THE OFFICIAL MAGAZINE OF THE VIRGINIA SOCIETY OF CPAs
MARCH/APRIL 2019
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Beyond the Numbers:
The triple bottom line
ALSO... Generation Z Mentoring Public accounting myths
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contents
Beyond the Numbers: The Triple Bottom Line page 18
More and more companies are measuring and reporting nonfinancial ethical performance, focusing on people and planet in addition to financials.
Features 22 A New Generation Is Coming
Generation Z is hitting the workforce, and companies should learn what makes their newest employees tick.
26 Take Your Career To New Heights With a Mentor
Use opportunities available from the VSCPA to make career connections that could pay dividends down the road.
Columns
Departments
12 Innovation Innovative partnerships
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President’s Perspective
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Line Items
14 Young Professionals Busting accounting myths
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Tech Talk
16 Accounting & Auditing Auditing and analytics
30 VSCPA News
10 Advocacy 33 Classifieds 34 I Am the VSCPA
CONNECT: connect.vscpa.com
FACEBOOK: facebook.com/VSCPA
TWITTER: @VSCPANews
INSTAGRAM: instagram.com/VSCPA
LINKEDIN: tinyurl.com/VSCPALinkedInGroup
SNAPCHAT: @VSCPA
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president’s perspective 4309 Cox Road Glen Allen, VA 23060 (800) 733-8272 vscpa.com
disclosures disclosures.vscpa.com disclosures@vscpa.com MARCH/APRIL 2019 Volume 32, No. 2 Managing Editor Jill Edmonds disclosures@vscpa.com Contributing Editor Chip Knighton cknighton@vscpa.com Public Affairs & Communications Director David Bass dbass@vscpa.com Editorial Task Force Olaf Barthelmai, CPA Cheri David, CPA Mike DellaRipa, CPA Melisa Galasso, CPA Genevieve Hancock Karen Helderman, CPA Alesia Lewis, CPA Gabriele Lingenfelter, CPA Harold Martin Jr., CPA David Peters, CPA Mark Plostock, CPA Barbara Sukramani, CPA Disclosures is published six times a year by the Virginia Society of Certified Public Accountants (VSCPA). The magazine’s mission is to communicate information of value to VSCPA members, including professional issues and VSCPA initiatives. The materials and information in Disclosures are offered as material only and not as practice, financial, accounting, legal or other professional advice. Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of VSCPA officers, members or editorial staff. Publication of an advertisement in Disclosures does not constitute a VSCPA endorsement of the product or service. Copyright © 2018 Virginia Society of CPAs.
VSCPA Preferred Providers
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Fostering emotional wellness
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motional wellness may seem like a trivial topic for many organizations with so much money at stake. But in the stressful environment of busy season, it’s crucial to make sure your employees are taking care of themselves. Stress of all kinds, whether or not it’s caused by work, can have major effects on employees. It can adversely affect people’s health, both physical and mental, and their productivity. Encouraging employees to take care of themselves is paramount, but we also have to give them the time and means to live healthy lifestyles. That can mean limiting work time, subsidizing gym memberships or offering flexible work schedules to allow for family time even in busy season. More subtle actions can also send a message and have positive effects. Maybe you don’t require employees to answer emails on weekends, but if supervisors and partners are sending those emails, that message might not be getting through. Delaying delivery of emails until Monday tells employees their time is valuable. We have to take care of ourselves and our people. While stress is unavoidable in the accounting profession, try to remember to alleviate and minimize the toll it takes on you, your staff and your colleagues. Don’t impose down time unless absolutely necessary and encourage your employees to take care of themselves. Finally, the profession also offers help for another leading cause of stress: Financial crises. The American Institute of CPAs’ Benevolent Fund (tinyurl. com/AICPABenevolentFund) has been described as the profession’s best-kept secret. It’s been utilized for natural
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disasters like wildfires in California and floods in North Carolina, but it’s also available to help people with unexpected issues like temporary financial difficulty or to cover medical payments in excess of insurance coverage. While the VSCPA doesn’t have that kind of financial resources at the ready, we’re here to help as well if you find yourself facing a crisis. Please don’t hesitate to reach out to me or our staff if you need help. We’re here to connect people with answers. Above all, the VSCPA is a community of professionals who are eager to help each other. It’s a major part of who we are as accountants — and as people. n
Stephanie Peters, CAE, has served as VSCPA president and CEO since 2007. speters@vscpa.com
@StephPeters
connect.vscpa.com/StephaniePeters
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“I feel well-rounded and more confident in my knowledge base since having achieved the CGMA designation. Zach Mastroly, CPA, CGMA Assistant Controller — Reporting & Tax Accounting Koch Industries Inc. © 2017 Association of International Certified Professional Accountants. All rights reserved. CGMA and Chartered Global Management Accountant are trademarks of the Association of International Certified Professional Accountants and are registered in the United States and other countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants. 23169-326
line items
Set a yearly learning plan
TICKER 4 Virginia’s ranking on Forbes magazine’s 2018 Best States for Business list, moving up one spot from last year. Virginia hasn’t held the top spot since 2013, but it’s been moving for the last three years.
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As a CPA, you are committed to continually improving your skillsets year after year, and CPE requirements hold your profession accountable. But do you plan your education out each year? Take a few minutes to develop a plan that fulfills your yearly CPE requirements (such as your ethics requirement, for example), as well as addresses those areas that you’d like to learn more about or brush up on. Regardless of your priorities, if you plan for the rest of the year now, you can choose your course topics wisely. Here are a few tips: Get the right mix of experiential, social and formal learning opportunities. Read “The World Is Your Classroom: Build Your 2019 Learning Plan in Minutes,” a post from the American Institute of CPAs Insight blog, which explains how a lot of your learning as a CPA happens outside of the classroom. Once you realize all the ways and places you learn, you can recognize that you are consistently broadening your experiences just in day-to-day life. Check it out at tinyurl.com/y6v538rh. Brush up on what your personal CPE requirements are to make sure you’re in compliance. The Virginia Board of Accountancy has detailed information on its website, including info on document retention, available at tinyurl.com/VACPEreqs. What matters most to you? Maybe you want to take a course on newer technologies and finally understand the nuances of blockchain. Maybe you’re not as versed on the new tax law as you’d like. Check out the VSCPA’s variety of offerings, from conferences to webcasts and much more at vscpa.com/CPE. Now you can get the education you need your way. Don’t forget to track what you take! You can easily find your CPE history by using the VBOA’s Online CPE Tracking System. Learn all about it at vscpa. com/MyCPE. If you take courses with the VSCPA, your classes are automatically transferred to the VBOA tracking system due to a partnership between the VSCPA and VBOA, should you choose to opt in. Get your ethics in. If you are a practicing CPA in Virginia, you have to take the Virginia-specific Ethics course each year for 2 CPE credits. Visit vscpa.com/Ethics for more information on requirements and view our upcoming offerings.
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The number of years since the tourism slogan “Virginia Is for Lovers” was introduced. The Virginia Tourism Corporation will launch a “50 Years of Love” campaign around the state this summer.
$1.465 TRILLION The amount U.S. student loan debt reached in November 2018, which is more than double the debt amount in June 2009, after the end of the recession. 2.7 MILLION The number of Americans who owe more than $100,000 in student loans.
