Earmark Podcast | Earn Free Accounting CPE

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Blake Oliver, CPA: [00:00:00] Welcome back to the earmark podcast. I'm Blake Oliver. So there's two wars going on trade fights, tariffs. Pick your geopolitical crisis. And none of that is what's keeping finance leaders up at night. My guest talks to hundreds of CFOs and controllers around the world. And he says there's one topic still beating all of it. You can probably guess which one. Mike Deprisco is the CEO of IMA, the Institute of Management Accountants. There are 107 years old with 125,000 members. So when he says the conversation about AI has changed, he's hearing that from a lot of people. And he's got a pretty good idea why the payoff isn't showing up yet. Let's get into it. So my first question for you is, given everything that's changed over the last couple of years, what is what is on their minds? What is preoccupying them?

Mike DePrisco: [00:00:53] Yeah, it's a great question. And certainly you're right. I do get to speak to hundreds. I don't know about thousands of finance leaders and CFOs as I travel in different parts of the world. And look, there's a lot that is top of mind for for leaders these days, whether it's geopolitical issues, there's two wars going on trades, tariffs, all kinds of things. But but I think still the number one topic that is that is top of mind for folks is, is AI. And, you know, it's funny over the last couple years to see how the conversation among leaders as it relates to the topic of AI has shifted from, hey, what is this stuff? And should I be using it to, hey, I'm using it and how do I get value out of it? And I think that's what I've seen over the last couple of years, that the biggest shift has been, hey, we're deploying AI, we're investing in it. Um, but we're not seeing the promised return on investment fast enough. Um, and they're starting, I think, to be skepticism about, you know, when will I see that return and how quickly will I, will I see that return? So I think that's what I've been hearing quite a bit about in my conversations.

Blake Oliver, CPA: [00:02:17] Yeah. Same thing on my end. We've got these escalating costs for AI because it shifted the the cost model has shifted seemingly overnight from we're paying 20 bucks a seat, maybe up to 100 bucks a seat. But now, um, like anthropic and OpenAI are charging in excess of whatever usage you get and we're paying for tokens now. So it's like usage based pricing, right? And I've been reading in, you know, the trade publications, especially on the finance side, like cfo.com about how CFOs and controllers are just struggling to keep tabs on this to keep control of these, like escalating AI costs and companies.

Mike DePrisco: [00:03:04] Yeah. And the challenge is, you know, as you know, we're still in early days, right? I mean, we're still in nascent days. Um, you know, as it relates to the technology. So I do anticipate that a year from now, it'll be interesting to see if we're having the same conversation. But, but yeah, I think that for a lot of organizations that, you know, have finally made that decision to step in and, and I think accounting and finance professionals have were somewhat of a laggard in stepping in to, to, to AI, uh, use. I think it's just the nature of that role perhaps, and maybe that profile of person sitting in a seat to, to be a little more risk averse, particularly when it comes to technology that can impact financial statements, reporting compliance, those kinds of things. So it's totally fair. But now that folks have made that decision to lean in and there's a lot of great use cases, I think, out there for how AI is driving some efficiencies, some productivity, some value creation. But, but there needs to be tangible evidence of return, and it needs to happen much more, much more quickly than I think many folks are, are seeing.

Blake Oliver, CPA: [00:04:21] So do you have any ideas for how we can actually measure that ROI? Like, it seems kind of difficult because, you know, we've got all these input costs, right? We got the tokens, we can, we can measure that cost, but then to actually like assign that cost to some sort of outcome seems like really difficult.

Mike DePrisco: [00:04:44] Yeah. Well, no, I think that's, that's a fair question. I think, um, that's exactly the type of, uh, types of questions and information that we try to provide through through the various education, you know, and networking opportunities that we provide. I think there are some clear ways or KPIs that you can look at as a finance leader to determine if you're getting some return. Yes, there's productivity measures. There's efficiency measures that you can look at. Are you closing the books more quickly? Are you reducing the number of errors that you may be that you may be encountering on a month to month basis? Are you improving your accuracy in forecasting, which leads to better decision making, right, and better allocation of resources that you might have? I think that is certainly one that, uh, many finance leaders are, are very, very concerned about. Um, and then, of course, are you taking care of your customers? And are you leveraging the technology in a way that allows you to provide a better customer experience and respond to the. The pains and challenges that your customers are telling you exists, whether they're internal customers in terms of, you know, the people that work across the organization who are trying to get work done better, faster, cheaper, or is it customers that you support in your business who are coming to your organization and looking for, um, you know, seamless transaction capability or search ability, those kinds of things or, um, you know, in the case of, um, financial institutions that are assessing, uh, transactions, you know, are we leveraging the data in a way that limits the number of times that a customer's, um, account is put on hold because there's a false fraud flag being raised or something like that.

