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13 posts from September 2014

Boost Your Bottom Line with Predictive Analytics

Traffic-lightsWouldn’t life be great if we all had a crystal ball? While wizardry and fantasy may sound like a great way to see the future, no one would actually advise a client or employer on assumptions based in magic and hearsay.

Typically, we serve our clients and employers based on fact-based historical reporting, which tells us where we are and where we’ve been. However, there is another way to offer guidance and opinion: predictive analytics, a process-driven activity that combines facts about the past with inferences to anticipate the future.

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Should You Sign a Business Associate Agreement Under HIPAA?

HIPAA-complianceDr. Smith left you a voicemail at 10 p.m. on a Sunday night. You couldn’t make out the entire message due to a weak cellphone signal and background noise, but you gathered he was talking about the Health Insurance Portability and Accountability Act and needing you to sign something called a Business Associate Agreement.

Dr. Smith is an excellent dermatologist, but you know from doing his taxes that regulatory compliance isn’t necessarily his forte.

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Implementing the Future of Learning Recommendations

In May 2014, the AICPA’s Future of Learning Task Force announced four broad recommendations to positively impact the future of learning for the CPA profession. The recommendations are:

  1. Innovate and experiment
  2. Ignite a passion for learning
  3. Make learning personal
  4. Measure what matters

These recommendations and insights, as well as other resources related to the initiative, are now available on the new Future of Learning site. If you haven’t yet visited the site, I highly recommend you do so to gain insight into the drivers behind the initiative and its recommendations. Navigating the site will take you on a journey that explores change within business, the evolving workplace and shifts in the CPA profession. You’ll gain a better understanding of trends impacting learning, ranging from how technology is rapidly changing delivery options to the impact of Millennial expectations on learning and the workplace.

In this four-part blog series, we’ll go in depth and look at each of the task force recommendations, as well as ways you can begin to implement them.

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Laying the Final Bricks of the CGMA Foundation

LibraryAt launch in 2012, we promised our members and the global employer market that the Chartered Global Management Accountant designation would recognize and support accounting professionals who know how to connect finance to strategy. Backed by the combined resources and reputations of the AICPA and CIMA, CGMAs would be recognized as finance leaders who see across the entire organization to make better business decisions.

In the last few months of 2014 we’ll deliver the fundamental pieces that will help define the profession of management accounting and solidify the CGMA’s position as the premier global management accounting designation.

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The DATA Act: What CPAs Need to Know

Are you aware that the new Digital Accountability and Transparency Act, signed into law earlier this year, will have a significant impact on CPAs who work in government and or interact with the federal government?

Known as the DATA Act, the new law calls for the adoption of a data standard that is “a widely accepted, nonproprietary, searchable, platform-independent computer-readable format” to report federal contract, loan and grant spending information by federal programs. CPAs need to be aware of the changes so they can better serve their clients and be prepared to help agencies meet the new requirements.

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Value Pricing Tax Services: Don’t Leave Money Behind

Have you ever stopped and asked yourself why you would ever want to make a tax return engagement more efficient, if it really only means you will charge less over time? 

Stay with me here while I explain how value pricing and efficiency can go hand-in-hand.  Below is a hypothetical chart of fees incurred to prepare a 1040 return, as well as the amounts actually invoiced.  I am going to explain how you are leaving money on the table.

Year

Hours

Rate

Fees

Discount

Invoice

1

10

$150

$1,500

(400)

$1,100

2

8

150

1,200

(80)

1,120

3

6

150

900

 

900

Year one is largely spent reviewing the prior year returns to familiarize yourself with the client and to establish your internal workpapers. This will naturally take more time. So when you bill the client and see that you have incurred $1,500 in fees, your gut might tell you that the return is not worth that amount. So, you discount the fees to reflect the amount that you a) think the return was worth and b) think the client is willing to pay. 

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Increased Demand Predicted for Forensic and Valuation Services

FVS-SurveyAs part of its commitment to serving member needs, the AICPA Forensic and Valuation Services Section regularly surveys FVS professionals to get a sense of the state of the practice today and the trends these professionals will face in the short term. According to the recent 2014 AICPA Survey on International Trends in Forensic and Valuation Services, done in conjunction with CPA Canada, there is currently a healthy demand for forensic and valuation services, and very strong growth potential for the future. This is good news.

The survey found that 76 percent of forensic and 54 percent of valuation respondents expected their practices to grow, with the majority expecting growth of between 10 percent and 50 percent over the next two to five years.

Here are a few predictions — by practice area — from the survey:

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The Global Future of Financial Literacy

September is underway and that means it’s back to school for students. As teachers finalize their lesson plans, a growing number may be incorporating financial literacy education. In fact, many schools around the country have already begun integrating financial literacy into their curriculums. And it makes perfect sense.

Helping young people understand financial issues is a matter of great importance. Younger
generations are facing an increasingly complex financial field, compared to their parents, and they are more likely to shoulder more financial risks in adulthood, especially when it comes to saving, planning for retirement and covering healthcare needs. On July 9, the Global Financial Literacy Excellence Center in collaboration with the U.S. Department of Education, the U.S. Department of the Treasury, and the Consumer Financial Protection Bureau hosted the U.S. release of the 2012 Programme for International Student Assessment financial literacy data. The assessment tested 15 year-olds on their knowledge of personal finances and ability to apply it to their financial problems. This is the first large-scale international study to assess the financial literacy of young people.

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19 Years Until Social Security Trust Fund Runs Out

English: Scanned image of author's US Social S...(Photo credit: Wikipedia)

The government is projecting that the Social Security Trust Fund could run out of cash by 2033. While 19 years might sound like a long time, many of us have clients in their 30s and 40s who want to know that they’ll receive all of the Social Security benefits due to them when they retire. Of course, CPAs and those of us who offer financial planning and estate services caution our clients not to depend solely on their Social Security checks to carry them through their later years.

It’s alarming that the money may, indeed, run out—and even though this news is nothing different that what we’ve already heard about the money—I can’t help wondering how many Americans aren’t familiar with how dire the situation may be.

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Reimagining Auditing in a Wired World

Audit-quality-word-cloudHave you ever wondered what a day in the life of an auditor will look like in the near future, and how it will be different from today’s practice? Here is a glimpse…

You enter the audit room at 7:30 a.m. on Tuesday morning as the external audit partner of XYZ Enterprises, Inc. After settling in, you sign into AART, the audit firm’s Automated Audit, Reporting and Tracking system that was developed to leverage the widespread availability of information on a 24/7 basis. AART’s technology monitors XYZ Enterprises’ controls, transactions and account balances continuously.  As you review the dashboard you notice that all of your audit status indicators are green, except for one.  You also notice that you have been copied on a message that AART sent to your controls team notifying them of a modification to a key control parameter in the centralized enterprise resource planning system.  You begin looking into the situation.      

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Top 5 Website Best Practices for More Leads

LaptopAccording to Google, 81 percent of searches for products and services now happen online. By the end of 2015, the majority of web searches will be via a mobile device. Your CPA firm’s website needs to be easily found in search results to ensure you are able to capitalize on this game-changing trend.

Refreshing your marketing to maintain its effectiveness despite the change in how potential clients find your services is not as difficult as you might think. The right approach is to focus on the areas that offer the biggest return and commit to an ongoing improvement program. Your core digital asset is your website. It will deliver the first impression to cold prospects and can reinforce referred prospects’ positive view of your firm. The goal in both cases is to give the visiting prospect a reason to take the next step and contact your firm—lead conversion.

Here are five steps you can take to increase the number of lead conversions from web visitors:

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Promoting CPAs’ Enduring Value in Changing Times

International-meetingI recently read an article on disruptive innovation that made me consider how much the accounting profession has changed over the years. The article talked about how well some very traditional lines of business are performing, including Swiss watches, independent bookstores and pricey fountain pens, even in our volatile times. These products have enjoyed prolonged success because the business people behind them have emphasized the products’ unique and enduring value, something that the market recognizes even in the midst of continuous change. Swiss watches are seen as quality status products, independent bookstores have positioned themselves as personalized social destinations and fountain pens provide a classic writing experience with a smoother and more professional look than inexpensive and more readily available ballpoint pens.

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Top 3 Confusions Regarding GAAP’s New Public Business Entity Definition

Three-questionsIs your client’s organization considered a public business entity under the new U.S. GAAP definition? Queries sent to the AICPA’s Private Company Practice Section Center for Plain English Accounting indicate that members continue to struggle with whether or not their entity qualifies to use the Financial Accounting Standards Board’s new Private Company Council accounting alternatives.

In order to help CPAs better understand some of these nuances, the AICPA has published the CPEA Special Report: Considering PCC Accounting Alternatives, which provides vital information about PBE qualifying criteria and clarifies definitions.

Understanding whether a reporting entity is a PBE is the first step in understanding whether it can apply the PCC accounting alternatives. Some of the most common areas of confusion regarding an organization’s definition as a PBE surround broker-dealers, equity-method investments held by PBEs, and governmental units or entities. The following explanations should help to clarify when to use PCC accounting alternatives.

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