AI threatens entry-level accounting jobs, demands 'super accountant' rethink

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript. Richard Lynch: [00:00:00] I think that the reality is real. Change is coming. Those who adopt have the opportunity for real progression in the profession. But as we talked about, those who don't have a real opportunity for extinction, and I think the question isn't whether those two events will occur. I think there's the will be progression and there will be extinction. The question is at what pace. And and that, I think, is what everybody is trying to figure out. Blake Oliver: [00:00:27] Are you an accountant with a continuing education requirement? You can earn free Nasba approved CPE for listening to this episode, just visit earmarked.app in your web browser, take a short quiz and get your certificate. Hello everyone, and welcome back to the Earmark Podcast. I'm Blake Oliver. If you've spent any time in an accounting firm, you know the deal. You start at the bottom, the reconciliations, the data entry, the prep work, and eventually over years, you build up enough experience to move up The theory is that the repetition teaches you the craft. The reality is that for a lot of people, it burns them out before they ever get there. My guest today thinks AI is about to change that entirely. He calls it the era of the Super Accountant, a new kind of professional who uses AI not just as a productivity tool, but as a way to accelerate the journey to the high value strategic client facing work that makes this career worth having. Richard Lynch is a managing principal at Sikich, one of the largest CPA firms in the United States. He's been in public accounting for over 25 years, and he's written extensively about why the profession's current crisis, the talent shortage, the burnout, the attrition is actually a structural opportunity in disguise. Richard, welcome to the show. Richard Lynch: [00:01:46] Thanks, Blake. Great to be here. Blake Oliver: [00:01:48] So you've written about this idea of the super accountant. I love this term. For our listeners who are new to this, how would you describe it and why does it matter? Richard Lynch: [00:01:59] You know, I think it's. Richard Lynch: [00:02:00] Um, it's, it's where work is enhanced by AI and not replaced by our industry. And you alluded to it. Blake. Our industry has long valued this concept of the hours, the routine, the grind that you have to go through to provide, um, maybe the background as well as the backbone to be someone of good judgment and sound consultative skills. I think technology is changing the way we look at and that's not just AI, that's certainly AI, but all technology is changing how work gets done. The super accountant possesses, um, AI fluency, strong analytic judgment, a filter for accuracy, an understanding of compliance, but not a need to do it. Uh, they spend more time advising, less time gathering and manipulating data. They're not a tech person, um, doing accounting work. They are a technical person, maybe a CPA that specifically knows how to leverage technology. Why this is important, you know, and we'll talk more about the pyramid structure and the change and what that looks like, but that model is breaking up. There are just less entry level accountants coming into the pipeline. And we have to recognize that AI is collapsing that first rung of the pyramid. It's not disappearing, but it is pushing that first rung up to where their capabilities and skills are increasing. Um, so the super accountant becomes that center of the diamond, if you will, that in both capability as well as structural integrity. So I think our future CPAs will reach a higher level of intellect, capability and advisory skills at a much earlier age without decreasing the standards. They will learn to interpret data quicker, and they will get to analyzing the information without the grind of creating the inputs. Blake Oliver: [00:03:51] You mentioned the pyramid, so we've got in a traditional firm. Lots of the entry level staff, accountants doing routine work, reconciliations, putting together work papers, rolling forward whatever was done last year, collecting documents, organizing them, checking boxes. But like, how does this change that? I mean, I'm using AI right now and I'm automating stuff that a staff accountant would have been doing, like is doing now. And I'm successfully automating it. Like just doing a bank rec, for instance, I've got Claude Cowork doing bank recs now for my company. So how, how do you get to these super accountants if there's no work for the staff to do? Like what do they do? Richard Lynch: [00:04:42] So that's a, that's a great concept to think about. So I think it's, it's first, you have to explore that while you take this idea of the pyramid shifting to a diamond. And that is very structural in nature, thinking of a shift from one shape to another. Um, but the true implication is capability. The true, the true movement is the capability of what those rungs look like. So we're, we're moving that bottom layer up, but we're not just moving it in terms of capacity. We're moving it in terms of capability. So a historical model, um, the pyramid would suggest that a greater percentage of your workforce has the least amount of experience. And the diamond, a greater percentage of your workforce has a higher level of capability. So it's shifting that capability, level up, eliminating the need to do those reconciliations or those routine tasks. So it's certainly something that we have to consider from that standpoint. Um, I think we also have to understand that the, the industry in of itself will force the diamond to take place. The adoption of technology by many firms will, will push those capabilities up and will eliminate that first level. Richard Lynch: [00:05:49] Um, that comes with a heavy burden of training of, of really investing in what that training platform looks like, making sure there's tight controls about how AI influences the workforce, and having an understanding of the inputs and outputs, and also balance the needs of, of the work life balance that we continue to, to have a struggle with in the profession. I also believe there'll be a pushback from our traditional educational platforms where people coming out of, of the new graduation and, and they'll have a better foundation for the changes going on in the platform. They'll, they'll spend more time in tech education. They'll spend more time in learning how to manage agents more, more time in analyzing the information. So I think this is a complete shift in how, um, how we train, how we educate and what that looks like to where we start to understand that we need to understand, we need to comprehend what AI is doing, but we don't need to understand or do it from a physical standpoint. Blake Oliver: [00:06:49] So you you're saying that this pyramid structure that we've had in accounting firms for a long time, this upper out model where we start with a lot of people at the entry level, and then each promotion level, like people leave, some stay. So we start out with a bunch of staff accountants. We have fewer seniors, we have fewer managers, we have fewer directors. And we have, you know, 1% of the people who start become partners overall. And that's the that's the traditional pyramid structure. And you're saying it's going to become a diamond. I've heard this from, you know, Barry Melanson at the AICPA. I went to a conference. He put this up on the on the screen and like, I just don't understand how it actually works because if you have fewer people at the bottom, how do you end up with more people? Midway through the funnel? Richard Lynch: [00:07:40] Sure, sure. So, um, if you can envision the profession, uh, 25, 30 years ago, and let's, let's break it down and think of the concept of, of an intern. Um, you know, 30, 40 years ago, you'd have an intern, that intern largely would go and, uh, get, get coffee. Um, they would make copies. They would be an errand boy. Um, that has evolved over time to where, um, coffee is at every corner. We don't really make copies anymore. Everything's electronic. So how do we use interns in today's profession? Well, those interns are actually providing technical work. They're actually doing client work. So the capability of the intern has moved up. Um, and so what that means is intern programs have started earlier and they've gotten more grassroots education. So they're more prepared for the workforce. They've gotten more exposure. Um, the same thing will happen here. Um, the understanding of what it means to be a first year accountant will shift and change. I think they'll be part of that, uh, weight will be carried by our traditional educational system. And I think part of that weight will be carried by firms having to develop more concentrated and intensive training programs. There's been the thought process of of kind of the first 6 to 8 months of someone's career being intensively educational as opposed to them doing any client work. They're, they're learning the craft for eight months of intensive, not even really touching a billable project as opposed to just learning how to get to that next layer. Um, to say that we have all the answers would, would be certainly untrue. Richard Lynch: [00:09:13] Um, but to understand that, um, I think the, the capabilities of the people, the capabilities of, of the graduates is certainly, um, well within their, the confines of understanding for them to move up that chain at a much faster pace. I see, um, intensive training courses, I see, um, evolution in the educational platform and I see kind of the perspectives of what the profession looks like shifting and changing. And I do actually think that's a really exciting endeavor because like you said, we lose a lot of people in those first couple years and we lose them because a lot of what they're doing, I don't hear I do hear complaints about the hours, but it's usuall