Future-Proof

“We need the different thoughts, the different mindsets the different perspectives - we need you" - Jessica McClain, CPA/CITP, CISA, PMP, CGFM

"...Really came to know and understand and appreciate just how uniquely situated the Maryland Comptroller's office is to make a difference on economic matters, to build financially resilient communities, to make Maryland a great place to do business..." - Brooke Lierman, Comptroller of Maryland

Resources:

https://brookelierman.com/

In this episode we're talking about ethics in Artificial Intelligence (AI). Rumblings about the future of AI have been surfacing as well as questions about whether human biases are affecting the decisions AIs are making. Those questions are finding their way into our profession.

A recent Accounting Today article reports a growing number of accounting service solutions are using AI for a wide range of applications. The accounting profession has spent $1.5 billion on this type of software in 2021 and is projected to spend $53 billion by 2030, according to a report from Acumen Research & Consulting. The Accounting Today article notes that despite this rapid growth, "too little attention has been paid to the ethical considerations that come with it". Sage's CTO, Erin Harris says in a quote, "The current issues are less to do with the accidental creation of a robot overlord and more about the insertion of human biases into the code". The main issue is not the technology in it of itself, it is our human biases impacting the way the technology works.

Biometric Update, recently published an article listing the 6 key considerations for ethical AI in financial services:

1. Fairness & bias
2. Trust & transparency
3. Privacy
4. Accountability
5. Security
6. Social benefits

The author, Matt Peake, writes, "If just one of these fails, it can have series consequences for individuals and businesses".

However, the upside is that there are groups developing AI committed to the betterment of our world.

I speak with today's guest, Enrico Palmerino, Founder & CEO of Botkeeper, about the role of ethics in AI, the types of biases in AI, how we can protect ourselves and our clients from these biases, and what the future marriage of AI and human intelligence looks like.

Resources

• Accounting Today article, "AI ethics a growing concern", by Chris Gaetano
• Acumen Research & Consulting report, Artificial Intelligence in Accounting Market Analysis - Global Industry Size, Share, Trends and Forecast 2022 - 2030
• Biometric Update article, "Six key considerations for ethical AI in financial services", by Matt Peake
• Blueprint for an AI Bill of Rights, from the White House
• "AI for Good" initiative, from the UN
• Botkeeper, automated bookkeeping solution
• Enrico Palmerino, Founder & CEO, Botkeeper, Linkedin profile

This episode, we're talking about saving for retirement, specifically how we can help our employees save more money for retirement.

The general story we keep hearing is, as Americans, we aren't saving enough. The economy is playing a role, with 54% of Americans either reducing the amount they are saving or stopping all savings due to inflation, based on a survey by Allianz. The survey also showed the following:

• 43% respondents report having to dip into retirement savings to meet rising costs
• 75% say they are worried the cost of living will impact their retirement plans
• 25% of U.S. workers have no retirement savings at all
• 36% believe their retirement plans are on track

Even more statistics show those who are close to retirement age do not have enough to support themselves for an extended period of time. This is an issue that impacts us all. Local and state governments are likely to shoulder a share of the financial burden when it comes to those who don't have retirement savings (which means we'll all have to chip in for support).

But in Maryland, and handful of other states, there is help on the way. A new program, MarylandSaves, was launched on September 15th 2022, making it easier for employers to provide workers with access to a retirement plan.

MarylandSaves is a byproduct of a law that was passed in 2016 by the General Assembly, mandating that employers in Maryland who pay their employees with an automated payroll system or service must offer their employees access to a retirement plan. Maryland become just the 5th state to enact what Glenn Simmons, my guest today, calls "a state sponsored auto IRA program".

Employers who participate in MarylandSaves, or offer another qualified program, will receive an annual waiver for their yearly $300 State Department of Assessments & Taxation Report filing fee. To qualify for the 2023 waiver, employers must enroll by December 1st 2022. However, you can still earn that waiver beyond 2023 just by enrolling in the program. The waiver applies every year after you enroll.

In this episode, I speak with Glenn Simmons, Executive Director of the Maryland Small Business Retirement Savings Program - the driving force behind MarylandSaves. Together we dive deeper into how programs like this work, how employers like you can get started, what it means for your employees, and what a difference this can make in the lives of future retirees.

Resources

• Allianz Press Release; Inflation Causing Majority of Americans to Stop or Reduce Retirement Savings
• PwC, Retirement in America Report
• Marylandsaves.com
• Glenn Simmons, Executive Director/CEO at Maryland Small Business Retirement Savings Program, LinkedIn profile

Culture - one of those slightly misunderstood topics. A lot of ideas about culture are different from person to person. My goal with speaking to Stacey Rodgers, Executive Director of People & Culture at Cohen & Co., is to get a little closer to a mutual understanding of how to define "culture" in an organization.

In my personal view, culture within an organization is based on a shared set of values and professional identity; who we are, why we exist, and our purpose. Once you're clear on all those definitions, it becomes a part of your vision and mission. You also start hiring people based on that cultural fit, which drives how an organization functions and succeeds.

The COVID-19 pandemic has had a huge impact on workplace culture. An article from California Management Review, How Have Organizational Cultures Shifted During the COVID-19 Pandemic, reports the pandemic has led organizations to emphasize certain cultural elements and downplay others. There is an increased emphasis on flexibility, transparency, supportiveness, decisiveness and confronting conflict. In exchange, there is a decreased emphasis on customer orientation, individualism, detail orientation, results orientation, and collaboration. In general, culture has shifted away from high performance orientation to one that prizes empathy, understanding and mutual support.

These changes are interpreted positively or negatively based on employees with different backgrounds - the shift has been jarring for many. One main solution to cultural related issues is improved communication between leaders and employees. A PwC article, How the pandemic can change workplace culture for the better, by James Thomas, points out that while remote working may seem "cheap" to organizations, it comes with hidden costs to your culture. Lockdown has resulted in social isolation, which can be addressed with collaborative virtual solutions and treating mental health as a necessity.

There's so much to touch on when it comes to culture, which is why I'm glad to speak to Stacey Rodgers and gain additional insight into how culture can provide opportunities and how to address cultural issues as they arise.

Resources

• California Management Review article: How Have Organizational Cultures Shifted During the COVID-19 Pandemic by N. Derek Brown, Yixi Chen, Hope Harrington, Paul Vicinanza, Jennifer A. Chatman, Amir Goldberg, and Sameer Srivastava
• PwC article: How the pandemic can change workplace culture for the better by James Thomas
• Cohen & Co. Profile: Stacey Rodgers, CPA, MAcc
• Stacey Rogers, Executive Director of People & Culture, LinkedIn

Today, we dive into ESG: Environmental, Social & Governance. Investors are increasingly applying these non-financial factors as they investigate which public companies they will invest in and regulators are increasingly requiring that companies include these types of factors in their financial statements. There are plenty opportunities for accounting and finance professionals in this new area.

In this episode, I speak with Alyssa Rade, Chief Sustainability Officer at Sustain.Life, which offers solutions that are uniquely designed to make taking climate action easier and more affordable for companies of all kinds. She helped me understand how wide ranging the implications of ESG really are. We talk about what ESG is and what it isn't; what all this means for CPAs in public practice, business & industry, those in public companies and private, for investors and auditors - there's so much to consider and discuss. Listen in!

Resources:

Journal of Accountancy article: How firms are seizing the ESG opportunity, by Andrew Kenney

Sustain.Life website

Alyssa Rade LinkedIn Profile

Are you physically, mentally, physically well? That seems to be the key question these days. There's more of a focus on individual wellness in the workplace today, especially in the wake of the COVID pandemic.

People who are happy and well are more productive than those who are unwell. It all boils down to the fact that we've only got one body, one mind, one life to live, so we better make it count.

Wellness, or lack there of, is going to translate directly into quality of life. Employees today know this and are demanding more in terms of wellness from their employers. An article from The Washington Post titled, "Gen Z workers demand flexibility, don’t want to be stuffed in a cubicle", by Danielle Abril, notes that for the young generation of workers, money may not always be the top job priority. Instead their list includes flexibility to work from the office and remotely, wellness and mental health initiatives, as well as meaningful work in culture.

For employers, accommodating for these preferences may become increasing important as Gen Z workers are expected to more than triple to 87 million by 2030 in Australia, France, Germany, Netherlands, United Kingdom and United States, accounting for 30% of total employment, according to a study by Oxford Economics. The Washington Post article also quotes Linda Jingfang Cai, vice president of talent development at LinkedIn, “We’re seeing this young cohort of workers demand that employers care about them as whole people".

There's a trend to dedicate time in order to recharge during the "5-9" hours in order to function well during the standard "9-5" workday. An Accounting Today article, "Burnout is note a badge of honor", by Randy Crabtree, states that when you feel burnt out, you try to work harder but are less productive, making you get down on yourself. This creates a toxic environment for employers and employees.

We need to reassess priorities, recognizing that we only have this single life and considering how we want to spend it. I sit down with Jill Myers, an integrative nutrition health coach and CPA, who helps people on their journeys to health & wellness. Jill and I discuss the obstacles between us and better wellness, the consequences of not getting well, and the steps to getting there.

