Author: FFC

You may be familiar with CPA Evolution, a joint initiative of the National Association of State Boards of Accountancy (NASBA) and the AICPA that we’ve been discussing for more than a year.

In May, I wrote about the AICPA Council voting in support of advancing CPA Evolution. On July 24, NASBA’s board of directors also voted in support of advancing the initiative. Thank you to AICPA’s board of directors, AICPA Council, NASBA and NASBA’s board of directors for their support and the leadership they’ve provided since our two organizations began this initiative in 2018. I’d like to thank all of you as well for providing us with advice and ideas along the way.

With the votes of AICPA Council and NASBA’s Board, it’s official: we are pursuing a new model for CPA licensure.

This is a historic moment for our profession. The CPA licensure model is transforming — the Uniform CPA Examination is changing to better reflect the skills that newly licensed CPAs need today and will need in the future.  

We are moving forward with a core + discipline model for CPA licensure, with a goal of launching a new exam in 2024.

In this model, all candidates will complete a robust common core of accounting, auditing, tax and technology. Then, each candidate will choose a discipline in which to demonstrate deeper skills and knowledge. Regardless of chosen discipline, this model will lead to full CPA licensure, with rights and privileges consistent with any other CPA.

This new licensure model will continue to place our profession in the best position to meet the needs of firms, organizations, clients and the public we serve. And the model will be flexible enough to evolve as those needs and CPAs’ roles evolve in the future.

The changes to exam and education requirements won’t happen overnight. For the next few years, NASBA and the AICPA will work together along with the accounting academic community, state boards, state CPA societies, students, practitioners and other stakeholders to implement changes and ensure the successful rollout of the new licensure model.

What’s next for accounting academic programs and educators

A gap analysis with accounting program department chairs will be conducted in August to determine where curriculum changes are needed. This process will inform the tools we’ll develop for faculty to support them through the entire transition process, including a resource library, a high-level model curriculum, a model internship program and other faculty resources for the core and the disciplines.

Leadership of NASBA, in collaboration with the AICPA, determined that the Uniform Accountancy Act Model Rules around educational requirements for licensure need to be updated to create more consistency while incorporating additional subjects and skills reflective of the evolving profession. Those changes, which were endorsed by the AICPA’s Board of Directors, are currently exposed for public comment through August 31, 2020.

What’s next for the Uniform CPA Examination

The specific content of the core and the disciplines will be determined by a CPA Exam practice analysis, which is currently underway.

Practice analyses — gathering information about the current state of the profession and the work of newly licensed CPAs — are conducted by the AICPA periodically as part of ongoing efforts to maintain the validity and reliability of the Exam. The current practice analysis will likely wrap up in 2022, and an exposure draft laying out proposed changes to the Exam will be made available for public comment in mid-2022.

However, we don’t want to disrupt the pipeline of candidates who will have started their CPA journey before the new Exam launches. Accordingly, we’ll be working on a transition plan with state boards of accountancy for candidates who have started, but not completed, the CPA Exam process by January 2024.

A bright future ahead for the CPA profession

Thank you again for sharing your feedback on evolving the CPA licensure — we’ve heard from more than 3,000 CPAs, members of the accounting academic community, practitioners, students, technology experts, state CPA society leaders, state boards of accountancy and more stakeholders. Your feedback, questions and dedication to the profession helped guide us toward this solution for evolving CPA licensure. Together, we’ll keep the CPA strong for the future.

Susan S. Coffey, CPA, CGMA, EVP — Public Practice, Association of International Certified Professional Accountants

     

Related Stories

• Reflect on morale and team spirit as you consider reopening your office
• Pandemic teleworking causes state tax withholding issues
• Key risks when auditing a not-for-profit during the pandemic

 

A half-century ago, tax withholding was one of the simpler issues for taxpayers and practitioners. A more mobile society makes state tax withholding more complicated today given the ease of conducting cross-jurisdictional business and the increase in teleworking or remote work arrangements.

Meanwhile, the web of inconsistent state and local income tax and withholding rules affect employees and employers. As the AICPA testified, the myriad state income tax withholding laws and varying de minimis exceptions make compliance difficult and time-consuming.

In the wake of the coronavirus pandemic, more employees are teleworking, and state income tax withholding is a larger burden on employers.

Pandemic telework state tax issues

Determining the jurisdiction where an employee owes state and local taxes has become complicated as work arrangements have changed drastically during the pandemic. In addition to owing income taxes in an employee’s state of residency, without specific relief, the employee may also owe income taxes in any jurisdiction where they may have worked.  

The employee and employer may need to track all of the employee’s working locations. While some states issued guidance on withholding during the pandemic, that guidance has not been uniform or widely adopted. Additionally, whether a state has a reciprocity agreement may further affect withholding.  

Regardless of reciprocity or pandemic guidance, employees may still have a state and local tax obligation, even if employers are not required to withhold.   

Some states adopt AICPA recommendations

To address concerns with state income tax withholding during the pandemic, the AICPA developed recommendations for state CPA societies that want to advocate at the state level.  Specifically, the AICPA suggested states allow businesses to continue to withhold income tax (and the employee income tax liability) based on the location of the employer for newly telecommuting workers instead of the employee’s location. 

