It’s not new news, but the purpose of mandatory continuing professional education (CPE) is to improve the competence of CPAs. By improving the competence of CPAs, standard-setters reasoned, the quality of their services should improve. Sometimes this has proven to be true; sometimes not! Here is the starting point for getting your money’s worth from CPE.

Most of us are aware of the mortgage abuses that were a large part of the current economic crisis. We’ve heard that getting mortgages is hard right now. But we tend to think that we won’t personally be affected if we are good credit risks and bought within our means. Recent changes in the rules covering appraisals can make that assumption incorrect.

Perhaps the most effective on-the-job training activity, shadowing, can best be viewed while dining out! As a server approaches your table, you notice a rope tied around her waist. You soon observe that the rope is attached to another person carrying a large sign around their neck that says, "TRAINEE." The person's mouth is covered with duct tape and his hands are cuffed to his waist. His eyes and ears are wide open, however, as he watches and listens intently to the server's performance. OK, I'm exaggerating but you get the idea!

If you read my last blog, you'll remember I discussed some reasons why college graduates don't always know everything we think they should. We can complain about this but the truth is that most employees' training must occur on the job. Another truth is that some employers don't make an adequate investment in training activities. I don't mean they aren't sending their staff personnel to outside training; I do mean they aren't spending sufficient time training on the job.

In my previous posts, I discussed the importance of setting public-policy goals with regard to financial reporting standards in general before we in the United States attempt to make any public-policy decisions specifically with regard to International Financial Reporting Standards (IFRS). In this post, I'll describe two distinct public-policy issues related to financial reporting standards and I'll explain why it's important for us to distinguish between them. I'll also emphasize that we must address both issues if we're to make any progress toward formulating appropriate public-policy goals.

Having struggled through college with mediocre grades, it took me decades to realize that my grades didn’t matter much! I learned almost everything I know after college, on the job. Before you click your back arrow, let me correct myself a little. Grades do matter. Good grades demonstrate a student’s diligence, commitment and achievement, and they are necessary to get a good job. They are, however, only the beginning.

Unfortunately much of our college learning was lost after we took our exams.

Many auditors believe that owner or manager controls are unauditable because their performance is usually not documented. Interestingly, new risk assessment standards in 2007 identified inquiries and observations as acceptable procedures for testing controls. For example, obtaining a copy of a bank statement and asking a business owner how she approaches its preliminary review before reconciliation may provide evidence that the assessed level of risk of material misstatements for cash is less than high. This procedure will produce reliable evidence when the integrity of management is high.

(I think this first paragraph is unreadable with all of the new acronyms we have to learn with the new codification. When are the new acronyms going to look familiar?)

We’ve heard it referred to as the “tone at the top.” The character and behavior of an entity’s management sets the standard for other personnel. Despite elaborate codes of conduct, sanctions and whistle-blowing provisions, employees will follow their leaders.

The first time I developed a CPA practice years ago, client quality had little affect on my decisions to accept new clients. A local banker sent me new clients regularly and, to keep the stream flowing, I served them all. Because I was young, smart and well-trained (and not the least bit prideful!), I believed I could whip any unethical or dishonest client into shape!

Several of my banker’s referrals proved me wrong. One sued me! I’ll spare you the sad story only to say this client was a liar and built his success at the expense of his employees.