How AI & the Cloud will Affect the Future of Accounting with Jeff Wilson (Part 1)

CPA Podcasts

In this two part episode, Phil interviews Jeff Wilson, CPA and owner of the W2 Group. Phil and Jeff talk about cloud-based accounting that provides access to accounting systems and information from anywhere with internet access. Jeff discusses why he uses cloud accounting and how it has changed education and testing. He also shares tips on how to relieve the stress before taking the CPA exam.


Narrator [00:00:02] Hello and thank you for tuning in to another episode of CPA review and more. We are pleased to bring you the number one podcast for CPAs and CPA candidates. If you'd like to learn more about how Yaeger CPA Review can help you, find us on our website at Yaeger, CPA review dot com. Now, here's your host, Phil Yaeger.

Phil [00:00:28] Hello everyone, this is Phil Yaeger and welcome to CPA Review and More. And I have more there because there's only so much you can talk about CPA Review. Although a lot of people I do interview as I do today, he is a CPA. And interestingly enough. All right, I taught for a couple of years at the school that he graduated from Bowie State University here in Bowie, Maryland, and his name is Jeff Wilson the second. So there must be a first run, right?

Jeff [00:01:01] Yeah. [Laughs].

Phil [00:01:01] OK. Now, Jeff has a CPA. He's a PFS. What does the PFS stand for.

Jeff [00:01:07] A personal finance specialist.

Phil [00:01:10] Ok. And you're a certified CFE? What does that? Certified Fraud Examiner?

Jeff [00:01:15] Certified Fraud Examiner, Yep.

Phil [00:01:15] All right, and CGMA? You didn't take that test, did you?

Jeff [00:01:20] No, no, no, no, no, no.

Phil [00:01:21] It was called "Right to Check", and you got the designation.

Jeff [00:01:23] Yeah, yeah.

Phil [00:01:25] And what's the CDFA?

Jeff [00:01:26] Certified Divorce Financial Analyst.

Phil [00:01:30] Ah, you handle divorce cases?

Jeff [00:01:34] That's the "more" of the CPA that we'll be talking about. [Laughs] Yeah, so that's right. That's where we're moving to.

Phil [00:01:39] And what's the name of your firm?

Jeff [00:01:42] The W2 group.

Phil [00:01:43] Now, you're a partner?

Jeff [00:01:45] No I'm the owner.

Phil [00:01:46] You're the owner. Okay. Well, I guess you're a partner, but not with anybody else. How long have you been the owner of that firm?

Jeff [00:01:55] We're we're actually rolling on to year nine down to now. Yeah.

Phil [00:02:00] Yeah. Well, you feel old.

Jeff [00:02:03] I do. It's been painful some days.

Phil [00:02:10] Well, I happen to know someone, and you know the same person. Maybe he can discuss retiring with you.

Jeff [00:02:15] Yeah.

Phil [00:02:16] Okay, all right. You say you help organizations meet their compliance and profitability goals through innovative accounting solutions. And you also said you actually leverage and point out innovative cloud based accounting. So you're into cloud based accounting?

Jeff [00:02:35] All the way in one hundred percent.

Phil [00:02:37] For those who don't know what cloud based accounting is, can you tell us as a layman what is cloud based accounting?

Jeff [00:02:45] So cloud based accounting is our say. It's very simple, but it's about using accounting systems that are Internet application based, meaning you can go to your any any of your accounting systems or anything like accounting where you are. Right. That is much different from the traditional way that bookkeeping accounting was really set up where you had to have something downloaded to your desktop computer and you can only access your information if you were in that specific room where you downloaded everything. That is much different. So we're using cloud technology so we can basically get access or provide access or to information from anywhere.

Jeff [00:03:28] As long as there's Internet, we can get you access.

Phil [00:03:32] Now, what happens if the if the sky is cloudy? Can you use your cloud based accounting?

Jeff [00:03:39] If the sky is cloudy, like it looks like it is now with all the snow in Washington, DC, I can still get to what I need to do. I can do.

Phil [00:03:48] It's basically a way of storing your your data, right?

