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Auditors navigate a state of ‘permacrisis’

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Richard Chambers is seeing a neverending series of crises confronting internal auditors and posing risks to their organizations.

A former chairman of the Institute of Internal Auditors, Chambers currently chairs the UNICEF Audit Advisory Committee and is senior advisor of risk and audit at the audit technology company AuditBoard. His fourth book, “Connected Risk: Conquering the Perilous Risk Exposure Gap,” was published last month.

“The premise behind the book, and it’s something I’ve been talking about now for the better part of the last three years, is that it’s almost like when the 2020s dawned,” he told Accounting Today. “The switch was flipped in terms of risk, volatility and risk velocity.”

Richard Chambers NAU image

Richard Chambers

With a consequential election approaching, potential risks are top of mind for many voters. “Risks became much more volatile and unpredictable, and the speed with which they emerged became almost unfathomable,” said Chambers. “We’ve lurched from the pandemic to supply chain disruption to macroeconomic turbulence, to wars in Europe, wars in the Middle East. All of this has the combined effect of really challenging even the best risk managers out there, and the idea that risk managers can do their thing off in their silo.”

The election will bring its own set of risks. “Each party has clearly staked out its position on fiscal policies, tax policies and so forth,” said Chambers. “There’s a lot of uncertainty there as to which way it’s going to go, so you’ve kind of got to manage the risks in both directions. You’ve just got to be prepared for the.uncertainty that lies ahead.”

Internal auditors, risk managers and compliance professionals can no longer operate separately.  “We are dealing with almost an existential threat to a lot of companies and a lot of industries,” said Chambers. “We’ve seen a lot of companies and industries be decimated in the last five years,” said Chambers. “What I’ve tried to do with the book is to offer a path forward. It’s in some ways a call to action that says, you know you can’t manage risks like you’ve traditionally managed them in the era of ‘permacrisis.'”

He sees it as a permanent state of crisis where everyone needs to get involved. “It’s all hands on deck,” said Chambers. “You’ve got to have the risk managers, the internal auditors, the compliance team, the information security professionals, everybody’s got to be on the same page. And there’s got to be a lot more collaboration, cooperation and communication to help companies manage the risks.”

Chambers experienced his own crisis in 2022 when his home in Florida was badly damaged by Hurricane Ian. He was only able to move back in this past June. 

Cybersecurity and artificial intelligence open up a new set of challenges. “If I were to talk about, the top-of-mind risks in 2025, there’s a whole range of IT risks: cybersecurity, data security risks, increasingly AI,” said Chambers. “AI presents extraordinary opportunities, but it also is laced with some really significant risks. That’s going to become even more acute as we see more and more regulations put in place, legislation and regulations coming from governments to try and tie down how AI is used, to make sure it’s not misused.”

In addition, there is economic uncertainty around inflation, while recruiting is still a problem for many companies. “We’re still not out of the woods on talent management, the ability to recruit and retain the talent a company needs or an organization needs, has been in the top five for almost the whole decade so far,” said Chambers. 

Internal auditors will be hard pressed to deal with all of these uncertainties. Chambers sees a “risk exposure gap” in the number of risks that are being presented to a limited number of auditors. “We’ve seen the risk continue to mount, but we have not seen a real increase in the resources to tackle those risks,” he said. “Internal audit resources have been stagnant at best. I personally think they’ve been in a modest decline for the last two or three years because they haven’t been keeping pace with inflation. You are seeing a lot of infusion of resources into risk management or into compliance.”

One way to offset some of the risk exposure gap is through better collaboration among various risk management professionals, along with more investment in up-to-date technology. “If everybody’s still trying to track risks and manage risks using spreadsheets, that’s really not going to be very effective in the volatile environment we’re living in,” said Chambers.

