Thought Leadership

Move Forward from 2020

Learning leaders in the accounting profession did a remarkable job responding to the unprecedented challenges cause by the pandemic.  Learning teams had to pivot quickly to an online curriculum, converting untold hours of CPE credit from live-seminar training.  Now that you’ve achieved the immediate goal—survival—what’s next for learning?

It’s been said that “you never want a serious crisis to go to waste,” which we take to mean that a crisis gives you an opportunity to do things you weren’t able to do before.  For years, accounting firms have envisioned a robust remote learning offering; the pandemic created the imperative to make that happen.  But more remains to be done, and our view is that now is the time to build on the successes from last year.

Here are three opportunities for 2021 that CPA firm partners and learning leaders should address. (more…)

Tips for Organizational Skills Development

I recently did a presentation on upskilling for digital transformation.  At the end of the presentation we discussed how skills development is different from teaching someone a technical topic.

Here’s a summary of the slide where I discuss what we’ve learned over the years about how to develop skills across an organization.  (I know, it’s kinda long.  But hopefully it’s worth it!)

 

Remote Auditing Isn’t Just a Technical Challenge

As a former self-described audit nerd, I can appreciate the technical challenges of remote auditing.  But I think that the people side of remote auditing–the supervision and management of teams working at home–will end up being more problematic in the long run.

Established protocols vs. figuring it out on your own.

Institutions, protocols and norms exist for resolving profession-wide solutions to technical problems.  As I write this, I have no doubt that the AICPA is working with a bunch of smart and experienced practitioners to develop guidance on the technical challenges of remote auditing.  They will come to a consensus and publish their views, which auditors will apply.  That’s how the profession handles technical challenges, and because we have this process figured out, we will see solutions to the technical challenges emerge quickly. (more…)

Three Tales from the Front Lines of Audit Efficiency

Going into this busy season, all of our audit clients are laser focused on improving efficiency, and rightfully so.  We’ve always believed that the foundational skills at the heart of our upskilling curriculum—critical thinking, problem solving, communication—are not just important for the future, they can help improve productivity now.

Take a look at the most productive people in your office, the ones everyone turns to when something absolutely has to get done and get done right.  Imagine them with just average problem solving or communication or critical thinking skills.  All of a sudden, they seem pretty average.

Firms looking to improve audit efficiency are now gravitating to improved project management skills as a solution, which is right on point and so much better than the approach most firms took when I was coming up (“Our sample sizes are too big!  Reduce sample sizes!”)

It’s no secret that most jobs lose profitability because the seniors don’t manage the audit very well, leaving the partner and manager to wrap the job and perform tasks that lower billing rate staff could have and should have performed.

“If only they were better project managers!”

We firmly believe that project management skills are an important foundational skill set, which is why we build it into most of our courses.  Of all the skills in our curriculum, project management skills have the most direct impact on engagement realization and profitability.

But project management skills alone are not enough.  Sometimes, the real reasons why managers and partners put more time into the project than originally planned have very little to do with project management.  Here are three stories from our training classes that illustrate the need to look beyond project management for answers to the inefficiency problem.

The 1% solution

I was a participant in a webcast for a data analytics software vendor.  One of their users made a presentation in which he extolled the virtues of the software and all the ways they used it to streamline substantive tests on their engagements.  He said, “we save an average of 4 hours on each job.”

Which begs the question “whose hours?”

The efficiency problem isn’t that the staff are spending too much time on the job, it’s that the partners and managers are spending time doing the work the staff should have done but didn’t.

Later, when I did the math, I figured that 4 hours of staff time saved amounted to about a 1% improvement in realization on a typical solution.

When looking for efficiency gains, firms should set a higher bar.  Not only is a 1% gain not that great, it provides no sustainable competitive advantage.  Any firm with the same software can easily get the same results.

If you have a powerful tool like data analytics, why not use it to tackle your most difficult problems.  The band’s best singer sings lead.  The team’s best defender guards the rival’s best scorer.  If data analytics is your auditor’s most powerful tool, why use it to get a 1% return?

One of the reasons partners and managers run up engagement costs during wrap up is that audit issues are discovered late in the audit.  One of the main causes of this problem lies in the low value flux analyses that most audit teams use to identify risk and plan their audits.

