The most significant issue facing the Accounting profession today is regulatory oversight and change. There has been a shift in the way accountants are viewed in the eyes of the public, through the media as a result of current developments in the CPA profession. This has led to professional accountancy bodies to develop policies to guide practice so as to sustain public faith of the profession, extend the jurisdiction over work and to attract and retain the best talent (Carnegie and Napier 2010). Although the core values of the profession remain unchanged, making sense of a changing and complex world, its core competencies continue to evolve and professional accountancy services have become so diverse and varied. This paper analyzes the various literature material in order to examine the current pressing issues that the accountancy profession is facing which includes but not limited to the increasing regulatory oversight by regulatory bodies, changes in political, social and economic conditions and then finally technological changes.
There exists a threat to the development of the accountancy profession due to unpredictable changes in the market. Continual changes within the market place, in terms of the businesses, the economy and regulations adversely affect the profession in its core mandate of making sense of a changing and complex world. The shifts in societal trends, technology and businesses necessitates the need to evolve CPA’s nature of work (Mendlowitz, 2014). This will ensure that they better respond to the needs of the businesses, clients and employers. Economic downturns have significantly changed the way in which professional accountancy firms are managed. In an online interview with Mark Koziel, an AICPA Director of Communities & Firm Practice Management, he notes that firms need to sharpen their pencils a bit by strictly managing their expenses in order to get through the period of recession. He also notes about the increasing number of startups as a result of mergers & acquisitions and the creation of new services as a positive thing for the profession.
Technology affects almost every business aspects
In order to deliver superior services, the accountancy profession needs to adopt and fully integrate technology so as to exploit its benefits that come with it which include the expansion of services offered from the core professional accountancy services such as book keeping, auditing and preparation of financial statements to a more consultancy-based and financial advisory services. Technology also promises increased efficiency, lower operational costs and high output levels (Mendlowitz, 2014). The challenge of ensuring transparency in the management of financial operations and offering investors with up to date and real time financial data can be best solved using technology. Social media and mobile commerce play a big role enhancing collaboration and interaction within and outside the profession. In order to protect data from fraud, CPA’s must therefore be vigilant enough to detect and possibly prevent fraud which can easily be advanced by the use of technology.
The most important technologies applicable to CPA’s is cloud computing and mobile technologies. Pervasive computing continues to pose a challenge in the profession in terms of creating efficiency and effectiveness in terms of information sharing and data access. This will require leveraging by utilizing the internet in any business process and allowing employees to utilize their personal technology devices to perform official work (Mendlowitz, 2014). Professional firms face the challenge of high turnover of personnel as a result of stringent policies, a lot of work load and rigidity in terms of not adapting to change. Their risk management processes also require review, significant controls will be needed in the area of cloud applications, employee devices and critical and sensitive customer data. Firms should therefore allocate significant resources to developing firm websites, improve their database technologies and online payment systems for their clients in addition to allowing their employees to work virtually from anywhere.
Image 1: Technology and Accountancy
Regulation plays an important role in promoting stability within the profession, eliminating fraud and increasing investor confidence. This has seen the profession come under a lot of pressure from the regulatory bodies of which must be followed failure to which may lead to fines and possible closure of business. These regulations need to be studied so as to enhance the quality of professional accountancy services and evaluate the possible consequences of such regulatory measures on businesses (Defelice, 2011). If these regulatory measures cannot be evaluated well, they can be restrictive thus damaging the profession’s ability to be competitive and maintain its status as the profession of choice by young professionals. The profession has grown to be much respected as a result of the quality, integrity and objectivity values that are advanced. However, issues like independence, objectivity and professional skepticism cannot be legislated but they are very important aspects in the accounting practice.
The success of any accounting firm will be determined from its ability to stay abreast of these regulations. There has been an increased demand for tax, assurance and business consultancy services. This requires a lot of capacity to evaluate and implement the complex standards and regulations created by the regulatory bodies (Defelice, 2011). However, most mid-size companies have limited resources to implement such policies and regulations on their own capacity which therefore requires alignment of business-level strategy to the corporate-level strategy. In another interview with Mark Albrecht, CEO XCM Solutions, he notes that the most important issue affecting the profession is the adoption of IFRS by the U.S. regulators and international professional bodies. He discusses the impact of the adoption of these regulatory rules on the current accountants, future accountants, users of financial statements in different jurisdictions and the need to reconcile inconsistent regulations with the Generally Accepted Accounting Standards.
Image 2: The Accounting Profession and regulatory framework
Then the other change factor is the societal context. There has been a change in the way the society views the accountants’ image or perception. There has been a significant interest of students who wish to take accountancy as a profession as a result of the perception that accountancy is boring. This has seen more professional bodies fight the traditional accountant syndrome in order to attract and retain the best talent (Carnegie and Napier, 2010). This therefore calls for professionalization of the profession, this will be carried out through a dynamic process that will culminate in forming occupational associations such as the Chartered Institute of Certified Accountants, an association of Chartered Accountants that promotes the interests of professional accountants worldwide. This decline is viewed where the media refers to the accounting profession as the accounting industry rather than the accounting profession and therefore professionalization should be regarded as a contingent matter rather than a matter of inevitability.
The current developments in the profession require continued enhancements and support in order to sale it to younger audiences and adapt it to the changing economic, political, social and technological environments. The future is really here and change is inevitable, embracing it will ensure viability in the long run due to the role that technology plays in the way professional accountancy services including tax & advisory, assurance and consultancy services are offered. In order to adapt to these changes, managers of these firms will need to adopt a forward thinking approach by assessing both the current and future environments in order to identify the opportunities and threats that exist in it and then planning accordingly. Above all, the need to deliver exemplary and high quality services should be the profession’s mandate and meeting the ever-changing needs of the environment.