Why Compliance May Not be Dead After All

With advancements in technology that can handle the once daunting, but billable hour-filling work that CPAs have been traditionally known for, the call for accounting professionals to move towards a more advisory role and add value has been loud.

Moreover, word from vendors of such products and services and even the AICPA and CPA.com (which markets products and services to CPAs) has been that if CPAs are to survive they need to move away from compliance work.

The fact is, for nearly a decade, the death knell for compliance work has been sounded for but after attending this year’s AICPA ENGAGE it was clear that is not necessarily the case…at least, not without some caveats. Once more, technology is playing a role in the message to CPAs and the kind of work they can (and should) be doing, compliance included.

As we all know, compliance work remains the “bread and butter” for so many firms, especially smaller ones. Now that current tax and even audit technology exists to (for lack of a better phrase) make compliance great again, profession leaders are walking back the death of compliance stance.

“Compliance will not completely go away. At the very low end it may to a degree, but certainly not at the high end,” said AICPA Chairman Bill Reeb. “We have so much compliance work to do most of us keep talking about being advisors, but it doesn't happen. We should enjoy the expansion that is there.”

Reeb was mainly referring to current messaging, which is the recognition that CPAs do need to move into a more advisory role, but most compliance work is still very necessary for them to oversee and technology is there to see it done more effectively and efficiently; particularly audit work.

“Immense powers of technology come into the audit of today. We need to be imaging the audit as if we created it today with the technology that exists today,” said AICPA CEO Barry Melancon. “Everthing we do today has to be done with an advisory angle, including audit work."

Reeb followed up Melancon’s point during a co-keynote session, adding "every one of the partners and managers at a firm has to learn how to provide advice, it's no longer an option.” He also noted that it is conceivable that in several years on an audit there will be more technologists involved.

The call for audit’s evolution was also noted during last year’s Digital CPA event, when Melancon shone a spotlight on the work the AICPA and CPA.com are doing to help it move towards the future.

“We are taking on the challenge of changing what audit is… today our challenge is also to create the capacity to see new opportunities, new services that we don't yet offer. If we do not do that we aren't guaranteed our space,” Melancon had said.

In a related matter, Melancon noted how CPAs’ core service requires a skillset that is beyond the traditional accountant.To that end, this year’s PCPS CPA Firm Top Issues Survey showed that finding qualified staff was the number one concern for every firm size aside from sole practitioners.

Keeping up with complexities, managing privacy and risk were also among the top CPA concerns. The charts below indicate the top CPA concerns based on firm staff size.

Article source: https://www.accountingweb.com/practice/practice-excellence/why-compliance-may-not-be-dead-after-all

Accounting Web

Jun 14, 2019

Press Releases

CPA.com Launches Program to Help CPA Firms Reimagine the Future of Practice

Innovation Expert Pascal Finette to Help Guide Discussion on Succeeding in Disruptive Times

LAS VEGAS (June 12, 2019) – CPA.com is launching a multipart program to help CPA firms identify the potential change coming to the accounting profession and create new business models to adapt and capitalize on new opportunities.

The initiative, “Navigating the Future,” will include a collaboration with innovation expert Pascal Finette and his firm, radical. The program will use a mix of thought leadership, learning sessions and planning exercises to help firms:

Create business models for future success
Positively embrace disruption
Prepare the profession for exponential change
Shift their mindset to a more empowered digital focus
Engage in strategy-building sessions to design digital organizations.

“At CPA.com, we’ve said for some time that the hardest part of dealing with disruptive change isn’t the technology piece, it’s change management,” said Erik Asgeirsson, president and CEO of CPA.com. “This program is designed to help firms take a longer, more insightful view on how to drive change.”

The program will kick off with a July 25 webcast, “Thrive in Exponential Times,” featuring Asgeirsson and Finette. Participants can download a kit after the webcast that will allow them to conduct their own planning exercises such as “disruption maps,” in which firms can play out the implications of change on specific business models and identify opportunities and challenges from those shifts.

Finette will participate in several AICPA events, including CPA.com’s signature conference, Digital CPA, which will be held Dec. 9-11 in the Seattle area. Some of the findings of these explorations will be summarized at the conference.

The Navigating the Future program will also include several in-depth thought leadership articles on technology and change management topics. The first will be available this summer.

For more information, please visit cpa.com/research-innovation

About CPA.com

CPA.com brings innovative solutions to the accounting profession, either in partnership with leading providers or directly through its own development. The company has established itself as a thought leader on emerging technologies and as the trusted business advisor to practitioners in the United States, with a growing global focus.

Our company’s core mission is to drive the transformation of practice areas, advance the technology ecosystem for the profession, and lead technology research and innovation efforts for practitioners.

A subsidiary of the American Institute of CPAs, the company is also part of the Association of International Certified Professional Accountants, the world’s most influential organization representing the profession. For more information, visit CPA.com.

Article source:

CPA.com

Jun 13, 2019

Press Releases

CPA.com launches initiative to prepare accountants for the future

CPA.com, the tech arm of the American Institute of CPAs, has launched an initiative to help accountants identify and prepare for changes to the profession. The initiative, dubbed Navigating the Future, will include collaboration with innovation expert Pascal Finette and his consulting firm, Radical.

Navigating the Future is designed to help accountants identify changes coming down the pipeline to the profession, and also to create new business models and adapt and capitalize on new opportunities. Specifically, CPA.com plans to offer sessions and exercises around the following:

Create business models for future success;
Positively embrace disruption;
Prepare the profession for exponential change;
Shift their mindset to a more empowered digital focus; and
Engage in strategy-building sessions to design digital organizations.

“At CPA.com, we’ve said for some time that the hardest part of dealing with disruptive change isn’t the technology piece, it’s change management,” said Erik Asgeirsson, president and CEO of CPA.com, in a statement. “This program is designed to help firms take a longer, more insightful view on how to drive change.”

The program will kick off with a July 25 webcast, “Thrive in Exponential Times,” featuring Asgeirsson and Finette. Participants can download materials after the webcast that will allow them to conduct their own planning exercises such as disruption maps, in which firms can plan out the implications of change on specific business models and identify opportunities and challenges from those shifts.

Finette will participate in several AICPA events this year, including CPA.com’s Digital CPA conference, which will be held Dec. 9-11 in Seattle. Some of the findings of these explorations will be presented at the conference.

The Navigating the Future program will also include several in-depth thought leadership articles on technology and change management topics. The first will be available this summer.

Article source: https://www.accountingtoday.com/news/cpacom-launches-initiative-to-prepare-accountants-for-the-future

Accounting Today

Jun 13, 2019

Press Releases

Forget Disruption — Aim for Transformation

Accounting firms should transform their current service offerings and explore new, more profitable ones now, before changes in the economy and the marketplace force them to, according to two leaders of the profession.

Speaking during a joint presentation at the American Institute of CPAs’ Engage 2019 conference in Las Vegas this week, CPA.com CEO Erik Asgeirsson and AICPA executive vice president of member relations Mark Koziel made the case for why accountants need to consider this transformation — and detailed many of the service areas they should consider first.

“You’re going to hear, ‘Disrupt, disrupt, disrupt,’” Koziel warned. “I hate that word. How many people want to be disrupted? How many people want a root canal? But the whole marketplace is being disrupted — it’s not just us.”

Forty percent of the companies that were in the S&P 500 in 2000 no longer exist in the same form, he pointed out — a wave of change that is mirrored in the accounting profession, where 39 percent of the firms that were in the Top 100 in 2000 no longer exist.

Many of the same factors that have propelled those changes since 2000 have moved the profession into a position where its traditional services deliver less perceived value — but where it has tremendous opportunities to add more value than ever before.

“It’s no longer about data processing and general compliance — those are just table stakes. All that we used to do in the transactional will be automated,” Koziel explained. “If we’re just filling in boxes on a 1040, our business is at risk. If our focus in dealing with the client is talking about their individual needs, now we have a business.”

Asgeirsson stressed the important role of technology in transforming accounting firm services.

“I’m really excited, because it feels like we’ve moved into a new era of investment in technology — it’s happening at firms of all sizes,” he said. “With new technology, the question is how you’re leveraging them to drive your business forward.”

But while he thought the profession’s embrace of technology over the past 10 years — its ongoing embrace of mobile and the cloud, for instance — have set it up well for thriving in the next five years, he also explained that the tech alone is not enough.

“It’s not just about the technology — you have to think about your strategy, too,” he said. “The CAS firms that are successful have a strong strategy.”

New worlds to conquer

In fact, the modern form of client accounting services — where firms use cloud-based software to offer sophisticated outsourced CFO services to more and more clients — was one of the prime service areas Asgeirsson and Koziel recommended firms get into.

“Our smaller firms are crushing it in CAS, moving up the value chain and adding more value,” Koziel said.

“There’s never been a better time to get into client accounting services — and there’s never been a better time to get into prep, comps and reviews,” Asgeirsson added, citing a number of developments that are transforming assurance services.

From the release of the OnPoint PCR tool to enable more efficient and effective preps, comps and reviews, to the rise of AI and the AICPA’s initiative to build a 21st century audit tool and methodology with its Dynamic Audit Solution program, and the institute’s efforts to improve audit quality, this core service area of the profession is on the verge of its own transformation.

“Today there’s roughly $35 billion in assurance revenue,” Asgeirsson said. “We think the modern auditor will bring in much greater value.”

“Without the audit, the rest of the things we have permission to do are at risk,” Koziel said. “Whether or not you and your firm do them individually, as a profession we need to maintain that level of trust.”

That trust is, in part, what will enable accountants to expand into some of the other service areas the two mentioned as ripe with value-adding opportunities, such as cybersecurity services, a wide range of blockchain consulting, advisory and assurance services, and wealth management.

The last, Koziel noted, is an area where accountants have long left value on the table. He recalled going through a long process to help a client sell their business, at the end of which the client received a $10 million check and then asked Koziel what to do with the money. “I had a friend at Merrill Lynch, so I introduced them, and my friend got a big new client,” he said. “And what did I get? I got a cookie basket from my client.”

Threats all around

While the opportunities in new services are tremendous, Koziel and Asgeirsson did not downplay the competitive threats.

Brokers and credit rating agencies are offering to do tax returns for free, Koziel noted. “When clients go to their brokers and say, ‘My CPA says you’re the problem because my 10-K is late,’ the broker is going to say, ‘Get rid of your CPA; we’ll do your tax return as a loss leader, since we know all the information.’ That’s where the market is now.”

And looking down the road, the threats only get more serious, he said: “If Google looks at the historical reports we create and says, ‘We can give you forward-looking information on a real-time basis,’ we’re in trouble. We need to transform ourselves.”

This kind of change in service offerings is not new to the profession, however. “A hundred years ago, we were doing CAS, but in a different way — we were the Bob Cratchits of the world, keeping the boss’ books,” he said. “And then in 1912 we took over tax, and then in 1934, the CPAs were there again to take on the audits.”

“Thirty years ago, the small firm was the general practitioner — now the small practitioner is focused on a single niche and they go deep,” he continued. “Our new sole practitioners are being created based on today’s technology, not the technology of 20 years ago, and these are the really progressive firms.”

Article source: https://www.accountingtoday.com/news/forget-disruption-accountants-should-aim-for-transformation

Accounting Today

Jun 13, 2019

Press Releases

The 2019 AICPA/CPAPA Most Powerful Women in Accounting

The American Institute of CPAs and CPA Practice Advisor are pleased to partner for the 2019 Most Powerful Women in Accounting Awards, given annually to 25 women leaders who are helping to define and advance the profession.

See below for the full list of this year's honorees, with links to learn more about them.

The joint administration of the award is part of the AICPA’s ongoing efforts to promote inclusiveness and create more opportunities for women to attain leadership positions in both public and management accounting.

“We’re excited to work with CPA Practice Advisor to recognize some of the best and brightest in the profession,” said Jacquelyn H. Tracy, CPA, CGMA, chair of the AICPA Women’s Initiatives Executive Committee (WIEC). “Year in and year out, this is a highly impressive group of women that we hope to give even more visibility as role models and pathfinders.”

The WIEC sponsors research, mentorship and networking opportunities, and oversees the annual Women’s Global Leadership Summit.

Members of the AICPA work with CPA Practice Advisor to select and promote award winners each year. The AICPA will continue to offer its “Women to Watch” awards, which – in collaboration with state CPA societies – recognize experienced and emerging women leaders.

“Now in its eighth year, the ‘Most Powerful Women in Accounting’ awards recognize women who are not just making a difference in the accounting profession, but who are the difference in the profession – our accounting profession would not be where it is without the impact these influential women are making,” said Gail Perry, CPA, editor-in-chief of CPA Practice Advisor magazine.

Winners were recognized at AICPA ENGAGE, held June 9-13 in Las Vegas. To be eligible, nominees should demonstrate they:

Are a driving force in creating a culture of innovation or excellence within their firm, or helped, as a vendor, to develop technologies that empower firms to be more productive and profitable
Have reached a level of management and ownership within their company, with demonstrable impact on its success
Actively mentor those following in their footsteps