It is inevitable that businesses will experience some sort of employee theft or fraud. Employee fraud is very costly, and according to the Association of Certified Fraud Examiners’ (ACFE) Occupational Fraud 2022 report, businesses lose an estimated 5 percent of revenue due to employee-related fraud. The most common type of fraud is asset misappropriation, which was a staggering 86 percent of fraud cases. The report also found that 42 percent of those who committed fraud were living beyond their means, and 26 percent were having financial difficulties.

The fraud triangle is an important concept to understand. Fraud generally happens when these three things are present: pressure, opportunity and rationalization. Situations where employees are living beyond their means create pressure, inadequate internal control creates opportunity and employees believing they are owed compensation creates rationalization.

Here are five common types of employee schemes and what accountants can initiate or tell their clients to be aware of to uncover the fraud:

• Expense reimbursement. Some of the most common types of fraudulent expenses are reimbursement for fuel purchases, airfares and meals and entertainment.
  • Review the date and time of the expense on the receipt. Was the expense made on a holiday, late at night or on a weekend that does not correlate with the employee’s duties? Look at the location of the purchase and confirm whether the location correlates with a company activity.
• Payroll. There are typically two ways that an employee can perpetuate payroll fraud:
  • Setting up ghost employees. These employees do not exist but are paid like regular employees with their payroll being diverted to the perpetrator’s account.
    • To detect a ghost employee, look for duplicate mailing addresses or bank accounts. Review W4 forms and benefit election forms. The absence of withholding elections or benefit elections is an indication a ghost employee may exist.
  • Falsified wages, increased salary or excessive overtime.
    • Compare employee overtime and look for outliers. Are there any employees who are working many more overtime hours than their peers? Review employees’ pay rates versus their peers: Are there any outliers?
• Billing. There are typically two methods of perpetrating billing fraud:
  • The fraudster creates a purchase order and payment is diverted for personal use.
    • Examine the quality of the invoice, the invoice numbers and pricing. Many times, fraudulent invoices are created using online templates. Invoices may be unnumbered or invoice numbers will be sequential, similar or close together.
  • The fraudster creates a false vendor account and pays fraudulent invoices from this fictitious vendor. This type of fraud is more difficult to detect since to commit this type of fraud, the fraudster has a higher level of authority.
    • Test a few new vendors each year and scrutinize those at a higher level. Review the addresses of the vendors and compare that to the file of employee addresses; look for duplicate mailing addresses or bank accounts. 
• Skimming sales. Skimming of sales typically occurs at point-of-sale businesses where an employee checks out a customer and pockets the cash received.
  • Test the register logs for a high volume of no-sale or voided transactions and compare the time they are occurring to the employee shifts for evidence they are happening more often by one or a few employees. 
• Receivables skimming. Accounts receivables skimming is typically conducted by an employee who has access to the payments received and the recording function. In this scheme, the fraudster will steal the payment received and attempt to conceal this by either lapping or journal entry. Lapping will cover up the theft of customer A’s payment by using customer B’s payment, then customer C covers customer B, and so on.
  • Match the payments received with the customer the payment is credited to and the date the payment is posted. Match the customer check with the customer on the invoice. A discrepancy between the invoiced customer and the paying customer, or significant discrepancies between deposit date and posting date, could indicate a lapping concealment of a receivable fraud.

No auditing procedure can guarantee success in uncovering fraud but having preventative measures in place can provide the right environment for detecting these common forms of employee fraud.

In today’s challenging economic environment, independent auditors — from sole practitioners to the largest international CPA firms — are under a microscope to ensure they are achieving high-quality auditing of financial reporting. CPA firms have recently been in the crossfire of negative results reported by standard-setters and regulatory agencies.

One way to steer your ship clear of these treacherous waters is to increase audit quality across your assurance practice. When independent auditors, regulators and investors refer to the term “audit quality,” most tend to focus on the credibility of the audited financial statements. In other words, did the auditor deliver an appropriate professional opinion that was supported by sufficient evidence and objective judgments? In order to answer that question, we must first identify the key ingredients that drive audit quality:

• Leadership and culture of a firm
• The skills and personal traits of audit partners and professional staff
• The effectiveness of a firm’s audit process, methodologies, policies and tools
• The reliability and usefulness of audit reporting
• The business and regulatory environment in which the CPA firm and their clients operate
• Compliance with applicable independence and ethics requirements from the American Institute of CPAs (AICPA), regulators, standard-setters and state boards of accountancy
• Market placement and specialization
• Engagement performance, professional skepticism and judgement
• Quality control and consultation
• The delivery of consistent results

So how can you ensure your assurance practice does not get sued by an audit client, fail an AICPA peer review or face a regulatory enforcement action? Follow these 10 recommendations for boosting the quality of your audit practice:

1. Strengthen the “tone at the top.” Firm leadership should:
   • Ensure that all staff have sufficient time and resources to solve engagement issues.
   • Demonstrate a track record of consistency on standards-based decisions.
   • Establish and regularly communicate a formal code of conduct.
   • Challenge unethical behavior and address instances of non-compliance with the firm’s code of conduct through swift disciplinary actions.
   • Provide a copy of the firm’s quality control document to all professionals.
   • Hire, compensate, promote and reward professionals who possess and exhibit high levels of integrity and demonstrate a commitment to quality.
2. Enhance your client acceptance and continuance process. Perform sufficient client background checks. It’s important to only associate with highly ethical clients.
3. Hire or align with experts, specialists and consultants. Have sufficient technical personnel on hand at your firm or have access to external experts, specialists and consultants who can provide you with the appropriate advice when facing challenging issues.
4. Offer high-quality continuing professional education and training. Offer a blended training package to increase competency from a technical and soft skills standpoint. Focus on topics such as:
   • Independence and ethics
   • Applying professional judgment, skepticism and objectivity
   • Firm policies and procedures
5. Establish or outsource a quality control department. If possible, consider investing in or outsourcing a quality control department that will:
   • Develop accounting and auditing guidance as well as industry-specific guidance.
   • Perform engagement quality control reviews of high-risk engagements.
   • Monitor and evaluate the firm’s quality control policies and procedures.
   • Provide technical consultation to personnel.
   • Monitor the firm’s accounting and auditing training programs.
   • Develop assurance policies and procedures.
   • Participate in a dialogue with regulators and standards-setters when new accounting and auditing standards are being developed.
6. Streamline your audit process. Ensure all engagement teams consistently apply and streamline your audit approach so they can focus on areas of high risk and audit execution.
7. Increase specialization. Consider specializing in a specific industry or niche so that you can focus your attention and build efficiencies to increase engagement realization.
8. Rotate key professionals on engagements. Consider rotating partners, managers and engagement quality control reviewers on a periodic basis to add fresh and new perspectives to your high-risk attest engagements.
9. Join an accounting network or alliance. Consider joining a reputable accounting network or alliance program to collaborate and share with other CPA firms.
10. Incorporate data analytics. With many attest clients processing their transactions electronically, CPAs are getting more involved in data analytics — the art and science of processing “Big Data” to discover and analyze patterns, identify anomalies and extract other important information embedded in data through analysis, modelling and visualization relative to human behavior and interactions. Data analytics can be utilized to enhance audit and review engagements, forensic investigations and consulting engagements, and to assist clients in business decisions. For CPA firms, data analytics is a powerful tool because it can help auditors and accountants achieve 100-percent coverage in substantive testing, which decreases engagement risk while increasing efficiency and realization.

Retirement planning could be your client’s primary financial planning need. For younger people, retirement seems so far off. Other clients may avoid the topic because they feel so far behind. As an accounting professional, how can you bring up the subject, not embarrass your client and give them hope for the future?

“Retirement planning” sounds like industry jargon. The term is used so often, clients tend to tune you out. Try repositioning the goal as financial independence. When clients think of retirement planning, it’s often in terms of something that happens at age 65 or 70. They go onto Medicare. They collect Social Security. There’s a big party at work. They don’t go into the office anymore, living off their savings for the foreseeable future.

Financial independence is similar, but much more appealing. Set Medicare and Social Security aside for a moment. Imagine your client, through disciplined saving and wise investments, could reach a time in their life when working becomes a choice not an obligation. For a person in their 20s, could they see this happening at age 55 or 60? Since they might feel like they will live to 100, that can be an attractive goal, something they would work towards achieving.

Now, what about the client further along in their working career who hasn’t given much thought to financial planning? They have a 401(k) plan at work. They make the maximum allowed contribution. Maybe they’re starting to get their Social Security projections in the mail. They have some investments in taxable accounts but aren’t actually saving much at this time in their life. How do you create a need for retirement planning?

Let’s talk a little about creating a need. You aren’t “creating” anything. You’re uncovering a problem that might not have been on your client’s radar previously. Your client now has two choices: they can address the problem or ignore the problem. If they choose to ignore the problem, the problem doesn’t go away. Often it gets larger. If you went to your doctor for your annual checkup and they said “I saw something I don’t like. We need to do more tests,” you know there’s a problem. You will want to address it, not ignore it. 

Here's the scenario. You ask your client, “Are you confident you’ll have a comfortable retirement when the time comes?” They give a yes or no answer. If the answer is no, they recognize there is a problem. They might say, “Yes, I suppose I am confident I will have a comfortable retirement.” You ask another question: “How confident? 100 percent? 50 percent? 20 percent?” They will probably not have an answer and would be open to you helping to find one, getting to a probability.

This blog was originally published as a column on AccountingWEB and can be read here. It is republished with permission.

The word most people have been searching for is “whipsawed.” As is both typical and cyclical, the amount of change we are experiencing and feeling continues to be unprecedented. Whether it is the workplace trend of the Great Resignation or larger, global phenomena, the ability to feel like you are “in control,” especially for CPAs, their clients and organizations, is getting harder by the hour. As the rate of change continues to accelerate, the frequency of these feelings will increase, requiring individuals to develop strategies to respond to change when they don’t know what change is coming.

We know that most change management programs don’t stick because they are rejected by employees. It makes sense — we aren’t going to create new habits or processes without wanting to do it, and change is uncomfortable. A solution is to change the focus away from the change and over to the individual who we’re asking to make the change. Successfully responding to macro change requires a focus on the micro individual. This is because the only constant throughout all of the change is the individual going through that change. 

Since individuals are the central point of success, it’s best to start to adapt by explaining the “arc of change,” a four-phase response that includes awareness, preparation, learning and wisdom:

• Awareness. The first phase in responding to any change is understanding the change to which we are responding. This is more than just an exercise in recognizing that things are changing; it goes beyond to understand the speed at which things are changing. We can handle small amounts of change; yet when change is occurring in multiple facets (work, home, life) and at increasingly swift speeds, the combined level of change can be overwhelming. This awareness allows us to properly prepare.
• Preparation. At first thought, it’s tough to prepare for change when we don’t know what change is coming. But it’s important to note that we aren’t preparing for specific change, we are preparing ourselves to respond to change. This shift in thinking allows us to focus on the things we can control (physical, mental, social and financial well-being) in order to appropriately set ourselves up for success. External change will always happen in many different forms; we can only focus on our ability to respond, and that requires us to focus on the micro individual. 
• Learning. Properly preparing ourselves requires us to then shift and evolve into what’s called a learning mindset. Those most effective with adapting to change understand a good balance between curiosity, humility and vulnerability that, when embraced, allows them to adjust with relative ease. Change can be painful, yet there are lessons in pain. Viewing change as an opportunity to develop and adjust, rather than something to react and respond to, is an important step in the change management process.
• Wisdom. All of the above components lead us to the holy grail: making good decisions. Ultimately, as the economy and workplace change around us, we are only as successful as the wise decisions we make in the moment. As we look back on the arc of change management and our ability to adapt in motion, we see that each step leads us to a point where we are setting ourselves up for decision-making moments. 

The world, economy and workplace will continue to change. In fact, they must. And for us to remain relevant as the world changes, we also must invest in our capability to be flexible and ready to respond when appropriate. We don’t know what the next spike of change will bring, but we can guarantee that it’s coming — and soon. Those who embrace change and this arc of thinking will be the ones still standing in the coming years. 

As I am sure most of us have seen over the last couple of years, the ability to source, attract, develop and retain top accounting talent has been notably difficult. Labor demands within the profession, a new emphasis on work-life balance and shifting demographics have all played a part, making this task increasingly difficult without diminishing its importance as an integral part of the growth of our industry.

This sobering reality makes the process of sourcing, developing and retaining top talent all the more important.

Outreach and Recruiting

In order to build a firm foundation of talent, we must start at the beginning — sourcing and recruiting. While the idea of college campus recruiting has been well established, it is possible to expand this concept to the campuses and accounting programs of two-year (junior/community) colleges and high schools. Doing so allows firms and recruiters to get a head start on getting students excited about the potential and opportunity that a career in accounting can provide. Leveraging student accounting organizations in promoting the profession has proven to be effective as well; in the process of choosing a career path to follow, many students will first look for the opinions of their peers.

Establishing mentoring relationships earlier in a student’s career (high school, early college) also can help to reverse stereotypes about the industry that are well set in by the time students need to traditionally choose a career path. Connecting students with practicing accountants early on will go a long way in shaping (and changing) the perspective many students have on the field of accounting.

Uncovering Untapped Talent Pools

As the landscape for both employers and employees has changed over the last couple of years, so has the pool of talent that needs to be utilized in the process of building the “pipelines” we are striving to create.

To take full advantage of this shift, we must expand our focus to less-traditional candidates — those looking for greater flexibility, better benefits, shorter commutes or a larger opportunity for remote work. 

Another avenue of talent pool expansion centers around the re-focusing of skill priorities for those positions in question — “must-have” versus “preferred” skills. “Must-have” skills are those that are necessary for a candidate to perform at the position in question. “Preferred” skills are those that help a candidate’s potential for landing the position but should not exclude them from consideration.

Focus on Onboarding

Once candidates have been sourced and offers have been made, it is important that hiring organizations ensure that assumptions are not being made in the onboarding process about what a new hire needs for success.

