Braddon Group

Today, the perfect job is about more than the money. Americans want employers to show them the benefits. New original research conducted by The Harris Poll for the American Institute of CPAs (AICPA) found that Americans value having a job with benefits more than one with a higher salary. Neal Stern, CPA and member of the AICPA’s National CPA Financial Literacy Commission, spoke to AICPA Insights about the survey results and shared what you should keep in mind with respect to your own workplace benefits.

According to the survey, Americans are four times as likely to choose a job with benefits over an identical job that offered 30 percent more salary but no benefits. What’s your reaction to this?

Neal Stern: I find it encouraging that so many Americans recognize the value workplace benefits bring to an overall financial plan. Some benefits, like health insurance, protect you from exposure to tremendous expenses that could seriously derail your financial wellness. These benefits often come at a lower cost than what it would take to buy the coverage on your own. This is largely because of employer subsidies and possibly more favorable pricing through a group, which leaves you more breathing room in your monthly budget. Looking beyond the financial benefit of a broad benefits package, it’s hard to over-estimate the value of peace of mind you get from being free of the worry of catastrophic expenses from an accident or illness.

And thinking of the longer term, workplace benefits like 401(k) plans can help you get on the right track for building retirement savings, in a much more effective and powerful way for many people than trying to set aside money on your own each month.  

Nearly 9 in 10 employed adults are confident they understood all the benefits available to them when they accepted their current job. However, concerningly, less than a third said they’re very confident they’re using their benefits to their fullest potential. Is this consistent with what you have seen professionally?

NS: Unfortunately, it’s often the case that despite understanding the value that comes with having good benefits, Americans are not taking full advantage of them. This is particularly concerning because leaving benefits underutilized is essentially leaving money on the table that you’ve earned. For example, many companies offer to match retirement contributions up to a maximum percentage, like 3%, but workers often contribute less than the maximum and are walking away from money their employer is willing to give them. This can make a huge difference in what you ultimately can accumulate for retirement, especially when you consider the compound growth of the extra money that would’ve taken place over a decades-long career.

401(k) match, health insurance and paid time off topped the list of workplace benefits that Americans said would help them reach their financial goals. Did anything about the priority Americans placed on specific benefits surprise you?

NS: It’s not that surprising people place a higher priority on what seems to be closer at hand in their situation.  For example, retirement is at the top of the radar screen for Baby Boomers, while it may seem ages away for Millennials. Many of the decisions Americans make when starting off their careers can have an exponential impact on their financial futures. It’s important they leverage whatever benefits are offered to them by their employer to the best of their ability throughout their careers. And when prioritizing and evaluating benefits, Americans should consider the whole picture. Benefit packages should ideally be a mix of different options that bring financial benefit in both the short and long-term.

Three in ten Americans are considering switching jobs in the next year – for those looking for new employment, how would you advise they compare two offers?

NS: When considering a new position, think about future prospects, not just the current offer. Advancement prospects should be high on your list – will the job provide the training, experience, and opportunities to keep you on a good path for career growth and success? Your financial future will be tied to your company’s fortunes, so it pays to invest some time in researching how your prospective employers are performing and where they’re heading.

In comparing compensation, look at the total package, not just the salary. The value of employer-subsidized health insurance, a solid retirement plan with a company match, and other benefits may contribute more to your bottom line than a somewhat higher salary. Also, some of the benefits may not be taxable while your salary will be. Keep in mind, too, the intangibles that can affect your pocket and your lifestyle.  For instance, a long commute can be expensive and place a big dent in your personal time, while policies like flexible working hours and telecommuting can contribute to your quality of life.

For more information on workplace benefits, check out the free resources available on the AICPA’s 360 degrees of financial literacy website. There you can find information on what questions to ask when evaluating benefits, as well as articles full of insight on a wide range of financial topics, and even a tool to help you build your own financial plan.

