During 1998, the American Institute of CPAs (AICPA) conducted a year-long study to determine what changes CPAs need to make in their thinking and practices to be successful in 2000 and beyond. 177 meetings were conducted throughout the country with 3353 CPAs participating in the study. I was privileged to be part of the Mississippi Society of CPAs delegation. The conclusions reached in those meetings have recently been published in a booklet titled Focus On The Horizon.
Since our editorial focus this week is CPAs, I thought it might be appropriate and helpful to take a look at this report and see what it indicates about the future. At the outset, eight forces were identified that are likely to have a major impact on the CPA profession.
1. Non-CPA competitors. The number of new, non-CPA competitors, not bound by the profession’s code of standards and ethics, is increasing at an alarming rate.
2. Decline of new CPAs. The number of students and young people electing to join the CPA profession has dramatically declined.
3. Borderless world. As the world becomes borderless, the marketplace is demanding more complex, real-time advice and services, presenting unlimited opportunities for CPAs to expand their skills, competencies, and services.
4. Technological advances. Technology will continue to challenge and reshape our lifestyles, work patterns, educational experiences, and communication styles and techniques. Technology will rewrite the “rules of business,” leaving those far behind who will not harness it and effectively integrate it.
5. Pressure to transform finance from scorekeeper to business partner. The CPA in business is being challenged to deliver value to the organization and help create a sustainable competitive advantage.
6. Market value shifts. The perceived value of some of the profession’s cornerstone services — accounting, auditing, and tax preparation — is declining in the marketplace.
7. Leadership imperative. Corporations are conducting business in a world of commerce that is global, technological, instantaneous, and increasingly virtual. The leadership they require from both internal and external advisors requires new insights, new skills, and extraordinary agility.
8. Technology displacement. Many of the traditional, essential skills of CPAs are being replaced by new technologies that are increasing in number and being rapidly developed, often from unexpected sources.
After due consideration of these “macro” issues, the study concluded some specific changes that will be required for CPAs to stay viable and successful in our rapidly changing world. In summary, the following five observations were offered.
1. The future success of the CPA profession relies a great deal upon public perceptions of CPAs’ abilities and roles.
2. CPAs must become market driven and not dependent upon regulations to keep them in business.
3. The market demands less audit and accounting and more value-adding consulting services.
4. Specialization is critical for the future of the CPA profession.
5. The marketplace demands that CPAs be conversant in global business practices and strategies.
What does all this mean? Simply that the world of business is changing rapidly and CPAs must change also. The old days of performing audits, bookkeeping services and preparing tax returns must give way to the new era of high technology, specialization and worldwide perspective. The professions traditional opposition to the active marketing of it’s services must be shelved in order to compete with more aggressive firms and non-CPA competitors.
Will CPAs make the changes required to be meaningful in today’s business environment? Absolutely. The CPA profession has always been marked by its devotion to integrity in all things and they will re-position themselves to render increasingly valuable services to business on the new playing field of 2000 and beyond. You can count on it. After all, any group who reeks with integrity is destined to prevail.
Thought for the Moment
Do not be deceived. God cannot be mocked. A man reaps what he sows.
— Galatians 6:7
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. His e-mail address is email@example.com.