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Taking An Active Interest In The Profession Can Have Its Rewards

by Tom Vogel, PhD, CPA

It is mid-November and the Big 5 firms are in the midst of their second interviews. In one specific case, a partner is scheduled to meet with two applicants. Having been in public accounting for the past twenty years, this partner is well aware of the changes and challenges facing the profession today. It is very important to this partner that accountants hired by the firm understand the current accounting environment. In each interview, the applicant is addressed with the following question:

"How do you believe the AICPA's Vision Project will impact our profession?"

The applicants provide the following two responses:

Response 1: "The CPA profession has a vision project?"

Response 2: "It is clear that the world is changing everyday. To provide just the traditional services, such as auditing services and tax preparation, is no longer adequate. Clients desire and expect CPAs to provide additional services, such as consulting services and personal financial planning. In addition, the changing environment has created new opportunities for the profession. For example, CPAs can use their expertise in assurance to provide web browsers the security they desire when transmitting information on the Internet. To address all these issues in a meaningful manner, the profession has to initiate some process to prepare its members for the challenges each will face in subsequent years. I personally believe that the Vision Project is a great idea, as its primary goal is to unite the profession and make all CPAs aware of the changes and how we can best prepare our members to provide the same level of quality service that is available today."

If you were the partner interviewing these candidates, which response would impress you the most? Perhaps more importantly, as a candidate addressed with this question, how would your response compare to the above responses?

It should be obvious from the above example that applicants can distinguish themselves in an interview by obtaining an understanding of the characteristics of the accounting environment as a supplement to the technical skills developed in the classroom. Even with the 150-hour requirement that has been enacted by many states, it is difficult (if not impossible) for students to learn everything they need to know about the profession in the classroom alone. An additional investment of time is needed outside of the classroom in order to obtain an understanding of the events occurring in the profession. To keep current on today's advancements, students should read business publications such as The Wall Street Journal or Business Week; or professional publications such as the Journal of Accountancy or CPA journals issued independently by each state. In addition, a wealth of information is available through the Internet. Although it may be impossible to keep track of all of today's advancements, students who take the initiative to learn more about these topics will better prepare themselves for their careers, and they may also give themselves a competitive advantage in the interviewing process. In this article, I discuss one issue that I believe is important to all students planning to enter the CPA profession---the CPA Vision Project.

CPA Vision Project

Today's dynamic environment has created the need for change within the accounting profession---both as a result of necessity and opportunity. The issues causing a state of flux within the profession are numerous. Here is just a sampling:

Traditional services offered by CPA firms (audit and tax preparation) have become "mature products." Revenues provided from these services have become stagnant over the past number of years. With increased technology, it has become much easier (and cheaper) for firms to perform these services. As a result, bidding wars for these services have become the norm. In turn, this has led to decreased fees from these traditional services, and it has left many firms searching for new services that they can provide to make up for the lost revenue.

The public's confidence in CPAs has provided the opportunity for accounting firms to provide an increased level of "assurance services." For example, with the increased level of commerce being completed via the Internet, there is a need for someone to provide assurance to consumers that the Internet is a safe place to conduct purchases. In an attempt to become the premier provider of this assurance, the CPA profession has established CPA WebTrust. CPAs will be able to use the CPA WebTrust Seal to assure consumers that those web sites bearing such a seal are trustworthy and reliable with regard to confidential consumer information.

The industry is becoming more specialized. Because of the number of accounting pronouncements that affect specific industries, it has become increasingly difficult, if not impossible, for individuals and most small firms to provide audit services in a variety of industries.

There is increased competition from outside sources that traditionally have not provided CPA services. A prime example here is American Express Corp. In an effort to provide investors with a complete package of financial expertise---from investment advice to insurance coverage to tax preparation---this company is acquiring CPA firms as subsidiaries and offering CPA tax planning services as part of its total financial package. Although the acquisitions are still being fought in some state courts, it appears that American Express will be able to maintain its "ownership" in CPA firms. How the public accounting industry will deal with this type of increased competition remains an unresolved issue.

