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ACA: Step Away from that Form 1095 ‘Til You Read This

ACA: Step Away from that Form 1095 ‘Til You Read This

“Never do today what you can as well do tomorrow” – Aaron Burr

Proceed with cautionThis statement, sometimes written in the context of postponing an unpleasant task, was originally expressed by our country’s third vice-president to acknowledge that in certain circumstances, a premature action may be regrettable. Alexander Hamilton would agree.

The same can be said for reporting on the Affordable Care Act: CPAs may regret completing any related forms without first taking some precautions. We are in the business of helping our clients with a full range of accounting and tax needs, so offering services in this space seems to fall neatly into the area of tax compliance. This is a compliance matter, but the nature of the material required to prepare these information returns adds an additional level of complexity. CPAs who aid clients with the completion of these forms need to consider the applicability of privacy rules under the Health Insurance Portability and Accountability Act (HIPAA).

Providing these services involves reviewing information that is non-financial in nature, including confirming health insurance coverage obtained by spouses and other family members.  As part of the engagement acceptance process, CPAs should consult their legal counsel and professional liability insurer to determine if they are qualified to perform these services, and if HIPAA rules apply. If so, the CPA is considered a business associate and would be obligated to execute a separate business associate agreement (BSA).

This document would allow the covered entity (i.e., a health plan) to disclose certain protected health information to the CPA. The designated business associate (CPA) would provide satisfactory assurances that the firm will appropriately impose safeguards on the information it receives. To help you consider what a BSA might look like for your practice, the U.S. Department of Health and Human Services has sample Business Associate Agreement provisions.

During 2014 (now thought of as the good old days),  employers only had to comply with basic requirements related to making sure that their medical plans met certain coverage restrictions, waiting period limits, etc.  The employer incurred no costs if they chose to not offer health care coverage to their employees, nor was there any separate reporting requirement besides providing the value of health insurance coverage on an employee’s Form W2.

Although only one year has passed, the reporting landscape has changed dramatically. Employers may incur a sizable cost to accumulate the data necessary to demonstrate that they offer adequate coverage and are not subject to any additional penalties. Complicating matters, this is often information that employers don’t track.

Before you determine if the employer is subject to any additional penalties, an immense amount of information is required to be accumulated by the employer, some of which is not easily obtainable.

Although businesses are required to gather the information necessary to complete these forms, we as CPAs need to educate employers and inform them as to what information is required to be obtained and how to submit it   in a timely manner. This fact sheet on Applicable Large Employers from the Tax Practitioner’s Toolkit may help, as well as these Small Business FAQs.

The Employee Shared Responsibility Payment (ESRP) is imposed on employers with greater than 100 full-time equivalent employees (FTE). However, employers with more than 50 FTEs are subject to the reporting requirement related to the coverage afforded to individual employees. The determination of the number of FTEs for both the ESRP and the annual reporting requirement is based on the prior calendar year.

In addition to information about the employee’s status as a FTE, the form must also report the type of coverage, if any, offered to the employee, the employee’s spouse and the employee’s dependents. (For more information on what data needs to be gathered, review this fact sheet from the IRS.)

The clock is ticking to file these forms — 1095-B/1095-C forms must be sent to individuals no later than March 31 and filed with the IRS no later than May 31 (or June 30 if filing electronically). Employers who fail to comply with these deadlines may be subject to penalties for the failure to file correct information returns and failure to file correct payee statements. The penalty is up to $250 per return with a maximum penalty of $3 million per calendar year. For 2015 reporting, the IRS has announced they will not impose these penalties on filers who have made good faith efforts to comply with the reporting requirements.

If you prefer not to undertake this type of engagement, seek the assistance of another service provider who is qualified under HIPAA and allow for the client to comply with these complex reporting regulations.

Our clients need our help in understanding myriad rules related to the ACA. It is our job to provide that assistance to them when it is appropriate. As professional advisers we must also recognize that other competent individuals might be required to be brought to the table. By assembling the right team, our clients can do the work that needs to be done today and not put it off until tomorrow.

Henry Grzes, CPA, Lead Technical Manager-Tax, American Institute of CPAs. 

Proceed with caution courtesy of Shutterstock. 


     

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Source: AICPA

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Update on Taxes and Terrorism: Why Clients’ Data Could Become Vulnerable

Update on Taxes and Terrorism: Why Clients’ Data Could Become Vulnerable

Data breachSince this article was initially published in December 2015, the FBI has attempted to compel Apple, Inc. to defeat its own encryption for the purposes of accessing the information on the iPhone of Syed Rizwan Farook, perpetrator of the mass shootings in San Bernardino in December of last year. Apple has thus far refused to obey a federal court order to provide access to the phone, based in part on a first-amendment argument that code-writing constitutes free speech. A federal court in California will hear arguments on March 22, but promises from both the Justice Department and Apple, Inc. to appeal any decision against their respective cases mean the dispute is unlikely to conclude at that time. The case is certain to have far-reaching implications for the nature of digital security both here in the United States and abroad.

