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12 posts from October 2014

Protecting Yourself Online

PrivacyWhat were you doing at 7:32 p.m. on April 23, 2011? Chances are that Google, Facebook, Microsoft, Apple, your phone company and your Internet Service Provider know. If you share a computer, all of the other users may know. Your employer may know. As will the government, if it so chooses. And if this isn’t enough, they may even know where you were when you were doing it.

Is this a problem? Well, that depends. Do you like getting bombarded with online ads and email obviously based on your recent surfing habits? Are you researching that perfect gift for your wife or husband, or planning a big surprise party? Perhaps you are pregnant or researching medical symptoms and don’t want anyone to know?

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3 Social Security Planning Opportunities for Survivors

Social-security-planningSocial Security survivors’ benefits are similar to Social Security retirement benefits, but there are certain planning opportunities available to the widowed spouse. As the family’s trusted advisor, make sure you understand these opportunities in order to give your clients the most beneficial advice possible. Here are three planning opportunities for survivors:

1. Planning for Spousal Income Needs. Depending on the age of the parents and children, there is a gap in the survivors Social Security benefits. From a financial planning aspect, it is imperative that you discuss the impact this gap will have on their financial goals. After all, it will affect them for years to come and will determine their income.

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Creating a Bright Line between Accounting and Reporting

Grease (film)(Photo credit: Wikipedia)

Let’s go back in time to December of 1978. You are longing for the weekend and thinking about going to see the new movie “Grease”that everyone is talking about. You need to get away from the three channels on your television set, as all that you see is the news about anti-Shah protestors in Iran and the craziness of someone giving a baseball player $32 million in a four-year contract.  Maybe President Carter can do something to get us back on track. Well, at least you have your brand new Betamax and can record whatever television you miss – as long as it is not more than one hour long...

At work, your client has asked you to perform bookkeeping services for them. The client needs you to process their payroll, record certain journal entries in their general ledger book and calculate the amount of sales tax that they need to remit to the state. Additionally, the client needs you to prepare monthly financial statements for the owners and the bank that provides the entity’s line of credit. You sit down with a few sharpened pencils and ledger paper and draft those financial statements. The recently issued Statement on Standards for Accounting and Review Services No. 1, Compilation and Review of Financial Statements,requires that you, at a minimum, perform a compilation engagement with respect to those financial statements that you submit to your client. So, you issue a compilation report along with those financial statements. The application of the compilation literature is easy to understand and apply.

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Peer Review Focus on Maintaining Independence

Peer-reviewAs part of its on-going commitment to helping members maintain and enhance audit quality and to improve the consistency of quality across the profession, the AICPA recently launched the Enhancing Audit Quality Initiative. Because of the critical nature of the initiative, the AICPA Peer Review Team will take immediate action on two facets of the initiative: identifying emerging industries and high priority audit areas and applying a combination of outreach, training, and robust peer reviews in these industries and areas.

The Peer Review Team has developed a list of potential “deep dive areas” or emerging industries and risk areas, derived through careful analysis of the following:

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The Science Behind Social Security Benefits Calculations

Social-securityWhile the Social Security Administration calculates Social Security benefits, it is your due diligence to know the basics so that you can understand how an additional year of earning will affect your clients’ projected benefit.

Some people think Social Security benefits are complicated to figure out; in actuality, it’s pretty straightforward. Social Security benefits are computed through this two-step process:

  1. Compute the average indexed monthly earnings, called AIME.
  2. Compute the primary insurance amount, based on the AIME.

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Updates from AICPA Fall Council 2014 #AICPAGC14

The AICPA governing Council’s fall 2014 meeting is taking place this week, Oct. 19 to 21. Updates will be provided on several important issues to the CPA profession, including management accounting, the CPA Exam, ethics and audit quality. Arleen Thomas, CPA, CGMA, AICPA Senior Vice President Management Accounting and Global Markets, will highlight important milestones leading to 2015 for the Chartered Global Management Accountant designation and explore the evolution of the Uniform CPA Examination. Susan Coffey, Senior Vice President – Public Practice & Global Alliances, will update members on the profession’s commitment to quality and the code of conduct, as well as the pending amendment to the definition of attest. You can follow along with Council action with #AICPAGC14 on Twitter or view the stream below. (Email subscribers can view the stream on our website.)

 

Live Blog Updates from AICPA Fall Council 2014 #AICPAGC14
 

Getting to the Bottom Line about Contingent Fees

"Intaxication: Euphoria at getting a refund from the IRS, which lasts until you realize it was your money to start with." Unknown, from a Washington Post word contest

Court-judgementWhen is a CPA practice not "practice before the Internal Revenue Service?" And if it is not practice before the IRS,  does that mean it’s okay to use contingent fees in a client arrangement?

Why do I write about this topic now?  This past July, the U.S. District Court for the District of Columbia issued an opinion (Ridgely v. Lew) that takes a significant strike at IRS’s ability to regulate contingent fee arrangements. 

