347 posts categorized "Guest Blogger" Feed

4 Simple Ways to Squeeze in Exercise During Busy Season

ExerciseDuring tax season, accountants become accustomed to burning the midnight oil. Our long days turn into nights and nights into weekends. In the midst of our busy routines, it’s hard enough to balance career, family and a multitude of other obligations, let alone give adequate attention to physical exercise.

Carving out time for regular exercise is vital. Not only does it come with a variety of health benefits, but it also helps your mind work more efficiently. By investing in yourself and devoting energy to daily exercise, you will reap the rewards of better physical and emotional health as well as enhanced cognitive function – something we all need in order to conquer the busy season.

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FASB New Not-for-Profit Standard: Maintaining Auditor Independence

Shutterstock_314848547 (1)Although the Financial Accounting Standards Board’s new not-for-profit financial reporting standard (ASU 2016-14) does not go into effect until 2018, it includes significant changes that both not-for-profits and auditors should begin preparing for now.  

ASU 2016-14 will require several modifications to the existing framework of the financial statements as well as new required disclosures related to liquidity, availability of assets and board-designated net assets. Further, it may require organizations to revise certain policies and procedures, update financial reporting practices and make net asset accounting adjustments. All of this could seem overwhelming. 

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Here’s the Skinny on Driver’s License Information for State Tax Returns

LicenseAs you have probably heard, several states have added a request or a requirement for a driver license number (or other state identification number) to be entered into the tax software system for the return to be electronically filed. As practitioners, you likely understand the reasoning for the request – this information helps states confirm the identity of taxpayers, which aids in reducing identity theft. However, the logistics of obtaining the information and explaining this requirement to your clients may prove to be difficult.

Here are some frequently asked questions (and answers) to help you with this issue.

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Passing the CPA Exam: One CPA’s Journey

As many of you know, the journey to becoming a CPA is like no other—interesting, challenging, stressful, but nonetheless so rewarding in the end. Such was the journey of Shakor Jukes, CPA. An AICPA Accounting Scholars Leadership Workshop (ASLW) alumnus and currently an Audit Associate at RSM US LLP, Shakor credits his success to family, faculty, ASLW and his pure determination to succeed.

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What the Personal Financial Planning Body of Knowledge Means for You

Shutterstock_431851066Early in 2016, I heard tax icon Sid Kess speak about how important it is for CPAs to understand what housing alternatives our clients might need to consider as they grow older. I thought, well that’s an interesting aspect of our work that I hadn’t considered, and began to educate myself about the options and opportunities in the communities I serve.

That advice couldn’t have come too soon: within a month, my dad began expressing concerns about taking care of his home and asked to look at some local housing alternatives. While I had made myself aware of a few, I quickly realized there are so many choices that I didn’t have time to explore them all. Unfortunately, my father’s health declined rapidly and we had to move him three times: from his home to senior living; from senior living to a nursing home; and from the nursing home to hospice care where he passed away.

What this really brought home is that the work we do as CPAs is not cut and dried, and goes beyond what many people envision when they think of our profession. It’s probably also more than many budding CPAs—and those long in the profession—think we do. But the fact is that we must continue to deepen our knowledge and expertise as our clients’ needs expand and grow.

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7 Benefits of Cybersecurity Penetration Testing

Shutterstock_388491619Security breaches are prevalent in today’s business environment and reports indicate that these threats are not going away any time soon. As a result, organizations need to take steps to safeguard their confidential data and other sensitive information. Smaller-sized organizations like small businesses and not-for-profit entities are particularly vulnerable. A recent study by Symantec found that 43 percent of phishing campaigns affected small businesses in 2016, a significant uptick compared to 2011 when just 18 percent of attacks targeted small businesses.

Even organizations with limited resources have affordable and effective options for protecting valuable data. I recommend penetration testing, a type of cybersecurity vulnerability assessment, to my clients working in the not-for-profit sector. Many of my not-for-profit clients feel compelled to conduct cybersecurity penetration testing when they consider how accepting online donations may create vulnerabilities for not only for themselves but also for their donors. Potential donors may feel more comfortable donating online once they hear that the organization has safeguards in place to protect their information. Penetration testing is performed by an outside, third party and can be tailored to the needs, or concerns of the organizations.

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Get Ready to Face a Trifecta of Accounting Standards

Shutterstock_401287885The Big 3 Accounting Standards Updates (ASUs) ─ ASU 2014-09, Revenue from Contracts with Customers, ASU 2016-02, Leases, and ASU 2016-13, Financial Instruments – Credit Losses ─  from the Financial Accounting Standards Board pose significant challenges for CPAs. And, as their effective dates loom near, more and more practitioners are coming to realize the substantial level of work involved in applying these standards.

