Importance of Management Accountants

The impact of regional economies over global financial markets is intense. This past month was particularly tumultuous as investors reacted to current events and economic conditions in Europe, Asia and the U.S. The rocky ride has organizations struggling to maintain the inroads they’ve made over the last two years. Corporations must navigate the risks and opportunities to move forward. That’s why I think there is great potential for management accountants to lead businesses toward success in the future.

What makes me so optimistic? Because the skill sets of management accountants have never been more appropriate for business success. In addition to solid accounting fundamentals, management accountants’ competencies in monitoring, assessing and forecasting performance; helping colleagues understand income and costs; and assisting management in making tough decisions are critical for organizations to move in the right strategic direction.

The AICPA and the Chartered Institute of Management Accountants are preparing for the early 2012 launch of the Chartered Global Management Accountant designation. The CGMA will showcase the management accounting expertise of qualified AICPA voting members, and open up an international community of colleagues for sharing ideas and gaining knowledge. The targeted resources and continuous learning opportunities that the AICPA and CIMA are preparing will enhance CGMA holders’ business acumen and help them bring long term value to their organizations. I am excited to be a part of this effort to establish what will be a gold standard for management accountants worldwide. If you want to learn more about what the CGMA, visit the CGMA website.

Carol Scott, CPA, Vice President - Business, Industry and Government, American Institute of CPAs.

Thinking Globally Makes a World of Difference

The world is getting smaller. It becomes more apparent with each passing day. The ongoing unrest in Libya, the economic crisis in Greece, and our own difficulties with the debt ceiling have each caused global markets to fluctuate wildly. What does this tell us? For one, it makes it increasingly clear the business world is now global.  Second, it shows that most U.S. businesses need to think internationally and integrate that thinking throughout their operations to achieve economic success and long-term viability.

Businesses used to operate within their own cocoon, impervious to events outside their countries’ borders. But now, each of us must implement strategies enterprise-wide that reflect the new environment.   

In the News: Women to Watch, Financial Literacy, CPE

A recent AccountingWEB article spotlights the Women to Watch Program, an effort of the AICPA’s Women’s Initiatives Executive Committee, which will be honoring women who have made significant contributions to the accounting profession and to the development of women. Candidates are nominated by their peers and firm. Award winners will be honored at events sponsored by their CPA societies. "The women who are selected for the Women to Watch awards have made some outstanding or unique contribution to the profession. They have been successful in integrating their personal and professional lives. They are more visible because of the awards. They become role models. They prove it can be done," added Yasmine El-Ramly of the AICPA.

LinkedIn Backs off Social Ads and Improves Mobile App

Thrust into the spotlight

Until recently, LinkedIn has managed to stay out of the spotlight when it comes to privacy. In June, however, LinkedIn decided to opt in millions of users to a privacy setting, allowing their names and pictures to be used in social advertisements. Social advertisements often include names and/or pictures of people you are connected to who recommend the product or service.  It went relatively unnoticed for weeks…and then the firestorm. In early August, the blogosphere and news websites lit up with the information. LinkedIn users were not happy.

S&P Downgrade Signals Significant Change is Needed

Image by Getty Images via @daylife

Polls in CPA Letter Daily offer an insight to the readers’ opinions about topics taking place in today’s world.

Last week’s poll question, with nearly 1,300 responses: Do you believe S&P's downgrade of the U.S. credit rating will affect your organization or your client's company?

• Yes, very much – 9.47%
• Yes, but not too much – 29.89%
• Not at all – 50.08%
• Unsure – 10.56%

It’s no surprise that a majority of respondents don’t feel the S&P downgrade of the U.S. credit rating will affect their organization or client’s company. In fact, little effect has been felt from the downgrade overall, other than the stock market’s trip to a theme park a couple weeks ago to ride the roller-coasters. To understand what, if any, the downgrade will have on the CPA profession and the U.S. overall, I sat down with a couple economists and picked their brain. See what they had to say after the jump.

We Heard You Loud and Clear on the Due Dates Issue

Every voice is important to us.  So when the AICPA heard from so many of you a few years ago about the problems associated with the late receipt of Schedules K-1, we mobilized to come up with a solution.

After considerable dialogue, the AICPA submitted a proposal to Congress in October 2010 suggesting that the due dates for Forms 1065, 1120, 1120S, 1041 (along with some others) be shuffled around a bit--with the understanding that change can be difficult.  We know how important and ingrained return due dates are to tax professionals. Because members’ practices are so diverse and varied, and most members tend to have general practices, our volunteer leadership wanted to make changes that benefited the tax filing system as a whole.  We all understand how challenging the filing season can be.

What's Your Financially Fit Story?

In honor of its 125th anniversary in 2012, the AICPA will publish a book, tentatively titled Raising Financially Fit Families, to help families better understand their finances with lessons from the experts: CPAs. Be a part of this unique publication by submitting an essay highlighting a personal or professional experience you had in on helping others, whether a family member or client, build a brighter financial future.

CPAs’ stories and lessons about savings, planning for big-picture purchases, paying for college and teaching children healthy and life-long money habits will be the centerpiece of the AICPA’s first foray into the consumer book market. Raising Financially Fit Families will be edited by New York Times best-selling author and National CPA Financial Literacy Commission member Sharon Lechter, CPA, whose books include Three Feet from Gold and Rich Dad Poor Dad as well as the newly released Outwitting the Devil. Each selected submission will include the author’s name, company or firm and state CPA society. Visit aicpa.org/financialliteracy for more information, sample essays and details on how to submit an essay for Raising Financially Fit Families.