In our introduction to data analytics course, the case study works to drive efficiency through better planning that identifies issues earlier in the audit.  We teach the participants to use data analytics to provide more visibility into an underlying data set and perform more meaningful analytics.  The result is the identification of several unexpected audit transactions and relationships the team can investigate early and resolve while they are still assigned to the engagement.

Moral of the story  Redefine the purpose of audit planning to emphasize the early identification of audit issues, and repurpose your best people and tools to achieve that objective.

Practice tip  If an unresolved issue winds up on the partner’s or manager’s desk, the first question to as is “should we have identified this issue earlier in the audit, and if so, why didn’t we?”

Preparing the Cash Flow Statement

A firm asked for our help with a staff training program, and when we talked about the topics they wanted to include in a course, a manager told me, “preparing the statement of cash flows.  The staff can’t do it, so I have to.”

“Is that a task a staff auditor should be able to do?”

“Absolutely.”

As it turns out, the firm had included preparing a statement of cash flows in their curriculum for a number of years, and so kudos to them for acknowledging the obvious:  their training wasn’t working.

Not all the issues a firm faces can be solved through training, but the task of preparing a cash flow statement is one that can.  Why, then, was the firm unable to solve the cash flow statement problem through training?

Firm leaders recognize that training must be about building skills and competencies and not just “getting everyone their 40 hours.”  The key to making sure your training does its job is to focus on training outcomes not just reactions.  It’s common for firm leaders to assume that if a topic is on the training agenda then their people must have been “trained.”  Or they measure the success of a program based on whether the participants liked it or the classroom was lively.

Instead, firms should work to create clearly defined learning objectives and gauge the success of the course based on its ability to meet those objectives.  If the purpose of teaching staff how to prepare a statement of cash flows is to reduce the time partners and managers spend on that task, then the measure of training effectiveness should be whether managers and partners are spending less time on the statement of cash flows.

Moral of the story  Demand more from your training.  If you’re not getting the business results you need, then it’s time for a change.

Practice tip  When planning the year’s training agenda, firm leaders and learning managers should ask, “what are the desired training outcomes and why these are important for the business?”  At the end of the training season, they should meet again and ask whether those objectives were met.

The meaning of “done”

Early in the design phase of every custom training program, we ask stakeholders to describe the practice problems they want to solve through training.  We were working on a project management program for an audit department and during one of these early discussions a partner told me “seniors don’t know what it means to be ‘done.’  Their definition of ‘done’ is not my definition of done.”

Had we been involved in an efficiency project and not building a training course, the obvious follow up question would have been, “do you have that conversation with your seniors?  Do you tell them what being ‘done’ means to you?”

The Gallup Employee Engagement survey is the gold standard for measuring what drives productivity.  For over 30 years, they’ve been asking managers and employees the same 12 questions to help understand what managers should do to improve employee productivity.  The question that is most often linked to productivity?  “I know why is expected of me.”  In other words, employees who have a clear understanding of their supervisor’s expectations will be more productive than those who do not have this clear understanding.

Moral of the story  Your audit teams need to know what you expect from them.  Tell them what it means to be “done.”

Practice tip  Project management training should be specific to auditing and to your firm’s unique needs.  Learning objectives should be built around explicitly stated manager expectations.  Use training to communicate and drive consistency about what “done” means at your firm.

Conclusion

Improving the project management skills of audit supervisors will help them improve efficiency.  But this training should be just one piece to a multi-pronged approach.  Look holistically at efficiency and be thorough in exploring root causes of the problem.  Some of these causes may have nothing to do with project management, and so they must be addressed through other means.

Be sure to check out our Audit Efficiency webcast series

Participant Takeaways from Our Data Analytics Pilot

We just wrapped up the pilot from our data analytics intro course, Think Like a Data Scientist, and I’m calling it a win.  At the end of all of our courses we ask “what are your takeaways from this experience?” and hopefully what they say matches up with, you know, our learning objectives.

Here were the participant takeaways from the course.

