159 posts categorized "Guest Blogger" Feed

How to Convince Leadership to Undergo an SSAE 16 Examination

SSAE-16Certainly, the primary reason service organizations undergo a Statement on Standards for Attestation Engagements 16 examination is to respond to customer demands. Although waiting until the customer asks may make good business sense, proactively undergoing the examination can offer the service organization many benefits. Yet even with the inherent benefits, the SSAE 16 examination can be difficult to sell to executive management. Here are the top five reasons those managers should choose to undergo an SSAE 16 examination. 

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Stop the Mad Dash, Create Your Future

CPA-career-developmentCPAs are no strangers to life-long learning. In fact, life-long learning is as fundamental of a core competency for CPAs as integrity, independence and objectivity.

This country has hundreds of thousands of CPAs who every day commit themselves to professional development and improving their professional competency. However, when a CPE reporting deadline approaches, you will find CPAs everywhere scrambling to fulfill their compliance requirements.

Your professional development is important, so make it a priority and put an end to the mad dash. Start by asking yourself the following questions to begin creating a plan.

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Spotlight on Health Care Reform with AICPA Insights Live

Health-careEveryone seems to have an opinion on the Affordable Care Act. But what about the facts and what about the impact for your clients?

Ted J. Sarenski, CPA/PFS, CFP, AEP, provided straightforward answers to these questions during the second webcast session of AICPA Insights Live on Oct. 18. His presentation, titled “What CPAs Need to Know to Advise Clients on Healthcare,” covered the latest developments regarding health care reform, including requirements, deadlines, the individual mandate, penalties and federal subsidies, as well as his predictions and advice for clients in 2014.

To start, what’s changed with the Affordable Care Act? Sarenski recapped the new ground rules for health insurance with a quick rundown:

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CPAs Wanted for Lead Role in Sustainability

SustainabilityIf there’s one realism that has emerged since it first appeared on the leadership front more than 30 years ago, it’s that sustainability is neither a passing fad nor a fleeting priority. Time has proven that a focus on sustainability initiatives, linked to business strategy, as a top organization priority, can deliver measureable bottom-line and reputational returns far beyond initial expectations.

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To Match or Not to Match? 1099-K Notices Bewilder Taxpayers

Confused-womanDo you have tax clients who run small businesses or decided to sell their household items on eBay this past year? Or perhaps you are a CPA who accepts credit card payments from your clients? If so, you may have already received a notice from the IRS or should be aware of the latest updates on the IRS push for information matching with Form 1099-Ks (Payment Card and Third Party Network Transactions). Some AICPA members have received 1099-K mismatch notices assessing thousands of dollars in penalties.  

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Integrating Retirement Planning with Your CPA Practice

Social-securityWhat do the 77 million baby boomers have in common over the next 15 years? They are all going to face retirement in one form or another. Never before in U.S. history has such a large generation transitioned to retirement with so many years still ahead of them. Are they ready? Can they afford it?  What does it look like? Who will answer these and other questions they have? Who else but the CPA has the financial, economic and analytical education, and ability coupled with the highest ethical standards of placing objectivity and integrity at the forefront of all advice. CPAs have a huge opportunity to expand their practices into the area of retirement planning as the natural progression from guiding their clients through the accumulation years.

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Am I “Preparing” Financial Statements?

Financial-statements-wordartI meet many members throughout the year at various AICPA conferences and their input is truly valuable. We discuss the issues they are encountering in practice and guidance that would help them. Over the past few years, a common question concerned whether members have “prepared” financial statements for their clients.

Each of their scenarios has provided their own unique set of circumstances and it has been insightful talking through how they make judgments about whether the accountant should follow the reporting requirements for compilation engagements. The AICPA has provided a great deal of guidance on the topic but, with the increased use of cloud applications, the questions just keep coming up and becoming even more complex.

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It’s Extension Time! Checklist for Reporting Foreign Assets

Tax-checklistAs we come to an end of the filing season, keep in mind important foreign information reporting requirements that may affect your client’s income tax return.  On this year’s Form 1040, did you check “yes” that the client has a foreign bank account on Schedule B and list the location of the account? 

How about completing Form 8938 Statement of Specified Foreign Financial Assets?   The purpose of Form 8938 is to report an interest in specified foreign financial assets, which include, but are not limited to:  foreign bank accounts, brokerage accounts, interest in foreign entities and any “foreign financial instrument or contract that has an issuer or counterparty that is not a U.S. person.” Once your client meets certain reporting requirement thresholds, Form 8938 is required.

