Going Concern

CPA Exam

CPA Exam Candidate Is Worried About IFRS in AUD

Adrienne Gonzalez
May 20, 2011

The gmailmen have delivered the following reader question:

Hey Adrienne,

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

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

Thanks in advance for the advice!

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

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

Can you study from outdated AUD materials and still pass?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

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have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.

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

Good luck!

Legislation We Can All Get Behind: The BEER Act

Caleb Newquist
May 20, 2011

Tax assassin Grover Norquist and Americans for Tax Reform have thrown their support behind some important legislation that was introduced to mark American Craft Brew Week – The Brewer’s Employment and Excise Relief Act of 2011 or BEER Act.

While we’re certain that Grover & Co. regularly quaff craft brews, ATR’s support is also grounded in fiscal policy. Here’s Grover in his letter to Senators Mike Crapo (R-WY) and John Kerry (D-MA), the sponsors of the bill:

The BEER Act would reduce from $7 to $3.50 the tax paid per barrel on the first 60,000 barrels produced by small brewers. This is estimated to generate $19.9 million in capital for small beer producers, an enormous resource to promote job growth in the craft brewing industry.

Currently, brewers large and small pay the same tax on any production over 60,000 barrels. Set at an astounding $18-a-barrel tax, this represents a crushing weight on small brewers. This onerous tax penalizes production and disincentivizes industry growth, unnecessarily handicapping an industry that provides 100,000 jobs in the United States alone.

Your bill addresses this discrepancy by lowering the excise tax from $18 to $16 per barrel for production from 60,000 barrels up to 2 million barrels. This will provide an estimated $27.1 million for craft brewers to create jobs and spur economic growth.

Now, you don’t have to be a craft brew fan (like me) and you don’t have live in a state that produces many of these craft brews (like me) to get behind something as common sense as this. Unless, of course, all you drink is Bud Light™, which just means you’re a loser with no taste.

Cheers! ATR Supports the BEER Act [ATR]

Announcements

End of Busy Season Giveaway Winners

Caleb Newquist
May 20, 2011

After an exhaustive exercise of pulling names out of a hat, we’re happy to announce the winners of this year’s End of Busy Giveaway, so that you may direct your envy appropriately.

iPad2 – Lisa Ginn

Airline Giftcard – Misty Bowman

Best Buy Giftcard – Annie Flanagan, Rachel Clupper

There were also 20 winners of priceless GC swag but we’ve withheld their names to protect them from being taken hostage for the loot. If you’ve been declared a winner in error or otherwise have a beef with the results, you can email us but expect to be ignored with extreme prejudice.

Accounting News Roundup: Deloitte China’s Hiring Spree; Coburn to Newt: Shut It!; Handicapping Corporate Tax Reform | 05.20.11

Caleb Newquist
May 20, 2011

Deloitte Aims To Nearly Double China Staff By 2015 [Dow Jones]
Deloitte Touche Tohmatsu International plans to nearly double its China staff by 2015 to support its business expansion in one of the world’s fastest-growing markets, a senior executive said Friday. China is now Deloitte’s fourth-largest market in terms of employees, with more than 8,000 people in 14 cities across mainland China, Hong Kong and Macau.

China Unicom Uncovers Improper Accounting But Says No Impact On Results [Dow Jones]
China Unicom [,,,] Ltd. (CHU) said Friday a national audit conducted last year found improper accounting procedures at the telecom operator, but it has rectified the issues and doesn’t anticipate any material impact on its past earnings.

Secret Donors Multiply in U.S. Election Spending [Bloomberg]
Commission on Hope and four other Republican-leaning groups spent at least $4.05 million attacking candidates in the run-up to the November voting, according to Campaign Media estimates and TV station records obtained by Bloomberg News. None of that spending can be found searching the public database of the Federal Election Commission, and FEC spokeswoman Mary Brandenberger said the commission has no record of it.

Tax overhaul should begin with (second) home-related tax breaks [DMWT]
Gotta start somewhere.

Christine Lagarde Is Favored to Head IMF [Bloomberg]
French Finance Minister Christine Lagarde emerged as the leading contender to replace Dominique Strauss-Kahn at the International Monetary Fund as developing nations failed to unite behind a candidate. U.S. Treasury Secretary Timothy F. Geithner called for the quick appointment of a new managing director yesterday while the Obama administration avoided backing any one person.

Coburn: Newt Needs to “Keep His Mouth Shut” [ABC News]
Senator Tom Coburn says Gingrich needs “keep his mouth shut” about Paul Ryan’s Medicare plan until he has his own plan to deal with skyrocketing entitlement spending. “If you haven’t put a plan on the table, you need to keep your mouth shut because the problem hasn’t gone away,” Coburn told ABC news in an interview on the Capitol subway. “You’re elevating yourself by being critical of someone else.”

Is Corporate Tax Reform Realistic? [TaxVox]
A panel of veteran international tax experts tried to put the U.S. struggle to fix its corporate tax system in broader perspective. Unfortunately, they concluded that the U.S. is lagging well behind the rest of the world in corporate reform and, worse, the odds of any serious progress anytime soon are slim.

CFOs

If You Believe the AICPA, Hiring Is Looking Good

Adrienne Gonzalez
May 20, 2011

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

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

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

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

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

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

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

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

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

News

How Are Accountants Dealing with Their Co-workers Who Are Planning for the Rapture?

Caleb Newquist
May 19, 2011

Today in Brits worry about the strangest things news, an AccountingWEB UK reader has Rapture fever and wonders if anyone else still down here is going to call it quits come Monday.

The Rapture is upon us (according to a man in the US) so, as shown in the Simpsons, I will soon be ‘left below’, as will, I imagine, many of my fellow board users.

Anyone else have a sudden urge not to do any of their accounts/tax backlogs, given the world as we know it won’t exist on Monday?

For starters, there are plenty of men, women, children and family pets (not just “a man in the US”) that believe that the Son of God will be gracing us with his presence this Saturday and judging by what people are paying for one share of LinkedIn stock, the odds have narrowed that it’s going to happen. That said, I overheared the Big Guy himself say that Saturday ain’t the day. The question is, how do you handle the crazy accountants in your office that are planning for the Rapture? Do you:

A) Mock them openly first thing Monday morning.

B) Claim to know who the identity of the Antichrist (it’s me!).

C) Ask politely, that in the event that the person’s significant other happens to be left behind, if you can hit that.

D) Start digging through their drawers for supplies.

E) Convince them to wait it out in a JIT.

F) Your ideas.

Area Man Who Probably Cut Out His Own Tongue, Allegedly Murdered His Neighbor, Adds Tax Evasion to Dubious Behavior

Caleb Newquist
May 19, 2011

Great find by Joe Kristan who would have no problem jumping on the New York Post’s headline desk.

This could only happen in the South:

A murder suspect accused of cutting out his own tongue has been arrested for tax evasion.

The Mobile County District Attorney’s office says Michael Crocker and his wife, Donna, didn’t pay taxes on $1 million they earned from their waste burning plant in Mount Vernon.

[…]

Investigators learned about the tax evaision while investigating Crocker for the murder of Stephen O’Neal Perret. Perret was found shot to death in a work truck near his Citronelle home on August 17, 2007. Perret was Crocker’s neighbor and the plant manager at Vulcan Industrial Services, Crocker’s company.

One day after Perret’s funeral, Crocker called 911 and said someone cut out his tongue, but police believe Crocker cut out his own tongue.

Accused Tongue Cutter Arrested Again [WKRG via Tax Update Blog]

News

Tom Coburn: The Gang of Six’s Abysmal Failure Is Not The Gang of Six’s Fault

Caleb Newquist
May 19, 2011

I understand the disappointment, and real danger, associated with our impasse. The question, though, is not how we tried and failed but why the Senate has not even tried. Commissions and “gangs” form when members lose confidence in the institutions in which they serve. Working groups have their place — but they should support, not replace, the open work of the full Senate. The truth is that we already have a permanent standing debt commission. It’s called Congress. [WaPo]

KPMG

(UPDATE) Promotion Watch ’11: KPMG Managers-in-waiting

Caleb Newquist
May 19, 2011

From the mailbag:

The last few years KPMG announced manager promotions by this time, but I haven’t heard a peep from anyone so far. Have they changed the timing?

Digging through the archives, it’s true that around this time last year, chatter around the announcements of promotions at KPMG had begun but as our tipster said, so far it’s been strict Radio Station silence. Last year, details were rolling out through early June, so it could be that they’re dragging it out for effect.

Anyway, one rumor that we just heard is that in some KPMG offices, SAs up for manager are being asked to interview for their promotions. Personally, I’ve never heard of this but considering the need at SA, it would be a strategic way to hold some people back, chalking it up to “he/she didn’t interview well” versus the cryptic “he/she isn’t ready.”

If you’ve recently gotten word on promotions in your office, heard anything about these interviews or are simply in the know, email us the details and discuss below.

UPDATE:This just in:

PA leadership told us manager promotions would be approved on 5/20/11, with announcements in the following weeks after the approvals. haven’t heard anything about the ‘interviewing’ but i’m not up for Manager promotion so i guess i wouldn’t know.

Nice. Just in time for the end of the world.

UPDATE, May 26th, circa 12:35 pm:
According to a Klynveldian close to the situation in New York, “they seem to be making calls to those up for manager.”

