FROM THE MAILBAG: A slew of e-mail shows readers divided about the economy, passionate about the profession.
by Rick Telberg
At Large
The polls and pundits suggest it. But CPAs live it.
And, if e-mail is any indication, then the e-mails confirm it: How you feel about the economic future depends a lot on your economic present.
In a series of "At Large" columns, most recently "Recovery? What Recovery?", accountants and financial managers have been voicing their views on the business outlook. The results are mixed, to put it mildly. In fact, I've characterized CPAs' outlook for the economy "as divided and polarized" as this year's presidential election.
Not surprisingly then, the columns have generated a ton of feedback. So let me just get out of the way for a moment and let the readers speak for themselves. There's nothing scientific about this sampling of the mailbox. But I think it may be representative of what I'm hearing from the grassroots.
Greetings Rick,
I just felt compelled to reply to this article "Recovery? What Recovery?" and I have to say that never in my professional career have I had such a challenge in seeking employment. It has been about 10 months now since moving from Florida to Virginia to join my husband; there is nothing out there for me in this area.
There sure are plenty of entry-level positions but nothing for a person with my background. I am certified with over 15 years of management experience; I guess the only thing I lack is a graduate degree. But with this experience I am stumped and confounded as to the claims that it is a wonderful time to be an accountant (maybe for recent graduates starting out). I have expanded my search to larger metro areas close by, but to no avail. I can relate to the person mentioned from Dallas who is the only one with a suit on the food stamp line! I am basically in the same predicament as she is and feel her pain.
Well, enough venting, I just wanted to ask if there is a way to gain some "Sarbanes-Oxley" experience without knocking at the door of some CPA firm that does not even "look" at a person like me (I am 45 years old, out of public accounting for over 20 years). I have got to say this has been the most trying and stressful time of my professional career.
Sincerely,
Sandra M., CPA
Dear Mr. Telberg,
The next time you decide to write an article about the U.S. economy, consider leaving out references to the state of nation's politics. I prefer to get my daily political briefing from objective news sources. We don't need your subjective inference that perhaps the president is somehow responsible for the uneven economic recovery. Perhaps there is a micro economic reason for the uneven recovery. Perhaps state and local regulation is the cause for the uneven recovery.
May all your blues be reds!
Bernard E. Benson, CPA
Benson, Benson & Company
Dr. Telberg,
We have so much prosperity in this county... it's unbelievable. I see people in $45K jobs driving $40K cars. It may not be wise, but I think consumer confidence is evident by all the new vehicles and trade-up houses. We need to reduce the size of government and the economy will take off.
Robert B. Porter, CPA
Chief Financial Officer
Brentwood, TN
Rick:
Is the glass half empty or half full? I prefer to see it as half full. Our office's income is up 70 percent through the end of July. We have found new services to provide to meet the demands of our community. Our community is booming and we have taken advantage of it by keeping a positive attitude!
Most people should quit blaming others for their problems. Our motto here is "get it done".
Dave Anstadt, CPA
Anstadt & Associates, LLC
Rick,
As a CPA in the private/government sector, I would like to share some thoughts. Attaining my MBA at 41 and CPA at 45, I learned in 1991 that age discrimination was alive and well at public accounting firms. Looking elsewhere, I discovered forensic accounting/audit. Last summer I lost my 11+-year position as a financial investigator with a multi-jurisdictional drug task force during Illinois state budget cuts. I found myself in the unemployment line.
The local economy continued its downward path while housing starts for the upper income employed thrived. During this time I achieved CFE status while seeking a challenging position that would allow me to pursue my career goals in forensic accounting/audit. After 10 months I was fortunate to attain a position in fiscal management of federal grants. After chasing drug dealers and money launderers, I am now honing skills in government accounting, cash management, grant monitoring, and GASB 34 compliance.
I have learned that nothing lasts forever, so I am taking advantage of this position to learn as much as possible and to give back to my employer more than possible. After this - who knows? My first love is forensic accounting and audit, so I know that I will eventually return to working with law enforcement in "money cases".