Once onboarded, it is vital that new hires, at any level, take part in a mentorship program. Leaning on guidance from experienced CPAs and higher-level professionals at the onset of a new hire’s career will increase the likelihood of their long-term success within your organization.

An important choice for all college graduates is to decide on a path for their accounting career. Most college students are told the same thing: get an internship for some quality experience prior to graduating. For those going into public accounting, there historically were only two choices — tax or audit. A recent shift has provided a new niche to focus on — advisory services. I consulted with some partners at my firm about the differences among the three and what to expect in a typical workday.

Tax

Tax compliance is extremely deadline driven. Depending on the size of the firm, you may be a specialist in partnerships, corporations and/or nonprofits, each of which have their own deadlines throughout the year. If work piles up, there can be lengthy work hours to get through any backlogs, but there is potential for slow times throughout the year. Very rarely is compliance work done at the client’s office. Typically, financial statements are provided, and a tax return is furnished from this information. The time it takes to prepare returns can vary based on complexity. A tax professional may have hundreds of clients they work on throughout the year.

Taxing jurisdictions are constantly adapting to the changing financial world. The Tax Cuts and Jobs Act of 2017 made significant changes to the tax code, specifically to the international market, making earnings and profits earned overseas taxable regardless of repatriation. Tax planning is extremely valuable in this situation to minimize taxes paid. These are typically done in specialized grounds such as international or state and local tax. 

Audit

Audit deadlines are based on client needs, such as a bank application or board of directors’ request. This provides for more consistent work throughout the year without the influx of work congested around a few certain deadlines. The length of the audit can vary based on many factors such as accessibility of documents needed and what type of report is being provided (audit, compilation or review). Work is usually done at a client’s location which can be unfavorable if the commute is a burden. Depending on the size of the clients, an auditor could have as few as five to 10 clients.

An auditor will sharpen their accounting skills. Auditors need to understand the blueprints of how financials are built and structured between an income statement and balance sheet. An auditor is providing an opinion on how accurately a company’s books and records are portrayed. They are examining how the financials are compiled from annual transactions. Understanding debit credit accounting is extremely beneficial.

Advisory

Advisory services are a value-added service. It is a consulting service in which one uses research, conclusions and recommendations that are shown to the client for decision making. It does not necessarily need to be tax or audit related. There are many different types of advisory services that can be provided because most services begin with a client issue that is identified from a conversation. Advisory services can be expensive and time consuming, but it provides many individuals a fast track to partner as they can be offering a service no one else is providing. It gives many young professionals the chance to focus on a specific niche, specialize it and grow the practice.

Summing It Up

The options for today’s accounting professionals far exceed what use to be the norm. What it really boils down to is that everyone needs to be some type of advisor. Every auditor or tax professional needs to always be considering ways to improve their client’s situation. The days of just preparing a tax return or an audit report are no more. Resolving problems for your clients will build your value as a trusted advisor.

You can look at tax, audit and advisory as driving a car. Your rearview mirror is typically your tax compliance. You are looking back at the past year and reporting the financial data based on what has happened. Audit is being in the car. You are reviewing the current status of the company. How are the gas levels, the speed limit? Is everything being portrayed as it really is? Advisory services are looking at the road ahead. Are there any roadblocks? Is there anything we need to adjust for?

Joining a firm where you can be exposed to the various options can help you decide what field you’d like to focus on.

In education, we provide accounting students with all the necessary technical skills — a strong foundation in accounting and general business. These fundamentals are important — skills learned in the classroom translate directly to the workplace. However, the accounting industry demands a broad set of competencies from young professionals today, and accounting students need more than mere technical skills for transformation into the polished professionals the business world expects. As educators and employers, how can we provide students and new hires with the right level of support and guidance? This is the role that mentoring can play. 

Schools are perfect outlets for mentoring by offering information sessions and seminars. They also provide specific mentoring opportunities by pairing students with professionals in the field — alumni are a great resource in this area. Others can learn from Rutgers Business School’s example, which offers one-on-one mentoring opportunities as part of a Road to CPA program.

Guidance need not end upon graduation — accounting firms and corporations can also provide one-on-one mentoring. Upon joining an organization, new hires can be paired with more-experienced colleagues.

Here are some potential topics that mentors can discuss with their mentees:

• The value of the CPA license. Above all, we should ensure that new accounting professionals understand the value of the CPA license — that the certification embodies a certain level of well-respected knowledge and professionalism. Do students perceive the license as just another certification? Mentors can provide background on the value of the license and its capacity to propel budding careers.
• Career path options. Students may not be aware of the many career paths available to them. Most hear initially about public accounting, but the CPA license is useful in accounting areas such as private/corporate, governmental, forensic and internal audit. In addition, the Certified Management Accountant (CMA) designation is another certification that pairs well with a CPA license.
• General professional and soft skills. New accounting professionals may be lacking in these areas simply because soft skills have not been discussed with them thoroughly. Topics include the importance of punctuality in the workplace, methods for successfully interacting with clients and colleagues, techniques for strong written and oral communication, the value in good email etiquette and responsiveness, and strategies for achieving a promotion and overall career success.
• CPA Exam and license specifics. Most students know some basics about the CPA Exam, but many are unaware of details such as the varying licensure requirements by state. Students may also feel overwhelmed by the Exam itself and desire advice on the best approach for studying and passing. General advising may be offered at the school level, but counselling may focus more on graduation requirements rather than licensure requirements. A mentor can provide that perspective of “things I wish I had known.”

While we expect young professionals to be fully equipped to work in a challenging field, mentoring can bridge the gap between basic technical skills and the broad skillset required by today’s accounting profession.

Why Young Professionals Need to be the NJCPA’s Next Investment

As I drove north on the Garden State Parkway on a humid June Friday afternoon, I couldn’t help but smile. I wasn’t relishing not being one of those sitting in southbound Jersey Shore traffic. I was thinking about our just-completed 2022 NJCPA Convention and Expo at the Borgata in Atlantic City. I was smiling knowing we all successfully gathered at our first in-person Convention since 2019. Like many of us, I’m left with lots of hope for the future of the profession and this great organization. 

We welcomed more than 550 members and nearly 800 attendees to this year’s event, not far off from our 2019 numbers. The Convention theme was “The Way Forward: Transform. Innovate. Grow,” but it might as well have been, “I’m so happy to be here!” That was a popular refrain from attendees. 

We heard from great speakers, such as Jim Bourke, Dr. Kecia Williams Smith, Donny Shimamoto, Gene Marks and G. Scott Clemons, and celebrated members and leaders at our Annual Business Meeting and through the 2022 Ovation Awards. We had some hiccups during and after the event, including some post-event positive COVID tests, but the 2022 Convention & Expo was in one member’s words, “out of this world.” 

This year, I was especially encouraged by the energy and creativity from our emerging leaders, many of whom were attending the Convention for the first time. As we move forward, the NJCPA has an amazing opportunity to reinvent what it means to be a member and create new ways for young professionals to engage with the organization and our profession. From our discussions and surveys, here are four changes young professionals would love to see take hold over the next five years. 

• Involve young professionals in top-level boards, committees and interest groups. Giving emerging leaders a seat at the table and responsibility to manage a project will not only build their confidence and trust in leadership, but it allows them to learn leadership and decision-making skills firsthand. They can bring forward a new perspective, boost emerging leader morale and eventually boost our member pipeline. 
• Help them build their networks. It’s great to meet other emerging leaders in the same field who they can relate to, but they also want to meet people from different career levels and disciplines. The NJCPA, our leaders and members need to help young professionals navigate their career path by making it easier to build their networks — or by being their network.  
• Bridge the gap between student and mid-level career programs. The NJCPA has amazing incentives to get students to join, including scholarships and CPA Exam assistance. But when students get that degree and transition into the workforce, the same level of opportunity is not always there, even though that’s when it’s needed most. The NJCPA’s proposed new Affiliate category will enable young professionals to take advantage of the benefits of membership (e.g., discounts, training) while we showcase to them the relevance and benefits of the CPA credential. 
• Make sure our organization’s values line up with theirs. Millennials are phasing out of the emerging leader category, and Gen Z is starting to make up a bigger portion of the workplace and potential members. According to a recent Deloitte survey, Gen Z workers are drawn to companies and organizations that align with their values. Sustainability, social justice, DEI and student loan debt are just a few topics that young members are looking to take a stance on. 

If we want the NJCPA and the accounting profession to be forward-thinking and future-proof, and our membership pipeline full, then today is the day to start investing in our young professionals. 

As always, please let us know your thoughts at feedback@njcpa.org. And plan to join us for a free Membership+ webinar on Aug. 11 or 18 that will delve more into the challenges and opportunities with the CPA pipeline.

As one of the nine Stockton University students who attended the 2022 NJCPA Convention and Expo in June, several highlights come to mind: the Emerging Leaders lunch, the cybersecurity presentation, data analytics discussions and the session on Crafting Your Accounting Innovation Strategy. Many of us gained insight from professionals that has helped us gear towards innovative ways of practicing accounting.

Here are some takeaways from some of my fellow Stockton students:

• Nicole Spera really enjoyed the Emerging Leaders lunch where she was able to meet and network with new people in a more casual environment.
• Katia Morales said that it was a wonderful privilege that she was able to go to an NJCPA Convention like this.
• Anh Phan felt that there are so many opportunities geared toward the accounting industry. She also said that, with so many changes in the recent decades, technologies have been integrated as a part of the workforce especially with artificial intelligence (AI) being the main topic.

Overall, most of the presentations were very informative and valuable for us as future CPAs. I would like to thank NJCPA member Daniel Barbera, CPA, MBA, CGMA, CFO of Lydia Security Monitoring, for sponsoring the students through the Stockton University Foundation and Professor Barry Palatnik, CPA, MBA, associate professor of accounting at Stockton, for inviting us to the Convention. This was a wonderful experience and a great privilege for the accounting students from Stockton University.

Data analytics at its core is using data to solve problems and make decisions. Some notable business improvements from data analytics include higher revenues, greater profits, lower costs, improving marketing efforts, and higher customer retention and satisfaction.  Small businesses often think of data analytics in terms of big data and do not think it is something they can afford or use. But every business has data that can be analyzed. 

Whether it is generated through accounting software, customer relationship management (CRM) systems, social media accounts or even excel spreadsheets, there is data being collected. We can use this data to find what is happening and why. 

The first step is to find the meaningful data necessary to help drive growth. This involves becoming a data-driven organization, one that thinks in terms of what data is currently being tracked, how it can be measured and compared, and what data is most important. For example, a majority of costs for a small business in the service industry will come from payroll expenses. Data on employee efficiency is key to becoming a more efficient and profitable organization.

Questions to Ask

When reviewing the data, it’s important to know the specific problems you’re trying to solve. 

• Is it client retention and satisfaction?
• Is it growth in sales from bringing in new business?
• Is it maximizing marketing efforts?
• Is it reducing costs and becoming a more efficient organization to be able to use resources for research and development?

There are many different pathways to growing your business, and it all starts with the problems that need to be solved. Identifying weaknesses, inefficiencies or complications will help set goals and make decisions to achieve them. Data analytics look to provide evidence, or proof, of what is happening.  When we can find the what, we are no longer relying on instincts. We have the facts and are able to act on them.

Finding Solutions

The data shows the what; the insights and improvements are driven by the why. We can use visuals to better understand the what, see the trends and patterns and identify areas of weakness or concern.  Finding why trends and patterns are occurring, and why there is an area of weakness, will provoke deeper thought and understanding. When something is underperforming, can we find the why?  If something is overperforming, can we find the why? By having a better understanding of that information, we can make decisive plans of actions and track the progress after implementation.

If a plan worked, why did it work and how can we use that methodology across different areas within the organization? If a plan did not work, why wasn’t it successful, and how can we improve? We want the data to tell us the story of what is happening and why so that we can continually improve and achieve our goals.

The data are the facts, the results of the situations at hand. The data have no biases and no opinions. Use the data to make informed decisions. See the impact of these decisions, and work to improve the results.

The pandemic accelerated a transition to remote work for many office employees across the country. They were forced to change their routines, their homes and the boundaries between work and life. Now, more than two years after those first days at home, most employees have learned to overcome the challenges and thrive while working in remote environments.

Benefits of Remote Work

• Skipping the dreaded commute. Cutting a commute out of one’s day provides multiple benefits. The time spent commuting can now be used for other valuable activities. The stress caused by rush hour traffic is avoided and employees can start and end their work days more relaxed. Consuming less gasoline and reducing wear and tear on vehicles is healthier for the planet and household budgets. 
• Flexibility, in hours and location. Many people feel that being present for more events and life moments is important. The ability to work from anywhere makes it easier to see family during the busiest times of year and be there for birthdays and holidays. Sitting down for a family dinner during busy season can be energizing. The opportunity to be more available with loved ones is irreplaceable.
• Better work-life balance has become a tagline, but it certainly is a perk of the remote world. It’s easier to get household chores done while working from home. Whether it’s throwing in a load of laundry during the day or being available for a service call, the chance to integrate some household chores into the weekdays can give time back on the weekend for family, friends, hobbies or relaxation, which can make for a more effective worker.

Challenges

• Family members aren’t always easy to work around. Family members, even if they are also working, don’t always respect work boundaries. From striking up conversations during a big project, to having meetings and calls at the same time in a small living space, communication and boundary setting are a must with remote work. 
  • Tip #1: Coordinate schedules, when possible, to avoid overlapping meetings and calls. This eases the slow internet and excess background noise caused by multiple video meetings at once.
  • Tip #2: Develop efficient communication methods. Not all meetings can be scheduled around your partner’s or roommate’s schedule, and calls often come at unexpected times, which can lead to distracting background noise for one or both people. Finding an effective way to kindly communicate to the other if they are being too loud, whether they’re on a call or not, can save aggravation in these situations. Text messaging, note writing and hand signals can be quick and effective communication methods.  

