Accounting
Recent Changes in the CPA Profession and the Regulatory EnvironmentThe accounting profession has had more than its share of ups and downs in the last two decades. The business environment in this period, led by major technological innovations, has changed drastically and become infinitely complex--making the job of accountants far more varied. Whereas once Certified Public Accountants (CPAs) worked almost exclusively in accounting, auditing or tax preparation, now CPA firms have to handle fields such as financial planning, tax planning, business development, financial management, information systems, risk management, forensic and fraud auditing, among others. In addition, the highly publicized business scandals such as the Enron and the WorldCom bankruptcies in 2001, the resulting public focus on the accounting profession, and the enactment of important accounting legislation such as the Sarbanes-Oxley Act of 2002 have forced the CPAs to respond to the changes. This paper takes a look at some of the recent changes in the CPA profession and the current regulatory environment.Downturn in the Accounting Profession The 1990s saw a significant fall in the attractiveness of the accounting profession among students. This is reflect
For example, previously only large publicly traded companies were required to comply with strict auditing and accounting standards. (Telberg) There are a number of reasons for this unexpected upturn, some of which are discussed below. The business community, in fact, now expects the CPAs to act as "ethical beacons for the business world" besides performing their core function of accurate and honest accounting. The importance of ethics in accounting education, CPA examination and the licensing process is now widely recognized. 21) One of the reasons for this decline was that the educational model for accounting professionals had not been able to cope effectively with the rapidly changing business environment. -based Gallup poll conducted in December 2003 indicated that "the public image of the accounting profession has jumped more than any other during the year [2003]" (Quoted by Telberg)Focus on Ethical IssueThe business scandals and their aftermath have focused the attention of politicians, corporate managers, as well as CPAs and their organizations about the promotion of an ethical business environment. ed in a 25% drop in award of accounting degrees in just 4 years from 1996 to 2001 in the United States. Realizing the need for remedying the crisis in the accounting profession, the AICPA (in 1988) made a bachelor's degree and 150 hours of higher education mandatory for AICPA membership. The unprecedented bull run of the American economy in the 1990s also contributed in taking the sheen off the accountancy profession as the "stars of the show" such as Information Technology and Management related professions attracted the brightest and the ambitious. Stricter auditing and accounting rules in the Act have created greater employment opportunities for CPAs and accounting firms. Sarbanes-Oxley Act & its Effect on CPAs The badly shaken investor confidence in the wake of the Enron scandal forced the legislatures to reexamine the regulatory environment for businesses and the accounting profession. ConclusionAfter a prolonged slump in the 1980s and 90s, the accounting profession is poised for a strong comeback in the changed regulatory environment that followed the disastrous business scandals in 2001. Even so, the value of accounting as an academic discipline and its need in the marketplace has remained debatable with many recruiting firms preferring MBAs and professionals with more general degrees for positions previously reserved for professional accountants. The result was the enactment into law of the Sarbanes-Oxley Act in July, 2002-the most significant accounting legislation since 1933.
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Acceptance Essays
