accounting profession also impacted by private equity and environmental, social and governance factors.
by angie grissom
the rosenberg national survey of cpa firm statistics
the accounting industry continues to be poised for significant changes over the next year, influenced by trends including more private equity activity and evolving business needs and strategies.
editor’s note: every year, the 2024 rosenberg national survey of cpa firm statistics asks the profession’s top consultants two sets of questions:
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- how do you think the next 12 months will unfold? trends? predictions? other thoughts?
- how would you assess the last 12 months? trends? observations? struggles?
more: challenges for the accounting profession: private equity, offshoring, training new hires | focus on intentional growth | what’s going to happen? lots, say consultants | how accounting firms are handling the staff shortage | when staffing falls short, clients get culled | staffing turnover’s down, but why? | is this the last year of accounting’s golden age?
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the consolidation of accounting firms is expected to speed up in 2024. this trend is driven by the need for firms to enhance their resources, expand service capabilities and gain industry expertise. there will be a notable increase in mergers among top firms, including regional and national mergers, as well as east coast/west coast collaborations to broaden geographical reach. private equity (pe) involvement will also grow, with more pe transactions involving the top 150 firms and smaller tuck-ins. private equity firms are predicted to continue their significant involvement in the accounting sector. key areas of investment will include technology and health care.
artificial intelligence (ai) will continue to play a critical role in transforming accounting practices. firms will expand their use of ai beyond automating back-office functions to deploying enterprise-scale platforms that enhance efficiency and decision-making. ai will also be utilized for predictive analytics, cost optimization and improving overall operational efficiencies within cpa and advisory firms and pe-backed firms.
the industry will continue to put a greater emphasis on succession planning and talent management. we have already seen firms implement esops to attract and retain top talent. leadership training, mentoring and faster promotion to partner ranks will be key strategies to address talent shortages. firm culture and employee retention and wellness strategies will continue to take center stage.
the regulatory landscape will continue to evolve, impacting accounting and advisory firms. firms will need to adapt to new auditing standards and compliance requirements, particularly related to environmental, social and governance (esg) factors. investments in clean energy projects will create additional opportunities for advisory services. this will also contribute to firms’ continued focus on identifying and servicing clients in their ideal client profile as workloads continue to grow and burnout continues to be a concern.
over the past 12 months, key trends have emerged in the accounting industry, because of multiple factors: technological advancements, continued changes in workforce dynamics, ever-changing regulatory landscapes and firm combinations.
for technology integration and automation, we are seeing a strong focus on ai, which firms are using to automate tasks. this is unfamiliar and intimidating to many firms but has and can continue to strengthen the focus on serving clients as advisors.
the workforce dynamics including the shift to hybrid workspaces coupled with the ongoing challenge of a talent shortage has firms rethinking their recruiting and retention strategies. more firms are hiring remote workers and prioritizing employee training and development than i have seen in previous years. we are also seeing a greater focus on the power of collaboration within national and global firms as these organizations are taking note of the need for a connected workforce, constructive collaboration and the ability to refer work across the organization regardless of industry, service or location.
the profession continues to adjust to new regulations and standards, which creates the need for continued education of its team members and clients. this creates additional opportunities for firms but can also create challenges when trying to keep up.
the merger and acquisition landscape continues to evolve with significant acquisitions and combinations. one example is the forvis mazars formation of a global network with a goal to expand the u.s. presence with mazar’s extensive international footprint. many firms are making moves to support clients’ needs in multiple regions by providing expanded service offerings.
these combinations and mergers represent significant shifts in the accounting industry, redefining the competitive landscape, providing clients with more options and higher-value services for their accounting and advisory needs.