As part of this year’s Top 100 Most Influential People survey, Accounting Today asked, “What is the most important issue currently facing the accounting profession?"
The full responses of all the candidates are below. The full T100 list is available
The number one issue facing the accounting profession and firms today is the need to do more with less. Firms need to accelerate the adoption of cloud-based solutions and advanced technologies like artificial intelligence and robotic process automation to drive efficiencies. Before the COVID-19 pandemic, our client conversations focused on when they would move to the cloud and on encouraging a sense of urgency in expediting their transition. Our more progressive clients understood the opportunities presented by cloud technology and were already prioritizing their transition. But many others were not so convinced.
The pandemic was a catalyst for technology and created a clear shift…making it clear to companies in virtually every industry, including tax and accounting, that if they want their organizations to have the flexibility and scalability to thrive, especially during times of disruption, they need to get to the cloud, and fast. So now, we're spending far less time educating clients about the benefits of moving to the cloud, and spending more time advising clients on the most common cloud question we now receive - how fast can you get us there?
By embracing expert solutions that combine technological innovation with deep domain expertise, firms can automate compliance work, and respond more quickly to regulatory changes. This gives their staff more time to focus on the value-add advisory services that can drive growth and improve employee satisfaction and retention.
— Karen Abramson, CEO, Wolters Kluwer Tax & Accounting
The audit profession is at a pivotal moment. Our profession will undergo more transformational change in the next 5 years than in the past 50 years. We are facing various externalities — advanced technologies and a digital landscape — that are forcing us to change or face the alternative of becoming obsolete. As with any industry or profession, most of these factors are not unique to us. Transformation is key to our continued success and we are embracing new behaviors, new processes, new technologies, and new talent models, all while sustaining quality as assessed by our regulators. The audit of the future will (1) be delivered in real-time, (2) connect seamlessly, (3) leverage big data, and (4) support cognitive, digital, and automation technologies. The result — an audit that is no longer viewed as an obligation but as an opportunity.
While today's audits rely on technology-driven processes, our people are still our most valuable asset and will always be critical to delivering a high quality, value added audit. Lara shares that our people are our most valuable asset. Under my leadership, we have focused on the skills and capabilities auditors of the future will need. Auditors will need not only a solid foundation of accounting and auditing skills and a deep understanding of business process and controls, but they will also need to be able to apply data analytics and use advanced technologies — all while applying professional judgement and skepticism. We are upskilling our professionals and refreshing our recruiting strategy and talent practices for our people to have the skills necessary to execute the audit of the future.
The impact from the pandemic and the virtual-first environment caused shifts in the workplace. These drastic shifts in the workplace have directly impacted how we collaborate to conduct and deliver work and the expectations of our workforce. People have enjoyed working from home and having the additional flexibility. Yet, we are a professional services firm, so elements of our clients' wants and needs have a significant impact. If our clients are going to be remote, then we'll be remote. If a client wants us there, we'll be there.
Diversity, equity, and inclusion and the role in the future state of our profession is also top of mind. Our organizations and our communities have faced an alarming combination of a global health pandemic, economic uncertainty, and social unrest, all of which have disproportionately affected under-represented members of our communities. In times of economic crisis, with so many competing demands, history has shown many companies lose focus on their DEI initiatives. In reality, during social and economic uncertainty we should all be even more focused on DEI. A diverse workforce means more perspectives, more ideas to bring innovative solutions to clients, broader empathy and understanding of the impact of emerging events — all of which are critical to the success of organizations and, ultimately, moving our economy and society forward. Laying the foundation when times are good and steadfast commitment during challenging times are equally necessary to drive actionable change when it is needed most.
When I think about the decline in students graduating with an accounting degree or a decrease in the CPA exam candidates as well as what I'd focus on for the profession, I view it in five key areas.
- Marketing: Elevating the awareness of the profession
- Branding: Redefining the perception of the accounting profession by highlighting the value of an accounting degree and the unique opportunities and exposure gained from a career in accounting
- Entry into the profession: Attracting students to explore accounting at College/University to expand the pipeline of college graduates eligible to sit for the CPA exam or seeking other accounting or tax related certifications and entering the accounting profession
- Compensation/benefits: Rewarding professionals in a meaningful way commensurate with value delivered and the scholastic and licensing requirements of a CPA
- Professional development: Developing the accountant of the future through various learning and developmental opportunities and exposure to business skillsets paving the way to a wide array of executive level positions within or outside of public accounting
My leadership focuses on combatting these key areas and bringing more exposure and clout to our amazing profession.
— Lara Abrash, chair and CEO, Deloitte & Touche
The most important issue is the accelerated pace of change and transformation — not only in how firms are operating — but economically, socially, politically, and the impacts on resources and talent. From pandemic-related staffing shortages, to rethinking physical office spaces and remote work, to addressing socio-economic pay gaps, all within the backdrop of record M&A activity, and serious pressure to scale and expand.
— Sona Akmakjian, global head of strategic accounting partnerships, Avalara
Everyone talks about staff turnover and retention — and those are clearly important issues — but those are symptoms of the real underlying issue, which is relevance. Staff does not see the relevance of what we do. It doesn't matter whether we're talking about tax or audit, they see what we do as purely compliance. To most staff members, their work is a bunch of hours spent ticking and tying or filling out endless paperwork. They don't have the time or support to get their heads above the screen to think about what it is they are doing. They are not able to really talk to the client and developing an understanding about how this particular business operates.
In the back of their minds, they know that a lot of the manual work they're doing could be automated. Younger people are heavy users of technology in their personal lives, using the apps on their phones and TVs to perform tasks by just speaking instead of dialing a phone number or typing in a search query. But at work, they're in the technology dark ages and are stuck doing rote mechanical tasks. Even if they're using software for their work, they're not fully using all the capabilities, often because managers and supervisors do not know how to take advantage of the automations that have been available for close to twenty years. About five years ago, fewer than 50% of firms were doing a good job of linking a trial balance to the financial statements. Today, it's about 75%, but that means that 25% of firms don't take the time to link to the financials. They're not thinking about the end game of what the financials will look like and working backwards to make the process more seamless and easier.
We have been complicit in the commoditization of audit, tax, and accounting services. When our clients can't tell the difference between the services of different firms, they select their provider based on the only differentiator they can see, which is price. In their rush to move from one low-fee engagement to the next, team members do not have the time to think about what they are doing, and how this client's business relates to the other businesses they have worked with. The result is that the audit firm doesn't provide much more than a stack of paper with an audit report printed on it.
We can change this by encouraging the development of a business-minded culture and business acumen so that team members can help the clients they work with to improve their businesses. We can teach team members to ask better questions – not just yes or no questions, but open-ended questions where they don't know the answer. We also need to give them the time to probe and ask questions so that they really understand what's going on in a business. The problem today is that staff members don't believe they have the time for in-depth conversations because they're scheduled back to back to back so they can get the compliance done.
Another way we can change this is by culling the bad clients, which will indirectly improve relevance. The combative and difficult clients consume a great deal of time without providing any value. Even if we do provide relevance for these C and D-level clients, they won't appreciate it, and they certainly won't pay for it.
Besides culling the bad clients, firms can also increase relevance by thinking about the kinds of clients they serve. It's nearly impossible to provide relevance for every single business line out there, so developing an industry expertise will become essential for providing relevance to clients. Firms that are focused on industry niches can provide relevance, even in compliance services, because they have seen how other businesses solve the same problems and they have an understanding of the tech tools and processes that businesses can use to streamline their back-office operations and improve internal controls. They can see the big picture of how transactions originate and how they are processed through the accounting system to end up in the financials.
— Alan Anderson, founder and president, Accountability Plus
The past two years have been a defining moment for the profession as a trusted advisor for businesses of all sizes. Although talent and managing complexity are clearly top issues, the evolution of the practice and services through technology advancement continues to be the greatest opportunity for the profession – and the best way to manage the talent and complexity challenges.
— Erik Asgeirsson, CEO & president, CPA.com
Attracting and retaining qualified staff. Every conversation I've had over the past few months has involved the idea that firms are short-staffed, struggling to find people, losing people, and are juggling 4,000 different duties. The end result of this is that everything takes longer. Firms know how critical education is, for example, but the idea of taking two hours away from client-work can often be debilitating and means that the vital updates to technology being used get deferred. One shift I'm seeing in real-time is the move to bring on less credentialed resources, by leveraging technology to allow those individuals to accomplish the work that previously would have only been possible with highly skilled and qualified people.
— Kim Austin, director, global strategic accounting partnerships, Avalara
I continue to believe it is relevancy. Baruch Lev's work in this has proven the point. In his book, "The End of Accounting," he writes, "Today's financial reports provide a trifling 5 percent of the information relevant to investors." For that reason, I believe the profession should relinquish (or be stripped of) its audit monopoly, which would allow competition to bring innovations to the market. Auditing firms are not independent, and cannot be independent despite what the profession states, because one cannot be paid by the organizations being audited. Insurance companies should be allowed to offer financial statement insurance to stakeholders who desire it, and the stock exchanges should select and pay the auditors on behalf of their listed companies, as part of their branding and value propositions. No, this reform would not be perfect. But it should be compared to the status quo, not some utopian vision. It would definitely be an improvement over the intolerable current system.
— Ron Baker, founder, VeraSage Institute
Recruiting and retaining talent: Almost a quarter of all tax professionals are 55 years or older. In recent years there is a 36% drop in the number of bachelor and master's degrees in accounting. The workforce is aging out and there aren't enough interested young graduates to replace them. Firms today must evolve their technology stack and office culture in order to free up time, streamline workflows and surface important insights so that firm partners and employees can focus on higher value work and help clients thrive.
— Elizabeth Beastrom, president of tax & accounting professionals, Thomson Reuters
There are a number of important issues facing the accounting industry today, but I think that the biggest issue the accounting industry – and many other industries continue to face – is the ability to attract and retain key high-performing talent during an ongoing competitive "war for talent". Not only are we facing an unprecedented talent shortage in the marketplace, but the increasing demand for flexibility, remote work and other nontraditional benefits is creating an opportunity for employers to think in new and innovative ways when it comes to attracting and retaining talent. To remain competitive in today's environment, we've reviewed everything from the schools we recruit from to the benefits we provide our people to make sure that we're doing what we can do be an employer of choice in our industry.
— Brian Becker, managing partner and CEO, RSM US
The evolving role of CFO beyond finance is putting more strain on the organizations they support and therefore forcing a change for the overall accounting/finance function with organizations. Below are examples of CFO personas, therefore the finance and accounting functions, and how they are adapting to new ways of working.
