Trends and Hot Topics Feed

trends and hot topics

Covering a wide array of topics, Trends and Hot Topics keeps an eye on what is new in the CPA profession and around the world.

 

 

 

 

 


 

Trumping the Patent Trolls

Patent-stampEver found yourself wondering why all the fuss over patent trolls? Aren’t patent holders entitled to invention protection and the right to license their discovery to others who manufacture and sell it? Of course. But, in a disturbing trend, many patent assertion entities – better known as patent trolls – are using litigation to wrongfully target end-users of such products. 

If, for example, your office has a copier with a “scan to email” function, your company or employer could be at risk. As holders of vague patents, some PAEs have sent letters to small businesses, demanding approximately $1,000 per employee for the use of such scanners. The demand letter’s message: settle or be sued. Most choose to settle, primarily because of concerns about the cost of a defense.

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Re-envisioning the CFO as the Chief Future Officer

Chief-future-officerAre you ready to be the chief future officer? That is what I imagine to be the ultimate role of today’s CFO, someone who offers the kind of multifaceted, high-end skills that organizations can use to achieve their strategic financial goals and drive innovation.

The role of the CFO is already undergoing rapid change. In fact, 66% of global CFOs don’t believe the current definition of that title adequately captures the diversity of their position, according to an Ernst & Young study. Finding the skills needed to move an organization forward is going to be an ongoing challenge, however. In an Accenture survey, 40% of decision makers in Europe believed that the future success of their organizations depended on high-end analytical skills, but only 15% said they had these skills. So-called soft skills are also vital. IBM research has found that CEOs believe the critical skills for future success are being collaborative, communicative and creative.

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Happy St. Patrick’s Day – The Luck of the Beer Tax Continues

LeprechaunIt should surprise no one that the amount of Guinness consumed worldwide on St. Patrick’s Day more than doubles, to approximately 13 million pints. Celebrations are held far and wide from Australia to Russia to the International Space Station, where astronauts like Catherine Coleman play Irish music in space.

As a Maloney and a Fitzpatrick, I love the idea of a global Irish celebration - makes the world feel a wee bit friendlier (even if the saint being honored is technically Scottish).

The U.S. accounts for much of the increase in St. Patrick’s Day Guinness consumption. But while the enthusiasm may be spread out across the  country, the excise tax on beer collected by each state varies considerably.

The map created by the Tax Foundation shows an interesting pattern - a low-tax band across the middle of the country, with a few Western states collecting the least, while southern states charge the most, with Tennessee coming in first at $1.17 per gallon. The Mid-Atlantic area defies categorization – my state of Virginia is in the middle but neighboring Maryland ranks much higher.

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The Urge to Merge Continues

With 2013 in our rear view mirror, many want to know what the merger and acquisition marketplace will look like in 2014. I have been involved in anywhere from 75 to 100 M&A deals a year over the last 4-5 years, and over 1000 deals since 1990. My firm’s involvement may include deals which we develop ourselves, or deals in which we are brought in to consult upon.

What we’re seeing is a very steady M&A market with potential for growth in the future. With baby boomers gearing up for retirement, the M&A market among CPA firms could certainly heat up and my firm is fielding a number of calls from practitioners looking for guidance.

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Capturing Online Sales and Use Tax: The Battle Continues

EcommerceHave you purchased something online this past year, month or day?  You probably looked at the cost of the item purchased, but did you pay attention to whether you paid taxes on your purchases?  Sorry to tell you this, but just because a sales tax was not charged does not mean you don’t owe a tax on the transaction.

All states that impose sales taxes also require purchasers to remit use tax on any taxable purchases if sales tax is not paid. Many, if not most, consumers are unaware of the use tax and, therefore, do not comply.  It is almost impossible for state taxing authorities to enforce these laws with respect to individual consumers (but businesses often are audited for use tax). 

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PowerPivot: A Game Changer for Excel Pivot Table Users

PowerPivotAs a CPA and a power Excel user, my goal in Excel has always been to create useful reports and analysis for audit documentation as well as to meet my client’s need for information and reports. I quickly discovered that the best tool in Excel to meet my goals was to learn and master the capabilities of pivot tables. Learning pivot tables has increased my efficiency in almost every project that I have worked on and has been the tool I most often turn to in order to complete projects in a timely manner.

As great as pivot tables are they do have limitations, for example pivot tables do not work with data sets larger than one million rows. Pivot tables also can only work on one data set at a time. If I want to create a single report from multiple data sets, I must use V-Lookup formulas. If I want to perform calculations in my pivot table, I must use Calculated Items and Calculated Fields, which are cumbersome to work with and are not well supported by the Microsoft team.

