Tag: CPAs

The Role of a CPA in an IPO: Open Thread

Back with another edition of “Accounting Career Couch” a undergrad senior wants to hear about some experiences the working stiffs of accounting world have had with initial public offerings.

Need advice on your next career move? Want to educate some rubes without coming off like a total jerk? Looking for a way to broach your co-workers body odor problem while not making it too personal? Email us at advice@goingconcern.com and we’ll help you let everyone done gently.

Meanwhile, back on campus:

Hello Caleb,

I am an undergraduate senior, and I have a presenta Special Financial Reporting Topics course. My group chose “The Role of a CPA in an IPO”, and I was wondering if this topic has been discussed on your site before, if not, could you make a post so I can gather related information, issues, success/failure stories, and personal experiences in order to complement my research? It seems this topic does not get a lot of coverage, and I believe it would be interesting and beneficial to all your readers.


To our recollection, this is a topic that has not been discussed on GC, so our reader’s inquiry makes for a good jumping off point.

If you’re not familiar with initial public offerings, then you can get the wiki cliff notes here and the SEC’s own fast answers under “I.”

Form S-1 outlines (check out the gory details below) everything a company needs to submit in order to register its securities and there are plenty of ways a CPA can assist a smooth and pleasant experience. If you’re client has less than $25 million in revenues and isn’t registering more than $10 million in securities, Form SB-1 can be used in lieu of the big boy.

Generally, when a company files its S-1, the SEC usually has lots of questions about the financial statements and the accompanying information. The back and forth can be grueling and if your client isn’t organized or financially savvy the temptation to strangle someone and everyone can be high. But hey, if you manage to stick it out with them to the filing date, there’s usually a pretty good party and your client should be grateful for your service.

So at our reader’s request, anyone with recent (or not so recent) experience working on IPOs is invited to share their war stories – the good, the bad, etc.

S-1

Earning the Right to Say, “You can trust me. I’m your CPA.”

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight–everything you need to help you prosper and enjoy the accounting profession.

“That was strange,” I thought as I hung up the phone. I’d just spent the last thirty minutes on the phone with a client talking about, of all things, which B-school his daughter should attend and what major concentrations she should consider.

This didn’t fit my view of accounting as it did not involve auditing transactions or pushing numbers around on a spreadsheet. They didn’t teag in undergraduate school. Yet, some 25 years after receiving a diploma with a Bachelor of Science Degree in Accounting and some 22 years after earning the right to call myself a CPA, here I was being asked to advise a client on a very personal matter not even remotely related to accounting.

How did this happen? In a word – trust. Over the years, I had earned the trust of this client on enough accounting, financial, and tax related matters that he now trusted my advice on such matters as where his daughter should attend college. As I let that sink in, I was blown away by the realization that trust leads to influence.


Because CPAs usually are very active in their communities, they have a very well-developed network of contacts and referrals. And because CPA’s are trusted, when they refer a client to somebody in their referral network, more likely than not, that client will end up working with that referral.

A colleague of mine – also a CPA – related the story of sitting with a client who recently had sold his business and had in excess of $100 million to invest. The client had never seen this much cash and was unsure what to do. The CPA recommended the client talk to a wealth management specialist and the client agreed. After the wealth manager had explained his core values and approach to investing, the client turned to his CPA and asked for his thoughts. The CPA responded that he was a believer and that all his personal and retirement savings were invested with this wealth manager. The client turned to the wealth manager and said, “If it’s good enough for him (the CPA) then its good enough for me. How do I get started?”

Do you think that afternoon the wealth manager was really glad to have the CPA as a referral source? I’ll guarantee it. The endorsement from the CPA and the client’s trust of that endorsement not only gained the wealth manager a substantial client – it also greatly shortened what would normally be a very lengthy sales process.

Whenever I see a public opinion poll about most trusted professions, the CPA always is at or near the top. There are several reasons why CPAs are viewed so favorably. CPAs are viewed as having a great deal of competence, able to remain unbiased, able to constrain emotion from affecting decisions, and possess an aura of independence and fiduciary responsibility – meaning we generally treat our clients affairs as we would treat our own.

One area where sound, practical advice is indispensible is finance. Against this backdrop of favorable opinion and opportunity, when a CPA delivers a valuable financial service and honors his word, trust is developed in spades.

