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.

Let’s Talk About CPA Review Again, Shall We?

Last week, Caleb respectfully requested you all participate in a TPTB-sponsored poll to tell us which review course you are using. As expected, a comment was made along the lines of “it doesn’t matter which review course you use,” which we hear just about every time we dare to bring up the subject of CPA review.


We’ve talked about picking a review course, getting the most out of yours and even got bold enough to name names but have thus far (mostly) avoided getting into the dirty details due to my perceived bias as a former CPA review hack. But for those of you who are new to this whole CPA review thing, I figured it might be useful to revisit the topic and offer some tips for finding a review course and making it work for you since I’m far enough away from the industry as this point not to have an interest either way.

As always, picking a review course comes down to a few simple questions you have to ask yourself.

First, is someone paying for it so you don’t have to? If so, take it but let me give you a small piece of advice based on what I saw working in CPA review for four years: treat it like you paid for it. Too often I would see people who took their good fortune for granted and blew off studying only to discover a year or year and a half later that their “free” course expired, leaving them with outdated books and a set of flashcards they never opened. Don’t be that guy, use what you’ve been given or trust me, you’ll regret it later when you really need it and don’t have it or, worse, end up having to pay for Round 2 yourself. Most firms will only pay once so make it count.

Second, as many many people have pointed out here and elsewhere, which review course you take doesn’t really matter as everyone teaches based on the same bank of information made available to them by the AICPA. What does differ is the way the material is presented, therefore it’s up to you to figure out what you need. Some courses teach straight from the book while others don’t necessarily “teach” at all; if you’re the type of person who needs to be guided (and/or hand held) through huge amounts of information, you will want to go with something that breaks down concepts.

For an idea of which courses do what, the CPAnet forums are still one of the best resources as responses are written (mostly) by actual candidates without being as spammy as some of the CPA exam marketing blogs put out to steer customers into certain products. It’s also worth checking out blogs written by actual CPA exam candidates for nearly real-time comments on what’s working (or what isn’t) for them. If you’re on Twitter, check #twudygroup for candid tweets about studying, which will inevitably include comments about the review courses the kids on Twitter are using (and love tweets to Peter Olinto, natch).

It’s true that any review course (or even a set of CPA exam textbooks) can get you through this, but it doesn’t happen just because you gave a company your credit card details. Hate to break this to those of you hoping a $3000 course plus flashcards will automatically make you pass but regardless of which course you choose, you’ve got to study and sit for the exam just like every other candidate.

Now stop playing around on the Internet and get back to those books, you’ve got an exam to pass.

Ten Most Expensive iPad Apps List Includes Becker’s Mobile Flashcards

The Most Expensive Journal recently came out with a top 10 list of most expensive iPad apps and – surprise, surprise – it looks like Becker’s mobile flashcards made the list.

The mobile flashcard set includes over 950 cards with questions on the front and brief answers on the back, which will look familiar to any of you who have used Becker’s regular flashcards.

The app works on iPhone or iPad but you don’t have the option to use it on both if you happen to own both devices; you’ll have to buy two copies of the app if that’s what you’re trying to do.

Curious to hear what your most expensive app is and whether or not you’d buy these.

India Is Still Balking at This Whole Convergence to IFRS Thing

In May, IASB member Prabhakar Kalavacherla threatened India by telling a conference in Mumbai “to put it in one sentence, we strongly encourage adoption as against convergence,” suggesting that India could totally contribute to the rule-setting if it will just go ahead and adopt IFRS now. That sort of attitude is hilarious and why watching the IFRS “condorsement” plan getting burped up around the world is so much fun. Really? Adopt first, ask questions later?

India isn’t buying it, although looking to the U.S. and Japan for answers isn’t going to help matters either.

The Economic Times has the story:

The government is planning to introduce additional changes to global accounting standard, IFRS, to make it more palatable for Indian companies, overriding the international opposition to amendments already made. Such a move will extend the eventual migration by Indian companies to the global standard and also insulate local firms from any short-term capital market shocks that may arise due to erosion in valuations.

However, any changes to the Indian version of the International Financial Reporting Standards (IFRS) will take time as the government will initially look at some of the revisions being suggested globally, specially by the developed markets of US and Japan, before finalising the road map, secretary, ministry of corporate affairs D K Mittal told ET on Thursday. “We have to see how IFRS will meet our requirements. Our markets are different, our standards are different,” he said.

