As you may have noticed, this issue spotlights our annual Top 100 Most Influential People selections, one of the most anticipated features in the Accounting Today editorial calendar - if driven more by ego than anything else.
I won't use this space to rehash the introduction to the special section, which explains the criteria and methodology our staff uses to winnow a sizeable list down to 100 deserving candidates, but rather to expound on the challenges those featured in this section, as well as the thousands of others currently plying their craft in public practice, will likely have to address for the remainder of this year and into 2010.
It would be difficult to fathom a lengthier list of potentially game-changing legislation, such as cap-and-trade and health care reform, or its massive Excedrin-inducing tax implications, which is certain fodder for future columns. Add to that critical front-burner issues, such as tax preparer registration and tax patents, as well as an economy that, over-optimistic opinions to the contrary, is still light years away from where we once were just a few short years ago, and you have an imposing trifecta.
On a positive note, the CPA profession enjoyed a remarkable six-year run in its fee growth before braking just a bit while other sectors were body-slammed in the economic downturn. According to the recently released MAP survey from Rosenberg Associates, firms with annual net fees over $2 million grew at an 8.2 percent clip, a drop from the previous mark of 10.8 percent, but nonetheless impressive considering the economic climate. At firms with over $10 million in annual fees, earnings were down 8 percent from 2007 due to an anticipated decline in SOX and internal audit work, while among midsized firms that range between $2 million and $10 million in fees, profits were up almost 1 percent.
In medical terms, that would constitute a pretty good physical. And the profession will need a check-up for the work ahead.
First up, the matter of preparer registration. For years, the National Taxpayer Advocate has issued recommendations for oversight of "non-Circular 230 preparers" (those preparers who aren't CPAs, attorneys, enrolled agents or enrolled actuaries), with the Government Accountability Office and the Treasury Inspector General for Tax Administration following suit.
For its part, the IRS has said that by the end of the year it will issue a set of recommendations on the subject. No one doubts that such a move will help boost ethical standards, as well as compliance rates. However, should a formal registration process in some form be implemented, my question would be, what's to differentiate the cachet of the CPA credential from a "registered" preparer?
Another thorny matter lodging in the tax arena is tax patents. Although a number of bills were introduced during the 110th Congress to remedy tax patents, none of them were signed into law. Earlier this year, legislation was introduced by Reps. Rick Boucher, D-Va., and Bob Goodlatte, R-Va., which would prohibit patents on tax strategies. Not incidentally, Boucher and Goodlatte are senior members of the House Judiciary Committee, which has jurisdiction over patent legislation.
In addition to a proposed top-down overhaul of the financial regulatory system, Treasury Secretary Tim Geithner has pledged to do more to simplify the Tax Code. What exactly he means by "doing more" is unclear, although in true Capitol Hill fashion, he explained it in all the correct, if opaque, generalities.
Not to sound like a naysayer, but it seems like we've heard that "simplified" song before.
With all that being said, the ensuing months promise to be nothing if not eventful. I have full confidence that the T100, as well as the profession as a whole, are game and apparently healthy enough for the task.
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