During August of this year I read an article written by a business owner about the relationship with his CPA. The owner wrote that his CPA is the benchmark he uses to measure all other consultants. He goes on to explain his CPA has three attributes he appreciates as a valuable resource. Those attributes are knowledge, experience, and what he terms the “we” factor. That is, his CPA considers himself part of the team.

When the CPA makes a recommendation, such as getting rid of non-performing assets, adjusting personal lifestyles, or finding another service provider for payroll, legal services, software, investment advice, leasing agents, business brokers, or banking relationships, this business owner is going to follow that advice. He has no reason not to follow it.

In many client relationships, the CPA is counted on to be a trusted business advisor, to be available when the entrepreneur needs advice, to be the quarterback of the team of professionals who help to guide the company. Through contacts with other professionals and other clients, the CPA can be an excellent source of information when a business is unsure of the path to follow or when it needs services it has not used previously.

When a client trusts his CPA enough to entrust decisions affecting his own children – such as where to go to college and what to major in or how to invest $100 million of new found wealth – how much more do you think that client is going to trust his CPA on decisions that affect normal day-to-day business operations?

For those of you reading this article who might be potential referral sources, the ones I trust most with my client’s are the ones who put the needs of others ahead of themselves. If I receive any indication that a service provider is the least bit self-serving, they are never going to see a client through my referral… and they might even receive a negative review if overly unworthy of trust.

In this regard, actions speak louder than words. Show me that you are worthy of my trust and my client’s trust through many small actions over time. Show me the consistency of your character and that you understand putting the needs of others first is the most certain way to experience personal success. Tell me the truth, not what you think I want to hear. The world is full of yes people. We need more people willing to say what they think. If you are truthful, authentic, and trustworthy in your dealings with others, then you probably are somebody I will feel comfortable referring to a client and there is a 95 percent probability you’ll gain a new client or customer.

With a few exceptions, the CPA profession has done a good job of caring for and nurturing public trust. As a result, when public surveys are done, CPAs are viewed at or near the top of all professions in terms of honesty and trustworthiness. This trust creates influence and that influence is powerful. As such, trust has to be a highly regarded and protected asset.

Our words carry weight. As professionals and trusted advisors our words carry substantial weight. Futures can be and are changed by the words we speak. We have the ability to elevate dreams and ideas – or crush them – with the power of our words. So we must choose them carefully and make sure the substance of our thoughts and words rise to the level of fiduciary care we are sworn to uphold.

Local CPA Ups Ante on Client Service

What have you done for your clients lately? Worked through the night to meet a big deadline? Great job. Attended a bar mitzvah? That’s nice. Saved them oodles of dough by navigating a tricky divorce? You’re a rock star.

But until you’re willing to part with a kidney (or better), you’re a basically a chump compared to Jeff Waters.


You see, Jeff likely does everything that most CPAs do – bend over backwards for idiot clients; helps them deal with nosy IRS agents; explains why an incompetent Congress is likely to bungle the estate tax and so on and so forth.

But when his clients, the Fitzgeralds, were in one day chit-chatting about 1099s, a more serious problem (failing kidney serious, not heart attack serious) came up:

The week before standing in Waters’ office, the Fitzgeralds were told a kidney was available for [their daughter] Kelly, but at the last minute, the transplant had to be cancelled because the kidney turned out to be damaged.

“I thought, any problem I have pales in comparison to something like that,” Waters remembers. “I told (Fitzgerald), ‘I can’t even imagine you’re here today doing taxes when something like that happens.'”

Fitzgerald told him, “Well, we just learned to never get our hopes up. We just need to find another B positive donor.”

“That’s when it clicked,” Waters said. “I knew from my LifeSource Donor Card that I was B positive.”

And you can take it from there. Of course Jeff gave his kidney away. All he had to do was put on a cape and re-re-convince some pushy medical staff, “Waters says medical staff repeatedly told him not to feel pressured to go through with the transplant,” and like we said, he went under the knife and made it happen.

We realize not everyone is jumping at the opportunity for voluntary surgery and some are bound by religious whathaveyous but just think about it. Do you really need two kidneys?

Wheaton Accountant Does Taxes, Donates Kidney for Client [Wheaton Patch]

Small Business Legislation Could Be a Boon for Small CPA Firms

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight–everything you need to help you prosper and enjoy the accounting profession.

