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Stay ahead with essential CPA resources

A Trusted Ally of the Profession: CalCPA Recognizes Assemblymember Jacqui Irwin

From landmark licensure reform to thoughtful committee leadership, Assemblymember Jacqui Irwin’s work has helped expand access to the profession while protecting the public interest—leaving a lasting mark on California CPAs.

CalCPA Celebrates 125 Years of California CPAs

A milestone Senate resolution honors 125 years of the CPA profession under the California Board of Accountancy and highlights how the focus remains on serving the public—and shaping what’s next.

Modern Firms, Modern Rules: CalCPA Responds to NASBA

As private equity and alternative practice structures reshape accounting firms, CalCPA shares its perspective with NASBA on how the profession can modernize responsibly—without compromising trust, independence or audit quality.

2025 Fast Tax Facts

Our annual, easy-to-use guide of federal and state tax information is back—and packed with updated tax rate schedules, essential facts and figures to help you breeze through tax season.

Fast Tax Facts 2025

Golden State wisdom straight from the experts

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CPAs: Making Sense of What Comes Next campaign

During the CalCPA Council meeting, Legislative Summit and CPA Day at the Capitol this week, CalCPA recognized a legislative partner who has had a lasting impact on the CPA profession in California: Assemblymember Jacqui Irwin.

Representing California’s 42nd Assembly District—encompassing Thousand Oaks and communities throughout Ventura County and parts of Los Angeles County—Irwin has been a consistent, thoughtful and highly respected ally of CalCPA and its members throughout her time in the Legislature. Known for her pragmatic approach, commitment to data-driven policymaking and ability to work collaboratively across party lines, she has helped advance responsible policies that strengthen both the profession and the public interest.

Her leadership includes authoring landmark legislation to modernize CPA licensure and expand access to the profession, helping ensure California’s CPA pipeline remains strong for generations to come. 

“While you're looking for a legislator partner worth investing time and trust, you look for someone who listens, engages and works collaboratively to advance our policies. Someone with a thoughtful, pragmatic approach who values data, understands real-world impact and focuses on long-term outcomes. For CalCPA, that person has been Assemblymember Jackie Irwin,” said CalCPA Chair Jillian Phan. 

Modernizing CPA Licensure and Expanding Access

Among Irwin’s most significant contributions to the profession is her leadership on landmark legislation modernizing CPA licensure in California. In 2024, she authored AB 1175, a CalCPA-sponsored bill that created more flexible and accessible licensure pathways while preserving California’s strong consumer protection standards. She also authored AB 298, which allows CPA candidates to sit for the exam earlier in the licensure process.

Together, these measures represent some of the most impactful licensure changes in recent years—changes designed to strengthen the CPA pipeline and make the profession more accessible to future generations.

“I am very honored that CalCPA is recognizing me—for a second time,” said Irwin. “Through my many years on the Business and Professions Committee and my previous legislation with CalCPA, I can honestly say that the work you do is crucial to our communities.”

Beyond individual bills, Irwin has played an influential role in shaping policy that affects CPAs through her committee leadership. As chair of the Assembly Revenue and Taxation Committee, she helped evaluate complex proposals, craft responsible tax policy and—just as critically—prevent problematic ideas from advancing. She has also been a longtime member of the Assembly Business and Professions Committee, where licensure and regulatory issues central to the CPA profession are regularly debated.

Reflecting on AB 1175, Irwin emphasized the balance the legislation struck. 

“Yes, we made licensure pathways more accessible, but we also made sure that we maintained the state’s strong consumer protections,” she said. “The demand for CPA services only continues to grow, so it’s crucial that California has a diverse, talented workforce we can all count on.”

She also took a moment to recognize the staff members who helped make the legislation possible, underscoring the collaborative nature of the work. 

A Lasting Impact—and Continued Partnership

While Irwin’s recognition comes as she reaches the end of her legislative service due to term limits, it does not mark the end of her public service. As she prepares for the next chapter—running for Congress—CalCPA looks forward to continuing working with her at the federal level.

It was fitting that the recognition took place at the start of CPA Day and CalCPA’s Council meetings at the Capitol—an event centered on advocacy, partnership and the future of the profession.

 to commemorate the 125th anniversary of California CPAs and recognize their more than a century-long role in building trust, accountability and integrity across the state’s economy and public institutions. The resolution also highlights the creation of the California Board of Accountancy and its longstanding consumer protection role overseeing the profession.

