MSCPA - News

Chief Financial Officers, CPA Executives Remain Cautious Regarding U.S. Economy

Wed, 31 Dec 1969 19:00:00 EST

If CPA executives across the U.S. could use one phrase to describe their outlook on the U.S. economy in the fourth quarter, it would likely be "holding steady." Results from the Fourth Quarter Economic Outlook Survey, sponsored by the American Institute of Certified Public Accountants (AICPA) and the University of North Carolina's Kenan-Flagler Business School, show that the increase in optimism seen in the second and third quarter surveys has leveled off, and modest expectations for business expansion are mixed with significant uncertainty about the timing of recovery.

Queried on their expectations regarding optimism and expansion over the coming year, corporate financial executives provided insight into two economic indices introduced in this quarter's survey: the Corporate Optimism Index (COI) and the Corporate Expansion Index (CEI).

After two quarters of improvement, COI for the US economy has stabilized. Overall optimism percentages were virtually unchanged from July 2009-40 percent of respondents expressed pessimism while 27 percent were optimistic. In answering whether their confidence levels had changed from last quarter, 37 percent expressed more confidence, 35 percent about the same confidence and 28 percent expressed less confidence.

The trend also remains stable for chief financial officers who are more optimistic about their own organizations than they are about the broader U.S. economy. Thirty-eight percent of respondents are optimistic about the prospects for their own organizations, consistent with 39 percent from last quarter. Showing a slight increase in optimism, expansion plans are on the uptick. This quarter's CEI indicates that 45 percent (up from 42 percent last quarter) of respondents now expect their businesses to expand in the next 12 months.

"It seems as though the worst might be over and there are some hints of expansion," said Carol Scott, AICPA Vice President, Business Industry and Government. "However, the majority of our CFOs and controllers are telling us that they expect a slow recovery and now don't expect significant improvement until late in 2010 or even into 2011," she added.

Expectations for when the economy will begin to improve have shifted out once again. Of the 1,201 CPA respondents, 61 percent (up from 43 percent last quarter) do not believe the economy will begin to improve until the second half of 2010 or beyond, and a quarter of respondents believe it will be 2011 before the economy begins to improve. While the percentage of respondents who think the economy is improving now almost doubled, the percentage of respondents who expect improvement before the end of 2009 has dropped from 26 percent to 21 percent.

When asked about potential recovery scenarios less than one percent say they expect a rapid rebound while 69 percent of respondents anticipate a slow economic recovery and 20 percent believe that the U.S. economy will experience a double-dip recession.

In the realm of key performance indicators, 52 percent (up from 45 percent last quarter) now expect revenue increases while the percentage expecting decreases dropped from 42 percent to 36 percent. Regarding profits, 48 percent expect increases, while only 35 percent expect decreases. Expectations for employment improved slightly but continue to lag behind expectations for revenue and profit. Twenty-eight percent of respondents expect to increase the number of employees at their businesses (up from 25 percent last quarter). However 30 percent of respondents still expect a decrease in the number of employees over the next 12 months.

New Financial Reporting Standards Available for Private Companies

Wed, 31 Dec 1969 19:00:00 EST

Often lost in the discussion of International Financial Reporting Standards (IFRS) coming to America is how IFRS will impact private companies. After all, there are only about 12,000 publicly listed companies in the United States, compared to millions of privately held entities.

"Private companies don't have to wait for the Securities and Exchange Commission to act," points out Ted Flynn, CAE, president and CEO of the Massachusetts Society of CPAs. "Earlier this year the International Accounting Standards Board (IASB) released an IFRS standard geared specifically to small and medium entities (SMEs), what in the U.S. is generally referred to as private companies."

In May of 2008 the AICPA governing Council voted to recognize the IASB as an international accounting standard setter. This action allows CPAs preparing financial statements for private companies to use IFRS for SMEs if they determine it best suits the objectives of their financial statement users. Their financial reporting options now include IFRS for SMEs, full IFRS, U.S. GAAP or an other comprehensive basis of accounting, such as a cash- or tax-basis.

At about 230 pages, IFRS for SMEs is a self-contained, significantly simplified version of full IFRS. There are a number of reasons why a private U.S. company might choose to use them. Some may find them to be more relevant and less costly than the more complicated and voluminous U.S. GAAP. But probably the most common reason is that the private company has some kind of international focus. Perhaps it is owned by a foreign parent, has a foreign partner, is interested in foreign investment, or is looking to be acquired by a foreign entity.

Using a common global financial accounting and reporting standard like IFRS for SMEs makes it easier to compare the financials of companies operating in different countries, and improves the efficiency of transacting business across borders. In conducting business with private companies in different countries, lenders, venture capitalists and other users want to be able to work with only one financial accounting and reporting standard. Now, they can.

The AICPA has taken an active role in helping CPAs understand both the full IFRS and IFRS for SMEs, primarily with its launch of IFRS.com, the premier source for IFRS resources in the United States. It features daily updates, articles, videos, FAQs, whitepapers, training material and technical information. Breaking news also is announced on Twitter. And the complete IFRS for SMEs (together with the basis for conclusions, illustrative financial statements, and a presentation and disclosure checklist) are available without charge from the IASB Web site.

