This is off-topic somewhat, but still highly relevant to the CPA exam. I have been reading (actually an audio book) “Conspiracy of Fools” by Kurt Eichenwald, which gives readers an inside view of what exactly happened at Enron.
I'm halfway through the book (I listen to it at work when I have some spreadsheet maintenance or other brainless tasks to do) and even though I already know what happens and I've already seen the movie “Enron: The Smartest Guys in the Room“, I'm still shocked that Arthur Andersen and the Board of Directors didn't stop Jeff Skilling or Andy Fastow from doing what they did.
For the uninitiated into Enron, the things that Enron CFO Andy Fastow did will blow your mind. In the era of Sarbanes-Oxley, it seems like fantasy to think that such a thing could happen, but the book takes you back to pre-Sarbanes where the term “post-Enron” doesn't yet exist.
In short, Enron used mark-to-market accounting in their dealings which should have been a HUGE no-no. They also formed all sorts of limited partnerships and dumped debt out of Enron's books in a string of countless transactions that weren't at arm's-length.
If you have a chance to pick up the book – it's great. If you have never seen “Enron: The Smartest Guys in the Room”, you HAVE to watch it as a CPA candidate. It's very interesting – and very sad (think of the tens of thousands of people who lost their 401(k) and their retirements at Enron).
If you are a Netflix subscriber, you can go online and watch the movie for free. Your local video store should have it too. I've seen it three times now and I still find myself baffled that such a thing was allowed to happen each time I watch it.
me and you have so many similarities it is crazy. I have the almost exact same circumstances as you. Family, full-time job and I have started my own tax service and bookkeeping business. Been out of school seven years as well. The Enron thing took the cake though. While studying for Audit I began thinking about Enron, and became fascinated by what happened and how they did it. Spent several hours on the internet researching and reading all about the case. I even wanted to buy some Enron penny stock just to have. (I know that is weird) I read your blog alot and keep on trucking for your CPA, just know you are not the only one out there.
It's great to hear that you've started your own business...that's awesome.
I may do the same thing someday. I worked in public accounting for two years doing client write-up and taxes and have considered doing the same thing on my own. The only thing that scares me is the liability if you mess something up and cost a client money due to tax penalties.
Learning the nuances of the CPA exam is one thing...knowing the exceptions to the exceptions in the real world is another and without a seasoned veteran on my team, that scares me a little.
I love doing client bookkeeping and interacting with small businesses...that was my favorite thing about public accounting. I had about 15 clients...a lot of sole proprietorships and S-corps.
I also thought about owning some of Enron's penny stocks at one point...that's funny.
Keep me posted on your business and exam progress.
another71
took audit today. How fun that was. MC was not that bad, simulations were nothing but transaction cycles. Not the greatest but oh well. Anyway got "Smartest Guys in the Room," watched it when I got home from audit and thought it was awesome. Just unbelievable what they did. Do you agree with the movie and think all of the top-level executives were involved? I have a website for my new business, you can check it out sometime www.hurley-company.com
I would highly recommend: Extraordinary Circumstances: The Journey of a Corporate Whistleblower by Cynthia Cooper.
I would highly recommend: Extraordinary Circumstances: The Journey of a Corporate Whistleblower by Cynthia Cooper.