My baptism of fire, coming soon after I began my editorial career, was the massive "Tax Reform Act of 1976." It was the first piece of major tax legislation with which I had to deal. I spent many hours on it, especially the estate and gift tax provisions dealing with the new unified credits. I worked extremely hard to make sure subscribers of the then Prentice Hall's looseleaf services got a correct technical recital of the provisions. Yes, I said looseleaf.
Let's fast forward some 29 years. In some ways, I am doing the same thing but there is an important change in my perspective. I am now working on describing a set of pronouncements from the Public Company Accounting Oversight Board (PCAOB). They include eagerly awaited guidance on when offering tax services compromises independence, required procedures to be followed when auditors provide tax services, and the significance of contingent fee arrangements. There also is a standard on engaging an auditor to report on whether a previously reported material weakness continues to exist. This standard will provide a means for public companies to give investors assurance that the material weakness has been remedied by an interim date set by the company which is prior to the date for a required filing with the SEC.
The rules and standard can't take effect until approved by the SEC, but that should occur quickly.
I'm writing up those pronouncements like I did the 1976 legislation, quite carefully reading the summaries and actual texts of the pronouncements, making sure I give an accurate description to Practical Accountant subscribers, and focusing on what would be of particular interest to practitioners.
But, here is the difference in my perspective. As I do my work now, I keep on thinking of new business opportunities that the PCAOB is generating for CPA firms. For example, there is a whole new set of engagements available to auditors if the public company is found to have an internal control material weakness. This opportunity is available to the current auditor of a public company, but is also available to a successor auditor. Then, there are tremendous opportunities with regard to the offering of tax services to public companies. The PCAOB, although not as harsh as some might want, did put significant restrictions on the offering of tax services by auditors to public companies that are their own audit clients.
If this is how I am thinking, I am sure CPA firms are thinking the exact same way and with the increased marketing acumen of many firms, I expect those have already been brainstorming on how to get as big a piece of this new business as they can.
So, some 30 years after I started, compliance and practice development are going hand-in-and hand and that second component is exciting accountants and me. It represents how much we both have really changed.
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