U.S. public companies are expected to spend about $1.5 billion in order to be in compliance with the Sarbanes-Oxley corporate governance law, according to the Securities and Exchange Commission. And certified public accountants will play a key role in the process. So choosing the right certified public accountant (CPA) for your business is something that shouldn’t be taken lightly. The survival and success of your business could depend on your selection.
With the changes to public Company reporting requirements and insurance costs for CPA firms rising by the day, the pool of qualified candidates is getting thinner by the minute, even with scores of CPA firms across the country to choose from. So it’s easy to see how difficult it might be to find the right one for your business.
Although there isn’t a formula that ensures a successful relationship with a reliable CPA firm, several criteria should be used when approaching the decision making process. Look into the history of the CPA firm you are considering. How long has it been in business? What trade association do they belong to? How successful has it and its clients been in the past? Don’t forget to ask for personal references to see if you personally know people or companies who may have used the firm in the past, and then ask if they have been satisfied with its services.
It is extremely important to establish a comfort level involving the history of your CPA firm. After all, its staff will be serving as your company’s trusted financial adviser. So confidence is crucial to a successful long-term relationship.
Take the time to visit the firm’s Web site, if they have one, and ask for their brochures. Depending on your company’s specific needs, you may want to select a CPA firm that specializes in a particular area or industry. For example, if your company owns a chain of family oriented restaurants, then you may want to select a firm that has a reputation for working with that industry.
Other important questions to ask might be: What percentage of the firm’s business is focused on public companies? What mechanisms do they use to stay informed of trends and developments in your industry and the changes occurring in the public reporting requirements? What are their human resources that will be made available to your firm?
Go the extra mile and take the extra time to find a CPA firm that specializes in your type of business.
No CPA firm is the perfect size for every business. You may feel more comfortable working with a sole practitioner who is more dedicated to your satisfaction, or you may prefer safety in numbers with an international accounting firm with thousands of CPAs on staff. Perhaps a size somewhere in between is best. Choose whatever size makes you the most comfortable.
As you narrow the field of candidates down to a manageable number, make sure you develop a thorough understanding of the CPA firm’s billing fees and procedures. Don’t take it for granted that they will bill you on an hourly basis. Most firms have a defined billing practice that may not fit your needs or that can be change to suit your requirements. Therefore, you should find out how the different firms bill before you make your final choice. Find out the firm’s rate and frequency of billing as well.
This information will help you get started down the right path, but like any other business decision, various influences play a major role in the decision making process. Although it sounds subjective, don’t pay attention to your instincts. Make your decision based upon the firm’s qualifications, not cost.
Personalities are important but keeping your company finely honed and in tune with these new reporting requirements is the only issue to be considered here. Of all your professional services, you should feel completely comfortable with your CPA firm and their abilities. “There has been a good deal of concern about the cost of internal controls,” stated William McDonough, chairman of the Public Company Accounting Oversight Board. “In my view, good internal controls are cost effective and, once put in place, more than justify the expense involved.”
