CPA Trendlines

New Independent Non-Partisan Committee to Study Capital Markets Regulation

…and Make Recommendations to Key Policy Makers

NEW YORK, Sept. 12 /PRNewswire/ — The Committee on Capital Markets Regulation, a newly formed independent group of U.S. business, financial, investor and corporate governance, legal, accounting and academic leaders, announced today that it will conduct a major study of how to improve the competitiveness of the U.S. public capital markets. It plans to issue a report with recommendations to key policy makers for specific changes in regulation and legislation by the end of November.

“I am pleased to learn The Committee on Capital Markets Regulation, an independent group of highly-respected leaders in each of their fields, will examine the competitiveness of the U.S. public capital markets,” said Secretary of the Treasury Henry Paulson. “This issue is important to the future of the American economy and a priority for me. I look forward to reviewing their findings and ideas.”

The committee is directed by Hal S. Scott, Nomura Professor and Director of International Financial Systems at Harvard Law School, and co-chaired by Glenn Hubbard, Dean of Columbia Business School, and John L. Thornton, Chairman of the Board of the Brookings Institution. The other committee members are Samuel DiPiazza, Global CEO, PricewaterhouseCoopers; Donald Evans, CEO, The Financial Services Forum, former U.S. Secretary of Commerce; Robert Glauber, Visiting Professor, Harvard Law School, former Chairman & CEO, NASD; Ken Griffin, President & CEO, Citadel Investment Group LLC; Charles O. Holliday, Chairman & CEO, Dupont; Cathy Kinney, President & Co-COO, NYSE; Ira M. Millstein, Partner, Weil, Gotshal & Manges; Steve Odland, Chairman & CEO, Office Depot; William G. Parrett, CEO, Deloitte; Jeffrey M. Peek, Chairman & CEO, CIT Group Inc.; Robert Pozen, Chairman, MFS Investment Management; Wilbur L. Ross Jr., Chairman & CEO, WL Ross & Co. LLC; James Rothenberg, President & Director, Capital Research and Management Co.; Thomas A. Russo, Vice Chairman, Chief Legal Officer, Lehman Brothers; Leonard Schaeffer, Founding Chairman, WellPoint Health Network; Peter Tufano, Sylvan C. Coleman Professor of Financial Management, Harvard Business School; and Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance, University of Chicago Graduate School of Business.

The committee’s study, “Capital Markets Regulation and Its Effects on U.S. Competitiveness,” will assess the degree to which U.S. public markets are losing ground to foreign and private markets, the causes of this decline, and its impact on the financial industry and the economy.

In a November interim report the Committee will include recommendations on:
1. Liability issues affecting public companies and gatekeepers (such as auditors and directors) with a focus on securities class action litigation, criminal enforcement and federal versus state authority.
2. The Sarbanes-Oxley Act, with major emphasis on Section 404, which requires auditors and senior managers to certify the adequacy of internal controls.
3. Overall regulatory processes to allow the United States to do a better job of evaluating changes of law and regulation, prospectively, initially and on an ongoing basis.
4. Shareholder rights.

Glenn Hubbard, co-chairman of the committee, said: “We believe that the unique structure and independence of the committee will enable it to evaluate thoroughly a broad range of economic issues affecting U.S. capital markets and make actionable recommendations to help keep the U.S. markets competitive with markets around the world.”

The Committee’s other co-chairman, John L. Thornton said: “There are clear signs that global confidence in our capital markets has been diminished. It is very timely that we seek the creative thinking of some of our country’s leading academics and business professionals. We want to assure that a vibrant U.S. capital market continues to be part of the foundation of economic growth and job creation for all American businesses, both large and small.”

Professor Scott added: “We are witnessing a crucial moment in economic history — the movement of U.S. capital markets abroad, and the growth of private markets at the expense of public ones. The United States needs to adopt a more principled and risk-based approach to regulation. With the support of eminent academics and finance professionals across the country, I am confident that the Committee will contribute valuable input for specific action by key policy makers.”

Most of the members of the Committee will work on Task Forces to develop recommendations for the study. These Task Forces also include the following prominent academics and professionals specializing in law and finance: John Coffee, Adolf A. Berle Professor of Law, Columbia Law School; Allen Ferrell, Harvey Greenfield Professor of Securities Law, Harvard Law School; Kenneth Scott, Ralph M. Parsons Professor of Law and Business, Stanford Law School; Reinier Kraakman, Ezra Ripley Thayer Professor of Law, Harvard Law School; Andrew Kuritzkes, Managing Director, Mercer Oliver Wyman; Robert Litan, VP for Research and Policy, Kauffman Foundation; John Villa, Partner, Williams & Connolly.

CONTACT: Prof. Hal S. Scott, Harvard Law School, +1-617-495-4590; or Tim Metz of Hullin Metz & Co., +1-212-752-1044 READ MORE →

Are You Earning What You’re Worth?

Value pricing gains traction. Step 1: Change the way you think about your business.

Start here: Join the study; get the benchmarks.

by Rick Telberg
At Large

Accountants are catching on to the notion that their clients may place a greater value on their services than they think.