Jeff [00:03:52] Yeah. So I would say a way of storing and a way of--kind of a bad word but--getting your information is the way it is. So. Yeah. And so being able to retrieve data from anywhere and like so good example. You don't want to someone excuse me. Hey do we get paid last month and maybe I'm at the grocery store. I stepped out for lunch.

Jeff [00:04:15] I can just easily tap on my phone and answer that question. I don't need to go back home and, you know, go look at paper statements and nothing like that.

Jeff [00:04:24] I can look right from my phone and tell you exactly what's going on.

Phil [00:04:28] Where these cloud based systems located. They're not in the clouds, obviously. Where are they located generally?

Jeff [00:04:38] So generally, they're all going to be stored on the provider's server. And that's really the difference, right? You have these organizations with these mega servers that are housing and storing all of this data. And we can talk about later about why they're so powerful in the in the metric standpoint. But so most of these if you're into your data, certainly into its servers.

Jeff [00:05:01] If you mostly everywhere else is probably saying that Amazon server hwc a lot of these organizations, so they give you the ability to connect to their servers that are pretty much up 24/7. I mean, half the world is running on a AWS or Microsoft server or Intuit server.

Jeff [00:05:21] So as a result, everywhere.

Phil [00:05:23] Now, you didn't learn about cloud accounting. You've been out of school. I think you said--how many years?

Jeff [00:05:29] I've been out the--why you make me date myself, Phil? I don't know [laughs].

Phil [00:05:34] Well, you look about 25.

Jeff [00:05:36] Well I appreciate it. I'm out of it. So this'll be hard to say: it's about 15 years now.

Phil [00:05:43] 15 years. God. All right. They had debits and credits back then, didn't they?

Jeff [00:05:48] Think so.

Phil [00:05:49] Okay.

Jeff [00:05:50] Flintstone's was still on TV too.

Phil [00:05:56] [Laughs] Yeah, that was a good show.

Jeff [00:05:58] Yabadabadoo!

Phil [00:06:01] For those who don't know who the Flintstones are. Look it up on Google. All right. But anyway, all right. Obviously, you didn't take courses in cloud accounting at Bowie State University. All right. And you are an accounting major. All right. Where did you learn cloud accounting?

Jeff [00:06:17] You know, Phil, just like everything else. You've really got to you know, I don't think cloud accounting was even around back in 2006. That wasn't what we were told when we were still doing. The paper credits the green paper. Right. And so I got into cloud accounting and about I can say about 2011, 2014, when it was really coming out.

Jeff [00:06:37] And I will credit into it probably the best at providing a lot of training materials. Hearing a lot about the cloud. But it wasn't really picking up early on and just taking a lot of self-paced training and learning and really testing it out for myself that I do most things. And but I really into it provided me a lot of information about the cloud.

Jeff [00:07:02] And I think a couple associations, Maryland associates, CPAs, a lot of stuff going on it block. They were talking about blockchain back then and now it's not that wasn't there yet. I'm still not there yet on blockchain.

Jeff [00:07:14] But that's where between those two areas where I was like, hey, this cloud thing, I'll take my chances on this one.

Phil [00:07:22] Now you can actually teach yourself. Is that what you're saying?

Jeff [00:07:25] Yeah. Yeah.

Phil [00:07:26] I said to. All right. And you're not the first person that has told me that, right? Because I've asked them and they've only been high school couple of years. And I've asked them in your curriculum, is there anything going that would cloud-based accounting? And the answer is no. All right. And it's the most exciting thing I've ever seen. Yeah. Yeah. And you would think that, well, it will be on the CPA exam at some point. I would say in about four years. I don't know if you're aware there's a CPA evolution. Have you seen anything about that?

Jeff [00:07:57] Yeah, I was actually working with the Maryland Association of CPAs and that was a project on the board that we were kind of providing input about the evolution of it and what areas it's serves. So, yeah.

Phil [00:08:10] Tell the people what that CPA evolution is. And do you have some idea? Can you discuss it?

Jeff [00:08:16] Yeah. So do you know from a higher base level, the structure of the exam is going to change, but it's really about the the questions are going to change and the topics.

