AICPA Town Hall Power Hour: Expert Insights on the Latest from DC and the Profession

Podcast: AICPA Town Hall
Date: February 13, 2025
Hosts & Guests:

• Erik Asgeirsson (President & CEO, CPA.com)
• Mark Koziel (New CEO, AICPA)
• Mark Peterson (Head of DC Team, AICPA)
• Melanie Lauritsen (Technical Update Specialist, AICPA)
• Bob Dirac (Director, Audit & Accounting Technical Services)
• Mike Brand (Co-chair of Engage; Practitioner)

Overview

This episode delivers a well-structured “news power hour” packed with critical updates for the accounting profession. The discussion covers the economic climate’s impact on CPA pipelines, the rapidly changing legislative landscape in Washington DC, the latest on IRS and federal agency developments, significant pending legislation, BOI (Beneficial Ownership Information) reporting concerns, technical and regulatory updates, and a deep dive into the new Quality Management Standards (SQMS). The hosts and expert guests provide real-time guidance for CPAs during a period of accelerated change and uncertainty.

Key Discussion Points & Insights

1. Profession Update & Pipeline Trends

[02:08 - 05:31]

• CPA Enrollment News:

  • 12% increase in CPA program enrollments over 2020, the largest since that year (+28,000 students).
  • “I was doing a presentation earlier this week. I said I was in my 41st day at the time. Enrollment's up 12%. You're welcome. Mission accomplished. But it actually has nothing to do with me.” – Mark Koziel [02:08]
  • Cautiously optimistic: Still only returning to 2020 levels, which are below target.

• Economic Link:

  • Shifts in job market and economic outlook directly affect accounting student uptake.

• Rapid Change and DC Impact:

  • Political and administrative volatility impacting profession; focus on keeping members level-headed amid noise.

2. AICPA Listening Tour & Member Priorities

[05:31 - 13:27]

• Member Feedback Channels:

  • Nearly 500 pieces of feedback since January 16 Town Hall launch of the “Ask Mark” initiative (askmarkicpa-cima.com).
  • Focus on being membership-driven, especially for small firms.

• Key Member Themes Identified:

  • Small Firm Support: Reaffirmed as a top concern; tools and solutions being designed for scalability and accessibility.
  • Audit in Local Government: Strong need for qualified auditors; challenges due to complex standards and a lack of skilled personnel.
  • Legislative Support: Pressures of advocating amid DC dysfunction and constant change.
  • Talent Pipeline & Alternative Pathways: Continued conversation with NASBA and UAA; early signals of potential changes to boost workforce pipelines.
  • CPA Branding: Calls for increased visibility, especially during tax season, but budget precludes large-scale ad campaigns (e.g., Super Bowl). Profession-level advocacy from members is the practical path.

• “Everything that’s old is new again… being able to see small firm support, don’t forget about the small firm.” – Mark Koziel [05:31]

3. Definition of Small Firm & Business/Industry Outreach

[11:34 - 13:27]

• Small Firm Definition:
  • Generally, firms with fewer than 20 professionals; majority of CPA firms in the US are in this category.
• Business & Industry Segment:
  • One-third of audience are from corporations; upskilling and analyst progression top of mind.

4. DC Update: Budget, Shutdown Risks & Legislative Outlook

[13:47 - 29:33]

Government Funding & Potential Shutdown

[13:47 - 16:41]

• 29 days to agree on government funding; March 14th deadline critical—risk of IRS/agency disruption during tax filing season.
• “There’s only a one seat majority... Each week that goes by that they don’t come to some resolution increases the risk [of shutdown].” – Mark Peterson [13:47]

Administration Transitions

[16:41 - 18:38]

• Cabinet still being assembled; IRS and SEC head positions unfilled.
• Agencies “shut down promulgation of regs” without confirmed leadership, but AICPA maintains working relationships.

Budget Reconciliation & Tax Packages

[18:53 - 22:04]

• Two contrasting pathways in Congress for a $4.5T tax package:
  • House: Single “big, beautiful bill” combining defense, border, tax.
  • Senate: Advocates for splitting packages (defense/border, then TCJA extension and tax cuts).
• Timeline and structure directly affect when any extension or tax reform occurs. “The big thing to watch is whether it’s one package or two.” – Mark Peterson [22:04]

Federal Hiring Freeze & Department of Government Efficiency (DOGE)

[22:04 - 25:51]

• Elon Musk’s led “Efficiency” drive prompting hiring freezes and buyout offers.
• IRS and other agencies face workforce uncertainty; possible tax season impacts, especially IRS hiring/exemptions for “critical” staff.

Waste, Fraud & Transparency

[25:51 - 26:57]

• Members somewhat encouraged at inefficiencies being uncovered; concerns about process and transparency remain.

