Current Issues in Accounting – Homework
Read “CPA Horizons 2025” (attached). In the document, 10 themes emerged that give insight into how the profession is conducting and will conduct business, serve clients and employers, attract and retain employees and new business and remain competitive in the marketplace throughout the next 15 years.
In 3-4 pages (12-pt type, double-spaced) summarize the four themes that you believe are the most important to the accounting profession and the impacts on the profession. Do you agree with the impacts? Can you think of more impacts? Do you agree with the ten themes? Are there any you would add?
R E P O R T
MESSAGE FROM PAUL
In 2010, the AICPA initiated a grassroots effort focused on
harnessing the insights of CPAs, business leaders, regulators,
thought leaders and futurists into the continuing evolution of the
CPA profession. Called CPA Horizons 2025, this visioning
initiative built on the ground-breaking work of the CPA Vision
Project, which took place in the late 1990s, engaged thousands of
CPAs and dozens of other important stakeholders in creating a
blueprint for the profession that led us through 2011.
CPA Horizons 2025 extends that original vision into the future.
The project examined the local and global trends affecting CPAs
in their daily work, enlisted opinions on how these trends will
impact CPAs in the years ahead, and how the profession could
meet the challenges and leverage opportunities now and in the
coming years. As part of this process, we examined the current
and future relevance of our Core Purpose, Values, Competencies
and Services identified as part of the CPA Vision Project.
To explore what the CPA profession will face over the next
15 years, the profession also considered how the technological
tsunami of the past decade has propelled us into new frontiers
and changed how the profession operates. Clearly, demographic
shifts in the CPA profession will bring new opportunities to wider
audiences, evolving our profession to represent the diversity of the
world. Globalization offers opportunities and challenges for the
profession as well as our clients, firms and employers. These are a
sample of the macro-trends that were assessed, discussed and
debated virtually and in face-to-face meetings across the country.
Im honored to have led this extraordinary collaborative effort of
the CPA profession during my year as Chairman of the AICPA
Board of Directors. No other profession calls upon its members to
engage in such an exercise to prepare for the future. Its for this
and for so many other reasons, I am extremely proud to be a CPA.
I look forward to collaborating with members of the profession as
we continue to exemplify our CPA Purpose: CPAs Making
sense of a changing and complex world. I truly believe that the
results detailed in the pages of this report will not only guide the
profession as it considers the opportunities and challenges that lie
ahead in our 15-year horizon, but also for generations to come.
Paul V. Stahlin, CPA
EXECUTIVE SUMMARY
Over a six-month period, CPA Horizons 2025 sought the insights of CPAs on current and forecasted
trends that will surely impact not only the profession, but also the world. Through an interactive survey,
16 in-person forums, online discussions and focus groups, more than 5,600 CPAs weighed in,
spending a cumulative 6,000 hours, and generating in excess of 75,000 individual comments relating
to the current state and future of the CPA profession. This major effort, undertaken in partnership with
the state CPA societies, builds upon the previous CPA Vision effort.
In order to synthesize this significant amount of grassroots feedback, an esteemed 22-member group,
selected to form an Advisory Panel representing all member segments of the profession (by practice
area, age, gender and diversity) and the state CPA societies, carefully reviewed and refined the input,
defining the profession’s Core Purpose, Values and Competencies.
The research shows that the entire profession from sole practitioners to medium and large firm
members to members in business and industry to those in government and academia has a bright
future and will need to respond quickly and competitively to the shifting ground on political, economic,
social, technological and regulatory fronts.
CPAs
overwhelmingly
agreed that the
professions Core
Purpose, Making
sense of a
changing and
complex world,
remains relevant
today and for the
future.
The professions
Core Values
remained
substantially
unchanged.
The services provided
by CPAs have
become so varied and
diverse that the
concept of core
services is no longer
representative of the
profession.
The Core
Competencies
evolved to reflect
the 21st century.
Visioning requires hindsight, foresight and insight.
