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May 1991

Small and medium-size firms cope with continuing professional education. (includes related article) (panel discussion)

by Craig, James L., Jr.

    Abstract- A panel discussion concerning the impact of continuing professional education (CPE) requirements for CPAs in small- and mid-sized firms is presented. Panel discussion participants included Martin Rosen and Co Dir of Personnel and Administration Edwin Walley, Weinick Sanders and Co Quality Review Dir Joseph N. Gladstone, and Putterman Rush and Shapiro Mgr of Quality Review Fred R. Goldstein. Walley's firm has its CPE program mapped out by a planning group made up of professionals from all levels of the practice. Gladstone's firm identifies the CPE needs of its entry-level staff, provides training to correct those deficiencies, and provides training in computer spreadsheets. Goldstein's firm helps relieve the pressure felt by the practitioners who provide training by providing them with presentation formats, using multiple presenters, and screening training material.

How does the local practitioner cope? The CPA Journal's managing editor, James L. Craig, Jr., CPA, met with representatives of six local firms to find out how they carry on CPE programs for their professional staffs. The panel consisted of Edwin Walley, CPA, Director of Personnel and Administration, Martin Rose & Co.; Joseph N. Gladstone, CPA, Quality Review Director and CPE Administrator for Weinick Sanders & Co.; Fred R. Goldstein, CPA, Manager of Quality Review, Putterman Rush & Shapiro; Alan Hogfman, CPA, Partner, Shanholt Marinoff Fleiss & Co.; Michael Furst, CPA, Partner, Shulman, Cohen & Furst; and Gerald J. Rourke, CPA, Managing Partner, Diamant, Katz, Kahn & Company.

In an accompanying sidebar, Martha Nirenblatt and Diana Casale, two professionals from Martin Rosen & Co., give their views of the CPE training offered at their firm.

The CPA Journal: Please describe how you administer the CPE function in your firm.

Edwin Walley: The main thrust for the training activities of our firm, consisting of approximately 60 professionals, comes from a CPE planning group comprised of professionals from all practice areas--audit, tax, management advisory services, quality control, and administration. The group develops what it considers an appropriate schedule for in-house courses, including dates and speakers, and identifies special needs and courses for specific professionals to attend outside, at the state society or with other qualified sponsors.

Our target is to provide everyone with a minimum of 32 hours of in- house training, annually. The balance would be obtained by attendance at outside programs. By attending courses outside, the more senior people have been known to reach the 50 or 60 hour range. Let me explain the process.

The CPE planning group meets during the summer to develop a detailed plan for the period September 1 to mid-January and decides who will teach the courses and who will attend. The program ends with our firm- wide tax seminar in mid-January, which, incidentally, this year was presented by a college professor. Exhibit 1 is an example of our course offerings for last fall. It shows the course and what group it was intended for. The managers and I will meet after April 15 to identify training needs to fill out the year. We don't usually give courses during the summer.

We utilize our state society CPE courses in areas of specialization and for industry updates, such as the annual apparel and real estate conferences.

Joseph Gladstone: Last year we sponsored an in-house, 40-hour CPE program for all staff. Approximately 20 hours covered accounting and auditing issues and 20 hours covered tax issues. Our in-house courses are generally held off-premises. It is usually mandatory for all professional staff and partners to attend the programs.

In planning the courses I rely heavily on contact with the accounting and auditing committee of my state society, of which I am a member. This provides me with materials and keeps me on top of current developments and troublesome practice areas.

One course we had last year was on the prpspects and problems of the economy. We had a banker and a credit grantor speak on the importance of understanding and using financial statements.

Normally, however, the courses are presented by our own professionals using materials we develop. Instructors personally benefit from the process of preparing for the course. The instructor usually learns more than the instructed, and I use that experience to develop specialists in desirable practice areas.

The format is usually discussion, questions and answers, and a problem to solve. Typically we begin our training at 8:30 A.M. and we don't like to go beyond three or four hours. We conduct our courses from September 1 until February 1.

The courses are agreed upon by a committee of three senior partners based on my recommendations. Each year the CPE courses change; because attendance is required of all professionals, we cannot repeat courses and satisfy the CPE requirements.

