“This meeting is about perspective,” said Barry Melancon, president and CEO of the American Institute of CPAs, while sharing his during the AICPA’s 2015 Fall Meeting of Council in Kapalua, Hawaii. During his professional issues update, Melancon outlined three key areas of impact for the accounting profession: talent, technology and regulations.
The fact that 91 percent of accounting firms say they are going to increase hiring, according to an AICPA survey, is “a positive statement about our future,” Melancon said. But, he continued, the pressure of the talent gap continues, with 55 million job openings by 2020 and increasing demand for specialization and soft skills.
Meanwhile, new workforce trends are taking hold, including “the growing phenomenon of the contingent workforce and contracted labor. People are working in different capacities other than full-time. [This] is shifting the whole construct of what it means to have a workforce and the expectation of what that workforce is all about.”
The encroaching wave of Baby Boomer retirements should be framed as a recruitment opportunity, according to Melancon.
“How do we connect with the vision, passion and technology skills of the Millennials entering the workforce? Firms that can evolve and really relate to the new opportunities and attitudes toward the workforce are the ones that can retain and build future strongholds. The leadership skills of the Baby Boomers—we have to invest in transferring those to the next generation.”
Regulations & Relationships
Future generations will also inherit changing regulations, whether indirectly affecting the profession, like Dodd-Frank, or addressing current, urgent threats like data security.
Congress wants to pass a bill regarding identity theft, but the question is in what form, Melancon said, explaining that embedding it into another law could be the solution.
While many people complain about the current lack of compromise in Congress, Melancon continued, “on issues such as this, this is how issues get through Congress—with compromise.”
Accountants should not expect too much of that between Congress and the Internal Revenue Service, however, as Melancon said their current relationship is the worst he’s seen in his tenure. Relatedly, next year is “going to be another very, very difficult tax season,” Melancon predicted.
Revenue recognition is another standard accountants need to keep an eye on, he continued, because even with the implementation date extended for another year, CPAs shouldn’t procrastinate.
Also on the radar, according to Melancon, is the debate the Financial Accounting Standards Board and the International Accounting Standards Board continue to wage over the development of new lease accounting standards.
More urgently, cybersecurity concerns should be influencing more than future legislation.
“I believe firmly that, with where we’re headed in the world, this is one of those hard trends,” Melancon said. The CEOs of the eight largest firms “are all on the same page; we need a profession-wide solution—the development of guidance.”
Despite these technology-related concerns, firms have embraced a “dialogue of change,” Melancon said, shifting their focus on “how” to adopt new systems and solutions instead of “if.”
“As a profession, where we are on the technology adoption scale has changed. We beat ourselves up, and I don’t think that’s fair… Where we fall down and need to be focused is, are we using that technology to disrupt ourselves? How aggressively are we looking at technology…to better embed technology capabilities that are out there?”
Budget is a large factor. “One challenge smaller firms have is ‘how much investment should I be making as a small firm,’ and how to measure the right amount of success from that process.”
Melancon recommend those firms seek resources to aid them, such as the “Tech Success Tracker” devised in part by the AICPA’s Private Companies Practice Section. But, he added, firms shouldn’t underestimate that critical “first step of thinking about those investments.”
Overall, Melancon said, the accounting profession and the AICPA are “really about strengthening the core and pursuing progress.”
Special thanks to Tom Hood, Bill Sheridan and the Maryland Association of CPAs for making our virtual attendance at Council possible.
See our other stories from the AICPA Council Meeting:
- Report from Council: Anticipate the Future
- Report from Council: AICPA Broadens CGMA Path, Elects New Chair
- Report from Council: Building a Better CPA Exam
Report from Council: Anticipate the Future
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