Financial reporting

Bob Levy of New York City-based Levy & Associates called to tell me about a CPA Career Day and The Singing CPA. I thought the idea a superb one. You see, students from the Academy of Finance schools in New York City had the opportunity to get a firsthand look inside the world of accounting at this year’s CPA Career Day, an event that featured speakers from Goldman Sachs as well as music from “The Singing CPA,” who played songs spiced with accounting-related lyrics. Sponsored by the Academy of Finance and the New York Society of CPAs, it was attended by high school students, many of whom are considering the field of accounting in their future. According to Joshelyn Vivas, a junior at John Dewey High School, the event was not only informative but motivating, as well. “After listening to the speakers it makes me want to be a CPA and take the exam. An accounting firm is where I want to be.” Julie Levin, a Goldman Sachs vice president in their tax department, notes that putting in the hours is one of the most surprising things for students. “I kind of tell people that you’re likely to start out working about 55 hours and that doesn’t include email time, coffee, or lunch breaks.” Regina Flannery, Director of the Academy of Finance, points out, “The fact that the students have the opportunity to gain access to successful professionals in the accounting field will prove extremely beneficial. What we’re really trying to do is give the students a three-dimensional look at a potential career choice. While many of these students may not choose accounting as their profession, they’ll at least have had the chance to see what the field has to offer.” This is extremely important says Levin because in the end she feels that it’s really the students who have to decide what they want to do with their future. “No one can make that decision for them. It’s all about taking your career in your own hands. If you want to do international travel, you really have to let people know.” Providing much of the entertainment was Steven Zelin, also known as “The Singing CPA.” He currently works at Societe Generale, a large corporate investment bank, in addition to having his own consulting CPA practice. “I enjoy sharing my experience as a CPA with young people,” says Zelin. “A lot of the students think first off that being a CPA is all about the numbers, but it’s really being able to work well with other people as well as understanding business and accounting concepts.” He adds that becoming a CPA provides a strong foundation for many types of careers in business. “I think that the training you get from studying accounting provides a terrific foundation for developing a good financial perspective on life.” He also stresses that becoming a member of the NYS Society of CPAs would be a sound financial investment to students looking to go into the field. The Academy of Finance is a partnership of the New York City Department of Education, the National Academy Foundation, and the New York business community. The Academy introduces students to a variety of career opportunities in the financial services industry while equipping them with the conceptual and practical tools they need to choose their future profession. The National Academy Foundation creates partnerships between business leaders and education through an innovative educational model. Its small public school-based learning communities empower high school students to successfully go on to higher education and professions of their choosing. Thanks, Bob.

Securities and Exchange Commission Chairman Christopher Cox told a Town Hall Los Angeles meeting that he wants Congress to give more power to the Governmental Accounting Standards Board so GASB can police accounting practices at the state and local government level and better regulate the municipal bond market.He would like the SEC to be able to enforce GASB accounting rules when it sees a violation by a state or local government, similar to the way the SEC can take action against companies that flout Financial Accounting Standards Board rules. Texas and Connecticut have both passed bills recently allowing alternative accounting rules, although Connecticut Governor Jodi Rell has vetoed that state’s bill.

Louisiana accounting firms LaPorte Sehrt Romig Hand CPAs and the Gautreau Group plan to merge on October 1.

The Internal Revenue Service said it has begun mailing educational letters this month to more than 650,000 small tax-exempt organizations to let them know they need to start submitting a new annual electronic notice known as an e-Postcard.Form 990-N, the electronic notice they have to send, is intended for tax-exempt organizations with gross receipts of $25,000 or less. Until the passage of the Pension Protection Act of 2006, charities of that size weren't required to submit either the Form 990 or 990-EZ.

