Tomorrow's CPA: The Blog

Why everybody wants to be a CPA

Over the last few years there have been many articles with titles like Accounting Is More Popular Than Ever. That's because accounting is more popular than ever, in terms of student enrollments and degrees awarded.

I don't think I've seen a better or more succinct explanation for this resurgence than that offered
by Marc Rosenberg, CPA, in a new article.  After discussing the state of the accounting industry, he opines that "careers for CPAs are once again hot for many reasons:

• Accounting has always been a stable career, even during a recession.
• Earnings for CPAs have always been near the top of the pay scale compared to other jobs. This applies to entry-level jobs ($45,000-$60,000), experienced staff positions ($80,000-$150,000) and the ownership ranks (national average of partner earnings is $369,000). All of these positions are higher paid than 95 percent of other jobs.
• Contrary to the stereotype, the career of a CPA is far from boring. When the U.S. was asking CPA firms to prevent another Enron or WorldCom failure, young people paid attention. When, as I predict, CPA firms play a key role as the government's watchdog over TARP and bailout money, young people will again take notice and become increasingly interested in accounting as a career.
• With thousands of baby-boomer partners in pre-retirement mode, opportunities for young people to rapidly become owners of firms are terrific. 
• Emphasis placed on work-life balance at most firms has dulled the ages-old (and richly deserved) perception that working at a CPA firm is like a sweatshop.
• There are tremendous opportunities for women and minorities, both of whom are woefully under-represented in the partner ranks at firms across the country."

Those are 6 very good reasons, I'd say.  Which one, or ones, influenced your decision to consider
becoming a CPA?

CPA puts a (pretty) face on financial lit

Financial Literacy Month ends today, but the need for CPAs to volunteer is greater than ever during this economic crisis. Patrica Reese, a former chairperson of MACPA  and member of the National CPA Financial Literacy Commission has launched a monthly brown-bag financial-education program called "Your Money. Your Choice$. Your Future."

Reese and a colleague at  Health Resources and Services Administration (HRSA) are drawing upon the materials available through AICPA's 360 Degrees of Financial Literacy.

Watch this three-minute video to learn more about her efforts.

Maryland CPAs have been very active in our communities and public schools.  Have you seen any local CPAs promoting financial literacy?

MACPA completes a 6-point toss

The Maryland Association of CPAs wants to send a message to its members that it’s there to help them survive the turbulent economy.

The association’s home page highlights several programs to help members cope with the recession and position themselves to take advantage of the economic recovery. Offerings include 24 hours of free continuing professional ed; a new online career center for job placement; an economic resource center with articles and studies; shared-service purchasing programs offering substantial discounts on office supplies, printing and other necessities; the Maryland Business and Accounting Expo on June 16-17; and promotion and protection of the CPA license through public relations and legislative programs.

“We felt it was important to emphasize to our members that their association is right there with them at a very challenging time,” said MACPA CEO Tom Hood  in a statement. “A few of these six programs are actually ongoing, but all are adapted or refined to address today’s urgent financial and informational needs.

MACPA has also turned up its Web 2.0 and social media communications a notch, with daily blogs such as CPA Success, a presence in SecondLife  and frequent messages on social networking sites such as Twitter, LinkedIn and Facebook.

Take a look at the series of slides at the top of MACPA's Web page.   Do you think members would respond to this message?  What would you like to see on our student Web page that would be helpful to you during the recession?

He ran for president?

Are CPAs unsafe at any speed?

After a career of attacking the Big 3 automakers, Ralph Nader is now taking on the Big 4 of  accounting. He has written an article for his Web site chastising the CPA profession for standing by while Wall Street firms “used the latest tricks to cook the books.”

This smacks of all those attacks on large CPA firms in the wake of the Enron scandal back in 2001.  Fortunately, this time Nader is almost alone in singling out CPAs as the miscreants responsible for the large-scale business failures and the recession.

