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.

CPA Exam Candidate Is Worried About IFRS in AUD

The gmailmen have delivered the following reader question:

Hey Adrienne,

I have already passed BEC back in November 2010, and am sitting for AUD next week. I know with IFRS now being included in the curriculum, I can expect to see a few questions related to IFRS topics. I only have 2009 study materials, so they do not include IFRS.

I know with FAR and REG I will most likely need to either A) Buy new materials or B) borrow another coworker’s, but as far as the AUD test, how much emphasis should I put on studying the IFRS material at this point a week before my exam. I figure a day or 2 to skim through the IFRS stuff should suffice?

Thanks in advance for the advice!

Let’s once again for the 10,000th time consult the CSOs (Content Specification Outlines) for the information we need. When in doubt, this is your go-to for what will be covered on the exam and in what concentrations. While the AICPA doesn’t give exact figures (such as “you’ll get 15 bonds questions per FAR exam”), it is a great tool for figuring out what you can blow off and what you’re going to see a lot of. Hint: no matter what the CSOs say, your particular exam will probably contain an unusually large number of questions on whichever topic you chose not to study.

That being said, the good news is that IFRS has very little relevance in Audit at all (in comparison to FAR, as you pointed out). However, international auditing standards will be tested in AUD, and that part you are going to need to know.

Can you study from outdated AUD materials and still pass? It’s certainly possible. New material only makes up 5 – 10% of the 2011 exam by my estimation (based on the CSOs, my gut feeling and feedback from candidates who have sat for the exam this year), so it’s not all that crazy to suggest that you could do really, really well on old material and still pass. Keep in mind, however, that most people do not do really, really well on any material, new or old.

I would suggest, at a minimum, picking up a used 2011 textbook from Amazon and flipping through the new material. Entire sections have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.

Think about it: the exam changes twice a year. So if you have materials from 2009, the exam has changed 4 or 5 times since then, once significantly. Normally this might mean missing a handful of questions but in the case of CBT-e, I suspect the AICPA will be testing larger numbers of new questions going forward as they get more comfortable with the new format.

Good luck!

If You Believe the AICPA, Hiring Is Looking Good

Sometimes we get job reports from certain mainstream media outlets that shall remain nameless that look a tad suspect but in the case of this info from the AICPA, I think we can safely rely on the findings.

Here’s the good news via the Journal of Accountancy:

On the demand front, hiring is back on the upswing after decreasing from 2007 to 2008. In 2007, the total number of accounting hires was 36,111. That dropped to 25,488 in 2008 but climbed to 33,321 in 2010. A large portion of that increase was in firms with fewer than 10 CPAs on staff. Firms of that size increased their hiring projections from 11,432 in 2008 to 16,342 in 2010 (see Exhibit 1).

In terms of the types of positions CPA firm new hires were recruited to fill across firms of all sizes, accounting and auditing still commanded a narrow majority at 51%; followed by taxation at 25%; other at 16%; and information technology at 8%.

The accounting and auditing share of new hires was down from 60% in 2007, with the declines coming from firms with 50 or more CPAs. Hiring of new CPA graduates likewise decreased for information technology (down 5 percentage points from 13%). Tax showed a slight increase (2 percentage points) with the strongest gains coming from firms with fewer than 10 CPAs, while the largest growth since 2007 was in the “other” category.

The percentage of overall firms expecting to hire the same or more new accounting graduates than last year also is up—to 89% from 74% when the question was asked in 2008.

Here’s the next obvious question: are we talking about real, created-from-nothing jobs or are we talking about covering massive staff turnover popularized in public accounting by serf-like working conditions and disappointing compensation? Because hiring the same guy in four different firms doesn’t add up the same as hiring four new accounting grads. Duh.

Oh, and something else – where’s 2009? It doesn’t appear in any of the included exhibits, nor is it mentioned in the Journal of Accountancy article even once. The full survey, available from the AICPA’s website, doesn’t specifically mention the exclusion of 2009 in the survey methodology. We aren’t one for conspiracy theories (yeah, right) but it seems suspect that an entire year would just disappear and fail to get a single mention. I mean it was only two years ago.

