Insight Magazine - Winter 2024 /// Illinois CPA Society

Why ESG Controllers Are Key to Sustainability Compliance

How to Prep Your Firm for a Sale Tips for Your SQMS Journey Social Media’s Impact on Audits Is an ESOP Right for Your Firm?

The Ethics of Remote Work And More!

Benchmarking Your Benefits

ceooutlook

Geoffrey Brown, CAE President and CEO, Illinois CPA Society

5 Areas to Watch in the Accounting Profession

As we look to 2025, it’s important to take note of the trends poised to drive change in the accounting profession.

Change in the accounting and finance ecosystem is nothing new— the issues on the horizon often feel similar, but different, from year to year. The issues feel similar because, frankly, many of them aren’t new. On the other hand, every issue is different because the environment we’re living and operating in continues to shift. In 2025, I fully believe accounting and finance leaders need to focus more on being prepared to handle the challenges—and harness the opportunities—that are steering the profession. Here are five areas I believe will impact the profession most in the year ahead.

1. AI and Generative AI Adoption: Artificial intelligence (AI) is already a part of many accounting workplaces and will continue to shape the profession for years to come as it becomes more integrated into the technology tools we use. I believe AI will increasingly be viewed as a partner that enhances capacity and effectiveness, providing new insights and creating efficiencies for firms and finance teams alike. In the year ahead, AI will likely continue transforming the work of accounting and finance professionals. While this transformation is occurring, it’s also important to recognize AI’s limitations and implement the right safeguards to ensure responsible usage. AI’s capabilities should be a complement to, not a replacement for, the human capital we have. In my view, AI should be looked to as a means to extend the reach and impact of the specialized skills certified public accountants (CPAs) and other accounting and finance professionals have as strategic business advisors.

2. Human Capital and Workforce Development: The profession has received the National Pipeline Advisory Group’s report, along with recommendations from other stakeholders, on how to address the profession’s workforce issues and talent shortage. While this report focuses on the important work needed to raise awareness of accounting as a rewarding and impactful career field, the path ahead is still challenging. The

truth is awareness of what a career in accounting can look like is low among young people, and among those familiar with it, many still perceive the alternatives as more relevant and impactful. Those of us in the profession can help change that perception by telling a more compelling story about what it means to the clients, companies, and communities we serve. In turn, we may be able to inspire more young people to major in accounting and rebuild a robust pipeline of future CPAs.

3. AICPA and NASBA Leadership Transitions: The entire profession should be watching to see the impact of new leadership at both the Association of International Certified Professional Accountants (AICPA) and National Association of State Boards of Accountancy (NASBA). Mark Koziel, CPA, CGMA, at the AICPA, and Daniel J. Dustin, CPA, at NASBA, are both taking over for long-tenured leaders. While both have established records in other roles within the profession, we need to understand how they’ll leverage their resources to steward the profession into its next iteration. Leadership changes of this nature have the potential to significantly impact the profession’s trajectory in a compelling way. Will they be caretakers or changemakers? How will they confront the profession’s most pressing challenges and harness the opportunities? Only time will tell.

4. Evolving CPA Licensure Models: The current pathway to CPA licensure, including the 150-credit-hour requirement, has long been the standard. However, that standard is now increasingly viewed as a barrier to entry into the profession for many, and new pathways need to be adopted. There’s a nationwide push to codify alternative pathways to CPA licensure that would require a bachelor’s or master’s degree with an accounting concentration, passage of the CPA exam, and one or two years of experience, respectively. These pathway proposals are

designed to address prospective CPAs’ concerns about the time and cost of education for licensure, while still maintaining the necessary rigor to protect the public. While adding pathways to licensure won’t likely alleviate short-term talent issues, the profession needs to continue acting on the insights gleaned from the many pipeline and talent retention studies that have taken place in recent years (e.g., see our Insight Special Features, “Righting Retention” and “Re-Decoding the Decline”). Further, the profession must begin laying the foundation for how it’ll develop the next generation of talent under any new licensure pathways that become adopted.

5. Normalization of the Regulatory Regime: During the current administration, the profession faced a barrage of regulatory proposals that surpassed previous levels. Now that the election outcome is certain, 2025 is poised to be a year of regulatory shift. Will the next administration follow with continued intense rulemaking and enforcement? My gut says otherwise. I believe a shift away from increased regulation is more likely, which should be welcomed in the profession, as regulatory intent and impact haven’t always aligned. A pause in new regulation should also provide the time and space needed for everyone to catch up.

As we look ahead to 2025, I think we should brace for a year that may appear quietly calm on the surface but could still be filled with surprises. Ultimately, if we’re going to maximize the accounting profession’s potential in today’s competitive environment, I think we all need to come together, focus on the future, and bring forward initiatives that help the profession grow and stand the test of time.

ILLINOIS CPA SOCIETY

550 W. Jackson Boulevard, Suite 900, Chicago, IL 60661 www.icpas.org

Publisher | President and CEO

Geoffrey Brown, CAE

Editor

Derrick Lilly

Assistant Editor

Amy Sanchez

Senior

Creative Director

Gene Levitan

Copy Editor

Mari Watts

Photography

Derrick Lilly | iStock

Circulation

John McQuillan

ICPAS OFFICERS

Chairperson

Deborah K. Rood, CPA, MST | CNA Insurance

Vice Chairperson

Brian J. Blaha, CPA

Secretary

Mark W. Wolfgram, CPA, MST | Bel Brands USA Inc.

Treasurer

Jennifer L. Cavanaugh, CPA | Grant Thornton US

Immediate Past Chairperson

Jonathan W. Hauser, CPA | KPMG LLP

ICPAS BOARD OF DIRECTORS

Pedro A. Diaz de Leon, CPA, CFE, CIA | Sikich LLP

Kimi L. Ellen, CPA | Benford Brown & Associates LLC

Lindy R. Ellis, CPA | Ernst & Young LLP

Jennifer L. Goettler, CPA, CFE | Sikich LLP

Monica N. Harrison, CPA | Tinuiti

Joshua Herbold, Ph.D., CPA | University of Illinois

David W. Knutsen, Ph.D., CPA, CGMA, CFE | Outreach

Enrique Lopez, CPA | Lopez & Company CPAs Ltd.

Kimberly D. Meyer, CPA | Meyer & Associates CPA LLC

Matthew D. Panzica, CPA | BDO USA PC

Leilani N. Rodrigo, CPA, CGMA | Galleros Robinson CPAs LLP

Richard C. Tarapchak, CPA | Verano Holdings Corp.

Andrea Wright, CPA | Johnson Lambert LLP

Stephanie M. Zaleski-Braatz, CPA | ORBA

BACK ISSUES + REPRINTS

Back issues may be available. Articles may be reproduced with permission. Please send requests to lillyd@icpas.org.

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Insight is the magazine of the Illinois CPA Society. Statements or articles of opinion appearing in Insight are not necessarily the views of the Illinois CPA Society. The materials and information contained within Insight are offered as information only and not as practice, financial, accounting, legal or other professional advice. Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication. It is Insight’s policy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin. The Illinois CPA Society reserves the right to reject paid advertising that does not meet Insight’s qualifications or that may detract from its professional and ethical standards. The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within Insight, and makes no representation or warranties about the products or services they may provide or their accuracy or claims. The Illinois CPA Society does not guarantee delivery dates for Insight. The Society disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delays in delivering Insight. Insight (ISSN1053-8542) is published four times a year, in spring, summer, fall, and winter, by the Illinois CPA Society, 550 W. Jackson,

capitolreport

Martin Green, ESQ

Senior Vice President and Legislative Counsel, Illinois

CPA Society

@GreenMarty

CPA Licensure Pathways Must Adapt to Change

Answering the call on the CPA pipeline crisis, stakeholders are working to eliminate extraneous barriers in the licensure framework.

Pipeline issues, shifting demographics, and changing environments of financial and audit standards have been creating headwinds for the current certified public accountant (CPA) licensure framework— a structure that’s been in place since 2001.

Over the past year, the Illinois CPA Society (ICPAS) has taken part in important discussions on the existing licensure framework, attempting to eliminate barriers and deterrents to prospective CPAs, all while preserving the profession’s coveted reputation as a learned profession and retaining its mobility practice privilege. Many states are now poised to propose legislation to adapt the existing framework to today’s realities.

ADAPTING TO CHANGE

Currently, the Illinois Public Accounting Act and Uniform Accountancy Act (UAA) require candidates to pass all portions of the CPA exam, complete 150 credit hours of qualifying education, and gain one year of relevant work experience before becoming licensed. In 1991, Illinois became the 18th state to adopt the 150-credit-hour requirement to sit for the exam in 2001. The impetus to this enhanced educational requirement was the belief that the growing complexity of accounting and auditing standards demanded enhanced education.

For the past two-plus decades, the AICPA and National Association of State Boards of Accountancy (NASBA), the two primary national organizations that provide leadership and stewardship to the accounting profession and CPA credential, have maintained their posture on this matter.

Now, with accountancy programs struggling more than ever to attract students and encourage graduates to pursue the CPA credential, the support for the 150-credit-hour mandate is waning. Both national and state-based organizations, including ICPAS, are now examining the CPA pathway more closely to look for ways to eliminate the barriers that may be making the profession less attractive to current and future generations of prospective CPAs.

THE PROPOSALS IN PLAY

State Societies and NPAG

Many state CPA societies have formed their own working group to discuss steps that could be taken for a new licensure framework while preserving the mobility practice privilege. Similarly, AICPA launched the National Pipeline Advisory Group (NPAG) to shape a national strategy to address the profession’s talent shortage (Illinois was represented by former ICPAS Board Chair and KPMG partner Jonathan Hauser, CPA). Notably, the state society CEOs and NPAG have yielded similar but differing proposals to the CPA licensure framework.

Many states, like Illinois, will be pursuing legislation that maintains the existing pathway to CPA licensure but also provides additional pathways to licensure. For example, here in Illinois, we’re proposing an amendment to the Illinois Public Accounting Act that would create a pathway to licensure for CPA candidates that earn a bachelor’s degree with an accounting concentration, pass the CPA exam, and complete two years of experience, while also adding provisions to support long-term practice mobility.

An important consideration in any pathway proposal is automatic mobility for all, which preserves mobility practice privilege for a licensed CPA in good standing in their respective jurisdiction. This latter part of the proposal eliminates the reliance on substantial equivalency to obtain mobility. Currently, four states have automatic mobility for all: Alabama, Nebraska, Nevada, and North Carolina. Generally, the automatic mobility provision applies if a person is licensed as a CPA in another state and is in good standing. These individuals will have the privileges of a CPA in the state, directly analogous to the way our driver’s licenses work when we cross state lines: “No notice, no escape.”

National Organizations

From the national side of things, the AICPA and NASBA have embarked upon a two-tiered approach to the licensure framework.

First, they’ve issued an exposure draft on the CPA CompetencyBased Experience Pathway, which is available for stakeholder comment. Second, and redundant with the first, they’ve released a UAA exposure draft to include the additional Competency-Based Experience Pathway and clarify the process by which a CPA can practice under mobility. Since this latter course of action is a UAA exposure draft, the formalized processes for stakeholder comments and considerations will have to be followed.

• AICPA Exposure Draft: The CPA Competency-Based Experience Pathway requires successful completion of all portions of the CPA exam, a bachelor’s degree, one year of competencybased experience, and one year of general experience. Candidates would have to complete their bachelor’s degree fulfilling state board education requirements for accounting and business before embarking on the licensure pathway. Competency-based experience consists of providing any type of services or advice using accounting, attestation, compilation, management advisory, financial advisory, tax, or accountancy by a licensee of a CPA evaluator. After a minimum of one year, a candidate’s competencies are certified by a CPA evaluator using a competency-based experience certification form or on a state accounting board-approved form.

• UAA Exposure Draft: Includes the adoption of the AICPA’s competency-based pathway outlined above and maintains reliance on substantial equivalency for mobility practice privilege. This reliance on substantial equivalency (which is now in place) adds additional, and in my opinion, unnecessary steps for CPAs who are licensed and in good standing with their respective states to have mobility in another state. Substantial equivalency includes education, exam, and experience.

With 55 different state and territorial jurisdictions having to adopt a licensure pathway, NASBA and its member state boards of accountancy remain the gatekeepers of the substantial equivalency framework. Therefore, either a state board would have to review a CPA’s licensure and education pathway to determine substantial

equivalency for mobility practice privileges, or the CPA could subscribe to NASBA’s National Qualification Appraisal Service (NQAS) for a review and recommendation to the state board of accountancy. If a state were to adopt a pathway that wasn’t substantially equivalent to the UAA under the AICPA and NASBA proposal, the state would have to go through NASBA’s national licensee database to verify whether the CPA meets the licensure requirements of their state.

A couple of my general thoughts on this, if I may. First, the UAA isn’t the law but rather a model act for uniformity that the states can follow for guidance. Second, the insertion of NQAS and the national licensure database is an unnecessary barrier. Regardless of substantial equivalency, if a CPA enters another state and performs services under mobility for all, that CPA is subject to that state’s jurisdiction. Therefore, the intermediary step of substantial equivalency evaluation is unnecessary. It’s an automatic jurisdiction with no need for an intermediary step. Think about it—could you imagine being pulled over in another state for speeding and a review would have to occur to make sure that your driver’s license was substantially equivalent to the state you were driving in? I didn’t think so. Third, there’s a $250 fee for licensees to subscribe to NQAS evaluations. Lastly, with 55 jurisdictions moving toward additional pathways to licensure, it’s an open question as to whether NQAS’ capacity can handle an influx of timely evaluations.

ICPAS will be providing formal comments on the CompetencyBased Experience Pathway by responding to the 16 formulated questions included in the exposure draft. Additionally, we’ll be responding to the UAA exposure draft with our licensure pathway recommendation.

We’re cognizant that additional pathways aren’t a panacea to the profession’s talent woes. However, we believe meaningful additional pathways could eliminate barriers and provide more attractive routes to licensure. As always, we’ll continue to keep you informed on this matter as we move forward.

One Last Busy Season: Prepping Your Firm for a Successful Sale

Preparing for the sale of an accounting firm requires a lot of careful planning. Here’s what firms need to consider before selling, merging, or taking on a private equity investment.

BY BRIDGET MCCREA

whereby one or two partners may be bought out by the remaining partners. This strategy tends to work best when firms have a mix of younger and veteran partners, the latter of which may be planning to retire within the next few years.

MORE AMERICANS are expected to turn 65 by 2027 than at any other time in history, the accounting labor force is constrained, and many firm leaders are beginning to exit the industry (or are at least thinking about it). At the same time, the highly fragmented accounting sector is the apple of many investors’ eyes, with private equity (PE) firms taking an especially keen interest in the industry. These and other factors are enticing more practice owners and/or partners to ask themselves: Is it time to sell, merge, or take on a PE investment?

Bob Lewis, MBA, president at The Visionary Group in Palatine, Ill., says that question is being floated by him by a lot of firms right now. And because internal succession teams may lack the resources needed to buy their practices, more of them are considering merging with other CPA firms or selling their practices altogether.

“If the internal succession team doesn’t have the capital to buy in, the only option is generally to merge with a firm or sell it,” Lewis says. However, he also sees firms taking a “hybrid” approach,

The accounting industry has also piqued the interest of PE firms that wish to serve as strategic partners, providing capital, expertise, and guidance to drive growth and transformation.

Over the last three years, PE firms have staked their claims in firms of all sizes—a trend that CFO Brew says “shows no sign of slowing.” Accounting’s status as one of the few remaining highly fragmented industries is a key attractor. In an October 2024 article, Sabrina Howell, a professor of finance at New York University’s Stern School of Business, told CFO Brew, “Getting bigger gives firms an opportunity to take advantage of economies of scale.”

WHY ACCOUNTING FIRMS ARE IN BIG DEMAND

According to Brian Lunt, managing director at Stevenson & Company in Evanston, Ill., there’s a healthy market for CPA firm acquisitions right now: “Most of those deals are being executed by firms looking to expand their geographic reach or practice areas and are getting into the game by acquiring larger firms.”

Smaller firms are also merging together, with some of that activity driven by the availability of 100% United States Small Business Administration financing. “This type of financing encourages the combination of smaller firms,” Lunt says.

Drilling down further, Allan Koltin, CPA, CGMA, CEO of Koltin Consulting Group Inc. in Chicago, says there are two buyer tracks for CPA firms to consider: inside buyers and outside buyers. The insiders tend to be larger accounting firms. For example, a top 50 firm may be searching for potential acquisitions among the top 1,000 firms, and the latter may be looking for companies in the top 3,000 list.

“It’s kind of like the circle of life, with larger firms buying smaller ones and merging them into their own practices,” Koltin explains.

Outside buyers, on other hand, usually have available capital and are looking for potential acquisition targets in the industry. They can be PE firms, private capital investors, or even pension funds, some of which are based outside the U.S. Of course, much of that international interest can be credited to the spate of successful PE deals during the last three years.

“I was recently on a Zoom call with a Canadian pension fund and thought I was on the wrong call,” Koltin recalls. “Turns out they were looking to invest in U.S. accounting firms.”

IS THE SALE WORTH IT?

Koltin says accounting firms have historically been valued based on the “easy in/easy out” philosophy, through which senior managers become partners and, as part of the progression, can buy equity in the firm. The ownership was typically sold to the senior managers at a discount and reflected how their participation in the firm helped create its current value.

“Partners didn’t have to go out and borrow a lot of money to get ownership into their accounting firms,” Koltin explains. Upon exiting the firm, those partners were generally compensated based on their “best three years” of earnings, multiplied by two, and then extended out over a 10-year period.

Today, however, PE firms are coming in and pricing firms at almost double their revenue while also offering large cash payments at closing and the opportunity to have rollover equity in the business. That rollover equity is typically held for five years and can appreciate dramatically once the firm is sold to either a strategic buyer or larger PE firm.

Koltin says he’s been spending quite a bit of time advising firms on these trends: “Firm valuations have gone through the roof, and this presents a major challenge in most CPA firm boardrooms,” he says. “It’s called into question whether traditional valuations of CPA firms now need to be significantly increased for firms choosing to remain independent.”

PUTTING YOUR BEST FOOT FORWARD FOR A SALE

Of course, just because PE firms and others are scouring the industry for firms to acquire or invest in doesn’t mean you can just sit back and let the deals take care of themselves. Lewis says one of the best first steps in ensuring that you’re pricing your firm right is to look at details like the number of production hours being billed by partners.

“Some firms inflate their profitability basis based on a high number of billable partner hours,” Lewis explains.

For example, Lewis says a firm with several partners billing 2,000 hours each may expect a certain price, but the reality is that the buyer may not be able to replace those hours in the current market:

“That firm actually is worth less to an acquirer than a firm that’s making less but that has more leverage in it.”

Bench strength is another important consideration for firms interested in selling their practice, especially in an environment where backfilling leadership, management, and even junior positions have become extremely difficult.

“No one wants to just buy a book of business anymore,” Lewis says. “Twenty years ago, someone may have bought a firm with a $5 million book of business without much concern about having to hire new people to run it, but today, that $5 million firm has to have a bench that’s going to stay in place.”

Overall, regardless of which type of buyer or investor you’re working with, Lunt says patience will be the virtue throughout the courtship, due diligence, and sale process: “During this period, the buyer will likely analyze all financials, contracts, IT systems, cybersecurity compliance, human resource processes, leases, and anything else they can think of.”

Additionally, Lunt stresses that most buyers will require sellers to continue working in the practice for some period of time to ensure a smooth transition. They’ll also want to meet with your staff to ensure a good fit.

While this process takes time, Lunt says it helps ensure a good fit for the firm, its partners, and its clients: “Finding the next steward of your practice isn’t easy and takes a dedicated effort—plan your transition ahead of time to give yourself the flexibility to achieve your objective.”

Bridget McCrea is a Florida-based freelance writer specializing in business and technology.

6 Tips for Implementing the New Quality Management Standards

Starting now, gaining familiarity, and building the right team will be crucial for complying with the AICPA’s coming professional standards.

BY HEATHER LINQUIST, CPA

1. START NOW

ON DEC. 15, 2025, a series of new risk-based professional standards from the AICPA will go into effect, which will have a significant impact on CPA firms that perform engagements under Statements on Auditing Standards (SAS), Statements on Standards for Accounting and Review Services (SSARS), and Statements on Standards for Attestation Engagements (SSAEs). Until then, you can expect the noise and chatter surrounding the new Statements on Quality Management Standards (SQMS) to grow louder. The standards include:

• SQMS No. 1: “A Firm’s System of Quality Management.”

• SQMS No. 2: “Engagement Quality Reviews.”

• SAS No. 146: “Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards.”

• SSARS No. 26: “Quality Management for an Engagement Conducted in Accordance With Statements on Standards for Accounting and Review Services.”

While no one can eliminate the inevitable confusion these new standards may bring, it’s important for firms to keep in mind the “why” behind them: to ensure the quality of the profession’s auditing and accounting work.

Here are six tips to consider as you start your important SQMS implementation journey.

First and foremost, firms must start their SQMS implementation process as soon as possible. While implementing new professional standards often involves looking backward, that’s not a luxury firms have this time around because they must design and implement quality management systems by the Dec. 15, 2025, compliance deadline.

2. UNDERSTAND THE BASICS OF WHAT’S REQUIRED

SQMS, which supersede the current Statements on Quality Control Standards (SQCS), requires firms to develop quality management systems that provide reasonable assurance a firm will conduct engagements in accordance with professional standards and applicable legal and regulatory requirements, as well as issue appropriate reports.

Practically, the objectives of SQMS and SQCS are the same, with the change being how firms achieve this goal. Instead of adopting a set of generic policies, SQMS employs the concept of quality risk and response. Firms will need to focus on quality concerns specific to their circumstances, tailoring risk responses to form a system of quality management.

SQMS lays out a framework of two process-oriented components: 1) risk assessment and 2) monitoring and remediation. These two components are then integrated with six environmental and operational components:

1. Governance and leadership.

2. Relevant ethical requirements.

3. Acceptance and continuance.

4. Engagement performance.

5. Resources.

6. Information and communication.

For each of these six components, firms must establish quality objectives, identify and assess quality risks to those objectives, and design and implement responses to those risks.

3. GAIN FAMILIARITY WITH THE STANDARDS

Whether it be through continuing education, reading through the standards, or reviewing AICPA resources, everyone involved with the implementation process on your team should take time to develop familiarity with the standards.

Equally essential is gaining a thorough understanding of your firm, including its practice, structure, operations, and culture. These factors help reveal risks that could prevent the firm from performing work that meets professional standards, what actions the firm already takes (or should take) to mitigate those risks, and how the firm can monitor the effectiveness of its actions.

“It’s mentally similar to a client audit risk assessment where you have to gain an understanding of the business and the environment that it works in and everything else involved with that,” says Kelly Buchheit, CPA, director of quality control at ORBA, who is currently spearheading the firm’s SQMS implementation process.

Like documenting the understanding of an audit client, it’s helpful to draft a brief profile summarizing key points about the firm, such as the types of engagements it performs, firm structure, personnel, accessible resources (e.g., technology, external consultants, etc.), training, previous monitoring and peer review issues, and upcoming changes (e.g., retirements). Firms can refine this understanding by discussing it with personnel and their peer reviewers.

4. BUILD THE RIGHT TEAM

Before jumping into the implementation process, you should identify your key players. “It’ll be more helpful if you have somebody who has good knowledge of the inner workings of the firm,” Buchheit says.

Specifically, Buchheit suggests firms consider individuals who might be most impacted by the standard, possess a strong understanding of the firm’s technological resources, and hold strong institutional knowledge of the firm and its strategic goals.

She adds that it’s equally important to not overly involve individuals: “You don’t want too many cooks in the kitchen—there needs to be a balancing act.”

While firms with small leadership teams may have less of a challenge identifying who to involve in the implementation process, figuring out ways to bring multiple perspectives to the table will ultimately be key in ensuring the potential risks are considered from all angles.

5. FIND THE RIGHT RISK-ASSESSMENT APPROACH

The AICPA released a practice aid, “Establishing and Maintaining a System of Quality Management,” to assist firms with the SQMS implementation process. It offers a framework that lays out component quality objectives and potential risks that firms should consider during their risk assessment.

The aid consists of three files: a guide for sole practitioners, a guide for small-to-medium-sized firms, and an example risk assessment template. More details on how to use this guide were provided in the fall 2024 Insight article, “Navigating the Path to Audit and Attest Quality Management.”

Notably, determining whether potential risks represent actual quality risks for your firm can be a difficult process. For instance, a quality risk for one firm may not be relevant to another.

Genevra Knight, CPA, CCIFP, partner at Porte Brown LLC, stresses it’s not reasonable to have every single risk from the AICPA practice aid listed in your quality management document. “Instead, focus on the relevant risks through eliminating, combining, and/or simplifying some of the AICPA practice aid’s risk language,” she says, which should effectively tailor risks to your firm’s circumstances. Some firms may choose to use the common strategy of tackling each component one at a time to determine their quality objectives and risks before moving on to the next component. Other firms may prefer using a step-by-step approach, where they lay out the risks of the quality objectives for all six components before determining responses.

Knight’s team chose to assess the acceptance and continuance component first because it felt less daunting to them. By comparison, Buchheit’s firm tackled the governance and leadership component first.

For both Knight and Buchheit, the mechanics of the risk-assessment process involved in-person meetings and video calls, using the list of potential risks from the relevant AICPA practice aid as a guide. Discussions also focused on potential risks for each component and deciding whether the impact would represent a quality risk.

6. PRACTICE YOUR RISK-ASSESSMENT THOUGHT PROCESS

So, how should practitioners think through their risk assessment? For practice, let’s review some potential risks from the practice aid’s acceptance and continuance component, along with what conditions might impact their quality risk determination.

• Proposed fees don’t sufficiently cover time and resources to perform the engagement.

• Failure to apply acceptance procedures to clients from purchased or merged-in firms.

The first risk is likely a quality risk for many firms. But for firms that perform a substantial amount of work in highly fee-conscious industries, the quality risk may be higher, requiring a stronger set of responses. Conversely, some firms may consider the second risk highly unlikely if no intention exists to purchase other firms, meaning it may not represent a quality risk, and no response would be required.

Knight provided another example of this thinking, explaining that her team eliminated a potential risk associated with inappropriately accepting an engagement solely to fill staff capacity. “Lack of staff capacity is the bane of everybody’s existence,” Knight says. For Knight’s firm, the likelihood of excess staff capacity driving an engagement acceptance decision was extremely low, making it easy for her team to determine that it didn’t represent a quality risk.

While many firms already operate under a set of policies and procedures that can be leveraged in designing and documenting how it responds to quality risks, the challenges will be ensuring the policies and procedures fully address all quality risks and are sufficiently documented.

Quality management implementation requires thoughtful reflection about each firm’s situation. Firms that understand this, start the implementation process early, and remember the “why” behind the standards will have an easier time devising an effective quality management system.

Heather Lindquist, CPA, is the Illinois CPA Society’s assistant director of peer review and professional standards.

Can Social Media Enhance an Audit?

Research examines how social media posts can help auditors understand a company’s financial health, risks, and future performance.

BY JOSHUA HERBOLD, PH.D., CPA

analytical procedures.

IF YOU WERE WORKING, traveling, shopping, or doing pretty much anything this past summer, the mere mention of CrowdStrike or Microsoft Windows might trigger some strong emotions. As some of you may recall, on July 19, 2024, a software update from cybersecurity vendor CrowdStrike caused most Windows computers to fail, and social media’s reaction to the outage was as widespread and talked about as the outage itself.

As these failures occurred, social media filled with images of Microsoft’s infamous “blue screen of death,” along with the general sentiment of unhappiness from users. On the flip side, social media posts from MacOS and ChromeOS users were far less negative. In fact, one Chromebook user, Debanish Achom, took to X (formerly Twitter) and posted: “Today, I laugh at those who said getting a Chromebook that boots up in five seconds was a bad investment.”

Setting aside the debates over which operating system is best, there’s much we in the accounting profession can learn from the CrowdStrike event.

From the auditing side of things, for example, research from the University of Illinois Urbana-Champaign explored whether usergenerated social media posts can help inform auditors’ expectations for companies. Specifically, researchers Andrea Rozario, Ph.D., assistant professor of accountancy, and her colleagues Miklos Vasarhelyi, Ph.D. (Rutgers University), and

WHAT AUDITORS CAN LEARN FROM NONFINANCIAL INFORMATION

Nonfinancial information, such as social media posts, can help auditors understand a company’s financial health, risks, and future performance. “It’s an interesting topic because of the ongoing debate in the audit community about how new, externally produced information could potentially enhance financial statement audits,” Rozario says.

Regulatory agencies, including the Public Company Accounting Oversight Board and International Auditing and Assurance Standards Board, have also recognized the growing importance of nonfinancial information for auditors, especially in the planning and substantive testing stages of the audit. Social media posts, like those on X, LinkedIn, TikTok, or Yelp, provide real-time insights into consumers’ attitudes and behaviors and represent a specific type of nonfinancial information that could be useful for auditors. This is especially true for consumer-generated social media posts related to companies in business-to-consumer industries.

“We found that consumer posts expressing interest in products or brands (for example, a person posting on social media that they want to buy an iPhone) improve the precision of auditor-developed revenue expectations in analytical procedures,” Rozario says. “These findings show that new sources of external nonfinancial information can provide incremental value to auditors.”

Tawei (David) Wang, Ph.D., MBA (DePaul University), looked at whether consumer-generated posts can enhance the accuracy of preliminary

THE ‘WISDOM OF CROWDS’ THEORY

As motivation for their study, the researchers drew on a theory known as the “wisdom of crowds,” which says that the average prediction from a large group of people can sometimes be more accurate than predictions from individual experts due to the diverse perspectives and knowledge within the large group. Common examples of this include “guessing games,” where a large number of people are asked to provide an estimate on something, like the number of jelly beans in a jar or weight of an animal at a state fair. With guessing games, the average of all of the individual guesses is often surprisingly close to the actual amount.

If this theory holds, social media information, when properly aggregated, could provide insights about company performance. For example, if the average post about a product reflects an intent to purchase that product, then it would be reasonable for auditors to predict increased revenues for a company. On the other hand, because social media is typically not monitored or filtered, the resulting information may not be useful. For example, posts made by the companies themselves could be biased. Additionally, the increasing number of bot accounts on social sites could lead to data that doesn’t reflect the attitudes and preferences of real people.

Because data in social posts can be noisy, the researchers used measures compiled by LikeFolio, a software company that analyzes social media data to accurately predict shifts in consumer behavior. As noted by Rozario and her colleagues’ research, LikeFolio specifically “captures tweets that are posted by individual consumers that express a recent past purchase, or future purchase, and positive or negative sentiment about a product or brand.” LikeFolio uses its database of products and brands (along with keywords related to products and brands) and combines it with textmining techniques to capture posts that relate to either consumer interest or consumer sentiment about a specific product or brand. Additionally, posts about the company that owns the product or brand are excluded from the research. For example, posts about Apple’s stock or CEO would be excluded, but posts about Apple’s iPhone or Mac computer products would be included. The researchers note that “because tweets are extracted at the product or brand level and then aggregated at the company level, they can provide a more complete picture of aggregate consumer behavior.”

In other words, posts that relate to consumer interest or consumer sentiment about a product or brand reflect the “wisdom of the crowd” about that product or brand.

CONSUMER INTEREST VERSUS CONSUMER SENTIMENT

Next, the researchers used linear regression as an example of a preliminary analytical procedure that could occur in a financial statement audit. A benchmark model was used to predict revenues based on both company-specific and macroeconomic information (e.g., lagged sales, accounts receivable, and gross domestic product). Then, the researchers estimated two more regressions: one with LikeFolio’s Tweet Consumer Interest measure added to the benchmark model, and one with LikeFolio’s Tweet Consumer Sentiment measures added to the benchmark model. The study included 1,824 firm-quarter observations (where each firm-quarter represents quarterly results for one company) from 76 companies in 20 business-to-consumer industries during the years 2012-2017. Overall, the researchers found that information about consumer interest in products and brands—not consumer sentiment— improves the predictions and error-detection performance of analytical procedures of firms in most consumer-facing industries.

“The general idea is that consumer-generated postings expressing interest in products or brands can be useful in predicting company

performance, so our theory extends to other social media platforms, like Facebook and Instagram,” Rozario notes. “However, something to consider is that some social media platforms may impose restrictions on how much data can be accessed, which could make it more challenging to extract this information.”

INSIGHTS FOR CORPORATE FINANCE TEAMS

Consumer interest information may have benefits for corporate finance professionals too. “While our paper focuses on the benefits to auditors, the implications extend to management,” Rozario explains. “Consumer interest data from social media can provide management with real-time insights into product demand, brand perception, and trends in the market. This kind of information can help companies make more informed decisions about inventory management, marketing strategies, and revenue forecasting.”

Overall, Rozario and her colleagues’ research shows that social media provides real-time insights that auditors and others can leverage to keep pace with fast-changing consumer behavior. While still an emerging area, their research offers a glimpse into how innovative data sources can become useful tools for both accountants and auditors.

When asked whether information like this would have been helpful during her time as an auditor, Rozario says: “Yes! Considering the potential of external nonfinancial data to correlate with an audit client’s business activities, I believe this information would’ve been highly valuable in enhancing the risk assessment process.”

Joshua Herbold, Ph.D., CPA, is a teaching professor of accountancy and associate head in the Gies College of Business at the University of Illinois Urbana-Champaign and sits on the Illinois CPA Society Board of Directors.

Is an ESOP Right for Your Firm?

As firms look for ways to attract and retain talent, some are adding employee stock ownership plans to their succession planning toolkits. Here, experts share how a feasibility analysis can provide valuable insight into whether it’s the right choice for your firm.

BY NATALIE ROONEY

company’s value with employees: “Studies show people work harder when they know they have a stake in the company.”

AS ACCOUNTING FIRMS CONSIDER THEIR FUTURES, some are turning to employee stock ownership plans (ESOPs) as a means to recruit and retain talent. An ESOP is a defined contribution retirement plan in which employees can gain an ownership interest in part or all of the company they work for, often without using their own capital.

“Firms are looking at different ways to move away from the traditional partnership model,” says Aziz El-Tahch, managing director and ESOP & ERISA advisory practice leader at Stout. “An ESOP also offers another option for firms to consider as an alternative to private equity (PE) investment.”

These days, more firms are exploring the ESOP pathway because either senior partners are retiring, they lack the necessary talent who could take over the business, or both.

Tom DeSimone, CPA, director of Prairie Capital Advisors Inc., whose company operates as a partially owned ESOP, says an ESOP is a powerful succession planning tool, as it offers a way to share a

Of course, forming an ESOP is a significant decision for partners, and experts warn it may not be a good fit for every firm. That’s where a feasibility study comes in. A feasibility study can help gather, organize, and analyze all the relevant information needed to determine whether a firm should move forward with an ESOP transaction. More importantly, it helps determine whether an ESOP structure will yield the desired results and is in the best interest of the firm’s employees.

Importantly, a feasibility study will set a reasonable value range of the firm, which is crucial for determining whether it’s worth proceeding with an ESOP transaction.

DETERMINING OBJECTIVES AND GOALS

The first step of a feasibility study is to define the corporate and strategic objectives that’ll determine which capital structure puts the firm in a position to meet those objectives.

Blake Head, managing director and leader of BDO Capital Advisors’ ESOP advisory group division, has been on both sides of the ESOP

table—as an advisor and client—since BDO formed an ESOP in August 2023. As an ESOP advisor, he says one of the first things they do with clients is sit down with them to understand their goals.

“We want to know if the goal is about achieving fair market value, earning maximum cash at close, or rewarding employees. A transaction will be structured to achieve those goals,” he says.

DeSimone says client education is key: “Our goal is to bring them up to speed on what an ESOP is, what it might entail, and the potential impacts to the firm. ESOPs are complex and regulated, so we spend time at the front end of the analysis, making sure everyone understands what’s involved.”

Importantly, trade-offs might be necessary, Head adds: “Each stakeholder group might want a different intended outcome, so it’s important to understand everyone’s goals before moving on to the next step.”

TAKING A DEEP DIVE

Once the objectives are agreed upon, a feasibility analysis can delve into various aspects and metrics of a business to determine if becoming an ESOP makes financial sense. The results of the analysis will provide the underpinnings of a proposed structure that’ll be presented to the shareholders.

During this process, an ESOP advisor will:

• Assess historical financial results to understand the firm’s financial history.

• Prepare financial models based on the firm’s projections.

• Determine how the ESOP fits in with other qualified retirement plans in place (e.g., 401(k) plans).

• Determine the estimated ESOP benefit as a percentage of eligible compensation to employees.

• Assess debt capacity and financing options.

From this assessment, selling partners and shareholders can expect to learn information about the:

• Structure of the ESOP. This includes how it’ll be paid for, financed, and paid back over time. “ESOPs tend to have some of the transaction financed by the seller through a promissory note,” DeSimone says. “The promissory note structures how a seller will be paid over time.”

• Demands on capital. This might include other investments, like building a new facility, and would overlay the transaction over standard operating procedures to ensure the two can coexist.

• Impact on employees. “By definition, an ESOP is a retirement plan,” DeSimone explains. “The feasibility study models out a structure to deliver that benefit to employees.”

The final step of a feasibility study is performing a debt capacity analysis and determining whether restructuring needs to happen to achieve certain tax advantages. During this step, all the assumptions agreed upon with management will be layered in to determine the firm’s projected cash flow over the next 10-15 years.

DeSimone says this analysis builds a range of all the variables and creates multiple scenarios: “It helps the sellers understand how to meet their sale objectives and how to negotiate going forward.”

AN ITERATIVE PROCESS

A feasibility study will go through multiple iterations with different assumptions surrounding the ESOP until things begin to coalesce around a transaction all parties can support.

“Like designing a house, you go through several drafts of a design until you settle on how you want your house to look—an ESOP is the same way,” El-Tahch stresses. “Once you agree on the final form from the analysis, you can move forward with your blueprint.”

Additionally, Head says that every ESOP should be customized to achieve an organization’s unique goals: “No two ESOPs should look the same. We might look at four to six different scenarios as we continue to see what aspects appeal to the client and until we get approval from them. Then we have the basis for future negotiations and the execution of the ESOP.”

Even then, Head stresses it doesn’t mean the ESOP will end up exactly in that format: “It’s just a roadmap and basis for where we start negotiations—it’s the guiding light toward the end goal.”

Once the principles of the deal are determined, El-Tahch says it’s important to convey what it looks like economically for the partners, firm, shareholders, and other stakeholders: “We’ll spend as much time as firms want, showing them the economics of a PE transaction, comparing it to the status quo, and then comparing that to an ESOP.”

Generally, a feasibility analysis is done on behalf of the board of directors or officers of the firm, and while shareholders should be making the best decision for the firm itself, experts say an ESOP deal needs to be balanced, or it won’t work.

“We’re trying to provide the full picture from every party’s point of view under these models,” Head says. “Is it a good fit? Is it feasible? Does it work?”

DeSimone says that the trustees’ financial advisor will also do their own feasibility study: “They’ll want to ensure the transaction the trustees enter is fair and that the ESOP structure doesn’t put the firm into a challenging financial situation. This allows the opportunity for the ESOP to provide long-term benefits to the employees.”

DETERMINING WHAT’S FEASIBLE

While an ESOP can be viable for organizations of any size, experts warn the cost of installing a program and other complicating factors might mean it’s not a fit for everyone.

“Before you even begin a feasibility study, work with a competent advisor to discuss what you’re trying to accomplish,” Head advises. “A pre-screening and education from an advisor before you move on to a formal study is a good clearing item.”

Overall, if your firm is thinking about an ESOP, El-Tahch says there’s no downside to performing a feasibility study: “We find that firms are sometimes too quick to dismiss a feasibility study because they think an ESOP is just like any other transaction, but until you see the numbers and understand how it stacks up, you don’t really know if it’ll work for you.”

Natalie Rooney is a freelance writer based in Eagle, Colo. A former vice president of communications for the Ohio Society of CPAs, she has been writing for state CPA societies for more than 20 years.

Benchmarking Your Benefits

The

Key to Recruiting and Retaining Accounting Talent

Several trending workplace behaviors are forcing accounting firms to rethink their employee benefits packages. Here’s how firm leaders can benchmark their offerings and give employees what they truly want.

BY ANNIE MUELLER

The world of work has changed, and employers are struggling to keep up. As a result, employees are navigating growing disconnects between the cultures and benefits their employers offer and what they want in their professional and personal lives. As that disconnect grows, especially in remote and hybrid work settings, more employees are finding creative ways to cope or land themselves at a new employer.

Recent workplace trends illustrate this point: There’s “quiet vacationing,” where employees pretend to be working while they’re tending to personal things or taking an actual vacation. There’s also “coffee badging,” which is when an employee pops into the office just long enough to be seen and then goes back home to finish the rest of their workday remotely. And then there’s “polyworking,” where remote employees have a secondary job or side hustle, and some are even juggling two full-time jobs throughout the workday.

With these rising trends in mind, organizations may want to consider rethinking their employee benefits packages to assess whether they’re offering not only what their employees truly want and value but also what will retain their best and brightest.

Here, four experts share how CPA firms can benchmark their benefits to stay ahead of their competition, position themselves as an employer of choice, and create an environment and culture where employees feel valued and want to stay.

Managing Changing Employee Expectations

Randy Crabtree, CPA, co-founder of Tri-Merit Specialty Tax Professionals and “The Unique CPA” podcast host, says a lot of the trending workplace behaviors we’re seeing right now are a result of bad workplace culture: “If you’re being micromanaged, you might start sneaking around. If you’ll be punished for seeking time off or needing flexibility, you’ll look for ways around that.”

This is likely true among people stuck in firm work environments that haven’t adjusted to the reality of a post-pandemic world, where old standards and ways of doing things are still being held onto too tightly. As a result, firms commonly make attractive promises on paper to woo talent, but then those benefits are undermined by the actual workplace norms or members of management that don’t support them. In a changing labor market, firms that fall victim to these realities then tend to face higher-than-average turnover and talent gaps.

“COVID instigated shifts in the labor market that created more competition for talent,” says Lauren Winans, MBA, CEO and principal HR consultant at Next Level Benefits HR Consulting. “People have different options than they did before. Ultimately, this influences whether you as an employer are able to retain and attract employees.”

Arguably, understanding how to attract and retain talent isn’t as simple as it used to be. Carol Semrad, SPHR, SHRM-SCP, principal at HR consulting firm C. Semrad & Associates, says one of the more significant challenges facing accounting leaders today is managing the expectations of a multigenerational workforce. Currently, at many firms, there are up to five generations working side by side.

“Different generations want different benefits,” Semrad stresses. Crabtree keeps it blunt: “The next generation of people coming into the profession don’t want the same experiences as those before them.”

Susan Stutzel, CPA, business performance coach at PartnersCoach, agrees, as she’s experiencing firsthand the changes among younger

recruits: “We’re seeing generations entering the workforce asking for clear growth and development opportunities more than any generation before them, for instance. They also have a deeper human need to be connected to the work they do and to each other.”

“It’s not just about salary and benefits anymore,” she continues. “It’s about the organization itself, which can either cultivate an environment that employees value or one that adds to the dissonance of burnout the profession has been known for.”

Ultimately, while enhancing benefits and flexibility may be needed, Stutzel cautions firms to not only shine a light on their benefits packages but to also look at the bigger picture regarding their approach to managing talent. Here’s where thoughtful benchmarking comes in.

Benchmarking for the Big Picture

Benchmarking is, of course, a crucial step in building competitive benefits packages that can lead firms toward greater recruiting and retention results. However, when benchmarking is done holistically, firms should also learn more about who they are as an organization.

In other words, walking away with data isn’t the only thing to focus on—gathering data to form a well-developed and clear vision for the future of the firm is what’s important. Firm leaders should be able to use their benchmark findings to define what they currently offer as an organization and inform them on what benefits or cultural changes should be prioritized.

To get started, “You can benchmark yourself in an industry capacity, geographically, or based on specific competitors,” Winans says. “The key here is going into the benchmarking process with the intention to ensure you gather the right data and examine the right aspects of your benefits programs and organization. How you approach your data gathering will ultimately influence which recommendations you adopt from your benchmarking study.”

Additionally, feedback on your firm’s current benefits package and culture is an important part of benchmarking. Employee surveys alongside industry data can provide a more comprehensive perspective that’s needed for effective change. “Firms that stand out from the competition are engaging their people early and often,” Stutzel stresses.

During the benchmarking process, Crabtree encourages leaders to consider not only the firm and its talent as it is now but also how they could be years down the road. For instance, firms should ask themselves if they need to transition from general to specialized, and that might mean upskilling, reskilling, and continuous professional development needs to be a bigger consideration in the firm’s approach to benefits and recruiting.

“Sometimes, as an industry, we get a little too satisfied or complacent with what we have rather than looking at what we could have,” Crabtree says. “If we focus on profitability only, for instance, we miss thinking about work-life balance, how we’re affecting the people we work with, or how we’re attracting people into this profession.”

Overall, asking future-focused questions will project the vision forward and point toward the kind of employee benefits that’ll attract and retain the right people. “What a firm offers, in many cases, is going to be what makes prospective employees truly consider your firm,” Semrad says. “Maybe they can get a higher salary elsewhere, but if you’re going to provide flexible work options, help with childcare, student loan repayment, professional development, or better retirement benefits, for example, those things can be differentiators that make people think.”

Above all, Semrad advises that firms “account for attractors that have real meaning to people.”

Getting Started With Benchmarking

For most firms, it’s recommended that benchmarking become an annual process. Winans recommends starting benchmarking

around three months into each benefits cycle so employees have had time to get familiar with any new benefits or other changes that took place as a result of the prior study.

When planning the study, large firms may be able to employ their benefits provider or broker to help lead it. In this case, firm leaders should discuss the purpose and parameters to help inform the choice of data sets. Among smaller firms with fewer resources and only a handful of employees, a more granular approach to planning and completing the study may work. These firm leaders can pursue one-on-one conversations with staff, collect feedback, and use what they learn to design an improved benefits offering for the next cycle.

Regardless of firm size or demographics, certain items are going to be important to all employees: competitive salary, health insurance, and retirement plans. “These are simply the basics that every firm needs to provide,” Winans says. “But beyond these foundational benefits, leaders also need to consider their people and be open to exploring offerings that fit what they value and how they live.”

“Obviously, large firms will be able to offer more and have more variety, but smaller firms can, and should, compete in different ways,” Semrad says. “If you have really well-trained leaders who interact with their people well, they can home in on what folks need.”

Accounting for Culture

Learning people’s needs and addressing firm culture is really the point of big-picture benchmarking. For the culture assessment, there’s one primary question to ask: How are people treated?

Leaders learn what matters to their people by getting to know them. With that knowledge, they can build an organizational culture that values every person’s experience in it.

“Weak cultures are based on rules, while strong cultures are based on relationships,” Crabtree says. “Put your people first—not the business, and not even the clients.”

Semrad says, over time, the deliberate prioritization of a relational culture becomes a powerful magnet: “People who are treated like people at work talk about it. Other people who are looking for jobs pay attention, so you want to build this care for people into your culture alongside your informed benefits offering.”

Changing times require change, but that doesn’t mean firms should recklessly rush into the newest thing or panic over the latest trend. What it means is that an accurate assessment of the bigger picture of what each firm is and can become is more important than ever.

“The truth is our industry is taking a lot of heat right now. We’re facing several pipeline issues, challenges in getting and retaining talent, and battling the overall perception of who we are and what we do,” Stutzel says. “We need more firms that are truly living out their values—firms that make promises on day one and then live them out every day, in every encounter, and on every project.”

It’s not just employees or firms who benefit from this type of bigpicture benchmarking—it’s the profession itself. “Having a peoplefirst culture solves a host of problems,” Crabtree says. “The productivity and positivity we’re looking for comes when our people know they’re valued.”

Annie Mueller is the principal of Prolifica Co., where she works with clients from individuals to large financial companies and is a frequent contributor to various financial and business publications.

What Corporate Leaders Need to Know About This Emerging Role

With companies facing mounting pressure to meet sustainability reporting requirements, ESG controllers have become critical players in ensuring compliance and long-term success.

BY TERI SAYLOR

As major companies around the globe face looming mandatory environmental, social, and governance (ESG) disclosures, corporate leaders are learning they need a higher level of expertise on their teams to navigate the intricate reporting requirements. Enter the ESG controller.

“The role of the ESG controller is emerging as a vital leader in monitoring data governance in sustainability sectors,” says Jennifer Delfeld, senior manager of ESG data strategy for Medline Industries, a healthcare company headquartered in Northfield, Ill. that manufactures, distributes, and provides solutions for medical supplies. “ESG controllers are responsible for safeguarding and validating nonfinancial performance indicators, such as carbon emissions, that stakeholders expect now and in the future.”

Third Wave Leads the Charge

The rise of the ESG controller position is largely due to the evolution of sustainability practices. Reporting requirements for ESG and other sustainability metrics have evolved from a peripheral concern to a central business strategy, highlighting the need for a high-level approach to compiling data.

“We’re seeing the emergence of ESG controllers as we approach what we call the third wave of sustainability reporting,” says Anthony DeCandido, CPA, partner and co-leader of the sustainability service solutions practice at RSM US LLP, the leading provider of assurance, tax, and consulting services for the middle market.

DeCandido says the first wave of reporting was based on the corporate social responsibility (CSR) movement of the 1990s. This was largely a philanthropic endeavor in which businesses sought to showcase their acts of goodwill and community engagement, which were oftentimes detached from their core business operations. CSR activities included simple acts like donating goods and services to charities, sponsoring community events, and supporting nonprofits.

The second wave took place in the early 2000s and was marked by the transition from CSR to ESG reporting, aligning sustainability activities with overall corporate strategy. In this wave, investors and corporate boards began viewing sustainability as more than just a social and moral imperative—it became a fundamental role in risk management and value creation. This era saw ESG reporting frameworks take shape, including the Global Reporting Initiative, Sustainability Accounting Standards Board, and Task Force on Climate-Related Financial Disclosures.

Today, the third wave signals a shift from voluntary to mandatory reporting. While the European Union (EU) has led the way in ESG and sustainability regulations, the United States isn’t far behind with the Securities and Exchange Commission’s (SEC’s) proposed climate-related disclosure rules and California’s climate-related disclosure laws unfolding. These measures apply to both public and larger private companies and indicate the corporate world is entering a broader, more stringent regulatory environment.

“The pressure is mounting for companies to not only report but also demonstrate the tangible impacts of their sustainability initiatives. Therefore, ESG controllers are becoming critical players as corporations face increasing business risks if they fail to meet the requirements of these reporting frameworks,” DeCandido says.

“The first two waves were largely driven by corporate sustainability departments, and these teams sometimes don’t apply the same rigor and technical backbone in all things compliance, risk assurance, and reporting.”

Increasing Data Confidence

Since ESG data can come from many disconnected source systems, even from outside an organization, experts say it’s important for companies to understand that much of that data hasn’t been audited. As such, companies will need to build processes to ensure that reported ESG information is reliable.

In 2023, Deloitte published a survey of 3,000 professionals polled during a Deloitte Center for Controllership webcast, “Operationalizing ESG Reporting Readiness Through the Controllership Playbook.” Their responses revealed that less than half (45.7%) are confident in their organization’s ability to gather data and thoroughly report on ESG financial metrics for regulatory compliance purposes.

This is where ESG controllers can help. Deloitte advises that establishing an ESG controller role may help build more confidence and increase corporate comfort levels in reporting data. Deloitte’s survey found that 16.4% of the companies surveyed had hired an ESG controller in 2023. Three quarters of those companies (75.5%) reported a much higher level of confidence in their sustainability reporting.

“The role of an ESG controller is emerging as either an individual or a team of people,” says Dina Trainor, CPA, ESG controllership leader at Deloitte in Boston. “Establishing this role is one way to spearhead efforts and increase comfort levels in an era of regulatory uncertainty.”

What Skills Are Needed for This Role?

At the time of Deloitte’s survey, just 7.2% of the respondents reported planning to hire an ESG controller within a year. Trainor says this finding can be pointed to uncertainty.

“The fact that this role isn’t clearly defined yet can be exciting for some corporate leaders, yet daunting for others,” Trainor says. “I think some companies are enthusiastic about the opportunity to create this new controller position to suit their own specific needs, but the uncertainty of it gives others a bit of anxiety.”

She points out that the ESG controller isn’t a one-size-fits-all role for all companies, and corporate leaders will decide for themselves the ideal skill sets needed for their individual reporting models and corporate cultures.

“In general, project management skills, the ability to understand the sustainability and reporting landscape, knowing the controls, understanding the processes, and the capability of navigating through their organization to get buy-in from leadership are all important attributes of an effective ESG controller,” Trainor explains.

According to a review of corporate ESG controller positions listed on LinkedIn, the experience and skill sets companies are seeking in an ideal leader include:

• A degree in finance and accounting, with a CPA license preferred in some cases.

• Deep experience and expertise in developing processes and implementing internal controls.

• Strong understanding of ESG issues and willingness to keep up with the latest ESG guidelines and developments.

• A proven track record in managing and implementing multiple projects and consistently meeting deadlines.

• Strong business acumen, communication, presentation, and interpersonal skills.

• Ability to be a team player and thrive in an environment that deals with heavy regulation.

Overall, the ESG controller is the key in any corporation’s sustainability toolbox, says Elizabeth Sloan, CPA, managing director in the ESG sustainability services practice at Grant Thornton LLP in Chicago: “The ESG controller is someone who’s there every single day, understands how to make reporting as efficient as possible, and can develop a strategy for how the company is going to stay up to speed with requirements and work with both internal and external providers to make that reporting complete. The companies that prioritize ESG reporting now will position themselves for success in this evolving landscape.”

ESG Controllers Are the Hub of Sustainability Compliance

In considering the skills and attributes that comprise an effective ESG controller, DeCandido pictures a spinning wheel, each spoke representing a corporate department that contributes to a full sustainability report—the ESG controller is at the hub.

“An effective ESG controller will possess the cross-functional acumen to be able to liaise with professionals across the many different corporate departments, from human resources to IT and corporate communications, to investor relations and legal,” he says. “And to organize reporting teams effectively, it would be helpful to have someone with the ability to educate and inform department leaders.”

“Expertise around sustainability reporting frameworks and the information that must be reported is invaluable, but using a strong accounting professional in the ESG controller role is also tried and true,” Sloan says. “ESG controllers require the skill sets that CPAs have been demonstrating for decades because they understand the information and rigor that they need to enact standardized reporting processes and controls.”

When’s the Right Time to Hire an ESG Controller?

Ultimately, the urgency of hiring an ESG controller depends on a company’s reporting requirements. However, in this fast-moving

regulatory environment, experts say it’s never too soon to evaluate the need for an ESG controller.

The reporting landscape has already changed significantly over the last six months, Sloan notes. As the EU’s Corporate Sustainability Reporting Directive quickly approaches, U.S. entities with international subsidiaries are realizing the requirements are here to stay and are actively working to figure out how to satisfy them.

Reporting requirements are also progressing from within the U.S. in some areas. For example, at the end of September 2024, California Gov. Gavin Newsome signed Senate Bill (SB) 219, Greenhouse Gases: Climate Corporate Accountability: ClimateRelated Financial Risk.

And, although implementation of the SEC’s landmark climaterelated disclosure rules is stalled in court, the need to begin reporting is becoming crucial for business. Stakeholders are beginning to demand transparent ESG data with or without regulator support, and retail and institutional investors are increasingly interested in ESG criteria for evaluating businesses and making investment decisions.

“Dedicating resources and establishing clear processes for data control and governance are critical steps in meeting stakeholder expectations, and the need for accurate, reliable data will only grow, making the role of ESG governance essential over time,” Delfeld says.

For this reason, Delfeld says corporate leaders should count on having an ESG controller in a permanent role: “As the ESG landscape evolves, so will a company’s strategy and execution, and nonfinancial data—especially performance indicators—will continue to provide crucial insight into a company’s long-term sustainability and success.”

With all this in mind, Sloan advises corporate leaders to proactively examine their reporting requirements and assess their staffing needs on an ongoing basis. After all, by the time the need for an ESG controller becomes acute, some companies will have already fallen behind, and the talent may not be readily available.

Teri Saylor is a Raleigh, N.C.-based writer who covers a range of topics from business to lifestyles.

Claire Burke, CPA CFO and Treasurer, Dearborn Group claire_burke@mydearborngroup.com

The Cost of AI Resistance in Corporate Finance

New technology solutions are opening the door for accounting and finance professionals to become the analytical thinkers and problem-solvers of the future. Don’t get left behind.

In the accounting and finance world, the adoption of new technology is gaining speed, providing both opportunities and challenges for organizations. As we corporate finance professionals strive to drive greater efficiencies and value by implementing the tools available today, I wonder just how far we’ll be able to go with the technologies of tomorrow.

Let’s first imagine a world where certain finance functions are performed automatically, like accounts payable and receivable processing, journal entry preparation, account reconciliations, daily system balancing, and compiling spreadsheets to create financial reports. Next, imagine us accounting and finance professionals being able to focus more exclusively on value-added work, like analyzing data outputs, reviewing trends and flux analyses, and spending more time understanding the drivers impacting financial results to provide meaningful insights to business leaders. Fortunately, this is becoming less of a “what-if scenario” thanks to artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA). As a reminder:

• AI is essentially a collection of technologies that use ML and other techniques to help a business perform tasks that typically require human intelligence. It’s a computer’s ability to learn and mimic human thinking, like judgement-based decisions, reasoning, and cognition.

• ML is the use of algorithms and data to enable a computer to learn from data and make decisions or predictions without being explicitly programmed to do so.

• RPA uses software to automate repetitive production tasks to streamline business processes. It also mimics human behavior to automate consistent, routine workflows in an effort to boost productivity (think bots). It’s a great tool for processes that involve a high-transaction rate of repetitive tasks. Notably, the use of bots in the business world has become so pervasive that they’re now more frequently referred to as “digital workers.”

When you put all three of these together, you get intelligent automation, which is a scalable, cognitive automation technology that can automate processes and increase efficiency and accuracy.

REAL-WORLD CASES

While we’re not yet at a point where we can automate all accounting and finance functions, there are several workflows that are good candidates for what can be automated now. For example, accounts payable can use RPA to streamline the workflow of approving invoices, matching invoices to purchase orders, and issuing payments. Another use case is financial reporting, where RPA can automate the process of data collection, analysis, and report

generation. Many of us are still using spreadsheets for more customized financial reporting and analysis, which entails compiling data from multiple files, editing links to these files, or worse, inputting data directly in the spreadsheet from other sources. By teaching software that uses RPA to do this work, the process can be automated and completed with a few mouse clicks, cutting the time needed to perform a task from hours to minutes. It also improves the quality of the financial reports by enhancing accuracy and reducing human error. AI can also assist with account reconciliations, turning a time-consuming, rote task into a more streamlined, real-time process.

POTENTIAL CHALLENGES

While all of this fancy process automation likely sounds great, there are some challenges in making it a reality. One challenge, for example, is the resources needed to implement the technology, both the monetary and human capital kind. Not surprisingly, some technology solutions are expensive, and they take time and thorough planning to execute well. One of my favorite tools when considering an investment is a cost-benefit analysis, which allows you to lay out all the expected benefits to your organization. Ultimately, it helps justify the cost of either moving forward or not moving forward with the technology.

Also, process mapping the workflow to be automated can help you understand what challenges you’re solving, which can go a long way in ensuring you get what you need and remain within your budget and timeline. Of course, also bringing in the right people to provide input into the buildout helps mitigate missing a key element in the process.

Importantly, cybersecurity challenges can also come into play depending on the solution and your organization’s security policies. It’s best to get your IT team involved upfront when evaluating solutions to ensure they meet the security requirements of the organization.

Another challenge in implementing these technologies is the talent needed. With the changing landscape of the accounting and finance field, our talent needs are also changing. Today’s new technology solutions open the door for accounting and finance professionals to spend more time analyzing data and providing those valuable insights.

Of course, not everyone has the ability to be analytical, and this brings in another challenge. Having an analytical mindset is a difficult skill to teach if you want to upskill existing employees. There was a time when being detail-oriented, organized, and possessing strong technical accounting knowledge (or at least having an aptitude to gain this knowledge) was enough. However, today we also need folks to have critical-thinking and problem-solving abilities. The ideal accountant in this world of automation needs to be more of an accounting analyst versus a traditional staff accountant. And did I mention that they also need to be well-versed in multiple visualization tools, such as Tableau or Power BI, and capable of using them to extract accurate insights?

Admittedly, I can be dazzled by new technologies and envisioning all they can do. I’m also currently not in a position to implement everything I want since, as with any organization, there’s a prioritization process in place for corporate resources. But while there are costs to these technologies, there’s also a cost of not implementing them. In a world where organizations are striving for greater efficiencies to drive down costs and be more competitive, falling behind competitors by not addressing inefficiencies could cost your organization more in the long run.

Brian J. Blaha, CPA

The CPA Profession’s Next Era Requires Intention

Being intentional about culture, relationships, ownership structure, and technology is how we navigate the future of the CPA profession.

After more than 28 wonderful years, I made the difficult decision to step away from my position at Wipfli in September to embark on a new career journey. While I’ll undoubtedly miss my time with the firm, stepping away has afforded me valuable time and space to evaluate accounting firms and the CPA profession in a much different way. It’s allowed me to get super curious again—a true testament to the old adage that you need to give yourself space to think, ideate, doodle, and meet new people.

As I begin this new era in my life, I can’t help but relate it to the new era the profession is entering (e.g., technological advancements, evolving standards, talent and pipeline challenges, increased CPA responsibilities, etc.). During this transitional period, I’ve been fortunate to have additional time to focus on areas I believe will help firms—and the profession—successfully grow and prosper. In my opinion, it starts with setting intention on four key areas: culture and leadership, relationship building, ownership structure, and technology and artificial intelligence (AI).

CULTURE AND LEADERSHIP

Culture has always been important to me. Throughout my time at Wipfli, for example, I was a champion for what we internally called the “Wipfli Way,” which was built and refined over the years using principals from educator and author Stephen Covey, American animator and producer Walt Disney, and the Arbinger Institute. Getting to know people in an outward mindset manner where we truly care about others’ goals, challenges, needs, and desires was a critical pillar in our culture.

While maintaining, sustaining, and evolving culture can be a challenging and daunting task in this fast-paced and change-oriented world, it can’t be left up to chance. To survive, culture needs:

• A North Star: Employees need a rallying cry that roots their work in a sense of purpose.

• A passion for people: People need to matter to each other. This helps everyone fit their skills and passions to the work that needs to be done.

• A well-defined system: Culture is a living, breathing organism, and it needs to have a definition. Importantly, leaders need to constantly be committed to defining it.

• Purpose, communication, and modeled behaviors: Culture doesn’t survive on its own—it needs to be purposeful, communicated over and over again, and modeled by leaders on a daily basis.

• Continuous learning: The needs of our customers and employees are changing fast, so it requires us to ensure our cultures encourage curiosity, a desire to learn, and a space for experiential learning.

• Accountability: People perform to what’s measured. Culture markers should be defined, discussed, measured, and documented in performance reviews to ensure accountability toward the guidelines.

RELATIONSHIP BUILDING

There needs to be time on the calendar for true relationship building. Most of our interactions tend to be superficial and masked by what we need from people, typically in the moment. However, true relationships grow from below the surface level, where meaningful conversations and interactions reside. I’ve been amazed by all of the people (both past colleagues and clients) that have reached out to me to reconnect after I left Wipfli—they seem to truly care about my well-being. They’re excited to share the work they’re doing and introduce me to others they’ve met along the way.

These interactions have caused me to reflect on my own past relationship building efforts. Well, it turns out that I haven’t always done a great job at this, as my focus has usually been on the task at hand. Yet, I know that continued personal and organizational growth comes from the relationships that are made and talents that are shared. Therefore, if we can find more time for genuine and deep relationship building, even greater things can occur.

OWNERSHIP STRUCTURE

You can’t go anywhere in the accounting profession today without hearing about private equity (PE). There’s no doubt that PE investment in our industry has accelerated the discussion about the future of the profession. It’s opened corporate governance and ownership structure options and opportunities, fueled investments in transformation, created new incentive structures for partners and employees alike, and, of course, it’s brought a new wave of consolidation.

Options in ownership structures are providing for a new age in our profession that includes:

• Traditional partnerships.

• Majority-owned PE models.

• Minority-owned PE models.

• Employee stock ownership plans.

• Hybrid options.

Of course, not all alternative firm structures and strategies are the same. Firms (both large and small) must ensure the strategy aligns with the firm’s long-term vision of transformation in key areas, such as culture, strategy, growth, go-to-market plans, and operational processes and systems, to name a few. Ultimately, the focus needs to be on building value for the business and its people.

TECHNOLOGY AND AI

Technology transformation will continue to revolutionize the accounting industry. The accelerating adoption of generative AI is fostering innovation across our client service delivery processes

and platforms. Innovation is occurring through start-up entities as well through our traditional technology partners. In fact, through my own AI research, I met with a firm that automated their preparation of financial statements by leveraging public company filings and firm specific data. This decreased the time spent on financial statements from weeks to hours!

The impact of this technology is truly amazing and will help shift CPAs’ value proposition from preparation to analysis and insights. It’ll be incumbent upon us all to learn, be open to change, and leverage new business models to take advantage of these new technologies to propel the profession to new heights.

While I can’t be more bullish about the future of our profession, it’s important to recognize that we all must grab the bull by its horns in our own way. To truly take advantage of this new era in the profession, we’ll need to be intentional about our cultures and leadership, how we build deep relationships, how we create governance and ownership structures, and how we embrace technological changes.

Jon Lokhorst, CPA, CSP, PCC

Executive Leadership Coach, Your Best Leadership LLC jon@yourbestleadership.com

Coaching Is the Answer to Employee Engagement

Enhancing your coaching is key to increasing employee engagement. Here are three tips for becoming a master coach.

Gallup’s research provides a startling view of employee engagement in the workplace today. Their most recent survey revealed that only 30% of workers in the United States are engaged in their jobs, down from 33% in 2023, marking the lowest engagement level since 2013. The stark decline is cause for alarm, as employee engagement continues to drive crucial business outcomes, like productivity, profitability, customer loyalty, safety, and employee retention.

Making matters worse, workers’ engagement decline is most pronounced among individuals under age 35, those who often work exclusively from home, and in-person workers whose jobs could be done remotely.

On the brighter side, top-performing organizations have maintained engagement levels far better, with engagement scores as high as 70%. That’s because workers in these organizations are supported by coaching managers who combine flexibility with accountability, according to Gallup. Compound this with the fact that a worker’s engagement is often largely driven by their relationship with their direct boss, becoming a better coach seems like a surefire way to boost team and company performance. Here are three tips for developing essential coaching skills that’ll help increase employee engagement.

1. BE COACHABLE

To be a good coach, you need to also be coachable. Unfortunately, based on the data mining of thousands of 360-degree assessments in their database, leadership development firm Zenger-Folkman found that leaders are perceived to be less coachable as they advance and age. Yet, leaders who score in the top 20% for coachability are rated as highly effective leaders overall, four times as often as leaders who score in the bottom 20%.

To increase your coachability, Kevin D. Wilde, author of “Coachability: The Leadership Superpower,” suggests this five-point roadmap:

• Value self-improvement and growth.

• Seek feedback from others on how to improve.

• Respond openly with curiosity and understanding.

• Reflect on the message to determine if it’s useful for growth and development.

• Act on the feedback with small, sustainable steps toward improvement.

2. MASTER ESSENTIAL COACHING SKILLS

The International Coach Federation (ICF), a leading source of professional standards for coaches, is the organization I gained my professional coaching credential from. They define coaching as “partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential. The process of coaching often unlocks previously untapped sources of imagination, productivity, and leadership.”

Among the competencies in the ICF model I learned, five essential skills stand out for incorporating coaching into your leadership style:

• Engage in active listening. The U.S. Institute of Peace defines active listening as “a way of listening and responding to another person that improves mutual understanding.” Simply put, active listening involves talking less. In fact, most professional coach trainings suggest that coaches shouldn’t talk more than 20% of the time. The best listeners observe and fully focus on the other person, avoiding distractions that take their attention away. In coaching, active listening also involves listening for what’s not being said and being alert for what that communicates. Good active listeners read nonverbal communication, recognize subtle cues in the other person, and pick up on patterns and outliers in comments that provoke curiosity.

• Ask powerful questions. By asking perceptive questions, you reflect listening and understanding to the other person. These questions help clarify meaning, encourage discovery, and generate insights. They’re also effective in challenging assumptions without being argumentative. Use powerful questions to help your team members move toward their goals. For example, if they’re stuck on an important project, a simple question such as, “What is your next step?” will help them formulate a plan to move forward.

• Deliver feedback. Feedback consists of sharing information and observations about an individual’s performance to encourage their growth and development. Of course, feedback offers dual purposes—it’s for the benefit of both the individual and organization. Often, feedback is too heavily focused on one of those groups without consideration for the other side. Remember, like coaching, early-career workers crave frequent and immediate feedback. It’s part of the world they’ve grown up in. For example, these workers likely grew up playing video games, which are built on constant feedback to help frame your next move. Also, think about the last time you stayed at a hotel. You’ve likely received a survey asking for feedback on your stay.

Scott Halford, expert speaker and author of the book, “Be a Shortcut: The Secret Fast Track to Business Success,” offers these tips for giving productive feedback: create safety, be positive, be specific, be immediate, and be tough but not mean.

• Provide goal setting and action planning guidance. Coaching is forward-looking, helping the people being coached to reach their full potential. Use coaching to help your team members create specific goals that enable them to move forward. Before wrapping up your coaching conversations, ensure your team members are clear on their goals and what actionable steps they plan to take to meet them. The SMART acronym—specific, measurable, attainable, relevant, and time-based—is a great starting point for establishing outcome goals. You can also go a step further by combining outcome goals with process goals, which identify crucial steps needed to achieve the desired outcome. Some of you may recall that my winter 2023 Insight column, “2 Types of Goals You Need to Succeed in the New Year,” offers some examples for creating these goals.

• Support accountability. Like feedback, accountability serves a dual purpose, addressing both individual and organizational needs. Accountability is a tool to inspire individuals to take ownership and responsibility for their performance and impact on organizational results and outcomes.

Use accountability to promote your team members’ learning and development. Follow up on their commitments from prior coaching conversations. Affirm their progress, challenge them positively when needed, and encourage self-discipline so they

aren’t dependent on you to carry out their commitments. After all, healthy accountability involves supporting team members without letting them off the hook.

3. PRACTICE COACHING

Your best approach to developing essential coaching skills is to put them into practice. Here’s a basic framework with questions you can use to guide the flow and direction of the conversation:

• Establish the focus of your session: “What would you like to work on today?”

• Determine the goal or desired outcome: “What would you like to take away from our session?”

• Explore the situation or issue: “How would you describe this challenge and its impact on you?”

• Identify potential solutions and actions: “What are some possible approaches to this challenge?”

• Create actions and follow up on commitments: “What’s your game plan to address this situation?”

• Review key outcomes and takeaways: “What’s been most useful from our coaching conversation today?”

This simple framework is flexible enough to use in a very brief, micro-coaching session or a more extensive coaching conversation that addresses complex situations.

Like any other leadership skill, gaining a mastery of coaching requires practice, reflection, and feedback. Find a peer partner to engage in reciprocal practice with while also jumping into real-time coaching with your direct reports. After all, developing your coaching skills will only elevate your effectiveness as a leader, deepen engagement with your team, and deliver successful results for your organization.

ETHICS ENGAGED

Elizabeth Pittelkow Kittner CPA, CGMA, CITP, DTM CFO and Managing Director, Leelyn Smith LLC

ethicscpa@gmail.com ICPAS member since 2005

The Ethics of Remote and Hybrid Work

With trends like coffee badging and quiet vacationing emerging in today’s remote and hybrid workplaces, organizations should assess whether their policies promote ethical behaviors.

Managing remote and hybrid work environments provides opportunities and challenges when it comes to company culture and individual behaviors. While it is an ethical practice to have written policies to align corporate culture and individual behaviors, it is more important how leadership enforces policies and how people are encouraged to apply them to their own work.

A May 2024 Harris Poll, which surveyed 1,170 employed adults, offers some insights about out-of-office culture. One of the main findings indicates that employees are generally fine with an organization’s paid time-off (PTO) policies and care more about how the organization’s culture feels when taking the time off. For example, of the workers polled:

• 47% said they feel guilty when taking time off.

• 60% said they struggled to fully disconnect during their time off.

• 86% said they would check an email from their boss while on PTO.

• 66% said they dread the backlog of work upon returning to work.

COFFEE BADGING AND QUIET VACATIONING

When employees feel an organization’s culture does not align with their work preferences or ability to spend time away from work, some behaviors may emerge that are unique to remote and hybrid environments. Most recently, two behaviors have gained momentum: coffee badging and quiet vacationing.

Coffee badging relates to people checking into (or badging into) an office to indicate they are at the building and not meaningfully engaging in work while there. This behavior arises because people who coffee badge are often in the office for a short time and then go back to working remotely for the rest of the day. While this behavior may satisfy the requirement of being in the office, the intention of working from the office is not achieved. Importantly, coffee badging has surfaced because many people do not feel as effective in the office or do not agree with the intent of required time in the office.

With this in mind, organizations should examine the reasons they are asking people to be in the office and ensure the time is meaningful. For example, asking people to attend a meeting in the office when contributors are in person may be better than asking people to attend a meeting in person when most of the other participants are attending remotely.

Quiet vacationing means taking time off without informing colleagues or supervisors, usually with the intent of staying active enough in communication, like emails or team chats, to give the impression they are working as expected when they are not. One of the reasons quiet vacationing has emerged in the workplace is due to some employees worrying about being viewed negatively for requesting their PTO. Another reason is some employees have a hard time fully disconnecting from their work. While employees practicing this quiet vacationing

may be looking for reduced stress and burnout, it may not achieve that goal because they still need to be connected, and it may violate company time-off policies when not reported. Organizations can counter these behaviors and perceptions by talking with their employees about the importance of using their PTO effectively, encouraging them to use it, and finding reliable backups for people to be able to take disconnected time off.

WORK CULTURE CONSIDERATIONS

Overall, organizations should assess if their policies and work culture are promoting ethical workplace behaviors and determine how they can make changes to improve people’s experience in the workplace. Here are a few ideas:

• Consider the time needed for people to get their work completed. Time spent in an office or on particular tasks may not be as important as meeting deadlines and delivering reliable results. Notably, several organizations have adopted the idea of asynchronous work times, meaning people are allowed to alternate personal and professional time during the day if the work gets done (e.g., some people work their best in the early morning while others prefer to work at night). Aside from projects and meetings that require collaboration, offering freedom for when people work can help bolster employee job satisfaction, improve individual performance, and retain high performers.

• Review workloads. Some people may not be working much or may be spending copious amounts of time away from work. On the other side of the pendulum, others may be working a significant amount and not spending much time away from work. Both extremes may be damaging to both individuals and employers. When some employees do less work, it often leads to other employees taking on more work. When other employees are doing work to pick up the slack, those employees may experience burnout, suffer from lower morale, and harbor feelings of resentment. Additionally, it may lead to concerns on fairness, accountability, trust, and ethics across the organization. The employees who are not working as much are also threatening their own professional reputations and career advancement opportunities if their perception is one of low work ethic.

• Hold people accountable for the work they were hired to do. If an employee’s performance is lacking, management should address the behavior to bring change. Management should also address those who are “workaholics” to help them understand why they are working so much. For example, are they overachievers, do they need permission to delegate to others, or can the organization help them make processes more efficient?

• Offer company-wide holidays, like mental health days, in addition to traditional holidays. People may feel more empowered to disconnect when the organization is collectively taking time off together instead of requesting individual PTO. Offering these days after periods of higher stress, like quarter-end reporting deadlines, tax deadlines, closing the books, etc., can give employees a collective breath to recharge. Organizations may also consider offering time off for service days, which can be taken as a department holiday to participate. These types of time-off offerings show that the organization promotes time away from work and helping others.

Continually striving for a better workplace environment with positive individual behaviors should be part of everyone’s contributions to an organization, especially those with more influence to make changes. When we prioritize the right outcomes, workplace behaviors and cultures become healthier and tend to lead to more engaged people and successful organizations.

Tailored Team Training

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Provide your staff with the professional and personal development training they need, from the convenience of your own office.

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Schedule your Tailored Team Training session today by contacting Gayle Floresca at 312.517.7618 or florescag@icpas.org

ILLINOIS CPA SOCIETY

Art Kuesel President, Kuesel Consulting art@kueselconsulting.com

Want a 40-Hour Tax Firm? Your Wish Is My Command

Wishing away another busy tax season is easier than you think. Here are five strategies to make it a reality for your firm.

If you had one wish related to your public accounting career, what would it be? I bet for many of you that one wish would be eliminating the busy season.

Imagine, with just the wave of a magic wand, you’re no longer subject to the steep peaks and valleys in hours that have traditionally accompanied our profession. Instead, you’re able to successfully complete your work before looming compliance deadlines, all within the mythical 40-hour workweek. For illustrative purposes, we’ll call this fairytale wish the “40-hour firm.”

It probably sounds too good to be true, right? Well, what if I told you it doesn’t have to be? In fact, it’s probably not as hard to create as you may think.

To make your 40-hour firm wish come true, consider these five strategies.

1. BE JUDICIOUS IN ACCEPTING ONLY A REASONABLE VOLUME OF CLIENTS

The “bigger is better” mindset tells us that every opportunity for growth should be taken in order to earn greater rewards. While that may be true in some cases, in our talentconstrained market, that’s not realistic. Unfortunately, in many cases, growth often results in more work for existing team members.

Therefore, if you’re building a 40-hour firm, you’d eventually have to reach a limit on how many clients you could reasonably serve. That means, from time to time, you’d simply be “sold out” and would need to establish a waiting list.

While this way of doing business may seem like a negative (i.e., less business), there’s an upside—the ability to attract more talent to your firm. After all, who doesn’t want to work at a 40-hour firm? Remember, as your talent pool grows, you’ll likely be able to reduce that waiting list and bring in more clients over time.

2. SET THE BAR HIGH ON CLIENT QUALITY

When you keep a limited client roster, you should theoretically only have “good” clients. To me, good clients are those who can pay what I ask for, participate in the collaborative effort of getting the job done, and respect my team and time. Therefore, you need to set your client criteria carefully and enforce it.

Importantly, what may initially seem like a good client relationship may not ultimately be what you experience as you work with them. Also, as your firm evolves, so does your definition of what a good client is. So, be open-minded and assess your client base annually.

Further, you should assess what you’re charging your clients. Consider the basic laws of supply and demand: When demand exceeds supply, the price increases. That said, if you find yourself with excess demand with limited or fixed supply (i.e., hours), this means your prices should also increase.

3. HOLD CLIENTS TO THEIR SCHEDULES

Why does your doctor ask you to make an appointment? One reason is that the doctor has some general expectation of how many patients will be coming in on a particular day. It also creates a better patient experience by ensuring the doctor can see them at their scheduled time.

This should also be replicated, to some extent, with the 40-hour firm. Consider this scheduling approach for guidance:

• Break the year up into 52 one-week increments and schedule your clients by week. Only accept as many appointments as staff hours are available to serve them.

• When one week fills up, schedule clients to the next available week. Remember, high-demand weeks will fill up first, so you might have to push some clients to less desirable weeks (consider adjusting your prices for high-demand weeks, as you may be able to extract a premium).

• If someone misses their appointment, move them to the next available one. If there are no more appointments available, move them to the back of the line.

4. LEVERAGE TECHNOLOGY TO THE FULLEST EXTENT

Technology tools are more than plentiful in our profession today. While it can seem overwhelming at times, the 40-hour firm needs to be a technology-forward practice. So, set a goal of evaluating and testing several new technologies per year. You should evaluate these tools for their cost benefit, ability to create efficiencies, and positive effect on staff and client experiences, among others.

Importantly, there can be no sacred cows at a 40-hour firm. As technology evolves, you must also consider replacing your current tools and changing processes to adapt.

5. CONSIDER OUTSOURCING AND OFFSHORING

A 40-hour firm needs to consider outsourcing and offshoring. It’s not about embracing these strategies as a cost-savings measure, but rather a means to expand capacity without increasing hours. All practices at the firm should be encouraged (if not required) to leverage these services to benefit the staff and client experience.

Bottom line, if you want to eliminate the cycle of hectic and stressful busy seasons and build the 40-hour firm of your dreams, you can probably make it happen easier than you think—no magic wands or genies necessary.

EVOLVING ACCOUNTANT

Andrea Wright, CPA Partner, Johnson Lambert LLP

awright@JohnsonLambert.com

ICPAS member since 2010

6 Strategies for Creating Employee Benefits That Stand Out

By looking beyond traditional compensation models, accounting firms can create an employee benefits package that cultivates a loyal, engaged, and healthy workforce.

In an increasingly competitive talent market, a firm’s benefits package can make or break its recruitment efforts. As today’s workforce continues to evolve, so do employee expectations, and the role of employee benefits has taken on new significance in a candidate’s job search. According to recent data from Indeed’s Hiring Lab, more than 59% of the postings on the job search engine’s website now advertise at least one employerprovided benefit, up from less than 40% in early 2020.

Employers who understand this shift are leading the charge, not just in pay, but in creating comprehensive benefits that offer far more than traditional health, retirement, and leave packages and instead reflect a more holistic view of employee well-being.

Here are six employee benefit strategies that are helping firms attract and retain top-tier accounting talent.

1. THINKING OUTSIDE THE BOX

As candidates place greater emphasis on the benefits component of total compensation, firms who want to stand out are thinking outside the box, offering unique and uncommon benefits. For instance, employers offering student loan assistance, caregiving resources, and grandparent leave are finding themselves more attractive to job seekers. It’s been reported that companies that offer more innovative benefits also enjoy lower turnover rates and higher profit margins, demonstrating the financial and cultural advantages of leading with a strong benefits package.

2. MEETING THE NEEDS OF A MULTIGENERATIONAL WORKFORCE

Employers are also adapting their benefits strategies to meet the unique needs of different generations. By offering more personalized and customizable options to different age groups, firms can attract specific talent and cultivate a workforce that feels supported on multiple levels.

For example, millennials, now well into their careers, are seeking benefits that support family planning and work-life balance (e.g., parental leave, student loan repayment programs, and financial planning resources). Meanwhile, Gen Z is redefining the workplace with a focus on diversity, equity, and inclusion, as well as alternative health benefits. This younger

generation values benefits that support a holistic well-being, including mental health services, nutrition programs, and even naturopathic medicine.

3. PRIORITIZING HEALTH AND WELLNESS

A healthy workforce is a productive workforce, and companies are increasingly aware of this reality. As such, there’s a growing emphasis on maintaining employees’ health through a combination of chronic condition management, mental health resources, and wellness incentives. These initiatives go beyond basic healthcare, reflecting a broader understanding of employee needs. From wellness stipends to mental health programs and even naturopathic treatments, employers are responding to the rising demand for benefits that support physical, mental, and emotional well-being. In addition, benefits that support sleep health and alternative therapies are on the rise, which are especially valued among younger employees. These offerings have also become a popular way to encourage healthy habits, including fitness, nutrition, and mindfulness.

4. PROVIDING VOLUNTARY BENEFITS FOR PERSONAL AND FINANCIAL SECURITY

Offering a diverse array of voluntary benefits has also become a key differentiator for firms looking to stand out. These include services like ID theft protection, legal assistance, and discount purchase programs—benefits that are particularly attractive to a well-paid, financially savvy workforce.

Additionally, companies are strengthening their offerings in life and disability insurance, sometimes extending voluntary individual disability options to enhance existing coverage. These moves align with employees’ growing interest in securing their financial future through employer-sponsored benefits.

5. RETHINKING RETIREMENT PLANNING

Retirement savings remain a cornerstone of benefits packages, with most employers offering 401(k) plans, often with competitive employer matches. According to SHRM’s 2024 Employee Benefits Survey, 6.6% and 6.5% were the average employer matches on traditional 401(k) and Roth 401(k) contributions in 2024, respectively. While the prevalence of these plans has stabilized, there’s a clear shift in expectations of them as employees are increasingly looking for flexibility and security in their retirement planning. For example, more companies are offering Roth 401(k) options, which is up 10 percentage points since 2020.

However, while employers continue to provide formal retirement savings programs, fewer are offering retirement planning or investment advice. This decline points to an opportunity for firms to rethink their financial wellness offerings, potentially enhancing their benefits packages with educational resources that guide employees toward long-term financial success.

6. FOCUSING ON FLEXIBILITY AND FAMILY CARE BENEFITS

Workplace flexibility is no longer a perk—it’s an expectation. Employees are increasingly seeking work arrangements that allow them to balance their personal and professional lives, and employers who meet these demands are seeing improved retention and employee satisfaction. Notably, SHRM’s survey finds 70% of employers are prioritizing flexible work policies for the third consecutive year, with 63% offering hybrid work models.

Beyond flexibility, family care benefits are gaining traction as companies recognize their role in supporting employees’ work-life balance. Companies are also introducing innovative benefits like grandparent leave, caregiving resources, and other family-focused offerings that go beyond the traditional Family and Medical Leave Act requirements.

As the world of work continues to evolve, so too will the expectations of employees. Benefits have become more than a mere checkbox for job seekers; they’re a reflection of a firm’s values and its commitment to supporting its employees—not just in their professional roles, but in their personal lives as well. Firms who anticipate and meet these changing needs will find themselves wellpositioned to succeed in this highly competitive talent market.

This column was co-authored with Natalie Boren, human resources director at Johnson Lambert LLP.

Mark J. Gilbert, CPA/PFS, MBA President, Reason Financial Advisors

mgilbert@reasonfinancial.com

ICPAS member since 1982 FINANCIALLY SPEAKING

The Latest Financial Planning Trends for High-Net-Worth Clients

Here are several trends personal financial planners should consider as they serve high-net-worth clients in 2025.

The death of the small independent financial advisory practice, much like the small independent accounting practice, has been predicted for many years. In fact, I recall a ground-breaking report concluding that outcome the year I began my practice in 1997. Yet, here I am, still standing decades later, along with many other financial planning colleagues.

I’m convinced that a big reason for my longevity in this space has been my focus on highnet-worth individuals (i.e., a client with more than $1 million in liquid assets). I’m often reminded of this around year-end when I’m planning for the upcoming year. Of course, the beginning of a new year is also a good time to look at the latest trends shaping my clients’ future investments and spending, and how I advise them—I recommend you do the same.

A DESIRE FOR MORE HOLISTIC FINANCIAL ADVICE

Once upon a time, before the advent of affordable personal computers and intelligently written software, clients sought financial advisors for their specialized knowledge in investments, stock picking, asset allocation, and the like. The advisor relationship focused almost exclusively on investment selection and returns. However, soon after widespread use of the internet, the ability of investors to make reasonably intelligent investment decisions on their own increased—especially with the use of low-cost index mutual funds and exchange-traded funds. Today, the use of robo-advisers (digital platforms which use algorithms and client-submitted data to manage portfolios) are starting to fit the bill for more clients looking for an investment-only relationship with a financial professional—not to mention at a meaningfully lower cost.

As a result, clients have begun to demand more non-investment services from their financial advisors. This practice starts with developing a personalized financial plan—one that reflects the client’s financial and lifestyle goals—and continues with advising on aspects like insurance planning, estate planning, tax planning, college education funding, and charitable giving, among other topics.

Advisors should embrace this desire of their high-net-worth clients to become better informed about planning in these non-investment-related areas of their financial lives. For example, non-CPA advisors could consider partnering with a CPA to provide clients with planning in their areas of expertise, or vice versa.

USING MODELS TO IMPROVE PORTFOLIO PERFORMANCE

Stemming from clients’ growing demands for more holistic financial advice—which by nature is generally quite personalized and more difficult to automate—is the trend of using models to improve investment portfolio recommendations and performance. Most advisors can

identify as few as four, and perhaps as many as eight, asset allocation models (e.g., equities, fixed income, alternatives, or cash models). Usually, one of these models corresponds to a client’s risk tolerance and target investment return requirements. Simply put, it doesn’t matter if the client invests $1 million or $5 million—the same models will be used. Of course, exceptions may be made to introduce an asset class, like private equity, especially in larger portfolios.

Notably, the ongoing use of models can be automated—possibly resulting in better performance—or even be outsourced to a third party. As a result, this frees up advisors’ time to provide the holistic planning advice their high-net-worth clients now desire.

IMPLEMENTING AI

It would almost be a dereliction of duty to prepare a trends piece like this and fail to discuss artificial intelligence (AI). Indeed, the continuous improvements in this new technology have fundamentally altered the advisor-client relationship and will certainly continue to do so over time.

As defined by Alden Investment Group, AI is the ability of machines or computer systems to perform tasks that typically require human intelligence, such as learning, understanding written and spoken language, recognizing patterns, solving problems, making decisions, interpreting images and videos, generating new content, and optimizing processes.

As you can see, that’s a lot it can do, and many financial advisors are taking note and looking to make gains with this new technology in 2025. In fact, according to a survey from Accenture, 97% of financial advisors believe that AI can help grow their book of business by more than 20%. Additionally, 92% of financial advisors have taken steps to implement AI, and 83% believe AI will directly and significantly impact their client relationships over the next 18 months.

Here are some enhancements where I believe AI can greatly benefit financial advisors in 2025:

• Transcribing meetings: AI can transcribe client meetings in real time using speech recognition technology to generate accurate meeting records. This should free up time for advisors to listen more intently and participate in a more engaging manner with their clients.

• Automating document management: AI can convert scanned documents into searchable digital files through optical character recognition technology. Further, AI can analyze the documents and appropriately categorize them for later use.

• Streamlining routine communications: When added to an advisor’s website, AI chatbots can automate several functions and tasks, including responding to simple questions about the firm’s services, offering general financial planning advice, scheduling meetings, and directing visitors to other affiliated or relevant resources.

• Improving portfolio performance: AI excels at gathering and analyzing large amounts of data quickly. This can help financial advisors make better investment decisions, rebalance assets to target allocations more precisely, predict portfolio performance to a greater degree, and improve tax-loss harvesting.

These are just some of the latest trends in financial planning that advisors should be accounting for. Overall, getting a head start on planning, taking time to research and implement these trends, and speaking with other experts will be key in maintaining and nurturing your relationship as a trusted advisor to your high-net-worth clients in 2025.

Keith Staats, JD

Executive Director, Illinois Chamber of Commerce Tax Institute

kstaats@ilchamber.org

ICPAS member since 2001

Another Attempt at ‘Leveling’ Illinois’ Sales Tax

Despite the Illinois General Assembly’s latest legislative move to further level the playing field for out-of-state retailers, problems persist.

In the wake of the U.S. Supreme Court’s 2019 decision in South Dakota v. Wayfair, the Illinois General Assembly passed the Leveling the Playing Field for Illinois Retail Act, which was enacted as Public Act (P.A.) 101-0031. The legislation was designed to “level the playing field” between brick-and-mortar retailers and online retailers, particularly out-of-state retailers.

Following its enactment, litigation arose to challenge the law’s constitutionality. As a result, the Illinois Department of Revenue (IDOR) sought to correct and fix one of the issues being challenged, which was enacted as P.A. 103-983 during the spring 2024 legislative session and will become effective Jan. 1, 2025.

While I have my own opinions as to the overall constitutionality of the Leveling the Playing Field law, I’ll save that discussion for another day. For now, I’ll decode whether P.A. 103-983 may be successful at mitigating some of the original law’s challenges—hint, don’t hold your breath.

SOME HISTORY

Let’s first look at some history. Prior to the effective date of P.A. 103-983, there are two types of out-of-state sellers with Illinois nexus, both with differing sales tax treatments. For ease, I’ll be referring to these groups as “physical presence” and “Wayfair nexus” sellers.

• Physical Presence Sellers: These out-of-state sellers make sales from outside of Illinois but have some physical presence in Illinois. For example, these sellers may send salespeople into Illinois, or have a location in Illinois, but do their “selling” from outside of Illinois.

• Wayfair Nexus Sellers: These out-of-state sellers don’t have a physical presence in Illinois. They have economic nexus by virtue of making sales that cumulatively exceed $100,000 or 200 or more sales transactions in Illinois on an annual basis. The Wayfair decision ended the requirement of a physical presence for sales tax nexus, ruling that economic presence in a state by virtue of sales dollar volume or the number of sales transactions in a state could be sufficient to establish sales tax nexus with a state. (IDOR has detailed rules as to how these calculations are made.)

Following the Wayfair decision, Illinois and other states that have a sales tax amended their laws to establish requirements for nexus based on an economic presence. Illinois’ Leveling

the Playing Field law provides that an out-of-state seller with Wayfair nexus is required to charge tax to its Illinois customers. Specifically, the law provides that an out-of-state seller must charge the combined state and local Retailers’ Occupation Taxes (ROTs) in effect at the purchaser’s location.

For example, if I buy running shoes on a website of a seller located in San Diego who has Wayfair nexus with Illinois, and my shoes are delivered to my house in Westmont, Ill., I’ll be charged tax at the combined state and local tax rate in effect in Westmont. Similarly, if I decide it’s more convenient to have the shoes delivered to my office in Chicago, I’ll be charged tax at the combined state and local ROT in effect in Chicago.

However, the sales tax calculation is handled differently for an outof-state seller that has a physical presence in Illinois. For example, if I buy the same pair of running shoes from a company that has a retail location in Illinois but makes their internet sales from San Diego and ships the shoes to me from a warehouse outside of Illinois, there’s a different tax result. In this instance, under the law prior to the effective date of P.A. 103-983, I’ll only be charged the 6.25% Illinois Use Tax, not the combined state and local ROT rate in effect at my location.

A FLAW IN THE EXISTING LEVELING THE PLAYING FIELD LAW

The amount of tax charged for identical items varies by whether an out-of-state seller has a physical presence in Illinois. Article IX, Section 2 of the Illinois Constitution is known as the Uniformity Clause. It provides, “[I]n any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly. Exemptions, deductions, credits, refunds, and other allowances shall be reasonable.”

In my opinion, it’s difficult to argue that there’s a reasonable basis under the Uniformity Clause of the Illinois Constitution for taxing out-of-state sellers differently depending on whether they have physical presence or Wayfair nexus. Apparently, IDOR also saw this as a problem because P.A. 103-983 eliminated this disparity. (I’ve heard that IDOR recently settled at least one case at the Tax Tribunal that raised this constitutional challenge.)

THE P.A. 103-983 ‘FIX’

P.A. 103-983 eliminates the different tax treatment of sellers with physical presence or Wayfair nexus. Once in effect, retailers with physical presence nexus making sales and shipping the product from out of state will be required to charge the combined state and local ROT rate in effect at the purchaser’s location.

PROBLEMS REMAIN WITH THE LEVELING PLAYING FIELD LAW

So, has a second attempt to level the sales tax field worked? Overall, I’d say no. Despite the fix enacted by P.A. 103-983, there are still problems that exist because of the differing sourcing requirements for Illinois brick-and-mortar sellers and out-of-state sellers, among other reasons. Brick-and-mortar sellers are required to use “origin” sourcing—the combined state and local tax rate— but that’s a discussion for another day.

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Diane L. Yetter, CPA

Despite her early skeptics, this leading sales tax expert has proven she deserves a seat at any table. Now she wants to help other women do the same.

BY AMY SANCHEZ

“You don’t have what it takes.” “You’re going to fail.” “You’ll be back begging for a job.” These are the words from skeptics that Diane L. Yetter, CPA, continuously runs through her head to fuel her almost 40-year career. Today, she gets the last laugh, as she’s become one of the most highly sought sales and use tax experts in the profession.

Much of Yetter’s success stems from the challenging lessons she faced early on in her career: “When I graduated college, I didn’t have a lot of opportunities presented to me—the economy was a little tight, and I didn’t have a job. So, I moved back home, which didn’t feel good at all. Thankfully, my dad worked for a company that allowed employees’ kids to intern for two summers. Ironically, I was placed in the tax department.”

While some people may stereotype sales tax work as boring, uncreative, and rigid, Yetter didn’t see it that way: “I think people often view sales tax as a clerical job—meaning, it doesn’t take a whole lot of expertise or experience. People generally don’t understand how complicated and interesting it can be.”

During her internship, Yetter found ways to use her curiosity for solving problems: “We had to send out regular tax exemption certificate renewal notices, but it was a very time-consuming and manual process at that time. So, I created an automated system using Lotus 1-2-3 (the precursor to Excel) to track expirations and renewals and generate letters. I still had to manually print and mail them, but it still saved a ton of time.”

These inventive, technical skills eventually landed Yetter at the Kansas Department of Revenue, Quaker Oats, and Arthur Andersen, where she continued creating automated programs that streamlined processes.

It was during her time at Arthur Andersen that she came to a critical crossroad. Sales tax software company Vertex partnered with the firm to help train their customers on their sales tax software—Yetter became the firm’s lead trainer. In doing so, she saw a great business opportunity: “I went to my partner and said, ‘I think this is where we need to go—sales tax automation. Let me take the next couple of months and figure out what this new service line would be, build it out, and then lead it.’ He said no—he didn’t think there was a future in it.”

That “no” motivated Yetter to finally set out on her own. Since 1996, Yetter has served as president and founder of Yetter Consulting Services Inc. and the Sales Tax Institute. “I knew it was risky at the time. The only saving grace I could fall back on was that Vertex

offered me a contract job for a year to teach for them while I worked on building my consulting practice,” Yetter says. “It was low pay, but it covered my basic living expenses. And because I was on the road two weeks per month, some weeks I ate really well (because my meals were being reimbursed), and other weeks I was eating hot dogs and macaroni.”

Yetter’s practice continued to grow, but a breakthrough came in the wake of tax controversy. Following the decision of the U.S. Supreme Court case of South Dakota v. Wayfair, Yetter’s consulting practice quickly became a prominent voice for small businesses. “We knew this was going to be the single greatest thing that was going to impact the people we worked with every day,” she recalls. “So, we just really leaned into that.”

By 2022, Yetter’s expertise on the case and its impact on small business led to her being asked to testify before the Senate Committee on Finance: “I came in as a multistate tax expert and someone who could represent a lot of different businesses.” She was also asked back to testify before the Subcommittee on Fiscal Responsibility and Economic Growth in September 2024.

Today, Yetter undoubtedly represents a lot of different businesses, but her passion also lies in representing women in accounting. For example, her social media series, “Women to Watch in Sales Tax,” has promoted almost 80 women sales tax professionals, allowing them to share their accomplishments and advice for other women working in sales tax. Yetter’s continuous advocacy for the advancement of women led her, in part, to being recognized with the Illinois CPA Society’s 2024 Women to Watch Award in the Experienced Leader category.

“I’ve been in this industry long enough to make my voice heard— and I make sure it’s loud and clear,” she quips. “I’m known for making comments and raising questions, but I wasn’t always that way. Early in my career, I had plenty of doubters and skeptics trying to keep me in place. I never spoke up at meetings. I never felt like I had standing.” Those early words kept ringing in her head.

Yetter recalls when that feeling began to fade. “I was attending a board meeting for the advisory board of the University of Kansas School of Business. That year, I had given a very weird donation amount so I could tell which one was mine—I was the second highest donor to the School of Business on the list. That opened my mind. It helped me realize I had every right to speak up. That’s what I want to help more women realize—like me, they can claim their seat at any table too.”

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Passing the CPA Exam Teaches You More Than Accounting

While staying disciplined and committed to studying is paramount to successfully passing the CPA exam, it’s the support from those around you that matters the most.

By Cal B. Granite, CPA Assurance Associate, RSM US LLP

GOING THROUGH 700 pages of notes, studying for 500 hours, and answering 7,000 multiple-choice questions is what it took for me to pass all four sections of the CPA exam. For 17 weeks, I put myself first, watched hours of lecture videos, read and reread textbooks, and completed several practice exams. Needless to say, one could argue that the pursuit of the CPA credential is inherently a selfish decision.

During that unique and challenging time, those around me, including my girlfriend, family, and close friends, all accommodated my intense schedule and needs as I studied—and I’ll always be grateful for their support. Frankly, it wasn’t necessarily important to me to score highly on the CPA exam. I simply wanted to give myself the best chance possible to pass each test on my first attempt. That way, the amount of time and resources I spent studying, and the sacrifices those close to me made, didn’t go to waste. So, as you can imagine, when I did earn one of the top scores in the state on the CPA exam, I was elated and proud—not just for me, but for those around me who validated their continuous investment into my life and education.

Of course, one of those people who was along with me for most of my CPA journey was my grandpa. In fact, he’s the reason why receiving the top-ranking Gold Medal among the Illinois CPA Society’s Excel Award’s this year will always hold a special place in my heart. Yes, this distinction shows that all of my hard work didn’t

go unnoticed, but it was the last thing I got to tell my grandpa about before he unexpectedly passed away. While I couldn’t celebrate the achievement in person with him before his passing, I’m so glad I was able to at least share the award news with him and make him proud.

Therefore, my advice to aspiring CPAs wouldn’t be to strictly practice a certain number of questions, type out pages and pages of notes, or prepare extensively for a specific number of hours. Instead, I advise CPA candidates to set test dates that work with their schedules, create corresponding study plans, stick to the plans they create, and more importantly, if possible, tap into the loving support system of friends and family to carry them through the journey. By doing so, you’ll not only learn the content of the CPA exam, but you’ll also learn some important life lessons along the way, which is just as important.

Throughout my pursuit of the CPA credential, the education I obtained about audit, tax, business, and financial accounting has benefitted me tremendously as I’ve have started my career in public accounting—and it’ll continue to aid me throughout my professional life. More importantly, the pursuit of the CPA credential has taught me so much more than accounting or the educational foundations needed for a successful career—it’s helped me develop a greater appreciation for those close to me who supported me and reinforced the importance of cherishing quality time spent with loved ones.