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CPA Brand Research: The Good, the Challenge and the Opportunity

Post author By FFC
Post date May 10, 2016

CPA Brand Research: The Good, the Challenge and the Opportunity

When most people think about a strong brand, Disney or Apple come to mind. But when we at the AICPA think of a strong brand, we think of the CPA. And we are pleased again to report that independent research confirms that CPA stands stronger than ever.

We are always pleased to hear from business decision-makers and investors that CPAs remain the most highly regarded and trusted business professionals, and we look forward to sharing that news with you.

The 2015 independent research commissioned by the AICPA again reveals a long list of affirming statistics about the value that the CPA brings to clients and the value the CPA credential offers the profession. The study also provides insight into global forces at play that both challenge the profession and point to areas of opportunity.

First, the good news: CPAs continue to inspire confidence across our key constituencies. Results of our focus groups, in-depth interviews and four nationally distributed online surveys, conducted by Applied Research & Consulting, show:

Both business decision-makers and investors rank the CPA first among financial and business professionals, and second only to physicians among all professionals. Investor rankings increased by 12 percent over the 2013 study results.

Business decision-makers’ satisfaction (very satisfied and somewhat satisfied) ranks very high among both internal (93 percent) and external CPAs (90 percent). Investors who work with CPAs are 97 percent satisfied (very satisfied and somewhat satisfied) with their performance.

Investors and business decision-makers are more confident in a job done by a CPA – 79 percent and 84 percent respectively – than if it were done by an accountant who is not a CPA. The rating by business decision-makers increased by 9 percent from the 2013 study.

Business decision-makers and investors continue to rate integrity and competency as the top two CPA attributes.

Sixty-eight percent of business decision-makers agree that becoming certified as a CPA requires more rigorous training and testing than any other financial credential.

Eighty-eight percent of business decision-makers value the CPA credential (very/somewhat valuable) within their organizations.

CPAs find compensation value in their credential, saying they feel they are paid more than accountants who are not CPAs.

As for areas of opportunity, clients continue to acknowledge the CPA’s lead in the core areas of tax, accounting and audit, while both clients and CPAs alike acknowledge a growing demand for specializations within the profession and growing competition for those services outside of it.

The research points to opportunities for CPAs to broaden their scope and embrace areas of specialization that enhance the core services typically offered by CPAs. These include such areas as strategic planning, performance management, risk management, sustainability assurance and business integration systems – areas that could benefit from the added knowledge and expertise a CPA can bring to those services.

While professionals from outside the profession – management consultants, information technology consultants, lawyers and other professionals – are usually associated with these specialized services, CPAs, the research shows, can step in to provide them.

Meanwhile, the increasingly global nature of the accounting profession is shifting demand for professionals in the United States. Thirty-three percent of business decision-makers say they work with or use the services of designated accountants trained in other countries, up from 23 percent four years ago.

This presents a key opportunity for the profession to continue to define, evolve and modernize its core services in a range of areas. Doing so can increase our relevancy for today and for the future. Among them are attestation around compliance with laws and regulations; assurance on sustainability reports; and assurance on information security and privacy, including cybersecurity.

The 2015 brand research once again offers a resounding affirmation of the CPA, the strength of the CPA brand and the value of the many initiatives undertaken by the AICPA that protect and promote the profession – from the pipeline, #CPAPOWERED and enhancing audit quality to the future of practice monitoring and future of learning.

These findings also provide a solid foundation on which we, as a Communications Team, can work to further strengthen the brand and that you in the profession can build upon to increase your value to clients and your organization, and extend your reach and impact.

Cheryl Reynolds, Vice President, Communications, Advertising and Brand Management, American Institute of CPAs

Your Client’s Tax Return is a Gold Mine for Planning Opportunities

Post author By FFC
Post date May 9, 2016

Your Client’s Tax Return is a Gold Mine for Planning Opportunities

Now that we’re past the April tax filing deadline, looking ahead to helping clients survive the upcoming 2016 tax year may very well be the last thing on your mind. Nonetheless, proactive CPA financial planners and tax professionals know that Form 1040 is a virtual gold mine with many nuggets of information to offer. The individual income tax return will not only yield opportunities to lower your clients’ tax liability and help them plan for their retirement, but is also beneficial for your practice.

