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Natasha Piñon

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 SEC cracks down on two investment advisors for ‘AI washing’ 

AI washing gets hung out to dry. 

SEC cracks down on two investment advisors for ‘AI washing’ 

Alex Zank

In SOTU, Biden backs higher taxes on corporations, wealthy

The president's speech sets campaign themes. 

Courtney Vien

Companies aren’t as ready for ESG regs as they think they are

There are still gaps between their ESG goals and their capabilities.

A clipboard with a checkmark icon denoting financial compliance

Compliance

Drew Adamek

The quarterly earnings report may be no more if President Trump has his way. The president posted on his social media platform, Truth Social, on Monday that public companies should only have to report their earnings every six months instead of quarterly, as they have for over 50 years.

“This will save money, and allow managers to focus on properly running their companies,” Trump claimed in his post.

The idea to end quarterly reporting has gained some traction. According to the 

, “current SEC leadership has signaled an interest in reducing regulation” and the Long Term Stock Exchange (LTSE), an exchange focused on encouraging long-term business goals, is planning to submit a proposal to the SEC to end quarterly reporting.

“We hear a lot about how it’s overly burdensome to be a public company,” Bill Harts, the exchange’s CEO, told the 

 last week. “This is an idea whose time has come.”

The LTSE recently wrote in a statement that the focus on quarterly reporting, and the pressure to meet short term metrics, encourages short-term thinking at the expense of long-term value creation. However, investors will likely push back on the proposal, as quarterly reporting offers them more insight into a company’s performance and allows them regular access to company executives on earnings calls.

This isn’t the first time that Trump has floated eliminating quarterly reporting. In 2018, he tasked the SEC with studying the idea, but nothing came of it.

It would be some time before companies would see any changes in financial reporting requirements, as significant changes to SEC rules can take years to implement.

Trump muses about ending quarterly reporting

The move is part of a deregulatory push on financial reporting. 

Jesse Klein

 on solar and wind projects, and just the general “

” around the climate movement since the election, one of the 

 has been what will happen in the voluntary carbon offset and removal market.

“The hard reality is, political landscapes have shifted a bit,” Peter Minor, CEO of Absolute Carbon, told CFO Brew. “And some of these more nascent, riskier projects, it’s just harder to make them work today.”

 to achieve their climate goals, but they are facing some tough truths. The 

 engineered solutions and bargain-bin avoidance credits have proven disappointing—overly optimistic for the former, and either too difficult to measure or outright bogus for the latter.

So attention is shifting back to the one system that has sustained balance for millennia: nature-based removals, which include 

, which take advantage of naturally occurring systems to pull carbon dioxide out of the air.

For CFOs looking for carbon removal options, the answer might be “go look at trees.”

, or funding a project that prevents more carbon from being released into the atmosphere, have been used as an offsetting mechanism for companies in recent years. For example, a company may pay to protect a forest from logging, to avoid the potential emissions from burning and transporting the wood. These projects account for almost 75% of all credits available, according to research by carbon management firm Carbon Direct. But recent exposés have called into question the efficacy of those projects.

 by The Guardian into the verified carbon standard crediting organization, Verra, found that 94% of its rainforest credits offered no environmental benefit. Also in 2023, carbon offset project developer South Pole, ended a 

 (Reducing Emissions from Deforestation and Forest Degradation) in Zimbabwe that was supposed to prevent deforestation. The project had issued 36 million credits since 2011, but media reports raised doubts about how much forest was actually being preserved.

“There are avoidance projects that are really high quality, and there’s some that are really bad quality, and it’s really hard to tell the difference,” Minor said.

With avoidance projects, there are not only questions of efficacy, but also inherent difficulties quantifying impacts. They’re tough to evaluate because comparing the reality to a hypothetical situation where a project never intervened is a “counterfactual,” Minor said.

As a result, companies are shifting their focus from avoidance projects to those that are easier and more concrete to quantify, like negative emissions and emissions reductions, according to Minor.

It’s not just avoidance credits that are falling short. Tech-based carbon removals are turning out to be 

 and less effective than promised. These engineered solutions don’t seem to be delivering the needed results quickly enough, according to climate tech platform Patch’s CEO, Brennan Spellacy.

Engineered solutions like direct air capture use new technologies to pull CO2 out of the atmosphere. But they’re 

, and they’re currently pulling very little carbon out of the atmosphere. Carbon removal technologies are also a decades-long investment.

