A Joint Effort to Fight Corporate Fraud
CPAs stand as a solid line of defense in thwarting basic accounting fraud.
by Rick Telberg
for the Journal of Accountancy
EXECUTIVE SUMMARY:
-- IN THE BATTLE AGAINST CORPORATE FRAUD, the FBI's top financial crime investigators have taken their case to the CPA profession, seeking expanded cooperation between accountants and law enforcement officers.
-- THE AICPA AND THE FBI RESPONDED with a joint effort that was kicked off with a webcast featuring three FBI white-collar crime-fighter chiefs. Some 20,000 accountants watched nationwide.
-- THE PROJECT IS EXPECTED to blossom into a deep and wide-ranging partnership in which FBI agents and AICPA members will share and learn from each other the latest fraud-detection and deterrence techniques, auditing tricks and traps and the roles and responsibilities of CPAs and law enforcement officials.
-- AS PART OF THE FBI's STRATEGIC OVERVIEW of white-collar crime, the agency said CPAs are an essential part of winning the fight.
-- THE FBI WILL BE CALLING UPON CPAs in several ways as objective, third-party expert witnesses, as eyewitnesses and as candidates to join the agency. The FBI is actively recruiting CPAs as special agents and as analysts. Accountants already are a key part of the FBI team, with 1,300 accountants working as special agents. And the bureau will hire CPAs to fill 15% of new positions.
-- THE FBI SAYS CPAs STAND AS A SOLID LINE of defense in thwarting basic accounting fraud: The independence of CPAs, as well as their objectivity and professional skepticism, remains a crucial element in conducting effective audits.
Full story here.
Monday, March 22, 2004
SOX Whistleblower Rules Get First Test
Small-town bank in rural Floyd, Va., ordered to reinstate CFO who raised accounting and reporting issues.
by Rick Telberg/At Large
In what some say may be the first test of the whistleblower provisions of the Sarbanes-Oxley Act, a bank has been ordered by a judge to reinstate a sacked chief financial officer with back pay, interest and legal costs.
The story, largely overlooked until now, is all the more poignant because, while SOX was crafted with Enron, MCI Worldcom and Global Crossing in the headline, this cases involves the tiny Bank of Floyd in the farming community of Floyd, Va., and a CPA earning $60,000 a year, 49-year-old David Welch. The bank has barely 600 shareholders and the town has 432 residents.
To be sure, the case isn't over. The Bank of Floyd, a unit of Cardinal Bancshares, is appealing the Department of Labor's ruling from an administrative law judge and thoroughly denies any connection between Welch's firing and his issues with the bank's controls, accounting and reporting. The bank says Welch is simply inexperienced and mistaken.
The bare facts of the case may be fairly straightforward. Welch was working for the bank's outside auditing firm in 1999 when the bank said they'd be interested in hiring Welch as a full-time chief financial officer. Up until then, the bank's financial system was hardly state of the art; the head internal auditor, for instance had gone as far as Accounting 102 in college.
Welch, it seems, may soon have started rubbing people the wrong way, particularly president, chairman and director Leon Moore. In one case, a bank shareholder, an elderly woman who wanted to pay her electric bill, walked in to sell 26 shares. Welch said it was too close to the end of a reporting quarter for it not to smack of inside trading if a bank executive bought the shares. But Moore bought the shares.
In another instance, $195,000 came in from already-written-off real estate loans. Welch wanted it booked against the account for bad loans, but Moore insisted it be tagged as income.
One can only guess that things must have gotten ugly when Welch questioned the way Moore occasionally shifted his travel-and-entertainment expenses from one quarter to the next.
Meanwhile, the Sarbanes-Oxley act was being born. At one point Welch declined to sign off on certifying statements because, he said, entries were being made in the general ledger and other actions were taking place without his knowledge.
When a meeting was arranged for Welch to meet with the full board, he refused to do so without his personal attorney present. The board refused to allow the personal attorney to attend the meeting. He was put on paid leave, and then fired.
The bank notes in its defense that it has never been sanctioned or even been investigated by the SEC or banking authorities for Welch's allegations.
But the critical ingredient under SOX is that the case hinges not on whether Welch's allegations are correct, but on whether he "reasonably believed" unethical behavior was taking place, and whether the bank had punished him for voicing those concerns.
"Sarbanes-Oxley was expressly enacted by Congress to foster the disclosure of corporate wrongdoing and to protect from retaliation those employees, officers and directors who make such disclosures," the judge wrote.