- The Chief Facilitative Officer – Traditional CFOs have been finance purists, but Chief Facilitative Officers get involved in other key areas, such as HR, operations, sales, and marketing. The U.S. is emerging from a year of extraordinary economic regrowth fueled by inventory rebuilds and cash-rich consumers. But in 2022, we've seen many signs of deceleration and uncertainty. That's why strong and decisive Chief Facilitative Officers are in higher demand than ever. Sixty percent of U.S. CFOs view themselves as Chief Facilitative Officer, while, more CFOs with facilitative traits report they are responsible for digital transformation (81%), strategy and future planning (80%), and IT and technology purchase decisions (78%) than the other two personas.
- The Chief Fairness Officer – This persona is characterized by empathy and the fundamental understanding that a business is defined by its people, not profits. Connecting math to mood and facts to feelings, the Chief Fairness Officer nurtures employees and guides the organizations toward a more equal future. This is especially true in the U.S., where 79% of finance leaders report their organizations actively encourage them to put purpose over profits, prioritize their people (77%) and account for empathy and understanding when making business decisions (75%).
- The Chief Future Officer – Modern companies cannot simply observe and react to change. Instead, the CFO must foresee new technologies, identify emerging market shifts, and prepare for the wider economic or political outcomes that could affect their business. The Chief Future Officer focuses on forward-looking issues within – and outside – the organization, including the ability to integrate new and emerging technologies, remote and hybrid work environments, and a lack of diverse talent. These future-focused CFOs are often fully embedded into nearly every facet of business operations (58%), more so than the Chief Fairness Officer (42%) or Chief Facilitative Officer (38%) personas. They also enjoy enhanced collaboration with other executives and leaders.
— Aziz Benmalek, president, Sage North America
Talent - There is really a shortage of new accounting talent to meet the needs of the business, government, and professional services industry. One way to address this is for Business Schools to continue to provide a quality education to accounting students – but also once they are in the profession, to ensure they are given opportunities where their interests and gifts are best utilized. It is also incumbent of all accounting and tax professionals to be curious and lifelong learners. Organizations should provide relevant and quality continuing education, mentorship, sponsorship, and meaningful career advancement opportunities.
—Michael Bernard, vice president of tax content strategy and chief tax officer, Vertex Inc.
The most important issue is making the profession attractive to top talent. We need a strong, diverse talent pipeline to ensure the profession continues to play a vital role in business and in the financial markets. People coming into our profession should know they can grow and thrive professionally and personally. In fact, we've recently launched a campaign showing how that can happen and what it means to thrive in professional services today.
— Wayne Berson, CEO, BDO USA
There are many important issues currently facing the accounting profession. I believe that one of the biggest challenges is the decreasing number of candidates seeking to become CPAs. Our work on CPA Evolution is a response to that threat.
— Ken Bishop, president and CEO, National Association of State Boards of Accountancy
The opportunities provided by technology. Financial information is already being consumed in a very different way and the rapid changes in technology will only continue to evolve that consumption. As accountants, we need to take advantage of the opportunities afforded to us by the advancements in technology. While we do need to address the need for more accountants entering our profession, taking advantage of technology can mitigate some of the impacts we experience with profession-wide workforce shortages. While there isn't a specific role for us as standards setters in this evolution in the use of technology, the GASB would like to be as helpful as we can, and to provide leadership as appropriate, in the process.
— Joel Black, chair, Governmental Accounting Standards Board
Removing the barriers around accessibility and affordability is a top priority for our firm and for the profession. EY has a direct interest in maintaining a vibrant and growing pool of CPAs. That's why EY has been working within our organization and across the profession to increase the accessibility, affordability and attractiveness of a career in accounting. Studies such as the Illinois CPA Society's "A CPA Pipeline Report: Decoding the Decline" show that survey respondents cite "time commitment needed to study for and pass the CPA exam" as the biggest barrier to becoming a CPA.
We are helping to address that through our historic and ground-breaking EY Career Path Accelerator program, which launched last year. It's aimed at students who are not pursuing a master's degree, but who are on track to become CPA-eligible and need a more accessible and affordable way to reach that goal. This is an important area of focus and we're glad to see other firms undertaking similar efforts, which benefit the entire profession.
Research also shows the likelihood of choosing to become a CPA drops dramatically after the age of 22. That's why EY works to introduce potential candidates to our organization and the profession before they enter the business world.
For EY, this starts at the high school level through accounting awareness efforts, including one-week summer programs to introduce racially and ethnically diverse high school students to the accounting industry and professional workforce.
At the college level, we continue our engagement through such initiatives as the EY LAUNCH internship program, where students who major in Accounting, Business and Information Technology and who are two or more years from graduation, work across all four of our service lines and gain exposure to our business, culture and advanced technology and tools.
Students pursuing an MBA or an advanced degree, play an important role on our high-performing teams and have opportunities to perform transformational work for some of the world's leading brands. At EY, there's a chance to learn from the best, surround yourself with the curious, ask better questions to seek better answers and build a better working world.
Today, a career in assurance is multi-dimensional. It's about delivering the highest quality audits and reporting (financial and non-financial) that enable businesses to make more informed decisions. At EY, our CPAs play a key role in strengthening trust and confidence in the capital markets. We deliver high quality audits and reporting that enhance transparency, and we deliver independent insights that distill the complexities of our global environment. A career in assurance is also about meaningful interactions with EY clients, reviewing strategy, assessing risk, and forecasting growth. Being a CPA today requires an analytical and innovative mindset along with a thirst for knowledge and learning and an eye for detail.
To help advance careers, we have award-winning programs such as our Audit Academy, which allows professionals to develop their skills as they continue learning. We believe in nurturing talent to provide future business leaders for a global marketplace, and we make every effort to ensure our professionals have the relevant skills. For example, through our collaboration with Hult International Business School, the firm also offers fully accredited degrees, including a Tech MBA and Masters in Sustainability, free of charge to all colleagues.
EY has also made a substantial commitment to support strategic initiatives such as the Center for Audit Quality's Bold Ambition, aimed at increasing the representation of minority groups within the accounting profession. Bold Ambition includes Accounting+, a multi-year initiative to increase the profession's diverse talent pipeline by informing students about the benefits and possibilities of a career in accounting, and a Bold Ambition website that provides more transparency into the profession's diversity, equity and inclusion actions and efforts.
— Julie Boland, U.S. chair and managing partner and Americas managing partner, Ernst & Young
The most important issue facing the accounting profession today is business transformation. This requires a fundamental change in all aspects of the firm to make them successful and future-ready. Beyond changing technology, which is inevitable, firms must also adapt their leadership, talent, processes and growth strategies. They will also be challenged to embrace innovation and create a culture that attracts and retains a more diverse team.
— Jim Boomer, CEO, Boomer Consulting Inc.
Business transformation. Technology, talent and processes during a pandemic have been both enabling and disruptive. Members of the profession who learn and adjust to these new opportunities will sustain success while remaining future-ready. The focus is on leadership, talent, technology, processes and growth and requires shifts in mindsets and operations. People place too much focus on capacity and not enough on capabilities, automation and innovation through the use of unique-ability teams.
— L. Gary Boomer, founder, visionary & strategist, Boomer Consulting Inc.
Talent! "The talent drain", especially in Advisory is extremely concerning. Advisory consists of individuals with unique and deep skillsets. These individuals are in short supply and high demand. This continues to create obstacles as firms continue to build out and expand advisory practices.
— Jim Bourke, managing director, advisory services, WithumSmith+Brown
The world is changing quickly, and business leaders are tasked with tackling new and evolving challenges, specifically the need to build trust with a variety of stakeholders and to deliver better, sustained outcomes. To thrive today, and in the future, it takes trust. The accounting industry is built on quality, independence and objectivity, and these foundational elements help build trust in society.
As a result of the critical role trust plays in business, the profession—along with regulators and policymakers—is being tasked with determining how to disclose material nonfinancial information, such as ESG data on climate change, human capital management and more. These issues can play a role in a company's long-term value creation, and we know that investors are increasingly using this information to make investment decisions.1 And investors and other stakeholders deserve to have the same confidence in ESG and other nonfinancial information as they do in financial disclosures. As more companies make long-term, ESG-focused commitments, these strategies should include milestones underpinned by the profession. Companies cannot manage what they cannot measure, and a strong focus on ESG reporting can help companies understand where they are, track progress against goals and communicate with stakeholders.
— Wes Bricker, vice chair, Trust Solutions co-leader, PricewaterhouseCoopers
Burnout is a pervasive problem due to all of the deadlines and demands bookkeeping, tax, and accounting professionals face, plus added pressure that we're still under, and trying to recuperate from, thanks to Covid.
People are fleeing the industry due to these issues mentioned above. The solution, in my mind, is to meet established professionals where they are and help them find a better way and a more peaceful path forward. The truth is, to be successful in this profession technology in a firm has to be as efficient as possible.
The 80-hour workweek is not reality, any longer and it certainly isn't efficient. The goal is to not be in the office all the time and still make more money, while delivering awesome service to our clients.
— Dawn Brolin, founder, The Designated Motivator, and CEO, Powerful Accounting
The profession is facing (and has been facing) a lot of challenges but none I think is more important than the issues surrounding human capital. I see these issues as two fold.
The first being the imperative to create a more diverse and even more importantly, inclusive profession. The second is to recruit and build up the next generation of leaders for the profession.
Both of these issues go far beyond the initiatives or reach of any one firm or corporation and beyond any association. It is only through purposeful, transparent, collaboration, that recognizes that a rising tide will raise all boats, that our profession will not just survive but thrive into the future. Working towards this, together, is not optional. The "public" in our middle name mandates it be a collective effort for the betterment of all. Though often silent and behind the scenes, the accounting and finance profession is a critical piece of infrastructure in the economy and our world. Having the talent to serve and maintain that infrastructure is essential. One final and hopeful insight: Henry Ford once said "Coming together is a beginning. Keeping together is progress. Working together is success." Through the challenges of the last 2 ½ years, I have seen the power of thi on display in our profession and it give me great hope and excitement for our future.
— Rebekah Brown, CEO, Maryland Association of CPAs
Building and nurturing a strong talent pipeline to meet the needs of the profession and the public interest.
