Small Firms Make a Difference in Unexpected Ways

I recently heard a moving story about an acquaintance’s father who passed away unexpectedly. Married to his childhood sweetheart for more than 60 years, he was a dedicated father and husband. He had been the manager of his family’s accounts. Upon his death, his widow and family had to set aside their grief to grapple with urgent financial issues, including funeral expenses and insurance matters. Fortunately, a trusted advisor was able to help. The family’s CPA, a small firm practitioner who had known the family for years, was well acquainted with their finances, and immediately came to their aid, offering his technical expertise. The CPA restored order to the family’s accounts and eased their worries. They had peace of mind knowing their CPA was prepared to protect their interests during and after a highly emotional and stressful time.      

Stories like this one unfold every day in CPA firms across America. Whether they’re advising startups on growth opportunities or helping individuals handle life changes, small firm CPAs have a profound impact on their clients, supporting them as they strive for their goals, build for the future or deal with crises as they arise.

Helping College Graduates Reach Financial Independence

“The secret of getting ahead is getting started.” –Mark Twain

Ironically, the knowledge college students gain while studying for their careers is only one aspect of the education they’ll need to succeed in securing a healthy financial future for themselves. Learning how best to manage their finances and make wise decisions requires both individual effort and solid expert advice. That is where CPAs can serve as educators to help their clients – the parents – share tools with their recent college graduates to help them achieve financial success.

Getting started can seem overwhelming, but having an accurate idea of how much it costs a recent graduate to live monthly or annually is an essential first step. Suggesting clients’ children use simple money-tracking apps such as the one available at mint.com, where individuals can examine every aspect of their financial life in one place, can be helpful. After entering some basic information about their income and expenses, users can get a quick overview of their overall financial health.

8 Tips to Determine Your Not-for-Profit’s Year-End

Not-for-profits have a luxury that most other individuals and businesses do not. They’re allowed to select their fiscal year-ends for IRS purposes. Partnerships, sole proprietorships, S corporations and other legal structures, with limited exceptions, may not. These groups generally are required to use calendar year-ends for tax filings. Read on to find out what a not-for-profit should consider when choosing a year-end date.

How does a not-for-profit choose its year-end?

By default, many not-for-profits are organized with a calendar year-end, but not-for-profits should assess if this is the best choice. A thoughtfully chosen year-end may produce more meaningful financial statements, ease reporting requirements and even save the organization money. Before deciding on a year-end, organizations should consider the following factors:

Where Will You be Financially in 40 Years?

What sounds more appealing to you – reading a bunch of boring facts online or playing a game to learn the same exact thing? You’d probably choose the latter. In fact, research shows a majority of millennials see clear benefits from playing digital games. Two in three (67 percent) say that games are important in helping them to learn how to create winning strategies and 7 out of 10 (70 percent) feel it aids them in learning how to solve problems. The proof is in the pudding, as they say – and that’s where gamification and personal finances come into play (literally!).

Today, the AICPA and the Ad Council launched a free digital game, ‘Yesterday’s Tomorrow.’ The game is a new resource from Feed the Pig to help millennials build savings skills, a product of the idea Scott Garner submitted for the Feed the Pig Game Design Challenge. The challenge invited people to submit ideas for digital games to help educate Feed the Pig’s target audience. More than 70 ideas were submitted, and his concept was chosen to help educate millennials through gamification.

Effect of Spending Habits on Retirement Planning

The traditional approach to retirement assumes that retirees will maintain their pre-retirement standard of living as they transition into retirement, and then sustain that lifestyle throughout retirement. But a growing base of research that analyzes the actual spending habits of retirees, reveals a different story.

In reality, retirees tend to experience a slow but steady decline in real spending throughout retirement. Spending decreases slowly in the early years of retirement, more rapidly in the middle years, and then slows again in the final years, in a path that looks like a “retirement spending smile.” Even the uptick of health care expenses in a retiree’s later years are generally not enough to offset all the other spending decreases that typically occur in retirement. That’s important, because it means your clients may not need as much money in retirement as they think.

100 Years of CPA Exam as Licensure Requirement

A lot has changed over the last 100 years with the evolution of the CPA profession. Old fashioned calculators gave rise to Microsoft Excel. Stacks of financial statements have morphed into data in the Cloud. And many CPAs have expanded beyond auditing or tax services through the growth of specializations such as IT assurance, financial planning and business valuation.

Despite all the change, one notable constant has remained – the Uniform CPA Examination’s alignment with professional practice and the work of newly licensed CPAs. This alignment has continuously ensured that those earning licensure have demonstrated the requisite knowledge and skills vital to protecting the public interest.

