New Ethics Rules Mean Some CEOs Will Be Hunting for a New CPA
The relationship between a chief executive and his accountant is
an extremely important one. An outside accountant can be one of
your most trusted business advisors and a key to your success.
That's one of the reasons why a new initiative by the Public
Company Accounting Oversight Board (PCAOB) is creating a stir in the
offices of CEOs across the land.affiliate program reviews
Established by the Sarbanes-Oxley Act, the PCAOB is charged with
establishing rules for--among other things--auditing, quality
control, ethics, and independence. In April of this year the PCAOB
issued a set of seven rules for auditors of public companies.
Though focused primarily on tax services, these rules also address
ethics and independence.
The Rule in Question
Rule 3523 is entitled "Tax Services for Persons in a Financial
Reporting Oversight Role." In a nutshell, this rule states that an
audit firm must maintain its independence by not providing tax
services to any person in an audit client firm who fills a
"Financial Reporting Oversight Role" (FROR). In layman's terms, this
means that CEO's, CFOs, controllers, and others cannot have the
company's CPA firm do his or her personal taxes, or those of his
spouse or dependents. Using the same firm to perform both services
would create at minimum the appearance of a conflict of interest.
So Now What Do I Do?
There is a daunting array of accountants and firms to choose
from--from sole practitioners to huge national firms, from
generalists to highly specialized CPAs. However, there are few
basic guidelines you can follow in order to make the process of
choosing the right accountant a little easier:
What's the Big Picture? Take the time to step back and look at
your needs from a 30,000 foot perspective. Your new accountant
should be able to deal with not only your present need, but with
the unforeseen circumstances of the future. A good financial
partner will not only manage the individual pieces of your
financial picture, but also won't miss the forest for the trees.
Specialist or Generalist? If your financial needs require a
specialist, look for someone who has experience in your area.
Do you simply need someone to prepare your taxes? Then perhaps a
general purpose firm will do. But as in most industries today,
specialization has worked its way into all areas of society
and accounting firms are no different.
Large or Small? Will you feel more comfortable with a large
name-brand firm, or do you want the personal attention a smaller
organization can give you? Larger firms may farm out pieces of
your work to junior staff or even outside contractors. You may
not be getting what (and who) you think you are paying for. And on
the other hand, the smaller firm may not have the breadth of
resources you really need.best cpa networks
Check the Qualifications. It's easy to find out if the firm
you are investigating is properly licensed or has any pending
disciplinary actions. Make sure the people you partner with
have the education, licenses and certifications you need.
Accountants who have the certified public accountant (CPA)
designation must adhere to certain rigorous accounting
standards. It's uncommon, but some who offer accounting services
may be unqualified and may not carry liability insurance. Nor
would there be any supervisory body you could go to if things go
wrong. The apparent savings in fees, if any, could prove costly in
the long run.
Reputation is Key. Ask around and find out what kind of
reputation the prospective accountant (or firm) has. Talk to
your friends and business associates. If your friends and
business associates had to choose another accountant, whom
would they choose? A firm's reputation among non-clients is
almost as important as its track record with existing clients.
Finally, consider the "relationship fit." In other words, do you get
along with the individual? Do you share a similar outlook and
philosophy? Does he or she show a real interest in your business?
Don't forget that your primary factor in choosing an accountant
should be the value he or she brings to the relationship. And
always remember that real value from an accounting firm comes from
several key factors:
Superior professional service * A forward-thinking attitude with
your needs at heart * A relationship of trust
Evaluating such elements as a proactive approach to your total
financial picture, the ability to bring specialized expertise tocpa reviews
your situation, and superior professional credentials will help
you make an informed decision on the CPA's skills and ability to
address your unique needs.
