CPE Must Address Reporting

Continuing professional education adds enormous value to the CPA profession—that is uncontested. However, any program must be tailored to meet the needs of the market.

Since the landscape of corporate reporting has been shifted to a more pervasive earnings management, the fundamentals of conservative financial reporting seem suspended in some companies. Thus, CPE courses at public accounting firms should incorporate effective analytical tools to address current reporting issues.

Above and beyond emphasizing new accounting pronouncements, CPA firms should equip their staffs with the skills to uncover financial shenanigans. The main financial statements are synonymous with the “checks and balances” system of the three branches of our government. If a manipulation of numbers had occurred in one statement, later statements would expose the deficiency. Financial statements should be in balance. Auditors need to be on the alert for any unreasonable relationships among the financial statements—for example, creating a relationship between net cash flow from operations and net income to determine quality of earnings.

Omar Camara, CPA
Chicago