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Cool Careers in Accounting Ep. 20 - Innovating the Future of Public Accounting with Chris Vanover
371 Plays20 days ago
Chris Vanover joins host Mike Potenza to share his fascinating career journey from working at PwC and the PCAOB to founding CPAClub. A two-time Accounting Today Top 100 Most Influential People in Accounting honoree, Vanover discusses his innovative approach to public accounting, emphasizing a subscription-based model, work-life balance, and employee satisfaction. He also highlights his passion for reimagining the profession, leadership philosophy, and efforts to address the talent pipeline issue. Join us for this valuable conversation offering insights into the future of accounting and the importance of adaptability and innovation in the field.
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Transcript
Introduction and Guest Background
00:00:09
Speaker
hey everyone. Mike Potenza from Becker Cool Careers in Accounting podcast. And do I have a special guest here today? His name is Chris Vanover, and his career path is very interesting from big four to PCAOB and regulatory work back to big four, then entrepreneur, innovator.
00:00:30
Speaker
Really, really interesting career path. So without further ado, I'd like to welcome Chris to the show. Great to have you here, Chris. Mike, it's awesome to be here. Thanks for having me. Oh, my pleasure. And, it you know, I was doing a little research on your background and everything, and it almost to me sounded like, can this be real, all of these different paths and jumps and shifts?
00:00:50
Speaker
So I think the audience is going to really find interesting everything you do. So first thing I wanted to ask you is, you know, just kind of from the beginning, ah yeah where are you from? Where'd you originally grow up? Yeah, born and raised in Anaheim, California. So a lifelong Angels fan yeah and definitely ah roots down in Anaheim and still live in Orange County.
Education and Early Career
00:01:07
Speaker
All right. Good thing you said Angel fan, not Dodger fan, because, you know, I'm a New York Yankee fan from the Bronx, but believe it or not. And I'm still have a little um PTSD over the last World Series. So anyway, good. Well, I have great respect for Mike Trout and for the Angels. So always pulling for them.
00:01:23
Speaker
Hope so. All right. Well, did you go to school also in California? Did your college path take you somewhere else? Yeah, so I actually, ah out of high school, started as a cadet at the U.S. Coast Guard Academy in New London, Connecticut.
00:01:36
Speaker
And then after about six months there, I decided that wasn't the path for me. Ended up finishing at Claremont McKenna College out in Claremont, California, where I got an economics and a accounting degree as as well as a legal studies minor.
00:01:49
Speaker
um Yeah, so Claremont McKenna, and then ultimately do my master's of the accounting at University of Southern California. Wow, so much for me doing my research. I didn't even know you had that military background in there. So when did the the whole accounting thing come in? I mean, was it going to be a military career and then you just decided accounting or did you always know accounting? Yeah, I come from a ah my dad and grandparents are both Navy veterans. So it definitely was aspirational in terms of pursuing the Academy route, but ultimately i figured it wasn't the right fit for me.
00:02:17
Speaker
I had always leaned towards political science and and law. And so i actually went to Clara McKenna as a political science major. And then sophomore year there, my roommate said, hey, you should probably take an accounting class and ended up enrolling for intro accounting. And then from there on that point, really ah fell in love with it and said, hey, this is the right path for me.
00:02:35
Speaker
Wow. Interesting. Well, please ah thank your family members for their service. my My dad was also a Navy guy. So anytime Navy plays an Army, I'm kind of rooting for Navy. But, you know, for the Army guys out there, I do love Army, too.
00:02:48
Speaker
um Anyway, so you then graduate and did you go to work right away or did you say, you know what, I want to pass the CPA exam first? And when did that come in and did you study for the exam on your own or how that go about?
00:03:01
Speaker
Yeah. So interestingly enough, I had never actually taken an auditing class in my undergraduate courses at Claremont. um I actually did an internship at the time dating myself here, but it was between PwC and Arthur Anderson. It was the summer of 2001, right before my final semester at Claremont McKenna. So I actually chose to go to PwC at the time, ironically, because they were the auditors of the Angels and the Ducks. And so I thought, well, maybe eventually I can get into sports management sure and use the accounting as kind of a pathway towards
Career Progression at PwC
00:03:31
Speaker
that.
00:03:31
Speaker
um Did the internship with PwC in the summer of 2001 and then graduated in December of 2001. and if anybody knows what that time was like it was really the unfolding of enron sure and then ultimately the collapse of arthur anderson so when i uh i started with pwc officially in june of 20 uh 2002 uh so between graduation in december of 2001 and then june of 2002 that's when i actually studied and prepared for the exam using the actual becker cp program yeah good good to hear always like a positive story about that that's for sure
00:04:06
Speaker
I think I still have those books and a lot of those flashcards in a trunk in my garage somewhere. We all do. And talk about it's just like a bad dream. And they always say CPA can never pass again. Right.
00:04:17
Speaker
That's funny. so So you go to work then initially right for PWC. Were you there for a long time? What type of work do you do for them? Yeah, I started in their audit and insurance practice as a new associate, worked way up the ranks from senior up to manager. um And then as a new manager, i had gone through one business season as a manager. And this is really where my career started to take maybe a different life.
00:04:37
Speaker
um I had read that there was an opportunity to actually go help PwC design their audit software system that they were creating from the ground up. So i actually volunteered to head up to what they call a distinctive experience.
00:04:48
Speaker
went up to relocated to San Jose, California and actually helped design their proprietary audit software platform. I was not a coder by any means. I was actually on the design team helping to say, what's the vision need to be for an auditor to go through work paper setup and then actually working with the coders and the content team to bring it to life. So it was back you know version or 1.1 at the time. I know it's come a long way since then, but really kind of the you know first folks in the door in terms of building that out and stuff.
00:05:17
Speaker
That then led to some other national opportunities with PwC from the rollout, from the transformation efforts, and really kind of again, created a career path for me that I would have never envisioned. Sure. And and I can imagine it must be a very rewarding feeling to work on a project of that magnitude and then see it come to life and say, hey, you know, this is part of what I helped create. Yeah, it was, I mean, for me, it was taking my presence on a local level in Orange County and audit and ultimately client service and really having the first chance of my career to actually make a broader impact. And I think that's really what my career has always been about is how do I achieve a broader impact on a more global scale?
00:05:50
Speaker
And so really those were the stepping stones to get to that
Transition to PCAOB and Return to PwC
00:05:53
Speaker
path. Wow. Interesting. So, so I think you were a PWC about a decade and then you then take a job with the PCAOB. So that opportunity, do you think a lot of it was related to the type of work you did a piece of PWC or tell me about how you made that transition from public into regulatory? Yeah, so I had always had a footprint in client service serving both public and private companies on the audit side. And then as I progressed in my career, what I really found a lot of satisfaction out of was actually helping others learn about the audit profession, learn about how to actually you know do audit procedures.
00:06:27
Speaker
So I got involved a lot of the training initiatives at PwC. And then so about nine years into my career or so, I actually started contemplating, well, maybe I want to go back and get a PhD in accounting and actually become an educator full time.
00:06:38
Speaker
I looked at the opportunity cost to go to a PhD program. It's about five years long. And I said, you know, i'm a manager making a pretty decent living now. I can't take up that opportunity cost. But I was fortunate because I did the master's program at SC actually while I was a manager.
00:06:51
Speaker
And so they actually allowed me the opportunity to teach a couple of their undergraduate classes at SC. while I was working at PwC and also being a full-time master's student. So was a hellacious nine months of my life, but it was nonstop and busy for me.
00:07:05
Speaker
But that path towards you know perhaps perhaps pursuing a PhD wasn't quite the path for me, but ultimately that also opened the doors to this opportunity to the PCOP. And so at the PCOB, the majority what they do is on the inspection side.
00:07:19
Speaker
I was actually in their office of research and analysis, a very small group, about 30 people. And we were tasked with actually helping to drive the board strategic projects. So things like audit quality indicators, you know, the public, the the business models, the public accounting firms and studying those types of things. Right. And writing research papers and collaborating with the inspections team as well in terms of where there was risk in the and in the issuers out there.
00:07:41
Speaker
to potentially target those for inspections. So very multifaceted role at the PCOB, but that was really, again, ah nice compromise for me, not having to go get a PhD, but still having a very interesting academic type experience within public accounting.
00:07:54
Speaker
but So it was very interesting as you were telling that story, you know, looking at the opportunity cost of a PhD versus, you know continuing your employment or looking for another job. It's spoken so much like a true accountant, right? yeah You probably had graphs drawn about it and everything.
00:08:08
Speaker
And I would assume the PCA will be, you know, the type of work you're doing with the audit quality indicators and things of that nature. It's almost like a major league baseball team saying, hey, I need a lefty, you know, closer or something like that. Like your experience at PwC seems to really just have fed naturally right into that role. Yeah. And it's one of those things where I go back and think about people that have an influence on my life. And, you know, the irony of it all was my very first career mentor at PwC. That was my relationship bar partner at the time.
00:08:35
Speaker
um I had written he was actually at the PCOB the time. And I just sent him a note and said, hey, Do you happen to anything about this position? And he said, you know what, Chris, that's pretty funny you ask. And I hadn't talked to him probably in five, six years.
00:08:46
Speaker
He said, I'm actually the one hiring for it. And so again, it just shows you those full circle moments in life where you go, okay, that's probably meant to be. yeah And ended up working there for and about two and a half, three years, a lot on the boards projects, and then rebounded back to PwC. Okay, so from decade of PWC, about three years, we'll call it a PCA will be similar type of work, but I'm sure very different. Very different.
00:09:06
Speaker
But now you go back to PWC and your new role at PWC was in their chief auditor network. yeah Can you explain what exactly is that? And again, was it a similar type of role of what you were doing? Or is again, another major shift?
00:09:19
Speaker
How does it all relate? Yeah, I think for me, again, going back to just wanting to be a bit more of a change agent, somebody that wants to help people educate, empower, and inform people. And ultimately, when I was at the PCOB, I did a couple inspections just from a developmental purpose. And what I struggled with was just I empathized with the folks that we were inspecting.
00:09:39
Speaker
right And ultimately, how you know they were going through a lot. And so they only had they had to worry about the PCB inspection, but they had to worry about everything else on their plate from a public accounting perspective, client service, you know recruiting, all that sort of stuff that has to happen as a senior manager, as a partner.
00:09:54
Speaker
And I thought, you know, the chief auditor role at PwC really appealed to me because it was my chance to be in the national office, but on a localized level, really helping engagement teams think through methodology questions, really being able to actually help train the people in terms of the things that were going on in the profession and even helping out on the different audit quality
Leadership and Entrepreneurship
00:10:11
Speaker
programs. Right. So it really brought everything I loved about what I had been doing for you know the last 13 years into ah kind of a complete role for me.
00:10:19
Speaker
And really, I think, you know, we talked about highest and best use. For me, that was it. This is exactly what I think I was meant to do out there. Wow. So now you're at pretty high level leadership position at PwC.
00:10:31
Speaker
And you know listen, you've had a decade of experience prior, you have PCAOB experience, now on this ah auditor network side. So the next step you're going to make in the future is going to become an entrepreneur and start up a business. But just talk to me how you feel about your leadership skills and how it developed over time that maybe not only led you to success at PwC,
00:10:55
Speaker
but is still leading you to success in your whole new brand new startup. Yeah. And I think audit, for all intents purposes, is very much about being a detective and gathering evidence.
