Author: Adrienne Gonzalez

Adrienne is a 15-year veteran of the accounting industry, if by "veteran" you mean "vulture prowling the periphery of the profession waiting for something exciting to happen." She has been spewing vitriol on Going Concern since the site was founded in 2009. A former CPA review employee, she has sat through more FAR classes than any CPA exam candidate ever could -- even one who has failed FAR seven times -- and can still recall most of the mnemonics all these years later.

Student Needs Help Dancing Around State CPA Requirements

If you have a CPA exam related question that you’re dying to have answered, please get in touch. Note: bribes will not make me answer your question any sooner.

Hey Adrienne, I was reading an article on GC about sitting for the exam in another state (with less requirements) then transferring it to the state you want to work in. I was wondering if there was a site for this information. If it matters I will be transferring it to Georgia or Texas. My adviser told me they usually do it through Tennessee in the spring of the MACC program so that once you are done with the 150 hours you should already have your CPA.. Just wondering y’alls thoughts. Thanks!


Is there one site that has this information? Oh dear, you’re obviously new to this whole CPA exam nonsense. While the Internet has done a great job of aggregating publicly-available information in the last few years to make searching for answers a tad easier for candidates, it’s still sort of a crapshoot. If you’re good with Google, you might be able to find a few references but other than that, I can’t think of one place that explains this particular trick.

That said, NASBA’s Accountancy Licensing Library can probably help. Plug in your educational experience and you can figure out which states you can sit in.

Because the CPA exam is uniform meaning every state’s candidates take the exact same CPA exam as other states, you’re able to sit for any other state’s exam in your state. You can use this to your advantage if you’re in a 150 state but want to finish the exam while you are still working on your degree by taking the exam in a 120 state that allows non-residents to sit for the exam and then transferring your scores once you meet your state’s requirements.

The best source to go to for more information on this option would be your own state board. Hopefully they are somewhat helpful and can give you a little guidance. You could also try calling NASBA but I doubt they’re very supportive of folks trying to bypass the system.

Keep in mind that your plan sounds like you will be transferring scores, not the actual license. Since most states have experience requirements and many require that experience to be gained under the supervision of a CPA licensed it that state, it is unlikely that you will actually be licensed as a CPA in the state in which you apply for the CPA exam. But you can transfer passing CPA exam scores, usually with just a simple form.

If you’re prepared for the work involved with sitting for the CPA exam while finishing up your degree, I say go for it. Surely there are some Going Concern readers out there who have done exactly this?

Did You Guys Hear the IASB Wants the U.S. to Adopt IFRS?

While the world is filled with torment, class warfare, famine, racism, war and uprising, those darn kids at the IASB are still concerned with one thing and one thing only. That one thing, obviously, is the U.S. adoption of IFRS.

Anyone else get the feeling Hans and Co. are getting a tad impatient with our heel dragging?


Piggybacking off the post Caleb was too lazy to write himself yesterday, we hear IASB chairman Hans Hoogervorst said in a Boston speech yesterday that adopting IFRS would offer U.S. public companies “the same financial reporting language for both internal management reporting and external financial reporting on a worldwide consolidated basis.” Where this is a benefit for us is entirely unclear to me, but that’s why I’m not chairman of the IASB.

Ol’ Hansy also promised that the U.S. would still play a pivotal role in shaping global accounting rules if we go ahead and trust them and adopt outright now. It is unclear whether that was a threat or not, as it is also unclear if he really thinks we’re that dumb.

This is the IASB chair’s first American speech, and in it he also said that the SEC can serve as a sort of emergency switch should the IASB decide to implement a rule that just won’t work in U.S. markets. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” he told the conference.

“So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” he said. You hear that, kids? Absolutely no danger. Well crap, why haven’t we adopted these fabulous standards already then? It can’t possibly fail, the IASB told us it’s all good!

