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Transcript: Donny Shimamoto

August 27, 2019

MAUREEN DINGUS: Welcome to Leading Forward, the Virginia Society of CPAs' podcast where we focus on innovation, leadership and the CPA profession. I'm your host, Maureen Dingus, and I invite thought leaders for short casual conversations on topics and trends important to the success of the CPA profession. Today, we have Donny Shimamoto. He is the founder and managing director of IntrapriseTechKnowlogies. And he just did a session for us at our Leaders' Summit, and that is a program that we do for all of our volunteers and leaders that talks about the future of the CPA profession and what we need to do to be ready. So thank you for being here. Donny, thank you for doing this podcast.

DONNY SHIMAMOTO: I'm glad to be here. It's fun to be back in Virginia. Good.

MAUREEN: Yeah. Yeah. You had quite a trip to get here. though, right?

DONNY: Yeah. Roads start off in Houston, went to Rhode Island — uh, New Hampshire, then Rhode Island, back to Houston, and then here in Virginia now.

MAUREEN: So bit of a road warrior? 

DONNY: Yeah. 

MAUREEN: Well, I'm glad you could make a stop here for us. So Donny, before we dive into some of the content and meat of your of the discussion that we had here today, I love to give the listeners a bit of a taste of what you do every day and the journey that it took to get you to be that be that advisor and that professional?

DONNY: Sure. So I like to describe myself as a non-traditional CPA, because I don't do audit, tax or bookkeeping. I only do IT advisory services. And what that really means is I help clients make better decisions around technology or innovation, and then the risks associated with that. And then the third piece that we end up working with is the change management and adoption — how do I get people to actually use this technology? So it's really evolved quite a bit. 

I'll go back. Originally, I was with PwC, as both a financial and IT auditor. From there, I shifted into the management consulting side where I was the technical manager for one of our global — actually, it was deemed the first true knowledge management, or global knowledge management, project that we did for the U.S. Navy. And after that, actually funny enough, they actually were telling me, "You need to move to Virginia." I'm from Hawaii originally. And they were like, "You need to move to Virginia if you want to move up." And I was like, "I think I'm happy in Hawaii. So I said —

MAUREEN: Tough decision there!

DONNY: Right? So I was like, "Thank you, but no thank you." And I actually went over onto the IT side more. And work with the large systems integrator, figured out it's really not about the technology. It's really about how we use the technology. So from there, I started my own firm, IntrapriseTechKnowlogies, that was, well, 18 years ago now. And it's been interesting kind of going through the whole profession and understanding what's happening because everyone's pushing advisory services. Well, that is all we've done for the last 18 years. So it's it's been a fun journey.

MAUREEN: Yeah. So when we first met, you were on AICPA Council. And it was very impressive, because you know, you're a young guy, and to get to AICPA Council and chair some of the important committees — I'm really intrigued on how did that path, what did that path look like for you? 

DONNY: You know what? It really was just about taking that step to volunteer. So again, kind of being in Hawaii, one of the things that I was looking for was how do I differentiate myself from other people in Hawaii or other service providers in Hawaii. And I just I had joined AICPA, I had saw in one of the email newsletters, hey, call for volunteer, so I just went in, I signed up and I was like, "I don't know it's worth it." That was for what was called then the IT Executive Committee. Luckily, both the staff liaison and the chair at that time, were very forward-thinking because this was before the whole young CPA, you know, young professionals movement. They brought me on to that committee. I served three years on that committee. Through that committee, I got involved in helping to relook at the TECH+ Conference, a redesign of the CFP credential. They basically saw, hey, here's this guy willing to volunteer and spend some time, and through that I gained a lot because I was able, you know, this little guy from Hawaii with the small firm — I think my firm was like, probably eight or nine people at the time — had access to all these national experts, and then the opportunity to also speak at the national stage. 

MAUREEN: Yeah, that's awesome. I think that two messages that I'm getting is raise your hand.

DONNY: Yep. Definitely. 

MAUREEN: And be that person that steps up, but also as a reminder for the state societies is to ask. And I heard this one time from, I think it was Tom Hood, who talked about Kimberly Ellison-Taylor. And he said, "Who is your Kimberly Ellison-Taylor?," because she did the same thing. She's, you know, couldn't be a shining, more of a shining example of someone that, "Hey, I saw this opportunity and I raised my hand," and I kind of see you in that that same light. You're such a well-known person in the profession that it's interesting to hear that that's how it started. It's just a simple, "Hey, someone asked, and I stepped up."

DONNY: Yep. 