The Center for Plain English Accounting, the AICPA’s national A&A resource center, is receiving and answering quite a few inquiries about how to apply these standards. We recently celebrated our third anniversary of providing our members with valuable guidance on a wide array of accounting, financial reporting, auditing, compilation, review and preparation topics. Recently, we have been especially focused on providing our members with in-depth and practical implementation guidance on the new revenue recognition, leases, and credit loss standards. Below are three implementation questions and answers that we’ve selected to share with you.

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ID Theft: Two Prevention “Hassles” Worth Your Time

ID theftEven if you aren’t personally a victim of identity theft, as a CPA you still bear the burden of combating it on behalf of your clients. More often than not, for tax practitioners, the big cost is your time.

Recently, to help combat thieves, the IRS implemented various authentication measures, which emerged from the Security Summit. While many of these measures may not be noticed, some are quite visible. One measure, two-factor authentication for e-Services, has already prompted comments and complaints and another, the optional W-2 pilot program, is not being used much by practitioners and I suspect time has a lot to do with that too.

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Elder Financial Abuse: How CPAs Can Help – Part 1

Advising seniors

Scenario 1: Your usually chatty elderly client Nancy has become quiet and refuses to speak with you without her son Chris present. When they come in together, she is timid and acts nervous, while he is combative and secretive about sharing bank statements and other financial information. When you insist, you see discrepancies and unusual cash withdrawals, or other activity that he claims are for “household expenses, which are none of your business”.  

 

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Tax Reform in the 115th Congress?

Shutterstock_184356782 (1)Tax reform has been actively studied and discussed for the past six years by the 112th, 113th and 114th Congresses. At the start of the 112th Congress in 2011, Congressman Dave Camp (R-MI), then chair of the House Ways and Means Committee, announced the first in a series of hearings on fundamental tax reform to simplify the Internal Revenue Code and improve economic growth and job creation. Since then, Congress has held over 80 hearings on tax reform. In addition, several congressional study groups were formed and various proposals introduced. Yet, despite President Obama and congressional leaders supporting a lower corporate tax rate for international competitiveness purposes, tax reform did not occur in that six-year span.

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What’s in a Name?

Name TagI recently had the privilege of speaking on financial planning to 150 CPAs at a Washington Society of CPAs conference. I began my remarks by asking how many in the audience considered themselves financial planners. Only two raised their hands.

That surprised me. I know that many CPAs help clients with some aspect of financial planning, from tax, retirement and estate planning to succession planning and wealth management. And, frankly, who better to help clients negotiate their financial futures than CPAs? Clients already rely on us to provide trusted advice on other financial matters.

The sparse response got me thinking back about my own experience coming to terms with the term “CPA financial planner.”

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5 Ways to Drive Small Firm Growth

Shutterstock_550988503CPA firms across the country are thriving, according to the 2016 PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey. This unique study is the largest and most comprehensive examination of firms’ financial health and practice management approaches and solutions. To enhance the survey’s usefulness, the results are broken down into seven defined CPA firm segments, from small practices with less than $200,000 in annual revenue to large firms with $10 million or more. The latest survey found that firms are indeed doing well, with many practices making the strategic decision to reinvest profits back into the firm to build an even stronger foundation for the future.

Small firms appeared to have a particularly bright future. Firms with less than $200,000 in revenues who completed the survey reported growth of almost 11%—up from 8% in 2014. What trends or decisions are powering small firm growth? Here are some key insights based on the survey findings:

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Earlier Date for Information Returns Brings Penalty Risk

Time for ActionWe are all now facing a new Jan. 31 deadline for filing Forms W-2 with the Social Security Administration and 1099-MISC (when reporting nonemployee compensation payments in box 7) with the IRS. The earlier deadline will allow faster matching of W-2 and 1099 information with tax returns, which helps combat identity and refund theft. Unfortunately, when something is done to combat identity theft, it sometimes means extra work for practitioners, and with this new rule comes increased risk of penalties for not timely filing so we urge you to act quickly.

 

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Reflections on 2016: Diversity, Inclusion, Our Nation and Our Profession

Kim DrumgoAs December draws to a close, I’ve been reflecting on the many ways difference and respect have been brought to the forefront in our communities and on the political stage this year. I’ve witnessed tragedies and heard disturbing rhetoric that have left many in our nation feeling unsettled, and even fearful. We cannot ignore these realities because they help shape our strategies for the future.  And while it may be difficult for some, we all must do our best to continue to move forward and lead with clear vision. It’s important to recognize that respect, inclusion and difference made real advancements in 2016, and will continue to do so in years to come.

With this in mind, I’d like to take a moment to highlight several accomplishments in the accounting profession that I am particularly proud of, as well as accomplishments within AICPA’s diversity and inclusion (D&I) initiatives.

 

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Keeping it in Perspective: A Woman’s Take on the Profession

Financial planning adviserIt’s amazing how much things have changed. Back in 2004, I was recruited by my adviser and changed my career from forensic accounting to financial planning. I can clearly remember my first day in the firm’s Monday morning training; I was the only woman in the group and the firm owner addressed us as, “Guys… and gal.” I imagine his limited experience with women in this role (the firm had only employed a few other women advisers) caused him to want to tread lightly. His effort to include me was sincere, but in the process he made me feel different. It may not be surprising to hear that many financial planning firms simply do not have a large number of female advisers on staff in 2016, but they were even more scarce in 2004.

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Three Tips for Effectively Managing Remote Teams

Working remotelyWith business continuing to expand globally, leaders need to exercise new management skills in order to effectively engage an increasingly remote and diverse workforce. <click to tweet> In an article for CGMA Magazine, Dan Griffiths, CPA, CGMA, director of strategy and leadership at Tanner LLC, says, “One challenge of managing decentralized workers is giving them a sense of inclusion. Their in-person interaction is limited, but there are ways to make them feel like part of the team.” Read on for three tips from profession leaders on effectively managing remote workers:

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Unclaimed Property: When Does the Auditing Go Too Far?

Money and lockYou know those gift cards you never got around to using? It’s possible they are now being counted as revenue by the state. Same goes for uncashed payroll checks and other financial instruments that were never claimed or used. States’ interest in unclaimed property as a source of revenue continues to grow. CPAs need to be extremely alert to state abandoned and unclaimed property (AUP) laws (which continue to evolve) and AUP reporting requirements to limit surprises related to an audit.

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Find the Answers to Your Practice Management Questions

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Do you have questions about the best practice management direction for your firm? Should your firm consider value billing? Is your firm’s revenue comparable to other similar-sized firms in your area? How much are other firms investing in technology? The 2016 AICPA PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey has the answers. The profession’s largest benchmarking poll on practice management topics, which is conducted every two years, offers unique perspectives on the latest trends within seven defined CPA firm segments, from small practices with less than $200,000 in annual revenue to large firms with $10 million or more. The comprehensive data spotlights best practices for firms, identifies challenges and highlights how firms are tackling them. Practitioners can use the survey data to compare their own approaches with those of firms in the same region along with those with similar revenues. They also can compare their firms to others across the profession. Let’s look at some of the insights the latest survey has to offer. 

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Leave Yourself Behind When Working With Clients

Financial planner advising clientI once attended a workshop in which an established adviser shared a story from a conversation he’d had with one of his clients. The client was a young, affluent widow who decided she wanted to fulfill a lifelong dream to buy a condominium in her favorite city in Europe. While she could well afford the $2 million price tag, something was keeping her from pulling the trigger.

The adviser asked, "What is it that is really bothering you about this purchase?" After some deeper probing, she finally shared her issue: "It's just that I keep hearing my mother's voice in my head." (Her mother had died many years ago).

"And what is your mother saying?" he asked.

"She is saying that I am being frivolous with my money."

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Five Experts Advisers Should Follow

Social media 2 When I think about why I love being a financial planner, the first thing that comes to mind is the relationships I have with my clients. A close second is the community of other planners around the country who are some of the brightest and most engaging people I know. I consider myself extremely lucky to have been able to meet and learn from so many of these people. I could write an entire book about everyone who has impacted my career, but here are five who I think you should know:

  • Lyle Benson (@LyleKBenson) - Anyone who has been lucky enough to work alongside one of their parents will understand why I have my dad at the top of this list. I've been learning from him my whole life, but I'm certainly not the only person in our industry who has felt his impact. For years, he has been actively involved in the AICPA PFP Section and has put forth tremendous amounts of time and energy promoting CPAs who do financial planning. He is a driving force in our profession.
  • Bob Veres (@BobVeres) - Bob is a true visionary in the financial planning world, and he has an uncanny ability to see the future. He's a passionate advocate for financial planners and isn't afraid to ruffle feathers to make sure the general public knows who we are and what we stand for. He hosts the Insider's Forum each year, and his monthly newsletters are available to all AICPA PFP section members.

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5 Things You May Not Know About IRS Form 990

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With over 300 pages of instructions and 300 possible questions to answer, the IRS Form 990, Return of Organization Exempt From Income Tax is a complex and extensive form. It is filed annually by most exempt organizations, including charities. Here are five things you may not know or may have forgotten about Form 990:   

  1. It is a misnomer to call Form 990 an “income tax return.” There is no income tax calculation in the core Form 990 or within any of the accompanying schedules. The fact that it is not an income tax return becomes very important when attempting to apply the Internal Revenue Code to the filing of Form 990. Generally, where the Internal Revenue Code and the related regulations only reference an “income tax return,” the code or regulation in question will not normally apply to Form 990. It is very important, however, to remember that organizations subject to unrelated business income taxes (UBIT) file a separate Form 990-T, Exempt Organization Business Income Tax Return, which can be subject to the Internal Revenue Code and the regulations related to the filing of an income tax return.

