The three-decade-long debate of having differential standards for private companies, the tougher regulatory climate on Capitol Hill, the meteoric rise in cloud and mobile computing and the changing demographics were cited among the top issues impacting the profession.
In a joint presentation, at the Practitioners Symposium and Tech + Conference in Las Vegas, American Institute of CPAs president and chief executive Barry Melancon and 2010-2011 Institute Chairman Paul Stahlin gave the 1,100 attendees a macro-level update on issues and trends that will affect the profession over the next several years.
“Now is the time for differential standards, but only if the Financial Accounting Foundation [the overseer of FASB] establishes a new standards board,” said Melancon. “The status quo is not acceptable. When you have GAAP departures, like you do with private companies, you have non-GAAP standards. We are in a situation for you to be engaged. Today we have it first and goal, but when you get inside the 10-yard line, the defense stiffens,” he said in a not-so-veiled slap at the recalcitrance of the Financial Accounting Standards Board. “Today 50 percent of the economy is private companies,” he added.
Internationally, Melancon said that 123 of 195 countries permit or require International Financial Reporting Standards, and in 2011 the Securities and Exchange Commission is expected to issue guidance on if or when IFRS will be adopted.
“This year was one of the busiest for us on the legislative fronts,” said Stahlin, who reviewed a number of “Hill victories” over the past year, such as the successful repeals on the expanded 1099 reporting, the Red Flags rules exemption for CPAs, and CPAs gaining an exemption from IRS testing and CPE for preparer registration, as well as the AICPA’s ongoing fight against tax strategy patents.
“The pendulum has swung way to the other side,” said Stahlin, in reference to ponderous laws like the 2,307-page Dodd-Frank Act, which he compared to the scant-by-comparison 68 pages of Sarbanes-Oxley. He also pointed to the rise of social media and joked that his daughters were not nearly as excited when he became AICPA chair “as when I got on Facebook.”
On the technology front, Melancon said that the rise in cloud and mobile computing will impact the profession in a way not seen since the introduction of the microprocessor.
“It will affect audit and tax from an efficiency standpoint, as well as changing cost structures and price points,” he said.
The Institute also said that it would release the results and findings of its Horizons 2025 Report at the October Fall Council meeting, a refreshed look at the future of the CPA profession, which it originally investigated with its Vision Project in 1996.
Conference attendees were also given copies of the PCPS CPA Firms Top Issues Survey, which ranked the five top concerns of five different categories of firms, from sole practitioners to firms with 21 and more professionals.
Chief among the front-burner issues were attracting and retaining clients and staff, keeping up with tax law changes and complexity, partner accountability, succession planning and fee pressures.
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