If there are individual special needs, we permit people to attend outside courses. For example, we specialize in real estate and apparel clients, so some of our people will attend the state society conferences in those areas. In addition, our tax professionals attend courses on highly specialized subjects not covered in-house. When we use outside sources, our state society usually offers the CPE training needed.

Fred Goldstein: My firm has approximately 35 professionals. CPE activities are jointly coordinated and reviewed by me and a partner of the firm to whom I report. We have a target of 40 CPE hours per year for all personnel, which we try to meet by doing approximately 70% accounting and auditing hours and 30% tax. Courses are presented when client work is at a low point. We have found that the days just prior to major holidays such as Thanksgiving are ideal. Our programs are designed for all staff levels and are designated to have practical hands-on application to our practice. For


example, this year we had a program focusing on accounting for inventories, an area important to our practice. We had two hours on lower of cost or market, two hours on LIFO, and two hours on the retail method.

Material from the courses is intended to be a practice aid used by the CPA in the field. Most CPE material is developed internally on subjects of current professional interest to our firm.

We also use guest speakers; for example, we had one speaker on the financing of imports--an important area to some of our clients.

Alan Hoffman: Our firm has about 35 professionals with a practice concentration in real estate. As such, we are very tax oriented. Training is directed to the special needs and advances of the real estate industry.

A committee of two partners and two accounting managers develops topics for our in-house programs. The committee has informal discussions throughout the year with a formal meeting in early November. Prior to that meeting, we distribute a letter to all accounting professionals asking which topics they would like at future courses, which past topics should be repeated. We then decide on the courses and the dates they will be offered.

All CPE courses are held outside the office, preferably at a hotel conference room or at a restaurant. We find that the proper setting makes the courses more enjoyable.

Each year we sponsor a one-day in-house tax program that everyone attends. We also have a four-hour update on the process of preparing manual and computerized tax returns.

Presently, all accounting professionals are required to attend all courses. However, we are discussing whether to develop more specialized courses that would require the attendance of only those professionals in areas covered by the course.

We offer all accounting professionals 40 in-house hours of CPE training per year. Where necessary, we send some people to the state society's courses or other outside courses to meet special needs.

Michael Furst: My firm consists of 13 professional staff. Basically, we have a tax and business consulting practice. Even before CPE became mandatory in our state, our firm used the courses and programs available from the state society to great advantage. In the past, 90% of our CPE has been with our state society. Recently, together with another firm, we have engaged a guest lecturer to teach in-house.

I am CPE coordinator for the firm. Partners generally decide what courses are appropriate for their needs. Other professionals make their requests through me, and if it makes sense, I authorize it. If I know someone is weak in an area, I will schedule them for a particular course.

This past year we decided to subscribe to the CPE Master series of tapes available through the AICPA. Each tape is broken into practice areas: tax, accounting and auditing, employee benefits, etc. We have a VCR in our conference room, and we gather in the evening to view the material and discuss its applicability to our practice. There is an out-of-pocket cost-savings, and by having the presentations at our convenience, lost billing is at a minimum.

Gerald Rourke: We have a slightly different situation. Our firm has offices in two states. Each state has similar but different requirements and separate reporting periods. With 14 professionals in one state and 12 in the other, reciprocal licensing by some, and a license in a third state thrown in, we developed an electronic spreadsheet rogram to make sure everyone is complying.

The foundation of our CPE program for 1990 was the videotape series Michael mentioned. The presentation was made four times each month, two in each office, and covered the material in three hours. All professionals were expected to attend one of the four sessions. Thirty- three credits were provided by attendance at these sessions. The courses were presented on weekdays, from 4 to 6 P.M., and were moderated on a rotating basis by managers and senior level staff.

The cost of the videotapes is $1,900 for the year, or about $55 per credit hour. When you consider that perhaps up to 26 professionals are taking advantage of these sessions, the cost is minimal.

Our in-house programs have been developed by staff and partners to cover new accounting requirements, for example, cash flow statements and inventory capitalization rules.

Recurring in-house courses are presented annually for tax preparation and review of changes to input forms, as well as procedures and processing requirements. Other in-house courses include software instruction and research library updates, which are presented as needed. Outside experts are brought in annually for presentations relating to pension plans and estate planning.

Self-study is also encouraged to fill down time periods throughout the year, principally with the use of audio courses that a staff person requests. In addition, we also have programs for computer training.

The in-house program provides an opportunity for more than 50 CPE credits per year.

But in spite of all these offerings, no one obtains all their CPE in- house. We require everyone to go to a tax update prior to tax season, usually in the form of an all day seminar presented on a Saturday by one of the state societies or their chapters.

On an individual level, as part of their annual performance review in July, I review each staff person's CPE record and talk about needs for the upcoming year. Each staff member has, in effect, a shot at preparing his or her own program for the year. If a recurring theme surfaces during the evaluations, we might consider sponsoring a particular course.

CPAJ: Panelists, how do you train entry level staff? Do you have separate courses for new entries?

Edwin: We have a two-day orientation course for those we hire from college: some administrative matters--time reports, health coverage--a step-by-step review of audit program areas they are likely to deal with and computer training. After that the entry level staff participate in the regular CPE program that includes an introduction to computerized tax return preparation.

Joseph: We don't have a specific orientation course like Ed's firm. But, if a need is identified, we attempt to deal with it. For example, we found that entry level staff did not know or understand the many taxes they face in their first years, such as payroll and sales taxes. So we developed an in-house program for them. We also had to give our new professionals training in preparation of computer spreadsheets we use for forecasts, projections, as well as combined and consolidated reports. The spreadsheet program is taught on an individual basis using tutorial materials.

New professionals learn our audit approach as it relates to workpaper formats, checklists, and review procedures on the job.

Michael: We have our own audit programs that the partners developed. There is no formal course to teach it. Most of our training takes place in the field or at partner review. We have a high ratio of partners to staff, and that enhances the one-on-one training.

Gerald: Training for our experienced staff is done informally. We give them our accounting manual, checklists, and a set of workpapers to study. Our quality control partner meets with them to give them an overview and answer questions. There is no CPE credit for this. On a formal basis for entry level staff, we give a course on payroll, sales taxes, and bookkeeping. This is important for the work we do; they don't get this hands-on knowledge in their college courses.

CPAJ: It is the experience of some that the key to effective training is very much dependent on the presenter. Many of the courses presented in-house by the firms around this table are done by your own staffs, some of whom I am sure are not used to, and often do not feel comfortable, with making presentations to groups. How do you assure the quality that is so important to effective training?

Alan: When we select a topic, we choose the person who is best suited to teach it. The presenter benefits by researching the topic in depth and, as a result, the firm benefits. We never had a situation where someone in our office prepared something and did not present it properly. This is because we choose the proper people and ensure that they are fully prepared.

We pay close attention to the evaluations made at the end of each course to identify effective presenters. To encourage honest and forthright comments, the evaluations are filled out anonymously, and the attendees write with the opposite hand they are accustomed to.

Joseph: You make a good point. We don't want to embarrass anyone. If someone does not have presentation skills, we usually don't ask that person to present that much. However, we think preparing and presenting a course to peers within the firm is beneficial leadership training.

If a program is not going well, I will jump in and help the presenter. The proof of the value of the program, to me, is that our staff appreciates and looks forward to the training. Normally, we have sessions every Friday during our training period. If for some reason a Friday passes without a program, the staff inquiries as to what happened.

Fred: We design some of the programs with an attendee participation format, which helps a great deal to relieve the pressure on the speaker. We also occasionally use a multiple presenter set-up to provide support between one speaker and another. Finally, we screen the material so the presenter feels confident that he or she is on the right track and is knowledgeable enough to teach the subject.

Edwin: Within the firm we have developed a cadre of speakers who I have confidence in. They often work in tandem with an inexperienced presenter. Outlines for courses must be in my hands well before the presentation. I ask staff that have a problem with a presenter to speak to me, off the record. Anonymous comments concern me. You need to know the source in order to evaluate effectively.