Accounting News Roundup: PCAOB Sees Deal with China; Baby Debit?; Ponzi Booze | 05.19.11

Caleb Newquist
May 19, 2011

Strauss-Kahn Quits IMF, Kicking Off Succession Contest [Bloomberg]
Dominique Strauss-Kahn resigned as the 10th leader of the International Monetary Fund, kicking off a contest for his successor as Europeans seek to retain the job amid a lack of unity among emerging-market nations. “I want to devote all my strength, all my time, and all my energy to proving my innocence,” Strauss-Kahn said in a statement released by the Washington-based IMF four days after his arrest on sexual-assault charges. The fund said it will comment “in the near future” on the succession. Strauss-Kahn, 62, had beeFrance’s 2012 presidential election.

U.S. watchdog sees cross-border audit deal with China this year [Reuters]
James Doty, chairman of the PCAOB told Reuters, the breakthrough came during the U.S.-China Strategic and Economic Dialogue that took place in Washington last week. “Both sides have agreed to accelerate efforts, including undertaking a process for negotiations and engaging in technical assistance activities, to reach a bilateral agreement governing cross-border audit oversight,” Doty said in an emailed statement.

Beyond the Balance Sheet: Redefining the Role of Today’s CFO [CFO Journal]
The role of the CFO is not what it used to be. Traditional control, financing and compliance are still important aspects of the job. But in a hypercompetitive world, the best CFOs have a much broader set of skills, insights and experiences.

In defense of Gen – Y (aka the millennials) [CPA Success]
Tom Hood is here for you.

Baby Names for Accountants [The Summa]
After the “Baby Like” craze, Dave Albrecht has taken things a step further.

The Quandary of Coburn’s Exit [WSJ]
The remaining members of the Gang of Six met without Sen. Tom Coburn of Oklahoma and agreed to press on in their effort to craft a long-term pact that could include controversial proposals to raise revenues and curb Social Security. But the departure of Mr. Coburn, a conservative known as a deficit hawk, could prove a fatal blow to hopes that an ad hoc set of senators could crack the code of deficit-reduction politics and find a compromise that has escaped party leaders.

California Court Compels Overstock.com to Turn Over Contact Information of Former Employees to District Attorney Investigating Consumer Fraud [WCF]
You can practically see Sam Antar wringing his hands in glee (like a convicted criminal would do) over this.

G.O.P. Senators Question I.R.S. Scrutiny of Donors [NYT]
A group of Republican senators wrote to the head of the Internal Revenue Service on Wednesday seeking internal correspondence and other information about the agency’s heightened scrutiny of donations to some nonprofit advocacy groups that are playing a growing role in political campaigns.

McDonald’s Under Pressure to Fire Ronald [WSJ]
More than 550 health professionals and organizations have signed a letter to McDonald’s Corp. asking the maker of Happy Meals to stop marketing junk food to kids and retire Ronald McDonald. The letter, slated to run in the form of full-page ads in six metropolitan newspapers around the country on Wednesday, acknowledges that “the contributors to today’s (health) epidemic are manifold and a broad societal response is required. But marketing can no longer be ignored as a significant part of this massive problem.”

Madoff liquor cabinet sells for $41,500 [CNN]
Among other items, a bottle of “mysterious brown liquid” went for $950.

Will One Bad Performance Review Doom a PwC Intern’s Chances at a Fulltime Offer?

Daniel Braddock
May 19, 2011

Editor’s Note: Got a question for the career advice brain trust? Email us at advice@goingconcern.com.

I need some advice. I am doing an internship and all my performance evaluations have been good except one. I got one that said did not meet expectations. All the others were met or exceeded expectations. will the on bad pff prevent me from getting a job offer?

PwC Intern

Dear PwC intern,

Forget about your work ethic; your grammar and spelling should be enough for HR to deny you an offer.

Quick side note: I’m sure Caleb has touched on this before (if he hasn’t, he should), but emails are a representation of your professional image. Spelling/grammar mistakes are excusable when it’s an email to a fellow intern about the evening’s happy hour, but not when you are trying to represent yourself to the client, a partner, a manager, or in this case the GC community. My first piece of advice – proofread your $#!%.

Now, back to your original question. Considering the job market and how strapped for staff the firms will be in the next few years, you should be fine. Modern day internship programs at the Big 4 are a testing ground for both the firms and you, the student. Were you able to fumble through workpapers, create some binders, and generally not piss anyone off? Seems like you did, for the most part. For whatever reason (and considering that you didn’t provide one, I’ll assume the poor ranking was justified) you received a less than satisfactory review on one engagement. The positive reviews will counter this. Also, if you have a positive relationship with your recruiter, he/she will fight for you to receive an offer (after all, HR has their own goals to fulfill).

However, if you rubbed an important partner, manager, or recruiter the wrong way at any time, consider your goose cooked. All it takes is a short “I don’t want this person receiving an offer” email from a person of authority to erase your chances of receiving an offer.
Good luck. Cross your fingers and dot your i’s that you can rise above the poor review.

Is the SEC Actually Monitoring Social Media?

Adrienne Gonzalez
May 18, 2011

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

Remember this?

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

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

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

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

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

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

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

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

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

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

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

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