Ep 51: The Future of the CPA Profession in the Age of AI with Mark Koziel

Welcome to Everything CPA and Private Equity, where we unpack the evolving relationship between accounting firms, private equity, and other strategics. I'm David Wolfkell, and I'm Phil Whitman, and we've chatted with more than 150 private equity groups. We've actually closed over 40 transactions with those private equity groups, and we're bringing you firsthand insights from the front lines. And whether you're exploring your first deal, putting your toe in the water, refining your strategy, we're here to guide you with real stories, expert advice, actionable takeaways. Let's dive in.

Hello everyone and welcome to another episode of Everything CPA and Private Equity. And I am so proud to be at the AICPA Engage conference 10th anniversary, and I'm here with Mark Koziel, the CEO. I really feel blessed, have to pinch myself. This is a special moment for not only us at Whitman Advisory, but for all of you, our listeners and viewers out there. So, Mark, you know, we're just going to have a conversation. I guess the first thing I'd like to do is say congratulations. It's been an absolutely wonderful event. We decided to show up in a very big way this year. We've got about 17 of our folks and we have a beautiful pavilion, and it's really the way to go, and all you folks have just been really, really kind and special, and I want to thank you for that.

Yes. Yes. You know, it's interesting. When I first started what's now Whitman Advisory, it was just me. Three years in, I added a stay-at-home mom, but I had come from an environment where I had an organization with about 100 administrative folks, as the COO of a top 100 firm. And I kind of missed that. And we've now got to the point where we're large enough – we like to say we're the single largest advisory firm helping CPA firms in the nation, with 52 people – and I certainly can understand the ability to execute when you have scale, and you do have an amazing team. I remember the days when it was just me, and I was trying to get a Gail Crosley or a Steve Ericson to come into New York City, and I'd be doing these CPE sessions and hammering away on the phones trying to get 24 people into a room. It's a lot of work. But the attendance I've seen here today and the number of people is simply amazing.

This is the biggest, this has been the best. This has been really awesome.

And I look around, I see people with smiles, and it was very, very thankful for this. So I kind of want to shift, and we'll keep this casual. There's a lot going on in our industry. And you know, no matter who you speak with, if they're an influencer or a voice that's heard in our profession, you keep hearing there's never been as much change in our profession as what we're seeing now. Share, from your perspective, because as you said, you were at the AICPA, and then I believe when you detoured out, you spent some time at a lineal, a great international association of firms, some great clients of ours there. How do you compare seeing what you see today here as CEO of the AICPA compared to when you were interacting with a much smaller group of firms? What does all this mean to you and the direction you hope to take the AICPA with all these changes?

Remember those days.

You know, how is that providing talent on how to audit, how to have critical thinking, how to interact with a client – all those skills today are so much different, and we've transformed into that already. Yes, we haven't quite kept up. And this is the same on business and industry. I've had a lot of conversations with CFOs bringing new associates in. They used to do the debits and the credits. Now they're being asked to do the critical thinking and analytics immediately, but they haven't done the base. This is where I see it as our job. We keep talking a lot about a simulator model, get the training up. So that's all well before AI even comes into play. Now AI comes into play and it changes it even more, but we're still in the same game. This is where, talking about advisory, talking about the different things we need to do, I see it as even greater opportunity. And we are hitting this kind of cliff on talent that is going to be unstoppable. The fact that the number of students each year coming out of school in total are less than they're ever going to be, and far less than we're going to have in retirements and CPAs. So we need to figure out how to do things differently anyway.

What you said absolutely resonates with me as someone that used to be in a firm trying to recruit that talent, and now having an organization where we go out and provide talent solutions. Do you think that with AI, you know, we always say the PCPS section every year, didn't matter small, medium, large, giant-size firm, talent was always on that list of one of the pain points, most years at the top of that list. I would always say, as a former COO that was on that side of the desk trying to bring that talent in, and now as a provider trying to bring that talent to all of our clients, the perception that – and I've been in 42 years, by the way. I remember my first portable computer, it was like 45 pounds. It was a Compaq and the keyboard folded down, and it was a five-inch monochromatic amber screen. And we were proud to lug that. I got a portable computer with a 5.25-inch floppy discs that you would stick inside. But in any event, as it relates to talent, you know, the Big Four historically hire about 75% of all graduates. Now, when you and I went to school, the Big Four went to select schools. They didn't hire everyone from every school. I think back then, if a Big Four hired you, you wanted to have that on your resume. They were very selective. It was a really big deal to me. Today, the Big Four hire 75% of accountants from all over, from every university, as long as they're good quality folks. I understand young folks still wanting to get that on their resume. Now we're hearing the Big Four are hiring less. They've got tech. Do you think talent is a problem that will ever go away?