20 The number of years in a row that Virginia has set its own record for alcoholic beverage sales: $983.3 million last year. $33.4 MILLION The amount sold last year of Virginia’s No. 1 alcohol: Tito’s vodka, which dethroned the 2017 champion, Hennessy cognac.
line items
Virginia’s economy grows, but be cautious Who’s conquering social media? The IRS!
The Commonwealth has left the Great Recession in the rearview mirror, according to the 2018 State of the Commonwealth research report released by Old Dominion University late last year. Fueled by federal government spending (more than 30 percent of Virginia’s economy), job creation, tourism bumps and the Amazon HQ2 announcement, Virginia looks poised for more growth.
Last fall the U.S. Internal Revenue Service (IRS) joined Instagram (@IRSnews), adding the social media picturesharing app to its repertoire of social options. The IRS shares taxpayer-friendly information to help people get ready for tax season and navigate tax law changes. Where else can you find the agency? Follow them at the below handles and share with your clients!
The researchers recommend, however, to be cautious because of the Commonwealth’s reliance on the federal government:
Twitter: @IRSnews, @IRStaxpros, @IRSenEspanol, @RecruitmentIRS, @YourVoiceAtIRS, @IRStaxsecurity
“Federal spending constitutes a blessing and a curse for Virginia. Increases in federal spending provide fuel for the Commonwealth’s economic engine, but budget sequestration illustrated that federal spending can also act as a brake on economic activity.”
YouTube: IRSvideos, IRSvideosmultilingua, IRSvideosASL Instagram: @IRSnews
The report focuses on a few factors that provide uncertainties for the Virginia economy, such as the difficulties of spurring development in all of the state’s metro areas and the unknowns behind the effects of Medicaid expansion. Other sections provide deep analysis of the economic impact of school year start dates, distribution of wealth and income among Virginians and alcohol taxation. Find it at ceapodu.com/reports/ soc-reports/2018soc/.
Facebook: @IRS, @IRSenEspanol, @IRStaxpros LinkedIn: Internal Revenue Service Don’t forget, the IRS also has its own app — IRS2Go, which lets users interact with the agency on mobile devices. Consumers can check refund status, make payments, find tax prep assistance and more.
VBOA/NASBA CPE TRACKER GOING OFFLINE TEMPORARILY The beginning of March will bring a short blackout period for the Virginia Board of Accountancy’s (VBOA) CPE tracking system as the board transitions to its new CPE Audit Service. Beginning March 4, CPAs, CPE providers and VBOA staff will not have access to the current tracking system for approximately two weeks, during which time data will be transferred to the new system. Please contact the VBOA at boa@boa.virginia.gov with any questions.
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tech talk
EXCELLENT EXCEL >>
Counting workdays As you may already know, Excel by default will count the number of days between two dates. As an example, picture a spreadsheet where cells A1 and A2 contain the first and last day of the calendar year, respectively. With 1/1/2019 in A1 and 12/31/2019 in A2, you could write the formula ‘=(A2-A1)+1’ in cell A3. This simple formula will return 365, which represents the number of days in calendar year 2019. However, in business, what often really matters in the number of “business/ working” days. To address working days, Excel has the function NETWORKDAYS, which can be used to calculate the number of business days. By default, the function excludes all weekends. Using the days and cells above, the formula “=NETWORKDAYS(A1, A2)” would exclude Saturday and Sunday and return 261.
to them in the NETWORKDAYS function. Assuming my holiday dates are in cells B1 through B14, my formula would be “=NETWORKDAYS(A1, A2, B1:B14)” and would return 247 business days in calendar year 2019. While you may never need to know how many business days in are in a year, you could use this formula to determine if actions are occurring in a timely manner. For example, if an organization has a requirement that it records receipts within three business days, with the right data set, this function could be used to identify any exceptions. Should you want to experiment with it, the syntax for the function is: NETWORKDAYS(start_date, end_date, [holidays]). George D. Strudgeon, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. Email him if you have Excel topics you want him to cover.
Excluding holidays as well gets a little more complicated. To exclude holidays, you will need to create your own list of holiday dates in a range of cells that you want to Excel to also exclude. After you have your range of cells with holiday dates, you will need include a reference
george.strudgeon@gmail.com connect.vscpa.com/GeorgeStrudgeon
STAY SMART IN AN AUTOMATED WORLD Robots and artificial intelligence may be coming, but that doesn’t mean that human skills will become obsolete. To prepare for the future, you’ll need creativity, complex problem-solving, emotional intelligence and more. Luckily, the new e-book “Human Intelligence,” from the Association of International Certified Public Accountants, can help you navigate the new world of work. Find it under the Human Intelligence series at aicpa-cima.com/learning.
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TAX + TECH Think technology is just a tool to get a tax return done? Think again. Technology can help you work smarter, decrease the risk of error and focus more on longterm tax strategies to add value to your organization. The new Tax Technology Resource Center from the American Institute of CPAs (AICPA) offers up-to-date tech information on things like AI, robotics and more, as well as resources, videos, educational opportunities and many others. Find it at tinyurl. com/TaxTechResourceCenter.
“The time that it takes to compromise most systems is minutes. The time it takes to discover it is months.” — Randy Johnston, executive vice president at K2 enterprises, speaking at the VSCPA Tech-Know Summit last fall
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Visit vscpa.com/PAC
HELP KEEP OUR voices HEARD THE VSCPA IS YOUR PROFESSIONAL ASSOCIATION We strive to protect your best interests and CPA license through our advocacy efforts and the VSCPA Political Action Committee (VSCPA PAC). This includes keeping major issues, such as tax conformity, at the forefront of this evolving political environment. This past year brought 21 new legislators with whom we are still building relationships and working to educate on matters important to CPAs. This means we will need to increase our efforts to strengthen and solidify relationships with legislators, and VSCPA PAC contributions are a key part of this effort. Whether you make a $50 or $100 contribution, every gift helps ensure positive change for the profession and Virginia residents. Contribute online at vscpa.com/PAC.
advocacy
Conformity is a go: Northam signs bill beginning with tax year 2019. Here is a complete list of additional changes:
Effective beginning in tax year 2018 • Eliminated the deconformity with the temporary reduction in the medical expense deduction floor • Excluded Global Intangible LowTaxed Income (GILTI) from the definition of taxable income for corporations
A
s anyone on the VSCPA email list knows, tax conformity has been a major issue in the 2019 Virginia General Assembly session. Conformity took numerous twists and turns in 2019, but Gov. Ralph Northam finally signed legislation to conform Virginia’s tax code with the U.S. Internal Revenue Code as of Dec. 31, 2018. HB 2529 and SB 1372 are identical bills that take effect with the Governor’s signature, allowing the Virginia Department of Taxation to immediately begin processing returns. At press time, it was unclear which bill Northam signed. The issue had been so difficult because of the potential for tax policy changes contained in the Tax Cuts and Jobs Act (TCJA), the makeup of the General Assembly (nearly evenly split between Republicans and Democrats) and the fact that all 140 Assembly seats are up for re-election this November. Add to that the fact that conformity necessitates an emergency clause to go into effect in time for tax season, meaning any bill needed to pass with 80 percent approval instead of a simple majority, and it’s clear the issue was always going to represent an uphill battle. Sure enough, that’s how it played out.
