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Let’s make accounting great again

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In recent years, there’s been growing concern about the future of accounting. Discussions around AI replacing accountants, overworked staff and the ongoing talent shortage have all contributed to a less-than-ideal perception of the profession.

But I believe in the future of accounting, and I also believe that it’s up to us, as accountants, to make it great again.

The question is: Where do we begin? The first and most important thing is to start sharing the amazing opportunities that this career has to offer. 

Because, after all, accounting is more than just numbers. 

Accounting builds a foundation for flexibility and success

Far too often, accountants get put into a box, and people assume this is a single-path career. But that is far from reality. 

In fact, some of the most recognizable and successful names in business, like Arthur Blank (Home Depot), Phil Knight (Nike) and John D. Rockefeller, all began their careers as accountants. 

Today, they are among the most respected business leaders in the world.

Undoubtedly, their accounting skills helped pave the way for their success. 

After all, accounting is more than just number crunching — it’s understanding the language of business. As you pursue an accounting degree, you develop skills and expertise that open the door to a wide range of career opportunities, many of which can be quite lucrative. 

We need to start sharing how:

  • Accounting teaches valuable skills, such as financial literacy, attention to detail and problem-solving. These are in-demand skills that are crucial for any career.
  • Accounting equips you with the tools and knowledge you need to succeed, whether you want to continue working as a public accountant, transition to an executive role or launch your own business. Your ability to develop creative solutions to tough problems and your meticulous nature will serve you well in any field or in the pursuit of your own entrepreneurial venture.
  • Accounting can serve as an entrepreneurial springboard, allowing you to pivot into a variety of industries or launch your own operation. After all, accounting helps you understand some of the most important financial aspects of running a business, like cash flow and managing finances, to drive business growth. An estimated 82% of businesses fail because of cash flow problems, so your accounting skills will give you a significant advantage.
  • Accounting pays well. I just read a post from Dave Ramsey on the top careers of millionaires. Accountant (CPA) ranked number two on this list. Yet, we don’t see many people talking about this. 

Even if your goal is to stay in public accounting, it’s important to remember that large firms aren’t the only path to a successful career. There are countless other firms that offer the work-life balance you crave. At my firm, for example, we encourage our team to take vacations, pursue hobbies and achieve personal goals.

And as technology continues to evolve, more firms will offer a better work-life balance as mundane tasks become automated. 

Accounting can open the door to so many opportunities, but as an industry, we have a serious messaging problem when it comes to the future of our profession. 

Contrary to what you’ve heard, accounting is not extinct

It’s a common misconception that accounting is becoming obsolete. Yes, there’s a talent shortage. Yes, technology is rapidly evolving. But neither of these things will render the accounting profession obsolete.

The reality is that demand for accountants is on the rise, and as the profession continues to evolve, demand will continue to rise.

Let’s put a few things into perspective.

  • Many accountants are approaching retirement age. While this contributes to the talent shortage, it also creates massive opportunities for anyone entering this profession right now. Projections show that the accounting profession could have a deficit of over 3.5 million accountants by 2025.
  • Technology is rapidly evolving, but it’s not replacing accountants. Technology is helping accountants pivot their focus to more meaningful and rewarding work. Successful firms are leveraging technology to elevate the value they provide to their clients. Only 8% of firms are using AI right now, and they are using it primarily to streamline mundane tasks — nothing more.

Far too many would-be accountants are being turned away from this career path because they believe it’s on the path to extinction. But a shift in perspective allows you to see the true potential of this career and the wealth of opportunities it provides.

So, where do we go from here?

To make accounting great again, we must come together as professionals and spread the word about the vast opportunities that accounting offers. Whether you prefer to stay in public accounting or use your knowledge to springboard into new industries, there are so many pathways to build the life you want and dream of with an accounting degree.

But how do we spread the word and shift the perspective on the future of accounting?

  • We must become a voice for the future and promote the great things that can come from this profession — both online and offline.
  • We must shed light on the firms that are doing incredible things for those who want to stay in this profession. Yes, there are still firms that have toxic work cultures, but not all firms are like this. Those that offer great work-life balance can help attract more professionals to this field.
  • We must remind aspiring accountants that there are other avenues they can explore outside of accounting, including the entrepreneurial route. 

As accounting professionals, we have a responsibility to shift the message and show aspiring accountants that this career path offers virtually unlimited growth in almost any field you can imagine.

The future of accounting is bright

The accounting profession is far from extinction. In fact, it’s an industry that offers flexibility and limitless opportunities, whether you want to become a partner at a firm, pivot into a new industry or even start your own business. The knowledge and skills you gain as an accountant will equip you with the tools you need to succeed wherever life takes you.