Small-town bank in rural Floyd, Va., ordered to reinstate CFO who raised accounting and reporting issues.
by Rick Telberg/At Large
In what some say may be the first test of the whistleblower provisions of the Sarbanes-Oxley Act, a bank has been ordered by a judge to reinstate a sacked chief financial officer with back pay, interest and legal costs.
The story, largely overlooked until now, is all the more poignant because, while SOX was crafted with Enron, MCI Worldcom and Global Crossing in the headline, this cases involves the tiny Bank of Floyd in the farming community of Floyd, Va., and a CPA earning $60,000 a year, 49-year-old David Welch. The bank has barely 600 shareholders and the town has 432 residents.
To be sure, the case isn't over. The Bank of Floyd, a unit of Cardinal Bancshares, is appealing the Department of Labor's ruling from an administrative law judge and thoroughly denies any connection between Welch's firing and his issues with the bank's controls, accounting and reporting. The bank says Welch is simply inexperienced and mistaken.
The bare facts of the case may be fairly straightforward. Welch was working for the bank's outside auditing firm in 1999 when the bank said they'd be interested in hiring Welch as a full-time chief financial officer. Up until then, the bank's financial system was hardly state of the art; the head internal auditor, for instance had gone as far as Accounting 102 in college.
Welch, it seems, may soon have started rubbing people the wrong way, particularly president, chairman and director Leon Moore. In one case, a bank shareholder, an elderly woman who wanted to pay her electric bill, walked in to sell 26 shares. Welch said it was too close to the end of a reporting quarter for it not to smack of inside trading if a bank executive bought the shares. But Moore bought the shares.
In another instance, $195,000 came in from already-written-off real estate loans. Welch wanted it booked against the account for bad loans, but Moore insisted it be tagged as income.
One can only guess that things must have gotten ugly when Welch questioned the way Moore occasionally shifted his travel-and-entertainment expenses from one quarter to the next.
Meanwhile, the Sarbanes-Oxley act was being born. At one point Welch declined to sign off on certifying statements because, he said, entries were being made in the general ledger and other actions were taking place without his knowledge.
When a meeting was arranged for Welch to meet with the full board, he refused to do so without his personal attorney present. The board refused to allow the personal attorney to attend the meeting. He was put on paid leave, and then fired.
The bank notes in its defense that it has never been sanctioned or even been investigated by the SEC or banking authorities for Welch's allegations.
But the critical ingredient under SOX is that the case hinges not on whether Welch's allegations are correct, but on whether he "reasonably believed" unethical behavior was taking place, and whether the bank had punished him for voicing those concerns.
"Sarbanes-Oxley was expressly enacted by Congress to foster the disclosure of corporate wrongdoing and to protect from retaliation those employees, officers and directors who make such disclosures," the judge wrote.
Thursday, March 18, 2004
CPAs Take Lead in Personal Integrity
Compared to most other workers in America, CPAs share more common values in their everyday dealings with co-workers, bosses and top management.
by Rick Telberg
for Career Insider
Underpinned by a culture of professional values and standards, CPAs may be emerging as the ethical beacons for business -- the "go-to" guys and gals when the tough calls need to be made.
A new study of Career Insider readers, for example, shows readers like you are far more likely to be working with and for colleagues of deep-rooted personal integrity.
For instance, a Watson Wyatt survey recently revealed U.S. workers in general are far more likely to cite hypocrisy and favoritism as the biggest ethical problems in the workplace -- not headline-grabbing- financial scandals.
"This is mixed news for employers." Watson Wyatt said in its study. "While most employees do not believe there are concrete ethical breaches in the workplace, some clearly feel compromised by day-to-day hypocrisy and broken promises."
But by the same measures, CPAs rate the everyday ethics of their co-workers, immediate bosses and top management significantly higher than does the average worker.
"At the end of the day, everyone in the company is committed to doing the right thing for the customers and stockholders," commented a middle manager in large private company.
We asked, "How often do others in your company or firm behave with honesty and integrity in their business activities?"
Eighty-seven percent of CPAs said their co-workers "often" or "almost always" conducted themselves with the utmost in personal integrity. By contrast, in the Watson Wyatt survey, only 60 percent of average worker would agree.
How about your immediate boss? Supervisors scored an 85-percent confidence rating among CPAs. In the Watson Wyatt survey, only 72 percent gave a favorable rating to their boss.
"Despite loss of a major customer and large losses last year," said a controller at a mid-sized company, "I have never been pressured to 'doctor' the financial results."
And top management? Three in four, or 75 percent, of CPAs rated top management highly. In the general population, Watson Wyatt said only 56 percent of workers trusted top management.
