CREATING VALUE THROUGH VALUES
I agree that values "are core toa firm's success," as Rob Lees and August Aquila note in their article, "Walking the walk" (August 2012, page 45). To expand on their philosophy, I say that accounting firms -- as well as professional associations and other organizations - are responsible for creating and delivering value for the profession as a whole, not just for their employees and clients.
As president and chief executive of the Institute of Management Accountants, I have not only established a set of core values for IMA employees, but have extended the core values to our members and volunteer leaders around the globe. The IMA's Global Core Values are:
1. Respect for the individual;
2. Passion for serving members;
3. The highest standards of integrity and trust;
4. Innovation and continuous improvement; and,
5. Teaming to achieve.
Lees and Aquila note that, "Partners need to embrace and constantly live the values." At the IMA, we do this every day by setting the right tone at the top, incorporating Global Core Values into our employee appraisal and volunteer selection processes, and by pursuing meaningful partnerships with like-minded organizations to deliver value to the profession. In this manner, the IMA delivers "value through values."
Ultimately, holding oneself to the highest standards of integrity and trust will benefit individuals (both professionally and personally), organizations, the profession and society at large. Thank you for reminding your readers of these foundational, yet impactful, virtues.
Jeff Thomson, CMA
President and CEO, IMA
ANOTHER JOB FOR THE PCC
The opinion article "A Job for the PCC" by Stephen Chipman of Grant Thornton (August 2012, page 10) was very interesting, but somewhat short in the analysis of the market being examined by the Private Company Council.
The PCC will indeed serve as the voice of "millions of privately held companies during the standard-setting process."
Mr. Chipman indicates that his firm services "more than 6,000 audit clients, nearly 90 percent of which are private companies."
And therein lies the problem!
The PCC will be reviewing and setting standards or modifications necessary to address the needs of users of private company financial statements that are in the class of private companies that "have little interest in raising capital from the public," are not publicly traded, but are not really small business.
There is no doubt that those "middle-market" businesses need relief from the current standards, and modifications of U.S. GAAP must be at the top of the PCC charts.
But there seems to be little consideration or understanding of Bill's Plumbing and Heating, or the Side Street Food Market. These are the small businesses that are the forgotten people of the standard-setters. There are millions of these entrepreneurs in the U.S. who, when in need of financing, are plagued by the same requirements that the public companies must follow.
The cost of auditing this type of small business is prohibitive, and many CPAs who used to do audits of these firms have discontinued that body of work. At best, they now do compilations for their clients - which are not looked upon favorably by credit grantors.
The rules and regulations of GAAP usually have little bearing on and meaning to the small-business owner, and should be recognized as unwarranted by credit grantors.
The American Institute of CPAs and the regulatory agencies seem to have little or no understanding of these "forgotten businesses." The institute voices concern for their plight but takes no action to remedy the situation.
And, of course, there is the cost to promote and publicize any new regulations. It took a long time and a tidy sum of dollars to get bankers and other credit grantors to accept the differences between audit, review and compilation, and it is somewhat understandable that the AICPA would not relish repeating the process.
But in fairness and an effort to open credit lines to the "mom and pop" businesses, there must be a revision of standards to help these organizations. Devising regulations for the middle-market business organizations would not suffice for the small businesses of the nation. They deserve and must have rules and guidelines specifically devised for small business, not a warmed-over, somewhat-reduced version of the regs that will apply to the larger ("midsized") private companies.
It would be advisable, even at this late date, to add some CPAs who actively deal with these small businesses to the roster of the PCC. There are CPA organizations such as the National Conference of CPA Practitioners that service small business and really understand their requirements. They could be of great help in bringing this specific point of view to the PCC.
Edwin J. Kliegman, CPA
Founder, Marcum & Kliegman (now Marcum LLP)
Past president, NCCPAP
THANKS FROM A CPA
Thank you, Mr. Rosenberg, for your excellent response to the Yahoo! article, "Six Careers for People Who Don't Like People" ("Yahoo! article hits accountants below the belt," September 2012, page 14).
I have to confess that when I read it, like you, I knew we were on the list - but I wondered which number we were. After I read it, I shrugged and thought, "So, what's new?" and browsed on. In retrospect, I should have challenged the article at the time.
My sole defense for not doing so: I am not only a CPA; I am also a blonde.
Linda Thaler, CPA
New York City
