Predictions for the Future of the Accounting Profession—Part Two

Source: Inside Public Accounting

Excerpts reproduced with permission from IPA. The following are condensed highlights. For the complete article, click on the link below.

IPA’s most recommended consultants share their predictions, trends and issues for 2008. This is part two. Part one is in our May issue and IPA’s March issue.

Steve Erickson

• Salaries will increase to levels never imagined. This means firms will have to accept clients that keep staff motivated and engaged.
• Newly designed technology will allow use of less experienced workers to complete tasks efficiently and competently.
• Succession issues will accelerate consolidation. Firms without succession plans will have to make plans to enhance the value of their practices by improving quality of the client base.
• Firms must focus on providing higher value in order to charge more to offset increasing staffing costs.

Robert Gallagher

• Firms will continue to increase salaries and develop cultures to encourage staff to stay. Alternative career paths will need to be implemented. The staffing crisis will continue for many years.
• New auditing standards, the move to international standards, new peer review requirements, and the continued blizzard of pronouncements will challenge firms to maintain good realization on audits.
• If private company standards are not implemented, many audits will become reviews with agreed-upon procedures performed on major assets.
• Mergers and acquisitions will continue at an active pace. In addition, associations of CPA firms will become stronger with members working together to maintain independence and culture.
• Smaller firms will maintain independence by forming alliances with larger firms.
• Many firms between $2 million and $5 million will merge upstream to afford the significant investment in next level management requirements.
• Firms without entrepreneurial cultures and bench strength will find it too late to maximize their value before they have to merge.
• Size matters with respect to profitability.
• The sub-prime fiasco has resulted in watered-down balance sheets. Assets were overvalued as a result of insufficient reserves. Lawsuits will follow and liability insurance premiums will increase.

Troy Waugh

• Firms without successor leadership can invest rapidly in it, or sell their firms. If you have three to five years left before retirement, there is still time. The third choice is risky—allowing ill prepared people to manage the firm after the founders retire.
• Clients want accountants who can communicate what numbers mean—technology will do the number crunching.
• Learning of reading, writing, speaking, and listening will continue and become more pronounced.
• The transitioning of clients from large firms to small firms will slow. Many of the larger firms that fired clients a few years ago are now staffed and have completed the brunt of the SarBox work and are going back to those clients. The dedicated service that clients were promised by smaller firms hasn’t materialized. Clients are disappointed in the perceived lack of resources of smaller firms.
• The key to retaining good clients is retaining good staff. Smart firms are investing in retaining employees.

For the complete article, click here.

From Inside Public Accounting, April 2008, p. 11, The Platt Consulting Group (www.plattgroupllc.com). Subscription $379 per year; back issues—nonsubscribers $50. 317-733-1920.

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