Which firm was that?

Okay.

That's right. Because the manager, senior manager is where we start now. But we're going to need to invest that talent, because there's going to be – and we can never ask the universities to teach that, because they're going to need to do it on actual client.

It has to be on-the-job training. It has to be – you're the partner, I'm that young person, I've got to be attached to your hip and be a sponge in order to learn. Because I graduated in '83. I started at Price Waterhouse, a year and that was it. I ended up going to a large international firm, Spicer & Oppenheim, who ultimately blew up. They had a big insurance claim. I left before then. But in '86, I started a restaurant business. I left public accounting. I did audit, I did tax. I had this opportunity. We did a private placement memorandum, raised about $687,000. I got into the restaurant business. But in 1991, we were out. Had massive layoffs, Bluepoint Labs closed up, and we all left. Fast food would be recession-proof. I was a Popeyes Famous Fried Chicken & Biscuit franchisee. Had a five-store contract really early. There were no Popeyes anywhere here in the Northeast, not like there are today. But in any event, I exited that business in 1991 and decided to go back into public accounting – fried chicken for the rest of my life. So it was so hard getting a job. I was fortunate. I landed a per diem job at Citrin Cooperman from February 15th to April 15th. Yep. I worked with Joel and Niles, and they were getting ready to move. They were outgrowing their space. I literally worked in a closet because they were busting at the seams. I was a senior tax accountant. Probably back then making about $30,000 a year. And they said April 15th came and they said, 'You did a wonderful job. After we move to new space, we'll reach out to you. Stay in touch. Maybe we'll have a job for you.' And literally a week later, they called me up and said, 'Phil, we have a client. It's a law firm. They've been leaned and levied by the IRS and New York State. Can you go in, straighten them out, six to eight weeks, and by then we will have moved and we'll have a place for you.' That's good. And that's how my practice management career was born. But 1991, firms were not hiring. That's right. I mean, for me, it was a per diem job. And you know, that was in the day that you couldn't go online.

That's right. And it also shows the resiliency of the profession. In '91 we suffered through that, and by '94 we're short. Yes. And then I don't know that we've ever recovered since, to be honest. I remember the shortage ever since. But careful, yes and no. Part of the issue is, in this year especially, we actually have a surplus of candidates because of the change – 40 states have already passed adding a bachelor's plus two. So you have bachelor students and 150-hour students all coming out at the same time in 2026, more than we've seen. And this is why, going back to the simulator model and talking about why it's important to the firms – American Airlines hires pilots, but once they hire the pilots, they bring them to their simulators to learn on American Airlines equipment. They don't do it in the air. They do it down in Miami. I actually have a neighbor who is a trainer for American Airlines at the Miami simulator.

We don't want new associates crashing our clients either. So let's get them in a simulator. They can learn there. You can even have an AI. And that's the thing – we're building the simulator. It will be scalable to all size firms. I'm excited about that. That is part of our job to really help move the profession forward with that. I think so. So talent is absolutely something we're keeping a pulse on. I do believe that part of the challenges up until this point, and I think it's going to dissipate a little bit, is Big Four would hire 75%, and many of them work the way we used to work, like baby boomers – 60, 70, 80, 90 hours a week, week in and week out. And some of the people that leave, okay, they're still very good, but they get burned out. I think as a profession we haven't done a wonderful job educating those folks that go to the Big Four that the middle market world, once you go down, it's very different. We started rolling out the red carpet in the early 2000s because we had that problem. And so sometimes the middle market firms never get a chance at hiring some of these wonderful people because their perception is this is what public accounting is about, this is what it's going to be like no matter where I go.

