Jun 15th 2011
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By Gail Perry, editor-in-chief
AICPA Chairman Paul Stahlin and President and CEO Barry Melancon took time out from their busy schedules this week to address the attendees at this year's annual AICPA Practitioners Symposium and TECH+ conference in Las Vegas. The message they sent resonated with excitement, enthusiasm, and encouragement as they described the significant changes facing the accounting profession and many of the ways in which accounting professionals can rise to the occasion and benefit from these changes.
Stahlin began the presentation by listing several items on the near horizon that are expected to have a measurable impact the profession including International Financial Reporting Standards (IFRS), the global economic crisis, regulatory reform, the rapid rise of social media, changing demographics, the aging population, the competitive environment, the green movement, the issues surrounding public versus private standards, and tax change.
Stahlin warned of the massive changes the accounting profession will face as it tries to digest the 350 rules that are expected to come out of the Dodd-Frank Wall Street Reform and Consumer Protection Act. To put the legislation in perspective, "Dodd-Frank is 2,307 pages versus Sarbanes-Oxley which was 68 pages."
As part of Stalin's discussion about the aging of the profession ("The fact is that every 8 seconds, somebody in our country turns 65. That's not a startling fact, except that that will happen every 8 seconds for the next 20 years. In 20 years, one third of our population will be over the age of 65."), Stahlin encouraged his audience to participate in the AICPA's CPA Horizons 2025 initiative by sharing their insights into the future in an effort to help the profession as a whole anticipate and prepare for the future. AICPA members are being asked to join the forum and share ideas now through July. Results of the initiative are expected to be available in time for the AICPA's Fall Council meeting in October.
Melancon addressed some of the key issues that are facing accountants today and going forward, including adoption of International Financial Reporting Standards (IFRS). "We're one of the few places in the world that does not have IFRS adoption," he said, and he anticipates that the U.S. will continue to lag on IFRS adoption throughout most of this decade.
Melancon described the current issues facing the Blue Ribbon Panel, charged with representing the interests of private companies in the debate over IFRS. But this debate is not a new issue. He reminded the audience, "The issue of whether or not we should have different standards for private companies has been with us for 35 years." While the Blue Ribbon Panel, created by the Financial Accounting Foundation (the private sector organization that provides oversight of the Financial Accounting Standards Board), concluded that private companies should have different reporting standards, the panel also concluded that, "The only way that we're going to have different standards is if the Financial Accounting Foundation sets up a new board that is made up of people who understand private companies and is vested with the authority to set standards," explained Melancon. However Melancon predicted that the creation of a new board to set private company standards is unlikely. "We're not going to put up a separate board; we're going to tweak the system that we have today."
Melancon also discussed some of the changes that are likely to occur in conjunction with the advent of cloud computing. Regarding the evolution of the Statement on Auditing Standards (SAS) 70 into the new service organization accounting standards (SOC 1, SOC 2, and SOC 3) which address reporting requirements for security issues of service organizations, he said, "This is an example of standards in our profession having to evolve as a result of changes in the technology in the profession. He described cloud computing as "the most significant technological time since the introduction of personal computer."
"There are 44,000 accounting firms in this country," Melancon said. "How they adjust, how they embrace what is happening today, will have a huge impact as to how successful those firms are going to be." In particular, Melancon pointed out that, " Cloud computing has given professionals the opportunity to go back to the types of relationships that firms had with clients in the '70s and '80s. We're seeing firms reestablishing practices that they had moved away from."