CPA Success

More accounting grads than ever. Anyone hiring?

Accounting's staffing crisis may be nearing its end.

Finding and keeping talented CPAs has been an ongoing concern in recent years. This year, for instance, staffing was among the top 10 concerns for firms with two to 20 professionals, according to the AICPA's 2009 CPA Firm Top Issues Survey.

That could be about to change.

A new report from the AICPA shows that more than 66,000 students earned bachelor’s and master’s degrees in accounting last year. That's the highest level since the AICPA began tracking the data in 1972 and 3.5 percent higher than the previous record set in 2006-07.

“The historic growth of accounting degrees is especially significant now because it coincides with the CPA profession’s programs and efforts to attract young talent,” said Jeannie Patton, the AICPA's vice president for students, academics and membership. “Students clearly recognize the attractiveness of accounting as a rewarding and fulfilling career path.”

The question now is, will they find jobs?

As the economy tanked, so did hiring. Rick Telberg reports that total demand for new accounting graduates fell from 36,112 in 2007 to 25,488 recruits in 2008, although demand is up among mid-size and large regional CPA firms.

Still, the economy will turn around sometime -- some are saying sooner rather than later -- and it's comforting to know the talent will be there when it does.

That could bring on a whole set of problems, though. A report from Deloitte finds that 65 percent of executives fear losing some of their top talent once the recession ends. The reason? "(V)oluntary turnover (will rise) with leaders and workers with critical skills seeking new opportunities," said Jeff Schwartz, principal, Human Capital, Deloitte Consulting LLP.

Sounds like a good time to review our retention strategies ... but I guess we'll cross that bridge when we come to it.

Regulate tax preparers? Make sure you do it right

The IRS's crackdown on bad tax preparers is gaining momentum.

In June, the agency announced that it was preparing a series of recommendations meant to increase taxpayer compliance and improve the work of tax preparers. Those recommendations may include a call for all paid tax preparers to be licensed.

Since then, we've seen:

• Taxpayer Advocate Nina Olson cite "enhanced IRS oversight of federal tax return preparers" as one of her priorities for the coming year; and
• the announcement of a series of public forums at which consumer groups and tax professional organizations can offer input into the development of the IRS's recommendations.

Now comes word that the IRS is seeking input on tax preparer compliance from the public at large.

Is government regulation necessary here?

It's hard to say. The AICPA doesn't think so. It's convinced that the IRS already has the tools necessary to reduce tax reporting errors and ensure adequate compliance.

But considering all the recent headlines -- including the fact that the IRS is having trouble tracking the compliance of paid tax preparers -- it's apparent that the IRS is serious about heading down this path.

If that's the case, the agency needs to do this the right way.

In 2008, Maryland's General Assembly approved the creation of a new licensing and regulatory program for individual tax preparers. Thanks to significant work on the part of the MACPA and its legislative volunteers, this program includes the following provisions:

• All licensed CPAs and their staffs are exempt from Maryland's licensing requirement.
• The qualifications of tax preparers will be well publicized, as will the fact that the registered tax preparers are not CPAs, tax attorney or enrolled agents.
• Use of the terms "licensed" and "certified" are limited in Maryland, so as to not confuse the public.
• At least one seat on the new State Board of Tax Preparers is reserved for a CPA.

Maryland is exempting CPAs from the mandate and making them an integral part of the process. That's doing it right.

Let's hope the IRS follows a similar path. We'll be watching, just in case.

What do you think: Should the IRS regulate tax preparers?

Five things every CPA needs to be good at

I met one Allen Blue, one of the founders of LinkedIn, at the Association Digital Now Conference last April and was fascinated with how he was positioning the company to help professionals. He said they had identified five universal needs of business professionals. I think he is right.

Here are the top five things every CPA needs to be good at:

1. Staying up to date in your profession.
2. Managing your career (yep, you have to take charge of your own career).
3. Doing the work (research, productivity, communication).
4. Interacting with your peers and colleagues.
5. Becoming a leader in your field.

So what?

Allen will tell you that LinkedIn can help you in all of these areas. I think social media tools, including LinkedIn, can greatly enhance your productivity in these five areas. Start learning today at our self-guided learning site, www.cpalearning2.com,

You can watch Allen's presentation here,

Want to learn more? Join us for our webcast Web 2.0, Less Hype, More Help on Friday, Aug. 14 from 12:30 to 2:20 p.m. ET featuring our own Bill Sheridan.

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Can XBRL save Maryland's budget?

OK everyone, put your thinking caps on.

In light of a projected $700 million shortfall in this year's budget and an estimated $1 billion deficit next year, Maryland Gov. Martin O'Malley is looking everywhere for ideas on how to save money and cut costs. Now he wants to know what you think.

"We encourage all citizens to join in," O'Malley told The Baltimore Sun in launching a new online suggestion box. "Tradition is not a good enough excuse for continuing to do something in a suboptimal way."

Here's our chance, folks: Let's tell the governor exactly what we think. Leave us a comment with your best idea for how Maryland can rescue its budget. It seems like a state full of CPAs can come up with at least a few fiscally responsible ideas. Let's hear them.

In the meantime, here's mine: Give XBRL a try.

XBRL, of course, is short for eXtensible Business Reporting Language. It's a tagging language that helps companies electronically communicate their business and financial data to investors and other users of financial statements.

But it's much more than that. Supporters say XBRL has moved beyond financial reporting and is proving its mettle as a solution for reducing costs and increasing competitiveness.

And now governments are getting in on the act. Nevada Comptroller Kim Wallin told me that her state could save up to $600,000 in staffing costs and bring in an additional $5 million over two years by using XBRL in its debt collection process. Wallin is hoping to apply XBRL to other state operations as well.

So if Nevada can do it, why can't Maryland?

Sure, XBRL won't solve all of our budgetary woes. But if it could save one worthy program from being cut or stop lawmakers from enacting one bad tax, wouldn't it be worth it?

Give it some thought, Gov. O'Malley. Give it some serious thought. XBRL is helping at least one state cut costs and raise additional revenue.

Let's figure out what it can do for Maryland.

Is this the Year of the CFO?

The Economist calls this the year of the CFO, a year in which CFOs are more critical than ever to their organizations. 

"As financial skills are valued more highly, CFOs will make it to the corner office in greater numbers than before," the article reads. "Recession, credit crunch and the increasingly complex nature of global companies will all play directly into the bean counter’s hands." 

 

(Source: The Economist Magazine, "The World in 2009," November 2008)

It is no wonder that MACPA's own Tom Foard was sought out to give his unique perspective on the newspaper industry in a recent interview with the Baltimore Business Journal. (The photo above is from the BBJ's Nicholas Griner.) Tom knows a bit about the changes in this industry since he is the CFO of Publishers Circulation Fulfillment Inc., an outsourced delivery provider to major publishers like the New York Times, Wall Street Journal and USA Today.

This got me thinking about Tom's saying that the CFO wears many hats, especially in today's small and medium-size organization. All of these hats are essential to business success in these turbulent times. He has even developed a program for our Business Learning Institute titled Hats in the CFO Belfry, to highlight the sometimes crazy world of the CFO as they wear so many hats. Here are some of the hats, according to Tom:

1. Historian: Accounting for the organization
2. Detective: Fraud, internal audit and preparing for the external audit
3. Scribe: Financial reporting
4. Futurist: Forecasting and budgeting
5. Fireman: Protecting the organization thru enterprise risk management
6. Policeman: Keeping order through compliance (SOX, tax, internal control, governance)
7. Coach: Maintaining fiscal and financial fitness

Tom is a past chairman of the MACPA. He has been an active volunteer leader in the CPA profession, serving in many capacities with the MACPA, the AICPA and Financial Executives International. As chairman of MACPA's Business and Industry Committee, he played a significant role in reviving our extremely popular Business and Industry Conference. He is now chairman of the AICPA Business and Industry Executive Committee and a member of the MACPA's AICPA Council delegation. 

All of our "hats" are off to you Tom!

What do you think: Is this the year of the CFO and why (or why not)?

More resources:

• Top 8 Issues facing CFOs and controllers
• CPAs as CFOs: Why You Should Have a CPA in Your C Suite
• CPAs Can Be the Backbone of the FInancial Reporting System, a whitepaper by Robert Tarola

Maryland budget: From bad to worse?

Maryland has lived a pretty charmed life throughout this financial crisis. Employment is lower and business opportunities are more plentiful here than in most other parts of the country, and many economists are convinced the state is well positioned to weather the economic storm.

Still, I supposed it was only a matter of time before the Free State felt the pinch, too.

Nearly $280 million in mid-year budget cuts proposed by Gov. Martin O'Malley have been approved by the state's Board of Public Works, and that's only the beginning. O'Malley plans to cut another $470 million or so from Maryland's $14 billion budget before Labor Day.

O'Malley apparently is heeding the words of Warren Deschenaux, the legislature's chief fiscal analyst, who called for "prompt action" in a recent letter. "If the budget is to be cut, for most ongoing items, sooner is better than later," Deschenaux wrote.

The problem, of course, is tax revenue -- specifically, a lack thereof, and we have the recession to thank for that.

Spending cuts will bring the budget back into its mandated balance, but here's my question: What happens when the General Assembly reconvenes in January? Deschenaux writes that "in magnitude and urgency, (the situation) is equivalent, if not more substantial, than that which precipitated the special (legislative) session of 2007." All that session resulted in was $1.4 billion in new taxes.

Fortunately, thanks to the work of MACPA members and legislative volunteers, that tally did not include any sales taxes on professional services. Will we be so fortunate this time? I mean, the state is going to be scratching for every cent of revenue it can find.

That's where Maryland's CPAs come in. We're going to need CPAs to educate legislators once again about the negative consequences of taxing professional services.

That means it's never too early to start planning for CPA Day in Annapolis. The 2010 edition of CPA Day will be held on Jan. 20, and the more CPAs in attendance, the more powerful our message becomes. Mark your calendars now. It's going to be a big day for the profession.

In the meantime, you'll want to attend one of our professional issues updates. MACPA Executive Director Tom Hood packs each session with information that CPAs need to know. Plus, the updates are free for MACPA members and count for four hours of CPE. Check out the schedule here.

What's your take on O'Malley's budget cuts?

EBR movement grows ... and bides its time

Once upon a time, enhanced business reporting was the golden child of finance. Better information, a clearer look at operations, renewed focus on key performance indicators ... these were (and still are) the promises of EBR, and what investor could resist? It truly seemed like an idea whose time had come.

Funny thing about recessions, though: They have a way of taking revolutionary ideas and turning them into afterthoughts. It's hard to focus on the latest innovation when the task at hand is to fix what's broken.

So EBR seemingly has been moved to the back burner while regulators focus on stimulus plans, accounting rules, shady investment vehicles, and injecting a ton of transparency into the world of finance.

But wait ... did someone say transparency?

"With the current financial crisis, the word you hear over and over again is 'transparency,'" Bob Laux, senior director of technical accounting and reporting at Microsoft, said at the 2009 Maryland Business and Accounting Expo. "We're all about transparency, and we believe we can help move that discussion forward."

"We," in this case, is the Enhanced Business Reporting Consortium, of which Laux is a member. And while the rest of the finance world is scrambling to find transparency's holy grail, Laux believes the EBR Consortium may already have it.

For the uninitiated, here's what we wrote about EBR last year:

An enhanced business report would include much more than just the bottom-line numbers. It would include key performance indicators (KPIs) like employee turnover and information about, for example, patent portfolios or research and development. It could change Wall Street’s focus on short-term earnings projections and offer insight into how companies are creating value over the long haul. Experts say the results could include greater investor loyalty and lower stock-price volatility.

At a time when you'd think folks would be rushing to the EBR altar, Laux (pictured above) describes progress as "slow but steady." Still, some important goals are being met.

• Enhanced business reporting was mentioned prominently in the final report of the SEC's Advisory Committee on Improvements to Financial Reporting. That report was released in August 2008.
• EBR specialists are working with financial analysts from Cisco, IBM, Microsoft, Oracle and SAP to determine which KPIs apply to the high-tech industry. They will focus next on the consumer goods industry, Laux said.

After that?

"The next step is ongoing. It's evolutionary rather than revolutionary," Laux said. "Some of us get frustrated because the process is not more fast-paced. But we've made steady progress. We're just trying to become part of the debate on how to improve financial reporting."

Watch Laux's Expo interview in its entirety on our MDBizExpo Live! site, then check out these other EBR resources:

• The MACPA's EBR resources
• AICPA EBR resources
• EBR framework
• EBR: The new face of financial reporting (from The Statement)
• Private companies hop aboard the EBR train (from The Statement)
• Another step toward transparency (from The Statement)

Five ways to win in this recession

Are you sick of this recession?

Answer: A resounding YES!

While we all agree on this, the next question is: So what do we do about it?

I thought author and UVA Darden Professor Jeanne Liedtka has some answers in her post at the Washington Post's On Leadership blog as she writes about the recent earnings releases from Goldman Sachs.

Liedtka writes, "... that much of the advice we are getting about surviving today's economic meltdown was wrong. Advice like 'hunker down, cut costs, batten down the hatches, play it safe and wait for the economy to turn around' encourages managers to take a pass on the tremendous opportunity that today's uncertainty holds.

"Some managers, like those at Goldman, will come through these tough times ahead of the pack. And it won't be the ones waiting for a recovery to start somewhere 'out there.' The winners will figure out how to gain market share and new business while the wait-and-hope managers wring their hands. They'll do this by taking advantage of the present uncertainty, rather than hiding from it."

Here are the lessons that Liedtka says we can all learn from today's top leaders:

1. Stop looking up and look in. Get started and examine your organization for questions and answers.
2. Get real. Like the Eagles song, "Don't just sit there taking up space, go out and do something." Jeanne advises us to stop the hand-wringing, take some action and make things happen.
3. Lose your B players. Talent and performance matters now more than ever. Is your best varsity team on the field?
4. Make uncertainty an ally instead of an enemy. Don't let the uncertainty freeze you. Instead, adopt an adaptive mindset and begin taking calculated risks and look for high-leverage opportunities.
5. Keep learning (this is mine). Turn negative energy into positive solutions. You won't get everything right every time, but if you learn fast, you will recover and move forward.

What is your recession strategy?

Let's go back to the moon ... and beyond

Wanna blow your mind? Think about this for a second:

Forty years ago, we walked on the moon.

We put three men on top of a rocket, lit the fuse, sent them hurtling violently into space, landed them on the moon, and then brought them back again. Safely.

If that doesn't blow your mind, nothing will.

Except maybe this: Forty years later, we still consider that one giant leap to be the pinnacle of human innovation.

It's almost cliche now, but a popular response to the problems we face goes like this: "If we can land a man on the moon, why can't we ...?"

Indeed, why can't we? Compared to the monumental task of visiting another celestial body, our problems are laughable. I mean, come on. Have we really convinced ourselves that we can't solve our economic crisis? Or find the time to paint the living room? Or come up with meaningful health care reform? Or save more money? Or whatever? We put a man on the moon, for god's sake. Why can't we?

But here we are, 40 years later, still talking about that historic event as the ultimate example of humankind's spirit of innovation, exploration and triumph over adversity.

Sure, we've done a lot of great things since then. We've made huge strides in the fights against a host of deadly diseases. We've completely mapped the human genome. We've built incredibly fast, immensely powerful computers that allow us to do things that, at one time, were unthinkable.

For most of us, though, the moon is the gold standard of innovation.

I hope it doesn't stay that way. I hope something comes along one day that makes going to the moon look like a walk to the park. For that to happen, we'll have to start thinking big again -- and we'll need the guts to put those dreams into action.

Until then, we'll always have the moon.

Five critical skills you need in turbulent times

Everyone agrees that these are turbulent times we are living through. The question is how to do survive when everything is changing so fast?

The answer is: Learn hang gliding! Hang gliding was the metaphor we used to capture the concepts of building competency to "harness the winds of change" in our graphical story of the CPA Vision. The skills identified by CPAs as the Top Five skills they would need in the future were:

1. Leadership & Communication
2. Strategic & Critical Thinking
3. Focus on the customer, client, & market
4. Interpretation of Converging Information
5. Technologically Adept

Funny how these competencies came from our grassroots work with over 3,000 CPAs across the country during the period 1997 - 1998, and yet they are more relevant today than they were in 1998. 

I was reminded of this when Tim Fish, the assistant headmaster at my alma mater, McDonogh School, forwarded me this clip. We have been having an ongoing conversation about skills students will need as they enter the workforce. These skills are remarkably similar to the research from the CPA Vision project. This is also what prompted us to create our Business Learning Institute. We wanted to create a center for the development of these critical skills and now have over 100 programs and a growing group of discussion leaders who are among the best in the nation.

Check out this clip and think about how many of these "success skills" you have and how you might think about developing them...

Jerry Kaplan, CEO of Winstar on Academic Earth talks about the five critical skills that entrepreneurs need:

1) Leadership: ability to build consensus in the face of uncertainty
2) Communication: ability to keep a clear and consistent message
3) Decision-making: knowing when to make a decision
4) Being a good team player: knowing when to trust and when to delegate
5) Ability to telescope: to focus in on the details and then move back to the bigger picture.

What do you think? Are you working on developing or perfecting these skills?