Art of Accounting: We are being dragged kicking and screaming ...
Last Wednesday I heard AICPA president and CEO Barry Melancon speak at the Accountants Club of America and he literally is dragging us while we are kicking and screaming into the here and now future. His speeches are always a don’t miss opportunity and he spoke to a sold-out crowd.
Barry is a practical courier of the future and he provides us with visions of what we need to be prepared for and a way of accomplishing it. He has pungent points that many of my colleagues do not like to hear because they are doing very well and are comfortable and don’t want to upset the current status quo of their roles. Barry’s contention is this self-satisfaction and complacency is what has led many well-known institutions into oblivion. His concern is not for one particular firm or another, but for the profession to maintain its relevance as trusted advisors. In many respects CPAs are the most trusted of all groups. He wants us to keep it that way, but we can only maintain this positioning by growing, adapting, moving forward and evolving with haste.
He is a good speaker with a well-prepared and documented presentation. It was hard to listen and not buy into his admonitions. But buy-in requires a realization of the validity of what he is saying and then the desire to implement changes. Yes, it is about changes, but we are not initiating the changes. The marketplace is. In some respects keeping up might be the best we can do, but not trying will leave us lost in the dust. The “we” is the profession and the changes will affect every way business is being done.
Physical offices are being replaced somewhat by technology that permits people to work from any location in the world; artificial intelligence is driving changes in the audit process, which is still the exclusive purview of public accountants; and clients are redefining their needs into more complete and strategic planning about their overall situation and less so about the individual components of tax, financial and investment planning.
Further, while many firms use the time billing model, the accelerated adoption of the new technology is reducing the time we spend, while not permitting a reasonable capture of the costs of adding the technology, so we have to adopt different pricing methods that lean toward a results-oriented, value-based model.
Disruption has taken on a new meaning these past few years. Well-established institutions have been disrupted out of the hundred-plus year positioning they’ve earned. Barry gave Sears and Kodak as illustrations. We can all come up with many more, and he fears that if accountants pause, just for a minute, it could happen to us. Sears, in addition to being the leader in its core business, was a pioneer in the internet as an early partner in Prodigy, and Kodak owned the digital photo technology. Both paused so they could maintain their positioning while easing into the new arenas. Those pauses gave the disrupters free rein to upset the status quo and in it the destruction of the well-earned and deserved reputations and intangible value both companies amassed.
The accounting profession has been evolving and growing for 130 years, but we cannot rest on that history or we will be history. In 1913 no one thought accountants should do taxes, but our profession’s leaders thought otherwise. In 1933 the accounting profession’s leaders thought we should audit public companies rather than Congress’ choice of government accountants. Both of those pushes created “franchises” that will continue until we pause. Our pause could create a window of opportunity from others. The pause can be as short as the time it takes to make a decision about whether to use artificial intelligence in the audit process, or to adopt different tax preparation methods.
Barry said that about a third of the recent accounting firm acquisitions or mergers were with non-CPA firms. This means that the larger firms are acquiring people skilled in areas other than traditional accounting. Changes are in the air. He began by saying that the pace of change will never be as slow as it is today. That got my immediate attention, and my excitement about where we will be going. According to Barry, it can be done; it just needs the right attitude and desire to move forward.
Out of all of this I have a clear point. Barry Melancon is leading our profession into the future and into continuing relevance, and he is doing it even with all our kicking and screaming. If you get an opportunity to hear him speak, do not pass it up. What he says is important and you might even get an idea or two from it. I know I did.
If you want more information about the Accountants Club of America and its future programs, the website is www.accountantsclubofamerica.org, or you can email me at email@example.com.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or firstname.lastname@example.org.