Braddon Group

As auditors and management begin to prepare for June 30 year-end audits, it’s a good time to share some of the top concerns for not-for-profits this year. How can not-for-profits reassure donors that their contributions are in safe hands? What key implementation issues on new accounting standards updates are not-for-profits grappling with? Outlined below are four topics that should not be overlooked.

1. Cybersecurity

In addition to common hacking risks, not-for-profits that accept electronic contributions are targets for credit card fraud. While retailers collect certain personal information to set up customer accounts and ship goods, not-for-profits often forgo requiring that level of detail to make donating simple. Unfortunately, this makes not-for-profits an easier testing ground for stolen credit card data. Not-for-profit entities with real-time credit card authorization and settlement are even more likely to fall victim because real-time verification makes the stolen data more valuable. These organizations then bear the burden of repaying fraudulent donations in addition to paying fees related to the refunds. Organizations that use electronic methods to accept contributions should consider adopting appropriate controls to ensure revenues are properly recognized and that cash receipts are safeguarded.

2. FASB Not-for-Profit Financial Statement Presentation Standard

This past summer Financial Accounting Standards Board (FASB) issued a financial reporting standard for not-for-profits (ASU No. 2016-14), which constitutes the most significant change to not-for-profit financial statement presentation since the mid-1990s. The new standard will simplify and improve how not-for-profits classify net assets and present information about liquidity, financial performance and cash flows. In turn, the financial statements of these entities will provide more relevant information to donors, grantors, creditors and other users.

Given the significance of these changes, it is important for not-for-profit accounting and assurance professionals to familiarize themselves with the requirements of the new standard and consider how the financial statements, as well as the systems and processes used to produce them, will change. Early adoption of ASU No. 2016-14 is permitted and may reduce the complexity of financial statement preparation for not-for-profits whose contribution streams currently affect all three net asset categories and those whose endowment funds currently have material unappropriated earnings or are underwater. Not-for-profit auditors also will be called upon for assistance as their clients begin implementing this standard and must be careful not to impair their independence.

3. Currently Effective ASUs

As I mentioned in my recent blog post, there are several significant Accounting Standards Updates (ASUs) effective for 2016 year-ends. Here’s a quick recap:

• Under FASB’s new going concern standard (ASU No. 2014-15), management will now have to evaluate and disclose whether there is substantial doubt about an entity’s ability to continue as a going concern.
• To clear up confusion among not-for-profits regarding the previously amended consolidation requirements, FASB issued ASU No. 2017-02 to clarify when a not-for-profit that is a general partner in a limited partnership (or similar entity) should consolidate a for-profit limited partnership.
• FASB simplified the presentation of debt issuance costs via ASU No. 2015-03, which aligns the balance sheet presentation requirements for debt issuance costs with those of debt discounts.
• Also simplified, and aligned with International Financial Reporting Standards (IFRS), are subsequent measures of inventory. Under ASU No. 2015-11, inventory should be measured at the lower of cost or net realizable value.
• Fair value disclosure requirements have changed for investments measured using the net asset value per share practical expedient. ASU No. 2015-07 removes the requirement to categorize those investments within the fair value hierarchy.

4. Data-Driven IRS Inquiries

Data-driven decision-making for the Internal Revenue Service Exempt Organizations (EO) division involves running over 200 data queries on Form 990-series returns to ascertain whether a return might warrant examination. The IRS has experienced return change rates over 90 percent since implementing the new EO audit selection methodology. Practitioners who prepare Form 990-series returns should focus upon accuracy and completeness.

For a deeper dive into these important issues, be sure to attend the webcast, Not-for-Profit Entities: 2017 Audit and Accounting Issues, hosted by the AICPA’s Not-for-Profit Section on May 5, 2017 from 3-5 pm ET.

Thank you to the AICPA Not-for-Profit Audit Risk Alert Task Force for their contributions to this blog post.

Christopher Cole, Associate Director- Product Management and Development. Association of International Certified Professional Accountants. 

