Once I started down this accounting path, it has taken the help of other CPAs to get me where I am today.
My first CPA mentor was at the bank where my father worked. We also went to church together. He helped direct me to public accounting and auditing. My most recent mentor is Benton Clark, CFO at United Way of Tarrant County. He’s my boss and has been at UWTC for over 40 years. I’ll have been here 4 years in May, and I can’t image what it would be like without having his guidance that whole time. Some of the ways that he’s helped guide me are:
Organizational History – Benton knows why we do what we do because he’s experienced the changes for the past 40 years. I’ve heard countless stories of our organization that would have been lost if he wasn’t here.
Leading by Example – On my first day of work, Benton was standing on a ladder, changing a light bulb over the front reception desk.
Let me say that another way. The CFO of the company was doing whatever needed to get done in order to keep business running. He isn’t “too good” for anything. If he’s not “too good,” I’m certainly not “too good.” This experience reemphasized to me the need for a servant attitude and respect for everyone in the organization. It’s called humility. In customer service, this attitude is essential. From my experience, most of accounting is customer service in some shape or form.
The other lesson I’ve learned from all of my mentors is that I can’t give back to them. Not really. They give a gift of information or direction. They provide the best possibilities from their own experiences, some being very painful.
When you’re given a gift that you can’t reciprocate, you find yourself being more generous to others. The reason I help other young students and CPAs is because of my mentors; because I was helped along the way. It’s knowing and accepting that I couldn’t have gotten here by myself and that others need that same help.
Brandon Booker, 33, is VP Finance and Controller, United Way Tarrant County. His background includes experience in public accounting and in corporate accounting with a major defense contractor. He is a member of the Fort Worth Chapter’s executive committee, and in June, 2015, will begin a term on the TSCPA board of directors. In 2013, he was named “Young CPA of the Year” by the Fort Worth Chapter for his leading work in establishing a ground-breaking accounting career education program, “Pathway to CPA.”
One of the key benefits provided to you by the AICPA and your state society is representing your interests in front of Congress and state legislatures. I was recently at the TSCPA Midyear Board of Directors Meeting in Austin and was reminded why such connections are so important. Many B&I CPAs would prefer not to deal with the political end of our profession and when I ask them why, they say it does not affect or interest them. I always recall the quote “just because you aren’t interested in politics doesn’t mean politics won’t be interested in you” when I hear such a response. So this week I thought I would suggest a few reasons why all CPAS, including B&I CPAs, should be interested in what goes on in their state legislature and why you should be thankful your state society works to protect your interests.
The first and most important reason is to protect the value of your CPA license. Because you are still a CPA, I assume you see some value in holding that license. The reality is that a lot of other groups also see value in the CPA license and they want to get some of that value for themselves. Whether they want to call themselves registered accountants, or any of a dozen other terms, their desire is to benefit from public confusion over their purported license while not adhering to the educational, professional and ethical requirements of being a CPA. Your state society makes sure the legislators understand these distinctions and stop efforts to confuse the public.
A second important focus is to keep the tax laws as efficient as possible. One example in Texas are the principles on franchise tax reform that TSCPA has distributed to the legislators. Instead of supporting a specific bill, the TSCPA has recommended several principles for the legislators to consider in any changes to the franchise tax. If we have to have a tax, then we need to keep the process of calculating that tax as efficient as possible. In the case of the franchise tax one significant simplification would be to use the same cost of goods sold calculation as is required for federal income taxes. This would cut in half the work businesses have to complete. Instead of two separate calculations, a business could develop one calculation and use it twice. Paying a tax can be painful, but necessary. Paying excess cost to calculated the tax owed is just like rubbing salt in a wound. When a change can be made that makes the calculation less painful with little change in the actual tax, we all benefit.
I could cite additional examples, but brevity like efficiency has a luster all its own. The AICPA puts out a monthly newsletter on its activities and you can find out more about what is going on in your state from your state society website. Check it out; you might even be surprised to find an issue or two important to you.
I attended the AICPA SEC and PCAOB Developments conference last week. For those CPAs in the public company or prospective public company accounting, reporting and auditing area, this is a must-follow conference. You can attend the conference in person or online, but even if you don’t do that, you can follow the conference via news releases, press stories, twitter feeds and lots of other ways on the internet. If you don’t follow the conference, you do so at the peril of your career because you need to understand what has happened in the past year and what will happen in the future in order to keep your knowledge current and relevant. With that in mind, I wanted to share my overall thoughts on the conference in this blog and then follow up with specific issues in subsequent blogs.
