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17 posts from September 2013

AICPA Forensic Accounting Credentials Are Attorneys’ Top Choices

Expert-witnessWhere do attorneys turn when they need to make a compelling case on a critical financial issue? That question can be answered by considering what kind of expert witness they employ. In a recent compilation of accounting expert witnesses who have been mentioned in court opinions or decisions in 2013, the vast majority were CPAs. (Disclaimer: The article was by Ashish Arun with Expert Witness Profiler. AICPA FVS Section Members receive a discount to Expert Witness Profiler, but we were not involved in this study.) Among the 189 accounting experts cited, 166 were CPAs. For those with specialized credentials on top of the CPA, the AICPA’s credentials were clearly preferred over those of other credentialing organizations. The Certified in Financial Forensics credential took the number two spot at 58 experts and the Accredited in Business Valuation credential took number three with 54 testifying experts. The CVA at 31, CFE at 30 and the ASA at 18 were well behind the AICPA credentials on this list.

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The Tax Realities of “Breaking Bad”

Breaking-bad-taxThe final episode of “Breaking Bad” is here. But I don’t want to discuss what happens in the finale or even this season. Instead, I want to focus on the tax implications of what Walter White and his alter ego Heisenberg have done. (SPOILER ALERT: There are no spoilers contained herein from any episodes airing in 2013, but there may be some if you haven’t caught up to the last season).

Tennessee's "crack tax" (struck down as unconstitutional not long after its creation) notwithstanding, the Internal Revenue Service has a history of charging those involved in illegal activities with tax evasion. Al Capone and Soviet Spy Aldrich Ames both were charged with tax evasion after they did not report the money made from their illegal activities. After all, the IRS instructs taxpayers to report any illegal activity income on line 21 of the Form 1040, where other income is reported. So in reality, someone committing crimes and earning revenue for this activity could avoid tax evasion charges by reporting it on line 21. But then of course you've just admitted to conducting illegal activities. While technically confidential between you and the IRS, the common belief is that the IRS will find a way to alert the authorities, either through disclosure in an audit or interdepartmental alliance. So, most people don't report their illegal activities, don't incur tax and go on tax-free until they get caught.

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EXTRA! EXTRA! Meet the Brains Behind @AICPANews

Hello_my_name_isAICPANewsTwitter has increasingly become the go-to place for industry news. Recently I sat down with James Schiavone, AICPA media relations manager and the brains behind the @AICPANews Twitter account, to discuss what he has learned from managing this thriving social media channel.

Q) The @AICPANews account was stated in March of 2009. More than 3,500 tweets and 17,000 followers later, what have you learned?

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Beyond Compliance: The Benefits of XBRL

XBRL-tabletData is the next great commodity resource. The equivalent of all the data that existed up to 2003 is now generated in two days, and 90% of the world’s total data was created in the last two years alone. Now comes a powerful new form of data, one that speaks the language of business. By the nature of its format, XRBL, or eXtensible Business Reporting Language, brings transparency to business information so investors can analyze data more easily and make informed investment decisions.

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Audit Data Gathering in Ten Minutes or Less

Whether you were the auditor or the management in charge of an audit and even if you’ve tried to forget it, I’m sure you remember your first audit. Do you remember how long it took? A couple of hours? A few weeks? What was it like for the audit team to get all the data together? A picnic, right? I could be wrong, but I’m going to guess that’s not likely.

Imagine a world where it only takes 10 minutes to gather company data. Imagine putting standards and processes in place that could provide you with the data you need today. You may think that’s impossible, but we’ve seen it done. Whether it is for internal analysis, external audits, or company oversight, it is becoming increasingly important to obtain data on demand.  With the help of the AICPA’s new, non-authoritative audit data standards, this is now possible.

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Assurance Services 101: New Tool for Providers and Users of Business Info

Business-meetingImagine this scenario: On the hunt for additional funds to jumpstart their business, a potential client comes to you. The CEO has just visited the local bank, but the bank manager will not agree to lend the needed funds without assurance on the business’ ability to generate profits. Now, the potential client is at your doorstep asking if you can provide assurance.  

“Perfect,” you say. Your firm provides assurance services that instill confidence and assist clients in making insightful decisions. Here’s the thing: your prospect has no background on assurance services. Where do you begin to explain?

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In the News: CPAs Predict Uptick in Hiring

AICPA Economic Outlook SurveyIt is--and has been--a tough time to look for a job in the United States (unless, of course, you are an accounting graduate). However, there may be some hope on the horizon for the legions of unemployed.

Business executives--while still expressing caution--continue to raise their expectations for hiring in the coming year. That’s according to the third quarter AICPA Economic Outlook Survey, a survey of 1,228 CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the survey—remained unchanged from last quarter at 69 points. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment.

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The Real Obstacle to Tax Reform? Let’s Look in the Mirror

Self-reflectionIn one of the better teen movies of the '80s, "Better Off Dead," a paperboy ruthlessly stalks the main character in an intense pursuit of what he is owed, repeating, “I want my two dollars.”  

Johnny the paperboy is not alone, as the senators who proposed a blank slate approach to tax reform found out.  And of course, taxpayers want a lot more than two dollars.   I admit, I am one of those “what’s in it for me?” taxpayers but I am slowly coming around to a different philosophy. 

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Lifelong Learning: The Fuel Driving Value Within an Organization

At the last meeting of the AICPA’s governing Council, I had the pleasure of moderating a panel discussion between three esteemed colleagues--all of whom are CGMA designation holders. Along with Bill Schneider, CPA, CGMA, Deirdre O’Connor, FCMA, CGMA and Ash Noah, CPA, FCMA, CGMA, I spoke about the latest issues affecting management accountants in business and industry--and how the education and experience that lead the earning the CGMA designation, and the continued learning that each of them do, helps them shape their unique, but equally phenomenal careers.