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Second Screen Gold: #Sochi2014

Olympics-sochiSocial media has the power to connect people across the globe who are interested in a common topic. Over the past few weeks, millions of users flocked to social media to share insights about the 2014 Winter Olympics in Sochi. 

As with other high-profile televised events, using social media gave viewers the opportunity to create a very interesting ‘second screen’ experience during the Olympic Games.  According to Mashable, the term ‘second screen’ refers to “…the use of an additional monitor (e.g. tablet, smartphone) while watching television. It allows the audience to interact with what they’re consuming whether it’s a TV show, video game or movie.”

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A Look Inside the Oscars

Oscar-statueWe are now a couple days away from one of the most watched and tweeted awards shows, the Academy Awards. Earlier this week the AICPA's CPA Letter Daily polled its readers to see which movie they thought would win the Best Picture Oscar. “12 Years a Slave” was the top vote getter, with 31.71% of the vote. Coming in next was “American Hustle” (19.59%) followed by “Gravity” (13.79%). We will just have to wait and see if the readers predicted correctly.

A highlight of most award shows, at least for CPAs, is not necessarily who won what or what they were wearing, but rather those 30 seconds of fame for the CPAs featured on stage during the national broadcast. Most years the CPAs wave from the stage, sporting briefcases embossed with their firm’s name. However, some years, they get a slightly different mention, as the cast of “The Big Bang Theory” gave CPAs two years ago at the Emmys.

In January, PwC, which has overseen the balloting process for the Oscars for the last 80 years, announced that Brian Cullinan, CPA, chair of PwC’s U.S. board of partners and managing partner of PwC’s Southern California practice, joined the leadership team managing the 2014 balloting process alongside Rick Rosas, CPA. They will be the only two people in the world who know the identities of the Oscar winners before they are revealed on Sunday.

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Hidden Traps for Small Employer HRAs in 2014

Surprised-businessLike many small employers with under 50 full-time equivalent employees, I thought my company would be relatively unaffected by the Affordable Care Act. I was surprised to discover that my company Healthcare Reimbursement Arrangement is legal, but is now completely unworkable.

I have offered for several years to full-time employees a standalone HRA for which they get pre-tax reimbursements for out-of-pocket medical expenses and health insurance premiums, up to the annual predetermined dollar limit. HRAs generally fall under Code Section 105(b) and are considered employer self-insured accident or health plans. By design, HRA plans have dollar limits on annual and lifetime benefits provided to participants. However, to be a qualified group health plan in 2014, the plan must provide minimum essential health benefits without annual or lifetime dollar limits. My company’s HRA fails to meet this basic requirement. 

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A Golden Opportunity: Performing IPSAs of Conflict Minerals Reports

Mound-of-goldHave you read about conflict minerals in the news? Apple Inc. recently stated in its supplier responsibility report that the company’s entire supply of tantalum used in its products was verified as conflict free, as reported by the Los Angeles Times. The report also noted that “we’re pushing our suppliers of tin, tungsten, and gold just as hard to use verified sources.”

This news relates to the U.S. Securities and Exchange Commission’s final rule issued in August 2012 which required public companies to disclose their use of “conflict minerals” in their manufacturing processes and supply chains. The term “conflict minerals” describes certain minerals—tantalum, tungsten, tin and gold—that are mined in the Democratic Republic of the Congo and its surrounding areas. Public companies might be required to file a Conflict Minerals Report, which may also be subject to an Independent Private Sector Audit. As a CPA, you are the premier provider of such an audit and the AICPA provides resources to help with inquiries you may be receiving from your clients.

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How Would a U.S. Bitcoin Transaction be Taxed?

Accepting-bitcoinsOverstock.com, the Sacramento Kings and a few countries have all taken positions on what they will do with Bitcoins.  The two major Bitcoin positions are treatment of it as property, as Singapore has recently adopted, or as currency, as Germany has chosen.  

Much has been written on the creation of the Bitcoin, and its rise in popularity – and value – from 5 cents in 2010 to over $1,200 in 2013.  Bitcoins were born from combining electronic commerce and communications with mathematics, cryptography and privacy – as they only exist when your computer is functioning (or your iPad, smartphone, tablet, smart watch or Google glasses!), and they have no intrinsic value, save for what value people are willing to give.