The world watched and listened in horror recently as reports of terrorism in Paris and San Bernardino, Calif., dominated the airwaves. In what is becoming a regrettably familiar scene, countries around the world joined the victims in mourning. But as the days wore on, attention increasingly turned to the covert, encrypted digital communications of the perpetrators. The government has begun questioning the wisdom of unbreakable encryption as a result. It might all seem a million miles from the concerns of tax practitioners. But is it?

In the wake of potential terrorist attacks, government officials are again addressing the complexities of obtaining intelligence data in an encrypted world. John Brennan, Director of the CIA, recently outlined these complexities in a talk at the Center for Strategic and International Studies in Washington:

“In the past few years because of a number of unauthorized disclosures and a lot of hand-wringing over the government’s role in the effort to try to uncover these terrorists, there have been some policy and legal and other actions that are taken that make our ability, collectively, internationally to find these terrorists much more challenging. And I do hope that this is going to be a wake-up call.”

The hand-wringing and unauthorized disclosures to which he is referring came after the revelations of the Edward Snowden leaks. Companies such as Google and Apple, among others, took steps not only to strengthen the encryption employed on their devices, but also to make sure even they cannot force their way in. Rights to privacy, they reasoned, trumped the government’s right to collect information, especially if that information was being obtained as a result of a legal gray-area.

The Two Sides of the Argument

From the perspective of the agencies charged with protecting Americans, there should be no haven for illegal communication. They argue that when strong encryption prevents them from accessing emails, texts or other communications among suspected terrorists, they are unable to anticipate and prevent attacks. For these agencies, the answer is simple: a “backdoor,” or concealed way available only to the government to unencrypt data.

But that backdoor might not remain available only to the government, argue the tech companies. They liken this idea to putting a key under the mat; safe as long as you are the only one who knows it’s there, but not for long once someone else finds out. The tech companies say leaving an entrance for government means creating an eventual gaping hole for thieves and worse, as well.

Keen to avoid complicity both in illegal search and seizures, and in the commission of thefts, the tech companies are adamant that there should never be a backdoor for any government agency to circumvent encryption. Independent tech experts agree.

Many point out that even if American companies were to comply, no such mandate for government access to encrypted systems exists globally. In short, terrorists could simply get their cell phones, tablets and laptops from another supplier in another country, and be right back at covert communication. Furthermore, they argue, the government’s record in selectively capturing private data is hardly pristine.

Meanwhile, government agencies struggle to address real-world threats, many times with their hands tied. While metadata–which contains information such as the identity of senders and receivers–is not usually encrypted at all, communications such as texts and emails that might go strictly from one device to another without a server intercept are inscrutable without some kind of access.

Why Does This Affect Tax Practitioners?

Right this very moment, the computers and mobile devices at your practice are brimming with sensitive customer data: Social Security numbers, bank account numbers, phone numbers, addresses, and much more. If you employ best practices, these devices are secured from internet access, behind one or more firewalls, and their data stored on encrypted drives.

If the recent tragedies lead to changes in the law, before long your encrypted drives and other devices could have a legally mandated backdoor installed for government access. If a hacker should discover how to exploit that back door (and let’s face facts, they usually do), the information you store could be up for bids.

With new hacks on giant corporate servers happening daily, we are seeing more theft of private information than ever before. As a steward of the data that makes your clients’ financial lives possible, it is important to keep up not only with best practices for securing that data, but also with laws that could affect your ability to do so effectively.

For now, it’s a very good idea to review your security practices with your IT provider. Stay abreast of developments in the law, Assure you are using updated versions of all your software, and review best practices for securing client data with your staff. It’s the best way to gird yourself against experiencing any more tragedy.

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Source: AICPA

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Changes to Lease Accounting Have Been Announced. Are You Ready?

Changes to Lease Accounting Have Been Announced. Are You Ready?



LeasesRegardless of the type of business that you are in, there is a good chance that you have been involved in a lease transaction. Whether you have rented space in an office building or leased vehicles or manufacturing equipment, you have most likely been exposed to lease accounting in one way or another.

While you may not have been required to recognize these leases on your company’s balance sheets in the past,  with the Financial Accounting Standards Board’s new leases standard, the accounting is about to change. In addition, you will want to pay close attention as the new standard applies to all type of entities— including public, private and not-for-profit organizations.

Under the new standard, lessees are required to recognize assets and liabilities arising from all leases, except for agreements that have a lease term of 12 months or less. Generally, lessor accounting will be similar to current GAAP; however, both lessor and lessee disclosures will change.

Public entities will be required to adopt the new Leases standard for reporting periods beginning after Dec. 15, 2018 while; nonpublic entities will have an extra year to adopt. Early adoption is permitted.

For more information on the new standard and the AICPA’s planned implementation resources, watch this brief video.

Our Financial Reporting Center leases webpage contains up-to-date information on the new leases standard. Please check back often, as we will be adding valuable resources frequently.

Fred Gill, Senior Technical Manager- Accounting Standards, American Institute of CPAs.

Building image courtesy of Shutterstock


     

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Source: AICPA

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6 Ways Women CPAs Can Accelerate Their Careers

6 Ways Women CPAs Can Accelerate Their Careers



WomenMarch is Women’s History Month, a worthwhile time to consider the many contributions that women have made to our country’s progress. In fact, this is also an interesting time in the history of women in the CPA profession. Given the retirement of the large Baby Boomer generation and the fierce competition for talent, it’s clear that the profession is evolving to create more opportunities and to attract and retain a more diverse range of professionals.



And that’s good news for women, because the accounting profession is a great place for us to be right now. The career opportunities for women are endless — both in public practice and management accounting. How can you take advantage of these opportunities to find the success you’re seeking?



Here are a few tips for making the most of the options I believe are awaiting female CPAs today.

  • Consider your path to promotion. Do you know where you’d like your career to lead –and the route you’ll need to take to get there? Take some time to determine your goals and then talk to a supervisor, mentor or coach about the best ways to reach them. Those in charge may not realize your aspirations unless you share them.

  • Remember that the way forward may not always be straight. CPAs have an incredible ability to move among and within organizations to find our passion. Review the many openings available to see which ones best suit the career you want to build. If you’re concerned about work/life integration, you may find that your employer is open to accepting an alternate schedule or career path.

  • Don’t go it alone. There are actually three parts to this step:

  1. Find a great mentor. Mentoring can provide professionals with the tools and confidence they need to succeed. I’ve found that it’s certainly possible to learn from different kinds of mentors. Don’t concern yourself with gender. Mine have been mostly male, and their perspectives and advice have been invaluable. 

  2. Build a strong support system. Your mentor will be your first source of inspiration and feedback, but it’s also a good idea to put together a “personal board of directors,” people at different levels and with different viewpoints and experiences who can offer advice or serve as a sounding board in a wide range of situations. They can be a source of great ideas and give you added confidence in your own decisions. And remember that asking for help is not an imposition or a sign of weakness, but a smart acknowledgement of what you need.

  3. Cultivate your network. Building relationships is important, including those in and outside the profession and with people you meet in person or through social media. It can help you expand your knowledge and skills — and your professional horizons.

  • Take risks. A good stretch assignment can move you to the next level in your career, but that often means being willing to take on a job that may seem daunting and outside your comfort zone. Having been thrown into advanced roles I wasn’t certain I could handle, I found it is amazing what we can do when we put our minds to it. Believe in your ability to drive organizational value and go for that promotion even if you think you are unprepared or ill equipped. It’s unlikely you were tapped for advancement if you didn’t deserve it. 

  • Promote yourself if you want to be promoted. Self-promotion is hard for many of us, but opportunities for growth don’t come around often, and you may miss a great chance if people aren’t aware of your accomplishments and your potential. Avoid selling yourself short in terms of your capabilities and ability to adapt.

  • Accept a lack of perfection. It’s tough to be good at everything at once. On some days, you’ll feel that you’re a superstar on the professional side but not so much on the personal side, and vice versa. Recognize that the two sides will likely balance out in the end and appreciate all that you actually have accomplished in the meantime.



Finally, I would urge women CPAs to trust themselves. If you believe in yourself, others will pick up on that attitude. And why shouldn’t you feel confident? Businesses know they need women to create and drive value. More importantly, they are acutely aware of studies showing that businesses with women in leadership roles perform better than businesses that do not. That means strong, intelligent women — like my fellow CPAs — are at a premium. This is a great time to make your own history, so don’t miss the chance to do it.

The AICPA Women’s Initiatives Executive Committee has created a wealth of resources to help women interested in advancing their careers, including mentoring information, tools related to work/life integration, research and an AICPA Women in the Profession LinkedIn group. The Women’s Initiatives Executive Committee will launch an online mentoring program after busy season. You can register in advance by clicking here. Check out the resources available today to learn how they can help you find your own success.

Susan S. Coffey, CPA, CGMA, is Senior Vice President- Public Practice & Global Alliances, American Institute of CPAs.

Women in business courtesy of Shutterstock



Source: AICPA

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5 Cybersecurity Precautions for Small CPA Firms

5 Cybersecurity Precautions for Small CPA Firms

Cybersecurity small firmsWith busy season off to another running start, it’s important to remember that cyber attackers are busy too. With readily monetizable information on hand that can be sold easily on the black market, your practice is an especially attractive target for attackers.

Frequent news reports of breaches at large organizations and government entities might lead you to believe you don’t stand a chance if targeted. Fortunately, this is not the case. The following basic precautions can significantly reduce your risk and mitigate damage if you experience a cybersecurity incident.

  1. Locate, classify and separate information by risk level. The highest risk information for most firms is going to be financial account information such as bank routing and account numbers, credit and debit card numbers, and usernames and passwords for online account access. This information should be protected with a high level of security and stored separately from other client records. Because industry safeguards typically require names of authorized users, billing addresses, employer identification numbers and Social Security numbers to gain access to accounts, a system that stores information used to authenticate account numbers separately from the numbers themselves can mitigate losses should a security breach occur.

  1. Assess business processes. Now that you’ve classified your information, it’s time to look at your business How is sensitive information transmitted between clients and your office? A secure client portal or encrypted e-mail should be used to reduce the risk of information being intercepted. Which staff members in your office have access to sensitive information and why? Access should be restricted to those who have a specific business need for the information. Your system should automatically create a log entry every time sensitive information is accessed. Because hackers increasingly circumvent security measures by deceiving staff members who have legitimate access, it’s important to train your staff on information security policies and techniques hackers use to gain access through social engineering. You should never store your highest risk information on unencrypted portable devices such as laptops, tablets, smartphones and thumb drives.

  1. Review security technologies. Start with your network firewall. It should be installed and configured by a network security professional, updated automatically and reviewed annually. PCs should have virus protection software installed and be set to receive automatic updates for both virus protection and the operating system. Any portable device, including laptops, tablets, smartphones—and especially thumb drives—used to store or access sensitive information should be encrypted. If you accept credit and debit card payments, as of Oct. 1, 2015, your card terminal and processing system need to be EMV compliant to avoid liability in the event of certain types of fraud.

  1. Conduct due diligence on service providers. Cloud-based software providers and other service providers can be a great resource to keep your practice efficient and secure. However, they can also be vulnerable to attack. Ask to see your service provider’s SOC 2® report. Have they detected any security breaches, and, if so, how have they been resolved? And, finally, ask about how secure the connection is between your computers and their servers. Any provider still using SSL rather than the newer TLS encryption protocol is vulnerable to attack.

  1. Develop an incident response plan. In the unfortunate event of a security breach, you should have a plan in place to determine when the incident occurred, identify client information impacted and notification requirements. According to the National Conference of State Legislatures, forty-seven states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands have enacted legislation requiring private, governmental or educational entities to notify individuals of security breaches of information involving personally identifiable information. Click here to look up the law in your jurisdiction. Although provisions vary, generally you should be familiar with your jurisdiction’s definition of “personal information,” what constitutes a breach and notification requirements. Many jurisdictions provide exemptions for encrypted information.

Access information, news and resources on cybersecurity at the AICPA’s new online resource center. You’ll find learn about protecting client information and providing advisory and assurance services related to cybersecurity.

Jeffrey Streif, CPA, CISA, PCI-QSA, CFE, heads the cybersecurity consulting and assurance practice for the St. Louis office of UHY LLP. Bruce Sussman, CPA, CISA, CIPT, CISSP, is PCI Global Executive for AIG in New York. Streif is a member of, and Sussman is co-chair of the AICPA’s Information Management and Technology Assurance Section’s Cybersecurity Task Force.

Cybersecurity courtesy of Shutterstock. 

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What’s a Hooraycation, and How Can I Go on One?

What’s a Hooraycation, and How Can I Go on One?

GalapagosGetting Away from it All After Busy Season: Trips for Any Budget

As busy season finally draws to a close, your senses dulled by long nights staring at a monitor and routing through piles of disorganized receipts, you might understandably be thinking about taking a well-earned break. Recharging your batteries, getting acquainted once again with those people who share your house and enjoying a few days of relaxation mean different things to different people, but in the end it always comes down to budget. Here are three family-friendly vacation types you can plan today, designed for modest, moderate and extreme budgets.

The Staycation (5 days, family of 4: $750-$3,000+)

Staycations have gained popularity in the past decade, due to an economy in recession. People seeking a break from the world have found travel too costly and have turned to exploring their backyards for a change of pace.