Quote of the convergence! “Our markets are different, our standards are different.” I’m sorry, maybe I’m confused on how this convergence thing is supposed to work (entirely possible as I’m not an accountant and therefore not required to understand what’s happening here) but couldn’t each country getting IFRS shoved down its throat say the same? That’s why global economies are (read: were) such a beautiful thing; different markets breed different standards, and market participants have the option to say whether or not they find a particular country’s financial standards appealing. With forced adoption of a single arbitrary standard, determined by an entity with questionable self-interest at work, you take away investors’ ability to put their money where their mouth is.

GAAP has obviously failed. The evaporation of capital in the United States over the last 3 years proves it. But the whole Adopt-or-Else plan isn’t necessarily any better either.

In my humble opinion, it just makes the IASB look desperate and India look awesome. For now.

What Your CPA Exam Scores Say About You

Since it’s score season, here’s an overly appropriate question from the mailbag:

Just a quick question. Does CPA exam score reflect one’s ability at work? Does 76 on AUD necessarily mean one would be a bad auditor?

90 on REG means one would good at tax? Not sure how should I choose career-path between tax & audit.

The short answer here is that a 76 on AUD means you studied just enough to pass (congratulations) and has absolutely nothing to do with how good (or bad) of an auditor you might be.

Remember that the CPA exam tests entry level knowledge required to be a CPA. An 88 or even a 99 doesn’t mean you’d be a better auditor than someone who failed that section, it just means that you have a better command of entry level skills. That’s great as far as passing the exam goes but has little to do with your career.

The CPA exam and the real world are two completely different places. The exam assumes scenarios that you will never see “in the wild,” as it were, an environment where companies always do the indirect method and auditors always do more testing than necessary.

A higher score on one section could mean that this is a better place for you to look when it comes to picking a career path if, say, you barely studied to get that 90 and actually enjoyed taking that section. Just like you shouldn’t rely on your score report as the gospel, you shouldn’t take that to be a sign that you’re destined for a life in tax but you can certainly take that as a strong hint if you didn’t mind sitting for that section, understood the concepts and kind of liked the process.

Hope that helps!

Studying for the CPA Exam Goes Mobile

There’s a new mobile CPA exam study tool out there, and for once it isn’t direct from one of the major CPA review players. In fact, it’s designed by a former CPA exam candidate:

Studying for the CPA (Certified Public Accountancy) Exam just got a little easier as company CPAGoMobile recently released an app for the iPhone. The app allows users to build customizable practice tests drawing from a pool of over 1,000 multiple choice questions. Candidates have the options to target specific topics, choose question types, and analyze their progress reports to decide what to study next.

CPAGoMobile joins the ever widening landscape of educational apps geared towards professional licensure and examinations. Apps for the SAT, GMAT, Bar, and MCAT exams have given an injection of flexibility into candidates’ study routines by allowing them to study anytime and anywhere.

“When I was studying for the exam and working full time, commuting back and forth with a backpack full of textbooks was not fun. After finishing the exam, I looked at the stack of books and thought: there must be a better way,“ said Chris Armstrong, founder of CPAGoMobile. “Passing the CPA Exam is a difficult undertaking on its own, so any opportunity to make studying more manageable and efficient should be grabbed with both hands. Sure, there will always be a place for more traditional study methods, like books and notes, but I think these types of apps represent the next logical evolution on how we study and I’m excited to be a part of it.”

Download the new app for iPhone, iPod Touch or iPad via iTunes here. Questions will run you about 8 cents a piece (the app itself is free to try) if you average out the $19.99 cost for each section.

Please note that the app does not contain IFRS material yet, but the developers have promised they will integrate new material in their next update.

The app is not intended to replace a full, comprehensive review but meant to serve as a useful supplement to your regular study routine that is accessible anywhere you might find yourself.

Let’s Finally Talk About How Much Money You Can Make In Advisory

Somehow I find myself pulling the Accounting Career Emergencies rabbit out of my hat (or, as I like to say, “Decide My Life For Me: GC Edition”) and for once it has absolutely nothing to do with the CPA exam. We get yelled at all the time for focusing too much on tax and audit and not enough on advisory, so now’s your chance to start the discussion.

Though this question ended up in my inbox, it’s obvious that it was directed at you, dear Going Concern readers:

There is a lot of discussion on GC about the compensation for the audit and tax arms of the B4, but I don’t remember seeing much on what the strategic advisory/consulting branches of the B4 can expect in compensation as one rises through the ranks. It is pretty much assumed that compensation is much better on the performance and strategic side of the business but can you lay it out what is expected at each level?