Included in the Small Business Jobs and Credit Act of 2010 – passed by the House of Representatives September 23 and the Senate September 16 – is the creation of a $30 billion lending fund that will utilize healthy cconduit to increase lending to small businesses – a provision that will generate $1 billion for the treasury, according to officials.

The fund also will provide $1.5 billion in grants to support at least $15 billion in new small-business lending through already successful state-run programs.

Among the $12 billion in tax breaks are a 100-percent exclusion of capital-gains tax on small-business investments made in 2010 and an increase in the maximum deduction for start-up expenditures in 2010 and 2011 – from $5,000 to $10,000.


“Naturally, any change in tax law stimulates our business in that we must provide the analysis of the bill and relay that information to our clients who may be affected,” Perry C. Barnett, CPA, partner responsible for business services for Gainesville, GA-based Rushton & Co. LLC, told AccountingWEB.

Douglas C. Smith, CPA, CVA, a partner with Lawrenceville, NJ-based Bartolomei Pucciarelli LLC, told AccountingWEB that he anticipates a significant increase in tax planning this year due to the provisions outlined in the bill, as well as modest improvement in the business of many of the firm’s clients.

“Almost any new tax legislation is a benefit to our firm, but fortunately, many of the provisions of the bill will benefit our clients, as well,” he added. “Since we are advocates of advanced planning, this bill provides us with the opportunity to make our clients aware of the upcoming changes and perform tax-planning engagements to guide them in implementation.”

While he does not see any significant changes in the firm’s accounting or auditing services as a result of the new legislation, Smith stated there will be consideration of additional accruals of penalties assessed on timely filing of information returns, as well as some impact on deferred taxes as it relates to the accelerated bonus depreciation provision.

The bonus depreciation provision is the most expensive tax break in the bill, weighing in at $5.4 billion over 10 years, but carrying an initial cost of $38 billion in its first two years, according to an analysis conducted by CCH Inc., a Wolters Kluwer business based in Riverwoods, IL, that provides tax, accounting, and auditing software and services.

The bill extends – through December 31, 2010 – 50-percent first-year bonus depreciation that had expired at the end of 2009. The extension is retroactive to January 1, 2010. The bill also extends through 2011 bonus depreciation allowed for property with a recovery period of 10 years or longer, such as personal property used to transport people or other property.

Small businesses will be allowed to write off up to $500,000 in capital expenditures in tax years 2010 and 2011. Under current law, the maximum deduction for tax years beginning in 2010 is $250,000.

Two other provisions in the bill that Smith believes will benefit his firm’s clients are: self-employed taxpayers will be allowed to deduct health-care costs for payroll tax purposes on 2010 returns, and participants in 401(k), 403(b), and 457 governmental plans will be permitted to roll over pretax account balances into a Roth account.

If an amount is rolled over in 2010, the amount is included ratably in income over a two-year period beginning with tax year 2011, according to the CCH analysis. The legislation also allows participants in state and governmental 457 plans to contribute deferred amounts to designated Roth accounts, effective for tax years beginning after 2010.

“Whenever we as CPAs are presented with the opportunity to educate our clients, it is a good thing,” Smith said. “There are many planning opportunities contained in the bill – ranging from the timing of a sale of small business stock, to planning the acquisitions of new equipment to take advantage of the expanded depreciation provisions, to planning the start of a new business that takes advantage of increased deductions for start-up expenses.

“Additionally, with benefits such as the deduction for health insurance when calculating self-employment income, out clients should be able to put a little extra money in their pockets, too,” Smith added.

Barnett agreed that the start-up expenses and the self-employed health insurance changes will benefit his firm’s clients, as well. However, he added that the continual increase in reporting requirements, especially the new requirement for filing Form 1099 scheduled to begin for 2011, could burden some small businesses.

“Based on this law and those in the works, each client will have to maintain a huge database of all vendor payments,” Barnett said. “We see this as a giant logjam for both the business and the IRS.

“The greatest impediment to business moving forward is being confident of what the tax laws are going to be in the future,” he continued. “Until Congress realizes that their indecision in estate taxes and personal income taxes is one of the greatest concerns of everyone, they will not get the economy on track.”

The House approved the bill in a 237-187 vote, while the Senate passed the bill by a 61-38 margin after Republican senators George LeMieux of Florida and George Voinovich of Ohio crossed party lines to support the legislation.

“This is about helping small business owners grow their operations, hire more workers, and help improve our economy,” LeMieux said in a statement. “Small business is the backbone of our economy, creating two out of every three jobs in our country. They need tax relief; they need access to capital. This bill will help achieve those goals and will not raise taxes or add to the national debt.”

The Path to CFO: Is the CMA Credential Just as Important as the CPA?

Many of you soldiering in public accounting have aspirations of one day achieving the pinnacle of many a numbers junkie’s career – Chief Financial Officer. You may think that becoming a CFO will mean hobnobbing with other C-suiters, first-class flights and access to exclusive swing joints but in all likelihood, it will consist of long hours, political maneuvering and maybe burning a few bridges.

While there are many paths to ascending to such a heralded position, one has to wonder if the skill set obtained in public accounting will really prepare you for all the demands and headaches that will inevitably come with a CFO position.

Because so many accounting grads get their start in public accounting, one ofobtaining the CPA credential. There’s no question that obtaining your CPA is a must for anyone that intends on spending a significant portion of their career in public accounting and little debate about the advantage of having those three letters on your résumé when you start looking outside public.

Tthe timing of that move may determine what kind of path you have ahead of you in order to land that coveted CFO gig. If you manage to stick out life in public until partner or in some cases the director or senior manager level the path is more clear. You may jump right into it immediately or you assume a position that reports to the current CFO and be groomed to assume the big chair at the appropriate time.

But what if you’re just starting your career and you’re fed up with public already? Or what if you’ve gotten laid off and you took a job in private. Are your dreams crushed at this point? What’s a wannabe CFO to do?

Speaking with John Kogan, CEO of Proformative, an online resource for finance, accounting and treasury professionals, obtaining the Certified Management Accountant credential is something that often gets overlooked.


“It’s the Rodney Dangerfield of finance certifications,” John told GC, “it doesn’t get enough respect.” The argument for today’s CFOs to have a CPA are being made and statistics have shown that more and more CFOs are, in fact, CPAs. The most recent data we can find shows that in 2009, 45% of Fortune 1000 CFOs were CPAs, up from 29% in 2003.

However, the viewpoint of “Warren Miller” in the comments of Francine McKenna’s guest post at FEI Blog on the subject, is that accountants usually make terrible CFOs:

[A]ccountants tend to make lousy CFOs because (a) they see everything as an accounting problem, (b) their ignorance of finance AND of human nature (where incentives are concerned) can be breathtaking, (c) they look backwards, and (d) they are conflict-avoiders. If accountants wanted to deal with the ambiguity of the future, they’d have never become bean-counters.

In addition, most accountants LOVE “rules.” They avoid conflict by hiding behind rules. They are go-along/get-along people. I’m fond of saying this: “If accountants had been running our country in 1776, we’d still be working for the King.”

So if the gamut of accountants are ignorant about finance matters, does the CMA provide a bridge to closing that knowledge gap? John Kogan thinks so, “The CMA designation wants to be the ‘CPA’ for finance professionals,” he said, “but it’s so far from being that.”

When you look at the two sections of the CMA exam on the Institute of Management Accountant’s website, you certainly get the impression that the CMA could be the “CPA for finance professionals” based on the curriculum:

PART I – Financial Planning, Performance and Control
• Planning, budgeting, and forecasting
• Performance management
• Cost management
• Internal controls
• Professional ethics

PART II – Financial Decision Making
• Financial statement analysis
• Corporate finance
• Decision analysis and risk management
• Investment decisions
• Professional ethics

So why isn’t the CMA a more coveted credential? John Kogan claims it’s due to poor marketing on the IMA’s part, “The CMA [credential] has similar requirements, not identical but similar, and they don’t enjoy the reputation of the CPA,” John said. “The CMA is getting its butt kicked because it doesn’t market itself well.”

You can easily make the argument that the AICPA has the distinct advantage of partnering with the Big 4 – firms that’s primary purpose is to serve as CPAs – on marketing and promotional efforts while the IMA has no apparent equivalent.

That being said, our recent conversation with IMA Chair Sandra Richtermeyer shed some light on the careers that are available for accountants moving into a financial role that the CMA designation complements well. She was of the notion that the CMA is simply not about cost accounting and John Kogan agrees, “I think anyone who knows anything about [the CMA] knows that the [designation] is broader than that, it’s just that very few people know what the heck it’s about,” he said. “Without a doubt, the skills that the IMA are teaching and certifying are corporate finance skills.”