Business people meeting courtesy of Shutterstock

     

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Applying to the AICPA’s Leadership Academy Could be the Boost Your Career Needs

Hey, you. You made it over the hurdle of getting your CPA license, and you’re eager to take the next step in your career development… But you’re not quite sure what that looks like. Professional development takes on many shapes and sizes. Some people like online learning and self-study, while others are drawn to a classroom setting. Many people focus on developing their soft skills, while other prefer to keep their knowledge base sharp with more technical sessions.

One often overlooked aspect of development is building a strong network of contacts in your chosen profession. If you’re interested in connecting with some of the best and brightest young CPAs in the country, look no further than the AICPA’s Leadership Academy.  This selective event exposes the next generation of CPAs to a strong ethic of leadership and service to their profession that CPAs are known for.

Now in its 9th year, the AICPA’s exclusive Leadership Academy has graduated more than 270 CPAs, many of whom have taken on expanded leadership roles in the profession.

It’s a four-day program where emerging CPAs – like you – can get in touch with their leadership skills and really drill down on what they want to do with their careers and how their unique set of talents will help take them there. CPAs will learn about issues facing the profession today and how to view these challenges as opportunities.

Being selected to attend Leadership Academy is an opportunity to learn about yourself and the profession while establishing connections with talented and motivated CPAs from across the country. I’ve had the pleasure of observing a few days of Leadership Academy over the years and the energy in a room of so many likeminded, enthusiastic CPAs is incredible. But don’t take my word for it, three Leadership Academy graduates share their experiences below.

“Leadership Academy greatly accelerated my leadership development. By fostering self-reflection and group discussions, Leadership Academy helped me recognize and appreciate my unique strengths and guided me in designing a personalized strategy to become the type of leader I aspire to be. The network of highly engaged young leaders who attended the Leadership Academy alongside me provided encouraging support and has continued to be invaluable to my growth in this profession. I left with greater confidence and an eagerness to learn, grow, and give back to the profession. Years later, I am still reaping the rewards of this program.” – Jessica Cormier, CPA, CFF, Manager, Fraud, Forensic & Litigation, Horne LLP, Leadership Academy class of 2014

“Leadership Academy helped me come to know myself better and understand how I could leverage that knowledge to make a bigger impact on the world around me.  The people that I met through Leadership Academy are truly exceptional. Although it has now been seven years since I participated, I still maintain relationships with many of my classmates. The Academy gives you access to an amazing network of talented, caring individuals.” – Dan Griffiths, CPA, Director of Strategy & Leadership – Tanner LLC, Leadership Academy class of 2010

“Being accepted to the AICPA Leadership Academy is an amazing accomplishment for any up-and-coming leader, and the training and skill development sessions are top-notch. But what makes this program a life-changing experience is the access to some of the best and brightest leaders in our profession – many of whom are your fellow classmates. Over the course of a few days, personal and professional relationships are formed, which will last forever. I call on those relationships time and again to help me solve professional and technical issues. You will likely see the people you meet here doing great things in the profession for years to come.” –  Bobby Schroeder, CPA, Tax Manager – Ericksen, Krentel & LaPorte, Leadership Academy class of 2011

Additional information that applicants need to know:

Q: Who should apply?

A: Are you a young CPA between the ages of 25-35? Do you have three or more years of experience in the profession? Are you a voting member of the AICPA and a member of your state accounting association? Then you are good to go.

Q: When and where will it take place?

A: October 1-5 at the picturesque Washington Duke Inn in Durham, NC

Q: What is the cost?

A: While the skills you’ll learn and connections you will make are priceless, there is a cost associated with the Leadership Academy. $925 will cover program facilities, learning materials, meals, social events, four nights’ accommodation and attendee CPE.

Q: Sign me up! How do I apply?

A: The application process includes uploading:

1. Professional photo (press release style head-shot)
2. Current resume or vita
3. Two professional letters of reference (reference form)
4. Two essays:

• Essay #1 (500-700 words): What leadership competencies and characteristics will be essential to successfully lead the CPA profession in 2025?
• Essay #2 (250-500 words): Why do you want to attend the AICPA Leadership Academy? 

