Kenneth "Ken" Scearce, owner and managing partner of Scearce, Satcher & Jung, PA, talks with Opportunist's Managing Editor Leslie Stone about his life's work, the legacy his firm has built over the past 40 years, and why he feels compelled to give back to the underprivileged in his local community.
Scearce, Satcher & Jung, PA is a full-service firm based in Winter Park, Fla., that provides accounting, auditing, income tax preparation and business advisory services. “Our typical clients are primarily service businesses and real estate businesses that range anywhere from call centers to physicians to law firms and property developers and include operators of commercial properties,” says Ken Scearce. “We provide income tax compliance service, which is basically preparing returns, as well as audit and accounting attest services that we review or audit and financial statements for presentation to lenders, the general public and/or other owners of the businesses. Our business advisory practice can cover a lot of different things from assisting with planning startup to various capital issues. We also do not simply handle tax returns but also tax planning and we advise people on alternative strategies to help minimize or to defer their tax obligations.”
Opportunist: What made you decide to become a CPA, Ken?
Ken Scearce: I kind of landed in what I do. I was the first generation from either side of my family to go to college and so it was very important for me to finish. This was during the Vietnam War era when we had to keep our exemptions from the draft. When the draft lottery was taken my number was 112. That was an order of preference of selection. If your number was under 150 or 200 you were gone down the Pike when your college deferment ran out. So I finished college with a degree in economics in 1972. The summer after graduation I was working at a liquor store in Ocean City, Md., and awaiting my call-up date that was just two weeks away, when the government suspended the draft. That fall I went back to school at Salisbury State College and took an accounting course and a real estate course. Real estate was not interesting to me then so I pursued the accounting degree and went to work with a substantial, prestigious firm in December of 1972.
Opportunist: How did you become involved with Scearce, Satcher & Jung?
Ken Scearce: We were originally part of a large regional firm known as Smoak, Davis & Nixon out of Jacksonville. When I moved to Florida from Maryland in 1974 and joined that firm, the Winter Park office had picked up a water and sewer audit with Orange County and needed someone with experience in governmental auditing. I had that experience, which was pretty rare at the time; however, that was an expertise that we abandoned in the late-1980s. We no longer do governmental audits because it simply did not provide a growth opportunity for a firm our size. The Winter Park office of Smoak, Davis & Nixon split off from the firm and became Jung & Blosch. Then, about a year later, I was admitted as a partner.
Opportunist: Who or what inspired your career along the way?
Ken Scearce: I have always really felt I needed to do the best job I could for the client and always tried to put the client’s needs first. The firm’s needs would be taken care of only if we met our clients’ needs first. Of all the people currently in the practice I’m the only one who actually worked with our founder, Don Jung. Don knuckled down on me when I was young and still kind of feeling my way around. I learned a lot from him and from the managing partner of the Maryland firm. Both men had a lot of good qualities and I try to pick and choose the best from each one as role models. There were a lot of other CPAs in the area whom I also consider good Christian role models. They were honest, ethical and their integrity was unimpeachable.
Opportunist: Have you done much work in the realm of serving as an expert witness?
Ken Scearce: Yes, we have provided a lot of white-collar crime litigation support services through the years. We were fortunate enough to work with several premier criminal defense attorneys whom we would assist in developing their cases and would often testify on behalf of their clients in federal and state courts. Our current litigation support efforts are primarily associated with the IRS Offshore Voluntary Disclosure Program.
Opportunist: For those who don’t know, can you explain what the Offshore Voluntary Disclosure Program involves?
Ken Scearce: It’s a program started by the U.S. Treasury that assists people with offshore, unreported financial accounts. It has to do with the UBS [Union Bank of Switzerland] and offshore bank accounts and basically grants account holders an amnesty from criminal prosecution subject to the review of circumstances and payment of taxes and penalties for voluntary disclosure of their offshore holdings. We are currently working with a law firm handling those cases.
Opportunist: Can you share some highlights from some of the most notable cases you were involved with?
Ken Scearce: We were involved in a very high-profile federal case a few years ago involving undocumented workers. And we were involved on the state level in a case involving a large automobile dealership enterprise. I testified, so it’s somewhat public record. I have found it challenging to be involved in these cases because it really puts you on your toes. It’s kind of like free fall—you don’t really know where you’re going to land. [Laughs]
The first case in which I really testified for any length of time kept me on the stand for a day and a half. I was cross-examined by the state attorney and kept waiting for the attorney I was working for to object or something—to give me a break—but he just sat there and smiled. [Laughs] At least we had a good outcome on the case.
My very first case, as a matter of interest, was a Ponzi scheme. Unfortunately, they had the goods on the defendant and he did jail time. That is where I developed my relationship with the attorneys. From a local standpoint, it was like he had set off a time bomb in a small town because so many people got mud on themselves. The defendant had apparently played some very well respected members of the community like a fiddle because he had them telling others how great the investment was.
Opportunist: Are there any recent developments you can share with us?
Ken Scearce: I am proud to say that we held our own during the recent recession, and it looks like 2015 may be our best year for billings yet in the history of the firm. We have seen quite a bit of growth, and at least two of our clients have become multigenerational. Mr. Jung founded the firm in 1960 and we still have two of his original clients, although they are second or third generation. Upon the birth of an expected great-grandchild I will soon have known five generations of this family. I think that is a very special accomplishment. We have also had some great relationships with others. In this situation, the father sold the family business to his son-in-law and daughter, and now his granddaughter is being groomed to potentially take over the business in the future. So we could go through three generations of owners in this particular family business. Another client who recently passed on had been a client since 1960. We are continuing to work with his children in some of the legacy situations he established.
Opportunist: What changes have you seen in your industry through the years?
Ken Scearce: Many, many, many. The tax law has changed several times if not annually. We have certainly seen several major amendments to the Internal Revenue Code. I started under the Internal Revenue Code of ’54, saw a major change in 1976 and then we had a complete restatement with the 1986 code. Accounting and auditing pronouncements have also changed constantly. I would say changes in the laws and the rules and professional guidance are definitely an ongoing occurrence for us to deal with.
Opportunist: Have you had to meet continuing education requirements to keep up with the changes?
Ken Scearce: Oh yes. Continuing education is mandatory. The firms I’ve worked with have always had requirements for the most part that exceeded any mandates. We are required now to have 40 hours a year in order to maintain our state license.
Opportunist: What do you believe makes Scearce, Satcher and Jung unique?
Ken Scearce: We are a boutique firm but we thrive. We don’t advertise or employ any marketing agents. We have grown substantially through word of mouth and referrals. We do a few public service activities but they are not what I would call advertising. We have a very strong practice and some very high quality clients. Quite a few of our team members who have come to work for us from other firms have remarked about how much referral and new client business we have as well as the quality of the work we do and the quality of our clients.
Opportunist: What do you enjoy most about your work?
Ken Scearce: I enjoy when the client sees value in what we have done. When you give a client some advice or help them with something or come up with a new idea and they recognize that they’re receiving value that gives me a good feeling. Most of the time if you’re just doing tax returns or financial statements people don’t get worked up about that even though they may understand that you did a good job.
Opportunist: What do you consider your greatest accomplishment?
Ken Scearce: Keeping it going all these years. There are a lot of things I’ve done that may not be considered great, but we have kept the practice. I would also say the very reputation of the practice from a business standpoint because a well-respected reputation means more to me than almost anything else. As Shakespeare said, ‘A good name is more valuable than gold.’ We have been very, very blessed.
Opportunist: Where would you like to see Scearce, Satcher and Jung in the next decade?
Ken Scearce: That is a good question. There will be some transition in ownership over the next 10 years. David Satcher and I are both the senior partners. I am somewhat looking toward retirement, although not anytime soon, but I will eventually have to turn over my ownership and a lot of the client responsibilities—for my own good as well as the good of the clients. So I would say our biggest challenge is going to be in bringing up the next generation of owners of the practice. We already have one younger partner and the opportunity is definitely available for others as well.
Opportunist: We understand that you and your firm are very involved with local civic organizations and that you also give back to the community.
Ken Scearce: Our civic activities have been hither and yon through the years, but I have decided to cut mine back due to time constraints. At this point in my career I am really trying to work with our church and ministries. I have been a past president of the local Rotary Club, the Winter Park Racquet Club and the local chapter of the Florida Institute of CPAs—where I was also on the state organization’s board of governors for a two-year term. I was also involved in a lot of other volunteer type activities over the years.
The Orlando area still seems to have a lot of individuals and families who are struggling to make ends meet. Part of the problem is that there are a lot of service jobs, many of which go hand in hand with the entertainment industry here, that just really don’t pay a premium. At the beginning of the recession work disappeared and many people lost their jobs. All of that created a layer of people who are honest and hardworking but who still struggle and can’t seem to get to a comfortable place in life. Many are a paycheck or a week away from being homeless or even destitute. Some are in dire straits, so I think anything we can do for them is important. I don’t think government is the answer. The churches seem to be doing the best job of caring for people. One of the more important things these people need is healthcare. In the last year or so I have been doing some volunteer work with Grace Medical Home. It’s a medical ministry to the underserved and uninsured in the Orlando area. We are always going to have poor people, but we are commanded to take care of them. This is just one little thing I can do for that cause.
Leslie Stone is an award-winning writer, editor and journalist with more than two decades of experience covering business, finance, real estate and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides between Florida and Michigan. Follow Leslie on Twitter: @lescstone.
Scearce, Satcher & Jung, PA