As part of a series of interviews with prominent members of the profession, AccountingWEB sits down with Bill Balhoff, current Chairman of PCPS, AICPA's Division for Firms, to get his perspective on what's happening in the profession.
AccountingWEB (AW): Tell us a little about PCPS for those that don't know too much about the organization.
Bill Balhoff (BB): PCPS’s mission is to help local and regional firms become more successful. As the AICPA Alliance for CPA firms, PCPS has more than 6,000 local and regional CPA firm members. We strive to create programs that support firms with their practice management and we advocate for them at a national level. While all small and regional firms benefit from its existence, PCPS also provides specific membership benefits that are worth much more than annual dues.
PCPS comprises three committees, each of which focuses on a different aspect of small firm advocacy and action. As the governing body of PCPS, the PCPS Executive Committee helps firms become more successful by helping deploy products and services and providing a voice for CPA firms. The Management of Accounting Practice (MAP) Committee supports CPA firms through initiatives including firm networking, MAP forums and coordinated efforts with state society MAP Committees. Finally, the Technical Issues Committee (TIC) monitors technical developments that could have a significant effect on private companies and the CPA firms that serve them and, when necessary, submits comments and recommendations to standard-setters in support of these issues.
AW: What's the grand vision for the organization over the next few years?
BB: Our vision for the next few years is to help guide firms through the turbulent changes affecting our profession and to represent their interests with all decision-making parties. Of course, we hope to clearly demonstrate the tangible value of membership so that member firms will continue with their support of PCPS and to convince non-member firms of the benefits of joining. PCPS provides a way for individual firms to have a collective voice in the AICPA – a voice that would not be heard without this group. Now, more than ever, it is important that all firms have the opportunity to express their concerns and to have representation in the ongoing discussion of the profession’s future.
AW: What are the biggest concerns of the firms that you represent?
BB: All firms are different and, of course, have unique issues and different areas of concern. However, there are challenges that are common to many of PCPS’s members. Today, the top 5 concerns of our member firms are:
- The effect of the new regulatory environment
- Finding and retaining qualified staff
- Marketing/practice growth
- Seasonality/workload compression
- Succession planning
PCPS exists so that these firms have a group representing them and their interests, whether it is in the government, the AICPA or the marketplace.
In addition, PCPS watches out for things on the horizon that will affect small firms. For example, my greatest concern for our member firms is that legislative and regulatory changes that may be appropriate for large public companies and their auditors will not help small, privately-held companies and those that audit them. In fact, those very changes that have been made in the name of public interest will actually create barriers to our effectively serving those businesses and may unduly increase the cost of serving those entities with no benefit. I am concerned that those that may be writing new auditing standards will not be in touch with the reality of small private business nor with our practices. I am also deeply concerned that the government will take the place of peer review for local and regional firms, removing our current mechanism of self-regulation remedial actions and replace it with a punitive process.
AW: There is a growing perception that those who are leading the profession are not hearing the voice of the small CPA firm. What would you say to those who share this view?
BB: Small firms are not just one voice, rather many voices with multiple perspectives and opinions. It is through PCPS that small firms have an opportunity to be at the table when major decisions are being made and to make certain that the AICPA does hear the voice of the small firm.
It is hard to overcome the perception that the profession doesn’t listen to all firms, especially small ones. However, there are over 40,000 firms in this profession and it is difficult to reach out and touch each of them individually. That’s where PCPS comes in. Our sole concern and 100% of our energies are devoted to helping local and regional firms and providing them with a voice. The AICPA is extremely supportive of our efforts and actively solicits our input. PCPS and its committees are consulted by the AICPA’s Board of Directors as well as all the senior standards-setting committees on most key initiatives.
It is important to realize that not all of the AICPA’s efforts are well-publicized. Just because small firms are not frequently mentioned in the media, does not mean they are not a priority at the Institute. Many of the people who are very vocal about the AICPA not providing a voice for small firms often seem to be more concerned with promoting their own initiatives than with helping the profession.
AW: Many students looking to choose a career path are thinking twice about accounting because of the high profile scandals, liability issues, regulatory issues, etc. What would you say to those students about their future potential within the accounting profession?
BB: Actually, we are seeing an uptick in student interest and enrollment in accounting classes. To those who are concerned about the impact of recent scandals, I would say this: there has never been a better time to enter the profession. There are more opportunities now for CPAs and people with our skills. There is a renewed focus on our role in the economy and the importance of integrity, which is the hallmark of our profession.
I personally have never had more fun in my job than I am having now. There are so many different avenues open to us today – both analytical and creative options. People look to CPAs for a wide range of services. It is amazing how much the profession has broadened even since I entered the field. My daughter, Stephanie, is majoring in accounting in college and I am so proud of her and thrilled by her career prospects.