"Ethics are at the top here," according to a middle manager at a small local CPA firm. "I believe each person in our office works and lives their lives ethically. It is a super environment to work in."
But even in the breach, when "the boss tends to look at people and circumstances through 'rose-colored' glasses," said the respondent, middle and upper managers are free to keep the chief executive on the right track.
Now that's what CPA professionalism is all about -- not just finding and communicating the "correct" answer, but also the "right" answer.
Compared to most other workers in America, CPAs share more common values in their everyday dealings with co-workers, bosses and top management.
by Rick Telberg
for Career Insider
Underpinned by a culture of professional values and standards, CPAs may be emerging as the ethical beacons for business -- the "go-to" guys and gals when the tough calls need to be made.
A new study of Career Insider readers, for example, shows readers like you are far more likely to be working with and for colleagues of deep-rooted personal integrity.
For instance, a Watson Wyatt survey recently revealed U.S. workers in general are far more likely to cite hypocrisy and favoritism as the biggest ethical problems in the workplace -- not headline-grabbing- financial scandals.
"This is mixed news for employers." Watson Wyatt said in its study. "While most employees do not believe there are concrete ethical breaches in the workplace, some clearly feel compromised by day-to-day hypocrisy and broken promises."
But by the same measures, CPAs rate the everyday ethics of their co-workers, immediate bosses and top management significantly higher than does the average worker.
"At the end of the day, everyone in the company is committed to doing the right thing for the customers and stockholders," commented a middle manager in large private company.
We asked, "How often do others in your company or firm behave with honesty and integrity in their business activities?"
Eighty-seven percent of CPAs said their co-workers "often" or "almost always" conducted themselves with the utmost in personal integrity. By contrast, in the Watson Wyatt survey, only 60 percent of average worker would agree.
How about your immediate boss? Supervisors scored an 85-percent confidence rating among CPAs. In the Watson Wyatt survey, only 72 percent gave a favorable rating to their boss.
"Despite loss of a major customer and large losses last year," said a controller at a mid-sized company, "I have never been pressured to 'doctor' the financial results."
And top management? Three in four, or 75 percent, of CPAs rated top management highly. In the general population, Watson Wyatt said only 56 percent of workers trusted top management.
"Ethics are at the top here," according to a middle manager at a small local CPA firm. "I believe each person in our office works and lives their lives ethically. It is a super environment to work in."
But even in the breach, when "the boss tends to look at people and circumstances through 'rose-colored' glasses," said the respondent, middle and upper managers are free to keep the chief executive on the right track.
Now that's what CPA professionalism is all about -- not just finding and communicating the "correct" answer, but also the "right" answer.
Tuesday, March 09, 2004
PCAOB Sets Internal Control Reviews
The Public Company Accounting Oversight Board today voted 5 to 0 to require auditors to review corporations' internal controls when auditing their financial statements
"Audit fees will almost certainly increase, to some extent, as a result" of the standard adopted by the board, said board member Dan Goelzer, according to Reuters. But board members were unanimous that higher audit costs were worthwhile to make financial statements more reliable. Board member Kayla Gillan warned audit firms, however, that the new standard "is not an excuse to price gouge" their clients.
Under the new standard, auditors who routinely review public companies' books also would have to review how companies ensure their books are accurate and reliable. In some cases, that would require tracing financial transactions from start to finish, expanding the workload of auditors. Goelzer called the standard "a sea change in the scope and work of public company auditors," according to Reuters.
Dow Jones reported that the board decided to hold in place a requirement that auditors judge the effectiveness of audit committee members who have the power to hire and fire them. Although oversight board members conceded that creates some potential conflicts of interest, they didn't retreat from the plan. Whenever auditors find problems with audit committees, the final rule requires they report it to the full board.
More at the PCAOB.
The Public Company Accounting Oversight Board today voted 5 to 0 to require auditors to review corporations' internal controls when auditing their financial statements
"Audit fees will almost certainly increase, to some extent, as a result" of the standard adopted by the board, said board member Dan Goelzer, according to Reuters. But board members were unanimous that higher audit costs were worthwhile to make financial statements more reliable. Board member Kayla Gillan warned audit firms, however, that the new standard "is not an excuse to price gouge" their clients.
Under the new standard, auditors who routinely review public companies' books also would have to review how companies ensure their books are accurate and reliable. In some cases, that would require tracing financial transactions from start to finish, expanding the workload of auditors. Goelzer called the standard "a sea change in the scope and work of public company auditors," according to Reuters.