Summer Jobs: More Than Money in Your Pocket

School’s out and many high schoolers and college students are taking summer jobs. Seasonal work can provide extra spending money for many teens or much needed funds for school expenses. But summer jobs aren’t just about earning a paycheck and learning how to manage the money you’ve made. These jobs provide valuable work experience and help youth develop professional skills and discover their talents. It’s an opportunity to take responsibility, learn time management skills and figure out how to get along with co-workers. Summer jobs also provide future employment references, mentorship and can even help teens succeed in school, according to Stanford researcher Jacob Leos Urbel.

New Liquidity Disclosures for Not-for Profits: Are You Ready?

Under current financial reporting standards, not-for-profits are not required to illuminate clearly restrictions that affect the availability of liquid resources in their financial statements. But this is all about to change with the Financial Accounting Standards Board’s (FASB) new financial reporting standard (Accounting Standards Update (ASU) 2016-14), effective for fiscal years beginning after December 15, 2017.

In this update, FASB clarifies that the nature of an asset isn’t the only quality that affects its availability. Specifically, liquid resources are quickly converted to cash and available to fund general expenditures within one year following the balance sheet date. Internal (board-designated) and external (donor-imposed) restrictions could mean certain sums of cash and cash equivalents may not be used for general expenditures. If a board designates an amount of cash to be set aside for a building renovation, for example, it cannot be used to buy office supplies.

How Robots Can Help You Thrive

Technology is creating opportunities for the accounting profession, but the human factor is still key– that was the message at IdeaAcct, a session at the AICPA Engage Conference highlighting thought leadership and innovation in the profession.

Practical & Immediate Opportunities for CPAs in Artificial Intelligence - Dan Giffiths, CPA, CGMA

Because accounting is highly structured, it lends itself nicely to machine learning. Therefore, many people think that accounting and tax services are likely to be automated. Software already exists that can populate tax-ready financial documents just from an individual’s bank login information, and such services are available for as little as $100 a month. However, clients are willing to pay far more for advisory services drawn from that information. The value, Griffiths says, lies in the relationships and the advice that CPAs can provide. To take advantage of the opportunities, CPAs need to become friends with their tech colleagues. Good friends.

How to Prepare for Your Organization’s Single Audit

It’s time for your single audit: Is your organization prepared? If you are a recipient of federal funds, to maintain your organization’s funding you must comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known as the Uniform Guidance. Your single audit provides the federal government with assurance of your compliance, and being well prepared for the audit can help the process be more efficient. In this blog post, several CPAs who are either with organizations subject to single audits or who perform these audits themselves reveal valuable best practices that can minimize your worries and set you on the road to success.

3 Trust Ideas for Reducing Estate Taxes

Bob Keebler spoke at the AICPA ENGAGE conference on “The Best Estate Planning Ideas Today.” Included in his detailed presentation were numerous points of interest beyond trusts. The following is a small selection from his 50-minute talk.

Because of the high limit on unified credit, many clients believe that estate planning isn’t for them. The truth, however, is much more complicated. Depending on the client’s state of residence, their positions in real estate or partnerships that might survive them and many other considerations, estate loss can be considerable. Your clients shouldn’t have to pay more than necessary in taxes on their estate, and as their trusted adviser, it’s your job to guarantee that the family’s wishes for their wealth are honored to the fullest extent possible.

3 Solutions to Firms’ Top Challenges

Your practice is thriving, but there are some issues that continue to present challenges. Are other firms like yours facing these issues, too? And what trends are other CPAs seeing that you ought to know about?

Practitioners can find the answers to these questions and more in the results from the 2017 Private Companies Practice Section (PCPS) CPA Firm Top Issues Survey . This unique survey, which is conducted every two years, identifies the significant concerns for firms of various sizes and spotlights emerging challenges in practice management. Barry Melancon, President and CEO of the Association of International Certified Professional Accountants, provided an overview of the survey results yesterday during his Professional Issues Update at the AICPA ENGAGE Conference.

Kevin O’Leary Says CPAs Can’t Be Replaced. Take That, Mark Cuban.

Kevin O’Leary, businessman and co-host of the TV show Shark Tank, says the CPA’s role as a trusted adviser in the marketplace cannot be replaced by technology. That stands in stark contrast to the comments his co-host Mark Cuban made earlier this year.

Score one for Mr. Wonderful.

O’Leary, a keynote speaker at the AICPA ENGAGE Conference on June 13, joined me for a Facebook Live session and spoke with me off camera about how technology is impacting the accounting profession. His comments were on point.

“Half of the work the CPA does is to deal with people, to have relationships with people, and to decide how to work with their desires, their direction, and their vision for their business. That is never going to be replaced by a machine,” O’Leary said.

Technology is evolving faster than ever before, but so too are the needs of businesses. For example, while big data means greater accessibility to information, it also creates a need for the analysis and interpretation of that information. While advances in robotics may change some business operations, companies still need advice on how to run those businesses.

