What Does an Accountant Really Do?
I’m not sure who Chloe Dowley is or Chloe’s level of expertise, but I do know that she has written some articles that were published on Yahoo’s Education pages. I became aware of Chloe when an article she had written for Yahoo! Education – here’s the link http://education.yahoo.net/degrees/articles/featured_8_careers_to_help_lower_your_stress_meter.html was forwarded to me by someone who like me is an accountant. This other accountant was awe struck by the content and wanted to get my opinion. The title of the article is: “Need a Less Stressful Career? Here are Eight Secrets to Work Zen”.
Cool – work zen sounds good. Right?
Chloe goes on to explain that one must understand the enemy [I assume she is referring to the readers current job] and she describes a nail biting stressed out employee who is sitting in front of his computer at 11 p.m. at night trying to meet a work deadline. But no fear, Chloe has an answer for how to fight off this terrible enemy – train for a new – less stressful career. And what job do you suppose was her top pick for eliminating those late night nail biting scenarios? You guessed it – why not be an accountant…and better yet…why not earn that accounting degree on line.
Yikees – is she kidding?
I can only assume that Chloe is not now, and never has been, an accountant. And I am dying to find out her source, her research, or well – just anything to support her conclusion. But before I chastise Chloe any further, I must admit that the apparent [or alleged] ignorance displayed by Chloe and Yahoo Education tends to be somewhat typical of many people who are not accountants. In fact, it’s almost a pathetic cliché. Many people believe [and apparently Chloe included – and I’m paraphrasing here] that an accountant who is “well-organized” and who has a knack for numbers and who can balance a profit and loss sheet, can enjoy a restful escape from the stresses of deadlines and negative office politics.
Oh – M’ – God – again, I have to ask – is she kidding?
Chloe – Chloe – Chloe – in the industry [the accounting industry] this particular brand of ignorance is commonly known as the “expectation gap”. In other words, this gap represents the difference between the realities of an accountant’s job and what non-accountants perceive is the accountant’s job.
Really. What I think Chloe is alluding to in her article – is a low stress – accounting related job – such as a bookkeeper or maybe even an accounting clerk [neither job which requires college degrees]. But Chloe, there is a world of difference between those types of jobs and the job of a college educated accountant.
Let me pose a couple of obvious questions. This one is easy – What is one of the most powerful tools that an investor, banker, or manager can use to make investment and/or strategic decisions about a company? That’s right – the company’s financial information. And where does that financial information come from? Right again – the accountants. And here is where it gets sticky for a lot of people – and this is related to job functions – the bookkeepers are the people who organize the accounting information and record the numbers on the financial statements. But the accountant is the person who analyzes those numbers and then forms conclusions based on those numbers – calculating and balancing the numbers and dropping them into an accounting program is but a tiny step in the path to the final product.
Also, here is something else to think about…..accountants have a lot more influence in the average person’s day to day life than you might think. Just about everything that you can see or touch involved an accountant at some point – someone who analyzed or calculated something related to every aspect of every product that you buy. And a bad accountant can cause serious harm to a company– ummm, need some evidence – ever heard of WorldCom or Enron?
Now let’s talk about the principles that govern the rules of accounting [I’m not talking about writing checks or making deposits and then posting those transactions to an accounting software system…Noooo. I’m talking about understanding the rules of accounting and working in the capacity of a college educated “Accountant”.] The principles to which I am referring are known as the Generally Accepted Accounting Principles. These accounting principles are governed by a hierarchy of rules that include the following:
Financial Accounting Standards or FASB statements
FASB Interpretations
APB Opinions
Accounting Research Bulletins (ARB)
FASB Technical Bulletins
AICPA industry Audit and Accounting Guides
AICPA Statements of Position
Consensus Positions of the Emerging Issues Task Force
SEC and FASB Staff Positions
AICPA AcSEC Practice Bulletins
AICPA Accounting Interpretations
FASB Implementation Guides
FASB Staff Positions
FASB Concepts Statements
APB Statements
AICPA Issues Papers
International Accounting Standards Committee Statements
GASB Statements, Interpretations, and Technical Bulletins
Pronouncements of other professional associations and regulatory bodies
AICPA Technical Practice Aids
Accounting Textbooks
Accounting Handbooks
and articles
[and don’t get me started on the tens of thousands of tax laws]
I have to tell you, mastering these rules is often an arduous process that takes many years. And if you are afraid of a 60+ hour work week – then my advice is to stay away from the accounting degree – on line or not. I don’t think I can say this enough – accounting is much more involved than entering numbers into a financial statement. The information that an accountant produces is more than just a balanced profit and loss statement. It involves critical thinking, professional judgment, it requires exceptional interpersonal skills, it’s a constant leaning process that requires a significant commitment to the career, and usually more than a mere forty hour work week.
