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SOC 2 reports reimagined: From burden to business enabler

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Perception is a powerful force. Few challenges are greater than overcoming perceptions, especially those supported by historical realities, facts and cultural norms. However, in an era when the accounting profession is defined by change and technological evolution, our most significant opportunities lie in challenging those perceived beliefs. That is precisely what we should be doing with SOC reporting today. 

System and Organization Control 2 reports have historically been viewed as slow and complicated engagements defined by frustration. The projects require extensive and detailed evidence collection and demand a high level of subjective judgment and customization, which are very different challenges from the financial statement audits many SOC professionals were raised performing. Approaching these engagements with spreadsheets and flash drives has also made the process very cumbersome and frustrating, solidifying the perception of SOC 2 reports as daunting and difficult. 

Fortunately, an increasing number of organizations have continued to dredge through the process — the report’s value is immense, and it is often a requirement to conduct business. This provides a broad level of tolerance for flawed systems and acceptance that friction is core to completing a SOC 2 report or even viewed as a feature of a high-quality audit. 

This perception — confusing, slow and frustrating with high quality — hinders innovation. It doesn’t result in simple acceptance of the status quo or fear of change but manifests as outright hostility towards ingenuity. If these audits are “supposed to be hard,” then any suggestion to make them easier is rejected.

And yet, in recent years, that has all begun to shift: There is real excitement and investment in SOC 2 services from innovators outside of public accounting. They are challenging every aspect of how these audits are conducted with broad positive and negative impacts that demand the evolution of the perspectives of auditors, clients and the industry as a whole. It’s time to change our outlook and embrace the advancements in performing SOC 2 audits to fully realize the incredible amount of value and competitive advantage the service can provide. 

Legacy tools and processes

Financial statement audit processes, the foundation of most assurance practices, were created using a shared language between auditor and client. Most clients in that world have backgrounds as auditors and are supported by well-established financial terminology and systems. When an auditor asks for an “invoice” or “purchase order,” the CFO knows exactly what is being requested. 

Such a luxury does not exist when working with the information security community, which has a diverse vocabulary with varying definitions, pronunciations, and an unlimited number of acronyms. Accountants have spent hundreds of years establishing translation guides and systems. If anything, the level of standardization in technology is astounding, but this is a new industry experiencing dramatic change. So, it makes sense that approaching SOC 2 services with the same tools and rhythms as a financial statement audit has not proven successful.

From a growing need, new tools emerge

In an effort to bridge that gap and provide automated control monitoring, governance, risk and compliance platforms have been created to help clients manage policies, access risk, control user access, and streamline compliance. Through the use of policy templates and checklists adopted by each client, these GRC platforms have created standardization, where there previously was none, and concentrated resources that make this service attainable for small companies. 

In the same way that Apple brought the home computer into our living rooms, these tools are making SOC 2 reports mainstream.

GRC platforms are also capable of producing automated evidence, which attracts most of the attention and provides significant benefits. Yet the greater impact is the friction they’ve removed. This simpler and scaled approach to SOC 2 reports reduces the noise created by the back and forth between auditor and client while removing the poor organization so begrudgingly accepted, allowing the auditor to focus on providing value. That value can come from conducting a simple and straightforward, low-touch engagement or an in-depth and intense control inspection that identifies true vulnerabilities and significant risks to the business. 

Regardless of the approach, the technology supporting these engagements continues to improve. Last year, the RegTech industry was valued at $9.3 billion, growing at an 18% annual rate from 2024 until 2032. These enhancements enable more companies to complete these attestations earlier in their lifecycle, providing them access to new opportunities in regulated industries previously reserved for legacy corporations that could afford compliance. 

The challenges attached to compliance shifts

This growth and evolution of SOC 2 compliance is not without consequences. As speed has increased and prices have dropped, there has been a growing resentment towards these new approaches, not all of which are unfounded. Concerns about overreliance on automated evidence, auditor relationships with GRC platforms, and subject matter expertise within an engagement team are very real challenges the profession must continue to address.

However, by ignoring and shunning the existence of these new tools in an effort to retain the engagement’s status as “hard,” auditors avoid any opportunity to create value that exists beyond the paperwork. 

Identifying that value and educating the world on the need to blend these tools with the expertise and professionalism that has always accompanied these services is a critically important message right now. Without that shared understanding and positive messaging, we continue to struggle through the communication challenges we started with and drown in the noise. 