Jeff [00:08:27] And why is that? And the reason is, is because some of the same things we're talking about: cloud technology, blockchain. The way that we're doing accounting and data is just changing.

Jeff [00:08:37] So the world has moved past some of the basic things that you need to know as far as a CPA and as a result with the AICPA is trying to do is make the CPA fit. What really what do people really need to know? So what you're going to have is a core exam is like, hey, this is the core, basic CPA stuff and then we...

Phil [00:09:01] What will be on that core exam? What we'll be tested?

Jeff [00:09:03] The core exam is still going to be your basic financial reporting. You're still going to have the tax stuff, but it's going to it's going to be now. So you still have your basic audited financial reporting tax, right? That's the core.

Phil [00:09:18] Will it have an I.T. component?

Jeff [00:09:20] Yes. So here's what happens. Right. The I.T. component comes in to really talk about these things that are now changing. So you're going to see I would bet I haven't I wasn't on any of the task force related to the testing.

Jeff [00:09:31] But my bet is the first part of that section is going to be cloudy later on in, while probably the block chain, you know, kind of keep going from there.

Phil [00:09:41] And then artificial intelligence.

Jeff [00:09:43] Exactly right, is going to continue moving up, going up that technology line.

Jeff [00:09:48] And that's because those things are those things are really now a part of what our real world in accounting is. Right. And so the students who it's going to take that you were preparing for that. Right. That's at least the classes should be doing and the exam is going to be testing. So we are making still making a quality product. When I say we us as an association, accountants, whatever you want to call us a family, we have to make quality CPAs. Right. And this ensures that we are putting out the best CPA product by having this CPA exam evolution going this way.

Phil [00:10:23] So once you pass the exam, all right. Do you have to pick a specialization?

Jeff [00:10:30] So this is where it gets interesting, right? You don't have to pick the specialization actually comes in in the testing, right? I think it's going to come in in the testing, if I recall, because this is what we were providing input. But so it's not I think it's going to be after and things are going to be before you take the exam, you pick your specialization.

Jeff [00:10:47] But the great thing about it is you're not going to have this because we were having this conversation where we were slightly worried about are you going to be CPA technology or CPA that it won't you just be a CPA, but you get to pick a specialization which will probably the last briefing on it. It'll probably have an effect on the questions that you're going to probably get to and how your exam is going to flow through based on one of your tax or can't remember and all the specializations. One was like, you know, like business, like B, C, C business if you have a business environment and costs.

Jeff [00:11:22] Yeah, I think that that part is going to get really picked up as far as like business acumen. Right. I think that's one of the things. So, yeah.

Phil [00:11:29] Now what are they doing with the experience requirement then. All right. Did they mention that at all? All right. After you pass the exam, what do you have to do to get your CPA license?

Jeff [00:11:41] Well, you still want to do your you still want to have to have your experience, have another CPA sign off on your experience. I don't think that's going to change. I think that they will that it will be I think we'll reexamine the whole credit-hour thing at some point. I think the whole. What is it? I'm sorry I'm getting old now.

Phil [00:12:01] The hundred and fifty hours.

Jeff [00:12:03] Yeah yeah yeah. I think we'll I think we'll go back and reexamine that hundred and fifty, whatever anybody wants to really say on that, I think they are coming back. I never saw the value in it. And I think...

Phil [00:12:15] Well, you know, that was actually the story on the one hundred and fifty hours was one of the professors at the University of Maryland lobbied the people in the legislature state of Maryland to get two hundred and fifty hours in Maryland. And the reason a person lobbied for that is they were starting a master's program in accounting. So they figured if they required five years, then they'd get all these people into that new master's program. Except that, what it did is, it reduced the number of people majoring in accounting.

Jeff [00:12:51] Yeah.

Phil [00:12:52] So it sort of was a, you know, really hit University of Maryland by surprise. They didn't fill up this course, the master's in accounting. All right. The profession started where accountants said, hey, I'm not going for a fifth year, all right. To be a CPA, I can major in finance. All right. And go four years and actually starting salaries in finance were higher. Yeah, yeah, yeah. In fact, that thing has really caused the shortage. There's a terrible shortage, as you know.

