“Risk” is making a comeback

With crisis comes opportunity. I’ve been reading a number of articles recently on the rise of risk management as an area of critical focus within organizations, after a period when some had lamented a reduced emphasis on the discipline.

From the number of associations representing risk management professionals, there’s no shortage of types of risk being managed, from financial and business risk to specializations such as public sector or public health risk.

I was struck this week by the growing use of “risk management” as a marketing term. Take any word and insert “risk management,” “risk analysis” or “risk assessment” after that word and you have a new way of marketing your practice specialties. For example: financial, credit, insurance, human resources, health insurance, information, information systems, investment and reputation risk management have all crossed my path as areas of expertise tied to risk analysis services in the past week.

A sales call offering an “equipment risk analysis” to save OSCPA money on facility utility expenses drew my attention to the high leveraging of this term as businesses take a hard look at controlling costs in the current economy.

At least one accounting/consulting firm’s marketing department has tuned into increased interest in risk – a search for “risk management” attached to various terms above on one of my favorite business news sites returned a number of different bios from that site’s user community. Each was from the same firm identifying an individual who specializes in that area of practice – a great way to make use of online networking to promote their business.

How can you best manage this opportunity? While written before the full impact of the credit crisis was known, a Fast Company article from December 2007 provides tips that are still relevant today on “How to Help Your Company Focus on the New World of Risk”.

Stealing a quote from an interview with Ron Dembo, CEO of Algorithmics Inc., “If you’re not managing risk, you can’t claim to be managing your business.” CPAs specialize in helping companies make sense of a changing and complex world. Stepping up our skills in risk management is a critical part of focusing on that future.

Social media is the newest networking tool for you and OSCPA

Social networking has quickly become one of the primary tools of communication in modern society. Students spend hours a week on Facebook, family and friends create blogs to keep in touch with each other and new acquaintances meet through MySpace.

The professional world is no exception to this trend as sites like LinkedIn and Twitter are becoming more widely used by job seekers and employers to help build connections and screen candidates for potential job placement.

OSCPA is no stranger to social media, and while you may not have realized it, the Society has its own arsenal of online tools that can be used to your advantage in a number of different areas including networking, reconnecting with colleagues, discovering new job opportunities and discussing current issues affecting your career.

The list of sites that OSCPA has dipped its virtual hand in is still growing, but you can participate in any of the current online involvements listed below:

Twitter.com

OSCPA has its own Twitter account: @OSCPA. If you haven’t already done so, creating a free account on the fast-growing social networking site where you can post updates about yourself or your career in 140 characters or less can help keep you up-to-date with news, job opportunities and friends.

Once you’ve chosen a screen name and a password and composed a one-line bio, you’re ready to tweet (as posting on this site is called). Simply search the site for OSCPA and you will be directly connected to the Society’s profile where you can access recent updates about membership and advocacy news, as well as a complete listing of other OSCPA media. Skim through posts to find topics you are interested in, and click on links that will take you directly to the information you need.

LinkedIn.com

Using LinkedIn is an easy way to make professional connections and essentially post an online resume at no cost. Creating a bio on LinkedIn is quick and easy and showcases your past and present jobs and accomplishments. OSCPA’s LinkedIn page houses a discussion forum that is open to the public where you can post questions or conversation topics to other members.

Facebook.com

Facebook isn’t just used as an online corkboard for embarrassing party photos anymore. OSCPA’s Facebook page is home to a peer-to-peer discussion board where you can post questions for CPAs or discuss relevant career issues with colleagues. Find advice on what to do as a young CPA just starting out in the profession, or increase traffic to your blog by posting notes to other group members. The page will also provide you with links to other topics of interest in a free, user-friendly environment.

Blogs

The Ohio Society maintains two blogs for its followers.

The OSCPA blog addresses all things “CPA” – from education to news to issues impacting the profession. From this page, read and comment on the blogs that are about you and your business.

“Techie Bytes” offers information on all things “Web site-related.” If you really want to boost your social media knowledge, this is the blog for you. OSCPA staff members keep this page up-to-date on the newest ways to organize your life electronically and offer pieces of easy-to-digest technical information for those of us who may not be quite so “techie.”

Word from NASBA – “We will not be disrespected”

Audience members at the December meeting of the Accountancy Board of Ohio got to hear first-hand the priorities of guests Tom Sadler, Chairman of the National Association of State Boards of Accountancy (NASBA,) and David Costello, NASBA’s Executive Director.

Topping Sadler’s list is peer review – obtaining peer review as a statutory requirement in states that don’t have it, and achieving state board oversight in states that do (Ohio already has statutory peer review and state board oversight). NASBA also aims to look “under the curtain” for reviews administered at the national level, which have no state board oversight, including achieving an oversight process for desk reviews conducted at AICPA to “ensure independence and that peer review is truly a public interest process.” Sadler noted that he was pleased with AICPA and state society cooperation toward this objective.

