Most Passwords Are Easy to Guess. Do This Instead.

Password2You’re doing your passwords all wrong.

So says the developer of the guidelines most internet users have been following for 15 years, anyway. Passwords that L00K l!ke tHi$ are actually much more susceptible to hacking than most people realize, says Bill Burr, former manager of the National Institute of Standards and Technology (NIST) and author of the NIST’s 2003 recommendations for password management.

In an interview with The Wall Street Journal, Burr said that his previous advice to use numbers, symbols and randomized capitalization resulted in people creating passwords that are easy for computers to predict.

A more secure option is to use four random words, such as “that purple monkey dishwasher.” Such a phrase is actually much more complicated for computers to guess, The Wall Street Journal reports. (Cartoonist Randall Munroe explained the math in a comic six years ago.)

Some password advice remains relevant, however: avoid using birthdays or anniversaries, your kids’ names or your address, as all of this information is easy for hackers to locate. Additionally, use different passwords for each of your accounts and avoid storing them where they can be easily seen or stolen.

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4 Things You Need to Know About Gender Equality

Women in professionFor decades, women and men have been entering the accounting profession in equal numbers. As a result, you might reasonably assume that women are now at or near parity with men at the leadership level. However, that assumption would be wrong. Only 24% of CPA firm partners are women, according to AICPA statistics. Another recent study found that only 17% of audit partners are women. If these qualified professionals aren’t reaching the top levels, firms are clearly missing out on a lot of talent.

The AICPA Women’s Initiatives Executive Committee’s (WIEC) CPA Firm Gender Survey, first distributed in 2015, is designed to identify trends in women’s leadership over time. It informs practical solutions for firms that want to make the most of their talent and prevent the loss of leadership potential. The results provide a unique spotlight on trends related to diversity in leadership and suggest solutions on how best to address them. As we launch the second iteration of the survey this year, I’m reminded of a few of the many valuable insights that the last survey revealed, along with some of the questions firms might want to ask themselves in light of those findings. The lessons learned—and the value and perspective they can offer to CPA firms—underscore the benefits of participating in the survey. Outlined below are a few key takeaways from the inaugural CPA Firm Gender Survey.

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One Attestation Engagement that Can Save the Planet

SustainabilitySustainability assurance is a growing field for CPAs. While reporting on this topic remains voluntary, over 82% of the S&P 500 publish some type of sustainability report, up from 20% in 2011. Furthermore, 73% of portfolio managers and research analysts take sustainability matters into account when making investment decisions and 69% of them believe it is important that such information be subject to independent assurance.   

Sustainability reporting encompasses information about an organization’s environmental, social and governance performance and can range from a full sustainability report to a greenhouse gas statement to information about select sustainability topics. As companies look to increase the credibility and reliability of their reported sustainability information, they are engaging CPAs to provide assurance on this information.  

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Discounting Tax Services: Good or Very, Very Bad?

DiscountPeople love discounts, coupons and the perception of saving money, even when they actually aren’t. But there is another side to the discount, and that’s the product or service provider’s. When they discount their offering, they are losing money, right? Not always.

The Good

The discount is a common and time-honored marketing tactic. It can be a powerful tool. There are a few ways discounts are used to the benefit of the provider. A few of these include: loss leader, introduction/new business and reconciliation.

The loss leader is a simple concept: by heavily discounting an offering (sometimes to cost), you get clients in the door where they will hopefully purchase additional, non-discounted offerings or upgrade from the discounted offering to a superior one that is full price.

In product or service introductions, either the product or service is new, or the client is. The idea is that the discount is used to lure the client in, give them a taste of how good the offering is, and hopefully turn them into a regular customer who pays full price.

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FASB Addresses Accounting for Grants and Contracts

ContractsThe Financial Accounting Standards Board (FASB) recently issued an exposure draft, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, which is intended to address questions stemming from their revenue recognition standard (ASU No. 2014-09) regarding its implications on the grants and contracts of not-for-profit organizations. Specifically, do not-for-profit grants and contracts fit the definition of a contract with a customer, such that the new revenue standard would apply? Or are they more appropriately classified as contributions, which would exclude them from the scope of ASU 2014-09 and instead require the application of contribution guidance? More on that below.

