By Jessica Salerno, OSCPA senior content manager
“CPAs take risks every day,” said Jacob Schroeder, CPA, cofounder of Hydda Living and founder of Ascend Consulting, LLC. “When you give assurance on a financial statement, you're taking a risk, but you've managed the risk.”
In this week’s episode of the State of Business podcast, Schroeder discussed what it’s like to evaluate risk as a CPA and how to use that knowledge to implement a system to determine whether a risk is worth it.
“CPAs have a hard time wrapping their head around the perspective they are taking risks in those activities, and therefore they don't want to take risks elsewhere,” he said.
The problem with playing it “safe,” all the time, Schroeder said, is that it can be a serious risk. He used the example of staying in the same role for 25 years, that while might appear to be a stable position, there will always be unforeseen risks.
And while an appetite for risk taking is dependent on the individual, he said accountants are unusual in that through everyday job function, they are taught how to manage risk for their business and their clients. Schroeder said it’s valuable to apply this thought process other career opportunities to see where it might make sense to take risk. Every situation is unique so the system might need to be adjusted, but it can act as a reliable framework for decision-making.
“The cornerstone of this is really understanding your risk,” he said. “And taking the time to do the research and understand what the potential pitfalls are. And understanding that risk might mean it’s not just you researching, but it's also helpful to talk to other people who have been on similar journeys.”
Whether it’s starting a new business or exploring a new career trajectory, Schroeder said hearing the experience of others can be informative when weighing how risky a new potential decision could be.
“There isn't a life without risks,” Schroeder said. “It's just which risk are you choosing to take? In our simple, everyday choices we are taking risk. But if your perception of not changing equals no risk, it's a false perception. So, until you step back and take time to look at the risks you're taking, you will always feel you're being risk averse by not doing anything.”