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Accountancy Slice
USA
2nd March 2026
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THE HOT STORY

Tax alignment emerges as key driver of procurement value

Procurement is evolving from a transactional function into a strategic driver of enterprise value, with tighter alignment between tax and business strategy playing a critical role, according to an analysis by EY. As companies navigate supply chain volatility, geopolitical risks, cost pressures and rising ESG demands, leading organizations are integrating tax considerations into procurement design from the outset. EY argues that aligning tax, finance and business stakeholders enables companies to build centralized or hybrid procurement models that are more efficient, compliant and resilient. The report outlines several operating models - from decentralized to fully centralized structures - noting that more integrated frameworks can enhance purchasing leverage, improve supplier relationships, strengthen risk management and reduce total cost of ownership. However, procurement transformations must account for tax implications, including transfer pricing, VAT and customs treatment, corporate tax exposure and economic substance requirements.

TAX SOFTWARE

How to Optimize Your High-Volume Practice

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By attending this course, you will be able to:
  • Identify the benefits of using ProConnect Tax
  • Recognize tools in ProConnect Tax to help manage firm workflow and increase productivity, especially for high-volume firms
  • Understand how to import QuickBooks data into a tax return
  • Establish familiarity with features especially valuable for larger firms such as tickmarks for review, batch e-filing, automatic apportionment for business returns, partnership special allocations, robust user notes with user, date and time stamping, and more  
Register for webinar here

 

TAX

New IRS rules shake private colleges

Private colleges and universities focusing on racial minorities are preparing for new IRS regulations regarding their tax-exempt status amid heightened scrutiny from President Donald Trump. The administration plans to release guidance within the year, addressing what it perceives as illegal diversity, equity, and inclusion (DEI) practices. Institutions have been working to navigate the fine line between legal and illegal DEI initiatives. The IRS said it will consider "the application of fundamental public policy against racial discrimination" in determining eligibility for tax-exempt status. The guidance follows a year of criticism directed at private universities, including Harvard, by Trump.

California billionaire tax campaign seeks 875,000 signatures

Supporters of a proposed California billionaire tax are racing to gather 875,000 signatures to place the measure on the November ballot, launching an expensive and politically charged campaign that has already divided Democrats and alarmed the state’s wealthiest residents. Backed by the Service Employees International Union–United Healthcare Workers West (SEIU-UHW), the proposal would impose a one-time 5% wealth tax on California residents with net worth exceeding $1bn. Organizers estimate it could raise $100bn over five years, largely to offset anticipated federal healthcare funding cuts, with additional funds directed toward education and food assistance. The union has committed $25m to initial efforts, deploying thousands of volunteers and paid petition circulators. While internal polling cited by supporters suggests majority backing, independent surveys show narrower margins. Even if it qualifies for the ballot, the measure faces significant opposition, including from Governor Gavin Newsom, who has warned it could drive wealthy residents out of the state.

Illinois lawmakers stall property tax plan aimed at keeping Bears in-state

Illinois lawmakers are advancing a bill designed to keep the Chicago Bears from relocating out of state, but divisions within the Chicago delegation have slowed its progress. A House committee voted 13-7 to move forward with House Bill 910, known as the “mega project” bill, which would allow large developers to negotiate property tax arrangements with local governments instead of paying taxes based solely on rising property assessments during construction. The measure could help the Bears lock in property tax costs for a proposed domed stadium in Arlington Heights or elsewhere in Illinois. However, Chicago Democrats - including bill sponsor Rep. Kam Buckner  have threatened to withdraw support unless the legislation includes financial concessions for the city if the team relocates to the suburbs. Chicago’s chief financial officer has publicly opposed the bill, arguing the tax incentives could undermine the city’s own stadium proposals. Without unified support from Chicago lawmakers, House leaders adjourned without bringing the bill to a full vote, delaying action until at least mid-March. 

INDUSTRY

FASB proposes updates to attestation standards, adds sustainability guidance

AICPA’s Auditing Standards Board (ASB) has released an exposure draft proposing updates to attestation standards to reflect evolving assurance practices, including new guidance related to sustainability reporting. Open for public comment through June 30th, the proposal aims to modernize baseline attestation standards as practitioners increasingly provide assurance beyond traditional financial statement audits. Emerging areas include sustainability, digital assets, cybersecurity, governance and related controls. The draft includes two key components: revisions to existing attestation standards and the introduction of two new AT-C sections specifically addressing engagements to report on sustainability information. If adopted following the comment period and further ASB deliberations, the updated standards would take effect for engagements beginning on or after June 15th 2029.

Count on change: Accounting's bright future

The accounting profession faces a critical moment, with a significant decline in new entrants due to outdated perceptions and rigorous certification paths. Richard Lynch, CPA and managing principal at Sikich, emphasizes that the profession must adapt to modern demands, saying: "The path forward is clearer than it has been in decades." Recent pro-accounting legislation in states like California and New York aims to streamline CPA licensure, providing a timely opportunity to reshape the industry's image. As firms embrace technology and innovation, the profession can attract new talent by showcasing diverse career paths and the strategic role of accountants. To thrive, accountants must actively communicate the value of their work and invest in technological advancements that enhance efficiency and impact.

Strategies aim to increase Black student participation in accounting

Black individuals remain underrepresented in accounting, with only 6–7% of graduates and 4–5% of new CPA hires identifying as Black despite representing 12.7% of the U.S. population. Writing in the CPA Journal, Anish Menon, Yuebing Liu and Clyde McNeil outline strategies to increase interest using the Theory of Planned Behavior, focusing on attitudes, social influences and perceived barriers. Recommendations include improving awareness of accounting careers, highlighting technology and social impact, providing role models and mentorship, engaging families and schools, and expanding outreach in Black communities. Financial barriers, particularly the 150-hour CPA requirement, are identified as significant deterrents. The authors conclude that coordinated efforts across education, profession and community networks are needed to improve representation and access.

