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Nobody Is Going to Hand You Power, So Here’s How to Build Executive Presence on Your Own Terms

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Lindsay Patterson’s very first day as a reporter should have been routine. Twenty years ago, she walked into a small community meeting in Uvalde, Texas, fresh out of college, holding a notepad and recorder, ready to cover a state representative’s remarks for the local paper. She sat down, pen ready. Then the representative stood up, scanned the room, and asked whether anyone from the Uvalde Leader-News was present. When Lindsay raised her hand, he announced he wouldn’t speak as long as she was in the room.

She didn’t stand her ground or fight back. She walked out, sat in her car, and cried.

Today, Lindsay is the CEO of CPA QualityPro, a compliance platform that helps firms navigate licensure and CPE requirements. She’s served as executive vice president at the Institute of Internal Auditors and spent years at the AICPA working on accounting standards and the CPA exam. She holds multiple certifications, including CPA, CIA, and CAE, all earned while working full time and raising kids.

In Episode 30 of She Counts, the real-talk podcast for women in accounting, Lindsay joined hosts Questian Telka and Nancy McClelland to unpack a frustrating phrase in professional development: executive presence. It’s the vague feedback that shows up in performance reviews as the reason you didn’t get promoted, without anyone explaining what it means or how to get it.

Women are often told that executive presence means adopting traits traditionally associated with male leaders. Lindsay argues that the real measure is much simpler: whether the people around you leave interactions believing you’re the right person for the job.

 

Redefining Executive Presence

Many of us absorbed a version of executive presence without questioning it. “I had a very traditional view of executive presence. It’s like the three-piece suit guy pulling out a pocket watch,” Lindsay said, admitting where she started. “He’s speaking aggressively and assertively. I’m like, oh, that guy has executive presence.”

Nancy shared her own assumptions. For women, she thought it meant Chanel bags, specific jewelry, and perfect polish. “I will tell you, if we’re going to judge me on my ability to make that happen, I will fail,” she said. “I look like I’m dressed up for a high school play or something.”

But Lindsay’s working definition is simpler. “If you were to distill it into simple terms, it’s just instilling confidence in people. Are people confident I can do a good job? Can I lead the team? Can I deliver results or do what I say I am going to do?”

The research backs this up. Lindsay cited the Coqual findings that gravitas, or how you present yourself, is what people overwhelmingly evaluate for executive presence. Communication makes up about a third. Appearance is only 5%.

This is good news for anyone worried their personal style disqualifies them from leadership. Lindsay owns a fully sequined black suit and has worn floor-length tutu gowns to office meetings. She’s also been a CPA Practice Advisor 40 Under 40 honoree and runs a successful company. The two things work together just fine.

But Lindsay was clear that executive presence is not “overtalking people, interrupting, being really aggressive and mean.” She added an important caveat. “I say that’s not what it should look like. But we have to recognize it is viewed that way in some office cultures.”

She shared a story that made Nancy ask if it was real. At one company, a man criticized another executive for wearing a Rolex because it showed “new money.” If you wanted to instill confidence as a leader, apparently you needed at least a Patek Philippe. “What?” Lindsay said. She didn’t last long in that culture.

The story might be absurd, but it shows something important. In many places, executive presence gets defined by an unspoken code written by and for one specific kind of leader. When that code becomes the standard for measuring women, the game is rigged from the start.

The Double Bind: When the Rules Work Against You

Even with a better definition, women face a structural problem. The same behaviors that signal confidence in men get labeled as aggression in women.

“How often do you hear in performance reviews that a male was aggressive? Never. That gets assigned to women,” Lindsay stated plainly. Being direct, standing firm, and pushing back in meetings gets men praised for “standing up for their beliefs” while women get called “difficult” (or worse).

Then there’s what Questian called the competence-warmth trap, referencing Vanessa Van Edwards’ research. If you’re warm and approachable, people see you as less competent. You need both warmth and competence to hit the sweet spot, but too much warmth works against you.

The research on competence perception is even tougher. Lindsay delivered her “good news, bad news” moment. “If I show up and I am just as good as my male colleague, I’m probably going to be viewed as less competent. And there is a whole body of research to show this.”

Women don’t just need to meet the bar. They need to clearly exceed it, just to be seen as equal. That means overpreparing is essential.

The dynamics shift with race, too. Lindsay acknowledged their position, noting, “We’re all three white women.” She’s seen firsthand what she can get away with that a Black female colleague cannot. Nancy put numbers to it. If white women prepare at 120%, Black women face pressure to deliver at 170%.

Then came the episode’s most provocative moment. Questian asked if coaching women on executive presence puts the burden on them to fix a structural problem. Lindsay’s answer was direct. “Yes, we’re asking women to do this. You know why? Because nobody else is going to do it for us. People in power are not just going to hand us power. That’s not how power systems work.”

“The world’s not going to dominate itself,” Nancy said, summing it up.

But Lindsay distinguished between assimilation and strategy. The goal is to work strategically within existing systems by pushing boundaries, gaining influence, and reshaping culture from within. “As we rise to power, not only are we going to instill our own cultural norms, but then you’ll start to see cultures change.”

Your Practical Playbook: Build Presence Through Preparation

Lindsay’s closing advice was the episode’s most powerful line. “Confidence is just preparation. If you do something enough times, you will come across as confident. You will have that executive presence.”

