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The CPA profession is built on a foundation of integrity, expertise, and adaptability. As the business world rapidly evolves, so too must the requirements for becoming a CPA. Recently, discussions around changes to CPA licensure have sparked questions and, in some cases, misconceptions. As leaders of state CPA societies across the country, we want to set the record straight and provide clarity on what these changes mean for the profession and its future.

The business landscape has transformed dramatically in recent years, with advancements in technology, evolving regulatory requirements, and increasing market complexities reshaping the role of CPAs. The CPA licensure model must adapt to ensure that new professionals are equipped with the skills and knowledge necessary to meet these growing demands. The changes being implemented are designed to maintain the strength and relevance of the CPA credential while continuing to uphold the profession’s rigorous standards.

State CPA societies listened to the profession and committed to leading together from the front. We collaborated to make much-needed changes that broaden access while maintaining the integrity and trust of the CPA license.

The CPA license is more than just a credential—it is a symbol of trust, expertise, and accountability. Here’s why it matters:

Change can be challenging, but it is also necessary. The CPA profession has always evolved to meet the needs of the business world, and this latest step ensures that future CPAs will be well-equipped for success. As leaders of the CPA profession in our respective states, we are committed to supporting candidates, educators, and employers through this transition.

We encourage open dialogue and welcome questions about these changes. Our goal is to ensure that the CPA profession remains strong, relevant, and prepared for the future. Let’s work together to embrace this evolution and continue to uphold the integrity and excellence of the CPA credential. 

Addressing Misconceptions About the Evolving CPA Licensure Requirements

Discussions around changes to CPA licensure have sparked questions and, in some cases, misconceptions. As leaders of state CPA societies across the country, we want to set the record straight and provide clarity on what these changes mean for the profession and its future.

Licensure Update Misconceptions

There has been a significant uptick of clients attempting to embed indemnification and/or hold harmless clauses in various documents executed with CPA firms (e.g., non-disclosure/confidentiality agreements, business associate agreements, data protection agreements, etc.) to shift financial liability through contractual apportionment of risk. CAMICO has also noted an increasing trend of clients pushing back on firms’ engagement letters and proposing one-sided indemnification provisions, shifting risk and exposure onto firms beyond what would be deemed reasonable for the scope and limits of the engagement.

At their core, indemnification and hold harmless provisions in most CPA/client agreements are designed to transfer liability, generally in the event of an alleged breach of contract or a party’s negligence, misrepresentation or misconduct. At first glance, these provisions may appear to be relatively benign, but hidden in what a client may define as “standard” terms can be language that shifts unreasonable risk to the firm.

CAMICO encourages CPAs to take great care in reviewing any contracts or agreements containing such language. Consider the worst possible scenario under the agreement and determine the level of risk your firm would be assuming. So, it is important that before you contractually bind your firm to an arrangement, take the time to understand all the implications of any legalese in the agreement to make an informed decision about terms and conditions that may pose a higher standard or greater liability to the firm than what would typically be anticipated.

Make sure that you are comfortable with the agreement and the expectations that will fall on your firm. Be prepared to decline the client opportunity if you cannot negotiate the terms to your satisfaction.

Questions to consider when evaluating agreements with these provisions include:

Determining the answers to the above questions is a good starting point to evaluate risk. It is important to note that indemnification laws vary by state, so this risk discussion is limited in nature and does not address state-specific issues or recommendations. CAMICO encourages you to consult with qualified legal counsel in your state if you have specific questions regarding these provisions. 

Most people would support and agree that if a mistake is made resulting in damage to someone else, the party that made the mistake should be held responsible to “make it right.” What “making it right” looks like, of course, will depend on the facts and circumstances of a particular situation.

How this translates to the CPA/client relationship can be troublesome, given that some of the indemnity and hold harmless clauses are written to be extremely broad, and there may be many components to the underlying facts and circumstances relevant to the assessment of determining actual “fault.” For example, did the CPA solely contribute to the alleged cause of the damage as a result of their negligence, or did the client or one of its representatives contribute, in whole or in part, to the underlying cause?

Certain courts have found that hold harmless is not distinct and is the same as indemnification, while others have found the duty to hold harmless is broader than indemnification as it also requires protection against liability. Therefore, before signing a contract with indemnification or hold harmless provisions, it is extremely important to carefully read the relevant clauses. Identifying, understanding and modifying unreasonable indemnification and/or hold harmless terms will help to avoid costly liability claims.

What exposure is the subject of the indemnification request?:

 appropriate to agree to indemnify or hold harmless your client or a third party for exposures directly related to the client’s obligations. Any request that provides indemnity for your client’s failure to accurately and timely inform you of information necessary to complete your work is very risky and inappropriate. On the other hand, if the provision is properly worded such that the exposure is appropriately limited given the nature and scope of the professional services provided by the firm, that would be considered less risky. (See the example in the section below titled: Is the indemnity request limited?)

