The potential for a tremendously successful future lies within the grasp of the accounting profession, according to American Institute of CPAs president and CEO Barry Melancon — provided accountants are willing to imagine that future and start reaching out for it.
“The opportunities for the profession are immense, but so are the changes we’re facing,” he said in a co-keynote with institute chair Eric Hansen at the AICPA’s annual Engage event, held last week in Las Vegas. “If we are willing to go beyond, to push on beyond the perceptions of what we do, we can create a profession that’s aligned with where the world is headed.”
Driving the need to reimagine the profession are the multitude of changes — technological, demographic, social, political and more — that are reshaping the markets and economies that accountants operate in. These changes run the gamut from threatening to very positive — but they all require that accountants proactively engage with them.
“The strategy is not to stand still,” said Hansen, who is also COO of Top 100 Firm BKD, and was installed at Engage as chair of the Association of International Certified Professional Accountants.
“We’ve changed significantly in just the past year,” said Melancon. “We’re never going to see a pace of change that’s slower than what we’re seeing now. And we know we won’t be obsolete, particularly if we embrace these changes.”
AICPA CEO and president Barry Melancon during his keynote at the 2018 Engage event
Courtsey: AICPA
Part of the new imagining of the profession will have to involve a closer relationship with technology, and the willingness to change to make the most of it.
To start, accountants will need to embrace technology more quickly and comprehensively in their own practices. “Only 68 percent of firms are using the cloud in some way,” said Melancon, by way of example. “That’s a pretty small percentage, when you think the cloud has been with us for a decade.”
On another front, they’ll need to able to see themselves in roles and using tools they might never have imagined before. “People think of robotics as mostly being about manufacturing — but it’s affecting services, as well,” he said. “One of the Big Four is now the leading users of bots in the world.”
Similarly, they’ll need to explore new areas with an eye for what they can bring to the situation. “Thirty-six percent of organizations have experimented with blockchain, while 67 percent don’t have the talent to use it,” he said. “What is the role of the profession here?”
While calling for proactive change, Melancon offered some comfort for those who fear technology will require accountants to become coders. “The profession shouldn’t be made of experts in the mechanics of blockchain. But we do need to understand how it works,” he said. “We are the profession that brings trust to things.”
One of the areas where Melancon and Hansen see a significant need for — and upside to — the willingness to fundamentally reshape things within the profession is in audit, where the AICPA has been conducting research, improving quality, building new tools, and working with thought leaders and top audit firms to create a new vision of what this core service can be. (See “CPA.com and CaseWare debut client engagement software.")
“We are not talking about looking at the existing audit and making it better — incremental change,” warned Melancon. “Instead, how do we imagine what the audit should look like in a world that’s changing the way ours is? This is really about the profession coming together to transform one of its key services.”
“Transforming the audit is not about automating what we’re already doing,” added Hansen. “We need to set that aside — if we’re intentional about advancing this, we can create a very successful future for our profession.”
New takes on old roles
The audit isn’t the only core service area that can be reimagined — tax is ripe for a rethink as well.
“With social media and access to info on the internet, a lot of our clients are getting misled on tax issues — our professionals are spending a disproportionate amount of time dealing with misinformation,” said Hansen. “We’re trying to stimulate interest in, and excitement about, the changes that are happening in the tax area. This is an area that’s evolving rapidly, away from compliance toward a holistic suite of services and skills.”
Bringing financial planning, estate planning and other long-term client services into the tax conversation will help move the area from backward-looking compliance to forward-looking high-value service — and serve clients far better.
“I don’t think of tax on its own, I think of it as one aspect of my whole life,” said Melancon. “For firms that are focused on relatively simple tax returns, the tax act is going to have a major impact. We’re on a path where more and more people won’t file a tax return at all.”
And as that compliance work dries up, accountants will want to envision offering newer clients deeper relationships and richer services. “Tax planning and financial planning are going to be a major concern for millennials and younger generations,” said Melancon.
Accountants in industry will also need to reimagine their roles and what they offer their internal clients. “Where the role of finance departments used to be mostly crunching numbers, really the most valuable part of their work is taking the information and telling a story that helps business decision-makers move the business forward,” said Hansen. “This is much higher-value and more rewarding work.”
AICPA chair Eric Hansen during his keynote at the 2018 Engage event
Courtsey: AICPA
The reimagining of the profession isn’t just about service lines — it will also include changes in skill sets, education, and how CPAs and accountants view themselves.
Citing a study that said that by 2030, 375 million people will need to switch occupations and learn new skills, Hansen called for CPAs to reimagine how they’ll continue learning: “When it comes to professional education, if you’re measuring hours, you’re missing the boat. You need the skills and the knowledge you need to serve clients better.”
Noting that there has been a 20 percent decline in the hiring of accounting graduates by major accounting firms over the past two years, even as total hiring levels remain the same, Melancon suggested that what accountants learn how to do and how they present and think of themselves will have to change. “As we look at the profession over the next two decades, our skill set has to shift from being just the GAAP and GAAS and tax experts,” he said.
“Do we need to create an alternative pathway to CPA?” he asked. “Maybe it’s not essential that a future CPA candidate demonstrate knowledge of how to do a compilation. As we develop new services around, say, blockchain, don’t we need a different set of skills, combined with a baseline knowledge of accounting? Maybe future candidates will take different parts of the exam based on the pathway they took to becoming a CPA.”
“Many of you were required to write out the short-form audit report as part of your CPA Exam,” Melancon recalled. “How silly was that? It was part of our bias about what the exam was about. Our ability to get past some of those biases is going to be key.”
The biggest picture
For all the opportunity available, realizing a new future won’t be simple or painless, and will require hard work.
“As we look 10 years out, our profession is going to look very different both in our companies and our firms,” said Hansen. “There is no ‘Easy’ button here.”
“Thank you for imagining a new profession — I encourage you to go home and continue doing that,” Melancon said, in closing. “The opportunity for us to reimagine ourselves is truly limitless, but only if we are bold enough to change, bold enough to move forward.”
