factors to consider
when hiring an
and trust are more
important than fees.
By Lisa Hooker
CERTIFIED PUBLIC ACCOUNTANTS are
among the professionals that businesses
rely on in good times and bad. They perform audits and handle taxes, but also
may provide counsel on strategic issues.
"CPAs are advisors in the center of
important conversations. Business owners turn to their accountant for advice on
growth, identifying competitive factors
and succession planning. They also help
companies through difficult patches, like
the last few years of the recession," says
Clarke Price, president and CEO of the
Ohio Society of CPAs (OSCPA).
Given the impO"rtant role that accountants play, business leaders should ensure they' re engaging the right firm for
both current and future needs. For a new
business, it means finding a partner that
can help the company grow. For existing
businesses, that may mean parting company with their current provider. Any
number of factors can drive such a decision.
"Very often they' ve outgrown the
skills of the existing firm. Maybe they' re
entering a new line of business or need
different expertise. Or they feel they've
found a firm who can do a better job at a
better price," Price says.
"They're often looking for a particular type of expertise and a broader scope
of service," says Paul Lacroix, a partner
at Deloitte who leads the audit and enterprise risk services practice in Columbus.
"The firm's projection may have been
off or the timeliness wasn't there. Maybe
the billing isn't clear or is incorrect, so
they owed money they didn't expect,"
says CPA Andrew Coen, chairman of the
board and vice president of business development at Norman, Jones, Enlow &
Company. "Businesses also change accountants when the CFO or comptroller
changes, so it's their team- not the former guy's team."
Whatever the reason, there's a lot to
consider if it's time to shop for an accounting firm. How should executives
undertake the search process? What questions help to ensure a successful relationship? Area accountants offer suggestions
that can help make your company's decision the right one.
THE SEARCH PROCESS
A formal process rather than a haphazard
approach will make any search more successful.
"Start by asking your colleagues imd
COLUMBUS C.E.O. SEPTEMBER 2012
get referrals from within your industry
and trade associations. We're active in the
relevant associations where we have specific expertise, so companies would find
us there," says Mark Van Benschoten, a
CPA and principal in the audit division of
Rea & Associates.
"If your current clients are happy, they
can be your best salespeople among their
friends and peers," Lacroix says.
"Banks and other advisors may not
give a specific referral, but usually offer
the names of several accounting firms
they feel would be beneficial for their
customers to consider," Coen says.
Ever-changing accounting laws and
rules make it challenging to know who to
tum to for which function- particularly
for small and medium-size companies.
"Public companies must use different
firms for tax and for audit. Private companies can use the same firm for both
functions, even though some choose to
use different firms," says Bill Petrus,
CPA and managing partner of the Columbus office ofMcGladrey.
Accounting firms generally are categorized as national, regional or local.
Consider each candidate's reputation,
geographic presence, technical capabilities and industry focus. If your company
deals in nanotechnology, think twice
about retaining a firm that specializes in
public school finance.
"Providing a quality product is important, but your accounting firm needs
more than core competencies. It needs a
level of understanding of your business.
Do they have clients who do what your
company does? Look for a firm that does,
so you aren't their on-the-job-training
project," Price advises.
Businesses should determine what
services they need and why. "If a client
doesn't know exactly what they need, it's
the job of the firm to help them determine
that. What's important to the business?
What's their growth plan? What differentiates them? All of those are important
questions. Let the client talk to get ideas
"The firm's projection may have been off or
the timeliness wasn't there. Maybe the billing
isn't clear or is incorrect, so they owed money
they didn't expect," says Andrew Coen ,
vice president of business development at
Norman, Jones, Enlow & Company.
about what their successes and their trouble spots are," Petrus says.
Large companies may be more inclined to look at the capabilities of large
accounting practices. "A larger firm will
probably better understand that environment. The issues surrounding a company
with $100 million in revenue are different than those of a $1 million company.
The ability to serve that type of client is
based on the volume of activity and more
complex accounts," Petrus says.
Some businesses change firms only
for certain functions. "It used to be 10 or
20 years ago a business had one accounting firm . Now it's not unusual for us to be
one of several accounting firms working
with a client. That may tum into a fullservice relationship or not," says Darci
Congrove, CPA and managing director of
the Columbus office ofGBQ.
Companies should be aware that
when they're sitting across the desk interviewing firms, they're also being assessed as potential new clients. "The tax
accounting and audit rules we follow are
the same as for anyone else. We engage
in conversation to find out why they're
looking to leave their current firm and
would we be a good fit," Van Benschoten
says. "Have they chatted with their old
firm about their pain point? People are
very loyal to their professional service
providers. Will they really leave the firm
or are they just shopping?"
Smart business owners always ask who
would be assigned to their account if they
retain a particular firm.
"Who will I be working with? Who's
"Start by asking your colleagues and get
referrals from within your industry and trade
associations," says Mark VanBenschoten ,
a principal in the audit division of Rea &
COLUMBUS C. E. O SEPTEMBER 20 1 2
the partner in charge? Who are the team
members and what are their qualifications?" Price says. "And just as importantly, do I like them and am I comfortable with them?"
"Sometimes a firm will send an experienced partner to the company to sell
the firm, but then that person disappears
when the work begins," Congrove says.
"More and more companies are asking to
interview the people who will be on their
team without the partner present. They
want to see if the team members are confident and competent on their own."
Client surveys are common, so ask
if the firm offers an official vehicle for
feedback. "Feedback is the last part of
the service equation," Lacroix says. "We
want to know when clients are unhappy.
Then we can make the necessary corrections. Is it technical expertise, quality or
timeliness that needs our attention?"
Most accounting firms make it a point
to see clients more than just during tax
season. "It's not as if we meet with clients only once a year. We meet with them
regularly and seek their input and feedback regularly," says Michael Voinovich,
CPA and managing director of SS&G Financial's Columbus office.
The American Institute of Certified
Public Accountants (AICPA) administers an independent peer review program
in conjunction with the OSCPA and the
Accountancy Board of Ohio. Depending
on the type of accounting services a firm
engages in, peer review may or may not
be mandatory. More than 30,000 firms
are required to have an AI CPA review of
accounting and auditing practice at least
once every three years. Peer review files
are posted publicly at www.aicpa.org.
"I'd look at the peer review, because I'd
want to know what independent accountants thought of the firm before I signed
on," Voinovich says.
As sterile as numbers can be, accounting is a relationship business. "I often
say we're not in the audit, tax or consulting business, we're in the trust business.
People trust us with important aspects of
their company. It's up to us to bring the
best people to the table to assist them,"
"A successful accountant-client relationship is synergistic. It's necessary to
find the right fit not only with a firm, but
with the people within the firm that you
work with. The CPA designation gives
you a knowledge base, but trust is important, too," Voinovich says.
The relationship encompasses more
than comfort. "As I learn about their
business and personal priorities through
the years, the better accountant I can be.
That all comes out in the course of working together day-to-day," Congrove says.
NICHES AND PROFESSIONAL
A full-service accounting firm can address the whole complement of accounting services that a business needs.
"The accounting industry has expanded so much that we've tried to set up a
one-stop shop for our clients. They can
choose from the core and ancillary services their business needs at the time or
as they need them in the future," Voinovich says.
"They may not be aware of what's
coming, because they're so busy running
the office," Petrus says. "We can ensure
their infrastructure can accommodate
their growth. We also can address IT, finance, human resources and other functions they may not think that an accountant can help with."
Many accounting firms tout their expertise in certain industries. Their experts
are a helpful resource, because they offer
clients a depth of experience beyond general awareness.
"With our broad range of specific expertise, we can offer ideas and solutions
because of our interaction with so many
other clients. Our folks look at multiple
businesses and their successes and challenges. That experience helps other clients who find themselves in similar situations," Lacroix says.
"Working with an accountant familiar
with your industry is a big benefit. Very
often we're able to save our clients taxes,
because we know the ins and outs of an
industry," Voinovich says.
"For the most part, credentialed and
professional accountants deliver a similar product. The difference can be in the
specialized expertise and service model,"
"We have niches in certain segments,
but we have to be able to back it up and
deliver for the client," Van Benschoten
No matter the accounting service,
quality matters. "With the increasing
complexity of what we're asked to do
for our clients, the emphasis on quality is
paramount," Lacroix says.
CPAs are quick to tout that professional designation after their names as a
sign of quality. "There are competent tax
preparers that don't have a CPA, but I'd
ask myself, where do I have the greatest
likelihood of getting a quality product?
I'd say it's with a CPA, because of the
advanced educational requirements, the
stringent professional test and continuing
education requirements," Coen says.
"You want someone working with
you that does more than keep the books.
The key to success is more than the numbers. It's assisting through the critical decisions day-in and day-out. A CPA helps
you through key decisions as you operate
and grow the business and face challenges along the way," Price says.
"There's a certain standard that accompanies the CPA credential that potential clients shouldn't underestimate,"
Voinovich says. "It's required on the
audit side, but not necessarily on the tax
Accounting specialties can have additional designations. Accountants who
assist clients with financial planning can
be a Certified Financial Planner (CFP).
Forensic accountants who unravel complicated accounting transactions, many
of them nefarious, earn a CFF indicating
they're certified in financial forensics.
"People trust us with important aspects of
their company. It's up to us to bring the best
people to the table to assist them," says Paul
Lacroix, a partner at Deloitte.
"Look for the right credentials for
your industry and your business needs,"
SEALING THE DEAL
As a business hones in on a new accounting firm, the deal is sealed in writing.
"Our professional liability insurance
requires us to get an engagement letter
that sets forth the services we will provide for each client. The letter outlines
the meaning of tax, audit and review in
that circumstance," Coen says.
"Failure can happen on both sides.
The letter helps avoid delays, because it
sets benchmarks and target dates. The letter takes the gray out of it for us and our
client," Petrus says.
The engagement letter often delineates client responsibilities. "It's more
than a relationship, it's a partnership. Clients need to be responsible and have their
information in order and be prepared for
our on-site visits. We have to work together to be successful," Van Benschoten
"We do background checks on those
business clients who sign our engagement letter. We tell them it's our first
audit procedure for them," Lacroix says.
"When I put my name and the name of
the firm on the dotted line, more than
4,000 partners, directors and principals
across the country are counting on me to
follow the standards of conduct and ethics policies."
Every potential client wants to know
how much their accounting services will
cost. Pricing approaches run the gamutbillable hours, flat fees or fees within a
specified range-and are spelled out in
the engagement letter.
"Price will be an issue, especially if
there's not good communication and
the client can't relate the services to the
price. The engagement letter helps alleviate that," Coen says.
"Clients want to know upfront what
their fees will be. We communicate that
early, so there are no surprises or disappointment," Voinovich says.
The engagement letter can be amended to reflect changes in services and associated fees that crop up during the relationship. "If we run into a problem or
something unexpected comes up, we call
the client and explain the situation. Then
we update the engagement letter," Congrove says. 0
Lisa Hooker is a freelance write1: