Have you seen this heartwarming video “Made in America Again” on NBC’s Rock Center with Brian Williams? Reporter Harry Smith brings us the story of North Carolina businessman, Bruce Cochrane, who sent his furniture business’s manufacturing to China, only to bring it back to the U.S., revitalizing the community of Lincolnton in the process.
If you’re like any of the CPAs I know, you’re probably fishing receipts from shoeboxes right about now, brewing coffee like it’s a second job and greeting the sun most days from your office chair.
It is, after all, that most taxing of seasons: tax season.
But in those long hours and rigorous reviews you’re also getting fresh insight into the lives of your clients – insight into their incomes, spending habits, investments and life events. That’s why tax season is a great gateway to financial planning. And why CPAs are uniquely positioned to excel as financial planners.
CPAs may justifiably be wary of sharing personal and professional information on social media sites such as Facebook, Twitter and LinkedIn. After all, many CPAs spend their days verifying facts in the form of numbers – and adding “notes” in financial statements when there is any question of the veracity of those facts. How then could these same CPAs be comfortable tweeting about the newest changes in the LIFO accounting procedures or writing a blog post on whether book authors should deduct their home office on their income tax returns?
Welcome to the brand new world of online relationship building, where being willing to “put yourself out there” on social media can help you connect with current and prospective clients.
There has been quite a bit of legislative and regulatory activity over the past few months regarding Sarbanes-Oxley Section 404(b), which requires public companies to have an independent auditor attest to management’s assertions on internal controls over financial reporting. I want to bring you up to date on recent developments and the AICPA’s position on the issue.
Currently, an exemption exists for issuers with a public float of less than $75 million, a provision enacted as part of the 2010 Dodd-Frank Act. These smaller issuers were never required by the Securities and Exchange Commission to comply with Section 404(b) since enactment of SOX. However, legislative, regulatory, business and economic influences are combining to apply pressure to extend the exemption to larger public companies, believing it would reduce reporting burdens and spur job growth. The AICPA has consistently urged implementation of Section 404(b) for all publicly held companies. It has led to improved financial reporting and greater transparency, and the AICPA believes all investors in public companies should have equal benefit of the same protections.
Audit claims alleging failure to detect theft and fraud are not new. However, their frequency and severity are increasing dramatically. Between 2008 and 2010, the percentage of audit claims alleging failure to detect fraud and theft more than doubled, from 30 percent to nearly two-thirds of all audit claims. Equally alarming, many claims arising from tax, bookkeeping, compilation and review engagements now include similar allegations. By 2010, among all claims alleging failure to detect theft and fraud, 24 percent emanated from tax services, 17 percent from compilation and review services, 11 percent from accounting and other services, and 4 percent from investment advisory services. The remaining claims involved audits.
Each year the news media seems to begin their coverage of tax season a little earlier than the year before. The Media Relations team at the AICPA works year-round to educate reporters and provide accurate and actionable information for filers. This helps ensure that during tax season the public understands the value of a CPA as a tax preparer who can help them navigate the complicated and constantly changing IRS rules. With two months until the deadline to file most 2011 returns, I present to you, dear readers, some recent articles quoting AICPA staff and volunteer leadership on tax season issues.
Eileen Connelly of the Associated Press spoke to Melissa Labant, CPA of the AICPA’s Tax team for an article on how filers can find a tax preparer who they can trust. Labant suggests that, if you're expecting to claim a lot of business-related expenses, ask colleagues from work or professional organizations if they know a CPA who focuses on your industry. And along the same lines, if you own a small business, it’s crucial to ensure that the CPA has experience with small businesses. If they’ve worked with small businesses in your industry, that’s even better.
Each year during February, children across the U.S. are taught that there was a time, in our not so distant past, when whole populations of Americans were excluded from enjoying basic human rights because of the color of their skin. Last year, three CPA Legends, Nathan Garrett, Sr., Aurora Rubin and Jim White were asked to speak about their life experiences as CPAs and the challenges, triumphs and changes that have occurred in accounting. What is their common experience? They were among very few CPAs of color at the time they entered the profession.
Video is a great medium for firms to educate and inform staff, clients and potential employees. But sometimes the content can be a little mundane. Why not take those formal interviews and how-to series to the next level?
Pull back the curtain and let people know what you are really like.
Put a face to your firm. What are your employees passionate about? Is volunteerism important to you? Showcase your staff or fellow CPAs giving back to the community, like the Virginia Society of CPAs and the Illinois CPA Society did in their CPA Day of Service videos.
There are 29 million private businesses in this country, and every one of them needs their CPA like never before. Today’s complexities and post-recession external forces have made even the simplest business decisions difficult. As practicing CPAs, we face the very difficult dilemma of getting all the calendar year financial statements and tax returns out in a timely manner or seizing the time to capitalize on the opportunity to get deeper with clients and provide the value they seek from us. We all know what we should be doing, but the pressures of the busy season always seem to override them.
For decades practice management surveys consistently revealed that the main reason clients leave their CPA is a perceived indifference on the part of the CPA/CPA firm. CPAs care passionately about their clients. So what is it that we do to give our clients the feeling that we don’t?
While you are working late preparing tax returns, the AICPA is also keeping busy, evaluating proposed regulations and interpretations of current law that could affect your practice. What are some of the hot topics on our advocacy to-do list?
Let’s start with information reporting. Businesses that accept credit or debit cards are starting to receive the new Form 1099-K from their merchant card processing company that reports the gross amount they received during the prior year. The form was created to ensure that businesses report their credit and debit card income, especially from online sales. (The IRS just posted more information on its website about the requirements.)
The National Association of Colleges and Employers recently released the findings of their latest Job Outlook survey, which contained good news for current accounting students as well as recent accounting graduates. According to the survey, accounting majors who graduated in 2011 earned an average starting salary of $50,500, up 3.7 percent from the previous year and roughly 20 percent more than the average starting salary of all graduates. This increase isn’t an anomaly, according to Andrea Koncz of NACE, who told FINS.com that "entry-level accounting and finance jobs tend to see steady growth from year to year."