Executive presence is a skill built through practice. Here’s Lindsay’s concrete playbook:

  • Start with an audit. Record yourself before a difficult conversation or presentation. Watch the playback and ask, Does my body language say what I want? Do I sound knowledgeable? Am I the confident person I want this audience to see? You likely already have the material, since most meetings are now recorded on Zoom.
  • Separate sound from sight. Listen to your recording with no video. Just evaluate your speaking. Then watch with no sound to evaluate body language. Then watch both together. This lets you see what each channel actually communicates.
  • Rehearse with your circle. If you have trusted professional friends, use them. Practice difficult conversations. Do dress rehearsals for interviews. Ask for feedback on how you plan to challenge your boss. Lindsay does this with her own circle, and she extended an invitation to listeners. “If you don’t have that and you’re listening and you’re like, ‘I have this interview coming up,’ literally connect with me on LinkedIn. I’m happy to help. Other women did that for me.”
  • Prepare for disruption. Anticipate what typically derails you. “Is Bob going to interrupt me like he always does? Well, how am I going to respond?” Plan your response. When the moment comes, hold your ground without escalating.
  • Master the context. Your presence should shift based on your audience. As Nancy noted, the best version of you when meeting with nervous small-business owners differs from the one you use when meeting with a board chair. Both are authentic, but context defines what instills confidence.

For virtual meetings, have the camera on (especially when presenting), use good lighting, choose a quiet location, and avoid multitasking. Nancy made the trust connection clear. If she can’t see someone’s eyes on Zoom, she doesn’t trust them.

In person, make sure your shoulders are back and your head is up. Look confident and take up space. Lindsay admitted to intentional “manspreading” in meetings. “I have every right to be here, and I’m going to show that with my body.”

Don’t forget the practical details. Rehearse in the shoes you’ll actually wear. Nancy learned this after nearly injuring herself while presenting in heels. Now she presents in go-go boots that match her Dancing Accountant brand. Lindsay shared a cautionary tale about a team member who wore a tube top to an external Zoom meeting. Over a year later, the client still talked about the tube top instead of the meeting content.

The Scared Child Inside Us All

Lindsay shared what she wishes someone had told her 20 years ago. “Most people are faking it. We are just doing our best, trying to get by.”

Nancy connected this to waiting for the moment she’d become a confident adult. “When I realized that line doesn’t exist and a lot of us are carrying that scared child inside us until we die, then you’re like, oh, cool. Well, then I can start taking care of that scared kid because I’m also a confident adult.”

Lindsay offered one more insight from experience. “You could be the most round, juiciest peach on the tree. And there’s always going to be somebody who doesn’t like peaches.” You won’t be everyone’s cup of tea. The sooner you accept that, the sooner you can focus on instilling confidence in the people who matter to your goals.

Your Presence Is What People Remember

Executive presence has been weaponized for too long as vague feedback that holds women to standards built for someone else. But Lindsay’s definition offers us something useful: instilling confidence in the people around you.

The double bind is real. The bar for perceived competence is measurably higher for women and higher still for women of color. These are structural realities, not personal failures. Recognizing them means understanding the terrain so you can navigate it.

The antidote is preparation. Record yourself. Rehearse with trusted peers. Anticipate the disruptors. Adapt to context. You build confidence through repetition.

No one will hand women the keys to power. The work of getting inside the system and reshaping it falls on us. As more women rise by carrying their own authentic executive presence, they can redefine what leadership looks like for those to come.

Questian closed with Maya Angelou’s words: “I’ve learned that people will forget what you said. People will forget what you did. But people will never forget how you made them feel.”

That’s executive presence.

Listen to the full episode, and if you take one thing from this conversation, share it on the She Counts Podcast LinkedIn page. What will you try differently the next time you walk into a room or join a Zoom call?

Beyond the Stock Sale: Allocating Purchase Price When S Corp Assets Sell Individually

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When a buyer offers $1 million for your client’s S corporation, the simplest path is a stock sale. There’s one transaction, one gain calculation, and you’re done. Purchase price minus stock basis equals gain. You could calculate it on a napkin. But most buyers don’t want simple. They want to crack open the corporate shell, pick out only the income-generating assets, and leave the entity (and its liabilities) behind. That’s when your job as a tax practitioner gets exponentially more complex.

In Episode 30 of Tax in Action, Jeremy Wells, EA, CPA, walks practitioners through the intricate mechanics of S corporation asset sales, building directly on the stock sale fundamentals he covered in Episode 29. Using Lighthouse LLC, a fictional single-shareholder S corp with a $1 million offer on the table, Jeremy demonstrates how to classify assets across seven categories, allocate purchase price using the residual method, calculate gains with proper character for each asset, and report everything correctly on Form 8594.

The shell versus what’s inside

Jeremy opens with a metaphor that captures the distinction. “One way to think about this is buying the shell and everything that’s inside the shell, or just cracking open that shell and buying only the stuff inside of it and leaving the shell behind.”

In a stock sale, the buyer acquires the entire entity. Every asset and liability, the brand name, the corporate history, etc. It’s one transaction. For Jessica, the 100% owner of Lighthouse LLC with a $250,000 stock basis, a $1 million stock sale means a $750,000 gain. Simple capital gain calculation. Done.

But the buyer in Jeremy’s example wants something different. Lighthouse LLC carries significant liabilities tied to its property and equipment. The buyer wants the income-producing assets, including the equipment, building, land, customer relationships, and goodwill, but not the debt. Not the entity itself.

This preference flips everything for the tax practitioner. Instead of one gain calculation, you now have to analyze every individual asset on the balance sheet and beyond.

Why buyers insist on asset sales (and why sellers often resist)

Jeremy explains buyers push for asset sales for two compelling reasons.

Stepped-up basis opportunity

When buyers purchase assets directly, they own them outright, not through a corporate intermediary. “It’s as if the buyer purchased those assets from the manufacturer or from the retailer. It’s going to be an original placement into service of those assets by the buyer,” Jeremy explains.