If it sounds dull to you, it need not be. The staycation isn’t just about saving money; it’s about finding the fun nearby. If you live in or near a major metropolitan area, it’s unlikely you know every nook and cranny of it. Look for exotic restaurants, museums, art galleries, botanical gardens, zoos, or historical tours. If you prefer nature, look to your state or national parks, beaches, or eco-tours. You can plan a full week of activities for you and your family, and for extra savings, use home as your base; look into spending a little on a cleaning service and laundry for the week, so home feels a little more like a hotel. and you have less to think about. If you want to spend a little more, use one of the many hotel discount websites to find lodging appropriate to your budget.

If it’s just you and your spouse, a staycation has even more possibilities. Seek out your area’s best hotel/spa combination and book yourself a few days of pampering. Hotel spas often run independent of the hotel itself, so you don’t need to stay there to take advantage.

The staycation can happen anywhere within a few hours’ drive from your home, so think outside the box, and get ready to recharge. A few tanks of gas run far less than airline tickets, so this might be just what you need if you don’t have much to spend, but need to get away.

The Playcation (5 days, family of 4: $5,500+)

A playcation allows you to get away from it all and enjoy a total change of scenery. The expense is greater because you’ll want to fly to your destination (unless you have substantial time off), and you’ll need somewhere to stay.

Travel websites offer vacation packages that bundle hotel, airfare, and sometimes even rental cars into a single, per-person daily cost and keep expenses lower. Prices vary depending on how far you travel, as well as where you go and when, but can be as little as a few hundred dollars per person per day.

Warm-weather destinations see a spike in tourism around spring break, and prices often reflect that reality. That’s not to say you can’t find deals to places like Miami, Orlando or Austin, but you’ll need to do more footwork. Branching out to nearby countries such as Mexico or the Bahamas can be a great way to get the beach vacation you want while reining in expenses.  If you do venture out of the country always remember to check with the State Department for a list of travel advisories, which list regional concerns such as conflicts, political unrest or dangerous health conditions such as the Zika virus. Also, recent changes in border entrylaws now mean you need a passport to travel to the few countries Americans could once visit with only a valid I.D., so be sure your family is covered

If cooler weather is your thing, spring is a great time to travel. You can get great deals to travel to northern cities and destinations from airlines, as well as reduced rates on under-booked hotels. If you want to get exotic without breaking the bank, Canada offers everything from major metro areas like Toronto, to charming Euro-feel cities like Quebec City and Montreal, to wilderness lodges, fishing and hunting excursions and much more. Exchange rates tend to fluctuate moderately between the U.S. and Canada, and many vendors accept U.S. dollars if you don’t want to bother (this seldom works to your advantage, though).

Vacations at this level often benefit from professional planning. Travel agents usually cost nothing, and can offer you multiple options for your budget. They work well if you aren’t sure where you’d like to go and need some guidance.

Unusual destinations on a Playcation budget: Taos, New Mexico; Lutsen, Minnesota; Venice Beach, Florida

The Hurraycation (5 days, Family of 4: $12,000+)

Maybe busy season was really good to you. The sky is the limit. France for art and culture? Kenya for a photo safari? When options are unlimited, the bank better be willing to oblige.  While the ultimate vacation often makes us think of faraway places, think of what your top-of-the-heap budget could buy you closer to home. Always dreamed of traveling in style? How about first-class tickets and luxury accommodations to a destination in the U.S., Canada or the Bahamas? Daily spa treatments, exciting outdoor excursions, incredible cuisine—you can enjoy the finest on offer guilt-free when you don’t have to think about 6+ hour flights, foreign hotels and all the expenses they represent. There are the usual destinations like Orlando, Miami, Los Angeles, Niagara Falls and Yellowstone. But cities like Chicago, Dallas and Atlanta have much to offer well-heeled travelers as well.

Of course, you might have your heart set on something more unusual, and here again is a good time to talk to a travel agent if you don’t have a good idea of where you might like to go. Be sure to mention your interests, any special needs and most importantly, your budget. When travelling abroad, remember that less-frequented cities and regions can be far less expensive for food and accommodations, and can give you a better sense of local color and culture. Think Lyon instead of Paris, Graz instead of Vienna, Seville instead of Madrid. In most cases, you can still take day trips to see the better-known locations without paying the price of being a tourist staying in them. Be wary of quick currency exchange kiosks, and stick to major banks for exchanging any large sums of money. It’s best to travel abroad with traveler’s checks, which can protect you from loss and theft, and bring only minimal U.S. currency with you.

