What It Takes to Be a Leader in Accounting
Entering the third decade of the 21st century, leaders in the accounting sector are confronted with the inexorable march toward automation and digitization against the backdrop of a call for upskilling, especially in the area of change management.
The International Federation of Accountants (IFAC) cites leadership skills as important for accountants, “particularly as they have become key to helping their organizations navigate an increasingly complex business world.” Adding new complexity to this world has been the COVID-19 pandemic. “Like every profession, accountancy will emerge from COVID-19 changed,” write the authors of the IFAC’s report, Accountancy Skills Evolution: Impact of Covid-19 & the Path Forward. “We will be accustomed to digital processes we once thought impossible,” the report goes on. “Our change management abilities will be sharper than ever.”
Russell Shapiro, who interviewed 12 accounting-firm leaders about COVID’s effects, also cited upsides of the pandemic, noting that managing partners “see reduced space needs, and increased remote work (but not exclusively), and less travel.” Consequently, automation has accelerated in the accounting sector. Shapiro, an accounting attorney, also notes that while the economy continues to suffer, pricing, recruiting and training, business development, and maintaining employee morale will be affected. Half of accountants were predicted to work from home in 2021, writes Emma Pegg for ReceiptBank.
Top leaders in accounting include Chief Accounting Officers (CAO), sometimes known as corporate controllers. Chief Finance Officers also sometimes spring from the accounting ranks. CAOs, notes the University of Alabama, are operations managers overseeing an organization’s accounting and accounting-related practices. CAOs preside over all accounting functions and ensure accurate reporting and bookkeeping that complies with federal regulations. Types of accountants at all levels include staff accountants, Certified Professional Accountants (CPAs), investment accountants, project accountants, management accountants, forensic accountants, and auditors.
As in many fields, women are underrepresented in the top echelons of accounting leadership. The 2019 CPA Firm Gender Survey from the American Institute of Certified Public Accountants (AICPA) reported that women represented 23 percent of partners in CPA firms. Both AICPA’s report and Promotions, Plateaus and Possibilities: New Ways Forward for Women in Accounting from Accounting & Financial Women’s Alliance and its Accounting MOVE Project point to incremental progress in women’s leadership in accounting and offer strategies, such as obtaining mid-career coaching, for women’s advancement. Women in accounting leadership fare better in small businesses than in large firms.
A master’s degree in accounting (MACC) is recommended for those who aspire to accounting leadership. A scan of job postings for top-level accounting roles suggests 7-10 years of managerial accounting experience is desirable. Some C-suite accounting positions require applicants to have served for a few years in the same role they seek at a new firm. The blogging team at QuickBooks offers suggestions for those seeking top accounting leadership positions, such as seeking to serve as the “numbers person” on nonprofit boards, applying for in-house leadership positions with an accounting firm or with a business that has a large accounting department, and garnering endorsements about leadership skills.
As noted above, upskilling is a current battle cry in the accounting sector. “There is a clear need,” write the authors of Accountancy Skills Evolution: Impact of Covid-19 & the Path Forward, “for well-rounded skillsets that combine technical skills and professional skills that are rooted in relationship-building and communication.” The report also suggests building skills in storytelling and scenario planning, as well as in “new techniques for analyzing and interpreting data in differing circumstances, and aptitudes for strategizing on increasing priorities.” Speaking in a short video, Jennifer Wilson, co-founder and partner at ConvergenceCoaching, LLC, recommends building connections with staff and being open to feedback.
The conclusion of 2016 research conducted by Miriam Gerstein and co-authors was that “the ideal person to head an accounting firm … must be one who has a laudable vision and knows how to communicate it, believes in servant leadership, wants to set an ethical tone at the top, cares about all stakeholders, believes in maximizing client satisfaction, encourages teamwork by building a learning organization, understands the importance of diversity, supports CSR, and wants to build a strong positive reputation for his/her organization.”
Additional desirable leadership characteristics include the following:
Leadership Styles in the Accounting Field
Several researchers have looked at leadership styles in the accounting sector. Jeffrey Barnes and co-authors concluded that the “transformational leadership style is the most effective, transactional is not effective, and passive-avoidant leadership style is deleterious to subordinates’ perception of the preferred ethical climates.” The transformational style was also found to align with all the skills associated with accounting senior leadership, posited Brian Carpenter and co-authors. Joanna Kalin tied the transformational style to addressing gender gaps in accounting.
These resources offer additional insight on leadership in accounting: