Guest Blog: Richard Muscio, CPA, on CPA Horizons 2025 Report

Richard Muscio is long-time friend of VeraSage.

He recently read the AICPA’s “CPA Horizons 2025” report, and was inspired to write this post.

Since we here at VeraSage love a great debate, we’d love to hear your opinions with respect to this report, and Richard’s comments on it.

From Richard:

I just finished reading the recent report titled “CPA Horizons 2025,” which was put forth by the American Institute of Certified Public Accountants to describe both the current state as well as the future of the CPA profession.

Please allow me a couple of minutes to stretch my 6’2″ frame, because to be able to read this report, I had to cram myself into a very small box.

The CPA Horizons 2025 report concluded that “the services that CPAs provide have become so varied and diverse that the concept of core services is no longer representative of the profession.”

This conclusion was reached based on interviews with approximately 5,600 CPAs.

To test the veracity of this conclusion, I emailed 17 customers, and asked them: Excluding me, since I am special (well, at least according to my mother…), what services to you think of when you think about what CPAs do? I received 14 responses.

13 customers said, in effect, that CPAs prepare income tax returns and financial statements. One customer said CPAs help their business customers to sleep better at night.

I like this last answer, but this particular customer never follows instructions, so I will disregard it in context of my specific question. I am glad, however, that this customer sleeps better since we started working together.

So the next question: if the AICPA-interviewed CPAs say that core services (preparing tax returns and financial statements) is no longer representative of the profession, then why do customers of CPAs not seem to know that? Let’s look for answers by reviewing the conclusions in CPA Horizons2025.

The first conclusion: the world is now driven by technology, and CPAs need to change how they do business to accommodate this fact. Really, the AICPA needed to interview 5,600 CPAs to conclude that?

The second conclusion: the CPA profession must find solutions to offer investors and stakeholders up-to-date, real-time financial information, because of how fast the business world now moves due to technology.

Okay, I’ll give the AICPA credit for pointing out that having financial statements that are current as of yesterday is an improvement over having financial statements that are only current as of last month of last quarter.

However, in both cases, both of these results are the recitation of history. Whether you are looking at last month’s bank reconciliation or yesterday’s bank reconciliation, in both cases you are looking at the past.

How about CPAs helping their business customers to predict how much cash the business will have in the bank at the end of next week, next month, or at September 30, 2012?

All of the technology in the world does not matter if CPAs cannot start to help their customers by looking through the front windshield of their car while they are driving, as opposed to trying to drive the car by looking through the rear-view mirror.

Objects in the mirror are closer than they appear: could that object be the irrelevance of the CPA profession in the economy of the future?

If CPAs cannot help customers to peer intelligently into the future, then irrelevance of the CPA profession will certainly be the result.

An additional benefit should result, that is to say, fewer accidents will happen. And for those of you who have forgotten Enron and Qwest, I offer you the recent explosion called MF Global.

The third conclusion: CPAs must embrace mobile technologies and social media to modernize and enhance interaction and collaboration with clients (AICPA’s word, not mine) and colleagues.

I flat out disagree, because my customers want consistent and repetitive face-to-face interaction, which includes ideas for value creation. The technology is merely how we transmit certain information.

I will in fact argue that the most valuable resource a CPA can create is a vast and talented and multi-disciplinary network of complementary professional (and other) services providers, that can assist customers with virtually any need that the customer may have, CPA service-centric or not.

This is not accomplished through spending one’s days typing emails and playing with the latest and greatest technology, it is accomplished through constant contact and face-to-face interaction.

I will further assert that tremendous improvement in technology has caused “reverse delegation” in the CPA industry, that is to say, multitudes of CPAs are now performing data-input based tasks because of the ease of use of technology, and given how much compliance work exists in the profession, many CPAs I know are so “busy” (man I hate that word…) that they have no time or energy to actually think about the future, whether their own future or their customers’ futures.

The thought occurs at this point whether perhaps the AICPA should have interviewed 5,600 customers (or in the AICPA’s words clients) of CPA firms instead, because it doesn’t sound like very many of the 5,600 CPAs who were interviewed asked their customers what they want (not “need”) from the CPA profession.

But perhaps that would have been difficult, I suspect some of the answers may have been hard to listen to, let alone to meaningfully respond to.

All of these conclusions beg the same question for any individual CPA: what business am I really in?

If for example 90 % of your revenue comes from preparing income tax returns and financial statements, then you are not a CPA you are a historian.

The larger question becomes: how do I differentiate myself from my CPA competition? What is exactly at stake if I am unable to differentiate?

The fact is, most CPAs could not even sell cheeseburgers to the Donner party. I looked at 8 CPA firm brochures (yes on paper, not on the computer) and they all basically say the same thing: “we provide full-service income tax and financial statement preparation services that are of very high quality.”