— Jennifer Burns, chief auditor, AICPA
The last two years have been unlike any other with a global pandemic, the "great resignation," and now concerns over economic uncertainty as economists, pundits and business leaders discuss the impact of inflation and the possibility of a recession. This means that clients are asking and expecting more from their accountants and bookkeepers. Accountants' role has evolved from being the person who maintains their clients' accurate books to now being a trusted advisor, a teacher, a confidant, a business coach, and more. With this expanded role and increasing expectations from clients, accountants need tools that set them up for success – from automating manual processes to free up their time for higher-level work to providing real-time data insights that inform and guide their clients' business strategies. Embracing these new roles and the new tools that power them is key for today's accountants.
— Ted Callahan, director, Intuit QuickBooks partner segment
Talent/Succession is the most critical issue facing the profession today. This is not a new issue, but it was exacerbated by the pandemic. Many firm leaders are focused on finding more people, but the bigger opportunity is understanding what capacity is truly available and what roles and skills are needed for the future. We must be willing to look beyond geographic limitations and explore outsourcing and automation. The biggest obstacle is mindset. We need to see this as an opportunity rather than a challenge.
— Arianna Campbell, shareholder and consultant, Boomer Consulting Inc.
Talent shortage – decreasing number of individuals entering the profession.
— David Cieslak, EVP, chief cloud officer, RKL eSolutions LLC
Our talent shortage and ability to attract and retain the volume and quality of professionals needed to serve clients, the public and assure the profession's success.
— Susan Coffey, CEO, public accounting, Association of International Certified Professional Accountants
DEI. If we don't start taking DEI seriously as a profession and investing resources in embracing diversity, providing equitable workplaces, and practicing inclusion, we will be left behind and we'll miss out on incoming talent. Increasing the diversity of the profession requires a focus on DEI throughout the promotion, attraction, education, assessment, recruiting, and retention phases of the CPA Pipeline.
— Crystal Cooke, director, diversity and inclusion, AICPA
Mental health and employee wellness. As we exit from the pandemic it has become increasingly clear that the human element in our industry has been overlooked for too long. It's been especially difficult for the youngest members of our profession, who haven't been given the same opportunities for daily face-to-face mentoring that the rest of us had.
The influx of private equity is reshaping the accounting industry as well, as is the employee migration away from professions that place undue demands on employees. By advocating for mental health support, I hope to prepare the industry to move into a new era. The message is designed to improve employee satisfaction, thereby attracting the most talented young men and women we can find and making sure they stay with us throughout their careers as they grow and thrive. Part of the process involves working with top-tier management to help them understand that investing in human capital wellness can actually increase productivity and profitability more so than an endless push for more billable hours.
— Randy Crabtree, partner, co-founder, Tri-Merit Specialty Tax Professionals
The rate and complexity of change is stretching leaders beyond their traditional professional experience.
— Gale Crosley, president and founder, Crosley+Company
Two issues come immediately to mind.
First, the audit profession is under-appreciated, or perhaps misunderstood. What auditors do very effectively and consistently is provide important checks-and-balance on the completeness and accuracy of their clients' financial reports, and call into question for redress any irregularities they may observe. This is done in the public's interest so that decision makers have confidence in reported information. Auditors who are professional accountants are bound by an enforceable code of ethics, much like doctors' Hippocratic oath, to do their best to serve the public interest and are required to maintain their education to remain relevant. But auditors are not guarantors. They cannot "promise" the future of a company or a situation, just as a doctor can't "promise" that a diagnosis or treatment is fool-proof. Any yet, we don't want a world without doctors. Nor should we want capital market without auditors.
Second, I regularly hear about the war for talent in our profession. That's either higher demand or lower supply, but I think it's a bit of both. With the rise of sustainability reporting, the skills and competencies of professional accountants are in high demand. But we also have supply issue – anecdotal evidence suggests in some jurisdictions fewer individuals are entering or, as importantly, staying in the profession and in other jurisdictions, demand for what an accountant can do is simply outstripping the supply. We are already working across the profession to help the younger generation understand the possibilities and innovation in our profession, but we know more needs to be done.
— Kevin Dancey, CEO, International Federation of Accountants
The future of hybrid/virtual interactions and the Great Resignation.
— Katie Davis, partner, collegiate athletics practice leader, James Moore & Co.
Talent is the most important issue facing the accounting profession – not only the ability to attract top talent but also how we nurture new skills necessary to keep pace with today's complex businesses and areas of reporting that are rapidly evolving. Specifically, technology and sustainability are transforming how the accounting profession provides confidence to the capital markets and related skillsets are becoming more important, are in high demand, and are areas of interest to many individuals entering the accounting profession today.
Technology is embraced by every business, and in response, the accounting profession needs to adopt a digital and data-driven approach that keeps pace with these transformations. Moreover, the focus on sustainability reporting represents the most significant innovation to corporate reporting in decades. Building a talent pipeline with relevant skills in areas ranging from data analytics to accounting for greenhouse gases (GHG) will be critical in helping the profession stay relevant, agile, and responsive. This requires collective action – including the need for accounting curriculum and standards to keep pace and for organizations to provide more training. EY is doing its part through our Badges program, which enables EY employees to become experts in evolving areas such as artificial intelligence and our new Sustainability Masters. The program is academically accredited and is free to all EY people.
— Carmine Di Sibio, global chairman and CEO, Ernst & Young
Staffing – the workforce is changing and firms aren't keeping up or adapting fast enough to attract and retain top talent.
— Deneen Dias, VP growth & strategic relationships, Botkeeper
It's still the professions business model. This is being challenged dramatically by the PE investments, consulting firms breaking of from traditional CPA firm services and the massive consolidation. On top of how firms operate, they will need to decide or pick a track.
— Sarah Dobek, president and founder, Inovautus Consulting
The global pandemic has highlighted challenges that already existed – our deep, human longing for more meaning and connection in our lives. The physical disconnection has highlighted a disconnection that we've felt for many years before the pandemic – a disconnection from not only one another but from our true selves.
The traditional accounting model (and most business models in general) is based on outdated notions of "human productivity," where our value is measured by the hours we put in, our output and increases to the bottom line. We are not machines, and profit is not purpose. We must find and reconnect with that which makes us human – purpose, meaning, creativity, and connection. We must take better care of ourselves, so we don't sacrifice our own well-being for the sake of another dollar. We must release the pressure, take more risks with each another and let go of trying to get it all right or perfect. We must seek to understand one another as human beings, rather than workhorses or profit centers. Only then can we create a true sense of belonging and purpose in this profession. If we can't, people will leave to find it elsewhere.
— Sarah Elliott, co-founder & principal, Intend2Lead LLC
Talent Leadership is a critical concern. Our business growth, anticipation of evolving customer demands, how we develop competitive advantage, and what we offer as innovative services are tied to People. Technology adoption is non negotiable but it still comes back to People in order to Reimagine the Path Forward. Often times, we hear Digital Transformation but it's really Business Transformation. Business Transformation includes People—all people. How we attract, onboard, advance, and retain the best and brightest is well aligned with inclusion objectives. The Why of Diversity, Equity, and Inclusion and the need to enable an inclusive culture is because there is an inconsistent experience as well as inconsistent application of the organization's core values. Inclusion is a strategic business imperative because it's a Talent Management challenge.
— Kimberly Ellison-Taylor, founder and CEO, KET Solutions LLC
I believe the most important challenges facing the tax and accounting profession continues to be building a pipeline of diverse talent for the future and elevating the value the profession brings to clients and businesses. This requires taking a fresh look at the work tax and accounting professionals do and really digging in to define the value, which is greatly underrepresented and undervalued. Tax, for example, is exciting, filled with change and increased complexity. There are growing number of challenges and opportunities to do interesting work across jurisdictions both in the US and around the globe.
As businesses have become more dynamic and global, their tax and accounting needs have become more complex. In addition, changes in laws, regulations, and reporting requirements have accelerated this growing complexity. To provide real value to clients, the accounting profession needs to leverage new technologies and bring new skills to the table, such as coding and database querying. The profession needs to be thinking about where they can automate repetitive tasks and eliminate low-value ones, while up skilling their talent, so more time is spent on informing clients and business stakeholders of key considerations and implications of their decisions. I believe this evolution in focus will empower tax and accounting professionals to deliver greater value and will ultimately make accounting a more attractive career option for students. This is the key as we are facing a record shortfall in the pipeline of students majoring in accounting in colleges and universities.
We need to get creative on a grand scale in driving awareness of the accounting profession in high schools and make sure accounting is offered in the curriculum like it was at my high school. But it doesn't stop with recruiting; we also need to do a better job of retaining diverse talent by investing in their professional development and leveraging their new ideas and approaches, so they can lead us into this new frontier for the profession.
— Lisa Fitzpatrick, president, Bloomberg Tax & Accounting
Today's clients are facing a number of new and evolving challenges that require greater industry specialization and subject matter expertise. Our recent study on CPA firm buyer behavior reveals that visibility is in decline just as competition continues to heat up. Increasingly, buyers are looking for firms that have the specialized expertise and experience to address their evolving business challenges. The question is, are accounting firms prepared to meet their clients' new challenges? Failing to understand clients' changing needs and delivering the same traditional products and services is not likely to produce financial success.
The second biggest problem is the labor shortage. Older CPAs are retiring, and many mid-career CPAs are either leaving the profession or forming their own business. If closing that gap was difficult to close in the past, it can seem almost impossible today.
To address these issues, firms need to build strong corporate and employer brands. In fact, they need to consider both brands one and inseparable.
— Lee Frederiksen, managing partner, Hinge
There is not just one issue; importantly, there are a few key issues facing the profession. One is the increasingly important role of technology in accounting and finance. On the flip side – cybersecurity is becoming more and more of an issue the profession faces as well as their clients. The accounting profession continues to face a talent shortage and entice young students to join the accounting profession as new job positions continue to expand regarding the ongoing economic trend in which employees have voluntarily resigned from their jobs in a group, beginning in early 2021 and a wave of retirement. Accountants coming out of university today need to be minted with technology skills needed in the market today and tomorrow, such as knowledge of RPA, blockchain, data privacy, algorithms, tech bias, artificial intelligence and machine learning, to name a few. Those already working in the profession need to upskill and learn these new technologies so they can stay ahead of the changes coming – lead the way for their clients and the business communities. The next is the potential risk of deregulation of the profession. There have been efforts to allow non-certified professionals to compete in the same space as those who are certified in those domains – this is something I am working with the entire accountancy profession to prevent. Other key issues are lack of diversity and inclusion in the profession, the influx of proposed legislation and regulations such as the tax on professional services, and the shifting demographics impacting new pathways into the profession.
