Lessons from the best-managed firms. By Marc Rosenberg Author of “CPA Firm Management and Governance: The Managing Partner’s Guide to Running a CPA Firm Like a Business.” Baby boomer partners are rapidly approaching retirement age, resulting in a dramatic increase in new managing partners at firms. In fact, CPA Trendlines estimates that up to 25% of multi-owner firms are operating under managing partners who are relatively new to the job, with tenures under three years. And over the next five years, one-third of multi-owner firms will undergo a change in ownership and/or control.
Warning: This article will make you question your controls and audit procedures. by Gary Zeune, CPA Managing Director, The Pros & The Cons Most risk is not in the accounting records. Why not? Because the vast majority of our work as CPAs involves monetizing and measuring activities that have already occurred. The risk starts before we do our job. Think recording sales, not making sales. In manufacturing, think cost accounting, not making widgets. Because our work is historical, one of the major flaws, no matter the type and size of the entity, is that we usually react to change after fraud has occurred. When a new law, regulation or competition affects our employer or client, we fail to implement new [...]
Options to grow your profits besides raising revenue and lowering costs. By Sandi Smith, CPA Accountant’s Accelerator Many accountants these days are anxious to hit the golden $100,000 mark this year. Others are interested in growing their revenues steadily and incrementally. Still others are focused on lowering costs, raising profits from that side of the equation. More for soloists and small firms: Seven Checklist Secrets for Turning Tax Season into Opportunity Season • How to Stay Energized, Upbeat, and Thinking Bigger through Busy Season • Seven Ways to Wow Your Prospect • Rev Up Your Revenue with These Two Daily Rituals • 10 Tips for Creating More Energy this Tax Season • Take a Cue from Venture Capitalists: Your Firm Needs a Brain Trust [...]
Why some firms decide they don’t want a true managing partner. By Marc Rosenberg, CPA Author of “CPA Firm Management and Governance” Over the years, I have found that many firms lack a clear understanding of what a Managing Partner is. Often, it’s a negative conception, caused by a bad experience at their current firm or a previous one. So, to avoid a repeat of these bad experiences, the partners decide either not to have a MP or to provide for the MP position with greatly limited authority and responsibility. More on CPA firm leadership and management: When Is It Time to Shift Your Firm from Partnership-style to Corporate-style Governance? • De-Bunking the Myth about Niche Marketing for Tax and Accounting [...]
New comprehensive income display guidance. by Thomas A. Ratcliffe, Ph.D, CPA Plain-English Accounting The FASB has issued Accounting Standards Update [ASU] 2013-02, entitled Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The ASU amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 220, entitled Comprehensive Income. The goal behind development of the ASU 2013-02 amendments is to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. The amendments to FASB ASC 220 do not change current requirements for reporting net income or other comprehensive income in the financial statements. Essentially, all of the information required to be displayed or disclosed in financial statements already are required to be disclosed in the financial [...]
Including a sample engagement letter. Question: Some of my clients are getting older and are becoming unable to handle their own financial affairs and I have been asked if I could assist them. What is involved and how do I charge for it? Ed Mendlowitz, VPA, PFS, ABV, responds: Many large firms provide “family office” services. This is a complete one stop financial service that helps clients manage their money, pay their bills, collect their dividends and interest, and make sure insurance isn’t cancelled, mortgage, car lease or condo fee payments aren’t skipped, and tax payments paid on time. More from Ed: Seven Ways to Increase Fees in 2013 | 10 Best Practices for Tax Season | Nine Healthy Things To [...]
First: Are your fees high enough? by Ed Mendlowitz, CPA Author of “Implementing Fee Increases” and “The Tax Season Opportunity Guide.” Increase your fees 3-5% at a minimum – to offset your increased costs. Deliver your bill with the return. Call clients before return is sent to explain and give a heads up for unexpected results.
Not when, but how? Question: I want to improve my firm’s review and quality control. Do you have any suggestions? Ed Mendlowitz responds: This is a recurring issue for most firms. Every CPA practice needs quality control. The issue is whether a dedicated quality control (“QC”) person is needed and, if not, how the QC can be done without one. A practice is a business and every business must be run efficiently and profitably. QC is an area that I have found many firms getting tied up in and either spending nothing or much more than they should. More Ed Mendlowitz: FREE INSTANT DOWNLOAD: Sample fee schedule for 1040s | Tax Season Opportunity Guide 2013 | 12 Reasons to Love [...]
