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12th September 2025
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THE HOT STORY

PCAOB issues new broker-dealer guidance for auditors

The PCAOB has published a new staff document titled "Broker-Dealer Audit Focus: Review Engagements Regarding Exemption Reports," targeting auditors of broker-dealers. The publication addresses ongoing deficiencies in review procedures mandated by Attestation Standard No. 2, which has been in effect since 2013. The standard outlines the requirements for auditors reviewing exemption reports prepared under SEC rules. Auditors must plan their review engagements in conjunction with financial statement audits, ensuring moderate assurance through diligent inquiries. The PCAOB aims to identify any conditions that may lead to misstatements in broker-dealer assertions. This document is part of a broader initiative to enhance audit practices for SEC-registered broker-dealers, following the PCAOB's expanded authority under the Dodd-Frank Act of 2010.

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TAX

Bloomberg offers predictions of 2026 tax brackets

Bloomberg Tax & Accounting has released its annual report projecting U.S. tax rate brackets, standard deduction amounts, and alternative minimum tax exemption amounts for the year ahead. The report also accounts for several new adjustments made under the One Big Beautiful Bill Act of 2025 that affect tax planning for taxpayers in 2026 and beyond. For corporate taxpayers, they include modified phaseout amounts for the alternative minimum tax imposed under Section 55 of the Tax Code.

California boosts renewable energy tax breaks

California lawmakers have approved a bill to expand and extend tax breaks for renewable energy and advanced manufacturing projects, sending it to Gov. Gavin Newsom's desk. The program exempts equipment used in these sectors from the state's sales and use tax and is managed by the California Alternative Energy and Advanced Transportation Financing Authority. The bill passed the assembly with a unanimous vote of 76-0 and received final approval from the state Senate, which initially passed it 39-0 in June. Governor Newsom has until October 12 to sign the bill into law. Tesla has notably benefited the most from this program.

INDUSTRY

PCAOB issues new broker-dealer guidance for auditors

The PCAOB has published a new staff document titled "Broker-Dealer Audit Focus: Review Engagements Regarding Exemption Reports," targeting auditors of broker-dealers. The publication addresses ongoing deficiencies in review procedures mandated by Attestation Standard No. 2, which has been in effect since 2013. The standard outlines the requirements for auditors reviewing exemption reports prepared under SEC rules. Auditors must plan their review engagements in conjunction with financial statement audits, ensuring moderate assurance through diligent inquiries. The PCAOB aims to identify any conditions that may lead to misstatements in broker-dealer assertions. This document is part of a broader initiative to enhance audit practices for SEC-registered broker-dealers, following the PCAOB's expanded authority under the Dodd-Frank Act of 2010.

ECONOMY

Budget deficit falls 9% to $345bn

The U.S. budget deficit for August fell $35bn or 9% from a year earlier to $345bn, the Treasury Department said on Thursday, with receipts rising 12% to $344bn and outlays up $2bn to $689bn. With one month to go in the 2025 fiscal year, the year-to-date deficit rose $76bn, or 4% to $1.973tn. Net customs receipts in August hit $29.5bn, quadrupling from $7bn a year earlier, driven by changes to tariff policies.

Consumer prices rose 2.9% last month

In August, consumer prices increased by 2.9% year-over-year, marking the largest rise since January, according to the Labor Department. The uptick was driven by higher costs for gas, groceries, hotel rooms, airfare, clothing, and used cars. Core prices, excluding food and energy, also rose by 3.1%, remaining above the Federal Reserve's 2% target. As the Fed prepares for its upcoming meeting, it faces pressure to cut short-term rates from 4.3% to about 4.1%. However, rising inflation complicates this decision. Jerome Powell, the Fed Chair, indicated that the focus is shifting towards job concerns, especially as the unemployment rate increased to 4.3% and weekly claims for unemployment benefits rose sharply. The overall inflation rate accelerated by 0.4% from July to August, surpassing the previous month’s 0.2% increase.

New jobless claims climb to highest since October 2021

Initial jobless claims rose by 27,000 to 263,000 in the seven days to September 6th, the Labor Department reported Thursday, the highest level since October 2021. Economists polled by the Wall Street Journal had estimated that new claims would decline by 2,000, to a total of 235,000. The four-week moving average of new jobless claims increased to 240,500, the highest since June, while continuing claims, reported with a one-week lag, were unchanged at 1.94m. “The surge in initial jobless claims in the first week of September came primarily from Texas, while claims declined in most states," commented economist Eliza Winger. "While any deterioration in the labor market bears watching given growing labor-market weakness, a broader increase in claims would have been much more concerning.”

