AICPA Town Hall – October 24, 2024

Main Theme: This episode provides a comprehensive update on the state of the accounting profession, focusing on two crucial topics: CPA pipeline growth opportunities and an election update. Executive leadership discusses strategic challenges, legislative changes, and innovations shaping the future of the profession. Insights are given on attracting new talent, navigating licensing reforms, responding to industry disruptors, and understanding political impacts.

1. Council Reflections & Key Announcements

Speakers:

• Barry Melancon (President & CEO, AICPA)
• Erik Asgeirsson (President & CEO, CPA.com)

Council Meeting Overview [00:10–03:49]

• The AICPA Council operates "sort of like a combined House and Senate for us" – representatives from every state gather to give feedback and shape strategy (Barry Melancon, 01:35).
• Barry Melancon reflects on his legacy as CEO over 30 years, signals ongoing involvement into 2025.

  “The profession is very meaningful to me…but let’s focus on the issues and really get to what’s top of mind for everybody today.” (Barry, 03:30)

Leadership Transition [03:59–05:05]

• Mark Koziel appointed as next CEO, starting January 1, 2025.
• Praised for expertise, roots in both public and management accounting, and earlier role with Town Hall.

  “Mark is going to do a fabulous job…his knowledge…is going to be just fabulous for the association going forward.” (Barry, 04:29)

2. Profession & Economic Outlook

Key subjects:

• Member outlook surveys signal ongoing uncertainty.
• National debt’s unsustainability is emphasized:

  “On an accrual basis…more than $130 trillion of deficit. [GAO] do not give a clean opinion on that report.” (Barry, 05:38)

• 2/3 of business execs still anticipate a recession [06:56].
• Firms' main concerns: Talent pipeline, embracing next-generation strategies, IRS issues, technology changes, and firm transformation [08:00–09:06].

3. Standards Evolution & Technology

Speakers: Barry Melancon, Erik Asgeirsson

Client Accounting Services (CAS) Clarification [09:06–11:12]

• New standards clarify that financial statements from CAS do not belong under peer review but instead under consulting services.

  “It’s a little bit of an attempt by our standard setting to be…more precise and clear where there’s been some complexity.” (Barry, 09:22)

• This change is well received—expected to help reduce reluctance around starting licensed CPA firms offering CAS [10:44].

4. Market Disruption & Tax Practice Strategy

The Intuit Ad Controversy [12:28–16:27]

• Intuit ran, then pulled, an ad considered hostile to CPAs.
• Barry Melancon notes the issue is bigger than a single ad:

  “We have always competed…in the tax space…We are now in a period in which the tax return is a byproduct.” (Barry, 13:29)

• Firms are urged to “think strategically about tax practices” and focus on the relationships and expertise that technology companies cannot easily replicate.

5. Election Update & Legislative Outlook

Speaker: Mark Peterson (DC Legislative Affairs)
Key Points:

• Historic early voting; battleground states in focus [16:43–19:39].
• Trump slightly ahead in polling across swing states, but all within the margin of error.

  “It’s going to be close…trending towards close as we sit here today.” (Mark, 16:43)

• Congress likely sees a Republican Senate and possibly a Democratic House; slim majorities mean unstable leadership [20:14–20:54].
• Lame duck session expected to be less productive than aspirations suggest:

  "It always starts out incredibly ambitious and ends up being the absolute least amount of activity." (Mark, 23:11)

Beneficial Ownership (BOI) Reporting [21:08–24:08]

• Deadline for government funding: December 20.
• Two pending bills could delay BOI requirements; mixed court decisions create uncertainty.
• FinCEN is actively discussing relief and practicalities with state societies.

6. Regulatory Landscape: Tax and Extension Reform

• SAFE Act (relating to tax extension thresholds and processes) is gaining bipartisan support [29:14–29:47].
• Disaster relief and automatic extensions continue to be a focus due to recent hurricanes [30:19–31:09].
• Distinctions among paid tax preparers, CPAs, enrolled agents, and “ghost” preparers are under renewed scrutiny, with regulatory efforts aimed at rooting out fraud and incompetence [26:16–29:04].

