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Accountancy Slice
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13th October 2025
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THE HOT STORY

Most companies suffer some risk-related financial loss deploying AI

Nearly every large company to have introduced artificial intelligence (AI) has incurred some initial financial loss, according to an EY survey, due to such factors as compliance failures, flawed outputs, bias, or disruptions to sustainability goals. The survey was based on responses from 975 executives overseeing AI at companies with annual sales exceeding $1bn from around the world in July and August 2025. It was focused on what it terms "Responsible AI" adoption, a series of metrics assessing whether companies have established internal governance policies for AI, communicated clear usage guidelines, and monitored compliance. Companies with more fully developed "Responsible AI" policies reported stronger performance on sales, cost savings, and employee satisfaction metrics, EY said.

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TAX

SCOTUS could decide whether some tribal members pay state income taxes

Alicia Stroble, a Muscogee (Creek) Nation citizen, has taken a tax dispute to the U.S. Supreme Court, arguing that she should be exempt from Oklahoma's state income tax because she lives and works on tribal land. The case follows the 2020 McGirt ruling, which affirmed the existence of tribal reservations for criminal jurisdiction, and now tests whether those boundaries also limit the state’s civil and taxing authority. If successful, the case could significantly impact Oklahoma’s tax base and tribal sovereignty. The Oklahoma Supreme Court rejected Stroble's claim in July 2025, saying that McGirt has not yet been extended to civil matters, prompting Stroble's federal appeal. A state response is due by October 31st.

Fuel tax overhaul in Michigan

The Michigan Governor has enacted a law to update motor fuel tax rates and introduce new provisions for tax rate adjustments through 2026. This legislation focuses on gasoline and diesel fuel taxation, clarifying procedures for taxing fuel inventories held in storage during the upcoming tax rate change on January 1, 2026. Reporting for these inventories will be required by February 20, 2026.

INDUSTRY

Forensic accounting in the age of AI

BRG managing director Frank Dery, CPA, CFE, emphasizes the enduring importance of forensic accountants in the age of AI. While AI can process vast amounts of data quickly, it cannot replace the critical human judgment and skepticism necessary for effective fraud detection. Dery recalls his early experiences in forensic accounting, highlighting how technology has transformed the field. However, he warns that AI can create new vulnerabilities, as seen in the U.K.'s Financial Reporting Council's findings that major firms lack oversight on AI's impact on audits. He states: "Fraudsters will not stop just because AI is in place." The future of forensic accounting will require professionals to adapt, blending accounting expertise with advanced data science while maintaining a focus on human insight.

The path to professorship

In a piece for Accounting Today Jacob T. Crowley, an assistant professor of accounting at Ohion Northern University, and Ashley M. Monaco, assistant professor of accounting at Walsh University, discuss how CPAs can engage in higher education as adjunct or full-time professors, even without a terminal degree. Many CPAs are eager to contribute to the next generation of accountants but may be unsure of how to start. "Serving as an adjunct allows CPAs to share their expertise and knowledge with aspiring accountants," enriching the educational experience. The article emphasizes the importance of time management and support from employers, as many institutions offer flexible scheduling. It also highlights the need for a strategic approach to the application process, including identifying suitable institutions and crafting a strong application. Ultimately, the motivation to help others and give back to the accounting profession is crucial for success in academia.

FIRMS

BDO cuts jobs under pressure from Apollo debt

BDO USA has slashed costs as it managed an expensive debt agreement with Apollo Global Management that it took on to fund an employee stock ownership plan. The cuts, driven in part by the high interest costs of the debt, have affected business lines including audit, tax and advisory. Apollo is the biggest lender to BDO through a $1.3bn loan facility agreed to in August 2023, according to filings. BDO used the debt from Apollo to fund its ESOP in 2023. A participant in January filed a proposed class action, alleging workers were overcharged to join the plan.

Crowe mulls stake sale to PE firm

Chicago-based Crowe is considering selling a stake to private-equity investors, chief executive Steven Strammello said, adding that it hired investment bank Harris Williams and an outside auditor to prepare for a potential sale. Mr. Strammello stated that the firm isn’t interested in a merger of equals or being acquired by a larger firm due to concerns it would have to sacrifice its brand or strategy, adding: “If we were to partner with a PE sponsor, it has got to be the right one and for the right reason." Crowe remains among the few largest 20 U.S. accounting firms outside of the Big Four that haven’t done a structural overhaul in the past few years, although firms such as CliftonLarsonAllen, known as CLA, and Plante Moran have also held off. 

