Tag: AICPA

An Underwhelming Majority of State Societies Want a New FASB For Private Companies

Thirty three state CPA societies have reached out to the Financial Accounting Foundation (FAF) or passed regulations urging it to create a new board to write differential financial reporting standards for private companies. Alabama, Arkansas, Colorado, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming all feel FASB’s current standards setting process does not adequately address the needs of the private company sector.


“In today’s business world it is extremely rare to get an overwhelming consensus supporting one idea. However, the responses from the state societies are another example of the CPA profession’s overwhelming support for an independent board to set differential standards for private businesses,” said Barry Melancon, American Institute of Certified Public Accountants (AICPA) president and CEO. “The message is clear; FAF must do this now or run the risk of missing our best opportunity to make GAAP relevant for private companies.” The thirty three states in agreement on this issue represent some 275,000 CPAs.

These state societies basically told FAF that GAAP has become too complex, and the cost associated with GAAP-based financial reporting has become too much of a pain in the assets for private companies, placing an unnecessary burden on these companies with little benefit to financial statement users as a result of this effort. Personally I think the states here are forgetting that the complexity of GAAP and its esoteric intricacies keep a lot of CPAs gainfully employed, as someone actually has to analyze, manipulate, audit and teach that crap. CPA review instructors need to sell FAR videos. Caleb and I need things to make fun of, like SEC Chief Accountant James Kroeker reminding a PACE University IFRS discussion that the P in GAAP stands for principles. Right. Like we forgot.

Anyway, nearly 3,000 letters have been sent to FAF from the private company constituency in support of this separate board for private company reporting standard setting. Maybe FASB has too much to do and too many clever interns to train. Maybe FASB has lost its public company influence and this is just the first step in the coup to overthrow it. I haven’t heard very many pushing for more FASs directly handed down from (mostly) European accounting standard setters but that’s an argument for a different day.

“The boards of more than half of the country’s state CPA societies, representing more than a quarter of a million CPAs, agree that a systemic problem exists,” stated Paul V. Stahlin, chairman of the AICPA. “After over 30 years of research by numerous diverse and independent groups, the only conclusion is that an autonomous standard-setting body under FAF to set differential standards for privately held companies must be created.”

Must be. There’s no way around that.

And for those interested, here’s a tl;dr PwC report tangentially related to private company accounting standards you can read. Perfect for a Friday.

AICPA Ballparking Future Releases of CPA Exam Scores

Over the past month, many of you anxiously anticipated the release of your CPA Exam score like Ralphie and his Red Ryder. The waiting part isn’t so unlike an eternity in hellfire and when NASBA finally does put the official Tweet, there’s no guarantee that your score will be included especially if you’re in one of those pesky non-NASBA states. It’s agony, really.

Because the AICPA feels your anguish (and frankly, they’re sick of the hysterics), they’ve announced a new score release timeline:

Starting in the fourth quarter of 2011 the U.S. CPA Exam will begin releasing scores earlier and more predictably. Initially this may not seem very interesting; however, the change will mark a major shift in the U.S. CPA Exam experience and the strategies that prospective CPAs employ as they work toward passing the exam.

The AICPA “initially” thought this wouldn’t be too interesting but when they took a microsecond to remember the post that Adrienne wrote a post back in March that garnered 162 comments, half of them bitching about this very topic and the other half accusing of AG of being a good-for-nothing shill for the AICPA/NASBA that’s never taken the exam, they realized that yeah, people would be interested to know when their scores are released.

ANYWAY, here’s the schedule:

Everyone can relax now. I’m sure scores will be out like clockwork going forward.

New Score Release Timeline for the CPA Exam [AICPA]

AICPA Practically Begging the Financial Accounting Foundation to Develop Private Company GAAP

Were you aware that over 2,500 letters have been sent to the Financial Accounting Foundation “demanding” the development of private company GAAP as well as a separate independent board to oversee the standards? If no, why not? If yes, why aren’t you feigning rage, issuing press releases with impatient statements by various bigwigs? If you’re the AICPA, that’s exactly what you’re doing:

For almost 40 years, the pleas of private companies to set standards for financial reporting that are more relevant too often have been ignored. The American Institute of Certified Public Accountants (AICPA) believes that it is time for the Financial Accounting Foundation (FAF) to listen to the constituents who have written to FAF demanding differential financial reporting standards for private companies and a separate independent board to oversee those standards. There are approximately 28 million privately held U.S. companies, accounting for more than 50 percent of our economy.

“Ninety nine percent of the letters from the privately held company constituency demanded that the Financial Accounting Foundation create differential standards for privately held companies,” said Barry Melancon, AICPA president and CEO. “We’ve studied this problem for far too long.”