The FASB exposure draft clarifies that the first decision to consider is whether the transaction is reciprocal (an exchange) or non-reciprocal (a contribution). That is, does the donor or grantor “receive commensurate value in return for the resources provided?” If so, then the asset transfer is an exchange transaction. It is important to note that societal benefit—even if it furthers the resource provider’s charitable mission—is not commensurate reciprocal value.

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Plan Smart: Banishing Time Wasters

“I cannot make my days longer so I strive to make them better.” –Henry David Thoreau

Time wastersTime is money

We’ve heard the proverb many times. But when it comes to balancing client needs along with all of the nuances of leadership in a practice, time often really IS money. How many times have you looked at the clock and realized the day was half over before you’d had a chance to accomplish even a fraction of what you’d initially planned? A 2014 study found that only 13% of advisers report feeling in complete control of their time. Alarmingly, an overwhelming number of professionals frequently experience time drains that inhibit their relationships with clients, the growth of their business, and their own personal and professional productivity. Thankfully, there are some very easy-to-implement solutions that most CPAs can put into practice today to combat the time wasters in their daily schedule.

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Key Facts about a New SAS on Exempt Offerings

SAS 133A municipal government issues a bond offering after the audit report date. Or a franchisor is getting ready to prepare its annual update to its franchise disclosure document. What are the auditor’s responsibilities in each case? Practitioners with governmental clients are probably familiar with long-standing guidelines to address involvement with municipal securities offerings, however a recently issued auditing standard expands those best practices into required guidance for all exempt offerings.  

What’s the Background?

The Auditing Standard Board’s Statement on Auditing Standards (SAS) No. 133, Auditor Involvement With Exempt Offering Documents, applies to exempt securities or franchise agreements when the auditor is involved. The Securities and Exchange Commission (SEC) oversees a significant regulatory framework for publicly traded offerings, setting rules on what types of information and documents must be filed and when, and on auditor involvement. Some offerings, such as municipal securities, franchise offerings, crowdfunding, and short-term commercial paper with a maturity of nine months or less, are exempt from SEC registration rules. Exhibit A in the new SAS includes a list of exempt offerings.

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3 Factors Driving Single Audit Quality [Infographic]

Single audits are a highly specialized type of compliance audit performed on states, local governments and not-for-profit organizations that expend $750,000 or more of federal assistance in a single year. Given that both the public and federal agencies rely on single audits to confirm that these organizations are managing federal funds appropriately, it’s important that firms perform high-quality single audits.

That’s why the AICPA Peer Review Program recently conducted a study to determine which factors made a difference in single audit quality. Take a look at the infographic below to learn more about the three quality factors the AICPA identified and the steps firms can take to perform high-quality single audits. 

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Nonprofit Challenges: Accounting for Gifts-in-Kind

VolunteersMany not-for-profits receive gifts-in-kind—noncash donations—to supplement their programming needs. When used properly, gifts-in-kind can greatly extend the cash resources of not-for-profits, as they often consist of goods and services the organization would otherwise have to purchase.

Not-for-profits that receive contributions of in-kind goods and services should report them in compliance with the Financial Accounting Standards Board’s (FASB) fair value measurement standard (ASC Topic 820).

Easy enough, right?

Not necessarily.

This blog post covers significant challenges that not-for-profits face when applying the accounting standards and related guidance for gifts-in-kind.

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6 Reasons to Specialize in Employee Benefit Plan Audits

Employee benefit plansSince Torrillo & Associates, LLC, (of which I am the managing member) opened in 2004, our local 15-person firm has been dedicated almost entirely to employee benefit plan (EBP) audits. We began doing these audits early in our careers, and when we were ready to go out on our own and realized what a great specialty they would be for a small firm, we became even more passionate about them. Specialization has proven to be an excellent choice for our firm because we’ve been able to distinguish ourselves in a complex area. If you’re wondering if this niche is right for you, take a look at some of the benefits we’ve enjoyed.

