Accounting
Data shows there is room for both advisory and compliance for CPA firms
Accountants need not necessarily abandon compliance work for advisory, as recent data shows that the most successful firms maintain a robust presence in both areas.
This is according to a report authored by professionals at the Center for Accounting Transformation, CPA Trendlines, Avalara and Brigham Young University, which is based on survey responses from 213 accountants at firms of varying size. What they found was that it is perfectly possible for a firm to be successful without necessarily specializing in advisory or, indeed, specializing at all.
Practitioners were asked to rate, on a scale of 1-10, how successful they felt their firm was. They were also asked to rate their balance between compliance and advisory work, with 1 being “we do only compliance work” and 10 being “we do only advisory work.” They then looked at where the most successful firms stood on this compliance-advisory scale.
What they found was that the most successful firms, while leaning slightly more towards advisory over compliance, generally maintained a good balance between the two.
Those who were “highly successful” were rated 5.67 in terms of their balance between compliance and advisory. This number goes down the less successful one’s firm is, but not dramatically so, indicating that while a less advisory-focused firm might not be as successful, the gap is not as large as one might initially think.
Donny Shimamoto, the head of the Center for Accounting Transformation and one of the study’s authors, said what this shows is that firms can choose either advisory, compliance or some mix between the two. And, speaking from his own experience, the success of one can feed directly into the other.
“For example, my firm is pure advisory and we have been around for over 20 years already. What we’ve found though is that we need to ensure that our clients have someone performing the compliance work for them well. Without the strong base in compliance—which provides the reliability of the numbers for analysis—our advisory work may not provide the right recommendations because we are basing them on flawed base information,” he said.
A similar dynamic was observed when considering specialist versus generalist firms. Poll respondents were asked to rate, on a 1-10 scale, their degree of “vertical” specialization (the degree to which a firm focuses on a specific industry or sector, with 10 being they only work with clients in that area) and “horizontal” specialization (the degree to which a firm focuses on a specific service offering like R&D tax credits, with 10 being they only offer services in this particular area). What they found was that while both successful and highly successful firms, while possessing some degree of specialization, were not especially specialized in one area or another. However there does seem to be some benefit towards at least some specialization, as the unsuccessful firms were also the least specialized.
Still, this difference is not that great. Hyper-specialized firms on the vertical scale scored an average success rating of 8.11; firms that aren’t specialized at all, meanwhile, saw an average success rating of 7.5. There were similar results regarding horizontal specialization: the most specialized firms reported a success score of 8.45; the least specialized ones reported success scores of 7.61. While the differences are certainly relevant, the report noted they’re not especially dramatic.
There was one area where specialization made a big difference, though, and that was in employee satisfaction. The data found that those who were at firms that would be considered specialized, either in terms of service offerings or industrial sector, tended to have happier people who would be more likely to recommend the firm as a good place to work. However, the data also showed there can be too much of a good thing, as those who were at hyper-specialized firms were less happy.
“Hyper-specialized, I think, may be too narrowly focused and may not provide people with the variety of work that helps keep the work interesting. Many hyper-specialized also tend to be smaller firms, so there may also be challenges with the work environment and not as many people to spread the work among,” said Shimamoto.
Still, he also recognized that even if firms don’t necessarily have to jump into advisory, many have already done so and more will likely do so in the future. Even if a firm can find success focusing mainly on compliance-related work, he said they will still not be able to ignore advisory completely, especially as automation of routine tasks becomes more common.
“As compliance becomes more automated, I suspect we will see a trend toward about 20% compliance (that is highly automated) and then 80% advisory (that is automation-enabled). Firms that want to remain compliance-focused, will need to ensure that they are fully leveraging automation to keep that work sustainable. Or they will need to ensure they are partnering with an advisory-focused firm so that together they are coordinating the transformation for clients and its impacts on the compliance work,” he said.