Did You Blow Off the CPA Exam to Have an Epic Summer? Here’s How to Start Your New Job and Study Smart

If you have a CPA exam question for me or (even better), our audience as a whole using me as a pawn in your game to get better information, please get in touch. I’ll try to Google any answers I don’t know and will not berate you for your choices. Unless your choices are stupid.

Hi Adrienne,

I appreciate you offering to give CPA advice to readers of GC.

I am starting with GT next week, but due to summer school, summer work, and an awesome trip to Europe I opted to not even look at CPA exam material until now. I went against better advice saying I should study with the free time I had, and instead opted to genuinely enjoy my last Summer before life officially ends.

China Freaks Out Over Five CPA Exam Questions Illegally Posted to the Internet

Can you guys imagine what would happen if this were to go down in the good old USA?

According to China Daily, answers to China’s national accounting exam (similar to the CPA exam in that it’s an exam professional accountants take to work in accounting, duh) were leaked over the Internet last week and some are concerned that this unfortunate turn of events might erode trust in the exam and – worse – the profession. As if China’s sketchy accounting practices didn’t already achieve as much.


Answers were posted to an Internet forum just before the 2011 Chinese National Uniform CPA Examination was to be taken on September 17 and 18.

Here in America, CPA review providers are given retired CPA exam questions to distribute to their students but are not allowed to share actual exam content. Not like they’d know what’s on the exam anyway – many major review course providers haven’t taken the CPA exam in 10, 15 or even 20 years. Back in those days, they’d hand out copies of old exams to study. Like actual exams. Since the CPA review crew is a close-knit bunch of OGs, it’s highly unlikely that any one of them would risk their close relationship with the AICPA to hand out exam questions to needy students.

In China, a former writer of architect exam questions was sentenced to 18 months in prison for leaking state secrets after he was caught giving his students copies of exam questions during tutorials. Different world, eh?

Anyway, according to the few Chinese media reports we’ve seen, five audit multiple choice questions and answers were posted to the Internet and the Chinese CPA exam folks are understandably in a tizzy over this. To put it in perspective, their audit section consists 47 questions worth a total of 105 points, and candidates must answer at least 60 correct to pass. So really? Five questions?

That’s not all. Apparently some candidates received texts asking if they might be interested in, er, peeking at the upcoming exams’ content.

“I began to receive at least five text messages a day selling exam questions a month before the exam took place. All of them claimed they could provide genuine questions and answers. They also promised a full refund if the questions were not genuine,” 28 year-old Zhu Hua told China Daily. “I wonder how they got my number in the first place, because I only provided my contact information when I registered for the exam.”

Was this an inside job?

The Chinese Institute of Certified Public Accountants (CICPA) has sworn to conduct an investigation into the leaks and to prosecute anyone found to have leaked this information to the full extent of the law. Prepare for hangings, people, this is serious shit.

Ambitious Future CPA Wants to Shortcut CPA Exam Application

While I have not and will not ever sit for the CPA exam as we have already discussed ad nauseum, I still know a thing or two about how to get through it and – most importantly – how to buck the system. So if you have a CPA exam question, please get in touch. I haven’t missed an answer yet, must be doing something right.

Today’s question comes from an ambitious future CPA exam candidate interested in getting this nonsense over with as quickly as possible so he can move on with his life and pursue his dreams of a fantastic life in public accounting. I love candidates like this, they breeze right through the exam and leave it beaten and battered they run off to make tons of money.

Hi Adrienne,

I’m e-mailing in response to something you mentioned in a post you made last November about a CPA exam sign up short cut that involved “fake” applying to sign up for the exam before eligibility so that when you re-apply it goes through much quicker. My situation is I’m a dual degree major, I get my 150 credits this coming May, graduation date of 5/21/2012. I have a full-time big four job lined up and want to get the whole thing out of the way before I start in Sep/Oct, as I’ve heard I have a snowballs chance in hell of getting it done while working. While my state (Virginia) allows you to sit with 120 (which I have) you have to have an official bachelors degree, which they don’t give me until May. Since my spring semester is going to be very light, I was hoping to try your little trick and see if I can study during the spring and sign up really quickly in May and get one part out of the way. There would be 9 days left in May after I’m official. Is this doable? Or just dumb? Worst case scenario I just don’t have a summer and take all four in one period. Thanks.

