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20 posts from December 2013

CPA Exam Q1/Q2 2014 Score Release Timelines

The AICPA continues to post regular updates regarding the CPA Exam score release schedule in an effort to keep CPA Exam candidates informed. Updated score release timelines are announced twice annually on AICPA Insights and are also posted on the CPA Exam website. To eliminate confusion, candidates can use the table below to easily find their score release dates.

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Being THAT Guy

“When she said ‘I just paid off my student loans,’ I thought, WOW how did she do that. It makes you think what’s important and what’s not.”

“I like the positive role model thing.  I want to be this guy.”

These quotes are just a small sampling of feedback from the Feed the Pig’s target audience (25-34 year olds) after viewing the campaign’s newest PSAs during focus groups held earlier this year. Each TV spot highlights both the positive financial behavior—buying a home, saving in a 401(k) and paying off student loans—of one young adult or couple paralleled with the spending habits of their peers, who simply cannot believe there’s any money left over at the end of the month to save. (View all the new PSAs on the new Feed the Pig website.)

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Accounting Doctoral Scholars Making an Impact in the Classroom

Ads2The first graduates from the Accounting Doctoral Scholars Program taught their first semester of college accounting courses this fall. The ADS Program, which was designed to address the nationwide shortage of accounting faculty, has supported more than 110 audit and tax professionals in their pursuit of PhDs in accounting. The first 12 graduates of the program have obtained jobs on college campuses.

“Having the first Accounting Doctoral Scholars begin teaching undergraduates is a real milestone for both the program and the profession as a whole,” said Steve Matzke, Director of Faculty and University Initiatives at the AICPA, who has managed the ADS Program since its launch. “While there is still more work to be done, we are confident that the ADS Program will ultimately fulfill its mission of helping secure the future of the profession by incrementally increasing the current number of accounting faculty who hold PhDs.” 

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Top Blog Posts of 2013: Vote for Your Favorite

Top-10

As 2013 comes to a close, I thought it would be interesting to see what topics “moved” and “shaked” the CPA profession this year. Specifically, we thought you would be interested in the AICPA Insights blog posts that most resonated with you and your peers, as measured by pageviews. Surprisingly, no one particular topic overly dominated this list. Additionally, most of these blog posts originated in 2013, but one actually went live in 2012 and had enough staying power to carry over to 2013. See our top stories and catch up on the year's news below and then vote for the one you like best, or write in your own top choice!

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Hot Topics and FAQs from the A&A Technical Hotline

The AICPA Technical Hotline provides non-authoritative advice to members on matters of accounting and financial reporting, audit, attest, compilation and review service standards. This podcast, the AICPA Insights Live webcast on Nov. 22, addresses some of the more commonly asked questions over the past year in the areas of audit, attest, compilation and review engagements. Highlights include the new clarified audit standards, verification requests, supplementary information and Service Organization Controls reporting. (Email subscribers can listen to the podcast on our website).

Hot Topics and FAQs from the A&A Technical Hotline

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Avoid These Holiday Social Media Scams

Scam-alertAccording to USA Today, the holiday season is a big time for online scams, and this year the focus will be on phones and social media. While most of us can spot spam in our email inbox, social networking scams are becoming more common and aren’t quite as easy to detect. Research shows one in 10 users have fallen for a social media scam. And to be honest with you, I am one of those who have been duped. It seemed so simple: share an image on Instagram, add a hashtag and BAM…free Ray Bans. Needless to say, I never received the sunglasses.  Luckily, I quickly came to my senses and changed my password.

It’s easy to get caught up in a bogus offer, but remember if it seems too easy to be true…it likely is!

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Volcker Rule Could Affect Community Bank's Year End Bottom Line

English: Paul Volcker, former head of the Fede...Paul Volcker, former head of the Federal Reserve Board . (Photo credit: Wikipedia)

On Dec. 10, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission released their rule “Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds,” otherwise known as the Volcker Rule. This rule has some real implications on the banking industry, including community banks, of which CPAs should be aware.

Under the Volcker rule, ownership interests in covered funds (in other words, investments) will not be permissible and will have to be divested by 2015. Ownership interests in covered funds subject to the Volcker rule include many pooled trust preferred collateralized debt obligations, certain collateralized loan obligations and possibly Real Estate Mortgage Investment Conduits. At this conjuncture, the full scope of investments impacted is unknown.

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Final Tangible Property Rules – A Win for Small Business?

Black-eyed-peaOne of the New Year’s superstitions says that you should eat black-eyed peas for good luck and financial prosperity. If you (or your client) are a business owner who hates black-eyed peas, don’t worry. You got a bit of luck already. In issuing the final tangible property (aka repair) regulations, I believe the IRS went above and beyond to make the final regulations more taxpayer friendly and tried to reduce the administrative burden from the draft regulations. 

When a business buys equipment for their business, it may qualify for an immediate tax savings by expensing the full purchase price instead of depreciating it over its useful lives (e.g., the section 179 deduction and 100% bonus depreciation). However, these options have restrictions. For example, the section 179 deduction requires taxable income and imposes an overall deduction ceiling and the bonus depreciation has a new property requirement (e.g., refurbished assets are not eligible). With well thought out planning, businesses can maximize the tax savings using both options.  

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Does Your Organization's Information Architecture Support Effective Reporting?

Data-analyticsIn order to make the right decisions, you have to have the right information. While that statement seems overly simple, the truth is that many organizations often rely upon the wrong information when making important strategic decisions. The issue of Enabling Decision Support and Analytics was one of the top ten technology initiatives reported by the 2013 North America Top Technology Initiatives Survey, a joint effort between the AICPA’s Information Management & Technology Assurance Division and the Chartered Professional Accountants of Canada.

Sometimes having the right information to make the right decisions does not happen when an organization's information architecture does not support effective reporting or management has not supported an investment in business intelligence-related projects. As a result, management may receive inaccurate or incomplete reports and may be at greater risk of making poorly informed business decisions. The issue of enabling decision support and analytics is a concern for many organizations as better technology can provide more data in less time than ever before. 

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Q&A with Barry Melancon, CPA, CGMA, AICPA President & CEO

Q&AWhat opportunities and challenges does the head of the AICPA foresee for the CPA profession in 2014? What were the profession’s significant achievements in 2013? Barry C. Melancon, CPA, CGMA, AICPA president and CEO, answers these questions and offers insights on how the profession will continue to adapt to today’s changing environment, addressing clients’ and employer’s needs. Citing successes with regulation, legislation, recruitment and positioning the profession for the future, Barry strongly believes CPAs will build on a solid foundation.

1. What were the AICPA’s legislative or regulatory priorities this past year and what’s in store for 2014?

We continued to have success in the advocacy area in 2013. In one significant victory for the profession and the public, the Securities and Exchange Commission exempted CPAs from registration as municipal advisers when they are providing certain accounting or attest services. We urged the SEC to exempt CPAs from the definition of municipal advisers after it had indicated that anyone performing accounting services for governments would be defined as a “municipal adviser.” It was critical that our voices be heard on this issue because such a broad definition would have made it more difficult for CPAs to serve governments and potential investors without taking on unnecessary and duplicative costs or compliance burdens.

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CPAs in Business and Industry Optimistic for 2014 Revenue Growth

Revenue-growth-2014The end of the year is always a good time to reflect on the past and consider the future. So perhaps it’s no surprise that the latest AICPA Business and Industry Economic Outlook Survey has inspired me to share some of my reflections and thoughts with you.

Thinking back to the fourth quarter of 2012, CPAs in industry were deeply concerned about the economy, especially with the “fiscal cliff” looming large. Fortunately, we had a last minute resolution to the dilemma on December 31, 2012 and concerns about the overall economy and politics abated somewhat in the first half of 2013. Optimism about the US economy improved, and the number of CPAs saying they were optimistic about their companies and having plans to expand also increased.

