Insight Magazine - Winter 2022

Avoiding the Top 10 Cryptocurrency Tax Traps

M&As, Leadership Changes Present Growth Opportunities

The ‘How’ and ‘Why’ of Networking Again

Deciphering the State of Diversity in the Accounting Profession

One More Mile? Quiet Quitters Say ‘No, Thank You’

And More!

26 Financially Speaking Bonds vs. Bond Funds: Which Reigns Supreme?

By Mark J. Gilbert, CPA/PFS, MBA

28 Evolving Accountant How to Restore Passion, Engagement in Your ‘Quiet Quitters’ By Andrea Wright, CPA

30

By Teri Saylor

32

Kuesel

34

P. Paskvan,

By Keith Staats, JD

36

By Elizabeth Pittelkow Kittner, CPA, CGMA, CITP, DTM

ILLINOIS CPA SOCIETY

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

Publisher/President & CEO

Todd Shapiro

Editor Derrick Lilly

Assistant Editor

Amy Sanchez

Creative Director

Gene Levitan

Copy Editors

Mari Watts | Jennifer Schultz, CPA

Photography Derrick Lilly | iStock

Circulation

John McQuillan

ICPAS OFFICERS

Chairperson

Mary K. Fuller, CPA | Citrin Cooperman

Vice Chairperson

Jonathan W. Hauser, CPA | KPMG LLP

Secretary

Deborah K. Rood, CPA, MST | CNA Insurance

Treasurer

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

Immediate Past Chairperson

Thomas B. Murtagh, CPA, JD | FORVIS LLP

ICPAS BOARD OF DIRECTORS

John C. Bird, CPA | RSM US LLP

Brian J. Blaha, CPA | Wipfli LLP

Jennifer L. Cavanaugh, CPA | Grant Thornton LLP

Brian E. Daniell, CPA | West & Company LLC

Pedro A. Diaz De Leon, CPA, CFE | Accume Partners

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

Jennifer L. Goettler, CPA, CFE | Sikich LLP

Monica N. Harrison, CPA | Built In

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

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

Enrique Lopez, CPA | Lopez & Company CPAs Ltd.

Stella Marie Santos, CPA | Adelfia LLC

Richard C. Tarapchak, CPA | Verano Holdings

BACK ISSUES + REPRINTS

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

ADVERTISING

Want to reach 22,600+ accounting and finance professionals? Advertising in Insight and with the Illinois CPA Society gives you access to Illinois’ largest financial community. Contact Mike Walker at mike@rwwcompany.com.

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 © 2022. 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.

INSIGHTS FROM TODD SHAPIRO, ICPAS PRESIDENT & CEO @Todd_ICPAS

Looking Back on an Amazing Journey

any of you may know that I’ll be retiring on Feb. 3, 2023, after serving as the Illinois CPA Society’s president and CEO for the past 10 years. This will be my final column in that capacity, and I want to reflect on what’s been an amazing journey.

I can’t express how much I’ve loved leading this organization. When I set out on this journey in 2013, I was laser-focused on meeting and talking to members. Since then, through hundreds of conferences, town hall forums, networking events, firm visits, and more, I’ve traveled to every corner of our wonderful state—from Quincy out west, to Mt. Vernon and Collinsville down south, to Sterling up north, and across the entire Chicagoland area. Meeting and becoming friends with thousands of Society members over the years has been a highlight in my career, and it’s something that’ll stay with me for my lifetime—it’s also one of the things that I’ll miss the most.

It’s been an honor to lead this organization as it continues to strive toward its mission of “enhancing the value of the CPA profession.” Throughout my tenure, we’ve attempted to fulfill that mission by advocating for the profession and providing CPAs with meaningful education, information, and connection opportunities, all focused on helping our members achieve greater success. But we didn’t stop there.

As an organization, we’ve never shied away from addressing the challenges impacting the profession—or helping members navigate the change these professional issues necessitated. I’m proud of the fact that the Society has established itself as a national thought leader in driving the future of the profession. We’ve always tried to deal with the issues facing the profession fairly and honestly, no matter how complex. We’ve talked about the importance of audit quality, the “talk versus the walk” of work-life balance, and the need for increased diversity in the profession. We’ve dealt head-on with the challenges of a technological revolution, increased offshoring, a shrinking pipeline of new CPAs, changing expectations of young

staff, and increasing demands from clients and companies. We've said that “trust” alone isn’t enough and contended that CPAs must become the “most trusted and strategic business advisors” to remain relevant. I hope we’ve made you proud to be a member of the Illinois CPA Society.

Every step along the way, we’ve maintained our focus on enhancing the value of the CPA profession and tried to instill that being successful as CPAs in the future means being prepared to navigate a fast-changing and increasingly complex business environment. After all, it’s been said that the pace of change will never be slower than it is today. Technological advancements and business demands will only accelerate.

You may have heard me say, “If it isn’t broke, break it,” or, “The best reason to change is because you haven’t.” I hope that you’ve seen how the Society has embraced that philosophy during the past 10 years. Now, it’s time for a change. Geof Brown will take the reigns as president and CEO when I retire on Feb. 3. Geof, a seasoned executive, is committed to continuing the Society’s role as a thought leader in the profession. The future is in good hands.

My thanks to all of you for allowing me to be part of the profession, the Society, and your lives. These past 10 years have afforded me the most amazing professional experiences of my career, and I’ll be forever humbled to have led this amazing organization. While I won’t miss getting up at 5 a.m. to be in the office by 7 a.m., I will miss talking, debating, and laughing with so many of you. You’ve touched my life and I hope I’ve touched yours. I wish the Society and all its members nothing but the best in the future—a future that I believe is bright.

Before I venture on, I’d like to pause to reflect on where I’ve been.

LEGISLATIVE

FROM MARTY GREEN, ESQ., ICPAS VP OF GOVERNMENT RELATIONS @GreenMarty

State Government Refresh and the Public Accounting Act

anuary will be a busy month for Illinois state government as we break into a new year. The governor and five other state constitutional executive branch officers will be inaugurated, the new 103rd General Assembly will rise and seat members, and two elected Illinois Supreme Court justices from newly redrawn districts will be seated to the state’s high court. Between the layers of the Statehouse dome there will also be organizational meetings by the respective legislative caucuses, a selection of caucus and chamber leaders, and new committee appointments.

As we’ve seen from Great Britain’s parliamentary system of rotating prime ministers, legislative elections can result in new caucus leadership depending on wins, losses, and the forging of coalitions.

With all this in mind, the Illinois CPA Society (ICPAS) Government Relations team has been preparing to introduce three key pieces of legislation to the 103rd General Assembly:

1. Updates to the Illinois Public Accounting Act.

2. An increase to the Illinois attorney general audit threshold for charities.

3. A clarification to the 2021 pass-through entity legislation regarding the treatment of out-of-state retired partners. Here, I’ll address the reasoning for each of these legislative efforts.

Illinois Public Accounting Act Updates

The Illinois Public Accounting Act is scheduled to sunset on Jan. 1, 2024, as required by the Regulatory Sunset Act. Because occupational and professional acts sunset every 10 years, an

analysis of the Illinois Public Accounting Act is needed to ensure it remains current when the 103rd General Assembly renews the act.

The act’s last sunset update was in 2013, and at that time ICPAS included significant updates that remain contemporary today. In fact, those 2013 updates continue to pay dividends for the CPA profession with the act reflecting the Uniform Accounting Act, a contemporary aspirational framework for accounting statutes.

In anticipation of the act’s sunset and update, ICPAS’ chairperson appointed a diverse working group that reflects the CPA profession to perform a high-level review of the act and to make recommendations to the ICPAS Board of Directors. As a part of this process, we’ve coordinated efforts with stakeholder organizations, including the Illinois Board of Examiners, the National Association of State Boards of Accountancy, and the AICPA, to name a few. ICPAS Government Relations has also worked with the Illinois Department of Financial and Professional Regulation to ensure the act’s proposed changes are consistent with the agency’s other professional and occupational acts.

With so many moving parts before and after the bill is drafted— stakeholder input, board approval, legislative staff consultation, committee hearings, and final floor votes on the bill—it’s imperative that we get the legislation in front of the 103rd General Assembly early, so that it can be signed into law by the governor prior to the act’s sunset.

Illinois Attorney General Charitable Audit Threshold

In 2009, ICPAS supported legislation to increase the charitable audit threshold for the Illinois attorney general from $150,000 to $300,000 for charitable organizations that are required to file a

With the new year upon us, changes are headed to Illinois state government. Here’s an overview on the legislative efforts we’re bringing to the new 103rd General Assembly.

INSIGHTS

written report, including a financial statement with the Illinois attorney general. For the past two years, ICPAS and other stakeholder organizations have been negotiating with the Illinois attorney general’s office to increase the audit threshold once again—this time, increasing the threshold to $750,000. Notably, stakeholder protracted discussions and proffering of research and positions have been fruitful in clearing the pathway for a legislative initiative in the spring.

Pass-Through Entity Out-of-State Retired Partner Treatment

An optional pass-through entity tax and credit were enacted by the Illinois General Assembly in 2021 for S corporations, partnerships, and fiduciaries. Ultimately, the change proved to be challenging for out-of-state retired partners claiming the entity tax credit and took a toll on the tax administration processes. As we continue to closely examine the application of the tax, the credit, and the legislation’s original intent, we’re looking at the potential to amend the statutory definition of partnership “base income” to address the treatment of

payments to retired partners. We’re still working through this issue and will coordinate with the Illinois Department of Revenue on any proposed amendments.

Offense/Defense

Aside from these three legislative initiatives, ICPAS Government Relations carefully reviews any introduced legislation to determine the applicability and potential impact on CPAs and CPA firms. As part of this review, we work with other stakeholder organizations and the ICPAS Regulation and Legislation Subcommittee on policy and bill positions that arise. Reviewing bills and tracking amendments is a whirlwind activity, but it’s central to the legislative overwatch that we perform in representing the profession’s interest.

For all of us, the start of a new year brings many challenges and opportunities. While you can never be fully prepared for the undercover darkness and surprises that come with the legislative process, ICPAS Government Relations is always positioned to respond on behalf of the profession to ensure the best possible outcome for the profession and the State of Illinois.

Deciphering the State of Diversity in the Accounting Profession

As demographics change across the United States, there’s both business imperatives and moral reasons for why the accounting profession must keep up.

BY DERRICK LILLY

hen Theresa A. Hammond published her book, “A WhiteCollar Profession: African American Certified Public Accountants Since 1921,” in 2002, she shone a light on the sullen fact that the accounting profession—and more specifically the CPA profession—among all the major professions, had “the most severe underrepresentation of African Americans,” emphasizing then that less than 1% of CPAs were Black. Two decades later, little has changed.

Just 2% of CPAs in U.S. accounting firms are Black as of 2020, according to the AICPA’s “2021 Trends” report released in spring 2022, which is regarded as an authoritative source on demographic trends in the accounting profession. In fact, significant change in the profession’s diversity has been arguably elusive over the 101 years since John W. Cromwell Jr. became the first Black CPA in the United States in 1921, some 25 years into the license’s existence. Also consider that it wasn’t until 1943, another 22 years later, that the first Black woman was granted a CPA license—the esteemed Mary T. Washington Wylie, who was licensed in Illinois and played a pivotal role in the advancement of Black CPAs. Her firm became known as an “underground railroad” for Black CPAs, as Black accountants from across the country moved to Chicago just for the chance to work for her and gain the experience needed to earn the coveted CPA credential. Maybe more staggering, however, is the fact that it took some 45 years—stretching deep

into the 1960s—for just the first 100 Black accountants to become licensed CPAs.

There’s no denying that the success against the odds of the early Black trailblazers—who determinedly overcame racial, economic, and educational barriers—opened a door through which thousands of Black accountants would eventually pass. However, paving the way for future generations of Black accountants and CPAs has continuously been met with challenges. Hammond’s book reminds us that, prior to the 1960s, few white-owned accounting firms would even employ Black professionals, widely denying them the requisite experience to ever become CPAs. And despite the eventual rise of the civil rights movement and establishment of historically Black colleges and universities with business and accounting programs, race-related issues throughout our nation’s history have often hampered Black participation in the profession.

Consider this: The U.S. Census Bureau’s 2020 census measured the country’s Black population at 12.4%, yet the Black population of CPAs in 2020 stood at just 2%. The “2021 Trends” report further highlights that the Black population of U.S. CPA firm partners—those in the most visible leadership roles of these firms, and with the most power to influence change—also stood at just 2%. Conversely, 2020 census estimates indicate white individuals made up 61.6% of the U.S. population, while white accountants made up 77% of

CPAs and 82% of CPA firm partners at that same time. The disparity is clear. That said, it’s not just Black accounting graduates and professionals that are struggling to gain ground in what has historically been a white, white-collar profession.

Again, we can look to 2020 census figures: Individuals identifying as Hispanic or Latino make up 18.7% of the U.S. population; Asian individuals account for 6%; and individuals identifying as “Two or More Races,” i.e., multiethnic, account for 10.2% of the population.

Now, compare those figures to the “2021 Trends” report’s populations among CPAs: Hispanic or Latino, 5%; Asian or Pacific Islander, 14%; multiethnic, 2%. If you assume these numbers are lower at the partner level, you’re correct.

Executive recruiting firm Crist|Kolder Associates’ “Volatility Report 2022” also gives us a glimpse into the state of diversity at the highest level of corporate finance—among chief financial officers (CFOs). The report analyzed 681 S&P 500 and Fortune 500 companies, of which 677 had sitting CFOs. Among them, 10.9% were “non-white” in 2022. Putting that into perspective, just 74 of the 677 CFOs leading our largest companies are minorities—43 Asian (6.4%), 19 Black (2.8%), and 12 Hispanic or Latino (1.8%).

Again, clear disparities in representation exist within CPA firms and within our largest, often most visible companies. Currently, the Asian population is the only racial or ethnic minority group in the accounting profession that has strong representation when compared to its percentage among the U.S. population, yet even this group struggles to maintain equal representation at the executive levels.

The accounting profession can’t afford to ignore the race-related inequities and barriers that exist within it. Nor can it ignore this simple fact: People like people who are like them. Why would a client or company want to do business with an accountant or CPA firm that they can’t, don’t, or won’t identify with? In our increasingly socially conscious culture, they wouldn’t. Put another way, the profession will struggle to remain relevant if it doesn’t look like the people it serves. Beyond simply doing what’s morally right to ensure equal opportunity for all, there’s a clear business imperative for increasing diversity, equity, and inclusion (DEI) across all levels of the accounting profession.

The AICPA suggests there’s a hint of change on the horizon: “While at a slower pace than we’d like to see, diverse hiring has increased.” In fact, the “2021 Trends” report shows, for the first time since 2012, the percentage of white accounting graduates hired into the accounting/finance functions of U.S. CPA firms has declined, down five percentage points to 65% of new accounting graduates hired. Hiring of Asian or Pacific Islander, Black or African American, Hispanic or Latino, and multiethnic new accounting graduates all increased ever so slightly in the latest report, accounting for the decline in white new hires.

The AICPA’s findings show that the diversity of accounting graduates is also shifting slightly. While white accounting graduates are still the majority (59%), 13% are Hispanic or Latino, 9% are Asian or Pacific Islander, 8% identify as “Other,” and 7% are Black, edging closer to aligning with our country’s changing demographics.

And while slightly increasing diversity over one reporting period doesn’t yet make a trend, those wishing to be cautiously optimistic might see this recent uptick as notable for a couple of reasons.

One, our population will continue to become more diverse. Directly quoting the U.S. Census Bureau on its 2020 census figures: “Nearly

all groups saw population gains this decade and the increase in the Two or More Races population … was especially large (up 276%) [from 9 million people in 2010 to 33.8 million in 2020]. The white alone population declined by 8.6% since 2010.” Further, the bureau has already said that its 2021 population estimates, released in mid-2022, indicate that “all race and Hispanic origin groups experienced population increases, apart from the white population.”

Two, a more diverse accounting student and graduate pipeline can be seen as a small testament that, combined with demographic shifts, the national initiatives and action items focused on increasing awareness of the accounting profession among minority populations are beginning to work—but there’s more work to be done.

Convincing diverse students to major in accounting is just one part of deciphering how to achieve greater DEI in the accounting profession. And while achieving a much-desired uptick in diverse hiring is another key to the code, a new survey by the Illinois CPA Society shows that more diversity among accounting students, graduates, and even new hires doesn’t necessarily translate to their long-term sustainability or success in the profession. That’s because what many of them are experiencing once becoming part of the profession is what’s ultimately driving them out of it.

For more on the disparity of diverse talent in the accounting profession, read the latest Insight Special Feature, “A CPA Diversity Report: Uncovering the Barriers to Success” at www.icpas.org/cpadiversity.

Derrick Lilly is the Illinois CPA Society’s assistant director of communications and publications and editor-in-chief of Insight.

One More Mile? Quiet Quitters Say ‘No, Thank You’

More than 50% of the workforce is taking part in this louder than quiet trend. When employees stop going the extra mile, what can CPA firms do to re-engage their teams before it threatens their busy season?

BY TERI SAYLOR

ven after a long career in public accounting, Rita Keller—a nationally known CPA firm management consultant, speaker, and author—still remembers a manager who consistently expressed gratitude for her work during her early days in the profession.

“When I first started as a CPA, one of the partners began thanking me for every little thing I did,” she says. “And I would work hard for him just because of that simple gesture.”

Keller later became a shareholder in that firm and stayed at it for more than 30 years before venturing out on her own to focus on helping CPA firms thrive. While Keller’s story may resonate with some, it’s no longer the norm. Increasingly, today’s CPAs are no longer showing the same commitment to maintaining loyalty and building a career at just one firm. Driven in large part by the COVID19 pandemic, today’s workplace culture has shifted to employees having more power over when they work, how they work, and who they work for, and they’re not shy about pursuing opportunities to align their work with their wants whenever they arise.

In fact, Gallup surveyed nearly 15,000 workers in June 2022, finding that 60% of them would be highly likely to change jobs if they weren’t allowed to work remotely, for instance, up from 37% of those surveyed in June 2021.

This post-pandemic trend, which saw hordes of workers leaving their jobs and switching careers, quickly gained the name “the Great Resignation,” a trend that CPA firms and many other professions are still grappling with today.

Now, as busy season approaches, CPA firms have a new, trending threat to wrestle with—quiet quitting. This phenomenon, spreading virally via social media, is the practice of putting minimal effort into each workday while still merely satisfying one’s job requirements.

All this runs counter to the hustle culture CPAs have traditionally embodied, especially during their busy seasons when putting in long hours and working days, nights, and weekends has been customary.

For some CPAs, like Keller, it’s worth the hard work and extra effort when it leads to promotions and career advancement. For others— many of them from younger generations—going the extra mile to spark career opportunities doesn’t appear to be an important goal. This seems especially true of those now accustomed to working remotely, where the realized rewards are greater flexibility and free time.

ATTITUDES ABOUT WORK ARE CHANGING

According to Gallup’s survey, quiet quitters make up at least 50% of the workforce, and possibly more. That statistic is a growing concern with employees in leadership and management roles,

particularly at CPA firms facing another challenging busy season ahead. But is quiet quitting the threat it’s been made out to be?

Damien Martin, CPA, a partner at FORVIS Private Client in Chicago, believes people’s overall attitudes about work are just naturally shifting. He thinks quiet quitting is an unfair description of people who aren’t driven by ambition. “Personally, I think the term is a bit of a misnomer,” he says, stressing that times have changed, and people today are taking a more holistic approach to their work and lives.

“I sat in the intersection where I learned from earlier generations of accounting professionals that work was about putting your nose to the grindstone, keeping your head down, saying goodbye to your family and friends, and working seven days a week during your busy times,” he says. “Nobody wants to do that anymore, and if you subscribe to that philosophy, you’re going to think everybody is quiet quitting.”

Keller also isn’t a fan of the term. “I don’t think quiet quitting is a fair description for professionals who may be happy doing exactly what’s required of them,” she says. Keller adds that these employees still want to be recognized and feel appreciated.

While lack of overt ambition among some employees may cause managers heartburn, of growing concern is a lack of engagement. Gallup reports employee engagement has been declining since 2020, when 36% of those surveyed indicated they felt highly “involved in and enthusiastic about their work and workplace.” That figure has fallen to 32% in Gallup’s 2022 survey, which also shows 17% of those surveyed are actively disengaged, disgruntled, and disloyal because their workplace needs are going unmet.

These stark numbers show us that quietly doing nothing isn’t going to make this loud trend go away anytime soon. So, how can CPA firms get a handle on employee engagement, satisfaction, and motivation to create a better, more balanced work environment so staff do feel energized to push through the busy season?

EFFECTIVE COMMUNICATION CAN SPARK ENGAGEMENT

“In healthy teams, life and work will ebb and flow, but if you draw a hard line on your expectations, people will disengage or leave entirely,” Martin cautions. The answer lies in better communication, feedback, and empowerment, he suggests:

“I think the onus is on managers to navigate communication. Often, employees aren’t even aware of what they don’t know, especially those early in their careers because nobody ever talked to them about expectations.”

Martin recommends first taking an individualized approach by engaging with employees informally to help raise their comfort levels. “If you notice they seem disengaged, abruptly confronting them head on can be intimidating to the employee and they may just tell you what they think you want to hear,” he says. “Rather, having relaxed conversations with each individual, asking them how they’re feeling, how their work is progressing, or if they have questions will encourage them to open up.”

Keller adds that convening informal small-team meetings can be effective for communicating and building camaraderie, which helps employees stay engaged. “Having short morning huddles, either remotely or in person, can really foster communication with both bosses and colleagues,” she says.

During these short meetings, ask if anyone is overloaded, if anyone has time to take on additional work, and offer opportunities for staff to share their concerns with the team or ask for help with any problem solving. Keller notes this will go a long way toward

creating a sense of teamwork in action. “It’s about building relationships with your staff and taking care of them, just like you do with your clients,” she says.

PROVIDE FEEDBACK AND EMPOWER EMPLOYEES TO LEARN FROM MISTAKES

Just as managers seek feedback from their team, employees need feedback from their managers, and that can be a powerful motivator. But rather than waiting until it’s time for a quarterly or annual review, Keller recommends providing regular feedback.

“You might be able to do away with your annual performance evaluations if you give your staff enough ongoing feedback,” Keller says. “That way, you’ll be able to see when they're struggling or when they're excelling in real time and can make adjustments or provide encouragement along the way.”

Empowerment is also a strong motivator for sparking engagement, especially when an employee makes a mistake or encounters a problem. Keller says managers who step into rescue mode and fix mistakes or solve problems themselves may feel like they’re being helpful, but from the employee’s viewpoint, those actions can be demoralizing.

“Sometimes staff will complete a work project and pass it to their manager who finds two or three mistakes, but rather than giving it back to the employees for corrections, the manager fixes the errors and sends the project on up the line because it’s faster,” Keller says. “This practice results in depriving employees of the opportunity to learn from their mistakes.”

Managers must also understand everybody is working toward the same goal but are doing it differently, and they must meet their employees where they’re at, Martin says. “There’s a wide variety of reasons people work the way they do, and they find motivation in different aspects of their jobs,” he says. “You might need to incentivize them better.”

Tailoring incentives to employees’ needs can be an effective approach to keeping them engaged and inspired to do their best. Incentives could be in the form of more money, generous time off, or a flexible schedule that helps them tend to personal needs.

Some employees also want to feel their time and labor are going to a good cause. “I think the younger generations especially want to understand their ‘why,’” Martin says. “They want to understand the bigger picture, what they’re contributing to, and the end result.”

No matter how managers go about understanding their staff’s motivations and what gets them more engaged in their work, Martin stresses not to wait on taking some form of action. “If you wait until April 1 to deal with employee engagement when tensions are high, you’ll get more of an emotional response rather than how your employees really feel about their jobs overall,” he says. “The investment in your team needs to happen before you start ramping up for busy season.”

Martin compares it to putting gas in your vehicle before taking a trip. “You have to make intentional deposits into your team’s gas tank before you can accelerate into busy season when you know your firm will be expending a lot of energy to go the extra mile.”

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.

M&As, Leadership Changes Present Growth Opportunities

BY NATALIE ROONEY

M&A deals have cooled slightly in 2022, but for the accounting profession, things are still hot. Over just the first eight months of 2022, investment bank William Blair reported 64 M&A transactions in the accounting services sector, compared with 81 in 2019, 65 in 2020, and 74 in 2021.

“The frenzy is very real,” says Allan D. Koltin, CPA, CGMA, CEO of Koltin Consulting Group, whose Chicago-based firm had consulted on 20 accounting firm M&A deals as of Sept. 30, 2022. “We will probably end 2022 at 30 deals,” he estimates. “A normal year would be 12 to 15 deals.”

Organizational changes, like M&As or other leadership transitions, often create a work environment surrounded by stress and anxiety,

especially for those below the leadership level. Of course, it’s a natural, human response to any form of big change. The same old, same old is about to become new—and that can be scary. Questions like: “How will this impact me,” “Will my budget be cut,” “What does this mean for my team,” or perhaps, a timelier concern, “Will I still be able to work remotely,” are likely to be buzzing around the office’s water cooler and Zoom chats.

But what if these transitional changes didn’t have to be so scary? Instead, what if these changes presented you and your team with a prized advantage? If you ask most experts, they’d agree that these changes are a positive.

Here’s how you can prepare for an M&A or other leadership change and see it as an opportunity to grow your career.

Merger and acquisition (M&A) activity among CPA firms has been on a wild run over the past few years. While these deals are often great for leaders at the top, what about the rest? Experienced M&A leaders offer suggestions on how staff can use these transitional changes to their advantage.

Stay the Course

First and foremost, don’t immediately run for the exit sign—your firm still needs you and they aren’t asking you to leave. Most firm leaders not only care about you, but they’d love for you to stay and find your best fit within the changed organization.

Current Illinois CPA Society (ICPAS) Chairperson Mary K. Fuller, CPA, managing partner of Citrin Cooperman Advisors LLC’s Chicago office, says when a firm considers a merger, it wants a fit for both its clients and staff. “You can’t run your firm without your people, and most of all, we want them to be able to grow.” This mentality is what steered her through the closing acquisition of her former firm, Shepard Schwartz & Harris, by private equity-backed Citrin Cooperman earlier this year.