Gerald Ridgely is a CPA who practices with Ryan LLC, a global tax services company, but not a registered CPA firm. Ridgely sued the IRS, arguing that the Service exceeded its authority under Circular 230 in regulating the preparation and filing of ordinary refund claims, which practitioners file after a taxpayer has filed his original tax return but before the IRS has initiated an audit of the return.  Ridgely contended that the inability to charge a contingent fee for a refund claim cost him clients and significant revenue. Under a contingent fee arrangement, the client only pays the fee (or a percentage of the refund) if the claim is successful.

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How to Pass the CGMA Exam? Practice, Practice, Practice

PracticeNew Year’s Eve is one of the few holidays celebrated almost universally in countries around the world, with parties, champagne toasts, and fireworks. This year, December 31 will also be a key date for management accounting professionals. That’s because it marks the final day that AICPA voting members who meet relevant experience requirements are exempt from the upcoming CGMA exam.

The exam’s unique strategic case-study format is designed to assess problem-solving skills in real-world business situations and test a broad range of competencies defined as crucial by businesses around the world. Since the case study format is quite different from traditional exam techniques like multiple choice or fill-in-the-blanks, we recently released a practice exam that candidates can use to prepare for the exam.

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The New Realities of Referral Marketing for CPAs

CPAs and other financial services firms largely rely on referrals to grow their client base and stay in business. This business model has worked for a countless number of years. However, the way clients make decisions has changed, which affects your rate of referral. Under the new model, a referral is only the first step. Used the right way, technologies like websites, email and social media can energize your current client base to make referrals and increase the conversion rate of referral prospects.

There is no longer one linear funnel for client referrals, but rather a series of influencing points that lead to channels where the prospect is most comfortable making contact. Today, a referred prospect is likely to make initial contact in a number of ways:

  • Through your website. They will visit your website to understand why your firm is different and whether your value proposition aligns with the prospect’s expectations.
  • Social media. A prospect will turn to social media to get a sense of your firm’s focus and culture. They may also turn to review websites that allow users to leave feedback, such as Yelp.
  • Email newsletter. Prospects might sign up for your e-newsletter to get a preview of what it is like to be your client.

Consumer-purchase-journey

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10 Ways to Personalize Your CPA Firm’s Marketing Efforts

Share a CokePersonalized marketing is at work all around us. We see it every day, from personalized key chains and other souvenirs sold at tourist destinations to featured recommendations on Amazon.com, companies are tailoring products to make them more targeted and personalized.

This summer Coca-Cola launched its “Share a Coke” marketing campaign aimed at teens and Millennials. In an effort to personally connect with consumers, Coca-Cola replaced its iconic script logo with 250 of the most popular names of young people. Personalized labels could be found on 20 oz. bottles of Coke, Diet Coke and Coke Zero all summer long. Coca-Cola also encouraged customers to share their experiences on social media and many Coke enthusiasts responded by posting pictures with soda bottles bearing their names. In fact, during the first half of the campaign consumers shared more than 125,000 posts via social media networks. The Wall Street Journal reported that Coca-Cola soda sales in the U.S. increased by more than two percent following the launch of the campaign.

Why was the Share a Coke campaign so successful? Studies show that people prefer receiving customized messages rather than generic ones. Individualized communication signals that the consumer is unique and important. Like Coca-Cola, CPAs can take steps to personalize their marketing efforts.

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AICPA Announces 2014 Accounting Scholars Leadership Workshop Graduates

The American Institute of CPAs recently announced the 2014 Accounting Scholars Leadership Workshop graduating class. The Workshop, an annual invitational event now in its 20th year, is open to ethnically diverse accounting and finance majors who plan to pursue the CPA license.

ASLWThe 114 students selected for this year’s Workshop successfully completed the two-day program, which strengthened their professional and leadership skills, while highlighting the career possibilities becoming a CPA affords. The AICPA Foundation covers all program costs, which include the student attendees’ transportation, hotel accommodation, and meals.

“I am confident that the life lessons learned at ASLW will benefit these students and will help them immensely along their path to becoming CPAs,” said Kim Drumgo, AICPA director of diversity and inclusion and Vice Chair of the National Commission on Diversity and Inclusion.

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5 Steps to Creating a Social Media Strategy

FallOctober is here - the leaves are changing color, there’s a chill in the air and we’re drawing close to the end of another year. At your CPA firm, you’re likely getting ready for performance reviews, preparing for busy season and working on strategic planning for 2015 and beyond. As you put together your marketing plan, be sure to spend some time formulating a social media strategy. This will help determine how often you blog, what social channels you use and whether you invest in social media advertising – all of which will impact how you allocate resources for the coming year. Creating a social media strategy doesn’t have to be a long and arduous process. You can get started by asking these five questions:

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