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Stay ahead with essential CPA resources

Where the Profession Goes Next

CalCPA is helping lead the conversation about the profession’s future. Discover the ideas and insights that emerged from the recent CalCPA Leadership Forum when experts came together to tackle the profession’s challenges and opportunities.

Roll the DISE: A New Era of Expense Transparency

A new FASB standard is reshaping expense reporting—here’s how it changes the way performance is revealed.

America’s ‘Hidden’ Financial Statements

CPAs advise businesses and clients whose financial outcomes are affected by federal fiscal policy. Understanding the federal government’s audited financial position provides important context for broader financial and economic analysis.

Accounting is Awesome

2026-27 CalCPA Chair Miklos Ringbauer’s passion for the profession is clear and runs deep. And now he's looking to inspire the next generation by changing how people see the profession.

2026 CalCPA Chair

Golden State wisdom straight from the experts

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Looking for an old article or a past issue from California CPA magazine? You're in the right spot!

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CPAs: Making Sense of What Comes Next campaign

The path for today’s CPA candidates from accounting student to CPA is taking place against a backdrop of rapid change that’s reshaping how accounting work gets done, where CPAs work and the skills employers value.

What candidates need to know to best navigate this new landscape was the focus of a recent CalCPA Candidate Town featuring Garrett Shakstad, a CPA, instructor and senior recruiter associate with NKSFB, and David Hemphill, information officer at the California Board of Accountancy. The two broke down what today’s candidates need to understand about the CPA Exam model, licensure requirements, hiring trends and how firms are evaluating early-career professionals. 

Artificial intelligence, outsourcing and offshoring, private equity investment and industry consolidation are all influencing the accounting profession. Shakstad acknowledged that no one knows exactly how AI will ultimately affect accounting, but its impact is already being felt.

“No one knows for sure what's going to happen with artificial intelligence other than we know that it is currently changing things and it will continue to change things,” Shakstad said, who encouraged candidates to embrace AI. “My request is that we embrace artificial intelligence because it's going to be here. And if you can figure out how to make it a tool that you use, good things can happen.”

That changing landscape may make the profession feel uncertain, particularly for students preparing to enter the workforce, but Shakstad offered a different way to think about it: Change can create opportunity.

“Change always brings about really good opportunities for folks,” he said.

For candidates, that means looking beyond a single definition of what a CPA career looks like. While traditional accounting firms remain an important part of the profession, opportunities are emerging across business management, outsourced accounting, bookkeeping and family-office environments.

While technical accounting knowledge remains foundational, Shakstad cautioned candidates against assuming that employers expect them to arrive with extensive accounting experience. Rather, he explained how employers are looking for something more and highly value qualities such as talent, time management, leadership, self-reliance, coachability and the ability to learn from mistakes.

That makes the candidate’s ability to demonstrate interpersonal and professional skills increasingly important. In an environment where technology and AI can handle more tasks, human capabilities can become an even greater differentiator.

“Even in this age, soft skills matter way more than they ever have. They've always been important, but especially in an age with a lot of AI and a lot of computer work, your interpersonal skills and your soft skills matter more than ever,” he said.

His advice: Be more than your résumé. Build relationships with professors, mentors, alumni, professional organizations and potential employers. Getting in front of people allows employers to see the person behind the credentials and the qualities that person brings to the workplace.

Learn to Take Feedback—and Learn from Mistakes

Two of the most valuable skills discussed may also be among the hardest to demonstrate on a résumé: coachability and self-awareness.

Shakstad said employers want people who can work independently, think through problems and research possible solutions, as well as recognize when they have reached the limits of what they know and ask for help.

“Being able to adjust and correct is a massive skill to have,” he said. 

Candidates who respond positively to coaching demonstrate willingness to grow and can encourage supervisors and co-workers to invest in their development.

“All of us make mistakes,” Shakstad said. “We are not looking for someone who doesn't make mistakes because it doesn't exist.” Instead, employers want people who understand what went wrong, learn from it and improve.

For candidates, that changes the way they should approach interviews. Rather than simply describing a mistake, Shakstad advised spending more time explaining what was learned and how the experience led to growth.

Candidates also received an update on a significant change to the California CPA licensure pathway.

Beginning Jan. 1, 2027, new requirements established under 

 will create a new licensure pathway that is more flexible, affordable and accessible for aspiring CPAs, while preserving the strong consumer protections the profession is known for.

During 2027 and 2028, candidates will have a choice between the existing “legacy” pathway and the new requirements.

Under AB 1175, CPA candidates must earn a bachelor’s degree with an accounting concentration, pass the Uniform CPA Exam and complete two years of general accounting experience. For added flexibility, candidates can substitute a qualifying master’s degree for one year of experience, or an approved accounting certificate program for six months of experience.

One of the biggest changes is education. Under the new pathway, the additional education needed to reach 150 total units is eliminated. The education required to sit for the CPA Exam will also satisfy the education requirement for licensure.

The tradeoff is additional experience. Beginning in 2027, the general accounting experience requirement increases from one year to two years. However, certain educational options can offset some of that experience requirement, including a qualifying master's degree and certain community college or extended studies certificates.

Perhaps the most important takeaway from the Town Hall was that becoming a CPA is more than completing an exam, meeting education requirements and accumulating experience.

It’s also about becoming the kind of professional who can adapt as the profession changes.

AI may reshape tasks. Firms may consolidate. New business models may emerge, and licensure requirements may evolve. While candidates can’t control those forces, they can control how they prepare, the relationships they build, the skills they develop, their willingness to learn and how they respond when things do not go according to plan.

, which will focus on "Beating Burnout Before It Begins: Mental Resilience for CPA Candidates." 

Building a Career in a Changing CPA Profession

The path to becoming a CPA is changing, like the profession itself. At CalCPA’s Candidate Town Hall, experts shared what candidates need to know about licensure, AI, career opportunities and the skills employers value most.

What does the accounting profession need to become, not just today, but five or 10 years from now?

That question was at the heart of the recent CalCPA Leadership Forum, which brought together members and thought leaders from across the profession to examine emerging challenges, explore opportunities and help shape the direction of the profession.

Technology, changing client expectations and new workforce demands are reshaping accounting. Firms are being asked to provide greater insight, respond faster, develop people differently and continue earning trust as the work itself changes.

With California often serving as a leader for the rest of the country—“What California does, everybody else follows,” as one participant put it—the Forum focused on four connected areas: Market Expectations, Rethinking the Talent Model, The New Professional & The Human Premium, and The Strategy of Innovation.

The goal was not to predict where AI or the profession is headed. It was to focus on what leaders should be thinking about and doing now.

The Forum was designed around conversation. Panelists established the context for each topic before participants moved into facilitated table discussions to explore questions, challenge assumptions and share their own experiences. Each session concluded by bringing those perspectives back to the full room.

Panelists included Ginnie Carlier, Chief Talent and Culture Officer, EY; Puja Dalmia-Ramasubban, Senior Tax & Accounting Advisor; Al Dea, The Edge of Work Podcast; Dan Hood, Editor in Chief, Accounting Today; Kacee Johnson, FinTech and Innovation Thought Leader; Matt Martin, Managing Director, PDM LLP; Dean Quiambao, Chief Relationship Builder, Armanino; and John Sensiba, Partner, Sensiba LLP.

The conversation began with the market and a fundamental question: What do clients increasingly need from the profession, and how can firms meet those expectations?

Clients have access to more information, more technology and more choices than ever before. At the same time, the decisions they face are becoming more complex. That combination is changing what clients expect from their advisers. The discussion explored how firms can move beyond simply delivering what clients ask for to understanding what they actually need and providing greater insight, clarity and confidence.

From there, the conversation moved inside the firm and the changing talent model. For generations, firms have relied on a professional pyramid built on a large base of early career professionals doing foundational work and gaining experience as they advance. As AI and automation take on more of that work, participants explored what happens to that model.

As foundational work changes, so does the experience people gain from doing it. Participants explored what that means for how firms structure teams, develop talent and prepare professionals for greater responsibility. The conversation also looked at how career paths may evolve and what established firms can learn from organizations being built around new technology and new ways of working from the start.