Jeff [00:13:24] Yeah, we have pipeline issues and that's one of the reasons.

Phil [00:13:27] Yeah.

Jeff [00:13:28] I'll say this though. I didn't so I had to have the 150. But I don't think that we do a good job of explaining other ways around the 150. Like for example, I did not go for a fifth year, but I for me an example, I use my internship to get the credits. I just paid for the credits. Right. I worked at a small firm. I call it like work study. Right. And so I use my I worked at Bombe and in Bethesda, Maryland, and I think I purchased a merged with another firm lately, but I worked there and I use that my time there, my internship for the other credits, and then I just pay for the credits. So I ended up my bachelor's. And so I think that there are other ways around it.

Jeff [00:14:18] Like I don't hear a lot of people really talking about, hey, go see if you can just do a work study, do an internship, KPMG for the summer and then basically enroll for the summer, get the credits and then forget the whole fifth year.

Phil [00:14:31] Yeah. You see, now they just go on for a master's degree.

Jeff [00:14:34] Yeah, now they just because they signed you up for the master's program right up front. Right around here. Right. Versus I was just like, yeah, I'm, I'm a get my CPA, but I'm not going for this because some people do. They don't even finish their masters. It's just like I'm just going to get one 150 and...yeah.

Phil [00:14:50] Well in Florida when they came out with a hundred and fifty hours. All right. People at the University of Miami in Coral Gables. All right. They got their extra credits by taking basket weaving all these ridiculous scores. Now of course, I know myself being in this field. I have been asked to do a lot of basket weaving. And because I did not, well, I'd have to get one hundred and fifty hours. All right. I got in before that. But yeah, this basket weaving, they took that. I mean, it's crazy, you know, skiing, water skiing.

Jeff [00:15:25] It's caused a bunch of useless time. Right. I just don't think that it was like....

Phil [00:15:30] In order to reverse that out now, OK, you would need every legislature of every state to agree to eliminate the extra credits. All right. And they went through a lot. All the state boards really had to lobby the legislatures to get the one hundred and fifty hours in. So now, all right. They feel funny going back to legislators, say, oh, we made a mistake. All right.

Jeff [00:15:57] So somebody is going to have to carry that water. Was that somebody? Somebody. This is probably not doing that's their job. They're going to have to.

Phil [00:16:06] You want to know something if you ask them why there's a shortage of accountants, OK? All right. I'm I'm a member of these accredited course providers. We meet we met with the AICPA twice a year in person. But our last two couple of years, we've been doing it on a Zoome call. The head of examinations, his name is Michael Decker, he always asks the providers, you know, we've had a decline in the past 10 years of like half of the number of people taking the CPA exam. Is anybody have any ideas? All right. Well, when you bring up an idea, for example. All right, we got to get rid of one hundred and fifty hours. All right. What does he say? Won't work or. I can't do that. All right. Then we say, well, you know, it's killing. And also you have to work under an accountant or for an accounting firm for at least a year. Now, you know, that's keeping out of the profession now. All right. Bond and DB. All right. Deals with a lot of not for profits.

Jeff [00:17:11] Yeah.

Phil [00:17:12] Okay. And also, when we were running a review course before the one year under an accountant, they only said you have to work a year in accounting. All right. We got a lot of people from the different government agencies like the Defense Contract Audit Agency, DCAA. Now, I don't see that many people from the federal government taking the CPA exam now because in the government there is no what there's that a lot of people who have the CPA and you will sign off about your work. So these people have a lot of trouble. All right. Getting the license once they pass the exam. All right. So I said, well, let's get rid of the one year requirement under a CPA. All right. Well, someone at the AICPA says, you know, the CPA is a license to practice public accounting. All right. Well, when I took the exam and Joe took the exam, the CPA was not a license to practice public accounting. It was just a certificate. All right. That you had passed all of these different areas in accounting and you had an excellent knowledge of it. They never mentioned it was a license. Now, who wants a lot of people don't want to go into public accounting.

