On a year-over-year basis from 2025 to 2026, the number of Initial Public Offerings (IPOs) jumped from 180 to 208 for the first six months, increasing from $27 billion to $137 billion, based on a U.S. Securities and Exchange Commission press release from September. With additional paid-in-capital (APIC) a major consideration during an IPO, it’s important to consider how it works and how to account for it.
APIC Defined
APIC is the portion of the stock price that investors value, by their purchase price, above the equity’s par value. It’s the premium that investors assign to the company’s equity on the stock exchange, based on the company’s existing value.
One integral thing to note is that APIC happens only for transactions originating from the primary market or when tendered straight from the business. While transactions post-IPO don’t generate APIC, common as well as preferred stock classes can see APIC creation.
APIC is determined as follows: = (Issue Price minus Par Value) x Amount of Equities Obtained by Investors
There are three primary factors that go into the calculation: how many shares are floating publicly, the issuing company’s assigned equity par value, and the Initial Public Offering’s issue price.
Illustrating How APIC is Calculated
If a stock’s par value is $0.01, it is issued at $15 per share, and 19.33 million common shares are issued at the IPO, the APIC is:
APIC = ($15 – $0.01) x 19,330,000
APIC = $14.99 x 19,330,000 = $289,756,700
Par Value = $0.01 x 19,330,000 = $193,300
Based upon the issue price and the par value, this results in the premium per share of $14.99.
Defining Par Value
This is a token amount assigned to common and/or preferred equities. Company management determines par value before the market establishes the equity’s worth. Sometimes equities are issued with no par value stock. If par value is required, it may be as little as one cent per share.
Issue Price
Issue price is in contrast to what investors value and expect the company to be worth. In this case, the price would be $15 per share.
Accounting Considerations
APIC is recorded in the shareholders’ equity section of the balance sheet. It is the equity-side offset to the cash the company receives in the offering: cash goes up by the total proceeds on the asset side, and common stock (par value) plus APIC go up by the same amount on the equity side, so the balance sheet stays in balance.Along with the retained earnings, it’s more often the biggest part of shareholder equity.
APIC provides companies a way to obtain cash without having to exchange guarantees with investors.
Looking at the journal entry, it’d be entered as follows:
Debit
Credi
Cash
$15.00
Common stock (par value)
$0.01
Additional paid-in capital (APIC)
$14.99
Based on the journal entry, the APIC portion is entered as a credit. Since APIC concerns stocks, the credit of $14.99 increases the balance of the equity account. As the company issues common stock, the company receives cash. The cash flow statement’s financing section would document the trade via a cash inflow.
Conclusion
Understanding how APIC works is essential for businesses, especially those considering to take their company from the private to the public equity markets.
Initial Public Offering Considerations
November 1, 2026 · Accounting News, Blog, Uncategorized
⏱ 3 min read
On a year-over-year basis from 2025 to 2026, the number of Initial Public Offerings (IPOs) jumped from 180 to 208 for the first six months, increasing from $27 billion to $137 billion, based on a U.S. Securities and Exchange Commission press release from September. With additional paid-in-capital (APIC) a major consideration during an IPO, it’s important to consider how it works and how to account for it.
APIC Defined
APIC is the portion of the stock price that investors value, by their purchase price, above the equity’s par value. It’s the premium that investors assign to the company’s equity on the stock exchange, based on the company’s existing value.
One integral thing to note is that APIC happens only for transactions originating from the primary market or when tendered straight from the business. While transactions post-IPO don’t generate APIC, common as well as preferred stock classes can see APIC creation.
APIC is determined as follows: = (Issue Price minus Par Value) x Amount of Equities Obtained by Investors
There are three primary factors that go into the calculation: how many shares are floating publicly, the issuing company’s assigned equity par value, and the Initial Public Offering’s issue price.
Illustrating How APIC is Calculated
If a stock’s par value is $0.01, it is issued at $15 per share, and 19.33 million common shares are issued at the IPO, the APIC is:
APIC = ($15 – $0.01) x 19,330,000
APIC = $14.99 x 19,330,000 = $289,756,700
Par Value = $0.01 x 19,330,000 = $193,300
Based upon the issue price and the par value, this results in the premium per share of $14.99.
