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When the hot-air balloon lifted off, the dawn weather was impeccable. Shortly thereafter, a terrible storm hit and engulfed the airship in thick clouds, heavy rain and unpredictable winds. After hours of bad weather, the pilot was relieved to once again see the ground, but the landscape was unrecognizable. Soon, however, he spotted a strolling figure and cried out, “Where am I?” The person on the ground shouted: “You’re in the basket of a hot air balloon!” The pilot cried out: “You must be a CPA!” The surprised stranger answered: “How did you know?” The pilot smiled and shouted, “Because you gave me very accurate but totally useless information.”The CPA on the ground in this after-dinner-speech ice-breaker reminds us of those in our profession, probably a majority, who still cling to the status quo in spite of plentiful evidence and common sense that it no longer serves the purpose that it once might have, many decades ago.

Successful small-business owners tend to be hard-working, tenacious, smart and highly focused. They have to be. According to a study by Dun & Bradstreet, businesses with fewer than 20 employees have only a 9 percent chance of surviving a decade.Yet even those that are successful fail miserably when it comes to planning for their financial future. In fact, it’s their proclivity to hone in so intensely on their business — certainly an attribute of being successful — that often gets in the way of their personal financial planning.

CAR DONATIONS PLUMMETAutomobile donations have sharply declined since 2004, when Congress tightened the tax rules for claiming charitable deductions, according to an analysis of IRS data by Grant Thornton. Before 2005, taxpayers who donated a vehicle were allowed to deduct its fair market value. Tax legislation enacted in 2004 changed the rules to generally limit vehicle donation deductions of over $500 to either the actual proceeds from a vehicle’s sale or the vehicle’s fair market value, whichever is less.

The Sarbanes-Oxley Act was passed in 2002. Six years later, subject companies are still in the process of trying to comply with its provisions. Add in the fact that other countries are implementing similar financial regulations, some of which U.S. companies operating in those countries are subject to, and it’s easy to see why SOX compliance is still a hot issue.While it seems like everyone is still arguing about implementation issues and which companies should be subject to which provisions, the main effect of Sarbanes-Oxley is to move the ultimate responsibility for the accuracy of financial reports from the outside auditor to the company’s management. “The accountant cooked the books!” is no longer acceptable. The company has to have sufficient internal controls and procedures to detect if the books are being cooked. Under Section 302, management has to certify the appropriateness and fairness of the financial statements, regardless of what an external auditor reports.

VRAKAS/BLUM BUYS CLIFTON GUNDERSON’S SAGE PRACTICEVrakas/Blum Computer Consulting has acquired the clients and employees of Clifton Gunderson’s Wisconsin Sage practice.

The accounting profession is blessed with many leaders at firms of all sizes who are dedicated to client service and hard work. Many of the characteristics that make these leaders successful now will be just as important in the future. A growing body of knowledge and an evolving industry, however, mean new competencies and careful planning must come into the mix for future leaders to excel.Succession planning and developing future leaders are issues that all accounting firms face today — especially as Baby Boomers leave or prepare to leave the profession. In many firms the runway is getting shorter and even reaching a crisis point in some cases. Too often I hear the question, “Who is going to buy me out?” rather than, “We are developing managers and future leaders.”

There are dramatic differences between the way large and smaller CPA firms handle various areas of practice management, such as management and leadership; recruiting, development and retention of staff; training; diversity of services; specialization; and partner accountability.For now, let’s define “large” firms as Top 100 firms; No. 100 had annual fees of $29 million in 2007. Meanwhile, the “smaller” firms are those below the Top 100 threshold.

Software & HardwareMIND THE GAAP

SEPTEMBER8: Chapter meeting, National Conference of CPA Practitioners, New Jersey Chapter. Victor’s Maywood Inn, Maywood, N.J. Contact: Fred Bachmann (973) 377-2009.

ILLINOISGrant Thornton LLP, announced that it had admitted 36 new partners and principals. The firm was also named one of the top workplaces for information technology professionals by Computerworld magazine.