You can expand your scope of services by adopting a more holistic financial planning approach. Portfolio managers, estate attorneys and insurance professionals focus on their specialized fields. However, a client’s CPA is likely the only professional on the team who is going to take the time to analyze the 1040. This is nothing short of “having the window into everything going on in a client’s life”. For the practicing CPA financial adviser, it provides a natural springboard into deeper client conversations and provides opportunities to discuss new service offerings.

Here are a few places to start digging:

Deferral Opportunities

Finding ways to leverage assets is a key component of any retirement plan. Identify deferral opportunities by looking at all income sources on the 1040. Four recommended steps to take include:

Discussing the benefits of saving through various plans, including 401(k), 457, 403(b), a Simplified Employee Pension (SEP) or an IRA (including a Roth).

Reviewing the benefits of maximizing contributions and deferrals, as well as the tax‐deferred time value of money.

Considering exercising stock options on an annual basis and going over the benefits of 83(b) elections, if applicable.

Preparing retirement planning cash flow analyses to determine if current deferral and savings will suffice based on the client’s time horizon.

Gifting Strategies

Dependents and filing statuses offer a view into gifting strategies to minimize a taxable estate. In addition to annual exclusion gifting, you can explore education planning (including Section 529 plans) and gift exclusions. Another possibility is to make tuition payments directly to an institution. You may also recommend medical expense planning to your clients, such as gift exclusion for payments made directly to a medical service provider.

Multiyear and Multigenerational Planning Opportunities

If your clients are like mine, they want to ensure they are leaving sufficient funds for their retirement, as well as enough money after they pass for their spouse, children and grandchildren. You should look for multiyear planning opportunities, especially in light of the American Taxpayer Relief Act of 2012 and the 3.8% net investment income tax.

In the 1040, take a look at retirement plans and distributions to discuss Roth IRA conversions, and don’t overlook new adjusted gross income thresholds that could be surpassed with income from a conversion in one year. Run projections on a multiyear basis and present cash flow analyses on converted amounts. In addition, discuss future income and deduction items within the client’s control that may be able to be timed to result in a lower long‐term tax liability.

Keep Clients for Life

There are enormous benefits in helping your clients plan for their future. You’ll receive work that is commensurate with your knowledge, expand your services and develop more referral sources with other professionals. More than anything else, you’ll keep clients for life.

For more information, download the AICPA’s PFP Section’s “Analysis of a Tax Return for Personal Financial Planning.” Developed by Lyle Benson, CPA/PFS, this checklist that offers a comprehensive review of the 1040.

Want more tips and guidance? Robert Keebler, CPA and I will present a webcast, “Proactive Planning: Opportunities from Your Client’s Form 1040” on May 17 from 11 am – 12:45 pm, EDT. In addition to a discussion on how to use your practice to develop personal financial planning ideas for your clients, Robert and I will lead you section-by-section through the tax return and provide guidance on the application of key strategies and the best time throughout the year to implement them. PFP Section members receive a registration discount. Register today.

Brooke Salvini, CPA/PFP, Principal, Salvini Financial Planning. Brooke’s firm, Salvini Financial Planning, is a fee-only Register Investment Advisory Firm in Avila Beach, California. She specializes in comprehensive financial planning with the goal of helping her clients make better financial decisions in all areas of their lives. Brooke serves on the CalCPA State Committee for Personal Financial Planning, the CalCPA Foundation Investment Committee, and as a Trustee of her local Avila Beach Community Foundation.

Gold mine image courtesy of Shutterstock

When it comes to Financial Literacy, Small Steps Add Up Quick

Post author By FFC
Post date May 5, 2016

When it comes to Financial Literacy, Small Steps Add Up Quick

When I was just starting out my career, I was in the same boat financially as a lot of recent college graduates. My primary focus was making ends meet. For me, this meant making decisions about how much I could afford for rent and managing my day-to-day expenses so that bills got paid on time.

In the back of my mind, I understood that my student loans and a few thousand dollars in high interest credit card debt also needed to be addressed, and that paying the monthly minimum was a bad look. In those days saving for retirement and building up a nest egg was a nice, if seemingly unattainable idea, like summering in the South of France or playing professional baseball. Surely there are people who do these things, but I had no idea how they made it happen.