I know different markets will pay at different rates, so a general range would be appreciated. I expect for associates in all branches to start in the same general range between $45,000-$58,000 but at what point in the chain of command does advisory compensation really separate itself compared to audit and tax?

Signed,

New Advisory Associate

First off, you’re right that we don’t discuss advisory that often but we do discuss it when we can, dependent on how many emails like yours we get and whether anyone in the advisory family has embarrassed themselves enough to warrant a note to us telling us all about it. If you’re playing along at home, that’s a strong hint that we’d talk about other areas besides tax and audit more often if more of you non-tax-and-audit folk contributed to the conversation. This is a good start, keep it going.

Anyway, based on comments left here and there around this site, the separation between audit/tax and advisory is not so much defined by dollars but by quality of life. What good is making more (or less) money if you’re miserable and overworked doing it? So before you look at how much more (or less) you’ll end up making than your cohorts in audit and tax, it’s appropriate to look at how much having a life is worth to you. So keep that in perspective while you are trying to figure out just how much you can make and when.

While you’re waiting around for useful comments from the GC miscreants, we were able to dig up a useful discussion on the Wall Street Oasis forum that will give you some actual numbers (though the validity of those numbers is apparently up for debate). That’s a starting point, and puts you at 65K out the gate, average. Since we’re getting that information from the Internet, let’s be conservative and say 60. This doesn’t help much as you already knew as much.

You might want to check out this GC thread (granted it’s two years old) and see if you get any better numbers there. With 311 comments, chances are you’ll get your answer, or at least a reasonable ballpark to aim for.

Cue to comments from the advisory bad asses out there who have been dying to see a column all about them. Now’s your time – especially those loyal soldiers who have put in a few years – to shine. Or blow smoke up each other’s asses to see who spins the most unbelievable compensation tale. I’m cool with either but please, help your soon-to-be advisory brother.

You Might Actually Want to Attend the AICPA’s E.D.G.E. Conference

E.D.G.E. stands for Evolve, Distinguish, Grow and Emerge – four key elements to ascend into your career as a CPA – and is a brand new, three day conference to give emerging CPAs an edge on their career development. Topics include refining your leadership skills, positioning your personal brand to get the results you want, and making the transition to a managerial role. Attendees will receive updates on tax, accounting & auditing, as well as financial/estate planning, and will have the chance to network with leaders in the profession as well as their peers.

From the AICPA:

The next generation of CPA leaders have the opportunity to refine and enhance their skills at the debut E.D.G.E. Conference, scheduled for Aug. 10-12 in New Orleans.

The three day event is the first AICPA conference geared towards emerging CPA leaders and is targeted at practitioners in public accounting and business and industry with 5-15 years accounting experience. Attendees will learn the strategies they need to distinguish themselves as leaders, how to grow their personal brand and will ultimately emerge with a leadership skill set to help further their career and steer the future direction of the profession.

“During the early stages of their careers, CPAs are often so consumed with the technical aspects of their jobs that they don’t receive training for the skills they need to get to the next levels,” said Allison Harrell, conference chair and senior audit manager, Thomas Howell Ferguson, P.A. “The E.D.G.E. Conference is structured to combine forward looking technical sessions with presentations that develop the soft skills that emerging leaders need if they want to take the next step in their career.”

With an agenda which boasts a wide range of topics covering six different focuses, attendees will receive a comprehensive educational experience tailored to their needs. In addition to technical sessions on tax, audit and accounting, attendees will get practical information on career advancement and training on how to refine their interpersonal and communication skills.

“This conference is a great opportunity for any CPA who wants to take the next step in their career but isn’t quite sure exactly how to go about it,” said Paul V. Stahlin, CPA, AICPA chairman. “I’m looking forward to meeting the next generation of CPA leaders and sharing my thoughts on the issues that are shaping the direction of the profession.”

The conference offers attendees an opportunity to learn from experts in the accounting profession and features over 30 sessions to choose from, including presentations from:
Ernie Almonte, CPA.CITP, CFF, partner, DiSanto, Priest & Co.
Tom Hood, CPA.CITP, CEO Maryland Association of CPAs
Brian Kush, CPA, CLC, president of Moxie Partners
Donny Shimamoto, CPA.CITP, founder of IntrapriseTechKnowlogies LLC
Paul V. Stahlin, CPA, AICPA chairman

The E.D.G.E. Conference will be held from August 10-12 at the Ritz-Carlton in New Orleans. The cost is $620 for AICPA members, $920 for non-members, which is the early-bird price, expiring on June 26th .

Here’s video of Donny Shimamoto (who we were honored to meet last month at Spring Council) talking about why the E.D.G.E conference is a great idea for everyone from senior partners to new hires. Find out more from the AICPA.

Can Convicted Felons Become CPAs?

As many of you are already aware, any sort of criminal record can negatively impact your career options if you’re considering public accounting. For one Going Concern reader, his sketchy past could mean the difference between becoming a CPA and spending his life as a payroll clerk.

Here’s the question:

Suppose I am an educated, convicted felon (possession of marijuana w/ intent to distribute when I was 19, currently 22) who is taking the CPA exam in the fall after graduation from college. I expect to pass (I’ve studied long and hard) and I have a few questions for you. Do you think accounting firms would be open to hiring a convicted felon, despite qualifications and a non-fiduciary felony? Also, would a state board (NH specifically) certify me as a CPA, provided I was able to get a job and fulfill the experience requirements? Do you have any precedents or similar situations you could inform me of?

Well, let’s start with the New Hampshire application for licensure, which contains the following simple question:

Have you ever been convicted of a felony that has not been annulled or committed any dishonest act?

If yes, please attach a separate sheet, which contains a complete description of the circumstances.

What this says to me is that you should start working on what you’re going to put on that separate sheet. You won’t get points for oversharing but you may get credit for honesty and clarity.

As you pointed out, it’s worth noting a few things. First, you were 19. We all do stupid things when we are 19. Granted, your stupid things got you a felony when it gets most 19 year olds regretful tattoos or embarrassing stories but still, you were a kid. That said, you’re still a kid to some employers/authority figures, so don’t get your hopes up expecting people to automatically assume you’ve reformed yourself in 3 years.

Second, it’s not like you robbed a gas station, stole credit card numbers or ripped off your Boy Scout troop – the fact that you were once in possession of a large quantity of marijuana isn’t much of a reflection on your character as it pertains to your ability to stick to the professional code. But (and this is the part that sucks), marijuana is still illegal and therefore the Board of Accountancy will consider that fact independent of what you were actually charged for. To some, the fact that you committed any crime at all means you are not of the ethical fortitude required to be a CPA. Let’s ignore the fact that many of the people who feel this way break the law all the time; talking on their cell phones behind the wheel, speeding, and driving while mildly intoxicated after happy hour.

The general rule here is that you should be fine as long as your conviction isn’t a fiduciary one but it’s up to the state to decide. Whatever you do, don’t try to hide it, as the important thing here is proving you are trustworthy. And you may want to talk to a lawyer about having your conviction expunged or knocked down to a misdemeanor. It probably doesn’t change much for you as far as jobs go (hope you aren’t planning on going Big 4, they won’t touch you with a conviction like that) but hey, you’ll be able to carry a gun (you know, for those dangerous engagements).

Good luck!

Is Benjamin Bankes an Independent Contractor?

We were wondering about Benjamin Bankes’ employment status with the AICPA, a non-profit professional trade organization, the trade being (loosely) the CPA. They fiercely defend the CPA designation’s legitimacy as a world-recognized credential and work for their members by offering themselves up as experts for legislators who have no idea what they are unleashing with a simple tax tweak. It’s a pretty good deal; we get reasonable security that our financial experts are at a minimum trained in the skills necessary to function at the entry level and the AICPA gets the notoriety that comes with being a 360,000 strong organization with a long history of protecting the integrity of its most precious asset.

So when we found Benjamin Bankes’ picture among AICPA headshots on Flickr, we wondered what kind of employment status he enjoys with the AICPA. Independent contractor? Full-time, taxable employee? Spokespig? I mean he’s right up there with Barry, so it’s got to be a pretty secure gig.

Just wondering. It’s a damn awesome picture.

IRS Issues an Apology to Same Sex Couples It Yelled at For Doing Their Taxes Wrong

Gay and lesbian couples in California got an “I’m sorry” from the IRS last week after robo-letters went out to same-sex couples who filed under new IRS rules which recognize their relationships for the first time in states with community property rules (California, Nevada and Washington). That means joint property is divided 50/50, regardless of who wears the pants (or the dress) in the couple.