Using the location of the employer would help prevent a double tax when one state uses the convenience of employer test (AR, CT, DE, NE, NY and PA) to source wage payments and another state uses the physical presence standard. It’s possible that a resident’s state credit for taxes paid to another state may not cover all the nonresident state taxes paid. 

The AICPA suggested state and local jurisdictions:

• Allow businesses to continue to withhold income tax in the state where an employer is located.
• Allow the employee who is temporarily telecommuting to continue to pay tax to the state where employer is located.

Thirteen states (AL, GA, IL, IN, MA, MD, MN, MS, NE, NJ, PA, RI and SC) have followed our suggestion in providing guidance. We hope more states will follow with similar guidance.

In addition, 13 states (AL, GA, IA, IN, MA, MD, MN, MS, ND, NJ, PA, RI and SC), DC and Philadelphia followed AICPA’s recommendation (for state CPA societies to advocate) that an employee working remotely in a state due to restrictions would not create nexus and apportionment for tax purposes. Additionally, five states (GA, IN, IA, MA and RI) have provided that newly remote workers (because of COVID-19) will not count against companies taking P.L. 86-272 positions.

Federal legislation

To address this issue on a national level, the AICPA supports federal bipartisan legislation, S. 3995, the Remote and Mobile Worker Relief Act of 2020. The bill provides uniformity for nonresident state and local income tax withholding, and a reasonable de minimis exception from the assessment of state and local income tax in a jurisdiction in which an employee doesn’t reside.

The bill also provides businesses a framework to address the numerous state and local tax issues that have unavoidably arisen because of the changing location of employees during the coronavirus pandemic. With the increase of employees working remotely during the pandemic, the AICPA urged Congress to enact the legislation as soon as possible to ease our country’s nonresident state income tax withholding and compliance burdens.

Federal withholding issues and AICPA advocacy

The AICPA has worked on federal withholding issues as well. Over the past few years, taxpayers and practitioners faced challenges with the elimination of personal exemptions in the Tax Cuts and Jobs Act (TCJA). This change has complicated federal withholding on the new 2020 Form W-4 resulting in the IRS tax withholding estimator and FAQs. Many taxpayers did not have enough federal withholding for the 2019 tax year.  

The AICPA provided feedback on the draft 2019 Form W-4, Employee’s Withholding Certificate,  and urged the IRS to provide penalty relief for estimated taxes. The AICPA also supported federal legislation, the Taxpayer Penalty Protection Act of 2019 (H.R. 1300), that would have provided additional penalty relief.

With the pandemic and the July 15 filing and payment deadline, many taxpayers and tax preparers continued to struggle to calculate and pay tax payments and prepare and file tax returns.  

In early July, the AICPA advocated for further IRS tax administrative and penalty relief:

• To automatically waive the failure to file and failure to pay penalties for the millions of taxpayers affected and working through the challenges the pandemic created.
• To provide an expedited process to help taxpayers establish or revise an installment agreement based on current financial circumstances to comply with their tax obligations.
• To delay collections activities at least 90 days after July 15, 2020.

The AICPA continues to track state tax guidance and to advocate on various issues related to the coronavirus pandemic. We will keep you updated as developments occur.

Eileen Reichenberg Sherr, CPA, MT, Senior Manager — AICPA Tax Policy & Advocacy, Association of International Certified Professional Accountants

     

Related Stories

• July 15 Filing Date — Not to Move
• 5 must-have tax tools before July 15
• Key risks when auditing a not-for-profit during the pandemic

 

While COVID-19 has cast a cloud of uncertainty over not-for-profit organizations, there is one fact we can all hang our hats on: How we audit a not-for-profit now should look completely different than it did a year ago, a month ago, or even a few weeks ago.

As auditors, we’ve been fortunate to work in a stable environment for some time. The pandemic, however, has pulled the rug out from underneath all of us – and that includes our clients. Not-for-profits are not exempt, and COVID-19 has affected each one in drastically different ways.

How do you consider the economic fallout of COVID-19 when auditing a not-for-profit? First, you must be as close to your client as possible. This starts with a conversation about COVID-19. While this may sound obvious, you can’t overstate its importance. By talking through the challenges your client has endured because of COVID-19 and how they’ve adjusted to the pandemic, you’ll get a better handle on the risks you might encounter during the audit.

Here are a few more considerations to keep in mind.

1. Assets and liabilities

Make sure you have a clear insight into the not-for-profit’s asset impairments (if any) and inventory valuation. If your client has a large investment portfolio, such as an endowment, it may be underwater, especially if they’ve invested in certain alternative investments. You may need to adjust estimates as well. For example, if the not-for-profit depends on pledges, the percentage of uncollectable pledges may rise. Or, they may be collected at a different time than what was projected. Debt modifications and loan covenants are also important to think about.

2. Revenue and expenses

The not-for-profit’s revenue stream is another consideration. There is an influx of funding for some not-for-profits because their services are in high demand. For example, more grants and food donations are coming in for many food banks to meet increased demand, and other not-for-profits have solicited specific COVID-19 donations. Other not-for-profits must contend with less money from fewer donors than in recent years. If your client had to cancel its fundraising events, this will also affect cash flow.

