I am very interested in changing the profession of public accounting. This task will probably mark the rest of my life’s work, in some form or other. How do we take on the big task of changing the profession of public accounting? 3 simple steps.
First, we have to transform how public accounting does its work. This is a big picture goal, but one that is being accomplished by many Thriveal firms across the planet. Firm owners are now believing that they run a strategic business, that they can have the kind of firm they want, and are starting the hard work of building the kind of company that can transform their customers. Public accounting firm owners are pricing for value, making mistakes, serving a niche, taking daily risks, pivoting their business models, operating as virtual firms, traveling while they serve their clients, working in their pajamas, saying no more often, coaching and consulting with their clients, fighting commoditization, leveraging technology, and enjoying the lives that their firms afford them. Firm owners are now acting like entrepreneurs.
How are public accountants transforming their work?
Through communities! Communities are the 21st century’s platform to alignment and transformation with their strategic enterprises. Communities like Thriveal
, The Boomer Technology Circles
, RAN One
, BMRG Advisory Group
, and Sleeter
(and others) are all making headway into creating communities where like-minded people can affect change in bigger ways. Communities bring mass power, and this mass power can be leveraged for greater (and faster) change.
Second, we have to transform how compliance and regulation affect our work. This is no small task, and I’m not sure this has been fully vetted out. But I believe we can change this area. In an attempt to protect the public, regulations have been put in place to govern the licenses of public accountants. I don’t think this is a bad thing, but as an entrepreneur, I’m not as fond of rules and regulations as most. I like less structure, and more freedom to create a future that I perceive to be of high value. This second step is affecting how the first step is changing. When regulations and compliance hem us in, then we are potentially prevented from adding real value and creating the firm we know should exist. Again, I’m not saying regulations are bad, I’m just recognizing that they limit us as entrepreneurs. Most public accountants still act fearful of change, are transaction-focused, and are now being considered a commodity. Compliance and regulation, though good, is starting to hurt us from evolving into what we need to become: entrepreneurial business owners.
How can we change how compliance affects our work?
I’m not in for changing the CPA designation and what it means. But I am up for transforming it. The CPA designation was created around the turn of the 20th century (around 1896
), and surely things have changed since then. I see a future where the CPA designation remains in tact, but with additional “side certifications” proposed by some of the communities above. The AICPA
, part of our regulatory body, has attempted to create “side certifications” for some time. Some are more valuable than others. I believe the “side certifications” proposed by the communities above could be more valuable than the “side certifications” proposed by a regulatory body. Why?
Because the communities think about building entities and delivering value to customers, while the regulatory body is meant to regulate and control behaviors for the purpose of protection. I believe we need some new “side certifications” created out of our communities that clearly spell out their value, with plans to support their value through branding and marketing. I think new “side certifications” should be so valuable that they turn into immediate income for the public CPA obtaining these certifications. Can the “side certifications” from regulatory bodies make the claim that any new certification obtained (besides the CPA designation) leads to an immediate increase in their income?
What is a “side certification”? A “side certification” is one where you first have to obtain the CPA license, and then you can add to that license with an additional certification of newer and greater value.
Third, we have to transform accounting education. This, too, is a monumental task. But I still believe we can do it. This third step is affecting how the second step is changing. Regulators often use “more education” as a requirement to further substantiate the value of the CPA certification. They place the responsibility on the education system to prove the value of the CPA designation. The ‘150 hour rule’ is an example of this. But “more education” in a world of broken higher education won’t deliver any additional value. We’re seeking to affirm our certifications with the wrong thing. Therefore, we have to create a new type of education that brings real life experiences into the classroom. I’ve begun speaking at universities and accounting classrooms and it’s scary what I’m seeing. My presentation helps the students know exactly what running an accounting firm is really like. Fearful, they come up to me after my talk and say, “this is not what we are being taught!” They wonder if they will be prepared for the real world. Probably not. Not if they want to become an entrepreneur in the world of public accounting.
How can we transform accounting education?
First, I would love for the 150 hour rule
to be done away with. Now that I know what entrepreneurs are like, I’m more certain than ever that ‘more education’ is not
what they need. They need freedom to think and dream about what brings value to their precious customers, not taught more useless things by professors that don’t run their own firms. If the 150 hour rule can not be done away with, then any education beyond the basic Bachelors of Accounting degree needs to be done inside of an Incubator or Education Accelerator program run by firm owners. That is, students need to be receiving education inside of an operating entity that performs the work of public accounting firms. They need to work with real customers, real team members and real firm owners. And I’m not talking about the stodgy ‘suits’ down the road. They need to be in an exciting firm (like Thriveal firms
), led by CPAs trying to add real value to the lives of real customers.
Here is my two-fold dream.
First part of my dream, a community like Thriveal begins a new Program << insert cool name here>> to fulfill the 150 hour education requirement (until it can be done away with), solely run by the members of Thriveal. This new program is meant to serve new graduates interested in going into the creative, entrepreneurial world of public accounting. This new educational program is supported by private communities like Thriveal, and not by any government or regulatory bodies. Real firm owners bring these students into their own firms (called ‘Sponsor Firms’) to apprentice them for one year, or we create a ‘Practice Firm’ to show how to operate a firm in the real world. After one year of study, the students have their education requirements met, and they actually know how to work in a creative firm. They can then stay at the Sponsoring Firm to obtain more experience, or go look for a job elsewhere. As they enter the marketplace, they have been through the <<insert cool name here>> program, and can claim this as higher value to any new firm willing to hire them.
Higher education universities would have to agree to count the learning in this new educational program towards the 150 hour rule. Since the <<insert cool name here>> program is not an educational institution, and the AICPA requires 150 hours from an educational institution, this dream of mine would possibly have to be done in partnership with a university.
I see this new educational experience as a higher value experience than typical universities, and one where the program would only take a certain number of students per year. Each class would be vetted tightly to make sure we are finding the entrepreneurs that want to transform our work. Which takes us back to Step 1 at the beginning of this article. Transforming our work is a huge task, but it is one that will be done not only with current CPA firm owners, but also those who are following in our footsteps to change firms for decades to come.
Second part of my dream, this same entity that is operating these new forms of education can also create, develop and support new “side certifications.” Again, these are real certifications of value that are constantly changing, bringing real value to customers, and certifications for which CPAs can increase their income. Whereas the first part of my dream above is meant to address the educational deficiencies in public accounting, this second part is centered around bringing greater value to CPAs already in public practice.
Fulfilling this second part of my dream would probably require constant research and development, market testing, and vetting from public accountants in practice. The “side certifications” would be constantly changing as the market changes, and as value propositions move within the world of our customers.
These are big dreams. But I’m starting to see that there is power to make these changes, if there is interest. Can you leave me comments as to how this could be done? What am I missing? Obviously, this idea is not fully thought out, and I need help to put some initial legs to how this could work. Any ideas?