B (6:36)

Yeah, TBD as it seems to be every week. But I know there was also a small business tax bill introduced also.

D (6:48)

Yep. So just this week, a bill was introduced and the legislation, what it does is it takes a provision from HR1 that would increase the 199 cap, a qualified business income deduction, from 20% to 23%. This was in the first version of HR1 that passed the House. However, it was not included in the final bill that the President signed into law. So Representative Custoff from Tennessee, he introduced this as a standalone bill. It doesn't address the exclusion for SSTB's, but it is something, as I mentioned earlier, for budget reconciliation. If they were to do a broader bill that included tax provisions. This is something that you could potentially see in a budget reconciliation bill. So it's something that we're following very closely.

B (7:44)

Great. And Rachel, I know there was a number of Congressional hearings happening this week. We had. The new Fed Chair before the Senate, so lots happening on that front.

E (8:03)

Yeah.

D (8:04)

So we had three big hearings this week. As you mentioned, the nominee to be the next Fed, Federal Reserve Chair, had his nomination hearing on Tuesday before the Senate Banking Committee. During that hearing, he mentioned that, you know, he would like to see some regime change at the Fed as well. As you know, he believes that they have made some errors that have created some inflationary pressures on the middle class. He got some questions from Democrats on, you know, Fed independence and things related to his financial disclosure. Right now his confirmation is on hold because Senator Tillis from North Carolina, who is retiring, he has put a hold on the confirmation until the DOJ finishes its investigation on the Current Fed Chair Jerome Powell. And then yesterday we had two big hearings. So in the Senate Appropriations Committee, Secretary Bessen of the treasury, he testified for his annual hearing before the subcommittee on the President's Budget for Treasury. And what's notable for that is that during the Q and A period of that, he mentioned that his priorities for the IRS are customer service, collections and privacy. And then just really quickly, the last hearing I'll mention is the hearing at the Ways and Means Committee in the House. The ustr, the US Trade Representative for Greer, he testified at his annual hearing. And during that hearing, the chair of the committee, Chairman Smith, he mentioned digital tax and what other countries are doing and that he thought there's a possibility that the committee may have to take action on that. So wanted to highlight those hearings for everyone.

B (9:53)

Great, thank you, Rachel. And I know tariff, tariff refunds, there's some movement on that as well.

A (10:01)

Yep.

D (10:01)

So just really quick, on Monday, the system to be able to start to apply for refunds opened up. This is phase one. There are multiple phases on this. This is for the least complicated cases. And, you know, as they go through the phases, it will then allow for the more complicated cases to apply for these refunds. The aicpa, we have a resource page on tariffs, so we invite you to check that out regularly to get the latest on tariffs because there is a lot going on on this issue and there are also some resources for you all when you're talking to clients on tariffs. So that's the latest on tariffs.

B (10:45)

And lastly, Rachel, we put out some stuff on digital Asset assurance.

D (10:51)

Yep. So on digital assets. So FASB released some guidance last week related to stablecoins and the OCC. The deadline for comments is coming up on May 1. The AICPA does plan to submit comments. And you know, in our comments, what we are planning to say is, you know, we're planning to highlight some of the resources that we have on this and this is related to the Genius Act. And then lastly on the market structure legislation that we've talked about a lot on the town hall, the Senate Banking Committee is continuing to work on this legislation. The markup that was scheduled for January has not yet been rescheduled, but we know that they are continuing to negotiate on the bill and we will be sure to let you all know if that markup gets rescheduled.

B (11:43)

Great. Well, thank you, Rachel. Great update. We'll have you back in just a few minutes for the Open Forum, probably with some questions I can see coming in. But thank you for that update. Let's go ahead and invite Melanie in. Hi Melanie.

A (11:58)

It's good to see you and I'm happy to be here.

B (12:00)

Well, we've had a little time to catch our breath since April 15, but I know you have a lot to take everyone through always.

A (12:08)

So let's go ahead and dive in. So Rachel mentioned a couple of hearings, and last week there was a hearing with IRS CEO Frank Basagnano in which they asked him to talk about the 2026 tax filing season. So as you can imagine, he actually came forward with a glowing report of how this filing season went. And he mentioned he hit a couple of highlights that we would be interested in. So the first one that he said was that enforcement activities actually were increased the revenues by about 12%. And a lot of that came forward from about 500,000 soft letters, which is something that the AICPA has supported as an enforcement action versus other harsher actions, and that actually generated about $250 million. He also came forward and said that approximately 53 million taxpayers took advantage of the different deductions and credits within HR1. So we're talking about the no tax on tips, no tax on overtime, the car loan interest deductions and the senior deductions. Any One of those 53 million Americans did take advantage of that. He also talked about the process for amended returns, and amended returns are painful point for our members. And actually he said that that process was able to be taken from just over six weeks down to three days. So hopefully we are going to see some improvement when we interact with the irs. And it has to do with amended returns. He also addressed the mandatory executive order wherein the payments needed to be electronic. Now, he did say that people were going to be continued to allow to make paper check payments to the IR. He did not address the CP53E. And I already saw some questions coming in from the audience on that. And what I would say is on the March 26th town hall, we went over some of the things that we can do with regards to that. And I also know that the IRS has sent some erroneous notices on those. Please keep in mind that if no action is taken within six weeks, it kind of resolves itself. Now, the other thing to consider with this that we've seen with the IRS and we've been talking week over week has been the IRS statistics that you see here regarding the filing season. Now, as you can imagine, they all kind of support everything that Frank Basano said during that hearing. And again, it shows some improvements there, but not everything is as peachy as it seems. And Nina Olson came forward with a report through the center for Taxpayer Rights in which they decided to do some cold calling to the IRS to really look to see how long those answer times are. Now, they also, under the Freedom of Information act, they pulled reports and statistics from the IRS and they were able to compare. So what they found, they did 149 calls. They did those calls day, evening, afternoon, all times of the day because they wanted to catch peak, non peak. They did the calls during the March to April timeframe. And as soon as they got a live assister, they went ahead and hung up. So she can't talk towards the quality of those calls, but she can talk about how long people waited. And what they found is when there were good lines, meaning that they answered quickly, people were waiting an average of 11 to 12 minutes compared to the IRS statistics, which were in the single digits. It's kind of a different story. They also found that on the abysmal lines that people were getting the courtesy disconnect or they were waiting well over an hour and pushing up to two hours. And overall, what they found is that 37% of the calls were just being dropped. We're not talking courtesy disconnects. We're talking you call, and it just got dropped. So again, that paints a different picture. And what that report shows is that there is a disconnect between what the IRS statistics show and what taxpayers are experiencing. However, based on those statistics, at one of the hearings that Rachel mentioned with House Ways and Means, they went ahead and proposed a 12.5% budget cut to the IRS. And Secretary Besant actually came forward and he said that that was just a small menial subtraction for the budget because really, if you look at the taxpayer experience, they are more satisfied according to the statistics. And he also said that they're focusing on technology to be able to meet those of the taxpayers. So I'm saying all this to say on your slide, there is a QR code, and this is for our annual IRS Services survey. And I beg of everybody who has had any interaction with the IRS to please take that survey. We've been doing this survey for over 10 years, and it's really telling on different fronts. So it's told us, you know, the impacts of COVID It has told us that we're not at pre pandemic levels, but it also tells us where to advocate for you and what your pain points are and what your experience is. And those reports, year over year, we have found, always line up with the National Taxpayer Advocates Report at the end of the year, that looks through to see how the IRS really did perform. And so this is a really good look to see how they're really doing beyond all the other statistics that we see. So with that, we're going to go on to the next slide and we're going to touch base on tips. Okay. So on April 10, the IRS released final regulations on the list of tipped occupations. So keep in mind with the proposed regulations that had an open period and people could provide feedback. And in it, they found some feedback and they actually explained, expanded the list of who is someone that would be reasonable to receive tips. And they expanded it to florists, visual artists, and also gas pump attendees. The final regulations also clarified what cash tips means because everybody knew, like if you paid a tip through a credit card that was fine, it was considered cash tip and you would qualify under this and the other rules with it. But they also determined that if you were paid with foreign currency, that would qualify as a cash tip. But they also said that digital assets would not qualify as a cash tip. That is because of the Genius act, which Rachel mentioned earlier, is what the laws of what is governing digital assets. And under the Genius act, digital assets is not considered a currency. So therefore it wouldn't be considered a cash tip. Now, it clarified some things around the automatic gratuities. Everybody's had questions at restaurants. When you have that mandatory 20% gratuity for tables, you know, eight people or more. And the real idea behind it is if you have that option to bring that tip down, then yes, it can be considered a cash tip. Otherwise it is not. And restaurants are going to have to make a decision how they're going to move forward with that. Now, they also clarified some things around the reporting requirements on it, around the information forms and the form 4137. But what was not clarified is for those people that are self employed, employed, how do they self report? We know that they can take the no tax on tips deduction, but where are they reporting it? Because they're not going to self report a 1099 for themselves. They're not going to put it on a W2 information. So there's a little ambiguity there. And we are working with the IRS to try to get clearance and more information there. And then with regards to the SSTB's, they did say that for now they were going to extend the relief that even if you're an sstb, but as long as you are on that list of occupations, then you're good to go and you can qualify for that tip. And with that, we're moving on to gambling losses and the IRS on April 17, they came forward with proposed regulations and their intention there was to provide clarity, raise awareness and to make sure everybody was on the same level page. So essentially they confirmed that yes, gambling losses could be taken to 90% of the losses up to your winnings. And so therefore it's kind of two thresholds that you need to meet with that. And they also provided more information and clarity around the different types of winnings and the thresholds for the information reports. So it used to be like the keno winnings, the bingo winnings, they all had different thresholds and where amounts you would report. And they came forward and said, nope, it's going to be a flat $2,000 moving forward starting at the end of, well, the beginning of 2027. So with that we're going to go ahead and move on to the round robin. There's lots of things here to cover. I definitely think that you should explore a lot of the different things that the IRS is doing. Those are just kind of awareness head. They're implementing new things with online tools, ways to be able to pay debt easier for taxpayers, how we can support this. And business accounts also are expanding. But also to note the IRS has granted tax disaster relief for Mississippi, Hawaii and Tennessee. Now, Tennessee had requested the disaster relief under the trigger state law, but it was actually granted disaster relief through FEMA declaration. So again, there are different ways to get that disaster relief, but we are seeing it move forward under either way and that is beneficial for taxpayers. And the other thing that I'm going to mention, which Rachel also mentioned, was the Department of Homeland Security. The employees are getting an additional 30 day extension to be able to file their tax returns due to the hardships caused with the extended shutdown and not seeing the payments right away. So they have 30 days through May 15th to be able to file. And with that, Michael, I turn it back over to you.

