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Accountancy Slice
USA
10th June 2026
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THE HOT STORY

PCAOB Chair pushes overhaul of audit inspections and QC rules

PCAOB Chair Demetrios Logothetis has outlined plans to modernize the regulator’s inspection program, shifting its focus from reviewing individual audit engagements toward assessing firms’ overall quality control systems. He has also backed revisions to the PCAOB’s QC 1000 quality control standard, which is due to take effect in December 2026. The proposed changes would simplify compliance requirements, provide greater flexibility in assigning quality control responsibilities, remove the requirement for large firms to maintain an External QC Function, shorten documentation retention periods from seven to five years, and reduce certain reporting and evaluation obligations. The review comes amid significant changes in the accounting profession, including growing private equity investment in audit firms and rapid technological advances. Logothetis said the PCAOB must better understand how alternative ownership structures and evolving business models affect audit quality and independence.

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TAX

IRS to issue new rules on executive pay at nonprofits

The IRS and Treasury Department plan to introduce proposed regulations implementing changes under the One Big Beautiful Bill Act (OBBBA) that expand excise taxes on excessive compensation and parachute payments at tax-exempt organizations. Previously, the excise tax applied only to an organization's five highest-paid employees. Under the new law, it can now apply to any employee receiving more than $1m in annual compensation or an excess parachute payment. The IRS said the forthcoming regulations will clarify the revised definition of a covered employee and how the expanded rules will be applied. In Notice 2026-36, the agencies also provided temporary relief for tax-exempt organizations by allowing them to continue relying on existing limited-hours and nonexempt-funds exceptions for certain employees, including some volunteers, until further guidance is issued.

Tax overhaul for digital assets proposed

Members of the House Ways and Means Committee are reviewing a legislative package aimed at overhauling the taxation of digital assets. The proposed bills, introduced by various representatives, seek to reduce paperwork burdens, clarify rules for mining and staking, and align charitable deductions for digital assets with traditional assets. House Ways and Means Committee chair Jason Smith (R-MO) stated: "This effort represents months of careful study . . . the status quo of unclear tax rules is untenable." The legislation addresses key gaps in the Tax Code, aiming to modernize laws for the growing digital asset economy. Shehan Chandrasekera from CoinTracker noted that while some provisions will ease the burden for accountants, others may complicate compliance.

San Francisco voters reject expansion of ‘overpaid CEO’ tax

San Francisco voters have rejected Proposition D, a ballot measure that would have expanded the city’s tax surcharge on companies with large pay gaps between executives and employees. The proposal received less than 47% support, marking a victory for Mayor Daniel Lurie and the city’s moderate Democratic leadership, who argued that higher business taxes could discourage investment and prompt companies to relocate. The measure, backed by labor unions, sought to increase tax rates and broaden the calculation of employee pay by including workers outside San Francisco, potentially bringing more companies into the tax regime. Supporters said the expanded tax could have generated up to $300m annually to help address the city’s budget deficit and avoid cuts to public services. Opponents, including business groups and prominent technology investors, argued the proposal would weaken San Francisco’s economic recovery and further shrink its business tax base. 

INDUSTRY

Rise2040: Shaping the future of finance

The Rise2040 initiative, launched by  AICPA and CIMA, aims to shape the future of the accounting profession amid technological advancements and data expansion. Mark Koziel, chief executive of AICPA, stated: “Rise2040 is not about predicting a single future, it's about equipping the profession to actively shape it.” The report highlights a shift from traditional compliance roles to strategic advisory positions, emphasizing the importance of human judgment and trust in a technology-driven landscape. Five key drivers are identified: technology and data infrastructure, value model transformation, talent dynamics, regulatory architecture, and societal expectations. The report envisions a future where accountants lead AI agents, focusing on strategic guidance and human-centric advisory roles. Tom Hood, executive vice president at AICPA, noted that the profession is not retreating from change but is rising to meet it, emphasizing the need for proactive leadership in this transformative era.

FIRMS

EY AI chief warns companies against overemphasizing cost-cutting

Dan Diasio, EY’s global consulting artificial intelligence (AI) leader, has warned that many companies are focusing too heavily on using artificial intelligence to cut costs and reduce headcount, rather than pursuing its greater potential to drive growth. He argues that while productivity improvements can generate efficiencies, there is a natural limit to the value created through cost reduction alone. Mr. Diasio said AI can accelerate tasks such as coding, research, analysis, and testing, but it does not eliminate the need for human judgment, oversight, governance, and coordination. He notes that companies often underestimate the ongoing costs of AI deployment, including platform management, maintenance, supervision, and risk management, meaning productivity gains do not automatically translate into lasting cost savings. Instead, Mr. Diasio believes the biggest opportunity lies in using AI to create new products, services, business models, and markets. He cautions that fear-driven strategies centered on layoffs could discourage employees from helping redesign workflows and unlock AI’s full potential. 

Deloitte and Nvidia launch Adopt 100 to accelerate enterprise AI adoption

Deloitte has partnered with Nvidia to launch Adopt 100, an initiative designed to help large organizations scale artificial intellligence (AI) adoption while giving AI startups access to major enterprise customers. The program will integrate Nvidia-accelerated AI products from selected startups into Deloitte’s client offerings, matching business challenges with enterprise-ready tools and supporting implementation across clients’ existing systems and operations. Deloitte said the initiative aims to help businesses move beyond AI experimentation and achieve measurable returns by embedding AI into core operations.

ECONOMY

Record petroleum exports help narrow U.S. trade deficit in April

The U.S. trade deficit narrowed to $55.9bn in April, beating expectations, as record exports of petroleum products and capital goods helped offset continued strength in imports. Exports rose 2.6% to a record $327.1bn, driven by a surge in petroleum exports to $36.7bn, up from $27.6bn in March, as higher oil prices linked to the Middle East conflict boosted export values. Capital goods exports also reached a record high, supported by strong demand for computers and civilian aircraft. Imports increased 2.0% to $383bn, reflecting continued business investment in artificial intelligence infrastructure. Capital goods imports, including computers, semiconductors, and telecommunications equipment, hit record levels, suggesting tariffs have had limited impact on import demand. The U.S. goods trade deficit with China narrowed by $2.6bn to $12bn, as both exports and imports declined. Meanwhile, services exports weakened due to softer travel and transportation demand.

May home sales post strongest monthly gain of 2026

U.S. existing-home sales rose 3.2% month over month in May to an annualized rate of 4.17m, according to the National Association of Realtors (NAR), marking the largest monthly increase this year and comfortably exceeding economists’ expectations. Lower mortgage rates in April, rising incomes, and a modest increase in housing inventory helped encourage more buyers to enter the market during the critical spring selling season. Despite the improvement, the housing market remains subdued compared with historical norms. Existing-home sales are up just 0.7% year to date versus the same period in 2025, while affordability challenges continue to weigh on demand. The national median existing-home price reached a record $429,300 for the month of May, up 1.3% from a year earlier. "More Americans are on the move, with home sales rising to the ​highest level since December," said NAR chief economist Lawrence Yun. "This is great ⁠news for the housing market."

Wholesale inventories rise for third consecutive month

U.S. wholesale inventories increased 0.6% in April, slightly above the initial estimate of 0.5%, marking the third straight month of growth as businesses continued building stockpiles amid supply concerns and higher commodity prices linked to the ongoing conflict with Iran. The Commerce Department said the increase was driven primarily by a 0.9% rise in durable goods inventories, including professional equipment and electrical products, while nondurable goods inventories edged up 0.2%, supported by gains in groceries and petroleum products. Wholesale sales climbed 2% in April, following a 3.0% increase in March, indicating solid demand despite higher inventory levels. On a year-over-year basis, inventories were up 3.6%. At the current sales pace, it would take wholesalers 1.19 months to clear inventory, the lowest level since December 2013, highlighting continued strength in sales relative to stock levels.

