Archive for the ‘AICPA’ Category

Thursday, August 22nd, 2019

The Hiring Model Has Shifted For CPA Firms

“Out of your vulnerabilities will come your strength.” – Sigmund Freud

The following is a press release I received from the AICPA. It is much longer than my normal post but I think it is important for firm leaders to read. Read it, then think about it and begin making plans.

Public Accounting Firm Hiring Model Shifts: AICPA ‘Trends Report’

  • Undergraduate accounting enrollments were second highest on record in 2017-2018
  • AICPA is working with key stakeholders on programs to strengthen pipeline of talent entering the profession

NEW YORK (Aug. 12, 2019) – Rapid advances in technology continue to impact the accounting profession. As CPA firms shift their hiring models to focus more on technology skills, non-accounting graduates now comprise 31 percent of all new graduate hires in public accounting. That’s an increase of 11 percentage points from 2016 to 2018, according to the “2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits,” released today by the AICPA.

The biennial report, published since 1971, provides statistical projections and expectations based upon university responses for the 2017-2018 academic year and firm responses for the 2018 calendar year. This data provides a snapshot of the profession, set against the current economy, and the ability to forecast future trends.

“Increased demand for technology skills is shifting the accounting firm hiring model. This is leading to more non-accounting graduates being hired, particularly in the audit function,” said Barry Melancon, CPA, CGMA, AICPA president and CEO, and CEO of the Association of International Certified Professional Accountants. “CPAs have an unmatched reputation for trust and integrity, earned through decades of working in the public interest. However, to play this vital role in the future will require an increased focus on technology.  It is incumbent upon the profession to ensure accounting graduates and newly licensed CPAs have these skills and expertise needed to support the evolution of the audit.”

One of the ways AICPA is seeking to address this trend is through the CPA Evolution project, in partnership with the National Association of State Boards of Accountancy. This project strives to ensure that CPAs continue to have the competencies needed to support an accounting profession that plays a critical role in protecting the public interest.

The percentage of new accounting graduate hires assigned to audit-related work is increasing. This area now comprises 56 percent of new accounting graduate hires. That’s up four percentage points from 2016 and nine percentage points from 2014.

Overall CPA firms hired about 11 percent fewer accounting graduates in 2018 than they did in 2016, and nearly 30 percent fewer than in 2014. As firms continue to embrace technology and evolve their approach to the audit, they are seeking employees with data science and data analytics skills. They are largely filling those needs with non-accounting graduates, though there is anecdotal evidence from firms to suggest that some of this technology-specific hiring is occurring at the experienced hire level.

On the supply side, enrollments in undergraduate accounting programs stand at the second highest level on record after pulling back slightly from their all-time high in 2015-2016.

Nearly 208,000 projected students were enrolled in undergraduate accounting programs during the 2017-2018 school year, topping 200,000 for the fourth Trends report in a row. More than 33,000 projected students were enrolled in master’s programs in 2017-2018. This reflects a six percent decline from 2015-2016 but remains comfortably above any level pre-recession. Declines in graduate student enrollment is due largely to more students opting to enter the workforce in lieu of pursuing an advanced accounting degree.

There were nearly 55,000 projected bachelor’s and more than 21,000 projected master’s degrees earned in 2017-2018. This reflects a decline of four percent each from the previous report. However, the combined 76,542 degrees remains above pre-recession levels.

After a significant increase in the number of new CPA Exam candidates in 2016, largely attributed to the new version of the exam launching in 2017, the number of candidates and newly licensed CPAs in 2018 dipped to the lowest level in 10 years. CPA candidates fell 7 percent to 36,827, while newly licensed CPAs fell 6 percent to 23,941.

“The AICPA and other stakeholders in the profession are focused on anticipating the changes shaping our economy and ensuring newly licensed CPAs have the skills they need to serve as trusted advisors to their clients,” said Yvonne Hinson, CPA, CGMA, Ph.D., AICPA Academic-in-Residence, Academic & Student Engagement. “As the pace of change increases, the Institute has been accelerating our work on a number of profession-wide initiatives that attract, inspire, and engage the next generation of CPAs.”

In addition to CPA Evolution, some of these initiatives include:

  • A CPA Exam practice analysis focused on the impact of technology and the critical skills for newly licensed CPAs. An exposure draft and invitation-to-comment will be published in late December.
  • Accounting Accreditation Practitioner Engagement Program which places CPA practitioners on AACSB accounting accreditation teams and committees.
  • Accounting Doctoral Scholars Program provides funding for CPAs to obtain their doctorates and teach.
  • Accounting Program for Building the Profession trains high school educators to teach a college-level accounting class.

