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15 posts from July 2011

In the News: Debt-Ceiling, College Tuition, EDGE

Crashing through the debt ceiling spending taxes

This week’s post comes from Palm Beach, Florida, where I’ve been attending  the AICPA & CPA/SEA Interchange 2011 conference the past few days. It’s been a great experience learning about the issues impacting the profession, including informative forward-looking presentations from Barry Melancon, CPA, president and CEO of the AICPA and Paul Stahlin, CPA, AICPA chairman. It was wonderful to have the opportunity to meet so many of my colleagues from the state CPA societies around the country and learn about the projects they’ve been working on.

Now, on to the news.

Continue reading "In the News: Debt-Ceiling, College Tuition, EDGE" »

QR Codes 101

Stacie Saunders QR CodeQR codes, or quick response codes, are popping up everywhere. You may have seen them at conferences, in catalogs, on billboards and even in the Journal of Accountancy. What are they and how can you take advantage of this growing trend?

Let’s start with the basics.

A QR code is a two-dimensional code that can be read with an application on your mobile device. They are used to drive users to digital information, such as websites, Facebook pages or registration links. It is as simple as a click of a button!

If I see a QR code, what do I do with it?

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It’s Time Congress Says No to Withholding Rule

Two architects accountants CPAIf there are any lessons to be learned from the 1099 reporting controversy, it’s that hitting the proverbial fly with the hammer is not the best way to go after tax cheats.  The fly still lives but everything around the fly gets whacked.

What is shaping up to be Lesson #2 is a rule that will force many federal, state and local agencies to withhold 3 percent of payments to contractors for goods and services that cost over $10,000.  It covers governments with total yearly contract expenditures over $100 million, which means most states and large cities.  The rule was enacted in 2006 but its implementation has been delayed – but barring congressional intervention, it will take effect Jan. 1, 2013.  Three bills have been introduced in Congress so far to abolish it - H.R. 674 and S. 89, which would simply repeal the rule, and S. 164, which would offset the cost of the repeal with unobligated funds. 

Why is the 3 percent withholding a bad idea and why is the AICPA opposing it?

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Introducing the WLIFE Awards

Workplace Leaders in Financial Education Awards

What’s the value to employers who offer financial education to their staff? Research shows that workplace programs can:

  • Reduce absenteeism
  • Increase employee productivity
  • Increase contributions to the company's retirement plans
  • Increase employees’ allegiance to their company

To recognize organizations that are making a commitment to their employees well-being by offering exemplary workplace financial education efforts, and to encourage the implementation of such programs by more employers, the AICPA and the Society for Human Resource Management (SHRM) launched the Workplace Leaders in Financial Education Awards (WLIFE). This first-of-its-kind award started as a recommendation by the Subcommittee on Workplace Financial Education of George W. Bush’s President’s Advisory Council on Financial Literacy. According to a 2009 SHRM survey, 64 percent of employers offer financial education to workers.

Visit the website, wlife.org, to apply, find out more about the award and to learn how to develop or enhance a financial literacy program in your workplace. Winners will be announced October 2011. The AICPA and SHRM plan for this to be an annual award with Year 2 call for entries to begin March 2012. WLIFE is a facet of 360 Degrees of Financial Literacy, the volunteer effort of the CPA profession to improve the financial literacy of all Americans.  For more information about volunteering in your community, visit aicpa.org/financialliteracy or visit your state society’s website. 

Melora C. Heavey, Senior Manager – Communications, American Institute of CPAs. Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig.  She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.

Significant Changes Coming to U.S. GAAP

Back in 2002, the Financial Accounting Standards Board and the International Accounting Standards Board signed the Norwalk Agreement, marking the first major step towards formalizing their commitment to the convergence of U.S. GAAP and International Financial Reporting Standards.  Nearly 10 years later, newly converged standards are on the verge of finalization. While the Boards have completed five priority projects to date (fair value measurement, consolidated financial statements [including disclosure of interests in other entities], joint arrangements, other comprehensive income and post-employment benefits), three priority projects remain: Revenue Recognition, Financial Instruments and Leases. Despite garnering a great deal of attention, it is often missed that these standards when finalized are going to be part of U.S. GAAP and will affect smaller nonpublic companies and not-for-profit entities; not only public companies.

Continue reading "Significant Changes Coming to U.S. GAAP" »

In the News: PCGAAP, Protecting Elderly Clients

Paul Stahlin, CPA

Paul Stahlin, CPA, AICPA chairman, wrote an editorial titled ‘One-Size GAAP’ Does Not Fit All for The CPA Journal, a New York State Society of CPAs publication, on the need for differences in accounting standards for privately-held companies. Stahlin highlights the recommendations of the Blue Ribbon Panel on Private Company Financial Reporting, including the creation of a separate board with standards-setting authority under the Financial Accounting Foundation’s oversight and changes and modifications to existing U.S. GAAP, where appropriate, for private companies.

 

Continue reading "In the News: PCGAAP, Protecting Elderly Clients" »

Engaging the Next Generation of CPAs

college students graduating

The latest employment numbers indicate that it continues to be a tough year for many Americans struggling in the job market. Yet, I am encouraged by recent AICPA research that shows the demand for accounting professionals is poised to buck national trends. The AICPA’s 2011 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits reports on a national survey of public accounting firms hiring and colleges and universities granting accounting degrees. The report identifies key trends in accounting enrollment, graduation and hiring through the 2009-10 academic year.

Mark Koziel, AICPA Director - Specialized Communities & Firm Practice Management, says “the 2011 Trends numbers jibe with what we’re seeing among our members’ 2011 PCPS CPA Firm Top Issues Survey results. Even though client retention is generally the top concern, among larger firms, succession planning still ranks within the top five.” Firm clients are struggling in the poor economy, but firms still face the pending retirements of their boomer partners and staff.

Continue reading "Engaging the Next Generation of CPAs" »

Did the IRS Get the Reg. Tax Preparer Program Right?

Seal of the Internal Revenue Service

For years, AICPA members have approached me at conferences and asked, “Ed, why doesn’t the AICPA support efforts to regulate paid income tax preparers?”  Or, “Why can’t the IRS discipline 'unenrolled' preparers under Circular 230 (the rules governing practice before the IRS)?”  

They believed that the playing field deserved a little bit of leveling for certain “players.”  They weren’t alone.  The Government Accountability Office and Treasury Inspector General for Tax Administration both issued compliance studies (cited in the IRS Commissioner’s report) that implicated the “unenrolled” preparer community as the source of compliance problems.

Well, we support those efforts now!

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In the News: IRS Tax Preparer Exam, Same-Sex Filings

CPA Profession in the News Accounting Today reports that the AICPA wrote to the IRS offering to help develop the IRS exam for registered tax return preparers by leveraging the AICPA’ s experience with the Uniform CPA Exam. AICPA Tax Executive Committee Chair Patricia Thompson wrote “we believe the examination should address problems faced by tax return preparers that might arise in the preparation of basic Form 1040 returns, including coverage of basic self-employment income.” Thompson noted that the IRS exam should have questions related to ethical responsibilities of tax return preparers and be updated annually to reflect the most current tax laws and regulations.

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Be a Part of Making Historic Change for Private Companies

Private Company Financial Reporting Anytime you have a “first” of anything it’s an important and memorable occasion. With that in mind, my first topical blog post is on a subject I believe is critical to our profession, those we work for and those we serve. I’m talking about private company financial reporting.

Few opportunities exist where a person can say they took part in something truly historic. CPAs, their clients and employers, bankers and other stakeholders have such an opportunity before them today, and it all starts with a letter. For more than 30 years, CPAs, lenders, private company owners, investors and others have said U.S. GAAP mainly reflects the public company environment, resulting in unnecessary complexity and a lack of relevance for private company financial statements. We’re now closer than we’ve ever been to changing this, and you have the ability to push this across the goal line - finally.

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Integrated Reporting Framework in the Profession’s Future

At the end of June, I had the pleasure of attending the International Integrated Reporting Committee (IIRC) Roundtable meeting at the Bloomberg global headquarters in New York. What a great event!

Business leaders from corporate, investor, standard-setting and regulatory communities sat down to discuss opportunities for creating a business reporting model that links environmental, social and governance (ESG) reporting to mainstream reporting. This integrated framework would then give investors and the public more comprehensive information on how organizations use their resources and perform over the long term.

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Welcome to AICPA Insights

Barry Melancon, CPA Feedback and exchange are essential components of communications today. And not just between a writer and a reader, but among the readers themselves. Through this interaction, a community is formed. A leader in social media usage by professional organizations, the AICPA has taken another step in providing a community platform among members and others through AICPA Insights, our new blog.

AICPA Insights will provide thoughts and opinions from experts about issues affecting the Institute, CPAs, the clients we serve and the businesses we work for. Our bloggers are members of the AICPA staff, and I’m sure they’ll bring a unique perspective to today’s issues. We’ll also feature guest bloggers covering a wide range of issues.

Later this week you’ll hear about efforts in developing an integrated reporting framework from our Business, Industry and Government team. My next post will focus on private company financial reporting, which I believe is one of the most important issues facing our profession and America’s small businesses and their financial statement users.

I’m excited about our new blog and look forward to all of you engaging in thoughtful discussion. I encourage you to write comments and share posts with colleagues to bring diverse views and experiences that will enrich our knowledge and perspectives.

When I became AICPA President and CEO back in 1995, we could not have imagined the technologies that someday would give us such incredible access to each other. Let’s build on the functionality and develop a robust conversation on everything important to all of us.

Thank you and enjoy.

Barry C. Melancon, CPA, President and CEO, American Institute of CPAs.

Why Tax Innovation Could Be Harmful to Your Practice

tax strategy patentsWhat do CPAs, estate planners, attorneys, and multimillion dollar corporations (or their chief executives) have in common? They are all affected by patents being issued on tax strategies or products that were already in use in the industry.

“The current statutory scheme leads the [Patent and Trademark] Office to issue many dubious patents because it does not have the resources to properly examine the patents.”  So testified David Simon, associate general counsel for the processor giant Intel at a congressional hearing.

Why should tax practitioners care? The concept of tax strategy patents (TSPs) may seem abstract or unimportant to many tax advisors.  And, frankly, I don’t blame them. Would anyone find out whether a client of a CPA in Reno lowered his tax liability through some complicated plan involving a charitable trust

Continue reading "Why Tax Innovation Could Be Harmful to Your Practice" »

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