Many of the indemnity and/or hold harmless clauses embedded in CPA/client agreements attempt to shift all liability from the entity to the CPA firm and have broad language that extends the CPA firm’s responsibilities beyond the professional services being performed. Such agreements/contracts, like NDAs, may be boilerplate agreements that clients use for all third-party service providers. As such, they may contain legal conditions and caveats that are inappropriate with; respect to the professional services being provided by the accounting firm.

However, if the indemnification clause is mutual in nature, like the example below, in which both parties accept responsibility as outlined under the terms of the engagement and agree to indemnify any claims judicially determined to have arisen solely from the gross negligence, misrepresentation or willful misconduct of the party, the provision is much more appropriate for the nature and scope of the CPA/client relationship.

Firm and Client acknowledge and agree that each party maintains responsibility for the work performed, and responsibilities as outlined, under the terms of this Agreement. By the signatures below, each party agrees to indemnify the other party as specified herein: (i) <Firm> agrees to indemnify Client for any claims judicially determined to have arisen solely from the gross negligence or willful misconduct of Firm, and (ii) Client agrees to indemnify Firm for any claims judicially determined to have arisen solely from the gross negligence, misrepresentation, or willful misconduct of Client.

What insurance issues should be considered?: 

The most important insurance issue to consider is the impact of your acceptance of indemnification and hold harmless provisions on your professional liability insurance or your cyber policy in the case of data breach–related provisions. Before you agree to any such terms, check with CAMICO or your cyber insurance company. 

Also important to consider is the extent to which you can protect against indemnity risk through other insurance. For example, many business owner policies (BOPs) address the premise’s risk exposure from your personnel being in the client’s offices. If you cannot insure against the risk created by the indemnification, then consider fee/exposure leverage. Assess the size of the indemnity risk versus your fees. If the indemnification exposure is much greater than your fees, risk increases, and reward is limited.

Would these clauses impair independence?:

 Under ET Sect. 1228.020 of the AICPA’s Code of Conduct, a firm is prohibited from indemnifying an attest client for damages, losses, or costs arising from lawsuits, claims or settlements that relate to an attest client’s acts. Doing so would impair the firm’s independence.

Would these clauses be an act discreditable?:

 Certain governmental bodies, commissions and regulatory agencies (e.g., federal banking regulators, state insurance commissions and the SEC) prohibit entities subject to their regulation (regulated entity) from including certain types of indemnification and limitation of liability provisions in agreements for the performance of audit or other attest services that are required by such regulators and provide that the existence of such provisions disqualifies a member from rendering such services to these entities. As such, ET Sect. 1400.060 of the AICPA’s Code of Conduct states it would be an act discreditable to the profession to perform an attest engagement when the engagement agreement contains indemnification or limitation of liability clauses prohibited by a law, regulation or interpretation.

Understand your risks before signing these types of agreements/contracts. As a starting point, ensure that your firm has considered the following risk management steps and has adequately provided for the potential of additional liability risks:

From a risk management perspective, consider limiting any indemnity and hold harmless clauses by incorporating the following four key suggestions:

Refer to the excerpts below for example indemnity and hold harmless clauses that have been embedded in various CPA/client agreements sent to CAMICO’s Loss Prevention department for review. As you can see by the broad nature of these short provisions, as originally written, the firm would be contractually agreeing to cover fees and costs it may otherwise not be legally obligated to cover, which could jeopardize insurance coverage. Agreeing to such terms without modifications would be problematic for any CPA firm, but ultimately it is a business decision for a firm if they are willing to accept the added risk exposure.

For illustrative purposes, CAMICO has offered suggested edits (highlighted and indicated below) to limit the provisions to more reasonable terms.

Example 1 – Excerpt from a Confidentiality Agreement

to indemnify, defend and hold harmless the Client from any 

 loss, damage, liability, claims, causes of action, cost or expense (including litigation expenses and reasonable attorneys’ fees) 

judicially determined to be caused solely 

gross negligence, willful misconduct, or 

and/or its employee agents or representatives

 the terms of this Confidentiality Agreement.

Example 2 – Excerpt from an Engagement Letter

agrees to reimburse the reasonable costs to 

indemnify, hold harmless and defend Client 

and their respective directors, officers, members, managers, employees, agents and/or representatives

 third-party claims, demands, causes of action, losses, expenses or liabilities, including costs, expenses, and reasonable attorneys’ fees (collectively, “Losses”) 

 or other obligations under this agreement.