00:11:06
Speaker
I was very good at that part of it. But what I think really stood out for me was Having been a student at Clarence McKenna, I was writing papers left and right all the time. It was less about problem sets and actually just being able to communicate.
00:11:18
Speaker
So my my senior thesis, and this is again right in that period where Enron and Anderson was happening, was on legal liability in the accounting profession. So I love to write. I love to be able to actually communicate with people.
00:11:28
Speaker
That skill set in of itself was so key towards my success at PwC, especially in that chief auditor role where you have to also be a diplomat and ultimately understand where the partner's coming from, where we were coming from as the quasi inside regulator of PwC and trying to find you know find that common ground in terms of, hey, we're trying to help, we also have a job to do.
00:11:48
Speaker
ah That communication, it doesn't go unnoticed. right You have to have the ability to actually empathize. You have the ability to communicate effectively with people. It's less about the technical skills from a leadership standpoint. Ultimately, how do you bring together ah group of people and get consensus and ultimately drive them towards a common goal?
00:12:05
Speaker
So that to me was where the leadership really started to really set, you know, just crystallize for me. Yeah, it is fascinating, those types of, you know, capstone projects and papers that have to be written.
00:12:17
Speaker
I mean, you know, today we're living in an age of AI and chat GPT and, you know, a lot of students are taking in easier way out. So we don't know the answer to this in the future, but it will be something that will be very interesting to watch to see.
00:12:31
Speaker
Although ai AI helps us in so many regards, is it hurting us in other areas where with respect to development, right? Yeah, and I've ah you know i've been an adjunct professor of accounting at different universities between USC, Chapman University, Cal State Fullerton.
00:12:45
Speaker
I'm actually a full circle moment. i'll be heading Claremont McKenna and be instructing their auditing class coming up. And I always tell my students at the end of the day, don't try any of that with me because I'm an auditor and I'll find out. And sure enough, I found out instances of that happening. and So you just hope people take the high road and ultimately understand that this is more than just trying to get a good grade in the class. It's actually trying to help improve you as a person and improve you as a professional.
00:13:07
Speaker
Absolutely. It's very well said. So now you're back at PwC, you're working, you're basically heading up audit for them right now. But something else is kind of churning inside of you to say, you know what, maybe I can do something different. Maybe I don't want to stay in public accounting. So you come up with a startup business. Was this something that was developing over the course of years?
00:13:29
Speaker
were you just sitting back in your chair one day and the light bulb went off? You're like, oh, you know what would be great if I could do this? So talk to me about um the CPA Club and your new endeavor once you left PwC and starting up this brand new and entity.
00:13:44
Speaker
Yeah, and there was a couple stops after PwC. I did spend a year as an audit partner overseeing quality control for a regional firm. And that was part of the inspiration behind it all.
00:13:55
Speaker
You know, I was in that role and I was somewhat of a mandated hire. They were going through some PCV related challenges and they really needed as somebody to come in there as a full time partner and really focus on helping them build the infrastructure and support their transformation efforts with quality.
00:14:09
Speaker
um But I was the first time they had ever hired somebody that was a non revenue generating partner. And that's a really tough role to be in because ultimately, ah you know, the regional firms, local firms, there's very much a tug of war between quality and profitability. And those two worlds, yes, they can coexist, but oftentimes they're opposite sides of the spectrum.
00:14:30
Speaker
And for me, i remember hearing this. I was up on a trip in San Francisco with another partner. we' were actually doing some due diligence on a potential acquisition. And he said, you know what, Chris, youve you've got to find a way to make yourself cost neutral.
00:14:43
Speaker
And I said, and I never heard that before, because at a big forefirm, you're somewhat insulated from those types of conversations. And I said, What do you mean by that? He's like, Well, end of the day, we're spending a lot of money on you. You're not bringing us any revenue.
00:14:53
Speaker
I said, Okay, so that really planted the seed for me. I was like, you know, I've got a really interesting, unique skill set between what I had done at PwC in the software space, what I had done at PwC with the chief auditor role, what I had done at the PCOB with a regulatory perspective. And what I what I realized was that a lot of the local and regional firms they needed somebody like me but they didn't necessarily need it on a full-time basis because i could get in there and stand up an infrastructure for them within a year and then what happens right uh so i said why can't they go out and kind of just create a monetized version of what i do find people with similar skill sets and go out to the market and really you know and that that was the you know the genesis behind cpa club was let's take our skill set big four national quality experts bring them together
00:15:35
Speaker
and give, we call them members, but basically give CPA firms and companies access to our brainpower and help them solve the complex stuff that they don't have a full-time person dedicated to.
CPA Club: Vision and Model
00:15:45
Speaker
that's really what happened there.
00:15:46
Speaker
So I like how you say, well, you can just find someone with a similar skill set. There's not too many people out there with that kind of skill set. I'll tell you, right. So we have um CPA Club. What's the website? CPAClub.com?
00:15:58
Speaker
.cpa..cpa, cpaclub.cpa. So I was on that website I said, you know, I have to learn, do a little research, and it's very interesting. And a couple of things jumped out at me that I think the audience would find really interesting.
00:16:11
Speaker
One is how you stress a five-star experience. And I was reading about this and some articles on it, and it's very, very interesting. Maybe you could just explain to the audience, what what do you mean by five-star experience?
00:16:23
Speaker
Yeah, and I think even before we get to that particular point, really important to understand, like my whole goal was to reimagine what public accounting could be. I think it's a great profession, but I think there's also a lot of flaws in terms of how it's actually run and operationalized.
00:16:38
Speaker
so i said, you know what, we could go out there and buy a firm. But I think what's more impactful is if we actually just design a firm from the scratch from from the ground up and reimagine what's possible. So we started out and said, look, we're not going to do billable hours.