They also all have a lot of pictures of men 55 and older wearing dark suits. No differentiation there.

How can consumers of CPA services know what CPAs are actually capable of when most CPAs cannot differentiate among themselves or away from traditional services? You are what you do (not say) every day, and consumers respond accordingly.

Next time, may I suggest to the AICPA that you interview 5,600 customers of CPAs? I’ll bet your conclusions would be different.

As the to relevancy of my profession in the economy of the future, if this report is the best that the AICPA can do, then I think I will call my stockbroker to buy short against my profession’s stock.


  1. Richard –

    Great article and well-written.

    I always laugh at articles or research that says a certain segment must “embrace technology”. Yes… I remember the same thing when faxing came along … “embrace the new faxing technology”.

    What a distraction from what matters. As you said, it’s incumbent upon professional firms to help their clients navigate the future.

    Technology is a means to the ends.

    The only thing I would take under futher consideration is your point to interview the customers. I’m not so sure about this.

    Would we have the iPad, the iPhone or … going back a bit … automobiles if customers were consulted? I’m not so sure.

    I think the report would have been better if they had interviewed thought leaders in the CPA space and not the masses – either firms or customers.

    It’s thought leadership that can truly transform industries – not playing to the average.

    Great article!

  2. Matthew Tol says:

    Terrific article – but Peter’s points are well made.

    Unfortunately, where you get the “average” then most things will remain somewhat status-quo. I was taught that “average” is where the best of the worst meets the worst of the best.

    The profession needs to have a period of navel gazing (the Christmas break is always good for that down under) – the navel gazing needs to be about what it can be rather than how we change what is because “what is” becomes the pivot around which it turns…

    I’m always a bit sceptical about predictive reports – I think it would be better if they had have asked a group of 9 year olds what they think it could be. Probably more vision and less motherhood?

  3. I love that thought Matthew about asking the group of 9 year olds what they think it could be.

    The one thing that’s amazing about kids is that they don’t know / don’t care what the boundaries are. If they want something, they will attack it.

    Great for brainstorming.

    (Of course, crappy for actually getting things done in most cases but that’s a discussion for a different day.)

    Asking the average adult about the future is an excercise fraught with futility. Most of us can’t see beyond the week.

  4. Kurt Siemers says:

    Great article to create discussion. I absolutely agree with the foundational ideas in your article regarding the value of future looking services.

    Must disagree regarding your dismissal of the importance of technology as a tool (now and more so into the future). It is the preferred communication tool of Gen Y and the profession needs to improve our capabilties in this area, particularly as the younger generation become the decision makers and leaders of business. Even this blog demonstrates an opportunity ignored by many in the profession. Constant contact can not be achieved in person across large geographies.

    Actually, I found little to disagree with in the report. The need to create forward looking services, be adaptive to change, be more diverse and certainly differentiated in our services. Even the conclusion our customers (at least our best customers)see us as something different than preparers of financial statements and tax returns is accurate in our firm. Must admit the latter view is probably not a majority of the profession’s customers but the good news is the report encourages us to focus beyond that box.

    Thanks for your article.

  5. Kurt –

    Today’s technology is tomorrow’s background. Technology is a means to an ends.

    I’m sure even a desk stapler was considered “must have” technology at some point. 🙂

    Just my 2 cents.

  6. Tom Hood, CEO and Executive Director at Maryland Association of CPAs, left this comment on Richard’s post:

    Ron, Since I was involved in facilitating the 16 grassroots future forums and was involved as a volunteer from the original CPA Vision, I can offer some perspective.

    The Vision was designed to be a very large umbrella for all CPAs, including those like me (CEO of NFP), members in business, industry, and government. It was more for individuals than firms or companies. The Vision was also meant as a starting point, not a prescription but a place to start crafting your own (or your firm or organizational vision. Think of it as research about the critical trends and insight facing CPAs in the future (out to 2025).

    As I read the report, I saw a definite theme of moving up the value chain in what we provide (all CPAs) and deploying technology to do that (think KPIs, dashboards, big data, and visualization). I also specifically heard value pricing (and Ron Baker) come up in several of the in-person future forums, although it must have gotten diluted with the electronic comments.

    Jody L. Padar was in our session in Illinois and is right about being upset and not enough real progress from CPA Vision 2011. Why did we not make more progress? I think there are two reasons – we were fighting the pull of the adoption curve across an entire profession and CPAs were waiting for the checklist for the future (when you come up with that let me know). However in our work with students and young professionals we did see them get inspired and love the core concepts (I will add a link to our one page document).

    In closing, I think the fact that the CPA Profession (and AICPA) deserve kudos for helping to focus us on the future and think about who we are and where we want to go. No other Profession has even attempted it and we have done it twice. What will happen is that those progressive and future-minded CPAs will begin to forge our future (like a lot of you here at Verasage) and begin to find the pathways that will lead to an exciting future. Take the research and findings and then think about where you want to go.