CORPORATE

Collapse of Tricolor puts banks at risk of hefty losses

Tricolor Holdings, a U.S. subprime car lender, has filed for Chapter 7 bankruptcy, resulting in potential combined losses of hundreds of millions of dollars for JPMorgan Chase and Fifth Third. Tricolor has more than 25,000 creditors and listed $1bn to $10bn in assets and liabilities in its filing. Fifth Third planned to book an impairment charge worth $170m due to "fraudulent activity" linked to Tricolor.

SMALL BUSINESS

Tax changes boost corporate liquidity

In recent months, American companies have begun to reap the benefits of tax changes that allow for quicker deductions in areas like research and development, interest expenses, and equipment purchases. This shift has led to improved short-term liquidity and greater flexibility for strategic investments. However, small and midsized businesses face challenges in fully leveraging these tax benefits due to limited resources and awareness. Accountants and advisors specializing in SMBs play a crucial role in helping these businesses navigate the complexities of tax planning, ensuring that they can transform immediate relief into sustainable growth strategies. The current fiscal landscape emphasizes the need for proactive financial planning to capitalize on these opportunities.

HEALTH CARE

Eli Lilly's appeal rejected in Medicaid fraud case

Eli Lilly's appeal against a $183.7m judgment has been dismissed by the 7th U.S. Circuit Court of Appeals. The court found that a jury had sufficient evidence to conclude that Lilly knowingly concealed price increases on certain drugs, failing to rebate Medicaid accordingly. Circuit Judge Joshua Kolar said that Lilly acted "without qualification" unreasonably by reporting only original prices, which deprived the government of over $60m. The case, U.S. ex rel Streck v Eli Lilly and Co, highlights the implications of the False Claims Act, allowing whistleblowers to sue on behalf of the government.

WORKFORCE

South Korean workers detained in U.S. raid arrive home

More than 300 South Koreans who were detained in an immigration raid at a Hyundai plant in the U.S. state of Georgia have arrived home. A chartered Korean Air jet carrying the workers and 14 non-Koreans who were also detained in the raid took off from Atlanta at midday local time on Thursday (17:00 BST). One South Korean national has reportedly chosen to stay in the U.S. to seek permanent residency. Korean companies would be "very hesitant" about investing in the U.S. following the raid, South Korean President Lee Jae Myung said on Thursday. "The situation is extremely bewildering," Lee observed, while noting it is common practice for Korean firms to send workers to help set up overseas factories. "If that's no longer allowed, establishing manufacturing facilities in the U.S. will only become more difficult . . . making companies question whether it's worth doing at all," he added. On Friday, the South Korean foreign ministry said it had called for the U.S. Congress to support a new visa for Korean firms.

Microsoft employees will have to start coming into the office three days a week

Microsoft is to require its employees to work from the office at least three days a week beginning next year. The company said the new mandate will go into effect in Puget Sound, which includes its headquarters outside of Seattle, starting in February. It will then expand to other U.S. locations before moving to international offices. “As we build the AI products that will define this era, we need the kind of energy and momentum that comes from smart people working side by side, solving challenging problems together,” Amy Coleman, Microsoft’s human resources chief, wrote in a memo. CNBC notes that Microsoft has held several rounds of layoffs this year, but Coleman wrote that “this update is not about reducing headcount,” and instead is “about working together in a way that enables us to meet our customers’ needs.”

TECHNOLOGY

Tax automation: keeping it personal

Clients increasingly seek a digital tax experience that is both efficient and personal. To achieve this, firms must integrate automation tools that simplify tedious tasks like intake and reminders while ensuring clear communication through a client portal. This article emphasizes the importance of balancing automation with personalized service to build trust and loyalty. It also highlights strategies for enhancing client relationships in a digital-first world and empowering teams with the right technology and training.

INTERNATIONAL

Digital platforms in Brazil face new tax rules

Gabriel Caldiron Rezende from Machado Associados highlights the significant role of digital platforms under Brazil's new VAT regime, established by Supplementary Law 214/2025. This law introduces a modern VAT system, including a contribution on goods and services (CBS) and a tax on goods and services (IBS). Digital platforms, acting as intermediaries in transactions, may be held liable for collecting these taxes. The law specifies that platforms must report local transactions and imports, identifying suppliers, to avoid tax liability. "If the digital platform complies with both these reporting obligations, it will not be liable for paying any differences between the amounts of CBS and IBS collected," Rezende notes. This reform emphasizes the importance of compliance in the evolving digital economy.

Cinven takes majority stake in Grant Thornton's German unit

Cinven has acquired a majority stake in Grant Thornton Germany, outbidding a rival offer from the U.S. arm of the accounting network. This follows Cinven's earlier investment in Grant Thornton U.K.
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