The Pandemic's Impact on NJCPA Members
In a year like none other, some CPAs fared surprisingly well as they adapted to remote auditing, learning, hiring and everything in between. But for others, the pandemic took a toll that will not easily be forgotten and could take years to recover from.
At the end of 2020, the NJCPA surveyed more than 800 members about the implications of the coronavirus pandemic. Of the respondents who are partners at CPA firms, 33 percent said their firm had a decrease in revenue in 2020, and 31 percent expect to have a decrease in 2021. Though 45 percent anticipated revenue staying the same, it’s a sharp sign that not all organizations are operating smoothly or at the same pace.
This was also evident when looking at the respondents who work in businesses or at government jobs, as 38 percent soured on their revenue prospects for 2021. And almost half (48 percent) of those respondents saw their organization’s revenue decrease in 2020.
Business uncertainty and client challenges were the main reasons for the negative take on 2021 cited by those working in public practice. Respondents noted client business interruptions, such as restaurant closures in New Jersey, as potential problem areas as well as the inability for clients to pay rent. Worries also centered on an inability to grow their company’s operations and a lack of networking opportunities during the pandemic. Networking was important, they said, since it is necessary to reach both new clients as well as diversify themselves if certain client businesses began to flounder. Acknowledging the resurgence of the second wave of the pandemic in the Garden State and what it means for economic recovery also kept CPAs on edge.
Despite obvious concerns for expansion and growth during the pandemic, CPAs also worried about their staff — both mentally and physically. Most CPA firms and businesses developed ways to motivate employees and keep staff engaged during an extremely difficult 2020. At a time when many felt disconnected from family and friends, creating ways to connect with staff was an important tool in retaining employees. For those lucky enough to be on the upside of that, things were bright — sometimes very bright. As survey respondents noted, companies promised more flex time, less structure, more paid time off and employee incentives. Some even absorbed increases in health insurance instead of passing that onto staff or gave out turkeys and free lunches for the holidays.
Others acknowledged that while they felt connected, better communication was still needed internally and with clients. As increased workloads and complexity related to the Coronavirus, Aid, Relief and Economic Security (CARES) Act mounted, challenges were abundant, which made communicating with staff and clients even more important. Regular Zoom calls and weekly check-ins became the norm — whether everyone was dressed for it or not. And most organizations plan to keep their communication lines more open after the pandemic subsides. Respondents particularly mentioned town hall meetings were a boon to keeping all staff informed in such turbulent times.
Few felt the impact of remote working during the pandemic more than teachers. At the college and high school level, that meant following school protocols, social distancing and switching to hybrid and fully remote plans at a moment’s notice. Of the college accounting professors surveyed, 90 percent said it was more difficult to teach remotely. Student enrollment in accounting courses has remained steady, but not all students are on the right track for taking the CPA Exam. As one respondent commented, “The strong students who plan to take the Exam are still able to perform well with the change in course delivery format, so they are still on track. Weaker students are not performing as well and will not be prepared to take the Exam.”
Socially, the students are also missing out. According to one professor, “Students have internet/technology issues which limit the use of cameras and limit the creation of relationships.” Indeed, relationship building is a big part of college, and particularly important for accounting students who need internships. Whether based on finances or some other issue, students were not welcoming of remote-style teaching for all levels of accounting. In one example, a respondent noted, “I have had many more students disappear/drop during the semester than I have in a traditional class. It’s too easy for them to ‘black screen’ and then disappear.”
Students, themselves, noted their frustration. Out of more than 80 NJCPA Student members who took the survey, 58 percent said that it was more difficult to learn accounting remotely. Respondents noted that their learning would improve if they had more opportunities to discuss topics with peers to gain a better understanding of the material, but that was not occurring in with the current learning environment.
Internships were also harder to come by. Some were not able to take advantage of internships due to the pandemic restrictions and office closures, and those who did have them learned less on the job than usual. As one student noted, “It’s harder to teach things online rather than if I was in person. So, I haven’t done as much as I have during previous in-person internships.”
When asked from a personal standpoint how respondents were coping during the pandemic, the responses varied by age and career. Surprisingly, CPA candidates and students gave their handling of the pandemic some of the lowest ratings with an average of 5.5 and 5.75, respectively, on a scale of 1 (struggling to cope) to 10 (managing very well). CPA candidates traditionally have a lot to deal with on a normal 18-month test completion window for taking the CPA Exam, but add in a pandemic and things get much more complicated. While those survey respondents who are CPA candidates did not overwhelmingly halt pursuit of becoming a CPA during the pandemic, it was decidedly more burdensome. They cited longer work hours that impinged on their study time and test centers not being readily available or open at all.
Those who had completed their test taking were also affected. The New Jersey State Board of Accountancy had a reduction in staff during the pandemic which extended durations for license processing among other requests. The NJCPA recommends that any members who have made an email or written request to the board on a licensing matter and have not received a response within one month should reach out to email@example.com.
Educators ranked next in rating the weight of the pandemic heaviest with a collective 6.3 out of 10, followed by respondents in the business, industry and government sectors at 7.26 and accounting professionals in public practice at 7.27. The respondents cited everything from hardships relating to the virus and elderly parents to remote working difficulties and worries about client businesses. Those at the highest ratings on a personal level noted improved family time during the pandemic, getting used to remote working, putting more focus on the business of the CPA firm and getting more efficient.
This article appeared in the Spring 2021 issue of New Jersey CPA magazine. Read the full issue.