The biggest stories in accounting this year were a mix of specific events and broader trends that played out over months (many, indeed, are still playing out).
With that in mind, here are our editors’ picks for the profession’s biggest stories of the year.
Tough times at the IRS
2015 introduced one of the most appalling euphemisms of the recent past: the “courtesy disconnect,” where IRS operators would disconnect callers who had waited on hold for two hours. Hamstrung by budget cuts, the IRS was able to deliver only the meagerest taxpayer service in what was already going to be a difficult season – and it spent the rest of the year reminding Congress and anyone else who would listen how bad it was, which may explain why it got $290 million in extra funding to help with taxpayer service and to fight ID theft.
The terrible tangible property regs
At the start of 2015, as businesses and their advisors went to apply the fairly recently codified tangible property repair regs, they quickly discovered that they were terrible, tangled trap that no one was prepared for. The IRS responded with some relief for small businesses in February with Revenue Procedure 2015-20, but the rules remain on the books, and will need to be addressed eventually.
The glass ceiling
That cracking sound you heard was the glass ceiling: In February, Deloitte named a woman, Cathy Engelbert, as its CEO, and then in May, KPMG named Lynne Doughtie its CEO, making the top spots at the Big Four 50 percent female. We should note that that means the top spots in the C-suite now match the entry-level gender split; at the partner level in firms of all sizes, men still outnumber women to a significant degree.
The Supreme Court weighs in
Two June decisions made the Supreme Court a major force in the accounting sphere: in King v. Burwell, it upheld the Affordable Care Act, and in Obergefell v. Hodges, it struck down barriers to same-sex marriage. Both will have enormous implications for your clients’ tax and financial lives.
Learning how to learn
The state CPA societies in Ohio, Indiana and Maryland and the American Institute of CPAs continued to champion new methods of learning, with the first “nano-learning” being approved in Ohio in March, and the AICPA and the National Association of State Boards of Accountancy proposing revised CPE standards in June to add more “blended” and nano-learning. Competency-based learning – where you have to prove that you actually learned something – is the next big frontier.
Audit quality issues
A report in July from the Department of Labor criticized the quality of a third of all audits of employee benefit plans; the AICPA was on the spot with initiatives and ideas for improving both audit quality and peer review. Expect the results to impact your practice in 2016.
Change and continuity at the PCC
Having steered the Private Company Council through its infancy, inaugural chair Billy Atkinson announced in April that he would step down at the end of the year. In August, the Financial Accounting Foundation named Postlethwaite & Netterville director Candace Wright to succeed Atkinson. Atkinson leaves her an organization in good shape: A three-year review carried out of this year results in relatively minor recommendations, and no diminution in its autonomy.
Tax-related ID theft
Some tax preparers reported that as many as 1 in 4 of their clients were the victim of tax-related ID theft last tax season, and in June the IRS reported that its Get Transcript function had been hacked, putting the data of over 200,000 taxpayers at risk. The IRS, tax software companies, payroll processes and other stakeholders came together on a number of initiatives they hope will make things more secure in 2016.
Pursuing value, in the cloud and elsewhere
Accountants and firms of all sizes ranged ever-more broadly in pursuit of new value to offer clients, beyond the profession’s traditional tax, audit and accounting services. While much of this involved the cloud – with plenty of accountants leveraging anywhere, anytime access to real-time data as a way to collaborate intensively with clients – plenty of it was simply about paying close attention to clients’ needs to identify non-commoditized needs.
In a variety of forums, SEC Chair Mary Jo White and Chief Accountant James Schnurr refused to let International Financial Reporting Standards fade away. No major moves yet, but the standards remain on the table, and the SEC continues to stress the worldwide desire for a “single set of high-quality accounting standards.” Europe and the IASB wholeheartedly agree.
The staff crunch
As with last year, the lack of staff remains one of the top stories in accounting. Despite public firms having hired the largest number of college graduates ever, they’re still struggling to fill spots. More important, the CPA profession as a whole is having trouble drawing in new exam candidates, which bodes in for both its near-term hiring prospects and its long-term viability.
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