Latest / MaxValue Podcast / Why Having a CPA Is Vital: Guardians of Financial Integrity

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Why Having a CPA Is Vital: Guardians of Financial Integrity · MaxValue Podcast

• 0:10
  SPEAKER_00: Welcome to Max Value, a show for business owners and their professional advisors pursuing maximum value.
• 0:16
  SPEAKER_00: We talk about business valuation, exit planning, global staffing, and all sorts of fun stuff.
• 0:21
  SPEAKER_00: I'm your host, Ben Town.
• 0:23
  SPEAKER_00: Today we are joined by an extremely special guest, Denise Freming, the president and CEO of Cal CPA, the California Society of CPAs.
• 0:32
  SPEAKER_00: So I have to say, this is pretty exciting for me.
• 0:36
  SPEAKER_00: I'm getting to do my podcast thing, which I am really, really enjoying.
• 0:40
  SPEAKER_00: And I get to have somebody on the show who has such an important role in one of the organizations that I'm very, very passionate about.
• 0:48
  SPEAKER_00: I'm a CPA in California and I've been a member of Cal CPA for over 20 years.
• 0:53
  SPEAKER_00: I know, you know, despite the youthful experience or uh uh youthful uh uh visage.
• 1:00
  SPEAKER_00: Uh and yeah, of course, yeah, something I'm still you know very heavily involved in.
• 1:04
  SPEAKER_00: Uh I'm and by the way, I'm not gonna take away anything from any past or present leaders of the organization, but I really think that you've brought some really cool, interesting stuff, some interesting ideas to the organization, some revitalizing energy.
• 1:21
  SPEAKER_00: And you know, just thank you.
• 1:23
  SPEAKER_01: Well, I I have to thank you, Ben.
• 1:25
  SPEAKER_01: I am honored to be here and um thank you for everything that you've given to the profession and to Kelsey PA.
• 1:33
  SPEAKER_01: I mean, you're in the forensic section, you do so much for us.
• 1:36
  SPEAKER_01: So I need to say thank you for being engaged and involved.
• 1:40
  SPEAKER_01: Really appreciate it.
• 1:41
  SPEAKER_00: Well, absolutely, it's a labor of love as as you as you know how it normally is with these volunteer organizations.
• 1:47
  SPEAKER_00: But but by the way, you know, I you you you get to know that what I was saying was heartfelt since I didn't have to say any of that to actually get you on the show.
• 1:55
  SPEAKER_00: You're already here.
• 1:56
  SPEAKER_00: So um thank you.
• 1:57
  SPEAKER_00: Thank you.
• 1:58
  SPEAKER_00: I appreciate it.
• 1:58
  SPEAKER_01: I love what I do too.
• 1:59
  SPEAKER_01: So you have to.
• 2:01
  SPEAKER_00: Yeah, it's clear, it's clear you do.
• 2:03
  SPEAKER_00: Uh so now that you are here, why don't you give us a little bit about your professional background and how you got here?
• 2:11
  SPEAKER_01: Yeah, and I mean it's never a straight road, is it?
• 2:14
  SPEAKER_01: It's always like a little journey with switchbacks in it.
• 2:17
  SPEAKER_01: Um, and that's truly what it what it's been for me.
• 2:20
  SPEAKER_01: And I I always thought I wanted to be in healthcare because I wanted to, you know, I cared about people, I wanted to give back.
• 2:26
  SPEAKER_01: And I thought healthcare is the only way, but we know as accountants and CPAs, there's a way to give back too, right?
• 2:32
  SPEAKER_01: Which all of you do so often.
• 2:35
  SPEAKER_01: Um, but I did.
• 2:36
  SPEAKER_01: I started out in, I loved finances and account.
• 2:39
  SPEAKER_01: I mean, that was numbers was my my thing.
• 2:42
  SPEAKER_01: And so I thought, well, I'll kind of marry both of them and connect them.
• 2:48
  SPEAKER_01: So I went into healthcare more on the nonprofit side and but in a financial role.
• 2:53
  SPEAKER_01: So I came up through taxes and did a lot of 990s and audits and so forth.
• 2:59
  SPEAKER_01: So came up through that that kind of area and um business analysis and then was a CFO, and um then I moved over to um another organization where I then was the COO.
• 3:14
  SPEAKER_01: Um, it was more information governance and data analytics, but within the healthcare space.
• 3:19
  SPEAKER_01: So think of um your health record.
• 3:22
  SPEAKER_01: We did a lot with health records, so we tried to get one universal health record.
• 3:26
  SPEAKER_01: We never, by the time I left, we never got it, but we got closer to it.
• 3:30
  SPEAKER_01: And um, there's some consistency out there.
• 3:33
  SPEAKER_01: So that was it was interesting.
• 3:34
  SPEAKER_01: And then I went into real estate.
• 3:37
  SPEAKER_01: So for an these are all international organizations, and we had real estate managers throughout the world.
• 3:44
  SPEAKER_01: So um, what was interesting is one of our managers managed the Birj Khalif in um Dubai.
• 3:50
  SPEAKER_01: So when I went there, we had members throughout the world, we were able to go and visit condos there in the structure.
• 3:58
  SPEAKER_01: So it was kind of interesting.
• 4:00
  SPEAKER_01: So you're you never know where your profession's gonna take you, right?
• 4:04
  SPEAKER_01: And um then someone had reached out to me and said, Do you want to help like your people?
• 4:09
  SPEAKER_01: Do you want to help CPAs because you're a CPA?
