Tomorrow's CPA: The Blog

Shockeroo! You and your parents view money differently.

A recent survey from Wells Fargo says that when it comes to personal finance, young people ages 18 - 22 know what's good for them but their parents know what's best for them.

That there's a generation gap is not news.  But the size of the gap is.

For example:

--95 percent of parents feel their children will reach their financial goals; only 5 percent of young adults share that confidence.

--92 percent of parents feel budgeting is effective; only 5 percent of young adults agree.

--Parents' three top priorities for their children are to find a job,and pay off their credit card debt; young adults want most to find a job, buy a car and buy a home.

--A much greater percentage of adults understands credit scores, annual percentage rates, 401k(s) and compound interest.

Like most surveys, this one also raises some questions. How many of those surveyed were 18 and how many 22?  How come the parents interviewed are so much more financially literate than average American adults?  And aren't certain goals--like wanting a set of wheels--simply age-appropriate?

Everyone, parents and young adults alike, can benefit from a solid education in financial literacy.  That's why CPA nationwide are committed to improving the financial IQ of all Americans, of all ages.  You'll find voluminous information on personal finance at the 360 Degrees of Financial Literacy site.

Visit there today.  And take a parent with you.

He shoulda known better

How easy is it for fraud to spiral out of control? Just ask Aaron Beam.

He is co-founder and former CFO of HealthSouth Corp., home of a $2.7 billion accounting fraud that took place between 1996 and 2002. Beam served three months in jail for his role in starting the fraud. In the process, he lost  most of his personal wealth and now does lawn care for a living.  Read this interview with Beam, which ilustrates just how quickly a seemingly minor infraction can snowball into major corporate fraud.

Among his words of wisdom:  "The correct thing I should have done was, at the critical point when we weren't going to make our numbers, I should have said no (to any illegal actions). "If I got fired, I got fired. Once you actually commit fraud and have blood on your hands, getting out of the trap is very difficult."

I doubt Beam was a CPA.  In Maryland you have to take an ethics course in college and pass an ethics exam just to become a CPA.

Even that is not enough.  As a professional CPA you are required to devote at least four hours of training to ethics every two years. 

So CPAs take ethics very seriously.  You can ask Aaron Beam why.

Kudos to the latest Exam passers!

The following MACPA Candidate Members passed the CPA Exam during the April - May 2009 Examination Window:  Matthew Brian Ainsworth; Terence Ngwa Ambe; Lindsay Banda; Brandon Rourke Batton; Nicholas Paul Borgeson; John Neil Bosley; Patrick Jerome Bray; James Anthony Cunningham; Jason Reynard Daisey; Scott Michael Fitzgerald; Chase McClain Franklin; Naeemah Safiya Fuentes; Charmaine Nyme Glass; Ryan Patrick Ham ; Rosemary Elizabeth Hughes; Jodi Renee Keefer; Stacey Marie Mosser; Rebecca Ashley Novinsky; Lisa Mihal Seemann; Aviva Yael Soll; Tracy Lynn Teets; Laura Connors Vansuch; and Jared Shaughn Weller.

Congratulations on your tremendous accomplishment. We at MACPA look forward to welcoming you as full-fledged CPA members in the near future.

Who's Afraid of the Big Bad Exam?

The State Board of Public Accountancy reports that 87 applicants passed the CPA Exam during January and February! Don't believe so many could pass this supposedly impossible test?  Check out the list.

The pass rate for this exam window averaged 50.7 percent, with a high score of 98 percent. That's better than your average Physics class!

According to the State Board newsletter if this trend continues, we can expect 348 successful candidates over the next three quarters. Compare that with recent years: 291 (2008), 236 (2007), 194 (2006) and 166 (2005).  Guess the improving rate is more than a passing fancy.

Heck, by the time you are ready to take the exam the pass rate could up to 60 percent or more.  Still afraid of the Big Bad Exam?

State Board debuts an e-newsletter . . . and it's good!

As you advance in your CPA career you will have manifold opportunities to interact with the Board of Public Accountancy.  

The board, which operates under the Department of Labor, Licensing & Regulation, is the regulatory body for the CPA profession. As such they enjoy authority over the CPA Exam, the whole CPA licensing process, as well as peer review and disciplinary actions.

The board's site is the place to go for all you need to know about the educational requirements to sit for the CPA Exam. It is never too early to get an idea of the road ahead, especially if you are starting college.

There are great people on the board but due to understaffing it is not always easy to get a prompt response to your questions.  So it is good news that the board has launched an e-newsletter, titled The Account Balance.

It is even better news that the newsletter is chockfull of information, much of it useful to students and candidates.  Here are some of the highlights of the first issue:

• A summary of the process for changing the educational requirement to 120 credit hours, to sit for the  CPA Exam.  This could have huge implications for those who will be starting the examination process in the coming years.

• A description of two new content areas that will be added to the course requirements for the exam: Quantitative Analysis and Computer Information Technology Systems.

• Some good tips, such as: do not sign up for a review course until you have been approved to take the exam.

• An excerpt from the Code of Professional Conduct, regarding returning a client's documents.

This is all worthwhile stuff.  We encourage you to take a look at each newsletter as they come out.  Even if you don't TCPA will highlight the pertinent information for you.

 

Who needs a commencement address? Read this article!

Who would expect the Baltimore Sun --itself on the brink of bankruptcy and bereft of editorial staff--to provide the equivalent of a top-drawer commencement speech for this year's grads?

Well, they did.  Whether you are graduating from college or high school, you've got to read "Advice to grads: Strap yourself in for the long ride ahead," by Jay Hancock, the Sun's fine economics columnist.

