Wise Advice from the New Kid

What’s the best advice to give virtually anyone starting a new job? Corey Cines, blogger with the AICPA’s This Way to CPA website, wrote “From Backpack to Briefcase: How I handled the jump into Public Accounting,” to offer his tips for starting life as a firm newbie. It’s excellent advice for any young CPA looking to build a foundation in accounting. Not only that, Corey’s great advice also applies to anyone transitioning into a new role or a new organization.

Asking “dumb” questions, staying positive and practicing stress relief: these are just some of Corey’s gems for getting the lay of the land.

We asked several AICPA CPAs on staff what advice they wish they had gotten when they first entered the accounting workforce. Here are some tidbits:

My Takeaway from The Supreme Court’s Health Care Decision

I started in this profession 30 years ago this month.  As an auditor, one of the things I’ve always liked is that we are in the unique position of being paid for our opinion. Not just any opinion, mind you, but a reasoned, objective opinion based on the evidence we gather and the application of professional judgment.

A lot has changed in the world of communications in those 30 years. There seems to be an increasing emphasis on making the provocative statement to draw attention, increase readers or Twitter followers. In spite of this irreversible trend, I have held fast to the now quaint notion that there will always be a place in the business world for sound, independent analysis and advice.

The most striking thing about the Supreme Court’s decision was not the decision itself, but the media debacle in reporting it. 

CPAs Can Help Americans Plan for a Secure Retirement

A recent CPA Letter Daily Poll recently asked the question, “What would make you cash in your 401(k) before retirement?” and an astounding 42% said nothing.  It’s not that they didn’t answer the question asked, because they did answer it, only their answer was “nothing.” Nothing would ever make them cash in their retirement savings before retirement. People are beginning to realize that you might need to struggle a little more today so that you do not have to struggle in your later years.

Of the remaining 58% respondents to the poll, 47% would use their 401(k) funds prematurely to supplement cash flow because of a loss of employment or to pay their mortgage.  Both of these choices fall into the category of providing cash for the needed expenses in life, certainly understandable.  The CPA Letter Daily is distributed predominantly to CPAs and I’m sure the respondents were also CPAs who have a current 401(k) plan balance.  What is the average worker in the U.S. doing to save for retirement?

Whatever November Brings, Start Preparing Clients Now

There will be some significant potential consequences on the horizon if Congress allows certain existing tax laws to expire on January 1, 2013. With only a few months left to plan, it’s time for CPAs to be aggressive in educating clients about the decisions they may face.

Several tax changes are now set to occur at the beginning of 2013 if Congress does not act. Among them:

• Individual income tax rates will go up.
• Long-term capital gains rates will rise.
• The gift and estate tax exemption will drop from $5.12 million to $1 million. Estate assets more than the $1 million exemption will be taxed at a maximum 55% rate.
• Taxpayers whose income exceeds a set “threshold amount” will be subject to a 3.8% Medicare surtax on net investment income, effectively raising their marginal income tax rate. An affected taxpayer in the 39.6% bracket—the highest bracket in 2013—will have a 43.4% marginal rate. This will apply to individuals and trusts and estates.

In the News: Leave that Savings Alone

A Bankrate.com article titled “Four Ways to Avoid Dipping Into Your Savings Account” quoted Kelley Long, a Chicago CPA, personal finance coach, and member of the AICPA’s National CPA Financial Literacy Commission. In the article, Long provides prudent advice on how to keep the money currently in your savings account right where it is. She suggests savers don't get an ATM card or sign-up for Internet account access - because it provides the user with hassle free access to their savings. For more savings tips, please visit 360 Degrees of Financial Literacy, a free program of the nation’s CPAs to help American’s understand their personal finances through every life stage.

Fostering a More Ethical Business Culture

A few weeks ago, I shared with you my (reasonable and totally understandable) enjoyment of data points and survey results in all their shapes and sizes. I have also always been a huge fan of The Ethicist column in the New York Times Magazine, and put serving as ‘The Ethicist’ near the top of my dream jobs list. Needless to say, the recent results of the global business ethics survey from the AICPA and the Chartered Institute of Management Accountants were right in my wheelhouse.

It’s encouraging to see that four out of five businesses worldwide report that they have committed to ethical performance. But according to Managing Responsible Business, a global survey of almost 2,000 CGMAs, the rhetoric does not always match the reality. While 80 percent of organizations provide a code of ethics to employees, only 36 percent collect ethics information such as the number of employees attending ethics training and actions taken on hotline reports. The report suggests that companies need better processes to really operationalize their ethics programs.

Books, Exams and What I Owe

Heading off to college can be one of the most exciting times in a person’s life, especially if it’s your first time living away from home. I still remember the thrill of living with no parents for the first time. That thrill soon wore off when it was time to pay the bills—between books, groceries and my tuition, I didn’t understand how I was supposed to handle it all on my own. Fortunately, student loans showed up to save the day, sort of.

Although student loans made school financially possible, the reality of the debt I was accruing was completely off my radar while I was in school, as it is for many college students. Even with the post-graduation repayment grace period it was still difficult to pull together my loan payments the first few years; I was even one of the lucky ones who found a job the summer after graduation. In today’s economy, and with today’s unemployment rates, it’s a stretch to think that all graduates will find jobs within six months, let alone be on their feet enough to begin repaying their debt. Now, millions of college graduates may see their payments jump.

The New Rules for Tangible Property Cast a Wide Net

Although there are new U.S. federal income tax developments every day, it isn’t every day that something comes out that affects virtually all business taxpayers.  This is one of those times. Known commonly as the “repair regulations” (though they go way beyond repairs), new IRS rules create new tests for determining when an expenditure relating to tangible property is deductible or must be capitalized.

It doesn’t matter if you file as a partnership, corporation, sole proprietor or other form of business.  It doesn’t matter whether you are a manufacturer, an insurance company or agency, a mutual fund advisor, a hair salon, a retail store, or a charity, or whether gross receipts are $1 or are $100 billion.  These rules impact you if you, your company/employer, or your clients’ business operations acquire, produce, or improve tangible property.

Why the AICPA Supports FAF’s Creation of Private Company Council

Many of you have seen news reports and AICPA communications about the Financial Accounting Foundation’s recent decision to create a Private Company Council. Given the serious concerns the AICPA had with FAF’s original proposal released in October 2011, I am providing additional detail as to the structural and process improvements FAF made with the new Private Company Council that enable us to support it.  

The AICPA’s issue with FAF’s proposal centered on the extent of the Financial Accounting Standards Board’s influence on the planned private company body and ratification of its decisions. We and more than 7,000 stakeholders urged FAF to strengthen the original council’s independence and they responded. The final plan is more about collaboration between the PCC and the Financial Accounting Standards Board than the approach outlined in the exposure draft. Now, FASB will be asked to endorse the PCC’s recommendations rather than ratify them and generally will have a limited time frame of 60 days to do so. I would describe the process as one of negative clearance, with a high threshold for a FASB veto. And if FASB does veto the PCC’s decision, the FASB chairman has to explain why in writing – and provide suggestions for obtaining approval – and it will be made public for stakeholders to evaluate.

New CPA Exam Score Release Timetable for Q3/Q4 2012

The U.S. CPA Exam score release timelines have been such a hot topic amongst candidates that we have decided to post regular updates. Updated score release timelines will be announced every quarter on AICPA Insights and will also be posted on the CPA Exam website. Below is the score release timeline for candidates to easily find their score release dates.

In the News: U.S. Economy Takes Two Steps Forward, One Step Back

In the midst of continued uncertainty, the nation – and by extension, news coverage - has been increasingly focused on the economy. Yesterday, the AICPA released the results of the second quarter Economic Outlook Survey, which showed that CPA business executives who hold leadership positions, such as chief financial officer or controller, in their companies, had grown more pessimistic about the U.S. economy, compared with last quarter.

The survey results were covered in the Wall Street Journal’s Real Time Economics Blog, which noted that the CPA outlook index slipped to 67 this quarter from 69 in the first quarter. A reading above 50 indicates a generally positive outlook with increasing activity. The index has ranged between 60 and 70 for the past two years.

“What we're seeing is the same ‘two steps forward, one step back’ cycle we encountered last year,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s senior vice president for management accounting. “There's no question survey takers have grown more pessimistic about the U.S. economy, and, with expectations muted for profit, revenue and employment growth, there appear to be few catalysts to change that view.”

Moments of Obligation: A Call for CPAs to Join the Financial Conversation

I’ve always been attracted to the “serving the public interest” element of our profession. As an auditor I didn’t see myself so much as a policeman enforcing the rules, but rather as the surrogate for the investors and creditors who had limited access to information about a company’s finances and operations. I knew that these nameless, faceless third parties trusted me and that no matter what, I could not break that trust, for it was the cornerstone of the profession.

“Moments of obligation” are those moments or events when you feel yourself pulled down a path that leads you to work that will benefit others. At various points in my career, I’ve made more conscious decisions about pursuing paths to give back to the community. Of course, thousands of CPAs make decisions every day to contribute their skills, experiences and—perhaps most importantly—their credibility to efforts aimed to benefit the public good.