The Illinois CPA Society is hosting its annual conference Tuesday and Wednesday in the Chicago suburb of Rosemont featuring 44 educational sessions and four keynote presentations, including a session on the state of the CPA profession.
That session features ICPAS president and CEO Geoffrey Brown and ICPAS chair and KPMG partner Jonathan Hauser. They talked Monday with Accounting Today about some of the trends they’re seeing in the profession and what to expect at the conference.
“We’re really focusing on the high-level issues that we’re seeing in the profession, hitting everything from the regulatory environment, developments in tax and the impact of technology, all the things that you would think of with technical aspects that are going to be most impactful for individual CPAs and CPA firms,” said Brown. “We also have one of our keynotes focused on running a business in turbulent times. Even though we are somewhat removed in reality from the pandemic, I think the business environment still tends to be a little bit tenuous when you think about all the fears related to inflation, recession and talent. It can become overwhelming for those tasked with managing individual firms.”
Over 700 attendees have registered for the conference, with that number about evenly split between in-person and virtual attendees. Brown is relatively new in his role in leading the Illinois CPA Society, having started about seven months ago, and he will be meeting many of the members for the first time. Attendees will be able to visit sessions targeted at various interests.
“The learning tracks are really focused on tax, personal development and ethics, accounting and auditing, corporate finance and technology,” said Brown. “It’s really those big macro level issues and areas for the profession.”
A hot topic in recent years has been the talent shortage in the accounting profession, and Brown has been hearing about that ever since he became leader.
“In the first 60 days, I probably had 45 meetings with managing partners of firms of all different sizes,” said Brown. “There was a consistent theme, and it was questions and concerns about talent, looking at it from a pipeline perspective, but then also just a lot of concerns on retaining the best people. That’s something I feel has cut through in both the public accounting world and our peers in corporate finance.”
The only area where ICPAS found there isn’t a talent shortage issue is in the nonprofits it surveyed, and the reason is something the researchers will likely explore. To address the talent shortage, ICPAS is updating its 2020 pipeline research report.
“We really do feel like it’s our responsibility, three years removed, to run that again, so that we can update that information in service to the profession,” said Brown. “In keeping with what we’ve heard from managing partners and others in the field, we have some retention research in the field right now. We hope to release that later in the fall, to highlight some of the things that we’re hearing related to that issue.”
“There are some macro trends that are definitely influencing not only our pipeline, but other professional pipelines like engineering and lawyers,” said Hauser. “From an accounting perspective, you’ve had all kinds of changes with guidance coming out from the SEC and FASB with new pronouncements from an accounting perspective. Tax reform back in 2018 and now the latest round of changes have added a ton of complexity. You’ve got declining enrollment in colleges and universities across the board, not just in accounting. You’ve got a confluence of factors really just causing a very complex situation to come about with the pipeline. Folks are looking for a silver bullet, but I don’t think one’s out there. It’s going to take a combination of a lot of potentially creative solutions to come up with a way that makes accounting appealing and rewarding, and then makes it an opportunity that people can see as a long-term career path.”
Brown is hearing about increased competition for talent, especially from larger firms luring employees from smaller firms. “When I meet with smaller firms, they’re talking about the fact that their best and brightest used to just leave for corporate finance, but now they’re getting snatched up by firms across the country, because they can work virtually,” said Brown. “It doesn’t look like there’s any chance of that slowing down. It’s just putting a lot of pressure on firms of all sizes. The workforce is highly mobile these days. Even when you hear about some firms doing reductions in force, there’s still a lot of opportunity for movement. We just want to highlight what are some of the best strategies that firms and corporate finance teams can employ. What are we hearing from those individuals that have made moves? Why did they do it? What were they looking for?”
A desire for higher compensation didn’t always motivate them to switch jobs. In many cases it was the need for more flexibility and responsiveness from their workplace and the opportunity to work remotely as they did during the pandemic.
Like other state CPA societies, ICPAS is experimenting with ways to make the number of required credit hours more flexible than the standard 150 hours before a candidate can take the exam or earn a CPA license.
“Everything’s on the table right now,” Brown said. He pointed out that a lower 120-hour requirement to sit for the exam became effective Jan. 1, 2023, and there are plans underway starting Jan. 1, 2024, to expand the exam window to 30 months.
“We’ve got preliminary approval from our board of examiners for that, and then it’s all about stepping back and saying what can we do from an alternative pathway perspective,” said Brown. “One of our guiding principles is to make sure that we don’t do anything to disrupt the delicate model that exists within the CPA profession. But we know that the traditional pathway of 150 hours and eventually licensure may not be what takes us into the future, so we would be remiss if we didn’t have some conversations and dialogue internally, but then also with all the audiences that we work with, like the academic community. They are a primary participant in any dialogue related to alternatives to educational requirements or work experience requirements.”
During conversations with firms, the idea of an apprenticeship model or of experiential learning seems to be attractive to firm leaders. “There’s definitely a value add to getting someone as close as possible to the end of their academic experience working in a firm so that you can shape and mold them in an appropriate fashion,” said Brown. “It increases their developmental pace, especially when you think about coming off of a couple of years of pandemic hybrid work.”