We are the only profession who has been in this
process for more than 15 years.
Insights and
directions related
to opportunities
and challenges for
the profession over
the next 15 years
emerged. Using
these insights and
directions as a
road map, CPAs
and the accounting
profession will
mold their future.
KEY FINDINGS
Technology: Understand and leverage relevant
technology in conjunction with core CPA
Competencies to deliver superior services.
Pre-certification and
Lifelong Learning: Evolve the
educational framework to keep
pace with the changing
dynamics of business,
government and our profession.
Worldwide Profession: Position the CPA as
a premier designation of the accounting and
finance profession throughout the world.
Pride in the Profession:
Encourage pride among
CPAs in the CPA profession
and in the value CPAs
create throughout society.
INSIGHTS AND DIRECTIONS
Trusted Attester: Preserve the role
of the CPA as the trusted attester of
financial and other information.
Market Permissions: Leverage
the strengths of the profession to
expand market permissions.
Marketplace: Address continual changes
in the marketplace, economy, businesses
and regulations.
Value Proposition:
Increase the visibility of
the professions value
proposition by
demonstrating the
professions Core Values
in multiple areas
of business and society.
Trusted Advisor: Promote the CPA as the trusted
advisor who, in addition to providing core CPA
services, develops solutions to complex problems by
integrating knowledge, expertise and resources from
multiple disciplines.
Demographic Shifts: Continue to offer
opportunities that enhance the appeal of the
profession and be proactive in addressing both
U.S. and global demographic shifts.
BUILDING ON THE THEMES OF THE CPA VISION PROJECT
In 1998, the AICPA and the state CPA societies collaborated on
an unprecedented, profession-wide initiative, known as the CPA
Vision Project, to set a course for the future growth of the CPA
profession. CPAs from all disciplines, students and external
thought leaders, participated in the CPA Vision Project to ensure
the profession prepared for and responded to the changing
demands of the future. More than 3,400 CPAs took part in more
than 170 in-person forums. As a result of this ground-breaking
exercise, consensus emerged as to what made the profession
unique and what CPAs must do to remain exceptional in the
years ahead. The grassroots efforts defined the professions Core
Purpose, its essential and lasting reason for existence. From the
extensive research and dialogue, the profession established the
Core Purpose, Core Values, Core Services and Core
Competencies the essential beliefs, service focus, skills and
knowledge required for CPAs to remain competitive into the 21st
century. The CPA Vision Project crystallized the goals,
opportunities and challenges for the CPA profession through the
year 2011.
Looking back on its extensive conclusions and observations, the
CPA Vision Project accurately predicted many evolutionary trends
that occurred in the profession over the last 15 years. Based on
the groundbreaking recommendations and findings of this effort
came numerous initiatives including XBRL, enhanced business
reporting, sustainability, the Clarity Project, audit quality centers
and the Chartered Global Management Accountant designation
as well as women, minority and work/life initiatives and young
CPA leadership programs that altered the business world for
the better, enhanced the value of the CPA and positioned the
profession as leaders in business.
A ROAD MAP FOR THE NEXT 15 YEARS
In 2010, the profession embarked on the next stage of this
initiative to help foresee and shape the future of the profession:
CPA Horizons 2025. In preparation for the coming years, the
AICPA, state CPA societies and CPA profession considered
whether, and if so, how, the core values, competencies and
services so accurately identified almost a decade and a half
ago apply today given the extensive technological, economic
and political changes that have taken place.
CPA Horizons 2025 called upon members of the profession to
share their insights on the future through an interactive survey,
in-person forums, virtual focus groups and online discussion
forums. During a six-month period 5,600 participants in this
effort contributed more than 6,320 cumulative CPA feedback
hours. Once completed, the compiled data was shared with the
CPA Horizons 2025 Advisory Panel who convened to assess
and analyze the input from thousands of participants. Additional
work by panel members assured thorough evaluation and
consideration of data for the final report. (For Advisory Panel
biographies see Appendix).
ADVISORY PANEL MEMBERS
Paul V. Stahlin
Ernest A. Almonte
Jordan D. Amin
L. Gary Boomer
James C. Bourke
Robert L. Bunting
James G. Castellano
Patricia Cochran-Bergman
Kimberly Ellison-Taylor
Jeanette Meixner Franzel
Erin Hardwick
Richard E. Jones
Don McCleod
Faye Miller
Richard E. Mills III
David J. Moynihan
Joel C. Olbricht
Marc Parkinson
R. Kinney Poynter
Donny C. Shimamoto
Ira Solomon
Jaleigh White
The Advisory Panel debated and assessed the original findings
of the CPA Vision Project, capturing the recommendations of
CPA Horizons 2025s participants and framing these core
elements with the goal of strengthened relevancy and viability
for the CPA profession.
CORE PURPOSE
The professions Core Purpose defines the CPA professions
reason for being. CPAs are certain it will continue to guide the
profession. It remains unchanged from its original version.
CPAS … MAKING SENSE OF A CHANGING AND
COMPLEX WORLD
Core Values
The essential and enduring beliefs that we uphold
over time. Core Values enable us to retain our
unique character and value as we embrace the
changing dynamics of the global economy.
Integrity
Competence
Lifelong Learning
Objectivity
Commitment to Excellence
Relevance in the Global Marketplace
From the CPA Vision Project evolved the professions Core
Services, the foundation of work and value the profession
provides to clients, business and employers. CPA Horizons
2025 asked participants to reflect on these traditional services
and consider the addition of new services in light of shifts in
business, society and technology occurring now and through
2025. Results showed that participants believe the professions
Core Services will continue to expand over the next 15 years.
Based on those results from the professions thought leaders,
and its review of the evolution of the profession during the past
15 years, the Advisory Panel believes that identifying and
listing only a finite number of specific Core Services in the 21st
century would limit opportunities for the profession.
Communications Skills
Leadership Skills
Critical-Thinking and Problem-Solving Skills
Anticipating and Serving Evolving Needs
Synthesizing Intelligence to Insight
Integration and Collaboration
Core Competencies
A unique combination of human skills, knowledge
and technology that provides value and results to
the user. Enhancing our Core Competencies is
key to sustaining a competitive and differential
advantage in the marketplace.
NEW HORIZONS FOR THE PROFESSION
Through the information-gathering phase of CPA Horizons 2025, thousands of CPAs provided
feedback that was aggregated into the major themes that significantly influence the current state and
future of the profession. The Advisory Panel further examined these themes, assessing their impact on
the Core Purpose, Values and Competencies. Ten key themes emerged that give insight into how the
profession is conducting and will conduct business, serve clients and employers, attract and retain
employees and new business and remain competitive in the marketplace throughout the next 15 years.
TECHNOLOGY
In a world driven by technology, CPAs leverage both
knowledge of the risks and advantages offered by
technology and CPA knowledge and skills to enhance
their work.
Throughout the CPA Horizons 2025 project, CPAs identified
technology as having a major impact on CPAs. With the increasing
prevalence of mobile technology and faster networks, people expect
to have up-to-date information available wherever and whenever.
This will drive financial reporting to be faster and, eventually, to be
delivered in real-time. Not only does this quicken the pace at which
CPAs must do their work, it also opens the door to both potential
errors and fraud in the creation of the information. The history
provided by paper documents is lost when electronic documents can
be modified in a split second. The security and privacy of information
is at risk to those with malicious intent and technical skill. The
profession is uniquely positioned to devise new ways of assuring that
financial information remains as reliable, confidential and accurate
as in the past.
Newer, more powerful and cheaper software allows individuals
and businesses to automate activities that once required a
CPAs expertise. While this may eliminate some CPA services,
it also creates opportunities for the profession to shift to more
value-added work as the needs of clients and employers
change. CPAs will be able to build on their core skills in
analyzing, assuring and protecting information to provide
advice and counsel to allow clients and businesses to make
better use of technology.