Indemnification Clauses in Client Agreements

At first glance, indemnification provisions may seem benign, but hidden in what a client may define as “standard” terms can be language that shifts unreasonable risk to a CPA firm. 

If one goes today to the California Franchise Tax Board (FTB) 

 and visits the “Law” section, they will see information on “written guidance” in the form of Chief Counsel Rulings, FTB Notices and Legal Rulings. Had one visited that site six months ago, one also would have seen many years of FTB Technical Advice Memorandums (TAMs). This fall, however, the FTB removed the TAMs from its website in reaction to a decision by the San Francisco County Superior Court which invalidated one of FTB’s TAMs as being an unlawful “underground” regulation.

American Catalog Mailers Association v. Franchise Tax Board

, San Francisco Superior Court No. CGC-22-601363, that TAM 2022-01, which addressed Public Law 86-272, was invalid because it had not been issued in compliance with the California Administrative Procedure Act (Act). 

In general, the APA defines a “regulation” as every rule … of general application … to make specific the law enforced or administered by it.… ” The court found TAM 2022-01 was a “regulation” that had not been promulgated properly under the APA (no notice, hearing, formal review/approval, etc.) and was hence “void.”

The FTB argued, unsuccessfully, its TAMs do not provide binding rules, let alone ones of general application, and were simply a resource provided to FTB auditors and made available to the public, and were not “regulations” required to go through the APA process. However, the court disagreed.

The FTB did not appeal the decision by the San Francisco court. Instead, it responded to the decision by removing from its website 

 previously posted TAMs, reiterating the TAMs removed were nonprecedential and were provided for informational purposes only.

This removal is a disappointing development because TAMs would inform the public of FTB’s position on a certain issue, e.g., TAM 2022-01 on what FTB believed was the scope of protected activities under Public Law 86-272.

However, if I was still in FTB Legal (as I was many years ago), this is precisely what I would have done. The position taken by the FTB in the (now secret) TAMs will continue to be their internal position on the issues, but by removing them from the public, the FTB no longer needs to worry about cases such as American Catalog and being sued by taxpayers under the APA on the theory the TAMs are void “underground” regulations.

The FTB has long made it clear that while positions it takes in the TAMs could be used to support an audit determination, the TAMs themselves were not to be cited by the FTB to a taxpayer as authority for that position. (

See 10.4.8 of FTB’s Manual of Audit Procedures. MAP 10 TAX RESEARCH, sec. 10.4.8

 of the TAM in issue (on PL 86-272) because the merits were not at issue—i.e., the court never invalidated the 

The decision addressed purely a challenge to the 

 of the FTB publicly releasing that TAM without first going through the APA and having it formally approved as a regulation. All that was accomplished by 

 the TAMs from public access, denying the public (but not FTB auditors) the benefit of that knowledge.

Missing TAMs

The FTB has removed Technical Advice Memorandums from its website in reaction to a court decision that invalidated one of FTB’s TAMs as being an unlawful “underground” regulation.

Not everyone has heard of the ever-growing, niche family office industry. You may even wonder yourself what it means. To put it plainly, it is set up to service ultra-high net worth individuals and their families, whether it be for one generation or multiple generations.

From an accounting perspective, it entails handling and advising their bill pay, money movement, credit and debit cards, payroll, gifts, budgets, projections, general ledger accounting, and related reporting for both the individuals’ investment portfolios and, more importantly, lifestyle expenditures.

The latter part is what personally excites us, as it provides a glimpse into the habits of how and why those who have large sums of money choose to spend it.

Family office work also means liaising with third parties such as attorneys, trustees, real estate brokers, owners’ reps, estate managers, housekeepers, personal assistants, interior designers, engineers and other professionals on additional personal matters, including private aviation, yachts, vacations, construction and renovation projects, luxury home rentals, and weddings, to name a few.

Another area that can be very intriguing is charitable giving, including via a donor advised fund (DAF) or private foundation(s). In combination with the personal spend, this gives an accountant a holistic view of what is important to the client in terms of their daily affairs and what greater impact they are hoping to make in terms of social, business, environmental, educational and other causes throughout their lifetime.

While listing the types of transactions family offices are privy to seeing, it’s important to stress that these activities and any details surrounding specific clients are kept in strict confidence. Even an engagement letter between a firm and a client may now contain a non-disclosure agreement to doubly protect the client’s identity and information, since they typically don’t want their private life out in the open as public knowledge.

Furthermore, their assets may be held in trusts, LLCs or other entity structures to further mask who is truly behind a real estate purchase/sale, for example, or protect them from being sued for their entire worth by dividing assets into different legal entities.

The answer is straightforward: to make their life easier and hopefully less complicated. Generally, there are various moving parts at any given time, and it can be difficult to keep things organized for them to make wise and timely decisions. Choosing to engage a firm to keep track of the laundry list of items and related cash inflows and outflows frees up an individual or the family’s time to focus on more important and pressing matters, such as their family and/or business(es).

