Accounting
The most-read stories of 2024 in accounting
Enjoy complimentary access to top ideas and insights — selected by our editors.
2024 was a significant year across the accounting profession, with a host of pressing issues such as the worsening talent shortage, moves by top firms like PwC and RSM US restructuring their operations, the effect of President-elect Donald Trump’s return on the tax landscape, and more.
With that in mind, here are our most-read stories from the past 12 months, highlighting some of the developments that caught our readers’ attention.
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Why accounting firms are bleeding talent
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The talent shortage facing the accounting profession is well known at this point, as graduates with accounting majors are deterred by uncompetitive wages and a lack of education on career paths — while existing accountants leave the field entirely. Amid this identity crisis, firms are starting to look inwards for solutions.
Data from the most recent
But many in the field say the hurdles to becoming a licensed CPA, including the test itself, are simply not worth the payoff.
Appeals court reinstates BOI injunction
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A federal appeals court has reversed itself, reinstating an injunction on beneficial ownership information reporting by businesses only days after lifting it.
On Dec. 23, a panel of the U.S. Court of Appeals for the Fifth Circuit
The plaintiffs petitioned the full appeals court for an en banc rehearing to consider additional issues in the case. They
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Reshaping the pyramid
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Consider the pyramid.
For much of its modern history, the public accounting profession has relied on the pyramid — at least metaphorically — in building both the ownership and management structures of CPA firms, and it has proven a remarkably enduring model, to the point where it was effectively the only model from the 1930s up until the late 1990s, and remained overwhelmingly the most common model for the first two decades of the 21st century.
But while the pyramids of Giza look likely to last far into the future, the pyramid model of accounting firms is facing serious challenges, specifically over the last four years, as more and more firms experiment with a host of new or newly popular models for how firms can be owned and managed.
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Accounting talent shortage worsens
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The shortage of accounting talent continues to plague the profession and appears to be getting worse. As the pipeline dries up, 83% of senior leaders report a talent shortage this year, up from 70% in 2022, with 10% this year saying it’s worsening, according to a
More than 300,000 accountants and auditors left the accounting profession between 2020 and 2022, a 17% decline, according to
As outsourcing gains wider use, the report found 90% of surveyed CFOs outsource some of their accounting functions, and 90% of those respondents said they can easily find qualified accountants when they need them. That enables them to leverage specialized talent to maintain efficiency and focus on strategic goals.
Al Drago/Photographer: Al Drago/Bloomberg
Trump’s victory: What it means for taxes
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After a presidential campaign that saw a steady stream of tax proposals aimed at a wide range of constituents, Donald Trump will return to the White House next January, when he can begin trying to deliver on those promises.
One of the most significant areas of focus will be on the expiring provisions of the former and future president’s 2017 Tax Cuts and Jobs Act, which was a signature achievement of his first term. Republicans have taken control of the Senate, but control of the House remains in question as votes continue to be counted.
Extending all the provisions could cost as much as $4.6 trillion, according to Rochelle Hodes, Washington National Tax Office principal at Top 25 Firm Crowe.
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The riskiest jobs in accounting
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We’ve been hearing it for years, but especially in 2023 as generative AI rocked the world: Automation and artificial intelligence are here and they’re coming for all the routine, mundane, repeatable tasks that have traditionally been accountants’ bread and butter.
However, allowing machines to do this frees up human accountants for higher-value, strategically oriented tasks that will help firms do more with less in the face of a diminishing talent pipeline and outside disruption. Professionals will be able to work on the things that are really interesting to them and discard all the drudge work that no one ever wanted to do anyway.
Of course, regardless of whether or not anyone necessarily wants to do these things, there are still people whose job it is to do them — at least for now. Because as technology improves, the range of tasks that can be automated will only grow wider, increasing the risk for disruption. This, over time, will greatly alter the shape of the profession and the behavior of firms, which itself will alter career paths and force many out of their comfort zone with little choice but to adapt to these changing circumstances.
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Baby season vs. busy season
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Having a second child wasn’t even in the cards for Erica Goode until she knew she was going to quit her accounting job.
Goode started her career at the Big Four before moving to corporate accounting. Instead of a busy tax season, she had a busy audit season, so when she got pregnant with her first kid she requested a part-time schedule for when she returned from maternity leave.
“I can do the math,” she said. “I realized that my kid was going to spend more of their waking hours with their daycare provider than they would with me, and I just wasn’t OK with that.”
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Accounting standards blamed for lack of accountants
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The 150-hour rule for obtaining a CPA license is getting blamed in many quarters lately for the shortage of accountants, but another culprit may be the proliferation of complicated accounting standards, according to a recent academic study.
The
“The study looks at how growing regulation within accounting and the increase in accounting rules issued by the FASB have changed the accounting profession and the role of the accountant,” said Anthony Le, a Ph.D candidate in accounting at Columbia University, who carried out the study.
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PwC shakes up U.S. firm
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PricewaterhouseCoopers US is realigning its organizational structure across three lines of service — Assurance, Tax and Advisory — starting in July, only about three years after it
A spokesperson said the new structure would better serve client needs, their buying patterns and the market. It takes effect July 1. The new operating committee includes assurance leader Deanna Byrne and tax leader Krishnan Chandrasekhar.
PwC US’s incoming senior partner, Paul Griggs, announced the changes in April via a
Photo courtesy of RSM US LLP
RSM lays off 3% of staff
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Top 10 Firm RSM US laid off 5% of its consulting workforce, as well as an unspecified number of employees in assurance, on Sept. 20.
Employees in the consulting practice were notified in a virtual meeting with the practice leader and a human resources representative on Sept. 20, a source inside the firm who was impacted by the layoffs told Accounting Today.
Approximately 240 employees across the consulting practice were affected, and those employees will finish their projects by early next week, according to an email sent after the meeting. The firm said that it planned no further reductions.
The Financial Accounting Standards Board released an
FASB said public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods starting after Dec. 15, 2026, and interim periods within annual reporting periods beginning after Dec. 15, 2027. But early adoption of the new standard is permitted.
FASB
The update originally said that the amendments are effective for public business entities for annual reporting periods beginning after Dec. 15, 2026, and interim reporting periods beginning after Dec. 15, 2027. But after the update was issued, FASB was asked to clarify the initial effective date for entities that don’t have an annual reporting period ending on Dec. 31 (known as non-calendar year-end entities).
Because of how the effective date guidance was written, those companies could have concluded they would be required to initially adopt the disclosure requirements in an interim reporting period, as opposed to an annual reporting period. FASB’s intention was for all public business entities to initially adopt the disclosure requirements in the first annual reporting period starting after Dec. 15, 2026, and interim reporting periods within annual reporting periods starting after Dec. 15, 2027. It acknowledged there was some ambiguity about that intention in the original guidance, so it has issued the new update to clarify the effective date for non-calendar year-end businesses.
UHY, a Top 50 Firm based in Farmington Hills, Michigan, is expanding its presence in Michigan and Missouri by combining with two firms: Tama, Budaj & Raab, P.C., also headquartered in Farmington Hills, and Botz Deal & Co. P.C., a firm with three St. Louis-based locations in St. Charles, St. Peters and Wentzville, effective Jan. 1, 2025.
Tama, Budaj & Raab dates back over 50 years. All of TBR’s professional and administrative team members will become part of UHY and continue in their current roles, relocating to UHY’s office in Farmington Hills.
Botz Deal was founded in 1969 and provides services to privately owned businesses and their owners, not-for-profit organizations, and governmental entities, as well as individual tax planning and preparation. All professional and administrative team members will become part of UHY and continue in their current roles.
“UHY is proud to welcome TBR and Botz Deal to our growing, forward-thinking firm,” said UHY U.S. CEO Steve McCarty, in a statement Monday. “These combinations exemplify our commitment to strategic growth—expanding within our established markets as well as breaking new ground in targeted regions across the nation.”
Financial terms of the deals were not disclosed. UHY ranked No. 29 on Accounting Today‘s 2024 list of the Top 100 Firms, with $349.7 million in annual revenue. The firm now has over 40 offices and more than 1,800 team members and 150 partners.
Last month, UHY received
Enjoy complimentary access to top ideas and insights — selected by our editors.
Public accounting offers many opportunities for growth, and the proof of this is the rising revenues at most of the firms that submit their numbers in the many surveys. One thing common among those firms is their expanding array of services.
Managing an accounting practice is complicated and involves many functions that need to be carefully calibrated and integrated to achieve success. However, there is one immutable fact, and that is a desire of our clients to engage us for those services. Without that, nothing else matters. Excellence in every other facet of operating the accounting business will not matter. So, how can you grow so that 2025 is your best year ever? You need to offer more services to your current clients and then to new clients.
Growth from existing clients is called organic growth. Growth from new clients is external and arises from marketing activities and client acquisition by purchase or merger. If you want to grow, you need growth from both organic and external sources. How much you want to grow and whether you want to grow has to be strategically determined, but a minimum decision has to be that some growth is needed.
Added sales of new services are more easily obtained from existing clients. There is no selling who you are, your reliability, or your willingness and ability to provide value in everything you do for your clients. Each of these need to be conveyed to new clients before you even get to the pitch of the services you will perform for them.
So go after the easier sales first, i.e., to your existing clients. Here’s a way to get started:
- Identify potential needs of your top 20 business clients.
- Arrange those needs into services you presently offer, and
- Services you do not perform.
- Match the potential needs with this group of 20 clients with services you presently offer.
- Contact five of those clients to obtain an engagement for at least one such service.
- Set a goal of initiating a new service for each of those five clients in the new year.
- If you are unsuccessful with your first five targeted clients, then expand the list until you succeed with five added engagements.
- You can try to introduce each of these 20 and even more clients with added services, but I think setting a goal of five added engagements is a good way to start.
- Expand your service offerings by resolving to learn and gain proficiency in at least one new service during the next year.
- Get started by picking a needed service that you do not perform and use that for your personal growth along with your practice’s growth.
Overly active practitioners might judge my suggestions to be too placid, while many owners and partners who are content with leaving things as they are will judge me to be excessively aggressive. Either way, I do not see how anyone could lose by selling five large clients the services they need and learning a new one for themselves. I view this as a no-lose growth method.
Check out some ideas of added services described in a
Make 2025 your best year ever by doing something new to make it your best year ever.
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