What we need is a television show about accountants. We have all these shows
about attorneys that glorify the legal profession. And actually there are a
lot of attorneys out there who need jobs. But the accounting profession really
needs people, Amy Mees, a manager with Arthur Andersen LLP, says, only half-joking.
We should have a TV drama with good-looking guys and adorable girls who are
all these dynamic people. Something to change our image.
The world probably does not need another miniskirted Ally McBeal turned certified public accountant, but even CPAs admit that the stereotype of their profession is a geek in a green eyeshade, according to Lee D. Wunschel, whos with Lublin, Sussman, Rosenberg & Damrauer in Toledo. Wunschel is also chairman of the board of The Ohio Society of Certified Public Accountants (OSCPA).
The bean-counter image aside, accoun-tants traditionally have been viewed as valued and reliable sources, according to J. Clarke Price, CAE, president and CEO of OSCPA. Perhaps because of their independence but more importantly because of the in-depth involvement they have in the day-to-day decisions that determine the profitability of a company, CPAs are more than just resources that help determine what your bottom line is. They help to grow your business.
That involvement, along with the ever-increasing number of services accountants offer, is changing the way the public perceives the profession. So much so, that the very name of the career may, for some, change from accounting to professional-services firms, and accountants may become business advisers, according to professor David R. Campbell, chairman of the accounting department at Case Western Reserve Universitys Weatherhead School of Management.
Currently there are some 330,000 accountants nationwide in individual practice, business and industry, government and education; in Ohio, about 21,000. According to OSCPA, 48 percent work for corporations or in industry, 42 percent in public practice and 3.5 percent in education and government, and 6 percent are retired. Almost all are facing changing demands in the profession, Price says.
The changes certainly have affected large accounting firms. Accounting and auditing were and always will be the most important functions of the Big Eight, now the Big Five. Thats what they were founded on, John M. Bava, office managing partner of the Northeast Ohio Practice, Deloitte & Touche LLP, says. Now, he thinks, the profession is moving into broader business and financial consulting.
Changes in the profession mostly have been steady and gradual over the past 100 years, but several factors have accelerated the process more recently. And those differences will continue to influence not only accountants and their clients but all kinds of businesses, as well. The major catalysts include the changing needs of clients, advances in technology, competition from other professions for market share and the push for specialization in the field.
In 1998, the American Institute of CPAs (AICPA) undertook an ambitious self-evaluation called the CPA Vision Package, with a goal to propel the profession into the future. In a published account of the project, the AICPA used a quote by hockey sensation Wayne Gretzky to illustrate its philosophy: I skate to where the puck is going to be, not where it has been.
This year, AICPA members will start the process of determining what it takes to achieve the vision carved out by the one-year project, Price says. He expects five core services to play a major role in the professions future.
The first is assurance, providing a variety of services that improve the quality of information for decision makers, according to AICPA literature. Assurance services is one area in which CPAs can take their expertise, integrity, objectivity and ability to evaluate information and apply it to new concerns, says Ray G. Stephens, a KPMG accounting professor at Kent State University and a senior academic fellow for the auditor of the state of Ohio.
The WebTrust is an assurance service that CPAs can provide that attests to the credibility of information presented online. The WebTrust has been likened to the Good Housekeeping Seal, but it really is a very vigorous process, Wunschel says. And no more than 90 days can go by without having to have the site re-examined. So its always a fresh seal.
Eldercare is another assurance service CPAs now provide. Under Eldercare, accountants determine whether objectives and criteria for care of the elderly are being met. There has been some push for accreditation in both Eldercare and the WebTrust specialties that would help distinguish CPAs in these areas from others providing similar services.
Specialization is also important in a second core service, financial planning, which includes a variety of services from tax planning and financial statement analysis to structuring investment portfolios and complex financial transactions, according to the AICPA.
About nine years ago, Arthur Andersen and the other Big Five really needed to get their people to start specializing, especially in the consulting area, Amy Mees says. It was a risky thing to do because no one really knew if it was going to take off.
Four or five years ago, we realized the area was big, and now its gone one step further: We talk about service lines within each tax area. Now all I do is restructuring in order to save companies state and local taxes. That parallels all the other areas, from individual taxes to international taxes. Things have become extremely specialized, but its also exciting, because instead of being a generalist, you are very good at the one thing you do.
