Connect with us

Accounting

50 years in accounting | Accounting Today

Published

on

In 1971, armed with a bachelor’s degree in business administration as well as an MBA with a concentration in accounting, I launched into my first job as a junior accountant at Coopers & Lybrand, a pillar of what were then known as the Big Eight accounting firms. My colleagues and I wore suits and ties to work every day (before ties became less fashionable and workplaces became semi-virtual) and we mainly provided audit and tax services. 

Fast-forward three years to Aug. 2, 1974. “All in the Family” was the No. 1 TV show in America and “Annie’s Song” by John Denver topped the Billboard music charts. That same day I joined my brother at a nascent firm called Amper, Politziner & Mattia — which ultimately became today’s EisnerAmper, and which has been my professional home for 50 years.

As I look back on five decades-plus in the profession, it has been substantially transformed. Firms like EisnerAmper now provide a wide range of accounting and consulting solutions, ranging from traditional audit and tax work to advisory and outsourcing services. This expanded range of solutions includes my own specialty in forensic accounting, a practice I helped build and in which I take great pride. Many firms have created separate entities for their advisory services and audit functions. 

Technology has had a huge impact, accelerating tasks that were once painstakingly manual, freeing up people to do more strategic and value-added work. Our teams now boast more diverse backgrounds and varied experiences. In addition, new organizational structures such as private equity ownership and employee stock ownership plans have begun to take their place alongside the traditional partner model, bringing fresh financial and intellectual capital to help firms evolve and expand.  

What I often tell younger colleagues is that, despite the passage of time, the fundamentals that allow a person to succeed in accounting haven’t changed. This remains, at its core, a service-driven and relationship-based business. Knowledge, professionalism, deep insight into clients’ opportunities and challenges, and a passion to help them reach their goals — those qualities still form the basis for everything we do.

Below are some additional thoughts about how to succeed in accounting, informed by my perspective as a long-time practitioner — and someone who has found great professional and personal satisfaction through my engagements with colleagues and clients.   

1. Invest in relationships. If “location, location, location” is the mantra of the real estate and retail sectors, then “relationships, relationships, relationships” is the accounting equivalent. You need to master the principles of accounting, of course. But it’s the relationships you build — by honing your business acumen and actively listening to your clients — that give others a reason to respect you and value your perspective. 

p1a4vh2u6s1lqh1r37fvcg3i1rkhc.jpg

Showing clients that you care about their businesses is also important. Something as simple as calling a client in the evening when they’re not expecting it shows you’re thinking about them. But it conveys even more—that your ethos is to go over and above, that you are committed to exceeding client expectations.

2. Expand your skillset. New entrants into the profession would be well-advised to continually expand their horizons by developing the specialized capabilities that are increasingly in demand in a fast-changing and complex business environment. For example, in just the past few years, understanding the world of digital currency has become a must-have skill in my specialty of forensic accounting. Where the adage in forensic accounting is “Follow the money,” we must now add to that, “Follow the digital money.” 

Similarly, becoming proficient in areas such as technology, corporate strategy, global commerce, law and regulation, and especially soft skills, among others, is the key to adding value for your clients, your firm, and your own career.

3. Stick with it. The learning curve in accounting can be steep, particularly in your “rookie year,” and may be filled with repetitive tasks, deadline pressures, and not a lot of time devoted to creative problem-solving. But the process provides tremendous training for young employees who are willing to learn the business from the bottom up. 

As I mentioned, the profession has evolved and expanded into a wide range of disciplines, and there are many ways for highly talented, motivated, and dedicated individuals to find their niche in the accounting world — just as I did with forensic accounting.

4. Lead with growth in mind. I’d be remiss if I didn’t also offer a few words of advice for accounting firm leadership. In a profession that must constantly attract and retain talent, it’s crucial to keep employees engaged and encouraged. Mentoring is a big part of that process, along with providing a path for associates to enhance their career opportunities and increase their value to the firm. It’s all about creating a work environment that will attract, cultivate, and support the talented people we need to serve our clients — while growing our business in the process.

