Anyone who has picked up a newspaper or seen the news over the last couple of months knows the accounting industry is undergoing great scrutiny. Though eyebrows are raised in response to one firm in particular, and talk of regulatory changes abound, companies are on the alert to ensure that their professionals, who are members of what was once considered one of most trusted industries, do not fall victim to guilt by association.
Because of the extensive changes in the accounting profession, we decided to go straight to the source and talk to some of Nevada’s own professionals from a variety of backgrounds and specialties. The common theme throughout these conversations seemed to be the need to accept change in the industry.
One of the most obvious changes the industry is experiencing is a somewhat tarnished reputation. Although many professionals are not concerned that Arthur Andersen’s current problems will directly affect on local firms or private professionals, the American Institute of Certified Public Accountants (AICPA) is not taking any chances. The organization is currently running a series of advertisements to reassure the public that the profession consists of 350,000 individuals who are committed to maintaining the highest ethical standards, and should not be judged by the sins of the few.
The current Nevada representative for the AICPA, Debra G. Smith, maintains that members of the accounting profession are still among the most trustworthy professionals. They also have to follow some of the strictest professional standards. She explained that an additional year of education after college, coupled with two years’ mandatory work experience before sitting for the CPA exam (requirements vary in some states) provide a professional in Nevada with a well-rounded background. Licensed CPAs also have to complete 80 hours of continued education every two years to maintain licensing.
Diversification & Opportunity
Planners in Nevada are often seeking new ways to diversify the state’s business opportunities without alienating the state’s core source of revenue. The accounting industry finds itself wrestling with similar challenges. How does an industry known for consisting predominantly of “bean counters” convince future professionals of the dynamic opportunities within the industry? In addition, how do current professionals overcome the stereotype of working only in taxes and audits? It is a balancing act some of Nevada’s more progressive professionals anticipated and began planning for long ago.
Even before the current scandal rocked the industry, many professionals realized change was on the horizon for the accounting field. No longer is the emphasis on tax and audit alone. For example, the 1999 Nevada Legislature passed a bill allowing accountants to receive compensation for providing financial advice to clients. Lance Bradford, president of L.L. Bradford & Co., said, “A myriad of opportunities now exist in this industry far beyond the traditional services of auditors and tax preparers. Individuals can specialize in information system consulting, complex trust and estate planning – which also integrates with insurance and investment planning – and business valuation consultants. Others opt for a career in an industry specialty such as gaming, construction or technology.”
As Smith puts it, “The door is wide open for professionals with an accounting background.” She cites herself as an example of one who has taken advantage of these opportunities. Over the course of her career, Smith has worked in public accounting, the medical field, banking, and now engineering. Chuck Burr, co-chair of Accounting Careers Interest Group agrees with Smith’s opinion. “This is a great industry for job security. Businesses can downsize a lot, but you can’t downsize your accountant. Every business needs one.”
David Chavez, partner in Chavez & Koch, believes that to have success in accounting, professionals should focus on business consulting, not just on crunching numbers. Among the variety of consulting services his firm offers is computer advice. Chavez has found companies are increasingly in need of this type of consultation. “Computers are becoming specialized, but most computer people don’t understand accounting. An accountant who understands computers is valuable,” Chavez explained.
Though the integration of accounting services may seem to the general public to have happened overnight, that certainly has not been the case. Not only do firms have to determine where the benefit exists before branching out, but designated professionals inside the firm sometimes have to obtain additional licenses in order to perform specialized consulting services.
Mike Klaich, partner at Muckel, Anderson CPAs explains that recognizing the change in how accounting firms would eventually become one-stop-shops for clients caused his firm to reposition the way it wanted to be perceived by clients long ago. “We saw this coming about five years ago, and have strategically positioned our firm to be more of a niche consulting firm that provides comprehensive services to our clients. Because of this, essentially we can compete against the large banks, brokerage firms and insurance companies because we are local, and generally have more local expertise.”
People Skills & Positioning
Gone are the days where a professional was jammed into a tiny room lit only by a single bulb, pecking furiously on a 10-key adding machine. Successful accountants must be as good with people as they are with numbers. Chavez counts personality as an important key to developing a lasting career in the profession. His theory is that just about anyone can learn to be an accountant, but if the individual does not have strong communication skills, in the long run it will not matter how technically strong he or she is. “When I interview,” said Chavez, “I want to see if the candidate’s personality will work well with clients.”
Jill Langerman, partner and CFO of Fair, Anderson & Langerman, explains, “Today’s accountant must possess communication skills, selling skills and people skills. Our firm is very active in offering educational opportunities to our staff to help them develop personally, within the company, and in their careers.”
Recruitment and Marketing
While not all job opportunities are confined to working for a public accounting firm, the bulk of an individual’s training may take place in that environment. Many students fresh out of school enter a firm with the goal of obtaining the work experience necessary to sit for the CPA exam. From there, the individual may seek what may be considered greener pastures in the private sector. However, if a new accountant has been exposed to enough opportunity in a public accounting firm, he or she may be encouraged to remain in public accounting. Whatever the reason, a firm’s marketability needs to be multi-faceted. Firms are finding it necessary to provide challenges to staff beyond simply tax and audit. Not only does offering multiple services make a firm desirable to the client, but to the potential new-hire as well.
Another challenge for accountants is dealing with marketing. In years gone by, an accountant could simply hang out a sign and business somehow found its way to the door. These days, with the introduction of consulting services, it is important to be able to explain to potential clients all the services a CPA firm can now offer and how it can benefit them in all areas of their business, not just in taxes or audits. Many professionals find themselves busy staying on top of the changes in their environment while handling their regular practice, that they opt to employ marketing specialists to develop a strategy for getting the word out.
Curt Anderson, CEO of Fair, Anderson & Langerman, has been a member of the accounting industry for 30 years, and has a strong handle on the importance of finding room for change. Simply put, “If you don’t like change and intellectual challenge, this isn’t the business for you. If you do things the way you’ve always done them, the industry will pass you by. It’s not just a book-smart business anymore.” In a state where diversification is an integral cog in keeping the Nevada wheel turning, it seems members of the accounting industry are right on track in doing their part.