Traditions start when you do something every year, so we are continuing a tradition of listing the top 10 resolutions that all CPAs make and then just as quickly break in the new year.
- I will take some CPE every month so by the time December 2018 rolls around I will already be in compliance with my state’s CPE requirements.
- I will reread my emails before I send them out to make sure they don’t have mistakes in them.
- I will give timely feedback to my staff when they do something well or need to improve.
- I will incorporate exercise into my schedule each day no matter how busy I am.
- I will say no to a new project, client or request for my time at least once a month.
- I will not look at email at least one whole day while I am on vacation.
- I will spend 15 minutes at the end of each day clearing my desk and planning so I can start the next day productively.
- I will eat lunch with someone else at least 3 times each week. Maybe I can hit resolution #7 too by walking to lunch with the person!
- I will not multitask during conference calls so I know what is said and don’t have to ask people to repeat the question.
- I will not wish ill will on the members of the FASB despite having to deal with the new revenue and leasing standards!
What other resolutions do CPAs need to make and which ones do you think we will actually be able to keep this year?
As the end of 2017 approaches, I thought it might be fun to look back at the variety of topics I discussed over the past year.
Back in January I went philosophical and talked about how time was the great equalizer in the world and attitude and integrity were the items we each control about ourselves in the world. I concluded the blog series pointing out that freedom, which we all so cherish, is really about the ability to choose, which is integral to all three of the previous topics.
I continued to cover new developments in accounting and auditing standards. There was a blog about the updated definition of a business; but I also covered how the new revenue and leasing standards might impact processes not directly related to financial reporting such as budgeting. I looked back on the progress made in dealing with the unique nature of private company reporting, and I brought up some changes in auditing standards around fair value and the use of specialists that might have a noticeable impact on those involved in the financial reporting process.
I spent some time talking about jobs and careers, including my new position in the internal audit group at AT&T. I pointed out how being a CPA can provide a path to many different positions within a company. Finally, I talked about the biggest myth of being a CPA – that it’s all about the math.
I also delved into some new topics like Cyber-security which, despite its focus on technology, is often about the human element and basic blocking and tackling like limiting access and using appropriate passwords. I also revisited some old topics like board and management roles in internal control, pointing out that they have a huge influence on over half of the internal control principles which are in the control environment and risk assessment components.
Finally, we had some fun throughout the year talking about having fun in the office, what emoji you would be, and sharing an occasional top 10 list. I hope you have enjoyed the blog and I look forward to continue writing it next year.
Last year, I left my work of 10 years as a sole practitioner, serving mostly as a sales tax consultant, to the oil and gas industry to work with a startup entity – a new oil and gas exploration company.
That’s what you do in Midland, Texas. Oil and gas.
The company was full of engineers, geologists, and one CFO/financial specialist. One engineer was the CEO; the rest were VPs. I was rather lonely.
I was hired on August 31st and they asked if I could start the very next day. Having wrapped up the field work on all the current sales tax projects I had, I was looking for a new challenge. So of course, I said yes. I brought my own computer because the company was only two weeks old at that point and had no infrastructure.
The current accounting system was an excel spreadsheet. A check register. Quickly, we got me scheduled to attend a two-day training class being held by the software company that produced the accounting software we were purchasing.
I have been a CPA for almost 30 years; worked in industry in the past, as well as in public accounting. I’m not foreign to accounting systems; able to jump rapidly from one system to another (Quickbooks to SAP to Integra and back!) But in 30 years, this is the first one that I had to set up by myself from the beginning. A blank slate, with no databases filled in. No chart of accounts, no properties, no vendors, nothing. Start from scratch, so to speak. Did I mention I was looking for a new challenge?
There are several definitions available for the phrase “start from scratch.” For instance, here the phrase is described to mean starting from the beginning, to set out on some action or process without any prior preparation, knowledge, or advantage. That certainly felt like my position in the beginning. And in the meantime, we had two wells being drilled, vendors who wanted to be paid, employees to set up and get paid, governmental entities to register with (and get paid!), and nobody wanted to wait for a new system to get rolling.
With a lot of diligence and overtime, we did get it up and running, all the databases set up and all the previous transactions entered. We were actually able to enter payables and write checks like a real accounting department. Eventually another accountant was hired, and I had a chance to breathe. I looked down the road, and knew from my past experience, that every transaction I had entered into that system was going to be audited for year-end financials.
So I began the process of gathering the documentation for all the activity that occurred while the company was being formed. When I first asked for the documentation that supported our initial oil & gas acquisition (a mid-eight figure number), I was given the check stub that had been torn off the check that was written. A 2”x2” piece of green paper with a name and a dollar figure written on it. I knew I was in for a long row to hoe . . . there’s that new challenge thing again.
It’s been almost a year and a half now. The accounting system is fully populated, spitting out nice financials and operational reports, and paying vendors right regularly. There were a few mistakes, but we all know that mistakes can be fixed. Nothing is critical. Always make sure you can reconcile back to cash. I drew on the experience of almost 30 years, both in industry and in public accounting, to see where we needed to be and how to get there.
So I prefer the definition of starting from scratch that I found here. The author goes on to say the phrase actually originated in the sports world; meaning to take your position at the starting point, pick up your bat, club, or whatever is the tool of choice, and begin the endeavor. That’s a better description I think; as accountants and CPAs, we all draw on the tools provided by our education, training, experience and networks, especially when we are starting at the beginning of some new endeavor.
D’Anne McNaughton, CPA
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?