Why are people afraid to have fun at work? While there are lots of articles on how to retain your employees, I’ve found that the most important factor in people staying with your organization is if they enjoy working there. What better way to help people enjoy something than to have a little fun and make them laugh. The best part is fun doesn’t require a budget, it only requires the willingness to take a little risk.
For example, my team was kicking off a new project and having a meeting with several key stakeholders. We decided to have a little fun by picking a theme song for the project. Just as we were starting the kickoff meeting I introduced our theme song and played it over a speaker from my iPod. Everyone got a good laugh and it set the tone that while we were all about doing important work, we could have a little fun at the same time.
A different project team decided to pick a mascot for their project and opened the meeting explaining why the mascot represented what they hoped to accomplish as a team. They even brought in a stuffed animal to serve as the mascot and the stuffed animal attended all key meetings of the project team. It seemed silly at first, but the stuffed animal served as a reminder of serious work the team hoped to accomplish; while at the same time making everyone smile when people started asking “what would the mascot do?” when the team was debating questions and answers.
I get that everyone is a little worried about less than serious behavior being seen as unprofessional. After all, we are CPAs. We’re supposed to be serious and boring. I don’t know about you, but I believe serious and boring has its place; it’s just not the entire day, every day. My recommendation is to take a chance, especially if you are a leader in the organization. If people see that you are willing to smile and have a little fun, they will feed on that and come up with fun ideas on their own.
Most people who don’t know me well are stunned to learn that I am an introvert by nature. They look at me and say, but you take on these leadership roles and you speak in front of audiences of hundreds of people and you seem so in command, how is it possible that you are an introvert? My answer is, have you seen me at the end of the day when I do those things? I’m exhausted. Introversion versus extroversion is more of a definition of how you recharge your batteries. In my case, being alone or with one or two people I know very well is the way I recharge my energy. Extroverts, on the other hand tend to get more energized the more interactions they have in a day.
That brings me to the most exhausting and petrifying part of my specific form of introversion, the networking event. I’m great in front of a large audience, but putting me in a room full of people and asking that I initiate individual conversations creates a sense of dread that is like going to the dentist to have a root canal. In fact, having had two root canals, I can honestly say I would rather have a third than have to mingle in a room full of people I don’t know.
While I love Christmas time, I even got married a week before Christmas, the parties can leave me wanting the get the season over with as soon as possible. In fact, one of the reasons my wife and I always put on a Christmas party was because it allowed me to always have to go do something, replenish the punch or get out more hors d’oeuvres, to get out of the conversations that I dreaded. But then I realized something was happening. By taking the conversations in small bites, I became more comfortable making the small talk, asking questions and bringing other people into the conversation so I could move on and talk with others.
I also realized that my learning was helped by the fact that I knew more of these people and the gathering was purely social. There was no business on the line. So, over the years I began to use all the Christmas parties as a great time to practice the one thing I dreaded the most, those small one-on-one conversations in a room full of people. I can’t say I’m cured. I still have a very hard time going up to people I don’t know at all. But each year I continue to practice, and I find that like Rudolph, I might be a little strange and funny looking, but in the end people are happy to have me around; and that makes putting the effort in going up to someone to talk worthwhile.
The focus of internal control testing is on control activities. The development of controls, policies and procedures, as well as, the ongoing execution of those controls is the focus of management and auditors. The PCAOB has reinforced this focus with pushing for more documentation on management review controls and information provided by the entity to the auditor.
All those controls are important, but without an appropriate control environment and risk assessment foundation, the likelihood of a control failure increases significantly. It is also at the control environment and risk assessment level that the Board and Senior Management play the most significant role in the internal control structure.
The Board and Senior Management must set the values, philosophy and operating style for the organization. In its purest form, they set up the expected standards of conduct and show them in what they do every day. Inherent in setting the operating style is determining the amount of risk the organization is capable and willing to take in in pursuit of its business goals.
Another aspect of key Board and Senior Management guidance is identifying and determining how to react to significant changes occurring in the business, the regulatory environment and in leadership of the entity itself. Finally, the commitment to competence is more than just platitudes about having the best employees. You must back up the words with actions such as developing (training) employees, paying to obtain and keep employees with key skills and certifications, and developing plans for succession, especially around key internal control areas.
If you would like to hear more on this subject, check out my AICPA webcast on December 11 at 12:00 CST. You can get more information on the webcast here.
It’s the beginning of the holiday season and one of my traditions at Thanksgiving is a blog on the things I am thankful for, so here it goes for 2018.
I’m in awe at the brilliance, dedication and integrity of everyone I meet in our profession. I know why there aren’t more CPA politicians; we just don’t fit in.
My Employer, AT&T
I was given another amazing opportunity to do something different that still was right in the middle of what we do as CPAs. In a few short months my new team has reinforced why I have stayed at AT&T for 25 years – the people are second to none.
My Professional Association, the TSCPA
I am humbled that the TSCPA has put its faith in me to serve our profession. I only hope I can live up to that trust.
My Wife and Family
They have been there and supported me every step of my life. My kids put up with the Society annual meeting being our summer vacation and my wife has attended so many events I’ve lost count. I would not be anywhere close to the person I am today if it wasn’t for them.
I only hope I have used all the gifts he has given me for the betterment of mankind and to reflect his glory.
What are you thankful for in 2018?
Sometimes I wonder if people really think about what they are saying. Certain phrases have become so common people don’t even think about how they might be perceived negatively. Here are a few phrases that make me cringe when people say them to me.
I’ll be honest with you
So you’re not usually honest when you talk to me? I do understand that the person is trying to communicate that they aren’t going to gloss over negative or potentially devise issues in what they are saying; but I do wonder if they feel they are being dishonest about their feelings or what is really going on during other conversations they have with me. This phrase immediately reduces the trust factor I have in someone, and that is the exact opposite of what the person is trying to accomplish.
Our people are our most important asset
OK, I’m biased because I’m an accountant, but to me asset equals property (think a computer) or rights (think a patent or copyright), so is this phrase saying that the business owns their employees? I thought we got rid of slavery 150 years ago in this country. Its fine to say our people are what makes this company valuable, but to say they’re an asset takes the ownership aspect to a different level that just drives me crazy.
They won’t respond to my email/text/instant message
Do you know that phone in your hand can call people too? Maybe the email never got through; maybe the person doesn’t understand what is being requested or misunderstands and thinks it is a much bigger ask than intended. It’s amazing how much can be accomplished if you just pick up the phone or get up from the desk and actually talk to someone.
I guess you didn’t do anything special for me after all. When someone says ‘thank you’ they are pointing out their appreciation for doing something for them, for putting them above other things that the person needed to do or could have done. Saying no problem tells the person they weren’t actually all that important. Even if the action wasn’t important or wasn’t inconvenient, why is it necessary to tell the person that. Let them have their moment that someone else in the world showed they mattered. ‘You’re welcome’ communicates all that and more.
So what phrases do you hear regularly that drive you crazy?
From the number of discussions I’ve been having with my staff and my own children, I have come to realize that savings methods CPAs think of as second nature aren’t second nature to many people out there. My discussions this year have focused on traditional versus Roth 401(k) contributions, HSA versus FSA contributions, and HSA versus 401(k) contributions.
Let’s start with the last item first. My advice is always to contribute enough to your 401(k) to get all the company match you are entitled to (if one is provided) before considering an HSA contribution. Not taking advantage of the match is like giving an employer a discount for your services. They’re willing to pay you more, but you say, nah, I’ll do the work for less than you are willing to pay me. I have one word for that: Stupid! Once you get the full 401(k) match, however, the answer on which to contribute to moves decidedly in favor of the HSA. While the traditional 401(k) includes a tax benefit for the initial contribution, and taxes are deferred on investment earnings, you do have to eventually pay taxes when the money is withdrawn (which is required by law after a certain age). The Roth 401(k) has the benefit of never paying taxes on investment earnings even upon withdrawal, but you don’t get a tax benefit against your current taxes for the amounts contributed currently. The HSA combines all three benefits – a current tax benefit for contributions, deferral of taxes on earnings, and no taxes on amounts withdrawn as long as they are used for medical expenses. With the way medical expenses are going, young people today will need all the money they can get for those costs when they grow old. The HSA has two added benefits – if you have a medical emergency before you retire and need to get to the money, you can withdraw it to pay those costs with no penalties; and if you need the money in retirement, you can withdrawal it and just pay taxes on the withdrawn amount like a traditional 401(k). That is a deal you don’t see every day from our government.
