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15 posts from August 2012

In the News: Making Allowance a Teachable Moment

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

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

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How Do You Tackle Health Care Reform?

One provision at a time, of course!

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

Red-appleNot enough is what I am hearing from my fellow CPAs. And that is quite understandable when simply thinking about the magnitude of health care reform can leave you scratching your head. But there is a way to devour the totality of the legislation without feeling completely overwhelmed:  tweak your approach.  Just as the saying goes, “How do you eat an elephant? One bite at a time, of course!” The same holds true for tackling health care reform, you tackle it “one provision at a time.”

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

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New Tools to Help Companies and Auditors Evaluate XBRL

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

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The Importance of Communications in Accounting

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

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

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

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The Role of the CPA in a Crowdfunding Future

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

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

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4 Social Media Etiquette Tips for CPAs

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

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

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

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Financial Education for All

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

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

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

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

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Beyond the EDGE: Twitter Enhances CPA Conference Experience

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

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

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Interview: Tax Aspects of Donating a Car to Charity

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

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

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

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

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SOC Engagements: How to Get in the Game

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

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

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CPAs Stress the Importance of Long-Term Care

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

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

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4 Simple Ways to Boost Your Online Presence

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

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

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

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

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

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Top 5 Ethics Resources

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

Here are our top five.

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