Why Social Media Participation Can Be Good for CPAs

CPAs may justifiably be wary of sharing personal and professional information on social media sites such as Facebook, Twitter and LinkedIn.  After all, many CPAs spend their days verifying facts in the form of numbers – and adding “notes” in financial statements when there is any question of the veracity of those facts.  How then could these same CPAs be comfortable tweeting about the newest changes in the LIFO accounting procedures or writing a blog post on whether book authors should deduct their home office on their income tax returns?

Welcome to the brand new world of online relationship building, where being willing to “put yourself out there” on social media can help you connect with current and prospective clients.

The Watchful CPA: Risks of Theft and Fraud

Audit claims alleging failure to detect theft and fraud are not new.  However, their frequency and severity are increasing dramatically.  Between 2008 and 2010, the percentage of audit claims alleging failure to detect fraud and theft more than doubled, from 30 percent to nearly two-thirds of all audit claims.  Equally alarming, many claims arising from tax, bookkeeping, compilation and review engagements now include similar allegations.  By 2010, among all claims alleging failure to detect theft and fraud, 24 percent emanated from tax services, 17 percent from compilation and review services, 11 percent from accounting and other services, and 4 percent from investment advisory services. The remaining claims involved audits.

February is Black History Month

Each year during February, children across the U.S. are taught that there was a time, in our not so distant past, when whole populations of Americans were excluded from enjoying basic human rights because of the color of their skin. Last year, three CPA Legends, Nathan Garrett, Sr., Aurora Rubin and Jim White were asked to speak about their life experiences as CPAs and the challenges, triumphs and changes that have occurred in accounting. What is their common experience? They were among very few CPAs of color at the time they entered the profession.

Nathan Garrett

Top 10 Tax Resources (for the 2012 Tax Season)

Finding time to do anything during tax season is tough. Emails pile up, as does almost everything else, right? So save a little time this year by using some of the resources compiled by AICPA staff. And if you like free, you’ll like this list as most of the resources listed below will not cost you a dime. 

Financial Planning Conference Attracted Diverse Crowd (Part 3)

The third and final part of this series covering the 2012 AICPA Advanced PFP Conference. Our on the ground bloggers:

Jean-Luc Bourdon, CPA/PFS, Principal, BrightPath Wealth Planning LLC. Jean-Luc is a regular contributor to CPA Insider and currently serves on the AICPA’s PFS Credential Committee.

Theodore Sarenski, CPA/PFS, President/CEO, Blue Ocean Strategic Capital, LLC. Ted is an appointed member of the AICPA Virtual Grassroots Panel, Social Security Task Force and Planner Magazine Editorial Advisory Board. Ted serves as Chair of the AICPA Elder Planning Task Force and is a liaison to the AICPA PFP Executive Committee.

From the beginning, several other attendees posted notable take-aways on Twitter. Take a look at what experts, including Michael Kitces, Mitch Freeman, Bill Winterberg and Carolyn McClanahan, had to say at the bottom of this post.

Financial Planning Conference Provides Wealth of Knowledge (Part 2)

Part 2 covering day two of the 2012 AICPA Advanced PFP Conference. Our on the ground bloggers:

Jean-Luc Bourdon, CPA/PFS, Principal, BrightPath Wealth Planning LLC. Jean-Luc is a regular contributor to CPA Insider and currently serves on the AICPA’s PFS Credential Committee.

Theodore Sarenski, CPA/PFS, President/CEO, Blue Ocean Strategic Capital, LLC. Ted is an appointed member of the AICPA Virtual Grassroots Panel, Social Security Task Force and Planner Magazine Editorial Advisory Board. Ted serves as Chair of the AICPA Elder Planning Task Force and is a liaison to the AICPA PFP Executive Committee.

From the beginning, several other attendees posted notable take-aways on Twitter. Take a look at what experts, including Michael Kitces, Mitch Freeman, Bill Winterberg and Carolyn McClanahan, had to say at the bottom of this post.

Financial Planning Conference Offers Path to New Career (Part 1)

The 2012 AICPA Advanced Personal Financial Planning Conference concluded Wednesday at the Aria Resort in Las Vegas. The conference, held annually, brings together experts from four diverse financial planning areas: Investment Management, Wealth Management, Practice Management and Retirement/Elder Planning. This year we asked two attendees to share their thoughts and experiences from the financial planning conference. See what they had to say.