As a result of these and other opportunities/demands from the marketplace, many firms are struggling in their attempt to determine the services that they should provide. Although many see this dynamic environment as a land of opportunity, it can also develop into a land of distinction for those firms who do not plan their future adequately.

This need for direction has become the cornerstone for the CPA Vision Project. As part of the process, CPAs from all 50 states participated in seminars to help determine (or envision) the profession's future. Whereas the primary services offered by CPAs in the past (auditing and tax preparation) have been well defined, the vision of future services is much less concrete and much more demanding. Specifically, the CPA Vision Project has established the following as its vision statement: CPAs are the trusted professionals who enable people and organizations to shape their future. Combining insight with integrity, CPAs deliver value by communicating the total picture with clarity and objectivity; translating complex information into critical knowledge; anticipating and creating opportunities; and designing pathways that transform vision into reality.

As the CPA profession expands its services, there will exist a need for an increased level of values and competencies from members in the profession. In an attempt to help isolate these components, participants in the CPA Vision Project established the top five core values. Core values represent those items in which the profession as a whole must make a substantial commitment. In the order of their perceived importance, these five core values are:

Continuing education and life-long learning---it is extremely unlikely that the rate of change in today's business world will diminish. In fact, if the past few years are any indication, the rate of change will continue to increase. The impact of this change can be dramatic. To remain competitive and valuable to clients, CPAs will need to continue to keep abreast of changes in the business world. This is nothing new to a profession that has maintained the concept of continuing professional education for its members for the past ten years. However, the importance of continuing education will only increase in subsequent years.

Competence---CPAs should only accept engagements in which they have the necessary competence to perform the required service in a capable and reliable manner. Although this may seem obvious, firms often encounter the opportunity to perform services in which they are not qualified. This tends to lead to sub-standard performance, which will diminish the public perception of the profession as a whole.

Integrity---Although not listed in this article, the CPA Vision Project lists assurance services as the top service to be provided by CPAs in the future. Assurance services are valuable only to the extent that the public has confidence in the work of CPAs. This confidence cannot exist without a substantial commitment to integrity on the part of CPAs.

Understanding of broad business issues---As CPAs perform more extensive services for their clients, there will be a need for them to obtain a thorough understanding of the business environment in order to provide services that add value to the client.

Objectivity---As has been the case in the past, CPAs will need to remain independent of the client. Their services will need to be free of any personal bias and/or any conflicts of interest.

What does all this mean to today's student preparing for a career in accounting? What skills are needed to effectively compete in this changing world? Although no one knows the answers to these questions, the CPA Vision Project did identify the top competencies needed by individuals in the future. I will discuss a few of them:

Communications skills---It seems that whenever business officials are asked to discuss the deficiencies of college graduates, the lack of communication skills is always near the top of the list. These skills will only become more important in the future. In addition, it is important for students to realize that effective communication skills involve more than a friendly smile and a firm handshake. Also included in this broad category are oral presentations, teamwork, and perhaps most importantly, writing skills. Virtually every business school in the nation has undertaken initiatives to improve these communication skills in their graduates.

Strategic and critical thinking---As all good accounting students realize at some point in their accounting education, accounting is more than the remote memorization of rules and regulations. Without a thorough understanding of the concepts underlying the principles, it will be impossible to provide clients with worthwhile advice.

Technologically adept---As we are in the middle of the information revolution, it becomes increasingly necessary to understand technological advancements in order to remain competitive.

This discussion of the vision project outlines those characteristics that I believe are the most important to students who are planning to enter the profession in the near future. For those who wish to gain a more thorough understanding, you can do so by accessing the AICPA's web page for the vision project. http://www.aicpa.org/vision/index.htm

Tom Vogel is an assistant professor of accounting and finance in the School of Business at Western New England College, Springfield, Massachusetts.

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