Practical accounting and auditing guidance from the Plain-English A&A update service by Dr. Thomas A. Ratcliffe, PhD, CPA EXECUTIVE SUMMARY The accounting and auditing issues that are discussed in this bi-weekly report are as follows: 1) AU-C Section 560: Subsequent Events & Subsequently Discovered Facts – In implementing the clarified auditing technical literature beginning with calendar-year 2012 financial statement audit engagements, auditors will find new guidance that needs to be followed in addressing subsequent events and subsequently discovered facts. 2) AU-C Section 580: Written Representations from Management – The clarified auditing technical literature also contains new guidance associated with written representations from management that are required to be received as an integral part of each financial statement audit. 3) AU-C [...]
15 strategies for a first-time supervisor’s success. Here at CPA Trendlines, Ed Mendlowitz answers some of the toughest questions practitioners can throw at him. He’s the right one to ask. After more than 40 years in the business – building his own practice, running the firm, and eventually selling it to a major regional firm, WithumSmith+Brown, where he remains a senior partner and consultant to professional services clients – he has the answers. We’re happy to have him at CPA Trendlines. Send your questions for Ed here, or chime in with Comments below. More from Ed Mendlowitz, The Practice Doctor Q&A: Why No One Listens to You | Fun Reads for Busy Season | When NOT to Offer a Free Initial [...]
[Free podcast for PRO members] Practical accounting and auditing guidance from the Plain-English A&A update service by Dr. Thomas A. Ratcliffe, PhD, CPA EXECUTIVE SUMMARY AU-C Section 530: Audit Sampling In implementing the clarified auditing technical literature, auditors need to consider the new audit sampling guidance in AU-C Section 530 along with the companion guidance in the AICPA Audit Guide that addresses audit sampling matters. AU-C Section 540: Auditing Accounting Estimates AU-C Section 540 of the clarified auditing literature provides new guidance associated with auditing accounting estimates and financial statement disclosures associated with those estimates. COSO Framework: Looking at Some Planned Guidance Now that the public comment period associated with planned changes to the COSO internal control framework has ended has [...]
[Free podcast] Practical accounting and auditing guidance from the Plain-English A&A update service by Dr. Thomas A. Ratcliffe, PhD, CPA EXECUTIVE SUMMARY: Accounting for Long-Lived Assets: Addressing Impairment Issues When events or changes in circumstances indicate that carrying amounts of long-lived assets might not be recoverable, it is important to remember that these assets need to be evaluated to determine if impairment losses should be recognized. AU-C Section 520: Analytical Procedures As auditors implement the clarified auditing technical literature in calendar-year 2012 and subsequent period engagements, they need to understand and implement new guidance associated with use of analytical procedures in audit engagements. Planned Nonattest Services Changes: Preparing Statements Both the AICPA Professional Ethics Executive Committee and Accounting and Review [...]
Choose intelligently and avoid problems later. by Marc Rosenberg, CPA What characteristics do you want someone to possess before you invite them to be a partner? Related: Compensation Issues for the New Managing Partner | 20 Decisions for Your Firm’s New Partner Compensation Committee | Three Ways to Break Partner Gridlock in an Accounting Firm | What Partners Are Entitled To, and What They’re NOT Entitled To | How to Make Partner? | Why Accounting Firm Partners Are “Popping Prozac like M&M’s” | More…. Leading firms across the country generally choose from the following:
Fast-growing niche attracting more firms and pushing up staffing costs. by Rick Telberg Fueled by demand from new deal-flow in a recovering economy, forensic accounting billings are on track to grow 7% a year through the next five years to $6 billion, according to new data provided to CPA Trendlines. To be sure, the growth rate for the next five years represents a marked slowdown from the last five years, but it remains significantly faster than the 2% projected for CPA firms overall.
Also: New FASB Plan on Private Company Decision-Making Framework; and AU-C Section 320: Planning and Performance Materiality Issues Listen to the 10-minute A&A Update podcast by Dr. Tom Ratcliffe, Ph.D, CPA… … …