You do have to appreciate Nader's dramatic rhetoric: "Who among the brainy, head up accountants, in practice or in academia, will join with Lynn Turner and rescue this demeaned, chronically rubber-stamping “profession,” especially the “Big Four,” from its  pathetic pretension for which tens of millions of people are paying dearly?"  Nobody has really listened to him for years and Al Gore fans will never forgive Nader for (suppposedly) sabotaging their candidate in the 2000 election. Nader logged 2.74 percent of the popular vote.

Is there a grain of truth in Nader's accusations?  Do his arguments affect the way you feel about
joining the CPA profession?

What do teachers talk about when you're not around?

They talk about accounting, of course.  MACPA devotes one full day every year to an Educators Conference, where college accounting profs listen to dynamite presentations, politely disagree with at least half of everything said, and meet and greet old and new contacts.

They also address some of the most burning issues in the profession:  new regulations, curriculum innovations, social issues that affect academia, and much more.

This year's conference in January was no exception. Read this incisive summary and hear about everything from international accounting standards (they're coming they're coming) to a proprosal to allow candidates to sit for the exam with only 120 credits (you heard that right).

The grand finale of every conference is a panel of students.  This year three TCPA members – Tracy Fluty (Mount St. Mary’s University), David Tomney (Stevenson University) and Josh Smith (McDaniel College) discussed “What made me major in accounting?” All agreed that the broad opportunities offered by the accounting field helped influence their decision. Such factors as the post-Sarbanes-Oxley job market, the opportunity for international exposure and travel and, of course, inspirational teachers and others also sparked interest in the CPA career.

Maybe you will do one of these student presentations some day.  What would you want to say to a group of 80 accounting educators?

Whither the 150?

Is somebody trying to deep 6 the 150?

To some people, the 150-credit requirement to sit for the CPA Exam was the most undesirable legislation since the 18th Amendment (which banned alcohol). 

Ever since it took effect in Maryland in 2000, many educators, candidates and employers have decried the 150 requirement as a needless, costly hurdle to CPA licensure.  Despite mounting accounting enrollments and evidence that exam pass rates have in many cases improved, the requirement remains everybody’s favorite scapegoat.

Last fall NASBA (National Association of State Boards of Accountancy)  issued a draft report about the emerging trend of allowing candidates who have completed 120 credits to sit for the exam.  Candidates would still be required to complete 150 credits in order to obtain a license--but they would be able to sit for the exam right after college graduation.  About 30 states have adopted this requirement, but a few others, including AICPA have voted against it, on the grounds of protecting the public.

The Maryland State Board formed a task force to evaluate this option. The task force recently met with accounting educators to get their views and has now met with nine candidates and new CPAs.  Even more strongly than the educators, the candidate group supported the option of sitting for the exam after 120 hours. But this was no knee-jerk reaction.

They shared a consensus on several key points:

1. The graduate of a good accounting degree program is capable of taking and passing the exam with 120 credits.
2. The ultimate total of 150 credits to attain licensure should remain in force, to both protect the public and ensure the knowledge and quality of new CPAs.
3. Educators, candidates and employers should focus on making the 30 postgraduate credits meaningful and relevant to the candidate’s professional development.

The State Board of Public Accountancy and MACPA are grateful to the candidate/young CPA group, which included MACPA/TCPA members pictured here: Victor Arthur, Tracy Fluty, Brian Davidhizar, Lindsay Cronin, Josh Smith, Mark Kaufman, and Richard Fink.  Ebony Harmon, and and Daniel Ramos also took part.

Next steps? The State Board Task Force will report to the full board. The proposal could proceed from the Board to the Governmor’s Office and then the proper legislative channels. The earliest date the new law could take effect? October 1, 2010.

The class of the class of 2009

Those graduating from college this spring face dispiriting job prospects. Hiring is down in almost every field and the market that looked so promising when you were a junior is now looking the way it did when your great grandfather was a junior, in 1934.

