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Trump tax law is surprise boon for affordable housing creation

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1 year ago

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A set of provisions tucked into President Donald Trump’s new tax-and-spending law has real estate developers and affordable housing proponents cheering — though some view it as a bittersweet victory.

The law makes significant changes to the Low-Income Housing Tax Credit, the New Markets Tax Credit and Opportunity Zones, three tax-based community development programs that housing groups and private sector investors broadly favor. The revamp is expected to spur construction of new apartment buildings and renovation of older ones, with housing analysts saying they could create as many as 1.2 million more affordable units over the next ten years than they would have if the programs had remained the same. 

“We think of it as the single largest increase in affordable rental housing resources in at least 25 years,” said Peter Lawrence, the chief public policy officer at Novogradac, a consulting firm with a focus on real estate. 

The new law increases some tax benefits investors can get for putting capital into affordable housing projects through the Low-Income Housing program. It also makes permanent other credits through the New Markets program, adding clarity for investors and developers seeking to make long-term plans. And it sets stricter standards for Opportunity Zones, in a move to prevent misuse and ensure that private investment dollars reach the low-income communities for which they were intended.

Together, those measures are poised to incentivize more construction of affordable units in targeted neighborhoods and, in turn, ease some of the housing price pressure that has burdened an increasingly broad swathe of Americans.

That makes the provisions something of an anomaly in a law that has become known for cuts to programs for the poor paired with giveaways to the wealthiest Americans. An analysis by economists at the University of Pennsylvania’s Wharton School says the law will leave households in low-income and some middle-income categories “worse off” overall. 

“It’s the gives and the takes,” said Jeff Monge, managing partner of Monge Capital, a real estate investment advisory firm specializing in public-private partnerships. “The gives are these tax credit opportunities for investors to divert or make their investments that will eventually create prosperity for the communities that they invest in. But then you’ve got to pay for it. How are you paying for it? It ends up being a rollback on the very same communities that you’re trying to help on the other side.”

Affordability crisis

The changes come during a housing affordability crisis that experts say is the worst in recent memory. A June report by Harvard University’s Joint Center for Housing Studies found a record high number of renters — almost 23 million — are considered “cost-burdened,” meaning more than 30% of their incomes go to paying for housing and utilities. The crisis is being driven in large part by a lack of housing supply. The National Low Income Housing Coalition estimates a shortage of roughly 7 million affordable housing units across the US. 

While affordable housing measures are often thought of as a priority of the Democratic Party, these measures were palatable to Republicans in part due to how they were structured: They are tax breaks rather than funding allocations, and they lay responsibility for maintaining the quality of affordable housing units on the private sector. 

Under the law, investors cannot get their full tax credits or can have their value clawed back if the units they invested in fall into disrepair or are converted to market-rate units over a 15-year period. The law requires the units to remain affordable for another 15 years after that period ends, but that latter period is harder for the government to enforce.

The provision to make the New Markets credits permanent was added in the Senate, where Republicans on the Finance Committee, including Idaho Senator Mike Crapo and Montana Senator Steve Daines, shepherded them through. 

“This program has been supported by both parties for a long time,” said Bob Rapoza, spokesman for the New Markets Tax Credit Coalition, a trade group representing community development funds that use the tax credit. 

Together, the changes to the programs mirror legislation that housing advocates have been trying to get Congress to pass for a decade.

The new law increases the size of tax credits awarded under the Low-Income Housing Tax Credit and decreases the requirements for public funding by states and municipalities as a proportion of the overall funding package for an affordable housing development. This makes it easier for states, cities and other government entities to fund a greater number of development projects simultaneously while developers use more private financing sources, which are often cheaper than relying on the municipal bond issues. 

Meanwhile, an expanded pool of investors will be able to use the now-permanent New Markets Tax Credit. Community development organizations can tap into tax credits in the program to fund loans not only for housing development but also for new businesses, manufacturing facilities and cultural spaces. 

Rapoza’s group estimates that over 10 years the New Markets program alone could fund around 4,000 projects, add around 17,000 affordable housing units and create as many as 435,000 new jobs. Novogradac’s Lawrence said these projections sounded reasonable. 

Opportunity Zones

The tax law also made permanent Opportunity Zones, a program that gives investors tax breaks for putting money into projects in low-income areas that was created in 2017 as part of Trump’s first tax-cut package. Opportunity Zones have drawn some criticism for failing to get private capital to the places where it is most needed and accelerating gentrification forces that push poorer people from their neighborhoods. That’s because the program originally let governors designate areas that were near low-income census tracts, but not inside of them, as qualifying for the tax breaks. And it did not require any tracking or reporting on the program’s impact. 

Novogradac’s Lawrence said that the tweaks to the standards for Opportunity Zones could help make the program’s investments more meaningful and also provide evidence of its worth, helping attract additional investors. A similar dynamic could occur in the New Markets program, according to Monge.

Still, the experts noted potential roadblocks for the programs to generate the most possible benefit. Developers using the Low-Income Housing credit often rely in part on other public funding sources, including Community Development Block Grants from the Department of Housing and Urban Development. The Trump administration has sought to end that grant program. 

It has also proposed cutting nearly all of the budget for a Treasury Department office, the Community Development Financial Institutions Fund, that oversees the administration of the New Markets credit. 

Monge said he applauded the changes, but hoped they did not leave investors too much room to misbehave. 

“We don’t have a history of investors looking at doing good and well. There’s a history of doing well,” he said.

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

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1 week ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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2 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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2 weeks ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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