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.

 

 

 

 

 


 

Would You Recommend the CPA Profession to Your Kid?

Professional-kidsWould you recommend the CPA profession to your kid? This is a question I used to ask the partners of my firm in Buffalo. I did our firm’s recruiting and felt this was an important question, because every new hire was someone’s kid. And in a small market like Buffalo, chances were, I actually knew their parents. I had to look those parents in the eye and tell them that when their child accepted a job with my firm, it was the right career move. I felt it was important for the partners to understand, if there was something in the firm that wasn’t good enough for their own kid, they had the power to fix it.

That same question sparked some lively discussion when I posed it to a group at the AICPA’s E.D.G.E. conference in Austin, Texas, this month. It goes without saying that the CPA profession provides virtually unlimited opportunities, offering a solid set of core competencies that can be put to work in a wide range of situations. Our CPA training and credential have formed a solid stepping stone for many of us, myself certainly included, to a very rewarding career.

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New Gmail Tabs Could Hinder Efforts to Reach Your Customers

Not too long ago, Gmail started rolling out a new layout which features different tabs to group your emails. By default, Gmail users see three tabs: Primary, Social and Promotions. Users can now find their emails on one of these tabs, based on Gmail’s settings. This change doesn’t just affect Gmail through your browser, but also through the Gmail app on your smartphone. (If you access your Gmail through IMAP or Exchange settings on your smartphone, you will still see all emails in one inbox.) Google says it made this change to give users more control of their inbox.

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Half of U.S. Adults Fail ‘Health Insurance 101’

Healthcare-questionsI dislike going to the doctor – who doesn’t? However, in recent years I’ve found that I dislike the confusion I feel when I attempt to understand the vagaries of my healthcare provider’s policies even more. While understanding the policies can be frustrating, not understanding the basic terms of health insurance plans can lead to bad decision making and wasted dollars. And, unfortunately, a recent AICPA survey found that many Americans don’t understand these basic terms.

The telephone survey, conducted late last month for the AICPA by Harris Interactive, found that more than half, 51 percent of respondents, could not accurately identify at least one of three common health insurance terms: premium, deductible and copay.

A third, 34 percent, thought a premium was an expense at the time of receiving medical service or a prescription; more than a quarter, 27 percent, thought a copay was the cost of obtaining insurance; and 12 percent did not know a deductible is the money one pays before an insurance company makes payments.

“Half of Americans would fail health insurance 101,” said Ernie Almonte, CPA, chair of the AICPA’s National CPA Financial Literacy Commission.

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Ensuring Privacy in an IT World

PrivacyDo you expect a right to privacy? Do your clients? The truth of the matter is that the right to privacy is an ever-changing, ever expanding concept that continually needs to be redefined. That's especially true when it comes to ensuring privacy in an IT world. Ensuring privacy, which concerns the rights and obligations of individuals and organizations with respect to the collection, use, retention, disclosure and disposal of personal information, comes with risks.

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3 Crucial Areas of Focus for Benchmarking

Maybe it’s an inherent competitiveness or just the pursuit of improvement, but it is commonplace for people to seek out benchmarks that they can use to assess their relative position or performance. It interests people to know how they compare to their peers. Benchmarks have a place in business, too, and can be an invaluable instrument to help business owners succeed.

Trusted-business-adviser

Equipped with an intimate knowledge of their clients’ finances, accountants are uniquely positioned to help their business clients think strategically to achieve success. With assistance from accurate and relevant data, accountants can help their business clients by comparing their financial performance to the performance of their peers. This ability to effectively benchmark is one way to transition from a quarterly tax specialist to a trusted business adviser.

Assuming that accountants are able to get their hands on reliable industry data, it becomes necessary to isolate a few specific metrics that will be especially useful across industries. While different industries and companies measure success in their own unique ways, a few metrics are almost universally indicative of a company’s financial health.

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If You or Your Clients are the Victim of Tax-Related Identity Theft

ID-fraudTax-related identity theft is a multi-billion dollar business that may be affecting you and your clients. Identity theft is the fastest growing crime in the world. It can affect your credit and tax records and your earnings record—a criminal record may even be established in your name. No one is immune.

Identity theft that affects your credit record has been around for decades; however in the past 10 years, tax-related identity theft has seen an explosive rise. The statistics are staggering. A report from the Treasury Inspector General for Tax Administration indicated that during the 2011 filing season, 1.5 million fraudulent returns went undetected and refunds totaling $5.2 billion were issued to the wrong person. 

