Connect with us

Accounting

The $10B battle for Congress: Races to watch

Published

on

The battle for control of Congress has topped $10 billion as the two parties vie for outsized influence over taxes, spending and the implementation of the next president’s agenda.

It’s a staggering and potentially historic sum, based on OpenSecrets data, considering that only about a 10th of congressional races are actually competitive. Yet, it outpaces spending on the hard-fought presidential election. 

The whopping figure reflects the colossal stakes. Control of Congress is pivotal to economic policy. The expiration next year of the 2017 tax law puts trillions of dollars in tax provisions in play. The Senate can block the appointment of key financial-industry regulators. Legislative battles are shaping up over prescription drug prices and regulation of the crypto industry, energy, artificial intelligence and social media.

capitol-runner.jpg
A runner stands near the U.S. Capitol in Washington.

Oliver Contreras/Bloomberg

Republicans are currently favored to gain the Senate majority based on a favorable map, while minority Democrats have at least an even chance to take control of the House, potentially reversing both chambers and continuing a divided government. Many races remain tight and the outcome may not be known for days after the Nov. 5 election. 

Here are some key races to watch:

The Senate: Montana

Democrats’ hopes in the Senate largely hinge on Montana, where three-term incumbent Jon Tester has trailed Republican Tim Sheehy, a political newcomer, businessman and former Navy Seal. That race is set to break records with about $250 expected to be spent per resident of the sparsely populated state on advertising alone, according to AdImpact data.

Tester, a third-generation farmer, has long relied on his folksy charm and a reputation for delivering resources to his state to overcome its Republican tilt. This year, Democrats hope Tester’s support for abortion rights will help him and other vulnerable candidates hold on.

But former President Donald Trump is expected to win in Montana by double digits, so Tester will need many Montanans to split their ticket between the parties, a practice that has become less common as the electorate has become more polarized. 

Ohio

Even if Tester pulls out a win, Democrats would likely need to win every other tossup race, including Ohio, where Sherrod Brown is trying to defend his seat against car dealer Bernie Moreno. Advertising alone has cost more than $530 million in that race, according to AdImpact.

As in Montana, Trump is expected to win Ohio easily, which could give Moreno a boost despite Brown’s popularity with many White working-class voters who form the former president’s base.

Democrats also need to keep seats in the presidential “Blue Wall” battlegrounds of Pennsylvania, Wisconsin and Michigan — all states where races have tightened — as well as in Arizona and Nevada, where the party’s Senate candidates have held larger leads in polls.

Wild cards

If Tester loses, Democrats would need an upset win somewhere else. That would likely require Colin Allred to defeat Senator Ted Cruz in Texas or Debbie Mucarsel-Powell to beat Senator Rick Scott in Florida. A wild card race in Nebraska, where independent union leader Dan Osborn has been running neck-and-neck with incumbent Republican Deb Fischer, could also scramble the outcome on election night.

Democrats’ best-case scenario is likely a 50-50 Senate, with control of the chamber depending on the outcome of the presidential race, because the vice president breaks ties.

Republicans, however, could win as many as 55 seats if they sweep the tossup races. A larger majority would widen the aperture for GOP tax cuts and other legislation if they control both chambers of Congress and the White House. In 2017, the party’s thin majority led to the defeat of efforts to repeal the Affordable Care Act via a thumb down from then-Senator John McCain. 

The GOP has hoped that popular former Governor Larry Hogan would pull off an against-the-grain win in heavily Democratic Maryland, but Prince George’s County Executive Angela Alsobrooks has had double-digit leads in recent polls despite significant super political action committee spending on Hogan’s behalf, including $10 million from billionaire Ken Griffin.

The House: New York and California

Democrats’ chances are significantly better in the House, where Republicans now hold only a slim majority and must defend many areas won by President Joe Biden in 2020, including in heavily Democratic states like New York and California. The party needs a net gain of just four seats to hand the speaker’s gavel to Hakeem Jeffries of New York, and with it the power over the federal purse and House investigative subpoenas.

In addition to 10 New York and California seats in play, Democrats have targeted Heartland districts in Nebraska and Iowa now held by Republicans, as well as battlegrounds in New Jersey and Arizona.A Des Moines Register poll published Sunday showed Democratic challengers in Iowa leading incumbent Republican Representative Mariannette Miller-Meeks by 16 percentage points and incumbent Republican Representative Zach Nunn by 7 points among likely voters. The poll showed a surge for Democrats among women and disproportionate enthusiasm among them for voting in a state that imposed a ban on abortions after about six weeks with limited exceptions.In Louisiana, a newly reconfigured, majority-Black district favors a Democrat succeeding GOP Representative Garret Graves, who decided not to seek reelection. In Alabama, another redrawn district, similarly designed to give Black voters more voting representation, could bring another seat shift toward Democrats.

Meanwhile, Speaker Mike Johnson of Louisiana — who unexpectedly ascended to the job late last year after the tumultuous ouster of his predecessor — is scrambling to save his gavel. He has aggressively stumped and raised money nationwide, including a string of events in key New York districts that helped the GOP flip the House two years ago.

Republicans have sought to capitalize on voter discontent on issues like inflation and immigration, targeting open-race seats of retiring Democrats in Michigan, and incumbents in states including New Mexico and Pennsylvania as well as those in districts won by Trump in 2020, like Jared Golden in Maine and Mary Peltola in Alaska.

The first results on election night could come from Virginia, where polls close at 7 p.m. New York time, with each party having a pickup opportunity. Republicans hope to take the central Virginia seat being vacated by Democrat Abigail Spanberger, who is running for governor next year, while Democrats try to defeat incumbent Republican Jen Kiggans in a coastal district.

The nonpartisan Cook Political Report rates 208 seats as leaning, likely or solidly Republican compared to 205 for the Democrats, with 22 tossup seats; 218 are needed to ensure a majority.

Continue Reading

Accounting

IAASB tweaks standards on working with outside experts

Published

on

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.  

Continue Reading

Accounting

Tariffs will hit low-income Americans harder than richest, report says

Published

on

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.

Continue Reading

Accounting

At Schellman, AI reshapes a firm’s staffing needs

Published

on

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.”

Continue Reading

Trending