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Boomer’s Blueprint: Branding is important for CAS

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Client accounting services — or is it client accounting & advisory services? — has been a buzzword across the accounting profession for years. Yet, despite its prevalence and the potential it holds to redefine professional services, a consensus on its definition seems elusive.

Different firms, as well as different authoritative bodies like the American Institute of CPAs and CPA.com, offer varied interpretations of what CAS encompasses. This diversity in understanding reflects the evolving nature of accounting and the need to align these services with client expectations and the rapidly changing business landscape. In other words, the profession needs to view these services from the client’s perspective, rather than from the inside out.

The challenges

At its core, CAS/CAAS aims to transcend traditional transactional and compliance services, venturing into the realms of advisory and consulting. However, the transition is fraught with challenges, primarily due to the heterogeneous nature of the definitions provided by service providers.

Each firm tailors its CAS/CAAS offerings based on its strength, market position and client needs. This diversity leads to a spectrum of services that, while beneficial, complicate the task of setting industrywide standards and create confusion in the market.

The AICPA and CPA.com have been at the forefront of efforts to bring uniformity to what CAS entails. Their definitions often emphasize the integration of technology, strategic planning, and business process improvement into accounting services. Nonetheless, these efforts are juxtaposed against individual firms’ and non-CPA competitors’ definitions, which might prioritize specific service aspects, such as financial planning, risk management or digital transformation consulting.

From transactional to transformative

To navigate the complexity of CAS/CAAS, it’s helpful to consider the services under four broad categories: transactional, compliance, advisory and consulting. Capacity is a challenge at the transactional and compliance level, while capability becomes a challenge at the advisory and consulting levels. The following definitions will hopefully provide some clarity.

Transactional services include day-to-day bookkeeping and accounting tasks. While essential, they are increasingly becoming automated through software solutions and artificial intelligence, pushing firms to consider higher-value offerings. AI is everywhere in the business capability model.

Compliance services ensure that clients meet regulatory requirements and reporting standards. Although critical, these are often seen as baseline services that many clients expect as a given, while many providers view them as highly technical and advisory.

Advisory services represent a step up, focusing on providing strategic advice to help clients better manage their finances, optimize operations, and plan for growth.

Consulting services delve into more specialized areas such as financial modeling, visioning/planning, mergers and acquisitions, and technology implementations. Here, the expertise is not just in accounting but in leveraging financial insights to drive business transformation.

Advisory and consulting services are more of a team sport, while the rugged individual can often meet the wants and needs of transactional and compliance services.

Aligning with market wants and needs

Amid these challenges and rapid change, there is a growing recognition of the need to brand and package service offerings in a way that resonates with clients. This means moving beyond jargon and profession-specific language to articulate the tangible benefits these services can deliver.

For clients, the value of these services is not in the technicalities of what the firm offers but in how these services help them achieve their business objectives. Too many firms get caught in their silos, restricting data flow and communications. They are also caught in the existing business model, believing time is money, rather than money is time.

Whether improving financial visibility, strategic growth planning or operational effectiveness, firms must package and price these services as part of the client’s success story. In other words, how does the firm make the client the hero?

This client-centric approach requires a deep understanding of the challenges and opportunities within specific industries and the ability to tailor services accordingly.

Competing strategies

Most firms have elected to add corresponding services to tax and accounting (transactional and compliance), but is it more compelling to start with a blank slate, determine target clients, and then package services around those clients while including tax and accounting in the package, rather than leading with tax and accounting? From the market’s perspective, clients want advisory and consulting services and require transactional and compliance services. Value is determined by the client, not by the provider. Most firms have too many clients and are underserving their ideal clients.

The future of CAS/CAAS

The future is promising but demands a concerted effort from firms to redefine and align their services with the evolving market. This includes a continuous investment in technology and talent, fostering a culture of innovation, and developing a nuanced understanding of the industries served.

Moreover, as the profession navigates the impacts of outsourcing and AI, it is crucial to embrace these changes as opportunities rather than dangers. Branding is a marketing function. The accounting profession should rethink its approach to marketing and sales. Order-taking is no longer enough. Professional marketing and sales are needed to sustain and grow the profession’s relevance.

Action plan for alignment and innovation

Here are your next steps as you move your firm forward in CAS/CAAS:

1. Begin with a blank slate. Challenge the status quo by reimagining your service offerings from the ground up. What is your vision for the next three years? Do you have a strategic plan to support that vision? This process involves identifying ideal client profiles and understanding their evolving needs, which extends beyond traditional accounting services.
2. Embrace ideation and experimentation. Innovation is the result of creativity and experimentation. Foster a culture that encourages creative thinking and experimentation, allowing for developing new services and delivery models that respond to the changing business environment.
3. Leverage technology and AI. Strategically applying outsourcing and AI technologies can enhance efficiencies and enable team members to focus on high-value advisory and consulting services. This transition requires investment in technology and training to increase capacity and capabilities. AI is everywhere (or should be) in your firm.
4. Focus on client-centric service design. Design your service offerings with the client at the center, ensuring you address their specific business challenges and opportunities. This approach enhances client satisfaction and positions the firm as a stakeholder in client success. It can also allow team members to operate according to their unique abilities.
5. Navigate the impact of private equity. Consider the strategic implications of private equity in the accounting profession. This may involve evaluating opportunities for investment in technology, talent and market expansion to drive growth and innovation.
6. Adopt a continuous-learning mindset. The shift toward advisory and consulting services demands a commitment to continuous learning and professional development. Engage in a peer community.

Overcoming the gravity of the past

Transforming to a more innovative and client-centric service model isn’t without its challenges. The accounting profession has historically been rooted in tradition, with a strong inclination toward maintaining the status quo. However, the gravity of the past should not outweigh the pull of the future, and the future is bright.

Firms willing to rethink their service models, embrace new technologies, and focus on delivering value-aligned services will be better positioned to thrive in the evolving landscape. Change leadership, process management, and project management are all required. We call this the Transformation Triangle!

Think — plan — grow!

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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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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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