Some firms may want to follow the lead of Chicago-based BDO USA, which announced plans last week to create an employee stock ownership plan as one way to entice and retain talent (see story).
“If there’s one thing I picked up in seven months is the fact that no good idea goes unnoticed,” said Brown. “Firms that are in a position to make a dramatic change like that could potentially follow suit. I personally think it’s a little too early to say what the net effect of that is going to be.”
He pointed out there are some tradeoffs with such a plan and where the funds are coming from, whether from a 401(k) match or other sources.
“Accountants by nature are conservative,” said Hauser. “We’re a little bit slow to jump into the deep end of the pool on a new idea without letting it get tested and tried. It’s very bold and exciting to see what BDO is doing. However, I think a lot of other firms will sit back and say, let’s see how it goes, and at the same time look at the alternatives for how to provide additional options to employees to make their firm appealing and rewarding to attract the talent that they’re looking for.”
ChatGPT and AI
He and Brown don’t believe young accountants will need to worry about being replaced by generative artificial intelligence programs like ChatGPT and Bard.
“Just from talking with members of the educational community, we’re hearing from them that they’re already adapting their coursework to teach young students that this is how you could potentially leverage those opportunities once you’re actually working,” said Brown. “I think it will create efficiencies.”
“I think the key there is, it’s another tool,” said Hauser. “The accounting industry has done a tremendous job of finding ways to implement tools to provide better efficiency, and then turn attention to higher value-added services. One thing we will probably see with AI coming more and more into the focus area on the radar screen is some new services that accounting firms can provide to their clients using that AI and the technologies that are being developed each and every day. Those are going to be the attractive things and the value adds that the firms can provide to clients that will help them see the value that they’re being provided. For the younger generation, it gives them more exciting things to be working on other than just filling out a tax return.”
DEI initiatives
ICPAS also plans to continue doing research on expanding diversity in the accounting profession, despite cutbacks in parts of corporate America on diversity initiatives and a backlash in some states against diversity, equity and inclusion programs.
“At this point, we don’t have any plans to change anything that we’re doing from a DEI standpoint,” said Brown. “A lot of our research is focused on what’s happening within the state of Illinois and the state of Illinois is definitely different than in some other parts of the country,” said Brown. “Right now our focus is on operationalizing some of the things that we learned from our most recent diversity report that came out last fall. We do have a couple of new programs that are coming online later this year. There was some valuable intelligence in that last diversity report, Uncovering the Barriers to Success. What we want to do is make sure that we’re giving individuals from a diverse background the opportunities to be successful by being responsive to some of the tidbits of information in there about their experiences once they land in a firm.”
He noted that the report recently earned some awards, including from the Trade, Association, and Business Publications International (TABPI), which recognized the publication in its 20th annual editorial and design awards program, the Tabbie Awards. TABPI honored the report with the Bronze Award for Diversity & Inclusion Journalism, and it was recognized in Graphic Design USA’s 60th anniversary Inhouse Design Awards, winning a 2023 American Inhouse Design Award in the DEI Communications category.
“That speaks to how important this is for this organization and the firms in the state of Illinois,” said Brown. “But we do need to keep an eye on this, because we have firms that have footprints outside the state of Illinois. If there’s a national policy conversation that’s going to drive how they make investments here at home, then we need to be able to be responsive to that. But at this point, we’re not going back and not changing course. In fact, we’re bringing some new things online for the benefit of our audience. It’s the right thing to do. We still need to move the needle when it comes to diversity in the CPA profession. The numbers don’t lie.”
“We need to expand the opportunities across all different spectrums in making sure that accounting is viewed as a great alternative for a career path,” said Hauser. “I think DEI plays right into that as one of the strategic areas that we need to be thoughtful about. How do we open that door for more and more people?”
Several weeks ago, ICPAS held a meeting of academic department chairs from around the state and heard from them about the need to provide more acceptance for neurodivergent employees. “That’s just a good reminder that diversity, equity and inclusion issues go beyond just the things you can see,” said Brown. “It could be a good opportunity for us as a profession if we can create suitable spaces and homes for those individuals.”
Concerns about sustainability standards are also percolating at CPA firms. “You’ve seen the international standards, and now I think everybody’s waiting to see what the SEC is going to do in terms of what’s going to apply here domestically,” said Brown. “That’s really driving the conversation.”
“The standards are key, and then the other really difficult thing is the data that’s going to be needed to help deliver on those standards,” said Hauser. “There are a lot of disparate places where all that information sits in an organization today, and the question is, how do you efficiently and effectively gather that data in a way and be able to report on it in a manner that the regulators are asking for?”
The ICPAS is working on numerous initiatives as its summit gets underway this week.
“It’s an exciting time for the society and for the profession,” said Brown. “I think we’re in a good place. We’ve got great volunteer leadership, great members and a great professional team. We’re really looking to carry forward on our strategic initiatives around pipeline, community and education.”
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