Fuller acknowledges that M&A activity creates stress and anxiety, and words alone won’t put people at ease. Ultimately, Fuller says it’s leadership’s responsibility to show staff that the firm’s transition is a positive for them: “You have to show them they’ll have choices and opportunities.”

Brian Blaha, CPA, growth partner on Wipfli’s leadership team, says when new firms are acquired by his firm, the goal is to create a common vision for what the organization is today, and what it’ll become—but it takes time. “The last thing you want is to bring in a firm and have someone move on. It puts a strain on merger integration,” he says. “We focus on the culture and getting people on the right teams within the firm and then connect them to a peer advisor to give them someone to talk to at a common level. We ask them to give us a year to show this is going to go alright.”

Position Yourself for Success

There are many reasons firms decide to merge, and right at the top of the list is creating new opportunities for individuals to grow their careers, says ICPAS Immediate Past Chairperson Thomas B. Murtagh, CPA, JD, tax partner and regional tax director at FORVIS LLP. Murtagh’s prior firm, BKD, merged with DHG this summer to establish FORVIS, whose name represents the “forward vision” of the more than 5,400 partners and team members who’ve come together under the new brand. Thinking of the career opportunities that come from strategic mergers, Murtagh says one should look beyond traditional tax and audit options as the new firm may be able to explore new markets and client services. “It’s an opportunity for folks to raise their hand and say they want to get involved,” he says. “Be willing to be open, volunteer, and participate.”

Koltin says there are three thought processes people go through when considering their career options during and after a merger:

1. Will this allow me to accelerate my career growth? Can I get promoted more quickly because the firm will be growing faster?

2. I’m happy where I am today with a balance of work and life. Is this going to rock my world? Will this culture give me enough of what I like?

3. Can I financially do better, and can I get more challenging work? It’s important for staff to work through those questions, but leadership also needs to consider the same set of questions and evaluate how they’re meeting the needs of staff who want to grow and accelerate. “They need to make sure these avenues exist for their star employees,” Koltin says.

Consider these additional steps when positioning yourself for career growth following a merger or acquisition:

• Be open-minded. Talk to leadership and speak with both partners and managers. “Look around,” Fuller advises. “Who’s experiencing success and taking advantage of opportunities? Ask if you can hang onto their coattails. Ask for introductions. Don’t wait for things to come to you. Raise your hand and let others know you’re interested in doing something new or different.”

• Give the acquiring organization a chance. Blaha encourages associates to assume positive intent on part of the firm. “In most cases, a larger firm means creating additional opportunities for the associates,” he says.

• Take initiative and lean in. “Opportunities aren’t just going to come to you,” Blaha says. “When I coach young associates, we discuss who they should meet and where they think they’ll fit in. Then, leaders can assist from there. But you need to take the initiative to meet, learn, and give. After all, leaders can learn from you, too.”

• Have a positive mindset. It’s important to remain positive, be engaged, and ask questions. “Make your voice heard and do it in a way that feels like you’re working to find solutions,” Murtagh says. “Conversations like that will be more than welcomed. We [partners and firm leaders] want to hear ideas for better ways to do things.”

• Get out of your comfort zone. “I’ve been doing this for 40 years, and I feel like I have a new job,” Fuller says. “It was new, exciting, and scary to go through the private equity deal, but I knew it was going to be great. Now I see a lot of young people here who can be a part of something big.”

• Look for different types of opportunities. If you don’t hear about a service line role you’re passionate about, look internally. Murtagh says mergers create a need for team cohesion. “New people need coaching and assurance about the opportunities and benefits from this sort of restructuring. How can you play a role in that?”

Avoid Getting Stuck

During any transitional time, Koltin says it’s important for associates to not get stuck in the “we’ve always done it this way” mindset. “Sometimes we get so locked into the old ways and change passes us by,” he cautions.

When Fuller sees associates falling into this pattern, she reminds them the world is always changing. “If something doesn’t work, we’ll do something different,” she says. “Giving it a try first is my biggest thing. We all have things we don’t like to do but seeing them through a different lens is part of our learning and growth.”

Blaha reminds staff that learning takes place on both sides of a merger. “One of the reasons we do M&A is to continue to advance, especially on the consulting side,” he says of Wipfli. “The boutique firms we’re bringing in have processes and go-to-market strategies that can be more advanced or provide a twist to the ways we’ve been successful. We want to know about that. Bring us your ideas for how to do things better.”

When the desire to stick with the old ways strikes, Murtagh encourages comparing what’s being lost to what’s being gained. Ultimately, an associate might decide what’s being lost is too much, and the new firm isn’t the right environment or part of their career goals. “That’s why it’s important to not skip this ‘what’s changing here’ thought process,” he says. “Work with your coach or mentor to address your questions and worries. It’s better to acknowledge it if you realize it’s not the spot for you. You don’t want to be unsatisfied with your career.”

Talking to people in leadership who can provide you with information to make the transition more manageable is an important step, but going into these new situations with an open mind and thinking broadly will also help you see the positives for both clients and team members. “That’s what creates rewarding careers and opportunities,” Murtagh says.

Identify Your Opportunity

Change brings challenges, but it also brings new career opportunities and resources. In fact, mergers often invite opportunities for people to explore other niches in their fields. Whether it’s cryptocurrency, technology, international tax, trusts and estates, wealth management, or auditing of construction companies or governmental agencies, for instance, the possibilities are endless.

“Maybe one part of the merger has a deep bench in a particular industry or in a different line of business,” Murtagh points out. “Part of the reason for doing these combinations is to have a bigger base upon which these great minds can come together and develop new tools and ways to serve clients.”

Koltin says individuals at smaller firms have likely been generalists throughout their careers, which is good, but a merger offers new opportunities for specialization. “It’s like declaring a major,” he points out. “Now you can choose a service line and go deeper into that niche. There are so many options to narrow things down and become the person who’s famous for it. What do you want to be famous for that’ll help your firm separate itself from everybody else?”

For those going through a merger or other transitional change at their organization, Koltin offers the following words of wisdom he’d give anyone joining a new company:

• Learn the playbook, the services, how the firm goes to market, and how people advance. What are the most important things?

• Use your coach/mentor to assess your skills. What are you really good at? What are you really passionate about? Where good and passion meet represents what you should be doing in terms of your individual goals.

If interested in pursuing new opportunities within the changed organization, Blaha emphasizes that you don’t necessarily need to reach out to top leadership to express interest. “Talk to your current team,” he says. “Ask them to help you get connected.”

Bring Your Growth Mindset

When a big change takes over an organization, some employees immediately take the drastic step of jumping ship before giving things a real chance and without talking to leadership about their concerns. As a firm leader, Fuller admits that these moments are disappointing. “We could’ve found someone new opportunities with different clients or industries or even in a different location,” she says. “Just ask!”

Blaha encourages flipping the narrative. “A merger is a new opportunity, not a barrier. It comes down to mindset. The situations that arise in our careers that require us to stretch are often when we grow the most,” he says. “When you come in with a growth mindset, you’re more likely to find opportunities versus when you’re change-resistant.”

“Your mindset is the one thing you can control, and you get to choose it every day,” Murtagh says. “It takes being conscientious about that mindset and what you’re bringing to your firm, office, and team every day. If you look at these challenges and changes as opportunities, it’s a way to navigate and shape a career that’s incredibly rewarding for you in the long term.”

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.

Avoiding the Top 10 Cryptocurrency Tax Traps

With so many rules and nuances to consider within the cryptocurrency space, it’s no surprise that many tax clients fall victim to reporting mistakes. To prevent your clients from pointing the blame finger at you, here’s what to look out for.

BY KASIA WHITE

The number of U.S. taxpayers investing in cryptocurrencies is rapidly growing. As of summer 2022, 18% of Americans had invested in different cryptocurrencies—a 125% jump from summer 2020, according to Finbold.

Even though more Americans are investing in cryptocurrencies, many tax clients are still unaware of their reporting responsibilities, and even among those who are aware, there’s often confusion on how to do so accurately as regulatory guidance has been slow to keep up with the market. This puts extra pressure on CPAs to make sure their clients accurately track, report, and pay taxes on their eligible cryptocurrency transactions.

Guinevere “Gwen” Moore, managing member of Chicago-based Moore Tax Law Group, says there’s a fundamental misunderstanding from her clients about their cryptocurrency reporting obligations, and she further warns that CPAs need to work extra hard to protect themselves in this growing environment: “If something goes wrong, we all know the client is going to point their finger straight at their CPA.”

To help clients navigate this space, here are the top 10 cryptocurrency tax traps to avoid.

Not Reporting Cryptocurrency Activity

There’s only a few scenarios where you don’t have to report cryptocurrency activity to the IRS: when the only action you engaged in was purchasing a cryptocurrency with U.S. dollars, holding it, or transferring it from one wallet to another that you possess. If your cryptocurrency activity extends beyond these scenarios, then there are IRS reporting requirements.

“I increasingly have clients with cryptocurrency reporting issues, and those typically stem from them not reporting cryptocurrency at all, or from not understanding that cryptocurrency has to be reported on a transactional basis,” Moore explains. “Whatever you do, make sure there’s a good record of the process that your client went through to determine how to report it.”

Failing to Prepare and Maintain Adequate Records

Missing data and information are one of the most difficult issues tax professionals face when handling clients’ cryptocurrency accounts.

“Clients rarely keep records or even have an idea of everything they’ve done related to it,” says Justin McCormick, senior associate in the digital assets group at Founders CPA, a Chicago-based firm. “It’s often like trying to put a puzzle together.”

Andrew Gordon, CPA, managing attorney with Gordon Law Group Ltd. in Skokie, Ill., runs into the same problem on a regular basis.

“Data collection is probably 75% of the process,” Gordon says. Most cryptocurrency platforms don’t issue tax forms, but the obligation for taxpayers to report their transactions still exists. This puts an extra burden on taxpayers to either access or create their transaction reports, provide them to their CPA, and remember everything they did. “Very often, clients will lose track of what cryptocurrency they were using and when they were using it, and that makes things more difficult,” Gordon explains. Despite these challenges, Gordon points out that the blockchain technology that cryptocurrency transactions rely on is “this record of everything that’s happened and it’s immutable. It doesn’t go away, so we can typically identify transactions to a certain address and use the information that we do have to help identify any missing information.”

Encouraging your clients to utilize software programs can help. For smaller cryptocurrency investors, creating a simple spreadsheet tracking their cryptocurrency transactions is likely enough. For others, it may be helpful to use a cryptocurrency tracking app or program, like CoinTracker.

Christopher Lazzaro, CPA, crypto tax analyst at CoinTracker says the company’s app is helpful because it “allows you to see what you paid for the crypto asset and what you sold it for. It’s a computer program, so you might need to manually address gaps on obscure tokens, but it’s generally automated and a great tool to help you maintain your records and be able to prove transactions.”

Failing to Properly Calculate Capital Gains and Losses

Much like buying and selling stocks, when your clients sell their cryptocurrencies, they should recognize a capital gain or loss based on their cost basis and selling prices.

Given the wild swings in cryptocurrency prices, Moore emphasizes that taxpayers will likely be eager to report any cryptocurrency losses to the IRS, as they can potentially offset the entirety of the tax consequences created by any realized capital gains.

In the event of lost cryptocurrency resulting from a corporate collapse, Gordon says taxpayers can’t claim a loss until that loss is certain. Meaning, a bankruptcy court adjudicates the case.

“Then the question is, is this a tax deduction? Is this a capital loss?

When can you realize it?” Gordon says. “Historically we’ve seen companies go bankrupt on other exchanges and still be able to pay out their holders.” One example is Mt. Gox, one of the largest cryptocurrency exchanges that launched in 2010 until its collapse in 2014. “A loss isn’t a loss until it’s final. With these types of losses, people often feel that they’ve lost before that’s actually the case,” Gordon stresses.

Using the Wrong Forms to Report Cryptocurrency Transactions

Information reporting requirements arise when a taxpayer starts to use cryptocurrency in exchanges, such as trading one cryptocurrency for other cryptocurrencies, or purchasing services and goods with cryptocurrency.

Where can CPAs find this information? Right now, Moore says the best resource is the IRS’ FAQ on virtual currency transactions. She notes, “If you read through those FAQs, they’ll either give you the answer to nine questions out of 10 that you’re going to have, or they’ll give you the next best place to go.” Even if you can’t reach the right answer, Moore believes you’re likely going to get to a very defensible position from an IRS adjustment standpoint and from a malpractice standpoint.

Gordon points out that the tax software that currently exists on the market meets the basic requirements for most basic cryptocurrency transactions. However, as soon as clients start to have more complex activity, for instance in decentralized finance, it’s usually a few years ahead of the software’s capability.

Gordon’s firm uses software from ZenLedger and BitcoinTaxes, but admits the accountants are left doing most of the work manually. “I would caution reliance on software because it’s in its early stages,” he says. “It’s a very new space that has a lot of nuances. Imagine designing tax software but there’s all these variables. The problem is cryptocurrency changes every year—new functions and transactions, new terms and definitions that the software has to be updated for, and often by the time it is, the tax return was due.”

