The Next Revolution in the Accounting Industry
Today, people think of accountants as those that just handle taxes and other financial documents. But the industry is going through a period of change, with new advancements in information technology ushering in the next revolution for accounting professionals.
Amongst the many benefits of these changes is an increase in job security and wages expected to match those of IT industry professionals by 2020. This is especially good news for aspiring accountants who can cultivate their skills without being forced out by increasing competition.
Evolution of World Observed
The evolution of the world economy has been a major factor in this development, with the movement from an industrial to a service economy. The easy availability of information through the Internet is fueling a lack of attention to detail in paperwork.
It is estimated that two-thirds of U.S. companies ignore some part of their cash and securities activities – such as not recording part or all of their revenue – every year "because they were too busy trying to get things done" (Wayne Payne, CPA).
Companies are being forced to spend more money on outside legal and accounting services to manage their growing paperwork.
In this environment, accountants are becoming highly sought-after professionals to reduce costs and improve efficiencies. "The demand for accountants is going up," said Paul Tientson, CPA, of accounting firm PKF Peacock LLP. "Professionals with strong technical skills and an understanding of technology are in demand." And accountants with the right credentials should have no problem finding a job, he added. "The market is wide open now. The jobs are there."
MBA Or CPA?
H. David Kotz, the chief economist for accounting information company accountingweb.com, said that accountants must be knowledgeable about both the business world and technology. They need to be able to understand and analyze financial statements, he added, as well as determine if a company's assets are properly classified or if its transactions have been recorded correctly. Accountants also need to have good communication skills to deal with clients and other employees who have questions or concerns about a company's finances.
Most companies do not require employees to have an MBA degree; they prefer CPA credentials because the job requires more than basic bookkeeping skills. However, certain accounting services are looking to hire MBAs because of the demand for their type of expertise. Auditing firms are among those that need specialized skills in information technology.
Another benefit of having a master's degree is an increase in salary; companies want professionals with significant experience and expertise who can support their growing businesses. "You get better-paid jobs with a master's degree," said Wayne Payne, CPA, chairman and CEO of accounting firm LKG Associates in Westborough, Mass., which provides regulatory compliance services. "The salary is based on the credentials."
Some industries have even moved away from the traditional CPA credential. The American Institute of Certified Public Accountants, which was established in 1887 to protect the public and promote accounting standards, is considering offering a new credential to accountants.
"We are looking at a new CPA certification," said Cindy Laux, public relations manager for the institute. "It's not going to replace your CPA credentials; it's going to be additional." The institute hopes that the new certification will add credibility for professionals who don't want to go through the exam process that can take up to two years and cost about $1,000.
Advancing Technology Promising New Opportunities
Technology is changing the accounting industry by empowering accountants both personally and professionally. Accounting is no longer just a back-office function; companies are highly dependent on their employees. Accountants will be less confined to their desk as they use increasingly sophisticated software that can be accessed through the Internet, wherever they are.
Companies will soon operate in a near-paperless environment by using electronic invoices and statements, eliminating the need for heavy paper files. Accounting professionals will focus more on analysis and communication, as well as building relationships with clients. In addition, accounting services will offer more value-added services to clients for an additional fee, such as providing business advice, consulting and technology support.
"The moving forward is to have an interface with the company," said Rich Hoffman from The Hoffman Agency Inc. in West Roxbury, Mass. "What they can't do internally they need to outsource."
The recent advancements in technology have attracted the attention of accounting firms, which are expanding their services and hiring new staff who can support their existing clients. "We are big believers that accountants need to adjust. The market has changed," said Payne. "Otherwise we wouldn't be growing so fast."
The demand for accountants is being driven by companies that want to meet rising regulatory compliance requirements set forth by the Sarbanes-Oxley Act (SOX), which is a response to financial scandals and corporate frauds of the last decade. SOX requires that every publicly traded company be audited by an independent third party.
Accounting firms are taking advantage of the need for compliance services and hiring experienced professionals to handle the workload, which involves a heavy amount of paperwork. "Companies have a lot more work to do because of the regulations," said Sherman Greenberg, CPA, chief operating officer of accounting firm HGGC LLC in Framingham, Mass. "They need somebody to help them."
As regulations become increasingly complicated and costly, companies will rely on outside expertise as well as new technology. Accountants will have to deal with records that are generated electronically rather than paper-based ones. "Firms are trying to move toward paperless offices," said Tientson. "You have to have the people and technology to do it."
Computer-based systems will better enable accountants to review and analyze large amounts of data, which will raise their value for companies that want qualified employees who can produce accurate financial statements. These same systems will also allow accountants to focus more on human relations and business advice. "The future is more toward a business consultant type of position," said Robert Lewandowski, CPA, controller at consulting firm Westwood Strategic Solutions LLC in Westwood, Mass., which provides strategic planning and management consulting services. "Accounting is becoming more of a specialty.
Conclusion
Accounting is a key measure of business success, and the demand for highly skilled and experienced accountants is growing. The amount of work to be done will only increase as companies and their customers continue to leverage emerging technologies. New opportunities are available in all industries, so it's important for students to decide which career path will best suit their personal interests and goals.
"Each career path is unique in its own right," said Mary Massey, CSAA, RMA, MBA. "It's not just accounting, but also tax." Accountants need to keep up with the changing business landscape by staying current on new trends and developments in the field.