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24 posts from May 2017

5 Tips for Navigating the Road to Leadership

RoadMy first job out of college was the best and worst experience of my life, and it taught me a lot about leadership. I started my career at Target, and because I had studied business, they had me running an area with five people reporting to me. My staff ranged from workers with little apparent interest in their jobs, to team leaders who were reporting to me. The challenges of running such a varied team can be overwhelming, but the job also gave me a tremendous range of responsibilities and leadership experiences, forcing me to learn quickly and be decisive. In the end, it was a good first job that certainly stretched me and helped me see that I could be a successful leader.

Taking the reins of leadership can be daunting, but along the way I have learned a number of useful lessons for current and aspiring leaders.

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The One Personality Trait All CPAs Share

Patrick Lee medalsAs Asian American and Pacific Islander Heritage Month comes to a close, we share the story of one CPA, his remarkable achievements and the traits that were instilled in him growing up in a Chinese-American household. 

In my five years working closely with CPAs of diverse backgrounds, I am increasingly seeing one very consistent trait all CPAs seem to share, no matter what their background: drive. I know CPAs who have faced frustrating, even heartbreaking obstacles in pursuit of their credential. Even through the obstacles those same CPAs also strive for excellence in every aspect of their lives. 

That certainly seems to be the case with Patrick B. Lee, CPA. It’s not something he can shut off. Whether he’s teaching or running a marathon, he always seems to be devising new strategies to do things better and faster.

As someone whose instinct tells him to analyze and problem-solve, Lee, an assistant professor of accounting at Southwestern College in Winfield, Kansas, finds that drive creeping into all areas of his life.

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4 Things Advisers Should Know about Technology Today

Voice recognition in a carAs practitioners, we have a responsibility to our clients and to ourselves to stay up to date on the latest tools and techniques of our trade. Most CPAs providing advice to individuals do an admirable job of staying current on tax and financial planning techniques, but not as well staying current on technology issues facing their firm. Here are some technology-related issues practitioners should be focusing on today.

The Pace of Change in Financial Technology (FinTech)

A revolution in financial technology has taken place over the last several years. If anything, the pace of change is accelerating, with implications for all financial service professionals. Until recently late adopters of technology were not penalized for being late to the game, because most of their local competitors were also late adopters. Technology has broken down regional barriers, so today you are not only competing against other local providers, but national and perhaps international providers as well. In addition, new players have entered the marketplace. FinTech startups from Silicon Valley and elsewhere are becoming a disruptive force, raising the technology bar and putting pressure on margins. The bottom line for readers is this: If you are not reviewing and upgrading your firm’s technology at least annually, you are falling behind. If there isn’t someone at the firm specifically responsible for this, the odds are that it won’t get done.

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Learning from Prince’s $250 Million Mistake

Prince 2Finally, almost a year and a month to the date of his death, a judge confirmed Prince’s six siblings to be his rightful heirs – after more than 45 people came forward claiming to be his wife, children, siblings or other relatives.

Last year, the legendary musician passed away, leaving behind not only a legacy of unparalleled music, but also a $250 million fortune – with no will or estate plan to be found. With the long-anticipated announcement that his siblings will inherit his fortune, we’re reminded again of the importance of planning ahead and hiring trusted experts to carry out your wishes.

Whether you have people clamoring after your money or not, it’s important to consider hiring an expert to sort through the, at times, very complicated process of estate planning. There are DIY websites and software packages that may seem attractive (and cheap!), but more often than not, you get what you pay for. More complicated life situations, such as children from a prior marriage, children with special needs, or capital gains from property appreciation, require the hands-on insight of an expert.

If you are a CPA or a lawyer, you might consider yourself the expert – but just as authors have other writers proofread their work, it’s important to have an unbiased third party look over your documents. Even U.S. Supreme Court Chief Justice Warren E. Burger, who died in 1995, should have relied on estate planning experts to prepare his estate plan – but instead he took it upon himself, and his family paid over $450,000 in taxes because of his errors.

To be better prepared than Prince and Chief Justice Burger, seek out the assistance of an attorney or a CPA to draft a will and do estate planning, respectively. An attorney will help you navigate a will, and a CPA is best positioned to help with more complicated estate planning.