Your client may also be incurring different expenditures that it never had before. For example, your client may have costs associated with remote working, costs associated with event cancellations and/or additional costs to comply with CDC guidelines for sanitation and other protocols. Not-for-profit higher education institutions may have new costs associated with converting in-person classes to online classes.  You’ll need to understand how those new costs are classified in the not-for-profit’s financial statements.

3. Internal control

Finally, you should remember that the not-for-profit’s internal controls probably aren’t where they were a year ago. More remote workers, fewer employees and other factors have more than likely disrupted the organization’s processes. You’ll need to understand how internal controls have changed since the pandemic began, learn how controls are being implemented now and be aware of the increased risk of fraud in the world today. Even if you’re new to auditing in a remote environment, stay vigilant and scrutinize the evidence. The way you’re conducting the audit may have changed, but the standards all of us must adhere to have not.

We may have more questions than answers as the pandemic continues to unfold. Fortunately, there are plenty of resources available to help us along the way. And, until the pandemic winds down, let’s give not-for-profit clients one other constant besides change: A commitment to helping them through these unprecedented times.

Chris Stanz, CPA, Managing Principal, National Assurance; CLA (CliftonLarsonAllen LLP) Chris oversees CLA’s national assurance technical group and service assurance leaders and is responsible for several aspects of A&A quality control. She has over 25 years of experience with the firm and has provided auditing and consulting services to a variety of clients with a focus on not-for-profit and affordable housing organizations as well as single audits. 

     

Related Stories

• Three A&A tech tips for today’s virtual firm
• 5 reasons borrowers shouldn’t rush their PPP forgiveness applications
• July 15 Filing Date — Not to Move

 

With COVID-19 changing everyone’s world, firms must develop new ways to work internally and with clients. If you are used to going over the audit report with clients in the office, what’s your plan? If your audit team usually conducts the audit at the client’s office, what’s your plan?

Fortunately, technology enables firms such as yours to continue to offer personalized, exceptional service without being in the same physical space as your client. You don’t even need your team to be together in one office to deliver efficient, high-quality work.

What will it take to get it right in the long run? Here are three tips to get you going:

Tip No. 1 — Invest in a cloud-based ecosystem

Many firms don’t have a complete cloud ecosystem supporting their firm’s accounting and auditing needs. A typical firm’s approach includes a mix of solutions, some cloud-based and some with locally installed software.

Firms generally separate their internal cloud needs from their client-facing cloud needs, adding even more complexity. This may have been out of necessity as much as a deliberate strategy. Until recently, the tools to enable virtual client interaction within the context of an audit, review or other engagement have largely been separated from the typical engagement management and methodology tools those same firms use. Unfortunately, enabling a virtual audit is no longer a “nice to have” feature for firms — it’s the minimum standard.

For example, clients used to delivering audit reports in person may desire or require a virtual alternative. Clients used to spending time in their location as an audit team may expect a virtual alternative. They expect you to know how to do these things (and do them well). So, invest in a cloud ecosystem for all parties involved. Get this right, and you not only gain efficient client interactions but deliver excellent value to your clients who expect you to lead them in a more remote-friendly way.

Tip No. 2 — Standardize tools and processes through technology

For many firms, systems built for auditing are the catch-all solution for any financial statement-related service. For firms who only do audits, this can work out fine. But what about when you have prep, comp or review work to do?

From data shown on this infographic, a CPA.com survey from 2019 found that preparation, compilation and review engagements tend to be “overworked” (e.g., performing more work than is required for the service level) by most firms, such that a review includes some audit-level work, a compilation includes review tasks and so on. Ninety-eight percent of firms admitted to at least one engagement being overworked. This is an issue with firms that tend to struggle to shift between service levels, a problem the systems being used magnifies. Doing unneeded, “extra” work doesn’t just eat into your margins — it adds liability risk when you do something the firm was not contracted to do in an engagement. But isn’t it challenging to “right-size” each engagement when you are bouncing back and forth between these various levels of service?

The idea of using a different system to approach each service level concerns many firms. But, if you look at how dramatically different the needs are for these various levels of engagement (and how easily “overworking” becomes the norm), it makes sense to consider how your system can help you align to the scope of each service level.

Nobody wants a review to turn into a “mini audit”, right?

Tip No. 3 — Understand and configure your cloud-based service provider’s security options

You may have seen or heard the somewhat recent news that Zoom had some security flaws exposed in its virtual meeting service. As a result, Zoom had to pivot quickly to address these concerns with a platform update. If you look closely at what happened, you’ll see that many of Zoom’s security flaws were rooted in the default configuration of meetings, including the lack of a required password for meetings. The lesson here: Everyone has a responsibility to not only understand the security measures in place by the cloud service provider but also to properly configure these cloud-based tools to minimize their own risk.

Once you have done your due diligence in selecting a cloud-based solution provider that you can trust, you must implement this technology in a way that works best for your firm.