Scott James has the scoop via the Bay Citizen:

The change to the tax code, put into effect for 2010, was supposed to be a step toward equal treatment by the I.R.S.

Instead, couples have faced a litany of conflicts. The latest involves at least 300 taxpayers who have had their returns rejected with terse letters signed by an enigmatic I.R.S. employee named J. Bell from Fresno.

“Your return includes income or tax liability for more than one taxpayer, other than husband and wife,” the letters read. Note: husband and wife. Not two husbands, or two wives.

Couples who received the letters had to produce additional paperwork and faced delays in receiving refunds; most were forced to hire tax professionals.

In a statement this week, the I.R.S. said that the letters had been “incorrectly sent” because of a processing error and that it “apologizes for this mistake and sincerely regrets any inconvenience to taxpayers.”

Santa Clara University law school professor Patricia Cain has an excellent blog on the subject of same sex taxes. Of the IRS apology, she said “Just to be clear, in my view, the battle is not between us and the IRS. The IRS wants to do the right thing. It wants to tax each citizen on the right amount of income under existing law. That is its job. However, the IRS is seriously hampered from promulgating rules that apply to same-sex couples by the the Defense of Marriage Act (DOMA). The IRS is to be commended for understanding that DOMA cannot usurp state property law. Thus I continue to applaud its decision about how to tax community income of same-sex couples. And now that the IRS understands how difficult it is to communicate these new rules, even to its own employees, I applaud them again — this time for their apology — which, by the way, I accept.”

Let me give the IRS a tip: you need money, right? Same sex couples have it. They do all the things other taxpayers do – buy stuff, work, pay their taxes. All they are asking for is equal treatment under tax laws. If straight couples can get trapped in loveless marriages and file jointly, why can’t gays have the same rights?

We all deserve to be miserable, overtaxed and sexless.

Here’s What Can Happen When You Get Bored After Passing the CPA Exam

ain't just crunching numbers

It’s awesome when those in the profession get excited about something other than the endless monotony of ticking and tying. For this Ohio auditor, bodybuilding was the answer when post-CPA exam boredom set in.

Via the Zanesville Times Recorder:

Philita Wheeler was a former track and cross country standout at John Glenn High School, where she reached the state meet in both sports.

Now 27, she’s encountered another athletic venture. In just five months she became a sponsored professional bodybuilder.

“After I passed my CPA exam I got bored,” said Wheeler, an auditor for Rea & Associates in Dublin. “I ran a lot, and it really wasn’t a challenge anymore. I just wanted something really challenging.”

The CPA exam wasn’t challenging enough, apparently, or perhaps just challenging enough to lead to disappointment when the whole process was over. In our humble opinion, this is far more useful than, say, picking up a drinking problem or dedicating one’s life to memorizing FASB regs.

How much do you want to bet the client gives up bank recs the second she asks for them?

Note: Private Lap Dances Are Not Tax Exempt in New York

This one is for you, ladies of the night.

A 2005 audit by the New York Division of Taxation found gentlemen’s club Nite Moves owed over $125,000 in sales tax on door admissions and private lap dance sales. The club argued that dances are a performance, not a taxable “service.” We’ll leave that one alone.

A New York State appellate court ruled last Thursday that private lap dances are not a dramatic or musical art performance, despite Nite Moves’ claims to the contrary. It is unclear whether any state taxation authorities partook in said private lap dances to make this determination.

In this case, the burden of proof rested on the club, who did not provide enough evidence to satisfy their claim, according to the five judge panel that made the ruling. “In short, petitioner was denied the requested relief due not to the nature of its business but, rather, because of the inadequacy of its proof,” they said.

The club’s lawyer, Andrew McCullough, plans to appeal the decision. “We brought in the foremost expert in the field,” he said. “She is the one in this country who has made a complete and detailed study of the art of exotic dance and if they are not going to believe her I don’t know who you believe.”

That expert had not actually seen Nite Moves’ dancers but other, similar exotic performances. As any connoisseur of naked gyrating women knows, not all naked gyrating is created equal.

Tax laws in New York State require sales taxes to be collected and paid on admission to or the use of any place of amusement except for dramatic or musical arts performances.

Maybe if the strippers wore historical costumes or mime makeup they’d have a case.

Hey, Nite Moves, you really should have called the Tax Domme, she knows all about this stuff.

New York court rules private lap dances not tax exempt [Reuters]