Volume 37, Issue 07 | INSIDE Public Accounting Monthly

AI OMG:

Firms Scramble to Create Private ChatGPT Platforms as Liability Concerns Mount

BY: CHRIS CAMARA

With users of OpenAI’s ChatGPT surpassing 100 million in just three months, many accounting firms are coming to the realization that staff and clients may already be using it without their knowledge.

More than 43% of professionals use AI tools, including ChatGPT, to help with tasks at work, according to a survey conducted by the professional social network Fishbowl. And 70% of those professionals are using AI without their bosses knowing. Clients, meanwhile, may be submitting AI-created source documents to their accountants. “Right now, unfortunately, it’s a little bit of the Wild, Wild West,” says technology expert Amanda Wilkie of Boomer Consulting.

INSIDE Public Accounting Monthly recently asked Wilkie,

TaxBuzz CEO Lee Reams II, and Raissa Evans, senior marketing manager at Houston-based Weaver (FY23 net revenue of $254.7 million) about the risks involved in using ChatGPT and ways to get ahead of — or catch up with — the technology that seems to evolve and grow in popularity by the week.

KEEPING DATA IN-HOUSE

Data breaches or unauthorized access could compromise confidentiality, says Evans. “If staff ask ChatGPT to generate content based on internal, proprietary data, it could plagiarize you, use your content to train its own language model or show it to a human reviewer. This only gets more complex with third-party risk as APIs (application program interfaces) integrate language models.”

As concerns about inputting internal data on an open platform continue to mount, firm leaders are moving to find customized solutions that allow staff to type in prompts and get answers based on their firm’s data alone.

Many firms are looking to create in-house ChatGPT capabilities through Azure, Microsoft’s cloud-based infrastructure, but there’s a waiting list, Wilkie says. Firms are also queued up to access ChatGPT-4, a paid version released in March that is trained on more recent data and can process eight times as many words as its predecessor.

Meanwhile, most firms are only just beginning to create policies on generative AI, the technology that powers the ChatGPT chatbot.

“There’s a lot of risk around generative AI, but we’re not trying to quash it to manage the risk,” Wilkie says of the accounting profession’s general reaction. “We’re actually trying to figure out how we can harness it, and I think one of the reasons is because we’re going to have to.”

At TaxBuzz, an online community for tax professionals, leaders are incorporating ChatGPT into their tech platform, but first Reams performed a test. He fed eight tax questions from their online technical forums into ChatGPT to analyze the accuracy of its output. “It wrote incredible answers, but all eight of them were wrong.” The next step was to train ChatGPT using thousands of articles, blogs, how-to pieces, tax planning advice and tax guides. From there, tax experts will review all the answers, build an FAQ library and incorporate it into the TaxBuzz training module.

MITIGATING RISKS

Internal experts should analyze everything ChatGPT produces, Reams and Wilkie say. Reams compares ChatGPT to CliffsNotes, while Wilkie likens it to Wikipedia. “You can’t just take what comes out of it,” she says. “You have to make sure that you do your research. This is a great starter, but it shouldn’t be authoritative. Firms need to get ahead of it, and one of their few options right now, in addition to exploring Azure Open AI, is training and education.”

Just as firms became sophisticated on training staff to avoid email phishing scams and other cyber threats–knowing the biggest risk to be the person at the keyboard — they’re in the early stages of offering education on how, and how not, to use generative AI applications. “With ChatGPT exploding, almost overnight we were all behind,” Wilkie notes.

A NEW FRONTIER IN RISK ASSESSMENT: CHATGPT AND ITS AI COUSINS

While some firms are banning the use of ChatGPT, others are creating their own policies and procedures, and others aren’t quite sure what to do with it at all.

ChatGPT can compose emails, author blog posts, create Excel macros and even pass the CPA exam. But the powerful natural language processing tool and other AI-driven technologies can present liability risks for CPA firms, say experts from Aon, the AICPA member insurance program, even as best practices are in early stages and much is still unknown.

“Firms are all over the map in terms of where they are on that, so there will be a lot more to come in a short period of time,” says Ken Kumor, Aon senior vice president.

CPA.com, the technology subsidiary of the AICPA, is planning to offer tools, webinars and training events to get practitioners more familiar with generative AI, including information on how it works within tax, audit, client advisory services, finance, practice management and marketing. Training will be offered at the Digital CPA Conference 2023 in December and an AI Symposium in January 2024.

It is clear that there is a critical need to ensure privacy and security when using generative AI. Some firms are requiring, at a minimum, that users attest to a number of items, such as no disclosure of proprietary firm information, no use of client-identifying information and verification of everything AI produces. “If AI gets it wrong, you’re still going to be held accountable to your clients,” says Nicole Graham, attorney and risk consultant for the AICPA member insurance program.

“The No. 1 takeaway right now I would say is education and training,” she continues. “Yes, there’s a risk involved, but look at it as an opportunity. How you can mitigate the risk — so you have that tradeoff — is to start training and educating your staff right away.”

ChatGPT is so easy to use that the promise of time savings may be irresistible. “There are going to be some people who cut corners, and that’s just the way it

is,” Reams says. And with the profession facing a raft of partner retirements and major recruitment challenges, generative AI may make their work lives a bit easier.

Reams says that as the next data sets are more stable, accuracy will improve. “A year from now, technology will get better and better, and the pros will find that they’re going to free up time for advisory work.” 

