For many years each month as editor-in-chief of Practical Accountant I decided on what would be the cover story. It wasn’t hard do but for one fact; we had to decide on the subject matter as much as a year and a half before the issue came out. The reason was the editorial calendar had to be in place in July of the preceding year and there was no guarantee that each month there would be a development affecting the accounting profession worthy of cover story coverage.
Because habits are hard to break I decided why not have some fun and pick out 12 possible 2011 cover story candidates now for a magazine for the accounting profession.
Tentative and Very Hypothetical 2011 Editorial Calendar
January--Plethora of Estate Tax Engagements
February--How CCH, RIA, Intuit, LexisNexis, and Others Are Utilizing CPA Firms as Business Partners
March--Reverse Mentoring: Overcoming a Firm Management’s Deep-Grained Aversion
April--Success Stories and Best Practices from Early Social Media Adopters
May--Increasing Revenue and Correctly Positioning a Firm During an Economic Downturn
June--CRM: What Firms and Clients Are Doing Wrong
July--Regionals Replacing Nationals as Auditors of Public Companies
August--Outsourcing Manufacturing and Distribution Functions
September--Walking the Cost-Cutting Walk: Fee Reductions on Modified Engagements Complement Advice
October--Tax Prep--Protecting Against Fee Erosion and Client Flight
November--The Practice Development Joint Ventures Art Form
December--Hidden Benefits of Firm Associations, State Societies, and Trade Groups
© 2010
*****************************************************************************
The above is from the tenth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.
Showing posts with label economic crisis. Show all posts
Showing posts with label economic crisis. Show all posts
Monday, April 26, 2010
Monday, March 15, 2010
Howard’s Inner Circle, No. 8: Big Four Shouldn’t Be “Too Big to Fail”
Early during the financial crisis, the phrase “too big to fail” received a lot of media play especially with regard to AIG. Similarly, a number of years ago following the demise of Andersen I got the distinct impression that the powers that be viewed the Big Four accounting firms also as “too big too fail,” probably a comfort to those Big Four firms. Rather than blaming the firm, the focus then became one of blaming individuals at the Big Four firms when certain undetected frauds and accounting irregularities came to light.
It will be very interesting to watch what happens regarding Ernst & Young, as the 2,200-page Lehman bankruptcy report by a court-appointed examiner puts E&Y in a very unfavorable light. Lawsuits can be expected but of more interest is what, if any, actions the PCAOB will take. Just as important is whether the PCAOB will publicly address the role that auditors played with regard to the financial crisis and what, if any, regulatory changes need to be made.
My belief is there has to be serious debate on whether the current way that auditors of public companies are employed should be changed. With the bulk of the audits being conducted by the Big Four and employment as an auditor subject to the decision of the executives of the company being audited, it should come as no surprise, auditors at the Big Four are very careful not to ruffle feathers.
In May of last year I urged the AICPA and CPAs to take the lead in closely reviewing and critically evaluating the way in which auditing of public companies is currently performed, beginning with the illusion of independence. See “Auditors: Doing the Right Thing?” at http://howardwolosky.blogspot.com/2009/05/auditors-doing-right-thing.html.
As long as the Big Four perform the overwhelming bulk of the audits of public companies, the marketplace and those firms are positioning those firms as too big to fail. That is great for those firms and their revenue especially if the government regulators are in agreement.
Unfortunately, as we saw with the financial crisis, those who were too big to fail actually profited greatly until the balloon burst and then they were bailed out with public dollars. Andersen wasn’t that lucky and I don’t believe that the any of the remaining Big Four should be.
As with those Wall Street firms, the Big Four has a special revenue-generating mindset. The problem is that this mindset has become quietly synonymous with the auditing of public companies and colors the auditing. The only way that this can be changed is if auditing public companies can be restructured so auditors are truly independent.
© 2010
*****************************************************************************
The above is from the eighth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.