Flynn notes that the first step is for CPAs to use these resources so they gain a general understanding of IFRS for SMEs and determine whether its use is appropriate for their companies or clients. "Even if U.S. GAAP remains the primary set of accounting standards for private entities, it will be important for many CPAs to be able to work with both U.S. GAAP and IFRS," he/she says.

2010 Financial Literacy Calendar

Wed, 31 Dec 1969 19:00:00 EST

The 2010 Massachusetts Society of CPAs (MSCPA) Financial Literacy Calendar is now available for the public. The calendar serves as a financial literacy guide with handy tips and tools for improving the financial health of the public. It is loaded with year round advice to keep you on track with finances and planning for future expenses. The calendar also features definitions of common financial terms and important financial and tax dates that will be needed.

Thank you to the sponsors who made the calendar possible:

The 2010 Financial LiteracyCalendars are available to all Massachusetts residents free-of-charge and can be found at the following local libraries and organizations:

Adams Free Library

Ames Free Library (North Easton)

Ashland Public Library

Avon Public Library

Bancroft Memorial Library (Hopedale)

Beaman Memorial Public Library (West Boylston)

Belmont Public Library

Billerica Public Library

Blanding Public Library (Rehoboth)

Bushnell-Sage Library (Sheffield)

Canton Public Library

Cary Memorial Library (Lexington

CEOC (Cambridge)

Chelsea Library

Chester C. Corbin PublicLibrary (Webster)

Clapp Memorial Library (Belchertown)

Cuttyhunk Public Library

Dennis Public Library

Duxbury Free Library

East Brookfield Public Library

Edwards Public Library (South Hadley)

Fall River Public Library

Fiske Public Library (Wrentham)

Flint Memorial Library (NorthReading)

Flint Public Library (Middleton)

G.A.R. Memorial Library (West Newbury)

Goodnow Public Library (Sudbury)

Greenfield Public Library

Haverhill Public Library

Holyoke Public Library

Hyannis Public Library Association

Ipswich Public Library

J.V. Fletcher Library (Westford)

Jacob Edwards Library (Southbridge)

James White Memorial Library (East Freetown)

Jones Library (Amherst)

Kingston Public Library

Kirstein Business Library/Boston Public Library (Boston)

Langley-Adams Library (Groveland)

Lawrence Library (Pepperell)

Leominster Public Library

Leverett Library

Lucius Beebe Memorial Library (Wakefield)

Lynn Public Library

M.N. Spear Memorial Library(Shutesbury)

Mansfield Public Library

Marstons Mills Public Library

Mashpee Public Library

Merriam-Gilbert Public Library (West Brookfield)

Middleborough Public Library

Monroe Public Library (Monroe Bridge)

Montague Public Libraries (Turners Falls)

Morse Institute (Natick)

Nahant Public Library

Needham Library

New Bedford Free Public Library

Newton Free Libaray

Norfolk Public Library

Northborough Free Library

Oak Bluffs Public Library

Paige Memorial Library (Hardwick)

Parlin Memorial Library (Everett)

Peabody Institute Library

Pembroke Public Library

Peru Library

Plympton Public Library

Pollard Library (Lowell)

Princeton Public Library

Provincetown Public Library

Reuben Hoar Library (Littleton)

Revere Public Library

Richard Sugden Library(Spencer)

Robbins Library (Arlington)

Sandisfield Library

Saugus Public Library

Shrewsbury Public Library

Simon Fairfield Public Library (Douglas)

Somerset Public Library

South Hadley Public Library/li>

Southborough Public Library

The Aquinnah Public Library

The Millbury Public Library

The Millicent Library (Fairhaven)

The Millville Free Public Library

The Rowe Town Library

Treasury Department (Boston)

Uxbridge Free Public Library

West Bridgewater Public Library

Wheeler Memorial Library (Orange)

Whitman Public Library

Wilmington Memorial Library

Worthington Library

Young Men's Library Association (Ware)

MSCPA Joins Accounting Doctoral Scholars Program

Wed, 31 Dec 1969 19:00:00 EST

You are no doubt aware of the growing crisis in the shortage of academically-qualified accounting faculty. Not only has the production of doctoral accounting faculty declined substantially over the last ten years, but a large percentage of accounting faculty are expected to retire over the five to seven years. Without adequate and qualified faculty, accounting program administrators and deans of business schools will be forced to limit enrollment in undergraduate and masters programs in accounting. You know how important a supply of well-educated talent is to the future of the profession.

The MSCPA is partnering with over 69 firms, and over 35 additional state CPA Societies, to help address this critical need by committing financial and other support to for the Accounting Doctoral Scholars (ADS) program that is administered by the AICPA Foundation.

Launched in 2008, the ADS program provides funding for up to 30 individuals each year, with a focus on those currently working in public accounting, to help them make a permanent transition to teaching and research in accounting at the university level. The funding supports application to doctoral programs in accounting and also provides an annual stipend of $30,000 up to four years of enrollment. Priority is given to those committed to teaching and research in audit and tax - the areas of greatest need.

Applicants to the program must be U.S. citizens and have three years of recent meaningful public accounting experience in auditing or tax. A full description of the program, complete eligibility requirements, application procedures and a current list of participating universities are available on line at www.adsphd.org. The ADS Program application, for enrollment in an accounting doctoral program for fall 2010, will be available online June 1, 2009. The application deadline is October 1, 2009.

Massachusetts CPA Mobility Legislation

Wed, 31 Dec 1969 19:00:00 EST