Here are some last-minute reminders to help you through the Oct. 15 tax deadline: 

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Have You Hugged Your CPA Today?

Young-CPAsMore than sixty-five million Americans are serving as volunteer caregivers for vulnerable loved ones – and as baby-boomers step into senior status, that number will rise. Caregiving for someone with a disability, lengthy illness or aging issues is challenging enough, but adding money concerns to the mix can create a massive strain on individuals and families. Caregivers find themselves thrust into roles they are poorly suited to maintain. Juggling medical, relationship and job-related matters can often pale in the face of the financial pressures of caring for someone who is chronically ill or disabled. 

The key is sustainability – and in order to manage the massive bills, extra costs and nuances of the tax code, I have found that I require the help of a trained professional, specifically a CPA.

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AICPA Forensic Accounting Credentials Are Attorneys’ Top Choices

Expert-witnessWhere do attorneys turn when they need to make a compelling case on a critical financial issue? That question can be answered by considering what kind of expert witness they employ. In a recent compilation of accounting expert witnesses who have been mentioned in court opinions or decisions in 2013, the vast majority were CPAs. (Disclaimer: The article was by Ashish Arun with Expert Witness Profiler. AICPA FVS Section Members receive a discount to Expert Witness Profiler, but we were not involved in this study.) Among the 189 accounting experts cited, 166 were CPAs. For those with specialized credentials on top of the CPA, the AICPA’s credentials were clearly preferred over those of other credentialing organizations. The Certified in Financial Forensics credential took the number two spot at 58 experts and the Accredited in Business Valuation credential took number three with 54 testifying experts. The CVA at 31, CFE at 30 and the ASA at 18 were well behind the AICPA credentials on this list.

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The Tax Realities of “Breaking Bad”

Breaking-bad-taxThe final episode of “Breaking Bad” is here. But I don’t want to discuss what happens in the finale or even this season. Instead, I want to focus on the tax implications of what Walter White and his alter ego Heisenberg have done. (SPOILER ALERT: There are no spoilers contained herein from any episodes airing in 2013, but there may be some if you haven’t caught up to the last season).

Tennessee's "crack tax" (struck down as unconstitutional not long after its creation) notwithstanding, the Internal Revenue Service has a history of charging those involved in illegal activities with tax evasion. Al Capone and Soviet Spy Aldrich Ames both were charged with tax evasion after they did not report the money made from their illegal activities. After all, the IRS instructs taxpayers to report any illegal activity income on line 21 of the Form 1040, where other income is reported. So in reality, someone committing crimes and earning revenue for this activity could avoid tax evasion charges by reporting it on line 21. But then of course you've just admitted to conducting illegal activities. While technically confidential between you and the IRS, the common belief is that the IRS will find a way to alert the authorities, either through disclosure in an audit or interdepartmental alliance. So, most people don't report their illegal activities, don't incur tax and go on tax-free until they get caught.

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Audit Data Gathering in Ten Minutes or Less

Whether you were the auditor or the management in charge of an audit and even if you’ve tried to forget it, I’m sure you remember your first audit. Do you remember how long it took? A couple of hours? A few weeks? What was it like for the audit team to get all the data together? A picnic, right? I could be wrong, but I’m going to guess that’s not likely.

Imagine a world where it only takes 10 minutes to gather company data. Imagine putting standards and processes in place that could provide you with the data you need today. You may think that’s impossible, but we’ve seen it done. Whether it is for internal analysis, external audits, or company oversight, it is becoming increasingly important to obtain data on demand.  With the help of the AICPA’s new, non-authoritative audit data standards, this is now possible.

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Assurance Services 101: New Tool for Providers and Users of Business Info

Business-meetingImagine this scenario: On the hunt for additional funds to jumpstart their business, a potential client comes to you. The CEO has just visited the local bank, but the bank manager will not agree to lend the needed funds without assurance on the business’ ability to generate profits. Now, the potential client is at your doorstep asking if you can provide assurance.  

“Perfect,” you say. Your firm provides assurance services that instill confidence and assist clients in making insightful decisions. Here’s the thing: your prospect has no background on assurance services. Where do you begin to explain?