When I started at the AICPA, I became aware of our financial literacy initiatives early on. I never considered myself to be bad with money, and I always understand the central role it would play in many of my life’s goals. But when listening to our volunteer members give common sense advice, it struck me just how little time I spent actually thinking about the impact of the financial decisions I was making.

Looking back at that time in my life, a number of small steps I took help lay the groundwork for getting me started on the right path. I absorbed a lot of really good advice from reading the 360 Degrees of Financial Literacy and Feed the Pig sites. One of the biggest things preventing me from saving money and keeping me in the rut of living paycheck to paycheck was that I thought the notion of “small changes adding up” was a cliché. Now, I realize I told myself that because making changes seems daunting and routines are easy.

Without knowing where your money is going, you’re flying blind when it comes to your finances. I started my personal financial literacy journey by writing down everything I spent for a three month period and looked at where the money was going. I quickly realized that when I would say “I have no money,” what I really meant was “I’m squandering my money on things I don’t prioritize.”

The first change I made was cut down on the amount of cabs I took and limit the meals I ate outside of the house during the week. By doing that – which wasn’t nearly as difficult as I thought it would be – I immediately started saving almost $100 a week. This allowed me to pay down my high interest credit card debt much faster. From that point on, I have never paid interest on a credit card. In addition to all the money I’ve saved through the years, it has done wonders for my credit score.

In addition, I was wasting money on my cable bill. I had one of those packages with a nice introductory rate, which had turned into a substantially worse deal after a year while I passively allowed the auto-payments to continue. In fact, I was actually paying $20 a month for a home phone line and I didn’t even own a phone! A quick call to the cable company (from my cell phone) wound up saving me nearly $400 a year by cancelling the phone and various cable channels I never watched.

There were other simple, effective rules I made for myself as I became encouraged by the progress I was making. I realized I was paying almost $20 a month in ATM fees because my bank had so few branches. I found a bank with a branch near my home and my job, and from that point on, it became an extremely rare occurrence for me to pay an ATM fee.

I also signed up for the rewards programs for my preferred hotel chain and airline, and switched my credit card to one that helped me accrue points faster. It took a while, but those points slowly added up and saved me money on many vacations with the free hotel rooms and flights. Even if you only travel on occasion, many programs have points that never expire. It’s easy and simple to sign up.

These things only required a minor sacrifice on my part, and knowing the money I saved was adding up made me feel happier and more secure than I could have imagined. Once my student loan was more manageable, I began putting money in my 401(k) and increasing the rate at regular intervals. I also established a savings account and told myself that once a dollar went in, it would never come out. I’ve had a number of financial missteps over the years, but I’ve remained focused on the small decisions I make in my day-to-day life. I know first-hand that those decisions do add up. And I encourage everyone who feels like it’s impossible to make changes in their financial life to start with one or two small steps.

Financial literacy is a great passion of the CPA profession. Thousands of AICPA and state society CPA volunteers across the country are helping Americans take those first few steps to make better financial decisions. Working to support these efforts through the AICPA’s media outreach to help raise awareness of the importance of these issues has been an honor, and I’ve learned a great deal in the process.

James Schiavone, Senior Manager – Public Relations, American Institute of CPAs

Are You Required to be Cyber Compliant?

Post author By FFC
Post date May 5, 2016

Are You Required to be Cyber Compliant?

The interconnected digital world has been referred to as the wild, wild West. Hackers are eagerly looking to exploit the weakest line of code in mobile devices, applications and operating systems. And those are just a few of the types of technology at risk in today’s environment.

This document provides best practices and indicates that organizations connected to the Web should evaluate cybersecurity readiness by preparing prior to, in response to and for recovery from an intrusion.

What does proper preparation entail?

Adopting internal risk management policies and procedures;

Procuring the necessary hardware and software technology;

Engaging experts to evaluate, test, support and monitor the condition of the environment; and

Developing and testing a rapid response plan to address an intrusion.

In the world of cybersecurity, a prepared and tested incident response plan can operate as an excellent defensive weapon.

The first step in your internal risk assessment should be to identify what the DOJ refers to as the “crown jewels.” This includes mission-critical needs like sustaining operations and accessing certain intellectual and personally identifiable information stored or processed.