That led to the individual professional and the idea of a human premium. If technical information becomes easier to access and AI can perform more analysis, what makes a professional truly valuable?

Participants pointed to capabilities such as judgment, professional skepticism, ethical reasoning, communication, relationships and trust. These have always mattered, but they may become even more important as technology takes on more routine and analytical tasks.

The challenge is how to develop them. Early career professionals have traditionally built judgment and confidence through foundational work, client interactions, mistakes, coaching and repetition. If some of those experiences disappear or change, firms and educators will need to be more intentional about creating new ways for professionals to develop the capabilities that experience once built over time.

Finally, the conversation turned to innovation and a challenge facing firms across the profession: How do you move from experimenting with new ideas to changing how the organization works?

Firms are experimenting with AI, workflow automation, new service models and different approaches to staffing. But experimentation does not automatically lead to transformation. Participants explored the role strategy, culture and leadership play in determining whether an idea remains a pilot or becomes part of how a firm operates.

Across all four conversations, AI was a consistent thread. As technology becomes better at accessing information, performing analysis and producing answers, the profession’s value may increasingly lie in what professionals do with those answers. Helping clients understand what matters, asking better questions, exercising judgment and knowing when to challenge an answer may become even more valuable.

Asking the Questions to Build Better Direction

Understanding what is changing is only the beginning. The bigger challenge is asking the right questions about what those changes mean and using the conversation to help shape where the profession goes next.

Where is client value shifting? How will people gain experience as foundational work changes? What will distinguish CPAs when technical information is easier to access? Why are some firms creating meaningful change while others remain stuck in pilot programs?

There isn’t one answer to any of these questions, and the answers will continue to evolve. That’s why CalCPA is championing these conversations that help the profession shape its future. By bringing together different perspectives, challenging assumptions and exploring new ideas, we can begin to build better direction for what comes next.

And the Leadership Forum was intended as just the beginning of that conversation.

Looking ahead, CalCPA will explore each of the four major topics discussed at the Forum through a series of articles that dig deeper into the challenges, opportunities and questions beginning to take shape.

Those ideas and perspectives will also come together in a broader report examining what they may mean for the future of the profession. The report will highlight key themes and emerging questions while exploring how CPAs, firms, educators and other profession leaders can prepare for what comes next.

Most importantly, the work will help continue the conversation and identify opportunities for CalCPA to gather, support new ideas and help the profession turn change into meaningful progress.

Financial reporting is entering a new era of transparency. With the issuance of Accounting Standards Update (ASU) 2024-03, the Financial Accounting Standards Board (FASB) has introduced the 

Disaggregation of Income Statement Expenses (DISE) standard

, codified in ASC 220-40. This new requirement is poised to significantly impact how public business entities present and disclose expense information, offering investors and stakeholders a clearer window into the true drivers of company performance.

For years, investors and analysts have called for more granular information about expenses reported in financial statements. Traditionally, companies have presented expenses by function—such as cost of sales, selling, general and administrative (SG&A), or research and development (R&D). While functional reporting provides a high-level view, it often obscures the underlying nature of costs, making it difficult to compare companies or assess trends over time.

The DISE standard responds to these concerns by requiring public business entities to break down—or “disaggregate”—key expense captions into natural expense categories. The goal is to help users of financial statements better understand what’s driving costs, assess future cash flows and make more informed investment decisions.

The heart of the DISE standard is a new tabular disclosure in the notes to the financial statements. For each relevant expense caption presented on the face of the income statement—such as cost of goods sold, SG&A or R&D—companies must disclose the amounts attributable to the following natural expense categories:

In addition to these categories, companies must integrate certain existing disclosures, such as impairment losses, exit costs and warranty expenses, into the new table. The standard also requires disclosure of total selling expenses and a clear definition of what constitutes “selling expenses” for the reporting entity.

If a company receives or pays expense reimbursements (for example, through cost-sharing arrangements), these must be disclosed either as separate line items or netted against the relevant expense category, accompanied by a qualitative explanation.