— Denise LeDuc Froemming, president and CEO, California Society of CPAs
The single greatest challenge facing the accounting profession is the declining enrollment of accounting majors in our universities and candidates for the CPA exam. This has created a human capital crisis. Firms are struggling across the country to meet client demands and filing requirements. Many firms are "outsourcing" work to India and other countries outside the U.S. because there simply aren't enough accountants domestically. Therefore, I created the concept of the "work for credit" program so that we can increase the number of young people coming into the accounting profession. People have talked about the 150-credit hour requirement (as originally structured) as a barrier to entry for years. I thought "outside the box" to come up with an alternate path to achieve the credits required to become a CPA. I believe this alternative path will help to reverse the current trend of declining enrollment of accounting majors and CPA candidates.
— Daniel Geltrude, founder & managing member, Geltrude & Co.
The difficulty of learning all the significant tax code changes implemented by Congress with several lengthy changes to the tax code, regulation and system since 2017. In addition to this, competing against new, silicon AI automated accounting firms as well.
— Julio Gonzalez, CEO, Engineered Tax Services Inc., The Growth Partnership, ABLE CRM for Accountants, Rosenberg Survey, Inside Public Accounting
There is no denying that talent is one of the most critical issues facing the accounting profession. Recruiting top talent (with and/or without a CPA designation), retaining and developing talent (with the ability to work in a hybrid or virtual environment), creating workflow efficiencies (so that talent is working at their highest and best use using technology and alternate staffing solutions) and developing innovative leaders to make these things happen is imperative.
When we get this right, we will be in an even better position to specialize and offer clients the best advice and service possible. It all works together to create a profession where we are known as the most trusted business advisors.
— Angie Grissom, owner, chief relationship officer, The Rainmaker Companies
The CPA pipeline is the most important issue, as it permeates so many of the other challenges we face, such as relevancy; CPA Evolution; diversity, equity and inclusion (DEI); and environmental, social and governance (ESG). We literally do not have enough college students entering the profession to meet the demands of the future, even with so many accountants delaying retirement. Additionally, we face a real challenge in birth rates being sufficient to meet our needs, even when we do address other hiring and inclusion challenges the profession is facing. To ensure a strong profession in the future, we'll need to continue focusing on our pipeline building now, while striving for enhanced relevancy, CPA exam, DEI and ESG goals. Basically, we have to keep building the plane, while we fly it, and hope that we have passengers on board.
— Calvin Harris Jr., CEO, New York State Society of CPAs
Recruiting talent and developing a workplace that helps us recruit the talent we need. How can we continue to provide the services our clients expect in the new environment of remote work? We must also recognize we must provide a better work life balance if we expect to recruit the talent we need. We can no longer ask our people to come to an office and work long hours just because that's how we always have done things. The firms that solve this problem will thrive and those that don't adjust will see their hiring problems continue and may also find it more difficult to have a smooth and financially rewarding succession.
— Roger Harris, president, Padgett Business Services
Staffing and structure. As the profession continues to lean into technology and outsourcing as part of their pivot to the staffing challenges, the staffing challenge still remains. For those who have been aggressive with these other pivots, the staffing issue starts to take on the form of how the team is structured, and what roles are being played. We are also seeing the structure element of the staffing challenge play out with the influx of VC funds, and firms separating out their assurance business to continue and grow in the advisory opportunity. It all comes back to having the resources – but in the right place and doing the right things – for the sustained health and growth of the firm.
— Will Hill, owner, Will Hill Consults LLC
Modernizing the accounting profession is the biggest challenge and opportunity in my mind. The world is rapidly evolving with greater reliance on digital, social and media engagement. And talent, particularly the next generation of auditors, has expressed the desire to work in careers that embed emerging skill sets, like ESG, technology, data & analytics and more. The accounting profession is highly focused on looking back and assuring historical data. Modernizing the audit is about continuing to engage with past information, but also looking ahead and aligning our work with where we're going as a society – with the highest levels of quality and professionalism.
— Maura Hodge, ESG audit leader, KPMG LLP
Talent shortage and requisite skills, both are inter-related.
— Tom Hood, EVP business engagement & growth, AICPA
Growing smarter, not harder.The most important issue currently facing the accounting profession is a need for firms to evolve their business models to be more focused on the right clients—offering packaged services while being priced according to the value they create.If firms evolve their business model in this way, they will be able to "grow smarter,not harder" This will allow them to retain their top talent and provide the partners and employees the lifestyle they desire.In addition, evolving a firm's business model requires developing a shared vision and strategy, updating partner compensation structures, changing the perception of value of their services, hiring and developing new roles and pursuing excellence in the five areas critical to their success: leadership, talent,growth, process and technology.
— Jon Hubbard, shareholder and consultant, Boomer Consulting Inc.
Mindset. We recognize that change is happening at an exponential rate, but organizations are still focusing on the safe center – their core – and not truly investing in the edge. Defining and exploring the edge leads to new business opportunities – this is where the innovation occurs. Our mindsets, especially those in a finance role, unfortunately, are trained to not invest until true ROI is defined, and that is limiting potential.
— Kacee Johnson, VP, strategy & innovation, CPA.com
As noted last year, this second year of the great retirement and the great resignation, new personnel strategies like those from Steve Cadigan in Workquake will need to be implemented in professional firms. In addition, work from home must be accommodated by firms for various reasons, including work/life balance, control of their schedule, and motivation. The days of five days a week in the office is not attractive to most accounting professionals, so flex schedules of 2-3 days in the office and accommodating work from anywhere will be a competitive benefit for firms that implement these policies.
Other critical issues to consider: 1) Quote to cash cycles, 2) Team and Firm experience, including single portals, and 3) selecting & implementing high-value services which go beyond Client Accounting Services (CAS) and the style many firms are attempting with Advisory. While it is early, tech stacks will need to be changed to leverage business Metaverse capabilities over the next few years. Most firms look at the first three and have not considered Metaverse impacts.
— Randy Johnston, CEO and founder, EVP, NMGI and K2 Enterprises
Attracting talented individuals who can operate in a highly technical, rapidly evolving environment.
— Richard Jones, chair, Financial Accounting Standards Board
Trust. We're living in a new workforce where many people start with a skeptical outlook. I've observed distrust across society, whether it be in the media or our political system. However, businesses are increasingly seen as sources of stability amid societal and political upheaval. Businesses strive to earn and maintain the trust of their stakeholders, but in today's world trust has to always be front and center.
The accounting profession can play a critical role in confirming trust is a priority for businesses because the profession is the backbone for many organizations. Trust in accounting, whether it be audit quality or tax reporting, is a minimum requirement. The information accounting professionals help produce is relied upon by many people in order to make critical decisions. The accounting profession can and should play a critical role in making trust a key facet across every business and every industry. Companies that fail to put in place the processes that build trust likely will not win the buy-in from stakeholders that is necessary to deliver outcomes.
— Kathryn Kaminsky, vice chair, trust solutions co-leader, PricewaterhouseCoopers
The IRS is facing unprecedented service challenges that have overlapped 3 tax filing seasons. All taxpayers, regardless of their economic standing, and their advisers, deserve a tax administration system that supports them in meeting taxpayers' tax obligations. With this in mind, the AICPA has proposed both short-term recommendations to immediately mitigate IRS service deficiencies experienced by taxpayers, and long-term recommendations to help establish a modernized and respected federal agency.
So many CPAs' practices are heavily dominated by tax services and impacted by the IRS challenges. We are committed to helping advocate for a Modern-Functioning IRS for the 21st Century.
— Edward Karl, VP, tax policy & advocacy, AICPA
Of course, adapting to a different model for acquiring and using talent to serve clients. I also feel like the real issue is the partnership model. It has become definitely outdated.
— Rita Keller, president/CEO, Keller Advisors LLC
Similar to last year, I believe that staffing continues to be the most important issue with significant firm time being spent trying to figure out how to find and retain personnel.
— Roman Kepczyk, director of firm technology strategy, Right Networks
Its antiquated business model of selling time. It is the root cause of almost every other issue including but not limited to the dearth of folks with accounting degree who do not pursue careers in public accounting.
— Ed Kless, meta consultant, Sage
Continuing to instill trust with stakeholders by demonstrating extraordinary integrity, professionalism and quality. These tenets are foundational to succeed in our business. Today, how we increase the use of technology, build quality into all that we do, and reimagine how we work and develop talent are essential as we think about the future of the profession in the context of rapid digitization and the rise of ESG. It's also impossible to separate those focuses from the imperative of advancing diversity, equity and inclusion within our firm and the profession.
— Paul Knopp, chair and CEO, KPMG LLP
War on talent – simply stated, firms should never be in a position where they can't grow because talent is the limiting factor.
— Allan Koltin, CEO, Koltin Consulting Group
Attracting and retaining talent.
— Nicole Ksiazek, director, strategy and sales, Sage Intacct Accountants Program
We're hearing from our accountant partners that one of the biggest challenges they face is attracting and retaining top talent. If accounting firms are struggling to attract new talent, this puts even more pressure and stress onto existing employees who might be taking on extra work to keep up with the client demand. Accounting firms and leaders are looking at how they can prioritize their existing talent when available, offering upskilling opportunities, along with wellness initiatives and benefits to prevent burnout. Digital transformation is playing an important role in helping accountants manage this, by equipping them to find efficiencies, automating manual work, giving them access to more data, and allowing them to best serve their clients.
— René Lacerte, CEO and founder, Bill
I feel that the most important issue facing the accounting profession is a larger discussion around maintaining a healthy lifestyle.
Working in accounting can be exceptionally stressful and many work far too many hours in their job.
I think it's a general expectation that if you're a leader in public practice that you're supposed to work long hours and just cope with the stress that comes with it.
My goal is to try and help those that follow my content and are part of my community to take a step back, assess what's really important, and then map your career around that.
I think we should have more emphasis around how we can help the profession as a whole achieve this.
— Ryan Lazanis, CPA, Future Firm
I believe we are at a pivotal point within our profession. The velocity of change continues to increase and we must adapt to keep up with it and continue to deliver value to our stakeholders. Specifically, topics such as ESG and Cyber are at the forefront and we need to continue to define out positions as it relates to risk management, reporting, and organizational governance.