FIRMS

KPMG appoints new U.S. legal head as Arizona model faces scrutiny

KPMG has named longtime tax and M&A leader Christian Athanasoulas as head of its US Legal Services division, tasking him with expanding and integrating the firm’s legal offerings with its broader advisory business amid growing regulatory and industry pushback. Mr. Athanasoulas, a 25-year KPMG veteran based in Boston, becomes the first to lead the US legal unit after KPMG gained approval last year to operate a law firm in Arizona — the first Big Four firm to do so under the state’s alternative business structure (ABS) rules allowing non-lawyer ownership. KPMG says the move responds to client demand for more “holistic” services that combine legal, tax and advisory support, particularly in areas such as post-merger contract cleanup and global entity restructuring. However, KPMG’s expansion comes as Arizona regulators consider tightening rules on ABS firms, amid concerns they are using Arizona licensure to operate nationally without sufficiently serving local clients. Mr. Athanasoulas said KPMG is committed to complying with Arizona’s regulatory framework and argued that serving national and international clients ultimately benefits Arizona by fostering innovation and expanded service capabilities.

ECONOMY

U.S. wholesale inflation rose 0.5% in January

U.S. wholesale inflation accelerated in January, with the producer-price index (PPI) rising 0.5% for the month, above economists’ expectations of a 0.3% increase. The gain followed a 0.4% rise in December. On a year-over-year basis, wholesale prices were up 2.9%. The PPI measures prices businesses receive for goods and services, excluding retail markups, and tends to be more volatile than the consumer-price index. Investors closely monitor the data because components of the PPI feed into the Federal Reserve’s preferred inflation gauge, the personal-consumption expenditures (PCE) index. The stronger-than-expected reading may influence forecasts for the upcoming January PCE report due in mid-March.

Construction spending increased 0.3% in December, matching forecasts

U.S. construction spending increased 0.3% in December, in line with economists’ expectations, as a rebound in single-family homebuilding and continued strength in home renovations offset weakness in other areas, according to Commerce Department data. The gain followed a revised 0.2% decline in November. On a year-over-year basis, construction spending was down 0.4%. The report had been delayed due to last year’s government shutdown. Private construction spending rose 0.5%, driven by a 1.5% increase in residential investment. Spending on new single-family homes rebounded 1.5%, while multi-family construction edged up 0.1%. Renovation activity also continued to grow. However, overall homebuilding remains subdued due to high mortgage rates, elevated materials costs and labor shortages, and residential investment has declined for four consecutive quarters.

Chicago business activity accelerated again in February

Chicago-area business activity unexpectedly strengthened for a second straight month in February, according to MNI Indicators. The Chicago Business Barometer rose to 57.7 in February from 54.0 in January, beating economists’ expectations for a pullback to 52.5. Readings above 50 indicate expansion. The gain was driven by a 9-point surge in the production index, which reached its highest level since November 2023. The employment index jumped 7.7 points, returning to growth territory for the first time since November 2023 and hitting its strongest level since October 2021. New orders also improved, climbing 2.9 points to their highest level since January 2022, while supplier deliveries rose modestly. Meanwhile, the prices paid index increased 2.4 points, partially reversing January’s sharp decline.

REGULATORY

SEC adopts final rules for holding foreign insiders accountable

The Securities and Exchange Commission has adopted final rule and form amendments to reflect the requirements of the recently enacted Holding Foreign Insiders Accountable Act (HFIA), which will increase transparency into the holdings and transactions of directors and officers of foreign private issuers (FPIs). Directors and officers of FPIs with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 (Exchange Act) must begin disclosing their holdings and transactions in the FPI’s equity securities on March 18, 2026, the effective date of the HFIA Act. 

LEGAL

Delaware Supreme Court upholds corporate law overhaul

Delaware's top court has upheld a 2025 law that overhauled the state's widely used corporate code to limit lawsuits against powerful business leaders.  Under the law, known as Senate Bill 21, if a deal is approved by a board committee that has a majority of independent directors or if it is approved by a vote by public shareholders, investors cannot challenge it in court. Previously, both steps were required and the board committee had to be entirely made up of independent directors. Governor Matt Meyer said in a statement: “This past year was a period of monumental growth for Delaware, with a sharp increase in corporate incorporations in 2025, both in absolute terms and relative to other states. In short, SB-21 is working, and I’m glad it will continue to be the law.”  

SUSTAINABILITY

New standards for sustainability reporting

The American Institute of CPAs' Auditing Standards Board has proposed updates to its attestation standards focusing on sustainability and emerging assurance issues. The proposed Statement on Standards for Attestation Engagements includes two specific sections: Proposed AT-C section 325 for reporting on an examination of sustainability information and Proposed AT-C section 330 for a review of sustainability information. These standards are set to take effect on or after June 15, 2029, with early implementation allowed. The comment period for stakeholders ends on June 30, 2026. The AICPA's attestation standards were last updated in December 2022, reflecting the growing demand for guidance on environmental, social, and governance issues.

INTERNATIONAL

Swiss bank could lose access to U.S. financial system

The U.S. Treasury has threatened to sever Swiss private bank MBaer's access to the U.S. financial system on the grounds it had breached sanctions against Iran, Russia and Venezuela. "MBaer has funneled over a hundred million dollars through the U.S. financial system on behalf of illicit actors tied to Iran and Russia," U.S. Treasury Secretary Scott Bessent said. "Banks should be on notice that the U.S. Treasury will aggressively protect the integrity of the U.S. financial system using the full force of our authorities." Switzerland’s financial regulator Finma said it considers MBaer “to be a financial institution of primary money laundering concern.”
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