Television treats the general public to a wide array of medical specialties on a weekly basis. While most Americans might never see a neurologist, they probably know what one is, thanks to TV. This broad knowledge of the medical profession likely plays a role in the number of young people who choose this career path. Rare is the student who begins medical school without some idea of the specialty he or she plans to pursue because he or she has already been exposed to depictions of a wide variety of medical specialties.
The accounting world could take a page from medicine in conveying the importance of its profession. Most CPAs,particularly those practicing public accounting, are acutely aware of the challenges of attracting, developing, and retaining professionals for this field. In looking for ways to improve the situation, perhaps a better explanation of the profession’s role in the business community would help. Drawing a parallel to the medical profession might provide a way to better communicate the public accounting professional’s essential role in business.
Accounting is like medicine in many ways: Both professions diagnose,monitor, and treat problems; in both professions, generalists refer work to specialists; and in both professions, defined specialties require unique knowledge and expertise.
Monitoring Financial Health
In its simplest form, accounting may be viewed as the study of the financial health of a business enterprise. An assessment of that health starts with the preparation of a basic financial statement, much like an assessment of health begins with an annual physical examination. Like the medical profession, where an internist’s job is to regularly assess the patient’s general physical health, accounting assesses the general fiscal health of businesses.
Regardless of its size, every business has a periodic financial report—a checkup—that generally takes the form of a financial statement. This report’s frequency and form can vary from monthlyfinancial statements prepared by a company’s internal accounting department to an annual financial statement with outside participation from a CPA in public practice. Whether that CPA provides an audit, a review, a compiled report, or nothing at all, the annual financial statement must still be generated, even if only for tax reporting purposes. During this process, the CPA often recognizes the need for a specialist to assist the business and improve the company’s overall financial condition.
A CPA working within a firm may have the expertise to address a need (e.g., tax, information technology, internal controls review) and therefore be able to handle the issue. However, the identified need may require outside expertise. Then, just as the internist refers specific health issues to a cardiologist, an orthopedist, or other specialists, the CPA refers financial issues to other business or accounting specialists as a “diagnosis” is made and a need is identified.
Like medicine, accounting has its areas of specialization. Taxation is the most frequently identified specialty area within the accounting profession. Most people outside the profession think of tax practice as nothing more than the annual preparation and filing of an income tax return. However, the area of taxation comprises many subspecialties, including (but not limited to) individual income, corporate income, partnership, estate and gift, and fiduciary income taxation. Beyond each of these subspecialty areas, there is an extensive list of further potential subspecialties. These additional areas may be used to determine particular income or deduction issues (e.g., transfer pricing) or to satisfy a business industry’s unique need (e.g., the oil and gas business).
The area of taxation is critically important to the financial health of a business and often has a ripple effect on the business’s owners. Skillful planning, reporting, and payment of income tax are essential to the overall success and financial health of an enterprise. Since the accounting methods used for federal and state income tax reporting are frequently different from those used for financial reporting, in most cases this work would be referred to a specialist, much like an internist who sends a patient to an allergist or a neurologist.
What Can Accountants Learn from Doctors?
The accounting profession often fails to effectively convey the responsibility it routinely undertakes in the business community, the different roles needed to carry out that responsibility, and how those roles interact. Although the profession understands its valuable role, it would be able to attract, develop, and retain more new professionals if it could find ways to better communicate this message. Accountants need to convey to the public that they are skilled professionals who help clients with their financial health, just as doctors help patients with their physical health. Perhaps it is time for a TV series featuring CPAs who are passionate about their work and about helping people. Accountants need to represent themselves as uniquely qualified to solve clients’ problems. Most people would never go to a non-doctor for medical problems; they need to understand that they should not go to a non-CPA for financial problems. An accounting profession that thinks of itself as the doctors of the business world—and that promotes this view to the public and in the media—will be a profession that attracts young people.
Mr. Holub is a former chair of the AICPA Tax Division’s Tax Practice Management Committee.
Mr. Porter is the chair of the AICPA Tax Division’s Tax Practice Improvement Committee; Mr. Kaufman is a member of that committee. For more information about this column, contact Mr. Kaufman at firstname.lastname@example.org.