Peer Review Faces “A Real Problem”

AICPA senior vice president Sue Coffey addresses another looming shortage, this time in peer reviewers.

Liz Gold reports from AICPA Fall Council:

“Two years ago we had 11,000 peer reviews a year and only 1,700 peer reviewers, and that was a significant decrease from five years previous to that,” she said. “Of those 1,700, 90 percent were over the age of 40, and 45 percent were over the age of 55. We have a real problem, just like the rest of the profession, with the pipeline and getting people involved in peer review, and we need to do something about it.”

New standards that go into effect in January will require only the team captain and review captain to have had training in peer review.

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PayCycle Finds 58% Small Business Owners Feel Government Not Addressing Needs

Key findings at a glance:

  • 69% Not Impacted by Credit Squeeze.
  • 91% Worried About Economy.
  • 74% Believe Recovery Will Take 18 Months or Longer.

PayCycle, Inc., the online payroll service, finds in a survey that found 58% of small business owners do not feel the government is addressing their needs. Sixty-nine percent (69%) say they are not directly impacted by the credit squeeze because they don’t need more credit, but 91% are still worried about the economy.

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BUSY SEASON OUTLOOK: 7 tips to survive the new money crunch

I found change to usually be a good thing for billings.

From Gary Jones
Indigorilla Inc.
via LinkedIn

However, even with good things there can be some red flags of caution. For example – receivables become an issue for some/many CPAs in a credit crunch. This credit predicament is different than those I have lived through, we are uncertain as to how all of this is going to unravel and be reflected in practice economics.

IMHO practices should:

1. Vigorously analyze the practice
2. Develop a new plan for giving client credit for services rendered
3. Have a definite plan in place if cash flow slows down
4. Confirm bank line is available from lender (review terms of this line)
5. Consider new opportunities prudently
6. When in doubt – turn business down
7. Write a tax season business plan based on opportunity and risk

I know these sound like common since, but look where this economy has ended up; upside down.

Barry Melancon explains “the reliability project”

Maybe it’s time to scrap “independence” for comps and reviews.

In this three-minute video, AICPA President and CEO Barry Melancon (pictured) explains the Accounting and Review Services Committee’s Reliability Project. The AICPA says the project

“aims to enable CPAs to perform limited assurance engagements for clients when the external CPA performs certain control services. The accountant would still be precluded from providing any assurance service when he or she has a financial or relationship interest in the company. It is expected that current compilation and review standards will be maintained. The ARSC plans to expose a new standard in late 2008 or in the spring of 2009.”

I first reported on the trend in January, February, March and April. And you can get a comprehensive view of the issue from my August post.

So, is independence dead?