Last year, you used one word to sum up 2017: change. How would you sum up 2018?
The change and disruption we saw in 2017 continued in full force into 2018 – it just became faster and more complex. The unprecedented pace of innovation and interconnection of new technologies, unstable business and political environments and changing workforce demographics are transforming the accounting profession and the role we play as trusted advisors to the individuals, businesses and communities we serve.
And as bewildering as change can sometimes seem, I think it’s actually promising for the future. These extraordinary times present nearly limitless opportunities for our profession, allowing us to dramatically reimagine the work that we do to become even stronger, more trusted and more vibrant. But to realize that opportunity, we have to be willing to challenge convention – to go beyond the way we’ve done things, beyond expectations, beyond comfort zones. That’s been a central theme of our work in 2018, as we’ve helped our members prepare for and embrace the opportunities on the horizon.
Technology is considered one of the primary drivers of disruption. How is it affecting the accounting profession, specifically?
Along with our technology arm, CPA.com, we track dozens of technologies to help members understand which they should focus on today as well as which they should prepare for in the future. Cloud computing, big data and artificial intelligence present the most opportunity for us in the short term to elevate the quality of our services. By using them to automate time-consuming, redundant tasks, we can focus more on the higher-value strategic insights and guidance our clients and businesses need as they try to stay ahead in changing times.
At the same time, we’re keeping an eye on the long-term impacts of technologies, including blockchain. Working with the Wall Street Blockchain Alliance (WSBA), we continue to serve as an international thought leader to help demystify blockchain for the accounting and tax space. Earlier this year, we cohosted with CPA.com a Blockchain in Accounting Symposium, bringing together leading experts to prioritize interest areas and ongoing efforts in this area. You can expect to see more outputs of this work in 2019.
So how do practitioners keep up? What are the implications for how and what we learn?
To capitalize on all that technology offers, we must build on our technical expertise and embrace the technology and human intelligence skills that are critical in a digital era. The World Economic Forum estimates that in the next three years alone, everyone will need an extra 101 days of upskilling.
Fortunately, we’re at an advantage, because the principles of lifelong learning have always been core to who we are. We simply must continue challenging ourselves to constantly learn, unlearn and relearn the competencies that will sustain us throughout our careers.
Boosted by the strength of our Association of International Certified Professional Accountants (the Association) with the Chartered Institute of Management Accountants (CIMA), we are working harder than ever to help CPAs be future-ready.
Our Go beyond+ disruption learning series takes a three-tiered approach to help members build these new competencies in areas such as blockchain, cybersecurity, data analytics, robotic process automation and human intelligence. You can learn the basics with free videos, blog posts and podcasts. Expand expertise with webcasts, conferences, certificate programs, specialized credentials and more. And apply the learning to practice with guidance and tools in accounting, audit and assurance, tax, finance and other specialized areas.
The increasingly complex legislative and regulatory environment is also putting a lot of pressure on CPAs in the U.S., particularly with the implementation of the Tax Cuts and Jobs Act. What is being done to help ease the burden?
One of our most important roles has always been – and will continue to be – working with state CPA societies and other professional organizations to advocate for good policy that protects the public interest. We’ve worked tirelessly in 2018 on a number of areas important to CPAs.
The Tax Cuts and Jobs Act has certainly topped the list and put tremendous pressure on CPA tax practitioners to understand the changes and the impact on their clients. We received thousands of questions after the act’s passage related to passthroughs, deductions, rentals and other issues. While the IRS continued to work on guidance, we, a long-time advocate of good tax policy, identified issues and submitted dozens of comment letters to promote fairness, administrability and the needs of you and your clients. We were pleased to see in October that IRS clarification on the deductibility of client meals when intermingled with entertainment expenses followed our recommendations and examples.
Meanwhile, we’ve worked hard to keep members informed along the way and created learning and tools to help ease implementation for tax practitioners. The Tax Reform Resource Center continues to serve as the go-to for comprehensive coverage on tax reform, and we update it frequently. It includes videos, podcasts, quick reference guides, toolkits, a Sec. 199A flowchart, client brochures and more.
We also recognize there’s strong interest among CPAs and CGMAs working in multinational businesses outside the U.S. to understand the implications of tax law changes in the world’s largest economy. To extend our thought leadership and help educate our international members, we held the first U.S. Tax Reform Conference in London this year, which was incredibly successful.
With all the change happening so fast, how are we balancing the demands of today with preparing the profession for tomorrow?
Our future is based on our ability to evolve, building on the strength of who we are and what we do today to create a profession that is even stronger and more vibrant. That’s why we remain as committed as ever to enhancing quality in core service areas, while also providing a roadmap to help public and management accountants start taking the necessary steps forward. For instance:
Audit and advisory services
We continue to see progress through our Enhancing Audit Quality initiative, and this year released new tools for auditors and auditees including the risk assessment toolkit. At the same time, we’re helping members extend their value beyond the financial statement audit by providing guidance in emerging service areas, such as the expansion of SOC reporting, cybersecurity and sustainability. We launched OnPoint PCR, with CPA.com and CaseWare International to help transform how preparation, compilation and review (PCR) engagements are done. And we’re moving forward with a multi-year initiative with leading CPA firms to create a new, innovative process for auditing, using technology that will be available to more than 14,000 firms in the U.S.
Tax
As their clients’ most trusted advisers, tax practitioners are beginning to extend that trust and create even more value. By working to integrate all their clients’ personal financial needs – tax, retirement, estate, risk management and investment planning, CPAs offering tax and planning advisory services are becoming the hub for their clients’ financial lives. You can serve that role, ultimately deepening your client relationships and growing your practice. Our Planning & Tax Advisory Services site provides everything you need, including a roadmap to get started and tools to help communicate your value to current and prospective clients.
Management accounting
Management accountants, who make up almost half of our membership, serve on the front lines of driving trust in business. That trust – and ultimately an organization’s success – now relies on intangible values as much as what appears on the balance sheet. We released several new resources to help management accountants drive trust and value in business across a breadth of areas, including Business Model Concepts, Managing the Trust P&L toolkit, Fundamentals of Integrated Reporting Certificate Program and a guide to implementing Sustainable Development Goals.
We also completed consultation with more than 5,500 finance professionals from 2,000 organizations across 150 countries to understand how the role of finance is changing in the digital age. We released the first outputs of our research, four emerging theme papers, and are creating a blueprint on the future finance function and the skills you will need to thrive in it. You’ll hear more about that in early 2019, as we update our CGMA Competency Framework and our CGMA Finance Leadership Program in the U.S. Launched in late 2017, the program expands access to the CGMA and responds to growing employer demand for the qualities that the designation brings to their finance teams.
What more can we expect in 2019?
In addition to building on the work in the core and emerging areas we just discussed, we will continue to focus on other critically important initiatives aimed at keeping the CPA profession well positioned for the future.
Small firm support
We’ve recently refreshed our dedicated resource page for small firms and sole practitioners. The site features technical guidance and other tools from the Private Companies Practice Section (PCPS) to help members stay ahead of tax reform, manage their practice, plan for the future and more. Members can also access the new Small Firm Philosophy podcast, which offers practical tips from other small firm leaders across the country. In 2019, we’ll continue to enhance this site with all the latest videos, podcasts and information, including new and updated toolkits related to PCPS’s Firm inMotion e-Toolkit, FRF for SMEs, Revenue Recognition and Leases Standards.
#CPApowered
We’ll continuing promoting your value through #CPApowered, which generated more than 41 million impressions across social media and national cable tv in 2017-2018. The new iteration promotes CPAs as go-to experts for millennial small business owners, and uses social media and the new Small Biz Brunch podcast to reach these new, prospective clients.
CPA pipeline
We’ll keep building on our success working with state CPA societies on initiatives aimed at attracting high school and university students and academics, and helping firms create a pro-CPA culture that encourages and supports candidates as they tackle the CPA Exam. We’ll also continue meeting international interest in the CPA, now that the administration of the CPA Exam has expanded to include testing sites in Germany, Ireland and the U.K. And in 2019 we’ll release a new Trends in the Accounting Profession report, which will provide a holistic view of the progress the profession is making in the supply and demand of accounting graduates.
Any closing thoughts as we wrap up the year?
The pace of change will never be as slow as it is today. Some of us may long for slower, simpler times, but we can’t control what’s happening in the world around us. What we can control is how we decide to move forward in these times – how we embrace change and seek new opportunities, approaches and competencies for ourselves as individuals and the profession overall.
Our profession has a long history of evolving. What we do today looks very different than the services we provided 100 years ago. But we are still strong, relevant and trusted because we’ve continued to rise to meet the challenges of changing times. I’m proud to be part of the greatest profession and the role we play in society. And I know that we will continue to go beyond expectations and build an even stronger foundation of trust and opportunity for generations to come.
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Originally published by AICPA.org
