Author: FFC

News

IRS Service Levels: Don’t Give Me Excuses!

Post author By FFC
Post date January 29, 2016

IRS Service Levels: Don’t Give Me Excuses!

Honest disagreement is often a good sign of progress.

-Mahatma Gandhi

Abysmal service levels; I hear you, I really do. It’s been a long time since I’ve been in practice but those busy season scars are still with me. I half joke but the memories don’t go away completely.

So, another busy season and the prospects for easily – wait, reasonably – representing your clients with the IRS appear to be no better than they were last year, when I blogged several times about service issues. In May, for example, you may have read about the AICPA governing Council resolution directing the Institute to intercede on a long-term solution to the service crisis. We started those conversations but, frankly, the environment in Washington got worse. Hard to believe, but it did. In October, House Oversight and Government Reform Committee Chair Jason Chaffetz (R-UT) joined 18 members of the committee in introducing an impeachment resolution against IRS Commissioner John Koskinen. The resolution is pending before the House Judiciary Committee.

That “honest disagreement” between Congress and the IRS regarding appropriate funding levels and effective management of the appropriated funds has been a huge barrier. You probably don’t care; you just want to properly represent your clients. You’re probably more interested in signs of progress. Right now, I can offer two:

Sign 1: In its Annual Report to Congress, the National Taxpayer Advocate outlined a summary of at least 20 of the most serious problems encountered by taxpayers each year. For 2015, the NTA identified 24 such problems. Guess what tops the list? Yup – taxpayer service. Shining the light on the problem, as the AICPA and National Taxpayer Advocate continue to do, is important to progressing to a solution.

Sign 2: In December, President Obama signed into law the Consolidated Appropriations Act, 2016 (P.L. 114-113), which increases the IRS budget by 3% over fiscal year 2015. The $290 million increase is targeted specifically for taxpayer services and is focused on improving fraud detection and prevention, cybersecurity and the response rate to taxpayer inquiries. These are obviously critically important areas for taxpayers and practitioners; the additional funding is an important step after several years of cuts.

Washington is set to be hit with an historic blizzard as I pen these words, yet I can’t help feeling that we may be facing the beginnings of a thaw in the outlook toward the IRS service situation. To leverage the changing environment, the AICPA has organized a “fly-in” in February to provide lawmakers and IRS officials with voices from the trenches to underscore the impact of this currently unacceptable level of service. (The term fly-in refers to CPAs who are flying into Washington, D.C. to talk with members of Congress and the IRS Commissioner.) We also see this fly-in as a way to accelerate the move toward providing the country with an IRS capable of world-class service and citizen satisfaction. The AICPA is immensely grateful to these CPAs for taking the time to help all of us during an obviously inconvenient time for them. But it is the time circumstances dictate and it is an important next step. This problem didn’t evolve overnight. Solving it will take time but we are committed to seizing every opportunity we can on your behalf and on behalf of taxpayers. (Our advocacy work doesn’t end here – check out our latest Washington Tax Brief for an update on all the ways we represent you.)

We also have a busy season webpage available with helpful resources that might take the edge off. When next season starts, my personal goal is to multiply the signs of progress that translate into tangible results to make your work easier. I think we all look forward to the day I no longer need to write about it.

And as Mahatma Gandhi said “Strength does not come from physical capacity. It comes from an indomitable will.” We are resolute in our determination.

Edward Karl, Vice President-Taxation, American Institute of CPAs.

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

Five Ways Finance Pros Can Use Data to Unlock Business Opportunities

Post author By FFC
Post date January 28, 2016

Five Ways Finance Pros Can Use Data to Unlock Business Opportunities

More than 90 percent of finance professionals agree that finance has an essential role to play in helping their organizations benefit from data-related projects. However, organizations looking to use data to its full potential could face a steep learning curve. In the CGMA report, From Insight to Impact – Unlocking Opportunities in Big Data, the AICPA and CIMA asked more than 2,000 finance professionals around the world about the role of finance in turning data into insights to maximize commercial opportunities. While 87 percent said big data and better analytics will change the way business is done over the next 10 years, 86 percent said their businesses are struggling to get valuable insight from data.

A few months back, I had the opportunity to listen in on a roundtable discussion with CEOs from some major multinationals about the need to make their organizations more data-centric—and the role of the CFO in this endeavor.

The group discussed the variety and volume of data available for analysis, and the need to look beyond traditional metrics to recognize the potential of embracing a wider set of data. In addition to the essentials, finance professionals need to review other, non-traditional sources of data in order to gain a more thorough understanding of business performance.

All agree that taking advantage of these opportunities is challenging for individuals, firms and corporations, creating the need for new skills, tools and ways of thinking. As a result, increasingly powerful technologies have emerged to enable more sophisticated data management and analytics.

