Some Garlic Sauce for Your LinkedIn

Lima beans, broccoli, and mushrooms are among Americans’ most hated foods according to a recent survey.  I’m right there with them.  But I have found that mushrooms and broccoli are not so bad when smothered in garlic sauce or maybe topped with crabmeat. 

What does any of this have to do with social media? Many people think of social media as something they know they should do, like eating broccoli or Brussels sprouts, but it’s still difficult to swallow.  Perhaps you started a profile and joined a couple of groups at some point but you haven’t been active in months. Or years.  

Just like eating vegetables is a must to stay healthy, an online presence is a must for a healthy career, especially if you are considering changing jobs or want to expand your professional or client base.  “If you’re not on it [LinkedIn], you’re not in the game,” says Mark Lee, a tax director and author of blogs and professional journal articles about social media.

So here is my version of garlic sauce to tempt those of you who are leery of getting involved or have dropped out. 

In the News: Preparing for the CPA Exam is Now Easier

The AICPA has recently taken steps to make preparing for the Uniform CPA Exam easier for international students and candidates on the go with two exciting new developments.

Recently, the AICPA announced it had expanded its website, ThisWaytoCPA.com to students overseas who may now register and create profiles.

The website, designed to educate college students and CPA-exam candidates about the path to becoming a CPA, now contains information to help international students understand the process of registering for the CPA exam and becoming a U.S. CPA while living overseas.

Key Income Tax Planning Ideas for 2012

This year presents an unprecedented opportunity for CPAs to differentiate their firm and services and show that they provide significant value to their clients by having all of their clients' financial planning needs in mind, including retirement, estate, tax, investment and insurance planning. With so many unknowns in 2013 compounded by an election year, 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 Bob Keebler as he discusses how CPAs can use this uncertain time to help their clients plan for the future.

Key Income Tax Planning Ideas for 2012

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.  

International Banking Rules Making Their Way into U.S.

After the financial crisis of the late 2000s, the global public’s view of the banking sector took a severe hit.  This sparked a need to finalize the revisions to the Basel Accord (Basel II) in order to restore confidence in the banking system and gain the general public’s trust. One way of accomplishing this goal is by requiring banks to maintain strong capital positions to be able to withstand any future market shock.   On June 7, the U.S. Federal Reserve issued the Basel III documents for public comment.

If you have regulatory reporting responsibility over banks, you should assess the proposals to understand how your or your client’s daily operations could be affected. The Federal Reserve has posted a Q&A on its website to discuss the specifics of Basel III. Each of the three proposed rulemakings is discussed below. Banking organizations that are not active internationally or are not subject to the market risk rules only need to review the first two notices of proposed rulemakings.

Wise Advice from the New Kid

What’s the best advice to give virtually anyone starting a new job? Corey Cines, blogger with the AICPA’s This Way to CPA website, wrote “From Backpack to Briefcase: How I handled the jump into Public Accounting,” to offer his tips for starting life as a firm newbie. It’s excellent advice for any young CPA looking to build a foundation in accounting. Not only that, Corey’s great advice also applies to anyone transitioning into a new role or a new organization.

Asking “dumb” questions, staying positive and practicing stress relief: these are just some of Corey’s gems for getting the lay of the land.

We asked several AICPA CPAs on staff what advice they wish they had gotten when they first entered the accounting workforce. Here are some tidbits:

My Takeaway from The Supreme Court’s Health Care Decision

I started in this profession 30 years ago this month.  As an auditor, one of the things I’ve always liked is that we are in the unique position of being paid for our opinion. Not just any opinion, mind you, but a reasoned, objective opinion based on the evidence we gather and the application of professional judgment.

A lot has changed in the world of communications in those 30 years. There seems to be an increasing emphasis on making the provocative statement to draw attention, increase readers or Twitter followers. In spite of this irreversible trend, I have held fast to the now quaint notion that there will always be a place in the business world for sound, independent analysis and advice.

The most striking thing about the Supreme Court’s decision was not the decision itself, but the media debacle in reporting it. 

CPAs Can Help Americans Plan for a Secure Retirement

A recent CPA Letter Daily Poll recently asked the question, “What would make you cash in your 401(k) before retirement?” and an astounding 42% said nothing.  It’s not that they didn’t answer the question asked, because they did answer it, only their answer was “nothing.” Nothing would ever make them cash in their retirement savings before retirement. People are beginning to realize that you might need to struggle a little more today so that you do not have to struggle in your later years.