We’ll dig into the survey results in more detail later, maybe once we track down 2009. Though not specifically mentioned in the above charts, the entire 2009 Trends in the supply of Accounting Graduates and the Demand for Public Accounting Recruits report can be found here.

Is the SEC Actually Monitoring Social Media?

The SEC has stated its position on social media, and I use the term “social media” loosely. They have also warned of hot stock scams perpetuated through those same channels.

Remember this?

A document request list sent by the SEC to some advisers asks for a broad range of data related to social media use, according to a compliance alert from ACA Compliance Group. Among other things, the SEC is seeking to identify how often advisers use social media websites such as Facebook, Twitter, LinkedIn, YouTube, Flickr, MySpace, Digg, Redditt, as well as any blogs used by, or subscribed to, by the adviser. They are also looking at communications made by, or received by an adviser on any social media website including among others, blog postings, messages, and/or tweets.

MySpace? I doubt unscrupulous frauds will find many worthy targets there.

To me, it says that the SEC has no idea where the important information is when it comes to social media.

Look at the BlackBerry PlayBook recall. 900 units isn’t huge if you consider they moved 50,000 units on its first day. Then again, if it were an anointed Apple product, that would be a pathetic debut.

If the SEC is in the business of protecting the investor, it would want to have some kind of say in how useful, relevant and timely RIM’s information is to shareholders. Reasonable accounting authorities might also want to understand the impact of bad PR on the company’s overall financial health, instead of constantly wasting everyone’s time discussing how to account for a lease on the books. Please!

Like when the WSJ published this story about the PlayBook’s first day:

“The traffic’s not iPad crazy, but there is a buzz,” said a salesman. “We actually had 5 people in the morning when the store opened at 7.”

Early sales were also relatively strong at a Best Buy outlet in the Fenway neighborhood of Boston, where there were “only a couple” of tablets left as of midmorning, a salesman said. While he declined to say exactly how many the store started with, he said the majority had now been sold. There were people waiting to buy the tablet when the store opened, he said.

At a Staples store in downtown New York City, on Broadway, a salesman said all 10 PlayBooks it had in stock sold out within a couple of hours of opening at 7 a.m. People are still coming in to ask for it, and the store is having them order online, he said.

Shit, if I held a bunch of RIM (disclaimer: this author is long RIM) and this were a reasonable market in which I might feel safer knowing the SEC is totally protecting my interests, I might want a rule that calculates exactly what that bad PR is worth to the company I own. To a shareholder, this sort of news means my investment just took one hell of a hit. Ten PlayBooks per store? Sad.

But instead, the SEC wants to know what blogs investors are reading. I’m sure that’s a productive use of their time and far more important than monitoring the digital pulse of investing as it pumps through the veins of social media.

Doing It Wrong Twitter Case Study: The Humiliated Tax Guru

There’s nothing quite as humiliating as a public fall from grace, especially when you’ve spent your entire net worth on infomercials and bad stripey highlights. For the tax crusader formerly known as The Tax Lady, going quietly into that dark night just wasn’t going to do.

As you can clearly see by her Twitter account, which we have screenshotted for eternal preservation just in case the State of California requires her to take it down, Roni Deutch made a last ditch effort on May 13th to spread word of her press conference last week to just about anyone who would listen. We don’t qualify an “@” as actually listening, but maybe it made her feel better to spam everyone from Consumerist (twice!) to a random “Redneck Zionist” with a link to her video.

Yes, Roni, we saw your video. And we laughed at it. Hard.

In a related note, this is not an endorsement but it appears that @IRSHelpOk is doing it right. Check out the many not-quite-specific-but-pretty-easy-to-figure-out digs at those who don’t obey the rules of their state bar association.

CPA Exam Candidate Attempts to Stop Attempting and Actually Take the Exam

From the mailbag:

Hi Adrienne – I have been “attempting” to pass the CPA exam for a few years now – and I must say I’ve never taken the exam or the goal to pass the exam seriously…up until now.

Hold it. Before we get to the second half of this question, we need to address the quotation marks. Obviously OP is trying to make it clear that studying has not been high on the priority list and we recognize this tactic as a CPA exam candidate trying to repent for non-studying sins. This isn’t the confessional but we’ll accept the confession nonetheless; it shows a desire on the candidate’s part to acknowledge what they have done wrong up until this point, which is halfway toward fixing it.

Continuing:

I took BEC on 4/4/2011 and REG on 5/14/2011 (today). I am registered to take FAR on 7/9/2011. My question is: Should I start studying for FAR now and try to take in July, or should I wait until I get my BEC/REG scores and if I score below a passing grade, try to take those in the July/Aug testing window? What should be the plan of attack – retake a recent exam, or jump to the next section? Considering I wont be getting my BEC/REG scores until the end of June, I feel like precious study time will get wasted if I just wait around for those scores…

In a follow-up with OP, we discussed how he felt when he was done. “I can’t say I felt on top of the world when I left prometric – I had more of a numb feeling than anything else. The sims were ‘interesting,’ and the MCQs were pretty challenging too…I put a solid six/seven weeks for this exam following Bisk’s recommended study plan.”

With scoring a little jacked up through the end of this year, you should probably move on to the next section as if you passed. If you did, you made the right decision. If you didn’t, you’ll just have to go back and study it over. You don’t necessarily have to start from scratch but let’s not think about that, let’s assume you passed.

You don’t mention Audit so I don’t know what your 18 month timeline is but if you have the flexibility, you should usually try to plan for the strategy that costs you the least amount of time so you actually have the time if you need it.

You’re right not to wait and just go on to the next section.

Marlee Matlin Can Add ‘Constitutionally Challenged’ to Her List of Disabilities

Academy-Award winning actress Marlee Matlin admits to People mag that she owes $50,000 to the IRS and isn’t at all embarrassed by this fact. ”I’m paying it back. I’m not shying away from it and I’m certainly not ashamed of it,” Matlin told the magazine. “It doesn’t mean I’m a bad person. It’s reality. It’s the reality that a lot of people in America are facing.” You tell ’em, girl!

The Celebrity Apprentice “star” (we use that term loosely, not being a huge fan of D-lister reality shows featuring hot messes such as Gary Busey and Lil’ Jon) tells People celebrity isn’t all it’s cracked up to be and, in fact, it’s her four kids and modest middle class life in the ‘burbs that is to blame. “Living modestly in a suburban neighborhood while trying to support four children through private school is not extravagant or living large,” Matlin said. “My husband is a Los Angeles area police officer and between the two of us we have always made ends meet in the past — and we will in this circumstance as well.”

To adjust to their new life as (probably accidental) tax protesters, the Matlin clan plans to make some important financial adjustments, like putting their poor children into public school. “At the end of the day, it’s about the best interests of the children,” she said. “Transitioning out of a private school environment will certainly relieve some of the financial pressures but hopefully this will not compromise the kids.”

Yes, hopefully it will not. Let the record reflect AG is a product of public school and we all know how horribly I turned out; someone pray for those kids.

Despite these hardships, Matlin seems upbeat and not at all worried about what this means for her reputation (let’s hope the IRS didn’t put her in the non-TIGTA-friendly “Tax Terrorist” category). “I’m not broke. Like everybody else, I owe money. My family is healthy and happy.”

Marlee Matlin Is Paying $50,000 in Back Taxes [People]

Two San Jose State Accounting Students Killed in Bizarre Murder-Suicide

Cindy Caliguiran, 25 and Kyle Williams, 26, both accounting majors at San Jose State University in Northern California, were gunned down by Caliguiran’s 54-year-old engineer husband on Tuesday.

From the Mercury News:

Waiting with a gun on the fifth floor of the campus garage was her husband — a Silicon Valley engineer more than twice her age. A classmate heard the screams — then gunfire — reverberate through the concrete parking structure.

Within minutes, police found Cindy Caliguiran and Williams dead, shot repeatedly, in the front seat of her black 2005 Mercedes. Napoleon “Nappy” Caliguiran lay next to the car, mortally wounded from a self-inflicted gunshot.

On Thursday, shocked students and faculty members learned the identities of the first San Jose State students ever killed on campus — both honor students, both married, one with a job at a major accounting firm waiting.