Many people believe in collectibles as another track of asset allocation. In other words, buying and maintaining certain pieces of collectibles is seen as an additional brick in their financial planning foundation. It’s all part of establishing a net worth. For many of my age group, we had a great collection of comic books until we went away to college and returned home to find that our mother had cleaned out the garage and tossed all those dust-carrying original copies of Superman. We all experienced that one. But, as I grew older, the penchant for comic books ceased and I gravitated to something with wheels. I have a car that is now 17 years old. Yes, you read that right. 17! It has a mere 110,000 miles on it and is in mint condition. It was also, when it was unveiled in 1990, rated by most of the motor trend magazines as the car of the year. It certainly, over its lifetime, has lived up to that accolade. I noticed that before it hit the 15-year mark, its valued had certainly dropped. But, as soon as it passed the 15-year threshold, I saw an immediate rise in value as it entered the “classic” stage, which it is today. So, this to me is like money in the bank. As long as I keep it in such great condition with constant mechanic supervision, I have developed a pretty good asset. Some people don’t gravitate toward cars but more toward, let’s say, art. A few weeks ago, I visited the Raymond James Financial center, its corporate headquarters in St. Petersburg, Florida, to talk with various executives to find out where they are heading with the financial planning explosion upwards because of the Baby Boomers. Talk about asset allocation. I was opened up to the Tom and Mary James/Raymond James Financial Arty Collection, one of the country’s largest private collections. It consists of more than 1,850 pieces including original paintings, sculptures, and graphics in both prints and posters. Tom James, Chairman of the Board and CEO of Raymond James Financial, and his wife Mary, own more than 95 percent of the collection. It is on display at the firm’s corporate headquarters. The art is placed on different floors of each campus building according to style and theme. Mr. James has selected almost every piece of artwork himself. While some of the artists in the collection are now deceased, he believes buying works from living artists helps to sustain them in their profession. Although the collection began in the late 1950s with predominately American artists, primarily from Florida, it has grown to include works by such artists as Alfredo Arreguin, Alexander Calder, Mihail Chemiakin, Salvador Dali, Jacob Lawrence, Roy Lichtenstein, Joan Miro, Leonardo Nierman, Robert Rauschenberg, James Rosenquist, Andy Warhol, Jamie Wyeth and Victor Vasarely, among others. In the mid 1980s, while on trips to Colorado and New Mexico, Mr. James began to collect Western and Southwestern art. At the present time, more than half of the collection consists of Western/Southwestern styles of art, including works by Roy Anderson, Earl Biss, J. D. Challenger, Glenna Goodacre, The James family, as well as Raymond James Financial, has long been a supporter of the arts. This year, for the fifth consecutive year, Raymond James Financial will be the major sponsor for the renowned Raymond James Gasparilla Festival of Arts. In addition, Mr. James is currently president of the Salvador Dali Museum Board of Directors. Hmmm. Is he interested in trading a piece of art for my car? Probably not. And I probably wouldn’t, either.

I first came across the term a number of years ago when consultants stressed to me the importance of identifying where a business was in its life cycle. These consultants believed businesses and industries have a life cycle, and the key is identifying where the business is at that time. In the case of a business, its life cycle includes progressive identifiable stages, such as the “seed,” start-up, growth, established, etc.

Thinking about expanding your services to encompass financial planning? Ask yourself this: Are you entering into the business for the right reasons?"I think the first thing a CPA should consider is the why. Why do they want to be in the business?" asked Bob Palmer, president of Plante Moran Financial Advisors in Southfield, Mich. "I think the proper answer is because [CPAs] are being asked by their clients for help in this area. They think they have a unique perspective because of the intimate relationship they've developed, the knowledge of the history of the individuals and their businesses."

Donor-advised funds have captured headlines since the millennium changed, often for their meteoric rise in popularity. There was an estimated $5.5 billion in donor-advised funds nationwide in 1995, while the current estimate is nearly $20 billion.These giving vehicles have existed for more than 70 years. Despite their longevity and impressive growth, numerous misperceptions about donor-advised funds persist. These common "myths" underplay the real value that a DAF can have in helping you meet your clients' philanthropic needs.

SEC WON'T APPEAL COURT DECISIONThe Securities and Exchange Commission said that it would ask a court to allow four months for investors and their brokers to respond in light of a court decision affecting an estimated 1 million fee-based brokerage accounts.

A new nationwide research study on family businesses commissioned by Seattle-based Laird Norton Co., a diversified financial concern, shows that overwhelming optimism of the owners of family businesses about their future might prove to be premature because of a lack of strategic vision, succession planning and governance policies.The survey showed that nearly 60 percent of majority shareowners in family businesses are 55 or older, while 30 percent are 65 or older. However, less than 30 percent of those respondents even have succession plans in place, and fewer than 40 percent have a successor lined up.

A bill before the Connecticut State Senate would give its state comptroller the legal authority to establish generally accepted accounting principles for the state's financials, thereby sidestepping the Governmental Accounting Standards Board - the standard-setter for governments and municipalities.Proponents said that GASB's accounting rules make it hard to achieve a balanced budget, which Connecticut requires.

Pension fund disclosures will soon look more like those of other post-employment benefits under a new statement issued by the Governmental Accounting Standards Board.Statement 50, Pension Disclosures, amends Statement 25, on reporting on defined-benefit pension plans, and Statement 27, on accounting for pensions by governmental employers. The amendments make disclosures under those two statements consistent with the requirements of Statements 43, on reporting OPEB, and 45, on reporting on OPEB by governmental employers.

Connecticut Governor Jodi Rell vetoed a bill passed by the state legislature that would have allowed Connecticut to set its own accounting standards to balance the budget.

Here’s something that may be of interest to you.As you know, there are all sorts of lists out there ranging from Accounting Today’s most influential people in accounting to Practical Accountant’s regional survey of accounting firms to CPA Wealth Provider’s financial planning annual awards of excellence.

I have always found regional accounting firms fascinating. Just take three recent developments regarding the regional firm of Virchow, Krause & Company. One was that Wells Fargo Insurance Services of Minnesota, a subsidiary of Wells Fargo & Company, acquired Virchow, Krause & Company's Twin Cities employee benefits operations, including the head of the employee benefits practice in Minneapolis and his team. It is a good example of how regional firms view these very specialized practice areas. The acquire them and spin them off reminding me of many businesses that view the acquisition and the selling of a portion of their business as a regular means for increasing profitability.

Two interesting pieces of information have popped up by two highly reputable sources, one dealing with tips on choosing a financial planner and the other showing survey results of the five most frequent mistakes made when selecting such an advisor.

Broker/dealer H.D. Vest Financial Services said that its assets under management in advisory accounts recently passed the $5 billion mark. The company said that figure helped propel its total assets under management to roughly $25 billion. The company began offering advisory solutions in 1987, and currently supports over 1,900 independent advisory consultants in its system of 5,500 advisors.

After collating some 80 comment letters on valuation guidance for financial reporting, the Financial Accounting Standards Board unveiled plans to form a resource group on the subject. Specifically, the cadre will provide the standard-setter with input on potential clarifying guidance on issues relating to the application FASB Statement No. 157 on Fair Value Measurements. FASB said the composition of the group will comprise of a cross section of constituents and added that its initial meeting will be sometime during the third quarter of 2007.

Many of my friends are already retired, whether they have money or not. And, I keep hearing all the time the same question: When will I pack it in? After all, I’ve been at this for the past 45 years and you know something, I still love it. I may be one of the few people who on a Sunday night has trouble sleeping because I can’t wait to get to the office Monday morning.

The Internal Revenue Service is expanding an outreach effort to ensure that public schools throughout the United States are complying with the universal availability requirement for retirement annuities they may offer.Some schools and school districts may be overlooking offering employees the opportunity to participate in these retirement plans. To assess the level of compliance, the IRS's Employee Plans Compliance Unit has started sending questionnaires to public school districts in all 50 states under the 403(b) Universal Availability project. A 403(b) plan is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. "Our pilot project in three states showed fairly widespread noncompliance by schools with the universal availability requirement for 403(b) plans," said Joseph Grant, director of the IRS Employee Plans Division. "But we believe most of it was due to a lack of understanding about what the law requires, not a deliberate failure to comply." "We know from our pilot project and from talking to representatives from schools and districts across the country that most of the problems stem from either misunderstanding the law or from confusion because of differing rules in various states," said Grant. "The project will give schools the chance to identify problems with their plans and to correct them on their own."