Podcast: How public practice needs to transform
This week's episode puts the P in "CPA" — because we’re talking about public practice. What's going on with CPA firms these days, anyway?
Quite a bit, as it turns out. The world is changing, and with every change that the world experiences these days, the folks who work at CPA firms seem to get a double dose of it. They have to figure out how to embrace these changes and disruptions inside their own firms, but at the same time, they have to help their clients figure out what to do about all of this complexity.
Our guest, Lexy Kessler, has her fingers on the pulse of CPA firm challenges and opportunities more firmly than most people in the profession. In addition to being a partner with Aronson LLC and a member of the Maryland Association of CPAs’ Board of Directors, Lexy is chair of the AICPA's Private Companies Practice Section, a group that supports CPA firms in the everyday intricacies of running a practice.
In this conversation, we cover:
- What’s keeping firm leaders up at night.
- Examples of firms that are transforming successfully.
- What the firm of the future might look like, given everything that’s going on today.
Listen to my conversation with Lexy Kessler here. Change you can believe in Barry Melancon, president and CEO of the American Institute of CPAs, says we may not recognize the vast majority of firms within the next five to 10 years. It’s not exactly smooth sailing for folks in our profession these days, is it?
But what, exactly, are the issues that firms are dealing with? What’s keeping these folks up at night?
We have some pretty good ideas. Tom Hood, president and CEO of the Maryland Association of CPAs, recently surveyed the partners of more than 20 major firms about the programs they value most from their professional associations. Their answers looked like this:
- Emerging technologies like artificial intelligence, Robotic Process Automation, machine learning, and the like.
- Legislative and regulatory advocacy.
- Talent recruitment and retention.
- Emerging leader development.
- Learning and CPE.
- Diversity and inclusion initiatives.
- Anticipation — in other words, using strategic foresight to stay ahead of trends.
- Helping accounting and finance pros become #FutureReady through upskilling and re-skilling.
By my count, out of those top eight, six of them are related directly to change, complexity, or hard trends that are impacting the profession — in other words, gearing them up for what’s to come. That’s a major shift. If you had asked them that question five years ago, CPE probably would have been number one, followed by regulatory changes and maybe staffing. This future-focused stuff wasn’t even on their radar not too long ago.
That survey, by the way, was taken during one of Hood’s regular meetings with the managing partners of Maryland firms. He started holding those meetings in the turbulent period after the Enron and Worldcom crises in the early 2000s, when the Sarbanes-Oxley Act was introduced and subsequently passed. One could argue that was the beginning of this “new normal” of change and complexity our profession has been dealing with lately. New technologies and social media made their entrance not long after that. Then, you had the recession of 2008, the advent of the cloud and A.I., and the Wild West-ifying of the political landscape. It’s all happened within the past 20 years.
Importantly, these changes aren’t going away — and research by the AICPA bears this out. The AICPA’s Private Companies Practice Section publishes the results of a survey each year that tries to assess the top issues that are impacting firms of various sizes. Among firms of all sizes, recruitment and retention of top talent is probably the top issue. But not too far behind are things like keeping up with changing and complex laws and regulations, seasonality and workload compression, and privacy and security risks.
Things get really interesting when you start looking a little further down the road. Kacee Johnson, a strategic advisor with CPA.com and an earlier guest on our podcast, recently said the list of issues that firms say will impact them over the next five years include things like changing client needs and emerging technologies — things that didn’t appear on that list even two years ago.
But that’s indicative of the kind of world we’re dealing with today, and nobody knows that better than our guest, Lexy Kessler.
- Learn more at AICPA.org/PCPS.
- Connect with Lexy.
- Read: Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen, by Rita Gunther McGrath