Jeff [00:18:31] Yep, true, that's very true.

Phil [00:18:33] And you know why? You can tell us. Why don't they like to go into public accounting?

Jeff [00:18:37] [Laughs] It's a it's a it's a public accounting is a tough place, you know?

Jeff [00:18:43] You know, I mean, especially if you're talking about the big four firms. You know, I work at a big firm like it is.

Jeff [00:18:49] It is not--and we have a conversation I have a conversation about my with my friends about this tech tech friend of mine--it's not a desirable place sometimes when you're just going to get work hellaciously a bunch of hours and then, I mean, it's just not what people want to do. Like, I don't want to work weekends every weekend for the next two or three years in order for somebody to say I'm finally worthy of becoming a senior. You work more hellaciously.

Jeff [00:19:20] So it's not to say where you work some more. So sometimes it's not really there. I know they're trying to change that culture, but just a culture of public accounting is kind of tough. You know.

Phil [00:19:31] There's no there's no quality of life.

Jeff [00:19:33] Yeah, yeah, yeah.

Phil [00:19:34] And and what we have to as like I said, is that as accountants, we have to also understand that things are changing. People, these younger generations want some type of quality of life.

Jeff [00:19:47] And if we if we continue making it...

Phil [00:19:52] How dare they want some quality of life?

Jeff [00:19:54] Right. And then and then you go right. And then if you like.

Jeff [00:19:57] I know when I was working, if I told them, they're like, oh, you need to go find a new place, the nerve. You don't want a life that you want to hang with your wife with. No, no. You don't get to do that. So I think we have to understand and we have to be flexible and can change that. And until we do so, there's a lot of issues with that pipeline. Is is the one is the one hundred and fifty is the the exam. It's the hours. They always work.

Jeff [00:20:21] Right. You know, having to do all of those things. And then what does the CPA do for you outside of public accounting?

Jeff [00:20:30] What exactly is where the CGM is coming in at? But that's the thing like the CPA and the federal government, it means nothing by not many people are valuing it. They say, hey, we'll have a CPA, but it's not value and they're not pushing it.

Jeff [00:20:45] And like you said, if you even pass the exam, you've got to find can you get a can you work a side job under a CPA to get them to sign on it if the government won't even let you? So there's a lot of things we have to address.

Phil [00:20:58] Yeah, the experience requirement has to be now maybe with this new format, which will go into effect in four years when you pass the exam. All right. Could you get your experience under the specialization you want? In other words, if I want to go into information technology, can I get experience and information technology without having a CPA sign off? They didn't talk about that, did they?

Jeff [00:21:24] Yeah, no, I know I--that's a good point.

Jeff [00:21:27] I don't think they're going to do that because I'm sort of partial on the CPA. I mean, I guess I understand the thought of it is like, hey, one practicing CPA loosing your work is willing to sign off to say this is your he's good. The question then becomes.

Jeff [00:21:47] I've never been a person that I've never worked on, a CPA who I thought they would do might sound of my license and they're like, no. So I don't think anyone is really validating.

Phil [00:21:59] You want to know why it says under penalty of perjury?

Jeff [00:22:06] You sound no better, but I don't think so. So I think we do. That's a funny word. I got a good look in that way.

Jeff [00:22:15] I had a manager. I actually have a senior manager who didn't he didn't do a funny story when I was in it before. He has from his performance review was that I wasn't technical enough, which is funny for a guy with like seven licenses.

Jeff [00:22:30] But and then so I had my manager who worked on the side of and I was like I was asking myself, why now that man, if this guy was responsible for signing off on my license and we had diversity issues, I just think culturally we have cultural clashes.

Jeff [00:22:46] Right, that he just couldn't relate to me. I would have been upset. I don't think I would ask them to sign.

Jeff [00:22:53] I think I would have waited and like, I got somebody else because it was just that.

Phil [00:22:58] You know, I met him when I we all took the exam years ago. Did you take it at the Civic Center in Baltimore?

Jeff [00:23:06] No, no, no. I took it with no. Remember, when I'm taking it, I'm taking it.

