I’d Rather Look Stupid and Be Right

Asking timely questions will keep you safe

Pride goes before a fall.

The saying is true in life and public accounting.

How many times have I had a question, but I was afraid to ask it for fear of being found out, for fear that someone might think that I’m not very bright. But through the years, I’ve learned–though I still struggle with this–to get over my pride and just ask the question. Go ahead and look dumb if necessary, but get the right answer, regardless.

Ask Questions

In one way, this struggle increases as I get older. After all, if I have experience, I should know the answers. And if I have plenty of experience, I should, all the more, have the goods. Or so the thinking goes. But just because my hair is graying does not mean I possess all knowledge. Often I find that those much younger than I know things that I don’t, especially regarding technological issues. There are times when I let my pride get the best of me, and I don’t ask the question. Later, after I wipe the egg off my face, I realize humility is the better course. So I’ve come up with a phase just for me.

I’d rather look stupid and be right than to look smart and be wrong.

Otherwise, I might be saying with Forest Gump, “Stupid is as stupid does.”

Is Membership in the Center for Plain English Accounting Worth the Money?

The AICPA's CPEA provides technical support to CPAs

One of my readers asked me to write a review concerning my firm’s membership in The Center for Plain English Accounting (CPEA). So here it is. (These are my personal thoughts and not necessarily those of my firm.)

Picture is courtesy of DollarPhotoClub.com

Picture is courtesy of DollarPhotoClub.com

My firm joined the CPEA about six months ago. What led to that decision? We used the AICPA hotline for several years, and the experience was positive. But as you may (or may not know), the AICPA hotline does not offer written responses. I would send the hotline an email with a technical inquiry, and the AICPA would call me–usually within 24 hours–with an answer. I would document that discussion in my engagement file. But, in the back of my mind, I always longed for a written response. Why? These were usually thorny, high-risk problems.

The CPEA provides written responses to inquiries.

What Does the CPEA Do?

Here’s an excerpt from their website:

The Center for Plain English Accounting is the AICPA’s National A&A resource center, available exclusively to members of the Private Companies Practice Section. The CPEA’s team of experts assists member firms in understanding and implementing accounting, auditing, review, compilation, and quality control standards by sharing technical advice and guidance in a straight-forward manner. CPEA professional staff provide A&A support by describing “how to do” what you “need to do” in implementing the authoritative literature.

In short, the CPEA provides information about evolving technical issues and answers to specific questions.

Cost to Join

What’s the cost of joining the CPEA? For our firm, it is $1,495. So this is not a cheap decision. But I felt like my company received its money’s worth in the first month. We have posed several questions since joining, and we have received timely written responses — every time. For firms that don’t have a national office (and most of us don’t), this is an excellent solution.

For more information about joining the CPEA, click here.

How to Submit Questions

How do you submit your questions to the CPEA? With an online form such as the following:

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Are there other benefits?

I often hear CPAs lament about keeping up with new standards, and I feel their pain. So how can we do so?

The CPEA provides information in the following ways:

  • Webcasts
  • Emails with summaries of new information
  • Website

Here’s a screenshot showing recent reports and alerts that the CPEA has provided:

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Worth the Money?

For me, the cost of membership has been worth the money. If your firm desires to keep up with evolving standards, the CPEA is a great choice. (I have received no compensation for this recommendation.)

What I Wish I Had Known About Public Accounting

Things I wish I had known 30 years ago

I thought I knew a lot when I graduated from college, but my education was just beginning.

Picture is courtesy of DollarPhotoClub.com

Picture is courtesy of DollarPhotoClub.com

Job #1 – The Lesson of Firm Culture

In my first job, I went to work with a “big eight” public accounting firm in Tampa, Florida. As soon as I moved to my new digs on Tampa Bay, they shipped me out to Jackson, Mississippi where I remained for months (seeing my Tampa apartment twice in three months). Most days I did the expert work of pro-forming work papers—the thing they gave to newbies. Boredom defined. So I had this sexy job with a big firm, but I spent most days dawdling with routine duties. I kept thinking, “I went to college for this?” Surely accounting had to be more interesting.