“For 125 years, CPAs have advised the decisions, businesses, and institutions that keep our state moving forward,” said Densie LeDuc Froemming, CalCPA’s president and CEO. “Their commitment to the public interest has meant that Californians can trust in the financial systems we all rely on, and that commitment will continue to define CPAs in the state’s next 125 years.”

The resolution celebrates 125 years of the CPA profession under the oversight of the CBA, recognizing generations of CPAs whose work has grown the state’s economy, protected the public interest and supported whole communities across the state, while appreciating the profession’s ongoing leadership and impact in the years ahead.

“For 125 years, the CBA has protected consumers and upheld trust in the practice of public accountancy,” said Kristian Latta, the CBA’s president. “This milestone reflects our enduring commitment to strong standards, ethical conduct, and accountability as we continue serving Californians, today and into the future.”

The Accountancy Act, signed into law on March 23, 1901, authorized the licensing and regulation of public accountancy by CPAs, and established the CBA to oversee the profession.

The CBA ensures only qualified licensees practice public accountancy, so that consumers are informed and receive fair and accurate services from reputable professionals. Based in Sacramento, the CBA licenses and renews CPAs; registers accounting firms; enforces continuing education requirements; investigates complaints; and takes enforcement actions as necessary to engender public confidence in the practice of public accountancy. 

Established in 1903, CalCPA is the largest state CPA society in the country, representing and supporting certified public accountants and related professionals in California.

From left, Dominic Franzella, CBA Executive Officer; CalCPA President & CEO Denise LeDuc Froemming; Sen. Roger Niello; CalCPA Chair Jillian Phan; CBA President Kristian Latta.

Private equity is no longer a fringe topic in the accounting profession. Firms of all sizes are increasingly exploring private equity (PE) partnerships and alternative practice structures (APS) to modernize operations, invest in technology, expand services, and address succession challenges. While APS models themselves have existed for many years, the scale and pace of PE investment have accelerated their adoption—reshaping the profession faster than many existing regulatory frameworks were designed to accommodate.

 to the National Association of State Boards of Accountancy (NASBA) Private Equity Task Force on its white paper, 

Alternative Practice Structures & Private Equity: Considerations and Questions for Boards of Accountancy

. CalCPA’s comments are intended to ensure regulatory discussions are informed by practical insights from the profession as stakeholders evaluate this important and evolving issue.

This moment represents an inflection point for the profession, but it does not need to become a dividing line. If firms, regulators, and professional organizations move forward in isolation or at cross purposes, the profession risks weakening its cohesion and undermining public confidence.

CalCPA’s comments emphasize the importance of collaboration and alignment across the profession. This is an opportunity for regulators, standard-setters, and firms to work together to modernize guardrails—not to pick winners or losers among business models.

At the center of CalCPA’s response is a clear priority: protecting the quality and integrity of the attest function. As firm structures become more complex, audit quality cannot rest on any single safeguard. It requires a coordinated approach that brings together professional standards, regulatory requirements, firm governance, and organizational culture.

In APS and PE–backed environments, this means clear separation between attest and non-attest entities and independent governance for attest firms. Attest practices must retain exclusive authority over client acceptance, engagement performance and conclusions, partner evaluation and compensation related to attest work, and quality control and risk management. Protections against non-attest influence are essential to preserving independence, audit quality, and public trust.

Not All Challenges Are About Private Equity

Importantly, many of the challenges highlighted in the NASBA white paper—such as confusion around the use of the CPA designation—are not caused by APS or PE alone. Instead, they reflect regulatory frameworks that have not kept pace with modern firm practices, multi-state operations, and evolving consumer expectations. As firms continue to modernize how they deliver services, these gaps are becoming more visible, creating uncertainty for licensees and firms and confusion for consumers.

CalCPA believes this is a signal that broader regulatory updates may be warranted to reflect today’s practice realities, improve consumer understanding, support the profession’s talent pipeline, and preserve the CPA designation as a trusted and relevant signal in the marketplace.

CalCPA’s comments also caution against framing PE as an all-or-nothing proposition. Many firms pursue PE thoughtfully and responsibly, while others intentionally remain independent for sound strategic and cultural reasons. Both approaches have a role in the marketplace and can serve the public interest. Risk profiles are not uniform across firms—regardless of ownership model—and effective oversight should focus on governance, independence, transparency, and accountability rather than ownership structure alone.