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Vets Need Our Help: Now

Military-savingsThroughout history, our returning veterans have always faced challenges. However, recent reports have troubled me, showing that returning vets are facing more challenges than ever before.

According to a March 2013 study published by the Institutes of Medicine at the request of Congress, almost half of the 2.2 million troops deployed in Iraq and Afghanistan report difficulties on their return home.

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Accounting for the Lean Transformation

Manufacturing-wasteWaste costs money. Companies lose money on wasted time, wasted effort and wasted material to the tune of millions of dollars per year.

Conversely, removing waste saves money.  And when it comes to keeping things on the right side of the ledger, it's far better to keep track of money saved than money wasted.

The Lean approach, especially as refined by long practice at Toyota and other manufacturers, systematically removes waste, frees up company resources, and increases a company's chance at long-term success. Money saved through Lean transformations can go toward capturing more market share, for instance, by improving existing products or developing new products for new markets.

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3 Crucial Areas of Focus for Benchmarking

Maybe it’s an inherent competitiveness or just the pursuit of improvement, but it is commonplace for people to seek out benchmarks that they can use to assess their relative position or performance. It interests people to know how they compare to their peers. Benchmarks have a place in business, too, and can be an invaluable instrument to help business owners succeed.

Trusted-business-adviser

Equipped with an intimate knowledge of their clients’ finances, accountants are uniquely positioned to help their business clients think strategically to achieve success. With assistance from accurate and relevant data, accountants can help their business clients by comparing their financial performance to the performance of their peers. This ability to effectively benchmark is one way to transition from a quarterly tax specialist to a trusted business adviser.

Assuming that accountants are able to get their hands on reliable industry data, it becomes necessary to isolate a few specific metrics that will be especially useful across industries. While different industries and companies measure success in their own unique ways, a few metrics are almost universally indicative of a company’s financial health.

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If You or Your Clients are the Victim of Tax-Related Identity Theft

ID-fraudTax-related identity theft is a multi-billion dollar business that may be affecting you and your clients. Identity theft is the fastest growing crime in the world. It can affect your credit and tax records and your earnings record—a criminal record may even be established in your name. No one is immune.

Identity theft that affects your credit record has been around for decades; however in the past 10 years, tax-related identity theft has seen an explosive rise. The statistics are staggering. A report from the Treasury Inspector General for Tax Administration indicated that during the 2011 filing season, 1.5 million fraudulent returns went undetected and refunds totaling $5.2 billion were issued to the wrong person. 

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The Use of Intentionally Defective Grantor Trusts Post ATRA

In view of the changes brought about by the American Taxpayer Relief Act of 2012, estate planning has taken on a new complexion. With the portability rules and the applicable estate tax exclusion of $5,250,000 (indexed for inflation) being made permanent, ATRA has not taken away the need for estate planning; rather, it has changed what CPAs now need to plan for. Most CPAs working in the area of estate planning are shifting focus to asset protection, enhanced generational transfers and portability. 

AICPA President and CEO Barry Melancon, CPA, CGMA, stated this video to AICPA members that the primary purpose of estate planning is to financially protect and provide for loved ones. This same sentiment was echoed by Jean-Luc Bourdon in a previous blog post, Tax Planning Complexity Can Provide Growth for Your Firm. The message is clear: CPAs need to shift from estate tax planning to estate planning.

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Audit Data Standards: Revolutionizing Business Information

Audit-data-standardsOne of the challenges that management and auditors face is obtaining accurate data in a usable format following a repeatable process. That’s why the AICPA’s Assurance Services Executive Committee’s Emerging Assurance Technologies Task Force seeks to increase audit efficiency by developing the following voluntary, uniform audit data standards: base standard, general ledger standard and accounts receivable subledger standard.

These non-authoritative audit data standards present a new way of optimizing efficiency and effectiveness in reporting and assurance by facilitating automation and enhancements in the analysis of business information. In addition, audit data standards identify the key information needed for audits and provide a common framework covering:

  • data file definitions and technical specifications;
  • data field definitions and technical specifications; and
  • supplemental questions and data validation routines to help users better understand the data and assess its completeness and integrity.

Who will benefit from their use? A number of stakeholders, from internal and external auditors to software vendors. Let’s discuss.