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Audit Data Standards: Revolutionizing Business Information

Audit-data-standardsOne of the challenges that management and auditors face is obtaining accurate data in a usable format following a repeatable process. That’s why the AICPA’s Assurance Services Executive Committee’s Emerging Assurance Technologies Task Force seeks to increase audit efficiency by developing the following voluntary, uniform audit data standards: base standard, general ledger standard and accounts receivable subledger standard.

These non-authoritative audit data standards present a new way of optimizing efficiency and effectiveness in reporting and assurance by facilitating automation and enhancements in the analysis of business information. In addition, audit data standards identify the key information needed for audits and provide a common framework covering:

  • data file definitions and technical specifications;
  • data field definitions and technical specifications; and
  • supplemental questions and data validation routines to help users better understand the data and assess its completeness and integrity.

Who will benefit from their use? A number of stakeholders, from internal and external auditors to software vendors. Let’s discuss.

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That “Comfort Letter” Request May Really Be A Third-Party Verification

Writing-letterI continue to get requests from members on how to handle the "comfort letter" issue, as well as feedback on guidance the AICPA has developed and suggestions for how we can better advocate for our members and their clients. By way of background for those of you who may have missed my previous blog post, CPAs are often asked to verify a variety of client information for regulators, banks, insurance providers, state taxing authorities and more.

What they're asking for, basically, is a guarantee that certain information about a client is correct, such as confirmation of a client’s self-employment status; verification of income from self-employment; verification of a self-employed borrower’s business ownership percentage; and profitability or sustainability of a self-employed client’s business. While it's certainly understandable why they would want verification of this information, depending on what the request is can place CPAs in a risky situation. At the AICPA, we’ve received several inquiries from members regarding what is often referred to as "providing comfort" or “comfort letters.” However, the requests are actually “third-party verifications."

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In the News: AICPA Conference Focuses on Developing Female Leaders

Leadership-compassA recent AccountingWEB article by Deanna White highlighted the steps the AICPA is taking to develop more female leaders in the accounting profession.

"If you look at people coming up in the ranks over the last thirty years, 50 percent of the people in the profession are women but only 19 percent of leadership in the accounting and finance professions right now is female," says Mary L. Bennett, chair of the AICPA Women's Initiatives Executive Committee and founder of MLBennett Consulting LLC.

Bennett said that there is a perception that more female leadership in the accounting profession is an issue that will take care of itself - but that's not the case.

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Affordable Care Act Implications You Need to Know Now [PODCAST]

In this podcast, Ted Sarenski discusses the latest developments regarding health care reform and the Affordable Care Act, including what will be required of health plans offered both through exchanges and employers, the delay to 2015 of the requirement for large employers to offer health insurance, the individual mandate, penalties and federal subsidies, the October 1 deadline for health insurance exchanges, preexisting conditions, and Ted’s predictions and advice for clients in 2014. 

Affordable Care Act Implications You Need to Know Now

If you prefer, you can read the entire transcript below or download this and other audio webcasts from the Personal Financial Planning Section on AICPA.org.

Ted Sarenski, CPA/PFS, President, Blue Ocean Strategic Capital, LLC. Based in Syracuse, New York, Ted has gotten a taste for providing PFP services in a larger CPA firm and on his own. He provides financial planning services and manages assets. His compensation model is a mix of hourly, retainer and assets under management fees.

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Tapping Into Creativity: The Concept of Intrapreneurship

InnovationIn the U.S., 12.3% of the population is identified as a nascent entrepreneur or owner of a business less than three years old. That is roughly 22 million people between the ages of 18-64. The number is even higher if you factor in the growing number of people who think about owning a business or work inside an organization. And who wouldn’t want to be an entrepreneur? They’re passionate, resilient, decisive and fearless. And because of these personality traits, they are often more innovative than their corporate counterparts.

Wouldn’t it be great if you could harness those personality traits in your own organization?

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Advancement of Women in the CPA Profession [LIVE BLOG]

Today's hot topic at the AICPA's E.D.G.E. Conference in Austin, Texas, is women's professional issues. In this session, Yasmine El-Ramly, CPA.CITP, Project Manager, PCPS – Firm Services, AICPA, and Mark Koziel, CPA, CGMA, Vice President, Firm Services & Global Alliances, AICPA, will describe best practices to promote the advancement of women in the profession at the organizational and individual levels. The AICPA is hosting the Women's Global Leadership Summit, Oct. 24 to 25 in Washington, D.C.

(Email subscribers: See the live blog coverage on AICPA Insights).

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Opportunities for Innovation: It's Time to Change the Way We Think

Auditors, and others in the accounting profession, think logically. We have to in order to do our jobs. However, as the world changes, so must we – and logic only gets you so far. Aside from logical thinking and reasoning, we also must be creative. It's that creativity, which can often be found in your existing staff, that can provide us with opportunities for innovation.