00:16:51
Speaker
We're going to have a subscription access model. i We are not going to overwork our people. right We're not going to have billable hour requirements. We're not going to have utilization reports. And importantly, is we want our members, aka our clients, to really understand how much we're on their side how much we are a concierge approach how much we want them to call us and just hey can you take care of this and we will and i owe a huge debt of gratitude uh to a couple folks that are influential in the profession ed class as well as ron baker uh and ron baker and ed class are both on record and really preaching
00:17:25
Speaker
we have to get rid of the billable hour model. It doesn't do anything in terms of value. And it's so true, especially in an era of ai and automation is our job is to provide solutions to our members, not charge them hours.
00:17:38
Speaker
yeah People don't pay for the inputs, they pay for the outputs. Sure. So when you can create that transformation transformational relationship with the member, inherently it creates a five star experience because all you're focused on is delivering more and more value to these members every single day.
00:17:54
Speaker
Because when they're on a subscription with us, right, they either choose a monthly or an annual pass. And they have a flat fee, invest subscription investment. Now, when they make that investment, they're the ultimate judge of the value because we're not going to charge them extra for some more hours. We're charging them for the solutions that we deliver.
00:18:12
Speaker
And they judge the value at the end of the day. That's how we create a five star experience for them. So how many years have been ah in operation? So we started in 2022, Club. yeah All right, great. So you have a couple of years experience right now.
00:18:24
Speaker
And as far as those clients, I'm assuming the ones that, you know, were your initial clients and they see the value you add and they feel that, hey, this is a great deal for us. There's no reason for them to go anywhere else. They kind of have a great relationship with you that is just going to kind of grow and perpetuate through
Innovative Work Culture
00:18:40
Speaker
the years.
00:18:40
Speaker
Yeah, that's I mean, obviously, there's an immense talent shortage right now in the profession. So we benefited immensely from being able to spin up a model that ultimately solves for that. But it also solves just for a lot of the regulatory complexity that's ongoing right now in the CPA world, as well as just in the broader company space.
00:18:57
Speaker
um And we we take a lot of inspiration, at least I do personally, from just very consumer-centric things that are in everyday lives. So I think about, you know I grew up in Anaheim, love Disneyland. When I go there and everyone knows Disneyland for the experience they create,
00:19:11
Speaker
Why can't we take some of those consumer-centric philosophies and apply them into a professional services environment? And that's what we're doing, right? We're taking, you know, inspiration from Disneyland. We're taking, you know, think about the Amazons, right?
00:19:23
Speaker
You know, think about Netflix, right? All that stuff is on subscriptions. It's on experience. And that's the exact same thing we've cultivated in the club now. Excellent. and And the other thing I liked about the five-star experience, it doesn't just apply to your, we call them clients, but call them members, It doesn't just apply to your members, but it applies to people that work for your organization as well.
00:19:43
Speaker
yeah Yeah. So again, I'm i' so laser focused on the member experience and the employee experience and all the people within CPA club are actual employees of CPA club. They're all based here in the United States. They're all former big four professionals. And It's very humbling when people start seeking us out because you know you're doing something right.
00:20:02
Speaker
And because of the subscription access model without the billable hour concept, the goal of our people is always, again, if you can make sure that you've supported your members and gave them a five-star experience, then you are ultimately the judge of what you do with the rest of your time. So really, realistically, because of that access model, some contractual contractual restrictions, all of our people actually benefit from a year-round four-day workweek.
00:20:26
Speaker
which is unheard of in the profession. guy um And they work reasonable workloads. It's not putting 11, 12 hours into four days. It's literally eight, nine, maybe a 10 hour day here and there. But realistically, on average, a four day year round workweek throughout the year, which again is unprecedented and also paying them top of market compensation.
00:20:43
Speaker
That's great. That's great. So you're hiring right now. you're looking to grow. We've we've been growing immensely. um We're always looking for really good standout people, without a doubt. Definitely a little bit more of a unique skill set. We typically hire at that experienced senior and above level at CPA Club.
00:20:59
Speaker
And really, you know the challenge is is that we not only support our members, But we tell love all all of our employees we have quarterly CPA club challenges. As an entrepreneurial company, we always have to be thinking about taking care of the club as well. Right. So we don't have the luxury of having just a you know billion dollar cash reserve. Right. So all of our people have to take on a challenge that either drives the member experience even more, it creates a more engaging employee experience, or it does something to benefit our bottom line as a company.
00:21:29
Speaker
And so they take on these challenges as on a quarterly basis, and they own them, and they basically have the autonomy to make decisions that are in the best interest the company. So again, just trying to create a very well-rounded employee experience. Okay.
00:21:41
Speaker
Remind me to give you my resume. Kidding, kidding guys. are just kidding um know You use the word club a lot in members, but on your website, you refer specifically to something known as Club 22. What exactly is Club 22? Yeah, again, this is where I look at what I see out there in the industry and in the profession. And I think to some degree, there are a lot of people doing similar things um and and they're good, right? It's, you know, we've got the podcast, we've got, obviously we've got other ways to connect with people. We have conferences, right?
00:22:13
Speaker
But I think what I've seen in just having column of events with even people I've known in my past, and we worked at PwC together wherever, is what's the greatest thing is about coming back together is we tell stories about how did you get to where you're at in your career?
00:22:27
Speaker
And everybody's taken a very unique path whether they're still in public accounting or they're outside of public accounting and that part of it is just really really cool and interesting for me so the concept behind club 22 again going back to like again consumer-centric things that are out there everyone knows club 33 at disneyland right a very marquee venue very limited access to it so we started in 2022 the club What we wanted to do was create a community for finance and accounting leaders that wasn't necessarily you know on the web. It wasn't necessarily you know a podcast somebody listened to.
