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AICPA, NASBA Join ‘Advanced Professions’ to Launch New Coalition to Protect Licensing

The AICPA and NASBA have helped found the Alliance for Responsible Professional Licensing (ARPL), a new coalition focused on educating policymakers and the public about the importance of rigorous professional licensing standards.

The coalition was formed to “ensure the voices and concerns of the advanced professions are heard by lawmakers amid the growing debate around licensing,” the coalition announced.

“Weakening professional licensing standards on a state-by-state basis will destroy the confidence in qualifications and completely disrupt existing mobility models for advanced professions like ours,” warns Barry Melancon, president and CEO of AICPA. “Employers will be less inclined to accept out-of-state licenses if some states have rigorous requirements and others have weak requirements. The result: it will become more difficult for CPAs to move and maintain their careers across states.”

Bills have been introduced in dozens of states around the country that would reduce state licensing requirements, not only for CPAs, but also for surveyors, architects and engineers. Some of the proposals could have eliminated the hard-fought ability for CPAs to serve clients and employers outside of their home state without getting an additional license.

NASBA CEO Ken Bishop adds, “When a CPA performs an audit of a business or government, the public must have confidence in its accuracy, thoroughness and integrity. The most effective way to maintain this confidence is to continue to have CPAs show rigorous education, examination and experience for their licensing requirements.”

ARPL members also include the American Institute of Architects, the American Society of Civil Engineers, the Council of Landscape Architectural Registration Boards, the National Council of Architectural Registration Boards, the National Council of Examiners for Engineering and Surveying and the National Society of Professional Engineers. Find more information on ARPL’s new website.

More news from the AICPA

AICPA: Non-Accounting Majors Make Up Growing Percentage of New Hires

College graduates without accounting degrees made up nearly a third of new graduate hires in public accounting in 2018 – an increase of 11 percentage points from 2016 and nearly 30 more than in 2014, according to the AICPA.

While undergraduate accounting enrollments were the second-highest on record in 2017-2018, CPA firms are focusing more heavily on technology skills and 31% of all new graduate hires are coming from outside accounting. As firms continue to embrace technology and evolve their approach to the audit, they are seeking employees with data science and data analytics skills, according to the AICPA.

Additionally, the number of CPA exam candidates and newly licensed CPAs in 2018 dipped to the lowest level in 10 years.

The data, from the AICPA’s biennial report, “2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits,” is based upon university responses for the 2017-2018 academic year and firm responses for the 2018 calendar year.

The results echo data analyzed by INSIDE Public Accounting (IPA) in its annual survey of more than 500 accounting firms across the nation.

“As firms continue to expand service lines and seek to hire the most qualified candidates to serve clients in many non-traditional services, we’re seeing more non-CPA professionals in the ranks of the IPA 100,” says Mike Platt, principal with INSIDE Public Accounting. “In fact, we discovered that 28% of all client-serving professionals at the IPA 100 have no intentions to pursue a CPA license.”

According to IPA’s data, 1 of every 11 equity partners is not a CPA. These non-CPAs include client-accounting service staff, MBAs, computer scientists, COOs, data analytics professionals, wealth managers, cyber-security experts, consultants, engineers, entrepreneurs, health care specialists and others.

AICPA president and CEO Barry Melancon says the accounting firm hiring model is shifting. “This is leading to more non-accounting graduates being hired, particularly in the audit function. CPAs have an unmatched reputation for trust and integrity, earned through decades of working in the public interest. However, to play this vital role in the future will require an increased focus on technology.”

On the supply side, nearly 208,000 projected students were enrolled in undergraduate accounting programs during the 2017-2018 school year. More than 33,000 projected students were enrolled in master’s programs in 2017-2018. This reflects a 6% decline from 2015-2016 but remains comfortably above any level pre-recession. Declines in graduate student enrollment is due largely to more students opting to enter the workforce in lieu of pursuing an advanced accounting degree, the report says.

There were nearly 55,000 projected bachelor’s and more than 21,000 projected master’s degrees earned in 2017-2018. This reflects a decline of 4% each from the previous report.

New CPA exam candidates increased significantly in 2016, largely attributed to the new version of the exam launching in 2017. For 2018, CPA candidates fell 7% to 36,827, while newly licensed CPAs fell 6% to 23,941.