Resources:

Washington Post article, "Gen Z workers demand flexibility, don’t want to be stuffed in a cubicle."

"Burnout is not a badge of honor" by Randy Crabtree

Yodaya Wellness

Jill Myers LinkedIn profile

Talking all things metaverse with Glenn Friedman, CEO of Prager Metis, a global CPA firm that made headlines this year as one of the first accounting firms to set up shop in the metaverse.

The metaverse is loosely defined as a new iteration of the internet - a virtual world running in parallel to the real, physical world. You can create a virtual avatar of yourself and interact with other avatars anywhere throughout the world to do almost anything; business, learning, networking, entertainment, commerce, and more.

The metaverse is reminiscent of "Second Life", a virtual world that was popular 10-15 years ago. It was, and still is, known as an "exclusive haven of self-expression". When Second Life started to become popular in 2007-2008, it become known that a very real economy existed in this space, which required CPAs. Training and education opportunities were developed to help accountants navigate this virtual world.

At the time, the Maryland Association of CPAs created "CPA Island" in Second Life, a designated space where resources could be provided for young professionals and educators to help them get started in this virtual world. However, the experience was less than optimal given the restraints of technology at the time and overall interest waned.

Now, in 2022, looking at the metaverse, questions arise: how is it an improved experience compared to Second Life? How does it interact with the new platforms for virtual learning and communication? There has been a lot of news surrounding the metaverse lately and accounting firms are jumping back into the virtual world. Accounting Today published a recent poll from Big Four firm, PwC, showing the following:

• 67% of executives are actively engaged in metaverse projects
• 20% report they are currently "looking into it"
• 82% believe it will become "business as usual"
• Despite the fact only 9% of the executives currently use any of the existing environment

Those who are in the metaverse see the potential in the areas of client collaboration, business demos, recruiting, and training. I spoke with Glenn to find out how the metaverse compares to Second Life, and whether there are new opportunities in this space that will mold the future of the profession.

Resources:

Prager Metis, Metaverse Services

Glenn Friedman, CEO, Preger Metis, LinkedIn

PwC 2022 US Metaverse Survey

Anoop Mehta, long time CPA, MACPA member, and just the second Marylander to chair the AICPA, is one of the sharpest, smartest people I know. He is a proponent of greater diversity, equity, and inclusion in the accounting and finance world. As an Indian-American who immigrated to the United States with his parents at just 12 years old, Anoop followed a path to a more diverse, inclusive profession. Not only has he followed this path, but he is helping to pave it as we speak. Listen to hear his unique, inspiring, story and the ways in which he's helping make progress in the area of DEI.

Resources:

The Path - The Anoop Mehta Story - MACPA

Maryland’s Anoop Mehta named AICPA chair

Anoop Mehta, LinkedIn Profile

When I initially sat down with Michelle Golden River, Growth & Profitability Strategist and Founder of Fore, LLC, we planned to discuss advanced pricing and where the profession stands today. We began by talking about how CPA firms can switch from a time based billing model to pricing work in advance.

However, the discussion evolved into a conversation about relationships. Advanced pricing comes down to value - what value are you delivering to clients and what is that worth? To know that, you need to know your clients. To know your clients, you have to talk to them and build relationships.

Joey Havens, Managing Partner of Strategic Growth at Horne, dug deep into this concept with his blog post "What if I Really Am a Trusted Advisor?". In this post, Joey asks is that really what we should be aiming for? He ran his team through an exercise of what their current client experience was like vs. what the team wanted it to be, "We needed a litmus test to help understand our present reality around client relationships, experience, and level of service," Joey explains, and this is the test they began implementing:

1. List your top five clients that you serve as their trusted advisor across the top of five separate pages.
2. For each client, write down their strategic goals.
3. What does your client see as their biggest challenge or risk?
4. Write down the date when you proactively contacted and scheduled a meeting with this client and collaborated on either of these key issues or a possible opportunity we identified as the primary reason for the meeting.

Joey goes on to explain that through this exercise, his team realized they were not unlike most in our profession, excellent first responders. However, as a firm, they were not delivering on the "trusted advisor's" promise. It should be a collaborative relationship, providing significant value beyond fees, and being part of a client's "inner circle".

Before you can start talking about adding value and how to price that value, you need to learn more about clients. CPAs need to build relationships, which means having intimate conversations with clients, asking them questions, and really listening to their answers to find out how you can help. Michelle Golden River thinks about this at a deeper level and talks through the definition of "value" with me in this week's episode.

Resources:

• What If I Really Am a Trusted Advisor? | Joey Havens
• Fore LLC pricing consultant, trainer, and facilitator for CPAs
• Michelle’s Bio | Fore LLC
• Michelle Golden River | LinkedIn