Unusual destinations on a Hurraycation budget: Irkutsk, Russia; The Galapagos Islands, Ecuador; The Principality of Liechtenstein

Whatever your destination, and  whatever you have to spend, you’ve earned a break. Even if you can’t get away right now, planning a vacation for down the road is an excellent way to focus on the prize for all your hard work. Congratulations on a great season, and have fun on your vacation!

Adam Junkroski, Lead Manager-Tax Communications, American Institute of CPAs.

Santa Cruz Island, Galapagos Islands, Ecuador courtesy of Shutterstock.

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Source: AICPA

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From the Frontlines: Meet Kimberly Ellison-Taylor, CPA, CGMA

From the Frontlines: Meet Kimberly Ellison-Taylor, CPA, CGMA

Welcome to the first post in a series focused on sharing the perspective of diverse CPAs

Kimberly Ellison-TaylorFull disclosure: All through my years in school, I was known as a teacher’s pet. Some kids may have been discouraged by this status, but it didn’t bother me. I had my heart set on a career—at the ripe old age of 8—and that was to become a CPA.

So I went out of my way to surround myself with educators — teachers, principals, librarians — that set high expectations for me and helped get me closer to that goal. Moreover, they returned the favor by setting high expectations for me. There was always a voice in my childhood saying, “This little girl has potential.”

Of course, having potential is just the beginning. Moving the needle to accomplishment takes hard work and the right people in your corner, a combination I’ve wholeheartedly embraced on my path to success.

As we conclude Black History Month, I think back to my formative years and the unwavering support of my parents and their emphasis on education. Not so long ago in U.S. history, severe systemic impediments would have blocked the educational and professional journey of someone like me. Breaking through during that era required no small amount of determination, and I’m in awe of pioneers like John Cromwell Jr., the first African-American CPA, and Mary T. Washington, the first female African-American CPA.

With their legacies in mind, what are my thoughts about the progress we’ve made in the profession?

For starters, I represent the CPA who grew up in an inner-city, majored in information systems and not accounting (because an accounting major was not offered and I had a full scholarship), studied accounting in community college, and then later earned MBA and M.S. degrees.

John and Mary would appreciate that my career path would be considered unconventional and unexpected — probably similar to theirs. On the other hand, when I meet with minority and underrepresented CPAs across the country, I find that the road less traveled is often a common thread. The key point I stress is this: our paths may have been different than traditional CPAs, but that does not mean we have less knowledge or abilities.

In fact, my detour into information systems turned out to be one of my greatest professional differentiators. At a time when computing began to affect every aspect of daily life, I had an advantage: fluency in the language of the CPA and tech world. Yes, I followed a different career playbook, but it has served me—and the organizations I’ve worked for—so very well.

Consider if my path had been held against me, simply because it fell outside of what is considered the norm. It’s time to reevaluate the perceived notions of what qualifies as conventional and I’m actively engaged in a greater conversation around diversity and inclusion. CPAs are bolder about broaching that topic. I’ve been very pleased with this awareness in the profession, including the inroads made in the executive suite. Leaders have realized that organizational inclusiveness takes effort.

We can make the next wave of progress with middle management and how they approach recruitment and talent development. Whether true in practice or not, underrepresented minorities have the perception that hiring practices are inconsistent at best. What’s driving the view? Perhaps underlying processes or unconscious biases validate the concern. The solution? We must address the environment that perpetuates the perception and taking the time to acknowledge this issue is a great place to start. I ask every company I visit to review their hiring policies to see if standards are consistent throughout the organization. I’m asking you to consider it as well.

I know the AICPA is serious about diversity and inclusion. The board of directors is serious about diversity and inclusion. As more and more CPAs join our efforts, changes should filter into all areas of organizations and the profession overall. That’s one of the best ways we can advocate for future talent — so up-and-coming CPAs can see a place for themselves within the profession.

As for continuing my year as vice chairman, I am so excited. I am standing on the shoulders of giants like John and Mary. Forty years ago, this role wouldn’t have been a possibility. It’s an honor, I am so appreciative, and wherever I am needed, I will make myself available. I’m raising my hand. I hope you’ll join me.

Kimberly Ellison-Taylor, CPA, CGMA , Vice Chairman of the Board of Directors, American Institute of CPAs.

 

 

 

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Writing Off Expenses on a Martian Farm: The Trouble with Oscar-Nominated Clients

Writing Off Expenses on a Martian Farm: The Trouble with Oscar-Nominated Clients



LeoIt’s Oscar season, and this year’s list of nominated films includes many characters you definitely wouldn’t want to meet in your reception area on a frantic Saturday morning. As busy season gets into full swing, here are some potential nightmare clients from current and past Oscar-nominated movies that you’ll be happy you don’t have to face in person.

