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International Women’s Day — March 8, 2021 — is a time to celebrate the achievements of women and acknowledge the valuable insights of women in the accounting profession.

This year, we asked AICPA and CIMA members to share their perspective on the pandemic.

 

 

• How has the pandemic affected your work/life and how have you managed that?
• What advice can you give other accountants and finance professionals about succeeding during this pandemic?
• What does International Women’s Day mean to you?

The responses were fantastic! Hear insights directly from the leaders in this motivational video: Women strengthen the profession, during and beyond the COVID-19 crisis.

Key themes of the video:

• Women are resilient and continue to achieve goals
• Mental health and well-being are extremely important and should be top priorities
• Companies need to feel empowered to think differently about how to support and promote women

In true fashion, the women shared perspectives that convey a holistic view — a characteristic often attributed to women. More than one member thanked her team and family; and there was a respectful nod to Bob Marley and ancestors. Judith Hunt, ACMA, CGMA, National Director Business Systems of Synapse Australia Limited acknowledged the original custodians of the land now known as West End, a suburb of Brisbane in Queensland, Australia — the land on which she lives and works. She wanted to pay her respects to their elders — past, present and emerging.

Challenging times

McKinsey’s article Women in the Workplace 2020 discusses the disruption that COVID-19 has caused in corporate America and how women — especially mothers, senior-level professionals and Black women — have faced distinct challenges. One in four women considered downshifting their careers or leaving the workforce due to the pandemic.

Women all over the world have shared similar challenges.

Jonyce Bullock, CPA, CGMA CEO, Squire and Company, encourages us to clarify working hours with our families and create boundaries, so we don’t feel like we’re “working all the time.” She goes on to advise that we focus on the positives by making “a list of all of the things you’ve been able to enjoy as a result of the pandemic.”

Gender equality benefits women, men and the transgender community

The younger generation always stands on the shoulders of those who’ve gone before, and “no nation in the world can achieve greatness unless women are working side by side with men,” says Aida Lim Abdullah, CEO of Penang Halal International.

Men can be feminists, too, and acknowledge that women lead in meaningful ways, offering trustworthy advice and reliable counsel. Management consultant Hannah Theodore, ACMA, CGMA, points out: “Organizations with gender equality and diversity can innovate more and drive better economic outcomes.” In our upcoming March 23 webcast Forging the Path: Women in the Accounting Profession, leading women will share how they got to their current leadership position and they’ll offer first-hand advice about how you can advance within the accounting profession.

Women in leadership are influential, paving the way for others. Marie Large, FCMA, CGMA, VP of Sales & Commercial Management Business Area, Digital Services at Ericsson, encourages women to “never limit your aspirations,” and Irelan Tam, FCMA, CGMA, Chair, CIMA Hong Kong advises that companies create an inclusive, empathetic and supportive workplace for all staff.

Self-reflection leads to personal growth and stronger communities

“The pandemic stopped the world in its tracks and provided a rare opportunity to pause and, hopefully, spend some time on self-discovery,” says Crystal Gao, FCMA, CGMA, Chief Financial Officer, Lightspeed China Partners. “I hope you have some time to think through your priorities and your life direction.”

Take March 8 to reflect on the achievements of the women in your life, and let’s continue to push for women’s leadership in the accounting profession. Register for our March 23 webcast for tips on what you can do, and jump into the conversation with these hashtags: #AICPAwomenlead; #IWD2021; #ChooseToChallenge.

For more than a century, people around the world have honored International Women’s Day to celebrate the social, cultural, economic and political accomplishments of women. This special day in March reminds us that we must continue making strides toward gender equality. As Kudzai K. Zindi, ACMA, CGMA, financial controller at Smurfit Kappa says, “It is still not time to rest on our laurels, as there are still many glass ceilings to be broken.”

Shelly Frazier, Senior Manager, Women’s Initiatives

    

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Investors, customers and key stakeholders continue to seek reliable and transparent information on a variety of environmental, social and governance (ESG) metrics. The accounting profession  has a key role to play. Accountants within organizations play an important role in integrating critical business information; implementing and maintaining relevant processes and controls; making and enabling business decisions; and reporting to stakeholders in a holistic, integrated way. Public accountants play a critical role in providing assurance and advisory services to organizations to enhance confidence in the reported information. As influential members of almost every business, government and non-governmental organization, professional accountants are uniquely positioned to make a difference.

Recently, we shared six ESG trends that will affect the accounting and finance professions in 2021. We also released five steps companies can take to prepare for ESG reporting and assurance. These trends are based on conversations with Association members, as well as global standard setters and executives at CPA firms and other organizations who lead ESG reporting and accounting efforts.

