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Whitehouse cancels Biden AI order from 2023

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The Whitehouse has cancelled the October 2023 executive order from the previous administration on AI regulation and oversight as one of many such cancellations now that the new administration is in power. 

The executive order generally called for the development of standards and best practices to address various aspects of AI risk, such as for detecting AI-generated content and authenticating official communications. It also directed government agencies to study things such as how AI could impact the labor market and how agencies collect and use commercially available information. It also emphasizes the development of new technologies to protect privacy rights and bolster cybersecurity, as well as training on AI discrimination, and the release of guidance on how different agencies should be using AI. 

The AP noted that many of the items in the original executive order have been fulfilled already—such as numerous studies on things like cybersecurity risks and effects on education, workplaces and public benefits—and so there is not that much to repeal in the first place. 

One key provision that is now gone, however, is the requirement that tech companies building the most powerful AI models share details with the government about the workings of those systems before they are unleashed to the public. Opponents of the executive order had long said it would reveal trade secrets and hamstring US tech companies. 

When the EO was first signed, Alex Hangerup, co-founder and CEO of payment automation and insights solutions provider Vic.ai, said the executive order was a good first step, as its scope was ambitious and comprehensive, though expressed concerns that the order has a lot of moving parts and may be difficult to maintain. Asked about his feelings regarding the repeal, he did not seem especially troubled, noting that players in the AI space should be relying on a collaborative framework versus a top-down bureaucratic approach anyway. 

“AI has the potential to be one of the most transformative forces in modern finance, and fostering innovation in this space is critical. The previous Executive Order was a step toward structured oversight, but any AI regulation must strike a balance—protecting against risk while ensuring we don’t stifle progress. The decision to rescind the order underscores the importance of a more adaptive, market-driven approach to AI governance. Rather than relying on rigid top-down mandates, we need a collaborative framework that evolves with the technology. Responsible AI development doesn’t mean excessive bureaucracy; it means accountability, transparency, and engagement with the businesses actually building these solutions. At Vic.ai, we believe the future of AI in accounting—and across industries—depends on fostering innovation while ensuring AI remains a force for accuracy, efficiency, and trust,” he said. 

Pascal Finette, co-founder and CEO of technology consulting firm “be Radical,” at the time said the order seemed to be crafted by people who didn’t really understand AI much in the first place, and many of its provisions seemed more motivated by fear and worry, pointing to language that infers AI is a weapon which must be controlled. Overall, at the time, he said the order felt far reaching and somewhat reactionary given its focus on foundational models, and said regulation would be much easier applied at the application level. Overall, though, he wasn’t very concerned there would be any direct impacts on the accounting solutions space, as most vendors don’t create their own models but instead rely on those created by other companies that may or may not fall under the executive order. 

When asked what he thought about the repeal, he repeated that many of the original provisions didn’t seem that thought out and so it was good some of the more ill-conceived aspects will be cancelled, though it leaves open questions about sustainability and responsibility. 

“I’d say (with probably anything Trump says or does), it’s too early to tell. On one hand, I think it’s good and useful that we removed this somewhat ill-advised policy; on the other hand, there are huge question marks around the responsible and long-term sustainability of AI and its impact on society and businesses,” said Finette.

Aaron Harris, chief technology officer at practice management solutions provider Sage, said at the time the executive order was signed that it was an important step forward, given the rapid proliferation of AI technologies. He felt at the time that the order sets the appropriate tone for AI development, as it emphasizes safe and responsible uses. Today, he said there is need to simultaneously nurture and support AI innovation while recognizing SMEs need to feel confident they’re working with technology partners who adhere to safe, ethical AI development practices. Harris added that the Trump administration’s decision to cancel the executive order doesn’t change this fundamental relationship.  

“AI remains one of the greatest opportunities of our time. And as AI evolves, it’s expected that governmental policies and regulations around AI will as well. At Sage, our stance remains that AI practices must be ethical and responsible. We are committed to building AI technology for the future that is safe, transparent and trustworthy. As the regulatory landscape evolves, our mission remains clear: to innovate responsibly and empower businesses without compromising ethical standards. In the U.S., I am optimistic that the current administration will continue to create opportunities to evolve and accelerate AI innovation — improving lives and driving economic growth — while staying true to our duty of upholding the highest standards of ethics and trust,” said Harris.

Amy Matsuo, regulatory insights leader at KPMG, noted in a statement that this might lead to increasing divergence between state and federal regulators. She also pointed out that while there is nothing to replace the executive order, companies should still expect some regulatory focus regarding their AI ambitions.  

“As expected, the new Administration has repealed the previous Administration’s 2023 AI Executive Order, but did not immediately initiate a series of net-new AI actions. To drive US leadership in AI, the new Administration is reportedly looking to expand data center and energy capacity and encourage innovative model development and application. Companies should expect regulatory focus on critical security, national security and sensitive data. However, increased divergence with state and global AI- and privacy-related regulatory activity will increase (with a flurry of 2025 state bills already in motion), resulting in a continued regulatory patchwork as well as likely expanded state AG actions

The news comes around the same time that the administration also announced a $500 billion investment in AI technology.

“The $500 billion investment is pretty nuts—I’m not sure if you saw the comparisons, but it’s a multiple of the cost of the whole Apollo program (in today’s dollars),” said Finette. 

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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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Accounting

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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