Redefining the landscape is the mantra here at the American Institute of CPAs Spring Council and president and chief executive Barry Melancon hit that message home during his report to members on Monday.
Melancon touched on a dizzying amount of issues affecting the profession, starting off his talk by addressing the bad reputation CPAs have had in regards to embracing change. Its a huge falsehood, he said.
He listed eight initiatives the Institute has been strategically focusing on its people, competency, advocacy, brand activity, operational excellence, thought leadership, international activities, and competition and risk.
Melancon also pointed to where and why the profession is changing. International Financial Reporting Standards is being adopted by more than 120 countries. Other changes are occurring as a result of the global economic crisis; regulatory reform; the rapid rise of social media; changing demographics; an aging population; the competitive environment; the green movement; private vs. public standards; and tax changes.
Its unlikely to slow down, he said. Its all interrelated.
Melancon discussed how the Institute would be focusing on its strategic plan, described in the document The CPA Vision 2011 and Beyond. He assured members that the process would not be as labor intensive as it was in the late 90s when the plan was created, since a lot of the content has staying power. Break-out sessions today will fuel the new vision for the organization.
Sustainability continues to be an important area for the AICPA. Melancon told members about a sustainability workshop slated for the end of September, as well as their activity in a global group called Accounting for Sustainability (A4S) even though he described their initiatives in the U.S. as very much in the awareness stage.
Melancon also offered some statistics. According to a survey released by Grant Thornton, CPAs are participating more on the audit committees of nonprofits 74 percent of CPAs were on a nonprofit board in 2010, compared to 66 percent in 2008 and 24 percent in 2006.
In a Harris Poll ranking of the trustworthiness of professions, those who worked for accounting firms were voted the most the most believable in terms of the information they give. CPAs ranked the highest at 67 percent and those echo boomers or the generation of 18 to 34 year olds, ranked CPAs even higher, at 74 percent.
Thats a very positive statement for our profession from a younger generation standpoint, he said.
Melancon then provided an update on regulatory reform, telling council members that the AICPA continues to seek exemption for CPAs from the Fair and Accurate Credit Transactions Act, which requires written plans for identity verification for anyone who is a creditor. He said implementation has been delayed to June 1 of this year and the Institute has filed a suit to not make it applicable for CPA firms. Still, he said, AICPA members in public practice have been granted a 90 day post decision grace period from this legislation.
The Institute is also beefing up its resources for CPAs to help their clients in the area of impending health care reform.
Melancon expressed gratitude for AICPA members support for CPA mobility legislation and his hope for New York, whose status is pending. Its a tremendous success story, he said.
Turning to firm growth, Melancon referenced a recent Conference Board survey that said areas of growth will be in emerging markets, not developed markets.
The potential for growth is going to be more outside of our borders and more outside of our traditional international markets, he said. Growth rates in developing economies are going to continue to outpace all the way to 2016 those in the developed markets.
Cloud computing will change the ways that small firms will do their business, Melancon stressed, adding that more than 95 percent of organizations would increase their use of cloud solutions this year.
We see the very small firm of the future where the one- or two-person firm gets created, and you have a suite of services that are available to deploy to clients virtually all in a cloud environment, he said.
Melancon also discussed globalization, and the emergence of international accounting associations as competitors. For example, the Association of Certified Chartered Accountants in the U.K. has 140,000 members, but 404,000 students in the pipeline something on which the AICPA is keeping its eye.
Theres also a steady interest in the U.S. CPA Exam primarily from Japan, South Korea, Canada and India.
As for IFRS adoption, Melancon said, Convergence is becoming a little testy in the U.S. The Institute issued an IFRS readiness survey in April and found that the biggest challenge for CPAs in both public practice and industry is educating CPAs and financial staff. Training is a big challenge, he said. People arent going to invest heavily in training until they know that training will bring an ROI.
In the area of academics, the AICPA launched www.thiswaytocpa.com, a Web site for accounting graduates and young professionals studying for the CPA Exam. He said firms are doing a better job at helping their employees prepare for the CPA Exam. More are offering bonuses for passing within a specific time frame and offering paid time off to sit for the test.
The second class of the Accounting Doctoral Scholars program is underway 71 firms and 44 state societies have helped raise $16.8 million to finance the project the aim of which to get more CPAs into academia.
Melancon closed by displaying a graph of challenges that CPAs have had to face over time ending with the global economic crisis of the past few years.
We had the opportunity to not look an inch in front of our faces, but our profession had the ability to look forward, he said. I am absolutely confident that whatever those challenges are in the future, well be able to say the same thing.
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