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.

Four Ways to Force Yourself to Study for the CPA Exam

I’ll save you the hoo-rah, I’m pretty sure you don’t need it. It’s March already; if you aren’t studying, you’re working, and if you’re doing both right now I worry about your decision-making capabilities. Oh well.

Masochistic or not, it isn’t always easy to get yourself motivated to study.

You have entire CPA exam strategies laid out on the CPAnet forums here, here, and look, you even have a hoo-rah. Not everyone is an Elijah Watt-Sells so get that out of your head and worry about what works for you.


That strategy – finding a perfect fit for your own needs as a CPA exam candidate – also goes for motivation.

So how do you force yourself to study? Here are a few ideas:

Bribe yourself – Sock away $xxx for a new toy and reward a passing score with whatever your bribe is. If you’re cheap/laid off/sinking $1000s into failed exam fees and broke, it could be a decent dinner or a movie. Define splurge for yourself and make that the carrot you dangle in front of your face to get you to study.

Commiserate – You can find plenty of miserable accountants taking (and not always succeeding at) the CPA exam. You can also find support and encouragement if you’re actually trying to pass, so use resources like CPAnet and Twitter to find other candidates to speak to. If you’re taking a live review, sign up with someone else from your firm and go to class together. It helps to have someone else keeping you in check.

Visualize your goal – This might be the most, um, cheesy of methods but it absolutely works. Write CPA after your name on business cards and put them up where you will see them frequently (but don’t hand them out, that’d be illegal); though this tactic isn’t meant as a substitute for actually preparing (sorry to break it to you), a little positive thinking takes the anxious edge off.

Plan – Sometimes knowing there is a clearly defined schedule takes some of the panic out of the CPA exam, and if you’re disciplined enough, you won’t need motivation. Sure, it’s robotic, but that’s what studying for the CPA exam is. The exam doesn’t ask you to think critically outside of the parameters of financial reporting and accounting, nor do you get bonus points for creativity. So maybe you just need to have a plan, stick to it, suck it up, and move on until you’re done. It’s the most miserable of the options but sometimes all that works.

So? What worked for you?

Are the Big 4 Desperate for Audit Work?

In the latest predatory tactic from our friends at the Big 87654, we see that the recession may not be treating them so badly. Sure, non-profit busywork isn’t exactly a good time to be had by all but it pays the bills and for the Big 4, there is no such thing as bottom of the barrel.

Take what you can get, right?


Crain’s:

The financial crisis blew up many big-name clients, leaving audit firms with excess capacity. Bear Stearns Cos., Merrill Lynch & Co., Washington Mutual Inc. and Fannie Mae disappeared from Deloitte LLP. Ernst & Young saw Lehman Bros. Holdings Inc. implode, while KPMG lost Countrywide Financial Corp. and PricewaterhouseCoopers lost Freddie Mac.

Gary Boomer, a Kansas-based accounting industry consultant, says Big Four firms sometimes are bidding less than $100 an hour for non-profit and public-sector work, down from $175 to $250 for junior auditors. “What they’re doing is buying some work to keep the staff busy,” he says.

That’s hilarious, shouldn’t we stop and think about why they allowed “the financial crisis” (you mean the unstable positions of those financial firms lost in the bloody battle?) to blow up so many of their big-name clients before we let them scavenge the scrapings for a tasty morsel of audit work?

I guess it works, it’s not like you’ve got guys in the cathedral on December 31st counting saint candles.

It could be worse. Here are some really nasty audits that the Big 4 could be doing in lieu of cheap non-profit and public sector work:

Joe Stack – Think about it, KPMG, you have some awfully tall buildings, be grateful.

Blackwater expenses – They really deserve their own audit team. It’ll keep those juniors busy, ifyaknowwhatImean.

C Street – Bonus side work helping Mark Sanford convert his dollars into Argentine pesos.

Whore yourselves out however you have to, guys, even if it means a door-to-door campaign for whatever audit work you can find.