Top ESG trends affecting the accounting profession and CPA firms’ clients in 2021

• Demand for ESG reporting is rising, particularly under the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Various investors, investor organizations and certain jurisdictions around the world call for reporting that follows these standards and frameworks.
• As reported ESG information continues to make its way into mainstream financial reporting (e.g., SEC Human Capital disclosure requirements and the SEC’s renewed focus on climate-related disclosures), responsibilities for ESG reporting are shifting from being the sole responsibility of sustainability and marketing teams to include accounting and finance professionals.
• Reducing environmental impact is a priority, with companies placing a high importance on waste and plastic reduction in their supply chains and setting ambitious goals with accelerated timelines for achieving carbon neutrality.
• ESG’s social component is also growing, with organizations emphasizing diversity and inclusion in hiring practices throughout their supply chain and in equal pay and fair labor practices.
• Demand for CPA assurance services continues to increase as companies try to enhance stakeholders’ confidence in the reported ESG information.
• There is continued movement toward a global set of sustainability reporting standards.

Steps organizations can take to get ready for ESG reporting and assurance in 2021

With significant investor interest in reported ESG information, the credibility and reliability of that information are essential. To that end it’s critical to apply the same rigor to the measurement and reporting of ESG information as is applied to financial reporting. Here are five steps organizations can take to get ready for ESG reporting and assurance in 2021:

• Incorporate management of ESG risks into broader enterprise risk management processes.
• Determine what key performance indicators are most relevant and important for stakeholders and the sustainability reporting standard or framework that will be used for reporting.
• Assess the types of data sources and determine whether policies exist that ensure the data is reasonable and accurate, comes in a timely and reliable manner and is derived in a way that produces consistent and comparable results.
• Establish appropriate board oversight over critical ESG matters and develop and document internal controls over the data gathering and reporting processes to ensure accuracy and completeness of reported data.
• Consider engaging a CPA firm to perform a readiness assessment to help prepare for an assurance engagement over the reported ESG information.

To enable audit practitioners to prepare for and leverage these trends, we partnered with the Center for Audit Quality (CAQ) to develop ESG Reporting and Attestation: A roadmap for practitioners. It provides tools to help auditors inform clients’ approach to ESG disclosures, help clients determine whether to seek an attestation report on ESG information and help determine how to report ESG information in a Securities and Exchange Commission (SEC) submission. The roadmap complements AICPA’s suite of ESG reporting, assurance and accounting resources. There are more resources here.

The roadmap also examines the history and evolution of ESG reporting and the latest developments driving toward including ESGs in SEC filings. It also looks at current practices of disclosure and attestation over ESG information disclosed in SEC filings and provides insight into the risk and legal considerations associated with performing assurance engagements over such information. The report has examples of Vornado Realty Trust and Etsy, including, or referring to, attestation of an ESG report in their SEC submissions.

Desiré Carroll, CPA

     

Now that 2020 has concluded, many owners of commercial real estate are contending with the coronavirus pandemic’s impacts on their financial performance.

As auditors, you should recognize that the execution of financial statement audits for 2020 is going to be different from prior years, and the commercial real estate market brings with it a range of issues that you will have to be prepared for. You can expect many facets of a commercial real estate audit to feel the pandemic’s effects. The focus of this blog is on impairment considerations for commercial real estate properties.

You and your engagement team may want to make use of AICPA resources such as the COVID-19 audit toolkit and the COVID-19 accounting resources.

The pandemic’s economic impact has varied among property types with the most acute being seen initially in portions of the retail and hospitality sectors, where operations were negatively affected by mandates that required temporary closure or limitations on operations in response to the COVID-19 pandemic. Regardless of the property type, however, as you prepare for audits of year-end financials, you should evaluate whether the pandemic has affected impairment considerations. 

1. Forecasts

Given the current economic environment, impairment considerations of commercial real estate generally warrant careful considerations. Forecasts, particularly cash flow forecasts about clients’ future financial performance, may play a key role in impairment assessments, and auditors may need to evaluate the reasonableness of these forecasts.

When estimating undiscounted cash flows as part of an impairment recoverability test performed in accordance with FASB ASC 360, Property, Plant, and Equipment, the forecasts of lease income over a property owner’s expected holding period play an important role. You may need to compare the cash flow forecasts to the contractual rent obligations. You may also need to assess the reasonableness of assumptions about the collectability of rent payments and tenants’ readiness to renew their leases.

For example, in certain sectors, property owners have granted rent holidays to certain struggling lessees. In such scenarios, lessors are expecting tenants to resume making rent payments when the impacts of COVID-19 are no longer negatively affecting operations. Clients’ assessments of the collectability of deferred lease payments and the risks that property owners face as they try to re-establish tenants on a predictable payment plan should be evaluated when considering their cash flow forecasts. This analysis may include consideration of the tenants’ creditworthiness and the impact the COVID-19 pandemic has had on operations.

