Americans’ Financial Satisfaction Near All-Time High

Although Americans are slightly less optimistic than the last quarter, the average American should be feeling a strong sense of financial well-being, according to results of the AICPA’s Personal Financial Satisfaction Index for the third quarter of this year.

The index shows a 3.6% decrease from the prior quarter. The decline was due to a 2.2% drop in the Personal Financial Pleasure Index, which outweighed a slight 0.8% decrease in the Personal Financial Pain Index. The Personal Financial Satisfaction Index is calculated as the Pleasure Index minus the Pain Index.

The data, combined with the AICPA’s CPA Outlook Index, shows that while Americans are experiencing near record high levels of financial satisfaction, CPA executives have become somewhat more worried about the potential for an economic downturn in the year ahead, the AICPA reports.

“It’s important for Americans to keep in mind that economies are cyclical,” says David Desmarais, a member of the AICPA Personal Financial Planning Executive Committee. “Now is the perfect time for Americans to check in on their financial plans to make sure that everything is in order. That may mean making sure they aren’t overextended with debt (whether it be credit cards, lines of credit, auto loans or home mortgages), and talking to their CPA about their goals, asset allocation, time horizon and risk tolerance.”

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AICPA Announces Annual Leadership Academy Graduates

The AICPA says 36 promising young CPAs from around the country have graduated from its four-day 2019 AICPA Leadership Academy in Durham, N.C.

The AICPA Leadership Academy uses interactive workshops to give participants access to advanced leadership training, networking activities and presentations from some of the profession’s top thought leaders.

The 2019 class discussed key issues and interacted with influential leaders in the profession including AICPA Chair Bill Reeb, AICPA President and CEO Barry Melancon and Mark Koziel, executive vice president of firm services.

“This year’s Leadership Academy class is an impressive group of diverse professionals who are well-positioned to take the next step in their careers,” says Reeb. “New technology is disrupting the profession and creating new opportunities and challenges for CPAs. These talented CPAs are a great example of the forward-thinking leaders who will not only help steer us through this transition but lead us beyond it.”

The AICPA Leadership Academy is meant to serve as a succession plan for the CPA profession, ensuring a strong base of future leaders to address the challenges of an ever-changing global business environment. The event also encourages self-reflection and a thoughtful exploration of how leadership impacts their personal and professional lives.

The program was designed to strengthen and expand the leadership skills of promising young professionals while they network with a peer group of talented and motivated CPAs. The 2019 participants comprised the eleventh graduating class, and nearly 400 CPAs have now graduated from the program.

“The Leadership Academy really helped me identify what skills I need as I establish myself as a leader in the profession,” says Brittany Cummings, 2019 Leadership Academy graduate. “The program has given me the tools and confidence to navigate our changing profession successfully and strengthened my confidence that I am steering my career in the direction I want it to go.”

This year’s class included representatives from 31 states. Participants were selected from public accounting firms of all sizes, business and industry, academia and consulting firms.

The full 2019 Leadership Academy class:

  • Lauren Aldrich, Heard McElroy & Vestal, Shreveport, La.
  • Robert Allen, The Allen CPA Firm, PLLC, Houston
  • Karen Bartlett, O’Brien Shortle Reynolds & Sabotka, Rutland, Vt.
  • Jose Borbon, Kearny Bank, Fairfield, N.J.
  • Chris Brown, Beall Barlcay & Company, Fort Smith, Ark.
  • Clara Cohen, Bedrock Wealth Strategies, Elmsford, N.Y.
  • Kelly Crow, Reynolds Bone & Griesbeck, Memphis, Tenn.
  • Brittany Cummings, BKD, Springfield, Mo.
  • Sarah Flischel, Kundinger Corder & Engle, Denver
  • Jessica Foster, Cohen & Company, Youngstown, Ohio
  • Austin Foust, HoganTaylor, Tulsa, Okla.
  • Amanda Gessner, Schmitz-Holmstrom, Bismarck, N.D.
  • Matt Heo, Aronson, Rockville, Md.
  • Michael Jamison, OnTarget CPA, Indianapolis
  • Andrew Jordan, Jordan CPA Services, Carthage, Mo.
  • Shakor Jukes, Target, Minneapolis
  • Brian Klintworth, HBE LLP, Lincoln, Neb.
  • Jennifer Koffman, Bellows Associates, Plantation, Fla.
  • Ryan LaRue, StoneTurn, Boston
  • James McGettigan, Stoker Ostler, a part of BMO Financial Group, Scottsdale, Ariz.
  • Lacy McMoarn, Marcum, Portland, Maine
  • Jessica Mytrohovich, Georgia Society of CPAs, Atlanta
  • Eugene Park, HeinfeldMeech Co., Phoenix
  • Becky Peterson, Woltman Group, Sioux Falls, S.D.
  • Colin Proctor, Marshall Retail Group, Las Vegas
  • Charlene Rhinehart, CEO Unlimited, Chicago
  • Alexandria Romero, McPherson Goodrich Paolucci & Mihelich, Pueblo, Colo.
  • Adam Schrom, Bloomberg BNA, Arlington, Va.
  • Navneet Sharma, KNAV, Atlanta
  • Jordyn Sherman, Advantis Credit Union, Clackamas, Ore.
  • Ashley Sullivan, Haddox Reid Eubank Betts, Jackson, Miss.
  • Dalton Sweaney, Gray Salt & Associates, Claremont, Calif.
  • Jana Walker, Northwestern Oklahoma State University, Alva, Okla.
  • Brittany Wilson, MHP, Cheyenne, Wyo.
  • Kendall Wilson, Dixon Hughes Goodman, Raleigh, N.C.
  • Samantha Young, Cohos Advisors, Lancaster, N.H.

