San Diego Chapter

| Share

A New Perspective

As I returned from the CalCPA Council meeting and Centennial Gala in June, my thoughts turned to our profession’s past and what lies ahead. After thinking about it, I am left with the impression that the CPA profession is perhaps not prepared for the next 100 years. While facts and figures were the story of the last 100 years, it’s clear to me that interpretation and application of facts are the keys to success in the next 100 years.

Anyone today can access facts and information. In addition, it is easier than ever to alter the appearance of data. This has changed the way we value information and make decisions. It is now common office banter to see co-workers’ photos cut and pasted into unlikely situations—atop Mt. Kilimanjaro, giving speeches to the masses, etc. Data can be mixed and remixed in a myriad of realistic looking, but specious ways. It is only when viewed in a broader context and from a comparative vantage point that it becomes apparent that it does not make sense.

How else can the reliance on algorithms to assess risk create the huge financial mess that we find ourselves in today? Easy, just use a familiar and accepted baseline of data and inject something foreign, such as sub-prime debt obligations, and blend in increasing amounts over time to create triple-A rated investments. In other words, we need to see if it makes sense in the context of the past and in the context of other relevant facts, and not just on appearances.

Today’s easy access to information makes us think we are smarter than we have ever been. In reality, it lulls us into a false sense of security. We need to look beyond the representational facts to the underlying reality of the situation at hand. If we begin to train ourselves to ask more questions about the nature of a given situation and not simply accept the past as an indication of the future, we will be much better prepared to address a given situation. We need ask more and better questions, and to develop new ways to evaluate the answers that we get. This means that a new and modern approach to financial literacy needs to be developed and applied. Today’s youth are great at quickly finding facts and figures, but we need to train them to look beyond the numbers to what is actually happening.

Personally, I like to get out in nature to reset my internal clock and relax. It helps me to realize that when an environment is changing rapidly, sometimes it is best to do nothing and just pay attention to what is happening, rather than reacting to the changes. When people respond, rather than react, to a situation, they take a moment to feel what the body is saying and to recognize it as valid, instead of allowing the environment they are in to negate their feelings.

Our economic crises was born out of an environment where almost everyone believed that it would work out well, that home prices would only go up. When it began to collapse, everyone equally disbelieved and entered a state of denial. We need to give ourselves and those on our teams the ability to have an educated gut check and to go with those feelings. I think that the more well-rounded a person is, the better able they are to do what is best according to their own moral compass. The more centered a person is allows them to act on those findings confidently against what is the norm. Perhaps this is the great value in the 150-hour rule. By opening up the additional education requirements to non-technical fields of study gives upcoming professionals the broad based background they need to make truly objective decisions in the face of a rapidly changing economic environment.

Times of change create the most opportunity, and it is by looking at things from a new perspective that enables some to take advantage of those opportunities.

This entry was posted on Friday, August 7th, 2009 at 9:52 am and is filed under President's Message. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Chuck Dimmitt

Very well said. An old saying is as true today as when first said. “There is nothing more constant than change”.
The old ways helped get us to where we are today, but computers and new thinking have accelerated the pace of change and it is now, more challenging than ever to at least attempt to keep up.
Chuck Dimmitt

Very well said. An old saying is as true today as when first said. “There is nothing more constant than change”.
The old ways helped get us to where we are today, but computers and new thinking have accelerated the pace of change and it is now, more challenging than ever to at least attempt to keep up.
http://www.realworldetiquette.com/ Gina DeLapa

Well said!

As a former editor or two personal finance newsletters, I remember interviewing Don Phillips, CEO of Morningstar, who talked at length about the “democratization of data.” This new proliferation of investment information didn’t replace the need for sound judgment, discipline, and keeping one’s emotions in check.

If anything, the democratization of data has made these things more necessary, because it’s now easier than ever to make decisions that are not in our best financial interest.

My own CPA serves as a sounding board and a trusted advisor on all manner of financial decisions, particularly in my business. I am thankful for the CPA profession, which is one reason I’ve decided to serve it in my business of teaching corporate etiquette to new associates.

Thanks again for the thoughtful post.
http://www.realworldetiquette.com Gina DeLapa

Well said!

As a former editor or two personal finance newsletters, I remember interviewing Don Phillips, CEO of Morningstar, who talked at length about the “democratization of data.” This new proliferation of investment information didn’t replace the need for sound judgment, discipline, and keeping one’s emotions in check.

If anything, the democratization of data has made these things more necessary, because it’s now easier than ever to make decisions that are not in our best financial interest.

My own CPA serves as a sounding board and a trusted advisor on all manner of financial decisions, particularly in my business. I am thankful for the CPA profession, which is one reason I’ve decided to serve it in my business of teaching corporate etiquette to new associates.

Thanks again for the thoughtful post.
Chuck Dimmitt

To clarify my “Well said” comments, I was not implying that fundamental, logical, business basics should change or will ever change. The only point intended, was that prior to the explosion of data, via technological enhancement, primarily computerization, the information available for decision making was limited to the use of pencils, paper and a calculator. I had to look up the definition for the ‘democratization of data’ to learn that it is a fancy term for increased volume of data, that can be evaluated to breakdown the details of information, previously available in summary totals.
At least this is how I understand the term. The Democrats may have coined the term or it might have been republicanization of data. (smile)
Data, regardless of the form, has to be consistent, from year to year, to prevent distortion of the end results.
This is true, regardless of the size or type of business. Just because we now have access to increased volumes of data, does not change the necessity of understanding what the data means and how it should be applied, if at all. Some data is interesting trivia and nothing more. Anyone who makes financial decisions, without sound judgment and data, using generally accepted accounting principles, is more than likely to fail. Hopefully, this clarification has been helpful for any misinterpretation of my original comments.
An old joke: A wealthy businessman claimed that by adding 2% to his cost to determine his selling price was how he made his fortune He explained, if he paid $1 for his cost, he sold it for $3, and that was how he calculated 2%.
Chuck Dimmitt

To clarify my “Well said” comments, I was not implying that fundamental, logical, business basics should change or will ever change. The only point intended, was that prior to the explosion of data, via technological enhancement, primarily computerization, the information available for decision making was limited to the use of pencils, paper and a calculator. I had to look up the definition for the ‘democratization of data’ to learn that it is a fancy term for increased volume of data, that can be evaluated to breakdown the details of information, previously available in summary totals.
At least this is how I understand the term. The Democrats may have coined the term or it might have been republicanization of data. (smile)
Data, regardless of the form, has to be consistent, from year to year, to prevent distortion of the end results.
This is true, regardless of the size or type of business. Just because we now have access to increased volumes of data, does not change the necessity of understanding what the data means and how it should be applied, if at all. Some data is interesting trivia and nothing more. Anyone who makes financial decisions, without sound judgment and data, using generally accepted accounting principles, is more than likely to fail. Hopefully, this clarification has been helpful for any misinterpretation of my original comments.
An old joke: A wealthy businessman claimed that by adding 2% to his cost to determine his selling price was how he made his fortune He explained, if he paid $1 for his cost, he sold it for $3, and that was how he calculated 2%.

blog comments powered by Disqus

Chapter Events

SD North County Coastal Discussion Group - Tuesday, February 14 - Carlsbad

SD La Mesa Discussion Group - Friday, February 17 - La Mesa

Save the Dates

Feb. 2: Downtown Discussion Group
Feb. 2: La Jolla/Life’s a Beach Discussion Group
Feb. 14: North County Coastal Discussion Group
Feb. 16: Financial Leadership Forum Xchange
Feb. 17: La Mesa Discussion Group

Items of Interest

New Members

Facebook Photo Galleries

Chapter News and Information

Disaster Recovery: A Guide to Financial Issues

Monthly Archives

Local Interest Groups

From technical committees to discussion groups, the San Diego Chapter offers a variety of opportunities to exchange information and connect with your peers. Lists committees or other information within the chapter.