Mike DePrisco: [00:06:43] So there's, there's some of the things that you could, um, look to and point to, to, to, to see if you're actually gaining, Um, some return on that investment. Um, and then I know that, you know, many of the organizations that we work with are starting to, to look at those measures as, as a way, right to, to say, is it working or is it not working? You know, and should I continue to do this and scale and grow and invest in this technology?

Blake Oliver, CPA: [00:07:12] Let's take a step back, Mike. Um, for those who are not familiar with the Institute of Management Accountants, who do you serve? And, uh, how did you land in this seat running the organization?

Mike DePrisco: [00:07:25] Yeah. Um, so I am a has been around for, gosh, about 107 years. We were founded in 1919, um, in the United States. Uh, today we're a global organization. We have about 125,000 members, um, more than 100, excuse me, more than 150,000, uh, CMA certified management accountants. That's our that's our signature certification. We represent accounting and finance professionals in business. So the individuals that are working side by side with various functions throughout an organization to help that organization perform, to achieve its strategy to assess and mitigate risk and to really optimize value creation for their customers. So we like to say that IMA sits at the intersection of accounting, finance and business strategy. And, and really, you know, from a title perspective or role perspective, um, you'll find many of our, our practitioners in the seat of whether it's CFO, controller, VP of finance, analyst budget, you know, budgeting person, those kinds of things. They're, they're the typical kinds of roles that, that you see us see our management accountants and our practitioners in.

Blake Oliver, CPA: [00:08:47] So when I took, uh, my accounting coursework to get my CPA. There was a course, uh, called, uh, managerial accounting. Yeah. And I was excited to get into that because, you know, I, I like, uh, I like the idea of doing controller work, doing CFO type work. Right. I didn't see myself as an auditor. Right. Yeah. And when I got into that class, uh, what I found was that the class was almost entirely about cost accounting.

Mike DePrisco: [00:09:17] Yeah.

Blake Oliver, CPA: [00:09:18] And it was cost accounting. Old school cost accounting. Right. Like we're in a factory and we're making widgets and we are allocating, you know, overhead, indirect, uh, all this stuff to like figure out what's the cost to make our widget. You know, and then stuff like, uh, oh, okay. You know, should we optimize this part of the production line? Like how can we optimize it? Whatever that sort of thing. Um, but that is not what managerial accounting is these days. Is it?

Mike DePrisco: [00:09:50] Well, look, what you described is, is, is very much where management accounting had its roots. And it's important work, no question about it. But I think like most professions, it has evolved and has shifted as, as businesses have shifted and the needs of organizations and the competitive forces at play have changed and evolved. And I think that when I talk to our practitioners and when we speak about, um, the type of work that's being done, it, it's very much focused around, uh, strategic work. How are you partnering with the business to unlock new business opportunities to assess new markets, to determine whether new products and services have, uh, are meeting the demands of the customers that you're, that you're aiming, uh, to, to, um, to, attract to your organization. These. This is the type of work that management accountants do. They take data that comes out of. Whether it's AI machines or other types of ERP systems and forecasting hubs that you might use. And they interpret it and they helped other functions within the organization solve problems and make decisions about that data in terms of how it can help drive, uh, solving a problem for the organization, for the customer driving value for the organization. So I think that we've come a long way from that cost accounting role. It's still important. And understanding all of that is important. But the shift now to more business acumen, strategic focus, performance risk, data analytics is where I think the, the role of management accounting, um, continues to go. And I think we'll only be accelerated, quite frankly, by new technology because a lot of the, a lot of the mundane tasks, if you will, that whether you're in public accounting or in corporate. Um, corporate accounting, um, a lot of the mundane tasks are going to be solved by or completed by technology. So it really then changes the role of the individual accountant to one that leverages that information to help inform decisions in an organization.