Considerations here include:

• Get a thorough understanding of how to configure the product through implementation and training services.
• Build controls within the product so specific users or user groups only have access to functionality that is pertinent.
• Document company policy around the handling of sensitive client data and, where possible, enable corresponding document retention policies within your system.

Improved collaboration, ensuring you have the right tool for each job and keeping security properly prioritized are three important but not mutually exclusive objectives. Incorporating these tips as you adapt and evolve your A&A practice will help you succeed in this remote-working, more-virtual world. 

Matt Towers, Product Lead, Assurance, CPA.com. Matt has over 20 years of experience working in the tax and accounting technology industry with a specific focus in accounting and auditing technology and process. Matt has responsibility over bringing the practitioner’s voice into CPA.com’s assurance products, including the OnPoint A&A Suite and RIVIO Clearinghouse, to ensure these products solve problems for the profession.

     

Related Stories

• 5 reasons borrowers shouldn’t rush their PPP forgiveness applications
• 5 must-have tax tools before July 15
• Help small business clients recover through customer retention

 

This blog post explains why borrowers shouldn’t rush their PPP loan forgiveness applications. Please share with clients who participated in the program.

Borrowers who received Paycheck Protection Program (PPP) loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act are asking their CPAs if and how they will qualify for PPP loan forgiveness. There is uncertainty over some of the program details. Organizations — especially small businesses — worry about meeting the maximizing loan forgiveness requirements.

While you may be anxious to apply for forgiveness, here are five factors affecting the forgiveness application process.

 

1. Most lenders are not ready to process forgiveness applications. Many are developing technology tools such as “forgiveness portals” or will leverage other automation options for a more efficient process. Until the U.S. Small Business Administration (SBA) and the U.S. Treasury Department issue final guidance, those technology tools can’t be finalized. The timing on when that guidance will be available is uncertain. Bank of America, as one example, is telling PPP loan holders it expects to begin opening its online loan forgiveness application process in early August and will email instructions to borrowers when it’s ready.
2. Organizations have 24 weeks to use their PPP money, leaving them more time to take steps that will help them qualify for full loan forgiveness. Borrowers who received their loans before June 5, 2020, can choose either eight weeks or 24 weeks for their covered period. That increased flexibility in the time to use PPP funds can be important in maximizing loan forgiveness.
3. Payroll costs are a significant component of PPP forgiveness. Many payroll providers are developing custom reports specifically to comply with PPP guidance. However, like lenders, they are waiting on final SBA and Treasury guidance so they can prepare the PPP-compliant reports borrowers will need.
4. Borrowers aren’t required to make any loan payments before they apply for forgiveness or until 10 months after their covered loan period ends. Since payments aren’t due yet, there is less urgency to apply for forgiveness.
5. Applying for forgiveness may be easier than clients expect. Borrowers can use a simplified process through SBA Form 3508EZ if they meet at least one of these requirements:
   • They are self-employed individuals, independent contractors or sole proprietors who had no employees when they applied for their PPP loan and who didn’t include any employee salaries in calculating their average payroll amount in their application.
   • They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and — except for specified exceptions — didn’t reduce the number of employees or the average paid hours for employees between Jan. 1, 2020, and the end of their covered loan period.
   • They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and were unable to operate at the same business activity level during the loan period because of federal safety requirements or guidance related to the pandemic. CPAs expect SBA guidance to help determine how broadly this safe harbor can be used.

Be prepared

While waiting for final program guidance, borrowers can take steps to prepare for the forgiveness application process by documenting how the loan proceeds are used. Gather documentation needed to support non-payroll costs for expenses such as mortgage interest, rent or lease payments and utilities, including account statements and other proof of payments. Lenders may not request supporting documentation for all disbursements as part of the forgiveness application; however, increased scrutiny is guaranteed for loans of $2,000,000 or more.

Be patient

PPP loans have gone to 4.8 million organizations through June 30, 2020. Recent legislation extended the opportunity for organizations to apply for loans until Aug. 8. While questions remain about some forgiveness process details, CPAs are following developments. It can be difficult to be patient when your organization is affected by the ongoing uncertainty COVID-19 created. But that may be the best approach until the SBA and your lender establish a forgiveness application process. Count on your CPA to continue to be your trusted adviser throughout the process.

The AICPA has several Paycheck Protection Program resources available to the public during this challenging time. You’ll find an overview of the PPP loan forgiveness process, answers to frequently asked questions and more.

Lisa Simpson, CPA, CGMA, Director — Firm Services, Association of International Certified Professional Accountants

     

Related Stories

• 5 must-have tax tools before July 15
• Help small business clients recover through customer retention
• Navigating financial plans during the pandemic

 

As news of the COVID-19 pandemic’s spread intensified early this year, the effect on the U.S. economy and American’s financial situations was unknown. We conducted the AICPA PFP Trends Survey in May to explore how CPA financial planners worked with clients during these uncertain times. The U.S. had experienced tens of millions of job losses, extreme stock market volatility and trillions of dollars in emergency federal programs to mitigate the economic fallout for businesses and individuals. The survey results provide an informative snapshot of how AICPA members on the financial frontlines helped their clients calmly navigate this extraordinary situation.