B (21:56)

Great. Thank you, Melanie. That was a great update. I did have one quick question I want to just ask you, give you an opportunity. I think some folks either missed some of your comments on the delay in the electronic payments, if maybe you can give 30 seconds on that.

A (22:11)

Yes, there's two types of things. You're absolutely right. So what we're seeing from our members is that the IRS is actually not withdrawing the funds on time even though you scheduled those payments. So there's a lot of concern there and we actually reached out to the IRS and they said, you know what, this is most likely, first of all, they're aware, so know that they are aware. But they said that most likely it had to do because such a high volume of transactions were happening in April that they weren't able to process a lot of those payments needed. And so they're telling people to one, not worry too much about it right now. They don't envision that they're going to issue penalties. But in the off chance that you do get a notice along those lines to just capture an document that you did set up that payment and that should be sufficient to take care of it.

B (22:57)

Awesome. Thank you very much, Melanie. Great update.

C (23:00)

Absolutely.

B (23:01)

I think if we just did an open forum on tax questions with you, we could probably have a week and a half for that segment based on the questions coming in. But you do a great job of distilling all it down. So we'll have you back in just a little bit in the open forum. And you know, just with that, you know, it's a, a great time just to remind everybody now that we're about to go into a segment talking about post tax season planning. And I know we've talked to you all about some of the tools that are out there to really help practitioners. And probably the best time to look at some of those tools is when you have a little bit of a reprieve coming out of one of your business times. So again, just remind everyone there is a, you have that complimentary a seven day free trial to pilot Blue J which is one of the leading AI tax research tools if you are so inclined. They had an incredibly busy and active tax season these past couple of months. So wanted to just remind everybody with that. But with that also want to just pivot to another great segment and invite in Cary Sinnett. Carrie is a senior manager. He essentially leads the AICPA personal financial planning areas in charge of the credentials, you know, before AICPA has a long career as a practitioner working with clients. And so he brings a lot of great insight and context and he's going to talk a little bit about post tax planning opportunities. And then with him is Matthew Kidd who leads his own firm. So great conversation. Carrie. Matthew, welcome. I'll let you guys go ahead and take it from here.

F (24:39)

Thank you Michael, appreciate that and thanks for inviting us on the show. So speaking with me today will be Mad Kid. He was named the elite under 40 in Michigan. He earned the Emerging Leader Award and was just named in Forbes as one of the top CPAs, so he founded it Advisor Beacon in the tax advisory and financial planning space. It'll be great to hear his story. Matt and I will each share our perspectives and at the end, some resources that I think you might find very valuable. First, though, thank you for serving the public good during tax season. My perspective is that the effort you already put in CPAs can be magnified by considering tax advisory to benefit both you and your client. In the Personal Financial Planning division at the aicpa, we believe the best professionals for tax integrated financial planning are already sitting in the CPA profession. Namely, you and your clients are they're telling you the same thing. In fact, research backs it up. Research from Sorelli associates shows that 82% of affluent clients want to consolidate their tax and financial planning with one provider. 93% of those people would prefer that provider to be the one they already trust. I'm pretty sure that's you. This isn't just an affluent client opportunity. It's your clients today. It's your small business owner who's balancing retirement and funding college for the grandkids. It's how your clients and your practice can evolve and grow. This week I was talking with Ron Stowe, an early career CPA coming out of a tough, busy season. Long days, late nights, you know what it's like. And he asked a simple question. Is there a way to make this work more worthwhile? Probably. Like many of you, Ron is good with numbers. He understands complexity and genuinely likes helping people. And I told him that combination is exactly why your clients already see you as their most trusted advisor. At the same time, AICPA map benchmarking data through firms that expand into advisory and planning are seeing double digit revenue growth and significantly higher revenue per client. But here's what your clients still need and will find. Whether it's you or someone else, your clients aren't just trying to file an accurate return. They're trying to figure out how to get from where they are today to their ideal financial future across what feels like an ocean of uncertainty. And they want to ask you because you bring clarity. You bring accuracy. And they trust you. I shared with Ron a moment that changed my own trajectory. About 30 years ago, I was thinking about expanding into financial planning, but I hesitated. I I didn't want to give advice about the future if I couldn't be certain about the outcome. And a mentor told me something I'll never forget. He said, your clients don't expect certainty about the future. They expect guidance through it. My mentor loves sailing so he explained it this way. Your clients will face shifting winds of tax law changes. They'll hit storms of economic disruptions. They'll experience the waves of volatility they can't control. They're not looking for someone to predict all of that perfectly. They're looking for a navigator. Someone who can set direction, interpret conditions, and make the necessary adjustments along the way. My mentor helped me understand my role. It's the same role you are perfectly positioned to play. You're already the one they trust. You already understand the most complex part of financial life, the tax system. And just so you know, other professions are targeting your client's desire for help. 51% of non CPA advisors are leaning into tax informed planning. And even a higher percentage of all clients are demanding it. According to the American College, one in six advisory firms are preparing tax returns. The only real question is whether you extend the trust that is hard earned into planning or leave that role to someone else. Because if you don't, your clients won't stop needing a navigator. They'll just find someone else. So please don't make your clients choose someone they trust less than you. Be their navigator. That's the story I shared with Ron if that sparks an interest for you. At the end of our segment, we'll provide four resources for you so that you can try out easy, practical steps to leverage the work you have already put in during tax season as you consider becoming that trusted navigator for your clients. And now I'd like to bring in Matt. Matt, by the way, thanks for spending a slice of your vacation with us. So appreciate it. You recently lived a similar journey and I'd love to hear your perspective. You have successfully integrated tax advisory and financial planning into your tax compliance practice. Matt, would you share?

G (30:07)

Yeah, absolutely. First off, thanks for having me on. And depending on the noises you hear in the background, I apologize. I'm on the seashores of old Mexico, refreshing like many of you are after tax season. So you hear the breeze or the margarita mixer. That's where I'm at. So yeah, I grew up the son of a CTA in a very traditional public accounting household. The life revolved around tax seasons. The heavy hours did audit season in the summertime to pick up that extra work. And that was what I grew up in. And I have two older brothers that all three of us, despite that, still saw the opportunities of becoming a CPA. So all three of us are actually now CPAs. We run separate small CPA firms around the state of Michigan. And I think the reason that we really went into it is that despite the seeing the good and the bad of public accounting growing up our dad always instilled in us that there was a better way to do things than the way that it was traditionally done in a compliance folks public accounting firm. So that's really what drew us into the profession and led us down the desire to have our own firms. So acquired a very traditional firm about seven, eight years ago. We did a lot of tax returns, heavy compliance, bookkeeping and similarly, just so you know, there's a better way to do things. So we started shifting into the business advisory to start because I felt it was really important to get the CPA firm in a good position before moving further into the personal financial world. So really for three or four years the focus was building out that business advisory side of things so that we could get the margins and capacity available to myself as well as the rest of the team to be able to add on an additional service line. I think that's really important as we're coming out of this tax season. I call it improvement season or planning season. We're in now is start thinking about steps you need to take to position yourself to really improve the client experience. Experience because I think that's really the draw into financial Planning for most CPAs is the ability to deliver a better client experience. As Kerry talked through, there is a strong desire from our clients to have things kind of brought into one place and they want the CPA to be the person who delivers both their tax as well as personal financial advice. So really we're in an incredibly good position to start offering it. So I wanted to talk about kind of the different common models that are available for particularly existing CPA firms and how they can add in financial planning. So the kind of, I'd say the, I don't want to call it lowest level, but the lowest lift is to offer fixed fee financial planning. So you don't manage assets, but it does allow you to get more familiarized with the different financial planning software, meet with those clients and start deepening those relationships and helping them get a grasp on their financials. Personal financial life. Kind of the next option would be coming in investment advisor representative under an existing RIA firm. So that is kind of the next I'd say level of effort in that a lot of the compliance is being handled by those other firms but you can then manage assets. So they're providing a lot of the back end support for you and you're simply paid as a contractor. W2 most of the time. So then the next option would be actually form your own ria and with that you could do. You could work with a turnkey asset management provider. So what they'll do is they'll provide a lot of the back office support for you. So they'll provide the model portfolios, they have specialists. If you have an advanced case that you're not quite sure how to handle, you can reach out to them and they'll assist with that. And then they also provide some level of support on the compliance side of things. So you're still responsible for compliance. In our personal case, we have a contractor that we work with for compliance services that really guides us on what's required on that side of things. Because it is, it's. Go ahead, Gary.

F (34:32)

Matt, this is greatly insightful. I really appreciate it. Have you found once you started that integration that it changed how you operate the business? Did it bring more balance or add time or additional revenue?

G (34:47)

Yeah. So this was without a doubt the absolute smoothest tax season that we have ever had. Two years into offering financial planning now, so basically what we have done is that expanded advisory revenue and income, we've been reducing the compliance side by about an equal amount. So we did about 20% fewer tax returns this year than we did the year before. The year before that it was another 20%. So we've reduced our compliance load by about 40% and have increased our margins while significantly reducing the hours that we're working. And the client feedback has been exceptional.

F (35:24)

Wow.

G (35:25)

Particularly there will be ones who come over that surprise you.

F (35:29)

Yeah. That's amazing to hear that. It is such a win win where you're able to control your time in busy season, add revenue and it sounds like add a smoother touch to busy season and maybe even a little extra time on the other end. Well, we have four resources that will help you. It's a spectrum of resources. So if this interests you a little bit, the first resource is a podcast. The second is a guide where you can spot where you're at in the journey. And then we'll tell you the steps from exactly where you operate to adding financial planning. And if you're going to. The third is if you're going to Engage. This summer we have an in depth free conference workshop that you should sign up for. In addition, Matt's going to do a additional session at Engage that's on this topic. And then finally, if you're ready, you're like, I want to go all the way in. We have an entire landing page that gives you almost every resource that you'll need to integrate tax and financial planning into your practice. Matt, again, thank you so much for really lending your story to this. And can people get in touch with you if they have a question about getting started? Is that all right?

G (36:48)

Yep. Yeah, absolutely. LinkedIn is the best option for them to CPA.

F (36:53)

That's perfect. Thank you.

B (36:56)

Well, great. Well, thank you. Thank you, Carrie. Thank you, Matt. Great discussion. We'll have you guys both back in open forum in just a couple of minutes, but a lot of good insights there and a lot of questions will serve up. So with that, I also wanted to just remind the town hall that on May 7, kind of connected to this same discussion, we're going to have Brandon all free. Brandon is the senior director here@cpa.com who leads our tax transformation area, just joined us, recently led a large firm tax practice. A lot of great insight on how the tech kind of fits into this whole tax planning and more importantly, just the change that's undergoing within the tax practices across the landscape. So Brandon will have a lot of great insight to tack on to what you just heard Matt and Carrie talking about. So make sure you tune in for that. So with that, want to take a pivot with each week in the town hall, we're introducing segments that really just speak to the transformation of different practice areas, whether audit, tax, advisory services. So this week, again, we're really excited to have with us Emily Remington, who's part of our team here and works very closely with firms across the country on audit transformation. More specifically, we recently launched released a report on audit transformation. There's a lot of great themes that you noticed in that Emily, and I believe you and Jeanne are going to talk about that for us now. So with that, we'll go ahead and welcome you in. And Jeanne, great.

C (38:38)

It's great to be here. And we're experiencing the largest shift in the profession right now. And we certainly see that within the audit practices. So there's more technology tools in audit than ever before. There's more external capital flowing in than ever before, the shifting skill sets being demanded from our people as the pervasiveness of data enters into the audit workflow and the rise of AI, as well as a continual evolution of standards and regulatory pressures. So with that, @cpa.com, we really work. The work that I do every day is about firm transformation, enablement and bring practice strategies to firms. So we said this is a great time. Last year we launched the Audit Benchmark Survey and we released the report at the end of December, and the report surfaced really great insights and directional signals that reflected a lot of what I see in the marketplace. So today we're going to talk a little bit about those themes, and it brings data to a lot of the anecdotal things that I hear in the market. So just to start out, one of the themes that we saw is that auto technology is evolving. And unanimously, of people that filled out the survey and that we responded to, firms reported that the biggest change within the last decade was really moving to the cloud and AI adoption. 53% have said that tech added value through business insights, which we certainly see in the marketplace. And 30% say that their current legacy methodology is actually preventative to enabling transformation. So the awareness is certainly there and the market is responding to that. Yet 75% of firms have said they don't have a formal plan in place and they don't have a strategy wrapped around it. So what that says is that the awareness is there. We know there's these driving forces, but there's a gap in terms of execution on the transformation element. So I'm excited today to have Jeannie Barrett here with me from Schneider Downs, who is a shareholder at Schneider Downs and is the executive lead on the firm practice transformation around audit. Jeannie's background is as a practitioner, but she brings a really good and intentional lens, a progressive approach to technology, AI integration, process automation. And her perspective is not only setting a good foundation for the future of Schneider Downs, but is really an innovative lens that is meaningful, I think, to practitioners, to all practice areas. So, Jeannie, welcome, and we're glad to have you.

E (41:35)

Well, thanks for having me, Emily. You know, it's great to be here talking about my favorite topic, audit transformation, and continuing the conversation from previous ones that we've had. So I appreciate being able to kind of tell our journey and the things that we're seeing in the market and how we believe that this audit transformation isn't something to be feared, but something to embrace and really be excited for.

C (41:58)

That's right. And it does. There's some uncertainty, but it brings so much opportunity, and you've certainly capitalized on that opportunity at your firm. So I'm interested to hear your perspective. I know you've been very intentional as you've approached this transformation to look at both methodology of the audit practice and technology. So what was the catalyst that kind of shifted the conversation at your firm from awareness into action?

E (42:28)

Yeah, I mean, for Schneider Downs, the shift really began when we realized that, you know, we've Heard about this transformation coming someday, and we realized that someday was here, and the risk of, you know, standing still and not kind of of getting involved was a greater risk than moving forward. So, you know, we were seeing it from multiple directions, right? We were seeing it from clients. I mean, their expectations were changing. They wanted more insights. I mean, I heard that Matt talked about that earlier. They want, you know, more connection between our audit and the business risks that really matter to them. So that's the underlying methodology. No longer was the opinion, instead of financial statements going to really cut it for them. And then we were also seeing it from, you know, the. Not only the ones that we had, but the ones that we were recruiting. They want better tools to really help them do what they're supposed to do and improve their workflows and allow them to develop at a quicker pace. That's what they're looking for. That forced us to step back and look at our current audit methodology and technology supporting it and really say to ourselves, are we using IT and the audit process to its fullest potential? Are we really getting the leaving insights, or are we leaving insights on the table? Which what we realized was that's what we were doing. We realized that if the methodology itself didn't enable, you know, a more insightful audit, then no amount of investment in technology was going to support that. We just didn't want to digitize, you know, what we were doing as usual. So we really need to find a different way of doing things and have this technology that supported that different way. So as we're seeing it from our clients, we're seeing it from our people. The true catalyst of all of this was the leadership alignment, realizing that once we collectively realized that an incremental change wasn't going to be enough, given the regulatory environment, given the change of pace in technology, and also giving the competitive environment that we were in not only for growth, but for talent, the conversation quickly shifted. It shifted. That audit transformation stopped from being something that was going to happen one day into a strategic priority. And that's when we move from awareness to action. So really, was that all of the things happening at once, leadership evaluating how we were doing things, not just the technology that we were using to really shift our focus forward and to continue to embrace and lean into the transformation that was happening.

C (45:07)

That's great insight. And one of the things you mentioned is taking a step back and kind of looking at things and having a strategic, strategic approach. So one of the things that I hear every day, and I know as auditors, we're kind of. It's inherently within us. But we saw from the survey as well that efficiency is one of the elements that are generating change and igniting change. But I want to talk a little bit about that because efficiency and even the metrics that we're currently using and we've used for a long time within audit practices are starting to evolve. And while efficiency is a true traditional metric that is part of the conversation and can ignite the conversation, it's not the whole conversation. So today we know that majority of firms, 87% still track realization, while only 13% are looking at other metrics like client readiness or outcome based metrics. So in this world of evolving technology, we know that efficiency is not necessarily the most meaningful capture of how practices are doing. So it's more of an entry point. But I'd like to hear Jeannie a little bit more about how you're thinking about new metrics and ways to look at time and ways to look at success of the practice that's not as closely tied to maybe the billable hour or the race to the bottom, but really capturing the value that's being delivered to clients.

E (46:40)

Right. I mean, efficiency is where the conversation starts. I mean, we are accountants and we are used to rate times, hours, and that's how we measure success. If we can get those hours down, then we're successful. But you know, what we learned is efficiency alone isn't the goal anymore. It's really what you do with the capacity you're creating by the decrease in hours. So we're spending a lot of time with leadership, reframing. What does success look like? You know, what are we doing with this capacity that we're creating? Are we having spending more time with clients to have deeper conversations, not just asking about open items, lists? Are we spending time and encouraging our staff to spend different time, to develop differently, to upskill them? We hear that term a lot, upskilling. And I think that this capacity that we're creating really has to be more deliverable and more outcomes based is where we have to define success. You know, the race, if you don't set expectations and you don't really look at what are we going to do with this capacity. Efficiency can actually become a race to the bottom. And that's really what drives us. We've talked for years and years, as long as I can remember, about the concept of value billing. And it was at just that a concept because we always fell back to the old rate times, hours, you know, is how we build. But I really Think that value billing is going to become something that just becomes practical in reality, in this, how things are going to be changing. You know, I really. We're talking about it, we're putting parameters around it. We're shifting our focus away from efficiency saving us, really into what are the outcomes, what are the deliverables, what value are we delivering to our clients, and how do we capitalize on that rather than just how do we focus on that. We save time and hours because that's no longer going to be the best outcome or the best success metric to look at.

C (48:43)

That's exactly right. And it's about thinking differently. And certainly that value discussion is a part of that. One of the other things I just want to spend a minute on is when we talk about change and this transformation, it's about the technology, it's about the practice, but it's also about the people. And I know you've been very intentional about thinking through both from a client lens as well as a staff and retention lens. So we know that, you know, 50% of respondents on our survey said that tech improved client satisfaction. But can you talk a little bit about, you know, the impact and how staff and clients are thinking about this as well?

E (49:24)

Yeah, I mean, we see it in practice and in past 18 months, as we continue down this journey, we see our clients, you know, commenting, wow, you guys are really asking more insightful questions. You're really focusing on where our business risk is. So those are real live examples that kind of help demonstrate what the clients have been asking for. They want more insights. Advisory is the key thing right now. We want to make sure we're giving that we're spending time on those areas that mean most to our clients. And as for our people, it's really about reducing, I call friction, meaning they're spending less time doing the redundant tasks, and they're allowed to spend more time thinking differently, seeing the broader picture, really developing faster and engaging in conversations earlier in their career that they probably would not have had had we not had this shift in methodology and, you know, focus on new technology. It's so exciting to see it being out in the field and having conversations with staff and seeing them excited about stuff and about being able to deliver at a higher value quicker. It's really an exciting time for our. For our profession.

C (50:33)

That's excellent. Well, thank you so much, Jeanne. It's great having you as part of the conversation. And we appreciate the work that you're doing, and it shows that the work that you're doing, you know, it's not about doing something extreme. It's really about intention, setting a plan, having people at the forefront and connecting your tools and methodology in a meaningful way. So thank you for joining us today and I'll be digging in a little bit more on the A and A focus to the details and the data of the audit benchmark survey. And just in closing, Jeannie, if there's one thing you want people to remember, you know, if they're thinking about transformation and they watch our segment, what do you want to leave them with as a, as a piece of action for

E (51:16)

this week, it's really just embrace change and encourage transformation. If the people see the leaders doing it, then they're going to follow, they're going to know it's acceptable, they're going to take risks, they're going to think differently. So that would be my advice.

C (51:30)

Excellent. Thanks so much.

E (51:31)

Thank you.

C (51:34)

And back to you, Michael, Emily, Jeannie,

B (51:36)

that was a great discussion. There's a lot to unpack there. I think there's so much change and transformation happening around the audit area like the other practice areas. So we're going to try to bring as much information as we can to all of you. With that, I just wanted to remind everybody of some key resources available to you. Emily did a great keynote at our digital CPA event back in December where she talked specifically about redefining audit and so that's available. We also, Emily just and Jeanne just talked about it at least at high level, what the audit transformation report is out and available too. Lots of great information there. You can go much deeper into the details. And then lastly we have some information on the quality management tool and standard. I'm sorry, all that stuff can be found@cpa.com audit assurance. So thank you, Emily and Jeanne, we'll have you back in just a second. Before we bring up Open Forum, I did want to just remind everybody my good friend, your good friend and colleague Lisa Simpson implored me to please remind all of you that the PCPS top issue survey is available. It's out there. So we would love everyone to dig in and take it. It's one of the greatest, best ways for us to really understand just how all of you are viewing today's climate. So please take the time to fill that out. We'd love to get your feedback on it. It is open and only take 10 minutes, we promise here in the slide. So Lisa can she won't be mad at me now that I spent a few seconds reminding you of all that. Also I want to Just Rachel bring you back up. I know you wanted to talk to folks about the AICPA pack breakfast@engage.

D (53:33)

AICPA members are invited to an AICPA PAC breakfast at Engage 2026 that we will be holding on Tuesday, June 9th at the ARIA Hotel. Information about the packed breakfast is on the screen. If AICPA members would like additional information, they can use the QR code that is on the slide.

B (53:57)

Awesome. Thank you, Rachel. All right, open forum. Let's bring back our esteemed panel of speakers. Hello again, everybody. Great job you today. We probably have more questions like we always do than we have time for, but we do have some good questions. I want to go ahead and pose first. Melanie, I just want to invite you. I know you had a clarification you wanted to make on one of your earlier slides.

A (54:20)

So floor is your on the wagering slide. And some people pointed this out and they're absolutely correct. There is a typo there with regards to the for the information reports the threshold for 2000 that is effective for 2026. So what it says there is December 31, 2026. No, no, it should have been December 31, 2025. So it's for the year 2026 on.

B (54:45)

Thank you, Melody. That's the beauty of the town hall. You have 15,000 fact checkers reviewing your work. So to catch stuff. So I'm going to go ahead and ask Matt and Carrie a question. A lot of great questions coming in about your segment, gentlemen. If there's one theme or pattern that I notice in the questions and I feel like it comes up whenever we're on this topic, it's just the understanding the different models inherent, the whole continuum of tax planning to financial planning and where it begins and ends. And I think what it does is invite in this concept of the risk factor that gets introduced if you're going down this path and are you properly credentialed or licensed? So I don't know which one of you want to take that, but maybe you can just comment on that for people because there were a lot of folks that asked that question.

F (55:37)

I'll start and then let Matt kind of add to it. With the aicpa, we know that there are lots of different models. All of them are valid in some way and really you should find the model that's going to make meet where you're at. So that's why one of the resources is the guide to go where are you at right now? What is the next step for you? And implicit in that you'll Find exactly the right kind of model for how you want to do business. Matt, would you like to add to that?

G (56:09)

Yeah, I'll just put in a plug for actually the PFS credential. A lot of people aren't aware that that offers a Series 65 waiver and I believe 49 states in the US so that is license would be required for you to do fee based financial planning. So that credential is a great way to kind of take that first step.

F (56:30)

Matt, every time you say 49 out of the 50, you know, you're just driving a dagger into my heart. My home state of Alaska has not yet had the Series 65 waiver for the PFS, but we'll get get there.

G (56:46)

I never throw them under the bus.

B (56:50)

Matt, just a follow up, A couple of folks had picked up on the fact that you mentioned you reduced the number of returns in your practice by I think you said 20%. And they were just curious, was that through firing clients or was there some other way that you were able to achieve that?

G (57:07)

It has been a combination of disengaging clients as well as priority price increases. So I mean the, the age old that if you raise prices by 10 or 20%, 10 or 20% of the clients tend to leave.

B (57:20)

Right.

G (57:21)

That's, that's largely what we've been kind of on that path of for it

B (57:24)

was a natural attrition through certain actions. Okay. And Jeanne, we had one question for you. Is you and the team there at Schneider Downs goes through your audit transformation. Maybe the. If you could call out the biggest. I don't know, I' ask it maybe the best advice you have with regard to the change management process. When you're undergoing the type of change that you're undergoing there people, rightly so, just assumed it's a pretty big endeavor to get people on the bus in support of.

E (58:01)

Yeah, it is. I mean, I think it's important. You have to be able to pivot a lot, recognize that nothing's perfect. There's no roadmap to transformation. I think having people dedicated to change management, I mean it can be just one person helps as well, just to keep their finger on the pulse and make sure they're addressing the needs as they arise. But you have to be able to pivot. There's no easy way to it, especially in an industry where we are all adverse to change. But I think it's getting easier and easier because the younger generations are leading by example and demonstrating how they really embrace change.

B (58:40)

Great. Well, you had final word there, Jeanne. I want to thank all of our panelists and speakers today. You guys did a great job. Another great town hall. So with that, just in closing, want to remind the town hall audience the next town hall we have up is May 7th. And then just to call out that on June 8th we'll be live from Engagement Center Stage. So if you are at Engage, please do make it a point to come visit us there at the Town Hall. I also wanted to remind all of you that you may not have noticed but my slides There you go. We continue to try to update and improve upon the town hall experience. We created a new streamlined post town hall survey so we'd love your feedback and suggestions. We love your feedback each and every week and it's very important to inform how we continue to evolve the town hall. But we even we want your feedback specifically on how we go ahead and streamline the survey. So if you have any suggestions, are you happy with it? Is there something you'd like to see us do differently? It's one of our best tools to just continue to deliver state of the art content to all of you. So please do take the time to fill that out. So with that, just want to thank you all again for being with us here today. Emily, thanks for joining me in studio.

A (60:01)

Great to be here.

B (60:01)

Hopefully it wasn't as bad as they made it sound.

C (60:03)

It was amazing. It was great company.

B (60:06)

Thank you Emily. Great day to everyone. Hope you enjoy the rest of your day and we'll be back with you soon.

A (60:13)

Thank you for your participation.

D (60:15)

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A (60:17)

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B (60:33)

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