Also, many ultra-high net worth individuals do not have a finance or accounting background; hence, sticking to a budget or creating a projection may not be in their wheelhouse.

As a result, seeking a family office that can service them along with other like-minded families (making it a multi-family office) keeps the fees for doing so lower than if the individual were to start their own family office or add a full-time accountant onto their payroll (otherwise known as a single-family office).

The fulfilling part of being a family office accountant is collecting, tracking and presenting an individual’s or family’s cash flows to them in a way that empowers them to make more informed decisions in real-time. If they know exactly where every penny comes from and ends up, then they are also aware of how much is liquid and available to invest or spend elsewhere.

Another way in which a family office helps clients is by providing accounting services for their startup entities that don’t yet have an accounting team in place. While their business is getting off the ground, the family office accountants keep the books, tracking research & development costs that will ultimately be amortized after the product launches in the market, as well as all other operating expenses for the founder/entrepreneur (i.e., the family office client).

Before accepting outside investments, these entities often convert to C corp status for various reasons, one being the gain exclusion benefits afforded to Qualified Small Business Stock (QSBS). As part of that process, valuations and cash flow forecasts are often necessary, and the family office team is well-positioned to deliver the reporting and hand-off to the newly built-out corporate finance team.

Wealthy families that have the luxury of a unified family office and tax team under one roof reap significant benefits.

Taxes, unfortunately, often constitute the largest expense on a family’s profit and loss statement. Strategic tax planning for long-term income, state and estate tax minimization can be a family’s most effective cost-saving measure.

The real-time data and reporting generated by family offices provide the foundation for optimal tax planning. Moreover, family offices can streamline the tax team’s time-consuming tasks of gathering and analyzing investment and expense data.

How Can Family Offices and Tax Teams Best Collaborate?

By seamlessly integrating the expertise of the tax team with the real-time data and operational support of the family office, wealthy families can achieve significant cost savings and tax efficiency, as well as gain peace of mind. This collaboration ensures that every financial decision is informed, opportunity maximized, and detail carefully handled, allowing families to focus on what truly matters to them. This holistic approach is the key to maintaining and growing wealth across generations, all while reducing the administrative burden on the family.

Family Office Accounting

The collaboration between the niche family accounting office practice area and tax planning can help clients achieve significant cost savings and peace of mind. 

If you’re like most people, you probably had a busy end to 2024 between end-of-year deadlines and the holidays. And, if you’re like most people, while you may have gotten some rest during the time off, it can be almost automatic to jump back into things, start having meetings and get rolling on projects—especially with the traditional tax season looming.

Before you jump into the hustle, though, it’s essential to keep your well-being—and that of your team’s—in mind.

The financial industry is no stranger to stress. Studies consistently rank accounting among the most stressful professions, with burnout being a significant concern during peak periods. The high demands of tax season can lead to long hours and mental exhaustion. So, maintaining well-being is essential for personal health, professional effectiveness and, yes, your bottom line.

Studies show that prioritizing employee well-being through wellness programs can significantly improve productivity, reduce absenteeism and lower health care costs, ultimately leading to increased profitability and a positive impact on the company’s financial performance.

One Harvard study showed that for every dollar companies invest in wellness programs, they save over $3 on medical costs and nearly $3 on absenteeism. Plus, these programs help create a company culture where employees feel valued, happy and motivated—leading to higher productivity, less turnover and a more engaged team overall.

The tone for this, as is often the case, starts at the top. For CPAs in leadership roles, modeling self-care sets the culture for the entire team. When leaders demonstrate healthy habits—such as taking breaks, prioritizing mental health and managing stress—they give their staff permission to do the same.

So, how’s this done? Strategies and programs will look different from firm to firm depending on circumstances, but there are some entry-level steps to take, including offering stand-up 

desks, hold walk-and-talk meetings, block out “no meeting” times and include healthy snacks in the office.

For more tips, I invite you to look into our Mental Health Wellness series, which offers courses covering everything from stress reduction to overcoming burnout to building resiliency. Visit our website and search “mental health” for a list of courses.

Tax season will always be challenging, but it doesn’t have to come at the expense of health and well-being. By making wellness a priority, CPAs and finance professionals can navigate this demanding period with resilience and grace. Leaders who champion self-care set the stage for a healthier, happier and more productive workforce.

What strategies have worked for you? What innovations have you implemented at your workplace? I would love to hear from you! 

It’s Material: Well, Well, Well

Coming out of the busy holidays and with many CPAs facing the upcoming busy season, it’s key that you invest in your well-being—and the well-being of your team members.