Additionally, not all PE investors present the same risks. Sophisticated investors often recognize that protecting independence and audit quality supports long-term value. At the same time, there is a risk that some investors may not fully appreciate the public-interest obligations tied to attest services, reinforcing the need for clear standards and consistent enforcement.

To support informed engagement on these issues, CalCPA established the Alternative Practice Advisory Group (APAG), bringing together members from across the profession, including both PE-backed APS firms and firms that remain independent. The group helps CalCPA evaluate proposed regulatory changes, assess impacts on licensees and consumers, and contribute thoughtfully to national discussions like NASBA’s white paper.

As the profession continues to evolve, CalCPA remains committed to helping members—and regulators—make sense of what comes next, while safeguarding the trust that defines the CPA profession.

Looking ahead, CalCPA will also be reviewing and assessing the 

AICPA’s Professional Ethics Executive Committee (PEEC) exposure draft

 proposing updates to the AICPA Code of Professional Conduct related to APS and PE. We anticipate providing input as part of that process to help ensure any updates to professional standards are clear, workable, and aligned with protecting the public interest while reflecting how firms operate today.

The challenges associated with firms attracting and retaining talent are expansive and include issues such as staffing qualified professionals for complex engagements, employee burnout, unrealistic and “heavy” workloads, as well as limitations on the ability to maintain and foster high-touch client relationships.

As firms evaluate options to get work done efficiently and effectively with limited resources, more firms are considering outsourcing. There are two primary outsourcing scenarios:

Due diligence is a critical first step when considering outsourcing, as not all outsourcing entities are created equal. For example, CPAs are responsible for protecting their clients’ data and, as such, must ensure the third party has appropriate security protocols and safeguards to protect confidential information.

As part of that due diligence, firms need to assess the adequacy and reasonableness of the entity’s administrative, physical and network security to prevent breaches. This includes (but is not limited to) determining whether the entity’s safeguards are reasonable to prevent the potential misuse or unauthorized disclosure of confidential information to comply with applicable data and privacy laws, professional standards and the firm’s contractual terms. There should be explicit written terms in any contractual agreement with the third party that confirms the responsibility of the outsource entity to maintain the security and confidentiality of client information.

CAMICO encourages CPAs to review proposed outsource agreements to understand the implications of the agreement’s legalese to make an informed assessment of terms and conditions that may place undue burden or unacceptable liability exposure on your firm. Make sure you are comfortable with the agreement—and be willing to reject outsourcing options if unable to negotiate the terms and risk to your satisfaction

Important risk management considerations firms should address include:

: With AICPA rules (see ET sections 1.150, 1.300 and 1.700, et seq.), CPAs using third-party service providers reach agreements with the providers containing contractual terms ensuring the confidentiality of their clients’ records.

Further, AICPA ethics rules state members are responsible for all work outsourced to third- party service providers.

As part of the firm’s responsibility to ensure that all professional services are performed with professional competence and due professional care, firms must supervise these professional services. As such, the firm is responsible for the accuracy and completeness of the services delivered by the providers.

: In general, Internal Revenue Code Sec. 7216 and Treas. Reg. section 301.7216-3 require tax return preparers obtain written consents from taxpayers for the disclosure or use of their tax return information. The IRS has special rules for disclosing tax return information outside the United States under IRC 7216 regulations and the regulations thereunder, which protect disclosures of any income tax return information.

Keep in mind IRC 7216 is a federal criminal provision. As such, if a firm is investigated by the IRS for failing to follow applicable IRC 7216 disclosure and consent requirements, it will likely be considered a criminal matter. Therefore, it is important that a firm understands and addresses IRC 7216 implications when modifying the firm’s policies and procedures for outsourcing tax services.

Federal Trade Commission (FTC)/ Gramm Leach Bliley Act (GLBA)

: FTC rules require providers of financial services or financial institutions (e.g., CPAs) to oversee third-party provider use of information and ensure compliance with the GLBA. Under these rules, CPAs must:

: CPAs should consult with their respective state boards of accountancy to determine applicable client disclosure requirements as there may be states (California, for example) that prohibit outsourcing without the client’s written permission and require written disclosure and client permission when the outsourcing is outside of the U.S.

: Firms may have executed non- disclosure/confidentiality agreements in place with existing clients that may need to be reviewed to ensure the firm does not breach any contractual terms of those agreements. Based on the specific industries and/or services the firm specializes in, there may be other regulatory bodies (e.g., SEC, DOL, etc.) that may have disclosure and consent guidance that should be reviewed for compliance.

