This past year has been filled with a lot of financial stress and legislative updates for you and your clients. You’ve been forced to learn and adapt quickly, to ensure that your business evolved alongside the tax industry. As you begin to prepare for TY23, we wanted to connect with a true industry expert to hear and learn from his insight.

Joining us on the blog today is Sidney Kess, CPA, J.D., LL.M., nationally renowned tax lawyer and accountant. In this article, Sidney shares his thoughts on the current state of the accounting profession and forecasts how he sees the industry changing within the next few years.

TaxAct Professional

How have tax law updates, the state of our economy, etc., impacted the industry this past year?

Sidney Kess

Post-pandemic, we are seeing a great deal of uncertainty: political, social, economic/financial, regulatory. The global economy is on unsure footing, with inflation, increased interest rates, stock market instability, and fears of a recession. There are rising costs of gasoline, groceries, and housing. Only one in five has a positive view of the US economy, and the negativity affects individuals and businesses and leads to concern about growth in the accounting profession.

There is a great deal of new legislation – the Inflation Reduction Act, the Secure Act 2.0, the Strong Retirement Act HR 2954. CPAs must study all the new developments and adjust their tax planning and preparation strategies. Laws are increasingly complex, and many professionals fear that they will not be able to keep up with all the changes.

The accounting profession is facing a weak “feeder pipeline” these days: it is hard to find college students who want to get an accounting degree, hard to find qualified CPAs, and difficult to retain talented workers.

There are a number of reasons for this: In the past, CPAs knew that tax season would be brutal, but much of the year had an acceptable workload. Now, with a shortage of skilled staff, the workload is often chaotic year-round. CPAs resent the long hours and feel that the salaries are not compensating adequately for the demanding schedules and constant effort, with no breaks between seasons. Even top firms have staffing fears. With staffing shortages, many accountants find they are dealing with a harsh workload and no down-time. The work is often solitary, and burnout is a big problem. Firms must go to war with other firms to keep talent and keep clients happy. There has not been much success with diversity/equity/inclusion.

Everyone is finding that they must protect against increasing cybersecurity risks. They are dealing with increasing risk of identity theft and fraud. They need digital tools to protect their firms.  They must figure out how to incorporate emerging technologies, already accelerated due to the pandemic. They need software solutions so they can quickly help clients comply with new complex regulations.

These are among the many issues facing our profession!

TaxAct Professional

What do you think CPAs should be working to implement over this next year, to ensure that they succeed in this industry long-term?

Sidney Kess

The accounting profession needs to embrace digital issues and sustainability and focus on optimizing technology and human potential. CPA firms must focus on the multiple demands facing the profession, look to increase efficiency, enhance security, and reliability, reduce costs, and be a force for good. The profession must focus on data analytics, cybersecurity, and risk management. CPAs must realize that, even with cost reductions, there remains a need for human judgement and political sensitivities. The field must attract new talent; promoting the profession to high schoolers and community college students makes a lot of sense. Focusing on improving diversity and inclusion is imperative!

Companies will need to think pro-actively. Perhaps they can create niche practices, advisory practices, where high talent is valued. Firms cannot remain oblivious to the concerns of staff; re-structuring might be necessary. Maybe a hybrid work model might increase employee satisfaction. The emphasis should be on workplace wellness, with the focus on work-life balance for employees. What if employees could set their own hours, while earning better salaries and having lucrative perks, including stock options and rollover-equity? Companies will have to figure out how to change their business model to create a work environment where talent is valued, motivated, inspired, and adequately compensated. Additionally, leveraging AI and investing in digital transformation might help firms compensate for capacity problems.

TaxAct Professional

Is there any other insight you’d like to provide our readers?

Sidney Kess

I am excited by the new subject matter on the revised CPA exam that is coming online in 2024, such as material on Personal Financial Planning (PFP). I believe that Financial Planning is the future for CPAs and will help the profession attract new quality candidates. The PFP field will excite a new crop of students and energize a new group of professionals, providing possibilities of increased motivation and higher salaries. This could only help our profession.

I am also encouraged by CPAacademy.org and the huge contribution it has made to the CPA profession by providing free or low-cost continuing education. In the past, CPAs had to pay large sums of money to keep up with developments in the field. They had to pay for programs, travel, and hotels to attend important continuing education programs. Many professionals could not afford the programs and could not take the time off to attend. Only senior CPAs or experienced, wealthy practitioners could afford to attend the best programs. Now, thanks to Scott Zarret, everyone has access to top lecturers, and study is possible in the evenings after work or on weekends. This is a huge contribution to the accounting profession as a whole and to individual accountants, no matter where they live or how much money or free time they have. I must say that this gives me great hope for the CPA profession going forward!