Some of these initiatives to attract the next generation of CPAs include:

  • The CPA Evolution project, launched in partnership with the National Association of State Boards of Accountancy, seeks to ensure that CPAs continue to have the needed skills.
  • A CPA Exam practice analysis focused on the impact of technology and the critical skills for newly licensed CPAs. An exposure draft and invitation-to-comment will be published in late December.
  • Accounting Accreditation Practitioner Engagement Program, which places CPA practitioners on AACSB accounting accreditation teams and committees.
  • Accounting Doctoral Scholars Program, which provides funding for CPAs to obtain their doctorates and teach.
  • Accounting Program for Building the Profession, which trains high school educators to teach a college-level accounting class.

Additionally, the AICPA is working with organizations and offering scholarships and programs to increase the likelihood that racial and ethnic minority students consider accounting early in their career decision-making process. The report found that racial/ethnic diversity has increased, with the highest percentage of non-white enrollees to date. Enrollment by gender is nearly even at both the bachelor’s and master’s levels.

More news from the AICPA

Americans’ Financial Pain Low; CPAs Concerned About Recession, AICPA Says

Americans continue to experience high levels of personal financial satisfaction thanks primarily to the stock market’s best June performance in decades.

The AICPA’s Q2 2019 Personal Financial Satisfaction Index (PFSi) is down slightly, 2%, from the prior quarter but still remains close to its recent record high. “The bull market, abundant job openings and steadily rising home equity have Americans’ financial pleasure hovering near its all-time high,” the AICPA says. The index says that financial pain is lower now than it was before the Great Recession in light of loan delinquencies trending down and underemployment reaching its lowest level on record.

The PFSi is calculated as the Personal Financial Pleasure Index minus the Personal Financial Pain Index.
However, The AICPA CPA Outlook Index, which captures the expectations of CPA executives in the year ahead for their companies and the U.S. economy, declined a slight 1.8% below the previous quarter and is down 6.8% from last year.

Compared with the year ago, all components of the CPA Outlook Index show declines. So, while Americans are experiencing near record high levels of financial satisfaction, CPA executives are becoming somewhat more worried about the potential for an economic downturn in the year ahead.

More news from The AICPA

Baker Tilly Partner Jonathan Marks Joins AICPA Task Force

Jonathan Marks

Chicago-based Baker Tilly (FY18 net revenue of $578.4 million) announces that partner Jonathan T. Marks has been appointed a member of the AICPA Forensic and Litigation Services (FLS) Fraud Task Force.

The FLS Fraud Task Force serves to foster growth in the Forensic and Valuation Services (FVS) section and increase CPAs’ recognition of forensic accounting services as a growing practice niche by identifying, collecting, developing and disseminating technical, industry, legislative and regulatory issues related to fraud prevention, detection and response.

Marks says, “I hope my extensive experience in the fraud and forensic space will help in identifying opportunities to enhance or develop practical solutions related to fraud prevention, detection and response that ultimately help address the risks facing today’s businesses.”

Marks is partner and leader in Baker Tilly’s FLVS practice. He has more than 30 years of experience working closely with clients, boards, senior management and law firms on global and cross-border fraud and misconduct investigations, including bribery, corruption and compliance matters.

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AICPA, CPA Practice Advisor Announce 2019 Most Powerful Women

The American Institute of CPAs and CPA Practice Advisor have recognized 25 leaders in the accounting profession with the 2019 Most Powerful Women in Accounting Award.

These women represent a broad spectrum of roles and perspectives within the profession, including executives from Top 100 CPA firms and Fortune 500 companies, small to midsize firm partners, state society leaders and consultants. In addition, members of CPA Canada were eligible for recognition for the first time.

The awards were created by CPA Practice Advisor and are jointly administered by the AICPA. The recognition came during the AICPA ENGAGE conference in Las Vegas June 12.

“This recognition of women leaders in the accounting profession shines a bright light on the role models and the inspiration needed by women finding their way in the profession and those who are considering accounting as a career,” says editor-in-chief Gail Perry.

A group of independent judges selected the award recipients, using the following criteria:

  • Demonstrates she is a driving force in creating a culture of innovation or excellence within her organization or helped, as a vendor, to develop technologies that empower firms to be more productive and profitable
  • Reached a level of management and ownership within her company, with demonstrable impact on its success
  • Actively mentors those following in her footsteps

“We received substantially more nominations in 2019 than a year ago and it was a strong group of women,” says Jacquelyn H. Tracy, chair of the AICPA Women’s Initiatives Committee (WIEC). “Asking our judges to choose among a fabulous nominee pool is a good problem to have as we start to see more women leaders rising in our profession.”

The 2019 winners are:

  • Tommye Barie, senior consulting shareholder, Succession Institute, LLC
  • Samantha Bowling, partner with Garbelman Winslow, CPAs
  • Danielle Supkis Cheek, director of entrepreneurial advisory services, PKF Texas
  • Susan Coffey, executive vice president of public practice, Association of International Certified Professional Accountants
  • Lynne Doughtie, U.S. chairman and CEO, KPMG
  • Sarah Elliott, principal and co-founder, Intend2Lead, LLC
  • Kimberly Ellison-Taylor, global strategy leader for the cloud business group, Oracle
  • Cathy Engelbert, retired CEO of Deloitte US and incoming commissioner of WNBA
  • Tracey Golden, AICPA vice chair and an audit partner with Deloitte
  • Kelly Grier, U.S. chairman and managing partner and Americas managing partner, EY
  • Kacee Johnson, strategic advisor, CPA.com, and founder, Blue Ocean Principles
  • Elizabeth Pittelkow Kittner, controller, Litera Microsystems
  • Samantha Mansfield, director of professional development and community, CPA.com
  • Gail Perry, editor-in-chief, CPA Practice Advisor
  • Amy Pitter, president and CEO, Massachusetts Society of CPAs
  • Natasha Schamberger, president and CEO, Kansas Society of CPAs
  • Lindsay Stevenson, founder and CEO, Origin Evolution, LLC
  • Joy Thomas, president and CEO, CPA Canada
  • Michelle Loyd Thompson, CEO and firm managing partner, Cherry Bekaert LLP
  • Jacquelyn Tracy, partner, Mandel & Tracy, LLC
  • Amy Vetter, creator, The B3 Method Institute
  • Jennifer Warawa, executive vice president of partners, accountants and alliances, Sage
  • Sandra Wiley, president, Boomer Consulting, Inc.
  • Jennifer Wilson, co-founder and partner, ConvergenceCoaching, LLC
  • Candace Wright, director, accounting and assurance services group, Postlethwaite & Netterville

More news from AICPA

AICPA to Oversee New Internet Domain for CPAs

The AICPA is in the process of being awarded the .cpa domain and is currently in a contract execution phase with the Internet’s global governing body, the Internet Corporation for Assigned Names and Numbers (ICANN). The AICPA’s role in administering .cpa will provide a defined global domain for CPAs worldwide to connect with their clients with increased trust, security and verification.

“By overseeing the .cpa domain in collaboration with other global CPA organizations, the AICPA can help promote CPAs’ visibility and protect their professional standing online,” says Barry Melancon, the president and CEO of the AICPA. “We also want the public to have confidence that someone using a .cpa domain address for email or a website is affiliated with the CPA profession.”

The new domain extension will be available to CPAs and their firms and will signal a clear connection to the profession. For example, Firm Name, LLC, could have a website address of www.firmname.cpa. Jane Smith, an employee at that firm, could have an email address of jsmith@firmname.cpa.

“Today, there’s a lack of authentication and growing mistrust of online information,” says Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s technology subsidiary. “This is why many leading companies and communities, such as Amazon, KPMG, and the banking industry are moving to restricted top-level domains. We’re looking forward to bringing this important new capability to the profession.”

More details on registering a domain name will be available later this year. For additional information and the opportunity to sign up for notifications, please visit https://domains.cpa.com

Consultant Bill Reeb Elected Chair of AICPA

Bill Reeb, an IPA Most Recommended Consultant, was elected to the one-year volunteer post by the AICPA Governing Council May 21.

Bill Reeb

In his acceptance speech, Reeb said the profession must take “leaps, not steps” forward to take advantage of what will be a sea change in accounting and finance. “Our clients and employers are challenged to stay ahead in a time when rapid innovation and change is the new world order. They need us to be with them, side by side, helping them navigate the complexity and uncertainty that is the world we live in today.”

Reeb offered four pieces of advice for the profession:

  • Let go of what you think you know. Reeb says accountants should rigorously reexamine past lessons and work methods to see if they still hold true in a time of great change.
  • Accept that technical aptitude is not enough. Familiarity with technology and improvement in critical thinking, judgment and leadership will define accounting professionals in the future. “This powerful combination of our technical expertise, technological understanding and enhanced human skills are foundational to positioning ourselves for a brighter future.”
  • Challenge what it means to be an accountant. That means providing higher-value strategic guidance in core service areas, broadening tax practices for an integrated life planning approach, and extending assurance into cybersecurity risk management, sustainability and supply chain.
  • Embrace a disruptive mindset. “We need to shift our thinking from what our profession is and what we do today to what our profession should be and what we need to be doing tomorrow,” he said.

    Tracey Golden

As of June 1, Reeb will serve as vice chair of the Association of International Certified Professional Accountants, the unified voice of the AICPA and the Chartered Institute of Management Accountants (CIMA), and will work closely with the Association’s incoming chair, Amal Ratnayake.

Reeb has held several volunteer leadership positions at the AICPA, having previously served as vice chair, a member of the board of directors and governing council, and secretary of the political action committee.

Tracey Golden, an audit partner with Big 4 firm Deloitte, was voted in as vice chair.

AICPA Financial Reporting Executive Committee Taps BDO’s Angela Newell as Chair

Angela Newell

Angela Newell

The AICPA has named Angela Newell as chair of the Financial Reporting Executive Committee, or FinREC.

Newell, based in Dallas, is a national assurance partner for Chicago-based BDO USA (FY18 net revenue of $1.46 billion). FinREC serves as the AICPA’s official voice on financial reporting matters and develops guidance on accounting for specific industries. The committee’s membership includes representation from business and industry, public practice and academia.

“Angela brings a unique skill set to FinREC, having experiences in both public accounting and industry, coupled with her deep knowledge of GAAP,” says Jim Dolinar, FinREC’s outgoing chair and a partner at Crowe LLP. Newell will succeed Dolinar after the committee’s May 2019 meeting.

In her role at BDO, Newell works with audit engagement teams to determine the appropriate accounting for a variety of topics. In addition, she has played a key role in the firm’s response to the new revenue recognition and leasing standards.

Prior to joining BDO, Newell served as vice president and corporate controller for Fiesta Restaurant Group in Dallas, and vice president of revenue assurance and corporate controller for Clearwire Inc. in Bellevue, Wash.

AICPA Survey: U.S. Business Executives Grow Gloomier About Global Economy

Business executives’ outlook on the global economy slid sharply over the past year, amid concerns about trade conflict and other business impacts, according to the first-quarter AICPA Economic Outlook Survey.

A little more than a third (34%) of survey respondents say they are optimistic about prospects for the global economy over the next 12 months, compared to 40% last quarter and 71% a year ago. Optimism about the U.S. economy has also declined over the past year but remains unchanged from last quarter at 57%.

“Trade tensions, the cooling economy in China, the looming overhang of Brexit on the United Kingdom and European Union, a series of regional conflicts – all of these have contributed to a sense of uncertainty and pessimism about the global economy,” says Ash Noah, managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants, the global organization that includes the AICPA and the Chartered Institute of Management Accountants. “On the other hand, we’re seeing a bit more of a stable outlook for the U.S. economy this quarter.”

Expectations for profit and revenue growth over the next 12 months edged back up after a sharp drop last quarter. Profit growth estimates increased to 3.6% from 3.4% last quarter (the lowest rate since the second quarter of 2017), while revenue growth expectations rose a tick to 4.4% from 4.3%. Both profit and revenue growth forecasts are well below those from a year ago.

The survey polls CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.

Other key findings of the survey:

  • The percentage of U.S. executives who expressed optimism about their own company’s prospects over the next 12 months fell from 68% to 65%, quarter over quarter.
  • Survey respondents who said they expect their organizations to expand in the coming year also fell slightly, from 67% to 66%.
  • Some 43% of business executives cited a global economic slowdown as their biggest concern regarding rising trade tensions, up from 36% who said the same in the third quarter of 2018, the last time the question was asked.
  • Most U.S. business executives (71%) see a neutral impact to their company’s bottom line from Brexit, but the percentage who see a negative impact rose to 16% from 4% in the second quarter last year, the last time the question was asked.
  • After availability of skilled personnel, the No. 2 and No. 3 challenges cited for businesses were “domestic compensation” and “employee and benefit costs,” respectively. The latter two flipped places in the past quarter.

Former AICPA Chair, Tommye Barie, Joins Succession Institute

Tommye E. Barie

Tommye E. Barie has joined the Succession Institute as senior consulting shareholder.

Barie has served as a partner assisting not-for-profit and government clients at Atlanta-based Mauldin & Jenkins (FY18 net revenue of $50.6 million) as well as chair of the AICPA for 2014-2015. She currently represents the U.S. as a board member of the International Federation of Accountants (IFAC) and serves on the Board of the National Association of State Boards of Accountancy’s Center for Public Trust.

William (Bill) Reeb, CEO of Succession Institute and a 2018 IPA Most Recommended Consultant, says he has enjoyed working with Barie through the AICPA. “We couldn’t be more excited about her joining us at SI given her breadth of skills, experience and leadership attributes.”

Dominic Cingoranelli, executive vice president of consulting services at Succession Institute, says, “She is terrific, and with her awesome background in the profession, Tommye will be a key resource for our clients.”