Our on the ground bloggers:

Jean-Luc Bourdon, CPA/PFS, Principal, BrightPath Wealth Planning LLC. Jean-Luc is a regular contributor to CPA Insider and currently serves on the AICPA’s PFS Credential Committee.

Theodore Sarenski, CPA/PFS, President/CEO, Blue Ocean Strategic Capital, LLC. Ted is an appointed member of the AICPA Virtual Grassroots Panel, Social Security Task Force and Planner Magazine Editorial Advisory Board. Ted serves as Chair of the AICPA Elder Planning Task Force and is a liaison to the AICPA PFP Executive Committee.

Internal Control - Integrated Framework - 20 Years Later

Almost 20 years ago, the Committee of Sponsoring Organizations of the Treadway Commission (COSO), of which the AICPA is a member, produced the landmark Internal Control – Integrated Framework. With this published framework, COSO, an organization providing thought leadership and guidance on internal control, enterprise risk management and fraud deterrence, established a common internal control model against which companies and organizations may develop and assess their control systems. It became the world’s most widely used internal control framework.

But a lot has happened since 1992, such as the Internet! With advances in technology and business operations, the time was right for the framework to be updated so it could remain relevant and useful. In November 2010, COSO announced such a project. An online survey in January 2011 gleaned input from a broad audience. Last month COSO released the proposed updated Internal Control – Integrated Framework Exposure Draft to obtain input from the users of the framework and the general public. As a member of COSO, the AICPA has a representative on the COSO Board and a representative on the project’s Advisory Council.

What’s the Future of IFRS in the U.S.?

A couple of weeks ago at the AICPA National Conference on Current SEC and PCAOB Developments in Washington, D.C., James Kroeker, chief accountant at the Securities and Exchange Commission, provided an update on the status of the SEC’s decision on whether and how to incorporate International Financial Reporting Standards into the U.S. financial reporting system for public companies. If you were hoping for the SEC to provide a definitive timeline, then you’re not going to be happy. Kroeker stated that the SEC is still at least a few months away from a decision. Previously the SEC had stated that a decision could be expected in 2011. However, SEC staff are still writing a final report on IFRS that will help guide the SEC’s decision and, presumably, a timetable for incorporation of IFRS in the U.S.

4 Reasons CFOs Should Care about Integrated Reporting

On Nov. 15, the AICPA organized a roundtable discussion for the International Integrated Reporting Committee at SAP’s headquarters in Palo Alto, Calif. I attended the meeting along with representatives from major investors, companies and other stakeholders. It allowed us the opportunity to discuss the business case for integrated reporting, and the challenges surrounding the acceptance of this critical reporting framework. Among those challenges is communicating the benefits of integrated reporting to businesses and their stakeholders, especially CFOs.

Why should you care about integrated reporting?

Going Beyond the Tax Organizer

While the client’s tax organizer is critical to preparing a client’s tax return, it can also be a doorway to building a long-term relationship with the client. Interpreting the client’s responses can lead to discussions on a wide variety of issues that the client may need help resolving in the future.  If you can position yourself as the quarterback of the family’s financial team, they will look to you again and again as they continually prepare for and resolve financial issues.

Technology is Now Part of the CPA Base

I recently had the privilege to serve on the CPA Horizons 2025 Advisory Panel.  As part of the panel we were asked to review and comment on the research conducted to update the CPA Vision Project, completed in the late 1990s, to position the CPA profession for success through 2025. One of the key findings was that technology is no longer a CPA Core Competency.  Your reaction may be like mine, “WHAT??!!?”  However, as I read on, it became very clear that technology is no longer a Core Competency (a differentiator) for CPAs.  Rather it is a part of our base--it is a tool that we must leverage as part of the way that we work on a day-to-day basis—and no longer something separate that was only the domain of a specialist. 

Where do CPA Exam Research Questions Come From?

So, how well do you know the Financial Accounting Standards Board Accounting Standards Codification? Can you recite it from beginning to end without missing a beat? Is committing the standards to memory even a reasonable or practical expectation? A similar question posed one of the primary challenges that led to the development of research questions on the U.S. CPA Exam.