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Inside the Business Valuation School: Pathway to the ABV

Accredited-in-business-valuation-anniversaryIn July, 2013, I left public accounting and joined the AICPA as program manager for the Forensic and Valuation Services Section. As part of my introduction, the AICPA sent me back to school. I attended the National Business Valuation School from July 15 to 19 in New York. BV School is an intense five-day training program focused on theories, applications, best practices and controversies in business valuations.

For some of my 24 classmates, BV School was their first exposure to valuation education. For others like me, the course was a great comprehensive refresher on the complete Accredited in Business Valuation Body of Knowledge. Some were already practicing in the valuation area and took the course in preparation for the ABV exam. The Roadmap to the ABV Credential recommends BV School as one of several choices for valuation-related education.

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What Does the Future of Accounting Education Hold?

During the three decades of my academic career, many industries have been transformed by the phenomenal changes in technology and globalization. But in my industry– higher education – there have been mainly beneficial effects of technology and globalization, with no major disruption to the basics of academic life. The way I spent my first days as a rookie Assistant Professor at the University of Southern California is remarkably similar to the life I am leading now as a chaired full professor at the University of Arkansas’ Walton College of Business.

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Tax Planning Complexity Can Provide Growth for Your Firm

The increased complexity of individual taxation and the overall personal finance environment is leading many CPA firms to explore ways to address areas where tax planning overlaps with retirement planning, estate planning and other personal finance areas.  This approach delivers great value, creates new firm revenues and increases competitiveness.

As Barry Melancon, AICPA president and CEO recently noted in a video to AICPA members, the need for tax planning that integrates personal finance concerns is critical. Clients have many questions about how the American Taxpayer Relief Act of 2012 and the new Medicare surtax affect them, in particular. The retirement savings crisis is getting national media attention and threatens the financial security of Americans.  Post-ATRA, the estate tax may affect only a small number of clients, lessening the focus on planning to reduce taxes and refocusing estate planning on its primary purpose, which is protecting  loved ones through asset protection, asset titling, beneficiary designations and more.

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Another Lesson on Unreasonably Low Compensation

Payroll-taxPayroll tax collection continues to vex the Internal Revenue Service despite several court cases that have resulted in rulings favorable for the IRS regarding unreasonably low compensation. A recent high profile case was David E. Watson, P.C. v. United States on which the Eighth Circuit ruled in 2012. Watson was an indirect partner in a CPA firm, practicing through an S corporation that paid him $24,000 of salary per year and between $175,000 and $203,000 in profit distributions. The court adjusted his compensation to $93,000.

It isn’t hard to see why shareholders of S corporations attempt to justify wage levels below what the IRS considers “reasonable compensation” (assuming the understated compensation is below the FICA wage base). Both the S corporation and employee save the 7.65% FICA and Medicare taxes on the wages not reported.

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Opportunities for Innovation: It's Time to Change the Way We Think

Auditors, and others in the accounting profession, think logically. We have to in order to do our jobs. However, as the world changes, so must we – and logic only gets you so far. Aside from logical thinking and reasoning, we also must be creative. It's that creativity, which can often be found in your existing staff, that can provide us with opportunities for innovation.

Take a look around and you'll see that the world is simply moving away from, and beyond, how CPAs have traditionally practiced. While CPAs still give an opinion on a set of historical financial statements, real-time technology is here to stay. People want information now, not later – and there's a big difference in providing one versus the other. That's where our profession, and the future of auditing, must change. It means taking a closer look at technology, standards – and people. I recently filmed a video for the AICPA addressing these issues

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3 Questions You Should Consider for Your Succession Plan

Succession-planThe AICPA’s Private Company Practice Section recently released results of its 2013 CPA Firm Top Issues Survey and succession planning is among the top 5 concerns for firms with 11 or more professionals. It’s no surprise to me. In fact, I’m elated firms have succession on their minds. My only surprise is that succession planning wasn’t cited as a top concern for all survey respondents.

Succession planning is an issue many CPAs have been avoiding for the last decade or so. Like many of our clients who may be uncomfortable discussing planning finances for a family that will continue to exist without them, we CPAs are in a tad bit of denial about our own mortality. We may not even realize the opportunity we have to establish a legacy and mentor others as we plan for the future of our firms.

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Cash and Investment Disclosures in Governmental Audits

City-hallAre you ready for your 2013 local government audits?  Cash and investments are a very important area of disclosure in the financial statements for state and local governments, especially for governments that report pension plans as fiduciary funds in their financial statements. Make sure you’re up to date on these cash and investment disclosure requirements. It’s a good idea that your clients are also well aware of these provisions as they prepare the disclosures, as they can help you to provide adequate audit evidence to support the material accuracies of the disclosures being made in the footnotes relative to cash and investments.

