10 Stories That Shaped the Profession in 2012
Our editors' picks for the 10 biggest stories in public accounting in 2012
Congressional inaction led to a delayed start to filing season as the IRS worked to implement late changes to the law. Then the IRS itself ran into problems, as some of the anti-fraud measures it had implemented led to bottlenecks in the refund process. The slowdowns were eventually ironed out, but it was a bad way to kick off the year, particularly since tax-related identity theft and fraud remain a major issue.
2012 saw high-profile departures at a number of regulators, organizations and firms, including David Williams and Doug Shulman leaving the IRS; Jim Kroeker and Mary Schapiro leaving the SEC; Jack Weisbaum leaving BDO; Clarke Price leaving the Ohio Society of CPAs; Ron Eagle leaving the Information Technology Alliance; and John Brennan stepping down as chair of the Financial Accounting Foundation (though he remains on the board). And Jim Turley of Ernst & Young and Robert Attmore of GASB announced that they would be stepping down in 2013. In many cases, the departures were part of carefully orchestrated succession plans.
Despite optimism early in the year, it slowly became clear that there would be no progress on deciding what to do about the possibility of adopting International Financial Reporting Standards in the U.S. With a mid-year non-report from the Securities and Exchange Commission, and the sudden departure of Chief Accountant Jim Kroeker, what little momentum remained soon dissipated.
The next stage in the tax preparer registration regime unfolded, with hundreds of thousands of preparers wrestling with an entirely new mandate requiring continuing education and a competency exam -- the first test many have had to take in decades. Many potential Registered Tax Return Preparers have already decided to bow out of the business entirely, which should make for a tense 2013.
After decades of on-again, off-again debate, and a particularly contentious discussion in 2011, the Financial Accounting Foundation officially created the new Private Company Council in May to give non-public companies a stronger voice in accounting standard-setting. Billy Atkinson (pictured) was named its first chair in October, and the PCC held its first meeting in December. Well have to wait for 2013 to see what it accomplishes.
The Public Company Accounting Oversight Boards suggestion that the profession consider mandatory auditor rotation led to a year-long discussion that was fascinating, thoughtful and contentious. Were not likely to see auditor rotation enacted, but many of the suggestions that came up during the boards three public meetings probably will be.
Everywhere you looked this year, you saw an accountant with a tablet or a smartphone, or a vendor launching a new app. While the cloud remained a major tech trend in 2012, mobility and the mobile app were the new cutting edge.
After a year of tense meetings and sniping comments from International Accounting Standards Board Chairman Hans Hoogervorst (above, at left) about the U.S.s failure to adopt IFRS, some began to question the future of the convergence project. Not the Financial Accounting Standards Board Chair Leslie Seidman (at right), though, who maintains that convergence has achieved a great deal, and will continue to even as both boards look to shape the post-convergence standards-setting landscape.
M&A fever continued to sweep the profession, with two notable twists: First, more mergers between Top 100 Firms, like the three-way combination that created Warren Averett; the union of J.H. Cohn and Reznick Group into CohnReznick; Plante Morans merger with Blackman Kallick; and BDOs with Argy, Wiltse & Robinson. Second, there were more high-profile divorces, with proposed unions like those of Eide Bailly and Wipfli, and Burr Pilger Mayer and Windes & McClaughrey, being canceled.
If the torturous negotiations between Republicans and Democrats dont yield results, the profession could be facing yet another delayed tax season and the country could be facing serious economic trouble.