Blake Oliver, CPA: [00:12:10] That's really refreshing to hear because, uh, it feels like accounting education, the kind we get in school. Right? Uh, not necessarily the continuing education that you're providing is just so still rooted in that old cost accounting world of, you know, tangible assets. And I have this, uh, soapbox I like to get on and I'd love to get your take on it. Right. Um, which is that we're still teaching accounting like we live in an industrial world. When you go to school and you learn accounting, you learn the old stuff, right? Especially when it comes to managerial accounting, it's like all cost accounting. Yeah. Right. Like very little strategy. Uh, and then when you look at like our accounting standards and GAAP and all that, so much of it is really all about tangible assets. And we don't really touch the intangibles nearly as much. Right. And that's like, but there's been this inversion in our economy that's happened since like the 60s and 70s where it used to be something like 80, 90% of S&P 500 value was intangible assets. And that over like a few decades, just completely inverted to where now it's like 80, 90% is, is intangible.

Blake Oliver, CPA: [00:13:32] It's not anywhere in, in the physical world, right? It's like intellectual property and trademarks and, and brand and all that, right. Like a company like Coca-Cola, for instance. Right. Is its value, if you like, add up, it's like plant and equipment is, you know, just ten, 20%. Yeah. So like, I want to get your take on that. Um, like, I feel like accounting standards haven't changed. Not nearly enough. Because if they had, then we'd be valuing those intangible assets. Right. But we don't. Right. We stick them all in goodwill when we make an acquisition. Right. We we, uh, we're afraid to do it. And I wonder if that has something to do with the declining relevance of financial statements. So that that is that is my, like, theory. I'm just I know that I'm just tossing that at you, like, right now with no warning. But I'm curious if this is something that you think about or the IMA thinks about, because it feels to me like the people at FASB are living in a fantasy world.

Mike DePrisco: [00:14:39] Yeah. So, so here's the thing.

Blake Oliver, CPA: [00:14:41] Um, or in the past, rather.

Mike DePrisco: [00:14:44] Yeah. So let me address one of the, one of the things you mentioned at the outset, because there was a lot there certainly. Um, and that is, um, how accounting is being taught in higher education and curriculum and things of that nature, nature and how standards are slow to change. Um, and, and I will say this, I think there's been a lot of conversation happening within academia over the last, you know, ten plus years, but certainly just in my time being at IMA for the last three and a half years, I've been a part of a number of different task forces, um, and focus groups, uh, together with the American Accounting Association as well as, uh, big four firms, as well as other organizations that care deeply about the profession and are really pushing for change and evolution and finding ways to broaden the narrative of what accounting is, and the types of career opportunities that exist for individuals that are entering university and thinking about, you know, what am I going to do for the rest of my life? And I think we have in general, um, have not done a good enough job. Um, and as an industry, right, as a profession of letting young people understand, um, the different types of career paths and the different types of, of, um, subject matter areas of expertise that you can get into through a career or degree in accounting. I think it's, it's largely been a public accounting type of one way, uh, prescribed pathway. And a lot of individuals have done that. But I think what we're seeing today is more and more younger people are not interested in that pathway.

Mike DePrisco: [00:16:37] They want to go right into corporate, or they want to work on different types of things that allow them to be innovative and strategic right off the bat. They're not interested in in audit, tax, those kinds of things. And I think what we are really advocating for quite a bit, working with faculty and universities around the country, and we have over 150 universities that we call endorsed schools, and that is that they're aligning their curriculum or some portion of their curriculum with the standards that we have within our CMA certification, which is a very good indicator, right? That faculty, I think, understand their closest to to to the student, they're closest to what's happening in business and they're seeing what you're saying, right? We need to move faster. We need to evolve. We need to tell a broader story so that that's what we're doing. Right. And we're trying to tell the story that there's more than one pathway, um, that the skills needed are are changing and evolving that this is not your grandfather's, you know, profession. Um, and that here's what you need to do to prepare yourself. And to me, accounting is the accounting and finance area, I think is just more exciting now than it's ever been again, because I think technology is coming in and really creating space for individuals to take what they know about how business works and apply strategy, apply business acumen, apply creativity, apply pro, um, storytelling, right to really help shape decisions that get made in the organization.

