In the past year (2018), have you noticed any trends in practice at your firm/organization? For example, changing workloads; challenges in recruitment, retention, training, promotion, exiting; the outsourcing of accounting services; shortages of staff; difficulty recruiting experienced professionals; tapping into retirees?
We have noticed that recruitment and retention remain a big challenge for small firms. For various reasons, it is difficult to recruit qualified employees with four to five years’ experience. After entry-level personnel are recruited and trained, the employees routinely move on to the next stage in their careers. This makes it difficult for small firms to grow and build a pool of experienced personnel. In addition, some colleagues have noticed an improved quality in staff members who routinely exceed minimum continuing education requirements.
Firms are also tapping into additional training and using technology to better serve clients. We see that clients’ use of numerous simplified “software as a service” accounting programs has allowed for additional scope of services. Accounting apps cannot do it all, so we are spending less time providing traditional transactional services and more time delivering advisory services like tax planning, business insights, big data analysis, and regulatory compliance.
According to the 2018 Rosenberg Survey, the percentage of women partners continues to grow very slowly (especially at large firms) and continues to lag the percentage of staff. Anecdotally, what evidence have you seen of this (or that contradicts this)? What explains the challenges the profession faces in achieving greater gender parity?
It is rather disappointing that gender parity in the profession, at the partner equity level, is increasing at a snail’s pace. Many firms are making progress, but we need faster growth in this area. With adequate representation at different levels along the pipeline, progress should be more forthcoming. In addition to mentorship and other programs, we need more men to sponsor more women, and we need more women to be extra responsive in making their partnership ambitions known. This could involve working with firms to create a partnership development plan. The fact that a woman may take a break mid-career—or at the top—to build a family has been used to explain the partnership gap. Why? In today’s world, flexible work arrangements make it easier for both men and women to nurture their families while continuing to build their careers. It points to a lack of development planning. It might help if firms ensured that enough challenging work is available to anyone raising a family on a flex schedule, thus allowing for continued professional development. Timely and adequate reviews are required to ensure that women are not negatively penalized for utilizing flex arrangements.
Could you talk about what you’ve seen in the past year (2018) in terms of new practice areas, new regulation, legislation headaches, and new emerging areas of growth?
In the past year, due diligence areas have become more intrusive. While many clients initially resisted complying with the provision of driver’s license data for New York, they have become resigned to what is perceived as intrusion of privacy.
With new regulations, from tax reform to the implementation of Topic 606, “Revenue Recognition,” continuing education is more important than ever, and the services of a CPA will become more, not less, in demand.
What concerns do you have about the professional marketplace? Do you think there has been a dilution of the profession, or of the value of the CPA license?
Many colleagues do not think the profession is being diluted; however, we could be at the beginning stages of such a transformation. Although one does not have to be a CPA to perform many accounting services, some state legislatures are laying the groundwork to remove what is being perceived as a barrier to earning a living: the credentials of the profession. We should be proactive against bills such as the one introduced in Louisiana this year, the Right to Earn a Living Act.
Some CPAs are also concerned about the AICPA’s decision to allow non-CPAs to gain the Accredited in Business Valuation (ABV) credentials. The AICPA’s view, however, is that the change will elevate the entire valuation profession, as these professionals will also have to adhere to AICPA’s code of conduct, continuing education, and other requirements.
With so many areas of service to navigate, the value of a CPA license is solid.
Further Views on Diversity and Inclusion
Orumé Hays: We are very interested in the progress—or lack thereof—that the profession is making in bringing underrepresented minorities, such as African Americans and Hispanic/Latino Americans, into the profession. The dropout rate of minorities who have passed at least one part of the exam is highest among nonwhites, and it takes five years longer for a black woman to become a CPA than a white male. What are your thoughts in this area?
J. Michael Kirkland, CPA/CGMA, former NYSSCPA president and president of the Accountants Club of America: I believe the value proposition—that is, the career and job opportunities—of the profession must be laid out and reinforced continuously to minority CPA candidates, clearly providing evidence that a CPA designation will make a huge difference in their lives, careers, and financial success. Minority CPA candidates are generally the first in their families to go to college and to consider becoming a CPA. There are no role models within their families to reach out to for advice. In many situations, their families are unaware of the CPA designation and the wealth of opportunities that being a CPA can bring. I believe it is critical that success stories and mentors are provided to minority CPA candidates, students (junior high and high school), parents, and guidance counselors.
Hays: What are the barriers to entry? What is the perception of the profession among minority CPA candidates?
Kirkland: The barrier is that underrepresented groups are unaware of the wonderful and amazing opportunities that are available to CPAs. Another barrier is the cost of becoming a CPA; thus, efforts must be made to communicate the available financial support, including scholarships. One key is increasing the availability of financial support and scholarships to CPA candidates.
I believe there is a clear need to increase the outreach to secondary and high school students and their parents and guidance counselors, informing them of career opportunities and earning potential of a CPA. Guidance counselors should be made aware of the financial support and scholarships programs, as well as the various AICPA, NASBA, NYSSCPA, and affinity groups (NABA, ALFA, and Ascend) programs, such as mentorship, financial support, and scholarships.
Hays: Women CPAs are leaving firms due to work-life balance; why is it that some firms have significantly increased women partnerships, reduced turnover, and increased job satisfaction while the dropout rate of the big firms remains staggeringly high?
Kirkland: To me, it is clear and simple: some firms have made the commitment to create an environment where women—and by extension, other underrepresented groups—feel comfortable and feel that they are an integral part of the organization and its success. Accordingly, women and underrepresented groups are willing to commit to the firm.
I am aware of the various efforts the big firms are making to achieve the same result. It will take time and effort to build the pipeline. We must monitor their progress and, where we can, it is imperative that we provide assistance.