Here’s how firms are using generative AI today:

TO CREATE BASIC MARKETING CONTENT.

ChatGPT can create images, write social media posts, generate blog post headlines or author conference session descriptions, and it can streamline the research, editing and writing process.

TO SUMMARIZE INFORMATION IN PDFS. Users can input a large PDF of legislation or meeting minutes and ask for summaries or highlights of pertinent information.

TO CRAFT CLIENT EMAILS.

A user can input technical data on a tax change and prompt ChatGPT to describe it in terms a high school student would understand.

TO GET GUIDANCE ON EXCEL FORMULAS.

ChatGPT can provide step-by-step instructions and explanations to improve one’s Excel skills.

TO SPEED UP RESEARCH.

ChatCPA is a bot trained by CPAs to answer questions through the lens of a CPA.

As a Wealth Management Firm Buys a Top CPA Firm, What Comes Next is Anyone’s Guess

BY: CHRIS CAMARA

It sounds preposterous, says consultant Allan Koltin, but why wouldn’t Microsoft, Amazon, a big family office group, sovereign wealth fund or technology platform be interested in buying an accounting firm?

That possibility became more realistic last month when Overland Park, Kan.-based Creative Planning announced it would acquire IPA 100 firm BerganKDV. While it’s not unusual for CPA firms to buy wealth management companies, it’s never been the other way around. And the deal is a big one: The St. Cloud, Minn.-based firm reported FY22 net revenue of $100.3 million, with 600+ employees and nine offices.

It was just two years ago when private equity firm TowerBrook Capital Partners invested in New Yorkbased top-20 firm EisnerAmper, the first transaction of its kind, and the assumption has been that more and bigger private equity firms would enter the profession.

Now, different potential buyers are popping up, and the deals may begin accelerating, Koltin says.

BerganKDV CEO Dave Hinnenkamp says Apple or Google could certainly enter the accounting space if it made business sense. In this case, the acquisition by Creative Planning means a better way to serve clients. He notes that CPA firms are deeply involved in a client’s business but not always the client’s personal goals and aspirations, as wealth management firms are.

Hinnenkamp wants to bring it all together. He foresees serving clients much like the Mayo Clinic serves patients, with one coordinator managing care from various specialists to solve problems efficiently. “The model makes so much sense, but it’s so

Dave Hinnenkamp

difficult to execute. I think lots of companies have tried it, and I think this is the model that is going to work.”

He adds, “Anyone can be different, but it takes a lot to be better. Being different is easy; being better is difficult.”

AN UNLIKELY START TO THE BERGAN/ CREATIVE PLANNING COURTSHIP

Hinnenkamp says the process began in an unusual way. In January of 2022, he asked Koltin to connect him with other CPA leaders with experience in determining the value of different parts of their firms. With Bergan’s deferred compensation based on business value, and private equity entering the accounting space, he wanted to make sure his numbers were fair.

Koltin called months later with an entirely different conversation related to a phone call he received one summer Sunday from a caller with an 816 area code. He thought it might be a Kansas City cousin, but the call was from a man he’d never heard of from a company he didn’t know, asking for help buying a top-notch billiondollar accounting firm.

Koltin, who was gardening at the time, thought it was a joke but the caller turned out to be Creative Planning CEO Peter Mallouk. After some quick web sleuthing, Koltin realized the wealth management firm had

over $210 billion in assets under management and advisement. Though the conversation was lighthearted, it was no joke.

Hinnenkamp, who started the wealth management practice at Bergan, knew exactly who Mallouk was. “I admired Peter before I actually knew him because he was building what I had envisioned but he was able to do it much faster.”

A NEW ERA FOR ACCOUNTING FIRMS

Subsequent discussions went well. “It was a steady boil. Unlike a lot of deals that die and come back to life three or four times, this one was love at first sight,” Koltin says. Hinnenkamp adds, “I have nothing but raving words to say about Peter Mallouk. Whenever we ran into any roadblock, I would give Peter a call and literally we would resolve it in 10 to 15 minutes on the phone. And it was all under the guise of what makes sense, what’s fair here.”

Koltin thinks the profession is beginning a new phase, with no shortage of companies looking to buy. “I had thought that PE would be the only player in the M&A arena, and I came to realize that we’re just getting started.”

While Hinnenkamp says he is ecstatic to be at this point in the journey, it’s only the beginning. Does he see any potential obstacles? “The only one I see is our own limiting beliefs. If you keep the client in the center of it all, and say what is best for the client, what does the client need and you respond in that manner, I don’t think there are any obstacles you can’t overcome.” 

Peter Mallouk

A New Model for PE Investment Relieves Leaders from NonClient Work at LMC

BY: CHRIS CAMARA

Six months after the launch of a new private equity-backed platform for regional accounting firms, three deals are complete and one MP is relishing the time he had previously spent handling firm benefits, hiring new C-suite leaders and wrangling with technology.

“There are all these different things that they’re doing to really help somebody like me get out of the weeds and go out and do what I’m best at, which is bringing in business and consulting with my clients,” says Lee Cohen, MP of New York-based LMC (FY22 net revenue of $19.2 million). “We’re embracing everything because we’re so tired of the typical accounting profession challenges that we’re facing. And they’re working so hard to solve them, it’s just amazing.”