Technology also is changing the way people interact with each
other. Face-to-face meetings are being replaced by
conference calls, which are evolving to video conferences.
Emails have replaced letters and are being replaced by text
messages. Social media is blurring the boundary of business
and personal and a social media presence is becoming as
much a marketing imperative today as a website was just five
years ago. The office is becoming anywhere with an Internet
connection, rather than a specific place. Today a CPA can
offer services to a client or employer half a world away almost
as easily as to one just down the street.
Understand and leverage relevant technology in conjunction
with Core CPA Competencies to deliver superior services.
IMPACT ON THE PROFESSION
1. CPAs must stay current with, embrace and exploit
technology for their benefit for increased efficiency and
expansion of services.
2. The profession must find solutions to offer investors and
stakeholders up-to-date, real-time financial information
and to increase transparency.
3. CPAs must embrace mobile technologies and social
media to modernize and enhance interaction and
collaboration with clients and colleagues.
4. Fraud may be easier to commit and more difficult to
prevent and detect. CPAs must continue to be vigilant in
ensuring data is captured and managed properly and
protected from malfeasance.
The profession will need to adopt new technologies
and demonstrate effective leadership in doing so.
PRE-CERTIFICATION AND
LIFELONG LEARNING
Extend traditional technical education to include
interpersonal skills and mentoring that allow CPAs
and aspiring CPAs to meet their educational needs on
a real-time, ongoing basis.
Education will remain a cornerstone both as preparation for
certification and as an ongoing activity throughout a CPAs career.
However, while the importance of education will not diminish, what
CPAs learn and how they learn will evolve. Strong technical
accounting knowledge will continue to be a foundational requirement
but it alone will not be sufficient. CPAs must also develop
problem-solving, communications, leadership and other
interpersonal skills.
Accounting knowledge must also be supplemented by broader
business knowledge encompassing finance, economics and
technology. Increasing globalization will require CPAs to obtain more
knowledge about the international marketplace. CPAs will also need
to stay up-to-date on changing regulations and standards.
For CPAs to obtain and maintain the knowledge needed, the
educational framework will also need to change. The Internet
and the growth of mobile technologies allow CPAs to engage
in education whenever and wherever it is needed. Whereas in
the past, CPAs often had to schedule classes in advance or
order self-study manuals, today a CPA can identify a need and
potentially immediately find a webcast, podcast or seminar
available and participate without ever leaving his or her desk.
This evolution also allows education to be consumed in
smaller, more digestible increments instead of spending
hours or days in a class, CPAs can find education in smaller
targeted segments.
Aspiring CPAs will continue to need rigorous preparation.
There is widespread agreement that education for new CPAs
needs to be demanding. However, the specifics of this
education will constantly need to be reviewed as the needs of
the profession and business evolve.
Evolve the educational framework to keep pace with the
changing dynamics of business, government and our profession.
IMPACT ON THE PROFESSION
1. CPAs must devote more time to staying current with
regulations and standards and social, economic,
technological and political trends domestically and abroad.
2. CPAs must further develop interpersonal skills to enhance
relationships with colleagues, clients, businesses and
employers.
3. Real-time learning in the workplace will change the way
CPAs learn and will help them adopt and adapt quickly
and knowledgeably to ever-changing circumstances.
4. Requirements for new CPAs must remain rigorous and
demanding and be practical and relevant.
5. New CPAs must have a broad knowledge of business and
soft skills and not simply focus on technical accounting.
CPAs have to be both the teacher and the
learner in the profession for a lifetime.
In a world of increasing interdependence and
connectivity, the CPA is a premier accounting and
finance designation.
A growing number of CPAs believe it is increasingly important for
the profession to be aware of global business issues and trends.
Globalization offers unprecedented opportunities for the profession
to expand into new markets. Yet globalization also brings challenges
including greater competition for CPAs, both in the U.S. and
internationally.
