*ranked from the Accounting Today Top 100 #10: BDO Wayne Berson has done wonderful things for BDO but I definitely wouldn't do wonderful things to him. Nope. Sorry Wayne but… just no. The good news is you're one makeover away from being Eric Cantor, in which case, email me. #9: CliftonLarsonAllen It's a known fact […]
Caleb and I had a talk last night and it made me think about this whole Occupy Wall Street thing. More importantly, it made me think about what I am and am not doing to support it. I haven’t been to a rally, even to take pictures (last time I tried to do that, I was the only one out in front of the Federal Reserve Board at 6 in the morning except for the lone Fed cop patrolling the perimeter).
I get that people are pissed off. I’m pissed off too. I’ve been pissed off, don’t tell me about being pissed off. I was lugging around aFed sign made on top of “Ron Paul ’08” acrylic three years ago, you don’t have to tell me about being pissed off. (Here I am in 2009 on SF Citizen in a “Bernanke 00%” t-shirt at an anti-Iraq war rally)
And I get that for some people, all there is to do is go downtown with a drum and some poorly-written signs on cardboard ripped from your mom’s Costco packages in the recycle bin. That’s totally fine, everyone has their own way of sticking it to the man.
For a lot of Going Concern readers, sticking it to the man means showing up every day in business casual pretending to give a fuck about COSO but actually knowing that it’s all a lie. They work you to the bone until you leave or submit and get promoted to manager. Partner if you’re lucky. Run on that hamster wheel, here have this bonus, keep going and one day you can beat your own subordinates into submission. Go, go, go… Many of you get that this is bullshit but keep showing up every day anyway, and to me, you are your own special kind of protester. Same as last year, motherfucker, it’s the ultimate form of rebellion.
Point being, everyone has their own way of screwing the establishment. Francine does it railing against the Big 4. Bill Sheridan and Tom Hood do it at the MACPA with professionalism. Tom Selling does it by riling up fellow academics. Professor Dave Albrecht does it by being seen in public canoodling with known incendiaries like yours truly.
I do it by ripping on the IASB as often as I am allowed to, infiltrating the Hill to sniff out what’s the latest in CPA lobbying efforts and getting in as many F bombs as I can on the dry subject of accounting. That’s all I can do. I can’t abandon my day job to hang out in Manhattan eating vegan paninis. I can make and distribute offensive Bernanke fridge magnets.
I completely understand why people are attracted to Occupy Wall Street; the part I’m struggling with is why so many of the 99 Percenters seem obsessed with this thing called “fairness” that does not, in fact, exist. Is it fair that any of us have to drag our asses to work every day and do what we do? Is it fair that Becker costs $3,000 and doesn’t pass the CPA exam for you? Is it fair that many of you are drowning in student loan debt and seemingly forced to get Master’s degrees just to work in your field? Is it fair that Caleb gets listed in all the accounting publications and I’m stuck as the sidekick hack who always manages to piss people off? This world is unfair, sorry to be the bearer of bad news. I have to write about accounting every day of my life, it’s un-fucking-fair, we get it.
In my view (for whatever that is worth, which is probably not more than our company pays me to write this post), the ultimate rebellion is assimilating and infiltrating the establishment to enact real change from the inside. Are partners scared as shit of this website? Yes. If they’re threatening you with termination if you even dare to write us for advice, we’re doing something right. And I didn’t even have to not shave my armpits to accomplish that (but Caleb probably shaved his).
Are any of you going to independently revolutionize the accounting industry? Probably not. But collectively, you have scared the pants off of lazy ass recruiters and partners across this country who thought you didn’t have it in you. They read us because they feel like they have to or else they’ll lose touch with what you guys are thinking, and it scares the living shit out of them. In my mind, that’s a far more effective message to send the The Establishment, whoever the hell they are.
I fully support the fundamental sentiment of Occupy Wall Street but much prefer fulfilling my incendiary duties here trying to get accounting kids riled up and questioning why they put up with the shit they do. Working mothers in public accounting should be allowed to have children. Interns should be allowed to ask questions (even dumb ones). Auditors should be expected to question last year’s logic. It’s not complicated but it’s important work that a lot of you do, and I hope that you get that.
It is not your fault that we’re here. Many of you just followed the rules.
Thanks for letting me be a part of that. Beats standing around with a fucking sign, that’s for sure.
