Insight Magazine - Summer 2023

Can Pay Transparency Help CPA

Firms Attract and Retain Talent?

The CPA Opens Doors for U.S. Immigrants

Celebrating Illinois’ First Black CPA

Is AI the Solution to Acquiring Talent?

Helping Clients Plan for Long-Term Care

Adopting New Workplace Technologies

And More!

Exploring the issues that shape today’s business world.

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

Jonathan W. Hauser, CPA | KPMG LLP

Vice Chairperson

Deborah K. Rood, CPA, MST | CNA Insurance

Secretary

Brian J. Blaha, CPA | Wipfli LLP

Treasurer

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

Immediate Past Chairperson

Mary K. Fuller, CPA | Citrin Cooperman

ICPAS BOARD OF DIRECTORS

John C. Bird, CPA | RSM US LLP

Jennifer L. Cavanaugh, CPA | Grant Thornton LLP

Brian E. Daniell, CPA | West & Company LLC

Pedro A. Diaz de Leon, CPA, CFE, CIA | Cherry Bekaert Advisory LLC

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 | CliftonLarsonAllen LLP

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

Scott E. Hurwitz, CPA | Deloitte LLP (Retired)

Joshua D. Lance, CPA, CGMA | Lance CPA Group

Enrique Lopez, CPA | Lopez & Company CPAs Ltd.

Leilani N. Rodrigo, CPA, CGMA | Roth & Co. LLP

Richard C. Tarapchak, CPA | Verano Holdings Corp.

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, Suite 900, Chicago, IL 60661, USA, 312.993.0407. Copyright © 2023. No part of the contents may be reproduced by any means without the written consent of Insight. Send requests to the address above. Periodicals postage paid at Chicago, IL and at additional mailing offices. POSTMASTER: Send address changes to: Insight, Illinois CPA Society, 550 W. Jackson, Suite 900, Chicago, IL 60661, USA.

spotlights

4 CEO Outlook Does the Accounting Profession Need a Summer Break?

6 Capitol Report Crossing the Finish Line: Survey of the Spring Legislative Session

46 Gen Next As One Door Closes, Another One Opens

48 In Play

Chad E. Turner, MS, harnesses his unique superpower to advocate and speak up for others like him.

trends

8 Financial Planning Tax Advantaged Strategies to Help Clients Plan for Long-Term Care

10 Technology

3 Steps to Success When Adopting New Technologies in Your Workplace

12 Hiring & Retention

Is AI the Solution to Acquiring Accounting Talent?

insights

30 Growth Perspectives

The AI Tsunami Is Here: Are You Ready?

32 Leadership Matters

Can ChatGPT Make You a Better Leader?

34 Evolving Accountant DEI Is Evolving: Is Your Firm Keeping Up?

ceooutlook

Geoffrey Brown, CAE President and CEO, Illinois CPA Society

Does the Accounting Profession Need a Summer Break?

For me, and I hope for you, summer offers much-needed space to renew, reflect, and refocus for the work ahead. It’s a time to create, review, plan, and improve upon what we’ve done in the past. During the summer, I like to focus on those areas and engage in the “think time” that’s critical to staying fresh. Of course, I also take a little time to relax and restore the all-important work-life balance!

Reflecting on everything I’ve experienced during my first six months with the Illinois CPA Society (ICPAS) makes this summer a little different. I spent that time meeting with firm leaders, CPA professionals, members of the academic community, our professional organization partners, and policymakers. This listening tour was extremely informative and rewarding for me, as I was able to gain insight into the perspectives, experiences, and needs of these audiences. Throughout all those conversations, a consistent theme came to my attention—the talent pipeline.

The last few years have ushered in feelings of uncertainty about the talent outlook for some professions, but feelings of optimism about the future for others. As you all know, the CPA profession falls into the former category. Our organization was one of the first to call attention to the declining talent pipeline and the contributing factors. That call has been echoed many times in the years since then with little agreement on how to confront the issues.

Luckily, the profession is aligning on the approaches necessary to help stem the tide and ultimately right the negative talent trend we’re collectively facing now. For example, AICPA recently unveiled its Pipeline Acceleration Plan that’s intended to identify ways to integrate the changing needs of new accounting recruits and

young professionals, increase flexibility and accessibility in the CPA licensure pathway, and drive awareness of the wide range of career opportunities to inspire a more robust supply of new CPAs.

We know that no single solution will solve the profession’s talent issues. We also know that any actions taken to do so must maintain the rigor needed to protect the public while also being responsive to the next generation. Implementing long-term solutions to better attract and retain talent will require the entire profession to work together. Despite the gravity of the challenges we’re facing, I think it’s fair to say we’re in a good position to address them head-on.

ICPAS has shown its true value by being a thought leader in addressing many of the profession’s most important issues. We’ve done so by convening unique conversations and programs and, most importantly, by being unwavering in our mission to advance the CPA profession. It’s now time to lean into that as we focus on the current talent challenges.

Through the efforts of our team, as well as new partners, I’m confident we’ll be able to advance our mission and evolve how we think about the future of the profession’s talent needs. We know now isn’t the time to play it safe. It’s time to push past the status quo and take calculated risks. We recognize that this shift calls for fresh thinking and being bold and transformative. As we look to the future, we must broaden our thinking and embrace a challenger mindset. Are you with us?

Some rest and relaxation could bring fresh thinking for tackling our talent troubles.

Martin Green, ESQ Senior Vice President and Legislative Counsel, Illinois CPA Society @GreenMarty

Crossing the Finish Line: Survey of the Spring Legislative Session

While summer blazes ahead, and another legislative season looms, I’d like to recap some highlights from the spring legislative session. As most of you know, the state’s fiscal year began July 1, and the process of passing a budget was a bit rocky for legislators. Even with a brighter fiscal picture than usual thanks to significant savings from retiring long-term debt and increased tax revenues, designated members of the General Assembly, key staff from the Governor’s Office of Management and Budget, and the deputy governor encountered difficulties reaching a state operating budget for fiscal year 2024 by its May 19 adjournment date. Of course, we know that the appropriation of funds (i.e., state operating budget) and legal authority to spend those funds (i.e., budget implementation bill) are needed for Illinois state government to operate. By the time this publication mails, we’ll likely see progress on this front—and hopefully with minimal collateral damage.

Despite the headline budget challenges, the spring legislative session did see some successes. Most importantly, the Illinois CPA Society (ICPAS) was successful in getting its agenda across the finish line, including passing the Illinois Public Accounting Act’s sunset extension, increasing the attorney general’s audit threshold for charitable organizations, and making a technical correction to the optional pass-through entity tax and treatment of retired partner income. Additionally, we supported the business community by helping to minimize the impact of progressive legislation.

Accounting Act Sunset Extension

House Bill (HB) 2395 extends the sunset of the Illinois Public Accounting Act from 2024 to 2029. As required by the Regulatory Sunset Act, professional and occupational licensure acts sunset every 10 years. The purpose of this regulatory requirement is twofold: First, to evaluate the act to see if it’s still necessary. Second, to provide needed updates for ensuring the act reflects contemporary professional standards. Both actions provide an

opportunity for the Illinois Department of Financial and Professional Regulation (IDFPR) to make updates and changes for conformity purposes for all professions and occupations that it regulates.

ICPAS’ changes to the Public Accounting Act include a specific provision requiring that a CPA coordinator, which was added to the act in 2017, be classified as a full-time state employee. Due to IDFPR’s classification of the position as a professional service contract with a capped number of hours without benefits, the position has remained unfilled. We also worked to include a provision requiring CPA firms and sole practitioners undergoing peer review to be required to post specified peer review documents in the Facilitated State Board Access database. This ensures that the parameters of peer review are preserved while providing regulators with access to specified peer review documents for proper oversight.

Additionally, IDFPR added several conformity changes to the act. Notably, gender references were eliminated, and additional language was added to specify electronic communications and notices between the department and licensees.

Lastly, on behalf of the House of Representatives, the speaker’s staff requested all professional and occupational sunsets be changed from 10 years to five years. The intent behind this change is a more balanced flow of sunsetting throughout the legislative process. A 10-year cycle significantly bogs down the legislative apparatus; whereas a five-year cycle will create balance to allow legislative staff and committees to effectuate the sunsetting process.

ICPAS and IDFPR were successful in getting the Public Accounting Act sunset extension through the House and the Senate License Committee. As the third reading deadline approached in the Senate, our legislative sponsor, Sen. Suzy Glowiak Hilton (D-23, Oakbrook Terrace), informed us that for purposes of Senate passage, our sunset act extension would be consolidated with other professions in an omnibus bill.

A robust legislative agenda makes it to the end with a win. Here’s an overview of our advocacy efforts.

Attorney General Charity Audit Threshold

HB 1197 increases the attorney general audit threshold for nonprofits required to file with the Illinois Attorney General Charitable Trust Bureau from $300,000 to $500,000. Charities raising funds from $300,000 to $500,000 will now file a financial statement review with the Office of the Attorney General (OAG).

Admittedly, stakeholder organizations, including Forefront and ICPAS, would have preferred the threshold amount be changed to $750,000, but that simply was a bridge too far. Despite continued negotiations and discussions with OAG, we were unsuccessful in pushing two pieces of legislation (introduced during the 102nd General Assembly) with that threshold amount forward due to opposition by the attorney general. During our discussions, OAG provided data on enforcement actions by the Charitable Trust Bureau based on amounts of monies raised by charitable organizations. They also provided insight on how audits triggered greater scrutiny by OAG or were the basis of the enforcement action. As our negotiations were breaking off and neither of the $750,000 threshold bills had moved, we asked if they would consider alternate reports and filings for the $300,000 amounts. This resulted in an agreement for financial statement reviews and a $200,000 increase in the threshold amount for audits. Notably, the legislation includes a sunsetting, which specifically requires an ongoing review of the threshold amounts to reflect inflation and time value of money.

Aside from the increased charitable audit thresholds included in HB 1197, the Not-for-Profit Organizations Committee formed an ad hoc working group to produce a white paper on suggested improvements to charity filing with OAG. We’ve already initiated communications with OAG leadership and will formally present the suggestions to OAG once reviewed and approved by ICPAS’ Legislative and Regulation Subcommittee.

Optional Pass-Through Entity Tax Treatment of Retired Partner Income

In 2022, the Illinois General Assembly passed Public Act 102-0658 (a state and local tax cap workaround) to allow partnerships and S corporations to pay an optional pass-through entity tax for partner distributions with the partner being able to take a credit on their individual returns for the optional tax paid by the entity. However, the treatment of retired partner income, which it specifically exempts as outlined in Section 203 of the Illinois Revenue Code (see 35 ILCS 5/203(a)(2)(F)), wasn’t considered in this legislation. Senate Bill (SB) 1147 made a technical correction to the optional pass-through entity tax to ensure that the retired partner distribution was treated as retired income and not included as base income and not taxed. While this sounds simple, it can be very technical. Ultimately, the technical correction was included at the end of session in an omnibus revenue bill. During the closing hours of the spring legislative session, the omnibus revenue package (SB 1963, House Amendment No. 2) was exposed, amended several times, and eventually passed by both chambers for presentation to the governor.

Minimal Impact on the Business Community

With 30 new members in the Illinois General Assembly, there was a large volume of legislation introduced, including many bills that directly impacted employers and businesses. Fortunately, the ICPAS Government Relations team was successful in engaging with legislative sponsors, regulatory agencies, and stakeholder organizations to minimize some negative impacts on the business

community. Many of these bills, including the tax bills that were considered, are included in legislative and regulatory updates, which are accessible via the Advocacy section of the ICPAS website. I encourage you to review these postings, as we commit a great deal of time and effort to keep these updated for your reference.

Additionally, several high-profile issues were in the mix throughout the spring session. In response to Cothron v. White Castle Systems Inc., there were extensive meetings and negotiations to revise the Biometric Information Privacy Act, which resulted in a $17 billion liability for White Castle. Atypical of higher court opinions, the Illinois Supreme Court included language specifying that the General Assembly needs to revisit and amend the remedy portion of the act. Another big item was related to state assistance for the Chicago Bears’ move to a new venue at Arlington Park. So far, there’s been three tax proposals floated on this move: 1) freezing property taxes at Arlington Park; 2) a $3 tax on each ticket to be distributed to units of local government impacted by the property tax freeze; and 3) an assessment on each online sports gaming transaction that would go to the City of Chicago to help retire the outstanding bond balance used to fund Soldier Field improvements.

At this time, it’s uncertain if agreements on these issues were reached for consideration and passage. Though, most likely they’ll be revisited during the fall veto session.

Of course, before we look ahead on the legislative calendar, I’d like to express my appreciation to our legislative sponsors for getting us to the finish line. Without their leadership and efforts, we couldn’t be successful in advocating on behalf of the accounting profession.

Tax Advantaged Strategies to Help Clients Plan for Long-Term Care

As health care costs and life expectancy rates rise, CPAs should ensure their clients are preparing for the potential need for long-term care.

BY DANIEL F. RAHILL, CPA/PFS, JD, LL.M., CGMA

WITH Americans living longer, long-term care insurance has become increasingly popular as a hedge against a financial catastrophe late in life due to age, injury, illness, or cognitive impairment. Notably, the cost of a private room in a nursing home can exceed $100,000 per year, and the cost of in-home health care can be even higher. In other words, it’s important to have either insurance or another plan in place to pay for these rising expenses. Of course, one option is to self-insure (i.e., saving enough to cover the costs of care yourself). The more popular option is long-term care insurance, but the premiums can be expensive, increase over time with inflation riders, and have lengthy coverage elimination periods where it isn’t accessible. Additionally, coverage options for long-term care insurance can also limit certain types of care, such as nursing home care, home health care, and assisted living. Therefore, it may not be the best option for all your clients.