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It’s Time to Speak the Same Language on Cybersecurity

Cybersecurity 3Recent massive ransomware attacks on organizations around the world demonstrate how disruptive—and in some cases destructive—cyberattacks can be. The “WannaCry” malware incident is just the latest alarm on the ever-urgent call for companies to immediately address and manage their cybersecurity risks. Every organization is susceptible to cyber assaults, making a clearly defined, flexible and robust risk management program essential to a business’s ongoing success.

Addressing an Increasing Market Need

With cyberattacks on the rise, organizations are not only reinforcing their ability to prevent attacks, but also taking steps to demonstrate that they are doing all they can to detect, respond to, mitigate and recover from attacks on a timely basis. Customers, investors, boards of directors and even government officials want to know more about what companies are doing to address cybersecurity.

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Tips for Stress-Free Summer Travel

TravelAt long last, the winter coats have been washed and relegated to the back of the closet (or they’ll sit on the laundry room floor until next October waiting to be washed—don’t worry, I don’t judge) and you’re thinking about your summer travel plans. Perhaps you’d like to spend a glorious week at the beach, or take a road trip to visit historical sites. Maybe a lake house is your thing, or you’re jetting half way around the world to stay in an overwater bungalow in the Maldives* before they sink. It doesn’t matter whether your vacation will be via the family SUV or a private jet, there will be some element of drudgery—finalizing itineraries, packing, renting cars, making reservations. And if you’re traveling with young kids, face it: you’re going on a trip, not a vacation. The good news is that there are ways to minimize your vacation stress from the planning stages through the duration of your trip, no matter your destination or the company you keep.

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What Motivates Donors to Give?

Shutterstock_583541458In the summer of 2014, dumping a bucket of ice water on your head while being filmed was all the rage. My Facebook newsfeed was filled with videos of friends voluntarily drenching themselves for all to see. This activity was sparked by the ALS Association’s Ice Bucket Challenge, a brilliant fundraising effort designed to increase awareness and support research on amyotrophic lateral sclerosis (also known as Lou Gehrig’s Disease). In one month, the ALS Association raised more than $100 million. How could other not-for-profits recreate this success to benefit their organizations? While I don’t have the answers, I would recommend that you consider why donors give as a starting point.

Donor motivations have been researched, but results are not as straightforward as they may sound. What donors say is not always consistent with what donors do. So, what looks good on paper, is not always going to translate into success.

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Top 5 Reasons to Dig into the CPA Exam Blueprints

BlueprintThere are many things you don’t do unless you have the proper materials, information or training. You just don’t.  

Construction crews don’t build a 100-story skyscraper without a structural design plan. An amateur runner doesn’t jump into the New York City Marathon without having logged a substantial number of miles and completing a qualifying race. And neither you nor I can simply hop into a rocket and head off for a leisurely space walk without extensive training.

The point is, as a CPA candidate, when you finally set foot in a testing center, you should have thoroughly studied and become familiar with the Exam’s content. One of the best ways to do this: Study the AICPA’s CPA Examination Blueprints.

As the Exam’s developer, the AICPA publishes the Exam Blueprints, which is an in-depth, section-by-section guide for candidates preparing to test. If you’re planning to sit for the Exam and said to yourself, What are the Blueprints?, you need to dig in right away because you’ll:

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Just Kidding: Humor at Work

HumorI bought the world’s worst thesaurus yesterday. Not only is it terrible, it’s terrible.

I recently read a CGMA Magazine article which reported that more than 75 percent of CFOs in an Accountemps survey said that an employee’s sense of humor was very or somewhat important for fitting into the company’s corporate culture. I was intrigued by this and inspired to do a little more research on the importance of comedy in the workplace and what I could be doing to add a little levity to my remit. Here’s what I found:

  • There’s a reason we call funny people “witty;” a good sense of humor makes you appear more competent and confident
  • Research suggests that teams who joke more, communicate better (WSJ)
  • It matters what “kind” of funny you are, always be authentic and humble (HBR)
  • Use the right medium; humor rarely goes well over email (CGMA Magazine)
  • It’s OK to tell an unfunny joke; it’s not OK to tell an inappropriate joke (HBR)

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7 Ways to Improve Workforce Diversity

Shutterstock_241967758Do leaders of your organization put an emphasis on recruiting and retaining diverse talent? If the answer to that question is yes, then you are off to a good start. However, if your employer does not look to hire both entry-level staff and c-suite leaders of diverse backgrounds (including gender, age, ethnicity etc.), you may want to reconsider your strategy. Employing diverse individuals throughout the ranks of your organization is important. Diverse leaders in the c-suite provide unique perspectives and serve as role models for younger diverse staff. These leaders encourage a highly engaged workforce capable of effectively doing business in diverse and multicultural markets. Additionally, younger, less experienced staff members of diverse backgrounds are also crucial to an organization’s success. These individuals have opportunities to grow with your organization and fill the talent pipeline.   

