Preparing for the Future of the CPA Profession

Natalie Merrill
April 3, 2016

At the 1st Global National Conference 2015, Carl Peterson, CPA, vice president of small firms at the American Institute of CPAs (AICPA), provided his thoughts and findings concerning the challenges and opportunities accounting professionals are facing today.


As an advocate for small firms and representative for CPAs, Peterson was able to bring insight regarding how his organization is working to make improvements for the CPA profession as a whole.

One specific area the AICPA is targeting is the auditing process for CPA firms. The Department of Labor (DOL) released a report that revealed 50 percent of the firms in a conducted study had deficient employee benefit plan audits. The AICPA has come up with a six-point plan to enhance the audit quality in its initiatives. The plan includes the following:

  • Pre-licensure — The AICPA has an advanced placement accounting program that’s been approved for high schools and will be implemented in the coming years.
  • Standards and ethics — The AICPA has been working to help firms set up quality control within their practices, no matter what size they are.
  • CPA learning and support — The AICPA is adding various certifications in different areas of the profession.
  • Peer review — There will likely be upcoming changes. Peterson pointed out that the report from the DOL proved there is a definite need to address audit quality.
  • Practice monitoring of the future — The AICPA is currently developing a tool that firms can use within their offices that will monitor processes and where firms are in terms of engagement in order to help with better audit results.
  • Enforcement — Peterson reminded conference attendees that when you’re working with the National Association of State Boards of Accountancy and the state boards, it’s necessary to ensure you have the proper enforcement and remedial education, as the two actions help change behavior.

Commoditization and Recruiting Challenges and Opportunities

But auditing procedures aren’t the only concern for the AICPA, as there are certainly challenges CPAs are currently facing regarding the relevancy of the profession, especially with the increasing amount of technological advantages that are prevalent in today’s society. One such obstacle is commoditization — the idea that individuals will take to doing their own taxes each year for less cost. However, Peterson doesn’t believe that these options for clients to be more independent in their tax matters will be the demise of the public accountant industry.

“I don’t think the tax payers and the individuals who are our clients want to be doing their own tax returns,” he said. “They want to have the higher-value service that we provide. So, we’re still relevant, even though there’s a downward pressure with commoditization.”

Another challenge the CPA profession is familiar with is drawing more young talent into the industry. Peterson cited data that about 82,000 graduates earn accounting degrees each year, but only about 26,000 of them are actually becoming CPAs1. Peterson said it’s essential for the younger generations to see the value in the profession, and the AICPA has three measures it’s taking right now to help with this:

  • Increasing its presence on college campuses around the country.
  • Expanding beyond four-year colleges by going to community colleges and making sure there’s a presence there.
  • Building relationships with academics.

Peterson said there’s a lot of opportunity, and every time he meets new professors at different colleges and universities around the country, they are all very open to having small firms or anyone in the industry come to speak to their classes. However, he noted that the students don’t necessarily see the full impact, and it’s something his organization needs to continue to address and improve.

“I think it means we have to work on colleges and universities and in high schools, letting these kids know what the opportunities are,” he said. “If you think about all of the people who are going to be retiring here in the next few years, young people today are going to have the opportunity to become owners far earlier than we did and make impacts earlier than we did.”

While AICPA research has found that students see value in being CPAs — in both careers and in life — Peterson said there is still a lot of work to be done in this area, and it’s quite concerning that so many graduates are choosing not to take the CPA exam. He said the environment makes a huge difference in this decision.

“We need to let them know what the opportunities are and how life really is as a CPA in public practice today — talk about the opportunities you guys have and what you’re doing in investment advising and how important that is to customers,” he said. “They want to have an impact just like we’re having an impact today in our careers. They want to have that same impact — and they want to have it sooner than we did.”

One thing that’s important for the younger generations to be attracted to is the culture of the firm, Peterson said. He mentioned firms he’s worked with in the past where the cultures were simply “phenomenal.” The people there are passionate about being at their particular firms, which makes the clients want to be there, too.

“I think we constantly have the opportunity to look at the cultures that we have because when we think about recruiting and retention, if we’re not attracting any of these young people, then it’s probably something internally that we need to work on,” he said. “That really gets into the whole talent piece. If you have the culture, and you have the technology to support it, you’re actually going to have the talent to do the work that you want to do.”

For more information on the AICPA, you can visit its website, and for more information on Peterson, you can visit his bio page on the AICPA site.

 

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1http://www.delawarebusinesstimes.com/delaware-c-p-a-firms-face-staffing-challenge/