When the weather is pleasant, Richard Caturano, CPA, CGMA, likes to ride his Harley-Davidson Road King motorcycle on the 45-minute commute from his home in the blue-collar seaside fishing community of Gloucester, Mass., to his office near the historic Charlestown Bridge in Boston. Caturano, who will turn 60 on Nov. 18, is a savvy business manager who led the growth of a small firm into prominence in New England and ultimately a merger with McGladrey LLP, where he serves as executive managing partner of the Boston office. He works long hours, handles significant responsibilities with the AICPA, and participates in numerous charitable projects. He's known to say that he intends to live life to its fullest - to die with no wine left in his cellar. In addition to riding his motorcycle, he likes to cook pizza in his wood-fired pizza oven, play golf at least once a week, and spend as much time as possible with his wife, Barbara, and 2- year-old grandson, Rhys Richard Ryan.
For Caturano, the profession has been a path from modest roots to prosperity During his one-year term as the 100th chairman of the AICPA board of directors, which began in mid-October, he wants to help strengthen the profession for his colleagues and work to highlight the path to the American Dream for future generations of CPAs. He said it is important to create opportunities for CPAs to grow and advance in careers that serve the public. He is proud to have spent nearly 40 years helping employees of his firm build successful careers, and helping clients achieve success build good lives for their families and employees' families.
"That is a great feeling that so many our profession get to experience, and it the fuel that keeps us going," Caturano said.
As Caturano takes office, CPAs are positioned for vital roles of service in global economy for the foreseeable future. Hiring of college graduates with or master's degrees in accounting increased 31% to 33,321 in the 2009-2010 academic year (the most recent year for which mation is available), according to an survey. That came close to bringing back to the previous all-time high set in 2006- 2007.
A Bureau of Labor Statistics forecast shows that the number of accounting and auditing jobs in the United States is expected to increase by 190,700 - a 16% increase-between 2010 and 2020. The BLS predicts that demand for thorough financial documentation will increase in response to recent financial crises and resulting regulatory changes.
But several dynamics are unfolding, creating challenges for the profession. The same regulations that create opportunities for CPAs also can constrain them and create significant expenses for their clients or employers in an uncertain global economy. The economy itself is in a perilous state as many European countries struggle under a heavy debt burden and unemployment in the United States remains high. As CPAs in the Baby Boomer generation reach retirement age, the profession will have to attract large numbers of bright, critical thinkers who have good project management and leadership skills and reflect the racial diversity seen elsewhere in the business world.
Caturano wants to use his year as chairman to address these challenges and help CPAs continue to experience the prosperity he has enjoyed.
"The philosophy I've always had is that anytime you face a challenge, that creates an opportunity," Caturano said. "If you can understand what that challenge is and what change may result, then you can figure out how to take advantage of the opportunity. If we could bring that understanding to our membership, then our membership will be better prepared to face those challenges, create opportunity, and create success."
"Rich is a visionary who works diligently to see his ideas come to fruition," said AICPA President and CEO Barry Melancon. "We are fortunate for his leadership at the AICPA for many years, especially as chair of the PCPS Executive Committee, and now to benefit from his intellect as his year as chairman unfolds. Rich was a perfect choice for chairman of our board. He is dedicated to the profession, approaches each issue with high ethics and fairness, and wants nothing more than to move us forward and position our members for success."
"WE NEED TO WORK AS ONE"
Ten years ago, with Arthur Andersen's demise imminent, Caturano and his leadership team gathered the 110 staff members of his firm, Vitale, Caturano and Co. PC, to make a proposal. The profession was experiencing heavy scrutiny, and the SarbanesOxley Act of 2002 was creating new regulations whose effects were not yet known, but Caturano was convinced it was time to expand. He used a PowerPoint slide to drive home the message to employees that their support was critical to the mission.
"We hope that you recognize the opportunities," the slide said. "We need to work as one to get there."
Caturano showed how other firms would need to absorb the clients Andersen had been serving, and proposed hiring 45 people from Andersen, adding $4.5 million a year to the firm's payroll.
"It was that business risk that transformed our firm into what it became," Caturano said. "It became the largest and most significant firm in New England outside of the Big Four."
The success of the firm, which merged with McGladrey in 2010, was a crowning achievement in a career that might not have come about had a new family not moved into a house across the street from Caturano in the Boston suburb of Revere, Mass., when he was about 9 years old. Many people in the neighborhood, which consisted predominantly of Italian immigrants, worked more than one job. They were laborers and construction workers, and they came home from work dirty and tired.
The new neighbor, Tony LoConte, drove a nice car and wore a suit. Caturano soon found out that LoConte was a CPA; he performed tax and accounting work, mostly for small businesses. He became the model citizen in the neighborhood.
Caturano was good at math, so he decided to become a CPA, as math skills were what characterized a CPA at the time. LoConte mentored him a bit in high school, and Caturano attended Bentley College, where LoConte was an alumnus.
Because of his roots in a neighborhood where career opportunities were fleeting, setting the profession on a course toward increased racial diversity is important to Caturano. During his year as chairman, the newly formed, AICPA-led National Commission on Diversity will step up efforts on an important issue in the profession. Representatives from professional advocacy groups for minorities will join leaders from the AICPA, firms, state societies, business and industry, government, and education in an effort to develop best practices and initiatives aimed at expanding ethnic diversity in the CPA ranks.
In addition to promoting diversity, Caturano wants to encourage CPAs to think about how the workplace will evolve in the coming years. He envisions a technologyenabled world with extensive telecommuting where business use of cellphones increases at the expense of desk phones. He said that to attract and retain the best and brightest young people, CPA leaders will have to more fully embrace flexible schedules and work/life integration. He wants CPAs to think about developing a new revenue model that is not based on billable hours, to better reflect the value CPAs provide clients and create inviting work expectations for future generations.
He wants to see scholarship opportunities increase for students considering the profession. He would like to see mentoring, training, and advancement opportunities increase for young CPAs once they enter the profession. And he wants employers to consider the possible benefits of accommodating part-time workers and doing more to assist with managing family responsibilities.
Nichole Van Pelt, a 31 -year-old assurance manager in McGladrey 's Boston office, shares Caturano's view that younger workers are less willing than their predecessors to put families and personal lives on hold in order to work grueling hours. She said Caturano is a strategic thinker who takes employees' well-being into account.
"He focuses on what's going to be the next move, next initiative, next strategy that not only will have the company's best interests in mind, because we are running a business, but also will have the people's best interests in mind," Van Pelt said. "He tries to balance those two objectives."
RubinBrown LLP Chairman James Castellano said Caturano's self- made success serves as an example to talented people who are considering the profession and mapping their career paths. Castellano, who chaired the AICPA board in 2002, said Caturano is the perfect person to represent the profession at a time when CPAs are seeking enthusiasm, vision, and balance.
"He's a person who has worked very hard, but enjoys himself immensely," Castellano said. "1 know he has an extraordinary amount of outside interests, and I think he'll be a good role model as he goes around the country and speaks to young professionals and students who are thinking about accounting [as a career option] ."
Caturano also brings to the table a great deal of experience dealing with the issues of firms of a variety of sizes through his work with the AICPA. He has chaired the AICPA's Private Companies Practice Section (PCPS) Executive Committee, and has served as a member of the Major Firms Group and the Special Committee on Mobility and Staffing Task Force. He served as president of the Massachusetts Society of Certified Public Accountants in 2005-06, and has been a frequent speaker on firm management issues. "He's comfortable making tough decisions. He is effective at getting to practical solutions and then building a consensus," said Bill Balhoff, the Postlethwaite & Netterville managing director and CEO who recruited Caturano onto the PCPS Executive Committee 10 years ago. "He was meant to lead. I always believed that he was going to make a substantial contribution to our profession."
PROTECTING THE PROFESSION
Now Caturano has the opportunity to lead an organization with nearly 386,000 members, and many of the initiatives he plans to focus on are aimed at enhancing the profession that has brought him joy. Under his leadership, the AICPA remains poised to advocate for its members on many issues. Here are a few examples:
* As the PCAOB continues to explore die issue of mandatory audit firm rotation, the AICPA is urging careful study by the board and has cautioned that requiring periodic rotation of auditors would have costly and unintended consequences without increasing audit quality. "You really have to understand a client's business to audit it effectively, and that takes, in some cases, one, two, or three years," Caturano said. "If you need to have a different firm gaining that understanding every six, seven, or eight years, to me that doesn't make any sense. To me, what makes sense is a long-standing relationship managed by an audit committee that understands the importance of independence."
* With the Financial Accounting Foundation's new Private Company Council (PCC) set to meet for the first time in the fourth quarter of 2012, the AICPA continues to monitor the progress of financial reporting requirements that are modified to meet the needs of private companies. Early next year, the AICPA's new framework for small and mediumsize entities (SMEs) that are not required to prepare financial statements in accordance with U.S. GAAP will be available (see "Back to Basics: Proposed Framework for SMEs Geared for Reliability and Simplicity," page 32). "It's a much less complicated system that we're envisioning in terms of financial reporting," Caturano said. "We will give them a robust reporting framework that meets their needs and gives the users of financial statements what they need."
* The AICPA is encouraging the SEC commissioners to allow public companies the option of using IFRS for their financial reporting. Although the SEC hasn't taken a stance on IFRS, Caturano said it's important for CPAs to understand the standards because IFRS is a recognized financial reporting system in the United States for multinationals and other nations are implementing them.
* As cloud-based and mobile technology grows, the AICPA continues to develop resources to help CPAs create and maintain effective cybersecurity for themselves and their clients as they tap into new opportunities.
* As a service to the public, the AICPA continues to promote financial education and responsibility through its 360 Degrees of Financial Literacy campaign and the National CPA Financial Literacy Commission.
The AICPA also is working to elevate management accounting through its joint venture with the Chartered Institute of Management Accountants (CIMA) and the Chartered Global Management Accountant (CGMA) designation that launched earlier this year. Caturano said the CGMA designation has value for CPAs in public accounting as well as those in business and industry.
"To do a good audit or to do a good tax return, you have to have a good understanding of a client's business. And the best way to gain an understanding of a client's business is to find out what must be measured other than income and expenses," he said. Harnessing nonfinancial metrics has been a focus of CGMA thought leadership, resources, and publications.
CHANGES ON THE HORIZON
Caturano is issuing a call to action as he begins his year as chairman of the board. He believes CPAs will have to embrace change to allow future generations of the profession to enjoy continued prosperity. He wants the profession to evolve and firms to realign to capitalize on important business trends. He wants to see diversity, family-friendly work schedules, and smart use of technology become pervasive in the profession.
"Just as we saw things change dramatically in 2002, we see that with die technological advancements of today, the things that CPAs - especially entry-level accountants - do are changing," Caturano said. "The profession has to change with that, and what I'd like to accomplish over the next year is to give our members a vision of the future and what that change might look like."
Copyright American Institute of Certified Public Accountants Nov 2012
(c) 2012 Journal of Accountancy. Provided by ProQuest LLC. All rights Reserved.