Going Concern

CPA Exam

Finding a CPA Review Course for a 50 Year-Old MBA

Adrienne Gonzalez
February 2, 2011

We’ve been through this particular problem before but since this question is sort of unique, we’ll bite. How does an O.G. coming back to accounting after 30 years prepare for the CPA exam?

Doug in Milwaukee asks:

I’m a 50-something MBA and have just completed the extra six (advanced) accounting courses needed to qualify to sit for the Wisconsin CPA exam. Since it’s been 30 years since I’ve taken the basic accounting courses, I’m feeling weak in the areas that may be most heavily stressed on the exam. I’m interested in one of the “higher-quality” reviews that you mentioned, that will give me all the information I need.

Can you recommend a CPA review course for me?

First of all, I have to disclaim for those who don’t know that I came to accounting through the CPA review industry so while I am wholly independent, it doesn’t matter as I may appear biased were I to actually recommend a review course. Perceived bias aside, it is always best for candidate to do their own research and instead of only listening to bitter writers who don’t actually have to take the exam themselves. But we’re sure Doug already knows that and would simply like a professional opinion to supplement his extensive research on the matter.

Besides, everyone is different. Some candidates do well with a self study program while others need the structure of a classroom-style review. So the first thing you should figure out is what you need and how much you are willing (or can afford) to pay for it.

Once you have that part figured out, hit the CPAnet forums and check out their entire section on study materials and review programs. Actual candidates who have used the various review programs are generally more than happy to leave extensive information regarding each program but remember – people are more likely to rant about a negative experience than they are to glow about a positive one. The CPA exam is a difficult process and, unfortunately, my professional experience has been that many candidates are happy to blame everyone (college professor, boss, CPA review course, Father Time, some jerk on Facebook, etc etc) but reluctant to accept their own shortcomings in the event of failure. So keep that in mind.

CPA review is a pretty small industry and there are really only three or four courses that are considered “top of the line” – the others are either supplements or CPA review products offered by companies that also do a variety of other programs.

If you are able to, get as many free resources as you can from your prospective CPA review provider before you actually hand over your credit card. Visit their classroom location or watch samples of their lectures online (if they are reputable, they’ll have these readily available on their website) and call them to ask what is covered in their courses.

Remember too that CPA review is a business and, since I used to be a part of it, I can tell you it’s more cut-throat than this sweet online media gig. At the end of the day, the company exists not to help you pass the exam but to make money (like all companies, duh). So keep your eyes peeled for too good to be true marketing tactics, suspicious blog posts that read like ad copy and always read the fine print.

Follow these few rules and I’m sure you’ll be able to figure out the review that’s right for you in no time. Good luck!

News

Sir David Tweedie Confirms Your Accounting Firm Mafia Suspicions

Caleb Newquist
February 2, 2011

As you probably remember, head knight of the double-entry accounting round table, Sir David Tweedie, is retiring in a few months to be replaced by this guy. Until then, however, the wily Scotsman will be running the show and he’s still pitching IFRS as if the life of the financial reporting universe depended on it. Just like Bob Herz, he’s in this thing until the very end.

CFO has a brief Q&A with SDT and despite the USA’s pussyfooting around the issue, he manages to rush to our defense at the suggestion of haters that the IASB should give us the “throw the bums out” treatment:

Some critics grumble that if the United States does not adopt IFRS, it should be ousted from the IASB and the board of trustees. What’s your opinion?

I get quite angry at some of the comments we get insisting that the United States be ousted. People say that America would have to come around because the U.S. share of global-market capitalization is falling all the time. The complaint is, “We’re not having [the United States] tell us what to do if they don’t use international standards.” I can understand that, and you can have international standards without the United States. But you can’t have global standards without the United States. So there is more work to be done on that issue.

So in other words, suck it world! You can keep your international standards. We’ve got a knighted Scotsman who even said you’ll make due without us. Call it whatever you like, just don’t call it “global” without us. Because you can’t spell “global” without “A”… which stands for…er….”America.” BASTARDS.

[BREATHE] Never mind that. The most interesting bit is that Tweeds appears to blow the lid of the Big 4 omertá:

What’s been your experience with professional judgment? Many U.S. practitioners say a heavy reliance on judgment won’t work in America’s litigious environment.

As a technical partner at KPMG, I was always being asked to evaluate situations that were outside of issued guidance. It’s the same in the United States — you get questions you’ve never thought about before, and there’s nothing in the standards addressing it. So you kick it around with the client, the client partners, and other senior partners in the firm. You come up with a position.

[My approach was to] ring up Deloitte, for example, and say, “Have you had one of these [situations]?” There is sort of a technical-partner mafia that gets together and says, “Yeah, we had one of these.” So, in a way, the profession fixes the problems.

So whether this is happening under the nose of the brass or with their full and unmitigated support can’t be determined, although we won’t be surprised if the old man ends up “retiring” early.

Tweedie Takes a Bow [CFO]

Accounting News Roundup: Something About a Winter Storm; The Future of Accounting; Big 4 Evolution| 02.02.11

Caleb Newquist
February 2, 2011

Huge winter storm slams U.S. Midwest, Northeast [Reuters]
The storm, touching some 30 states and a third of the U.S. population, stretched from New Mexico to Maine and included another blast of winter in New York City. Power was cut to hundreds of thousands of people. The morning commute in New York was disrupted by the weather, preventing some financial traders from getting to work. “Trains are running on weekend schedule and most traders can’t even get out of their homes,” said Thomas di Galoma, head of fixed-income rates trading at Guggenheim Securities in New York.

Weather Service Web site falters at critical time [Federal Eye/WaPo]
Seems about right.

Intuit 2020 Report Depicts Future of the Accounting Profession [BusinessWire]
Agility and flexibility will be paramount to the future of the accounting profession, as technology and demographic shifts transform the way people work and live, the report found. In 2020, accounting practitioners will not only have changed the way they work, but also the work that they do, as consumers and businesses turn to accounting and tax professionals for competitive strategies to navigate the global marketplace.

Probe into $400m SEC office leasing contracts [FT]
The US Securities and Exchange Commission signed leases for $400m of office space without circulating the contract for competitive bidding, as would normally be required. In internal papers filed to justify its decision, the SEC said the “unusual and compelling urgency” of its requirements for 900,000 sq ft of space “supports award of the lease without full and open competition”. The SEC issued the justification for the leases last summer, two weeks after Congress passed the Dodd-Frank financial reform act, which authorised lawmakers to double the agency’s budget by 2015.

SEC probes Computer Sciences on accounting issue [Reuters]
U.S. technology services provider Computer Sciences Corp (CSC.N) said the U.S. Securities and Exchange Commission had launched an informal civil investigation into some of its accounting adjustments. The investigation will look into previously disclosed accounting adjustments in CSC’s managed services sector (MSS), primarily in Europe’s Nordic region, the company said in a regulatory filing.

Evolution of the Accounting Model: What Would Darwin Say? [Re:Balance]
How does “survival of fittest” work in the Big 4?

News

Partner Shows Amazing Restraint After Former Colleague Calls Him a Thief and a Liar

Caleb Newquist
February 2, 2011

Sometimes when there is a dispute among partners of an accounting firm, things can get a little ugly. Sure there’s the sleeping with the other’s spouse/pool boy problems that crop up from time to time but that’s nothing compared to a situation when there’s actually a business reputation, financial considerations and possible federal criminal charges at stake.

Such is the case involving a former tax director at TCBA Watson Rice LLP with the firm’s managing partner. Patrick Largie tasked with preparing the firm’s 2009 tax return and when he got to the “Other Deductions” (line 20, for those of you scoring at home) he noticed a suspicious $1.8 million figure. After investigating further, he determined the amount was ‘inaccurate and false’ that could possibly bring “an IRS investigation and possible criminal charges.” As a result, he brought it to managing partner Bennie Hadnott’s attention. Hadnott didn’t feel it was anything worth raising a fuss over and demanded that Largie sign the return and go on his merry way.

Largie refused and was promptly fired. And yes, of course he sued. But Bennie Hadnott is treating the lawsuit much like he treated the $1.8 million Other Deductions – it’s NBD:

Hadnott labeled the claims “a nuisance lawsuit” and said the dispute was going into mediation on February 4.

“You get those filed all the time,” he said. “You can’t control what people go out there and do. We filed an answer to that, but there was no merit to it. He got mad because he was terminated with cause. People get emotional and go out there and try to sue the whole world, which he did. You have no control over people going out there and filing actions like that.”

