They say “past results are no indication of future performance.” Maybe. Maybe not. A panel of experts recently considered this questions and the results of a recent Management of an Accounting Practice Survey. These are their views, looking back at the last 12 months and looking ahead to 2016.
Lessons from 2015:
Over the past year, I’ve noticed smaller firms engaged in acquiring firms yet smaller than them. They’ve observed larger firms mastering merger integration, and are now taking the plunge.
Whether expected results come to fruition is yet to be seen. Regardless of firm size, once merger discussions start, organic growth and other initiatives quickly get put on the back burner. Many firms believe merged growth is easier than organic. They quickly find this is not the case. Either is hard work, and the integration of merged firms almost always takes longer than expected.
Many dynamics are taking place in international associations, networks and alliances. This includes an increased focus on building out the U.S. and worldwide footprints, as well as changes in strategy. Firm mergers usually cause post-merged firms to abandon one of their two affiliations. This impacts association/network strategies as some of their anchor firms go away, and heretofore exclusive geographies become available.
Associations/networks are upping their focus on quality, as they hear member feedback and monitor worldwide regulatory scrutiny.
Forecast for 2016:
Some associations/networks still operate as gentlemanly country clubs. Others continue to be fiercely competitive, solidifying key firms and geographies around the world. These shifting dynamics will continue. It’s truly amazing to watch!
It’s a great time to be the head of the audit/attest department. Since post-Sarbanes-Oxley, this sleepy mature service line has gone through little change. Outside of those involved in AICPA leadership, most firm leaders haven’t seen the signs of a service ready to go through tremendous transformation, which is good news for firm growth. The classic definition of attest has changed from strictly financial statement attest to something broader. This includes a whole host of potential attestation services that auditors can and will provide. Even our financial statement offerings in the non-public company space are shifting to include options, instead of one-size-fits-all GAAP-based audited statements.
Finally, technology, which has rocked the client accounting services world of late, is poised to reshape how we audit. From continuous auditing to data analytics and other technologies, audit will look very different in the future. For firms who are growth-savvy and technology-savvy, there is great promise in differentiation, efficiency and higher profitability, as this mature service is innovated, transformed and rejuvenated. Our auditors have much to learn from their client accounting services (CAS) brethren, who in many firms are looked upon as an inferior service. It would be wise for auditors to peek over the fence and see what all the technology hullaballoo in CAS is about!
Product management is finally moving front and center. In our profession, this is the final frontier in the three-legged stool of growth (sales, marketing, product management), and the one that drives innovation. In almost 15 years of helping firms grow, I’ve only encountered two people with product management backgrounds (three if I count myself).
The technology industry is jam-packed with these people who ensure that innovation is a core and sustainable competency in their companies. They know that it’s not enough to market and sell. You have to constantly have new shiny stuff to offer. Time to learn from the corporate world on this one!