It will be very interesting to watch what happens regarding Ernst & Young, as the 2,200-page Lehman bankruptcy report by a court-appointed examiner puts E&Y in a very unfavorable light. Lawsuits can be expected but of more interest is what, if any, actions the PCAOB will take. Just as important is whether the PCAOB will publicly address the role that auditors played with regard to the financial crisis and what, if any, regulatory changes need to be made.
My belief is there has to be serious debate on whether the current way that auditors of public companies are employed should be changed. With the bulk of the audits being conducted by the Big Four and employment as an auditor subject to the decision of the executives of the company being audited, it should come as no surprise, auditors at the Big Four are very careful not to ruffle feathers.
In May of last year I urged the AICPA and CPAs to take the lead in closely reviewing and critically evaluating the way in which auditing of public companies is currently performed, beginning with the illusion of independence. See “Auditors: Doing the Right Thing?” at http://howardwolosky.blogspot.com/2009/05/auditors-doing-right-thing.html.
As long as the Big Four perform the overwhelming bulk of the audits of public companies, the marketplace and those firms are positioning those firms as too big to fail. That is great for those firms and their revenue especially if the government regulators are in agreement.
Unfortunately, as we saw with the financial crisis, those who were too big to fail actually profited greatly until the balloon burst and then they were bailed out with public dollars. Andersen wasn’t that lucky and I don’t believe that the any of the remaining Big Four should be.
As with those Wall Street firms, the Big Four has a special revenue-generating mindset. The problem is that this mindset has become quietly synonymous with the auditing of public companies and colors the auditing. The only way that this can be changed is if auditing public companies can be restructured so auditors are truly independent.
© 2010
*****************************************************************************
The above is from the eighth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.
Wednesday, January 20, 2010
Howard’s Inner Circle, No. 6: As Revenue Sources Dry Up, Experiment
In New York City there is a plethora of unused offices and underutilized event spaces which is resulting in a great deal of creativity. As to the empty offices, they are being rented out in a temporary, as-needed basis. The address is usually a prime one such as Midtown. The interesting thing is what is being rented out. You get the use of an office in a suite of offices under a plan such as one that offers office space for 12 hours a month. There is a receptionist to answer the telephone and welcome visitors, Internet access, a telephone number, and the ability to rent out conference rooms by the hour. You share the suite with a multitude of businesses and individuals.
Companies, especially those with salespersons, are renting out these offices as a cheap, cost-efficient way to have suitable locations for their representatives to meet clients. Consultants also take advantage of these rentals. Building owners are very happy as the office space would otherwise remain vacant.
With regard to event places, rather then relying on corporate parties etc., the event place owners are working out deals with networking groups. The bulk of their revenue doesn’t come from rental and catering, but from what is earned by selling drinks to the attendees. The events usually occur at off times such as Monday, Tuesday, or Wednesday. I was recently at a free rooftop networking event with great views of the Empire State and the Chrysler buildings. The idea is if the networking group can get a couple hundred of attendees, it will be well worth it for the event place owners. I am sure many of those owners are trolling sites like Meetup.com which contains lists of these networking groups.
These techniques and many others are successful in these tough economic times because suppliers understand it’s no longer business as usual and creative marketing and advertising aren’t the keys. The idea is to minimize expenses for potential customers while still meeting their basic needs. This requires creativity and a willingness to question a business model that might have worked very successfully for many years.
© 2010
*****************************************************************************
The above is from the sixth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.
Companies, especially those with salespersons, are renting out these offices as a cheap, cost-efficient way to have suitable locations for their representatives to meet clients. Consultants also take advantage of these rentals. Building owners are very happy as the office space would otherwise remain vacant.
With regard to event places, rather then relying on corporate parties etc., the event place owners are working out deals with networking groups. The bulk of their revenue doesn’t come from rental and catering, but from what is earned by selling drinks to the attendees. The events usually occur at off times such as Monday, Tuesday, or Wednesday. I was recently at a free rooftop networking event with great views of the Empire State and the Chrysler buildings. The idea is if the networking group can get a couple hundred of attendees, it will be well worth it for the event place owners. I am sure many of those owners are trolling sites like Meetup.com which contains lists of these networking groups.
