The permanence of change in accounting

Time passes, and things change.

Confusingly, the certainty that nothing is permanent is one of the few things that will be true forever, and the truth that most things are writ in water may as well be carved in stone.

Things change, and how you think of them has to change as well. Things that don’t work now may improve — or go away entirely.

Take artificial intelligence: It can be easy to dismiss now because it is subject to hallucinations, and it writes mediocre copy, and it doesn’t know everything. But all that will change: AI will stop hallucinating, it will write more fluidly, and will continue to digest — and be able to deploy — far more information than it currently can. To be fair, it may never be everything its boosters claim, but it definitely won’t stay in its current state.

Things change, and what seems like the most important thing in the world today may mean much less tomorrow.

Take our preoccupation with the retirement of the baby boomers, which has driven two decades of M&A, alternative practice structures, private equity investments and much more in accounting. It won’t be long before all those boomers will have retired or died (or decided that they won’t retire until they die). In just about five years, the first members of Gen X will reach retirement age, and we’ll be looking at a very different set of demographic issues.

Things change, and what once seemed a failure may return in triumph.

One of my favorite examples in accounting is outsourcing, which enjoyed a brief vogue a quarter century ago, before basically disappearing for a decade or more, largely because it was not ready for prime time. Now it’s back, and the outsourcers and offshore partners are ready for prime time — but there are firms who were burned last time who won’t go near it.

Things change, and the certainties of the past can evaporate overnight.

For three generations, the flow of unskilled graduates into firms was so regular that accountants could build their firm models around it — but that flow was cut more or less in half over the 1990s, and the profession has been struggling to maintain those models ever since.

For good or ill, sooner or later, everything changes. That doesn’t mean you should give up on planning; instead, regularly revisit your assumptions, and be ready to adjust your plans and practices if your assumptions no longer fit the facts. What was true when you entered the profession may not be true six months from now; what worked for generations may stop working tomorrow. Be ready to adjust yourself, your firm, your plans and your thinking.

Time passes, and things change — but so can you.