If you consider yourself to be on the path to CFO Rockstar, maybe you have the CPA locked up but what’s next? Having the CPA credential may make you an attractive candidate on paper but it’s won’t guarantee success with the wide range of knowledge that CFOs need. So, while it may not hold a candle to the CPA in terms of prestige, the skills and knowledge that fall under the CMA are essential for any successful CFO.

C-Suite CPAs Remaining Pessimistic on the Economy

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

Following up from our brief mention yesterday, senior level CPAs have turned much more pessimistic about the economy. And somewhat surprisingly, they are partly concerned about deflation.

Just 21 percent of CPAs serving as C-suite executives said they are optimistic about the US economy, way down from 40 percent who were optimistic in May and the lowest level since April 2009, according to the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School’s latest Quarterly Economic Outlook Survey. What’s more, pessimists outnumbered optimists by a two-to-one margin.

Even more worrisome, 78 percent believe US business conditions will not return to pre-recession levels until 2012 or later.

This sentiment seems to parallel a number of recent economic and corporate reports.


Altogether, 40 percent were pessimistic about the economy, up from 25 percent in the last quarter.

“Our survey signals the nascent economic recovery that buoyed expectations last quarter is stalling,” said AICPA Vice President for Business, Industry and Government Carol Scott, in a press release accompanying the survey’s findings.

What are these numbers crunchers worried about? Unemployment and a tight credit market, to name two.

The survey found that CPAs are much less concerned about inflation these days. This is not surprising, given the economy’s lackluster pace, the high unemployment rate and the inability of companies to raise prices.

Interestingly, 20 percent are now concerned their organizations will be impacted by deflation in the next six months.

This is further proof that deflationary fears are not just coming from a fringe group of radical thinkers, but are now entering the mainstream.

One silver lining from the survey: Nearly one-quarter of the survey participants are upbeat about the prospects for their own organizations. Still 55 percent of survey respondents do not anticipate their organizations’ employment levels returning to pre-recession levels in the next year, compared with seven percent who anticipate staffing levels returning to normal in the next year.

(UPDATE) CPA Status and Promotions: What Is Your Firm’s Policy?

With all the news on raises, promotions etc. etc., a reader got in touch, asking the following:

Can we start a thread to discuss when you need the CPA designation if you want to move up at various firms by practice (audit, tax, specialty groups, etc.) and what exceptions there are?


The idea jumped off of a recent comment on yesterday’s post discussing E&Y’s raises keeping pace with PwC:

From what I can derive, PwC was bleeding staff in the early part of the year to the best of my knowledge, requires more time to get promoted up the ranks (3 years to senior compared to 2 at all other firms) and the requirements are higher (must have passed the CPA exam). The higher raises, at least from PwC’s perspective, may be their way of staying competitive with the market because, without higher pay, PwC is not competitive. E&Y may also be attempting to compensate but I am not entirely sure what for.

So three years to earn a promotion to SA at PwC isn’t news to us and some – dare we say, many – may argue that should be the standard timeline for associates in the Big 4/second tier firms. You can debate that all you want but what about the CPA requirement? If PwC does in fact require their associates to have their license before making SA, that’s nothing if not a motivation to finish the CPA ASAP. At the same time, there are many SAs that don’t have their license that do excellent work but for whatever reason are still stalling on obtaining the CPA.

The reader continues by asking:

For instance, if you have an Enrolled Agent, can you still make manager if you’re in tax, etc. [?] I’m also curious about any place that will demote anyone of a certain level who hasn’t gotten their CPA in the last couple of years. KPMG has threatened it for managers in tax who are qualified to sit for the exam (U.S. accounting degree with enough hours), but I wonder if that’s more empty talk.

That’s the first we’ve heard of a demotion for not having a CPA but frankly, that seems appropriate. If the manager has an EA, then perhaps that’s a suitable exception, although the idea of a Big 4 tax manager without a CPA just doesn’t seem right. For many, the lack of the those three precious letters means the end of their careers at the Big 4, so it’s definitely an issue.

So indulge our reader and let us know your firm’s policy regarding promotions and CPA license status. Does it matter? Are there exceptions? Should your performance make up for your uncanny ability to fail FAR? Talk it out.

