Interviews

pwc tim ryan

Talking About Race, Mega Lawsuits, That Oscars Screw-up and More: A Conversation With PwC’s Tim Ryan

Most people would look at the year PwC Chairman and Senior Partner Tim Ryan has had and think, “That’s rough.” After two killings of black men by police officers and the killing of 5 Dallas police officers last summer, Ryan told Fortune in February that he scrapped his plans and, “got the team together and […]

KPMG UK Succumbs to Millennials’ Bellyaching on Slow Recruitment Process

Millennials detest many things. This list of things would include: slow wifi signals; conventional produce, talking on the phone, check books, high fructose corn syrup, cars, shopping in a physical store, albums, coal, gluten, movies that don't stream on Netflix, being called a Millennial, and Millennial stereotypes, just to name a few. But perhaps one […]

That Time an Accounting Firm Recruiter Told Me That My Personality Sucked

The only thing worse than sweating through your suitcoat in an interview? Not getting the job. The only thing worse than not getting the job? Getting a rejection letter. The only thing worse than that? Getting a four minute long voicemail from a Big 4 recruiter explaining that you didn't get the job because, “Yeah, […]

What Career Questions Do You Have for Facebook’s Controller?

In this day and age, few companies have the visibility and prestige of Facebook. Yes, you have to block your Dad’s political rants, but forget all that. Facebook is a technology company working to change the world as we know it. Changing the world involves a lot of numbers that have nothing to do with […]

The Hottest Silicon Valley Accounting Startup: A Conversation with inDinero Founder Jessica Mah

One of the biggest distractions for small-business owners has to be maintaining their books and their accounting. Attaining a firm for the business might be too expensive an endeavor, yet handling it by yourself takes away valuable time from growing your core business. Enter inDinero: a one-stop shop for all your bookkeeping needs. The company […]

From Public Accounting to Conversations as Content: An Interview with ReplyAll’s Ari Gold

Ed. note: This is the first of a series of interviews with accountants who have started or own a business. Whether it's a CPA firm, a coffee shop, or a mobile app, we're talking to accountants that have an entrepreneurial streak. If you want to suggest an accountant-turned-entrepreneur for this series, email us.   A […]

Here Are Just a Few Questions You’ll Be Asked in a Big 4 Interview

Our friends over at Vault are still working on their massive survey of accounting professionals and if you haven't yet gotten on that bandwagon, please do so here. It helps them help you, or something. Only Big 4 and other "top" firms need apply. Don't worry CBIZ people, you're invited to the party. They recently […]

The Real Reason Millennials Can’t Find Work: They Stink!

Ah Millennials. They are almost as much fun to talk about as working women and people of non-causasian descent. Apparently, some of the kids are having trouble finding jobs. Mostly this doesn't apply to the fascinating field of accounting as there are plenty of jobs to go around and nubile warm bodies are always needed […]

Scott London Talks About Relationships, Rolex Watches and How He Hates that Parking Lot Picture

ICYMI, MarketWatch interviewed Scott London the other day — which I suppose was a good idea since interviews might get a bit more difficult after London heads off to prison to serve his 14 month sentence next month. In the interview, London comes off as approachably remourseful, almost like a grandma apologizing to her heirs […]

Ex-KPMG Partner Who Gave Insider Tips to His Former Golf Buddy Is Going to Talk About Ethics Before He Goes to Prison

For the low low price of $158, you can sit in on a live video interview with fallen star Scott London, who will be giving insight into the importance of ethics before he heads to prison due to his the ethical deficiency that led him to profit off insider tips he gave to his golf […]

If You Can’t Get a Job, It’s Probably Because You Suck at Interviews

It's really helpful that we have all these survey results to count on otherwise we'd have no idea what the heck is going on. Here's the scoop from CGMA Mag: Job candidates appear to have brushed up on their résumé skills, but they’re still struggling to come off as polished in a job interview. That’s […]

Contrary to What You May Have Heard, Thank You Notes are Still Appreciated

Are post-interview thank you notes absolutely required? No. Neither is brushing your teeth before the interview, that doesn't mean it's a good idea to forgo either. In this recent piece from CGMA Mag (I know, I know), Ken Tysiac discusses the importance of the thank you: Candidates should display their gratitude for the interview and […]

Accounting Career Conundrums: Put Down the Pot or Take a Gamble on Another Offer?

Sometimes I feel like I don't know. Sometimes I feel like checkin' out. I want to get it wrong. Can't always be strong. And love it won't be long… call us Ultraviolet, we're here to light your way. If you have a career question, life question, ethics question and/or dumb question for us, go ahead […]

Exclusive: Inside the Mind of an Elijah Watt Sells Award Winner

Back when I worked in HR for a public accounting firm, it was common to receive and send out requests for best practices in employment policy.  Such information is often shared freely across non-competing firms all in support of advancing people initiatives within the profession. Most often I was (and still am) a Go-Giver in […]

The Accountant’s Definitive Guide to Interviews, Part Two

Last week I talked about everything you need to do to prepare yourself for an interview. The night before and the day of an interview can easily trip you up if you’re not ready. Hopefully this guide will help you along the way. As always, share your comments below.    THE NIGHT BEFORE Carving some […]

The Accountant’s Definitive Guide to Interviews, Part One

Continuing in efforts to best prepare you for your next job (maybe one you’ll land through GC Jobs) I wanted talk about interviewing. By this point you have a nice polished resume and well worded cover letter. You networked your ass off (or called back one of the 15 recruiters that calls you every week) […]

Is There a Hidden Message in This Interview with Grant Thornton’s Stephen Chipman?

As we've mentioned on several occasions here, when the media profiles Big 4 bigwigs, the revelations are far less interesting than, say, a movie star-governor. If touchy subjects are addressed, they are glossed over fairly quickly to move on to charity work, perseverance, or family life. It's like a heart-warming after-school special. Grant Thornton CEO […]

The Most Interesting Thing We Learned in This Interview with PwC’s Head of Corporate Responsibility Is That She Lives in the Old Playboy Mansion

One of our least favorite things to do here at GC is to read profiles of so-called leaders – I say "so-called leaders" because there's a bajillion of them – in the accounting profession only to find that there's nothing particularly interesting in the interview. Don't get me wrong, personal stories are fine, but these […]

Four Things to Remember Before You Leave Public Accounting

This is our second submission from the stable of Going Concern freelancer candidates. The following is by Bob Loblaw. Notwithstanding a few e-mails I’ve written in the past that had a wider circulation than intended, this is my first piece of journalism (Ed. note: relative term). With that in mind, it’s important to my unpaid […]

So…Your Mother-in-law Is a Partner at a Competitor of Your CPA Firm…

Perplexed by corporate fashion dos and don'ts? Need remedies for comp/bonus anxiety? Are you an auditor that needs a go-to quip for those relatives who want help with their taxes? Email us your questions and we will answer them in order of stupidity. I have an upcoming interview at a large firm, but in one of […]

Here Are a Few Ridiculous Things Deloitte’s Punit Renjen Said in a Recent Interview

In the past, we've called attention to some of the brutally boring interviews that Deloitte bigwigs have done with various outlets. Joe Echevarria. Barry Salzberg. Deb DeHaas. We read these so you didn't have to. You're welcome. Today, however, we read an interview with Deloitte Chairman Punit Renjen that wasn't half bad. It was done […]

We Read Another Vapid, Metaphor-riddled Interview with a Deloitte Bigwig So You Don’t Have To

Communications teams at accounting firms, particularly the Big 4, have a difficult job. And for the most part, they're nice people. I've talked to plenty of them. NO! I'm being serious. They work for private companies that are notoriously secretive, newly regulated, but still have come under heavy scrutiny as capital market servants, thus, leading nosy […]

We Read This Awful Interview with Deloitte’s Joe Echevarria So You Don’t Have To

You don’t have to be Bob Woodward to recognize the formulaic nature of the CEO interview. Reporter goes to CEO’s office, asks loaded questions about the issues of the day, describes the view from the office, elaborates on the person’s exercise regimen, humble (or not so humble) beginnings, people they admire, yada yada yada. Cripes, reading these things makes you want to shave with broken glass but hey! editors get in ruts just liwe’re stuck with the puff. By extension, interviews with Big 4 CEOs are worse because they typically occur with General Counsel sitting in the next room zapping their genitals every time a question is asked that necessitates “I can’t comment on that.”

Today’s example comes courtesy of Reuters who interviewed Deloitte’s Joe Echevarria. What prompted this little chat was the PCAOB’s release of Part II of the firm’s 2008 inspection report. It wasn’t exactly a flattering portrayal of a firm who, when asked to brush up on their audit skills, basically told the PCAOB to drop dead.

Accordingly, the firm is running damage control and that involves getting Joe E. in front of some friendly reporters (read: not Jon Weil or Francine McKenna).

Recently faulted by the main U.S. auditor watchdog, Deloitte has told its professionals that skepticism should be the No. 1 focus during the upcoming auditing season for annual financial reports, CEO Joe Echevarria said.

“I know there’s a heightened awareness about professional skepticism in the firm,” he said. “It’s going to take a while for heightened awareness to manifest itself in actions and documentation because humans are involved here.”

The natural follow-up question here would be, “But Mr. Echevarria, the PCAOB asked you to fix things in 2008-2009, are you saying that you’re now just ‘manifesting itself in actions’?” but that brings out the zapper. That’s okay, we’re all used to it. You know what else we’re used to? Talking about the “expectations gap”:

There is an “expectations gap” between what auditors do and what the public expects, but auditors do have an obligation to detect and report material fraud, Echevarria said.

Echevarria is also asked about auditor rotation, IFRS and (for some odd reason) its settlement over the Adelphia fraud in 2005. Why not ask about the swinging insider trading scandal? What about Taylor, Bean & Whitaker? What about associates sneaking bloggers into the downtown W? WHAT ABOUT THIS FAUX TARA REID MARRIAGE? People want these all-important questions on the record and yet it never happens. Sigh.

By the way since it’s obvious that some of you care about these details, Joe is from the Bronx and his office is in Midtown.

Deloitte pressing for more skeptical audits (God, the headline is even awful) [Reuters]

Grover Norquist Denies Having Republican Congressional Members By Their Pubes

Republican Party HMFIC Grover Norquist was on 60 Minutes last night and Steve Kroft did his best to pull one over on him but as you might expect, GGN took all the questions like the K 12th Street gangsta that he is.


Lots of great moments to note. Some of my personal favorites:

1. Bob Dole’s face at ~1:30.

2. Newt Gingrich’s horrendous handwriting

3. Rat heads in the Coke bottle are quite a stunning image.

4. Two words: Grover, Babe

5. Let’s be real here: The President of Americans for Tax Reform doesn’t take the metro.

And Jesus, is Alan Simpson a grumpy old coot or what? Other observations are welcome at this time.

Freaked Out Recruit Needs Fashion Tips for PwC Leaderhip Program

Ed. note: Have a question for the career advice brain trust? Email us at advice@goingconcern.com.

Subject: Career Emergency

Well, not really. I’m just freaking out.

I have an office visit with PwC tomorrow. I’m doing a leadership program with them in two weeks. From what I’ve read online, office visits consist of interviews; however, the recruiter said dress for tomorrow is “business casual.” Can I really show up to an interview in khakis? I’m worried as small as wearing the wrong thing could ruin a potential internship offer. Gotta love the superficiality of public accounting. So do I rock a suit despite the recruiter saying busineisk underdressing for an interview?

Thanks in advance,
Freaked out junior

Dear Freaked Out,

No reason to panic, that’s what GC is here for. Since Caleb’s work attire is best suited for the pool these days (aka his “working office”) he asked that I respond to your message.

First off, congratulations on earning a spot in PwC’s two week leadership program. You are correct that there will be interviews at one point during the program, but you should also be viewing the entire two weeks as an interview. You will be evaluated throughout the period – how you interact with your peers; how you involve yourself in the group discussions; how you interview during the formal interview portion. The PwC recruiters will not only be making their own observations but they will also be soliciting feedback from the younger staff professionals who volunteer throughout the weeks. Be cognizant of the fact that every PwC professional you speak to could influence whether or not you receive an offer for the following summer.

Now – back to fashion. Unless you heard specifically from someone at the firm that interviews will be on the first day, you needn’t worry about suiting up tomorrow. They (the recruiters) want you to succeed, so they will tell you in advance about when the interviews will be. That said, it is always wise to make a positive impression on the first day. Below are a few tips on making sure you’re on spot for the first day:

Business casual: There is business casual and then there is public accounting business casual. The latter involves a wrinkled blue Oxford dress shirt and a pair of semi-pressed khakis. Sure, this counts as business casual, but…why? Do yourself a favor and avoid mimicking the Best Buy uniform on your first day.

My advice: If the recruiter said no suit, then don’t wear one (step 1 to receiving an offer is following directions). But it’s possible to have your business casual lean towards business professional without crossing the line. Go with either A) a suit (matching jacket and pants) or B) blue blazer with either grey or olive dress pants or khakis and then match with a pressed button down shirt. Avoid the plain white shirt if you can, as these are best paired with ties and you’re leaving yours at home for the day. The shirt you wear should work well with and without the jacket. These outfit options give you the ability to quickly “dress down” by leaving the jacket on the back of your chair during informal ice breakers but also allow you to quickly formalize yourself on the off-chance you’re meeting with a partner.

Additional tidbits:

• Brown/black – brown shoes and belts generally match with khaki better than black, but wear what you have and what you like. Also, make sure your shoes are polished.
• Suit/blazer jackets – double check to make sure the pockets and vents are open. Any string keeping a pocket closed is left over from production and is meant to be removed; it will come out rather easily. Also, remove the suit’s brand name tag from the sleeve if you haven’t already – only you should know your suit is Hugo Boss or JoS. A. Bank.
• Check the weather – if there’s a probability for rain, bring an umbrella. Don’t chance getting stuck in a summer storm.
• White socks: Just…don’t.

Any other advice from the peanut gallery? Share them in the comments.

PwC’s Dennis Nally Reminds Everyone That Audits Aren’t Designed to Detect Fraud, Wants to Meet the Pope, Isn’t Interested in Joining You for Hot Yoga

The Financial Times published an interview with PwC International Chairman Dennis Nally over the weekend and we learn a few interesting things about DN that you probably didn’t know. For starters, he’s very aware that his firm is in a tussle for title of the largest professional services firm ON EARTH, “We’re in a real dog race to continue to sustain our leadership position as the largest professional services network in the world,” he told the FT. Of course this gives us the impression that Denny doesn’t believe that P. Dubs has relinquished the Biggest of the Big 4 title, as some other CEOs have claimed.

And as you might expect, there are various softening questions thrown around, including:

1) Leaders he admires – he wants to meet The Pope because “[Nally] seems impressed by the feat of co-ordination.”

2) Feats of strength – He practiced hot yoga to “strengthen his golf swing” but gave it up because “I found that you had a tendency to over-workout your muscles.”

Despite those little tidbits, Helen Thomas manages to get under Nally’s skin a little when she asks if “auditors should rightly find themselves in the line of fire” when fraud or “disingenuous” accounting occurs:

Mr Nally crosses his arms across his monogrammed shirt, for the first time looking a touch defensive. “There are professional standards out there [and] an audit is not designed under those standards to detect fraud,” he says, pointing out that detecting fraudulent behaviour rests on other indications including a company’s governance, management tone and control systems. “The reasons it has been done that way is because, while we always hear and read about the high-profile fraud, the number of those situations that you actually encounter in practice is very de minimis.

Notice that he doesn’t directly address the “disingenuous” accounting. Examples which might include, say, AIG and Freddie Mac, but rather addressed fraud which is easy to fall back on, since the expectations gap is so blatant (something he has mentioned before).

His statement also appears to indicate that he feels situations like Satyam are immaterial, unless by “de minimis” he intended to mean “rare in occurrence.” But, then again, I suppose semantics are also de minimis.

The man who would be biggest [FT]

How Can a Prospective Intern Relate to a Partner During an Interview?

Welcome to the International Women’s Day edition of Accounting Career Emergencies. In today’s edition, an accounting major at UI and prospective Big 4 intern is having trouble relating to partners in his interviews. Can we help this future coffee gopher come up with some better ice-breakers?

Recently been fired? Need a contingency plan? Worried about backlash? Email us at advice@goingconcern.comSigh:

Hi GC,

I am a junior majoring in accounting at the University of Illinois at Urbana Champaign set to graduate in May 2012. I am in the process of applying to our school’s MAS program to get my 150 hours to sit for the CPA in the state of New York. Last fall, I had an office visit with PwC in NYC for their Summer 2011 Audit Intern. I was not given the job. A few weeks ago, I interviewed for Deloitte for their Winter 2012 Audit internship in NYC as well. I moved onto the second round but my second round interview was a 30 minute phone call from a partner. I thought the interview went well with him but I was not given an offer. I am now 0/2 in second round interviews with the Big 4. What am I doing wrong? I read somewhere about the facial hair article that partners generally do not come into contact with associates much and I am only interviewing for an internship. How can I connect with a partner who seems disinterested in interviewing college kids? I connect easier with HR and managers that do first round campus interviews but it’s hard for me to establish rapport with a partner. I do have another office visit scheduled in mid April for NYC EY-FSO so maybe the third second round interview will be the charm. These are the questions I usually ask managers and partners:

• Where did you see yourself 5, 10 years down the road when you first started?
• Did you take it step by step or did you know you wanted to become a partner?
• What has been your most rewarding moment or biggest accomplishment here?
• What are your plans for the next 5 years and what about the firm’s goals?

[Thanks!]

Dear Intern with no Ice Breakers,

Rather than complain about your lack of partner relations, you should simply be thankful that you’re not a grad assistant at UI. Since you didn’t ask for perspective I’ll let your lack of gratitude slide and address your query directly. Here goes.

You listed four questions that you ask of managers and partners and frankly, they’re terrible. They are trite, predictable and shallow. Plus they’re nearly identical, as they all are related career path. There are other things to consider, after all. Partners and managers want to know that you’ve really got something going on upstairs, not if you’ve read all the listicles on the Internet that have job interview tips. Also, partners are human (well, most of them) so asking them strictly business questions make you seem stiff and impersonal. If you can demonstrate an ability to relate a partner on a personal level, he/she will see you as a team player and someone who has interests outside accounting. You do have interests outside accounting, don’t you?

If you don’t have interests outside accounting: A) GET SOME and B) ask a question that isn’t about career path. What about work-life balance or volunteer opportunities sponsored by the firm or studying for the CPA exam and working OR what he/she likes best about their job? ANYTHING other than re-asking the question you just asked.

So next time you go into an interview and it comes time to ask a partner or manager questions, ask a diverse set of questions. If your questions are one a single track, your interviewer will think your brain is on a single track.

Accounting News Roundup: Southwest Loves AirTran; PCAOB Starts Negotiations with European Counterparts; Debunking the ObamaCare Tax on Home Sales | 09.27.10

Southwest Airlines to Buy AirTran [WSJ]
“Southwest Airlines agreed to acquire AirTran Holdings Inc. for $1.4 billion in cash and stock, the first major merger among healthy U.S. discount carriers.

The proposed deal follows Southwest’s failed effort to acquire Denver-based Frontier Airlines earlier this year and would revive its stalled efforts to launch international services by accessing AirTran’s network to the Caribbean.”

Troubling Trades Found Ahead of Flash Crash [DealBook]
“The Chicago data firmed strange patterns — dubbed “crop circles” — in stock market data around the flash crash on May 6 has put together a new analysis that it says backs the theory that one or more trading firms was intentionally trying to flood exchanges with orders.

The firm, Nanex, hopes the Securities and Exchange Commission and the Commodity Futures Trading Commission will be able to address its analysis in their long-awaited report on the flash crash due to be published before the end of this month.”

Treasury Said to Prepare AIG Exit, Repayment Plan [Bloomberg]
“The U.S. Treasury Department may announce plans as early as this week to return American International Group Inc. to independence and recoup taxpayer money from the insurer’s bailout, according to three people with knowledge of the talks.

The biggest part of that strategy is for Treasury to begin converting its $49 billion preferred stake into common stock for sales by the first half of next year, said the people, who declined to be identified because the negotiations are private. The timing of an announcement depends on the pace of talks between regulators and the New York-based insurer, and discussions may extend beyond this week, the people said.”

PCAOB Begins Negotiations With European Regulators [Compliance Week]
“Now that Congress and the European Union have removed a big obstacle to international audit inspections, the Public Company Accounting Oversight Board is trying to forge some new relationships with its counterparts overseas to get back on track.

PCAOB spokesman Colleen Brennan said the board is beginning to negotiate with various audit regulators in Europe to see how it can proceed in each country inspecting audit firms that audit financial statements in U.S. capital markets. The board is hopeful it can reach bilateral agreements with individual regulators to perhaps gain access to work papers that will enable the board to fulfill its inspection mandate under the Sarbanes-Oxley Act.”

IRS Offers Olive Branch to Business [CFO]
“The Internal Revenue Service has taken taxpayers’ comments to heart and revised its proposal on uncertain tax positions, in a way that is much more favorable to corporations. The final Form 1120, called Schedule UTP, and its instructions eliminate two draft requirements that companies argued were particularly onerous: the calculation and inclusion of a maximum tax adjustment for each position, and disclosures around positions that are not subject to an accounting reserve.

IRS Commissioner Douglas Shulman announced the release of Schedule UTP on Friday, in a speech delivered to the American Bar Association in Toronto. The agency has instituted a five-year phase-in period for filing the schedule, said Shulman.”


Job Interview Is Where Most Mistakes Are Made, According to Survey [FINS]
If you make a faux pas during an interview, rather than faint consider five suggestions that FINS has to keep your hopes alive.

PwC names industry leaders and academics as non-execs [Accountancy Age]
“Dame Karen Dunnell; Sir Ian Gibson; Professor Andrew Hamilton; Sir Richard Lapthorne; and Paul Skinner and come from the fields of business, academia and the public and professional services sectors.

They will sit on a newly-formed public interest body where they will be joined by partners fo [sic] the firm but have a majority.”

Cloud Computing: What Accountants Need to Know [JofA]
A crash course.

Finding Surprises in the Small-Business Jobs Bill [You’re The Boss/NYT]
“Most of the controversy surrounding the small-business jobs bill that cleared the House of Representatives on Thursday — after nearly a year of discussion — concerned a $30 billion small-business lending fund to be established by the Treasury Department.

But like most of the legislation, the lending fund is a temporary fix. It will make investments in banks for just one year. The tax breaks in the bill, worth about $12 billion, are mostly good for a year or two.”

Dodd-Frank Lets Small-Company Auditors Off the Internal Controls Hook: Putting a Partial Lid on the Sarbox [Re:Balance]
Jim Peterson reflects on Dodd-Frank’s ‘get out of jail free’ for small company filers.

Would “ObamaCare” (Health Care Reform) Tax the Sale of Your Home? Probably Not. [Tax Foundation]
“There has been a story and an e-mail floating around for some time claiming that the recent health care reform bill (PPACA) would impose a 3.8 percent “sales” tax on the sale of every home. The e-mail has been rightfully debunked by the usuals (Factcheck.org and Snopes), but here is what the bill would actually do regarding taxation of the sales of homes.”

Pastors Defy IRS On ‘Pulpit Freedom Sunday’ [ABC News]
“The pastors, along with the Scottsdale, Ariz.-based nonprofit Alliance Defense Fund, planned today’s event as a reaction to a law stating that churches are not allowed to support politicians from the pulpit, according to the ADF.

The growing trend is a challenge to the IRS from the churches, and may jeopardize their all-important tax-exempt status. But some pastors and church leaders said they are willing to defy the law to defend their right to freedom of speech.”

Aspiring Big 4 Intern Needs Questions to Impress Pants Off Interviewers

We’ll kick things off a little early today as a young inquisitor has to prep for a big interview today.

Have a question about your career? Wondering if you should go back to your old firm after they dropped you like a sack of spuds? Concerned that the hours you’re working may cause you to blackmail your lover? Stop! Email us at advice@goingconcern.com before you do anything so we can put your problem before the masses prior to you doing something stupid.

Back to our interviewing intern:

What would you say could be a stomping question for these Big 4 kids? Got the internship interview Monday! I think I need/want one of those.


We had no idea what “stomping” meant, so we asked for a clarification:

I’m looking for a thought provoking question regarding the industry or the big 4 in particular. I would like an astute question to ask.

Okay, then. You want to smart, up-to-speed on the world around you, without coming off insincere or patronizing. We can help.

Despite your curiosity, you must avoid questions about money, hours you’ll be working, drug tests, hooking up with superiors and so on and so forth at all costs. We realize the temptation to inquire about the frequency of happy hours and what the hottie ratio is but please refrain from broaching these subjects.

Now, then. It’s extremely important that you ask questions that are specific to the firm with whom you’re interviewing. There are tons of thought-provoking questions out there but if you really want to grab someone by their pin-striped ass and get them to look impressed, it will help for you to devise a question that is specific to that firm, as well as the local business environment of the office’s city that you’ll be living in.

This could require some research on your part. For example, find out if there are some local charities that the firm partners with regularly and inquire about what activities employees participate in (this is where the sincerity helps) and if there are any events scheduled during your internship. This will demonstrate your desire to participate in extra-curricular activities and your interest in giving back to the community.

Another example is to be familiar with some of the major players in the business environment in your city. If you brush up on the local business news and ask a relevant question to a recent event, your interviewers will recognize that you’re cognizant of the business environment and that you’re interested to see what the angle is from the firm’s perspective.

And posing the question to the appropriate person is important. Asking the second-year associate that’s greeting you at the interview about the potential in the venture capital space probably isn’t be as effective as asking a manager or partner the same question. Also, be careful with wonky technical questions. Sure, it may help you look smart but it could also backfire if the question comes off manufactured and awkward.

Bottom line – your questions need to be sincere and detailed. It will show your interviewer that you’re genuinely interested in their firm (and not thinking about the next firm you’re meeting) and also that you took the time to prepare. Oh, and smile for crissakes. It will make your question sound far more pleasant.

Let’s Discuss: Best Accounting Programs According to Recruiters

Yesterday the Journal got into the ranking act with their list of colleges based on recruiters’ preferences. The accounting program rankings aren’t too surprising but we called in the friendly HR professional and recruiting maven Dan Braddock to discuss the rankings. First things first however – the pecking order:

1. BYU
2. Wisconsin-Madison
3. Illinois-Champaign
4. Minnesota
5. Penn State
6. Michigan
7. Maryland
8. Cal-Berkley
9. UCLA
10. Ohio State
11. NYU


What follows is my chat with Dan-o as he tries to break this dorong>: Okay, let’s kick this off. You sent me a link to some WSJ article about the school rankings based on recruiter opinions.
CJN: I did. Personally, I find it hard to take the list too seriously without Texas-Austin or Notre Dame on it.
DWB: It makes perfect sense as to why they’re not on the list.
CJN: Explain, that sounds like crazy talk.
DWB: This isn’t based on caliber of program; it’s a list of what recruiters find to be the “best” schools. Take a look at the list of Best Accounting Schools. First, those schools are huge; many of them are state schools. Recruiters get the most “bang for the buck” out of schools like this. Second, if you mapped these out, they’re schools that can can service as feeder programs for multiple offices. For example, Deloitte can visit UCLA and find potential candidates for their California and west coast offices. This removes the necessity to visit several smaller schools across the same geogrpahic region. Penn State services Philly, Pittsburgh, D.C., Baltimore, New Jersey, and New York City. Lehigh University in eastern PA is a much better accounting program than Penn State, but has a smaller geographic reach and a smaller pool of students.
CJN: But doesn’t the #1 school, BYU, buck that idea completely? Their enrollment is small by comparison and Salt Lake City is a relatively small market
DWB: BYU has more than 25,000 undergrads from every state in the country – again, national reach.
CJN: Fine but why no UT? The Texas market is huge and has national reach.
DWB: I admit, Texas is the one school that I was shocked not to see on the list – on the surface, it is large in size, has a well respected business program, and is nationally known. But dig deeper and it makes sense. Of their 38,000 undergraduates, only 8.5% are from outside the state of Texas. So applying that same percentage to the number of undergrads in the business school (4,500) that’s about 380 students. How many of them study accounting? My guess is not many. That said, accounting students interested in offices elsewhere (Chicago, LA, NYC) should have no problem landing interviews, as the local Texas recruiters from the Big4 blanket UT at Austin.
CJN: And Notre Dame? Why are they MIA? John Veihmeyer has to be pissed. And not just about the choke against Michigan.
DWB: Hahaha. I’m sure he voiced his frustration about both. He’s probably having nightmares about the most recent flop in South Bend. Again, it’s all about size of program. National name, yes, but when your business program is ~2,500 students in total…Also, remember that these rankings for best accounting programs is not just by Big 4 recruiters. This is everyone. Johnson&Johnson, regional mortgage firms, Disney, etc.
CJN: Interesting
DWB: Obviously there is some kind of balance in play here. As a whole, all of these schools are nationally known and well respected in the industry; there are no schleps on the list. For recruiters, it’s all about efficiency of time and finances. A hotel room and flight to visit a school where hundreds of accounting students are salivating at the opportunity to work for you is impossible to pass up.
CJN: So everyone on this list belongs on it or are there other schools that are missing that should be in the top…11 (?)
DWB: Considering their proximity to one another I was suprised to see both the U of Minnesota and U of Wisconsin on the list but no, nothing too surprising. Since it is college football season, the Big Ten definitely has the SEC beat when it comes to accountants (6 v. 0 on the list). Maybe that’s why they’re better on the gridiron.
CJN: OR maybe it’s because it’s the SOUTH. My guess is that people don’t go to Vandy to get an accounting degree.
DWB: I am surprised not to see a school from the South – no UNC Chapel Hill
CJN: Fair point.
DWB: In closing, I think it goes to show that US News & World Report rankings are not the end all be all for recruiters. Nationally known names, established programs, and large alumni bases go a long way.
CJN: Right. And a good football team doesn’t mean shit (read: Alabama).
DWB: Below the belt, CN.
CJN: Whatevs. Can you explain the pachyderm? B/c I sure as hell can’t.

The Top 25 Recruiter Picks [WSJ]

Accounting News Roundup: The Problem with American Apparel’s non-CPA CFO; Diversity Still Lags in Accounting; Patrick Byrne Denies Insider Trading Accusations | 08.23.10

Potash says in talks for superior deals [Reuters]
“Potash Corp’s board urged shareholders to reject BHP Billiton’s hostile $39 billion offer and said it was in talks with a number of potential suitors for a superior deal.

Potash Corp, the world’s largest producer of potash based in the Canadian province of Saskatchewan, said superior offers or other alternatives are expected to emerge.

Discussions are on with several of these third parties in order to generate superior offers, the company said in a statement.”

How to Shine in a Skype Interview [FINSying across the country for a second round of meetings, you may be asked to interview for a job from the comfort of your living room.

While it might sound less stressful to some than an in-person meeting, such an interview can be filled with landmines for job candidates.”

The Problem With a Non-CPA CFO [FEI Financial Reporting Blog]
Francine McKenna guest-posts over at FEI for the second time, this time discussing the American Apparel situation and noting that 31 year-old CFO might be in over his head.

Goldfarb Branham LLP Investigating Shareholder Claims Against American Apparel, Inc. [Business Wire]
Speaking of APP, investigations are starting, “Goldfarb Branham LLP is investigating American Apparel, Inc. (APP 0.75, 0.00, -0.09%) due to allegations that the company may have issued materially inaccurate statements to investors concerning its 2009 financial results and the circumstances surrounding the replacement of American Apparel’s auditor.”

Movement afoot to increase diversity in accounting industry [Pittsburgh Business Times]
“Sam Stephenson, a partner at ParenteBeard LLC, a Downtown-based certified public accounting firm, brings an interesting perspective to the equation as a black man who has worked in the profession for nearly four decades. During his long tenure, he has seen improvements in efforts to recruit and promote women in the profession, but ethnic diversity still lags behind.

‘We need to bring this issue to the attention of individuals who run local and regional firms because they may not be aware that this is a problem,’ said Stephenson, who serves as a member of the Pennsylvania State Board of Accountancy, which enforces the licensing rules for CPAs. ‘A lack of diversity often means missed opportunities to attract talent and clients.’ ”


Preparer Costs Will Increase Some; Taxpayer Costs Will Increase More [Tax Update Blog]
Joe Kristan responds to fellow practitioner/blogger Robert Flach’s question of how the new tax preparer registration will affect costs for consumers more so than tax preparers.

Gays See Complex, Changing Tax Picture [Dow Jones Adviser]
“Gay couples are taking one step forward, one step back when it comes to their tax rights. Not to mention sideways.

The shifting landscape of new rules and initiatives makes it a big challenge to provide same-sex partners with good tax advice.

In Massachusetts, a successful challenge to a federal law denying gays tax breaks that heterosexual couples get could mean progress, but only if it stands up to an expected government appeal.”

Patrick Byrne Refutes Insider Trading Claims [Forbes]

Five Interview Questions You Should Be Ready For If You’re Looking to Switch Jobs

I received the following question last week from a GC reader:

Daniel,

I don’t know if this is up your professional line of expertise, but could you touch up questions that auditors should expect to get in an interview?
Happy Moanday,
Jeremy

Expert I am not, but I’ll do my best to help you all out.

Interview questions you should be ready for:


1. Why are you looking to leave your current situation?

DWB: Whatever you say, never speak poorly about your current situation. Many people make the transition from public to private; harp on the positives (great people/ great client exposure) but explain that you’re looking to transition into a good private situation.

2. Tell Me About Yourself

DWB: This is not an opportunity to rant and rave; no one cares that you were on the club water polo team in college. Provide a short, organized statement of your education; professional achievements and goals- describe your qualifications for the job and contributions you could make to the organization.

3. Where do you see yourself in 5 years?

DWB: With questions like this, you need to be careful not to threaten your interviewer, as it is likely that they will be your immediate superior and the natural promotion for you in a few years. It’s in your best interest to speak about long term growth with the company. i.e. – “I’d like to position myself in a firm like (Name) where I can learn, grow and be challenged – If I work hard and do my part, then I’ll grow with the firm and my future will take care of itself.”

Your goal should be to make it clear you’re thinking about the company in a long term sense, but not so much that you’re a threat to your soon-to-be boss.

4. What are your strengths?

DWB: Similar to the previous question, this is an opportunity to self yourself to the company. No one wants to hires someone that plans to come in and shake things up (unless it’s part of the job description). Focus on your natural, daily tasks – Team Player, Quick Learner, Efficient, Organized. Convince your interviewer by providing a real world example.

5. What are your weaknesses?

DWB: Do you sleep in on Fridays? Do you smoke 14 times a day? Whatever your real weaknesses are, avoid sharing them at all costs. Focus on the more HR-friendly ones – Trouble Delegating Work- Take too much on for yourself, etc. I suggest providing an example of how you recognize the weakness and what youre currently doing to make the best of the situation.

Author of “Alan the Accountant” Wants Parents to Talk to Their Kids About Offshore Tax Havens

Last week we told you about the most important contribution to children’s literature since Mother Goose, “Alan the Accountant” (download it here).

Alan the Accountant may not be the most traditional book in the “turn the page” sense but it will no doubt get the kids thinking about double-entry at an early age and you can never get the kids started on the career path too early, amiright?

After downloading this gem and reading it a dozen times or so, we felt prepared to discuss it seriously.

We had the distinct pleasure of tossing a few questions at the book’s author, Jinky Fox, to see what sort of plans he has for Alan, how he managed to skip out on his accounting career and why it’s never too early to talk to your kids about offshore tax havens.


So you planned to become an accountant but got “sidetracked into fine art.” A couple of questions related to this: 1) By “planned” does that mean you enrolled in a class, walked in and saw the people, turned right around and walked out? 2) Does getting “sidetracked into fine art” have anything to do with a) your pursuit of a sexy art student b) drugs c) walking into the wrong classroom d) all of the above.

I started an accountancy class and walked out after a year. Not because of the nightlife which was everything I subsequently found at art school and more. Accountants definitely know how to party. Rather I hadn’t been introduced to creative accounting. Now I see those figures differently. They can tell a tale as exciting as a six volume 19th century novel or a four hour black and white Swedish epic. There is an art in the numbers.

We’re still of the opinion that there was a sexy art student. Moving on…You say “The series of books planned for Alan the Accountant will help me examine the exciting world of Accountancy that I turned my back on.” This begs a few more questions: 1) “Exciting?” 2) What have you learned about the profession that surprised you and how will you get the kids interested? 3) What makes you think the accounting profession will embrace you after you abandoned it? Accountants can be a touchy bunch, you know.

Fiction lets writers and readers live different lives. We might not be able to live the life of a 17th century nobleman, but we can read Les Trois Mousquetaires. We might not be pirates but we can read Treasure Island. I am not an accountant, but Alan allows me to explore my life had it taken a different route.

Artists rarely sit on the boards of large companies, but accountants have the keys to these exciting corridors of power. Art and accountancy might seem to be unrelated but there is an unexplored link between them. This has been expressed most famously by Andy Warhol when he said, ‘Making money is art, and working is art and good business is the best art.’

Will accountants embrace Alan? I hope so, and I don’t think that a teenage indiscretion will blight their enjoyment. And anyway, it’s not too late for me to retrain.

Well, we’re on your team and despite what some might say, that’s a decent endorsement. Anyway, getting more serious…In this book, you examine the possibilities for Alan’s happiness, which include his finding of an offshore tax haven. Is this really the example that we should be setting for children? I mean do we really want to be having the “UBS conversation” with our kids at such a young age?

Offshore tax havens are an important part of life. Is it wrong for children to learn that some kids have to say goodbye to their friends and go and live on a British dependency in the middle of nowhere? No, I say! They might be the ones ripped from their beds and flown to a sweltering island, only allowed to go home 90 days a year. Life’s not all ipods and ice cream, we have to be honest!

Have it your way but don’t come crying to us when Fox News gets ahold of this. Next – Here in the U.S., accountants are nearly as revered as they are in the UK. You guys have an awards ceremony over there for crying out loud. Do you think that your book can help bridge the prestige in the UK over the U.S.?

I hope that my little book will bring accountants to the collective bosom of the people. I see a time when Alan the Accountant is the top rated kids’ show on TV. Children of all ages will dream of becoming accountants. Our universities will be so full of accountancy students they will stop teaching all other subjects. Our shops will sell out of calculators, accountants around the globe will be lauded and admired, statues will be built of senior partners and it will all be thanks to Alan.

Honestly, the idea of a Tim Flynn statue is a tad frightening but we like your enthusiasm. Speaking of…More books featuring Alan are forthcoming – what do you have planned? Adventure? Excitement? Adjusting entries?

Accountancy is a field that has not been mined for children’s books before so there is plenty of scope for stories set in the world of high finance. Accountancy is awash with slang and acronyms that are made for children’s books. Titles planned for future editions of Alan’s book include ‘My first investment account’, ‘Adventures in negative growth’ and ‘Darling, come quickly, Freddie just said his first word – EBITDA’

More on Cost Accounting Careers with IMA Chair Sandra Richtermeyer

About two weeks ago, one of our Twitter followers was curious about how someone might land a cost accounting position. We put the question to the group and there was a little discussion but something told us that our inquisitor wa

We recently spoke with Sandra Richtemeyer, Ph.D., CMA, CPA, the Chair of the Institute of Management Accountants for 2010-2011 to discuss cost accounting careers in more detail. In addition to her role at the IMA, Dr. Richtermeyer is chair of the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, Ohio.


Going Concern: We’ll just start off by getting your reaction to our reader’s question – “How would you suggest getting into a cost accounting position?” And the previous post’s comments “WHY would one get into cost accounting?”; “[N]obody likes cost accounting.” and “[I]n its true sense does not exist.”

Dr. Sandra Richtermeyer: We represent the Institute of Management Accountants so we usually place the focus on management accounting versus cost accounting. Cost accounting is one aspect of managerial accounting and when we say “management accounting,” that’s another term that many people don’t resonate with, as there aren’t a lot of positions out there called “management accountant.” You do hear job titles like “cost analyst” and “financial analyst,” so sometimes it is easier to explain these roles.

At the IMA, we like to take a look at the focus inside the organization and really try to look at the broad perspective of management accounting – which includes cost accounting – where people are really more involved with strategic decisions that influence business actions and activities and in much more significant ways than just what people would ordinarily perceive.

The last thing that you said, “does cost accounting really exist?” We certainly see positions called “cost accountant” but they are so narrow in scope and it’s not really reflective of what’s happening with the people that are charged with that important element or aspect of accounting.

GC: So it sounds like cost accounting is a red-headed step-child of sorts – why do you think there are so many misconceptions about cost accounting jobs?

SR: I think because people don’t see the big picture and how information produced in cost accounting and related activities plays a role in many business processes. They typically think of a very narrow scope that’s part of a costing decision or the actual calculation of cost of goods sold, budget variances or manufacturing costs. I don’t think that it is clear how accountants who have costing responsibilities are often working with key leaders in the organization who are determining product or service mix and making critical strategic decisions. They often need to spend a lot of one-on-one time with decision makers or teams to consider different analyses and work through various scenarios to help guide the right outcomes. All too often, cost accounting is perceived to be a stand-alone activity. Rather, it plays a really important role in an organization’s value chain.

GC: That takes me back to the financial analyst job I had and how many different people I worked with providing them with various data and analysis. Communication was a big part of that job.

SR: I think the biggest misnomer is that people don’t realize how important communication skills are for accountants in general and that they are critical for these types of roles. They picture people working independently in an office by themselves perhaps creating spreadsheets or entering information in an enterprise system but there’s so much interaction and people don’t seem to understand that. The concept of a cost or financial analyst being in an internal customer service role is often overlooked as well. It can very much be an internal customer facing role and even extend outside the organization with vendors or players in the supply chain.

GC: Is there traditional path into a “cost accounting” career?

SR: Well, I think there’s a few we can cover:

1) A typical starting point is to get an accounting or finance degree. A few years ago when the economy was stronger, a lot of cost accounting positions were filled by people with finance degrees while the accounting majors were frequently starting in public accounting. In a large company, someone might start in an entry-level position where they work in a more narrow accounting role where they do cost accounting. Alternatively, they may start at a smaller company and have a broad set of accounting responsibilities, with cost accounting being one of those. Smaller companies most likely don’t have job titles like cost accounting or financial analyst, because accountants have to do a lot more. We certainly hope that people who choose this path understand the importance of becoming a Certified Management Accountant because it’s a great credential for someone entering those types of jobs.

2) Many people might start out in public accounting as auditors and they may work with clients that have very specific product and service costing needs. After a few years of working as an external auditor, they might step out of that role and go work for a client and have responsibility that entails cost accounting. That’s not uncommon for someone with 2 to 5 years of public accounting experience. Someone with more experience than that would likely step into a broader role that is closer to a controller or CFO role, depending on the size of the company.

3) People unexpectedly find themselves providing these services. They might have started out as a business analyst and then they might find themselves providing a lot of costing information for people within the organization. The next thing they know, they are a cost accountant – either in title or in substance!

4) It’s surprising to me how many MBAs end up in controller-type positions and sometimes the path to controller, depending on the organization, is through a business or financial analyst position. I talk with a lot of MBAs that want to learn more about accounting because they find themselves essentially doing more and more cost analysis in their roles. The cost accounting piece may not be their entire set of responsibilities but it’s something they have significant responsibility for and they see it providing them with a lot more career advancement opportunities down the road.

GC: So what are some examples of some jobs for those that are interested in cost accounting? Or titles that people can look for when they’re job hunting.

SR: Well, we need to think about job titles and also the words used in a job description because in accounting, the title varies widely depending on the size of the organization. Larger companies have more specific titles and smaller companies tend to have more general titles. Some common titles are: General Accountant; Staff Accountant; Financial Analyst; Cost Analyst; Cost Accountant, to name a few.

Job descriptions likely list responsibilities such as: cost and profitability analysis, maintenance of costing systems, budgeting, interim or internal financial reporting. Often times they are a bit more specific and may include activities related to customer profitability analysis, product and service costing support, or variance analysis. Those are some key words that are going to pop out.

GC: What resources does the IMA provide that are useful?

SR: We have an amazing social network site, LinkUp IMA, for accounting professionals where our members discuss all kinds of accounting topics. This provides a great networking platform for professionals in specific roles to connect with each other and share ideas in an online forum.

We also have many chapters all over the world that allow accounting professionals to meet face-to-face and discuss trends and issues or concerns they deal with in their roles. We also have a strong certification program, the CMA. When someone makes the investment in themselves to obtain their CMA certification, they demonstrate that they are prepared not only for cost accounting, but for the many strategic roles that accountants are involved in. The CMA can provide the basis to launch them into a career path that will help them gain more experience and move into financial leadership roles. Our certification program provides a lifetime of value.

Talking Social Media With the New Jersey Society of CPAs

From the very first day we swapped our totally unprofessional Twitter account for one with less F-words and started finding accountants to follow, we have been constantly impressed with the concentration of accounting folks in social media. But in the constantly-evolving world of Internet communication, there are always a few bright spots that stand out as ahead of the curve, and the New Jersey Society of CPAs’ communications strategy sets itself apart as one such bright spot.

We were able to get a few moments with NJSCPA’s Don Meyer to discuss their strategy, successes and the drive behind their major social media push of the last three years. Operating with three goals in mind – driving member retention through a greater level of engagement for current meorking and learning opportunities for current members; supporting existing membership acquisition programs – the NJSCPA has learned to use the power of blogs and social networking to reach potential, new and long-time Society members as well as CPA exam candidates across the country. Turns out that we got way more insight into the NJSCPA social media brain than we can share here and were terribly impressed by their varying campaigns, daring strategy and dedication to delivering information.


AG: First things first: let’s talk about your social media campaigns. What sort of things are you heavily involved in and why?

DM: We launched our first blog, NJSCPA Exam Cram, about three years ago to help guide student members and exam candidates through the exam process. We’ve been on Facebook for almost two years and have attracted more than 1,800 fans. We developed our page to maintain contact with student members who sometimes change mailing addresses and emails following graduation, but we now find that the page is a valuable source of professional and Society information for members in all age groups. Our LinkedIn group, launched almost two years ago, serves much the same purpose, providing information for our members and a place for them to connect. We jumped into Twitter about a year ago. We currently have more than 700 people following us. Our Twitter page is linked to our news blog, CPA Observation Post. We use those tools to provide daily professional and Society updates, but we also use Twitter and the blog to help NJ accounting firms promote themselves.

AG: Is there anything you’ve tried that hasn’t worked out as well as you’d hoped?

DM: We tried a financial literacy blog, but we couldn’t generate much interest. I think there may be too much competition out there and we couldn’t find the right niche. Our financial literacy Facebook and Twitter pages have not taken off as quickly as we had hoped.

AG: Anything that really surprised you when it comes to social media?