5. IRS, Legislation & Tax Practice Update

[27:07 - 44:05]

IRS Modernization & Service

[27:07 - 30:21]

• Recent House Ways & Means Committee hearing shows rare “bipartisan consensus” on need for IRS modernization.
  • “There was some area of bipartisan agreement and focus which was very, very welcome.” – Mark Peterson [27:07]
• Ongoing debate over balancing enforcement and taxpayer service.

Tax Preparer Regulation Landscape

[30:39 - 35:21]

• Marketplace confusion: Multiple PTIN/preparer types cause confusion.
• “Ghost preparers” pose fraud risk—motivation for regulation.
• Support for IRS regulation of preparers but “with guardrails, not with unlimited power.” – Melanie Lauritsen [33:55]
• Proposals would allow IRS to revoke PTINs; establish minimum education (CPAs exempted); GAO study into state info-sharing.

BOI (Beneficial Ownership Information) Reporting

[35:32 - 38:45]

• Samantha Smith case injunction paused reporting—House passes HR 736 unanimously (408-0); Senate companion bill introduced.
• Members cautioned against relying on Congress acting fast: “Never advise anybody to make a decision based on Congress acting.” – Mark Peterson [36:55]
• AICPA prepping a call-to-action campaign for member engagement if needed.

BOI Technical & IRS Operations Updates

[38:52 - 44:05]

• Pending court action could lift BOI injunction at any moment; FinCEN promises 30-day filing window if so, but this could overlap with heavy tax season dates.
• IRS operating with critical employee extensions to minimize disruption.
• DHS has requested IRS agents’ help with immigration enforcement, raising questions about division of federal resources.

6. Quality Management Standard (SQMS): What Firms Need to Know

[45:06 - 58:25]

Introduction & Motivation

[45:06 - 48:16]

• SQMS replaces outdated quality control standards with a risk-based, scalable, modern framework for firm-wide quality.
• Applies to audits, attestation, reviews, compilations—broad impact across practices.

Core Changes & Implementation

[48:16 - 54:58]

• Main update: Risk-based approach and system of quality management with annual evaluation requirements.
• Scalable: “If all you do are compilations, scale it down... This one is not rigid, it's fluid, it's proactive, it's not reactive.” – Mike Brand [50:59]
• Key steps: Review your practice, document your system, leverage AICPA’s Excel and practice aids tailored by firm size.

Practical Tools and Documenation

[54:58 - 58:25]

• Early adoption possible; peer review cycles may influence timing.
• Excel tool available; market emerging for more robust technology solutions for small, midsize, and large firms.
• More guidance/resources to come in upcoming Town Halls and through AICPA’s evolving tools.

Updates to Statement Preparation Standards

[57:00 - 58:25]

• Pending change: If consulting standards update passes in ~60 days, financial statement prep may leave SARS 21 rules and not be subject to SQMS.

Notable Quotes & Memorable Moments

• “Enrollment’s up 12%. You’re welcome. Mission accomplished. But it actually has nothing to do with me.” – Mark Koziel [02:08]
• “Everything that’s old is new again… don’t forget about the small firm.” – Mark Koziel [05:31]
• “There’s only a one seat majority... Each week that goes by that they don’t come to some resolution increases the risk [of federal shutdown].” – Mark Peterson [13:47]
• “Never advise anybody to make a decision based on Congress acting.” – Mark Peterson [36:55]
• "If all you do are compilations, scale it down... This one is not rigid, it's fluid, it's proactive, it's not reactive. And so it's a very good system." – Mike Brand [50:59]
• “When I mentioned Melody’s name, there was actual applause in the audience.” – Mark Koziel [59:11]

Timestamps for Key Segments

• CPA Pipeline & Profession Trends: [02:08 – 05:31]
• Listening Tour & Member Feedback: [05:31 – 13:27]
• DC Update: Budget & Political Landscape: [13:47 – 26:57]
• IRS Modernization Highlights: [27:07 – 30:21]
• Tax Preparer Regulatory Changes: [30:39 – 35:21]
• BOI (Beneficial Ownership) Developments: [35:32 – 38:45]
• Technical & IRS Ops Updates: [38:52 – 44:05]
• Quality Management Standard (SQMS) Deep Dive: [45:06 – 58:25]

Useful Resources Mentioned

• Quality Management Practice Aids (Excel-based, tailored for firm size)
• AICPA Town Hall Resources Page & Webinars
• Washington Tax Brief webcast (next session: Feb 19, 1pm ET)
• Reimagining Your Practice webcast (Feb 19, 3pm ET)

Final Takeaways

• The accelerated pace of legislative, regulatory, and economic changes continues to pressure the accounting profession.
• AICPA leaders are actively listening and seeking to align resources, especially for small firms.
• DC legislative uncertainty is an enduring reality—professionals need to stay informed with reliable updates, not just the headlines.
• New Quality Management Standards demand early attention and practical adaptation, but help and scalable resources are available.
• Community feedback, advocacy, and upskilling are more important than ever for profession-wide resilience.