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Weekly UpdatesThe Who's Who of practitioner selection is a formidable task. Each year we solicit nominations from all the state societies and major national accounting associations and update from prior years for this recognition. These unselfish professionals are representative of a profession that chooses to serve others. Service to others can be financially draining. Many accountants who have been elected to lead their profession have confided that it costs big time in their ability to realize billable hours when their voluntary service becomes practically a full time job itself.
Q & A with 2006 Most Influential Practitioner
Sidney Kess, CPA, J.D., LL.M.
Selected Most Influential Practitioner for 2006, Sidney Kess lives in New York City and has authored hundreds of books on tax-related topics. Mr. Kess probably is best known for lecturing on tax and estate planning to nearly every state CPA society and more than 700,000 practitioners. In 2003 he received special recognition from the AICPA and CCH for his many contributions to the tax profession. He created and moderates the annual AICPA Conference on Tax Strategies for the High-Income Individual. A graduate of Harvard Law School, Mr. Kess received his LL.M. from New York University.
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JOYCE ELVEN: Please identify and share your viewpoint on three critical issues facing the practicing accountant today in the tax area.
SID KESS:
1. Attracting top flight personnel is a key issue today. Accounting firms need practitioners who can deal with complex issues, so it is important to realize that top people must receive training on the job as well as through continuing education. Plus, they need to be adequately compensated!
2. Continuing education is imperative. Because of the numerous changes in legislation, regulations and court cases, it is very important for the practicing accountant to attend continuing education programs of the highest quality in order to gain the knowledge and skills to master all the developments. Although CPE courses often are taken to meet the requirements for retaining a professional certificate, practitioners must realize that CPE also is about recognizing new ways to serve clients effectively. Consequently, when practitioners broaden their knowledge and expand their skills, their firms' profits also increase.
3. Staying abreast of new technology is indispensable. Through new technology and computer research tools, various publishers save practitioners thousands of dollars. The tax research staffs of international firms all publish bulletins and newsletters, and major publishers serve as the research arms of small and medium-size firms. It is important for practitioners to acquaint themselves with what is available in the accounting technology marketplace. By implementing new technology, practitioners can stream line compliance, research and their practices.
ELVEN: How has the practice of taxation changed since you started your career?
KESS: Because of complex changes in the tax law, the movement toward specialization changes the way most firms conduct their tax practice. Further, the use of consultants or "outside experts" is escalating. Years ago, good tax practitioners were generalists--experts in subjects such as sub-chapter C, state and local matters, estate planning, international taxation, accounting methods, and retirement planning. Complex law, however, requires each person to be an expert in perhaps just one of those areas. Despite this trend toward specialization, there still is a demand for generalists. This demand is greatest in smaller firms needing practitioners that not only have a broad comprehension of the entire tax area, but also know when to call for help.
ELVEN: How has Sarbanes-Oxley (SOX) affected the tax practice as a whole?
KESS: As a result of many firms marketing abusive tax shelters, the Public Company Accounting Oversight Board (PCAOB) adopted new ethics rules and placed definite limits on the ability of accounting firms to offer services to their audit clients, including:
1. offering aggressive tax shelter schemes to audit clients,
2. providing tax services to clients on a contingent-fee basis, and
3. providing tax services to certain members of management (in public companies) serving in financial reporting oversight roles.
In addition to SOX, Circular 230 restricts tax services provided by auditors. (Editor's note: Please see the October CPA/NPA Magazine, Page 8, where Sid Kess explains how to comply with Circular 230.)
ELVEN: Even if an accountant doesn't deliver SOX services, how do you think the ruling changed the accounting landscape?
KESS: The PCAOB ethics rules are a guide for how tax practitioners should serve their clients. It is important to realize that the executives of public companies--executives who no longer are allowed to receive tax services from their company's outside auditors--may be a source of new business for small and medium-size firms.
ELVEN: What are your thoughts about the ethical challenges in today's accounting field?
KESS: Many of the developments relating to ethics in the accounting field today are long overdue. The tougher ethical rules of SOX and Circular 230--and all the drastic changes confronting practitioners--resulted from the abuses occurring in the past. In time, I believe these much more restrictive rules will be modified.
ELVEN: How can today's practice continue to change itself for the future?
KESS: Hire quality staff, and treat them decently; invest in the latest technology; train your staff; and conduct yourself and your practice in the highest ethical way. Even if SOX doesn't apply to your practice, it's wise for all practitioners to adhere to its guidelines and goals.
Accountant Association Administrators & Public Servants
Congressman K. Michael Conaway, is a Texas A & M University at Commerce graduate. He is a prominent figure in the NASBA organization. This Texas native is the owner of his own CPA firm and was a past senior vice president of the Texas Commerce Bank in Midland.
David Costello, president and CEO of the National Association of State Boards of Public Accountancy and NASBAs Center for the Public Trust, which had its inaugural meeting in Washington DC this Fall. Prior to leading NASBA since 1994, he was executive director of the Tennessee Society of CPAs. Prior to that he ran his own firm and was an auditor for Ernst & Ernst. He received an MBA from Vanderbilt University in 1982.
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Robert H. Herz is chairman of FASB. He graduated from the University of Manchester. Past affiliations include: senior technical partner of PricewaterhouseCoopers; senior technical partner of Coopers & Lybrand; board member of IASB; chair of SEC Regulations Committee, AICPA; chair of Transnational Auditors Committee, IFAC.
Barry Melancon, is president and CEO of the AICPA since 1995. Just prior to that, he was executive director of the Society of Louisiana CPAs. Prior to that tenure he was a shareholder with Bergeron & Co. He is a member of the IFAC and the American Society of Association Executives. Mr. Melancon was educated at Nicholls State University with a BS in 1978, and an MBA in 1983.
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James C. Metzler is vice president of Small Firm Interests for AICPA. Past affiliations include: cofounder and member of ConvergenceCoaching LLC; chairman of GEMKO Information Group Inc.; partner of Gaines Metzler Krinder & Co. He graduated Canisius College.
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Accounting Practice (Large Firms)
Robert Bunting is past chairman of Moss Adams and immediate past chairman of the AICPA. Mr. Bunting was only the 4th Chairman from west of the Rocky Mountains in the last 30 years. He now joins the Board of 23 members of the International Federation of Accountants (IFAC). He said that, "2005 is a target year for beginning to converge world accounting standards." Six countries accounting institutes are guaranteed a board spot. "the IFAC is like the United Nations of accounting associations," he said. "The overall purpose is to promote accounting standards and professional accountants. The IFAC lobbies the International Accounting Standards Board (IASB) and the International Audit Assurance Standards Board (IAASB)." The principal standards boards in the world are the IASB, the FASB (France), the JASB (Japan) and the United Kingdom's Accounting Standards Board.
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Convergence is important because of the differences among standards. As Mr. Bunting stated, "pooling of interests is still allowed for mergers in Japan but not in the UK or the US. Further, "oil and gas and real estate leases are all treated differently." The next World Congress for the IFAC will convene in Istanbul to work on the convergence of IFRS, International Financial Reporting Standards.
Timothy L. Christen is CEO of Virchow, Krause & Co, LLP. He graduated from the University of Wisconsin-Platteville. Other affiliations include: member of AICPA Council; chair of Managing Partners Committee, Baker Tilly International; treasurer of Wisconsin Manufacturers & Commerce; past board chair of Wisconsin Special Olympics.
Mike Conway recently retired as a member of The National Managing Partner of The Department of Professional Practice for KPMG. He has a BBA in accounting with high honors from the University of Miami. He is a past member of the AICPA's Board of Directors. He is former chairman of the AICPA's SEC Practice Section (SECPS) Executive Committee; former president and campaign chairman of the United Way of Westport-Weston and a board member of Goodwill Industries.
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