Thanks for the chance to share,
Joanne
Rick:
One analogy you could have used: If, in the midst of a war if you ask the person(s) getting paid to bury the bodies, how's business and what are the prospects for the future, they're going to say "great" on both accounts.
In many ways that is what is happening in our economy right now: some of those you interviewed are benefiting because someone else lost their job. I guess there's one way to determine if the economy is getting better: count the dead bodies.
D. Miller
Texas
Rick -
Quite frankly I really don't think this expansion has legs. I think it's a result of the advanced tax refunds from the credits, the large refunds this year due to the tax cut, and the massive increases in spending on the Iraq conflict. Because the initial tax cuts were focused on the lower and middle income taxpayers we got a lot of bang out of them. These taxpayers tend to spend any tax savings, immediately causing a short-term uptick in the economy.
Giving the wealthy 90 percent of the tax break gives the high-income taxpayer increased money to invest. A logical business person will invest it in technology that will allow them to reduce the factors of production... a logical business person will use it to reduce labor because it is the most expensive factor of production. The effect of this will be to replace higher paid jobs with lower paying ones. Combine this factor with the massive deficits and the following rise of interest rates, and the economy will stall mid to late 2005. I fully expect us to enter into a period of stagnation by next year that will continue for several years.
Fortunately I have strong skills as a CPA and I make money in good and bad economies. I for one have invested in technologies. The firm I had 10 years ago employed three clerical people to do write-up, now I have all my clients on QuickBooks. I still review the accounting much like in the write-up days, but now I review my clients' work instead of my employees'. I still bill the clients the same amount.
Bradley R McGrew, CPA
Sole Practitioner
Austin, Texas
AND WHILE WE'RE AT IT, here are a few more from the "At Large" mailbox:
Rick,
As a CPA who has been in the financial services business for almost 20 years, am I missing something? [Re: "...has created limited partnerships with units priced as low as $25,000 in existing broker-dealers, thus sidestepping a lot of regulatory and administrative costs and headaches.] Why would any CPA want to join a BD or form a BD when they can just be an RIA and sidestep the absolute nonsense of compliance that the NASD pursues? Operating as an RIA is so much more flexible and allows a CPA with his own practice, an entrepreneur by nature, to continue to make his own rules and not have a BD insist that they must review every letter and e-mail, every seminar slide, and every page handed to a prospect or client. Ever since CPAs have taken an interest in financial services, it has boggled me why they would get involved with broker-dealers -- unless they simply don't know any better?
Larry Klein CPA/PFS, CFP
President
NF Communications
www.nfcom.com
Dear Mr. Telberg,
Thank you for your positive comments regarding WorthMark Financial Services in your column. The CPA community has responded very favorably to our new broker-dealer model. Your analysis of our structure was accurate; however, in speaking with you I may not have mentioned that we have two broker-dealer options for firms... The first is a $25,000 capital contribution (which remains an asset in the firm's capital account), as you correctly stated. The second is a $3,000 capital contribution. The broker-dealer structure is identical for both options, although the payout schedule and expense allocation vary. Not surprisingly, the $3,000 option is by far the most popular choice for CPA firms!
Kind regards,
Tim Steele
VP Sales
WorthMark Financial Services, LLC
Newport Beach, Calif.
Dear Rick,
Another great article ("3 Hot Trends from Some Cool CPA Shows," Aug. 9). As a person with my New York CPA license, pending the experience rating, I have just finished an opportunity preparing tax returns in Southern California for clients with a wide variety of needs in investments, partnerships, complicated 1040s and very many "personal bookkeeping documents" that could be done much more simply. A tiny suggestion is to just open up a separate bank account, use only checks, and let those like American Express present you with your statements. With current tax software (ATX Max) and some sort of support like Tax Analyst, the client will have much less to do and probably a lot less duplication of books and records. It is true, accountants are very well trained for detail-oriented work and I found working with clients gratifying and enjoyable with tax systems and tax support systems.
Michelle R.