Cohen is referring to the leaders of Alpine Investors and Ascend, the platform Alpine launched in January of 2023. The Ascend team is working closely with LMC and two other partner firms — Vancouver, Wash.-based Opsahl Dawson and San Antonio-based ATKG

Lee Cohen

The deals represent a new model for PE investment, which is becoming more common for larger firms looking to afford improvements in technology, hiring and acquisitions to fuel new growth. Rather than looking to top-tier firms, as in the deal between TowerBrook Capital Partners and EisnerAmper two years ago, Ascend seeks instead to invest in regional firms of about $10 million to $50 million. In all three Ascend partnerships, the firms have remained independent and, as is common with PE deals, they have divided the business between two entities, a licensed CPA firm handling attest services and the other offering tax and advisory services.

A THREE-MONTH JOURNEY FROM PITCH TO DEAL

For LMC, the journey to the PE investment started with a cold email pitch Cohen received in January. He liked what he learned and quickly found himself immersed in conversations, due diligence and paperwork culminating in a final deal three months later.

“It’s been a whirlwind but very careful, very strategic,” he says. “They’re very focused on helping us grow, giving us the tools, and at the same time not getting in the way. That’s a balancing act, and for me, the character of the people I’m dealing with is very important. I’m a pretty good judge of character. Throughout the whole process they’ve been an amazing group of people to work with.”

The Ascend model was attractive to Cohen for numerous reasons. At 50, Cohen still sees a long career ahead of him and for LMC’s staff, he predicts a much faster path to equity than that of a traditional CPA firm. Also, since merging up or an outright sale to a private equity firm was out of the question for the man long dedicated to building the business, he says the support of Ascend means a broader look at growth beyond serving clients.

“We’ve had explosive growth and managing that growth was just getting harder and harder for me, and not having a real plan was tough.” The entire firm was so focused on handling the workload that strategic planning took a back seat. “That’s just because we were just growing and it was client service, client service, client service.”

CONCRETE HELP AND FEW POTENTIAL DOWNSIDES

For the next 12 months at least, David Wurtzbacher, Ascend’s founder and CEO, will work hand in hand with Cohen and his team on short- and long-term goals, and

the firm has already seen a number of concrete benefits, including:

Î A technology evaluation to determine how to streamline processes.

Î A shift to Ascend’s insurance platform, freeing up time spent on health benefits and the firm’s 401(k).

Î Hiring support. Ascend’s chief people officer helped LMC hire a chief growth officer, using a far different philosophy than Cohen: attributes over experience. “I didn’t believe it and to be honest I fought them.” Ascend recommended a professional without CPA firm experience, and she has worked out amazingly well in the role, he says.

Î Recruitment support. Ascend has shifted LMC to its recruitment platform and is training staff on interviewing best practices, sharing resumes and working closely with the LMC HR team and recruiter.

The only downside Cohen can see is the possibility that a client may not want to be associated with a PE-backed CPA firm. He hasn’t heard that yet, but clients have asked if partner relationships will change and if fee increases are planned. “I assured them that’s not the case.” Fees have increased twice over the last two years, but those decisions were made prior to the private equity infusion.

For now, the experience has been nothing but positive. “If you asked me two months ago, ‘Did I think I could be this happy?’, I would have said no.” 

David Wurtzbacher

Enhancement, Not Replacement

The Role of Automation in the Ongoing Staffing Crisis

BY: MARK LOEHRKE

With technology increasingly touching nearly every aspect of the work that accounting firms do, it’s not surprising that it would eventually come to impact who is doing that work as well.

Indeed, amid what many observers see as the most acute staffing shortage across the profession in decades — coupled with a glut of new work coming in the door — more firms than ever are turning to different forms of automation to ease the strain. From bots and RPA (robotic process automation) to APIs (application program interfaces) and AI (artificial intelligence), firm leaders are looking to technology to address their ongoing capacity concerns by leveraging their existing solutions, reducing redundant tasks and streamlining their work.

But at least one tech expert says the relative success or failure of these endeavors has less to do with the merits of any specific underlying project and much more to do with the firm’s approach to automation in general.

“Many firms want to jump straight to technology to solve their capacity challenges, but they need to be starting with firm processes — or at least addressing process and automation hand in hand,” says Jim Boomer of Boomer Consulting. “Without a strategy of standardizing and streamlining processes, it becomes very difficult, if not impossible, to automate inconsistent processes. On the other hand, once you have consistent and streamlined processes in place, automation can

Jim Boomer

become a very powerful tool to increase efficiency and free up your team’s capacity to elevate the value of services they deliver to clients.”

With that kind of cautious, measured approach in mind, Providence, R.I.-based Kahn Litwin Renza & Co. (KLR) is taking what it sees as a multi-year and multi-tier automation journey one step at a time. The $68.8-million firm hired Rob Loyot as its first chief innovation officer earlier this year, in part to help lead its tech-focused efforts to address staffing pressures, which initially include developing RPA bots to remove repetitive digital processes, thereby allowing staff to reallocate their time to higher-value work.

“We are currently at the phase of working with teams across the firm in all departments to catalogue tasks that are susceptible to being automated,” explains MP Paul Oliveira. “That catalogue will be prioritized with the goal of deploying solutions during the second half of 2023.”

Oliveira notes that KLR increased its technology budget by 30% for 2023, which includes a projection of more than $100,000 in spending related to automation projects. Coming years will see initiatives centered on things like client/staff onboarding and client engagement portals, but the remaining work in 2023 will be concentrated largely on RPA and data warehouse/business intelligence (BI) initiatives — both of which Oliveira says will help address the firm’s staffing situation.

