Accounting
Developing a growth mindset culture in your accounting firm
The irony of accounting training runs deep: While we master complex regulations and ever-changing standards, this very expertise can create resistance to growth. Our profession’s focus on precision and compliance often breeds a fixed mindset — one that values being right over being adaptable.
Think about your last team meeting. Did anyone challenge the status quo? Suggest a new approach? Or did everyone nod along, staying safely within the lines of “how we’ve always done it”?
This fixed mindset carries a steep price tag. While technical expertise remains critical, it’s no longer enough. Today’s landscape demands innovation, adaptability and creative problem-solving — qualities that wither under rigid thinking.
fran_kie – stock.adobe.com
Consider how many opportunities your firm might be missing. Are you still doing things manually that could be automated? Are your client conversations focused solely on compliance rather than strategic guidance? These are symptoms of fixed thinking limiting your firm’s potential.
When team members operate from a fixed mindset, they:
- Avoid challenges for fear of failure;
- See effort as fruitless;
- Ignore useful feedback; and,
- Feel threatened by others’ success.
The result? Stagnant growth, missed opportunities and a
Watch for these warning signals in your practice that your growth mindset needs a reset:
- Team members who respond to new tech with, “That won’t work here.”
- Staff who hide mistakes rather than learn from them.
- Knowledge hoarding instead of sharing.
- Client relationships that haven’t evolved beyond compliance work.
- Resistance to training outside direct job responsibilities.
Steps to foster growth mindset
Transforming your firm’s culture starts with small, intentional changes that challenge fixed thinking patterns. Here’s how to begin:
1. Reframe challenges as learning labs. Create designated “experiment zones” where teams can test new approaches without fear of failure. This might mean setting aside time for process improvement, brainstorming or creating pilot programs for new service offerings. For example, dedicate the first hour of each week for teams to explore process improvements or automate repetitive tasks.
2. Build safe-to-fail environments. Implement a “learning from mistakes” ritual in team meetings where leaders share their own missteps and the insights gained. When mistakes are viewed as data points rather than disasters, innovation flourishes. Consider creating a “Lessons Learned” channel in your communication platform where team members can safely share their experiences. The key is making these sharing sessions solution-focused rather than blame-oriented.
3. Design effective feedback loops. Move beyond annual reviews to create regular touchpoints for growth-oriented feedback. Focus on effort, strategy and progress, rather than just outcomes. Ask questions like “What did you learn?” before “What did you achieve?” Structure these conversations around three simple prompts: What’s working? What could be better? What support do you need? This approach keeps feedback constructive and forward-looking.
4. Celebrate growth moments. Recognize and reward learning initiatives, not just billable achievements. This might mean highlighting team members who master new skills, implement innovative solutions, or help others grow. Create a monthly spotlight program that showcases different types of growth — whether it’s someone teaching themselves a new software, improving a client interaction, or finding an innovative solution to a recurring problem.
5. Lead as a ‘Connected Leader.’
6. Embrace vulnerability. Share your own learning journey openly. When leaders acknowledge their challenges and growth areas, it creates psychological safety for others to do the same. This might look like:
- Starting team meetings by sharing a current learning challenge.
- Being transparent about your own professional development goals.
- Openly discussing situations where you needed to pivot or adapt.
- Asking for feedback on your leadership style.
7. Support continuous development. Invest in diverse learning opportunities beyond technical training. Consider programs in emotional intelligence, client communication or emerging technologies.
- Creating learning partnerships across different experience levels.
- Rotating team members through different types of client engagements.
- Supporting certification in emerging areas like data analytics or advisory services.
- Implementing cross-training programs that build versatility.
8. Create mentorship momentum. Establish mentorship programs that cross generational and departmental lines. Fresh perspectives emerge when different viewpoints and experiences collide. Consider:
- Reverse mentoring programs where younger staff teach technology skills.
- Cross-functional mentoring that pairs tax and audit professionals.
- Group mentoring sessions that foster collaborative learning.
- Regular mentor training to ensure effective guidance.
9. Measure success beyond the numbers. Traditional metrics tell only part of the story. To track your firm’s growth mindset evolution, think about these new growth indicators:
- Number of new processes or approaches tested;
- Cross-training participation rates;
- Client service expansion metrics; and,
- Team member skill development progress.
You should also pay attention to these cultural transformation signs:
- Increased question-asking in meetings;
- More collaborative problem-solving;
- Voluntary knowledge-sharing initiatives; and,
- Reduced resistance to change.
And you can judge the long-term impact by:
- Improved staff retention;
- Expanded service offerings;
- Deeper client relationships; and,
- Enhanced firm adaptability.
Creating a growth mindset culture adds adaptability and innovation to your firm’s core strengths. When teams feel empowered to learn, experiment and grow, they naturally deliver better results for clients and the firm.