Dow Jones reported that the board decided to hold in place a requirement that auditors judge the effectiveness of audit committee members who have the power to hire and fire them. Although oversight board members conceded that creates some potential conflicts of interest, they didn't retreat from the plan. Whenever auditors find problems with audit committees, the final rule requires they report it to the full board.
More at the PCAOB.
Monday, March 08, 2004
CPA Firms Catch the Urge to Merge
New economic and regulatory landscapes may be reshaping public practice.
by Rick Telberg/At Large
The largest regional firm in the Southeast was created when Dixon Odom PLLC and Crisp Hughes Evans LLP, both headquartered in North Carolina, merged recently to form Dixon Hughes PLLC. With revenues of nearly $95 million and a staff of more than 725 in 24 cities in eight states, Dixon Hughes is the fifth-largest firm overall in the Southeast, trailing only the Big Four in size.
The Dixon Hughes deal is just one example of the merger trend sweeping CPA firms these days. A combination of new regulatory challenges, independence issues, new opportunities for mid-tier firms to pick up business from the Big Four, and an aging generation of CPA partners appear to be just a few of the factors driving an urge to merge unseen since the consolidators were scouring the market in the late 1990's.
Accounting Today magazine has termed the Dixon Hughes deal as marking the rise of a new level of accounting firm, the "super-regional."
Eddie Sams, former executive member of Dixon Odom, and Ken Hughes, former managing partner of Crisp Hughes Evans, share leadership of the new firm as co-managing members. The firm is maintaining lead offices in North Carolina: Asheville and High Point. Dixon Hughes will be a member of Moores Rowland International.
But there are plenty of other examples besides Dixon Hughes which illustrate that firms are seeking to bulk up.
In Santa Cruz, Calif., Hutchinson and Bloodgood LLP and Codiga & Elward Inc., have merged, forming Hutchinson and Bloodgood LLP, which will rank as Santa Cruz County's largest CPA firm, with 14 CPAs and a total staff of 28 personnel. Hutchinson will remain a part of the PKF network.
Not too far away, Vavrinek, Trine, Day & Co. has acquired Pearson, Prete & Co. of Palo Alto, Calif., to become one of the top five locally-based firms in Silicon Valley. The biggest in the Valley remains San Jose-based Frank, Rimerman & Co. with $25.6 million in revenue last year. But this is Vavrinek Trine's fourth major acquisition in the last decade, each representing a move to fill a niche or expand geographically.
In San Antonio, Texas, Gibbons, Vogel & Co. has merged into The Hanke Group, adding eight people, bringing the firm to 65, and making Hanke the fourth-largest local firm in town. The deal also gives Hanke clients in nonprofits and credit unions.
Southfield, Michigan-based Plante & Moran PLLC, has acquired Chicago's Gleeson Sklar Sawyers & Cumpata in a deal creating, by some measures the 10th largest U.S. public accounting firm. Gleeson brings $17 million a year in fees and 124 people, to make Plante & Moran a $191-million firm with a staff of 1,300.
"Our merger is an entree into one of the nation's largest markets," Bill Hermann, Plante & Moran managing partner, said in a statement.
I'm sure you'll be hearing a lot more of that from other CPA firms.
New economic and regulatory landscapes may be reshaping public practice.
by Rick Telberg/At Large
The largest regional firm in the Southeast was created when Dixon Odom PLLC and Crisp Hughes Evans LLP, both headquartered in North Carolina, merged recently to form Dixon Hughes PLLC. With revenues of nearly $95 million and a staff of more than 725 in 24 cities in eight states, Dixon Hughes is the fifth-largest firm overall in the Southeast, trailing only the Big Four in size.
The Dixon Hughes deal is just one example of the merger trend sweeping CPA firms these days. A combination of new regulatory challenges, independence issues, new opportunities for mid-tier firms to pick up business from the Big Four, and an aging generation of CPA partners appear to be just a few of the factors driving an urge to merge unseen since the consolidators were scouring the market in the late 1990's.
Accounting Today magazine has termed the Dixon Hughes deal as marking the rise of a new level of accounting firm, the "super-regional."
Eddie Sams, former executive member of Dixon Odom, and Ken Hughes, former managing partner of Crisp Hughes Evans, share leadership of the new firm as co-managing members. The firm is maintaining lead offices in North Carolina: Asheville and High Point. Dixon Hughes will be a member of Moores Rowland International.
But there are plenty of other examples besides Dixon Hughes which illustrate that firms are seeking to bulk up.