AW: In the most recent PCPS survey, staffing was again listed as the top issue among member firms. As a practitioner and a leader in the profession, why do you think it is so difficult for the accounting profession to find and retain qualified staff?
BB: I think a lot of the problems we face in attracting qualified students have to do with the picture society paints of what accounting is all about. While many still regard us as bean counters, in reality it is a profession for people who like working with people and who seek out creative, challenging work. I think if people were more aware of this, attracting new accountants would be easier.
With regard to retaining staff, I think there are a couple of contributing factors. For better or worse, we train our younger CPAs so well in core skills that they are very attractive to employers in industry and other professional service firms. We train them and other organizations lure them away with higher salaries. Another reason is a generational difference in the approach to work. Many young people seek instant gratification. They do not shy away from hard work, but they need to see immediate returns. As a profession, we need to assess the balance between what we offer and what they expect.
AW: What are the three things that you would encourage individual PCPS members to do over the next year to make the most positive impact on the future of the profession?
- Get out in front of the public and create a positive message about the profession. We are 340,000 individual CPAs who stand for integrity. Each of us needs to take a leadership role in spreading that message to the press and to organizations in our communities.
- Do the right thing. We need to reinforce our core values. Leaders need to ensure that the members of their staff understand and embrace our core values. Tone is set at the top. Despite all the negative publicity to the contrary, the vast majority of CPAs are dedicated to objectivity and independence. We need to foster that commitment to integrity by keeping our firms’ missions aligned with the core values of the profession.
- Volunteer to give back. Whether it is donating time to community causes or professional organizations at the state or national level, it is important to give back. In my experience, those who get involved receive far more in return than they give, whether it be through the sharing of ideas or interacting with peers.
AW: What has been the one accomplishment that you are most proud of since becoming Chairman of PCPS?
BB: My proudest accomplishment has been working with our committees (PCPS Executive, TIC and MAP) and advancing their critical roles and missions on all fronts. I am proud that we have taken ideas and challenges and developed and addressed them to the benefit of our member firms. For example, we have revitalized the national MAP survey, which we feel is of great use to our members. We also voiced the concerns of small firms to Congress, testifying as they crafted legislation in the wake of recent corporate scandals. We have not sat back and watched as things have changed around us. We have not simply acted as caretakers for PCPS. Of course the support of the AICPA staff and the present and former committee members has been absolutely critical to all our successes.
AW: Look into your crystal ball and describe for us what the landscape of the accounting profession looks like in three years.
BB: The landscape of the accounting profession is changing at a rapid pace. It is completely different than it was even just a year ago. Currently things are up in the air. They will change even more in the future. As I see it, in the next three years, our roles as CPAs and our dedication to integrity will make us an even more important part of the business world than ever before. I think it will be CPAs who pull our society out of its current fear and mistrust.
Unfortunately, I believe standards overload will get even worse. With potentially a whole new group of standard setters as well as FASB’s new ability to enact change even more quickly, the number of standards with which we have to comply will increase. No one person can know it all, which reinforces the importance of networking with other professionals.
AW: What do you think the American public should know about CPAs and CPA firms that might have been overlooked by the media, overshadowed by other events or lost amidst the public debate about the profession this year?
BB: What has been lost in this media flurry and the government’s call for new standards and policies is the fact that we have proactively monitored and regulated ourselves for many years. Our profession has never stood still. Through standard setting, peer review and other processes, we, as CPAs, continually evaluate our role and adapt. For example, we adopted a fraud standard in 1999, long before anyone thought of Enron as anything other than an excellent stock pick. We also adopted a risk management model before these scandals hit the press. We implemented auditor rotation long before it was required by law. We self-regulate in order to protect the interests of the public rather than for personal benefit. We are not motivated by self-interest as so many reporters and detractors have claimed.
AW: This past year has been an extraordinary one for the profession and for you in the position of PCPS Chairman. From a personal standpoint, what lessons have you learned as an organization leader?
BB: I have learned how many very talented people are willing to give their time and energy to help the profession. I am continually amazed by how people are willing to go above and beyond the call when they believe in the cause they are working for.
I have also learned that no matter what you do, you will always have critics. Given that, you must always ensure that your motivations are true. You should not try to please everyone, rather just do what is right.
I think as an organization, recent events have raised an important question: how do we help firms practice in the changing environment? And I think the answer is to continually evaluate and adapt. Our mission to advocate for local and regional firms and to help them succeed does not change, we just need to be flexible in how we achieve it.
AW: After PCPS Chairmanship, what's next for Bill Balhoff?
BB: My heart will always be with small firms and PCPS. Even after my term, I hope to stay active in the profession. Also, I hope to spend extra time volunteering in my local community. Last, but very far from least, I look forward to spending more time with my clients and my family.