    In the words of futurist, Watts Wacker, “If you don’t have a vision for yourself, or your organization, you will just get sucked into someone else’s vision.”

    One last comment about surveying customers, instead of CPAs, I agree with Henry Ford who said if I asked people what they wanted (as he was inventing the model T), they would have asked for faster horses!

  7. I wish the rear view mirror analogy would become widely adopted in the profession. It takes a lot of work to fight off the bad habits and build a consultative practice that helps customers plan. Planning is a discipline our profession has abdicated to attorneys and business consultants. Nowhere is this more true than in the area of “tax planning” which consists mostly of spending down profits before year end and scrambling for elections after year end.

    But this is changing. There is a new generation of firm owners and future firm owners and they are anything but satisfied with the role of scorekeeper. They don’t settle for customers who see their role as one limited to preparing income tax returns and financial statements. Were you to poll their customers you would get answers as varied as their personalities and business models.

    In their world when you describe technology as a tool you miss a crucial point. It is like saying a car is simply faster than a horse. Technology is transformative. It not only changes the communication with the customer, it changes the relationship with the customer. Technology doesn’t just make service delivery more efficient, it cannibalizes entire sections of the business model. Technology is simply a spoke in the broader wheel of innovation that is driving younger CPA’s to do things their managing partners or former bosses were too reluctant to do.

    I appreciate your perspective and I have no doubt that it is shared by a portion of those 5,600 CPA’s who were interviewed. I see a different perspective along with another portion of that same 5,600 person sample. In such a broad and diverse group our customers have the opportunity to find someone that fits their idea of what a CPA should be. And I agree with you, their voice is the one that matters most.

  8. I hesitate to speak, given the level of IC already present in the comments here. So I approach cautiously, like a very nervous mouse in a room full of tigers…

    Having participated in the 2025 project, I am a bit disappointed in the results. There has been a lot of discussion already here about the what (tax returns vs. consulting) and the how (technology), but where is the reflection on the why and the who? “Making sense of a changing and complex world?” To quote a friend’s blog post (which I will take responsibility for), your vision statement sucks. Palm readers have the same vision statement. So do musicians, and pastors, and every human being alive in this changing and complex world.

    Why does someone NEED a CPA? What value proposition – what unique perspective – at looking at this world can only a CPA bring? Why isn’t our WHY reflective of something more proactive and forward looking than “making sense”? Why isn’t it “molding” or “directing” or “facilitating” or “policing” or “attesting”.

    And lastly, the who. I am a Gen Y (shocker, right?) and 9 out of 10 of my ideas I contributed were a plea for help, for CPAs with experience to step up and mentor and teach me how to build trust and how to actually perform when my mouth gets me into tight spots. But not one recommendation (other than perhaps “lifelong learning”?) regarding recruiting/attracting/mentoring/guiding/inspiring a new wave of CPAs made it into the report. So really, all we’re told going into college is what the colleges tell us: Go into accounting! It’s one of the top-ten job guaranteeing degrees in the US. Then, when we get there, we’re drawn to the Big 4 and the cities, because since we came in for the money, we better go where the money is.

    Where are the senior CPAs showing the new guys what the profession is about, that we’re more than payables, receivables, and audit trails? More than IRS notices, and state decoupling modifications, and timesheets? Trusted advisor – and the actual lives changed that go with that – is a title earned by blood, sweat, and tears (and caffeine). But a guiding hand from just ONE CPA in my first six years like I’ve received in the past year (From Tom & the MACPA, and the gang over at sure would have saved me a lot of sleepless nights feeling all alone in a profession, having no one to talk through my issues. I am still in the profession (and thanks to this past year, have no intention of leaving ever), but not everyone has Tom as their Executive Director, and I just barely lucked into finding Thriveal. Again, I’m out of my league here and will regret this comment in the morning, but it’s hard to place much confidence in CPA Horizons 2025 when all I’ve known are CPAs that don’t plan to be in the business much longer than that.

  9. Bill Tsotsos says:

    Young CPA candidates should be armed with the right questions to ask when they are being recruited. Among them: what % of annual revenue is invested in staff development, does the firm have a succession plan in place and a clear path to partnership, does your firm have a mentoring program, has your firm embraced social media, how do you answer the question “why should I do business with your firm”, what is the firm’s mission statement, how frequently do you contact your clients, do you survey client opinions of your service and finally, do you really understand your client and his/her business? The young person that asks these questions will be offered a position – the responses he/she hears will determine whether or not to accept.

  10. I appreciate everyone’s insights into this groundbreaking report; however, I think you missed several key issues that I explored with thought leaders of the profession in Chicago earlier this month.


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