Jeff [00:23:11] I heard about the city of Baltimore. Everybody all in one lunchroom want to say no. No, I'll take mine at Prometric.

Phil [00:23:20] All right. So you say something funny. Is that is that the end of the joke?

Jeff [00:23:26] Yeah, that's it.

Phil [00:23:26] Yeah, I was you know, I remember we went to the but this is when you take all four parts and we went to the Baltimore Civic Center. All right. And every time we were there in the spring because that was the make exam. All right. They had the circus in town. So on the bottom, you know, there was two floors. The top was where they put us for the exam. The bottom was the where the main auditorium was. All right. So you hear these elephants and go, oh, yeah. And and also the smell of the place, you could smell the elephant. They haven't they haven't really housetrained the elephants. So so it was really. But you know what? It was fun. I remember we stayed at a hotel in Baltimore. All right. And I took a course that had a few hundred people, of course, and we knew I knew a lot of people at the hotel. So we went out for dinner, you know, that type of thing. But it was just a nice thing. Know, we could meet and see each other.

Jeff [00:24:34] Some camaraderie, yeah.

Phil [00:24:35] Yes, yes. Now, you can't get that at Parametric. Right?

Jeff [00:24:41] Naw, Parametric is a little bit more daunting. It gives an atmosphere of calamity when you're walking into the exam, right? You're going in there. They give you all these restrictions. Take all of your watch, take off your bill, put this in there. And, you know, we only...

Phil [00:24:57] They want you to take off your belt? What happens if your pants fall down?

Jeff [00:25:03] Put on the digital belt? Nuh aw. That's not going to work. Put your phone up so it has a little bit more calamity to it now. So you it's like going through an airport check in. And so it's a little. Yes, a little...

Phil [00:25:16] It actually sounds worse.

Jeff [00:25:17] [Laughs].

Phil [00:25:18] What do they think? You're going to have all the pronouncements on your belt?

Jeff [00:25:24] [Laughs] Yeah, they just took it all.

Phil [00:25:24] And, oh, God, they're...

Jeff [00:25:26] And I'm a watch guy, so I'm always like, oh, I really want my watch.

Phil [00:25:31] Well, they give you that time bomb clock for hours and right in front of you. Is it right in front of you on the screen? Yeah, yeah, yeah. It's still there. Yeah.

Phil [00:25:42] That to me is a distraction. Right. You're sweating your way through those large problems and you're looking at a clock timing down.

Jeff [00:25:52] Ticking you down. Yeah.

Phil [00:25:53] It's like you're waiting for a bomb to go off and do the exam that half of it was metal like at like after a while I figured out that this is just half of it is just a mental play of like, you know, just don't the calamity. I'm always I'm trying to it's awesome. I tell them that the exam is just I know it's a big deal, but try not to think of it as a big deal. Try to think of it just like any other exam. Just go don't look at the clock.

Jeff [00:26:23] Do do what you need to do and some theme music before you go in and then just have some theme music before you got to have some theme music.

Jeff [00:26:33] Where did you play before you went away? What did I used to play? Oh, man. You know, some Jay-Z song I can't remember, but that's like that's what I like, really.

Jeff [00:26:44] I'm serious. So that was like, hey, when I going to the exam, I'm like and I play it on the right there right before I walk in.

Jeff [00:26:54] And what I'm trying to do is keep the music in my head even as an exam. And I'm just still listening to this song when I'm selecting my my answers. And so just to get that not pay attention. So this calamity and just relax. You relax. Yeah. Just relax. And so, you know, you get your music and I try to just long as I stay in, I'm doing the exam, you know, it never feels so stressful. Right. So you got to kind of fairway's like kind of bring stress down from it because...

Phil [00:27:23] And it's very passable, right?

Jeff [00:27:24] Yeah. Yeah. Oh, yes. Exactly right. It's very accessible. So that's the whole point. It's the exam itself is very passable.

Jeff [00:27:31] I think a lot of times we mentally take ourselves out of the game. So I've been coaching people and to say find a way to just keep yourself in the game, make it a laughing matter and, you know, keep keep keep it down.

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