• 4:12
  SPEAKER_01: And I said, I think I would.
• 4:14
  SPEAKER_01: And so here I am.
• 4:16
  SPEAKER_01: But I'm really passionate about the profession.
• 4:19
  SPEAKER_01: I'm very proud to be a CPA.
• 4:22
  SPEAKER_01: Um, you'd have to like take that designation out of my dying hands because it's so important to me.
• 4:28
  SPEAKER_01: Um, but I I truly love what I do and the members and um just seeing how we can really help the profession thrive.
• 4:34
  SPEAKER_01: So it's a it's a passion for me, um, and a a role, but mostly a passion, honestly.
• 4:41
  SPEAKER_00: So you've gone from health records to real estate to the CPAs, uh of of which we we we are both belong.
• 4:51
  SPEAKER_00: Um so what's next?
• 4:53
  SPEAKER_00: Like the actuaries?
• 4:55
  SPEAKER_01: Um who knows?
• 4:57
  SPEAKER_01: No, I will never give up my CPAs.
• 4:59
  SPEAKER_00: That's right.
• 5:00
  SPEAKER_00: Yeah, yeah.
• 5:01
  SPEAKER_00: Uh you know, it's funny, it is actually kind of funny that that you say that.
• 5:04
  SPEAKER_00: Um, being so passionate about about being a CPA, even though I frankly I don't do any real CPA work anymore.
• 5:10
  SPEAKER_00: And that's kind of the you know, I don't know, the branding that that I have.
• 5:14
  SPEAKER_00: Um, but it is so central to uh the ethos of how I work and who I am and all those things.
• 5:22
  SPEAKER_00: So it's really cool to hear you say that.
• 5:25
  SPEAKER_00: Um, and you know, I I don't have any tattoos, but that that CPA might be the one thing I'd really consider.
• 5:31
  SPEAKER_00: I mean, my kids too, probably, but the yeah, kids and CPA, maybe.
• 5:36
  SPEAKER_00: I agree.
• 5:37
  SPEAKER_01: It's it's it's key.
• 5:38
  SPEAKER_01: And there is definitely a um, you know, a reputation out there.
• 5:44
  SPEAKER_01: I mean, I know we're gonna talk more about that, but when I went to um the one role, which was the CEO of the Institute of Real Estate Managers, they hired me.
• 5:53
  SPEAKER_01: The differentiator was a CPA because they said we're financial people, we do a lot of valuation for buildings, right?
• 6:00
  SPEAKER_01: And this is what we do, and we need someone who has that trust and that integrity piece.
• 6:05
  SPEAKER_01: So they said that kind of put you over the edge, which was interesting because I never thought they would even think about that, but they did.
• 6:13
  SPEAKER_00: That's really interesting.
• 6:14
  SPEAKER_00: Uh, you know, I never really thought about it as kind of you know, the the the CPA is your huckleberry, it's just the the little thing that that that can put you over the top, um, because it's so important to us.
• 6:25
  SPEAKER_00: It seems big, but I mean to the outside world, it it's not big, but it's important.
• 6:30
  SPEAKER_01: It is, yes.
• 6:31
  SPEAKER_01: I like that that little huckleberry.
• 6:34
  SPEAKER_01: It's a good visual, very good.
• 6:36
  SPEAKER_00: And right now, uh the reason why you're you're so uh eloquent on the podcast here, uh it's because you have a podcast uh called Rise and Stride.
• 6:46
  SPEAKER_00: Uh just briefly intro that, would you?
• 6:49
  SPEAKER_01: Yeah, it's uh we started out thinking, you know, the world was changing quickly, but not as quick as it is today.
• 6:56
  SPEAKER_01: Well, we started this about three years ago.
• 6:58
  SPEAKER_01: Um, there's a lot of change.
• 7:00
  SPEAKER_01: And we thought, is there a way for us to bring um individuals on the podcast to talk about how they're navigating some of the change and how they're making sense of what's happening out there?
• 7:10
  SPEAKER_01: And if we can help, you know, individuals take that one step forward, because sometimes it feels like you're taking three back and one forward, but how can we make sure the motion is always forward?
• 7:20
  SPEAKER_01: We thought, let's bring people together.
• 7:22
  SPEAKER_01: Yeah.
• 7:22
  SPEAKER_01: I talked about having you.
• 7:24
  SPEAKER_01: I mean, there's just so many of our members and so many leaders out there that are making a difference, but how do we showcase that and really um make sure that we're making a difference every day?
• 7:34
  SPEAKER_01: So that was why we started it.
• 7:36
  SPEAKER_01: And like I said to you when we started, I love interviewing and talking to anyone, um, even in elevators.
• 7:44
  SPEAKER_01: Um, God knows sometimes a conversation takes longer than just going up and down, but I do.
• 7:48
  SPEAKER_01: And so when I can talk to you know different leaders and really learn and help the audience learn, to me, it's it's a special gift.
• 7:56
  SPEAKER_00: Well, unless you're at the Burj Khalifa, then you can have a whole PowerPoint deck and go go on and on.
• 8:00
  SPEAKER_01: All different things, yes.
• 8:02
  SPEAKER_01: Yes.
• 8:03
  SPEAKER_00: So it it's probably not gonna be every day that I get a chance to grill you on things.
• 8:07
  SPEAKER_00: So so here it goes.
• 8:08
  SPEAKER_00: Although let's warm up with a few easy.
• 8:10
  SPEAKER_01: Go for it.
• 8:11
  SPEAKER_00: Um what is a CPA?