Our time and energy are focused. Before beginning our practice, we had worked on EBP audits at a Big Four firm, so we were aware that this was a highly specialized field. However, by working in this particular niche, we were able to invest all of our energy into becoming experts, focusing our training needs and giving us an advantage in the marketplace. We spend a lot of energy keeping up with new developments in our niche. Our firm’s quality control director and I volunteer our knowledge for AICPA and state CPA society technical projects and committees, and we send our staff to local and national EBP conferences. When taking on work, we stick to what we know and reach out to other experts when necessary, including the AICPA, the Department of Labor (DOL) or our network of ERISA and fiduciary advisors and investment advisors.

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How to Build Your Back-to-School Budget

Back to SchoolEven though the beach is still calling, it’s almost time for students to think about the days when they’ll be loading up their backpacks, charging those computers and setting alarms for earlier than 10 a.m. – because the new school year will be here before you can say ‘fall semester.’

If that sound stressful to you, you’re not alone. On top of all the stresses associated with learning new material, meeting new people and challenging yourself intellectually, there is also a significant financial cost associated with the start of a new academic year. Regardless of whether you’re a parent thinking about your children’s back-to-school budget, a college student living away from home, or a full-time worker attending night school, the challenges are similar.

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What Unlikely Pairings May Teach Us About Innovation

Innovation 2The last few years have been inundated with major acquisitions, each creating buzz from within and beyond the business world. To name a few, in June of 2016, Microsoft acquired LinkedIn (which had already acquired online learning site Lynda.com the previous year). Fast forward to last month when Walmart announced it would buy Bonobos – a mostly-online men’s upscale clothing retailer – and Amazon announced it was set to buy Whole Foods Market.

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Scenarios in Quarterly Estimated Tax Payments

Estimated tax paymentsWhen people learn you’re a CPA, one of the first things they assume is that you “do taxes.” Often, they have a “quick tax question.” If you are a tax practitioner, you know a quick tax question is an oxymoron. It’s nice, however, to be able to translate some of our CPA lingo into easily understood information, both for clients and friends. One issue that stands out to me is: when and why does it makes sense to consider making quarterly estimated tax payments? 

Individual estimated tax payments – a primer

The government likes to get their money on a regular schedule. For most people, that means withholding from a paycheck. But if that’s not your situation, the IRS has estimated tax penalties in place that preclude you from waiting until April 15 every year to pay the balance due. In order not to be subject to those penalties, during the year you must pay at least 100 percent (or 110 percent depending on your level of income) of your previous year’s tax liability OR at least 90 percent of your current year’s tax liability. And unless there is a special circumstance where your income fluctuates during the year, those payments are expected to be paid in quarterly installments. 

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3 Meh Ways to Promote Your Firm—and 1 Great One

CPAPoweredWe all get used to doing things a certain way. It’s easy. It’s comfortable. But over time, we lose sight of whether what we’re doing makes sense. Is it effective? Is it worthwhile? Does it take more time and energy than it returns? It’s worthwhile to take a hard look at how you market your services and ask tough questions.

Every day, CPA firms across the country rely on ideas for promoting their services that might not present the best value. Call them old habits or if-it-ain’t-broke-don’t-fix-it syndrome, but the result is the same: results that are “meh.” What more could you do to promote the very real value you bring to clients on a daily basis? Let’s start with what you might be doing now that may not be effective.

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Is Watching Shark Week Deadlier than Actual Sharks?