“They’re realizing that some of these technologies are taking longer to deploy than initially forecasted,” Spellacy said.

 With avoidance credits and tech-driven carbon removal proving ineffectual, companies are turning to 

Minor told CFO Brew that he’s seen demand for nature-based removals grow faster than for any other type of carbon credit. Research backs that up. Removals like reforestation, afforestation, and revegetation have been in highest demand; the former two rank as the second and third most requested by buyers, according to a Patch report on the state of the voluntary carbon market.

Patch also found that nature-based solutions, both removal and avoidance, make up seven of the top 20 most requested projects, while another seven are hybrid, including both technological and natural solutions working in tandem.

Companies still have carbon goals to meet so they’re turning to what’s available now at a good price.

Spellacy sees that as an opportunity for developers with nature-based removals in their portfolio to command a premium on projects that will deliver volume in 2025 and 2026. Nature-based carbon removal solutions are also easy for companies to access.

“Forestry is something that is available today. It’s available at scale,” Minor said. “We’re seeing an acceleration there, not just because it is higher quality now, but I think purely just because it’s there and they need something.”

Nature-based carbon removals provide the right volume at the right price

What’s in, what’s out, and what to do.

The SEC and the CFTC are getting in sync.

The heads of the agencies, SEC Chair Paul Atkins and acting US Commodity Futures Trading Commission (CFTC) chair Caroline Pham, have 

 to better align their regulatory frameworks, with the aim of fostering the growth of new financial markets and products.

In many countries, the same regulator oversees the trading of both securities and derivatives. That’s not the case in the US, where the SEC regulates securities and the CFTC supervises derivatives trading.

Differences between the two agencies’ regulations, Atkins and Pham wrote in a joint statement, could create a “regulatory ‘no man’s land’” with the potential to hinder innovation in finance. The agency heads plan to hold a roundtable in late September to discuss “regulatory harmonization.”

 working at the CFTC. The agency is typically led by a bipartisan group of five commissioners, but four commissioners have left this year and President Donald Trump has not named any successors.

If you’re thinking the harmonization efforts have something to do with crypto, you guessed right. Atkins and Pham’s list of priorities for the roundtable include topics associated with the crypto world, including 24/7 markets, perpetual contracts, and decentralized finance. Earlier this month, the agencies jointly announced that trading of some “

” would be permitted on registered exchanges. Under Atkins, the SEC has 

 such as Robinhood, Coinbase, and Kraken. Trump’s nominee to lead the CFTC, Brian Quintenz, is head of policy for crypto at venture capital fund Andreessen Horowitz and a member of Kalshi’s board.

Other topics on the agenda include portfolio margining and “

bidding on the outcomes of such events as Fed meetings and sporting competitions. (Kalshi, the first CFTC-regulated exchange for 

, even accepts bids on whether or not influencers will 

, containing mentions of cutting “red tape” and potentially permitting “innovation exemptions” that would allow peer-to-peer crypto trading to take place while regulations are being developed.

“It is a new day at the SEC and the CFTC,” the agency heads wrote, “and today we reaffirm the need to ensure regulation does not stand in the way of progress.”

SEC and CFTC aim to align regulatory frameworks

Crypto brings the agencies together.

 might be Apple. Followed closely by Google.

On Tuesday, the search giant avoided the worst of the penalties the US government sought in the 

 it filed in 2024, when the judge overseeing the case said the company “can’t pay to be the exclusive search engine on devices and browsers,” but did allow it to pay “for distribution of its products,” plus keep the Chrome browser, according to the Wall Street Journal.

The Justice Department and a group of states brought the suit to break up what they called the search giant’s monopoly over search and force it to sell its popular Chrome browser.

Judge Amit Mehta ruled that Google doesn’t have to 

, but will have to share search data with competitors like Microsoft and DuckDuckGo, and AI companies like OpenAI. Mehta noted that Google, as the most popular search platform, 

 data about users as all its competitors combined, giving it nearly unbreakable dominance.

However, Mehta ruled that Google will not have to share its search index database or another database that makes it possible for the company to serve to correct information quickly to searchers.

The emergence of generative AI might have been key to Google’s fate. Mehta cited the surge of GenAI reshaping the search landscape, making a Google breakup harder to justify.

However, Apple is a big winner of Mehta’s decision. The ruling allows Google to continue paying partners like Apple to install its browser on devices like the iPhone as long as it doesn’t demand exclusivity. And it’s not small change: Google pays Apple at least 

 a year to make Google the default search engine on its Safari browser and Siri. Mehta said restricting these payments would hurt consumers downstream.

The judge did order Google to create a five-person antitrust committee with privacy experts to “ensure that the company shared the appropriate data with rivals, while safeguarding user privacy,” per the 

, which noted that Microsoft agreed to a similar requirement 

Judge rules on Google antitrust penalties 

Google will have to give over some search data, but avoids many of the more punitive actions. 

 by 26% this year will likely make next year’s filing season a lot more onerous. But its impact is already being felt by tax professionals and the clients who rely on them.

And in the long run, it could cost the US billions. The IRS is conducting far fewer audits, which have a far greater ROI than taxpayer service. It’s lost many experienced auditors with specialized skills, who can conduct the examinations of corporations and high-net-worth taxpayers that bring in far more revenue than audits of lower-income people.

What’s more, the news that the IRS has been hampered could reduce compliance.

“The direct effect” of the job cuts “is that there’s fewer people auditing your tax return,” Elena Patel, co-director of the Urban-Brookings Tax Policy Center, told CFO Brew. “But we also worry about indirect effects.” Compliance might be affected if taxpayers assume the IRS isn’t auditing “as carefully or frequently” as usual, she said.

The Yale Budget Lab, making the assumption that IRS layoffs will result in less compliance, estimates that staff losses like the ones seen this year will significantly increase the size of the “tax gap,” or the difference between what taxpayers owe and what the IRS actually collects. Layoffs of 22,000 IRS personnel, it posits, will add an additional 

 to the tax gap by 2026, which currently sits at $700 billion. (The IRS is set to lose around 26,000 staffers this year.)

Tax attorney James Creech, a principal at accounting firm Baker Tilly, has seen the effects of the IRS job cuts firsthand. He frequently contacts the IRS on behalf of clients seeking refunds or handling audits. These days, he says, there’s often no one around to pick up the phone.

“It’s heartbreaking,” he told CFO Brew. “It’s screaming into the void.” Frequently, he said, “something goes wrong on the IRS side; we know what went wrong, but we can’t get anybody on the phone to correct it.” Correspondence is slow. “Even if you do everything right, it can be an incredibly extended amount of time to hear back from the IRS. You might have to resubmit things two, three times to get them to process it once,” he said.

The situation’s frustrating for him, and it’s hurting clients, Creech said. Issues with the IRS can involve “very significant dollars, or the timing of it can be really significant,” he said. Businesses are putting plans on hold, he added, because funds they planned to direct toward certain projects “aren’t coming through.”

Audits, too, have gotten lost in the chaos. The number of audits Creech sees has gone down “pretty drastically,” he said. Audit cases he’s pursuing remain in limbo as the IRS staff working on them have resigned. “Some audits have disappeared,” he said. “ We don’t know what’s happened to them, and there’s been nothing reassigned.”

Audit rates fall alongside IRS staffing: 

Since January, the IRS has lost 3,070—or 

—of its revenue agents, who conduct audits, TIGTA reported. By March alone, 18% of the IRS’s 

A look into the recent past hints at what this can mean for audits. Between 2010 and 2019, the IRS lost around 21,000 employees, or 22% of its workforce. The number of audits during that time period 

 across the board. Complex audits were disproportionately affected. Among individual filings, audits of people making $200,000 or more saw the largest decline. Audits of companies also decreased significantly: In 2010, for instance, nearly 98% of companies with assets over $20 billion were audited; in 2019 just around half were.

News that the IRS is performing fewer audits could tempt taxpayers and companies to test boundaries. “Corporations have the most complicated tax returns,” and the ability to “employ sophisticated tax preparers” like Big Four accounting firms, Patel said. That makes them more difficult to audit, even when IRS staff levels are high and the experienced auditors who work on complex audits are still around.

“Knowing that the IRS has limited capacity to audit,” Patel said, companies “can be more aggressive in the way that they claim their credits and deductions.”

People in the accounting world are already seeing this happen. At the AICPA’s ENGAGE conference this June, former IRS commissioner Chuck Rettig warned an audience of accountants that their clients might want to pursue risky strategies in the wake of IRS staff cuts. “You will be approached by people with aggressive tax planning situations,” he said, recommending they temper the expectations of clients who “look at current IRS turmoil as an opportunity to maybe get a little more aggressive.”