00:23:01
Speaker
It was actually about bringing people together and creating like these squads, localized squads, where people can grow and learn from each other, network and connect, and ultimately just, again, foster a community that I think is missing kind of post-pandemic.
00:23:14
Speaker
As people have gotten used to the Zooms, they've gotten used to the Teams chats, all that sort of stuff. And they've kind of lost sight of just reconnecting with people and actually having a conversation in person. So Club 22 really takes three different elements or anchors and brings them together. The first is chats.
00:23:29
Speaker
So every few months, we'll spin up a CPA Club chats. We have our first one in Newport Beach a couple months ago. And we brought together 30 or so people, um very some influential people in the accounting profession. And we talked about AI and automation. And there was no real set agenda, no real scripted questions. It was just people gathering together, socializing and talking about something was top of mind.
00:23:48
Speaker
We then have another anchor called changes, which is more about transformational changes, whether that's physical, whether that's mental or whether that's for the community at a broader level. So we'll get together and do something around that.
00:23:59
Speaker
And then ultimately i have a chances concept, which is taking all of our people that are in accounting and finance, going to some sort of marquee venue or marquee business or some sort of just really cool business. Right. And saying, OK, what can we learn from these guys?
00:24:13
Speaker
ah very much an expert experiential type learning experience for them bring that all together and that's really the umbrella of club 22.
Technological Innovations in Accounting
00:24:19
Speaker
okay so is everybody that is a member or client of cpa club welcome to these or is it included in the service or is this like an add-on feature so we have our annual pass holders so again we have again monthly and annual passes our annual pass holders are entitled to the club 22 membership as well Oh, excellent. And those are all live events. So they'll come from all around the country. You meet somewhere. i assume your people, your employees come as well and yeah just gives them a chance to talk, meet face to face, interact, and then try to solve whatever the problem set is that you're working. Yeah. I mean, they're live events. We call them experiences. And again, it's bringing people together in a community that i think is long overdue for sure.
00:25:00
Speaker
Excellent. Excellent. Now, also at CPA Club, you know, we talk about Chris being an innovator, right? You're an entrepreneur, you start this business, but you're also an innovator. I read um an article about something very interesting that CPA Club offers. It's called an AI powered CPA Club coach.
00:25:18
Speaker
That's a mouthful. AI powered CPA Club coach. I can't believe I got that right. Yeah. So tell me what exactly is that and does everybody get it? Yeah. And again, going back to our job is to really help make public accounting better.
00:25:31
Speaker
And so anything we can do is laser focused on solving at that upper level. Because we bring it down a level and say, you know, where are people struggling right now? And again, people are struggling really with getting access to let's call it the managers and partners.
00:25:44
Speaker
So how can we create a tool that perhaps an associate, a senior associate could leverage that ultimately gets them insights and information without necessarily stalling because they can't get access their manager or partner who are overwhelmed, right? So CPA Club Coach is basically an AI generated tool that ultimately allows a senior associate or a senior accountant to actually ask relevant questions about accounting, auditing and stuff, get an answer.
00:26:10
Speaker
And in the event they can't get an answer through that that satisfactory, they can then actually connect with one of our live professionals to help navigate them through that. So that's the genesis behind CPA Club Coach and what it all is about. So i assume it's similar to like a kind of chat GPT type of technology, but in your own closed environment yeah and specifically, you know, answering the audit problem or question set that they may have. Yeah, and the nice thing about it is obviously it will connect them to a live professional within CPA Club if they really want to bounce something off. um But on top of that, knowing ultimately what their questions are is we can then spin out a certain recommended nano learning to them to say, hey, you know, you're asking about this.
00:26:46
Speaker
Go take this particular nano learning course that's less than 10 minutes long. You'll get all the information you needed need to know. Right, right. And, you know, with your experience auditing, ah you know, running the audit show for PwC and at the same time, the regulatory experience with PCAOB, we know we're at a time right now where there's going to be a major shift in what's going to be required to manage and document all of the different audit quality. So whether it's going to be the SQMS, System of Quality Management Standards, or is it going to be you know the PCAOB, QC1000, right? Whether you're private, whether you're public, there's a whole new set of standards that we have to live by. yeah So how does something like that affect what you do? I would think that it's you know really intimately related
00:27:29
Speaker
So now you have to come up with a whole new innovation with respect to these new types of reporting and management of these controls. So talk to me about you know how does your company work within this new environment that we're about to face? Yeah. And again, thinking back to where CPA Club started, ultimately, was helping accounting firms really in the quality management, quality control, engagement, on quality reviews, pre-issurance reviews, post-insurance inspections, all the stuff that was pre-SQMS and pre-QC1000, firms still had to do that, right? Quality control, monitoring, all that sort of stuff. So we always were helping firms of that already.
00:28:04
Speaker
So a few years ago, the AICPA announced, hey, we've got the new SQMS standards and it's you know hot off the tails of ISQM in the international world. um And unfortunately, nobody can all agree on the same set of standards. So everybody's got to have their own. So then the PCOB followed suit with QC1000 last year.
00:28:22
Speaker
And it's a real watershed moment, I think, for the profession in terms of it's very much equivalent to when Sarbanes-Oxley was introduced um for public companies. Right. They have to go through this kind of deferred maintenance on their internal controls and really stand up an entirely new infrastructure.
00:28:37
Speaker
And there are a lot of firms out there that struggle with it, not only because it's a very specific skill set and quality control and quality management that, again, they don't necessarily access to just because you can do an audit.
00:28:48
Speaker
doesn't mean you quite understand what the internal controls of an accounting firm should be to help produce quality audits. right On top of that, they've got a talent shortage and very limited time, more demand than they can fulfill right now.
00:29:00
Speaker
right So you have kind of a perfect storm here brewing within a very immediate coming deadline. Okay. And so firms are really scrambling, but it fit right in our wheelhouse to say, Hey, look, how do we again help firms get through this? And so we actually have our, our compass solution, which allows them to either co-source it with us or actually fully a full turnkey outsource solution where we'll just take care of it for them all along the way, helping to again, educate, inform, and ultimately transform their firm from the ground up.
Quality Management Solutions
00:29:27
Speaker
So it's been a, ah real way for us to drive value and really drive transformation for the firms that we've been supporting through this.
00:29:34
Speaker
RAOUL if I'm sitting out in the audience and you know I'm a decision maker for a firm, you know small, medium, large, whatever size it is, and I know that there are these new standards there, and do we want to create implementation on our own in-house? Or, hey, I have a turnkey solution right here. You're ready to roll with this. So everything's in place, working, tested, and you're happy with the outcomes right now.
00:29:57
Speaker
Yeah, and I'd say it's very similar to when clients, public companies and private companies had to adopt, you know, ASC 606 revenue recognition releasing a few years ago. um You know, CPA firms were out there aggressively trying to say, hey, we can help you through that or find ah an advisor to help do that.
00:30:13
Speaker
Interestingly, what we want CPA firms to understand is that this is not something that they want to go out alone. um they need expertise they need a commitment from leadership and even if you just look at the pure math behind it and we know firms think in the bill to our model we've done numbers on this and and realistically this is for the smallest firm out there this is about 150 hour exercise of partner manager time to get through all the way up to maybe 500 hours for very large firms that have a number of unique risk right so if you do math on that and just say what are the average billable hour rates for the aicpa firms in this particular you know category
00:30:46
Speaker
The opportunity cost is like 30 to $150,000 to just do this alone. Assuming you're pulling a revenue generating partner or manager out of the field to focus on this. um Now, they could say, well, they're just going to make it their moonlighting. They're going to do it after hours. That, I think, just exacerbates the talent problem.
00:31:05
Speaker
So this is one where I think firms would be really remiss not to actually engage outside help to really navigate through this because, again, we've been able to scale it and we do this for a living every single day for firms. We live and breathe this tar of sort of stuff.
00:31:19
Speaker
um But, you know, you just hope that it gets the attention it deserves because what you don't want is a rinse and repeat of the former quality control standards. You really want people to kind of get under the hood and really show, hey, let's start to change our policies and our procedures to help drive transformation for our firm.
00:31:34
Speaker
And that's what it can do. And I hope people see it that way. Yeah. And you're just talking about the investment for the implementation, right, for launching it. But then what about ongoing maintenance, right? Because we know the standards are always going to change, right? Everything always changes. So now you have to update. So I really see the value in how your company can say, hey, we have you covered. right Yeah, we I mean, again, we help them with implementation. But the other part of it is obviously the ongoing monitoring, which again, just falls right into our existing monthly and annual passes. um So firms engage us for that as well. And it again, it just takes something that is a very time consuming task, and allows them to again, just have the peace of mind and the convenience knowing that trusted experts can do it for you.
00:32:15
Speaker
And actually, again, help to deliver results for your firm. wow Well, you sold me. So good job. Good job right there. Now, also very interesting. You've been recognized by um accounting today's top 100 most influential people in the field.
00:32:29
Speaker
And you also received several innovation awards for what you've been doing. So there's a lot of creativity and innovation, you know, that's inside your mind. is this something that has always been a passion or you've been like that since you're a kid or is this something kind of new?
00:32:43
Speaker
Yeah, I think I'm a little bit outside the box at times. And there's a very ah creative side to me. And that's really where I thrive these days is really trying to find creative ways to solve challenges in the profession that I've grown up with. right But I go back to you even high school and grade school, you know people would say, hey, submit a post board of whatever it is to describe your project.
00:33:03
Speaker
I was always the one, OK, let me try to create a wheel. Let me laminate it show a timeline and all that sort of stuff. So it was always like and went above and beyond what people would normally do. So I look back on those moments ago. Yeah, maybe that was the start of something in terms of wanting to kind of just stretch myself beyond just traditional, um you know, big four environment where you're a little bit stifled at times and can't really control things.
00:33:21
Speaker
So creativity has always been a part of it. You know, obviously, extremely, extremely humbled to be on that list. um You know, there's some real icons in the profession on that list.
Personal Interests and Insights
00:33:31
Speaker
I tried to explain it to my kids because they don't quite get it. They're 10 and 12. And I said, you know what?
00:33:36
Speaker
And they're really we went to New York spring of 2024 spring break. And we actually took him to see Hamilton on Broadway. And they love that play. And they're always in the car singing every single song from Hamilton.
00:33:49
Speaker
And said, okay, I'm going to put this in your guys' world a little bit. And I looked through the top 100 list. I said, you know, look at this person. It's couple years ago. Look about who was above me. And it's Janet Yellen. And I know who Janet Yellen is? Like, no.
00:33:59
Speaker
No idea. She's the secretary of the treasury. All right. Well, do you know who the first secretary of the treasury was? I said it was Alexander Hamilton. So indirectly to my kids, I'm now related to Alexander Hamilton. OK, so that's the story I tell them. But again, um you know, I just look up to so many people on that list. So again, very humbled and honored to be on it. Yeah.
00:34:17
Speaker
That is some show, boy. We've seen it we find that twice. My kids, the same thing. They they know every word to every song by heart. It is amazing. yeah For anyone who hasn't seen it yet, ah we don't get paid for that, but just on a side note. I've seen it two times, one in New York and one in Orange County. We'll say seeing it in New York just puts it up a whole other level.