The application deadline is May 31, 2017. 

Still have questions? Feel free to join the conversation on Twitter by using the hashtag #AICPA_LDR. We look forward to hearing from you! 

James A. Schiavone, Senior Manager – Public Relations, Association of International Certified Professional Accountants

Photo: AICPA Leadership Academy Class of 2016

     

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Whether you’re rolling the dice to move past “Go” or speeding around curves like Mario, numerous studies show playing games of almost any kind stimulates thinking. Board games, chess, word games, games of strategy and the like are obvious choices. But did you know shooting hoops, playing interactive video games, golf, even playing charades in your living room, are all brilliance-builders too? Name the game and chances are it helps you think better and think faster, but note that different types of games enhance different parts of your intellect.

Research shows that throughout life, your brain can develop and change depending on current challenges. So it’s a good idea to provide a variety of activities that stretch and exercise the different facets overall, just as you would for your body. Many games boost more than one skill area, but here are a few get-smart options:

Mathematical Intelligence:

Board games enhance logical mathematical intelligence (the numbers department of your brain). Video games, perhaps a less obvious contender, are also known to increase math skills. Both game genres can sharpen the type of thinking that’s associated with brilliant scientists, mathematicians, investigators, accountants; they help you quantify and calculate more quickly and accurately. As a related but interesting side note – mathematically intelligent people also are generally skilled at perceiving connections and relationships, as well as thinking inductively and deductively.

Neuroplasticity:

Research shows that the brain actually grows, changes and creates new connections at all ages and stages of life. Your mind meets challenges head on, so if you’re forced to deal with say, complex situations in action-based video games, eventually your thinking adapts to overcome the challenges. Your brain finds new neural connections and can link different areas together, helping you adapt to video – and real-life – situations. Video games can improve decision-making, memory, focus, and even reaction times; and as challenges become more complex (as in, you move up a level), this forces your brain into broadening your range of abilities and skills needed to win.

Memory Boost:

Active sports and exercise have long been known to help memory and thinking overall – scientists say exercise can reduce inflammation and insulin resistance, and release chemicals that positively affect brain cell health. Just about any active game or sport makes the cut – golf, tennis, running, basketball, even those good-old-fashioned, run-around-the-yard games like Capture the Flag you may have grown up with.

From creating new connections and new ways of thinking, to boosting specific thinking skills and overall knowledge, games always play an important part in our lives. When you attend AICPA’s ENGAGE this June in Las Vegas, you’ll find an entire assortment of new connections, innovative pathways, knowledge that grows your expertise and plenty of ways to fire up those synapses. What you’ll also find are brain-building games of skill and strategy – such as Topgolf – which mixes neuroplasticity with fun, and creative thinking with social opportunities. ENGAGE is a neuron-connecting four days of learning and opportunity, with numerous ways to grow and develop your brain.

Jennifer Gardner, Manager Communications-Member Learning and Competency, Association of International Certified Professional Accountants

Games courtesy of Getty Images.

 

     

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Part II

Working from home brings with it a special set of challenges and benefits for employees, covered in Part 1 of this series. But what if you’re the employer? An increasing number of employers – from boutique firms to huge organizations – offer their employees everything from flexible work arrangements to full-time remote work. Many have found that with the right protocols in place, flexible work arrangements benefit employers as well.

Increasingly Small World 

There’s an online video featuring two co-workers…they walk, stop for coffee, cab to work…they’re apparently working on a project together. At first they seem to be in the same place at the same time. Then it hits you – the locales are different, the cultures are different, even the time zones. But when they work, they work as one.

This concept of working together from a variety of locations has been around for years – particularly for CPA practices. Many small, medium and large firms have incorporated the idea of a remote workforce. Technology has completely changed the profession by [more easily linking employees and in] opening up new ways to add value for practices, employers, employees and even clients.