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In fact, conformity nearly didn’t happen at all. As late as New Year’s, conformity legislation was not yet introduced in the General Assembly, and the bills didn’t get a hearing in committee until the last week of January. After the hearings, the bills started to gain momentum, highlighted by floor speeches on the topic from Dels. Lee Ware (R-Powhatan) and Eileen Filler-Corn (D-Fairfax) on consecutive days, followed by a lengthy Senate debate Jan. 31. However, floor amendments stripped the bills’ emergency clauses after that, forcing the VSCPA to continue working to push for an agreement that finally came Feb. 8. In addition to conformity, the agreement, which originated in the Senate, allocated $420 million in refunds to compensate taxpayers for higher state taxes resulting from the TCJA. Individual taxpayers would receive $110 and married couples $220 in October as refunds on 2018 taxes. It’s important to note that those refunds will only go to taxpayers who file before July 1, 2019, so make sure you communicate that to your clients. The bills also would raise the standard deduction by 50 percent to $4,500 for individuals and $9,000 for couples
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• Created an individual and corporate income tax subtraction for 20 percent of the business interest disallowed on federal returns
Effective beginning in tax year 2019 • Deconformed with federal SALT limitation • Reinstated the overall limitation on itemized deductions (also known as the Pease limitation) • Created a nonreverting fund for any additional revenues created by TCJA to be used towards tax reform The VSCPA supported the agreement and commends the General Assembly for working together to reach consensus. The Society worked extremely hard to educate lawmakers, taxpayers and practitioners on the importance of getting conformity passed, and got a lot of help from our members, who used our new VoterVoice tool in numbers to contact their legislators about the issue. All told, at press time, 386 members had used the tool to send 1,199 messages to 133 legislators about conformity, while 32 members visited the General Assembly in person to press the issue during CPA Assembly Week in January. We would like to thank the VSCPA
advocacy
Tax Advisory Committee and Executive Committee for crafting and settling on our messaging, as well as all the members who took the time to visit their legislators or send emails to help the conformity effort. You can view our resources, communications and news coverage of the topic at vscpa.com/Conformity.
IN OTHER NEWS… Believe it or not, the VSCPA was following other issues this session, tracking 55 bills
on various topics related to conformity, tax reform, remote sales tax collection (stemming from the U.S. Supreme Court’s decision in South Dakota v. Wayfair), regulatory reform, procurement and more. The Society took official positions on three bills — support for the two conformity bills listed above and opposition for HB 2804, a procurement bill that would have required information technology and professional services firms to install a certain type of verification software when contracting on government projects. That bill failed to advance from a House General Laws
subcommittee. The VSCPA took advisory roles on other bills — for example, working to ensure that Wayfair provisions were implemented in an appropriate way — and monitored others, particularly regulatory reform bills, to watch for potential future impacts on the Virginia Board of Accountancy (VBOA) and the CPA profession. While none of the regulatory reform legislation would impact the VBOA as introduced, the following bills were still alive at press time: • HB 1939: Requires regulatory boards under the Virginia Department of Professional and Occupational Regulation (DPOR) to return excess revenue from fees to regulants if money in account exceeds a certain amount
Tax Season
• HB 2028: Requires DPOR to conduct an evaluation and release a report whenever regulation is introduced that would require DPOR to increase or begin regulating an occupation
Cessation Program Experiencing: • Stress? • Lack of Sleep? • IRS induced Nausea?
• HB 2327: Permits DPOR director to issue a cease-and-desist notice to any person unlawfully engaging in unlicensed practice of an occupation • SB 1751: Authorizes the dissemination of criminal history to DPOR for the purpose of investigating individuals for initial licensure, certification or registration
We have helped thousands sell...and WE CAN HELP YOU!
Wade Holmes 888-847-1040 x2 Delivering Results - One Practice At a time
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Two Wayfair bills were still alive at press time: HB 1722 and SB 1083, which require remote sellers and marketplace facilitators to collect sales and use tax if a seller has more than $100,000 in annual gross revenue sales in Virginia or at least 200 sales transactions in Virginia. n
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innovation
The innovative future is coming. Are you ready? Programs, resources and solutions from the VSCPA’s Center for Innovation partners can help you and your firm prepare for the future of leadership, technology and talent. Discounts and specials are available for VSCPA members!
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ew opportunities and challenges are fundamentally changing how businesses operate. Last fall, the VSCPA launched the Center for Innovation to help you become future-ready and drive the CPA profession forward. The Center for Innovation is designed to be a go-to resource that empowers you to drive CPA relevance through innovative and visionary leadership. The Center offers futureforward resources, learning and engagement programs to help you find solutions for problems in two focus areas: technology and talent. We’ve partnered with experts in these areas to bring you the most cutting-edge and relevant content we can find.
Leadership training Through classroom trainings from Dale Carnegie, global leaders in leadership development, you’ll find a selection of courses to help address the specific needs for your role. We offer four customized packages. The program offers certificates and digital badges, and VSCPA members get a 60 percent discount. There are only a few offerings left, so visit vscpa.com/leadership-partnership-programs to register.
Our partners offer discounts on hand-selected programs or exclusive content only available to VSCPA members. Below are more about our partners and the benefits they offer. As the premier organization for CPAs and accounting professionals in Virginia, the VSCPA is always looking for exclusive partners with a shared goal of empowering our members to thrive. If you’re interested in becoming a VSCPA partner, visit VSCPA.com/ innovation/partnerships or contact Laura Cobb, senior manager of innovation & leadership, at lcobb@vscpa.com or (804) 612-9441. n
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VSCPA Leadership Academy We’ve partnered with Floricane, industry leaders in leadership development, to bring you the VSCPA Leadership Academy, a six-month training program for future leaders. This is an exclusive offering only available for VSCPA young professional members 35 years old and under. Registration opens in June.
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innovation
Workshops
Education and Ai auditor platform
A set of dynamic workshops available only through the Frontier Academy, known for their unique approach to building innovation, strategy and leadership, will help you enhance your skills and earn certificates. VSCPA members get a $400+ discount. Visit vscpa.com/ leadership-partnership-programs to register.
MindBridge Ai is the leader in human-centric, artificial intelligence-enhanced auditing and financial analysis. We joined the MindBridge Education Program to provide member firms access to related learning material and hands-on access to the MindBridge Ai Auditor solution. Stay tuned for future educational offerings!
VSCPA XChange Known for their Values Based Leadership method, InnerWill has partnered with us to bring you VSCPA XChange, a new, facilitated peer-to-peer learning and sharing opportunity focused on technology, talent and practice management. Visit vscpa.com/Xchange to register for this exclusive offering. Stay tuned: More on XChange will appear in the May/June issue of Disclosures.
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vation
An award-winning, custom cloud computing services pioneer providing cloud management solutions to CPAs since 2001, Cetrom is a Microsoft Partner with multiple gold competencies that delivers cost-efficient, secure and reliable cloud computing services. Stay tuned for our special offerings for VSCPA members!
