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IFRS publishes guide to ISSB standards

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The International Financial Reporting Standards Foundation published Wednesday a guide for preparers voluntarily applying standards by the Internationally Sustainability Standards Board. 

The guide aims to help companies that are voluntarily applying ISSB standards and help them communicate their progress to investors, especially in jurisdictions without regulatory requirements to apply the standards.

The guide is the latest in a series to support the implementation of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. 

“Companies around the world already provide investors with sustainability-related information in response to investor demand. However, they use a patchwork of frameworks and standards to do so, leaving investors unable to compare the performance and prospects of companies,” ISSB chair Emmanuel Faber said at New York Climate Week, where the announcement was made. “With many frameworks and standards now consolidated into the ISSB, the voluntary application guide helps companies navigate from their current reporting practices to applying ISSB Standards, providing a cost-effective route for companies to provide decision-useful, assurable financial information to investors.”

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Accounting

Private sector pulls back on hiring amid tariff worries

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Private sector hiring slowed in April as employers added only 62,000 jobs and annual pay grew 4.5% year over year, payroll processor ADP reported Wednesday, as worries grew over tariffs and a possible recession.

That was in contrast to the 155,000 jobs added in March, according to ADP’s report earlier this month. In the latest report, the service-providing sector added a total of 34,000 jobs, including 20,000 in financial activities like banking, but 2,000 jobs were lost in professional and business services like accounting and tax preparation. The goods-producing sector added 26,000 jobs this month, including 16,000 in construction and 4,000 in manufacturing. 

Small businesses with between one and 19 employees added 20,000 jobs, but businesses with between 20 and 49 employees lost 9,000 jobs. Medium-sized establishments added 40,000 jobs, including 21,000 in companies with between 50 and 249 employees, and 19,000 in businesses with 250 to 499 employees. Large establishments with 500 employees or more added only 12,000 jobs.

That represents “a real pullback in hiring, reflecting some of that uncertainty and unease in terms of where the economy is going,” said ADP chief economist Nela Richardson during a conference call Wednesday with reporters. 

“All of this does reflect some unease, and we’re seeing that different sectors are responding to uncertainty at different times, some last month and this month,” she added. “We expect that kind of rolling response will continue as sectors are really laser focused on what’s going on in their industry, as well as trying to reconcile that with the overall macro economy.”

Those concerns were highlighted by a decline in the gross domestic product number reported Wednesday by the Commerce Department, showing GDP fell 0.3% in the first quarter, the first decline since 2022.

Pay for employees who stayed in their jobs rose 4.5% in April from a year earlier, a slight deceleration from March. Year-over-year pay gains for people who changed jobs accelerated, rising from 6.7% in March to 6.9% in April. In professional and business services, the rate was 4.3% for job stayers.

Accounting Today asked whether former federal government employees who had been laid off were being hired in that sector, such as by accounting firms.

“In professional and business services, we actually saw a drop in hiring, down 2,000, so that suggests that this is not a sector that is really picking up those federal workers,” Richardson replied. “There probably won’t be a big swelling of workers from the federal side into the labor market in terms of looking for jobs until later in the fall, because a lot of them are still employed and receiving payment through the fiscal year. So we don’t expect to see those numbers quite this soon. We’ll probably see some trickling in from the federal side, but we’re not seeing anything in the private sector that looks like it’s a big hiring surge. There have been some shortages on the accounting side, so that is a sector that’s looking to hire to make up some of those longer, more persistent shortages.”

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Pro-SALT Republicans to debate deduction increase

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Republican lawmakers pushing for the expansion of the state and local tax deduction in President Donald Trump’s economic package are slated to meet with House Speaker Mike Johnson to get specific about how much to increase the $10,000 cap on the write-off. 

The meeting, set for Wednesday afternoon, comes as Republicans are beginning to craft the tax cuts and spending reductions they plan to pass in the coming months.

Representative Young Kim, a California Republican, said that Republicans “are still in negotiation” on how high to increase the dollar-limit on SALT deductions.

Yet the meeting may be one of the most detail-oriented yet with members expecting that the House Ways and Means Committee — which oversees tax policy — to offer an opening bid for a new SALT cap.