I felt uncomfortable. This international firm was cold (even if this office was in Florida). I grew up in a small town where you spoke to everyone and respected all. So I soon left Tampa and headed back home to Georgia.

What I learned: Work in a place that allows you to grow and one where you fit in. Firms have cultures; I needed one that aligned with my personality and values.

Job #2 – The Lesson of a Niche Practice

Back in Georgia, I landed work with a regional firm. I felt more at home. The work was more challenging than my former job, and my knowledge began to expand rapidly. This particular business had a strong niche practice and was very profitable. The firm used a pooled staffing approach, so I worked for one partner one week, another the next week, and another the next. I did not get a chance to start and finish audit engagements. It stressed me that so many different partners wanted me to complete their work. And each partner felt their work was the priority. After three years, I moved on.

What I learned: Firms that focus on niches perform better than those that don’t. As an employee, it’s better to work with one partner. You get to see engagements from start to finish, and the stress decreases as you know what your (one) boss wants.

Job #3 – The Lesson of Working for One Boss

My new firm was even smaller than the last, having about thirty people. Here I worked for one partner which was nice, and he worked in one industry which was also pleasant. When I interviewed with the firm, I was told my assigned partner would retire in three or four years, and I would have the opportunity to take his place. Since I was the audit manager, I learned a great deal, but over time it became apparent to me I was doing most of the work and the partner was receiving most of the benefits.

The partner was a wonderful guy, but after eight years (not three or four), the partner was still in plain sight (and had not retired). So one day I screwed up my courage and asked, “When are you retiring?” The conversation was difficult (an understatement, he yelled at me). He would not answer my question. It was clear he had no intention of retiring (even though he was 68). I was angry. I had been duped (at least, I felt that way). So I left.

What I learned: I liked working for one boss. I knew what he wanted, and I delivered it. When someone makes you a partnership offer, get it in writing (clarify the timetable and how the transition will occur). Don’t allow years to go by without communicating.

Job #4 – The Lesson of a Solo Practice

The next step in my journey was to start a new firm. I bought a small company that was only yielding $200 per month (yes, you read that right—$200 a month). My wife was at home with our kids, so we had no other income. About this same time, my two-year-old son was diagnosed with cystic fibrosis. I wondered how we would make it. Never been so low in my life. We had an excellent opportunity to exercise faith, so we did, praying often. All I can say is God took care of us. At the end of the first year, my income was equal to my prior year of employment. The following five years were successful. But after six years of being a sole proprietor (and then as a partner), my father’s health began to fail, and I was called to attend to his needs and…yes, you guessed it, another job.

What I learned: Going solo is one of the hardest things you will ever do. I quickly realized how important it is to have other professionals around me so I can bounce thoughts off them and seek their guidance. Being alone is well…lonely. (I brought in a partner in my third year. Having her there was quite helpful.) Without the economies of scale afforded to those in larger firms, my overhead ate most of my cash flow. I found it hard to get potential audit clients to take me seriously. They saw me as “small” though my skill level was no different than it was in my previous jobs. When it comes to marketing, perception is everything.

Job #5 – The Lesson of Learning to Speak and Write

I returned to my first Georgia employer (job #2 above) as their quality control director. I was 42 years old and had never been a quality control guy, so this was all new to me. But I enjoyed the challenge. While the firm had a niche practice, it still afforded me the opportunity to see a wide variety of audits, reviews, and compilations. I also began teaching more continuing education classes and loved doing so. When I taught, I felt “in my element.” The firm did (and still does) an excellent job of marketing. After six years in this position, my father passed away, and my wife wanted to move back to middle Georgia to be near her mother. So we did.

