As 2024 comes to a close, it’s a time to reflect on policy developments and CalCPA’s impactful advocacy efforts that have shaped the accounting profession this year. Significant progress has been made on long-standing issues and we were able to tackle new challenges, thanks to proactive engagement across the profession. Looking ahead, we face political transitions and emerging opportunities.

At the start of the year, CalCPA leaders kicked off key discussions with legislators during CPA Day, setting the stage for significant progress. One highlight was the successful renewal of the California Board of Accountancy for another four years through AB 3251.

This achievement followed active collaboration between CalCPA, the CBA and legislative leaders, emphasizing the importance of an effective regulatory framework to protect consumers and support a strong CPA profession.

Another milestone was the passage of AB 2927, which advances financial education for students. Thanks to CalCPA member advocacy during CPA Day, this bill was signed into law and requires high school students to complete a personal finance course to graduate, equipping them with essential financial skills.

CalCPA advocacy played a crucial role in blocking harmful tax proposals like AB 259’s wealth tax and a potential tax on services. While efforts to refine and add flexibility to PTET provisions stalled, raising awareness and highlighting the need for change laid important groundwork. These efforts position California to make progress in 2025.

A New Political Landscape

Though there are still many unknowns following the election, what’s certain is unexpected twists and turns. At the federal level, one-party control in the administration and Congress creates opportunities for change, but narrow margins and high polarization will make big policy shifts difficult. Even so, we expect to see movement on key issues like tax policy, agency funding and authority, and oversight of emerging areas.

In California, new legislators and ongoing federal-state tensions will influence major policy discussions. On issues like environmental and social justice, state leaders may push ahead when they see federal inaction or interference. On topics like federal tax policy, however, they may hesitate to act, avoiding anything that could align with an administration they disagree with.

Despite their differences, federal and California policies remain closely connected. California’s decisions on PTET reforms will partly depend on federal SALT cap rules, while national issues like sustainability reporting and AI regulation will be influenced by California’s leadership and actions.

Amid the political noise, we’ll continue to work with stakeholders and advocate for the profession’s interests.

Emerging Trends

Looking to 2025, there will be several topics on the profession’s agenda:

Alternative Practice Structures: One growing question is the rise of CPA firms pursuing alternative practice structures to leverage private equity resources. While PE investment provides firms with resources for talent, acquisitions and technology, it also introduces changes to processes, culture and business practices. State and national regulators are monitoring this trend to determine if safeguards are needed to protect consumers and ensure transparency.

Emerging Practice Areas: AI and ESG will continue to be growing practice areas and expect to see proposals in this space that include required reporting and assurance. California will particularly be out in front on these policies as it leans into a leadership role in setting policies around these emerging areas.

CPA Licensure: In 2025, efforts to modernize CPA licensure and interstate practice provisions will take center stage. The CBA is expected to introduce legislative proposals that will work through the process alongside similar efforts in other states. National proposals from profession groups are also expected to be finalized for further review. CalCPA will be actively involved, ensuring the interests of both the profession and consumers are well-represented.

Join Us!

As we embark on our advocacy work in 2025, CalCPA’s advocacy efforts will continue to play a vital role in navigating these challenges and advancing the interests of the profession. Join us for a day of advocacy at CalCPA’s Legislative Summit & CalCPA Day in Sacramento on Feb. 5. Keep an eye on calcpa.org for registration details.