Accounting
Letters to the Editor: A pipeline problem solution, and more
Accounting Today’s readers often weigh in on our articles; some of their ideas and comments are below.
A proposal for accounting’s pipeline problem
I enjoyed your
As you know, the cost of college has gone up much faster than the cost of living. There are a number of reasons for that, but the reasons are really irrelevant for purposes of finding a solution to the CPA shortage problem.
Fewer people are becoming CPAs because they do a cost-benefit analysis. They know that they have other options. At least half of the courses students have to take to get a college degree are irrelevant for purposes of preparing for the CPA exam, and many of the liberal arts courses offered these days are more indoctrination than education at some universities.
Students only need about 15 classes to prepare for the CPA exam. That’s 45 semester hours. If the 150-semester-hour requirement were abandoned, they would be able to save 70% [(150-45)/150 = 70%] on their college education. And of course, we cannot forget the opportunity cost savings. Since they could enter the job market two or three years sooner, their lifetime earnings would increase by $100,000 or more.
University professors and administrators would scream at the thought, but so what? Students who want to earn a college degree would still be able to earn a college degree, but they would not have to. They would have a choice.
Technical (and business) certifications have proliferated in recent years. They serve a useful purpose. Students should not be forced to take English literature, poetry, biology, history or political science courses to qualify to sit for the CPA exam. If they have accumulated the knowledge they need to pass the CPA exam, it should not matter how they acquired the knowledge, or whether they have a college degree that is 50-75% irrelevant. Standards would not be adversely affected by abolishing the 150-hour requirement because the exam would remain the same. With more people entering the profession, competition would increase, which would be good both for the profession and for the general public.
Requiring 120-150 semester hours of college credit to sit for the CPA exam also has a disparate impact on poor and minority students, since they are the ones who can least afford a college degree. Abolishing the education requirement would be a big boost for them and would reduce the income inequality gap that now exists among the races.
— Prof. Robert W. McGee
Broadwell College of Business and Economics, Fayetteville State University
Is accounting’s sun setting or rising?
In response to an editorial asking if
There has been a shortage of doctors for years. The answer has become to allow “nurse practitioners.” If there aren’t enough CPAs, non-CPA accountants will be allowed to do certified audits.
Also, technology has changed all of the professions, not just CPAs. Doctors, lawyers and engineers are affected. Technology has allowed doctors to be more efficient and has taken away a lot of procedures that used to be done manually.
The Big Four are the leaders and had better wake up. CPAs require better pay to attract new professionals.
— Ronald Dearman, CPA
Treasurer/controller, Freedom Trucks LLC
Markets are made by supply and demand. The demand side of the profession is as strong as it’s ever been and I believe it will only get stronger. The supply side of the equation is where all the challenges are.
It is undeniable that interest in making a career in the profession is problematically impaired. The only way out is business model transformation to make a career in accounting a dream job again, so that people have the trusted advisors they need.
We think the ingredients for that are corporate governance, strong leadership, ambitious and well-resourced strategies, growth capital, innovative technology, effective outsourcing and modern currencies for rewarding your people. If you do not have these, I think your sun is setting. If you do, the future is very bright.
—David Wurtzbacher
Founder and CEO, Ascend
What unites accountants?
I’m responding to
- A desire to help others. Whether in public accounting, public companies or in private firms, advisors seem motivated by serving others. To know that they have helped an entrepreneur, a family, or an organization brings meaning and purpose to their lives. I have found this by asking — a lot — why do you do this work? (I’m not an accountant, but have lived in a CPA firm most of my life, and I wonder … .)
- More specifically, that “service” takes the shape of supporting decisions — whether clarifying information or evaluating options, they are often trying to help a business, business owner, or client with the decisions they are trying to make. I sometimes joke that we are “DSOs” — Decision Support Officers — for the companies we serve. Some of that is financial-related, but a lot of the support is for decisions that have very little to do with finances, and a lot to do with strategy, customers, family members, etc.
- In addition to supporting decisions, my other observation is that what leaders are looking for, and what advisors (by whatever name) provide, is certitude. To help understand what happened, to forecast what will happen, to make recommendations about what could happen — all of that is united by a goal of providing an element of certainty into the planning, evaluation, and decision-making process.
One other thing I think a lot about is the accounting-related advisor as the “most trusted” advisor. So many issues surround the financial aspects of business and personal lives, it puts the advisor with ties to accounting in a very important and trusted position. Many times, the root issues of a decision are not financial, but money is where the issues “show up.”
Whether it is friendship, fellowship, or feedback, advisors in the accounting industry help the people they work with feel a lot less lonely!
— Lance Woodbury
Principal, Pinion
The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
By streamlining tasks such as risk assessment, control testing, and reporting, gen AI has the potential to increase efficiency across the entire SOX lifecycle.
House passes tax administration bills
Trump tariffs’ effect on consumer prices debated by economists
In the blogs: Many hats
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
The Essential Practice of Bank and Credit Card Statement Reconciliation
Are American progressives making themselves sad?
-
Economics5 days agoPCE inflation February 2025:
-
Personal Finance6 days agoStudent loans could be managed by the Small Business Administration
-
Economics6 days agoWhite House denials over the Signal snafu ring hollow
-
Economics5 days agoYoung Americans are losing confidence in economy, and it shows online
-
Personal Finance6 days agoMillions of student loan borrowers past-due after bills restarted: Fed
-
Economics4 days agoConsumer sentiment worsens as inflation fears grow, University of Michigan survey shows
-
Accounting4 days agoIRS sets new initiative with banks to uncover fraud
-
Personal Finance1 week agoTreasury scraps reporting rule for U.S. small business owners