Talking with clients early and often

When asked, a little more than three-fourths (76 percent) of CPA financial planners surveyed said they were speaking with their clients about COVID-19’s impact on their finances by the middle of March, with more than four-in-ten (42 percent) said their first COVID-related conversations with their clients happened by the end of February.

“As the headlines about the coronavirus were getting increasingly dramatic, it was difficult for most people to process where this was headed,” said Dave Stolz, CPA/PFS, chair of the AICPA’s PFS Credential Committee. “We saw the Dow start posting 900- and 1,000-point drops toward the end of February, and so the initial conversations I had with my clients were primarily around the market dropping. The tone from my clients was largely ‘maybe it is different this time.’ So, it was particularly important to stay in contact as the situation continued to develop.”

Frequent contact with clients during the pandemic was a theme for CPA planners. Three CPAs in four (75 percent) said they’ve been talking with their clients more regularly, including 45 percent who reported that contact was significantly more frequent than normal. These conversations largely helped ease their clients’ anxiety by making them more comfortable with their financial situation.

Eighty-one percent of respondents said clients had more stress about their financial plan than usual. Of those clients with heightened stress levels, 62 percent felt more confident in their financial situation after speaking with their CPA. Part of the reason, Stolz found, was that clients were reminded that they had proactively planned.

“The good thing about having a solid financial plan in place is that when things feel like they are falling apart in the world around you, you’re still starting from a position of strength,” Stolz said. “When clients are reminded that they have a baseline to adjust from if necessary, they understand that this allows them a little time to breathe and continue to monitor how things unfold, rather than making knee-jerk decisions they may come to regret.”

Proactive planning keeps COVID-19 changes minor

Nearly all financial planners surveyed (97 percent) reported making changes to at least one client’s financial plan. CPA financial planners reported on aggregate that three clients in 10 (30 percent) required plan changes. And the majority of those were minor changes (77 percent), compared with only 23 percent that were substantial.

Of the changes, the most frequently were investment allocation (62 percent) and spending decisions (59 percent). Rounding out the top five were changes to tax strategy (43 percent), retirement account, such as Roth, IRA, qualified plans, (41 percent) and retirement income drawdown (33 percent).     

Portfolio decisions during COVID-19 market uncertainty

When asked what changes they or their clients made to their investment portfolios during the pandemic, CPA financial planners most frequently (57 percent) rebalanced portfolios. Purchasing or increasing stake in equities (40 percent) was more popular than selling or reducing stake in equities (31 percent). Nearly four CPA financial planners in 10 (39 percent) took advantage of a down market to do tax loss harvesting, with more than one-in-three (35 percent) seeing an opportunity for Roth conversions. Forty-one percent made no investment changes.

“For some clients, the market dropping represented an opportunity to sell some underperforming assets for tax-loss harvesting. For others, it was the ideal time to reduce their tax liability by converting regular IRAs to Roth IRAs,” added Stolz. “While these moves won’t necessarily show up as positive investment performance in the traditional sense, they do maximize return in the long run. And during these times of uncertainty and continued market fluctuation — it’s important that clients remain focused on meeting their financial goals over a long-term horizon.”

The AICPA’s Advanced Personal Financial Planning Conference, part of AICPA and CIMA ENGAGE, will feature multiple sessions on how to help clients navigate the financial uncertainty of COVID-19.

Association Staff

     

Related Stories

• July 15 Filing Date — Not to Move
• 5 tips for working from home with kids
• 5 must-have tax tools before July 15

 

Even before the current crisis, digital transformation and new ways of working were significantly influencing the skills and capabilities finance teams need. The coronavirus pandemic has accelerated that need as people and businesses now seek digital experiences and solutions more than ever.

Recently at the Interactive Solution and Key Initiative Sessions, the ENGAGE 2020 kickoff event, I shared insights [listen here via podcast] from my conversations with CFOs worldwide. They told me the skills and competencies finance teams must develop to adequately support the business in today’s world. These skills include:

1. Knowledge of transformative technology

We’ve all had a crash course in working side by side with technologies over the past few months. As our organization’s data has moved to the cloud and month-end closes have become automated, finance has had to get familiar with technologies such as robotic process automation, blockchain and data analytics applications.

Organizations have fast-tracked digital transformations to protect and serve customers in many ways and adapt to new business models.

Building skills to support this rapid transformation and being able to use technologies will put you in a great position. Our free Digital Mindset Pack offers members a chance to take a deeper dive into technologies such as robotic process automation and data analytics. 

2. Comfort with analyzing and presenting data

If working side by side with technology is important, the ability to use the tools and data at your disposal to affect decisions is even more critical. 

“We need to be able to tell the story in a more convincing and succinct way,” the finance leader of a Fortune 500 manufacturing services company told me recently. After he grappled with how to make strides in digital finance transformation, he spent time with his business and finance team to effectively change management reporting from thousands of pages of information to a set of dashboards.  

The change was challenging because it forced a new way of working as well as a new way of thinking ­— not only in terms of the generation of data but also in the ability to present data in a meaningful way.

The Association (AICPA® and CIMA®) offers several resources to help finance and accounting professionals grow their data analysis skills. Some of these include our data analytics certificate program (a portion of which is through the Digital Mindset Pack), articles, podcasts and an interactive brochure that highlights how to leverage data to drive decision-making.