This means depreciation starts fresh. The buyer’s basis in each asset equals the allocated purchase price, not whatever the seller paid years ago. This reset can be enormously valuable for a building the seller has been depreciating for a decade. Nothing changes in a stock sale. The buyer inherits the existing depreciation schedule exactly as it stands.

Avoiding unwanted liabilities

In an asset sale, debts stay with the corporate shell. The buyer takes the assets clean. This is an important distinction for Lighthouse LLC, with its property-related debt.

Sellers, meanwhile, generally prefer the simplicity of stock sales. Jeremy notes they “often produce just a single capital gain, and they avoid the complexity of having to allocate purchase price among assets.” But when buyers insist on asset purchases (and they usually do), sellers often agree, especially when they want to retain the entity for future use or restructuring opportunities.

The residual method

Once both parties agree to an asset sale, IRC Section 1060 takes control, and Jeremy emphasizes this isn’t optional. If you’re selling assets that constitute a trade or business and the buyer’s basis will be determined by the purchase price, Section 1060 always applies.

The section mandates the use of the residual method to allocate the purchase price across seven asset classes, working sequentially from Class 1 through Class 7. Jeremy compares this to reading down a balance sheet because the most liquid assets come first and the least liquid come last.

Here’s how Lighthouse LLC’s assets break down:

  • Class 1 (Cash): $50,000. No gain possible. Cash is just cash.
  • Class 2: None in this example (would include actively traded securities, CDs, foreign currency)
  • Class 3 (Accounts receivable): $100,000 fair market value, but zero tax basis for this cash-basis taxpayer. That means $100,000 of ordinary income.
  • Class 4 (Inventory): None in this example
  • Class 5 (Tangible assets):
    • Equipment: $100,000 tax basis, $50,000 FMV
    • Building: $300,000 tax basis, $400,000 FMV
    • Land: $100,000 tax basis, $150,000 FMV
  • Class 6 (Intangibles except goodwill): Customer list valued at $100,000, zero basis
  • Class 7 (Goodwill): The residual is whatever’s left after allocating to Classes 1-6

With $850,000 allocated to identifiable assets and a $1 million purchase price, the remaining $150,000 becomes goodwill.

But Jeremy offers a crucial warning: “You can’t just treat all Class 5 assets the same because they’re Class 5.” Each asset needs individual analysis. Equipment might trigger Section 1245 recapture. Buildings might trigger Section 1250 recapture. Land never has recapture because it’s never depreciated. Every asset has its own character of gain.

The invisible assets that drive real value

Jeremy dedicates some time to intangible assets because, especially in service businesses, “goodwill actually is the largest asset.”

Treasury regulations define goodwill as “the value of a trade or business attributable to the expectancy of continued customer patronage.” It includes reputation, brand recognition, a trained workforce, documented procedures, modern technology application, and consistent lead generation.

However, “It’s never appropriate to add goodwill, especially self-generated goodwill, to a balance sheet, unless you have a sales transaction,” Jeremy shares. Goodwill doesn’t get a balance sheet value until a buyer actually pays for it.

Practitioners must also watch for personal versus corporate goodwill. Jeremy references Martin Ice Cream Company v. Commissioner, where the Tax Court held that when goodwill exists because of one individual’s personal relationships with customers and vendors, it belongs to that individual, 

not the corporation. This distinction has a big impact on reporting in small professional firms where the owner is the brand.

Covenants not to compete present another wrinkle. They’re Class 6 intangibles, not goodwill, so you must separately identify and value them. Jeremy explains these are especially common in professional firm acquisitions, where the buyer doesn’t want the seller to start a competing practice nearby.

For the buyer, goodwill becomes a Section 197 intangible, subject to 15-year straight-line amortization with no acceleration through bonus depreciation or Section 179. For the seller, it’s Section 1231 property with zero basis, meaning the entire allocated amount is gain.

Your workflow

Jeremy provides a clear workflow for every practitioner to follow:

  1. Get all documents first. You should have a copy of the signed purchase agreement and allocation schedule or proforma Form 8594. Both parties must report identical allocations.
  2. Allocate the purchase price using Section 1060’s residual method
  3. Calculate gain and character for each asset
  4. Report on Form 8594 attached to the return
  5. Pass gains to shareholders via Schedule K-1
  6. Adjust shareholder basis for the pass-through gains
  7. Handle liquidating distributions. Typically long-term capital gain at preferential rates

Jeremy shares a moment of professional conviction. “The client wanted me to just make up some numbers, and I simply would not go along with that.” He won’t prepare the return without proper allocation documentation agreed to by both parties.

His due diligence checklist adds crucial considerations:

  • Review prior depreciation schedules and shareholder basis calculations
  • Check state transfer taxes and sales taxes on tangible property
  • Evaluate installment sale benefits under Section 453. But remember, no help with depreciation recapture or inventory.
  • If the S corp was ever a C corp, check for built-in gains tax under Section 1374

Jeremy also mentions two elections that can treat stock sales as asset sales: Section 338(h)(10) and Section 336(e), though their complexity puts detailed discussion beyond this episode’s scope.

Bringing it all together for your practice

Asset sales are some of the most complex transactions you’ll handle as a tax practitioner. Where a stock sale for Lighthouse LLC requires one line of math, the asset sale demands individual analysis of every asset across seven classes, each with its own basis, fair market value, gain character, and recapture rules.

The residual method provides structure, but it’s not simple. Intangible assets are often the most valuable components of service businesses, and they’re invisible on the balance sheet until the sale takes place. You risk serious reporting errors if you don’t follow the documentation requirements.

Jeremy developed his systematic approach through classroom teaching and real-world practice. And it gives you the framework to handle these transactions correctly. The key is recognizing that in asset sales, you’re not selling one thing; you’re selling every individual asset, and each one has its own tax story to tell.

For the complete technical discussion and to hear Jeremy work through the full Lighthouse LLC example, listen to Episode 30 of Tax in Action. And if you haven’t already, start with Episode 29 on stock sales. Understanding that simpler transaction makes the complexity of asset sales much clearer.

Your AI Isn’t the Problem—Your Ledger Is

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You export a report from your accounting software, spend 20 minutes cleaning up the data in a spreadsheet, paste it into ChatGPT, and ask about vendor spending trends. The AI immediately asks for more context that wasn’t in your export. Back to the source system, pull another report, reformat, and upload again. The cycle repeats.

If this loop feels painfully familiar, you’re not alone.

In a recent Earmark webinar, Megan Reid, Product Specialist at Digits, demonstrated exactly why this workflow keeps breaking down and introduced a technology designed to eliminate it entirely. The webinar unpacks what’s really limiting AI’s usefulness in accounting and shows a fundamentally different approach.

The core message is that Model Context Protocol (MCP) eliminates the export-reformat-upload cycle, but only if your ledger is truly AI-ready. As Megan explained, your financial data architecture now determines whether AI delivers reliable insights or confidently wrong answers.

 

The traditional workflow is fundamentally broken

Let’s walk through what Megan calls the “bolt-on” AI workflow. Most accountants know this workflow far too well.

  1. You export a report. The moment you hit that button, your data freezes in time. You’re working with a snapshot, not live information.
  2. Manual cleanup begins. You’re renaming columns, adjusting formulas and reformatting data. Every manual touch introduces potential errors.
  3. You send the cleaned data to your AI tool. It analyzes what you’ve given it and generates an answer, but it can only see that specific export. No additional context or visibility beyond that snapshot.
  4. The AI needs more information. Maybe vendor history or prior period details that weren’t in your original report. You can’t answer without going back to start the entire process over.

“This isn’t a limitation on the AI,” Megan emphasized during the session. “It’s a limitation on the data pipeline feeding into the AI.”

Megan introduced a powerful concept when she explained that AI acts as a megaphone for your data. When the input signal is clean (i.e., real-time, well-structured, and consistently categorized), AI generates accurate analysis and trustworthy insights. When the signal is poor (i.e, outdated data, inconsistent vendor names, and incomplete transactions), the AI still produces an answer.

“A wrong answer delivered with confidence,” Megan noted, “is often worse than no answer at all.”

The accounting profession recognizes this shift. The Journal of Accountancy states that “the profession must pivot from doing to supervising when AI does the work.” As one industry publication put it, “The industry is shifting from manual data entry to automation, where the accountant’s job is less about performing repetitive tasks and more about defining the logic once and letting the system run it.”

But you can’t supervise what you don’t understand. And you can’t get reliable outputs from a broken data pipeline.

Enter Model Context Protocol

So what breaks the cycle? That’s where MCP comes in.

At its core, MCP is an open standard letting AI tools like Claude, ChatGPT, and Cursor connect directly to live data sources. Megan offered a perfect analogy: think of MCP as USB-C for AI. Before USB-C, every device needed a different cable. USB-C created one standardized connection. MCP does the same for AI and data.

The AI doesn’t change. It simply gains direct, permission-based access to your financial information through a standardized connection. No exports, uploads, or stale spreadsheets. The AI reads your live ledger in real time with full context.

But Megan stressed MCP is only as powerful as the ledger it connects to. A direct pipeline to messy data just delivers messy answers faster.

How do you know if your ledger is ready? Megan presented three diagnostic questions:

  1. Are transactions sitting in a queue? In traditional systems, bank feeds arrive uncategorized, waiting for manual review and posting. If your books take two weeks to close, your AI operates on two-week-old information. “It’s difficult for business owners to make real-time decisions using old data,” Megan explained.
  2. Does your system know “Uber” and “Uber Technologies Inc.” are the same vendor? To humans, it’s obvious. To traditional ledgers, they’re separate text strings. “This isn’t a data entry problem,” Megan clarified. “It’s a data architecture problem.”
  3. Is the tool itself a bottleneck? When slow page loads, endless clicking, and constant manual saves slow you down, data falls behind.

If you answered yes to any of these, your ledger isn’t AI-ready, regardless of how sophisticated your AI tools are.

The four pillars of an AI-ready ledger

Megan outlined what an AI-native ledger actually looks like through four pillars:

Real-time processing

Transactions are automatically categorized and posted as they arrive, not sitting in a queue. With Digits, for example, transactions are “continuously being posted, reviewed, reconciled, and reflected in your financials in real time.”

Object-oriented data

Every vendor, customer, and category is stored as a structured object. Variations from the same vendor are treated as a single entity, providing AI and accountants with a reliable foundation for analysis.

Autonomous bookkeeping

The system handles routine bookkeeping automatically, allowing accountants to focus on “reviewing, supervising, advising, rather than manually processing those transactions.”

Accessibility

Even the best technology has limited impact if firms face barriers to adoption. As Megan noted, firms shouldn’t have to “navigate complex pricing models, marketplace restrictions, and AI licensing costs just to take advantage of these modern tools.”

“AI readiness isn’t about having access to AI tools,” Megan summarized. “It’s about having a financial system that can provide accurate, structured, current information for those tools to work with.”

Seeing MCP in action

Theory is one thing. Watching it work is another.

