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Accounting firms should follow Wall Street’s lead on work-life balance

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Wall Street’s notorious culture of marathon workweeks is under fire due to talent burnout and a new generation of workers simply won’t stand for it. The accounting profession — grappling with both a shortage of talent and a generational shift in workplace expectations — needs to follow suit, and quickly.

Major investment banks, long known for their grueling work hours for junior talent, have begun to cap work schedules in response to mounting concerns over employee well-being. The shift is being driven by broad post-COVID workforce demands for a healthier work-life balance, and it’s prompting other industries to reassess their own practices. 

Given the current crises facing the accounting industry, firms need to get on board too.  And at some firms, this shift is already taking shape. 

What’s happening on Wall Street is a good thing. Some firms are changing their email policies to now prohibit sending messages between 7 p.m. and 7 a.m. unless there’s a crisis. They’re also trying to curb weekend emails. 

Financial institutions are starting to invest more in their people by offering better health and wellness benefits and paying for more robust professional development opportunities. Smaller institutions have become especially interested in offering talent more and better benefits.

The accounting industry has historically operated much like Wall Street banks do, meaning workers would often be expected to clock in 70+ hours a week. To the surprise of no one, those expectations have resulted in the extreme burnout we’ve seen in recent years, and has significantly contributed to the industry’s talent crisis. 

Something is broken in the system. Between 2019 and 2021, 300,000 accountants quit their jobs, according to the Bureau of Labor Statistics. Many accountants have simply left public accounting to take in-house corporate roles, which offer more predictable schedules and greater work-life rhythms. 

That labor exodus is about to get worse. Nearly 75% of working CPAs are nearing retirement age. If current hiring difficulties continue, that will deliver a catastrophic blow to the entire industry’s headcount in just a few years. 

If accounting firms don’t start to address this crisis now, the industry will be looking at a massive talent shortage in what is a largely recession-proof business. 

Smart accounting firms have begun to move away from the traditional partnership model, which requires team members to work back-breaking hours — but the payoff doesn’t happen until 15 to 20 years down the road when they are invited to join the partnership. That helps young accountants build a great nest egg for retirement, but younger workers don’t value secure retirement. Nor do they particularly long for country club membership or many other perks prioritized by previous generations of partners. 

So, how can these companies create a new model that transforms the culture away from the outdated goal of making partners? Many are starting to offer their workers employee stock purchase plans right out of the gate, which gives people a greater stake in their firm’s outcomes at the beginning of their tenure. 

Other firms are moving toward project-based or retainer-based pricing models, where clients pay by the project instead of being billed by the hour. This helps reduce the billable-hour mentality, which is necessary for true cultural transformation. As long as firms emphasize billable hours, it’s hard to change the mindset that 60+ hour weeks should be the norm.

Work-life rhythm plans that focus on setting career and life balance goals is a unique approach progressive firms are taking. Team members develop plans based on their individual goals and preferences. Plans are built with flexibility for customization for individual preferences — similar to professional development plans. These plans and adherence to them are considered as factors in determining bonuses, along with other factors such as client service and business development. 

Yes, it’s a very different generation and a different world. Winning firms will adapt. 

But there won’t be a single magic bullet solution. Work-life balance means different things for different people, so for employees who love 70-hour work weeks, limiting their hours and compensation will affect their zeal to work for your firm. Having individualized plans and evaluating employees based on how they use theirs can go a long way in building a culture that honors life outside of work. 

Now, what we don’t know yet is how far reforms like these will go toward improving retention rates and ultimately attracting the next generation of accounting talent. What we do know is that very few younger/future employees want 90-hour work weeks. Healthy work-life rhythms matter to them, and they want to engage more outside of work. 

This generation also doesn’t seem to have the same competitive spirit that previous generations have had, which is why the biggest drop-off in talent tends to occur when people are about to be promoted into the manager level. After spending years putting in many hours, they either burn out or — and this is especially true for female accountants who have children — they can’t see a pathway that’s conducive to both career and family so they leave the profession. 

It’s critical that the accounting industry avoid the looming talent cliff that is fast approaching. Firms should continue to follow the lead Wall Street is setting while also innovating to make the industry-specific changes that will keep the current shortage from turning into a lost generation.

Design work requirements and compensation systems that make your most junior employees feel energized and valued. If you do that during their first 10 years with your firm, retention will improve, and attracting new talent will become your competitive advantage.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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