By Jennifer Cryder, CPA, PICPA Chief Financial Officer and Vice President of Operations
Earlier this year I transitioned out of public accounting to take over the role of CFO and vice president of operations at the PICPA. I truly couldn’t be more excited about this new opportunity. I’ve very much enjoyed meeting members from around the state and being part of the great team at the PICPA.
On my first day as CFO, I asked our controller about things that should be on my radar from an accounting perspective. She replied that the audit fieldwork would begin in a few days. I thought she was joking, but rather quickly realized she was not. After being an auditor for 15 years, I would have thought I knew nearly all there was to know about the process of an audit. Further, I knew that the PICPA accounting team was top notch and had great systems in place for internal controls and financial reporting. I was not worried, nor was I expecting to be surprised by much.
My first audit as CFO of the PICPA, however, has shown me that the view can be quite different from the other side of the table. Reflecting on this experience, I did find some surprises. Here are some things that I wish I had known; things that I think would have made me a better auditor.
First, I’ve had to realign my thinking. As CFO, the proper application of generally accepted accounting principles are certainly of the utmost importance. Beyond that, though, I also have to advocate for what is in the best interest of the organization. At times these can be competing objectives that must be weighed against one another. In evaluating whether a cost should be capitalized or expensed, for example, I not only need to consider the GAAP guidance, but also the impact to our budget and the resulting variance.
As an auditor, I was most concerned with the impact of any given transaction to the year-end balances. Now that my focus has shifted to producing timely and useful monthly financial reporting for management and the Board, I am much more concerned with the impact of transactions month to month. It’s no longer enough for me to simply evaluate transactions to the extent that they affect different reporting periods; I now want to ensure that the right story is being told each month in our internal financial reports.
While the balance sheet retains its importance in my mind, it’s really all about the income statement for me now. I recall conversations with my former clients, where we’d evaluate an issue from all sides and they would usually go for the one that produces the most favorable result to the income statement. As an auditor, the balance sheet was king – for many years that has been where most of the time was spent during an audit. Guess what? I care very little these days about what makes up my prepaid expenses! Now, don’t get me wrong: we have tight controls around cash and investments for sure. More of my time day to day, though, is focused on evaluating and analyzing revenues and expenses.
Finally, I’ve seen that a fresh perspective can be a really good thing. To the great credit of the PICPA team, they have welcomed my input and questions wholeheartedly. In some cases, I have asked why something was done a certain way, and had the pleasure of learning something new. In other cases, I’ve raised a suggestion that has helped to streamline a process or approach a problem with a new solution. Either way, I know the PICPA team is working hard to make this as strong an organization as it can possibly be.