As someone who has made accounting my life-long vocation, I have found the field to be very rewarding — professionally and personally. Constantly learning and acquiring new skills, building trusted relationships with clients, mentoring young associates, and contributing to the growth of our firm have been the highlights of my career. The practice of accounting keeps evolving, but the satisfaction to be found from working in this vital profession hasn’t changed in more than 50 years. 

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Accounting

Tax scammers on the prowl after hurricanes

Published

on

Hurricane Milton damage in Florida
Destroyed homes after Hurricane Milton in St. Pete Beach, Florida, on Oct. 10.

Tristan Wheelock/Bloomberg

Scammers are using fake charities in the wake of Hurricanes Milton and Helene to harvest personal and financial data from unsuspecting taxpayers.

“You should never feel pressured by solicitors to immediately give to a charity,” said Commissioner Danny Werfel in a statement from the IRS, which issued the warning. “Verify if they’re authentic first.”

Tips to verify charities and spot fake ones:

  • Scammers frequently use names that sound like well-known charities to confuse people. Fake charity promoters may also use bogus emails or fake websites or alter or “spoof” their caller ID to make themselves look like a real charity. Ask the fundraiser for the charity’s name, website and mailing address. Check the Tax-Exempt Organization Search tool on IRS.gov to help find or verify legitimate charities.
  • Never work with charities that ask for donations by giving numbers from a gift card or wiring money. It’s safest to pay by credit card or check, and only after verifying the charity is real.
  • Scammers want both money and personal information. Never disclose Social Security numbers, credit card numbers or personal identification numbers
  • Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time.

The IRS has other background on its Charity and Disaster Fraud page.

Continue Reading

Accounting

The digital transformation of audit: Our Moneyball moment

Published

on

In today’s rapidly evolving business landscape, the expectations placed on auditors and advisors are shifting significantly. 

As finance functions within organizations embrace technological advancements, there is mounting pressure on public accounting firms to match or exceed the pace of change and sophistication of their clients to perform their expected role.

Recent industry research indicates clients are noticing this growing gap in capabilities. Businesses are actively seeking accounting firms offering a more progressive approach, with 55% wanting an audit that can scale and support their growth goals and expectations. Further, 67% feel audits can provide valuable insights in these areas, but feel the current process is hindering this (“What modern businesses want from their audits”). 

Many accounting firms are excited by high-margin and high-growth advisory services. There is a huge amount of opportunity in this area, including services such as ESG, digital transformation, and AI strategy. 

But how can a firm pitch a credible offering to a company in these areas if their core services such as audit and tax are still highly manual? Discussing cyber risks and data security feels disingenuous while their teams drown in spreadsheets as their desktop software synchronizes.

Public accounting firms need to eat their own dog food, digitally transforming their own business to provide a credible and broad suite of valuable compliance and advisory services to clients. These war stories and firsthand experiences are what bring to life the page in the sales brochure.

The Oakland Athletics show the way

Over the past decade, technology has made significant advances. Just look at the NASDAQ’s most valuable companies by market capitalization: Apple, Microsoft, Alphabet, Amazon, and NVIDIA — all companies built on the value of technology and data.

Yet, in the auditing profession many firms remain cautious over new technology. Some recite that audit standards have not been updated to endorse such technologies and until this happens, they won’t change: “The audit standards are still written assuming the auditor cannot review all transactions and must sample, so why would I use data analytics to analyze all the transactions?”

This mindset has led many to stick to traditional methods, feeling unable to change despite the clear benefits that modern technology can offer.

This might be audit’s Moneyball moment.

The story of the 2002 Oakland Athletics is well known and has been told more broadly through the hit film “Moneyball,” starring Brad Pitt. 

The rules of baseball do not significantly change from year to year. There was no major change ahead of the 2002 season. Yet one team decided to take a new approach to the game.

Auditing technology concept image

WrightStudio – stock.adobe.com

Rather than leaning on the traditional scouting approaches and views of those who had been in baseball all their lives, Billy Beane decided to embrace statistical analysis. As the general manager, he brought onto his team players undervalued by these traditional scouting methods. He adopted a data-driven approach to team-building and playing the game of baseball.