Defining Par Value
This is a token amount assigned to common and/or preferred equities. Company management determines par value before the market establishes the equity’s worth. Sometimes equities are issued with no par value stock. If par value is required, it may be as little as one cent per share.
Issue Price
Issue price is in contrast to what investors value and expect the company to be worth. In this case, the price would be $15 per share.
Accounting Considerations
APIC is recorded in the shareholders’ equity section of the balance sheet. It is the equity-side offset to the cash the company receives in the offering: cash goes up by the total proceeds on the asset side, and common stock (par value) plus APIC go up by the same amount on the equity side, so the balance sheet stays in balance.Along with the retained earnings, it’s more often the biggest part of shareholder equity.
APIC provides companies a way to obtain cash without having to exchange guarantees with investors.
Looking at the journal entry, it’d be entered as follows:
Debit
Credi
Cash
$15.00
Common stock (par value)
$0.01
Additional paid-in capital (APIC)
$14.99
Based on the journal entry, the APIC portion is entered as a credit. Since APIC concerns stocks, the credit of $14.99 increases the balance of the equity account. As the company issues common stock, the company receives cash. The cash flow statement’s financing section would document the trade via a cash inflow.
Conclusion
Understanding how APIC works is essential for businesses, especially those considering to take their company from the private to the public equity markets.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Improving Social Security’s Service to Victims of Identity Theft Act (HR 5345) – The purpose of this legislation is to provide a single point of contact at the Social Security Administration for victims of identity theft. A team of specially trained employees will track cases from beginning to end, including coordination with other agencies as necessary. The bill was introduced by Rep. David Kustroff (R-TN) on Sept. 15, 2025. It passed in the House on Dec. 1, 2025, the Senate on Sept. 17, 2026, and was signed into law on Oct. 7.
Romance Scam Prevention Act (HRs 2481) – This bill requires online dating service providers to issue fraud ban notifications to online dating service members. The notices would also include statements that banned users may be using a false identity and that users should not send money or personal financial information to another user. The legislation was introduced by Rep. David Valadao (R-CA) on March 31, 2025. It passed in the House on June 23, 2025, in the Senate on Sept. 23, 2026, and was enacted by the president on Oct. 20.
End Tax Penalties on American Hostages Act (HR 9496) – This legislation postpones federal tax deadlines and suspends penalties for U.S. nationals who are unlawfully detained or held hostage abroad. Introduced by Rep. Claudia Tenney (R-NY) on June 29, the bill passed in both chambers during September and currently awaits the president’s signature.
Mystic Alerts Act (HR 7022) – This bipartisan bill was introduced by Rep. August Pfluger (R-TX) on Jan. 12. Named in honor of the people who died at Camp Mystic in Texas during the 2025 floods, this act authorizes wireless emergency alerts to be transmitted to mobile devices by satellite, making them more available via commercial mobile service providers to personal devices (on an opt-out basis). It passed in the House on April 20, in the Senate on Sept. 30 and has yet to be enacted.
Criminal History Access Act of 2026 (HR 8352) – Introduced by Rep. Derek Schmidt (R-KS) on April 16, this bill would enable law enforcement agencies to access criminal history record information maintained by the Federal Bureau of Investigation for the purposes of hiring, training and assessing ethical conduct. This act passed in the House on May 12, in the Senate on Sept. 30 and currently awaits enactment.
Bankruptcy Threshold Adjustment Act of 2026 (HR 7730) – This bill restores previously expired (2024) debt limits for Subchapter V (small business) and Chapter 13 (personal) bankruptcies. Under Subchapter V, the debt limit increases from $3.4 million to $7.5 million. Under Chapter 13, the debt limit increases from around $2.1 million to $2.75 million. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). The restored limits enable a quicker and less expensive reorganization process. Introduced on Feb. 26 by Rep. Ben Cline (R-VA), the bill passed in the House on Sept. 16, in the Senate on Sept. 28 and currently awaits the president’s signature.