Talent Can Come from All Over

If your firm is located in , for example, you probably have no problem finding talent. But if your firm is located in more far flung areas, finding the right talent might be a bit more challenging. Enter the idea of a virtual firm. With this model, firms can pick and choose from a broader hiring pool that’s never location-specific, so they can choose the practitioners they need by skillset, experience level or even time zone (effectively extending the work day if your practice tag-teams projects). This flexible, remote workforce model also helps firms retain top talent considerably longer. Because even when life throws your employees a curveball, they can remain with your practice via technology.

Carolyn Sechler, CPA, Founder and President of Sechler CPA PC, says her virtual team practice came about after she worked inside large firms for years, including serving as partner. She used technology to communicate with clients often and eventually realized that knowledge was what clients most valued. “It’s what we knew, what we could share, and how we could support organizations [that] was valuable,” says Sechler. Her current practice consists of employees working from five states and Canada, who have all worked from home for 18 years or more.

Gabrielle Luoma, CPA, is sole owner of GML CPA, an all-virtual firm located in Tucson, AZ. She points out the ability to attract staff from almost anywhere who prefer to telecommute, and who bring the right combination of education, skills and experience. “Where we may not have that skill as a small practitioner in-house, we can actually contract other CPAs to offer that type of service, and collaborate with other CPAs all over the nation,” says Luoma. By doing this, her firm can bring added value to clients.

Give Employees What They Want and They’ll Stick Around…Even if They Move Across Country

Happy employees are less likely to look for another job. And what makes people happier than feeling like they have the flexibility to maintain a good work-life balance? Additionally, those employees who feel their needs are being met are often more productive. Whether your employees have young children, assist elderly parents, work with a disability, or need to relocate, the ability to work from anywhere can help keep employer and employee together.

At Baker Tilly, remote workers often began working in-house, says Katherine Wiernicki, Partner Assurance Practice Leader in Washington, D.C. Wiernicki has worked with  numerous employees who work remotely. One audit manager needed to relocate to be closer to family to help raise young children, another  was looking to rebalance time between home and work, a financial statement specialist wanted to move across the country to spend time with grandchildren. All wanted to stay with Baker Tilly and telecommuting was the answer. With today’s technology as well as office space considerations, remote workers can still do their jobs well and stay connected. Wiernicki says it’s a win-win for everyone.

Ensure Employees Know What You Expect

While working remotely may offer employees a more accomodating environment from which to work (hopefully their home office), Wiernicki observes that the telecommuter – not the firm – must take responsibility for their career and stay proactive. “The responsibility is on the person working remotely – they have to make sure they remain connected and stay involved. It’s up to them to not be invisible.” She adds, “Someone once told me the bar for promotion doesn’t change. You still have to fulfill all the skillsets to be promoted.” 

Finding the Right Employees for Virtual Work

There are a few tricks to finding the best fit for your virtual team:

• Choose employees who consider remote working their career, not just a job
• Look for attributes such as self-motivation, taking pride in their work, and making time to interact face-to-face, either by computer or by coming into the office, even when inconvenient.
• For new hires, consider a short-term testing period before hiring them full-time.

If you or your firm are considering making the leap to become a virtual firm or expand your flexible work arrangements, these tips can give you a jump start. Whether you’ve supervised a remote workforce for years, or you want to learn how to start, you’ll find a wealth of resources – including a guide, tips and best practices – in the AICPA Private Companies Practice Section Flexibility Toolkit.

Communications Team, Association of International Certified Professional Accountants 

Remote workers courtesy of Shutterstock

     

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There’s no doubt that starting a new role, whether in the same company or a new one, can be stressful. Between learning the culture of the organization and remembering all the new names, your first few weeks can be overwhelming. Half the battle is learning the inner workings of your new teammates – so how do you manage this?

To find out how CPAs deal with this life change, we put out a call for responses on AICPA social media channels; here’s the advice we heard.

David Pope, CPA, CGMA

“Learn the personalities and the culture of the team. Watch for cues about the motivational drivers for each member and develop an understanding of what you can expect from each. This will help you to integrate quickly and to know when to push and when to back away.”

Robin M. Rudisill, CPA

“Be open to – or ask for – criticism and correction. Each organization has their own unique quirks and personalities. The only way to learn that is by allowing the team members to correct you when projects are done incorrectly.”

Mark Sisk, CPA

“Be humble. That one virtue will engender trust in the group and broaden your perspective through the eyes of others. Genuinely putting the needs of others ahead of your own interests (altruistic egoism) exudes confidence and acts as lubricant to helping teams run smoothly.”

Cynthia Bolt, CPA

“Be open to sitting back and listening for the first few meetings. Ask questions for clarification. Take lots of notes and see if you can gain insight on the team’s prior initiatives.”

Bernard Cookson, CPA

“Introduce yourself to the team and to the team members individually. Trust is built on relationships and team members must trust that their fellow participants can contribute to the team effort.”

Brandon Gallite, CPA

“Discover each person’s biases: Whether it is trust, open mindedness, quantitative prowess, written or verbal communication skills, everyone is different. Recognizing each person’s biases can enable a group of people to become the synergistic thing we call a “team.”

What would you include in your to-do list when joining a new team?

Liz Rock, Associate Manager–Enterprise Social Media, Association of International Certified Professional Accountants

Handshake courtesy of Shutterstock.

     

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Wrapping your head around the accounting standards changes on the horizon is no easy task—let alone figuring out which ones deserve the most attention. To help with this, I have highlighted five Financial Accounting Standards Board (FASB) Accounting Standards Updates (ASUs) that not-for-profit accounting professionals should consider prioritizing this year. The following updates have fast-approaching effective dates, so it is important to familiarize yourself with these standards now.

Going Concern Requirements

For the first time in history, U.S. GAAP addresses management’s responsibility to evaluate and disclose whether there is substantial doubt about an entity’s ability to continue as a going concern. This change is significant because it shifts primary responsibility for the entity’s going concern assessments from auditor to management. Auditors should also be aware that FASB’s issuance of ASU No. 2014-15 prompted a change in the related auditing standards. The AICPA Auditing Standards Board (ASB) issued its going concern standard (SAS No. 132) in February 2017. SAS No. 132 has key changes that auditors will want to pay close attention to, including the required timeframe for considering going concern issues.

Consolidation Requirements for Not-for-Profits

The consolidation standard that FASB issued in 2015 (ASU No. 2015-02), targeted the concerns of asset management companies but ended up affecting all entities that use limited partnerships. Subsequently, FASB staff received feedback that the new consolidation guidance was unclear as to when a not-for-profit that is a general partner in a limited partnership (or similar entity) should consolidate a for-profit limited partnership. To address this issue for not-for-profits, FASB reinstated the old consolidation guidance by issuing ASU No. 2017-02 in January 2017. Not-for-profits that already adopted ASU No. 2015-02 will have to apply ASU No. 2017-02 retrospectively, back to the initial year of ASU No. 2015-02 adoption, essentially “undoing” the amendments of ASU No. 2015-02.

Simplifying the Presentation of Debt Issuance Costs

FASB’s new standard on simplifying the presentation of debt issuance cost (ASU No. 2015-03) addresses the unnecessary complexity of having different balance sheet presentation requirements for debt issuance costs and debt discounts and premiums. Additionally, FASB addressed the conflict in recognizing debt issuance costs as deferred charges (assets) with the guidance in FASB Concepts Statements No. 6, Elements of Financial Statements, which states that debt issuance costs are (1) like debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate, and (2) cannot be an asset because they provide no future economic benefit.

Fair Value Disclosures When Net Asset Value per Share is Used

FASB has revised the disclosure requirements when net asset value per share is used to measure fair value. ASU No. 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. This change ensures consistency in the approach used to categorize investments within the fair value hierarchy, since investments measured using the practical expedient were categorized using different criteria than those using other fair value measurements. AICPA Not-for-Profit Section members can access a relevant white paper that addresses the challenges of fair value measurement when no market exists for certain not-for-profit assets and liabilities.

Inventory Measurement

FASB’s Simplifying the Measurement of Inventory standard (ASU No. 2015-11) makes the guidance for subsequent measurement of inventory more straightforward and better aligns the inventory measurement guidance under U.S. GAAP with the guidance under IFRS. Under this ASU, inventory should be measured at the lower of cost or net realizable value—the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU No. 2015-11 does not cover inventory measured using the last-in, first-out (LIFO) or retail inventory methods.

You may be interested in the AICPA Not-for-Profit Section’s upcoming webcast, Accounting Standards Updates on the Horizon: What You Need to Know, which will cover these ASUs, and others, in more depth on April 25 from 1-3 pm ET.

 Christopher Cole, Associate Director- Product Management and Development. Association of International Certified Professional Accountants. 

 

 

Office setting image courtesy of Shutterstock

     

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Part I

By now you’ve probably seen the viral video that made Marion Kelly, 4, the poster girl for working from home gone (adorably) awry. A boisterous Kelly gleefully bounced into her father’s home office in South Korea while he was being interviewed by BBC on live television. A secondary star of the interview? Her little brother James who rolled into the frame in his walker, quickly followed by their flustered, horrified mother who scooped them up and retreated.

Over the past decade, flexible work arrangements have become increasingly common. Employees are no longer expected in the office Monday through Friday without question. The prevalence of widely accessible Wi-Fi, video conferencing, and web-based work-sharing tools make working remotely relatively painless. But if you ask anyone who has worked from home with some degree of regularity, they will each have their own Marion Kelly story for you—an interrupting child, a home repair disaster, Wi-Fi disruptions. Life happens.

To make working from home as seamless as possible, there are steps you can take to optimize your remote work set up.

Map Out a Dedicated Work Space

If you have a home office, great. Use it. If you don’t have a home office, it might be tempting to plop down on your couch and work from there. Think again. Set yourself up in a more structured environment, like a dining or kitchen table. Equip yourself with all of the tools necessary to do your job—notepads, pens, good lighting, phone, chargers—so you don’t have to go looking for things every few minutes. If you work from home with some regularity, consider keeping your “mobile office” in a tote bag so you can set up your workspace quickly and efficiently.

Save Your Jammies for Bedtime

Many people fantasize about working in their pajamas, but experts recommend getting showered and dressed for work, even if going to work involves going from one room in your house to another. Doing so adds structure to your day and you’ll be prepared if you need to jump on an unexpected video conference.

Keep Regular Work Hours and Take Breaks

Often people who work from home say they are always working. Be sure you keep regular hours and “leave” work when the day is done. Additionally, be sure you take breaks throughout the work day. For those who work in a traditional office setting, breaks happen naturally when they get up from their desks to get food or drinks, ask a colleague a question, or stop and chat on their way to the restroom. Breaks help you reenergize and refocus you when you return.

Pick up the Phone (or Skype)

While most business can be conducted via email, there is something about face-to-face interactions (or at least having a conversation) that humanizes work. It can help to alleviate tensions, resolve misunderstandings and cut down on back and forth emails. And sometimes it’s just plain old nice to see or hear your colleagues.

Lock the Door

This may literally mean locking the door to your office when you have an important deadline, video call or meeting to keep people from interrupting you. For others it may mean making sure children, pets, and others are out of the house when these calls may happen. If you are a parent of small children and you work from home, you may consider sending your kids to daycare or out to a park or playground with a nanny or babysitter for a few hours during the day. If kids are older, make sure you explain to them that while you are physically in the house, you are at work and they have to abide by certain rules.

Even if you follow all of these suggestions, there are days when you’ll be faced with unexpected obstacles. A few days after Marion Kelly became an unwitting star during her dad’s BBC interview, my husband and I found ourselves working from home during a snowstorm. Daycare was closed and we had our two-and-a-half year old son and 3-month-old daughter at home with us. And guess who crashed my video meeting? An excitable little boy who thought his mom’s coworkers were a new audience solely for his antics.

Lauren J. Sternberg, Communications Manager, Association of International Certified Professional Accountants

Working from home courtesy of Shutterstock.

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What’s on the horizon? How are changes in the business marketplace creating new opportunities for the accounting profession? What are the implications of up-and-coming technologies like blockchain?  These, among a host of other emerging trends were discussed recently at the AICPA’s Assurance Services Executive Committee (ASEC) meeting. The committee, composed of the profession’s leaders in assurance and advisory services, engaged in an insightful discussion about issues that are gaining traction internationally and in the United States.

In addition to discussing ideas for potential future projects, the committee also spoke about the projects they have currently underway that facilitate new opportunities for practitioners to provide value-added services to clients. These include five emerging service opportunities:

1. Assuring sustainability information. Interest in sustainability has been on the rise around the world. In the United States, sustainability reporting by S&P 500 companies has increased from just 20% of the companies reporting in 2011 to more than 80% today. This provides an opportunity for CPAs to provide trusted third-party assurance on a client’s sustainability information, ranging from a sustainability report taken as a whole or a Greenhouse Gas Statement, to select environmental or social indicators that are most significant to the organization. The AICPA’s Auditing Standards Board Sustainability Task Force, together with the ASEC Sustainability Assurance and Advisory Task Force, is in the final stages of producing a guide that will assist practitioners when performing attestation engagements on sustainability information. The guide is expected to be released early this summer.
2. Performing innovative data analytical procedures. Understanding how new and emerging technologies can be used throughout the audit process is an important step in advancing the profession. A joint ASEC and Auditing Standards Board Audit Data Analytics Task Force is currently developing a new guide that will cover the use of audit data analytics at a foundational level, and will describe how these techniques can be integrated into the audit process to improve effectiveness and bring additional insights.
3. Providing attestation on cybersecurity. Security breaches are prevalent in today’s business environment, and as a result companies are developing cybersecurity risk management programs to help mitigate threats. The ASEC Cybersecurity Working Group is in the final stages of developing guidance for auditors on how to provide a new engagement to clients that will assess and report on the effectiveness of an entity’s cybersecurity risk management program. This new service will enable CPAs to instill confidence in their client’s efforts to address cybersecurity risks.
4. Advising on cybersecurity readiness. Not all clients are ready for an examination-level attestation engagement on their entity-wide cybersecurity risk management program. Practitioners can use the cybersecurity risk management reporting framework as a tool to assist them in providing cybersecurity advisory services to their clients, including cybersecurity readiness engagements.
5. Reporting on supply chain controls. In the near future, CPAs will be able to provide a new service to their clients who conduct business with manufacturers and distributors. A new ASEC working group will be developing guidance on the performance of attestation engagements on controls, similar to a SOC 2 engagement, to build trust and confidence in a company’s supply chain. This will be a valuable complement to the other system and organization control (SOC) services that CPAs can offer including SOC 1, SOC 2, and SOC for cybersecurity.

These service opportunities will add to the already robust list of offerings that CPAs can provide to their clients. Whether your clients are looking for assurance on their sustainability information, interested in incorporating audit data analytics into their audit process, seeking advice on preparing for an attestation engagement on their cybersecurity risk management program, or wanting to build trust in their supply chain— you will soon have access to resources that will help you better serve your clients. ASEC will continue exploring and addressing emerging market needs and demand for assurance and advisory services in an effort to keep our members and their services in line with today’s rapidly evolving business environment.  

Amy Pawlicki, Director- Business Reporting, Assurance and Advisory Services, Association of International Certified Professional Accountants.

Supply chain image courtesy of Shutterstock.

     

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Innovation and Accounting may sound like an odd pairing. But they don’t have to be!

Innovation is often used to describe the act of doing something new, creative and risky. This definition – especially the part about risk – may not align with traditional accounting ideals. But consider this, if you are not the disruptor, you will likely get disrupted. Innovation may seem risky, but ignoring it could prove fatal.  Given the magnitude and speed of change throughout the world, innovation is a necessity for your career, your clients and the profession. Done well, embracing innovation can help reduce risk as you cast a keen eye on what lies ahead rather than hold on to the past. Let’s explore three simple steps (plus a bonus step) to get started with innovation.

