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Jerry Maginnis: [00:00:00] I'll share with you. We used to have a saying at KPMG be a student of the client, which means really understand their business challenges, opportunities, strategy, etcetera, and then be a student of the firm. Because at a big firm like KPMG, we did a bunch of things and it was constantly evolving, right? So there'd be new service capabilities, new technologies, and you really had to pay attention to like what the firm's capabilities were and what the client's issues were.
Blake Oliver: [00:00:32] If you'd like to earn CPE credit for listening to this episode, visit Earmark Cpcomm. Download the app, take a short quiz and get your CPE certificate. Continuing education has never been so easy. And now on to the episode. Hello and welcome back to the show. I'm Blake Oliver, talking today with Jerry McGinnis, former office managing partner of KPMG in Philadelphia and author of the new book Advice for a Successful Career in the Accounting Profession. Jerry, welcome to the show.
Jerry Maginnis: [00:01:10] Hey, Blake, Great to be with you today.
Blake Oliver: [00:01:13] I love the subtitle How to Make Your Assets Greatly Exceed Your Liabilities.
Jerry Maginnis: [00:01:19] Funny story on that. When I initially submitted my manuscript to my publisher, Wiley, that was actually going to be the title of the book, and the subtitle was going to be Advice for a Successful Career. And they said, you know, we're going to flip this because we think people may think it's a book about personal finance and we don't want them to be confused in terms of what it's about. So I deferred to their experience on that one.
Blake Oliver: [00:01:44] It's about how to succeed in the accounting profession. And you in your career obviously succeeded getting to that position of managing an entire major office at KPMG. I'd love to hear how you got started. What got you into accounting?
Jerry Maginnis: [00:02:03] Yeah, that's a great question, Blake. So I'm probably dating myself here, but when I attended high school, it was back in the mid 1970s and not unlike today, that was a period where inflation was raging. Unlike today, unemployment rates were quite high and we were going through a pretty bad recession. So, you know, when I was thinking about what I wanted to major in in college, I was very focused on finding and keeping a job. And the research I did suggested, hey, accounting is a pretty stable profession. So honestly, I'd love to tell you that it was my passion. Et cetera. Et cetera. But that's kind of what got me into it. Very pragmatic reasoning. I was fortunate in that when I did get into it, and particularly when I got out into the work world and started doing it, I did enjoy the work, found it challenging, interesting, and stuck with it. So I guess I got lucky.
Blake Oliver: [00:02:56] I feel the same way. I was a music major who graduated into the Great Recession and so there were no opportunities for me. Nobody wanted to hire a music major and I started doing bookkeeping work and got into accounting. And initially it was just something to pay the bills. But I found I really enjoyed the work and so I feel really fortunate to have fallen into this career. And, you know, I bet there's a lot of folks like that out there.
Jerry Maginnis: [00:03:25] I think there probably are and probably another topic for another day. But I know you talk a lot about Pipeline on your shows. And one of the opportunities I think we have as a profession is to really do a much better job telling the story of why this is a great, interesting profession and why it can just afford young people so many opportunities because the awareness level is just not where it should be, in my opinion.
Blake Oliver: [00:03:53] Well, this episode is for the folks who have already decided to some extent that they want to pursue a career in accounting. Perhaps our listeners are students in school, maybe high school. Maybe they're accounting majors. Perhaps they've already started their career. They're at the beginning of their career and they want to know, how do I move up? It's not always clear. It wasn't always clear to me just how to do that. And so I'm really excited to talk to you today about what young accountants can do. Before we talk about that, though, I'm curious what inspired you to write this book?
Jerry Maginnis: [00:04:31] Yeah, no, thanks for the question. You know, when I retired from KPMG a few years ago, Blake, I had an opportunity to get involved at a local university near where I live here in southern New Jersey. It's called Rowan University. It's a public university, about 25,000 students. A lot of first time college attendees at Rowan and also a very diverse student population. I had no prior connections with the school. What got me involved was just the geographic proximity. It's 15 minutes from my home, so pretty easy to get to. They were kind enough to provide me with an office on campus. This was pre-pandemic, so that seemed like a nice fringe benefit to have a place to go. And once I got there, I did a couple different types of things to support their accounting program and their business school. I would give guest lectures to the students on topics like ethics or careers in accounting. I did a stint on their accounting advisory board for the university, actually wound up chairing that. And but mostly what I did and what I got the most enjoyment and satisfaction out of was talking to students. So the students sort of figured out you're there. And I had an open door policy. I would go in and give a guest lecture.
Jerry Maginnis: [00:05:46] I'd put my contact info up on the board. I'd say, Hey, if you want to come see me, I'm happy to chat, try and be helpful. And students took me up on that. So over a period of two, three years, I mean, I met with dozens and dozens and dozens of students. And while each of those conversations was unique, after a while, certain themes and patterns begin to emerge. And so one day about three years ago, I was talking with a student, interestingly enough, about the 150 hour requirement and whether they should pursue becoming a CPA. And we had a great conversation. They left my office and I leaned back in my chair and said to myself. Think that's about the 20th time I've had that conversation, and I wonder if there might be an opportunity here to try and put down on paper some of the thoughts, ideas, suggestions, tips that I'm trying to share with these students in a way that could be leveraged more broadly beyond the students here at Rowan. So that was really the catalyst to write the book. Once I got into it, I thought, you know, there's more here than just college students. There's there's probably a lot of material that might be helpful and relevant for what I call early career professionals.
Jerry Maginnis: [00:06:58] And that's a group I define as being in that first three, four, maybe five years of your career, which is a great time for learning and formative development of good habits that will serve you well for a lifetime. So that was sort of the inspiration, the catalyst, if you will. I'd never written a book before, so that was a whole learning experience and I was probably my own worst enemy because I'm doing some other things here in this next phase, and I'd write a chapter and feel pretty good about it, and then I'd put it down and not pick it up for 6 or 8 weeks. So it took me a couple of years to actually get through the process of writing it. And the other thing I feel like was a good decision I made was I got a lot of feedback and input. Once I had a pretty final manuscript, I probably had 15 different people read it and give me suggestions on how it could be enhanced. And many of them were the people it was intended to help students and early career professionals. So that's kind of a quick synopsis of the process of writing the book.
Blake Oliver: [00:08:00] So let's talk about some of the things you should do and some of the things you shouldn't do when you're early in your career, because those first few years that you mentioned are very critical. It will determine whether you move up to manager, to director or if you leave. And let's assume that our listeners want to continue on in public accounting. They want to have a long career at a firm. You need to get past that staff level. So perhaps we could start with the things not to do. What are some of the biggest mistakes that you see young professionals making early in their careers, and how can they avoid those pitfalls?
Jerry Maginnis: [00:08:43] Sure. And, you know, I don't like it when people generalize. So I'm going to try and refrain from generalizing and I'll try and choose my words carefully here. But I'll say that I see a lot of younger professionals today, and I don't think it's unique to accountants. I would say it applies to a lot of people in their 20s and maybe 30s today. They have a short attention span sometimes and they're very interested in kind of what's next for me, right? I've been doing this job for six months. When am I going to get promoted? When am I going to have my next opportunity? And similarly, if they have a bad experience, let's say they're in public accounting, they get assigned to an engagement. The person they're working for, they don't particularly like maybe the client's difficult and maybe it's a really rough 6 or 8 week period. Some people will say, That's it, this isn't the right profession for me. I'm leaving. And so I think that's a mistake. I think you have to give things a little time to truly have the entire experience, you know, because that next engagement you get on, it might be great people you're working with and a terrific client and a great learning experience. So I would say don't reach conclusions too quickly. You know, I get the desire to be promoted, have new challenges, learn new things.
Jerry Maginnis: [00:10:08] And that's those are all admirable qualities and traits. But sometimes you just have to grow where you're planted and take the time to get that full experience. Over the years, Blake. I've seen a lot of people leave public accounting after a year or two, and I honestly think they're they're missing some really valuable learning and development. Um, many, many years ago when I sat for the CPA exam, believe it or not, I took the Becker course and Becker still around and, you know, viewed there's a number of great CPA prep services out there, but we actually used to hear from Newt Becker, the founder. And one of the things he used to say is and don't get me wrong, there's a lot of great positions in industry and we'll talk about that. But he would say every year in public accounting is worth the equivalent of two years in private industry from a learning and development perspective. So when people leave after only a year or two, I think they're missing out on some of that learning and development. And listen, I acknowledge it's not for everyone. A lot of people aren't have zero interest in spending their career there or becoming a partner. But I would say invest the time to get the full benefit of the experience before you maybe leave prematurely would be one big thing I've observed. Um.
Blake Oliver: [00:11:24] Yeah, the workload is tough at the beginning. There's a lot of expectations, especially at a big four firm. It's I've heard it described as trial by fire or getting thrown into the deep end. Do you have any advice for staff on how to, how to manage that, how to how to not get discouraged by just the the amount of of work that's tossed at you?
Jerry Maginnis: [00:11:51] Yeah, it's it's a really important topic. And let me be clear. I think the profession can do a better job here. The dilemma, of course, is whether it's an audit position or tax, it's very seasonal. The nature of the work, you know, there's deadlines and the deadlines drive sometimes the hours. But I would observe that. And actually I have a chapter in the book that's all about, you know, work life balance and things you can do. I would observe that over the years, the firms, whether they be the Big four or other firms of all sizes, have become much more sensitive to the importance of work life balance, mental health, their employees well-being. It's far from perfect, but there's a lot more firm wide programs and initiatives to support young professionals through this. I think sometimes young professionals, they're their own worst enemy because they need to understand that even at a young age, 22, 23 years old, they need to kind of take ownership of their own schedule and their life and sort of make their own priorities. Most young people right out of college really want to succeed. They're highly motivated. They're willing to work hard. But honestly, the firm doesn't expect you to work 75, 80 hours a week.
Jerry Maginnis: [00:13:07] They realize that you reach a point of diminishing returns when you're working those kind of crazy hours. The other observation I would make is and I come from an audit background, but our audit busy season really was about eight weeks, I would say, from mid-January, because it's driven by those calendar year ends. Most companies have calendar year ends. Even the best, largest, most sophisticated companies, it takes them a couple of weeks to close the books at year end. Right. So you're not really in there doing the year end audit work till, say, January 15th. Larger public companies have to file their 10-K within 60 days of year end, so their audits have to be out the door by the end of February. So you got that's a very busy six weeks. And then there's another group of smaller public companies that have some later deadlines, March 15th or March 31st. But generally speaking, the busiest spike in busy season was was pretty much done by March 15th. So I would say from January 15th to March 15th, yeah, you're going to be working if you're an audit, 60 hour weeks, maybe a little bit more, depending on your client and your circumstances.
