The accounting industry is changing rapidly. Today’s accountant has become more of a business consultant than the mathematical tool of the past, but recent changes are affecting the profession further. Automation and new technology keep changing the accounting industry in specific ways, and the American Institute of Certified Public Accountants recently launched a new version of the Uniform CPA Exam in 2017 to meet these new demands.

Accounting And Emerging Technologies

Anyone who wants to become a CPA must keep up with emerging technologies, as well as use their higher-order thinking skills to transcend into new professional climates. Needless to say, there has been continuous changes throughout the history of accounting, forcing accounting professionals to adapt, adjust and learning new skills.

For hundreds of years since the Italian mathematician Luca Bartolomeo de Pacioli (1447–1517), aka “The Father of Accounting and Bookkeeping,” invented accounting by publishing his work on the double-entry system of bookkeeping, accounting consisted at large of the manual recording of income and expenses.

In 1978, however, VisiCalc let companies upgrade from from manually calculated spreadsheets to automated cells. The next major change came with Quickbooks in 1998, which rapidly became the most popular accounting software in the U.S. Over 4.5 million companies use Quickbooks, and over 80 percent of the bookkeeping is done with Quickbooks. The physical time spent between accountant and client has also been largely eliminated. Cloud-connected computers, smartphones and tablets enables firms to provide clients access at all times.

Independent Monitoring

As the software improves, many businesses also manage more and more of their own daily accounting. Professional accounting services are increasingly needed to interpret data, give good financial advice and help with business decisions. The Uniform CPA Exam needs to be regularly updated to meet the new demands, and changes are evolving at an ever increasing speed!

The reason for the recent changes in the exam is the result of a research project launched by the AICPA in 2014 to identify what knowledge and skills the newly licensed CPAs must have to protect the public interest. AICPA found that CPAs must have the ability to perform more advanced tasks, to manage complex accounting projects earlier on in their careers, and demonstrate higher order cognitive skills and professional skepticism.

The updated CPA exam is widely regarded as more difficult, having an increased emphasis on testing higher order skills. An increased number of task based simulations are used, and the length of exam increased from 14 to 16 hours, consisting of four sections of four hours each. This affects the cost of the exam for the student, as the new version is slightly more expensive.

The Future Of Accounting

A score of 75 is still required to pass the new CPA exam. While the last CPA Exam tested two skill levels: (1) Knowledge & Understanding, and (2) Application, the new version tests four skill levels adding (3) Analysis, and (4) Evaluation to the mix. Analysis and Evaluation are considered to be higher-order thinking skills, and it’s the testing of these, which are thought to increase the overall difficulty of the exam.

Once successfully certified, the future for CPAs will continue to evolve and accountants will face significant changes. In today’s workplace, more generations than before are working side by side, in flattened hierarchical structures, and 26 percent more millennials will be in the workforce by 2020. The time spent in formal office settings are reduced, and work will continue being outsourced from the U.S. to India and other countries. Robotic automation will continue to kill some jobs but also create others. The booming technology will demand constant updates of new skills and knowledge.

Basically, what we are seeing today is that the ability to perform more advanced tasks as well as the flexibility to adjust to new demands will be increasingly needed in the future. It’s not possible to know exactly how accounting will continue to evolve, but three major changes likely to take place over the next three decades are evolving smart and digital technology, continued globalization and new forms of regulation. What we do know is that the accounting industry is changing rapidly, and CPA’s will need to regularly update their skills and knowledge to meet these new demands. It’s more important than ever to be aware of and keep up with how automation and new technology continues to change the accounting industry!

Have a question? Contact Bryce Welker founder of Crush The CPA Exam.

Your comments are always welcome!