Sadly, the accounting industry of late, appears to be overrun by people who have adopted the Chloe attitude assuming that the job of an accountant is a stress free 9 to 5 job [ and not a career] full of work Zen. These same people seem to have learned little if any technical skills from the colleges that they attended and frankly may be damaging the accounting industry. Seasoned accountants are continually complaining about the quality of the recently graduated accountants that are hovering around the job scene.
Accounting is a challenging and rewarding career choice that provides opportunities to grow professionally while also providing some flexibility. But accounting is NOT for the faint of heart nor is it for anyone looking for a stress free job. Because let’s face it – accounting is not stress free – and anyone who tells you that it is – is not being honest with you – or is not a true accountant.
The job is layered with daily, weekly, monthly, quarterly, and yearly deadlines imposed by regulatory bodies, creditors, investors and company management. It requires the knowledge of hundreds and thousands of different rules and even laws.
So Chloe, before you entice people to the career with promises of work Zen and a restful escape, please consider that you are promoting an environment that causes frustration and anxiety for the seasoned accountants who understand the job requirements and who are prepared to make the proper commitment to the career.
Bizarre Class Action Lawsuit Settlement Offer
The economics of some class action lawsuits just don’t make sense!
If you live in California and you have had an eye exam at LensCrafters and also purchased eye glasses or contacts on the same day, you might be eligible to participate in a “Class Action” lawsuit that alleges wrong doing by LensCrafters.
Last week I received a post card sized letter entitled “Claim Form” notifying me that I qualified as a Class Member under one of the two Settlement Classes. In the interest of understanding the allegations which are the basis for the litigation, I diligently read over the fine print included with the Claim Form.
You should never sign a document without first understanding what it is that you are signing. If you receive a Claim Form, I encourage you to read over the terms before you blindly accept any offer.
The terms of the settlement as described in the Claim compelled me to write the following letter in response to the absurdity of the offer.
April 29, 2008
Clerk of the Court
Superior Court of California
County of San Francisco
Civic Center Courthouse
400 McAllister Street
San Francisco, CA 94102
RE: Snow et al. v. LensCrafters, et al., Case No. CGC-02-405544 (San Francisco Superior Court)
Dear Judge Kramer:
I am a member of the Settlement Class and in receipt of a Claim Form [claim#:LCS-10271317-0-01 0083147] for the above entitled class action (the “Action”).
In my capacity as a Certified Public Accountant and a business advisor, I must object to the proposed settlement as described in the “FULL NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION. Snow et al. v. LensCrafters et al., CGC-02-405544 (San Francisco Superior Court).”
If I was consulting on behalf of the Defendants in this litigation, I would be turning cartwheels followed by the Snoopy Dance if the cash and “Vouchers” that are proposed in the Settlement are approved by the court as a fair offer.
The offer describes two levels of Class Members who are eligible to benefit from the Action if the Member completes and returns a Claim Form. Class 1 [one] Members are entitled to a cash payment of $30 or a $75 Voucher [defined later]. Class 2 [two] Members are entitled to a $40 Voucher. If less than 50% of Class 1 Members return the Claim Forms then Class 1 Members will receive an enhancement of an additional $25 Voucher.
The Vouchers as described in the offer are restricted to any product or service offered by either EYEXAM or LensCrafters and will expire within one year. Based on this restriction, the use of the Vouchers by the Class Members will likely stimulate sales and increase “cross sell” opportunities for the Defendants similar to the way that customer rebates or coupons create competitive pricing perception and other competitive advantages since these Vouchers will bring customers into the Defendants establishments by providing instant rebates at the time services are rendered or product is purchased.
Studies have shown that retailers that offer coupons [or rebates] often see sales increase even though a relatively small amount of coupons that are issued are actually redeemed. A 2003 NCH Marketing report which is cited in The Coupon Report A study of Coupon Discount Methods March 2004 by researchers at Cornell University found that of the 248 billion coupons issued by U.S. businesses in 2002 only approximately 3.8 billion were actually redeemed [approximately 1.25%]. The reasons for this low redemption rate varied from the age of the respondents to the household income of the respondents.