  • It’s not about the software.  You don’t have to be an Excel or IDEA (mindbridge, whatever) guru to analyze a data set and get meaningful results.
  • Use the right tool for the job.  Sometimes, a simple pivot table can give you what you need.
  • Think like a data scientist.  We teach them a structured approach to analysis that we call the data analytics lifecycle.  It focuses on framing the problem and forming a hypothesis (or as they say in the auditing literature “an expectation”)
  • Spend time on your planning analytics.  A good planning analysis will help auditors identify audit issues earlier in the engagement, which has a direct impact on realization.

Maximizing ROI from Digital Transformation

Maximizing ROI from digital transformation requires a combination of technology, process re-engineering and skills development.  Here’s a slide from a recent presentation I did that describes our thinking.

The Future of Audit

Pre-pandemic, the auditing profession had invested significant resources over many years to redefine the profession.  COVID-19 took the “future of audit” off the front pages, and it may have dulled the momentum at most firms.  But the underlying trends driving the imperative to re-imagine auditing have not changed.  After diverting resources to deal with the immediate problems caused by COVID-19, firms are once again moving forward with the deployment of new technology, upskilling their professionals, and taking other measures necessary to build a solid foundation for the future. (more…)

Upskilling for Digital Transformation:  Managing Resource Constraints

Organizations committed to growth through innovation understand the need to address their professionals’ emerging skills gaps. The first two articles in this series describe an approach to reskilling professionals for digital transformation that will require many organizations to re-examine their current training strategy. 

Finding the will and the way to undertake skill building for digital transformation starts with buy-in at the senior leadership level and the allocation of significant resources to make an impact. 

(more…)

The Challenge of Training for Digital Transformation

Digital transformation is a long-term strategic initiative. Skill building requires practice. It requires an experiential approach that not only rewards success but also allows the learner to fail, receive coaching, and practice to get better.

Developing the skills needed for digital transformation is no different. Organizations won’t be able to move the needle through lectures that explain critical thinking or problem-solving.  Their professionals will need practice. Lots of practice.

(more…)

Upskilling for Digital Transformation: Part 1

Accounting firms see digital transformation on the horizon and realize they must navigate a significant skills gap. The competencies for which their professionals are most proficient are not the same as those needed to leverage emerging technologies to transform their value proposition. Closing this skills gap is imperative.  

(more…)

Nature or Nurture—Can Critical Thinking Skills Be Taught?

Reporting from the Digital CPA Conference, Accounting Web took away the following from a panel discussion on recruiting.

Panelists agreed that CPA skills over next 3-5 years would need to be consultative, analytical and data-driven.

We couldn’t agree more.

At this point we’re all preaching to the choir, so the questions firm leaders need to ask are: “Are these skills teachable? If so, then what role can formal training play in developing them?”

(more…)

Future of Finance:  Tips for Skills Training

Technical training is fairly well-defined, and learning outcomes fall within a fairly narrow range even with a broad directive like, “Train on the new standard.” Skills training is different. There is no generally accepted standard for problem-solving or data analysis

When considering the development of new skills, firm leaders should ask questions like:

  • What do we want our people to do differently from what they are doing today?
  • If a business unit requested help preparing a budget today, how would finance respond? In the future, how do we want them to respond so they deliver higher value to the business unit?

(more…)

The Future of Finance Essential Skills

There is wide agreement that finance and CPA firm professionals need to augment their existing skill sets to prepare for future technological upgrades. New technology is altering how finance, accounting, and auditing professions proceed, so how should professionals prepare for what’s coming?

(more…)

Essential Skills for the Post-Pandemic Reset

For over a year we’ve been building curriculums and courses around “upskilling” for the audit and finance teams of the future.  We were actually getting ready to launch our own live seminar training programs on data analytics and advisory skills this summer.  Then the pandemic hit and everyone’s plans for live seminar training came to a halt.  

Instead, we spent the spring helping businesses rethink their training programs and converting live seminars to distance learning.

(more…)

Distance Learning – FAQ

We’ve gotten a good response to our article “Training in the Age of COVID-19 The Distance Learning Option.”  Thanks to all of you who submitted questions.  Here are our responses.

  1. We agree with the need to set goals for our distance learning and definitely do not subscribe to “get them their 40 hours” approach.   Do you have any suggestions for what might be “reasonable goals” given everything the firm is going through right now?

    In general, we believe in setting high goals for your learning programs.  Don’t settle for mediocre and always strive for improvement.  All firms want to be known for their excellence—nobody pitches prospects with “we’re not bad.”  The learning group has to hold themselves to that same professional standard.

    That being said, we are certainly in a time of rapid change and unprecedented uncertainty as we look to the future.  Learning managers have to carefully gauge the firm’s capacity for “continuous improvement” in the midst of such upheaval.

    On balance, here’s what seems reasonable to us:

(more…)

Distance Learning Design, Part 2

Once you have clarified your goals and assessed what you need in order to pursue the correct distance learning model, it’s time to get down to brass tacks and choose what you’re going to teach and discover what needs to be included to manage training in the most efficient way possible.  (more…)

Distance Learning Design, Part 1

For the past few years, MRA Learning has created customized distance learning events for a variety of businesses and accounting firms. Based on our experiences, here are some recommendations for the firms that are exploring high-quality distance learning options for previously scheduled in-person training. 

(more…)

Covid Makes Distance Learning a Must

With the training season for accounting firms just a couple of months away, now is the time to develop contingency plans for distance learning should live seminar training classes be cancelled – a very real possibility as COVID-19 cases continue to rise in the United States. 

Accounting firm leaders have already modified many aspects of their businesses in response to the coronavirus pandemic. Having grappled with travel restrictions, client service issues, and office closures, they will soon confront another multifaceted, complex challenge – whether and how to move live seminar training to the internet and other distance learning models.  (more…)

The Link Between Data Analytics and Internal Control

Auditors are required to “gain an understanding of internal control” on all audits because—in theory—this knowledge will help them refine their assessment of risk and modify their audit approach accordingly. (more…)

Data Analytics – Internal Control Discovery

We created a data fluency program for staff auditors at a large regional accounting firm. Included in that program was a lengthy discussion of data quality, including the importance of internal controls. We provided all participants with techniques and practice aids to help them identify conditions that may impair the client’s analytics readiness. (more…)

Questions to Ask & Answer when Establishing Your Firm’s Learning Program

Firms that address and seek clarity around some specific questions will undoubtedly have better learning outcomes that will drive their own profitability in the long run. These questions help a firm stay focused on embracing a learning culture, institutionalizing key learning function, and delivering high quality training experiences that support the firm’s mission.

Click here for the complete white paper.

Post-Merger Blues: Revising the Audit

One of the most difficult issues facing merged CPA firms is also one of the least glamorous—the need to combine audit methodologies. For many reasons, the project certainly must be tackled—sooner rather than later. Read more to learn why the natural tendency to accommodate multiple methodologies is not only inefficient but can undermine the merger itself…

Download complete paper.

How to Run Training Like a Business

Leading CPA firms spend 1.5% – 2.0% of their revenue on training–a sizable investment.  We believe firms would realize a much greater return on the learning investment if they brought a business-like discipline to the management of their training function.  Read more for actionable advice on how to instill that discipline.  Co-authored with Cate Miller, CLO of Dixon Hughes Goodman.

Download complete paper.

Return on Learning

Accenture Learning did a study of the training records of over 200,000 accounting and consulting professionals.  This study established a statistically valid correlation between the amount of training received and the tangible economic benefit delivered to the firm in key metrics such as chargeable hours and billing rates.  This one page summary will help you understand what has become the gold standard within professional services firms for understanding Return on Learning.

Download summary.

3 Tips for Creating Learning Metrics

CPA’s measure things–it’s what we do.  Beyond the “smile sheet” course evaluations, most firms are at a loss to figure out how to gain insight into the effectiveness of their learning programs.  Our goal is to help firms improvid learning outcomes, and establishing the right metrics for measuring outcomes is a critical component in building a learning culture that supports the firm’s business strategies.

Download complete paper.

3 Tips for Building a Learning Curriculum Plan

Curriculum plans answer the questions “what should we teach, to whom, how and when?”  We agree that this is a foundational questions not just for learning, but the entire HR and talent management function.  If you’ve struggled to create a curriculum plan, learning ladders or competency maps, you are not alone.

Download complete paper

4 Ways to Maximize CPE ROI

We recognize the importance of measuring ROI from learning, but we see too many instances where firm leadership becomes to fixated on establishing precise measures.  Our view is that firms would be better served by asking the more subjective questions, what should we do to make sure our training dollars are being spent wisely?

Download complete paper.