Blake Oliver, CPA: [00:18:18] Well, it seems like there might, uh, finally be some change that happens with the curriculum because like you said, fewer young people are interested in going into straight into public accounting. Yeah. And at the same time, there's actually fewer jobs in public accounting, at least at the big firms, it sounds like, because they're figuring out how to automate the work of staff with artificial intelligence. Yep. What started with creating these offshore centers to do that kind of work is just being turbocharged by having AI do sampling and to do cache confirmations and to do all this like very, um, routine work. But it was still routine work that required more human judgment than like you could automate with rules. But now we've got AI agents that can basically do the basic logic of that kind of stuff. And so in the pyramid of the, you know, public, big public accounting firm, the corners are getting cut off. And we've got leaders from AICPA going out and putting charts on, on a, on a PowerPoint slides up showing a diamond, an upside down diamond instead of a pyramid.

Mike DePrisco: [00:19:35] Mhm.

Blake Oliver, CPA: [00:19:36] So then the question is, where are those grads going to go if they can't go into public accounting and they want to stay in accounting, they've got to go into corporate.

Mike DePrisco: [00:19:48] Private corporate. Yeah.

Blake Oliver, CPA: [00:19:49] Right.

Mike DePrisco: [00:19:50] Yeah. And yeah, and I and I, you know, I, I appreciate you saying that is and that's what I, that's what I'm hoping, you know, we can, we can drive that message and create that awareness more than what we've been able to do. Because again, there are many different career pathways in accounting. It doesn't have to be solely public. And there's a lot of great jobs where, where younger people can step in and leverage that expertise or knowledge that they have in undergraduate, in accounting and finance, and apply it to small businesses and medium sized businesses and these organizations that really need that kind of, uh, knowledge and talent to help them grow. Right. And, and to help them thrive. And I think what's exciting for a young person is they get it. They get the to they get to enter a type of organization like that and really be able to, you know, spread their wings, if you will, in terms of take on new assignments and projects and learn from others and, and, and grow up professionally. Um, and then use that, that skill and that new capabilities to determine where they want to go from there. Um, I, I, I, I, I am of the mind like that. A lot of this is going to sort itself out. Um, again, that we're very much in this hockey stick growth, um, curve situation where AI and it is, is the rage, right? And people are making a lot of investments in it.

Mike DePrisco: [00:21:23] Um, in some cases, organizations that have a clear problem to be solved, they're getting a lot of value out of it and they should continue doing it. Other organizations, I think, are struggling with what do I do with it? Do I have a clear problem that I want to solve? And they're figuring it out. But I think eventually everyone will figure it out. I do think, though, that this notion that it's this technology is going to lead to, to, to less jobs or less people needed. I just I'm not fully bought into that. Um, because we see, we see the mistakes that AI makes every single day that's cleaned up by individuals that have context or knowledge or understanding of the business or customers that are serving, and they have to spend time, right, making sure that whatever's coming out of these AI machines does, in fact, represent the business issue or challenge that that is that is aiming to be solved. And, um, you know, in that way we talk a lot about human machine collaboration, right? So it's not going to be strictly turned over to the AI agents. And they're going to do everything in, you know, everything and anything that humans used to do, but rather it's, it's more of a partnership, if you will, where humans have to be connected to the process to ensure there's no bias to ensure that the information is accurate, to ensure that, again, the context is there to interpret, to use that information to make decisions.

Mike DePrisco: [00:23:08] I mean, humans are still needed there. And it starts with having people that have been trained and educated in the in the basics and the foundations. So I'll talk to faculty at academic universities. And I say, how are you handling the fact that maybe some of this basic or foundational knowledge is going to be absorbed by machines. How are you dressing it? They said. We're not changing. We still need to make sure that individuals understand the foundation, understand the basics, because if they're going to be working together with these machines, they need to know what to look for, right? So I think that, um, things will shake out. I think jobs will change. Um, there will still be need for individuals with that accounting and finance capability and acumen, but what they do day in and day out may change. Um, the big four, you know, um, going through various cycles, I suppose we'll see what happens. Um, I do know there's a high school, um, demographic cliff coming where, you know, the number of people coming out of high school and available to go into college is getting smaller and smaller. Um, that, um, you know, creates a number of challenges, but also I think a number of opportunities as well for, for people who choose accounting and finance as a career.

