The accounting professional of the future: Non-CPAs?
The changing face of the accounting professional was a strong theme this week at the 2019 American Institute of CPAs’ Engage conference — as was the reality that this new professional might not always be a CPA.
The continually evolving role of the accountant follows the larger transformation of the profession, as Barry Melancon, CEO and president of the AICPA and CEO of the Association of International Certified Professional Accountants, and Bill Reeb, AICPA chair, explained in their Engage keynote session.
“Every business is having to transform today, no matter the size,” Melancon explained. “It’s up to us to transform to meet those expectations.”
Two of the major winds of change — technology disruption and the profession-wide shift from compliance to more advisory services — are converging to create an environment where accountants must offer a more diverse and valuable set of skills. It also means more CPA firms will be hiring non-CPAs.
As evidence of this evolution, Reeb pointed to one statistic showing that client accounting services are growing at two times the median CPA firm growth rate.
This disrupts “the traditional model of the last 100 years in public accounting,” Melancon said, with firms now “hiring from corporate, someone with more experience in a certain industry, brought in by the firm to deploy that experience. It’s already starting to occur, and we think that will continue.”
Still, reports of the CPA’s proverbial death by automation have been greatly exaggerated, as Melancon stressed.
Starting at the beginning of the pipeline, in college, “The enrollment is still extremely high in accounting,” he said. “The economic reality is that supply and demand is changing … . In today’s world it’s changing where the entry-level jobs will be. The World Economic Forum in Davos talks about accounting, and its declining role. It won’t be a declining role, we believe, and it’s important to communicate that to young people -- the opportunity is still there. We’re going to have to address that as a profession.”
Sandra Wiley, president at Boomer Consulting, agreed during a presentation later conference focused on firms hiring non-CPAs.
“Compliance work isn’t going away,” she said. “We are either going to automate or outsource some of it, [so you will need to] do things differently with the people you have, and hire differently. It’s going to help with the war on talent, and open doors to other people.”
Wiley outlined what some of these new hires could look like, whether for CPAs who will need to pivot their traditional skills or non-CPAs who can offer the kind of internal support and client services required of tomorrow’s firms.
She also explained that firms’ organizational charts will likely morph from the current pyramid shape, where a wide base of compliance-work “doers” are later promoted to the “analyzer/thinker” and then “relationship-builder” middle tiers, below the “strategists” at the very top, with all but the lowest level pushing the work down. The new model will take a diamond shape, Wiley explained, with portions of those base-level tasks being outsourced and automated, so that the strategists and thinkers encompass a larger group of CPAs and non-CPAs, ranging from technical experts to consultants.
The “finders, minders and grinders” model will be replaced by a different hierarchy, Wiley explained, featuring leaders at different levels of the firm, which also means those at the top might not always be in the traditional partner role.
To support this new structure, firms must be prepared to recruit and profile for different types of talent, Wiley said, listing a few examples of the kind of professionals CPA firms should start courting, including:
- CFO/client accounting services professionals;
- Payroll and HR managers/supervisors;
- Statisticians/financial analysts;
- Operations research analysts;
- Compliance analysts;
- Information security analysts;
- Business/big data analysts;
- Market research analysts; and,
- Thought leaders.
“You can develop new services based on what you need,” Wiley explained, assuring attendees that, “accountants and auditors are not going away, but they might need to play a different role going forward, and figure out what they are.”
Along with this self-reflection comes the need for better professional development and learning.
During their keynote, Melancon and Reeb predicted that the kind of technological innovations some see as threatening the profession can actually be helpful in educating it.
Reeb envisioned augmented reality playing a part, so that when a firm professional working on, say, an estate plan runs across something “they don’t know how to do ... a video pops up. They don’t know how to fill this form out, so three case studies pop up.”
The ability to learn will be one of the most important skills for accountants going forward, Melancon explained.
“There will be a need to learn, unlearn and relearn … it’s the thought of future literacy moving forward -- not to read and write but the ability to unlearn so you can relearn, and the general awareness of all these activities for everyone. If you’re trusted advisors, you need to know the implications of these shifts -- of both the wide knowledge and capabilities for a narrow knowledge.”
To provide for these expanding skills, the AICPA offers a variety of new credentials beyond the CPA.
“How should licensure evolve?” Melancon continued. “We need to figure out blockchain. We tend to audit around the technology. For our core service of assurance, we need to consider more and more dynamic audit solutions. We’re building these technologies into framework and processes. Today, in our teams, non-CPAs are in the data analytics space. It is conceivable in audit, several years from now, there will be more [of these professionals] on an engagement than CPAs.”
To adjust for these future demographics, Wiley recommended firms take a few specific actions:
- Educate, at all levels. “Don’t keep it at the partner level. Spread the wealth, so everyone is working and looking at education.”
- Draft a new organizational chart. The updated design should be based on that diamond shape Wiley defined earlier. “Who could be niche leaders, and part of that niche? [Identify] people who could develop into wonderful technicians. Who could you talk to to find out what they want to do? Going from how to get things done to who.”
- Analyze where you are today. “Where are your deep niches and service areas? Where can your next-generation talent really dig deep? You have to know where you are now to move into the future successfully.”
As Reeb warned during his keynote, “We have gotten complacent — we’ve never been more successful as a profession. We have so much compliance work to do. [What is] critical is the trust we have, moving forward ... leveraging off our past to help clients with their future. More than 50 percent of the market wants more advisory. We need to do a better job of branding, moving forward as life planners. Everyone out here does that already, but we don’t necessarily have that brand.”