Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

More good stuff for CPAs: fees increasing and level of change increasing

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Two articles for your consideration:

  • We need to figure out how to ‘surf’ the massive waves of changes surrounding us.
  • Some CPAs are able to post fee increases. From my perception, that is a big change after seven years of economic hangover from the Great Recession.

3/24 – Tom Hood on LinkedIn – Why Accountants Must Learn How to Ride These Big Waves of Change – There are massive waves of change on the horizon. Risks of getting drowned are high for accountants and auditors.

We need to understand what those two comments mean and how to cope with the implications. Tom Hood’s article points toward those waves that are soon to crash down on our heads.

It’s a VUCA world

Major changes we are in can be summarized by that phrase:

  • Volatility
  • Uncertainty
  • Complexity
  • Ambiguity

You could ponder the implications of those four terms for hours.

Tom Hood’s recommendation on learning how to surf the waves, since we can’t stop them:

Embrace digital

Anticipate

Collaborate

Learning is the next competitive advantage

Protect the core

Make time for the future

What is the “Uber” disrupter in the future for CPAs?

Here is one way to describe the challenge: Will we in the accounting and audit world be like the taxicab industry trying to fight off Uber and Lyft? Or will we somehow figure out what that threatening thing is and adapt to it?

The really weird, incomprehensible question to me: What is the Uber-like thing that will overturn the audit world?

I am not smart enough to see what that thing is. Perhaps I have already taken the most important first step – I know there is something out there on the horizon but I can’t figure out what it is. But I know it is there.

Fee increases starting to appear

3/27 – CPA Trendlines – New Survey Finds Widespread Rate Hikes in Tax & Accounting Firms – Survey with 530 respondents reported the following:

  • 5% are seeing significant increase in billing rates in their market for their firms and competitors
  • 35% are seeing moderate increases
  • 47% are seeing slight increases
  • 3% are experiencing rate and fee decreases (don’t know where the other 10% are)

Major factors driving the change cited by the article include

Increased overhead

Technology costs and rising salaries are driving up costs.

Increased competition

An abundance of firms or lack of clients is holding down fees.

Economic conditions

Article explains what I’ve seen in Southern California – the overall economy at the national level is improving but there’s a lot of places with continued turmoil and a lot of places where there’s business distress. One CPA sees his clients in his market struggling through the eighth year of recession.

Harder work

Tax and audit regulations are getting more complicated and messier. Unless you are doing work of such quality as to earn a review of your workplaces by your state board of accountancy, the time involved to do just about any kind of work is going up.

Written by Jim Ulvog

March 28, 2016, 9:28 am at 9:28 am

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