Improperly Reporting Cryptocurrency Received as Earned Income

Generally, the IRS treats cryptocurrency as property, meaning that when you buy, sell, or exchange it, this counts as a taxable event and typically results in either a capital gain or loss. Taxpayers need to use Form 8949 for reporting cryptocurrency gains and losses when the cryptocurrency is treated as property. When you earn income from cryptocurrency activities, or receive cryptocurrency as compensation, it’s treated as ordinary income and should be reported on Form 1040.

Using the Like-Kind Exchange Exception

“Like-kind exchanges don’t apply to cryptocurrency,” Lazzaro says.

The Internal Revenue Code has traditionally permitted investors to exchange real property used for business or held for investment purposes for other business or investment property of the same type, but the IRS released a memorandum clarifying that cryptocurrency exchanges aren’t included in the like-kind exchange exception. The memo addressed Bitcoin, Ether, and Litecoin specifically, but it likely applies to all cryptocurrencies. However, it doesn’t necessarily apply to transactions that occurred before Jan. 1, 2018. The IRS stated that like-kind exchange treatment to cryptocurrency transactions prior to 2018 are left in a “grey area that will be decided on a case-by-case basis.”

Failing to Report Cryptocurrency Exchanged for Goods and Services

More retailers are beginning to accept cryptocurrencies as payment for their goods and services, but anytime you use cryptocurrency for payments, it’s a taxable event.

“The IRS is very clear about that,” Lazzaro notes. “Whatever the fair market value of the cryptocurrency used was at the time you spent it, that’s going to determine your proceeds on that sale.”

Improperly Reporting Cryptocurrency From Airdrops, Forks, and Splits

Airdrops, forks, and splits are some of the more complex aspects of cryptocurrency tax reporting. According to the IRS:

• An airdrop is a form of cryptocurrency marketing in which a developer distributes new tokens to potential users and investors, often for free, to generate attention and build a loyal base of followers.

• A fork is an update (whether minor or major) to the blockchain protocols on which virtual currency transactions are recorded.

• A hard fork is when the blockchain coin/token permanently splits into two, leaving investors with two differently valued, incompatible types of blockchains and tokens.

Moore warns that cryptocurrency holders might’ve received additional coins or tokens from these taxable events without understanding where they came from.

According to a July 2021 IRS notice, recipients must treat newly received cryptocurrency as ordinary income, even if they didn’t have any control over the fork or airdrop, and didn’t intentionally plan for or purchase new coins. The recipient’s basis in the newly acquired cryptocurrency is the fair market value at the time it was received.

Failing to Report Cryptocurrency-toCryptocurrency Transactions

As mentioned before, cryptocurrency is treated as property in most cases for federal tax purposes. Taxpayers who exchange one cryptocurrency that’s held as a capital asset for another cryptocurrency are exchanging property for property and must recognize a capital gain or loss.

“It’s becoming better understood, but for a while most people didn’t realize trading one cryptocurrency for another was a taxable event,” Lazzaro notes. “For example, people weren’t realizing that switching their Bitcoin to Ethereum or some other token was taxable.”

Failing to Take Proper Steps in the Event of Death or Disability

Cryptocurrencies, if not held through a cryptocurrency exchange or broker, are often stored on private digital wallets with unique key codes to access them. Therefore, estate planning is crucial to ensure the information needed to access and take ownership of the cryptocurrency isn’t lost in the event of a death or disability. Simply advising a client to share this information with a trusted spouse or heir may be sufficient to some, but more formal processes may be required depending on where and how the cryptocurrency is stored and how concerned the owner is about security.

Sharing your private keys with another person leaves you vulnerable to that person using your keys to create a wallet controlled by them on another computer or device, which could give them access to all your cryptocurrency, Lazzaro warns.

Moore says some exchanges can allow the family of a deceased investor to gain access through a verification process. Another method she notes is to establish a “time-locked transition,” where one can designate a specific time to transfer their cryptocurrency to someone else.

In some ways, cryptocurrency can be seen as having its own language and accounting system, with so many shifting rules and nuances as regulatory bodies converge on the space. “We work with many CPAs that don’t yet know this side of the practice, and there’s nothing wrong with that. It’s quite a specialized focus,” Gordon says. “If you walk past some of our staff reading the blockchain, it looks like they’re looking at something out of “The Matrix.” Not everyone wants to do that or wants to keep up on all those changes.”

However, there are opportunities for those that do want to truly engage in this space. Lazzaro, who’s been in public accounting for nearly two decades, has completely immersed himself in the cryptocurrency world for the last three years. “I started doing all these other taxable transactions, like staking, looking at the decentralized exchanges, providing liquidity, and buying NFTs so I could understand it and talk to my clients about it,” Lazzaro says. “I felt, if I was able to do it, I’d be a better advisor.”

Importantly, Moore urges CPAs to be direct with their clients: “Don’t be afraid to ask questions and push back to make sure that you fully understand your clients’ cryptocurrency transactions and what is and isn’t being reported by them. It’s really important that you have a good record of having said out loud whether you’re comfortable with their activity, understand their transactions, or if additional information is needed.”

Remember, if the IRS comes to audit a client, you can pretty much guarantee that they’re going to say, “It wasn’t me,” and point their finger right at their CPA.

Kasia White is a freelance writer who specializes in profiling small businesses, covering the musical products industry, and interviewing leaders of globally renowned companies.

Like it or not, accounting is more than just numbers. Whether growing your firm, gaining new clients, or maintaining long-term business relationships, networking is a crucial component to a CPA’s success. Three experts weigh in on the ‘how’ and ‘why’ of networking.

BY KRISTINE BLENKHORN RODRIGUEZ

Mention “networking” to a group of colleagues and reactions immediately vary—some love it, some accept there’s value in it, and others simply dread it. This is especially true among CPAs (exceptions aside) who usually don’t choose a numbersbased field because they were born extroverts.

“I see it in accounting more than in any other industry,” says Elise Gelwick, a communications skills and networking consultant, as well as founder of Eleview Consulting. “People say, ‘I chose to be an accountant so I wouldn’t have to talk to people.’ But developing trust and relationships applies in any field today.”

While avoiding people is a comfort zone some professionals naturally lean into, many experts, including Gelwick, don’t recommend it as it hinders many aspects of career growth. Statistically speaking, most professionals wouldn’t be where they are today without networking. According to research from Zippia.com, 70% of employees landed their current positions because of networking, and 85% of jobs are filled via networking through personal and professional connections. And, to the dismay of the introverts among us, 95% of professionals agree that face-to-face connections are key for successful long-term business relationships.

Former Illinois CPA Society Board of Directors Chairperson Daniel F. Rahill, CPA, JD, LL.M., CGMA, managing director of Wintrust Wealth Management, agrees with this assessment. Despite being born a natural introvert, Rahill credits his successful, longstanding career to networking. In fact, he remembers a time when his early introversion made it difficult for him to consider networking in any formal way: “My managing partner at KPMG must have seen something in me that I didn’t, because I was shy and tentative in front of large groups. But he asked me to do a three-month rotation as a United Way speaker, from the factory floor to the boardroom.” Through this, Rahill became very comfortable networking a room and hasn’t looked back.

“I certainly wouldn’t be where I am today without networking,” Rahill adds. “If I can do this, all introverts can do this. It’s a skill that just takes practice.”

Rahill, who often coaches young professionals on the networking skills that used to trip him up, says there are some practical, microskills you can learn, like how to gracefully enter—and exit—a group conversation: “No matter where you are in your career, there’s no reason to leave an event feeling like you never got into it. Working on these skills will ultimately give you the confidence you need for the situations that used to make you uncomfortable.”

No matter your comfort level, here are six ways you can polish your networking skills, add purpose behind them, and create meaningful connections that add value to your career.

1. Do the Inner Work, Start With Your ‘Why’

Many professionals begin networking without taking their emotional and mental temperature first.

Megan Walls, an executive career coach and founder of Walls Career Coaching, believes you must first do some inner work before you start the outer work of networking. “You’re not the same person you were five years ago, or possibly even a year ago. You have to begin with who you are today,” she says. “The inner work is really hard for some people because it can make them uncomfortable. But it’s the foundation for networking and career success.”

Walls has her clients first complete a values assessment, evaluate strengths versus skills (skills are learned, strengths tend to be innate), identify passions, and take stock of accomplishments. “This is usually where the ‘aha’ moment comes in,” she explains. “If you have all of this before you dive headfirst into networking, it’ll save you so much time and wasted effort.”

“It’s so important to start with the ‘why,’” Gelwick adds. Networking has evolved from the days where people mainly used it to move up in an organization. Now, with career paths and work-life balance changing dramatically—particularly post-pandemic—networking can serve multiple purposes, and everyone has their own reason for doing it, whether it be launching a side gig or landing a plum promotion. Gelwick asks her clients, “Are you looking for mentors? Are you wanting to explore another career path but unsure what it entails? Are you dying to work for a particular company but don’t know how to get in the door? These are important questions that’ll guide you on what you do.”

2. Treat Networking as a Two-Way Street

Networking has gotten a bad rap over the years. Some people associate it with glad-handing at a cocktail party over bad appetizers. But that view is outdated, Walls says. “Networking isn’t a dirty word. It’s really about creating and maintaining relationships—and it goes both ways. Sometimes networking is making a call to find out what you could do for someone else.”

The key is to start networking before you even really need the relationships. “The biggest misconception about networking is that you do it when you need a job,” Gelwick stresses. “You should really do it when you need nothing, because taking time to build up relationships will serve as a launch pad when you do need something.”

What holds many back, Gelwick believes, is that we’ve all become so accustomed to instant gratification. But networking can take years to realize returns, as it doesn’t always reap immediate rewards. You need to contribute without expecting anything from others to build up a bank of trust—and a group of people willing to help you when you do need it.

3. Define and Build Your Personal Brand

“It can be hard to stand out from the crowd, so being really intentional about your personal brand matters,” Gelwick says. “Tell your story. If you and I talked at an event and all I told you was that I owned a company covering networking and branding, that’s not very memorable. But if I told you that I grew up in a family with parents who felt so strongly about personal interaction and likeability that they made me converse with adults from a very young age, you’d probably remember that.”

Your personal brand should also reflect what you’ve done. Walls recalls a client who delivered results but, as an introvert, was often quiet about painting a picture of the collective good she’d done for the company. To help the client through this, Walls asked her to compile her accomplishments into a cohesive picture and story of what she’d done for the firm over time. She then shared it with the CEO in their first meeting, which led to her being seen as a valuable resource.

“We often assume bosses and other influencers know all we’ve done,” Walls explains. “They don’t. They’re busy. You need to be known and it’s up to you to make that happen. It’s a form of networking within your own organization.”

4. Use Body Language and Nonverbal Cues

Alison Henderson, founder of Moving Image Consulting, teaches advanced body language and soft skills to leaders. She believes nonverbal cues are far more important in networking than most professionals realize. Research supports this claim, as a study by “Silent Messages” author, Dr. Albert Mehrabian, found that only 7% of any message is conveyed through words.

As one of only 26 certified movement pattern analysts in the world, Henderson helps clients be intentional about how they impact others based on their movement and presence, as well as helping them read what others’ body language might be saying.

“The way you move is actually brain-based,” she explains. “It comes from thought.” Therefore, changing your thoughts might change your presence. Henderson recalls trying to help a pharmaceutical sales team increase their success with physicians. “They were using open-ended questions with doctors and emphasized listening. But when we role-played, I realized they weren’t listening with their eyes. They were taking things at face value without digging deeper.”

According to Henderson, knowing just a few tips about body movement and patterns can help. For example, when people tip their shoulders one way or another it indicates they’re evaluating. She adds that this might be the time to offer more information to sway their decision, tipping the scales. When shoulders return to a level position, they’ve likely made their decision. “It’s a commitment signal,” Henderson explains. “Think of it as a sigh of relief from the body, equivalent to leaning forward or leaning back.”

In Henderson’s experience, posture also plays a key role in networking—it’s the best way to give yourself an executive presence. “We’ve crouched or rounded our posture over time, likely from all the time spent staring at a computer,” Henderson says. “I usually tell people to think about where their sternum is and lift an inch. You’ll look more executive, more like a leader, and you suddenly feel that way too. It’s a signal to your body and it responds accordingly.”

Standing from a position of strength and stability is an area that women especially need work on, Henderson stresses.

“Women often stand with one foot in front of the other, crossing their ankles,” she details. “Many say they do it to look thinner. When it comes to looking like a leader, it doesn’t help. Ground yourself. Feel the earth under your feet and stand with feet apart. That not only conveys good posture, but it also conveys strength and knowledge.”

5. Don’t Overlook Networking Boosters

Despite LinkedIn having over 850 million users around the globe, the most overlooked aspect of networking that Walls routinely sees is an outdated LinkedIn profile. “Don’t blow it off,” she cautions. “Keep adding to your network, adding accomplishments and jobs, and checking your feeds. If you wait until you’re looking for new opportunities, you’ll find it much harder to recall all your accomplishments and join in online conversations.”

Another omission she feels hurts professionals is neglecting an informational interview—an informal conversation with someone working in an area of interest to you. “You can’t beat getting advice from someone who is doing something you’re considering. They can share what you need to know and recommend other people you should talk to.”

Walls urges restraint, however, if you’re tempted to ask for a job or ask what the other person can do for you during an informational interview. The objective isn’t to find job openings, it’s to learn from the other person and to become aware of what you might be able to do to help them in the future.

6. Apply the Basics

Ensuring your basics are covered is another important piece to networking, Gelwick suggests. “Be assertive,” she says. “Ask to go to client calls and lunches so you can see how successful rainmakers in your firm navigate these situations.”

Gelwick also likes lists: “Keep track of who you interact with in a running list. Keep them apprised of where you are and what you’re doing—and make sure you know the same about them.”

Preparation and follow-up are just as important as ever, too, Gelwick adds: “Do your homework beforehand so you can have an intelligent conversation and send them a thank-you note later.”

Whether CPAs are ready or not, networking is making a comeback as we emerge from pandemic-driven social distancing and inperson events bring us back together. But rather than taking the traditional, comforting route of being introverted, it’s time to change our mindsets. Doing so may just change the trajectory of your career.

“What if I hadn’t moved out of my comfort zone?” Rahill asks. “I wouldn’t be where I am today.”

Kristine Blenkhorn Rodriguez is an award-winning Chicago-based writer and editor whose work has appeared regularly in the Chicago Tribune as well as mainstream business publications.

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

3 Steps for Taking Your Leadership to the Next Level

How am I doing as a leader today? What’ll it take for me to get better? How will I make it happen? These are the questions every leader should be regularly asking themselves on their journey to continuous improvement. Answering these questions can help you successfully create a structured development plan to take your leadership skills to the next level.

To get started, here are three steps that’ll ensure the new year becomes the best year yet along your leadership journey.

1. ASSESS YOUR LEADERSHIP WHERE IT STANDS TODAY

Before you can get better, you’ll need a clear assessment of how you’re doing as a leader now. There are two parts to this evaluation: self-reflection and seeking feedback from others. Self-reflection: If you feel like you’re often gasping for air as you get swept up in the whirlwind of today’s fast-paced, ever-changing marketplace, you’re not alone. It’s hard for leaders to slow down and reflect on their leadership. But it’s a crucial step if you’re serious about taking your leadership to the next level. Here’s what to do to take a pause:

• Schedule an appointment with yourself—away from your office—to reflect on the current state of your leadership journey.

• Review your recent successes and failures, noting important lessons that’ll help you lead better in the future.

• Create a mental movie of critical leadership moments and how you performed in them. Explore what went well and how you made a positive impact. Celebrate those moments. Then, identify what didn’t go well and what caused the breakdown.

• Determine what you need to change in your approach that’ll make you a more effective leader.

Seek feedback from others: Conduct a 360-degree survey to seek feedback from others. Find an online survey that includes a self-assessment to compare how you rate yourself with the ratings of others. It’s best to keep these surveys anonymous with your work relationship being the only identifier (i.e., boss, peer, or direct report). I’ve used RightPath’s 360° Leadership Assessment Tool, which groups feedback by leadership competencies (e.g., delivering results, building relationships, developing others, and emotional intelligence).

Even when you’re at the top, there’s always room to improve. Here are three steps every leader should take to make the new year their best year yet.

Admittedly, the anonymous nature of this feedback can be both a blessing and a curse. The blessing is the ability for your colleagues to share their experiences without fear of judgment or reprisal. But that’s a curse, too. Without clear direction, a 360-degree survey can be used as a tool for retaliation or other punitive motivation. To avoid this, the survey administrator (typically an HR professional or external coach) should emphasize that it’s for development purposes, not disciplinary.

Another downside to typical 360-degree assessments is the cost. For that reason, many organizations limit this tool to senior leaders. However, don’t let that stop you from seeking feedback on your own, or as I call it, the “DIY 360.” For this approach, I like the advice leadership coach and author Kristi Hedges shared in her Harvard Business Review article, “How Are You Perceived at Work? Here’s an Exercise to Find Out.” Hedges suggests the following:

• Select five colleagues (I suggest your boss, two peers, and two direct reports).

• Arrange face-to-face meetings (could be done via video conferencing in a remote work setting).

• Stay open and resist the urge to become defensive (take a deep breath and remind yourself that this conversation will help make you a better leader).

• Ask two simple questions: 1) What’s the general impression of me in the workplace? 2) What could I do differently that would have the greatest impact on my success?

Consider modifying the second question above if you need to obtain feedback in a particular area. For example, if you need improvement in leading meetings, you might ask, “What could I do differently to make the meetings I lead more successful?”

Notably, you don’t need to wait for a structured 360-degree exercise to obtain feedback. You can use the two questions above at any time, with any person willing to share their experiences with your leadership.

2. CREATE A GAME PLAN FOR IMPROVEMENT

Now that you have your self-reflection notes and the feedback from others in hand, you’ll be ready to start step two: creating a game plan to develop your strengths and address any gaps that hinder your effectiveness as a leader.

To get started on this step, focus your plan on leadership skills that require further development for you to be more effective, such as communication, delegation, and coaching. You should also include habits that’ll elevate the value you contribute to your organization, such as strategic thinking, team building, and meeting one-on-one with direct reports. Additionally, I suggest making your game plan more actionable by using the SMART acronym: specific, measurable, attainable, relevant, and time-bound.

3. OBTAIN ONGOING SUPPORT

The final step in your leadership development plan involves sharing your goals with those who provided feedback and, perhaps, trusted colleagues and mentors. Continue to build an ongoing feedback loop with them to monitor progress as you strive to better yourself as a leader.

Once you’ve obtained feedback and created your game plan, Marshall Goldsmith, a widely regarded executive coach, recommends sharing your intentions for improvement with these stakeholders and then following up with them regularly to measure

progress in each growth area. Goldsmith suggests asking questions like “Based on my behavior last month, what ideas do you have for me next month?” Focusing on future behavior, rather than dwelling on the past, inspires continuous improvement. Goldsmith’s advice is worth following—he built his stakeholder-centered coaching methodology on the premise that he’s only paid if his clients achieve positive change in their leadership behaviors.

Beyond your internal resources, consider engaging a mentor or coach outside your organization. Microsoft Founder Bill Gates is among leaders who believe in the value of outside support. “Everyone needs a coach,” he said during a 2013 TED talk. “It doesn’t matter whether you’re a basketball player, a tennis player, a gymnast, or a bridge player.” The audience laughed as his slides first showed world-class athletes and then a picture of himself sitting at a card table. Gates continued, “We all need people who will give us feedback. That’s how we improve.”

Kristie P. Paskvan, CPA, MBA Board Director, First Women’s Bank and SmithBucklin Leadership Fellow, National Association of Corporate Directors kppaskvan10@gmail.com

The Metaverse Meets the C-Suite

When Facebook changed its parent company name to Meta, it became clear the metaverse was going mainstream. One can barely turn around these days without hearing about the metaverse, digital twins, virtual and augmented reality, non-fungible tokens (NFTs), edge computing, and other concepts related to digitized reality.

François Candelon of Boston Consulting Group recently talked about the metaverse as a physical world converted into digital data, then recreated digitally as either a reflection of reality or as fiction (i.e., games). This means the metaverse is broader than just virtual or augmented spaces. Instead, you can engage with the metaverse through your current hardware before adding virtual or augmented reality components. Think of the metaverse as a next-generation internet where our commercial activities, entertainment, social, work, and sports interactions can, and likely will, take place. Visualize visiting another country or hiking in a national park with just a click. If you think shopping online is easy now, imagine having an online avatar to try on clothes for you before you purchase, or in the physical world, augmented reality glasses that allow you to view an object in numerous colors or patterns as you peruse various consumer goods.

The metaverse isn’t just limited to personal engagement—business interactions will also benefit. As an example, real estate construction, supply chain planning and reporting, and quality control reviews can all be enhanced with real-time digital twin applications that mirror reality. Smart contracts and blockchain will benefit legal, financial services, and other professions where title and ownership require verification.

As the speed of experimentation and implementation advances, there’s no doubt that businesses will need to examine whether to interact with their customers and stakeholders in the metaverse and focus on understanding how doing so can enhance their business strategies.

GROWING THE METAVERSE

According to The Metaverse Insider and McKinsey, by 2030 the metaverse market is expected to grow to $5 trillion. And, so far in 2022, over $120 billion has already been raised by companies in the metaverse space, which is significantly up from 2021 when the amount was over $10 billion. It’s clear the amount of capital being deployed in this space is indicative of opportunities across a variety of sectors.

Many of the metaverse-focused investments are in companies that are creating and maintaining virtual reality worlds, establishing more robust edge computing and blockchain infrastructures, building upgraded hardware and software, and reviewing data security and readiness. Others are establishing new applications, creating stories, designing experiences, and reviewing products and services to determine a starting point for experimentation.

BUSINESS-TO-CONSUMER ENGAGEMENT

The potential for businesses to engage with customers within the metaverse seems limitless through product branding, gaming, entertainment, hospitality, and retail transactions. For

DIRECTOR’S CUT STRATEGIES FOR TODAY’S CORPORATE FINANCE

LEADERS

More businesses are interacting with the metaverse to enhance their business strategies and create new revenue sources. But before taking off in this virtual space, business leaders and boards should consider some key questions.

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example, if you’ve ever played or seen Second Life or Fortnite, you’re likely aware of some basic metaverse platforms. Other examples include:

• Decentraland: This decentralized platform enables users to create their own avatars to explore different application landscapes. Users can also purchase real estate to create events and marketplaces. In 2021, Decentraland hosted a metaverse festival where American media personality Paris Hilton performed.

• Nvidia: Well known within the gaming industry, Nvidia created a collaboration tool for developers to create metaverse applications more easily. Companies like Kroger, Amazon, and PepsiCo have partnered with the tool to create immersive user shopping experiences.

• Roblox: Also well known in the gaming industry, Roblox has worked with companies like Nike to create Nikeland, allowing users to play sports games, shop for NFTs, and purchase consumer goods. The gaming platform also worked with Gucci to establish Gucci Town, creating a similar interactive site experience.

BUSINESS-TO-BUSINESS OPPORTUNITIES

Business interactions through the metaverse are also on the horizon with the goal of creating operational efficiencies, enhancing training, and strengthening client interactions. Microsoft has an augmented reality application called HoloLens that motorcycle manufacturer Kawasaki is using in their factories to facilitate supply chain management and the construction of robots. HoloLens allows workers to interact through visual cues when performing various tasks.

Several law firms have purchased locations in Decentraland as they prepare to utilize smart contracts for clients. Other examples where businesses are beginning to interact with the metaverse include:

• Facility management companies: These companies can utilize the metaverse platform for data gathering as well as training and repairs. Being able to train someone for maintenance of a building located miles away through the metaverse can save both time and money.

• Architecture, design, and construction firms: These firms can utilize the metaverse to create digital twins, an environment mirroring physical reality (i.e., a real-time Google Maps). These digital twins allow clients to see and feel space, furniture, light, and views.

• Farmers: According to Global Ag Tech Initiative, digital twinning of farmland or grain facilities will allow farmers to learn to plant more efficiently and anticipate more accurate yields. Also, new farming equipment can be seen in 3D to experience utilization prior to purchase.

• Financial services: Finance Monthly reported the establishment of J.P. Morgan’s Onyx Lounge in Decentraland was based on the view that a “robust and flexible financial structure is critical” for the digital world to succeed, and J.P. Morgan wants to be at the forefront of creating interoperability between multiple payment and financial structures.

ARE YOU READY?

With its ability to streamline processes, save time and money, and allow further engagement with customers, it’s clear that organizations will be swayed to interact with the metaverse at some point. However, there are many areas to consider as you evaluate your company’s metaverse engagement. Before taking off into the metaverse, consider these questions:

• How does the metaverse fit into your strategic plan? Will being in the metaverse enhance your current operations, client interactions, employee training, or brand positioning?

• Will the metaverse present new efficiencies, speed to market, or cost reductions? If so, over what timeframe will these changes occur and who will benefit?

• Do you have a change management plan for large initiatives?

• How far is your organization with its digital transformation projects?

• Is your data organized and 3D ready? Are you comfortable with your cyber and data security plans for the metaverse?

• Does your team have the skills to manage a metaverse strategy?

• Do you have a trusted partner that can guide you through any financial ramifications of being in the metaverse?

• Are you prepared to accept or pay cryptocurrency for any transactions in the metaverse?

• How much are you prepared to spend each year on your metaverse initiatives, and are you budgeting for it in your threeto-five-year plan?

• What are your competitors doing in the metaverse?

• How are your customers or clients entering the metaverse, and what are their expectations for your involvement?

There’s tremendous curiosity about the opportunities the metaverse affords—as well as trepidation. Consideration of these questions and a discussion with customers, clients, employees, board directors, and industry experts will help clarify the right steps to take in preparation for capitalizing on the opportunities the metaverse presents.

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

Bonds vs. Bond Funds: Which Reigns Supreme?

Bonds play an important role in any well-diversified investment portfolio. But when it comes to buying individual bonds or bond funds, is one stronger than the other?