Hugh Glass, “The Revenant.” The bearskin coat kind of says it all, doesn’t it? It’s certainly going to set this man apart from most of the usual clients. Glass is a fur trapper who’s left for dead and faces extraordinary hardships during a long, harrowing journey through the wilderness. At some point he wins a tough fight with a grizzly and uses its skin as a coat. Understandably, he’s not a big talker, so it will be hard to determine his long- and short-term financial goals. You also have to expect that much of his documentation for income and expenses is hard to locate.  

Mark Watney, “The Martian.” Talking about working with a client remotely! This takes virtual services to a new level. And while you may have wrestled with the complications of filing for U.S. expatriate or foreign clients before, when you deal with interplanetary tax situations you’re really breaking new ground. Another wrinkle: Where and how are you supposed to report information on income and expenses from Watney’s Martian farm?

Vito Corleone, “The Godfather.” He seems like a nice enough older gentleman, but the sullen associates who accompany him at all times are downright creepy. Since this crime boss’s must famous quote is, “I’m gonna make him an offer he can’t refuse,” you may want to think twice about saying no to him. Other complications might include a very spotty paper trail for the family’s businesses and trouble getting in touch with various family members or business associates because they tend to, umm, disappear.   

Llewellyn Moss, “No Country for Old Men.” He runs into your office clutching a bag of cash, $2.4 million to be exact. He seems extremely nervous, almost as if someone is following him. That’s because the main character in this movie, which received the best picture award in 2007, has stolen the money that was left behind when a drug deal went horribly wrong. This man could be the poster boy for the section of your client acceptance checklist marked “Decline.”

Gollum, “Lord of the Rings: Return of the King.” In this 2003 best picture winner, Gollum remains as shifty and unreliable as ever. Because he’s obsessed with a ring that he calls his “precious,” it may be quite a challenge to get him to focus on sound financial planning and asset management, especially since his age and expected retirement date could be hard to estimate. It might also be tough to get any final decisions out of him and his kindly alter ego, Sméagol. And definitely don’t let him take you on any walking tours of volcanoes.  

Matthew Burry, “The Big Short.” He spends his days slamming on his drum set along with loud heavy metal music. He prefers not to wear shoes. He’s also a genius who was one of the few people who anticipated one of the worst financial crises in history and chalked up returns of nearly 500% on his hedge fund as a result. Given his mix of outstanding success and strong and eccentric personality, he will definitely be a client who will inspire mixed feelings and require more than the usual hand-holding.

Which famous movie character would you least like to see walking through your door? Considering that question with other firm members could be a fun activity during busy season. It will definitely help you appreciate your real clients even more!

 

Leonardo DiCaprio image courtesy of Shutterstock

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Source: AICPA

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Expert Advice on Not-for-Profit Board Service

Expert Advice on Not-for-Profit Board Service



Board membersThe AICPA Not-for-Profit Section recently hosted a Facebook chat providing advice for those looking to join a board of directors. The event was an opportunity for the public to engage in a conversation with experts working with not-for-profits and serving on boards.

Two members of the AICPA Not-for-Profit Advisory Council were online to answer participants’ questions during the chat. Carolyn Mollen, CPA, is the Chief Financial Officer at Independent Sector, a leadership network for nonprofits, foundations and corporations. Brian Yacker, JD, CPA, is the Managing Partner of YH Advisors, a CPA firm focused solely on addressing the tax, legal, audit and accounting needs of all different types of charitable and other tax-exempt organizations.

Since the chat was such a success, we wanted to share a few of the top questions on AICPA Insights.

 

Question: What are the challenges faced by nonprofits today?

Carolyn: Too many to list! In all seriousness, non-profits face many of the same challenges as the private sector, including information security issues, changing technology, talent recruitment and retention, and general economic pressures. However, not-for-profits also must deal with challenges unique to the sector, such as a changing funding landscape and how to find effective ways to measure impact and evaluate performance.

 

Question: Is it standard for not-for-profits to expect board members to act as fundraisers? If so, would it be better to turn down a position as a fundraiser if you aren’t confident in your fundraising abilities?”

Carolyn: In my experience, asking board members to assist with fundraising is very common in organizations that rely on donations as a revenue source. The board has a fiduciary responsibility to ensure that the organization has adequate resources to serve its mission, and fundraising is often a key component to this. Before joining a board, it is always a good idea to ask about fundraising requirements and make sure that it is something you can commit to comfortably. From an organization’s perspective, I’d recommend evaluating fundraising requirements carefully to ensure that you are able to recruit the right balance of skills and backgrounds, however. While having a well-connected board focused on fundraising can be a great thing in terms of bringing in revenue, it can lead to problems if the board lacks diversity and skills in other areas.