The theme of this year’s conference seemed to be Transparency. This term was used by the SEC Office of Chief Accountant (OCA) and Division of Corporate Finance (Corp Fin) extensively to explain why they publish speeches and why they are communicating the messages they communicate. This is to differentiate it from “rule-making” by speech. The point they tried to make is that speeches are not making the rules; they are explaining the process behind the SEC use of the rules. Another example is the 5 year shelf life on speeches expounded on by Dan Murdock, Deputy Chief Accountant, saying that as a speech gets old, you should put less and less credence behind what was said as the rules may have changed or the SEC staff’s thoughts may have evolved. It is clear the SEC is sensitive to the charge that they are making rules by speech which avoids rule setting requirements.
Segment reporting was again a focus of comments from the SEC. The OCA staff pointed out that reports provided to the Chief Operating Decision Maker (CODM), while an important factor in understanding segments, was not solely determinative of the segments of a business. They mentioned that just changing the report to not include a separate segment doesn’t mean that the segment doesn’t exist. The OCA also pointed out that the CEO is not automatically the CODM. In organizations where the CEO deals with strategy and a COO or an operating board makes decisions on current day-to-day operations, the CODM may be the COO or the operating board. Corp Fin brought up the point that preparers need to disclose their basis for determining their segments.
The final development I want to address in this blog is the potential for adoption of IFRS in the US for domestic filers. Keep in mind that the SEC already allows over 500 foreign issuers to file IFRS based financial statements without reconciliation to US GAAP. James Schnurr provided more insight on a potential new path forward on IFRS in the US. The idea is to allow US domestic filers to include as a non-GAAP disclosure IFRS based financial statements. This would be a voluntary disclosure and would have no impact on US GAAP, but it would allow the market to essentially decide if and when IFRS based financial statements are desired. It’s an interesting idea that will need to be fully fleshed out, but expect to see more from the SEC on IFRS in the coming year.
There was so much more talked about at the three day conference, but I can’t possibly include it all here. Check out future blogs and other resources you use for more discussion of the scores of issues discussed at the conference.
I had the privilege of listening to Bill Reeb at a recent presentation to the AICPA Controllers Conference in Las Vegas. He pointed out that there are several forces converging on CPAs as they advance to higher level jobs which will make us increasingly uncomfortable in the coming years.
- Technology is increasingly taking on the role of recording data and turning that data into information – or at least making it much easier to send that work to the lowest bidder, wherever that bidder might be located in the world.
- The lower you are on the information value chain;
DATA – INFORMATION – KNOWLEDGE – DECISIONS
the less you will get paid.
- The higher you are on the information value chain the less certain you are of the answers.
CPAs tend to pride themselves on certainty. We know the rules, be they accounting or tax, and run the numbers until we get to the right answer. This is what worked to make us successful early in our careers and we are reluctant to let go of the methods that brought us that success. The problem is while getting the right answer works on the low end of the information value chain, which is not what CPAs are asked to do as they advance in their career. Instead we are asked on take on the much more difficult role of producing knowledge and making decisions at the high end of the information value chain where certainty is a rarity.
In fact, at the high end of the information value chain you tend to run into a lot of people making stuff up and getting very well paid to do it. So the irony is the low paying job of coming up with definitive answers and information is going away or paying even less, while the high paying job of making stuff up is in increasing demand.
As CPAs we are going to have to learn to deal with the uncomfortable fact that our employers are not looking to us for the right answer, but instead are looking to us for insights and decisions on much less than perfect data. The sooner we become comfortable with this new paradigm, the more successful we will be in our career.
It’s Thanksgiving week which means it’s time for my annual top 10 things I’m thankful for related to the CPA profession.
10. The revenue recognition standard – By getting in on the ground floor of implementing this standard I figure it will guarantee me employment opportunities for the rest of my career.
9. Congress and the IRS – because when the FASB starts getting on my nerves I just have to look over the fence at what my colleagues in the tax area have to deal with and I realize how much better off I am.