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Downton Abbey’s Death Duty Explained

Highclere CastleHighclere Castle (Photo credit: Wikipedia)

Spoiler Alert: This blog post contains spoilers if you have not seen the first episode of season four of “Downton Abbey.”

“Downton Abbey,” the British period drama that takes place in the early 1900s, has made death taxes… fun. If you are not familiar with the show, I will set it up for you. The Crawleys are part of the British aristocracy as the Earl and Countess of Grantham. Robert Crawley is the fifth Earl of Grantham and has only one heir, Matthew Crawley. Matthew is Robert’s third cousin, once removed (at this time in history, women still could not inherit property or title). In season three, Matthew marries Mary, Robert’s daughter, to keep the estate, title and money in Robert’s direct line of descent. Almost immediately after the birth of Matthew and Mary’s son, Matthew dies in a car accident.

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Super Bowl Was More than Just a Game to Celebrate

Super-bowl-xlviii-logoYesterday’s Super Bowl was a chance for players and fans to celebrate the culmination of another great season. For the past three years, CPA Letter Daily readers have been asked to pick the winner of the Super Bowl. Readers correctly predicted the winners in 2011 (Packers) and 2012 (Giants), but not for 2013 (readers selected the 49ers over the Ravens). This year CPA Letter Daily readers overwhelming chose the Denver Broncos as the Super Bowl champions (73.34%). Unfortunately, their prediction was wrong as the Seattle Seahawks trounced the Broncos.

Super Bowl XLVIII was more than just a triumph for the Seahawks. It also was a celebration of a number of football firsts. It was the first Super Bowl to be held outdoors in a cold weather state, to be hosted by two states and to have a majority of attendees arrive via mass transit.

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In the News: The State of Accounting Jobs

We-are-hiringI don’t really recall my mindset when applying to college (it’s been more than five 15 years), but I can confidently say I should have spent more time thinking about my future employment prospects. Planning ahead would have allowed me to spend less time in college worrying that it would be difficult to find a job related to my major.

Luckily for high school students interested in accounting and college students planning to become CPAs, the job-related news about the profession lately has been very positive.

According to data from a survey conducted in November 2013 by the National Association of Colleges and Employers, 61% of accounting majors from the class of 2013 had received at least one job offer – the third highest percentage of any major.

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Super Bowl’s Hidden Treasure… the Jock Tax

Super-bowl-hotelAs the focus here in New Jersey switches from “Bridgegate” to “tailgate,” we think about the things that we love best about the Super Bowl. A few of mine include eating wings, drinking beer and, of course, watching those witty commercials. However, as the players gear up to battle the elements this week, one other thing separates this Super Bowl from the others: the proverbial taxman. Many states impose an income tax on nonresidents’ earnings and New Jersey is one of them. To professional athletes, it is known as the “jock tax.” 

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Interview with Team Who Wrote Net Investment Income Tax

Bob Keebler interviews David Kirk and Adrienne Mikolshek, part of the team who wrote the Net Investment Income Tax regulations, to help members understand the new IRS Form 8960, Net Investment Income Tax for Individuals, Estates and Trusts and the draft instructions. Access more resources in the Planning After ATRA and NIIT Toolkit, including more podcasts, a customizable letter to send to clients to illustrate why it is important that they meet with you and new charts by Bob Keebler as well as webcast recordings and Forefield Advisor alerts/videos and the complete four-volume set of The CPA’s Guide to Financial & Estate Planning, recently updated for ATRA and NIIT and much more.

Interview with David Kirk and Adrienne Mikolashek

 

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Explore the New IRS Form for Net Investment Income Tax

Bob Keebler goes line by line through Form 8960, Net Investment Income Tax for Individual, Estates and Trusts, to help members understand key elements they need to know for tax season. Access more resources in the Planning After ATRA and NIIT Toolkit, including more podcasts, a customizable letter to send to clients to illustrate why it is important that they meet with you and new charts by Bob Keebler as well as webcast recordings and Forefield Advisor alerts/videos and the complete four-volume set of The CPA’s Guide to Financial & Estate Planning, recently updated for ATRA and NIIT, and much more. (Email subscribers can listen to the podcast on our website.)

IRS Form 8960 Draft Instructions

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Get “Unstuck” in 2014

Fish-getting-unstuckLike so many of you, I am passionate about both leadership and learning. Recently, the thought struck me that on occasion, my desire for personal and professional growth might actually get in the way of my leadership and learning.

I’m sure you can relate to the feeling of “sprinting to the finish” on various projects. But how often do you really feel like you’ve reached the finish line? Instead, what if we’re actually like hamsters on a wheel, essentially stuck in one place? This was an “ah ha” moment for me—a realization that my logical mind had some trouble laying bare.