Recognizing the operational complexity of inventory accounting, the standard provides two acceptable approaches for disaggregating inventory-related expenses:

This flexibility reflects a deliberate balance between investor usefulness and preparer operability, while still requiring consistent application once a method is selected.

In practice, it is expected that many entities will elect to use the cost incurred basis when a relevant expense caption contains inventory related expenses. While the expense incurred basis provides conceptual alignment with cost of sales, it can be operationally challenging to track and recharacterize inventory costs that were capitalized in prior periods—particularly in complex or global supply chains, standard costing environments or situations involving long inventory holding periods. 

As a result, the cost incurred basis is likely to be viewed by many preparers as the more operable and sustainable approach, while still achieving the transparency objectives of the DISE standard.

The DISE standard is effective for annual periods beginning after Dec. 15, 2026, and for interim periods within annual periods beginning after Dec. 15, 2027. Early adoption is permitted. Companies may apply the standard prospectively or retrospectively, but regardless of the approach, the time to prepare is now.

Implementation: More Than a Compliance Exercise

Implementing DISE is not simply a matter of updating disclosures. It requires a comprehensive review of systems, processes and internal controls. Companies should begin with a diagnostic phase, identifying which expense captions and natural expense categories apply to their business. A gap analysis will reveal whether existing systems can capture the necessary data or if upgrades are needed.

Cross-functional collaboration is essential. Accounting, finance, IT, procurement and investor relations teams must work together to develop business requirements, update policies and design new processes. Training and communication are critical to ensure that staff understand both the technical requirements and the practical implications for day-to-day operations.

DISE presents several challenges. Companies must determine whether their ERP and reporting systems can accurately capture and report the required expense categories. Defining “selling expenses” in a way that is both meaningful and consistent with industry practice may require careful judgment. Decisions about whether to transition prospectively or retrospectively, and whether to use practical expedients for inventory or employee compensation, will have significant implications for both reporting and operations.

Stakeholder communication is also vital. Management, audit committees and investors will need to understand the changes and their impact on reported results.

The Disaggregation of Income Statement Expenses standard marks a significant shift in financial reporting. By providing greater transparency into the nature of expenses, DISE will help stakeholders make better-informed decisions and foster greater trust in financial reporting. While the road to implementation may be complex, companies that embrace the change will be well-positioned to deliver enhanced value to investors and other users of their financial statements.

Each year, the federal government publishes one of the most comprehensive financial reports in the world, yet most Americans—and financial professionals—are largely unaware of its existence.

Earlier this year, the U.S. Treasury released the 

Financial Report of the United States Government for Fiscal Year 2025

, which presents audited, accrual-based financial statements for the federal government. It resembles the annual report of a large corporation, containing consolidated financial statements, management discussion and analysis, notes to the financial statements, required supplementary information, and an independent auditor’s report issued by the Government Accountability Office (GAO). 

For CPAs, the report should feel familiar. It applies many of the same accounting concepts used in private-sector reporting, including accrual accounting, liability recognition, sustainability analysis, internal controls, and audit reporting. Yet despite its significance, the report remains largely absent from mainstream financial discussions, media coverage, and public policy debates.

Constitutional Origins and Modern Financial Reporting

Federal financial accountability has been embedded in the nation’s framework since the adoption of the Constitution. Article I, Section 9, Clause 7 requires that “a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” 

This requirement is fulfilled primarily through cash-based reporting centered on annual receipts, expenditures, and deficits. As the federal government expanded, however, the limitations of cash-based reporting became increasingly apparent. Programs such as Social Security, Medicare, federal pensions, and veterans’ benefits created long-term obligations that were not fully reflected in annual budget measures.

After decades of discussion, Congress enacted the Chief Financial Officers Act of 1990, establishing Chief Financial Officer positions at the major federal agencies and laying the foundation for modern federal financial reporting. The Government Management Reform Act of 1994 subsequently required annual, audited, consolidated accrual-based financial statements for the federal government. The first audit was for fiscal year 1997. 

One of the most important concepts within the Financial Report is the distinction between the federal budget deficit and net operating cost.

Public discussion almost always focuses on the annual cash-based budget deficit which reflects how much the government must borrow during a fiscal year. While useful for evaluating short-term financing needs, it does not capture the long-term economic effects of government operations. 