Financial planners, money managers, and do-it-yourself investors all face the question of whether to employ funds or individual securities in the investment portfolios they manage or oversee. Generally, I believe funds—whether open-ended mutual funds or exchangetraded funds (ETFs)—do a pretty good job of replicating individual securities. For example, the performance and risk characteristics of low-cost stock mutual funds reasonably mimic portfolios of individually managed stocks with the same characteristics.

However, there’s one area in the investment landscape where I believe this observation falls flat: bonds. Because of the nature of a bond, bond funds fail to replicate important characteristics of a portfolio of individually managed bonds. This is why I believe a portfolio of individual bonds is superior to bond funds. Why? Let’s consider a bond’s purpose in a well-diversified investment portfolio.

A bond is essentially an IOU issued by a corporation, government, or other entity. In exchange for the investor’s or lender’s money, the issuer of the bond generally makes two promises: 1) to repay the funds at some date in the future, and 2) to pay interest periodically over the period leading up to the principal repayment date. For example, interest might be paid on April 1 and Oct. 1 for 10 years on a bond that was issued on April 1, 2023, with a maturity date of April 1, 2033.

From an investor’s point of view, a bond is inherently less risky than a stock because bondholders will be repaid their invested capital at the maturity date. Similarly, the bond issuer promises to pay interest income per the terms of the bond indenture, providing the bondholder guaranteed income for the duration of their holding period. When investing in a share of stock, however, there’s no promise of repayment. Income from stock—or dividends—is expected to be paid but isn’t generally guaranteed (except in the case of preferred stock) and can also fluctuate based on the company’s earnings or other factors. Therefore, the benefits of holding bonds are that these promised features reduce the inherent price volatility in these investments and offset, to some degree, the greater volatility of stocks and ultimately help smooth out valuations in a well-diversified investment portfolio.

Of course, as we all know, there’s no free lunch in investing. The cost of the guarantees bonds provide is, generally, a lower overall expected return than that of stocks. Further, not all the guarantees bonds promise are rock solid. There’s always the risk that bond issuers may default on interest and/or principal repayments or declare bankruptcy. In those cases, bondholders may receive less than 100 cents on each dollar invested. Though, they still

might make out better than stockholders who often see far less for their investment if the stock issuer becomes insolvent.

Limiting these risks are the primary benefit of investing in a bond fund. Unfortunately, little can be done about increasing expected returns except by investing in either longer-maturity bonds or higher-risk issue bonds that typically yield higher interest rates. However, individual issuer default risk can be reduced through holding a bond fund since the fund likely holds hundreds of bonds. As such, the impact of any issuer going into default is almost certainly lower in the bond fund than in a portfolio holding fewer individual bonds.

The risk of default is certainly a powerful motivator for financial advisors and portfolio managers to consider when implementing fixed income exposure through bond funds rather than individual bonds. But default risk is a risk that can be managed (although not eliminated). For example, municipal bonds often carry insurance provided by third parties who stand ready to pay bondholders if issuers can’t or won’t do so. Non-insured bonds—primarily corporate bonds—are regularly reviewed by third parties who issue credit quality ratings for bondholders and advisers alike to determine if action should be taken. Admittedly, many, but not all, bond defaults take place after warning signals appear.

Still, I believe the construction of a typical open-end bond mutual fund or ETF simply can’t compete with two key features of a portfolio of individual bonds. Those key feature include:

1. A higher predictability of return: Because the holdings in a bond fund change regularly as issues mature or are called in early by the issuer, and proceeds from these activities are used to purchase new bonds, the investment return also varies. A portfolio of individual bonds, however, has fewer turnover events. For individual bonds, the return is much more predictable because the bonds pay the stated coupon rate generally for the life of the bond. This certainty of returns can be especially useful when investing to a target income level, such as with the case of retirees.

2. Less risk as the bond matures: Most bond funds maintain a relatively consistent average maturity over time, which can be helpful for understanding how to compare funds as average maturity directly impacts pricing. However, this ignores the benefits that come each day from approaching an individual bond’s maturity date. After all, the closer to maturity date, the less risky the bond is and the more likely the bondholder will be repaid their principal. And of course, the individual bond investor enjoys knowing that their bond portfolio risk is lessened as time goes on because the maturity date of each bond draws closer.

Case in point, individual bonds are generally superior to bond funds because they take advantage of the inherently lower volatility features of bonds over stocks and provide more predictable income. Though, admittedly, buying individual bonds is more problematic than buying bond funds. Why? Because the cost of purchasing a bond is built into the spread between bid and ask prices. That spread is higher and more costly when buying bonds of smaller amounts (e.g., $1,000 or $5,000) than greater amounts. And once you diversify a portfolio (e.g., investment company Charles Schwab recommends holding bonds from no less than 10 different issuers), one can see that purchasing individual bonds make sense only in larger investment portfolios.

A solution to this challenge is to invest in so-called defined maturity date funds. These ETFs invest in bond issues with a single maturity date. The funds provide diversification among issuers, as

well as the benefits that come from shortening maturities. At the end of the maturity date year, the fund dissolves and all cash is returned to shareholders. For reference, investment management company Invesco Ltd. markets a number of these funds under its BulletShares brand.

Overall, bonds will always hold a place of importance in most investment portfolios because of their lower volatility and higher predictability of total return compared to stock investments. Though, how an investor chooses to implement the addition of bonds to a portfolio—whether it be from individual securities or bond funds—needs to be driven by that investor’s goals and financial position. Ultimately, for investors small and large, I still believe individual bonds or defined maturity date bond funds are far superior options over generic open-ended bond mutual funds and ETFs.

EVOLVING ACCOUNTANT TRENDS IN ACCOUNTING, AUDITING, AND CONSULTING

How to Restore Passion, Engagement in Your ‘Quiet Quitters’

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

Made popular by Gen Z via TikTok and other social media platforms, “quiet quitting” is on top of employees’ and managers’ minds. It’s the idea of doing the bare minimum at your job—no additional efforts, no additional hours. While there have always been employees who bring this philosophy to work, it’s never been the phenomenon it is now. Why? Likely in part because Gen Z, the eldest of which are starting off their full-time careers, have a different philosophy on work and life. While workers from previous generations largely think of themselves in part as what they do professionally (e.g., “I’m an accountant”), Gen Z doesn’t generally think of themselves that way (e.g., “I’m an outdoor enthusiast who loves to travel”). Gen Zers work to live; they don’t live to work.

Another likely contribution to the uptick in quiet quitting culture is the collective exhaustion we’ve all experienced over the past few years—a global pandemic, political unrest and extreme polarization, and economic woes.

Whatever’s behind it, any reasonable person can understand why some people—both young and old—are simply burnt out. Even if you’re someone who has a deep passion for your professional work, you’ve likely quiet quit something in your life. (I’ve quietly quit making dinner for longer than I care to admit—I make something, but it’s not inspired and it’s not something I’ve poured my passion into.)

For business leaders and managers, however, it’s harder to stomach quiet quitting—I understand and share that feeling. But I believe we can help our quiet quitters find their love for work again (or maybe even for the first time). To do so, let’s first unpack some of the reasons why an employee might quiet quit:

• Stress and personal life changes: Maybe your quiet quitter is going through a divorce, lost a loved one, or is welcoming a new child into their family. Consider what you can do to support them. Does your organization have any mental wellness benefits you could direct them to? Have they used their paid time off (PTO) in a meaningful way (i.e., taking at least a few days in a row off)? If they need more time off, does your organization allow PTO to be used in advance in good faith or even donated by other employees wishing to help a colleague?

• Work situation changes: Maybe your quiet quitter is adjusting to new processes and systems, received a new manager, is fighting with a coworker, or was passed on a promotion. In these cases, an open dialogue about the challenges and opportunities of those changes is an important step. They might need additional training and tools, or an explanation of why they didn’t get a promotion. If there are conflicts between coworkers, can you help facilitate a conversation between them? If they aren’t engaged, maybe it’s because they aren’t appropriately challenged by their work. Can you help them get more of the work they enjoy and develop a plan to offload some of the work that isn’t mentally stimulating?

Whether quiet quitting is just another fleeting trend or here to stay, ignoring it won’t help. Caring about your employees, their careers, and their experience will.

• They’ve always been the quiet quitter type: Truthfully, not everyone is a “go-getter.” Consider finding these types of employees mentors in your organization. Some other questions to ask yourself: Have they been given frequent feedback that’s balanced and fair? Have you or someone in your organization talked to them about a possible career path? Someone believed they were a good candidate at some point, so remind yourself what strengths or experience this person had and evaluate whether the job they’re in is congruent with their background and expertise. If not, do you have another position in your organization that they’re better suited for? Or do you need to have an honest conversation with them about their fit for the role and offer them an off-ramp from your organization?

Understanding the “why” of quiet quitting is just the first step. Stopping or preventing it is another. Truth be told, I don’t believe you can or should eliminate quiet quitting. As much as we’d love every single employee to have the passion for their work that we do, we also need to accept that some employees will just do the job we hired them to do, nothing more and nothing less. However, it’s still good practice to try to see how you can help them engage more deeply in their work. It’s also equally important to not lose focus of your non-quiet quitters and foster an environment that continues to engage those who are going the extra mile. Here’s how I think we can support both types of employees:

• Be a workplace of constant learning and growth: We all know that organizations that don’t evolve don’t thrive, and in order for your organization to evolve, that means the talent has to evolve. This can be achieved by teaching one another (e.g., having your passionate employees teach sessions on topics they love) and creating times and spaces to share challenges and successes with the whole team.

• Prioritize open and frequent communication: Tell your employees how the organization is doing. Celebrate successes together and crowdsource solutions for challenges with as many people as feasible and appropriate. Transparency builds trust in all directions.

• Make ongoing, candid, and balanced feedback the norm: If you can build a culture where it’s common, encouraged, and even expected that everyone is clearly and compassionately sharing observations and guidance with one another, you invite all employees to grow in their roles and careers. You can’t guarantee everyone will make the most of that opportunity, but the more you demonstrate the value of that type of feedback, openness, and genuine investment in wanting to help everyone improve, the more likely people will buy into that. You must also have this work amongst your leadership team for true organizational culture to embrace and embody it.

• Pay attention and watch for signs of burnout: Your strongest performers are often at the highest risk for burnout because they work so hard for so long, and that’s not typically sustainable forever. When you see atypical behavior, check in with them before jumping to criticism. If you don’t have capacity to do this for everyone on your team, consider assigning mentors or even “buddy” pairs so everyone has someone looking out for them.

The newest generation in the workforce may not get their greatest sense of joy from work, and all generations may simply be burnt out. We can’t fight all of it. But by rethinking how we treat the employee experience and being intentional about supporting every employee, we can avoid the complacency that could lead to a whole workforce of quiet quitters.

This column was co-authored with Courtney Kiss, chief growth and development officer at Johnson Lambert LLP.

Art Kuesel President, Kuesel Consulting art@kueselconsulting.com

The CPA’s Guide to Networking: 6 Steps to Meet Amazing People

With networking, there’s no magic bullet. But rather, it’s a business development process that takes practice and repetition with the help of a few key steps.

I’ve been fortunate throughout both my personal and professional life to have met so many amazing people. Admittedly, this list of people is quite long, so for the sake of this column, I’ll be mentioning only a handful of very influential individuals who’ve made a huge difference in my life. This handful includes Bob, Sue, Bill, Donna, Zach, Lynn, Marc, Allan, and Colleen.

Here's a quick rundown on how I met them all: Bob and Bill have been fantastic professional mentors of mine and I’ve gained an immeasurable amount of business wisdom from each of them. Sue and Zach have been my “A” clients who’ve introduced me to other “A” clients. Further, they’ve served as references and helped me build my business when I was still starting out. Donna, who I met at Allan’s conference, introduced me to her partners and it turned into a breakthrough role for me in public accounting. Marc and I have become business partners, and thanks to him, I built upon his idea to expand and grow my business. And Lynn? Well, she introduced me to Colleen, my wife of more than 19 years.

So, you might be wondering how I met all these amazing people. Simple, it was networking. Don’t get it wrong—I’m not one of those people who walk into a room and spins around like a ballerina chatting up the high rollers. (You know exactly who I’m talking about. We all know someone like this!) For me, it’s quite the opposite as I’m not a natural extrovert. A better description of my approach to networking would be: I tolerate it, I’m decent at it, and I do it because I know it works.

If you’re looking for a magic bullet to networking success, I don’t have one—it’s a process. But I believe with practice and repetition, you can become better at it. Here are six steps I recommend for improving your networking skills.

1. PLAN AND PREPARE

First, you need to make sure that you’re networking in the right places. Take time to review the audience that’ll be in attendance. Does the audience consist of ideal clients, referral sources, and contacts? When the answer is “yes,” your networking efforts will be more fruitful. But if you’re in the wrong place, your networking efforts will be less successful. Also, make sure that you have your elevator speech ready (you know, the brief, 30-second introduction of who you are, what you do, and some questions). Having this prepared will improve your confidence level when approaching new people. Most importantly, don’t forget to bring a few business cards along with you.