— Michael Levy, senior vice chairman of the North American board of directors, Institute of Internal Auditors
You have to say capacity right now, but capacity is because we have CPAs retiring and selling their firms at a record pace. Think of a swimming pool. The slow drip into the pool is the new CPAs. In the middle there are cracks where CPAs want to go be a CFO. At the back is a big hole with retiring CPAs pouring out of the supply. Layer over this the Great Resignation and capacity rise to the top. To me the underlying hidden bomb is lack of succession. People are reluctant to buy in to own because of the cost to buy-in, risk, lifestyle, and accountants are being highly paid, so why put in the extra effort to own. If only some accountants knew what partners are making.
— Bob Lewis, President, The Visionary Group
Without a doubt, the single most important issue facing our profession is talent. I hear it from all of our member firms. Related to that, the profession has a diversity issue – our profession does not look like society at large.
In January of 2022, the CAQ launched Bold Ambition and Accounting+. Bold Ambition is a platform designed to showcase what this profession is doing to increase diversity both from a pipeline and retention perspective – close to $500 million in resources and growing. Accounting+ is an initiative of our Bold Ambition – a national brand awareness campaign and platform targeted to Black and Hispanic/Latino students designed to become a "one stop shop" for resources they need to learn about the profession (e.g., messaging and branding), consider an accounting career (e.g., mentorships, internships and other support) and make the decision to pursue a career in accounting. This is a multi-year initiative but it needs to be done. With these two initiatives, the CAQ is doing our part, collectively with the profession, to address these issues.
— Julie Bell Lindsay, CEO, The Center for Audit Quality
Talent. Talent. Talent. And it's not just about finding and keeping good people, or figuring out how to manage, train and engage team members in our hybrid environment, or even proactive ideas like outsourcing, offshoring, fractional employees and new admin roles in firms that pull out a third or more of the work that CPAs are doing that don't require a CPA designation. It's all those things and changing the public accounting business model and how we measure success (results vs. time-based measures), new comp and buy-sell models, new organization structures and roles, and managing and scheduling across the firm to have truly consistent processes and leverage. It also includes (re)defining ideal clients and right-sizing those that are no longer a fit to create capacity for team members and go deeper on the great clients who need more help from your team. All these strategies directly impact the talent changes we need to make in our organizations today.
— Tamera Loerzel, partner, ConvergenceCoaching LLC
The talent shortage combined with the significant demand for services is creating a major strain on knowledge workers. The struggle to redefine the business model to make the profession more attractive to talent is the #1 issue.
— Eric Majchrzak, CEO, BeachFleischman
The pandemic has dramatically impacted state economies in concert with the expanded ability of states to apply their sales tax requirements on remote sellers. As reported by the U.S. Governmental Accountability Office (GAO), sales tax revenue derived from remote commerce has risen from $3.2B in 2019 to $23.1B in 2021. In March 2020, as the country was in the grips of the early days of the pandemic, governments feared enormous budgetary shortfalls. However, that fear was entirely misplaced. In both 2021 and 2022, most states met or exceeded their budget projections. In short, the ability of states to effectively tax remote sellers saved the day.
Whether this trend will continue as we move out of the pandemic and possibly into a recession is an important open question. Even so, it's clear that states recognize the increased value of sales tax to their budgets and that recognition is manifesting into a clear policy shift. States are already looking to expand their tax base by applying tax in new localities (i.e., counties, cities and districts), as well as including more services and digital products within the scope of their tax requirements. At the same time, governments are reacting to social policy concerns and attempting to alleviate the regressivity of sales tax by reducing or eliminating the tax applied to food, fuel and other essentials such as diapers and feminine hygiene products.
This shift can be highly disruptive for taxpayers who are not watching closely. And with departments of revenue interested in adopting automation technology to manage audits, lack of attention becomes risky. As accounting and tax professionals, we need to pay attention, so our internal and external clients can continue to focus on their core business. We need to see these new requirements coming, influence them if we can, analyze them closely and chart a path towards simple compliance.
— Charles Maniace, VP, regulatory analysis and design, Sovos
While many in the profession feel that staffing is the most important issue facing the accounting profession, I still feel that Cybersecurity remains paramount. In speaking with many small practitioners, they feel that the "bad guys" don't care about them since they are small. The opposite is more likely the truth as the criminals simply want to obtain as much data with as little effort as possible. Larger firms have the ability to have IT professionals on staff and budgets that allow higher levels of data security. With changes in technology, the Cloud is more viable option for small firms as they can get the cybersecurity benefits that they couldn't afford on their own.
— Stephen Mankowski, co-chair, National Tax Policy Committee, NCCPAP
Is and always has been: finding and retaining the best people. This is a challenge that has been top of mind since I began in the profession in 1985 and remains the industry's top issue.
— Gene Marks, president, The Marks Group PC
The most important issue facing the accounting profession is the continue increase in regulatory complexity and the macroeconomic realities such as labor shortages, talent attraction and global inflation that has implications for firms, from managing the growing regulatory impact to more effectively managing risk. New Federal and State tax regimes further complicate tax compliance and return preparation, and significant changes in auditing standards will add complexity and new processes. The adoption of cloud-based tax, audit and firm management solutions helps firms mitigate the uncertain environment by providing high availability, lower cost for backup and disaster recovery, business continuity, remote workforce management, and business agility. As subject matter experts, we can help firms navigate the uncertainty and transition their technology footprint to take advantage of the efficiencies in the cloud.
— Jason Marx, president & CEO, Wolters Kluwer Tax and Accounting, North America
Diversity is the most important issue facing the profession. Focusing on diversity will clearly help our pipeline, and more specifically the CPA designation. Only 14% of our profession is represented by minorities, if we can move this needle, we can help our pipeline.
— Anoop Natwar Mehta, chief strategist, chair, AICPA; chair, Association of International Certified Professional Accountants
The most important issue is staff training, retention and work conditions. Diversity and inclusion has risen greatly in this category, but in my opinion recruitment and retention of underrepresented groups will be boosted by a change in the overall working conditions. It is understandable that tax or busy season hours will be high, but many firms have extended those seasons and also have set higher weekly requirements for the non-busy periods. The burden of this on a sensible work/life balance is borne by the numbers that leave the profession, and the disproportionately high amount of women accountants that leave. The issue of lower numbers of women partners is not a gender-discrimination issue, it is a work/life balance issue [for men and women] that the profession as a whole seems to be blind to, using excuses and rationale from more than a half century ago. The people going into accounting haven't changed – the work/life balance circumstances have gotten worse and continues on that track. Much more women than men simply refuse to subject themselves to these conditions. Stronger and more directed efforts need to be focused on recruiting members of minority groups who have not been culturally exposed to public accountants or even entrepreneurs. Because of a lack of role models that belong to diverse groups and particularly African-Americans that join our profession upon graduating, leave looking for places where they will have more prevalent mentors, coaches and role models. I do not believe this is a fault of the profession or conscious bias, but a cultural issue with fewer Blacks majoring in accounting. This is starting to be recognized but I believe some of these programs need to be accelerated and are not addressing these issues in High School and earlier to make these underrepresented groups more aware of the benefits of careers in public accounting.
— Edward Mendlowitz, emeritus partner, WithumSmith+Brown, PC
Talent is at the top of the list, with change management being a close second. The need to upskill not only exists at the individual level, where technical, critical thinking and leadership skills are paramount. Firms also need to consider how to upskill their organizations to be equipped with the agile and transformation-ready mindset needed to adapt and thrive in today's environment. Too often organizations greatly underestimate the degree of change required to execute firm strategies effectively. Managing and leading this change, particularly within firms, is a difficult challenge with some of the common obstacles they face related to mindsets and policies in partnership structured organizations.
— Kalil Merhib, VP, growth & professional services, CPA.com
As the accounting industry continues to evolve to meet new client needs, accountancy firms must remain one step ahead if they hope to deliver tangible customer value. Clients do not want accountants who can simply file their taxes and ensure compliance. Clients need a trusted business partner who can analyze and decipher their data to help them drive business decisions. As accountants strive to deliver these types of value-added services, they face increased pressure to integrate new technologies into their systems and offerings.
Accountants are at the frontline of maintaining the integrity of financial reporting for businesses while also serving as a trusted advisor to help businesses succeed and thrive. But they still need to ensure profitability per customer while maintaining client satisfaction. At the same time, clients are increasingly demanding higher levels of service. They want more than simple analytics; they seek proactive data-driven insights that will help them generate growth. Clients understand insights from their accountant are critical to business success.
Clients understand their accountants have a unique perspective based on their work with a wide range of businesses across different vertical markets. As a result, clients expect their accountants to use their diverse expertise and identify which strategies may work for their business and which may not. These decisions are typically time sensitive, so businesses turn to their accountants for a holistic perspective to help them drive efficiencies and growth. Clients today often do not have time to read lengthy reports to uncover one or two pieces of insight. Instead, they want their accountants to analyze the data, clearly present key findings and directly explain what it means for their business.
This can leave accountants stuck between a rock and a hard place if they use legacy methods and technology. They must either perform a high volume of manual work to meet the increasing demand – or risk leaving their clients unsatisfied.
Fortunately, it doesn't need to be this way. By harnessing new automated solutions, accountants can drive significant efficiencies within their firm to ensure they focus on increasing value-add advisory services that their clients need.
SMEs need accountants more than ever before. Accountants are increasingly the hub looking after their SMB clients' data and interfacing with governments on their behalf – the modern accountant has a more important role than ever before.
— Elona Mortimer-Zhika, CEOIRIS Software Group
I think that assurance services for sustainability reporting are a major issue for the accounting profession at this time. Just as CPAs have jurisdiction over certified audits, I think that sustainability assurance services should fall solely within the domain of services provided by CPAs. I feel an urgency that, as a profession, we need to claim these services.
— Tracey Niemotko, associate professor of accounting, Marist College
The very meaning and definition of "value" is undergoing a rapid change. Value is predominantly intangible, and accounting is still addressing what can be measured and reported through the Financial Statements. We do not have frameworks and systematics that can address this rapidly changing area that is at the heart of every organization – value creation! As an example, we should not rest and think we produce forecasts – the production of forecasts to not create value. It is what we do with the forecast, understanding the implications of the forecast and executing a plan that will improve outcomes is what creates value. ESG and Sustainability is driving a concept of an enterprise value that is sustainable. The accounting profession and the professionals need to find methodologies and systems that enable engagement, measurement and participation in the key processes that are value creating.
— Ash Noah, VP and MD management accounting & ESG, AICPA & CIMA
Employee development and retention. With fewer people entering the accounting profession every year, we need to transform the work itself. Some are concerned that automation will eliminate our profession–I believe these fears are unfounded.
To attract and retain good people, we need to elevate what we do on a daily basis, while improving work-life balance throughout the year. Technology is an important component and it really needs to step up its game to support the profession in this transition.