Excellent. Switching over to AI, you know, there's a myriad of vendors here in the exhibit halls. Some seemingly overnight have popped up, and some of them are making real tracks. Some of them are very aspirational. But if you were to look into your crystal ball, let's take it forward five years from now when it's the 15th Engage and we do have 10,000 people showing up. What does that exhibit hall look like? Do we have more of those AI vendors, or has there been a little bit of a shakeout? And do you foresee any other changes coming? Because we as a profession, whenever there was an event – Y2K, wonderful event; the dot-com bubble, there were opportunities that arose out of it for CPAs; the maid-off scandal; anytime there was something bad, then we had the housing crisis, and maybe for a short period things were bad, but then things really started to boom after that. We were as a profession able to react to things. Even the pandemic, the PPPs and the EIDLs and the extra work – some firms monetized it, some firms didn't. But in all good economies, bad economies, travesties, tragedies, the CPA has always been very resilient and has come back to be stronger and more profitable. And that was before AI was here. Look into your crystal ball. What do we look like as a profession in five years? Those people that start straight out of school that we just talked about – what are your thoughts on that?

So now you're the first person that has really shared that vision with me about the CPA appending on the certification of the security of the AI that's in the companies as it relates to governance. As I walk around the exhibit hall, I see, as you said, a lot of application-focused AI companies, but there's no one there – everyone's talking about AI, but there are relatively few people that are really focused on talking about AI governance. We always say you've got to put it in a sandbox, you have to have guardrails. And just to share with you, we actually – they're here. They're a strategic partner. I happen to be introduced to this company called Huge Data Forms. Imagine this CEO, brilliant guy. It's a team of three right now. But he put together an AI, it's called the AI Governance Lab. And what did I do? I called a CTO at a big firm that I knew, and I said, 'Do me a favor. I think there's something amazing here for CPA firms.' And he runs a group of about 200 CTOs across the country. He sat in on a demo, and after the demo he said to me, 'Phil, you are sitting on a gold mine. Every CPA firm needs this. And not only that, it would be an amazing advisory service offering. Every business, every CPA firm needs this.' So AI governance is real. I mean, people don't realize – a partner gives a young kid, 'Hey, here's a letter from the IRS. Write a response for me.' I used to get that kind of stuff. I got a – you know, 'Joe wants me to write, I don't even know where to begin. I've never done this.' Back then I couldn't take it to ChatGPT or Copilot or any one of those large language learning modules, LLM. I always like to throw language in there. I don't know why. But in any event, kit scans that in, that information is out there. So I think people don't realize. I think people are either very impressed with the speed with which they get an answer, which I know sometimes is not the right answer. And the reason they call it large learning modules is because it gets smarter. I tell it, 'No, you're wrong,' or 'What about this? Have you considered this?' 'Oh, you're right, by the way,' and then it becomes smarter and smarter. But AI governance, I think it's critical. I think we're going to see – we've seen rogue AI tools start to buy cryptocurrency on their own and get into people's emails. So I always tell people, you have to be inquisitive, you have to explore this stuff, but you have to be very, very careful.

So, but I love that. And again, you're the first person that shared that vision.

Yes. And that mindset – when we initially launched an offshoring partnership, it was Sue Coffey. It was during the pandemic, maybe 2020, 2021, at an AICPA Council meeting. She said, 'With all the PPPs and the EIDLs, there's not going to be enough water to go around.' We went to the Philippines. We found Parker. A year after we inked the agreement, you know how many CPAs from the Philippines we had working with our CPA firms? Absolutely zero. And you know why? Because everyone we talked to said, 'Who else is using it?' The thing that you just said – and then we were fortunate, we had one firm that didn't say that. Today we have about 250 people in the Philippines, and it's been amazing. But AI is coming, right? And I think all these offshoring companies, they also are going to have to – that simulator you talked about – they're going to have to step up those people, otherwise firms aren't going to use them. So as we wrap up, Mark, there are so many different directions I could have taken this, and I've really enjoyed this. Is there anything you'd like to share with our listeners, your thoughts? Anything that I haven't asked you?

So, awesome. Great. Thank you, Mark. For our listeners out there, it's been a pleasure to be here in Las Vegas at the Aria Hotel. We're with Mark Koziel, CEO of the AICPA. If you've liked this, like it, subscribe, and share it with your friends. And if you're not a member of the AICPA, you're missing out on tremendous opportunities. The collaboration, the networking – it's absolutely worth every penny if you do so. If you're not a member, please, this is what you get. Some wonderful thought leadership with an amazing team behind them. Again, Mark, I thank you so much.

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