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13 posts from February 2018

Now accepting applications: 5 tips for mid-season hiring

Help wantedIt’s the middle of busy season, and you’ve just realized you could use a little more help. Maybe you underestimated your firm’s capacity, or a staff member unexpectedly needed to leave. When it’s all hands on deck to manage client needs, mid-season hiring is a curveball no firm wants to face. Here are a few ways to prevent such departures and prepare for the unexpected.

An ounce of prevention

Of course, one of the best ways to handle mid-season hiring is to prevent departures. 

While people will leave, and not always at the best time, a firm should try to create a fun office culture so employees won’t want to go anywhere else. This means creating a family-like atmosphere in hopes that staff members are less likely to leave “family” in the middle of a busy time. To make the firm more inviting, consider:

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Switching to a C corp? Think twice about it.

C corpMost people probably don't even know what toothpaste they buy; they just recognize the box on the shelf.

--Charles Duhigg

The recently enacted P.L. 115-97, known as the Tax Cuts and Jobs Act, will have a significant effect on tax planning for clients, but many CPAs are also investigating what it will mean to their own firms. Best to listen to the advice of American Pulitzer prize-winning reporter and best-selling author Charles Duhigg on the process; make sure you know what’s in the tax planning “box.”

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Forensic and valuation pros: 4 ways tax reform affects you

Tax reform 2Tax reform affects more than just taxes. It has lasting implication for all CPAs and introduces some uncertainty for financial forensics and business valuation. Depending on who your clients are, you may feel this more than other CPAs.

If you concentrate in estate and gift tax valuation, now is a good time to start looking outside those business models by leveraging the opportunities that have come up since the new law was signed.

In a recent interview, Don DeGrazia, CPA, ABV, CFF, partner with Gold Gerstein Group LLC, explained the P.L. 115-97, known as the Tax Cuts and Jobs Act, makes the federal estate tax temporarily go away for many tax payers. While state estate or inheritance taxes are still in effect, they don’t provide nearly the same volume of business.

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A behind-the-scenes look at the CPA Exam

Behind the scenesMost CPA Exam candidates can rest assured knowing the time and energy they’ve spent leading up to exam day has prepared them for what to expect. Reviewed content and structure, section by section in the Blueprints? Check. Practiced with the sample tests to learn the exam’s functionality? Check. Confirmed test windows, how scoring works and made that test day appointment? Check. Understood the importance of language in the exam and what goes into the wording of each question? Che...wait. What?

Understanding what goes into the development of exam questions may provide extra insight for test day when you sit for the exam, which surely adds to your confidence. Read on to explore some of the behind-the-scenes considerations from creation to approval, fairness in the wording, as well as knowing with certainty that each multiple-choice question has only one right answer.

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Start your audit off right with data analytics

When planning an audit, how do you approach your preliminary analytics? Many auditors perform a variance analysis. They compare current year account balances to the prior year to identify any unexpected fluctuations. While this procedure often yields relevant insights, did you know performing audit data analytics (ADAs) can be even more effective at identifying potential problem areas? ADAs can be quick and painless, and you probably already have the tools on hand to perform them.

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The one thing stopping you from making better decisions

Shutterstock_640007017
It’s been several years since your last dodgeball game in the high school gym, but you may remember it like it was yesterday. Nervous energy hangs in the air during those moments when the captains choose their teams. No one wants to be picked last.

Human nature is at play, compelling Captain Kim to choose Mark instead of you. Maybe it’s Mark’s athletic ability, or maybe it’s because he lives on Kim’s street and she is more familiar with him. Kim’s unconscious bias drives her toward one classmate over another. For the person whom Kim picks last, it might sting a little.


Without realizing it, every day in our professional lives, we make choices similar to Kim’s. It’s not always pleasant for everyone involved. All humans have a hardwired need to belong. If we don’t check our unconscious bias and unknowingly show favoritism, we risk alienating our colleagues and staff. That can affect engagement, productivity and team cohesion.


The good news is that you can train yourself to become mindful of your unconscious bias and strengthen your relationships in and out of the office. Try this practice I call the Three Rs.

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Engagement letter stories — when they hurt and when they worked

Engagement letterAs a risk management professional at CNA, professional liability insurance carrier for nearly 25,000 CPA firms, I am often asked if engagement letters are worth all the effort. The answer, based on my personal and CNA’s claim experience, is a resounding YES!

I’ve experienced firsthand the value these letters bring to the table. When an engagement letter is used, and a claim arises related to that engagement, the losses are typically less severe (meaning less expensive) than if an engagement letter had not been used. But what means more (especially to a CPA) than more money in your pocket? Many professional liability insurance carriers provide premium credits or other benefits for firms that use engagement letters.

If it’s not enough to just trust the numbers, consider the following experiences of CPA firms that have or have not used engagement letters.

One that hurt — no engagement letter meant higher risk

A CPA was engaged to prepare income tax returns for a small business and its owner for many years. The owner regularly spoke with the CPA about his plans to sell the business and ultimately retire. One day, the client did just that and moved away.

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Blockchain was made to solve 1 problem. Here’s what that is.

Blockchain“Blockchain is a solution looking for a problem. Unless you want to buy drugs on the internet,” said the instructor in a technology training I recently attended.

While not the first time I had heard such a comment, it was disturbing that a hundred of my fellow practitioners were being misled. Ignoring or dismissing blockchain does the accounting profession no favors. Instead, let’s consider the problem that the technology solves. This will provide a basis for later understanding possible applications to our work.

 What is the problem blockchain is trying to solve?

Blockchain, or distributed ledger technology, set out to solve how we transfer a digital asset between two peers without an intermediary. While there are many applications of this transfer, let’s look at it in the context of money.

Imagine you are selling a bike online. You don’t actually know the person who is buying your bike, so you have no way of knowing if the buyer actually has the money to pay for it. You have to trust an intermediary like PayPal for this information. PayPal is crucial to the transaction because it verifies what you cannot – whether the buyer has enough money in their bank account to make the purchase.

The asymmetry of trust in this transaction is known as the Byzantine General’s Problem. Imagine we have four generals planning to attack a city. At least three of the generals must attack at the same time to overpower the army holding the city. However, the only way they can communicate with each other is via messenger, and they do not know if one of the generals is a traitor. If a general were traitorous, he could modify the attack message and cause the other generals to fail. The only way to overcome a traitorous general is to provide the history of all messages sent and evidence they have not been altered. If the generals see that one of their peers has sent a message different from the others, they would know the general is traitorous and disregard his message. If more generals are good actors than bad in this attack, the correct message will be obvious.

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10 tips to tackle the CPA Exam during busy season

Busy season juggling If your time already seems extra valuable during busy season, try studying for the CPA Exam at the same time. Many do it, however, as they power forward to earn a credential that will significantly enhance their professional lives. If you’re about to jump into juggling the demands of busy season and test preparation, here are a few tips from CPAs I talked to who’ve been there, done that and earned their CPA.

  1. Plan your time.

CPA Leighton Smith, who is a finance director at Microsoft, calculated the time he thought he’d need to study each quarter. He then tracked his actual weekly progress and made adjustments as needed. “I didn’t want to leave anything to chance,” he says.

  1. Stretch the workday.

To keep on track, you’ll have to wake up early, get to bed late and study on the go. “When I took the metro to work in the morning, instead of reading or listening to music, I worked with flash cards that I had made the night before based on my reading,” says CPA Jeff Wilson, advanced QuickBook ProAdvisor at The W2 Group, LLC. During his 30-minute commute each way every day, CPA Caleb Bullock, business development manager at Somerset CPAs and Advisors, listened to lectures. “I did it every spare minute,” he says.

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10 busy-season exercises CPAs can do at their desks

Busy season means tough choices—dividing daily life into essentials and non-essentials. Food: essential. Sleep: essential. You know exercise is important, but is it essential? Research shows that completely dropping your exercise routine for just a few weeks can put you at increased risk for a heart attack or stroke. But findings also show that even short periods of exercise can reduce those risks while boosting productivity and reducing stress. But how? If you don’t have time for a full routine at the gym or outside, deskercise!

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Social security benefits hacked: A cautionary tale

Social Security hackIf you or your clients are at or nearing retirement age, you need to know that hackers are targeting social security accounts. I found out the hard way. My career as a CPA Personal Financial Specialist was devoted to advising individuals and families on their most important financial goals, including tax, retirement, estate, risk management, investment and retirement planning. After decades of helping my clients navigate and manage these important decisions, imagine my surprise when I received a letter in the mail shortly after my 67th birthday congratulating me on initiating my Social Security benefits. The trouble was, although I had entered the glory years of retirement, I had not yet applied for Social Security benefits, opting to wait until age 70 to receive my benefits. Further digging uncovered the unfortunate fact that a thief had received $19,236 of my benefits. I was dumbfounded.

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Personal financial satisfaction extends record run…but for how long?

Americans are experiencing unprecedented levels of personal financial satisfaction, the highest in the 24-year history of the AICPA’s Personal Financial Satisfaction Index (PFSi). After seven consecutive quarters on the rise and a second quarter in a row setting at an all-time record, the average Americans’ personal financial satisfaction has been steadily picking up steam. With financial satisfaction climbing to new highs, some can’t help but wonder when this rise will end.

First, some background. The PFSi is a quarterly economic indicator that measures the financial standing of the average American. It’s calculated as the difference between two sub-indexes: The Personal Financial Pleasure Index, which measures the growth of assets and opportunities, and the Personal Financial Pain Index, which calculates the loss of assets and opportunities. The Pleasure Index is made up of four factors, the largest contributor being the PFS 750 Market index. The Pain Index is also comprised of four factors, with the largest contributor being personal taxes. Most recently, the Pleasure Index (69.2) greatly outweighed the Pain Index (42.3) bringing the PFSi to a positive reading of 26.9, the highest reading since 1994.
 


AICPA Q4 PFSi

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New AICPA chair shares his vision for the future

ERIC HANSEN HEADSHOT Today, Eric Hansen, CPA, CGMA, assumes his new role as Chair of the American Institute of CPAs. We sat down with Eric to ask the four questions that will help you know him and his vision for the profession a little better.

You can also watch the video of his inaugural address, delivered to members of AICPA Council, here.

  1. Congratulations on becoming the 105th Chair of the AICPA! How would you define your role as a leader in the accounting profession?

I’m so humbled and honored to join the ranks of so many amazing and visionary leaders who’ve come before me. They are the reason for our success today. And I see it as my duty – and really that of all accountants – to continue to build on that success, keeping the profession strong and maintaining our critical role in protecting the public interest.  

  1. Strong positioning seems especially important now, as we navigate a world defined by rapid change and disruption. So, how do we keep the profession relevant and trusted?

One thing many people may not know about me is that I’m an Eagle Scout. And it was during my time in the Scouts that I learned one of my favorite sayings: “If you’re early, you’re on time. If you’re on time, you’re late. And if you’re late, forget about it.” This is how I’ve approached my life and career, and it’s never failed me.

This is how we need to think about our profession, as well. No one knows for sure what tomorrow will bring. But, if we have the courage to be bold and a bias for action, we’ll be prepared.

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