Convergence of Accounting Rules Is Still a Pipe Dream

God forbid I go so far as to say this whole convergence thing is a conspiracy but it’s starting to reek like a bad Saturday morning cartoon plot. First the evil leaders start scamming for world domination, then they form shady alliances in darkened lairs and eventually the population gets sold into slavery until the hero comes and drops the villains in a vat of acid. Or something like that. If global financial “reform” were a Saturday morning cartoon, we’d be horribly overrun with villains and in desperate need of a hero.

Since it’s real life, all we can do is watch.


Compliance Week:

A spokesman for IASB said the two boards are expected to issue their first joint quarterly progress report very soon. A spokesman for FASB said the various project updates posted by the two boards demonstrates “quite a bit of progress” in recent months.

“We remain committed to working with IASB,” said spokesman Chris Klimek. “(We) appreciate the SEC’s leadership and additional guidance on this important matter, and like everyone, we will be studying the work plan carefully in the days ahead and discussing what it means for us.”

It’s cool! There’s a plan for convergence and here it goes: the SEC waits around for the FASB and IASB to figure out how to convert GAAP statement to IFRS without costing American companies billions ($35 million/year x companies converting = well you get it). Eventually, they might just figure this out. In the meantime, kick back and don’t get too worked up over it, the two bodies are still battling it out because of the same cultural barriers that have always stood in the way of a true marriage of FASB/IASB positions.

As Number Insights pointed out in 2007 (see how long we’ve been trying to do this? And what do we have to show for it?), a single set of principles might not be the bad part of this entire plan. GAAP is notoriously constrictive but principles-based accounting requires qualified accountants and I’m not sure our accountants are quite ready either, ignoring the costs associated. And a world without FASB? I can’t imagine it.

It doesn’t look like I’ll have to any time soon.

Estate Tax Planning with the Exuberant Accountant

The Exuberant Accountant isn’t the spamming type so when he sent out an email to, presumably, all of his blog’s email subscribers as a warning about new estate tax rules in 2010, it was clear this wasn’t a casual tax issue. Scott Heintzelman was kind enough to give me a few minutes to break down what this means for estates and why we should care.

Disclaimer: I took an estate tax class no less than two months ago and have since forgotten everything I learned so I needed a refresher anyway. As always, if you need advice on actually planning your estate, don’t listen to me and get yourself a CPA and/or tax lawyer. “We are accountants, ultimately we don’t draft agreements,” says Scott and he’s absolutely right. Get a trained mine-sniffer on that particular cluck mission.


Scott pointed to a recent post from his firm’s McKonomics blog called “No Estate Tax is a Good Thing, Right?” and it goes without saying he doesn’t believe this “no estate tax thing is good” by any means.

He gave the example of getting hit by a bus (awww, don’t run over the Exuberant Accountant!): If he walks out of his office tomorrow and dies, certain language in his will might leave a trust with $0 for poor Mrs Exuberant Accountant. What about the little Exuberant Accountant Jrs?! The humanity! Don’t worry, we’d start a charity drive.

Anyway, from McKonly & Asbury:

[M]any estate planners wrote wills with such language that the bypass trust would be funded with an amount equal to “the current lifetime exemption amount.” Since we currently have no estate tax, and no lifetime exemption amount, if a spouse dies in 2010, we could potentially have an unfunded bypass trust. This is especially alarming since we can all assume the estate tax will come back and we may have a taxable estate once the second [spouse passes] away.

Thanks for the heads up Scott, here’s to hoping you don’t get smashed by a bus this year. Look on the bright side, the estate tax goes up to 50% next year!

Earlier: Five Questions with The Exuberant Accountant

>75: How Long Should I Study for Each Section of the CPA Exam?

>75 received this week’s question via Twitter DM from a CPA exam candidate who wished to remain anonymous. Whatever. For those of you who prefer being open, almost crude, about your CPA exam experiences in a social atmosphere, try CPAnet’s CPA Exam Club (GC is there). This guy won’t be signing up any time soon.

Candidate halfway through the exam process asks:

“How long does it take to study for each section? Like is two months enough for FAR?”


I get this question a lot, almost too often. It’s an easy answer: that all depends on you.

The general rule (according to the AICPA) is that you should be doing 2 – 3 hours of self-study (MCQ/sims) for each hour of review lecture you watch. So there is no magic timeframe to aim for; some people take a few weeks to prepare for FAR, others need more than 3 months. Since lecture times vary depending on who you’re with, it’s hard to pin down the sweet spot in terms of weeks or months.

If you are going alone without a review course and using just practice questions, you can substitute textbook reading (like Wiley CPA Review textbooks) for lecture hours but you will probably want to count half an hour of reading as the equivalent of one hour of lecture. Sorry, that means more MCQ.

A key point to keep in mind is that studying for the CPA exam is like dieting, you’ll do better if you take it in smaller pieces. If you were trying to lose some of that audit engagement weight, you’d eat several small meals instead of three large ones. Your study plan should be the same, spending no more than 2 or 3 hours at a time plugging away at lectures or practice questions. Anything beyond 4 hours and you’re zoned out.

I know, you’re unemployed and have all this time and want to knock out FAR in three weeks studying 8 hours a day every day. Best of luck with that! You’re wasting 5 hours a day as your brain tunes out around hour 3 and will not be able to draw upon what you’ve studied once you’re actually at Prometric.

As I said, this doesn’t really answer your question because only you can answer that question. Is two months enough time for FAR? Sure. Adjust it accordingly based on whether or not you are employed, dating, engaged in any other activities, and/or have any sort of life whatsoever. Just don’t ever ask me how to study for BEC in a week again, obviously that is not enough time.

Priests Snitch on C Street Center to IRS for ‘Masquerading as a Church’

In case you’re not familiar, C Street is the destination spot for washed up, morally-tainted Republican All-Stars like South Carolina governor Mark Sanford post-Appalachain Trail (it’s called “decompression” and I suppose I’d do it too if I was hooked on an exotic South American beauty that wasn’t my wife) and Mississippi’s Chip Pickering who used the C Street facilities to entertain his mistress.

At least Sanford is classy enough to claim he was there for spiritual advice after his wife found out and started planning her book tour.


I guess we know what the C stands for (hint: it ends in “U Next Tuesday”) and there’s plenty of it running around the joint. Must be all that awesome Bible study.

WaPo:

The owners of a $1.8 million townhouse on Capitol Hill that has been home and refuge to conservative members of Congress are wrongly claiming a federal tax exemption reserved for religious establishments, 13 Ohio clergy members contend in a complaint to the Internal Revenue Service.

The clergy suspect that the C Street Center, which rents living space to lawmakers, is “an exclusive club for powerful officials . . . masquerading as a church,” according to a request for an investigation addressed to IRS Commissioner Douglas Shulman.

The questionable spirituality of C Street is nothing new but this is the first time real live priests have taken to snitching to front off the “organization”. Jim DeMint (another South Carolina Republican) defended the place (though mentioned nothing about whether or not he’d do Sanford’s mistress) saying, “We kind of make that commitment to each other to get together once a week. Sometimes it’s a Bible study; we always have a spiritual or scriptural thought. But sometimes we just talk about each others’ lives, try to get to know each other, remind each other that we are not important, that it’s just a title.”

How about lying, cheating, fake non-profit-status-having family values hypocrites? Is that just a title?

What’s up with C Street? Religious group for morally bankrupt politicians at the end of their rope seeking comfort and companionship or fundamentalist flophouse? I guess that’s for the Service to decide.

So far it doesn’t look good for our merry bunch of can’t-keep-it-in-their-pants GOPers, as DC already revoked 66% of C Street’s property tax exemption last year due to the fact that 66% of the facility was used as a residence and not a church.

Does getting on your knees count for that other 34%? Hallelujah and yay conservative family values!

SHOCKER: Accountants Have a Conservative Outlook on the Economy

Surprise, surprise! CFOs, controllers, and CPAs are only slightly skeptical about the economic outlook these days. Surely it’s not because our industry has been pounded harder than others, in fact we’ve weathered the storm better than most.

The fourth quarter AICPA-UNC Business and Industry Economic Outlook Survey sheds some light on where CPAs’ heads were at in Q4 2009:

Expectations among Certified Public Accountant executives for the U.S. economy remained pessimistic in the first quarter as the recovery proved sluggish amid signs of potential growth in manufacturing and a slightly improving outlook for organizations, according to a new nationwide survey conducted by the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School.


“It is good to see signs of optimism, especially from the manufacturing sector,” said Carol Scott, CPA, AICPA vice president for business, industry and government. “Unfortunately 40 percent of our CPA members in business and industry — chief financial officers, controllers and CPA financial professionals – are now telling us that they do not expect their business to return to pre-recession levels until 2012 and beyond.”

Such a conservative bunch, those little accountants.

Interestingly enough, the latest survey shows a shift in the collective thinking of CPAs, who had shown uncharacteristic optimism in previous 2009 survey responses. What gives, guys? Know something we don’t that you’d like to share with the class? Perhaps reality has finally bit down and left a mark on a traditionally recession-proof industry.

In a recent “unscientific” straw poll of AICPA Insider readers, CPA Trendlines’ Rick Telberg shares CPAs’ top 10 concerns, not surprisingly dominated by the number one concern for accounting professionals, the economic outlook. Firms are cutting costs and slicing away the “flash”, meaning no stupid tchotchkes for you!

Will this back-to-basics approach change CPAs’ outlook for the quarters ahead or simply keep everyone afloat until things do genuinely begin to look up? If nothing else it means better service for clients and maybe a little less fear for accounting practitioners who are ultimately the ones who have to deal with any shift in the industry outlook. Clients will always be around, it’s the qualified professionals I’m a tad worried about.

We’ll let you know what happens with the next survey but are not afraid to wildly speculate that respondents will continue to pull back the optimism and stick to conservatism as usual.

Sarbanes-Oxley’s Latest Unintended Consequence: Even Worse Postal Service

I never believed Sarbanes-Oxley could even be blamed for shrinking media distribution but the impossible has happened and CPA Trendlines shares the Compliance Week article that enlightens us on this latest unintended SOX consequence:

The Clovis News Journal—paper of record for Clovis, population 37,200—says that it cand no longer deliver newspapers to its subscribers. The reason? Sarbanes-Oxley.

“Due to the federal Sarbanes-Oxley Act and its required implementation locally by the U.S. Postal Service, the Portales and Clovis post offices no longer can provide same-day mailed service of the Portales News-Tribune and the Clovis News Journal,” according to the News Journal website.


News Journal’s circulation director tells Compliance Week that the issue could be due to a “misinterpretation” of SOX rules by the local Post Office, who swears it is simply complying with the Postal Accountability and Enhancement Act of 2006.

Section 404 strikes again!

It appears as though the USPS also misinterpreted pension accounting rules, leading to it overpaying some $75 billion to the Postal Service’s Civil Service Retirement System pension (so says the USPS Inspector General). What the hell is going on over there? Is that SOX’s fault too? I love blaming Sarbanes-Oxley for stuff too but let’s be reasonable here, these guys are a mess.

By March 2010, the USPS will be “locking down” its tech systems for six months as it struggles to comply with only the worst bits of SOX for the sake of, uh, efficiency? Intelligent Mail has already proven to be a burden in a climate where more of us email than use stamps, online bill pay is the norm and publicly-traded bad boys like UPS and FedEx dominate market share. They already know their way around SOX and have the capital to handle it if they need a few compliance artists around. The USPS? Not so lucky.

Perhaps the local Post Office is confused and Clovis News Journal’s 410 print delivery subscribers will get their papers at last. If not, is it really appropriate to blame SOX? Sure, why not, if not this I’m sure we can find something else to peg to it if the need arises.

Making mailers sign off like auditors on a piece of mail? Oh now that’s tedious. Yay SOX!

Most Aren’t Ready for IFRS on the CPA Exam

Last year, the AICPA Board of Examiners made it clear that though a roadmap for IFRS adoption in US financial reporting might be a ways off, it intended to start testing IFRS in Financial Accounting and Reporting (mostly, we’ll get to that in a second) in the first window of 2011. Just a friendly reminder, that’s only three testing windows away.