Jerry Maginnis: [00:14:13] But for the rest of the. Ten plus months of the year. That same level of intensity does not exist in my experience. And in fact, I think you and I have talked about this before. The firms have all kinds of programs to accommodate their young professionals for those crazy hours in busy season. So most firms give you 30 days of PTO when you walk in the door. That's the equivalent of six weeks off. Could you be assigned to an audit that might require some overtime in April or May or September? Yeah, maybe. Like we used to have June 30th year end public company clients or September 30th year end. So you might face some of those same deadlines. Maybe your client's doing an IPO or in the middle of an M&A transaction. But I want to be clear, I don't think it's realistic for anyone to think that they're going to be expected to work 70, 80 hours a week on a year round basis. Much of the year is much more normal, like 40 hour weeks, maybe a 50 hour week. If you're doing like a June 30th public company audit. But I'll stop there.
Blake Oliver: [00:15:18] So one of the challenges is managing expectations of managers and partners, The people who are you're reporting to in your experience as a partner, what what was the what's the best way? Like, let's say I'm working for you, Jerry, on an audit. What's the best way for me as a staff person to to make you happy when it comes to that super busy time of year?
Jerry Maginnis: [00:15:45] Yeah, it's a great point. And I would say, first of all, put your hand up. So we had a protocol on jobs that I served as the partner on where we'd always have a planning meeting. And part of our discussion during the planning meeting was to talk about expectations and hours and deadlines. And we would be very upfront and say, Hey, in the middle of February, when we're trying to get that 10-K filed, you know, it's not going to be a 40 hour week, but we would then say, Blake, what do you have going on? What do you like to do during the week? Do you like to play tennis on Wednesday night or visit your grandmother on Thursday night? And we would sort of figure out as a team, certain commitments that were important to our team members. And then we would alternate a little bit. If you like to play tennis Wednesday night, maybe you go home at 530 and play tennis, maybe you're there a little later Tuesday and Thursday. And Sally, who likes to visit her grandmother on Thursday nights, she gets to go home early on Thursday. So we tried to find ways to respect people's personal lives and priorities and not just expect that they were going to be glued to their computer or their desk 24 over seven just because it was busy season.
Blake Oliver: [00:16:51] So I'm hearing speak up, let people know about your obligations and make the arrangements.
Jerry Maginnis: [00:17:00] Yes. And you know, the world has changed a lot. I think in most firms, most partners and managers are much more sensitive to work life balance issues, and they're going to be much more receptive to having a little bit of flexibility as long as the team members and the younger professionals also respect the fact that it is a deadline driven business. We do have to follow the 10-K by February 28th. We probably are not going to get a good response if we walk into the client on February 26th and say, we can't get your case filed on time, we can't complete the audit because everybody wanted to go on vacation last week, Right? So there's got to be good communication on both sides, good setting of expectations. But absolutely younger professionals should feel free to talk about these things and indicate some of their preferences and priorities.
Blake Oliver: [00:17:49] In your experience, what is the biggest difference between an all star staff person, someone who's just an a player who you would think of and you probably remember some of these folks, people that you still think that was the great that was a great employee. What's the difference between that person and an average? Staff person at KPMG in your in your experience.
Jerry Maginnis: [00:18:16] Yeah. So I'd like to think that just about all the people that we hired were. Bright, you know, capable of understanding from a technical perspective what we were asking them to do. Some people were maybe a little more extroverted, extroverted or personable than others, but they all sort of come in with a baseline level of skills that should enable them to be successful in their job. The ones who sort of rose above and were the superstars were the ones, Blake that I would say demonstrated great intellectual curiosity and were avid learners. And they weren't satisfied to just sort of understand what they were doing from an auditing or accounting standpoint. But they would come to me and say, Hey, Jerry, tell me about the client's business model. How do they make money? What's their international expansion strategy? How are they using technology? And that's the hallmark of a great auditor. A great auditor is a great auditor. Not because they understand the debits and credits. Of course you have to do that. That's table stakes. But a great auditor understands the business and how the client makes money and the economics and the cash flows. And I would say a lot of the auditing failures that have been happen could have been avoided if people got beyond the debits and credits and thought about the substance of the economic transactions they were auditing and whether it made sense or not. So in a short answer, intellectual curiosity, I think, separates the great ones.
Blake Oliver: [00:19:49] You also talk in your book about the importance of soft skills, empathy, collaboration. Why is that a critical skill for accountants these days?
Jerry Maginnis: [00:20:00] Well. You know, unfortunately, in my experience, a lot of very talented, bright, hardworking young professionals don't possess them. And, you know, or don't possess them in a big way. And so much of success in the profession really revolves around your ability to work effectively with others, be it your client, your colleagues, your peers. So I think some of those soft skills are really critical to your success because you could be the smartest person in the world and have all the answers, but if you're just difficult to interact with. You're probably not going to do well, you know, and and for so many years in the profession, I think the emphasis was always on technical skills and not so much on soft skills. And I joke with people like there is nothing in my book that is technical in nature because I feel like the students are getting, you know, all the debits and credits in the classroom. My book's all about the soft skills because I think they're really important to one success.
Blake Oliver: [00:21:13] It's interesting that we don't have classes about soft skills in college, at least in most accounting programs that I'm aware of. It's it's not even in the curriculum. Do you think we should be teaching that?
Jerry Maginnis: [00:21:31] I do. I do. You know, if you talk to people at firms or companies, that's probably their most common complaint about their younger professionals. You know, that they they don't possess some of these soft skills. So I think in fairness to educators, the current curriculum has a lot of required courses. And what they struggle with, like we saw this with our advisory board at Roe and the advisory board would say, we think you should have a class on data analytics or we think you should have a class on soft skills. And the pushback we would sometimes get from the faculty is, well, what do you want us to take away? Because we have all these other requirements Now there are electives. But yeah, I think that would be a great offering on the part of college and universities, more sort of practical hands on skills that people are going to use in the business world.
