Accounting’s Upheaval Brings Reckoning, but Springboard for Opportunities As Well

Having proven its relevance time and again throughout the pandemic, the accounting profession should seize this moment to spend its political capital, so to speak, to deepen relationships with clients and help in even more innovative ways.

The COVID-19 crisis shoved the profession into the future, and a panel of AICPA leaders said CPAs showed an adaptability that should continue as clients continue to deal with disruptive forces. “We got to 2025 two years ago,” AICPA Chair Bill Pirolli said Wednesday at the annual AICPA & CIMA ENGAGE conference. “Making sense of a changing and complex world? No one does that better than a CPA.”

AICPA CEO Barry Melancon said the profession became the central source of guidance to small businesses around the country during the crisis. Accountants have also served as a beacon, sending the signal to clients that light is flickering at the end of the COVID tunnel. “I think as a whole – even though some of the reputation of our profession may not be that – we delivered on that amazingly.” Pirolli added that accounting professionals have never felt closer to clients. “Don’t let that backslide.”

Sue Coffey, the Association’s CEO of public accounting, noted that those who had already embraced the cloud were able to pivot more quickly and are now set up to embrace artificial intelligence, machine learning and other technologies. “We have to stop thinking about tech as a cost and more as a strategic investment.”

The panel discussed several opportunities facing the profession:

CAS – Erik Asgeirsson, president and CEO of CPA.com, said digital or partially digital services and products saw big growth during the COVID crisis across business areas and around the globe, according to McKinsey. Client Accounting Services (CAS) practices saw a median 20% growth rate, he estimated, and the potential is far from tapped out.

Business Model Changes – While Melancon noted that an evolution of the business model is not a traditional “sweet spot” for CPA firms, it’s critical to truly understand where value is created, where pricing needs to change and where innovation can take place.

ESG ­– Investors and employees are taking a real interest in how well companies handle environmental social and governance (ESG) issues, and CPA firms can take the lead in reliably capturing data, measuring it and creating a report that is trusted, Coffey said. And with reporting comes assurance. “We’re looking at this as a massive opportunity.”

Human Capital – One of the big challenges ­– if not the biggest – is staffing. A perennial top concern among firm leaders, the hiring environment is even more difficult now. “People are leaving jobs at huge rates that we’ve never seen before, for a lot of different reasons. It’s not just in your firm,” Melancon said. Recruiting earlier (in the high schools), diversifying the workforce and paying higher starting salaries are just a few key areas where the profession can improve. Accounting once paid new hires more than those in accounting management, investment banking, marketing and some of the “more generic business disciplines,” Pirolli said, but that’s now reversed. While professionals in the long run may make more money in accounting, fewer graduates are entering the field and seeking the CPA credential. “We need to think about the ROI for those people and close that gap.”

ENGAGE continues today and Friday, online and at the Aria Resort & Casino in Las Vegas.