In a periodic assessment of accounting practice known as the Practice Analysis (1999), the AICPA CPA Exam team found that accounting references were becoming increasingly lengthy and complex, and were also available in an electronic format. Essentially, in the real world, CPAs were only memorizing sections of the standards that they used on a daily basis and used an electronic search to find any additional information they required. At the time of the 1999 Practice Analysis, the CPA Exam was still in pencil and paper format, so testing the application of accounting references that reflected real-world accounting practice posed an obvious challenge for CPA Exam developers.

AICPA Unveiling Easy-to-Read Code of Professional Conduct

Three years ago the AICPA’s Professional Ethics Division embarked on a new project aimed at restructuring the AICPA’s Code of Professional Conduct into a logically structured, topical format. The concern was that the Code of Professional Conduct could at times be difficult to navigate as many provisions were scattered throughout and didn’t follow an intuitive order. The Ethics Codification Project, as it has been dubbed, also provides an opportunity to evaluate any guidance that lies outside the Code of Professional Conduct and determine whether to propose that some of it be made authoritative.

The Professional Ethics Division and Professional Ethics Executive Committee also continues to work on converging the AICPA’s Code of Professional Conduct with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants. A requirement to being a member of the International Federation of Accountants is that no member body should have standards that are less restrictive than the IESBA’s Code. As the Ethics Codification Project continues, the PEEC will consider those standards that need to be changed to meet the minimum IESBA standard. Convergence is not expected to lower standards, but rather where appropriate, make standards more robust or provide guidance where guidance is lacking.

Ultimately these projects will create a user-friendly and intuitively arranged Code of Professional Conduct. Additionally, we expect the codification will be available in a web-based platform, which further enhance the quality and ease of use to the Code of Professional Conduct, as well as allow users to browse by topic and perform searches on specific information.

This is a long-term project though, so don’t expect to see the updated Code of Professional Conduct immediately. In fact, we don’t expect to see an exposure draft until the Spring of 2012 with approval and issuance estimated one year later in the Spring of 2013. For the time-being, convergence changes are being exposed for comment and the latest version of the Code of Professional Conduct can always be found on AICPA.org.

Ellen Goria, CPA, Senior Manager - Professional Ethics Division, American Institute of CPAs. Ellen staffs various task forces that develop independence and behavioral guidance for exposure to membership. She also assists with interpreting the Institute’s Code of Professional Conduct by providing guidance to membership, state CPA societies and other interested parties on ethics and independence issues. In her role, Ellen also works closely with other AICPA teams to ensure publications accurately reflect the AICPA’s current ethical positions.

Reflections on the AICPA’s Leadership Academy

Last week, I had the pleasure of attending the AICPA’s Leadership Academy—as a member of its third class—in Durham, NC. I was among 33 participants under the age of 36. The Academy started off like many seminars do in this mobile age, with participants glued to our smartphones and somewhat disconnected from our surroundings. But that disconnection would be short-lived.

The mood transitioned quickly to one of collaboration and engagement as the instructors—Gretchen Pisano, president Sounding Board Ink, LLC, Tom Hood, CPA, executive director and CEO of the Maryland Association of CPAs and Jeannie Patton, AICPA vice president - students, academics & membership—began the Insight to Action process. We broke up into three groups to tackle three challenging real-life scenarios in business, non-profit and personal relationships. These tasks forced us to focus on the strengths of our characters, utilizing the i2A Strength Based Leadership program that we had been introduced to during our preconference workshops. The program coaches participants for leadership, teaching them self-awareness techniques, how to work from a source of natural strength and how to inspire their team to do the same.

Never a Dull Day for CPAs

CPAs often are seen as numbers magicians.

And we are. But we’re also detectives, counselors and guides. I work with CPAs in forensics and they see a bit of everything as they work with clients to uncover financial malfeasance, arbitrate divorces and much more. I received this story from a member just the other day:

So, funniest story that comes to mind is when I picked up two different divorce cases at roughly the same time in which I was the neutral arbitrator.  After several meetings in each of the cases I figured out that the wife in one of the cases was leaving her husband to start a relationship with the husband in the other case.  Long story short, I had to put my office on alert regarding scheduling so they did not end up in back-to-back meeting slots!

Stories like these really underscore the diversity of the CPA profession – and illustrate the immense opportunity available to CPAs. It’s one of the reasons we’re seeing rapid growth in our fraud and forensics section and why being a CPA is many things, but never boring.

What’s most rewarding to you about being a CPA?