Blake Oliver: [00:22:22] Can you give me an example of a situation where soft skills came in really handy in your career?
Jerry Maginnis: [00:22:32] Yeah, it's a great question. So. I can. I recall this is back when I was a manager being assigned to a fairly large client engagement for my firm, and I was new on the account and we had a lot of people, eight, ten people working on the engagement. And my first day out to the client site, everybody told me how much they hated and they used that word the principle client official that we dealt with extensively. And they said basically, he's hostile, he's rude, he doesn't like us and he treats us really poorly. So that was a bit concerning. So, you know, I got to meet this individual. And I must admit, Blake, that after my initial meeting with him, I came back and said, Yeah, you pretty much got it right. He was pretty rude. He was pretty hostile. Et cetera. Et cetera. But then I kind of reflected on the situation. I said, Well, it's a big, important client of the firm. They pay us a lot of money. You know, we're going to be working with him. We need to find a way to enhance this working relationship and improve the situation. So the next week I came in and I invited this gentleman to just go have a cup of coffee off site. Let's get out of the office, let's chat a little bit, get to know each other. And, you know, he continued to be pretty challenging to deal with in that offsite meeting. He's very critical. But, you know, I listened more than I talked and I learned a lot about where he was coming from.
Jerry Maginnis: [00:24:02] And I very quickly realized that even though he was like in the upper echelon of this company, he really didn't understand the role of the independent auditor and what our job was and why we were doing some of the things we were doing or asking him to do certain things. So, you know, the light bulb went off. I said, All right, here's an opportunity to educate. And I began slowly but surely to kind of just share some things with him, to broaden his perspective and horizons. I also continued to listen because as we then turn this into a weekly offsite coffee meeting and as I listened, I realized that he actually had some pretty good points, like some of his criticisms were valid, like we were doing things that maybe were unnecessary or, you know, could be done better or more efficiently in terms of dealing with his team. So I learned a lot from him about how we could improve. And I tried to educate him. And over time, our relationship improved. And as I was able to develop a little bit of a bond with him, you know, he started treating our team a little better. Long story short, I made partner a couple of years later, and this individual is one of the first people to write me a very nice congratulatory letter. So I don't know what your category of soft skills you put that under, like listening empathy, but you know, just turning around what was a very bad relationship came in handy in that instance.
Blake Oliver: [00:25:25] Yeah. Mean to me being able to at least maybe you're not buddies with the client, but you're on a good footing, a good relationship with the client. I mean, that's got to be one of the most critical skills to making partners is maintaining those solid relationships.
Jerry Maginnis: [00:25:43] Absolutely. And, you know, as an auditor, you always have to be mindful of like your independence and objectivity. But that doesn't mean you can't develop a healthy mutual respect and get to know someone and build a strong relationship. And you've been around long enough, you know, that can make all the difference in the world, right? When you have that mutual respect and collaboration and you're working together versus working against each other, that can that can really result in a much more effective audit at the end of the day. So it's in the interest of the capital markets, I would say.
Blake Oliver: [00:26:16] Yeah. And the client. Right. If if you if you don't enjoy working with your auditors, that's a significant amount of time that you're going to be with somebody you don't really want to be working with. And do you really want that? Exactly.
Jerry Maginnis: [00:26:31] Life is too short, right, to be dealing with people that are difficult or that you don't want to be dealing with.
Blake Oliver: [00:26:38] Yeah, and it brings up a good point, which is this somewhat often adversarial relationship that external auditors have with clients, with the personnel that they are working with at the client. I feel like that creates a lot of stress, whether that is conscious or unconscious on staff who didn't get into accounting to be adversarial.
Jerry Maginnis: [00:27:08] Yeah, no, it's a fair point. And listen, being an auditor is a really tough job. You know, you've got that responsibility to third parties. You know, people that are relying on those financial statements, be they investors or creditors. And you always need to be mindful of that. And there are going to be times where you have to raise difficult issues and have difficult conversations. But in my career, what I've found is when you build that relationship, that sense of trust and maybe educate your client a little bit as to why you're asking those hard questions, it's going to go much better than if you're just, you know, being confrontational and and banging heads. But yeah, professional skepticism is really important. Challenging things, pushing back, asking for additional documentation. That's an important role auditors play. And the ability Blake to do that in a way that doesn't. Create your client or cause your client relationship to deteriorate is an art form. And I would come back to soft skills. That's why soft skills are so important and they're not taught in school. And a lot of young professionals struggle with with that, you know, having that tough conversation.
Blake Oliver: [00:28:22] Well, maybe you can coach me through a hypothetical. Let's say that I have been asking a client for documentation for a long time. I've followed up and they're just not responsive and the deadline is coming up and work is starting to pile up. And I'm a staff who doesn't really feel like I can demand anything of the client. What? What do I do in that situation?