These techniques and many others are successful in these tough economic times because suppliers understand it’s no longer business as usual and creative marketing and advertising aren’t the keys. The idea is to minimize expenses for potential customers while still meeting their basic needs. This requires creativity and a willingness to question a business model that might have worked very successfully for many years.
© 2010
*****************************************************************************
The above is from the sixth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.
Wednesday, October 7, 2009
Might Seem Counterintuitive, But It’s Not
Yes magazines are closing down right and left, but here’s an idea for a new one. The working title is “The Unemployed.” The working tagline is “Harnessing Their Untapped Power and Wealth”
It will explore and publicize what an untapped and extremely valuable resource the unemployed are. Rather than defining someone’s worth, “being currently unemployed” could be shown as equivalent to a respected profession at which you can work at becoming better at.
Contributing reporters, copy editors, artwork submitters, and technical support would generally be those who are unemployed. There would be included extensive bios on these individuals. Each issue would have three or four features, departments, and commentaries.
Here are three possible features for the first issue:
“Tales of Charitable Giving” detailing individuals who increase their charitable efforts. E.J., who while searching for his next career opportunity, is delivering Meals On Wheels to the elderly; helping out at Cancer Action, and leading a weekly walking group of seniors.
“Seller’s Guide to Selling Gold” explains that most gold is purchased to be melted down so gem worth isn’t generally considered and offers vary greatly, easily as much as 75% to 100%. When selling, it advises to check with a number of vendors and ask that offer stay open for a stated period of time. It points out items should be grouped and weighted together by their carat type to get best value and applicable state law should be checked.
“Overcoming the Stigmas: Yours and Theirs” deals with the psychological and stereotypical aspects of unemployment from the viewpoints of the unemployed, family friends, former colleagues, etc. There would be a number of personal experience boxes where individuals such as Warren Buffet, Bill Gates, and an out-of- work 58 year old former steelworker describe how they or people they love dealt and deal with unemployment.
Departments could feature reporting on state programs that allow employers to combine reduced work hours for employees with partial unemployment benefits and how industries are combating unemployment such as contractors, landscapers and interior decorators turning to staging and rehabilitation of personal residences. There would be a books to consider section showcasing such books as “No More Mondays: Fire Yourself-and Other Revolutionary Ways to Discover your True Calling At Work” by Dan Miller
The magazine would be print and online and be a paid subscription model with a code of responsibilities and conduct for subscribers, advertisers, and contributors. The annual subscription rate would be from $10 to $250 as determined by the subscriber with a deferral, if desired, by those currently unemployed.
For the purpose of transparency and full disclosure, I am suggesting this publication in part so that I would be considered for the position of editor-in-chief. I was previously editor-in-chief of Practical Accountant, and what particularly qualifies me for consideration was my last column there, which in a sense of poetic justice, was automatically published on the day after I was told it was my last day.
Excerpted Text of WebCPA column
“’New’ Alternatives to Layoffs
(January 13, 2009)
“In these tough economic times, as in others, there are many news items on companies declaring bankruptcies and announcing substantial staff cuts. What is different this time is that I am also reading about a number of cost-cutting strategies that are gaining in popularity and aimed at reducing expenses without disrupting business operations or laying off staff.
“Fortune 500 companies, as well as smaller ones, have stopped their employer matching of employee 401(k) contributions. Factories are being closed down for a specified period of time with the unpaid furloughing of employees. Unpaid holidays are being given. Then there are those businesses that indicated there will be no salary increases in 2009. And I just came across a report that one of the largest accounting firms in Israel is reported to have made across-the-board pay cuts of 5 to 10 percent, except for certain lower-paid staff. We are also seeing the introduction of four-day weeks.
*******
“These creative cost-cutting strategies indicate the economic downturn is impacting more, and they also reflect an expectation that it will continue for some time. On the plus side, in general, they also indicate that companies are developing an arsenal of intermediate moves short of layoffs or a declaration of bankruptcy.
“This aversion to staff reductions can be attributed to a number of factors, including that often operations would be impaired if cuts were made, skilled employees are difficult to replace, and once the economic times get better the company doesn’t want to be understaffed.
