The Electronic Accountant: Tell me a little about your background and how you came to the Florida Institute of CPAs.
Turman: As a fourth-generation Floridian, I am a member of a rare breed, what we call a "cracker." After growing up in Miami, I was fortunate enough to have been offered several college football scholarships and had the good sense to accept the full scholarship offered from the University of Florida. I started out majoring in engineering but discovered my real love was in writing and consequently switched majors and graduated with a degree in journalism.
I began my professional career in banking as a commercial loan officer and then joined the Florida Farm Bureau as one of its communications/public relations staff. I was drafted into the association's lobbying corps and took on its governmental affairs responsibilities. It was there that I got my first taste of politics and it has been a passion of mine for 27 years. Three years later I joined the Florida Institute of CPAs as its first CPE administrator and in another three years, I was named the executive director.
Q: How do you perceive your role at FICPA? What is your mission?
A: My role is to represent the profession in the regulatory arena as well as to provide leadership, continuity and education. We spend a great deal of time informing and educating our volunteer leaders on the issues they face.
I have the responsibility to make sure that the FICPA doesn't operate on a one-year mentality. I must ensure that the goals, objectives and implementation of plans that are adopted continue from one administration to the next. From the standpoint of leadership, it is my responsibility to identify trends, evaluate risk and make recommendations regarding the implementation of new programs. For me, this is easy. To embrace new ideas and solve problems fits my style.
Conversely, the hardest part of that leadership role is eliminating those programs that have become marginal or unproductive. One of the most difficult things to do in association management is to kill those "sacred cows."
Q: The FICPA has an extensive and informative Web site. What role do you perceive the Internet playing in CPAs' lives in the coming years?
A: The Internet is making our world an increasingly smaller place. It enables CPAs to provide better service to a broader client base faster and more efficiently. Two key advantages the Internet gives CPAs are access to information and communication with a diverse professional pool.
These days, CPAs have immediate access to information, such as rulings, new accounting standards, etc., that used to take days, weeks or even months to get. CPAs who know how to navigate the Internet to get accurate information quickly place themselves far ahead of the pack.
Also, CPAs who have developed strong communication networks among other professionals through online discussion groups have the unique advantage of exchanging information within very broad and diverse circles. They gain exposure to ideas and information they may not otherwise see.
Q: What is the most important issue facing Florida CPAs? CPAs in general?
A: Let's face it, we're not dealing with Einstein's theory of relativity here. The most important issue facing CPAs is change and their adaptation to change.
It takes place on many fronts, but the one issue everyone is focused on at this time is determining what services to offer as the demand for traditional accounting services declines.
However, the profession needs to figure out where our new employees are going to come from. We have created a situation where we now require a fifth year of college in order to sit for the CPA exam. Yet, the graduates from the accounting programs (one of the most difficult business curriculum on college campuses today) are paid less than many business majors within the traditional four-year programs such as MIS, finance, etc.
Why is that? Its because, with the exception of the international firms, CPAs undervalue and underbill their services. And, as a profession, we've raised the requirements for credentialing while being miserly about the compensation professional and support staff receive.
A farmer once told me "You won't ever starve a profit out of anything." He was comparing the return on investment associated with reducing the amount of grain fed to his cattle. We're trying to starve a profit out of the professionals we employ. And it's coming home to haunt us because not only is the pool of talent drying up, but other career fields are attracting the brightest and the best students.
We're at a point that we have both the client trust and client demand for services while, generally speaking, CPAs can't expand their book of services because we can't hire the employees to take on additional work. What's the solution? More money? Repeal of the fifth year requirement? Accept baccalaureate degrees? Make the exam easier? Or, become publicly held so we can increase the capital need for business expansion? Those are all "real time" issues we need to focus on.
Many people within the profession feel barraged by all this change--this thinking outside the box--and the questions that it raises. This is not unique to our profession. Look at what has happened to the medical profession. You can now employ a doctor and provide medical services in a non-traditional entity. Change is everywhere and you can either try to understand and prepare for the coming changes or simply be left behind.
Q: You spearheaded the formation of a registered investment advisory subsidiary within the FICPA and made a deal with Lockwood Financial. Explain why you took this tack, and how the program is doing these days.
A: I believe it is important for the FICPA to help CPAs transition into new business opportunities and to guide them in the best way to integrate those opportunities into their services. Years ago, I studied the American Express model to find out why CPAs were attracted to offers made by firms like American Express. Some things I saw disturbed me. They especially disturbed me if they were going to be embraced by the profession in large-scale measures.
We then started looking at alternative structures to traditional accounting firms. During those discussions, it became clear to me that the strength of the profession is its reputation for objectivity, independence, and integrity. Therefore, the FICPA developed an investment advisory program that keeps the CPA on the same side of the table as the client and, consequently, allows the CPA to maintain these values.
Currently, CPA/SC is a little behind schedule in its business plan, a situation not unusual for a start-up business. Even so, to date we have 19 CPA firms signed into the program that either have become or are in the process of becoming licensed. Each of these firms has the potential to have at least $10 million under management at the end of next calendar year. Our goal is to have 50 firms and $250 million under management. We believe our goal is attainable.
I suspected from the start that the average CPA firm would require a great deal more teaching and hand holding than most people would expect. Not only have I been proven correct, but CPA/SC is the only firm I know of that provides an adequate level of training, oversight, and one-to-one involvement.
Q: Why should CPAs enter the investment advisory field?
A: Not every CPA should. One size does not fit all. Some people sell stocks and take commissions. Some people sell proprietary products because the fees are greater. Adding financial services to a practice adds new and valuable client benefits to meet consumer demand. However, the decision to add financial services is not one to be made lightly and is not for every CPA.
All CPAs need to realize, however, that the regulations, compliance requirements and responsibilities in the investment field are 10 times greater than those of public accounting. Most CPAs don't realize that. CPA/SC on the other hand, maintains the necessary back office to meet those requirements on behalf of our member firms.
Q: You're regarded as somewhat of a maverick in the profession, unafraid to incur anyone's wrath if you feel you're on the right path. How does that help/hinder you in your role?
A: I believe strongly in everything this profession represents and I do my job passionately. To be the subject of someone's wrath isn't pleasant but it has never caused me to cower. It simply is not a factor. We all have choices to make and I believe that the FICPA's deliberative process is a solid basis to justify the policies we embrace.
Q: Do you feel state societies are as strong as they once were, or do you see them declining in significance these days?
A: Overall, I think they are very strong today. Unfortunately, some state societies are simply the vehicle for the delivery of insurance and CPE while they blindly follow the AICPA's promulgations. Understandably, the AICPA's programs and pronouncements are generally designed in a "one size fits all" mindset or are developed to address a common denominator. Occasionally, however, some of us actually examine their proposals and, based on our own life experiences, find them flawed.
The same politics within state societies exist within the AICPA, just on a more complex basis because of the difficulty in dealing with 50 state regulatory schemes. While uniformity might simplify things for the AICPA, whoever believes there will ever be uniformity in all 50 states is politically naïve.
Q: What role do you think state societies should play?
A: As I said before, leadership, continuity, education and to provide a voice for the profession to their respective legislatures and the public. I think the state societies can play an invaluable role in exploring opportunities for their membership in ways the individual members simply don't have time for or resources to devote.
Q: What's your view on the consolidation of accounting firms?
A: As is often said about the stock market, "Its good until it becomes bad." I'm not going to predict dire consequences from consolidations, but I am concerned about the degradation of the CPA title in the public's mind.
Consolidation is actually coming from within the profession. If no CPA firms were willing to sell out, then American Express, Century Business, H&R Block and the others wouldn't be in the business.
I also think it is only a matter of time before publicly held, consolidated firms are offering attest services. Personally, based on their structures, I think they should be allowed to do so. Tell me, how is John Q. Public better served when audit reports from consolidated firms are on the letterhead of a shell CPA firm? Doesn't it make more sense to put the multi-billion dollar companies at risk and hold them responsible for their work products?
Q: What should CPA firms and sole practitioners be doing right now to make sure they'll still have a job in the 21st Century?
A: There is no question of CPAs having a job. It's a question of how that job will be structured. The public sector demand for accountability is at an all time high and is growing. We've enjoyed unprecedented economic growth and hopefully that will continue. That growth has CPA firms working at capacity right now.
Consequently, many firms aren't considering diversifying their service line due to their good fortune. If you wait three years to get into the investment advisory business, for example, I predict that you'll have less than a 25% chance of being successful. That holds true for other business opportunities too. CPA firms are in the mortgage banking business, the real estate business, the insurance business etc. and most of them tell me, "This is where the fun is."
The direction, variety and enjoyment CPAs derive from their work is dependent upon and will be directly attributable to what they do now to prepare for the future. CPAs should analyze and evaluate their current and future clients to determine what their needs are now, what they will be in the future and how they are going answer those needs and expectations.
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