Last spring, the AICPA answered the call for more workforce diversity education by conducting its first webcast series entitled “Unconscious Bias” which attracted over 3000 attendees. The conversations continued with the “Workplace Diversity” webcast series this past fall and the “Attracting and Recruiting Diverse Talent”, “Retaining and Advancing Diverse Talent”, and “How to Effectively Coach, Mentor, and Sponsor Diverse Talent” workshops this spring. Archives of these webcasts can be found here. Outlined below are seven workforce diversity best practices.

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How One Next-Gen CPA Dreams Big: Part 2

Jeff Badu - CopyWe spoke with Jeff Badu shortly after he launched his own firm, Badu Tax Services, LLC. Jeff has a bold, intrepid, entrepreneurial spirit and is passionate about helping people and giving back to society. He recently started Badu Investments and is preparing to take the PFS exam this summer so he can broaden the range of services he offers to his clients, who are primarily millennials. In this second part of the interview, we continue to explore Jeff’s journey.

AICPA: We learned a great deal about what drives you in the first part of our conversation. You spoke about your passion to help people and your entrepreneurial spirit. And you’re planning to take the PFS exam this summer. What is motivating you?

Jeff Badu: As a CPA, I get to help people solve some of their most challenging financial problems. I am very passionate about helping people in general, and with their financial future in particular. I work mainly with millennials, like me, and use different strategies to help reduce their income tax liability and maximize retirement and other savings. I find that people tend to prefer working with someone they can relate to, and my clients come to me because we identify with each other.

I have been interested in taxes since I was in middle school. It seems natural to me that tax compliance and planning are key ways to help people plan for their future. It’s very important to me to increase people’s understanding of the significance of making wise financial choices, which I try to do with my radio show, website and social media presence. Being able to increase my own expertise and offer a range of services so that I can be seen as the go-to trusted adviser is what’s prompting me to take the PFS exam this summer.

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How to Get the Most Out of a Virtual Conference


Virtual ConferenceConferences are a great way to network, earn CPE and stay up-to-date on new developments in the profession, but for some professionals, the travel time and expense can be obstacles. Virtual conferences offer the same content and CPE credits, but with some features that are unique to the online experience. You may even find that it’s more appealing than attending on-site.

Benefits of virtual conferences

Perhaps the best reason to attend an online learning event is the flexibility to view sessions when and where you want. With a virtual conference, you’ll get to choose from all the same thought-provoking sessions and speakers as on-site attendees. Plus, you’ll likely receive the handouts and presentations in advance of the sessions. This can help you prepare your questions ahead of time if the session includes a Q&A period. You’ll also be able to access sessions that are held concurrently via the archive, so there’s no need to choose between two interesting topics; you can view one via livestream and watch the other later. And if you missed that key point the speaker made, you can go back and listen again.

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3 Tips to Manage Sustainability Risks and Drive Value

Shutterstock_559076716What would happen if you had to make decisions about your company using only a portion of the financial information that is available to you? Without a holistic understanding of your company’s financial situation and value drivers, it would be tough to assess the organization’s performance, risks, challenges, and opportunities and drive long-term growth. Planning without all the information could potentially put the company at a competitive disadvantage and expose the company to greater risk.

However, that’s what happens in many organizations when they fail to fully consider the operational and financial implications of environmental, social, and governance (ESG) risks. Examples of how these risks can play out in the market include:

  • A beverage company’s production drops or they lose their license to operate due to drought conditions in water stressed regions in which the company operates.
  • A technology company faces employee turnover and sinking revenues because it fails to encourage or accept the innovative ideas of its highly skilled labor force.
  • An apparel company experiences a stock price drop after reports allege its suppliers are committing human rights violations.

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Thanks, Mom: What We Learned from Our Mothers

It might take 20 (or 30 or 40) years, but eventually, most people recognize that between telling you to pick up/put away/tuck in/eat/clean/don’t stay out too late, your mom probably imparted you with some pretty good wisdom. In honor of Mother’s Day, we asked people to share what they’ve learned from their mothers.

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Find Answers to Your Cash and Tax Basis Questions

Shutterstock_123504565Why do cats purr? Why are pizza boxes square when the pizza is round? Sometimes it’s hard to find a single answer – let alone the right answer - to your questions. Do you know where to turn to when you have a question about the income tax basis or cash basis of accounting? Practitioners frequently ask questions about how to account for transactions using these special purpose frameworks. What they quickly find is a lack of authoritative guidance. Searching and googling can give you umpteen answers. But you need the right one.

The Center for Plain English Accounting, AICPA’s national accounting and auditing (A&A) resource center, often answers questions about the tax and cash bases of accounting. For example, the following two questions were recently posed by members:

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Don’t Let Clients’ Retirement Fall into This Trap

TrapHave you ever been at a party where the owner of a company was bragging about how he used a 401k to start his business? Or heard a story about how a couple’s individual retirement account (IRA) is invested in real estate and that’s going to allow them to live in the lap of luxury when they retire?

They’re talking about self-directed retirement vehicles. And much like real vehicles, when they are driven improperly, the result can be disaster.

What Are Self-Directed Retirement Vehicles?

Self-directed IRAs and self-directed 401ks are increasingly popular. While the usual custodians of IRA and 401(k) accounts will only allow certain investments (e.g., stocks, bonds, etc.), a self-directed IRA or 401(k) allows the owner to invest in such things as real estate, precious metals, businesses, etc. and make all the investment decisions. Profits from the investment build up tax-free until the owner reaches retirement and begins to take distributions, usually when the owner’s tax rate is much lower. Sounds good, right? What could go wrong?

Well, actually, a lot can go wrong. As a matter of fact, if you have clients in one of these situations, they could lose substantial amounts, if not all, of their retirement income. How can this happen and what can you do to help?

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Back to Basics with "Money Minutes"

Money mattersImagine a world where high school graduates confidently understand the pros and cons of credit cards, recognize the significance of an emergency savings fund and even have a strong grasp on what student loans mean for their financial future. Does it sound utopian to you? Maybe, but at the AICPA we strive to provide students with resources to obtain this kind of knowledge each and every day.

A recent financial literacy test given by the National Financial Educator’s Council found that test-takers from 15-18 years old scored an average of only 63.17%. To experts, personal finance topics are seemingly common sense, however, there is a huge discrepancy between what is taught in school and what students are expected to know upon graduation and beyond. To help combat this issue, the AICPA launched Money Minutes, a video module series that gets back to basic concepts of financial management for high school students.

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7 Tips to Get the Most out of Your Next Accounting Technology Event

Tech conferenceThe biggest benefit to attending an accounting technology event is the convenience of having many vendors, thought-leaders and your peers in one location that also provides CPE credits. These events provide the perfect opportunity to problem-solve, learn and investigate technology during a condensed timeline. Whether you have a project planned or if one is on the horizon, being able to talk to your peers and multiple vendors at your next accounting technology event is a convenience and may shorten your investigation time.

Consider these tips to get the most out of your next accounting technology event. 

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11 Things You Need to Know About Your Millennial Co-workers

MillennialsMove over, Gen X; millennials are now the largest generation in the U.S. workforce. Look around your office and you’ll likely see that one in three of your coworkers is a millennial (born between 1977-1995; a.k.a. Gen Y). Currently there are over 83 million Gen Yers in the United States, and that number is expected to grow. As this generation continues to mature and enter the workforce, understanding millennials and what motivates them has never been more important.

For the first time in U.S. history, four generations are working together, and the age gap between co-workers can be as wide as 60 years. You’ll find traditionalists, baby boomers, Gen Xers and Gen Yers working side by side in many offices. Each of these generations has defining traits that are shaped by a variety of factors. These factors include parenting styles, economic trends, technology advancements, historical events and lifespan. This results in different work and communication styles, career goals and values.