So, despite his former colleague sullying the fine TCBA Watson Rice name and also accusing him of misappropriating $500k through bogus loans, Hadnott won’t have it, is taking the high road even though he could make Largie’s life difficult:

Hadnott hinted that Largie’s lawsuit came in retaliation after the firm learned of his actions and dismissed him, but he declined to elaborate on the firm’s claims. “I can really prosecute him for smearing our name, but we are just trying to be cool about it,” he said. “We don’t want to drag him through the mud.”

Other than the part where you make him look like a perfectionist, litigious, asshole crybaby, his name should be just fine.

Partner Sues Firm over Termination [AT]

Deloitte

Deloitte: Thanks to the Internet, Americans Are More or Less Obsessed with TV All the Time

Caleb Newquist
February 2, 2011

One big concern: once Charlie Sheen continues his epic run (does anyone believe that rehab is going to take?) will the masses be able to survive without Two and a Half Men? Personally, I’ll manage but what about all those American Families that depend on this show to complete that void in their lives every week?

In a media environment saturated with new and evolving online entertainment platforms, TV continues to be king. Released today, Deloitte’s fifth edition “State of the Media Democracy” survey reveals that 71 percent of Americans still rate watching TV on any device among their favorite media activities.

The survey results indicate that live viewing on a home TV system continues to be the most common method among individuals for watching their favorite programming, and supporting the notion that traditional television advertising continues to be a viable model. In addition, 86 percent of Americans stated that TV advertising still has the most impact on their buying decisions.

Deloitte’s State of the Media Democracy survey assesses media consumption preferences of nearly 2,000 consumers, ages 14 to 75 years old in the United States, revealing significant trends including the power of TV when supplemented by the Internet, a dramatic rise in smartphone adoption, the steady popularity of print magazines, and the emergence of cloud computing as a potential consumer entertainment storage and access solution.

And guess what? Not only are people watching more TV, they’re talking about it more. But not face-to-face: Americans can’t be bothered with leaving the confines of their homes or take their eyes off their computers long enough to manage human interaction and thanks to social media, they don’t have to!

Deloitte’s survey indicates that the Internet, mobile and social media channels are enhancing the overall television viewer experience, driving people to watch first-run programs and live events during their initial broadcast. The survey also reveals that nearly three-quarters of American consumers are multitasking while watching TV. According to the research, 42 percent are online, 29 percent are talking on cellphones or mobile devices, and 26 percent are sending instant messages or text messages.

Perhaps even more importantly, 61 percent of U.S. consumers now maintain a social networking site, where constant streams of updates and discussion forums have made delaying awareness of live TV outcomes a near impossibility.

“Consumers are not only watching television, they are talking about it, and those conversations are frequently taking place in real-time online and via IM/texting,” said Phil Asmundson, vice chairman and technology, media and telecommunications industry leader, Deloitte LLP. “By embracing the Internet as a platform that encourages audiences to participate in discussions about their favorite programs, television is maintaining its hold on the American public. People want to be part of the real-time conversation and they are embracing both platforms in a complementary fashion.

Because discussing the train wreck that is Sammi and Ronnie in real time is crucial to the human experience. Carry on.

Fraud

How Long Should an Accountant Wait to Start an Embezzlement Scheme After Landing a New Job?

Caleb Newquist
February 1, 2011

For Michelle Lynn Shelton, who is accused of taking $760k of her employer’s money, the answer is “NOT LONG!”

Detectives launched their investigation in December after another accountant, who was filling in while Shelton was away from work, discovered the apparent transfer of a large amount of money between two personal bank accounts, police said. Police said the company conducted an audit and contacted police. Shelton started working for the company in June 2007 and the evidence suggested she began diverting funds two months later, police said.

CPA Exam

What Should You Do the Night Before You Take the CPA Exam?

Adrienne Gonzalez
February 1, 2011

Looks like we’re back in the swing of CPA exam testing as you guys have been loading me up with great questions (thanks, it means Caleb doesn’t have to fire me this week) so let’s get right to it. Today’s question comes via Twitter and if you have one, email me or toss an @ my way and I’ll get to it.

@adrigonzo What is your rec for the night before an exam section. Study till you drop that last night or get some rest? #cpaexam

This is an excellent question because for many of you who are taking the CPA exam fresh out of school, you might be used to slacking off for weeks or months on end and making one last final push at the end of the semester to get through finals. While that may have worked in college (and can also work in life if you play your cards right), it’s important to keep in mind that the CPA exam doesn’t work the same way.