In Santa Cruz, Calif., Hutchinson and Bloodgood LLP and Codiga & Elward Inc., have merged, forming Hutchinson and Bloodgood LLP, which will rank as Santa Cruz County's largest CPA firm, with 14 CPAs and a total staff of 28 personnel. Hutchinson will remain a part of the PKF network.
Not too far away, Vavrinek, Trine, Day & Co. has acquired Pearson, Prete & Co. of Palo Alto, Calif., to become one of the top five locally-based firms in Silicon Valley. The biggest in the Valley remains San Jose-based Frank, Rimerman & Co. with $25.6 million in revenue last year. But this is Vavrinek Trine's fourth major acquisition in the last decade, each representing a move to fill a niche or expand geographically.
In San Antonio, Texas, Gibbons, Vogel & Co. has merged into The Hanke Group, adding eight people, bringing the firm to 65, and making Hanke the fourth-largest local firm in town. The deal also gives Hanke clients in nonprofits and credit unions.
Southfield, Michigan-based Plante & Moran PLLC, has acquired Chicago's Gleeson Sklar Sawyers & Cumpata in a deal creating, by some measures the 10th largest U.S. public accounting firm. Gleeson brings $17 million a year in fees and 124 people, to make Plante & Moran a $191-million firm with a staff of 1,300.
"Our merger is an entree into one of the nation's largest markets," Bill Hermann, Plante & Moran managing partner, said in a statement.
I'm sure you'll be hearing a lot more of that from other CPA firms.
Thursday, March 04, 2004
The Hot New Tech Trends You Can't Afford to Ignore
AICPA ranks the top technology issues changing the way you do business whether you like it or not. So what are you going to do about it?
By Rick Telberg
Special for Hewlett-Packard
You may be able to squeeze a few months more of life out of your molasses-slow Windows 95 or 98 system or your sputtering single-use printer. But technological change is coming fast and hard, and it's unstoppable. Are you ready?
To help sort it all out, the 330,000-member American Institute of Certified Public Accountants is listing the most important technologies that accountants and financial managers should be confronting today. Generated by input from hundreds of tech-savvy members, the 'top ten' list is designed to pinpoint the items wielding a 'powerful influence' over business today. It's a big year: Seven of the top ten items are brand new to the list, which has been compiled annually for the last 14 years.
'Technology is changing so rapidly we can get lost in all the new developments. The AICPA developed this list of at least 10 of the most important to help accountants know at least what to focus on,' said Roman H. Kepczyk, CPA/CITP, and chair of the AICPA Information Technology Executive Committee.
Accountants today are using every last electron in pursuit of productivity, client contact, and, of course, profits.
In the AICPA ranking, information security took the top spot and for good reason according to Kepczyk. Recently, for instance, under a new California law requiring disclosure of any security breach, all 191 clients of one unlucky California CPA firm received notifications that their personal data may have been compromised when one of the firm's notebooks had gone missing. Do you know where all your firm's notebooks are tonight?
The seemingly unstoppable wave of spam came in at number two on the list. It's estimated that the typical office worker may spend up to 20 or 30 minutes a day just cleaning out his or her inbox.
In third place, the dream of "the paperless office" lives on. In Columbus, Ohio, Joe Rotella at Delphia Consulting, is making headway with implentations in several companies to cut down on the costs and headaches of human-resources administration. Rotella figures some companies can save hundreds of thousands of dollars in the first 12 months.
Marc Mandelbaum at Docutrend in New York took on a similar challenge for a distributor of multimedia products to schools. The company's paper-heavy system was so cumbersome they were losing sales orders. Today, customers are happy, and bills are being paid on time. Now, that's music to any accountant's ears.
In fourth place this year, companies are seeking to merge a plethora of legacy databases and ad hoc applications into coherent tools for management and growth. At Lattimore Black Morgan & Cain CPAs, in Brentwood, Tenn., for example, marketing director Leisa Gill reports that the implementation of a new customer-relationship management system is having a huge impact on efficiency.
And that's just a sampling of the top four tech issues this year. Here are the rest:
--Wireless Technologies
--Disaster Recovery
--Data Mining
--Virtual Office
--Business Exchange Technology (i.e.: EDI, XBRL, and the internet)
--Messaging Applications (Instant messaging isn't just for kids anymore.)
--But What Do You Think?
That's 10 new technologies to keep track of. But in the real world -- your world -- what are hard-working accountants really concerned about on an everyday basis? Tell us in this survey, and watch for the results in the next edition of the HP/CPA Tech Advisor by Rick Telberg.
Or email me directly, at rtelberg@telberg.com with your story from the frontlines and maybe we'll be able to share another nifty solution with the rest of our readers.
