Barry Melancon, president and CEO of the American Institute of CPAs, and current institute chairman Bill Reeb believe that the accounting profession will have to transform itself to thrive in a rapidly changing landscape.
“I want to ask you to think about re-imagining the profession,” Melancon told attendees at the AICPA’s annual Engage conference, held this week in Las Vegas. “All sorts of businesses are finding their models changing. How can we believe that we’re exempt from that? The expectations of what we do and how we do it are evolving from every angle, and we need to evolve and meet those expectations.”
Joining Melancon in a dual keynote, Reeb said, “The future is going to be far different, and we need to understand that where we are and the incredible success that we’ve had doesn’t mean that if we don’t change, we’ll be able to sustain that.”
“How many examples of success come from defense?” asked Melancon. “Our profession ought to be about the offense of evolution and re-imagining ourselves.”
Fertile re-imaginations
The re-imagining that the two leaders proposed is wide-ranging, touching on everything from services to learning to the nature of CPA licensure itself.
“We’re seeing a change in the notion that the story of a business is just the financial statements -- it’s evolving to more of an integrated report,” Melancon explained. “Businesses are being called on to report on six different ‘capitals,’” such as financial and natural capital, and human and relationship capital.
CPAs are perfectly positioned to offer assurance on those kinds of information, as well as on the sustainability reports that are now released by four-fifths of the companies in the S&P 500.
“The element of trust we have from our past success allows us to operate in this new ecosystem,” Melancon said, and it also allows the profession a head start when it comes to offerings built around cybersecurity, blockchain and other emerging issues.
Re-imagining services doesn’t just mean expanding to new areas – old areas need transformation as well.
“How do we re-imagine the audit in the context of today’s technology?” Melancon asked, before describing how the institute’s Dynamic Audit Solution initiative is doing just that, aiming to create a new tool and methodology for this core service of the profession in the near future. “It’s not about today’s audit and figuring out how to embed technology in that. It’s looking at the technology and seeing how we can rebuild the audit from the ground up.”
More broadly, the two explained that the profession needs to diversify its services away from their traditional base in compliance.
“Low-end compliance will go away, but complex compliance won’t," said Reeb. "We can no longer say, ‘I know what went on in the past; you’re on your own for the future.’ Everything we do today has to be leveraged with an advisory side. It’s one thing to know what has happened; it’s another to walk away before we know where clients want to go.”
A major component of that move, he added, should involve technology: “We’re moving toward being the Borg -- where humanity interacts with technology so closely. There’s nothing that we do today that doesn’t start with technology.”
“If we’re the trusted advisors, we need at least to know the implications of many of these new technologies,” agreed Melancon. “We need to reinforce the idea that the profession is at the leading edge of these technologies.”
Technology will also be critical in enabling a new approach to constant learning.
“We need to be able to learn, unlearn and relearn,” said Melancon. “Illiteracy in the future will be redefined as those who can’t unlearn so that they can relearn.”
Citing predictions that people in the future will be spending as many as 101 days of learning out of every 400 days of work, Reeb noted, “That’s not factoring in augmented reality where I’m doing estate planning and a video pops up to answer a question -- our people will be learning as they go.”
As entry-level career paths change, the profession will also be looking for new ways to make sure staff have the necessary background and experience.
“How do we get experience?” asked Melancon. “We used to just work for several years – but we may have to evolve to some experience coming from simulations and technological means.”
From there, the two looked even further abroad, suggesting ways the CPA license itself might be re-imagined.
“How should licensure evolve? What should CPA evolution look like?” asked Reeb, before considering one particular direction that evolution might take. “Many of us tend to audit around the technology. Large firms are bringing on technologists -- it’s essential that we all become better technologists. If you fast-forward five or six years from now, it’s conceivable that there will be more technologists than auditors on an audit.”
The institute, he noted, is working with the National Association of State Boards of Accountancy to address that: “Our core service requires a skillset that is beyond the traditional accountant. How do we bring in the group that has those skills?”
Bringing a wider range of people into the profession will require another re-imagining.
“Entrepreneurial capital is shifting in terms of who owns that -- and our profession needs to reflect that,” warned Melancon. “Everyone says they’re inclusive, and large firms win awards, but inside those firms, individual people may feel differently.”
The institute has a tool firms can use to judge how open they are to diversity and how well their efforts at inclusion are working, he said – and it has also developed initiatives to draw in younger people as well, including a unique profession-focused Advanced Placement test, and efforts to reach more and more potential accountants in high school.
“We need to help young people see where they can be in the profession,” he said.
Moving forward
Despite its many advantages – from its strong position of trust and its history of adaptation, to the initiatives it has already undertaken to position itself for the future – there is no guarantee that the accounting profession will successfully re-imagine itself.
“We’ve gotten complacent, because we have so much compliance work that we talk about advisory, but never actually do it,” warned Reeb. “And we’re the 800-pound gorilla in tax, but we’ve gotten complacent, and aren’t moving up to becoming life planners to help clients get to their end goals.”
Nonetheless, both are optimistic about the profession’s future.
“When we have to change, we get very creative,” said Reeb.
