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.

The AICPA Is Giving Future Accounting Rockstars a Shot at Free Money

Let’s be serious for a moment, who doesn’t want free money? And if you could also advance your own knowledge base, further your career and benefit the profession in the process, why wouldn’t you take it?

The fact that we are facing a shortage of accounting faculty to teach future beancounters is not newsworthy as the AICPA is now in its fourth year of the Accounting Doctoral Scholars program. Launched in July of 2008, ADS provides funding for four years for up to 30 new candidates each year, incubating a total of 120 newly educated PhDs in audit and tax. Thirty candidates with an average GMAT of 718 were selected for funding in 2009 and 2010, with twenty-seven candidates placed in 2009 and 29 in 2010. If you are interested in taking advantage of some $17 miS will begin providing information on applying for fall 2012 in May of this year, stay tuned to their website for more details.

But we aren’t all cut out to be accounting professors. Many of you know this because you learned accounting from folks who had no business teaching. Did you know the AICPA also provides scholarships to minorities, those with little accounting education seeking to get into the industry and outstanding accounting students with a 3.0 GPA or better?


From This Way to CPA, we have four major scholarship programs and deadlines are fast approaching so you better get it together if you want some of this. Each scholarship has different requirements so please read them carefully before applying and you must be an AICPA student affiliate member to qualify. If you haven’t yet joined, you may do so here.

AICPA Accounting Scholars Leadership Workshop

Held June 2-4, 2011 at the Washington Duke Inn & Golf Club in Durham, NC on the Duke University campus, the AICPA Accounting Scholars Leadership Workshop is an annual invitational program for minority accounting students who plan to pursue the CPA designation. This event aims to strengthen students’ professional skills and understanding of the limitless possibilities and benefits of earning the CPA credential.

Participants will gain confidences and an enhanced understanding of the varied accounting career paths to help them make better career decisions after graduation. An all-expenses paid event, the AICPA covers the cost of student attendees’ transportation, hotel accommodation and meals.

Deadline to apply:
Fri, May 6 2011

The AICPA John L. Carey Scholarship

The John L. Carey Scholarship was established by members of the accounting profession to honor John Carey upon his retirement from the AICPA in 1969. During his 40-year tenure at the AICPA, Mr. Carey served as administrative vice president; executive director; and as editor and publisher of the Journal of Accountancy. Mr. Carey dedicated his entire career to serving the accounting profession and made it a priority to encourage outstanding students to become CPAs.

Recipients receive $5,000 for one year. Scholarship aid may be used only for the payment of expenses that directly relate to obtaining an accounting education (e.g.; tuition, fees, room and board, and/or books and materials only).

Deadline to apply:
Fri, Apr 1 2011

AICPA Scholarship for Minority Accounting Students

The AICPA Scholarship for Minority Accounting Students provides financial awards to outstanding minority students to encourage their pursuit of accounting as a major and their ultimate entry into the profession. Scholarship funding is provided by the AICPA Foundation, with contributions from the New Jersey Society of CPAs and Robert Half International.

The AICPA Minority Scholarship was created in 1969 with the purpose to increase the representation of ethnically diverse CPA professionals. For over four decades, this program has provided over $14.6 million in scholarships to over 8,000 accounting scholars.

Recipients receive individual awards of $3,000 per academic year.

Deadline to apply:
Fri, Apr 1 2011

AICPA/Accountemps Student Scholarship

The AICPA/Accountemps Student Scholarship program provides financial assistance to outstanding accounting students who demonstrate potential to become leaders in the CPA profession.

Recipients receive $2,500 for one year.

Deadline to apply:
Fri, Apr 1 2011

You’re welcome!

Survey Says: Accountants and Small Businesses are Optimistic About the Future

It must be survey season so since you kids received the last one so well (surely I jest), we humbly present this latest survey of 1,217 Intuit small business and 1,200 Intuit accountant customers between Oct. 15 – 20, 2010. Thanks, Intuit!

The good news is that there really is no good news but that hasn’t put a damper on survey respondents’ view of things to come. It’s sort of exceptional, in our opinion, that 75 – 80% of respondents feel today’s economic climate is just fair or poor but more than that feel optimistic about opportunities in the future.