Accordingly, there’s a discernible movement toward so-called value pricing or value billing models, in which rates are based on the value perceived by the client and away from the age-old model of the billable hour, or the common market pricing model based on what the competition is charging. According to Bay Street Research, about 27 percent of CPA firms say they use value pricing, compared with 26 percent for market pricing and 35 percent using billable-hour (cost-based) pricing. The remaining 12 percent cited a mixture of strategies, including combining value pricing with market and/or cost-based methods.

Value pricing was barely a blip on many practitioners’ radar screens before author and lecturer Ron Baker began evangelizing it at CPA conferences in the 1990s. But CPA consultant Charles Larson deserves the credit for writing the first book on the movement long before. Today, it may be finally be becoming mainstream. See How Much Do You Think You’re Worth? READ MORE →

CFOs Prove Loyal to Their CPA Firms

Most companies keep their CPA firms for at least five to 10 years. That’s loyalty.

by Rick Telberg
For the Finance Executive

Here’s some good news for accounting firms: Most companies stick with their CPA firms for at least five to 10 years. And they are loathe to change. The reasons are myriad. The inherent cost of switching — getting a new set of outside accountants up to speed — is certainly one. However, another, less tangible reason, cannot be denied: The vast majority of CPA firms develop strong and deep relationships with their clients.

And yet, there is some fragility in the relationship to which no CPA firm, or corporate finance manager, should turn a blind eye. A surprising number of corporate finance managers want more from their CPA firms. To add your voice to the discussion, join the study and get the results.

And therein lays the opportunity for competitive CPA firms and perceptive corporate finance managers. READ MORE →

Time for a New PC or Laptop?

Should you upgrade or replace?

By Rick Telberg
Bay Street Group LLC

When do you know it’s time to replace that aging desktop or laptop?

One definite sign is if the unit simply drops dead.

It refuses to power on at all or delivers an error message instead of a boot screen. With diagnostic and repair labor charges hovering between $75 and $100 an hour, if the cause for your problem isn’t readily apparent and easily (and inexpensively) repairable, a replacement rather than repair is often an easy choice to make.

But the decision isn’t quite as cut-and-dried if the computer still works, and is several years old. In many cases, the system seems to have gotten slower and slower over the years, and you are finding it annoying and distracting using the PC. READ MORE →

Porter Keadle Blogs for Recruits

Your days as a college student are almost numbered. The working world is calling. As you get ready to embark on your career, you have to be thinking, “What am I going to do when I graduate?” “Is a job in public accounting right for me?”

… So begins Off the Ledger, the blog created by Porter Keadle Moor in Atlanta to start a dialog with college accounting students. If blogs are good for anything to CPA firms, they’ll prove their mettle first as recruiting tools. Hat’s off to PKM for the venture. And hat tip to Public Accounting Report for reporting it.

And just in time for recruiting season! READ MORE →

SOHOs: A Market Too Big to Ignore

Millions of businesses, billions of dollars crying out for business services. Are you a part of it?

by Rick Telberg
At Large

Some tax and accounting professionals, including solo practitioners, may think that sole-owner home-office businesses are too small to pursue actively as clients. Well, think again.

In fact, the small-office/home-office (SOHO) market is gigantic, and needs all sorts of management advisory services that are being overlooked by business service professionals.

There are between 10 million and 14 million home-based businesses generating $102 billion in annual revenue, and prevailing demographic and business trends could fuel growth by leaps and bounds in the years ahead, according to a new U.S. Small Business Administration study, “Impact of Location on Net Income: A Comparison of Homebased and Non-Homebased Sole Proprietors” (free PDF). READ MORE →

TaxWise Falls to CCH

CCH adds 9,300 users and $53-million revenue stream; Follows August acquisition of ATX/Kleinrock

Riverwoods, ILL. (News Release from CCH) – CCH has agreed to acquire the stock of TaxWise Corp. Terms were not immediately disclosed.

CCH said it heralds the company’s new strategy to attack the the market of small- to mid-sized tax-prep businesses.

TaxWise and its subsidiary, Universal Tax Systems, Inc., headquartered in Rome, Ga., provide tax and accounting software solutions to more than 9,300 CPAs, accounting professionals, enrolled agents and tax preparers across the U.S. TaxWise has 300 full-time employees and annual revenues of approximately $53 million.

TaxWise serves the small- to mid-size tax and accounting markets with tax compliance software, efiling services, bank products and training, primarily marketed under the TaxWise® brand. CCH says it will maintain the TaxWise product offerings as a separate business line.

With the August acquisition of ATX/Kleinrock, a provider of tax preparation, accounting and tax research software solutions, CCH announced its commitment to serve the small- to mid-size markets with an expanded suite of solutions. The plan to acquire TaxWise further demonstrates CCH’s commitment to serve these professionals with an even wider range of products and services designed for their specific requirements.

“CCH has long been a leader in the tax and accounting market and TaxWise customers will be well served by CCH as it focuses on providing a full suite of market-leading solutions for professionals in the small- and mid-size market,” said Bill Anderson, TaxWise CEO.

CCH already fields market-leading products such as are The ProSystem fx Office, CCH Tax Research NetWork, Accounting Research Manager and the U.S. Master Tax Guide.

CCH is owned by Wolters Kluwer, a multinational publisher and information services company serving the health, corporate services, finance, tax, accounting, law, regulatory and education sectors. Wolters Kluwer has annual revenues (2005) of €3.4 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. READ MORE →