3. Ability to communicate and think critically

Never underestimate the power of effective storytelling. You can uncover the best insights, but if your audience doesn’t understand your point, it’s moot.

Strong communication and critical-thinking skills — the ability to ask the right questions and to guide good and considered decision-making — are invaluable skills for finance professionals. If the ability to leverage technology and a deep understanding of the business support these skills, you have a powerful combination to lead your business.

Programs such as the CGMA® Finance Leadership Program help develop these co-piloting competencies. The program’s online, personalized learning experience helps finance professionals develop the necessary digital, technical, business, leadership and people skills. Our newly launched Agile Finance white paper and webcast series also provide ideas on how to reimagine your business and upskill your finance team for the digital era.

4. A mastery of the basics

In a recent FM magazine interview, the CFO of GSK, Iain Mackay, talked about “getting the basics right.”

He explained, “It’s about finance doing what its core responsibilities are really well, consistently and sustainably in very difficult operating circumstances. It’s about the finance team being able to contribute flawlessly to the overall continuity.”

This mastery of technical skills is essential to ensure upskilling in the latest technical accounting and finance areas. We may need to unlearn and relearn some of the concepts we studied many years ago.  

Prime candidates for this are approaches to risk management and scenario planning, which have been turned on their heads over the last few months. Look to our COVID-19 resource center to help you remain current in these areas.

5. Ability to be agile and unlearn what you know

This is the most important skill of them all.

“Agility is about how flexible we can make an organization, a process or even an individual,” said a CFO of a global gas manufacturer and supplier to me recently. And pace, which is about “how quickly we can remove constraints and adjust processes to create impact.” 

To support this mindset, we need to embrace continuous learning to help us adapt better to our ever-evolving work world and enable us to take future opportunities.

For example, McKinsey & Company offers six steps to reskilling and shares strategies to building a “no-regrets” skill set — a useful toolkit no matter how an employee’s specific role may evolve. Also, take a look at the CGMA Competency Framework to help guide a structured conversation on learning with your staff or your manager and build a no-regrets toolkit of your own.  

Key questions to consider

As you reflect on these skills, consider these questions to discuss with your teams and your leaders:

• How has the current crisis changed your thinking on how you develop yourself and your people?
• What critical competencies do you require to meet your business priorities now and in the future?
• How do you align roles and ways of working to these critical competencies?
• How can you engage your colleagues in initial conversations to validate your understanding?

Learn more about the skills and competencies finance professionals need to thrive in a post-COVID world with the Finance Redefined track at ENGAGE 2020. This all-online conference, July 20–24, brings together the profession’s leaders to share best practices and the latest insights to help you guide your teams.

Barry Payne, Director, External Relations — Management Accountant, Association of International Certified Professional Accountants

     

Related Stories

• A shark’s advice for building resilience
• 3 ways to stay marketable during an economic downturn
• Wellness in mind: Resources for self-care

 

Daymond John can shut you down with a simple “no” or change your world with a definitive “yes.” He’s a Shark on the Emmy award-winning television series Shark Tank and a keynote speaker at ENGAGE 2020, the premier event for accounting and finance professionals, July 20–24.

John is also CEO and founder of the ground-breaking lifestyle brand FUBU (For Us, By Us), an American apparel company that has sold more than $6 billion in merchandise. He’s CEO of The Shark Group and is a New York Times bestselling author of five books, including his latest, Powershift: Transform Any Situation, Close Any Deal, and Achieve Any Outcome.

One part of his new book talks about losing your power and then taking it back. This cycle speaks to resiliency — an essential skill.

We asked John about resiliency, a topic that is especially timely in today’s environment.

Why is resiliency so important?

Because failures and setbacks are inevitable — it’s part of the game — so you have to learn how to learn from them and keep moving.   

How can leaders create an environment to promote resiliency in their teams and organizations?

You will never get the best out of people if they’re walking on eggshells. You have to create an environment that tolerates certain failures. Failures should be seen as learning experiences and teachable moments, not something that should be avoided at all costs.

One way a leader can do this is by talking about his or her own failures. You need people to think and act entrepreneurially, regardless of their positions. Being entrepreneurial means looking for new ways to create value. That means trying new things; mistakes, failures and other surprises will happen, so it’s a constant process that involves making lemonade out of lemons.

Entrepreneurship — outside or inside an organization — is almost like a series of controlled experiments. It’s a leader’s job to control and limit the size of the potential mistakes; that way, if you keep them relatively small, you can learn from them and keep moving one “affordable” step at a time. That’s how you build resiliency. 

Why should accounting and finance professionals, from new to experienced, try to be resilient?

Accounting and finance pros are not like assembly line workers in the 1950s, doing the exact same thing every day. Their jobs are dynamic. Resilience is required for problem solving and for finding and creating better ways to do things in dynamic environments. 

Some people have that elasticity, that ability to bounce back. Do you think that is a learned behavior or something you’re born with?

It definitely can be learned. You learn to bounce back by bouncing back — again and again and again — which is much easier when you’re taking smaller, affordable steps.