Jon Lynch, Manager, Public Relations, Association of International Certified Professional Accountants

     

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If you think the Financial Accounting Standards Board’s (FASB) new revenue recognition standard is only applicable to those in the wine and cheese crowd, think again. The standard impacts companies of all sizes, from specialty shops to corporate lenders. You don’t need to be in an industry with specialized revenue to turn your attention to the new standard. At the Center for Plain English Accounting, we’ve been receiving questions from practitioners on their client’s behalf for some time now. We picked out a couple and provided answers to help you understand the new standard (ASC 606).

How to identify performance obligations under the new standard.

Question: My client runs a direct sales gourmet cheese business. Individuals who join the Cheese Club pay a monthly membership subscription fee of $49.95 and receive $49.95 each month in “Mozzarella Moola” to spend whenever they please. Members of the Cheese Club also receive 25% off all purchases and receive exclusive early access to purchase new products. In this scenario, what are the performance obligations?

Analysis: It looks like the company has at least two performance obligations — the $49.95 worth of store credit and the 25% off future purchases, which looks like it may be a material right. Your client will have to allocate the total consideration transferred ($49.95) between them, and recognize revenue for each as performance is completed, which may differ. Calling it a monthly subscription is a little misleading, as it functions more as a gift card for $49.95 that the subscriber can use for future purchases. Since this performance obligation is essentially a gift card, revenue should be recognized when the “Mozzarella Moola” is redeemed and your client supplies the associated goods to the customer.

When the customer purchases the membership, your client should record a contract liability for its performance obligation related to the gift card— that they have an obligation to transfer goods for the gift card amount. In the event that customers do not use all of their gift cards and they expire (referred to as “breakage”), ASC 606-10-55-46 through 49 explains that there are situations where the expired amount can be recognized prior to the vendor being legally released from its obligation.

Moving to the 25% discount, assuming that it meets the definition of a material right, the revenue allocated to that performance obligation would be recognized when it is used or when the option to use the 25% discount expires. Identification and the accounting for material rights can be somewhat tricky, so we wrote a report that provides some examples and practical advice. This report is usually available exclusively to Center for Plain English Accounting members, but we have unlocked it temporarily so that anyone can access it.

How to determine if breakage is applicable when it comes to gift cards.

 Question: One of my clients operates, On the Vine, a chain of wine stores. They charge fees on their gift cards after a certain period of time, where permissible under state law. If the retailer is charging fees and the gift cards are essentially depleted after a certain amount of time, does that mean that my client would not have to worry about calculating breakage?

Analysis: If the fees are enforceable, the entity is relieved from satisfaction of the performance obligation in the amount of the enforceable fee (breakage would not be relevant).  If the fee is enforceable and there is no past practice of forgiving the fee, that would take precedent. If the entity has previously forgiven the fee, it would be an implied price concession — a variable consideration. Also, the entity should consider unclaimed property laws that may apply.

Is there an alternative to implementing the new revenue recognition standard? For some of America’s small businesses, the answer is yes. Check out the Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs™), an accounting framework that delivers financial statements that provide useful, relevant information in a simplified, consistent, cost-effective way. The FRF for SMEs™ framework may be used when GAAP financial statements are not required.

Practitioners need answers to their difficult A&A questions. The Center for Plain English Accounting is here to help. Make sure your firm has access to top-notch A&A advice by joining the Center for Plain English Accounting.

Mike Austin, Senior Manager- Center for Plain English Accounting, Association of International Certified Professional Accountants- Public Accounting.

     

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By now, you’ve heard how automation can save you from the boredom of copying and pasting all day. But you might still be wondering what processes your organization can automate to save time. Look no further. Here are three areas finance and accounting professionals can look at as automation opportunities.

Credit applications

Still running credit checks manually? There’s a solution for that. With automation software, your customers can go from application to decision in a matter of minutes, often without any direct involvement from you.

After the customer submits a digital application form, automation software can acknowledge receipt of the application to both the customer and you. The software immediately opens the application and reviews it for completeness. If the file is not complete, the program will populate a template letter and email the customer directly, letting them know what information is missing. If the form is complete, the software confirms that criteria are met. Again, if any criteria are not met, the software populates a template letter and emails the customer letting them know.

If the criteria are met, the software then runs a credit search, extracts the results of that search and compares the results with the pre-established requirements you set. If the results meet those requirements, the software sends an approval notice to the customer. If the results don’t, the software sends a pre-approved template letter offering potential next steps.

