At other times, the entrepreneurs and employees have had to adapt, to constantly find solutions to deal with crisis situations. This paper is part of the current situation we are living in, by analyzing the extent to which the pandemic has influenced the activity of professional accountants under conditions of risk and uncertainty. However, now is also a time to document gaps in your contingency planning and to identify opportunities to improve the way your business responds to crises, both for this current pandemic as well as challenges that arise in the future.
When looking at the next busy season, accountants are worried about the communication with clients and within the companies since most will still be working remotely. Our impression is that most have either gotten used to working in a virtual office space or are still in the office at least part-time. Yet many expressed a preference for face-to-face meetings and interacting with people. The researchers’ findings suggest that some industry moves to address the shortage may be misguided. For example, trying to change the image of the profession may backfire, particularly if it attracts people ill-suited to the profession who expect something different than what it actually is and thus don’t last long. Similarly, calls to raise wages may be misguided if they do not address the underlying issue that firms view technology as a more efficient solution than labor for many accounting tasks.
Cost Optimization Strategies for Resilient Growth
In the case of accountants, the researchers argue that, at first, demand for accounting labor declined as software made accountants redundant. Students who may have been considering accounting majors switched to related majors such as finance in numbers large enough to contribute to the current shortage. But the shortage has not led to wage gains, as might be expected whenever supply falls short of demand. Software has continued to improve, and employers in need of accounting work have become less willing to raise wages due to the perception that entry-level accountants’ technical work could be addressed by investments in IT. Rather than raising starting salaries to encourage students to major in accounting and become accountants, the industry in effect responded that it would prefer to continue relying on technology instead of paying better wages.
- Discuss modifications with the client as the engagement fee or realization may also be impacted.
- While this creates new opportunities for CPA firms, it also introduces new, corresponding risk.
- When looking at the next busy season, accountants are worried about the communication with clients and within the companies since most will still be working remotely.
- Team members will be able to work from home on a more regular basis and forgo lengthy commutes.
- With deeper relationships, firms can set themselves up for continued success.
Accommodations may be required for clients with upcoming fiscal year ends. For example, it may no longer be considered “safe” to perform physical inventories, and fraud inquiries may need to be performed virtually. If both the client and engagement team are working remotely, how will evidence be gathered and tested? Assess engagement plans to determine if modifications are required in order to comply with professional standards. Discuss modifications with the client as the engagement fee or realization may also be impacted.
Competencies Required for the Next-Generation Auditor
Together, we traversed through time to examine the past, dissected the dynamics of the present, and cast our gaze upon the future of the accounting profession, all in pursuit of fostering more significant equity and inclusivity. This may concern some firms who are fearful of losing their how has covid affected the accounting profession top employees. However, the quicker an accounting firm transitions to workplace flexibility, the sooner they can also draw from this global roster of CPA candidates. Browse all our upcoming and on-demand webcasts and virtual events hosted by leading tax, audit, and accounting experts.
The relevant insurance policy provides actual terms, coverages, amounts, conditions, and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. It is accurate to the best of the authors’ knowledge as of the article date. This article should not be viewed as a substitute for recommendations of a retained professional. Such consultation is recommended in applying this material in any particular factual situations.
The Accounting Profession Amidst the COVID-19 Pandemic
While the full impact of COVID-19 is unknown and uncertain, what is certain is the need for CPAs to be vigilant and informed and to be flexible and adaptable in their response to these changing times. Taking necessary precautionary steps now is important and will help to provide protection from potential losses that may arise as the public health and economies recover. Does the client understand its responsibility to make management decisions and implement recommendations made by the CPA?