In a considerable showing of resilience, 65 percent of accounting professionals and 54 percent of small business owners said their companies grew in the last 12 months. Despite this growth, 75 percent of accounting professionals and 80 percent of small business owners rate today’s economic climate as “just fair” or “poor.”

Both groups expressed optimism for the future, with 94 percent of accounting professionals and 87 percent of small business owners seeing opportunities to grow their businesses in today’s economy.

Well if there are going to be new opportunities once things look up, where are they going to come from? According to respondents, news and technology are the key:

77 percent of accounting professionals said “access to industry news and/or trends” is the most important; “investing in new technology” ranked second.

73 percent of small business owners placed “marketing and/or advertising” as the most important; 57 percent said they plan to focus on “expanding their range of offerings.”

Funny, Sage just asked 533 accountants and IT professionals what keeps them up at night and they responded with getting new clients and regulatory compliance. For Intuit’s respondents, however, client retention ranked higher than finding new ones.

When asked what keeps them up at night, 32 percent of accounting professionals said “keeping clients happy.” For 26 percent of small businesses, “paying bills” is their number one concern.

Fine, so what does all this mean?

“Accounting professionals and small business owners are extremely adaptable and flexible individuals,” said Shawn McMorrough, lead research manager of Intuit’s Accounting Professionals Division. “Despite feeling the pinch in this challenging economic environment, they are optimistic and continue to weather the rapidly shifting business environment. Their unrelenting passion for serving their customers helps accounting professionals and small businesses succeed in the face of any challenge the market presents them.”

Should the rest of the world take that as a good sign that things aren’t as bad as Jr Deputy Accountant, Michael Panzner and the Mogambo Guru might make it seem? It looks that way, though the doomsayers are still in business for the foreseeable future. Yay?

Are 19 Year-Old Girls Writing CPA Exam Questions?

Pardon the headline but that’s an actual (and not at all unreasonable) question posed to us from a Floridian CPA exam candidate who shall remain nameless, lest I be accused of trolling again.


While we love the idea of barely legal chicks holed up in an AICPA bunker sweating out CPA exam questions, unfortunately we’ve got to piss in this particular candidate’s Cheerios and point out that questions are created using a complicated process that relies on volunteer contributions from the industry:

The content of the Uniform CPA Examination is developed in an extensive and integrated process. At each step in the process expertise in various disciplines is applied to ensure that the test materials are accurate and appropriate for use on the CPA Exam.

The process incorporates expertise in a number of key areas.

The first key area of expertise is in accounting. Individuals who draft, review, and finalize test materials are experienced CPAs.

A second area of expertise is in the science of testing, called psychometrics. At each stage in the test development process, psychometricians are involved in the design, development, and implementation of test materials. These include test specifications, test questions, and data analysis.

A third area of expertise is in test development. Experts in the design and development of test questions are involved in the process.

Well, we’ve met some inexperienced 19-year-old CPA candidates but can’t say we know any that are experienced enough to draft complicated CPA exam questions per the AICPA’s outline above so, sorry, but this question is debunked.

We also feel compelled to point out, by way of the New York Times, that the word sketch actually appeared as an adjective in 1975, which would be right around the time most of the OG’s of the industry were passing the CPA exam, earning their PhDs in accounting and getting their second or third promotion.

A list of slang compiled from students at the University of Arkansas, Fayetteville, published in the journal American Speech in 1975, included sketch as an adjective meaning “dangerous, risky” (“I think we’re in a sketch situation”). By 1996, one of [Professor Connie] Eble’s U.N.C. students offered sketch as a noun meaning “someone who is hard to figure out.” The variations sketchball, sketcher and sketchmaster followed thereafter, all sharing an air of suspicion and possible danger or at least discomfort.

We’re dying to know the context of this CPA exam question. Obviously discussing it is not allowed but based on the word itself, we’re guessing this was in AUD, no? As in “The client is totally sketchy, how do you verify his equally sketchy bank recs?”

Being Twitter Savvy Does Not Keep Accountants Awake at Night

Because we can never get enough surveys, Sage came through with the skinny on what keeps accountants awake at night (no joke). We’re proud to say that alcoholism and Caleb’s typos did not make the list but there’s always next year. Way to go, profession!


