With all the talk of the profession's digital revolution, as well as the bevy of new service lines it can enable, one might be tempted to think that every single firm everywhere is either already on the cutting edge of technology or is actively working towards it. Despite this, however, there remain many firms that not only have not undergone this process, but don't wish to do so in the future.
Kacee Johnson, vice president of strategy and innovation at CPA.com, said this is leading to a certain polarization, and a cultural divide within the profession. Essentially, there are firms where technology is an asset that drives value; and in others, it is viewed as an operational expense, something necessary to get the real work done.
"We have a polarization of firms. We have very progressive firms eager to adapt and that want to be innovative, and those firms have transformed their culture and are much more agile for it. But we also have so many firms busy with compliance work," she said.
While these firms may be seen as rather retro compared to others, she noted this doesn't stop them from making money. In fact, she said, many of them do so "hand over fist" and so don't really see the need for change in the first place. This, in turn, means that the cultural changes sweeping over other firms are not as prominent there.
"I don't think those firms have changed their culture much," she said.
While there might be steady work, however, Johnson noted that these firms are leaving a lot of money on the table. She also raises questions about the sustainability of such practices in the long run, as even compliance engagements will start requiring at least a little more technological savvy than now. For instance, while tax work is a reliable compliance area, as digital assets get more common, the ability to do this tax work will still call for technological solutions.
"I think after the IRS added digital assets to the 1040, I [knew] we'd see higher adoption. Now that major banks and so many retailers accept cryptocurrency as payment, I'd expect to see higher adoption of crypto reporting software than what we currently see," she said.
This tech-hesitancy on some firms' part is also a detriment of the accountants who work there. Firms that don't place themselves in a technological framework will probably have staff doing more rote processes versus focusing on value-added services, like broader strategic consultation. She said the accountants doing that sort of work are probably a lot happier than the ones just crunching numbers.
"I think the teams doing that work will be much happier because it's not rote data entry stuff. Considering the talent shortage, I don't think we should be concerned about technology replacing jobs but how it will augment them and upskill them. We need to do that in the profession, and our teams need to evolve with that technology," she said.
It was for this precise reason that the AICPA (which owns CPA.com) and the National Association of State Boards of Accountancy recently changed the Uniform CPA Examination to include more technology and data-related questions, a project they have called CPA Evolution. Since this seems to be where the profession is going, it was felt that the test needs to evolve to fit the current state of the industry.
"As we go forward, we'll see evolution in what it means to be a CPA and how it is technologically driven. You can see this on CPA Evolution, it's so much more technology-focused and that will lead to more roles being filled that aren't even necessarily accounting. You see that today, there's so many new roles in accounting degrees," she said. "But it depends on the firm. We are so polarized where we're at in the evolution of adopting new technologies and how we're approaching it."
This story is part of the second season of the Accounting Today series called "The Frontier," where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, concerns and even a few predictions here and there.
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