Take a look around and you'll see that the world is simply moving away from, and beyond, how CPAs have traditionally practiced. While CPAs still give an opinion on a set of historical financial statements, real-time technology is here to stay. People want information now, not later – and there's a big difference in providing one versus the other. That's where our profession, and the future of auditing, must change. It means taking a closer look at technology, standards – and people. I recently filmed a video for the AICPA addressing these issues

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Tax and Estate Planning Following the DOMA Decision [PODCAST]

This podcast from Bob Keebler covers tax and estate planning following the Defense of Marriage Act decision by the Supreme Court of the U.S. Bob discusses the complexity of moving from a same-sex marriage state to an opposite-sex only marriage state, income tax planning for same-sex married couples, estate and gift tax planning, the marital deduction, gift splitting and portability issues, as well as IRAs and retirement plans.  [Email subscribers: Visit AICPA Insights to listen to the podcast.]

 

Tax and Estate Planning Following the 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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Health Care Reform: The Questions Just Got More Complicated

Health-care-file“What will health reform mean to my small business clients?” That was one of the hot topics identified at the recent AICPA Private Companies Practice Section Executive Committee meeting, and it’s a question that I and my colleagues on the PCPS team have been hearing from CPAs across the country. In addition, in the 2013 PCPS CPA Firm Top Issues Survey, “the effect on firms of new federal and state regulations (i.e., increasing complexity, costs to comply)” was one of the top five issues for sole practitioners, possibly due to increased concerns and client inquiries about implementing provisions of the Patient Protection and Affordable Care Act.  PCPS uses the Top Issues Survey results to inform members about the challenges being faced by other firms and to monitor and respond to member needs.

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The Moans and Groans of Student Loans

When I graduated from college I thought I had all my finances under control. Sure I had some student loan debt, but I had been able to get through four years with only the equivalent of one year’s worth of expenses and tuition in debt; compared to those with hundreds of thousands of dollars in student loans, I felt pretty good. Then I entered the “real world” and everything changed. I’ve been out of school four years now, paying the optimal monthly payment on my loans every month, and I’ve barely made a dent. Student-loan-debt-2

As a student applying for loans, I assumed that as long as I made my monthly payments I would see the number go down, plain and simple. I figured that those high school teachers I had that were still paying down their loans in their 40s must have put off payments or took out enormous loans; why else would it take that long? As the reality of the situation sunk in, and I realized the impact of this magical “interest rate,” my student loan debt suddenly felt much heavier. And I’m not alone. According to a recent survey conducted on behalf of the AICPA by Harris Interactive, only 39% of respondents fully understood the burden student loan debt would have on the future, and a whopping 75% have made a personal or financial sacrifice because of monthly student loan payments, like postponing getting married, having children, buying a house and saving for retirement.

This spring I proudly watched my little brother graduate from college, but as I looked out at the sea of graduates, my mind couldn’t help but think of the immense amount of student debt that lay before many of them. Lucky for my brother, working at the AICPA and with our members has given me access to a treasure-trove of tips and information for managing and paying down student loan debt. Here are a few basics that I passed along to him from 360 Degrees of Financial Literacy.

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Social Media: Time Sink or Productivity Booster?

During a recent live chat about social media on the AICPA Facebook page, we asked participants, “Do you think social media is a time sink?” 50 percent said, “No,” and the other 50 weren’t so sure.

Time Sink graph

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IT Security Key Concern for CPAs and Their Clients

IT-securitySecuring the IT environment is a key issue in today's business world as organizations attempt to manage the risks in cloud computing, the use of mobile devices and defending against cyber-attacks. The importance of security is becoming more apparent each day. Earlier this year, Yahoo Japan experienced an IT security breach in which the user names of 22 million people were stolen. Back in 2010, Google reported that it was the victim of a Chinese cyber-attack; a similar attack is believed to have been launched against the U.S. government. But it’s not just big businesses and governments that have to fend off cyber-attacks; small businesses experience the same problems. Securing the IT environment is clearly a universal issue and can be a constant challenge when it comes to identifying threats.

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4 Ways to Attract New Clients

New-clientWhat’s one thing that CPA firm owners can agree on? While the top issues affecting CPA firms vary based on size, bringing in new clients is a common concern for all. That’s one of the many things we learned from the 2013 PCPS CPA Firm Top Issues survey, which asked CPAs what’s keeping them up at night. The biennial survey, conducted by the AICPA’s Private Companies Practice Section, reveals the chief concerns of CPA firms like yours.  

