Magazine article The CPA Journal

The Accounting Profession in Transition

Magazine article The CPA Journal

The Accounting Profession in Transition

Article excerpt

How will the gender mix, among other things, play out as the fundamental staffing model changes?

The accounting profession is at a critical juncture in its development with many of its longstanding traditions being challenged by an evolving workplace and workforce. In recent years, the profession has experienced a changing work environment, characterized by an expanding scope of services, rising costs, technological changes, organizational restructuring, and increased specialization. These changes have generated new sets of staffing requirements and skill needs. The supply of accountants also has changed, with most notably a major influx of women into the profession.

As a result, a high degree of uncertainty characterizes the accounting labor markets today. This uncertainty is demonstrated in the areas of

hiring and staffing practices of accounting firms,

relative salaries of entry-level accountants, changing educational requirements, and the mix of male and female accountants. How these issues are resolved will determine in large part the nature and status of the accounting profession in the future.

A study of accounting labor markets, funded by a grant from the National Center for the Educational Quality of the Workforce at the University of Pennsylvania, provides insight into these issues. The authors conducted over 40 interviews with practitioners and educators; performed statistical analyses on educational, employment, and salary, data from 1960 to the present; and assessed the literature on professional labor markets across a range of fields. While the study focused on public accounting, the findings have relevance for accountants in industry and government as well.

Changing Times and Identity

The accounting services industry has experienced major changes in the nature and scope of services provided in recent years. In an environment of increased competition and maturation of the traditional audit and tax business, accounting firms have become more diversified and more specialized. Many accounting firms have expanded into broader-based professional service firms offering expertise in areas including litigation support, financial planning, real estate, health care, computer support, and management consulting. The organizational structure of work, particularly in larger firms, is shifting away from the type of service provided toward an industry or core business focus.

A wave of mergers, acquisitions and bankruptcies accelerated in the 1970s and 1980s as accounting firms sought to cut costs and better service clients in expanding national and international markets. The most visible merger activity involved the then "Big Eight," which became the "Big Six." Of the largest 25 accounting firms in the U.S. in the early 1970s, all that are still in business have been involved in at least one merger or acquisition.

Technological changes also have had a profound affect on the profession. For instance, integrated software for auditing and preparation of tax returns and online access to financial statement databases have changed the way accountants do their work. "Just-in-time" offices, hotelling, and telecommuting have all been outgrowths of the technological revolution.

The new "150-hour" requirement, mandating a fifth year of college study for membership in the AICPA and for licensing as a CPA in most states by the year 2000, will affect the supply and cost of accountants as well as career paths and mobility. It will also impact the quantity and characteristics of accounting graduates. The vision of the AICPA Special Committee on Assurance Services that the market for assurance services can be expanded from $7 billion to $21 billion with new kinds of services to new users will require new competencies and different skills. The AICPA is preparing to roll out a series of specific new services that it believes the marketplace needs and is ready to pay for. …

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