If you’ve recently inherited a little money from a deceased relative, please accept our condolences. Then accept our advice, which might help you navigate this tricky area without ending up in the IRS penalty box and/or screwing yourself later on down the road.
Special thanks due to Allen DeLeon, CPA, PFS of DeLeon and Stang, who gave me good advice when I found myself in this situation with no clue how to handle it and some pointers for this article. If you are in Maryland and need an expert to help with your inheritance (Fluffy Mattress, CPA is not taking on new clients at this time), hit up the firm and they’ll be happy to help. The following is not presented as tax advice and is not meant as a substitute for a professional assessment of your personal situation.
First, you might be a CPA but that doesn’t mean you are an expert in personal financial planning, estate rules and tax law. So unless you happen to be a partner with 20 years experience handling inherited IRAs and pension plans, find yourself a qualified CPA from whom you can get a little advice. Maybe there is a partner in your office who you trust that knows a thing or two about this area but absent that, check with your state society of CPAs to see if they have a recommendation. It shouldn’t be hard to find someone in your state.
Second, get any real estate or other property valued and save all documentation. You aren’t taxed on the receipt of property, so if your grandma leaves you her house, you don’t have $200,000 in income to claim but you will have a gain (or loss) to report later (should you sell this property) that is based on its value at the time of the owner’s death. If you end up never valuing it and renting it out for a decade and then want to sell it, you’ll be ass out if you don’t have a baseline value. This goes for stocks too but you should have no problem figuring out what those are worth.
On the federal level, the only initial tax you have to worry about is on inherited IRAs and pension plans, which are taxed as income (meaning at your normal tax rate – be wary of a large sum changing your tax bracket). If you cash these out, you can elect to have the tax withheld or pay it directly to the IRS yourself after distribution but keep in mind there could be penalties associated with that option.
Currently, most inheritance is not subject to income tax. The second Congress reads this article, however, that could change so again, talk to someone who actually knows the rules and keeps us with any changes if you are at all unsure how to proceed.
It’s been quite some time since we brought you Five Questions as we’ve already asked just about everyone worth asking to participate. But we’ve got a serious bacon fetish and a penchant for saving our pennies, so when we got the chance to interrogate Feed the Pig’s Benjamin Bankes, we couldn’t pass up the opportunity.
In case you aren’t familiar with his work, BB is th��������������������f the AICPA’s Feed the Pig campaign, inspiring saving across the country through PSAs, tweets and other similar awareness campaigns. His people got in touch with us and sent his official bio thusly:
Although he comes from a long line of investment piggy bankers, Benjamin once toyed with the idea of playing professional football (he wanted to be the ball in a Super Bowl game). Once he realized he would have no life with that career, the idea quickly boared him. Then, he discovered the alarming state of personal finances in this country and Benjamin realized his true life’s mission.
Bankes attended Sowthwestern University, where this little piggy went to marketing classes. Though he has never been known as a party animal, he does enjoy the occasional mudslide. In addition to his sharp business sense, Benjamin is also a very talented fiction writer who goes under the pig-pen name of H.W. Hogfellow. Other interests include: long trots on the beach, watching television (his favorite show is Squeel of Fortune), viewing movies (favorite movie is Martin Boarsese’s epic, The Hogfather), and listening to music (favorite song is “Pigs Don’t Lie” by Shoatkira). Benjamin currently resides in the minds of 25 – 34 year-olds everywhere who need proper financial guidance.
Feed the Pig’s hard work is definitely working. According to a survey conducted by The Advertising Council:
Respondents who recalled seeing or hearing the Feed the Pig PSAs were more likely to claim they always take certain actions to save money, such as:
o Keeping a budget of their expenses (33% vs. 19%)
o Saving for long-term financial goals such as education, a house or retirement (30 vs. 18%)
o Bringing a bagged lunch to work and/or eat leftover meals (29% vs. 21%)
o Comparison shopping for the purchase of most items (49% vs. 23%)
o Increasing savings when they receive a salary increase (27% vs. 16%)
Respondents who recalled seeing or hearing the Feed the Pig PSAs were more likely than those who had not to report that in the past six months, they have taken action to learn more about managing their finances. Reported activities include:
o Discussing ways to save money with friends and family (84% vs. 67%)
o Visiting a website to get more information about how to save money (62% vs. 34%)
o Calling a toll-free number to get more information (32% vs. 4%)
Side note: this interviewer slipped an extra $20 in her piggy bank after writing this piece.
