Become A CPA

Become A CPA

The CPA Migration: What Got You Here Won’t Get You There

by Sean Stein Smith, CPA | Dec 13, 2016
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The CPA profession is undergoing a radical transformation. That much appears to be widely agreed upon. The shift is discussed at every conference event at local, state, and national levels.

Words like disruption and innovation are working their ways into the accounting conversation to a degree that we didn’t see previously, and this shift will undoubtedly have profound effects on the profession. Whether accountants are employed in public practice, consulting, industry, or research/academia, the proverbial handwriting is on the wall. Simply stating that dramatic changes are coming to the profession is not enough. To effectively adapt to and embrace the coming changes, it is important for the profession to be able to identify areas and competencies that will serve the profession well moving forward.

Areas of Growth

There are several broad areas in the business landscape that appear to be growing and/or changing at an increasing rate of speed—nontraditional reporting, integrating fraud and forensic accounting on a continuous basis, and the growing convergence of accounting and information technology. While there are certainly dramatic changes occurring in specific fields, like finance and healthcare, this article focuses on changes in the business environment that require CPAs to adapt, regardless of the specific industry.

Since the financial crisis in 2007/08, there has been a trend among different stakeholder groups to report increasing amounts of information. Sustainability reporting, information and reporting on corporate governance, and integrated financial reporting are proliferating in the marketplace. Organizations must be able to produce the necessary information to meet these reporting requirements. Of particular importance to accounting is the fact that in order to accurately report this information, one must develop metrics, reporting frameworks and templates. CPAs and the accounting profession are well positioned to leverage existing competencies to fill this market need.

Fraud and forensics, as it relates to both financial and nonfinancial factors, is a critical field of growing importance. Scandals such as the one that recently occurred at Volkswagen illustrate that improvement is still important in quantifying and building data systems and processes. As organizations grow increasingly more complex and international in scope, there is an increasing need to develop systems, checks and balances, and processes to prevent, detect, and investigate irregularities in activity. Embedding forensic tools and preventive items into routine processes and report generation is an important step. It is always cheaper to spot and fix problems internally before they become larger and affect customers, clients, and other stakeholders.

The rapid advancements in technology continue to radically redefine the business landscape. Industry and competitive boundaries continue to blur and, in some cases, disappear entirely. Specific to the accounting field, the ramifications of the growing reach and scope of technology are felt in a quantifiable way. Accounting professionals—whether they are employed in public practice, private industry. or consultative roles—are frequently tasked with partnering in technology projects. Increasingly included on the CPA to-do list are assisting with the implementation of a new enterprise resource planning system, testing new submodules, providing input throughout the assessment and design phase of new systems and reporting initiatives, and in some cases playing a lead role in the configuration and preliminary testing of those systems. Technology will not become less important as time progresses; rather, technology will continue to impact the profession. CPAs have to be prepared to adapt to these changes.

Skills Set of the Future

The accounting field has evolved far beyond merely tracking debits and credits, even beyond preparing financial statements. Organizations, and the way business is conducted, have evolved and changed dramatically. It is important that accounting professionals have the skills to keep pace and remain relevant to the business decision-making process. Drilling down specifically to the three growth areas mentioned, there are specific skills and competencies that should be developed to take advantage of these opportunities.

The foundation of the accounting and finance fields is clearly quantitative analysis, but the expectations of accounting professionals are changing. In addition to expertise on generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS), the abilities to perform data analytics and present the results of analytic testing are increasingly relevant to CPAs. Whether it is a matter of simply running regressions or more complicated software packages laid on top of existing reports, decision makers require quantitative information that is understandable and relevant. With the need to report increasing amounts of quantitative data, ranging from social media statistics to operational figures on electricity consumption, comes the need for improved, more sophisticated communication skills.

As anyone who has ever witnessed a poorly delivered presentation can attest, the best information and data in the world lose their relevance and impact if not communicated clearly. Accounting professionals are not usually known as great orators or writers, but to be involved in the decision-making process, they must be able to articulate and defend their analyses and subsequent positions. In addition to verbal communication, the ability to write effectively is an important skill that is all too often lacking among CPAs. They must eliminate the jargon and focus on linking what they are saying to what the client or manager is trying to discover, address, and answer.

Perhaps the most important skill CPAs will need moving forward is adaptability. This is not to say that the fundamentals of the profession will change in dramatic ways, as debits are still on the left and credits are still on the right. Rather, what this means is that in a business environment that is continuously evolving, CPAs must also continuously evolve. The areas of growth and associated skills identified here are just a small sample of the dynamic changes occurring within the broader business landscape. The biggest takeaway for CPAs going forward is that, as a profession, seeing and understanding that big picture is more important than ever.

Sean Smith, CPA, CGMA

Sean Stein Smith, CPA, DBA, CMA, CGMA, CFE, is an assistant professor at Rutgers University. He can be reached at drseansteinsmith@gmail.com.

Reprinted with permission of the New Jersey Society of CPAs. This article appeared in the fall 2016 issue of  WashingtonCPA Magazine. Read more here.

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