Archives for January 2009

Platt’s Perspective – What Just Happened?

Michael PlattAs we look back at the headlines from 2008, the collective refrain from businesses, accounting firms and individuals across the globe is, “What just happened?”

 Volatility. Deflation. Meltdown. Credit crunch. Recession. Depression? “201(k).” Scandals. Layoffs. Bailouts. Foreclosures. Bankruptcies. Climate change. War. As a nation, we’re exhausted, confused and anxious.

Whole institutions appear to be collapsing around us. The auto industry, the housing industry, manufacturing, construction, the financial industry. State governors are caught in scandals. Faith in institutions is teetering on the brink of massive distrust.

“Trust me” is a phrase that many people have grown quite skeptical of – and rightly so. Just like Charlie Brown trying to kick the football, over the past few years we have all slowly gained confidence in our institutions, and Wham! Inevitably, Lucy plucks the ball from the tee and poor old Charlie again lands flat on his back.

As public accountants, you may not have all the answers, but you do hold the key to one of the few trusted relationships that are still solid. You know your clients and have a unique opportunity to listen to them now. You bring a deliberate, structured approach to business decision-making and can help calmly create a roadmap forward. Clients are anxious and scared and they want someone to listen to them. Call them. Take them to lunch. Sit in on their management meetings. Get the “face time” now that will reassure them that you are on their side, because it is hard for them to see that anyone is looking out for them right now.

Within the profession, the situation is confusing too. In continued discussions with CPAs and consultants, we know the accounting profession is also going through its own share of angst. Clients are leaving. Projects are being delayed. Receivables are up and aging. Layoffs are reality.

Personal investments are down. Some firms will be experiencing negative growth for the first time in years. Business development is critical once again.

Younger accountants have never seen a cycle like this. They need guidance just as much as clients do. Those of you with a little more grey hair and experience need to bring a long view to your firm – a perspective that spans the ups and downs of economic cycles to help mentor and guide those who are still a bit green.

Practitioners we are talking to are using words like, “deliberate,” “structured,” “methodical” and “rational” to describe how they are approaching their client base and their own plans. Take heed. Hunker down, make a plan and continue with a clear vision for your firm. Don’t lose sight of the value that you bring to your clients.

In this issue of IPA, we explore some of the issues and challenges that lie ahead for the profession. We look at the economy, the new Obama presidency, continued consolidation of IPA Top 100 firms, and some of the opportunities that are directly in front of us. We hope this sparks some dialogue within your firm as to how to take some of the challenges ahead and turn them into business opportunities.

We wish all of you a renewed sense of opportunity and hope in the new year. We wish to thank our staff, the many partners, consultants, MPs and individuals who have over the past year, helped us along the way. We look forward to better times, to a more prosperous economy and to the positive changes that we are hopeful for in 2009.

January 2009 Of Interest

Consultants Share Insights On How Firms And Their Clients Can Get Through This Tough Economy:   The January 2009 issue of INSIDE Public Accounting offered a concise overview by various consultants on what CPA firms should do to get through tough economic times. This document provides more insight and a full reporting of ideas offered by consultants. (INSIDE Public Accounting)

The Economy’s Effect On Small Firms:   Jim Metzler, AICPA Vice President for Small Firm Interests, shares a special letter highlighting the thoughts of the Small Firm Solutions Editorial Advisory Board as they discuss the current economic climate and how it is affecting their firms and their clients. (AICPA)

The Bernie Madoff Scandal:   Access INSIDE Public Accounting’s overview of the Bernie Madoff scandal and what it will mean to CPA firms in 2009. (INSIDE Public Accounting)

2007 AICPA/Moss Adams Personal Financial Planning Practice Study:   This 2007 survey is the first joint survey of CPA financial planning and investment advisory practices. The study addressed performance and other operational characteristics in the CPA/advisory industry and identifies industry trends and practices of the most successful firms. (AICPA/Moss Adams)

7 Ways To Block Employee Fraud:   David A. Gruber and Sheldon H. Eveloff, CPAs with Amper, Politziner & Mattia’s Nonprofit Services Group in Philadelphia, share a article they authored that helps non-profits avoid fraud. Thanks to Amper, Politziner & Mattia and The NonProfit Times for making this available to IPA. (The NonProfit Times)

Audits From Top Eight Accounting Firms Still Show Deficiencies:   Financial Week reports that the eight largest U.S. accounting firms continue to exhibit substantial deficiencies in their audits of publicly traded companies of all sizes — six years after the passage of the Sarbanes-Oxley Act. (Financial Week)

Report Your Financials, Big Four Audit Firms Urged:   Under one plan, a big audit firm could gain liability caps and tax deductions if it submits its own audited GAAP financial statements to the Public Company Accounting Oversight Board. (CFO Magazine)

How the New Obama Administration Might Impact Business Performance Management:   The 2008 election was a campaign of change for both the executive and legislative branches of the U.S. government; now it is up to performance management professionals to find a way support that change from a software and systems perspective. (BeyeNetwork)

Melancon Responds to Accountant Ranking Article:   WebCPA received a letter from American Institute of CPAs president and CEO Barry Melancon taking issue with a recent story on a Gallup Poll ranking of the honesty and ethics of various professions. (WebCPA)

President Elect Obama’s Tax Proposals – An Update:   CCH provides a Special Report outlining the details of President-Elect Obama’s tax proposals and how they will affect individuals and businesses. (CCH)

Accountants Tell Obama What They Think:   Rick Telberg’s blog, “CPA Trendlines,” offers a light hearted commentary to President-elect Obama on what accountants think he should – or should not – do to try to fix the financial system and the economy. (CPA Trendlines)

2008 In Review: Congressional Impact on CPA Profession :   AICPA details three legislative victories in Congress this year: equalizing IRS reporting standards for taxpayers and preparers, preventing the Farm Credit System from expanding its pool of borrowers, and maintaining financial and compliance audits for the government-backed Federal Housing Administration (FHA) loan program. (Journal of Accountancy)

New York Passes CPA Education Law:   According to WebCPA, the New York State Senate and Assembly has unanimously passed a groundbreaking bill that would amend the laws governing CPAs and provide greater public protections for their clients. The legislation, A.11696-A/S.7497-B, was sponsored by Assembly member Deborah Glick and Senators Kenneth LaValle and Toby Ann Stavisky. The bill was passed by the Senate in mid-December and returned to the Assembly to be submitted to Governor David Paterson for signature into law. (WebCPA)

Small Accounting Firms Feel The Urge To Merge:   Long Island Business News outlines the trend of smaller accounting firms looking to merge to shore up succession plans and ensure practice continuity. (Long Island Business News)

SFAS 157 Fair Value Measurements: Implementation Challenges for the Alternative Investment Industry:   Rothstein Kass shares their guide developed last year regarding the current implementation issues regarding Statement of Financial Accounting Standards No. 157, Fair Value Measurements. (Rothstein Kass)

FASB Will Launch New Standards Codification in July:   The Financial Accounting Standards Board plans to introduce a new official accounting standards codification on July 1 that will supersede other sources, including the AICPA. (WebCPA)