Pick up the pace, FAF. People are getting antsy.

[via AICPA]

Is the AICPA Allowing Duplicate Questions to Slip into the CPA Exam?

According to one CPAnet forum user, they are. Here’s the note the candidate wrote to the AICPA:

I recently took FAR and noticed I got the same question more than once (exact same question and answer choices) in different testlets. The same instance happened in prior exams last quarter as well, more noticeably in the new content areas outlined in the CSO’s (i.e. duplicated IFRS questions/answers). According to other candidates who’ve taken the exam this year, they have been getting duplicate questions also, sometimes several duplicated questions. Are these duplicates graded and weighted equally, or is one thrown out since it’s a duplicate? It doesn’t seem fair if they are both graded and weighted if you get the question wrong, but could be great if you got them right (essentially getting a free pass on the repeated question since you knew the answer). If both are graded it could ‘jip’ the candidate out of a passing score if they were close to 75 because an alternate question wasn’t asked in place of the duplicate. I’d appreciate any guidance you can give me and perhaps post this situation in the FAQ area since I know multiple candidates have had the same anomaly during their exams.

And here is the AICPA’s response:

You stated that you received the same question more than once. Similar questions may be in the test; however, they are not identical. We have special coding and technology controls in place to ensure that questions are not repeated within a testlet. [Off topic bit about pretest questions that has nothing to do with this candidate’s issue removed]

The candidate went on to take issue with the AICPA’s use of “testlet,” insisting that repeat questions did not appear within the same testlet but within the same exam.

While the AICPA has agreed to look into this candidate’s issue, unfortunately there is no way for him (or her) to review his exam and confirm his suspicions. I’m assuming here that the candidate has not yet received his score for FAR, and even if he did, he would have two options: score and review appeal.

A score review is a waste of money that almost never results in a changed score, and involves an automated process that essentially confirms exam quality control procedures. Since the advent of the computerized exam in 2004, less than 1 percent of score reviews have changed a failing score in a candidate’s favor.

The second option, an appeal, could be completely useless or incredibly insightful, depending on how the candidate answered the questions he feels were duplicates. An appeal is a slightly more involved process but would allow the candidate to view the multiple choice test questions or objective simulation problems that he answered incorrectly together with his responses. Appeals are not available in all jurisdictions.

For all the time and effort the AICPA puts into administering the CPA exam, I’m going to guess that the candidate mistakenly believed very (read: VERY) similar questions to be exactly the same. Anyone studying for the exam knows that just one word can change a question completely.

AICPA Outlook Survey: This Double-Dip Recession Just May Be Happening

Just in time for President Obama’s jobs conversation to a joint session of Congress, the AICPA has released its latest quarterly economic outlook survey results. Long story short: sentiments aren’t high among financial professionals surveyed.


The outlook for the U.S. economy turned negative in the third quarter for the first time since 2009 as prospects for recovery waned and concerns about a second recession rose, according to the latest AICPA Economic Outlook Survey of Chief Financial Officers, Controllers and CPAs in executive and senior management accounting roles.

The CPA Outlook Index, a broad-based composite index that captures the expectations of CPA financial executives and management accountants, declined 8 points to 58 this quarter, down from 66 in the prior period. The survey, conducted in August, tallied 1,305 qualified responses from CPAs who hold leadership positions, such as chief financial officers or controllers in their companies.

“For the second consecutive quarter, the CPA Outlook Index declined as turbulence in the political and economic environment eroded the sense earlier this year that a recovery was taking hold,” said Carol Scott, AICPA vice president for business, industry and government. “A majority of our CPA members in executive financial roles now fear a second recession may be likely.”

The decline in the CPA Outlook Index was fueled by a sharp drop in sentiment about the U.S. economy.

A whopping 61 percent majority of respondents said they think it is “somewhat likely” or “very likely” the U.S. will fall into a double-dip recession. Only 9 percent of CPAs serving in executive positions expressed optimism about the U.S. economy in the third quarter, down 24 percentage points from 33 percent who were optimistic in the second quarter.

It is reasonable to point out here that though the CPA Outlook Index turned negative this quarter, it is still above the 4-year low of 32 in the first quarter of 2009.

U.S. economy optimism plummeted a whopping 28 points from 53 to 25. Of the major index components, none changed positively quarter-over-quarter for 2011.

While the outlook for respondents’ own organizations is not as rosy as it was earlier this year, it has not dropped as sharply as the outlook for the US economy. Optimists also still outnumber pessimists, with 41% of the CPA decision-makers indicating that they are optimistic about the outlook for their own organizations over the next 12 months, while only 21% are pessimistic. Expectation for expansion also dropped again this quarter but a majority of respondents (53%) still expect to expand at least somewhat in the next 12 months. This is down from 61% who expected expansion last quarter.

