Five Things to Keep You Awake at Night, from the Incoming AICPA Chairman [VIDEO]

Change is coming hard and fast.

Paul Stahlin, regional president at Skylands Community Bank in Somerville, N.J., takes over the top spot of the AICPA in October from Bob Harris, a Florida CPA firm owner.

In this impromptu 12-minute video, Stahlin outlines his views of the profession’s — and the institute’s — biggest challenges and opportunities.

He starts with five hot topics:

  1. Some 120 countries are already on IFRS, he notes, suggesting that it’s “critical” U.S. CPAs get up to speed.
  2. Private company financial reporting standards (don’t call it “Little GAAP”) could pose a whole new set of complexities for accountants at 29 million U.S. companies.
  3. Amidst all the changes of the last decade, it’s time, he says, for the AICPA to revisit the “vision” for the profession.
  4. The CPA exam gets its biggest refresh in January since going online, and will include international standards.
  5. Last, but not least, he’ll be doing a lot of explaining to members about the new IFRS certificate the AICPA is launching.

He covers a lot more ground in this Q&A. But if he has one overall message for CPAs it’s: You ignore global forces at your peril. The world is simply too small, too interconnected, to rapidly changing, and too inter-dependent to stick “your head in the sand.”

And, yes, he sees foreign accountants raring to compete for the rich markets served by U.S.-bound CPAs.

If you’re not worried yet about competition at the China price, you should be.

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Posted on July 1, 2010
Filed Under BSG [CPA TRENDLINES] | 3 Comments

IRS ’10,000 Letters’ Program Angers CPAs

Intrusive and intimidating IRS initiative.

by William Stromsem, CPA, JD

Stromsen

Stromsen

CPAs are complaining about an intrusive and intimidating Internal Revenue Service (IRS) initiative that began in early January when the IRS started sending “over 10,000” letters to tax return preparers (commercial and professional), with follow-up visits to “thousands” of letter recipients. This is part of an IRS program to be sure that preparers are “assisting clients appropriately” and part of Commissioner Shulman’s overall effort to increase oversight of return preparers. The IRS may intend this as an encouragement to do a better job, but CPA practitioners see this as poorly timed and intimidating during the busy tax season as they seek to apply the tax law correctly to client situations.

…continued at the AICPA Corporate Taxation Insider:  IRS ’10,000 Letters’ Program Angers CPAs.

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Posted on January 28, 2010
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Survey Results: CPAs Are Not Quite Ready for FASB’s GAAP Codification

Early results are suggesting that most organizations remain unprepared for the biggest chgange in GAAP in 50 years.

After years in the making, the Financial Accounting Standards Board (FASB) on Wednesday, July 1, will launch the new GAAP (Generally Accepted Accounting Principles) codification.

That said, today’s results from working CPAs and finance managers are all the more interesting:


Don’t be alarmed if you’re only dimly aware of the GAAP codification project. Apparently other CPAs are too. One poll showed only about one in three accountants had looked into it. Another found less than half of all CFOs and senior comptrollers had even heard of the codification project

To be sure, GAAP itself isn’t intended to change, but its structure and presentation is changing significantly. Will you be ready? Join the survey here.


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Still, it’s probably the biggest change in the structure and organization of GAAP “in over 50 years,” according to Mara Bruce, audit manager at Schneider Downs, the regional CPA firm based in Pittsburgh, Pa.

While it isn’t intended to change U.S. GAAP, this reorganization will change how accountants refer to guidance in financial statements and any underlying memos and research, Bruce said. “It’s time to start to learn to navigate through the codification, so you aren’t left in the dark.”

“U.S. GAAP will be completely reconfigured in a way that will vastly improve the ease of researching U.S. GAAP issues, superseding existing authoritative literature, including FASB’s original pronouncements,” FASB Chairman Robert Herz has said. “Preparers and auditors of financial statements need to familiarize themselves with the changes so that they are ready for
the switch.”

Join the survey; get the results.

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Posted on June 24, 2009
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AICPA Leaders Prepare for Massive Regulatory Reform

Financial system rules and regs take the spotlight at AICPA 2009 Spring Meeting of Council.

“I firmly believe that any sound solution to the severe economic challenges facing our country will require the insights and contributions of the CPAs in this room… and in every corner of our great nation,” AICPA Chairman Ernie Almonte said at the opening of the meeting.

The Journal of Accountancy reports today:

Mark Peterson, AICPA vice president, governmental and public affairs, said he expects Congress to begin to work through numerous proposals aimed at closing gaps in financial regulation. The various proposals may be pulled together into a larger reform bill, Peterson said. He predicted Congress would then address the idea of a systemic regulator-an entity that could oversee the financial market as a whole.

Regulatory areas the AICPA is focusing on include broker-dealers, hedge funds and investment and hedge fund advisers. For broker-dealers, the AICPA supports continued registration and regulation by the SEC and Self-Regulatory Organizations (SROs). The Institute also believes that auditors of public broker-dealers and non-public broker-dealers that perform either clearing or custodial functions should be subject to registration, inspection and enforcement by the PCAOB.

The AICPA also supports enhanced regulation and registration of hedge funds by the SEC, with the establishment of a “de minimus” threshold that exempts smaller investment vehicles such as investment clubs. Regulation, the Institute is recommending, should be carefully crafted not to impede beneficial, private capital-raising activities. The Institute also supports a requirement that registered hedge funds obtain annual audits by independent public accountants.

For investment advisers/hedge fund advisers, the AICPA believes all investment advisers currently subjected to registration with the SEC should continue to be regulated under the Investment Advisers Act of 1940. The Institute supports the repeal of the current “private adviser exemption,” which would subject hedge fund advisers to SEC regulation. The Institute supports a proposal by SEC Chairman Mary Schapiro to require all investment advisers with custody of client assets to undergo an annual “surprise” third-party examination to confirm the safekeeping of those assets. And the AICPA also favors the performance of procedures to evaluate the effectiveness of the controls the adviser has in place over its custodial functions.

In addition, the AICPA is recommending that in order to provide evidence that a custodian has controls in place to identify each client’s assets, every custodian should be required to retain an independent public accountant to review and report on the effectiveness of the custodian’s internal controls related to its custodial functions, which would be made available to the custodian’s clients.

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Posted on April 27, 2009
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AICPA, Intacct Deal Could Bring Cloud Computing Down to Earth for CPAs

Venture gives Intacct access to millions of small and mid-sized businesses through CPA channel.

Cloud computing, software-as-a-service, or web-based software — whatever you call it — has long been evolving as the next step beyond CD platters, downloads and endless versioning. With the AICPA deal, Intacct (a dramatic business story in it’s own right) may get the push it needs to challenge Intuit, Sage or Microsoft among small and medium-sized businesses.

But more than that, the AICPA’s imprimatur on a SaaS model could well accelerate adoption of the delivery method, overcoming a common stumbling block — the reluctance of CPAs to be pioneers. With the AICPA behind them, CPAs need no longer feel like trail-blazers in adopting and recommending cloud computing.

Here’s the full news release: Read more

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Posted on April 7, 2009
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Madoff’s Auditor… Doesn’t Audit?!

AICPA: Madoff’s auditor claimed it didn’t do audits. Ethics probe launched.

Friehling & Horowitz, the small New York auditing firm that certified the financial statements of Bernard Madoff Investment Securities, has been telling the AICPA for 15 years that it doesn’t perform audits.

By denying it did audits, the firm avoided reviews by the AICPA. New York is one of only six states that doesn’t require accountants to be peer-reviewed. “The plain fact is that this group hasn’t submitted for peer review and appears to have done an audit,” said AICPA spokesman Bill Roberts, noting the Institute has now launched an investigation into the firm.

Because of the Madoff scandal, New York State is moving to join the ranks of peer-review states.

Read more

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Posted on December 18, 2008
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SEC Officially Mandates XBRL [UPDATED]

Welcome to “The Age of Transparency.”

UPDATED: 5:50 pm to add AICPA comments

The Securities and Exchange Commission has officially adopted a rule mandating XBRL filings beginning in 2009.

With this rule, the SEC is effectively mandating that all public companies, beginning with large cap filers, submit their SEC reports in Interactive Data format, specifically in XBRL. XBRL software, an evolution of XML, the code the Internet was built upon, makes it much easier to Read more

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Posted on December 17, 2008
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33 Tech Trends CPAs Need to Know

What are YOUR top tech issues?

The AICPA has released a survey, asking members to prioritize into its annual list of  “Top Ten Techs” the technology issues that will have the most impact in 2009.

How many of these are you ready for… ?

  1. Audit Process Improvement — This initiative is about auditing, process documentation, and the utilization of appropriate tools for continuous monitoring and collaborative auditing. Strategies include continuous auditing, management control systems, continuous control monitoring, and remote auditing.
  2. Business Continuity Management and Disaster Recovery Planning — Business Continuity Management and Disaster Recovery Planning are the holistic processes organizations use to mitigate the risks to systems and people when unexpected events occur and include the maintenance of a documented plan that is periodically tested. This process includes identification, prioritization, and documentation of key systems, associated risks, and individuals responsible for ensuring the maintenance of these key systems.
  3. Business Intelligence — Business Intelligence solutions supply information to decision makers at all levels using tools such as dashboards, Key Performance Indicators (KPIs), data warehouses, and proactive alerts. Read more
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Posted on November 21, 2008
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Bob Bunting on Leadership: Four Crucial Ideas

What you need to know to make your firm more effective.

What are today’s best leadership strategies? Join the study; get the answers.

by Rick Telberg/At Large

In these treacherous and tumultuous times, the difference between winners and losers – survivors and casualties — may well hinge on the qualities of leadership.

Some firms and finance organizations are already falling by the wayside. Others are clearly gaining new and powerful competitive advantages that could last for years. Some will flourish; some will perish.

But how do you navigate this transformational era? And how do you insure your own success and survival?

We took our questions to Bob Bunting (pictured), one of the profession’s most respected authorities on leadership.
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Posted on October 27, 2008
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