Blake Oliver, CPA: [00:24:33] How do you think the job is going to change?

Mike DePrisco: [00:24:36] Well, like I said, I think that a lot of the work, um, and we, we've kind of considered a lot of this, um, we for many years had a competency framework, um, that helped guide how accounting and finance professionals need to prepare themselves from a, um, education, learning knowledge perspective. Um, and primarily it was very much focused on the core management accounting principles, you know, all the reporting, performance, decision, decision making, those kinds of things. And more recently, we've expanded this competency framework to include things like advanced data analytics, transformation, innovation, sustainability, leadership, those kinds of things. Um, and I think we, we, we did that because what we, what we're hearing from industry is that there is a real need for strategic thinking, good communication, um, and leadership. So I think in, in that way, um, the role is going to be changing and has already changed in many respects, requiring you to think more strategically, requiring you to be a good storyteller, requiring you to, to really be able to lean in and lead, um, and to ask challenging questions and to, you know, help the organization, you know, move in the direction that it needs to move into, um, as opposed to, you know, just checking the box and completing another, you know, a number of mundane tasks. I think it's a higher level of critical thinking, a higher level of judgment. Again, storytelling and really understanding the strategy and, and where you can fit into driving that strategy forward.

Blake Oliver, CPA: [00:26:27] Well, those things that you're talking about, those those characteristics you mentioned. I mean, those are characteristics of mid-level or executive level type positions, right? I don't think of like entry level people as doing that sort of thing. So how do we, uh, how do we train people to do that stuff if they aren't cutting their teeth on what we all did? Yeah.

Mike DePrisco: [00:26:54] Yeah. Well, I think, you know, I think it changes, um, the approach that I think, uh, we take to that, you know, that undergraduate training, the internship opportunities that you're providing, how are you giving people, uh, young people in particular stretch assignments where they can, they can cut their teeth or build muscle in those areas. How does, uh, mentorship, can that play a role in helping young people, you know, anticipate some of the problems that they or challenges that they might encounter in work. Um, and, um, you know, be challenged to think about those kinds of things. You know, I know many, many firms and organizations are doing a lot in the area of, of scenario based training and education. Uh, I know recently KPMG, there was a story, I think it was in the Wall Street Journal about how their entire, you know, uh, incoming intern class went through a series of, of, uh, scenarios based all along, you know, not the technical stuff, but all of the interpersonal stuff that I was talking about applying critical thinking and, um, perform, uh, risk, uh, risk evaluations and things of that nature. And I think it also suggests that education is going to have to change a little bit to, to be more applied oriented versus textbook theory. Um, and one, one of the things we're actually doing, and we just did with our CMA exam is we had a section of the exam that used to be essay based. Some portion of the exam was essay based. And we, we got rid of that and we replaced that section of the exam with case based questions because we, we understand that it's, it's really now about it's more it's more than just knowing it's about doing. Right. And I think the more that we can challenge young people to apply what they know to scenarios or in stretch assignments or projects that they might be working on, I think, you know, the better we can help them get up that learning curve. But you're right. I mean, there's some there's some things that take time and experience to develop and hone.

Blake Oliver, CPA: [00:29:08] Well, it's exciting to hear that you're focusing on the scenario based learning approach or case studies, because I feel like that is one thing that AI can do really well, which is create customized individualized scenarios for students or any learner, and then simulate that case study with you. I mean, you could do this right now in Claude, right? You could say, I want to learn how to do this, and I want you to create a simulation for me. I'm a, you know, I'm in this role at this company. And, and, you know, I need you to create like a challenge for me to solve and help teach me this concept. Like it can do that. Yeah, yeah. You know, yeah. It's like, it's the best educator there's ever been, right? It's like having like your own tutor in your pocket.

