OUTLOOK & ANALYSIS

Artificial Intelligence Plays Role in Analytics, Optimization

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Accounting profession also impacted by private equity and environmental, social and governance factors.

By Angie Grissom
The Rosenberg National Survey of CPA Firm Statistics

The accounting industry continues to be poised for significant changes over the next year, influenced by trends including more private equity activity and evolving business needs and strategies.

EDITOR’S NOTE: Every year, The 2024 Rosenberg National Survey of CPA Firm Statistics asks the profession’s top consultants two sets of questions:

    • How do you think the next 12 months will unfold? Trends? Predictions? Other thoughts?
    • How would you assess the last 12 months? Trends? Observations? Struggles?

MORE: Challenges for the Accounting Profession: Private Equity, Offshoring, Training New Hires | Focus on Intentional Growth | What’s Going to Happen? Lots, Say Consultants | How Accounting Firms Are Handling the Staff Shortage | When Staffing Falls Short, Clients Get Culled | Staffing Turnover’s Down, But Why? | Is This the Last Year of Accounting’s Golden Age?
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The consolidation of accounting firms is expected to speed up in 2024. This trend is driven by the need for firms to enhance their resources, expand service capabilities and gain industry expertise. There will be a notable increase in mergers among top firms, including regional and national mergers, as well as East Coast/West Coast collaborations to broaden geographical reach. Private equity (PE) involvement will also grow, with more PE transactions involving the top 150 firms and smaller tuck-ins. Private equity firms are predicted to continue their significant involvement in the accounting sector. Key areas of investment will include technology and health care.
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Audit Fees Climb Another Notch

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bar chart and pie chart

The financial industry tops the list (no surprise).

By CPA Trendlines Research

Audits aren’t getting any easier, that’s for sure.

But that’s a good thing.

MORE: CFOs See AI as Top Risk and Opportunity | Does Accounting Belong in STEM? | Accounting ARC | Opportunity Awaits Incoming AICPA CEO | Artificial Intelligence May Already Be Plateauing | Regulation, Geopolitical Instability Spark Concern | Ten Ways to Manage Price Increases | Survey Says 57% of Firms Are Raising Prices Next Year | How Will Private Equity Impact Accounting Careers? | Eleven Questions about Kids, Wealth and the Family Business | Twelve Years and Out: Seasoned Accountants Join the Exodus | How Accounting Firms Are Handling the Staff Shortage | Gen AI in Accounting: Epic Transformation, or Overheated Hype? | Survey Shows Big Opportunities in Small Business
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Thanks to the headaches continually passed down from the boards and commissions that set the rules and standards for audits of public companies, audits have grown more complex and time-consuming.

Add to that the increasing complexity of global business.

And the complications of mergers and acquisitions.
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Challenges for the Accounting Profession: Private Equity, Offshoring, Training New Hires

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Chalkboard saying indicating that time to change is now

New tech will force firms to examine value pricing if they haven’t already.

By Gale Crosley
The Rosenberg National Survey of CPA Firm Statistics

Private equity interest in the profession will continue. New PE organizations are dotting the landscape, showing interest in firms from the top to the near bottom of the market. Family offices and ESOP investment bankers/consultants are appearing. In the future, firms will have multiple alternative sources of equity capital.

EDITOR’S NOTE: Every year, The 2024 Rosenberg National Survey of CPA Firm Statistics asks the profession’s top consultants two sets of questions:

    • How do you think the next 12 months will unfold? Trends? Predictions? Other thoughts?
    • How would you assess the last 12 months? Trends? Observations? Struggles?