“While it is known that RPA work directly affects staffing issues, it may be less obvious that BI dashboards also

impact staffing bandwidth by removing potentially hundreds of hours of effort spent on report generation,” he says. “We’re just at the beginning stages of this effort, but I think our team is very excited about the potential this holds for KLR.”

Of course, technology is just one piece the puzzle when it comes to addressing staffing concerns at KLR, which Boomer notes is as it should be, mentioning process improvement, outsourcing and focusing on serving more right-fit clients through revenue replacement and client filtering as complementary avenues that firms should be pursuing in addition to automation projects.

Finding the right mix of these strategies — and having success in any of them — he says comes down to leaders being able to map out the firm’s vision and communicate it effectively to staff. Like any other aspect of the business, after all, the dynamic between automation and staffing should never just be about throwing technology at the problem and hoping it instantly makes everything better.

“When it comes to solving the capacity puzzle through things like automation and outsourcing, firm leaders need to go beyond being change managers and take a role as change leaders,” Boomer says. “This involves getting ahead of the ‘why’ questions from various stakeholders by effectively communicating throughout the process and ensuring the team that you are not replacing them with automation and outsourcing. Everyone should know that the goal here is to create capacity for them to upskill and raise their value to your firm and clients.”

Rob Loyot

Paul Oliveira

Gallup Survey Shows Quiet Quitting is Real and Stress is Taking its Toll

An annual report that claims to represent the collective voice of the global employee reveals contradictory results — the majority of workers are stressed, looking for work or limiting themselves to the minimum requirements, while engagement is nevertheless up.

The Gallup study, “State of the Global Workplace,” explains that more workers felt rewarded at work and connected to their teams — at 23% — following a dramatic drop during the pandemic. At the same time, 18% are actively disengaged and the rest are “quiet quitting,” which Gallup defines as a psychological disconnect with their work as they don’t see the ‘why’ of their jobs and

lack strong bonds in the workplace.

Engagement is highest in the U.S. and Canada at 31%, but 52% of workers reported a lot of stress for most of the day before they took the survey. In contrast, only 13% of Europeans are engaged but reported stress is lower, at 39%.

Combined, the quiet quitters and actively disengaged cost the global GDP $8.8 trillion, or 9%. Gallup has surveyed 2.2 million employees since 2009, about 160,000 per year.

Other findings from the survey:

Employee stress is rising

Stress levels are hitting employees hard at 44% globally, a number that has been increasing for a decade. Higher stress levels are reported from young employees and those working in 100% remote or hybrid work locations.

Surplus of job opportunities in 2022

This finding means it’s a good time to look for new work and employers must do more to keep employees happy and rewarded.

More than half of employees are actively or passively looking for new jobs

Gallup says 51% of workers said they are seeking a new job, or at least watching for opportunities, mainly for better pay, but better wellbeing and more growth opportunities are top priorities as well.

Engagement matters

Both working remotely and on-site have their pros and cons, but more important than the location of work is how connected employees feel to their supervisor and coworkers. It’s 3.8 times more important, the survey shows.

Quiet quitters would make changes

A full 85% cited more recognition, opportunities to learn, fair treatment, clearer goals and better managers.

“Consider the level of engagement among the world’s best-run organizations (72%) and what it could mean for organizations and society if their organizational practices were widespread: record high productivity, customer retention and growth, better employee retention and significantly reduced stress,” the report says. 

IPA Profile

Carla McCall

AAFCPAs

50

IN BUSINESS YEARS

Westborough, MASSACHUSETTS

HEADQUARTERS

300 $54.9

What is the single biggest challenge facing your firm right now?

The biggest challenge in my mind right now is our business model. And what I mean by that is we are in a process of not only upgrading our technology and using our robotic process automation (RPA) team to help us build automation and working with a tech partner to create a digital firm, we’re trying to move the firm to a place where we’re measuring the output of our people instead of the input. Accounting is traditionally based on hours, which is an input, not an output — and that is, in my opinion, one of the worst things about our profession.

STAFF SIZE NET REVENUE

MILLION

We’ve been working on technology solutions and creating new KPIs to measure output so that at some point we don’t have to live and die by the billable hour. And that’s coming through a whole integrated business model change of how we’re upgrading technology and creating automation to leverage people time, especially given some of the staffing concerns of the pipeline — which also includes having an offshore team. We went in with a group of firms to invest in an offshore company to build teams to supplement and augment our U.S.-based team.

MP, AAFCPAs

Working with my partners on how to think differently about the growth and scale of their practice areas, and right now that focus is on data and creating business insights. We have an in-house data analytics team and RPA team that can partner with our service line leaders and talk about the best ways to move forward. One example would be data warehousing — what information can we harness to create business insights so that we can help our clients grow their businesses?

It’s thinking about how we grow differently in this age of data and technology. The advisory world in CPA firms has completely shifted from what it was before, so I’m trying help our partners think a little differently. It’s about upskilling and learning about new technology and learning what’s possible when you think about all the tools that are available. People need to understand what that looks like and how we can take our knowledge and apply it to what our clients need, so I’m really trying to help our partners focus on that area.

at a quicker pace. If more firms embraced that mindset and model, imagine where they could be. I just find it odd that the Big 4 each spend millions and millions of dollars all creating their own versions of the same technology that they think is going to be better than the other one. What if they were to come together and create one product that they all use? At the end of the day, client success is about relationships and trust — not the technology we use.

