Time To Think Differently

Ernie Almonte, the 2008 – 2009 AICPA board chairman, believes that thinking and acting differently is critical to success in our rapidly changing world. As Almonte begins his one-year term, he is stressing the importance of the profession remaining open to shifting perspectives and different voices. Almonte brings to the chairman’s role his own varied history. He is a martial arts aficionado and a voracious reader. He studied accounting at the urging of his father, an Italian immigrant who ran an ice cream distribution business in his adopted state of Rhode Island. Almonte launched his own accounting firm in Rhode Island and went on to become the state’s auditor general.

His term begins Oct. 21 against a backdrop of economic uncertainty. Over the coming year, the profession is expected to face major issues, such as movement toward the acceptance of IFRS. At the same time, the AICPA is addressing issues including recruiting, succession planning and mobility provisions. While advocating for members on those issues, Almonte also brings to the chairman’s office the goal of developing a diverse group of future leaders through a targeted coaching and mentoring effort.

“I know we can accomplish great things,” he says of the year ahead.

As Rhode Island’s appointed auditor general, he oversees the single audit of the state, which includes the state’s financial statements with revenues of nearly $7 billion, and assesses compliance for federal grant programs totaling nearly $3 billion. He’s responsible for municipal oversight, performance audits, fraud audits and oversight of quasi-public agencies. “I’m very proud to be the first chairman of the AICPA to come from the government sector. I want people to be aware of the critical role that CPAs serve in government,” he says. “That role is no less challenging compared to those serving the business community, and we’re really no different from other CPAs.” Almonte also sees his role as the AICPA’s first government chairman as evidence that the Institute is committed to approaching challenges from the broadest possible perspective.

A WILLING ADVOCATE
As AICPA chairman, Almonte will champion several key ongoing Institute efforts. “One is getting enough new accountants into the profession,” he says. The AICPA will build on the successes of the “Start Here. Go Places.” effort, which aims to interest high school and college students in accounting careers.

At the same time, he says, the Institute is addressing the shortage of Ph.D.s in accounting education by helping to lead an effort to raise money to fund scholarships for Ph.D. candidates studying auditing and tax. The AICPA Foundation is administering Accounting Doctoral Scholars, a program announced in July that is bringing the largest accounting firms together around the goal of reversing the shortage of Ph.D. accounting faculty at colleges and universities. The country’s biggest firms and several state CPA societies have committed more than $15 million to the program so far.

Almonte says the institute must continue to address a pipeline issue of a different sort-succession planning. The aging of the baby boomers is affecting all segments of the profession. “In our office, and it’s the same in many firms, in the next five years we’ll probably lose about 20% of our senior staff,” he says. In June, the AICPA launched the Succession Planning Resource Center to help small and medium firms, which can be particularly vulnerable to the loss of a leader, prepare for major transitions.

The AICPA will continue to seek passage of mobility legislation state by state that would allow CPAs to do business across state lines without getting an additional license in the state where they will be serving a client.

During his term, certain large public companies are likely to begin preparing for the early use of IFRS. The early adopters would be part of an SEC proposal to track progress on a series of milestones and decide in 2011 whether to mandate the use of IFRS by U.S. public companies beginning in 2014.

“I see the AICPA as being a key resource in helping our more than 350,000 members understand International Financial Reporting Standards, make them easy to implement, less complex, and raise the quality of both the preparation of the financial statements and the audits of the financial statements,” Almonte says.

The AICPA must also play a role, he says, in ensuring the public understands what the potential shift to international standards means and how they can read financial statements prepared using IFRS and use those statements to make financial decisions. The Institute launched the Web site www.ifrs.com this spring to provide IFRS news, articles, videos and information about courses, conferences and publications.

The coming year will also bring increased efforts to meet the needs of members in business and industry the largest single segment of AICPA membership. “We’ll be focused on increasing the AICPA’s value to members in business and industry, improving their skill set, and ultimately making them more valuable to their organizations,” Almonte says.

BUILDING LEADERS
In addition to championing the Institute’s overarching goals, Almonte, like previous AICPA chairs, is bringing a personal passion to the table during his term equipping emerging CPAs with leadership skills. He is working with AICPA staff to launch an academy program to coach and mentor CPAs. Almonte envisions participants would receive one-on-one coaching following an intense group program. He’d like the program to serve as something of a farm team to groom future committee and task force leaders and, ultimately, AICPA board members and chairs.

The leadership program would focus heavily, though not exclusively, on emerging minority leaders. Diversity in the profession, especially in leadership roles, is an area Almonte is intently focused on. “It’s important that our leadership reflects our membership,” he says. “I’ve been involved in many boards in my career and I found that as you look around the room, if everyone looks like you and acts like you, you’re losing the opportunity for different, and perhaps better, solutions to a problem.”

“To me being a leader is more than just a title. It’s using your leadership skills to help others make a decision,” he says.

PUBLIC SERVICE
Almonte has served as auditor general since 1994 at the pleasure of the state Legislature. “I would say the most challenging part of my job is that there’s often a conflict between a good political decision and a good financial decision,” he says. “But it feels really good when I walk through the airport and know that we just did something that saved our state or one of our cities millions of dollars. That makes you feel great. It’s worth more than money.”

Almonte ran his own practice from 1982 to 1994. “I loved owning my own firm,” he says. “Every day I could work on something different. I was never bored. I could do a tax return, prepare a financial statement, help a client buy a company, go out and investigate the company, review legal documents with the attorneys, help them make financial decisions. Every day was exciting.”

The demands of the firm meant considerable time away from home and his family, including his five sons. His father had worked long hours in the restaurant and ice cream business, heading off to work at 5 in the morning and coming home around 11 at night every day. “I didn’t get to see too much of him unless I was riding in the truck with him,” Almonte says. “I knew then that wasn’t the type of work I wanted to do. So that had an impact on me, but I saw that working hard was really important. Plus I also saw his interaction with customers and how he always treated them with respect and how they treated him with respect. So I learned what business was all about treating people with respect.”

When Almonte heard that the state auditor general’s position was opening up, he threw his hat in the ring. Although the public office is less lucrative than public accounting, he doesn’t regret the move. “While serving as the state’s auditor general is demanding in different ways, my overall work/life balance has improved. I became a soccer coach, a Boy Scout leader. I was able to go to my sons’ games. I’ve never been happier in my life than watching my boys grow up,” he says. “And I love my job in government, because I’m helping the million people that live in the state of Rhode Island have a better world, too, by being the watchdog over the finances of our state. So it’s the best of all worlds to me.”

Former AICPA Chairman Bob Bunting says Almonte’s experience in government and his understanding of how political systems work will be an asset as the profession weathers a change in administrations in Washington, D.C. “More importantly, while serving with him on the AICPA board, I’ve seen how his energy and problem-solving ability have worked wonders in building bridges with other professionals, influencers and regulators,” Bunting says. “The AICPA has been fortunate in how frequently it chooses the right chair at the right time. Ernie seems like one of those prescient choices.”

A CONTRACT BETWEEN YOU AND ERNIE
Almonte often weaves into his speeches the subject of his business card. On the back of his card, he printed his office’s mission statement and its core values integrity, reliability, independence and accountability.

When he hands a new acquaintance his card, he presents it with the reverse side up, saying, “this is a contract between myself and you that I’ll give you integrity, reliability, independence and accountability and you can call me on it anytime you want my number’s on the other side.”

Almonte brings the same open door policy with him to the AICPA chairman’s office. He wants to hear from members (see box below for contact information) about their concerns and the challenges they’re facing. “What troubles you or keeps you awake at night about our profession? How could the AICPA help you to be more successful? Tell me. Make your suggestion to me and I’ll address it,” he says.

While he works to avoid political scrapes as auditor general, Almonte is a fighter. His three-car garage has been turned into a gym, where he keeps weights, speed bags and other equipment for his martial arts practice. A poster of Muhammad Ali hangs on the wall, along with an American flag.

“I’ve been involved with martial arts since high school,” Almonte says. “It’s a great way to stay in shape and burn off whatever stress you have at work. You have to because you can’t breathe after 30 minutes. You forget about your problems.”

He’s determined to bring the same drive to bear for AICPA members. “We’re already a world-class organization, but I’ll only be happy when we bring it to that next level,” Almonte says. “Whatever that might be it will always include helping our members be successful but never forgetting the ‘P’ in the CPA stands for public and the public interest we have both roles to play.”

ERNIE ALMONTE

Title: AICPA board chairman; Rhode Island’s auditor general
E-mail: ealmonte@aicpa.org
Family: Wife, Kathy; five sons: Christopher, David, Stephen, Ryan and Patrick
Education: Bachelor of science in business administration and a master of science in taxation from Bryant University; graduate of two Harvard Kennedy School programs: Senior Executives in State and Local Government, and Innovations in Governance
First paying job: Working on a chicken farm at age 14
Hobbies: Martial arts; reading
Recommended reads: Almonte reads, on average, one book per week. His favorites include Daniel Pink’s A Whole New Mind; Malcolm Gladwell’s The Tipping Point; and Execution: The Discipline of Getting Things Done by Warren Adler, Larry Bossidy and Ram Charan
Biggest professional influences: Former AICPA chairs Bob Bunting and Leslie Murphy; former U.S. Comptroller General David Walker; and George Willie, CPA, managing partner, Bert Smith & Co.

Kim Nilsen is a JofA senior editor. Her e-mail address is knilsen@aicpa.org.