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Navigating the accounting technology landscape in 2025

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The accounting profession is on the brink of a significant evolution, driven by technological innovation, regulatory shifts and increasing demands for transparency. 

Compounding these challenges is a decline in college students pursuing accounting degrees, shrinking the talent pool and placing additional strain on the profession. This talent shortage amplifies the urgency for firms to adapt quickly to maintain their competitive edge. These changes present both challenges and opportunities, requiring organizations to adapt rapidly to remain competitive. For management consultants working alongside accounting professionals, understanding these trends is key to guiding clients through this transformation. Here are the pivotal areas of focus as we approach 2025.

AI-powered automation: a strategic advantage

Artificial Intelligence has become an essential tool for accountants, streamlining accounting operations and enhancing client value. Automating repetitive tasks like data entry and reconciliation allows firms to reallocate resources to more strategic functions. For consultants, this means helping organizations navigate the integration of AI-powered tools into their workflows while ensuring that teams are equipped to maximize the value of this technology. The ability to provide real-time support and enhanced accuracy positions AI as a cornerstone of modern accounting operations.

Cloud-based solutions: empowering agility

The continued rise of cloud-based platforms is revolutionizing how financial data is managed and accessed. These solutions drive collaboration, efficiency and flexibility, particularly in hybrid work environments. For consultants, the focus lies in guiding clients on how to optimize cloud adoption, from vendor selection to change management. Firms that embrace these tools are better positioned to respond to dynamic client needs and scale operations seamlessly.

Real-time data and analytics: shaping better outcomes

With advanced analytics tools becoming more sophisticated, the ability to derive actionable insights from financial data is transforming decision-making. Predictive analytics empowers organizations to anticipate trends and proactively mitigate risks. Consultants help clients transition from reactive to proactive strategies by building the necessary infrastructure and skills. This shift not only enhances financial planning but also positions firms as strategic partners to their clients.

Data security and privacy: protecting what matters most

The increasing digitization of accounting processes brings heightened data security and privacy risks. Robust cybersecurity frameworks, including encryption and real-time threat detection, are essential to safeguarding sensitive financial information. Compliance with data protection regulations further complicates this landscape, requiring careful planning and execution. Consultants can offer critical guidance on how to strengthen security measures while maintaining operational efficiency. By prioritizing data security, firms can build trust and ensure long-term success in a digital-first environment.

ESG reporting: rising to stakeholder expectations

Environmental, social, and governance reporting is emerging as a non-negotiable component of corporate accountability. Stakeholders expect organizations to disclose their environmental impact, social initiatives, and governance practices transparently. This demand is reshaping reporting requirements and driving the adoption of new tools and processes to track ESG metrics effectively. Consultants have an opportunity to assist clients in aligning their reporting strategies with these expectations, ensuring compliance while enhancing their overall value proposition.

Master data management: ensuring data quality

As accounting firms increasingly use various software systems and technologies, maintaining data integrity and consistency across these platforms becomes crucial. Master Data Management is a key strategy to ensure that core data, such as customer and vendor details, account information and financial metrics, remain accurate and consistent regardless of their storage location or usage. With the increasing focus on data-driven accounting, the role of MDM in maintaining data quality and security is becoming increasingly important. Firms that implement strong MDM practices are better situated to manage the complexities of modern financial systems.

Navigating the road ahead

The road to 2025 is filled with complexity and opportunity. The role of consultants working in the accounting sphere is clear: provide insights, strategies and frameworks that enable organizations to thrive amid change. By focusing on areas such as AI, cloud technology, data analytics, cybersecurity and ESG reporting, consultants can help clients transform challenges into competitive advantages.

This moment is an opportunity for organizations to redefine their role in a rapidly changing marketplace. With their strategic perspective and expertise, consultants are uniquely positioned to guide this transformation and ensure their clients are not only prepared for 2025 but set up for enduring success. By addressing these pivotal areas, accounting professionals and consultants can work together to create a stronger, more resilient profession that is ready to meet the challenges and opportunities of the future.

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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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