Mike DePrisco: [00:30:01] Yeah. And I will say, um, you know, I'm involved in, in an, in an organization called Faso. Um, and it, it, it's basically focused, it's, it's with the, um, the triple a and it's very much focused on building pipeline and addressing, um, you know, the various needs at the academic university level, even high school level. And how do we make the profession more attractive? Um, how do we, how do we ensure that we're, um, leveraging the, the best practices for teaching and instruction to ensure that students are excited about accounting and finance. And, you know, one of, one of the initiatives that, that this group is working on is looking for ways to improve, um, and enhance the principles of accounting class, right. Um, for, for many years, right. People think of that class as a weed out class. Um, and that and intermediate and, you know, instead of thinking it about it as a weed out class, how do we, how do we make these classes attractive where we're pulling people in? Right? And I think incorporating some of this technology into classroom instruction is ways that you catch students attention. I mean, the students of today, you know this better than anyone, right? They're digital natives. This is what they expect when they enter university, when they enter their their first job or an organization, they're expecting to utilize modern tools and technology to get to get stuff done. They're very good at it. So it's incumbent upon us, you know, the people who are teaching, the people who are leading organizations to really lean into this, this technology. Um, because to your point, it has a lot of power and do a lot of things right now that can really help level up, uh, students in terms of their knowledge and capability, uh, so they can hit the ground running when they, when they get to that first job or first internship.

Blake Oliver, CPA: [00:32:07] So let's go on to that, uh, mid-career professional because we've been talking a lot about people at the entry level, students, that sort of thing. But a lot of our audience is, uh, folks who have their CPA, their CMA, just accountants who want to learn. And they've been in the job for a few years now, and at least. And all of a sudden all of this change is hitting them all at once. So what advice do you have for that? You know, 30 something, 40 something mid-career accounting professional. What do they need to do to to stay employed and to thrive? Yeah.

Mike DePrisco: [00:32:51] Yeah. I think it's a great question. And certainly a lot of the people that I come across are, are, are sitting in the same boat, right. And, you know, we go back to a long time ago, I learned an important lesson. And that was, you know, your college degree is pretty much the beginning of your journey, not the end. And it's just just the beginning of what should be a career of learning, of growing, of challenging yourself. Um, and one of the ways you stay relevant is by continuing continuously learning, being curious and leaning into new information, new content when it becomes available. And that's why organizations like IMA exist. That's what we do. We, we try to provide the, the relevant learning and content that our stakeholders need so that they can be successful in work. Um, so we, we've done that for a long time, but more recently we've introduced a number of what we call Micro-credentials. And these are, think of it bite sized kind of learning modules that are really focused on a specific topic like AI and finance. And it's six modules. You complete each module, you get a badge could be on a specific topic of, of in AI, in finance or advanced data analytics.

Mike DePrisco: [00:34:15] And if you complete the whole program, you get you get this nice credential that you can post on LinkedIn. And, you know, the idea is that it shows that you're continuous to learn, and then you're able to take this real time information and apply it in your work on Monday. So you sit down at the computer on Friday, you spend a weekend doing it, and on Monday you can put it, put it to good use. So we see professional certifications I think are still important because they lay a foundation for general competency, general knowledge. And then you can build on that and more tools to your tool belt by leaning into these specialized skill building areas on various topics that may be of interest to you. It could be cybersecurity, right? It could be a topic around risk. It could be a topic around strategy, it could be topic around AI and finance. So I encourage people to get connected to organizations like IMA A and others. Um, there's plenty of learning opportunities out there and, you know, make it a priority, right? To, to do something to, to remain relevant and to keep your skills sharp.

Blake Oliver, CPA: [00:35:27] Mike, thank you so much for joining me and sharing your insights. If our listeners want to connect with you online, what's the best place for them to do that or learn more about IMA?

Mike DePrisco: [00:35:38] Yeah, well, I think the best place is going to IMA global, um.org. That's our website and my contact information is there. Or you can look me up on LinkedIn. Uh, and Michael Deprisco and I'm happy to connect. I'm pretty active on LinkedIn and post a lot of information that, uh, gives people an idea of what we're working on. So hopefully I'll, uh, connect and see folks online.