UPDATE: We obtained a copy of the KPMG policy mentioned above and it appears to be FSF with a few exceptions for those that are “CPA Eligible” and certain “waivers.” Also there’s this, “In circumstances of noncompliance without appropriate waiver, professionals may be subject to disciplinary action, including but not limited to demotion or termination from the firm.”

KPMG Tax Promotion Policy

So You’re a CPA Thinking About Law School

We try to encourage you to think about your careers here at GC every once in awhile; present you with some options or ideas that maybe you haven’t considered before. We’ve covered several credentials out there that you can obtain and we’ve also touched on the pros and cons of the PhD.

But this time we’re going to get really crazy and give you the lowdown on an idea that we know many of you have had (including your humble editor) and that is the consideration of going to – gasp – law school.

For whatever insane reason, you can’t shake the idea of committing three years of your life and borrowing tens of thousands of dollars to live on PB&J, ramen noodles and frozen pizzas. Oh and of course there’s studying, tests and everything else that comes with returning to school.

But think about the benefits; you’ve got the CPA and if you were to get the JD, maybe you’ll top it off with an LLM and it’ll be smartest thing you’ve ever done. Think about the money! The prestige! The hot lawyers that you will bed and wed! It will all be worth it, right?


Well, maybe? If you spend even a little bit of time reading our sister site Above the Law, you might get the impression that the last thing you should ever do is go to law school. There’s an ncertain job market out there. You may end up with a huge debt load that can take a lifetime to pay back. And we’ve been told by a fair amount of our lawyers simply, “It’s just not worth it.”

Considering all that, we wanted to get some first-hand perspective, so we put the feelers out to a few CPAs turned lawyers to get an idea of their experience so those of you considering law school can make a more informed decision.

We spoke to three CPAs turned attorneys, Eric Gullotta who has his own practice in Sonoma, CA, Steve Farrar of Smith Moore Leatherwood in Greenville, SC and Timothy Gagnon who has in own practice in Needham, MA.

Messrs Gullotta and Gagnon both specialize in estate planning and taxation while Mr Farrar is a litigator who defends lawyers and accountants in malpractice lawsuits.

The three men agreed that their decision to go back to law school was worth it but that the process is certainly a challenge, “It was a tough three years. Probably the hardest thing is getting re-oriented with being a student after being out for awhile,” Mr Gagnon said.

Motivation and Benefits
Gullotta and Gagnon both believe that the biggest benefit that they’ve enjoyed by obtaining the law degree is that clients recognize the value that a background of a CPA can add to providing legal services. “The amount of respect and trust that clients put in you when you are both a lawyer and a CPA is really unbelievable,” Mr Gullotta told GC. “Being able to see the tax effects of legal transactions is really amazing and you can really bring value to your clients when you are able to negotiate or structure deals with tax effects in mind.”

Steve Farrar had a very different thought process before he returned to school. He went back because he was interested in being a trial lawyer, “I went back to law school with the intent to try cases,” he told us. While he was interviewing, most firms wanted him to consider working in a more transactional capacity but he found a firm that was willing to let him work in litigation and it turned out to be a perfect fit, “I’ve been ecstatic. While you might hear stories about people being burned out, I enjoy every minute of it.” And the biggest benefit for him? “This is going to sound hokie when I say it but I enjoy the theatrical chess match of going to trial.”

Back to School
But before getting to all the benefits of CPA/lawyer superstardom, there is the little matter of going to law school. While many lawyers we’ve talked to have said that the law school you attend is everything, it really depends on what you’re looking to accomplish with the degree. As Eric Gullotta told us, “it’s important to know what you what to do. If you want to work in [a large city], you’ll have to go to a reputable law school. If you want to practice locally, hang the shingle out, then you can go to slightly less prestigious school that is more practical for your situation.”

And being a CPA could possibly put you at an advantage when applying to law schools, “The interesting thing is that because you have experience and have a CPA, it can help you get into some of the better law schools,” Tim Gagnon said. “They’re looking to diversify their class, age, experience and you could bring something that diversifies the class that they can’t get out of somebody that just got out of undergrad.”

