What’s the value of a name?

With the Internet providing instant access, much of the world’s information has become commoditized in a world of perfect competition. If not the latest, however, the hottest battleground over information is in the realm of personal data.

Spam-blockers, firewalls, privacy initiatives, identity-theft services and new insurance products have risen along with the economic demand for personal information.

The Ohio Society of CPAs places the highest priority on protecting the confidentiality of member data, but isn’t immune from attempts (unsuccessful) to repurpose it. Several times weekly we hear the latest clever proposal from a prospective vendor of how to increase membership value by providing free access to member data for them to market indiscriminately to our members.

This trend is increasing in CPA firms as well, on the legal as well as ethical front. While CPAs don’t have legal privilege over confidential client information, we do have a confidentiality requirement under state administrative rule and our professional codes of conduct. The number of calls we receive at the Society regarding threats to client information has increased significantly in recent years.

Let me first qualify what follows with the statement that I am not an attorney and am not qualified to provide legal advice. Please consult your attorney regarding any of the observations that follow should a similar situation apply to you.

The profession’s confidentiality rules require a CPA to comply with a validly issued and enforceable subpoena or summons. A frequent concern I’m hearing concerns what appear to be overreaching legal requests. For example, instead of requesting specific workpaper schedules relevant to an allegation, a request may be made for “all records” of a client, or worse, the computer upon which those records are stored (and which includes records of other clients, definitely not relevant to the case.)

A recent example involved a CPA who had left his former firm and did not have a non-compete agreement. His former employer subpoenaed all workpapers and billing records of the firm in a civil case supposedly to quantify the business that the CPA had stolen from his former firm. Without knowing the specifics of the case, I responded that the FTC has allowed CPAs to compete and market their business since at least 1990, and suggested that he call his attorney regarding the enforceability of the subpoena.

If you suspect that a subpoena is truly a fishing expedition or if it appears that complying with the request would be a violation of your confidentiality requirement regarding other client information, your first step should always be to contact your attorney or advise your client that they may wish to consult with legal counsel regarding whether the request should be challenged.

Be forewarned, but by no means reference this posting as permission to not comply with a validly issued and enforceable court request.

“P” is for Psychic

Did you know that “professional intuitives” have their own association and codes of ethics? (I like the one here.)

I’ve been taking a lot of calls this week from member CPAs facing disputes over client record and confidentiality matters. Dealing with a difficult communications breakdown, one member grumbled “Do they think the “P” in CPA stands for psychic?” Reflecting on his comment, I’m thinking that in the public’s collective mind, the answer might be “Yes.”

The AICPA CPA Vision Project defined CPAs as:

… the trusted professionals who enable people and organizations to shape their future. Combining insight with integrity, CPAs deliver value by:

• Communicating the total picture with clarity and objectivity,
• Translating complex information into critical knowledge,
• Anticipating and creating opportunities, and
• Designing pathways that transform vision into reality.

I highlight the words that illustrate the profession’s own use of skills of perception regarding the future. I believe the public does have an expectation that CPAs possess a level of intuition to allow us to convert information to higher value knowledge that helps businesses prepare for the future. The marketplace expects us to be knowledgeable about the future before it is, and assumes that CPAs serve a role in designing pathways to that future. (Sound like professional intuition to you?)

Examples of intuition in practice include not just analyzing information in a linear manner based upon known rules, but also the need to detect unique patterns in disaggregated bits of information, or to sense what pieces of information may be missing. In a world where information in real-life situations is more often chaotic than logical, intuition is a critical skill for CPAs.

Intuition compliments reason in order to provide the insight that the public expects from us as trusted advisors. Colin Powell comments in My American Journey, “Dig up all the information you can, then go with your instincts. We all have a certain intuition, and the older we get, the more we trust it…I use my intellect to inform my instinct. Then I use my instinct to test all this data. Hey, instinct, does this sound right? Does it smell right, feel right, fit right?”

If intuition is a critical skill for CPAs, is it something we can hire for or something that can be developed through training? In a two-part series on “Intuition in Business,” Dr. Lynn B. Robinson suggests that intuition can be learned. (The Powell quote was originally sourced from her paper.)

Whether a hunch, feeling or instinct is a result of learned experience or genetic cognitive skills, it helps CPAs find answers more quickly. As the world of accounting shifts further toward the needs for professional judgment, professional skepticism, risk analysis and a reliance on principles in the absence of rules, intuition will be an increasing important skill for tomorrow’s CPAs.

Maybe I’ve found a new market niche for the first CPA/Psychic!