“The way the next several weeks will go will depend on the number they present tomorrow,” Representative Nick LaLota of New York told reporters on Tuesday. “This is the seventh or eighth inning of this process.”

Increasing the $10,000 limit — first imposed in Trump’s first-term tax bill — is a top priority for a handful of House Republicans who represent high-tax areas near New York City and Southern California. Republicans’ narrow majorities in the chamber mean that pro-SALT members have enough support to block the legislation if they deem the increase to the write-off too meager.

“We’ve had a number of conversations with our SALT caucus members,” said House Majority Leader Steve Scalise. “We’re going to have another meeting tomorrow and continue these meetings until we lock down a deal. And it’s one of many pieces of this puzzle.”

Most members have not yet said how high the SALT cap should go to earn their vote, but the contours of the negotiation have begun to form.

But Representative Chip Roy of Texas expressed resentment over the Johnson meeting, saying “when is he going to meet with the anti-SALT caucus?” 

Some Republicans have started drafting a tax bill behind closed doors that calls for the cap to increase as high as $25,000 for an individual. But some members, including New York’s Mike Lawler, have said that isn’t adequate, without offering a number of their own.

The tax-and-spending legislation will include an extension of Trump’s first term tax cuts for households and closely-held businesses. Republicans are also debating a fresh round of cuts, including eliminating levies on tips and making interest on car loans deductible. They face tough choices on spending cuts to partially offset the tax cuts.

Representative Jeff Van Drew, a New Jersey Republican, is one of the few members who has cited a specific SALT figure, on Tuesday called a cap between $30,000-$40,000 the “sweet spot.”

Representative Elise Stefanik of New York, a member of House leadership, said in a post on X on Tuesday she is “looking forward to the conversation about SALT with NY Members tomorrow,” but didn’t specify if she would also attend the meeting with Johnson.

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Accounting

Meet every accounting firm’s nightmare: Jackie Marie Peters

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And just who, you may be asking, is Jackie Marie Peters? Put simply, Jackie Marie is your firm’s biggest nightmare.

No, she’s not a client who never delivers her documents on time, or never pays her bill. Nor is she a staff member refusing to work 80 hours a week in tax season, or an overworked IRS employee who keeps you on hold and then can’t answer your question. She’s not even a member of Congress.

No, Jackie Marie is a real, actual nightmare. She’s a fraudster who was recently sentenced to 18 months in prison for her role in a scheme that involved hacking into the network of an accounting firm in Arizona and modifying the in-progress tax documents of more than 40 clients to inflate their refunds, and then arranging for those refunds (and some COVID relief payments) to be paid into bank accounts that she established and controlled — all without the knowledge of the taxpayers or the firm. She got away with more than $2.5 million.

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You may tell yourself that your firm is too small for this, but this was a local CPA practice, not some Big Four firm.

You may tell yourself that you’d notice this kind of activity right away, but Jackie Marie and her confederates were inside the target firm’s network for two years — from 2020 to 2022.

You may tell yourself that this kind of thing doesn’t happen that often, but it does — and it’s going to happen more, as the capabilities of fraudsters expand through artificial intelligence, massive increases in computer power, and our ever-growing reliance on technology.

The obvious answer is never to use technology at all, but since that horse is out of the barn, start by keeping these three facts in mind:

  • Everyone is vulnerable. Jackie Marie doesn’t care how big you are; in fact, she and her ilk may target smaller firms more often, on the theory that they’re less focused on security. Remember — she only needed 40 clients. You have 40 tax prep clients, right?
  • Security is primarily a people problem. By far the most common vector for an attack is less-than-vigilant staffers — those who click on phishing emails, or share passwords or private information, or otherwise give cybercriminals the one chance they need to get inside.
  • Strong security starts at the top. It may be a people problem, but people won’t pay attention to it unless the leaders of the firm do. When staff see partners calling out unsafe behavior, complying with safety measures, and otherwise prioritizing good IT hygiene, they’ll start to focus on it, too.

It’s time to bolster your cybersecurity. After all, while you may be safe from Jackie Marie for the next 18 months, there are literally thousands of people just like her out there right now.

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