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Trump signs executive action to create sovereign wealth fund

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President Donald Trump signed an executive action he said would direct officials to create a sovereign wealth fund for the U.S., following through on an idea he floated during the presidential campaign.

“We have tremendous potential,” Trump told reporters in the Oval Office on Monday as he announced the move. The president said the action would charge Treasury Secretary Scott Bessent and Howard Lutnick, the nominee for Commerce secretary, with spearheading the effort.

Bessent, who joined Trump at the Oval Office, said the fund would be created in the next 12 months, calling it an issue “of great strategic importance.”

Trump suggested the fund could be used to facilitate the sale of TikTok, which is currently operating in the U.S. thanks to an extension he signed prolonging the deadline for a forced sale or shutdown. 

Lutnick said the U.S. government could leverage its size and scale given the business it does with companies, citing drug makers as an example. 

“If we are going to buy two billion COVID vaccines, maybe we should have some warrants and some equity in these companies,” he said.ot supported.

The action calls for officials to submit a plan to Trump within 90 days, including recommendations for funding, investment strategies, fund structure and governance. And it asks for an evaluation of the legal considerations for setting up and running a fund, including whether legislation is required.

Trump advisors have previously discussed plans to use the U.S. International Development Finance Corp. to partner with major institutional players to leverage U.S. economic powers.

Among those driving the conversation about using the DFC both more like a sovereign fund and as a tool to radically change America’s approach to foreign aid are Elon Musk and Stephen Feinberg, the billionaire co-founder of Cerberus Capital Management, who Trump has nominated as deputy defense secretary, according to people familiar who were close to the president’s transition team before taking office.

Trump on Friday said he was nominating Ben Black — the son of Apollo Global Management co-founder Leon Black — to head the DFC.

Trump floated the idea of a sovereign wealth fund during an address at the Economic Club of New York during the campaign in September, where he proposed funneling money from tariffs into a wealth fund that could invest in manufacturing hubs, defense and medical research.

“We will create America’s own sovereign wealth fund to invest in great national endeavors for the benefit of all the American people,” Trump said at the time and suggested that the Wall Street and corporate leaders at that event could have a role to play, helping to “advise and recommend investments.”

Sovereign wealth funds generally exist in countries that either have large foreign exchange reserves, such as China, or revenue from the sale of oil or other commodities, like Norway and Saudi Arabia. The money is then invested in everything from stocks and bonds to infrastructure and technology. Among the biggest are Norway’s $1.8 trillion Norges Bank Investment Management, the $1.3 trillion China Investment Corp. and the $1.1 trillion Abu Dhabi Investment Authority.

“We’re going to monetize the asset side of the U.S. balance sheet for the American people,” Bessent said. “It’ll be a combination of liquid assets, assets we have in this country as we work to bring them out for the American people.”

Former President Joe Biden had also been crafting a proposal to create a fund that would invest in national security interests, including technology, energy and critical links in the supply chain.

There are 20 states that have sovereign wealth funds, generally funded by commodities or land, that might serve as models. The largest is the Alaska Permanent Fund, started in 1976, which currently manages about $82 billion. A more recent example is North Dakota’s $11.5 billion Legacy Fund, created in 2010.

North Dakota deposits 30% of its oil and gas tax revenue into the fund monthly. During any two-year budget cycle, the state can access 5% of the money to help finance projects and provide tax relief.

The fund helped make it possible for North Dakota to announce a plan late last month to phase out property taxes for homeowners over the next decade.

Trump on Monday delayed plans to hit Mexico and Canada with tariffs, citing measures the two countries were taking to crack down on the flow of fentanyl and illegal migration.

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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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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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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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