While CPAs will be needed far into the future, the profession – including members, educators, and regulators – needs to be more proactive in the face of massive changes, according to National Association of State Boards of Accountancy president and CEO Ken Bishop.
“I believe the future of the CPA is strong,” Bishop told attendees at NASBA’s 110th annual meeting, held in New York City this week. “There’ll be a need for traditional CPAs for decades. … But what if we finally, after a hundred years, created a new pathway to being a CPA? A different type of education, a different experience requirement?”
“The number of candidates in the CPA pipeline is at record levels, but we see a significant percentage of those who are not taking the CPA Exam, or becoming CPAs,” he noted, adding that large firms have announced plans to hire 20 percent fewer CPAs, as they look to other skillsets, particularly around technology and data analysis. “If you’re a bright young person with the acumen to become a CPA, and an acumen for technology, that might turn you off from being a CPA.”
Bishop cited a definition that the ideal CPA should be “well-organized, have excellent mathematical skills, have practical abilities and be comfortable working in a highly structured environment,” and when his audience of several hundred agreed that it seemed like a good description, he pointed out that it came from 1937.
“We have been a consistent, relied-upon profession for all these years,” he said. “But the accounting profession will change more in the next five years than in the last 50, and this description may not be attracting the kind of candidates we want.”
With that in mind, he gave a modern description of a data technologist, who “must be an expert in database technology, statistics and visualization, and must be able to articulate how information, insights and analytics” impact businesses, and suggested that the CPA profession needs to open itself up to those sorts of skills, and to definitions that blend the old and new types of professional.
“We have to quit reacting, we have to be proactive, and we have to be thinking down the road,” he said.
The state of the association
NASBA has been carefully putting itself in a position to be more proactive, Bishop said, citing the fact that it has significantly increased its net assets over the past few years. (For more details, see “Strong financials,” below.)
“Why does NASBA need that much money?” he asked. “The things we know that are coming up on the radar—data technology, for instance, and all the tools we’ll need for the future—NASBA’s dedicated to building that for you, and it’s going to cost millions.”
NASBA is already working on its technology, he said, with infrastructure modernization, improvements to its core IT systems, and an ongoing project to build a new National Candidate Database that should offer powerful new tools to state boards and other stakeholders by the end of 2018.
What’s more, the association is determined to pursue its mission to support state boards of accountancy, and has budgeted $10.3 million for that purpose for 2018—almost a million more than it spent in 2017.
“That means if you ask for help, we can say yes,” he told attendees. “We were able to respond positively to every state board request this year—100 percent of the time.”
That help may prove necessary, Bishop warned, as state boards are seeing an unprecedented attack on their budgets and independence, as states look to save money and answer calls for deregulation by cutting back on state agencies that oversee professions like barbers, interior decorators—and accountants.
“We see states trying to strip away resources from state boards of accountancy because they think you’re a bunch of hair-braiders,” he said. “We need to stop that—we need to take a stand.”
Strong financials
In a separate session at the annual meeting, NASBA treasurer and Administration & Finance Committee chair Carlos Barrera, reported on the healthy state of the association’s finances.
Its revenues rose 5.2 percent over the past year, despite a 1.6 percent decline in CPA Exam sessions. “CPA Exam revenues were down, as expected,” Barrera said, but other sources of revenue made up for the downturn, which is common in years when the exam is changed, as it was this year.
Even as revenues rose, the association’s expenses also rose, by $1 million, or 3.4 percent—largely in the areas of mission-focused member services, and the operating areas of examinations, licensing and relating services. Barrera noticed that expenses declined around technology and professional fees.
NASBA’s investments also showed a major increase, rising $2.3 million, a 7 percent return that Barrera attributed to strong market performance. Overall, the association’s net assets increased $6.2 million, to $51.5 million—one of the biggest jumps in its history, and a significant increase from 2013’s $33 million.
Perhaps most important, for both Barrera and Bishop, was that NASBA posted a big increase in its mission-related members services, with spending rising $500,000 to $9.5 million overall. He also noted that spending on regulation and public protection made up the vast majority of that, at $7 million, and had risen in 2017, while spending on the NASBA Center for the Public Trust remained steady at $700,000, and spending on conference and travel costs had dropped somewhat, to $1.8 million.
“In the current year, the positive financial resources have enhanced NASBA’s ability to invest in technology,” Barrera reported. “And a strong financial position means the board will be able to adapt to the changing need of the profession.”
Award presentations
As part of the business meetings, several awards were presented.
To start, board member E. Kent Smoll received the NASBA Distinguished Service Award in recognition of his “unwavering commitment to advancing the interests of NASBA.” Currently the vice mayor of Dodge City, Kansas, Smoll served as NASBA’s treasurer from 2011-2016 and Central Regional Director from 2007-2009, among a number of committee assignments, and is a past chair of the Kansas Board of Accountancy. “This is your profession, and you as regulators are charged with protecting it,” he said in accepting his award. “NASBA is an incredibly relevant organization that is filled with talent.”
Nicole Kasin, the executive director of the South Dakota Board of Accountacy, received the Lorraine P. Sachs Standard of Excellence Award, which recognizes state board staff who show excellence in regulating and making a positive impact on the accounting profession. Kasin has served as ED since 2006, and served on several NASBA committees.
Finally, Thomas Sadler received the William H. Van Rensselaer Public Service Award, in recognition of his many contributions to the public accounting profession. Sadler served as NASBA chair in 2008-2009, and is a past chair of the Washington State Board of Accountancy.