Your brain learns in layers and with the exam, it’s best to digest smaller pieces of information over a longer period of time than it is to try and cram it all in there in a few days. That’s why accelerated or otherwise last-minute CPA review programs aren’t a good idea; your brain needs the layers to dig into come exam day.

Think of it like making oatmeal cookies: you start with the basics; butter, sugar, eggs, flour and oatmeal. In an exam context (we’re using FAR because it’s easiest in this example), this would be the framework of financial accounting and any heavily tested areas like bonds, pensions and inventory. Once that’s mixed up, you add in your flair: raisins, chocolate chips, chopped nuts, whatever you like. Side note: I made white chocolate chip, craisin and pecan oatmeal cookies the other night and they were absolutely fantastic. Anyway, your flair would be the lighter-tested or unfamiliar areas like some of what’s covered in advanced accounting, inflation accounting, dollar-value LIFO, etc. You use a cup and a half of flour but only half a cup of chocolate chips and regardless of how much the recipe calls for, if you sit down and eat the entire bowl of dough in one night you’re going to get sick. Got it?

I always recommend bringing your note cards or textbook to Prometric with you so you can do a last-minute review in the car and it’s absolutely appropriate to do some studying the night before but don’t overdo it. Get to bed at a reasonable hour but try not to upset your routine too much – if you’re an night owl, there’s no reason to go to bed at 8pm unless you have scheduled your exam for first thing in the morning (what were you thinking?!). As we all know, accountants don’t deal well with change so the more you can make taking the exam feel like “normal”, the better you’ll feel on exam day.

Be sure to nourish your hard-working brain with the right foods, avoid alcohol (trust us, you can get absolutely obliterated when you actually pass, first one’s on us) and, if you smoke, try to stop (nicotine withdrawal can impair cognitive performance and you aren’t going to be able to take a break at the exam to go grab a smoke) or at least create an exam-day plan to get your fix (you might want to avoid gum at Prometric).

And remember: you may never actually feel “ready” to take the exam. Focus on preparing and remind yourself that you’ve done everything you can (hopefully…) to get to ready, even if you never actually feel that way.

News

Report: IRS Is Better at Junking Computers From Previous Decades

Caleb Newquist
February 1, 2011

It appears that the IRS prompted this report from the Treasury Inspector General of Tax Administration after a previous report stated that improvements were needed in the replacing the Service’s dinosaur technology.

Employees have to be pleased that can now obtain better equipment to do their jobs, although three years to determine how to point out an Apple II or an IBM running DOS does seem like a long time.

The Internal Revenue Service (IRS) has significantly improved its ability to identify and replace aging computers, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The IRS purchases new computers to replace aging equipment through its Sustaining Infrastructure Program. A November 2007 TIGTA report recommended several improvements to the IRS’s processes for replacing computer hardware that has reached or surpassed its useful life. TIGTA conducted the review at the IRS’s request.

TIGTA’s new report found that the IRS has implemented a process for identifying, reviewing, prioritizing, and making decisions on funding the replacement of aged computer hardware and is developing the capability to associate information technology problems with the aged hardware that caused the problem. The improved capability could result in as much as $12.3 million in cost savings and $16.4 million in revenue collection increases, according to the report.

“Taxpayers and IRS employees rely heavily on the information technology infrastructure to ensure satisfaction of tax liabilities, quick resolution of issues, and the security of confidential taxpayer information,” said J. Russell George, the Treasury Inspector General for Tax Administration. “The IRS is to be commended for these improvements,” he added.

Accounting News Roundup: State Tax Collections Are…Up?; BDO on the Hook for $91M in Florida Suit; GT Announces Regional Leader, OMPs | 02.01.11

Caleb Newquist
February 1, 2011

Taxes Boost State Coffers [WSJ]
State tax revenue grew at the fastest rate in nearly five years during the fourth quarter, as the steadily improving economy and higher taxes in some states propelled strong growth in income- and sales-tax collections. But most states still face budget cuts this year, as collections remain below pre-recession peaks and states are no longer able to fall back on stimulus funds from the federal government to fill budget gaps. State tax collections increased 6.9% in 41 states that have reported their revenue, according to a report to be released Tuesday by the Nelson A. Rockefeller Int at the State University of New York.