Protect College Sports Act of 2026 (S 4668) – This act, introduced by Sen. Ted Cruz (R-TX) on June 2, is designed to protect the name, image and likeness rights of student athletes. It also limits athletes’ ability to transfer to another school more than once during their collegiate career without having to miss a season. One of the more controversial components is that the bill would increase direct player spending caps from roughly $21.5 million to approximately $49.2 million, which would give larger, well-funded university athletic programs a competitive recruiting edge. The act passed in the House on Sept. 28 and is under consideration in the Senate.
Cracking Down on Identity Theft and Dating App Scams, Strengthening Emergency Alerts, Law Enforcement and College Sports
November 1, 2026 · Blog, Congress at Work, Uncategorized
⏱ 3 min read
Improving Social Security’s Service to Victims of Identity Theft Act (HR 5345) – The purpose of this legislation is to provide a single point of contact at the Social Security Administration for victims of identity theft. A team of specially trained employees will track cases from beginning to end, including coordination with other agencies as necessary. The bill was introduced by Rep. David Kustroff (R-TN) on Sept. 15, 2025. It passed in the House on Dec. 1, 2025, the Senate on Sept. 17, 2026, and was signed into law on Oct. 7.
Romance Scam Prevention Act (HRs 2481) – This bill requires online dating service providers to issue fraud ban notifications to online dating service members. The notices would also include statements that banned users may be using a false identity and that users should not send money or personal financial information to another user. The legislation was introduced by Rep. David Valadao (R-CA) on March 31, 2025. It passed in the House on June 23, 2025, in the Senate on Sept. 23, 2026, and was enacted by the president on Oct. 20.
End Tax Penalties on American Hostages Act (HR 9496) – This legislation postpones federal tax deadlines and suspends penalties for U.S. nationals who are unlawfully detained or held hostage abroad. Introduced by Rep. Claudia Tenney (R-NY) on June 29, the bill passed in both chambers during September and currently awaits the president’s signature.
Mystic Alerts Act (HR 7022) – This bipartisan bill was introduced by Rep. August Pfluger (R-TX) on Jan. 12. Named in honor of the people who died at Camp Mystic in Texas during the 2025 floods, this act authorizes wireless emergency alerts to be transmitted to mobile devices by satellite, making them more available via commercial mobile service providers to personal devices (on an opt-out basis). It passed in the House on April 20, in the Senate on Sept. 30 and has yet to be enacted.
Criminal History Access Act of 2026 (HR 8352) – Introduced by Rep. Derek Schmidt (R-KS) on April 16, this bill would enable law enforcement agencies to access criminal history record information maintained by the Federal Bureau of Investigation for the purposes of hiring, training and assessing ethical conduct. This act passed in the House on May 12, in the Senate on Sept. 30 and currently awaits enactment.
Bankruptcy Threshold Adjustment Act of 2026 (HR 7730) – This bill restores previously expired (2024) debt limits for Subchapter V (small business) and Chapter 13 (personal) bankruptcies. Under Subchapter V, the debt limit increases from $3.4 million to $7.5 million. Under Chapter 13, the debt limit increases from around $2.1 million to $2.75 million. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). The restored limits enable a quicker and less expensive reorganization process. Introduced on Feb. 26 by Rep. Ben Cline (R-VA), the bill passed in the House on Sept. 16, in the Senate on Sept. 28 and currently awaits the president’s signature.
Protect College Sports Act of 2026 (S 4668) – This act, introduced by Sen. Ted Cruz (R-TX) on June 2, is designed to protect the name, image and likeness rights of student athletes. It also limits athletes’ ability to transfer to another school more than once during their collegiate career without having to miss a season. One of the more controversial components is that the bill would increase direct player spending caps from roughly $21.5 million to approximately $49.2 million, which would give larger, well-funded university athletic programs a competitive recruiting edge. The act passed in the House on Sept. 28 and is under consideration in the Senate.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
With the global bond market size bigger than many of the world’s biggest economies, it’s important for businesses that sell bonds to understand how to report transactions properly. According to the International Capital Market Association (ICMA), the global bond market’s capitalization is more than $128 trillion.