While intuitively one might consider profit to be the primary metric of success, the study said that firm leaders have different goals and priorities when it comes to their businesses and so also have different measures of what makes them successful. Profit is certainly a factor, but it is not the only one. So, when considering how successful they are, accounting firm leaders also considered:
- Continuous learning and improvement of people;
- continuous improvement of processes;
- being ahead of other firms in technology usage;
- being team-oriented versus individually-focused;
- having a distinct culture and set of values that guides how a firm works and the decisions it makes;
- exceeding client expectations; having a positive impact on client success;
- growing faster than other similarly sized firms; and
- being able to operate successfully well into the future.
“We also knew that profit should not be the only measure of success, especially in the accounting profession where money is not necessarily a primary motivator. Thus we chose indicators that might show that one firm is more successful than other firms,” said Shimamoto.
Still, while profit is only one part of the equation, its impact can be quite material. But due to the hesitance of certain firms to share their specific profit figures, Shimamoto said it is difficult to pin down exactly what kinds of practices are more lucrative.
However, he said anecdotally he has heard advisory work and specialized work is generally more profitable because people can charge a premium for the knowledge. With his own firm, advisory work is much more profitable than the usual 30% rule of thumb that is used for professional services.
Accounting Today will be hosting a webcast on Oct. 31 to discuss the survey data in more detail.
Jody Padar, an author and speaker known as “The Radical CPA,” and Katie Tolin, a growth strategist for CPAs, together launched a training and technology platform called XcelLabs.
XcelLabs provides solutions to help accountants use artificial technology fluently and strategically. The Pennsylvania Institute of CPAs and CPA Crossings joined with Padar and Tolin as strategic partners and investors.
“To reinvent the profession, we must start by training the professional who can then transform their firms,” Padar said in a statement. “By equipping people with data and insights that help them see things differently, they can provide better advice to their clients and firm.”
The platform includes XcelLabs Academy, a series of educational online courses on the basics of AI, being a better advisor, leadership and practice management; Navi, a proprietary tool that uses AI to help accountants turn unstructured data like emails, phone calls and meetings into insights; and training and consulting services. These offerings are currently in beta testing.
“Accountants know they need to be more advisory, but not everyone can figure out how to do it,” Tolin said in a statement. “Couple that with the fact that AI will be doing a lot of the lower-level work accountants do today, and we need to create that next level advisor now. By showing accountants how to unlock patterns in their actions and turn client conversations into emotionally intelligent advice, we can create the accounting professional of the future.”
“AI is transforming how CPAs work, and XcelLabs is focused on helping the profession evolve with it,” PICPA CEO Jennifer Cryder said in a statement. “At PICPA, we’re proud to support a mission that aligns so closely with ours: empowering firms to use AI not just for efficiency, but to drive growth, value and long-term relevance.”
The accountant the world urgently needs has evolved far beyond the traditional role we recognized just a few years ago.
The transformation of the accounting profession is not merely an anticipated change; it is a pressing reality that is currently shaping business decisions, academic programs and the expected contributions of professionals. Yet, in many areas, accounting education stubbornly clings to outdated, overly technical models that fail to connect with the actual demands of the market. We must confront a critical question: If we continue to train accountants solely to file tax reports, are we truly equipping them for the challenges of today’s world?
This shift in mindset extends beyond individual countries or educational systems; it is a global movement. The recent announcement of the
The CIMA/CGMA proposal for 2026 is not just a curriculum update; it is a powerful manifesto. This new program positions analytical thinking, strategic business partnering and technology application at the core of accounting education. It unequivocally highlights sustainability, aligning with IFRS S1 and S2, and expands the accountant’s responsibilities beyond mere numbers to encompass conscious leadership, environmental impact and corporate governance.
The current changes in the accounting profession underscore an urgent shift in expectations from both educators and employers. Today, companies of all sizes and industries demand accountants who can do far more than interpret balance sheets. They expect professionals who grasp the deeper context behind the numbers, identify inconsistencies, anticipate potential issues before they escalate into losses, and act decisively as a bridge between data and decision making.