What I learned: Exposure to a broad range of work expands your professional abilities. It is easier for niche firms to market themselves as go-to experts. A niche practice generates higher profits since a common client base allows a firm to build repeatable processes and train staff. Also, I was beginning to realize the importance of speaking and writing. (On a personal note, being there for my Dad was awesome. The conversations we had are some of my most treasured memories.)

Job #6 – The Lesson of Staying with a Firm

For the last seven years, I have worked as the quality control director and now as the quality control partner for our business. We are well diversified, but we have specialized niches within the company, so no one industry defines us. The diversity of work keeps me on my toes. I deal with accounting and auditing issues for banks, telecommunication companies, nonprofits, governments, small businesses and more. I continue to speak at professional conferences and to our staff, and, as you can see, I write. Interestingly, social media and writing books have allowed me to make contacts throughout the country.

One thing I have thought about as I look back over my career: I changed jobs too often. If I had my career to do over again, I would find a good firm, and I would stay. Changing jobs provides you with a greater diversity of experience, but it lessens your opportunities.

What I learned: Finding and staying with a good firm will provide you with your most significant opportunities. Speak to groups and write professional articles and blog posts. Doing so will allow you to make new friends and great contacts.

Reflections on the Journey

Finally, let me say this: Finding balance and taking care of ourselves physically and spiritually are keys to success. Sitting at a desk for ten to twelve hours a day—without breaks—will only make us less productive and less healthy. Praying and running have been my two biggest allies. At 6:00 every morning, I spend about 30 minutes reading my Bible and praying. I also run about three times a week. These practices give me energy and stamina.

What Lessons Have You Learned?

These are some of the things I have learned, often the hard way. I’d love to hear about lessons you learned. Please share one or two career experiences that have taught you the most.

How to Increase Profits and Happiness in Public Accounting

Having worked in public accounting for thirty years, I have noticed that successful CPAs do certain things. Do these, and I can just about guarantee that you’ll be more profitable and happy.

Picture courtesy of DollarPhoto.com

Picture courtesy of DollarPhoto.com

First, surround yourself with smart people.

Smart people make you look smart. Surround yourself with the best folks you can, even if it costs you more money. The premium you incur will return–and then some. Most CPAs are extremely cost conscious–many times, too much so. If you hire sub-par people, you will get sub-par work. Pay the premium and get staff that excel. They will impress your clients and–more times than not–will be more pleasant for you to work with. Want quality work? Hire quality people.

Second, create an excellent book of business.

Not every client is a good customer. Understand that the Pareto Principle applies here as well as the rest of life. The Principle says that 80% of your success will come from 20% of your effort (or clients). Conversely, 80% of your headaches will come from 20% of your clients. Build a book of business that is worthy of your best efforts. They will love you, and you will love them.

So what are the characteristics of great clients?

  • They do as they say they will (providing information on a timely basis)
  • They listen and learn (allowing you to make real contributions)
  • They are pleasant (no one is perfect, but good clients make work so much more enjoyable)
  • They pay (no profit, no mission)

Creating an excellent book of business may mean you don’t accept every potential paying client. If a customer pays well but creates constant tension, is it worth it? Could you better invest that time in a customer who appreciates what you do?

Third, work in a good firm.

Some places are fun to work. You want to be there. You want to contribute. Others–not so. Find a place of work where people get along. I will never forget walking down the hallway of a firm I worked for in the 80s and hearing the partners yelling at each other. I was embarrassed just to hear the conversation. I thought to myself, “How can CPAs scream at each other?” and “Why would you be in a partnership with people you can’t get along with?”

Life is too short to work in places where tension is the order of each day. Move on and find a firm where folks get along. Firms of excellence have good leaders that create harmony, places where you want to be.

Finally, find a niche.

Aim at too many targets, and you will hit none. No one person can be great at everything. Find an area of interest and determine that you will be the best in that niche. Sustained focus over many years will significantly increase your probability of success.

Other Ideas

What other ideas would you add to the list?