When I started FUBU, I closed three times because I kept running out of money. I didn’t have to file for bankruptcy, though. I ran out of $500 or $1,000 at a time. I didn’t over-leverage myself. I didn’t have enough money or connections to make big mistakes. That worked in my favor. It’s what I call the “power of broke.”

What are 5 ways a person can build resiliency?

1. Don’t do things just for money. Have a lot of different “whys” (aside from money) for doing something. It makes it easier when things get tough.
2. Practice taking small steps outside of your comfort zone on a regular basis. Do things that make you nervous — be it a sales call, a presentation or just speaking up on a company Zoom meeting. Practice. Start small. 
3. Keep in mind that problems, setbacks, mistakes are just part of the process.  
4. As I say all the time, like Dory in Finding Nemo, you have to “just keep swimming.” 
5. Don’t try to do everything by yourself. Bouncing back from challenges is easier with partners. Entrepreneurship is a team sport. 

On a personal note, what is your biggest mistake and how did you recover from it?

Hard to say. I’ve had a lot. Not spending enough time with my kids, at one time. I’m still recovering from it. Nowadays, I firmly schedule family time and times to call them, just as I do for other priorities in my life. 

If you could leave our readers with one piece of advice, what would that be?

No matter what life throws at you — negative or positive — look for ways to create value from it.   

____

Hear Daymond John’s keynote speech on Wednesday, July 22, at ENGAGE 2020 — a dynamic online event that brings together leaders in accounting and finance to share best practices and the latest insights to help you evolve and grow.

Association Staff

     

Related Stories

• 5 must-have tax tools before July 15
• July 15 filing date — To move or not to move
• Future-proofing the tax system with small businesses in mind

 

What’s called a difficult decision is a difficult decision because either way you go, there are penalties.

-Elia Kazan

To advocate effectively on our members’ behalf and deliver the right resources, the AICPA periodically conducts member surveys to gather opinions on various subjects. As we navigate through this ongoing filing season, the AICPA Tax Executive Committee asked Tax Section members for their concerns and opinions regarding the July 15 deadline. The Tax Executive Committee has been carefully considering a decision regarding July 15 since, well, April 15. If you read July 15 filing date — To move or not to move, you know the heart of the matter was whether to move the deadline. We now have an answer — don’t move the July 15 due date. As famous ‘50s and ‘60s Hollywood director Elia Kazan infers above, our decision was complicated and multi-faceted. There were many issues to consider.

In the survey, deployed at the end of May, members were asked two questions:

1. Based on the current COVID-19 environment and the impact on your tax practice, do you anticipate being able to file returns or extensions for your clients by the July 15 deadline?
2. Do you believe the IRS should automatically extend the July 15 filing and payment deadline?

The responses, from a very diverse membership, were quite mixed. Although the majority of respondents said they would be able to file returns or extensions on behalf of their clients by the July 15 due date; a plurality of members wanted the IRS to move the July 15 due date to October 15; some members suggested other dates.

Thank you for the 1,000+ comments we received, some of which include:

• Absence of a due date would cause many of our clients to procrastinate, resulting in an impossible workload close to October 15.
• We don’t want to have these tax returns hanging over our head all year. Some clients wait until the last minute, no matter when the deadline is. We can always extend until October if needed.
• The firm can work remotely, and we are able to deliver returns and extensions to most clients electronically. We have a plan for the few clients who still need to receive paper returns.
• Changing the due date was confusing for clients, especially since not all the states conformed, especially with regard to estimated tax payments. Changing it again would only make matters worse.

On the other side of the spectrum, survey respondents said:

• Impossible to comply; half the staff are teaching their children and working at the same time. Work is coming in second.
• Fear of the illness on my part as well as my family and clients has made the process much longer and not as efficient.
• As is typical there are investment reports, K-1s and revised 1099s that are not available.

There were also many comments and expressions of concern about clients’ financial condition. Most members can handle the filing obligation but were concerned about clients’ abilities to pay their tax liability. Some respondents acknowledged that extending the payment date would not make it any easier for clients to ultimately pay taxes owed. This acknowledgement contributed to the AICPA’s decision to develop a letter related to penalty relief and IRS compliance mitigation, which is in development.

Another area the Tax Executive Committee examined closely relates to the Paycheck Protection Program (PPP). Some respondents wanted July 15 postponed because of PPP loan forgiveness work. However, a week after the survey was deployed, Congress passed H.R.7010 – Paycheck Protection Program Flexibility Act of 2020 extending the “covered period” from 8 to 24 weeks. Those additional 16 weeks will put much of the PPP loan forgiveness work right in the middle of the second busy season — Labor Day to October 15.

Other considerations for keeping the July 15 due date: the importance of providing certainty for clients in the context of having a target due date that needs to be met; preventing or limiting the spillover of filing requirements into the next tax year; collecting needed tax revenues for federal and state authorities; and initiating the start of the assessment period.

Finally, there are other practical concerns involved in moving the deadline. We’re hearing that states may not conform to the possible IRS extension of the July 15 due date at the same levels they did in April. In the case of non-conformity, a federal return would have to be completed in order to complete the state return, which means the IRS moving the date would be irrelevant if the state does not conform.