Regards,

CPA Scheduler

The trick to which this candidate refers involves applying for the CPA exam before you are actually eligible in order to cut down on processing time when you do actually qualify. A re-application only takes a week or two (not including the time it takes to get your payment coupon and NTS), so you can start scheduling exams much sooner than you’d be able to if you waited to apply after you got your degree and met the other requirements. To my knowledge, this works in California for sure and the board will even tell you to do it if you talk to the right person. I don’t see why it wouldn’t work in other jurisdictions as well, and if anyone in another state has done this, please let us know.

Anyway, even if this candidate does that, there’s no way he’s going to be able to get in two parts before the close of the April/May window.

The other option here would be to apply in a different state that doesn’t require a bachelors. Off the top of my head, I can’t name one but NASBA’s Accountancy Licensing Library should be able to help. Sit for the exam in that state, then just transfer either your exam scores or license over after the fact. It’s easier to transfer a license than scores but in order to be licensed in the state you applied to that isn’t your own, you’ll probably have to meet that state’s experience requirements, which might require experience under a licensed CPA in that state. Contact any state boards you are looking at and your own for more info straight from the source on how transferring works.

Long story short, even if you can only manage to get two – three parts done over the summer before you start work, you’ll be in great shape. Just the fact that you’re thinking about these things now tells me you will do just fine and will figure out where to make time to study even after you’re working. I wouldn’t recommend trying to knock out all 4 in one testing window, mostly because you don’t actually have to do that. If you think you’re up for it then by all means knock yourself out but there’s no reason to put yourself through that if you don’t have to.

Let us know how it goes and good luck! You’re one I won’t be worried about at all.

An Underwhelming Majority of State Societies Want a New FASB For Private Companies

Thirty three state CPA societies have reached out to the Financial Accounting Foundation (FAF) or passed regulations urging it to create a new board to write differential financial reporting standards for private companies. Alabama, Arkansas, Colorado, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming all feel FASB’s current standards setting process does not adequately address the needs of the private company sector.


“In today’s business world it is extremely rare to get an overwhelming consensus supporting one idea. However, the responses from the state societies are another example of the CPA profession’s overwhelming support for an independent board to set differential standards for private businesses,” said Barry Melancon, American Institute of Certified Public Accountants (AICPA) president and CEO. “The message is clear; FAF must do this now or run the risk of missing our best opportunity to make GAAP relevant for private companies.” The thirty three states in agreement on this issue represent some 275,000 CPAs.

These state societies basically told FAF that GAAP has become too complex, and the cost associated with GAAP-based financial reporting has become too much of a pain in the assets for private companies, placing an unnecessary burden on these companies with little benefit to financial statement users as a result of this effort. Personally I think the states here are forgetting that the complexity of GAAP and its esoteric intricacies keep a lot of CPAs gainfully employed, as someone actually has to analyze, manipulate, audit and teach that crap. CPA review instructors need to sell FAR videos. Caleb and I need things to make fun of, like SEC Chief Accountant James Kroeker reminding a PACE University IFRS discussion that the P in GAAP stands for principles. Right. Like we forgot.

Anyway, nearly 3,000 letters have been sent to FAF from the private company constituency in support of this separate board for private company reporting standard setting. Maybe FASB has too much to do and too many clever interns to train. Maybe FASB has lost its public company influence and this is just the first step in the coup to overthrow it. I haven’t heard very many pushing for more FASs directly handed down from (mostly) European accounting standard setters but that’s an argument for a different day.

“The boards of more than half of the country’s state CPA societies, representing more than a quarter of a million CPAs, agree that a systemic problem exists,” stated Paul V. Stahlin, chairman of the AICPA. “After over 30 years of research by numerous diverse and independent groups, the only conclusion is that an autonomous standard-setting body under FAF to set differential standards for privately held companies must be created.”

Must be. There’s no way around that.

And for those interested, here’s a tl;dr PwC report tangentially related to private company accounting standards you can read. Perfect for a Friday.

Uncategorized

Autocorrect Claims Randy Accountant as Latest Victim

It’s really the ALLCAPS that makes this awkward text interaction with the accountant embarrassing.

The creepy part about “that was not meant for you” is that it implies that “If anything changes please call MESOHORNY” was meant for some other individual out there. It also likely means that at some point, this accountant used MESOHORNY in a text interaction. We can only imagine in what context.

Keep it classy out there, kids.

[via Damn You, Autocorrect]

CPA Review Instructor Wants to Know Where BEC Got Its Start

Ah, CPA review instructors, got to love them. They teach you everything you need to know, invade your home, isolate you from your spouse and get those annoying mnemonics stuck in your brain.

This one reached out to us to get a bit of background on the CPA exam to share with her students, who I’m sure will appreciate a primer on what becomes many candidates’ favorite exam section.

Hello Going Concern – I have a question about the BEC (Business Environment & Concepts) portion of the CPA exam. I know this is a fairly new section – at least in its current structure. Didn’t it come into being with the advent of the computerized exam, on the 18-month pass window, in the mid-2000’s?

The reason I ask – I am an instructor for one of the CPA review course companies, and I will be teaching the BEC portion of the exam soon. I would just like to give students a little history & overview. I cannot really find anything on the AICPA’s website.

Any help or comments would be appreciated.

Thanks,
“Teach”

You are sort of correct that no one knew what a BEC was until 2004 when the computerized exam arrived on the scene. Prior to that, the four sections of the exam were Business Law, Audit, ARE and FARE. We all know that FARE has since evolved into FAR, likely dropping the extra E to better match with the other three CPA exam sections (fun fact: when I started in CPA review in 2007, the E was still in use by a large number of students). At that time, ARE covered accounting and reporting, tax, and government/non-profit accounting.

Some components from the Business Law (shortened as LAW pre-2004) became the BEC we know today but it is fairer to say LAW became REG, which is why up until this year, some areas of BEC and REG overlapped and covered the same material.

I like to call BEC the junk drawer of the CPA exam, as they’ve tend to stick whatever they can’t stick anywhere else in that section. It seems to have gotten better with CBT-e but it’s too early in the new exam’s form to say that for sure.

When comparing the paper-and-pencil exam to its current computerized form, it’s pretty clear that the breadth of topics covered has increased. BEC has allowed examiners to stick in technology, IT (unrelated to audits), economics, corporate governance and ERM, among other things.

Hope that helps!

Did You Get a Steak Dinner and an iPad To Join Your Accounting Firm?

Hey kids! Have you heard? The accounting industry is on fire! Don’t all pile in at once, now, let’s make a nice single file line toward the piles of cash, work-life balance and cash prizes! Yes, cash prizes!

You see, Crain’s New York decided to publish a piece over the weekend called simply “CPAs are getting hired,” which leaves little room for interpretation. While there’s no denying you all have survived the recession far better than your brethren in the doomed and overpopulated field of law, it comes off as a bit irresponsible in my mind for Crain’s to make it seem like firms are so desperate for good help, they’re giving out iPads and cash.

It’s no wonder, then, that employers are aggressively working on quality-of-life issues and recruiting incentives. At the Metis Group, perks include flexible work hours, a firm-sponsored kickball team and full company payment to prepare for and take the CPA accreditation exam, according to Managing Partner Glenn Friedman. The firm also gives out iPads for stellar performance.