MAUREEN: So that's awesome. 

DONNY: Exactly.

MAUREEN: Thanks for sharing that. Your presentation covered a lot of ground. But one of the things that was kind of the cornerstone is debunking the myth that technology is going to be the death of the profession. So tell us a little bit about that.

DONNY: Sure, we hear that all the time. And I mentioned that one of the reasons I created that that presentation is because I was so tired of hearing, "We're not going to need accountants anymore. We're not going to need auditors anymore," that everything's just going to be automated. And it's so not true, because we don't do these non — our profession is not based on all these non-value-added things. That became really clear to me back — what was it 2011 or 2012, when the AICPA did its CPA Horizons research project — being part of that Advisory Council, that really helped me to understand, you know, what is the value that we provide as accountants? And it goes back to that core CPA purpose of making sense of a changing and complex world. 

So my job is not to record transactions in QuickBooks, or the ERP. My job is not to prepare the tax return. My job is really about helping my clients, whether that's individuals or businesses, to really understand the implications of everything that's happening — tax law changes, regulatory changes, even accounting changes, right, and accounting standards changes. How does that impact their business? How does that impact their individual lives and really help them make better decisions so that they can be more successful?

MAUREEN: So you you touched on big data, AI, blockchain are some of the common threats that people worry about or talk about. Give us a sense of how some of those will change — maybe not replace or be the death, but maybe pick out a couple examples of how we will see a change and what value the CPA can continue to add.

DONNY: Sure. So when we look at — I'll start with blockchain, because when we look at blockchain now, one is has been said to be the death of auditors, because we're not going to need auditors anymore because everything in the blockchain is is audited by nature. And what that really does, though, is that actually shifts auditors to do what they're supposed to be doing, which is focusing on controls. Our audit standards say that we do a controls-based audit or risk-based audit, which is really looking at risk and controls. When the transactions are automated through blockchain and perhaps supported by a big data stream, that artificial intelligence is then helping with categorization. And what it does is it forces the accountant to then not focus on the transaction recordation, but on everything that leads up to that transaction recommendation. 

So in blockchain, what are the controls before I put a transaction into blockchain? And then it's committed there immutably, and perhaps pseudo-publicly as well. If I'm looking at Big Data and artificial intelligences, what are the algorithms that are working with the flow of data or the data that's being used with artificial intelligence? Is that data biased? Is there perhaps perverse outcomes, some risks that we need to prevent coming back again, to risk and controls and the need to understand what compliance requirements are, or how we may have some adverse situations occur?

MAUREEN: Yeah, so certainly not replacing, but definitely changing. Definitely changing the skill sets and the services.

DONNY: So I would say that these technologies are actually going to help us enhance. So its services that we already provide, but they're going to augment us and they'LL really enhance our ability to focus on the analytics and the interpretation of the data rather than the gathering of the data or the recording of the transaction. Often we think about the, I think of it as like a pyramid, like 80 percen of the effort is really about getting the data out of the system, massaging it so that I can get to where I can analyze it, and then analyze and then I spend that 20 percent of the time actually analyzing it and supporting that decision-making. And what we should see is a flip, or 20 percent of that time is perhaps designing the algorithms or figuring out what systems I need to get the data from, working with IT to actually get that data to where I can use it. And then 80 percent of my time is actually doing that analytics, pulling the insights out, and supporting decision-making in the organization individuals,

MAUREEN: One of the things you did during the presentation was to get a sense of where our attendees felt they were or what the impact would be. And I know you do that wherever you go. So what is generally the feel for how CPAs, right now, are reacting to the potential impact?

DONNY: It's been, I'll give you a little context first, where if you had — having been on the national stage for over 10 years now, you know, I get to hear a lot of different people's takes on it. So being recognized as one of the top 25 thought leaders, I get to also discuss with the other thought leaders, and if you five years ago, we all would have said, "Eh, it's like five to 10 years out." And two years ago, you would have heard our conversations switch and all of our presentations were all saying "It's maybe one or two years out now." So that's really the interesting shift to see the thought leaders and the presidents make that shift. 