• 8:14
  SPEAKER_00: What is that person's role in business and society, and why does CPA as a thing exist?
• 8:21
  SPEAKER_00: In your mind.
• 8:22
  SPEAKER_01: You know, I think today it's even more important.
• 8:26
  SPEAKER_01: Probably everyone's said this than ever.
• 8:28
  SPEAKER_01: The CPA is valuable.
• 8:30
  SPEAKER_01: I mean, when you think about trust, I mean, the trust is right, we're stewards, where we have integrity, um, transparency, um, we make sure that there's that element of trust.
• 8:41
  SPEAKER_01: When you think about that in the world that we're in, I can't think of a time that it's probably more critical and important um to have that piece.
• 8:49
  SPEAKER_01: Oh, you know, you and you think right in the you know, certified public accountant, and a lot of times I think people think, well, I have to do public accounting.
• 8:56
  SPEAKER_01: Well, that's part of it, but it's protecting the public, right?
• 9:00
  SPEAKER_01: And that's the key piece to make sure that the markets, the economy, when you invest, everything can be um trusted and that there's that integrity piece.
• 9:10
  SPEAKER_01: Um, you know, I I think about it, I I don't know if you remember way back to when you were in school.
• 9:16
  SPEAKER_01: I I remember my first course, they talked about, you know, um making sure you have trust and that uh transparency, you know, in fact and appearance.
• 9:27
  SPEAKER_01: And to me, that appearance piece, it just struck a chord in me.
• 9:31
  SPEAKER_01: That's the differentiator, right?
• 9:33
  SPEAKER_01: You have facts out there, but does it look right?
• 9:36
  SPEAKER_01: And if it doesn't look right, God knows today things don't look right sometimes.
• 9:41
  SPEAKER_01: So we have to make sure we're there as that steward, making sure we have both those elements.
• 9:46
  SPEAKER_01: And for me, that meant a lot.
• 9:48
  SPEAKER_01: I thought, well, I I really have to hold things to a higher level.
• 9:52
  SPEAKER_01: So for me, it's it's that public trust, right, that we have, it's being stewards, and um, it's definitely um sets you apart, I think, from others that are out there in other professions um that are out there.
• 10:06
  SPEAKER_01: So really key.
• 10:08
  SPEAKER_01: And I uh just this little story.
• 10:10
  SPEAKER_01: I'm all about stories.
• 10:11
  SPEAKER_01: I talked to a student a couple years ago, and she was in a Mac program at um Davis, and she's like, I I'm a finance major, but I'm getting my accounting degree because I want people to listen to me.
• 10:24
  SPEAKER_01: They don't listen to me today.
• 10:26
  SPEAKER_01: She said, But if I'm a CPA, they're gonna know I have that trust piece, that integrity, and they're gonna actually, when I say something, they're gonna listen.
• 10:34
  SPEAKER_01: So I thought that was kind of interesting from a young professional, but um, it's definitely the the stewardship and the the integrity piece that's I think key.
• 10:45
  SPEAKER_00: That's that's a really good story because I think it is the uh uh that's it's very perceptive, I think.
• 10:51
  SPEAKER_00: The uh one of the things that I always feel is a is a great thing about being a CPA is that there is that trust, but it needs to be enforced as well.
• 11:02
  SPEAKER_00: So if you're a CPA and you're messing around, the board of accountancy will uh get on you and discipline you.
• 11:08
  SPEAKER_00: Um and we you know we obviously see that, you know, more often than we anybody would like.
• 11:14
  SPEAKER_00: But at the same time, uh nobody's gonna take away your MBA or nobody's gonna take away uh it, you know, your I don't I don't know what else.
• 11:23
  SPEAKER_00: I mean you could get fired from a job, but being, you know, uh the threat of you know having your license taken away uh is is huge.
• 11:34
  SPEAKER_01: It that's a really good point.
• 11:35
  SPEAKER_01: There is that enforcement piece, and it's it's real out there.
• 11:39
  SPEAKER_01: I mean, I see enforcement reports and um names at times of people that write around there.
• 11:45
  SPEAKER_01: So it is um, there's not other professions that have that.
• 11:48
  SPEAKER_01: You're right.
• 11:49
  SPEAKER_00: How do you become one?
• 11:50
  SPEAKER_00: Nobody knows this process more than you do.
• 11:53
  SPEAKER_01: Well, and I learn every day different nuances.
• 11:56
  SPEAKER_01: So um, you know, I think about the three E's, and we talk about that a lot.
• 12:01
  SPEAKER_01: We talk about the education piece, you know, your education has to have that element of accounting concentration, um, the experience piece, so you have to work in under right someone that uh CPA, um, and then you have to have the um ethics, right?
• 12:19
  SPEAKER_01: The ethics piece as well.
• 12:21
  SPEAKER_01: So there's an exam.
• 12:22
  SPEAKER_01: Actually, there's four E's.
• 12:24
  SPEAKER_01: The exam, if you um, because that's the qualifier, right?
• 12:26
  SPEAKER_01: You have to take the the exam, and if you pass that and you have the experience in education, then you can become a CPA.
• 12:32
  SPEAKER_01: So there's all those pieces.
• 12:33
  SPEAKER_01: And so it's going to be hinging on kind of those four elements, it's going to be a bachelor's degree with an accounting concentration.
• 12:44
  SPEAKER_01: And that accounting concentration, today it's 24 units of accounting and 24 units of business.
• 12:50
  SPEAKER_01: The California Board of Accountancy is working on that.
