FATCA: Move Over FFIs, Here Come the NFFEs

Most people would agree that the Foreign Account Tax Compliance Act and foreign financial institutions are like peanut butter and jelly.  Whether or not you like the combination, they simply go together. 

Their pairing has been reinforced by the frequent publicity garnered by FFIs and the expanded withholding obligations FATCA has imposed on them.  But CPAs beware!  Lurking backstage is another set of entities affected by the rules of FATCA that you need to keep in mind.

4 Things to Know About Performing and Reporting on SOC Engagements

So, have you started doing Service Organization Control engagements at your firm yet? You’ll recall in my last blog post that jumping into this niche area is a great way to engage existing clients and new clients in an emerging market.

The AICPA has been fielding a number of questions regarding performing and reporting on SOC 1^SM, SOC 2 ^SM and SOC 3 ^SM engagements. Here are four of the key queries and their answers to help you and your firm move forward in starting a SOC practice:

Does Your Organization Invest in its Employees’ Training and Skills Development?

Organizations around the globe face extraordinary challenges when navigating through the current global economy. To thrive in the long-term, organizations must constantly innovate, evolve and transform.

One of the most critical factors that determines an organization's fate in this environment is the quality of its human capital and the way it manages its talent pipeline.

A recent report from the AICPA and CIMA showed that while most companies understand the importance of human capital, they do not appear to have the right systems, processes and information in place to manage talent effectively. Think about your organization for a minute. Does it invest in training and the development of talent and skills? Or does it view training as a compliance tool?

In the News: AICPA Financial Literacy Survey Featured on the Today Show

Yesterday, Al Roker and Jean Chatzky of the Today Show discussed the issue of kids and allowance, citing the results of AICPA’s recent survey with Harris Interactive on the subject.

3 Myths of Succession Planning

Sometimes we CPAs are blind to our own advice. We spend hours every day working with clients, steering them toward financial prosperity, helping them prepare for retirement and ensuring their businesses thrive well into the future. What are we doing for own practices? Not always enough.

Although succession planning is a proven strategy for achieving long-term firm goals, the 2012 PCPS Succession Survey reveals that only 46 percent of multi-owner firms have a written, approved succession plan. In addition, six percent of sole proprietors have a practice continuation agreement however, that’s only a first step toward developing a full succession plan.

Dispelling the following three common myths may help further grow succession planning’s role in practice management. It may also help CPAs reap a succession plan’s full benefits—client and staff retention, a more comfortable retirement and the peace of mind that comes from being prepared for the future.

4 Steps to Better Risk Assessments

In my role at the AICPA, I’ve always been a big advocate of helping firms perform smarter audits by deepening their understanding of the client. I want to help firms understand the distinct advantage they can gain by better understanding the concept of significant risks and gathering useful risk information through performing a more thoughtful and efficient risk assessment. A new whitepaper I have just published discusses the steps you can take in greater detail.

What is a ‘Digital CPA’?

There’s no question technology is having a huge impact on how CPAs and their clients conduct business, but the adoption rate isn’t uniform within the profession. Some practitioners are taking a wait-and-see approach. Others are sticking their toes in the water. And still another group is fully embracing technology and all that it promises—integrating innovation throughout their firm’s processes and workflows and becoming digitally present in today’s online world.

At CPA2Biz, we use the term ‘Digital CPA’ to describe the latter category. The Digital CPA harnesses the power of the cloud, the broad use of mobile devices and a carefully calibrated online presence to attract clients and build new service lines. It’s inevitable the entire profession will arrive at this same place one day – and that day isn’t far off.

Value Pricing: Aligning Your Interests with Those of Your Clients

The days of providing services first and billing later are dwindling. As this blog post by Jim Boomer, CIO of Boomer Consulting, Inc. indicates, an increasing number of accounting firms are moving into the digital age and transitioning their practices from billing in arrears to value pricing strategies, in order to better align their interests with those of their clients.

Billing: Where's the Real Client Value?

Accounting firms have been billing for, well, forever. Billing may make sense to you as a practitioner, but it may not to your clients.  The truth of the matter is, clients are often baffled by that final bill―which can result in them questioning the real value of your services, or even worse, causing them to look for a better deal elsewhere.