So, the rules of the game hadn’t changed, but one team decided to play the game differently within those existing rules. The Oakland Athletics chose to use data over the traditional approach. They set new records and stood shoulder-to-shoulder with teams that had far greater resources. 

Now every baseball team has embraced what Billy Beane started, and we have seen the same in other sports like the football. “Analytics” was originally scoffed at by commentators and former players. Now it is an integral part of everything from draft selection to in-game strategy.

The audit standards are akin to the rules of baseball. The rules do not need to change for a better way to play the game to be possible. The standards do not need to change for there to be a better way of auditing.

Digital audits are a way of leveraging data, data analytics, and modern technologies to deliver more efficient and valuable audits, while safely complying with the existing audit standards.

The role of governing bodies: Ensuring innovation and progress

Professional bodies, regulators, and standard-setters play a crucial role in helping firms navigate change. Innovation within firms brings greater creativity and variation to the way traditional services like audit are being performed. While evolving the rulebook is required, the process to change audit standards is necessarily deliberate, considered, and therefore slow. 

So, governing bodies must stay close to firms and the solution providers they are working with to drive innovation. Understanding new techniques as they are being conceived and trialed, not after they have matured and then witnessed in an audit inspection, could shorten this feedback loop by multiple years.

This level of transparency and collaboration requires trust. Professional bodies who see demand from their members for support as an opportunity to step in as a direct solution provider should be mindful of the impact. This changes relationships with solution providers and introduces conflicts to their role of advancing the profession.

In the U.K., there have been several positive initiatives aimed at fostering the collaborative advancement of the audit profession. Following comprehensive government-commissioned reports such as the Kingman and Brydon Reviews, UK audit firms have been redefining their operations and what an audit represents. 

The Financial Reporting Council, the U.K.’s audit regulator, has launched sandbox and other experimentation initiatives to support firms exploring more innovative auditing techniques. The professional body, the Institute of Chartered Accountants of England and Wales, has also embedded modern commercially available auditing technology directly within their accountancy exams to teach students digital auditing skills.

The U.S. could learn a lot from experiences on the other side of the Atlantic … .

The changing landscape of solution providers

For many years, public accounting firms have faced limited audit solution choice. 

This lack of competition has caused the market to circle the drain. Accounting firms have felt trapped by audit methodologies written generations ago, housed in desktop software which survived the millennium bug. This has then caused a chronic underinvestment in the market by the incumbent providers.

But the rise of cloud computing is driving a movement towards smaller, more agile providers, often with Big Four experience. They have developed enterprise-ready platforms leveraging the infrastructure and security of Microsoft Azure and other cloud providers. This means David can take on Goliath — but this time with more powerful capabilities.

The competition brought by more agile solution providers benefits CPA firms by:

  1. Offering more choice and new ideas;
  2. Providing more implementation support and guidance; and,
  3. Pressuring incumbents to modernize their offerings.

These solution providers are still evolving. Some come heavily backed by venture capital and private equity. Others have been successful in organically growing their business, as large firms early-adopted their solution. While the difference may seem subtle, the question remains whether in the long term these new vendors will take on, or be acquired by, the larger incumbent vendors.
This may ultimately come down to product strategy. Those offering narrow point-solutions may more naturally become target acquisitions for the large vendors with holes in their offerings. Or as territory defense. Those building rival suites, or committing to progressive partnerships to create alternative suites will more likely go long and create a healthier competitive landscape into the future.

Stop talking about the future of audit

There is a generational change in motion within the audit profession. Almost every CPA firm will review, and likely change, their audit technology in the next three years. 

They will ditch the desktop. But will they simply crawl to the cloud, doing the same work in a different place?

Or will they deploy digital, embracing data and automation to skip a step and make a more progressive change?

Firms that go digital will achieve greater efficiencies through automation. But more important, they will strategically position themselves to more easily embrace future technology advancements — embedding the skillsets and data disciplines required to capitalize on artificial intelligence and all the new innovations we are yet to experience.

And it is worth considering given the severe talent challenges — firms that are embracing technology are more attractive employers for those now looking to start and continue a career in accounting.

Traditional British pubs have a sign behind the bar stating the beer will be free tomorrow. But tomorrow never comes.