Now I I purposely do my presentations where I paint the picture and I want to see what people think, you know, what actual accountants, when I describe this is what's happening. So usually what I do is in each of these sections — big data, artificial intelligence and blockchain — I describe the technology and then I describe the accounting use of that technology, and then I survey them. So that survey, internationally, we've, I pretty consistently seen, about two-thirds of attendees will say there's a moderate to severe impact that these will have, and monitors are not necessarily bad, right? But that it's going to be truly transformative or have a significant impact upon the way we do services. Here in Virginia it was interesting, because for blockchain — not blockchain, big data and artificial intelligence — we actually saw at about 85-86 percent, say, big data, and artificial intelligence is going to actually have a bigger impact. And then in blockchain, we actually saw a decrease against the national. I do suspect that part of that was we actually had some good discussions, and we had some people that had actually seen some of the problems. So them kind of voicing may have brought that down a little. But overall, I think, interesting that within the next three years, everyone is saying, "Hey, this is really going to change what we're doing."

MAUREEN: Well, I do know one thing that I can attest to is that at least I feel like everyone in that room came into the room knowing what blockchain was to some level, whereas a year or two ago, you would get blank stares. People were not sure at all what it was. So, you know, for a profession that will be impacted by it, it's good that we're moving forward.

DONNY: Yeah, definitely. I think that's the thing that I was seeing as a whole, that we're seeing a lot more openness, which, I'm glad. And the second part of that, because once people are willing to accept that teams — and this comes back to the importance of leadership and, really, change management and helping people understand the whys — that once they're open to that change, now we can start to look at what skills need to change. How do we change professional development? How do we change the CPE that we're seeing coming from, for example, state societies? There's that there's this whole shift that has to occur, but until people understand why, we're not going to see the attendance of courses or anything.

MAUREEN: Well, thank you so much. We have two questions that we're going to wrap up with. One of them being: What do our members need to be thinking about in the next 12 months? What's that topic that you really want, that you would hope that that would be on their mind?

DONNY: I think it's really continuing to learn more. We didn't have a lot of education and examples out there about how these emerging technologies are applied into accounting. There is a lot more out there. We're starting to see courses come out. The AICPA has a few. I will say that some of those, I think, are a little biased towards some of the things that they want to accomplish. But understanding what it is, and then using, again, your professional judgment on how does that actually impact what I do, what my industry is, you know, the clients that I'm working with, that becomes really important.

MAUREEN: So really starting to dive into some of the personal learning that you need to do. Awesome.

DONNY: The second thing I would say on that is going to come back to the leadership because it's really going to take a leader, not a manager, to get us through these changes. And it's going to take someone that has the vision to understand what these technologies can do. They don't have to do it at the IT, like, nuts-and-bolts level, but they need to understand the potential, the application and then the risks of these technologies. And that leader needs to be there to guide the correct use of technology.

MAUREEN: Right, right, and the CPA is perfectly positioned if they want to be, right?

DONNY: Exactly. I said it in my presentation this morning, you know, business intelligence, there's such a high failure rate of business intelligence. But that's because a lot of that was driven by IT. Once we saw the CPAs start to get involved in business intelligence and then use the data or insights from business intelligence to support better decision-making, that we saw much better results and more successful projects.

MAUREEN: Awesome. So the last question is, Donny, what do you do for fun?

DONNY: What I do for fun? Well, you mentioned I'm a road warrior. So my big — the easiest thing for me to do for fun is actually a lot of food. Because I get to go to all these different cities. I like to try their little, you know, hole in the walls. And I always, I always tell people I don't want to go to, like, the chain restaurant or the big fancy restaurant. And actually, I remember the last time I was in Virginia was very thankful to both you and Stephanie. 

MAUREEN: We took you to the Roosevelt. 

DONNY: Yeah, we had fun, and that was that was great to kind of get to feel that local flair.

MAUREEN: I do remember you doing the little pic, the picture of your dish. You said, "Excuse me. I have to do this." So yeah, that was fun. So I'm glad to hear that's — if you had, what great meals have you had recently? 

DONNY: Oh, gosh, that's a hard one. Well, I mentioned I was just up in Rhode Island. So I actually got to go to this little cafe off the water. And apparently they're not very well-known, too, because I mentioned it to my Rhode Island friends that I saw. You know, it's not a big state. They were like, "We have no idea what that was." But I had the greatest apple pie-stuffed French toast. 


DONNY: I was in a food coma afterwards. I had to go back to my room and sleep.

MAUREEN: So you're uncovering the places that even the locals don't know. 

DONNY: Yeah. 

MAUREEN: Well, awesome. Well, thanks. I hope you get a good meal before you leave Richmond. So I appreciate your time. We hope to see you again back in our state. It's really always just such a pleasure.

DONNY: Thank you so much. I do hope I can come back again.

MAUREEN: Absolutely. Okay. Thank you everyone for listening to Leading Forward. Please remember to subscribe to the podcast so you can stay up to date on what we're talking about, and we will talk to you soon.

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