7. CPA Pipeline: Addressing the Talent Shortage

Speakers: Lisa Simpson, Sue Coffey

National Pipeline Advisory Group (NPAG) Findings & Proposals [31:17–36:22]

• NPAG's charge: Devise a fully inclusive, data-driven national strategy for attracting/retraining CPAs.

  “No one theme is more important than the other…We all have to do it together." (Sue Coffey, 34:34)

• Key focus areas:
  • Telling a more compelling career story
  • Improving academic and exam experiences
  • Enhancing employee experience
  • Increasing flexibility and affordability in education (especially around the "150 hour" requirement)
  • Prioritizing DEI at all stages

New Pathway to CPA Proposal [36:22–43:13]

• Out for exposure until December 6, 2024.
• Proposes an alternate route: Bachelor’s degree + 2 years of verified practical experience (meeting defined competencies) + passing the CPA exam.
• Seven professional competencies (e.g., ethics, communication, technology mindset) and three technical competencies (varied by practice area).

  “It's designed to be incredibly flexible and not rigid by any means and easy to implement.” (Sue Coffey, 42:21)

• Feedback from firms: This framework might benefit broader HR and professional development, not just new CPAs [41:10].

8. Technical & Practice Management Updates

Speaker: Lisa Simpson

Disaster Relief Resources [44:57–47:40]

• Tools, benevolent fund, and member resources for disaster response and client service.
• Three-phase support model for CPAs: Planning, immediate response/tax, and recovery documentation.

BOI E-Filing Clarification [47:50–50:40]

• Correction: Clients are able to confirm BOI filing via IRS tools; documentation and assistance resources updated.

Upcoming Professional Development & Cybersecurity [47:50–49:47]

• Webcasts upcoming on BOI and CPA pipeline reforms.
• October is Cybersecurity Awareness Month; AICPA releases an updated guide for CPA firms (in partnership with AON and CNA).

9. Open Forum & Member Q&A Highlights

• Clarification on whether CPA firms should offer BOI services:

  “I would think very hard about having another service provider inserting themselves by providing BOI compliance when my firm could actually do that…from a client continuity perspective.” (Barry, 50:40)

• Engagement letters and timing (30-day change reporting) flagged as issues; AICPA liability insurance covers BOI filings as accounting service [53:06].
• On the new CPA pathway, difference from traditional “2 years at 120 hours” model is the formal competency framework evaluated over two years [54:51]:

  “We’re helping out by adding those competencies, both professional and technical.” (Sue Coffey, 54:51)

10. Memorable Quotes

• Barry Melancon [on CPA value]:
  “The CPA firm knows more about that client than anyone else in the world. It just seems to me strategically, I would think very hard about having another service provider [for BOI].” [50:40]
• Sue Coffey [on talent]:
  “There is no one stakeholder in our profession…who can do it alone. We all have to do it together.” [34:34]
• Mark Peterson [on election timing]:
  “It’s going to be close. Probably not going to be able to call [the race] by November 7th.” [19:15]

11. Timestamps for Key Segments

• Council Meeting Reflection/Transition: 00:10–05:05
• Economic Outlook and Firm Priorities: 05:05–09:06
• Standard Setting (CAS & Technology): 09:06–11:12
• Tax Practice Disruption: 12:28–16:27
• Election & Congressional Update: 16:43–26:15
• BOI and Legislative Items: 21:08–26:15
• Pipeline & Pathway to CPA: 31:17–43:13
• Technical Update & Disaster Relief: 44:57–47:40
• Q&A: 49:47–54:51

12. Resources and Next Steps

• Engage: CPA pipeline proposal feedback due by December 6, 2024
• Learn More: Free CPE webcast on new CPA pathway, October 30, 2024
• Upcoming: Election debrief & FinCEN guest, next Town Hall November 7, 2024

This episode stands out for its clarity on the legal, technological, and market trends shaping the accounting profession, practical analysis of legislative challenges, and actionable guidance for firm and individual adaptation.