If you are an auditor and that is a diagram of new audit rules, then you need to completely understand the graph. Image courtesy of Adobe Stock.
Here are some fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs.
To get ready for a writing project this summer, I’ve been going over my notes from some CPE conferences and classes.
Thought I’d share some of the fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs.
To family and friends of those who did not return, I humbly say:
My deepest condolences on your loss.
From someone who appreciates the price paid for the freedom I cherish everyday, please accept my thank you on behalf of your loved one who paid the price that my family and I can live free.
“Thank you” is so little, but it is all I have to give you.
Let’s face it, we all goof up sometimes whether by insulting a client, dropping the ball on a project, or the good ol’ engage mouth before engaging brain routine.
To repair the damage, especially in the work environment, an apology is needed.
Cover of “American Kingpin” from Amazon. Used under fair use.
The sad tale of Ross Ulbricht and his on-line drug bazaar called Silk Road is a good study of the outer limits of how far rationalization can carry a person.
It is also a frightening illustration of Jeremiah 17:9. From the New International Version, ponder:
The heart is deceitful above all thing and beyond cure. Who can understand it?
Considering the tale of Silk Road is useful for accountants wanting to learn about the outer fringe of the internet and he investigative power of the federal government, believers who would like an illustration of the frightening level of deceit that lives in the human heart, and anyone else wanting to learn more about the dark worlds that normal people will never see.
My posts are gathered into two collections on my other blog, Outrun Change:
Several recent articles provide more background on Bitcoin and other blockchain tools. For your daily brain stretching:
Blockchain as a possible tool for fast and cheap international payments
China is working to restrict blockchain transactions
Central banks ponder issuing of their own virtual currencies
Tax status of blockchain transactions and the IRS is out fishing for tax evaders
Description of blockchain as being the internet of money, comparable to how the internet moves and stores information
8/28/17 – Journal of Accountancy – Blockchain opens new era for cross-border payments– Moving money from one country to another is time-consuming and costly. There are fees at both ends. It takes several days for the money to arrive. An error in one digit of the routing or account information means the transfer will go astray and take more time and money to locate.
Blockchain offers the opportunity to make international transfers near immediate and at a fraction of the cost.
For an illustration, picture a company paying international vendors. Or an international worker sending part of his paycheck back to his parents in his home country. Or a mission organization moving funds to its many field offices.
The rate of change we are seeing around us is massive. There are threats of automation or artificial intelligence even eating into what is called the white-collar world.
Here’s a suggestion on how you might cope with this overwhelming change: Take on full responsibility for keeping your skills and abilities current.
Article provides a brief summary of our education system. I will expand that with what I have learned elsewhere. Then I’ll mention a plan to dealing with this turmoil.
How will your business recover if ransom ware encrypts your server?
What is your planning to survive a tornado if your business is in Oklahoma, a hurricane if you work on the east coast of Florida, or a flood if you live in low territory next to river that overflows once a decade?
Rumbi Bwerinofa-Petrozzello ponders these questions in her 7/2/17 post If Lost…Then What?
She tells of finding a wallet on the ground, walking into the adjacent restaurant looking for the owner by glancing between the patrons and the photo on the driver’s license in the wallet. No luck.
When she got home she was able to do a bit more research. She located the woman and returned the wallet.
Life hack tip: make sure you have a business card with a current phone number and email in your wallet so that if a kind-hearted person finds your lost wallet the nice person can reach you quickly.
From there she transitions to disaster recovery. A few questions for you to ponder:
Two hundred forty-one years ago today marked the start of this wonderful, fantastic, heaven-blessed, messy, delightful, powerful, flawed, and glorious experiment called the United States of America which has delivered unimaginable levels of freedom to hundreds of millions of people here in the US of A and contributed massively to the freedom of hundreds and hundreds of millions more around the world.
If you want a really short description of this day, consider a photo of a sign on a store’s door I saw while browsing the ‘net:
Closed on July 4
in observance of
Brexit 1776
If you are looking for a brief description of the string of events which led to signing the Declaration of Independence and the follow-on events leading to full independence, …
Those of us living in the United States are blessed with religious freedom, political freedom, and economic freedom because those who went before us fought for freedom.
Many of those fighting offered up their life for freedom and the offer was accepted.
I am humbled and grateful to God that some of my ancestors are included in the long list of those who fought. I am especially humbled that a great, great grand-uncle is in the list of those who died in the defense of freedom.
Because of their sacrifice, I get to enjoy this kind of freedom:
There is little new information on the leak from PCAOB to KPMG since the first reports.
I’m expecting to hear a lot more, most likely after PCAOB and SEC finish their investigation. If I read this situation correctly, and if public reports are correct, there will be sanctions from SEC against some of the KPMG staff. At that point, the SEC public documents will tell us a lot more.
While we wait, here are two articles that give some general background.
4/17/17 – Francine McKenna at re:The Auditors – KPMG takes its turn with a Big 4-sized scandal– If you’ve been looking for an article with a long time horizon to survey the assorted scandals in the Big 4 world, this post will give you the deep background you want.
Leak from PCAOB to KPMG
Post describes the current information that is public on the leak of inspection engagements from someone at PCAOB to someone at KPMG. Article illustrates there still is not a lot visible in the public realm to answer all the questions that come to mind.
Ms. McKenna quotes my comment earlier on the PCAOB-KPMG leak feeling to me like a red flag of something deeper. She agrees with me.
Each firm has their own round of fiascos
All the firms have had their turn of embarrassing publicity, often with fines or undisclosed settlements.
A minor update on the leak from a now-former PCAOB staffer to a now-former KPMG staffer giving advance notice of audits selected for inspection. Also, many questions come to my mind after thinking about this situation.
The KPMG representative says that KPMG discovered the issue and notified the SEC and PCAOB.
Most significant piece of new information is that the six people who left the firm were fired.
They did not resign.
Why is this significant, at least to me? In the initial reports, I saw verbs used indicating all of the following possibilities for the partner’s departure. They may have:
resigned (which means sorta’ kinda’ voluntary terminations), or
were fired (which means the firm unilaterally terminated them), or
departed (which doesn’t addressed which party made the termination decision; in other words could have been a summary firing, or truly voluntary, or under the proverbial threat of you-can-either-resign-or-I’ll-personally-throw-you-out-the-window).
At first read, I did not analyze which of the above options actually was in play. I put together all the reports I read and assumed (you know what that means) these were all forced resignations, as in “I think it’s time for you to resign.”
Other comments by the PR person confusing me are statements that the fireable offenses were possessing the leaked information or knowing others knew about it.
We need to be ready for what’s around the curve. We will be there really soon whether we want to or not. Image courtesy of Adobe Stock.
In the short-term, looks like a shortage is emerging for experience accountants. In the longer term, the massive change surrounding us means we need to keep learning and adapting.
As CPAs, we need to keep learning new skills and focus on things computers can’t do.
1/30/17 – Bill Sheridan at Business Learning Institute of MACPA – Want to beat the machines? Learn to do what they can’t do– Here is a way to think about automation that you might be able to wrap your brain around – How will you adapt then 30% of the work you do is automated, done faster, quicker, cheaper, and more accurately than you can do? Not 99% of what you do, not 10%, but 30%?
I can’t get my arms around audit or tax or consulting completely going away. I just can’t picture that. However, I can imagine 30% or 40% of my work as an auditor becoming completely automated. Actually, I sort of like that idea.
Computers don’t do well at applying professional judgment, courage, empathy, flexibility, and reacting to body language.
Point of article is learn to do those things better.
1/31/17 – Bill Sheridan at Business Learning Institute of MACPA – Change is a choice. So are relevance … and your future – Each of us has a choice. We can keep doing what we are doing. Or we can decide to change and grow and learn new things.
If you casually pay attention to what is going on in the land of Big 4, a world far, far away from most of us in the accounting world, you might have interest in two recent articles from Jim Peterson, pondering the survivability of the huge firms. I will summarize what I think are a few highlights.
2/13 – Jim Peterson at Re:Balance – If the Big Four Went “Ex-advisory” – Deja Vu? Or Worse?– Regulators don’t like the huge consulting practices in the Big 4 and the partners in the Big 4 consulting arms don’t like the constraints on their growth, opportunities, and compensation from being tied to the audit & tax practices.
Article speculates on the impact if the consulting work were to be spun off, as happened back in 1998 through 2001.