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How CPAs Can Prepare Clients for Healthcare Reform

Health-care-fileCurrently, there is a massive amount of confusion in the business community and among consumers – the very same people that are CPAs in public accounting’s clients – with the implementation of the Affordable Care Act or Obamacare. Change, of course, creates opportunity, and knowledgeable CPAs can expand their role as trusted advisers by gaining an understanding of the implications of the ACA on businesses and individuals.

The changes in insurance primarily affect two client types: small business and individuals who do not get insurance from their employer. This latter group would include self-employed individuals and their families who do not qualify under the definition of “small business” for purposes of the ACA’s insurance market rules. There are provisions for large employers that go into effect in 2015.

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Women and Leadership: The Path Not Yet Taken

Business-womenWhat are the consequences if organizations aren’t making the most of up to half of their potential talent?  Unfortunately, that’s the case in many firms, according to recent AICPA trends data, which found that the percentage of women in leadership positions in the profession has actually dropped from 23% in 2010 to 19% today. As you can imagine, this trend was a hot topic of conversation at the AICPA Women’s Global Leadership Summit, which was held in Washington D.C. in October. Those who attended the Summit found those statistics particularly troubling because among those present were a number of very talented and vibrant women. If firms and companies are not working to create opportunities for talented women to live up to their full potential, then these organizations are missing out on a lot.

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Trust But Verify – Another Perspective on Comfort Letters

Back in March, AICPA Senior Vice President Susan Coffey wrote about the dangers of providing client comfort letters. Since then, we’ve been hearing from more and more members that they are seeing a rise in requests from third parties for some sort of assurance on client accounting and tax information, or financial condition. I think Edward Karl said it best in CPAs and Comfort Letters: The New Chocolate (from the July edition/DC Currents column of The Tax Adviser) when he described them as requests for “verification, confirmation, certification, corroboration, authentication or substantiation of their clients’ financial information.” You name it, we’ve been asked to validate it. On the bright side, an increase in these requests confirms the faith, confidence and trust that business owners, decision makers and the public have in CPAs.

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Top Blog Posts of 2013: Vote for Your Favorite

Top-10

As 2013 comes to a close, I thought it would be interesting to see what topics “moved” and “shaked” the CPA profession this year. Specifically, we thought you would be interested in the AICPA Insights blog posts that most resonated with you and your peers, as measured by pageviews. Surprisingly, no one particular topic overly dominated this list. Additionally, most of these blog posts originated in 2013, but one actually went live in 2012 and had enough staying power to carry over to 2013. See our top stories and catch up on the year's news below and then vote for the one you like best, or write in your own top choice!

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Hot Topics and FAQs from the A&A Technical Hotline

The AICPA Technical Hotline provides non-authoritative advice to members on matters of accounting and financial reporting, audit, attest, compilation and review service standards. This podcast, the AICPA Insights Live webcast on Nov. 22, addresses some of the more commonly asked questions over the past year in the areas of audit, attest, compilation and review engagements. Highlights include the new clarified audit standards, verification requests, supplementary information and Service Organization Controls reporting. (Email subscribers can listen to the podcast on our website).

Hot Topics and FAQs from the A&A Technical Hotline

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Avoid These Holiday Social Media Scams

Scam-alertAccording to USA Today, the holiday season is a big time for online scams, and this year the focus will be on phones and social media. While most of us can spot spam in our email inbox, social networking scams are becoming more common and aren’t quite as easy to detect. Research shows one in 10 users have fallen for a social media scam. And to be honest with you, I am one of those who have been duped. It seemed so simple: share an image on Instagram, add a hashtag and BAM…free Ray Bans. Needless to say, I never received the sunglasses.  Luckily, I quickly came to my senses and changed my password.

It’s easy to get caught up in a bogus offer, but remember if it seems too easy to be true…it likely is!

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Volcker Rule Could Affect Community Bank's Year End Bottom Line

English: Paul Volcker, former head of the Fede...Paul Volcker, former head of the Federal Reserve Board . (Photo credit: Wikipedia)

On Dec. 10, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission released their rule “Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds,” otherwise known as the Volcker Rule. This rule has some real implications on the banking industry, including community banks, of which CPAs should be aware.

Under the Volcker rule, ownership interests in covered funds (in other words, investments) will not be permissible and will have to be divested by 2015. Ownership interests in covered funds subject to the Volcker rule include many pooled trust preferred collateralized debt obligations, certain collateralized loan obligations and possibly Real Estate Mortgage Investment Conduits. At this conjuncture, the full scope of investments impacted is unknown.

