Accounting

Data shows there is room for both advisory and compliance for CPA firms

Published

2 years ago

September 27, 2024

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. People can register here.

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

5 days ago

July 21, 2026

Business Finance News

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.

Accounting

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

Published

5 days ago

July 20, 2026

Business Finance News

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

WASHINGTON — In a major escalation of cross-border trade friction, U.S. President Donald Trump has signed executive orders imposing new 50% tariffs on a wide selection of Canadian exports, citing discriminatory practices by Ottawa targeting American auto, dairy, and beverage industries.

The new duties, announced Monday, will take effect in 30 days. They target a broad spectrum of consumer and industrial goods—ranging from wine, liquor, and milk products to commercial cement, furniture, clothing, and hockey equipment.

Untested Legal Mechanism

To enact the sweeping measures, the administration invoked Section 338 of the Tariff Act of 1930—a rarely used legal provision allowing the executive branch to levy additional tariffs of up to 50% on foreign nations deemed to discriminate against U.S. commerce.

White House officials noted that Section 338 addresses trade discrimination rather than national security or economic emergencies. The move comes months after prior global emergency tariffs faced legal challenges in domestic courts, signaling Washington’s pivot toward alternate statutory authorities to maintain import duties.

Senior administration officials briefed reporters that the measure directly responds to Canadian provincial bans on U.S. alcohol, restrictions on American vehicle exports, and import quota disparities affecting U.S. dairy and cheese producers relative to third-party trading partners.

“While the administration continues to secure reciprocal trade agreements globally, Canada retaliated against efforts to protect domestic industry,” U.S. Trade Representative Jamieson Greer stated.

USMCA Impact and Carve-Outs

Significantly, the newly ordered 50% duties will apply to designated items even if they otherwise comply with the United States-Mexico-Canada Agreement (USMCA).

However, the administration confirmed key targeted exemptions:

Energy products (including oil and natural gas)
Potash and critical minerals
Fish and seafood
Goods already governed by sector-specific duties (such as existing steel and aluminum tariffs)

Administration representatives emphasized that the tariffs do not stem from recent disputes concerning drifting Canadian wildfire smoke, noting that policy options regarding environmental spillover remain under separate review.

Canadian Response and Market Reaction

Following the White House announcement, the Canadian dollar experienced a sharp decline against the U.S. dollar, falling approximately 0.4% during evening trading.

Canadian Prime Minister Mark Carney issued a statement emphasizing that Canada’s earlier counter-duties had merely matched previous U.S. trade actions. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens,” Carney stated, pointing to detailed proposals Ottawa submitted to modernize the USMCA framework.

Ontario Premier Doug Ford took a firmer stance, urging a “dollar-for-dollar” reciprocal response if the measures go into effect on August 19.

With a 30-day implementation window before the duties officially lock in, industry associations and trade groups on both sides of the border are calling for urgent bilateral negotiations to avert further supply chain disruption across North America.

Accounting

Automated Continuous Auditing: Transforming Compliance and Real-Time Financial Oversight

Published

6 days ago

July 20, 2026

Business Finance News

Transforming Compliance and Real-Time Financial Oversight

The traditional accounting paradigm—defined by periodic monthly closures and post-hoc annual audits—is rapidly giving way to continuous, automated financial oversight. As of July 2026, forward-thinking accounting practices and multinational corporate finance departments are leveraging continuous auditing systems powered by advanced machine learning models. These systems monitor operational transactions in real time, shifting audit methodologies from sample-based post-analysis to absolute, 100% transaction-level verification.

The operational advantages of continuous auditing are transformative. Standard auditing procedures historically relied on statistical sampling, which, despite rigorous methodology, inherently left gaps where anomalies or fraudulent transactions could go undetected for months. Modern continuous auditing platforms integrate directly with enterprise resource planning (ERP) databases, instantly cross-referencing purchase orders, invoices, bank feeds, and tax records. Any deviation from established control parameters or unusual transaction behavior triggers immediate flags for internal audit teams, dramatically reducing detection lag from quarters to seconds.

Beyond fraud prevention, continuous auditing fundamentally alters internal reporting and decision-making. Executive leadership no longer has to wait weeks after the close of a quarter to evaluate precise financial standing; real-time verified ledger data provides an uninterrupted view of operating margins, tax liabilities, and cash flow dynamics. This real-time visibility enables corporate controllers to adjust capital allocation strategies dynamically, mitigating liquidity constraints and capitalizing on emerging commercial opportunities far more efficiently than competitors bound to legacy reporting cycles.

However, implementing continuous auditing requires accounting professionals to acquire new analytical capabilities. The role of the auditor is evolving from manual data reconciliation toward system validation, algorithmic model governance, and strategic risk interpretation. Accounting firms and corporate finance departments must invest in continuous technical education, ensuring that audit staff possess the data engineering skills necessary to design, maintain, and evaluate complex automated compliance systems.