Executive summary of the survey results can be found here.

AICPA Accounting Competition Offers Cash Prizes to Top (Pretend) Fraud Fighters

Are you an accounting undergrad interested in forensic accounting and cold hard cash? If you are, you might be interested in the 2011 AICPA Accounting Competition, which asks college students to flex their fraud and forensic skills in advising a fictional client on a major overseas expansion. The top three teams will strut their stuff in Washington D.C. on the AICPA’s dime, and the one that does the best job keeping the project on track — and on the right side of the law — gets a very legal $10,000. Legal if you pay taxes on the prize money, of course.


The American Institute of Certified Public Accountants has launched its second annual case competition, challenging college students across the country to test their fraud and forensic accounting skills in a complex scenario that will earn the top performing team a $10,000 award.

The 2011 AICPA Accounting Competition, which unfolds in three stages, focuses on a fictional Texas company looking to expand its business into the Nigerian oil fields. The competition is open to undergraduate students at 2-year and 4-year degree institutions in all 50 states, the District of Columbia, Puerto Rico, Guam, American Samoa, the Northern Mariana Islands and the U.S. Virgin Islands. Because this contest is open to any 2 or 4 year accounting students, this would be a great opportunity for a few future fraud fighters from smaller, less prestigious accounting programs – so if any enthusiastic professors happen to see this, please pass it along.

“The competition is an opportunity for students to get a hands-on, real-life understanding of one of the fastest-growing interest areas in accounting: fraud and forensics,” said Jeannie Patton, AICPA vice president for students, academics and membership. “Those who participate will hone their teamwork and leadership skills, deepen their understanding of financial risks in international business strategy and potentially bring national attention to their college or university.”

Participants in the competition must work in teams of four students, two of whom must be accounting majors. One of the accounting majors must serve as team leader. First round submissions, which are due September 30, will be evaluated to determine a pool of 10 semifinalists. Those semifinalists will compete for three finalist spots, a chance to travel to Washington, D.C. for the final round and three cash awards: $10,000 for first place; $5,000 for second; and $2,500 for third.

Entrants will be expected to outline, in 750 words or less, double-spaced, the top three fraud risks for High Prairie Construction’s plan to expand into the Nigerian oil fields. Would this move increase the risk of fraud within the company? Are there factors within the company’s culture that leave it vulnerable to fraud? Is High Prairie exposed to risk under the FCPA and UK Bribery Act? All of these are considerations you’d make in your summary.

Teams may register and find complete details on the 2011 AICPA Accounting Competition section of the This Way to CPA website.

AICPA Announces Winner Of the Beta Alpha Psi Medal of Inspiration Award

For once, we have a heartwarming story of a person who set her mind to accomplishing a goal in spite of more than her fair share of adversity and challenge. This should shame all of you C students into at least pretending like you are grateful for what you have, at least until next semester.

Last week, the American Institute of Certified Public Accountants announced that Ms. Hefgine G. Fils-Aime, a spring 2011 graduate of the University of South Florida, has been awarded Beta Alpha Psi’s Medal of Inspiration Award. The award, sponsored by the AICPA, is bestowed upon a student who has experienced extreme hardships in his or her life and who has demonstrated an unusually high level of success dy. The award includes a $5,000 cash stipend, which Ms. Fils-Aime plans to use to help continue her education by pursuing a Master’s of Science degree in accountancy at Wake Forest University.

Ms. Fils-Aime’s story is one of overcoming persistent obstacles. In the mid-2000s, her parents sent Fils-Aime and her sister to Florida to live with relatives, fearful that their young daughters were in danger if they remained in Haiti. Then 14-year-old Fils-Amie, a native French and Creole speaker, had to learn English immediately and was enrolled as a junior in high school due to having skipped a grade in Haiti and the differences between the Haitian and American school systems. Fils-Aime graduated high school at age 16 and enrolled in the University of South Florida.

While the other 18 year-olds in the dorms were partying and trying to get her to take that route with them, she chose to remain focused on her education. As if that weren’t challenging enough, her biggest challenge arrived on Jan. 10, 2010, when Haiti was hit with a 7.0 earthquake. It would be days before she knew what happened to her parents and younger brother. Her mother did not survive the earthquake, buried in the rubble of their home when it collapsed. Port-au-Prince was so damaged that she could not fly in to attend her own mother’s funeral. Somehow during all this, she stuck to school and her extra-curricular activities, which included serving as student project support assistant at the Business Systems Reengineering Department, a candidate for Beta Alpha Psi and the Brothers Points coordinator for Alpha Kappa Psi. She attended PwC’s Florida Leadership Adventure in the summer of 2010.

