The Securities and Exchange Commission is already making plans in the event that the massive tax bill now moving through Congress ends up shifting the Public Company Accounting Oversight Board’s duties to the SEC.

In late May, the House passed far-reaching tax and spending legislation that included a provision transferring the PCAOB’s responsibilities to the SEC. The so-called One Big Beautiful Bill is now in the hands of the Senate, where much of it is likely to pass. However, it’s unclear whether there will be changes in the PCAOB provision, which has not been attracting as much attention as the tax and Medicaid provisions. Nevertheless, the SEC is preparing in case it inherits the PCAOB’s work.

“I guess as an initial matter, certainly, we are aware of the proposed legislation that is both in the House and the Senate as part of the budget reconciliation bill,” said SEC acting chief accountant Ryan Wolfe during Financial Executives International’s SEC and Financial Reporting Conference at the University of Southern California’s Leventhal School of Accounting. “I think from the staff perspective, where we’re assisting the Commission, it’s important that we are thinking about these issues, are monitoring and are prepared as the potential for these bills to move forward would result in the Commission having new statutory responsibilities. Specifically with respect to standard-setting and inspections, the enforcement authorities would also transfer, but we already have shared jurisdiction with respect to those activities.” 

He noted that the SEC has been hearing a great deal of feedback about it across the spectrum. 

“I would observe that one thing that I hear, I don’t want to say universally, but quite consistently, is the importance or the overall ecosystem of the three major programs that the PCAOB engages in, being standard-setting for auditors, inspections of auditors to evaluate the compliance with those standards, and similarly, the enforcement function,” said Wolfe. “And so I think that these are incredibly important objectives that will continue regardless, which is just to say, without providing any significant details, that we’re aware of it and we are working on those issues.”

On the other hand, the SEC’s Office of Chief Accountant is prepared in case the provision gets dropped from the final bill.

“But in the event that that would not go forward, the OCA’s assistance with the Commission and the oversight of the PCAOB will continue regardless,” said Wolfe. 

He also pointed to the importance of continuing standards such as the PCAOB’s recent quality control standard, QC 1000, which takes effect at the end of the year. “QC 1000 is a big project,” he said. “I know that firms are working really hard. The PCAOB is committed to engaging with those firms to work through implementation issues. I would ask any auditors watching to continue that effort and raise those issues. We as OCA staff are also willing to engage on those issues and hear what’s working and what maybe can be addressed throughout the process.”

Panel moderator Mark Kronforst, a partner at Ernst & Young, pointed out that SEC chair Paul Atkins said during a recent congressional hearing that despite a recent 15% reduction in staff at the SEC, there would still be room in the budget for the PCAOB under the legislation.

Another SEC official also acknowledged the recent reduction in the staff during a later panel discussion.

“Certainly, there has been a reduction in the federal workforce and the Commission, the SEC, has been no exception to that,” said Gaurav Hiranandani, acting deputy chief accountants at the SEC. “Many of the talented staff at the Commission have decided to retire or have sought opportunities outside of the commission. Within OCA, we have also seen some talent depart, some longstanding staff.” He noted that some of the speakers at last year’s conference are among those who left.

Financial Accounting Standards Board chair Richard Jones also spoke at the conference and discussed the progress that FASB has been making on its standard-setting. 

“A couple years ago, we comprehensively reset our agenda,” he said. “We did robust stakeholder output to really ask an open-ended question of what should be the FASB’s priority, and what you’ve seen over the last couple of years is us executing on that revised agenda. If you pull up our technical agenda today, you’ll see there are 12 projects on our technical agenda. Of those 12 projects, five of those have been voted out by our board to proceed to final standards. Five of those are in redeliberations, meaning that we’ve already issued an exposure draft, we’ve gotten great input from our stakeholders, and our board will be redeliberating to decide what direction to go forward on those standards. We voted to move forward with an exposure draft on another standard, so that’s 11 of the 12. If you follow those through, and you follow a plan of execution on those standards, it’s very reasonable that we could complete substantially all the projects on our agenda at or about the end of this year.”

U.S. accountants who advise small and midsized businesses are feeling less confident this year, according to a new survey.