But what gives? According to the 2009 KPMG-AAA Faculty Survey, only 8% of respondents felt as though at least half of their accounting faculty were qualified to teach IFRS. Meanwhile, 70% of professors said their most significant challenge to teaching IFRS was finding room for it in the curriculum.

As far as I am aware, State Boards of Accountancy have not shown a desire to require IFRS coursework to be eligible to sit for the CPA exam at this time.

The Big 87654 committed to pushing IFRS in college classrooms as early as May of 2008 (months before the SEC announced an IFRS adoption roadmap) and they are still tossing millions at the initiative.


In December of 2008, The Summa’s Professor Albrecht insisted that the Big 87654 had certainly chosen the right candidate, lobbying Obama to accomplish their IFRS goals. Why? “Obscene profits,” he says, pointing to campaign contributions and Obama’s subsequent pro-IFRS SEC Chair pick as signs that IFRS doomsday is upon us. A little over a year later, the SEC appears too busy chasing “crime” and playing catch up to issue a clear directive on IFRS in the US.

So? How can the AICPA BoE insist on testing information that A) accounting students still aren’t being taught and B) isn’t widely understood or practiced by most CPAs in the US?

I certainly get what the AICPA is trying to do and if nothing else, they probably want to show off that their awesome psychometric CPA exam technology is OMGamazing! and ready to adapt in a timely and efficient manner. But pushing IFRS on unsuspecting CPA exam candidates isn’t really the way to demonstrate that.

Is it just a coincidence that now the AICPA is prepared to reevaluate their scoring process after the first two testing windows of 2011? Even they know this is an awful idea.

Is Kansas Squeezing Non-profits to Close Its Budget Gap?

Kansas has a bit of problem with its tax code, or perhaps the issue at hand is not necessarily Kansas’ broken tax system but the suspicious absence of those all-important tax revenues. Seeking to fill a $416 million budget gap for the FY beginning July 1, it has begun looking at simplifying complicated exemptions but the change could hit already struggling non-profits in the state hard.


NYT:

Lori McMillan, an associate professor of tax law at Washburn University, said the proposal to not grant exemptions to specifically named organizations but rather categories, such as nonprofit and charitable organizations, was a better policy for the state.

”Sometimes it seems that the criterion for an exemption is one’s ability to find a parking place and the committee room,” said Mark Desetti, a lobbyist for the Kansas National Education Association.

Emily Compton, president and CEO of Goodwill Industries of Kansas, said removing the exemption would increase her operating expenses by $40,000. She said the organization also must come up with $125,000 in unemployment tax contributions this spring and the combined increase in expenditures could result in fewer services and employees.

The change would mostly mean Goodwill sacrificing its sales tax exemption but that’s not all that’s on the chopping block.

Also up for debate, a program that would reduce seldom-used tax credits for low-income individuals to buy a home, fund education, or start a business:

John Scott, president of the Interfaith Housing Services Inc. which administers the program in Hutchinson, said the IDA program is budgeted to receive $500,000 worth of 50 percent tax credits each year. For example, if someone invests $100,000 in the program, they receive a $50,000 tax credit.

He said that if the program has to be changed, reducing the amount to $250,000 would be acceptable and still allow it to receive matching grants from other sources.

“We feel this is a win-win compromise. It helps you cut the budget without losing outside revenue, and it does not force us to close the program and possibly cause loss of jobs,” Scott said.

As is, the state exempts $4.2 billion in sales taxes and proposals currently under review by the House Taxation Committee could bring in an additional $196 million – still leaving a $220 million budget gap.

Is Kansas penalizing non-profits is the way to make up the gap? Goodwill Industries claims 83 cents of every dollar generated in its retail stores goes to serving its mission of providing work to individuals in need. Can the government of Kansas claim that level of efficiency when it comes to tax revenues?

