Chair’s Memo: The Infinite Game… 

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To be chair of this fine organization is an extraordinary opportunity at any time. But, serving in this position, at this point in NASBA’s 115-year history, given the unique challenges currently facing the profession, along with the challenges faced by you –and other licensing bodies attacking your regulatory authority– is an even more exciting, yet daunting, opportunity. State boards are at a critical juncture in their life cycle. So, I am extremely honored to serve beside you as we meet these challenges head-on, together.

Let me begin by posing a few questions to our membership: Where is everyone? Why are you worried? And, how hard can it be to be a CPA?

CPA Pipeline 

Let’s tackle my first question. Where is everyone? Whether you are in public practice, private industry, or government, most of us have been affected by the CPA Pipeline crisis and the “Great Resignation.” Is it any wonder we have been asking the question– Where is everyone?

Here are some important statistics pertaining to accounting graduates, accounting graduate hires, and CPA Exam candidates. The number of accounting graduates has gradually trended downward. In fact, there are seven percent fewer accounting graduates in 2020 than there were in 2014. When comparing accounting graduate hires by public accounting firms during the same time span, 36 percent fewer accounting graduates were hired by firms in 2020 than in 2014. That is a reduction of more than 15,000 accounting graduates –an incredibly alarming statistic. When comparing the year 2021 to 2016, the number of CPA candidates decreased by nearly one-third, or almost 16,000 candidates.

The CPA Pipeline continues to be one of the most significant issues facing the profession and Boards of Accountancy, who are charged with regulating CPAs on behalf of the public. As the CPA pool diminishes, access to the CPA who has demonstrated expert proficiency in understanding and describing the language of business, will continue to diminish as well. Thus, our vested interest.

There are several factors at play leading to the current CPA Pipeline crisis including, but not limited to, the great number of baby boomers retiring; the continuous decline in U.S. birthrates; the declining enrollment in post-secondary education; a decrease in accounting students sitting for the CPA Exam; the ever-changing business environment; and the “Great Resignation.”

Thankfully, several NASBA committees have dedicated time to address the CPA Pipeline. I would especially like to commend the Diversity Committee who, in addition to focusing on improving the diversity of member boards, is also focusing on diversifying of our CPA candidate pool.

CPA Pipeline is so important, we have established a special task force to focus solely on CPA Pipeline efforts, and to brainstorm activities state boards can implement to address pipeline challenges within their own jurisdictions.

CPA Evolution 

My second question – Why are you worried? There will always be a need for CPAs, won’t there? Last April, while recuperating from knee surgery, I was given a book to read entitled, “The Infinite Game,” by Simon Sinek. I found it particularly relevant for all that is happening in the profession today. The basic premise of the book is there are two kinds of games in business–finite and infinite. Finite games are played to win, and include a beginning and end, a start and finish, a winner and loser. Infinite games, on the other hand, have no time limit. There is no finish line, and no real ending. In an infinite game, there is no such thing as winning or losing. Rather, the objective is to keep playing–not to win, as there is no finish, but to adapt to the changes in the game in order to keep playing. From a business perspective, at least for those businesses that have a long-term view and an infinite game mindset, there is no finish line, no completion of the game–everything is geared toward the perpetuation, the continuation of the business. Not just for the next quarter or the next year, but for the next generation. How does that relate to us and our business of protecting the public? Isn’t ours an infinite game?

We have all experienced a lot of change during our careers. The business environment in which we operate and the accounting profession in which we regulate continue to evolve and grow more complex and demanding at an ever accelerating pace. Our current environment requires new CPAs to learn and possess an expanded skillset to meet the changing needs of the marketplace and continue playing in the game. This includes having a strong and diverse understanding of technology-related topics, which are now embedded in the operations of a CPA’s clients, employer, or self-owned firm. They are also expected to effectively communicate the appropriate guidance on complicated topics to their clients or employer.

CPA Evolution, the joint initiative between NASBA and the AICPA, is the crucial attempt to anticipate and assess the changing needs of the marketplace, the needs of the public we represent, and put the profession in position to meet those needs and remain relevant. The initiative does this by addressing two of the three Es needed for licensure–Education and Examination.

From an education perspective, the CPA Evolution Model Curriculum was developed to provide colleges and universities a guide detailing the type of educational skillsets CPAs will need to meet the growing and evolving needs of the public, now and into the future. From an examination perspective, the CPA Exam is being retooled to match the needs of the public to the skillsets possessed by the CPA candidate. The new Exam is set to launch in January 2024.

What does this mean to state board members? It is critically important for you to remain engaged in the discussion as you represent the public and their needs. For the right skillsets to be included in the educational foundation of future CPAs and for those CPAs to remain relevant, you must be aware of the skillsets needed, input your regulatory voice into this process and be actively engaged with the colleges and universities in your jurisdiction. 

Anti-Regulatory Legislation 

My last question – How hard can it be to be a CPA? Don’t you just have to use a computer program and push a button to prepare a tax return and a year-end financial statement for a banker? How hard can that be?

As state board members, you have a challenging job. You all do such vital but thankless work in many respects because, most often, it goes unseen. You have been charged by the Governor of your state to use your considerable expertise and knowledge of the profession to stand in the shoes of the public to ensure they are being provided the type of services they expect and deserve, but most often, they have no way of knowing if they are receiving such services. Adding to your challenge, the public you have been charged to protect does not understand the services they are requesting and receiving, the oversight CPAs provide, or all that licensed CPAs have accomplished to achieve and maintain their necessary level of expertise –the education rigor, the testing rigor, the experience rigor– to adequately provide services to the public. Expertise that separates the licensed CPA from an accountant.

Further, the public does not understand all that a CPA does to keep current on ever-changing tax law, or what is entailed in properly presenting financial statements that can be relied upon by a third-party. It is not as easy as just pushing a button. Those who challenge professional regulation are not going away. And, as they meet resistance in their efforts, their arguments morph, change and evolve.

I urge state board members to remain vigilant by listening to what is going on in your state, remain informed as to the various services CPAs are being asked to provide, work to understand the complexities inherent in those services, and be able and willing to voice, to all who need to hear, the ramifications to the recipient if services are not provided as expected and deserved.

Through its membership in ARPL, the Alliance for Responsible Professional Licensing, NASBA continues to work on your behalf to educate those who wish to eliminate any regulatory oversight and to help them understand the complexity of the CPA profession, and how it differs from other regulated professions due to third-party reliance placed on the results of services provided by the CPA.

Conclusion 

The CPA Pipeline, CPA Evolution, and the attacks on your authority to protect the public are certainly not the only issues facing state boards and NASBA. However, they are three major issues for which we need to remain focused, and address from an infinite game mindset. There is no end to our game! The public needs the services CPAs expertly provide, so there must be CPAs available to provide those much-needed and ever-changing services, and there must be a mechanism in place to ensure the public is receiving the services they desperately need.

Thank you for this wonderful opportunity to serve you as NASBA chair. It truly is an opportunity of a lifetime!

Richard N. Reisig, CPA 
NASBA Chair, 2022-23