Pursuing riskier tax strategies based on current IRS staffing levels, though, could backfire in the long run. IRS staffing levels have fluctuated dramatically over the years, and, as Creech pointed out, the agency has a long memory. “All IRS audits are looking in the rear-view mirror,” he said, noting that the IRS can potentially look back through five or six years of tax returns on areas such as depreciation.

His advice? “No one ever loses sleep by trying to get things right.”

‘Screaming into the void’: IRS staff cuts lead to fewer audits, more frustration

They could spark a costly rise in noncompliance. 

As global CFO for delivery at Uber Eats, Michiel Boere helped take the company from losing a billion dollars a year to being profitable. In 2023, he became CFO at another company with a global footprint: HR software startup Remote. Clients can use Remote to recruit, hire, and pay employees and contractors across borders.

Boere spoke with CFO Brew about how, in both those roles, he had to navigate a complex multinational compliance landscape.

This interview has been edited for clarity and length.

You’re the first CFO at Remote. What changes did you make when you started?

As a CFO, I have a three-to-five-year roadmap in my head of all the things that we need to do within finance to get the company ready for the next phase, and that includes things like proper cash management, a good global tax structure, understanding the unit economics of the company, making sure that our collections process works really well…And then it’s about getting the right people in place and giving them the right amount of support to go on a journey from startup to scale up to eventually a public company.

It’s got to be challenging to keep up with the compliance requirements in all those different countries. How does Remote handle that?

Number one, we have actually developed AI ourselves to alert us and customers of changes in regulations globally. The second is that we have implemented what I would call a continuous audit process, where we continuously audit our operations in all countries around the world…essentially a full screening of all the requirements that are there in a country. For example, there are many countries where you need to do gender pay gap reporting, and there are many countries where you need to do ESG reporting, and there are, of course, VAT returns everywhere. There are statutory filings. Then there’s financial audits, there’s IT audits.

What advice would you give someone who aspires to become a CFO?

Do as many different things as possible during the early stages of your career…If you want to become the copilot of the CEO, you need to have a reasonable understanding of how marketing works, of how operations works, how pricing works. It’s not just about tax and accounting, but about understanding all the facets of the business.

What were some of the decisions you made that helped Uber Eats become profitable?

A lot of pricing decisions, and then a lot of portfolio management. We also shut down [operations in] a few countries…You’re going to invest the money in places where it works, and you’re going to not invest the money in places where it doesn’t work. Probably one of the most important jobs of a CFO is to organize that capital allocation.

In some countries, for example, you can have drivers deliver food with a car. In some other countries, that’s not possible for various reasons. You can only have people on bicycles, and in some countries you had walkers…Geography and local regulations and local labor laws, of course, really impacted the dynamics of the business, and therefore the profitability potential or the unit economics of [a] country.

A portrait of Michiel Boere, the CFO of global HR software startup Remote.

Laying the groundwork for growth

As CFO of a border-crossing startup, Michiel Boere keeps an eye on global compliance

 thestruggling chipmaker Intel has agreed to give the US a 10% stake, White House economic advisor Kevin Hassett said the deal might be the first of others like it.

“The president has made it clear all the way back to the campaign that he thinks, in the end, it would be great if the US could start to build up a sovereign wealth fund,” Hassett 

. “I’m sure that, at some point, there will be more transactions, if not in this industry, in other industries.”

The Intel deal specifically came about because the company received money from the Biden-era CHIPS Act, and Trump wanted to position the federal government to stand to benefit from that funding, he said. Hassett said that when the federal government has given money to major companies in the past, “the taxpayers have received nothing in return.”

He claimed that Uncle Sam’s partial ownership of Intel does not give the government any say in how the company runs itself and that there’s also precedent in the US government owning companies, Hassett said, pointing to mortgage financers Fannie Mae and Freddie Mac as examples. (According to the company’s SEC 8-K filing, the government is purchasing common stock and will be required to vote its shares as directed by Intel’s board of directors.)

CNBC anchor Andrew Ross Sorkin pressed Hassett on whether the government will use its influence to pressure other companies to buy Intel’s chips. Hassett replied, “I don’t expect that’s what’s going to happen,” claiming that Intel will instead use federal money paired with an infusion of private investment to “get its act together.”

 Trump is serious about the US establishing its own sovereign wealth fund. The president issued an 

 in February for the secretaries of Treasury and Commerce to draft a plan for creating one.

Hassett said that “many, many” other countries have sovereign wealth funds. Examples include Norway’s Government Pension Fund Global, the China Investment Corporation, and the Abu Dhabi Investment Authority.

split image of the white house and the intel logo 