— Ane Ohm, co-founder and CEO, LeaseCrunch
The most important issue currently facing the accounting profession is the declining relevance of accounting standards.
The accounting standards we have today are rooted in the industrial era. They do an excellent job capitalizing and recognizing income and expenses from physical assets such as transportation networks and factories. But they do poorly accounting for intangible assets, which now make up 90% of the S&P 500 market value.
As our economy has shifted from one based on manufacturing to one where apps, services, and subscriptions primarily drive value creation, accounting standards have failed to keep up. GAAP does not recognize most intangible assets as capital assets. In other words, they are missing from the balance sheet.
This means that financial statements lose their ability to provide timely and accurate information about an organization's financial condition. And when financial statements don't provide useful information, the value of the financial statement audit declines correspondingly.
If the profession wants to stay relevant, we must reform accounting standards to recognize the value of intangible assets.
Because nobody knows exactly how to do this, we should return to a principles-based approach to setting accounting standards. This would involve moving away from detailed rules and instead relying on broad principles that would allow for more judgment and discretion.
The advantage of this approach is that it would make accounting standards more flexible and responsive to the needs of individual organizations and their investors.
— Blake Oliver, founder & CEO, Earmark
Maintaining relevancy when 90% of the market value of a typical S&P500 company is no longer represented by the tangible assets on its balance sheet.
Supporting organizations adapting to a low carbon operating environment and doing so with urgency.
Restoring trust in business, which has been badly damaged by a succession of corporate scandals over the past twenty years.
Restoring trust in the audit profession, especially when there are regular articles in the mainstream business press such as the FT on yet another audit failure or scandal.
Serving the public interest above the interest of the shareholders of the companies they audit and the partners in the audit firms who employ them.
Sustainability. There have been five major developments in the history of accountancy: double-entry book-keeping (C16), overheads accounting (C18), standardization of financial statements (C19), international accounting standards (C20) and the balanced scorecard (C20). We now stand on the cusp of the sixth major development: sustainability accounting (C21).
— Jeremy Osborn, global head of ESG, AICPA & CIMA
Firms need to do more with their current resources, and always have an eye on innovation and adapting their technology to the next level. Over the last year in particular, Caseware has created tools that go beyond our users' functional needs so that they are equipped to do their best work while saving time and money. An example of how this change is already evident in the industry is the demand for insights-driven engagements. The auditors thriving and driving the industry forward are those who are able to delve deeper into data and discover not only what happened, but why it happened. This type of analytical work, focused on finding insights that drive business intelligence to enable more informed decision-making, is on the rise. And we are building the tools to enable auditors to do this efficiently.
We're building new tools to make the lives of clients easier, and a more simplified workflow that saves time and ultimately boosts their bottom line. I'm really proud of our product roadmap because it represents what we're all striving toward: building meaningful relationships with clients, while making their lives easier.
— David Osborne, CEO, Caseware
Burn out, mental health and the ability to hire & retain good people are all intertwined. Too many experienced professionals are leaving public accounting for greener pastures. It's one impact of COVID the profession will feel for a long time. It was already hard to find good people; the pandemic made it worse. Yet, firms still haven't figured out that they need to change, that firm owners need to look at themselves and do something differently. For years I've been preaching that the world has changed. Finally, I believe the profession agrees. However, many have not made the first steps to start to evolve. These firms will continue to burn out their employees and struggle to find the staff they need to get out of the hole they dug for themselves.
— Jody Padar, VP of tax strategy & evangelism, April
The Pandemic (re)established accountants as the most trusted advisors. They emerged as professionals that helped clients successfully navigate sudden and different uncertainties. They positively impacted people's lives in the most testing times in recent memory. However, the post-pandemic World has left/created many unknowns and uncertainties. It is now differently challenging for people and businesses to anticipate and plan to navigate the future. The fears of a looming depression/recession are adding to the unpredictability of the future. Moreover, Government is taking new legislative detours to counter these new realities. That makes it further difficult for even professionals like accountants to grasp and create choices to help and guide their clients.
On the other hand, the popularity of "advisory" services is ever-growing. Hence, the desire among firms to provide them is growing too. It is the right path forward for the profession. But the uncertain future is putting extreme demands on accountants' resources to work out future-looking guidance and advice for their clients.
In addition, the profession is on the cusp of intelligent technologies fully crossing the work domain that professional accountants have controlled for years, i.e., turning data into information, making it compliant, and generating (some) business intelligence. The race to extreme "efficiency and productivity" to drive accounting firms is not enough now. Clients know what technology can do now. Therefore, they expect more expertise and advice from accountants.
However, the ever-increasing accounting talent shortage is making experienced/expert people at firms get busier with day-to-day stuff. It is making them work more, further skewing the work-life balance. It is leaving them less time to make sense of the New World. In such a scenario, there is little quality time for experts to identify ways to face an increasingly uncertain future effectively. That, in turn, is diluting the advisory capabilities of the firms.
Given the factors mentioned above, the most important issue currently facing the accounting profession is finding ways to (quickly) understand and navigate the increased complexity of the regulatory and business environment; and then figure out new, relevant, and practical insights to guide/advise clients to a better future, while ensuring reasonable growth for their own firms.
— Hitendra Patil, head of customer success, AccountantsWorld by IRIS
Staff recruitment and retention.
— Carl Peterson, vice president, small firm interests, Association of International Certified Professional Accountants
Between the pandemic, state and federal tax law changes, and the Wayfair court decision, the accounting industry has been very busy. That has meant that the most important issue for many in the profession is matching the increasing demand for their services with the ability to hire qualified staff. It is especially challenging for the accounting industry given the necessary education and experience requirements.
— Scott Peterson, VP of U.S. tax policy and government relations, Avalara
The shortage of entrepreneurs to own small accounting firms and replace the retiring generation of owners.
— Jeff Phillips, CEO, Padgett Business Services
We need to upskill the profession and our future members in a way that goes beyond where the current college curriculum takes them… that means developing human intelligence skills like team building, leadership, emotional intelligence, and more.
— Anthony Pugliese, president & CEO, Institute of Internal Auditors
Substantial changes in the way CPA firms operate and the services they provide are happening and more are on the horizon. The traditional ways of operating will not be adequate in a few short years. Artificial Intelligence, blockchain, and other technologies, as well as private equity and other non-traditional ownership models, are going to create challenges many firms are ill-equipped to handle. We are in an unprecedented period of rapid change as a profession.
— Terry Putney, managing director, Whitman Transition Advisors LLC
Lack of a sufficient talent pipeline. This situation is forcing (long overdue) wage increases and requiring firms to address a workforce that is demanding more reasonable hours, flexibility and investment in their career growth.
Firms to think outside the box on who they are hiring (non-CPA/non-accountants), leverage technology to get more efficient, improve working conditions, raise prices and get more principled with client acceptance and workflow practices.
— Kristen Rampe, managing partner, Rosenberg Associates
I think the changing nature of the accounting profession and being able to attract and retain talent is one of the top issues the profession is facing. We saw that many firms had to adapt to digital practices overnight during the COVID-19 pandemic and many are still trying to navigate the new normal. What previously worked when attracting and retaining employees pre-pandemic might not be as relevant today. But for many firms that were already remote and working in the cloud, we saw validation during the pandemic that their model works. Employees are looking for flexibility and a sustainable career path that will provide them with career advancement opportunities and purpose to work at a values-aligned organization.
— Ben Richmond, U.S. country manager, Xero
In public accounting: capacity constraints leading firms to (finally!) take bold action and reduce client volume. I hope firms approach it strategically versus just sacking clients because of two main metrics that reflect a firm's behavior: current revenue level or realization (i.e., poor pricing, scoping, or scope management). Evaluating customer-driven factors like growth potential and industry or other fit relative to the firm's future direction is the more strategic way to go about it.
In industry: adapting to and responding to the growing flood of complex requirements imposed, such as lease accounting, or opportunities such as credits available Inflation Reduction Act. They, too, are trying to do all this under the worst talent shortage in recent memory.
For all: the unacceptable delays and cumulative years of backlog with IRS and state tax agencies, and the inability to even communicate within months, is a huge issue for just about everyone. It's literally driving people out of the profession.
— Michelle Golden River, owner/president, Fore LLC
There is a fundamental disconnect between the business model that has been implemented by firms and the lifestyle and culture that their current or prospective team members want. Today's successful modern firm fosters a sustainable work environment that ensures teams are performing as expected and attracts and retains great team members. But because firms have not evolved their business models, they are stuck in the "old way" of doing things which leads to unhappy clients and employees.
— Darren Root, chief strategist, Right Networks
Creating a company culture that no longer feeds into glorifying 18-hour workdays as a norm. We will never attract as many new hires as we need unless a change is made to the normal expected work format.
— Richard Roppa-Roberts, the ProAdvisor Advisor, Quasar Cowboy and Roundtable Labs
The complexity of both tax law and accounting rules is overwhelming. It is difficult to be a trusted advisor for clients and to enjoy helping people.
— Ric Rosario, president and CEO, CAMICO Mutual Insurance Company
This is one of those questions that is impossible to answer with one response. All the following are strong nominees.
- Labor shortage. Virtually all firms, especially those smaller than the Top 100, struggle mightily with an inadequate supply of staff. Most of these firms don't have enough people to get the work out, which is causing them to greatly curtail their business development activities and literally turn away opportunities. This is a decades-long problem for CPAs that seems to get worse every year.
- Now that CPA firm personnel are working remotely, firms are challenged in ways that they have never experienced. It's more difficult to do the following remotely than live: mentoring and training of staff, maintaining a collegial atmosphere and firm morale, do business development and nurture client and referral source relationships. Most firms are struggling with these issues, but they are plugging away.
- Affluence. Yes, I'm serious. The average partner at the typical, medium sized CPA firm earned $584,000 in 2021, a 10% increase from the prior year. Business is booming. Life is good (except for the dire labor shortage). This affluence, combined with the frustration of being understaffed, is causing firms to struggle with pressing issues that threaten the long-term future of their practices: Shift from compliance to consulting, technology advances and a shortage of future partners.
— Marc Rosenberg, managing partner and founder, Rosenberg Associates
Talent! The past three years have had a dramatic effect on people, and as a result, individuals are now reassessing what they want to do and how they want to work. This fundamental workforce shift extends beyond whether people are physically convening in an office or not. People are seeking opportunities that allow them to live their lives how they want to, including meeting the needs of their families, finding work that aligns with their beliefs and creating an environment in which they are building the skills needed for the future.