Melora C. Heavey, AICPA Staff. Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig.  She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.

In the News: Auditor Term Limits, IFRS, Technology

Jesse Hamilton of Bloomberg reports that the Public Company Accounting Oversight Board voted 5-0 earlier this week to open a public comment period on the idea of establishing term limits for auditors. Proponents said such restrictions may eliminate inappropriate company influence on long-term auditors. The board’s “concept release” would limit the number of consecutive years that an auditor could work for a client. It would combat “the pressure auditors face to develop and protect long-term client relationships to the detriment of investors,” PCAOB Chairman James Doty said. However, the board said it’s open to alternative ideas that would foster auditor independence, as board members expressed reservations. “I have serious doubts that mandatory rotation is a practical or cost-effective way of strengthening independence,” board member Daniel L. Goelzer said.  

3 Tips on Effective Writing

Edward Everett could have been famous.

He gave the official address back in 1863 at the dedication of the National Cemetery in Gettysburg, Pennsylvania.  It was 13,000+ words and lasted more than two hours.  

By contrast, Abraham Lincoln’s speech was about 200 words and lasted 2 minutes.

Which did history remember?

I used this example during a presentation last week on effective written communication at the E.D.G.E. conference in New Orleans. Too often in business we end up communicating like Everett. Here are three tips — I call them the 3Cs of communication — to make us more like Lincoln.

Diverse Faces Reflected in Your Organization’s Future

The year is 2020. The global economy has rebounded, the U.S. is celebrating less than five percent unemployment and the CPA profession is experiencing record growth. Your organization is doing particularly well and what’s more, your staff, senior leadership and partners’ ability to connect with a diverse clientele is the talk of the profession. Clients include a biotech start-up seeking to cure spinal cord injuries; a women-owned IT consulting company; a Kenya-based manufacturing firm; a law firm specializing in same-sex marriage and estate planning issues; and a car dealership owned by a Native American father/son team.

What led you to the success you’re experiencing? You cultivated your diverse team of talented staff using inclusive leadership. But, what is inclusive leadership?

In the News: Financial Literacy, Mobility, CPA Exam

The Times Daily in Alabama spoke with Mackey McNeill, CPA/PFS, and member of AICPA’s Financial Literacy Commission, about preparing college students to handle the responsibility of managing their own money. Without an understanding of the impact of their decisions, young adults can easily fall victim to overwhelming credit card debt and get behind on their student loan payments. McNeill says that one of the best ways to avoid that outcome is to begin teaching children about money long before they leave for college. “Our patterns about money are set before college, so if your kids are savers or spenders, you'll know before then; however, that doesn't mean you can't become better aware of the behavior and make difference choices,” she said.

“Who’s on First” with the Best Deficit Reduction Idea

Well, it seems as if deficit-reduction watching has nudged baseball out as America’s favorite pastime!!  With a full count on the debt ceiling, Congress came together on August 2 to strike out the looming debt ceiling cap and hit a $1 trillion in spending cuts.  At the same time, lawmakers also agreed to come to grips with the monumental deficit.  The agreement created the “Dirty Dozen,” a bipartisan Joint Congressional Committee that is charged with moving forward additional deficit-reduction ideas of at least $1.5 trillion by November 23, 2011. Automatic, across-the-board spending cuts will ensue if Congress fails to come up with a specific plan by the end of December.

So what’s still in the field of play of ideas? 

Put Down the Smartphone and Take a Vacation, Please

Polls in CPA Letter Daily offer an insight to the readers’ opinions about topics taking place in today’s world.

Last week’s poll question, nearly 1,900 responses: When on vacation, how easy is it for you to disconnect from work? 

• I check my smartphone occasionally while on vacation to keep inbox volume down. – 49.9%
• I respond only to work emergencies while on vacation. – 24.6%
• I leave my work smartphone at home, or travel where I don't have service. – 11.56%
• I bring my work smartphone with me on vacation, but rarely check it. – 8.33%
• I'm on my smartphone, working constantly, while on vacation. – 5.61%

In the News: Financial Literacy, Mortgage Interest

Jimmy Williamson, CPA, and member of the AICPA’s financial literacy commission spoke to the Contra Costa Times for an article about the Consumer Financial Protection Bureau. The CFPB, designed as a one-stop place for consumers to file complaints about financial products, is currently only handling credit card complaints. “Like any new federal agency it takes time for it to get its wheels rolling," said Williamson. “It's designed to help consumers make better financial decisions, if they are borrowing money for a home, if they are getting a credit card, those kinds of things. It's designed to improve transparency.”

What’s a Significant Business Risk? Not Discussing Risk

 

No matter where you turn lately, the headlines have been focused on the situation surrounding News Corporation’s News of the World. The tabloid closed its doors recently in the wake of a massive voice mail hacking scandal. What’s interesting to me about this story is that a 168 year-old business fell because staff (and whomever else was in the know) was willing to subordinate their judgment and professional ethics in the interest of gaining a competitive edge to meet organizational goals.

It’s an extraordinary case, but for me it poses some important questions: to what lengths is my staff willing to go to move the business forward? What message does our board and management team communicate about our ethical commitment and the risks we are willing—and not willing—to take? What are we doing to make sure we don’t end up in a situation like that of the News of the World?