Jerry Maginnis: [00:28:47] Gerry Yeah, great question. I mean, sometimes just honesty is the best policy, so I might have that conversation like this. You're the client. I'm the auditor. So. So, Blake, you know, I know you're busy. I know I've asked you for this 3 or 4 times, and you've got a lot of other things going on. But just so you understand my perspective, I'm. We're coming up on the deadline. You know, it's next week. If I don't get this information in the next day or two, it's going to be really difficult for me to complete my work on a timely basis. And I just want to make sure you understand if that transpires, then I've got to go to my supervisor, tell them that they're probably going to go to your supervisor and geez, I'd love to avoid all that. So is there any way I can help you? You know, get me what you need to get me here so we can both be successful or words to that effect. I'm paraphrasing, but I think communication is so important. And I would observe that not just in accounting, but in the business world generally. Under communication or lack of communication is prevalent over communication is rare. In fact, it's hard to over communicate. And I would add to that that we live in a very busy, very distracted world. Right? Multitasking is the norm. So sometimes you need to ask people 2 or 3 times before it sinks in and they get the message like, This is really important. I really need it. But what you don't want to do, of course, is walk into the office and slam your fist down on the table and say, listen, um, using whatever type of foul language you choose to use, this is unacceptable. I've asked you for this four times. What don't you understand? You're an idiot. You know, that's. That's not going to.
Speaker3: [00:30:31] Yeah.
Jerry Maginnis: [00:30:32] Create much progress, I don't think.
Blake Oliver: [00:30:35] It's a saying that it takes people have to hear things three times before they really retain 100% of the information. So if you've had to remind somebody three times, it's possible they still haven't got the message yet. And and so maybe, you know, take heart in the fact that, you know, they're not necessarily ignoring you. They're just they've got priorities. Right. They've got a lot of other demands on them. Yeah.
Jerry Maginnis: [00:31:03] And we've talked about soft skills here. And one of the things I talk about in the book is empathy. Like, you know, you don't really know maybe what's going on in that person's life. Maybe they've got a sick child or they're dealing with some personal issues or maybe it's work related. They've got their boss is pushing them on something so they're not intentionally blowing you off. It's just that maybe for a bunch of reasons, you're not their highest priority. So again, that ability to develop rapport, a relationship, I would say to my clients, it would really help me out if you could get me this by tomorrow. I know you're busy, but and you sort of make it a can you do me? Can you give me help me out here? And they would view it perhaps a little bit differently than if you walked in and said, I need this by tomorrow.
Blake Oliver: [00:31:50] So, Jerry, how important is it to know how to golf to be successful in accounting?
Jerry Maginnis: [00:31:57] Yeah, So that's a great question. And I'm going to give you an honest answer to that question that may surprise you because, yeah, the the kind of stereotype, particularly as the partners or like I was the managing partner. Yeah. You're out like rubbing elbows with the clients and the prospects and wining and dining them and you're not really doing a lot of work. You're just selling all the time. I, I used to golf many years ago, and I had a son who played baseball and I wound up becoming his baseball coach. And I got to the point where coaching baseball was consuming like a lot of time. We'd have practice a couple of times a week games, and I just felt guilty going golfing on the weekend when I was already spending all this time. So I basically stopped golfing probably when I was about 40 years old. And the big joke at KPMG in Philadelphia was like, How can Jerry be the managing partner? He doesn't golf, But, you know, I would say it's really not that important. Don't get me wrong, a lot of business can get done on the golf course. It's not a bad skill to have, particularly if you like to play golf, but I would say it's absolutely not essential. And if you want to entertain your client, you know you can do it in other ways. Take them to a ball game or take them out to dinner so you don't have to golf to be successful. I'll state that with certainty.
Blake Oliver: [00:33:15] How important is business development in general for making partner?
Jerry Maginnis: [00:33:19] Yeah, it's a really good question. And of course this is in the context of public accounting. I would say it's an important skill, but what we really look for within our audit practice were well-rounded professionals that could do the following things. Well, you know, first and foremost was your technical skills and your commitment to, you know, producing high quality audits. That was job one. And if you weren't doing that, nothing else mattered. Secondly was your client service skills because you could do a great audit. And if your client hated you at the end and decided to go out to bid, that probably wasn't a great result. Third, I would say, would be people development, coaching, mentoring, you know, bringing along those younger professionals, helping them achieve their potential. And then, yeah, there was some element of business development, but we tried to recognize that everybody had a blend of different skills. And while nobody got a pass on that, Blake, we always expected someone to contribute in some way. Some people were better at it than others. Some people liked doing it better than others. So we might expect more of certain individuals in that regard. So it was important, but it wasn't like, again, just like golf. It wasn't like you have to bring in $1 million a year or you're not going to be successful. It was just kind of one of the competencies that we expected from partners.
Blake Oliver: [00:34:43] Well, so you were managing partner. Were you a rainmaker for the firm?
Jerry Maginnis: [00:34:49] I don't know if I'd use that term. I mean, what I learned over the years was like, again, it's all about people and relationships. And as you got to know people and develop relationships, I was fortunate because and I'm sure this is the case with many firms, not just big four firms or national firms, But, you know, there was sort of an expectation that we as a firm were capable of providing a service, right, Whether it be an audit or a tax planning service or an advisory project. So the the brand of KPMG helped a lot. And there was never a question of I'm not sure you guys could do this work, but the personal relationship that you developed, maybe some of the insights you could share with a client about why a project was important or what you're observing out in the marketplace would be helpful. But yeah, I guess I had a fair amount of success over the years, you know, bringing in business.
Blake Oliver: [00:35:45] How did you learn to do that? Because we don't learn that in school.
Jerry Maginnis: [00:35:49] It definitely did not learn it in school. I think some of it is you know, you observe like a lot of things, you observe more senior people and maybe you get some coaching and mentoring. Maybe somebody brings you to a lunch with a prospective client and you get to just kind of watch and see what they're doing. But I'll go back to something I said earlier about intellectual curiosity. I found during my career that the more I understood the client's business and in particular what was keeping the C-suite up at night, what does the CFO, CFO, COO thinking about? What are their biggest challenges? What are their biggest opportunities? What's their strategy as a company? I mean, read the 10-K. It's all right there, right? Is M&A an important part of the playbook? Because then I can have a meaningful conversation with them, not just about the results of the audit, but about the business and, you know, services the firm provided that might be able to be helpful in dealing with some of those challenging issues.
Blake Oliver: [00:36:48] So if I'm hearing you right, it's the intellectual curiosity that's essential and that will help you be good at business development because you then learn about the client and find out what are their problems and challenges, and then you can create solutions. And that is the recipe for more business for the firm.
Jerry Maginnis: [00:37:10] Yeah, exactly. In fact, I'll share with you, we used to have a client saying at KPMG that went like this be a student of the client, which means really understand their business challenges, opportunities, strategy, etcetera, and then be a student of the firm. Because at a big firm like KPMG, we did a bunch of things and it was constantly evolving, right? So there would be new service capabilities, new technologies, and you really had to pay attention to like what the firm's capabilities were and what the client's issues were. And then if you connected those dots, the cigaret sauce would be the relationships like, okay, you have a need, a business issue, we have a potential solution and I know you pretty well and you'll take the meeting with my expert. Let me just say a quick word, because I wouldn't want any of your listeners to get the wrong impression here. We took audit Independence like extremely seriously at KPMG, and while there were certain non-audit services that you were allowed to provide to an audit client, I would tell you, Blake, that the vast majority of the advisory work that we sold and delivered at a as a firm was delivered to non-audit clients. So like one of one of our biggest clients from an advisory standpoint, most of our biggest clients were not audit clients. So when I when I talk about going in and understanding their strategy and their business issues and bringing solutions, that was mostly for non-audit clients because again, we were very mindful of independence and objectivity.
Blake Oliver: [00:38:55] Absolutely critical to maintaining quality and independence and objectivity when you're doing audits. Absolutely. What, going back to school? Things have changed since you were an accounting student. We've now got all these different specialties out there. I mean, some are the same, some are new. Are there any specialties in accounting that you see as being really in demand right now that you would suggest students look at? And if so, how do we position ourselves to to go to go there? What's what's the what's the hot thing in accounting?
Jerry Maginnis: [00:39:37] Yeah, great, great question. Well, you know, just very briefly and you know this one of the reasons accounting is such a great career path is that literally everybody needs accountants, right? If you think of companies, obviously big public companies like Google, Apple, IBM, they need to have their annual audits done. So they need the external audit service, but then they have thousands of accountants working for them, particularly if they're global multinational. But what about that? In the small town you live in or anyone lives in? What about that dry cleaners and pizza shop on Main Street? That small business? Well, they may not need an audit, but at a minimum, they need to file a tax return. Right. Which means they need to keep a set of books and records. And they may not be big enough if they're 2 or 3 employees to have an accountant on staff. But chances are they're working with that small local accounting firm that helps them put together their books and records for the tax return, etcetera. So big businesses need accountants, small businesses need accountants, everybody in between needs accountants. So family business, venture backed companies, nonprofits, government entities, the list goes on and on. So what does that mean as you think about opportunities to use your accounting degree? Like you can kind of marry your personal passion with the type of organization that needs accounting services, right? It could be sports and entertainment. It could be tech companies, could be life science companies like where do you want to work all those opportunities are available in terms of hot areas or specializations.
Jerry Maginnis: [00:41:14] A couple thoughts that come to mind. Um, forensic accounting. If I was young and doing it all over again, the bad news is there's a lot of crooks out there and there's a lot of bad people doing bad things. So unfortunately that is not slowing down. So I think the need for forensic accounting is increasing every day. The work is incredibly interesting and rewarding. So that would be one area I would think about and answer to your question. Another would be Blake Emerging Industries. I think getting in on the ground floor of an emerging industry would be really fun and kind of becoming the expert. And some of these emerging industries have some unique accounting and reporting issues and tax issues. So things like cannabis, which is now legal and a bunch of states, there's some talk the federal government could legalize it. There's going to be a whole wave of opportunity there. Digital currencies, you know, have gotten beaten up a little bit of late. There's a lot of challenges there. But are they going to be a long term innovation? I think the jury is still out on that. But maybe a young person might say, I'm going to specialize in that world because there's a lot of unique accounting issues. Fasb just came out with some new guidance this last couple of days. So, yeah, those are a couple areas that come to mind and answer to your question.
Blake Oliver: [00:42:30] Well, another emerging area is artificial intelligence and generative AI. I'm eager to get your take on that as regarding young accountants who are just going into their professional careers, how do you think it's going to affect what they do and how can students and young professionals prepare?
Speaker3: [00:42:52] Yeah, no, great topic.
Jerry Maginnis: [00:42:54] Everybody's talking about AI these days. So I have a chapter in the book called Embrace Change Technology is Your Friend. And in that chapter, I talk about, you know, way back when I started in public accounting and I literally Blake, you're going to you're going to have a hard time wrapping your head around this. But I literally had clients that kept manual accounting records. And I mean, when when they talk about the cash receipts register or the cash disbursements book like that's what they had and it was all manual. And so it gives you a new appreciation for where the term bookkeeper comes from. But I saw a lot of change in my career and relatively early on, so maybe I was eight. Ten years into my career is when the Excel spreadsheet got introduced and if ever there was an innovation that you would think would eliminate accounting jobs and number crunching on spreadsheets and manual processes, that was it. But I'm pretty confident that we have more accountants today than we did when the Excel spreadsheet was introduced. So I believe artificial intelligence is going to enable young professionals to elevate what they do and how they do it in a way that is going to be potentially much more satisfying and rewarding.
Jerry Maginnis: [00:44:16] The catch and there's always a catch. It probably will eliminate certain lower level routine jobs. So young people have to embrace it. They have to learn it, they have to dive into it. They have to want to master it and figure out how it's going to support them in their job and make them more productive. If you stick your head in the sand and say, I'm scared of this, it intimidates me. I'm not going to take the time. I'm too busy. You're going to wind up behind the eight ball. So I'll have a funny story for you on AI, if I may. Oh, yeah. This is about maybe four months ago now. I downloaded ChatGPT and it was the first time I had used it and I posed this question. I said if I was going to write a book about how to have a successful career in the accounting profession, what would the table of contents look like? And of course it spit it out in a matter of moments. And I was amazed. I mean, probably 70 to 75% of its response mirrored my table of contents. Now, I don't know if it had access to my book or not when it mined that response, but I was pretty impressed.
Blake Oliver: [00:45:29] Yeah, it is really fascinating what it can do. And to your point about intellectual curiosity, I would say that if you haven't tried it and you're listening right now, it's free. You can go try it. And I would play around with it and test it out on some anonymized data or some abstract questions or use it as a sounding board, because I'm pretty sure I think KPMG and all the other Big Four have announced huge investments in AI. So if you're at a large firm, you're going to be using these chat bots pretty soon in some regard. So yeah, get.
Jerry Maginnis: [00:46:11] Ahead of it. Absolutely. Couldn't agree more. Like I think back about my 40 plus year career in the profession and I saw a lot of change during that time. But a young person entering the profession today is going to see many multiples of the change that I saw. So so you really have to stay on that leading edge and and invest in your technology skills as much as you do your accounting and tax skills.
Blake Oliver: [00:46:38] I have a funny story, Jerry. So I actually saw a set of paper books, you know, a true set of books come through the office. It wasn't that long ago I was a manager at a regional firm in Southern California, and we got a new client, and the client sent us their books, and I thought it was going to be a thumb drive with a QuickBooks file or something, and it was actual ledgers and we had to take those ledgers and come up with a trial balance and and put it into the software. Wow. So it's still.
Speaker3: [00:47:13] Happening. So maybe I'm.
Jerry Maginnis: [00:47:13] Not dating myself as much as I thought. You've experienced that as well.
Blake Oliver: [00:47:18] I got to see it. It was special. We were passing them around the office for all the young kids to to to see. It was a special moment. I actually wonder sometimes if it would be like, I don't know if kids in school learn how to do it by hand much anymore. We did t accounts by hand and we had to make a statement of cash flows by hand and that sort of thing. But I think it would be it would be helpful if we learned our debits and credits and had to do a set of books, you know, the old the old school way. It might help with like getting that theory embedded in your brain better.
Jerry Maginnis: [00:47:56] Yeah, Yeah. Remember we had when I was in school, we had like a set of working papers we had to put together for a certain business and walking through it from soup to nuts, you know, through that closing process can be a great learning experience. I think, again, you know, coming back to something we touched on earlier, it's a real challenge for academics today, like the more progressive ones are trying to incorporate into their classroom projects and work some of the latest technologies. But any time you introduce something new, like what do you take out? Because there's only 13 weeks and so many hours. And if you're going to teach them older X, okay, what am I going to knock out? And you can't knock off the debits and credits because they still have to learn that. So and, and yeah, how are we going to incorporate soft skills So it does become challenging.
Blake Oliver: [00:48:46] So I don't think we talked about this yet. The difference between a large firm and a small firm or going straight into industry. Those are typically the three major options, although there's lots of other things you could do. But that's kind of the the probably the three biggest paths. How do you see like, let's say I'm a student and I'm asking you for for your advice on which do I choose? Big Four regional firm or straight to corporate. What would you tell me?
Jerry Maginnis: [00:49:21] Yeah, no, it's a great question. And I know it's on the minds of a lot of young professionals, students. So I actually included a Chapter four in my book on career paths where I just try and lay out almost in a menu like format. Blake Like, here's all the different options. You know, there's public accounting versus private industry. Within public accounting, there's audit tax advisory, there's Big Four, there's other national firms, regional firms, local firms, so many different paths you can go down in industry from a or in industry from a industry perspective, you know, do I work for a pharma company? Do I work for a tech company? Et cetera. So I think just understanding everything that's out there and then the advice I give young students is, look, there's a lot of great regional accounting firms, local accounting firms, companies take the time to meet as many prospective employers as you can. A lot of students make the mistake of not fully utilizing the resources that are available to them. And that campus setting, whether it be the career placement office or networking events or student clubs that will have speakers come in from some of these organizations, but take the time to learn, like for yourself, what's a Big Four environment like versus a regional firm? You'll get a sense if you meet a couple people from that firm, go through an interview process, do an internship.
Jerry Maginnis: [00:50:45] What's the culture of that firm? What's the level of intensity of that firm? What are their clients like? And there's not a one size fits all. You know, for someone, a regional firm might be a great, great solution, great opportunity or a local firm for another individual. Maybe that Big Four environment is more to their liking, at least to launch their career. So I would never say to somebody, Hey, you absolutely should start at a big four. That's the only way to go. I think that would be a mistake. You need to see what's out there, weigh it against your own interests, personality, likes, dislikes, and then make an informed judgment that's going to be beneficial to you. Having said all that and admitting that maybe I'm a little less than objective given my background, I do think the Big four is a great place to start. And, you know, world class learning and development, you're around a lot of smart, motivated people. You're working on some really interesting clients. Often they're larger, they're global. That doesn't mean they're better than the client you would work on in a regional firm, but they probably have more issues.