SharkAs a child, I loved watching movies about summer vacations. To someone from a low-income household whose summer adventures were circumscribed to the occasional elementary school-run day camp, the idea of vacationing was exotic – regardless of whether the family went to Walley World (National Lampoon’s Summer Vacation) or to a charming Massachusetts beach town like Amity (JAWS). Even the latter, where an insatiable Great White swallows poor beachgoers whole, seemed preferable to languishing away hours reading comics in my sweltering bedroom, ignoring my mom’s relentless nagging to ‘go play outside.’

 Although many cast JAWS aside as simply a horror movie, to me, it’s always been much more. It’s a classic-if-not-quintessential man vs. beast odyssey, not much unlike those found in Greek mythology. But whether you classify the film as horror or adventure, JAWS undeniably plays to certain fears. Galeophobia (the fear of sharks) is akin to a fear of the dark in that it taps into an anxiety of being unable to see those things which may harm us. In terms of sharks, however, this fear is largely misguided.

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Rethink Your Not-for-Profit’s Chart of Accounts

Client meetingPart I

By now, most professionals who serve not-for-profit organizations in governance or financial accounting roles have gained a basic understanding of the impending changes to the not-for-profit financial reporting model. This two-part series focuses on implementation and offers actionable recommendations to help not-for-profits prepare for the impacts of the new guidance. 

Look at the New Standard through the Lens of Your Chart of Accounts

The Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, will impact several line items in the financial statements of not-for-profit organizations. To accurately and efficiently reflect those changes, it’s important that not-for-profits create a plan to adjust their chart of accounts during 2017 or 2018.

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Winning the Value War

Value propositionAre you looking to expand your practice beyond financial statements and tax returns? If so, providing more personal financial planning advice and support, which will help clients plan for their financial future, may be the key to successful expansion. But how do you express the value you’ll provide to your clients? Here are some value propositions that CPAs can use to both describe and demonstrate value of those services.

Step One: Recognize the Difficulty of Selling an Intangible Value

In the world of investment advice, defining a value proposition is relatively straightforward because the return on investment (ROI) can be easily measured. And tax savings from effective tax strategies is similarly concrete.

However, when it comes to financial planning, defining a value proposition becomes far more difficult because it involves selling an intangible service and the results are hard to measure.

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Myths about Personal Financial Planning Services

MythsThere is a good chance you have visited a physician for a routine check-up. At that appointment, your doctor asked many questions – inquiring about your diet, exercise, stress, and health history – and ran diagnostic tests to assess your overall health. Your physician may not have solved any problems at that appointment, but you undoubtedly valued and were willing to pay for an objective professional to assess your health status.

Why is it, then, that many CPAs doubt the value of offering similar diagnostic and planning services to assist clients in identifying potential problems and improving their overall financial health? Broadening your services by asking the right questions, understanding your clients’ financial situation and delivering advice (or making referrals to trusted specialists) is not only valuable to your clients – but also to your practice.

Before you tune out by citing common objections, allow me the opportunity to debunk some of the common myths about personal financial planning (PFP) services.

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Not-for-Profit Gifts: Thanks or No Thanks?

Shutterstock_304427672Not-for-profit organizations are always thankful for the generosity of their donors. Sometimes, however, they must consider whether a proposed gift should be accepted. A gift of $100,000 in cash is easy to immediately direct toward the not-for-profit’s mission. On the other hand, a donation of real estate worth $100,000 may come with additional expenses and effort to sell the property before the proceeds are available to support the organization’s mission. Having a formal gift acceptance policy can help define when an organization should, or should not, accept a proposed gift.

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3 Reasons to Embrace Cloud-Based Technology

CloudNew technologies offer ambitious professionals the chance to advance their careers, and their firms, to new heights. They can be especially beneficial to women and, indeed, any CPAs who want to set themselves apart professionally and preserve a healthy balance between their work and personal lives. In my own experience, I’ve used my cloud technology knowledge to expand my opportunities, accelerate my progress, boost my worth to clients and reinforce my relationships with them. How does the cloud enhance opportunities for CPAs?  

  1. It can expand practice development options.

Cloud-based technology makes it possible to store and access data online where it can be accessed by authorized users from any computer. It’s the tool behind client portals that allows clients and firms to update and collaborate on data they share access to. You can use it to distinguish yourself and your firm.  

