U.S. business activity continues expanding, but rising energy costs have softened trucking “somewhat” in several regions, the Federal Reserve reported. From late February to early April, several Federal Reserve districts – Chicago, Cleveland, Minneapolis and Richmond, Va. – reported that higher fuel costs had lead to higher fuel surcharges, which could soften consumer demand for the goods provided by trucks, the report noted.
Publicly traded trucking companies increasingly are moving to buy back stock. Within the past couple of months, the boards of J.B. Hunt, SCS Transportation, Covenant Transport, Celadon and P.A.M. Transport have authorized significant repurchases. J.B. Hunt, which also announced a two-for-one stock split, is authorized to buy back up to $500 million in stock over the next five years.
Truckers began paying up to 35 percent more for tolls on the New York State Thruway in May after the Thruway board approved a toll increase to fund a seven-year Thruway improvement plan. Commercial E-ZPass users get a 5 percent discount and are eligible for additional volume discounts. Passenger cars are paying a 25 percent toll increase.
Sales of new trucks will continue to gain momentum in 2005 on the strength of increased capital spending and overall economic growth, said Gerald C. Turnauer, chairman of the American Truck Dealers. Turnauer said ATD anticipates 20 percent growth in overall new unit sales, with as much as 25 percent growth in Class 8 vehicle sales. That would follow a 31 percent increase in truck sales in 2004.
Certified management accountant Paul Sharman is a man on a mission. As the new president and CEO of the Institute of Management Accountants (www.imanet.org), Sharman wants to educate America that CMAs have the same prestige as CPAs but are uniquely qualified to plan and lead financial improvements and profitability initiatives inside a company.
CPAs in public practice generally perform the tasks of preparing financial statements, perhaps auditing the numbers or the internal control systems, and preparing tax returns. The rare CPA also helps with key business issues, such as financial statement analysis, capital funding and corporate finance, cost management, performance measurement, strategic planning and marketing, decision analysis and support and business economics.
Those are among the core competencies of the CMA. The trucking industry, being intensively competitive and cost-sensitive, is in dire need of this type of help. Sharman explains some concerns facing accountants and the businesses that employ them.
Accountancy is in flux. The reputation of auditing companies has suffered severely from well-publicized public company scandals. But with accounting industry reforms like Sarbanes-Oxley, the responsibility for accuracy of the financials is returning to company CFOs and CEOs.
Companies are overreacting to regulation. Sarbanes-Oxley reforms are forcing public companies and even many large private companies that compete with them to undertake huge and expensive restructurings of their own internal control systems. Their audit fees are doubling, and these companies are having to retain separate firms for taxes, auditing and consulting.
The focus is misplaced. Sharman believes all the regulation, governmental attention and resources are focused only on 15 percent of the solution: financial reporting, auditing and tax matters. Management accountants can help design control systems that help a company produce profits and accurate reports, implement new systems, manage them and report on their performance.
A new approach is needed. Sharman thinks the basic education of accountants in America needs an overhaul. In America, accounting students strive for the CPA designation, but 80 percent of them eventually leave public accounting and go into private employment, and their basic training does not equip them to help immediately in a private company.
The CMA is a healthy alternative, Sharman suggests. These accountants are better equipped to help private firms be more competitive in this new business landscape.