Thought Leadership

Have there been any significant regulatory developments in the US over the last 12 months?

Yes—arguably more repositioning than expansion of regulation.

Most notably, the U.S. Securities and Exchange Commission is reshaping oversight of the profession. It has begun building an internal enforcement unit focused on audit and SOX compliance, while at the same time scaling back reliance on the Public Company Accounting Oversight Board. 

We are also seeing signals of a shift in inspection philosophy—from detailed audit inspections toward firm-level quality control reviews. At the same time, regulatory complexity overall has not decreased. Broader financial and reporting expectations continue to rise, particularly around cybersecurity, data, and governance. 

There is a significant movement by states to add another CPA license pathway.  32 have adopted a new pathway and 15 have pending legislation.  A movement towards being able to get licensed with a Bachelors and 2 years experience.  At the moment and probably for the next 2 years cpas that working with clients in multiple states will have some risk on license validity and requirements to register in multiple states.

Significant tax law changes which is common in every new Government administration.
Regulation is evolving and, in some areas, becoming more centralized and risk-focused.

Did deregulation go as far as predicted?

 No—it has been more nuanced than many expected.

There has been targeted deregulation or restructuring (e.g., potential scaling back of PCAOB influence), but not a wholesale rollback. Instead, we’re seeing:

• Rebalancing of oversight responsibilities

• Selective easing of inspection intensity

• Continued enforcement emphasis on fraud and audit quality

So while the tone has shifted, the expectation for accountability remains very high.

Has it had an impact on compliance and consultancy services?

 Yes—and in a somewhat counterintuitive way.

Even with talk of deregulation, demand for compliance and advisory services has increased, driven by:

• Ongoing regulatory complexity

• Technology transformation

• Heightened stakeholder expectations

Firms are seeing strong growth in advisory and client accounting services, with about 80% of firms reporting increased demand for advisory support. 

Additionally, automation is reshaping delivery—nearly 40% of accounting tasks are now automated, allowing firms to shift toward higher-value consulting. 

Has government spending patterns changed significantly and has this had an impact on firms who rely heavily on government contracts?

 Yes—the pattern of government spending has shifted, and the impact is being felt unevenly across firms.

Over the past 12 months, we’ve seen:

• Greater volatility tied to budget negotiations and continuing resolutions, which has delayed procurement cycles and slowed contract awards

• A reallocation of spending toward defense, infrastructure, and energy transition, while some civilian agency budgets have faced tighter scrutiny

• Increased emphasis on compliance, audit readiness, and fraud prevention tied to large federal programs

For firms that rely heavily on government contracts, the impact has been twofold:

1. Timing and revenue predictability challenges - Delays in appropriations and procurement decisions have created lumpiness in project starts and renewals, making forecasting more difficult.

2. Increased demand—but higher complexity - While some firms are experiencing slower award timing, they are also seeing:

• Increased need for compliance, grant management, and audit support

• More complex requirements tied to federal funding oversight

So the net effect is not a simple increase or decrease—it’s a shift toward more complex, compliance-driven work with less predictability in timing.

Firms with strong government practices are still seeing opportunity, but success increasingly depends on navigating funding uncertainty and delivering deeper specialization in regulatory and compliance services.

Has ESG become less of a focus?

 ESG has become more polarized.  Political and regulatory shifts have created uncertainty and uneven momentum.  In the US states also have their own legislation regarding ESG as it is not just governed at the Federal level.  So there is some complexity to this.  ESG services are still here – and for the largest companies is driven by investor demand for transparency, not government regs.  But definitely slowed momentum on reporting since the Federal government has deprioritized it and in some cases refuted the science behind it.  Other countries are definitely outpacing the US in this area.

How has the current conflict in the Middle East affected client confidence? Has it demanded any change within your firm as to how you deliver services?

 The impact is indirect but meaningful.  Clients are responding to global instability with more cautious investment decisions, increased focus on liquidity and risk management and heightened demand for scenario planning.

For firms this has reinforced the need to deliver real-time insights and advisory and support for clients on risk, supply chain, and cash flow planning.  Reduced international travel for employees.

How would you describe the health of the accounting industry in the US  in terms of customer demand, fee pressure, and staff recruitment and retention?

 I would say strong demand, constrained capacity.

Demand – strong across audit, tax and especially advisory.  Some expansion into cybersecurity services and AI governance.

Fee Pressure – the chaos of firms selling to PE have caused fee pressure due to their self preservation of hitting numbers.  Also firms are reducing pricing due to use of AI and not all of pricing on value.  There is continued pressure in commoditized compliance services – tax for example – there are AI infused tools that make the return itself commoditized but the advisory around it is what has value with customers.

Talent – Profession continues to face pipeline challenges as baby boomers continue to retire and leave the profession in record numbers for the next 4 years.  Hence the new pathway mentioned earlier.  A major focus on attracting and retaining talent.  Firms are hiring non cpas at a good rate – think advisory, technologists, HR professionals etc…. Partnering with AI as a co-worker will ease this challenge somewhat but time will tell how it all plays out…   Unemployment rate is still very low for accountants signaling tight supply.  Due to this there is a major shift to firms of all sizes – not just the largest – building global teams in India, PH and other countries.

Are there any services areas where demand has grown over the last 12 months?

CAS or CAAS – Client Accounting and Advisory Services remains the fastest growing niche for firms in the US. 

Also – cybersecurity and risk assurance, Technology and AI enabled advisory.

The profession is shifting from compliance to strategic, insight-driven services, enabled by data and automation and AI.

Has there been any significant consolidation or merger activity in the accounting profession?

 Pace of M&A continues to be strong – typically over 100 in a year.  expected to continue but what has been different is the diversity of the deals – mega mergers (cbiz/marcum and baker tilly /moss), traditional firm acquisitions, PE platforms (ascent, crete), PE minority interest in firms, Wealth management companies buying cpa firms,  ESOPS (employee stock ownership) … We have the most diverse structures of firms in the US than in our entire history.  PE firms will most likely turn into IPOs and public companies like CBIZ as that is the only way out of a PE owned structure.

The strategic imperative for Firms to keep an external view and evolve their own strategies has never been more important. 

What are your expectations for the next 12 months - are there any potentially significant developments in the pipeline?

Technology acceleration with AI adoption.

Regulatory evolution – continued shifts

Advisory dominance – firms moving toward higher margin advisory services as compliance is more automated

Continued talent disruption.  Pipeline challenges and more firms adopting global strategies.