Financial Leadership Forum
California CPA magazine: January/February 2008
Excellence, Leadership and Vision Delivered to CalCPA Members
At the heart of California’s world-class economy are multitudes of talented business and finance professionals. And over the past several years, the demands from regulators, shareholders and employers to keep the businesses these professionals serve thriving and transparent have been unprecedented.
CPA Sarah Gatenby, a controller at Santa Clara University, says the recent deluge of pronouncements and auditing standards makes her feel like she’s back in public accounting.
“Our auditors used to alert us to new standards and reporting requirements, but now there’s much more pressure for us to do that ourselves and stay current,” she says.
Enter CalCPA’s Financial Leadership Forum.
“CPAs in industry need to stay current,” says Patricia Cochran, CFO for Vision Service Plan in Rancho Cordova and president of the California CPA Education Foundation board of trustees. “For the past two years, CalCPA and the Education Foundation have been talking to business and industry CPAs to better understand their needs and develop a program to meet those needs. The Financial Leadership Forum is that program.”
The Financial Leadership Forum is a special CalCPA membership group developed to enhance the support provided to CPAs and non-CPAs in the business community through tailored programs and resources that better meet their professional needs.
The Forum’s key tenets are a commitment to ethical responsibility, excellence, strategic innovation and best practices in financial and business management. Additionally, the Forum supports financial leaders and executives through powerful advocacy, thought leadership, executive education and essential resources.
“We’re interested in many areas a CPA in public practice wouldn’t be,” says Laura Weisshar, controller for Kaiser Permanente in Pasadena. “The Forum presents an excellent opportunity for CPAs, who aren’t practicing public accounting, to have the issues they want addressed and discussed.”
Building Pressure
Through surveys and interviews, California business and industry CPAs sounded off about issues that affect their businesses daily, including internal controls, leadership, mergers and acquisitions, growth and profit, cost analysis, capital investments and ethics. But that is only the tip of the iceberg.
“B&I CPAs have an ongoing commitment to being a business partner, which goes beyond just keeping the books,” says Cochran. “We really get into strategy and risk assessment, as well as being another set of eyes and ears to help move the business forward.”
Weisshar adds, “You have to be engaged with operational personnel about financial implications from borrowings to financial reporting that, quite frankly, as managers, they may not be familiar with.”
Or, notes Gatenby, “In higher education we’re confronted with financial aid issues, and loan program concerns. There’s also the pressure of disclosure and dealing with the IRS Form 990T—as well as a push at the moment to have good fraud detection programs.”
For some, the addition of rules and regulations—like SOX—has completely changed the ballgame they thought they were getting into. Alexander Georgiev, controller at CBS Studio Center, says he entered the profession because he really liked accounting and working in the corporate environment. He thinks SOX has changed that atmosphere for the worse.
“You have to wear the compliance hat more; whereas, before, you did some of that, but it wasn’t consuming. Now I’m concerned with going to jail, and that’s taken the fun out of the profession in my opinion.”
The differences in the workload SOX creates for public versus business and industry CPAs is clear.
“A public CPA is interested in evaluating how a company has responded to SOX and whether the controls are adequate,” says Weisshar. “But a controller in my position first has to wrestle with identifying where we’re lacking controls, implement the controls and then we have to monitor them to ensure they’re working—we’re more interested in the operational side, while a public CPA is more interested in the testing side.”
It’s all part of mounting pressures that include constantly changing demands being placed on business and finance professionals, and where it will stop seems unclear as the financial environment continues to change thanks to contributing factors such as international accounting standards and the general state of the economy.
“The competitive market place requires us to be more savvy and outwardly focused,” says Georgiev. “In the past, we knew that doing our internal operations well would help our business succeed. Today, you’re competing with everybody on a much bigger scale.”
Moreover—as cliché as it sounds—these growing demands of the profession have made it hard for Georgiev to find good help. “The pool of people we choose from is getting smaller and it’s getting harder to fill low-level positions,” he says. “Before, we’d throw an ad in the paper that would say ‘CBS,’ and people jumped on it, which left us with real good choices. I had to pay recruiters for my last two AP clerks, which are basic, entry-level positions.”
Addressing the Needs
“We know our members need to be able to get information quickly and efficiently,” says Cochran. “The Foundation has been overhauling its offerings to make them more relevant and to meet the needs of CPAs in business and industry.”
For example, short, informative webcasts have been delivered covering hot topics such as executive compensation, captive insurance, private equity/hedge fund convergence and securing e-mail. And in February, SEC Chief Accountant—and CalCPA member—Conrad Hewitt will present an SEC update.
In late-January, business and industry CPAs will receive a special catalog of “Financial Leadership Forum Recommends” education that will overview the Foundation’s expanded offerings.
Plus, the Forum will deliver more than just education to members. A dedicated website, www.calcpa.org/forum, will feature compelling news, a comprehensive collection of resources and an opportunity to sound off on the issues that matter most to business and industry CPAs. Moreover, for companies that employ a number of CPAs, the Forum can provide training in-house—tailored to meet their specific needs.
“The beauty of the Forum is that we’re going to meet the needs of B&I CPAs in a variety of ways,” says Cochran. “We’re offering many different touch points so people can use what’s meaningful to them.”
Planning for the Forum took place at many levels, and key to its success is its (virtual) advisory panel. Consisting of key business and industry members, and representing a wide breath and depth of job functions and businesses, the panel regularly weighed in with its opinions and experience to help ensure the Financial Leadership Forum delivers the products, services and benefits that California business and finance professionals need.
Powerful Partnerships: Executive Education and Tech Services
The Forum has partnered with the University of California, Berkeley’s Haas School of Business’ Center for Financial Reporting and Management on executive education, something for which high-level financial professionals have expressed great need. Initial offerings include a two-day workshop, Valuation For Mergers And Acquisitions, and a session on Activity-Based Costing and Management.
“With the complex and ever-changing financial environment, there’s a need for executives to be continually educated,” says Solomon Darwin, executive director at Haas’ Center for Financial Reporting and Management. “These Forum executive education courses will equip business and industry CPAs with the analytical tools they need to be current and excel at their jobs.”
In fact, he adds, “our current financial environment demands it given the high levels of specialization.”
Respecting the tremendous demands placed on business and finance professionals’ time, the Forum will leverage technology to deliver relevant webcasts to CPAs’ desks.
“Online courses are excellent for private industry CPAs,” says Weisshar. “They usually last an hour or two and are very focused. What’s more, they take place in the middle of the day, and you can use your lunchtime to accommodate it, saving you all that time of having to go offsite. So, in a fraction of the time you can get the same detailed information, presented by people who are extremely knowledgeable on the topic.”
This month’s Forum webcast is a California Economic Update featuring Beacon Economics, which will focus on the impact of California’s housing crisis on business and the economy.
“The big key is understanding that the housing crisis is nowhere near being over, in fact it’s going to get worse in 2008,” says Christopher Thornberg, principal of Beacon Economics and webinar presenter.
“In terms of accounting, this is going to cause tremendous losses and it’s unclear how it’s all going to pan out. For business and industry CPAs, when looking at business performance and understanding the bottom line, they will need to think long and hard about the numbers. Corporate bankruptcies are 35 percent higher this year than last, in large part due to businesses’ ability to borrow their way out of ineptitude. That buffer is no longer available.”
Thornberg also points out that there will be substantial changes in banking laws by the time the housing crisis shakes out. “Understanding what’s happening is important for B&I CPAs because it will help them deal with the restructuring of how banking is conducted,” he says.
CPA Connections
An unsung goal of the Forum is to link business and industry CalCPA members. A key resource of any association is its members’ knowledge, as well as a way to share that knowledge. Even though industries and day-to-day tasks might differ, business and industry CPAs often have similar concerns, and it can be of benefit to turn to peers when confronted with an issue.
“Right now my interactions with my peers come when I’m at a seminar and I get to network and meet new people,” says Weisshar. “But I’m looking for alternate ways of developing a more flexible connection with my peer group. Maybe just to reach out and ask if they’ve encountered a problem I’m going through and get their thoughts.”
The knowledge gained through the Forum’s many offering will not only position business and industry members for success in their job, but establish them as thought leaders who can influence the profession.
According to Hewitt, input of CPAs is critical to the regulatory process.
“During a release’s exposure,” says Hewitt, “we always look for comments from anybody and we want those comment letters because it’s providing us on the inside with information from the outside (users, preparers, etc.) that we don’t have access to. It’s a good investment for CPAs to spend the time giving input.”
Set up for Success
It’s not business as usual for today’s business and finance professionals as they grapple with rapidly changing demands from regulators, shareholders and employers. Whether the issues deal with executive compensation, labor laws, SOX, or anything in between, the Financial Leadership Forum tackles the unique challenges facing today’s financial professionals to create tangible solutions that help them succeed.
