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17 posts from March 2018

Introducing our newest heroes: “The (CP)A-Team”

CPA TeamPop culture seems to be obsessed with the 1980s.

Remakes of popular blockbuster hits are now the norm for movie-goers. From “RoboCop” to “21 Jump Street” to “Footloose,” today’s entertainment is all about nostalgia.

So, it’s no surprise that television’s favorite action drama, the “A-Team,” would make a comeback. Updated for 2018, the reboot is coming to prime time. And this time, the fearsome foursome is taking on the single greatest threat to our security: cybercriminals.

Airing at 8 p.m. Wednesdays on your television or tablet is America’s newest special task force: “The (CP)A-Team.” Each half-hour episode features the all-CPA unit as they travel the world detecting and responding to cyberattacks and data breaches.

Cyberattacks are on the rise. Personal information is swapped for pennies on the dark web. Ransomware is lurking in the shadows of your desktop. And one team perseveres against it all to expose cyberthieves and other scoundrels.

In 2002, this crack team of auditors met on the job. Fresh out of college and stepping into the vast world of accounting, they found in each other a bond that nothing could shake. Once they graced the cubicles of Metro Zero, New York City’s finest financial institution. Today, they survive as practitioners with a purpose: protecting millions from the loss of sensitive personal and corporate information.

Jane “Caesar” Jones is a master of disguise. She is most commonly seen portraying beauty school dropout “Mrs. Bentley,” a salon owner who uses weak passwords and unsecured wifi devices as part of a ploy to entice small-time hackers. As the leader of the group, it was Caesar’s idea to go rogue after discovering Metro Zero shared client data. Now on the run, she and her team aim to level the playing field and repair the damage done.

Nick “N.N.” (Negative Nelly) Nichols is the muscle for the (CP)A-Team. N.N. is always in a bad mood but is the first on the scene when things get hairy. Armed with only a laptop and personal hot-spot, N.N. attacks hackers before they can reach your server. A reformed hacker, his secret past is known to only Caesar.

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7 things every nonprofit should know about restricted assets

Restricted cashYour nonprofit is on a mission. Like any other business, your work requires careful accounting and financial reporting. Unlike other businesses, your not-for-profit organization has special requirements on the use and reporting of restricted assets.

As an auditor specializing in the nonprofit sector, I get a lot of client questions about restricted assets. The following are some of the most common issues we encounter and tips for dealing with them.

  1. Fundraisers can create unintended restrictions. Donors like to support programs and projects near and dear to their heart. Your fundraising staff is skilled at designing heartfelt appeals. If you’re not careful, overly specific fundraising language can create restrictions that limit your ability to operate. Keep your accounting staff looped into the fundraising communications planning and approval process to avoid problems down the road. When in doubt, run it by your auditor.
  2. “Restricted cash” may include more than you think. Many nonprofits present cash and cash equivalents that have restrictions in multiple line items on their statements of financial position. In some cases, these line items are labeled something other than “restricted cash” or “restricted cash equivalents,” such as:

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Blockchain could be your solution to spreadsheet fatigue

Block chain 2Over 25 million Americans are still dealing with repairing airbags from one of the largest series of recalls in U.S. history. Car owners are waiting months for repairs – and many are unable to drive their cars while they wait for them to be fixed. Talk about inconvenient, expensive and frustrating.

Now imagine if airbag recalls didn’t have to be such a mess. Blockchain offers an intriguing solution.

Blockchain is a distributed ledger system that can be put to work managing our supply chains. Think of a big spreadsheet or Google doc that you use to record every transaction in a supply chain – from manufacturer to end user. Now imagine that every supplier, manufacturer and seller in the chain has access to that spreadsheet at the same time as you and is updating it with verified information in real time. Except, unlike a Google doc, you can’t retroactively alter information on the blockchain – making it extra secure.

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Finding your second wind during busy season

Final sprint of busy seasonThe last stretch of busy season can be tough.

So how do you get that mojo back? Just like your car, your body and brain perform better under certain conditions. Use that analytical brain that makes you a great CPA and run through some key sources of energy to see where you can replenish.