“The truth is that we are going to need CPAs more than ever. Their role is to try to figure out and mitigate risk at every stage, and to say, ‘If we do it this way, here is the tax implication. If we do it this way, this is the cost implication.’ The profession is going to continue to flourish,” O’Leary said.

4 Steps to Fortifying Your Cybersecurity

Small businesses are “unprepared or poorly prepared for a cyberattack” according to 75% of the 307 insurance and risk management advisors surveyed through the Advisen and Experian 2017 Cyber Risk Preparedness and Response Survey. Unfortunately, no organization is immune to cyberthreats. These days, most companies should have some basic form of cybersecurity program in place. If yours doesn’t, or if you need a refresher, here are four steps you can take to establish a stronger foundation.

Step 1: Create a Comprehensive Set of Cybersecurity Policies

What resources does your organization have that are at risk? Think beyond the obvious. On-site computer systems, laptops, tablets and mobile phones are immediate suspects, but bring your own devices (BYOD) and wearable technology such as smartwatches can also be compromised. Determine what controls you need in place to ensure information is kept secure. Set your rules for communicating, working with, copying and distributing sensitive data; and document those rules and make sure everyone in the organization receives a copy. Necessary policies typically include an IT policy, information security program (including a risk assessment), employee acceptable usage policy, business continuity and disaster recovery plan, and an incident response plan. 

The One Vulnerability Cyber Thieves Are Desperate to Exploit

Cybersecurity attacks are becoming more pervasive and seemingly effortless to pull off.  Cybercriminals who can execute a successful attack are seizing credit card numbers, bank account information and even Social Security numbers. A 2016 study conducted by the Ponemon Institute found that the average cost of a data breach is $4 million. You can strengthen your organization’s cybersecurity risk management plan by addressing this one vulnerability: weak passwords.

The capture or reuse of passwords, or “static credentials” as they are often referred to in the IT industry, is standard practice for organized crime groups and state-affiliated attackers alike, according to the Verizon 2016 Data Breach Investigations Report, whose list of contributors represents a “who’s who” of cybersecurity expertise worldwide, from both the private and public sectors. Likewise, passwords are used against all kinds of targets, from the largest organizations to individuals.

A common misperception is that cyber attackers have become so sophisticated that something as simple as a password is no longer effective. The tendency is to think that if federal agencies and multi-national corporations can be breached, there’s nothing individuals can do to protect themselves. This could not be further from the truth. Individuals have the most power in preventing attacks that exploit passwords, which is why a policy on passwords should be a key component of your firm or organization’s cybersecurity risk management program.

Not-for-Profit Contributions: Counting v. Accounting

When is a contribution to a not-for-profit really a contribution? Many would say it depends on whether you ask someone in the accounting or development department. While the accounting office recognizes contributions in accordance with generally accepted accounting principles (GAAP), there are no required standards for counting and reporting fundraising receipts by the development office. The resulting differences create perhaps the greatest source of tension between the two teams. So what can be done to bridge the gap and foster a cooperative relationship that will best benefit the not-for-profit?

First, accept that what gets reported by each group will be different. And that’s okay, as long as the differences can be explained. There’s no need to hash out who’s right or wrong; just take time to understand each other’s math. What gets included, by whom, and when? Accountants need to explain GAAP in “non-accountant” language. Similarly, the development team needs to establish and share its consistent guidelines for reporting fundraising activity. Developing this understanding will take time and patience on both sides but is essential to forming a good working relationship.

Social Media: The Conference Success Secret Weapon

Conferences give you the opportunity to network and become energized about the accounting profession and the direction in which it’s heading. Most people know the standard networking methods – attend receptions and collect business cards. But how can you make the most of the experience before, during and after the event?

Social media is present at almost every conference, giving you the opportunity to develop high-quality connections while staying in the loop on all the happenings.

Here are five ways you can utilize social media to make the most of your time and money:

Join the conversation.

As social media becomes omnipresent, if you don’t look to these platforms, you’ll miss out on the opportunity to join conversations about conferences and events. Follow the event hashtag on Twitter and Instagram or see if the organization hosting the event has LinkedIn groups you can join. By using these interactive forums, you can see who else is attending an event, set up conference meetups, and even reach out to influencers who may be on site.

Coming Trends in Services to Individuals

CPAs are forward-thinking and relationship-oriented professionals. Taking the time with individual clients to think about their needs holistically has been a growing trend in the profession over the past decade, leading to the many new areas that now benefit mightily from the expertise and insight a CPA can offer. These are exciting times that bring new possibilities for firms that are willing to embrace them. The firms that do will find success, longevity and a satisfied client base.

5 Tips to Help Identify Fake Financial News

The AICPA National CPA Financial Literacy Commission Shares Insight on How to Beat the Real Threat of Fake Financial News

If it’s on the internet and in ALL CAPS it must be true! Whether it’s the GUY WHO TURNED $10,000 INTO $20 MILLION or the HOT TECH STOCK THAT WILL SHOCK YOU, you’ve probably seen some version of this fake news dozens of times a day. And, if you’re like me, you’ve probably clicked on one of these articles out of curiosity and quickly found yourself lost in a sea of misinformation. Sometimes it seems like you need to be a detective to decipher what financial news is real and what is fabricated. In this post, I’ll provide some information to help consumers be better prepared.

3 Tips to Help You Remember What You’ve Learned

You’ve probably heard the expression use it or lose it. It turns out this applies to learning as well as physical fitness. There is a force that gradually erases all the great insights and instruction you stored in your brain during a learning event called "The Forgetting Curve.” German psychologist Hermann Ebbinghaus first researched this concept in 1885. The curve illustrates the decline of our memory retention over time if we make no attempt to retain our learning. The further we get from the educational experience, the less information we remember.

The speed at which we forget information is influenced by various factors including the difficulty of the material, how meaningful the information is and how it’s presented. Stress levels and lack of sleep can also have a negative impact. Thankfully there are steps you can take to help you retain what you learned. Here a few of my favorite tips to help you remember.

5 Tips for Navigating the Road to Leadership

My first job out of college was the best and worst experience of my life, and it taught me a lot about leadership. I started my career at Target, and because I had studied business, they had me running an area with five people reporting to me. My staff ranged from workers with little apparent interest in their jobs, to team leaders who were reporting to me. The challenges of running such a varied team can be overwhelming, but the job also gave me a tremendous range of responsibilities and leadership experiences, forcing me to learn quickly and be decisive. In the end, it was a good first job that certainly stretched me and helped me see that I could be a successful leader.

Taking the reins of leadership can be daunting, but along the way I have learned a number of useful lessons for current and aspiring leaders.

4 Things Advisers Should Know about Technology Today

As practitioners, we have a responsibility to our clients and to ourselves to stay up to date on the latest tools and techniques of our trade. Most CPAs providing advice to individuals do an admirable job of staying current on tax and financial planning techniques, but not as well staying current on technology issues facing their firm. Here are some technology-related issues practitioners should be focusing on today.

The Pace of Change in Financial Technology (FinTech)

A revolution in financial technology has taken place over the last several years. If anything, the pace of change is accelerating, with implications for all financial service professionals. Until recently late adopters of technology were not penalized for being late to the game, because most of their local competitors were also late adopters. Technology has broken down regional barriers, so today you are not only competing against other local providers, but national and perhaps international providers as well. In addition, new players have entered the marketplace. FinTech startups from Silicon Valley and elsewhere are becoming a disruptive force, raising the technology bar and putting pressure on margins. The bottom line for readers is this: If you are not reviewing and upgrading your firm’s technology at least annually, you are falling behind. If there isn’t someone at the firm specifically responsible for this, the odds are that it won’t get done.

What Motivates Donors to Give?

In the summer of 2014, dumping a bucket of ice water on your head while being filmed was all the rage. My Facebook newsfeed was filled with videos of friends voluntarily drenching themselves for all to see. This activity was sparked by the ALS Association’s Ice Bucket Challenge, a brilliant fundraising effort designed to increase awareness and support research on amyotrophic lateral sclerosis (also known as Lou Gehrig’s Disease). In one month, the ALS Association raised more than $100 million. How could other not-for-profits recreate this success to benefit their organizations? While I don’t have the answers, I would recommend that you consider why donors give as a starting point.

Donor motivations have been researched, but results are not as straightforward as they may sound. What donors say is not always consistent with what donors do. So, what looks good on paper, is not always going to translate into success.

Top 5 Reasons to Dig into the CPA Exam Blueprints

There are many things you don’t do unless you have the proper materials, information or training. You just don’t.  

Construction crews don’t build a 100-story skyscraper without a structural design plan. An amateur runner doesn’t jump into the New York City Marathon without having logged a substantial number of miles and completing a qualifying race. And neither you nor I can simply hop into a rocket and head off for a leisurely space walk without extensive training.

The point is, as a CPA candidate, when you finally set foot in a testing center, you should have thoroughly studied and become familiar with the Exam’s content. One of the best ways to do this: Study the AICPA’s CPA Examination Blueprints.

As the Exam’s developer, the AICPA publishes the Exam Blueprints, which is an in-depth, section-by-section guide for candidates preparing to test. If you’re planning to sit for the Exam and said to yourself, What are the Blueprints?, you need to dig in right away because you’ll:

7 Ways to Improve Workforce Diversity

Do leaders of your organization put an emphasis on recruiting and retaining diverse talent? If the answer to that question is yes, then you are off to a good start. However, if your employer does not look to hire both entry-level staff and c-suite leaders of diverse backgrounds (including gender, age, ethnicity etc.), you may want to reconsider your strategy. Employing diverse individuals throughout the ranks of your organization is important. Diverse leaders in the c-suite provide unique perspectives and serve as role models for younger diverse staff. These leaders encourage a highly engaged workforce capable of effectively doing business in diverse and multicultural markets. Additionally, younger, less experienced staff members of diverse backgrounds are also crucial to an organization’s success. These individuals have opportunities to grow with your organization and fill the talent pipeline.   

Last spring, the AICPA answered the call for more workforce diversity education by conducting its first webcast series entitled “Unconscious Bias” which attracted over 3000 attendees. The conversations continued with the “Workplace Diversity” webcast series this past fall and the “Attracting and Recruiting Diverse Talent”, “Retaining and Advancing Diverse Talent”, and “How to Effectively Coach, Mentor, and Sponsor Diverse Talent” workshops this spring. Archives of these webcasts can be found here. Outlined below are seven workforce diversity best practices.

How to Get the Most Out of a Virtual Conference

Conferences are a great way to network, earn CPE and stay up-to-date on new developments in the profession, but for some professionals, the travel time and expense can be obstacles. Virtual conferences offer the same content and CPE credits, but with some features that are unique to the online experience. You may even find that it’s more appealing than attending on-site.

Benefits of virtual conferences

Perhaps the best reason to attend an online learning event is the flexibility to view sessions when and where you want. With a virtual conference, you’ll get to choose from all the same thought-provoking sessions and speakers as on-site attendees. Plus, you’ll likely receive the handouts and presentations in advance of the sessions. This can help you prepare your questions ahead of time if the session includes a Q&A period. You’ll also be able to access sessions that are held concurrently via the archive, so there’s no need to choose between two interesting topics; you can view one via livestream and watch the other later. And if you missed that key point the speaker made, you can go back and listen again.

3 Tips to Manage Sustainability Risks and Drive Value

What would happen if you had to make decisions about your company using only a portion of the financial information that is available to you? Without a holistic understanding of your company’s financial situation and value drivers, it would be tough to assess the organization’s performance, risks, challenges, and opportunities and drive long-term growth. Planning without all the information could potentially put the company at a competitive disadvantage and expose the company to greater risk.

However, that’s what happens in many organizations when they fail to fully consider the operational and financial implications of environmental, social, and governance (ESG) risks. Examples of how these risks can play out in the market include:

• A beverage company’s production drops or they lose their license to operate due to drought conditions in water stressed regions in which the company operates.
• A technology company faces employee turnover and sinking revenues because it fails to encourage or accept the innovative ideas of its highly skilled labor force.
• An apparel company experiences a stock price drop after reports allege its suppliers are committing human rights violations.

Find Answers to Your Cash and Tax Basis Questions

Why do cats purr? Why are pizza boxes square when the pizza is round? Sometimes it’s hard to find a single answer – let alone the right answer - to your questions. Do you know where to turn to when you have a question about the income tax basis or cash basis of accounting? Practitioners frequently ask questions about how to account for transactions using these special purpose frameworks. What they quickly find is a lack of authoritative guidance. Searching and googling can give you umpteen answers. But you need the right one.

The Center for Plain English Accounting, AICPA’s national accounting and auditing (A&A) resource center, often answers questions about the tax and cash bases of accounting. For example, the following two questions were recently posed by members:

Don’t Let Clients’ Retirement Fall into This Trap

Have you ever been at a party where the owner of a company was bragging about how he used a 401k to start his business? Or heard a story about how a couple’s individual retirement account (IRA) is invested in real estate and that’s going to allow them to live in the lap of luxury when they retire?

They’re talking about self-directed retirement vehicles. And much like real vehicles, when they are driven improperly, the result can be disaster.

What Are Self-Directed Retirement Vehicles?

Self-directed IRAs and self-directed 401ks are increasingly popular. While the usual custodians of IRA and 401(k) accounts will only allow certain investments (e.g., stocks, bonds, etc.), a self-directed IRA or 401(k) allows the owner to invest in such things as real estate, precious metals, businesses, etc. and make all the investment decisions. Profits from the investment build up tax-free until the owner reaches retirement and begins to take distributions, usually when the owner’s tax rate is much lower. Sounds good, right? What could go wrong?

Well, actually, a lot can go wrong. As a matter of fact, if you have clients in one of these situations, they could lose substantial amounts, if not all, of their retirement income. How can this happen and what can you do to help?

7 Tips to Get the Most out of Your Next Accounting Technology Event

The biggest benefit to attending an accounting technology event is the convenience of having many vendors, thought-leaders and your peers in one location that also provides CPE credits. These events provide the perfect opportunity to problem-solve, learn and investigate technology during a condensed timeline. Whether you have a project planned or if one is on the horizon, being able to talk to your peers and multiple vendors at your next accounting technology event is a convenience and may shorten your investigation time.

Consider these tips to get the most out of your next accounting technology event. 

11 Things You Need to Know About Your Millennial Co-workers

Move over, Gen X; millennials are now the largest generation in the U.S. workforce. Look around your office and you’ll likely see that one in three of your coworkers is a millennial (born between 1977-1995; a.k.a. Gen Y). Currently there are over 83 million Gen Yers in the United States, and that number is expected to grow. As this generation continues to mature and enter the workforce, understanding millennials and what motivates them has never been more important.

For the first time in U.S. history, four generations are working together, and the age gap between co-workers can be as wide as 60 years. You’ll find traditionalists, baby boomers, Gen Xers and Gen Yers working side by side in many offices. Each of these generations has defining traits that are shaped by a variety of factors. These factors include parenting styles, economic trends, technology advancements, historical events and lifespan. This results in different work and communication styles, career goals and values.

Valuing Contributions to Major Advancements in Medicine

How do you place a value on human cells that have changed the entire trajectory of cancer treatment and have paved the way for medical breakthroughs in diseases like polio, HIV and HPV?

The best-selling book The Immortal Life of Henrietta Lacks – now also an HBO movie starring Oprah Winfrey – examines how, in 1951, cancer cells were harvested during a biopsy of an African-American woman without her knowledge. Those cells, known as HeLa cells, are the oldest and most commonly used human cell line in biomedical research and have had a significant impact on medical research and advancements in treatment for decades.

The story of Henrietta Lacks raises moral and ethical questions about patients’ rights. To start, the Lacks family was unaware their mother’s genetic tissue was taken and being used for research. Further, they never received any form of financial compensation for the profits gained by the medical community for more than 65 years. To this day, Lacks’ eldest son continues the family’s fight for compensation.

5 Silent Killers of a Financial Plan

“The best laid plans of mice and men often go awry.”

As it turns out, poet Robert Burns was onto something. All too often, CPAs and advisers construct tax, estate, retirement, risk management and investment plans that are either never implemented or are misaligned with their clients’ values. Some common missteps could keep a client from adopting a well-crafted financial plan, thus diminishing the value you add to the process.

Let’s take a look at some of these silent killers and how to avoid them before another financial plan goes awry.

Unrealistic Expectations
Perhaps the most common (and avoidable) mistake is building a financial plan on highly aspirational, or worse, totally unrealistic expectations. A sound financial plan is only as good as its inputs, so it’s important to ensure that you are forecasting an appropriate rate of return, inflation rate and honest gauge of spending and cash flow needs. Digging into the client’s cash flow today can help determine a realistic spending level in retirement.

Will a New EBP Audit Proposal Enhance Quality?

Enhancing quality in various areas of the audit and various kinds of audits is a top priority for us at the AICPA. We recently issued an exposure draft entitled Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. Its goal is to provide a report that clarifies audit procedures and the responsibilities of auditors and management, thus improving quality and transparency. The Auditing Standards Board (ASB) is encouraging auditors and preparers who are involved in audits of the financial statements of Employee Retirement Income Security Act (ERISA) plans to familiarize themselves with this proposal, and we are very interested in receiving feedback on the proposed changes. Comments should be sent to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by Aug. 21.

How One CPA Got the Chance to Edit the Journal of Accountancy

Have you ever wanted to try something completely opposite from your everyday norm? Maybe BASE jumping from a mountain or zip-lining through the jungle? For me, writing and journalism have always been that out-of-the-ordinary experience that would be radically different from my everyday CPA-related work. (Don’t judge; it can be as exciting as BASE jumping in some circles!)

So when the team at the AICPA’s Journal of Accountancy (JofA) reached out and asked me to join a small group of young CPAs to guest edit the May 2017 issue, I jumped at the chance.

Bingo Balls, Atomic Elements and Passing the CPA Exam

The number 75 has various meanings around the world. It can sometimes denote a diamond anniversary. It’s the age limit for a juror in England and Wales. Science junkies know it as the atomic number for the chemical element Rhenium. And here in the U.S., it’s the number of balls in a standard game of Bingo; something which I’m sure fans of the game are quite aware of at their Friday night get-togethers.

But, the number 75 holds no greater significance in this world than for the 100,000-plus of you who sit for the Uniform CPA Examination each year. Achieve that number or higher on any of the four sections of the exam, and you’re one step closer to licensure.

A common misconception for those new to the CPA exam is that 75 is a percentage or number of questions answered correctly. No, you don’t get a “C” on the exam if you score a 75. It’s simply the passing mark that signifies you have demonstrated the minimum knowledge and skills necessary to protect the public interest as a CPA.

Thriving with Autism: One CPA's Story

According to the Center for Disease Control (CDC), one in every 68 American children is diagnosed with Autism Spectrum Disorder (ASD). A newer government survey boosts the prevalence of this condition to one in 45 children. Though the frequency of autism remains debatable, it’s undeniably among the fastest-growing developmental disorders in the U.S., with diagnoses having increased 119.4% since 2000.

Now, pivot to the inevitability of Generation Z, post-millennial youths constituting 20% of the workforce by 2020. When you consider the staggering prevalence of autism in this particular age group and combine those occurrences with the even more daunting unemployment rate of people with autism, the implication for our economy’s future is alarming.

Enter: Tom Iland, who at 13 was diagnosed with autism. Affectionately called The Calculator by his junior high schoolmates, Tom discovered at a very young age that, despite certain shortcomings, he was a wiz with numbers. Among his many mathematical talents, he can – in no more than a second – provide the sum of a word by adding its letters’ corresponding numerical values:

If A=1, B=2…Z=26, then autism = 83.

Documentation: A Key Ingredient for Audit Success

You’re trying out a pound cake recipe, but when you pull your pan out of the oven, you realize the cake didn’t rise. Instead of being fluffy and moist, it’s flat and dense. You double-check the recipe and stop short when you see baking powder on the ingredient list. You left that out because you didn’t have any and you figured it wouldn’t matter. You did everything else perfectly, so how could leaving out this one ingredient have such a big impact?

You may never have thought there could be a similarity between baking and auditing, but in both cases, leaving out one key ingredient can ruin the outcome. You’d be amazed how often it happens.

Why Playing Games is a Brilliant Move

Whether you’re rolling the dice to move past “Go” or speeding around curves like Mario, numerous studies show playing games of almost any kind stimulates thinking. Board games, chess, word games, games of strategy and the like are obvious choices. But did you know shooting hoops, playing interactive video games, golf, even playing charades in your living room, are all brilliance-builders too? Name the game and chances are it helps you think better and think faster, but note that different types of games enhance different parts of your intellect.

Advice From Your Peers – 6 Tips to Acclimate to A New Role

There’s no doubt that starting a new role, whether in the same company or a new one, can be stressful. Between learning the culture of the organization and remembering all the new names, your first few weeks can be overwhelming. Half the battle is learning the inner workings of your new teammates – so how do you manage this?

To find out how CPAs deal with this life change, we put out a call for responses on AICPA social media channels; here’s the advice we heard.

David Pope, CPA, CGMA

“Learn the personalities and the culture of the team. Watch for cues about the motivational drivers for each member and develop an understanding of what you can expect from each. This will help you to integrate quickly and to know when to push and when to back away.”

Getting Started with Innovation

Innovation and Accounting may sound like an odd pairing. But they don’t have to be!

Innovation is often used to describe the act of doing something new, creative and risky. This definition - especially the part about risk - may not align with traditional accounting ideals. But consider this, if you are not the disruptor, you will likely get disrupted. Innovation may seem risky, but ignoring it could prove fatal.  Given the magnitude and speed of change throughout the world, innovation is a necessity for your career, your clients and the profession. Done well, embracing innovation can help reduce risk as you cast a keen eye on what lies ahead rather than hold on to the past. Let’s explore three simple steps (plus a bonus step) to get started with innovation.

6 Ways to Up Your Networking Game

I used to be afraid of networking. As an avowed introvert with a moderate case of shyness, too often I would pass up opportunities to meet and connect with people. Much later in life I would discover that networking was an acquired skill and was well within my reach. I let go of my fear of rejection when I realized that networking was not about me, but was about building relationships and finding ways to be helpful to others. I can do that. You can too.

Networking, at its essence, is the simple but profound activity of creating, freshening and strengthening an array of mutually beneficial professional relationships with a diverse cross-section of people. Here are a few tips that will help you up your game, especially when meeting people at events or in large groups.

4 Simple Ways to Squeeze in Exercise During Busy Season

During tax season, accountants become accustomed to burning the midnight oil. Our long days turn into nights and nights into weekends. In the midst of our busy routines, it’s hard enough to balance career, family and a multitude of other obligations, let alone give adequate attention to physical exercise.

Carving out time for regular exercise is vital. Not only does it come with a variety of health benefits, but it also helps your mind work more efficiently. By investing in yourself and devoting energy to daily exercise, you will reap the rewards of better physical and emotional health as well as enhanced cognitive function – something we all need in order to conquer the busy season.

FASB New Not-for-Profit Standard: Maintaining Auditor Independence

Although the Financial Accounting Standards Board’s new not-for-profit financial reporting standard (ASU 2016-14) does not go into effect until 2018, it includes significant changes that both not-for-profits and auditors should begin preparing for now.  

ASU 2016-14 will require several modifications to the existing framework of the financial statements as well as new required disclosures related to liquidity, availability of assets and board-designated net assets. Further, it may require organizations to revise certain policies and procedures, update financial reporting practices and make net asset accounting adjustments. All of this could seem overwhelming. 

Here’s the Skinny on Driver’s License Information for State Tax Returns

As you have probably heard, several states have added a request or a requirement for a driver license number (or other state identification number) to be entered into the tax software system for the return to be electronically filed. As practitioners, you likely understand the reasoning for the request – this information helps states confirm the identity of taxpayers, which aids in reducing identity theft. However, the logistics of obtaining the information and explaining this requirement to your clients may prove to be difficult.

Here are some frequently asked questions (and answers) to help you with this issue.

Passing the CPA Exam: One CPA’s Journey

As many of you know, the journey to becoming a CPA is like no other—interesting, challenging, stressful, but nonetheless so rewarding in the end. Such was the journey of Shakor Jukes, CPA. An AICPA Accounting Scholars Leadership Workshop (ASLW) alumnus and currently an Audit Associate at RSM US LLP, Shakor credits his success to family, faculty, ASLW and his pure determination to succeed.

What the Personal Financial Planning Body of Knowledge Means for You

Early in 2016, I heard tax icon Sid Kess speak about how important it is for CPAs to understand what housing alternatives our clients might need to consider as they grow older. I thought, well that’s an interesting aspect of our work that I hadn’t considered, and began to educate myself about the options and opportunities in the communities I serve.

That advice couldn’t have come too soon: within a month, my dad began expressing concerns about taking care of his home and asked to look at some local housing alternatives. While I had made myself aware of a few, I quickly realized there are so many choices that I didn’t have time to explore them all. Unfortunately, my father’s health declined rapidly and we had to move him three times: from his home to senior living; from senior living to a nursing home; and from the nursing home to hospice care where he passed away.

What this really brought home is that the work we do as CPAs is not cut and dried, and goes beyond what many people envision when they think of our profession. It’s probably also more than many budding CPAs—and those long in the profession—think we do. But the fact is that we must continue to deepen our knowledge and expertise as our clients’ needs expand and grow.

7 Benefits of Cybersecurity Penetration Testing

Security breaches are prevalent in today’s business environment and reports indicate that these threats are not going away any time soon. As a result, organizations need to take steps to safeguard their confidential data and other sensitive information. Smaller-sized organizations like small businesses and not-for-profit entities are increasingly vulnerable. A recent study by Symantec found that email malware affected small businesses and large enterprises in equal proportions during 2017.

Even organizations with limited resources have affordable and effective options for protecting valuable data. I recommend penetration testing, a type of cybersecurity vulnerability assessment, to my clients working in the not-for-profit sector. Many of my not-for-profit clients feel compelled to conduct cybersecurity penetration testing when they consider how accepting online donations may create vulnerabilities for not only for themselves but also for their donors. Potential donors may feel more comfortable donating online once they hear that the organization has safeguards in place to protect their information. Penetration testing is performed by an outside, third party and can be tailored to the needs, or concerns of the organizations.

Get Ready to Face a Trifecta of Accounting Standards

The Big 3 Accounting Standards Updates (ASUs) ─ ASU 2014-09, Revenue from Contracts with Customers, ASU 2016-02, Leases, and ASU 2016-13, Financial Instruments – Credit Losses ─  from the Financial Accounting Standards Board pose significant challenges for CPAs. And, as their effective dates loom near, more and more practitioners are coming to realize the substantial level of work involved in applying these standards.

The Center for Plain English Accounting, the AICPA’s national A&A resource center, is receiving and answering quite a few inquiries about how to apply these standards. We recently celebrated our third anniversary of providing our members with valuable guidance on a wide array of accounting, financial reporting, auditing, compilation, review and preparation topics. Recently, we have been especially focused on providing our members with in-depth and practical implementation guidance on the new revenue recognition, leases, and credit loss standards. Below are three implementation questions and answers that we’ve selected to share with you.

ID Theft: Two Prevention “Hassles” Worth Your Time

Even if you aren’t personally a victim of identity theft, as a CPA you still bear the burden of combating it on behalf of your clients. More often than not, for tax practitioners, the big cost is your time.

Recently, to help combat thieves, the IRS implemented various authentication measures, which emerged from the Security Summit. While many of these measures may not be noticed, some are quite visible. One measure, two-factor authentication for e-Services, has already prompted comments and complaints and another, the optional W-2 pilot program, is not being used much by practitioners and I suspect time has a lot to do with that too.