Slideshow Top Stories in Accounting in 2014

  • December 30 2014, 4:12pm EST
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Top Stories in Accounting in 2014

2014 was more a year of trends than of events – the most important stories unfolded over months, and played out in firms across the country, rather than in the headlines.

With that in mind, here are our editors’ picks for the profession’s biggest stories of the year.

(Click here to see our Top Stories in Tax in 2014.)

9. New Ways to Learn

If you thought the webinar had changed continuing professional education, wait until some of things talked about in the American Institute of CPAs’ “Future of Learning” report come about. The May report outlined a whole new way of learning, grounded in technology and based on the revolutionary concept of “competency-based” learning, where you’re judged on whether you’ve actually learned something, not how many hours you spent. Add to that the June announcement by the Ohio Society of CPAs that it would begin allowing CPE in increments of 10 minutes (several other states are considering or have approved similar moves), and it’s clear that a revolution is underway in accounting education.

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8. New Rules for Auditors?

In 2013, the Public Company Accounting Oversight Board proposed changes to the auditor’s report – the first in 70 years. It gathered feedback through April of this year, and is currently digesting the many comments it received. In the meantime, while the PCAOB had given up on its push for auditor rotation, it’s paying keen attention to the mandatory retendering rules that started to be put in place in Europe this year, which it reports has led to lower audit fees and concerns about quality.

7. The Rise of Client Accounting Services

On the one hand, technology has been commoditizing many traditional accounting services; on the other, it has been opening a whole new range of possibilities to replace those traditional services with newer, more-valued added ones. Couple that with the growing acceptance of the cloud, and the result is the boom in interest in client accounting services and outsourced CFO services, where accountants leverage the real-time access to systems and data offered by the cloud to develop more intimate, more forward-looking and more valuable services for their business clients.

6. The Weak Link in IT Security

As Pogo noted, the enemy is us – firms that don’t maintain proper firewalls, invest in secure communications, or lay out clear security policies, and employees who create weak passwords, take short cuts in communicating private financial data, and cram everything they can onto thumb drives that they promptly lose at the nearest Starbucks. High-profile data breaches at Home Depot, Target and Sony (the last of which, bizarrely, revealed the old salaries of thousands of Deloitte employees) have raised awareness, but IT security is going to need to become even more of an issue than it already is for the profession to get on top of it.

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5. The End of Convergence

With a January vote to re-organize its future agenda to focus on the needs of its own stakeholders, the Financial Accounting Standards Board sent a clear message that it’s moving away from the decade-long convergence process with the International Accounting Standards Board. Though the boards issued a converged standard on revenue recognition in June, FASB reinforced its message throughout the year, talking up areas where the two were unlikely to agree and highlighting a strengthened focus on making GAAP easier for stakeholders to implement, while its parent, the Financial Accounting Foundation, even set up a new section of its site to promote the value of GAAP.

4. The ACA Juggernaut

It seems as if the Affordable Care Act is perpetually being rolled out, as different parts of its myriad provisions come into staggered effect in a variety of areas – all of which affect accountants. From advising business clients about their requirements under the ACA, to helping individual clients handle the Net Investment Income Tax, and bracing themselves for the new flood of responsibilities that will come their way in tax season, the profession is finding health care reform taking up more and more of its time.

3. Large-Scale M&A

Mergers and acquisitions aren’t new to the profession – they’ve been an engine of change in accounting for over a decade and a half – but this year did see a significant rise in major mergers among the Top 100, and big unions among large firms. Consider June’s acquisition of Rothstein Kass by Big Four firm KPMG, or September’s addition of super-regional firm ParenteBeard to Baker Tilly Virchow Krause, or October’s merger of Watkins Meegan into CohnReznick. And November gave us the combination of Decosimo and Elliott Davis, and SS&G joining up with BDO.

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2. Trouble with Taxes

A damaged IRS and a dilatory Congress added up to uncertainty and confusion on the tax front. Lawmakers’ inability to pass extenders’ legislation, despite a full year of warnings from every single person in the country who isn’t a lawmaker, left tax practitioners and taxpayers with no clear direction on dozens and dozens of important credits and deductions. At the same time, budget cuts and self-inflicted wounds in the shape of the Lois Lerner scandal have left the IRS low on both resources and credibility, so much so that tax pros are bracing themselves for a major decline in service in the upcoming tax season.

1. The Staff Crunch

This wasn’t one big story -- it was thousands of them across the country, as firms of all sizes struggled to fill open positions. A short-term shortfall resulting from the recession and longer-term trends in rising demand and attractive alternative careers have combined to make qualified job candidates hard to find in accounting – which in turn is undermining succession plans, raising salaries, upping the value of technology, and giving younger accountants greater leverage than ever before.