Metaverse Compliance and Consulting Opportunities for CPAs With Jerry Eitel
August 19, 2022
MP chatted with Jerry Eitel, a Partner Emeritus in the Tax Departments of Prager Metis and a Prager Metis International Group member. Eitel also serves as the Chief Metaverse Officer for the Metaverse office and has been in the accounting profession for over 40 years.
As Chief Metaverse Officer, Eitel oversees expansion and planning for Prager Metis’ Metaverse clients. His responsibilities include managing the organization of strategic partnerships for companies and individuals looking to scale a brand while also establishing the partnership ecosystem and management.
He serves as the liaison between individuals and businesses connected to Metaverse-related projects, collaborations, and more. Metaverse projects involve a range of roles, departments, and partners. Jerry also helps lead projects while managing the teams throughout the various phases of the Metaverse project. These include taxation and advisory components for virtual goods, avatars, NFTs, gaming, real estate, events, and more.
Eitel possesses a collection of experience in diverse industries encompassing large and small businesses.
He has led the firm’s Real Estate practice group.
His real estate clients are foreign and domestic investors and developers of U.S. real estate and business.
What is Prager Metis?
Prager Metis is a top international advisory and accounting firm with over 100 partners and principals, more than 600 team members, and twenty-four offices worldwide. We are one of the nation’s fastest-growing firms offering a full range of accounting, audit, tax, consulting, and international services.
What does Prager Metis stand for as a business, and why?
We believe in our “team approach” to create financial security for our clients. Clients come to Prager Metis for the expert advice that protects and grows the value of their world—whether that world is local or extends across international and virtual markets. That’s why we work with our clients to help create the best financial plans for them and to help educate and guide them on why we create the plans for them.
How do you plan for Prager Metis’ future in the Metaverse?
Prager Metis plans on having a grand opening in Decentraland in late September and will become part of the community.
We hope to feature other communities in a monthly Prager Metis Presents event series. We will introduce our firm, host a musical performance, and feature some NFTs from clients.
We will be giving NFTs away that will most likely include tokenization, such as a conversation with a tax advisor.
We are in it for the long haul and hope to become a go-to place for all things Metaverse.
We intend to have fireside chats as well and introduce other professionals.
How will CPAs' entry into the Metaverse help redefine the relationship between them and their clients, and why does it matter?
As accountants enter the Metaverse, clients will see them as forward-thinking.
For now, consumer-related and entertainment businesses are the main users, but this will change.
Virtual onboarding and sales and manufacturing processes are already being made for larger traditional enterprises. This will filter down to smaller enterprises.
Clients have always viewed their accountants as trusted advisers. Many will go to their accountants first if they consider entering the Metaverse. Aside from providing Metaverse-related compliance and consulting services, we could very likely become the quarterback in recommending attorneys, other professionals, artists, and architects for virtual land and/or virtual wearables.
What compelling reasons exist for CPAs to enter the Metaverse, and why are they compelling?
It pays to embrace technology before it embraces you; you must play catch-up.
You can take this back to when accountants did tax returns by hand or posted them to a general ledger by hand. Some waited, and those who invested.
One could go on and on with examples.
The bottom line is that embracing change is equally as crucial to the accounting business as any other business.
How the Metaverse evolves in terms of ease of use is unknown, but what is known is that ways to communicate are constantly changing. How many accountants don’t have an email address or a cell phone?
Assuming the technology improves, many business clients and not-for-profit entities will assume that virtual meetings will be in the CPA toolbox, not two-dimensional meetings. There are already third-party applications offering such meeting places.
What role will CPAs play and the Metaverse, and why?
CPAs will play an extremely important role in the Metaverse.
Virtual businesses are extremely complex in accounting, taxation, and regulation.
Blockchain, virtual currencies, nexus, US, and foreign disclosure reporting are just a few of the issues involved.
Aside from compliance, there will be many consulting opportunities regarding entering the Metaverse, from helping acquire virtual land to valuations for both funds and estates.
What regulations will likely redefine the relationship between CPAs and their clients in the Metaverse, and what will the outcome be?
The main role of the CPA in terms of regulations is to help clients comply. Current laws need to apply if there are no current rules involving a tax or securities matter.
More stringent regulations between clients and their CPA coming down the pike may focus on cyber security, data, anti-money-laundering, and know-your-customer.
What five key points define the relationship between CPAs and their clients in the Metaverse, and why?
CPAs Will Remain Trusted Advisors
Although, eventually, digital twins may be sitting in virtual offices doing taxes as little avatars, CPAs will remain as trusted advisors.
CPAs Will Have To Be Diligent
CPAs must be diligent in ensuring clients understand how easy it is to make a costly mistake. For example, a business might receive $3,000,000 of virtual currency selling NFTs and still be responsible for the $3,000,000 even if the virtual currency goes down to zero.
CPAs Will Be Crucial
CPAs will be crucial in referring the appropriate attorneys (and vice versa) to clients entering the Metaverse. There are many issues, including copyrights and smart contracts that require someone who has been in the space.
CPAs May Prepare Projections
CPAs may be asked to help prepare projections based on new types of hypotheticals, such as the sale of NFTs or the issuance of new virtual currencies.
CPAs May Give Advice
CPAs may have clients asking for advice when there are no laws. Specifically, DAOs with no one to sign as an officer may still be legal entities.
Is there anything else you would like to share?
To be involved in the Metaverse, people ask if new skills will be required or if new types of employees need to be hired.
I think CPAs will need to hire out of the accounting field. Data scientists, software engineers, discord managers, etc.
It is going to take an investment to be involved in the Metaverse.
Also, employees will need to learn new skills such as navigating virtual worlds and doing bookkeeping, accounting, and taxes for Web3 entities.
Retaining employees may get even more difficult, but virtual job fairs are also available.
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