When anyone can do taxes & accounting, what’s left for CPAs?
By Donny C. Shimamoto, CPA.CITP, CGMA
When most people hear the word “accountant” they immediately think of taxes or bookkeeping…and the nerdy introvert glued to a spreadsheet on their computer screen.
But in reality, you don’t have to be an accountant to prepare tax returns or record accounting transactions. Neither of those tasks requires any kind of accounting license, credential or certification.
Shift to someone who knows more about accountants and they’ll probably add “audits” to the list of services. Taxes, bookkeeping, and audits… That’s what accountants do.
Well, providing an audit opinion is definitely within the domain of a certified public accountant or chartered accountant, as they are the licenses that an accountant must hold to issue an audit report that is intended for public consumption.
In fact, the issuance of these opinions is the only service that’s the exclusive domain of accountants. But there are other types of audits, such as those performed by internal auditors, regulatory auditors, or tax agency auditors that do not require these licenses to perform.
So what exactly are accounting services?
The Historical View of Accounting Services
In the late 1990s, the AICPA and the CPA state societies collaborated on a big research project they called the CPA Vision Project. The intention of this project was to “to develop an unprecedented grassroots vision for the profession for the 21st century and beyond.” One of the products of this effort was the identification of Core Services of the profession:
- Assurance and information integrity,
- Technology services,
- Management consulting and performance management,
- Financial planning, and
- International services.
Note that taxes and bookkeeping are not mentioned, and audits are mentioned under its parent term “assurance”—services designed to provide confidence in the information provided to a third party—thus the reference to “information integrity” above on the same line.
Technology services probably referred to the implementation of accounting systems, since at that time QuickBooks and other enterprise resource planning systems were at full hype, and you often went to an accounting firm to purchase them. And the 90’s was also when many of the large public accounting firms had large consulting arms that performed management consulting and performance management (which usually meant increasing the profitability of companies—thus the financial tie where it made sense for accountants to be involved).
Financial planning, helping individuals and businesses minimize their tax liabilities and maximizing the return from their investment portfolios, does require a strong understanding of taxes, but is usually more focused on the future rather than reporting to the tax authorities what happened in the last year. So many accountants complemented their tax return preparation services with financial planning, but there are also a host of other professions that also play in the financial planning space: insurance agents, financial managers, stockbrokers, etc.
The 90s were also when we started seeing the world become a lot more globally focused, so the reference to international services probably referred to helping clients deal with cross-border compliance requirements as well as international tax planning and compliance, too.
Already from the 90s accounting services were not what most people stereotypically think of as being associated with an Accountant, but I could probably summarize them as being related to enabling financial success, whether in the business or personal context. So accounting services were generally defined as being related to business or individual financial success.
No Core Services in 2010
In 2010, the AICPA again gathered the accounting community, and this time included more of the business community, to conduct research on the future of the accounting profession. This project called CPA Horizons 2025 sought to explore what the profession would face over the next 15 years and define the Accountant in 2025.
I was lucky enough to be part of the CPA Horizons 2025 Advisory Panel, “an esteemed 22-member group…representing all member segments of the profession.” We were charged with synthesizing the vast amount of data that has been collected from over 5,600 CPAs, spending a cumulative 6,000 hours, that generated over 75,000 individual comments. And our conclusion on the Core Services after going through the data and discussing what they would be in 2025? Don’t define them anymore.
Our deliberations to come to this conclusion were not trivial, and we had some passionate debate. There were some that felt that we had to stick to our roots in finance and taxes. Others (including myself) pointed to the fact that many accountants were already taking core accounting skills and combining them with other disciplines like operations management, information technology, law, and project management. Our contention was that by 2025, the services provided by Accountants will have had definitely moved beyond just the realm of finance and taxes.
The official statement from the CPA Horizons 2025 report is: “The services provided by CPAs have become so varied and diverse that the concept of core services is no longer representative of the profession.”
Core Services for the Modern Accountant
While I was glad that the core services hadn’t been defined narrowly, it didn’t sit well with me that we weren’t able to define some core services. After all, how do we describe what we do? Not having core services either meant that we did nothing… or everything. And neither answer felt right.
It wasn’t until 2014 when I was trying to revamp my firm’s website that I finally came up with the answer. My marketing consultant had been pushing me to define the services that we provided and list them on the website. When potential clients find your website, they need to be able to see what services you provide so that they can see if you can help them, she said. It happened then that I watched Simon Sinek’s “Start with Why” video and it gave me the idea that instead of describing our services as what we do, I should describe them as to why people would want us to help them.
I came up with three whys for my firm:
- Peace of Mind – We help clients worry less by alleviating their anxiety about a particular aspect of their business. In our case, this related to their concerns about cybersecurity, the stability of their IT environment, or the competency of their IT team. We also do this by helping to assess and managing risk on an IT or business improvement project that may be having difficulties.
- Vision and Clarity – We help clients visualize their ideas and clarify how to make it a reality by developing plans and budgets for the implementation of their ideas. Our core approach is to ask a client where they want to be three to five years from now, and then to develop a plan for how their organization needs to change to get there. But this could also be done for a smaller scope change such as the migration to another accounting system.
- Hope – Clients working with us experience a feeling of hope because of the way we provide our services. In addition to figuring out what they need to do, we help them figure out how to achieve the best possible outcome working within their limitations. We also employ change management techniques that ensure that there are buy-in and endorsement from all of the stakeholders—greatly improving the chances of success of a project.
As I’ve spoken to accountants around the world about how to transcend technology and maintain the competitive advantage of their accounting firms or accounting departments, I found that when I generalized these three whys, they resonated a lot with accountants. The whys go back to the core of why many of us became accountants in the first place: to help people.
So I propose that the core services of the modern accounting profession are to provide peace of mind; vision and clarity; hope to our clients. This can be done in the finance, tax, operations, information technology, or whatever context the accountant is working in. Basically, we help ensure that our clients are successful at whatever their endeavors are.
Why Do You Do What You Do?
Whether you’re an accountant working in public accounting, management accounting, internal audit, government, or nonprofits; whether your clients are organizations, individuals, families, co-workers, or executives; if you really look at what you’re doing at work, I bet you can find a connection back to one of these whys. And if you can’t? Well then you really should be asking yourself: Why are you doing it?