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Q&A with Barry Melancon, CPA, CGMA, AICPA President & CEO

Q&AWhat opportunities and challenges does the head of the AICPA foresee for the CPA profession in 2014? What were the profession’s significant achievements in 2013? Barry C. Melancon, CPA, CGMA, AICPA president and CEO, answers these questions and offers insights on how the profession will continue to adapt to today’s changing environment, addressing clients’ and employer’s needs. Citing successes with regulation, legislation, recruitment and positioning the profession for the future, Barry strongly believes CPAs will build on a solid foundation.

1. What were the AICPA’s legislative or regulatory priorities this past year and what’s in store for 2014?

We continued to have success in the advocacy area in 2013. In one significant victory for the profession and the public, the Securities and Exchange Commission exempted CPAs from registration as municipal advisers when they are providing certain accounting or attest services. We urged the SEC to exempt CPAs from the definition of municipal advisers after it had indicated that anyone performing accounting services for governments would be defined as a “municipal adviser.” It was critical that our voices be heard on this issue because such a broad definition would have made it more difficult for CPAs to serve governments and potential investors without taking on unnecessary and duplicative costs or compliance burdens.

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CPAs in Business and Industry Optimistic for 2014 Revenue Growth

Revenue-growth-2014The end of the year is always a good time to reflect on the past and consider the future. So perhaps it’s no surprise that the latest AICPA Business and Industry Economic Outlook Survey has inspired me to share some of my reflections and thoughts with you.

Thinking back to the fourth quarter of 2012, CPAs in industry were deeply concerned about the economy, especially with the “fiscal cliff” looming large. Fortunately, we had a last minute resolution to the dilemma on December 31, 2012 and concerns about the overall economy and politics abated somewhat in the first half of 2013. Optimism about the US economy improved, and the number of CPAs saying they were optimistic about their companies and having plans to expand also increased.

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Latest Trends Affecting CPAs

In our last live blog from the 2013 AICPA Insights Live webcast series, Jim Metzler, CPA, AICPA Vice President - Small Firm Interests, Public Practice and Global Alliances, discusses the trends affecting CPAs, the challenges and opportunities practitioners face, as well as best practices being used at successful firms across the country. (Email subscribers: Read the live blog on our website.) Don't forget to register for the last AICPA Insights Live webcast, Worst IT Practices CPAs Can Advise Businesses to Avoid, 1 to 2 p.m. ET on Dec. 20.

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In the News: Year-End Tax Moves for Businesses and Individuals

TaxesAs the calendar turns to December, AICPA experts have been speaking to reporters to educate the public about tax moves they can make before the end of the year. A number of these tips involve tax breaks that will either expire, or whose futures are uncertain and the steps that businesses, individuals and homeowners can take now to save themselves money when they file their 2013 return.

Businesses

Jeffrey Porter, chairman of the AICPA’s tax executive committee, spoke to CFO.com about corporate tax provisions which are set to expire after 2013.

According to Porter, one of the most important of the temporary tax provisions set to expire after 2013 is the 50 percent bonus depreciation, which was enacted as part of economic-stimulus legislation.

“Let’s say you’re a CFO, and you know you need to purchase a million-dollar piece of equipment. If you purchase it before the end of the year, you can get a $600,000 write-off in the first year,” says Porter.

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PCC Standards for Goodwill: What Valuation Specialists Need to Know

Valuation-specialists-goodwillA new standard establishing how private companies account for goodwill is not expected to cause immediate challenges for valuation specialists, but the impact could be more significant if the new rules are adopted for public companies down the road.

The standard is the work of the Private Company Council, an advisory group to the Financial Accounting Standards Board formed last year to address possible necessary changes to U.S. GAAP for non-issuers.  On Nov. 25, the FASB endorsed a PCC proposal to provide alternative accounting for goodwill by private companies. Goodwill typically arises from business combinations. In financial reporting, goodwill is the residual amount remaining after the fair values of all identified assets acquired less liabilities assumed have been subtracted from the acquisition price.

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Running Your Business Like an Olympic Athlete

Turin-olympic-ice-skatersOlympic athletes generally train every day – continuously monitoring their progress to make sure they're performing to the best of their abilities. Can you imagine an Olympic athlete training once a year and then trying to compete against those who kept to a strict, regimented training schedule?  Like top athletes, successful businesses need to keep a constant pulse on how they're doing so they can address what's working and what needs to be tweaked – in order to always be on top of their game.

Companies can add value to their activities by utilizing Continuous Auditing and Monitoring, which is supported by tools and programs that can assist in mitigating risks and detecting fraud. Additionally, Continuous Auditing and Monitoring provides a powerful deterrent to those tempted to commit fraud, as these functions can take place frequently or continuously throughout the year. 

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Will Your Clients or Customers Pay in Bitcoin?

Alternative Currency Could Change Financial Landscape

In celebration of the AICPA’s 125 anniversary last year, we produced a powerful retrospective called Evolution of a Profession. The six-minute video traced the accounting profession’s changes from its origins 8,000 years ago through the present day.

Within that evolution were the notions of currency and exchange. Over time, society has changed the various ways goods and services are purchased. Hard as it may be to believe, at one point the primary currency was clams. The same is true of livestock, land and spices. All eventually gave way to something else as our forms of money have been “refined” over and over again.

Bitcoin Timeline

  • Jan. 2009 - First Bitcoin transaction
  • Jul. 2013 - Thailand officials declare the currency illegal in all its aspects
  • Aug. 2013 - U.S. federal judge rules Bitcoin is a currency
  • Oct. 2013 - $28 million in Bitcoins seized during raid on an online drug marketplace
  • Nov. 2013 - Cyprus’ largest university says it will accept Bitcoin as payment for tuition and school fees
  • Dec. 2013 - China bans the country’s financial institutions from handling Bitcoin transactions

Four years ago, a new alternative currency emerged and the accounting profession needs to watch how it develops going forward. It’s a virtual currency known as Bitcoin. Dozens of virtual currencies exist but Bitcoin has garnered the most attention. The news media has been covering the currency in earnest since the spring, including its growing acceptance among businesses and even a foreign university.

What does that mean for our profession? First, if Bitcoin were to become a mainstream currency option, firms would have to consider clients using Bitcoin as a form of payment for services, and a business might want to accept Bitcoins for purchases of its products.  

More broadly, how might financial statement preparation and assurance on those statements need to adapt? Bitcoin is not only a currency, it is also a commodity – one with a finite supply (currently 12 million units and continually increasing to a maximum of 21 million units).  Therefore, depending on the demand for it at any given time, its value could fluctuate wildly – even within the same day. In 2013 alone, a single Bitcoin unit was valued at less than $20 and hit a high of more than $1,000 in late November. So, how would a CPA value that money, and is it even an asset? And since Bitcoin largely operates through online exchanges, it functions outside of the traditional banking system, where balances and transactions can easily be confirmed.  In terms of taxes, the Internal Revenue Service has said Bitcoin transactions could fall under several categories: property, financial instrument, foreign currency or barter.

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We Give Thanks for These Apps, Blogs and Social Media Tools

Mobile-appsIt’s the season of thankfulness. And adding to the list of family, health and happiness, I’d like to share some of the blogs, apps and social media channels that we really appreciate.  Friends and coworkers helped me compile a list of technology tips and tricks that make work and life a little easier.

Mobile Apps

Dan Nestle, senior communications manager at the AICPA, likes "Flipboard and Zite for news gathering."

Chris Ekimoff, CPA, CFE has two favorites: a travel app, TripIt, and, "of course, Thanksgiving wouldn’t be Thanksgiving without ESPN’s Fantasy Football app."

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“Taxation with Representation” – Where Are We with Tax Reform?

"People who complain about taxes can be divided into two classes: men and women."
-Author Unknown

I gave a test in my last tax reform blog. “What will be the greatest driver of tax reform?” and offered the following possible answers:

  • Bipartisan compromise?
  • Congressional leadership changes?
  • Current events?
  • Revenues?
  • Good tax policy?

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Leaders Eat Last: Why Some Teams Come Together and Others Don't

I am live blogging from the 2013 Digital CPA Conference taking place in D.C., today and tomorrow. Today's live blog is covering Simon Sinek's keynote, Start with Why. Simon is an author and leadership expert. The keynote includes a panel of experts from the CPA profession, including:

  • Tom Hood, CPA, CGMA, CEO Maryland Association of CPAs
  • Rick Solomon, CPA, CGMA, Chief Executive Officer, RAN ONE Americas
  • Rene Lacerte, CEO, Bill.com
  • Chris Ekimoff, CPA, Manager, Investigative Accounting and Financial Litigation, Hilton Worldwide

The best way for a team to confront danger to not only survive but to thrive is...together. When the conditions in our organizations are right, we naturally trust each other and cooperate. But when leaders neglect the environment in which their people must work, politics, silos, cynicism and self-intrest prevail; all things that make it even more difficult for us to work together. The best leaders know how to build those conditions and the best organizations are the ones in which the people work together to confront danger and seize opportunities. And the best part is that these "best conditions," seem to mimic the conditions in which we lived 50,000 years ago. Simon will explain what it takes to create a culture in which people work as they were designed - together. It is under these conditions we are at our natural best. (Email subscribers can view the live blog on our website.)