We’d like to say we sat down with Benjamin but good bacon would have gotten hurt in the process, so instead we caught up with him via email and asked all the sizzling questions we could come up with.
AG: Does it hurt having that slot in your head?
BB: Only when it’s empty.
AG: When we think of financial literacy we think of you but what are some other resources for those interested in learning how and why to save?
BB: Of course I recommend my website, www.feedthepig.org as well as another financial literacy website from AICPA, www.360financialliteracy.org. In addition the state CPA societies have wonderful financial literacy sites and offer programs in their communities. Here’s a sampling:
Texas Society of CPAs: http://www.valueyourmoney.org/
California Society of CPAs: http://www.calcpa.org/Content/Financial_Literacy.aspx
Virginia Society of CPAs: http://www.vscpa.com/Content/financial_fitness/default.aspx
AG: Do you read any accounting blogs and if so, which do you like?
BB: Do I sense a leading question? You’ve got to get up pretty early in the morning to pull one over on Benjamin Bankes.
AG: Fine, we won’t send you a FREE I heart Jr Deputy Accountant bumper sticker then. Moving on, even though financial literacy is important, we all deserve a splurge every now and then, especially if we are being diligent about saving our money. How do you splurge?
BB: I put ice cubes in my tap water.
AG: Sounds like you missed your calling, you would make a great CPA. Lastly, are you going to be visiting Capitol Hill any time soon? Seems like America as a whole has really embraced your message but Washington could really use your help. You can stay at my house to save a few bucks on a hotel room.
BB: I don’t have any trips planned right now, high gas prices and all, but follow me on Twitter (@feedthepig) and I’ll let you know when I’m there.
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.
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!
Warning: the following is a rant and it’s nearly four years in the making. If you offend easily or think you might recognize yourself in what I’m about to rant on, maybe you should skip this post and come back Friday when I’m back to offering cuddly advice on how to pass the CPA exam. For now, I have a serious bone to pick and can hold my tongue no longer.
As many of you know, I spent my early years on the fringes of the industry in CPA review. I loved my job, mostly because I gobbled up everything I could about the exam and was able to offer that knowledge to others at a critical time in their lives. I loved being able to share in their successes (and failures) and it was a joy to work with some of our students who went out ofize what I’d brought to their experience. We all know it’s hell, and I can’t say my job was any less stressful than the exam experience itself but it was worth it to come to work every day just to hear a heart-felt “thank you” from a candidate who truly appreciated what I’d done to help them get those three all-important letters after their name.
But for every sweet student, I would have to deal with a handful of lazy, unmotivated, over-privileged pricks who expected the exam to pass itself and seemed to blame everyone except themselves when things went wrong. Somehow it was my fault that they spent the last year getting wasted and posting photographic evidence on Facebook, or my fault that they blew off studying to play WoW or [insert lame, overplayed excuse here]. And that’s exactly what they were and will continue to be: excuses. I can tell you that nothing will stand between a CPA exam candidate and their goal of licensure more than excuses. Well, maybe lack of knowledge but that’s a rant for another day.
The worst excuse of all has always been and will always be “I’m too busy.” If you’re too busy to read through the terms and conditions before you shell out a few grand for a review course (or at a minimum, call up with reasonable questions about how things work), you’re probably too busy to take the exam. If you’re too busy to dedicate two hours a day to studying, you’re again likely too busy to take the exam. If you’re too busy to sacrifice 14 hours to exam-taking and 400 hours to studying in 18 months time, you’re definitely too busy to take the exam.
It’s a pathetic excuse when you think about it because who decided to take this thing in the first place? You did and at some point I can only hope it registered in your mind before making said decision that you still have things to do and a limited amount of time to do them. But you chose to do this anyway, right?
My favorite are the parents who also work full-time and complain that they are just too busy. Listen, no one is debating the fact that they have a metric shit ton on their plate but what they seem to forget is that life is all about choices and they chose to start working, get married and have children before passing the exam. So, sorry but it’s not like life is just a random shuffled deck, each candidate getting whichever cards the dealer hands out; we’re all adults here and as such, it’s important that we recognize the impact of the choices we make. The AICPA Board of Examiners didn’t decide to start a family for you, you did.
This exam sucks for everyone and for different reasons. Stop making it suck even for people who aren’t taking it by thinking somehow you are more important than everyone else and therefore entitled to some kind of special treatment because you work 60 hours a week (who chose this line of work again? Please remind me). Somehow hundreds of thousands of equally-busy future CPAs have managed to pass this thing before you and I didn’t hear most of them complaining about how busy they are. Get over yourself or get out of public.
Yesterday, Caleb shared the details on a tentative new plan hatched by Dodd-Frank that would require nonpublic brokers and dealers to open their doors to that special brand of attention known as PCAOB inspections. We also learned that if the PCAOB gets their way, those special little broker-dealers will be asked to pony up the cash for the privilege of getting PCAOB patdowns.
The Public Company Accounting Oversight Board may require the biggest U.S. broker-dealers to pay more than $1 million a year to fund auditor inspections required under the Dodd-Frank Act.
PCAOB board members voted unanimously Tuesday to seek comment on the proposal, which would create a mechanism for raising the $15 million needed to perform reviews dictated by the financial- regulation overhaul enacted in July.
Unlike audit firms, of which 97% of the littler ones get constantly pestered by the PCAOB while the big boys get their boxes checked and can hit the ranges by noon for cocktail hour on the putting green, the new funding requirement would only affect 14 percent of broker-dealers large enough to meet the PCAOB’s tentative net-capital requirements.
These fees would account for seven percent of the PCAOB’s total funding, guesstimated terminally-acting PCAOB chair Dan Goelzer.
PCAOB board member Bill Gradison is sure that the PCAOB is serious about identifying issues and doing its job protecting the public or whatever the hell it is they are there to do. That means no working things out as they go, I suppose. He swears the interim inspection program is not “just a learning experience for the PCAOB” and “could have consequences for the firms involved.” That’s if anyone finds anything fishy, I am guessing.
For this, my first CPA exam advice column since 2010 testing finally closed, we have a pretty interesting question from a candidate in Georgia who wants to know if it her 74 is worth a rescore. Normally my advice is to forget about disputing your score as the AICPA has not actually changed a single failing score to passing in the last three years (remember, their formula is bulletproof and they are not about to admit their precious psychometric testing sucks) but this is a special case.
Hello, I have a question related to my score on Auditing and would appreciate any advice you could provide. I took the exam on 10/28/2010 and received my score of 74. I am wondering what my options are for appeal or review. The reason for this is because on the last simulation one of the tabs was not the same when I tried to review as when I first saw it. I am 100% sure that I had the choice of 6 options when taken the exam. But once I went back to review the test, there were only 4 choices available. I did report this to the coordinator that was present and she told me that she would write a report. I also reported in the section where they ask if there were any problems during testing.
Firstly, remember that Prometric test center staff are not hired by the AICPA to administer your test. They administer hundreds of different professional examinations, not just the CPA, so they don’t really get how important a single screwed up simulation can be to your overall score. Don’t be surprised if they merely wrote down your complaint and tossed it into the examination abyss.
That being said, the AICPA’s appeal process isn’t really going to help you. As I said above, the chances of a rescore turning out favorably for you are slim to none.
But you may have another option, available through your state board, that would allow you to meet with one of their representatives and see the questions you did not answer correctly. Whether or not this actually ends up in your 74 turning into a 75 is up for debate and in my three years of working in CPA review, I never met anyone who did this, let alone did it successfully.
Contact your state board and ask about the score appeal option. If available, you will likely have to pay a fee and there are no guarantees that anything positive will come of it but if you sincerely believe that the simulation changed, that’s a glitch and throwing out that simulation could just bring you beyond a 75.
We’ve been talking plenty about 2011 CPA exam changes but since this is my last Friday CPA exam column until the new exam hits in January of next year (December being a blackout month), I figured now would be a good time to go over what will or might be changing next year, much of which is entirely dependent on how things turn out early in the year when CBT-e launches.
First, international standards WILL be eligible to be tested beginning January 1, 2011 but that doesn’t mean the 2010 exam and 2011 will be completely different. I suspect that the AICPA Board of Examiners will be extremely conservative with new standards for at least the first two testing windows of 2011 if not longer. That means you will see new standards and questions but likely will not see too much new material if you’re testing in January/February or April/May.
Second, simulations and research problems WILL look different, unless you’ve taken the exam this year already, in which case you’ve probably already seen a preliminary version of 2011’s simlet problems. The format is changing slightly but pretty close to the current tabs in simulations so it may not look all that different to you come 2011. Research will be worth more than the single point it is now so check out the tutorial on the AICPA’s website and don’t forget to use your current NTS for a free 6 month subscription to the professional literature.
Third, the candidate performance report (score report) is changing. Check out the AICPA’s website for a somewhat complicated scoring FAQ that explains how they currently determine your performance and what all those “comparable” or “weaker” notations mean on your score report.
Fourth, possibly based on the third point, the AICPA has pledged to look into changing what qualifies as a passing score in 2011. They have been pretty quiet with details and have not really said whether new passing scores – if implemented – would be higher or lower than the current 75. The best bet until we hear otherwise is to relax and worry about it later if they decide an 80 works better. They have pledged to give scoring a look after the first window of 2011 so stay tuned and we’ll let you know if we hear anything at that point.
Lastly, remember that the AICPA is nothing if not conservative. That means even though things are changing next year, it is highly unlikely that the AICPA will feel comfortable completely changing things on candidates. So for those of you rushing to get in one last part in the next two weeks (remember: you’ve only got 8 testing days left in 2010!), I’m pretty sure you’ll find next year’s exam to be far more familiar to you than you might think.
On July 19, the AICPA sent a letter to the House and Senate condemning new 1099 reporting requirements (said requirements being carefully hidden inside The Patient Protection and Affordable Care Act a.k.a. Obamacare) as burdensome and annoying. Apparently the AICPA must feel quite strongly about this matter as it is now November and they have sent a very similar letter to Congress, perhaps to show them just how burdensome extra paperwork can really be.
The House letter may be found here.
The AICPA doesn’t like that rental property owners could now be required to keep extensive records and bother with tax issues in typically tax-free January, among other things:
This would be the first time that individual taxpayers owning rental property who are not “engaged in a trade or business,” would be required to provide Forms 1099-MISC. For example, many individuals, who own a vacation property that is rented part of the year to help defray their costs, would be subject to the provisions of the SBJA. We are concerned that (1) keeping records to track expenses by provider, (2) obtaining tax identification numbers and other information from providers of property and services, and (3) providing Forms 1099-MISC during January, a month when taxpayers would not normally be focused on tax issues, would be extremely burdensome. Additionally, the AICPA questions the need for sending information forms to certain providers of services, such as utility companies.
Thankfully the AICPA has everyone’s back and feels as though business owners should be allowed to focus on growing their businesses instead of worrying over filling out massive amounts of paperwork. We’ve got to appreciate that attitude as any other professional organization might salivate over the idea of plenty of billable hours to go around as CPAs line up to hook up business owners with the right paperwork but not the AICPA, who said “businesses do not need the added cost of more regulatory requirements at a time when their efforts must be focused on profitability and sustainability.” Word!
We look forward to the next round of angry letters from the AICPA on this matter and hope that they don’t find fighting Congress too burdensome.
Some of you seemed less than enthused when we shared an AccountingWEB piece on the AICPA’s new “Clearly Pretty Awesome” campaign two weeks ago so I’m here to get a good hoo-RAH out of you in the hopes that you, our brilliant, bitter and oftentimes inappropriate Going Concern readers, might have 2 or 3 cents to add.
Here’s the deal, the AICPA is giving away cash and prizes (to be used strictly for educational purposes, that is) for whomever (between ages 15 – 19) can come up with the best made-up job title using those all important three letters: C P A. Since the efforts of both the Obama administration and Ben Bernanke seem to be useless in creating jobs, perhaps high schoolers can boast a better success rate in creating new jobs. Sorry, Certified Public Asshole is already taken and frankly, kind of played out. But that doesn’t mean you can’t have similar ideas for made-up jobs, though whether or not anyone actually becomes a Chief Private Asshat remains to be seen.
The obvious inspiration behind the campaign is to plant the seed of public accounting in young little future beancounters’ brains when they are still pliable and easily influenced. After all, it’s easier to get them now, as opposed to later on down the road when they’re bitter and pissed off, overworked and saddled with a family and a career. While we admire the AICPA’s efforts in painting the profession in as cool a light as possible given the circumstances, we don’t quite see the point in rewarding whomever makes up “city park accordionist”.
Instead, here’s what I propose: take your high school student to work day for CPAs. Cops do it, why can’t we? Invite high school students to go on a ride-along to the client and hell, while they’re there why not have them partake in such exciting awesomeness as inventory counts? It will look great on their résumés when the job market looks up in 3 – 7 years!
Or better, encourage students to become forensic accountants by taking them to a real prison to follow a day in the life of Jeff Skilling complete with orange uniform and over-aggressive cellmate. That kills two birds with one stone as the impressionable youngsters could also get a great lesson in sexual harassment from a tattooed dude named Spike and save themselves an employee training or two down the road. Perfect!
So, go on then, what do you think CPA could stand for?
Listen, this may seem like a ridiculous question and knowing our tax-obsessed friend Joe Kristan, chances are he was kidding when he asked it but I couldn’t help but indulge him since this is actually one I have thought about more than once.
Being pretty well-covered from head to toe in ink myself, if it were allowed (and were I completely bankrupt of ethical fortitude), tattoos #34 – 47 co be mnemonic cheat sheets. But is it allowed?
@adrigonzo Can you tatoo [sic] cheat sheets on your arms? If so, what parts do you recommend?
Valid question (if ridiculous), no? Let’s look at the rules.
You cannot bring paper, pencil, notes, your cell phone, a calculator watch (who even USES one of those?!), or even a hat into Prometric and if you choose to bring a jacket (I hear those rooms get chilly), you’ve got to wear it all 3 – 4 hours of the exam or else risk running out of time to take a break and put it in your locker. But as far as I can tell, there is absolutely no requirement that would otherwise bar someone from writing down the “answers” in fancy script on the absorbent epidermis of their inner forearms. After all, it’s not like you can remove your skin, right?
Here’s the problem (or four):
The first is that the AICPA Board of Examiners guard their proprietary CPA exam questions with their lives. If it came down to someone being able to bypass the rules by slipping past Prometric with answers tattooed on them, chances are they’d not only skin the offender but sue the shit out of them to find out where they got those answers. Review courses may have practice questions that are similar to actual exam content and the AICPA may retire 50 questions from each section a year but NO ONE except for the AICPA Board of Examiners has an actual answer key.
That being said, if by some fluke someone were able to get their hands on real exam content (unlikely since you aren’t allowed to take scratch paper out of the room and trust me, every sheet is accounted for), the CPA exam that you get is actually pulled from a test bank of thousands if not tens or hundreds of thousands of questions. So even if you illegally smuggle out exam content and hand it to a tattoo artist, the odds that you would get the same questions on an exam are slim to none. Sure there are likely repeats (as anyone who has taken an exam section two or – God forbid – three or more times can tell you) but not so many that getting an entire random exam tattooed on you would do you any good.
So, let’s just say somehow someone gets their hands on an exact exam and somehow someone else just so happens to get that same exact exam (after tattooing the answers on their forearm). Exam content, as many of you should already know, changes twice a year. So even if the first two somehow work out, the tattoo will be obsolete in 6 months. Then what? Scrawl FAS 141(r) underneath the other rules like a cover-up? Tacky!
Lastly, let’s all keep in mind here that this is the CPA exam, a professional licensure examination that tests not only your knowledge but your personal ethics and ability to protect the public interest. Times may be changing and the public may be OK with being served by a CPA with a visible butterfly tattooed on their ankle (or, we can only hope one day, a full sleeve tattoo) but there is no way you are protecting the public if you’re starting off your career looking for ways to cheat the system.
So is it allowed? Technically yes from what I can gather. Morally that’s a big fat hell no and I shouldn’t have to explain why. We look forward to an announcement from the AICPA that all candidate tattoos must be biometrically logged before admission to the exam is granted.
Have you, like many foreigners, been tripping about getting into the US to take the CPA exam, battling with strict post 9/11 Visa rules and other assorted red tape? Trip no more, the CPA exam is about to go international. This is huge because the exam is also about to get an international makeover (like IFRS testing in FAR and international audit standards in AUD) but that couldn’t at all be coincidentally related to this announcement from the AICPA:
The Uniform CPA Examination will be offered outside the 55 U.S. jurisdictions for the first time in its history in 2011. The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy and Prometric – the three organizations that jointly offer the CPA Examination in the United States – reached an agreement to administer the exam in international locations.
The CPA Examination next year will be offered in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates.
The international exam will be the same as the one offered in the U.S., using the same computerized format and administered in English. As in the U.S., the purpose of taking the examination will be to qualify for licensure as a CPA through U.S. state boards of accountancy.
Security has been one issue for the AICPA in deciding where to offer the CPA exam even though it will continue to administer the exam through Prometric. International testing will be subject to the same state board or jurisdiction rules that determine eligibility for CPA exam candidates since there is no Dubai Board of Accountancy. Just as now, potential international candidates will have to meet the requirements of whichever jurisdiction they choose to apply. Which I guess makes all the residency-requirement states out of the running to be a part of this epic new spin on the computerized CPA exam?
Some have mentioned on earlier bitch sessions about the AICPA that their motivation is a monetary one. Expanding membership, for example, brings in revenue. Increasing the passing CPA exam score (thereby causing more failures and, one would imagine, more subsequent $$$ retakes after) is another example though that’s just a rumor last I heard. So if one were inclined to postulate as to the motive behind this move and approach it skeptically, you might come to the conclusion that this could equal a pretty significant payday for the AICPA as well as NASBA, Prometric, ChoicePoint and all the CPA review courses who make a living off of this exam. I’m not against it.
I guess we will find out what significance the U.S. CPA exam still holds for the rest of the world. Even if we end up looking pretty bad when international candidates do way better on the AICPA’s new international exam content in 2011.
Following the awesomeness that was our “How Much Harder Is FAR Going To Be In 2011?” post, I figured it would be a good idea to go over each section to compare this year’s CPA exam with next year’s. Today you’re lucky to get a good BEC wrap up.
Written Communication – As stated last Friday, written communications are moving from FAR, AUD and REG to strictly BEC. This is good (and possibly easier) for most of you as writing can be a right-brained activity while the rest of the CPA exam mostly tests your left brain’s ability to process and digest information.
If I were taking the exam, I’d relish the opportunity to have three attempts at essays (since it might make up for my pathetic understanding of cash flows) but for many of you this is a weak area. That’s fine. In 2011 you’ll only have to try it once with three BEC-related WCs. You still do not have to get the answer correct but simply have to A) write like you have at least some sense of what a “business memo” contains B) not misspell any words (you get a spell-checker in 2011, no excuses) and C) stay on topic.
Easy. Currently you get two written communications in three different sections, while in 2011 you will get three written communications in one section.
No Simulations – Contrary to rumors I am still hearing for some unknown reason, BEC does not and will not contain simulations in 2011. It may not contain them for some time or the AICPA BoE could get creative and start testing them out in a few years, it’s hard to say but my understanding is that they are happy with written communication in BEC for now. Between you and me I imagine part of the motivation behind this is getting all of you off their backs about the fact that a multiple choice only exam section still takes the same amount of time to grade as more complicated sections like FAR, AUD and REG. But what do I know?
More Econ, Less IT – As for actual BEC content, IT will be more lightly tested while econ will carry more weight. Econ goes from 8-12% of questions to 16-20%. A new area, operations management, will make up 12 – 16% of questions you see. Business structure (partnerships etc) goes back to REG where it belongs and corporate governance takes its place with 16-20% of your questions coming from that area.
Narrowing Components – The new AICPA target weights have changed since last year. Before you were tested on five core components: communication, research, analysis, judgment and understanding. In 2011 (this is for all sections), you are tested on just three: knowledge and understanding, application of the body of knowledge and written communication. Knowledge and understanding make up the MCQ (80 – 90% of your score in 2011’s BEC exam) while written communication makes up the other 10 – 20%.
Will BEC be more focused than it has been since 2004? We wouldn’t put any money on that. It’s still the junk drawer of the CPA exam though it’s come quite a way since its debut with the computerized exam 6 years ago. As a person intimately acquainted with it, I feel it has a ways to go. But 2011 is an improvement and just like FAR probably easier for you guys in the long run.
Someone has to ask the question and as a matter of fact Sharon Gubinsky, one of our favorite Maryland CPAs, already has.
Before we get to Sharon’s enlightening comments, however, let’s examine the AICPA’s idea to expand membership to non-CPAs. As is, AICPA membership is limited to those who hold a current CPA certificate. Since the AICPA is a professional organization charged with protecting the protectors, you’d think it would be simple to decide who can and cannot join the organization.
Those of us affiliated with the industry but without CPA certificates are more than welcome to cheer from the sidelines but are rightfully barred from membership in an organization that oversees licensure and sets the overall tone for CPAs across the country. But