Blog

4 accounting profession challenges (and what to do about them)

minute read

Last Updated June 5, 2024

Share

Accounting profession challenges never cease.

A few years ago, you faced—and overcame—the challenge to pivot to remote work…nearly overnight. The COVID-driven disruption spiraled into a host of other challenges that changed work forever:

Remote work turned from a “nice perk” to a must-have.

Next came the challenge of equipping remote employees with devices and vertical workplace protocols.
And finally—all the changes to cybersecurity protocols to safeguard firm and client data.

And that’s not all.

Current trends and ongoing developments in the accounting profession—from the demand for more services to figuring out how to retain Gen Z—are causing firm leaders to take a step back. To rework. To remaster.

Let’s look at some of these challenges and burgeoning trends—then get a glimpse into how to face them head-on.

1. Talent acquisition and retention

  • There’s a growing demand for skilled accounting professionals.
  • Attracting and retaining top talent continues to be a struggle.
  • Flexible work arrangements and new technology are helping to attract and retain younger talent.

The number of accounting graduates is declining. (The number of graduates getting an accounting bachelor’s or master’s degree has dropped 4% since 2020.) And even fewer accounting graduates are choosing to become certified. Combine that with the news that nearly 75% of CPAs met the retirement age in 2020—and it all adds up to a major shortage.

As Economics 101 taught us all, the greater the demand, the more people are willing to pay. Not only are new grads pushing for a higher starting salary, but they also want more benefits.

To differentiate your firm and attract the best talent, take a look at your firm’s culture. How does it stack up against the competition? It may be wise to review your company’s Glassdoor account every so often to find out what employees really think.

Happy (and not-so-happy) employees can leave reviews on Glassdoor about their experience working at your company. And it’s often the first place people look before deciding to take a meeting with a prospective employer.

2. Technology disruption

  • Technology is transforming the accounting profession.
  • Automation, artificial intelligence and cloud solutions have changed traditional accounting processes.
  • Firms that fail to keep up with the latest advancements will be left behind.

I’ll say it: Technology has disrupted the accounting profession for the better.

I had a recent experience with our internal accounting team. Details aren’t super important here, but I needed a course reimbursed. I used an online tool/application called Expensify to track and handle the reimbursement. In a word, the experience was fan-freaking-tastic.

The app did its thing, was approved by various people, then deposited into my account within a few days. Totally frictionless. I was able to check in on my expense report’s progress the entire time as well.

This is just one app; one small example. But it’s indicative of a much larger accounting profession challenge and transformation.

Client standards are changing. We expect rapidity; we demand a positive experience. Why? Because we have a limitless number of accounting firms or businesses to choose from (aka, the internet.)

You must use technology to your advantage—not only to avoid being left behind, but to enhance your existing business and keep clients happy.

If you’re saying, “That’s great, but where do I start?” read on.

How to begin to use technology to overcome challenges

Begin by evaluating a technology provider that provides more than one solution. The simplest way to do a lot with a little is by consolidating your solutions.

Evaluate managed service providers who offer solutions that help overcome accounting challenges. Remote work, cyber threats, client collaboration and inefficiencies can all be overcome with better technology.

Read more about those solutions by following the links below:

3. Cybersecurity risks

  • Accounting firms handle sensitive financial information and are at risk of cyberattacks, data breaches and other security threats.
  • Firms must invest in robust cybersecurity measures to protect their clients’ data and reputation.

“Rising cybersecurity/fraud threats” was among the most frequently selected accounting profession challenges from the State of Accounting Firms Trends Report 2023.

And it’s no surprise. As accountants, you’re quite literally handling the most sensitive financial information and PII (personally identifiable information) that’s out there.

A successful accounting firm breach is a hacker’s goldmine. Just think: hacking into one accounting firm is like striking a few hundred birds with one stone.

Chances are, you already know this. So, let’s skip the rest of the “why you need better security at your accounting firm” lecture and jump right into what to do about it.

How to protect your firm from cybersecurity risks

Work from a protected environment, like the cloud. Hosted apps are more secure than non-hosted apps for a multitude of reasons. Read about those reasons here.

  • People are prone to mistakes. The only way to lower your #1 data breach risk is by training staff. (And don’t forget to take the training yourself. No one is immune to a cyberattack.)
  • Monitor your devices. Because not everything can be run in the cloud, and attacks come from multiple entry points, you need someone consistently monitoring for intrusions and detecting vulnerabilities on work laptops and desktops. Learn more about a layered security approach.

4. Changing tax laws and compliance

  • Regulations continue to change.
  • Accounting firms may struggle to keep up with the new requirements and standards, leading to additional costs and resources.

According to Caseware’s State of Accounting Firms Trends Report 2023, 33% of accounting professionals stated that new laws and regulations were among their top practice management challenges in the past year. The sentiment was echoed in AICPA and CIMA’s PCPS CPA Firm Top Issues Survey.

But it hasn’t been just the past year—it’s been many years. In the last half-decade alone, we saw the Tax Cuts and Jobs Act significantly change tax laws. We saw a multitude of updates to the Sarbanes-Oxley Act. The Public Company Accounting Oversight Board (PCAOB) issued new guidance for auditors to better evaluate the effectiveness of a company’s cybersecurity controls.

And those are just three of many, many changes.

What’s to be done?

How to stay informed about changing tax laws and compliance

There are several ways to stay informed about accounting profession changes:

  • Subscribe to profession-specific publications: Follow sites like cpapracticeadvisor.com, accountingtoday.com and journalofaccountancy.com, which provide updates on new regulations, accounting standards and other industry news.
  • Join professional organizations: The American Institute of Certified Public Accountants (AICPA) and the Institute of Management Accountants (IMA) offer a wealth of resources—including training programs, conferences and webinars— that provide updates on regulatory changes and other important developments.
  • Continuing education: As you’re already aware, you’re required to complete a certain number of continuing professional education (CPE) hours each year to maintain your professional license or certification. CPE courses often cover new accounting standards and regulatory changes.
  • Visit government agency websites: The Securities and Exchange Commission (SEC) and the IRS websites are great places to browse information about new regulations and guidance. As the saying goes: straight from the horse’s mouth, eh?
  • Network, network, network: Participate in the societies mentioned above; attend those webinars and events. Social gatherings like these provide opportunities to learn about and discuss the impact regulatory changes are having on firms. And they may provide you with better ideas for how to address them.

Accounting profession challenges aren’t going away

The number of accountants will continue to dwindle as baby boomers retire. Hackers will continue to find ways to break down the safeguards. Technology will only keep getting better with more and more solutions being released all the time. And mandates and compliance will just keep evolving.

It’s time to embrace change! Adopt newer and better technologies. Block the hackers. Rejuvenate your firm with exciting benefits and an indelibly positive culture. And stay ahead of the change curve.

For more news about all of the above, subscribe to our blog.

Recommended next

Accounting Profession Trends: New Horizon Group Think Tank Highlights

Subscribe to our blog

Get Rightworks articles delivered straight to your inbox.
Privacy(Required)