VSCPA.com/Inno
Cloud computing solutions
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young professionals
Public accounting myth busters New accountants deciding between public accounting and private industry for their first jobs shouldn’t believe these accounting profession rumors.
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lashback: Your accounting studies in college are ramping up. The first exam in a core course is behind you and more challenging subject matter lies ahead. It’s also recruiting season and the lobby of the business school is abuzz with employers networking with future entry-level staff. The selection of public accounting firms represented there is dizzying. “Should I start in public accounting or go straight to private industry?” is still a big question. Let’s reconcile some of the hearsay of the accounting industry from the perspective of accounting students with our wisdom as career professionals. Successfully articulating our profession’s value and breadth of opportunities with future CPAs often gets lost among our clients’ many needs.
Michael Watkins, CPA
Myth: Joining an accounting firm after college requires me to fit into a box (personally and professionally). False. While public accounting is a great place to start a prosperous accounting career, joining any firm, small
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or large, does not mean your individual personality and interests must be left at home. Millennials have, in a way, tasked accounting firms and all large employers with innovating and evolving office culture to stand out among their competition and attract business schools’ best and brightest graduates. Public accounting firms promote job satisfaction and comradery by facilitating team-building activities, hosting happy hours, encouraging professionals to join office recreation leagues and empowering staff to launch fantasy football leagues or March Madness brackets, just to name a few popular “extracurriculars.” Furthermore, public accounting firms foster an exciting professional growth environment in which employees at all levels can develop their personal brands and specializations. While firm cultures vary by firm and by office or region, all are committed to hiring students with the drive and capacity to someday lead their firms. Stand out and firms will notice. Public accounting firms further increase curb appeal by touting factors like flexibility or the “work-life
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young professionals
Myth: The accounting profession will challenge me to learn new things throughout my entire career.
balance,” a variety of exciting career paths and opportunities, and being a part of a regionally, nationally or globally recognized professional services firm. The key takeaway here for both new and seasoned professionals is to understand what gives your firm that competitive edge over the others and translate that into a concise and attractive pitch that piques interest among accounting grads.
This one is true! An accounting degree provides a foundation of principles to be used in solving complex business problems and developing new skills. As accountants, we must challenge ourselves every day to learn something new and use that newfound knowledge for personal, professional and intellectual advancement. The accounting profession offers great potential to either specialize or develop highly diverse competencies. In public accounting, for example, professionals can gain experience in state, local or federal government; in public or nonpublic business entities; and in industries like manufacturing and distribution, financial institutions, health care, real estate, consumer products and private equity, just to name a few. As we all know, clients in each of these industries operate in very diverse ways. Make sure to encourage recent accounting graduates or new staff to research some industries or service lines they want to explore, and from there the opportunities will be nearly endless.
Myth: Accounting firms perform a service that rarely changes or innovates. False. Accounting firms, like any business enterprise, must compete within their industry. In doing so, firms are developing new skill sets and innovating existing service lines — getting better and more efficient at what they already do. Many firms have already evolved their tax, assurance and risk advisory practices to successfully respond to a largely electronic and digital world. With these developments, firms have boldly adopted data analytics techniques that utilize fundamental principles to more intelligently assess financial data. Firms empower professionals at all levels to engage creatively in this mission. Without a modernization of the audit profession, firms’ value to end users would steadily decline. Consider discussing how your firm innovates and how this transition phase is an exciting time to begin a career at your firm.
The accounting profession is a great environment for a world of intellectual growth and career advancement. Public accounting, likewise, is the best foundation to build an accounting career, wherever it may lead. Perhaps someday that career culminates in leading a public accounting firm — one that executes its commitment to exceptional client service through internal, organic professional development. Another attractive goal is to serve in a vital corporate accounting/finance role, driving the company to achieve greatness by applying principles and techniques to implement a strategy.
Myth: Public accounting looks like the only thing I can do with an accounting degree. False. Public accounting is a great place to begin a career. New recruits are surrounded by like-minded, driven young professionals, with whom we growing professionally and challenge each other as peers. We gain experience by dissecting clients’ financial information, evaluating the level of rigor to their already fraud-averse systems and more. Professional judgment takes shape over time, becoming a key indicator of value in competitive job markets. Public accounting can serve whatever career purpose is desired, whether it be just a job, somewhere to earn promotions and manage others, or more of a tool that can define career potential outside of public accounting.
Conversely, the profession supports the desire to master a position or a specific industry and stay there long-term. Some of us are driven by consistency, where we can practice specialized consulting, tax or bookkeeping services without the pressure to constantly challenge ourselves with new roles or responsibilities. Develop long-term goals early on, adjust them as needed and see where the profession takes you. Seek out a mentor for advice and even serve as one to help tailor others’ goals for their interests and aspirations. Lastly, a strong network aids each of us in leveraging the accounting profession’s most distinctive merits to make your mark on the world, wherever the profession leads you. n
If a professional someday leaves public accounting, they are not necessarily leaving the accounting profession. Our proficiency and expertise gained over time make for an exceptional foundation to take on new challenges in the corporate world. An infinite number of possibilities and career opportunities exist whether you start out in public accounting or corporate finance, transition from one to the other or enter the accounting profession at another point in your career altogether. Each of us has the power to do anything with our accounting degrees; drawing the roadmap for achieving your dreams in our field will always be a unique and exciting challenge.
DISCLOSURES
Michael Watkins, CPA, is a senior assurance associate in the Richmond office of BDO USA, LLP, serving clients primarily in the industries of manufacturing and distribution and private equity. He serves on the VSCPA Young Professionals Advisory Council (YPAC). mwatkins@bdo.com connect.vscpa.com/MichaelWatkins linkedin.com/in/michaelwatkinsrva
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accounting & auditing
The challenges of auditing and analytics Data analytics are a tool that can help auditors assess and address material misstatement risks.
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echnology is both the biggest threat to an accounting practice today and its greatest salvation. Attendees at the 48th Annual Virginia Accounting & Auditing Conference (A&A), held in three locations around the state last fall, learned about how various facets of technology, like data analytics and cyber security, will affect the future of work. VSCPA member Joan Renner, CPA, shareholder at Renner & Co. in Alexandria, touched on her own career in her session “Today’s Analytical Procedures — A Practical Approach.” Her session covered the challenges that come in marrying technological advances in the area of data analytics to the rigorous Generally Accepted Auditing Standards that already exist.
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procedures are still aimed at assessing and addressing the risk of material misstatement. Data analytics are best viewed as a tool to accomplish those goals. Auditors start by gaining an understanding of a business and its systems, then walk through key controls and perform planning analytical procedures before assessing audit risk. They then address those risks with substantive tests, including analytical procedures, perform those analytical procedures, then evaluate their findings and issue a report. “It’s not a black box where you put out a bunch of charts,” Renner said. “It’s addressing a risk you may have assessed and reducing that risk to an acceptably low level.”
“The challenge in this particular topic is that we know our auditing standards. There are people who know data analytics software, but they aren’t auditors,” she said. “The challenge is connecting what data analytics can do with what we do every day.”
Analytical procedures can also help by bringing in nonfinancial data — a head count of registrants for an event, or a monthly customer count from a pointof-sale system or even the number of meals served at a banquet. Those figures can serve as plausible approximations for certain types of financial data.
