Accounting education

Accounting Tomorrow extends its deepest condolescences to the family, friends and classmates or Xin Yang, 22, an accounting student at Virginia Tech who was decapitated on Jan. 21. For more on this story, go to the Accounting Tomorrow blog.

Carl Famiglietti is managing partner of Moody, Famiglietti & Andronico, based in Boston. He says that accounting firm management often finds itself locked in a tug of war between applying theory and being pragmatic, a struggle that can dampen capabilities and in some cases, the overall development of a firm. “For firms of fewer than 30 professionals, the tendency to avoid creativity in favor of traditional tactics can create a stifling atmosphere--or worse, it can lead them to rationalize that remaining static in size or approach is justifiable.” He points out that in this difficult economic environment, sustained, substantial growth is very much attainable and to achieve revenue growth that better enables innovation, leaders must drive towards a vision of what their firm will look like when their goals are achieved. In this respect, he says that the approach requires the eradication of three myths: Myth #1: Competition for Worthwhile Business is Too Intense Famiglietti notes that in a needs-based business such as accounting, the economic viability of the entire country depends on CPA expertise and involvement. “This means that although competition is intense (as it is in all fields), there is business for every capable participant.” He says that while large national firms control the lion’s share of the market, open opportunities are all around us. “The keys to capturing these opportunities lie in the investments a firm is willing to make. Some CPA firms view expenses in infrastructure, education, recruiting, and marketing as costs to be minimized. However, for real sustained growth to be achieved, the mindset of CPA firms should be more aligned with some of the best run companies in America.” Myth #2: Good Talent is Hard to Find According to Famiglietti, good talent is everywhere. “Virtually every candidate that enters into an interview process has great gifts to contribute as long as they are properly motivated, empowered, and rewarded for their contributions.” He adds that the ROI on education, regardless of the curriculum, is without limit and it is the only investment that provides sustained agility and immediate adaptability to the many external forces the market may impose upon a firm. Myth #3: Control Rests with the Partners Famiglietti notes that before transparency was an essential ingredient to trust among companies and stakeholders, markets and investors, and providers and clients, relationships were built on seniority. “To win a client’s trust, partners served as exclusive client contacts. Virtually all correspondence needed to be routed across their desks, and accounts were considered in jeopardy should a client be exposed to junior professionals.” He feels that clients relate to all types of individuals. “Indeed, they may relate to less experienced firm members equally if not more than they do to more senior professionals. In the end, clients want reliable and timely results and professionals want a challenge; for those two reasons alone, it is increasingly imperative for more seasoned professionals to yield control to those yearning for experience.” To Famiglietti, growth is often repressed when leadership’s belief in traditionalism and “how things are” exceeds their vision and passion of “how they could be.” He says that firms which experiment continually will find that just as in industries such as technology and pharma, innovation is a risk worth taking. “It is applying a theorist’s passion and creativity that will break the vicious cycle of stagnation and draw a trajectory of progression, talent recruitment, increased revenues, and profitability.” Above all, he concludes, leaders are those who adapt to external factors but do not let their fate be determined by the market. “Those firms that form a management strategy devoid of myths, that remain aligned with their mission, and that create an environment of trust and development will be poised to capitalize on the opportunities at hand.”

Accounting firm Wipfli has created a task force to help companies cope with the financial crisis.

Florida plans to cut the amount of time it takes to process exam scores for CPAs by more than half, reducing what had been a three-month process to less than a month.

Retirement recordkeeping software developer ExpertPlan has acquired Actuarial Enterprises Inc., a third-party administrator of defined benefit and insurance plans.

The American Institute of CPAs, the Chartered Institute of Management Accountants and the Society of Management Accountants of Canada have given awards to three individuals for management accounting research.

Eighty-eight percent of financial advisors now say that their clients are “off-target” for a timely retirement, primarily because of market depreciation, as opposed to 46 percent at the beginning of 2008, according to Brinker Capital, a leading investment management firm, that released the year-end results of its Brinker Capital Retirement Indicator, a gauge of financial advisor sentiment regarding retirement-related issues. In effect, it shows that the clients’ retirement security has been severely jeopardized by ongoing market deterioration. In fact, of the respondents who said they were off-target, some 74 percent claimed it would take between one and five years to make up the retirement savings shortfall. As to the reasons for being so, 97 percent said "market depreciation," 51 percent noted "didn't start saving soon enough," and 47% percent said "general procrastination." Brinker says that the question which provoked the most vigorous response was: "Are you seeing a disconnect between your clients' responses on their risk tolerance questionnaires and the level of risk they are willing to take today?" Some 75 percent of financial advisors weighed in with a resounding "yes." When asked if they think there should be a reassessment of the way clients' risk tolerance is measured, 76 percent also said "yes." Of course, going a little bit further down the road, when asked to comment on whether the government should mandate employee and employer participation in 401(k)s, 74 percent of advisors said "no." Moreover, a decisive 92 percent of advisors said "government should stay out of the management of 401(k)s." Clearly, these are rather strong responses. In addition, consider others such as:

Adaptive Planning introduced the latest version of its on-demand corporate financial planning software, adding new collaboration features, including cell notes and an audit trail.

Henry R. Keizer is global head of audit for KPMG International and also serves as U.S. vice chair, audit, for the U.S. member firm, KPMG LLP.

The Public Company Accounting Oversight Board said the financial statements of non-public broker-dealers now need to be certified by PCAOB-registered auditing firms.

College students attending an Ernst & Young tax career event acknowledged they are seeing more interest on campus in accounting as jobs in the financial industry dry up.

U.S. households worth $1 million or more have seen their assets decline 30 percent during the financial crisis, according to a new report.

Patty Duke and her look-alike cousin from her old TV series are back, this time helping seniors apply for Social Security benefits online.

Wade Slome has led an adventurous life. He started trading penny stocks in high school stock market competitions after the 1987 crash. As a freshly minted MBA graduate from Cornell University in 1998, he never expected in his wildest dreams to land on one of the largest mutual funds in the entire United States, but at the age of 32 he was managing a $20 billion dollar fund. In his newly released book, How I Managed $20,000,000,000.00 by Age 32, Slome shares what he learned on his way to becoming an investment giant, trading billions of dollars while rubbing elbows and hanging out with corporate heavyweights. Here are his key recommendations for surviving the present economic climate. 1. Don’t listen to the TV and don’t take what you read as gospel. Reporters are merely looking in the rear-view mirror and telling you what happened – not what is going to happen. You make money by anticipating what’s next, not by reacting to what has happened. 2. Invest objectively and independently, not emotionally. The worst decisions are made under the pressure to follow the herd. It is best to buy fear and sell greed--not the opposite. The historic Nifty Fifty, technology, real estate, credit, and tulip bubbles exemplify the hazards of following crowds. 3. The financial markets are inefficient and emotional in the short-run and efficient in the long-run. History proves over and over again that an unbiased approach that takes advantage of short-term dislocations will lead to prosperity. This philosophy requires a patient, then aggressively opportunistic mentality if you want to build true wealth over time. 4. The long-term efficiency of the financial markets requires a healthy dosage of passive investing strategies. Seventy-five percent of all active professional money managers under-perform the passive indexes over time. Investors can dramatically improve their investment performance over the long run by integrating passive investing products like index funds and exchange traded funds (ETFs). 5. Understand three things: Fees, fees, and fees. Brokers (salesmen) do a great job at being your friend and partner, and they are perfectly willing to make excessive fees for this privilege. It’s your responsibility to understand and ask the right questions that are buried in the fine print. The more you pay in fees, the further you push out retirement and the farther the path to reach your financial goals. 6. Don’t be myopically focused on your backyard. Opportunity abounds internationally, especially in certain emerging markets. The U.S. is five percent of the global population, but 25-30 percent of global Gross Domestic Product (GDP). Our slice of the GDP pie will be smaller in the decades to come due to faster growth rates abroad. Grab a larger slice of the pie by opening your eyes to international possibilities. 7. Experience matters. Would you want a nurse to handle your brain surgery? Or how about the flight attendant controlling your plane? Obviously not. And so goes the case for your investment/financial advisor. It behooves the investor to shop around and ask the right questions. Are the advisors registered? What type of education do they have? Do they hold any certifications? Have they ever invested money before, or are they just selling product? 8. The power of compounding interest is a miracle. Einstein called the power of compounding interest the "8th wonder of the world." What would 1¢ invested in 1492 by Christopher Columbus be worth today if it was invested at six percent with interest compounded? The answer: $114,242,178,628.50. Yes, that right, $114 billion with a “b”! Apply the power of compounding to your portfolios. 9. Taxes matter. That’s great if you make a lot of money, but if you pay it all back to the IRS in the form of capital gains or estate taxes, then what good is that? Longer term tax efficient products and strategies will build your wealth faster, all else equal. 10. Learn from your mistakes. The best investors make errors, learn from them, and avoid repeating similar mistakes in the future. Slome says that perhaps the most important recommendation is the crucial need to have a disciplined, systematic investment plan that can be reviewed periodically to chart your path to your financial goals. His new book is available at bookstores online. For more information visit www.Sidoxia.com

Colleges and students trying to understand International Financial Reporting Standards now have access to free course materials and case studies through Deloitte’s IFRS University Consortium.

With 210 federal securities class-action lawsuits filed in 2008, the level of litigation last year was at its highest level since 2004, according to a new study.

The economic turmoil of the past year presents a unique opportunity for accountants to broaden their practices to include financial planning.

The Internal Revenue Service recently gave 403(b) plan sponsors an extra year to comply with new requirements.

Accounting firm Goldstein Lieberman has introduced a consulting team to help business clients cope with the recession.

The stock market crash, plummeting real estate values and the credit crunch have created general-purpose anxiety for most CPA clients. But for those with children someday headed for college, that looming burden weighs particularly heavily.According to the most recent College Board survey, the average tab this academic year at a four-year private college is $37,390. And total expenses at four-year public institutions average $18,326 for in-state residents, and $29,193 for out-of-state students.