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.
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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
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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 International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.
The
- ISA 620, Using the Work of an Auditor’s Expert;
- ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
- ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
- ISRS 4400 (Revised), Agreed-upon Procedures Engagements.
The IAASB is asking for comments via a digital response template that can be found on the
In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.
President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an
The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings.
Trump has
Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.
Food prices could rise by 2.6% in the short run due to tariffs, according to an
The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.
Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist
Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time.
“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said.
One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load.
“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai.
Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies.
“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.
However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area.
“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai.
As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales.
“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai.
While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves.
“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”
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