Fortunately, the Internal Revenue Code (IRC) includes several tax strategies that may help your clients better prepare for the potential costs of long-term care—here are three to consider.

1. HEALTH SAVINGS ACCOUNTS

A health savings account (HSA) is one of the most tax-efficient ways to save for long-term care costs. Created in 2003, HSAs provide significant tax savings, rollover of funds, and investment opportunities, making them a key element of any long-term care self-insurance plan, especially for younger individuals. HSAs also offer triple-tax savings:

1. Contributions to HSAs are made pre-tax or are tax-deductible, which means the taxable income is reduced for the individual.

2. Earnings from investments in HSAs grow tax-free, which means there’s no tax on interest, dividends, or capital gains.

3. Distributions from HSAs for qualified medical expenses are taxfree, which means there’s no tax on withdrawals if they’re used for health care purposes.

For 2023, the maximum amount that an individual can contribute to an HSA is $3,850 and $7,750 for family coverage. If an individual is 55 years of age or older, an extra $1,000 catch-up contribution can be made. A taxpayer typically has until the tax filing deadline to contribute.

Additionally, HSAs allow individuals to roll over their unused funds from year to year. This allows individuals to accumulate and grow their tax-free savings. HSAs are also portable, which means that individuals can keep their accounts even if they change employers, health plans, or retire.

Individuals can also invest their HSA funds in various mutual funds or other securities that often offer higher returns than traditional savings accounts. This can help individuals grow their savings faster and better prepare for future medical expenses or retirement.

Of note, an HSA can be inherited from a spouse who has the same rights as the original owner. HSAs inherited by non-spouses become taxable to the beneficiary as ordinary income. If the estate is the beneficiary, the value of the HSA is included in the final tax return and the taxable amount may be reduced by any qualified medical expenses incurred by the decedent and paid within a year after the date of death.

To be eligible for an HSA, an individual must be enrolled in a highdeductible health plan (HDHP) with 2023 minimum deductibles of $1,500 for an individual and $3,000 for family coverage. HDHPs have lower premiums than traditional health plans because they have higher deductibles, which allows employers who offer HDHPs with HSAs to their employees to save money by reducing their payroll taxes and health care costs.

Of course, there are limitations to HSAs. An individual can’t have any other health coverage, such as Medicare, so those who go on Medicare at age 65 can no longer contribute to an HSA. Also, the HSA owner can’t be claimed as a dependent on someone else’s tax return, and a 20% penalty applies if funds are withdrawn from the HSA for non-qualified medical expenses before the age of 65.

2. EMPLOYER-PAID LONG-TERM CARE INSURANCE

IRC Section 106 allows employers to exclude from their employees’ income the cost of qualified long-term care insurance premiums, while the employer may deduct the premiums as an ordinary business expense.

To qualify for this exclusion, the long-term care insurance policy must be purchased from a qualified insurance company, and the policy must provide coverage for either skilled nursing care, intermediate care, home health care, or adult day care. The policy must have a maximum daily benefit of not more than $3,000 and must have a lifetime maximum benefit of not more than $200,000.

For example, if an employer provides an employee with a long-term care policy that includes a life insurance benefit (should the employee pass away without ever utilizing the long-term care benefit), the premium would be split into two main components: the long-term care premium cost and the life insurance benefit cost. The employer would be able to deduct both components of the premium, but only the life insurance component would be taxable to the employee.

This exclusion doesn’t apply to premiums paid for long-term care insurance policies that are purchased through a flexible spending account (FSA) or HSA, and other limitations may apply.

3. SECURE ACT 2.0

Signed into law on December 29, 2022, SECURE Act 2.0 includes a few retirement provisions that can also help your clients prepare for long-term care costs.

Penalty-Free Retirement Plan Distributions

One provision from the act allows retirement plan participants to withdraw up to $2,500 per year from their plans to pay for longterm care insurance premiums without having to pay a 10% early withdrawal penalty. These withdrawals will still be subject to ordinary income taxation.

To qualify for this benefit, the long-term care insurance policy must provide at least three years of coverage, have a daily benefit of at least $100, and have an inflation rider that increases the daily benefit by at least 5% annually.

529 Plan Roth IRA Rollovers

Beginning in 2024, beneficiaries of 529 college savings plans will be allowed to roll over up to $35,000 of their funds to a Roth IRA, free of taxes and penalties. The 529 plan is a valuable option for those who can save more than needed for education, either intentionally or unintentionally. That’s because the strategy combines the tax-free growth advantages of a 529 savings plan, including possible state tax benefits, with the tax-free growth and withdrawal benefits of a Roth IRA. For a young individual with an over-funded 529 plan, this could be an excellent long-term care self-insurance strategy.

For example, let’s consider a student who rolls over $35,000 from a 15-year-old 529 plan into a Roth IRA upon college graduation at age 22. By the time this individual reaches age 67 (current retirement age), that amount will likely have grown to more than $600,000, assuming a 7% annual compounded growth rate and a $6,500 contribution per year (2023 limitation) up to the $35,000 cap.

To be eligible, the 529 plan must have been in existence for at least 15 years, the rollover is subject to the annual Roth IRA contribution limits, and only the earnings on the 529 plan funds are eligible for the rollover; original contributions and contributions made within the last five years are ineligible.

Longevity Annuity Contract Limits Lifted

While not directly related to providing for long-term care, another provision of the act uses the tax code to ensure that older individuals have a guaranteed source of income late in life by increasing the amount they can put into a qualified longevity annuity contract (QLAC)—a type of deferred annuity that’s funded from a retirement account and is exempt from required minimum distributions until distributions begin (up to age 85). The act eliminates the 25% retirement account valuation limit that previously existed and increases the amount that can be put into a QLAC from $135,000 to $200,000 (indexed for inflation).

As you can see, there are many cost-saving strategies beyond traditional long-term care insurance. Keep these strategies top of mind to provide added value to your clients as you help them prepare for life’s unexpected circumstances.

Daniel F. Rahill, CPA/PFS, JD, LL.M., CGMA, is a managing director at Wintrust Wealth Management. He’s also a former chair of the Illinois CPA Society Board of Directors and a current board member of the American Academy of Attorney-CPAs.

3 Steps to Success When Adopting New Technologies in Your Workplace

In most organizations, change is often met with resistance—especially when it comes to adopting new technologies. These three steps can help make any technological transition easier.

BY LEEJAY STEWART

CHANGE, whether personal or professional, tends to make us hesitant. Think of how you felt when buying a new house, starting a new job, or welcoming a new child or pet into your life. The feelings felt when organizational changes within the workplace occur are often no different. Organizational changes are commonly met with anxiety, resistance, and even fear. But there’s one type of change that causes an especially dramatic cultural disruption in any workplace—technological. It could be a switch from Oracle Sales CRM to SalesForce, Office to Office 365, or Office to Google Suite. No matter the upgrade, or how significant or subtle, introducing a new technology of any kind into an organization will always have an impact.

Of course, the challenge for today’s leaders is to make sure that the impact felt by their employees is a positive one. To do that,

organizations must understand the people, processes, culture, and ability of their employees to digest change. With that degree of understanding, the adaptation of new technology for positive change will be eminently doable.

Here are three steps to ensure your organization can successfully adopt a new technology and create a lasting, positive impact.

1. PREPARE YOUR EMPLOYEES

Whenever bringing a new technology into an organization, the focus must be on the process and should consider the people being required to utilize it. When you ask people to accept, implement, or make changes, you first must help them understand how that change will impact them personally. Until they can understand how the change will influence their position, well-being, and/or livelihood, it’ll be difficult to get and keep them on board. An employee can be affected adversely by the introduction of new technology, so even if the process is theoretically improved, that improvement depends on employee buy-in. Fortunately, there are ways to increase the likelihood of employee buy-in:

• Making sure that affected employees have input into the change process.

• Considering employees’ individual roles, their experience, and their level of comfort with the digital environment.

• Clearly explaining how the new technology will benefit the company—and them.

• Ensuring the technology training is thorough and effective, and that employees are ready to use it on day one.

• Establishing a readily available internal support structure, even after the technology has “settled in.” Remember, new tech is new tech. Not everyone will achieve proficiency right away.

2. CHANGE PROCESS AND INCUMBENT PROCESSES

How well does your organization understand the internal processes that it’s utilizing today? Are they documented, or are employees just doing things by rote? Understanding how things are being done today is critical to determining what needs to be improved or replaced and retained and/or enhanced. This is where the first step of preparing your employees comes back in. By involving employees early on, the likelihood of success increases. Additionally, it gives your organization a chance to identify “champions” in individual departments. Leveraging key influencers will magnify your message. These champions’ enthusiasm very often becomes contagious, and later, they’ll be able to mentor their colleagues who may need additional help with the new technology. Understanding the incumbent process is vital to building an effective change process. It also gives your organization a chance to evaluate existing processes and, with user input, find the technologies that make them smoother and faster.

3. BRING IN THE NEW TECHNOLOGY

Ironically, technology is the last step to consider. Once the people and the processes have been analyzed and understood, you can start to identify the specific technology you want to adopt. Here are a few things to consider:

• Remember your why. Make sure everyone is aware that there’s a problem and that change is necessary to fix it.

• Communicate to the people that’ll be impacted (as robustly as possible). This is important to do to the technology users and the people that are involved in each part of the adoption process alike. Everyone who the change will touch in anyway needs to be in the loop of what’s going on and why. If you don’t explain the reason for your change, your chances of avoiding employee resistance will decrease exponentially.

• Identify the champions. As previously mentioned, these aren’t the typical IT people. These are the people in, and owners of, the business process. When identifying change champions, consider individuals who are respected and trusted throughout the organization. The ideal change champion will have influence and will be sought out for insights, direction, and information. Once you’ve chosen your champions, dedicate time to communicating and working with them, collecting their feedback, etc. Of course, you won’t be able to incorporate all their ideas, but you can address their concerns about the change and make them feel heard—and like the other employees, you’ll want to give these champions the why (or why not).

• Utilize HR. If the change could result in lost jobs, it’s imperative to bring HR in to avoid any wrongdoing. They’re the pros, and they can generally handle human change management better than, for

example, IT. And whenever there’s a personnel reduction, there’s always the chance of litigation.

A final key point to consider is that the new technology you’re planning to adopt should be making everything in your firm or organization operate better and more efficiently. For example, it should be automating manual processes that are error-prone and redundant, increasing the velocity of all internal and external processes, enabling the organization to scale easily when needed, or increasing revenue and profit. Of course, a learning curve needs to be expected, but your new technology should ultimately make the jobs of employees easier.

If given a choice, most people choose what’s termed “the path of least resistance” (i.e., keeping the status quo and doing what’s always been done). That’s why technological changes can’t be optional. For any organization to reach its full potential, it must have everyone on the same page. Leadership should set a cut-off date to implement the new technology (provided no extension has been granted), and when that date arrives, it’s out with the old and in with the new for everyone—no exceptions.

Whether in business or in life, change is constant. The business environment is changing faster every day, and those who don’t keep up risk obsolescence. In the accounting and finance profession, change is necessary. But just as lack of change can doom an organization, fumbling the introduction of change into your workplace culture can also be harmful (if not fatal).

LeeJay Stewart is the CEO and managing director of StratusCommManaged IT Services. He’ll be presenting on this topic at the ICPAS SUMMIT23. Learn more at www.icpas.org/summit.

Is AI the Solution to Acquiring Accounting Talent?

Artificial intelligence could reduce the time and costs of hiring, but what risks accompany this new approach to acquiring accounting talent?

BY ANNIE MUELLER

RECRUITING in any industry is a bit of a numbers game. Finding the best candidate for a role means sorting through hundreds or maybe thousands of resumes to screen potential candidates—and that’s only the beginning of the hiring process. For each short-listed candidate, hours of interviews, multiple discussions, follow-ups, and documents may be required before a formal offer ever materializes.

Meanwhile, the accounting and finance profession has been in a hiring crisis for years; there are fewer accounting majors and fewer accounting graduates becoming CPAs, according to the AICPA’s “2021 Trends” report. The smaller talent pool is also exacerbated by the growing number of accounting retirees: 75% of accountants will be eligible to retire in the next two to three years.

Of course, these compounded issues only increase the pressure on hiring managers, recruiters, and HR professionals who are already maxed out. A recent survey from KarmaCheck and Findem

found that 73% of HR leaders experience burnout directly related to the hiring process. The recruiting process is tough for candidates, too. They’re worn out by application requirements and stressed out by uncertainty. When a candidate experiences poor communication or follow-up delays, there’s no guarantee they’ll wait instead of walking. Therefore, it’s not surprising that organizations are keenly interested in tools to improve the laborious aspects of identifying and hiring the top candidates.

One attractive and increasingly popular solution to this challenge is the use of artificial intelligence (AI) technology that mimics human intelligence to perform, automate, and improve tasks (i.e., a computerized decision-making model). According to a March 2023 Forbes article, “How AI-Powered Tech Can Help Recruiters and Hiring Managers Find Candidates Quicker and More Efficiently,” many businesses today are using AI to:

• Identify potential candidates who may not have even applied for the job.

• Screen large volumes of resumes, matching job requirements with candidates’ qualifications and experience.

• Analyze candidate data, including resumes, social media profiles, and online behavior.

• Engage with candidates using chatbots to help and answer questions about the job or application process.

• Conduct pre-screening interviews.

Though despite AI’s overwhelming potential, experts warn it’s not all good. “There are several considerations around AI, and people are wary about it,” says Elizabeth Pittelkow Kittner, CPA, CGMA, CITP, DTM, vice president of finance at GigaOm. “We need to figure out how people can use AI resources in ways that are beneficial.”

When considering AI’s potential use for hiring practices, a good place to start is to understand where the possibilities of AI meet their limits.

A TOOL, NOT AN EMPLOYEE

Chris Denver, CPA, director of accounting and reporting advisory for Stout, says the use of AI in business isn’t anything new. What’s new is the interface that makes it very easy for anyone to use. For example, the conversational format with today’s AI programs, such as ChatGPT, makes it seem like you’re chatting with another person, albeit one who occasionally makes bizarre statements and doesn’t mind answering the most inane queries. Denver cautions that AI isn’t and shouldn’t be treated as a staff replacement. “People may assume when they’re interacting with AI that it’s omniscient, but it’s not—it’s built by fallible humans based on fallible data sets.”

Kittner also warns that sometimes the responses we receive from AI are inaccurate or the data is no longer relevant, which is a special concern when using AI to help craft job descriptions or other hiring documents with compliance considerations. “We know that tools like ChatGPT aren’t up to date. ChatGPT currently has limited knowledge of events after 2021, and the laws are changing all the time.”

Beyond potential accuracy issues, users need to remember that AI can’t be tasked with decision-making, subjective assessments, or nuanced communication. While AI can process data faster than any human, it’s important to remember that faster isn’t the same thing as smarter. “AI tools are still evolving. They are certainly helpful; however, they are not perfect,” Kittner says. “Human oversight is incredibly crucial. Anytime you are using AI, ensure people are reviewing the work.”

As organizations identify which parts of the hiring process can be shifted safely to AI, it’s important to examine AI’s ethical limits, as well.

DATA ISN’T NEUTRAL

The appeal of AI is its ability to process vast amounts of data in very little time; the processing power far exceeds anything a human brain can accomplish. But it’s important to note that data isn’t neutral. Even if AI is trained on factual information, the selection of those facts can be biased. AI has no built-in ethical barometer by which to measure the data it’s given—bias in means bias out. “AI takes a huge data set and distills it to the next logical thing, the next expected expression in the conversation,” Denver explains. “But it’s not able to necessarily improve it or be objective about itself.” For hiring practices, these biases might result in small mistakes, such as rejecting an applicant who’s actually a great fit because a few key words were missing from the resume, or much more serious mistakes, such as exhibiting gender or racial bias. To avoid these mistakes, Kittner advises that those “using the tool need to know

the potential biases and build a human review component into the process of using the AI tool.”

Countering bias is just one important consideration; another is protecting confidential data. “You have to keep in mind that AI is taking your information and contributing it to a big pot of other information,” Denver says. “So, the security issues are pretty broad.”

He cautions that it might be better for firms to wait on AI implementation another year or so, until there’s been more development and options to keep data secure. In the meantime, operate under the assumption that anything shared with AI also gets shared with a much wider audience.

THE COSTS OF IMPLEMENTATION

Accounting professionals know the danger of hidden costs. When implementing AI, leaders need to consider everything from the price of the software to the ongoing cost of training, governance, and mitigating security risk. “Governance is important for any process you have, and to ensure ethical behavior, policies and procedures should be written and followed,” Kittner says. “Set up documentation and disclosures so that people know that AI is being used, and that those who are using it understand the tool, are well trained on it, and know the pitfalls.”

Here are four steps to take when implementing AI in your organization:

1. Evaluate your organization’s recruitment process from beginning to end and identify the areas where it needs to improve. Not sure? Ask the last hire—they’ll have an opinion.

2. Assess the scale of each identified need. Denver stresses that organizations will get more value out of AI when using it to automate and streamline high-volume, rather than one-off, tasks. “As you would with other tools or software, do a cost benefit analysis for these AI products.”

3. Consider the nature of the information involved in each task you’d want to automate. Then, determine the security measures needed to protect that information.

4. Establish clear responsibility for who’s overseeing AI use and get input from all the key players before implementation. Kittner says to make sure there’s copious communication around AI: who’s using it, why are we using it, and does it make sense with our corporate strategy? “These are conversations organizations need to have as they are introducing AI into their processes.”

Like any process requiring high-volume task completion, Denver says a little efficiency goes a long way. “We’re seeing interesting opportunities with AI to leverage time better, and that’s only the beginning.” But, he cautions, as organizations move forward with AI, it’s critically important that they stay aware of the risks. AI and its potential rewards don’t exist in a bubble; they need to take their place in a hiring process with clear responsibility and governance.

“Ultimately, you should not replace human discernment and context with AI,” Kittner says. “But AI can be used for efficiency. Try it out and see what it can do. Just make sure to incorporate AI in ways that are appropriate, ethical, and creates positive experiences.”

Annie Mueller is an experienced financial writer and principal of Prolifica Co. She works with clients from individuals to large financial companies and is a frequent contributor to various financial and business publications.

Can Pay Transparency Help CPA Firms Attract and Retain Talent?

New pay transparency laws are requiring employers to disclose wages to prospective candidates and/or current employees. Though not required in all states, many employers—including CPA firms—are gambling on using the practice to attract and retain talent.

BY CAROLYN TANG KMET

In March 2023, Alex Cheney was laid off from his role as a senior technical recruiter at a global software company headquartered in San Francisco. Having spent more than a decade in the talent acquisition space, Cheney is a seasoned professional who’s well aware of the latest trends impacting the hiring and recruiting landscape—and now he’s leveraging that knowledge in his own job search. One of those trends is the passing of pay transparency laws, which require companies to disclose salary ranges in job descriptions.

“As a current job seeker, seeing the pay range of a role has saved me from spending a lot of time applying to jobs that don’t align with my expectations, skill level, or needs,” Cheney explains.

Currently, about 20 states, including Illinois, have some variation of legislation designed to address wage disparities and promote fair compensation practices in the job market. Additionally, there are several cities that have passed their own ordinances. One of those cities is San Francisco, where the Parity in Pay ordinance requires employers with 20 or more employees to provide pay ranges in their job listings.

“Prior to California passing the ordinance, I worked for an organization where a lack of internal pay equity was uncovered,” Cheney says. “As you can imagine, this news quickly filtered through the entire team, causing multiple individuals to question management.” Cheney says the incident contributed to a significant decrease in employee morale, leading to rapid attrition in a competitive job market, which made it challenging for the organization to backfill its vacated roles.

Of course, CPA firms are no stranger to these types of staffing challenges as retaining and attracting new talent continues to be one of greatest issues impacting the accounting profession today. The National Association of State Boards of Accountancy reports that the number of new CPA candidates has decreased by 33% in recent years, dropping from slightly over 48,000 candidates in 2016, to 32,186 candidates in 2021.

As a result, CPA firms have spent time gambling on ways to expand their hiring pool, and for some, that means being more transparent about their pay—whether they’re required by law or not.

The Game Is Changing

Abraham Singer, assistant professor of business ethics at Loyola University’s Quinlan School of Business, believes secrecy turns wage negotiations into a game of poker. “Without pay transparency, job seekers can’t see the hiring company’s cards and must guess how much to wager,” Singer says. “Pay transparency can help turn everybody’s cards over, so everyone is operating with similar information.”

Shirley Borg, head of human resources at Energy Casino, agrees. She says being open and transparent with employees is a priority for the company; they’ve implemented a system where employees can view their pay grade, along with the minimum and maximum salaries for that grade. “This helps employees understand how their pay compares to others in their position and ensures that there’s no pay discrimination based on gender or any other protected characteristic,” Borg says.

In her role, Borg regularly oversees salary reviews to ensure that employees are fairly compensated based on their experience and qualifications. “This helps us attract and retain top talent by showing that we value our employees and are committed to their growth and development,” Borg explains. “Additionally, we believe in providing a comprehensive benefits package to our employees, including health insurance, retirement plans, and paid time off. This helps create a culture of fairness and transparency and ensures that our employees feel valued and supported.”

Especially in today’s climate, where the demand for CPAs outstrips the supply, pay transparency laws provide job seekers with greater leverage. Neil Dickinson, vice president of compensation services and pay equity solutions for OutSolve, an affirmative action consulting firm, says that applicants who have a clear understanding of a job’s pay range are empowered to not undersell their services. “Pay transparency allows for applicants to apply for a job with confidence the salary range meets their pay requirements and helps them avoid wasting efforts on jobs that won’t pay enough.”

For employers, pay transparency can also drive greater efficiency in the hiring process. If the salary an organization is offering doesn’t align with a candidate’s expectations, candidates will likely drop out of the hiring funnel earlier, reducing the amount of time hiring teams commit to applicants who aren’t likely to accept an offer.

Secrecy Has Consequences

In the past, discussing compensation was considered taboo, inappropriate, and improper in many workplaces. Unfortunately, this cultural norm resulted in negative consequences for employees, fostering a discriminatory corporate environment that led to significant pay gaps based on gender and race. For instance, employer biases against women and minorities could affect hiring, promotions, and salary decisions. Without accurate insight into pay ranges, female and minority job applicants may be unaware that their salaries are being undercut.

The impact of this can be seen in a 2021 income report issued by the U.S. Census Bureau, which shows that women who work fulltime, year-round jobs earn 84 cents for every dollar earned by men in the same category. In regards to racial inequity, the U.S. Department of Labor found in 2021, for every dollar earned by white, non-Hispanic men, Black women were paid 67 cents, and Hispanic women (of any race) were paid 57 cents.

Singer stresses that lack of pay transparency disproportionately benefits those that have more access and privilege. “It tends to benefit the savvy, seasoned, and confident when it comes to negotiations over pay and salary,” Singer says. “If it’s not clear what the going rate is for a position, then those who have more experience know what to ask for in a way that someone new to the industry might not, including those from working-class backgrounds or recent immigrants. Similarly, those inclined to be more brazen tend to ask for more and are often rewarded for it.”

According to Singer, this method of negotiating pay can also affect wages in a gendered manner, contributing to the wage gap between men and women in the workforce. Recent research conducted by Linda Babcock and Sara Laschever and presented in their book, “Women Don’t Ask: Negotiation and the Gender Divide,” reports 2.5 times more women than men say they feel a great deal of apprehension about negotiating, and about 20% of adult women say they never negotiate.

Is Pay Transparency the Roadmap to Equity?

Many experts believe that pay transparency can lead to greater equity in wages by forcing employers to be more thoughtful and equitable about salary decisions.

Jon Hill, CEO and chairman of The Energists, an executive search and recruiting firm, advises companies to consider pay transparency

as an opportunity to recognize and address potential biases, and to develop more open communication about equitable compensation across the organization. By doing so, organizations will not only build credibility with current employees, but also with potential new hires.

“In my experience, most companies that have inequitable pay practices didn’t establish them intentionally,” Hill says. “Instead, these practices are the result of unconscious biases and/or a lack of communication between leadership and employees.”

Hill stresses that pay transparency sends a message that a company has nothing to hide when it comes to their salary rates, giving candidates more trust and faith in the organizations they’re applying to: “Transparency has additional benefits for companies that pay a competitive rate because it can help entice qualified professionals to join your organization when they know you pay your team members in accordance with industry standards.”

Neema Parikh, the recruiting manager at Topel Forman LLC, a tax and accounting firm with a presence in Chicago and Denver, says disclosing a pay range creates more equality between genders and minorities. “It enables you to be as least biased as possible, which opens your potential hiring pool up as much as possible,” Parikh says. “Because when you put in a salary range, you’re not thinking about whether you’re targeting a man or a woman.”

While Illinois pay transparency laws require employers to provide equal pay to employees for work that requires equal skill regardless of sex or race, employers aren’t specifically required to disclose salary ranges in job descriptions. Colorado’s pay transparency laws are stricter, however, and require all employers regardless of size or industry to disclose the salary ranges for open positions in job postings and in discussions with job applicants. Although Topel Forman has offices in both states, the company opted to include salary ranges for job postings in both regions.

“Pay equity laws give us an opportunity to understand the market as a whole, without necessarily tying salaries to regional trends,” Parikh says.

Parikh notes that pay transparency in Colorado allows for the examination of salary ranges at competing firms, providing marketinformed insight into pay parity. In fact, a recent new hire salary negotiation led to a salary analysis, which resulted in an increase in base associate pay at the firm.

“We thought we were competitive until one of our candidates countered our offer. So, we analyzed our competitors’ job descriptions and salary ranges and compared them to our internal salaries,” Parikh explains. “We discovered that our base pay was a few thousand dollars lower, so we adjusted our base associate pay across the board to align with the market.”

Challenge Considerations for Firms

Of course, being transparent can present some challenges for firms to consider. One potential challenge is that it could result in a market-wide increase in salaries as workers are more likely to initiate informed negotiations, and as employers start responding to market conditions.

“For CPA firms, pay transparency laws will create greater visibility to market pay within the industry,” Dickinson explains. “This may

lead to more accounting applicants having higher expectations for pay and gravitating to employers that pay above market rates.”

Dickinson adds that another likely outcome of pay transparency is wage compression, which occurs when higher competition for new talent drives smaller differences in pay between new hires and long-term employees.

In anticipation of this market shift, many firms are exploring alternate methods of enhancing their compensation packages. “We’re seeing an increase in demand for collaborative work environments, flexibility in working hours, and an emphasis on the type of work and responsibilities associated with the positions,” Parikh says. “Culture, benefits, remote work, and flexibility are all huge benefits that candidates are looking for.”

Another challenge associated with pay transparency is that it only serves to regulate the quantitative aspect of wages. In reality, wages are also tied to an employee’s perceived value or worth within a company or industry. Higher wages may indicate that an individual is more highly skilled or experienced in their field, or that their contributions to the company are particularly valuable. Conversely, lower wages may suggest that an individual is less skilled or experienced. Additionally, wages are more than just a tool for compensation. Wages are also often used to motivate employees, which adds a psychological component to pay transparency.