Technology will enable U.S.-based businesses of any size to
conduct business abroad, while also enabling new overseas
competitors, including non-CPA accounting professionals, to gain
access to the U.S. market. Research shows that many CPAs
anticipate continued outsourcing of accounting services and
business processes. Additionally, organizations will be able to hire
employees from a global workforce, as the CPA designation grows.
CPAs also will face increasing complexity with varying standards
and customs across the globe. CPAs must navigate through
different communication challenges and business practices while
maintaining the highest ethics and standards that define the
CPA profession. As global business becomes more complex,
there will be an opportunity for CPAs to become the leading
experts for all financial needs.
CPAs believe that maintaining the rigor and quality of the CPA
credential will help uphold its positive perception and help the
profession thrive overseas. Maintaining high standards for
acquiring the credential and placing increased emphasis on
continuing education as well as developing soft skills will help
position the CPA as one of the world’s premier designations.
IMPACT ON THE PROFESSION
1. CPAs must be increasingly aware of international business
issues and trends.
2. CPAs must assess the trend toward outsourcing overseas
and create opportunities to expand services to serve these
markets.
3. CPAs must continue to market the quality and value of their
services in order to expand and thrive globally.
WORLDWIDE PROFESSION
Position the CPA as a premier designation of the
accounting and finance profession throughout the world.
61
52
67
68
29
31
26
22
8
12
4
7
2
5
3
3
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
All respondents
Public accounting
Business and industry
All other respondents
Strongly agree
Somewhat
agree
Neither agree
nor disagree
Disagree
It will be increasingly important for the accounting profession to have
awareness of international business issues and trends in the future.
[Globalization] brings the opportunity to display to the rest
of the world how valuable a U.S. CPA is. It is not just the
certificate, but the entire training that we go through.
PRIDE IN THE PROFESSION
CPAs take collective pride in the knowledge and effort
required to attain the CPA credential, and the many
positive contributions CPAs make in serving the
public interest, worldwide markets, businesses
and communities.
CPAs are proud of the long-standing resilience of their positive
reputation. Research conducted by the AICPA over the past
20 years found that CPAs are among the most respected and trusted
financial professionals and are known for their objectivity, integrity
and financial and business expertise, earning the title of trusted
advisor to individuals and businesses.
Defending a strong positive reputation remains a high priority for the
profession and CPAs remain vigilant in preventing the weakening of
ethics and loosening of standards, as well as instances of fraud both
within and outside the profession. Greater focus on integrity,
detection and reporting of fraud, and ethical behavior are
requirements to continue to uphold this reputation. When CPAs work
in countries with differing ethics, upholding the integrity of the
profession and maintaining high standards will be challenges the
profession will need to meet.
CPAs derive an enormous sense of personal accomplishment
in completing the requirements to become a CPA. They also
believe that the stature of the profession worldwide is largely
dependent on the rigorous requirements and professional
standards associated with obtaining and maintaining the
credential.
Further, CPAs should work to improve the professions image
and to enhance the publics perception of the profession by
upholding ethical business practices and practicing
self-regulation. CPAs believe to further strengthen their image,
advocacy on behalf of the profession and public education
must be ongoing.
Outside of the workplace, technology, particularly social
media, blurs the boundaries between work and life and allows
business and clients unprecedented access into CPAs
professional lives underscoring the need for CPAs to
maintain their high standards outside of work to uphold the
positive public image of CPAs.
Encourage pride among CPAs in the CPA profession
and in the value CPAs create throughout society
IMPACT ON THE PROFESSION
1. The profession must continue to advocate on behalf of itself
to ensure continued recognition as a trusted advisor.
2. CPAs must uphold the integrity of the profession and maintain
high standards in an ever-changing environment and in
cultures where business practices differ from U.S. practices.