We released the results of the Top Issues survey at the AICPA’s Practitioners Symposium TECH+ and AAM Summit on June 11 in Las Vegas. The survey responses are categorized by practice size, with top five concerns lists for sole practitioners and for CPA firms with 2 - 5, 6 - 10, 11 - 20 and 21 or more professionals. The findings offer unique insights into the critical challenges facing practitioners across the country, and enable the AICPA to understand and analyze the trends and challenges, and thus provide appropriate solutions and resources to our members.

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Health Care Considerations for Employee Benefit Plans

Health-careThe debate continues about how the Patient Protection and Affordable Care Act will impact health care costs in the overall economy. While CFOs may not be interested in the macroeconomics of it all, they will want to keep their own company’s health insurance costs down. It will not be easy. 

Signed into law in 2010 and upheld by the Supreme Court in 2012, the Patient Protection and Affordable Care Act will profoundly affect individuals, employers, health care providers and insurance companies.  In addition to the many new tax rules to offset the cost of these reforms, the law also contains many changes that employers are going to need to consider and how it may affect employee benefit plan operations, internal controls, financial reporting and more.

Here are a few things that may have a larger impact on plans:

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Global Governments Waging War on Corporate Tax Avoidance

Tim-cook-apple-testifyingWhile reading through the Sunday New York Times, I stumbled across an opinion piece on corporate tax avoidance that I think is particularly relevant for business and industry CPAs. In today’s struggling economy, the corporate tax system is a hot button issue both in Washington and around the world. As companies become more global, we as CPAs in industry can continue to add value in this area.

The article, “Who Will Crack the Code?” by David Leonhardt, starts out by talking about the shift in the soda industry from domestic to foreign concentrate production—just one example of a thread that runs through many different industries. Leonhardt notes, “as a result [of moving manufacturing operations overseas], the industry paid a combined corporate income tax rate of only 19.2 percent over the past six years…the average rate for companies in the S&P 500 was 29.1 percent.”

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3 Ways the New COSO Framework May Affect Your Business

Over the past 20 years, change seems to come at the speed of light and has had a significant impact on the way businesses operate. Markets have become global, just about every process can now be outsourced and technology has become integrated into the DNA of every business. If anything, changes in rules, regulations and standards have accelerated. Businesses must now satisfy the high expectations of regulators and other stakeholders regarding governance oversight, risk management and the detection and prevention of fraud. All of this change means that stronger internal control practices must be developed to help to grow, as well as protect, the organization.

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How Specialization Can Improve Your Service Offerings

In our last live blog session from the 2013 Practitioners Symposium and Tech+ Conference in Partnership with the Association for Accounting Marketing Summit, Jerry Love, CPA, CGMA, ABV, PFS, CFF, CITP of Abilene, Texas, offers insight as to how CPAs can specialize and improve their bottom line. Specializing will:

  • Deepen existing client relationships – with each additional value-added service that you offer a client, they rely on you more heavily as their trusted advisor.
  • Increase the firm’s bottom line with additional revenue streams.
  • Retain staff – specialized services provide staff exposure to a wider array of assignments and fulfilling career paths.

(Email subscribers: See the live blog coverage on AICPA Insights).

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What is the Next Generation of CPA Firms?

Join the new generation of CPA who is finding success by reimagining and recreating the traditional CPA firm for the 21st century at the 2013 Practitioners Symposium and Tech+ Conference in Partnership with the Association for Accounting Marketing Summit.

  • Leverage new technologies.
  • Implement new workflows.
  • Invent new client acquisition and relationship management systems.
  • Improve efficiency and effectiveness.
  • Grow revenues.
  • Optimize profitability.
  • Embrace value pricing.
  • Kill the billable hour.
  • Attract, nurture and motivate the best talent.

Get ready to renew your commitment – and be inspired anew – to transform your life, and the lives of colleagues and clients for the better.

Join Rick Telberg as he moderates this panel of young CPA professionals including:

  • Jason Deshayes, CPA, Vice President, Butler CPAs, Albuquerque, NM
  • Michael Elliott, CPA, Manager, Dittrick & Associates, Inc., Burton, OH
  • Joy Lizotte, CPA, Owner, Joy L. Lizotte, CPA, LLC, Lake City, FL

(Email subscribers: See the live blog coverage on AICPA Insights).

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Are You Using Digital Signatures?

Kicking off day two of the 2013 Practitioners Symposium and Tech+ Conference in Partnership with the Association for Accounting Marketing Summit is the session "What‘s in the Future for Digital Signatures?." Business in general, and the CPA profession specifically, have long sought a solution to the inefficiencies of ink and paper-based signatures. Has technology finally solved the problem or do we continue to wait? There are many popular “solutions,” but do they really solve the problem(s)? This session, presented by Erik Asgeirsson, CEO, CPA2Biz, a subsidiary of the AICPA, and Brian Fox, CPA, founder of Confirmation.com, will define the problems and compare and contrast some of the proposed solutions. (Email subscribers: See the live blog coverage on AICPA Insights).