Drawbacks
But there’s got to be drawbacks right? Besides all the lawyer jokes, Steve Farrar mentioned losing flexibility in his schedule, “The best way I can explain it is that I have multiple busy seasons but I never know when they’re coming.” For Tim Gagnon, it sheer volume of continuing to keep up-to-date on the changing rules, “It’s hard enough to keep up on one but you put the two together and you really have a lot of information to cover.”

Oh, and then there’s the practical (and possibly more important) stuff, “Higher malpractice insurance,” according to Eric Gullotta.

So, are your aspirations for law school a good idea? Hard to say. Knowing what you want to do with the degree seems to be the key to making a decision. If you are thinking that a law degree will be the solution to your self-perceived lackluster career to date, you could find yourself very disappointed.

However, if this is a career that you truly want then it sounds like there isn’t any shortage of success stories. Choose wisely.

AICPA: CFOs Want More Input from Auditors on IT Matters

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

Certified Public Accountants are increasingly being asked to solve information technology problems for clients and prospective clients, according to a survey by the American Institute of Certified Public Accountants.

But that raises a potential conflict of interest of the sort that led the Securities and Exchange Commission to keep auditing and IT consulting separate. The pressure for auditors to help provide IT solutions will persist nonetheless, says the AICPA.


“The tide has really turned this year with the economy and increasing regulations,” said Joel Lanz, co-chair of the AICPA’s Technology Initiatives task force in a prepared statement.

“As small and medium-sized companies increasingly place IT under their chief financial officers, it’s becoming much more of a broad scope of responsibility,” added Ron Box, Lanz’s co-chair.

With a renewed focus on IT-related issues, the survey makes clear that CPAs need to be literate about information technology in order to collaborate effectively with clients and their IT partners.

Data security clearly is driving the new interest, and CPAs believe the issue will persist in importance for years, the survey suggests.

The biggest surprise from the survey, Lanz told CFOZone, is the fact that “CPAs are not only providing guidance on financial issues, but there is an expectation by audit committees that CPAs could advise on different IT governance issues. CPAs are now commenting to audit committees about business operations in addition to pure financial issues.”

It’s not that CPAs are expected to be the technology expert, but the expectation is that the CPA is able to provide business insight and IT guidance which then enables their clients to effectively leverage their technology to enhance the businesses value, he added.

Is this simply recreating the problem that led to the separation post-Enron and WorldCom of audit services from consulting, much of which was IT oriented? There’s the potential for a conflict of interest here, and a slippery slope toward bad audits as result. SEC rules specifically say audit firms cannot provide IT consulting services on matters that relate to financial reporting for the same client. And the audit committee must sign off on other types of consulting services.

Lanz concedes that CPAs will have to be careful. “It is a fine line,” said Janis Parthun, senior technical manager – IT, for AICPA, but she added that CPAs can help companies avoid problem here. “Sometimes audit committees do need some education in these areas and this is where they can reach out to CPAs that have some understanding of IT to give the audit committee options to make the right decision.”

Lanz adds says that the AICPA has helped on this front with some recent guidelines. “Recent standards provide CPAs with specific criteria for when they need to communicate with audit committees, as well as the type of communication required,” he said.

A spokesman for the Securities and Exchange Commission declined to comment on the trend.

Small Businesses Need Accounting Help + Accountants Want Opportunities = This Should Be Easy

With all the uncertainty out there, more and more small businesses are cropping up. As anyone who has started their own business knows, there are plenty of decisions to be made, including your accounting method. While that answer may come easy, at some point small business owners have to ask themselves honestly A) Do I know squat about accounting? B) If no, do I hire someone full time or do I contract the work out as needed?


First, if you’re not versed in accounting and taxes are you really going to take the time to learn everything you need to know at the behest of growing and refining your business? Have you seen the tax code? You want to take advantage of everything you can, right? Best to call an expert.

Secondly, if you do decide to get some help, are you willing to pay for someone to keep the books, file tax forms, manage the payroll, etc. etc. full time? Are you going to pay them a salary, benefits, supplement their daycare, give them vacation? If you’ve got the resources to bring someone on, that’s great, start interviewing people. But what if you’re still in the early stages? Finding a CPA firm that can provide those crucial services for you can save a lot of headaches.

On the other hand, if you are already an accountant, maybe this growth in small businesses is your opportunity to get a little entrepreneurial yourself. CPA firms are the most profitable small businesses out there and somebody has to help those business owners keep their debits, credits and tax forms straight; it might as well be you.