Archives for March 2009

Don’t Let A Busy Tax Season Fool You: Things Are Getting Difficult For The Accounting Profession

Michael PlattIt is an amazing dynamic to witness when you get hundreds of successful partners in a room together and the conversation turns to the economy. It’s almost as if there is a collective game of “chicken” being played among these top professionals, as they puff their chests and very deliberately espouse the “opportunities” for their firms – all with a veneer of confident bravado that masks a growing unease about the future.
 
But speaking with them one on one, without the peer pressure of having to position the future just-so, as I had the chance to do with many at the recent Winning Is Everything conference, a nervous story begins to unfold and an uncertainty about the future is exposed. While optimism is a necessary ingredient to act on opportunity, the level of anxiety about the future is real and growing. It’s easy to be distracted right now with tax season upon us – but that just may be delaying some of the inevitable whacks that the profession is quietly bracing for after April 15.
 
It is my sense, after speaking with many over the last few months, that an ominous “THUD!” will be heard around the profession later this spring. When the busy work is over, and the bills are out, the accounting profession will feel the sting of a cash flow pinch that much of the rest of the economy is feeling today. And layoffs – a word not uttered in this profession in a long time – will be a reality.

Not many are admitting it publicly – maybe because they don’t want to spook the “golden goose” that will get them through tax season – but privately, the conversation turns darker. On the condition that their firms won’t be identified, one partner from an IPA Top 100 firm in the Northeast says it “will be brutal.” Another from the Southeast confides that “significant” layoffs are inevitable. And one MP from a firm in the West admits his partners will be “rattled” by the change in their compensation this year compared to last.

And what about the staff – the qualified professionals that you have so intently recruited and in whom you have invested heavily over the last 15 years as the shortages of good people plagued the profession? The staff who have never seen a real downturn before, much less one of this magnitude? How do they stay focused, motivated and essential guides for your clients while they are dealing with the same stresses and angst of seeing their spouses, siblings and friends lose their jobs?

If you recognize nothing else, know that today your staff are nervous. No, they don’t need to be told that “everything will be all right,” because in reality it may not be – at least not in the short term. What they do need is to know that the leadership of your firm is being proactive, is weighing workable options, and has a plan in place for how to weather the storm.

“Now Is The Time To Lead” – that was the familiar refrain from almost every presenter at The Advisory Board’s Winning Is Everything conference in Las Vegas. Now is the time to firmly make decisions, cautiously but deliberately move forward, and take advantage of opportunities while your competitors succumb to paralysis and fear.
 
Dan Sullivan, a strategic coach and a keynote at the conference, shared a story about what goes on inside the heads of cliff divers in Acapulco just before they take their leap. “Success requires you to watch the waves ebbing and flowing against the rocks, and time your jump accordingly. You can’t jump when you see a pool of water. You must jump when you look down and see bare rocks below you.” That’s what the profession is just now starting to see. And that’s the time to jump. – Michael Platt

March 2009 Of Interest

“Escrow The Audit Fee” – A Concept For Debate, by Steve Erickson:   CPA firm consultant Steve Erickson thinks it’s about time that the profession takes a clean look at how the audit fee is paid. Take a look and tell us what you think! (Steve Erickson)

Quick Tax Facts- American Recovery and Reinvestment Act of 2009:   CCH offers a quick glance at the key provisions included in the American Recovery and Reinvestment Act of 2009, including general tax relief, education, AMT relief, businesses and energy. (CCH)

We All Want to Embrace Social Media, But . . .    Blogs are easy for anyone to develop. Your challenge as firm leaders is to encourage staff creativity but have policies in place for any staff that blogs about their workplace experiences. We came across one blog at random – “Exciting Life of CPAs” – that might just border on what you would not want your public image to be. Disclaimer: We don’t know who this person is or who this firm is – but it wouldn’t be hard to figure out if you really started searching.

XBRL Update – Final Rules Mandating Reporting Dates:   In an attempt to empower analysts, the SEC issued a final rule mandating that all public companies begin reporting their financial results using eXtensible Business Reporting Language. The deadline for reporting varies for filers based on their size – the largest will begin using XBRL for fiscal periods ending June 15, 2009, and will be phased-in for others through June 15, 2011. Accounting talent is expected to be more in demand as a result of the final ruling. (SEC)

AICPA Offers Free Job Finder Site to Help CPAs Affected By Economic Downturn:   The AICPA is providing a free online job finder to make it as easy as possible for accounting employers and employees to find opportunities during the current U.S. economic recession. (AICPA)

Ex-BDO Partner Pleads Guilty In Tax Shelter Fraud:   According to reports, Michael Kerekes, a California attorney and former employee of Chicago-based BDO Seidman, has pleaded guilty in a tax shelter scheme. Prosecutors say Kerekes helped clients dodge $200 million in taxes. As part of the plea deal, prosecutors told a federal judge in February that Kerekes will cooperate in an ongoing investigation of tax work done while employed by BDO Seidman. BDO said in a statement that it “has cooperated fully” with the investigation. (PR Newswire)

NASBA Urges SEC to Withdraw Roadmap:   “Moving to convergence with, rather than adoption of International Financial Reporting Standards is the right path for the Securities and Exchange Commission to be following,” the National Association of State Boards of Accountancy (NASBA) told the SEC. Recognizing the need to have standards that work in a global economy, NASBA recommended that the SEC withdraw its “IFRS Roadmap” by U.S. issuers and instead support joint efforts to converge standards by 2011 by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). (NASBA)

Center for Audit Quality’s “Year In Review” Recaps Organization’s 2008 Journey:   The annual report from the Center For Audit Quality highlights the sucecsses of many of the activities that this AICPA-affiliated organization has embarked upon in the last year. (Center For Audit Quality)

Treasury Faults IRS For Lax Inspection Program:   The Treasury Inspector General For Tax Administration has issued a report presenting the results of their review to determine whether IRS Examination function employees appropriately inspect and examine prior and/or subsequent year tax returns when warranted. The report shows 1 in 5 audits failed to review the proper documents. (Treasury Inspector General For Tax Administration)

New SEC Chief Moves To Toughen Enforcement:   Securities and Exchange Commission Chairman Mary Schapiro announced a pair of measures to allow the agency’s enforcement staff to launch investigations into financial wrongdoing more quickly and seek penalties from companies that commit fraud. According to other reports, Schapiro may choose Charles Niemeier, a supporter of “mark-to-market” rules that some banks say worsened the financial crisis, as the agency’s chief accountant. (Washington Post, Bloomberg News)

Untouchable Accounting Rules? Really?:   In this editorial, Brian Wesbury, chief economist at First Trust Portfolios, argues that the federal government can and should step in to alter the mark-to-market accounting rules set down by the Financial Accounting Standards Board (National Review)

New Bill Would Eliminate IRS Penalties and Interest:   A Republican congressman has introduced a bill that would provide all U.S. taxpayers with immunity from IRS penalties and interest, but the main goal seems to be tweaking his Democratic colleagues. (WebCPA)

Failure to File New IRS Form 990-N Could Lead to Loss of Exempt Status for Smaller Nonprofits:   A leading provider of nonprofit information, reports that half a million nonprofits could find themselves stripped of tax-exempt status in May 2010. According to IRS estimates, that is how many smaller organizations have failed to file a Form 990-N. (MSNBC)

Rules – and Penalties – for Tapping 401(k)s May Soften in 2009, But Still Apply for 2008 Tax Returns:   As millions of Americans watched their retirement account balances plummet in 2008, personal cash constraints may have led many employees to consider tapping their diminished 401(k) accounts to cover immediate, pre-retirement needs. While distribution-related retirement savings rules may be modified in 2009 to authorize greater access to hardship distributions, CCH cautions taxpayers to be careful in using retirement savings for immediate living expenses absent urgency or emergency conditions. (CCH)

Tax Laws May Let You Squeeze Lemonade from Stock Market Lemons:   Some investors who were battered by the bearish stock market last year will be able to ease their pain a bit when they fill out their 2008 tax forms, according to CCH. Others will have the opportunity to apply some tax salve to investment wounds by making the right moves this year. But it takes careful record keeping and shrewd moves to make the most of the tax code’s provisions for stocks and other investments that go sour. (CCH)

Defining & Targeting a Campus Recruiting Program For Your Firm

For the last decade, the one commonality among all firms that I have consulted with has been the rallying cry “we just can’t find good staff.” Those firms with a campus recruiting program designed to fill this void often focus on answering the question “who can we get?” rather than “what do we want?” Many local and regional firms believe that their efforts are best spent aiming at second tier students, assuming there are no other alternatives and that the top recruits will naturally opt for national firms.

If this is how your firm has approached campus recruiting in the past, I’ve got two words for you: “Think again.”

Campus recruiting can be a challenging, exciting, stressful, fun and rewarding experience. Firms of all sizes can – and do – benefit from campus recruiting efforts which can often result in the Grand Prize – quality professional staff – and many additional prizes, if approached properly.

A campus-recruiting program is not a one-week-a-year activity, and should not be entered into as such. Similar to a professionally developed advertising/marketing campaign, the elements of a recruiting program include (1) a well thought-out approach; (2) an understanding of your firm’s goals and future growth needs; (3) a commitment to being visible over an extended period of time; (4) a targeted, pre-defined audience; (5) a clear understanding of specific measurable objectives; and (6) an offering that will match the needs and desires of staff prospects.

Let’s explore some of the questions you will need to answer in each of these elements.

A well thought out approach – Who will do the recruiting? How many people from your firm will be involved? What is your budget? Which colleges will you pursue? What activities can you do before, during and after the initial interview process? What staffing positions are you trying to fill? How many? Who are your immediate competitors? What type of campus exposure does your competitors have?

An understanding of your firm’s goals and future growth needs – Are you only looking for new staff? What about interns? What about gaining professors awareness? What about gaining alumni awareness and possible business? What are the short-term and long-term goals and needs of the firm?

A commitment to being visible over an extended period of time – Is this a one-shot deal or a relationship that you are trying to establish with colleges in your target area? Can you commit to ongoing activities throughout the year, i.e. job fairs, recruiting assistance, meet the recruiters activities? Can you commit to a multi-year approach? Are you prepared to accept the consequences and diminished returns of once-a-year activities?

A targeted, pre-defined audience – Are you looking for seniors? Juniors? Sophomores? Interns? What about high school students? Are you seeking only accounting graduates? Are professors/educators part of your audience? What about alumni? Which colleges will you focus on?

A clear understanding of specific measurable objectives – How many students have you shared your message with? How many positions have you filled? How many professors are recommending your firm? How much business have you obtained from alumni? How often is the school inviting you to speak? How many firm-written articles have been published in the school paper? How many students are inquiring about your firm?

An offering that will match the needs and desires of staff prospects – What do beginning staff/students want? What motivates them? What concerns do they have about your firm? What concerns/preconceived impressions do they have about the profession? How closely will your firm align with their needs?

Understanding your firm’s goals is key to the success of any campus-recruiting program. You need to identify what you want to accomplish – everything else flows from there.

Most firms start with the premise that they are trying to fill entry-level staff positions and are looking for the best and brightest prospects to attract. So, with that as a primary goal, how do you “properly” approach a campus-recruiting program? How can you “get into potential candidates heads” to identify what they are thinking, what they are looking for, and how you can best position your firm in front of them? You know what your motivations were when you graduated and started your accounting career, but times have changed somewhat and today’s accounting graduates may be approaching things differently.

The rewards of a campus-recruiting program are plentiful and can be a valuable part of your firm’s strategic plan. Knowing what you want to accomplish is critical, and is the first step in creating a successful ongoing program. Understanding the mindset of students is also critical. With proper planning, understanding, and execution, your firm can successfully reap the rewards.

Michael Platt shares his insights as a frequent speaker at accounting conferences throughout the world. Check out our catalog of training and presentations, or give us a call at (317) 733-1920 to inquire about bringing Mike out to your event.