Defining Bonds
Offered by government or corporate entities, bonds are a static commitment issued to investors. Entities earn money from investors to invest in infrastructure or support operations. Investors receive a coupon payment periodically, and the bond is settled at a future date, which is referred to as the maturity date.
When bonds are tendered, they may be done at a discount, at face value, or at a premium. The valuation relies on the gap at issuance between a bond’s coupon rate and the bond’s yield based on prevailing prices. Upon bond issuance, the bond’s face value is recorded under bonds payable, as the issuing entity receives payment for the bond’s prevailing market value. If there’s a positive difference, it’s recorded at a premium. If there’s a negative difference, it’s recorded at a discount.
Bond Issuance and Accounting Considerations
When sold at par value, after the corporation or government entity receives payment from investors, the issuing entity records it as a liability because it’s liable for the investor’s investment. This would be set up as:
Debit
Credit
Cash
$100
Bonds Payable
$100
Bonds Payable Defined
Since the entity owes the investor, bonds payable is recorded on the liability section of a business’ balance sheet. Much of the time, bonds payable are reported as non-current liabilities.
When sold at a discount, a gap exists between a bond’s par value and the monetary investment the issuing entity obtains from the investor; the issuing entity must record the transaction as a discount on bonds payable account. The journal entry is as follows:
Debit
Credit
Cash
$100
Discount on Bonds Payable
$100
$100
Bonds Payable
$100
If bonds are purchased at a premium, which is when investors pay more for a bond with a higher interest rate, providing higher coupon payments, entities must record it as a premium on bonds payable (POBP) account. It often occurs when purchasers agree to lesser earnings due to the bond having a higher rate than prevailing rates. In the case of a bond’s issuance at a premium, it can be recorded as follows:
Debit
Credit
Cash
$100
POBP
$100
Bonds Payable
$100
If there’s a discount on bonds payable, the recurrent record must reflect the interest expense with a debit transaction and the bonds payable entry must see a credit. This accounting method impacts the bond issuer by growing the total interest expense, which the issuer records.
If, however, the issuer receives payment from investors beyond the face value, the interest expense must be credited, and the premium on bonds payable entry should receive a debit.
Conclusion
Whether it’s a business issuing bonds or an investor evaluating a company, understanding how to account for bonds is essential to evaluate a business’ financial health.
How to Account for Bonds
October 1, 2026 · Accounting News, Blog, Uncategorized
⏱ 3 min read
With the global bond market size bigger than many of the world’s biggest economies, it’s important for businesses that sell bonds to understand how to report transactions properly. According to the International Capital Market Association (ICMA), the global bond market’s capitalization is more than $128 trillion.
Defining Bonds
Offered by government or corporate entities, bonds are a static commitment issued to investors. Entities earn money from investors to invest in infrastructure or support operations. Investors receive a coupon payment periodically, and the bond is settled at a future date, which is referred to as the maturity date.
When bonds are tendered, they may be done at a discount, at face value, or at a premium. The valuation relies on the gap at issuance between a bond’s coupon rate and the bond’s yield based on prevailing prices. Upon bond issuance, the bond’s face value is recorded under bonds payable, as the issuing entity receives payment for the bond’s prevailing market value. If there’s a positive difference, it’s recorded at a premium. If there’s a negative difference, it’s recorded at a discount.
Bond Issuance and Accounting Considerations
When sold at par value, after the corporation or government entity receives payment from investors, the issuing entity records it as a liability because it’s liable for the investor’s investment. This would be set up as:
Debit
Credit
Cash
$100
Bonds Payable
$100
Bonds Payable Defined
Since the entity owes the investor, bonds payable is recorded on the liability section of a business’ balance sheet. Much of the time, bonds payable are reported as non-current liabilities.