“Interestingly, there seems to be understanding and acceptance by many in the workforce who are affected by the end of employer 401(k) contributions, unpaid leaves, etc. It appears to be based on the belief that, ’At least I have my job.’
*******
It will explore and publicize what an untapped and extremely valuable resource the unemployed are. Rather than defining someone’s worth, “being currently unemployed” could be shown as equivalent to a respected profession at which you can work at becoming better at.
Contributing reporters, copy editors, artwork submitters, and technical support would generally be those who are unemployed. There would be included extensive bios on these individuals. Each issue would have three or four features, departments, and commentaries.
Here are three possible features for the first issue:
“Tales of Charitable Giving” detailing individuals who increase their charitable efforts. E.J., who while searching for his next career opportunity, is delivering Meals On Wheels to the elderly; helping out at Cancer Action, and leading a weekly walking group of seniors.
“Seller’s Guide to Selling Gold” explains that most gold is purchased to be melted down so gem worth isn’t generally considered and offers vary greatly, easily as much as 75% to 100%. When selling, it advises to check with a number of vendors and ask that offer stay open for a stated period of time. It points out items should be grouped and weighted together by their carat type to get best value and applicable state law should be checked.
“Overcoming the Stigmas: Yours and Theirs” deals with the psychological and stereotypical aspects of unemployment from the viewpoints of the unemployed, family friends, former colleagues, etc. There would be a number of personal experience boxes where individuals such as Warren Buffet, Bill Gates, and an out-of- work 58 year old former steelworker describe how they or people they love dealt and deal with unemployment.
Departments could feature reporting on state programs that allow employers to combine reduced work hours for employees with partial unemployment benefits and how industries are combating unemployment such as contractors, landscapers and interior decorators turning to staging and rehabilitation of personal residences. There would be a books to consider section showcasing such books as “No More Mondays: Fire Yourself-and Other Revolutionary Ways to Discover your True Calling At Work” by Dan Miller
The magazine would be print and online and be a paid subscription model with a code of responsibilities and conduct for subscribers, advertisers, and contributors. The annual subscription rate would be from $10 to $250 as determined by the subscriber with a deferral, if desired, by those currently unemployed.
For the purpose of transparency and full disclosure, I am suggesting this publication in part so that I would be considered for the position of editor-in-chief. I was previously editor-in-chief of Practical Accountant, and what particularly qualifies me for consideration was my last column there, which in a sense of poetic justice, was automatically published on the day after I was told it was my last day.
Excerpted Text of WebCPA column
“’New’ Alternatives to Layoffs
(January 13, 2009)
“In these tough economic times, as in others, there are many news items on companies declaring bankruptcies and announcing substantial staff cuts. What is different this time is that I am also reading about a number of cost-cutting strategies that are gaining in popularity and aimed at reducing expenses without disrupting business operations or laying off staff.
“Fortune 500 companies, as well as smaller ones, have stopped their employer matching of employee 401(k) contributions. Factories are being closed down for a specified period of time with the unpaid furloughing of employees. Unpaid holidays are being given. Then there are those businesses that indicated there will be no salary increases in 2009. And I just came across a report that one of the largest accounting firms in Israel is reported to have made across-the-board pay cuts of 5 to 10 percent, except for certain lower-paid staff. We are also seeing the introduction of four-day weeks.
*******
“These creative cost-cutting strategies indicate the economic downturn is impacting more, and they also reflect an expectation that it will continue for some time. On the plus side, in general, they also indicate that companies are developing an arsenal of intermediate moves short of layoffs or a declaration of bankruptcy.
“This aversion to staff reductions can be attributed to a number of factors, including that often operations would be impaired if cuts were made, skilled employees are difficult to replace, and once the economic times get better the company doesn’t want to be understaffed.
“Interestingly, there seems to be understanding and acceptance by many in the workforce who are affected by the end of employer 401(k) contributions, unpaid leaves, etc. It appears to be based on the belief that, ’At least I have my job.’
*******
Subscribe to:
Posts (Atom)