• Blurring the lines between work and home life can exacerbate burn out. The little interruptions throughout the day can build up and make the workday feel longer than it was before working remotely. There isn’t always a clear line between starting and ending work without a commute. It’s tempting to check the email that just pinged, even though it’s after hours and it’s likely not urgent. Over months, this can build up and lead to feeling burned out. For remote employees, keeping clearer lines between their work and their personal time helps balance life and fight off burn out. 
  • Tip 1: Turn the laptop off at the end of the day and put it away if needed. Time away from work and laptops is as important for remote employees as it was when employees were leaving everything at the office.
  • Tip 2: Dedicate space for work and space for relaxation. Working in the same space we relax in can hinder our motivation during work hours and similarly limit our ability to fully relax on our personal time. 

Remote work, like in office work, has advantages and disadvantages. Overcoming the challenges posed is the key to being successful in remote work. For many, the benefits will outweigh the challenges, and working remotely will become, at least partially, a part of their career moving forward.

As employers look to increase the number of CPAs in the pipeline, keeping that conduit open and diverse is a challenge. A report published by the Institute of Management Accountants (IMA) in April 2022, “Diversifying Global Accounting Talent: Actionable Solutions for Progress,” revealed that while some organizations are recognizing the need for improved diversity, equity and inclusion (DEI) in the accounting profession, the profession as a whole is still not as accessible as hoped, especially at senior levels.

That’s a telling sign that more work needs to be done on all levels. The findings from the report, which represents five research studies on DEI in the accounting profession, showed the following:

• 48 percent of North American respondents said the profession is equitable.
• 50 percent of North American respondents said the profession is inclusive.
• 63 percent of women reported that they have experienced behaviors they perceived to be rooted in bias against people like them while working in the accounting profession.
• Diverse talent has a tendency to leave employers and the accounting profession altogether due to a lack of DEI.
• Male respondents are more likely to view the profession as equitable and inclusive than females.
• The diversity gap at senior levels is largest among nonwhite, Hispanic and Latino racial and ethnic groups.
• African Americans are 13 percent of the U.S. population, 8.5 percent of the accounting workforce and less than 1 percent of CPAs.
• Hispanic or Latino Americans are 18.5 percent of the U.S. population, 8.9 percent of the accounting workforce and less than 5 percent of CPAs.
• Asian Americans are 5.9 percent of the U.S. population; 12 percent of the accounting workforce and 10 percent of CPAs.
• Women have made the greatest progress of all demographic groups but are still underrepresented at senior levels by over two-thirds.
• 63 percent of female respondents said there is greater emphasis on recruitment rather than retention for female professionals.
• 50 percent who identify as LGBTQIA said they do not consistently receive fair treatment in the recruitment process.

The data shows that more than half believe the profession is not equitable and about half think the profession is not inclusive. One third of female survey respondents said their experiences impacted their career choices. They described decisions to leave employers and, in some cases, the profession altogether. In fact, more than 40 percent of female respondents in each region studied, and as many as 73 percent of women in the U.S., cite instances of bias affecting recruitment, assignments, peer-to-peer interactions, promotions, compensation, mentoring and sponsorship and retention efforts.

Solutions for Change

So, what are some ways to improve DEI? We developed the following four pillars for change:

• Raise awareness by identifying and mitigating unconscious bias so people of all backgrounds are recognized and valued.
• Attract diverse talent by promoting the profession as a desirable career path for people regardless of gender, ethnicity, race or LGBTQIA identification.
• Drive career promotion by taking specific steps to ensure that people of diverse backgrounds have equitable access to the factors that enable career advancement.
• Increase accountability for progress by defining, transparently reporting and linking performance to DEI metrics.

Many of the concerns small business owners have now focus on how they can stay afloat after the COVID-19 pandemic. This blog explains how changes to the market might affect these clients and what CPAs can do to help them navigate the recovery afterward.

“This time it’s different.” Some say these are the four most dangerous words uttered on Wall Street. Here is another concept: “People like the familiar and the comfortable.” Your client who owns a local business might think the COVID-19 pandemic is over and business can get back to the way it was in 2019, but there are some major factors that indicate this time, it really will be different. Here’s what has changed:

1. Hiring personnel

Many businesses have a “We Are Hiring” sign in their window these days. Your client might have one in theirs, too. They might assume that once financial support from the government ends, people will be back on the street looking for work. 

• How it was:  Labor was like electricity. You paid for the amount you used. Your client might have had a pool of employees whom they could schedule at a moment’s notice or send home midday if business was slow. There was no shortage of employees.
• How it’s different: Many people left their jobs during the pandemic. Employers like Amazon went on a hiring spree, offering attractive pay and benefits. Now, employees want a set schedule each month, as well as competitive pay and attractive benefits.

2. Access to capital

Over the last two years, your client might have seen new buildings going up, old properties getting renovated and property prices reaching record highs and wondered, “Where is all that money coming from?”

• How it was: Interest rates were low, and borrowing was cheap. Private equity firms had pools of capital looking for a home. Property owners got plenty of cold calls asking if they wanted to sell it. Your client might have been thinking of expanding.
• How it’s different: This time it’s different. As interest rates rise, the window of opportunity closes. Higher interest rates mean the projected rate of return on projects needs to be higher to attract capital. The lenders or individuals considering putting money into your client’s business will want a better deal or more security. The longer your client waits, the tougher it will be to arrange new financing.

3. Supply chains

Because of supply chain issues, customers now must wait for order fulfillment, pay more or accept substitutions.

• How it was: Several vendors knew what your client needed and competed to provide it. Your client could play them off against each other and beat down the price. Just-in-time delivery and free shipping were the norm.
• How it’s different:  Many inputs your client uses came from overseas. Factories may be back in business, but shipping costs ballooned in the meantime. These costs are being passed on to the customer, your client. They will need to line up alternate suppliers closer to home.

4. Business taxes

This is your specialty. You help your client pay only the amount they need to pay to different levels of government.

• How it was: Your client put aside money for payroll taxes and property taxes. You kept them current with their filings. The tax code had stayed the same for a while. You helped them take advantage of incentives the government offered.
• How it’s different: The government handed out a lot of money during the pandemic. They will look at the Paycheck Protection Program (PPP) loans that were granted, expect repayment in some situations but also work to track down cheaters. (Your client should be safe.) The government will find ways to raise taxes on businesses.

5. Price competition

If your client owns a restaurant, they endured a long period of closure. Once they reopened, they might have pushed prices up and blamed inflation.

• How it was: Your client knew what their competitors were charging and was able to align their cost of inputs plus pricing to make some profit. If prices rose, they might have absorbed those costs for a while to prevent the loss of customers.
• How it’s different: This time it’s different: Your client is getting hit by rising wages, energy costs, shipping costs and raw material costs. Prices have not leveled off. Customers have expected prices to rise but are pushing back or buying less. Fortunately, online shopping has opened the door to your client’s market to the whole world.  Are they taking advantage of this opportunity?

6. Inflation

It has been low for years. We got used to 2-percent inflation. Unfortunately, nothing lasts forever. 

• How it was: When inflation was 2 percent or less, prices remained stable. Wages did not increase that much. The cost to borrow was low. Unfortunately, so were guaranteed interest rates on savings.
• How it’s different: Your client’s labor costs will need to at least keep up with inflation, otherwise they will lose employees. They will need to determine what level of price increases they can pass along to customers without large-scale defections. They will need to determine how much of the cost increases they can absorb and for how long.

7. Interest rates

This cost was low. Borrowing was cheap. Banks liked to lend at variable rates because it reduced their risk. They made money on the spread.

• How it was: Your client was fine with variable-rate debt because interest rates were low. They might have borrowed aggressively.
• How it’s different: No one knows how high interest rates will go or how long rate increases will continue. Variable-rate debt is an open-ended problem for your client. They should convert variable-rate debt to fixed-rate debt as quickly as possible. Ideally, they should pay it off, but that might not be possible.

8. Retaining customers

Whenever prices increase, your client loses customers to competitors. People become price conscious.

• How it was: Your client’s business probably has or had a core group of loyal clients. However, some clients probably left when money got tight. While some may have returned when lockdown ended, many still have not.
• How it’s different: Your client needs to absorb some price increases to retain customers or develop a loyalty rewards program that incentivizes them to shop at their store. Otherwise, if price increases are passed directly to consumers, they will shop around for better prices.

Your business-owning client has endured a couple of very difficult years. Unfortunately, it is probably going to get a lot harder because of inflation. They need your business planning expertise to develop a strategy to move forward.

This blog was originally published as a column on AccountingWEB and can be read here. It is republished with permission.  

The accounting profession is the beating heart of the business world. With a dynamic global business environment, one may ask how this wind of globalization will impact the profession and accountants' everyday functions. 

Here are five key trends for today’s accounting professionals to incorporate:

1. Understand tech’s growing influence. The accounting profession is transitioning from a manual to a more automated environment with the increased usage of artificial intelligence (AI) and blockchain. Some accounting tasks could be fully automated, such as the sample selections process in auditing. The availability of data is also pushing the industry toward becoming more data-analytics driven with tools such as Power BI, Tableau (visualization) and SQL. Technological advancements will contribute to the efficiency and effectiveness of performing accounting duties overall.
2. Become a “global accountant” by focusing more on environmental, social and governance (ESG). The pursuit of a cost-efficient business model has opened the world to accounting professionals. Between the developed (e.g., U.S., Germany, China) and emerging (e.g., India, Brazil) economies, business operations are intertwined and dependent upon each other. This means that accountants must put an emphasis on becoming “global accountants,” if necessary, who focus on the emotional quotient as well as soft skills. We must focus on cultural awareness as many businesses today operate in multiple countries and on several continents. Being knowledgeable with respect to culture, communication, the environment in other countries, a client’s social influence and corporate governance should become as much as a priority as technical accounting. Most accountants will be expected to have some sort of expertise in ESG as sustainability becomes a global priority for the planet.
3. Counteract the decline in enrollment and help make the industry attractive to younger generations. There must be a push from all current professionals to mentor high school students and to inspire the younger generations that this profession is truly a noble one. The need to ensure a safe level of accounting talent replenishment in the future is very primordial to the survival of the profession. The accounting profession can maximize the use of social media to reach and engage future generations.
4. Stay current on future trends. COVID-19 has shown that every industry can evolve and adapt in the face of adversity. Work-from-home measures were implemented to address the consequences of the pandemic. This move has prompted a shift in the job market and, as a result, candidates expect the work-from-home feature to be included in any new job offer. This means that accounting firms and companies must adapt to this demand to remain attractive to candidates. The reality is there is no need to be inflexible; with technological advancement, virtual meetings can be held from basically anywhere by using tools such as Microsoft Teams, Zoom, WebEx and the Metaverse. Data needed to complete applicable tasks can be accessed remotely from anywhere. Another aspect to think about is pay transparency and competitiveness; this can help in enhancing trust with potential hires. Diversity is also a key factor to consider if the profession wants to attract the best candidates in the future.
5. Be flexible. The future of the accounting profession will be determined by how flexible and how adaptable it is to the dynamic business environment. The global accountant must always remain informed to anticipate and incorporate the future trends into his or her short- and long-term strategic planning.

You’ve just had a great final interview. You like the company as much as they like you. HR called and said to check your inbox, and there you find “The Offer.” The offer letter is complete with information such as your start date, where and who you will be reporting to, your official title, information on benefits and, of course, the presentation of salary. Unfortunately, the offered salary underwhelms you. You feel melancholy. You begin to question if they did like you as much you liked them, and you freeze. The process that occurs next likely sets the tone for your “incoming behavior” and establishes boundaries, expectations and professionalism.  

Here is the perspective from the other side. HR is responsible for hiring people like you. Day in and day out, they are working with salary guides, hiring budgets and, ultimately, the authority to go up to a maximum per job opening. HR is working the numbers the moment they lay eyes on your resume. Some are so good that they can value your experience before making it to the pre-screening video chat. Keep in mind that the job of HR personnel is to stay under budget on all hires, which ultimately makes them excel at their role, so they have already developed a skill set that starts with the lowest possible offering in hopes that you will simply accept. 

But now you know better. So how do you prepare in advance? Here are three ways to make sure you don’t lose sight of your value: 

1. Set your minimum. Jobs usually have a range, and depending on the geographic location, number of employees and company revenue, this number is likely set. The only time it fluctuates is if a candidate is either missing some essential skills and the employer is desperate to hire or if the candidate is overqualified or brings a unique background to the company (a bonus candidate). Before the interview, do your homework on what the position pays by reviewing similar jobs in the market, checking salary databases or even asking your peers. Ask the interviewer how many candidates are being interviewed. or why they chose your resume. Even ask them to share the range for the position.  
2. Tell them what you want and more! Most candidates are given this cookie-cutter question: “What is your salary requirement?” This is a perfect moment for you to announce your minimum… and add 10 percent. If you are working with a recruiter, your best bet is to defer to that recruiter and let them handle it. If not, and you know that you are the right candidate, feel confident with this number. It gives you immediate leverage. Once you announce your requirement, it is up to HR to negotiate with you instead of vice versa. They may say that your number is within range. If so, bravo! You’ve just given yourself a nice 10-percent increase. If they say, I’m sorry, we are looking to pay up to “X,” then you at least have the ability to adjust down to your own set minimum. If the range is below your set minimum, thank them for the interview and continue to look for opportunities. In other words, know your worth. 
3. Don’t be afraid to decline. If a salary offer is given to you without prior discussion, you can choose to fight or flee. “Fighting” would look a lot like a dance between two professionals. You may want to consider the following responses:

• “Thank you kindly for the offer of $80,000. However, with my years of experience, my last role at (insert previous company here), I cannot accept this offer unless it is re-presented at a base salary of $85,000. Would you kindly reconsider and get back to me?”
• “I appreciate the offer, and I would love to accept; however, I was expecting this role to pay between $85,000 and $95,000 per year. As such, is there any room in the budget to increase the base pay?”
• “I am excited to begin working at (company name). However, I am concerned that the compensation presented will not allow me to truly engage in the workplace experience. Is there any wiggle room in the offer? Are there any additional opportunities for compensation enhancement within this role?” 