What's so good about this advice?  It is full of common sense.  It covers not just money but career choice, lifestyle choice, even politics. Best of all, Mr. Hancock acknowledges that he would give the same advice when "times are flush" as he does for today's gloomy market.

Here are some of Mr. Hancock's suggestions:

• Start saving today.  Time is on your side.

• Find work you like, even if that means trying different careers and types of internships.

• Avoid debt.

• Vote.

• Find someone to love and stay married.

• Wear seat belts.

The bottom line:  life is long, and recessions are relatively brief.

The only thing missing is the advice to pursue a career as a CPA. But you already know that.

Do you see anything else missing from Mr. Hancock's list?

Accounting still going strong in weak economy

For those who follow accounting news (and who doesn't?) there were two apparently conflicting reports released this week.

The bad news is really not so bad and the good news is very good.

First, the Washington Business Journal trumpeted that "Big accounting firms trim their local payrolls." That's the headline.  But the article goes on to say that smaller firms are still hiring and that there remains a huge demand in corporate accounting.

Forbes Magazine highlighted a number of professions that are faring well during the recession and accounting was one of them, because "Businesses everywhere need someone to keep the books."  The article singles out Baltimore and D.C. as two places where accounting is thriving.

You are still a few years away from your CPA, so you may think this doesn't concern you.  But isn't it reassuring to know that, even in the worst of times, accounting is a pretty secure career?

Kudos to top accounting students

It happens every spring: accounting educators from Maryland colleges and universities select their top student--usually a junior--to receive the MACPA Outstanding Achievement in Accounting Award.

This year we have 11 winners: Charles Thompson, Jr., American University; Samuel Adatto, Goucher College; Wan Qian Zhang and Michael Beard, McDaniel College; Brian Acton, Mount. St. Mary's University; Sarah Kooistra, Salisbury University; Michael K. Feehely, Jr., Stevenson University; Zach Lust, Towson University; Jamie Knight, University of Baltimore; Christopher M. Stavish, UMBC; and Michael Zakin, University of Maryland College Park.

Award winners receive a certificate, a congratulatory letter from Tom Hood, and a check for $50. MACPA salutes these members of the Tomorrow’s CPA program and wishes them continued success in their studies.

The Top 10 Things Wrong with Letterman’s Top 10 Things About Being an Accountant

As he is perennially wont to do, David Letterman commemorated the end of tax season with a Top 10 list, this time featuring a group of accountants listing the top 10 lessons they have learned as accountants.

Of course, the "lessons" were ridiculous. "White out and 7-Up. Curiously refreshing."  "You do the taxes, don't let the taxes do you."  "Numbers is hard."  "Women want me. Men want to be me."

Like most of Letterman's humor, this was innocuous poking fun at an easy target. Beneath the good fun, however, lurked a totally obsolete stereotype of the profession.  An iconic Gen Xer really should know better.

So to help correct the record, here is TCPA's Top 10 Things Wrong with Letterman’s Top 10 Things About Being an Accountant.

10. The accountants were only from the New York area.  They were all Yankees and Mets fans.

9.  With one or two exceptions the accountants were not good looking.  Almost all CPAs are
attractive; those that aren't, are striking.

8.  Only two of the accountants were women.  Since 1986 over 50% of accounting graduates have been female.

7.  Except for an Hispanic woman, all the others were white and possibly Jewish. (There were even two
Cohens!)  So much for diversity in the profession.

6.  All were labeled accountants, not CPAs.  Maybe none were CPAs.  That might help explain the lameness of the jokes.

5.  Not one was wearing a green eyeshade.  What good is a stereotype without the appropriate gear?

4.  There are so many great accounting jokes.  Why didn't they steal at least one?  Better yet, why not
feature John Garrett, a CPA and stand-up comic?

3.  One of the accountants was a dead ringer for Matthew Broderick.  Letterman got some mileage out of this but why didn't he mention Broderick played an accountant in "The Producers?"  He lost serious pop culture cred on that one.

2.   I don't think these were real accountants.  Not one looked durable enough to survive even a mild tax season.    

1. Where was Letterman's own accountant?  (She's probably a CPA in Indiana.)

No doubt Letterman will roll out another Top Ten after next year's tax season.  Let's hope the presentation is a little more authentic and a lot funnier.

It's not polite to swear, but . . .

It's okay if you are swearing to protect the public interest.

That's been the central commitment of the CPA profession for 108 years.  But this time around, when first time Maryland CPAs take an oath to adhere to this principle, that oath will be even more compelling.  And they’ll do so in front of a sizeable crowd, at the second annual Maryland Business & Accounting Expo, June 16, at the Baltimore Convention Center. 

Tom Hood, CPA, CEO & Executive Director of the Maryland Association of CPAs (MACPA) said, “With our financial system undergoing so many upheavals, CPAs and the public need to recognize the profession’s responsibility to financial markets. to small business and the individual consumer.  Having young  CPAs take an oath symbolizes our continuing commitment to playing this integral role of protecting the public with absolute integrity.”

Officials from the Maryland Department of Labor, Licensing & Regulation (DLLR)  will administer an oath to new Maryland CPAs in an evening reception and swearing in ceremony. Officers from the Maryland State Board of Public Accountancy  and the managing partners from Maryland CPA firms will also be present.

This special ceremony will culminate a full day of Expo activities, including presentations by nationally known thought leaders, more than 60 one-hour workshops, and dispays from dozens of vendors.

To obtain a CPA license in Maryland, individuals must complete 150 hours of secondary education, pass a challenging four-part examination and complete a course in ethics.  In 2008, 279 candidates passed the CPA exam

To see a video of last year’s CPA swearing-in ceremony, go here.

Can you see yourself taking the CPA oath in a few years?  That's one dream that can come true if you work hard.