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Cloud backup strategies are critical for accountants

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For over a decade, I’ve been shouting from the rooftops that accounting firms need to get into the cloud. And guess what? We’re finally here. OK, maybe it took a global pandemic to force some firms to catch up, but hey, we made it. But now, in 2025, it’s time to ask ourselves — is the cloud really as safe as you think it is?

Sure, moving to the cloud brought you efficiency, flexibility and scalability. But the cloud isn’t some magical fortress that protects your data from every possible threat. If you’re not thinking about cloud backups, your firm is vulnerable. Here’s why cloud backups are critical today.

Too many firms assume their cloud providers have everything under control when it comes to data protection. However, Vijay Krishna, CEO of SysCloud, calls cloud security a shared responsibility.  

“Cloud providers ensure infrastructure security, but the data itself is the firm’s responsibility,” Krishna said.

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And that means trouble. Accidental deletions, ransomware attacks, and even disgruntled employees with lingering access can all lead to catastrophic data loss. And guess what? Your cloud provider isn’t going to swoop in and fix it for you.

It’s easy to fall into the “I’m in the cloud, so I’m good” trap, but the truth is, your firm still owns the responsibility of safeguarding client data. Whether your files live on your hard drive or in someone else’s data center, they’re still your problem.

And firms are learning this lesson the hard way. Krishna shared that even companies with solid cloud strategies deal with data restoration requests all the time — from accidental deletions to integrations gone wrong. It happens more than you’d think.

The real problem is everyday mishaps

When we think about data loss, we imagine worst-case scenarios like servers crashing, ransomware attacks and total wipeouts. But Donny Shimamoto, managing director of IntrapriseTechKnowlogies, says that’s not where firms should be focusing.

“It’s not just about disaster recovery anymore. Firms need to think about incremental data loss like an employee accidentally overwriting records or an automation script flooding systems with bad data,” said Shimamoto. “These smaller incidents can cause significant operational disruptions.”

We’re always worried about big disasters, but in reality, it’s the small, everyday mistakes that cost firms the most time and money. Losing even a few hours of work can be a major disruption, especially during tax season. Imagine scrambling to recreate critical data right before a deadline. Ouch!

Without a solid cloud backup solution, your team could waste hours, over even days, trying to fix what went wrong, and no one has time for that.

How data retention is evolving

If compliance wasn’t already a big deal, it’s about to get even bigger. Regulatory bodies are tightening their grip, and firms need to get serious about data retention. In addition to retention requirements, there are cybersecurity laws and data privacy regulations like IRS guidelines, GDPR and state-specific mandates. 

“Several states now offer safe harbor provisions for firms that can demonstrate compliance with cybersecurity frameworks like NIST,” Shimamoto said. 

So as long as your backup processes are documented and aligned with the right frameworks, you could be in a much stronger position when regulators come knocking.

Krishna mentioned the NIST 3-2-1 rule that recommends keeping three copies of your data, stored on two different types of media, with at least one copy kept offline. The last part gets to air-gapped storage and it’s what keeps that data safe from hackers, ransomware and rogue employees. That backup is untouched and ready to restore if ever needed.

Compliance isn’t just another box to check. It’s a strategy for survival. Firms that can prove they have their data under control are the ones that will avoid regulatory fines and protect their reputations. 

Leveraging backup for insights

Cloud backups aren’t just about recovering lost files anymore. They can actually help your firm work smarter. Krishna explains how advanced platforms offer anomaly detection, tracking unusual spikes in data deletions or changes.

“By monitoring trends and patterns, firms can catch potential threats before they escalate,” he said. “It’s about shifting from reactive to proactive data management.”

This is a big deal. Imagine getting alerts before a major data issue arises or spotting trends in employee activity that could indicate a problem before it gets out of hand.

As firms embrace automation and AI, the ability to proactively monitor data changes could be the key to staying ahead of the competition. Being reactive isn’t enough. You have to take control of your data before it takes control of you.

If your firm needs to step up its cloud backup game, don’t panic. Here are a few practical steps you can take today:

  • Audit your backup strategy. Do you have a reliable backup solution? Make sure it covers both full-system and incremental data recovery.
  • Own your data security. Understand that cloud providers won’t save you. Your firm must take an active role in protecting client data.
  • Stay alert. Use backup tools that detect anomalies, unauthorized access, or unusual activity to stay proactive.
  • Get compliant. Align your firm with regulatory standards like NIST and take advantage of safe harbor provisions.
  • Educate your team. Data protection isn’t just for IT. Everyone in the firm needs to know how to safeguard client information.

It’s not just about having the right technology; it’s about having the right mindset.
Stop thinking of backups as an afterthought and start treating them as an essential part of your data strategy. It’s a whole new era of accounting, and being able to thrive is dependent on embracing secure, proactive cloud strategies.

Because in 2025, it’s not about “if” you should back up your cloud data, it’s about whether you can afford not to.

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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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