Two examples:

Executives at Netflix knew they had a hit on their hands before production even started on “House of Cards.” Netflix tracks every action of its 33 million customers and their 30 million plays a day, including what they search for, what they watch and who they watch. The service knew that Kevin Spacey was popular with its users, and they noticed that a significant number of their subscribers were watching the British version of “House of Cards.” Netflix bet on the Spacey version of the series and it paid off: The series is the most streamed piece of content in the U.S. and 40 other countries.

Point Defiance Zoo & Aquarium in Tacoma, WA, was facing a very particular problem: On rainy days, it saw significantly less customers than on sunny days. So the business combined real-time weather information from NOAA with ticket sales, mobile check-ins and past attendance data. Using software solutions, they connected the data to their point of sale and admissions control systems. They can now accurately predict how many visitors they will get each day—and how many employees they need to have on hand, reducing unnecessary payroll expenditures. Additionally, the zoo was able to use the data to boost membership by 13% by targeting discount campaigns—a $60,000 return on an investment of less than $4,000.

Accountants in business have access to a wealth of data sources–from call center recordings to customers’ social media posts and everything in between. The question is this: How does one look beyond traditional business metrics and recognize the commercial potential of embracing this wider set of data? Here are five suggestions to help your company gain a competitive advantage by becoming a data-centric organization:

Understand what data, including new data, is relevant by: identifying the organization’s business model and intangible assets; segmenting sources of income and costs attributable to each; and considering what is needed to improve business performance.

Access what data initiatives are already in place, by: checking what data platforms and data already exist; and assessing the speed and degree to which you can provide driver-based forecasting. Then explore what external sources of data are available for consideration.

Get “quick wins” by starting small scale-scale and prove concept by: assembling a diverse team with the appropriate skills; and working with a small sub-set of data to demonstrate how insights could be derived and what value they are to the business.

Formalize a project and develop the data strategy by: setting out a full-scale data project; identifying the technology, skills and structure required to make it happen; and building a business case.

Deepen the organization’s data culture by: ensuring data is an asset to the business; questioning internal assumptions; encouraging innovation and tolerating failure; and ensuring ethics and governance in the way data is handled.

According to the CGMA report, “To truly unlock the opportunities in big data, management accountants will need to partner more closely with three sets of key stakeholders: their colleagues in IT who capture much of the data; the data scientists who can perform advanced types of analysis on that data; and finally business leaders who can ensure new ideas are turned into concrete action.” Finance teams need to lead the charge in breaking down the traditional silos that have, in the past, inhibited this type of collaboration and partnering across the functions of the business.

The bottom line is: When it comes to big data, the competitive advantage goes to those who harness disparate systems to generate pragmatic insights and deliver increased profitability.

What has been your experience with harnessing the power of big data?

Ash Noah, CPA, FCMA, CGMA, Vice President – External Relations and Management Accounting, American Institute of CPAs.

Lock courtesy of Shutterstock.

10 Apps to Help You Automate and Streamline Your Life This Busy Season

Post author By FFC
Post date January 26, 2016

10 Apps to Help You Automate and Streamline Your Life This Busy Season

Busy season is fast approaching. As you prepare this year, consider downloading some time-saving apps that will help automate your life, and as a result, give you back valuable time. Technology has the power to make day-to-day tasks a little bit easier, so why not take advantage of all the following apps have to offer.

Amazon’s Subscribe & Save: Never worry about running out of paper towels, vitamins, shampoo or other household essentials again. Parents—same goes for items like diapers and baby food. With Amazon’s Subscribe & Save service, you can select how often you’d like these products delivered, and Amazon will schedule shipments automatically. Best of all, subscribers receive a discount of up to 15% and receive free shipping on these purchases.

Automatic Online Bill-Pay Services: Eliminate the stress of paying bills. We all know that time is precious, especially when you are working 60-hour, six-day weeks. Because of this, you may want to consider taking advantage of automatic online bill-pay services. Many banks, cable, phone, internet and electricity providers offer this service. By signing up, you ensure that you never miss a payment deadline. An easy choice for peace of mind.

Coffee Shop Apps: Are you a regular coffee or tea drinker? Load up your Starbucks or Dunkin’ Donuts app and set it to reload automatically when the balance gets low so you don’t even have to think about it. Your caffeine fund, always full.

In addition to helping you automate your life, there are countless other apps that you may find useful this busy season. Below is our list of top contenders.

News Apps: Get your news in digestible bites. You may not have time to sit down and have a leisurely breakfast while reading the newspaper until after April 15, but that doesn’t mean that you have to be out of the loop. With apps like Flipboard and Circa News, you can access news stories from different sources all on a user-friendly interface.

ZocDoc App: Not feeling well in the midst of tons of work? The ZocDoc app is here to help. This innovative app can help you find a doctor who can see you at the last second and who takes your insurance so you can feel better and get back to work in a jiffy.

