Technologies change, practices change, but the processes and licensing has long stayed the same. Unfortunately, this has left many new accountants unprepared for the modern landscape, and has fueled the talent crisis in the accounting world. However, this may all change very soon.
CPAs More Important, but Skills Need to Evolve
As we discussed in our article on the decline of the accountant CFO, you’re likely already referred to colloquially or literally as chief accounting officer for no other reason than the fact that fewer CFOs than ever are CPAs. As we discussed,
“CFOs who are certified public accountants fell to about 36% in 2019. Five years prior, the number was closer to 50%, and at the time of the Sarbanes-Oxley Act of 2002, demand for accounting-literate finance leadership was at an all-time high.
The move from accounting-literate finance chiefs to those focused on capital markets, equity and debt financing, and externally communicating to the market has firmed up the market for the controller—in the US, at least.”
Are You Ready for the CPA Evolution?
But recently, the AICPA announced something set to change the way that everything from your staffing to your CPE works. Part of something called the CPA Evolution, many in the community are looking to transform the CPA licensure model to recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future.
Goals of the CPA Evolution
In this, the combined effort of the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA) looks to improve the licensing model to develop a new approach. Their proposed model:
- Enhances public protection by producing candidates who have the deep knowledge necessary to perform high-quality work, meeting the needs of organizations, firms and the public.
- Is responsive to feedback, as it builds accounting, auditing, tax and technology knowledge requirements into a robust common core.
- Reflects the realities of practice, requiring deeper proven knowledge in one of three disciplines that are pillars of the profession.
- Is adaptive and flexible, helping to future-proof the CPA as the profession continues to evolve.
- Results in one CPA license.
For more information, head to evolutionofcpa.org to learn more.
Core + Discipline
Built on the combination of two paths, the evolving CPA licensure seeks to combine accounting, audit, tax, and technology to ensure that tomorrow’s accountant is well prepared for tomorrow’s accounting profession.
As demonstrated in the image above, this combines the following elements:
- Each CPA candidate would be required to complete the same robust core education and examination in accounting, auditing, tax and technology — the navy “core.”
- Each candidate would also choose a discipline in which to demonstrate deeper knowledge. The three potential disciplines we’ve initially identified reflect three pillars of the profession:
- Business reporting and analysis
- Information systems and controls
- Tax compliance and planning
- Every successful candidate — regardless of their chosen discipline — would receive a CPA license with the same rights and privileges licensed CPAs have today. We knew this was important to you — that all CPAs share a common core of knowledge and the same CPA license.
Closer to Reality: AICPA Board Recommends a Vote
As discussed in a recent AICPA Insights blog, the proposal may be coming to fruition. On May 20th, AICPA’s Board of Directors recommended that the AICPA Council vote on a resolution supporting the CPA Evolution initiative.
Susan S. Coffey, one of the biggest proponents of the measure, said, “This is great progress toward our goal of positioning the CPA profession for continued strength and relevance in a constantly evolving business environment. I would like to thank the Board and Council for their leadership and guidance since the inception of this initiative.”
Exciting Times—Are You Ready?
As the world of accounting and the role of the controller continues to evolve, it pays to stay ahead of the curve. At the Controllers Council, our goal is to give you the latest news, tips, and insights on running your accounting practice. From helping you gain new skills to helping you benchmark your business, we’re here to help.
We’re paying close attention to this and will keep you updated on this measure’s progress, so be sure to follow us for all the latest.