00:34:35
Speaker
Oh, yeah, it's it's pretty amazing. But so speaking about kids in quotes right now, you know, you're talking about five star experience for your member clients, but also your employees. But we know there's a pipeline issue right now. You mentioned it a few times, not enough talent. But one of the things is,
00:34:52
Speaker
as there's less talent, less people doing the work, there might be more demands on them. Is there burnout? So how are you handling it in your own organization with respect to newer, younger talent that might be coming in working for you and making sure they have work-life balance and quality? Or what are you seeing on your end?
00:35:09
Speaker
Yeah, a couple ways we're trying to address that head on. One is a couple of years ago, we spun up CPA Club Academy. um That really, again, takes inspiration for my limited time at the Coast Guard Academy and says, OK, there you had to ultimately go for four years and then you had to get five years back. So I thought, well, can't we take something like that and actually apply it here in our world?
00:35:28
Speaker
And we actually created a program for high school juniors and seniors and college freshmen to work with us kind of on an Uber-like arrangement where they basically have on-demand tasks that we can give to them. and over the course of five years with us, which again is a long, long life, long lifestyle. We talk about 16, 17 year old kid, but they can come into CPA Club Academy and actually be a part of that for the full year for five consecutive years, hopefully get to about a thousand hours.
00:35:54
Speaker
yeah Well, that thousand hours actually fulfills an experience requirement that allows them to be eligible for CPA certification. We also would help them actually go through the exam process as well. So the goal of the academy is that when they graduate with either their master's degree or the bachelor's degree, they will be eligible to sit for the CPA exam and actually certified almost on day or day one or day two.
00:36:13
Speaker
And so we can actually bring them in at an accelerated pace and ultimately avoid that you know associate level career and just jump them into a senior associate level role. So that's one way. And then I think the other part of it is, again, you just got to be transparent with your employees. And so we're very much an open book culture. Everybody's seen the P&L. They know exactly what we're looking at.
00:36:32
Speaker
They know exactly what our goals are in terms of how we're cascading those down. And they feel a part of it. And I think that's really, I think, what sometimes people are missing in their in their firms and their companies is they don't feel like there's a purpose or a mission.
00:36:44
Speaker
So we really try to connect things. Hey, this is what we're trying to do. And this is why we're doing it. And this is the part you play in it. On top of that, you know, the four day work week, all that sort of stuff, top of market compensation. I think two of the fundamental problems is people are overworked and they're underpaid.
00:36:58
Speaker
you know everything else is a little bit marginal um and so i i laugh a little bit at you know the icpa put out a great publication about 80 pages on the pipeline problem and i go okay well i could have probably boiled this down to two bullet points before overworked and underpaid if you actually move the needle on the overwork or the underpayment you're going to get people to come into the profession and luckily there's been a little bit of an uptick lately But firms realistically, again, it's like the pay disparity between a veteran and Major League Baseball versus a rookie, right? It's gargantuan. yeah And it's the same thing between partners and staff, right? Why are staff making $65,000, $70,000 coming out of school when they can go to some different engineering and get paid a lot more, right?
00:37:37
Speaker
That's the mindset that has to shift. Do the partners need all the riches, right? Yes, they pay their dues and stuff. But realistically, how much is enough? And when is that money going to start flowing down to the bottom and really saying, okay, we're either going to go invest in more people,
00:37:50
Speaker
or to help the work situation, or we're going actually pay our people more or radically. Let's do both of that. Sure. That makes total sense. Now you mentioned four day work week. Is that something that you do? Absolutely. Yeah.
00:38:00
Speaker
So because of our, again, subscription access model, all of our people, really, I don't care if you work 30 hours, you work 50 hours. End of the day, if you've had five star experience as an employee and you've given a five star experience to our members, then how much time you spend in a giving week doesn't matter. So realistically, everybody could take a four day work if they wanted.
00:38:15
Speaker
Okay. So I'm a little bit aggravated. Four-day work week. You're giving high school and college students chance to get experience. Where was this when I was going through this, right? Wouldn't that be great? I love that. Yeah. So, again, it's just reimagining what's possible, and it's a lot easier to do when you're building it from the ground up.
00:38:30
Speaker
Wow. Well, I mean, you listen, learning all about CPA Club and all of this stuff in the five-star experience, Club 22, super fascinating. and And when you talk about innovation, I now see why you got all of these awards. They seem well-deserved. So let's step away from you know all of this work you've done for accounting, whether it's big four, regulatory, your own stuff.
00:38:49
Speaker
Talk to me about you know Chris, human being, individual. like If i and you and I are friends outside of work, what don't I know about you? Or tell me something that is surprising I would never think of about you. Yeah, so, you know, I always told myself, we're doing these CPA Club challenges inside the club every single quarter.
00:39:06
Speaker
Why don't we start doing those our own personal lives? And so this past quarter, I started my own little personal challenge. And I said, okay, this quarter, I'm going to take up the piano and just, you know, bought an app offline. And I've actually started playing the piano for the last couple of months and something I've been very much enjoying and just learning in the process and stuff, but almost like self-taught through an app.
00:39:24
Speaker
um So it's been really relaxing, a way to kind of get away and just learn some new songs and hopefully impress some people along the way. So you may see some clips of me out there on LinkedIn playing the piano at some point. That's great. You know, we should all have those kind of hobbies. cut That's the other club I have. Yeah, I like that. I like that. Maybe we'll form a band or something like that. I can't sing, though.