Here are a few important reminders about disclosures in this area: 

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In Times of Catastrophe and Routine: The Need for Forensic Accountants

Business-continuityIn the aftermath of May’s devastating tornado, the residents of Oklahoma are undoubtedly facing challenges to recovery on multiple fronts… physical, emotional, financial and beyond.

The first responders did their part to begin the recovery process as soon as the storms cleared. But in the weeks and months ahead, CPAs will be providing assistance in their own way, by expertly answering questions and providing essential guidance in the recovery process.

Simply put, we can play a part in reestablishing people’s livelihoods and restoring communities that have suffered great loss.

For example, local business owners dealing with business interruption losses may need answers regarding the optimal time to contact their insurers, how to document the claims or something as fundamental as what their policy will and will not cover.

 

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Placing the Public’s Interest at the Forefront

HandshakeThe CPA profession has a long-standing history of serving the public interest, with more than 125 years of providing services in the highest professional manner. As individual clients’ financial worlds become increasingly complex, many CPAs have responded by expanding their service offerings beyond traditional tax compliance and planning to include investment, estate, retirement and risk management advice.

The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in the wake of the economic crisis of 2008, required that the Securities and Exchange Commission conduct a study on the effectiveness of the existing standards of care for financial professionals. The study covers CPAs who provide investment advice and personal financial planning services to their individual clients (download the free CPA’s Guide to Investment Advisory Business Models to determine if you have a registration requirement). Currently, broker-dealers and investment advisers operate under different standards of care.

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Will The Research Tax Credit Be Extended Permanently?

Stop-go-switchThe research tax credit has been around since 1981.  The credit is generally available if you incur research and development expenditures for qualified research that are technology based and intended for the development of new or improved processes, products, techniques, or formulas (among other requirements).

Do you know how many times the credit has expired and been extended since it was enacted back in 1981? The answer is at least eight expirations and 15 extensions.  The credit expired as recently as the end of 2012 but was extended through 2013 with the American Taxpayer Relief Act of 2012.  If you answered that question correctly, I applaud you for keeping up with the changes.  I don’t know about you, but I am getting tired of looking up to see when the credit will be expired.

If you are tired of never-ending expirations and extensions, I have some good news to report. 

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Paving the Way to Career Happiness and Success

Painting-roadwayFor many years, I had what I now call an "accidental career."  I didn't put much thought into why I was moving up the ladder, I just climbed because that's what I was supposed to do.  It’s no surprise that I soon found myself unchallenged and feeling like I wasn't making a difference.

When I stopped to evaluate, I realized that the power was mine to make a change. It was time to find out what would happen if I put my whole heart and soul into something. So I quit my job and started a business. I spent my life savings trying to figure it out. Ultimately I learned more about business, life and myself than I ever could have on the safe road.

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Health Care Considerations for Employee Benefit Plans

Health-careThe debate continues about how the Patient Protection and Affordable Care Act will impact health care costs in the overall economy. While CFOs may not be interested in the macroeconomics of it all, they will want to keep their own company’s health insurance costs down. It will not be easy. 

Signed into law in 2010 and upheld by the Supreme Court in 2012, the Patient Protection and Affordable Care Act will profoundly affect individuals, employers, health care providers and insurance companies.  In addition to the many new tax rules to offset the cost of these reforms, the law also contains many changes that employers are going to need to consider and how it may affect employee benefit plan operations, internal controls, financial reporting and more.

Here are a few things that may have a larger impact on plans:

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3 Ways the New COSO Framework May Affect Your Business

Over the past 20 years, change seems to come at the speed of light and has had a significant impact on the way businesses operate. Markets have become global, just about every process can now be outsourced and technology has become integrated into the DNA of every business. If anything, changes in rules, regulations and standards have accelerated. Businesses must now satisfy the high expectations of regulators and other stakeholders regarding governance oversight, risk management and the detection and prevention of fraud. All of this change means that stronger internal control practices must be developed to help to grow, as well as protect, the organization.

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Time is Running Out: Verify Your Clients’ FBAR Obligations Now

HourglassJune 30 will be here very soon – making sure your clients are compliant with the requirement to file a Report of Foreign Bank and Financial Accounts by that date is critical as civil penalties for failure to file are huge – they range from $10,000 up to $100,000 or 50% of the total foreign account balance. Criminal penalties include $250,000 or five years of imprisonment or both.   

If your client is a U.S. resident and has a total of $10,000 or more in all foreign bank accounts combined or has signature authority over a foreign account, he or she must file FBAR Form TD F 90-22.1 annually.  The FBAR is a report and is not to be filed with the income tax return.  What makes the FBAR different from many other forms is that it must be received, not postmarked, by June 30 and it is filed with the U.S. Department of Treasury, not the IRS.  Also, there are no extensions. 

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Sustainability Reporting: Don’t Miss this Opportunity

Business-inventoryWhether boosting the bottom line, preserving the planet or a combination of the two, sustainability has officially crossed the threshold of America’s businesses, with many of the greatest skeptics even now realizing that it’s here to stay. In fact, according to the Governance & Accountability Institute’s report: 2012 Corporate Environmental, Social and Governance / Sustainability / Responsibility Reporting – Does It Matter? Analysis of S&P 500 Companies’ ESG Reporting Trends and Capital Markets Response, “53 percent of S&P 500 Index companies are currently disclosing ESG information, compared to about 19-20 percent of the S&P 500 reporting in 2010.”

Sustainability’s momentum is being fueled by a large, influential and growing majority of supporters: business leaders. They recognize that sustainability-minded organizations are more committed to management checks and balances, informed decision-making and community goodwill. What follows is an organization’s reputation for greater stability, less risk and a more secure market value. Sustainability-minded organizations are among the top choices when retailers and other businesses create vendor relationships, select investment candidates and make purchase decisions.

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Small Businesses and Health Care Reform – What Now?

Health-care-reformThe Patient Protection and Affordable Care Act (health care reform) seeks to change the way health insurance premiums are established, just as the Act Providing Access to Affordable, Quality, Accountable Health Care did in Massachusetts. As CPAs’ small business clients begin to implement the requirements of health care reform, CPAs need to understand two significant ways in which their small business clients, and their own small practices, may be affected.

The Small Group Insurance Market and Increasing Premiums

The first big change that health care reform brings is the prospect of “merging” (formally or via rating rules) the small group insurance market with the individual insurance market. The individual market typically has the highest costs of all the health insurance markets due to the actuarial risk of a single covered life and the time and expense of selling single policies. The small group market, historically 50 employees or less, but in the case of health care reform, 100 employees or less (mandated to expand the risk pool base of small businesses who might also absorb the cost of the merged individual market), is significantly less risky and thus has lower premiums. As has been the case in Massachusetts, if the formal merger of the two markets’ risk pools takes place in your state, it may cause small business premiums to increase dramatically. If you or your client presently have more than 50 employees and are covered in your state’s existing large group market risk pool, premiums could rise once the small group level increase to 100 employees becomes effective in 2014.

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Celebrate Memorial Day: Serve a Veteran

Memorial-dayNow that you’re back to work after this year’s Memorial Day celebrations, you and your colleagues may be looking for additional ways to say thanks to the men and women who protect the U.S. and its interests. Good news! There is an exciting opportunity for CPAs to use your talents to do just that.

It is all part of the Veteran Fast Launch Initiative, a combined effort of the AICPA and SCORE. The program connects veterans who want to start and grow their own businesses with CPAs from across the country. The aim is to help veterans, their spouses and families succeed as small business owners. Practitioner volunteers provide up to five hours of time at no charge to veterans.

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10 Skills for Mapping Your Journey to Partnership

Partner-handshakeDo you have firm partnership in your sights? If so, good for you! Although there is no “one size fits all” approach for a senior manager to become partner, there are steps CPAs can take to strengthen their skills, expand their knowledge and develop personal characteristics that can bring them closer to achieving their goal. Beyond working hard to stand out, here are some things we did that helped us better position ourselves to become partners at our firm, Lattimore Black Morgan & Cain, PC. You may want to consider these tips as you set out on the road to partnership.

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A Smooth Transition to the Cloud

Digital-cpaA small business gains access to sophisticated technology it could not previously afford. A mid-size company reassigns its IT staff to strategic projects that encompass far more than day-to-day tech operations. A large organization is able to tap into enhanced business intelligence and put it to work more quickly. 

These are some of the success stories associated with cloud computing. Cloud technology is quickly becoming an integral part of everyday business life, smoothing the way to valuable business process outsourcing opportunities and making it easier to identify and use critical business intelligence. In fact, over 65% of IT security professionals reported using some type of cloud technology for mission-critical applications and data, according to the AccelOpps Cloud Security Survey 2013. And CPAs are integrally involved in many organizations’ shift to the cloud.

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How Unlimited Vacation Works in My CPA Firm

Exotic_vacationBefore starting my own CPA firm, I worked at a large, national accounting firm and found I was never actually able to use up my three weeks of annual vacation time. However, when I went to work for a local boutique CPA firm, I only got ten annual vacation days. There was also no policy for telecommuting and no flexible schedules or incentives for being more efficient than expected, such as being rewarded with more paid time off. “Face time” in the office ruled. Initially, I was okay with limited vacation, but a couple of years in, I realized that I would really value more flexibility as part of my compensation package.

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Virtual Work Teams Are Coming

Virtual-teamAs the economy continues to recover, the impending retirement of our nation’s Baby Boomers will create a labor shortage far greater than any we have experienced in the U.S. Professionals with the right skills will have their choice of employment opportunities, which will drive demand – and salaries – up. CPA firms that provide truly motivational and engaging environments will win the recruiting and retention race.

That’s why learning to manage the challenges and possibilities of virtual work teams is a must for today’s current and emerging partners. The need for increased workplace flexibility generates passionate conversations by CPA firm leaders and team members. Employees are challenged to keep a steady balance between their work and their personal lives as demands in each continuously change. Some aren’t willing to make the firm their top priority.

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5 Things CPAs Need to Know about Integrated Reporting

Integrated-reporting-word-cloudLast week, my blog post discussed that Integrated Reporting <IR> represents an important shift in corporate reporting in which CPAs can play a key role providing consulting services, implementation or report preparation. In today’s blog, I’m drilling down into some of the key concepts of the recently released Consultation Draft of the International <IR> Framework that are important for CPAs to understand.

Five features of the Draft Framework are:

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Evolution of Corporate Reporting: Integrated Reporting

Integrated-reporting-word-cloudCorporate reporting in the U.S. and around the world has often developed as disparate strands of reporting.  Stakeholders have grown to seek more and more information in a number of different reporting vehicles, but do they really seek the details or are they trying to drive better corporate practice?

Integrated Reporting <IR> represents an evolution of corporate reporting that focuses attention on how an organization creates value in the short, medium and long term.  An integrated report, a key output of Integrated Reporting, is a concise report primarily intended for investors of financial capital, although other stakeholders who have an interest in the organization’s ability to create value will also benefit from such communications. 

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How Would an Unlimited Vacation Policy Work in Your CPA Firm?

Tropical-island-getaway-vacation

After this crazy, compressed tax season, you and your employees are certainly ready and deserve a vacation. But do you give your employees enough vacation time? How much paid vacation time is enough? Can you imagine that the answer might someday be “as much as they want?” Some companies are shifting toward an unlimited vacation policy because they believe it can enhance morale and minimize stress. Although only 1% of organizations offer unlimited paid time off, according to a Society for Human Resource Management survey, it is surprisingly most often used at smaller organizations. There are a number of advantages to offering unlimited vacation time in your CPA firm. They include:

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Why I’m a Financial Literacy Volunteer

VolunteerTeaching financial literacy continues to be one of the most gratifying activities of my career.  Although it requires a portion of my already limited time, the rewards (tangible and intangible) are tremendous. Following are the reasons I think public service via financial education is important to us as individual CPAs as well as to our profession.

The Need is Great

Financial education is not taught in our public schools and our economic/financial environment continues to become increasingly complex. Many people do not have the basic information they need to make financial decisions and they don’t know whom to trust. There are large segments of our population who need the professional, objective advice that CPAs can give, but who cannot afford the fees: teenagers and college students, the elderly and middle/low income adults, to name a few.  

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8 Tax Reform Questions Congress Needs to Raise (and Answer)

Number-8It looks like comprehensive tax reform is gaining some sense of realism. Consider these important actions so far this year:

  • President Obama mentioned it in his January 2013 State of the Union address: "Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit.  We can get this done."
  • The House Ways and Means Committee formed 11 working groups to address specific areas for reform.
  • On March 21, the Senate Finance Committee began issuing Tax Reform Option Papers -the first one covers simplification for families and businesses.
  • Tax reform is mentioned in both the House and Senate FY2014 Budget Resolutions produced by the budget committees.