The truth is, if you don’t ask, you will never know.  

Many negotiations take place before the start date. These conversations are expected from a majority of new hires. While I would love to say that there is an equal ratio of men to women in terms of negotiations; unfortunately, this is not the case. Considerably fewer women negotiate their salary before taking a position; this has been expressed frequently as an underlying issue in pay equity. Negotiating your salary from the onset of a new relationship exemplifies a level of business acumen and confidence. In a worst-case scenario, you find out that you might not be suitable for the company, and in a best-case scenario, you have scored a great job and just stood up for yourself in a way that can help shape your financial future positively.  

Most people who attend networking functions are there for one reason — to promote themselves and their business. They go into the function looking for “What’s in it for me?”  This focus results in individuals using the opportunity to sell themselves and not developing a relationship based on trust.

Instead, the “netweaving” concept, developed by Bob Littell of NetWeaving International, focuses on helping others and can easily be applied to CPAs trying to grow their network or business clients. Rather than looking for “What’s in it for me?” the NetWeaver, as he calls it, looks at “what’s in it for them.” A skilled NetWeaver is constantly on the lookout for ways to bring people together and to help people locate resources to meet their needs. NetWeavers act without regard for what they will receive in return.

Littell developed two key elements of NetWeaving. The first is learning to become a Strategic Connector of others — putting people together in win-win relationships — without gaining from the relationship. The second element of NetWeaving is learning how to position yourself as a Strategic Resource for others — or the “go to” person for getting something accomplished. Sometimes this means that you will be the resource provider. Other times it will mean that you will provide introductions from your Trusted Resource Network — a broad group of experts in diverse fields who have agreed to be a member of your network in exchange for you agreeing to be a part of theirs. 

Instead of spending time talking about them, the NetWeaver will ask high-gain questions to discover information about another person. For example:

• How do you create revenue in your business?
• What does your best prospect look like?
• Tell me the story of how you landed your best client or customer?
• What are the strategic differentiators that make you unique?
• Who are the three or four people you would like to meet?

When communicating with other people, the NetWeaver is looking to determine:

• Is there someone I know who would benefit from knowing or meeting this person?
• Could this person provide information and/or resources to someone else I know?
• Has this person impressed me so much that I need to get to know them better, and if they continue to impress me with their exceptional value, should I make them part of my Trusted Referral Network?

The four levels of giving referrals in NetWeaving are:

1. Loaning your good name. Allowing someone to use your good name as a means of entry.
2. Loaning your good name plus a written introduction. Sending an email or a personal letter explaining why you think the two people would benefit from meeting, as well as a testimonial.
3. Loaning your good name, plus a written and telephone introduction. Following up to further validate the importance of the person’s worth and the value of meeting the other person. 
4. Hosting the introduction. Hosting an in-person or virtual meeting and facilitating a discussion as to why each person will benefit from working together.

Netweaving is a softer approach to networking because it eliminates the need to “sell.” Instead, you are helping someone out and, in doing so, providing real value to that person as well as to yourself.

Given the recent events and changes in the world, the value of giving back has become increasingly important. As we continue to live though the COVID-19 pandemic, many organizations have been operating on a completely virtual basis, while others are still trying to navigate the right balance of being in-person versus virtual. This can present many challenges for an organization and its employees to get involved in community, mentoring, and diversity, equity and inclusion (DEI) activities. However, the value of these activities can be vital to an organization. Here are some potential benefits to getting employees involved:

• When your current employees are involved with activities that benefit others and help to pass along knowledge, it can provide a sense of well-being and comradery. It can also provide networking opportunities across departments that may not otherwise interact.
• Getting involved can create a positive work environment, which may retain employees. The current job market has been extremely competitive resulting in many people changing jobs and, at times, changing their overall career path. This can present challenges for organizations to retain and attract talent. Getting your organization involved in community, mentoring and DEI activities is an investment in people. It is a great way to demonstrate your organization’s values and show the community some of the benefits of being part of your organization.
• Professionals can step away from their daily job responsibilities for a few hours, get energized by the connections and create memories. One way that Deloitte is involved in these initiatives is through the Big Brothers Big Sisters of Coastal & Northern New Jersey workplace mentoring program, which coincides with the school year and exposes students to local businesses where employees volunteer. Through bi-weekly sessions, employees provide support, friendship and explore topics such as decision-making, conflict resolution, self-esteem, long-term life planning, job shadowing, workplace diversity, and college and career preparedness. Our professionals have enjoyed both the contributions as mentors and being “Bigs” over the years. The program has been a success for several years.

Based on our experiences with community, mentoring and DEI activities, we encourage you to consider what types of initiatives your organization has or may get involved in. There are many benefits to these types of programs! For more information about Big Brothers Big Sisters of Coastal & Northern New Jersey, please visit https://mentornj.org/

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2022 Deloitte Development LLC. All rights reserved.

A CPA firm, like any business, should always have its eyes on the horizon — looking at what’s next for its clients and its future. This often includes expanding the firm’s services or restructuring existing ones. There are several major categories of services in the accounting industry — tax, audit and advisory — and each has its own benefits.

Tax

Traditionally, tax planning and preparation services have been significant contributors to the work of CPA firms, but are they the most productive services?

Pros:

• Everyone must file taxes. Taxes are a constant; CPA firms review the tax complexity of each client and evaluate tax credits and opportunities. Offering these tax services to individuals and businesses annually provides a steady source of income for a firm.
• It’s the least expensive service. Unlike advisory services, taxes are formulaic, and new tax software has streamlined the process significantly. This is more cost effective for clients and less intensive for the firm’s staff. 

• It only happens a few times a year. Most people and businesses only file their taxes once or twice a year. This leaves little room to develop the necessary relationships with clients to ensure their return.
• The market is shrinking. Tax software companies are marketing more types of taxes as DIY, shrinking the need to go through a firm to file. This makes it harder to compete in the market.

Takeaway: Tax services are a great place to build upon for emerging firms, but they don’t present much added value if the firm is already established and looking to grow.

Audit

Like taxes, audits have traditionally served as a primary source of revenue for CPA firms. This is where the most value can be added for a firm that is considering how to develop its presence in a competitive market.

Pros:

• It’s cost efficient. Assurance services are formulaic in nature, making them cost-efficient. 
• It facilitates multi-service clients. While assurance services require a firm to be independent, if different teams are doing work, these clients can also become tax or advisory clients, building a stronger relationship. 
• It’s required. Audits are required for many different businesses and business transactions, making them a consistent source of income for a firm. 

Cons: 

• It comes with risk to the firm. When a firm executes an audit for a business, it creates a level of liability to the firm. If the audit was part of a loan process and that business defaults, the firm could be held liable to the extent that lenders or other entities relied on the accuracy of their findings. 
• It’s a transactional service. Like taxes, audits are not an ongoing service. They are executed annually or semi-annually, leaving little to no added value for the firm once they are completed.

