428 posts categorized "Guest Blogger" Feed

3 Solutions to Firms’ Top Challenges

Find the right peopleYour practice is thriving, but there are some issues that continue to present challenges. Are other firms like yours facing these issues, too? And what trends are other CPAs seeing that you ought to know about?

Practitioners can find the answers to these questions and more in the results from the 2017 Private Companies Practice Section (PCPS) CPA Firm Top Issues Survey . This unique survey, which is conducted every two years, identifies the significant concerns for firms of various sizes and spotlights emerging challenges in practice management. Barry Melancon, President and CEO of the Association of International Certified Professional Accountants, provided an overview of the survey results yesterday during his Professional Issues Update at the AICPA ENGAGE Conference.

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Kevin O’Leary Says CPAs Can’t Be Replaced. Take That, Mark Cuban.

Kevin O'LearyKevin O’Leary, businessman and co-host of the TV show Shark Tank, says the CPA’s role as a trusted adviser in the marketplace cannot be replaced by technology. That stands in stark contrast to the comments his co-host Mark Cuban made earlier this year.

Score one for Mr. Wonderful.

O’Leary, a keynote speaker at the AICPA ENGAGE Conference on June 13, joined me for a Facebook Live session and spoke with me off camera about how technology is impacting the accounting profession. His comments were on point.

“Half of the work the CPA does is to deal with people, to have relationships with people, and to decide how to work with their desires, their direction, and their vision for their business. That is never going to be replaced by a machine,” O’Leary said.

Technology is evolving faster than ever before, but so too are the needs of businesses. For example, while big data means greater accessibility to information, it also creates a need for the analysis and interpretation of that information. While advances in robotics may change some business operations, companies still need advice on how to run those businesses.

“The truth is that we are going to need CPAs more than ever. Their role is to try to figure out and mitigate risk at every stage, and to say, ‘If we do it this way, here is the tax implication. If we do it this way, this is the cost implication.’ The profession is going to continue to flourish,” O’Leary said.

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4 Steps to Fortifying Your Cybersecurity

Cybersecurity 4Small businesses are “unprepared or poorly prepared for a cyberattack” according to 75% of the 307 insurance and risk management advisors surveyed through the Advisen and Experian 2017 Cyber Risk Preparedness and Response Survey. Unfortunately, no organization is immune to cyberthreats. These days, most companies should have some basic form of cybersecurity program in place. If yours doesn’t, or if you need a refresher, here are four steps you can take to establish a stronger foundation.

Step 1: Create a Comprehensive Set of Cybersecurity Policies

What resources does your organization have that are at risk? Think beyond the obvious. On-site computer systems, laptops, tablets and mobile phones are immediate suspects, but bring your own devices (BYOD) and wearable technology such as smartwatches can also be compromised. Determine what controls you need in place to ensure information is kept secure. Set your rules for communicating, working with, copying and distributing sensitive data; and document those rules and make sure everyone in the organization receives a copy. Necessary policies typically include an IT policy, information security program (including a risk assessment), employee acceptable usage policy, business continuity and disaster recovery plan, and an incident response plan. 

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The One Vulnerability Cyber Thieves Are Desperate to Exploit

PasswordCybersecurity attacks are becoming more pervasive and seemingly effortless to pull off.  Cybercriminals who can execute a successful attack are seizing credit card numbers, bank account information and even Social Security numbers. A 2016 study conducted by the Ponemon Institute found that the average cost of a data breach is $4 million. You can strengthen your organization’s cybersecurity risk management plan by addressing this one vulnerability: weak passwords.

The capture or reuse of passwords, or “static credentials” as they are often referred to in the IT industry, is standard practice for organized crime groups and state-affiliated attackers alike, according to the Verizon 2016 Data Breach Investigations Report, whose list of contributors represents a “who’s who” of cybersecurity expertise worldwide, from both the private and public sectors. Likewise, passwords are used against all kinds of targets, from the largest organizations to individuals.

A common misperception is that cyber attackers have become so sophisticated that something as simple as a password is no longer effective. The tendency is to think that if federal agencies and multi-national corporations can be breached, there’s nothing individuals can do to protect themselves. This could not be further from the truth. Individuals have the most power in preventing attacks that exploit passwords, which is why a policy on passwords should be a key component of your firm or organization’s cybersecurity risk management program.

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Not-for-Profit Contributions: Counting v. Accounting

Counting moneyWhen is a contribution to a not-for-profit really a contribution? Many would say it depends on whether you ask someone in the accounting or development department. While the accounting office recognizes contributions in accordance with generally accepted accounting principles (GAAP), there are no required standards for counting and reporting fundraising receipts by the development office. The resulting differences create perhaps the greatest source of tension between the two teams. So what can be done to bridge the gap and foster a cooperative relationship that will best benefit the not-for-profit?

First, accept that what gets reported by each group will be different. And that’s okay, as long as the differences can be explained. There’s no need to hash out who’s right or wrong; just take time to understand each other’s math. What gets included, by whom, and when? Accountants need to explain GAAP in “non-accountant” language. Similarly, the development team needs to establish and share its consistent guidelines for reporting fundraising activity. Developing this understanding will take time and patience on both sides but is essential to forming a good working relationship.

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Social Media: The Conference Success Secret Weapon

Conference social mediaConferences give you the opportunity to network and become energized about the accounting profession and the direction in which it’s heading. Most people know the standard networking methods – attend receptions and collect business cards. But how can you make the most of the experience before, during and after the event?

Social media is present at almost every conference, giving you the opportunity to develop high-quality connections while staying in the loop on all the happenings.

Here are five ways you can utilize social media to make the most of your time and money:

Join the conversation.

As social media becomes omnipresent, if you don’t look to these platforms, you’ll miss out on the opportunity to join conversations about conferences and events. Follow the event hashtag on Twitter and Instagram or see if the organization hosting the event has LinkedIn groups you can join. By using these interactive forums, you can see who else is attending an event, set up conference meetups, and even reach out to influencers who may be on site.

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Coming Trends in Services to Individuals

CPAs are forward-thinking and relationship-oriented professionals. Taking the time with individual clients to think about their needs holistically has been a growing trend in the profession over the past decade, leading to the many new areas that now benefit mightily from the expertise and insight a CPA can offer. These are exciting times that bring new possibilities for firms that are willing to embrace them. The firms that do will find success, longevity and a satisfied client base.

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5 Tips to Help Identify Fake Financial News

The AICPA National CPA Financial Literacy Commission Shares Insight on How to Beat the Real Threat of Fake Financial News

If it’s on the internet and in ALL CAPS it must be true! Whether it’s the GUY WHO TURNED $10,000 INTO $20 MILLION or the HOT TECH STOCK THAT WILL SHOCK YOU, you’ve probably seen some version of this fake news dozens of times a day. And, if you’re like me, you’ve probably clicked on one of these articles out of curiosity and quickly found yourself lost in a sea of misinformation. Sometimes it seems like you need to be a detective to decipher what financial news is real and what is fabricated. In this post, I’ll provide some information to help consumers be better prepared. Fake Financial News Infographic

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3 Tips to Help You Remember What You’ve Learned

TabletYou’ve probably heard the expression use it or lose it. It turns out this applies to learning as well as physical fitness. There is a force that gradually erases all the great insights and instruction you stored in your brain during a learning event called "The Forgetting Curve.” German psychologist Hermann Ebbinghaus first researched this concept in 1885. The curve illustrates the decline of our memory retention over time if we make no attempt to retain our learning. The further we get from the educational experience, the less information we remember.

The speed at which we forget information is influenced by various factors including the difficulty of the material, how meaningful the information is and how it’s presented. Stress levels and lack of sleep can also have a negative impact. Thankfully there are steps you can take to help you retain what you learned. Here a few of my favorite tips to help you remember.

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5 Tips for Navigating the Road to Leadership

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

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

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4 Things Advisers Should Know about Technology Today

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

The Pace of Change in Financial Technology (FinTech)

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

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What Motivates Donors to Give?

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

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

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Top 5 Reasons to Dig into the CPA Exam Blueprints

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

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

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

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

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7 Ways to Improve Workforce Diversity

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

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

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How to Get the Most Out of a Virtual Conference


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

Benefits of virtual conferences

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

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3 Tips to Manage Sustainability Risks and Drive Value

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

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

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

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Find Answers to Your Cash and Tax Basis Questions

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

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

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Don’t Let Clients’ Retirement Fall into This Trap

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

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

What Are Self-Directed Retirement Vehicles?

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

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

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

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

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

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

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

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

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Valuing Contributions to Major Advancements in Medicine

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

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

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

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5 Silent Killers of a Financial Plan

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

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

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

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

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Will a New EBP Audit Proposal Enhance Quality?

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

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

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

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

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Bingo Balls, Atomic Elements and Passing the CPA Exam

Bingo ballsThe number 75 has various meanings around the world. It can sometimes denote a diamond anniversary. It’s the age limit for a juror in England and Wales. Science junkies know it as the atomic number for the chemical element Rhenium. And here in the U.S., it’s the number of balls in a standard game of Bingo; something which I’m sure fans of the game are quite aware of at their Friday night get-togethers.