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Six Tips for Valuation Experts in High Stakes Divorces

Man signing divorce papersThe headlines announcing Brad Pitt and Angelina Jolie’s divorce were just the latest in a slew of stories about celebrity splits. In fact, there are more than 800,000 divorces and annulments in the United States each year, according to government statistics. Based on my experience performing valuations in many high-profile divorces, much of the advice I’d offer to my fellow practitioners applies whether you’re working with Brad and Angelina or the divorcing, high-powered owner of a local business. Below are my top tips:

  1. Determine what’s at stake and how location matters. The assets in a divorce will typically include cash, retirement funds or a home. Often, the largest asset at stake is a closely held business. That can be a professional practice – if one or both partners are, say, a lawyer, physician or accountant – or an operating entity, such as a retailer, wholesaler, manufacturing business or a farm. The complexity of the engagement can be affected by the jurisdiction in which the case is being heard and can depend on state law. Be prepared, as the legal environment may produce unexpected complexities.

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6 Ways to Ease Audit Workload Compression during Busy Season

Shutterstock_270607559With the start of busy season just around the corner, planning is on most practitioners’ minds. I have recently spoken with many professionals about ways they jumpstart their upcoming audits. Outlined below are some activities to begin now that will make your busy season a little less hectic.  

Ask your clients to fill out background information forms. If there have been changes to their management, ownership structure or board of directors, ask clients to document them before busy season begins. Also, if your client has entered a new market, they should note these changes as well. You can provide your clients with the prior year documentation and transfer information to the new form as soon as it is available.

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Top 3 Takeaways on FASB’s New Not-for-Profit Standard


Shutterstock_276224309Are you nervous about implementing the Financial Accounting Standards Board’s new not-for-profit standard? At 270 pages in length, it is understandable that one would find it daunting and would be unsure of where to begin. Even though the standard does not go into effect until 2018 for most not-for-profits, you and your clients need to be thinking about the standard and your implementation plan now.

To start my education, I reviewed this AICPA Insights blog post from FASB member Larry Smith that provides an overview of the new standard. I also recently attended the webcast, “Applying FASB’s New Not-for-Profit Financial Statement Standard,” which was hosted by the AICPA’s Not-for-Profit Section team. I learned some practical tips and received information I can share with my clients.

Here were my top three takeaways from an implementation perspective:

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5 Essential Controls for Charities during the Holiday Giving Season

Shutterstock_395826034For not-for-profit leaders, strong controls for fraud are especially important during this time of year. The unofficial kickoff of the charitable giving season occurs on Giving Tuesday, which takes place the Tuesday following Thanksgiving, Black Friday and Cyber Monday here in the United States. In my state, Minnesota, we have a “Give to the Max Day” to encourage giving to nonprofits and schools before Thanksgiving.  A 2015 Charitable Giving Report produced by Blackbaud noted that of the not-for-profits surveyed, 17% of their contributions were received in December.  

Here are five things small organizations can do to protect themselves and ensure that the influx of contributions received this holiday season support programs, not fraudsters:

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3 Potential Financial Reporting Errors Found at Not-for-Profit Organizations

Shutterstock_388167307As a CPA who has been in public practice for many years, I know the challenges that not-for-profit organizations face in financial reporting, and, more specifically, in applying generally accepted accounting principles.

Financial statements provide a compelling picture of the not-for-profit entity’s activities. However, in my experience, there are potential financial reporting concerns not-for-profit organizations need to be aware of to make sure that picture is conveyed properly. Here are three errors that come to mind.

  1. Gross Reporting of Revenues and Expenses Related to Fund-Raising Activities.

GAAP generally requires that an organization report gross amounts of revenues and expenses in its statement of activities. However, there are situations where the not-for-profit may receive proceeds from fundraising activities net of related fees. In these instances, the entity would not report the net amount as contribution revenue; rather, the amount of the donor’s contribution would be reported as contribution revenue, and the fees would be reported as fundraising expenses. Consider the following:

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Tax Due-Diligence Checklist for Sharing-Economy Clients

UberPeople have been sharing services and property, and generating money from it, for years. For example, someone with a spare bedroom might have posted a note on a bulletin board at the local grocery store or advertised in the local paper to find a tenant. But do we understand the tax implications of the shared economy? That’s where CPAs come in.

Today’s technology allows for easier publishing and access to a wider pool of people for matching offers and acceptances. Using Airbnb or similar sharing websites, the owner with a spare bedroom will find that short-term rentals are relatively simple to arrange. Yet that same owner is unlikely to know the full tax consequences of this convenient rental, so it will be up to the tax preparer to ask the right questions.