When sold at a discount, a gap exists between a bond’s par value and the monetary investment the issuing entity obtains from the investor; the issuing entity must record the transaction as a discount on bonds payable account. The journal entry is as follows:
Debit
Credit
Cash
$100
Discount on Bonds Payable
$100
$100
Bonds Payable
$100
If bonds are purchased at a premium, which is when investors pay more for a bond with a higher interest rate, providing higher coupon payments, entities must record it as a premium on bonds payable (POBP) account. It often occurs when purchasers agree to lesser earnings due to the bond having a higher rate than prevailing rates. In the case of a bond’s issuance at a premium, it can be recorded as follows:
Debit
Credit
Cash
$100
POBP
$100
Bonds Payable
$100
If there’s a discount on bonds payable, the recurrent record must reflect the interest expense with a debit transaction and the bonds payable entry must see a credit. This accounting method impacts the bond issuer by growing the total interest expense, which the issuer records.
If, however, the issuer receives payment from investors beyond the face value, the interest expense must be credited, and the premium on bonds payable entry should receive a debit.
Conclusion
Whether it’s a business issuing bonds or an investor evaluating a company, understanding how to account for bonds is essential to evaluate a business’ financial health.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Continuing Appropriations and Extensions Act, 2027 (HR 6500) – This appropriations bill was finalized and passed by both the House and the Senate on Sept. 1. The act funds the fiscal year 2027 government budget through Dec. 11 at current levels. It was signed by the President on Sept. 2.
Prison Staff Safety Enhancement Act (S 307) – This bill is designed to address sexual harassment and sexual assault of Bureau of Prisons correctional officers and other staff by incarcerated prisoners. Specifically, it details national standards for the prevention, reduction, and punishment of perpetrators. The legislation was introduced by Sen. Marsha Blackburn (R-TN) on Jan. 29, 2025. It passed in the Senate on April 29, 2025; in the House on Aug. 31; and was enacted by the president on Sept. 16.
Retire through Ownership Act (S 2403) – Introduced by Sen. Roger Marshall (R-KS) on July 23, 2025, this bill amends the Employee Retirement Income Security Act of 1974. ESOPs are Employee Stock Ownership Plans that enable employees to accrue shares of their employers’ stock as part of a pension plan, in which they receive the cash value of their shares upon retirement. This bill clearly defines how a good-faith valuation should be determined by independent professional appraisers, based on IRS Revenue Ruling 59-60 for valuing privately held stock. In the past, ambiguous valuation methods have resulted in litigation. This act passed in the Senate on October 9, 2025, and in the House on Sept. 16. It currently awaits the president’s signature.
Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (HR 5334) – This largely bipartisan act was championed by the late Sen. Lindsey Graham (R-SC). The legislation imposes a variety of sanctions, tariffs, and prohibitions related to Russia and Iran, and explicitly prohibits U.S. persons from making new investments in Russia. It also expands the tax deduction for early childhood education teachers for classroom expenses. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). It passed in the House on April 27 and in the Senate on Aug. 7, with final changes agreed upon on Sept. 16. The president signed the bill into law a day later.
Digital Asset Market Clarity Act (HR 3633) – Known as the Clarity Act, the purpose of this Trump Administration-backed bill is to implement the first regulations for the crypto sector. The bill was introduced by Rep. French Hill (R-AR) on May 29, 2025. It passed in the House on July 17, 2025. However, opponents of the bill say the industry-led standards are far too lenient and do not provide enough safeguards. The bill recently failed in the Senate after a party-line cloture vote, which means the debate ended before the floor could vote on the bill (considered a filibuster). The cloture vote does not rule out the Senate trying again at a later date.
Ratepayer Protection Act (HR 9340) – In an effort to rein in AI data center utility costs, this bill would require state utilities to consider adopting standards to ensure cost recovery for the generation, transmission, and distribution services of large-load electricity customers. This high-stakes, bipartisan issue comes ahead of the midterm elections in an effort to assure voters that local data centers will not ramp up local residents’ utility bills. The legislation was introduced by Rep. Gabe Evans (R-CO) on June 18. It passed in the House on Sept. 16 and currently resides in the Senate.
Stopping Political Discrimination in Disaster Assistance Act (HR 1342) – Current law states that federal major disaster emergency relief and assistance must be provided without discrimination on the basis of race, color, religion, nationality, sex, age, disability, English proficiency or economic status. The bill, introduced by Rep. Scott Perry (R-PA) on Feb. 13, 2025, would add political affiliation protection under this requirement. The act passed in the House on Sept. 16 and awaits consideration in the Senate.