Time to do a quick 6-point check:

  1. Air – When was the last time you exercised? How often are you moving around during the day? A runner’s ability to get a second wind in a marathon depends on how well they restore oxygen to their muscles. Your brain needs a little more oxygen to function best in the tax season marathon. Exercise stimulates blood flow to your brain, which leads to more oxygen and more energy. If taking a brisk walk or hitting the gym is not feasible, here are some exercises you can do at your desk.
  1. Light – Winter is a tough time to be working a lot, especially if it’s dark when you go to the office and it’s dark when you leave. Just as oxygen has been proven to stimulate brain activity, light can affect your mood, which influences your energy level. Take a moment to go outside and soak up the sun.
  2. Fuel – I can’t say “lay off the caffeine” without being a total hypocrite. Instead, I will suggest keeping an eye on how often you’re filling up that coffee mug, especially since it may mess with your sleep. Stay hydrated by drinking two glasses of water after each cup.

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7 ways women can advance their careers

Woman hula hoopWomen’s History Month is a great time to take inspiration from the achievements of outstanding women, and a chance to check in on your own goals. Are you aiming for advancement and trying to decide the best ways to get there? These are some steps you can take to enhance your prospects for getting ahead.

  1. Set yourself apart. What does your organization need? Someone to spearhead cybersecurity efforts or to develop a strategy for addressing the impact of blockchain technology? A professional with expertise or a strong interest in a new and promising service area? Becoming the go-to expert in a hot topic area can raise your visibility and put you in a better position to be considered for new roles or leadership opportunities.
  2. Get on track with mentoring. Need an objective source for advice and career insights? Be sure to take advantage of any mentoring options inside and outside your company (these free mentoring and networking resources will give you some pointers). Once you have some experience under your belt, it’s also a good idea to offer to become a mentor to a less seasoned professional. It can be a satisfying and educational experience. It also helps you learn and demonstrate leadership skills that will benefit you as you move up the management ladder.

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Lead with inspired authenticity: chuck the checklist and find your why

Paper cranes leadershipHave you ever made your own “leadership skills checklist”? If you have, it probably included things like “active listening,” “decisiveness,” “delegation,” and “motivation,” to name a few. As accountants, we love to create checklists that can get us to a well-defined outcome – so why would we treat our efforts to become great leaders any other way?

The thing is, if we are only checking off skills on a list, are we really developing into the best leader we can be?

I believe the answer is a resounding NO!

To become the best leader we can be, we have to get past our skills checklist and dig into who we are and what drives us. If we can stop worrying about checking off skills and instead focus on our true purpose, we can lead our teams with authenticity and inspiration.

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Nonprofit risk management 101

JengaNonprofit organizations are, by definition, on a mission. In pursuit of their missions, they may engage in risk-reward scenarios that for-profit businesses can’t afford to tackle. To further their cause, many nonprofit leaders accomplish more with less funding than seems possible. Unfortunately, limited resources create risk exposures. This may lead nonprofit management and boards to believe they can’t afford a risk management program. But they can’t afford not to.

Public trust is foundational to nonprofit organizations’ sustainability. Left unmanaged, risks can result in all sorts of losses: donors, employees, members, patrons and grants. Often, it’s not until a critical event occurs that risk management moves up the priority list.

In our experience (although risk management can seem overwhelming — especially for smaller organizations), it’s worth the time and resources.

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How your organization handles personal data is about to change

GDPRIf your organization or client handles personal data of any person residing in the European Union—even if the organization itself isn’t located there—pay attention. The way you store and manage that data may need to change significantly.

Enforcement of the EU General Data Protection Regulation (GDPR), which was ratified in 2016, will go into effect May 25, 2018. The GDPR was created to allow individuals to have greater control over their personal data and provide consistency across the EU member countries when it comes to data privacy rules. According to EUGDPR.org, personal data is defined as “any information related to a natural person or ‘Data Subject’ that can be used to directly or indirectly identify the person. It can be anything from a name, a photo, an email address, bank details, posts on social networking websites, medical information or a computer IP address.”

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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?

Cybersecurity

“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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