Evolution and Transformation, Transformation and Evolution

By: Calvin Harris, CPA

From the very first certified public accountancy law (passed in 1896 in New York State) to the present day, the accounting profession and the nature of being a CPA have been marked by constant evolution and transformation. Even if we don’t see it or feel it, change is happening, and it is incumbent upon us in the profession to drive the evolution and transformation needed to keep the profession relevant.

Many of us have heard the story of the frog and the pot of boiling water. According to the fable, if you put the frog in pot of boiling water, it will feels the intense heat and immediately jump out of the pot. But if you place the frog in cool water and slowly heat it up, the frog will stay in the water, even as the heat gets dangerously hot. The story may not be scientifically accurate, but I think it gets to a greater point: When transformation is extreme and intense, it is impossible to miss. But when transformation occurs slowly, one might not recognize the magnitude of the change. If you are not careful, the world can evolve around you, and before you know it you might be extinct.

Can the metaphorical frog in the pot can teach us anything about the state of the accounting profession today? There may be many challenges facing the profession, but I prefer to think of them as opportunities. Those opportunities are not new, and truly affect the future of the profession “from cradle to retirement.” Various trends are headed in the wrong direction for the accounting profession, including: the average age of CPAs, the number of people taking and passing the CPA exam, the number of students who choose accounting as their college major, the enrollment levels at four- and two-year colleges, and even nationwide birth rates.

All of these factors are trending in directions that jeopardize the long-term sustainability and relevancy of CPAs if we do not act. But none of these trends are new, nor are they beyond resolution, especially if (at least in my opinion) we maintain an “and”—not an “or”—perspective.

The opportunities to enhance the profession cannot be resolved with one solution or approach. In many cases, we should try multiple and diverse approaches to these opportunities simultaneously. It is with that sort of hopeful and approach that I am quite excited about the possibilities of CPA Evolution.

As you may know, the CPA Evolution Project is a joint initiative of the National Association of State Boards of Accountancy (NASBA) and the AICPA that aims to transform the CPA licensure model and will launch a new Uniform CPA Examination in 2024. Part of why I am excited by the possibilities of CPA Evolution is that it will expand the exam and profession to recognize areas including information technology and data analytics. These aren’t new areas for CPAs, but their importance continues to grow with time. The new 2024 exam will recognize how these areas already fit within the accounting profession.

Although there may be additional work to come, expanding the CPA to reflect current realities is a good thing for the profession. It shows a commitment to continued relevancy. And even though change can often be hard, I have to remind myself that the certified public accountant title is more than 125 years old, and precedes the widespread use of electricity. A lot has changed since then, because a lot had to change to keep the profession relevant.

When I took the exam, more than 25 years ago, many current CPAs were up in arms because candidates like me were able to use calculators. But those calculators reflected how CPAs were working at the time, and the exam needed to reflect that. Similarly, many CPAs were concerned years ago, when candidates used computers. But, once again, those computers better reflected how CPAs were truly working in the profession, and the exam needed to reflect that.

It is that similar consideration given to how CPAs work today (and how CPAs may work tomorrow) that has me hopeful that the CPA Evolution will be a success. I consider it a huge step in the right direction, though many other steps will be needed to seize the opportunities facing the profession.

With that in mind, I trust that you will find this issue engaging, as we focus on the evolution of the CPA. I can assure you that your New York State Society is focused on the profession’s continued transformation. Please let me know your thoughts on this issue, especially as they relate to ways the Society can maintain its relevancy to the CPAs of this great state and the profession as a whole.

Ever Upward!

Calvin Harris, CPA (Md.)

NYSSCPA CEO.