Pre-Election Focus on Russian/Iran Sanctions, AI Utility Bills, Crypto Regulation and Nondiscriminatory FEMA Assistance
October 1, 2026 · Blog, Congress at Work, Uncategorized
⏱ 4 min read
Continuing Appropriations and Extensions Act, 2027 (HR 6500) – This appropriations bill was finalized and passed by both the House and the Senate on Sept. 1. The act funds the fiscal year 2027 government budget through Dec. 11 at current levels. It was signed by the President on Sept. 2.
Prison Staff Safety Enhancement Act (S 307) – This bill is designed to address sexual harassment and sexual assault of Bureau of Prisons correctional officers and other staff by incarcerated prisoners. Specifically, it details national standards for the prevention, reduction, and punishment of perpetrators. The legislation was introduced by Sen. Marsha Blackburn (R-TN) on Jan. 29, 2025. It passed in the Senate on April 29, 2025; in the House on Aug. 31; and was enacted by the president on Sept. 16.
Retire through Ownership Act (S 2403) – Introduced by Sen. Roger Marshall (R-KS) on July 23, 2025, this bill amends the Employee Retirement Income Security Act of 1974. ESOPs are Employee Stock Ownership Plans that enable employees to accrue shares of their employers’ stock as part of a pension plan, in which they receive the cash value of their shares upon retirement. This bill clearly defines how a good-faith valuation should be determined by independent professional appraisers, based on IRS Revenue Ruling 59-60 for valuing privately held stock. In the past, ambiguous valuation methods have resulted in litigation. This act passed in the Senate on October 9, 2025, and in the House on Sept. 16. It currently awaits the president’s signature.
Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (HR 5334) – This largely bipartisan act was championed by the late Sen. Lindsey Graham (R-SC). The legislation imposes a variety of sanctions, tariffs, and prohibitions related to Russia and Iran, and explicitly prohibits U.S. persons from making new investments in Russia. It also expands the tax deduction for early childhood education teachers for classroom expenses. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). It passed in the House on April 27 and in the Senate on Aug. 7, with final changes agreed upon on Sept. 16. The president signed the bill into law a day later.
Digital Asset Market Clarity Act (HR 3633) – Known as the Clarity Act, the purpose of this Trump Administration-backed bill is to implement the first regulations for the crypto sector. The bill was introduced by Rep. French Hill (R-AR) on May 29, 2025. It passed in the House on July 17, 2025. However, opponents of the bill say the industry-led standards are far too lenient and do not provide enough safeguards. The bill recently failed in the Senate after a party-line cloture vote, which means the debate ended before the floor could vote on the bill (considered a filibuster). The cloture vote does not rule out the Senate trying again at a later date.
Ratepayer Protection Act (HR 9340) – In an effort to rein in AI data center utility costs, this bill would require state utilities to consider adopting standards to ensure cost recovery for the generation, transmission, and distribution services of large-load electricity customers. This high-stakes, bipartisan issue comes ahead of the midterm elections in an effort to assure voters that local data centers will not ramp up local residents’ utility bills. The legislation was introduced by Rep. Gabe Evans (R-CO) on June 18. It passed in the House on Sept. 16 and currently resides in the Senate.
Stopping Political Discrimination in Disaster Assistance Act (HR 1342) – Current law states that federal major disaster emergency relief and assistance must be provided without discrimination on the basis of race, color, religion, nationality, sex, age, disability, English proficiency or economic status. The bill, introduced by Rep. Scott Perry (R-PA) on Feb. 13, 2025, would add political affiliation protection under this requirement. The act passed in the House on Sept. 16 and awaits consideration in the Senate.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
For years, corporate fraud was limited by the costs, expertise, and resources required to carry out a convincing deception. Artificial intelligence (AI) has changed this.
Today, AI can create realistic voices, videos, emails, invoices, identities, and customer interactions at a scale and speed that traditional fraud controls were never designed to address. AI-powered fraud is a governance, financial, and strategic risk – not just an IT problem.