LEGAL

Federal judge overturns restrictions on renewable energy tax credits

A federal judge has struck down a Trump administration policy that made it more difficult for wind and solar projects to qualify for federal tax credits, ruling that the Internal Revenue Service failed to adequately justify the change. The decision restores a long-standing provision that allowed renewable energy developers to preserve eligibility for tax incentives by incurring at least 5% of a project’s total costs before a credit deadline. The IRS had removed that pathway for most projects in rules issued last August, a move critics argued would increase electricity costs and discourage clean energy investment. The lawsuit was brought by environmental groups, consumer advocates, the City of San Francisco, and a clean energy consulting firm, which contended that the policy would hinder renewable energy development. The ruling sends the IRS guidance back for further review and represents another legal setback for the administration’s efforts to slow the expansion of clean energy technologies.

White House urged to speed up tariff refunds

Judge Richard Eaton of the Manhattan-based Court of International Trade has called on the Trump administration to expedite refunds of more than $10bn in revenue from tariffs that were ‌collected and later deemed illegal by the Supreme Court. Eaton, who stopped short of issuing a new order compelling White House officials to speed up the refunds, observed that delays were leading to a "growing inequity" between large importers who hired customs brokers to help them navigate ​a government system for seeking refunds, and smaller businesses which had not.

SMALL BUSINESS

Small-biz confidence slips as fuel costs pressure margins

U.S. small-business confidence declined in May, with the National Federation of Independent Business optimism index falling 0.6 points to 95.3, below both economists’ expectations and its long-term average of 98.0. Higher fuel prices weighed on margins, while uncertainty remained elevated. More businesses reported raising prices, with 36% increasing average selling prices, the highest level since March 2023, and 34% planning further price increases, the highest reading since July 2022. Hiring plans also weakened, with a net 9% of owners planning to add jobs over the next three months, the lowest level since May 2020. NFIB said small firms are struggling to absorb unpredictable cost increases, particularly as they have less ability than larger competitors to pass higher fuel costs on to customers.

STRATEGY

Tax strategies for data center growth

The U.S. is witnessing a significant surge in data center construction, driven by the integration of artificial intelligence and the need for energy efficiency. Companies are increasingly focusing on optimizing tax efficiencies to maximize their investments. Major tech firms like Amazon, Google, and Microsoft are leading the charge, having secured about half of the global renewable energy capacity for their operations. As Ian Boccaccio from Ryan LLC notes: "Sophisticated developers are now integrating multiple renewable energy assets into single facilities." The 2025 federal tax law enhances investment turnover, allowing for substantial tax credits and depreciation benefits. States like Virginia, Nevada, and Texas are offering attractive incentives, making them prime locations for data center development. With the right strategies, developers can achieve low indirect tax rates, driving growth in this competitive market.

INTERNATIONAL

U.K-U.S. tax mismatch under scrutiny as government looks to attract global wealth

The U.K. government is reviewing tax rules that can lead to double taxation for U.K. residents with U.S. investments, particularly those holding interests in U.S. limited liability companies (LLCs), as it seeks to reinforce the country’s appeal to internationally mobile high-net-worth individuals following the abolition of the non-dom regime. A key issue arises because U.S. LLCs are generally treated as tax-transparent in the U.S., with members taxed on profits as they are earned, while the U.K. often treats LLCs as companies, taxing investors when profits are distributed. This difference in classification and timing can prevent taxpayers from claiming foreign tax credits, potentially resulting in both U.S. and U.K. tax being paid on the same income and pushing effective tax rates above 60% in some cases. Tax advisers suggest that targeted amendments to the U.K.-U.S. tax treaty could help address the mismatch by allowing credit relief for U.S. taxes already paid on LLC profits when those profits are later taxed in the U.K. upon distribution. Such an approach would avoid disrupting established U.K. rules on entity classification.
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