 

Question: What has been the most rewarding aspect of being a not-for-profit board member for each of you?

Brian: For me, being able to play my part in the furthering of an organization’s charitable mission is most rewarding aspect to me.

Carolyn: Board service has been a way for me to connect with organizations and causes that I feel close to and feel like I’m able to add value. I’ve been drawn in particular to theater organizations because in my past life, I was a theater major and thought for a long time that would be my career. Board service has allowed me to take my professional skills and apply them to causes I care about.

 

Question: What is a conflict of interest and how do I know if I have one?

Brian: A conflict of interest exists when the personal or professional interests of a person affects his or her ability to be objective. In the board context, a conflict of interest arises when a board member (or anyone considered to be related to the board member) undertakes a transaction with the organization, even if the transaction involves the board member providing a discount for their services. Conflict transactions need to be highly scrutinized by the board before they are undertaken. Some conflicts may need to be reported on an organization’s IRS Form 990, the annual information return filed by most tax-exempt organizations, so it is important to have a conflict of interest policy. The AICPA Not-for-Profit Section has addressed the most common conflict-of-interest issues and crafted sample language for inclusion in a policy document you can download here.

The AICPA’s Not-for-Profit Section is a community that supports not-for-profit professionals and business advisors. For more information visit aicpa.org/NFP.

Sandi Matthews, CPA, Technical Manager, Not-for-Profit Content Development, American Institute of CPAs.

Board of Directors image courtesy of Shutterstock



Source: AICPA

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Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program

Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program

College can be very expensive – I’ve got reams of cancelled checks to my student loan provider to prove it – but it’s also the best way to increase one’s chances of economic mobility. A college degree is essential if you’re planning to earn a CPA license.

The AICPA has long been committed to ensuring that there is a strong supply of talented CPAs in the pipeline to help the profession continue to meet the needs of U.S. capital markets. One of the ways the AICPA does this is through our AICPA Legacy Scholars Program.

The program, established in 2011, awards recipients with a one-year scholarship. It uses on-campus service work to help them develop the soft skills, including leadership and communications, needed to thrive in the accounting profession. Scholarship recipients plan, promote and execute specific on-campus events each semester that promote the value of the profession to others. To date, more than 300 students have participated in the AICPA Legacy Scholars program

14089-331 AICPA Legacy Scholars Seal_color_FThe AICPA Legacy Scholars program comprises four distinct awards:

AICPA/Accountemps Student Scholarship

AICPA Foundation Two-Year Transfer Scholarship

AICPA John L. Carey Scholarship

AICPA Scholarship for Minority Accounting Students


The AICPA recently announced that the AICPA Legacy Scholars application is now available for the 2016-2017 school year. The deadline is April 1.

I sat down with Samantha Mitchell, who is closely involved in the day-to-day management of the AICPA Legacy Scholars program, to find out more details about the program and additional insights for students.  

James Schiavone: What role do on-campus events play in the AICPA Legacy Scholars Program? Why are those important?

Samantha Mitchell: As recipients of one of the AICPA Legacy Scholarships, our Scholars not only receive financial support but they are building and strengthening their soft skills. Through the process of planning and executing on-campus events, the Scholars are developing their communication, time-management and leadership skills. Completing these projects will better position them for life after graduation by giving them experience many of their peers won’t have.  

JS: How has the AICPA Legacy Scholars Program evolved over the years?

SM: Great question! We are always looking for ways to improve and enhance the program. One recent change was shifting the projects our Scholars perform to on-campus events that talk about the possibilities of a career in accounting and the benefits of the CPA. This change gave us the opportunity to unify the program, and allowed us to provide our Scholars with additional on-message resources to help their events be successful. 



JS: AICPA Legacy Scholars are Student Affiliate Members of the AICPA – what does that mean?

SM: The AICPA is the leading professional organization for CPAs. Being an AICPA Student Affiliate Member means students are part of that network. They get access to content to help them reach their goal of becoming a CPA. Plus, they’ll have exclusive scholarship application opportunities, discounts on conferences and special products. And luckily for them, it’s free to any student currently enrolled at a 2- or 4-year college or university.



JS: Anything you would like to add?

SM: If you’re planning to pursue your CPA, want to enhance your soft skills and would like the support of the AICPA behind you – check out the AICPA Legacy Scholarship application! Applications are currently being accepted online. You can view the full details and eligibility requirements at ThisWayToCPA.com/AICPAScholars. 

James Schiavone, Senior Manager – Public Relations, American Institute of CPAs 



Source: AICPA