But the campus community was still trying to comprehend why the 54-year-old native of the Philippines tracked down his bride of three years Tuesday night about 8:30 with a gun registered in his name.

All reports are Caliguiran and Williams were not romantically involved. Williams had been married for two years and was headed to PwC after graduation, while Caliguiran had been married to her nutjob husband, Napoleon “Nappy” Caliguiran (described as a “soft character” by his former brother-in-law), for three. Based on reports, you might conclude that he was jealous of his much younger wife’s friend:

The Caliguirans lived on the fourth floor of the Élan Village apartment complex in North San Jose. A downstairs neighbor who didn’t want to be identified said that although he never met the couple, about two weeks ago they were so loud upstairs that he called security. He was awakened by heavy stomping upstairs, he said. When asked whether the couple was fighting, he said, “something like that.”

SJSU shooting: 3 who died ID’d as student, 25; her husband, 54; another student, 26 [SJMN]

The Delicate Balance Between Looking for a Job and Studying for the CPA Exam

This particular question is a bit beyond my expertise in this uncertain economic environment, so let’s try to plot out the various ways this decision could go after the question from the mailbag:

Hello Adrienne,

I chose to study abroad for my last semester of university. As a result of this, an unfortunate set of hiring/interview timing differences (and I’ll admit, a temporary lack of motivation) I am essentially unemployed when I return to the US this weekend. I’ve had phone interviews with a couple of companies, but they never progressed because I was out of the country. My double majors (Accounting & Economics) have allowed me to accumulate more than enough credits to be eligible for the CPtting in July for BEC, August for AUD, October for REG, and November for FAR. Mainly because I currently don’t have job offer to look forward to and because I want to finish the exam as soon as possible. I already have the financing for my exam materials and the entire exam and plan on starting my studies next week.

My question to you is how much time should I dedicate to studying versus looking for a job that fits my intended career path? I know there is no magic number of hours for studying, but I don’t want to burnout/distract myself being too focused on one area. I’d like to start in public accounting in advisory or auditing in most major cities, but don’t care where. My main concern is getting preoccupied with a job that doesn’t fit my interests/skill set. Maybe I’m putting the cart before the horse with my plans, but I’d appreciate your advice.

An April 2008 CNN article (we know their track record for rock solid, completely realistic reporting on how kick ass the accounting profession is) cited the following good news for new finance and accounting grads:

Offer amounts are up 1.9 percent for finance and accounting graduates, to $48,795 and $47,413, respectively. Salary offers for business administration and management graduates rose by less than 1 percent to $43,823

If accounting didn’t offer you any desirable opportunities in 2008 (I expect you’ll get better, more specific feedback on that in the comments), you might expect a starting salary of $52,926 to show off your econ degree. Sounds decent right?

Fast-forward to 2011, which we assume is more relevant to you than ancient fluff pieces. In some markets, you will find no shortage of jobs given the correct useful skills (in some jurisdictions, useful skills are defined as SOX 404 experience or desire to screw LLP partners for bonuses), but you’re definitely missing the point here by worrying about whether or not you will get obsessed with whatever career path you take. I doubt you’re beating recruiters off with a stick, mostly because it sounds like someone missed recruiting season.

This is why people intern. You either fall in love with it (unlikely), hate it (somewhat likely) or don’t not like it enough not to do it for the next few years while you finish the CPA exam (note: finish is not the same as perpetually sit for) and get the hell out. Unless you are overachieving, drinking the Kool-aid or end up becoming one of those guys defending PwC on the Internet, chances are you’ll be lucky to find something you mildly enjoy early on.

The likeliest scenario is that you will end up like this guy, who is itching to make his break from public for something but hoping it won’t be mind-numbing. Does that sound like the career you’re looking for?

Have you fantasized about burning out in public accounting altogether? It isn’t pretty. You’ll have to ask yourself “if you’re a top-ranked staff member with your CPA and on track to be a lead senior in the fall” or a “middle-of-the-road-and-I’m-studying-for-BEC type” before you take that route. You probably don’t want to be the latter, so you’d be wise to get the CPA exam over with when you have the chance.