The HSA versus FSA decision usually is hands down in favor of the HSA because of the ability to carryover the HSA balance from one year to the next; but there are two situations where the FSA should get serious consideration. The most obvious is if you are not eligible for an HSA contribution. In order to contribute to an HSA, you must be covered by a high deductible health plan ($1,300 for an individual or $2,600 for a family). If you are covered by an HMO or a low deductible plan, then an FSA is your only option. The second circumstance is if you need access to the money early in the year and don’t have other financial means to cover the expense. An FSA allows you to get the entire amount you plan to put in the account on the first day of the year, while an HSA only allows you to get at the money already in the account.
The last topic is whether to make contributions to a traditional 401(k) or a Roth 401(k). Generally speaking, the younger you are the more a Roth makes sense, but there a lot of questions to consider. Will your tax rate at retirement be higher or lower than your current tax rate? Can you afford to put enough into the plan to get the full company match without the reduced taxes afforded by the traditional 401(k) contribution? And do you believe the tax structure (primarily an income tax) will be the same when you retire as it is today? Because I can’t predict the future, and don’t trust the government to keep their paws off my money, my advice is hedge your bets. If possible, put half in a traditional and half in a Roth 401(k). Whatever happens you got the answer half right and are better off than if you had picked the wrong one; but if you think you can predict the future, go for whatever fits your expected outcome better.
There is a lot more that can be said on this subject, but that would make this blog into a term paper and we don’t want to do that. And because people think they can sue over anything, please note that all the above advice is based on laws at the time of the writing of this blog and is worth what you paid for it – nothing. Any decisions you make about contributions to any of the above plans is a personal decision you, or you and your financial advisor should make based on your specific situation.
The AICPA Professional Ethics Executive Committee (PEEC) has proposed revisions to the code of ethics around how leases between an auditor and their client impacts independence. The changes were precipitated by the new FASB standard on leases because the current ethics interpretation on leases focuses on whether the lease is an operating lease or a capital lease. Currently, if the leases is an operating lease with comparable terms to similar leases, then independence is not considered to be impaired. On the other hand, if the lease is a capital lease, then independence would be considered impaired because a capital lease is like debt and, generally speaking, an auditor cannot borrow from a client.
As you are aware, the new leasing standard has changed the importance of the operating versus capital lease distinction now that either type of lease will show up on the balance sheet and either type of lease results in a liability (akin to debt) for the lessee. The PEEC therefore decided to take a ‘threats and safeguards’ approach that focuses on the terms and significance of the lease. If the terms are not market terms for similar leases, then independence is threatened, and the auditor is in violation of the code of ethics. Similarly, if the lease is material to the firm, an individual on the engagement team or someone who can influence the engagement, then independence is threatened, and the auditor would find themselves in violation of the code of ethics.
Like the new lease standard, the new ethics rules are no longer cut and dry based on the predefined criteria of an operating versus a capital lease. This means auditors are going to have to take more time to understand the leasing arrangements that exist and then use judgment to determine if those leases impair independence.
While the change does not directly impact CPAs in business and industry because independence is not an ethical issue we focus on since we aren’t independent to begin with; that doesn’t mean we should just ignore this interpretation. If you are in the business of leasing then these rules could make finding an auditor who is independent more difficult. The new accounting rules also increase the likelihood that service business might also be in the leasing business if it uses PP&E in providing service, so service companies might also have a similar issue in finding an auditor. Even if you have plenty of auditors to choose from, the new rules will likely add some additional administration to the auditor independence process and that might require the client (you) to provide more information about potential arrangements with individuals that work for the audit firm on an ongoing basis.
If you are interested in learning more about the proposed revision to the ethics code the exposure draft can be found here, and if you wish to comment, comments are due by December 20, 2017.