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Valuing Contributions to Major Advancements in Medicine

HeLa cellsHow do you place a value on human cells that have changed the entire trajectory of cancer treatment and have paved the way for medical breakthroughs in diseases like polio, HIV and HPV?

The best-selling book The Immortal Life of Henrietta Lacks – now also an HBO movie starring Oprah Winfrey – examines how, in 1951, cancer cells were harvested during a biopsy of an African-American woman without her knowledge. Those cells, known as HeLa cells, are the oldest and most commonly used human cell line in biomedical research and have had a significant impact on medical research and advancements in treatment for decades.

The story of Henrietta Lacks raises moral and ethical questions about patients’ rights. To start, the Lacks family was unaware their mother’s genetic tissue was taken and being used for research. Further, they never received any form of financial compensation for the profits gained by the medical community for more than 65 years. To this day, Lacks’ eldest son continues the family’s fight for compensation.

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How One Next-Gen CPA Dreams Big

Part I

Jeff Badu - CopyOn a mission to help people and entrepreneurially spirited, Jeff Badu represents the next generation of CPAs. At 24 years old, he runs his own firm, hosts a weekly radio show, volunteers his time, and is preparing to take the PFS exam this summer. The AICPA spoke with Jeff about his passion for the profession and his dedication to helping millennials save on their taxes and plan for their financial future.

AICPA: You’ve accomplished quite a bit for someone in their mid-twenties. Can you give us some background on yourself and how you became a CPA?

Jeff Badu: I came to the United States from Ghana when I was just 8 years old. My family settled on the north side of Chicago, where I still live. I have always been a numbers guy, but it was very early on that I discovered my love for accounting and business, and the opportunities those industries present. I was introduced to my first tax return in the eighth grade, and that was when I knew I was interested in this sort of work.

Graduating from the University of Illinois at Urbana-Champaign with both a Bachelor’s of Science and a Master’s of Science in Accountancy, I began doing tax returns for friends my freshman year of college and really enjoyed it, and that helped me set a path for my future. I developed a business plan and mapped out my road to the CPA. I only took one class my second semester of graduate school so I could focus on it. I was the first person in the library every day, and the last to leave at night. I was ecstatic – and exhausted – when I found out I passed.

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5 Silent Killers of a Financial Plan

Silent killer“The best laid plans of mice and men often go awry.”

As it turns out, poet Robert Burns was onto something. All too often, CPAs and advisers construct tax, estate, retirement, risk management and investment plans that are either never implemented or are misaligned with their clients’ values. Some common missteps could keep a client from adopting a well-crafted financial plan, thus diminishing the value you add to the process.

Let’s take a look at some of these silent killers and how to avoid them before another financial plan goes awry.

Unrealistic Expectations
Perhaps the most common (and avoidable) mistake is building a financial plan on highly aspirational, or worse, totally unrealistic expectations. A sound financial plan is only as good as its inputs, so it’s important to ensure that you are forecasting an appropriate rate of return, inflation rate and honest gauge of spending and cash flow needs. Digging into the client’s cash flow today can help determine a realistic spending level in retirement.

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Will a New EBP Audit Proposal Enhance Quality?

Shutterstock_502885915Enhancing quality in various areas of the audit and various kinds of audits is a top priority for us at the AICPA. We recently issued an exposure draft entitled Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. Its goal is to provide a report that clarifies audit procedures and the responsibilities of auditors and management, thus improving quality and transparency. The Auditing Standards Board (ASB) is encouraging auditors and preparers who are involved in audits of the financial statements of Employee Retirement Income Security Act (ERISA) plans to familiarize themselves with this proposal, and we are very interested in receiving feedback on the proposed changes. Comments should be sent to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by Aug. 21.

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How One CPA Got the Chance to Edit the Journal of Accountancy

Lindsay StevensonHave you ever wanted to try something completely opposite from your everyday norm? Maybe BASE jumping from a mountain or zip-lining through the jungle? For me, writing and journalism have always been that out-of-the-ordinary experience that would be radically different from my everyday CPA-related work. (Don’t judge; it can be as exciting as BASE jumping in some circles!)

So when the team at the AICPA’s Journal of Accountancy (JofA) reached out and asked me to join a small group of young CPAs to guest edit the May 2017 issue, I jumped at the chance.

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