End of the Myth: CPAs Do Have to Write
By Mark Chiurri and Anna Varaksina
Posted for students of professional and technical writing / University
of South Florida (USF) • Sarasota/Manatee Campus
MAY 2006 - The importance of writing and communication proficiency in accounting cannot be overemphasized. Most employers consider this skill set to be crucial when hiring, often viewing it as more important than a high grade-point average. Effective writing is vital when dealing with customers, authorities, and other professionals.
The need for precise and clear language also serves as a response to investors' concerns about the ambiguity and complexity of professional documents. Alan Reinstein, Thomas R. Weirich, and Donald A. Nellermoe, commenting on an SEC ruling on simplifying the language of finance, in "Implications of US Securities and Exchange Commission Rule #33-7380 in the Improvement of Accounting Students' Writing Skills" (Managerial Auditing Journal, December 1999), said: "The SEC, denouncing dense writing styles, legal jargon, and repetitive disclosures in various prospectuses, issued Rule #33-7380 entitled 'Plain English disclosures,' which requires registrants to use 'plain English' in a prospectus's cover page, summary and risk factor sections."
CPAs Michael Devlin, of Grant Thornton, and Paul Ferreira, of Ercolini & Co., say they spend about three hours a day producing documentation, and feel it to be an important part of their professional lives. According to Devlin and Ferreira, the primary written documents that most CPA firms are involved with include:
* Financial statements and other special reports, which include a firm's opinions;
* E-mail correspondence with clients and firm personnel;
* Workpaper review comments for follow-up by managers and staff; and
* Various tax forms for tax authorities and clients.
The SEC requires accountants to follow six principles when writing professional documents:
Active voice. According to experts such as Elizabeth Danziger ("Writing in Plain English," Journal of Accountancy, July 1997), verbs in the active voice leave a stronger impression on the reader and remove possible ambiguities. Devlin recognizes this as one of the biggest mistakes in the writing he sees on a daily basis.
Accounting journalist Glenn Cheney ("Word Crunching: A Primer For Accountants," Journal of Accountancy, March 1990), however, argues that sometimes the passive voice is appropriate in professional writing. He says it could be done to "make an accusation less pointed, to avoid responsibility and to avoid implying personal relationships."
Short sentences. Many experts say that long sentences often confuse and overload readers, making them do extra work to find the real meaning. Danziger suggests that each sentence should consist of a maximum of 18 words. Devlin advises accountants not to get too creative and to write in a way that is easy for the reader to understand.
Everyday language. Reinstein states that "clearer communications result when writers and readers use definite and concrete words." He also suggests using examples to help break down information and make it less complex for readers. Devlin strongly agrees, adding that it is especially important in financial statements due to the "substantial risk of ambiguity and inadvertent misstatement."
Tabular presentation of complex material. This technique helps to better organize complex information. Breaking it down into subgroups by indenting and adding white space also makes finding necessary data easier and draws readers' attention to certain details.
No legal jargon. Reinstein calls for "minimizing legal jargon and highly technical terms." Accountants should not assume that readers are highly knowledgeable about accounting. Cheney says that "the highfalutin language of academia belongs in dissertations, not in memos, reports and letters."
No multiple negatives. Avoiding multiple negatives helps avoid possible misunderstandings in interpreting financial documents.
Becoming a Better Writer
Ferreira and Devlin offer suggestions for accountants striving to become better writers:
* Read on a daily basis, including not only professional literature, but also editorials, such as those found in the Wall Street Journal and New York Times.
* Do proper research.
* Plan, edit, and proofread.
Clearly, the role of accountants has gone far beyond number-crunching. Accountants must be effective writers and communicators to present their work to other professionals and authorities in the proper manner. They also must use precise, clear language to make documents easy to comprehend, avoiding possible misunderstandings, embarrassment, or even litigation.
Mark Chiurri and Anna Varaksina are accounting students at the University of Massachusetts, Amherst, Mass.