Renner pointed out that U.S. Generally Accepted Auditing Standards (GAAS) haven’t changed. Audit
Other uses include identifying “fuzzy duplicates” in
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databases — Brookings Institution versus The Brookings Institute, for example — or in finding potential fraud indicators, such as multiple employees being shown with the same address or bank account.
“There’s nothing wrong with sampling. It’s just that if we had electronic books forever, we wouldn’t have been encouraged to do sampling. We’d have been encouraged to do things like this all along.”
“Analytical procedures are powerful tools. They support audit effectiveness because they show things that don’t look right,” Renner said. “They support audit efficiency because when we get to a point where things look right, we’re done.”
The American Institute of CPAs (AICPA) offers limited guidance in the analytics area. Essentially, if a product moves your audit procedures forward, it’s appropriate. “They don’t tell you what software to use for what procedures,” Renner said. “They tell you to use your best judgment, but stay tuned for further developments in this area.”
Another application for data analytics — one that the VSCPA has touched on before — is in auditing a larger sample size, or even an entire population.
Download a whitepaper on the conference, with more information on this topic and summaries of popular sessions, at vscpa.com/AA2018. Want to attend the Virginia Accounting & Auditing Conference this year or any other of the VSCPA’s conferences? Visit vscpa.com/conferences for info. n
“I remember editing big, heavy books that were written in pen,” Renner said. “You couldn’t possibly look at every entry. You had to sample. I believe in the value of sampling. Sampling is darn good. If you have a sample size that corresponds to your materiality level and the size of your organization, that’s good.
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BEYOND THE NUMBERS: THE TRIPLE BOTTOM LINE More and more companies are measuring and reporting nonfinancial ethical performance, focusing on people and planet in addition to financials.
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Karen Helderman, CPA, CISA, PMP
s CPAs, we are experts at calculating and reporting on the financial bottom line, but we may not be familiar with a growing reporting trend that measures a company’s nonfinancial ethical performance, known as the triple bottom line (TBL). The triple bottom line is a phrase coined by John Elkington in his 1998 book, “Cannibals with Forks: The Triple Bottom Line of 21st Century Business,” and he suggests that a business’s success depends on its positive influence through three bottom lines: profits, people and planet. Triple bottom line reporting is also known as sustainability reporting or corporate social responsibility reporting, and has been increasing in popularity as consumer and investors seek out brands and companies that align with their social values. In TBL reporting, profit represents the traditional financial bottom line as well as disclosures about financial-based initiatives, such as procurement practices and anti-corruption policies. The people bottom line includes reporting about an organization’s social responsibility and activities that improve the lives of its employees, customers and citizens. Often, this bottom line will disclose information about employment, diversity, nondiscrimination, human rights, occupational safety and customer health. The planet bottom line focuses on environmental responsibility and may include information on how an organization replenishes raw materials used during production and reduces energy usage, emissions and waste, as well as how it complies with environmental regulations. TBL reporting has been popular in Latin America and Europe for more than 20 years, with usage growing in the United States as our culture focuses more on the environment, ethics and sustainability. According to “The KPMG Survey of Corporate Responsibility Reporting 2017,” 93 percent of the world’s largest 250 corporations report on TBL, representing a significant rise from 35 percent in 1999 when KPMG first measured this metric. Some popular U.S.-based companies that use TBL reporting include Starbucks, Johnson & Johnson and The Walt Disney Company, to name a few. Many Virginia-based companies, including Genworth, Capital One and Altria, regularly report on TBL, and the City of Richmond has created a sustainability office that provides an online sustainability dashboard to its citizens.
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‘PROFIT’ BOTTOM LINE Most profit bottom line reporting occurs in the traditional annual financial report, which includes the financial statements and footnotes. However, companies like Capital One have chosen to enhance these traditional disclosures by including additional information in its TBL or social responsibility report. Specifically, Capital One’s Corporate Social Responsibility (CSR) Report for 2017, available on the Capital One website, links the reader to the annual financial report, discloses its philanthropic giving, quantifies its number of locations and associates, describes its business segments and explains its governance and business practices. The governance and business practices section is especially compelling, as it describes the corporate culture as being based on the values of excellence and doing the right thing, and provides links to its Code of Business Conduct and Ethics. Information in the profit bottom line section of Capital One’s CSR report is similar to information one might find in a governmental entity’s Management’s Discussion and Analysis.
PEOPLE BOTTOM LINE Capital One’s CSR report contains two sections devoted to its people bottom line. The first section focuses on its employees and provides demographic breakdowns about the composition of its workforce, such as by sex, race and ethnic background. This section also describes interesting programs that employees may participate in, like one that elevates women in technology and another that empowers frontline associates to share feedback and ideas. It also features information about its campaign to build and foster a diverse and inclusive culture of employees through various business resource groups. As Capital One states in this section, the business resource groups it sponsors “are linked to Capital One’s goals of recruiting, retaining, and developing diverse talent and leveraging differences and connections to contribute to the success of the organization.” The second section of Capital One’s people bottom line focuses on its impact to the community and includes information about its outreach programs through volunteerism, grants, loans and business policies. A significant portion of this section is devoted to its $150 million, five-year investment to help people in the community prepare for future jobs and to u
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LEARN MORE Want to see how Virginia-based companies are tackling TBL reporting? Check out these links: Capital One — Corporate Social Responsibility (CSR) Report for 2017: tinyurl.com/ CapOne2017Report City of Richmond — 2017 RVAgreen Sustainability Dashboard: richmondgov.com/ Sustainability/index.aspx Genworth — Corporate Social Responsibility Update 2017: tinyurl.com/ Genworth2017report And don’t forget to check out Global Reporting Initiative at globalreporting.org.
benefit small businesses, and includes stories and videos about people who directly benefited from the investments. It also describes community initiatives that are relevant to Capital One’s line of business, such as financial literacy programs, grants for credit counseling, low-income housing loans and supplier diversity. In contrast, Genworth has chosen to take a cleaner approach in its 2017 Corporate Social Responsibility Report, also available on its website, as it focuses less on detailed descriptions of programs and more on outcome statistics that are measured for each goal. Genworth’s people bottom line focuses on its employees and reports on how many employees participated in its people-based initiatives. Genworth’s CSR describes its approach to the people bottom line as such: “At Genworth, we’re committed to creating an inclusive work environment that fosters camaraderie,
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rewarding work, community involvement, and a focus on our employees’ wellbeing. We seek out our employees’ unique and common perspectives and talents, and work together to help each other and the Company succeed.”
PLANET BOTTOM LINE Capital One’s CSR report includes a comprehensive section on its planet bottom line and describes its commitment to the environment by using renewable energy, constructing LEED-certified buildings and achieving less waste. For each commitment, the report provides information about various programs underway, such as using water efficient fixtures, compositing and recycling and providing electric vehicle charging ports. Capital One also provides statistics to highlight some of its most significant achievements, such as tons of paper recycled and percentage of renewable energy used to power the company.
Users can click on an icon, such as “Alternative Transportation” or “Air Quality,” and use visual cues to evaluate the city’s progress on each initiative. These visual cues include arrows pointing upward and downward to signify positive and negative results, as well as graphs that show historical trends, all of which allows users with various educational backgrounds to quickly understand the information.
