a history of applying innovative practices to drive business. He shares some real-world insights in this Q&A.
"In my role at BILL, I have the opportunity to talk to accounting firms from across the country about the internal and external pressures they face. Increasingly, I’m hearing from firms that are leaning into growth areas and innovation opportunities to help set themselves apart from the competition. With a solid plan in place, firm growth can become less daunting and instead be a viable part of a successful business strategy."
These Accounting Firms Took a Different Approach to Shaking Up Their Structure
The Wall Street Journal
[6/2] As part of a new international partnership, Forvis has acquired the U.S. unit of Mazars, marking a structural shake-up in the accounting industry. Greater capital needs and recruiting challenges are causing firms to adjust their ownership structures in new ways.
"U.S. mergers and acquisitions involving accounting firms totaled $378 million across 34 deals this year through May 30, according to data provider Dealogic. That compares with $33 million across 80 deals in 2023 and $147 million across 75 deals in 2022."
IRS makes free tax return program permanent and is asking all states to join in 2025
AP News
[5/30] The IRS announced the Direct File, the agency's free electronic filing program for tax returns, is set to expand to all 50 states in 2025 after a conditional 12 state pilot run in 2024 was deemed a success.
"'The IRS has been underfunded for decades, so taxpayers haven’t gotten the support they deserve,' Treasury Secretary Janet Yellen told reporters in a call Thursday. 'Thanks to the Inflation Reduction Act, we’re changing this.'"
IRS Removal of Automatic Accounting Methods Sure to Disappoint
Bloomberg Tax
[6/3] The IRS’s April revision of automatic accounting method procedures means an extra step for taxpayers. To change part of their tax treatment, taxpayers must now obtain IRS consent in a formal letter. Taxpayers generally favor automatic procedures, so this update is likely to cause frustration, according to KPMG's Jessica Theilken, Carol Conjura, and Natalie Tucker.
"The revision affects how taxpayers apply Rev. Proc. 2015-13 by removing two common accounting method changes from the list of automatic ones: changes to certain cost capitalization methods for inventory or self-constructed property, and certain changes to the proper timing of recognizing revenue. Taxpayers planning to make either of these accounting method changes should revisit their timetable for implementation."
How tax firms can overcome search functionality limits
Thomson Reuters
[6/18] In recent years, tax laws have grown far too complicated to rely on a simple Google search. Tax professionals need highly specific, verified information that generalized search engines aren't cut out for. That's why Checkpoint Edge leverages AI and hundreds of expert opinions to get tax pros the answers they need.
"To address concerns with search functionality, forward-looking accountants are relying on AI-powered tax research solutions that are built specifically for tax and accounting professionals and are grounded in data from trusted experts and reliable sources."
INSEAD Knowledge
[6/27] The business world remains at an impasse with regard to sustainability and how it should factor into financial reporting. A new, value-focused model could increase climate accountability and transform how we view company performance.
"Perera-Aldama proposed a normative model for integrating VAS reporting into the financial accounting architecture ... Importantly, two innovative features could significantly reshape the way financial information is reported and understood, placing a greater emphasis on the social and environmental impacts of business operations."
The tax consequences of digital nomadism*
Accounting Today
[6/6] The shift toward remote work has enabled many smaller companies to operate from anywhere and obscured what constitutes a fixed place of business. There are tax implications associated with this new wave of nomadism.
"While obtaining a digital nomad visa takes care of the immigration requirement to enter and work in a country for a specific period, it generally does not relieve the individual from income tax or Social Security exposure, or the employer from payroll considerations."
Tech news: Big Four firms announce strategic alliances
Accounting Today
[6/14] Big Four firms are working to strengthen their digital footprint. EY announced an alliance with Docusign to offer intelligent agreement management solutions. Deloitte partnered with Bloomberg Tax & Accounting to publish a new Tax Management Portfolio. Article features a variety of accounting technology news.
"[Deloitte and Bloomberg Tax & Accounting’s Tax Management Portfolio] provides an analysis of the classification of digital assets for tax purposes and offers an overview of the digital asset ecosystem, tax guidance to date and the accounting treatment. It also delves into the tax implications of using, dealing, trading and investing in digital assets, and addresses tax questions raised by digital asset transactions."
Tax & accounting firms’ tech stack: A new look at what they need
Thomson Reuters
[6/6] To keep up with the pace and demands of accounting work in 2024, many firms have found themselves investing in stronger, more robust tech stacks. Workflow needs are changing and there are more technological capabilities for your firm to consider.
"Cloud infrastructure provides robust data security and compliance with tax regulations, which is critical for handling sensitive financial information. Additionally, it can offer scalability to handle peak times, such as tax season, without the need for heavy IT investments."
PR Newswire
[6/10] If your firm is looking for guidance on crypto taxation, help is on the way. Deloitte and Bloomberg Tax & Accounting are rolling out the first publication of Tax Management Portfolio, advertising it as a comprehensive guide on income taxation for digital assets.
"'Digital assets and blockchain technologies are reshaping our financial system and broader commercial activities,' said Rob Massey, partner, global & U.S. Tax Blockchain & Digital Assets leader, Deloitte Tax LLP, and a principal author of Portfolio 190."
Why Accountants Are Now Learning About Bitcoin
Forbes
[6/1] Bitcoin education is being seen with more importance by the accounting industry. The AICPA & CIMA hosted the "Blockchain, Bitcoin & Power BI in the Finance & Accounting Industry" event in May 2024, putting a new asset class in the spotlight for accountants navigating modern finance.
"AICPA & CIMA’s efforts to educate their members about bitcoin are the first of their kind within this sector. With leaders like James Dewar at the forefront, the accounting profession is well-positioned to embrace this new asset class. Understanding bitcoin is no longer optional; it's necessary for anyone involved in corporate finance and risk today."
How Firms Can be M&A Deal-Ready in 2024
CPA Practice Advisor
[6/18] Mergers and acquisitions (M&A) activity has been strong in the tax and accounting industry. Today’s competitive landscape is apparent, and the steady M&A trend appears likely to continue. Industry expert Ira Rosenbloom shares five steps for both parties at the negotiating table.
"M&A is about choice. In 2024, choosing to do a deal and with whom has gotten more intense. All parties must have a plan for the deal and the strength to navigate it. To succeed at M&A in 2024, be very disciplined and very opportunistic. The market is in a provocative condition."
Ai-Pocalypse And The World Without Accountants: What Will Happen?
Forbes
[6/17] Breakthroughs in AI and machine learning technology have led some suggest that the accounting profession could be automated into obsolescence. Hitendra Patil, President of Global F&A Services, Datamatics Business Solutions, Inc. dispels this notion with perspective on why a human touch will always be essential to the profession.
"In a scenario where investors lose their confidence in financial statements produced only by the companies but not reviewed by professional accountants, the market could be driven by extreme volatility, resulting in fewer investment activities, which, in turn, could slow down economic growth."
Why sustainability information matters to CPAs
Forbes
[6/1] The increasing demand for environmental, social, and governance (ESG) data presents a significant opportunity for accounting and finance professionals to use their reporting skills. Due to regulatory requirements, public and private companies must continue to meet the needs of ESG rules and determine the implications of reporting ESG-related information.
"Accountants and finance professionals can provide process structures for sustainability reporting. This could include developing standard processes for data collection with associated reviewers and workflow with signoff functions; building similar support structures such as a collaboration site to centralize communication of requirements with dates, processes, and sources; and training."
2024 Most Powerful Women in Accounting Awards Announced
CPA Practice Advisor
[6/4] The recipients of the ‘Most Powerful Women in Accounting’ awards have been announced by the American Institute of Certified Public Accountants and CPA Practice Advisor. Twenty-five leaders were recognized for their significant contributions to the profession on June 4, 2024, at the AICPA ENGAGE conference in Las Vegas.
"'Amplifying the many diverse voices of the profession is critical,' said Crystal Cooke, the AICPA’s diversity and inclusion director. 'Not only does this award provide visibility into the amazing things that women are doing in our profession, it also shows what is possible with hard work and determination. In order for women to believe there is space at the top for them, they need to see it!'"
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