Is it time for a rebranding of the accounting profession?
It’s not news to anyone in the profession that there is a greater demand for new people in the accounting pipeline. Unfortunately, every year, we see fewer people entering the profession.
The graph above shows the pipeline in black and white, and it is a pretty depressing picture. And in the PR department, arguably it gets worse.
In February 2023 Joe Queenan wrote an article in the Wall Street Journal where he said “300,000 accountants and auditors have left the profession, many on the dead run.” Later, he refers to the long-held depiction of accountants as “bean counters, unexciting number crunchers who have their heads buried in Byzantine financial statements … obsessed with trivial details.” Contributors in subsequent posts about this article mused that “an actuary is an accountant who couldn’t take the excitement” (now, as a Math major and former teacher very close to the actuarial profession, I could take that seriously …!).
Of course, fewer accountants entering the industry means fewer qualified professionals moving through the pipeline. Fewer CPAs to provide audit and tax insights, fewer CMAs to dig into the numbers and turn them into strategy – you get the picture.
Rebranding starts at the top - Rethinking CFOs
CFO and advisory teams, regardless of size, structure, or location, are responsible for being preservers of value enabled by their competencies in technical accounting, reporting, compliance, internal control, audit, and assurance to protect the organization’s reputation and assets on behalf of stakeholders.
They also use their decision support capabilities to help the organization create and sustain value for the long term, enabled by competencies in strategic planning, FP&A, M&A, enterprise performance management, ERM, data analytics and technology, and more. CFOs and their teams serve as strategic business partners and trusted advisors to multiple stakeholders in and outside of the organization.
So instead of focusing solely on financial reporting, it’s safe to say a CFO is more focused on the value of the organization. Professor Mervyn King, a leading corporate governance expert, has long advocated for a title change for CFOs, suggesting that the CFO should be rebranded as the Chief Value Officer (CVO).
Think of it like this. A CVO is responsible for creating value in the business and ensuring that all relevant aspects of value creation and destruction are accounted for and communicated to boards, management, and external stakeholders. The CVO also has to report all assets available to the company, including natural assets, and advise companies on public interest issues and sustainability1.
Defining new roles for a changing profession
This title change is part of a larger shift towards integrated thinking, which requires the CFO and their finance team to move from accounting for the balance sheet to accounting for the business and value creation2. This shift is also applicable to those who head CPA, CA, and advisory firms large and small.
Who wouldn’t want to be part of this profession, one that infuses strategy, technology, and analytics into accounting and finance decision-making, complemented by professional judgment, with increasing relevance and influence in a high velocity, transformative and uncertain business environment?
We have an opportunity and an obligation to do a better job at telling this story of a profession grounded in ethics which makes a difference for organizations and for society. Even better – it’s a profession that offers multiple career paths and is exciting.
Yes, exciting.
And yet, we’re not communicating this to a younger generation seeking to make their impact both in their careers and in the world at large.
It's time to change the conversation around accounting
First, we should stop calling what we do, "accounting." At least, without context.
I assert that our professional ecosystem does not tell a consistent, coherent, or inspiring story which turns off entrants to our profession. Instead of providing real insight into the full story of the profession, we’re focusing on the wrong things.
Look up any definition of accounting, and generally you’ll see oversight and hindsight (accounting for the past), recording of transactions, complying with standards, reporting and either checking the box or checking the checkers. Yes, this is critical work in the role of preserving value, but often inefficient. Beyond that, many, if not all these functions are being replaced by RPA, machine learning, and AI. For a demographic seeking stability and growth, thinking that most of the profession is moving to automation will turn them to other career possibilities.
What we fail to communicate is that not only is there a need for human co-piloting of these activities, but our profession also focuses on insight and foresight, enterprise decision making and resource allocation, data modelling and analytics, strategic planning, futures analysis, FP&A, M&A, etc.
We’re squabbling internally about Financial Accounting versus Management Accounting. CMA versus CPA, or CA, etc. All this does is divide us within the profession instead of offering a unified call to action to attract new people.
We’re creating jingles, songs, and comedy bits in isolated movements to “make accounting cool.” They’re cute, but they aren’t going to inspire someone to make a life-changing decision to dive into a career path.
Are we doing enough to support legislation in the US – specifically, H.R. 3541, the Accounting STEM Pursuit Act of 2023 – to add accounting to grades K-12 science, technology, engineering, and mathematics education (STEM) programs? This must have the full force of the global profession behind it for ultimate passage.
At the same time, what are people continuing to know the profession for? Long hours often with no opportunity for OT at the big firms. Boring work that will soon be replaced by robots and machines. The 150-hour state CPA requirement which serves to create a less inclusive and less diverse profession (spoiler alert: even if we wanted to undo this, it probably would take many years)
What's next?
This blog aims to inspire a more balanced, albeit fierce, conversation and tell the full story of the profession with specific actionable ideas to dramatically increase and diversify the pipeline. What do we call our profession? Finance and Accounting? How about Accounting, Technology and Analytics? And how do we capture our roles as strategic business partners and trusted advisors, combing technical accounting depth with value chain breadth to both preserve and create value? We’re going to explore this and so much more over the coming weeks. Stay tuned.
Sources:
1. The rise of the chief value officer · CFO South Africa
2. Accounting for Value Creation and Encouraging the Rise of the Chief Value Officer | IFAC