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6 Things Not-For-Profits Need to Know about Non-Cash Contributions

Not-for-profits continue to encounter unique measurement challenges for gifts in kind. There are a variety of approaches available for not-for-profits to value GIK, which can result in large disparities between handlings by different not-for-profits and questions about the application of generally accepted accounting practices to GIK. Other issues such as identifying the applicable principle markets and the effect of nominal fees on GIK require not-for-profits to scrutinize their GIK practices to ensure GAAP is being properly applied.

Not-for-profits must measure all non-cash contributions such as items auctioned off for charity; excess or obsolete goods given to charity to help fulfill its mission; free print or web advertising space and even radio advertisement air time. However, measuring these intangible items can be challenging, as not-for-profits who receive such gifts would not otherwise purchase or sell them and not-for-profit administrators simply may not know the fair market value of these gifts or have access to valuation information.

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The Cloud: Just One SOC Opportunity

Service-organization-control-markIt's no secret that an organization's confidential information is vulnerable in today's world of electronic storage. If you have any doubt, just ask The New York Times or The Wall Street Journal – both of which recently reported having their computer systems hacked.

Organizations transferring storage and/or the processing of their data to cloud-based systems are faced with the added complexities of how to best maintain ownership and control data while continuing to assure customers they have controls in place to keep data secure. How can organizations provide their stakeholders with comfort related to this transferred information?

Service Organization Control ReportsSM represent the intersection of cloud computing and the trusted advisor role of the CPA. In 2011, the AICPA introduced three SOC reporting options: SOC 1SM, SOC 2SM and SOC 3SM reports, creating a great opportunity for CPAs to assert their knowledge and capabilities related to examining and reporting on controls at service organizations, including cloud service providers.

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Using Technology to Automate Finance and Help You Make Better Business Decisions

Business process outsourcing
Everyone is being asked to do more with less in the current economy; CFOs are no different. Many are looking for ways to enhance and streamline the finance function, from transaction processing to budgeting and reporting. Automation through leveraging state of the art technology is a key component to assist in this endeavor. With advancements in business applications and cloud-based technology like Intacct, Bill.com and others, virtual work environments, mobility and instant data is the new norm.

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9 Tips for Invigorating Weary Brains, Bodies and Balance Sheets

BreakfastWhew! After months of long hours, you and your colleagues are likely finishing up the first filing deadlines of the year. Nice going!

Even with April 15 clearly in sight, there’s still work to be done by many practitioners. Clients are counting on your smarts like never before to help them make sense of their financial situation in this new environment and find ways to improve it. Let’s face it, you are running on fumes, yet you are far from the finish line and a well-earned break.

The big question you may be asking now is, “How can I get an energy boost so I’ll have the stamina to deliver on the promises I have made to my clients?”   

It’s no secret that when human engines are operating at full throttle they need more than adrenaline to perform their best. Sure, we know that we should eat right, exercise and be good to our bodies and minds if we want to sustain our ability to work at a record pace. The trick is finding the proper balance to yield the needed strength when our days are jam packed with meetings and client commitments.

Here are nine best practices to reinvigorate you so you can be your best. Even better, they are not complicated, expensive or unfamiliar. 

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Innovation through Sustainability: It’s as Simple as Soda Pop

Sustainable-innovationCall it what you will: pop, soda, Coke, Pepsi, Cheerwine, bubbly juice… countless Americans have an insatiable thirst for carbonated drinks, but we all know the costs of consuming a lot of soda over time can add up and it’s often bad for us. Plus, the discarded cans and bottles take a heavy toll on the environment, piling up in landfills across the world.

Enter SodaStream, an appliance you can use to make carbonated drinks straight from the faucet. SodaStream International Ltd., the product’s manufacturer, has a completely sustainable business model featuring reusable bottles that can last one year or more, rechargeable CO2 canisters and any number of flavored syrups to liven up your drink. The result: landfills are spared more than 1,000 plastic bottles per consumer every year, customers reuse system components, and this savvy company gains major profits and a well-earned reputation for being innovative and environmentally conscious. Over the past few years the company has also achieved remarkable growth, increasing revenue by 51% and net income by nearly 60% from 2011 to 2012. What CFO wouldn’t be impressed with that?

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