During the live demo, Megan showed exactly what MCP-powered accounting looks like using Claude’s desktop app. Setup was surprisingly simple. You open Claude, navigate to connectors, search for Digits, and add it. No complex configuration needed.

With the connection live, Megan demonstrated real-world scenarios using a demo client:

  • Vendor spend analysis. She asked Claude to review which vendors grew most over three months and flag unusual spending. Within minutes, the AI identified that payroll scaled smoothly with headcount, spotted a November bonus spike, and highlighted fast-rising smaller vendors. No exports or reformatting. Just direct questions and detailed answers.
  • Budget creation. She requested a 2026 budget based on two years of historical data. The AI produced a complete budget showing prior actuals, year-over-year changes, and projections with adjustable assumptions, like testing a 40% revenue growth scenario. Everything was interactive and exportable to Excel.
  • Budget-to-actuals reporting. Building on that budget, she asked for Q1 comparisons. The AI generated monthly trends, variance analysis, and actionable recommendations. It didn’t just show that revenue was below budget and expenses were over. It identified specific areas to review, like legal costs and growth assumptions.
  • Expense optimization. When asked to identify potential cuts, the AI flagged a $1,600 charge for an HR tool that likely overlapped with the demo company’s payroll software. It also spotted a redundant AI bookkeeping subscription that duplicated Digits’ capabilities. These insights normally require hours of manual vendor analysis.

All of this happened in minutes through MCP’s direct, secure access to the live ledger.

The possibilities extend further. As Megan explained, you could connect MCP to multiple tools and ask cross-functional questions like, “Look at the last call I had with Megan’s demo client. What were the things they pointed out and compare that to the actual financials over the last three months? Help me identify what I should highlight with my client on our next call.”

The ledger is your constant. Everything else is variable.

“The best AI tool for your accounting is whatever you prefer,” Megan said in closing. “The best ledger for your AI tool is one that agents love most.”

AI tools will evolve and multiply. The ledger’s quality, structure, and accessibility are the constant determining whether any of them deliver value.

The shift isn’t just technological. As Tom Hood, Executive Vice President, Business Growth and Engagement at AICPA, noted, this is “an inflection point where finance leaders agree that people drive transformation success—mindset, skills, and leadership, not technology alone.”

Your role is evolving from data processor to financial supervisor and strategic advisor. Success means understanding the technology well enough to oversee it effectively.

Here’s where to start:

  • Audit your current workflow. How much time do you spend exporting and reformatting before AI can help? That’s your friction baseline.
  • Apply the three diagnostic questions. Check for queued bank feeds, unresolved vendor duplicates, and tool-created bottlenecks.
  • Evaluate against the four pillars. Real-time processing, object-oriented data, autonomous bookkeeping, accessibility. If your ledger can’t check these boxes, your AI outputs will always be limited.
  • Start experimenting. Connect an MCP-enabled tool and run some prompts. Even using a demo environment will shift your understanding of what’s possible.
  • Build your vocabulary and mindset. Understanding how to evaluate and supervise AI workflows is now a core professional skill.

The traditional export-reformat-upload workflow is broken because the data pipeline starves AI of the context it needs. MCP fixes the pipeline, but only if your ledger is truly AI-ready.

Watch the full on-demand webinar to see the live demos, walk through the diagnostic framework, and start building your firm’s AI-readiness roadmap.

The $15,000 Mistake That Could Happen to Your Firm Tomorrow

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A top-20 CPA firm in Minnesota got hit with a $15,000 fine. The fine didn’t stem from shoddy audit work, but from letting a license lapse. Worse, they had to reissue every single report completed during the lapsed period. Imagine making that call to your clients. And they’re far from alone.

In a recent Earmark webinar, Lindsay Patterson, co-founder and CEO of CPA QualityPro, and Julia Woislaw, the company’s VP of Strategic Partnerships and Regulatory Affairs, laid out the seismic changes reshaping CPA licensure and mobility laws across the country. Every day, their company works with firms, state societies, and state boards on compliance issues just like this. And what they’re seeing right now is unprecedented. As Lindsay put it, this isn’t just the biggest and fastest change in licensure they’ve seen in their careers.

The sweeping adoption of alternative CPA licensure pathways across nearly every U.S. jurisdiction has shattered the profession’s long-standing uniformity. What was once a simple, state-based mobility system is being replaced by a complex, individual-based model that demands every firm rethink how it tracks qualifications, verifies practice privileges, and engages with state boards. This affects every practicing professional. And firms that don’t adapt risk joining a growing list of practitioners facing fines, probation, and forced report reissuances for compliance failures they never saw coming.

During the webinar, we discussed what the new licensure pathways look like, why the loss of uniformity matters so much, how both individual and firm mobility rules are shifting and where the compliance gray zones are hiding, and the real disciplinary consequences firms are already facing. We also shared practical steps you can take to protect yourself.

The biggest licensure shake-up in decades, and why it affects you

For roughly two decades, becoming a CPA looked basically the same no matter where you lived. You passed the uniform CPA exam, logged one year of experience, and completed 150 credit hours of education that included a bachelor’s degree. Sure, there were minor variations and safe harbors between jurisdictions, but the core formula was consistent across all 55 U.S. jurisdictions. That uniformity was the foundation on which everything else rested, including mobility and reciprocity. A state board in Texas could look at a Washington-licensed CPA and say, “You’re good.”

That foundation is cracking.