Jerry Maginnis: [00:51:52] There's probably more learning opportunities. And, you know, importantly, like if you spend two, three years even at a big four and you pass your CPA exam, those credentials are going to be with you for the rest of your life and they potentially might open some doors. Having said all that, I say in the book, like, what if you don't start at a big four, that you should never feel bad about, that. There's also a lot of other great pathways and I can tell you that I know a lot of highly successful people that never worked a day in their life at the Big Four. Maybe they never worked a day in their life, in industry or in public accounting. They went right into industry. They rose up through their organizations and, you know, they're the CFO or maybe in another leadership role. So you don't have to go into public accounting. You don't have to go to the big four. But. Invest the time to to learn and understand the options and then do what you feel is the best fit for you would be the advice I would give a student.
Blake Oliver: [00:52:48] One of my favorite interviews I've done on this podcast, actually, I think it was on the accounting podcast, was with the CFO of Crumbl Cookies. His name is Michael Card and he started as a bookkeeper in his mother's tax practice, a small firm and crumbl cookies. The massive cookie store chain was a client when they were a startup and they asked him to do their bookkeeping and eventually they asked him to come in-house. And he did. And he was intellectually curious. And kept rising up with crumbl cookies. And they they kept promoting him because he kept figuring out how to do the job. And now he's the CFO. And you've never met a more humble person. But he says, you know, when I asked him how did he learn to do this job without going to school for it, you know, going getting his MBA or whatever, he said, I just ask questions whenever I didn't know how to do something. I asked.
Speaker3: [00:53:52] Yeah, that's.
Jerry Maginnis: [00:53:53] That's great advice for any young person, by the way. I think a lot of young students, young professionals feel that they should know the answer. Right. And they're a little intimidated to ask somebody or for help or I'm not sure I understand what I'm doing. And I'm a big believer in that old adage like, there's no such thing as a stupid question. If you don't know the answer, ask. I mean, spend a little time, do a little research, try and figure it out. Don't be running down the hall every five minutes asking your boss. But yeah, if you're sitting there spinning your wheels, absolutely. Put your hand up and. And that intellectual curiosity. I know I keep coming back to it, but it's so important to sort of get beyond the accounting even and ask questions about the business and why they're doing some of the things they're doing. Some of the best conversations I've had with like CEOs and board chairs is when we talk about strategy and what the company's trying to achieve in terms of value creation, That's when their eyes light up and they get really engaged. I must admit, a little more so than when you're talking about the financial statements.
Blake Oliver: [00:54:59] So I think you may have already at least partially answered my last question, which is if you could go back in time and give your younger self advice, what would it be? What do you know now that you wish you knew at the start of your career?
Speaker3: [00:55:15] Yeah, it's.
Jerry Maginnis: [00:55:16] A great question, Blake. And I should probably reflect a minute. So, you know, I was fortunate to have a lot of great opportunities and, you know, really enjoyed my career and the different things I did and continue to do. But I would tell you, like in the first 4 or 5, six years of my career, I was very focused on developing my technical skills and being like a really good accountant, you know, and understanding the latest FASB and how it impacted my my client pronouncement. And so I probably invested, you know, virtually all my time just developing my technical skills. And I think that served me well in the long term. But I was probably a little behind on some of the soft skills that we've talked about on this episode today. And so I would, you know, if I had it to do over again, I would just think about my overall allocation of time and where I was investing it. And I would of course, continue to devote a majority of my time to developing my technical skills. But maybe I would have gone to a few more networking events. Maybe I would have joined my state CPA society a little bit earlier and begun to develop some relationships outside the firm. So that's one thought that comes to mind.
Blake Oliver: [00:56:35] Those relationships are so important. And that's something I hear a lot from successful people, is build those relationships. Don't ignore it in the early part of your career because that's your that's the currency of your career in many ways.
Speaker3: [00:56:54] Actually have a chapter.
Blake Oliver: [00:56:55] In the book line of technical knowledge.
Jerry Maginnis: [00:56:57] Sorry, sorry to interrupt. I have a chapter in the book that's called Relationships, Relationships, Relationships. And it's so important. I repeated it three times. But yeah, it's it's critical and not just to your success in your current job, but maybe to your longer term career prospects as well.
Blake Oliver: [00:57:16] Well, I think that's a great way to end this. The book that we've been talking about is advice for a successful career in the accounting profession, how to make your assets greatly exceed your liabilities by Jerry McGinnis, CPA. You can get it on Amazon. You can get the hardcover or Kindle or audiobook. So pick up a copy and turbocharge your career.
Jerry Maginnis: [00:57:42] Yeah, well, thanks again for having me today. Blake. Really enjoyed the discussion. We covered a lot of ground and it's been fun.
Blake Oliver: [00:57:49] Hope to see you again soon, Jerry. Thanks for coming on. Take care. Thanks for listening. I hope you enjoyed this episode and that you learned something new. And if you did, wouldn't it be nice to get some CPE credit for it? Well, I've got great news. My new app, Earmark CPE, offers free Naspa approved CPE credits for listening to podcasts, including this one Visit Earmark Cpcomm. To download the app, take a short quiz and get your CPE certificate. That's earmark cpcomm.