This priority was followed by the “Four E’s”:

• Exam – Renegotiating the contract for the computerized CPA exam, and addressing international candidacy for the CPA exam
• Education – Protecting the 150-hour requirement to sit for the exam
• Ethics – Is there opportunity for convergence in state ethics requirements and the AICPA code of professional conduct?
• Enforcement – As governmental agencies increasingly refer cases to the AICPA, how can these be transitioned to state board enforcement?

Sadler commended Ohio’s reputation for enforcement, but noted that nationwide, “we will not be disrespected.”

Costello spoke to state boards’ response to the prospect of international standard-setting, noting that NASBA had concerns at this time about committing state boards to everything promulgated by international standard-setters. A committee had been formed to address implications of global strategies, including international standard-setting, international candidacy for the CPA exam, and convergence of ethics requirements.

A controversial issue within the profession has been movement by some states to allow candidates to sit for the exam with 120 hours of education, but still requiring 150 hours for state licensure. NASBA research finds no detriment in passing rates for sitting at 120 hours, but the topic will be discussed in 2009 regional meetings.

Contrary to NASBA’s views, proponents of retaining the 150-hour requirement to sit for the exam criticize the 120/150 model for chipping away at the intent of the original 150-hour legislation, and communicating the wrong message to the public about the level of education and preparation required to become a CPA. Some critics also question the validity of the NASBA research.

Costello again commended Ohio as a leader in adopting model accountancy law, particularly in the area of mobility for CPAs practicing in multiple states.

Why network online?

An alien in the world of online networking, I have been exploring social media sites lately trying to better understand the culture. I recently saw a definition of a late adopter to social media as someone who finds a blog accidentally while Googling – that describes my most frequent encounter today.

I’ll admit that this currently makes me a lurker, in the Web 1.0 vernacular, but I think I’m almost ready to turn the page and join in. What is social media? In addition to tools that allow people to engage with a community, it includes news that you interact with, or news that’s contributed by the members of the community.

Exploring social media as a source for personal networking, I’m finding that most of the people in my “first life” communities don’t yet have a presence online. When I search for existing friends I might like to chat with, I find their name on school PTO minutes or in summaries of township trustee meetings. I know that they have e-mail and high-speed Internet, because they’re able to forward jokes and Internet folklore after the kids go to bed, but the real-time interactivity that seems to occur in today’s online networking is missing in my personal circles.

In my professional circles, most of the people who want to “link up” with me are recruiters or salespeople, and thankfully, I’m not seeking that type of networking at the moment. What I had hoped to find were thought leaders, and my initial reaction was that self-absorbed talkers were severely outnumbering the interesting thinkers.

Initially exploring as an observer, what I’m learning is that rather than individual thought leadership, what much of online social networking is about is thought patterns and trend monitoring. As you follow links and connections and see patterns, you gain an understanding of not just what one person is thinking, but what hundreds or thousands or even millions of people are thinking. Social media is a great listening and intelligence tool, and several methods exist to help you filter what you’re looking for. The preference for the tool is personal, as we all learn and interact differently.

The first tool to really intrigue me is Twitter, which I began following when the cyclone disaster occurred in Myanmar in 2008. News reports were discussing the difficulty that disaster relief agencies faced gaining access to the country. I support a first-response disaster relief charity which typically beats the response time of more established aid agencies to a disaster site by hours or sometimes days, and I was curious if they had been able to overcome Myanmar’s barriers to entry. I had just received a news release that this organization was on Twitter, and I subscribed to their feed. I was hooked on their up-to-the-minute reports on how they finally got a plane into the country from Amsterdam, and have been hooked since.

Since then, I was able to view real-time news from witnesses on-site during the Mumbai shootings (and also find out who on my staff was bored during a meeting…) Twitter has lately suffered from some security issues, but it has an ease of use that works for me. What does this have to do with thought leadership? I found a great blog that captures very closely my thoughts on why to follow other online posters.

But once listening, why start talking? Borrowing from a response to the above blog entry, a commenter paraphrases a quotation that it’s important to keep up-to-date with your industry, but not as important as contributing to that industry.

Ernie Almonte, AICPA Chair, stated at the Fall AICPA Council meeting that it’s important for the members of our profession to be up in the balcony looking at the dancers below, so that we understand the patterns of the dance going on in today’s world. But it’s also important to mingle among the dancers, so that we are contributing to and influencing the outcomes of that dance.

Social media is where the dancing is happening today. It’s time to join in.