Sage surveyed more than 500 of its Sage Accountants Network members across the U.S. in December 2010 to figure out what gets accountants’ knickers in a twist. Results as follows:

Among the 533 respondents, 34% stated that getting new clients tops their list of concerns. 28% cited tax law complexity and changes as an issue; followed by the effect of new regulations and standards on small firms, keeping up with technology, and time management concerns, all at 24%. Work/life balance was cited by 20% of respondents, and keeping up with professional standards was a key concern for 17% of those surveyed. 13% of respondents cited access to affordable healthcare for employees as a worry for their firms.

Perhaps in response to the search for new clients, 83% of firms currently specialize or are planning to specialize in specific vertical business segments. By far, services/consulting was the most popular category for specialization (63% of those surveyed), followed by construction at 43% and retail at 39%. Other popular areas of specialization include working with nonprofits (35%), restaurants (30%), and manufacturing/distribution (29%) clients.

The full survey may be found here.

We found it a bit odd that retaining clients, retaining staff and managing staff came in at 9%, 3% and 2%, respectively. Obviously there is a bit of a work/life balance overlap in there somewhere but because we here at Going Concern know no such thing, we could not bring ourselves to analyze these results further.

It’s the social media section of the survey that shocked us most. Not to say that the results themselves were shocking, exactly, as the shocking part lies in how some of these firms actually manage to make money. What do they use to attract new clients, carrier pigeons and sandwich boards? Thirty-seven percent of survey respondents use their own websites as “social media,” though in our humble opinion the “social” part means using a more conversational form of communication than some .com with your firm name in it. Twenty-eight percent use LinkedIn, 19% are on Facebook and – wait for it – 7% have gotten into Twitter. 7%! A frightening 43% of respondents don’t use social media at all, perhaps explaining why 34% are concerned about getting new clients. They must not be that concerned if they aren’t using social media to put themselves out there.

Know what this says to me if I’m a firm looking to make a killing through social media? Hit Twitter, it’s a no man’s land and you won’t have to elbow out the competition. Really, people? 7%?!

Know what else this also says to me? All my evangelizing about not acting like an ass on Twitter has been in vain; if firms aren’t using it, they probably don’t know how to search for your tweets about getting wasted and wanting to stab the senior for acting like a jackass. So have at it, it’s just you and the MLM bots tweeting out there until these guys get a clue and jump on board.

I think you kids know what to do from here.

CPA Exam Candidate Bloggers, They’re Everywhere

Back in the day, there was really only one CPA exam blogger and it was Jeff at Another71 who chronicled his adventures (read: failures) while amassing a large audience of loyal followers who shared in his triumphs and defeats. Over time, Jeff transformed his humble little website from just a soap box for him to complain to an actual career, blowing off the idea of a day job for the somewhat lucrative but always entertaining world of blogging. By all appearances this has worked out for him and it may be no small coincidence that a storm of CPA exam bloggers have followed in his footsteps, including his own team of CPA exam bloggers writing for him at Another71.

The only other longstanding CPA exam blog we can think of is the New Jersey Society of CPAs’ Exam Cram, which has featured a revolving cast of characters over the years, all of whom share their individual CPA exam stories with NJSCPA members and the Internet at large. Who says blogs are dead?


One CPA exam blogger we haven’t seen in quite some time:
The Cooking Accountant has been at this for awhile now and appears to have allowed a BEC failure to keep her from her blog since June of 2010. Once active in documenting her journey, her last entry reads “It hurts twice as much to learn you have to re-take two parts because you failed one. This is reminiscent of when a little girl riding her bicycle hits a raised chunk of sidewalk and goes flying off her bike, landing on the hard cement. But this time, not only does she scrape and bruise her knee and elbow so bad she can barely get up, but the doll she had in the bike basket is now sitting in the gutter.”

But many other CPA exam bloggers are alive and well and blogging every dirty detail of their lives as CPA exam candidates, at least when it comes to disappointments and annoying coughing girls at Prometric.

My CPA Exam Journey
3 Letters, 1 Day at a Time
Sleep on CPA
No More 74
Mission: Pass CPA Exam
CPA Adventures

The list goes on and on and if I missed any good ones, do let me know.