• 12:53
  SPEAKER_01: And academics, firms, they're influencing and informing what that looks like.
• 12:59
  SPEAKER_01: Probably will look similar to that, but that's really the education piece.
• 13:03
  SPEAKER_01: So a bachelor's degree, they're not hanging their head on units, it's bachelor's.
• 13:08
  SPEAKER_01: And um, then it has um two years of experience, right?
• 13:13
  SPEAKER_01: Um, working under a CPA.
• 13:15
  SPEAKER_01: And so that's kind of the foundation.
• 13:19
  SPEAKER_01: And from that, there are different pathways.
• 13:22
  SPEAKER_01: So the reason the change was really to provide something that was more simple, not necessarily as complex, and something that was more flexible because we know people are coming into the profession many different paths.
• 13:35
  SPEAKER_01: And so we wanted to say, we want to make sure that we have a path that makes sense to you.
• 13:39
  SPEAKER_01: And it doesn't have to be necessarily the 150 units.
• 13:43
  SPEAKER_01: So, like I said, foundation bachelor's in two years, you can come in and you can take a master's, and that shaves off a year of experience.
• 13:51
  SPEAKER_01: So you'd need one year of experience.
• 13:53
  SPEAKER_01: They're looking at if you have a certificate of some sort, um, whatever that may be from a university or a community college, that may shave off eight months of experience, and you may only need, you know, one year and two months, right?
• 14:08
  SPEAKER_01: Or four months.
• 14:08
  SPEAKER_01: What am I doing?
• 14:09
  SPEAKER_01: I'm I know math and four months.
• 14:11
  SPEAKER_01: So um they're trying to to do this and to look at it in a much more flexible way.
• 14:17
  SPEAKER_01: So that's really great news for anyone that's coming into profession.
• 14:21
  SPEAKER_01: Um, so that's what it's it's going to be going forward.
• 14:24
  SPEAKER_01: And many of the states are moving in the same direction.
• 14:27
  SPEAKER_01: There's 14, I think, that have passed or are in the the um the legislative process.
• 14:33
  SPEAKER_01: We're in the legislative process.
• 14:35
  SPEAKER_01: And so by January 1st, 2027, the new pathway, um, if everybody everything goes well, will come into being.
• 14:44
  SPEAKER_01: And then that will be um the pathway going forward, and then you can adjust it based on kind of how you're coming in to the profession.
• 14:54
  SPEAKER_01: So it's really good news, really excited about it.
• 14:56
  SPEAKER_01: It does create much more um simple pathway, not easier, and it does provide uh more flexibility, which we're excited about.
• 15:06
  SPEAKER_00: Yeah, and that's gonna be really important uh going forward because uh well, and you you guys, uh Cal CPA and you, Denise, uh have been kind of on the pushing edge of this.
• 15:16
  SPEAKER_00: I think you are at the very beginning, even though the legislative process is taking a little longer um and other states have actually passed it.
• 15:23
  SPEAKER_00: Uh you have actually been been there from minute one.
• 15:27
  SPEAKER_00: So that that that's a really good thing.
• 15:29
  SPEAKER_00: And it's such a hodgepodge and mix-up of national standard with state standards that that it is uh unduly or has been unduly complex in in the past.
• 15:41
  SPEAKER_00: So I'm glad you said simple isn't easy, though, because it isn't.
• 15:44
  SPEAKER_00: Uh and you know, just from you know, from my own uh, you know, anecdote library, you know, the that exam is just crazy.
• 15:53
  SPEAKER_00: It's uh and back when back when I took it, um, it was two full days in a big fairground setting in a showroom.
• 16:02
  SPEAKER_00: Uh, we had paper and pencil and the stupid small little calculator that couldn't do anything, which you didn't really need because you the comprehension was much more important on that.
• 16:14
  SPEAKER_00: Um, and I took the very last instance of the paper and pencil exam uh before it was switched.
• 16:20
  SPEAKER_00: Yeah, yeah, before it was switched to the computerized version.
• 16:23
  SPEAKER_00: So I I was uh very motivated to uh to pass the darn thing because I didn't want to take a chance on you know a new unproven method.
• 16:31
  SPEAKER_00: So, okay, uh just a piece of trivia uh out in here.
• 16:35
  SPEAKER_00: Um Illinois and now California and California CPA.
• 16:40
  SPEAKER_00: Do you know what the where the first CPA license was issued?
• 16:46
  SPEAKER_01: I only know because I looked it up, but I want you to say because you know.
• 16:52
  SPEAKER_00: Okay, well I had to look it up too, because nobody nobody would know.
• 16:55
  SPEAKER_00: I uh except the guys over in New York City.
• 16:59
  unknown: New York City?
• 17:01
  SPEAKER_00: New York City uh back in 1896, uh 130 years ago or so, they were the the first ones to mint a certified public accountant.
• 17:11
  SPEAKER_00: So there you go.
• 17:13
  SPEAKER_01: Um I think it's pretty cool too.
• 17:16
  SPEAKER_01: How it all came about.
• 17:19
  SPEAKER_00: Uh bonus question.
• 17:20
  SPEAKER_00: So 1896.
• 17:22
  SPEAKER_00: That was before which five states were admitted to the US?
• 17:27
  SPEAKER_01: You know you go.
• 17:30
  SPEAKER_00: Okay.
• 17:31
  SPEAKER_00: I mean you'll know the last two uh Oklahoma, New Mexico, Arizona, Alaska, and Hawaii.