Clients explain the scope of their project (taxes, auditing and the like), firms do the work, tally up the hours spent by partners, junior associates and administrative assistants and send out a bill for services rendered. However, as most firms can attest, a client's reaction to that bill is rarely, “Well that's not so bad at all!” Instead, it will result in an angry client creating perceived indifference between the firm and the client—the number one reason why clients leave. It isn’t about the price, it’s about the surprise of the price. Then before you know it, the client leaves.

Catch Them When You Can

It seems that the corporate world is rife with fraud these days, and as CPAs on the financial front lines, it’s up to us to protect the public from these crimes.

Just last week prosecutors in the high-profile fraud case against former Nortel executives gave closing arguments, telling a Toronto courtroom three former Nortel executives knowingly breached accounting rules to manipulate financial records and reap millions in bonuses, keeping the now-insolvent tech firm's investors and the public in the dark.

You think it won’t happen to you.

Many years ago, as a first year staff auditor, I was assigned to the audit team of a not-for-profit organization. One of my areas was cash, but after going over budget by many hours, I still couldn’t get the general ledger balance to reconcile to the bank statements. I was convinced that I just didn’t know how to do a proper bank reconciliation, but if they just gave me some more time, I would figure it out.

5 Improvements to Civil Litigation Procedure for Financial Expert Witnesses

How can civil litigation become less costly and complicated and more fair for all involved? Although rules of civil procedure call for a quick, inexpensive and fair determination of all civil actions, those goals often are not met. The AICPA Forensic and Valuation Services Executive Committee and the members of the FVS membership section are well aware of the many problems within the system that can cause lengthy delays and unnecessary expenses. Because CPAs have a unique perspective on the issues involved, the FVS Executive Committee, in conjunction with the Institute for the Advancement of the American Legal System at the University of Denver, surveyed FVS Section members, many of whom are frequently retained as expert consultants or testifying witnesses in civil litigation. Based on the survey findings, the executive committee has released a new report, “Another Voice: Financial Experts on Reducing Client Costs in Civil Litigation.”

The report offers stakeholders in the civil justice system--including judges, attorneys, financial experts and clients--five recommendations to enhance the effectiveness of financial experts and efficiency of their use in the civil pretrial process:

Optimizing Your CPA Firm for Local Search

More than 167 million people will shop online this year. Social commerce sales are expected to total $9.2 billion by the end of this year and could climb to $14.25 billion in 2013 and $30 billion in 2015. Consumers are not just shopping for the latest gadget; they’re buying everything from groceries to professional services, including those offered by your CPA firm.

In the News: CGMAs Can Bridge the Gap in Human Capital Management

David McCann at CFO.com spoke with Arleen Thomas, CPA, CGMA, AICPA SVP of management accounting, about a recent talent management survey for Chartered Global Management Accountants conducted jointly between the AICPA and the Chartered Institute of Management Accountants by the Economist Intelligence Unit. The report found that 43 percent of the CEOs, CFOs and human resource directors surveyed said their companies have missed financial goals in the past 18 months because of inadequacies in human capital management. Almost the same number, 40 percent, indicated that such shortcomings—which could include insufficient systems, processes or management information—have hindered their ability to innovate. “We believe that talent and the human dimension drive business growth and companies haven’t focused enough on that,” said Thomas. “Too many companies look at talent in terms of what they have to do to comply with labor laws and regulations, rather than understanding that it can be a competitive differential.”

Why Financial Statement Preparation is Proposed to Be a Nonattest Service

One reason why I love my position at the AICPA is because I get to meet with so many wonderful members who work so hard to make the CPA profession great. I’m always interested in discussing our new proposed standards and listening to their views about how those standards assist them in their day-to-day work.

As I traveled the country this past spring and summer, I wanted to hear how our members perceived the changes that both the AICPA’s Professional Ethics Executive Committee and the AICPA’s Accounting and Review Services Committee have proposed on a very important issue.

CPAs Win Big at the Emmys

No, CPAs didn't actually win an Emmy. Nor were they nominated for one. But the Emmys and some of the cast of "The Big Bang Theory" took a new and creative approach to acknowledging the CPAs who tabulate and guard the Emmy votes. Traditionally, the CPAs involved are introduced on stage with little fanfare. However, this year they got special treatment and admiration from Sheldon Cooper. Watch the clip below. CPA! CPA! CPA!

 

Related articles

• Evolution of the Profession (video) (aicpa.org)

What Can CPAs do about Tax Identity Theft?

I am constantly getting emails and calls from members who have stories about how one of their clients has become a victim of tax identity theft and the person’s refund has been put “on hold” until the government can sort things out. Some of these stories can be heart wrenching. 

It’s no surprise that these stories are on the rise. Tax identity theft has mushroomed – the IRS identified 1.2 million incidents in 2011, over double the amount from 2010 (440,581) and the numbers may actually be much higher according to a Treasury Inspector General analysis. So, unfortunately, the odds that your clients may be affected have gone up considerably.

Expanding Your CPA Services to the Government

In today’s economic climate, even with budget cuts on the horizon, the U.S. government is the largest consumer in the world. Yet, for many businesses -- small businesses in particular -- the thought of doing business with the federal government can be headache-inducing. Last year, the federal government spent more than $850 million on financial services. Just more than half of this was spent with CPAs; the remaining half was spent on other financial services, including debt collection.

The demand is there, but is it possible for a small CPA firm to capture a portion of this market? While well-established Fortune 500 firms have a definitive advantage in the contracting industry, the federal government has taken steps to level the playing field and create a more small-business-friendly environment. Two examples of this are small business goaling and set-aside contracts. 

A New Chapter in the Profession’s Extraordinary Story

It’s amazing to see what can happen within a single year. That’s one of my main observations as I complete my extraordinary time as your chairman.

I was honored to serve as chairman during the AICPA’s 125th anniversary. The Institute’s founders wanted to make a difference in the lives of CPAs and the people and organizations with whom they worked. They clearly succeeded, and I am confident we will continue to create value for our clients, employers and the public as the 21st Century progresses. As this year draws to a close, I see an increasingly vibrant profession preparing for the immense challenges facing us. Most of all, I see a profession that, throughout its history, has served with integrity and unleashed opportunities for success.

Stakeholders Invested in Sustainable Business Practices

Have you seen the CGMA Report “Thirsty Planet”? The report expertly underscores the need for businesses to consider social and environmental sustainability as a means to sustain business. Ensuring that natural resources, such as water, are safe and clean for future generations, communities and businesses to come should be a priority for businesses. 

A sustainable enterprise has a clear strategy not only on how it will make money, but also on its social and environmental impact. An organization’s ability to create and preserve value for itself, its stakeholders and society at large, depends on the strength of its business model;  the sustainability of the financial, social, economic and environmental systems within which it operates; as well as on the quality of its relationships with, and assessments and decisions by, its stakeholders.  Businesses need to consider environmental and social impacts in order to have a genuinely sustainable business that makes money—not just because it is the right thing to do, but also because it makes good business sense. 

In the News: Executives Pessimism Towards Economy Erodes Confidence in Own Organizations

With the announcement yesterday that the Federal Reserve is launching a third quantitative easing in an attempt to generate momentum for the stalling recovery, the economy—and unemployment—are back in the spotlight.

The AICPA’s 3rd quarter Economic Outlook Survey results were released last week, which provided insights into the direction of the economy from 1,365 qualified CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. Their gloom was reflected in last week’s jobs report, which showed the labor market continuing to stagnate and served as one of the reasons behind the Fed’s actions yesterday.

Compelling Research and Helpful Tools for CGMAs

As a busy CPA in Business and Industry, you may not have time to seek out resources to help you in your day-to-day work. More than 33,000 CGMAs are already enjoying access to valuable benefits like innovative thought leadership reports and tools. The following is just a sample of the dozens of resources available on CGMA.org.

Back to Saving

Over the past few weeks, kids across the country packed their backpacks and headed off to start the new school year. I still remember the mix of excitement and apprehension I felt as I laced up my new sneakers for the first day—they were the “special” annual back-to-school purchase in our family. The preparation for school may vary between households, but it can be agreed that every parent wants to set their children up to succeed. While there are many factors that may be out of a
parent’s control, teaching kids good financial habits, like saving, can give them the best opportunity for a financially stable future.

To help kick off the school year, Feed the Pig hosted a live Q&A on Kids and Money, with National CPA Financial Literacy Commission members Kelley Long, CPA and Clare Levison, CPA. Here are a few of the top questions and answers.

4 Pieces of Advice to Help Clients Collect Money Faster

Imagine having more than 1 out of every 3 dollars you’ve earned tied up and inaccessible.

That’s money you can’t use to advertise, to develop new products and services, or to hire employees.

For many business owners, that scenario is a day-to-day reality as they sit with 40 percent or more of their assets tied up in accounts receivable. Obviously, when it comes to money that your clients are owed, they want to collect as quickly as possible.

3 Things You Need to Know About Clarified Standards

With only one AU section left to clarify, the Auditing Standard Board’s Clarity Project is substantially complete. During the past year, I have been traveling around the country talking about the 47 “AU-C” sections that have been clarified and converged with corresponding International Standards on Auditing. Here are some of the major points that you need to know about these standards and their impact:

Accounting Offers More Career Opportunities: If You Know How to Find Them

USA Today recently reported that service businesses are leading an uneven job recovery. In the service sector, accounting firms have regained 87% of the jobs they lost, in part because of the growth of start-up businesses, new financial rules and U.S. companies expanding globally.

Salaries of accounting graduates are continuing to rise. In an April 2012 report on the starting salaries of the college class of 2012, the National Association of Colleges and Employers said the median salary of accounting majors was $47,800, up 2.8% from the 2011 median salary. The overall average salary of new graduates was $42,569, up 4.5% from 2011.

Long term, employment of accountants and auditors is expected to increase 16% from 2010 to 2020, or about as fast as the average for all occupations, according to the Bureau of Labor Statistics. Over that ten-year period, accounting employment is forecasted to increase from 1.22 million to 1.41 million jobs.

These statistics point to continued growth in the job market for CPAs, but where will CPAs find job and career opportunities?

In the News: Making Allowance a Teachable Moment

When I reflect upon my childhood, I fondly recall my elementary school days at P.S. 116 in Manhattan. Despite enjoying school, my favorite time of the year was when I would proudly present my parents with my final report card of the school year. The reasons for this were two-fold: like most kids, I always looked forward to my summer vacation, and I knew that if I got good grades my parents would reward me with a gift of my choice (usually a Nintendo game).

As I turns out, I wasn’t the only kid being compensated for doing well in school. According to a recently released AICPA survey on how parents treat the subject of money with their children, 48 percent of parents say that they pay their kids for getting good grades. As CNN Money noted, the survey showed that the going rate for an ‘A’ is $16.60, which makes me think my parents were getting off easy back in the day.

How Do You Tackle Health Care Reform?

One provision at a time, of course!

Everyone is talking about the new Affordable Care Act.  Everyone is reading about it. Everyone is writing about it. Everyone is learning about it. But what is anyone doing about it?   

Not enough is what I am hearing from my fellow CPAs. And that is quite understandable when simply thinking about the magnitude of health care reform can leave you scratching your head. But there is a way to devour the totality of the legislation without feeling completely overwhelmed:  tweak your approach.  Just as the saying goes, “How do you eat an elephant? One bite at a time, of course!” The same holds true for tackling health care reform, you tackle it “one provision at a time.”

Prior to the Supreme Court’s decision on June 28 to uphold the mandate requiring  most U.S. citizens and legal residents to maintain minimum health coverage, many individuals and businesses put off action in case the law was overturned. Now that the results are in, many people are taken aback wondering how to go about implementing the vast array of elements that make up health care reform.

New Tools to Help Companies and Auditors Evaluate XBRL

As the last group of companies is subject to the final phase of the Securities and Exchange Commission mandate this summer, we are reaching a major turning point for eXtensible Business Reporting Language implementation in the U.S. Investors now have a full data set accessible for their analyses as all information from a company’s financial statements, as well as the notes and schedules, are individually tagged at a detailed level. This means investors now have the ability to search and access specific pieces of information for all public companies.

The Importance of Communications in Accounting

Hi! My name is Joseph Farco and I’ve recently completed a summer internship with the AICPA. I assisted the Communications and Media Channels team in the New York office. While working with the AICPA has not only allowed me to learn more about numerous issues facing the profession, it also has helped me develop one of the most important skills for any business professional: communications.

From a young age I always knew I wanted to go into business, because I visited the New York Stock Exchange once a year on Kids’ Day. How was I allowed to go to this event on a yearly basis? Well, my father has worked on the floor of the exchange since 1980. His desire to see me do well in life combined with my annual visits to the NYSE, fueled my fire to go into business. This led me to mostly business electives in high school which included two college level accounting classes. I was surprised with how much I enjoyed those classes and I became interested in learning more about accounting. My passion for mathematics led me to embark on a journey to Seton Hall University, where I graduated in May 2012 with a BS in Accounting. My future plans are to pursue an MBA in Finance and eventually sit for the CPA Exam. My long term goal is to one day open up my own practice.

While the focus of my internship has not been entirely on accounting work, I’ve learned a number of lessons that could be used on a daily basis in the “real world.”

The Role of the CPA in a Crowdfunding Future

In 2010, many sectors of the U.S. economy began to improve from the Great Recession—however, small businesses lagged behind, largely as a result of having trouble raising the capital they needed in a still tenuous financial recovery.

This led to the advent of a concept called crowdfunding. Crowdfunding—inspired by crowdsourcing—describes the collective cooperation, attention and trust by people who network and pool their money together, usually via the Internet, in order to support efforts initiated by other people or organizations.

4 Social Media Etiquette Tips for CPAs

If you have had your business for any length of time, you know the importance of using the Internet for promotion. Even if you work for a financial firm, you may be called upon to participate in the online promotion of initiatives for the corporation. One of the easiest ways to do this is by using social media sites like Facebook, Twitter and LinkedIn. These sites offer ways to widen your customer base, network with other professionals and communicate easily on forums that people already use on a wide scale anyway.

Many people have separate social media accounts for personal and professional use, and making the distinction between the two is key to establishing a professional online reputation. Understanding the rules that apply to personal and professional realms is vital to making the most of social media outlets in both respects.

Here are a few suggestions on etiquette when it comes to social media ventures.

Financial Education for All

A common mantra when discussing programs and services to improve an individual’s financial understanding is “One size does not fit all.” In addition, there’s no one age where financial education should begin and end.  This was abundantly clear during the Improving Financial Literacy and Capability: What Works? conference organized held earlier this summer.  This day-long program presented the innovative ideas and work of the Financial Literacy Center, a joint effort of the RAND Corporation, Dartmouth College and the Wharton School.  Each presentation provided insights in to various approaches to and workable solutions to improving financial literacy for consumers of all ages. 

The day’s panels highlighted a variety of research, programs and technologies, and all presentations can be found on this website for the conference.  I want to share with you highlights from the presentations which made up the panel I moderated: Financial Literacy Among Young People.  The AICPA outreach efforts in this area include 360 Degrees of Financial Literacy and Feed the Pig, which encourages 25-34 year olds to improve saving habits for long-term financial health.  However, as we know, waiting until your mid-twenties to begin thinking about money and learning about good financial habits puts you at a serious disadvantage for financial security as an adult.

In the News: Accounting Student Paul Wright Wins Medal of Inspiration Award

The AICPA recently announced Paul Wright, a student at Western Washington University, as this year’s winner of the Beta Alpha Psi’s Medal of Inspiration Award. Danielle Lee of Accounting Tomorrow reports that the AICPA-sponsored award, which includes a $5,000 cash stipend, honors a student who has experienced extreme hardships in his or her life and demonstrated an unusually high level of success in face of this adversity. Wright was born with arthrogryposis, a disability which includes stiff joints and missing muscle, requiring multiple surgeries before he turned 16. AccountingWEB noted that, despite his disability, Wright enrolled in Western Washington University, declared an accounting major and last April joined Beta Alpha Psi, an honorary organization for financial information students and professionals. He has worked with the university’s disability resource center and local BAP chapter to stream meetings to students who couldn’t attend. “A key lesson I learned while growing up is that true strength comes from the heart,” said Wright. “I know that I work harder for everything and that makes me feel even prouder of my accomplishments.”

Beyond the EDGE: Twitter Enhances CPA Conference Experience

Last week, I attended the AICPA E.D.G.E. conference in Orlando, Fla., and was excited to see some conference attendees all-a-flutter over Twitter. In fact, several speakers and attendees were chatting and getting to know each other on Twitter before the conference even started.

When I arrived in the exhibit hall, the first person I met, one of the conference speakers, said, “Hey. I recognize you from Twitter. It’s so nice to meet you in person.”  Next, I met an exhibitor who said the same thing; he had immediately recognized me from my profile picture. Since I had already had interactions with both of them online, we had an immediate rapport when meeting offline. Strengthening online relationships by connecting in person is just one of many ways using Twitter can enhance a conference experience.

Interview: Tax Aspects of Donating a Car to Charity

While donating a car to a charity can get you a nice deduction, it can be complicated and confusing. Kars4Kids, a national car donation charity, interviewed Jerry Love, CPA, who has extensive experience consulting clients on donating cars to charities. This is a summary of the interview; the full interview can be found on AICPA.org.

Kars4Kids: How important is it for a donor to document the donation?

JL: The Internal Revenue Service has gotten very strict recently and will disallow deductions or impose fines if a vehicle donation is not documented properly.

Kars4Kids: What is the proper documentation that donors should get from the charity?

SOC Engagements: How to Get in the Game

As with so many issues related to the accounting profession, opportunities to engage new clients or re-engage existing clients abound when standards are updated or changed. Such is the case with Service Organization Control Reports ^SM. The guidance for service auditors in the old Statement on Auditing Standards No. 70, or SAS 70, as it was known, was replaced effective June 15, 2011, by Statement of Standards for Attestation Engagement No. 16, which can give your firm and its clients a new set of standards to meet user needs.

If you haven’t already looked into this growing market for CPA services, here are some tips on how you can start a SOC practice:

CPAs Stress the Importance of Long-Term Care

There is no way to sugar coat it, readers - we are all getting older. I remember when I was a teenager, I would complain about the aches and pains I would get from playing sports and my father would say to me with a wry smile “wait until you get older.” My health was not an issue I wished to consider back when I was a teenager, and I don’t particularly like thinking about it now – but there is certainly no getting around the fact that the older we get, the more important it is to have a plan in place to deal with health issues as they arise.

According to the U.S. Census Bureau, between 2010 and 2050, the U.S. is projected to experience rapid growth in its older population. In 2050, the number of Americans aged 65 and older is projected to be 88.5 million, more than double its projected population of 40.2 million in 2010. This means that an increasing number of Americans will be making important decisions about their long-term health in the coming years.

4 Simple Ways to Boost Your Online Presence

It’s important for any CPA firm to have a strong presence online. According to Local Search Usage Study: Bridging the Caps, From Search to Sales, 70% of consumers go online first for local business information. Are potential clients finding your firm? Not only do you want to be easy to find in cyberspace, but you also want to present yourself as an expert and trusted financial advisor. A simple website is a start, but is not enough to give you an edge in today’s competitive environment. In order to find new clients, and keep the ones you already have, focus your efforts on ways to boost your online presence. I have found that even small efforts go a long way toward a more prolific online presence.

Here are four steps to raise your online credibility and widen your client base in the process.

In the News: Pathways Commission Releases Report on Future of Accounting Education

Both Accounting Today and Inside Higher Education covered the release of a new report from the Pathways Commission on Accounting Higher Education. The Commission, put into place in 2010 and co-sponsored the by the AICPA and the AAA, was tasked with studying the future structure of higher education related to accounting and developing recommendations to engage and maintain the strongest possible academic community in accounting. Their report summarizes two years of collective effort by more than 50 individuals representing a diverse array of stakeholders in the accounting profession.

The report presents seven main recommendations and provides ideas on implementation efforts. The recommendations range from attracting a more diverse population of students to the profession to reforming accounting education so that teaching is respected and rewarded. Additionally, the commission recommended establishing an implementation process to address their suggestions by creating a continuous, sustainable process.

Top 5 Ethics Resources

With the importance of ethics and non-financial reporting rising on the global agenda, accounting professionals are in a unique position to make an important contribution to creating a sustainable ethical operating environment. The AICPA and CIMA have developed a number of resources to assist CPA, CGMAs in guiding their organizations to long-term sustainability and success, but these resources shed light on the challenges many CPA business clients face, and so apply to CPAs in a firm setting as well.

Here are our top five.

Estates and Trusts with 3.8% Medicare Surtax

The Supreme Court’s decision upholding the Affordable Care Act confirmed that trusts and estates will be subject to a new 3.8% Medicare surtax when net investment income exceeds a threshold amount. This year presents an unprecedented opportunity for you to differentiate your firm and services and show that you provide significant value to your clients by having all of their financial planning needs in mind, including retirement, estate, tax, investment and insurance planning. With so many unknowns in 2013 compounded by an election year, your clients need to take advantage of many financial planning avenues now to avoid missing crucial opportunities to protect their nest egg and increase their net worth. Listen to a recent podcast below from Bob Keebler, CPA, in which he points out issues surrounding this new surtax and how to plan for trusts and estates. Access other resources to help you educate your clients and proactively plan now in preparation for 2013.

Estates and Trusts with the 3.8% Medicare Surtax

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

5 Steps to Writing Effectively

You’ve got a big problem. You provide lots of documents to your clients and customers, but the information in the documents is very complex, and hard to understand. You know that most of your clients and customers don’t read the documents.

This could cause some big headaches down the road. Your clients and customers might claim not to have received critical information, if that information was buried in a big, ugly, confusing document somewhere.

Now there is a more immediate issue. In the wake of the financial scandals of recent years, the government is pressuring all financial companies to write their documents in plain English. The documents need to be clear enough for everyone to understand them.

343,020 Reasons CPAs Should Talk Up Their Tax Expertise Now

Nearly three years ago, the IRS launched the tax return preparer oversight program and seeds were planted in the landscape of tax return preparation services.  Today, those seeds are starting to sprout. 

In June, the IRS estimated there are 717,161 PTIN holders, many of which (212,975, or 29.7%) are CPAs, outnumbering Enrolled Agents (42,895) and attorneys (31,189) combined.  While CPAs have dominated the regulated tax preparation arena, that landscape is about to change. More and more people are completing the final step to becoming a Registered Tax Return Preparer, or RTRP (they have until 12/31/13 to pass the competency exam).  Currently, there are 4,893 RTRPs.  That leaves an estimated 338,127 “provisional preparers” who may join the RTRP ranks. 

That means more competition is coming and it will influence the public perception of tax return preparers.  Unfortunately, the public doesn’t really understand the difference between a CPA and other tax return preparers.  We have all seen the advertisements by the big box tax preparation and software chains that inflate the qualifications of their employees.  They often compare them to CPAs or perhaps they feature a CPA in the ad, implying that every customer representative will have similar qualifications.

Outlook for the Global Economy Declines in Latest CGMA Forecast

On July 10, the AICPA and CIMA released the results of the most recent CGMA Global Economic Forecast, which showed the world’s CEOs, CFOs and senior management accountants hold an increasingly pessimistic outlook for the global economy over the next 12 months. The shift to a more negative sentiment appears to reflect the worsening of the sovereign and financial crisis in Europe and its effects on other regions, as well as slower growth in China and political and fiscal uncertainty in the U.S.

The CGMA Global Economic Index – a comprehensive gauge of executive sentiment within the Forecast – declined 7 points to 58 from the first quarter 2012 reading of 65. The Index is a composite of 10 equally weighted survey measures on a scale from 0 to 100, with 50 considered neutral and numbers above that signifying positive sentiment.

In the News: Accounting Firms Regain 87% of Jobs Lost During the Recession

This week’s ‘In the News’ post comes from the AICPA and CPA/SEA Interchange conference in St. Louis. I’ve been learning a lot at the sessions and having a good time networking with my colleagues at the state societies and sharing ideas and information. There has been a lot going on in the profession recently and I’ve been trying my best to stay on top of it all. I’ve highlighted a few of the more interesting articles I’ve seen in the past week and shared them with you below. If you see something that you think was particularly important, send me an email or let me know in the comments section.

CPAs Make Sure to Provide Financial Information that Makes a Difference

In these days of continuous information, it’s essential to give people and organizations precisely the details they need to make important decisions. What never fails to cut through the clutter is information that is relevant, understandable and useful (not to mention correct). As CPAs, we often are a conduit for complex technical information, providing analysis and guidance in the process. We currently are working on two critical initiatives that bring this hallmark of our profession to life.  

Going on Vacation? Your Social Media Activity Doesn’t Have To

Keep your social media channels afloat; schedule content while you are away from the office.

You’ve set your out-of-office message, changed your voicemail greeting and, in your mind, you may already be on the beach listening to waves crash against the sand. Back to reality…there’s one more thing to take care of before you go!

Continuing your activity will help you stay engaged with those fans and followers while you are away.

National MAP Survey Provides Insight to CPA Firms

It’s valuable to have a perspective on the current state of firms, no matter your role in the CPA profession. Knowing the existing best practices in areas such as staffing, training and technology is important. The 2012 PCPS/TSCPA National MAP Survey, which is being fielded now through July 20, provides you the opportunity to expand your knowledge base on these hot topics. This comprehensive look at CPA firms’ key strategic data is the largest firm practice management survey project of its kind. Contribute your answers to the survey and you’ll have access to the results when complete.

A unique benchmarking tool, the PCPS/TSCPA National MAP Survey reveals key performance indicators broken down by firm size and region so that it’s possible to make meaningful comparisons among firms. It also assesses how firms are doing and spots emerging trends.

“Big Data” Presents Big Opportunities for Firms and CFOs

It is difficult to ignore the tremendous growth in information technology that has been occurring over the last few years and how it is transforming business. Technology is enabling data to be captured at a volume and prevalence never imagined. Among social media sites, websites, smartphones, customer profiles and purchase information, it seems that just about every part of our business or personal lives provides information about ourselves that someone is collecting. But where does it all go? What happens to it? How can you turn this data into something meaningful, and more importantly, profitable?  

Information like this is called “Big Data” and Big Data has been a high-profile topic in business media and even the mainstream press. It refers to data sets that grow so large that they are nearly impossible to work with using traditional database management tools, but yet offer a powerful tool when married with strategic use. Big Data has been called “The next frontier for innovation, competition and productivity.”

Planning Strategies in Wake of the New 3.8% Medicare Surtax

The Supreme Court’s decision upholding the Affordable Care Act confirmed that taxpayers whose income exceeds a threshold amount will be subject to a 3.8% Medicare surtax on net investment income, effectively raising their marginal income tax rate. However, whether the Bush era tax cuts will be extended and, if so, for whom, remains an open question. In light of this uncertainty, CPAs may want to start planning for possible 2013 tax increases now, particularly for clients who will benefit from transferring assets to family members, decisions that can take time to make. Download a free Medicare surtax chart from Robert Keebler, CPA, and listen to his recent podcast on how to plan for the Medicare surtax below.

Understanding the 3.8% Medicare surtax under the healthcare law

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

CPAs: The Startup Community Needs You

There is a joke in Hollywood that no matter what one’s day job is, everyone has a headshot in their back pocket. In business, the back pocket accessory isn’t the headshot—it’s the business plan. The startup community is exploding across the U.S. Whether it’s Silicon Valley, New York City or Detroit, state and local governments are embracing startups and encouraging talent to call their fair city home. According to the Global Entrepreneurship Monitor, there was a 60% increase in startups from 2010 to 2011. But there is one important thing most startups are missing: financial guidance.

You and I know the value a CPA brings to any organization. But many startups don’t. The qualities a CPA possesses—integrity, competence and objectivity—are needed and missing from some startups. Not to mention the financial and business knowledge that makes CPAs trusted business advisers. Recently, a report was released that examined the appointments of accounting and financial experts to audit committees, exploring whether concerns about the status of these experts discouraged companies from appointing them.

Case in point: Groupon.