$91M awarded in Batchelor case [Miami Herald]
A Circuit Court jury in Miami decided on Monday that the accounting firm BDO Seidman should pay the late philanthropist/aviation pioneer George Batchelor’s estate and foundation $91 million for “fraudulently” concealing false information about a company in which Batchelor had invested. The award consists of $55 million in punitive and $36 million in compensatory damages. Steven Thomas of the Venice, Calif., firm Thomas, Alexander & Forrester, is lead Batchelor attorney. He said he thought that the punitive damage award was so hefty because “BDO, right up to the end, denied it had a public duty — and public is literally their middle name: CPA.”

NFL Commissioner and Union Chief Meet to Discuss Expiring Player Contract [Bloomberg]
The National Football League and its players’ union will meet the day before the Super Bowl, aiming to “intensify negotiations” on a new labor contract. The Feb. 5 bargaining session in the Dallas area is the first in a series of meetings scheduled for the next several weeks, the NFL and the NFL Players Association said yesterday in a joint statement. Also yesterday, the NFLPA said that CBS Corp. refused to air a commercial opposing a lockout by NFL owners. The ad was supposed to run on CBS College Sports Network’s coverage of a Feb. 5 college football all-star game that’s sponsored by the NFLPA.

Deloitte’s Troubles Bubble To Surface [RTA]
Francine McKenna gives Deloitte’s troubles a look.

FCIC Gives Accounting Standards a Free Pass (Along with Practically Everybody Else) [Accounting Onion]
The FCIC had a hard time assigning blame to anyone or anything.

Wayne Kaplan named Grant Thornton LLP Philadelphia Office Managing Partner; Rick Gebert to lead Southeast region [GT]
And Michael Bennett is the new OMP in Houston.

Corporate Tax Reform: Where’s the Beef? [TaxVox]
With only two years until the election, any kind of meaningful tax reform seems, dare we say, hopeless.

Jackson Hewitt Doesn’t Appreciate the Implication That They Suck at Preparing Tax Returns

Caleb Newquist
February 1, 2011

Call it the discount 1040 wars (or something):

Jackson Hewitt Tax Service Inc sued H&R Block Inc to stop a new advertising campaign that it said misleads customers about tax refund loans and disparages Jackson Hewitt’s competence.

How disparaging? How about “two-thirds of the tax returns are wrong” disparaging:

According to the complaint, H&R Block falsely claimed that its “Second Look Review” program, which reviews past tax returns prepared by rivals, found that two-thirds of prior returns prepared by Jackson Hewitt contained mistakes.

“H&R Block’s 2 out of 3 claim necessarily implies the false claim that two out of three Jackson Hewitt customers who are entitled to refunds have been short-changed due to Jackson Hewitt errors or incompetence,” the complaint said.

Jackson Hewitt sues H&R Block over ads [MSNBC]

CFOs

A ‘Controversial CFO’ Allegedly Called in Sick for Three Months to Get Married

Caleb Newquist
February 1, 2011

Is “bridezilla” appropriate here?

The controversial chief financial officer (CFO) of Nkomazi municipality in Mpumalanga, Sheila Mabaso, allegedly submitted a sick note laying her off for three months – only to hold her wedding during that period. Mabaso might be charged with dishonesty after the Mpumalanga municipality discovered that the sick note booking her off for September, October and November was “actually meant for her to prepare for the wedding”. Though Sowetan could not establish who Mabaso got married to, it can reveal that she got married to a pastor from the North West and that the wedding took place in Nelspruit on September 25 last year. Mabaso apparently flew to Malaysia for the honeymoon but allegedly told the municipality she was going to see a specialist doctor.

We’ve never known a CFO to be “controversial” to the point that it goes into print so we Googled “controversial CFO” and it came up with less than 100 items (although Erin Callan did sneak in there). Although, if you read further, one would discover that Ms Mabaso is nothing if not a little sassy:

[She] told Ziwaphi, a local fortnightly newspaper, that getting married while sick was none of anybody’s business. “It’s true that I was sick for three months and I have a doctor’s note to prove it. If I got married in that period, it’s none of their business. Who said a person can’t get married when they are sick?” Mabaso was quoted as saying.

Wanted: Hot Female Accountants to Provide ‘Lap Dances and Tax Returns’

Caleb Newquist
February 1, 2011

FYI if you’re looking for a little extra cash this busy season.

Sorry, auditors – don’t even try it.

$$ Hot Female Accountants Wanted $$ (Midtown) [CL]

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