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Reconciling Tax Reform and Reconciliation

Congress is not an ATM

-Robert Byrd, Former US Senator

Tax reformThe year is halfway through, but it doesn’t feel like we’re halfway to tax reform. Don’t get me wrong – tax reform might still happen. But as one Hill staffer said to me, “Health care is sucking the oxygen out of Washington.”

I’ve talked about the connections between ACA repeal-and-replace and tax reform several times on the video updates found on the Tax Reform Resource Center. In a nutshell, repeal of the ACA-related taxes, such as the Net Investment Income Tax (NIIT), before tax reform is undertaken, would make the tax reform baseline score less expensive.

The work on tax reform continues nonetheless, and the AICPA has testified at both a House Small Business Committee hearing and a Senate Small Business and Entrepreneurship Committee hearing. We’ve also supported the INVEST Act of 2017 (S. 1144). This tax reform legislation, introduced by Senator John Thune (R-SD), would simplify certain tax rules for small- and medium-sized businesses and their owners.

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Qualified Charitable Distributions Reduce Tax Bills

RMDCPAs are the frontline in mitigating the impacts of Required Minimum Distributions (RMDs)

CPAs have the opportunity to be proactive in helping their clients take advantage of the tax break for charitable IRA rollovers, technically known as QCDs (qualified charitable distributions). After my IRA update session at the AICPA ENGAGE conference, this topic generated the most questions of everything I discussed. It’s an easy provision to follow, and it’s even easier to know exactly which clients qualify.

The topic of QCDs is an important one for CPAs, because it’s an opportunity to provide real value to clients who are unaware of the provision. One of the most heavily emphasized messages from the ENGAGE conference was how to offer competitive services in the future. The answer always came down to relationships based on knowledge resulting in higher value services. QCDs fit perfectly into this.

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Small Firms Make a Difference in Unexpected Ways

Small firmI recently heard a moving story about an acquaintance’s father who passed away unexpectedly. Married to his childhood sweetheart for more than 60 years, he was a dedicated father and husband. He had been the manager of his family’s accounts. Upon his death, his widow and family had to set aside their grief to grapple with urgent financial issues, including funeral expenses and insurance matters. Fortunately, a trusted advisor was able to help. The family’s CPA, a small firm practitioner who had known the family for years, was well acquainted with their finances, and immediately came to their aid, offering his technical expertise. The CPA restored order to the family’s accounts and eased their worries. They had peace of mind knowing their CPA was prepared to protect their interests during and after a highly emotional and stressful time.      

Stories like this one unfold every day in CPA firms across America. Whether they’re advising startups on growth opportunities or helping individuals handle life changes, small firm CPAs have a profound impact on their clients, supporting them as they strive for their goals, build for the future or deal with crises as they arise.

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Helping College Graduates Reach Financial Independence

Financial independence“The secret of getting ahead is getting started.” –Mark Twain

Ironically, the knowledge college students gain while studying for their careers is only one aspect of the education they’ll need to succeed in securing a healthy financial future for themselves. Learning how best to manage their finances and make wise decisions requires both individual effort and solid expert advice. That is where CPAs can serve as educators to help their clients – the parents – share tools with their recent college graduates to help them achieve financial success.

Getting started can seem overwhelming, but having an accurate idea of how much it costs a recent graduate to live monthly or annually is an essential first step. Suggesting clients’ children use simple money-tracking apps such as the one available at mint.com, where individuals can examine every aspect of their financial life in one place, can be helpful. After entering some basic information about their income and expenses, users can get a quick overview of their overall financial health.

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Summer by the Numbers (With a Soundtrack)

Ever wonder how many hot dogs your fellow Americans eat on the Fourth of July? We've got answers.

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5 Steps to Building Your Personal Brand Online

Some brands are almost universally recognizable. With just a glance at their logo, you know precisely the level of service or the quality of product you are going to get.

BrandsWouldn’t it be great if your own personal brand could communicate the same trust and consistency? While top companies have huge teams (and usually more than a few agencies) devoted to the positioning and reputation of their brands, they all follow the same steps--steps you can easily implement into your personal brand today.

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8 Tips to Determine Your Not-for-Profit’s Year-End

Year-end planningNot-for-profits have a luxury that most other individuals and businesses do not. They’re allowed to select their fiscal year-ends for IRS purposes. Partnerships, sole proprietorships, S corporations and other legal structures, with limited exceptions, may not. These groups generally are required to use calendar year-ends for tax filings. Read on to find out what a not-for-profit should consider when choosing a year-end date.

How does a not-for-profit choose its year-end?

By default, many not-for-profits are organized with a calendar year-end, but not-for-profits should assess if this is the best choice. A thoughtfully chosen year-end may produce more meaningful financial statements, ease reporting requirements and even save the organization money. Before deciding on a year-end, organizations should consider the following factors:

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ICYMI: Protect Clients from Petya Cyberattack

RansomwareJust as people are starting to recover from last month’s devastating WannaCry ransomware attack, Petya, another malware worm, is shutting down networks across the globe. No one is immune, international businesses and governments alike have been hit by this new attack. Unlike WannaCry, which spread via the internet, Petya spreads through computer networks and shuts down entire hard drives.

It is imperative that you not only take proper precautions yourself, but also help your clients fortify their defenses against cyberattacks. You can learn more about how to do so with these recent AICPA resources:

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Where Will You be Financially in 40 Years?

Fin Lit gameWhat sounds more appealing to you – reading a bunch of boring facts online or playing a game to learn the same exact thing? You’d probably choose the latter. In fact, research shows a majority of millennials see clear benefits from playing digital games. Two in three (67 percent) say that games are important in helping them to learn how to create winning strategies and 7 out of 10 (70 percent) feel it aids them in learning how to solve problems. The proof is in the pudding, as they say – and that’s where gamification and personal finances come into play (literally!).

Today, the AICPA and the Ad Council launched a free digital game, Yesterday’s Tomorrow.’ The game is a new resource from Feed the Pig to help millennials build savings skills, a product of the idea Scott Garner submitted for the Feed the Pig Game Design Challenge. The challenge invited people to submit ideas for digital games to help educate Feed the Pig’s target audience. More than 70 ideas were submitted, and his concept was chosen to help educate millennials through gamification.

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Effect of Spending Habits on Retirement Planning

RetireesThe traditional approach to retirement assumes that retirees will maintain their pre-retirement standard of living as they transition into retirement, and then sustain that lifestyle throughout retirement. But a growing base of research that analyzes the actual spending habits of retirees, reveals a different story.

In reality, retirees tend to experience a slow but steady decline in real spending throughout retirement. Spending decreases slowly in the early years of retirement, more rapidly in the middle years, and then slows again in the final years, in a path that looks like a “retirement spending smile.” Even the uptick of health care expenses in a retiree’s later years are generally not enough to offset all the other spending decreases that typically occur in retirement. That’s important, because it means your clients may not need as much money in retirement as they think.

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100 Years of CPA Exam as Licensure Requirement

Adding machineA lot has changed over the last 100 years with the evolution of the CPA profession. Old fashioned calculators gave rise to Microsoft Excel. Stacks of financial statements have morphed into data in the Cloud. And many CPAs have expanded beyond auditing or tax services through the growth of specializations such as IT assurance, financial planning and business valuation.

Despite all the change, one notable constant has remained – the Uniform CPA Examination’s alignment with professional practice and the work of newly licensed CPAs. This alignment has continuously ensured that those earning licensure have demonstrated the requisite knowledge and skills vital to protecting the public interest.

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Summer Jobs: More Than Money in Your Pocket

Scooping ice cream

School’s out and many high schoolers and college students are taking summer jobs. Seasonal work can provide extra spending money for many teens or much needed funds for school expenses. But summer jobs aren’t just about earning a paycheck and learning how to manage the money you’ve made. These jobs provide valuable work experience and help youth develop professional skills and discover their talents. It’s an opportunity to take responsibility, learn time management skills and figure out how to get along with co-workers. Summer jobs also provide future employment references, mentorship and can even help teens succeed in school, according to Stanford researcher Jacob Leos Urbel.

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6 Money-Saving Tips You Can’t Afford to Miss

Money saving tipsThose fun, light-hearted GEICO commercials that ask if you are tired of paying too much for car insurance hone in on the idea of wasting your money –– paying too much for something or not getting enough.

As a CPA who is passionate about making my hard-earned money work for me, it’s important to take time to critically analyze what my cash is doing. Busy lives often lend themselves to costly complacency in one’s personal finances. Basically, we want bill paying done and our retirement planning intact with as minimal effort as possible.

At least once per year, I do a serious deep-cleaning scrub on my family’s finances. I look at what we’re paying and why, and I see where we need to do better. This “scrub” saves us thousands of dollars and I suggest each of you take a few hours each year to review your finances critically. Don’t let your money run itself; it needs you to keep it on track.

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New Liquidity Disclosures for Not-for Profits: Are You Ready?

NFP Liquidity DisclosuresUnder current financial reporting standards, not-for-profits are not required to illuminate clearly restrictions that affect the availability of liquid resources in their financial statements. But this is all about to change with the Financial Accounting Standards Board’s (FASB) new financial reporting standard (Accounting Standards Update (ASU) 2016-14), effective for fiscal years beginning after December 15, 2017.

In this update, FASB clarifies that the nature of an asset isn’t the only quality that affects its availability. Specifically, liquid resources are quickly converted to cash and available to fund general expenditures within one year following the balance sheet date. Internal (board-designated) and external (donor-imposed) restrictions could mean certain sums of cash and cash equivalents may not be used for general expenditures. If a board designates an amount of cash to be set aside for a building renovation, for example, it cannot be used to buy office supplies.

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How Robots Can Help You Thrive

RobotTechnology is creating opportunities for the accounting profession, but the human factor is still key– that was the message at IdeaAcct, a session at the AICPA Engage Conference highlighting thought leadership and innovation in the profession.

Practical & Immediate Opportunities for CPAs in Artificial Intelligence - Dan Giffiths, CPA, CGMA

Because accounting is highly structured, it lends itself nicely to machine learning. Therefore, many people think that accounting and tax services are likely to be automated. Software already exists that can populate tax-ready financial documents just from an individual’s bank login information, and such services are available for as little as $100 a month. However, clients are willing to pay far more for advisory services drawn from that information. The value, Griffiths says, lies in the relationships and the advice that CPAs can provide. To take advantage of the opportunities, CPAs need to become friends with their tech colleagues. Good friends.

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How to Prepare for Your Organization’s Single Audit

AuditIt’s time for your single audit: Is your organization prepared? If you are a recipient of federal funds, to maintain your organization’s funding you must comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known as the Uniform Guidance. Your single audit provides the federal government with assurance of your compliance, and being well prepared for the audit can help the process be more efficient. In this blog post, several CPAs who are either with organizations subject to single audits or who perform these audits themselves reveal valuable best practices that can minimize your worries and set you on the road to success.

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Beyond Bad Jokes: What We Learned from Our Dads

Pop culture would have us believe dads are all lawn obsessed, bad joke telling, tacky sweater wearing, voicemail leaving technological disasters. (Not mine, of course. My dad’s sweaters are perfectly acceptable, but he prefers to rock navy blue crew neck sweatshirts that have been aged to perfection.) But beneath their quirks (and I’ve yet to meet a dad without a quirk or 12) dads are often dishing out great advice or leading by example. In honor of Father’s Day, my colleagues and I share what we’ve learned from our dads:

SamanthaSamantha Delgado, Manager – Communications, PR & Corporate Responsibility:

My dad raised me to be independent and hard-working, always saying that if I want something, to go out and get it myself because “no one else is going to do it for you.” Most importantly, he instilled in me the importance of family, and being there for each other through thick and thin. Happy Father’s Day!  