Scream Into The Void: So mad you could just scream? Now you can—or at least type and someone else will do the screaming. This app, inspired by the “Scream into the Void” website that John Oliver, host of HBO’s Last Week Tonight created, allows anyone with an internet connection to type their frustration and send it off into a figurative black hole with a scream, where they will disappear forever.

Evernote: Take and compile notes in one handy place. With note taking and saving apps like Evernote, you will never find yourself unprepared for an impromptu meeting with a client in the hallway. These apps allow you to take quick notes on your phone, access notes created on your computer and share them with ease.

Fitness Apps: Maintain your physical fitness. Although it may be difficult to make time for the gym during busy season, apps such as Fitbit and various office fitness or office yoga apps can help you to de-stress and encourage movement throughout the day.

Music Apps: Get your jam on with music apps such as Apple Radio, Spotify and Pandora. Whether you are the type of person that likes music in the background while you work or you enjoy listening to music while taking a break, these apps will help you stay in the groove this busy season.

Grocery Delivery: Been thinking about trying out a groceries delivery service? Now is the time. Many companies have a trial period where you can get free delivery for a few months or offer a discount if you sign up for a delivery pass for six months. A few extra bucks can save you hours at the store.

What are your favorite time-saving apps? We would love to hear from you in the comments section below.

Alexis Rothberg, Communications Specialist, American Institute of CPAs.

4 Tips to Prevent Fraud at Faith-Based Organizations

Post author By FFC
Post date January 25, 2016

4 Tips to Prevent Fraud at Faith-Based Organizations

Contributions – whether by cash, check, or online giving – are the lifeblood of faith-based organizations. Many do not realize how often these donations get into the wrong hands.

There are primarily two types of theft that occur in faith-based organizations –larceny and skimming. Larceny occurs after the money has been counted, deposited, and recorded in the books of the organization. Skimming occurs when donations never get logged in the books; that is, they go missing before ever being recorded. It is the counting and depositing process that opens the organization up to skimming, and that is where fraud can be most difficult to detect.

Faith-based organizations need to take steps to ensure that contributions make it into the bank in the first place.

Let’s start with the ‘who’ and the ‘why.’ Who would steal money from the faithful? Answer: anyone with access and a reason. I am not suggesting that everyone is a thief, but there are known characteristics of the opportunity and the perpetrator. The following are some of the findings of the Association of Certified Fraud Examiners (ACFE) Report to the Nations on Occupational Fraud and Abuse:

The demographics indicate that the majority of perpetrators are between their mid-thirties and mid-fifties in age, are educated, and have access to the money.

The average length of time the fraud is committed is eighteen months.

Those organizations that do not have independent audits annually are most vulnerable, as the fraud could go undetected for long periods of time, increasing the likelihood of significant losses.

The smaller the organization, the more likely theft will occur

Detecting fraud is difficult. In order to protect against skimming, we have to apply business best practices to faith-based organizations. Taking action to prevent fraud is a good first step. Outlined below are a few controls that can have a big impact.

Ensure that at least two people are with the money at all times.

While this sounds like common sense, it has to be followed without exception if it is going to work. There are surveillance videos online and news stories that show that money can go missing in a matter of seconds. The control is not effective if one person takes the money from the collection plate to a place of counting or the safe after worship. It is not effective if one person goes to copy the checks and leaves another person in the room with the cash. It is not effective if one person takes the money to the bank after it has been counted and locked in a bank bag. I have seen several instances where these controls have been violated and the money has been stolen.

Separation of duties by design and not by happenstance.

The reason that I make this distinction is that most faith-based organizations are short on staff and rely heavily on volunteers to perform some or all of the functions, particularly the smaller and more vulnerable organizations. There is a likelihood that those designing or performing these activities don’t have experience in business-based policies and internal controls. Unfortunately, it is not common for organizations to design and implement processes and procedures to ensure effective controls are in place. Even more rarely do they inspect them to see if they are working properly. Written policies and procedures help remind those assuming governance roles and volunteers who perform services for the organization why the processes exist and allow for consistent application of safeguards.

Treat all opportunities for giving the same as collection plate giving.

While the largest amount of giving usually occurs during worship services, there are other times when money comes into the organization. Mid-week suppers, fundraising activities, day schools, thrift stores or other outlets need the same level of control and asset safeguards. Often these sources are not viewed as generating a significant amount of money. Therefore, they provide one of the greatest opportunities for skimming because of the lack of attention to the detail of counting and depositing.

Provide oversight and reconciliation of online giving.

Online banking makes our personal lives easier, but in a faith-based organization, convenience does not always include effective controls. The rapid increase in online giving creates a new challenge for safeguarding of contributions. Separation of the duties in processing and reconciling the contributions is essential.

I recommend that faith-based organizations implement internal controls like the ones outlined above to prevent skimming and larceny from taking place. You may also wish to read this recent article published by the AICPA Not-for-Profit Section: An Ounce of Prevention: Combatting Fraud in Not-for-Profits. You can find additional articles and tools, such as downloadable templates and sample policies, in the AICPA Not-for-Profit Section’s Governance Resource Library.