00:39:43
Speaker
So you just for a minute to go back to the you know younger generation, the pipeline issue. So if you could get someone that's in high school right now or just starting college,
00:39:54
Speaker
Tell me about the advice you're giving them. And are you recommending accounting and would you yourself do this all over again? Like, give me that perspective. Yeah, I think for me, what kept me in the game so long was just being open to opportunities that were presented and just being open minded and i have a ah curiosity to explore maybe something that was outside your comfort zone. You know, for me, that was, again, what kept me in the game this long is, again, going those routes. And i think That's the advice I would still give to my younger self is like, look, when something comes in front of you, explore it, see if it's for you and give it a shot. Right. I think sometimes we get too focused on, hey, you know, we spent four years in high school getting great grades. We went to great college and now we got to get the job and now we got to grind it. Right. and at the end of the day,
00:40:41
Speaker
Like there's more to life than ultimately just public accounting or your profession you're in. And so really just being true to yourself. You know, there's big four, there's top 10, there's really small firms out there that do great things. And I think people are sometimes caught up in just everything that's out there in the Instagram culture about who they need to be and what they need to do. But end of the just be true to yourself and be open minded to really accept opportunities that come through.
00:41:04
Speaker
Wow. Yeah. Very well said. Words of wisdom for sure. Hopefully, ah yeah hopefully people will heed that sage advice. Now- I should have taken the internship offer from the brewers back in the day. That would have been interesting.
00:41:16
Speaker
Could you imagine the different trajectory of your life? Who knows where you would have been? real quick sidebar here if you've got time. yeah um i mentioned how I chose PwC at the time was because they audited the Angels and the Ducks. Okay. What people don't know is that I did accept the offer with PwC. And then fast forward to 2002, they sent me the engagement to go on the Angels. i was super excited about it. And then the first thing you do as an auditor is you get an independence confirmation.
00:41:40
Speaker
And of course, at the time, and this 2002, the Angels were owned by none other than the Walt Disney Company. Well, after 9-11 and all the unfortunate circumstances around that, um the market was very depressed. I ended up picking up a bunch of different stocks at the time, one of which was Disney.
00:41:57
Speaker
So I got the independence confirmation and I couldn't actually sign it because I wasn't independent. So I couldn't be on the angels. Truly devastating. So devastating actually sold my stock. Yeah. But I had to do a one year cooling off. Yes. And then 2000, 2003 rolls around.
00:42:11
Speaker
And what happened is the Disney decided after the World Series decided to sell the Angels to Artie Moreno, who currently owns the team. And so Artie Moreno decided no longer to use PwC.
00:42:22
Speaker
So I never got to be on the Angels, but I got to be on the Ducks for a few years. oh So close. So close. Wow. That's amazing. But is that is baseball the main sport and hockey or anything else you have Yeah, I grew up a big baseball fan, lifelong Angels fan, was there in 2002 for the World Series Game 7. So that was really a true treasure moment for me in my life. um I thought I had spent my entire associate salary on tickets. But looking back again, it was one of those things. There's an opportunity.
00:42:48
Speaker
Go after it and just do it. And then you'll realize at the end of the day how impactful and memorable that was. Um, so big baseball fan played volleyball in high school and college. Um, so I've had a lot of fun. My son's taken up volleyball. He's just finishing up fourth grade and coached his fourth through sixth grade team for the first time this year, which was a blast for me.
00:43:05
Speaker
um a lot of flag football with my kids these days. So try to coach that, but more of a observer nowadays, given they've kind of progressed in the roles and that coaching a bit beyond my skillset, but, uh, you know, love angels, baseball, love Rams, football, USC Trojans, all that good stuff. So, wow. Great. Yeah. a lot of great sports teams in Southern California.
Conclusion and Future Outlook
00:43:22
Speaker
That's for sure. Not the Angels right now, but they'll get there. Well, at least you had a game seven. Not many people say they went to a game seven for their favorite team and when they won. And, yeah you know, apologies to all the San Francisco Giant fans out there. You know, like I can tell you as a Yankee fan, I lived through it with the Dodgers last year. It's it's heartbreaking. We get But oh that's sports. I was 23 years old when they won it all. And it's been 23 years since they won it all. So they're due.
00:43:44
Speaker
All right. They are. They are definitely. Based on my math. All right, so listen, thank you so much for all of this great information. Really, last question i want to ask you, what's next for CPA Club? Do you have any great vision or new services or anything you want to elevate?
00:43:59
Speaker
Yeah, I think what's been really rewarding and humbling about what we're doing is we are obviously connected with a number of accounting firms and companies, and in particular, on the accounting firm side. I think we're starting to show others that there's a different way of approaching things. And so I think there's a real opportunity for us at CPA Club to really um elevate and broaden the reach we have. And so without saying much more, I just think there's a bigger impact we'll have in the coming months and years ahead. So just really looking forward to those next steps. We've got this thing off the ground. It's got great legs and we're here to stay and ultimately, again, do our part to really drive transformation in this profession and make it better.
00:44:35
Speaker
Wow. Well, what an interesting career path. Big four, regulatory, um you name it, innovator, of entrepreneur. It's really, really just great information that you shared with us. And I think there's a lot of people in the audience that sometimes may say, hey, public accounting is for me, and I'm going to be here until the final day that I retire. But I'm sure there's a lot of other people out there that have that light bulb idea.
00:44:58
Speaker
And it's just really good for them to know, hey, you can do it, right? If you have a good plan and you put in the time, you can be successful. So thank you so much for sharing all of this. It was my pleasure. Hopefully our paths cross again one day, maybe get to do this again, hear all the great stuff that's happening. All right. Thanks, Mike, for your time. Appreciate it. All right. Thank you, Chris. And thank you everyone for coming in. We really appreciate it. And we're looking forward to see you in another podcast in the future.
00:45:22
Speaker
Hey everyone, I just want to make sure you're aware you can earn CPE credits for listening to this podcast. All you need to do is visit the show notes and click the link. But even easier, if you are a prime CPE subscriber, you could earn the CPE at no extra cost.
00:45:40
Speaker
All you have to do is just log in to finalize the credits. Other than that, that's everything we have for you today. Thanks again for tuning in to Becker Kuhl Careers in Accounting Podcasts, and we hope to see you in another episode in the future. Have a great day.