14.8 Trends in Accounting
- What major trends affect the accounting industry today?
The post-SOX business environment has brought many changes to the accounting profession. When the public accounting industry could no longer regulate itself back in the late 1990s and early 2000s, it became subject to formal regulation for the first time. This regulatory environment set higher standards for audit procedures, which actually helped public companies fine-tune their financial reporting procedures, despite the added costs and labor hours needed to comply with SOX. Once again the core auditing business, rather than financial advisory and management consulting services, became the primary focus of public accounting firms. The relationship between accountants and their clients has also changed, and the role of chief audit executive has taken on more visibility in many large organizations. In addition, the FASB has made slow but steady progress in making changes related to GAAP, including a separate decision-making framework for users and preparers of private company financial statements.8 There are several other important trends that may affect the accounting industry over the next several years, including increased cloud computing services, advances in AI, further automation, and staffing challenges.
Cloud-Based Services
The internet and cloud technology continue to transform many industries, including accounting, and clients expect their accountants to be up to speed on how financial data and other accounting information can be entered, accessed, and discussed in a very short period of time. For the most part, gone are the days when accountants and their support staff spend hours manually inputting data that gets “re-hydrated” into standardized accounting and financial statements, and reams of paper generate a company’s weekly, monthly, or yearly reports.
In 2023, three quarters of cloud-based accounting firms saw increases in profit due to more clients and the rollout of new services through cloud computing, whereas only about 50 percent of traditional accounting firms saw increases in profit. In addition, with an estimated 90 percent of small- and medium-sized companies using cloud-based accounting software, this "trend" has become a permanent fixture in the industry and is quickly becoming the norm.9
Automation and AI
In addition to cloud-based services, automation will continue to play an important role in the accounting industry, particularly in auditing services, where the manual gathering and inputting of information can be an inefficient and sometimes inaccurate process. Being able to automate this process will help generate complete sets of data that will improve the overall details of the auditing process. In addition, accountants who can use a client’s data files from their business operations and import this information into a tax or accounting software package will streamline the overall accounting process and lessen the tedious work of data entry.10
The emergence of AI has had a significant impact on the accounting industry. From the automation of tasks and through machine learning, accountants can use their expertise for more strategic initiatives rather than traditional bookkeeping activities like recording income and expenses. Technologies such as NLP (natural language processing) allow the accountant to interact with the financial software using conversations. This technology can also assist with extracting data from different sources to put in a format suitable for analysis. OCR, or optical character recognition, has been invaluable, allowing scanning of documents such as receipts or invoices and automatically extracting the data into the appropriate accounting lines. These tools can also be used to check for accuracy in reporting by cross referencing different documents for inconsistencies. Through automated invoices and bank reconciliations, companies can reduce the time it takes for payments to arrive from their customers, which improves cash flow. Other key benefits include fraud detection and automated auditing tools.
Many accounting software packages include options such as tax filing, payroll processing, and financial forecasting. Through the use of AI and its sophisticated data analysis capabilities, these functions can be easily automated. The overall financial health of the business can be improved with AI data analytics to evaluate costs, profit margins, and tax implications of various strategic decisions. The industry has seen AI assist the accountant with their responsibilities rather than replace them. The accountant works with the technology to provide the information needed in a more efficient manner, which allows the accountant to shift their focus to strategic tasks and ensure compliance with GAAP. With the global nature of business today, utilizing AI can help the accountant navigate the differences between countries and their financial practices and requirements.11
Staffing Challenges
There is a significant staffing shortage in the accounting industry. Nearly 90 percent of managers in the industry recognize this shortage. In just one year, the open positions in the field increased by 150 percent. It is taking more than 60 days to fill positions. As these and other disruptive technologies change the focus of accounting work, the challenge of hiring the right staff with the skills and knowledge to learn how to adapt to new tools such as those provided through AI technologies intensifies. With accounting processes becoming automated and less time-intensive, some accounting firms are becoming more connected to their clients and increasing their advisory services when it comes to daily business operations. This change in approach will likely have an impact on the type of experienced employees accountants hire in the future. In addition, because most services are now cloud-based and financial data is available rather quickly, businesses are apt to change accounting firms faster than in the past if they are unsatisfied with the services they receive. Accountants have a great opportunity to expand their business portfolios and increase their client list by leveraging technology as part of their overall corporate strategies.12
Managing Change
Attracting Gen Z and Retaining Millennial CPAs
Much has been written about millennials, the population segment born between the early 1980s and the end of the twentieth century. As the older baby boomer generation continues to retire, millennials now make up the largest group in the U.S. labor force. This group will continue to shape the workplace over the next few decades.
Businesses and other organizations cannot ignore this group and their expectations about employment. To be successful, today’s accounting firms—whether Big 4 firms or small and mid-sized businesses—need to understand what makes millennials tick, what is important to them, what makes them look for new opportunities both within and outside the organization—and how to retain them.
Global accounting services company PricewaterhouseCoopers (PwC) partners with several other institutions to conduct a two-year generational study about the attitudes of millennial employees. Key findings suggest that millennials want flexibility in their work lives that leads to an enjoyable work-life balance, appreciation for the work they accomplish, collaborative environments in which to thrive, challenges that will help them grow in their careers, and continued support from employers. As a result of this study, PwC made several changes to its own work environment to attract and retain millennial workers, including flexible schedules, relaxed dress codes, greater communication at all levels of the company, and a renewed commitment to transparency within the organization.
In contrast, Gen Z employees enjoy teamwork less, prioritize diversity, often have additional income sources, thrive with new technology, and have a focus on overall well-being. To attract Gen Z employees, companies can provide clear paths for career development connected to larger company goals, embrace technological advances and give employees space to incorporate technology into their work, help them develop relationships and improve collaboration skills, and provide work arrangements that allow employees to focus on their physical and mental well-being.
PwC is not alone in shifting its organizational culture to address some of the issues millennials say are important factors for them within the work environment. For example, KMPG, another top accounting firm, recognizes that a significant portion of its workforce consists of millennials who have helped shape the company’s approach to work. The themes of flexibility and trust permeate the company’s culture, which reinforces employees’ motivation to be engaged in work that is meaningful, satisfying, and helps them develop as individuals.
Here are some other strategies accounting firms might employ to keep their 30-something employees from jumping ship:
- Initiate onboarding activities quickly: Although training accounting professionals takes time, companies should engage and train new employees quickly to immerse them in organizational culture and assign them work they view as meaningful.
- Assign mentors from the start: Millennials want to know their work makes a difference, so what better way to get them involved right from the start than to make sure they are connected to mentors who can guide their work and career path.
- Support a flexible approach to work: Some millennials are in the prime of their career, and many may also be juggling a family life that requires a lot of their time. Companies need to remember that millennials like being productive, although they may not think a long workday equates to a productive one. The use of cloud-based technology encourages employees to do their work in a productive atmosphere that may not take place in the office.
Recognizing generational traits of millennials not only demonstrates commitment on the part of the company, but also helps keep these employees engaged and involved in their work.
- Do you think a shift in thinking when it comes to managing millennials is a smart strategy? Why or why not?
- Will accounting firms be required to rethink their hiring and retention strategies to address the needs of Gen Z? Explain your reasoning.
Sources: “Workforce of the Future: The Competing Forces Shaping 2030,” https://www.pwc.com, accessed August 11, 2017; Hitendra Patil, “The 7 Experiences Millennials Want from Your Firm,” https://www.cpatrendlines.com, accessed August 11, 2017; “Millennial Accountants Don’t Want a Corner Office with a View,” https://www.rogercpareview.com, April 24, 2017; David Isaacs, “Voices: Confessions of a Millennial CPA: The Most Productive Generation,” https://www.accountingtoday.com, April 20, 2017; Teri Saylor, “How CPA Firms Are Evolving to Meet Millennials’ Desires,” https://www.journalofaccountancy.com, March 6, 2017; "Key Statistics about Millennials in the Workplace," Firstup, https://firstup.io, October 27, 2021; "The Interplay of Generations in the Workforce: A Comprehensive Analysis for 2025," https://kaplan.com, accessed February 11, 2026; Preeta Ghoshal, "How to Attract, Engage and Retain Gen Z Talent," FDM, https://www.fdmgroup.com, October 20, 2025; Tracy Brower, "How To Attract And Retain Gen Z Talent With 8 Proven Strategies," Forbes, https://www.forbes.com, September 21, 2025.
Concept Check
- How has the relationship between public accounting firms and their clients changed since SOX became law?
- Describe how cloud computing and automation are changing the accounting industry.
- What are some of the challenges encountered by accounting firms when introducing new technologies into their workflow process?