Keeping up with change, the Internet and the economy are the major challenges facing the accounting industry, according to executives of the developers of the industry's top products.

In a survey, key decisionmakers for the developers of Accounting Today's Top 100 Products most frequently cited the rapidly changing role of the accountant as the top issue facing the profession.

"The CPA role has changed rapidly over the last decade with the impact of technology, the Internet and changing customer needs," said David Butler of the middle-market division of Best Software U.S. operations. "Clients want to be served proactively by trusted advisors who can help them with a variety of core services like accounting and tax issues, technology, and business management issues, to name a few."

Butler warned, "Although they continue to prosper, accounting professionals who see their role narrowly are unwittingly inviting others to serve their clients."

David Hood, chief executive of rival accounting software developer Accpac International, called it "blurring the lines on the playing field."

"There are so many choices facing tax and accounting professionals - recom- David mender, consultant, BESTS reseller for a single accounting software vendor," Hood said. "Accountants need to define their roles according to how they can concurrently build their businesses and best serve the needs of their clients."

Linda Denlinger, vice president of CPE provider Positive Systems Inc., said that the changing role of accountants could reverse the trend of a lack of new applicants to the profession.

"The tax and accounting profession as a whole has changed, but the profession has failed to tell the general public, she said. "Financial planning, consulting, litigation and fraud are terms that could make the profession look more exciting."

"I believe the tax and accounting proButler fession is still looked upon as pencil pushers," Denlinger added. "Tax preparers and the profession should campaign to change that image."

Susan Boothe, a CPA and strategic alliances manager for enterprise resource planning software developer Navision, said, "Today's tax and accounting professionals need to be more business savvy than ever. No longer can there be specialists who deal with one type of business issue - clients depend on us to be more strategic and forward thinking with our advice."

David Bassiri, president of Reporting to the MAX, said that change will affect many accounting professionals, who "will continue to see more of their clients perform basic accounting functions internally and rely on professional services for accounting and tax advice, as well as preparing the financial report and taxes at the end of each fiscal year."

However, he said, "Those tax and accounting professionals who understand the computer technology and accounting software that their clients are using create a higher level of value by helping their clients to optimize system productivity and maximize their investment."

Many of the Top 100 product executives named the Internet as a concern, describing both its positive and negative implications.

"I think that the most important issue facing both the tax and accounting professions today is the unprecedented transformation in tax, business and financial processes brought about by the Internet," said Dave Thomas, chief executive of accounting application service provider Intacct.

"With the anytime/anywhere access and real-time collaboration that the Internet makes possible, companies of all sizes face the challenge of becoming what I call `real-time enterprises' organizations permeated and driven by real-time business intelligence," he said. "Indeed, knowing the financial state of one's company and marketplace at any given point in time may well become the most significant aspect of a firm's competitive advantage over the coming decade."

However, a number of executives see Internet confidentiality as a major hurdle to be cleared. Glynn Willett, chairman of preparation software vendor ATX Forms, said, "Confidentiality seems to be a major issue as more and more vendors like us are delivering in formation and services via the Internet. Tax and accounting professionals are torn between the confidentiality for their customers demanded by the IRS and getting the tools and information needed to serve those customers."

Scott Crowley, marketing director at rival tax prep vendor Universal Tax Systems, agreed. "Unfortunately, there are still some issues that need to be worked out with this new technology, such as security, connection speed and reliability," he said.

But Crowley points out that just as it took years for personal computer technology to become powerful enough to develop applications that could replace the service bureau, "it will take years to work out the current issues with Web-based applications," he said. Once those issues are worked out however, look for Web-based tax applications to become the de facto standard in the tax industry."

The effects of the economic downturn have raised the antennae of a number of Top 100 product executives. "With the economy as it is, and added to that the events of Sept. 11, all organizations are facing the need to `tighten belts' and look for ways to control expenses and improve operating margins," said Chris Scherpenfeel, presi dent of report writer vendor FRx Software.

Robert Machiz, chief executive of planning and analysis product vendor MoneySoft, foresees some opportunity in the midst of the slowdown. "I think in the immediate future we will see an increase in corporate clients involving their CPA in business performance and related issues as the present economic downturn creates pressures on earnings and cash flows," he said.

Jim Foster, president and chief operating of Best, agreed. "As our clients and customers face a year of potentially significant economic turmoil, those providers that can deliver valued and consistent products and services to navigate these difficult times will be in high demand," he said. "For example, as the Federal Government is poised to deliver a whole host of changes to provide economic stimulus and investment incentives, we are all challenged, as a profession, to quickly transform these policy decisions into implemented economic benefit at our customers' sites."

Finally, the degree to which traditional accounting services have become commodities has become a concern of several executives.

Kent Hollrah, of nonprofit industry software vendor Micro Information Products, said, "The issue is whether to take the bold steps necessary to bloom or do nothing and wither away. I say `wither away' because traditional services have become a commodity. Accounting professionals can still make money on these services, but in order to enjoy any real growth they are going to have to tap their passion and look at specialty or niche markets."