The Institute is working with organizations to increase the likelihood that racial and ethnic minority students consider accounting early in their career decision-making process. AICPA scholarships and programs such as the Accounting Scholars Leadership Workshop help ensure accounting students have a meaningful and successful experience as they work to earn their CPA license.

The report found that racial/ethnic diversity has increased, with the highest percentage of non-white enrollees to date. Enrollment by gender is nearly even at both the bachelor’s and master’s levels.

View the full Trends report

  • Strength and growth come only through continuous effort and struggle.
  • Napoleon Hill

Wednesday, June 12th, 2019

New Internet Domain for CPAs

Here’s a recent press release from the AICPA.

AICPA to Oversee New Internet Domain for CPAs

.CPA Will Enhance Trust and Branding of Profession in the Digital World

LAS VEGAS (June 10, 2019) –The American Institute of CPAs is in the process of being awarded the .cpa domain and is currently in a contract execution phase with the Internet’s global governing body, the Internet Corporation for Assigned Names and Numbers (ICANN). The AICPA’s role in administering .cpa will provide a defined global domain for CPAs worldwide to connect with their clients with increased trust, security, and verification.

The Internet, like most things, is evolving. ICANN is charged with developing important future drivers for connection in the digital world. As part of this mission, it has expanded the top-level domain structure to aid navigation on the Internet and support trusted and value-based entities and communities. To supplement traditional top-level domains such as .com, .edu and .org, ICANN has approved more than 1,200 specialized domain extensions – including Amazon’s .aws, Google’s launch of .app, as well as those for other well-known businesses, governments, and institutions, such as .vanguard, .barclays, .kpmg, .mlb, and .nyc.

“By overseeing the .cpa domain in collaboration with other global CPA organizations, the AICPA can help promote CPAs’ visibility and protect their professional standing online,” said Barry Melancon, CPA, CGMA, the president and CEO of the AICPA. “We also want the public to have confidence that someone using a .cpa domain address for email or a website is affiliated with the CPA profession.”

The new domain extension will be available to CPAs and their firms and will signal a clear connection to the profession. For example, Firm Name, LLC, could have a website address of www.firmname.cpa. Jane Smith, an employee at that firm, could have an email address ofjsmith@firmname.cpa.

“Today, there’s a lack of authentication and growing mistrust of online information,” said Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s technology subsidiary. “This is why many leading companies and communities, such as Amazon, KPMG, and the banking industry are moving to restricted top-level domains. We’re looking forward to bringing this important new capability to the profession.”

More details on registering a domain name will be available later this year. For additional information and the opportunity to sign up for notifications, please visit https://domains.cpa.com

  • By overseeing the .cpa domain in collaboration with other global CPA organizations, the AICPA can help promote CPAs’ visibility and protect their professional standing online.
  • Barry Melancon

Friday, May 17th, 2019

Millennials’ Desired Workplace Benefits

From a recent AICPA survey:

  • Nearly two-thirds of young adult job seekers have student loan debt, with an average of $33,332.
  • Millennials with loan debt value more help with repayment over all other employee benefits.
  • AICPA Employee Benefits Report offers guidance on understanding and utilizing benefits.

When asked to choose the top three benefits that would most help them achieve their financial goals, young adult job seekers top two choices focused on the traditional benefits of health insurance and paid time off. Interestingly, student loan forgiveness was the third most cited option.

Young Adult Job Seekers

Benefit

Chosen in Top 3 by:

 Health Insurance

54%

 Paid Time Off

45%

 Student Loan Forgiveness

41%

 Working Remotely

38%

 401(k) Retirement Fund Match

36%

 Tuition Reimbursement

25%

 Pension

15%

 Paid Parental Leave

13%

The full results of the survey conducted by MAVY Poll on behalf of the AICPA, along with further analysis, are available in a free Employee Benefits Report on the AICPA’s 360 Degrees of Financial Literacy website.

  • All growth depends upon activity. There is no development physically or intellectually without effort, and effort means work.
  • Calvin Coolidge

Wednesday, May 15th, 2019

Be Sure To Take Part in the AICPA PCPS Top Issues Survey

“He who has no opinion of his own, but depends upon the opinion of others, is a slave.” – Friedrich Gottlieb Klopstock

There are just a few days left to weigh in on the top issues facing your firm!

Take 10 minutes for the AICPA PCPS Top Issues Survey and help set the direction for the resources they develop.