Overcoming obstacles with the right message

SOC 2 audits are going to keep getting easier, faster, and cheaper. Emerging technology and growing demand have made SOC reporting a very competitive and fast-paced industry that will feel some bumps along the way, but the need this service fills will shape the profession. 

And if the perception isn’t slow, frustrating, and resource-intensive — what should it be? 

SOC 2 reports are really a storytelling mechanism. They allow companies to communicate the security practices they value and demonstrate they are deserving of trust. These details can then be exchanged with outside parties to support decision-making in ways that were not previously possible. Companies are now sharing the completion of these reports through trust pages on their websites and online marketplaces as a sales differentiator, which allows CPAs to impact businesses in new and exciting ways. 

The value they provide internally can also not be ignored. Accountability and organizational alignment allow mature and growing businesses to thrive. These aspects of SOC 2 compliance have always been valued, but the new supporting tools have suddenly made the experience practical, which should be celebrated. 

When viewed as a mechanism for sharing information and allowing the client to be the author, you not only offer validation but a new mechanism for them to understand their own needs. It serves to track, evaluate, and understand critical aspects of their business in the same way the accounting ledger helps them understand their financial position. Instead of being a challenge or roadblock to overcome, you position clients to thoughtfully understand, own and communicate the aspects of their security program, which can be embedded into the organization’s way of life.

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Accounting

IRS employee union requests emergency relief

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The National Treasury Employees Union, which represents workers at the Internal Revenue Service among 37 federal agencies and offices, has asked a federal judge for emergency relief to preserve the union rights of federal employees while NTEU’s legal challenge to President Trump’s executive order stripping unions of collective bargaining rights can be heard in court.

Trump signed an executive order last Thursday removing the requirements from employees at agencies including the Treasury Department that he deemed to have national security missions. On Monday, the NTEU filed a lawsuit to stop the move arguing that Trump’s rationale for protecting national security was just a way to end union protections for federal workers. The administration also wants to prevent the unions from collecting dues automatically withheld from employee paychecks.

NTEU’s request for a preliminary injunction was filed Friday with U.S. District Judge Paul Friedman.

 “NTEU seeks emergency relief to protect itself and the workers it represents from this unlawful attempt to eliminate collective bargaining for some two-thirds of the federal workforce,” the request stated.

The NTEU contended that the Trump administration’s executive order claims that allowing workers to join a union was a threat to national security were absurd.

“We all know this has nothing to do with national security and that the true goal here is to make it easier to fire federal employees across government,” said NTEU national president Doreen Greenwald in a statement Friday. “Just five days after declaring the administration would no longer honor our contract with Health and Human Services, thousands of brilliant civil servants who work tirelessly to improve public health were let go for spurious reasons and little recourse to fight back.”

The union pointed out that Congress declared 47 years ago that collective bargaining in the federal sector was in the public’s interest by giving employees a voice in the workplace and allowing labor and management to work together. It acknowledged there is a narrow exemption in the law for groups of employees whose work directly impacts national security, but argued that Trump’s executive order is blatant retaliation against federal sector unions and ignores the laws passed by Congress creating the agencies.

In agencies where a reduction-in-force has been announced, NTEU’s contracts provide time for employees to respond to a RIF notice and explore alternatives to mitigate the impact of the layoffs.

Earlier this week, after two court rulings in California and Maryland, the IRS’s acting commissioner, Melanie Krause, announced the IRS would be bringing back approximately 7,000 probationary employees who had been fired and then put on paid administrative leave.

A bipartisan bill has been introduced in Congress to preserve collective bargaining rights for federal employees. The Protect America’s Workforce Act (H.R. 2550), sponsored by Rep. Jared Golden, D-Maine, and Brian Fitzpatrick, R-Pennsylvania, would overturn Trump’s executive order stripping collective bargaining rights from hundreds of thousands of federal workers at multiple agencies.  Separately, eight House Republicans and every House and Senate Democrat have sent letters to the White House condemning the executive order.

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Accounting

Estate planning for the Tax Cuts and Jobs Act expiration

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The political calculus involved with the details of estate planning next year and beyond may be distracting financial advisors and clients from a larger, simpler conversation, one expert says.