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Why CPAs Should Learn about Integrated Reporting

Shutterstock_217047778Integrated reporting <IR> is receiving a growing amount of coverage worldwide lately, from both academics and from the accounting profession, and this trend shows no sign of slowing down. Books, research articles, presentations and other publications that highlight the potential opportunities of integrated reporting are becoming commonplace. The International Integrated Reporting Council has developed a plethora of resources including case studies and reports that provide a solid introduction to this topic. But a fundamental question remains unanswered. In terms of day-to-day implementation and data that can be acted upon, what exactly is an integrated report, and what does it mean for the CPA profession?


What is it?

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Four Steps to a Happier, Successful “Business” Retirement


Shutterstock_339672998As CPA financial planners and advisers, we spend a considerable amount of time addressing the technical aspects of IRAs, 401ks and defined benefit plans. We work to convert enterprise value into retirement assets. We consider diversification, funding strategies and tax implications.

Those issues are important, but it can be the personal and emotional aspects of helping your clients retire from their businesses that set you apart from other planners. Here are four critical steps to help you be a better partner to your clients who own a business.

Step One: Adjust the Conversation

The first step, and for many retirees the hardest one, is the mental adjustment of retiring after decades building a business and creating value. Then, one day, they sign a contract and turn those work responsibilities over to others.

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5 Tips for Becoming a Firm of the Future

Shutterstock_362297912 (1)Here’s a familiar scenario: A firm has been in business for decades, achieving success using a tried-and-true formula of providing high-quality work and great client service. As a new generation takes over and market demands change, however, the firm’s partners begin to wonder how they can grow the practice while maintaining the winning attributes that have made the firm what it is. They worry a major change will distract their team from the important business of serving clients—and eat up too much time and money.

That’s the situation my firm faced about five years ago. As the recession was coming to an end, the firm, which has been in business roughly 70 years, had about 25 people and around $3.5 million in revenues. Our culture had long been to work hard and play hard. We’ve held on to the spirit of camaraderie and the family environment our founders built, but as we moved forward into the millennium we hadn’t developed the internal structures we would need to manage growth. However, by making some strategic decisions, over the course of five years we have grown to a firm of 35 people and $5 million in revenues.

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3 Steps to a Secure Financial Future for Your Divorcing Clients

DivorceAnyone who has ever been through, or witnessed, a divorce knows that the pain of separating isn’t just emotional—it’s also financial. CPA financial planners may often feel at a loss as to what advice or guidance to offer distraught clients.

Let’s say your client Kate, age 50, calls in tears to tell you that her husband of 25 years, a high-level executive, wants a divorce.

“He wants to avoid using attorneys,” she says. “He made me an offer yesterday: He keeps all his retirement savings and I keep mine. I get the ski lodge; he gets the apartment in the city. We split cash and investments. I really don’t want to make him angry, but my own retirement will be so small. Is his offer enough?”

We all want what’s best for our clients and answering this complicated question will take some research. However, the most important factor is to avoid any conflict of interest. If you were advising the couple before the split, you may need a disclosure, a waiver or even a new engagement letter.

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5 Ways to Make the Most of Mentoring

Shutterstock_341095673A successful mentoring relationship, like all relationships in life, is about give and take. But in order to be successful, both mentor and mentee need to give genuine input. It isn’t as simple as the mentor giving and the mentee taking. Considering the value of mentoring, what can mentees do to guarantee they’re getting the greatest advantage from the relationship?

Be sure to opt in. Everyone’s schedule is busy, and mentoring may seem like something that’s easy to delete from a crowded calendar. It’s a mistake to underestimate the importance of support, however. Among other things, a mentor can help you assess your priorities, which can ensure your time is spent wisely and more productively.

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3 Steps to Maintain Independence When Preparing Financial Statements

Shutterstock_302730485Consider this scenario: A longtime tax client of yours approaches you. They are interested in starting an online gaming platform with a colleague and have already landed a significant contract. The future of this business appears bright. A local bank has agreed to extend them a $75,000 line of credit, contingent on certain ratios and providing monthly financial statements and copies of all tax filings. You client asks you if you would be interested in performing nonattest services on their behalf. They are looking for a CPA to prepare the new venture’s monthly financial statements for the bank so the bank can monitor compliance with its ratio requirements, while the client maintains the books.

The current loan covenant only calls for a complete set of financial statements, classifying the engagement as a nonattest service. You do not need to be independent to prepare your client’s financial statements, however, based on the new venture’s growth trajectory, you believe that at some point in the future, attest services will likely be needed. Because of this, you decide to take certain steps to maintain your independence in case your client’s needs change, and you are asked to provide a service that requires independence down the road. Below are three steps you take to maintain independence.

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4 Key Facts about the New FASB Not-for-Profit Standard

Shutterstock_413674186Are you ready for significant changes to the financial statements of not-for-profit organizations? 