The Tax Executive Committee decided not to advocate for another delay, at this time, but will continue to monitor all the data points that fed into this conclusion. We continue to monitor the IRS’ ability to provide services in these uncertain times and recently submitted a letter to the IRS regarding the electronic signatures, recommending the update of the federal e-signature guidance and authentication requirements relating to standard filing procedures. The AICPA will continue to develop resources to deal with the anxiety and challenges of a difficult year.

Elia Kazan also said, “[e]ffort is all; continue and you may get there despite everything.” For the many reasons discussed above, we believe it’s important to do what you can now. In the current environment, today is as certain as it gets.

Edward S. Karl, CPA, CGMA, Vice President of Taxation, American Institute of CPAs

Chris Hesse, Principal, CliftonLarsonAllen LLP’s National Tax Office, Chair of the AICPA’s Tax Executive Committee

     

Related Stories

• 5 must-have tax tools before July 15
• July 15 filing date — To move or not to move
• Future-proofing the tax system with small businesses in mind

 

Remember “Take Your Child to Work Day”? For many of us, that’s become every day. The COVID-19 pandemic has shut down offices, leaving professionals to carve out workspaces in their homes while keeping children occupied or helping them with schoolwork at the kitchen table. We’ve compiled the following advice to help CPAs remain productive, including tips from members of the AICPA Women’s Initiatives Executive Committee:

Protect your space. With so many firms going remote without much notice, not everyone was set up to work from home. If you have an office or spare bedroom, consider designating that a no-interruption zone for when you have important meetings or projects. If your environment doesn’t allow for that, try using a signal to your kids — like an upside-down cup on the counter — that you need uninterrupted time.

If you have a spouse or partner who is also working from home, compare work schedules each evening to make sure you can each attend any important meetings the next day. Then set specific work hours and use a timer to signal when you’re finished with that time block.

Be age appropriate. Most solutions will depend on how old your child is:

• Babies and toddlers. Parents of very young children already know how to work around their children’s sleep schedules but fitting in a day’s worth of work makes it tough.

 Maximize your work time by getting more mobility — use your phone or tablet for emails, conference calls or to review documents. If a child can’t get to sleep, a baby carrier lets you work and soothe them at the same time.

• School-aged children. With three boys — aged 7, 17 and 19 — and both parents working from home, Lindsay Stevenson, CPA, CGMA, VP-finance at 1^st Financial Bank USA, and her husband take turns overseeing their activities. For their youngest they break schoolwork into 30-minutes segments to maintain mental energy.

During times when you don’t have to be as focused, consider letting them work alongside you to make the time special. Give your little one a task like drawing a picture or decorating messages to send to loved ones. Another option is to set them up with a fun movie or educational game just before you join a meeting or start on a project.

If your child no longer naps, implement a “quiet time” for reading or resting.

• Teenagers. For older kids, it’s a good idea to create schedules for them to follow. This way you and your child can rely on some structure for your days. But be prepared to be flexible.

 With the school year over, challenge older kids to take on creative projects. Suggest they try cooking meals they can post on social media, researching your family’s genealogy or redecorating their room or unused space in the house.

Step away from work when you can. If you previously worried about overlaps between home and work, the pandemic has exacerbated the problem. While technology has allowed you to get your job done remotely and to keep in touch with family and friends, you may find yourself more tied to your screens than ever.

It’s not just work, either. Jessica McClain, CPA, Controller at Brand USA, who has a 16-month-old daughter, notes that with the never-ending online happy hours, virtual group movie watch parties and new options for virtual learning, it’s easy to get wrapped up in your computer or phone. You may feel you’re spending more time with your family than before, but having tech-free times of day or week can help you be more present with them.

Give yourself a break. Self-care may have previously included going to a salon for a haircut or manicure or out to lunch with a friend, so you might need to get creative about unwinding in the current climate. You could try taking walks with your children, doing an exercise video or having a movie night after the kids are in bed.

Even the most extroverted people need some quiet moments, so be sure to check your mood and adjust your schedule as needed. It’s okay to take a break from things like dishes or laundry to take care of your mental health.

Make a plan for summer. With many offices reopening but daycare and summer camp options hard to come by, some CPAs may be scrambling to cover all their bases. To care for their 10-year-old son, Scott Bailey, CPA, partner at Carr, Riggs & Ingram, and his wife plan to alternate which parent will go to their office and which will work from home with their child.

The last few months have been a huge experiment in working from home for many. Even as the country takes tentative steps toward returning to workspaces, many businesses are considering expanding their use of remote work. If you’re passionate about this topic or want to learn more, the AICPA’s Private Companies Practice Section (PCPS) has tools and resources to help create a positive culture that promotes flexibility and remote work.

Erin K. Carson, PMP, Manager – Young Member Initiatives, Association of International Certified Professional Accountants

Shelly Frazier, CPA, Senior Manager – Diversity & Inclusion, Women’s Initiatives, Association of International Certified Professional Accountants

     

Related Stories

• Turn challenges of sheltering-in-place into opportunities
• Considerations before reopening your office
• 5 must-have tax tools before July 15