To meet these expectations, a radical mindset shift is essential. There are firms still operating on autopilot, mindlessly repeating tasks with minimal critical analysis. Likewise, many academic programs continue to treat accounting as purely a technical discipline, disregarding the vital elements of reflection, strategy and behavioral insight. This outdated approach creates a significant mismatch. While the world forges ahead, parts of the accounting profession remain stuck in the past.
The consequences of this shift are already becoming evident. The demand for compliance, transparency and sustainability now applies not only to large corporations but also to small and mid-sized businesses. Many of these organizations rely on professionals ill-equipped to drive the necessary changes, putting both business performance and the reputation of the profession at risk.
The positive news is that accountants who are ready to thrive in this new era do not necessarily need additional degrees. What they truly need is a commitment to awareness, a dedication to continuous learning, and the courage to step beyond their comfort zones. The future of accounting is here, and it is firmly rooted in analytical, strategic and human-oriented perspectives. The 2026 curriculum is a clear indication of the changes underway. Those who fail to think critically and holistically will be left behind.
In contrast, accountants who see the big picture, understand the ripple effects of their decisions, and actively contribute to the financial and ethical health of organizations will undeniably remain indispensable, anywhere in the world.
Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud.
Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk, the biggest political donor of the 2024 cycle, has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival.
“The tax bill is not in jeopardy. We are going to deliver on that,” House Speaker Mike Johnson told reporters on Friday.
“I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,” he added. “He is the leader of the party. He’s the most consequential political figure of our time.”
A fight between Trump and Musk exploded into public view this week. The sparring started with the tech titan calling the president’s tax bill a “disgusting abomination,” but quickly escalated to more personal attacks and Trump threatening to cancel all federal contracts and subsidies to Musk’s companies, such as Tesla Inc. and SpaceX which have benefitted from government ties.
Republicans on Capitol Hill, who had — until recently — publicly embraced Musk, said they weren’t swayed by the billionaire’s criticism that the bill cost too much. Lawmakers have refuted official estimates of the package, saying that the tax cuts for households, small businesses and politically important groups — including hospitality and hourly workers — will generate enough economic growth to offset the price tag.
“I don’t tell my friend Elon, I don’t argue with him about how to build rockets, and I wish he wouldn’t argue with me about how to craft legislation and pass it,” Johnson told CNBC earlier Friday.
House Budget Committee Chair Jodey Arrington told reporters that House lawmakers are focused on working with the Senate as it revises the bill to make sure the legislation has the political support in both chambers to make it to Trump’s desk for his signature.
“We move past the drama and we get the substance of what is needed to make the modest improvements that can be made,” he said.
House fiscal hawks said that they hadn’t changed their prior positions on the legislation based on Musk’s statements. They also said they agree with GOP leaders that there will be other chances to make further spending cuts outside the tax bill.
Representative Tom McClintock, a fiscal conservative, said “the bill will pass because it has to pass,” adding that both Musk and Trump needed to calm down. “They both need to take a nap,” he said.
Even some of the House bill’s most vociferous critics appeared resigned to its passage. Kentucky Representative Thomas Massie, who voted against the House version, predicted that despite Musk’s objections, the Senate will make only small changes.
“The speaker is right about one thing. This barely passed the House. If they muck with it too much in the Senate, it may not pass the House again,” he said.
Trump is pressuring lawmakers to move at breakneck speed to pass the tax-cut bill, demanding they vote on the bill before the July 4 holiday. The president has been quick to blast critics of the bill — including calling Senator Rand Paul
As the legislation worked its way through the House last month, Trump took to social media to criticize holdouts and invited undecided members to the White House to compel them to support the package. It passed by one vote.
Senate Majority Leader John Thune — who is planning to unveil his chamber’s version of the bill as soon as next week — said his timeline is unmoved by Musk.
“We are already pretty far down the trail,” he said.
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