SIGN OF THE TIMES

A s family members from New Orleans settled safely into his Houston home, CPA Richard Forrest was approached by a friend who wasn’t so lucky; he had lost touch with his 80-year-old parents as Hurricane Katrina battered the city. So like any good neighbor, Forrest fueled up his Robinson R-44 helicopter and set off to find them.

“The place was a ghost town,” Forrest told the JofA , “but we found the street, loaded them up, left several cases of water in a nearby playground for other survivors and flew out.”

Back home, though, Forrest just didn’t feel right sitting around and letting the R-44 go to waste. So he climbed back into the helicopter and took off for the floodplains again.

“I can’t really say how many trips I made over the next few days,” Forrest said. “My last day I was there with the New Mexico National Guard and officers and SWAT teams from all over the country. I went with EquaSearch—the group that looked for the Holloway girl in Aruba—to do house-to-house searches.”

His last night in New Orleans, Forrest was chatting on an Internet blog site with some locals who had declined to evacuate and now found themselves with no potable water. He told them about the cases he had left nearby, and they hurried to retrieve them—one last little miracle before he flew home to his day job at Gainer, Donnelly & Desroches LLP.

—Cheryl Rosen

NUMEROLOGY

When asked what they would do if money was no object and they had young children,

53% of executives said they would continue to work, but at a reduced load.

39% said they would devote themselves full-time to the family, opting to become stay-at-home parents.

9% said they’d continue working full-time.

Note: Figures don’t add to 100% due to rounding.

Source: TheLadders, www.theladders.com .

Top Ten

Golf Digest picks the country’s best links.

1. Pine Valley
Pine Valley, N.J.

2. Augusta National
Augusta, Ga.

3. Shinnecock Hills
Southampton, N.Y.

4. Cypress Point Club
Pebble Beach, Calif.

5. Oakmont Country Club
Oakmont, Pa.

6. Pebble Beach Golf Links
Pebble Beach, Calif.

7. Merion
Ardmore, Pa.

8. Winged Foot
Mamaroneck, N.Y.

9. National Golf Links of America
Southampton, N.Y.

10. Seminole
Juno Beach, Fla.

Source: Golf Digest, www.golfdigest.com , May 2005.

SURVEY SAVVY

T he number of U.S. households with more than $1 million in net worth (excluding the primary residence) has increased for the third consecutive year. Surprisingly the rise was fueled neither by real estate investments nor stock market growth but, instead, by the householders’ long-term accumulation of wealth.

There were 8.9 millionaires in 2005, up 9% from 2004 (8.2 million) and up 43% from 2003 (6.2 million).

Source: TNS Financial Services, www.tns-global.com .

ON THE RECORD

Patricia McConnell, CPA, senior managing director,
Bear Stearns & Co., New York, speaking at the
AICPA Business & Industry Financial Executive Forum,
October 27, 2005.

“ Section 404 of Sarbanes-Oxley really has no teeth itself. The bite, if a company is noncompliant, is the market reaction caused by the disclosure of noncompliance. In my view the markets have acted very generously to companies that were noncompliant, basically taking a ‘give them time’ attitude. It remains to be seen how patient investors will be. ”

“ Of all of the provisions in the Sarbanes-Oxley Act, section 404 is the one with the highest likelihood of making real and lasting improvements to earnings quality. Good internal controls are by far the best safeguard against the kind of earnings manipulation we saw at Enron, WorldCom and others. However, even section 404 compliant controls are not 100% scoundrel proof. If management is without integrity, they will find a way to beat any system. ”

“ I am very enthusiastic and optimistic about international convergence. I believe that it is well within reach…. For the capital markets to function with high efficiency and provide companies with capital at the lowest cost, not only must there be one set of high-quality transparent global financial reporting standards, but management, auditors and regulators must see to it that these standards are interpreted and applied consistently and with integrity in all jurisdictions. ”

HOME FRONT

Redoing your home can be exciting, but it also takes careful planning. Here’s some advice to keep you on track.

Organize. Keep copies of all contracts, change orders, invoices, receipts and permits in a three-ring binder or expandable file folder, so all your important documents and good ideas are in one safe place.

Play designer. Since you live in your house day after day, you’ll often have better ideas than the pros. Get out a pencil, make 50 copies of your current floor plan and sketch out all the alternatives.

Don’t get too wild and crazy. Stick with a traditional size and shape for your home—to increase its resale value and hold down the cost of your remodeling.

Be a do-it-yourselfer. Have contractors itemize their quotes so you can determine which phases of the project you can handle yourself and which ones you need someone else to take care of. Consider doing the demolition and finish work yourself.

Source: Adapted from Remodel or Move? Make the Right Decision by Dan Fritschen, ABCD Publishing LLC, 2005.

ON THE RECORD

On the difficulty of developing international standards:

“ We are under enormous pressure from all sides. I rarely address an audience that isn’t at least 50% hostile. Whatever we do, half the world wants it and half the world hates it. ”

—Tom Jones, vice-chairman, International Accounting Standards Board

TOP TEN

The most important factors in growing and retaining leaders over the next 10 years will be

1. A formal leadership development strategy.
2. The support of top management.
3. A formal succession planning process.
4. Recognizing that leaders must develop other leaders.
5. A big enough budget.
6. Measuring the effectiveness of leadership development programs.
7. Providing developmental job assignments.
8. Internal training.
9. Policies that encourage leadership development.
10. Formal appraisal of managers for their development of future leaders.

Source: “Leading into the Future: A Global Study of Leadership,” American Management Association, Sept. 2005.

GOLDEN BUSINESS IDEAS

After a company has invested in training them, many employees leave for better-paying jobs. In some respects, employers create the problem when they place more emphasis on hiring candidates based on their skills rather than on their history of loyalty. A history of frequent job-switching is likely to be a pattern for the future.

Don’t be lulled into thinking that talented workers will stay just because of a pay increase, reasonable opportunities for advancement and a good work environment. All a competitor has to do is raise the stakes and many employees will quickly switch loyalties.

What does it take to develop real loyalty in employees? Make them feel more like owners by letting them share in the profits. It’s important to give employees a sense that they’re sharing in their contributions to the business.

Ask trainees whether they would rather attend group classes, have one-on-one sessions or do self-training with audio tapes or manuals. Most people have a sense of what method of learning works best for them.

If employees prefer group training, don’t put them all in one large class. Instead, contract for customized training for smaller groups. The extra cost is worth it.

Avoid multiday or even daylong training sessions; trainees can absorb just so much. Consider early morning sessions for minimal work-schedule disruption.

Recruit employees who grasp the technology quickly to help coach the others.

—Stanley Zarowin

The Ultimate Accountants’ Reference: Including GAAP, IRS & SEC Regulations, Leases, and More

By Steven M. Bragg
774 pages; hardcover
John Wiley; Hoboken, N.J. 2004

I n this one-volume desk reference, CPAs can find concise answers to important issues that arise during a typical business day.