Where 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
The 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
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.
Twitter 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?
Data 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.
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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Audit data standards are non-authoritative, uniform standards developed by the AICPA’s Assurance Services Executive Committee’s Emerging Assurance Technologies Task Force. The newly-released base standard, general ledger standard and accounts receivable subledger standard seek to increase audit efficiency and facilitate automation and enhancements in the analysis of business information.
In a pilot, run by Hewlett-Packard Company, internal audit staff was able to whittle a two-week data gathering process down to a mere 5-10 minutes. By mapping their general ledger data maintained in their enterprise resource planning system to the audit data standards, HP was able to shrink the data gathering timeframe down to the time it takes to check your morning email.
This blog post provides details and a background on audit data standards and, in this video from the AICPA’s spring governing Council meeting, I explain more about the HP pilot program’s success.
The AICPA and its task forces, like those driven by the Assurance Services Executive Committee, are committed to developing new technologies that will contribute to the effectiveness, timeliness and efficiency of the audit process. Those task forces include the Continuous Assurance Working Group, Audit Data Standards Working Group and Sustainability Assurance and Advisory Task Force. Audit data standards are just one piece of the puzzle but with the right innovative thinking and change management, the end result could revolutionize the audit process, open the doors to new service offerings and change the way CPAs work for the better.
If the future of data gathering is shrunken down to 10 minutes, what could be next? The possibilities are endless…
William R. Titera, CPA, Partner - Professional Practice - Auditing, EY.He is the Chair of the AICPA’s Assurance Services Executive Committee and is the current chair of ASEC’s Emerging Assurance Technologies task force.
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.
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?
It 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.
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.
In 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.
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.
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.
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.
Throughout 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.
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.
Would 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.
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.
Waste 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.
I 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
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
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
“Half of Americans would fail health insurance 101,” said Ernie
Almonte, CPA, chair of the AICPA’s National CPA Financial Literacy Commission.
Do 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.
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.
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.