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IRS Guidance Following DOMA Decision

In the wake of the Supreme Court’s Windsor decision invalidating a portion of the Defense of Marriage Act, the Treasury Department and the Internal Revenue Service announced on Aug. 29 that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also issued a revenue ruling (Rev. Rul. 2013-17) and FAQs providing guidance on the topic.

In short, regardless of what state the same-sex couple currently lives in, if they were legally married in a jurisdiction that recognizes same-sex marriages as legal and valid, then same-sex spouses are married for all federal tax purposes. This podcast from Bob Keebler covers Revenue Ruling 2013-17, background on the DOMA decision, income, estate and gift tax planning implications, as well as portability, IRAs and retirement plans.

IRS Guidance Following DOMA Decision

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

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Vets Need Our Help: Now

Military-savingsThroughout history, our returning veterans have always faced challenges. However, recent reports have troubled me, showing that returning vets are facing more challenges than ever before.

According to a March 2013 study published by the Institutes of Medicine at the request of Congress, almost half of the 2.2 million troops deployed in Iraq and Afghanistan report difficulties on their return home.

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Would You Recommend the CPA Profession to Your Kid?

Professional-kidsWould you recommend the CPA profession to your kid? This is a question I used to ask the partners of my firm in Buffalo. I did our firm’s recruiting and felt this was an important question, because every new hire was someone’s kid. And in a small market like Buffalo, chances were, I actually knew their parents. I had to look those parents in the eye and tell them that when their child accepted a job with my firm, it was the right career move. I felt it was important for the partners to understand, if there was something in the firm that wasn’t good enough for their own kid, they had the power to fix it.

That same question sparked some lively discussion when I posed it to a group at the AICPA’s E.D.G.E. conference in Austin, Texas, this month. It goes without saying that the CPA profession provides virtually unlimited opportunities, offering a solid set of core competencies that can be put to work in a wide range of situations. Our CPA training and credential have formed a solid stepping stone for many of us, myself certainly included, to a very rewarding career.

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New Gmail Tabs Could Hinder Efforts to Reach Your Customers

Not too long ago, Gmail started rolling out a new layout which features different tabs to group your emails. By default, Gmail users see three tabs: Primary, Social and Promotions. Users can now find their emails on one of these tabs, based on Gmail’s settings. This change doesn’t just affect Gmail through your browser, but also through the Gmail app on your smartphone. (If you access your Gmail through IMAP or Exchange settings on your smartphone, you will still see all emails in one inbox.) Google says it made this change to give users more control of their inbox.

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Accounting for the Lean Transformation

Manufacturing-wasteWaste costs money. Companies lose money on wasted time, wasted effort and wasted material to the tune of millions of dollars per year.

Conversely, removing waste saves money.  And when it comes to keeping things on the right side of the ledger, it's far better to keep track of money saved than money wasted.

The Lean approach, especially as refined by long practice at Toyota and other manufacturers, systematically removes waste, frees up company resources, and increases a company's chance at long-term success. Money saved through Lean transformations can go toward capturing more market share, for instance, by improving existing products or developing new products for new markets.

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Half of U.S. Adults Fail ‘Health Insurance 101’

Healthcare-questionsI dislike going to the doctor – who doesn’t? However, in recent years I’ve found that I dislike the confusion I feel when I attempt to understand the vagaries of my healthcare provider’s policies even more. While understanding the policies can be frustrating, not understanding the basic terms of health insurance plans can lead to bad decision making and wasted dollars. And, unfortunately, a recent AICPA survey found that many Americans don’t understand these basic terms.

The telephone survey, conducted late last month for the AICPA by Harris Interactive, found that more than half, 51 percent of respondents, could not accurately identify at least one of three common health insurance terms: premium, deductible and copay.

A third, 34 percent, thought a premium was an expense at the time of receiving medical service or a prescription; more than a quarter, 27 percent, thought a copay was the cost of obtaining insurance; and 12 percent did not know a deductible is the money one pays before an insurance company makes payments.

“Half of Americans would fail health insurance 101,” said Ernie Almonte, CPA, chair of the AICPA’s National CPA Financial Literacy Commission.

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Ensuring Privacy in an IT World

PrivacyDo you expect a right to privacy? Do your clients? The truth of the matter is that the right to privacy is an ever-changing, ever expanding concept that continually needs to be redefined. That's especially true when it comes to ensuring privacy in an IT world. Ensuring privacy, which concerns the rights and obligations of individuals and organizations with respect to the collection, use, retention, disclosure and disposal of personal information, comes with risks.

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3 Crucial Areas of Focus for Benchmarking

Maybe it’s an inherent competitiveness or just the pursuit of improvement, but it is commonplace for people to seek out benchmarks that they can use to assess their relative position or performance. It interests people to know how they compare to their peers. Benchmarks have a place in business, too, and can be an invaluable instrument to help business owners succeed.

Trusted-business-adviser

Equipped with an intimate knowledge of their clients’ finances, accountants are uniquely positioned to help their business clients think strategically to achieve success. With assistance from accurate and relevant data, accountants can help their business clients by comparing their financial performance to the performance of their peers. This ability to effectively benchmark is one way to transition from a quarterly tax specialist to a trusted business adviser.

Assuming that accountants are able to get their hands on reliable industry data, it becomes necessary to isolate a few specific metrics that will be especially useful across industries. While different industries and companies measure success in their own unique ways, a few metrics are almost universally indicative of a company’s financial health.

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