“The winner of this year’s Beta Alpha Psi Medal of Inspiration Award, Hefgine G. Fils-Aime, is a shining example of a person who overcame extreme hardship, and a language barrier in a foreign country, to achieve success,” said Jeannie Patton, AICPA’s vice president of academic and career awareness. “Her dedication, motivation and courage to continue offers inspiration and hope to every one of us who has thought about quitting when the going got tough.”

Fils-Aime was presented the award on Friday at Beta Alpha Psi’s 2011 annual meeting in Denver.

“Hefgine Fils-Aime’s life story is an inspiring one for everyone who is part of Beta Alpha Psi,” said Mary Stone, president, Beta Alpha Psi. “For members, it is a story to remember when life seems overwhelming or unfair. For faculty advisors, forum members, and staff, it is a story to remember when confronted by the media stereotype that today’s students don’t work hard. For all of us, it is reminder that great challenges can be overcome with hard work, perseverance and good humor.”

Fils-Aime graduated with a bachelor’s degree in accounting with an overall GPA of 3.89 in May of 2011 and received a full-time offer from PwC. She was recognized on the College of Business’ top 25 under 25 and had been active in Beta Alpha Psi, Alpha Kappa Psi and Beta Gamma Sigma.

Current BAP students may vote for either themselves or another BAP student who they feel meets the criteria for this award, which is given out annually. There are two criteria whereby students can win. First, they may have experienced extreme hardships in their lives in pursuing their education, and demonstrated an unusually high level of success in spite of that adversity. Or, second, they may have done something particularly inspirational in the course of their young lives that had tremendous impact on someone else’s life. Either path is acceptable. Students are encouraged to participate in the program, not to bring honor or glory to themselves, but to inspire students to want to affect on the world around them in a positive way.

The CPA Exam Goes International Without a Hitch

The AICPA, NASBA and Prometric yesterday announced the successful launch of the U.S, CPA Examination in international locations – the first time in history it has been administered outside of the United States and its territories.

On August 1, the first candidates took the exam in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates. Throughout the remainder of the month, 1,165 candidates will sit for 2,065 examination sections. Future month-long testing windows will take place in November, February, May, and every third month thereafter.

The U.S. CPA exam is offered internationally as a service to foreign nationals in response to escalating international demand for U.S. CPA licensure. In 2010, more than 10,000 international candidates traveled to the U.S. to take the U.S. CPA exam, a 22 percent increase from 2009. Nearly one-third of international candidates came from Japan.

The international exam, offered in English, is the same as the U.S. exam administered by the AICPA, NASBA, and Prometric in the United States. Licensure requirements for international candidates are the same as for U.S. CPA candidates, meaning candidates must meet the qualifications of the jurisdiction in which they apply.. Along with passing the Uniform CPA Examination, international candidates must meet educational and experience requirements as mandated by U.S. state boards of accountancy.

In the United States, state boards have the governmental legal authority to award the U.S. CPA license. Applications may be made through certain U.S. state boards of accountancy offering eligibility for international candidates. A list of participating state boards and information about fees is posted on the NASBA website at www.nasba.org.

Testing in the new international locations is open to citizens and long-term residents of the countries in which the exam is being administered. In the Middle East, citizens of Egypt, Jordan, Oman, Qatar and Saudi Arabia may take the exam in one of the Middle East locations. U.S. citizens living abroad are eligible to test at any location.

NASBA and AICPA Launch New Site to Take the Guesswork Out of Mobility

Practice mobility has always been a big issue for CPAs, more so in these turbulent times when qualified individuals have to pack up and go a la Tom Joad just to find paying work in a reasonable market sometimes. So it makes sense that the AICPA and NASBA have jointly released a new online tool to help CPAs do what they do best from state to state.

Until all 55 jurisdictions can truly band together and agree on a uniform requirement across the board for all CPAs (never going to happen), this is the next best option.

Here’s the scoop:

The National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants today announced the launch of CPAmobility.org – an online tool designed to help Certified Public Accountants navigate the new practice privilege requirements that allow CPAs to more easily practice across state borders.

A joint project of the AICPA and NASBA, the new CPAmobility.org website provides helpful information, updated regularly, on state practice privilege requirements for CPAs, commonly referred to as “mobility” laws, for all 50 states and 5 U.S jurisdictions. In four simple clicks online, CPAs can learn whether their existing home state registration is mobile and allows them to work in other jurisdictions without additional notice, or whether further paperwork is required. In most cases, additional registration is no longer required because mobility statutes recognizing CPA licenses granted by other states and jurisdictions have been enacted in 47 of the 55 U.S. jurisdictions.