The assumption conveyed within the DOJ document is that businesses will proactively address the risk of a cyber-intrusion. Organizations that do not take reasonable steps to prepare for, respond to, and provide evidence of recovery monitoring after a breach put their legal standard of care and data privacy at risk for litigation.

The DOJ’s best practices for cyber incident and response are further testimony that organizations that ignore responsibility for the safety of their information are likely exposed to significant liability for failing to meet basic cybersecurity best practices. After all, these best practices provide valuable guidance that should be taken seriously by any business.

Want to learn more about cybersecurity fundamentals? The AICPA’s Cybersecurity Webcast Series with Ridge Global provides an analysis of today’s cybersecurity threats, the techniques used to protect against threats, techniques for detecting when attacks happen, and effective response strategies. The first webcast broadcasts May 12 at 2:00 P.M. In addition, you can find more cybersecurity news and information on the AICPA’s Cybersecurity Resources Center.

Susan Pierce, CPA, CITP, CGMA, Associate Director – IMTA, American Institute of CPAs. Susan drives the strategic mission of providing value to the IMTA professional, the CITP credential holder and the technology engaged CPA.

Bruce Sussman, CPA, CISA, CIPT, CISSP, is PCI Global Executive for AIG in New York. He is co-chair of the AICPA’s Information Management and Technology Assurance Section’s Cybersecurity Task Force.

Cyber compliance courtesy of Shutterstock.

3 Things You May Not Know About Not-for-Profit Board Leadership

Post author By FFC
Post date May 4, 2016

3 Things You May Not Know About Not-for-Profit Board Leadership

It is an honor to serve on a nonprofit board. In fact, financial professionals often serve in a leadership role as treasurers or finance committee chairs within the board itself. Though board leadership is certainly a meaningful way to give back in your community, it is not without its challenges. Finance committee chairs and treasurers assume additional leadership responsibilities that go beyond the responsibilities of board members at-large.

Here are three things you may not know about not-for-profit board leadership:

1. Listening skills are paramount and require constant improvement.

You will be working alongside professionals from other fields, typically those with expertise related to the organization’s mission. For example, if your organization serves homeless youth, you may work with professionals from the social-work field. To lend your expertise to business planning and strategy, you will need to spend time talking with your colleagues who are experts on the subject matter and understand the organization’s theory of change. With different viewpoints the board, as a whole, will make better decisions.

2. Making organizational decisions requires a delicate balance of using your head and your heart.

Not-for-profits have two bottom lines: the financial one (think: operating surplus and cash flow) and the mission one (think: lives saved). Financial professionals tend to be risk-averse and heavily fixated on financial sustainability to the point where they may lose sight of the organization’s mission in the community. For example, a colleague of mine was legitimately concerned about an unbudgeted drop in revenues and argued adamantly for the board to pass a revised budget mid-year in order to decrease spending. This was during the Great Recession, which was a time when this organization’s services in low-income communities was greatly needed. In the end, the board did not take the axe to the program budget; rather, it took a calculated risk to borrow from operating reserves and sustain program service levels. It also increased fundraising efforts and focused on backing up appeals for donations with performance metrics that demonstrated how effective and vital the program was for citizens in their community. This was a risky move, but alas, after several months, the organization attracted support from a major foundation that awarded a grant to keep the program afloat.

3. The amount of time spent preparing presentations is more than most would imagine.

As a committee chair or treasurer, you will be expected to give reports to the board and facilitate deliberations. It will take you much longer to prepare your reports than you might expect. Here’s why: If your career is in the corporate world, you are probably accustomed to audiences that have an understanding of financial statements. It takes a lot of time and thought to tease out the most pertinent data and present it to your audience in a way that enables everyone to understand and participate. Without a doubt, you will lose your audience from the start if you use business jargon and rattle off numbers without providing proper context. Keep in mind that some of your board colleagues may not have a business background. Early in my first board experience, I often presented superfluous information and spent far too much time going over every nook and cranny of our organization’s budget. My reports would often be met with blank stares. Fortunately, our board chair pulled me aside and gave me some advice that really stuck with me: “Be brief. Be brilliant. Be gone.” This was a valuable learning experience for me, and it was the impetus for a new resource created by the AICPA Not-for-Profit Section team on how to give a brilliant board report.

The AICPA’s Not-for-Profit Section is a community that supports not-for-profit professionals and business advisors. You can find a number of board governance resources here. Also, the Section is hosting a webcast “Optimizing Your Budgeting Process” taking place on June 15 at 1–3pm ET. The CPE-eligible webcast is available to anyone with an interest in the financial management of NFPs, and it is free for Not-for-Profit Section members. Register here.

Sandi Matthews, CPA, CGMA, Technical Manager, Not-for-Profit Section, American Institute of CPAs. She previously worked at North Carolina Community Foundation and has served on two boards.

The Benefits of Globetrotting as a Way of Life

Post author By FFC
Post date May 3, 2016

The Benefits of Globetrotting as a Way of Life

Japan, China, Turkey, Italy and the Czech Republic are just five of the 23 countries I’ve visited during my ten years as a CPA in the forensic services arena. In a world that has become increasingly connected, more and more CPAs will find themselves working with clients whose interests and connections lie in one or more countries around the world. Although I’m based in PwC’s Forensic Services practice in Washington, D.C., globetrotting has become a way of life for me.

I believe that international business experience can be a significant enhancement to a CPA’s skill base—and my travel has been personally enjoyable as well. If you’re interested in discovering new places and broadening your career opportunities, here are some things to keep in mind.

Have your passport ready. When I started with PwC, I was immediately drawn to forensics. After completing some initial assignments in the United States, my Director asked if I had a passport. Since I did (and it was current), he immediately sent me to Dublin to work on a contract compliance engagement. Beginning with that first trip, I learned quickly that by being on the scene, I could establish a personal relationship outside of work with the U.S. or international staff.

Embrace the culture and experiences of the country you are visiting. I often get asked if I have any personal time on my business trips, and the answer is yes! I have many fond memories of my travels and experiences. When I was in Korea one Thanksgiving, a local colleague I had worked with for two years apologized for not being able to serve me a turkey dinner. Instead, he invited me to Korean barbecue at his home, which was a welcome alternative. I was introduced to mulled wine and other Christmas customs when I spent one Christmas in the Czech Republic, and I was able to visit the Amalfi coast of Italy on my post-Christmas break. My first taste of Indian food, in Mumbai, was a revelation. I liked it so much I now often cook Indian cuisine back home in D.C.

Although my travel itineraries are often jam-packed and leave little time for personal fun, I always make an effort to try and incorporate a cultural activity into my agenda. It’s part of the experience of working abroad, after all.

Bet on the future of international business. In the 10 years since I started working at PwC, the importance of global acumen has increased significantly. Smaller companies are already conducting business around the world, or want to get started. I believe that international business expertise will become a base skill, no matter what area of practice a professional may be in or even if they never leave the United States. CPAs increasingly will need to understand issues and various risks in international business.

Speak up. If you’re seeking to work internationally, make sure your support networks know. Tell recruiters, your boss, your colleagues and anyone else in your network about your interest in working overseas. This will help increase your chances of an opportunity coming your way. When I started out, I actually spent a lot of my time doing administrative work for our team in the D.C. office, which helped me to get my foot in the door and my name on the list for travel assignments.

My experience working abroad broadened my skill set and increased my ability to adapt in situations. How will travel and work abroad fuel your career? The only way to find out is to jump in and try it. I guarantee it will offer you a new perspective on your professional life and on the world around you.

Marc Filer, Manager, PwC. Marc has approximately 10 years of public accounting experience. His practice focuses on anti-corruption/FCPA matters, including internal investigations, compliance program assessments, and due diligence. Marc has worked on anti-corruption/FCPA matters in over 25 countries and has experience in pharmaceutical/medical products, manufacturing, industrial products, retail and consumer, hospitality, and the oil and gas industry.

Passport image courtesy of Shutterstock.

The CGMA Program: Adding the Right Tools to Your Career Basket

Post author By FFC
Post date May 2, 2016

The CGMA Program: Adding the Right Tools to Your Career Basket

Lucky for me, my career has taken me through several different jobs in manufacturing, and one thing I’ve noticed across the board is that companies are increasingly looking for more diverse skillsets in their management accountants. For CPAs to meet the demand, we have to take a critical look at our own professional development to make sure we foster key talents like strategic thinking, communications, leadership and business partnering. A manager once told me that you have a “career basket,” and you need to fill the basket with the skills that will get you ahead. It’s not always easy to find the resources to develop and hone these skills, but it’s very necessary to getting—and staying—ahead.

The journey, not just the destination

I first learned about the CGMA Program through my state society—shout out to the South Carolina Association! After reading about the courses and all the resources it included—on topics like business partnering, leadership, management, communications and strategy—I knew it was the right next step to help me grow in my career.

It wasn’t a difficult realization to come to. The AICPA and The Chartered Institute of Management Accountants (CIMA) have done extensive research with employers worldwide to find out exactly what skills they look for in their finance folks, and developed the program based on that knowledge. The learning is completely relevant to anyone who is looking to develop or advance their skills as a management accountant.

As an AICPA member, I was already eligible to sit for the CGMA exam—a three-hour, comprehensive case study that tests both theoretical and practical knowledge in a real-world scenario—to obtain the designation.

As crazy as it may sound, I enjoyed studying for the exam. The CGMA Program is self-paced, so I was able to study around my work and personal schedule. And the content was really interesting. The case study I sat for was based on a company in the oil industry, which is totally different than consumer products (the industry I work in). So, I had the opportunity to learn a bit about a new industry, do research and look at their competitors. It was almost like playing a game, with the added benefit that it got me thinking outside the box and coming up with strategies I could apply to my own company.

Going through the program and earning my CGMA designation really provided me with the edge and the confidence I needed to expand my reach and tell the world: Not only do I have technical, people, leadership and business skills, but I can apply them. I was even able to apply my new knowledge in real time to help both my company and my career.

The right skills in your career basket

When I first brought up the CGMA Program with my boss, he was excited because he saw it as an opportunity for me to develop the skills needed to best help the company. Specifically, he was interested in how the program would help me enhance my big-picture view of the organization and how all the different functions successfully work together. Having his support enhanced the whole experience for me, and once I passed the exam and attained the designation, my boss was even more excited by how confidently I was now acting as a business partner, helping define where the business is going and assertively leading my teams, both within finance and cross-functionally.

Here’s the bottom line: Any company that hires a financial professional with the CGMA designation can be confident that they’re hiring someone who is able to guide better business decisions. And, as an individual, once you start the CGMA Program, you’ll have the confidence that you have what companies are looking for. The program truly helps you prove to yourself that you have what it takes to be successful, to be a competitive management accountant. And you’ll know without a shadow of a doubt that the things you are placing in your career basket are helping you achieve your goals. Thanks to my CGMA experience, my basket is overflowing.

Jessica Glenney, CPA, CGMA, is the Accounting Manager at ELAC in Chapin, SC. Hear more about her journey to the CGMA designation in this video interview.

Interested in learning how to expand your ‘career basket?’ Visit cgma.org/program.

Prince’s $250 Million Mistake

Post author By FFC
Post date April 29, 2016

Prince’s 0 Million Mistake

With songs like “Purple Rain” and “Little Red Corvette,” Prince wrote the soundtrack of a generation.

However, his failure to write a will could spell trouble for his $250 million fortune. Last week, people around the world mourned the death of this gifted singer and songwriter, and many were shocked to hear that Prince didn’t have a will or an estate plan in place. Even though he was a notoriously hands-on negotiator who meticulously controlled the intellectual property rights of his song collection, this unfortunate lack of planning has left uncertainty for Prince’s heirs. The future inheritance process could cost tens of millions of dollars in legal fees, and state and federal estate taxes. Surprisingly, he’s not the first famous person who left this world without a plan.

Not yet famous with a quarter billion dollar estate to leave loved ones? It’s still important to draft a will and keep it up-to-date based on changing personal and financial situations. Here are a few tips to make sure you have an effective will:

Seek out a pro: Seek out the assistance of a CPA or an attorney to draft a will and do estate planning. A CPA will be able to help you navigate a simple will and will be best positioned to help with more complicated estate planning. Having a professional prepare your will eliminates any confusion if you have minor children, own significant assets or want to control the management and distribution of your property. Additionally, you will know that all your intentions are clearly communicated and recorded.

Periodically review your documents: Year to year, relationships change, and, as all CPAs know, financial situations change. Regularly update your will to ensure your closest relationships are accurately reflected in the will.