Step 1 – Look Around

Notice and observe some of the macro-level trends and changes affecting you, your firm and/or your clients. For example, mobile computing is growing faster than desktop computing; the sharing economy, which includes Uber and Lyft, is rapidly growing; and demographic shifts are underway as Millennials[1] make up an increased percentage of the workforce.

Identifying and assessing the effects of these trends and others on your clients or business can help you better understand where the future lies. The renowned hockey player Wayne Gretzky is attributed as saying, “I skate to where the puck is going to be, not to where it has been.” Heeding this advice in business may help you find the best opportunities.

Step 2 – Focus

Effective innovations are focused and strategically important for your stakeholders. They hone in on specific problems or opportunities related to a specific audience. Innovations that do not solve a problem or address a customer need often fail because of lack of relevance. Innovations that try to be everything to everyone often fail due to lack of specificity.

Consider where your business is going, its mission, its vision and its strategic priorities. What problems do your customers have? What jobs do they need to get done? What are the growth priorities of your business? What does your business want to be known for? Focus your innovation efforts on these answers.

Step 3 – Experiment

The crux of innovation is to create value.  For your client, your firm, society, yourself. Value may be in the form of saving time, saving money, increasing revenue, increasing customer satisfaction, making a specific task easier or less repetitive, etc. Coming up with new ideas by itself does not create value. Value is created when ideas are implemented and a problem is solved.

Breaking through the fear of failure to implement new ideas can be difficult, even for seasoned professionals. So rather than trying to implement an idea all at once, consider doing short, quick, inexpensive experiments. This allows you to fail early, learn, and then conduct the next experiment with the newfound knowledge. This build-measure-learn cycle is how many Google products were built. For example, the first version of Gmail was built in just one day and has been continuously improved upon ever since.

BONUS Step – Share with the Profession

People learn from each other. As someone working in the accounting profession, with an interest in innovation, you have a unique perspective on the future of accounting. The profession needs to hear from you!

Harkening back to the macro level trends, we see several big challenges facing all of us, including hiring and retaining top talent, adoption of blockchain and artificial intelligence, transformation of the finance roles, keeping up with increasing regulatory complexity and adapting to major demographic shifts.  What are your thoughts on how the profession should proactively address these?

The AICPA Innovation Team is looking for up to five accounting professionals to speak at AICPA ENGAGE about a topic of their choice relating to the future of accounting.  Are you a visionary?  Do you have bold, inspiring, thought provoking and actionable ideas about the future of the profession?  Check out IdeaAcct for details and to enter your name for consideration as a speaker. The conference is scheduled for June 12-15 in Las Vegas.

Mark S. Brooks, Senior Manager-Innovation, Association of International Certified Professional Accountants

Emma Sadowski, Analyst-Innovation, Association of International Certified Professional Accountants

 

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The Q2, Q3, and Q4 2017 score release dates are posted to the Score Release Timeline page of the AICPA’s CPA Exam page. Candidates should pay special attention to the tables below as scores will only be released once following the close of each testing window. The score holds were previously announced in December 2016. For complete information regarding Exam scoring, please visit the Examination Scoring and Scoring FAQ pages.

The National Association of State Boards of Accountancy will release scores to candidates and state boards of accountancy based upon the target score release dates listed in the tables below.

The score holds for Q2, Q3, and Q4 2017 are necessary to allow sufficient time for the Board of Examiners to conduct a standard setting process associated with the launch of the next version Exam on April 1. Once this process is complete, scores will be released within the noted timeframes.

Anytime an exam undergoes significant change, candidate performance must be statistically validated and a new passing score set so that the assessment remains legally defensible. This is common practice with any high-stakes testing.

*The AICPA, NASBA, and state boards are aware that some candidates testing in the Q2 2017 launch window may be impacted by the 10-week score reporting hold. In June and July, NASBA will notify state boards of all candidates testing in Q2 2017 with existing conditional credit who will be impacted by the score hold. The state boards will consider extending a candidate’s conditional credit. Extensions of credit are handled on an individual case-by-case basis. Candidates do not need to contact their state boards. State boards will notify candidates if an extension is granted.

 

     

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