Elaine Leggett, CPA/CFF, Technical Manager - Forensic and Valuation Services, American Institute of CPAs. Most of Elaine’s career has been spent in public accounting.  Prior to joining the AICPA, Elaine was the controller/firm administrator of a local CPA firm.  In addition, Elaine spent eight years at a large local firm, working with clients from a broad range of industries, including construction, nonprofits, insurance and healthcare, on tax, audit and consulting engagements.

The Savings Balancing Act

They say necessity is the mother of all invention. And if that’s true, there may be some bright spots in this dour economy of ours.

The U.S. Bureau of Labor Statistics offered insight last week into the amount of money households are spending. Last year, average expenditures dropped 2 percent, on the heels of a 2.8 percent decline in 2009. No surprise there. Consumers are in no mood to spend.

Dig into the numbers a bit deeper and you’ll see some interesting changes in how they’re spending. Expenditures on vehicle maintenance, for instance, rose 7 percent, while spending on vehicle finance charges dropped 14 percent. At the same time, public transportation expenses increased 3 percent. This could suggest, at least in part, that consumers are holding onto their current vehicles longer and exploring other, cheaper options for travel to offset higher fuel costs.

Both are smart moves from a personal financial perspective—especially if those behaviors stick.

But make no mistake, the continued overall decline in spending also highlights a real challenge. Consumers account for about two-thirds of economic activity. When they rein in spending, the ripple effects can be extensive, as evidenced by the current unemployment rate and other challenges we’re facing.  

Consumers need to save to protect their financial futures.  How do they balance that goal with our economy’s need for stimulation that spending brings? A recent Federal Reserve report (page 7) offered this statistic: Each one percentage-point increase in the savings rate is associated with a decrease in spending nationally of $100 billion. So what message should we be sending to consumers? In an economy with rising prices and declining spending, how do we help stimulate the economy while still encouraging saving? What advice do you give your clients and family?

Cheryl Gravis Reynolds, Director of Communications, Advertising and Brand Management, American Institute of CPAs. Cheryl oversees executive, member, international and state society communications as well as advertising and brand management and social media strategy. She also leads the CPA profession's award-winning financial literacy campaigns, 360 Degrees of Financial Literacy, and Feed the Pig, a public service advertising campaign with the Ad Council.  

New Score Release Timeline for the CPA Exam

Starting in the fourth quarter of 2011 the U.S. CPA Exam will begin releasing scores earlier and more predictably. Initially this may not seem very interesting; however, the change will mark a major shift in the U.S. CPA Exam experience and the strategies that prospective CPAs employ as they work toward passing the exam.

With the transition from a pencil and paper exam to the computerized format in 2004, came a shift in the strategies and expectation of CPA candidates. In particular, the ability to take one exam section at a time and nearly year-round scheduling opportunities has dramatically changed the way CPA candidates prepare and plan for the exam. After the transition to computer based testing, one of the most common requests received from CPA candidates is for faster score releases so they can start planning the next steps in their test taking process.

Remembering the Heroes of 9/11

Ten years – a decade in time – but with memories embedded so vividly in our minds, it is as if it could have been yesterday. Our thoughts are still with the 3,000 Americans who were killed, and the more than 6,000 who have died in ensuing military actions. Our country came together after September 11, with people of all colors and political beliefs flying American flags outside their doors. Candles lit our windows; yellow ribbons hung from our doors and mailboxes, and tears streamed from our saddened and disbelieving eyes.

Having a view of the Statue of Liberty and downtown Manhattan from my Jersey City apartment where I grew up, the skyline has always been a natural part of my life.

The skyline morphed over the years and after the early 1970s, the twin towers became the dominant focal point to the breathtaking view of downtown Manhattan.

We Heard You Loud and Clear on the Due Dates Issue

Every voice is important to us.  So when the AICPA heard from so many of you a few years ago about the problems associated with the late receipt of Schedules K-1, we mobilized to come up with a solution.

After considerable dialogue, the AICPA submitted a proposal to Congress in October 2010 suggesting that the due dates for Forms 1065, 1120, 1120S, 1041 (along with some others) be shuffled around a bit--with the understanding that change can be difficult.  We know how important and ingrained return due dates are to tax professionals. Because members’ practices are so diverse and varied, and most members tend to have general practices, our volunteer leadership wanted to make changes that benefited the tax filing system as a whole.  We all understand how challenging the filing season can be.