Survey closes 5.17.19 http://bit.ly/302prW6 

  • It is not truth, but opinion that can travel the world without a passport.
  • Walter Raleigh

Monday, December 17th, 2018

Digital Client Advisory Services Roadmap Workshop

“Opportunity does not knock, it presents itself when you beat down the door.” – Kyle Chandler

I have talked to many CPAs about truly organizing and adding Client Accounting Services to their menu of services. Many firms are experiencing great success. It is important for you to understand the digital part of the equation.

CPA.com is offering a helpful workshop – Digital Client Advisory Services Roadmap Workshop – on January 23-24, 2019 in Burlingame, CA. Here a link to more information.

There is a $300 discount that expires on December 23.

Who should attend:

  • Client accounting service practice leaders
  • Key staff
  • Partners in small, midsize and large CPA firms
  • Accounting firm business development and marketing professionals

I hope you explore this opportunity.

  • The game of life is a lot like football. You have to tackle your problems, block your fears, and score your points when you get the opportunity.
  • Lewis Grizzard

Thursday, November 29th, 2018

CPA Regulators & Profession Jointly Explore Evolving Licensure Model

“Everyone thinks of changing the world, but no one thinks of changing himself.” ― Leo Tolstoy

Interesting press release from the AICPA. Times are changing and changes need to happen.

NASHVILLE and NEW YORK (November 29, 2018) – Leaders of the CPA profession, the regulatory community and representatives from critical stakeholder groups are joining together to explore possible changes to the CPA licensure model that embrace the need for expanded skillsets of professionals. The goal of the effort is to align licensure with how CPAs will perform services in an increasingly technologically-driven environment.

The CPA Evolution Working Group, which is having its second meeting today, was formed by the National Association of State Boards of Accountancy (NASBA) and the American Institute of CPAs(AICPA).

The Working Group consists of representatives from Boards of Accountancy, state CPA societies, CPA firms of all sizes from around the country, the accounting academic community, and NASBA and AICPA volunteer committees. They have been tasked with advising NASBA and the AICPA on actions that would position the profession for the future while continuing to protect the public interest.

“Technological innovation and changing client demands are rapidly transforming the skills accountants need to thrive,” said Working Group Chair Cathy Allen, CPA, a managing member of Audit Conduct LLC and a member of NASBA’s Board of Directors. “We want to reimagine the CPA learning and licensure approach. Working Group members recognize the critical role of technological and data analysis expertise needed in firms and businesses today. Our goal is to recommend a strategy that provides the guiding principles for how to build related knowledge and skills into accounting curricula and how to test for those proficiencies on the CPA Exam.”

In the last year, the AICPA and NASBA have discussed potential alternatives to the current licensure model with key stakeholders and have gathered valuable initial feedback. A principal theme that has emerged from the feedback is support for action to evolve the approach to licensure.

“We really value the early engagement we’ve seen from the profession’s key stakeholders,” said Susan S. Coffey, CPA, CGMA, AICPA executive vice president for public practice. “Based on what we’ve heard, there is no question that the profession is ready to take action to capitalize on the opportunities that technology presents to us. That includes an evolution in our approach to licensure that embraces the changes and continues our public protection mandate. I’m looking forward to the Working Group’s recommendations and engaging with the profession and our key stakeholders throughout 2019.”

The Working Group will meet again this winter, and recommendations on a path forward regarding the licensure model are expected to be shared with state boards, state societies, CPAs and other stakeholders next year.

In addition to Allen, CPA Evolution Working Group members are:

  • Tom Broderick, CPA, CGMA, managing principal, BPW&C
  • Mark Dawkins, CPA, CGMA, CMA, dean, Coggin College of Business, University of North Florida
  • Clay Huffman, CPA, senior manager, Frazier & Deeter, LLC
  • Nancy Wolven-Juron, CPA, partner, Deloitte LLP
  • Audrey Katcher, CPA/CITP, CGMA, CISA, partner, RubinBrown LLP
  • Rick Niswander, CPA, CGMA, professor, East Carolina University
  • Todd Shapiro, president and CEO, Illinois CPA Society
  • Susan Somers, executive director, Kansas Board of Accountancy
  • Michael Womble, CPA/ABV/CFF, CVA, MAFF, ASA, managing partner, Williams Overman Pierce, LLP

 

  • Education is the most powerful weapon which you can use to change the world.
  • Nelson Mandela

Thursday, June 21st, 2018

Disruption of the Profession

“The difficulty lies not so much in developing new ideas as in escaping from old ones.” – John Maynard Keynes

Last week, Daniel Hood, Editor-in-Chief of Accounting Today, wrote a great article covering a presentation by Mark Koziel, of the AICPA, at the recent ENGAGE conference in Las Vegas.

