By Dennis Tepe, CPA, partner-in-charge, tax services, Jackson Rolfes Spurgeon & Co.
The question of what hot topics in continuing education will support professional and revenue growth in 2009 and in the future becomes very interesting in the context of the current economic and political climate. Since my personal discipline is in the area of taxation I will begin there. The core area of International Taxation continues to cross more desks and consequently demands a greater degree of specialization and training. This is particularly newer territory for many local and regional firms. IFRS (International Financial Reporting Standards) should be coupled with study in international taxation, although IFRS adoption which was pegged in the 2012-2014 time frame appears to be less likely, as the economic recession has dampened the momentum.
Form 990 changes remain an area of continued concentration and opportunity for projects. Deferred compensation and general executive compensation has been active, and with the AIG bonus controversy, I would see renewed interest in the regulations related to the area. Internal Revenue Code 409A and FASB 123R will be areas of interest.
In the general area of tax services to the middle market of owner managed businesses, entity selection remains an area of interest. As a result of the popularity of Limited Liability Companies (LLCs) taxed as partnerships, interest in that area remains high. The technical aspects of partnership tax law are involved in far more cases than they were just a few years back. These tax issues require a depth of knowledge and opportunity for growth for those tax staff willing to invest in their technical partnership development.
FIN 48 for private companies has been deferred until 2009 for calendar-year companies and until fiscal years beginning after December 15, 2008 for fiscal year-end companies. The requirements of FIN 48 will impact tax departments as well as attest staff of all accounting practices, regardless of size. The application of FIN 48 to S Corporations will bring additional questions and complications to the practice area. This will be an area where CPE would be very timely.
Finally, it is important to note that the tax and economic legislation that has yet to be passed will require the profession's strict attention. The ushering in of completely revamped political policies and direction, coupled with an effort to simplify certain areas of tax law while redistributing wealth, has the making of an enormous amount of technical law change. All practitioners will need to focus on the issues and proposals for change in order to maintain some reasonable semblance of personal and business tax planning. This education will come in the form of the study of legislative activity and CPE programs addressing signed Acts.
Business valuation issues remain a very active area. This includes the mark-to market issues that received so much attention in the most recent Wall Street meltdown, as well as FASB 141/142 addressing purchase price allocation and impairment issues. FASB's 159 and 160 will need to be addressed as they pertain to fair value options – Financial Assets and Financial Liabilities and minority interests in consolidated financial statements. The thrust in emphasis appears to be in financial statement transparency and assessment of underlying value. The outcry for enhanced regulation on the political front certainly could result in heightened interest and changes in these areas.
The attest area will also face the significant change referred to as FASB Codification. Effective July 1, 2009, the newly organized Codification includes all accounting standards issued by a standard-setter within levels A through D of the current U.S. GAAP hierarchy, including FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force, and related literature. The Codification does not change GAAP. It organizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics, and displays all topics using a consistent structure. The SEC guidance will follow a similar topical structure in separate SEC sections. The Financial Accounting Standards Board will offer periodic updates in an effort to transition to the July 1, 2009 anticipated approval date.
As mentioned earlier, IFRS will be of interest in the attest area. Although the decision to change appears to be accepted, the timing is an open question.
Forensic accounting and fraud examination are an area of heightened interest and show signs of growth. The stress of a severe economic downturn can lead to increased incidence of activity and these skills could prove beneficial.
As an overall assessment of the significant challenges in the accounting profession, it certainly would not surprise anyone when I say that those in senior leadership positions within firms are aging. Consistent with the many articles on the topic over the past several years, firms are beginning to give more serious consideration to succession issues. As a result, soft skill training has been in high demand in an effort to develop the next generation of management leaders. This is a great opportunity for staff to take advantage of a training opportunity that could fast track their career in leadership areas.