To me, it seems like we’re losing something by thinking that we’re special and that we can’t possibly team up with our fellow firms. Associations can certainly help in this regard — we’re members of Prime Global and we’ve found many opportunities to work with other firms there.

What was the best advice you received as a young up-and-comer in the profession?

From a firm perspective, it’s keeping an external view and keeping up with what’s happening in the marketplace. I see a lot of firms that are not embracing the technology tools that are available out there and investing back into their business. It’s no secret that there’s a lot of M&A activity going on, and we get approached by a lot of smaller firms that want an exit. But if they’re a paper-based firm that hasn’t invested in technology or the owners have taken out a lot of money and not invested in the business, I’m not sure there’s much left there. That’s why firms really need to keep an external view of what’s available and how they can evolve.

And that dovetails into the broader profession, where by far I think the biggest missed opportunity is that the profession has not embraced the power of collaboration. I believe that if you get multiple minds at the table, you’re always better off. But I think a lot of firms think they have the secret sauce for success and they can’t share anything with other firms, and that just seems crazy to me. We’re in a group with eight other firms from all over the country and we share and collaborate in ways that help us all grow

When I was coming up, I kind of had my head down as I climbed the corporate ladder. I was solely focused on my own goals and work and how to get to the next level — that was just kind of how my mind worked. It wasn’t until I was maybe a senior manager or a new partner, and my mentor in my firm, who happened to be one of the founders, asked me in a coaching meeting what I was doing for community service. It stopped me in my tracks — I wasn’t doing anything in that regard. And he told me to find something I was passionate about.

That moment helped springboard me into my first board service as a founding member of Strong Women, Strong Girls and my journey of helping and mentoring young women. Since then, I’ve served on multiple boards in different roles over the years, which led me to the Massachusetts Society of CPAs, which led me to a chairman’s seat, which led me to a seat on an AICPA council, which led me to the AICPA board, where I’m wrapping up my third term. So that conversation is really when I started to understand how important it is to get outside of yourself and think about giving back to

Where do you expect to be focusing most of your attention in the next two to three years?

What is the biggest and sometimes missed opportunity for your firm and/or the profession?

"At the end of the day, client success is about relationships and trust — not the technology we use.”

community. The experience that you gain and the networks that you build are amazing.

What advice would you offer to someone entering the accounting profession today?

I believe strongly in career self-reliance, as opposed to sitting back and waiting for someone to tell you that you’re ready — and we’ve amplified that here with two executive coaches that we’ve brought in. You need to find your meaningful work. Move around, try different things — industries, specialties, groups. Find the moments when your adrenaline is up. What was it that got you there?

Also, don’t be afraid to boast about your accomplishments. Take credit for the things you build. A lot of people don’t want to be seen as bragging or come across as egocentric, but you can do it in a way that just shows how proud you are of what you’ve done. I used to say, “don’t be afraid to ask for what you want” and I’ve changed that in recent years to “don’t be afraid to ask for what you deserve.” If you base it on your accomplishments and frame it that way, it becomes a different conversation.

What motivates you most as a leader?

Hands down, it’s helping other people — that’s what’s gotten me to this point. I like giving people ideas and helping partners with strategies they can use to be successful. This is where most of my enjoyment comes from. As managing partner, if I’m spending my time with my partners helping them think differently and do better, the impact on the firm can be incredible.

How has your role as a leader at the firm changed since you first stepped into the MP position?

I came into the managing partner role in a founder transition back in 2011, and a founder transition is a heavy

lift. The first few years were very tactical and operational — navigating buyout agreements and exits and change. I knew that I wanted the firm culture to be different than what it was, and I knew I wanted it to be focused more clearly on people. But I had to build the infrastructure — HR, marketing, finance, everything — and we brought in great people and teams to help make that happen. This firm has always had the kind of heart that I was looking for and I wanted to make sure that was reflected in everything we did. And all of that was very operational.

Once we had a solid senior leadership team in place, I was able to pivot to more strategic and visionary pursuits. A lot of that came from what I saw and heard through the AICPA — I got a lot of great ideas for expanding our use of technology and adding new service lines, all of which contributed to our growth over the years. And the most important piece underpinning all of that is our culture — having the right people in place and putting them in the best possible position to succeed.

Where do you see the accounting profession in five years? How do you see it changing/developing and/or how would you like it to change?

Firms are going to be routinely partnering with other skillsets — engineers, technologists, etc. We do it now, but it’s going to become much more prevalent. There’s going to be much more automation, which will allow us to leverage our people much more efficiently. It will be routine for firms to have project managers in place. I think that’s something a lot of firms lose sight of — they still have their highest and best use people doing administrative work that others could be doing instead of working directly with clients. And technology and automation will just continue to get better over the next five years.

What I’d like to see is for people to stop talking about the things that have given this profession a less-thanimpressive reputation — the hours, the busy season, etc. — and start talking instead about all the cool stuff we do.

We help clients save tons of money with tax strategies and we help clients better use their data and we help clients think about their business models differently. We need to talk about those aspects of the profession and those relationships, as well as the ability to be an entrepreneur. When you look at the partners in a firm, they’re entrepreneurs — they’ve built practices around something that is meaningful to them. These are really cool things that we need to be talking about. I love this profession — there’s so much opportunity and flexibility and diversity

in the kinds of work we do — and I just want to make sure that’s the kind of message we’re sending out.

What is a book you'd recommend to other leaders?

I have two — one I’ve read and one that’s on my desk. The first is Redefining HR by Lars Schmidt, which I read maybe two years ago. If you’re thinking about a people-first culture, it is off-the-charts good — and I didn’t think I’d ever say that about an HR book. One of the really cool things about reading it was seeing many of the things we were already doing here with regard to putting our people first and having good things flow from there.

The one on my desk right now is Wonderhell by my friend Laura Gassner Otting, which I’ve started reading but haven’t finished yet. It’s really about that moment that you achieve success and it’s supposed to feel good, but you find yourself with more stress and more anxiety — which is a weird place to be. She talks about how to harness and appreciate those emotions so you can move on to the next goal.

What is your proudest achievement?

This is a tough one, but I did receive the inaugural Harry C. Bentley Alumni Achievement Award from Bentley University in 2017. That was very meaningful to me because I hadn’t really kept in touch with my alma mater, but to be recognized like that by such an amazing school — as someone who embodies Bentley’s commitment to excellence on behalf of the profession and the community — was a pretty proud moment for me. 

The IPA community wants to get to know you better! If you’d like to share your thoughts and insights in a future edition of the IPA Profile, let us know at mloehrke@ipainsider.com.

“I’d like to see people stop talking about the things that have given this profession a less-than-impressive reputation — the hours, the busy season, etc. — and start talking instead about all the cool stuff we do. I love this profession — there’s so much opportunity and flexibility and diversity in the kinds of work we do — and I just want to make sure that’s the kind of message we’re sending out.”

The Road Ahead: Aiysha Johnson Takes Over at NJCPA Amid Great Challenges — And Potential Opportunities — For the Profession

BY: MARK LOEHRKE

While Aiysha (AJ) Johnson may be new to the CEO and executive director roles at the New Jersey Society of Certified Public Accountants (NJCPA), having earlier this month succeeded Ralph Albert Thomas — who had led the 125-year-old organization for more than 23 years — this is hardly her first leadership post. That’s why, with her two decades of experience working for several professional and trade associations, most recently as executive director of the Americas Region at BKR International, Johnson knows well what her No.1 task coming into the NJCPA needs to be.

“My first priority is to listen,” she says, noting how important it will be to hear from the broad range of constituents that make up the NJCPA’s membership of more than 13,000. “We’re in the people business, so I want to meet as many members as possible and let them know that our vision is to help them thrive in their careers.”

That vision, as Johnson sees it, includes sustaining NJCPA’s market share, improving the member experience across all member groups (with a specific focus on younger professionals, who generally want different benefits than previous generations, such as career and leadership development) and amplifying the NJCPA brand to a broader population of accounting and finance professionals throughout the region. In pursuing this three-pronged approach, Johnson sees the NJCPA serving as a critical resource as its members navigate a period of upheaval in the profession.

“We want our members to recognize society membership as fundamental to their professional success,” she explains. “We’re at a critical time right now where the accounting profession is experiencing challenges, but there are also opportunities. My goal is to continue to support CPAs and the profession to have a voice at the table, to have a positive impact on our economy and communities, and to encourage others to join the profession.”

Like many firm leaders, Johnson believes the staffing crisis is one of the most critical issues weighing on the future of the profession.

“We need a collective effort between national and local organizations to encourage more people to major in accounting and pursue the CPA license,”

she says, noting that NJCPA has recently established its own CPA Pipeline Task Force. “Accounting is a great profession, and our members can tell amazing stories of helping a small business survive the pandemic or developing a business plan with an aspiring entrepreneur, but sometimes those stories get lost behind the tired clichés about accounting and accountants.”

Like many others, Johnson also recognizes the role the 150-hour requirement for CPA licensure plays in the pipeline challenge — as well as the efforts that many state societies, firms and educational institutions are spearheading to try and reach a more accessible compromise. In New Jersey, for example, she points to a “Work for Credit” pilot program between Saint Peter’s University and PwC that allows students with a bachelor’s degree to work at the firm to obtain their final 30 credits.

“We’re excited to see where this goes and find ways to help other colleges and firms set up similar programs,” she says, adding that she’d like to see more firms get involved in a profession-wide, multi-stakeholder effort to address the issue.

Despite its importance, however, Johnson says the pipeline isn’t the only place where firms need to focus their attention and resources in the current environment. There’s plenty of opportunity, she believes, for firms that aren’t averse to change.

“I’d like to see firms stop clinging to outdated business models,” she explains. “Now is the time for firms to

modernize their operations. Clients and team members expect their firms to stay up to date with technology, to create morale-boosting experiences and to prioritize their people. Change can be scary for firm leaders because it might initially mean giving up some revenue to change their business model, but they should take a moment to realize that there's something bigger at stake here than just getting through the day.”

When it comes to helping firms recognize those “bigger” priorities and achieve their goals, Johnson wants to make sure they continue to see the NJCPA as their partner in change on several fronts, including technology/ modernization, DEI initiatives and the development of future leaders. And she knows that the first step in forging that path comes back to the values embodied by her predecessor.

“As I said earlier, the NJCPA is in the people business, and from what I’ve learned, no one was better at collaborating with people — members, lawmakers, the media — than Ralph,” she says. “Thanks to him, the NJCPA’s brand generates feelings of pride and unity for members and volunteer leaders across the organization. And I want to continue that legacy.”

Change can be scary for firm leaders because it might initially mean giving up some revenue to change their business model, but they should take a moment to realize that there's something bigger at stake here than just getting through the day.”

AIYSHA JOHNSON CEO AND EXECUTIVE DIRECTOR, NJCPA

CPA.com Leader:

Big-Firm Users of Dynamic Audit Solution

Enthusiastic, but Adoption Requires Big Changes and Strong Support

BY: CHRIS CAMARA

As CPA firms are automating their audit processes in various ways and a select group started using the longawaited Dynamic Audit Solution a few months ago, INSIDE Public Accounting Monthly checked in with CPA. com, the technology arm of the AICPA, to get an update.

The Dynamic Audit Solution (DAS) project, launched in 2018 as a collaboration with AICPA, CPA.com, CaseWare International and a significant number of IPA 100 firms, was intended to transform the audit process–“what they look at, when they look at it and how they look at it,” according to Ericka Racca, CPA.com’s director of audit professional services. Roughly $50 million had been committed to develop new methodology, with CaseWare investing tens of millions more to build its new cloud platform.

DAS should be commercially available later this year to early-adopter firms, Racca says. Here is a lightly edited account of Racca’s responses to our questions.

What’s been your experience with firms implementing the Dynamic Audit Solution? What are their pain points? What benefits are they seeing?

We’ve been working closely with select firms who have been using DAS in live audits, and the feedback from audit staff at all levels has been extremely positive.

One of the key pain points auditors have typically faced within an audit engagement stems from the need to access and analyze data from disparate systems that don’t interface with each other. This requires a lot of manual work and increases the risk of errors. DAS provides the capability to integrate that information into one platform, eliminating a significant burden for staff by allowing the auditor to stay in that one platform to complete his or her job.

Additionally, DAS makes the audit engagement much more engaging for staff by eliminating mundane data-entry tasks so they can focus instead on using that data to deliver deeper insights and risk assessments to their clients.

Plus — for early career staff especially — the guided methodology enables them to understand the “why” of what they’re doing instead of simply filling out checklists and performing the same procedures based on last year’s audit. Additionally, some of the firms doing live audits today believe that coupling the innovative technology solution and the ability to deliver higher-value work is really offering a competitive edge when it comes to attracting and retaining talent.

How widespread is adoption of DAS and what size firms are

A cohort of firms that have been part of the collaboration with AICPA, CPA.com and CaseWare performed the first live audits with DAS in the spring of 2023. DAS will be commercially available later this year for early-adopter firms that meet the readiness assessment criteria. What we mean by this is that strong change management and support from leadership is critical to successfully implement DAS, and firms will need to assess business processes and workflows, evaluate team skillsets and transition to a single taxonomy to prepare for the transition.

While DAS was developed with a consortium of the top 100 firms, this does not mean it is only for large firms. DAS provides auditors with a deeper understanding into each individual client and the risks associated with that client and their industry. This approach can benefit audit quality and client insights regardless of the size and complexity of the client being audited, and DAS is being built to support appropriate scaling for smaller, less complex clients.

“audit of the future” create?

Emerging technologies are creating tremendous opportunities. Auditors can reimagine how they perform an audit to improve quality and inform greater insights and value to the client through data-driven AICPA methodology and guided workflows, real-time collaboration and robust data analytics. A few specific benefits I’d highlight include:

Î Visibility to more client data. Having a fully integrated solution gives the ability to import multiple data files from the client that can be used in analytics and other analysis. This provides auditors with insights into the client data that may have been missed through traditional audit methods or the use of disparate point solutions.

Î Improved risk assessment. DAS has built-in, integrated analytics to enable auditors to identify and respond to relevant risks through every stage of the audit.

Î Guided methodology. The methodology is built into the application. The imported client data and information about the client documented by the auditor is used to help auditors identify risks and the proper response at the appropriate time.

Pre-COVID, there was some discussion about auditors possibly losing their jobs to automation, but it seems that those fears have abated. Do you agree?

Depending on where firms are in their audit transformation journey, firms may also consider implementing one of the other solutions first, such as OnPoint PCR, OnPoint Audit or OnPoint EBP.

The expertise, critical thinking and ethics that an auditor brings to an audit engagement has never been more important. Technology cannot replace the critical role of the auditor, but it does offer enormous potential to augment what they do. Firms that embrace technology and transformation will be well positioned to meet the needs of today’s and tomorrow’s clients. 

most commonly using it?

In one of the sessions at the recent ENGAGE 23 conference, the speaker noted that the Dynamic Audit Solution is not for every firm. Do you agree, and can you elaborate?

Can you briefly discuss the benefits of a re-engineered audit? Efficiency is one, but how much more value would the

Ericka Racca

FIRMS in the news

Aprio Adds Colorado Firm in Latest Strategic Combination Atlanta-based Aprio LLP (FY21 net revenue of $317.3 million) is merging in Gomerdinger & Associates LLC of Greenwood Village, Colo., which offers a wide range of services to individual and business clients spanning financial advisory, tax and assurance.

“Denver is a market with a lot of opportunity and a city we have been pursuing for a long time — we’re excited to take the next step in our growth and expansion with a like-minded firm that is just as passionate for what’s next,” says Aprio CEO and MP Richard Kopelman

Eide Bailly Acquires Seattle Firm Eide Bailly (FY22 net revenue of $5616.5 million) is merging in King & Oliason PLLC of Seattle, which specializes in tax consulting and tax return preparation for high-networth individuals, non-profit organizations and closely held businesses throughout the Pacific Northwest.

“King & Oliason’s workplace culture alignment, coupled with their longstanding commitment to delivering exceptional client service, positions them as an outstanding addition to Eide Bailly,” says MP and CEO Jeremy Hauk

Hancock Askew Adds Orlando-Area Office With Acquisition Savannah, Ga.-based Hancock Askew & Co. LLP (FY21 net revenue of $40.6 million) is merging in Ferrell & Kelly CPAs of Winter Park, Fla., which specializes in tax and accounting services for individuals and businesses, with a focus on domestic and international tax. “The Orlando market was a key location to our growth in Florida and complements our existing Florida offices in Miami, Tampa and Jacksonville,” says Hancock Askew MP Michael McCarthy.

SEC, PCAOB Charge Marcum with Significant

Quality Control Violations New York-based Marcum (FY21 net revenue of $1.22 billion) has agreed to pay $13 million in fines in response to SEC and PCAOB charges that the firm failed to impose stringent quality controls and violated auditing standards in connection with hundreds of special purpose acquisition companies (SPACs) and other clients. Marcum more than tripled its number of public company clients over three years, which the SEC contends exposed “substantial, widespread and pre-existing deficiencies in the firm’s underlying quality control policies, procedures and monitoring.” The firm agreed to settle the investigations, without admitting or denying the claims, by paying $10 million to the SEC and $3 million to the PCAOB. Marcum has also agreed to retain an independent consultant to review and evaluate its audit, review and quality control policies and procedures, as well as follow limits placed on accepting new audit clients and add a new chief quality officer role.

UHY Grows in Home State With Acquisition

Farmington Hills, Mich.-based UHY LLP (FY21 net revenue of $298.1 million) is merging in Cadillac, Mich.based Baird Cotter & Bishop PC , which offers a full range of accounting services, with a concentration on audits of local units of government in Michigan. “Baird Cotter & Bishop has vast experience serving government entities, which will deepen our bench as a trusted service provider to the public sector,” says UHY’s Great Lakes RMP Tom Callan . 

PEOPLE in the news

Ben Wilson Takes Over at AdamsBrown Great Bend, Kan.-based AdamsBrown LLC (FY21 net revenue of $43.1 million) has named Ben Wilson its new MP and CEO. He succeeds Brian Staats, who has led the firm for the past 10 years and will assume a new role in building the firm’s family office service model. Wilson joined AdamsBrown in 2009 and has held numerous leadership roles within the firm, most recently serving as vice president. “I’m truly humbled by this opportunity and fully understand the significance of the responsibility I now hold toward our team and clients,” Wilson says.

KerberRose Names New Managing Shareholder Green Bay, Wis.-based KerberRose (FY21 net revenue of $32.5 million) has appointed Erik Bunnell as its new managing shareholder. He takes over for Mike Ruby, who has served in the role since 2018. Bunnell joined the firm in 2018 and has more than 16 years of public accounting experience, as well as eight years of experience in private accounting. “Erik is well equipped with the right leadership qualities and vision for the future to ensure we remain committed to our mission of helping our clients and team members to be successful, and to our pursuit of innovation,” says Ruby.

Lutz Lays Out Leadership Transition Plan Omaha, Neb.-based Lutz (FY21 net revenue of $74.4 million) has mapped out a leadership succession plan that will see current managing shareholder and chair of the board Mark Duren transitioning his responsibilities to Ryan Cook over the next three years. Cook is president of Lutz’s largest division, Lutz Accounting. “For the next three years, I am fully committed to collaborating closely with Ryan and the members of Lutz’s board to keep pushing forward with our strategic vision of fostering both internal and external growth, nurturing the next wave of leaders, delivering exceptional service to our clients and giving back to the communities we serve,” says Duren, who started at Lutz in 1992 and has served as managing shareholder since 2015.

Ben Wilson Ryan Cook

Erik Bunnell

Moore Colson Brings in New COO Atlanta-based Moore Colson CPAs and Advisors (FY21 net revenue of $41.0 million) has brought on Mark Sphar as its new chief operating officer. Spahr has more than 20 years of experience helping mid-sized financial, technology and service companies operate with financial confidence and efficiency. “Mark’s impressive background and expertise make him an exceptional addition to our team, and we look forward to the continued growth of Moore Colson with Mark’s guidance,” says MP Andy

Starnes

Moss Adams Names Chief Talent Officer Seattle-based Moss Adams LLP (FY21 net revenue of $1.12 billion) has appointed Jen Wyne as its first chief talent officer. Wyne has been with Moss Adams for over 10 years, serving as director and executive director of HR prior to her promotion, and has over 30 years of people management experience. “Adding the CTO role will solidify our focus on our workforce as we evolve and grow as a firm,” says chairman and CEO Eric Miles.

Tanner Names New CFO Tanner LLC of Salt Lake City (FY21 net revenue of $43.9 million) has named Crystal Bush as its new chief financial officer. Bush has 11 years of finance and accounting experience and has served as an assurance manager at Tanner since 2020. “Crystal has served our firm well for the last seven years in our assurance department and we are pleased to advance her to this important management position within our firm,” says MP

Mark Erickson

correction

In a June story on pay transparency/equity laws, we reported, “Meeting the standards is arduous, but making mistakes has real consequences — a civil penalty of up to $250,000 for the first violation.” The sentence should have read “after the first violation.”

Jen Wyne

Mark Sphar

Crystal Bush