People make contributions to support their house of worship out of the goodness of their hearts. Let’s take steps to ensure that those funds end up in the right hands.

James B. Jordan, CPA, CGMA. Mr. Jordan is the author of Financial Management for Episcopal Parishes. He is an Adjunct Professor of leadership and parish management at the General Theological Seminary in New York, General Theological Union at the University of California at Berkeley, and at Emory University in Atlanta. He is a CPA and CFE who specializes in faith-based organization auditing, accounting, and consulting. Mr. Jordan maintains a blog at jamesbjordan.blogspot.com and is on LinkedIn and Twitter.

Collection basket image courtesy of Shutterstock

7 Financial New Year’s Resolutions

Post author By FFC
Post date January 21, 2016

7 Financial New Year’s Resolutions

At the start of each New Year, many people make resolutions and vow to stick to them. Some say that they will exercise more frequently or focus on dieting, but what about improving one’s finances? Team AICPA brainstormed some financial New Year’s resolutions to help you meet your 2016 financial goals:

1. Set an achievable budget for the year. Start by reviewing your expenses from last year. Were some of your targeted figures unrealistic? Are there areas where you can cut back? If you’ve never had a budget, now’s the time to make one.

2. Take a deep breath if your December credit card bill is higher than your monthly average. With all of the holiday shopping for family and friends, extravagant parties and meals at restaurants, a larger balance is typical. Remember to reflect on the enjoyment gained from these activities and take the time to plan your upcoming monthly budgets so that you are back on track for the rest of the year. If you really got yourself into an unfortunate financial situation, take time to assess how it happened and address the underlying issues that led you to overspend. Use the 360 Degrees of Financial Literacy credit card pay off calculator to figure out how best to get back on track.

3. Pack a lunch. Chances are you can put together a delicious lunch in your own kitchen for a lot less than restaurants near the office. In some cities, lunch can cost as much as $15 a day. That’s $75 a week that you could have otherwise stashed in your piggy bank. And for those of you looking to lose some weight in 2016, bringing lunch from home is often a healthier choice. Use the 360 Degrees of Financial Literacy lunch savings calculator to find out how much you could be saving.

4. Purchase products when they are on sale. Instead of buying tissues during cold and flu season, stock up when they are “buy one get one free”. Or purchase a winter coat during the spring and summer months when they are in less demand and likely less costly.

5. Reflect on your retirement contributions. A general rule of thumb is to set aside 10% of your annual income for retirement. The earlier you start saving, even if just a small amount at first, the better off you’ll be. If you start saving in your later years, you may want to increase your savings to ensure that you have sufficient funds for a comfortable retirement. Use the 360 Degrees of Financial Literacy retirement planner calculator to determine a savings plan that works for you.

6. Get fit in 2016. Before you run out and sign up for a new gym membership, consult your employer or health insurance company to see if they offer any reimbursements.

7. Evaluate whether renting or owning is a more affordable option. In many markets, buying a home is a worthwhile investment that pays off in the long run. For homeowners, as soon as the mortgage is paid off, the property becomes your own, whereas renting only benefits your landlord. To find out what income is required to qualify for a mortgage, check out the 360 Degrees of Financial Literacy mortgage calculator.

For more financial literacy tips and valuable resources, visit the 360 Degrees of Financial Literacy website. What are your financial New Year’s resolutions? We would love to hear from you in the comments section below.

Alexis Rothberg, Communications Specialist, American Institute of CPAs.

Lunch image courtesy of Shutterstock.

Leveraging the AICPA | CIMA Competency and Learning Website for Your Development

Post author By FFC
Post date January 20, 2016

Leveraging the AICPA | CIMA Competency and Learning Website for Your Development

The AICPA | CIMA Competency and Learning website has been a very valuable tool to me since its launch in February. It has helped me both build needed competencies on my team and strengthen my own “strategic skills” in communication and leadership.

I have worked at large firms and now a smaller organization, and based on my experience, I believe the website is beneficial to CPAs from any size and type of organization. It offers small firms a full range of technical and non-technical resources, many of which are free. Larger firms may find that the resources have depth that can complement their in-house learning materials; particularly when it comes to non-technical perspectives, such as developing emotional intelligence.

To help you better understand how to leverage the website, I want to share my favorite resources and how they have helped me. All the resources mentioned below are free for AICPA members.

Building New Competencies for Your Finance Team

My company has approximately 75 employees. As Director of Accounting and Compliance, I function in many areas, from insurance and risk management to financial reporting and HR. I also assist with legal and marketing.

When we had personnel changes this past year, I turned to the AICPA | CIMA Competency and Learning website to find planning, forecasting and budgeting resources. Using these tools helped my team develop a common language and build new competencies quickly and efficiently. I shared many of the website’s resources with a staff person who took over several key responsibilities, and it helped her build needed kills in a short period of time.

One valuable CGMA tool called “Scenario and Contingency Planning” has helped my team better understand the concepts for managing risk in our company. Specifically, the area on the enterprise risk management (ERM) process helped us make risk the focal point of our budgeting process. Our VP of IT Infrastructure implemented the Risk Heat Map tool during our budgeting process. My accounting team used the AICPA | CIMA Competency and Learning website to understand the tool better. The Risk Heat Map tool helped us recognize our short-term and long-term risks and priorities in this high spending area, and it allowed us to look several years out to prioritize our IT spending.

The article “How to identify risks, opportunities through scenario planning” helped my team budget, which enabled collective baseline knowledge and a shared language to discuss certain topics.

In order for CPAs to become effective leaders, they need a solid base of technical knowledge coupled with emotional intelligence. A person with high emotional intelligence has the capacity to understand his or her own emotions as well as the emotions of others. This helps them to lead teams effectively and produce results.

Communication and listening skills are critical to a CPA’s success. I have taught classes on how to cultivate these strategic skills. One of my favorite resources on the website is a Journal of Accountancy article, “Go ahead, take the stage” by J. Carlton Collins, CPA. The article discusses the different ways people learn and how to reach all audience members effectively. One topic it touches on—and something many CPAs can likely relate to—is how to vary your message so it strongly impacts a variety of learners. I also gleaned some helpful tips related to body language and adapting presentations so they have the strongest impacts.

Accessing Resources for Use Outside the Organization

I participate in an Illinois CPA Society women’s mentoring group, and have discovered excellent resources on mentoring from the Competency and Learning website that I have shared with fellow members. As mentors, we meet on a monthly basis to discuss topics that are relevant to our careers, and keep each other accountable for our short-term and long-term professional goals. “Share. Learn. Grow. Mentor. A How To Guide From The AICPA’s Women’s Initiatives Executive Committee” is one article I would recommend, as it provides excellent tips and suggestions for a structured approach to mentoring.

I also visit the website for ideas on discussion topics, and to learn more about opportunities for adding value in the profession and business world. I often email these resources to others in my group, or bring printed copies to our mentorship meetings.

Connecting to an Ongoing Resource

Any time I am asked to take on a new challenge at my organization, I immediately go to the AICPA | CIMA Competency and Learning website for guidance. I know I can count on the website to provide me with the necessary resources and tools. If you have not visited the website yet, I strongly recommend you do. With more than 1,700 articles, publications, videos, webcasts, and self-study courses, you will likely find a resource that will benefit your professional development. To experience the full functionality of the website, you can use your current AICPA login, or create an AICPA account to gain access.

Elizabeth Pittelkow, CPA.CITP, CGMA, DTM is Director of Accounting and Compliance at ArrowStream, Inc. where she works in the areas of accounting, financial reporting, and compliance. Currently, she also serves on AICPA’s Business & Industry Executive Committee (BIEC).

Top 10 Tax Resources for the 2016 Tax Season

Post author By FFC
Post date January 19, 2016

Top 10 Tax Resources for the 2016 Tax Season

Have you “lost” that shiny new FitBit, depleted the family inventory of holiday goodies and now scrambled through the house trying to dig out Aunt Lucy’s famous fruitcake? Rather than investing $2,500 in a standing desk with a treadmill, it may be time to consider a new resolution!

A more practical choice may be to make a commitment that will yield positive results for the next few months. Commit to your staff, your clients, your tax practice and your professional goals during the upcoming tax season. The AICPA wants to help you jumpstart that success by pointing out useful tools to ensure you flex your tax season muscles.

Tax season resource page – Add this page to your browser bookmarks now for quick access to up-to-date tax season information, Find the newest tax resources as they roll out, as well as core products such as the AICPA checklists (free for Tax Section). Also, check out the Journal of Accountancy Quick Guide, a handy summary of tax rates, exemptions, credits and retirement plan limits.

Affordable Care Act information – Get answers to questions both you and your clients have on the health care reform law at the Health Care Reform Resources Center. Additionally, brochures such as ACA FAQs for Individuals, Applicable Large Employer fact sheet and Small Business FAQs can help explain important facts to clients so they can stay in compliance.

Identity theft prevention and recovery resources – Learn more about what you can do as a practitioner to advise clients on this troubling epidemic and learn how you can enhance your prevention measures. Help clients restore their confidence (and identity) with the ID Theft Checklist: Action Steps to Recovery.

Client retention and acquisition materials – Download tweets, talking points and Event-in-a-Box (a checklist for presentation logistics) from the Tax Practitioner’s Toolkit to reinforce your value to current and prospective clients. Also, download this 2-pager to help clients understand why a tax extension may not be a bad idea.

Staff motivation tools – Need ideas for keeping everyone on board when the hours are long? Listen to this Tax Power Hour (open through March 31 for all AICPA members) or just review the slides.