Who will your executor be? Being an executor is a thankless job, but it is an extremely important one with many responsibilities. You’ll want to choose someone who is ready to take on tasks, such as taking care of any debts and distributing your property and money properly.

Make the time: For some people, the idea of taking heed of their finances is so daunting they put it off. However, it is important to make time to do so to ensure that your wealth is distributed how you wish in the event of misfortune. Work with a professional to either write a will or review your financial affairs, making sure your wills and estate plans are up-to-date. Failure to do so could have devastating financial consequences in the event of an unexpected death.

Don’t have a will or estate plan? Does yours need updating? Check out the 360 Degrees of Financial Literacy resources.

Dan Bond, Senior Manager – Communications & Consumer Education; Samantha Delgado, Manager – Communications & Consumer Education

<a href=”https://feeds.feedblitz.com/~/t/0/0/aicpainsights/~Michele Paccione / Shutterstock.com“>Prince courtesy of Michele Paccione/Shutterstock.com

How to Clean Your Data and Make it Look Slick

Post author By FFC
Post date April 28, 2016

How to Clean Your Data and Make it Look Slick

Every day we are inundated with articles, infographics and news reports that quote statistics that we are just supposed to accept at face value. Consider online real estate prices. If you search in your local area, you will find varying figures for median price, price per square foot and return on investment. The volume and variance in data leads to many questions: Who is supplying this information? What types of property does it include? What period does it cover?

As accountants, this unsubstantiated reporting should make us uncomfortable. We are a profession that prides ourselves on transparency and disclosure. When that isn’t forthcoming, our red flags should go up. How can we trust what we are reading when we know nothing about the source and quality of the underlying data? With all the advances in technology, accountants are uniquely positioned to be the champions who set higher standards for reporting. By giving the audience access to the data, we achieve the ultimate transparency. It’s not as hard or expensive as you may think.

I recently challenged myself to create a case study that analyzed real estate sales in my community—Panama City, Fla. Like many other resort areas, our beachfront county experienced wild fluctuations in property prices over the past decade. I was curious about property values, whether they were selling at a gain or loss and if the values used for tax purposes were fair.

I used several software programs to not only gather the data and crunch the numbers but also to provide an innovative way for others to interact with the records. The programs are fairly easy to run. There is a plethora of free web-based written and video tutorials from the software vendors and user groups to help you get started. The fastest way to learn is to jump right in and try it yourself. You can always go back to the tutorials for more in-depth instructions as needed. As the analyst, critical thinking is crucial. Computers are an incredible tool, but only a real person can gather, organize, apply and present the information in a meaningful way.

While my study focused on real estate, you can easily apply the same technology and methods to a wide variety of applications. The possibilities are endless and are not limited to financial data. I have seen examples analyzing the stock market, weather, baseball stats and Beatles songs. Any interesting subject with reliable and accessible data is fair game. This technique allows you to blend left brain logic with right brain artistry.

Here’s an overview of the steps:

GATHER THE DATA

I used WebHarvy, a web scraper/data mining tool, to rapidly copy and paste information from the public records online. It only costs $99 and works best with structured web data. I was impressed with their support. The program lets you choose what fields you want, extracts the data and saves it in an Excel file.

CLEAN, JOIN AND ANALYZE THE DATA

Cleansing the data is a highly important step that cannot be omitted. Outliers, blanks, and formatting errors can skew your results, so you need to address those before running any computations. Computer Assisted Auditing Techniques (CAAT) have revolutionized the process. I use ACL Analytics, which can be purchased on a subscription basis for $1,500 per year and features self-learning resources, as well as paid live training. Similar programs include IDEA and Arbutus. They allow you to classify, stratify and get statistics more easily and quickly than working with a spreadsheet program. They can also hold billions of rows of data whereas spreadsheet programs are typically limited to one million.

MAKE THE DATA VISUALIZATIONS

This is where everything comes to life; the “ta-dah” moment. Seeing the information graphically makes it so much easier to understand. Patterns and abnormalities you may have never noticed will stand out. Data visualization programs allow the audience to filter, drill down and download the data, as well as share graphics online. I used Tableau Public, a free data visualization program that offers free and paid self-learning options. There are many software choices in this arena, some free and others not. It depends if you want to share the information privately or make it available to the public.