He wants to see more collaboration among internal auditors, risk managers, compliance professionals and information security personnel. “I often encourage the internal auditors to be the leaders in this collaboration movement,” said Chambers. “Start working more closely with the risk managers in your organization and with the compliance teams, in making sure that when you all get in front of the board or in front of the executive management, that you have a pretty good understanding of what the others are doing, that you have hopefully been able to align on what the true risk profile is of your company. There’s nothing that frustrates a board more than having two or three different folks come in and tell them that there are different risks that the company’s facing. I’ve had audit committee chairmen say we just throw them out and tell them to come back when they can find some common ground. There’s too much ambiguity out there anyway, and if a board has ambiguity in terms of their different key players coming in and telling them that the company’s facing different risks, it really leads to frustration. The key here is there’s no one player that has to be the one to take the lead. But if somebody’s going to take the lead and get everyone on the same page with risk management, I think internal audit’s a prime candidate.”

He sees the various risks multiplying now. “I’ve been in the profession for 50 years,” said Chambers. “Next year will be my 50th year since I joined internal audit right out of college, and I’ve never seen a period as volatile as these last five years. We have been averaging as many risk disruptive events per year as we used to see in a decade. The time has come for action and the key risk management players — the risk managers, internal auditors, compliance, infosec — the ball is in their court. If companies are going to navigate the second half of this decade with any degree of success, these players have to come together and be a part of it.” 

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Accounting

Trump berates Republicans to ‘Stop talking,’ pass tax cuts

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Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

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97% say CPA firms not using tech efficiently says survey

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While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

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Accounting

Trump tax bill fails in House panel

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A key House committee on Friday failed to advance House Republicans’ massive tax-and-spending bill after hard-line conservatives bucked President Donald Trump and blocked the bill over cost concerns.

The House Budget Committee rejected the bill 21-16, with Republican Reps. Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde joining Democrats to vote against it. The four hardliners demanded deeper cuts to Medicaid and other government programs.

It’s incredibly rare for bills to fail at this step in the process, with the committee vote typically serving as a rubber-stamp to the bill before it moves to the House floor. 

Representative Chip Roy
Rep. Chip Roy

Stefani Reynolds/Photographer: Stefani Reynolds/B

The setback could be temporary and the panel can still approve the bill once the GOP differences are resolved. 

Republican Lloyd Smucker, who switched his vote to “no” to allow the committee to bring it up again, told reporters the committee will hold another vote on Monday. 

Trump, whose social media muscle and calls to lawmakers have previously been crucial to advancing his priorities, inserted himself in the debate less than two hours before the vote, berating dissidents and urging them to fall into line. 

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

The bill’s failure exposes the power a small group of lawmakers can wield as Republicans seek to push Trump’s “one big, beautiful bill” through the House with very narrow margins. GOP infighting threatens to kill the bill, or at least significantly delay Republicans’ plans to pass the bill next week.

(Read more:‘One big beautiful bill’ full of tax surprises.”)

Republican holdouts spelled out their demands during Friday’s committee meeting, including accelerating new work requirements for able-bodied adults on Medicaid to take effect immediately rather the 2029 deadline set in the legislation. The ultraconservatives also want a faster phase-out of clean energy tax credits.

It wasn’t immediately clear how House Republicans will re-group to address the divisions and advance the bill.

“I’ll let you know this weekend if we’re going to return first thing Monday. That’s the goal at this point,” Budget Chairman Jodey Arrington said after the vote. 

House Majority Leader Steve Scalise, who is helping to broker a deal among Republicans, said party leaders are in touch with the Trump administration to address some of the changes demanded by hardliners.

“We are all in agreement on the reforms we want to make,” Scalise said. “We want to have work requirements. We want to phase out a lot of these green subsidies. How quickly can you get it done?”

House Speaker Mike Johnson on Thursday pledged he would work through the weekend to broker a compromise between moderates, who are seeking an increase in state and local tax deductions, and ultra-conservatives, who say they won’t support it without more spending cuts.

(Read more:Here are the winners and losers in the Republican tax bill.“)

Members from both factions — the SALT Republicans representing high-tax districts and the fiscal hawks who want steeper budget reductions — have threatened to block the bill if House leaders don’t acquiesce to their demands. 

“No one group gets to decide all this stuff in either direction,” Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Both Roy and Norman urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time.”

If the legislation passes the House, it would then head to the Senate where it would likely undergo significant changes. Several members, including Senator Josh Hawley of Missouri, have stated opposition to the Medicaid cuts in the House bill.

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