Accounting

Tax and trade issues financial advisors are facing

Published

12 months ago

August 11, 2025

Global trade and tax policy questions with as-yet elusive answers could expose the U.S. economy and clients’ investment portfolios to difficult tests in coming months.

On the one hand, the One Big Beautiful Bill Act became law without a so-called revenge tax on foreign investments in the U.S. after member countries in the G-7 agreed in principle to a “side-by-side” setup exempting America from minimum global duties. On the other, the mix of confusing calculations about the size and impact of President Donald Trump’s tariffs and the rates of inflation, unemployment and corresponding decisions by the Fed is fueling macro-level fears about the economy. Policy experts are struggling to keep their forecasts up to date.

Financial advisors and their clients, in turn, may face even more difficulty than think tanks and stock analysts in trying to prepare for short-term volatility in the context of long-term goals. And the year-end deadline for the U.S. safe harbor from the Organisation for Economic Cooperation and Development’s Pillar Two global minimum tax rate of 15% could add further complications, said Peter Barnes, who’s of counsel to the International Tax Group of Caplin & Drysdale. But the removal of Section 899 duties from the law assuaged “a legitimate concern” on Wall Street that the “significant tax penalties” could have hampered economic activity, Barnes said.

“Foreign investors into U.S. companies would have had a fairly legit reason to say, ‘You know, there are a lot of countries around the world where I can invest. I don’t need to invest in the U.S.,” he said. “Not only did you have a reasonable fear of foreign investors saying, ‘I’m out of here,’ but you had uncertainty because you didn’t know which investors from which countries.”

Weighing competing factors

The Treasury Department and G-7 allies will need to work out the details of their June 26 understanding that include fending off objections from countries that have already agreed to the global minimum tax. But that issue may look tiny, compared to tariffs that have raked in more than $93 billion in revenue in 2025, with estimated average income losses of $2,400 in 2025 alone, due to higher prices for goods from, for example, India and their current rate of 50%.

Looming inflation, a continuing devaluation of the dollar and supply-chain disruptions may force the Fed to move in the opposite direction from the rate cuts that Trump is pushing for so strongly out of the central bank, according to David Lesperance, the founder of immigration tax and law advisory firm Lesperance & Associates. By the fourth quarter, the effects will likely be “painfully obvious to your average consumer,” he said.

“It’s very volatile, and wealth doesn’t like chaos,” Lesperance said. “Like him or hate him, there’s no doubt that the volatility factor in the market has increased dramatically with Donald Trump.”

Regardless, Lesperance said that investors “dodged a bullet on the revenge tax” with its elimination from the legislation. Trump’s Republican allies in Congress dropped a provision of the bill that would have hit countries with retaliatory new duties for levying what the legislation described as “discriminatory” taxes on American technology firms and other companies.

“Delivery of a side-by-side system will facilitate further progress to stabilize the international tax system, including a constructive dialogue on the taxation of the digital economy and on preserving the tax sovereignty of all countries,” the Treasury Department and G-7 countries said in jointly announcing their “accepted principles” in June. The Investment Company Institute, a trade group for the largest asset management firms hailed the agreement as “successful negotiations” ensuring that the U.S. will remain “the premier destination for global investors.”

Doubts for the future

But an advocacy group for international companies that do business in America, the Global Business Alliance, pointed out after Trump signed the bill into law that the way forward on international taxes is still murky.

“While details and timeline for the framework with the G-7 have yet to be released, the [undertaxed profits rule] safe harbor is still set to expire at the end of 2025,” the organization wrote in a blog post. “It is unclear how Pillar Two will be implemented after the framework unfolds.”

That statement between the Treasury and G-7 allies represents “a good step forward in resolving issues involving the global minimum tax,” but “2026 is coming rapidly,” Barnes said.

“As a technical matter, they need to go back now and say, ‘Oops, but not for the U.S.’ Are they going to be able to do that in time? Are they going to do that?” he added. “It will not be surprising if one or two or more countries say, ‘No.’ I think that would be a mistake, but it’s certainly possible.”

Moreover, the highest effective tariff rates since 1933 and Trump’s verbal attacks against the Fed over its refusal to cut interest rates more steeply and quickly could converge into a second spike in inflation resembling that of 2022, according to a blog last week by Ashwin Alankar, a portfolio manager who is the head of global asset allocation at Janus Henderson Investors.

“An error-driven second wave would back the Fed into a corner with no good choices,” Alankar wrote. “Keeping policy accommodative — for whatever the reason — would likely cement inflation expectations at unwanted levels, distorting the important mechanism of price signals across the economy. It would also destroy the Fed’s credibility. The lone alternative would be for the Fed to raise rates — as it was forced to do in the late 1970s and early 1980s — to levels that would almost certainly cause a steep economic downturn.”

Equal and opposite reaction?

That explains why jobs reports and Consumer Price Index readings will garner outsize attention in coming weeks and months. Advisors have grown accustomed to guiding clients through economic volatility, which is a key aspect of their value to customers. The political and economic climate is prompting some wealthy people to get their plans in place “in case the pendulum swings the other way” in the midterm elections next year, Lesperance said.

