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.

Three Myths About Simulation Questions on the CPA Exam

6 years after the advent of the computerized CPA exam, candidates are fairly used to simulations by now (just in time for them to change) but they can still be a source of fear and apprehension for candidates just starting out.

Let’s start with debunking some popular myths. Remember, all of this information is current to the 2010 CPA exam and will be changing in 2011. Since it doesn’t make sense to repeat myself, I’m talking about what to expect for the next two windows of 2010.


Only one simulation is graded. Only one written communication is graded but both simulations are definitely graded and there is no progressive difficulty like there is with MCQ. If your second simulation feels harder than the first, it doesn’t mean you’re doing better, it probably means you got screwed on a simulation that covers the one subject you blew off when you were studying. This will get easier next year as more, smaller “simlets” make your knowledge of a broad range of topics more vital to the scoring process than your intimate knowledge of two topics is now.

Research is an important tab. It actually isn’t. It isn’t worth too many points so if you have to save anything for last, it’s research. If you have time left over, by all means, knock yourself out.

Written communications are sometimes hand-graded for correctness. Actually they don’t care at all if you are right, you just have to address the issue you are presented with using keywords and write good English use proper business grammar. It’s easy, you’re supposed to be doing this all the time via e-mail and if you aren’t, maybe you should start practicing. Caleb, this means you with your IDKs.

We will dig into the details onCP 2011’s new “simlets” on Friday.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Credentials for Accountants: Certified Information Systems Auditor

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

If you’re really into internal audits and information systems, want to make decent money and never want to worry about having to find a job, you may want to look into the CISA.


Education Requirements
None that we know of, beyond what you’d need to secure a job in the field to gain required professional experience.

Professional Requirements
CISA candidates must have 5 years of relevant experience in IS auditing, control or security work and adhere to the IASCA Code of Professional Ethics. Experience must be obtained in the 10 years before taking the exam.

CISA Exam
The exam is administered twice a year (June and December) and candidates must register no less than two months before the exam date. The exam is made up of 200 multiple choice questions that must be answered within 4 hours. The score is graded from 200 – 800 points and a CISA candidate must score at least 450 points to pass. It covers the following areas:

IS Audit Process (10%)
IT Governance (15%)
Systems and Infrastructure Lifecycle Management (16% of Exam)
IT Service Delivery and Support (14%)
Business Continuity and Disaster Recovery (14%)

The Information Systems Audit and Control Association (ISACA) sets the standards of and administers the CISA examination.

Compensation
PayScale has some interesting figures on compensation for those with the CISA and we have to say, it’s one of the more lucrative credentials we’ve covered thus far. Interestingly, GT pays its CISAs far better than P-Dubs.

Deloitte $59,942 – $86,500
Ernst & Young $60,737 – $90,757
KPMG $70,736 – $111,331
PricewaterhouseCoopers $58,448 – $97,657
Grant Thornton $56,500 – $143,400

IS Auditors make between $60,047 – $82,842 while IS Audit Managers can make up to $108,226. The money is good if you’re willing to put in the hours and pass a little more than half of the exam.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here.

If I Pass CPA Exam Parts in 2010, Will I Have to Pass Them Again in 2011?

Have a question on the CPA Exam? What section is easiest? How should I study for Regulation? Are pants mandatory at the testing site? Shoot us an email with your query.

It’s the big question on everyone’s minds so we better address it now before you cute little CPA exam candidates start freaking out:

Do you know what will happen if as of December 31, 2010 I have completed two sections of the exam? Will I only have to take the remaining two sections or will I be subject to the new exam parts coming in 2011?


Good question. First of all, keep in mind that a lot of the hype surrounding the 2011 changes is:

A) CPA Review course marketing (“buy new materials! Be sure you’re up to date!”)

B) AICPA marketing (“Hey! Check out how advanced we are and how easily we can integrate a whole new set of standards into our psychometric exams!”)

C) Misinformation spread by candidates who “heard from someone” that BEC will now contain 10 simulations and all of them will be graded.

Just stop. The two biggest changes for 2011 are the addition of IFRS (which will mostly affect FAR) and communications in BEC, that’s it! That means get FAR out of the way this year if you can and throw in BEC before December if you are allergic to written communication. The exam changes twice a year anyway, this is nothing new.

Now that that’s out of the way, the rolling 18 month period also stays the same so whatever you have passed in the last 18 months will still be good. Again, if you’re freaking out about all of this, get FAR done ASAP and you will have minimal IFRS and GAAP codification garbage to deal with. A few sections are moved around (for example, business structures will be moving out of BEC) but it’s mostly the same content. REG is hardly changed at all and AUD will be one half hour shorter with more on professional ethics while BEC will be one half hour longer with written communications.

Simulations are trimmed down to “simlets” and instead of getting one topic, you have a better chance of doing well as they will be smaller and consist of several different topics. In my opinion, the exam is just getting easier.

I’m willing to bet that testing will be a bit of a bumpy ride for the first two windows of the year as the AICPA BoE gets its bearings with the new information and somewhat adjusted formats. But debits are still on the left and credits on the right so it’s not worth getting bent out of shape over; the exam will still suck and you’ll still have to study but thankfully, just like thousands of CPAs before you, you’ll rarely use anything you learned for the exam in the real world.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Top Ten Worst Administrative Expense Offenders in the Non-Profit Sector

Administrative expenses are a part of any non-profit’s overall operating expenses and though donors generally give to charity with the hope that their contributions will help fulfill the organization’s mission as opposed to cover SG&A, Charity Navigator has a top ten of the worst offenders when it comes to admin expenses. Let’s take a look, shall we?


10: Center for Individual Rights 46.1%
9: Changed Lives 47.4%
8: Vision New England 48.7%
7: Charleston Area Medical Center Foundation 48.8%
6: National Museum of Racing and Hall of Fame 55.1%
5: Cherokee National Historical Society 58.2%
4: Union Rescue Mission Little Rock 62.1%
3: National Council of Negro Women 64%
2: Boys Choir of Harlem 66.3%
1: American Tract Society 68%

For its last available income statement through Charity Navigator, the American Tract Society brought in $2,194,730 and spent $1,615,847 on administrative expenses, compared to $711,854 in program expenses and $47,210 in fundraising expenses. This is twice what the charity spent the year previous on admin expenses.

The American Tract Society’s mission is to distribute religious literature to spread its message. Well actually its mission is officially “to make Jesus Christ known in His redeeming grace and to promote the interests of vital godliness and sound morality, by the circulation of Religious Tracts, calculated to receive the approbation of all Evangelical Christians. The mission of ATS is to provide relevant tools for presenting the gospel.”

Perhaps someone needs to say a prayer to St Matthew asking for a little accounting help.

By comparison, similar charity Bibles for the World, based in Colorado, spent only 6.4% of its $4,215,202 in revenue on administrative expenses in the same period.

The second worst offenders on the list, the Boys Choir of Harlem, spent $140,787 out of $299,729 in total revenue on administrative expenses in 2007. At that point, the charity was nearly $4 million in the red and has since ended. The group spent 30 years bringing the joy of music to at-risk inner-city youth and the choir had performed for sitting presidents since Lyndon Johnson.

Would-be donors are welcome to peruse Charity Navigator for detailed information on just about every charity in the country before making donations, lest that $100 feel good gift end up paying mostly for secretaries and prime office space.

So Your Firm Is Going to Pay For You to Take the CPA Exam: Four Things To Remember

Have a question on the CPA Exam? What section is easiest? How should I study for Regulation? Are pants mandatory at the testing site? Shoot us an email with your query.

Not only do you have a job (congrats!) but you have a job that is willing to pay for you to take the CPA exam. Awesome! But before you load up on review materials, be sure you know what your employer expects and understand that there are situations where you can be held liable for materials if you don’t live up to your employer’s expectations.


This is Business – First of all, though you can’t claim a deduction, reimbursement of your CPA exam expenses (education, exam fees, etc) is treated as a business expense, just like any other training. If you’re desperate to get someone to help out with review course or exam fees, try selling this point to your employer.

Make the Most of Time You Have Now – If you’re in the Big 4 or anywhere down to the middle, chances are your review course fees are covered and your performance on the exam might be rewarded with a bonus. Don’t blow this! It’s easier for you to study and pass exams before you are loaded down with responsibilities and managers are much more lenient with first years looking for time off than they are if you’re in your 4th consecutive year of failing FAR. Take this seriously and realize that your firm will probably only pay once; blow it and you’re going to have to come up with retake fees on your own.

This Isn’t 2006 – Several years ago, firms would happily pay $3,000 and up for overpriced review courses with all the bells and whistles but since belts have been tightened, some are reluctant to cough up a chunk of cash without a guaranteed return on their investment. Look at this subsidy not as a gift but as additional income. Would you blow $3,000 of your own income on something and then never use it?

Ask Your Firms Lots of Questions – If your firm does not already have an agreement with a review course but is willing to pay your fees, ask lots of questions upfront and find out if you can invoice for repeats or supplemental products if you need them. One of the larger firms has a “we’ll pay for anything once” rule meaning they will only cut one check, regardless of whether it’s for $2 or $2,000. Other firms have strict rules about what you can order and when you can start (think government agencies). Regardless of how your firm works, ask about what is covered and what is expected in return.

In this economy, you can’t afford to blow a free review course and discounted or all-expense-paid trips to Prometric.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Credentials for Accountants: Chartered Financial Analyst

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

Into investments and looking to secure a credential that is recognized the world over as a standard of professional excellence? Getting the Chartered Financial Analyst (“CFA”) credential might be for you. You won’t be alone as 139,900 candidates in 160 countries have enrolled for June CFA exams this year.

Here’s the rest of the skinny on the CFA:

Education Requirement
To obtain a CFA, all you need is a bachelor’s and four years of relevant work experience, or a combination of education and experience that totals at least four years.

Professional Requirements
CFAs must have 48 months of qualified work experience to qualify to take the exams.


CFA Exam
The exam is administered only in English by the CFA Institute in June and December. The Candidate Body of Knowledge is the playbook from which all CFAs derive their moves; those who have recently passed the CPA exam can think of it as the opposite of the CPA exams, whereupon BEC is the largest section. Topics include the time value of money, corporate governance, equity investments and portfolio management.

The exam consists of three levels and Each has its own emphasis, with all of them weighing ethics heavily.

Level I emphasizes tools and inputs, and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.

Level II emphasizes asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.

Level III study program emphasizes portfolio management, and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

All levels must be passed in order to secure the CFA designation. Each exam is 6 hours. There is no passing score, only pass/fail and candidates are given score reports that explain their performance according to other candidates. The exam uses a psychometric grading system similar to the CPA exam.

Studying takes about 10 – 15 hours per week for 18 weeks. Unlike the CPA, CFA candidates can take the exams as many times as they need to pass and there is no time limit to do so.

Career Options
A large number of CFAs end up as portfolio managers however other career options include research analyst, consultant, financial advisor or investment banking analyst. 7% of CFAs are actually chief executives.

Compensation and Other Benefits
Portfolio managers can make $77,443 – $144,360 (national average) so the obvious incentive to obtaining a CFA is the money. CFAs are overwhelmingly male, about 82% according to PayScale. For CPAs, the CFA designation offers quite a bit of flexibility in one’s career to work outside of accounting with a focus on financial products and investments.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts for GC here.

Will a CMA or CFM Get You Some Kind of CPA Exam “Credit”?

The short answer is no. The medium answer is hell no and the long answer is the rest of this post but first, let’s address the reader question, shall we?

Will any of the sections passed for the CMA and/or CFM count against the requirements for the CPA examination? In other words, can I avoid taking certain sections of the CPA examination because I have passed the CMA and CFM?


ALL candidates have to pass all four parts of the exam and for the lucky ones, there’s even a fifth part to worry about called ethics but that’s not all of you so we won’t get into that. There is no credit given for life experience, other letters after your name, certifications, and/or letters from your Mom attesting to your good moral character. You don’t get extra credit for making your written communications 15 paragraphs long, nor do you get a bonus for having the prettiest scribbles on your scratch paper. Nothing. Sorry kid but them’s the breaks.

CMAs are not automatically eligible to sit for the CPA exam simply because they are CMAs however required coursework for both credentials are similar so if you are eligible to pursue one, you may be eligible to pursue the other without additional education. This career track is best accomplished by getting an MBA or Masters in accounting, not completing your Bachelor’s and simply picking up a few extra units to fulfill the CPA’s 150 hour requirement.

If you are into it, check out some recent IMA numbers on salary potential for CMAs and CPAs. So while you won’t be able to get out of any of the usual CPA exam gruntwork, it still might be worth it to pursue anyway. And bonus, you might just be able to count your CPE units twice for both designations.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

PwC May Have Overlooked Billions in Illegal JP Morgan Transactions. Oopsie.

Now £15.7 billion may not seem like much to you if you are, say, Bill Gates or Ben Bernanke but for PwC UK, it may be the magic number that gets them into a whole steaming shitpile of trouble.

UK regulators allege that from 2002 – 2009, PwC client JP Morgan shuffled client money from its futures and options business into its own accounts, which is obviously illegal. Whether or not JP Morgan played with client money illegally is not the issue here, the issue is: will PwC be liable for signing off on JPM’s activities and failing to catch such significant shenanigans in a timely manner?


PwC did not simply audit the firm, they were hired to provide annual client reports that certified client money was safe in the event of a problem with the bank. Obviously that wasn’t the case.

The Financial Reporting Council and the Institute of Chartered Accountants of England are investigating the matter, and the Financial Services Authority has already fined P-dubs £33.3 million for co-mingling client money and bank money. That’s $48.8 million in Dirty Fed Notes if you are playing along at home.

Good luck with that, PwC. We genuinely mean that.

Inquiries mount after PwC ‘failed to notice’ mistakes [Times UK]

Does Anyone Have a Crayon for Mary Schapiro?

“The SEC’s efforts are, and will always be, a work in progress. We will continually refocus our energies as circumstances warrant, as new ideas are offered and considered, as we consider your opinions and suggestions. But the outlines are emerging, the colors are being filled in, and I am hopeful that a portrait of a financial marketplace more stable and efficient than the one we saw in 2008 is beginning to emerge.”

SEC Chair Mary Schapiro at CEO Quarterly Meeting of the Business Roundtable on the SEC’s ongoing efforts to color inside the lines. Apparently the Commission was free-handing all this time.

Convio Users Indicate That Things in the Nonprofit Sector Aren’t So Bad

Convio provides technology solutions to nonprofits and recently released a bit on its user base, showing pretty reassuring data that things are not that bad in the nonprofit sector.

When the Nonprofit Finance Fund released its 2010 outlook earlier this year, a nice calming Xanax was recommended before reading. So this is certainly a bit of good news for nonprofits, at least for the customer base from which the data was compiled.

Online giving grew 14 percent despite a difficult economy. Overall, 69 percent of organizations raised more in 2009 than 2008, while 31 percent saw declines in their online fundraising.

An increase in gifts drove fundraising gains. Of those that grew fundraising in 2009, 92 percent saw an increase in the number of gifts in 2009 compared with just 43 percent of organizations seeing an increase in their average gift amount.

Small organizations grew fastest. Organizations with fewer than 10,000 email addresses on file, many of which are participants in the Convio Go! program, grew online revenue by 26 percent, and gifts by 32 percent.

Web traffic growth continued for most, but at a slower rate. 60 percent of organizations grew their website traffic from 2008 to 2009. Web traffic growth in 2009 was in the single digits at 6 percent compared with double digit growth seen in previous years.

Web traffic was strongly correlated with email file growth. 38 percent of an organization’s success building large email files could be directly attributed to the amount of traffic to the organization’s website.

This year’s study analyzes data compiled from 499 nonprofit organizations that have at least 24 months of data to compare. The study aggregates results into benchmarks that nonprofit organizations can compare against their peer group and the industry as a whole. In addition the study provides separate benchmarks for 15 nonprofit industry sub-groups, or verticals across 19 key metrics. In total Convio’s clients raised more than $920 million online in 2009.

Convio Releases Annual Study of Nonprofit Sector’s Online Fundraising and Marketing Trends [BusinessWire]

Jury Awards $30 Million to Nonprofits That Alleged Fraud Against Wells Fargo

The Minneapolis Foundation, the Minnesota Medical Foundation, the Robins Kaplan Miller & Ciresi Foundation for Children and the Minnesota Workers’ Compensation Reinsurance Association have won $29.9 million from Wells Fargo in a Minnesota case that alleged investment fraud and breach of fiduciary duty based on investments the non-profits made that were deemed safe by Wells Fargo.


While similar cases against banks have mostly been settled out of court, this is the first time one such case has gone to trial.

Though the non-profits lost $14.1 million to these shoddy investments, Wells Fargo attorney Robert Weinstine blamed it on the financial crisis and insisted it was not Wells’ fault that funds were lost. The 10-member jury felt otherwise based on internal memos, e-mails and handwritten notes admitted as evidence in the trial.

The jury determined last Thursday that the bank would not be subject to additional payments for punitive damages. Attorney for the four non-profits Mike Ciresi had requested $100 million. Mathlete and Wells Fargo attorney Larry Hofmann told jurors that “zero is the correct number here” in terms of punies.

Four Time Management Tips for the CPA Exam

The subject of time management can be a sore one for CPA exam candidates, mostly the ones who have taken and failed at least one part knowing this was largely due to blowing too much time on a particular section or dedicating too much time to one component, like MCQ, and not nearly enough on simulations.

In order to combat this problem, it’s critical to set yourself a little countdown clock on your scratch paper as soon as you sit down at the computer to make sure you are leaving yourself plenty of time when you need it most.


Always allow 45 minutes for each simulation – Be sure to do each written communication first as only one is graded but you don’t know which and it’s an easy 10 points if you at least manage to scribble something down, even if you don’t have time to get through all the simulation tabs you can still pass if you have done the communications. It’s a crapshoot but stranger things have happened.

No more than a minute and a half on each multiple choice question – Add up the number of MCQ in a testlet and count up, writing the time you should be finished on your scratch paper. Let’s say you’re taking FAR and started at 10 am; you will need 45 minutes for each testlet if you are going to have 45 minutes left over for each simulation. So by 10:45, you should be on testlet 2, by 11:30, you’re on to testlet 3. That leaves you plenty of time for the sims. For REG, you’ve only got about 1.25 minutes per MCQ as you’ve got 3 hours total to get through the entire thing. If you’re doing well on time, go back and check the MCQ you marked for review (if any) otherwise trudge on to the next part and never take a break! You don’t have time!

And remember: never leave any questions blank! GUESS! – If you get it wrong, it’s wrong. If you get it right, you’re smarter and/or luckier than you thought and are that much closer to your CPA. The exam is a plus-point basis exam meaning you don’t lose points for wrong answers, you can only add points as you go.

If you’re short on time, forget the research – If you are running out of time on the simulations, try to complete as much as you can in each tab and blow off the research, as yet it isn’t worth much. This may change when CBT-e hits in 2011 but for now, it’s not worth it if you don’t have the time. You’d be better off reviewing your written communication if you only have two or three minutes to spare.

You learned all about time management when studying for the exam so take that knowledge into the testing center and knock ’em dead!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.