PREPARE A WRITTEN PDF REPORT

I wanted a written report so people could print it for offline reading. However, I linked the graphs and tables to the data visualizations so anyone reading online can easily explore further. My choice for desktop publishing is Canva.com, a free online program that has very modern magazine style templates with hardly any learning curve.

As you can see, this process does not have to cost much money. With a little time and effort, you can actually take your reporting to the next level and your audience will get a much richer experience.

Christina Durta, CHFP, CPA, MST, Managing Member of Christina M. Durta, CPA, LLC. The majority of Christina’s career has been spent in internal auditing. Her first job was as an internal auditor for a Fortune 500 company. Her mentor there taught her the fundamental skills and creative mindset needed in that diverse field of accounting. She went on to work as an internal auditor for a hospital system. Today she has her own firm that focuses on using observation, testing and computer assisted audit techniques to help organizations recover or save money, make informed decisions or solve problems. She enjoys working with other accountants and auditors to support and enhance their services.

You can see the entire case study referenced in this blog post at http://nontraditionalcpa.com. There is a PDF report and over 20 interactive data visualizations.

House image courtesy of Shutterstock

Change: As Necessary as it’s Inevitable

Post author By FFC
Post date April 27, 2016

Change: As Necessary as it’s Inevitable

At a state society member event in El Paso, Texas, an older gentleman told me about his daddy that had passed away 53 years ago, and if he were to come back today, he wouldn’t understand very much about the modern world. He wouldn’t understand the phone he had in his pocket, the computer he used every day, or the car he drove. But, he went on to explain, he would understand that times change and we have to let them.

The profound respect this gentleman had for his father continues to resonate with me as does the lesson his father imparted: Change can be scary and intimidating, but it is necessary — and it’s inevitable.

Consider for a moment what happens if we don’t embrace change. Consider Kodak. It didn’t fail because it did not create a product for the digital age. In fact, Kodak invented the first digital camera in 1975. It failed because it didn’t embrace new technology and adapt to a marketplace with new consumer attitudes.

There are many other examples, of course. The point is flexibility and adaptability are integral to remaining relevant. You need to focus on your market, your surroundings, and what your customers need in order to succeed.

That’s what the AICPA and The Chartered Institute of Management Accountants (CIMA) have done with a proposal to create a new accounting association to represent and advocate for the entire accounting profession, while preserving the member bodies of both organizations. The AICPA Board of Directors, governing Council, Business and Industry Executive Committee and Government Performance and Accountability Committee have all endorsed the proposal and 52 state societies have passed resolutions of support. It also has broad support from finance and firm leaders across the profession. Now they’re asking for you to vote ‘yes.’

Council has authorized an online member ballot and voting started this week. By now you should have received your personal and confidential ballot from the third-party administrator under the name, “AICPA Independent Tabulator.” If you can’t locate it in your inbox, you can retrieve your unique voting information at www.directvote.net/aicpa.

What’s being proposed will provide us with the adaptability and flexibility to keep our profession relevant for future generations. It builds on the foundation the AICPA and CIMA have put in place in recent years—the CGMA Competency Framework, Global Management Accounting Principles and the AICPA|CIMA Competency and Learning website—to provide more of the educational opportunities, practical tools and information that you need to stay ahead. We’ll get more market insights directly to you, particularly on the international and technology trends that are disrupting business models and evolving the role of finance. And we’ll strengthen advocacy against burdensome regulations—increasingly originating overseas that do not protect the public interest—and have a broader platform to promote your designations and the interconnectivity between public and management accounting. Above all, the AICPA will remain dedicated to protecting, promoting and growing the CPA.

I see the proposal as also planting an important seed for the next generation, just like those who came before did for us. It’s rare that we get the chance to make such a direct impact in the future of a profession.

I’ll conclude with a line from Apple, which went through its own journey to relevancy in the 1990s. It is from the 1997 ‘Think Different’ ad campaign: “The people who are crazy enough to think they can change the world, are the ones who do.”

I encourage you to support this important initiative today. For more information on the proposal visit aicpa.org/horizons.

Arleen Thomas, CPA, CGMA, Senior Vice President – Management Accounting, American Institute of CPAs.