The Evolution of Corporate Fraud
Fraud is no longer limited to static phishing emails. Threat actors, from organized criminal syndicates to rogue insiders, use large language models and advanced machine learning to execute complex, multilayered fraud schemes.
One of the most cited reference cases is the 2024 Arup incident. A finance employee at the engineering firm’s Hong Kong office was tricked into transferring about $25 million across multiple transactions after joining a video conference call with deepfake replicas of the company’s CFO and other colleagues. The fraud succeeded because it targeted the human authorization step, the exact step where financial controls assume identity can be trusted on sight and sound.
Beyond deepfake executives, new trends include synthetic vendor creation, where generative models fabricate entire corporate entities. Each comes complete with tax IDs, websites, regulatory filings, and executive profiles. They are used to infiltrate accounts payable systems. Bad actors also use machine learning to reverse-engineer enterprise anti-fraud algorithms, find blind spots, and execute micro-transactions that stay beneath detection thresholds.
Why the Numbers Should Worry Boards, Not Just Security Teams
The 2026 INTERPOL Global Financial Fraud Threat Assessment flagged AI-powered fraud as one of organized crime’s primary growth sectors. It reports that fraud alerts have risen 54 percent since 2024, with more than 1,500 cross-border cases involving $1.1 billion in lost assets.
The Regulatory Gap Executives Should Worry About
Regulation is accelerating, but it is not solving the fraud problem. The EU AI Act’s transparency provisions took effect Aug. 2. It requires the disclosure of AI-generated content, with penalties for noncompliance. As of July 2026, 48 states in the United States have enacted at least one deepfake-related law, according to Ballotpedia’s tracker. Yet none of these frameworks is really built for enterprise fraud. They target content moderation, disclosure, and non-consensual media. None directly addresses the authorization workflows attackers actually exploit. A company that is fully compliant with deepfake laws would still be exposed by the Arup scenario.
Regulators such as the Federal Trade Commission (FTC) have signaled that using AI to deceive is prosecutable under existing fraud statutes, but enforcement is reactive and case-by-case. Executives who treat fraud as just a criminal act rather than a governance failure arising from inadequate technical oversight face severe personal and corporate liability.
Strategic Challenges and Recommended Actions
Defending against AI-powered fraud requires rethinking how security spending is justified. Traditional ROI models rely on historical loss avoidance, but in the age of generative fraud, past losses are an unreliable predictor of future exposure.
The primary implementation challenge is friction versus security. Deploying stronger authentication and behavior monitoring across corporate touchpoints creates friction that employees and vendors resist. In addition, integrating AI defenses into legacy enterprise resource planning (ERP) systems creates technical debt. Organizations also struggle with data silos, even though fraud detection now requires real-time visibility across all departments.
To protect enterprise value, leadership teams should move from passive compliance to active resilience.
Verify out of band. Require a callback to a known number and dual approval for large or unusual transfers. Never authorize a payment on a voice or video request alone.
Strengthen authentication. Use multifactor cryptographic verification and zero-trust principles (verify every request, regardless of source). Treat biometrics with caution, since deepfakes can spoof them.
Red-team for AI fraud. Have ethical hackers use generative AI to stress test internal systems and give the risk committee ownership of the results.
Use AI to fight AI. Deploy monitoring tools that flag behavioral anomalies across internal communications, ledger entries, and vendor registries in real time.
Establish cross-functional fraud task forces. Break down departmental silos and treat fraud detection as an integrated business process.
Future Outlook
As AI advances, the convergence of generative AI and autonomous software agents suggest that corporate fraud may increasingly be automated, including by self-directed AI agents operating as fraud syndicates. Business leaders must recognize that the future of corporate defense relies not on human vigilance alone, but on building resilient, self-healing digital ecosystems where trust is algorithmically verified and continuously audited.
AI-Powered Corporate Fraud: What Business Leaders Need to Know
October 1, 2026 · Blog, Uncategorized, What's New in Technology
⏱ 4 min read
For years, corporate fraud was limited by the costs, expertise, and resources required to carry out a convincing deception. Artificial intelligence (AI) has changed this.
Today, AI can create realistic voices, videos, emails, invoices, identities, and customer interactions at a scale and speed that traditional fraud controls were never designed to address. AI-powered fraud is a governance, financial, and strategic risk – not just an IT problem.
The Evolution of Corporate Fraud
Fraud is no longer limited to static phishing emails. Threat actors, from organized criminal syndicates to rogue insiders, use large language models and advanced machine learning to execute complex, multilayered fraud schemes.
One of the most cited reference cases is the 2024 Arup incident. A finance employee at the engineering firm’s Hong Kong office was tricked into transferring about $25 million across multiple transactions after joining a video conference call with deepfake replicas of the company’s CFO and other colleagues. The fraud succeeded because it targeted the human authorization step, the exact step where financial controls assume identity can be trusted on sight and sound.
Beyond deepfake executives, new trends include synthetic vendor creation, where generative models fabricate entire corporate entities. Each comes complete with tax IDs, websites, regulatory filings, and executive profiles. They are used to infiltrate accounts payable systems. Bad actors also use machine learning to reverse-engineer enterprise anti-fraud algorithms, find blind spots, and execute micro-transactions that stay beneath detection thresholds.
Why the Numbers Should Worry Boards, Not Just Security Teams
The 2026 INTERPOL Global Financial Fraud Threat Assessment flagged AI-powered fraud as one of organized crime’s primary growth sectors. It reports that fraud alerts have risen 54 percent since 2024, with more than 1,500 cross-border cases involving $1.1 billion in lost assets.
The Regulatory Gap Executives Should Worry About
Regulation is accelerating, but it is not solving the fraud problem. The EU AI Act’s transparency provisions took effect Aug. 2. It requires the disclosure of AI-generated content, with penalties for noncompliance. As of July 2026, 48 states in the United States have enacted at least one deepfake-related law, according to Ballotpedia’s tracker. Yet none of these frameworks is really built for enterprise fraud. They target content moderation, disclosure, and non-consensual media. None directly addresses the authorization workflows attackers actually exploit. A company that is fully compliant with deepfake laws would still be exposed by the Arup scenario.
Regulators such as the Federal Trade Commission (FTC) have signaled that using AI to deceive is prosecutable under existing fraud statutes, but enforcement is reactive and case-by-case. Executives who treat fraud as just a criminal act rather than a governance failure arising from inadequate technical oversight face severe personal and corporate liability.
Strategic Challenges and Recommended Actions
Defending against AI-powered fraud requires rethinking how security spending is justified. Traditional ROI models rely on historical loss avoidance, but in the age of generative fraud, past losses are an unreliable predictor of future exposure.
The primary implementation challenge is friction versus security. Deploying stronger authentication and behavior monitoring across corporate touchpoints creates friction that employees and vendors resist. In addition, integrating AI defenses into legacy enterprise resource planning (ERP) systems creates technical debt. Organizations also struggle with data silos, even though fraud detection now requires real-time visibility across all departments.
To protect enterprise value, leadership teams should move from passive compliance to active resilience.
Verify out of band. Require a callback to a known number and dual approval for large or unusual transfers. Never authorize a payment on a voice or video request alone.
Strengthen authentication. Use multifactor cryptographic verification and zero-trust principles (verify every request, regardless of source). Treat biometrics with caution, since deepfakes can spoof them.
Red-team for AI fraud. Have ethical hackers use generative AI to stress test internal systems and give the risk committee ownership of the results.
Use AI to fight AI. Deploy monitoring tools that flag behavioral anomalies across internal communications, ledger entries, and vendor registries in real time.
Establish cross-functional fraud task forces. Break down departmental silos and treat fraud detection as an integrated business process.
Future Outlook
As AI advances, the convergence of generative AI and autonomous software agents suggest that corporate fraud may increasingly be automated, including by self-directed AI agents operating as fraud syndicates. Business leaders must recognize that the future of corporate defense relies not on human vigilance alone, but on building resilient, self-healing digital ecosystems where trust is algorithmically verified and continuously audited.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
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For years, corporate fraud was limited by the costs, expertise, and resources required to carry out a convincing deception. Artificial intelligence (AI) has changed this.