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Fall Review of State Legislative and Regulatory Issues: Part 2 of 2

Across the county, state legislatures considered numerous issues that impact the CPA profession.  In part two of this two-part post, we review issues dealing with: CPAs providing services for marijuana-related businesses, state board of accountancy reorganizations, sales tax on professional services and peer review.

Marijuana Businesses and CPAs

Colorado-capitolAn issue with implications for the CPA profession centers on the legalization of marijuana for both recreational and medicinal use.  While the sale and use of marijuana is illegal at the federal level, state governments and voters are increasingly showing a willingness, in certain jurisdictions, to decriminalize the drug. In November 2012, voters in Colorado and Washington approved ballot measures legalizing the recreational use of marijuana.  A total of 19 states and the District of Columbia have laws permitting the use of marijuana for medical purposes. The AICPA, with input from the Colorado and Washington state CPA societies, has developed an issue brief that gives an overview of U.S. recreational and medicinal marijuana laws, the current legislative/regulatory environment and information for CPAs considering providing services to businesses that operate in these industries (including a list of questions for CPAs to ask themselves before considering this line of work).

Continue reading "Fall Review of State Legislative and Regulatory Issues: Part 2 of 2" »

Year-End Financial Planning: Bracket Management [PODCAST]

Because of the multi-dimensional tax environment that now exists post-American Taxpayer Relief Act, CPA financial planners must look at the tax impact on clients’ financial plans through a 5 to 10 year horizon. Ordinary income tax rates from the Bush Administration were made permanent. The capital gains rate increased from 15% to 20% for taxpayers with income greater than the threshold amounts. Phase-out of personal exemptions and limitations on itemized deductions (Pease) become critical in managing tax brackets by shifting income and deductions into certain years. This podcast from Bob Keebler provides a overview of theory, strategies and case studies in bracket management. Visit the AICPA PFP Section’s Post ATRA & NIIT Toolkit for more in-depth resources on planning in preparation for year-end. (Email subscribers can listen to the podcast on our website.)

 

Year-End Financial Planning: Bracket Management

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The 3.8% Net Investment Income Tax [PODCAST]

The 3.8% Net Investment Income Tax became effective Jan. 1, 2013, and applies to all taxpayers whose income exceeds a certain threshold amount, thereby raising the marginal income tax rate for affected taxpayers. NIIT includes interest, dividends, annuity distributions, rents, royalties, passive activity income and net capital gain from the disposition of property; it excludes salary, wages, IRA distribution from qualified plans, self-employment income, gain on sale of an active interest in a partnership or S corporation and items which are otherwise excluded or exempt from income under tax law. The threshold amount is the key factor in determining NIIT; thresholds are not inflation protected.

Strategies for reducing net investment income include municipal bonds, tax deferred annuities, life insurance, rental real estate, oil and gas investments, choice of accounting year for estate/trust and timing of estate/trust distributions. Strategies for reducing modified adjusted gross income include Roth IRA conversion, CRTs, non-grantor CLTs, and installment sales. Join Robert Keebler, CPA of Keebler & Associates LLP in this podcast as he walks you through year-end planning for the 3.8% NIIT. Visit the AICPA PFP Section’s Post American Taxpayer Relief Act and NIIT Toolkit for more in-depth resources on planning in preparation for year-end. (Email subscribers can listen to the podcast on our website.)

 

Year End Planning Net Investment Income Tax

 

 

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Spotlight on Health Care Reform with AICPA Insights Live

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

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

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

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Help! I Have a Bad Review on Yelp

This week I had the pleasure of discussing social media with CPAs at a CPAConnect meeting in Nashville, TN. At the end of our session, a gentleman approached me with a very interesting question: “What do you do when you get a negative review on Yelp?”

YelpYelp is a website with local search, social networking and discounted deal content. The site includes business listings, directory information, and user generated reviews. Yelp is increasingly popular for people seeking services, including CPAs. Not sure if anyone has reviewed you or your firm? Do a simple search on the site to find out.

