I've been working at a CPA firm since I graduated last May. I've been working on audits, reviews, and taxes along with bookkeeping and payroll assignments.
I'm the only person here (of a staff of about 15) who has worked for another CPA firm (and that was just as a tax intern). The partner started out in industry working under a CPA to get her license. Our sense of ethics and the staff competency level is appalling, it feels like every day I’m shocked by something that happens. Among the highlights:
- Clients were encouraged not to report cash income if no 1099 was issued
- A return was knowingly amended with false numbers to overreport income to try to help a client qualify for a bank loan
- Other staff members' PTINs were used to prepare and file returns. My PTIN is on several earned income credit tax returns that do not have supporting documentation. Some of the PTINs used were for staff that no longer work at the firm. The partner refuses to put her PTIN on anything because she says if the client gets audited she can’t represent them if her PTIN is on the return.
- We just finished a review engagement for a construction company. Nobody knew how the percentage of completion method for construction contracts worked. The reviewer and partner did not care to learn and just signed off on my work.
- I was put in charge of an audit for a non-profit organization with almost no guidance or support. Nothing I did was reviewed until I had the audit report finalized, and very few changes were made from what I prepared.
- I was in charge of doing the final tax return reviews on relatively complex returns prepared by staff members hired just before tax season.
- The partner's tax planning skills were so bad she thought a partnership could own S-Corporation shares. This caused the S-Corp to lose their S-corp status.
- The partner thought up and implemented illegitimate tax strategies like converting a company to accrual basis, starting a second company with the same owners as cash basis, and transferring money between the companies at year end. The idea was the accrual basis company could deduct everything paid to the cash company in year X4, and the cash basis company wouldn't have to report it as income until X5.
- Numerous election forms were filed wrong in prior years, leading to a lot of rejected S-Corp tax returns during tax season.
- Some staff were told by the partner to book all meals and entertainment expenses as travel expenses to get around the 50% deductibility rule.
- Numerous prior year business tax returns were prepared that did not match up to financial statements. Things like bank balances or income on the financial statements we supposedly used to prepare the tax return didn’t match to the tax return, and there was no way to figure out how or why there were book tax differences because nothing was documented. This made it very hard to handle do current tax returns, so usually we'd just throw differences we couldn't figure out into loans to shareholders or loans from shareholders.
I actually like the people I work with a lot, but this is a terrible place to develop accounting skills and I am convinced that it’s only a matter of time before the firm finds itself in serious trouble. I feel like I barely learned a thing this past year year. We never use tax workpapers, I haven't really done basic auditing procedures I thought were standard like confirmations (I sent one confirmation letter to a law firm and that was it), and I'm sure I've picked up some bad habits. I'm about to start the interviewing process, and am looking at other opportunities as well. A few questions:
- I’m worried I’m going to have to relearn a lot of things from scratch if I start a new public accounting job. Our tax processes don’t match up at all with the firm I interned at, and I’m guessing other firms do not audit like we do. How concerned about this should I be? How do I address this sort of thing in interviews? On paper I have a year of experience, but I'm pretty sure I don't know a years worth of stuff.
- How do I explain my reasons for leaving after just a year in interviews? I don’t think revealing anything above or badmouthing the firm is a good idea, should I just say it wasn’t a good fit?
- A lot of CPA firms seem to be looking for people with 2-5 years experience. Is there any point in applying to these positions?