Let’s make accounting great again by embracing its true potential and sharing it with others. I am committed to this goal, and I hope you’ll join me.

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Accounting

Tax Fraud Blotter: Partners in crime

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Captive audience; some disagreement; game of 21; and other highlights of recent tax cases.

Barrington, Illinois: Tax preparer Gary Sandiego has been sentenced to 16 months in prison for preparing and filing false returns for clients. 

He owned and operated the tax prep business G. Sandiego and Associates and for 2014 through 2017 prepared and filed false income tax returns for clients. Instead of relying on information provided by the clients, Sandiego either inflated or entirely fabricated expenses to falsely claim residential energy credits and employment-related expense deductions.

Sandiego, who previously pleaded guilty, caused a tax loss to the IRS of some $4,586,154. 

He was also ordered to serve a year of supervised release and pay $2,910,442 in restitution to the IRS.

Ft. Worth, Texas: A federal district court has entered permanent injunctions against CPA Charles Dombek and The Optimal Financial Group LLC, barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies.

The injunctions also prohibit Dombek from preparing any federal returns for anyone other than himself and Optimal from preparing certain federal returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

According to the complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a scheme throughout the U.S. to illegally reduce clients’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or improperly claim personal expenses as business deductions. As alleged by the government, Dombek also promoted himself as the “premier dental CPA” in America.

The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed clients’ returns reflecting the sham transactions, expenses and deductions.

The government contended that the total harm to the Treasury could be $10 million or more.

Kansas City, Missouri: Former IRS employee Sandra D. Mondaine, of Grandview, Missouri, has pleaded guilty to preparing returns that illegally claimed more than $200,000 in refunds for clients.

Mondaine previously worked for the IRS as a contact representative before retiring. She admitted that she prepared federal income tax returns for clients that contained false and fraudulent claims; the indictment charged her with helping at least 11 individuals file at least 39 false and fraudulent income tax returns for 2019 through 2021. Mondaine was able to manufacture substantial refunds for her clients that they would not have been entitled to if the returns had been accurately prepared. She charged clients either a fixed dollar amount or a percentage of the refund or both.

The tax loss associated with those false returns is some $237,329, though the parties disagree on the total.

Mondaine must pay restitution to the IRS and consents to a permanent injunction in a separate civil action, under which she will be permanently enjoined from preparing, assisting in, directing or supervising the preparation or filing of federal returns for any person or entity other than herself. She is also subject to up to three years in prison.

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Los Angeles: Long-time lawyer Milton C. Grimes has pleaded guilty to evading more than $4 million in federal taxes over 21 years.

Grimes pleaded guilty to one count of tax evasion relating to his 2014 taxes, admitting that he failed to pay $1,690,922 to the IRS. He did not pay federal income taxes for 23 years — 2002 through 2005, 2007, 2009 through 2011, and 2014 through 2023 — a total of $4,071,215 owed to the IRS. Grimes also admitted he did not file a 2013 federal return.

From at least September 2011, the IRS issued more than 30 levies on his personal bank accounts. From at least May 2014 to April 2020, Grimes evaded payment of the outstanding income tax by not depositing income he earned from his clients into those accounts. Instead, he bought some 238 cashier’s checks totaling $16 million to keep the money out of the reach of the IRS, withdrawing cash from his client trust account, his interest on lawyers’ trust accounts and his law firm’s bank account.

Sentencing is Feb. 11. Grimes faces up to five years in federal prison, though prosecutors have agreed to seek no more than 22 months.

Sacramento, California: Residents Dominic Davis and Sharitia Wright have pleaded guilty to conspiracy to file false claims with the IRS.

Between March 2019 and April 2022, they caused at least nine fraudulent income tax returns to be filed with the IRS claiming more than $2 million in refunds. The returns were filed in the names of Davis, Wright and family members and listed wages that the taxpayers had not earned and often listed the taxpayers’ employer as one of the various LLCs created by Davis, Wright and their family members. Many of the returns also falsely claimed charitable contributions.

Davis prepared and filed the false returns; Wright provided him information and contacted the IRS to check on the status of the refunds claimed.

Davis and Wright agreed to pay restitution. Sentencing is Feb. 3, when each faces up to 10 years in prison and a $250,000 fine.

St. Louis: Tax attorneys Michael Elliott Kohn and Catherine Elizabeth Chollet and insurance agent David Shane Simmons have been sentenced to prison for conspiring to defraud the U.S. and helping clients file false returns based on their promotion and operation of a fraudulent tax shelter.