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3 Trust Ideas for Reducing Estate Taxes

Bob Keebler spoke at the AICPA ENGAGE conference on “The Best Estate Planning Ideas Today.” Included in his detailed presentation were numerous points of interest beyond trusts. The following is a small selection from his 50-minute talk.

Because of the high limit on unified credit, many clients believe that estate planning isn’t for them. The truth, however, is much more complicated. Depending on the client’s state of residence, their positions in real estate or partnerships that might survive them and many other considerations, estate loss can be considerable. Your clients shouldn’t have to pay more than necessary in taxes on their estate, and as their trusted adviser, it’s your job to guarantee that the family’s wishes for their wealth are honored to the fullest extent possible.

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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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5 Technologies Transforming CPA Practices

Shutterstock_150531497One message keeps coming up at the AICPA ENGAGE Conference: technology is changing the profession, and CPAs have countless opportunities to incorporate it into their practice. Across conference sessions, conversations keep coming back to the ways practitioners can benefit from deploying to the cloud, embracing social media, providing cybersecurity-related services, using mobile devices and understanding big data. Here’s how: 

1) The Cloud 

In a recent Facebook Live session, conference presenter Jim Bourke discussed the many ways the cloud can improve a CPA’s practice. It allows staff from around the country to work together to serve clients. It houses data without the burden of purchasing dedicated servers and the infrastructure and personnel to maintain them. It gives CPAs access to client information anytime and anywhere. And it keeps that information secure. “Data is more secure on the cloud than it is sitting in your own office,” Bourke said. 

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Learning and Professional Development Go Virtual

An Update on the Future of Learning from AICPA ENGAGE

ENGAGE VR2017 is expected to be the year of virtual reality (VR), augmented reality (AR), artificial intelligence (AI) and digital assistants, according to Newsweek. Analysts at Gartner also included these technologies in their 10 Strategic Technology Trends for 2017.  It’s likely you are engaging with many of them already. Perhaps you have an Alexa device on your kitchen counter or you’ve asked Siri a question on your iPhone. If you’ve used Uber or Lift or clicked on a personalized Amazon recommendation, you’ve taken advantage of AI. But have you thought about how these emerging technologies will impact your learning and professional development?

The exhibit hall at AICPA ENGAGE has a plethora of tech demos including AR and VR. I stopped by to see what the AICPA Learning Design and Development team has been working on and got an opportunity to try their virtual reality and augmented reality experiences. This was my first time trying these immersive technologies, and I was eager to put on the VR headset to see what all the buzz was about.

Virtual reality (VR) gained popularity in gaming and is steadily moving into educational settings as the VR headwear becomes more affordable. My middle school-aged daughter has used Google Cardboard in her classroom, and VR is beginning to gain ground in professional development as well. The use of this technology engages multiple senses, which can help a learner retain new knowledge in a way that a text simply can’t. It makes it possible to interact with and manipulate content. VR also mitigates the distractions found in a traditional classroom and forces a student to focus. It is perfect for visual learners.

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3 Tax Technologies You Shouldn’t Ignore

Cloud technologyOMG CLOUD. Cloud, cloud, cloud. You’ve heard it. Repeatedly. By now you probably even know what it means. But running a successful tax practice is about more than acknowledging the technology du jour. It’s about knowing which technologies make the most sense for you, and using them to their fullest potential. But no matter your firm’s size, market or specialty, here are three tax technologies you shouldn’t ignore.

Cloud-Based Servers/Software as a Service

An IT department is a luxury many small- and medium-sized firms can’t afford. Even in larger firms, the demands of day-to-day management of client systems can overtax an IT department to the point where managing servers is a time-draining hassle, not to mention expense.

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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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