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AICPA Launches #MainStFinancials (FRF for SMEs)

Earlier today, the AICPA announced the launch of the Financial Reporting Framework for Small- and Medium-Sized Entities. This session at the 2013 Practitioners Symposium and Tech+ Conference in Partnership with the Association for Accounting Marketing Summit covers AICPA Director of Private Company Financial Reporting, Robert Durak, CPA, CGMA, as he highlights key features and benefits of the Financial Reporting Framework for SMEs, as well as important accounting topics within the FRF for SMEs. You can find more information on the framework by following #MainStFinancials. (Email subscribers: See the live blog coverage on AICPA Insights).

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New Taxes and the Cost of Healthcare and Insurance

The 2013 Practitioners Symposium and Tech+ Conference in Partnership with the Association for Accounting Marketing Summit takes place June 10 to 12 in Las Vegas. I am live blogging from select sessions throughout the three days. The first session is "The Impact of Healthcare Reform on Small Business: New Taxes and the Cost of Healthcare and Insurance" with Mark Dietrich, CPA/ABV, of Framingham, Mass. Mark wrote a prelude on AICPA Insights which generated a lot of interest and conversation.

This session covers the Accountable Care Act, which is the most significant and costly social spending legislation since the Great Society programs of the 1960s. Its impact extends beyond health insurance, and envisions a system of regulation and taxation that aims to restrict the impact that income has on access to healthcare, except the wealthiest top .1% (one-tenth of 1%) of taxpayers. (Email subscribers: See the live blog coverage on AICPA Insights).

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What Does It Take to Value a Business?

As CPAs, we get so consumed with our day-to-day challenges of serving clients and employers that we can neglect some of the big-picture issues that are going to impact the not-so-distant future of our profession. That’s what was behind the AICPA’s Vision 2011 project, and more recently our CPA Horizons 2025, but it’s also the subject of a series of panels we’ve convened to bring thought leaders together. Last month’s topic was value versus valuation, which is not a new issue, but one that has intensified in recent years. This video is just a snippet of that conversation. You can view the full video on AICPA TV.

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Managing and Retaining Data: Top Priority for CPAs

TechnologyTechnology allows organizations to make more effective use of data in advising clients and making business decisions. However, the explosive growth in the volume and complexity of information has increased the risks in managing and retaining data – which, according to the 2013 North America Top Technology Initiatives Survey, is the top priority for CPAs.

While everyone can agree that data management is integral to an organization’s ability to mitigate risk, an organization whose data management policies and procedures are insufficient or ineffective is exposed to the consequences of poor data management. Those consequences could result from poor business decisions or client advice that was based on incomplete or inaccurate data, having data stored in outdated or incompatible retrieval formats or improperly backing up data, which can result in its irrevocable loss.

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Sustainability Reporting: Don’t Miss this Opportunity

Business-inventoryWhether boosting the bottom line, preserving the planet or a combination of the two, sustainability has officially crossed the threshold of America’s businesses, with many of the greatest skeptics even now realizing that it’s here to stay. In fact, according to the Governance & Accountability Institute’s report: 2012 Corporate Environmental, Social and Governance / Sustainability / Responsibility Reporting – Does It Matter? Analysis of S&P 500 Companies’ ESG Reporting Trends and Capital Markets Response, “53 percent of S&P 500 Index companies are currently disclosing ESG information, compared to about 19-20 percent of the S&P 500 reporting in 2010.”

Sustainability’s momentum is being fueled by a large, influential and growing majority of supporters: business leaders. They recognize that sustainability-minded organizations are more committed to management checks and balances, informed decision-making and community goodwill. What follows is an organization’s reputation for greater stability, less risk and a more secure market value. Sustainability-minded organizations are among the top choices when retailers and other businesses create vendor relationships, select investment candidates and make purchase decisions.

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Tax Reform is Centerpiece of CPAs’ Advocacy on Capitol Hill

Capitol HillWhen more than 400 leaders of the CPA profession journeyed to Washington, D.C., to attend last month’s AICPA Spring Meeting of Council, visits to Capitol Hill to engage in advocacy of the profession’s legislative goals were a highlight of the agenda. To no one’s surprise, tax reform – which sits atop the list of the Institute’s legislative priorities – was a focal point of the visits.

The AICPA has a longstanding tradition of advocating for sound tax policy and assisting lawmakers on tax policy matters. The proliferation of new income tax provisions since the 1986 tax reform effort has led to complex compliance hurdles for taxpayers, administrative complexity and enforcement challenges for the Internal Revenue Service. The Institute has testified on tax reform before the House Ways & Means Committee and the Senate Finance Committee and submitted technical recommendations to five study groups whose findings will shape legislation expected later this year.

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In the News: Paying for a Summer Studying Abroad

Graduation-abroadAs a recent – and I use the word recent liberally – college graduate, one of my few regrets is that I didn’t take advantage of the opportunity to spend a summer studying abroad. I generally excuse this away because I had my hands full juggling my course work and extracurricular activities and was always eager to return to my native New York. If I was being honest with myself, the real reason was that I could never seem to navigate the financial and administrative aspects of applying to take classes overseas during the summer.

For those of you who are still in school and seeking to broaden your horizons, Michael Eisenberg, a Los Angeles-based CPA/PFS, recently spoke to U.S. News & World Report to educate their audience on how to pay for short study-abroad trips.

The article encourages students to look for scholarships and aid to pay for the parts of a short-term educational trip not eligible for 529 plan funding.

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Small Businesses and Health Care Reform – What Now?

Health-care-reformThe Patient Protection and Affordable Care Act (health care reform) seeks to change the way health insurance premiums are established, just as the Act Providing Access to Affordable, Quality, Accountable Health Care did in Massachusetts. As CPAs’ small business clients begin to implement the requirements of health care reform, CPAs need to understand two significant ways in which their small business clients, and their own small practices, may be affected.

The Small Group Insurance Market and Increasing Premiums

The first big change that health care reform brings is the prospect of “merging” (formally or via rating rules) the small group insurance market with the individual insurance market. The individual market typically has the highest costs of all the health insurance markets due to the actuarial risk of a single covered life and the time and expense of selling single policies. The small group market, historically 50 employees or less, but in the case of health care reform, 100 employees or less (mandated to expand the risk pool base of small businesses who might also absorb the cost of the merged individual market), is significantly less risky and thus has lower premiums. As has been the case in Massachusetts, if the formal merger of the two markets’ risk pools takes place in your state, it may cause small business premiums to increase dramatically. If you or your client presently have more than 50 employees and are covered in your state’s existing large group market risk pool, premiums could rise once the small group level increase to 100 employees becomes effective in 2014.

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A Smooth Transition to the Cloud

Digital-cpaA small business gains access to sophisticated technology it could not previously afford. A mid-size company reassigns its IT staff to strategic projects that encompass far more than day-to-day tech operations. A large organization is able to tap into enhanced business intelligence and put it to work more quickly. 

These are some of the success stories associated with cloud computing. Cloud technology is quickly becoming an integral part of everyday business life, smoothing the way to valuable business process outsourcing opportunities and making it easier to identify and use critical business intelligence. In fact, over 65% of IT security professionals reported using some type of cloud technology for mission-critical applications and data, according to the AccelOpps Cloud Security Survey 2013. And CPAs are integrally involved in many organizations’ shift to the cloud.

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How Unlimited Vacation Works in My CPA Firm

Exotic_vacationBefore starting my own CPA firm, I worked at a large, national accounting firm and found I was never actually able to use up my three weeks of annual vacation time. However, when I went to work for a local boutique CPA firm, I only got ten annual vacation days. There was also no policy for telecommuting and no flexible schedules or incentives for being more efficient than expected, such as being rewarded with more paid time off. “Face time” in the office ruled. Initially, I was okay with limited vacation, but a couple of years in, I realized that I would really value more flexibility as part of my compensation package.

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Wrap Up of AICPA Spring Governing Council Meeting 2013

The 2013 AICPA Spring governing Council meeting kicked off on Sunday and just wrapped up. Take a look at the three-day meeting through the eyes of social media. (Email subscribers: View the full story on AICPA Insights.)

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Virtual Work Teams Are Coming

Virtual-teamAs the economy continues to recover, the impending retirement of our nation’s Baby Boomers will create a labor shortage far greater than any we have experienced in the U.S. Professionals with the right skills will have their choice of employment opportunities, which will drive demand – and salaries – up. CPA firms that provide truly motivational and engaging environments will win the recruiting and retention race.

That’s why learning to manage the challenges and possibilities of virtual work teams is a must for today’s current and emerging partners. The need for increased workplace flexibility generates passionate conversations by CPA firm leaders and team members. Employees are challenged to keep a steady balance between their work and their personal lives as demands in each continuously change. Some aren’t willing to make the firm their top priority.

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5 Things CPAs Need to Know about Integrated Reporting

Integrated-reporting-word-cloudLast week, my blog post discussed that Integrated Reporting <IR> represents an important shift in corporate reporting in which CPAs can play a key role providing consulting services, implementation or report preparation. In today’s blog, I’m drilling down into some of the key concepts of the recently released Consultation Draft of the International <IR> Framework that are important for CPAs to understand.

Five features of the Draft Framework are:

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Tax Reform: The Crystal Ball Never Lies

Crystal-ballPeople often ask me, “Ed, when do you think we’ll finally see tax reform?”

“Not before 2014,” I respond with assurance.
“How can you be so sure, Ed?” they say.
“My crystal ball never lies!

But I started getting a bit nervous about sounding so confident.  After a little digging, I found out my crystal ball had once predicted that the Titanic was unsinkable, yet it went down on April 15, 1912. How’s that for foreshadowing?! That forced me to do some soul searching and thinking.

Flash back to November 2011. I was sitting next to Pat Thompson, who chaired the AICPA Tax Executive Committee.  We were listening to Don Longano, former House Ways and Means Committee Chief Counsel and Washington tax insider, share his views on the prospects for tax legislation at the National Tax Conference.

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SEC Using XBRL to Flag Reports for Review

Seal of the U.S. Securities and Exchange Commi...Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Not too long ago, I heard Craig M. Lewis, Director and Chief Economist of the Securities and Exchange Commission’s Division of Risk, Strategy and Financial Innovation, give a presentation on the SEC’s new predictive accounting quality model, nicknamed “RoboCop” by the trade press, which will enable the SEC to monitor and flag reports for further review.

What makes AQM so useful, Mr. Lewis said in an interview with Merrill Compliance Solutions, is that, by using XBRL, the tool can be “applied broadly to the entire filer space.” Previous versions of the tool used Compustat data, which did not include all filing companies. With XBRL, 100 percent of filing companies will be analyzed by AQM.

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3 Things to Know About Proposed Ethics Code Revisions

CPAs know how seriously our profession takes ethics. The AICPA’s Code of Professional Conduct applies to all AICPA members. In addition, many state CPA societies and state boards of accountancy either incorporate it by reference or use it as a starting point for their codes. The Code of Professional Conduct provides guidance on areas such as client relationships, maintaining independence and adhering to the technical standards of GAAP, GAAS and others.

The AICPA's Professional Ethics Division acts as the steward of the Code of Professional Conduct, taking a 360 degree view of ethics. It publishes a free newsletter, Ethically Speaking, which helps CPAs better understand ethics-related issues (send an email to ktruman@aicpa.org to subscribe). The Professional Ethics Division establishes, interprets and enforces these standards. To carry out its charge, the Professional Ethics Division provides a hotline that helps members understand and apply the Code of Professional Conduct properly. What’s more, monitoring hotline inquiries is one of the ways the Professional Ethics Division identifies topics that require standard setting. Using this real-time feedback, the Professional Ethics Division has been able to tackle topics that are important to the profession. 

The latest exposure draft issued by the Professional Ethics Division reorganizes the Code of Professional Conduct to make it easier to navigate, understand and apply. Watch this video to learn more about the Ethics Codification project.

 

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How Would an Unlimited Vacation Policy Work in Your CPA Firm?

Tropical-island-getaway-vacation

After this crazy, compressed tax season, you and your employees are certainly ready and deserve a vacation. But do you give your employees enough vacation time? How much paid vacation time is enough? Can you imagine that the answer might someday be “as much as they want?” Some companies are shifting toward an unlimited vacation policy because they believe it can enhance morale and minimize stress. Although only 1% of organizations offer unlimited paid time off, according to a Society for Human Resource Management survey, it is surprisingly most often used at smaller organizations. There are a number of advantages to offering unlimited vacation time in your CPA firm. They include:

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Live from the AICPA Sustainability Workshop

I live blogged from the AICPA's Sustainability Workshop that took place May 2 to 3 in New York City. The workshop is part of the Executive Boardroom Series from the AICPA and the Enterprise Risk Management Initiative at the Poole College of Management at North Carolina State University. Below is a replay of the entire two-day event.

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Be Prepared for Major Changes in Key GAAP Standards

GAAPGet ready to tackle some major revisions in accounting standards. After years of consideration, the Financial Accounting Standards Board is finalizing its approaches on three major issues: revenue recognition, leases and financial instruments. Each of these accounting areas affects virtually all companies in the United States no matter what their size or whether they are public or nonpublic. And that means virtually all CPA firms are affected too.

From an advocacy standpoint, the AICPA continues to monitor the progress of these important standards and to comment on the exposure drafts on members’ behalf. Our goal is to help make sure the standards are effective and can be implemented with as much ease as possible. Moreover, the AICPA will help members understand and implement the new standards so they can continue to provide high-quality services and comply appropriately with the rules.