Here’s my concern: while it’s certainly healthy to form a community of miserable bastards who can share in the joy and misery of the CPA exam experience together, at what point does blogging become a distraction? If you notice, each one of these blogging candidates commit well thought-out, carefully written, decent length posts, something a lot of “other” bloggers don’t always do. So is there an element of procrastination that blogging about the exam allows?

If that’s the case, it’s probably a healthy sort of procrastination. Candidates might be taking a break from the MCQ but they are still focused on their goal of licensure by writing about, thinking about and reading about the CPA exam.

As long as they don’t start using that #twudygroup to talk about movies and their relationship problems, I don’t see the harm.

An IRS agent walks into a CFO’s office…

This was sent to me by my 69-year-old landlord who is spending his winter in Florida and we humbly present it to you now for your reading pleasure during this lovely busy season.

At the end of the tax year, the IRS office sent an inspector to audit the books of a local hospital. While the IRS agent was checking the books he turned to the CFO of the hospital and said, “I notice you buy a lot of bandages. What do you do with the end of the roll when there’s too little left to be of any use?”

“Good question,” noted the CFO. “We save them up and send them back to the bandage company and every now and then they send us a free box of bandages.”

“Oh,” replied the auditor, somewhat disappointed that his unusual question had a practical answer. But on he went, in his obnoxious way. “What about all these plaster purchases? What do you do with what’s left over after setting a cast on a patient?”

“Ah, yes,” replied the CFO, realizing that the inspector was trying to trap him with an unanswerable question. “We save it and send it back to the manufacturer, and every now and then they send us a free package of plaster.”

“I see,” replied the auditor, thinking hard about how he could fluster the know-it-all CFO. “Well,” he went on, “What do you do with all the leftover foreskins from the circumcisions you perform?”

“Here, too, we do not waste,” answered the CFO. “What we do is save all the little foreskins and send them to the IRS office, and about once a year they send us a complete dick.”

Compliance Auditor Found Dead at Work… a Day After She Died

As many of you sacrifice your lives for the greater good of the profession, slaving away day in and day out to meet that all important April deadline, just remember it could be much worse: you could be dead in your cubicle for a day before anyone actually notices.


Via KTLA:

An L.A. County employee apparently died while working in her cubicle on Friday, but no one noticed for quite some time.

51-year-old Rebecca Wells was found by a security guard on Saturday afternoon.

She was slumped over on her desk in the L.A. County Department of Internal Services.

“I came in Saturday to do a little work, and I saw them when they were taking her out,” co-worker Hattie Robertson told KTLA.

Wells worked as a compliance auditor in the risk management division of L.A. County Internal Services and had just become a grandmother a week before her death. Prior to her position with the county, she was a tax auditor for the California State Board of Equalization. The Imperial County Coroner’s Office is still in the process of an investigation.

L.A. ISD provides computer, telecommunications, building maintenance and repair, purchasing and contracts, fleet, mail messenger and printing services to departments in L.A. County.

Your Company Smartphone Scares the Crap Out of Your Boss

Let’s be honest here, how many of you use your work-issued phone strictly for work? Promise I won’t snitch anyone out. Some of you might even be lucky enough to be able to tweak your wallpaper, add apps and get your significant other on BBM for all day sexting without the pesky messaging data trail.

The AICPA’s 2011 Top Technology Initiatives Survey is out and shows that IT professionals’ biggest business technology concern is not that they could be replaced with robots but the proliferation of smartphones and other mobile devices in the workplace.

The 22nd Annual AICPA Top Technology Initiative survey, conducted Jan. 13 to Jan. 26, shows control and use of mobile devices was the No. 1 challenge for IT professionals. The finding was based on responses from nearly 1,400 CPAs nationwide specializing in information technology. In addition to mobile devices, the survey signaled future IT issues will revolve around implementation of touch-screen technology, deployment of faster networks and voice recognition technology.

“The surging use of smartphones and tablets means people are doing business, exchanging sensitive data wherever, whenever they want to,” said Ron Box, CPA/CITP, CFF. “The technology is advancing so rapidly that the capabilities for controlling and protecting the information on mobile devices is lagging behind. What was once as simple as losing your phone, could now create an enormous security risk for organizations.”

Remember back in the day when you might, say, accidentally drop your phone in the toilet at the bar and simply have to worry about recouping your contact list? Now our phones hold pictures, banking information and even client information that is oftentimes carelessly stored on unsecured devices that are taken everywhere. IT professionals can’t be expected to manage the network when the network is in your pocket, and when your pocket sometimes happens to be in the bar (you are a professional, after all).

Some of the top issues identified by CPAs in public accounting included data retention, control and use of mobile devices and privacy.

The complete Top Technology Initiatives list as voted on by CPAs, IT professionals, and others responsible for making or influencing technology decisions includes initiatives and emerging technologies that IT decision makers should be aware of over the next 12 – 18 months.

New Research Suggests Accrual Revelation About Earnings and Trading Strategy

Professor Russell Lundholm may not have intended it to turn out this way but may have inadvertently revolutionized the accrual anomaly and not so incidentally points out that no one else seems to have figured this out. “It’s about the composition of earnings and what percent were due to accruals,” he said about his recent paper, published in the January/February American Accounting Association’s Accounting Review.

Think about it this way: a company with a lot of cash…has a lot of cash. It’s obvious that cold, hard cash can be used by a company at any point. Accruals, on the other hand, aren’t always as easily converted into a pile of dollar bills that can be shoved into a truck and sent to debtors or suppliers for items the company needs. Forgive me for going out on a limb here but it then seems obvious that a company low on accruals (or accounting tricks) should reasonably underperform. That’s not the point of the work, though. It’s about looking at earnings minus accruals:

Employing corporate data spanning 19 years, the authors — [Russell] Lundholm, [Nader] Hafzalla (now deceased), and Matt Van Winkle of Voyant Advisers, LLC of San Diego — compare results computed via the traditional method and via the new method for both operating accruals and total accruals. For both operating and total accruals the new method yields significantly better returns, with the sharpest difference being seen for operating accruals (net income minus cash from operations); there, the traditional model yields an annual return that is about 6.5% greater than that of a portfolio of similarly-sized firms, and the new model produces an abnormal annual return that is about 11.7% greater than that of similarly-sized firms.

People have figured out this strategy but the new bit is that Lundholm, Hafzalla and Van Winkle look at it as a new equation: is picking out a stock dud as easy as figuring out who has a bunch of accruals?

Lundholm points to examples where a high level of accruals preceded poor stock performance.

Accruals at Monsanto Co, the world’s biggest seed producer, were 58 percent of earnings for the previous four quarters when the company reported results on January 6, 2010, according to Lundholm. That was in the top 10 percent of all U.S. companies.

Since then, its shares have dropped 13 percent, while the S&P 500 index is up about 16 percent.

Recommended reading in relation to this subject, Lundholm’s paper in its entirety: Percent Accruals by Lundholm, Hafzalla and Van Winkle. We’ll take all the accounting revolutions (or revelations) we can get.

How Not to Study for the CPA Exam (on Twitter)

I’m sorry but I have to remind people for the 1,000th time that things you do on the Internet are public and any old troll (like AG) can just do a quick search and find you doing it.

Case in point, this guy: @CStrunk follows Going Concern on Twitter so we don’t necessarily want to call him out, we simply want to evaluate his study habits, comments and way of life and then feel some sick superiority because we can judge him. Trust us, we do it out of love.

Check out this February 12th tweet:

So I’m at a bar. Being a horrible CPA exam candidate. 🙁


Listen, you guys don’t need to read my column to know that sitting at the bar is not going to help you figure out variance analysis nor GAAP codification. Duh. Maybe you can tape ASCs to the bottom of your shot glass but we are not going to say that you should be studying empty drinks with accounting regs and if you do, well, good luck with the exam.

A day before he was at the bar, he was cleaning out his computer. If you’re studying for the exam, you know exactly what this is like. Scrubbing baseboards, working as many hours as you can, even squeezing out kids just so you can put off opening up that big-ass FAR book (OK maybe that’s pushing it a bit).

He also admits to staying up until midnight or one in the morning studying (or “studying,” which many of you know means 4 minutes of studying and 96 minutes of status updates, “research,” emailing and texting) but since he was up until 1:23 in the morning tweeting, we know that’s not necessarily what he spends his time doing.