“Wages mean different things in different contexts,” Singer emphasizes. “If we’re trying to incentivize hard or innovative work, for instance, we want to ask whether some wage effectively accomplishes that. If we’re trying to give people the market price for their skill sets, we’ll want to figure out how relatively scarce their capabilities are relative to someone else, and whether the wage reflects that.”

Firms should also anticipate the potential negative consequences that may arise when salaries are released internally. “Transparency can breed resentment. If I know what everyone else makes, I may start making unflattering comparisons, which may undermine the effectiveness of the wage as an incentive,” Singer explains. “Someone may be happy with their wage until they learn they’re the lowest paid in their unit, and then they feel underappreciated.”

Singer also says that it can get tricky when firms reward longstanding, loyal employees by increasing their compensation. These wage increases aren’t necessarily tied to their specific skill sets or to the market rate for the position, yet they’ll impact the salary range disclosed in job descriptions, thus driving market salaries higher and making future negotiations with new talent more challenging. While there are many important implications that companies need to consider when implementing pay transparency, the long-term societal and market benefits certainly outweigh the challenges.

“The equity and efficiency that pay transparency enables is worth these management difficulties,” Singer acknowledges. “One way to navigate such difficulties is to actually follow the logic of transparency all the way down. Companies shouldn’t just be transparent about pay ranges, but also with how and why pay can sometimes depart from the market rate.”

Pay transparency laws will undoubtedly shift the balance of power between job seekers and employers and intensify the hiring process in competitive fields like accounting. However, CPA firms willing to play the game may see pay transparency as an opportunity to not only correct systemic bias and create a path to pay parity, but also use it as a beneficial recruiting tool to attract and retain talent.

Carolyn Tang Kmet is a senior lecturer in Loyola University Chicago’s Quinlan School of Business and a frequent Insight contributor.

For some, earning the CPA credential isn’t just about gaining more career opportunities—it’s also a pathway to a new home and the American dream.

BY NATALIE ROONEY

It’soften said that earning the certified public accountant (CPA) credential opens doors and creates new opportunities for those that pursue it. Whether providing more earning potential, job security, credibility with clients, or opportunities to pursue more unique business niches, most CPAs will say that the license has changed their lives for the better. Perhaps, this is even more so for CPAs whose career paths began outside the United States.

Several CPAs who immigrated to the U.S. share what earning the CPA has awarded them throughout their professional journeys—and how they’re using their success to inspire future generations of CPAs.

An Affinity for Numbers and People

Hilda Renteria, CPA, came to the U.S. from Mexico as a teenager. For Renteria, her interest in accounting started early in her childhood. She remembers how she enjoyed—and had an affinity for—helping customers and doing calculations at a friend’s family business back home. Her father, while not a trained accountant, also performed accounting duties at his job. “I was so interested when he spoke about accounting,” she says.

In high school, Renteria took a bookkeeping class, and the teacher encouraged her to consider accounting as a profession. “She said it was respected and paid good money,” she recalls. “I loved the assignments in that class.”

As she entered college, Renteria knew she would major in accounting and soon learned about becoming a CPA. “Our professors stressed the importance of the license,” she says. “If you were getting an accounting degree, it was the natural next step.”

After graduating from the University of Illinois Chicago (UIC), Renteria accepted a position in the First National Bank of Chicago’s internal audit department. While at the bank, her future business partner, Maria de J. Prado, CPA, invited Renteria to join her in starting their own CPA firm. Now, 33 years later, Prado & Renteria CPAs Prof. Corp. is the largest Hispanic woman-owned CPA firm in Illinois.

A CPA on Two Continents

Influenced by her father who performed accounting duties for the government, Leilani Rodrigo, CPA, CGMA, began her accounting career more than two decades ago as a CPA with Ernst & Young in the Philippines. After a colleague tipped her off to a job opening at E. C. Ortiz & Co. LLP (now Roth&Co.) in Chicago, Rodrigo made the decision to relocate. When she first arrived in the U.S., she found it hard to adjust to a different culture and environment but was committed to staying for at least 10 years with the plan of eventually returning to the Philippines to be near her family. “But after a year, I knew I wanted to remain here permanently,” she says. “It was challenging for a few months, but the payback was so great.”

Once she settled into the firm, Rodrigo’s boss encouraged her to sit for the CPA exam in the U.S. Without CPA reciprocity between the U.S. and the Philippines, Rodrigo needed to go through the exam review process all over again to address the differences in certain subject areas, especially taxation. “He emphasized it was such a great profession and designation, and since I had it in the Philippines, why not in the United States?” she recalls.

For Rodrigo, taking the steps to earn her CPA here was an investment. “For me to have a competitive edge in the job market, whether I stayed at the firm or went elsewhere, I believed I needed the designation. There are a lot of opportunities in this profession, and that’s why I love it.”

Today, Rodrigo is a partner at Roth&Co. and serves on the Illinois Board of Examiners, the Illinois CPA Society Board of Directors, and the CPA Endowment Fund of Illinois Board of Directors.

From Intern to President

Anoop Mehta, CPA, CGMA, immigrated to the U.S. from India when he was just 12 years old and had to adapt quickly to a new culture and language. His father was a chartered accountant in India and chose to move the family to the U.S. for Mehta and his siblings to have access to a better education.

Mehta saw how respected his father was as an accountant, and then an influential high school teacher mentored him in accounting studies. “Accounting is the language of business, and I saw how it could help businesses keep track of their finances and budget properly,” he says. “The idea of helping a business be successful was appealing to me, and that’s what attracted me to the field.” After graduating from the University of Maryland, College Park, Mehta joined one of his father’s clients, a scientist, as an intern. At the time, there were just two other employees. “I got the job because I had taken typing classes and could type,” he laughs.

The summer internship turned into a part-time job during the school year and a full-time job during holidays and summer breaks. By the time Mehta graduated, the company had grown enough that he was asked to stay on and do accounting work. And that’s where Mehta stayed for the next 41 years, eventually becoming president of the company.

Despite Mehta’s success, he readily admits that he almost gave up on his dream of becoming a CPA, as it took him several tries to pass the exam. “By the time I turned 30, I decided I really didn’t want to keep trying,” he admits. “I was questioning if I wanted to continue because I hadn’t passed. So, I gave up.” But after encouragement from his wife, he renewed his efforts and passed the exam. “That’s when I felt my career really shot up and accelerated, in large part because of the resources available to me as a CPA in developing my skill sets. It wasn’t necessarily the technical skills, like tax or audit, but really the connections I made with people who helped me grow as an individual and build my leadership skills.”

Mehta is now chief strategist of the aerospace firm Analytical Mechanics Associates. During the 2022-2023 fiscal year, he served as chair of the AICPA and of the Association of International Certified Professional Accountants. He’s also a past chair of the Maryland Association of CPAs.

Providing a Unique Perspective

Renteria says being an immigrant brings a different viewpoint to her decision-making processes—both personally and professionally. “Growing up in another country automatically gives me a different context and perspective,” she says. “I bring that to all areas where I participate.”

Mehta agrees. “A different country and background combine to create a different perspective,” he says. “I have an appreciation for how that’s helped me throughout my career.” He describes how he learned early on how to get along with people from different backgrounds, accepting and respecting differences and negotiating. Mehta grew up in a small house with 15 people, a number that swelled to 30 each summer when cousins came from other parts of India. “Living with so many people, you learn to quickly adapt and get along with everyone,” he says. “These are critical skills, especially when you look at the world today.”

Mehta says that in the early years after becoming a CPA, he realized there weren’t a lot of people who looked like him, but that’s exactly why he loves the accounting profession. “Even though they didn’t look like me, they were willing to help,” he reflects.

During his year as AICPA chair, he spoke with thousands of students. “The message I would give to students, or anyone looking to get into this profession, is that it doesn’t matter what you look like or what your background is. There’s a place for you in this profession and there are people to help and guide you. There are so many good people willing to help, and I wouldn’t be where I am today if not for that.”

Rodrigo believes that today’s clients are also looking for firms they can connect with and are representative of their own diverse workforces. “Clients actively seek those who can provide a different viewpoint or process when teamwork and diverse voices are needed for solving problems,” she says.

Inspiring Future Generations

According to Worth.com, Gen Z may be the most entrepreneurial generation ever, with 62% of Gen Zers indicating they’ve started—or intend to start—their own business. Renteria says that’s exactly why being a CPA has been so tangible for her, and hopefully, for future generations as well. “This profession provides entrepreneurial opportunities. But even if you don’t have that desire, this is a lifelong profession where you’ll never be bored because of the opportunities to learn and grow.”

Renteria says both she and Prado can see the influence they’ve had on the next generation: members of their immediate families are accountants, and through the firm, they’ve established an endowment fund at UIC that provides scholarships to immigrant students pursuing an accounting degree. “When I look at the past 33 years, I see all the opportunities our firm has created for other accountants who came through our doors, gained experience, pursued the CPA, and then moved on to continue their professional journey,” she says. “It’s so fulfilling to see them succeed and to know they’ll continue to inspire others in their networks.”

One success story Renteria shared was about a young woman at her firm who, as a child, carried a little sales and receivables ledger with her to record transactions and produce reports at her father’s business in Mexico. That young girl became an accountant in Mexico, came to the U.S., joined Renteria’s firm, earned her CPA, and is now a successful CPA advising businesses in both countries.

Another employee at Renteria’s firm immigrated to the U.S. from South Korea and was able to use his expertise to advise his family on tax matters for their small business. “To me, these are examples of the impact of the CPA designation,” Renteria says. “We touch other immigrant families.”

When Rodrigo looks back at her journey and what brought her to the U.S., she describes the opportunities available to her as “immeasurable.” “I was able to achieve the American dream,” she says. “My immigration story has given my own kids a unique insight into the opportunities available to Americans. They see what good work ethic, perseverance, integrity, and a desire to give back can accomplish.”

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.

Illinois’ Black CPAs

A Century in the Making

2023 marks the 100th anniversary of the licensing of Illinois’ first Black CPA, Arthur J. Wilson. A century later, his legacy continues to make a lasting impact on Illinois, the accounting profession, and the Black CPAs following in his footsteps.

BY TERI SAYLOR

While John W. Cromwell Jr. indisputably opened the door for Black accountants to become certified public accountants (CPAs) when he became the first one to be licensed in the United States in 1921, Arthur J. Wilson can be credited with paving the way for further Black CPA success in Illinois and beyond. Wilson, who received his CPA license two years after Cromwell in 1923, was just the second Black CPA licensed in the U.S. and the first to earn the coveted CPA credential in Illinois. Wilson’s life story, and the legacy he leaves behind, may be best viewed through the lens of the careers he helped launch and the impact he made, not only on the accounting profession but also on Illinois and the City of Chicago.

Chicago’s Role in Growing Black-Owned Businesses

Chicago’s emergence as a major center of professional accountancy began during the 1890s, but it was around the turn of the 20th century that things began to change dramatically. More than 90% of the nation’s Black population had been living in the segregated South, where they were excluded from the economy in many ways. Starting around 1910, more than 6 million people moved to the North and West, with many settling in the Windy City. By the end of the first decade of the 20th century, Chicago had become fertile ground for Black business owners and professional service providers who had arrived during the Great Migration.

“Life was better in Chicago than almost anywhere else in the United States,” says San Francisco State University Professor Theresa A. Hammond, Ph.D., author of “A White-Collar Profession: African American Certified Public Accountants Since 1921.” “African Americans found jobs that hadn’t been available in the South, and they were able to start businesses.”

One neighborhood of importance was the South Side’s Bronzeville. Bronzeville was an established Black neighborhood that had surpassed a resident population of 100,000 by 1920.

“Bronzeville was literally a city within a city,” says John E. Adams, CPA, controller at Infrastructure Engineering in Chicago. Home to hundreds of retail shops, doctors’ offices, funeral homes, and small mom-and-pop businesses, Bronzeville’s economy was further boosted by factories like Joe Louis Milk Company and Parker House Sausage, as well as large, national brands, including Fuller Brush Company and Johnson Publishing Company (publisher of JET and EBONY magazines).

“These were companies that needed CPAs, and they provided Black accountants with important opportunities, because even into the 1950s and 1960s, the then Big Eight accounting firms were reluctant to hire African Americans,” Adams says.

To accommodate its growing local economy, Bronzeville also fostered insurance companies, banks, and credit unions, including Binga State Bank, the first privately-owned African American financial institution in Chicago. The bank helped many Black-owned businesses grow and provided important employment opportunities for Chicago’s emerging class of Black leaders—among them was Wilson, who served as the bank’s vice president and head cashier at the time.

A Career That Spawned Generations of Black CPAs

In her book, Hammond traces Wilson’s career, starting in the early 1920s when he passed an exam qualifying him for a job with the IRS. However, the agency wouldn’t hire African Americans at that

time, so he set his sights on a new direction—obtaining a CPA license and starting his own accounting business.

At that time, Illinois hadn’t yet instituted an experience requirement for taking the CPA exam or being licensed, so Wilson was able to sit for the exam, pass it, and open his own accounting practice where he did taxes for many small business owners at night while working at Binga State Bank during the day. It wasn’t until 1927, four years after Wilson was licensed, that Illinois’ State Board of Accountancy adopted an experience requirement, which created a major obstacle for aspiring Black CPAs, as essentially no whiteowned organizations would hire Black professionals, denying many of them the work experience needed to become licensed CPAs. During an era of seemingly insurmountable race-related obstacles, Wilson began dedicating his life’s work to helping other Black accountants and aspiring CPAs succeed. “Arthur Wilson was key in Illinois because he mentored so many accounting professionals,” Hammond notes. Perhaps most crucially, he’s credited with hiring and mentoring Mary T. Washington Wylie as an assistant at Binga State Bank, who would later become another prominent figure in Chicago’s Black history.

Then Wall Street crashed in 1929, sending banks and businesses into disarray, including Binga State Bank. Following the bank’s collapse in 1930, Wilson went on to work as an accountant for the state of Illinois, but he continued to mentor young Black accountants at his small practice and used his position as a prominent member of the Black community to promote racial equality.

With Wilson’s encouragement, for example, Washington Wylie enrolled in an accounting program at Northwestern University and graduated in 1941. She apprenticed with Wilson to officially fulfill her work experience requirement and went on to earn her CPA license in Illinois in 1943, establishing her as the country’s, and therefore Illinois’, first female Black CPA.

Like Wilson, Washington Wylie had started her own evening-hours accounting practice, operating out of a South Side basement, to serve the Black community.

And, much like Wilson, Washington Wylie spent the rest of her life shepherding other young Black accountants into their own careers as she grew her basement practice into a prominent Chicagobased, black-owned accounting firm.

Washington Wylie Changed Lives

Washington Wylie is known for treating her employees as if they were part of her family, but at the same time, insisting they work hard and deliver excellent results. This is especially true for Hiram L. Pittman, Washington Wylie’s first employee. Pittman ultimately became a partner of the firm in 1952, forming Washington & Pittman. Notably, Pittman was also No. 19 on the list of the first 100 Black CPAs.

Hammond says it’s hard to imagine the barriers they had to overcome, but the thing that really stands out about Chicago’s Black CPAs is how much they helped each other. She notes that Washington Wylie helped build a community.

A part of that community was Lester H. McKeever Jr., CPA, JD, partner at Mitchell & Titus LLP and a founding member of the CPA Endowment Fund of Illinois. McKeever earned his CPA license in 1960, placing him at No. 61 on the list of the first 100 Black CPAs. He says Washington Wylie’s challenging but supportive training techniques changed his life, and her adherence to perfection taught him discipline.

“Working for Washington Wylie, you didn’t make any mistakes, because if you did, you had to start over, and the lessons I learned from that experience just kept me moving forward,” he says. McKeever became a partner at the firm in 1960 and managing partner in 1976, forming Washington, Pittman & McKeever LLC. The day Washington Wylie retired is still fresh in McKeever’s mind: “Our firm gave her a bracelet with about 30 charms bearing the names of all the accountants she had nurtured to become CPAs.”

At 89, McKeever isn’t quite ready to rest on his laurels, pen his memoir, or cap his long career, of which some notable highlights include serving as chairman of the Chicago Federal Reserve and closing the acquisition of Washington, Pittman & McKeever by Mitchell & Titus in 2018. Today, Mitchell & Titus is the largest minority-controlled accounting, tax, and advisory firm in the U.S. Still working part time as a partner in the firm, McKeever says he’s content to cement his lineage in a long line of trailblazing accountants who rose to prominence in Chicago on the influence of those who came before him.

Though, despite the hard work of his forefathers, McKeever acknowledges progress has been slow. Starting with Cromwell in 1921, it took 44 years for just 100 Black accountants to become licensed CPAs, 27 of which were licensed in Illinois.

Paving the Way for Tomorrow’s Black CPAs

Across the nearly half-century it took for just the first 100 Black CPAs to be licensed, the Big Eight accounting firms continued their reluctance to hire Black CPAs. Then, even among the firms open to hiring Black CPAs, Adams notes the firms’ clients often didn’t want Black people working on their engagements. Though, Adams says that began to change after passage of the 1964 Civil Rights Act: “By the early 1970s, African Americans began getting jobs at some of the major CPA firms in Chicago.”

Adams, who received his CPA license in 1978, originally set out to become a lawyer. After working at a law firm during a high school summer program, advice from one of the attorneys changed his trajectory. “I asked him to recommend a good subject to major in to become a lawyer, and speaking as a sole practitioner, he told me he would have majored in accounting so he could keep his own financial records,” Adams recalls.

Adams took that advice to heart, and after graduating from St. John’s University in Minnesota, he passed the CPA exam on his first try, returned to Chicago, and went to work for Arthur Young, eager to build upon Chicago’s Black business legacy. At the top of his todo list was meeting other Black CPAs. He reached out to the National Association of Black CPAs only to learn the association lacked a Chicago chapter, so he helped start one.

More recently, June 2020 saw the launch of the National Society of Black Certified Public Accountants Inc. in Chicago, whose mission is “to increase the number of Black CPAs by providing the most relevant knowledge, resources, and advocacy; and to promote cultural competence, diversity, and inclusion within the profession.”

Despite both historic and recent efforts, growth among Black CPAs has shown slow advancement over the years. In its 2022 Insight Special Feature, “A CPA Diversity Report: Uncovering the Barriers to Success,” the Illinois CPA Society (ICPAS) called attention to the imbalance and inequity persisting within the profession. Of note, the report highlights that 12.4% of the U.S. population is Black, according to the U.S. Census Bureau’s 2020 census. Yet, according

to the AICPA’s “2021 Trends” report released in early 2022, the Black population of CPAs in U.S. CPA firms is only 2%.

Adams, McKeever, and Hammond all agree with the society’s position that there’s much more work to be done to improve diverse representation, and it starts with youth and changing the perception of the CPA profession.

“The reality is not much has changed,” Adams says. “If you compare the numbers today to 10 or 20 years ago, they’re not dramatically different.” He believes progress will take involvement from major corporations and CPA firms to be more grassroots oriented. “We’re going to need to get out into the schools and promote the profession to kids because we have to spark their interest when they’re young.”

For McKeever, who owes his career to Washington Wylie, establishing an endowment fund in her memory focused on advancing diversity in the profession was the best way he could honor her legacy. The Mary T. Washington Wylie Opportunity Fund was created in 2005 through a collaboration with ICPAS and the CPA Endowment Fund of Illinois. The named fund supports scholarships and development opportunities that encourage and prepare Black and other underrepresented minorities to become CPAs. Its prized program is the award-winning Mary T. Washington Wylie Internship Preparation Program, which helps place minority college students in the accounting profession by providing access to training, resources, scholarships, and mentors. At the end of the program, employers interview participants for a variety of paid internships that could lead to full-time jobs.

“The internships lead to students’ success,” McKeever says. “Every state looking to increase diversity should have some kind of internship program, because out of those internships come jobs that might not be available otherwise.”

Wilson seemingly understood this a century ago. Today, if Wilson was still alive, McKeever says he would give him a simple thank you. “Arthur Wilson was bigger than life for many of us in the profession, and even if we didn’t know him personally, we knew who he was,” McKeever says. “We all owe him a tremendous debt of gratitude.”

As McKeever sees it, working for Washington Wylie brought Wilson to life, and painted the picture of what it was like to work for him. “I think his personality was a lot like Washington Wylie’s. They doubled down on their efforts to make sure there was good in our profession and among the Black community.”

Hammond, with the wealth of knowledge she amassed while writing her book on the history of the first Black CPAs, agrees, noting that “Washington Wylie always had an open door to train anyone who walked through it, and a lot of people did.”

“Arthur Wilson is the one who gave Washington Wylie the experience she needed to become a CPA and mentor so many others who went on to be successful after her,” she says. “Without him being sort of the grandfather of all those early Black CPAs, that might never have happened.”

In other words, Illinois’—and more specifically Chicago’s—rich Black CPA history can all be traced back to Wilson and his historic achievement of becoming Illinois’ first Black CPA 100 years ago.

Teri Saylor is a Raleigh, N.C.-based writer with experience covering a range of topics from business to lifestyles. She’s also a frequent contributor to AICPA’s FM Magazine and Journal of Accountancy.

For more on these inspiring leaders and the first 100 Black CPAs, visit www.blackcpacentennial.cpa.

Brian J. Blaha, CPA Growth Partner, Wipfli LLP

The AI Tsunami Is Here: Are You Ready?

If you’re like me, you may think of artificial intelligence (AI) as a catch-all term that seems almost untouchable. It’s a nebulous concept that leaves those of us without computer programming skills often believing that “AI is coming for our jobs.”

Much has been written about how AI is going to eliminate the need for an accountant to prepare taxes, close business’ books, or perform audits. Despite the media hype and fearbased posturing driving the headlines, I believe AI can help the CPA profession evolve and capitalize on its position as a learned profession. If done right, AI can enhance the stature of our roles and further accentuate the importance and value of what we do. How? AI requires human intervention.

THE HUMAN COMPONENT

The necessity of human intervention can best be explained by examining generative AI, such as ChatGPT. Think of generative AI as a digital assistant sitting alongside us, speeding up our mundane tasks. It requires users to interact with natural language and the new content produced by the AI model is returned in the same natural language. These generative AI models are trained on a large volume of human originated text which, based on the user prompt, predicts the output.

Examples of generative AI models include GPT-4/ChatGPT from OpenAI, LLaMA from Meta, Sparrow, and Bard and LaMDA from Google. There’s also DALL-E from OpenAI, which uses prompts to create pictures. Additionally, Microsoft’s investment in OpenAI is fueling its current product releases, including Copilot, which is described as a real-time collaborator— it generates content, sparks creativity, automates cognitive tasks, and completes work.

To interact with generative AI models, we need to become comfortable using prompts (i.e., a natural language input that tells the AI model what to do). Prompts can range from asking a simple question to requesting solutions to complex problems. The more prescriptive the prompt, the more complex the generated response will be. For example, consider including instructions, data (links or csv files), or examples with your prompts.

The important thing to note is that using generative AI will require experimentation. Ultimately, if you’re unsatisfied with your results, change your prompts and try again!

THE CPA COMPONENT

There’s no doubt that AI is storming through the CPA profession at a tsunami-like pace, leaving many of us concerned for what’s ahead. So, what is the future of the CPA profession in the age of AI? Well, according to the response I received from ChatGPT, it sounds promising:

“In the age of AI, the CPA profession will likely undergo significant changes, but AI is unlikely to replace the need for human expertise in complex decision-making and strategic planning. Instead, CPAs will need to adapt and leverage AI technologies to improve accuracy, efficiency, and decision-making while also developing soft skills and staying current with

Artificial intelligence is storming its way into the accounting profession. Instead of fearing it, it’s time for CPAs to embrace it.

emerging technologies such as cloud computing and blockchain. Overall, the CPA profession will require agility, adaptability and technological expertise while continuing to provide high-level strategic advice and expertise to clients.”

These days, when you ask a CPA how their day was, you get some version of “busy.” Truthfully, our days typically include a large amount of busy time that isn’t adding value to our clients or our organizations. Our output typically has some value, but our processes and the time it takes to perform our tasks—such as generating emails and content, summarizing meetings, creating action plans, etc.—can be inefficient. As CPAs, the value we bring to the equation is the perspective we deliver, our knowledge on complex topics, and our understanding of the relationships between financial and regulatory problems. We earn our living by deploying these skills. If we’re able to use generative AI models to speed up mundane tasks, we could redeploy the saved time in more valuable ways. I can think of a few examples:

• Calling a client to show curiosity about their business.

• Mentoring an employee.

• Collaborating with a colleague over a business concern.

• Thinking strategically/brainstorming about a business issue.

• Taking a LinkedIn Learning class about generative AI.

• Going for a walk.

If we were able to spend more time doing these activities, wouldn’t every nugget of time be seen as more valuable and meaningful? It’s this understanding that can help us better frame how AI isn’t coming for our jobs. Rather, it’s going to enhance them.

To reap the rewards of what’s to come, it’ll be important to standardize and rethink our business processes and value propositions.

THE GENERATIVE AI COMPONENT

As you think through the uses of generative AI, it doesn’t take long to see the various potential issues that may arise due to the transformative nature of this technology.

Most of the creators of AI models are calling for responsible regulation and guidelines. This isn’t dissimilar to other periods in our history where transformational technology led to a period of chaotic deployment, eventually followed by regulation creating order. The difference here may be the pace of invention and adoption is at a speed we’ve never seen before. For example, the adoption of mobile phone technology took a decade to catch on, whereas the use of ChatGPT took just months to reach the same number of users.

As a professional, it’ll be important to participate in this change. We’ll all be learning this together, so I invite you to join me on this journey. To get started, I recommend:

• Educating yourself. Read articles and watch videos about some of the terms I discussed.

• Experimenting. Go to OpenAI’s website to create a free account to try ChatGPT.

• Staying current. Be mindful of developments in generative AI ethics and legislation.

• Sharing. As you become informed, inform others about what you’ve learned.

The more time we can spend harnessing this groundbreaking technology to improve upon what we do, the better strategic business advisors we’ll be.

Jon Lokhorst, CPA, PCC Executive Leadership Coach, Lokhorst Consulting jon@lokhorstconsulting.com

Can ChatGPT Make You a Better Leader?

After testing out a few challenges, I can confidently say that I’ll be adding ChatGPT to my leadership toolbox—and you should too!

On Nov. 30, 2022, OpenAI released the prototype version of ChatGPT, one of the first generative artificial intelligence (AI) applications available to the public. Within five days of its launch, the application reached over 1 million users. By contrast, it took Facebook 10 months to reach that threshold. In February 2023, ChatGPT had reached over 1 billion users.

GPT stands for generative pre-trained transformer, meaning that the AI technology has been trained to answer questions or prompts from users in a chat framework. The user’s ability to respond with additional context, follow-up questions, and requests makes the technology more interactive than typical online search applications, such as Google. ChatGPT’s wealth of data and information is astounding, as is the speed at which it generates responses to users. Not to mention, the basic version of the application is free and the upgraded version only costs $20 per month. Additionally, developers have begun releasing internet browser extensions and plug-ins to provide shortcuts for using the application.

Along with its strengths, however, ChatGPT also has its drawbacks. For instance, it has limited knowledge of events that occurred after September 2021 (ChatGPT and similar applications are rapidly evolving, so there’s a good chance some of the features highlighted in this article have already been updated). At times, ChatGPT has also given answers that are factually incorrect or biased. Teachers and educational institutions have also shared concerns about cheating and plagiarism, while social scientists question the potential negative impact on humanity and society.

Of course, these are all valid caveats to view ChatGPT as a research tool or brainstorming partner—not the ultimate authority. As Ford Saeks, a business growth expert and hall-offame speaker stresses, “You need to treat ChatGPT as an intern. Don’t treat it as an expert. Don’t take it at face value. You need to make it your own.”

Speaking of, you might be wondering, did I have ChatGPT write this article? I didn’t; I wrote it myself. But I couldn’t resist giving the chatbot a chance to write one, too. Whose article was better? I’m not telling (but I’d be glad to share ChatGPT’s version with you—if you’re interested).

TESTING 3 TYPICAL LEADERSHIP CHALLENGES

Saeks describes ChatGPT as a powerful engine that can help you with virtually every area of your business: operations, marketing, sales, among others. Most media attention on ChatGPT’s use in accounting and finance has been in the technical arena. In fact, when

releasing its latest update to the platform in March, OpenAI President and Cofounder Greg Brockman used it to solve a complex tax question. This, of course, stirred my own curiosity on whether ChatGPT could be useful in other areas, like becoming a better leader.

To put ChatGPT to the test, I selected three typical leadership challenges, each of which I addressed in a separate chat thread (note that each thread can be saved for future use). In each challenge, I provided basic context, posing as a finance leader, and asked for ChatGPT’s assistance in researching a variety of leadership approaches to each challenge. The three challenges I provided were:

1. I’m an executive leader of a team comprised of mostly introverted finance and accounting professionals. I’m seeking recommendations for 10 icebreaker questions to help team members get to know one another and engage more willingly in team meetings.

2. I’m a partner in a public accounting firm that recently hired fully remote workers for the first time. In some cases, our managers had a hard time overseeing the quality and timeliness of their work. Do you have tips for supervising remote workers?

3. I’m a CFO of a nonprofit social services organization, requesting that ChatGPT review the basic financial statements to provide highlights and concerns for a presentation to the board of directors. (Note: In this example, I copied and pasted the financials in the chat before asking the platform to suggest talking points.)

SURPRISINGLY HELPFUL RESPONSES (MOSTLY)

In all three scenarios, ChatGPT responded with lightning speed— the text filled the screen before I could lift my fingers from the keyboard. Using the basic information I supplied, the platform’s initial responses were surprisingly helpful. Though, they got better as I followed up with additional context and requested more advanced responses.

For the first challenge, the 10 icebreaker questions ChatGPT provided ranged from simple questions that almost every team member could easily answer (e.g., what’s your favorite hobby or activity to do outside of work?) to more in-depth questions that require more thought and openness from team members (e.g., if you could switch jobs with anyone in the company for a day, who would it be and why?).

For the second challenge about managing remote workers, ChatGPT generated tips for setting clear expectations, monitoring progress, providing training, and conducting regular check-ins. Based on my own experience of working with interns or research partners, I knew that responses would likely be improved or expanded upon if I provided follow-up questions or additional information. Therefore, I requested a deeper dive into these tips for when managers aren’t satisfied with their workers’ responses. The platform returned suggestions ranging from establishing clear goals and deadlines to considering a probationary period.

The nonprofit board report from challenge No. 3 drew the platform’s weakest response, at least initially. ChatGPT was quick to point out significant year-to-year variances but offered few comments or questions about the potential causes of those variances. The responses showed the value of knowing the organization’s programs, business activities, and financial decisions behind the financials. Also, ChatGPT provided only basic information when I asked a follow-up question about cash management

recommendations (considering concerns in the banking industry at the time). It provided commentary on the importance of diversification and establishing a cash management account.

The three test chats took less than an hour in total, showing that a relatively small investment of time can jump start your brainstorming and critical-thinking process. Investing more time to provide additional information and deeper context via the chat panel improved results considerably. Of course, ChatGPT (and similar platforms) will continue to get better over time and provide opportunities to further customize interactions to your style and specifications.

So, should you add ChatGPT to your leadership toolbox? I think so! If you haven’t already done so, sign up for ChatGPT and start describing a significant leadership challenge for which you’d like ideas. Drill down with follow-up questions to generate additional insights. Use the chat’s responses to brainstorm additional ideas and formulate a game plan to address the situation and take action. With practice, you’ll get better at using the technology too. Just remember to treat it as an intern, not as an expert. As Saeks says, “AI won’t replace humans. AI will replace humans who don’t use AI.”

Andrea Wright, CPA Partner, Johnson Lambert LLP awright@JohnsonLambert.com

DEI Is Evolving: Is Your Firm Keeping Up?

To attract and connect with a new generation of CPAs, firms must renew their commitments to creating a more equitable—and transparent—workplace.

Like many other industries, the accounting profession has had to navigate a lot of challenges in recent years. The most obvious being the COVID-19 pandemic and the resulting hiring and retention difficulties. Though, in my opinion, maybe one of the more threatening issues, and more specific to the accounting profession, is the stagnating CPA pipeline—a troubling trend that industry stakeholders, including the Illinois CPA Society, have been warning us about for many years. The resulting talent shortage we’re now seeing is, in part, a result of national college and university accounting degree programs continuing to see declining enrollments, compounded by a decline in new candidates pursuing the CPA credential.

According to a May 26, 2022, report from the National Student Clearinghouse Research Center, undergraduate enrollment declined 4.7% from spring 2021 to spring 2022, which follows a 4.9% decline from spring 2020 to spring 2021. This means undergraduate enrollment has now fallen by nearly 1.4 million students since the COVID-19 pandemic started (i.e., spring 2020 to spring 2022), compared to 2.6 million students over the past decade.

With the profession’s candidate pool shrinking more every day, it’s imperative for firms to use every recruiting tool available to them to attract the next generation of CPAs. More importantly, if firms wish to remain relevant, they need to rethink how they connect with this incoming labor force.

CONNECTING WITH A NEW GENERATION OF CPAS

One powerful way to make connections with any job candidate is to show them how the values of your organization mirror those they’re seeking. For students and young professionals, this increasingly means showing a commitment to diversity, equity, and inclusion (DEI) in the workplace.

According to a recent Monster survey, 83% of Gen Z individuals stated that an employer’s commitment to DEI plays a significant role in their decision-making process when choosing where to work. Another survey by Staffing Industry Analysts found that 75% of candidates would reconsider applying to a company if they were unsatisfied with the organization’s DEI efforts.

I think it goes without saying that firms need to consider these stats and pivot their recruiting strategies if they plan to have any sway in ushering in a new generation of CPAs. Also, it’s important to understand that Gen Z candidates don’t operate within the same rules of the generations before them. Decisions about where to work, what kind of work to pursue, and what kind of colleagues they choose to surround themselves with are largely influenced by their values around culture and diversity. Not only is Gen Z the most diverse generation within themselves, but they expect their future employers to increase the diversity of their organizations to reflect society more accurately.

EQUITY CALLS FOR PAY TRANSPARENCY

For Gen Z, a clear indication that DEI is an organizational value is a commitment to making their culture more equitable. Over the past three years, in particular, there’s been a significant increase in companies promoting their DEI and sustainability targets, goals, and initiatives. It’s now common to see organizations supporting open forums, bias training, and the formation of DEI committees, among other actions, to show their employees they’re committed to cultural change and are making strides to achieve equity.

One area of historical inequity that’s garnering greater attention today is pay. Pay transparency laws have cropped up in many states, including Illinois. One major step taken to enhance equity throughout Illinois was amending the Equal Pay Act, making it unlawful for any employer with 15 or more employees to not include a pay scale for any job posted in the state. In this case, pay scale is defined as the salary or hourly wage range that the employer reasonably expects to pay for the posted position. Notably, studies have indicated that including a pay range within a job posting has had a positive impact on reducing the gender pay gap and inequity for other marginalized groups.

While pay transparency isn’t without its challenges, firms should view it as an additional tool in their recruiting toolbox. Whether you agree with it or not, this change is coming. Firms need to adjust their perspectives and think of pay transparency not as another challenge to overcome but rather as a way to differentiate themselves and illustrate renewed commitment to the DEI initiatives they may have committed to years ago.

Simply put, employees’ DEI expectations are evolving and are playing increasingly bigger roles in guiding them toward employers. DEI is no longer simply about supporting minority employees and having conversations that provide new perspectives. Now, employers must be prepared to show top-down commitment to stated DEI and sustainability policies, with demonstrated buy-in at every level, to attract top talent.

If we’re going to help improve the CPA pipeline, it’s in our profession’s best interest to embrace incoming policy changes and use them as a catalyst for forging connections with the talent we want and need. Now more than ever, prospective employees want you to put your money where your mouth is—right now, that’s in your job descriptions.

This column was co-authored with Lyndsey Wells, recruiting manager, Johnson Lambert LLP.

Mark J. Gilbert, CPA/PFS, MBA President, Reason Financial Advisors mgilbert@reasonfinancial.com

Retirement Tax Planning: Common Rules Are Meant to Be Broken

Now that most 2022 individual income tax returns have been filed, it’s time for busy season’s next phase—tax planning season. I think most CPAs and personal financial planners recognize now that tax planning is a year-round exercise for bringing added value to clients. Those of you who choose to formally offer tax planning by preparing deliverables to clients might agree with me that the market for tax planning is underserved and ripe for growth. The complexities of both variable compensation (including ordinary income and gains from equity compensation, as well as business owner income) and offsets (like deductions, exclusions, and credits) are too much for most clients to understand. This is especially true for retirement income tax planning. Admittedly, this is one of the most sought-after services my clients pursue, and because of the emotional and complex nature of the topic, it’s one of the more meaningful ways I get to add value to my client relationships.

For more than a generation, it’s been clear that some form of retirement income tax planning is appropriate for most taxpayers. That’s because for at least that long, taxpayers’ retirement income has been largely based on self-directed defined contribution plans, like IRAs and 401k plans, which feature more complicated withdrawal options than the traditional defined benefit pension plans of prior generations (thus, more tax planning opportunities). It’s more complicated for at least three reasons.

1. These plans come in both tax-free (Roth) and tax-deferred (traditional) varieties.

2. There’s investment volatility in these accounts.

3. There’s a wide range of variability in withdrawal rates from these plans.

Of course, retirees must contend with annual required minimum distributions (RMDs) from most of these accounts, but there are no required maximum withdrawal rules.

In this environment, the common retirement income tax planning advice given has been something to the following effect: Take out the RMD, pay the income taxes, leave the balance in the tax-deferred account invested to provide growth, and spend after-tax investments to meet any remaining living expenses (net of pensions and Social Security) for the year.

In this example, the retiree pays a minimum amount of income taxes—at least in the earliest years of retirement—with the hope of growing the tax-deferred assets. This common rule may also result in an accelerated depletion of after-tax investments.

When it comes to tax planning for retirement income, following the “rule of thumb” isn’t always in the best interest of your clients.

The issue I have with this common rule is that each client’s situation is different. It’s our duty as CPAs and financial planners to consider the hopes, expectations, and finances of our clients before giving any recommendations, because, like any rule of thumb, the common rule may break down under multiple scenarios.

For example, in an environment where individual income taxes are expected to rise on account of either higher marginal tax rates or smaller taxable income ranges, or both, then future larger IRA account balances will generate much larger income tax bills. Perhaps it might be more prudent to draw down more rather than less IRA money sooner, even paying more income taxes sooner, but at a lower marginal rate.

Likewise, if married spouses are following this common rule in the early years of their retirement and one of them later passes, the survivor will be thrown into an effectively higher tax bracket as a single filer (assuming no future marriages). They’d therefore pay meaningfully higher income taxes even if marginal tax rates remain the same.

Similarly, if a client was open to considering their children’s finances in the decision-making process, especially when leaving a legacy of a generational inheritance, perhaps the client would prefer to pay more in taxes in order to leave as much tax-free wealth to their children as possible.

These are a few examples of how following the common rule in retirement income tax planning produces a less-than-optimal solution for clients.

In my own practice, I advise clients with what I think of as a “modified common rule” to retirement income planning: Take out the RMD plus as much additional distribution as will “fill” the taxpayers’ marginal income tax bracket (or the next one or two, based on the taxpayers’ anticipated future income tax rate), then pay the income taxes, etc. The benefit of this strategy is that it takes better advantage of clients’ current income tax rates than the common rule strategy. Though, one cost of this strategy is that it potentially places clients who are on Medicare into a higher income bracket where the income-related monthly adjustment amount means their monthly Medicare premiums will increase for the year.

In academia, there’s been a growing interest in identifying and quantifying the amount of income taxes saved by a taxpayer, or taxpayer and family, when CPAs and other advisors recommend tax planning strategies other than the common rule strategy. In 2022, James DiLellio of Pepperdine University and Andreas Simon of the University of Southern California described this process as “tax alpha” in an award-winning research paper, “Seeking Tax Alpha in Retirement Income.” Through their findings, DiLellio and Simon concluded:

• Tax alpha can increase annual portfolio returns and/or extend portfolio life meaningfully.

• The larger the taxpayer’s portfolio, the more the capture of tax alpha is relevant.

• A taxpayer looking to establish a relatively larger legacy for heirs should consider not just their marginal tax rate but the highest marginal tax rate of the heirs when determining how much, if any, taxable withdrawal to take from a traditional tax-deferred account in lieu of after-tax assets.

• A primary determinant in producing tax alpha is avoiding large taxable income spikes, which can occur when withdrawing only required distributions.

Fortunately, DiLellio and Simon recognize that income calculators should be employed by CPAs and financial planners. To that point, the authors have created a retirement income calculator that determines an optimal strategy for retirement income tax planning, taking into account some of the factors discussed above (e.g., spouses, ages, heirs, tax rates, etc.). Of course, there are other calculators like this in the marketplace. However, calculators offered by some of the larger financial firms, like Fidelity or Vanguard, fall short because they’re based on the common rule strategy with little flexibility.

As you can see, there are multiple factors involved when advising clients on retirement income tax planning beyond the IRA or 401k RMD. From my perspective, it’s too important to rely on some simple rules of thumb. My advice is to invest in the right software to increase the quality of your client advice. After all, aren’t rules meant to be broken?

Shifra Kolsky, CPA Senior VP, Chief Accounting Officer, Controller, Discover Financial Services shifrakolsky@discover.com

6 Strategies for Establishing Robotic Process Automation in Your Organization

In 2018, the controllership team at Discover was beginning to build the roadmap for a significant technology transformation. Knowing that some of our manual processes wouldn’t change until we changed some of our tools and technologies, we started exploring the possibility of using robotic process automation (RPA) to help us free up time for our staff to do higher value work.

My colleague Chris Allmaras, senior manager of RPA, has been leading the team on this from the start, building the finance RPA program from the ground up. So, I asked him to share some of his thoughts and insights from what he’s learned along the way. He says it’s critical to establish a vision that’s shared broadly across the organization: “You want the organization to embrace the digital workforce (i.e., bots) as helpful resources. Therefore, getting buy-in from stakeholders is essential.”

If your corporate finance team is thinking of building and managing an RPA program, here are six strategies that Allmaras and his team used that may help your success.

1. ENCOURAGE PARTICIPATION

To encourage participation, be open about your goal. For Discover, that goal was freeing up human time to do the work that bots can’t. To help motivate staff to think about processes that could be automated, Allmaras’ team requested a list from staff of all the tasks they hated doing. To further encourage participation, the team started with a pilot, recruiting staff that they knew had manual processes and would also be happy to share their experience with others. With that first automation, Allmaras’ team put together a roadshow to present the comparison of bot versus human doing the task, showcasing the positive experience the accounting team had and the time savings they reaped as a result of automation. The key messages included in their presentation focused on showing how staff gained the opportunity to do work that’s more engaging while the bots did the rote activities and encouraging staff to broaden their thinking about what’s possible with RPA.

2. BUILD A BACKLOG

To ensure the ongoing viability of an RPA program, it’s important to build a backlog early and to continuously add to it. Processes that fit well with RPA technology and provide the most value are highly repetitive, high-volume processes with relatively low complexity. For example, tasks such as moving data, reformatting, and summarizing can easily be managed by a bot since they require specific instructions. As you build the backlog, consider whether

It’s time for corporate finance leaders to embrace the automation opportunities that the digital workforce offers.

RPA is the right solution, or whether a script, feed, or other type of automation might solve the problem at its root. Notably, process readiness is important—you don’t want to be wasteful automating a broken process.

3. SHARE YOUR PRIORITIZATION CRITERIA

Maintaining ongoing engagement across the organization requires that people believe there’s an opportunity to automate and that there’s a tangible benefit in doing so. If your backlog is being sourced across multiple teams, you’ll want to share your prioritization criteria so folks understand how their proposed automation will likely fit into your queue. To help people see what goes into the process, consider building an intake form that captures the relevant information needed to support your prioritization framework (e.g., time savings, complexity of the process, number of systems used, potential risk reduction, frequency of running the process, and timing of when output is required). An early automation that Allmaras’ team produced was an example of something prioritized based on the timing of the required output. The bots were able to eliminate the need for a human to pull a daily report at 5 a.m. While the process was simple and took very little human time, there was a significant morale boost in the team by eliminating the early morning task.

4. FOLLOW AUTOMATION BEST PRACTICES

Allmaras and his team participate in several peer forums that discuss automation best practices that folks have learned along the way. One widely accepted best practice includes building automations with reusable components that can be shared across processes. For example, if you program a generic access point to a particular system, it allows anyone building an automation that leverages that system to copy the component into their process. Another best practice is to consider the data being used and ensure that sensitive data is masked or encrypted as appropriate. When it comes to the digital workforce, it’s best to consider the level of access to applications and think through access provisioning and segregation of duties. Additionally, it’s important to establish relationships and communication with the people supporting the technology applications that the bots access regularly to ensure there’s a clear and repeatable protocol for communicating changes planned for those applications.

5. MANAGE ONGOING AUTOMATIONS

Governance, control, and maintenance are key elements of a good automation operating model. To ensure bots are built with best practices for reliability and auditability, you’ll want to set up a governance structure that requires documentation, code review, and testing prior to putting an automation into production. For maintenance, it’s helpful to have dedicated resources to schedule and monitor the bots and troubleshoot production issues. Also, you’ll want to consider the level of logging you want as your bots execute automations—too much will slow the processes down, but not enough may create troubleshooting challenges or limit audit evidence.

6. ENABLE EXPANSION

A development team focused on RPA will build technical knowledge that enables shorter lead times, faster development, and quicker problem solving when issues arise. However, they’ll still have to prioritize their backlog and may not be able to produce as much or as quickly as the broader team desires. Training citizen developers, or people embedded within an operating team, is a great way to

expand the scope of what can be automated. Citizen developers can combine their subject matter expertise with a basic knowledge of RPA to develop smaller-scale solutions that may not get prioritized by your organization’s team of developers. The work of a citizen developer should be subject to the same governance, review, and testing as the team of developers, so quality assurance can still be maintained. Also, a routine protocol for review of automations and meetings with stakeholders can bring to light other ways to deploy a process that’s already built, whether applying it with other teams or similar tasks or reusing component parts in different processes.

RPA can provide speed, consistency, auditability, reliability, accuracy, and productivity at a reasonable cost. Just imagine affording your team the opportunity to have bots work in the off hours and provide outputs ready for their use at convenient times. By framing and communicating a vision and strategy for RPA within your organization—and supporting it with a strong operating model and well-defined roles—there’s no doubt you can successfully help your organization embrace the many opportunities that RPA can offer.

Keith Staats, JD Executive Director, Illinois Chamber of Commerce Tax Institute

Tax the Rich? That’s a Poor Idea

Three tax proposals that promise to generate additional tax revenue and offer a more equitable tax system are part of Illinois’ long history of misled ideas.

The Illinois General Assembly’s spring legislative session was relatively benign in relation to taxes. There were no general tax increases or decreases, apart from a modest reduction in the Corporate Franchise Tax, which increased the general exemption from the tax to the first $5,000 in liability from the first $1,000.

From my perspective, however, there were some particularly poor tax proposals introduced that luckily didn’t gain traction this spring. Though, that doesn’t mean these bad ideas won’t resurface in Springfield. Here, I’ll decode three of them.

1. WEALTH TAX

The first bad idea introduced was the Extremely High Wealth Mark-to-Market Tax Act (HB 3039)—also referred to as the wealth tax. The avowed purpose of the legislation is twofold:

1) that it’s unfair that high-net-worth individuals aren’t paying their “fair share” of taxes, and

2) the tax would generate a significant amount of new revenues for the state.

The legislation proposes that every resident taxpayer with net assets of $1 billion or more on Dec. 31 of each year will be required to recognize gains or losses on each asset as if it had been sold at fair market value on that date. The net gain would be taxed at the individual income tax rate of 4.95%.

The legislation is drafted so that the Illinois Department of Revenue could require that someone subject to this tax report it on their IL-1040. The taxpayer would calculate their Illinois base income normally, and then add this new fictional net gain to their base income. In a year where the mark-to-market calculation results in a loss, taxpayers would be allowed to take a subtraction modification in the calculation of base income to the extent of any “regular” income subject to Illinois income taxation. However, because Section 207 of the Illinois Income Tax Act isn’t amended, excess mark-to-market losses for a tax year can’t be carried forward to a subsequent income year to offset income in the later year.

Additionally, the legislation contains provisions to prevent taxpayers from shifting assets to minor children, trusts, and other entities to avoid the tax. The legislation would also require detailed reporting of assets of individuals subject to the tax.

If enacted, I believe it’s likely that this tax would be struck down by the courts due to it violating the Illinois Constitution. For example, Article IX, Section 3(a) of the Constitution forbids the imposition of more than one state income tax, and Article IX, Section 5 forbids the imposition of a personal property tax. In my view, this legislation is either an impermissible second income tax or personal property tax.

2. FINANCIAL TRANSACTION TAX

A second bad tax idea introduced again this year was the Financial Transaction Tax Act (HB 1023), which would impose a “privilege tax” on persons or entities that engage in financial transactions on certain specified exchanges located in Chicago. The tax is imposed on financial “contracts” at a rate of $1 for each transaction for which the underlying asset is an agricultural product, a financial instruments contract, or an options contract.

In the past, proponents of this tax contended that it would be a tax on “speculation,” asserting that the tax wouldn’t affect many people—only the 1%. Proponents have also contended that the tax would generate $10 to $12 billion per year in additional tax revenue for the state.

However, proponents of this tax are wrong on all counts. They’re basing their assertions on a fundamental misunderstanding of the nature of the financial instruments they wish to tax and the persons and entities that would be subject to the tax. The tax would burden the business community and consumers—not just the 1%.

The transactions proposed for taxation are engaged in by a variety of businesses as normal, prudent practices. These businesses include agricultural producers (i.e., farmers) who routinely utilize futures contracts to hedge against commodity price volatility. Manufacturers also use hedging transactions to protect themselves and their customers from volatility of raw material prices and currency risk on the overseas sale of products. Other businesses, such as airlines, use hedging transactions to guard against volatility in fuel prices.

The tax would likely generate little to no revenue because the constitutional and substantive defects in the legislation would trigger a successful legal challenge. The tax would also likely generate little to no revenue because those targeted for taxation would likely cease engaging in transactions subject to tax in Illinois and would likely move to another state because Illinois lacks the legal authority to impose a financial transaction tax on activities outside of its borders.

If enacted, the tax would likely be attacked in the courts as “special legislation” prohibited by Article IV, Section 13 of the Illinois Constitution because the tax is imposed only on transactions of certain named Chicago exchanges.

3. COMMERCIAL DATA COLLECTOR TAX

The last bad idea I’ll delve into is the Commercial Data Collector Tax Act (SB 2307), which would require a monthly excise tax on the collection of consumer data of individual Illinois consumers by commercial data collectors. A “commercial data collector” is defined as a for-profit entity collecting, maintaining, processing, selling, or sharing consumer data in support of its business activities on more than 1 million individual Illinois consumers in a month within the calendar year. The tax is imposed with a graduated rate structure based on the number of Illinois consumers from which the company obtains data. The tax ranges from 5 cents per consumer for the first 1,999,999 consumers up to a maximum of $2.25 million per month, plus 50 cents per consumer per month for companies obtaining data from more than 10 million consumers.

The legislation would likely impact companies such as Meta (Facebook), who collects large amounts of data, as well as insurance and credit reporting companies, among others.

However, like the other two bad ideas, there appear to be fundamental constitutional problems with this tax. Despite being characterized as an excise tax, a review of the true nature of the tax leads me to conclude that the legislation is a form of a personal property tax, albeit on intangible property, that’s forbidden by Article IX, Section 5 of the Illinois Constitution.

None of these three proposals moved forward during the spring legislative session, likely because forecasted tax receipts for the upcoming fiscal year will be sufficient to fund state government. However, if fiscal conditions deteriorate, the Illinois General Assembly will be searching for sources of additional revenues without passing general tax increases. All three of these proposals will be beguiling to many legislators because of the false promise of substantial additional revenue from taxing “the rich.”

Although each of these three proposals promise large increases in state tax revenues without burdening ordinary taxpayers, proponents of these taxes are simply and constitutionally wrong. These taxes won’t generate additional tax revenues, and they certainly won’t result in a more equitable tax system.

Elizabeth Pittelkow Kittner

CGMA, CITP, DTM Vice President of Finance, GigaOm

Do Your Values Align With Pay Transparency?

Amidst a growing push for pay transparency, both employers and employees must consider the impact on their workplaces—and their values.

Would you like to know if you are being paid fairly for your role? Do you believe you should be paid based on your performance, what your colleagues in similar roles are being paid, what the market is paying for your role, or some combination of these factors?

No matter your feelings about pay, the push for transparency is becoming more prevalent in the workforce as an increasing number of states are requiring employers to provide salary ranges for the positions they post and as websites, like Glassdoor and Big 4 Transparency, provide more opportunities for people to share their salaries anonymously.

While both employers and employees have varying feelings about whether to share salaries, research shows that pay transparency offers several benefits. For starters, it can provide a more fair and equitable workplace; attract candidates; and support diversity, equity, and inclusion efforts. Additionally, a recent study in Nature Human Behavior showed that pay transparency reduced gender pay disparity and improved productivity measurements.

It is important to consider there are some potential drawbacks to pay transparency. The practice has been shown to reduce overall wages and ongoing raises because individual negotiating power is diminished when employers publish a salary range for positions. It also has the potential to demotivate high performers because opportunities for a pay increase based on a strong performance are reduced.

Before you implement pay transparency into your workplace, here are a few points to consider—both as an employer and as an employee—to ensure the practice aligns with your values.

EMPLOYER CONSIDERATIONS

As an employer, it is imperative to consider the balance between privacy and transparency. After all, not all employees want their salary information to be known, as they could feel it violates their personal privacy. One way to address this concern is to provide salary ranges instead of exact salaries.

It is also important to remember that pay transparency often shows disparities between employees, so employers should review and remedy inequities as part of their planning process. Recent research from Bocconi University regarding pay transparency suggests if an organization is equitable and consistent in how pay is allocated, then the overall employee responses are generally good, and productivity should increase. However, if an organization is not fair in allocating pay, then employee responses are more negative, and overall productivity may decline.

Additionally, employers need to consider the impact pay transparency may have on employee morale. Even if employers provide rationale for salary differences (e.g., certifications, skills, experience, responsibilities, etc.), morale may be affected if employees

feel they should be making more or if they feel they have been passed over for promotion. To help mitigate these employee frustrations, organizations can establish clear standards for determining salaries, promotions, and performance-based increases. Employers should also consider providing coaching and development opportunities for employees looking to advance, and/or adjust pay or responsibilities appropriately. Annual salary reviews can also ensure employees are being compensated within market rates for their responsibilities and experience; this practice will help protect against discrepancies across diverse groups of people.

Most importantly, employers must ensure they do not retaliate against employees who speak out about pay transparency, including any disparities they perceive. To avoid retaliation, ensure your organization has an anti-retaliation policy in place to follow and help set the standard.

Some companies have taken more extreme measures to promote pay transparency, such as paying everyone in their organizations the same salary. However, these companies have had varying levels of success. One example is Spill, a company providing online therapy to other organizations’ employees. After a few months, their employees demanded to be paid based on performance, and the higher performers felt underappreciated in their compensation. Another company, Tunnel Vision, implemented the same salary method and achieved more success. While this pay model may be extreme, it does represent the feelings employees have about wanting to be paid fairly.

EMPLOYEE CONSIDERATIONS

As an individual, you may want to keep your salary private, or you may want to talk about it openly with others to understand where you rank in pay. If you are in an organization with several people in your role—like an associate at an audit firm—it would be interesting to know if you are being paid close to the same amount and why there are differences. However, if you are the only leader with a CPA at your organization, then it may not benefit you to share your salary within your organization since no one else has a similar role or shares your qualifications at your level.

When engaging in salary discussions with colleagues, it can be difficult to know if people are being honest. As an alternative, you could compare your compensation to salary guides, websites, or job postings for similar positions to gauge fairness.

Most importantly, be sure to research and know your rights before engaging in discussions with others or disclosing components of your compensation. For example, you may have signed a document from your employer that asks you to not discuss details of your compensation with others. However, the document may not be enforceable if you fall under the eligibility of certain laws, such the National Labor Relations Act, which gives many employees the right to talk about their wages with their colleagues. Notably, only a few employers are excluded from this act, which can be found on the National Labor Relations Board website, nlrb.gov.

Ultimately, both employers and individuals should consider compensation clarity at the beginning of an interview process. If there is a mismatch between what the employer will pay and what an individual is seeking, it can save time for both sides if they have the discussion early in the process.

As pay transparency continues to gain traction in state legislation, be prepared to handle the compliance of it as an employer, and as an employee, ensure pay practices align with your values.

Art Kuesel President, Kuesel Consulting art@kueselconsulting.com

What Does It Take to Become Clients’

Most Trusted and Strategic Advisor?

Earning the coveted status of “the most trusted and strategic advisor” is a goal all CPAs should have, but achieving it isn’t necessarily a given. Here are some actions that can help.

“Strategic” and “trust” are two power words in the world of accounting—and I don’t use them lightly. When I think about these two words coming together, I don’t arrive with a pseudonym like “trustegic.” Instead, I arrive with a more obvious choice to anyone reading this—a CPA. More specifically speaking, the top relationship achieved between a CPA and their client.

David Maister, Charles H. Green, and Robert M. Galford, authors of “The Trusted Advisor,” have similar views on this correlation. They argue that the key to professional success is the ability to earn the trust and confidence of clients.

Of course, earning trust from clients is the goal of any CPA, but it’s not always a sure thing. Speaking from experience, it takes time. To help make the process of becoming your clients’ most trusted and strategic advisor a little easier, here are four key actions to take.

1. DEMONSTRATE CREDIBILITY, RELIABILITY, AND MOTIVATION

You must demonstrate credibility with the client, oftentimes (but not always) around a specific topic of knowledge. But proving that you’re smart is never enough. You must reliably deliver meaningful knowledge over and over again. Your knowledge must be brought forward with context that provides value. Admittedly, that’s still not enough. Your client must feel as if every interaction with you is motivated by them, not you. That means you always do what’s in the best interests of your client even if it’s not necessarily in your best interests. It’s fair to say that most of us have probably completed this cycle once or twice. But nobody can claim to have completed the cycle in perpetuity for all clients all the time. However, when you can repeat this cycle with a client, you should be heading toward that top-level “most trusted and strategic” relationship.

2. BLEND PROFESSIONAL AND PERSONAL KNOWLEDGE

You must recognize that not all clients trust you just because you have knowledge and have a professional relationship with them. Many clients seek some level of a personal relationship with those they truly trust. A few reasons for this come to mind: First, we must remember that a good percentage of the population needs to like someone before they can trust them. Second, the client-CPA relationship can’t just be a transactional relationship, as it usually involves frequent meetings at length where the conversation drifts from professional to personal and back again. Third, let’s not forget that the personal lives of our clients tend to influence their professional decisions.

3. RECOGNIZE THAT EMOTIONS COUNT

How many times has one of your clients made a decision that made little business sense and conflicted with the facts you presented?

All the time, right? That’s because emotions are present in business—whether that’s a good thing or not. This example isn’t about the client who’s successful in spite of themselves and their reckless decision-making. Instead, this is about the typical business owner or controller who has subtle (and sometimes not so subtle) emotional or environmental influences from beyond the balance sheet. If you’re going to elevate your status to being a client’s most trusted and strategic advisor, you’ll not only recognize these influences, but embrace them, as they aren’t going away. The key is to learn why your client is thinking the way they are and, when or if appropriate, consider how to integrate that into future discussions.

4. UNDERSTAND THE RARITY OF RELATIONSHIPS

It’s important to understand that earning the title of one’s most trusted and strategic advisor is rare. Not only for the points I previously mentioned, but for the fact that there are more components to developing this type of relationship than we can

review in this column. It’s also very challenging to serve a high volume of clients in this manner. Of course, there’s also an obvious obstacle—you don’t truly like every one of your clients and every one of your clients doesn’t truly like you. In fact, according to “The Trusted Advisor,” only up to 30% of your clients are even eligible for this elevated relationship for any number of reasons. In my experience, even the most talented, personable, and experienced CPA firm partners have only a handful of these most trusted and strategic-type relationships—and that’s exactly how it should be.

While becoming the most trusted and strategic advisor to your clients should be an aspirational goal for you as a CPA, it’s important to recognize that it’s not possible with every client. I suggest you hand-select only your best clients for the level of effort required to forge this type of relationship. Even if you don’t manage to elevate every relationship you target to this level, you’ll still be a better CPA for your efforts.

Remember, becoming a client’s most trusted and strategic advisor takes time. After working on this for many years with a small handful of clients, I can say with certainty that the professional and personal benefits of moving in this direction are immeasurable.

Harrison Hale, MSA Senior Accountant | Wipfli LLP

As One Door Closes, Another One Opens

GROWING UP on the south side of Peoria, Ill., with a single mother, I seldom heard of people around me pursuing esteemed professions, like law, medicine, or even accounting. So, if you had told me at age 16 that I was going to be pursuing a career in finance, I would’ve laughed. And if you had told me at age 21 that I would be an auditor specializing in federally funded grant organizations, I would’ve thought you were crazy. Yet, here I am in my fourth year as an auditor.

Life is filled with adversity and opportunity—often you can’t have one without the other. I truly believe in the expression, “As one door closes, another one opens,” as I experienced this firsthand. When I was 13 years old, my mother passed away, and suddenly my whole world was thrown into a great unknown. While I would do anything to this day to have her back, her passing gave me a new perspective on life, and I quickly began to understand the importance of setting oneself up for success. So, I left the rough neighborhood I grew up in, since I was starting to be surrounded by people who didn’t have my best interests at heart, and began to focus on my studies and zero in on my athletics. This new paradigm I had on life allowed me to change my purview and behaviors, which subsequently allowed me to earn academic and athletic scholarships to attend college, where I was finally able to pursue one of those esteemed professions.

As an undergrad, I knew having an accounting degree would be useful down the road, but a part of me also wanted to try my hand at marketing. So, I chose to double major in marketing and accounting. Upon graduation, I gave marketing a chance, but soon realized the career path I initially wanted was full of forced sales, cold calls, and constant rejection. I quickly understood this wasn’t my true calling, but I kept my open/closed door mindset and leaned into the accounting career path I originally had as my back-up plan.

Admittedly, before taking courses in college, my only depiction of what an accountant was came from movies and TV shows. With pop culture being my only reference, I thought of an accountant as the dorky character who carried a calculator and wore a pocket

protector. As I started to embark on my accounting journey, I realized that statement couldn’t be further from the truth. Accountants are people like me—people who love interacting with clients, solving puzzles, figuring out where numbers go wrong, and serving their communities.

Of course, starting my accounting career required some additional work. First, I knew I had to obtain the 150 credit hours required to sit for the CPA exam. Second, I knew I needed to move to a city that had ample opportunities. I satisfied both needs by attending graduate school at DePaul University in Chicago.

Before I knew it, I was a first-generation college graduate with a reinvigorated love for accounting. Thanks to my experience at DePaul, I received an amazing opportunity to work for a firm that would help grow me as a young professional—Wipfli LLP. I started as an intern, and four years later, I’m working as a senior accountant in the firm’s nonprofit and government practice. At Wipfli, I also serve as the national chair of our multicultural business resource group, Embrace, where we’re tasked with diversity, equity, inclusion efforts, such as elevating the voices of and advocating for diverse cultures and perspectives with respect to race, color, religion, and national origin.

Choosing to pursue accounting has been one of the best decisions I’ve made. It’s given me a platform to showcase my talents; exposure to various industries; opportunities for traveling, working remotely, volunteering, and giving back to my community; and meeting people from all walks of life. Speaking from experience, never let life’s setbacks prevent you from finding your true calling. Keep an open mind, move to a different city, take that extra class— after all, “as one door closes, another one opens.”

A new perspective on life can open doors to an esteemed profession that’s full of endless opportunities.

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had E. Turner, MS, has a unique superpower that most accounting and finance professionals don’t. That’s because Turner, who serves as director and global head of account analysis product in Global Transaction Services at Bank of America, was diagnosed with a hearing disability at age seven, giving him one of his greatest strengths.

“I never saw my hearing loss as a weakness—it’s made me better at what I do,” Turner says. “I think that’s why accounting was a good fit for me, you have to ask a lot of questions, and I’ve been doing that since I was very young because of my hearing disability.”

In school, Turner always had to sit at the front of the class so he could hear better. “I would hear things that my classmates missed because I had to pay more attention than them,” Turner explains. “I was always raising my hand for clarification. In fact, some classmates would say ‘I’m glad you asked that because I wouldn’t have thought to ask that question.’”

As a person with a disability, Turner also says his experiences have afforded him the ability to be a more empathetic professional. “Within the disability community, you recognize that there’s no one definition for disability. Every disability is different, and every person with a disability has a different experience,” Turner explains. “My own experiences have helped me appreciate these differences and recognize those differences whether I’m dealing with clients, coworkers, or others in the profession.”

Of course, Turner’s hearing disability has come with challenges, some of which came early in his career at a time when technological support was limited. While working for PwC, Turner recalls a specific moment with his phone. “I was very discouraged after being on a lot on conference calls that day—I couldn’t hear what the other people were saying and kept asking them to repeat themselves. So, that night I went home, found a headset with a volume switch and attached it to my office phone.”

Turner would soon learn, however, that his problem with the phone wasn’t as unique to his disability as he originally thought. The next day, he found three people at his desk using his phone. “It turned

Chad E. Turner, MS

BY AMY SANCHEZ

out that nobody else could hear either, but nobody said anything about it. Within a week, everyone in the office had volume switches,” Turner laughs. “I’ve learned throughout my career that if you have an issue, whether you have a disability or not, speak up— chances are, you’re not the only one.”

For Turner, his ability to speak up and advocate for change goes well beyond his own experience. Throughout his professional career, Turner has served as a board member for numerous nonprofit organizations that serve the disability community, including Access Living of Metro Chicago and Disability LEAD. He’s also served on a task force for the Museum of Science and Industry in Chicago to help update disability guidelines and increase outreach to the disability community, and he served as a governing member ambassador for the Chicago Zoological Society, helping the Brookfield Zoo make changes to their exhibits and programs and increase outreach.

At Bank of America, Turner serves as one of the tri-chairs of the business resource group (BRG), Disability Action Network (DAN), where he’s able to speak to different groups about the resources that are available for people with disabilities and help them network with other organizations and businesses.

Turner says that BRGs, like DAN, are a great way for organizations to help and empower people in the disability community, but stresses that they only go part of the way. “The real key is to focus on the person, not the disability. Organizations need to recognize that everyone’s skill set is different,” Turner says. “People with disabilities bring a very strong set of skills and work ethic to the table. They show that through their actions and by working hard. I’ve met with people with disabilities whose efforts to just get into the office are more work than most people do all day.”

Yet, despite these day-to-day challenges, Turner encourages others like him to see their disability as a superpower. “Harness that power and energy into what you’ve learned. Don’t be afraid to ask for help and ask questions. I’ll bet you 99% of the time that question hasn’t been asked and you’ll untangle something—you never know where those questions will lead you.”

An experienced accounting and finance professional harnesses his unique superpower to advocate and speak up for others like him.