The Financial Accounting Standards Board recently released Accounting Standards Update (ASU) 2016-14 Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities.  ASU 2016-14 is the result of a multi-year FASB project conducted to review the financial reporting model for not-for-profits that has been in place for approximately 20 years.  As a result of the review, the FASB identified several areas of the financial reporting model that needed improvements or updates to provide better information to those that rely on the financial statements issued by not-for-profits. 

The full standard spans 270 pages (view it here) but it is not as daunting as it may seem. Here are four key facts about the new standard to keep in mind:

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7 Key Communication Points for Your Clients with Extended Returns

SevenAs the final extension deadline of October 15 (for individual clients) approaches, it is hard to believe it is almost time to flip the calendar to another year. Although finalizing your client’s 2015 Form 1040 is the most pressing item on the agenda, it’s important to focus on year-end planning. The good news is that with the tax legislation signed last December, tax planning should be easier since many provisions were extended through 2016 (or longer) or made permanent.  However, this is a presidential election year, and there is uncertainty about how a political change might impact tax reform and/or legislation.

Let’s focus on the good news (and what we can do for our clients). Here are seven topics to discuss with your clients as you wrap up their 2015 returns that will provide them the extra client service that they expect and deserve.

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Drones on the Horizon for CPA Firms in 2017

DroneNew federal regulations mean CPA firms will have easier access to an unexpected tool for audits and inspections: flying robots.

Unmanned aircraft systems, commonly referred to as drones, have a wide range of commercial applications, including law enforcement and rescue operations. CPA firms are finding ways to use drones to audit and inspect land, agriculture and facilities as a safer and more cost effective alternative to manual inspections.

For the past several years, commercial drone use has been mostly limited to larger firms because of a burdensome and costly Federal Aviation Administration (FAA) approval process. But on August 29, a new FAA rule took effect that broadly authorizes commercial drone operations in the United States, giving CPA firms of all sizes an easier path to incorporating drones into their operations. For example, the new rule allows the commercial operation of drones under 35 pounds, whereas previous regulations mandated that commercial drone operators had to apply for a special license from the FAA.

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A Passion for Education Proves Perfect Formula for Ross Riskin, CPA/PFS

Ross Riskin Profile PictureMeet Ross Riskin, CPA/PFS, CCPS, vice president of Riskin & Riskin, PC in Orange, Conn. Ross is definitely not your typical CPA; he has a unique passion for helping college students and their families,  a direct hand in CPA education and a thoughtful take on incorporating the AICPA’s Essentials of Financial Planning curriculum into the classroom.

AICPA: You’re founder and managing member of Riskin Advisory, LLC, described on your website as “a college financial planning practice.” How are you helping students and their parents plan for college expenses?

Ross Riskin: I work with families and recent graduates to help them develop plans to save and pay for higher education expenses in the most financially efficient manner. I approach the college and education planning process from tax, financial aid, and cash flow planning perspectives. Whether a family is trying to navigate the complex financial aid process, a grandparent is trying to develop a funding plan for their grandchild, or a recent graduate is trying to come up with a game plan to tackle their student loan debt, I am happy to advise them about the best course of action.

AICPA: How does being a CPA and a PFS support your expertise in education planning?

RR: Being a practicing CPA has provided me with the educational and professional experience required to enhance my knowledge of tax planning. Obtaining the PFS credential has helped me approach college and education planning from the perspective of an accountant and an adviser in order to develop comprehensive solutions for clients to help them see the big “financial” picture. Education planning is an area that hasn’t really been a focal point of planning to the same degree that tax planning and investment planning have been, and I am dedicated to working each day as a CPA/PFS to shift that focus and help families plan and take action in a holistic way.

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The Secret to Quality Audits and Fine Wines? Quality Control

Vineyard“Quality means doing it right when no one is looking.”
Henry Ford

Browsing the internet and looking at websites of CPA firms I notice they pretty much all talk about being quality firms. We all believe we have quality, but just what is quality?

As I sit with my evening glass, I realize what draws us to a fine wine is the diligent process to produce the beverage we enjoy. The process for producing a fine wine is not unlike the accounting and auditing world. Indulge me as I demonstrate the similarities.

Winemakers must identify critical points in the process where problems can arise in order to  eliminate or minimize precursors for taints and faults, and then rectify any problems that still do occur. 

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Helping Clients Plan Ahead for College Expenses

College savingsAs the cost of undergraduate, graduate and professional education continues to soar, having enough money set aside to pay for college is no longer a “nice-to-have” component of financial planning. It is essential to devise a thoughtful, cohesive plan to keep clients on course toward achieving their financial goals, within the larger context of their financial situation, investment horizon, risk tolerance, and resources.

Helping clients understand how much to save based on their education goals prepares them for the cost of college. 

Six Considerations

In trying to approximate future college costs and the amount clients will need to save to pay the college costs of the future, you’ll need to help them make several assumptions and determinations:

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7 Key Facts on the FASB’s Revenue Recognition Standard


Shutterstock_348454145Transitioning to significantly new accounting guidance is always a critical process, and that’s particularly true with the Financial Accounting Standards Board’s Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606). Since the effective date for this important guidance has been postponed, CPAs and their clients can now make the most of the added time they need to begin understanding and preparing to apply the standard. Here are seven facts that CPAs should know about this key standard.

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2704 Regs May Eliminate Discount: Practitioners Must Plan Now


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Most practitioners are aware by now that the Treasury has proposed regulations under Code Section 2704 that would generally eliminate valuation discounts on transfers of interest in family entities. This means that practitioners should advise all wealthy clients to review planning options before year-end when these new rules might become effective.

The AICPA will examine the regulations and offer comments at the Dec. 1 IRS hearing; however, to be safe, advisers should proceed with the assumption they will take effect as is. Outlined below are four practical planning steps practitioners should address with their clients before year-end.

Step 1: Identify Clients Affected

Clients who own large real estate or valuable family businesses that can currently be discounted for transfer tax valuation purposes, but which may not be able to be discounted after the effective date of the regulations, should focus on planning for the new regulations. In 2012, when the estate tax exemption was modified from $5 million to $1 million, many clients rushed to modify their plans in advance of this change. We will likely experience similar activity this year, as clients strive to complete planning to address the discount rush before year-end.

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Mr. Miyagi Can Help You Master the Exam

Pat-Morita_(Karate_Kid)In the iconic 1984 film The Karate Kid, Daniel, the young protégé of Mr. Miyagi, can’t understand why he’s being told to do basic tasks such as paint the fence, sand the floor, or polish the car with “wax on, wax off.” Daniel thinks he should focus on karate moves. While he pushes through and does what Mr. Miyagi tells him, Daniel eventually realizes the value and relevance of these tasks when he begins to spar. Each task in its own way serves as the basis for developing Daniel’s martial arts skills and ultimately prepare him to win the tournament against the Cobra Kai.

While we’ll never know if Daniel subsequently dropped his martial arts training to pursue a career as a CPA, one thing is certain – Mr. Miyagi taught the essential lesson that learning the basics and understanding foundational concepts is the key to success.

CPA candidates can learn a thing or two from Mr. Miyagi’s teachings when it comes to understanding the importance of the content covered in the Business Environment and Concepts (BEC) section, and how to manage it when sitting for the Exam. Since the introduction of BEC, the section has long been a mix of essential general business information, including corporate governance, economics, information technology, and financial and operations management, which provides a foundation for the other sections of Audit and Attestation (AUD), Financial Accounting and Reporting (FAR) and Regulation (REG). As a component of the Exam, the section reinforces the value of core business knowledge that a CPA must bring to the table when providing audit, accounting and tax services.

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3 Ways to Make Your Value Clear to Clients

Shutterstock_244717456Value pricing has been a hot topic among CPA firms for a while now as it enables them to focus on what clients really care about. All firms should consider adopting this approach. But while you may be able to quantify the value of what you offer clients in time, it’s crucial not to stop there. Do you know, for example, what truly matters to your clients? What they value in their relationship with you and the services you provide? While your approach to billing is important, the most critical concern for any firm should be the client’s perception of value.  These three steps will help you better understand your own value, ensure that clients are aware of all that you’re worth to them and enable you to take your client relationships to a much deeper level.

  1. Make It Personal

It is important for clients to associate high-quality work and a strong relationship with you and your firm. If another firm promised to complete the engagement for less, would your clients run? You have to differentiate yourself from the competition in a unique way. As simple as it sounds, you should initiate regular meaningful contact with your clients throughout the year, not just when a due date is looming as many CPAs do. Establish a system or process for reaching out so that it happens methodically. Make sure clients realize you aren’t just the person who delivers only compliance work or some required paperwork, but rather the trusted business adviser they can count on.

You can radically change your client’s perception of your firm’s value when you:

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FASB Releases New Accounting Standard for Not-For-Profits


Shutterstock_238756393On August 18, 2016, the Financial Accounting Standards Board issued a standard that affects all not-for-profit entities issuing GAAP-basis financial statements. The new standard simplifies and improves how a not-for-profit entity classifies its net assets as well as the information it presents in financial statements and notes about its liquidity, financial performance and cash flows.

One goal of the standard is to improve how not-for-profits (like charities, foundations, colleges and universities, health care providers, religious organizations, trade associations and cultural institutions) communicate their financial performance and condition to their stakeholders.

 

Why a New Standard?

The current not-for-profit financial reporting model has held up well for more than 20 years, however, the FASB’s Not-for-Profit Advisory Committee and other stakeholders have reported that, while existing standards were sound, they could be improved to provide better information to users of not-for-profit financial statements.

Specifically, stakeholders voiced concerns about the following issues:

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5 Key Facts about the New FASB Leases Standard


Shutterstock_165181559What is a lease? And how should it be reported on a balance sheet? While your clients may not have spent much time pondering those questions in the past, the answers will take on new importance for them when a new Financial Accounting Standards Board standard on Leases becomes effective. While it’s true that the final guidance generally does not depart from existing GAAP as much as some earlier FASB proposals on this topic, practitioners should be prepared for significant changes in how all organizations that have lease assets—including private entities and not-for-profits—will account for leases. As practitioners begin to educate themselves on the guidance, here are five critical issues to keep in mind.  

  1. Lessees must now recognize operating lease assets and liabilities on the balance sheet. This is the most significant change, since it will require all organizations and their CPAs to take a different approach to lease accounting. Before this standard, U.S. GAAP only required this type of recognition for capital leases. Operating lease amounts were generally shown in the financial statements as rent expense on the income statement and in disclosures to the financial statements. In implementing the new guidance, entities will have to reconsider the ways they identify lease arrangements.

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Salsa, Scenery, and the CGMA


BSachdeva-3605Bikram Sachdeva loves salsa and bachata dancing. You might also find him capturing landscapes, skyscapes, and nature scenes with his camera during travels to Senegal, Ghana, Tanzania, Mongolia, El Salvador, Nicaragua, and Jordan—countries where he’s monitored over $ 1.5 billion portfolio of projects.

Sachdeva is a CPA and CGMA, to name just two of five professional designations on his business card. “I hear a lot of stereotypes when people see my business card,” said Sachdeva, director of fiscal accountability at the Millennium Challenge Corporation (MCC), an independent U.S. Government aid agency that works to reduce global poverty through economic growth. “Some people assume that because I’m a CPA, I’m not outgoing. They’re surprised when I tell them I love to dance and take pictures, especially because these interests tend to be outside the norm of what people expect from an accountant.”

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How to Supercharge Your Not-for-Profit’s Board to Achieve Scalable Impact

Shutterstock_174469097When considering the future success of a startup organization, thoughts naturally turn first to a clearly defined vision, mission and strategy for putting plans into action. After that, many ask, “How do I galvanize my staff and volunteers to lead?” Social impact organizations affect the most critical challenges facing our society-- for example, lifting individuals out of poverty, providing access to vital services and fighting inequality. Having the right staff is critical and having the right board of directors is equally important. Scaling an organization’s impact means not just maintaining core processes, but also constantly sharing knowledge to build the organization’s capacity to affect change. Without leadership to keep the organization focused, staff can fall victim to fighting the daily fires that are a distraction from the larger goal of expanding the organization’s reach.

So how can you supercharge your board of directors? Here are four things to consider:

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6 Planning Ideas for CPAs Who Have Aging Clients

Aging clientsYou might have noticed the “graying” of your clients and thought “how can I, as a CPA and trusted adviser, provide services that meet their changing needs? What are the practice considerations surrounding those services?”

Recently, we served on a panel at the AICPA Conference on Tax Strategies for the High-Income Individual that focused specifically on these issues. Consider some of the following ideas gleaned from the session and how you may be able to incorporate them into your practice:

  1. Services: Cognitive challenges often affect executive functioning, such as the ability to handle day-to-day finances. Services you might offer include automating finances such as bill paying, monitoring investments, and reviewing banking records to identify elder financial abuse. With clients more commonly living into their 90s and beyond, budgeting and the recurring financial responsibilities of an individual or family take on a very different nature.

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Advising on U.S. DOL’s Overtime Rule and Worker Classification Issues

Shutterstock_282297254I don’t know about you, but I’ve been having more conversations with my clients on employment issues lately. The new U.S. Department of Labor’s (DOL) overtime rule was announced May 18 and goes into effect December 1, 2016. Among other things, the new rule extends eligibility for overtime to certain white-collar workers by increasing the wage threshold from $455/week to $913/week ($47,476/year).

When my clients call with a “quick question” about the new rule, I chuckle to myself. These calls usually take an hour or more, as one question leads to another. These worker classification decisions can have major budget implications, particularly for small businesses and not-for-profits, and there is little time to come into compliance before December 1. In many small businesses without an HR department, employment issues fall under the finance or accounting function. 

Here is the basic guidance I’ve given to clients:

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The 4-Step Coach Approach to Client Service

CoachBefore CPA financial planners can provide expert counsel to clients, they first must get to know them in a very meaningful way. The process involves asking self-reflective questions and something I like to call the “coach approach” to client discovery.

The coach approach is a cooperative process, or a two-way street, and comes from material published by motivational expert Michael Pantalon. A good planner (the coach) guides and motivates, imparting knowledge along the way, but the client must also have some skin in the game with a commitment to executing the plan. After all, a basketball player could be coached to improve his game, but the player must commit to practice, and ultimately perform, before any real progress can be made.

Here are four steps to the “coach approach”:

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