CPA firms say their biggest challenges are technology and talent

CPA firms say managing changes sparked by technology and AI will be their biggest challenge in the coming years, according to a recent AICPA survey conducted between late April and late May, with responses from nearly 630 participants.

Accounting firms across the board—from solo practitioners to those with 500-plus employees—identified “change management due to technology and AI” as their top issue over the next five years, according to the latest installment of the association’s biennial CPA Firm Top Issues Survey. Technology change management was also a top three current issue across the six groupings of CPA firms, based on number of employees.

“The top issues for firms tie into the transformation we’re seeing in technology, people skills and operating models,” Lisa Simpson, AICPA’s VP of firm services, said in a statement.

Firms in the two largest categories—101–500 employees and 500-plus employees—identified technology adoption and integration as one of their top current issues. Both groups said shifting job skills was their second-biggest challenge over the next five years.

Talent issues weighed heavily on smaller and midsize firms. Accounting firms with 31–100 employees identified finding the next generation of leadership as their top current issue. Firms with 11–30 employees said hiring experienced staff was their biggest immediate challenge. Over the next five years, firms in both categories identified staff retention and recruitment as their second- and third-largest issues.

Among the smallest firms (two to 10 professionals) and solo practitioners, tax law complexity was the biggest immediate issue. Regulatory changes ranked as the No. 2 issue for both groups over the next five years.

Relationship driven. Even with big technological advancements, “people and relationships are going to continue to be even more important to the profession,” Erin Hartman, AICPA senior manager of firm services, told CFO Brew.

Hartman said that AI and automation enable accounting professionals to spend less time on repetitive tasks and more time advising clients. AICPA recently launched a “profession ready initiative” to help early career professionals develop those skills.

“People need to be able to use AI and technology that’s modern,” Hartman said, “but I think the concern for firms is more about how to upskill those employees in an AI world, and how they can be better advisors.”