CPAJ: How do you get your senior people to attend the courses? Or what about the senior person that comes in for an hour in the morning and an hour at the end and expects full credit?

Edwin: Good programs must not only be informative but must also have an "entertainment value" in order to attract and hold an audience, while at the same time meeting the AICPA and state CPE requirements. I also bring in speakers, which can be risky because some are better than others. Subsequent contact with these outside speakers can lead to business opportunities.

Alan: I monitor the programs. Participants only get credit for the time they attend. As a partner, I have the authority to do this and not be questioned. We sometimes serve a meal after the program, and this acts as an inducement to attend.

Joseph: It takes the signature of two partners, one of whom is an executive partner, to excuse someone who is scheduled to attend.

CPAJ: What outside sources of CPE training do you use?

Fred: We encourage our staff to attend state society chapter meetings, have dinner, socialize with other CPAs and get an hour or so of CPE. Key partners or personnel with special expertise may also attend courses outside to see what the rest of the world is doing in a specific area.

Recently, we felt the need to expand the overall computer literacy of the staff. We allowed several people to attend state society sponsored spreadsheet and DOS courses to learn and bring their knowledge back to the firm.

Alan: I'm involved with the real estate committee of my state society. That committee sponsors an annual conference in which many hours of volunteer time go to bringing in the most current topics by the most knowledgeable people. Because of our concentration in real estate, four or five of my people will attend that conference. State society conferences are a great source of knowledge and expertise. Members of our firm attend as many conferences as possible.

Gerald: We have a policy that any of our staff can take any state society or other outside course as long as it is given in the evening or on Saturday. This is an open invitation. In addition, if any partner identifies a particular need, we will suggest that the person take an outside course, in the evening or a full day program.

The whole idea of going outside is to bring something back to the firm: new ideas, practical insights, and a renewed enthusiasm. A particularly good program is the series of study conferences put on by the state society. Our partners find the conferences to be very helpful as an update in many subject areas and current tax topics. And, it's on a summer weekend, therefore, lost billable time is kept to a minimum.

Edwin: The industry conferences of the kind presented by state societies and the AICPA are especially important where CPAs can see and hear the "experts" and find out what the rest of the world is doing.

The specialized state society courses are important to bring staffers up to date in practice areas that may unexpectedly be opened to us or in which we just feel there is a need for more knowledge.

CPAJ: The firms represented seem to rely in large measure on in-house presentations to meet the regulatory CPE requirements. Why?

Joseph: We want our CPE programs to directly relate to our practices and to increase the ability of the staff to perform. In-house training fills a substantial portion of that requirement. Cost, without doubt, is also an important factor in the firm's decision to present in-house programs.

Alan: At the point that mandatory CPE came to our state, most of our training was done outside. We were somewhat at the mercy of outside forces as to when and for how long courses were offered. We turned to in-house programs to provide greater flexibility, and to attempt to reduce the cost of CPE. Our courses generally run from 3 to 7 P.M. We lose minimal billable time, and the cost of running the course, even with a meal thrown in, is less than what it would cost in fees for an all-day program from an outside source. The negative aspect is the working hours that go into preparing the course. But the process of the discussion leader learning the material has a long-term, albeit intangible, benefit to the firm.

CPAJ: What problems do you encounter in the CPE area?

Edwin: In my view, the secret to success is to develop a cadre of presenters. Subjects are relatively easy to come up with. Developing speakers is harder. The staff needs to know this is serious business and that it is important to their career success to participate to the extent their skills allow. I bring them along slowly, first in front of smaller groups and then in a team approach. And you cannot tolerate unprepared speakers.

The firm has to clearly let the presenters know that instructing is part of the requirements in a successful career path. Participation in the training program should be rewarded.

Joseph: Sometimes we have problems locating speakers. If you draft someone who really does not feel comfortable presenting a course, he or she may come forward with an excuse at the last minute as to why he or she cannot do the program.

When it comes to topics, I keep my eyes and ears open to what the state society is doing, what other sponsors are doing, and what is happening in the industries in which our firm practices.