AICPA ranks the top technology issues changing the way you do business whether you like it or not. So what are you going to do about it?
By Rick Telberg
Special for Hewlett-Packard
You may be able to squeeze a few months more of life out of your molasses-slow Windows 95 or 98 system or your sputtering single-use printer. But technological change is coming fast and hard, and it's unstoppable. Are you ready?
To help sort it all out, the 330,000-member American Institute of Certified Public Accountants is listing the most important technologies that accountants and financial managers should be confronting today. Generated by input from hundreds of tech-savvy members, the 'top ten' list is designed to pinpoint the items wielding a 'powerful influence' over business today. It's a big year: Seven of the top ten items are brand new to the list, which has been compiled annually for the last 14 years.
'Technology is changing so rapidly we can get lost in all the new developments. The AICPA developed this list of at least 10 of the most important to help accountants know at least what to focus on,' said Roman H. Kepczyk, CPA/CITP, and chair of the AICPA Information Technology Executive Committee.
Accountants today are using every last electron in pursuit of productivity, client contact, and, of course, profits.
In the AICPA ranking, information security took the top spot and for good reason according to Kepczyk. Recently, for instance, under a new California law requiring disclosure of any security breach, all 191 clients of one unlucky California CPA firm received notifications that their personal data may have been compromised when one of the firm's notebooks had gone missing. Do you know where all your firm's notebooks are tonight?
The seemingly unstoppable wave of spam came in at number two on the list. It's estimated that the typical office worker may spend up to 20 or 30 minutes a day just cleaning out his or her inbox.
In third place, the dream of "the paperless office" lives on. In Columbus, Ohio, Joe Rotella at Delphia Consulting, is making headway with implentations in several companies to cut down on the costs and headaches of human-resources administration. Rotella figures some companies can save hundreds of thousands of dollars in the first 12 months.
Marc Mandelbaum at Docutrend in New York took on a similar challenge for a distributor of multimedia products to schools. The company's paper-heavy system was so cumbersome they were losing sales orders. Today, customers are happy, and bills are being paid on time. Now, that's music to any accountant's ears.
In fourth place this year, companies are seeking to merge a plethora of legacy databases and ad hoc applications into coherent tools for management and growth. At Lattimore Black Morgan & Cain CPAs, in Brentwood, Tenn., for example, marketing director Leisa Gill reports that the implementation of a new customer-relationship management system is having a huge impact on efficiency.
And that's just a sampling of the top four tech issues this year. Here are the rest:
--Wireless Technologies
--Disaster Recovery
--Data Mining
--Virtual Office
--Business Exchange Technology (i.e.: EDI, XBRL, and the internet)
--Messaging Applications (Instant messaging isn't just for kids anymore.)
--But What Do You Think?
That's 10 new technologies to keep track of. But in the real world -- your world -- what are hard-working accountants really concerned about on an everyday basis? Tell us in this survey, and watch for the results in the next edition of the HP/CPA Tech Advisor by Rick Telberg.
Or email me directly, at rtelberg@telberg.com with your story from the frontlines and maybe we'll be able to share another nifty solution with the rest of our readers.
Accountants are the Biggest Book Worms
LONDON (Reuters) - When they are not sorting out the 'books' for other people, accountants are the professionals most likely to have their head in a book for fun.
Accountants spent more time reading for pleasure than politicians, journalists, teachers and vicars, according to survey commissioned for World Book Day.
'This just goes to show that you shouldn't believe everything you read about the reputation of accountants,' said Kieran Poynter, UK chairman of PricewaterhouseCoopers.
Secretaries were the second biggest book worms, followed by politicians, who opted for biographies and history books.
Overall, Jane Austen was the most popular author followed by Terry Pratchett and 'Lord of the Rings' author J.R.R. Tolkien."
LONDON (Reuters) - When they are not sorting out the 'books' for other people, accountants are the professionals most likely to have their head in a book for fun.
Accountants spent more time reading for pleasure than politicians, journalists, teachers and vicars, according to survey commissioned for World Book Day.
'This just goes to show that you shouldn't believe everything you read about the reputation of accountants,' said Kieran Poynter, UK chairman of PricewaterhouseCoopers.
Secretaries were the second biggest book worms, followed by politicians, who opted for biographies and history books.
Overall, Jane Austen was the most popular author followed by Terry Pratchett and 'Lord of the Rings' author J.R.R. Tolkien."
