Rapidly changing technology presents opportunities, challenges and threats to Mississippi’s CPAs.
“Certainly technology has dramatically changed how we conduct our business,” said Jerry Levens, CPA, president-elect of Mississippi Society of Certified Public Accountants. “The technology represents an opportunity to the CPA community, and can also represent a threat. The opportunity is an area of service that we can offer our clients in the business community, being a resource person to help them support software applications.”
The threat is that with simple and inexpensive software programs for preparing individual income tax returns, more people may opt for using computer software to file their own returns rather than consulting a CPA.
Levens said self-prepared tax returns increased 171% last year from 922,000 to 2.5 million. Most of this growth in the do-it-yourself tax preparation crowd are people under 30 who have grown up with computers. Since there about 100 million tax returns filed annually, the increase to 2.5 million self-prepared returns is “just a drop in the bucket,” Levens said.
But the trend may provide incentives for CPA firms to offer well diversified service lines. Levens said the average well-diversified CPA firm will have less than 20% of its fees generated from individual tax services.
“The threat from technology comes on the 1040 side, individual tax returns,” Levens said. “I don’t see it as much on business side.”
Jack Copperbarger, executive director of the Mississippi Society of CPAs, agrees.
“We’re not seeing large numbers of people using computer programs instead of going to a CPA,” Copperbarger said. “People in business still need the services of a CPA, and that is something I don’t see going away.”
Copperbarger said tax laws are complicated, and most business people can’t keep up without consulting a specialist. He adds that the changing technology means that many business owners expect faster results. Whereas in the past it was normal to have a turnaround time of a week or longer, now with faxes and e-mail, the turnaround time can be minutes or hours instead of days.
“It is all compressing down time-wise,” Copperbarger said. “We are all competing against each other, so we have a very competitive environment for getting work out quickly. We’re all racing, racing, racing. You think you’re caught up, get up next day, and there is another new technology that you need to get up to speed on.”
But the technology has brought about greater efficiency and ease. For example, instead of flipping through long pages of a manuscript looking for something, a search function can be used in a computer file to easily find what you are looking for.
While meeting the challenge of keeping up with rapidly changing technology, CPAs are also having to deal with a changing profession. Many CPAs are seeing the need to diversify into other areas, becoming a full financial service provider.
“I think most recognize that the trend in the CPA profession is to be more of a full financial service provider,” Levens said. “A big growth area for CPA firms is in the area of comprehensive financial planning, including offering investment advisory services.”
Traditional financial planning firms are also trying to attract customers away from CPAs. For example, some of the national brokerage firms are providing free tax reparation software on their Web site in return for information about potential customers, who will then be marketed products such as insurance and mutual funds.
Another trend is that CPAs are often being consulted in areas of technology such as software applications and network administration consulting work.
Other technology-related offerings available through the society and its national counterpart, the American Institute of Certified Public Accountants (AICPA) include CPA WebTrust and AICPA Technology Adviser Program (TAP).
WebTrust offers CPAs the chance to assure that Web sites which offer electronic commerce meet standards of consumer information protection, transaction integrity and sound business practices. The program allows CPAs to assure customers that those sites bearing the CPA WebTrust Seal are trustworthy and reliable with regard to confidential consumer information.
Contact MBJ staff writer Becky Gillette at email@example.com.