But, the number 75 holds no greater significance in this world than for the 100,000-plus of you who sit for the Uniform CPA Examination each year. Achieve that number or higher on any of the four sections of the exam, and you’re one step closer to licensure.

A common misconception for those new to the CPA exam is that 75 is a percentage or number of questions answered correctly. No, you don’t get a “C” on the exam if you score a 75. It’s simply the passing mark that signifies you have demonstrated the minimum knowledge and skills necessary to protect the public interest as a CPA.

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Thriving with Autism: One CPA's Story

Tom IlandAccording to the Center for Disease Control (CDC), one in every 68 American children is diagnosed with Autism Spectrum Disorder (ASD). A newer government survey boosts the prevalence of this condition to one in 45 children. Though the frequency of autism remains debatable, it’s undeniably among the fastest-growing developmental disorders in the U.S., with diagnoses having increased 119.4% since 2000.

Now, pivot to the inevitability of Generation Z, post-millennial youths constituting 20% of the workforce by 2020. When you consider the staggering prevalence of autism in this particular age group and combine those occurrences with the even more daunting unemployment rate of people with autism, the implication for our economy’s future is alarming.

Enter: Tom Iland, who at 13 was diagnosed with autism. Affectionately called The Calculator by his junior high schoolmates, Tom discovered at a very young age that, despite certain shortcomings, he was a wiz with numbers. Among his many mathematical talents, he can – in no more than a second – provide the sum of a word by adding its letters’ corresponding numerical values:

If A=1, B=2…Z=26, then autism = 83.

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Documentation: A Key Ingredient for Audit Success

Pound cakeYou’re trying out a pound cake recipe, but when you pull your pan out of the oven, you realize the cake didn’t rise. Instead of being fluffy and moist, it’s flat and dense. You double-check the recipe and stop short when you see baking powder on the ingredient list. You left that out because you didn’t have any and you figured it wouldn’t matter. You did everything else perfectly, so how could leaving out this one ingredient have such a big impact?

You may never have thought there could be a similarity between baking and auditing, but in both cases, leaving out one key ingredient can ruin the outcome. You’d be amazed how often it happens.

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Why Playing Games is a Brilliant Move

GamesWhether you’re rolling the dice to move past “Go” or speeding around curves like Mario, numerous studies show playing games of almost any kind stimulates thinking. Board games, chess, word games, games of strategy and the like are obvious choices. But did you know shooting hoops, playing interactive video games, golf, even playing charades in your living room, are all brilliance-builders too? Name the game and chances are it helps you think better and think faster, but note that different types of games enhance different parts of your intellect.

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Advice From Your Peers – 6 Tips to Acclimate to A New Role

Joining a new teamThere’s no doubt that starting a new role, whether in the same company or a new one, can be stressful. Between learning the culture of the organization and remembering all the new names, your first few weeks can be overwhelming. Half the battle is learning the inner workings of your new teammates – so how do you manage this?

To find out how CPAs deal with this life change, we put out a call for responses on AICPA social media channels; here’s the advice we heard.

David Pope, CPA, CGMA

“Learn the personalities and the culture of the team. Watch for cues about the motivational drivers for each member and develop an understanding of what you can expect from each. This will help you to integrate quickly and to know when to push and when to back away.”

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Getting Started with Innovation

InnovationInnovation and Accounting may sound like an odd pairing. But they don’t have to be!

Innovation is often used to describe the act of doing something new, creative and risky. This definition - especially the part about risk - may not align with traditional accounting ideals. But consider this, if you are not the disruptor, you will likely get disrupted. Innovation may seem risky, but ignoring it could prove fatal.  Given the magnitude and speed of change throughout the world, innovation is a necessity for your career, your clients and the profession. Done well, embracing innovation can help reduce risk as you cast a keen eye on what lies ahead rather than hold on to the past. Let’s explore three simple steps (plus a bonus step) to get started with innovation.

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6 Ways to Up Your Networking Game

Networking blog post (002)I used to be afraid of networking. As an avowed introvert with a moderate case of shyness, too often I would pass up opportunities to meet and connect with people. Much later in life I would discover that networking was an acquired skill and was well within my reach. I let go of my fear of rejection when I realized that networking was not about me, but was about building relationships and finding ways to be helpful to others. I can do that. You can too.

Networking, at its essence, is the simple but profound activity of creating, freshening and strengthening an array of mutually beneficial professional relationships with a diverse cross-section of people. Here are a few tips that will help you up your game, especially when meeting people at events or in large groups.

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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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