Takeaway:Assurance services can be a beneficial addition for clients, but they do pose risks. When considering adding them, it’s important to understand the tradeoffs and make a decision that reflects the firm’s goals and needs.

Advisory

Advisory is usually added to established firms that are looking to expand. While these services require a great deal of maintenance, the added value can be worth it.

Pros:

• It creates loyal customers. Because advisory generally is an ongoing engagement rather than a one-time, transactional service, the primary benefit is the door it opens to creating long-term relationships with clients. Relationships create loyal customers, and loyal customers create a sustainable revenue source.
• It creates more-valuable clients. Advisory clients often become tax or assurance clients in other firm departments — increasing their overall value as clients.
• There’s added value throughout the process. Being a client’s advisor often puts the CPA in the driver’s seat to streamline processes for interacting with other departments in the firm. If a CPA is helping clients prepare statements throughout the year, there will be less clean up when it comes time to file or submit for an audit.

Cons:

• It can be expensive and time-consuming. Landing an advisory client can take a lot of time and effort. The high-touch nature of the relationship can strain a firm’s team if the adequate time and resources are not allocated to complete the assessment.

Takeaway: Advisory services may be more time-consuming than others, but they can provide your firm with sustainable growth over the years.

Looking Toward the Future

A key factor in planning a firm’s future is evaluating where it is today. Start with an analysis of the current operations and work from there to determine if and how to modify or expand services.

It’s important to target the efforts towards remaining cost effective and up to date with current technologies to stay competitive in the market and show clients the firm is committed to growth and moving forward together.

The accounting profession is vast when it comes to job choices — accountants can work in public practice or the private or corporate sector, for governmental/nonprofit organizations or in academia. But what motivates one to choose public over private or vice versa? Which aspects of each appeal to jobs seekers in order to prioritize one versus the other? Here are five considerations:

1. Exposure to different aspects of accounting. Public accounting can provide the opportunity to work across multiple industries. During my public accounting years, I realized that I like the manufacturing and distribution industry. I have had colleagues who realized that their niche was financial services. Private accounting can also provide some great exposure, but it will be limited to the industry in which the corporation operates and cyclical daily/monthly accounting tasks. Accounting skills obtained within a specific private industry can be transferrable.
2. Compensation. It’s no secret that, coming out of college, public accounting compensates more than private accounting. The raises are generally also better depending on how well you perform. Many graduates tend to prioritize a high-paying job so to provide some breathing room while addressing their debt-to-equity ratio. In private accounting, despite the starting salary being lower, there are future opportunities for significant base salary increase through promotion or a lateral move to another company within the same industry.
3. The level of experience. In public accounting, you can get experience being exposed to various industries (financial services, manufacturing and distribution, food, retirement plans etc.), running meetings, managing teams, cross-organization collaboration, mentorship (both upward and downward), presenting and becoming an expert within your respective field. In private accounting, one can delve deeply into the specific industry the company is in.
4. Work-life balance. Working in public accounting typically requires long hours, lots of travel and a challenging work-life balance as opposed to private accounting, where the hours are set and the increased work hours are seasonal (e.g., during month-end close, year-end close). I must add that, given the fact that we have been in the middle of a pandemic for more than two years, remote work is being offered by more and more businesses. That can help contribute to some sort of work-life balance.
5. Know your end goal. The answer to this question will determine your choice of a career in public or private accounting. If your goal is to make partner/director and become a leader of a business segment, then public accounting should be your choice. If your goal is to work for a company and contribute to the operation and success of that company, then private is for you. One can also combine both public and private by starting in one and switching. I wanted experience in technical accounting, managing, mentoring and participating in business meetings, so I chose to start in public accounting. I spent four years learning the craft and, after I had reached my goals, I transitioned into private where I combined my expertise acquired in manufacturing and distribution with internal audit.

There is no one-size-fits-all formula; choosing a career in public versus private accounting is based on many factors. The key determinants are to know yourself, what motivates you and what your short- and long-term goals are. Once you have enough self-awareness, you can make a choice. If you do not feel like you made the right choice, then reevaluate and make some adjustments. Most importantly, do not be afraid to fail, and do not embrace the easy way out; both are recipes for disaster in your professional and personal life. 

More employers have come to embrace diversity, equity and inclusion (DEI) initiatives as a way to improve workplace culture and demonstrate they value their employees as people, not just workers. A 2021 Harvard Business Review report found that 65 percent of U.S. executives say DEI is a high strategic priority, and organizations report multiple organizational benefits related to their DEI work, including increased employee engagement, innovation and success in recruitment and retention of employees. Additional studies suggest that taking the right actions to improve DEI can also lead to better financial outcomes for the organization.

There are many opportunities for employers to make small adjustments with big impact, particularly in employee benefits, programs and policies, and these adjustments may be easier and less expensive than you’d think. These include:

• Pathways to parenthood: family-forming benefits. Many health plans cover some form of fertility treatment, but the scope of treatment options may inadvertently exclude certain plan members and family structures, such as transgender individuals, same-sex couples or single individuals, as well as members in need of donor tissue and/or looking to preserve fertility. Making changes to the types of treatment covered by the plan can greatly expand access to these services and demonstrate your commitment to DEI.
• Healthcare access. People from some racial and ethnic minority groups continue to face multiple barriers to accessing healthcare, such as inadequate insurance, proximity to care, access to childcare or the ability to take time off from work, according to the CDC. Social determinants of health — conditions in the places where people live, learn, work, play and worship that affect a wide range of health risks and outcomes — have historically prevented certain groups from equal access to care. Taking steps to ensure employees have just and fair opportunities to be as healthy as possible may help reduce their financial burdens and help reduce overall health plan costs.
• Financial wellness. Benefits and programs to support the financial well-being of your employees signal that you value and support them and their needs. Helping employees address their financial concerns can also help increase engagement and reduce absenteeism and presenteeism.
• Retirement. A 2020 report from the Federal Reserve found that among middle-aged families (age 35 to 54), only 44 percent of Black families and 28 percent of Latinx families have at least one retirement account, compared to 65 percent of white families. Addressing the importance of retirement, presented in a meaningful way to employees, can help bolster retirement readiness. For example, use a custom-tailored approach to communicate financial wellness to different employee groups.
• Policies and communication. Expanding policy offerings and eligibility beyond what’s required by law is an easy and often low- or no-cost way to demonstrate your commitment to increasing DEI within your workplace. For example, adjust time-off policies to include a broader range of reasons so that more employees can better manage work/life responsibilities, and/or update existing employee handbooks, policies and communications with more gender-neutral language. Training your HR and benefits admin employees, as well as people managers, on how to address employee questions and concerns in an inclusive manner can also help foster more open communication and better understanding.

Work with your benefits providers and/or third-party administrator to determine what coverages, services and solutions may already be available to employees, or programs to enhance or expand. Employers may also choose to engage third-party solutions or service providers to address needs not currently being met.