I just attended a webinar for Comps and Reviews. Long on Comps, very short on reviews but still worth the money. All seminar / webinars are deadly dull and this one was no different although less painful than others I've attended.
An interesting point was brought up regarding the fact that the AICPA is supposedly there to "protect the interests" of CPAs. However, they cater to the large firms and seem complicit in the move to eradicate the small practitioner. I feel the fact is that the IRS and the FASB (with the aid of the AICPA) are actively working to push the small practitioner out of business. The speaker pointed out that the small practitioner has no voice, and he is right.
Why? Several reasons come to mind - large firms have the large lobby (AICPA) to push FASB and the congressionally controlled IRS into creating more and more requirements and regulations and standards that make compliance heinously difficult for smaller CPA firms and especially sole practioners. They use their power to eradicate competitors. There are a few very large firms and many small firms.
The speaker also pointed out that there was some talk of "Big GAAP" vs. "Small GAAP". Big GAAP would apply to very large and publically owned companies and Small GAAP would apply to small and privately owned companies. FASB doesn't like the idea and wants the smallest company to be subjected to the same reporting rules for attest (audit) engagements as the largest publically traded entity.
This is a shame. Small businesses are the economic engine that drive our economy. They all need good solid financial reporting at some level - compilation, review, audit. I think banks are going to be demanding higher level financial statements more frequently in order to approve lending. Some small business are going to need loans just to afford the services from the large auditing firms.
We have seen the effects of large companies paying huge fees to large CPA firms - collusion and shoddy work. It isn't that a small practitioner cannot do excellent work, it is that they perform for a lower fee. It's all about the money, and consolidating an entire engagement industry (attestation) into the hands of a very few has resulted in nothing except higher fees from lack of competitiion and lower integrity of financial reporting.
Through SSARS 19, changes have been made to the preparation and perception of reviews. Reviews are now considered to offer "limited assurance". New requirements for "evidence gathering", new requirements for analysis, and of course those annoying changes to required wording that forces all preparers to change engagement letters, management rep letters, etc. Very time consuming for the sole practitioner. Very ineffective for anything else except to make it harder for a small practitioner to comply. Changes have been made to peer reviews. The result? Push the small practitioner out of reviews in the same manner as has worked in pushing them out of performing audits. In fact, just get rid of us entirely.
If you are a CPA and perform compilations - including "Management Use Only" - you are required to undergo a peer review every 3 years. Do I "learn" anything from the peer review? No. Sometimes I find out that I've mis-worded some sort of note, but otherwise it's just all about paying the fees and climbing over the barrier so that I can perform engagements for clients who need my services at a price they can afford. And, I'm not underpriced. But, I sure don't charge like a large firm.
The PTIN registration and other barriers are not to improve the tax profession. That is a "straw man" argument. Nothing is going to turn a bad preparer into a good preparer - PTIN registrations, tests, regulations, FASB, required CPE, peer reviews - none of these things force a bad preparer to become a good preparer. None of these things force or even encourage a bad preparer to choose a different line of work. If they are incompetent at what they are doing, they are probably not competent to do anything else that pays as well.
This constant barrage of more fees, more regs, more rules, more requirements is going to push good preparers who want very much to comply to start figuring out that the cost / benefit isn't there anymore.
I used to write technical manuals for the aerospace manufacturing industry and it paid well. I've always thought teaching college accounting or writing classes would be fun.
Thanks for listening.
An interesting point was brought up regarding the fact that the AICPA is supposedly there to "protect the interests" of CPAs. However, they cater to the large firms and seem complicit in the move to eradicate the small practitioner. I feel the fact is that the IRS and the FASB (with the aid of the AICPA) are actively working to push the small practitioner out of business. The speaker pointed out that the small practitioner has no voice, and he is right.
Why? Several reasons come to mind - large firms have the large lobby (AICPA) to push FASB and the congressionally controlled IRS into creating more and more requirements and regulations and standards that make compliance heinously difficult for smaller CPA firms and especially sole practioners. They use their power to eradicate competitors. There are a few very large firms and many small firms.
The speaker also pointed out that there was some talk of "Big GAAP" vs. "Small GAAP". Big GAAP would apply to very large and publically owned companies and Small GAAP would apply to small and privately owned companies. FASB doesn't like the idea and wants the smallest company to be subjected to the same reporting rules for attest (audit) engagements as the largest publically traded entity.
This is a shame. Small businesses are the economic engine that drive our economy. They all need good solid financial reporting at some level - compilation, review, audit. I think banks are going to be demanding higher level financial statements more frequently in order to approve lending. Some small business are going to need loans just to afford the services from the large auditing firms.
We have seen the effects of large companies paying huge fees to large CPA firms - collusion and shoddy work. It isn't that a small practitioner cannot do excellent work, it is that they perform for a lower fee. It's all about the money, and consolidating an entire engagement industry (attestation) into the hands of a very few has resulted in nothing except higher fees from lack of competitiion and lower integrity of financial reporting.
Through SSARS 19, changes have been made to the preparation and perception of reviews. Reviews are now considered to offer "limited assurance". New requirements for "evidence gathering", new requirements for analysis, and of course those annoying changes to required wording that forces all preparers to change engagement letters, management rep letters, etc. Very time consuming for the sole practitioner. Very ineffective for anything else except to make it harder for a small practitioner to comply. Changes have been made to peer reviews. The result? Push the small practitioner out of reviews in the same manner as has worked in pushing them out of performing audits. In fact, just get rid of us entirely.
If you are a CPA and perform compilations - including "Management Use Only" - you are required to undergo a peer review every 3 years. Do I "learn" anything from the peer review? No. Sometimes I find out that I've mis-worded some sort of note, but otherwise it's just all about paying the fees and climbing over the barrier so that I can perform engagements for clients who need my services at a price they can afford. And, I'm not underpriced. But, I sure don't charge like a large firm.
The PTIN registration and other barriers are not to improve the tax profession. That is a "straw man" argument. Nothing is going to turn a bad preparer into a good preparer - PTIN registrations, tests, regulations, FASB, required CPE, peer reviews - none of these things force a bad preparer to become a good preparer. None of these things force or even encourage a bad preparer to choose a different line of work. If they are incompetent at what they are doing, they are probably not competent to do anything else that pays as well.
This constant barrage of more fees, more regs, more rules, more requirements is going to push good preparers who want very much to comply to start figuring out that the cost / benefit isn't there anymore.
I used to write technical manuals for the aerospace manufacturing industry and it paid well. I've always thought teaching college accounting or writing classes would be fun.
Thanks for listening.
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