States are now preserving the traditional 150-hour route while adding a second pathway to licensure. Under the new option, candidates still take the uniform CPA exam, but they can get licensed with a bachelor’s degree (approximately 120 credit hours) and two years of experience instead of 150 hours and one year. The intent is sound. It lowers the cost barrier to entry, potentially expands the pipeline, and gives aspiring CPAs more flexibility. Nearly every state has either passed this new pathway legislation or is actively pursuing it.

And it happened fast. As Lindsay noted, the original move to CPA mobility took about 20 years to roll out across jurisdictions. These recent changes swept through state legislatures in just the past couple of years. “This is the biggest change we’ve seen in licensure in my whole career,” Julia agreed.

It’s great news for the profession’s talent pipeline. But it gets complicated for everyone else.

Each of those 55 jurisdictions writes its own laws and rules. They have their own legislatures, their own boards of accountancy, and their own political dynamics. Nobody was going to pass identical language, even if they wanted to. The result is a growing web of state-specific discrepancies that practitioners need to understand.

Take something as seemingly straightforward as what “bachelor’s degree” means. New York has defined it as 120 credit hours. Washington state simply references “a bachelor’s degree” without specifying a number. That distinction might seem academic right now, but it won’t stay that way. Universities are already exploring accelerated degree programs, such as 90-hour bachelor’s degrees and three-year tracks. A CPA who earns one of those degrees and gets licensed in Washington could face a very different reception from the New York State Board of Accountancy.

Then there’s the experience requirement. Most states have moved to what’s called “verified” experience, meaning any CPA who’s familiar with your work. They don’t necessarily have to be your direct supervisor, but they can vouch for you to the state board. But New York and a handful of other states still require “supervised” experience, where your direct supervisor must be a CPA who personally signs off on your qualifications. If you got licensed under the verified model in one state, that distinction could matter enormously when you try to practice in a supervised-experience state.

Julia and Lindsay distilled the new-pathway landscape into three takeaways that every firm should internalize:

  • New talent opportunities are real. More pathways mean more people can become CPAs, which is genuinely positive for a profession facing serious workforce challenges. If your firm is thinking about recruiting, this opens doors.
  • States are moving out of uniformity, and we’re in a messy transition. We don’t yet know how every state board will respond to CPAs licensed under pathways that differ from their own. Some boards haven’t even begun to address it publicly. That ambiguity is itself a compliance risk.
  • These changes affect every CPA, not just new ones. Julia returned to this point several times because most practitioners miss it. Initial licensure isn’t just a historical footnote in your career. It’s the foundation regulators use to determine whether you have practice privileges in their state. How you got your license five, ten, or twenty years ago now matters in ways it never did before.

That last point deserves emphasis. If you’re a veteran CPA who earned your license under a pathway that no longer mirrors what another state requires, you could face questions about your right to practice there.

So if how you got licensed now determines where you can practice, what does that mean for the mobility privileges CPAs have long taken for granted?

From state-based to individual-based mobility: A new compliance equation

Under the old model, if you have an active license in Washington state, any other state can look at Washington’s licensure requirements, confirm they are “substantially equivalent” to their own, and waive you through. Your home state vouched for you. Simple.

That model is dying. In its place, states are building an individual-based system that asks a fundamentally different question: not where you got your license, but how you got it.

Most states adopting the new framework say that if you’re a CPA “in good standing,” you’re generally fine to practice across state lines. But (and this is a big but) some states are adding guardrails. They’re saying you have mobility privileges only if your initial licensure pathway matches one of their current pathways. And “in good standing” itself isn’t defined uniformly. A lapsed license in one state almost certainly kills your standing elsewhere, but beyond that, the definition can vary.

Consider Lindsay’s own situation. She’s licensed in Washington with verified experience. New York’s new mobility law grants mobility to CPAs whose qualifications match one of New York’s current licensure pathways. New York requires supervised experience. Will the New York board deny her practice privileges because her experience was verified rather than supervised? Nobody knows yet. The board hasn’t had to address the question publicly.

That uncertainty is the point. We’re in the gap between legislation and implementation, and that’s where compliance risk lives.

The map of states moving to individual-based mobility is already almost entirely purple, as Lindsay showed during the webinar. She anticipates 95% coverage within about 18 months. The notable holdout is Hawaii, which has no mobility and, as Lindsay bluntly put it, likely won’t anytime soon. “I would be shocked if they passed mobility any time soon,” she said. “You need to have a license in Hawaii.”

What you now need to know about every CPA in your firm

Lindsay and Julia said they haven’t found a single firm that already tracks the specific details of how each CPA in the firm got licensed. That means education (150 or 120 hours? bachelor’s or master’s?), experience (one year or two? supervised or verified?), and the states in which they hold licenses. Under the old model, none of this granularity mattered much. Under the new one, it determines who you can assign to which engagements in which states.

With these individual qualifications becoming so critical, firms face a new administrative burden that most aren’t prepared for. But individual mobility is only half the equation.

Firm mobility is a different animal entirely

Individual mobility is about people. Firm mobility is about entities and hinges heavily on the type of service you provide, especially attest services. Even in states that offer firm mobility with no notice and no fee, there are conditions. And those conditions have teeth.

The big ones include majority CPA ownership. This requirement is taking on new urgency as private equity investment reshapes firm structures. If a PE deal changes your ownership percentages, your firm’s mobility could evaporate in states you’re actively serving. Peer review enrollment is another trigger, and states don’t agree on which services require it. A compilation might not trigger peer review in your home state, even if it does in the state where your client sits. Change notification requirements also apply, sometimes even to notices of intent to practice that aren’t full licenses.

Julia walked through a scenario that makes this concrete. A firm with offices in Utah and Colorado picks up a new audit client in Florida. The good news is that Florida has firm mobility even for attest services. The bad news is that Florida’s conditions include majority CPA ownership, peer review enrollment, a requirement that non-licensed owners be principally engaged in the business, and compliance with Florida-specific rules on minimum capitalization, letters of credit, and liability insurance. “I don’t know any firm that checks that before they take on a client,” Julia admitted. While a state board might not look for these issues proactively, if something else triggers an investigation, suddenly every one of these conditions gets scrutinized.

Then there’s Mississippi, which requires the specific office providing attest services to hold a state license, not just the firm. If your Alabama office is licensed in Mississippi but you shift an engagement to your Arkansas team, that Arkansas office needs its own Mississippi license. That detail is easy to miss and expensive to get wrong.

And what happens when state law and board guidance don’t match? Maine passed legislation allowing firm mobility with no notice or fee for attest services. But the Maine Board of Accountancy still hasn’t updated its rules. Its guidance still says you need a license. Lindsay’s advice mirrors how you’d approach an audit: “Not documented, not done.” If you call a board and get a verbal okay from a staff member, that’s not enough. Staff change. Board members change. Interpretations shift. Get it in writing, at minimum via email, but a formal guidance document is best.

Two more compliance traps are worth flagging. First, what counts as an attest service varies by state. Compilations may or may not qualify depending on the jurisdiction, which affects everything from peer review requirements to firm registration. Second, remote employees working from a different state than their firm’s office creates real questions about the principal place of business. If your CPA lives in New Jersey but works for a New York firm, and they hold themselves out as a CPA in New Jersey (even just on LinkedIn or in an email signature), they likely need a New Jersey license.

Firms are already facing real consequences for compliance failures, and many of those failures are entirely preventable.

Real consequences and what you can do about it

State boards aren’t waiting for the dust to settle on these changes before enforcing compliance. They’re already sanctioning firms, and the violations they’re catching aren’t exotic edge cases. They’re the kinds of mistakes that happen when busy professionals lose track of deadlines or assume their existing setup is fine.

The most common violations Lindsay and Julia pulled from state board minutes and client conversations boil down to a surprisingly short list:

  • Not renewing licenses on time. This one tops the charts at both the individual and firm level. Different states renew on different timelines. Some annually, some biennially and even some triennially. And the trigger dates vary wildly. Some states renew in December. Some on the anniversary of your initial license. Some on your birthday. When you’re tracking licenses for dozens of CPAs across multiple states, missed deadlines become almost inevitable without a solid system.
  • Providing attest services without proper licensing or notification. Say a firm takes on a new engagement type for an existing out-of-state client, such as stepping up from tax work to an audit, without checking whether that triggers additional registration or notification requirements. It does in many states.
  • Failure to complete CPE. Self-explanatory, but still alarmingly common.
  • Not knowing which states require a license at all. Lindsay noted that most firms they speak to are inadvertently breaking at least one small rule. Nobody’s acting in bad faith; they just haven’t checked.
  • Individual CPAs lacking a license in their principal place of business. Post-COVID remote work has made this one pervasive.

The real disciplinary examples are sobering. Beyond the Minnesota top-20 firm that opened this article, there’s a Texas firm whose delinquent attest license was revoked entirely. A New York CPA received two years of probation and a $5,000 fine simply for holding out as a CPA with a lapsed license. And “holding out” doesn’t require anything dramatic. Your email signature or LinkedIn profile counts, as does your firm’s website listing you as “Jane Doe, CPA.”

North Carolina flagged four firms across three states that failed to file the required notice of attest when providing attest services in those states. None were trying to skirt the rules. They just didn’t know the requirement existed.

And a detail that surprised even Lindsay and Julia is that the people who most often let individual license renewals lapse are partners. They’re the busiest people in the firm, the ones signing audit reports, and the ones whose lapse carries the most consequences.

Building a compliance infrastructure that actually works

So what do you do with all of this? Lindsay and Julia laid out a practical framework that any firm can start implementing immediately.

  • Assess your current tracking system. How are you monitoring license renewal dates, CPA qualifications, and state-specific practice privilege requirements right now? Many firms are running on aging Excel spreadsheets that one person maintains. When that person goes on leave or leaves the firm, the entire system breaks down. If that sounds familiar, you’ve identified your first point of failure.
  • Map your full exposure. Identify every state where you have clients, what services you provide in each, how your firm advertises itself in those states, and whether your staff’s qualifications actually align with each state’s requirements. This exercise alone will likely uncover gaps you didn’t know existed.
  • Trust but verify. Don’t assume your CPAs’ licenses are active just because they say so. Use CPA Verify or individual state board websites to independently confirm license status. Renewal deadlines get missed during busy season. It happens, but catching it before a state board does is the difference between a quick fix and a public disciplinary notice.

Watch the full webinar for more takeaways.

Private Equity’s Big Bet on Accounting Firms Is Starting to Look Shaky

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CBIZ stock has lost half its value in the past year. Starbucks just killed its AI inventory counting tool after nine months of miscounts. And Microsoft, after investing $13 billion in OpenAI, had to cut off its own engineers from AI coding tools because costs went through the roof.

These stories from the latest episode of The Accounting Podcast paint a picture of where the accounting profession is heading, and it’s not what private equity investors or AI vendors promised.

CBIZ’s Stock Tells a Story About Private Equity’s Future

CBIZ is the only publicly traded accounting firm in the U.S., so its stock price is the closest thing we have to a market report card on the profession’s consolidation strategy. Right now, that report card shows failing grades.