• 17:39
  SPEAKER_01: I did not know the Oklahoma.
• 17:42
  SPEAKER_01: Yeah.
• 17:43
  SPEAKER_00: When you get in that middle section there, it's a little tough.
• 17:45
  SPEAKER_00: Yeah.
• 17:46
  SPEAKER_00: I know you could get you could guess Hawaii and Alaska, but yeah, those two.
• 17:50
  SPEAKER_01: But yeah, I wasn't aware of Oklahoma.
• 17:51
  SPEAKER_01: Because you think about that as the beginning, right?
• 17:54
  SPEAKER_01: The breadbasket type of right, absolutely.
• 17:58
  SPEAKER_00: Okay, so now getting a little serious again.
• 18:00
  SPEAKER_00: Uh what in your mind is the difference between an accountant, quote unquote, and a CPA?
• 18:09
  SPEAKER_01: Mm-hmm.
• 18:11
  SPEAKER_01: So when I think of accounting, I think of like the language of business.
• 18:15
  SPEAKER_01: And I think a lot of us say that, right?
• 18:17
  SPEAKER_01: It is a language of business.
• 18:18
  SPEAKER_01: If you understand that, um, you understand kind of the business runs, you can connect the dots, you can opine on, you know, the financial position, the valuation.
• 18:29
  SPEAKER_01: I mean, what you do is a whole nother world beyond comprehension to me.
• 18:33
  SPEAKER_01: So if I needed any valuation, I would say, Ben, what do I need to do?
• 18:37
  SPEAKER_01: Because it's it's all, I mean, there's so many different um specialties within the profession.
• 18:44
  SPEAKER_01: You think about doctors and you know, there's oncologists, you think there's podiatrists, there's all different same in accounting.
• 18:52
  SPEAKER_01: So when I go to, you know, talk to people, they're like, Can you do my taxes?
• 18:55
  SPEAKER_01: And I, I don't do my own taxes.
• 18:57
  SPEAKER_01: So no, I cannot do your taxes, right?
• 18:59
  SPEAKER_01: So um forensics, the valuation, there's there's so much that within accounting, right?
• 19:06
  SPEAKER_01: And within what we do.
• 19:07
  SPEAKER_01: And so I would say that language of business and understanding the fraud aspect and valuation, so many pieces.
• 19:13
  SPEAKER_01: The difference to me, and this may sound kind of strange with the CPA, is I mean, definitely that additional scrutiny, right?
• 19:20
  SPEAKER_01: The trust.
• 19:20
  SPEAKER_01: I think of it as the conscience of business, right?
• 19:23
  SPEAKER_01: Because we're the ones that really have that integrity trust and the public um perspective piece that um, you know, it doesn't necessarily have to be there if you do accounting.
• 19:35
  SPEAKER_01: So both important, um, but different, somewhat different and a nuance to it, if that kind of makes sense.
• 19:42
  SPEAKER_00: Oh, uh absolutely.
• 19:43
  SPEAKER_00: And I think that is the, you know, aside from certain certain uh additional things like we have to go through the process of becoming a CPA, which is not easy, uh, I totally agree with you that you know we're we're kind of relied upon to be custodians of financial truth.
• 19:59
  SPEAKER_00: And when we've kind of already talked about it, when things go wrong, like you get you know, an FTX or a Thoranos or an Enron.
• 20:09
  SPEAKER_00: I mean, thinking back to some of some of these just financial failures and financial governance failures, well, they blew up one of the big was it five, big five accounting firms at the time.
• 20:20
  SPEAKER_00: The the entire firm blew up because and I'm not uh not relishing that at all.
• 20:26
  SPEAKER_00: Uh partly I was trying to find a job at the same time as all those people were oh it was great.
• 20:32
  SPEAKER_00: Um you were stuck in that, yeah.
• 20:34
  SPEAKER_00: Crazy.
• 20:35
  SPEAKER_00: Um but the uh but the fact is that there there are consequences.
• 20:42
  SPEAKER_00: Um so even though some of the some of the best uh accountants that I know aren't CPAs, in fact, my business partner isn't a CPA, and he's literally one of the smartest guys, one of the smartest uh accountants that I know.
• 20:57
  SPEAKER_00: And you know, thankfully I know him super well, and he's you know of the you know utmost integrity, etc.
• 21:04
  SPEAKER_00: But you don't always know, you know, with without that sword hanging over your head.
• 21:10
  SPEAKER_01: Exactly.
• 21:11
  SPEAKER_01: And you think about even when um during COVID, so many business owners reached out to their what CPAs and said, Can I get a PPP?
• 21:22
  SPEAKER_01: Who do you know?
• 21:24
  SPEAKER_01: I trust you, you've got connections.
• 21:26
  SPEAKER_01: I mean, there was a lot of power in that, just with that that element of it.
• 21:31
  SPEAKER_01: And I I think too, I think about Jillian fan who told me she's I do taxes, but my clients call me for everything.
• 21:38
  SPEAKER_01: I mean, they call me their son's going to college, they call me about this because they trust like I know people or I know the answer.
• 21:48
  SPEAKER_00: Right.
• 21:48
  SPEAKER_00: Well, it it is it is funny getting the the very random questions, and it is very heartwarming like, oh, you're coming to me for this.
• 21:55
  SPEAKER_00: That's great.
• 21:56
  SPEAKER_00: Thank you so much.
• 21:57
  SPEAKER_00: No, I don't know anything about taxes.
• 21:59
  SPEAKER_00: It's you know it.