Monday, March 01, 2004
Mailbag: Checking the Pulse of the Profession
CPAs react to economic "bubbles," tax season fun and games, and catching the mood of the rank-and-file: A peek into the At Large inbox.
by Rick Telberg/At Large
What's the old joke? Oh yeah: Ask three CPAs for an opinion and you'll get four different answers. Well, here's what happens when you ask a couple hundred thousand CPAs for their comments: You get overwhelmed with answers, opinions, critiques, ideas and suggestions.
But, you know what? We like it that way. Your input and feedback keeps us in touch with your needs and interests. I've been inundated with so many emails to some recent At Large columns that it'd be a shame not to share some of them with you. So here's a sampling.
Forecasting the Economy
In response to "Is Economic Surge Just Election-Year Bubble?," Lee Faust suggests purse strings may be tight because of lessons learned from the collapse of the 1990's bubble.
"No company wants to be economically in that position again - no matter who is in the White House," Faust writes, adding, "9/11 brought reality to our shores and we'll need to evaluate the presidential candidates accordingly. Terrorism is no longer something suffered in Israel or Europe. There are bad people in the world and we need to be very observant and pro-active."
Rick Marsh, a CPA and attorney in Charlotte, N.C., attributes what I referred to as a possible "bubble" and begs to differ, asserting that the economic uptick can continue unimpeded if the "very significant structure change in tax policy that reduced the dividend tax rate and capital gains tax rate to 15 percent each" remains in place.
Kirk Glenn might disagree. He has his own view on the economic outlook.
"Looking ahead to 2004 I think it will probably be a better year than 2003," Glenn agrees, then goes on to suggest that "what you and most prognosticators are missing is the cut-taxes-and-spend-more Republican party that is hanging a heavy noose around the necks of future generations with the horrendous debt they are incurring."
Rick and Kirk, one of you is probably right; but for better or worse we may not know until after the Presidential election.
Tax Season Fun and Games
We've also been getting a ton of responses to "20 Tips for Surviving Tax Season." One CPA found the list too much to believe. "Name one firm doing any of those things and I'll send them my resume today," says one reader. Another chides me with "You are losing it, Rick. Seriously. Raise fees and pay bonuses? Why didn't I think of that?"
But, in fact, innumerable firms are working hard to make all the hard work more bearable.
"Amazing list in your article," writes David Gibbons at BKR Dupuis & Ryden, "We do weekly back massages, mid-week dinners, Saturday AM breakfast/munchies, weekly ice cream, various games and contests, and a mid-season goody bag."
A number of firms, for instance, reported they bring in massage therapists. But At Wilke and Associates, in Carnegie, Pa, Mary Lou Hanson reports the firm also has its own work-out room in the basement, free lunches when performance goals are met from the week before, and foosball tournaments." Yes, they have their own foosball table.
"I like the ideas that you mentioned also," she adds. "We will have to look into incorporating some of them into our tax season also."
At Sharon Evans's 9-person firm, they've had a secret buddy program for five years. "We draw names for our secret buddy at the company Christmas luncheon. All during the tax season it is our responsibility to look after our secret pal -- motivate, cheer, etc. -- without them or anyone else catching us in the act. This involves a lot of ingenuity and competition. Some of the stuff that goes on is a riot. Tension is reduced. On April Fools day we have our annual April Fools Day luncheon (what kind of fool would be in this business?) and we bring a present for our special buddy."
The Pulse of the Profession
Sometimes it's nice just to get an email of general support of the column, like this one from Andrew S. Pfau, CPA, in Jericho, N.Y.
"I just wanted to let you know that I always find your articles reflect the current pulse in public accounting. Besides catchy article titles, you seem more in touch with the issues of the day than most writers for accounting publications (or websites). I look forward to reading your articles. Keep up the good work."
Thanks, Andrew. With support and encouragement like that, you, and all the readers like you, make the job easy and rewarding.
More to say? Rants, raves, ideas, suggestions, and contrary opinion are always welcome.
CPAs react to economic "bubbles," tax season fun and games, and catching the mood of the rank-and-file: A peek into the At Large inbox.
by Rick Telberg/At Large
What's the old joke? Oh yeah: Ask three CPAs for an opinion and you'll get four different answers. Well, here's what happens when you ask a couple hundred thousand CPAs for their comments: You get overwhelmed with answers, opinions, critiques, ideas and suggestions.
But, you know what? We like it that way. Your input and feedback keeps us in touch with your needs and interests. I've been inundated with so many emails to some recent At Large columns that it'd be a shame not to share some of them with you. So here's a sampling.
Forecasting the Economy
In response to "Is Economic Surge Just Election-Year Bubble?," Lee Faust suggests purse strings may be tight because of lessons learned from the collapse of the 1990's bubble.