The best part? Because you’ve provided the software with the credit requirements and template letters in advance, this whole process can run over and over – and in just seconds or minutes each time – without your constant involvement.

Staff onboarding

There are some HR processes that everyone goes through regardless of their role or department. Benefits administration, system access and setup, compliance reporting and onboarding are all areas that are ripe for automation.

How? Let’s look at that last example. Automation software can be set up to automatically send onboarding documents to all new employees entered into the system. As with other automation examples, the software will review the documents for completion and follow up with the employee if documents are not complete via a pre-approved template email. If the documents are complete, the software can automatically set up a record in the payroll system and enter the employee’s tax information. It can also automatically create IT system accounts like login information and an email address.

This saves time and hassle, as your new employee won’t need to check in with individuals across different departments to get things set up, nor will your existing employees need to manually create accounts or enter data.

Fraudulent account notification

Automation software can also be used to help you identify and address fraud. For example, you can set up the software to flag any account where an address is changed to an overseas location, a purchase is made that is at least 30 percent larger than the average amount usually spent by that client or the wrong password is used to log in to an account a specified number of times.

Once an account has been flagged, the software can notify your Risk and Compliance Department, put a hold on transactions and seek further information from the client to verify that changes or transactions are valid. Based upon the client’s response, the program can then remove the flag from the account and keep it open or close the account. The software can then automatically archive all data.

The unifying theme of these examples is that a pre-determined action triggers a series of events, all of which take place “behind the scenes” and in a matter of seconds or minutes – saving you time and freeing you up to perform higher-value services. There are dozens of automation software providers that offers capabilities like the ones above, although Automation Anywhere, Blue Prism and UiPath are some of the more well-known ones. Just make sure you speak with the provider about your automation goals before committing to any one product. Each one offers different capabilities and benefits.

If you want to learn more about automation before committing to the software, check out our Facebook Live video “Robotics in your accounting practice” or our Robotic Process Automation learning programs.

     

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This blog post is the second in a series on risk assessment, a significant audit quality issue. View the first blog post here. 

Anyone who owns a home has had some experience with lawn care. Maintaining a healthy lawn is easy when you have a lush field of bluegrass, but when things start to get patchy, that’s where the real work comes in. That’s when you have to get a good understanding of what is going on with your lawn and what might be causing the patches. Only then can you pick the right treatment.

Auditing a set of financial statements is no different. To perform an effective audit, you must first gain an understanding of your client and identify their specific financial reporting risks. Until these steps are complete, you have no basis for planning the rest of your audit procedures.

However, the AICPA Peer Review Program found that many auditors are performing their engagements without properly considering their client’s risks. In fact, the AICPA found that the most common audit deficiency in practice today is non-compliance with AU-C Section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.

Here are some tips to help you comply with the standard and plan a successful audit.

Don’t be afraid to ask questions. To plan your audit, you need to identify your client’s specific risks. To identify the risks, you’ll need to gain an understanding of the entity, and that means asking lots of questions. It also means keeping your eyes and ears open, observing the client and getting a good feel for their environment. The last thing you want is for a risk to go undetected. So, if you are unsure of something or need clarification, don’t be shy — ask questions.

 Know your client’s industry and their transaction cycles. In gaining an understanding of the entity, it’s important that you know their industry. It’s also important that you obtain a strong understanding of your client’s significant accounts and transaction cycles. The goal here is simple: the better you understand your client, the better you can identify their risks.

For example, consider a client in the software industry. If you have experience in that industry, you might come into the audit anticipating that the client has entered into multiple element sales contracts. By inquiring about the client’s revenue cycle, you confirm that your client enters into such agreements. Because there’s a risk that the sales price may not have been allocated to the contract elements appropriately, you might conclude that the risk of material misstatement (RMM) associated with revenue recognition should increase.

 Identify your client’s controls. All entities have controls. Before you think, “He hasn’t seen some of my clients!”, consider the following definition: a control is any policy or procedure used by an entity to prevent, or detect and correct, a misstatement. Based on that definition, if you have a client where the owner reviews financial results, communicates the importance of quality or sets a strong “tone at the top” by demonstrating integrity, your client has controls.

When seeking to identify your client’s controls, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) elements and principles can help you detect possible gaps. For example, when considering the principle “demonstrates commitment to competence,” you may note that your client’s majority owner hired their brother-in-law to serve in a key accounting position and that they lack the competence to fill that role. This is a financial statement level risk. Depending on the brother-in-law’s responsibilities, your assessment of RMM could be impacted for multiple relevant assertions.

Evaluate the design and implementation of your client’s controls. On every audit, you are required to a.) evaluate the design of controls relevant to the audit, and b.) determine whether these controls have been implemented. This isn’t the same thing as testing the operating effectiveness of controls.

To illustrate, you may find that a spreadsheet a client uses to track the quantity and value of inventory in their warehouse is unencrypted. It’s stored on a shared drive where any of the client’s employees could access and edit it. If that spreadsheet is used to compute the client’s inventory balance, their lack of access controls could lead to increased RMM for inventory existence and valuation, which could influence the nature, timing and extent of the substantive procedures you perform in that audit area.

Before diving into your next audit, be sure to gain an understanding of your client and their controls so you can identify their risks. Then, and only then, will you be able to plan your further audit procedures. Visit the AICPA’s risk assessment toolkit for valuable free resources including FAQs, a staff training PowerPoint presentation and an internal inspection aid.

Tracy Harding, CPA, Principal, BerryDunn. Tracy is BerryDunn’s Director of Quality Assurance. In this role, he coordinates the firm’s audit and accounting technical resources. He also serves as Chair of the AICPA Auditing Standards Board’s (ASB) Risk Assessment Task Force.

     

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As a CPA, you build strong relationships with your small business clients, so you’re not surprised when one of your clients, who is running a startup, asks for a meeting to talk about her goals for the coming year and beyond. She is looking to enable growth by attracting new investors, to continue recruiting quality talent and to differentiate the company in the marketplace by giving it a competitive edge going forward. You want to help, but where do you start?

Rethinking the business  

While such goals can sometimes seem daunting, you know that there are simple steps she can take to improve her chances of achieving all three: Make changes that ensure her company is operating in a sustainable manner. There are some direct results of embracing greater sustainability. These include fostering innovation, driving financial performance and improving risk management, according to a Harvard Business Review article. Other benefits include improved brand image, greater appeal to employees and investors and increased ability to comply with regulations. 

Have your clients already raised questions about environmental, social or governance matters i.e., sustainability concerns? If they haven’t, you should be prepared to hear more on this topic as interest increases. There are two main suggestions you can make to clients to get them thinking about the importance of sustainability.  

Consider what sustainability can do for you. Your clients may not be aware of the benefits that sustainability can offer, or they may think this is a topic that only applies to much larger organizations. CPAs can take the opportunity to bring it up when:

• A client is moving locations. Moving into or building a greener site may help them enhance profitability and productivity. For example, a manufacturer may cut costs by lowering energy or water use or by reducing reliance on toxic chemicals, thereby improving environmental conditions.
• A client is seeking to enhance risk management. With the increasing prevalence and severity of environmental, social and governance (ESG) related risks, ranging from product safety recalls to extreme weather events, managing ESG-related risks and opportunities is critical to enhancing organizations’ resiliency. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development recently released guidance intended to bring ESG risks into clearer focus for businesses and organizations.
• A client is seeking funding. Many investors and venture capital firms focus specifically on green businesses or prefer to work with organizations that demonstrate an understanding of environmental, social and governance concerns. They consider sustainability important to long-term financial performance.
• A client wants a competitive edge in a crowded market. Once again, a commitment to business practices that acknowledge sustainable issues is likely to appeal to many workers, companies and potential investors.

Become a B Corp.  Don’t know what a B Corporation is? Over 2,500 corporations in more than 50 countries have decided to expand their business purpose beyond maximizing short term profits. Their business models are intentionally designed to create a positive social or environmental impact. They’re all for-profit companies that have been certified by the nonprofit B Lab because they’ve met high standards of social and environmental performance, accountability and transparency.

CPAs are well qualified to work with companies becoming B Corps because many of the areas assessed involve good business practices. You can, for example:

• Help them prepare a required Impact Assessment.
• Develop a work plan to address identified areas for improvement and implement process improvements.
• Prepare external reporting.
• Provide assurance on sustainability reporting.

Many challenges, one solution

It’s rare that one answer can address a variety of concerns, but for many small companies, a greater understanding of sustainability can really make an impact. CPAs can seize the opportunity to provide advice and ideas that can help clients position themselves for a more sustainable future. Check out our new sustainability toolkit, featuring a backgrounder on sustainability assurance, a brochure outlining the benefits of CPA provided sustainability assurance, a document defining key sustainability terms and a guide to implementing the United Nations’ Sustainable Development Goals.  

You may also be interested in attending the Sustainability Investment Leadership Council Conference, taking place May 9, 2019 in New York, NY. Register using the coupon code “AICP” before December 31, 2018 for the early bird rate ($255 instead of $595).

Desire Carroll, CPA, Senior Manager- Assurance and Advisory Innovation, Association of International Certified Professional Accountants

     

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Life is stressful, there’s no doubt about it. But you have the choice to maintain a different perspective, instead of letting stress overtake you every day. Here are four steps to reduce stress and live a well-balanced life:

Step one: Get clear on your purpose

Living life on your own terms requires clarity of purpose. Do you know what matters to you most, and why?  Consider the life wheel. There are eight buckets on the wheel: family, work, money, personal growth, health and wellness, spirituality, community and living environment. You must decide which three or four are most important to you, and why. Time is limited, which means you can’t weight all life areas equally. When you know your “what” and your “why,” you’ve got power—the power to dial up the time and energy for what matters most, and the power to pull back on what doesn’t.

Step two: Dial up GUTS over FEAR

 

Living life on your own terms requires guts over fear. The guts to cure the disease to please. Be gutsy enough to press pause on perfection. Be gutsy enough to stop and ask the question, “Do I need to add value here?” And be gutsy enough to say no to adding more monkeys onto your back. By being gutsy enough to embrace some “no’s,” you’ll reduce stress, increase productivity and regain hours of time each week.

Step three: Let go of judgement

Living life on your own terms requires you to stop judging yourself when you fall short. We all fail, in large and small ways. Accept the moments you miss the mark by saying, “Oh well, I’m human” instead of, “O.M.G. I’ll never work again—I’m a failure!” A forgiving attitude is critical for keeping your energy focused forward—and your sanity.

Step four: Shed your “shoulds”

Living life on your own terms requires you to shed your shoulds. You should accept that job. You should join that board. You should take on that new client. “Shoulds” are the things we do out of obligation because we have not thoughtfully considered our true objectives. Often, they are derived from fear: What if I never get another opportunity like this? What will others think of me? What will I think of me? Here’s the thing: If you can’t say no, then your yes doesn’t mean anything. Think about that. Your commitment to something means much less when you’re committed to everything. So, shed your “shoulds,” and make your “yeses” count. (Download my free guide to shedding the shoulds here.)

It’s your life, and you only get one of it. Own it. Claim it. Love it.

Regan Walsh, NYU-certified executive and life coach who focuses on helping women who are over-programmed and underwhelmed reclaim their lives, both personally and professionally. She is located in Columbus, Ohio and has coached hundreds of women from all over the world through her one-on-one and group coaching programs. She regularly gives keynotes and facilitates workshops for Fortune 500 companies, including Nationwide, OhioHealth, Scotts Miracle-Gro and AllianceData. Regan contributes to Harvard Business Review and Forbes, and has been featured in Ladders, Smart Business, and Columbus CEO.

     

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Imagine you’re at work on a typical Monday morning. Suddenly, an email from the CEO hits your inbox. It’s marked ‘urgent,’ so you open it right away. She needs you to wire $15,000 to one of your regular vendors ASAP. You make the wire transfer, and head to the break room to refill your coffee. There’s just one problem – that email wasn’t really from your CEO. And that bank account where you sent the funds? That’s not your vendor’s account. You just sent thousands of dollars to a cyber criminal. Uh oh.

It’s a scheme called executive impersonation, a type of business email compromise (BEC) scheme mentioned in an SEC alert issued last month. Unlike a typical scam email, which may have poor grammar or overly suspicious requests, BEC scams are convincing because the criminals spend time figuring out the corporate culture and common phrases and terms used by employees. CPAs should take note, because scammers could try to perpetrate a similar fraud against their small business clients.

The AICPA’s Forensic and Litigation Services Fraud Task Force has been sounding the alarm on executive impersonation for some time. And its latest Eye on Fraud report highlighted new schemes to help CPAs raise awareness with clients, so they can stay one step ahead of the scammers. Below are 5 tips for you to share with your clients:

• Awareness and discussion of the risks, the characteristics of these schemes, and the potential consequences are necessary for all departments that may be involved in the payment of funds, including IT, treasury, and purchasing. Be sure that practitioners keep themselves apprised of the varying types of impersonation schemes and ensure that clients have adequate training of personnel in addition to appropriate internal control measures.

• Training should begin with the on-boarding process of new hires for the accounting and finance functions. Some or all of these people will be in positions to authorize, initiate, or record wire transfers. Teach employees about both internal and external cyber threats (e.g. phishing, fake vendor emails and executive impersonation schemes) and test them to see if they would fall victim to scams. Require two employees to approve wire transfers and train them with a focus on BEC schemes. Enforce a policy of verifying all wire requests that arrive via email with phone calls to company-registered phones.

• Encryption should be implemented before backing up important data. Even safeguards like two-factor authentication (2FA) are not foolproof. Sending an SMS text as part of 2FA seems secure, but if the carrier account is compromised, the authentication can still be hijacked. If hacked, a small business can still protect its data by using strong encryption. Always make sure data is encrypted – and can only be unlocked by keying in a password – before saving to external devices or backing up to the cloud.

• Security controls must be implemented and maintained. It is estimated that about 90% of cyber breaches could be prevented if the proper security controls are in place. Stay aware of the latest trends in firewalls and anti-virus protection and install software updates and patches as soon as they are available. Frequently remind employees to use complex passwords and change them often.

• Repetition. Obviously, a one-time training session will soon fade from memory. Periodic updates for accounting and finance staff regarding recent frauds perpetrated against companies within the client’s industry will serve as reminders that the need for vigilance is constant.

With the costs of cybercrime estimated to climb to six trillion dollars by 2021, it doesn’t look like cyber scams are going to disappear anytime soon. And while fraudsters often target small and medium-sized companies because they may have fewer security controls in place, CPAs can play a critical role in helping their clients keep their defenses strong.

The bottom line is that cyberattacks preying on human fallibility can be mitigated. AICPA’s quarterly ‘Eye on Fraud’ reports are a great resource for all CPAs to help them protect their clients or their organizations from latest scams. The current edition is always available in the FVS News and Publications section of AICPA.org. Also check out our Cybersecurity Resource Center, which has cybersecurity resources for CPAs providing advisory services.

Brian Simpson, Manager, Public Relations, Association of International Certified Professional Accountants

     

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A powerful narrative is taking shape across the country that could define the future of licensure. State legislators are coming together to challenge the necessity and value of occupational licensing. 

So far, there have been no direct challenges to whether CPAs should be licensed. However, there’s a national anti-licensure legislative strategy that does not distinguish between occupations and learned professions such as CPAs.

The changing legislative environment means we risk losing licensure as a means to protect the public. That would mean no licensed architects, no licensed engineers and no licensed CPAs. We’ve spent decades ensuring that only qualified and educated professionals can hold out as CPAs. Clients trust CPAs to act as their fiduciaries because they know the profession is well regulated.

There is resistance to the expansion of occupational licensing across the political spectrum. In the 1950s, 5% of workers in the United States required a license, whereas 30% required a license in 2015. The increase leads to a lot of questions about whether licenses are truly protecting the public or whether they are stifling competition. While state legislatures are not looking directly at learned professions — like the CPA — all occupations and professions are getting swept into the legislation.

But if licensing has increased since the 1950s, why is the conversation changing so much now? In 2015, the U.S. Supreme Court ruled in FTC v. North Carolina Dental Board that the North Carolina State Board of Dental Examiners was not entitled to immunity from antitrust laws when it tried to prevent non-dentists from offering teeth whitening services. The case did not address occupational licensing directly, but it provided an opportunity for anti-licensure voices to enter the national conversation.

From 2015 to 2018, 34 states introduced legislation related to occupational licensing reform. On both coasts and in every region, state policymakers are seriously considering these reforms. For example, New Mexico Governor Susana Martinez signed an executive order that would allow people to perform services normally restricted to licensed professions, including CPA services, if they had the customer sign a waiver.

This national conversation around licensure threatens our mobility laws and could eliminate substantial equivalency. If this legislation succeeds, requirements for licensure will vary wildly across states, creating costly compliance burdens for CPAs.

This issue will continue into 2019 state legislative sessions. The AICPA is working with the National Association of State Boards of Accountancy, state CPA societies and state boards of accountancy to educate state policymakers on how smart, uniform and predictable regulation protects the public and promotes economic growth. Reach out to your state CPA society to learn more and get involved.

You can read more about this topic here and listen to this podcast to hear a state CPA society’s first-hand account of fighting this kind of legislation.

Skip Braziel, Vice President, State Regulatory and Legislative Affairs, American Institute of Certified Public Accountants

     

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The 2019 score release dates are now available on aicpa.org/cpaexam.  For complete information regarding scoring, please visit the Exam Scoring and FAQ pages.

The National Association of State Boards of Accountancy will release scores to boards of accountancy based upon the target score release dates listed in the tables below. Some boards may require at least one day beyond the published target release date in the table to process and release scores.

Testing Window: January 1 – March 10 (Q1)

If you take your Exam on/before:	….and the AICPA receives your Exam data files from Prometric by 11:59 p.m. (EST) on:	Your target score release date is:
January 20	January 20	February 5
February 14	February 14	February 26
February 28	February 28	March 8
March 10	March 11	March 19

Testing Window: April 1 – June 10 (Q2)

If you take your Exam on/before:	….and the AICPA receives your Exam data files from Prometric by 11:59 p.m. (EST) on:	Your target score release date is:
April 20	April 20	May 7
May 15	May 15	May 23
May 31	May 31	June 11
June 10	June 11	June 19

Testing Window: July 1 -September 10 (Q3)

If you take your Exam on/before:	….and the AICPA receives your Exam data files from Prometric by 11:59 p.m. (EST) on:	Your target score release date is:
July 20	July 20	August 6
August 14	August 14	August 22
August 31	August 31	September 10
September 10	September 11	September 19

Testing Window: October 1 -December 10 (Q4)

If you take your Exam on/before:	….and the AICPA receives your Exam data files from Prometric by 11:59 p.m. (EST) on:	Your target score release date is:
October 20	October 20	November 5
November 14	November 14	November 22
November 30	November 30	December 10
December 10	December 11	December 19

• All dates and times are based on the Eastern Standard Time (EST) zone.
• For most candidates, Prometric sends Exam data files to the AICPA within 24 hours after you complete testing.
• Exam data files received after the AICPA cutoff dates will result in subsequent scheduled target score release dates.
• If you take the BEC section, you might receive your score approximately one week following the target release date due to additional analysis that may be required for the written communication tasks.

      

For the fifth quarter in a row, the typical American’s personal financial satisfaction reached an all-time high, according to the AICPA’s Personal Financial Satisfaction Index (PFSi). A record number of job openings, along with the stock market’s bullish performance though Q3 (Oct 1) – despite volatility – boosted Americans’ financial positions. With all these positive records, you may be wondering what it means for you.

First, a little background. The PFSi is a quarterly economic indicator that measures the financial standing of the average American. It’s calculated as the difference between two sub-indexes: The Personal Financial Pleasure Index, which measures the growth of assets and opportunities, and the Personal Financial Pain Index, which calculates the loss of assets and opportunities. Most recently, the Pleasure Index (73.9) greatly outweighed the Pain Index (41.9), bringing the PFSi to a positive reading of 32.0, the highest reading in the 25-year history of the index.

Robert Westley, CPA/PFS and member of the AICPA’s Personal Financial Specialist (PFS) Credential Committee, spoke to AICPA Insights about the index results and what the record-setting quarter means for Americans.

The PFSi just reached an all-time high, indicating that the average American should be feeling a strong sense of financial well-being. Is this consistent with what you are seeing? What are you recommending to your clients?

Robert Westley: Investors seem to have a stronger sense of financial well-being driven by a robust market and economy. Nevertheless, it’s critical to remember that the economy is cyclical, and the prosperous times won’t continue forever. As we begin to see short-term volatility pick up, Americans shouldn’t lose sight of their financial goals. I suggest creating thoughtful financial plan that aligns their portfolio with their goals. Remaining focused on your goals and appropriately positioning a financial plan can help safeguard finances.

Job openings and the market both reached record highs in Q3, boosting the Personal Financial Pleasure index to an all-time high. While times are this good, where should Americans place their focus?

RW: As personal financial pleasure reaches an all-time high, it’s an excellent time to review all outstanding liabilities and decide whether any debt should be paid down or paid off. Taxpayers will generally want to pay down high-interest rate non-tax-deductible consumer debt, such as credit cards and personal loans. Further, as discretionary income rises, Americans should ensure they have ample cash on hand for when times are not as good. This is critical to managing emergencies and hardships without resorting to high-interest debt. While times are prosperous, consider investing in yourself by taking classes to learn a new skill that can lead to a new position with higher lifetime career earnings.

Per the index, the stock market now accounts for nearly 1/3 of all financial pleasure. Recently, the market has been experiencing a lot of volatility. In this current environment, what should Americans of all ages keep in mind?

RW: It’s essential for individuals of all ages to maintain focus on their long-term goals and stay the course. Keeping the funds needed in the short term in safer, less volatile asset classes, such as cash and short duration fixed income, will provide a buffer against the volatility. For investors trying to build up cash value, volatility can present an opportunity to invest at attractive valuations. This can be especially powerful for younger investors who have long-term goals. Volatility can also offer investors the opportunity to collect tax losses in their portfolio to offset taxable gains.

In September, the Federal Reserve announced plans to increase interest rates — In what ways can Americans expect a rising interest rate environment to impact their financial picture?

RW: Borrowing plays an important role in financial planning but needs to be revisited as interest rates rise. Consumers should keep in mind that as interest rates increase, it becomes more expensive for banks to borrow and ultimately that expense is passed along to the consumer. Before future rate hikes, consumers should look to pay down their credit cards and other high-interest bearing debt as much as possible. Any future interest rate increase will result in higher monthly payments on variable rate debt and therefore less disposable income. Not to mention, inflation is forecasted to pick up, and it’s important for Americans to factor that into their financial plan as well. It’s crucial for individuals holding large amounts of cash and cash equivalents to remember that to the extent their assets do not keep up with inflation, their purchasing power will diminish over time. One positive to note is that as banks raise interest rates, it presents an opportunity for Americans with cash on hand to shop around for a higher rate on their deposit accounts.

It is great news that the average Americans’ financial satisfaction is at an all-time high, but for those who are not feeling the benefits of this record, where would you suggest they begin to improve their financial situation?

RW: The current environment is a perfect time to analyze your financial situation. You can do this by simply taking an inventory of your assets and liabilities and putting them down on a single sheet of paper. Then calculate how much money you’re bringing in after taxes and how much you have left after covering your monthly bills. This process will help you to become more aware of where your dollars are going and help to reduce frivolous spending. If you have extra cash, consider increasing your savings rate. This may be an excellent time to build up that emergency fund aiming to cover at least 6 months’ worth of living expenses.

Check out the free resources available on the AICPA’s 360 degrees of financial literacy website. Once there, you can find budgeting tips, savings calculators, articles full of insight on a wide range of financial topics, and even a tool to help you build your own financial plan.

Jon Lynch, Manager, Public Relations, Association of International Certified Professional Accountants 

     

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