What’s the Future of the CPA Brand?

By | 1 year ago

Brand is one of those business concepts that everyone knows about but few understand. When people talk about the Apple BRAND everyone murmurs approvement and nods as if to say, "That's a strong brand!" but they'd have a hard time explaining why. For example, I don't know if most people think about how great brands are really fucking weird. Like Apple's stupid grammar. Or how everything at a Disney resort is "magical." A turkey club isn't magical anywhere, okay, Disney World? It's just a crappy lunch that keeps me from fainting in the Florida humidity.

But both of those things are perfect examples of how those companies elicit a strong brand. There are other examples, of course. I chose these because this AICPA post mentioned those two companies as a segue into its own discussion about its brand:

When most people think about a strong brand, Disney or Apple come to mind.  But when we at the AICPA think of a strong brand, we think of the CPA.  And we are pleased again to report that independent research confirms that CPA stands stronger than ever.

It's weird to think of a professional credential as a brand because it's usually associated with an individual person. When someone sees "Janet Smith" they don't think twice about it. But if they see "Janet Smith, CPA" they think, "Oh, Janet's a CPA. She can probably tell us how to set up a shell company in Delaware." They don't think about the collective CPAs, who together make up the CPA brand in that particular moment; but most people recognize that the CPA means something, even if it is, "Oh, that person prepares tax returns." 

I don't get the sense that other professional credentials — CMA, CFA, CVA, CIA, CISA, etc. — push brand like the AICPA does, so in that respect, yes, the CPA does have a strong brand through its intent to have one. And the research (commissioned by the AICPA) backs it up:

  • Both business decision-makers and investors rank the CPA first among financial and business professionals, and second only to physicians among all professionals. Investor rankings increased by 12 percent over the 2013 study results.
  • Business decision-makers’ satisfaction (very satisfied and somewhat satisfied) ranks very high among both internal (93 percent) and external CPAs (90 percent). Investors who work with CPAs are 97 percent satisfied (very satisfied and somewhat satisfied) with their performance.
  • Investors and business decision-makers are more confident in a job done by a CPA – 79 percent and 84 percent respectively – than if it were done by an accountant who is not a CPA. The rating by business decision-makers increased by 9 percent from the 2013 study.
  • Business decision-makers and investors continue to rate integrity and competency as the top two CPA attributes.
  • Sixty-eight percent of business decision-makers agree that becoming certified as a CPA requires more rigorous training and testing than any other financial credential.
  • Eighty-eight percent of business decision-makers value the CPA credential (very/somewhat valuable) within their organizations.
  • CPAs find compensation value in their credential, saying they feel they are paid more than accountants who are not CPAs.

What's interesting, however, is that "clients continue to acknowledge the CPA’s lead in the core areas of tax, accounting and audit, while both clients and CPAs alike acknowledge a growing demand for specializations within the profession and growing competition for those services outside of it."

In other words, CPAs are good at the things they've always been good at. There's less confidence in the brand when it comes to some of this other stuff:

The research points to opportunities for CPAs to broaden their scope and embrace areas of specialization that enhance the core services typically offered by CPAs. These include such areas as strategic planning, performance management, risk management, sustainability assurance and business integration systems – areas that could benefit from the added knowledge and expertise a CPA can bring to those services.

While professionals from outside the profession – management consultants, information technology consultants, lawyers and other professionals – are usually associated with these specialized services, CPAs, the research shows, can step in to provide them.

The problem is, a CPA credential won't be required to to perform these consulting services (let's just call them that). Clients will want the work done by capable people, CPA or not. This seems evident in the growing gap in accounting grads and those sitting for the CPA exam. The fact that accounting firms are hiring more people who have no plans to take the CPA exam suggest that the credential is less important, too.

Large firms are already doing this. They're not accounting firms anymore. They're "professional services firms" and they hire lots of non-CPAs. Audit and tax are just a couple things they do and advisory and consulting will continue soon be the biggest revenue driver in those firms. Some second-tier firms seem to be embracing this idea, others less so. It's not difficult to imagine a future where the firms who focus on "professional services" rather than the "CPA core" start acquiring the firms that don't shift towards consulting. Those firms will still want the CPA-focused audit and tax services, but they will be second banana to consulting and advisory.

Can the CPA brand survive that transition? Does the CPA brand thrive in that environment? Will it enjoy the same cachet? Who knows! But it seems obvious that the AICPA sees a threat here. Why else would they suggest firms adopt a "CPA culture"? And that would explain why words like "relevant" and "preserve" are getting thrown around in their pushing of the tie-up with CIMA. No one wants to admit that we've reached PEAK CPA.

Over to you, now. How would you guys rate the CPA brand on a scale of 1-10? Is it fading or growing stronger? Is this the real motivation behind the CIMA merger? Explain yourselves.