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What’s ahead in CPA practice operation under Trump 2.0?

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New presidential administrations typically mean a lot of questions and uncertainty. As Trump takes office, people wonder if the policy changes he promised will be realized. What will the tax implications be for CPA clients and practice owners? Where are interest rates headed? What about inflation?

This article will explore those questions and shed light on how the new administration could affect CPA practices and their clients.

What can Trump do — and when?

During the campaign, Trump took to calling himself “Tariff Man” for his promise to institute wide-ranging tariffs on goods and services originating outside the United States. While the Constitution gives tariff authority to Congress, in the years since the Great Depression of the 1930s, legislators have given much of that authority to presidents. As a result, the president now has wide leeway over if and when to levy tariffs.

Other policy promises (especially tax reductions) may not be an easy delivery for the new president since they will require passage by a Congress with only a narrow Republican majority. 

Tax outlook

Not long ago, advisors were warning of the problems that would come when the provisions of the 2017 Tax Cut and Jobs Act sunset in 2025. Now, with Donald Trump elected to a second term, it seems likely that many of those provisions will not expire, some may be reversed, and some may become permanent. 

One of Trump’s frequently stated aims is restoring the 100% bonus depreciation provision, which would allow businesses to deduct 100% of qualifying big-ticket acquisitions in the year of purchase, rather than depreciating them over time.

Similarly, Trump is pushing to reverse the TCJA requirement that companies amortize their research and development costs rather than deduct them as expenses in the year incurred. The amortization requirement was a last-minute addition to the act, put in place to help pay for tax cuts created by the legislation; its reversal has support from both sides of the aisle. Also on the table is the state and local tax deduction cap of $10,000. Trump and many legislators want to see the SALT cap raised or eliminated, which would allow more taxpayers to itemize their deductions.

Although Republicans hold majorities in both houses and control the White House, they will not have free rein to cut taxes at will. Their slim majority means if even a few fiscally conservative Republicans — those strongly committed to deficit reduction — hold out against tax breaks, Trump may not succeed in getting his entire tax-cutting agenda passed.

Implications for CPA practices

A Trump presidency will likely usher in a more lenient approach toward antitrust issues, potentially creating an uptick in merger and acquisition activity. The CPA profession has been in a period of M&A growth, so this trend should continue on the upswing.

Practice owners looking to sell are keeping an eye on potential changes in the capital gains rate, which Trump has hinted he will try to lower. They are also focused on interest rates. While the Federal Reserve Board is independent of the government, policies pushed by any administration and enacted by Congress can significantly affect the economy, which can impact the indicators the Fed uses to make its rate decisions.

What about interest rates?

In December, members of the Fed released their median expectation for the coming year. In this nonbinding poll of members, they predicted overall cuts of 50 basis points in 2025. The prime rate, therefore, is likely to decline, but it may be some time before lower rates trickle down to the ordinary retail borrower.

Many commercial lenders do not base their loan rates on the prime rate, however, choosing instead to peg their loans against the yields of U.S. Treasury securities or the Secured Overnight Financing Rate. While the prime rate and the 10-year Treasury yield may run in the same general direction, Treasury yields are driven by many factors beyond those that determine the prime rate. Yields on 10-year Treasury securities tend to rise when confidence in the economy is strong and fall in times of geopolitical turmoil, when demand for these safe investments goes up. 

Successfully navigating the new environment

Amid the uncertainties ahead, it’s tempting to take a wait-and-see attitude before making any growth decisions, but that approach could lead to missed opportunities. There’s no bad time to make a good deal, so if a purchase or sale makes financial sense, it’s worth investigating it with a team of advisors, including a trusted lending partner.

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Accounting

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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