Based on the facts as presented, it is clear that the proposed settlement agreement provides a win win for the Defendants since it is highly unlikely that all of the Vouchers will be redeemed by the affected Class Members. Marketing research also shows that the Class Members who redeem the Vouchers are likely to spend amounts in excess of the settlement received on the Defendants products and services.
The proposed settlement will pay attorneys’ fees up to $4,000,000, and court costs up to $225,000 to Class Counsel; and will pay $5,000 to each of the two Class Representatives. Defendants will pay for the costs of notice and settlement administration. Again a win win for the attorneys who will be receiving a significant amount and the two Class Representatives since they are being paid in cash and not in Vouchers.
Vouchers are an unfair settlement offer since they restrict the Class Members right to use the settlement proceeds to redeem services from a company that the Class Member feels deserves his or her patronage. It prevents the ability to comparison shop. My personal vision insurance coverage allows for eye glasses every two years. The Voucher creates a use it or lose it scenario which may conflict with vision coverage since the Vouchers may expire before Class Members are eligible under their Health Plan to seek eye care.
But with all of that said class action lawsuits such as this one are riddled with moral dilemma. As a Class Member, I find myself struggling with how I should approach my right to this claim.
Although the Defendants deny that they have committed any violation of law or engaged in any of the wrongful acts alleged in the complaint filed in the Action, my twenty five years of experience in business [twelve of which have been in public accounting] helps me to recognize some important facts about business and its management. In my expert opinion, business managers who violate laws or who conduct business in an inappropriate manner are usually found to have some common traits. They tend to be grossly incompetent and or management lacks integrity. It could also be argued that companies that violate laws either did not seek out competent advice or just plain ignored the advice that was given. This underlying principal questions the competency of the continuing services that may be provided by the Defendants.
In my mind and I suspect in the mind of many “non lawyers” I look at this litigation and I ponder about my moral obligation to consider whether I deserve to benefit from this Action. I suppose I can choose to believe that the Defendant is guilty of the allegations or at least some sort of wrong doing which justifies my right to receive a settlement – that is I have a right to receive something from the Defendant beyond my right as a “Class Member” which is based on the mere operation of law [i.e. the company is completely innocent and only makes the settlement offer as a means to get rid of a meritless lawsuit – in which case I do not wish to participate].
I suppose it could be argued that some businesses need the deterrent of litigation to help them keep the public’s interest ahead of their profit goals, but I can’t help to think that there must be a better solution.
I recognize that my argument is logic based and not necessarily applicable in terms of the operation of the law. But in my opinion it warrants consideration.
By allowing any part of the settlement to be paid in the form of a Voucher, the court is forcing the Class Members to conduct business with a potentially incompetent company or at the very least a company that lacks integrity because if the assumption is wrong, I must then assume that the litigation is meritless and the Class Members shouldn’t be getting anything at all. The Voucher concept is if anything a moral “lose lose” for the Class Members.
The dollar amount offered to the Class 1 Members is arguably an insignificant amount relative to the individual Member. The Settlement offer appears to unduly favor the Defendant and the attorneys, but lacks fairness in terms of the customers who were allegedly harmed by the actions of the Defendants.
In the interest of fairness and in the public’s interest, I propose that the settlement offer state that the Defendants will make a charitable contribution on behalf of the Class Members in an amount comparable to the cash and Vouchers that are being offered in the Proposed Settlement unless the Class Member at his or her option elects to receive the cash or Voucher applicable to their Settlement Class. The Defendant should not benefit from Class Members who do not respond to the Claim, but should allocate the funds that would have been necessary to pay non responding Class Members or honor Vouchers to charity. This Settlement Proposal provides benefit to the public, removes the moral dilemma of the Class Members, and provides an appropriate deterrent for other companies who might violate the law.
I urge the Court to reject the proposed settlement in its current form and opt for a settlement that better serves the public’s interest. Otherwise the court should simply dismiss the lawsuit in its entirety. Any other conclusion simply defies logic and seems to enrich everyone except the Class Members.
Thank you for your consideration in this matter.
Very truly yours,
Stacie Clifford Kitts, CPA
CC: Matthew D. David
Walkup, Melodia, Kelly & Schoenberger
650 California Street, 26th Floor
San Francisco, CA 94108
Lori A. Schechter
Morrison & Foerster LLP
425 Market Street
San Francisco, CA 94105