DSWD secures investment for growth

Chicago-based CPA firm DSWD has received an investment from 119th Street Capital, a family office in Indiana focused on privately-owned financial service firms. Founded in 2009 by partners Joseph DeMarco, John Sciaccotta, and Rick Wilkens, DSWD provides accounting, assurance, consulting, and tax services across various industries. The firm intends to utilize the capital to enhance its talent pool, pursue strategic acquisitions, and bolster its non-attest services. Sciaccotta expressed pride in the partnership, saying: "Our partnership with 119th is a significant milestone for our firm." DSWD will operate under an alternative practice structure, separating its attest and non-attest services.

ECONOMY

Budget deficit hit $1.8tn in fiscal 2025

The U.S. federal government recorded a $1.8tn budget deficit for the 2025 fiscal year, according to the nonpartisan Congressional Budget Office (CBO), $8bn lower than 2024’s deficit, showing little improvement despite higher revenues. Economists view the continued large shortfall as concerning given that the economy is expanding. Total revenues rise 6% to $308bn, while total spending declined 4% to $301bn. The CBO did not include an official deficit-to-GDP ratio, but based on estimates, it equals roughly 5.9% of GDP, down slightly from 6.4% in 2024.

U.S. consumer sentiment levels out in October

U.S. consumer sentiment has remained at a steady level in October so far, with the impact of the federal government shut down yet to become apparent in households. The University of Michigan's Surveys of Consumers on Friday said its Consumer Sentiment Index was little changed at 55, from a final reading of 55.1 in September. It was above the 54.2 expected among economists polled by Reuters. The survey's measure of consumer expectations for inflation over the next year fell to a still-high 4.6% this month from 4.7% in September. "Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds," Joanne Hsu, the director of the Surveys of Consumers, said in a statement. "At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far."

Economists expect GDP to rise, job creation to slow

Economists surveyed by the Wall Street Journal have upgraded their forecasts for U.S. GDP growth, citing a surge in artificial intelligence investment and reduced tariff uncertainty, though job creation is expected to slow. GDP is now forecast to grow 1.7% year-on-year in Q4 2025, up from 1% in July’s poll. Job gains are seen dropping to 15,000 a month this quarter, down from 50,000 in July, while the unemployment rate is expected to hold around 4.5% amid tighter immigration. The probability of a recession in the next year remains at 33%. Respondents predict two further rate cuts from the Federal Reserve and warn that central bank independence could weaken if President Trump replaces chair Jerome Powell with a loyalist. Kevin Hassett is viewed as the most likely successor, although Fed governor Christopher Waller is considered the best-qualified candidate.

CORPORATE

IPO market on course to hit four-year high

U.S. IPOs rebounded strongly through the third quarter, raising $15.9bn—nearly double the previous quarter—marking the highest quarterly total since the fourth quarter of 2021, according to EY. IPO proceeds for the first nine months of 2025 rose 21% year-on-year to $33bn, with volumes up 49% to 180 offerings. The surge reflects investor resilience amid persistent geopolitical risk and optimism around AI, fintech, defence, and healthcare themes. Private equity exits have also surged, with PE-backed IPO proceeds up 68% globally. However, EY also warned of obstacles ahead. “Long-term [interest] rates have faced upward pressure due to idiosyncratic dynamics and rising concerns around fiscal sustainability,” the Big Four firm said. “Elevated bond yields increase discount rates, making IPO valuations less attractive and forcing issuers to deliver clear profitability paths, not just narratives.” Additionally, it said “political instability, such as the U.S. government shutdown, and concerns over Federal Reserve independence raise risk premiums.” 

Ford cancels plan to claim EV tax credits

Ford has canceled its program allowing dealers to offer a $7,500 U.S. EV tax credit on leases, following General Motors’ similar decision. The move comes after the federal subsidy expired on September 30. Ford will maintain current competitive lease payments and continues to offer 0% financing for 72 months for EV purchases. Reasons for the program’s cancellation remain unclear.

