Letters

Applause for JofA
I applaud your honoring the 100th anniversary of the JofA with excerpts from earlier issues. The bottom line in the letter in the January issue (“Letters,” page 11)—“the more things change, the more things stay the same”—is certainly supported by the November 1955 table of contents that ran in February (page 11).

I am sure plans for forthcoming issues are appropriate and will be of much interest to readers. Nonetheless, I would like to make a simple suggestion based on my general impressions from reading/scanning the JofA from the November 1905 issue through approximately the mid-70s at the West Virginia University’s main library: Ask some key thinkers among practitioners to identify the articles most perceptive in describing/predicting the future among the feature articles for each of the 10 decades of publication. The initial selections could be reviewed by a group of evaluators, and the best of each decade posted at an AICPA Web site or excerpted for the October 2005 issue.

There were many excellent articles that reflected serious interest in furthering the practice of public accounting. A sample of the insight of writers would be appealing! Are some predictions about 2105 a possibility?

Best wishes for much enjoyment of the JofA’s 100th anniversary!

Mary Ellen Oliverio, CPA
New York City

First JofA and Today
In a reprint of the first issue of the JofA in 1905 (“Centennial Countdown,” JofA, Jan.05, page 12) the first paragraph citing the growth of the profession and the trend toward periodic audits by CPAs noted, “Banks, trust companies and insurance companies have more recently adopted the same plan as a guarantee of security to depositors and policyholders, and the best method of protecting against fraud.”

It seems the public expectation in 1905 that audits should protect against fraud existed before most states had passed public accountancy acts. Who has the wrong expectation of audit scope? Is it the public or the profession? Maybe it is time to stop complaining that too much is expected and just find a way to deliver the service.

Joe von Bose, CPA
Corporate Manager of Accounting Operations
Six Flags Theme Parks
Grand Prairie, Texas

Cash Is Best
“Price Equals Value Plus Terms” (JofA, Dec.04, page 67) is one of the most comprehensive articles on CPA practice pricing I have ever read. However, the comment, “Low interest rates have encouraged many recent buyers to borrow the money to make a large down payment and thereby reduce the purchase price,” defies accepted wisdom.

Those who charge their purchases often pay far more than those using their own cash at closing—and so, too, have many CPAs, plied for decades with bankers’ accommodating credit.

James McKeown, CPA
Cicero, New York

Author’s reply: I agree wholeheartedly with the writer’s point regarding cash up front. The article was citing a trend, not my opinion, regarding this subject. However, your comment is based on the assumption that the buyer has the cash available without the need for an external lender, which is definitely not the case in every situation.

Also, if a buyer can reduce a multiple to, let’s say, 0.75X instead of 1X with additional cash, that may be a greater savings than the interest factor.

Joel Sinkin
J. Sinkin Consulting
Happauge, New York