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2013 TTI Survey Lists Top 10 Technology Initiatives in U.S. and Canada

TechnologyTechnology allows CPA firms to better understand, manage and grow their practices. Yet, it can come with its own set of challenges when trying to manage and retain data, secure IT environments and stay in compliance, according to the latest top technology initiatives survey from the AICPA’s Information Management and Technology Assurance Division.

The 2013 North America Top Technology Initiatives Survey, conducted jointly by the AICPA and the Chartered Professional Accountants of Canada, asked accounting professionals in public accounting, business and industry, consulting, government, not-for-profit and other organizations about their top 10 technology initiatives in 2013. Here's the top 10 in the U.S. and Canada:

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Sells Winners: 39 Candidates Score 95.50 or Higher on CPA Exam

CPA ExamThe 2012 Elijah Watt Sells Award winners were announced on March 26. Just a total of 39 individuals performed so well on the CPA Exam in 2012 to have earned this prestigious title. Considering there were more than 92,000 candidates who sat for the CPA exam in 2012, the 39 recipients have made an immense achievement indeed! Perhaps congratulations are in order?

What does it take to be a Sells winner? The award is presented to candidates who have obtained a cumulative average score above 95.50 across all four sections of the CPA Exam, completed testing during the 2012 calendar year and passed all four sections of the CPA Exam on their first attempt.

The talented individuals listed below are the 2012 Sells Award winners in alphabetical order, followed by their state board affiliation, education and present employer.

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CPA Profession Flexes Its Financial Muscles This April

April is Financial Literacy Month! This annual event is centered on improving Americans’ understanding of financial principles and practices. During this time every year, the AICPA and state CPA societies bolster financial literacy efforts with added events and resources.
 
Even with the craziness of tax season, it is amazing to see the dedication of CPAs across the country. Here is just a sampling of the various financial literacy events taking place this month.
 Pig - Super
The Texas Society of CPAs is encouraging families to participate in their 30 Days of Personal Finance. They’ve posted 30 tips for each day of the month, ranging from creative savings ideas to budgeting tips.
 
The New Mexico Society of CPAs will speak on financial literacy at an Albuquerque middle school on April 22. Three CPA volunteers and a NMSCPA staff member presented at the event last year, and it was so successful for the school that they have decided to make it an annual event! You can see pictures from last year’s event on their Facebook page. This year they will be giving away Feed the Pig and 360 promotional materials to kids and parents, in addition to raffling off copies of Save Wisely, Spend Happily; a copy of the book is also being donated to the school’s library.
 

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In the News: Using Tax Refunds Wisely

Mailbox-tax-returnDo you see your neighbor waiting by the mailbox for their tax refund? Chances are it’s not so they can use it on a fancy vacation or a new spring wardrobe.

This year, workers are most likely to save their refund or use the money for day-to-day expenses, according to a recent survey conducted for the AICPA by Harris Interactive for National Financial Capability Month. And that refund money is substantial. An AccountingWEB article on the survey results states that through March 22, the average refund this tax season is $2,827. That’s trending slightly lower than this time last year, when the average individual refund was $2,860.

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8 Tax Reform Questions Congress Needs to Raise (and Answer)

Number-8It looks like comprehensive tax reform is gaining some sense of realism. Consider these important actions so far this year:

  • President Obama mentioned it in his January 2013 State of the Union address: "Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit.  We can get this done."
  • The House Ways and Means Committee formed 11 working groups to address specific areas for reform.
  • On March 21, the Senate Finance Committee began issuing Tax Reform Option Papers -the first one covers simplification for families and businesses.
  • Tax reform is mentioned in both the House and Senate FY2014 Budget Resolutions produced by the budget committees.

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The Cloud: Just One SOC Opportunity

Service-organization-control-markIt's no secret that an organization's confidential information is vulnerable in today's world of electronic storage. If you have any doubt, just ask The New York Times or The Wall Street Journal – both of which recently reported having their computer systems hacked.

Organizations transferring storage and/or the processing of their data to cloud-based systems are faced with the added complexities of how to best maintain ownership and control data while continuing to assure customers they have controls in place to keep data secure. How can organizations provide their stakeholders with comfort related to this transferred information?

Service Organization Control ReportsSM represent the intersection of cloud computing and the trusted advisor role of the CPA. In 2011, the AICPA introduced three SOC reporting options: SOC 1SM, SOC 2SM and SOC 3SM reports, creating a great opportunity for CPAs to assert their knowledge and capabilities related to examining and reporting on controls at service organizations, including cloud service providers.

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