Introduction
Evolution is synonymous with the CPA profession, with significant changes experienced towards the end of the 20th century and into the 21st century. There have been more new opportunities and challenges for the CPAs including new markets, technological change, demographical change as well as advancement in the educational framework. The profession is also experiencing an influx of non-accounting competitors and diversification of the traditional CPA roles. This has meant that the way of doing business in the profession is ever changing and thus requiring CPAs to always strive to keep up-to-date with the trends and issues emerging. The 21st century consumer is at the heart of the paradigm of change and opportunity in the CPA practice.
The Constant Change in CPA Practice
Certified Public Accountant (CPA) refers to a qualified accountant in the United States who has passed the Uniform Certified Public Accountant Examination and has met all additional state educational and experience requirements necessary for certification as a CPA (Olaka, 2007). The primary functions of a CPA relate to financial audit services or assurance services, which entails attesting to the adherence to GAAP, soundness of disclosures, and freedom from material misstatement (Garner et al, 2008). In the private sector, CPAs are often employed to oversee finance functions under such titles as finance manager or Chief Financial Officer (CFO). CPAs also undertake public accounting functions.
The evolution in the educational framework for CPA practice is evolving dramatically so as to keep pace with the substantially evolving dynamics of the profession, business, and government among other related fields. The evolution mainly touches on the learning content of CPAs and how they learn it. While technical accounting knowledge continues being a foundational requirement, it is no longer sufficient as the need to develop other vital skills as problem-solving, leadership, communications and other interpersonal skills get entrenched in the CPA practice (Carmichael et al, 2012). In this regard, CPA practice is no longer all about technical accounting.
Traditional accounting knowledge continues to be supplemented by other broader business knowledge which encompasses finance, economics, as well as technology. With increased globalization, success in the CPA practice requires that professionals gain more knowledge relating to the international marketplace (Gilbertson et al, 2011). Earning and consequently upholding the trust and confidence of the client is now premised on the ability of CPAs to both demonstrate great competence and high commitment to excellence, and knowledge of business together with the evolving marketplace. The accounting and financial professionals today not only have to be in tune with their clients, employers and business, but also sharpen their adaptability skills necessary for evolving services to meet changing priorities (Garner et al, 2008). Finding the appropriate solutions to the challenging and complex business problems in the globalized world now requires CPAs to leverage their core skills of critical thinking and problem-solving and working together with professionals from different disciplines.
In the same vein, CPAs are also obliged to keep abreast with changing regulations and standards domestically and abroad. The CPA practice is poised to face increased complexity as a result of varying standards and customs around the world (Carmichael et al, 2012). This requires for modern-day CPAs to be equipped with skills and knowledge on how to effectively navigate through different business challenges and communication challenges whilst maintaining highest standards and ethics identified with the CPA practice. The need to sustain a strong positive reputation for the CPA practice is currently higher due to increased globalization and CPAs have to be more vigilant in order to avert compromising of ethics and standards along with instances of fraud (Garner et al, 2008). The integrity threshold is particularly high where CPAs work in different countries subscribing to differing ethics – maintain high standards and upholding integrity is more challenging for CPAs today as a result. The need to maintain a positive image among other financial and accounting professionals, clients and the general public has seen members of the CPA profession increasingly undertake proactive efforts to market and reinforce the value of the profession to clients and the public. On the plus side, nonetheless, the increasing complexity of international trade has presented CPAs with golden opportunity to be leading experts in all financial aspects (Gilbertson et al, 2011). However, this has placed a demanding requirement on CPAs to aggressively market the value and quality of their services so as to not only expand but also thrive globally.
The proliferation of mobile technologies and the Internet has afforded CPAs with the chance to undertake learning wherever and whenever it is needed. Unlike in the past where CPAs were limited to scheduling classes in advance or arrange for self-study manuals, currently they can identify a need and instantly seek an available podcast, webcast or seminar and participate without having to leave their desk (Carmichael et al, 2012). The evolution has also enabled consumption of education in smaller, more digestible increments as opposed to spending much time in a physical class. The learning is possible in smaller targeted segments. This real-time learning in the workplace has therefore considerably change the way of learning for CPAs, in addition to helping them adopt and adapt rather fast to the ever-changing circumstances.
In the current business climate driven by technology, success in the CPA practice requires of the professional to both comprehend and leverage technology together with core CPA competencies so as to offer superior services. The increasing proliferation of mobile technology along with faster networks has meant that people are expecting constant up-to-date information without the limitations of space and time through greater transparency. This is requiring financial reporting to be relatively faster, and ultimately, delivered in real-time (Gilbertson et al, 2011). Not only does these require CPAs to do their work much faster, but also create the potential for hard-to-prevent/detect errors and fraud particularly in the process of creating information. For instance, the history characteristic of paper documents is lost with the quick modification of electronic documents.
CPAs are also currently facing growing challenge of information security and privacy because of the activities of hackers and those with malicious intent. Today CPAs have greater burden of staying vigilant to ensure data is captured and managed more properly and safeguarded from malfeasance (Magill et al, 1998). This has the CPA practice is uniquely positioned to come up with revolutionary ways of keeping financial information reliable, accurate and confidential as was the case in the olden days. Generally, CPAs today have to stay abreast, embrace and utilize technology for their benefit to provide greater efficiency together with expanded services.
Technology is also considerably redefining the job description of CPAs in the sense that newer, cheaper and more powerful software is enabling businesses and individuals to automate most activities. This has translated in elimination of some traditional CPA services, but also creation of opportunities for the practice to drift to more value-added services in line with the changing needs of employers and clients (Gilbertson et al, 2011). CPAs have more opportunities to improve on their core competencies in analyzing, assuring as well as protecting information to offer advice and useful counsel to enable businesses and clients to use technology in better way.
Furthermore, technology is substantially changing the way businesses and clients interact with each other in corporate environment. The conventional face-to-face meetings are fast being succeeded by conference calls, which are themselves evolving to video conferences (Olaka, 2007). Similarly, letters are paving the way for emails which are in turn being given a run for their money by text messages. Of greater impact, though, social media is ever more blurring the boundary between business and personal, in addition to social media rapidly emerging as a reliable marketing imperative to challenge the website (Carmichael et al, 2012). Further, the office is emerging as anywhere having an Internet connection as opposed to a specific place. All these are impacting on the CPA practice is rather significant ways as CPAs are more and more offering services to their employers or clients from anywhere in the world.
In a world environment characterized with increasing connectivity and interdependence, the CPA is evolving into a premier designation of the accounting and finance profession (Dauber et al, 2012). The profession is in a time when it is highly crucial for CPAs to be up-to-date with global business trends and issues. This is especially the case increasing globalization continues to present numerous opportunities for the CPA practice to venture into new markets. On the flip side, however, globalization also presents such major challenges as increased competition for CPAs domestically and internationally (Gilbertson et al, 2011). The rapid technological change provides U.S.-based businesses and organization to conduct business activities overseas, while also allowing new abroad competitors (which may include non-CPA accounting professionals, to access the U.S. market. As a result, there is increased outsourcing of business processes and accounting services. With the growth of the CPA designation, organizations and businesses will be able to seek workforce from a global workforce.
The evolution of the CPA practice has also meant that professionals are increasingly building on their core competencies and diversify the portfolio of services they offer. It is becoming commonplace for CPAs to contribute to larger extents on corporate responsibility reports, developing business strategies, leading risk management & sustainability efforts; evaluating the spending of revenue on local, state, and federal programs, leading consultations on technology solutions among others (Magill et al, 1998). More and more CPAs are also venturing in such unconventional areas as data security specifically financial information. Their role as assurers of financial information also has room to be expanded into other responsibilities such as corporate responsibility, business reporting and environmental compliance.
The role of CPAs in financial services is fast taking shape as more and more employers and clients entrust them with the major financial functions traditionally performed by stockbrokers, bankers, and insurance agents. In fact, an increasing number of conventional financial services firms are taking advantage to offer accounting and tax services in order to have the needs of their clients met in one place (Dinsmore & Cabanis-Brewin, 2011). On the other side as well, small and medium size CPA firms are also seeking strategic alliances with financial services companies. This has a trend in the 21st century where a CPA operates as part of team consisting of other professional with expertise in such areas as insurance, investments, estate planning, and retirement planning.
The growing nature of CPA services is also presenting opportunities for its professionals to choose to specialize. These specialized offerings are those that go beyond aiding businesses and clients to cope with the rapidly expanding regulatory requirements (Magill et al, 1998). This is also providing CPAs with more opportunities to amplify their value to employers and clients through greater guidance and insight.
The CPA practice is also ever-changing to respond to the changing demographics in terms of changing family structures, diversity, and increasingly international communities, among other demographic changes in the society. The increasing convergence of Baby Boomers and Generation X and Generaion Y and Millenials is having significant transformational effects in the workplace (Dinsmore & Cabanis-Brewin, 2011). CPAs today have to be innovative so as to effectively meet the different needs, wants and work styles of the different generations.
Great changes are also being experienced at the workplace as the young generation come with their own priorities. Younger CPAs are after greater work-life balance, increased technological innovation and integration, as well as meaningful learning and growth opportunities. These younger CPAs are able to leverage their superior technological skills in the rapidly evolving marketplace. However, in order to retain the younger generations, firms are being forced to adopt flexible work arrangements as well as embrace work-at-home options. Furthermore, there is growing need to continue supporting and enhancing programs targeted at building awareness of the CPA practice to younger generations (Dinsmore & Cabanis-Brewin, 2011).
As relates to older CPAs, they have major concerns over the weakening traditional commitment to business/client needs and relationship-building. In order to create harmony between these two different group of CPAs, firms are seeking to create opportunities for the young to learn from their more experienced colleagues while the older CPAs learn to be more tech-savvy from the younger generation (Dauber et al, 2012). Firms are also employing different techniques to remain competitive in the current rapidly evolving environment. In addition to evolving training, CPA firms are doing much to integrate real-time, technology-based education with the conventional in-person training along with on-the-job training so as to maximize the learning experiences of their CPAs (Dinsmore & Cabanis-Brewin, 2011). This is crucial considering the growing need for CPAs to make a distinction between their training, talents and expertise from those others in the increasingly flooded marketplace locally and internationally.
In terms of diversity, employers are increasingly faced the new challenge of designing programs to encourage the professional growth and development of the many women and minorities joining the CPA practice (Dauber et al, 2012). There is also greater focus on cultural awareness and foreign languages so as to increase the ability of CPAs to work in other countries.
Conclusion
The CPA practice is evolving in significant in the current globalized, ever-changing business environment. Many roles have emerged for the modern-day CPA in addition to the traditional roles of preparing financial information for decision-making, auditing the fairness of financial information, and assisting businesses and clients in meeting their regulatory and tax-reporting requirements. Rapid technological change has rendered information preparation and its dissemination relatively inexpensive and faster. Today’s CPAs are full members of the management team as opposed to their previous place as sources of financial information for decision makers. Going forth, the pace of change in the CPA practice is bound to accelerate, presenting more opportunities and challenges for the practitioners in the field.
References:
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