• 22:00
  SPEAKER_00: is it it kind of feels like sometimes uh a a you know where where a doctor has to you know look at oh can you can you look at this growth on my you know on my back okay i you know i i'm a dentist like exactly you know sometimes you're so right is because you're trusted right yeah yeah it does feel good except for the growth part that's not so yeah exactly so moving on uh recently i was listening to a podcast and an influencer was saying that if a client is looking at your credentials you've already lost and this was in terms of a CPA license now that was for a very particular situation I think he was saying the when you're looking at yeah uh pitching to prospects and that kind of thing uh but there is a real question out there about why an individual should earn a CPA license as a professional or why you need to find one maybe as a business owner versus a bookkeeper slash accountant slash whatever why why does a business owner care?
• 23:07
  SPEAKER_00: What what are your thoughts?
• 23:10
  SPEAKER_01: It's interesting when I read that comment I thought to me it somewhat means you have to be acting it right I mean if if you're if you're kind of looking at you should all embody that right in what you what you do um I would say from a business owner perspective the trust denise I'm trying I I love it I love it the the trust piece to me is is so important and I guess that's an element if I was a business owner my parents were both of them were entrepreneurs so they they had different businesses and that's where actually Barb Webb was our CPA.
• 23:45
  SPEAKER_01: That's where I um just learned what a CPA was because both of them had a a CPA that they could trust right to answer some of their questions and tell them you know kind of what they needed to do to make sure they you know did what was right and um then also understood what they could do and how um you know from a tax perspective for sure they could position things.
• 24:08
  SPEAKER_01: So um for me it's it's it's definitely I mean if I was a business owner I'd have one in my corner because of the connections the trust and just the valuation the understanding and the knowledge that is that is quite frankly there.
• 24:23
  SPEAKER_01: So um I think everybody needs um one in their corner.
• 24:28
  SPEAKER_00: Well and that's interesting it's you know it sounds like you're you're you're certainly not refuting the utility of say like a good bookkeeper for example and you know I'll give a shout out to to Morgan and Joanne are our good bookkeepers because guess what I don't do my books either.
• 24:44
  SPEAKER_01: Right.
• 24:45
  SPEAKER_00: That's not that's not my best usage.
• 24:47
  SPEAKER_00: Neither do I do my taxes just like you because for me I I don't want to learn how to do one tax return a year.
• 24:55
  SPEAKER_00: So absolutely having that person who's who you just rely on is is is huge.
• 25:01
  SPEAKER_00: So now now back to a little bit of a you know sarcastic question again.
• 25:08
  SPEAKER_00: What all business owners want to know why does it cost so much to get your taxes done?
• 25:14
  SPEAKER_01: Yeah I'm sure I'm sure and I I I would say to you know when we need to do a better job all of us we you know when you say right of saying what is the value I mean we talked about this a bit but what is that value that strategic that advisor piece we don't do a great job of that as CPAs right we talk a lot about um the hours and but really what is the value?
• 25:40
  SPEAKER_01: So I think we all need to do a better job with that.
• 25:43
  SPEAKER_01: And you know from the tax perspective I mean I think you could be charged$1500 or$1,000 to$20,000 or 30 right it just it depends.
• 25:53
  SPEAKER_01: And I know so many CPAs that are integrating the advisory in wealth management investor piece into that and looking at here's one element, but we could do much more if we can advise you on a um more of a life cycle right of when you first started the investment piece we can connect you to someone on the insurance side.
• 26:15
  SPEAKER_01: So it's really all those pieces which I see a lot of firms are moving to that the valuation piece if you're going to sell your business there's so many elements there.
• 26:25
  SPEAKER_01: So to me the tax doing your taxes is one piece but the value is all the other wraparound services that are so much more integral to what you're doing from a um you started out and now you're going to retire.
• 26:40
  SPEAKER_01: It's all those pieces that to me is the is the real value.
• 26:44
  SPEAKER_01: And that's where your CPAs can come in with your other advisors and really create that total wraparound services value proposition.
• 26:53
  SPEAKER_00: Yeah I I absolutely agree and so when I think when a C CPA or I mean just say any tax repair or whatever or on on the audit side it has to be a CPA when they're doing the minimum job that's that's fine but they're not adding all the value they could or should and so that probably does feel a little expensive then.
• 27:13
  SPEAKER_00: So when they're being that strategic partner with you able to answer some questions and provide you the information with which to answer those questions you know you you you get a lot more out of that role.
• 27:26
  SPEAKER_00: And your CPA sees a lot of businesses not just yours.
• 27:31
  SPEAKER_00: And so that that ends up being a real advantage for us.
• 27:36
  SPEAKER_00: I I see dozens and dozens of businesses and I mean that's that's what makes it interesting for me.
• 27:41
  SPEAKER_00: And so I get to compare what is this company doing versus that company and seeing how each one creates value etc and you know we can while we can't tell you about the other company we can take some of the same lessons that we we learned good bad or ugly and apply it to you.
• 27:57
  SPEAKER_01: That's a really good point too it's what you see out there all the different organizations there are companies there are and then you know how how are they looking at the valuation what have they done different that you have that that no one else has right and it could be in three different industries and five and it's and and you talk to individuals that are doing the same work.
• 28:19
  SPEAKER_00: So you have so much knowledge and expertise that yeah that you just don't have from one individual you know siloed event so to speak right well a siloed event I don't know maybe that leads me to singularity which leads me to AI which leads me to so how does the CPA that was a good move there I love that Ben.
• 28:44
  SPEAKER_00: Swoop uh how how do how do CPAs now remain relevant in the age of AI?
• 28:51
  SPEAKER_01: You know can can we just ask chat GPT to do our books if we're a business owner I mean I I get asked that a lot by the students like am I is my am I going to have a job is my job going to go away and I would say if you're not using AI or you're not using you know an element of that you're you will be irrelevant because you have to know how to use it.
• 29:14
  SPEAKER_01: But I would say for um uspecially having the professional skepticism we have just by the nature of what we do in the analytical piece, we're in a good spot because we're going to be able to provide that additional value when you look at everything that AI is doing.
• 29:30
  SPEAKER_01: I mean think about AI's creating receipts I mean you can create a fake receipt have you seen some of them out there?
• 29:36
  SPEAKER_01: Like a restaurant receipt my son did my son's does IT audit and he loves the auditing piece um and he's like you can create receipts now we have to look at that and make sure that that those are real receipts right so I think from for our perspective just having that professional skepticism I think we're in a really good spot to be able to analyze and provide um more clarity on AI and how you use it out there than any other profession.
• 30:07
  SPEAKER_00: That that's really interesting because we we can provide our you know our information experience wisdom and overlay it over the facts that AI is able to do so quickly and so well it's really the combination of the two things that really gets it done not just the one or the other.
• 30:27
  SPEAKER_01: Yeah and I I think it's it's who we are because we are that you know we have that analytical piece by nature of what we do we look you know for different patterns or we look how things can be applied.
• 30:40
  SPEAKER_01: And that to me is what we need to do when we look at AI because it's great it's a great tool.
• 30:46
  SPEAKER_01: I use it all the time but I wouldn't just totally rely on it right I would have to go and do some due diligence source checking fact checking but it's how we look at things in that skepticism that I think is going to be key especially when companies are using the AI all the time right well because they're they're fact checking us right I mean that's that's part of it.
• 31:11
  SPEAKER_01: They want to make sure that we're there they are getting good advice which they generally are however you know a lot of people out there are kind of DIY I mean we you know I'm I'm in Silicon Valley we have a few engineer clients um let's just say and you know they're a lot of engineer people know how to figure things out so they're gonna try to figure it out and a lot of them can um but that doesn't mean they've done it a hundred times like we have so it's there is that experience gap that still is necessary to bridge yeah exactly yeah and the expertise you you have you could probably spot something you probably could look at something and just spot like something doesn't look right or doesn't feel right to me.
• 31:54
  SPEAKER_01: And that's just comes with doing it over the years and understanding it.
• 31:59
  SPEAKER_00: You know and I if I was just a constantly and again recently reminded like in other professions like if you read a contract most people can read a contract and understand what's there more or less uh and you know CPAs do this all the time however it really takes an attorney to recognize not just what's there and the implications thereof which they of course can do but also recognize what's not there.
• 32:26
  SPEAKER_00: So CPAs can do the exact same thing when they look at a financial statement and realize okay yeah all the things there look okay but where's the deferred revenue or where's this where's that so that you know we we we can see the holes whereas if you don't have the experience you don't see the holes no so true and that's I I remember when I first started out I had this boss and she I said to her how do you know like I could hand her something and she'd be like something's not right right I can see it.
• 32:56
  SPEAKER_01: Yeah and I thought I said how do you know that she goes I just I know it after doing it the years looking at different you know statements and different information she goes you'll know it too one day and I did right it's but it's uncanny it just is that that's such a common common common experience I I and I think that's great.
• 33:16
  SPEAKER_01: You know I I I definitely had a a uh mentor and boss who you know would I'm sure we had exactly word for word that conversation yeah and it's okay I thought can I be like that one day I hope so hey turns out turns out you can uh okay just just just a couple more of the real questions so how can a CPA literally increase the value of a client's company I mean definitely you probably can know this best from a valuation standpoint right maybe a setup yeah say all day long I mean just on looking at the the financial statements how to analyze it right pull it together um also to see some hidden patterns and that that aren't out there I think we've we've talked about it all but definitely from the valuation standpoint I mean you're the expert on that and and from fraud too I think there's a forensic piece to it as well um in in looking at the information and auditing it seeing where there's gaps it's all all there.
• 34:25
  SPEAKER_00: Yeah oh and and you hope hope you don't have to use the forensic skills but they they are there uh if and if and when necessary so you know thinking about things like you know effectively using assets and keeping working capital right sized and analyzing margins what you know product lines or uh yes sale uh revenue lines are are really uh going well or not going well um all that kind of stuff just from the foundation up uh that really helps in fact I'll say one of the things especially working with small and mid-sized companies one of the things is it's the price of entry to have good information.
• 35:11
  SPEAKER_00: So if you ever want to sell your business if you have not great books that could just be a deal killer right off the top uh whether or not you have an otherwise good business uh they you haven't been able to communicate that because the books suck.
• 35:27
  SPEAKER_00: So uh we have to get over it.
• 35:29
  SPEAKER_01: Yeah that that's a really good point that people don't think about until it's too late.
• 35:35
  SPEAKER_01: Like you can't go back and do the evaluation or have that you know the information or the trends if you didn't do it.
• 35:42
  SPEAKER_00: So that's a really good point to be thinking about oh yeah the information capture part is is is huge.