As part of our New Equation strategy, this year PwC launched My+, which is our biggest and boldest reimagination of our people experience. We are moving towards a future where growth and development are at the center, rewards and benefits customized, well-being is woven into our daily experiences, and we are supporting the flexibility and evolving needs of our people as their lives and needs shift over time. We are laying the foundation now, and it will culminate in a platform that brings together all of our processes, programs and technology into one integrated, brand-defining experience designed to attract, retain and develop top high performing talent in the industry. No transformation happens overnight, but we have already begun to lay the foundation for My+ with a series of building blocks to prepare us for what's to come.
— Tim Ryan, U.S. chair and senior partner, PricewaterhouseCoopers
Hiring and retaining talent remain significant pain points across the accounting industry due to bias, declining interest, and artificial intelligence (AI). Another critical issue facing the profession is the inability of organizations to create inclusive work environments for Black professionals. Black professionals continue to experience lower rates of mentorship, access to leadership, and access to social networks in the workplace, all of which play a critical role in career advancement.
— Guylaine Saint Juste, president & CEO, NABA Inc.
Ensuring that the information provided to financial statements users is relevant and useful in making investment and capital allocation decisions. From a standard- setting perspective, that means continuously focusing on understanding the evolving needs of financial statement users and other stakeholders.
— Hillary Salo, technical director, Financial Accounting Standards Board; chair, Emerging Issues Task Force
In one word – staffing.
The United States is made of approximately 330 million Americans of which about 70 million are classified as baby boomers that have been retiring in unprecedented numbers over the past few years adversely affecting staffing across all industry sectors.
However, it's really the perfect storm for the accounting profession as the bursting baby boomer bubble is resulting in the loss of so many industry thought leaders all at once coupled with not enough accounting candidates graduating from universities across the country representing Generation Z resulting in staffing shortages at the entry-level as well which will affect the NextGen era of senior associates and managers in the coming years to follow.
I take a grass roots approach by guest lecturing at both high schools and universities to encourage students to consider an exciting career in public accounting as a means to get students aware and interested in what a career in public accounting can afford them throughout their career.
— Peter Scalise, federal tax credits & incentives practice leader for the Americas, Prager Metis CPAs
The most important issue facing the accounting profession is the ongoing scramble for seasoned staff and the reduced pool of college graduates and young CPAs with accounting degrees.
These challenges are becoming more and more apparent as many firms are racing to build utilizing offshore resources, while the most technologically advanced firms are accelerating their digital transformation with greater adoption of intelligent automation solutions such as AI, ML, and RPA.
— Peter Scavuzzo, CEO, Marcum Technology; principal/chief information & digital officer, Marcum LLP
Capacity going forward. Driven by lack of and influenced by the pipeline of talent.
Firms need to develop and execute a strategy to meet the needs of their clients. The strategy must include outsourcing, talent attraction and retention, solid practice management and great process and technology.
— Gary Shamis, CEO, Winding River Consulting
The most important issue facing the accounting profession is relevance. We talk a lot about pipeline, in large part due to our Insight Special Feature, A CPA Pipeline Report, but as I have said many times, "Solve the relevance issue and you'll solve the pipeline." The declining pipeline of CPA candidates is a symptom of a profession losing relevance. Relevance impacts the profession in so many ways and at so many intersections. Technology and offshoring are further commoditizing traditional compliance services and disintermediating some of the "value" that CPAs can bring to the table. Declining relevance affects the profession's ability to recruit and retain the best and brightest, charge more for our services and grow overall profitability.
We believe and have been saying that for CPAs to remain relevant, we need to focus on proactively helping businesses (clients and companies) become more successful. CPAs are known as the "Most Trusted Business Advisor" and trust is a linchpin for the profession. However, in a more complex and fast changing business environment, trust is not enough. For CPAs to remain relevant, we need to become the "Most Trusted and Strategic Advisor."
Moving to the Most Trusted and Strategic Advisor will ensure the profession's relevance. It will make the profession:
- More attractive and valuable to clients and companies as we move toward becoming strategic partners, helping to make companies more successful.
- Attract the best and the brightest talent who will be energized by the notion and challenge of helping business become more successful.
- Combat the commoditization of technology and offshoring.
— Todd Shapiro, president & CEO, Illinois CPA Society
Getting broader adoption of more mindful and conscious people practices. This includes not just enabling hybrid work, but being able to clearly define and communicate a firm's culture and modernizing its leadership, collaboration, and staff development practices.
— Donny Shimamoto, founder and managing director, IntrapriseTechKnowlogies LLC
The most important issue is our profession's ability to grow along with changing client needs, while still delivering the proven quality that must always serve as the cornerstone of the accounting industry.
Grant Thornton's approach to growth maps back to our purpose statement: "To make business more personal and to build trust into every result." We are doing this by providing value and innovation with every client engagement, while also ensuring quality is at the foundation of all that we do. This means delivering a differentiated client experience in which our unique service-delivery model is backed by our high-quality and valuable work product. Our formula allows us to bring the right offerings to our clients at the right times, especially services that help them meet their industry-specific needs and grow despite uncertainty.
— Seth Siegel, CEO, Grant Thornton
Attracting and retaining top talent which begins with the CPA pipeline.
— Eva Simpson, vice president – tax practice & financial planning, Association of International Certified Professional Accountants
During the pandemic, accounting professionals were the economic first responders for their clients or their employers, while also worrying about their own health and safety concerns. The demands on the profession caused stress and burnout to increase, which in turn, impacted retention. Some great folks left the profession, which is increasing the capacity challenges firms and organizations are facing.
— Lisa Simpson, vice president – firm services, AICPA & CIMA
Having a stream of talent. Having adequate talent solves a lot of issues like managing growth, partner succession, and cross selling services.
— Joel Sinkin, managing director, Whitman Transition Advisors
Undoubtedly, the pipeline for future talent is among our greatest challenges. At the same time, our profession still has work to do to increase its diversity among underrepresented groups, including women in partner and leadership roles; in many ways, broadening our pipeline to underrepresented groups more intentionally can be a solution to our pipeline issue in addition to creating better, more inclusive work environments. This doesn't happen overnight. We must be intentional and focused to provide this inclusive and equitable environment for the next generation to make their mark and add their influence on our profession.
— Matt Snow, chairman of governing board, Forvis
Accountants not seeing a version of this profession that's suited for them. They're struggling with burnout, undue pressure is placed on them when their peers leave, and the burnout is perpetuated. The risk is they leave the profession, before stopping to find a version of what they do that's more sustainable.
— Jason Staats, creator, Realize LLC
The accelerating speed of change and the need for aggressive innovation.
— Marc Staut, shareholder, chief innovation & technology officer, Boomer Consulting Inc.
Staffing remains at the forefront of critical issues facing the profession today. Inadequate staffing adversely impacts service quality, succession planning and long-term firm growth. That being said, CPA firms have to do a better job of creating opportunities within the organization so that future and current employees have different work experiences then the historic linear approach towards advancement that is currently seen. Hiring managers need to look deeper into the skill sets being offered by potential employees that may not be applicable in the "traditional" sense of accounting. Skills will be needed that can help elevate a firm's service capabilities so that it can handle diverse client needs as the profession and business environment continues to evolve.
— Stan Sterna, vice president, Aon
The next generation of CPA practitioners is one of the top issues—particularly for smaller firms. Finding younger professionals with the desire, dedication, and ability to thrive as a small business is extremely challenging. While we have some of those talented individuals involved in our organization, we need many more in order to compete with larger firms—and frankly, give small business owners the time, attention and advise that they need in order to continue to be successful.
— Mark Stewart, immediate past president, National Conference of CPA Practitioners
Staffing is one of the most pressing issue facing our profession, but solving it has no easy answer. Firms are essentially strangled by their inability to create space for innovation to streamline their work, deliver compliance for clients, and avoid employee burnout. Pricing models in the firms (especially mid-large, multi-partner firms) create a continued requirement to lean on billable hours and timesheets to manage traditional firm structures preventing them from being able to deliver real value for clients.
What's worse is that our profession has an unattractive "brand" with those in middle school, high school, and tertiary education. Many young professionals are opting not to join our profession to make a career for themselves because so many firms are still stuck in the traditional models they have had for decades. They don't want to work the same way anymore or focus solely on routine work, and our profession lacks a fundamental understanding for how to deliver greater value without burning up our talent with long hours and arduous workloads. Our profession is in imminent danger of losing current and future talent in the coming years if we don't make transformational change happen in so many areas of our work.
— Jasen Stine, training and education leader for the tax and accounting profession, Intuit
In prior years, I might have suggested staffing, or technology, or innovation. But, today, the word is "resilience." If the last couple of years have proven anything, it is that the profession needs to do more than simply evolve. It must build in, from the ground up, a resilient adaptability to every phase of operations. The good news is: The last couple years proves it can be done.
— Rick Telberg, CEO, CPA Trendlines Research, a service of Bay Street Group LLC
The decline in accounting enrollments at colleges and universities is a major concern as is the drop in the number of candidates sitting for the CPA Exam. Though the credit requirement is higher than other fields of study at the collegiate level, the benefits of such a worthy profession should resonate with those looking to assist individuals and businesses in all stages of their lifecycles. However, CPAs need to do a better job of articulating the various opportunities that the CPA license affords. Students as well as other young professionals just starting out are unaware of how important a CPA license is and what one can do with it in public accounting, business, teaching or in governmental positions. The many lessons learned about enabling businesses to survive and thrive during the pandemic should be touted to students in both high school and college.
— Ralph Thomas, CEO and executive director, New Jersey Society of CPAs
The profession faces dual challenges, both falling under the theme of what I call the "race for relevance." The business environment is disruptive and fast moving, and we live in a "VUCA" world filled with volatility, uncertainty, complexity, and ambiguity. The challenge is in ensuring professionals are adequately equipped with the skills they need in the future – data science, analytics, and visualization (including statistics and applications coding), competency in ESG issues like climate reporting and diversity, equity, and inclusion (DE&I), and the ability to develop and successfully communicate long-term strategy. This requires new thinking on education and post-graduate training, which the profession has so far been moving toward only gradually. We need a greater sense of urgency in upskilling our profession to remain relevant and influential now, and well into the future.
But, the other challenge is that just when our profession is needed more than ever before, students and early career professionals aren't becoming accountants. Therefore, even as we work to upskill existing professionals in these new demands for a new age, we need to do a far better job of telling our story – the story of how accountants are changing the world on issues ranging from digital transformation to corporate sustainability and responsibility. This will be a pressing challenge in the years to come, and it's one our profession must step up to face through proactive communication and storytelling.
