By Shawn Parikh.
In the last few years there has been a shortage of critical skills with regards to the accounting profession and especially in the output of North American and European professionals with CPA, EA and CMA qualifications. This accounting qualification shortage has put a squeeze on firm owners who require individuals with these designations. And almost like a super hero movie a few unlikely protagonists have appeared on the scene.
Countries like India and the Philippines have stepped forward and built an ecosystem that caters towards filling this gap. Rather than being constrained towards a single country, accounting credentials such as Certified Public Accountant (CPA), Enrolled Agent (EA) and Certified Management Accounting (CMA) are quickly turning into global designations.
The increased need for accountants and auditors is driven by factors such as globalization, an expanding economy, and a complicated tax and regulatory environment. In general, it is anticipated that the expansion of the accounting and auditing professions will be directly correlated with the state of the entire economy. These individuals will still be required to create and review financial records as the economy expands. Public accountants will also be more necessary when more businesses go public since they must manage the legally required financial documentation.
The development of technology is hastening the transformation of the accounting sector. Automation, minibots, machine learning, and adaptive intelligence are swiftly joining the finance team. Over the projected decade, technological progress is anticipated to have an impact on the role of accountants. As platforms like cloud computing, artificial intelligence (AI), and blockchain gain more traction, some common accounting procedures might be automated.
Although it will boost accountants’ productivity, this modification is not anticipated to result in a decrease in total demand. Instead, the automation of repetitive jobs like data input will highlight the advisory and analytical responsibilities of accountants. This is where skilled CPA, CMA AND EA professionals shine.
The three primary U.S. accounting and tax credentials:
- Certified Public Accountant (CPA)
Professionals in accounting who hold a license are given the title of “certified public accountant” (CPA). Each state’s Board of Accountancy issues the CPA license. Resources for getting the license are available from the American Institute of Certified Public Accountants (AICPA). In the accounting sector, the CPA designation aids in upholding professional standards.
- Certified Management Accountant (CMA)
A professional specialization called Certified Management Accountant (CMA) focuses on accounting and financial management for businesses and organisations. A person who has this certification is proven to be an authority in both financial accounting and strategic company management. As a result, rather than emphasizing audits, taxes, and other general accounting material, the CMA education process is focused on corporate decision-making.
- Enrolled Agent (EA)
A federally authorized tax professional who represents taxpayers before the Internal Revenue Service is known as an Enrolled Agent. The phrase “enrolled” refers to being recognised as eligible to practice by the U.S. Department of the Treasury, indicating that they have the necessary credentials and are qualified to defend people in tax court cases, IRS appeals, or in-person interactions with the IRS. Enrolled Agents are subjected to a high degree of ethics.
Demand for qualified accounting professionals on the rise
Employers are prioritizing a diverse range of tasks, from frontline occupations increasingly acknowledged as critical to operational duties that might help organizations get back on track. The US CPA degree is also the one with the fastest expanding demand globally. In order to advance their careers in accounting, professionals aim to upskill and apply for programmes that will enable them to obtain the necessary credentials to work in the United States or for American multinational corporations (MNC). Particularly in these uncertain times, they have advanced their professional development and have stayed a step ahead of the competition.
Organizations in today’s globally interconnected world need experts with specific knowledge of business strategy and value development, like CMAs. Given that the CMA is the cornerstone upon which businesses are constructed, specialized education and training programs have transformed them into a multifaceted expert. CMAs are hence the driving force behind all economic activity because they create, facilitate, preserve, and disclose value. They are highly sought for in the public and private sectors, banking and finance, development organizations, education, training, and research, as well as the service and public utility industries. Additionally, because of their specific training and knowledge, CMAs are qualified and are in great demand to take cushy senior management positions in businesses in both the public and private sectors.
A professional accounting license, such as the US CPA, CMA or EA, indicates the knowledge necessary to make wise decisions and suggestions, as well as the accounting abilities necessary in the modern company environment. The license enables professionals to concentrate on counseling customers and provide strategic insights on important financial transactions while being consistent and adjusting to company requirements by expanding their understanding of new business, finance, payment, and service models.
There are numerous institutes cropping across developing nations, offering training and study programs for the above qualifications. This has facilitated a rapid growth in interest shown for such accounting qualifications. The US Bureau of Labor Statistics projects that employment of accountants and auditors will increase by 4% between 2019 and 2029, which is about in line with the predicted average for all occupations. U.S. Accounting is ranked No. 13 on News & World Report’s list of the Best Business Jobs for 2021, with factors such as competitive compensation and high job security being mentioned. Future accounting roles will be wanting for committed individuals who are willing to develop with the sector and obtaining such higher degrees are certain to take such a serious professional a long way.
The demand and versatility of CPA, EA and CMA designations is a boon for accounting firm owners who are utilizing accounting offshoring services. Due to the rise of these global designation firm owners now have a larger and more qualified resource pool to choose from.
This also benefits accounting offshoring providers as they now have access to a greater number of qualified professionals.
It’s difficult to predict how the accounting and tax profession will cope with the skilled labor shortage however, it’s good to know that certain designations will now be in greater supply.
Shawn Parikh is CEO of Entigrity Solutions, LLC.