DM: I was not a believer in Twitter before we started using it extensively last year. Now I think it’s my favorite social media site. I think it’s a great tool for disseminating news and information quickly and easily. I’m also surprised how successful our Facebook advertising has been. I was skeptical that anyone on Facebook would click on ads promoting our page, but it’s played a key role in helping us promote our presence.

AG: The NJSCPA Exam Cram blog has been around for awhile (we noticed it quite some time ago) and seems to get a great response. Can you tell us more about how this came about and how you select exam candidates to participate? Do you follow them after they’ve successfully completed the exam?

DM: Many of us involved in the Society’s student outreach programs have never taken the exam, so we felt we needed to get the perspective from aspiring CPAs who had experienced the ups and downs. This way if a student or candidate asked us a non-technical exam question (e.g. in what order should I take each section, how should I study, how do you feel when you fail one part of the exam, etc.) we could refer them to the blog. We started out with one blogger but soon discovered that work and personal commitments would preclude any blogger from posting as often as we would like. So we gradually added more bloggers. At the moment, we have five CPA Exam candidate bloggers and one staff person blogger, Janice Amatucci. We don’t have a set procedure for how we pick our bloggers. We ask student members who have been involved with the Society through one of our various student programs or simply ask for volunteers via email or at events. The first five bloggers all passed the CPA Exam and continue to contribute to the NJSCPA by writing articles, serving as team leaders at student events or attending other Society events. To date, we’ve attracted more than 72,000 pageviews.

You can find the NJSCPA all over the place online here.

NASBA Gives Its Accounting License Library a Makeover

For those of you that aren’t already aware, we implore you to check out NASBA’s incredibly useful Accounting Licensing Library – a comprehensive, continually-updated database that can help future CPAs find a state in which to be licensed and offers accounting firms access to important state data to assist in their efforts across state lines. In other words, the tool’s main goal is to facilitate mobility by bringing all 55 jurisdictions together in one easy-to-use area while offering a one-stop shop for those considering CPA licensure.

We recently got a chance to chat with NASBA General Counsel and Director of Business Development Maria Caldwell about the new ALL.


The new ALL tool features a new section for accounting students, an enhanced state requirement comparison research tool and expanded product information. The refreshed ALL website offers the same features and benefits as the previous site in a more user-friendly format. Users can find detailed licensing information and even use their research tool to determine if their educational requirements meet any state’s licensure requirements without having to click through each state board’s website individually. This is huge for candidates and for NASBA, as it allows them to spend more time dealing with candidate issues and less time pointing candidates in the right direction.

The birth of the ALL actually began within NASBA four years ago as they wanted a single resource for internal use that would take each state board’s requirements and aggregate them into one place. “There really wasn’t one source to go to and look up all these different rules, so that was the impetus for putting the tool together,” Caldwell told us. “We wanted to offer it to firms at first but once it was out there we realized there were several different audiences using it. Students use it as a licensing tool and international candidates use it as well.”

With over 700 candidates accessing the tool per year (before the makeover) and a significant leap in CPA exam applications since the first whispers of an economic downturn in 2008, interest in the tool and CPA licensure does not appear to be waning any time soon.

Beyond the licensure aspect of the tool, the ALL gives both individuals and firms a way to improve their own economic outlooks by reaching across state lines to find clients. “In this kind of environment, the firms are looking to neighboring states if their state is suffering from a lack of business,” Caldwell said. The tool allows for mobility without firms wasting countless hours combing through state requirements and allows CPAs in a specialty practice to meet the needs of clients who may be in areas that lack qualified accountants who offer their specialized services.

As the CPA exam prepares to go international, NASBA is counting on increased interest in not only the ALL but the all-important CPA designation. Let’s face it, not every industry can say it has weathered the economic downturn as well as CPAs have and passing the exam is still considered a prestigious accomplishment across the globe.

Great job, NASBA, we definitely approve!

How the ACFE is Promoting CFE Awareness

After Caleb forced me to write a few posts on Credentials for Accountants meant specifically for those of you who still do not know what you want to be when you grow up, I managed to bumble one so badly I was contacted by Scott Grossfeld, CFE CPA and Cttp://www.acfe.com/”>Association of Certified Fraud Examiners. See, it appears I made a typical media mistake in using fraud and forensics as interchangeable fields within the industry and Scott felt compelled to speak up.

This wasn’t exactly wrong (I was being lazy actually) but as CEO of the ACFE, he’s got a responsibility to make sure the media represent the field of fraud examination correctly, especially when it comes to giving forensic accountants credit for what he and his fellow CFEs do out there. Thankfully, we had a nice little chat and cleared up that little point.


Additionally, Scott promised us access to recent salary survey information available shortly that will give us a better idea of what CFEs make. For now, he told us that the data confirms a 22% pay premium for individuals with the CFE compared to individuals in the same position without the CFE. We liked this approach and wish more organizations would take an active role in monitoring and engaging in the conversation, as Scott was obviously doing by reading our series on credentials.

Along the way, however, I discovered that the ACFE is also on top of things by promoting the credential, interacting with their audience and reaching potential new members through new avenues like blogging and social media. The ACFE is excited to be launching a new social media campaign shortly that we can only hope rivals that of the AICPA’s total social media genius (except for that whole Feed the Pig thing, which still creeps us out but is brilliant and weird enough to get a pass).

The strategy of having a CFE on staff is akin to carrying insurance on your home or car, and diversifying a company’s staff can mean the difference between a lawsuit and a slap on the wrist thanks to our favorite unnecessary accounting legislation of all time, Sarbanes-Oxley. “If you look at the CFE, originally the idea behind it was that we had accountants who really didn’t know how to investigate and investigators who don’t know accounting so we were able to bring those two together,” he said. “If you look now, Enron was the big thing that really changed perspective… here’s a big financial risk but you could lose your company if you’re not careful (with SOX) and I think that really raised awareness. Before that fraud work was sort of like insurance, you knew you needed it but you couldn’t always justify it.”

But CFEs do justify their price from a prevention standpoint, assuming fraud to be a risk all companies are exposed to. “5 – 7% of the company’s revenue is lost to fraud, that’s where the fraud examiner pays for themselves,” he told us.

But how does the ACFE promote the usefulness of a 20 year old credential like the CFE? By getting to the kids when they’re still undecided, of course.

“It used to be that the CFE was a secondary credential. [Promoting the credential is the goal of] the higher education partnership we provide to educators. We have 300 colleges and universities in that program. Now it’s part of the discussion; risk is on the radar in terms of what companies are looking for. What we typically see is fraud being an elective type class though there are a few schools that specialize in fraud and or forensics.”

The ACFE also promotes its mission by encouraging those interested in pursuing a career in fraud-fighting to join the organization as a student member for something like $20 a year. Student Associate membership is open to undergraduate students enrolled in 9 semester hours (or equivalent), or graduate students enrolled in 6 semester hours (or equivalent) in an accredited college or university. We agree with this approach, as surrounding yourself with like-minded folks gives you a chance to expose yourself to those already on your desired path. There’s plenty of opportunity for mentorship, commiserating and gaining insight into what the credential actually means for your career.

All in all we approve of what the ACFE is doing and look forward to seeing whatever else they have up their sleeve unfold in the months and years ahead. Let’s face it, they’re pretty much guaranteed a job forever. We like.

NYU Chair: The World Won’t End if the United States Converts to IFRS

[caption id="attachment_12975" align="alignright" width="122" caption="Source: Stern School of Business"][/caption]

Now that convergence has been delayed, the anti-convergence/IFRS contingent is hopeful that this is a major sign of defeat. Whether that’s the case or not remains to be seen but don’t expect the debate to go away.

We recently spoke with Dr. Frederick Choi, Dean Emeritus and Distingu��������������������sor of Business and Chair of the Accounting Department at New York University’s Leonard N. Stern School of Business about the latest current events and what Stern does to prepare its students for IFRS in their careers and on the CPA Exam.


GC: So the number one question on everyone’s mind – will the world end if the United States converts to IFRS?
Dr. Frederick Choi: [laughs] My answer to that is to not to worry, the world will continue as it always has, so we’ll continue to have fun with accounting like we always have in the past.

GC: So there’s no risk that the U.S. will lose its imperial superpower status as a result of this?
FC: No, I don’t think so. I think there’s sufficient flexibility in international accounting standards so that we can continue on as before.

GC: So why do you think the SEC is so cautious? Are all those lawyers scared because there might be numbers involved?
FC: First of all, the U.S. environment is a very litigious environment so I think there’s a concern that IFRS will permit more judgment for the company presenting the numbers. U.S. GAAP, because of the litigious environment, has to be a little more prescriptive, that is, “here are the rules, here are the exceptions.”

At one time in the US, our accounting rules were principles-based and required a lot of judgment. In the ‘60s some companies were were cooking the books which resulted in reporting scandals and class-actions. Then someone said, , “hey, the audit firms have a lot money, so let’s go after the auditors.” That’s when accounting prescriptions became much more rules-focused. So I think the big fear is that moving from an environment that is more rules-based to one that is more principles based will require much more judgment and perhaps invite more litigation.

GC: So a little current events question – what do you make of the FASB and IASB’s announcement that the convergence project is going to be a tad late? Was the June 2011 to get those G20 guys off their backs or did they really think they were going to get this pulled off?
FC: I think when they first started the project towards convergence they did so in good faith but there are some significant differences that need to be ironed out. And given the vested interests, it’s going to take a while. I’m not surprised that the deadline has been extended.

GC: And the SEC seems completely all right with it.
FC: Yes.

GC: Say I’m against IFRS – in fact, I’m a militant for U.S. GAAP. I don’t want IFRS anywhere near our capital markets because it’s too principles-based, countries need financial reporting autonomy and that it doesn’t really benefit anyone except a bunch of big accounting firms that need a new revenue stream? Plus, it’s going to be a nightmare for companies to convert to and it doesn’t really help small and medium-sized businesses…
FC: That’s correct.

GC: …having said all that, your response to me is…
FC: I look at this from the point of view of the the analyst. From the point of view of the analyst, the name of the game is to read the tea leaves and get as close to the underlying transaction as possible. The one strength of U.S. GAAP is that there’s a lot of research that goes into the pronouncements. I think U.S. GAAP – without sounding nationalistic – is the best researched, empirically as well as conceptually, accounting standards in the world.

I think an analyst should not be bogged down by whether U.S. GAAP is better or IFRS is better. Analysts have always taken the numbers and massaged them to get closer to what he or she thinks the underlying economics are. In fact, if you look at the not-so-sharp analyst who will say, “Oh, we’re going to IFRS and that’s going to make my life easier,” my response is “No, it’s not.” I think it will be more complicated.

GC: Okay but there are going to be some tricky areas, right? What are those going to be?
FC: I think the biggie is the ability to write down an asset and write it back up. Here in the States, when we impair an asset we cannot go back and reverse it. The rationale behind that was you don’t want to give firms the option to manage the bottom line.

Firms that write asset back up will be able to smooth earnings. Say you and I are in business and we have a good year, so we write down an asset and take the loss. Next year, we say “Oh my god, results are horrible. How can we pump up the bottom line?” We reverse the write-down. So, that’s a big concern that I have. That applies to intangible assets, it applies to plant & equipment, it applies to inventory. So this is a biggie.

Another difference worth nothing is if management feels that the standard they are following is misleading, they can actually deviate from the standard. That’s a major concern as well.

GC: How familiar are you with integrated reporting? How do you think it fits in with the transition and is this something we’ll see more of or are we still at the baby steps stage?
FC: I think from an investor’s point of view, that’s going to be confusing because you’re going to have hard numbers combined with very soft numbers and I’m not so sure that’s going to make life easy. I think if you keep the soft stuff in a separate statement then the analyst can look at the hard numbers and come to a preliminary conclusion and looking at the soft numbers make some professional judgment – do you bump the number up a little bit or do you interpret it a little more cautiously. To me that’s the better state of the world.

GC: And as it stands right now, there’s no way to audit the non-financial information
FC: That’s correct.

GC: What are you doing to prepare your students at NYU for the transition?
FC: I put together a team here at Stern and we looked at all the courses that deal with financial reporting and basically I think the whole approach that we’ve taken is that our responsibility is not to teach students to memorize rules, our responsibility is to teach them how to think and think critically. We say here is an international accounting standard. Let’s talk about various measurement issues that we normally talk about and when a new standard is issued, I’ll expose you to both the U.S. standard and the international standard. For now, those two sets of standards will continue for the next several years. If the international standard is different from the U.S. standard we’ll say “here’s the implications on the financial statements and profitability, liquidity, ratios, etc.” So students can identify the impact of the different measurement framework on the financial statements.

GC: How have you balanced, from a curriculum standpoint, IFRS education and the requirements for the upcoming changes to the CPA Exam?
FC: Our approach is not to teach students to pass the CPA Exam, our approach is provide an education. Students need to learn and think critically because rules will change over time and I think it’s best to develop those critical thinking skills. We infuse international reporting standards throughout the curriculum but not in the sense where we say, “Here, memorize this rule and be able to spit it out and ace that question on the CPA exam.” We’re basically saying, “here are the standards, here are the differences, here’s how they will impact the financial statements and be aware of that.” We have a combined BS/MS in accounting program that prepares students for the 150 hours and a required international accounting and reporting course is part of that degree.

GC: So in other words, they’ve got this on lockdown and they will all be go-to experts on IFRS at their firms?
FC: I think they’ll be able to speak intelligently about IFRS but they won’t be rulebooks.

GC: What are you hearing from the firms that recruit at NYU (other than “send us the smartest ones) on this issue?
FC: I think the market likes our product because we develop those critical thinking skills and our placement rate at the Undergraduate College is close to 100%, so they like the product irrespective if they know IFRS or not because if you’re smart and have the critical thinking skills you can pick up IFRS in very short order. Given a choice between two students – one that has been exposed to IFRS and one that has not, but they’re both bright, and the firm can only take one, of course the firm will take the one with the familiarity with IFRS but I don’t think that’s ever been an issue.

GC: Back to the CPA exam. Of course everyone at NYU will be passing no problem but what about students and instructors elsewhere? Should they cram it in and get it passed in 2010 or will they be ready for the 2011 exam?
FC: I think many schools are already gearing up. We have shared our approach with many schools via workshops, conference presentations and the like. We are always ready to assist. Our approach is, “ We’ve exposed you to IFRS and if it is on the exam, youlcan get more details in a review course or you can bone up on IFRS on your own, but it shouldn’t be a big issue.

Mario Armstrong: Cloud Computing, SaaS, Social Media Are Tools for All Small Businesses to Consider

Earlier this week we got the chance to speak with Mario Armstrong, on-air tech contributor for NPR’s Morning Edition and tech contributor to CNN. We discussed several technology issues, including SaaS and social media, for small businesses to consider to mark National Small Business Week.

There you have it! Cloud solutions, SaaS, social media. They’re all important tools for small business owners. You can spend your weekend boning up.

Integrated Reporting Will Gain Momentum as Banks, Private Equity Increase Their Focus on ESG Issues

In the first part of our conversation with Michael Krzus, co-author of One Report, Integrated Reporting for a Sustainable Strategy, we discussed the nature of integrated reporting, how it will change corporate reporting as it is commonly known and some of the benefits to both stakeholders and companies.

The second part of our discussion looks at how small and midsize entities will benefit from integrated reporting, the feedback received from clients, and what the future holds.


Going Concern: Do you see a point in time when companiessults for sustainability issues on a reoccurring basis similar to quarterly earnings reporting?

Michael Krzus: I know enough about this to be dangerous, so I’ll give you that caveat, but I am aware of the somewhat recent EPA rule making that is going to require companies to report emissions and things of that nature. There are some limitations, but there will be more frequent reporting for U.S. domiciled companies. I think some of it will depend on the technology available. I don’t know what it takes for a coal-fired electric plant to account for CO2 emissions. So I’m not really in a good position to tell you that in five years whether that will evolve into more regular reporting or not.

GC: What kind of companies will be able to utilize integrate reporting? Can any size company embrace it or will it start with the largest players and work its way down?

MK: As a practical matter, it will have to be large, public traded companies, particularly the global players. On the other hand, I think small and mid-cap companies, especially private ones, have as much or more skin in the game and a lot more upside than the big guys. And that’s because of the complexity of information and the complexity of accounting standards. If you’re Microsoft, you’ve got a lot of issues that can be addressed by your large accounting department but if you’re a $400 million manufacturer of widgets, you don’t have those kind of resources. But you do want to tell stakeholders your story clearly and succinctly. I think the idea of the integrated report gives them the opportunity to do that.

Additionally, in the last couple of years, I’ve developed a good working relationship with the Society of Investment Professionals in Germany and one of the things that group has done is build example reports of what an integrated report could look like for a small or mid-cap sized company. If you think about it from the German perspective, much of their market base is small and medium sized companies and analysts there are very interested in the benefits that an integrated reporting can provide. So, there’s a lot upside for companies that fall outside the Fortune 500.

GC: Do you see a point in time where banks start requesting more non-financial information (i.e. ESG information) in order to qualify for lending?

MK: The short answer is “Yes.” To me, sustainability really has to do with long term viability of an entity. I don’t think a company can be viable for the long term without understanding and managing their environmental, social and governance risks because those three risk types specifically translate to reputation.

To some degree a lender will have to start considering non-financial factors. The price of admission is opening your heart and soul, as a company, to the banker. A banker can ask all kinds of question whether its about CO2 emissions or manufacturing location in Thailand that may cause child labor problems because you’re running a sweat shop.

To parallel that, I recently attended a conference of institutional investors. I found it interesting that a group of people that wanted to know more about integrated reporting were private equity folks. These private equity people are in the same boat as the bankers. If they are going to make an investment, they will open up everything. It’s not just about getting the 10-K, it’s about understanding everything from financial projections and processes to social and environmental risks in China. So, the markets in general, not just bankers, but also private equity and traditional sources of capital have become more and more interested in a broad set of non-financial information.

GC: What has been the experience with clients?

MK: Clients have assisted us by presenting challenging questions to help us think more clearly about the situation. For example, some people have argued that we don’t need integrated reporting because the markets are efficient and already have all the information they need. I would argue that, even without the events of the last couple of years, markets aren’t efficient and don’t have all the information they need because we have so many firms employing armies of analysts, all of who are looking for that shred of information that will give their company an edge. There’s always something that the analysts don’t have.

Another argument is whether or not the integrated report somehow diminishes the corporate responsibility report. My response to that is that by not integrating the two types of reports, companies avoid an audit of non-financial information. In general, the companies that have an integrated report do have some assurance over the non-financial information; it’s not necessarily subject to the same standards as auditing standards but there is some kind of assurance. So I think some kind of audit over the information – and over time perhaps controls and processes – will elevate the quality of the reporting. So good questions from very sharp people like “Have you guys thought about this?” forces us to engage in some dialogue of our own so we do have a coherent responses.

GC: How does IFRS fit into integrated reporting?

MK: I’m one of those people who think that there should be one global set of accounting standards. To speculate just a little bit, I could envision a world that might have IFRS that govern the financial statements and perhaps an international non-financial reporting standard, because at some point we’re going to have to address that. I think the larger question of IFRS is to first, how do we develop a global standard of non-financial information? And secondly, can we develop some sort of benchmark for auditors? So, I remain optimistic that U.S. will eventually adopt IFRS and would hope in the next few years there would be some kind of move to adopt international standards for non-financial information.

GC: What’s next?

MK: There are a couple of major conferences coming up this year where integrated reporting will be a topic in several sessions. We use various conferences to spread the word and build some momentum behind the idea. The Harvard Business School and the Harvard University Center of the Environment are co-sponsoring an event on integrated reporting later this year. Two newspapers in Japan are hosting an event in November and the Prince of Wales Accounting for Sustainability has an annual event in December that hosts roundtables on various topics.

On the Accounting for Sustainability website, there are a number of press releases including a PDF on a governmental collaboration that calls for the establishing an international integrated reporting committee. I can tell you that the Accounting for Sustainability Group has the resources and, frankly, the brand name that could call for the IASB or some other group to undertake the idea of a global framework for reporting non-financial information. I could see us having this conversation a year from now and I’d be very disappointed if there was not some kind of formal announcement from an international integrated reporting committee.

So I’m cautiously optimistic about the future. The timing for this is right and integrated reporting is important when you believe in the concept of inter-generational responsibility. This is the only planet we’ve got and we should every intent to leave it in as good as condition as we found it.

But as a hard-headed capitalist I also think integrated reporting makes sense because you don’t want to invest in company that will go bust. A company simply cannot be viable for the long-term unless they are considering ESG issues.

Accounting Going Green? The Move to Integrated Reporting

Transparency is fast becoming the most important tool corporations can use. Not long ago, management determined what was relevant and stakeholders were notified on a need-to-know basis. Now the tables have turned and stakeholders have the ability to demand information of all types and if companies are not willing to provide it, those stakeholders now have the resources to discover (or in some cases, uncover) it for themselves.

Adding transparency to corporate reporting still seems to be a work in progress. As the SEC s ruminates over IFRS and its impact on financial reporting, corporate sustainability and responsibility reporting is fast becoming one of the popular ways for companies to give stakeholders a snapshot of its social, environmental, risk, and ce.


The problem from a practical perspective is that it’s difficult to consume all information in an efficient manner. That’s where the idea of integrated reporting comes in. Simply, it combines the the traditional financial report along with the non-financial information presented in the corporate responsibility, social responsibilty or ESG report.

One Report, Integrated Reporting for a Sustainable Strategy is a book written by Robert G. Eccles, senior lecturer of Business Administration at Harvard University and Michael P. Krzus, a public policy and external affairs partner with Grant Thornton.

We had the pleasure of speaking with Mr Krzus recently about One Report, covering topics like what kind of data it consists of, how it will change corporate reporting, and what the future holds. This is part one of a two part interview. Check back for part two tomorrow.

Going Concern: How can you best summarize what integrated reporting is, how it will be different and how it will improve corporate reporting.

Michael Krzus: On it’s face it’s a very simple idea – the notion of an integrated report really involves the combination of the traditional financial or corporate report and combining it with corporate sustainability, responsibility or ESG report and combing them into a single package. However, that doesn’t mean that companies will staple together two reports, each one about 150 pages long, that results in one report that’s 300 pages long.

If you look at one of the companies we talk about in the book, United Technologies here in the U.S. and Danish company Novo Nordisk, each of their integrated reports perhaps have 115-120 pages and what both have a very robust website. Just because something may not be deemed material for the integrated report, there is still a lot of information that both of those companies, as well as others, present in very easy-to-navigate websites. So one of the things that we’re seeing is that integrated reporting is really helping develop very advanced websites.

Similarly, I was working on a couple of presentations on the German chemical company BASF has a page on their website that will allow you to link to 200 different global social media outlets including the likes of Facebook and Twitter. So we’re really starting to see that kind of engagement develop from companies that are embracing integrated reporting as well.

Companies are using the idea of an integrated report to better understand their own internal concepts of materiality and by engaging with their stakeholders and understanding what they think is material or what their material risk exposures are. It’s a disservice to the broad stakeholder community that some mainstream analysts don’t give consideration to some of the environmental or social risks that exist.

From the perspective of the socially responsible investor or perhaps a non-governmental organization that follows a very narrow or very critical mission, they may not understand the trade-offs that these company have made. We think that the idea of a single integrated report will help broaden the perspective and help them make an informed decision.

GC: Considering a traditional corporate responsibility report, how the data change? Similarly, will the data change from the two separate reports combining into a single report?

MK: There are relationships between financial and non-financial performers and vice versa. Companies need to better explain what those relationships are.

One example is BMW. On one hand, water is a relatively small cost that goes into an automobile but in terms of water as a resource, it is an increasingly scarce resource in certain parts of the world. BMW has decided to make huge investments in reusing water and they actually have a plant in Austria that doesn’t bring fresh water to the plant, they just continually reuse it. The benefit, as it turns out, is because of their focus and because they’re a few steps ahead of other automobile manufacturers, they’ve got a cost advantage. Making that kind of discussion clear, it’s not just about cutting CO2 emissions, but also process improvements that enable companies to produce more at a lesser cost.

I think the other difference that you’ll see in the new reports is that the mainstream analysis will be giving more consideration to ESG issues. The traditional analyst has several companies that they’re following and these companies have different sectors in an annual report, corporate responsibility report, and many others. It’s extremely difficult to consume that many reports. My co-author and I interviewed an analyst once who brought in a stack of about 60 reports because some of the companies that she followed were issuing financial, environmental, and responsibility reports all separately, and she said “there’s no way.” So I think the integrated report will help that.

A couple more examples: last September Bloomberg launched a product that involves making global reporting initiatives that available on their Bloomberg terminals and CalPers’ board has undertaken a project to integrate ESG factors into their analysis better and in turn, push that down that to their asset managers. So we are starting to see some movement. That relationship between financial and non-financial performance and making things easier for the analysts to consider non-financial information will be the two biggest changes that will come about as result of wider adoption of integrated reporting.

GC: And CalPers is not a lightweight. If you see someone like someone like that setting an example, there are other companies or large holders of assets that will follow their lead.

MK: CalPers is not a lightweight at all. We’ve developed a good working relationship with a couple of people at CalPers and they are taking the idea of integrated reporting very, very seriously.

When you think about it, if CalPers goes to their asset managers and says we want you to integrate ESG into your traditional analysis and here’s the way we want you to come up with it. I think that’s going to have a ripple effect across other pension fund managers and assets managers other than those at CalPers.

GC: What would you say are the biggest benefits that stakeholders will get out of integrated reporting?

MK: I think the biggest benefit is actually going to be better engagement with companies they want information about. In my opinion, a company cannot undertake an integrated reporting project without really listening to the stakeholders. For a company to understand the perspectives, not that they’ll all be material, but that they’ll be willing to engage in that dialogue.

And it may not be in ways that companies are not comfortable with whether it’s Twitter or Facebook or something else, I think that process of stakeholder engagement is going to be mutually beneficial. The companies will better understand who’s out there and what they’re expectations are. And from the user perspective, it they will have a better understanding about what some of the tradeoffs are, as well as what some of the reporting implications might be. Overall, I think it will create a better overall understanding for both groups.

And by having more robust information, it’s going to allow for better decision making. I see that as a benefit on both sides. From the investor side, they’re going to have a much better understanding of the some the risks a company faces. An investor has to consider a lot of intangibles when making a decision. Whether its the business risks to climate change or the innovation process. If that kind of information is made available, it’s going to allow investors to make better decisions and who the winners and the losers are.

GC: Is there any risk that stakeholders might have too much information?

MK: Frankly, yes but I think in some ways it’s an overblown risk because when Bob and I looked at some of the oldest integrated reporters, you clearly see an evolution. A great example is BASF. Because of the diversity of their operations and the nature of the chemical business, there’s a lot of relevant information, especially about risk and materiality of certain exposures. About a year ago I spent half a day with their reporting team looking at both the financial and sustainability side. They do a very good job of looking in the mirror. One of the first comments was that the integrated report was still too long; that they needed to do a better job of getting their arms around materiality and again, the dialogue with the stakeholders helped them do that.

Over time as companies engage their stakeholder through various technologies, they will reduce the report down to a very information rich package. So yes, there’s a risk for too much information but I don’t think that will stop anyone.

Don’t forget to check back here tomorrow for part 2!

Abercrombie & Fitch’s Jonathan Ramsden: CFOs Need to Challenge Conventions

Jonathan Ramsden has been Executive Vice President and Chief Financial Officer of Abercrombie & Fitch since December 2008 and is a key part of a team trying to guide the retailer’s global expansion while managing something of a remake of its domestic operations. Going Concern caught up with him recently to find out how he sees A&F’s business and what else is on his mind.


Prior to joining Abercrombie & Fitch, Ramsden was CFO of TBWA Worldwide, a global marketing services company with operations in over 70 countries. He began his career with Arthur Andersen, spending nine years in the firm’s London and New York offices. He is a graduate of Oxford University and a UK Chartered Accountant. Jonathan lives in Columbus, Ohio, with his wife and threng>Going Concern: I’ve got to start by asking how analysts got Abercrombie’s early-year outlook so wrong. One early year report out in the Wall Street Journal anticipated an ugly same-store-sales decline, and the next day you post an 8% increase in January sales in stores open at least one year. February and March were good for you too. Why the gulf between predictions and performance?

Ramsden: Our business improved at the beginning of the year and, since we don’t give forward looking guidance, the analyst consensus was modeling a continuation of the prior trend. We have also consistently said that one or two months do not constitute a trend, and that month to month results may be volatile. Our focus is less on monthly sales figures than doing what we think is right for the long-term health of the brands and the business.

Going Concern: Do you see it as part of your job to find metrics that allow shareholders and analysts to make more accurate predictions and better comparisons, or does that really fall beyond the CFO’s purview? What can you do as CFO to help people better understand the company’s business?

Ramsden: We try to provide data that enables shareholders and analysts to understand the underlying dynamics of the business. Since the beginning of last year we have not been giving forward looking guidance on sales or earnings since we think that implies a degree of precision about future results we have not had in the environment we have been through.

Going Concern: How do you expect Abercrombie to perform this year overall?

Ramsden: We feel very good about our international business, which continues to affirm the global appeal of our brands. We have been through a challenging time domestically, but are working hard to improve the domestic trend of the business. Protecting the global appeal of our brands remains a paramount objective, and we have been willing to take some pain domestically to do that.

Going Concern: Is it fair to say that the growth will now come overseas? Expanding abroad can be fruitful, but it’s also a big investment. What if sales soften more quickly than expected?

Ramsden: We do believe that the future of our business is tied to our international strategy. At the same time, if we can achieve a sustained improvement in our domestic productivity, that will be very significant to both sales and earnings. There are certainly risks associated with an international expansion, but we have been very encouraged by the results so far.

Going Concern: There seems to be a wane in the company’s popularity here in the States. Does the company agree with that statement and what’s being done to address it?

Ramsden: We believe that our brands retain a strong appeal. 2009 was a challenging year in the US, but we think we can improve the domestic business going forward. Firstly, we continue to work on our pricing. Secondly, there are a number of initiatives in place on the marketing front that we think will help us to better connect with our core customer. We feel better about the assortment than we have in some time. Lastly, we expect that we will need to close a number of stores that don’t really fit in the portfolio, particularly for the A&F brand.

Going Concern: Has Abercrombie & Fitch actually cut costs over the last couple of years? How involved have you been in that and can you explain a little about the process behind identifying excess cost in the business?

Ramsden: We went through a reorganization of our corporate “Home Office” about a year ago, which included some significant lay-offs. The company had never been through anything like that before so it was a difficult process, but we believe the company will be more efficient as a result. The entire leadership group was involved in the process. At the store level, on an ongoing basis we have been looking to find efficiencies in variable costs such as store payroll, packaging, supplies and so on. The biggest component of the margin erosion we have incurred has been in store occupancy costs (rent, depreciation etc) which are relatively fixed in the short term, but which we think we can make progress on over time, including through store closures where appropriate.

Going Concern: What are your biggest challenges as CFO with respect to financial reporting in the coming year?

Ramsden: As we roll out internationally, we have to ensure that our local reporting is to the same standard as our US reporting. In addition, the international rollout adds to the complexity of our US reporting.

Going Concern: Have you started laying the groundwork for converting to IFRS? If so, when do believe the conversion will be complete? Can you give us a sense of the scale of this task and who is helping you with it?

Ramsden: We have done our initial assessment of what would be required to convert. The area of greatest complexity for us would be moving from the retail to the cost method of accounting for inventory.

Going Concern: A recent survey by Financial Executives International/Baruch college stated that only 44% of CFOs anticipate an increase in their hiring and that 25% expect to cut back on their rate of hiring? What kind of cost saving measures (as they relate to employees) did A&F utilize in 2009? Have economic conditions improved to the point that further cost saving measures (e.g. salary freezes, layoffs, reduced working hours) won’t be necessary? What are A&F’s plans with regard to hiring for 2010?

Ramsden: During 2009, as well as layoffs, we took a number of other measure such as deferring and reducing raise pools and reducing retirement plan contributions. Our current direction is a gradual return to normalcy. We are hiring where we need to, while seeking to keep the overall headcount close to the current level.

Going Concern: You were previously a CFO at a global marketing-services company. How difficult did you find it moving sectors? What are the main differences you see between overseeing the finances of a services operation as opposed to a retail operation? (What would you say to a senior level business finance executive who is switching business sectors?)

Ramsden: There are some significant commonalities. Both A&F and TBWA are full of creative, energized and driven people. During the ten years I was at TBWA, we were seeking to build a cohesive global brand. For A&F, the next 10 years are also going to be about international expansion. The starting points are quite different, but many of the challenges of running a global business are the same. I think there are a core set of CFO skills that are transferable and that make up a significant part of the CFO role in any organization. Industry knowledge is definitely valuable, but coming from a fresh perspective also has some value. Clearly there is also a huge amount of instituational and industry knowledge at A&F.

Going Concern: In overall terms, how do you view your role as CFO?

Ramsden: There are some things that are black and white, but most are not. As the CFO, you need to be surrounded by people and processes you trust. Good processes will take care of the black and white stuff, and having people you trust in key positions will take care of most of the rest. So you have to have complete confidence in the people you work with, and you have to ensure that systems and processes are effective. The CFO also needs to challenge conventions.

Five Questions with the Tax Prof

We’re happy that Paul Caron was able to squeeze a little time in to answer our questions this week. Between April 15th, finals and keeping a regular posting schedule at TaxProf Blog, we’re honored that he took the time to humor us.

After all, the man has been on the Accounting Today’s Most Influential People four years in a row. Not exactly a lightweight.

That being said, since AT’s list isn’t a ranking, it’s difficult to say just how influential Paul is. But we are certain that he carries more favor with the tax and accounting community than, say, Charlie Rangel.

In addition to his star power in the tax community, he is Associate Dean of Faculty and Charles Hartsock Professor of Law at the University of Cincinnati College of Law.


Why do you blog?
I often ask myself that question…Part of the answer is to help create a virtual community of tax professionals (tax lawyers, accountants, students).

How long have you been blogging?
Since (appropriately for a tax blog) April 15, 2004.

If someone had to read just one post of yours which one would it be?
My annual post analyzing presidential tax returns.

What is the biggest benefit you’ve gotten from starting your blog?
Getting to know a variety of tax folks. I’ve written 5 books; over 30 articles; Been cited over 350 times; Been downloaded over 10,000 times; had almost 10 million visitors to my blog. So I guess my blog trumps everything else I’ve done professionally. I’m pretty sure that the first sentence of my obituary will mention my blog, not any of the books or articles that I’ve written.

If you are a tax blogger you must…
Not need sleep.

Five Questions with MACPA’s Bill Sheridan

If you don’t know the MACPA and their quality content machine Bill Sheridan, you’re probably not in accounting, have never used Twitter, and most definitely wouldn’t have any clue what Second Life is. When it comes to social media, the Maryland Association of CPAs was on it long before a certain cable company figured it out and Bill has been just one of the organization’s main “faces” as far back as I can remember.

Bill speaks of using CPA Success as a tool to reach the MACPA’s members in ways they never thought they could and speaks as someone who truly enjoys what he does for a living. He likes posts he’s written in airports (who doesn’t love travel blogging? *cough*) while his co-blogger Tom Hood (I believe you all are familiar with his work as MACPA CEO and CPA) prefers tackling the topic of leadership. Whatever your accounting poison, CPA Success covers it all.

Bill was hard to pin down but finally found a moment to get to our five questions, enjoy.


Why do you blog?
It’s yet another way of connecting with our members. Our blog allows us to present news and analyses much more quickly than we ever could before. It allows us to communicate with members in ways we never had before. We’ve had an opportunity to carve out a niche as a thought leader in the CPA space that we never could have established without blogging.

A good accountant is…
A good CPA is a trusted advisor, strategic thinker and confidant, someone who sees beyond the numbers and helps companies grow and clients understand how their finances impact their personal and professional lives. And at all times, honest and ethical.

A good blogger is…
… observant, and a good story-teller.

What is the biggest benefit you’ve gotten from starting your blog?
Notoriety. But the biggest benefit is this: CPAs have really worked hard to carve out a place for themselves in the social arena. When we first started playing around with this stuff three years ago, there weren’t a lot of accounting and finance folks in there with us; it seemed like we were working in a void. Since then, though CPAs have really taken the social bull by the horns. They’re blogging, they’re using things like Twitter and LinkedIn and Facebook, and they’re figuring out to put these tools to use in ways that benefit their businesses and their clients. It’s been fun and extremely rewarding to see CPAs make the leap and work with them to figure all of this out.

The biggest issue facing accountants today is…
… complexity. The profession is facing numerous legislative and regulatory changes these days, and that’s in addition to the many changes in accounting standards and other technical rules that have been enacted recently. Keeping up with all of these changes is a monumental task for CPAs, who are busy enough simply serving their clients.

TurboTax’s Bob Meighan: There’s No Sense in Panicking About the April 15th Deadline

With a little more than just 24 hours to go until the end of the traditional filing season for 2010, some taxpayers might be freaking out. To help prevent this we got the chance to speak with Bob Meighan, TurboTax VP and CPA yesterday morning about what to do with just a few short hours away from the deadline, what taxpayers have been struggling with this filing season and if he had any special advice for a certain customer:

And that extension form you need? It’s Form 4868. Even if your preparer got nabbed in Operation Brass Tax, just make it easy on yourself and file the extension (we did). You’ll feel better.

What Will the Aftermath of the Next Big 4 Failure Look Like?

In part one of our discussion, we discussed audit firm failure and why the business model is not sustainable in the current form. We will now look at questions about what the aftermath of a Big 4 firm failure could look like and what some various paths could be:


Why isn’t a “Big 3” audit firm situation sustainable?

Jim Peterson: The industry has gone from 8 firms to 6, to 4. We’ve reached a tipping point where if one more firm fails, the rest of them will get out of the business. The firms have all but admitted that the business model will not survive another failure.

Francine McKenna: The failure of a firm will also have global repercussion in various countries that are dominated by that firm (e.g. PwC in the UK). The remaining firms simply do not have the resources to pick up where the dominating firm left off.

Is government intervention a possibility and is it a reasonable solution?

FM: Personally, I’m in favor of at least a portion of public company audits being performed by the federal government, especially those public companies with a substantial investment by the U.S. Government. I wrote in a post from January 2009, “Let’s tear down the walls and rethink how we should protect the investor, who in many cases is now the taxpayer.” We should get rid of the for-profit audit firms’ involvement in the nationalized entities, except perhaps indirectly as contractors paid by the government but not controlling the client relationship. Those receiving government bailout funds could be “audited” by a team drafted from all able bodied audit and accounting professionals. I call it the National Service Corp for Accountability and Transparency™.”

JP: This is a possible scenario that may be imposed upon the world if proactive solutions are not formulated. Unfortunately, this will be imposed directly upon the U.S. Taxpayer. The product will have virtually no value and the efficiency and trust that would result could be likened it to any other service provided by the Federal Government.

You have both said that “no one would miss the auditors’ opinion.” When did the auditors’ report become such a commodity and is there any way for it to recapture any value?

JP: The auditor’s report as known and essentially unchanged since the 1930’s — an obsolete document. It has been a long time since someone asked sophisticated financial statement users, “What do you want?” and “What are you willing to pay for?” New ideas for assurance services are needed that will allow firms to provide a valuable product without submitting themselves to such huge liability.

FM: A completely different approach is needed, in my opinion, to protect shareholders and investors in public companies than the current product, especially when the shareholder/investor is the taxpayer as has occurred in the recent investments in AIG, Fannie Mae, Freddie Mac, Citigroup, GM, etc”

There are very few sophisticated investors – hedge funds, other large public companies, private equity or sophisticated creditors – who do not perform their own due diligence, using publicly available information or additional access prior to a merger or acquisition. They would be considered irresponsible if they only used the basic financial statements, assuming only the auditors opinion and required footnotes, as a basis for major investment decisons. So why do we expect the retail investor, the employee with their retirement savings in the company stock or a vendor or customer to count on the audited financial statements as the last word? Audited financial statements have certainly not provided any “assurance” that companies would not go bankrupt, that banks were solvent, that global financial institutions would not need hundreds of billions of dollars in taxpayer money to remain viable.

In the wake of the Andersen collapse, what hasn’t the leadership of large firms, primarily Big 4, done to mitigate risk to their firms?

JP: The leadership at the top has a lot at stake financially. They are focused on short-term integrity. The young partners will inherit this problem. The current leadership lacks both the vision to come up with solutions and the fortitude to make the decisions.

FM: I agree. The model needs re-invention. Most professionals that see the problems wake-up and get out or are forced out and their careers and lives are better for it. They don’t have to deal with the problem anymore. People that remain do so because they lose any idea of what else to do. They develop “Stockholm Syndrome” and some eventually become the leaders of these firms.

In an email, Jim Peterson wrote to us, “there is no silver bullet” that will fix this problem. It will take a “a holistic approach and an opportunity for “blank page” re-engineering can hope to address the relationship among all these elements.”

The idea of a wiping the slate clean and starting completely over is difficult for anyone to get his or her head around. Explaining the situation to a multi-billion dollar industry that has been doing “business as usual” for decades is even harder.

But what is clear is that the situation must change in order for the profession to become relevant and valuable again. Eventually, whether by way of the current litigation or other unforeseen events, the failure of the audit firm business model is unavoidable. With some many people calling the profession into question now again, the best thing that young leaders can do is start thinking about solutions now. The profession must re-invent itself in order to serve stakeholders as intended.

Why A Big 4 Failure Is Imminent–and What It Will Mean

In the wake of the Lehman Bankruptcy Examiner’s report, speculation about the future of Ernst & Young is rampant, as is the future of the audit profession as another colossal failure raises questions about the relevancy of Big 4 firms’ audits of public companies.

While many are focusing on the “who” and the “how”, there is a small band of experts that are focusing on a bigger issue. (Yes, there’s a bigger issue.) That is, what happens in the aftermath of the next Big 4 failure?

To put it more clearly, what will another firm failure mean for the audit practice business model? How will the markets react? Will the government attempt to intervene in some
These are questions that will have to be addressed in the post-failure environment, despite the desire of the Big 4 for the problem to magically resolve itself.


In order to try and give you an idea of the possible fallout from the next Big 4 firm demise we asked two experts to expand on their past writings, discuss the current environment, and to speculate a little about the future. We discussed this topic with our own Francine McKenna and Jim Peterson after poring over a dozen or so of their past posts, exchanging a multitude of emails and one very spirited conference call.

Francine’s recent post, “Ernst & Young Looking at More Civil and Criminal Liability for Lehman Failure” examined E&Y’s civil and criminal vulnerability as a result of the Bankruptcy Examiner’s report. She is a skeptic of audit firm relevancy and never put it more poignantly to her readers than in January 2009, “So, you may finally be saying to yourself: What’s the point of audits and auditors?”

Jim Peterson’s blog Re: Balance is dedicated entirely to the subject of the next Big 4 failure and what it means for the financial world. From the “Why this site” section:

A basic re-ordering of the relationship between large global companies and their accounting firms is inevitable — evolution can be postponed, but it cannot be stopped. But the need is neither well recognized nor openly discussed — the very reason for this site.

While the question of the possibility of a firm failure is moot when you seriously consider the items outlined below, the question of “which firm?” is also of little consequence. And to take it one step further, the timing of a large-scale failure is a pointless discussion, as Jim emphasized, “The axe that could fall on any of the firms, depending only on the pace of litigation management by the judges over-seeing their dockets.”

Jim presented us with five reasons that the audit franchise’s very existence is ineffective:

Accounting rules are politicized – The FASB and IASB have been belly aching for awhile now that political influence needs to be left out of accounting rules. The reality is – a reality that both the FASB and the IASB have not yet accepted – this is a fruitless exercise, “Accounting principles are not in the profession’s influence, much less their control, but are politicized and complex, and are subject to manipulation by issuers,” says Jim.

Users’ expectations are not achievable – Somehow everyone in the world – and audit firms are partly culpable here — got the idea that financial statement audits guarantee good information. Jim says, “Users’ expectations are set at zero defects – partly the fault of the profession for over-selling its capability and contributing to the so-called ‘expectations gap’ — a level that is not achievable in any system designed and run by human beings.” In other words, to remain competitive, audit firms gave the impression that they could deliver highly effective results with their audits. By their own inability to effectively explain the purpose and the pitfalls of financial statement audits (until they are on the defensive for failures) the profession has sealed its fate.

Hindsight puts the firms in a bad position when liability is determined – When a firm makes a mistake, the media, politicians and “experts” are shocked — SHOCKED! — that auditors could have missed these errors. This makes for an easy argument before jurors that typically do not have a good understanding of the risks involved prior to an audit occurring. “The legal standards for liability in the major countries, especially in the US, are elusive and subjective; they expose the firms to second-guessing by juries – when ‘after the fact’ means after events that are ugly and there have been visible eruptions of misbehavior. That means ‘bet the firm’ cases cannot be [effectively] tried.”

The liability is, simply put, HUGE – Jim sums it up: “The Big Four firms lack the financial capacity to answer multi-billion dollar exposures…and so they are forced either to pay settlements that are ultimately crippling to their business model, or to go to trial in ‘bet the firm’ environment.”

The vicious circle self-perpetuates – There will continue to be huge audit failures. The firms have not identified a solution, largely because they have not addressed past mistakes with substantive solutions. “The large firms continue to fall into claims of deficient performance — examples of which have continued to arise with depressing regularity despite protestations of improved regulation and performance — in no small part because the profession lacks a forum for real ability to learn, or to avoid repeating the same old mistakes of the past,” says Jim.

Francine also mentioned something many people in the profession forget or don’t realize at all, and that is that a failure could arise unexpectedly from a non-U.S. jurisdiction, “a regulatory action in another country that no one in the U.S. is expecting could be just as crippling to one of the firms as any of the problems in the United States,” she told us. The most imminent risk comes from the Satyam scandal that occurred in India on the watch of PricewaterhouseCoopers.

The problem that the entire financial community in the U.S. finds itself in — not just the Big 4 – is that they are “locked into this arcane method of assurance,” according to Jim. The text of the auditors’ opinion has been essentially unchanged since the 1940s while the rest of the business world constantly evolves.

Stay tuned for part two of our discussion with Jim and Francine that will try to paint a picture of what the post-failure environment could look like.

Five Questions with Norman Marks

Norman Marks is an “evangelist for GRC” (that’s governance, risk management and compliance for those of you that can’t do a Google search). He is a CPA, a chartered accountant and vice president, governance, risk, and compliance for SAP’s BusinessObjects division, and has been a chief audit executive of major global corporations for more than 15 years.

He blogs at the IIA website and keeps a personal blog on governance, risk management and internal controls. He is also the contributing editor of Internal Auditor’s “Governance Perspectives.”

If you read a few Norman’s posts you’ll understand his passion for internal audit, GRC and helping companies find solutions for these issues. Simply stated, Norman is one of the good guys and is doing more than his fair share to help take on the challenges in these areas.


Why should accountants read your blog?
My blog is for anybody with an interest in monitoring events and sharing views around governance, risk management, and internal audit. Accountants are more than people who maintain the books: they are businessmen and women interested in advancing and protecting their organization. That makes them natural leaders in each of these areas.

What are your three must-read accounting blogs and one must-read non-accounting blog?
I read the occasional business blog (aren’t all the better so-called accounting blogs really business blogs) when the topics are interesting. Certainly reTheAuditors by Francine McKenna is interesting. But I really enjoy Mike Jacka (an auditor/humorist) and Richard Chambers, President and CEO of the IIA.

A good accounting blogger is…
Not somebody who writes about (yawn) accounting, but about the accountant’s role in business and advancing the success of his or her organization.

The biggest issue facing accountants today is…
Will the inevitable court cases around Lehman and the principle of ‘fair presentation’ change the nature of external auditing, so that compliance with the rules of US GAAP is no longer sufficient?

Best accounting firm we’ve never heard of (and why they’re great)…
The firm that John Cleese worked in Monty Python (accounting is not boring). Seriously, though, the best accounting firm is the one that puts the interests of its customers first and foremost, consistently performs quality work, exercises fine judgment, provides sound and valuable advice, and sets fees that are reasonable by eliminating unnecessary work and recognizing that fees should not rise faster than wage inflation. You have never heard of them, because I have yet to see them. Sorry, sad, but true.

Professor David Albrecht: IFRS Will Make Financial Statement Comparison an Impossibility

Ed. Note: This is the second installment of our dialogue with experts on International Financial Reporting Standards. See our first post with IFAC President Bob Bunting here and if you are an IFRS expert interested in joining the discussion, please contact us at tips@goingconcern.com

It’s appropriate to disclaim that The Summa’s Professor David Albrecht is a friend of Going Concern and for the most part he and I share similar views on the US conversion to IFRS. If you have not read any of our previous rants

IFAC President Bob Bunting: IFRS Adoption Is Necessary to Keep U.S. Businesses Competitive

International Financial Reporting Standards (IFRS) will continue to be more prevalent in the accounting landscape. Regardless of the SEC’s strategy of procrastination, it is the opinion of many that it’s a matter of “when” the standards will ultimately be adopted by public companies in the United States, not “if.”

There are many questi have related to this important issue. Accordingly, we’re opening a dialogue with experts of all opinions about IFRS so that you may be better prepared for this monumental development in financial reporting.


Bob Bunting is the President of the International Federation of Accountants (IFAC). Mr Bunting is former Chairman of the AICPA Board of Directors and the former Chairman and CEO of Moss Adams, serving in that role from 1982 to 2004. He currently serves as the lead partner for Moss Adams’ International Services Group.

Do you support the adoption of International Financial Reporting Standards in the United States? Please explain why or why not.

We definitely support the ultimate adoption of IFRS for publicly listed companies in the United States. Our principal trading partners, including Europe, Canada, China, India, Brazil, and Mexico, have already either adopted IFRS or are well on their way to a mandatory adoption date. Most U.S. public companies have at least some exposure to foreign markets and will have to grapple with IFRS even if it’s not the U.S. standard. The cost of conversion to IFRS in the United States will pale in comparison to the long-term costs of dealing with a dominant world standard (IFRS) for out-of-country reporting and having to maintain U.S. GAAP systems and reports for U.S.-only reporting.

What’s the most common argument you hear against IFRS?

There are a number of myths associated with IFRS. One is that it’s a “foreign” standard. In fact, the United States has been a dominant force in the International Accounting Standards Board (IASB) from its inception, and the convergence process between the IASB and the U.S. FASB has profoundly affected the shape and direction of IFRS for many years. Another complaint is that IFRS might not be “robust” enough for the U.S. market. This comes in part from the fact that IFRS is principles-based and U.S. GAAP is rules-based. Codified U.S. GAAP runs approximately 17,000 pages of text because of its rules orientation, whereas IFRS runs fewer than 3,000 pages. Since the FASB and IASB have been on a path to converging the two standards for more than six years, it’s hard to argue that one standard is more robust than the other.

If I’m a client that is skeptical of IFRS how do you convince me that A) it’s the best thing for my company from a financial reporting perspective and B) it’s the best thing for my company from a cost perspective?

IFRS may not be the best near-term option for a purely domestic U.S.-based company. However, companies with substantial international footprints have found that the cost of operating under two standards is far greater than operating under one. This cost will seem increasingly burdensome if the United States becomes the only country in the world not using IFRS.

Does it make a difference if the United States follows one set of rules and the rest of the world follows another set of rules?

It could make a huge difference, as the U.S. banking industry discovered in the early stages of the financial crisis. A good illustration of this is the debate over fair value. Multinational companies compete for capital globally. If U.S. and international standards require different approaches to fair value, it’s highly likely that either U.S. companies or their foreign competitors may find that their respective financial performance looks better or worse under one set of standards than the other. Companies reporting under the more attractive standard may report better results. In extreme cases those results could be the difference between apparent success and technical violation of lending covenants or even bankruptcy.

It’s a big challenge for accounting professionals to keep up with the rules that they currently follow. Is it reasonable to expect them to prepare for a switch to standards that will drastically change their methods?

We recognize that many accountants might be tempted to make this argument. However, as capital, trade, and even small companies become more global, an ever-larger portion of the accounting profession has been forced to learn at least two standards (IFRS and U.S. GAAP). This large and growing portion of the accounting workforce recognizes that one standard is a lot easier to keep up with than two. As IFRS grows in its dominance—and make no mistake, it’s overwhelmingly the dominant standard—U.S. accountants run the risk of having their skills marginalized and their job prospects limited by their desire to avoid change.

Only a small number of colleges and universities are implementing international rules and standards in their curriculum. How will higher ed catch up?

I visit with many U.S. accounting professors in my role as president of IFAC. Virtually all that I have met with are introducing IFRS content in their accounting curriculum. Most seem to accept that IFRS is an eventual certainty, and they would love to have better guidance from the regulators so that they can plan for transition better. Additionally, financial reporting is only one part of an accounting education. Integrating IFRS into a curriculum should involve three or four classes out of dozens that accounting students are required to take.

How would you respond to the argument that the only people that will benefit from the conversion to IFRS are the partners in large public accounting firms?

While adoption of IFRS in the United States will create new revenues for some accounting firms, they won’t be the principal beneficiaries. I’m pretty sure that the SEC commissioners did not confirm the IFRS road map to enrich accountants of any stripe. IFRS adoption is ultimately necessary to keep U.S. businesses competitive in the global contest for capital and investors. U.S.-based multinational companies have been strong supporters of IFRS adoption as a means of reducing their financial reporting costs and ensuring a level playing field with their foreign competitors. This ultimately benefits U.S. investors, and this is whom the SEC commissioners are charged with protecting.

The SEC remains cautious with regard to IFRS. What is your reaction to their recent announcement?

The SEC is charged with protecting U.S. investor interests. They’ve expressed concern about the lack of investor input during the comment period following the original publication of the road map. They’ve committed to gathering further input from investors as part of the new work plan. The fact that the commissioners recommitted to the road map, with some changes, suggests that they think adoption of IFRS is more likely than not to be in investors’ best interests. It seems prudent to be cautious and seek more input, but we doubt that the outcome of this process will do much to change the commissioners’ decision.

Doug Shulman Takes It as a Compliment That the IRS Is the ‘Go-to’ Government Agency

If you’re a member of the AICPA the biggest benefit you enjoy is not the prestige, not the certificate that you have mounted on your wall but the Journal of Accountancy that shows up in your mail every month. It’s really solid that your firm shells out good money on an annual basis so you can add new Excel tips to your spreadsheet wizard repertoire.

JofA manages to talk to a number of high profile as well, which you would expect from a behemoth professional journal. Case in point, when we received the latest month’s issue we couldn’t help but get a little giddy seeing Doug “Help me, help you” Shulman. We flipped to the Q&A immediately after seeing his handsome mug on the cover only to find the Commish’s picture at right. It makes us think that he’s channeling Monty Burns, which some of you probably find appropriate.


The Q&A is pretty much what you would expect, touching on the new preparer regulations, “We ran a very open, transparent, public dialogue about this,” to threatening offshore tax scofflaws, “The U.S. government is getting very serious about rooting out offshore tax evasion,” and warning whistleblowers not to expect that money any time soon, “[T]his could take multiple years to get the awards out. But I’m a big fan of the program.”

A couple of more interesting statements, include how excited Dougie is that all the assignments that other government agencies don’t want, get dumped on the service, “it’s…a big compliment that we’re seen as a ‘go-to’ agency in government.”

That being said, this particular interview was certainly conducted prior to the passage of the healthcare reform bill and no mention of the IRS’ role in enforcement (or lack thereof) was brought up. Maybe if the JofA had seen the Bill O’Reilly/Anthony Weiner throwndown it would have been a stop the presses moment.

The only other thing worth noting is that pizza parlors around the country might want to tighten up the ship in the coming months, “We will build features into our technology system so if we see, say, a pizza parlor that says they had $90,000 of sales last year and it shows that they had $85,000 of credit card sales and we know that pizzerias have a lot of cash sales, that will be a red flag. We’ll use it to better target our audits, to see where there’s potential noncompliance, and then we’ll use it to better focus our resources.”

Maybe the Commish is just giving an example of what a red flag is but using this particular example rather than say, a celebrity, seem peculiar. Just leave Di Fara alone, okay?

Tax From the Top: Q&A With IRS Commissioner Doug Shulman [Journal of Accountancy]

Five Questions with Sara McIntosh

Sara McIntosh’s (a pen name) blog is described as “Devoted To Rocking the Worlds Of Finance, Accounting and Auditing.” And if you’ve read any of her posts you’ll know that by “Rocking” she means in the carnal sense.

She is a lifelong writer and accounting/finance industry expert and entrepreneur. After earning an MBA at Northwestern, she started her own finance and accounting consulting business specializing in acquisitions, implementing worldwide accounting systems, haltingg systems malfunctions in global financial operations.

Having conquered all her professional goals she now focuses on writing, having completed her first novel Shell Games in the Summer of 2009. She is currently working on her second novel, Tricks of the Trade.


Accountants are . . .
Sexiest when thinking outside the box.

What are your three must-read accounting blogs and one must-read non-accounting blog?
Francine McKenna’s posts here at GoingConcern and at her own blog, re:TheAuditors – There is no one else that I’ve read that tears apart the accounting essentials from complex 10Ks and 10Qs and scours board minutes to report on the indisputable facts about frauds and other financial shenanigans behind the recent financial crisis and pointing toward future blowouts waiting to happen.

Professor David Albrecht’s The Summa – Hands-down his posts are the most interesting briefs on everything you need to know about accounting standards. That world is going through some crazy, most-likely-not-in-out-best-interest changes right now and he is one of the few voices in the industry trying to stop the decline in U.S. financial reporting standards.

Edith Orenstein’s FEI (Financial Executives International) blog – What can I say, Edith is everywhere! If you only could go one place to find out everything going on in the accounting, finance and audit industries her blog posts would be the place to go, period.

Chris Brogan – He blogs about blogging and other social media galore. He is an amazingly high-energy, extremely warm and witty guy—and it comes across in his posts, making them all the more memorable. He also has a best-selling book on the subject entitled, Trust Agents.

If someone had to read just one post of yours which one would it be?
According to the rest of the internet universe, “Handcuffed Without Consent.”

The biggest issue facing accountants today is . . .
How to restructure the audit industry to become a profession based upon integrity (auditors no longer selected, managed and paid for by the companies they audit) versus what we have today—an environment too often based on greed. If we get the restructuring of the audit industry right, the crooks who ruin it for the rest of the public audit professionals will leave the industry for more lucrative pastimes elsewhere—you’ll most likely find them in the executive suites of their former clients.

Best Accounting firm we’ve never heard of . . .
The Johnsson Group, based in Chicago. Their specialty is improving the internal financial operations of some of the largest corporations in the world. They’re the been-there, done-that consultants every major corporation wishes they had in their back pocket long before the regulators started knocking . . .

Five Questions with Accounting Professor David Albrecht

You might know him as Professor Albrecht (at least I still call him that) or you may read The Summa and have no idea who the guy is.

JDA recently forced him to answer some questions to get to the man behind the adamantly anti-IFRS curtain we love so much and discovered he’s proud to be a dissenting voice in the argument over global accounting standards convergence and then some.

First of all, Prof Albrecht is way more old school than just about anyone. He was “blogging” on listservs before there was a such thing as a blog and Caleb and I were still playing 8-bit Super Mario Bros.


Alright, maybe we’d advanced to AOL by the time Professor Albrecht was set loose among hundreds of accounting professors from around the world, the point is he’s been around. The Summa is only about a year and a half old but if you’ve ever read an accounting blog, chances are you’ve seen his work.

Secondly, he’s got opinions and lots of them. Better yet, he enjoys being a teacher; spreading the knowledge both to his own students and the “students” around the world who read The Summa regularly. That means he’d be happy to teach you why he feels the way he does but won’t hold it against you if you feel differently. That’s an admirable quality, and only part of what makes him one of my favorite accounting bloggers.

He also takes interrogation well.

Why do you blog?
I believe that writing something down helps you put your thoughts in order. Writing actually helps me figure out what I think about something. I want to make a difference. Blogging about IFRS is a way of drawing attention to the “other” side of the issue, the one you don’t hear from the large accounting firms or the SEC or the IASB or the EU.

Why should you accountants read your blog?
To find out an accounting professor take on accounting/business/finance issues. I’ve been on an e-mail listserv with hundreds of accounting professors from around the world for 14 years in the thick of many discussions. I take what I learn from these discussions and bring them to The Summa.

If someone had to read just one post of yours which one would it be?
I’ve written dozens of posts on IFRS, and you want just one? Dave Albrecht–IFRS Critic

A good accountant is…
Someone who can tell left from right.

Best Accounting firm program we’ve never heard of…
The Concordia College (Moorhead, MN) accounting major.

(UPDATE) Jim Turley Breaks Out the Fancy Footwear for His Interview on Bloomberg

~ Update includes quote from Britt Aboutaleb of Fashionista

We meant to get to this on Friday but there was a social engagement occurring that couldn’t be avoided; you know how it is. Anyhoo, the Ernst & Young CEO sat down with Bloomberg last Friday to talk tax policy and we found a few things rather interesting. Watch and we’ll chat about some things after the jump:


First things first: How about the two hotties that Bloomberg threw at JT?

Second: why does the MSM always refer to the “Big 4” as the “so-called Big 4”? Does Big 4 carry some negative connotation in some corners of society or is it meant to be a not-so-subtle dig, like when you call the token short guy on your team “big guy”?

Third and of utmost importance: what’s with JT’s footwear? Are those Timberlands? Does he just put on whatever the wife lays out for him or did she happen to take all of his wingtips to the cobbler this week? OR did he just get back from hiking the Appalachian Trail à la Mark Sanford?

Whatever the situation is, they look like they’ve gotten some good use. We’re not sure what Jimbo likes to do for recreation but it must involve some rugged backdrops that may involve him wearing a flannel shirt and chopping wood.

Britt Aboutaleb, one of the editors of our sister site, Fashionsita, had these thoughts, “I can’t even see the shoes — they look like they’ve emerged from a swamp! Maybe he forgot the shoes he was supposed to change into after trekking through the snow? Or maybe he didn’t realize his feet would be caught on camera…”

God, we hope JT could have arranged for some car service rather than schlepping through the snow. On the other hand, maybe walking to interviews is part of a green initiative? Either way, he could have brought the shoes along and changed into them. Just a thought.