Kohn was sentenced to seven years in prison and Chollet to four years. Simmons was sentenced to five years in prison.

From 2011 to November 2022, Kohn and Chollet, both of St. Louis, and Simmons, who is based out of Jefferson, North Carolina, promoted, marketed and sold to clients the Gain Elimination Plan, a fraudulent tax scheme. They designed the plan to conceal clients’ income from the IRS by inflating business expenses through fictitious royalties and management fees. These fictitious fees were paid, on paper, to a limited partnership largely owned by a charity. Kohn and Chollet fabricated the fees.

Kohn and Chollet advised clients that the plan’s limited partnership was required to obtain insurance on the life of the clients to cover the income allocated to the charitable organization. The death benefit was directly tied to the anticipated profitability of the clients’ businesses and how much of the clients’ taxable income was intended to be sheltered.

Simmons earned more than $2.3 million in commissions for selling the insurance policies, splitting the commissions with Kohn and Chollet. Kohn and Chollet received more than $1 million from Simmons.

Simmons also filed false personal returns that underreported his business income and inflated his business expenses, resulting in a tax loss of more than $480,000.

In total, the defendants caused a tax loss to the IRS of more than $22 million.

Each was also ordered to serve three years’ supervised release and to pay $22,515,615 in restitution to the United States.

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Accounting

On the move: KSM hired director of IT operations

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Hannis T. Bourgeois celebrates 100 years with charitable initiative; KPMG and Moss Adams release surveys; and more news from across the profession.

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Accounting

AICPA wary of new PCAOB firm metrics standard

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The American Institute of CPAs is still concerned about the Public Company Accounting Oversight Board’s new firm and engagement metrics standard, despite some modifications from the original proposal. 

During a board meeting Thursday, the PCAOB approved two new standards, on firm and engagement metrics, and firm reporting. Both would have significant implications for firms. 

Under the new rules, PCAOB-registered public accounting firms that audit one or more issuers that qualify as an accelerated filer or large accelerated filer will be required to publicly report specified metrics relating to such audits and their audit practices. The metrics cover the following eight areas:

  • Partner and manager involvement;
  • Workload;
  • Training hours for audit personnel;
  • Experience of audit personnel;
  • Industry experience;
  • Retention of audit personnel (firm-level only);
  • Allocation of audit hours; and,
  • Restatement history (firm-level only).

The AICPA reacted cautiously to the announcement. “We’re still studying the components of the final firm metrics requirements but, as we stated in our comment letter to the PCAOB this past summer, these rules will place a significant burden on small and midsized audit firms and could lead some to exit public company auditing altogether,” said the AICPA in a statement emailed Friday to Accounting Today. “This is not just conjecture: a majority of respondents (51%) to a recent survey we did of Top 500 firms with audit practices said they would rethink engaging in public company audits if the requirements were approved.”

AICPA building in Durham, N.C.

The PCAOB it made some modifications to the original proposal in  response to the comments had received since April:

  • Reduced the metric areas to eight (from 11);
  • Refined the metrics to simplify and clarify the calculations;
  • Increased the ability to provide optional narrative disclosure (from 500 to 1,000 characters); and,
  • Updated the effective date. (If approved by the SEC, the earliest effective date of the firm-level metrics will be Oct. 1, 2027, with the first reporting as of September 30, 2028, and engagement-level metrics for the audits of companies with fiscal years beginning on or after Oct. 1, 2027.)

The AICPA welcomed those changes but doesn’t think they go far enough. “We’re glad the PCAOB took some comments to heart by extending implementation dates, particularly for smaller firms, and lowering the number of required metrics,” said the AICPA. “But the potential consequences of the remaining requirements — reduced competition and market diversity in the public audit space — are a significant risk. We hope the SEC will give these unintended outcomes the weight they deserve before giving final approval to the requirements.”

The Securities and Exchange Commission would still need to give final approval to the standard, as well as the new firm reporting standard. Last week, the PCAOB decided to pause work on its controversial NOCLAR standard, on noncompliance with laws and regulations, until next year. On Thursday, SEC chairman Gary Gensler announced he would be stepping down in January, which may affect the timing of its approval or disapproval by the SEC. With the incoming Trump administration, the SEC is expected to take a far less aggressive stance on enforcement and regulation. On Friday, the SEC announced that it filed 583 total enforcement actions in fiscal year 2024 while obtaining orders for $8.2 billion in financial remedies, the highest amount in SEC history.

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