September 2012: Face to Face

Western

Thomas Reichert CPA, Shareholder
Brady Martz & Associates, P. C.
Dickinson

Number of Employees: 160
Years with Company: 3

What has been the greatest impact of Sarbanes-Oxley?

Sarbanes – Oxley legislation was primarily enacted to address questionable accounting practices and audit failures like that of Enron and other publically traded companies. The resulting voluminous accounting standards have forced even the smallest privately held companies to adopt much more complex and conservative accounting. This has added a substantial burden for both the small business owner as well as the accounting practices that serve these smaller non –publically traded companies.

Most common mistake by business owners in accounting practices?

The failure to recruit the best and the brightest individuals to staff their practices. As a result of the incredible volume and complexity in both accounting and auditing standards, as well as new tax legislation, outstanding practices need to have the best staff possible. This is a huge recruiting challenge, requiring a much higher level of incentives to attract the best candidates to smaller practices in more rural settings.

Central

Carl Kvanvig, Managing Partner/CEO
Capital Accounting
Bismarck

Number of Employees: 7
Years with Company: 12

What has been the greatest impact of Sarbanes-Oxley?

This case has primarily affected public entities. The main affect is management’s accountability for financial reports as evidenced by their signatures for financial statements created for their business. For non public companies, requirements have become a little stricter in relation to CPA services provided.

Most common mistake by business owners in accounting practices?

A few accounting mistakes business owners make are: Expensing fixed asset purchases, mixing personal expenses with business expenses, choosing the proper entity for their business, or not handling the mixture of personal and business use of personal vehicles properly. A contributing factor to inadequate accounting records is the proper set up of their accounting software and, in some cases, not having knowledgeable staff maintaining their records.

Eastern

Jerry Topp, Managing Partner/CEO
Eide Bailly, LLP
Fargo

Number of Employees: 1,200
Years with Company: 34

What has been the greatest impact of Sarbanes-Oxley?

I believe internal controls have improved at large and medium-sized public companies, especially those that are required to have auditors provide an opinion on their internal controls over financial reporting. Whether or not that has impacted market values is questionable, but nonetheless, if management and audit committees are taking internal control more seriously, that is a positive. Whether the benefit of accomplishing that exceeds the costs is certainly debatable.

Most common mistake by business owners in accounting practices?

I believe a common mistake would be not providing the proper training to develop talented individuals into leaders early in their careers, which allows for the succession of ownership. This is important for all CPA firms, no matter what their size. Smaller CPA firms sometimes look at “merging up” because they don’t have the needed training and leadership programs to make this happen.

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