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New AICPA chairman sets an agenda for the nineties: Thomas W. Rimerman will emphasize issues that have long-term implications for the Institute during his tenure as chairman.

In his inaugural address, Thomas W. Rimerman, the new chairman of the American Institute of CPAs board of directors, recalled that his father once told him, "Achieving an improbable goal is easy. The difficult part is deciding what you really want to do and setting goals to meet those objectives."

Rimerman apparently has chosen to attempt the more difficult tasks during his chairmanship. In a Journal interview, he strongly endorses the Institute's efforts to anticipate and deal with change in the profession by saying, "The Institute has become much more proactive and less reactive than it was when I first became involved in its affairs, and we should continue to move in that direction. In my term as chairman, I will be beginning projects, that have long-term impact. I don't necessarily expect to resolve the longer-term issues that I raise during my term. However, if I spotlight them as I go around the country, perhaps I can get other members to direct their energies toward them. Then, collectively we can speed progress toward quicker solutions."


Rimerman's interest in planning for the future may be related to the nature of his practice. He heads a 70-person practice, Frank, Rimerman & Co., with offices in Menlo Park and San Jose, California--in the heart of the high-tech Silicon Valley area, which has spawned many of the fastest growing companies in the United States. As a result, the needs of his clients have grown increasingly more sophisticated over the years, and his firm has had to grow and change with them. He says that as the Institute looks at the challenges that face it, it similarly must consider where we are going to be in three years or five years. "We've done a good job in coping with change over the past few years. But can we do more? Absolutely!"



Rimerman didn't decide to become a CPA until late in his school years. He set out to enter the business world, even though his father was a CPA and a partner of the firm that bears his name. "I liked accounting but thought I wanted a more varied career," he says. Even later, when he switched to an accounting major, he looked at it primarily as an entry to the business world. Rimerman finally joined his father after completing a term of service as a navigator-bombardier on a B-47 in the Strategic Air Command when the firm consisted of "two partners and a secretary."

Now he regards his professional career as "fabulous and enormously rewarding." In addition to "dealing with a group of intelligent, ethical and enjoyable people, I've watched my job change every few years. In addition to being managing partner of my firm, I've handled engagements in accounting, auditing, tax and litigation support. I feel I've had three or four different careers all roled into one."


Rimerman's father was forced to drop out of school in the ninth grade to help support nine brothers and sisters after the death of his father. Beginning as an office boy, he rose to become controller of a large Midwestern newspaper. However, the lack of a formal education worked against him when he moved to the West Coast with his wife and family after World War II. He decided to become a CPA at the age of 40. As Rimerman tells it, "He took a job as a junior accountant with Arthur Andersen & Co. and bought a paperback book on how to pass the CPA examination. He was sent on an audit engagement for two months and didn't have much time to study. Nevertheless, he took the test, passed all parts the first time: I think his lowest grade was 83." Later, Rimerman's father left Arthur Andersen to start his own CPA practice.



Rimerman has specialized in litigation support services for the past 10 years. Indeed, he was one of the first California CPAs to give expert testimony. When he began accepting these engagements about 25 years ago, the term "litigation support" had not yet been coined. He got started when an attorney he knew and respected asked him to do some analysis and business valuations in a divorce action. When he said he had never done that type of work before, the attorney replied, "Don't worry, I'll teach you." As Rimerman recalls, "I thought that if I could learn and get paid for it, that's not bad. It wound up that I was in court testifying for 31 straight days in the largest divorce case ever held in that county."

From there, Rimerman branched out to calculations for damages in business litigation, including breach of contract, theft of trade secrets and other loss claims for both plaintiffs and defendants. He also has been involved in CPA malpractice suits but will now represent only the CPA defendant in those cases.



Rimerman is a strong believer in the power of collective action. In his opinion, "excellence and professional ethics are not created in the halls of the AICPA headquarters. They are created when individual members perform their jobs properly." For that reason, it is not surprising that Rimerman intends to concentrate during his chairmaship largely on issues that require collective action.