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Latest Trends Affecting CPAs

In our last live blog from the 2013 AICPA Insights Live webcast series, Jim Metzler, CPA, AICPA Vice President - Small Firm Interests, Public Practice and Global Alliances, discusses the trends affecting CPAs, the challenges and opportunities practitioners face, as well as best practices being used at successful firms across the country. (Email subscribers: Read the live blog on our website.) Don't forget to register for the last AICPA Insights Live webcast, Worst IT Practices CPAs Can Advise Businesses to Avoid, 1 to 2 p.m. ET on Dec. 20.

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In the News: Year-End Tax Moves for Businesses and Individuals

TaxesAs the calendar turns to December, AICPA experts have been speaking to reporters to educate the public about tax moves they can make before the end of the year. A number of these tips involve tax breaks that will either expire, or whose futures are uncertain and the steps that businesses, individuals and homeowners can take now to save themselves money when they file their 2013 return.

Businesses

Jeffrey Porter, chairman of the AICPA’s tax executive committee, spoke to CFO.com about corporate tax provisions which are set to expire after 2013.

According to Porter, one of the most important of the temporary tax provisions set to expire after 2013 is the 50 percent bonus depreciation, which was enacted as part of economic-stimulus legislation.

“Let’s say you’re a CFO, and you know you need to purchase a million-dollar piece of equipment. If you purchase it before the end of the year, you can get a $600,000 write-off in the first year,” says Porter.

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PCC Standards for Goodwill: What Valuation Specialists Need to Know

Valuation-specialists-goodwillA new standard establishing how private companies account for goodwill is not expected to cause immediate challenges for valuation specialists, but the impact could be more significant if the new rules are adopted for public companies down the road.

The standard is the work of the Private Company Council, an advisory group to the Financial Accounting Standards Board formed last year to address possible necessary changes to U.S. GAAP for non-issuers.  On Nov. 25, the FASB endorsed a PCC proposal to provide alternative accounting for goodwill by private companies. Goodwill typically arises from business combinations. In financial reporting, goodwill is the residual amount remaining after the fair values of all identified assets acquired less liabilities assumed have been subtracted from the acquisition price.

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10 Things You Should Know About Internal Controls

The following podcast is from the AICPA Insights Live webcast series and covers 10 things one should know about internal controls as presented by Findley Gillespie and Steven Gin of Moss Adams. The list includes: 

  1. Why a Training on Risk and Controls?
  2. Assessing the State of Controls at Your Organization
  3. Controls Maturity across the Three COSO Objectives
  4. Entity-Level Controls
  5. Information Technology Controls
  6. Segregation of Duties Controls
  7. Fraud Prevention Controls
  8. Documenting Policies and Procedures
  9. Responding to Deficiencies
  10. Recognizing Common Deficiencies

10 Things You Should Know About Internal Controls

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Running Your Business Like an Olympic Athlete

Turin-olympic-ice-skatersOlympic athletes generally train every day – continuously monitoring their progress to make sure they're performing to the best of their abilities. Can you imagine an Olympic athlete training once a year and then trying to compete against those who kept to a strict, regimented training schedule?  Like top athletes, successful businesses need to keep a constant pulse on how they're doing so they can address what's working and what needs to be tweaked – in order to always be on top of their game.

Companies can add value to their activities by utilizing Continuous Auditing and Monitoring, which is supported by tools and programs that can assist in mitigating risks and detecting fraud. Additionally, Continuous Auditing and Monitoring provides a powerful deterrent to those tempted to commit fraud, as these functions can take place frequently or continuously throughout the year. 

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Will Your Clients or Customers Pay in Bitcoin?

Alternative Currency Could Change Financial Landscape

In celebration of the AICPA’s 125 anniversary last year, we produced a powerful retrospective called Evolution of a Profession. The six-minute video traced the accounting profession’s changes from its origins 8,000 years ago through the present day.

Within that evolution were the notions of currency and exchange. Over time, society has changed the various ways goods and services are purchased. Hard as it may be to believe, at one point the primary currency was clams. The same is true of livestock, land and spices. All eventually gave way to something else as our forms of money have been “refined” over and over again.

Bitcoin Timeline

  • Jan. 2009 - First Bitcoin transaction
  • Jul. 2013 - Thailand officials declare the currency illegal in all its aspects
  • Aug. 2013 - U.S. federal judge rules Bitcoin is a currency
  • Oct. 2013 - $28 million in Bitcoins seized during raid on an online drug marketplace
  • Nov. 2013 - Cyprus’ largest university says it will accept Bitcoin as payment for tuition and school fees
  • Dec. 2013 - China bans the country’s financial institutions from handling Bitcoin transactions

Four years ago, a new alternative currency emerged and the accounting profession needs to watch how it develops going forward. It’s a virtual currency known as Bitcoin. Dozens of virtual currencies exist but Bitcoin has garnered the most attention. The news media has been covering the currency in earnest since the spring, including its growing acceptance among businesses and even a foreign university.

What does that mean for our profession? First, if Bitcoin were to become a mainstream currency option, firms would have to consider clients using Bitcoin as a form of payment for services, and a business might want to accept Bitcoins for purchases of its products.  

More broadly, how might financial statement preparation and assurance on those statements need to adapt? Bitcoin is not only a currency, it is also a commodity – one with a finite supply (currently 12 million units and continually increasing to a maximum of 21 million units).  Therefore, depending on the demand for it at any given time, its value could fluctuate wildly – even within the same day. In 2013 alone, a single Bitcoin unit was valued at less than $20 and hit a high of more than $1,000 in late November. So, how would a CPA value that money, and is it even an asset? And since Bitcoin largely operates through online exchanges, it functions outside of the traditional banking system, where balances and transactions can easily be confirmed.  In terms of taxes, the Internal Revenue Service has said Bitcoin transactions could fall under several categories: property, financial instrument, foreign currency or barter.

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The New AICPA Personal Financial Planning Standards

PFP-standards-word-cloudThe increased demand and projected growth of personal financial planning services in areas such as estate, retirement, risk management and investments have brought the accounting profession to an important crossroad. To adapt to an evolving profession and regulatory landscape, in addition to the existing regulatory framework for CPAs, the AICPA is promulgating the Statement on Standards in Personal Financial Planning Services.

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Year-End Planning: Roth IRA Conversions

The purpose of Roth IRA conversions as it relates to the Net Investment Income Tax is to lower modified adjusted gross income below the threshold amount over the long-term. Some benefits of Roth conversions include lower overall taxable income, tax-free compounding, no required minimum distributions at age 70 ½, tax-free withdrawals for beneficiaries and more effective funding of the "bypass trust." Converting to a Roth IRA creates opportunities to reduce the overall size of the estate and to take advantage of greater tax-free yields and favorable tax attributes. Bob Keebler walks you through the mathematics of conversion through examples, tactical considerations and a four-step process for Roth conversion planning. Visit the AICPA PFP Section’s Post American Taxpayer Relief Act and NIIT Toolkit for more in-depth resources on planning in preparation for year-end.

Roth IRA Conversions

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How to Convince Leadership to Undergo an SSAE 16 Examination

SSAE-16Certainly, the primary reason service organizations undergo a Statement on Standards for Attestation Engagements 16 examination is to respond to customer demands. Although waiting until the customer asks may make good business sense, proactively undergoing the examination can offer the service organization many benefits. Yet even with the inherent benefits, the SSAE 16 examination can be difficult to sell to executive management. Here are the top five reasons those managers should choose to undergo an SSAE 16 examination. 

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