I don’t talk much about my profession on this blog but sometimes, I feel like I need to. Over the last few days, some things have come up that brought to the forefront of my mind the whole public perception that all accountants are created equal. Well, they aren’t.
I had a conversation with another accountant a few weeks ago regarding his client, a partner in a partnership for which I prepare the return. It was clear to me that this accountant had no idea what to do with the K-1 that had been issued for his client. The majority partner in the partnership called me a couple of days ago, mainly in reference to this other accountant. He was surprised that the guy had no idea what to do with the K-1 and expressed the idea that he thought CPAs all had the same knowledge. I had to burst his bubble.
Then yesterday, there was a story about the Olde Huntersville Corporation. In it, they talked about the accounting of this now-defunct nonprofit:
Housing authority officials said her [Vicki Hubbard, Jennings’ daughter and a former board member and accountant for the corporation] accounting was a one-page listing of expenses. When they asked for supporting documents, such as canceled checks, their requests were ignored, they said.
Finally, I spent some time yesterday afternoon volunteering at a local nonprofit, helping them get their books in shape (an ongoing project, by the way). This particular entity has been through a number of bookkeepers, and audit fees are through the roof because the underlying accounting records are in such bad shape.
I know the public has no idea of the differences between bookkeepers, accountants and CPAs. The lines are often blurred when referring to them. With the exception of CPAs, anybody can call themselves an accountant in Virginia – no experience necessary.
That’s not to say that CPAs are necessarily better, either. What the CPA designation means is that the holder has managed to pass a test – one, that since I took it in 1986, has been watered down. Yes, we now have a 150-hour requirement (as opposed to the previous 120-hour requirement) to be eligible to sit for the exam, but I seriously doubt that has changed the level of expertise that newly-minted CPAs have. You see, a lot of what is now at the masters’ level in college was considered undergraduate courses when I went to school.
The bottom line is that in choosing a bookkeeeper, accountant or CPA, it is critical the selection is a careful one. And if you are not an accounting professional yourself, you’re going to have a hard time assessing the skills of someone who claims to be. Too often you find out the hard way that your choice lacks the knowledge and experience to perform the tasks.
VIVIAN J. PAIGE | All Politics is Local 
I do not mean to put down ALL my classmates, but the number of senior Accounting majors that lack basic understanding of concepts astounds me.
You see, a lot of what is now at the masters’ level in college was considered undergraduate courses when I went to school.”
It is difficult now for courses to delve into more complex problems and concepts in order to solidify a deep understanding because professors have had to begin catering to the struggling masses who either picked the wrong major or just don’t belong in college. Curricula has been made into a one-size fits-most program, so that even if an “accountant” excelled in their schooling and passed the CPA exam, they may lack the tools necessary to take care of your needs. So beware. Look for experience, ask questions early on, and don’t be fooled by the glamour of a green visor…
How true. I have often said that accounting is the only profession that I am aware of in which the textbook and real life are so far apart. The AICPA recognizes this and says that passing the CPA exam just indicates basic knowledge, and that experience is really required.
I’ll never forget how confused I was in my undergraduate auditing class, when the professor kept saying over and over that certain things were based on “professional judgment.” We all kept questioning what “professional judgment” was but it wasn’t until I actually starting performing audits that I learned what he was talking about.
Oh – and remember “T” accounts? I had a friend who passed the CPA exam the first time (back in the days when it was more complete and passing the first time was a really big deal) and I had to explain accounting to him using T accounts.
Gah, Vivian! I had to do T accounts when I took Accounting 211, 212 and 301. My professors were all pretty serious, but those classes were required for all business students, regardless of major, so I guess they were slanted a little more towards practical than theoretical.
I didn’t like accounting, so I stopped with 301, and can’t comment on textbooks versus reality. My 301 professor, however, was completely obsessed with Enron, and seemed to take it almost personally. Every class, we had at least one example relating to poor accounting practices at Enron. Maybe that’s what is meant by ‘professional judgment,’ haha.
I was qualified to sit for the CPA exam, once.
That really bothers me.
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