Thursday, November 26, 2009

Who Needs Orientation Training?

Arriving for my first day of work on my first job in public accounting a partner took me to a client’s office to begin an audit. After seating me in the conference room, he stacked several large journals and ledgers and many bank statements on the table in front of me. As he left for another appointment he told me to prepare a “proof of cash” while he was gone. Not remembering that term from college Audit 101, I began to search the client records trying to find a proof of cash! When the partner returned several hours later I was still searching!

My first on-the-job experience, like those of many staff assistants, wasted valuable time (not to mention it made me feel like a dummy!). With no training to familiarize new hires with firm philosophies, engagement strategies and various software applications, considerable time is wasted on engagements.

You’ve probably heard the arguments. Our firm is too small for orientation training. We don’t have time to create a formal program. We can’t bill the training time…and so on. It’s true. Time is money for a CPA firm and orientation training isn’t billable. It’s a costly decision to buy into three or four days of unbillable time charges for each new staff person. The important question is, however, “What does it cost not to provide orientation training?

Time spent orienting staff assistants during engagement performance not only increases engagement time for learning firm polices and practice aids, it usually results in more mistakes by new staff persons that, in turn, require more supervision and review time to fix. While some of this learning will be memorable for staff persons, it usually will be engagement specific and probably won’t address the foundational issues that should be included orientation training. In short, the lack of orientation training costs a lot, for a long time!
Many state societies of CPAs and other publishers sell orientation training packages which can be tailored to meet a firm’s specific needs. The cost of these materials and the time to train new hires is small when compared to the costs of not providing this important training. Tell us about your firm’s approach to orientation training.

Friday, November 20, 2009

The Synergism of the Staff Training Mix--Power!

A CPA firm’s staff training goal should be to improve the performance of its personnel to increase engagement and firm profitability. Someone said it this way, “We’ve got to spend money to make money.” I like to say it my way, “We’ve got to spend money THE RIGHT WAY to make money.” Here are four of those right ways:


  • Practically designed orientation training.
  • Regular in-firm group training.
  • Out-of-house CPE.
  • On-the-job training.

To get the most out of our training investments we must remember that staff training and development is a process, not an event. How well we integrate the parts of the process determines the long-range returns on our investments. High-quality training and development inputs result in high-quality performance outputs. “Train to retain” may be a good motto. The ultimate “multiplier” of training occurs when well-trained staff personnel stay with a firm for a long time!

Marketplace power originates from formal, detailed planning of the staff training and development process. The power resides in a staff resource base that is stronger than all a firm’s competition. That power is the ability to survive and succeed in the difficult years ahead. That power is for a CPA firm to be known primarily for its quality services and its quality people.

The capstone for maximizing the benefits of the training process occurs during engagement performance and review. The test question is: Does the on-the-job decision making and documentation of work reflect application of the resources developed through the firm’s staff training and development process. Policies that embody the principles of learning in our holistic approach to staff development must be reflected in the results of engagement procedures. In my next blog, I’ll focus on how good orientation training can result in huge engagement time savings. Please post your comments!

Tuesday, November 17, 2009

From OCBOA to Special Reports

We are all aware of the AICPA Auditing Standards Board’s (ASB) project on clarifying and converging SASs with with International Statements on Auditing (ISA). One of the auditing standards is AU 623 Special Reports. The ASB has released Proposed SAS, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks. This proposed SAS changes much of the terminology that we are used to when preparing OCBOA financial statements. In fact the very term “OCBOA” will be replaced with “special purpose frameworks.”

Special purpose frameworks are defined as financial reporting frameworks other than generally accepted accounting principles (GAAP). These include cash basis, tax basis, regulatory basis, and contractual basis. Cash basis, tax basis, and regulatory basis of accounting are commonly referred to as "other comprehensive bases of accounting" (OCBOA).


How will this proposed SAS affect your practice?
Tell us how you think it will affect your practice by adding a comment.

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Sunday, November 8, 2009

Maximizing Returns on Your Investment in CPE

It’s not new news, but the purpose of mandatory continuing professional education (CPE) is to improve the competence of CPAs. By improving the competence of CPAs, standard-setters reasoned, the quality of their services should be higher. Sometimes this has proven to be true; sometimes not! Here are some tips on how to get your money’s worth from CPE.

Maximizing the returns on our investment is CPE is a holistic undertaking. For some firms, this may require taking the axe to the roots of some of the firm’s philosophies and objectives. For others, it may mean trimming some old ways and grafting in some new. For example, if CPA firm management sees CPE as a compliance function and seeks the least expensive training providers and delivery methods, the benefits to firm personnel may be limited. On the other hand, high-quality CPE that is designed to transfer learning to practice can make substantial improvements in engagement quality and efficiency.

Management’s attitudes have a direct effect on CPA firm staff personnel. If management demonstrates and communicates the value of CPE in providing high-quality client services, staff will be inclined to adopt the same values. If management doesn’t apply learning to the job, neither will staff.

For several years, I taught centralized staff training for a larger CPA firm. This week of CPE for progressive staff levels provided foundational accounting and auditing training that contributed to the success of many other CPA firms. To this CPA firm’s partners, however, staff training came to be known as “play week.” Partners returned from their out-of-town seminars sharing stories of humorous, late night events, usually prompted by excessive alcohol intake! When it came time for staff personnel to attend out-of-town training, they too focused on “playing hard.” Playing hard resulted in the firm being barred from returning to three major universities, not to mention having to pay for substantial damages to continuing education facilities.

Maximizing the benefits of CPE begins with the value management ascribes to it. In my next blog, I’ll begin to discuss how management can motivate staff personnel to get the most out of their CPE. Please comment and share how your firm gets the most value out of its training investment.