CPA firm self-assessment

Posted on Thursday, May 16, 2019 by Abby Draper

Conference room with dozens of sticky notes on the windows.

By Rebecca Kerr, OSCPA communications intern

In “Art of Accounting: Anything less than a 10 is an F,” Accounting Today writer Edward Mendlowitz outlines 10 questions accountants should use to assess and improve the quality of their firms.

Just as accounting firms have certain standards to uphold for their clientele, clients have their own set of standards for the firms they choose to do business with. So, these assessment questions, asked from the perspective of possible clients who are shopping around for possible firms, are designed to help make your firm the best it can possibly be.

The questions he provides are as follows:

1. Does your CPA firm keep you advised on current business issues affecting your industry?

2. Does your CPA firm specialize in or have expertise in your industry?

3. Does your CPA firm have someone who can provide you with key performance indicators that you can use to identify opportunities at your business?

4. Does your CPA firm provide feedback relating to your business on a timely basis?

5. Does your CPA firm review internal controls and non-accounting matters such as compliance, work scheduling and bottleneck avoidance?

6. Does your CPA firm keep current on industry topics that the IRS examines (for a dealership, this includes LIFO, demos, Form 8300, extended warranties, independent contractors and luxury tax) and do they regularly discuss them with you?

7. Does your CPA firm stay current on state tax issues related to your industry such as minimum wages, sales and use taxes and interstate activities?

8. Does your CPA firm conduct tax planning for your business and its principals before year-end and integrate it with tax law changes?

9. Is your CPA firm capable of providing assistance in planning the future course of your business and its principals, including compensation, the effects of what you do on the business’s value, and succession, estate, individual and business cash flow planning?

10. Overall, is your CPA firm a value-added asset to you and your business that helps in driving growth and profitability?

A “yes” to a question warrants one point, while a “no” warrants no points. Mendlowitz stated the grading system is broken down in groups:

  • 9-10: the current quality of the firm is good and should be maintained
  • 6-8: the client will most likely interview with other firms and keep shopping around
  • 0-5: the client will recognize the firm’s ineptitude and will search for a higher quality firm to protect their business

Although this point system and corresponding courses of action might be harsh, it is beneficial to know what clients are looking for in accounting firms and brainstorm ways to both improve internally and stand out in a sea of competitors.


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