Critique of Xero’s 10-step checklist for choosing an accountant
aBIZinaBOX continues its efforts to assist Xero in seeking to improve its America’s Partner Program, whether they seek the help or not, their customer’s deserve it. We have spent countless words seeking to elucidate the difference between a “generic accountant” and a “professional accountant” including offering “Yiddish Wisdom” explaining why Enrolled Agents are NOT professional accountants.
More recently, we offered a proposed legislative fix to bring Enrolled Agents to parity with attorneys and certified public accountants [“CPA’s”] by adding experience and education requirements to the current version of the “Horse Act” 31 USC Sec. 330.
Our starting point for today’s critique is Section 5 of the Xero 10-step checklist which states
We agree with the idea of verifying the professional licenses and credentials of accounting and tax professionals and offer an outstanding resource with links to accomplish precisely that at Regulation of Tax Professionals.
Professional Accountant Credentials
As a simple example, when we look our firm up on cpaverify.org, we find:
Nada…no listings…which is not entirely uncommon. When that happens, one needs to go state by state, which turns up listings for the firm in Illinois,
Then, just for kicks, we look yours truly up on the cpaverify.org site and we get:
Realizing that we have probably bored each of you to tears, please hang on just a bit longer, there truly is a method to the madness. As an aside, in addition to the pain and torture of submitting the requisite documentation, paying the initial fees, there is an annual cost of > $6,000/year to maintaining all of our professional licenses, CPE reporting, PCAOB registration and being active members for > 30 years in:
- American Institute of Certified Public Accountants “AICPA” – including Private Companies Practice Section [“PCPS“], Tax Section and IMTA [Technology Section]
- CalCPA, FICPA, ICPAS, NYSSCPA, and TSCPA and ISACA
Now that we have beat professional accountant credentials to death, let’s try technology credentials…but skip over Xero and Intuit ProAdvisor credentials for the time being. Let’s try a few examples of what we view as truly meaningful technology credentials that typically have multiple certifications by examination credential requirements for professionals and four to five digit annual membership fees such several that our firm has such as:
Microsoft – Azure Platform, Office 365, Google Cloud – Suite, Chrome, and Android, AWS Advanced Consulting, Salesforce Consulting, Dropbox Business, Box.com and Fishbowl Inventory. The selected partner programs represent platforms and ecosystems NOT single applications or technologies which is a very significant difference.
Verification and Validation
We spent a substantial amount of time yammering about our own credentials…for what is perhaps the eighth or ninth time..so what? Well, the so what is that it is easy enough to seek out the proper website, publicly available and VERIFY the credentials for yourselves [the professional and the technology credentials. As an example how about the Microsoft Partner credential…well you can check out this letter.
The letter couldn’t be clearer in verifying that aBIZinaBOX is a member of the Microsoft Partner Network [MPN# 4713037], and is current with and has earned Silver Competencies in Small and Middle Market Cloud Solutions [Office 365 suite and related products], and Cloud Platform [Azure]. Our locations with certified personnel include New York, Chicago, and Oakland. The certification has specific verifiable requirements which have been met, and the certification is good through October 31, 2018.
There you have an example of the verifiable independent documentation to support the listing of a credential in our profile.
What Is The Big Deal – Isn’t Everyone Transparent and Truthful With Credentials?
The simple answer is NO and this where a little experiment becomes very interesting. Let’s illustrate with a real-world example, by considering the locations where aBIZinaBOX has offices – California, Illinois and New York. Let’s look for a Xero Partner who asserts that they are professional accountants in the specific locations.
[Note: We didn’t actually perform each of the initial searches manually..we love automation too much, so be built a tool utilizing our good friend, Google Cloud Machine Learning to automate the process which we ran for all fifty states under the Xero Find an Advisor, and then ran the results against cpaverify.com, the state board of accountancy searches for all fifty states [where available], and the member directories for the listed technologies we identified [where available].
As a check, we replicated the machine learning tests under Azure Machine Learning Studio just for kicks.
It is absolutely critical to keep in mind that when you read the following section of this article that you keep at the front of your mind that we conducted this as an experiment and illustration. We did NOT independently verify the validity of licenses, credentials or partner program memberships by manual human verification process, with would always be a required step to ascertain the accurate, current and legal status of a particular individual or entity’s status with respect to the specified attribute.
What The Xero “Find An Advisor” Gave Us
Let’s start with those three right at:
We are going to post the results of the three searches and one selected Xero partner for the purposes of our illustration.
The search for Illinois returned 20 listings under accountants.
The Xero Partner we selected is The Digital CPA whom the listing states “Serves Illinois area”
The California search returned 92 listings under accountants
The Xero Partner we selected is HPCCPA.com and Bruce Phillips, CPA
HPC’s website lists an office in San Francisco
The New York search returned 46 accountants
The list included Emmerman, Boyle and Associates, LLC
Emmerman Boyle lists themselves as affiliates of AICPA
Finally, we have a special mention for Xero Partner Carr, Riggs & Ingram, LLC which “Serves Texas area”
Well there you have a reasonably broad sample of the advisor’s that were identified by the Xero “Find An Advisor” tool turned up. Suffice it to say, the tool is poorly designed not only for use by prospective clients, but its sloppy design reflects a lack of careful consideration of the potential implications for Xero Partners that have professional credentials and licensing issues to consider. Our machine learning experiment highlighted examples that range from what might be construed as innocent oversight to outright negligent, perhaps grossly negligent, or even intentional misconduct and violation of both professional standards and regulation by state Boards of Accountancy. Let’s dig a bit further
- The Digital CPA/Jay Kimmelman CPA is listed as “Serving the Illinois area”. However, neither the Digital CPA as a firm, not Jay Kimmelman is registered with the Illinois Dept. of Professional Regulation either as a licensed firm nor under a Practice Permit. This is probably an inadvertent situation, wherein provided that no attest work is being performed by either there shouldn’t be a problem here.
- HPCCPA.COM/Bruce Phillips, CPA is listed as “Serving the California area” and has a listing for having an office in California. Neither HPCCPA or Bruce Phillips is listed as being either licensed by or holding a Practice Permit from the California Board of Accountancy. [For background on the California Accountancy Act see What Services Can A Non-CPA Provide In California?, Exempt from CA Accountancy Act? – Close But No Cigar Is Alive and Well, and an old favorite Oracles of the Niche. Suffice it to state that they might be wise to retain competent professional regulation and tax counsel to deal with what appears to be a potential hornets’ nest.
- Emmerman, Boyle and Associates, LLC [“EBA”]/David Emmerman, Partner is listed as a “full-service accounting and tax preparation firm” which is perhaps two thirds true. Bookkeeping yes, accounting no..at least one of their principals is an Enrolled Agent and may not issue or be associated with financial statements. EBA is NOT registered with the NYS Education Department as a CPA firm. They appear to have moved away from prior language on their website with respect to scope of services, which previously appeared on their website at http://www.emmerman.com/auditing.php [see left side]
- Carr, Riggs & Ingram, LLC is listed on the Xero Find An Advisor as “Serving the Texas area”. Their website lists no less than thirteen offices in the State of Texas. A search of cpaverify.com list them in Florida, Georgia, and South Carolina. A search of the Texas State Board of Accountancy doesn’t turn up any listings which is a stunner, particularly since they are listed as a PCAOB registrant.
Finally, something in the back of our brain keeps asking for the reference to the post we wrote on requirements for use of the CPA credential by “inactive” CPA’s in California, so [see CPA Inactive Means What It Says- California Licensure Isn’t Required For The Provision To Apply
What It All Means
We are having a very difficult time seeking to ascertain what all of this means for the Xero Partner Program in the Americas. [For background on our commentaries on the topic, see Xero Partner Program – Commentary], and it isn’t that I haven’t had heated confrontation on the topic in the past [see Tortious Interference in ISV-Partner Break Ups]. The results of that exchange were a complete re-write of the Xero America’s Partner Agreement, and a long and fruitful running dialogue with Russ Fujioka, the President of Xero Americas, whom I hold in the highest esteem.
The events of recent weeks [discussed at Are You My Xero Partner Manager?] have us greatly concerned about the future. We are particularly concerned by the selection of Trish Laveck, a six month Xero employee as our replacement for Joel Lacayo, the recently fired Regional Sales Director. Ms. Laveck appears to have continuing equity interest in Safe Money Consulting, an alternative investment money management firm that is directly competitive with our practice and represents an unacceptable conflict of interest with our business. Our understanding is that this selection is piss poor decision made by Ben Richmond, CA – U.S Vice President- Partner Sales at Xero.
We are particularly frustrated, as it appears that the selection was made in complete disregard of the substance of a recent conversation which I had with Gregory Johnson – Senior Vice President, Business Growth, Xero Americas.
We trust that this rather long article articulates a number of concerns, as well as potential solutions that could be deployed to perform some “clean up”. When we spoke to Mr. Johnson, we expressed a willingness to engage in a productive fashion. Mr. Richmond seems to have embarked on a different path.
[As a final aside, article of this type have a tendency to make people defensive and rather than face up to and address the underlying issue they seek to dig up mud and toss it back. So let’s help them out, I have a long history as an ardent support of the 2A, and on occasion, it kicks up some sparks such as http://evanstonnow.com/story/public-safety/bill-smith/2015-07-03/64470/gun-rights-activist-faces-felony-charges. Sorry to disappoint all of those types, the issue was settled and has absolutely NOTHING to do with my professional activities. Yes, it was properly reported and dealt with.