In Ms. Teibel’s case, she hadn’t even been hired when the generosity began. Before she started with Berdon in January 2011, the firm had paid the $4,000 it cost her to prepare for the CPA exam. And before the interview process, Ms. Teibel had been wined and dined by Berdon partners.

“All that attention truly meant a lot to me,” Ms. Teibel said. “In an economy like this one, I’ll feel secure for years to come.”

Ha! Ms. Teibel is in for one hell of a rude awakening long after the partners have written off that steak dinner and traded ass-kissing and CPA review books for long hours and endless piles of busywork.

In reality, $4,000 will barely cover the cost of a year of Becker classes and one exam attempt for each section, so what happens if she doesn’t get it done in a year and needs to repurchase review materials? Or what if she fails a section? Or all four? Sure it’s nice to have your review course paid for but the truth here is that few candidates actually pass the first time through, and my experience with candidates who had courses paid in full was that they tended to do worse on the exam than candidates who had to scrape together their own hard-earned Federal Reserve Notes to buy review materials.

And what’s this about work-life balance? Is there a memo I haven’t gotten? As far as I can tell, based on completely non-scientific analysis of the comments many of you leave here, the slave drivers haven’t let up on you guys and have no plans to do so any time soon. If you’re actually good at your job, expect to be worked into the ground as your expertise and talent are a commodity the firms are more than happy to burn. But hey, enjoy that free iPad.

I recommend reading the Crain’s piece in its entirety, if for no other reason than to scoff and wonder in what parallel universe this takes place and try to figure out how to transport yourself there immediately.

Between this and the Yahoo! fluff piece awhile back, if I were a 20 year old wondering what to be when I grew up, this number-crunching gig might seem like the only viable option in these uncertain times.

Prepare for the bum rush of ankle-biters, kids. Or at least start working on your kickball skills.

What’s Your Motivation for Leaving a Mid-tier Accounting Firm for a Job with Big 4?

Contributor note: if you have a question for the Going Concern audience at large (including the useless dbags) or our team of accounting drop outs and degenerates, please get in touch.

Here’s a tip if you guys are thinking about submitting a question: it helps to know your motivation if you are asking for our advice. It’s difficult to tell you what you should do without knowing why you’re trying to do it, unless you’re asking us an obvious question like “should I take X position to make way more money?” because in that situation we obviously assume you’re in it for the money. There’s nothing wrong with that.

That said, this indentured servSo let’s commence to helping.

I’m currently working for a large mid-size firm as a Staff II and will become a Senior I next year on a relatively large public client. However, I’ve been debating whether or not I should follow up on opportunities to work at a Big 4 firm if it means I have to wait an additional 2 years to become a Senior I?

I know from my friends currently working in the Big 4 firm that new hires work for 3 years at the staff level before being promoted to Senior I. In addition, I may also slip one level from Staff II back to Staff I when I change firms. I’d essentially be 2 years behind my peers as a result of going to the Big 4 so I don’t know if making this switch would help or hurt my career. Is it really worth losing that much time in order to get the Big 4 name on my resume? Should I wait until next year in hopes that I could be recruited as a Staff III instead?

Surely I’m not the only one struggling with this decision, does anyone else have experience with this problem?

Thanks and Best Regards,
-Staff II(?) Auditor

Well, Would-Be Staff II, as you are probably already aware, the Big 4 item on your résumé is going to blow any of that mid-tier nonsense you’ve got going now out of the water (don’t get butthurt, mid-tier-ers. It’s not personal). The actual practical application of what you’re learning at a mid-tier firm versus what you might learn at the Big 4 is irrelevant here; it’s all about marketing yourself, and you’re better equipped to do that with bragging rights slapped all over your work experience. You’re pretty much only going to get those rights from the Big 4.

That isn’t to say you can’t gain valuable experience from your current employer, so it comes down to what you want to do career-wise and in what time frame you would like to accomplish it. Have you passed the CPA exam already? Are you itching to get out of public altogether? It’s pretty hard to try and push you in the right direction without knowing what that direction is. What do you want out of your career? Money? Prestige? Experience?

Why did you start mid-tier in the first place? Are you happy where you are? Do you enjoy the work and feel fulfilled? What is it you think Big 4 can offer that you aren’t getting at your current firm?

If I were you, I would wait it out, gain additional experience, keep those Big 4 contacts and try to make the jump when you have a little more leverage. The more secure you get in your skill set, the better equipped you’ll be to leverage that experience into a more ideal gig with a Big 4 instead of starting at bottom a level above the clueless interns.

I would also have a candid conversation with whomever you’ve been speaking to at the Big 4 about your concerns. Don’t come off as a money-grubbing, work-averse dick but definitely express an interest in being involved with work on par with what you’ve been doing with your firm, not taking a step back. Feel free to embellish whatever paperwork you’ve been assembling up until this point into a full-blown PCAOB-compliant masterpiece.

I’m sure any number of mid-tier grunts who read this site religiously can talk you out of making the jump, and for good reason, while others will tell you to jump now and worry about how quick you ascend the Big 4 ladder later. A smaller firm allows you a better chance at truly learning your trade instead of simply going through the motions and checking boxes; think of mid-tier as stripping at the pole as opposed to mopping up the floors. You probably won’t put stripping at the pole on your resume but you’ll be gaining practical experience you can segue into a better opportunity.

I’m not clear on the opportunity you’re after here. Can you clarify?

What to Do If You’re Stumped on One Section of the CPA Exam

I’m assuming not all of you are going to have great news as CPA exam scores trickle out, so maybe the following reader question can help you, too.

Adrienne,

Hi I’m looking for some advice regarding the Audit section. I have passed FAR, BEC, and Regulation thus far. However, I can’t wrap my brain around auditing.

The first time I took audit I got a 73 and I felt like I did not know any of the material. This was with three weeks of studying with Becker.

The second time I took audit, I got a 71 and I felt like I knew everything. This was with one month of studying with Becker and the computer Becker Final Review.

I just started working and I’m trying to determine the correct approach for studying audit again. I feel that it would be a waste to watch all of the Becker videos again unless I’m just absolutely confused on a section.

I plan on purchasing another study tool for more problems, etc, but I’m not sure which one to buy. I’m torn between the Gleim, Wiley, and Yaeger CRAM. The reasoning I have to purchase another tool is that I have a familiarity with the Becker questions already since I have tried them all twice.

Do you have any advice?

I absolutely have some advice, having seen a good chunk of our CPA review students go through this for a variety of reasons, none of which was related to the quality of the material or even the material itself.

Audit, of all the sections, can sometimes be the one that requires your brain to be the most bulimic (meaning learn it and barf it out at Prometric), mostly if you have no educational experience in that area and no affinity for the material covered. Auditors are – as we all know – unique, so it requires a different sort of thinking to truly thrive in that area.

You have the right idea. If you score between 70 – 74 (especially twice), you already have an excellent command of the information, so watching lectures you’ve already watched is a waste of time and won’t help you understand the concepts any better unless, as you said, you’re really lost on a particular part. You’re also doing the right thing by considering a supplement that will provide you with new problems, as memorization is not only a waste of time but also a detriment on exam day.

I have heard good things about Gleim’s MCQ, and some have had success using those alone. Since you already have the foundation of a full review, a cram is also a good option. But keep in mind crams involve videos and I don’t think it’s the basics you’re struggling with, it’s the tedious details. Crams usually cover the most heavily-tested material, which is probably not your issue at all.

Your best bet at this point will probably be to do as many practice questions as you can leading up to your exam retake. You have hopefully scheduled it soon while the information is still fresh in your mind.

I leave it to our readers who have undoubtedly been in a situation similar to yours to take it from here and tell you which they used to get over the hump as it were. Good luck!