You admit to “lack of motivation,” code to me for “fuck, I didn’t think I’d actually have to plan any of this” so get on figuring out what’s going to make you want to get out of bed in the morning. The usual suggestion applies here: 3 hours of studying at a time for as many weeks or months as you feel you need to feel somewhat prepared (you’ll never feel completely prepared so don’t expect that). If you need 400 hours per section, you may want to consider using your econ degree instead.

If it is required in your jurisdiction, check with the state board of accountancy you’ll be sitting in to see if interning counts as experience toward your CPA license (or try your state society or association of CPAs, they usually have all this information specifically for graduates and exam candidates). It’s an option.

The short answer is: neither delude nor pigeonhole yourself into a situation you’ll struggle to get out of later. The best way to avoid this is to a) get your CPA out of the way as early as you can and b) keep your expectations very, very low.

In the best case scenario, you end up partner and have lots of free time to extort your ex-mistress with an alleged sex tape while the minions do the paperwork for you. Actually, I’m not sure that’s the best case scenario.

TIGTA Scolds IRS for Name-calling…Again

The office of the Treasury Inspector General for Tax Administration has released a report showing that IRS employees continue to use now prohibited language like “tax protester” and (our personal favorite) “Constitutionally-challenged” in reference to non-compliant taxpayers, despite being barred from doing so since 1998.

Congress enacted the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) Section 3707 to prohibit the IRS from labeling taxpayers as “Illegal Tax Protesters” or any similar designations. However, IRS employees continue to refer to taxpayers by these designations in case narratives. Using “Illegal Tax Protester” or other similar designations may stigmatize taxpayers and may cause employee bias in future contacts with these taxpayers.

Prior to enactment of the RRA 98, the IRS used the Illegal Tax Protester Program to identify individuals and businesses that were using methods that were not legally valid to protest the tax laws. Employees identified taxpayers for referral to the program when their tax returns or correspondence contained specific indicators of noncompliance with the tax law, such as the use of arguments that had been repeatedly rejected by the courts. There were tax protester coordinators who were responsible for determining whether a taxpayer should be included in the Illegal Tax Protester Program; if a taxpayer was classified as an Illegal Tax Protester, the taxpayer’s record was coded as such on the Master File. Once a taxpayer’s account was coded, certain tax enforcement actions were accelerated. The designation was also intended to alert employees to be cautious so they would not be drawn into confrontations with taxpayers.

The IRS has not reintroduced past Illegal Tax Protester codes or similar designations on taxpayer accounts. In addition, the Internal Revenue Manual no longer contains any Illegal Tax Protester references. However, TIGTA found that out of approximately 3.6 million records and cases, there were 38 instances in which 34 employees had referred to taxpayers as “Tax Protester,” “Constitutionally Challenged,” or other similar designations in case narratives on the computer systems analyzed.

The TIGTA made no recommendations after their report, as the IRS has continued to use the term “tax protester” in taxpayer case files when it sees fit, despite the fact that the TIGTA feels this is not in compliance with RRA 98 § 3707 for obvious reasons.

It appears they do this once a year:
The TIGTA Would Prefer It if the IRS Could Use a Nicer Term Than “Tax Protester”

Sitting At Your Desk Is Killing You

Did you need more proof that your job sucks? How about this infographic:

According to the graphic, we now sit 9.3 hours a day, far more than the 7.7 hours we spend sleeping. Our hunter/gatherer bodies just weren’t built for this lifestyle.

Sitting for more than 6 hours a day makes you 40% more likely to die within 15 years versus someone who sits for fewer than 3 hours a day. Exercise does not offset this increased risk of premature death.

Those who sit in front of the TV for 3 hours or more a day are 64% more likely to die of heart disease.

So what can you do besides quitting your job to roam the fields for buffalo day in and day out? Try some of these busy season exercise tips from AccountingWEB for starters. My favorite is working at my desk while sitting on an exercise ball; it helps correct my posture and offers a core workout while I’m humming away at my laptop.

Enjoy!

Infographic courtesy Medical Billing and Coding

So You Want to Submit Something to Going Concern…

Since Caleb is really bogged down chasing misinformed merger rumors and babysitting his contributor(s), I thought I’d take a moment to set some ground rules for reader contributions. We get that question via e-mail a lot and, as you may notice, very rarely publish reader submissions. Let me tell you why.