We suspect that we don’t have to alert Chris that he has been sternly warned to improve his study habits or give up on this exam and we hope that we won’t have to say it again.

Attention, Attention! This Dude Passed the CPA Exam on the First Try

Forgive us for the fluff but it’s Friday. With busy season in full swing, it’s dead and you guys aren’t reaching out for sage or even somewhat useful advice so we’re sad to say this is the best we got.

Since when does passing the CPA exam warrant a whole article? We’re not against the idea, just wondering when that became the thing to do.

Don’t you wish your firm did something like this for you? Or that maybe your wife would have thought to take out a half page ad in the local paper when you finally got an 81 on BEC after four tries?

No, people, you’re setting the bar way too low. You need to be this guy.


Via the Central Michigan Morning Sun (by all accounts this is a totally legitimate newspaper):

M.C. Kostrzewa & Co. P.C. CPAs of Mt. Pleasant has announced that Gregory Erickson has passed all four parts of the CPA exam in his first sitting for the exams.

Nationwide only 4 percent of applicants pass the exams in their first attempt.

Erickson, a graduate of Grand Valley State University, resides in Mt. Pleasant with his wife, Bethany.

Since most of you probably didn’t get your own article when you passed (sorry, intentionally underachieving generally doesn’t warrant its own fanfare), you might think this is a freakish concept but actually we found another, this one for Oconomowoc CPA Jennifer Konieczka. Is this a midwestern thing? Is it akin to your parents publishing an engagement announcement if you actually land yourself a winner?

We’re baffled.

In a related note, however, because we would never want underachievers to be left out of feeling special, we have taken it upon ourselves to offer up space here on our site for special CPA exam announcements or congratulations along these same lines. Write us if you have an appropriate nomination and bonus points for endorsements such as “most Irish Car Bombs the weekend before REG without getting a 67” or “this person guessed 50% of their multiple choice problems and still got a 75.” Please leave your bragging about passing all four parts in 2 months to more reputable publications like the Morning Sun.

What’s on Incoming IASB Chairman Hans Hoogervorst’s Plate?

Your next IASB chairman, Hans Hoogervorst, already has a few things on his to do list (right after scratching Sir David Tweedie’s name off the door), one of which involves restoring investor confidence by redoing last year’s bank stress tests in Europe since it seems they were not really credible, “One reason for scepticism was that sovereign bonds on the banking book were deemed to retain their full value, despite the fact that many were trading at steep discounts in the market,” he said. “The fact that some Irish banks that had passed the test later turned out to be insolvent only served to reinforce the doubts in the market.”

Doubts? That’s a kind way to put it.


Speaking at the two-day European Commission financial reporting and auditing conference, Hoogervorst also wanted to make sure everyone is clear on who rules the IASB. Despite appearances that rules are made by a handful of influential Europeans who like to play with accounting regs, he insisted the IASB is a multi-national group in which everyone gets a say. Or rather, he insisted that he’ll be trying to make sure the IASB is perceived as such, “It’s very important that we develop a governance structure that is more inclusive. At all costs we should avoid the perception that IFRS is dominated by a small group of nations,” he said. He did not seem to clarify if he was more worried about the actual structure of the IASB or just the appearance, nor did he mention how many U.S. delegates will have at the IASB’S table if we were to stop dragging our feet and just adopt already.

While auditors are taking a lot of heat for failing to catch just how bad off European banks were, H-squared doesn’t seem to feel they deserve so much criticism as they were simply following the rules. “How critical will auditors be when they see that regulators consider that severely discounted securities carry no risk?” he asked, obviously rhetorically.

Also in attendance at the conference, Federal Reserve senior associate director and chief accountant Arthur Lindo, who is hopeful that we here on this side of the pond will “move diligently towards some form of IFRS in the near future.” What Lindo did not say was whether or not the Fed would also adopt these rules or continue to use their freakish hybrid of GAAP and government accounting that they make up each and every year. Perhaps convergence will mean throwing in some IFRS into their 300+ page financial accounting manual.

Looks like Hans is going to have his hands full for the foreseeable future. Veel geluk met dat!

Accounting chief calls for more credible bank test [Reuters]