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This position doesn’t yet exist and this column is the first official announcement of the CAO position in accounting firms: Chief Accountability Officer.

Nobody likes to be told what to do, especially partners in accounting firms. Until now, the bad person was the managing partner, but many firms, even very small ones, have set up corporate-like structures and accountability oversight seems to be a position that has fallen through the cracks.

Accountability for doing what ought to be done, should be done or what people say they will do has declined greatly among accounting firms. Evidence of this can be seen in rising lawsuits, deficiencies in quality reviews, and increased turnover of clients, staff, partners and in some cases managing partners. This is a pervasive problem not limited to any single group. People are distracted, firms are shorthanded, workload compression periods stretch resources, and many adopt a get-it-out-the-door mentality when facing multiple deadlines. Partners or staff just try to satisfy too many people while satisfying no one.

Many problems occur because of failed promises and procedures, neglected implementation of assigned activities, and failure to properly train and supervise subordinates. Besides not satisfying partners or clients, some of these mistreated actions bring down the high-quality standards stressed by firms in so-called culture-strengthening activities or their marketing materials. Staff members get mixed signals and, except for some exceptional people, most of them drift toward the lowest standards. Some of the delays or quality reductions also expose the firm to excessive risk. Hence, the need for the creation of the CAO, Chief Accountability Officer (not Chief Accounting Officer).

The CAO will be responsible for maintaining the standards expressed in the firm’s mission statement, following up to make sure deadlines are met, and required procedures are not circumvented. Initially this will be an annoying position dealing with partners and staff. This is because of potential resistance since most people do not like to be accountable for what they say they will do and for which they later decide that maybe it wasn’t as important as they thought it was when they made the commitment.

The CAO will be an important risk management and quality-building position. Like any position that does not directly generate revenue, it will be delayed until something happens that causes management to ask themselves, “If only we had a CAO!” If that will be your reaction, then appoint a CAO now before you will need to ask yourself that.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 743-4582 or emendlowitz@withum.com.

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Practice management Partnerships Client relations Ed Mendlowitz