I received a recent email complaining that I was unfair to CPAs. This email was undoubtedly prompted by my article in which I reported that the AICPA (American Institute of CPAs) had made the statement that 80% of CPAs didn’t know how to do basic real estate accounting.
My writer asked why I “dissed” on CPAs. He said that it was irresponsible and unprofessional of me to report on such news.
Well, first of all, in my defense, I just reported it. I didn’t make it up. The professional organization that most CPAs belong to is the one who uncovered the problem. In my opinion, that’s the least of the problems facing the CPA profession.
I’m sure that most people by now know about the rampant problems at Arthur Anderson and KPMG – some of the very biggest boys in the CPA world. Arthur Anderson is long since gone due to their fraudulent and misleading acts. But the harm to the investors who relied on their professional opinion still exists. All the people who were wiped out and now trying to figure out how to rebuild their financial lives have dishonest CPAs to thank for that. KPMG looks to have cut a deal that will keep them still operating – but some of their clients are facing MILLIONS in dollars of IRS penalties due to following KPMG’s downright illegal advice. Who dare I diss on CPAs? How dare they betray the public trust and demean the public view of what was once a fine profession!
Just this past month I’ve been watching on the sidelines as another potential fraud case is unwinding – again, with a CPA at the middle of it. At this point, I don’t know if fraud was committed, so I can’t say anything. But, at the very least, this CPA was looking out only for his own good and a quick way to make a buck off of someone who trusted him. I’m sure I’ll be put under a confidentiality agreement if and when this settles, so it’s just another one I have to just sit on. And I’m sure this CPA will just go on, quietly defrauding and betraying the confidence of his clients.
I didn’t go to school, take a very difficult test, earn my time to qualify for a CPA for this. I thought this was an honorable profession. I wanted to be a trusted advisor among other trusted advisors who put their client’s financial welfare first and who truly made a positive impact in others.
There are still some CPAs out there like that. In fact, in the process of interviewing new CPA referral firms, I ran into 10 firms headed by people who cared. Frederick is one of the smartest real estate CPAs I know. He handles Level 3 transactions with ease, creativity and always within the bounds of ethical professionalism. If I have a sticky real estate tax situation, I’d go to Frederick in a heartbeat. He’s a smart guy and I trust him. Another person that I tip my hat to is Beatriz. Beatriz is a Mexican-American whose story starts when she was 14 years old and had to quit school to support her pregnant mother and her brothers and sisters. Somehow from that poor beginning, she now is a top CPA consultant to small businesses. She understands what it takes to pull yourself up by the bootstraps and to make a business flourish when the resources are small. She is compassionate, tough and smart. Her life is a monument to everything a CPA should be.
Do I “diss” on some CPAs? Yep. Am I going to continue? You bet. When I see incompetency, that’s bad enough. But, when I see downright illegal acts being perpetuated on a trusting public by people who not only know better but also should posses a moral compass that tells them this is wrong…well, I am proud to always say “That’s NOT right!” I’m not going to stick my head in the sand and say all CPAs are created equal. They aren’t. Some of them can and will hurt you, if you don’t watch out. And some of them can partner with you to make you wealthier than you thought possible. The secret is not pretending they’re all great. The secret is being honest and seeing the ones that can hurt you and in only working with CPAs who are forthright and honest.