MORE: Recalibration Is Key for Accounting Profession | People Development Still a Concern | Focus on Intentional Growth | Accounting Firms Upshift to Corporate Model | Tech Anxiety Paralyzing Some Accounting Firms | What’s Going to Happen? Lots, Say Consultants | Growth and Complacency Must Concern Accounting Firms This Year | Solving Staffing Requires Intention | How Accounting Firms Are Handling the Staff Shortage | The Future of Fees | As Private Equity Closes In, Firms Seek New Answers to Staffing Problems | When Staffing Falls Short, Clients Get Culled | How Accounting Firms Are Dealing with Retirement | Next Five Years Are Critical for Accounting Firms | Staffing Turnover’s Down, But Why? | What’s Your Firm Worth? Private Equity Wants to Know | The New Pipeline: Outsourcing and Offshoring | Is This the Last Year of Accounting’s Golden Age?
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Private equities that have already invested are starting to more fully understand the vast operational differences between corporate America and CPA firms. This will put pressure on PE-backed firms to perform in more sophisticated ways. On the revenue growth side, corporate-world staples such as effective firmwide pipeline processes, professional sales organizations and a repeatable innovation (product management) process will start cropping up.
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Four Steps Could Close the Tax Gap

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The difference between what’s owed and what’s paid is $625 billion.

By CPA Trendlines Research

What’s more aggravating than paying all the taxes you owe while other people cheat?

Maybe this: that the biggest tax cheats are the wealthy while it’s the lower-income taxpayers who get audited more.

MORE: Art Werner: How to Turn Tax Prep into Tax Advisory | Quick Tax Tip | Art Werner: Navigating Business Structure Decisions Amid Tax Law Changes | Quick Tax Tip | Tax Season Memo from Staff to Managing Partner | Is the IRS Adequately Tracking Corporate Tax Evasion? | IRS Still Unsure How to Measure Audit Rate | Art Werner: Estate Planning Strategies | Quick Tax Tip | Art Werner: Post-Mortem Estate Planning | Quick Tax Tip | Pause to Praise the Tax Pro Volunteers | IRS vs. Fraudsters | Imagine! The National Tax Advocate Does | Art Werner: Maximizing Fringe Benefits
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The financial consequences of noncompliance are staggering. According to the annual Public Report issued by the Internal Revenue Service Advisory Council, an estimated $688 billion in taxes went unpaid in 2021.
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Recalibration Is Key for Accounting Profession

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three people meeting, "strategy" written behind them

Growth is being sustained by offshoring.

By Art Kuesel
The Rosenberg National Survey of CPA Firm Statistics

I think a great word for the next 12 months will be recalibration. I think it is fitting in so many areas. Firms are recalibrating their investments in technology to gain efficiency and drive capacity. Firms are recalibrating their investments in staffing as technology and outsourcing impart their influence process. Firms are recalibrating their succession plans as movement on the bench continues. And firms are recalibrating their pricing strategies to raise the bar on new and existing clients.

EDITOR’S NOTE: Every year, The 2024 Rosenberg National Survey of CPA Firm Statistics asks the profession’s top consultants two sets of questions:

    • How do you think the next 12 months will unfold? Trends? Predictions? Other thoughts?
    • How would you assess the last 12 months? Trends? Observations? Struggles?

MORE: People Development Still a Concern | Focus on Intentional Growth | Accounting Firms Upshift to Corporate Model | Tech Anxiety Paralyzing Some Accounting Firms | What’s Going to Happen? Lots, Say Consultants | Growth and Complacency Must Concern Accounting Firms This Year | Solving Staffing Requires Intention | How Accounting Firms Are Handling the Staff Shortage | The Future of Fees | As Private Equity Closes In, Firms Seek New Answers to Staffing Problems | When Staffing Falls Short, Clients Get Culled | How Accounting Firms Are Dealing with Retirement | Next Five Years Are Critical for Accounting Firms | Staffing Turnover’s Down, But Why? | What’s Your Firm Worth? Private Equity Wants to Know | The New Pipeline: Outsourcing and Offshoring | Is This the Last Year of Accounting’s Golden Age?
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

 

Nothing is sacred – anything that got us to where we are today will not necessarily get us where we need to be in the future. It’s a tsunami of change (and opportunity) and the best firms are leaning into it with vigor.
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