2. Valuations

You may also need to consider property valuations as part of impairment assessment. This year, the valuation process may be more difficult because of the absence of a steady flow of property sales. Some segments of the real estate market, such as industrial property, remain active. But in segments such as retail, prospective buyers may be counting on discounts that property owners are unwilling to offer.

The forecasting and valuation challenges are most pronounced in assessments of key valuation assumptions, which often include the work of third-party specialists, such as property appraisers, that management may use to assist with valuations.[1] You should typically request documentation that supports the appraisers’ estimates and make sure you understand the factors that contributed to the estimates and forecasts.

If, as part of the impairment test, it is necessary to determine the fair value of the property in accordance with FASB ASC 820, Fair Value Measurement, you should request documentation about the market assumptions used in arriving at the forecasts.

The lack of reliable data about property sales limits the amount of information available when assessing a property’s value. You should be well prepared for your discussions with appraisers and valuation preparers. You may have to challenge estimates that do not appear reasonable and make sure you understand the valuation methodology and assumptions.

3. Importance of judgment

Uncertainty around property valuations adds to the discipline necessary in the use of professional judgment for 2020 audits.

Because each real estate market is distinct, and each property has its specific characteristics, you need to pay close attention to the facts and circumstances for each property.

Moreover, the longer the COVID-19 pandemic affects operations, forecasting expectations becomes harder. During previous economic downturns, business owners that survived were frequently required to sharpen their skills at managing how the crisis affected their finances.

The coronavirus pandemic is different. Its impact has already lasted for a year, and it’s far from certain when it will end. The economic fallout is becoming more severe and somewhat less predictable. The pandemic’s changing severity has added to the difficulty of making a wide range of estimates. It’s not clear what the economy that emerges in 2021 or 2022 will look like. Audit work will need to contemplate this new reality.

John Solomon, MAI, Deloitte Risk & Financial Advisory Managing Director, Deloitte Transactions and Business Analytics LLP. John is a leader in Deloitte Risk & Financial Advisory’s real estate consulting practice. John has over 25 years of experience advising organizations in all industries on commercial real estate matters inclusive of valuation, M&A, lease analysis, tax and financial reporting, financial modeling and public-private partnerships.

Eric Knachel, CPA, senior consultation partner, Professional Practice Group, Deloitte & Touche LLP. Eric is a senior consultation partner in the Professional Practice Group at Deloitte & Touche LLP with more than 25 years of experience. He leads Deloitte’s revenue recognition subject-matter team and guides audit practitioners and companies on complex financial accounting and reporting issues involving revenue recognition. Eric holds a bachelor’s degree in accounting from the University of Maryland. He is a CPA and a member of the American Institute of Certified Public Accountants.

___________

EDITORS NOTE:   As used in this document, “Deloitte” means Deloitte & Touche LLP and Deloitte Transactions and Business Analytics LLP, both subsidiaries of Deloitte LLP.  Please see deloitte.com/us/about for a detailed description of Deloitte LLP and its subsidiaries.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services.  This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2021 Deloitte Development LLC. All rights reserved.

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[1] Regardless of whether valuations are performed by management or a third party, management is responsible for the estimates that are used to prepare the financial statements and for underlying assumptions used in developing these estimates.

    

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Around this time last year, 12 months and 135 years ago to be exact, we binge-watched “Tiger King” and pondered Prince Harry and Meghan’s royal departure. In early March 2020, we also worked through what we thought would be another conventional tax season. Remember when we were laser-focused on improving our client services and figuring out the Tax Cuts and Jobs Act (TCJA) and the term Paycheck Protection Program (PPP) wasn’t in our vocabulary? That all feels like a lifetime ago.

The COVID-19 pandemic turned our lives, communities and ways of working upside down. We grappled with remote working and technology, dealt with IRS operational issues, struggled to keep up with new tax laws and guidance and took on new advisory roles while dealing with a never-ending tax season.

Now, we’re in the throes of a new tax season. Some of us probably feel like we never had a respite. In some ways, it seems to be a repeat of last year’s tax season issues, but with added tax laws (including more potentially on the way) and a heightened alertness for data security threats. How do we pivot and adapt to a sequel of last year’s dynamic tax season?

Here’s some advice to help you tackle the challenges of the 2021 tax season.

Check off tax season must-dos.

Whether this is your first or 20th tax filing season, you need to carry out some essential activities at the beginning of the year, such as reviewing e-filing requirements and client acceptance procedures as well as testing tax software. Run through these handy checklists on what to do now and throughout busy season.

Stay up to date on the latest.