On the off chance that the federal estate-tax exemption levels of $13.99 million for individuals (and double for couples) revert to half those amounts when Tax Cuts and Jobs Act provisions expire in 2026, only 0.2% of households would face potential duties upon transfer of assets, according to Ben Rizzuto, a wealth strategist with Janus Henderson Investors‘ Specialist Consulting Group. He predicted that most financial advisors and high net worth clients, such as those he works with and others across the industry, will see no changes. 

With few other revenue-raising provisions available to President Donald Trump and Republican lawmakers, they’re not likely to shield all estates from payments to Uncle Sam — as much as they might like to play undertaker to the “Death of the Death Tax,” Rizzuto said, using the label for estate taxes adopted by critics favoring bills like the “Death Tax Repeal Act.” Lawmakers’ decisions on future exemptions from the taxes (and when they make those decisions) remain out of advisors’ control. Meanwhile, they must remind clients that estate planning is much more than having a will and avoiding taxes, Rizzuto said.

“For financial advisors and clients, I would expect for many of them not to have to worry about federal estate taxes next year,” he said in an interview. “Even though they may not have to worry about it, there are still a lot of good conversations to be had.”

READ MORE: Tax Cuts and Jobs Act expiration: A guide for financial advisors

The 1%

Trust tools that reduce the value of the assets that will transfer to spouses or other beneficiaries upon a client’s death, combined with the available statistics about the shrinking share of estates subject to taxes, could bring some peace of mind to clients. The 2017 tax law itself pushed down estate tax liability as a percentage of gross domestic product to a quarter of its 2001 level, according to an analysis by the “Budget Model” of the University of Pennsylvania’s Wharton School. Just two years after the law’s passage, the number of taxable estates had plummeted to 1,275 — or 1% of the number at the beginning of the century.

At the same time, advisors could raise any number of questions with clients about their estates that involve varying degrees of expertise and collaboration with outside professionals. And many surveys have found that clients are expecting them to do so. For example, at least 70% out of a group of 10,000 adults contacted in January by WeAreTalker (formerly OnePoll) on behalf of online legal information service Trust & Will said advisors should offer estate planning. In addition, 40% of the group said they would switch to an advisor who provided that service.

“We’re seeing a fundamental shift in client expectations,” Trust & Will CEO Cody Barbo said in a statement. “The findings are clear. Advisors who fail to integrate estate planning into their practice aren’t just missing an opportunity; they are facing a threat to their client base as wealth transfers to younger generations over the next two decades.”

READ MORE: Ethical wills can be a crucial tool for estate planning

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Get back to the planning basics

In that context, advisors and their clients should steer clear of trying to make sense of a complicated, ever-changing flow of news from Capitol Hill as Trump and the GOP pursue major tax legislation with a year-end deadline, Rizzuto said. If clients truly could be on the hook for estate taxes, a grantor retained annuity trust, a spousal lifetime access trust or gifting strategies may eliminate the possibility. One method involved with the latter could set them up in the future to receive stock that is “highly appreciated with lower basis,” Rizzuto noted, citing the example of equities that have gained a lot of value that a client could give to their parents.

“Why not gift them upstream?” Rizzuto said. “My father holds it. I tell him, ‘Dad, you have to do these things: Live for another 12 months, make sure you don’t sell, make sure that you update your will or your instructions to gift it back to me when you die.’ That’s another idea that we’ve been talking about with advisors.”

From another perspective, these possible paths forward may beckon to clients this year, if they are tuning into Beltway news about the progress of the tax legislation, he said. To bypass the risk of client perceptions that their advisor isn’t doing any tax planning at all, Washington’s complex maneuvering around the future rules is, “if nothing else,” a “great opportunity for advisors to bring this up at a very high level,” Rizzuto said.

“Advisors will really need to go back to basics and have some foundational conversations with clients,” he said, suggesting their goals with taxes as one key point of discussion. “‘What is it that we actually control within your financial and tax plan?’ When it comes right down to it, it’s really just incomes and deductions.”

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Accounting

Developing future leaders in accounting: the new imperative in an AI and automation driven era

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As technology continues to automate routine tasks, the role of finance professionals is evolving, demanding deeper capabilities in critical thinking, communication and business acumen. 

Many of PrimeGlobal’s North American firms are focused on cultivating these skills in their future leaders. Carla McCall, managing partner at AAFCPAs, Randy Nail, CEO of HoganTaylor, and Grassi managing partner Louis Grassi shared their views with PrimeGlobal CEO Steve Heathcote on the need for future leaders to balance technological proficiency with human-centered skills to thrive.

AI is transforming the sector by streamlining workflows, automating data analysis and reducing manual processes. However, rather than replacing accountants, AI is reshaping their roles, enabling them to focus on higher-value tasks. In the words of Louis Grassi, AI can be seen as a strategic partner, freeing accountants from routine tasks, enabling deeper engagement with clients, more thoughtful analysis, and ultimately better decision-making. 

Nail emphasized the importance of embracing AI, warning that those who fail to adapt risk being replaced by professionals who leverage the technology more effectively. HoganTaylor’s “innovation sprint” generated over 100 ideas for AI integration, underscoring why a proactive approach to adopting new technologies is so necessary and valuable.

McCall advocates for an educational shift that equips professionals with the skills to interpret AI-generated insights. She stressed that accounting curricula of the future must evolve to incorporate advanced technology training, ensuring future accountants are well-versed in AI tools and data analytics. Moreover, simulation-based learning is becoming increasingly crucial as traditional methods of education become obsolete in the face of automation.

Talent development and leadership growth

As AI reshapes the profession, firms must rethink how they develop and nurture their future leaders. To attract and retain top talent, firms need to prioritize personalized development plans that align with individual career goals. 

HoganTaylor’s approach to talent development integrates technical expertise with leadership and communication training. These initiatives ensure professionals are not only proficient in accounting principles but also equipped to lead teams and navigate complex client interactions.

Nail underscored the growing importance of writing and presentation skills, as AI will handle routine tasks, leaving professionals to focus on higher-level analytical and decision-making responsibilities.

Soft skills are the success skills

While technical proficiency remains vital, future leaders must also cultivate critical thinking, communication and adaptability — skills McCall refers to as the “success skills.” McCall highlights the necessity of business acumen and analytical communication, essential for interpreting data, advising clients and making strategic decisions. 

Recognizing teamwork and collaboration remain crucial in the hybrid work environment, McCall explained in detail how AAFCPA fosters collaboration through structured remote engagement strategies such as “intentional office time,” alcove sessions and stand-up meetings. Similarly, HoganTaylor supports remote teams by offering training for career advisors to ensure effective mentorship and engagement in a dispersed workforce.

McCall emphasized why global experience can be valuable in leadership development. Exposure to diverse markets and accounting practices enhances professionals’ adaptability and broadens their perspectives, preparing them for leadership roles in an increasingly interconnected world.

Grassi reminded us that an often-overlooked leadership skill is curiosity. In his view the most effective leaders of tomorrow will be inherently curious — not just about emerging technologies but about clients, market shifts and global trends. Encouraging curiosity and continuous learning within our firms will distinguish the true industry leaders from those simply reacting to change.

A balanced future

What’s clear from speaking to our leaders is PrimeGlobal’s role in fostering trust, community and knowledge sharing. McCall recommended member-driven panels to discuss AI implementation and automation strategies and share best practice. Nail, on the other hand, valued PrimeGlobal’s focus on addressing critical industry issues and encouraged continuous evolution to meet professionals’ changing needs.

The future of leadership in the accountancy profession hinges on a balanced approach, leveraging AI to enhance efficiency while cultivating essential human skills that technology cannot replicate, which Grassi highlights skills including leadership and building client trust.

As McCall and Nail advocate, the next generation of accountants must be agile thinkers, skilled communicators and strategic decision-makers. Firms that invest in these competencies will not only stay competitive but will also shape the future of the industry by developing well-rounded leaders prepared for the challenges ahead.

By investing in both AI capabilities and essential human skills, firms can not only future proof their leadership but also shape a resilient and forward-thinking profession ready to meet the challenges of the future.

As Grassi concluded, while technical skills provide the foundation, leadership in accounting increasingly demands emotional intelligence, empathy and adaptability. AI will change how we perform our work, but human connection, trust and nuanced judgment are irreplaceable. Investing in these human-centric skills today is critical for firms aiming to build resilient leaders of tomorrow. To remain relevant and thrive, professionals must prioritize developing strong success skills that will define the leaders of tomorrow.

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