“Wealthy families are sitting there going, ‘OK, well traditionally in U.S. politics, if one party wins the trifecta, they generally lose one or both houses of Congress in the midterms,” he said. “OK, what happens if the Democrats win the trifecta and I’ve got Elizabeth Warren and Ron Wyden writing tax policy for the Democrats?”

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

5 days ago

July 21, 2026

Business Finance News

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.

Accounting

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

Published

6 days ago

July 20, 2026

Business Finance News

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

WASHINGTON — In a major escalation of cross-border trade friction, U.S. President Donald Trump has signed executive orders imposing new 50% tariffs on a wide selection of Canadian exports, citing discriminatory practices by Ottawa targeting American auto, dairy, and beverage industries.

The new duties, announced Monday, will take effect in 30 days. They target a broad spectrum of consumer and industrial goods—ranging from wine, liquor, and milk products to commercial cement, furniture, clothing, and hockey equipment.

Untested Legal Mechanism

To enact the sweeping measures, the administration invoked Section 338 of the Tariff Act of 1930—a rarely used legal provision allowing the executive branch to levy additional tariffs of up to 50% on foreign nations deemed to discriminate against U.S. commerce.

White House officials noted that Section 338 addresses trade discrimination rather than national security or economic emergencies. The move comes months after prior global emergency tariffs faced legal challenges in domestic courts, signaling Washington’s pivot toward alternate statutory authorities to maintain import duties.

Senior administration officials briefed reporters that the measure directly responds to Canadian provincial bans on U.S. alcohol, restrictions on American vehicle exports, and import quota disparities affecting U.S. dairy and cheese producers relative to third-party trading partners.

“While the administration continues to secure reciprocal trade agreements globally, Canada retaliated against efforts to protect domestic industry,” U.S. Trade Representative Jamieson Greer stated.

USMCA Impact and Carve-Outs

Significantly, the newly ordered 50% duties will apply to designated items even if they otherwise comply with the United States-Mexico-Canada Agreement (USMCA).

However, the administration confirmed key targeted exemptions:

Energy products (including oil and natural gas)
Potash and critical minerals
Fish and seafood
Goods already governed by sector-specific duties (such as existing steel and aluminum tariffs)

Administration representatives emphasized that the tariffs do not stem from recent disputes concerning drifting Canadian wildfire smoke, noting that policy options regarding environmental spillover remain under separate review.

Canadian Response and Market Reaction

Following the White House announcement, the Canadian dollar experienced a sharp decline against the U.S. dollar, falling approximately 0.4% during evening trading.

Canadian Prime Minister Mark Carney issued a statement emphasizing that Canada’s earlier counter-duties had merely matched previous U.S. trade actions. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens,” Carney stated, pointing to detailed proposals Ottawa submitted to modernize the USMCA framework.

Ontario Premier Doug Ford took a firmer stance, urging a “dollar-for-dollar” reciprocal response if the measures go into effect on August 19.

With a 30-day implementation window before the duties officially lock in, industry associations and trade groups on both sides of the border are calling for urgent bilateral negotiations to avert further supply chain disruption across North America.

Accounting

Automated Continuous Auditing: Transforming Compliance and Real-Time Financial Oversight

Published

6 days ago

July 20, 2026

Business Finance News

Transforming Compliance and Real-Time Financial Oversight

The traditional accounting paradigm—defined by periodic monthly closures and post-hoc annual audits—is rapidly giving way to continuous, automated financial oversight. As of July 2026, forward-thinking accounting practices and multinational corporate finance departments are leveraging continuous auditing systems powered by advanced machine learning models. These systems monitor operational transactions in real time, shifting audit methodologies from sample-based post-analysis to absolute, 100% transaction-level verification.

The operational advantages of continuous auditing are transformative. Standard auditing procedures historically relied on statistical sampling, which, despite rigorous methodology, inherently left gaps where anomalies or fraudulent transactions could go undetected for months. Modern continuous auditing platforms integrate directly with enterprise resource planning (ERP) databases, instantly cross-referencing purchase orders, invoices, bank feeds, and tax records. Any deviation from established control parameters or unusual transaction behavior triggers immediate flags for internal audit teams, dramatically reducing detection lag from quarters to seconds.

Beyond fraud prevention, continuous auditing fundamentally alters internal reporting and decision-making. Executive leadership no longer has to wait weeks after the close of a quarter to evaluate precise financial standing; real-time verified ledger data provides an uninterrupted view of operating margins, tax liabilities, and cash flow dynamics. This real-time visibility enables corporate controllers to adjust capital allocation strategies dynamically, mitigating liquidity constraints and capitalizing on emerging commercial opportunities far more efficiently than competitors bound to legacy reporting cycles.

However, implementing continuous auditing requires accounting professionals to acquire new analytical capabilities. The role of the auditor is evolving from manual data reconciliation toward system validation, algorithmic model governance, and strategic risk interpretation. Accounting firms and corporate finance departments must invest in continuous technical education, ensuring that audit staff possess the data engineering skills necessary to design, maintain, and evaluate complex automated compliance systems.