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AICPA Offers Guidance on Working With New Clients in Cannabis Industry

The cannabis industry offers CPAs a bevvy of prospective new clients. But the nature of the industry also opens to door to several potential challenges and pitfalls, the AICPA says.

Several states have legalized marijuana use for recreational or medical reasons, creating a burgeoning industry of growers, distributors and retailers. Revenue from medical and recreation cannabis is estimated to reach $12 billion this year. The accounting profession, similar to the legal profession, can offer its expertise to clients in the cannabis industry, such as auditing and taxation services, as well as expert guidance for avoiding fraud or theft.

With these opportunities come serious downsides, as marijuana remains illegal at the federal level. As a result, few banks are willing to deal with players in the industry, leaving it largely a cash operation. CPAs providing business advisory or other accounting services to clients in the cannabis industry need to navigate the nuances of federal and state law and to avoid being charged criminally, potentially resulting in fines, jail time or the loss of their license.

The American Institute of CPAs details the risks and opportunities for CPAs working in the cannabis industry in the latest Eye on Fraud report. It offers a review of many of the State Boards of Accountancy positions on working in the cannabis industry and highlights some of the issues and challenges facing both the cannabis industry and CPAs supporting it.

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Global Startup Accelerator Program for Accounting Profession Seeks New Applicants

The AICPA and CPA.com are looking for early-stage companies to apply for a startup accelerator that focuses on innovation in accounting, finance and regulatory technology.

Successful applicants for the program can access the expertise of senior leaders in the ACIPA and CPA.com, CPA firm leaders, Chartered Global Management Accountants (CGMAs) in major corporations and other influencers. In addition, they can qualify for up to $25,000 in funding.

“We offer deep insight into the rapidly changing dynamics of the accounting profession for participants in the accelerator,” says Lawson Carmichael, COO of the association. “In turn, we understand that innovation in the profession can come from all sources and we want to embrace and support change and better quality.”

Applications for the latest accelerator class are due Nov. 30, 2019.

The startup accelerator program is open to entrepreneurial companies worldwide. For questions about the program, email mark.brooks@aicpa-cima.com or kacee.johnson@hq.cpa.com. To apply, visit aicpa-cima.com/accelerator.html.

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Former AICPA Chair Joins Business Learning Institute

Former AICPA Chair Kimberly Ellison-Taylor, global executive director of finance thought leadership for Oracle, has joined the Business Learning Institute to offer a variety of courses on the intersection of emerging technologies and the future of work and finance.

Among her BLI course titles are:

  • Are We There Yet? Why Not?
  • Fingers Crossed Is Not A Path To Double-Digit Revenue Growth
  • Getting Comfortable With Being Uncomfortable
  • Inclusive Leadership: Does It Really Work?
  • Leading From The Middle
  • Why Standing Still Is Not An Option
  • Will SkyNet Become Self-Aware?

Kimberly Ellison-Taylor

“Her depth of knowledge is nearly unequaled, and her devotion to teaching and lifelong learning will help BLI clients master the skills they’ll need to succeed in a changing and complex world,” says Tom Hood, president and CEO of the Business Learning Institute and the Maryland Association of CPAs. “The skills she brings to the Business Learning Institute are exactly what we need to help our profession become more future-ready.”

It’s a homecoming of sorts for Ellison-Taylor, who was born and raised in Baltimore and served as chair of the Maryland Association of CPAs’ board of directors during the 2010-2011 fiscal year.

Ellison-Taylor’s career achievements include leadership roles at Oracle, Motorola, KPMG, Prince George’s County Government and NASA’s Goddard Space Flight Center. She has received numerous awards and recognitions for her leadership in the profession and serves as a member of the AICPA Assurance Services Executive Committee and as vice chair for the AICPA’s National Commission for Diversity and Inclusion.

Virginia CPAs Commit to Advance Diversity and Inclusion in the Workplace

The Virginia Society of Certified Public Accountants (VSCPA) has joined a coalition aiming to advance diversity and inclusion in the workplace. More than 750 CEOs have come together for CEO Action for Diversity & Inclusion™.

Signing on means the society is pledging to cultivate a workplace where diverse perspectives and experiences are welcome. The signatories have already shared more than 700 ideas for actions through CEOAction.com.

“Diversity and inclusion is one of our core organizational values as we strive to foster an environment that respects and reflects a diversity of people, cultures and perspectives,” says Stephanie Peters, VSCPA president and CEO. “The evidence is clear that businesses with diverse talent are far more innovative and achieve greater financial results, and it’s a critical focus for future relevancy of the CPA profession.”

A recent study found that 85% of those surveyed reported that diversity is a key component to fostering innovation. Data from the AICPA shows that minorities represent only 1 in 6 professionals at accounting firms nationwide, yet by 2044, minorities will become the majority of the U.S. population.

The pledge was launched in 2017 and ramped up following an incident in September 2018 when Botham Jean, an African-American associate at PwC, was shot and killed in his Dallas home by an off-duty police officer. PwC was a founding signatory of the pledge.

The AICPA has put together a toolkit (PDF) on how to get started with the pledge.

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.

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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.

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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.

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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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