Ethics guides and professional standards – Download free guides from the AICPA’s Tax Ethics and Professional Standards page to help you navigate the rules and requirements for due diligence, conflicts of interest and client privilege. If you don’t know why you should read these guides, then you absolutely must read them! Protect yourself with this knowledge specific to tax engagements or visit the AICPA’s Code of Professional Conduct, which is now online and searchable.

Penalty abatement information – Practitioners wanting a quick breakdown on using the IRS’s first-time penalty abatement waiver from certain penalties can get information from this new resource page from the Tax Division. A template to request abatement for clients is available for Tax Section members.

IRS Hotlines Quick Reference Chart – Save yourself a little time by avoiding the entire “press 6 to hear…” and get to the option you need. This list also includes numbers for dedicated lines such as international tax, Form 706, installment agreements, etc. These and other tools can be found on the AICPA’s IRS Procedure & Tax Administration page.

Personal Financial Outlook Checklist – Include this questionnaire in your organizers as a starting point to determine a client’s goals and their investment, insurance, or estate situation to identify important opportunities for financial planning services; use these tips for promoting additional services.

Fun or useful things to do while you are on hold with the IRS:

Productive activities like catching up on tax news and analysis with the AICPA Tax Insider and Journal of Accountancy. For more ideas, see the AICPA’s 10 Useful Things to Do; or

Goofy endeavors like making a candle out of crayons or drawing mustaches on all the people you didn’t know in your middle school yearbook. You need some fun, right?

Ann Marie Maloney, Communications Manager-Tax, American Institute of CPAs.

Cari Weston, CPA, CGMA, Director-Taxation, American Institute of CPAs.

Words of encouragement courtesy of Shutterstock.

Scuba Diving and Risk Mitigation: One CFO’s Perspective

Post author By FFC
Post date January 18, 2016

Scuba Diving and Risk Mitigation: One CFO’s Perspective

What do swimming with sharks and digital technology have in common? According to Rob Leff, CPA, CGMA, CFO of Fandango, both are risky but perfectly safe if done properly. In this AICPA Insights Member Spotlight, we find out how Rob is using his management accounting skills to excel in a field that is changing everything.

Tell me about your day-to-day responsibilities.

My role is multi-faceted: It includes the traditional finance and accounting that most CFOs have and also responsibilities that wouldn’t necessarily fall under the official CFO role, such as mergers and acquisitions and corporate development. And, there is also business analytics and business intelligence reporting, which involves data warehousing, database management and more. Fandango is a digital business and the digital space is constantly evolving and changing with new technologies and partners. Strategically, I partner with our president and executive team on the decisions of the organization. We work together on deciding where we’re going to take the company.

How is your role different from the typical CFO?

One of my goals has been to go beyond the job description and add value to the organization. I’m always evaluating the buy, rent, or build scenarios. If there’s an area of business that we want to expand into, I’ll conduct an analysis with the executive team: What would it take to build it ourselves? Or, are there companies we can acquire to accelerate the time to market? Or, could we “rent” [by building] a commercial relationship instead of buying it? I’m constantly evaluating opportunities to grow Fandango. With all of those functions, I’m able to leverage my experience and partner with the executive management team to drive the business forward.

What skill is critical for you in order to forecast and effectively grow the company?

A critical skill for success is possessing a deep understanding of details, while never losing sight of the big picture. A CFO must know the business, the financials and the models inside out, while also understanding what’s going on in the industry and where opportunities can be found. My goal is to avoid just crunching numbers and reporting where we’ve been, it’s to help navigate our future.

What do you enjoy doing outside of work? What are you passionate about?

One of my passions is scuba diving. Once I took that first breath underwater, I fell in love with the sport. At age 18, I became a Divemaster and I have been diving ever since. My family also shares my interest. My wife is certified and my older son just earned his certification. It’s fun to watch him have the same types of experiences I had when I first started to dive.

Are there parallels between scuba diving and being a CFO?

In the role of CFO, one of your main roles is risk management and mitigating risk for your organization. In scuba diving, you need to manage risk as well. Under the water, you’ve got to assess the risks that may threaten your safety—or that of your fellow divers—and consider the opportunities that might allow you to experience a rewarding dive.

What advice do you have for CGMA designation holders who are starting their careers?

The ability to effectively manage teams is critical. In today’s digital space, it’s all about human capital. The digital media and entertainment space is all about the people.

As a CGMA designation holder, Rob manages and mitigates risk so that his company can continue to grow and innovate. See how taking the first step to becoming a CGMA designation holder starts you on a path to elevating your technical, business, leadership and people skills to advance your career goals.

Learn more about the CGMA Program at cgma.org/Program.

Colette Krahenbuhl, Senior Manager-CGMA Communications and Public Relations, American Institute of CPAs.

Bugs Umamaheswar, Marketing Manager -CGMA and Management Accounting, American Institute of CPAs.

Inspiring TV for Auditors: What We Can Learn from Blake Shelton and Kim Kardashian

Post author By FFC
Post date January 15, 2016

Inspiring TV for Auditors: What We Can Learn from Blake Shelton and Kim Kardashian

As individuals and as a profession we continuously strive to enhance our value proposition and improve the quality of the audit. It’s hard work, and we all need to find time to relax and recharge. Sometimes, while unwinding, I discover unusual parallels between what is portrayed on the TV shows I admittedly watch and the issues facing the profession. I thought I’d share some of my favorites in hopes that you’ll find in them a useful–if not amusing–way to consider the challenges at hand.

The Voice of Learning and Competency

I never cease to be amazed by the talent on each season of NBC’s The Voice. As each season progresses, we see that it’s not enough to have a great voice. Contestants must learn from seasoned pros like Gwen Stefani and Blake Shelton to apply their talent to different types of songs in varying high-pressure situations.

We’ve recently seen a substantial increase in the number of young people graduating with degrees in accounting. Many are opting for careers in auditing. These young professionals are extremely talented, but they need great mentors to harness that talent and teach them the secrets and tricks that seasoned auditors employ, like skepticism and professional judgment.

Like the show’s finalists, practitioners learn from their mentors that the audit is a high value service that helps maintain confidence in financial reporting. At the AICPA, we recognize that the new generation of CPAs learns and works differently–and their expectations can be very different from prior generations. Our Future of Learning initiative is addressing these needs by developing new ways to convert talent into professional competence, both prior to licensure and in ongoing practice.

Monitoring the Modern Family

If you’ve had the opportunity to watch the ABC series Modern Family, you know this blended family faces challenges that make the Brady Bunch seem simple. In each episode, smartphone technology has a feature role, often complicating the lives of Modern Family members. Technology also provides them with a way to communicate and resolve problems in real time.

Several of the AICPA’s efforts acknowledge both the challenges and opportunities technology brings to the modern business and auditing environment. The Practice Monitoring of the Future project envisions real-time monitoring and communications that would give firms a perpetually updated performance snapshot and allow them to make corrections and resolve issues in near real time.

Additionally, the AICPA’s Assurance Services Executive Committee and the Auditing Standards Board, are determining how to better integrate analytics into the audit to promote quality, audit effectiveness, and value add for clients. Through the work of CPA.com, we are advancing a private company financial information clearinghouse, which will modernize the delivery of the audited financial statement to clients. Currently in pilot, the clearinghouse will significantly improve the security and credibility of private company information, which has been a growing issue for some banks and private equity firms.

Keeping Up with the Kardashians

According to the Forbes 2015 Celebrity 100, Kim Kardashian has monetized her fame better than any other celebrity has, with her 2015 earnings nearly doubling to $53 million from 2014’s $28 million. Although the Kardashians’ show on E! may seem superficial, experts attribute their success to the masterful planning and organizational skills of Kim Kardashian and mother Kris Jenner. Years before she began making big bucks from fashion design and endorsement deals, Kardashian made money as a professional organizer revamping closets for Hollywood’s elite.

Although we don’t expect to see auditors on the red carpet, we need to be sure they are developing the strategic planning and critical thinking side of their skillset as they assess the contents of their clients’ financial “closets.” An auditor on an engagement needs to take stock of what’s in the work papers, but just as importantly, what’s not and what should be. He or she also needs to analyze the relationships between items–those that go together and those that don’t — brown shoes never go with a black belt. The AICPA’s Assurance Services Executive Committee and Auditing Standards Board collaboration on developing a new Audit Analytics Guide will help provide something akin to Kim K’s fashion dos/don’ts guidance.

Investigating Like NCIS

The CBS series NCIS highlights team dynamics and personalities. Like any team, the NCIS investigators are far from perfect, but they work together to apply the unique strengths of each team member to solve puzzling cases.

I hope that you won’t encounter an actual crime during your audit career, but it’s essential to use the particular strengths and specialties of each audit team member in terms of both technical expertise and personality. Auditors need to have a problem-solving mentality, a desire to get to the root of issues and a skeptical outlook. They need to recognize that fraud or material irregularities typically result from cultural dynamics–the control environment–within an organization and that good auditing involves analyzing people as well as data.

What are you watching on TV these days and how does it relate to your role as a CPA?

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

Kim Kardashian courtesy of Wikimedia Commons.

Source: AICPA

News

A Lesson from 2015: Help Clients Avoid Unpleasant ACA Surprises

Post author By FFC
Post date January 14, 2016

A Lesson from 2015: Help Clients Avoid Unpleasant ACA Surprises

We made it through last year’s tax season thinking Affordable Care Act (ACA) matters were over with until the 2016 filing season, but we were wrong. Individuals who did not indicate on their Form 1040s that they had received the Advanced Premium Tax Credit were surprised to get an IRS notice at the end of 2015 requiring repayment of the credit.

The IRS identified many cases where taxpayers took the credit, but then did not indicate that they did so on their Form 1040. Tax preparers, unaware of the advance credit, calculated it again on the 1040, so taxpayers were effectively paid twice. The IRS caught these double dips, assessed the difference, and included the 20% accuracy penalty (Section 6662) in addition to repayment of the advanced premium tax credit and interest.

Clients who do not understand the complexities of the ACA assert they did nothing wrong, gave us all the necessary information to prepare their return, and feel we should be responsible for the 6662 penalty and interest. Confusion about reporting responsibilities persists and the problem is big: approximately 6.6 million returns reported individual shared responsibility payments (ISRP).

Last February, I wrote a blog on Rules and Resources for ACA Due Diligence. We started the 2015 filing season with everything on first-year filings for ISRP being new and unknown. We knew we would need to put forth effort in complying with rules under Circular 230, the AICPA Code of Professional Conduct and the AICPA’s Statements on Standards for Tax Services, educating clients on the additional forms needed and becoming familiar with the changes to other forms. CPAs met the challenge as did the AICPA, which provided resources to assist members, including the AICPA Health Care Reform Resources Center and client communication materials on the Tax Practitioner’s Toolkit.

Throughout the filing season, our collective understanding grew. For example, we learned that:

All of our clients did not have 12 months of health care insurance coverage and some owed the individual shared responsibility payment;

We did not see many 1095 series forms;

We did see some taxpayers who qualified for one of the exemptions; and

Most taxpayers had little knowledge of what information to furnish us to prepare their returns.

Looking Forward

For 2015 returns, the ISRP penalty will be higher. The penalty is the greater of a flat dollar amount or a percentage of household income as follows:

$325 per adult and $162.50 per child under age 18, up to a maximum of $975 per family or

2% of household income above the filing threshold for a person’s filing status.

However, the penalty cannot be more than the average premium for a bronze level purchase from the Marketplace, which can vary by region but is about $2,570 for 2015.

We now face the 2016 filing season with all the same challenges as last year — getting accurate ACA information from taxpayers to file their 2015 returns. Many taxpayers are still not clear about the information necessary to file their returns, such as the Form 1095 series showing the months of coverage and persons covered in the taxpayer’s household, as well as information on any exemption from coverage or on any Advanced Premium Tax Credit received.

CPAs can make sure that their tax organizers and taxpayer interviews include questions like:

Did you and your dependents have healthcare coverage for the full year?

Did you receive any of the following IRS documents: Form 1095-A (Health Insurance Marketplace Statement), 1095-B (Health Coverage) or Form 1095-C (Employer Provided Health Insurance Offer and Coverage)? If so, please include them with your tax return information.

If you or your dependents did not have healthcare coverage for each month during the year, do you fall into one of the following exemption categories: Indian tribe membership, health sharing ministry membership, religious sect membership, incarceration, exempt non-citizen or economic hardship? If you received an exemption certificate, please include it with your tax return information.

If you obtained coverage in the Marketplace, did you apply any Advanced Premium Tax Credit to your insurance premium?

To complicate matters, some early filers may answer “no” to the question about whether they received a 1095 form, then receive it after the tax return is prepared. The IRS extended the date for sending individuals’ 2015 1095-B and 1095-C forms to March 31. However, the IRS notes in its FAQs that: While the information on these forms may assist in preparing a return, they are not required. Individual taxpayers will generally not be affected by this extension and should file their returns as they normally would.

As we start the 2016 filing season, we need to be prepared for more complexities on ACA reporting on individual returns. We will need to exercise more due diligence to obtain the necessary information, so that the taxpayers will not be assessed ACA penalties (and therefore be tempted to pass the blame on to us). IRM Section 21.3.1.4 (Notice Descriptions) provides information on various notices that have ACA implications.

Form 14950 will also be sent for premium credit verification. This form, sent by the IRS, is essentially a checklist of information that helps the IRS substantiate the level of taxpayer and dependent health insurance coverage.

Taken together, CPAs have the opportunity to prevent (or at least reduce) ACA premium credit problems this year, and perhaps make this a smoother, post-tax season 2016.

Gerard Schreiber Jr., CPA, Partner, Schreiber & Schreiber CPAs in Metairie, LA. Gerard specializes in tax, accounting and consulting matters for individuals and small businesses. He serves on the AICPA IRS Advocacy and Relations Committee and has authored numerous courses and articles on various tax subjects.

Valrie Chambers, CPA, PhD, is an Associate Professor of Accounting at Stetson University in Celebration, FL. She has over a decade of public accounting experience as owner/partner-in-charge of a CPA firm in Houston that specialized in advising small business owners. Dr. Chambers has been published in numerous journals and received the Texas Society of CPAs Outstanding Accounting Educator Award for mid-sized Texas universities in 2012. She has volunteered for the AICPA and the IRS’ Volunteer Income Tax Assistance in Corpus Christi.

ACA surprise courtesy of Shutterstock.

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories