“The leap we need to take today is bigger than ever before and we need to adapt now”

Barry C. Melancon, outgoing CEO of AICPA & CIMA, talks to Accountancy Ireland about the need for the profession to learn and adapt at a time of rapid change and unprecedented opportunity

Accounting is undergoing change as never before, driven by the evolving needs of global business, regulatory regimes and – above all – the rapid emergence of new technologies that promise to transform the profession in the years ahead.

Amidst all this change, a willingness to learn and adapt will be critical for accountants in all sectors.

“Now is a time for reflection, particularly for those in our profession at the mid-career stage,” says Barry C. Melancon, CPA, CGMA. 

Melancon is the outgoing CEO of the Association of International Certified Professional Accountants, the professional body formed by the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA).

“Younger people are coming in as digital natives and the pace of change in the world today, certainly with regard to technology, requires us to be fully committed to adapting our competencies to keep pace,” says Melancon.

“It is not the first time change has been required in our profession – for us, change is a constant – but the leap we need to take today is bigger than ever before, and we will need to adapt faster than ever before.”

Committing to change as a constant

In his role as President and CEO of the AICPA, Melancon was instrumental in overseeing its alliance with the Chartered Institute of Management Accountants to form the Association of International Certified Professional Accountants (AICPA & CIMA).

Established in 2017, the association now has close to 600,000 members, candidates and registrants in 188 countries and territories worldwide.

As he prepares to hand over the reins to incoming AICPA & CIMA CEO Mark Koziel, Melancon reflects on his achievements over three decades as AICPA’s longest serving CEO.

“Serving the profession over the last 30 years has been a great honour and I have been fortunate to have played a part in its transformation,” he says.

“The reality is that the role has been a change management process from the very start. The question at the outset was, ‘how do we create the organisation of the future?’

“My goal was to make the AICPA an organisation that would create a more permissive environment in which the profession could broaden its reach and become more successful – and I do sincerely think we have succeeded in opening people’s eyes to what the profession can be.

“At the same time, today – as much as at any other time in the last 30 years – the importance of trust in our profession is paramount.

“Trust is our trademark and, no matter how much or how quickly the world around us changes, we must continue to be committed to the trust and objectivity that sets our profession apart, and the value we create for those we work with.”

Broad business lens

Melancon grew up on the Gulf Coast of southern Louisiana and graduated from Nicholls State University in 1978, majoring in accounting with a minor in government policy. 

“I went to university thinking I would be a lawyer and, during my first semester, realised I had a greater interest in business. I took an accounting course and discovered that, if I wanted to have a strong business perspective, accounting would be the best path to take,” he explains.

“My perception was that accounting could give me the broadest ‘intellect’ as it relates to business. All the disciplines of business are encompassed in accounting in some form – management, economics, finance – the whole gamut. 

“I think this still holds true today. This profession gives us the best and widest lens of all business disciplines.”

Melancon began his accounting career in 1979 with a CPA firm in Louisiana before being appointed CEO of the Society of Louisiana Certified Public Accountants in 1987 and, subsequently, as CEO of the AICPA in 1995.

“Like many people in our profession, I started out doing accounting, auditing and tax work,” he says.

“I had a goal to become a partner in a CPA firm by the age of 25 and, as I’d started school at a very young age and skipped years along the way academically, I succeeded in reaching that goal.”

Crucial role as trusted advisors

At this early stage in his accounting career, Melancon worked exclusively with small and medium-sized enterprises (SMEs) and not-for-profit organisations.

This experience, he says, formed his “early accounting perspective” and instilled an abiding respect for the value of SMEs in economies worldwide and the critical role accountants play in supporting and elevating entrepreneurial endeavour for the benefit of all.

“This has been really key for me as as President and CEO of AICPA – creating an environment in which our profession can flourish has been about that wider business lens,” Melancon says.

“There are thousands of SMEs around the world. SMEs are the lifeblood of most economies, both established and emerging. Entrepreneurs see opportunities and build businesses, and the expertise of the accounting profession helps them succeed and grow.

“Society benefits, but we know SMEs also have high failure rates. They can have a much higher success rate if they walk hand in hand with a professional who really understands all aspects of their business and can act as the purveyor of truth and effective information.”

As Melancon sees it, accountants have a crucial role to play as trusted advisors whose strategic and principled guidance is critical in business the world over.

“Often, you will find that an accountant working with a business owner knows more about them than anyone else,” he says. 

“If the business owner has a health issue or personal challenge, they will ask their accountant, ‘What does this mean for my business? What should I do?’ If they have concerns about competitors, cashflow or business acquisitions, the accountant is the first person they will consult. 

“The business owner will understand their business model, the products or services they are selling and the market they are selling to, but their accountant will be the expert in pretty much every other aspect of how to run the business to make it successful.”

Elevated role of the profession

Beyond the SME environment, accountants in practice and the corporate world are assuming an increasingly prominent role in the boardroom.

“Our role right across the board is becoming more strategic. It comes back to that ‘wide lens’ we offer and the higher-level skills we apply to deciphering the complexity of the world we operate in,” Melancon says.

“In the corporate environment, leadership is looking to the finance function for more answers, particularly in areas such as environmental, social and governance (ESG) where decision-making is increasingly data driven.

“If we look at the audit function, particularly in relation to larger capital market companies, we have moved from purely auditing financial statements to providing third party assurance across a whole range of areas, from ESG to cybersecurity, and this will only continue to expand.

“With artificial intelligence (AI) – right now, people are really not sure if they can or should trust it. This will change and it will change rapidly – and we, as a profession, will be key to providing the assurance, objectivity and trust that is needed. 

“Our tagline at AICPA & CIMA is, ‘We empower trust, opportunity and prosperity.’ That’s not just about the profession; it’s about society at large.”

Emerging business models

In tandem with the evolving role of the accountant, the traditional structure of accountancy firms is also changing.

“AI, in particular, will fundamentally change the ‘shape’ of accountancy firms and the traditional leverage model,” Melancon says.

“With the leverage model, the largest number of employees in accountancy firms have traditionally been at the entry-level – the base of the organisation – where a significant amount of the firm’s transactional activity has taken place.

“As people starting out at entry-level progress their careers, they move up to the middle of the organisation, where there is a greater need for cognitive skills and business acumen.

“Then, at the top of the pyramid, on the corporate side, you have the C-suite executives and in the firms, you have the partners and owners. 

“This leverage model has served our profession well over the years, but, today, the need for all that work at the ‘base’ or entry level is rapidly falling away, in part due to technology like AI and automation.

“Instead of pyramid-shaped firms, we will be predominantly ‘fat-middle’ organisations, so we will need to get more people into that middle more quickly with the business acumen and skills they need to build strong relationships with clients.”

Robert Stokes award

On a recent trip to Dublin to attend the Global Accounting Alliance Board Meeting in late October, Melancon received the Chartered Accountants Ireland Founders Award.

The Robert Stokes Medal was presented to Melancon by Barry Doyle, President of Chartered Accountants Ireland, at a special event, in recognition of his outstanding contribution to the accounting profession. 

The award represents the characteristics of Robert Stokes, the founder of Chartered Accountants Ireland, a pioneer and a courageous independent thinker, committed to fairness and “levelling the playing field”.

Looking ahead to the future of accounting and younger generations entering the profession, Melancon reflected on the need for passion, ambition, commitment and confidence.

“Accounting is a profession; it is not just a job. I think this mindset is really important. I don’t think people in any generation can expect to have truly long-term career success unless they understand the need for this professional commitment. Passion is important.”

“When I became CEO of the AICPA at 37, a very wise person who headed up one of the largest professional services firms in the world at the time, said to me, ‘Barry, I don’t know you, but I know people put you in this position and my only advice to you is to be yourself.’

“I think the younger generation coming into accounting do bring themselves to the profession. They bring something new and valuable in terms of what they have learned and how they have learned it.

“They are more tech-savvy and probably more worldly. They have access to much broader information sets. My message to these younger accountants is to value all of this and to ‘be yourself.’ 

“You also need to have clear goals and the confidence to speak to others around you about your goals and how to reach them. Seek people’s help and advice, and act on it. 
“When I started out in my first role with that small firm in Louisiana, the Partners knew I wanted to be a Partner myself by 25. 

“I wasn’t shy about it, and they supported me. They told me, ‘This is what you need to do to get there,’ and I was able to achieve my goal. 

“It is important to have the confidence to talk to the people above you in a constructive, honest and positive way about what you want to be – to be yourself, in other words. 

“Our profession requires that kind of commitment and, with their skills in technology, younger accountants today can play a very important role in preparing our profession for tomorrow.”

*Interview by Elaine O’Regan