Uniformity. In this area, Rimerman says a cooperative effort already has made significant progress toward a Uniform Accountancy Act that would end what he calls the "balkanization" of accountancy licesing requirements throughout the 54 separate jurisdictions of the United States. Early this year, Rimerman was asked to chair the conference committee for developing uniform regulations for the profession. It is composed of members from the AICPA, the National Association of State Boards of Accountancy (NASBA) and the CPA Society Executives Association (CPA/SEA).

At an early meeting of the committee, he challenged it to come up with a joint bill that could be approved for exposure to the three accounting organizaions by the end of 1990. Despite widespread skepticism, the committee did draft such a proposal, which subsequently was approved for exposure by the NASBA board of directors at its annual meeting in September. Rimerman credits "the spirit of cooperation" that prevailed at the meetings for the success thus far. "We're not there yet," he adds, "but I'm hopeful we can reach a successful conclusion."

Changing significance of financial statements. Rimerman first became involved in this issue as a member of teh AICPA future issues committee and later as its chairman. "Essentially," he says, "we need to look at the adequacy of a financial statement model that was developed for the industrial revolution in the last century, in light of the needs that arise from the technological and information revolution in this century." Specifically, Rimerman points to more volatile prices, currency fluctuations and changing property values. Also, complex transactions have become commonplace and the financial instruments used to close the deals are often as complex as the transactions. When needed data cannot be supplied by financial statements, users often turn to other sources, such as investment bankers, financial analysts and the companies themselves.

A continued decline in the relative importance of financial statements could put CPAs at a competitive disadvantage to other suppliers of financial information. The Institute and its accounting standards executive committee already have conducted limited research on the needs of financial statements users. To keep the project moving, Rimerman will recommend the appointment of a separate group to oversee the continuation of this effort. "The Institute should be more involved in the reengineering of financial reporting," he says. "We should identify the financial information user groups most need, apart from financial statements." Rimerman adds, "Since we're going to take a close look at financial statements and financial reporting, I think this project could have a significant long-term impact on the future of the profession."

Affiliation of non-CPA professionals with the Institute. Rimerman strongly endorses the recommendation of the AICPA special committee on governance and structure to permit non-CPA professionals workig for CPA firms to join the Institute's member sections as section associates. He fully realizes "there are members who do not support this recommendation for a variety of reasons, including the possibility it may weaken the Institute's image or diminish the importance of the CPA certificate."

However, in Rimerman's view the question boils down to, "Are we going to be an organization of CPAs or an organization that represents the accounting profession in all areas of expertise?" He adds, "It seems to me that, if we are an organization restricted only to CPAs, our importance will diminish over the years as services involving non-CPA professionals become more important. I believe we should remain an organization that represents the profession and I think the governance and structure committee has come up with a superb solution to the problem of affiliation with non-CPA professionals. During the next year, I'm going to see if I can create some interest in favor of the recommendation."

Federal financial management reform. For several years, the AICPA has advocated federal financial management reform. Rimerman says the AICPA's efforts now seem to be bearing fruit. Several bills have been introduced and while none meets all AICPA criteria, Rimerman says, "At least people in government seem to be taking note of the problem." He also thinks that, in tackling this problem, CPAs have been placed in the forefront of an important national issue. He takes pride in this position and says, "CPAs have a lot to bring to government, just as they bring a lot to the numerous community boards and charitable organizations they serve." He fully expects it will take a number of years for true reform of federal financial management to become a reality. However, he believes the Institute should keep the pressure on Congress to achieve reform, both during his term and beyond.



Looking back as he assumes office, Rimerman reflects that his involvement with the AICPA has been relatively short. It began with service on the management of an accounting practice committee in 1981. Then, after joining the AICPA's governing council in 1982 as president of the California Society of CPAs, his activities increased.

Rimerman credits his partners for making it possible for him to serve the profession. He recalls a discussion about division of duties shortly after he was nominated as vice-chairman. At the end of the discussion, his partners agreed that they would pick up any slack and would consider it their contribution to the profession. From Rimerman's point of view, that was collective active at its very best.
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Author:Barrett, Gene R.
Publication:Journal of Accountancy
Date:Dec 1, 1990
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