On the other, to say that this is a fashion faux-pas would be an understatement akin to saying “E&Y had a few layoffs last year.”

Five Questions with Edith Orenstein of FEI Blog

Anyone out there have to comply and/or pay attention to the anything and everything that is dropped by the SEC, IASB, FASB, or PCAOB? Does the mere thought of reading anything that these bodies cause you consider drowning yourself in the nearest toilet? Us too.

That’s why we like Edith Orenstein so much. She is the Director of Accounting Policy Analysis & Communications at Financial Executives International and the author of the FEI Financial Reporting Blog. Edith has the amazing ability to take all this regulatory wonky goodness and put it into a wonderfully concise package. She saves you to the trouble of drowning in minutiae and gives you what you need to know.

Plus, she’s really nice. Think of it this way: in terms of temperament, Edith sits on one end of the accounting blogger spectrum; on the other end is the Jr. Deputy Accountant.


Why should accountants read your blog?
To learn about what FASB, the IASB, the SEC, or the PCAOB decided yesterday or today, and why it matters. And when Congress, Treasury, GAO or another agency gets into the fray, that’s always something of interest.

If someone had to read just one post of yours which one would it be?
Auditors in Love (which links to an ‘accounting music video’ which has received over 5,000 views, by the way.) No! Just kidding! It would be “Why Accounting Matters.” But, in all seriousness, some of my personal favorite posts are the ones in which I could tie in a musical theme, like Under Pressure, Unstuck From the Moment, and Say-Say-Say On Pay.

A good blogger is…
Someone who can give you really good facts on a timely basis, or really good insights, or both.

Who is your favorite blogger?
Francine McKenna of Re: The Auditors. I don’t always agree with what Francine says, and it’s not unusual for us to have opposing points of view or perspective on certain matters, but I respect what she writes given her extensive background in practice, and I enjoy reading her blog; let’s face it, she’s got that tabloid quality that makes reading about auditing fun.

The biggest issue facing accountants today is…
The volume and complexity of accounting literature (GAAP), throw in a dash of SEC, PCAOB, AICPA regulations and standards, and a pinch of COSO, (not to mention IRS rules and regs and other regs) and I have to give a lot of credit to practicing accountants and auditors who are faced with keeping current on and correctly applying all of these standards and rules. And IFRS is looming over the horizon; as someone said recently on an academic listserv I read (the AECM listserv), IFRS is significant whether or not the U.S. moves to adopt it, given that most of the rest of the world has.

Five Questions with the Jr. Deputy Accountant

You’re probably not aware of this but the Jr. Deputy Accountant (aka Adrienne Gonzalez) has been working outside her normal confines of the Bay Area this week in an undisclosed location.

While her current location is a mystery, what’s not up for debate is her ability to opine (frequently with too many words) on all things Federal Reserve, church accounting or the CPA Exam.

Besides her daily chores at GC, JDA has been published at a plethora of other blogs including Goldman Sachs 666 and BankFailFriday
.

Why do you blog?
For the same reason people play Grand Theft Auto; it helps to have a productive outlet for my frustration with our regulatory and banking system. That and I’m an attention whore.


What are your three must-read accounting blogs and one must-read non-accounting blog?
I love Krupo.ca, Skeptical CPA, and The Summa. For non-accounting, I’d have to say either Lew Rockwell or Daily Reckoning for my daily dose of doom and gloom. I’m obviously a miserable bastard.

If someone had to read just one post of yours which one would it be?
I’m partial to my recent “Fed Year in Review” but with almost 2000 posts, how the hell am I supposed to pick favorites? “You Want to Audit the Fed But Why?” is also a favorite of mine.

Accountants are…
Awesome because they pay my bills.

The biggest issue facing accountants today is…
Globalization. It’s the vampire lurking outside of accounting’s window whispering “let me in” and too few accountants are focused on the impact. IFRS adoption in the United States is a perfect example of what happens when we bow to global expectations in financial reporting and accounting. I of course don’t believe we need to bow to anyone.

How to Charge the Client: Killing the Billable Hour with VeraSage’s Ron Baker

I’ve long wanted to track down VeraSage’s Ron Baker and pick his brilliant brain; at last, JDA had the opportunity to steal a few minutes with the man credited for killing the billable hour.

In his 15-some years crusading against the ridiculous measurement of “time” as a performance gauge, Ron has made quite a few steps in the right direction. Seven to ten percent of 90,000 firms have moved away from time sheets and toward “value pricing”, with 1,000 or so firms eliminating the billable hour completely. While he admits it’ll be a cold day in hell when the Big 4 follow suit, he’s encouraged by the momentum.


“There is a change and it is coming from customers,” he says, “[unfortunately] the billable hour has survived many recessions.” The rigid “that’s how it’s always been” structure of public accounting, specifically, doesn’t seem to be taking the idea well. “They’d rather be precisely wrong than approximately right,” he says of major accounting firms trapped in the billable hour vice.

Encouraging value pricing in pay structures is a slow process, he says, equating the movement to that of Germ Theory in the 1800s. It was hundreds of years from the time “contact contagion” was theorized to the time it was generally accepted in medicine and eliminating the antiquated pricing structure of employee incentive won’t go down without a fight either.

Billed as “a think tank dedicated to promulgating and teaching Value Pricing, Customer Economics, and Human Capital Development to professionals and businesses around the world,” VeriSage seeks not to revolutionize business but improve it.

“You don’t let your surgeons pierce ears,” says Baker, meaning value pricing implies a company’s best soldiers will be dispatched to serve their respective battalions. In simpler terms, employees are paid results, not for how long they’re sitting in a chair. And in an uncertain economic environment, aren’t results what matter above all else? I’m not sure it could be much simpler.

Baker knows he’s got his work cut out for him but yours truly is 100% behind the idea. As a person who can tear up in one hour what five people can’t even accomplish in two, I get it. Boy do I get it.

Lucky for those who choose to accept what Ron is selling, he’s also a brilliant business mind. Knowing that Michelle Golden may have potentially criticized his website, he chose instead to hire her as a consultant. Genius! (Disclaimer: JDA loves Michelle Golden and isn’t just saying that because she doesn’t want to get torn up on her website – her “Accounting Blog list” is the most comprehensive I’ve ever seen.) She sits on their Board so she gets it. Excellent!

Want more JDA? Check out all of her posts for Going Concern here.

Tracking Charitable Donations? Now There’s a CPA-Developed App for That

In more non-iPad, Apple-related news, we learned earlier this week about iDonatedIt, an iPhone app developed by BMG CPAs in Lincoln, Nebraska. The app is designed to track all non-cash charitable contributions whether it be clothes, furniture or family members (okay maybe not the last one). This will allow you to track all of our donations to Goodwill, Salvation Army, etc. rather than receiving that crappy receipt they give you that has nothing on it.

Being interested in all things accountant-ish, we got in touch with BMG to find out how this bit of ingenuity came about.

We spoke with Todd Blome, a partner at BMG who came up with the idea and he told us that as soon as he got an iPhone he was thinking of ideas for apps that would be useful for his clients. Since Todd is the tech-savvy partner at BMG, (he heads up their IT consulting services) he started kicking around ideas right away and eventually landed on the idea for iDonatedIt.


Todd told us that the development was fairly simple and that there were only two test versions prior to releasing the app.

“So far we’ve 100% positive feedback on iDonatedIt,” Todd told us, “We’re definitely looking for suggestions for improvements or add-ons.” The one idea that has been floated to Todd was adding a tax savings tool to the app so that a user could determine how much tax savings would be created by the donations. “That will probably be in version two,” he told us.

iDonatedIt retails for $2.99 at the app store and as Todd noted, “a donation of one item pays for the app.” A version for the Droid is currently in the works as well.

Todd and the rest of of his team at BMG are kicking around a few more ideas for apps but he said they want to make sure iDonatedIt is working as good as possible before committing to another project. Check out the demonstration below and jump over the firm’s website or follow them on Twitter to give them your feedback.

Jr Deputy Accountant and Michael Panzner Discuss 2010 Part II: The Impotent Fed; An Election Year; Waiting for the Recovery

Thumbnail image for Thumbnail image for Thumbnail image for angry bear.jpgIn case you missed part one of JDA’s 2010 Outlook interview with Financial Armageddon’s Michael Panzner, you can find it on Going Concern here.
For the first half of my 2010 talk with Panzner, I focused on the other shoes left to drop; commercial real estate, political backlash, and the threat of the massive bubble still being inflated in China. But even bears have their bright sides and Panzner is no different. So what do we have to look forward to this year? Oh crap, more doom and gloom; sorry, I got my interviews mixed up.


Panzner points to our leaders’ missteps throughout the crisis as a major factor that could place a damper on any hope of recovery. “Many of the problems and imbalances that helped about the crisis have gotten worse,” he says, “That means people have less in reserve than they did before, and many have not positioned themselves for a ‘new normal.’ That suggests the next leg down, economically speaking at least, could be much worse than what we’ve experienced so far.” If only we’d been prepared for the worst instead of coddled into believing everything is better, eh?
When asked to take a guess as to when the Fed would finally raise interest rates, Panzner gave an interesting answer. “In my view, the Fed is no longer in control – of the economy or its destiny. For the most part, market and other forces, not the FOMC, will determine what happens to interest rates in future.” So I guess it doesn’t matter when they’ll raise rates, markets are no longer listening. Or are they?
A big picture sort of guy, Panzner identifies sociopolitical threats as another major concern this year, and with this being an election year (hello, Scott Brown anyone?), I’m willing to go on the record as agreeing wholeheartedly with him (shock). “Wait and see what happens to the social and political mood if and when the economy rolls over,” he says ominously.
Oh, believe me, JDA is waiting. And waiting. And waiting. Still no rollover but dammit, I’ll still be here twiddling my thumbs.
Hopefully I’ll get a chance to check in with Panzner again come summer to see where we are.
Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.

Five Questions with The Exuberant Accountant

Thumbnail image for confidence.jpgWe here at GC love accountants, contrary to what some of you might think. Starting today, we’ll occasionally introduce you to a few of the finest accountants in the blogosphere.

Our debut is with Scott Heintzelman, The Exuberant Accountant. Scott is a partner at McKonly & Asbury an accounting and consultaning firm in Camp Hill, PA. And make no mistake, this is one EXUBERANT accountant. The fact that he is a CPA, CMA, and a CFE should be enough to convince you. If you’re still not sure and follow him on Twitter and that should it.

Here are Scott’s answers to a few questions we threw his way earlier this week:


Why do you blog?
A passion to educate and arm busy organizational leaders with trends, best practices, and updates.

If someone had to read just one post of yours which one would it be?
Is Our Country on a Collision Course?

Accountants are…
Great lovers – at least that is what Mrs. Exuberant Accountant tells me!

If you’re an accounting blogger you must…
Hopefully understand assets less liabilities equals equity

What’s best accounting firm we’ve never heard of?
McKonly & Asbury – hands down the best kept secret!

Hit the Books Before Interviewing at Marcum

If you ever get an interview at Marcum, we suggest you break out whatever textbooks you have left, find some stimulants and cram the night before:

[My friend] had some crazy ancient partner interview her and he was talking to her and asked what her favorite grad class was and she told him one…so he wrote down 3 problems gave her code sections etc. and said i’ll be back in an hour and walked out and she was left there alone to solve them. He came back in and said i give this a B+ and then they offered her a position.

Or you could just ask the Accountant of the Decade to develop a new review course.

The JDA and Michael Panzner Discuss the Year Ahead

Thumbnail image for 2010.jpgEditor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
The last time I spoke to Financial Armageddon’s Michael Panzner for Going Concern, it was about how to prepare for the worst (while not necessarily hopinin September of last year. This time around, it’s the beginning of the year so even though I’m late, it’s time to discuss the 2010 outlook.
Panzner can also be found writing at
When Giants Fall and Huffington Post and if you don’t know his bio, it’s here.
First of all, before we could get to anything I had to have him explain his strong dollar policy again:
“There are a number of reasons why I expect a technical rally in the dollar even though my long-term view remains quite negative,” he said, “The fact is that even if the fundamental outlook is poor, prices can still rise in the short run if too many people — speculators and investors — are short or if other factors temporarily gain in importance.”
This explains why he seemed spooked by recent market behaviors, like everything from March 2009 on. You know, when things started getting wonky. Panzner is a classy bastard so he’s not about to make conspiratorial statements about the behavior of markets but let’s just say his feeling is that they’re performing less rationally these days. No shit. Might be all that fishy stuff going on but who am I to speculate?


He points to massive speculation and gigantic stockpiling in commodities, specifically oil. Gee, wonder who is behind that. He recognizes that China is at least attempting to clamp down on speculation.
He also admits to having underestimated how people will behave with free money. I find that statement incredible; didn’t we see the houses, big screens, and Hummers? It was obvious at the time and it feels obvious now. “Last time they speculated like there was no tomorrow, they were worried tomorrow would never come,” he says. Again, this from the man who brought us Financial Armageddon.
Interestingly, Panzner says if he could do the book over, he would have better predicted the contagious nature of the financial crisis. It scared the shit out of me when I read it for the first time in 2008. It didn’t seem sluggish at all the way he’d imagined it. In fact, I’ve been waiting for the bottom to drop out for months now after seeing how he painted it.
As far as threats go, he pretty much agrees with most of what I identify as the largest (the Fed’s dumb behavior, sociopolitical pressures, blahblahblah) and adds a few. He’s with most of us who feel CRE still has to drop, which places additional pressure on smaller banks. There are also the usual suspects; conflicts in the Middle East putting pressure on energy markets and municipal debt problems. Birmingham, Alabama is not an isolated incident, in other words.
I know Caleb gets pissed when I write too much so I think we’re good on the economic outlook for now, lest he come flame me as Guest. Whatever. Back with Part 2 on Monday: What comes after?

Because There is No Shortage of Criminals

fraud.jpgEditor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
Over the weekend, I had the pleasure of speaking with Sam Antar of White Collar Fraud. I won’t give him too many props (lest he think his wily criminal charms got to me) but our conversation was both relevant and disconcerting.
In case you aren’t acquainted with Sam, he’s the ex Crazy Eddie CFO who ripped them off and now does speaking tours talking about, well, crime. But there’s a lot more than that at work here, that’s just his schtick.


So what did I learn?
I believe my editor thinks I’m a doom and gloomer so here’s some good news: besides suggesting we start training more qualified forensic auditors fresh out of school, Sam insists there is a chance for real financial reform.
Do you take your reform advice from an ex-criminal? I remind you here that a tax cheat is in charge of the IRS, do with that information what you will.
Anyway, the point here is that financial statements lack integrity. Without integrity, investors are groping in the dark and criminals are able to execute their schemes. Foreign investors are scrambling to leave US capital markets, could that be because our statements are – generally speaking – unreliable?
So. Sam’s 3 step plan to restoring sanity to financial statements. Take it for what it is.
1. Redefine audit committees as truly independent. No member of the audit committee should derive a salary or other compensation from stock options or stock holdings. Period.
2. Committee members should be qualified. CPAs and securities lawyers are qualified to sit on an audit committee, not marketing managers and other “average” sections of the corporate population.
3. Forensic accounting should be standard curriculum in university accounting programs. Don’t eliminate 404(b), if a corporation can’t afford the audits required to be a public company, then don’t become one.
We’ll have to agree to disagree on that final point, I don’t think tedious audits are the solution. However, perhaps if we had more qualified auditors out in the trenches, I might be inclined to be slightly less skeptical about the effectiveness of more softcore audits.
Stay tuned as we’ll be picking Sam’s brain again soon.
GC Posts Referencing Sam Antar:
Grant Thornton: Patrick Byrne’s Pants Are on Fire
Obvious Sign of Fraud: You’re Having Sex with the Client