With the constant revolving door of tax legislation and IRS guidance, keeping up with what’s current can be daunting. Stay in the know by visiting and following the AICPA Tax Section’s tax season hub. You’ll find news on the latest tax provisions, a state-by-state outline of Paycheck Protection Program (PPP) tax treatment and the Tax Section Odyssey video series on emerging issues, such as the employee retention credit. Plus, you’ll find CPE learning to take deeper dives on technical topics to quickly learn what you need to know.

Talk to your clients now about extending.

Will the IRS extend the April 15 tax filing deadline? There is no definitive answer yet. The AICPA sent a letter to the U.S. Treasury and the IRS asking for more certainty on the tax filing deadline. But, in the interim, it’s best to start the extension conversation with clients to balance your workload as you get deeper into busy season. This extension reminder letter will help you get started.

Connect with IRS online tools.

The IRS still struggles with the backlog of unprocessed 2019 tax returns and erroneous notices that make getting answers from the IRS possibly difficult again this year. Use this suite of IRS online tools to help you and your clients address some of these matters.

Safeguard that data — it’s your responsibility.

As a tax CPA, you are held to a professional standard to protect your client’s information, which includes distilling proper quality control procedures in your practice. With the latest headlines centered on identity theft fraud involving unemployment benefits and scams on electronic filing identification numbers (EFINs), it’s more crucial than ever to safeguard your client’s data. Refresh your know-how on the professional data security responsibilities as a tax professional. And, if a client experiences tax-related identity theft, be sure to check out our Tax Identity Theft Toolkit to help them navigate the complexities.

Brush up on virtual currency tax treatments.

Virtual currency transactions are becoming popular, and your clients are probably dabbling in this space. It’s good to catch up on all the latest tax developments and guidance related to virtual currency.

Keep your skills fresh.

For more guidance and professional development, visit the AICPA Tax Section hub to learn how we can help you this tax season. Explore our expansive resource library, news and membership benefits, such as 15 hours of free CPE and the Annual Tax Compliance Kit, which contains engagement letters, organizers, checklists and insightful practice guides.

Although this year seems like another sequel, it also has some additional layers of complexity. Your best bet is to stay informed and arm yourself with some top-notch tax resources to help you stay on track.

Minh Graham, CPA, Lead Manager — Association of International Certified Professional Accountants 

    

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If you are like many of the tax practitioners I’ve talked to lately, the 2020 filing season felt like a rambling run-on sentence.

Because of the pandemic, last year’s April 15 filing deadline was extended to July, which ran into fall extension season and bled into more tax legislation. Now we are staring down another April 15 deadline probably not as rested and refreshed as we usually are in late February. 

However, to put things in perspective, I’d like to share one of my favorite quotes (I routinely say some version of this to my teenager, whether she wants to hear it or not):

“Attitude is a choice. Happiness is a choice. Optimism is a choice. Kindness is a choice. Giving is a choice. Respect is a choice. Whatever choice you make makes you. Choose wisely.”

Roy T. Bennett

With those thoughts in mind, here are some wise choices to make now and over the next several months.

Take care of yourself.

That might mean going for a run, taking a yoga class, drinking enough water, eating healthy food regularly or all of the above. It’s difficult to give clients the needed focus and energy when your battery runs low. A trick that works for me is to put exercise on my calendar and treat it like an appointment. Also, take advantage of meal delivery services — I find they have healthy options and it’s a real time saver!

Talk to your clients early about a potential extension.

Outstanding guidance is still needed in several key areas related to tax legislation. Combining that with the lingering pandemic could mean an extension may be the way to go even for clients who previously have resisted one.

Maybe you have a client that qualifies for the employee retention credit in 2020 but time is needed to determine which wages to use for amending the 2020 Forms 941. Or, you have a complex individual client who doesn’t like to extend because they think it increases their audit risk. Help your clients understand that an extension isn’t bad and, in this case, it could be a wise choice.   

Remind clients to share the amount of their economic impact payment(s) with you.

Everyone who received a payment should have received Notice 1444 and/or Notice 1444-B. A percentage of your clients likely didn’t keep that notice or didn’t make a note of the payment amount. Individuals can securely access their online account to determine that amount.

To save time, provide your clients steps on how to get this information. You could use your tax software analytics to gather information for those taxpayers whose 2019 adjusted gross income (AGI) qualified them for a payment.

Encourage clients to get their information to you as soon as possible.

Even for clients who are filing extensions, find ways to motivate them to do this.

Provide a deadline to clients who aren’t going on extension for when they should provide ALL (OK, most is probably more reasonable) of their information to you. Incentivize your clients with a discount or discourage them from providing information late with a surcharge. And, if you haven’t heard from your clients, gather the information needed to file an extension using this letter.  

