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Why Accountants Are NOT Becoming Irrelevant

by Mary Stucke

There was a recent  discussion on LinkedIn in which Ron Baker, founder of VeraSage Institute, stated that he believes that the accounting profession is becoming irrelevant. As an accountant, this statement and his theory intrigued me. It appears that most of Mr. Baker’s opinion revolves around the fact that accountants only deal with historical data and are not forward thinking.  He also has concerns about how we are regulated, our independence, and the monopoly within the large accounting  firms.  To these items I would like to offer the following comments:

First, yes, accountants are often dealing with historical data. It is the nature of the beast, but I do believe that Winston Churchill once said, “those who fail to learn from history are doomed to repeat it”. I would suggest that there are many lessons to be learned from historical data (good and bad) and that a professional accountant assists his clients in taking this historical data and using it to positively influence the financial results in the future.

Secondly, our profession (yes, Mr. Baker, I did call us a profession), is regulated by individuals within our profession and also by outside advisors that help to bring a more well-rounded view of the public’s expectation of ethics and work product. All firms must comply with independent detailed reviews on a rotational basis of the work they produce. The results of these reviews are on file for any current or prospective client to review. Further on this point, the accounting profession’s requirement for continuing education is extensive and taken very seriously: as is the idea of independence. Our profession has an extensive definition of independence. I understand the argument about independence “going out the window” if you are being paid by the people that you are auditing but this is something that happens in many other types of businesses. The exception is that many of the other types of businesses do not have the guidelines for independence and ethics with which accountants must comply.

To conclude, I believe that you apparently, Mr. Baker, have been dealing with the wrong kind of accountants. As an accountant, I pride myself, as do the others of my firm, in being an advisor and advocate for my clients. With the definition of advisor being, “one that advices and provides professional advice to clients”, and advocate being, “one who is a supporter of another” , I would like to state that I certainly hope that these are not things that are becoming irrelevant in the professional world of today.

* Thank you to Ada Perkins, Assurance Senior for her contributions to this post.

This entry was posted in Audit & Tax Talk and tagged Accounting. Bookmark the permalink.

2 thoughts on “Why Accountants Are NOT Becoming Irrelevant

  1. Ron Baker

    Hi Mary,

    Thank you for your comments on my LinkedIn interview.

    I don't find your arguments compelling at all. You say that accounting has an extensive definition of independence, and that other types of businesses have the same issues. But no other business has a government-granted monopoly that rests on the notion that the profession remain independent. It's this monopoly, and the regulations that go with it, that is the problem with auditing.

    As for accounting looking at the past being the nature of the beast, no doubt true. But that's the point. If that's all we do, we will become increasingly irrelevant. The past does not equal the future in a creative economy, and companies who operate under that theory are going the way of the buggy whip–the music industry, newspapers, etc.

    As for our CPE, give me a break. As one who has been teaching CPE since 1995 to CPAs, most of it is glorified training that accomplishes no more than updating CPAs on changes in tax and auditing. Most CPAs do the bare minimum of CPE, and since we only measure hours that butts sat in chairs–rather than what people actually learned–I doubt much "education" happens in most CPE.

    I've dealt with all types of accountants, from all over the world, so I don't know which "wrong" ones you speak of. None of that changes the fact that accounting is being regulated into irrelevance.

    I'd be more than happy to send you the two chapters that I wrote in my book, Mind Over Matter, that detail my thoughts on this issue in greater detail. Then perhaps you'd have a better understanding of where I'm coming from. I used to defend the profession as passionately as you do. I changed my mind, based on empirical evidence.

    Regards,
    Ron Baker, Founder
    VeraSage Institute

    Reply
    1. mstucke Post author

      Thanks, Ron for your comments. I would be interested in reading the two chapters from your book, thanks for offering.

      Certainly true that if an accounting firm only focuses on compliance and history, it would be easy to become irrelevant. However, from our perspective, GBQ has a focus on being a trusted business adviser to our clients and helping clients to understand leading indicators and become forward thinking while remaining independent, and understanding the regulations of the profession.

      Regards,
      Mary Stucke & Ada Perkins

      Reply

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