Industry Trends

Evolved Accounting Firms Might Not Be Accounting Firms

Caleb Newquist Editor-at-Large, Gusto 
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December 9, 2021

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Will evolved accounting firms be accounting firms?

I’ve been writing about the accounting profession for a while now, and one thing that it never seems to tire of talking about is change. Change is happening! The pace of change is fast! Change is all around us! We must adapt to change! This is the changeiest time of change that we’ve ever changed! 

It’s not even that change is the only constant; for some, talking about change might be more constant than change itself.

Anyway, here’s another helping of change:

While the accounting profession can be proud of its essential role in helping the country through its recent trying times, that doesn’t mean it can rest on its laurels, according to Association of International Certified Professional Accountants president and CEO Barry Melancon.

“It’s very important that our profession evolve. We can choose not to embrace technological changes and service expectation changes, or we can choose to rethink and to be the actual profession that constantly reinvents itself,” he told attendees at CPA.com’s annual Digital CPA conference, being held this week in Nashville, Tennessee. “Now I know that there are people that you probably go to cocktail parties with who might say the stereotypical typical CPA is not innovative and they’re risk-averse and they’re even really old — you know, the symbolism of the green eyeshade — but each and every one of you actually defeat those stereotypes.”

“Almost everything that we do is in some element of transformation right now,” he added. “And, you know, transformation can be scary, but you can also see it as incredibly opportunistic. We are — you are — in the midst of redefining our profession.”

Yes, yes, we get it. But what I find ironic about all of this change, evolution, and redefinition is that a lot of it has resulted in:

  1. Accounting firms hiring more non-accountants.
  2. Accounting firms doing a lot more non-accounting things.

In other words, accounting firms are starting to look less like accounting firms and a lot more like… something else. It’s not entirely clear to me what that evolved firm is, but what is clear is that virtually none of it requires a CPA and that worries organizations like the AICPA and state CPA societies. 

Which is understandable, given that historically, the CPA designation has inferred a certain cachet. Holders of the designation want that cachet to remain, but lately, fewer accounting graduates have been pursuing the CPA. So does that mean it’s becoming more rare, and therefore, more valuable? Or does that mean it’s becoming less relevant, and therefore less attractive?

The accounting profession’s reading of it is the latter, so that’s why we see things like a redesigned CPA exam in the near-ish future. The profession is playing catch-up while people are innovating here in the present, where change, as we noted, is always happening. And as a result, accounting firms are looking and acting a lot less like accounting firms very quickly. 

“Help wanted” advisory

One of the things we talk about when we talk about accounting firms advising clients on hiring is that, for small businesses especially, there has to be more to it than money for their prospective employees. Smaller businesses can only do so much when it comes to keeping pace with larger employers on salaries and benefits, and that’s going to be even more difficult next year than it was this year: 

​​The average American worker is set to receive the largest one-year pay bump since 2008, according to The Conference Board’s Salary Increase Budget Survey, which estimates the budgets for raises in 2022 at 3.9% next year. That’s up 3% from when the Conference Board surveyed businesses in April.

The jump underscores just how much businesses have had to hike wages as they scramble to attract workers. Hourly wages alone have jumped 4.8% from November 2020 to November 2021, according to the Bureau of Labor Statistics’ latest data release. 

So if you’re working on the assumption that workers will hold out for more pay then that’s not wrong. But then what? Buzzwords and gimmicks will only go so far, and more job seekers are putting their mental and physical health first. How does an employer who can’t raise its wages any further get someone—anyone—interested in their jobs?

I’m not going to act like I have the answer to this; it feels like the kind of thing only an indispensable advisor to that business can uncover. Of course, if you’re that indispensable advisor and you can’t uncover the thing, then I guess you can always double down on the buzzwords and gimmicks. 

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Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.

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