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Finding the Silver Lining in Succession

Succession-planWhen people talk about succession, they tend to focus on issues such as valuations, buyout amounts, deferred compensation, partnership agreements, the development of new leaders and client retention. Not much is said about the emotional side of succession. Let’s face it: As with any transition, succession hurts. Owners struggle with letting go of the business and the relationships they’ve built,  and the new owners struggle to gain a foothold in their new roles.

Even in a well-planned and executed succession, there are a number of events and circumstances that cause some level of discomfort.  Succession tests the personal and leadership strength of the outgoing owner and, when not recognized, can deflate the excitement of the incoming owners and even threaten their future success. If we acknowledge this side up front, we’ll be better able to set ourselves on a smooth and successful journey. So, what tough challenges should we prepare for on the road to succession?

 

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Integrating Retirement Planning with Your CPA Practice

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

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10 Risks Facing Nonprofits [LIVE BLOG]

We thought it only fitting that we live blog from our first AICPA Insights Live webcast. Follow along here or on Twitter at #AICPAInsightsLive. The first webcast in this series covers the top ten risk issues that need to be understood and managed, with practical tips and advice on juggling risks while keeping your mission aloft. (Email subscibers can catch up on the coverage on our website.) Don't miss out on the other webcasts in this series and sign up for the bundle today.

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Federal Government Shutdown - It’s Deja vu All Over Again

Government-closedThere’s an old adage that “there’s nothing new under the sun” and so it is inside the Beltway.  As you are well aware, the federal government suspended most of its operations on Oct. 1 after Congress failed to pass a bill to extend funding to mid-November, the first such shutdown in 17 years. Strong political discourse is alive and well in America and it is part of the price we pay for democracy.  It was that way in 1996 when a shutdown lasted three weeks. Hopefully a compromise can be reached quicker this time around.

On the tax front, with more than 85,000 Internal Revenue Service workers now furloughed until Congress reauthorizes spending, many non-essential IRS functions have shut down, including all taxpayer services, as well as examinations. The closure of taxpayer and practitioner hotlines is particularly challenging for those individuals who must file a Form 1040 by Oct. 15 and need to contact the IRS. Nevertheless, no filing deadlines are postponed and returns must be filed. We have urged the IRS to consider the substantial burden imposed on taxpayers (and practitioners) by the inability to communicate with and obtain information from the IRS.

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The Tax Realities of “Breaking Bad”

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

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

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EXTRA! EXTRA! Meet the Brains Behind @AICPANews

Hello_my_name_isAICPANewsTwitter has increasingly become the go-to place for industry news. Recently I sat down with James Schiavone, AICPA media relations manager and the brains behind the @AICPANews Twitter account, to discuss what he has learned from managing this thriving social media channel.

Q) The @AICPANews account was stated in March of 2009. More than 3,500 tweets and 17,000 followers later, what have you learned?

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Beyond Compliance: The Benefits of XBRL

XBRL-tabletData is the next great commodity resource. The equivalent of all the data that existed up to 2003 is now generated in two days, and 90% of the world’s total data was created in the last two years alone. Now comes a powerful new form of data, one that speaks the language of business. By the nature of its format, XRBL, or eXtensible Business Reporting Language, brings transparency to business information so investors can analyze data more easily and make informed investment decisions.

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

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

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

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In the News: CPAs Predict Uptick in Hiring

AICPA Economic Outlook SurveyIt is--and has been--a tough time to look for a job in the United States (unless, of course, you are an accounting graduate). However, there may be some hope on the horizon for the legions of unemployed.

Business executives--while still expressing caution--continue to raise their expectations for hiring in the coming year. That’s according to the third quarter AICPA Economic Outlook Survey, a survey of 1,228 CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the survey—remained unchanged from last quarter at 69 points. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment.

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IRS Guidance Following DOMA Decision

In the wake of the Supreme Court’s Windsor decision invalidating a portion of the Defense of Marriage Act, the Treasury Department and the Internal Revenue Service announced on Aug. 29 that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also issued a revenue ruling (Rev. Rul. 2013-17) and FAQs providing guidance on the topic.

In short, regardless of what state the same-sex couple currently lives in, if they were legally married in a jurisdiction that recognizes same-sex marriages as legal and valid, then same-sex spouses are married for all federal tax purposes. This podcast from Bob Keebler covers Revenue Ruling 2013-17, background on the DOMA decision, income, estate and gift tax planning implications, as well as portability, IRAs and retirement plans.

IRS Guidance Following DOMA Decision

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.  

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