"No company wants to be economically in that position again - no matter who is in the White House," Faust writes, adding, "9/11 brought reality to our shores and we'll need to evaluate the presidential candidates accordingly. Terrorism is no longer something suffered in Israel or Europe. There are bad people in the world and we need to be very observant and pro-active."
Rick Marsh, a CPA and attorney in Charlotte, N.C., attributes what I referred to as a possible "bubble" and begs to differ, asserting that the economic uptick can continue unimpeded if the "very significant structure change in tax policy that reduced the dividend tax rate and capital gains tax rate to 15 percent each" remains in place.
Kirk Glenn might disagree. He has his own view on the economic outlook.
"Looking ahead to 2004 I think it will probably be a better year than 2003," Glenn agrees, then goes on to suggest that "what you and most prognosticators are missing is the cut-taxes-and-spend-more Republican party that is hanging a heavy noose around the necks of future generations with the horrendous debt they are incurring."
Rick and Kirk, one of you is probably right; but for better or worse we may not know until after the Presidential election.
Tax Season Fun and Games
We've also been getting a ton of responses to "20 Tips for Surviving Tax Season." One CPA found the list too much to believe. "Name one firm doing any of those things and I'll send them my resume today," says one reader. Another chides me with "You are losing it, Rick. Seriously. Raise fees and pay bonuses? Why didn't I think of that?"
But, in fact, innumerable firms are working hard to make all the hard work more bearable.
"Amazing list in your article," writes David Gibbons at BKR Dupuis & Ryden, "We do weekly back massages, mid-week dinners, Saturday AM breakfast/munchies, weekly ice cream, various games and contests, and a mid-season goody bag."
A number of firms, for instance, reported they bring in massage therapists. But At Wilke and Associates, in Carnegie, Pa, Mary Lou Hanson reports the firm also has its own work-out room in the basement, free lunches when performance goals are met from the week before, and foosball tournaments." Yes, they have their own foosball table.
"I like the ideas that you mentioned also," she adds. "We will have to look into incorporating some of them into our tax season also."
At Sharon Evans's 9-person firm, they've had a secret buddy program for five years. "We draw names for our secret buddy at the company Christmas luncheon. All during the tax season it is our responsibility to look after our secret pal -- motivate, cheer, etc. -- without them or anyone else catching us in the act. This involves a lot of ingenuity and competition. Some of the stuff that goes on is a riot. Tension is reduced. On April Fools day we have our annual April Fools Day luncheon (what kind of fool would be in this business?) and we bring a present for our special buddy."
The Pulse of the Profession
Sometimes it's nice just to get an email of general support of the column, like this one from Andrew S. Pfau, CPA, in Jericho, N.Y.
"I just wanted to let you know that I always find your articles reflect the current pulse in public accounting. Besides catchy article titles, you seem more in touch with the issues of the day than most writers for accounting publications (or websites). I look forward to reading your articles. Keep up the good work."
Thanks, Andrew. With support and encouragement like that, you, and all the readers like you, make the job easy and rewarding.
More to say? Rants, raves, ideas, suggestions, and contrary opinion are always welcome.
Sarbanes-Oxley Forces Bank to Hire Whistleblowing CFO
It may mark the first time under the new law.
Virginia's Cardinal Bankshares, the holding company for the Bank of Floyd in Floyd, Va. fired CFO David Welch after he raised concerns about company practices. The alleged practices included insider trading, faulty internal controls, and irregularities in financial reporting. Applying Sarbanes-Oxley's whistle-blower protections, Welch fought the dismissal. The court agreed with Welch and ordered the bank to rehire him. The court also ordered the bank to reimburse Welch all back pay as well as cover his legal expenses. A ruling has yet to be made on damages suffered by Mr. Welch.
"This is believed to be the first case where the two year old law has been used successfully," writes Richard Menta for www.bankinfosecurity.com.
It may mark the first time under the new law.
Virginia's Cardinal Bankshares, the holding company for the Bank of Floyd in Floyd, Va. fired CFO David Welch after he raised concerns about company practices. The alleged practices included insider trading, faulty internal controls, and irregularities in financial reporting. Applying Sarbanes-Oxley's whistle-blower protections, Welch fought the dismissal. The court agreed with Welch and ordered the bank to rehire him. The court also ordered the bank to reimburse Welch all back pay as well as cover his legal expenses. A ruling has yet to be made on damages suffered by Mr. Welch.
"This is believed to be the first case where the two year old law has been used successfully," writes Richard Menta for www.bankinfosecurity.com.
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