In the past year (2019) have you noticed any trends in practice at your firm/organization? For example, changing workloads; challenges in recruitment and retention, training, or promotion; outsourcing of accounting services; staff shortages; or tapping into retirees?
The profession is using artificial intelligence (AI) to increase productivity. We are a micro-small firm, so our challenges are different from larger firms, which I imagine face a tight labor market fueled by a strong economy. Perhaps AI can help these firms mitigate the impact of scarce staffing resources.
Tax-centric firms often have significant seasonal staffing needs. Smaller firms often prefer to hire experienced staff because it is difficult to justify the time and expense to commit to and train full-time inexperienced staff. But hiring experienced staff is a challenge, and it is difficult to “tap into retirees.” I suspect retirees are in demand, but I have found they are generally happy being retired, do not need the money, and do not want the hassles or stress of working at a CPA firm. I have found they prefer to stay busy and engaged, but view volunteering as a better option than preparing tax returns.
According to the 2019 Rosenberg Survey, there is a huge divide between the age of partners and professional staff. Have you seen the same? Do you think this has an impact on retention?
I see an interesting representation of the age of some practitioners during seminars. It is not uncommon for me to be one of the younger attendees, especially in a personal tax seminar. It makes me think there are many highly capable, experienced sole proprietors who have great businesses, but I question whether there is a viable transition strategy for an internal employee to take over when a more experienced practitioner is considering retirement.
I believe this dynamic creates opportunity for a younger CPA. If an age gap exists, one “key” is to consider how attractive it is for a younger staff member to become a partner versus an alternative career path. In larger firms, there are sometimes opportunities to go to work for a client, and there are often enticing offers that may include equity. Then the CPA has a choice of instant equity versus the future possibility of equity in the CPA firm.
It is thus critical to make the profession an attractive option when compared with other alternatives, such as working in private industry. It is impossible to understate how important it is for a firm to know what is most important to its professional staff. Is it a career track? Work-life balance? These are important questions to ask, and even more important questions to answer.
Can you weigh in on what you’ve seen in 2019 in terms of new practice areas, new regulation, legislation headaches, and new emerging technologies and practice growth areas?
The changes introduced in the Tax Cuts and Jobs Act (TCJA) benefited most of our clients, but since the payroll withholding tables “priced in” the tax savings to taxpayers’ paychecks, some clients did not receive the refunds they had anticipated. Some clients did not realize they actually paid less in taxes because of the psychology of a receiving a lesser refund or even an unexpected balance due. Although this did create some angst, it was noteworthy that the IRS offered some relief by expanding the safe harbor relief for underpayment penalties.
One legislative headache that continues is the issue regarding qualified improvement property (QIP). When the TCJA was proposed, QIP was intended to have a 15-year life, which would have made it eligible for bonus depreciation. There was a drafting oversight, however, and the proposed technical correction is currently stalled in the House Ways and Means Committee. Unfortunately, some businesses made investments predicated on the preexisting (and anticipated) law that would have allowed for faster recovery pre-TCJA than post-TCJA.
What concerns do you have about the professional marketplace? Do you think there has been a dilution of the value of the CPA license?
My biggest concerns about the professional marketplace (in no particular order) are 1) the role that the fear of litigation plays in the profession, the overall business environment, and its related ramifications/requirements; 2) the impact of artificial intelligence and robotics on CPAs (both as a threat and an opportunity); and 3) the aging population of small practitioners.
I believe in the value of the profession and the CPA license. The CPA certification is difficult to achieve, and its prestige must be diligently maintained.
How would you counsel high school or college students about careers in accounting?
I would counsel a student considering public accounting that the three most important things are as follows: 1) get your license; 2) get your license; and 3) get your license.
I say this because I believe the CPA designation is important. It can be a differentiator, and the experience gained working as a CPA in business can be fundamentally important to a current (or future) employer.
I had this exact conversation recently with a senior in college who was considering working for a Big Four CPA firm after graduating with a degree in accounting. I mentioned it would be hard work but emphasized that the sacrifices, the experience, and the CPA designation would be worth it long-term.
Do you find your work satisfying? Valuable? Meaningful?
The most satisfying part of the work is the relationships. This is especially true when a CPA goes beyond compliance to add value or establish great relationships with clients. Still, compliance is critically important, and it can be rewarding when you hear, “Thank you.” The biggest compliment is the loyalty of clients.
Historically, CPAs were responsible for protecting the public, ensuring the integrity of financial statements for all stakeholders. Do you think this is still the CPA’s role? Is this still a critically important objective?
In the post-Enron era, it is difficult to know how the stakeholders view CPAs. Nevertheless, I do believe the CPA’s role is still valued and that there is a level of trust and integrity.