— Jeffrey Thomson, President & CEO, Institute of Management Accountants
People – Finding them, keeping them, and growing them – whether within the U.S. or across the globe.
— David Toth, chief growth strategist, Winding River Consulting
The advancement of diversity, equity, and inclusion (DEI), the attraction and retention of talent, including new sources of talent, and the technology-driven transformation of the profession continue to be among the most important challenges and opportunities facing the profession.
A lack of understanding and appreciation for the vibrancy of this career is one causation for the decline we are seeing in enrollments in accounting degree programs. In reality the full breadth of this great profession sits at the heart of the economy and directly impacts some of the most important social and environmental issues facing business and society at large such as, DEI, ESG and climate change, technology and digital transformation, and so much more. This is a call to action for us to continue to make significant investments and advancements for the bright future of our profession.
We are establishing new sources of talent by embedding DEI into recruitment strategies and seeking talent with diverse backgrounds and skillsets. We are expanding the talent pool through emerging talent models, increasing opportunities for non-degree professionals and creating more equitable opportunity. Deloitte is committed to embedding DEI into every facet of the talent experience. Through investments and commitments such as our $75 million MADE (Making Accounting Diverse & Equitable) commitment, we are helping generate more accounting career opportunities for the next generation of accountants. This commitment represents a bold vision for the profession, both in terms of increasing racial and ethnic diversity, and helping students from our diverse communities see and realize their future in business through the prism and possibilities of accounting.
In addition, our work with Management Leadership for Tomorrow's (MLT) Black Equity at Work and Hispanic Equity at Work Certifications we are meaningfully advancing equity and inclusion for our Black and Hispanic colleagues and across the business community. We're also working with OneTen, a coalition of organizations focused on hiring 1 million Black professionals within the next 10 years — specifically those who do not have four-year degrees. Deloitte is also committed to building upon our existing relationships with Historically Black Colleges and Universities (HBCUs), Hispanic-Serving Institutions (HSIs), high schools, state CPA societies, and various non-profits, to attract and support diverse talent in accounting.
It is upon us to help our next-generation profession leaders to understand and embrace the vision and excitement for a truly evolved and innovative profession based on human technical skills supported by advanced technologies. In addition to investing in the diversity of talent, there is a need to invest in a skills-first culture and to redefine cultural norms and the sense of a "traditional" career path. Technology is transforming the profession and has become a critical component in the constantly changing and complex business and regulatory environment. As the profession continues to evolve, technology will become increasingly important for automating more mundane tasks and applying advanced data analytics that enable professionals to apply uniquely human skills including critical thinking, creativity, professional judgment, and a deep understanding of the businesses and industries they serve. We are incredibly proud of the investments that we have made in leading technology platforms and in the development of our professionals. For example, Deloitte established an AI and Technology Academy to help our professionals truly take advantage of more sophisticated technologies, and the data that comes from those technologies. Accounting as a business function is becoming less homogenous and is demanding more diversified skills in order to provide greater insights and expertise to companies. The pace of change will continue to impact the entire financial reporting ecosystem and must be a central point of focus to keep the system strong.
— Joe Ucuzoglu, CEO, Deloitte
Human capital in every way from the numbers to the quality! Talent isn't flowing in and talent's flowing out. With both of these happening at the same time, it's created a perfect storm.
— Chris Vanover, founder & chief auditor, AuditClub
The explosion of digital assets and the related tax issues have taken center stage for tax and accounting professionals alike. The IRS has issued enforcement letters and opened audits to thousands of taxpayers. The agency served John Doe Summonses to exchanges to hand over tax information for prior years about their users, and there have been numerous headlines about IRS criminal prosecutions associated with digital assets. In return, the industry has received very little guidance about how to report digital asset transactions. A Revenue Ruling and some FAQs are the only guidance that CPAs, crypto investors and exchanges and custodians can rely on to guide their reporting efforts.
Over the last year, the Treasury has worked with Congress to enact information return reporting requirements to compel businesses supporting digital asset trading to report Forms 1099 to provide the IRS and taxpayers with the clarity needed for tax compliance purposes.
As the cryptocurrency environment continues to grow and evolve, exchanges and other businesses transacting in digital assets need clear direction on what information they are required to report to the IRS to comply with regulatory requirements. The industry also needs a clear definition of the role of "broker" as it is used in evolving legislation to mandate reporting standards.
There is an interconnectedness on this matter globally. Our clients and other major players in the crypto industry are seeking clear guidance on reporting standards and requirements.
At Sovos, we've worked hard to remain at the forefront of all cryptocurrency movements from Congress and the IRS to ensure our clients are protected from any consequences. Through our active participation in industry association groups and at industry events, we have provided thought leadership to federal and state lawmakers influencing the rulemaking process.
— Wendy Walker, solutions principal, Sovos
There's no question that the talent pipeline is among the most critical issues facing the profession. We are in a high-touch, client-centered business. While it's important to have people who know how to do the work and do it right, that is really table stakes. Clients expect that. We will succeed when we exceed client expectations in terms of service, forward-thinking advice and anticipating needs. I believe we do an excellent job of that at FORVIS, but it is not something we can take for granted. We must nurture and develop our younger professionals and our next generation of partners so they can carry on that legacy and continue to win trust, and new work.
— Tom Watson, CEO, Forvis
The intense competition for talent, the graying of the profession, and the impact of technology.
— Charles Weinstein, CEO, Eisner Advisory Group LLC
Remaining relevant to our clients and providing the kind of timely, meaningful insights that help them achieve their business and personal goals. Until we change the nature of the services we deliver, we will continue to be overworked, understaffed, and under-appreciated by our clients. I am motivated by a desire to help accountants create the life of their dreams as they do the same for their clients. We have so many great skills – it is time we leverage them in new ways.
— Geni Whitehouse, countess of communication, Even a Nerd Can be Heard, The Impactful Advisor, Solve Services, www.bdcocpa.com
Shortage of Talent at all levels, which plays in quite well with succession and transition challenges.
— Philip Whitman, CEO, Whitman Transition Advisors
As a profession,we have been talking about how workload compression and long hours are the norm. Today, we are actively looking for strategies to gain control of our businesses. We're identifying new advisory services, creating the profiles of our highest-value clients,finding new non-accounting team members and acting on a host of other initiatives to change the trajectory and really begin the act of creating higher value with fewer hours. We are behind and we have a lot of catching up to do.
— Sandra Wiley, president, Boomer Consulting Inc.
Like most industries, the auditing profession faces multiple challenges and opportunities, and I wouldn't place any one as higher than another.
We are focused on taking a comprehensive approach to improving audit quality by modernizing our standards, enhancing our inspections, and strengthening enforcement. Working together, all three will help keep investors protected.
At the same time, we need to bring more young people into the field and expand the diversity of young people who see accounting as a potential career path.
At the PCAOB, we are working to do our part through our scholarship program. This academic year, we awarded 250 students from U.S. colleges and universities with $10,000 each to pursue accounting degrees. More than half of the scholarships in the last five years went to diverse applicants. These scholarships help make careers in auditing possible for the best and brightest students, no matter their backgrounds.
— Erica Williams, chair, Public Company Accounting Oversight Board
Talent! And there are a few major aspects:
- The shrinking pipeline. Our profession has very poor PR with the 16–30-year-old set. Reddit and Fishbowl and other platforms paint a grim picture of our profession as one that underpays compared to other 5-year degree professions, is digitally backward, change resistant, and with a "sweat shop" reputation due to firm leaders glorifying hours worked and busy seasons and exhibiting an unwillingness or inability to right-size the work to match the resources.
- Turnover. According to the 2022 Rosenberg Survey, top performing firms turned over nearly a fifth of their teams in the prior year. We are repelling team members with too much work for the capacity and an unwillingness to make significant shifts to run truly one-firm, sustainable practices.
- Retirements. While change will be easier as traditionalists leave the workforce, the "silver Tsunami" of Baby Boomer retirements bleeds off both technical expertise and a number of contributors who lacked balance and contributed hours/effort in ways that future leaders aren't willing to match, contributing to the capacity issue.
There are many ways to solve this talent/capacity issue, including non-traditional staffing, offshoring, outsourcing, automation, introducing operational/administrative resources and non-CPAs to the workflow. Future leaders have an opportunity to identify the type of work and clients they love with the right revenue stream, right-size their client bases to serve those clients, and staff in new ways to ensure that deeper relationships are developed, and value delivered with less "grind" and more joy.
— Jennifer Lee Wilson, co-founder and partner, ConvergenceCoaching LLC
For the past few years on this survey, I have stated the same answer: commoditization of bookkeeping, tax preparation and attestation services, where this impact is felt mostly strongly with bookkeeping and tax preparation.
However, over the past few years the staffing issue has become increasingly problematic, making it, in my opinion, a similar level of challenge within the profession. In the end, this is a two-headed beast. If we could charge more, we could pay our people more and the profession would be more attractive. This would increase collegiate involvement/studies in accounting, and it would reduce the number of accountants who are leaving firms to start their own practices.
— Joe Woodard, CEO, Woodard
In a word: people. We have an ongoing talent shortage in the profession, as well as a declining pipeline of college students. In addition to simply needing more people, we need to train our existing people differently. I believe the profession is making great strides in this area, but we are also experiencing significant disruption and the goal posts never seem to stop moving. Advanced technologies are changing everything from how we manage businesses, to how we analyze and report, to how we communicate. Regardless of the level of experience, many accountants are changing the way they do their jobs.
— Candace Wright, chair of the Private Company Council of the Financial Accounting Foundation
Succession. Accounting leaders are aging, and the profession is facing a wake-up call. Many younger professionals have a different perspective on work and are choosing not to follow in the footsteps of their leaders. Successful firms have diversified and are offering more than traditional tax and audit services. These services don't require a Certified Public Accountant, and the need for this qualification is diminishing. But the firm owners want and deserve their payout. The answer seems to be pointing toward outside investment. It will be interesting to see how this trend plays out. As the leaders retire and the younger generation moves into leadership, will the investors be satisfied? The profession needs to figure out succession – the business world and shareholders need and deserve the services CPAs provide.
— Diane Yetter, president and founder, Yetter Consulting Services & Sales Tax Institute
How to best empower your teams with technologies that push the profession from hindsight into foresight.
— Martin Zych, CEO, Jirav
