Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Another handy question for decision making – will you sleep well?

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I’ve been waiting to talk about Charles Hall’s post Sleeping with your Decisions until I finished some comments on a CPA who would have failed every test outlined by Mr. Hall.

Making decisions when there is a fairly obvious right answer or clearly wrong answer is easy. Unfortunately, lots of decisions we deal with aren’t like that.

You recall the newspaper test – how would this decision look on the front page of the Wall Street Journal? See these two posts for this month’s illustration of this test. Hint: seeing your picture on the front page of the WSJ, which was obtained by the FBI during covert surveillance, is an extremely severe fail on this test.

Another great test introduced by Mr. Hall is the good-night’s-sleep test. It is somewhat fuzzy as a test but still helpful. Consider this:

Remember, a clear conscience is a precious commodity. If you believe a certain course of action is going to keep you awake at night, then your conscience is telling you not to go there.

He suggests four other questions that might help you process through a decision. The first one is the newspaper test. Ask yourself:

  1. How would I feel if my choice was placed on the front page of the local newspaper (or in the Journal of Accountancy)?

  2. What would my father (or anyone else I greatly respect) do if he had the same knowledge and facts?

  3. What would I advise my child to do in this situation? (If your child is three, pretend he or she is 30.)

  4. What’s the worst thing that could happen if I choose a particular direction? (I ask this question for each option and compare.)

I wonder if Mr. London would have done things differently if he had thought about any of those questions.

Mr. Hall has 4 action steps to help process a major decision.

Check out the article. It is superb.

A variation of this test is to live your life in such a way that your immediate reaction to receiving a letter from the IRS is to wonder how they made their mistake.

Copy the article, print it to paper or PDF, or add it to your Evernote database. Keep it handy somehow.

Written by Jim Ulvog

April 22, 2013, 7:15 am at 7:15 am

Posted in Pondering

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