“The stock price of CBIZ, Inc. today is $34.68. That is down 51% over the past year,” host Blake Oliver noted during the episode. When CBIZ bought Marcum at the end of 2024, the stock was at $78. It hit $90 in early 2025, then crashed to about $27 by March before recovering slightly.

What makes this even more interesting is that CBIZ isn’t alone. Co-host David Leary asked Blake to pull up Intuit’s chart for comparison. “Similar chart,” Blake confirmed. Intuit is down 53-54% over the same period. Meanwhile, the S&P 500 is up 28%.

The problem is what’s behind the stock price. CBIZ forecasts only 2% – 5% revenue growth for 2026. “That’s less than inflation. So basically, no growth,” Blake explained. “Why would investors be excited about buying stock in a company that’s not really growing much?”

Blake sees a more serious threat to large firms from smaller, more nimble competitors. “The larger the organization, the harder it is to change a business model or to integrate new technology,” he said. “I see smaller, more agile firms becoming a real threat to the large accounting firms. The smaller ones can integrate AI into their systems and switch their billing models.”

The math is simple but meaningful. AI lets a 10-person firm work like a 100-person firm. The traditional advantage of midsize firms (having an expert for everything) disappears when smaller firms can use AI to expand their capabilities.

Private equity firms typically look for efficiencies, not complete reinvention. “They figure out how to get marginally more efficient. They don’t completely reinvent the business model. That’s not what private equity is all about,” Blake explained.

When AI Meets Reality: Starbucks and Microsoft Learn the Hard Way

Starbucks spent nine months trying to make AI inventory counting work. The idea was that employees would walk past shelves, filming with an iPad, and AI from a company called NomadGo would automatically count everything. The company claimed 99% accuracy.

Reality hit hard. “Reuters reported the app often miscounted or mislabeled inventory, including confusing similar milk varieties or failing to recognize them,” Blake noted. Starbucks killed the project. Stores went back to counting by hand.

These failures hit the bottom line. “They were getting product shortages because they thought they had coffee, but didn’t have coffee to sell,” David explained.

Meanwhile, Microsoft discovered that AI coding tools come with a shocking price tag. Despite investing $13 billion in OpenAI and using AI to write 30% of its code, Microsoft had to cut off engineers from these tools because costs exploded. The same thing happened at Uber, where the CTO said they burned through a year’s worth of budgeted tokens in just four months.

The token problem is growing. Blake shared a striking statistic from Forbes: “Anthropic’s annualized net dollar retention exceeds 500%.” That means customers end up spending five times more than they initially expected.

“Nobody knows what they’re buying,” David said. “If I sign up for a monthly plan that gives me 20,000 tokens a month, it feels like enough. And then I’m six days into the month and I have to spend another 40 bucks for more tokens.”

“We’re going to hear a story like this in the next year,” David predicted. “Some firm will say, ‘Our five-person firm spent $300,000 on AI tokens, and we didn’t know it until it was too late.'” 

The Small Firm Revolution: XeroForce and AI Architects

While big firms struggle with their business models and AI costs spiral, something interesting is happening with smaller practices. Xero just launched XeroForce, a tool that could change the game.

“It’s a no-code AI agent builder that lets small businesses and accountants automate repetitive financial tasks using plain language, no technical skills required,” David explained. Unlike chatbots that give one-time answers, these are permanent automations that run on schedule.

Blake immediately saw the potential. “Every week, look at all transactions over $75 in any expense account, and then search my email for receipts and attach those receipts to the transactions. That’s a whole category of apps right there.”

“Accountants have engineer brains. You just don’t know how to write code. And if this can let you create ‘permanent’ code that runs routinely for a client inside Xero, it’ll help you scale,” David said, putting it in terms every accountant can relate to.

But tools alone aren’t enough. Firms need someone to manage this transformation. Donnie Shimamoto, CPA and founder and managing director at Intraprise Techknowlogies, calls this role an “AI architect.”

“Every CPA firm that’s big enough should create an AI architect role,” Blake said, comparing it to the cloud transition. “All the leading firms created these technology roles that were not IT. They were basically operations roles.”

An AI architect would handle security reviews, evaluate different tools, monitor token spending, and train the team. Without this role, firms risk security issues or shocking year-end bills.

For young accountants, Blake had direct advice. “If you’re a student or a young accountant and you want a job, learn this AI stuff. Every firm is going to be hiring an AI architect.”

What History Tells Us About What’s Coming

Blake drew a parallel to when electronic spreadsheets arrived. “The number of bookkeepers employed at accounting firms dropped by about half. We lost like a million bookkeepers over a generation,” he said. “What happened? We had more accountants and, in particular, we had a whole new category of job: financial analysts.”

His prediction for AI follows the same pattern. The number of traditional accountants will decline, but new roles will emerge. “Small businesses will be able to afford controllers and CFOs. They’ve always wanted them but could never afford to hire one.”

Both hosts emphasized the importance of experimenting now. David spent Memorial Day building a production assistant that saves him four hours a week. Blake spent two months creating a tool that automatically reconciles bank accounts.

“Don’t try to build anything groundbreaking,” David advised. “Just solve a simple problem that you have to deal with week after week.”

The Bottom Line

The accounting profession is changing fast, but not in the ways many expected. Large firms with private equity backing face serious challenges if they can’t reinvent their business models. AI implementation is proving harder and more expensive than promised. But smaller, agile firms that experiment with new tools and create AI architect roles could gain a huge competitive advantage.

“If you’re a firm with a few dozen people, you can now compete with firms that have hundreds of staff,” Blake said. That’s an opportunity for firms ready to embrace it.

Want to hear the full discussion, including how the hosts are building their own AI tools? Listen to the complete episode of The Accounting Podcast.