THINGS TO CONSIDER BEFORE ADOPTING TBL REPORTING
In contrast, Genworth’s report focuses on high-level statistics in its planet bottom line, detailing that it has decreased its emissions for air travel by 32 percent and reduced paper usage by 26 percent, for example. The website offers readers detailed information about its efforts, gives transparency to its environmental policies and describes the role of its Sustainability Committee.
A 2010 research paper from Ernst & Young, “Seven Questions CEOs and Boards Should Ask About Triple Bottom Line Reporting,” explores this topic and provides thoughtful information to companies interested in TBL reporting. There are pros and cons to consider before embarking on TBL reporting. One pro is that TBL reporting gives important information to stakeholders, such as ethical investors and consumers, who are interested in and value corporate sustainability matters. Various researchers have found that millennials and others are willing to make purchases that support a cause, will pay more for an environmentally sustainable product and want to use their skills to make a difference. Consequently, reporting TBL activities may be imperative to remain competitive and attract these consumers and investors.
Triple bottom line reporting is not isolated to just corporations, however — it can also be found in the government sector. The City of Richmond’s Sustainability Office is a good example. The Sustainability Office was created in 2010 to set triple bottom line goals, generate savings and have a positive environmental impact through the implementation of the RVAgreen Sustainability Plan. The Plan includes 55 initiatives that the Sustainability Office groups and presents in an interactive Sustainability Dashboard, making the reporting experience both interesting and intuitive for the user.
An obstacle to implementing TBL, however, is that it requires significant effort beyond simply preparing the report. Including people and planet bottom lines in addition to financial data commits the company to a culture of sustainability, which goes a lot deeper than just reporting on it. The company must commit itself to adopting principles that focus on people and planet, and to rethinking its strategic plan and business practices to have positive effects on all three bottom lines. This is not easy. Simply donating more money to the local community may not be a solution for improving a people or planet
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bottom line, because doing so may have a negative impact on the profit bottom line. Ideally, a company would carefully select its sustainability initiatives to have positive outcomes on multiple bottom lines. For example, a manufacturing company may consider optimizing its production methods, which would improve its planet bottom line by reducing the amount waste sent to the landfill, while also having positive outcomes on the profit bottom line. As seen earlier with Capital One and Genworth, each selected planet bottom line initiatives to reduce office waste and minimize emissions associated with travel. Achieving these initiatives benefits the profit bottom line by reducing the amount of paper these companies purchase and avoiding travel costs by opting for virtual rather than physical meetings.
GLOBAL REPORTING INITIATIVE The approach to preparing a profit bottom line is deep rooted in accounting standards and best practices, and CPAs know what they must do to opine on its fair representation. However, TBL reporting standards have not yet made their way into the traditional accounting and auditing standards, so corporate accountants may be confused about what to report and how. The best source of information and guidance on this topic is the Global Reporting Initiative (GRI), an independent international organization that provides the first and most widely adopted global standards for TBL reporting. Their standards cover a range of topics in the profit, people and planet categories and are free to download at globalreporting.org. GRI’s mission is focused on four areas: 1. Create standards and guidance to advance sustainable development: Provide the market with leadership on consistent sustainability disclosures, including engaging with stakeholders on emerging sustainability issues.
2. Harmonize the sustainability landscape: Make GRI the central hub for sustainability reporting frameworks and initiatives, and select collaboration and partnership opportunities that serve GRI’s vision and mission. 3. Lead efficient and effective sustainability reporting: Improve the quality of disclosures made using the GRI standards, reducing reporting burden and exploring reporting processes that aid decision making. 4. Drive effective use of sustainability information to improve performance: Work with policy makers, stock exchanges, regulators and investors to drive transparency and enable effective reporting. The GRI standards represent voluntary guidelines and offer suggestions as to what information a company should report. Generally, GRI recommends that companies provide information that is accurate, understandable and shows both positive and negative performance. A consistent theme throughout the standards is that reporting should focus on what is material to the company, what would be of interest to its stakeholders and what areas of sustainability are most relevant to the company. For example, a manufacturing company’s planet bottom line reporting should likely focus on emissions and environmental compliance whereas that information would not be pertinent to an insurance provider’s planet bottom line reporting. Additionally, although TBL reporting is gaining in popularity there are not yet any requirements that an independent body provide assurance on the relevance, reliability and completeness of the reported people and planet bottom lines. This is particularly concerning when considering GRI’s fourth focus area, described above, which recognizes that
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policymakers, stock exchanges, regulators and investors may rely upon sustainability information. Currently, these bodies must take companies at their word, which leaves this reporting open to errors, omissions and exaggeration. Ernst & Young’s 2010 research paper suggests that as TBL reporting matures, stakeholders will come to expect an independent body to provide assurance on the reported information. This could open up a new business line for CPAs who can give such assurances and may provide an interesting career path for business-minded students who have an interest in nonfinancial ethical reporting. In summary, triple bottom line reporting is a relatively immature reporting model that is growing in popularity as citizens demand transparency about nonfinancial ethical initiatives. This type of reporting is voluntary and the GRI is the only body that has released standards that companies can use as reporting models. Accountants may assist in preparing people and planet bottom line disclosures, but currently there is no requirement that an independent reviewer provide assurance that the reported information is materially relevant, reliable and complete. CPAs should continue to monitor trends in TBL reporting as it may mature to the point that consumers demand independent assurance on the presented information and this may generate authoritative standards and open up new business opportunities. n
Karen Kyte Helderman, CPA, CISA, PMP, is the executive director of audit and compliance services at Virginia Commonwealth University. She has extensive experience directing financial, compliance and performance audits of state agencies and universities throughout the Commonwealth and is a member of the Disclosures Editorial Task Force.
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kkhelderman@vcu.edu connect.vscpa.com/KarenHelderman linkedin.com/in/KarenHelderman
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A NEW GENERATION IS COMING. ARE YOU READY? Generation Z is hitting the workforce, and companies should learn what makes their newest employees tick.
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here’s a new group of professionals flooding into companies across the country. They’ve been dubbed “Generation Z,”and three years from now, they’ll represent 20 percent of the workforce.
Nathan Geiger)
What values and expectations are this new cohort of young adults bringing to the workplace? And how can companies get ready to manage them and integrate them with other generations? Understanding who makes up this new generation and the unique perspectives they bring to the workplace is key.
WHO IS GENERATION Z? On the surface, Generation Z consists of young people currently between 16 and 25. Some have graduated college and are beginning their first professional jobs, while others are getting their first part-time gigs. Demographers may classify this group of young adults as the second wave of millennials, also known as Generation Y, but they are different from the first wave in many ways. Generation Z grew up with the turmoil that came after the September 11 attacks, and they had a front-row view of the recession and its effect on their parents and grandparents. For that reason, they are often more pragmatic and practical than Generation Y (those born between 1978 and 1989). Though they value creativity and innovation, like the millennials that came before them, they also crave stability. They tend to be interested in working for either medium-size companies or large international corporations, perhaps because of the
security those companies can offer. Some have called them the “reality check generation.” They are also the first truly digital generation. They can’t remember life before smartphones, and advancing technology doesn’t trip them up at all; if they don’t know how to do something, they figure it out. After all, they’ve grown up with YouTube video tutorials and constant access to information via social media and the internet, so they are always learning. Like millennials, those in Generation Z value diversity — and they are diverse as a group. According to the U.S. Census Bureau, a quarter of them speak a language other than English at home (an increase from 11 percent in 1980) and 43 percent belong to an ethnic minority group (an increase from 22 percent in 1980). They also enjoy close relationships with their parents. In a recent survey Robert Half conducted with the nonprofit organization Enactus, 82 percent of Gen Zers said they expect their parents or guardians to have some influence on their career decisions after graduation.