Fred: Because we present most of our training to the full staff-- partners to assistants--it is sometimes difficult to get topics that will benefit the whole office. So we include items in the program that benefit everyone, not for every minute, but at least at most times throughout the program.

Alan: Getting speakers is the problem. The busiest people usually are the best speakers. They are quite willing to teach at first. However, after the fourth program, they may say they don't want to do it any more.

Michael: A major consideration is cost. Outside sponsors can help by offering more courses at night and on weekends. Also, I would like the AICPA to consider stepping aside in those states that have their own requirements. Differing requirements tend to exponentially add confusion and difficulty.

Gerald: The videotape series was the mainstay of our program for 1990. However, it has its drawbacks. Much of the material is very technical and goes right over the heads of some of our people, or just does not apply to our practice. We do not use all the material on the tapes. We intend to explore other options for 1991. Recommendations addressed in our clean opinion quality review last year may act as the focus for developing programs.

As may be apparent from our approach, we support and recognize the value in educating our professionals. The balance between cost and quality can be maintained if the program is monitored and the professionals are willing to contribute and participate.

CPAJ: Do you allow client personnel seeking to maintian their CPE requirements to attend your in-house courses?

Edwin: We frown upon it. One of the benefits of in-house training is that we talk about problems in our own office, specific client situations, and about both weaknesses and strengths. Outsiders alter the tone of the discussions and they are generally less productive. Also, staff might be reluctant to ask a question fearing to show a lack of understanding in the eyes of the client's controller who may be in the room.

Alan: I do not agree. I don't think controllers at our CPE meetings are going to find out anything they don't already know from talking to our staff in their offices. We invite former employees and other accountants/CPAs of our clients to attend. A rapport is developed and relationships are strengthened. There are positives that outweigh the negatives.

Joseph: We feel that for some sessions, such as training on our audit approach and procedures, it is not appropriate for client personnel to attend. For tax updates, we do not specifically invite clients; but if they hear about it and have an interest they are welcome. We do sponsor special programs for clients. For example, we invited all our clients to attend a program on estates and trusts, which we held at a hotel. This wasn't for CPE credit; it was for client relations.

Gerald: It would be inappropriate for clients to attend the courses we present. They are just too internally directed and technical to be of any benefit to them.

Fred: Occasionally, one or two people from our clients' staffs will attend our courses. It may help them meet their CPE need, and we are not overly concerned that they will learn any audit secrets.

CPAJ: We haven't spoken about the recordkeeping Are there problems in that area?

Edwin: We have a computerized system that produces "statements" for each professional, which we periodically distribute to them to confirm the accuracy of our records. We use the state's year end for both AICPA and state reporting purposes.

Fred: We have a manual recordkeeping system tailored to the state requirements. If someone is lacking CPE credits, we have them catch up using state society sponsored CPE programs.

Michael: I keep a log book for each CPA, with a folder where I accumulate the various support documentation of the courses taken.

Gerald: On the electronic spreadsheet file I mentioned earlier, information is compiled by state and provides for overlap as a result of the different compliance periods in each state. One state requires specific identification of the subject matter of the courses, i.e., audit and tax. Of course, then there are the AICPA requirements to contend with and a third reporting period. I share Michael's concern about the multiplicity of requirements. The AICPA should attempt to nationalize the requirements and conform reporting periods to minimize the burden on firms.

CPAJ: Thank you for participating in this disccusion. To summarize, medium-sized CPA firms are doing a substantial portion of their own training. They turn to the state society and other outside sources for highly technical subjects, immediate, short-term needs, training of instructors, and industry developments. Smaller firms still look to outside sponsors for the bulk of the programs, but are, for cost and convenience, beginning to conduct courses (including video and self- study) in-house. Firms should not overlook courses available at some state societies, which may be brought in-house at a discount with a number of options available. the society will provide the materials, the presenter, and, if necessary, the sponsor number.

CPAs should also consider satisfying mandated requirements by writing articles for publication. Many states and the AICPA allow credit for the time spent writing, up to a certain percentage of the annual CPE requirement.

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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