• 35:48
  SPEAKER_00: And you know change in value can be from you know from uh a negative to a positive or you know the the having bad books is a very negative impact on value however you can alleviate that uh this has nothing to do even with you know going into a new market or whatever and increasing your value that way when you said something effectively using assets I think that is key people don't even really think about that what's the best use as an individual you have to think about it and as an organization absolutely absolutely so let's say somebody owns a business and it's growing it's becoming more complicated they probably need some additional advice because of all those things how do you how do they go out and find a CPA and how do they know if they're any good I I think it's word of mouth I don't know to to me I mean I I usually ask if you have good people in your your life you know I I ask they know good people so I I always I always ask word of mouth you know do you know somebody you know you think about it even with plumbers or electricians I always ask like do you know somebody good because you know if they know what they're doing they know other people who know what they're doing.
• 37:09
  SPEAKER_01: So I I think word of mouth is is great.
• 37:13
  SPEAKER_01: I mean you can come to us there we have so many and I'm not just saying this because you know I mean this there are so many people I would trust and ask you know do you know this person?
• 37:23
  SPEAKER_01: So I think it's it's getting engaged and and really being able to have that network of trusted individuals.
• 37:30
  SPEAKER_00: Oh and gosh I mean you you be thousands of CPAs and so you you know first off you know where they all have skills in common but also where they have differential skills where they have something unique to provide that would be an exquisite fit with a particular client or you know that they they need the superpower over here because that'll solve the problem for them etc etc and everybody's different just just like well just like everybody all the CPAs are different.
• 37:58
  SPEAKER_00: And you know I've never met a perfect profession that is so giving that wants to give to others and I mean the number of people that help on the tax side the um Vita programs you think of financial literacy we have so many people that give back that way and teach and help yeah yep yep so I mean I will say sometimes to our detriment you know I'll take a call from anybody and talk through their situation whether or not that ends up being a client and and I am not in any way unique in that uh so many of the people I know are are just like that.
• 38:34
  SPEAKER_00: And I think you know in the note that I made for myself the uh your point about successful people or people of high quality you know always hang out together right so they will I got a guy is is a real thing and actually that's a really positive thing.
• 38:53
  SPEAKER_00: You know that reputation kind of can hold you together.
• 38:56
  SPEAKER_00: And you just want to make sure that you're picking the right quality of people to ask when you're asking so obviously professionals of similar quality are going to flock together and you just got to make sure you're you know picking eagles and not pigeons.
• 39:12
  SPEAKER_01: So true so true.
• 39:14
  SPEAKER_00: Absolutely I I actually do have a couple of get to know you things if you if you don't mind doing those.
• 39:20
  SPEAKER_00: Sure.
• 39:21
  SPEAKER_00: Um well tell me something that's not on your LinkedIn or website profile I love to do charcuteries.
• 39:32
  SPEAKER_01: I love that do charcuteries like charcuterie boards like charcuterie boards for holidays I love to do those okay find ways to do them better and it's kind of a a strange little thing and I love to make scones I'm trying to perfect scones baking for me is in gardening is like um hiking is a a way to just you know unplug.
• 39:56
  SPEAKER_01: Absolutely if you come by Ben I'll make you a coffee chocolate chip scone.
• 40:01
  SPEAKER_01: There you go.
• 40:02
  SPEAKER_01: And then we'll go for a hike perfect and then we'll go for a hike to wear it off.
• 40:05
  SPEAKER_00: Awesome I think some of this we've already covered you know I I I always ask you know why is what you do rewarding to you you've covered it a little bit but you know is there anything else you wanted to add to to what you've said already I believe in the importance honestly of the CPA to the economy and I believe in what we do a hundred percent a hundred percent and I will fight for it to the end well you know what next time we uh are you go on a retreat or something we can get those matching CPA tattoos uh maybe uh not a not one that is actually in your skin but just a oh a temporary tattoo okay the temporary tattoos there we go ma'am all right uh so we're all trying to improve ourselves what are you reading right now oh I'm reading three books right now I have a lot going I'm reading the experience economy mindset and abundance okay very cool yeah what are you reading I don't think I've actually read any of those no don't even what's your favorite book maybe we can sell what's your favorite book let's see what what is my favorite book oh oh I really liked um good to great uh uh and uh I've really been kind of leaning into the four hour work week by Ferris lately it's good those are that that's that's a good one i i i like it so much uh from the philosophical standpoint more really than you know actually the the idea of a four hour work week you know i i never want to work four hours i want to work i would love to work 40 hours a week that's that's the goal i think for most of us cpas but yeah we're getting better we are i think we are at least we are i mean i'll say you know pat on the back we are in my firm and i and i know in many people's firms they they are not doing 80 hours a week you know constantly which right i would say if you're getting closer to 40 put it out on linkedin like we are getting like we need more and more of that so denise where can people find you uh linkedin so you can find me denise leducreming link in to me you can email me honestly denise.fremming at calcpa.org and i might not get back to you within 24 hours i try but i will get back to you always you can count on it i i was honestly very surprised when i actually got a response from you very quickly on you know the very first time i sent an email to you i'm like ah you're not gonna you know respond to to you know one of 50 000 members uh but you did i and i can't say whether it was 24 hours or not but it was quick uh so i tried to jump everybody every email is important all right all right thank you denise thank you so much for joining us and it's really been a pleasure thank you and thanks for everything Ben I am um I'm a fan of yours so everything that you do um you spoke people speak very highly of you so thank you for being in our world we appreciate it absolutely all right thanks Denise talk to you thank you listeners thank you for tuning in this has been an episode of Max Value find us on YouTube Apple Podcasts and other streaming services please like subscribe and follow and we'll see you for the next show