8. Busy Season – because it occurs in the middle of the winter when I don’t want to be outside anyway.
7. Apple – because they made mainstream all the gadgets that allow me more flexibility of when, where and how to get my work done.
6. Billy Atkins and the PCC – When Billy took on the Chairmanship of the PCC he said he hoped that the efforts to simplify accounting for private companies would also eventually impact public companies. With the FASB initiatives around goodwill and simplification it looks like the PCC is having the desired effect.
5. The CGMA – three years in and the credential is starting to get some real traction; and I am very grateful I won’t have the take a test like everyone else who wants it starting 1/1/15.
4. The TSCPA and PAC – for working tirelessly to keep the regulations around the CPA license appropriate and maintain the value of the license in the State of Texas.
3. The DCPAS – For embracing this person from another State, making me feel right at home, and allowing me to continue to support the profession I love through my volunteer efforts.
2. My Colleagues – who through their efforts and sacrifice make me proud each day to say I am a CPA.
1. The Public – who continue to think CPAs are the most trusted professionals in the world.
One common theme for many business and industry (B&I) CPAs is that their CPA license is from a state different from where they currently reside. While CPA license mobility has helped ease the burdens on the need to get a license from any state where they may perform work, CPAs that work for public accounting firms generally must obtain a license from the state in which they reside in order to legally “hold out” as offering CPA services to the public. Because most B&I CPAs do not provide services to the public, but instead provide services only to their private employer, the same rules requiring licensure in the state in which they reside do not apply to B&I CPAs. Instead many B&I CPAs simply maintain their license in the state from which they originally were granted the license.
This makes perfect sense. Why go through the bureaucratic paperwork of getting reciprocity, and why pay for multiple licenses across multiple states if it is unnecessary? As a result of being licensed in a different state, many B&I CPAs also mistakenly believe that they are not eligible for membership in the CPA society of the state in which they reside. Nothing could be further from the truth.
Almost all state CPA societies allow a licensed CPA from another state to be a full member of their organization with all of the same rights and privileges of a CPA from their home state. And joining your local state CPA society provides B&I CPAs with enormous benefits. Being involved in a state CPA society is a great way to meet and network with CPAs from all parts of the profession including fellow B&I members that may be a great resource as they are dealing with the very same issues you are dealing with every day.
So if you’re a B&I CPA living and working in a state different from the one on your CPA license, check out your local state CPA society. They all have websites with information on the benefits of membership and what it takes to join. You might just find that your local state CPA society provides a great way to feel more at home in your new state.
When I tell talk to business and industry people about their professional organizations I often get the same reaction – “they don’t do anything for me.” I used to try to convince them they were wrong and their professional organizations did plenty for them.
Our professional organizations defend the value of the CPA license through work with state boards of accountancy and state legislatures. The number of less than intelligent ideas by well-meaning but uniformed non-professionals can sometimes be amazing. The simple act of informing and educating such people about how the profession works can have significant results. Our professional organizations work to keep the tax code and other laws and regulations rational and sane. I would agree that success in this area hasn’t been the greatest, but if you look at all of the crazy ideas proposed that didn’t make it due to the profession’s involvement, I think you would agree things would be much worse without our professional organizations.
I could add a dozen other things to that list but I quickly get that look of, “but none of that is FOR ME, what are they doing FOR ME.”
So I can talk about the great benefits like insurance, life and disability for example, but they can get that from other sources at rates and terms that are not quite as good, but not bad either. I can talk about CPE, but then they say it’s just a racket by the profession to get more money out of them for something they don’t have time for in the first place. I can talk about the ability to create a network of their peers to have for asking questions and seeking help and I get a blank stare.
I have come to realize there are many people that don’t get anything out of the profession because they don’t want to get anything out of the profession. I find that the saddest moment of all. Here are people that worked through five years of college, extensive days and nights studying to pass the CPA exam and at least a year of relevant work experience to finally get that CPA license and now they decide it isn’t worth another second of their time.
There are two realities about any time humans gather in groups of more than one. The first is that we do so to get something out of it, and the second is that you only get out of it what you put into it. The CPA profession is no different. Now when people tell me their professional organizations haven’t done anything for them I ask them, what have they done for their professional organizations? When the answer is “I paid my dues” I tell them anyone can do that. If you really want your professional organization to do something for you, then pay with some time. You’ll be amazed at how much more you get back.