Stay current on the rules and risks associated with outsourcing.

CAMICO policyholders with questions regarding this or other risk management questions may contact the Loss Prevention department 

Contemplating Outsourcing?

Before you move work outside your firm—onshore or offshore—make sure you understand the hidden risk management, compliance, and data security issues that could expose you to serious liability.

On my commute home the other day a stranger asked if he could get my opinion on a song he had written. He played it for me on his phone, and it was great! It had a soothing melody and the words (from what I could hear over the loud train) had a nice flow that elicited melancholy. He then excitedly showed me how he used AI to create the song with his lyrics and carefully worded prompts on the envisioned melody and cadence. 

What used to take a whole team of producers, singers, musicians and others could be achieved on his device in less than two minutes. 

We all know that AI is here to stay and there are a plethora of ways that it can—and has—transformed the accounting profession. As the head of my firm’s tax department, I’ve thought a lot about how we can leverage AI, specifically with respect to tax research. 

We tested two popular AI-assisted tax research platforms simultaneously over the summer, and the results were concerning. We fed the same question into both platforms and often got two very confident sounding responses giving us completely opposite answers. 

In one instance, I asked them to explain the implications of a passthrough entity that wanted to make the California passthrough entity tax (PTET) election in 2025 but had missed the required June 15 estimated payment. One responded—incorrectly—that there would be late payment penalties and interest. It provided citations to support its answer, but when I checked those sources, they either didn’t exist or did not support its response. When I pointed this out, it thanked me for questioning it and then offered additional citations that were likewise fictitious or irrelevant.

The correct answer, by the way, is that you’re out of luck and can’t make the election for the year.

During this testing, I would often get into circular discussions with the platforms. They would give me the wrong answer, agree with the answer I was tentatively considering and then circle back to the original wrong answer. 

When I relayed these issues to the sales representatives, both asserted the problem was that I wasn’t asking the questions “correctly” to get the right answer. That response raised an even bigger concern: If seasoned researchers can’t reliably prompt their way to accuracy, how often will less experienced professionals be presented with confidently delivered, but incorrect, results (and blindly accept them)?

At the rate at which AI is developing, those two platforms have likely been significantly improved since the summer. However, my message to tax practitioners using any kind of AI-assisted tax research service is to do so with eyes wide open and with the professional skepticism you would normally use if someone whose tax background you’re not familiar with told you something. 

Even in my day to day working with my intelligent colleagues, whom I’ve worked closely with over the years, if we’re talking about a new-to-me tax issue, I’m going to want to see the primary authority to confirm it for myself.

Before the emergence of AI in recent years, I’ve always told our staff not to rely on third-party summaries, even if they come from our tax research software. Primary authority consists of the legally binding sources of tax law, including statutes, regulations and court decisions that the IRS and courts rely on, whereas secondary authority includes explanatory materials such as articles, treatises and research summaries that may aid understanding but cannot stand on their own as legal authority. 

Secondary authority is a good starting point and gives you some context, but best practice is to check the citations and trace them to the primary authority to confirm the answer. If best practice is to use tax research software, which has been widely used in the profession for decades, with this approach of trust but verify, why would you not, at a minimum, do the same due diligence when using these newer AI-assisted platforms? Our established tax research platforms now have an AI assistant built in, but the approach doesn’t change: You must keep tracing the citation back to the primary authority.

No matter how confident AI sounds and how much it strokes your ego praising you for asking such great questions, don’t lose sight of the foundational research principle that, if you were to be audited, the IRS is not going to accept a citation to any third-party summary. Primary authority continues to be king. Do your homework. Don’t take citations at face value. Trace the cite to the primary authority and verify.

AI Sounds Smart. Tax Pros Must Be Smarter.

No matter how confident AI sounds, your approach as tax professionals doesn’t change: Do your homework. Don’t take citations at face value. And trace the cite to the primary authority and verify.

Stay ahead with essential CPA resources

Golden State wisdom straight from the experts

A Trusted Ally of the Profession: CalCPA Recognizes Assemblymember Jacqui Irwin

CalCPA Celebrates 125 Years of California CPAs

Modern Firms, Modern Rules: CalCPA Responds to NASBA

2025 Fast Tax Facts

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CPAs: Making Sense of What Comes Next campaign