But lucky you: you majored in accounting. According to the latest survey accounting is among the top ten fields for employment this year.  Not only that, but two related positions that accounting majors might gravitate to--financial analysts and personal financial advisers--also made the top ten.

So your employment prospects may not be gangbusters but chances are accounting majors won't go bust.  Aren't you glad you changed your major from journalism?

You, too, shall pass

The CPA Exam has quite a reputation.  We wonder how many students never even dream of becoming a CPA, out of sheer terror at the prospect of the exam.

An article in New Accountant five years ago concluded that the CPA Exam is "slightly harder" than the Bar Exam.  At that time (before the era of the computerized CPA Exam),the CPA exam had a passing rate of between 10 percent and 20 percent, while the Bar exam had a passing rate of between 60 percent and 80 percent.

We don't know the current passing rates for the lawyers, but the Uniform CPA Examination passing rates have improved markedly in recent years.

Here are the section-by-section pass rates for the first quarter of 2009, as reported by the AICPA Exam Web site: Auditing and Attestation (AUD) 47.61 percent;  Business Environment and Concepts (BEC) 46.23 percent; Financial Accounting and Reporting (FAR) 45.54 percent; and Regulation (REG)47.96 percent.

Why have the rates improved so much?  Is the computerized exam easier than its predecessor? Are the review courses better?  Are the candidates smarter or better prepared?

It beats us.  All we know is that the impossibility of the exam is a myth.  All 9,000 members of the MACPA had to pass the exam and they come from all backgrounds, all walks of life.

The CPA Exam:  Difficult, yes; impossible, no. 

Never say never, except . . .

It is a good policy never to say never.  Especially if you are an Orioles fan.

But we just encountered a never that we kind of like.  On its job site Yahoo has included accounting as one of the "jobs that will never go away."

Also meriting eternal life are computer support specialists; entrepreneurs; auto mechanics; paramedics; and teachers.

Yahoo could have added morticians: if accountants last "as long as there are taxes," then morticians should last as long as there is death, right?

The article doesn't list the countless job opportunities available to accountants, and the zillion more available to CPAs, but you can trust TCPA  to provide that.

In these difficult times, as in the best of times, the CPA is an exciting and practical career choice.

Deep thoughts at Salisbury

We know Salisbury University boasts a top-notch accounting program, but we didn't know how deeply students there think about some of the critical issues affecting CPAs today.

TCPA  member Seth Young, President of Salisbury's Beta Alpha Psi program, recently invited MACPA CEO Tom Hood to speak on the topic, "Corporate Scandals, Fraud and the CPA Profession." Seth asked Tom to "delve into the recent corporate scandals that reshaped the accounting profession in an unprecedented way...This will hopefully harvest a group of future accountants/CPAs that will not make the same mistakes."

Tom appeared at the school yesterday and he was impressed with the students' insights.  Here are some samples:

"I didn't realize how many people are likely to commit frauds" (20-30% will and 40-60% will at the right price according to one study by University of Missouri)

"Government should not be interfering in accounting standards - like fair value, they don't understand accounting"

"More government regulation is not the answer"

"I will be more aware (of fraud) and ready to stand my ground better"

"They should not be stopping short sales - that is how you can see potential problems in the market"

They finished with tips for them to stay ethical (the mirror test) and have the courage to "do the right thing":

Publicity test - How would your action look on national TV or in a headline?
Conscience test - Listen to your inside voice
Parent test - if you had children looking over your shoulder would they be embarrassed?
Role Model test - Would your role model approve?
Universality test - What if everyone did this?
Golden Rule - Would you like to be treated this way?

Tom Hood concluded, "These are sharp, astute students who are much more aware of the world than I remember when I was in college (assuming I can remember back that far). I came away form that session energized, hopeful, and thinking how lucky our profession is to have this crop of students almost in our workforce."

Have you discussed the recent business scandals at your school?  Can  you think of any more self-tests one can apply, to help prevent fraud?