“CPAmobility.org is a valuable service that allows CPAs to take advantage of the benefits associated with state mobility laws with confidence. We are happy to offer a free tool that will assist CPAs in determining whether or not they can exercise mobility in a particular jurisdiction at the click of a button, on their laptop or mobile device,” said Ken L. Bishop, executive vice president and COO of NASBA.

“Mobility has become a reality for CPAs and accounting firms from coast-to-coast and it is now time to open the system for business,” said Barry Melancon, president and CEO of the AICPA. “We are very pleased to be able to offer this free service to CPA firms together with NASBA, which was a key partner in developing the technology and information to power the website, CPAmobility.org.”

The site works by posing three targeted questions to CPAs interested in exercising cross-border practice privileges. Those are:
Where is your principal place of business?
Where are you going to perform services (target state)?
What type of services will you perform?

Information on licensing and registration requirements is then produced allowing CPAs to move quickly to address new business opportunities. CPAmobility.org offers immediate access to the site through a mobile application, an attractive benefit for CPAs needing to confirm eligibility requirements while they are on the road or away from their offices.

NASBA and the AICPA have been longtime advocates of mobility, providing support and resources to state boards and state CPA societies seeking changes to current rules. As additional states continue to embrace mobility, the need to educate CPAs on the requirements is growing.

CPAmobility.org will feature useful links to NASBA and AICPA resources. To learn more about mobility or to research cross-border practice privilege requirements, visit www.CPAmobility.org.

At first glance, the new site features a slick interface (if you ignore the obnoxious Helvetica header) that asks you three simple questions: where do you practice normally, where do you plan to practice and what type of services will you perform? Once you answer those, it will tell you the rules for individuals and firms based on your responses.

Awesome!

AICPA Enthusiastically Offers the IRS Its Help Developing the Registered Tax Return Preparer Exam

Not unlike the overachiever that sits in the front row of class waving their outstretched hand like some ecstatic cruise ship passenger, the eager beavers at the AICPA have put the IRS on notice that they are willing and able to help out with the registered tax return preparers (“RTRPs”) exam.

As the national professional organization of certified public accountants comprised of approximately 370,000 members, the AICPA is well situated to provide input to the IRS on the technical issues related to developing and administering competency examinations. AICPA members provide services to individuals, not-for-profit organizations, and small and medium-sized businesses, as well as America’s largest businesses.

The AICPA offers to assist the IRS build on the Service’s already significant experience with the Special Enrollment Examination. Our own experience with the Uniform CPA examination has shown us that there are a number of critical steps in the test development process, including: (1) defining the material to be tested; (2) developing the test questions; (3) pre-testing or trying out test questions; (4) constructing and reviewing test forms which require that the final test be fair to all candidates regardless of which test form they take; (5) reviewing candidate comments on test questions; (6) protecting the security of the examination (including the examination questions and candidate data); and (7) conducting an annual review of the quality of the examination.

Despite the hint at a compliment (e.g. “Service’s already significant experience”), you can’t help but think that AICPA doesn’t quite trust the IRS to pull this off. What with the security issues, lack of warm bodies and beating terroristic threats off with a stick.

IRS Comp Examination

[via AT]

Survey: CPA Combined with CMA Will Put More Money in Your Pocket

This survey was done by the Institute of Management Accountants, so of course the AICPA would encourage you to wait for the CGMA to get a dual certification but if you just can’t wait, then the CMA should work fine.

IMA’s Annual Salary Survey explores salary trends of accounting and finance professionals and reveals that certain industries are faring better than others. Public accounting ranked first in terms of average salary, at $125,488, and second in average total compensation, at $153,395, both in 2010 and 2009. The survey was mailed to respondents last December, and the results have just been released this month.

“The CMAs in this year’s study make a little more than the CPAs,” said Dennis Whitney, senior vice president of certification at the Institute of Certified Management Accountants. “For the younger professionals, it’s a little more per year. The number does seem to go up as you get older, but generally it’s a couple of thousand dollars. But the thing that’s the most dramatic is that people with both the CPA and the CMA fare the best.”

For those with both certifications, the difference can be not only $27,000, but $35,700.

“Dual certification is definitely worthwhile,” said Whitney. “It broadens your competencies. You have not only the financial accounting and auditing skills, but also the financial planning, analysis, and control skills and decision-making, which are very important today.”

Certified Accountants Earn $27,000 More [AT]
Earlier:
The Path to CFO: Is the CMA Credential Just as Important as the CPA?