What's Ahead for the Accountancy Profession?
by Cathy Lockman
There's nothing like an economic crisis to heighten an industry's challenges--and the accounting profession is no exception. Recent full-scale business collapses, questionable behavior on Wall Street, skepticism on the part of the public, and the need to adapt to the demands of a global economy are putting leaders, regulators, and practitioners to the test as they assess how to meet the challenges and protect the integrity of the profession.
Billy Atkinson, the chairman of the board for the National Association of State Boards of Accountancy (NASBA) and an audit partner with PricewaterhouseCoopers, is one of the leaders tackling those challenges. At the recent Department of Accountancy Lyceum, he shared his insights on what's ahead for the profession in 2010, including the transition to International Financial Reporting Standards (IFRS), the landscape of private company reporting, and CPA regulation issues that cover everything from the profession's exam to global mutual recognition.
"The original roadmap to IFRS was strict and fast," says Atkinson. "But there have been many complications, including the Great Recession, the costs to transition books, a lack of public confidence, and lots of politics, so the move to IFRS has really been tabled at this point." Although this may frustrate some, Atkinson points out that a slower process may be the smarter path. "There is a sovereignty of emotions that tells us we can't push a common culture too fast. Change has to be nurtured and moved along with greater confidence than we have today."
And IFRS isn't the only area where that's true, explains Atkinson. He points to the need for an examination of U.S. Generally Accepted Accounting Principles (GAAP) to determine how best to meet the needs of U.S. users of private company financial statements and the action being taken by the American Institute of Certified Public Accountants (AICPA), the Financial Accounting Foundation (FAF), and NASBA to explore the issue. "A blue ribbon commission, dominated by users, has been established to comprehensively review the current system and come up with recommendations on the future of standard setting for private companies," he says.
And if assessing those issues isn't enough, the NASBA itself has an ambitious agenda as regards examining state board regulatory challenges. "Your CPA certificate is not as mobile as your driver's license," Atkinson told the audience of future CPAs "because no two state board accountancy acts are the same." He explains that NASBA is "working to establish some common guidelines, but it's a difficult process."
The CPA exam has mobility issues as well that Atkinson believes should be addressed. He explains that more people take the CPA exam in Guam than anywhere else on the planet because it's a U.S. territory that's closest to the Pacific Rim. "Your international peers wonder why do I need to get on a plane and fly to Guam to take the CPA. We need to export the CPA exam across the world in a more sensible manner and are looking at an international CPA exam as a way to do that, " he told the Lyceum audience.
Global mutual recognition is another issue. Atkinson explains that while there are agreements with some countries to allow CPAs to practice there, most of the largest countries have no such agreements in place. "We have had conversations with China and Hong Kong and other largely populated countries to negotiate such agreements, he says. "It's something you can expect to see in the future."
The international environment also has implications for what happens in the accountancy classroom. "Education is an emerging issue," says Atkinson. "We need a comprehensive study to see if U.S. accountancy education needs to be harmonized and/or changed to be in concert with international education. There are models we can use to help us do that, but whatever the process is, the results will have a significant influence on accounting education."
Dan Donlon, a senior accountancy major who will begin work with PricewaterhouseCoopers in Chicago later this year, appreciated Atkinson's views on accountancy education, his candor on the challenges with GAAP, his obvious experience, credentials, and independence, which Donlon sees as "the essence of the profession," and his perspective on the globalization issues. "But I do question the need for an international exam," Donlon says. "I wonder if internationalizing the exam will really be best for the profession in the long run."
What's best for the profession is a question Atkinson, with 38 years in accountancy, turns his attention to every day as he leads the NASBA. "Answering that question requires corroboration among the profession, the educational community, and the regulatory environment," Atkinson says. "As we address these issues, we need to practice engagement, diversity, and collaboration. Teamwork gets all the right questions asked."