The third core service is technology providing services in application, systems analysis, information management and system security. But technology isnt a one-way street, and as Price predicts, it will also change the face of accounting as we know it, particularly as accounting software improves.
The person who used to turn to a CPA for tax advice may now be using TurboTax, Kiplinger or some other program, Price says. And thats fine. What that means now, however, is that some CPAs can provide a new service by telling someone, You choose the program you want, and Ill sell you a half-hour of time to review it. QuickBooks is another popular program that smaller businesses use for their financial statements. Before such products, they might have turned to a CPA. Now the CPA can review the work or step in wherever necessary, Price adds.
He warns, however, that at least at this point, intelligent software hasnt reached the point where you can put in all the variables, and it will spit out: Here are your choices ranked one, two and three and the financial ramifications of each. Companies still need to turn to a professional for that.
And what about those expensive, glossy annual reports that may be outdated at the moment of publication? Because of technology, auditing will become, rather than an annual process, a daily or hourly one, Price says. And CPAs can attest to the reliability of an updated Web site. What good is it really to look at a companys annual report? I have my Web browser set up for five individual stocks a couple I own and three Im watching and considering investing in. Im tracking them on a regular basis, and more and more people will be doing that. The traditional audit is transforming.
Management consulting is another core service: providing advice to organizations on management and performance improvements. Although some kinds of consulting have always been part of the profession, it has only been in the past
10 to 12 years that accountants have highlighted the service, according to Campbell.
Arthur Andersen really took the lead in pushing the envelope in this area, Campbell says. Now all firms have substantial consulting capabilities, and as a percentage of their revenue, consulting has been rising for quite some time.
The fifth core service is international services, providing expertise in cross-border tax planning, multinational company mergers and joint ventures. Just as in any profession that is going through major changes, there is always the concern that it may take the wrong track.
As accountants move into more insurance and tax advice, for example, some people are expressing concern about the perception that they may be virtually practicing law. Because there exists a natural connection between some kinds of professional business advice and legal knowledge, Mees, for one, says she would not be surprised to see accountants engage in more legal responsibilities in coming years. Though such a change would be controversial here, European accounting firms, she notes, already do some legal work.
Another area of controversy has been some accounting firms practice of selling investment products, a practice that raises the question of their maintaining independence.
In Ohio, for example, CPAs are not allowed to accept commissions and contingencies, because some in the field feel that creates impairment of independence, Wunschel explains. But its really a personal choice of the CPA, and I think it depends on what type of services they perform.
In my firm, our primary focus is audit practice and accounting services and tax preparation for the IRS. We have made the decision at this present time that we dont want to sell investment products, because we have a fear that would create a feeling that we may not be as independent with our clients. Many practices, though, have done so. Its really a philosophical question among CPAs and what they are comfortable with.
As the services of the accounting profession change, so do the professional requirements. Starting in 2000, a 150-hour requirement will be necessary
to take the CPA qualifying examination. (Some schools, including Kent State, have opted for a masters degree program to fill the mandate.) The exam itself may be computerized by 2001, a change that would enable candidates to take it virtually whenever they wish.
There is tremendous opportunity in this profession for anyone with good analytical and communications skills, Wunschel says. Traditionally the CPA has been seen as a numbers person, someone with strong mathematical capabilities. But the real skills that will be needed in the future are a broad understanding of business and the ability to talk to clients and employees.
People are our most sacred resource, Mees, who has degrees in psychology and accounting, agrees. Were looking more and more at people who can build relationships.
Mary Eileen Vitale, of Howard, Wershbale & Co. and a board member of the OSCPA, also believes the profession has changed for women because of the flexibility of hours and the opportunities that have recently marked the profession. Women can now stay in the profession longer, particularly in the public sector of the profession, Vitale says. Eight or 10 years ago, a lot of women left the public sector once they had kids. Either they quit or they went into industry with more regular hours. But accounting firms have allowed the changes because they needed women.
Business advisers of tomorrow will be even more creative than in the past,
Mees says, balancing traditional methods with unconventional approaches to business
and meeting the challenges that lie ahead.