Tax Season is over, but keep blowing your horn

April 17, 2009

CPAs everywhere are doing a happy dance. Tax season is over and it was an undeniably tough one. Time to take a deep breath and rejuvenate.

CPAs aren’t the only ones who collectively sigh on tax day. The rest of the public is celebrating because what is a dreaded annual event for many has come and gone. And after April 15, the media doesn’t call as often to speak to members because there’s still a perception that CPAs are the professionals you call only for tax advice.

We’re working hard to change that. Because some of the biggest opportunities lie in what CPAs do for their clients the rest of the year.

CPA. Those three letters make a huge difference when it comes to long-term results and OSCPA is committed to helping the public make that important distinction. CPAs can also get better at tooting their own horns.

Here are a few ways we can jointly promote the role and work of CPAs even before the ink is dry on the tax forms:

April is Financial Literacy Month and a good springboard for building year-round client relationships. Pick up the phone and schedule an appointment to help clients tweak or overhaul their business or personal financial plan.

One silver lining in the recession may be that Americans are quickly changing their spending habits. In a recent AP survey, 54% of taxpayers expecting a refund said they plan to use it to pay bills or reduce debt. Consider sending clients an e-mail with these money-stretching tips for investing their refunds.

At the same time, you can introduce them to the Society’s Financial Fitness Ohio Web site. It includes a wealth of resources for consumers in various stages of life.

Now is a tough time for college graduates entering the workforce. In the latest OSCPA podcast series, “Navigate your Finances in a Turbulent Economy” OSCPA chair-elect Matt Yuskewich, CPA, covers part-time employment options, developing a savings strategy and other important lessons to start graduates off on a solid financial footing.

Changing public perception takes time. But together, we can all help to move the needle. More consumer advocacy groups are demanding that states license and regulate tax preparers. If there’s a movement in Ohio, OSCPA will be in the forefront to ensure that CPAs are NOT subject to any additional levels of regulation or registration.

Therefore, it’s critical that we keep educating the public about why hiring a CPA is really the best year-round financial insurance plan available.


Be part of the conversation

April 9, 2009

Remember the first time you heard the phrase “think outside of the box?” It was probably by someone at your office who was trying to impress you – as if they were the first person to have this breakthrough idea. Too many times, a catchphrase becomes overused and about as valuable as the hundreds of buzzwords that are floating out there now in the mass media.

But the catchphrase “be part of the conversation” hasn’t caught on yet. It hasn’t been overused and that’s because too many people are not part of the conversation. What conversation you ask? The conversation is the dialogue and exchange of information that is going on 24-7 in cyberspace via social media all around you – at home, at work, even at the supermarket.

What’s more interesting is it’s not just your kids. At first glance, social media is primarily used by tweens, teenagers and college students. Not at all! Yes, that audience is definitely making use of social media. But take a look at a few stats about Facebook users:

  • Reports nearly 45.3 million active U.S. users in the last 30 days
  • Growing in every age/gender demographic, with the fastest growing segment being women over 55 (up 175.3% in the last 120 days)
  • Women comprise 56.2% of Facebook’s audience
  • 45% of Facebook’s U.S. audience is now 26+ years old

Sure, you might find your kids on Facebook, but you might just as easily find your mom on Facebook.

Also growing in popularity – especially from a news angle – is Twitter. Simply put, Twitter is texting. In 140 characters or less, you can send a message on what you’re doing, what you’re thinking or what nugget you have found on the Web that you want to share. Twitter is the third largest social network – following Facebook and MySpace.

Who uses Twitter? The better question might be who doesn’t use Twitter. Twitter is becoming the medium of choice for just staying up-to-speed on all issues of interest – whether you are following FASB and their recent fair value guidance, the SEC and the charges pending against Madoff’s auditor or where did Denver trade Jay Cutler.

Social media provides a new type of network for a new type of business world. Being part of the conversation doesn’t mean that you necessarily have to be posting daily. Sometimes being part of the conversation means just being present. Do you want to be part of the conversation or do you want to be left behind?

If you haven’t ventured into “social space” yet, then let OSCPA be your friend out in “social media space.” Find OSCPA on:

The Politicization of Accounting Standard Setting

April 3, 2009

At one time I would have smacked myself for saying “Amen, Arthur Levitt!” In a Washington Post OpEd, “Weakening A Market Watchdog: An Accounting Rule Change’s Real Costs,” Levitt observes that FASB’s action on fair value measurement in inactive markets and other-than-temporary-impairment is a first erosion of the independence of the accounting standard setting process.

With the passage of Proposed FASB Staff Positions FSP FAS 157-e, “Determining Whether a Market is Not Active and a Transaction is Not Distressed,” and FSP FAS 115-a, FAS 124-a and EITF 99-20-b, “Recognition and Presentation of Other-Than-Temporary Impairments,” the question many are asking is “has the FASB bowed to political pressure on fair value measurement, compromising investor transparency?”

Many have called for further guidance on mark-to-market accounting in illiquid markets (see discussion of “investor views”), and FASB members had asserted that these staff positions clarify much of the intent of the original standards. However, as Levitt observes, while the theory of the latest FASB staff positions may be arguable (not by him,) that doesn’t resolve his fundamental concerns about (1) responding to Congressional pressure to act quickly, and (2) a rush to action without the typical due process of an independent standards setting process.

In a press conference following the FASB decision, Board members responded to criticism that they had succumbed to political pressure, insisting that due process had been achieved, judging from the number of comment letters received during the two-week comment period. A Board member also defended the FASB’s continued role as an independent standard setter, noting however, that it was not immune to observing the current turmoil in the markets.

The CPA profession has long defended the necessity for independence in the standard setting process. In December 2008, outgoing SEC Chair Christopher Cox appealed to the new administration to understand that:“

Accounting standards should not be viewed as a fiscal policy tool to stimulate or moderate economic growth, but rather as a means of producing neutral and objective measurements of the financial performance of public companies.”

Responding to those who advocate setting aside independence in abnormal periods for quick fixes, Cox stated:

“The truth is that the value of independent standard setting is greatest when the going gets tough. The more serious the stresses on the market, the more important it is to maintain investor confidence.”

FASB Chair Robert Herz made the same argument in 2003, citing the lasting truth of a 1978 Journal of Accountancy quote from Professor David Solomons:

“if it ever became accepted that accounting might be used to achieve other than purely measurement ends, faith in it would be destroyed just as faith in speedometers would be destroyed once it were realized that they were subject to falsification for the purpose of influencing driving habits.”

This plea is being lost, as the U.S. House of Representatives considers a non-independent governmental accounting oversight board under HR 1349 — the Federal Accounting Oversight Board Act. This “regulatory reform” would truly be an expansion of government authority over what has historically been an independent process.

Will the SEC bow to political pressure as FASB may have done? Observers state that application of the new rules will be dependent on whether they are supported by auditors and those who regulate the auditors. As a new administration calls for increased scrutiny of large institutions, particularly the financial sector, and also for relaxing of accounting rules, who will be blamed when balance sheets are overly optimistic? The auditors, perhaps?

Rarely will there be an accounting standard that is perfect for all users, but adequate due process provides the opportunity for all voices to be part of the debate. Opening the standard setting process to political interference does not protect the public interest, but instead provides protection for those best able to exert political influence.

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