2. APPROACH STRANGERS

It’s much easier to network if you have a buddy with you. Notably, it can be easier to break into a small group of people already networking when you have someone already by your side. Regardless of whether you’re solo or not, it may be helpful to know that most of the people you’ll encounter while networking don’t enjoy it. From my own personal research,

I’ve found only about 10% of professionals actually do. This means that most of the people you’ll encounter either tolerate networking (like me) or dislike it altogether. Bottom line, you’re in good company when it comes to your apprehensions about walking up and introducing yourself to someone you don’t know.

3. KNOW YOUR WHO, WHERE, AND HOW

As previously mentioned in step 1, preparing a game plan is critical. Quickly survey the room and see where you may have an easy opportunity to meet someone new. Is it at the bar or the food lines? In my opinion, these often slow-moving lines are great places to strike up a conversation because you already have something in common with them—you’re both thirsty or hungry. And don’t discount the power of other unique places in the room: rescuing someone standing alone, joining a semi-circle of people already talking, chatting up an exhibitor, or finding the host to get you talking.

Once you find your “in,” how do you start that conversation? I find that an appropriate compliment is often warmly welcomed. Maybe you like someone’s watch, briefcase, or notebook. Whatever it may be, just make sure you have a genuine interest in the item you’re complimenting. Also, you should take some caution in who you compliment and how. Other ways to start up the conversation include small talk, comments about the event or venue, and of course—your elevator speech!

4. FIND COMMONALITIES, MAINTAIN CONVERSATION

Some may prefer to lead the conversation toward personal topics, such as weekend plans, upcoming vacations, or personal interests such as pets, food, wine, or travel. Others may lead with professional topics, such as where you work, the kinds of clients you serve, and the kind of work that you do. Both are viable options. Just remember that the more you can find in common with the person, the better this conversation will feel. In addition, be sure to ask great questions and, more importantly, get someone talking about themselves. The key here: be interested, don’t try to be interesting.

5. EXIT THE CONVERSATION

At some point in the conversation, you may decide that this person could be a good contact, referral source, or client. When the conversation has a natural break and you’ve generated some rapport, thank the person, ask for their card, and suggest that you would like to stay in touch. Then, go back into the crowd and repeat the process. Meeting one person during the event is usually not enough. You may also determine the opposite is true of this contact (i.e., they’re not likely valuable to you in the future). In these cases, thank the person and say it was great getting to know them but omit the part about exchanging cards and staying in touch.

6. FOLLOW UP

This final step is possibly the least often executed, which is unfortunate given the effort you put forth in the process up to this point. Plus, you should know that it’s highly unlikely the people you meet will follow up with you. Speaking from personal experience, most of the success I’ve shared in this column wasn’t the result of someone following up with me (that’s right, this includes my wife Colleen). Instead, it was the result of my follow-up. It was as easy as saying, “It was great meeting you last week at ‘XYZ.’ I’d welcome the opportunity to learn more about your business and how we could help each other in the future.”

As you can see, I owe a lot of my life success to networking. It’s made a remarkable difference in my personal, professional, and financial life. Though admittedly, it takes a lot of practice to become proficient at this skill. But once you realize there’s a process and it works, I promise you’ll become hooked on networking.

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

Is a Talent Pool the Answer for Your Finance Staffing Needs?

Interesting times call for creativity, and today’s postpandemic workforce is calling for finance leaders to think more creatively about attracting, retaining, and developing their talent.

There’s no doubt about it, these are interesting times for companies—and interesting times require renewed attention, effort, and hard work to address the challenges that have made our business environment anything but peaceful. In prior times, something like low unemployment would be a welcomed economic indicator, and while it still is to a certain degree, our interesting times of today necessitate managing a post-pandemic workforce that has seen how low unemployment combined with a high demand for finance talent has shifted more bargaining power from employers to current and prospective employees. As such, finance leaders need to think more creatively about the ways in which they attract, retain, and develop their finance professionals and work toward building future-ready teams that not only perform core finance functions, but also support their businesses as valued strategic partners.

One of the ways that leaders can be creative with talent development is by finding new ways to apply methods that are tried and true. My colleague Tim Schmidt recently did just that by applying the concept of a talent pool model across his department. As Discover’s treasurer, Schmidt saw three staffing issues emerge—primarily among early career level team members—that led him to this model as a way to better structure their roles and meet his department’s staffing needs: attrition, workload management, and talent development.

“With the way the team was structured, we had siloed groups with specialized skills. Whenever someone left the company, it became harder for our teams to support each other while positions were open,” Schmidt notes. “On top of all that, while some of the least experienced folks on the team embraced working from home during the pandemic, we needed to still make sure they weren’t missing anything in terms of development opportunities.”

Schmidt had seen the talent pool model in action through his experience serving as an economist for the Federal Reserve Bank of Kansas City. This model, used similarly by Wall Street firms and public accounting firms, places entry-level employees in a big talent pool, serving a broad range of managers and needs, who get assigned to different projects depending on availability. Because the model provides great experience for folks new to the workforce, Schmidt thought it could also serve his team well by mitigating the workload challenges caused by attrition and by providing more robust training and development opportunities for staff still early in their careers.

Admittedly, the talent pool model is a culture change for most corporate finance teams since it’s far more common for these teams to have specific roles that focus on specific types of transactions or business support, along with a clear reporting hierarchy and a specific set of job expectations and requirements at each level of that hierarchy. Needless to say, shifting to a talent pool model could create transitional challenges since it requires corporate finance teams to address training needs, manager expectations, and deployment of resources, among other things, in new ways.

For the talent pool model to work effectively, Schmidt says there are a few steps to consider:

• Prepare your entry-level employees with proper training. These employees need to be ready to work with any of the teams across the finance function, or perhaps even the organization. In Discover’s case, Schmidt put his analysts through a series of classes that included all the fundamentals of the treasury function, allowing every analyst to get the basic training to be fluent in the skills they needed to communicate when serving various teams.

• Help your managers see the benefits. Because managers are used to having direct reporting lines with their staff, there may be some uncertainty about how to manage in the pool model. One key to getting buy-in is to help the managers understand that they, too, can benefit, as they’ll learn to become more agile. With more exposure to a wider group of staff with different motivations and interests, managers can learn to be more effective at leading different personalities and styles, thereby growing their managerial capabilities.

• Determine an effective method for assigning work and managing the schedules of staff within the pool. Schmidt suggests assigning one leader to be responsible for the pool, and for that leader to coordinate with other leaders across the department or company to understand and manage the demand for resources. This way, the talent pool leader can work closely with the rest of the leadership team and hold monthly meetings to discuss projects, priorities, and time requirements. These meetings provide a framework for deployment of the talent pool resources. The talent pool leader can assign staff to various teams based on workload prioritization, as well as by skill requirement and learning opportunity. Using shared visual tools can also help the full leadership team see and understand where, how, and why resources are deployed in a certain way.

Ultimately, the talent pool model benefits both entry-level employees and the company as a whole. For entry-level staff, the talent pool model provides broader exposure to different areas within the company’s corporate finance function and beyond. For example, even though they’re recruited into the company at an entry-level position, they’re still able to progress through multiple levels of training, development, and promotion within the talent pool. They’re also encouraged to train each other to master new skills and technology, and they gain exposure to more managers, which further provides more opportunities for coaching, development, and relationship building. More importantly, when they’re ready for the management ranks, they’ll have a broader array of opportunities and more support for their promotion, along with inside knowledge of how the talent pool model performs best.

The benefit to the company is that talent is managed more holistically. For example, Schmidt says when they used their old

model where specific roles were assigned to specific analysts, it didn’t allow room for flexibility. He notes that if one staff member was to leave, there would be a void left in a particular niche. With an effective talent pool, however, a leader can reassign a different resource where needed without missing a beat and recruit based on the broader talent pool’s needs.

While Schmidt’s team is still in the early days of using this new model, they’re already starting to see some of its benefits: Measures of success are being realized as they break down the old, siloed lines of reporting, expand the learning opportunities for the people in the talent pool, start filling mid-level positions from talent within the team, and can focus on hiring primarily at the entrylevel roles in a tough labor market.

As the talent pool model shows us, navigating through today’s interesting times doesn’t necessarily mean we have to be more aggressive with our current staffing or recruiting models that aren’t working. Instead, maybe we can take a page from Schmidt’s book and think more creatively to implement a new model, or even borrow an old one. As Bobby Kennedy said in his Day of Affirmation address at the University of Cape Town on June 6, 1966: “Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind.”

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

‘Uncapping’ Illinois’ Property Tax Extension Limitation Law

A simple property tax cap? It’s more complex than that.

As high inflation rates persist after hitting levels not seen since the early 1980s, the impact is hurting both individual households and local governments. When costs rise, government officials naturally look for ways to increase their revenues to offset those costs. The typical solution? Higher property taxes—the primary way in which units of local government finance their operations.

However, Illinois’ Property Tax Extension Limitation Law (PTELL) places limits on year-toyear property tax increases for certain taxing districts within the state. Notably, though, PTELL doesn’t apply everywhere.

When first enacted into law in 1991, PTELL was limited to the “collar counties” surrounding Cook County—DuPage, Kane, Lake, McHenry, and Will. These counties, with the exception of Cook, became subject to PTELL for taxes paid in 1992 (Cook County was added for taxes paid in 1995). Counties outside these districts can opt to be subject to PTELL by referendum, and voters in these counties can also opt out. As of 2020, 33 additional counties have opted in, and 10 counties rejected attempts to become subject to PTELL by referendum.

Muddying the waters further, PTELL doesn’t apply to all taxing districts within the counties subject to PTELL. Only non-home rule taxing districts are subject to it. Article VII, Section 6 of the Illinois Constitution defines a home rule unit of local government as “a county which has a chief executive officer elected by the electors of the county and any municipality which has a population of more than 25,000.” Other municipalities can opt for home rule status by referendum. To date, the only home rule county is Cook.

HOW DOES PTELL WORK?

PTELL limits the year-to-year increase in the “extension” (i.e., the total taxes billed to a property owner) for non-home rule taxing districts subject to PTELL. The law allows a taxing district to receive a limited inflation-related annual increase on existing properties, but it caps the impact in high inflation years to 5%. Increases in property tax extensions are limited to the lesser of 5%, or the increase in the Consumer Price Index (CPI). This year, because the CPI increase was greater than 5%—the first time since PTELL’s enactment—the 5% cap is in effect.

Though PTELL is commonly called a “tax cap,” the designation is misleading. PTELL isn’t a true tax cap, as it doesn’t guarantee that individual tax bills won’t increase more than the law’s limitation. For example, property taxes could increase if:

• The property was in a location where some taxing districts are subject to PTELL and others aren’t.

• The voters of a taxing district subject to PTELL can approve an increase over and above the limitation by referendum.

• A particular property was under-assessed compared to other properties and then was reassessed to the correct value.

• Other properties declined in assessed value (e.g., a large industrial facility that paid a large amount of property taxes in prior years closes). In this case, the value of that property will be reduced, the overall tax base will be reduced, and as a result, the amount of property tax billed to the remaining property owners in the taxing district will increase in relation to the value of the properties.

Taxing districts subject to PTELL can also receive an increase greater than 5% or the CPI increase limitation. Situations where a greater increase can happen include areas in new construction and annexations. Of course, voters can also approve greater increases by referendum. Additionally, if a tax increment finance (TIF) district expires, and the TIF increment is received by the taxing district, that’ll increase the amounts to the taxing districts. (Admittedly, the subject of TIFs is another very arcane element of property taxation that I’ll be attempting to decode in a future column.)

NAVIGATING AGGREGATE EXTENSIONS

Another piece of the PTELL puzzle is aggregate extensions— the portion of a taxing district’s total extension subject to the limitation. Funds include the corporate extension for the taxing district and special purpose extensions, both made annually.

Some examples include self-insurance, pensions, unemployment, workers’ compensation, and road district permanent road funds.

However, some “fund extensions” for taxing districts subject to PTELL aren’t included in the PTELL limitations. Such examples include taxes for payment of general obligation bonds issued prior to the district becoming subject to PTELL and general obligation bonds issued after they were subject to PTELL if approved by voters.

The aggregate extension base is used to calculate the allowable increase and, generally, it’s the previous year’s aggregate extension that serves as the starting point on which the PTELL tax rate will be calculated. However, be aware that there are some exceptions, which, in the interest of brevity, I’ll spare you from in this column.

The limiting rate under PTELL is a district’s maximum aggregate tax rate for funds subject to PTELL. It’s calculated for each taxing district. Notably, the sum of all the tax rates for funds from taxing districts subject to PTELL can’t exceed the limiting rate. To determine this, the county’s clerk compares the sum of individual district rates to the limiting rate. If the sum is greater than the limiting rate, the clerk will reduce each rate proportionally to ensure the total doesn’t exceed the limiting rate.

As you can see, PTELL isn’t a simple property tax cap. Despite the law’s intention to moderate the amount of property tax increases, the true outcome is still dictated by a complex computation.

Elizabeth Pittelkow Kittner

CPA, CGMA, CITP, DTM Vice President of Finance, GigaOm ethicscpa@gmail.com

The Quagmire of Quiet Quitting

Quiet quitting may be a consideration for some employees to mentally cope and deal with burnout. However, with so many complexities to think about, the trending practice may do more harm than good for individual, organizational, and global well-being.

Instead of outright quitting, some workers are quitting their attitudes and work effort. Whether it be from disengagement, burnout, or both, workers are gravitating toward doing the minimum work required for their roles through the trending practice known as “quiet quitting.” While some find the practice harmless (people are still doing their jobs), others find it problematic and unethical. With so many layers to contemplate, it begs the question— is quiet quitting good or bad?

Given the media coverage on this movement so far, most organizations view it as bad, as employees who are quiet quitting are disengaged and not putting in extra effort when extra effort may be needed. For instance, most people can think about a time in their professional life when extra effort was needed in the short term. For example, a client provided documents late before a deadline, or a project had errors and needed to be revised before a leadership meeting. Quiet quitters, however, may not be willing to put in that extra effort for any amount of time, even if it is short term.

EXAMINING OUR INDIVIDUAL VALUES AND ETHICS

Let’s say that employees are still able to get their jobs done with minimum effort, is quiet quitting really that bad? To consider this question, let’s look at individual values. One of my favorite values self-assessments can be found through the VIA Institute on Character. The online assessment can help you determine your value strengths and how they fit into six overall virtues described in the chart below. The idea of knowing and applying your value strengths is that it gives you the best opportunity for personal flourishing.

Courage

Humanity

Bravery, honesty, perseverance, and zest. These values appear when we experience challenges and help us approach them.

Kindness, love, and social intelligence. These values help us with positive interpersonal interactions with family, friends, colleagues, etc.

Justice Teamwork, leadership, and fairness. These values help us in team and group settings.

Temperance

Transcendence

Wisdom

Forgiveness, humility, prudence, and self-regulation. These values help us to improve our positive traits and reduce our negative ones.

Appreciation of excellence and beauty, gratitude, hope, humor, and spirituality. As a virtue, transcendence helps us connect with the world and appreciate what positivity it has to offer.

Creativity, curiosity, judgment, love of learning, and perspective. These values help us with information gathering and decision-making.

Quiet quitting seems to oppose several of these values, including perseverance, zest, kindness, teamwork, leadership, prudence, appreciation of excellence and beauty, curiosity, and love of learning in a work setting. However, one may argue that some values are supported by quiet quitting, including self-regulation and fairness.

Most people spend a good amount of time at work, so having a job that does not align with personal values and an ability to thrive can be a tough existence. As such, quiet quitting for a long period of time may lead to personal reputational deterioration.

If you are considering quiet quitting, analyze why you feel that way. Determine if you are able to communicate with your supervisor or others on what you need to succeed or if you can communicate ideas on how the organization can improve. If you encounter resistance to change or experience changes that do not improve your work, then think about looking for another job with an organization that aligns with your values. In most jobs, even the ones that have negative aspects, like repetitive work or tough work personalities, you can find ways to grow and develop yourself and others around you, even if it is for a short time while you are looking for other opportunities.

While the concept of quiet quitting invites us to examine our individual values, it also leads us to examine our ethical obligations. As accounting professionals, we look to the AICPA Code of Conduct to guide our practice. The AICPA Code of Conduct describes several Principles of Professional Conduct in section 0.300:

• The Public Interest: “Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate a commitment to professionalism.”

• Integrity: “To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.”

• Due Care: “A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.”

The due care principle also states: “Competence is derived from a synthesis of education and experience. It begins with a mastery of the common body of knowledge required for designation as a certified public accountant. The maintenance of competence requires a commitment to learning and professional improvement that must continue throughout a member’s professional life. It is a member’s individual responsibility. In all engagements and in all responsibilities, each member should undertake to achieve a level of competence that will assure that the quality of the member’s services meets the high level of professionalism required by these Principles.”

Based on the review of these principles, doing the minimum may lead to a violation of the AICPA Code of Conduct.

QUIET QUITTING’S IMPACT ON ORGANIZATIONAL, GLOBAL WELL-BEING

In addition to quiet quitting’s impact on individual values and ethics, it also impacts the well-being of the organization and global community. When people care less about their jobs and their organizations, fraud is more likely to occur undetected. According to the ACFE’s Occupational Fraud 2022: A Report to the Nations, 42% of frauds studied were detected by tips, and more than half of the tips came from employees. Reporting fraud requires people

paying attention to what is happening within an organization and caring enough to report it. Organizations should be concerned when they sense their employees do not care about the work they are doing and/or do not care about the overall organization.

Quiet quitting also lends itself to more mistakes being made by employees and the development of lower quality products since performance and quality are associated with engagement. In fact, according to the Quarterly Census of Employment and Wages administered by the U.S. Bureau of Labor Statistics, the United States has seen the lowest worker productivity levels since 1948. Since there is a correlation between worker productivity and economic growth, there is a negative impact on the global economy, including a negative effect on wages.

What may seem like a harmless way for individuals to control their work environments, quiet quitting may be leading to more severe negative impacts for the future of the economy, organizations, and available jobs and pay for individuals.

To reduce these negative impacts, individuals and organizations must do the work to uncover what is behind this growing practice. As an individual, consider how you can make a positive impact on your own work and for others who work with you. As a leader of an organization, ask employees how you can support them and make some decisions that may prevent further burnout and disengagement, like allowing people to be off video during some meetings, reducing or eliminating noncritical communication during nonbusiness hours, and increasing praise and celebration for work achieved. Improve engagement by involving people in decisions that affect them and ask employees to contribute more to culture and strategy initiatives.

Hungry for More? How to Blend Your Profession and Passion

BY ANDRÉS CLAVERO

I spent my lifetime chasing food. Whether it was at family dinner parties feasting over Palestinian, Cuban, and Spanish foods or eating at as many restaurants as I could around town, I knew my career in public accounting wouldn’t be my last stop. Which is how I went from being a tax consultant at a Big 4 firm to now being the co-owner and operator of the Michelin-starred restaurant, Galit, in Chicago. Getting here was anything but easy. But with perseverance, humility, appreciation, and a hunger for more, I ventured down a path to blend both my profession with my passion. Here are some steps I’ve learned throughout my journey that may help guide you in yours.

1. Reach out to people you respect in the industry that’s calling you. There’s no shame in cold calling those you want to learn from. Most small, independent companies have no overhead, meaning an email with your résumé may go straight to the owners or decision makers.

2. Don’t second-guess yourself. It may seem daunting to transition into a new industry, and you may think your inexperience is a setback, but you should know that most people enjoy sharing what they know. Also, being green is a positive, as it means you likely don’t have any bad habits to break.

3. Be persistent and patient; it doesn’t happen overnight. My first restaurant opportunity didn’t come until after a year of reaching out to many different places.

4. Swallow your pride—don’t look down at the dirty work. The dirty work is what builds a strong foundation for your next steps. You may need to take a step back to take a giant leap forward in another direction. I didn’t walk into a restaurant and immediately start running the place. I started as a part-time host working nights. Through that experience, I was able to be a sponge and take in everything I wanted to know and learn about the industry. Ask questions, fail, learn, and try again.

5. Don’t assume your audience is the same as you. Learn how to best communicate with everyone. Your experience outside of your new role or the one you’re pursuing can be valuable, but be willing to learn from the people who’ve been doing it for longer than you.

6. Appreciate every opportunity, especially the challenging ones. I’ll never forget being complimented for my jacket one

night and then immediately after being told the bathroom needed attending. I just had to remind myself that it’s better to roll up my sleeves than not having the opportunity to.

7. Network! You may be a rock star but creating something on your own normally requires the help of others. Introducing yourself and keeping in touch with those who don’t come from your same circle is imperative.

8. Don’t ask what people can do for you. Learn what others need and communicate how you can help them, not just how they can help you. Chefs and managers learned that I truly cared and wanted to apply my skills in the best ways I could. Trust is built when you have others’ interests in mind.

9. Volunteer your time. Not volunteering my free time to work special events or to say hello on someone’s behalf would’ve never allowed me to meet my future chef partner. Don’t be shy. Everyone wants to be acknowledged, so just say “hey,” “thank you,” and “hope to see you soon”—preferably in person.

10. Let go of the things you can’t control—plans change. Yes, accountants, things won’t go as planned. Yet, that breeds opportunities. My late father who was a CPA always said to me, “The main thing is to keep the main thing the main thing.” Simple, wise words. For me and my chef partner, our main thing is team Galit. We know that our personal and professional success will always be dictated by how strong our team is. For example, when COVID hit, we kept our team insured for over a year with most of them not working. When it was time to safely reopen and welcome our guests back, we had a healthy team ready to go because they felt cared for.

The last step is on you. What if you don’t bet on yourself? Chances are, we all have a passion that drives us—mine was food. Ultimately, if you can blend your profession with your passion, wouldn’t you like to try? What are you waiting for? What’s your passion?

Andrés Clavero is the general manager and co-owner of Galit, a Michelin star restaurant in the Lincoln Park neighborhood of Chicago. Prior to this, he was the senior accountant for acclaimed restaurant group One Off Hospitality and spent over five years working for Deloitte.

What does public accounting and operating a Michelinstarred restaurant have in common? More than you think.

Photo by Sandy Noto

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Nerissa C. Brown

INSIGHTS FROM THE PROFESSION’S INFLUENCERS

Nerissa C. Brown, Ph.D., CFE, has a lot of titles: associate dean of Graduate Programs, professor of Accountancy, Josef and Margot Lakonishok Faculty Fellow, and PwC Faculty Fellow. The University of Illinois (UI) educator recently added another—Illinois CPA Society (ICPAS) 2022 Lester H. McKeever Jr. Advancing Diversity Award winner. Oddly enough, Brown was convinced early on in childhood that her destiny lied in dentistry. A close family friend was a dentist and was someone Brown deeply admired. “She was a female dentist who owned her own practice, and I thought she was just so cool,” Brown laughs. However, while taking a career test in high school, Brown discovered a different path. “I could’ve sworn that one of the choices from the test would be a dentist, but it wasn’t.”

While Brown doesn’t remember the career choice the test had made for her, not seeing “dentist” on the recommended professions list gave her some pause, and she ultimately decided to take the advice of her wise mother. “When it was time for me to go to college, my mom, who’s an accountant, suggested I study management studies because you get to do a little bit of everything in business. And so, I took my first accounting class, and everything just clicked. I then decided to switch my major to accounting.”

Brown attributes a lot of her success—and her family’s success—to the accounting profession. As a native Jamaican, Brown’s family started from humble beginnings: Her grandfather trained as an apprentice to be a bookkeeper with the Jamaican Railway Corporation and would eventually rise to managing the bookkeeping for the railway’s entire payroll. Her grandmother was a dressmaker who used rudimentary bookkeeping skills to keep track of her stock of dresses and material. “I can still remember that little booklet she had with all of the different numbers,” Brown says.

And of course, Brown’s mother also embarked on a career in accounting. As a single mother, she entered college as a first-generation student and earned a bachelor’s degree in accounting while working. She then transitioned to governmental accounting and eventually retired as the principal finance officer of one of Jamaica’s largest government ministries. Personally experiencing how accounting can change the generational trajectory of a family has been the guiding light in Brown’s efforts to champion greater diversity in the profession. “Being an international student has really made me think about how accounting and business can help in the bigger roles for underserved populations, as well as for individuals who are immigrants to this country or come from immigrant families,” Brown says.

BY AMY SANCHEZ

Because she’s lived that life, Brown sees her success as a means to pay it forward— bolstering the pipeline of underrepresented minorities in the profession and increasing representation and inclusion in business education. Of her many efforts, Brown works closely on the UI Gies College of Business Accountancy Opportunities scholarship program, which provides tuition-free graduate accounting education to minority students who are passionate about the accounting profession and obtaining a CPA. Notably, the program partners and collaborates with ICPAS’ charitable partner, the CPA Endowment Fund of Illinois, on its Mary T. Washington Wylie Internship Preparation Program to support diverse recruitment. She’s also gone above and beyond in her involvement with The PhD Project, focused on increasing diversity in the workplace by diversifying who students see at the front of the classroom (i.e., the faculty).

Most importantly, Brown’s efforts have also redirected her back to the most influential piece of her life: her family. She created a scholarship fund in honor of her grandmother to provide financial assistance to underrepresented and first-generation undergraduate and graduate students or students that are committed to enhancing diversity, equity, and inclusion (DEI) within the Gies College of Business. “My grandmother really believed in education as a way of progressing through life. She didn’t go as far in education as she would’ve liked to, so I think in many ways, I’m living out her wildest dreams education-wise.”

Brown’s passion for championing diversity also stems from another important influence: her students. As a mentor to many students of color, she often hears a familiar phrase: “I don’t think the accounting profession is for me.” Knowing what the profession has given her and her family, Brown has dedicated her career to combating this myth and opening doors for those that think they don’t belong.

“It boils down to that single thing that keeps driving me—I don’t want to always be the only person of color in the room. How can I change that? If I get a new opportunity, how can I bring one or two more people along with me?”

Ph.D., CFE

Witnessing firsthand how accounting can change the trajectory of someone’s life for the better, the Illinois CPA Society 2022 Lester H. McKeever Jr. Advancing Diversity Award winner has built a career on bringing more people like her to the table.