Dear Joe,
I hope you’re not sorry that you left the plumbing business to become an accountant due to the economy. As to your first question, this would be a type 2 subsequent event: “changes in circumstances occurring after the balance sheet date,” and would not be reflected as of the balance sheet date. With regard to disclosure, it would be your call to determine whether disclosure is sufficient to inform users of the uncertainties mentioned in your last question. If you believe that disclosure is inadequate, you should consider a GAAP departure paragraph in your report. The same holds true for your evaluation of the client’s ability to continue as a going concern.
— CalCPA’s A&A Answerline
(800) 922-5272 ext. 2355

California law does not meet the national standard for CPA licensure and California CPAs are at risk of losing the ability to serve their clients’ interests outside of California. However, the solution is simple: California must adopt the 150-hour educational pathway as its only pathway to licensure. More than two-thirds of new California licensees choose the 150-hour pathway—what’s more, that percentage has grown every year since the option was introduced in 2002.

New legislation will be introduced in January to help move this effort along. We need you as constituents to meet with your legislators Jan. 21 and urge their support.

All existing CPAs and those licensed before 2012 would be grandfathered in.

Help communicate this to your legislators in Sacramento.

Register today for CPA Day at the Capitol.

The holidays are fast approaching and that means everyone’s calendars are quickly filling up with parties and get-togethers! I hope you will make room for our special chapter mixer Nov. 13 at Bistango Restaurant in Irvine. Connect with old friends and make some new ones at one of the OC’s favorite hot spots.

As chapter president I am very excited to announce our first YEP (Young and Emerging Professionals) event, which will take place Dec. 4. CalCPA is making our future CPAs a priority, and we are very fortunate to have Andrew Jordan from Starr and Walters, along with Mike Feher from Deloitte, as co-chairs of our newly formed committee.

Speaking of priorities, you may have read that CalCPA is heavily involved in promoting legislation that will greatly benefit all CPAs in our state. The two main issues are mobility and the 150-hour education requirement for CPAs. In a nutshell, mobility involves the ability of a resident California CPA to practice outside state lines. Many CPAs in this state may be unwittingly breaking accounting laws of other states, because the Uniform Accountancy Law is not really working the way in which it was intended. California is one of only a handful of states that does not allow for seamless accounting business flow across state lines, and CalCPA is working to change that.

Our second goal is the passage of 150-hour education legislation. When enacted, California will finally be in line with the rest of the country in requiring one pathway to licensure.

You will be hearing much more about these important subjects in the coming months, and we will need your help in bringing these changes about. More information is available online, including registering for CPA Day at the Capitol Jan. 21. I hope you have a safe and happy holiday season, and I look forward to seeing you at chapter events.

— Monica J. Rebella, CPA

National experts can help you make sure your succession plan is on track and that you maximize the value you have created in your firm.

Register today for the Education Foundation’s 2008 Succession Planning Conference:
Nov. 4: Burbank
Nov. 11: San Francisco

• 2009 U.S. Master Tax Guide (Expected ship date, late December): $49.95/members; $69.95/nonmembers.
• 2009 Guidebook to California Taxes (Expected ship date, late January): $44.95/members; $64.95/nonmembers.

Order today.

Plus, a lunchtime celebration will feature winners of CalCPA’s first Women to Watch Awards presented in cooperation with the AICPA. Learn more or download a nominations form.

Then join other women as they finish the successful day of networking at the Women’s Leadership Forum with a networking dinner.

The CalCPA Nominations Committee is accepting nominations until Dec. 1 for 2009–10 CalCPA officers and council members at large.

Learn more and download an application.

Oct. 30: Making Informed Capital Investment Decisions: Topics include how to select income statement and balance sheet items that are important for valuation; basic theory of project evaluation; using discounted cash flow and no-arbitrage methods of pricing and how to choose between them; making appropriate adjustments for risk; and incorporating tax effects into a valuation. Register online.

Nov. 14: Acting Ethically and Detecting and Preventing Accounting Fraud: Topics, among others, include, common types of misstatement/fraud; assessing the impact of accounting misstatements; evaluating the effectiveness of internal controls; and developing ethical rules and guidelines for a company, division or operating unit that apply to accounting and finance situations. Register online.

Sharing knowledge and experience happens in many ways. Right now clients, colleagues, family and friends are worried about our economy and their financial situation. The economy is sluggish, the stock market has erased several years of growth and just when people thought moving investments into CDs and other cash positions was safe, banks are failing.

I am sure clients have contacted many of you for help. As a CPA with substantial education and training in finance it is natural. You are an ethical, trusted adviser.

If you are one of our CPAs with certification in financial planning I am sure you are dealing with these issues and questions daily. Although we wish we all had the magic answer and the working crystal ball, we don’t.

However there are some basic items you can pass along to clients, colleagues, family and friends:

1. Do not panic sell
2. Review your investments with a trusted adviser
3. Do not heavily invest in any one type of investment vehicle

I have found from situations with my clients and family that some non-CPA financial advisers out there do not always have the investor’s best interest in mind.

Perhaps you have encountered this situation. My advice is caution to anyone before making sweeping changes. Ask what benefit the investor will get from the change (preserve principal, stabilize income stream, etc) and what the person selling this solution will receive, and how is the person compensated for the transactions.

It’s important that the individual make sure the advice makes sense for all concerned, mainly the person with everything to lose.

On a different and uplifting note, I want to bring to your attention CalCPA’s Celebrating Women CPAs event Dec. 3. It is a great event of networking and professional growth. Featured will be topics on attaining leadership positions within the profession, dealing with difficult situations, mentoring and public speaking.

The event will also include a luncheon, which will acknowledge outstanding women in our profession, culminating with CalCPA’s first Women to Watch awards. Review the criteria for the award and download a nomination form.

It is wonderful that people who have accomplished much in their careers and have shared their knowledge and experience will be acknowledged. By the way, men are invited to attend, too.

Speaking of sharing knowledge and experience, if you are interested in helping to shape our profession, CalCPA invites you to submit the names of those you feel are outstanding leaders. Nominations are open through Dec. 1 for 2009-2010. Find more information online or feel free to contact me.

In closing, I believe that CPAs, in difficult times, can bring calmness, clarity and a positive direction to the situation.

— Monica Rebella, CPA