Koziel noted that technology is taking us out of our comfort zone. “We as a profession can’t wait for regulation to disrupt us, we need to disrupt ourselves,” he said. “We’re going to take our expertise and interact with our clients in new and different ways.”

Here’s an excerpt:

Among the most important ways the profession will need to change will be to move up from services and activities that rapidly being automated. “Technology could automate 49 percent of current activities,” he warned. “Data processing and bookkeeping have a higher percentage chance of being automated, versus managing others and applying expertise – and that’s what CPAs do: We apply expertise. That’s less likely to be automated. Analyzing and interpreting data is where it’s at – not the low end of data entry,” he added.

Read the entire article here and share it with your partners and team members.

  • The key to success and change management is learning, then unlearning, and then relearning.
  • Mark Koziel, AICPA

Wednesday, June 13th, 2018

Changes To The CPA Exam

“In the middle of every difficulty lies opportunity.” – Albert Einstein

The Journal of Accountancy has a podcast titled, How Tax Reform – and Excel – Are Changing The CPA Exam. It is hosted by Chris Baysden of the AICPA.

Tax reform will have an important impact on many aspects of the accounting profession — including the CPA Exam. In this week’s episode of the podcast, we talked to Mike Decker, the vice president of examinations at the AICPA, about the changes being made to the exam as a result of tax reform — and about how Excel will now be available for use on the test.

What you’ll learn in this episode:

  • How the AICPA’s exams team has gone about collecting feedback on the exam.
  • Why continuous testing could be on the horizon.
  • The timeline for implementing changes due to tax reform.
  • How and why a practice analysis will be initiated.
  • The changes that test takers will see to monitors and software used in the exam.

Here’s a link to the podcast (it’s only 11 minutes long). You need to know so you can advise and encourage the young accountants in your firm to take the Exam and get it behind them!

  • Nothing happens until something moves.
  • Albert Einstein

Thursday, May 31st, 2018

Trends for PCPS Member Firms

“Nobody comes here anymore, it’s too crowded” – Yogi Berra

Want to know what’s going on with small, medium and even some larger firms?

Check out this video from Mark Koziel.

You probably know Mark well, but in case you don’t, Mark is Executive Vice President – Firm Services for the American Institute of CPAs. He leads the Private Companies Practice Section (PCPS), Firm Relationship Management, Small Firms, Diversity & Inclusion, Young Member Initiatives, Technical Hotline and Center for Plain English Accounting.

  • There's a rebel lying deep in my soul. Anytime anybody tells me the trend is such and such, I go the opposite direction. I hate the idea of trends. I hate imitation; I have a reverence for individuality.
  • Clint Eastwood

Wednesday, May 9th, 2018

Profession Update via Melancon

“Attention is a limited resource, so pay attention to where you pay attention.” – Howard Rheingold

Barry Melancon spoke at the BDO Alliance conference this week. Daniel Hood, Editor of Accounting Today communicated many great points from Melancon via Twitter. Twitter is often a great way to learn things – I hope you have a Twitter account and follow @AccountingEdit (Dan Hood) and @CPAmanagement (me).

Here are some of Hoods tweets from Melancon’s presentation. This is IMPORTANT information so you can better lead your firm into the future.

  • For those of you who believe the profession can be insulated from change, that’s a false optimism.
  • Once AI, blockchain, etc. become accepted, they will completely redefine what we think a professional accountant is.
  • Technical skills are table stakes. Finance execs want tech skills, communications skills, and critical thinking/ judgment skills.
  • Technology and the law are changing what tax compliance means.
  • What the world wants now is a combination of tax compliance and tax planning. Tax reform gives us a great opportunity to reposition ourselves this way.
  • The number of U.S. accounting grads hired into public accounting dropped 20% in the last 2 years. But overall hiring at firms was flat – they’re hiring fewer accounting grads.
  • In 2017, a quarter of all CPA firm acquisitions were of non-CPA firms.
  • The digital age in transforming organizations from the traditional pyramid model to more of a diamond, with automation and outsourcing removing a lot of the entry-level staff.
  • We need to start thinking about ‘fat middle’ firms, with more skilled middle-level employees than entry-level staff.
  • In terms of new skill sets, we’re most concerned about mid-career people who need to unlearn what they’ve already learned.
  • The notion of measuring CPE by the hour has to go by the wayside – it’s not about the hours, it’s about the skills learned.
  • The profession can’t say ‘We’re fine.’ No one is, and we’re not exempt. Are we well-positioned for making the changes that go with not being fine? Yes — if we’re willing to change, if we’re willing to take risks, we are very well-positioned
  • The quality of one's life depends on the quality of attention. Whatever you pay attention to will grow more important in your life.
  • Deepak Chopra