Of the remaining 58% respondents to the poll, 47% would use their 401(k) funds prematurely to supplement cash flow because of a loss of employment or to pay their mortgage.  Both of these choices fall into the category of providing cash for the needed expenses in life, certainly understandable.  The CPA Letter Daily is distributed predominantly to CPAs and I’m sure the respondents were also CPAs who have a current 401(k) plan balance.  What is the average worker in the U.S. doing to save for retirement?

Whatever November Brings, Start Preparing Clients Now

There will be some significant potential consequences on the horizon if Congress allows certain existing tax laws to expire on January 1, 2013. With only a few months left to plan, it’s time for CPAs to be aggressive in educating clients about the decisions they may face.

Several tax changes are now set to occur at the beginning of 2013 if Congress does not act. Among them:

• Individual income tax rates will go up.
• Long-term capital gains rates will rise.
• The gift and estate tax exemption will drop from $5.12 million to $1 million. Estate assets more than the $1 million exemption will be taxed at a maximum 55% rate.
• Taxpayers whose income exceeds a set “threshold amount” will be subject to a 3.8% Medicare surtax on net investment income, effectively raising their marginal income tax rate. An affected taxpayer in the 39.6% bracket—the highest bracket in 2013—will have a 43.4% marginal rate. This will apply to individuals and trusts and estates.

In the News: Leave that Savings Alone

A Bankrate.com article titled “Four Ways to Avoid Dipping Into Your Savings Account” quoted Kelley Long, a Chicago CPA, personal finance coach, and member of the AICPA’s National CPA Financial Literacy Commission. In the article, Long provides prudent advice on how to keep the money currently in your savings account right where it is. She suggests savers don't get an ATM card or sign-up for Internet account access - because it provides the user with hassle free access to their savings. For more savings tips, please visit 360 Degrees of Financial Literacy, a free program of the nation’s CPAs to help American’s understand their personal finances through every life stage.

Fostering a More Ethical Business Culture

A few weeks ago, I shared with you my (reasonable and totally understandable) enjoyment of data points and survey results in all their shapes and sizes. I have also always been a huge fan of The Ethicist column in the New York Times Magazine, and put serving as ‘The Ethicist’ near the top of my dream jobs list. Needless to say, the recent results of the global business ethics survey from the AICPA and the Chartered Institute of Management Accountants were right in my wheelhouse.

It’s encouraging to see that four out of five businesses worldwide report that they have committed to ethical performance. But according to Managing Responsible Business, a global survey of almost 2,000 CGMAs, the rhetoric does not always match the reality. While 80 percent of organizations provide a code of ethics to employees, only 36 percent collect ethics information such as the number of employees attending ethics training and actions taken on hotline reports. The report suggests that companies need better processes to really operationalize their ethics programs.

Books, Exams and What I Owe

Heading off to college can be one of the most exciting times in a person’s life, especially if it’s your first time living away from home. I still remember the thrill of living with no parents for the first time. That thrill soon wore off when it was time to pay the bills—between books, groceries and my tuition, I didn’t understand how I was supposed to handle it all on my own. Fortunately, student loans showed up to save the day, sort of.

Although student loans made school financially possible, the reality of the debt I was accruing was completely off my radar while I was in school, as it is for many college students. Even with the post-graduation repayment grace period it was still difficult to pull together my loan payments the first few years; I was even one of the lucky ones who found a job the summer after graduation. In today’s economy, and with today’s unemployment rates, it’s a stretch to think that all graduates will find jobs within six months, let alone be on their feet enough to begin repaying their debt. Now, millions of college graduates may see their payments jump.

The New Rules for Tangible Property Cast a Wide Net

Although there are new U.S. federal income tax developments every day, it isn’t every day that something comes out that affects virtually all business taxpayers.  This is one of those times. Known commonly as the “repair regulations” (though they go way beyond repairs), new IRS rules create new tests for determining when an expenditure relating to tangible property is deductible or must be capitalized.

It doesn’t matter if you file as a partnership, corporation, sole proprietor or other form of business.  It doesn’t matter whether you are a manufacturer, an insurance company or agency, a mutual fund advisor, a hair salon, a retail store, or a charity, or whether gross receipts are $1 or are $100 billion.  These rules impact you if you, your company/employer, or your clients’ business operations acquire, produce, or improve tangible property.

Why the AICPA Supports FAF’s Creation of Private Company Council

Many of you have seen news reports and AICPA communications about the Financial Accounting Foundation’s recent decision to create a Private Company Council. Given the serious concerns the AICPA had with FAF’s original proposal released in October 2011, I am providing additional detail as to the structural and process improvements FAF made with the new Private Company Council that enable us to support it.  

The AICPA’s issue with FAF’s proposal centered on the extent of the Financial Accounting Standards Board’s influence on the planned private company body and ratification of its decisions. We and more than 7,000 stakeholders urged FAF to strengthen the original council’s independence and they responded. The final plan is more about collaboration between the PCC and the Financial Accounting Standards Board than the approach outlined in the exposure draft. Now, FASB will be asked to endorse the PCC’s recommendations rather than ratify them and generally will have a limited time frame of 60 days to do so. I would describe the process as one of negative clearance, with a high threshold for a FASB veto. And if FASB does veto the PCC’s decision, the FASB chairman has to explain why in writing – and provide suggestions for obtaining approval – and it will be made public for stakeholders to evaluate.

New CPA Exam Score Release Timetable for Q3/Q4 2012

The U.S. CPA Exam score release timelines have been such a hot topic amongst candidates that we have decided to post regular updates. Updated score release timelines will be announced every quarter on AICPA Insights and will also be posted on the CPA Exam website. Below is the score release timeline for candidates to easily find their score release dates.

In the News: U.S. Economy Takes Two Steps Forward, One Step Back

In the midst of continued uncertainty, the nation – and by extension, news coverage - has been increasingly focused on the economy. Yesterday, the AICPA released the results of the second quarter Economic Outlook Survey, which showed that CPA business executives who hold leadership positions, such as chief financial officer or controller, in their companies, had grown more pessimistic about the U.S. economy, compared with last quarter.

The survey results were covered in the Wall Street Journal’s Real Time Economics Blog, which noted that the CPA outlook index slipped to 67 this quarter from 69 in the first quarter. A reading above 50 indicates a generally positive outlook with increasing activity. The index has ranged between 60 and 70 for the past two years.

“What we're seeing is the same ‘two steps forward, one step back’ cycle we encountered last year,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s senior vice president for management accounting. “There's no question survey takers have grown more pessimistic about the U.S. economy, and, with expectations muted for profit, revenue and employment growth, there appear to be few catalysts to change that view.”

Moments of Obligation: A Call for CPAs to Join the Financial Conversation

I’ve always been attracted to the “serving the public interest” element of our profession. As an auditor I didn’t see myself so much as a policeman enforcing the rules, but rather as the surrogate for the investors and creditors who had limited access to information about a company’s finances and operations. I knew that these nameless, faceless third parties trusted me and that no matter what, I could not break that trust, for it was the cornerstone of the profession.

“Moments of obligation” are those moments or events when you feel yourself pulled down a path that leads you to work that will benefit others. At various points in my career, I’ve made more conscious decisions about pursuing paths to give back to the community. Of course, thousands of CPAs make decisions every day to contribute their skills, experiences and—perhaps most importantly—their credibility to efforts aimed to benefit the public good.

Majority Don’t Expect to Retire at 65

A recent poll conducted by CPA Letter Daily asked the question, “Do you think you will continue to work past 65?”  Coincidentally, the number 65 came up again. 

• Yes – 64.8%
• No – 29.31%
• I don’t know – 5.89%

Approximately 65 percent of the respondents said they would be working beyond age 65.  Do that many people love what they do for a living or is there something else happening?

In the News: Private Company Standards are Coming

The big accounting news this week was the Financial Accounting Foundation’s Wednesday announcement that it was creating a body to set differences in U.S. generally accepted accounting principles, where appropriate, for privately held companies. The private company standards set by the new Private Company Council might make it easier for the roughly 28 million privately held companies in the United States to follow certain accounting standards.

The AICPA announced its support for the Private Company Council on Wednesday shortly after the news broke.

Barry Melancon, CPA, CGMA, president and CEO of the AICPA, spoke about the developments in a video to members.

“With the news announced today by the FAF, we recognize and appreciate that the FAF has taken solid steps in the right direction regarding the Private Company Council. The AICPA is encouraged by this approach and awaits more of the details of the FAF decision.  We look forward to continuing to work together to effect meaningful changes in U.S. GAAP for private companies and the users of their financial statements,” said Melancon,

Celebrating 125 Years of Professional Pride

This year, the profession is proudly celebrating a major milestone: the AICPA’s 125-year anniversary. We are one of the few professional organizations to reach this landmark birthday. I believe we got here because the profession’s core values—integrity, objectivity and competence—have made CPAs the most trusted financial professionals and will continue to do so. Those values have remained constant since 1887, and they will serve us well in the 21st Century.

Reaching 125 years of age deserves recognition, so we kicked off our celebration of that achievement with a special Council meeting in Washington, D.C., earlier this month. Since the Institute plays an important role in educating and influencing policymakers, the gathering began with more than 400 representatives of the AICPA and governing Council visiting their legislators on Capitol Hill to reinforce our important thought leadership role. We talked with congressional leaders about two public interest initiatives launched in honor of the occasion.

Shine a Light on What Taxes You Pay

Every year, politicians, economists, tax practitioners and others talk about making changes to our federal and state tax systems. Some of the proposed changes are more fundamental – the adoption of a consumption tax, for example. Other proposals, on the other hand, call for varying degrees of modification to the existing system, such as adding or expanding tax incentives to encourage savings, modernizing the international tax rules, or making procedural changes to improve compliance.

In a presidential election year, and at a time when our country faces unprecedented levels of debt and extraordinary amounts of governmental-operating deficits, taxes will continue to be one of the most pressing issues for public discourse. Have you heard any of the candidates mention the “T” word lately? We all know, however, that talking about taxes in this environment takes a lot of political courage.

And The Survey Says... Increasing Demand for Forensic Accounting

Infographics may be the rage these days, but I still like good old-fashioned statistics, data points and most of all, survey results. Maybe it's because I spent a lot of time watching Family Feud as a child, but when I look at survey results the voice in my head announces ‘and the survey says…’

If 100 CPAs across the country were asked ‘what is the fastest growing area in accounting,’ it is highly likely that forensic accounting would be one of their top answers. Backing up what many in the profession have long suspected to be true are the latest results from the AICPA Forensic and Valuation Services Trend Survey: and the survey says that forensic accountants are seeing a noticeable increase in demand for their services.

When Opportunities Abound, Follow Your Passion

When should you make the transition from public accounting to business and industry? That’s the question Dan Griffiths tackles in his latest blog post on ThisWaytoCPA.com, the AICPA’s hub for college students, CPA candidates and newly-minted CPAs. Touching on the core skillset that public accounting provides a young professional, Griffiths makes the argument that opportunities exist in all areas of business. What’s important is that CPAs pursue the opportunities they are most passionate about.

AICPA Celebrates 125 Years of Representing CPA Profession

The AICPA has reached a remarkable milestone: being one of the few organizations to celebrate 125 years. As you can imagine, the CPA profession has changed a lot over this period. Throughout the year, the AICPA and its members will be celebrating this special anniversary and reflecting on the history of the CPA profession. Since people are what make a profession, we asked members to give us their thoughts on what the AICPA means to them and the value of being part of a strong CPA profession.

Creating Social Capital for Not-for-Profit Support

Ask any non-for-profit development director and they will tell you there are two ways to fundraise: 

• Ask 1000 people for $10
• Ask 10 people for $1000

Which is the easier task? In terms of time and resources spent, certainly option B is the easier option. But in terms of broader reach and influence over a large audience, option A is a formidable contender because of something called social capital. Social capital is a concept that points to the power of networks to build a powerful entity, such as support for a cause, political candidate or even a corporate brand.

AICPA Tells Congress to Keep Oversight of Investment Advisers with SEC

As the AICPA gears up for our 125th Anniversary next week, here’s a wrap up of a few interesting accounting topics recently making the news. You can follow @AICPANews on Twitter to stay on top of all the latest official AICPA news as well as articles impacting the profession.

CFO.com wrote that the AICPA raised concerns over the Investment Adviser Oversight Act of 2012 and urged Congress to keep oversight of investment advisers with the SEC. Introduced in the House of Representatives on April 25, the bill would transfer oversight of investment advisers from the SEC to a self-regulatory organization."Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser," Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a statement. The AICPA's stance is that the system proposed under the bill would cost advisers much more in fees than current SEC oversight would.

On January 19, 2011, the SEC issued a staff report that found the current SEC-registered investment-adviser examination program faces hefty capacity and funding challenges. Three options were proposed to offset these challenges.  One would be to impose "user fees" on SEC-registered investment advisers to fund oversight. A second would authorize one or more SROs to examine investment advisers, with oversight from the SEC. A third choice would be to authorize the Financial Industry Regulatory Authority, a leading broker-dealer SRO, to examine dual registrants for compliance with the Investment Advisers Act of 1940. All three options require congressional action. "We believe that the SEC's core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public's best interest." Melancon said, "Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public."

From Tax Preparer to Financial Planner

Congratulations on making it through another tax season! As you helped your clients prepare their tax returns, did you ask yourself any of these questions?

• Who, if anyone, is looking at their overall financial picture?
• What can I do to help remove financial obstacles so they can accomplish their goals?
• Can I offer financial knowledge, analysis and a framework to make this person’s dreams a reality?

From those long hours, including rigorous reviews and meetings with clients, you’ve gained unique insight into their lives – insight into their incomes, spending habits, investments and life events. While reviewing those 1040s, you are able to envision potential tax impacts of financial decisions and begin considering tax planning opportunities for your clients. This is a great first step in helping them meet their overall financial planning needs, including making estate, retirement, tax, investment and insurance planning decisions to move them toward meeting their long term goals.

Friends, Family and Finances

Relationships and finances can be very tricky; whether between parents and children, roommates or spouses. In fact, financial matters are the most common source of discord among American couples, prompting an average of three arguments per month, according to a survey conducted for the AICPA by Harris Interactive.

More than half of adults, 55 percent, who are married or living with a partner said they do not set aside time on a regular basis to talk about financial issues. This leaves them at a huge disadvantage. It’s important for all parties involved to be aware and understand where their money is going.

5 More Steps to Get Ahead in Your Career

Since so many of you were interested in Friday's post, 6 Steps to Get Ahead in Your Career, I decided that I should share some other career strategies also adapted from a recent presentation by author and career coach Donald Asher. 

6 Steps to Get Ahead in Your Career

What’s the difference between a CPA's salary of $45,000 and $90,000 per year? Skillset. The difference between someone's salary being $90,000 and $200,000 per year, however, is not a difference in skillset, but a difference in how they manage their careers. Here are some steps—adapted from a recent presentation from author and career coach Donald Asher—which you can take to advance your career.

The Brand YOU: Your Bio

Personal branding is about promoting what makes you unique and what allows you to stand out from the crowd. A major piece of branding is creating your professional “bio” or biography. That bio is, after all, a specific place to capture your “story” …. so it is personal.  

For many CPAs, your bio is likely already on the web and accessible by anyone and anywhere. Since it is so accessible, it presents a nice branding opportunity – to spread your message about the value you provide and the opportunities you want to attract.

When reviewing your bio, consider three Cs of personal branding – Compelling, Consistent and Clear:

Behind the Scenes with Volunteers on Making the CPA Exam

Passing the U.S. Uniform CPA Examination is one of three crucial requirements to obtaining licensure for one of the most respected professions in the world, the other two being education and experience.

A great deal goes into ensuring the CPA Exam is of the highest quality. A team of more than 75 dedicated volunteers, sitting at the top of the CPA profession and representing areas such as small and large firms, education, government and non-profit, work in collaboration with the AICPA’s professional staff. These volunteers serve as members of the Board of Examiners, the oversight volunteer board for the CPA Exam, and its seven sub-committees, covering such topics as content, scoring and state board of accountancy communications.

The AICPA Communications and Media Channels team had an opportunity to speak with two AICPA volunteers on how their experience has benefited the CPA profession and their careers:

• Wendy Perez, CPA, current chair of the Board of Examiners, retired Ernst & Young partner and past president of the California Board of Accountancy; and
• Mari DeVries, CPA, chair of the CPA Exam’s Content Committee and member of the Board of Examiners, managing shareholder of DeVries CPAs of Arizona, P.C. and past president of the Arizona State Board of Accountancy.

Maximo Mukelabai’s Legacy Paves Way for Future Leaders

Last summer, the CPA profession lost a young champion, a dedicated volunteer and a tenacious leader—Maximo Mukelabai. Only 36, Maximo passed away unexpectedly, leaving behind two young daughters and a loving wife. Maximo was passionate about being a CPA. In fact, his enthusiasm for and devotion to his work, led him to become the youngest professional and first African-American to chair the NCACPA’s board of directors.

4 Tips to Stay in the Loop on your Finances

I recently read a blog post that talked about ‘the loop,’ which is essentially the browsing cycle we go through on the internet. This caused me to reflect upon my own habits on the web when I’m home relaxing in front of the computer. I found out that I have a regular routine of scanning the news, checking for any new sports information, seeing what my friends had for breakfast on social media and ensuring any emails are responded to promptly. I do this two or three times on an average night and as many as a dozen times on the weekends (please don’t judge me).

However, I’ve recently made it a point to expand the loop at least once daily to include checking my bank account and recent credit card spending, as well as my 401(k) and investment portfolio. Because as Jordan Amin, CPA, chair of the National CPA Financial Literacy Commission puts it, “the first rule of personal finance is be informed.”

You Made It Through Another Tax Season: Now What?

Busy season is over; you made it! And while you may still have to file returns for those clients who needed extensions, you can at least stop sleeping in your office. So now what? Will you take a vacation? Catch up with those clients you had to put on hold? We asked CPA Letter Daily readers those same questions and here is what they had to say:

• 38.90% - Catch up on non-tax clients/services
• 23.01% - Sleep/relax
• 19.36% - Take a vacation
• 7.85% - Remind clients of year-round services and pursue new clients
• 6.76% - Attend a conference/catch up on CPE
• 4.11% - File amended returns

Technology Risks and Rewards: A Balancing Act

The AICPA has long recognized the impact that technology has on the accounting profession. In fact, for over two decades, we’ve been reaching out to members and key stakeholders to better understand how it can be effectively harnessed through our Top Technology Initiatives Survey.

Back in the early 1990s when the survey debuted, the technologies we take for granted today would have been impossible to fathom. In an era when only early adopters had digital answering machines, the idea of a personal computer, which could obtain almost any piece of information in the world was beyond most people’s comprehension. Now, we carry these devices around in our pockets, take pictures with them and call them phones.

What is the Right Penalty to Combat Preparer Fraud?

The day after she gets her W-2s, my aunt arrives at my doorstep with her tax documents and an apology (I’ll explain that part later). It all started years ago when she got a notice saying she owed the Internal Revenue Service money. When my aunt signed her return, she was due a refund, so she couldn’t understand how the IRS was now saying that she could possibly owe anything at all.

4 Leadership Skills That Will Make You Stand Out

In today’s job market, everyone is looking for a way to stand out. There a few key leadership skills that will propel you to the “top of the pile,” whether you’re a seasoned professional or just graduating. This Way to CPA’s latest blog post highlights those leadership lessons and skills that members of Beta Alpha Psi should have upon graduation. These skills can propel your search for a new job and demonstrate your value as an employee:

• Be an effective team player.
• Develop organizational skills.
• Grow leadership abilities.
• Communicate professionally.

CPAs as Market Leaders for Reporting on Service Organization Controls

I want to make you aware of a great marketplace-driven opportunity for the CPA profession. Similar to what is being done in the tax and integrated reporting areas, the AICPA is initiating a comprehensive campaign to support CPAs as the premier choice for reporting on a service organization’s controls and to mark our guidance as the gold standard for such services.

Many of you likely are aware that Statement on Auditing Standards No. 70, Service Organizations, has been transformed to meet the needs of the evolving service organization marketplace. SAS 70’s guidance for service auditors reporting on controls at a service organization relevant to internal control over financial reporting of the service organization’s customers was moved to Statement on Standards for Attestation Engagement No. 16, Reporting on Controls at a Service Organization. Reporting on controls related to subject matter other than internal control over financial reporting (such as the security, availability or processing integrity of a system, or the confidentiality or privacy of the information processed by that system) became a new attestation engagement.

Are Your Employees Financially Fit?

As in past years and with previous presidents, President Obama proclaimed this April as National Financial Capability Month.  Financial capability, referred more frequently to financial literacy, means possessing the financial skills and knowledge required to confidently make smart decisions on a variety of financial matters.  One can fairly assume that CPAs possess these necessary skills, but what about your non-CPA colleagues and co-workers?  This month, the findings of several annual surveys are released which highlight the current state of American’s finances, and based on some of this year’s results the financial capability of the average American worker is unfortunately low. 

5 Valuable CGMA Resources for Business People

The AICPA and CIMA continue to make available valuable management accounting reports and tools available for CPA, CGMAs and those considering the CGMA. Check out the following to help you develop new skills and bring best practices to your organization.

In the News: Tax Tips for Procrastinators

I’m a procrastinator by nature. I can’t help it. I wait until the last possible second to do things - even important things that I know I need to do, like file my taxes. Many of you reading this may be in the same boat as me, staring at the calendar and wondering how it’s possible you still haven’t gotten around to filing yet.

I hear you, and I also hear the clock ticking as it counts down to the April 17 deadline.

As luck would have it the AICPA has helpfully compiled the Ten Top Last Minute Tax Tips  to help get us through the process as painlessly as possible. In fact, one of the most helpful last minute tax tips for me was the news that I can have my CPA e-file for me. So this year, even though I waited until the last minute I won’t have to sprint up the steps of the Post Office just to make the deadline, as I have in years past.

The Future of Broker-Dealer Audits

The AICPA has a long history of advocacy on behalf of the public interest, including investors and the markets. Our advocacy regarding the regulation of the auditors of broker-dealers is a good case in point.

Under the Dodd-Frank Act, the Public Company Accounting Oversight Board was given the authority to conduct inspections of auditors of broker-dealers.  The AICPA has strongly supported inspection of auditors of broker-dealers that clear, carry and have custody of client funds, given the serious consequences for investors and markets when fraud occurs at these entities. The Institute does not believe, however, that PCAOB registration and inspection should apply to the auditors of introducing or non-carrying broker-dealers, who have no or very limited access to client funds and, as a result, do not pose the kind of risk to investors or the markets that would warrant PCAOB oversight.

Creating a Professional Development Plan

Do you have a current professional development plan in place or are you typically rushing to earn CPE credits before your license renewal deadline?

The best way to ensure you are making the most of continuing education is through professional development planning, an often-overlooked and under-practiced activity. As a professional, consider integrating a professional development plan into all stages of your career planning. As CPAs, once we earn our license, we commit to lifelong learning. Many of us have the first few years of our professional development courses mapped out for us, but ultimately each of us are responsible for determining what we need to learn and for managing our own CPE activity. We must take part in webinars, conferences, or course work to meet these mandatory CPE requirements. However, beyond the requisite credit hours, what we focus on and learn is entirely up to us.

5 Ways to Lose Money on Your Engagements

As CPAs we are experts in determining profitability and well aware of the components that go into it.  We do a great job coaching clients in the manufacturing or construction business on the factors they need to manage in order to improve or maintain margin on a product or construction job. Yet despite our coaching, many great clients continue to experience eroding margins year to year. Their attention to what it takes to manage profitability seems to fade away. For us who are CPA firm business owners, we are no different. Owning a business, including a CPA firm, is full of distractions, time demands, fires to extinguish, dates and people to manage, new compliance demands and complexities, etc. Like our clients, we know what we should be doing, but the pressures of the busy season somehow cause us to take our eye off the ball.

Here is my list of the top five ways to erode the profitability of CPA firm engagements.

In the News: Accounting named one of the Happiest Jobs in America

We’ve got a lot of big things on the horizon at the AICPA: April Financial Literacy Month (we’ll be releasing survey results on the financial state of Americans) and in mid-May, we’ll be celebrating the 125^th Anniversary of the AICPA at our Spring Council meeting in Washington D.C.

Which is not to say that we’ve haven’t been busy lately! Just in the last week we released the results of our CGMA Global Economic Forecast and Barry Melancon, CPA, CGMA, president and CEO of the AICPA, testified before the House Capital Markets Subcommittee Accounting and Auditing Oversight Hearing. Melancon told members of the subcommittee that AICPA supports a strong, balanced and independent regulatory structure that protects investors but does not restrict the flow of capital.

During busy season and year-round, you can keep abreast of all the most important AICPA news by subscribing to the Media Relations RSS feed or following @AICPANews on Twitter. On to news of note from the last few days.

3 Tips for Opening the Doors to Future Leaders

As we celebrate National Women’s History Month, CPAs can take pride in knowing that women have maintained a solid foothold in the profession since the early 1980s. Not only that, women have represented half of all accounting undergraduate and graduate students since the early 1990s. Men and women share credit for opening the doors of the profession to ensure that all top talent can enter and thrive. However, there is one place where the numbers are still skewed male: at the partner level in CPA firms. One goal of the AICPA Women’s Initiatives Executive Committee is to call attention to this issue and offer solutions to firms and professionals on why and how to drive change.

Tax Season: An Opportunity for Financial Literacy Lessons

The end of tax season is fast approaching, and CPAs everywhere are no doubt looking forward to the end of their busiest time of the year. Although I bashfully admit that my returns still have yet to be filed, I see this time of year as a prime opportunity for me to take a good look at my finances. Sure I keep the typical year-round budget, and do my best keep my finances in check, but there are always places for improvement. Since joining team AICPA, I have realized, more than ever, that year-round tax planning can truly help prepare you for life changes, while staying on track to achieve financial goals.

Doing the Right Thing…When Tax Ethics Get Murky

I often get phone calls from members who are troubled by a professional ethics issue. “Ed, I have a conflict with a client; I don’t trust him.” Or, “I just engaged with a new client and I suspect the old accountant of doing something wrong; should I turn her in?”  The scenarios change but in the end, they always ask: “What should I do?”  And I always tell them: “I can’t tell you what to do!”  Really, it comes down to a matter of ethics and who am I to tell someone how to behave?

Over the years, while teaching classes on subjects like the AICPA’s enforceable tax ethics, the Statements on Standards for Tax Services, or the Internal Revenue Services’ Circular 230, I often ask the participants to define ethics.  “Guided by a code of conduct,”  “acting with integrity,” “having a moral code,” “moral principles that govern a person’s behavior,” or “living your life with high values” are examples of what I’ve heard.  The definition that resonates best with me is “doing the right thing.” 

Key to a Successful Career: Lifelong Education

This Way to CPA recently launched a new blogging feature on the community section of their website. Blog posts cover a range of topics, including Careers and Internships, CPA Exam and Licensure, and College and Grad School and are authored by CPAs from the AICPA’s Student Recruitment Committee. The latest post analyzes the importance of committing to lifelong learning. Not just through CPE, as CPAs and other professionals are required to complete, but by broadening your horizons. The author, Brian Beckett, CPA, an investment accounting analyst and MBA student, explains that even just reading The Wall Street Journal or CPA Letter Daily, requires your brain to think in different ways, keeping you on your toes. Lifelong learning is also the gateway to a successful career. The information, Brian explains, you gain from learning outside your day-to-day business could come in handy in future business decisions. Read more about Learning to Learn: How Small Actions Can Lead to Big Career Payoffs.

Scott Moore, Senior Manager - College & University Initiatives, American Institute of CPAs. Scott manages the AICPA’s national programs to encourage the best and the brightest college students to pursue careers in the accounting profession and ultimately become CPA's.

Related articles

• Make the Most of Your Professional Development (aicpa.org)
• 5 Essential CPA Exam Study Resources (aicpa.org)

5 Essential CPA Exam Study Resources

During tax season, preparing for the CPA Exam can be even more challenging than usual. Here are a few resources for that will help CPA candidates with the preparation process.

• Uniform CPA Exam Candidate Bulletin:  Aside from being a great general resource for any CPA candidate, the Candidate Bulletin is especially useful when you’re getting close to your testing date.  A few days before taking the CPA Exam, be sure to review the section - Step 4: Take Your Examination – for information on the test center check-in process, ID requirements and time allocation. All it takes is a quick review to help you focus on actually taking the CPA Exam.