First, if you expect us to publish something, how about you start by recognizing the tone of this website? We try our best not to waste our readers’ time with bullshit press releases, fluff pieces, and the usual PR crap that other accounting websites are built around. That is not what we do here and we aren’t going to start now so please, don’t bother. If you can’t take the time to acknowledge the voice of this website and respect the attention span of our readers, we aren’t going to take the time to read the crap you have sent us. If you send us an unsolicited email that looks like it could have gone out to every other accounting website out there, we know you aren’t a fan of the site and have no idea how we roll. Therefore, odds are pretty good that we will ignore your request. You’ve been warned.

Second, this ain’t no motherfucking Wiki. Meaning we are more than happy to publish reader material (still waiting for Bitter Audit Manager’s resignation letter) but beyond the comments, this is not a collaborative venture. Caleb writes, I write, you guys berate us, we adjust future content appropriately… you get the point. We invite you to contribute through criticism, suggestions and, of course, by tipping us to where the news is. And if you have a point to make and want to use this avenue to make it, you are more than welcome to do so, just make sure you come at us correctly. Which brings me to my next point…

It takes a lot of alcohol and therapy to do this day in and day out. Caleb and I try our best to bring you what you want and take our job seriously. If you have a submission, we expect that it fits with the overall attitude of this website. We have stringent quality requirements (Caleb’s rampant typos excluded, of course) related to the tone we work hard to maintain.

Self-deprecating humor earns points with us, as does bitterness, honesty, cleverness and general brilliance. We have no patience for uptight professionalism and anal-retentive seriousness, you can find plenty of that on other accounting websites.

So if you still want to submit something to us to publish, keep these things in mind. Shoot us a note and include your submission but please, save all of us the bother if you can’t respect these simple rules.

Does Interning Count as Experience Towards a CPA?

Today’s CPA exam question has little to do with the actual CPA exam and more to do with your career thereafter, or before if you’re already working in indentured servitude public before taking the exam.

From the mailbag:

Hi Adrienne,

I’ve been trying to look this up, but I keep ending up with vague responses. Can you get your “accounting hours” or whatever work related experience needed for a CPA license (1-2 yrs) before you pass the exam? Do summer internships count (say you interned on an audit)? Which states make you get audit work experience as opposed to states that just ask for accounting experience?

Thanks.
A bit confused.

For future reference, you guys can really help me out here by letting me know what state you are in (or applying for licensure in) as all states are different. Generally speaking “experience” is defined as work performed under the supervision of a licensed CPA in that jurisdiction. Even if you are unsure of which state you will be applying to, a general idea is helpful for my purposes.

You should be able to get your experience before, during or after taking the CPA exam. In some states, you have a limited amount of time to actually complete the requirements once you have passed, in others you will have to take some CPE to “refresh” passing scores after quite some time has passed (5 years).

States like Oregon, Virginia, Georgia and Kentucky will accept general experience in lieu of direct accounting work, meaning you can work in corporate finance and still get your experience requirements met.

States like Colorado and Oregon will accept work performed under the supervision of a Chartered Accountant as well. Colorado will also waive the work experience requirement completely if you meet certain additional educational experience requirements (150 units), check with the Board for exact details on this. Illinois and Massachusetts may also allow you a license without actual work experience. In Mass, you can receive a non-reporting license if you do not meet the 1 year of overall experience and 1000 hours of attest experience, meaning you can do everything but issue reports on financial statements.

States like Alabama, Florida, Illinois, Montana, and Nebraska will give you a CPA certificate instead of an actual CPA license if you have passed the exam, meaning you can put it on your résumé but will not actually be able to practice as a licensed CPA in that state until you meet the additional work experience requirements.

Currently, California does not require audit hours and you can always add them later if you decide you want to perform audits in the state.

Your best bet is to cough up $10 to access NASBA’s Accountancy Licensing Library to search through the different requirements based on which you might meet. You don’t have to know where to look, just plug in what you have (or expect you will have by the time you are ready to apply for licensure) and figure out which state would work best.

Hope that helps!