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9 posts from March 2018

4 new opportunities blockchain could create for auditors

Blockchain 2In case you haven’t heard, blockchain technology has the potential to change the auditing profession. A new whitepaper co-authored by the American Institute of CPAs details what opportunities could emerge for auditors.

Not sure what blockchain is? Don’t worry, you’re not alone. It’s a digital, distributed ledger that contains every transaction since its creation. Once transactions are entered, they can’t be changed or deleted. Every user on a blockchain has an identical version of the ledger, and all copies are updated automatically when a new transaction occurs. Each entry refers back to the previous entry across all versions, creating a “chain” of information.

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3 myths about tax extensions

Tax extensionSometimes filing a tax extension can be a benefit to your clients, but only if they are clear on what an extension means —and what it doesn’t mean.

If you’re a tax CPA, you’ve probably come across a client who chose not to file an extension because they misunderstood how it would affect them. On the other hand, maybe a client was happy to go on extension but for the wrong reasons.  

Below are three myths that your clients may have about extensions that you can proactively dispel.

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5 busy season food cravings and how to feed them properly

Ice creamSuddenly, in the middle of a client meeting or complicated tax return, you want — no, need — chocolate, or maybe French fries and fried chicken. There’s no doubt food cravings grow under stress. But they can also hit when we feel good or for seemingly no reason at all.

These guilty pleasures can be a great morale booster during busy season. Yet too much indulgence can lead to unhealthy weight, high blood pressure, type 2 diabetes and a host of other health problems! Cravings can’t be eliminated entirely but knowing your triggers and developing strategies for feeding them in healthier ways can help.

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3 ways new software enhances CPA exam experience

ManLookScreenIf you took the CPA exam any time before 2004, images of an arena or hotel ballroom and No. 2 pencils and scratch paper still hold a prominent place in your memories. For those of you who took the exam after the American Institute of CPA’s launch of computer-based testing in April 2004, it was a much different experience. This important move helped the AICPA become a model for high-stakes testing, known for our ability to manage, deliver and score exams faster and more efficiently for candidates. 

Since computerizing the exam, we’ve remained focused on our ability to provide the best possible test experience. Some recent projects include the exam’s move to a web-based application for better test delivery, as well as a new item type (Document Review Simulation) that offers a more realistic simulation experience. 

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4 steps to improve nonprofit functional expense reporting

Expense reportingCongress, the media, watchdog agencies and funders — almost everyone wants to know how nonprofits are using their scarce resources. They look at functional expenses to make that determination, so it’s important to present the most useful and transparent information possible.

To that end, FASB Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, requires not-for-profit entities to disclose their expenses by both functional and natural classification in one location. This ASU gives you good reason and opportunity to review your current classifications to determine if any changes need to be made as you prepare for implementation. ASU 2016-14 is effective for fiscal years beginning after Dec. 15, 2017.

How often does your nonprofit review its functional expense classifications? For most, it’s been a while. The following will walk nonprofit professionals through that process.

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Tax pros: How are you protecting your clients’ data?


“I don’t need to worry about identity theft because no one wants to be me.”

-Jay London

American comedian Jay London is funny, but identity theft isn’t. Unfortunately, cybercriminals know that targeting tax professionals is more effective than going after individual taxpayers; after all, tax professionals keep records on hundreds, if not thousands of individuals. This means any firm could be a target this tax season.

The IRS receives three to five data theft reports a week from tax practitioners. And, as IRS Commissioner John Koskinen said last year, “These (cybercriminals) are well-funded, knowledgeable and creative. It’s going to take all of us working together to combat these identity thieves. But doing nothing or making a minimal effort is no longer an option. Anyone who handles taxpayer information has a legal responsibility to protect it.”

While this may not be the time of year to do a full assessment of data security and technology integrity, there are steps CPA firms should take now to keep their clients’ data safe:

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Empowering women to be financial powerhouses

Women financial planning

While preparing to host a webcast on women and money for a client company recently, I was asked why I thought we needed to have a separate webcast just for women – doesn't money work the same way for everyone?

The fact is that yes, money is money. But the way we relate to money, combined with differing life expectancies and career factors, means that we need to approach the "why" behind exercising healthy financial behaviors a little differently.

While everyone has questions about money, here are 3 common questions that I hear from women clients, and how I typically advise them to approach those concerns. What better day to think about this than on International Women’s Day?

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Calling all CPAs – you should run for office

ElectionYou know that feeling you get when you’ve helped a client in a concrete way? Perhaps you saved them money on their taxes, identified waste or even fraud. Maybe you designed a plan to take their children through higher education, helped them save for retirement or protect themselves from loss. Possibly you advised a small business startup, or helped a larger company report on their cybersecurity controls.

What if you could take that feeling — and your service — to the next level?

When you’re a CPA, you have a solid understanding of the many issues that power government: taxes, their assessment and collection and the rules that govern them; small business challenges and needs; financial literacy and responsibility; and myriad details of budgeting, responsible record keeping and the impacts of financial decisions.

CPAs’ expertise gives them a distinct advantage over other candidates, making them uniquely qualified to serve as thought leaders in government. As the country ponders the effects of the first major tax overhaul in more than 30 years, now more than ever, there’s a need for tax and fiscal expertise in our public servants. Who better to serve the community and protect the public interest than CPAs?

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Credit losses: May the force be with your mission to CECL

Second in a series on the Financial Accounting Standards Board’s (FASB’s) Current Expected Credit Loss standard

YodaAfter years of debate over the role fair value accounting may have played during the subprime mortgage crisis, accountants seek to apply FASB’s current expected credit loss (CECL) standard as a “force for good” in their depository institutions.

If this is your mission for a bank, thrift or credit union, you probably feel like Luke Skywalker. Ultimately you want to be Yoda — thoughtfully presenting the keys to unlocking a force for good that can strengthen your institution against the dark side of internal disarray and competitive challenges.

As with any mission, success starts with understanding your situation and the power of resources at your fingertips. If you’re still struggling to read and digest the standard, “Do. Or do not. There is no try.”

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