North American leaders give an update on the profession in their respective country.
The Accountant World Survey 2017: The Americas
Canada
By Joy Thomas, CEO & president, CPA Canada
What were the trends in the last year affecting the accountancy profession in your country?
The federal government introduced the country’s most significant and far-reaching tax proposals in decades. The focus was the taxation of private corporations. There is a widespread belief that these proposals will threaten jobs and investment, and add complexity and costs to entrepreneurs and small businesses of all income levels. While the federal government has announced some follow-up measures, the proposals continue to raise many questions and concerns.
As a long-time advocate of tax reform, CPA Canada firmly believes the proposals should not be viewed in isolation, but rather, as part of a comprehensive review of the country’s tax system.
The proposals represent significant changes to tax policy, and also involve broad and complex technical rules. This makes it difficult for tax professionals to determine how the rules may or may not affect their clients.
CPA Canada believes we must stop complicating our beleaguered tax system and build a new, streamlined structure that is simpler and fairer.
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By GlobalDataCPA Canada is closely monitoring the ongoing NAFTA negotiations. The labour mobility provisions in NAFTA have worked well for Canadian professional accountants, and have benefitted businesses on both sides of the [USA/Canada] border. It is critical to maintain the temporary entry rules that currently exist in NAFTA and CPA Canada would like to see the list of recognized professionals upgraded to reflect the jobs of our modern economy.
CPA Canada along with other CEOs in the Accounting Bodies Network recently signed a statement of support for the recommendations of the Task Force on Climate-related Financial Disclosures.
What challenges was the accountancy profession facing in your country in the last year?
There are a few industry developments that are top of mind for CPA Canada right now. The use of audit data analytics; assurance services for cybersecurity; new reporting models like integrated reporting, reporting for natural capital, and sustainability reporting; and the fact that investors are using information outside of traditional financial statements such as MD&As, news releases, and non-GAAP measures that put auditors in the position of providing assurance over such information.
At the crux of all of these hot topics: how can auditors meet new and increasing demands, especially small and medium-sized practitioners with limited resources? That’s where we aim to bring value, evolving along with the audit industry, and helping our members through new challenges and opportunities in their field.
There are demographic pressures facing our profession with many of our members nearing retirement age. Not only will the profession be losing experienced members but it also will face a challenge in meeting the growing demand for professional accountants. We recognize the importance going forward of attracting internationally trained professional accountants.
We are negotiating recognition agreements with many international accounting bodies, including the recent renewal of a trilateral agreement by professional bodies from Canada, the United States and Mexico. This clearly demonstrates the commitment of the Canadian CPA profession to help advance labour mobility through international recognition and efficient integration into the workforce.
CPA Canada is also exploring a new competency framework to identify and address the skills CPAs will need to reach their career aspirations, ensuring they stay ahead of the curve, from certification through their career life-cycle.
What are your organisation’s strategy/plans/projects for the next two to three years?
To help address key drivers of change in organisations and the profession, and to navigate a changing global context, we developed a model called RAISE. Which stands for: Resilience, Adaptation and Innovation for Sustainable Enterprises.
Resilience is the ability to manage risk in the face of disruptions and recover quickly while maintaining continuous business operations.
Adaptation requires a high degree of flexibility at all levels of the organization. That means the ability to learn from the context of a situation and adjust business practices to respond to change, whether internal or external.
Innovation is the capacity to bring fresh, novel and even revolutionary concepts to life to transform the organization and create sustainable value.
And a Sustainable Enterprise is the end result of effectively applying “resilience”, “adaptation” and “innovation.”
We are also working to support Canada’s Indigenous community through our participation in a mentorship program run in conjunction with the Martin Family Initiative. The program lines up professional accountants across the country to act as mentors for Indigenous youth, and encourages academic success.
Also, through our MoU with AFOA Canada we are working to create flexible education pathways and support more overall financial capacity building in the indigenous population.
CPA Canada also continues to work towards our organization’s digital transformation. This will not only ensure the faster the flow of information but also provide valuable analytics for informed decision making to better serve our members and other stakeholders.
The United States of America
Jeff Thomson, CEO, The Insitute of Management Accountants
What were the trends in the last year affecting the accountancy profession in your country?
The management accounting profession is undergoing seismic shifts in the USA and globally. Robotic process automation and AI are prompting accountants to seek new ways of staying relevant. They are “skilling upwards” and thinking about the functions that can’t be easily automated; strategy and planning, managing and developing people, decision making, and creative thinking.
This struggle to stay relevant is not just happening at the individual level. At a macro level the upsurge in larger M&A activity speaks to organizations wanting to access new markets, products, and expertise.
On the regulatory front, early 2017 saw major changes to regulatory reporting. While many of the rules will be phased in over the next three years, some organizations went ahead and adopted them for 2017. Customer-contract revenue recognition and cash flow statements were two areas impacted by these rules. 2017 also ushered in new accounting standards around leases for both private and publicly held organizations that rent space. There is a sense of urgency as organizations are approaching the official adoption date of these standards beginning 1 January 2018 for most public companies.
According to an October 2017 ACCA and Institute of Management Accountants report, in the USA, more people said they felt less confident about the future than those who said they felt more confident. While I don’t have a crystal ball for 2018, I expect USA confidence levels to remain mixed.
What challenges was the accountancy profession facing in your country in the last year?
The major challenge management accountants faced in the last year can be encapsulated in “adapting to change”. You can see it in all the major areas cited as problematic by organizations; keeping pace with stakeholder demands, raising market share, and talent retention.
Technology plays a huge role in alleviating some of these problems. Automating routine tasks creates more opportunity for management accountants to demonstrate higher order skills like strategic thinking and client relationship building. But these skills are not learned overnight. Access to continuing education programs is critical for these professionals who need to transition into new roles because of disruptive technology. For those new to the profession, applying the technical skills they learned in school to real-world situations is challenging. It is imperative they find a mentor who can help them with transitioning from the theoretical world of academia to meeting on-the-job demands. The backdrop to all this is staying competitive. Organizations, just like individuals, are staring obsolescence in the face if they can’t differentiate the products and services they are offering. There is a shift underway from simply servicing clients and customers to advising them on ways to do things better. Big data has transformed the way most organizations are operating. Management accountants are “future-proof” because they know how to leverage big data to yield new insights on operating models. They also know how to tell a story with data, weighing in on decisions of what to spend and when to spend it.
What are your organisation’s strategy/plans/projects for the next two to three years?
At IMA we are future-focused. We are growing the number of Certified Management Accountant candidates worldwide by communicating the certification’s unique value.
For the 55,000 people worldwide who already have the CMA, we offer continuing education that hone skills and position professionals for the future. We are growing our global footprint, with members in over 100 countries worldwide. And recently we surpassed our 90,000 member mark and are on track to have 100,000 in the near future.
