In the aftermath of the financial meltdown of 2008, the financial services sector is getting a regulatory overhaul that could create a host of new opportunities for CPAs and accounting firms.

Painful as it is, the combination of “recession, tight credit and a growing awareness of regulatory shortcomings will drive government action,” said AICPA vice chairman Bob Harris last week in a keynote address at the Florida Institute of CPAs FABexpo in Orlando, Fla.

Policymakers from Washington to Sacramento and from London to Singapore are evaluating various means “to close gaps in the existing regulatory structure,” said Harris, who is in line to take over as chairman of the AICPA from Ernie Almonte in October for the 2009–2010 term.

As a result of the economic crisis, Harris said, Congress is undertaking “a sweeping overhaul of financial regulation” that, he added in an interview afterwards, “probably means more work for accountants.”

To be sure, CPAs and accounting firms have not been immune from the downturn, said Harris, a partner in the local Vero Beach, Fla., CPA firm of Harris Cotherman Jones Price & Associates.

Nevertheless, the CPA profession has made it through the crisis with its reputation relatively unblemished. In fact, the CPA reputation has rarely been held higher in public esteem and the profession has emerged as a key factor in designing the government’s new recovery and regulatory plans.

So far, many of the initiatives coming out Washington are falling in line with the AICPA’s agenda, Harris said. He ticked off some of the key developments that seem to be moving forward:

• Properly regulating and auditing hedge funds. Even defining a hedge fund would be progress, Harris said.
• Requiring investment advisers and hedge fund advisers to undergo surprise audits by independent CPA firms.
• Bringing hedge funds under the some of the same oversight as other investment companies subject to SEC regulation.
• Requiring Public Company Accounting Oversight Board registration, inspection and enforcement of auditors of publicly-traded broker-dealers and private broker-dealers that perform clearing or custodial functions.
• Mandating peer review for private, non-clearing, non-custodial broker-dealers.
• Adding SAS 70-type audits for custodial functions.

At the same time, CPAs need to start gearing up for IFRS (International Financial Reporting Standards), sustainability accounting and XBRL (eXtensible Business Reporting Language), Harris said.

The SEC has cooled lately in support of moving toward IFRS. Still, the day will come. So far “organizations have made little progress toward preparing for IFRS,” Harris said.

Nevertheless, CPAs need to be preparing today for the new landscape of tomorrow — in all its facets “These changes,” Harris concluded, “will ultimately provide more opportunities for CPAs.”

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