IFRS and little GAAP

The Ohio Society’s Executive Board had the privilege of meeting with the AICPA’s Arleen Thomas, Senior Vice President Member Competency and Development, as part of its annual planning retreat in August. Arlene oversees many of the areas within the Institute that are fast moving current priorities, and board members enjoyed hearing about AICPA positions on the issues first-hand and sharing their opinions.

The hottest topic of discussion was the now-inevitable movement to international accounting standards in the United States. Arleen noted that the landscape has changed significantly in the past year regarding the certainty of adoption, and issues such as private company standards, requirements of lenders for GAAP and the tax code will all be part of the debate in the U.S. The priority for the profession will be managing an orderly transition so that we can be successful over the next 5 years, looking to the experiences of Canada and the European Union.

Hot questions included:

•  Will the U.S. see a LIFO carve-out? The SEC’s Cox has been discussing adopting IFRS-“pure, and users of LIFO face the potential of a very significant tax liability resulting from transition. Possible answers could include a change in the tax code to permit LIFO as a tax treatment only (the likelihood of which could hinge on the elections,) or a phase-in over a period such as 10 years.

•  What will be the role of the FASB? Both the international community and the SEC have commented that they see a future role for the FASB, whether it becomes a local arm of the IASB or a commenting body on U.S. implications of international standard-setting.

The largest debate centers on accounting standards for private companies. Will the FASB continue to issue private company standards (and if so, how will it be funded)? What will be the future role of the FASB/AICPA Private Company Financial Reporting Committee (which currently includes “IFRS for private companies” on its agenda)? Will private company standard-setting fall under the IASB guidance for small and medium-size entities? Complicating the answer is the decades-old question of whether standards for private entities are best addressed as exceptions within the rules (as we currently have) or differential standards (“Little GAAP”). Members have weighed in on both sides of that question.

(I’ll save for another post the OSCPA A&A Committee’s opinion that the AICPA should stake out territory providing authoritative guidance for OCBOA, particularly for the smallest of private companies. Arleene’s response to this comment is that the AICPA’s surveys show that “the market values GAAP.” Our committee would push back that there is another layer of the smallest of business where that is not the case.)

Transition presents significant opportunities for CPAs, even for those who don’t serve public companies currently, including assisting clients or employers in making the transition or in working more effectively in an international environment. Most importantly, advocates for the profession need to communicate that no one can expect to be unaffected; we don’t have the luxury of waiting to find out what will happen. Both AICPA and OSCPA will be offering continuing education and articles, first with the goal of building awareness, followed by more technical courses to assist members with implementation.

Let’s get the diversity conversation going

Is your office diverse? Of course it is. Unless you are a one-person office, you have some diversity in your office. Diversity, in simplest terms, is the quality of being different. That’s just reality. It’s not a buzzword, a problem or a goal. It just is.

Then, why is diversity such a hot button today? I think it’s because more people are embracing what makes them stand out from the packmakes, what makes them different and unique. As we embrace our own diversity, we need to take the time in our workplaces to understand and embrace the diversity of those around us. To allow people to celebrate and acknowledge what makes them different truly makes them special.

At a recent conference, a speaker said, “You don’t know what you don’t know.” Of course, most of the audience said “Aha!” as if he was a genius.
And he just might be. He said you need to look for those very “Aha!” moments every day. Finding out the very things that you didn’t know gives you more knowledge, and more power. You may find that what you know then is more relevant in today’s marketplace. With more relevant knowledge now, you are in a position to be more innovative. All this because you are embracing diversity!

How can you get started? Treat others as they would like to be treated. That’s not necessarily the same as the way you want to be treated. Your culture and customs might be different. By respecting cultural differences, you embrace diversity.

Now it’s your turn! Get the conversation started in your office. Who in your office should be involved in a discussion about the acceptance of diversity?

Life in six-minute increments

The Lunch & Learn example of members having to work to carve out time for education has been heard at a number of events this year. I thought I had an original idea about “living in six-minute increments” when I settled on that number as the amount of time I needed to complete just one more task –make a phone call, send an e-mail, or get one item off my desk. But searching for this phrase on the Web returned several blogs, mostly from young attorneys who are dealing with the reality of breaking down their day into six-minute billing increments (see this perspective on the woes of hourly billing).

They’re not alone.

I attended two different time management sessions at conferences this year where the speaker  discussed strategies for gaining control over your day by identifying and leveraging what was previously down time — listening to publications in your car, or knocking out “just one more thing” on what were formerly very short breaks in the action. But does this kind of multitasking really make us more efficient? The clincher was a speaker who advised us to carve out six minutes each day to do something that advanced our highest level dreams. That’s when I said “Enough!” – if we can only devote six minutes a day to what’s most important, that’s criminal.

We heard this message loud and strong at some of our conferences this Spring. At the Ohio Accounting Shows, 20-minute breaks allow members to take advantage of other services at the show, including visiting sponsors and member benefit stations. More than ever, members are finding that 20 minutes is just long enough to find a corner and open a laptop. Having that flexibility is great, but what do the growing numbers taking advantage of it indicate about our balance as a profession? Talking with some members about networking at the shows, one industry executive commented that “I can’t take the day off any more to enjoy an education program. I miss being able to visit with fellow members while I’m here, but I have to use that time to keep things moving at the office.” Are our work environments requiring this of us, or are some of our expectations self-imposed?

I’m going to stick my neck out and say that efficiency and real-time connectivity can go too far when it stops being a tool and instead prevents us from investing in other priorities important to our development as a person and professional. If we’re to be well-rounded business advisors, we need to invest in relationships and in outside interests that will provide perspective on the diverse world that we serve. As employers, we need to think about making focused time available for our employees for their development.

Personally, for today, I will listen to my favorite talk show instead of using my cell phone in my car, I will talk with a real person about their life during one of my 6-minute breaks, and I will block an entire future development day out of the office where I will unplug (sound like campaign promises?) Join me!

What counts as continuing education: Does reading fail the test?

Self-study CPE has been a hot topic for the Accountancy Board of Ohio’s Licensing Committee, questioning what forms of self-study should qualify for CPE credit. The ABO and The Ohio Society share an objective of improving the quality of self-study CPE offerings, but may differ on how to best achieve that objective.

Under debate is whether, for certain technical education, interaction with a subject matter expert is necessary to achieve desired learning outcomes. Licensing Committee members expressed that questions concerning the application and interpretation of technical standards would be difficult to answer from reading alone. The Committee is considering whether there should be a limit on the amount of CPE that can be obtained through self-study.

The form of delivery is also in question, including whether interactivity should be required. One option would be adopting NASBA’s Quality Assurance Service (QAS) standards. We surveyed our state CPA society counterparts and found only two states responding that QAS standards had been adopted by their state boards. Anecdotally, their comment on the experience was that “it killed self-study in our state,” as the standard for interactivity was difficult to meet for many providers. Specifically, QAS requires that the education tool:

•  Elicit responses that test for understanding of the material
•  Offer evaluative feedback to incorrect responses
•  Provide reinforcement feedback to correct responses

(i.e.: Reading a text and taking an exam would no longer qualify for credit under this standard. And that’s something OSCPA just doesn’t support.)

At the Sole Practitioner & Small Practice Lunch & Learn series in Dayton August 28, Ohio Society members shared several opinions on the role of self-study:

•  Members need the ability to obtain just-in-time information on specialty topics
•  Some find they absorb information more effectively from reading than from listening
•  Self-study is convenient in the reality of today’s busy schedules
•  Self-study is going to be the dominant source of education in the future

One member commented that he still needs to print self-study materials, because he’s found the time sitting at his kids’ swim and soccer practices perfect for focusing on technical material. He’s completed 24 hours of credit this year while being a soccer Dad.

What do you think about “what should qualify” for self-study, especially limitations on self-study or a requirement for interactivity? We’d love to hear more member opinions on the issue.

Elections are getting closer. FINALLY.

With the longest presidential campaign in history soon coming to a close, I think there will be a welcome sigh-of-relief for all who have seen enough of the finger-pointing and the shifting of blame for the war, and not to mention, the state of the economy, education, health care, etc.

Election day is Nov. 4 - so that means that you have less than two months to make your choice. While I know many people have already made their decision, many others have not.

With so much at stake, having more information could help in your decision-making process. In the Sept/Oct issue of Catalyst, OSCPA put together a comparison of the candidates on business issues.

Both candidates have plans that address major business issues facing the country – taxes, health care, Social Security and the housing market crisis. Both candidates claim they can implement the changes voters are calling for. Who you vote for is your decision. Hopefully, the objective candidate comparisons of their plans for business issues help you in making your decision.

Above all else, VOTE.