MAKE THE CALL FOR GEN Z When searching for a job, members of Gen Z typically look for a few specific things: The possibility for growth. When asked to name their top three priorities when seeking a job, 64 percent of Gen Zers cited career opportunities. These young adults want to know that they u
Know this... • Generation Z is currently between 16 and 25 years old, so the first wave is hitting the workforce now. This generation grew up in the wake of September 11 and watched the effects on the recession on their families. • When job searching, Gen Z prioritizes the possibility for growth in a position. In addition to a competitive salary, the organization’s values, culture and authenticity are important to them. • With four generations having to work together, organizations that foster a culture of respect will have the most success integrating Gen Z into the workplace. Cross-training can also help groups build respect for each other.
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have the chance to move up in the organization if they work hard and perform well. Values and culture. This group has a strong sense of social responsibility, and before they take a job, they want to make sure it aligns with their personal beliefs and goals. In the Robert Half/Enactus survey, 40 percent said that it’s important to be making a difference or having a positive impact on society. Companies that demonstrate ties to the community and local charities stand out to Gen Z. A competitive salary. This cohort grew up during the recession and have more in common with Depression-era children than their older millennial counterparts when it comes to money. Therefore, they place a high priority on salary; 44 percent of Gen Zers named generous pay as a top-three priority in the survey. Authenticity. These young adults are looking for a real, honest, transparent picture of a job’s day-to-day tasks and responsibilities. If they take the position and it’s not what they expected, they don’t hesitate to change jobs. A swift hiring process. Gen Zers don’t like to wait, and they see hesitation in the hiring process as a sign that the company is unorganized or slow-moving — in other words, not a place where they’ll be able to move up the corporate ladder quickly. They won’t wait three months for a firm to make a decision; they’ll just move on to the next opportunity.
THE WORKPLACE OF A NEW GENERATION Gen Zers may have a reputation for being obsessed with smartphones and social media and, therefore, totally disconnected from the real world. But research into their preferences erases that stereotype. For one thing, Gen Zers prefer face-to-face communication over phone calls or emails when it comes to workplace communication. They want to develop strong ties with authority figures, working closely with their manager to glean direction, guidance and coaching that will help them succeed. They would also rather collaborate in small groups than work solo. Secondly, this group expects to work hard. In fact, two-thirds of the respondents to the Robert Half/Enactus survey believe they’ll have to work harder than previous generations to have a satisfying career. Finally, they expect to be rewarded for that hard work. In the Robert Half study, 32 percent of Gen Zers said that they plan to be managing or supervising employees in a corporate environment
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by the time they’ve been out of college for five years. Another 24 percent expect to be working their way up the corporate ladder, but not in management yet.
CREATE A CLEAR PATH Once they’re on the job, Gen Zers tend to stick with companies that make these things a priority: On-the-job training. Gen Zers want to set themselves up for career advancement. Companies that provide training or mentoring programs that allow them to develop new skills or improve old ones show them that management is invested in their progress. Frequent discussions about their career path. Gen Zers are highly motivated by the idea of growth opportunities. They want to know how they can move up in their organization, and they want their manager to explain, step by step, what they should be doing to advance. They want their supervisors to be straight with them in any discussion: In the Robert Half/Enactus survey, 38 percent cited honesty and integrity as the qualities they value most in a boss. Coaching and mentoring from their supervisor. Check-in meetings in which supervisors provide input and feedback about current projects and responsibilities can go a long way with this group. They can work independently and tend to be entrepreneurial, but they want to be given the tools and input they need to be successful from the beginning. Up-to-date technology. Gen Zers can’t — and won’t — put up with software or systems that are obsolete. There’s a plus side to this, though: This generation is so adept and up to date that they can help their company use emerging technology to increase efficiency and productivity.
A MULTIGENERATIONAL WORKFORCE IN THE MAKING Over the next five years, as members of Generation Z become part of the team, managers must make sure that all four cohorts in their workplace — baby boomers, Generation X, Generation Y and these newcomers — work together successfully. Supervisors aren’t the only ones worrying about it, either: Gen Zers, according to the Robert Half/Enactus survey, are particularly concerned about working with baby boomers. Beyond having different values and expectations, they think boomers won’t take them seriously. That’s one reason why organizations that foster a culture of respect
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will have the most success integrating the newest professionals into their workplaces. Savvy managers encourage employees to think about things from the other generation’s viewpoint when they’re working on projects together. In addition, cross-training helps the groups build respect for each other as they share their areas of expertise.
being as flexible as possible and trying to accommodate and support the different approaches. When it comes to managing Gen Zers, it’s best to ignore the stereotypes and remember that they’re like any other new cohort coming into the workforce: full of energy and new ideas. Organizations that treat them with respect and trust will reap the benefits of that enthusiastic, innovative attitude. n
And don’t forget about the similarities among the generations. After all, Gen Z shares many values and characteristics with boomers, Gen Xers and Gen Yers: They all want growth opportunities, job stability and good salaries and benefits.
Nathan Geiger is a manager at Ernst & Young LLP and is an inactive CPA in Minnesota. This article was originally published in Footnote, the official magazine of the Minnesota Society of CPAs. It’s used with permission.
Finally, keep in mind that companies have been integrating young people with new ideas into the workforce for a long time. The best practices for managing multigenerational teams this time around aren’t that different from what they’ve been in the past: remembering that each generation’s workplace needs are different,
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TAKE YOUR CAREER TO NEW HEIGHTS WITH A MENTOR Use opportunities available from the VSCPA to make career connections that could pay dividends down the road.
MENTOR METHODS The VSCPA sunset its MentorMatch program in February, but VSCPA membership still represents a great opportunity to connect with potential mentors (or mentees). Here are some opportunities for connections: Conferences: The VSCPA provides biographies for all speakers at its conferences. If a speaker’s background speaks to you, or if he or she is in a position you’d like to attain, talk to him or her after the session or reach out over email. Visit vscpa.com/MyCPE. Networking: Seasoned professionals who attend networking events have self-selected as wanting to expand their professional network. You’re already exchanging contact information — just reach out! Visit vscpa.com/networking. Volunteering: Joining a VSCPA committee, task force or other volunteer opportunity puts you in contact with professionals who have similar interests. Visit vscpa.com/volunteer. Connect: Our members-only online community is a great resource for connecting with other members. You can search our membership directory, find volunteer opportunities and reach out to active posters or post a question in the Open Forum, new Innovation community and more. Visit connect.vscpa.com. Staff contacts: Most VSCPA staff are in contact with a variety of members across the industry and can help connect you with someone in a specific field, role or specialty. Find staff contact information at vscpa.com/OurTeam.
