When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.
The "Big Eight" were still headquartered in Boston. Vietnam War protestors demonstrated across from the society's offices, and mandatory CPE and peer review were nonexistent. Female CPAs were rare.
The MSCPA functioned mainly a "gentleman's club" in the very early days, Flynn said. Cigar smoke hung thick in boardrooms, and membership scoffed at the idea of involving itself in government affairs on Beacon Hill – politics was simply not in their purview.
Today, the profession has radically changed. Women comprise nearly 50 percent of new hires and continue to rise in the ranks; technology has revolutionized the way CPAs serve their clients; and the MSCPA's Political Action Committee (PAC) is a powerful, professional advocate in the state legislature.
And Theodore J. Flynn, CAE, president and CEO of the MSCPA, has been there for the entire ride.
This December, after four decades in the profession, Flynn will retire from the MSCPA. In any profession, it's rare for a CEO to stay at one company for so long, but in Flynn's case especially, his longevity has provided him a unique perspective on an ever-changing profession.
Just days before his retirement, AccountingWEB sat down with Flynn to discuss the major changes that have impacted the profession over the last four decades, the current state of the CPA industry, and where things are headed in the future.
The Changing Professional Landscape
Flynn said the most significant change he has witnessed during his forty-three-year tenure is the rise of women in accounting. In 1970, female CPAs were an anomaly and rarely ascended to leadership. Thankfully, Flynn said, "those days are over."
"Women comprise 50 percent of the graduates, 50 percent of the new hires, and, with many of the more enlightened firms making accommodations for women in the child-rearing years, women are reaching top leadership roles in the profession," Flynn said. "This has had the most significant impact we see on the profession today, and I expect this movement, and the number of female partners, will only increase in the future."
Flynn has also seen several new mandates impact the profession, including mandatory CPE and mandatory peer review. Long gone are the prohibitions, such as offers of employment without permission, advertising and solicitation bans, and competitive bidding restrictions that existed in the 70s.
One surprise to Flynn is the decline in the number of "spinoffs," or independently owned practices, over the years. "There have always been mergers, acquisitions, and rollups, but in the past, you saw many of these spinning off as new firms. You don't see that as much as you used to," Flynn said.
Flynn believes this decline in independent proprietorship could be due to the higher start-up costs of independent practices, particularly the technology investment, or a generational shift in the entrepreneurial spirit – with many younger professionals valuing "quality of life issues" over being their own boss."
The CPA business model itself, Flynn believes, has also changed. "CPAs used to train in a big firm to transition a local firm, but today, many CPAs leave the big firm to go into a different type of business or a different line of work," Flynn said.
Technology and the CPA Society
During his tenure with the MSCPA, Flynn has literally seen CPAs transition from conducting business with column paper and fax machines to Cloud technology and social media. And, while technology has enhanced the services CPAs can provide to their clients, it has also revolutionized the way the CPA society must relate to its members.
The way societies deliver professional education, in particular, is forever altered, Flynn said. "Not only is the competition for education options fierce out there, but younger generations want us to deliver education in different ways. They want education available online and on-demand, not in eight-hour group study sessions," Flynn said.
There's no doubt webcasts and webinars are the new delivery mode, Flynn added, and with so much knowledge available to CPAs on the web, CPA societies also "really have to push the value proposition of the education they deliver."
Technology sometimes begs the question how do CPA societies remain relevant to this next generation of social media savvy, online-learning-driven CPAs?
But one function of the CPA society will always remain germane to the profession, Flynn said. CPAs will always need the CPA society to administer government relations and serve as their professional advocate in the state legislatures.
Flynn points to the development of the MSCPA's government relations arm as an example. In 1985, the MSCPA established a Political Action Committee (PAC) which now serves as the underpinning of the society's work on Beacon Hill; fighting for laws that make it easier for Massachusetts CPAs to do business and against those that threaten a positive business climate (like the recent "tech tax" that was successfully repealed after a short time on the books).
"CPAs are licensed by the state, and the laws and regulations governing taxation and general business in each state have an impact on every practitioner, regardless of the size of their firm," Flynn said. "The state society plays a key role in that process, and that role will never be usurped."
Issues on the Horizon
Flynn believes future CPAs will need to be vigilant about three key issues: regulation, "protecting the franchise," and the need for greater diversity in the profession.
Flynn says he can't imagine the day when CPAs won't need to be observant of attempts at overregulation of the industry, but emphasizes CPAs also need to be conscious of "protecting the franchise" – audit and financial statement preparation.
"There have been attempts for years for other/lesser providers to become registered to offer these services. We must be certain to keep this within our bailiwick of education, experience, and examination," Flynn said. "There's always that potential danger here to erode the value of the CPA certificate."
And while he has seen great strides for women in the profession, Flynn said he leaves the stage still deeply concerned about the profession's lack of diversity.
"Diversity is our biggest issue and challenge going forward. Our profession should always mirror the population, and right now we don't even come close," Flynn said. "I don't have the answer to that problem, but I do know that goal has to be accomplished. We need to put all our resources toward attracting, expanding, and diversifying our talent pool or we will be left wanting. Diversity is the main issue we need to address."
Dec 30th 2013