 
CBC

RISK & COMPLIANCE

Warning of potential for financial market crash

The Financial Stability Board (FSB), the G20's risk watchdog, says surging global share prices and other assets have left markets susceptible to a crash amid the current uncertain economic and geopolitical backdrop. "While most jurisdictions have seen a rebound in financial markets in recent months, valuations could now be at odds with the uncertain economic and geopolitical outlook, leaving markets susceptible to a disorderly adjustment," said a letter from FSB Chair Andrew Bailey dated October 8th and published ahead of G20 meetings in Washington this week. "The need for global standards and cooperation therefore remains abundantly clear," the letter said.

HEALTH CARE

Ohio health insurance premiums set to soar

The expiration of enhanced premium tax credits could lead to significant increases in health insurance costs for Ohioans. Currently, over 583,000 residents benefit from these subsidies, which are set to end in 2025. A KFF Health News analysis indicates that premiums may more than double, with families facing increases of up to $2,092 annually. The potential loss of coverage could leave 140,000 enrollees uninsured, exacerbating healthcare costs for providers. U.S. Rep. Greg Landsman expressed hope for bipartisan efforts to protect these tax credits, saying: "We have the money to pay for this." Open enrollment for the ACA marketplace begins on November 1.

SUPPLY CHAIN

Manufacturers shift focus to supply chain costs amid global uncertainty

Uncertainty surrounding tariffs and the economy is driving manufacturing chief executives to prioritize supply chain resilience and artificial intelligence (AI) investments, according to a 2025 CEO Outlook survey conducted by KPMG. Sixty-three percent of the 400 manufacturing CEOs surveyed said supply chain challenges, including disruptions to global supply chains, are hindering their ability to innovate at scale. Some are refining or renegotiating their agreements with suppliers to incorporate tariff-related costs, while others are using dynamic pricing or financial hedging. Uncertainty in the business operating environment is “casting a very, very long shadow for manufacturers,” said Brian Higgins, KPMG’s U.S. industrial manufacturing sector leader. “Economic policy uncertainty has been difficult to navigate, to say the least.”

TECHNOLOGY

Essential tech for accounting firms

In the evolving landscape of accounting, firms face the challenge of identifying essential software tools necessary for survival. This article explores the concept of a minimum viable tech stack, focusing on the fundamental technologies required for effective accounting operations. Joe Woodard, chief executive of Woodard, emphasizes the importance of a general ledger with integrated bank feeds and a solution for month-end close, saying: "A payroll solution that integrates with the General Ledger is crucial."

CRYPTO

New Bitcoin fund targets high-net-worth clients

Whitman Transition Advisors and Truvestments are introducing the Truvestment Bitcoin Legacy Fund, targeting high-net-worth clients through CPA firms. The fund aims to raise a minimum of $150m, which will be matched by institutional investors, totaling $300m. Phil Whitman, chief executive of Whitman Transition Advisors, said: "It should be the CPA firm and or the wealth management professional that advises their clients as to the current opportunity they're faced with by investing in Bitcoin." The fund is expected to be publicly listed by October 2026, with plans to offer shares worth between $600m and $700m in a Nasdaq-registered entity. Mr. Whitman emphasized the importance of CPAs educating their clients about digital assets to stay competitive in the evolving market.

INTERNATIONAL

Zucman tax gains traction in EU

Tax policy in the EU remains under national control, requiring consensus among all 27 member states. Prime Minister Sébastien Lecornu's rejection of a proposed 2% levy on the ultra-rich has not deterred the growing support for the Zucman tax, named after French economist Gabriel Zucman, which aims to address wealth inequality. Quentin Parrinello, director of public policy at the European Tax Observatory, noted: “The French debate on fairer taxation of the wealthiest individuals is also fuelling discussions in other countries.” While Spain currently has a full net wealth tax, other countries like Belgium and Germany are considering reforms. However, Nicolas Véron from Bruegel argues that an EU-wide wealth tax is “virtually impossible” without treaty changes. The ongoing debate reflects a broader frustration with existing tax systems that fail to adequately tax extreme wealth.

U.S. tariffs are a drag on EU confidence, ECB says

Around only 15% of euro zone workers fear their jobs are at stake because of U.S. tariffs, but that could still have a meaningful impact on the economy, European Central Bank researchers have written in a blog post using data from the bank's most recent Consumer Expectations Survey. "Workers who expect to lose their jobs are more likely to actually lose them later," the blog argued. "Hence, while the direct impact of U.S. tariffs on jobs appears to be limited, their impact on some workers can be stronger and might add further drag to firm and consumer confidence."
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