The Illinois CPA Society convened its annual summit Tuesday where members heard about the issues confronting accountants at a time when inflation and fears of recession are worrying their clients.
The Great Resignation has made it more challenging for many CPA firms to retain talent, and recruitment of young people into the accounting profession has declined in recent years, according to the most recent American Institute of CPAs trends report. Yet accounting remains an essential function for any company to survive, and businesses are relying heavily on their trusted financial advisors.
The ICPAS Summit in Rosemont, Illinois, attracted 900 attendees this year, including 300 in person, according to president and CEO Todd Shapiro. He is set to retire next February after leading the organization since 2013 (see story). “It’s been fun,” he said. “It’s been a hell of a ride.”
As one sign of that volatility, he is starting to see some recent slackening in the demand for talent, with some firms even rescinding job offers.
“I’ve heard that as much as it was an employee-dominated market, that there’s been some movement,” he told Accounting Today. “That pendulum may be swinging a little bit. I’ve heard talk that some firms are rescinding offers because they’re concerned about what the future is going to be. That’s a concern. There’s a little bit of inflation factored in there, but the No. 1 issue that we still hear is staffing.”
Staffing issues have been a persistent issue for years, but they seem to be growing. “People leave the profession in large numbers, and I think that may be worse now,” said Shapiro. “The only trend that I see changing a little bit in staffing is apparently some firms are having trouble getting first-year college grads. There’s been some decline in college grads.”
Another issue roiling the profession lately has been the entry of private equity firms buying stakes in Top 100 Firms like Citrin Cooperman, EisnerAmper, Cherry Bekaert and Schellman. ICPAS chair Mary Fuller recently joined Citrin when her Chicago-based firm, Shepard Schwartz & Harris, was acquired in July, with the help of funding from New Mountain Capital (see story).
“We just recently were acquired by Citrin Cooperman,” said Fuller. “I look at it as an opportunity for our people because instead of them switching and going somewhere else because they’re bored and they want something different to do, they have an array of different services that they perform or opportunities, whether it’s in technology, cyber, wealth management, cannabis or whatever it is. There are a lot of different areas that they can go into before they make a change, but you have to pay attention to young people and listen to them, not just let them get frustrated and move.”
Private equity’s role seems to be growing in accounting, most recently with a deal announced Monday, which will see Grant Thornton selling its public sector advisory practice to a private equity-based company (see story). Fuller sees positive benefits from her experience with the acquisition by Citrin of SS&H, where she had been managing partner since 1981.
“I was part of the negotiations for Citrin Cooperman to acquire us in the Chicago office,” she said. “It was myself and my partner Stan Lazar. When we decided to do this, we did it for a couple of different reasons. We were working with a firm that we felt was like-minded to us in terms of being entrepreneurial and worrying about their people and the clients. Second, a capital infusion. It’s difficult for a firm of 85 people to have the necessary resources for the technology and the staff, trying to hire good staff to come and join you. A lot of people go to the bigger firms and we felt that this would be a great resource for us. We had met [Citrin Cooperman executive chairman] Joel Cooperman eight years ago, and when we were talking to him, we met different partners from their organization. So our first thing was to make sure it was a good fit for our people, for our partners, for our clients. As far as the private equity goes, they own a percentage of the companies. There’s more than one entity between attest and advisory, and we are all owners. Our partners are owners and we have a piece of it, and other members of our staff, our managers and directors, all get units, so they feel like they have ownership of this instead of waiting for 10 years.”
She sees the arrangement fitting into succession planning at firms like hers. “There’s been talk about succession and people may do mergers because they don’t have a succession plan,” said Fuller. “It’s not that there wasn’t a succession plan, but a lot of the younger people don’t want to be like us and have to work until they’re 65 or 70 years old. They want a lot of things now, so we felt that this was the best option to have the resources that they had to have exposure to the industries that we work with and also access to people.”
For ICPAS, the succession plan is already in place for Shapiro, who will be succeeded next February by Geoffrey Brown, who has been CEO of the National Association of Personal Financial Advisors since 2013. He will be starting the transition with Shapiro in December.
“He’s dynamic and full of energy and younger than me,” said Shapiro. “I really believe if isn’t broke, you should break it. Having a new perspective is not a bad thing, it’s a new thing.”
“Todd will be a tough act to follow, but I think Jeff will bring a lot to the table,” said Fuller. “He’s a great person. He met with the staff and the directors and the executive team about two weeks to make an introduction. He was very personable. He wants to get to know people and understand what’s important to them. With the board, we will set up a transition team to make sure that he’s successful when he starts. Todd’s been nothing but great through this whole process and trying to help. I tried to offer him a job. I told Todd, ‘You don’t have to go. You can stay.’ But he wanted to retire.”
Shapiro is already making plans for enjoying his retirement: “Everyone says, ‘What am I going to do?’ I said, ‘I’m going to Hawaii.'”