It’s time to stop listening to the theoretical presentations on the future of audit. The technology is here. More innovative innovation partners are here. CPA firms are implementing a digital audit approach and being successful. 

The relevance of the audit service to the needs of modern business may be judged in future years on the strategic decisions that accounting firm leaders make over the coming years.

Continue Reading

Accounting

Artificial intelligence and the risk of inflation expectations

Published

on

The arrival of artificial intelligence promises game-changers in all industries. But what if the rise of AI created new ways to simplify things — as well as a whole new set of complex client expectations for accountants? 

As businesses expect AI-driven solutions, accountants could find that what initially were accepted as benefits in cost-efficiency, speed, and enhanced service could be the most unexpected complications. Let us explore how AI’s promise to transform the accounting profession might go the unexpected way. 1. Faster service: When speed feels too fast for comfort. Where AI can automate repetitive tasks, accountants will process data faster than ever. This presumes that clients value that speed. 

Increased speed might mean that clients will demand information even faster than the speed at which it is created, without stopping to think about any deep analysis or nuanced judgment. 

The new challenge? Keeping up with unrealistic demands.

2. Value for money: The hidden cost of always expecting more for less. AI’s ability to perform tasks with minimum human intervention promises cost savings. However, the drive toward cost efficiency can be detrimental because it can feed into clients’ mindset that the value of professional accountants’ services would continue to drop. 

What is often left unsaid is that AI tools are costly in terms of investments in technology, learning, training, and keeping up with constant updates, and hence AI tools are not cost-neutral. Accountants will likely not sell any AI tool independently — so by itself, any AI tool won’t be a profit center. 

What is the paradox? Clients expect more for less, while accountants have to deal with higher costs to operate their practices. 

3. Better service: When AI lacks the human touch. Clients may also expect that AI will enhance service quality. After all, AI will be able to recognize patterns, predict trends, and perform complex calculations. 

In businesses where AI-driven processes take precedence over traditional ways of doing things, clients may miss the personal counsel, insight, and display of empathy accompanying human contact. AI, for all its power, cannot establish relationships and provide specific advice relevant to a client’s particular circumstances. 

The paradox arises: Better service in terms of raw data analysis does not equate to better service as perceived by the client.

4. Greater privacy: AI’s paradox of data security. Where there is AI, there is the ability to sift through enormous amounts of data at unbelievably fast speeds. This can open up a broad avenue for breach of privacy. At the same time — and quite rightly — all clients will expect AI to handle their sensitive financial data with more security than ever. 

AI knowledge

Катерина Євтехова – stock.adobe.com

Yet the same AI systems that make accounting tasks quicker and more efficient are those prone to cyber-attacks, breaches, and intentional or unintentional mismanagement of sensitive information. It is an expectation, but the reality is that AI systems may not have perfect security, especially when it comes to human use of AI tools. Hence, it is essential to have an “AI use policy.

5. More predictability: When clients expect crystal-ball forecasting. AI’s predictive powers promise more accurate financial forecasting, and clients may believe that AI will provide flawless predictions about future market trends, tax burdens, and revenue streams. 

However, AI is not perfect, and AI predictions are based on historical data that cannot predict unforeseeable events such as crashes, regulatory shifts, or political upheaval. 

As clients become more reliant on AI predictions, the likelihood increases that expectations will be set unrealistically high, and frustration will mount when predictions inevitably prove imperfect.

Navigating the AI-fueled expectations

With the rise of AI comes a whirlwind of expectations — faster service at lower costs, superior quality, greater privacy, and predictive accuracy. While AI can deliver on many of these promises, accountants should be aware of the new pressures created by such expectations. 

The future in accounting will be about mastering AI tools and managing the evolving and sometimes unrealistic demands coming hand in hand with those tools. As client expectations continue to grow, so must accountants balance the capabilities of AI with the irreplaceable value of human insight, judgment, and relationship-building.

It’s simple: Although AI may enhance processes, it cannot replace accountants’ multifaceted expertise. Accountants will need to communicate that to their clients effectively to be in a better position to turn these challenges of AI into opportunities for more profound, more impactful, more value-added services.

Continue Reading

Trending