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By the Numbers: 125 Years of the CPA Profession

June 22, 2012

Accountants and accounting have been around for as long as there have been things to count. However, the top shelf credential of the accounting business, the CPA profession, turns 125 years old this summer.

What was the profession like in 1887? According to the June issue of the Journal of Accountancy, published by our founding body, the AICPA (American Institute of Certified Public Accountants), there were 22 original members. A firm called Haskins & Sells (the legacy firm that eventually became Deloitte & Touche today) then charged $15 a day for accountants and $50 a day for senior accountants. What a bargain!

In 1887, the world population was 1.6 billion and the US population was just over 62 million. US GDP was just over $13 billion Federal spending was $310 billion.It took 6-8 days to cross the Atlantic by ship, and the major forms of communi-cation were telegraph and what we now call “snail mail”.

How we worked was also different. The standard workweek was 6 days. No equipment was used other than a slide rule for percentages, and reports were handwritten on accounting ruled paper.

Fast forward to 2012. The AICPA membership is approximately 380,000. We use desktops, laptops, tablets, smartphones, cloud computing, and powerful software that makes us more productive each day. The workweek is typically 5 days but flexible schedules have addressed the “work/life balance” needs of our younger professionals.

The world/US population is 7 billion and 313 billion, respectively. US GDP is 15 trillion and Federal spending is almost $4 trillion. It only takes 8 hours now to cross the Atlantic by plane, and we can now communicate instantly by email, instant messaging, texting and social media.

Obviously, it would be an understatement to say that the world has changed in the last 125 years. This humble writer has seen these changes first hand as a participant in the profession for the last 36 years.

However, throughout the evolution of the CPA profession and in published studies exploring the minds of business decision makers, one element remains constant: CPA’s enjoy a widespread level of trust from the public. In other words, we are called upon to fulfill the role of a trusted advisor, we relish that role and we are ideally suited for it. That is not to say that all practitioners embrace it, preferring instead, to be a technician rather than making a personal connection as a client’s trusted advisor. To those of my colleagues who opt for the safety and comfort of numbers, I say they are missing all the fun.

As I look back over my career, I have helped clients:

  • Relationship and dating advice
  • Make a car buying decision after negotiating with a dealer
  • Purchase a personal computer
  • Get over a divorce, a death in the family, or a loved one’s alcohol or drug problem
  • Overcome insecurity in their jobs, or find jobs
  • Choose a college or school for their kids

None of these things appear in the curriculums of any accounting or business school, and there are no manuals to teach us how to do these things. Yet, all the partners in our firm, and any other CPA practitioner that has a meaningful connection with his or her clients has probably been in similar situations. We embrace it for what it is: a deep, meaningful connection on a human level.

This phenomena is precisely what has allowed our CPA practice to buck the trend of specialization that is common in the profession. That is not to say that we do not have specialties in our firm. In fact, we have several. But, as we have evolved, we have listened to what our clients say, and sometimes what they don’t say, about their needs and expectations from us.

What we have heard from our clients is they yearn for simplicity, clarity and focus in their financial affairs. This requires that we be more proactive and less reactive. It also means we are expected to be more involved in the “big picture” of their total finances rather than perform an autopsy once a year and tell them what their taxes died of. One old definition of a CPA is someone who arrives after the battle has ended, bayonets the wounded and counts the bodies.

At SVHS, we have never felt comfortable with that depiction of who we are, and frankly find it offensive. Instead, we embrace the challenge of being your TRUSTED ADVISOR. This means we should lead, guide or stand by your side as you make the most important financial decisions in your life, or alternatively, if you need advice on relationships, cars or computers.

We are here for you. We really mean it.

As we close this installment of our blog, I leave you with some CPA humor: There are just three types of CPAs: those who can count and those who can’t.

PS: Happy Birthday to us. We don’t look too bad for 125.

 

SVHS, LLP

Michael Velazquez, CPA/PFS

Senior Partner

Contact SVHS

The certified public accountants (CPA) and advisors at Sadd Velazquez Higashi Shammaa are ready to assist you with all of your accounting and consulting needs. Contact us today and we will connect you with the professional you need.

Sadd Velazquez Higashi Shammaa, LLP
330 North Brand Blvd., Suite 200
Glendale, CA 91203

Phone: (818) 547-5701
Fax: (818) 547-5708
Email: info@svhscpas.com