CPAs desire the CPA credential to retain its positive reputation
within the U.S. while also building awareness and prestige
abroad. Competition from other professional accounting
credentials, both domestically and internationally, increases
the importance of safeguarding the CPA credential. The
profession must proactively market and reinforce its value to
clients and the public to maintain its standing among other
accounting and financial professionals.
I am most proud of the idea that our professionals have been able
to occupy diverse jobs at high levels, from accounting to sales,
from operations to HR, from consulting to management.
Preserve the role of the CPA as the trusted
attester of financial and other information.
TRUSTED ATTESTER
Attest is a fundamental CPA function from which the
profession derives public trust and which allows CPAs
to branch into new attestation and advisory services.
Although most CPAs are not involved in providing audit and attest
services, attest remains a fundamental service for the profession.
While CPAs skills and knowledge allow them to offer many other
services to employers and clients, there is no other profession that is
as qualified, or even allowed by law, to fulfill the role of auditor. It is a
unique niche filled by CPAs and will continue to be an important role.
Many other CPA services are based in the attest function. Some,
such as business controls and internal audit, are direct extensions of
the attest function. Other areas, such as fraud and forensics, rely on
skills acquired via auditing. Employers and clients also look to CPAs
as potential providers of other compliance-related areas such as
sustainability, risk management and regulatory compliance. All these
extended services have their roots in the attest function. Services
based on the CPA reputation as a trusted attester provide a natural
path for CPAs to expand and enhance their offerings.
The attest function also underpins the professions reputation for
objectivity and independence. From the beginnings of the modern
accounting profession at the end of the 19th century, the ability of
CPAs to provide independent, objective audits of financial
statements helped build credibility for the profession. The public
recognizes that CPAs are independent and objective assurers
of information. Trust built in the provision of assurance
services also gives the public confidence to trust CPAs as
advisors as well as auditors.
As in the past, the audit and attest function will continue to
evolve to incorporate changes in accounting standards,
technology, business practices and investor requirements. As
financial information moves closer to real-time, auditors will
need to understand the changes and devise ways to assure
that information. CPAs will still have the opportunity to identify
areas where trusted attesters can use their audit expertise to
provide services. The audit and attest function will continue to
be a much-needed service and one that CPAs are uniquely
qualified to provide.
IMPACT ON THE PROFESSION
1. The profession must stay vigilant in defending its unique
role as providers of audit and attest services. All CPAs
benefit from the public trust that is rooted in the provision of
audit and assurances services.
2. Audit and attest functions must evolve to meet changing
regulatory demands and client and business needs.
[The profession will] continue to expand on the integrity and
reliability of the auditor’s report, only provided by a CPA.
Promote the CPA as the trusted advisor who, in addition to providing
core CPA services, develops solutions to complex problems by
integrating knowledge, expertise and resources from multiple disciplines.
TRUSTED ADVISOR
Leverage the core skills and competencies of CPAs
and position them as strategic partners who can
bring together experts from different specialties to
solve problems.
Regulatory, technical, global and competitive forces (including
non-CPAs who compete with the profession to offer nonaudit
services) provide increased challenges and opportunities for the
profession. In today’s fast-paced globalized and highly networked
economy, CPA professionals must maintain and improve their
technical skills, business skills and knowledge. To be successful,
the profession must earn and uphold the trust and confidence of
those they serve.
To earn the trusted advisor status, CPAs must not only demonstrate
competence and commitment to excellence in their particular area of
practice, but also demonstrate knowledge of business and the
evolving marketplace. CPAs need to be in tune with clients, business
and employers and sharpen the adaptability skills required for
evolving services to address changing priorities. Once established,
trusted advisor status opens many opportunities to be able to help
across a broad range of business issues, not just in a specific area.
As trusted advisors, CPAs increasingly will be called upon to help
solve complex and challenging business problems. This will
require leveraging core competencies of critical thinking and
problem-solving skills and collaborating with professionals
across different disciplines. By applying the same experience,
objectivity and expertise the profession brings to traditional
services, CPAs will enhance the value proposition for clients
and business.