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Chip Knighton
inding a mentor is one of the best ways to gain expertise in the more career-oriented aspects of the accounting profession. A mentor can provide a sounding board, a different perspective on office politics and firsthand expertise in a role a young CPA might be looking to fill (not to mention the professional networks they bring with them).
types of industries in her background,” Soles said. “It seemed like a natural fit for me because I was trying to decide which direction to go.”
In a Gartner study of 1,000 employees across five years, 25 percent of employees who enrolled in a mentoring program had a salary-grade change, compared to just 5 percent of employees who didn’t participate, and were promoted five times more often. A Harvard Business Review study of CEOs in formal mentoring programs found that 84 percent said that mentors had helped them avoid costly mistakes.
“The first thing was her energy and her enthusiasm and her interest,” Hagen said. “She immediately connected with me on some of the commonalities in our backgrounds and the relationships we’ve had with different folks we’ve worked with. We immediately connected.”
And where’s the best place for young VSCPA members to find an experienced professional to mentor them? The VSCPA itself. Just about every interaction you have with the VSCPA can connect young professionals with experienced CPAs and provide the opportunity for a longer-lasting relationship. Conferences, networking opportunities, volunteer committees — all of these benefits can put young professionals in touch with potential mentors. Here are some young professionals who found mentors through the VSCPA.
CONFERENCE CONNECTION Lauren Soles, CPA, has never been shy about learning from her more experienced colleagues. The 31-yearold, who has been in her role as business development director at BDO USA in Richmond for about a year, says she keeps in touch with six or eight former colleagues whom she refers to as mentors — many from her first job at Keiter in Glen Allen. Soles doesn’t limit her mentors to previous coworkers, though. She connected with another mentor — Anne Hagen, CPA, CFO of the Masonic Home of Virginia in Henrico — after attending one of her sessions at the VSCPA’s Professional Development Conference (now KnowledgeNOW) in Chantilly in 2015. She was intrigued by Hagen’s experience because she saw herself as approaching a crossroads in her career. “I was really interested in her perspective since she had some public accounting experience and some industry experience, she had nonprofit — various
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She made a good impression on Hagen, with the two outgoing women sparking a friendship right away over roles and shared connections.
They wound up working on several projects together, notably on the VSCPA’s Business & Industry Conference Committee. That the two came together through a VSCPA event was notable, but not surprising — VSCPA volunteers are, by definition, giving of their time and expertise and devoted to improving the profession. “In general, with anything that a young professional or any professional is involved with, whether it’s committees at the VSCPA, other professional organizations or nonprofits, it’s taking an interest in people,” Soles said. “The more that you get to know someone, you do connect and you do start to realize ‘I really think that we have a lot in common,” or ‘She may be able to help me as I’m working through XYZ decision,’ or ‘I think it might be good that we stay in touch.’ It’s just taking it back to the goal of getting to know people and wanting to form that relationship and putting the time in.” Hagen suggested, too, that events and committees aren’t the only ways the VSCPA helps connect people. “There are a lot of activities that the VSCPA sponsors, but there are also a lot of resources at the VSCPA,” she said. “The more I volunteer there and the more I learn about the staff, the more I realize how much they know and how many people they know. “Sometimes I’m not so sure we take advantage of the staff there. It’s simple to reach out to them and say, ‘I’m looking for someone in this field that has this skill set,’ and I’ll bet you they could come up with six or eight people like that just because of all the involvement they have with membership.” u
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“I got there early to have someone review my résumé, and the person who reviewed [it] was Colette,” he said. “It was about four pages long, and she looked at me like ‘What are you doing?’”
Want a mentor partnership like Anne Hagen, CPA (left), and Lauren Soles, CPA? Check out the tips on page 26!
STARTING EARLY For Soles, that connection with Hagen came when she was already established in her career. Other VSCPA mentees found their mentors earlier in the process. Aaron Rawlings is a senior auditor at Kearney & Co. in Alexandria. But when he first connected with mentor Colette Wilson, CPA, he was fresh off graduating from Northern Virginia Community College (NOVA) and looking to lock down an internship. (He would land two, first interning at RyanSharkey in Reston, then at Kearney before being offered a full-time position.) Rawlings, 29, first met Wilson, then a partner at the Alexandria firm of Cotton & Company, at the VSCPA’s Leaders’ Institute for college students in 2011. Set to enter George Mason University in the fall, he knew he wanted to major in accounting, but wasn’t really sure what steps he needed to take outside of declaring his major. He connected with Wilson at the Recruiter in Residence session, where she took a look at his résumé, which … let’s just say it needed some work.
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Later in the event, a speaker said that all of the students should be looking to find a mentor. Rawlings thought of Wilson immediately. He didn’t know a lot about her, but he had come away from their first meeting knowing she was someone who knew a lot about the profession. “I was appreciative of the time that she took. It was something she volunteered to do, but she didn’t have to give me that information,” he said. “She could have just looked at me and that could be it. Immediately, that was something that stuck with me, along with her presence. She was very confident and together. I could tell she knew the ins and outs of the profession. You could see by the way she carried herself.” “It was mentee-driven and he had something to base it on,” Wilson said. “He had talked to me personally, he had gotten advice from me, and then he got advice from somebody completely different who said ‘You should seek somebody out.’” Elizabeth Owusuwaa, 25, had a similar experience at the Leaders’ Institute in 2016. That was where the Old Dominion University (ODU) student met her mentor, Niki White, CPA, finance director at Strategic Risk Associates in Glen Allen. While they later formalized their arrangement using MentorMatch, that event — where White had spoken on a panel — was where they first encountered each other. “What impressed me was more that she came up to me after the fact,” White said at the time. “What we talked about in that short time by the water cooler was that the people who put themselves
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out there are the people who get the opportunities.” “I’ve done a lot of interviewing in my career,” Hagen said. “When you have to work really hard in the interview and you’re the person who’s interviewing, it sends a message. You want the interviewee to really take the lead. In this case, I found Lauren to be really enthused and engaged in the process, and that made me feel that it was worthwhile.”
TAKING INITIATIVE What Wilson and White both said is indicative of how a young professional can start a successful mentor-mentee relationship. The fact that the mentee is taking charge often impresses a potential mentor — and it’s how the relationship is supposed to work. The mentee sets the tone and schedule for the relationship, drives the conversation (after all, it’s his or her career that’s being helped) and then chooses how to take the advice he or she is given. “Niki's guidance was like the bystander during a marathon who gives you an amazing bottle of water to quench your thirst and refuel you for the rest of the journey,” said Owusuwaa, who earned her master’s degree in accounting from ODU in December, started as an advisory associate at Grant Thornton in Alexandria in February and is studying for the CPA Exam. “We met at a pivotal time in my life and career, and the minimal but extremely valuable conversations shed light to the paths available to me. “Niki understood how to inform me without trying to persuade me. She simply shared her experience and expertise and left it up for me to make the best decisions.” While mentors can come from one’s own organization, it’s better to look
professional development
elsewhere to get advice untainted by a mentor’s responsibility to his or her employer. That’s what makes these relationships work so well. “It wasn’t forced, it wasn’t mandatory, it wasn’t required. I had no authority over him,” