Enjoy our library of free downloadable content includes white papers, webinars, product guides, case studies, industry analysis and much more, provided by experts and vendors within the accounting profession. 

Membership

CPE & Events

Advocacy

What's Happening

Become a CPA

Header

 update your Membership Auto-Renewal payment method

Your go-to source for expert insights, industry updates, and exclusive CalCPA content. Stay ahead with practical guidance, pro tips, and must-know trends—all designed to fuel your success.

Stay ahead with essential CPA resources

Federal Tax Benefits to Help Clients Recruit, Retain Employees

Benefits don’t have to break the budget. From paid leave and student loans to child care, HSAs and retirement plans, federal tax breaks can help your clients build benefits packages that attract and retain talent.

Your Biggest AI Risk Isn’t the Technology

Many organizations spend lots of time selecting technology. Far fewer invest the same energy in improving decision-making after the technology is implemented. That’s where competitive advantage will emerge.

Building a Career in a Changing CPA Profession

The path to becoming a CPA is changing, like the profession itself. At CalCPA’s Candidate Town Hall, experts shared what candidates need to know about licensure, AI, career opportunities and the skills employers value most.

Where the Profession Goes Next

CalCPA is helping lead the conversation about the profession’s future. Discover the ideas and insights that emerged from the recent CalCPA Leadership Forum when experts came together to tackle the profession’s challenges and opportunities.

Golden State wisdom straight from the experts

Professional Interest Areas

Accounting & Finance

Audit & Assurance

Business & Firm Management

Business & Industry

Client Advisory Services (CAS)

Estate & Trust Planning

Forensic Services

Government

International

Not-for-Profit

Personal Financial Planning

Professional Development

Technology

Morning coffee and curated news?  Get the top headlines and information to keep you ahead in the business world..

Daily Clips newsletter

Rise & Stride Podcast

brainfood bytes

Listen and watch...

Looking for an old article or a past issue from California CPA magazine? You're in the right spot!

Past articles and archives

CPAs: Making Sense of What Comes Next campaign

The U.S. unemployment rate and claims remain historically low. Job openings are high. The labor market is tight. Immigration crackdowns aren't helping. AI doesn't seem to be having much of an impact … yet. It’s not easy finding talent.

Ask your clients and they’ll tell you that they’re looking for good people. Attracting and retaining talent continues to be among the top concerns of all small and midsize businesses, particularly when they’re competing with much larger corporations for a limited labor pool and other organizations that have more resources.

As CPAs, we can help our clients address this issue. How? By making sure they're aware of several ways that the federal government helps to pay for their company’s employee benefits.  

Businesses with more than 50 employees generally must comply with the Family and Medical Leave Act and provide up to 20 work weeks of unpaid leave for employees who need the time off for having a child, taking care of a dependents or other reasons.  

But if your client is willing to pay a portion (at least 50 percent) of their compensation while on leave, there's a tax credit available—the 

Employer Credit for Paid Family and Medical Leave under Internal Revenue Code Section 45S

—that could reimburse them for between 12.5 percent to 25 percent of what they paid.  

The 2025 One Big Beautiful Bill Act (OBBBA) expanded this credit to include paid leave insurance options and made it permanent.

People like to learn and, as an employer, your clients can help. Thanks to an 

, an employer can deduct (and employee excludes) up to $5,250 per employee per year in tax-free educational assistance provided under a qualified Section 127 written plan.  

The appealing part of this deduction is that “education” doesn't necessarily have to be job related. Sure, it’s good to get reimbursed for a professional class or certification, but if your employee wants to learn origami, take an advanced Japanese cooking class or horse-riding lessons, you can use this deduction for those purposes too. 

Some of my clients encourage their employees to do something different from their work, just to add variety and other interests to their lives.

In addition to the education assistance deduction, I would be remiss for not mentioning a 

 that allows employers to fully deduct (and employees to avoid income) on the cost of reimbursing as much as $5,250 for student loan payments that their employees make, which is a huge help, particularly to younger workers saddled with high college debt.

Many employees have issues finding childcare for their kids, and when they can’t find the care, they often can’t come to work. The good news is that the federal government provides help for employers who want to help their employees.  

Under Internal Revenue Code Section 125, employers can establish “cafeteria plans” that allow employees to pay for 

 with up to $7,500 in pre-tax dollars for eligible dependent care expenses for children under the age of 13. For those employers looking to 

build a childcare facility, contract with a facility or partner with a childcare provider

, up to $600,000 of tax credits are available based on a percentage of what’s spent and depending on the option chosen. 

 that can be calculated now based on $3,000 of eligible expenses for one child, or up to $6,000 for two or more children. Some businesses are hiring their CPAs to assist their employees in maximizing the use of this credit on their individual returns, because the more help an employee gets with their childcare needs, the more time in the office they’re able to spend.

Gas prices are high and many employees, particularly those in urban areas, are turning to public transportation to keep their expenses low. As an employer, your client can help by making tax-free reimbursements to those employees for up to 

If an employee adopts an eligible child, and depending on their income, they may be able to claim the Adoption Credit or income exclusion for employer-provided adoption benefits. 

 are limited to $17,670 per qualifying child with up to $5,120 refundable. I have several clients who offer this as a benefit and yet have never had the chance to use it. But it's a nice benefit to offer and, in my opinion, does say a lot about the person who owns the business.

This is a no-brainer. Any business that has a high-deductible health plan (and most SMBs do) can also attach a Health Savings Account (HSA) program to that policy. HSAs have become enormously popular for employees over the past few years.  

 as much as $4,400 pre-tax to their HSA (family contribution is $8,750), and those over 55 years can contribute another $1,000. 

Those funds can then be used for a variety of unreimbursed health care expenses ranging from over-the-counter pharmaceuticals to acupuncture. What's great about HSAs is that the employee doesn't lose what they’ve contributed at the end of the year, their balances continue to grow, and they can take their money with them if they change jobs. Many I know say it’s like having a 401(k) for their health care, and they're not wrong.

Speaking of 401(k)s, many of my clients are still unaware of all the ways the 

 from 2019 and 2022 can provide government assistance for setting up 401(k) retirement plans. 

There are tax credits available for many eligible businesses, not only for starting up a new 401(k) plans but also for employers who match their employees’ contributions. Employers can also match student loan payments and enroll more part-timers in their plans, which could increase their loyalty. 

Starting this year, individuals can open 

 to put money away for their kids. Individuals and families can annually contribute up to $5,000, which is excluded from the employee’s income under a qualifying employer program. 

However, your clients can contribute half of that on a pre-tax basis to their employees’ accounts. The funds are then available to the child at 18 and can be withdrawn subject to typical IRA requirements. New parents with children born from Jan. 1, 2026, through Dec. 31, 2028, will get a $1,000 contribution from the government, no strings attached, but subject to citizenship, having a valid Social Security Number and other requirements.

Clients often assume a richer benefits package is beyond their budget. Before they rule it out, CPAs should show them how federal tax credits and employee tax exclusions can lower the cost.  

Artificial intelligence has become the accounting profession’s biggest discussion point. Need faster reporting? Add AI. Need greater efficiency? Automate with AI. Need better forecasting? Buy an AI platform.

Technology vendors aren't wrong. Modern tools can dramatically improve productivity, automate repetitive work and uncover insights humans might miss. But here's the uncomfortable truth: Every new technology creates another layer of decisions that people—not algorithms—must still make.

Which AI recommendation should you trust? Which exception deserves investigation? Which process should remain under human oversight? Which dashboard really matters? When should experience outweigh what the AI model suggests?

We're automating transactions faster than we're preparing people to make better decisions. That may become AI's biggest unintended consequence.

Across public accounting, corporate finance, government, nonprofits and internal audit, AI is transforming routine work. That's exactly what it should do. The profession has spent decades trying to eliminate repetitive tasks so professionals can focus on work that creates greater value.

But removing manual work doesn't remove responsibility. Instead, it shifts responsibility. Professionals increasingly spend less time preparing information and more time deciding what it means. That's a fundamentally different job. And it's one many organizations haven't fully prepared people to do.

Organizations don’t lack AI tools, but many haven't established clear governance around how those tools should be used. Teams often purchase multiple solutions that perform similar functions, leaving professionals to decide which recommendation to trust, which workflow to follow and who owns the final decision. Instead of reducing complexity, technology can unintentionally create it.

Too Much Information Is Becoming the New Bottleneck

Most organizations no longer struggle with access to information. They struggle with deciding what information deserves attention. Dashboards highlight problem areas. AI summarizes meetings. Analytics surface anomalies. Automated systems generate alerts. Every notification competes for attention. Every recommendation asks for approval. Every exception becomes another decision.

Decision science has long shown that as choices multiply, people become slower, less confident and more likely to avoid difficult decisions altogether. 

 that AI is making people “three times less accurate, but twice as confident.”

That's a dangerous trend in a profession built on sound judgment.

AI Changes Responsibility—Not Accountability

One of the biggest misconceptions about AI is that it somehow transfers accountability. It doesn't.

But people still certify the financial statements and sign the audit report and tax return. People still advise clients, steward public resources, support business leaders and make decisions that affect employees, investors and communities. Professional judgment isn't disappearing. It's becoming more valuable.

Many organizations spend enormous amounts of time selecting technology. Far fewer invest the same energy in improving how decisions are made after the technology is implemented. That's where competitive advantage will emerge. 

The organizations that thrive won't simply automate more work. They'll establish clear decision rights, improve data quality, create governance around AI recommendations and develop professionals who know when to trust technology—and when to challenge it.

That's not a technology strategy. It's a leadership strategy.

 Organizations with the strongest technology strategies share one characteristic: they don't treat AI as the destination. They treat it as an enabler. They build governance before scale. They clarify decision rights before automating workflows. They invest as much in developing people's judgment as they do in purchasing technology.

Eventually, everyone will have access to similar AI tools. Not everyone will have professionals capable of using those tools wisely. The future of accounting won't be determined by who owns the newest technology. It will be determined by who develops the strongest judgment.

AI can process information at extraordinary speed. It still can't replace wisdom. And wisdom—not automation—will remain the profession's ultimate competitive advantage.

The path for today’s CPA candidates from accounting student to CPA is taking place against a backdrop of rapid change that’s reshaping how accounting work gets done, where CPAs work and the skills employers value.

What candidates need to know to best navigate this new landscape was the focus of a recent CalCPA Candidate Town featuring Garrett Shakstad, a CPA, instructor and senior recruiter associate with NKSFB, and David Hemphill, information officer at the California Board of Accountancy. The two broke down what today’s candidates need to understand about the CPA Exam model, licensure requirements, hiring trends and how firms are evaluating early-career professionals. 

Artificial intelligence, outsourcing and offshoring, private equity investment and industry consolidation are all influencing the accounting profession. Shakstad acknowledged that no one knows exactly how AI will ultimately affect accounting, but its impact is already being felt.

“No one knows for sure what's going to happen with artificial intelligence other than we know that it is currently changing things and it will continue to change things,” Shakstad said, who encouraged candidates to embrace AI. “My request is that we embrace artificial intelligence because it's going to be here. And if you can figure out how to make it a tool that you use, good things can happen.”

That changing landscape may make the profession feel uncertain, particularly for students preparing to enter the workforce, but Shakstad offered a different way to think about it: Change can create opportunity.

“Change always brings about really good opportunities for folks,” he said.

For candidates, that means looking beyond a single definition of what a CPA career looks like. While traditional accounting firms remain an important part of the profession, opportunities are emerging across business management, outsourced accounting, bookkeeping and family-office environments.

While technical accounting knowledge remains foundational, Shakstad cautioned candidates against assuming that employers expect them to arrive with extensive accounting experience. Rather, he explained how employers are looking for something more and highly value qualities such as talent, time management, leadership, self-reliance, coachability and the ability to learn from mistakes.

That makes the candidate’s ability to demonstrate interpersonal and professional skills increasingly important. In an environment where technology and AI can handle more tasks, human capabilities can become an even greater differentiator.

“Even in this age, soft skills matter way more than they ever have. They've always been important, but especially in an age with a lot of AI and a lot of computer work, your interpersonal skills and your soft skills matter more than ever,” he said.

His advice: Be more than your résumé. Build relationships with professors, mentors, alumni, professional organizations and potential employers. Getting in front of people allows employers to see the person behind the credentials and the qualities that person brings to the workplace.

Learn to Take Feedback—and Learn from Mistakes

Two of the most valuable skills discussed may also be among the hardest to demonstrate on a résumé: coachability and self-awareness.

Shakstad said employers want people who can work independently, think through problems and research possible solutions, as well as recognize when they have reached the limits of what they know and ask for help.

“Being able to adjust and correct is a massive skill to have,” he said. 

Candidates who respond positively to coaching demonstrate willingness to grow and can encourage supervisors and co-workers to invest in their development.

“All of us make mistakes,” Shakstad said. “We are not looking for someone who doesn't make mistakes because it doesn't exist.” Instead, employers want people who understand what went wrong, learn from it and improve.

For candidates, that changes the way they should approach interviews. Rather than simply describing a mistake, Shakstad advised spending more time explaining what was learned and how the experience led to growth.

Candidates also received an update on a significant change to the California CPA licensure pathway.

Beginning Jan. 1, 2027, new requirements established under 

 will create a new licensure pathway that is more flexible, affordable and accessible for aspiring CPAs, while preserving the strong consumer protections the profession is known for.

During 2027 and 2028, candidates will have a choice between the existing “legacy” pathway and the new requirements.

Under AB 1175, CPA candidates must earn a bachelor’s degree with an accounting concentration, pass the Uniform CPA Exam and complete two years of general accounting experience. For added flexibility, candidates can substitute a qualifying master’s degree for one year of experience, or an approved accounting certificate program for six months of experience.

One of the biggest changes is education. Under the new pathway, the additional education needed to reach 150 total units is eliminated. The education required to sit for the CPA Exam will also satisfy the education requirement for licensure.

The tradeoff is additional experience. Beginning in 2027, the general accounting experience requirement increases from one year to two years. However, certain educational options can offset some of that experience requirement, including a qualifying master's degree and certain community college or extended studies certificates.

Perhaps the most important takeaway from the Town Hall was that becoming a CPA is more than completing an exam, meeting education requirements and accumulating experience.

It’s also about becoming the kind of professional who can adapt as the profession changes.

AI may reshape tasks. Firms may consolidate. New business models may emerge, and licensure requirements may evolve. While candidates can’t control those forces, they can control how they prepare, the relationships they build, the skills they develop, their willingness to learn and how they respond when things do not go according to plan.

, which will focus on "Beating Burnout Before It Begins: Mental Resilience for CPA Candidates." 

What does the accounting profession need to become, not just today, but five or 10 years from now?

That question was at the heart of the recent CalCPA Leadership Forum, which brought together members and thought leaders from across the profession to examine emerging challenges, explore opportunities and help shape the direction of the profession.

Technology, changing client expectations and new workforce demands are reshaping accounting. Firms are being asked to provide greater insight, respond faster, develop people differently and continue earning trust as the work itself changes.

With California often serving as a leader for the rest of the country—“What California does, everybody else follows,” as one participant put it—the Forum focused on four connected areas: Market Expectations, Rethinking the Talent Model, The New Professional & The Human Premium, and The Strategy of Innovation.

The goal was not to predict where AI or the profession is headed. It was to focus on what leaders should be thinking about and doing now.

The Forum was designed around conversation. Panelists established the context for each topic before participants moved into facilitated table discussions to explore questions, challenge assumptions and share their own experiences. Each session concluded by bringing those perspectives back to the full room.

Panelists included Ginnie Carlier, Chief Talent and Culture Officer, EY; Puja Dalmia-Ramasubban, Senior Tax & Accounting Advisor; Al Dea, The Edge of Work Podcast; Dan Hood, Editor in Chief, Accounting Today; Kacee Johnson, FinTech and Innovation Thought Leader; Matt Martin, Managing Director, PDM LLP; Dean Quiambao, Chief Relationship Builder, Armanino; and John Sensiba, Partner, Sensiba LLP.

The conversation began with the market and a fundamental question: What do clients increasingly need from the profession, and how can firms meet those expectations?

Clients have access to more information, more technology and more choices than ever before. At the same time, the decisions they face are becoming more complex. That combination is changing what clients expect from their advisers. The discussion explored how firms can move beyond simply delivering what clients ask for to understanding what they actually need and providing greater insight, clarity and confidence.

From there, the conversation moved inside the firm and the changing talent model. For generations, firms have relied on a professional pyramid built on a large base of early career professionals doing foundational work and gaining experience as they advance. As AI and automation take on more of that work, participants explored what happens to that model.

As foundational work changes, so does the experience people gain from doing it. Participants explored what that means for how firms structure teams, develop talent and prepare professionals for greater responsibility. The conversation also looked at how career paths may evolve and what established firms can learn from organizations being built around new technology and new ways of working from the start.

That led to the individual professional and the idea of a human premium. If technical information becomes easier to access and AI can perform more analysis, what makes a professional truly valuable?

Participants pointed to capabilities such as judgment, professional skepticism, ethical reasoning, communication, relationships and trust. These have always mattered, but they may become even more important as technology takes on more routine and analytical tasks.

The challenge is how to develop them. Early career professionals have traditionally built judgment and confidence through foundational work, client interactions, mistakes, coaching and repetition. If some of those experiences disappear or change, firms and educators will need to be more intentional about creating new ways for professionals to develop the capabilities that experience once built over time.

Finally, the conversation turned to innovation and a challenge facing firms across the profession: How do you move from experimenting with new ideas to changing how the organization works?

Firms are experimenting with AI, workflow automation, new service models and different approaches to staffing. But experimentation does not automatically lead to transformation. Participants explored the role strategy, culture and leadership play in determining whether an idea remains a pilot or becomes part of how a firm operates.

Across all four conversations, AI was a consistent thread. As technology becomes better at accessing information, performing analysis and producing answers, the profession’s value may increasingly lie in what professionals do with those answers. Helping clients understand what matters, asking better questions, exercising judgment and knowing when to challenge an answer may become even more valuable.

Asking the Questions to Build Better Direction

Understanding what is changing is only the beginning. The bigger challenge is asking the right questions about what those changes mean and using the conversation to help shape where the profession goes next.

Where is client value shifting? How will people gain experience as foundational work changes? What will distinguish CPAs when technical information is easier to access? Why are some firms creating meaningful change while others remain stuck in pilot programs?

There isn’t one answer to any of these questions, and the answers will continue to evolve. That’s why CalCPA is championing these conversations that help the profession shape its future. By bringing together different perspectives, challenging assumptions and exploring new ideas, we can begin to build better direction for what comes next.

And the Leadership Forum was intended as just the beginning of that conversation.

Looking ahead, CalCPA will explore each of the four major topics discussed at the Forum through a series of articles that dig deeper into the challenges, opportunities and questions beginning to take shape.

Those ideas and perspectives will also come together in a broader report examining what they may mean for the future of the profession. The report will highlight key themes and emerging questions while exploring how CPAs, firms, educators and other profession leaders can prepare for what comes next.

Most importantly, the work will help continue the conversation and identify opportunities for CalCPA to gather, support new ideas and help the profession turn change into meaningful progress.

Financial reporting is entering a new era of transparency. With the issuance of Accounting Standards Update (ASU) 2024-03, the Financial Accounting Standards Board (FASB) has introduced the 

Disaggregation of Income Statement Expenses (DISE) standard

, codified in ASC 220-40. This new requirement is poised to significantly impact how public business entities present and disclose expense information, offering investors and stakeholders a clearer window into the true drivers of company performance.

For years, investors and analysts have called for more granular information about expenses reported in financial statements. Traditionally, companies have presented expenses by function—such as cost of sales, selling, general and administrative (SG&A), or research and development (R&D). While functional reporting provides a high-level view, it often obscures the underlying nature of costs, making it difficult to compare companies or assess trends over time.

The DISE standard responds to these concerns by requiring public business entities to break down—or “disaggregate”—key expense captions into natural expense categories. The goal is to help users of financial statements better understand what’s driving costs, assess future cash flows and make more informed investment decisions.

The heart of the DISE standard is a new tabular disclosure in the notes to the financial statements. For each relevant expense caption presented on the face of the income statement—such as cost of goods sold, SG&A or R&D—companies must disclose the amounts attributable to the following natural expense categories:

In addition to these categories, companies must integrate certain existing disclosures, such as impairment losses, exit costs and warranty expenses, into the new table. The standard also requires disclosure of total selling expenses and a clear definition of what constitutes “selling expenses” for the reporting entity.

If a company receives or pays expense reimbursements (for example, through cost-sharing arrangements), these must be disclosed either as separate line items or netted against the relevant expense category, accompanied by a qualitative explanation.

Recognizing the operational complexity of inventory accounting, the standard provides two acceptable approaches for disaggregating inventory-related expenses:

This flexibility reflects a deliberate balance between investor usefulness and preparer operability, while still requiring consistent application once a method is selected.

In practice, it is expected that many entities will elect to use the cost incurred basis when a relevant expense caption contains inventory related expenses. While the expense incurred basis provides conceptual alignment with cost of sales, it can be operationally challenging to track and recharacterize inventory costs that were capitalized in prior periods—particularly in complex or global supply chains, standard costing environments or situations involving long inventory holding periods. 

As a result, the cost incurred basis is likely to be viewed by many preparers as the more operable and sustainable approach, while still achieving the transparency objectives of the DISE standard.

The DISE standard is effective for annual periods beginning after Dec. 15, 2026, and for interim periods within annual periods beginning after Dec. 15, 2027. Early adoption is permitted. Companies may apply the standard prospectively or retrospectively, but regardless of the approach, the time to prepare is now.

Implementation: More Than a Compliance Exercise

Implementing DISE is not simply a matter of updating disclosures. It requires a comprehensive review of systems, processes and internal controls. Companies should begin with a diagnostic phase, identifying which expense captions and natural expense categories apply to their business. A gap analysis will reveal whether existing systems can capture the necessary data or if upgrades are needed.

Cross-functional collaboration is essential. Accounting, finance, IT, procurement and investor relations teams must work together to develop business requirements, update policies and design new processes. Training and communication are critical to ensure that staff understand both the technical requirements and the practical implications for day-to-day operations.

DISE presents several challenges. Companies must determine whether their ERP and reporting systems can accurately capture and report the required expense categories. Defining “selling expenses” in a way that is both meaningful and consistent with industry practice may require careful judgment. Decisions about whether to transition prospectively or retrospectively, and whether to use practical expedients for inventory or employee compensation, will have significant implications for both reporting and operations.

Stakeholder communication is also vital. Management, audit committees and investors will need to understand the changes and their impact on reported results.

The Disaggregation of Income Statement Expenses standard marks a significant shift in financial reporting. By providing greater transparency into the nature of expenses, DISE will help stakeholders make better-informed decisions and foster greater trust in financial reporting. While the road to implementation may be complex, companies that embrace the change will be well-positioned to deliver enhanced value to investors and other users of their financial statements.

Roll the DISE: A New Era of Expense Transparency

A new FASB standard is reshaping expense reporting—here’s how it changes the way performance is revealed.