The Financial Report instead emphasizes net operating cost, an accrual-based measure defined in the report as the government’s “bottom line.” Under accrual accounting, expenses are recognized when incurred rather than when cash payments are made. This includes changes in long-term liabilities and future obligations that may not require immediate cash expenditures. 

The difference between the two measures can be substantial. For fiscal year 2025, the budget deficit was $1.8 trillion, and the net operating cost was $2.1 trillion before the reversal of illegally collected tariffs 

The difference was even more dramatic in fiscal year 2022 when the budget deficit was $1.4 trillion and the net operating cost was $4.2 trillion. 

For CPAs, the distinction is significant. In private-sector reporting, evaluating financial performance without considering accrued liabilities would provide an incomplete picture of economic reality. Yet discussions of federal finances focus almost exclusively on cash-based measures.

The Federal Balance Sheet and Long-Term Sustainability

The report’s consolidated balance sheet provides additional insight into the government’s long-term fiscal position. For fiscal year 2025, the federal government reported total assets of $6 trillion (exclusive of Stewardship and Heritage Assets), total liabilities of $48 trillion and negative net position of $42 trillion. 

Among the largest liabilities are publicly held debt and accrued interest. And federal employee pensions, and veterans’ benefits of $15 trillion. 

The report includes the present value shortfall for Social Security and Medicare over a 75-year horizon of $88 trillion, an increase of $10 trillion from the prior year. Although these projections are not recorded as liabilities under federal accounting standards, they provide important context regarding long-term fiscal sustainability.

Throughout the report, the government repeatedly warns that current fiscal policies are “unsustainable.” These warnings are not political commentary. They are formal disclosures contained within audited financial statements. 

Since fiscal year 1997, the GAO has consistently issued disclaimers of opinion. 

The reasons include material weaknesses in internal controls over financial reporting; scope limitations, including at the Department of Defense; insufficient audit evidence; and ongoing challenges involving accounting systems and interagency balances. 

Importantly, many individual federal agencies do receive unmodified opinions. However, the scale and complexity of consolidating the entire federal government continue to present substantial reporting challenges.

Arguably, the Financial Report remains one of the most comprehensive yet underutilized financial documents in America. It provides a broader and more complete perspective on the government’s financial condition than cash-based budget measures alone.

CPAs routinely advise businesses, lenders, investors, governmental entities, nonprofit organizations and retirees whose financial outcomes are directly affected by federal fiscal policy and economic conditions. Understanding the federal government’s audited financial position provides important context for broader financial and economic analysis.

For CPAs, the report serves as a real-world case study in accrual accounting, long-term liability recognition, financial transparency, internal controls, and audit complexity. It also demonstrates the importance of understanding the difference between cash-based budgeting and accrual-based financial reporting when evaluating financial sustainability.

The accounting profession has long emphasized transparency, comparability, and informed decision-making. The AICPA has supported efforts to increase awareness of federal financial reporting, including bipartisan legislation such as the Fiscal State of the Nation Act, which would require annual presentations to Congress of the government’s audited financial statements. 

CPAs are well positioned to explain the distinctions between budget deficits, net operating costs, liabilities, and long-term obligations in a way that is objective and understandable to the public. The information exists. The question may simply be why more people—including CPAs—are not paying attention to it.

The accounting profession is changing quickly. Artificial intelligence is reshaping how work gets done, new career pathways are emerging, and expectations for CPAs continue to expand. At the same time, the profession must maintain the trust, integrity and professional standards that have always defined it.

Through all this, CalCPA remains focused on preparing CPAs for the future while protecting the integrity of the profession. 

 showcases CalCPA’s leadership in advocating for the profession; expanded education around AI literacy, ESG reporting and advisory services; building community; and investing in the next generation of CPAs who will carry the profession forward.

 to read how CalCPA is helping strengthen the profession at every stage of the pipeline and shaping what’s next for California CPAs.

CalCPA 2025 Impact Report: Charting What's Next Together

From advocacy and education to community and scholarships, see how CalCPA helped move California’s accounting profession forward.