Start small, stay consistent, and watch your team transform from task-completers to innovative problem-solvers.
Where will you begin? Perhaps it’s time to schedule that team meeting — not to present solutions, but to ask questions and invite new possibilities.
The Internal Revenue Service and the Treasury Department issued proposed regulations for
In conjunction with the proposed guidance, the IRS posted a draft version of a new
The Treasury and the IRS said Monday they proposed the guidance to improve the IRS’s ability to administer the rules in the tax law governing the distribution of stock and securities of a controlled corporation, and to ensure that corporate separations satisfy the requirements to qualify for tax-free treatment. The proposed reporting regulations require certain filers to attach the new Form 7216 to their federal income tax return to provide data to the IRS about their multi-year corporation separation. Generally, filers would include the distributing corporation, the controlled corporation and certain significant shareholders or security holders of the distributing corporation.
The increased reporting requirements under the proposed reporting guidance would allow the Treasury and the IRS to provide increased transactional flexibility through the proposed regulations. Some examples of this increased transactional flexibility include addressing retention of controlled corporation stock, monetization transactions and other significant issues arising from multi-year transactions.
The IRS said it intends to follow these proposed regulations when it issues private letter rulings about certain corporate separations. The IRS plans to issue an update to Rev. Proc. 2024-24 to incorporate these proposed regulations into the procedures for requesting such private letter rulings.
The Treasury and the IRS are asking for comments on both the proposed regulations and the new form. They’re encouraging commenters to use the
The International Ethics Standards Board for Accountants plans to tackle a
The goal is to develop a culture and governance framework that promotes, supports and reinforces a high standard of ethical behavior by a firm’s leadership, other partners, and staff across all of the firm’s services. That way it will develop a reputation as a highly ethical firm, avoiding the risks of unethical behavior and strengthening public trust and confidence in all its services.
The report highlights the critical role of ethical culture and governance in addressing issues of unethical behavior within accounting firms. An IESBA working group on firm culture and governance did outreach and research last year and found some of the main drivers of an ethical firm culture include ethical leadership, transparent accountability mechanisms and governance frameworks that embed ethical values across all service lines. The report stresses the importance of transparent and ethical leadership, firm-wide accountability mechanisms and independent input. Performance incentives should align with ethical behavior, continuous ethics education, and a culture of open discussion and challenge.
Based on the working group’s conclusions and recommendations, the standard-setting project plans to develop a principles-based culture and governance framework for accounting firms that promotes, supports and reinforces a high standard of ethical behavior across all their professional services.
As part of this initiative, the IESBA intends to develop non-authoritative materials to raise awareness about the importance of ethical behavior in accounting firms and support firms with guidance on embedding ethics into their strategies and operations. These will also help involve other stakeholders who might contribute to developing an ecosystem for highly ethical accounting firms.
The IESBA plans to host a series of in-person and virtual global roundtables in March and April to gather input from a wide array of stakeholders. The in-person roundtables will be held in New York City; Melbourne, Australia; Brussels, Belgium; and Kuala Lumpur, Malaysia. Further details will be announced in the future.
Victor Machado/Bluepeach
“Ethics is foundational to the work of all accounting firms and all the professionals therein,” said IESBA chair Gabriela Figueiredo Dias in a statement Tuesday. “It is their gateway to public trust in their professional services. I commend the working group on tabling a comprehensive report, identifying the key areas of focus we will be probing carefully and systematically, in collaboration with stakeholders, as we seek to develop a global framework for culture and governance for firms. It is our strong conviction that this framework will enable firms to be highly ethical firms consistently, strengthening their resilience against risks of unethical behavior, maintaining a good reputation, and ensuring their long-term sustainability to serve clients, investors, other stakeholders and the public interest.”
The issue of accounting firm culture and governance is a strategic priority for the IESBA after a series of high-profile cases of unethical behavior in accounting firms in several parts of the world in recent years. The cases have led to negative consequences for individual accountants and their firms in multiple jurisdictions.
The American Institute of CPAs updated its practice aid on accounting for and auditing digital assets in response to changes in accounting standards.
The updated version of the
The practice aid contains nonauthoritative guidance on how to account for and audit digital assets. It comes in response to a 2023
Some of the new accounting questions answered in the practice aid include:
- Are “wrapped tokens” in the scope of FASB ASC 350-60?
- Are nonfungible tokens in the scope of FASB ASC 350-60?
- Are transaction costs (for example, commissions, gas fees) to acquire crypto intangible assets included in the initial measurement of the acquired asset?
- Are gains and losses from the remeasurement and sale of in-scope crypto intangible assets presented as operating or nonoperating items in the entity’s income statement?
The practice aid now reflects a number of new terms. For example, the term “crypto assets” is no longer in use, and new terms such as crypto intangible assets, in-scope crypto intangibles assets and out-of-scope crypto intangibles assets have been included instead. All the new terms are in the
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