Three Tips for New Accounting Bloggers

After a recent GC post on social networking tips for accountants, our friend and superstar social media maven Tom Hood (CEO of the Maryland Association of CPAs, but you should already know that) asked “what about blogs?”

Well, Tom, excellent question! What about blogs?

Blogging for accountants is no different than any other industry and there’s no one template that works for everyone.


With MACPA’s own Bill Sheridan breathing down my neck and stealing my readerbase with quality content (just kidding, Bill) on CPA Success, I imagine our buddy Tom doesn’t need tips on how to start and keep up a great accounting blog. But we aren’t all as new media savvy as Tom Hood and making the decision to blog can be an overwhelming choice if not executed correctly.

Personally, I try to practice a single rule of thumb: to thy own self be true.

While the F-bomb dropping, SEC-cussing-out model may not work for anyone but Jr Deputy Accountant (remember, I’m not a CPA, I just play one on TV), the rule in practice is the same regardless of who is doing the blogging.

So here are a few general hints if you’re an accountant looking to plunge head-first into the exciting world of blogging:

• Find a mentor – This part is easy! Comb through accounting blogs (Michelle Golden has a handy and incredible extensive list of accounting bloggers you can check out if you’re absolutely stumped) to find a “voice” that aligns closely with your own. Reach out to the blog author, connect with other accounting bloggers on Twitter, and express your desires openly to the community.

• Make a commitment – This can often be the hardest part but blogging requires a dedication to fresh content if you are going to be widely read and accepted.

• Find your niche – Accounting bloggers come in all sorts of flavors; non-profit, tax, regulation, technology, auditing, etc. It is important in carving out your corner of the blogosphere to find your voice and embrace the area of expertise you are most passionate about. Ask yourself what moves you as an accountant if you are trying to find out what will inspire you as an accounting writer.

The reality is that no one can tell you what works for you and perhaps you will discover a path that has not yet been taken but should you need a little push in the right direction, trying out these tips should get you there with minimal effort.

The key to sustainable, well-received blogging is a passion for what you are writing about; if you enjoy what you do and want to write about it, that passion will translate for your audience and lead to countless opportunities to express your enthusiasm.

At Blackwater, Strippers and Hookers are Legitimate Expenses

Allegedly of course!

It’s bad enough when even the Iraqis are saying GTFO but that’s exactly what’s happened to about 250 ex-Blackwater employees still lingering around Iraq. “I don’t think the Iraqi government is willing to have any Blackwater member, even if they are working in other companies,” government spokesman Ali al-Dabbagh told CNN in January.”

But it isn’t just the Iraqis with a Blackwater bone to pick – former Blackwater employees allege the security firm hired strippers, prostitutes, and “incompetent personnel” to defraud authorities while working security details in Iraq and Afghanistan, as well as in post-Katrina Louisiana.


WTF is going on here? If you’re going to rip off the federal government, I guess it’s good to get your money’s worth, especially if you know their internal controls are for shit.

CNN:

Melan Davis, who was involved in record-keeping, said Blackwater billed the government for prostitution services in Afghanistan from a Filipino female, whose name was on Blackwater’s payroll roster under a category called “Morale Welfare Recreation.”

She said Blackwater billed the woman’s plane tickets and monthly salary to the United States.

The lawsuit also said a vendor being paid for “cleaning services” in Louisiana was providing strippers.

Blackwater spokespeople (the company is now known as Xe, though we won’t pontificate as to why another rebranding might be appropriate at this time) claim Davis must be trippin’. Strippers? Hookers? Fake receipts? No way!

“The allegations are without merit and the company will vigorously defend against this lawsuit. It is noteworthy that the government has declined to intervene in this action,” Xe told CNN.

This is not the first time Blackwater has been accused of defrauding the government; California’s Henry Waxman (D) accused the contractor of running a tax scheme to avoid paying what his staffers estimated as $15.5 million in Social Security and Medicare taxes, $15.8 million federal income tax withholding and $500,000 in unemployment taxes between May 2006 and March 2007.

So? What’s worse? Not paying taxes or expensing “Morale Welfare Recreation” on Uncle Sam’s dime?