The 2025 Avalara Accountants Confidence Report, produced by Avalara in conjunction with CPA Trendlines, polled 623 accounting professionals and found a shift from cautious optimism to greater pessimism, thanks to various economic pressures and policy uncertainty.

Between January and April, the net sentiment among accountants swung from a positive 19% to a negative 39%. Initially, nearly half (47%) of advisors foresaw improving conditions. But by April, only 25% held this view, with nearly two-thirds (64%) expecting worsening economic environments. The shift signifies growing apprehension across Main Street accounting firms serving as advisors on tax, payroll and compliance decisions amid a backdrop of historic tariff actions, continued inflation and unpredictable tax and trade policies. 

Accounting advisors pointed to the top issues impacting their clients, with 61% citing inflation, costs and pricing; 60% naming tariffs and trade impacts and uncertainty; 59% pinpointing unease around new tax legislation; 42% identifying ongoing labor supply and wage issues; and 37%  citing technology and AI adoption as a priority.

“Accountants are sounding an urgent alarm,” said CPA Trendlines founder Rick Telberg in a statement Wednesday. “They’re advising SMBs to conserve cash, curb discretionary expenses, and resist taking on unnecessary debt. Amid volatility in tariffs, inflation, and complex tax legislation, SMBs face serious barriers to strategic growth and operational stability.”  

According to the accountants polled, the biggest challenges facing SMBs are hiring and retaining talent (60%), keeping pace with technology (55%), and managing rising costs (52%). The added strain of tariffs has handicapped SMBs’ adaptability and agility, which is typically their key advantage over larger competitors.

Other challenges include adapting to disruption (35%), meeting evolving customer expectations (32%), and managing product costs (29%). 

Accountants feel the most confidence in their professional services sector — including doctors, lawyers and other professionals — with 60% believing this sector will thrive during a downturn. Not far behind that is the technology sector, where 57% of accountants expressed confidence driven by strong demand for digital solutions and AI that boost operational efficiency and resilience. And the oil, energy and mining sectors show 39% of respondents optimistic due to recent spikes in supply and demand for these resources.

On the other hand, farming (6%), franchising (3%), and arts and entertainment (2%) are seen as the most vulnerable sectors. These sectors depend heavily on broader economic performance, and the recent tariffs have further strained their growth and output.

Firms are encouraging clients to monitor their burn rates, cut overhead and avoid unnecessary borrowing. AI and automation are also important as survival tools amid labor shortages and pricing pressure.

“This year’s survey underscores a critical moment for the SMB business sector,” said Sona Akmakjian, head of global strategic accountant partnerships at Avalara, in a statement. “Accountants are urging businesses to fortify themselves against ongoing economic turbulence by sharpening their operational focus, adopting intelligent technology, and carefully managing resources. Clients are, more than ever, relying on the accretive business acumen and advisory skills of their trusted advisor for guidance through historic headwinds and uncertainty.”

The 2025 Accountants Confidence Report can be accessed here by using the code “avlr”.

Republican senators are considering placing a $30,000 cap on the state and local tax deduction as a compromise between current law and the more generous limit in the House’s version of President Donald Trump’s tax bill, a key GOP negotiator said.

Senator Thom Tillis, a moderate Republican involved in the talks, said Republican senators are trying to reduce the House-passed $40,000 SALT limit to at least $30,000. 

Republican senators are meeting behind closed doors Wednesday afternoon to discuss the details of the bill, which the Senate is aiming to pass later this month. 

SALT was a core issue in the House, where Republicans from high-tax states like New York, New Jersey and California threatened to block the bill without a substantial increase to the current $10,000 SALT cap. 

House Speaker Mike Johnson has warned senators to make as few changes as possible to the House’s SALT deal. But SALT isn’t a concern in the Senate, where there are no Republicans representing states where the deduction is a political priority. 

“It’s hard because we don’t have any senators from SALT states,” said Republican Senator Markwayne Mullin. “We are searching for a compromise.”

Mullin said he has already spoken on the issue with New York Republican Mike Lawler, a key proponent of the increased SALT cap.