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Art of Accounting: 11th anniversary of weekly quick fixes

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Complimentary Access Pill

Enjoy complimentary access to top ideas and insights — selected by our editors.

This is my 572nd consecutive weekly Art of Accounting column in Accounting Today web edition, making this my 11th anniversary. Any “anniversary” is a milestone and cause for celebration, reflection and anticipation going forward.

These columns are all short quick fixes to problems colleagues called me about, some aha moments I wanted to share, or some things I’ve long ago started doing and find they are still perfectly relevant. If I eliminate duplicate ideas or some personal musings, I’ve posted at least 500 separate columns with quick fixes that readers could benefit from. Looking back, I am very proud of this and somewhat amazed that I’ve had that many ideas, tips and best practices to share.

Looking forward, I am eager to continue with more ideas than one might imagine, with more developing almost daily. Some I will write about soon, some I will incorporate into issues other accountants have discussed with me, and some will be pushed back for more urgent issues colleagues expressed and which I will use the column to provide them with a thought-out reply. After those are posted, I usually email the caller a link. Experience has shown me that few will reply thanking me, so I do not expect any replies. My joy is being able to help them and share that help with others who might have the same problems. I also get fresh material for other articles, speeches and some books I have written, including my recent Memoirs of a CPA.

When I started this column I prepared material for about a dozen columns and had a list of topics for perhaps another dozen columns. Not all of those two dozen ideas have been used, making way for newer or more current ideas. Actually ideas are our currency. The more ideas we have the better able we are to provide exceptional value to clients. Accountants and advisors do not live in a vacuum or are not cordoned off in a silo but are subjected to everything going on in the real world and in business and serving the needs of our clients. 

Failing to add anything new dooms us to fail. The problem with that is that the lack of success helping clients is incipient and creeps up over time until there is a big boom of realization that there is more out there than we are able to handle and we lose the client. Not “we” since I do not lose the client for lack of attention or a dearth of value or fresh ideas, and not “you” since by your reading this column, you are demonstrating the same desire I have to help clients above and beyond the obvious. But other accountants who just trudge along, getting paid regularly, doing what they signed on to do and even doing it “perfectly” but not providing any added value, insights, fresh outlooks or challenges to their clients, and minimal growth to their practices.

Anyway, preaching to the choir is not my purpose with these columns, but reaching the onlookers who are pretty much satisfied with everything and who shy away from the disruption changes cause. I try to write things that will attract the onlookers (as well as my many regular readers). If I do not post anything new, then the onlookers will never read it. If I post it, they might read it. I will go with the might rather than the never. The might is what excites me and a call from someone that read something of mine for the first time creates the excitement I get by continuing these columns. 

I appreciate you reading this column today and if you send me a “congrats” to [email protected], I’ll thank you with a reply of a brand-new special client value enhancer Goodie that I never shared before. 

Thanks go to Michael Cohn, who edits these columns, and he also has not missed an issue. We coordinate vacations and days off so our schedules mesh perfectly. He has become a good friend as well as a great partner in these columns.

Stay tuned for many more of these Art of Accounting columns that are posted every Monday afternoon, as they have been for the past 11 years; and do not hesitate to contact me at [email protected] with your practice management questions or about engagements you might not be able to perform.

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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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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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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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