Don’t click on that email link!

Phishing attempts are increasing. Make sure you and your colleagues are on high alert for these types of emails. They may look legitimate since they look like they’re coming from a company you know or trust. Often, these phishing emails have typos, incorrect grammar or dummy websites. The IRS recently issued an urgent electronic filing identification number (EFIN) scam alert to tax professionals.

Check on your staff and co-workers.

This has been a hard year for many reasons. My optimistic side believes we will emerge on the other side with a lot of lessons learned. But, with tax season here and life still not back to “normal,” a lot of folks are struggling. Take that extra minute and ask how your staff and co-workers are doing and listen to their answer.

I wish you a safe and productive tax season. You’ve got this!

April Walker, CPA, Lead Manager — Tax Practice & Ethics — Public Accounting, Association of International Certified Professional Accountants

    

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“Same as last year?” Definitely not.

This year won’t be “business as usual” for auditors. Auditors are navigating a new revenue recognition standard and still dealing with pandemic-related disruptions. CPAs have worked hard to perform audits under uncertain circumstances since the pandemic began, and that work will continue this year.

The AICPA® will help you prepare for these changes so you can keep performing high-quality work. We talked to experts — more than 230 peer reviewers — about the challenges auditors are facing around revenue recognition and the current business environment. We’ve also identified resources that will help you audit successfully.

Here’s what the peer reviewers said.

Top five ASC 606 challenges: Accounting

The Financial Accounting Standards Board’s (FASB) new revenue recognition standard, FASB ASC Topic 606, Revenue From Contracts With Customers, is one of the most significant accounting standard changes in history. The surveyed peer reviewers identified these top ASC 606-related accounting challenges:

1. Identifying performance obligations (31% of respondents)
2. Recognizing revenue (28%)
3. Identifying relevant contracts (26%)
4. Identifying variable consideration, including material rights (22%)
5. Determining appropriate transaction price allocation (16%)

Auditors should consider how these issues may affect their clients. The AICPA’s revenue recognition toolkit has resources that can help.

Top five ASC 606 challenges: Auditing

The surveyed peer reviewers also weighed in on the top ASC 606-related audit challenges:

1. Determining whether management appropriately applied ASC 606 (48% of respondents)
2. Documenting the understanding of key contract terms where necessary (30%)
3. Evaluating management’s process for developing the estimate(s) (28%)
4. Determining whether assumptions used by management were reasonable (23%)
5. Assessing associated risks (21%)

The revenue recognition toolkit I mentioned earlier also has audit-specific resources to help. One such resource is a practice aid that explains the five ASC 606 steps. It also outlines associated potential risks of material misstatement, processes where the client should have established controls and examples of audit procedures to address risks.

Top five challenges related to the pandemic: Accounting and auditing

The abrupt shift to remote working, economic uncertainty and new federal relief programs created numerous accounting and auditing complications for organizations this year:

1. Internal control (41% of respondents)
2. Compliance with CARES Act requirements (e.g., Paycheck Protection Program) (38%)
3. Going concern (33%)
4. Asset impairments (24%)
5. Revenue recognition (22%)

Leverage some of the AICPA’s resources to get ahead of these challenges. The internal control toolkit’s resources include an internal control over financial reporting tool template and an article on common missteps to avoid. 

The AICPA’s COVID-19 Audit & Assurance toolkit is another valuable source for information on auditing remotely as well as auditing clients affected by the pandemic. The resources cover topics such as fraud risk, issuing an appropriate auditor’s report and Paycheck Protection Program implications.

Thank you to the peer reviewers who shared their thoughts with us. Through the Enhancing Audit Quality initiative, the AICPA continues to uncover more insights about how to audit successfully in today’s business environment. Keep following our blog and the COVID-19 Audit & Assurance toolkit for more information.

Deana N. Thorps, CPA, MBA, Manager — Audit Quality Initiatives, Association of International Certified Professional Accountants

     

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Cyber breaches have become more common threats for businesses. The COVID-19 pandemic accelerated the digitalization of many companies and a shift to remote working. That increased first-quarter cybercrime 273%  in 2020 compared to 2019. The new and innovative ways hackers found to steal company data cost U.S. businesses an average of $8.64 million per breach. Even more startling: small businesses were victims of nearly a third of all cyberattacks.

What new trends, patterns and hacks can we expect this year? How can CPA firms protect their practice and their clients from cyberattacks?

Jim Bourke, CPA, CITP, CFF, CGMA, a cybersecurity expert and Managing Director of Advisory Services at Withum, shares three cybercrime predictions for the year.

Trend 1: Remote work is making companies more vulnerable to cyberattacks.

Within the past year, more people across the globe are working remotely than ever before. “That creates a massive amount of opportunities for cyberthieves,” Bourke says. “We’re going to see a continued proliferation of cybersecurity breaches.”

The pandemic affects how we all work, and your IT department is no different. Most IT teams are well versed in protecting office networks against data breaches. However, they likely didn’t anticipate that most of their staffs would work remotely for the foreseeable future.

Bourke says that the shift created a new level of complexity.

“All it takes is one staff person to give away the keys to the kingdom and let a potential cyberthief in,” he says. However, firms can reexamine the controls and security protocols they have in place to mitigate the risk.

Trend 2: Organizations will educate employees about how to minimize security risks while working remotely.

Bourke suggests that more companies will instruct their staffs about how to prevent these risks while working remotely. IT departments should cover topics such as how to secure home networks. For example, he says, “Most people never change the password for their home wireless router, which is a major point of vulnerability. Anyone who passes through your house could gain access to anything that your laptop is connected to while you’re on that network.”

Hackers may also target the technologies commonly used for remote work, such as Microsoft Office, Skype or Zoom.

“This technology is not new, but we’re using a lot more of it than we’ve ever used before,” Bourke says. “We’ll begin to see more phishing attacks around trying to steal credentials for these programs.”

Firms should be proactive to ensure that employees know how to identify these types of attacks.

Trend 3: CPAs will continue to be essential partners in identifying and addressing cybersecurity risks.

CPAs regularly work with financial information and understand the vulnerabilities associated with storing and handling confidential data. Bourke says that the required education for CPAs — whether for their accounting degrees or as part of continuing education throughout their careers — uniquely prepares them for a cybersecurity role. “The best team to help clients with respect to cybersecurity awareness and remediation is a team made up of CPAs and IT professionals,” he says.

CPAs can serve multiple roles in preventing cybercrime — such as identifying potential threats, developing safety protocols and evaluating risk management plans — within their firms or for clients. However, if your firm doesn’t have cybersecurity expertise, you can connect clients with experts who can help them put together effective cybersecurity risk management programs. If your firm wants to expand its cybersecurity knowledge, consider training your staff or partnering with a firm that has this expertise.

Increase your firm’s knowledge.

Cyberattacks aren’t going away and are becoming more prevalent. CPAs play an important role in protecting clients from risks. It’s better to proactively address threats. Now is the time to learn the best cybersecurity practices.

We’ve developed some resources, including articles, podcasts, reports and webcasts, in our Cybersecurity Resource Center to expand your firm’s knowledge. We also offer cybersecurity certificates to help you learn more about how to prepare for these threats.

If you want to take it a step further, consider the AICPA’s Certified Information Technology Professional (CITP®) credential for your staff. The CITP credential illustrates proficiency in assessing, detecting and managing cyber risk. Having a CITP on staff will help boost client confidence and enhance your firm’s credibility as a cybersecurity service provider.  

Ultimately, cybercrime is not only a risk to your (and your clients’) data but to your firm’s reputation. But, with proper training, you can be prepared to mitigate these potential risks.

Kristen Hughes, Associate Director — Advisory Services & Credentialing, Association of International Certified Professional Accountants

     

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Millions of smaller organizations have used digital transformation to reinvent the way they work during the pandemic. The accounting profession is no exception. Fully 97% of respondents to an informal poll of AICPA and CIMA members in late fall 2020 said COVID-19 accelerated digital transformation in their organizations, firms and small businesses.

That poll was part of a series to learn more about AICPA and CIMA members’ perceptions on how to keep digital transformation in process. The data, while not statistically representative of the whole member community, offers a quick snapshot of the concerns many organizations may need to address on their digital transformation journey.

Indeed, the COVID-19 crisis changed the way the world does business, with digital solutions enabling many businesses to survive or even thrive in extraordinary circumstances. Here’s some helpful advice from leaders and members of the Association of International Certified Professional Accountants, the unified voice of the AICPA and CIMA, to get you on your way.

Budget issues and ROI loom large

Budget concerns or constraints are perceived as a prime challenge to digital transformation in small firms and organizations, according to the Association’s findings. Among the answers given, it was cited by CPA Letter Daily readers nearly 30% of the time as the main barrier to transformation, with the challenge of gaining leadership buy-in to transformational steps coming second. For those trying to assess or to convince leaders of the value of investments in digital transformation, traditional measures may be the wrong tools.

“If you try to apply traditional ROI on digital transformation, it will lead you in the wrong direction,” according to Ash Noah, CPA, FCMA, CGMA, Association vice president and managing director of learning, education and development – management accounting. Speaking in an AICPA LinkedIn Live, he pointed out that investment in transformation often focuses predominantly on generating efficiency and cost reductions but, with digital transformation, “you need to look at how transformation can drive the top line and serve your customers in new and better ways. Look beyond cost reductions and efficiency-based ROI to see how you can fundamentally reinvent your business model and create new revenue streams through new value propositions.”

Looking back to look forward

Other challenges cited by many Association members included finding time to plan and knowing where to start. Learnings from looking back can help organizations see the way ahead, Noah advised. He recommended that organizations consider what they wish they had done or known before the crisis as a starting point for future planning. They can also build on their experiences during recent months. He pointed out that CFOs and other finance professionals have moved out of their own realms during the pandemic to become more involved in a variety of other areas, such as supply chain and liquidity concerns. In addition, a business continuity plan, always a valuable tool, can help organizations identify the best way to build a foundation for whatever the future brings.

And transformation doesn’t have to happen all at once, noted Carl Peterson, CPA, CGMA, Association vice president of small firm interests – public accounting, also a panelist in the LinkedIn Live discussion. “What are the next incremental steps?,” he asked. “Small businesses and firms need to build on what they have learned and turn it into the foundation for a strategic plan,” leveraging the opportunities they’ve been able to identify this year. After navigating through the uncertainty of the pandemic, smaller organizations “may find that the hardest change may have already happened.”

Remember the advantages

Cost efficiencies were recognized as one of the top perceived benefits of digital transformation in the Association surveys. Organizations can review their own experiences to identify the benefits that a shift to digital solutions has already delivered during the pandemic. As an example, Peterson noted that, when his former six-person CPA firm moved to cloud-based solutions several years ago, “we found we had better cash flow and more completed tax returns.”

Another value to consider is the enhanced data available through digital transformation, a benefit cited by Association members. That data can be used in a variety of ways, such as adjusting inventory or prices based on purchasing trends, developing new services and predicting market needs. In short, organizations can better understand their businesses and how best to serve customers or clients. 

Whether organizations are ready or willing to embrace digital transformation, the reality is that the pandemic has already catapulted them into new ways of doing business. “Our members are leading the change management,” Peterson said. “They have discovered how to use digital transformation to be more efficient and deliver services better,” which can lead to potential new opportunities. “You may not be aware of what they are until you get started.”

A guide for your roadmap

How can organizations get where they need to go in terms of digital transformation? A new Association report, Digital transformation reimagined: Accountants’ lessons learned and tips for moving forward, reveals many benefits to seizing the opportunities offered by digital transformation, including efficiencies and cost-cutting enabled by new processes, competitive advantages in bringing in new clients and attracting and retaining top people, and greater understanding of client or customer needs, which makes it easier to meet or exceed their expectations. 

Based on interviews with CPAs and finance professionals around the world, the report includes a roadmap that smaller organizations can use to chart and drive their own transformations. “Accountants and finance teams are well-positioned to meet organizations’ evolving needs and help support new business models,” the report concludes.

Armed with insights, implementation tips and helpful resources, it’s time to start or enhance your digital transformation. Visit aicpa.org/digitalforward.

Association Staff

     

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Most organizations are effectively helping their staffs cope during a time that has put even the strongest among us on edge. Some stress-relieving strategies include:

• moving to a four-day workweek,
• giving stipends for wellness coaches or classes and
• openly discussing mental health and better self-care with the staff.

Job security is one of people’s top worries. According to a National Institute for Health Care Management Foundation study, 54% of Americans fear that they’ll lose their job because of the pandemic. Articles, studies, podcasts or white papers are published almost daily about how employees must learn new skills to remain employable in a world where industries are going through digital transformation. The accounting and finance profession is no exception. From conducting audits and safeguarding clients’ data to improving customers’ experiences, technology is altering how we work.

Knowing job security is one of people’s top fears, how can organizations alleviate some of their staffs’ stress? Offer more training. Unfortunately, the learning and development budget often dips during uncertain times. Smart leaders, while making critical decisions to keep businesses running as smoothly as possible, understand that people are an incredible asset. Those employees drive culture and culture drives brand. Organizations that offer learning to their staffs not only boost goodwill but set up the organization to surpass competitors beyond the pandemic and for years to come.

Some organizations wrongly believe that trained employees will desert them for better-paying jobs. Science Daily cites the five-year study by two German university professors that says the opposite. They found that training increases not only productivity but loyalty to the company, even when an employee could leave for a high-paying role.

Investing in staff learning and development also can grow a business’s bottom line. An elearningindustry.com article says that companies investing at least $1,500 per employee annually earn 24% more profit than companies with lower training budgets. 

Josh Bersin, an influencer and global industry analyst, says in a LinkedIn article that the value of employees increases over time. At first, a new employee is a cost to the organization. With time, they begin to understand the internal workings and, with the right development, become more valuable to the organization. Retention is key to realizing that appreciating asset that comes from holding on to valuable staff members.

If you’re a partner or senior leader, how should you invest in your staff’s training? What does your staff need to take your organization to the next level? Maybe it’s that LMS system you’ve considered. Perhaps it’s getting a qualified trainer to educate your staff about the latest technologies. Could several members of your staff attend an upcoming conference that serves CPAs in a variety of roles and industries and at various career levels, such as ENGAGE 2021? Take advantage of group pricing and register your team.

Look for free or low-cost options to develop your staff, such as the AICPA’s Digital Mindset Pack that offers free CPE for AICPA® members around the hottest technologies changing the profession. Check out the Go Beyond Disruption podcast for insights on emerging technology, human intelligence and digital transformation.

Keeping your staff engaged with the learning they need for the future shows that you care about career development. They’ll probably be thankful and loyal to you through the pandemic, quite possibly as loud brand ambassadors who praise your organization while taking your business to the next level.

Association Staff

     

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Your personal identification (ID) is just that, personal. Unfortunately, in today’s world, your ID could get compromised with everyday activities such as ordering food online or signing up for a new music service. To observe Data Privacy Day, the AICPA® Financial Literacy Commission encourages you to take a few steps to find out where your ID has been — and make sure it’s safe and secure.

It might surprise you to learn that most Americans feel that it’s inevitable that their information will be stolen. Three in five (60%) say that it’s likely that ID theft will lead to a financial loss in the next year. The good news is that they recognize this as a real threat. The bad news is that many still don’t incorporate measures to protect their financial information, even with a significant increase in their online shopping since the start of the pandemic. This is all according to a recent AICPA survey The Harris Poll conducted on behalf of the American Institute of CPAs® (AICPA).

Taking a few proactive steps can go a long way to help mitigate the ID theft threat. To avoid the financial fallout of someone posing as you, the AICPA’s 360 Degrees of Financial Literacy program encourages Americans to use Data Privacy Day to learn about the threat and the steps that will help protect them.

Why is protecting your personal and financial information important? And what can YOU do to prevent your data from falling into the wrong hands? To learn these answers and more, Matt Rosenberg, CPA/PFS, a member of the AICPA’s National CPA Financial Literacy Commission, spoke with AICPA Insights about the AICPA survey results  and how to protect your information from scammers.

Did anything from the survey concern you? Why does this matter now more than ever?

Matt Rosenberg: The fact that more than half of Americans have increased their online shopping (56%) since the start of the pandemic shouldn’t come as a surprise, however, it is concerning that less than half of online shoppers (45%) regularly check their statements to ensure charges are recorded correctly. This is not only important for preventing fraud but also catching mistakes. I’d hate for $200 to be taken from my account for a cup of coffee instead of $2.00, simply because the vendor misplaced a decimal and I never noticed it. 

What are some of the risks for those who don’t take steps to protect their information?

MR: While credit card companies or banks may refund some fraudulent purchases, this isn’t a certainty, and most of the risks to identity theft are broader than a single transaction. Once a fraudster has access to your personal and financial information, they can be used to make recurring unauthorized purchases, open accounts and damage your credit. Bad credit makes it harder to obtain credit cards, favorable loan terms, lease a car, purchase a home or even pass a background check as part of a job application. The outcome can be a downward spiral of financial difficulty that will make a consumer’s life harder and more stressful. The increase in online shopping has created more opportunity for scammers. So now, more than ever, it’s important for consumers to pay attention. Many people who haven’t fallen victim to identity theft may not take it as seriously. However, the survey found that nearly one in five Americans (19%) suffered identity theft or attempted identity theft within the last year, showing that the issue is widespread.

How can Americans protect their IDs?

MR: First, people should be familiar with their credit report and score. Unfortunately, the survey found that one-third (33%) of Americans have never check their credit report. While regularly checking your credit can feel like a chore, credit agencies make it easier by allowing individuals to sign up to receive alerts anytime something changes their credit scores. Everyone should sign up for these alerts and make sure to look at it when one is received. Second, everyone should create an efficient password system and keep it confidential. Using the same password for all sites, or easily guessed passwords, is never a good idea. But using superfluous or elusive passwords that are different for every site often leads people to write them down and/or create lists that can be compromised. Having a password system that is both secure and manageable takes time and thought, but it’s the best way to prevent your identity from being compromised.

The AICPA has resources at 360FinancialLiteracy.org/SafeID to help Americans learn about the ways to protect their information and the steps to take if they become an ID theft victim. Share this valuable information with friends, family members and clients to help them protect their personal and financial information from fraudsters.

Association Staff

     

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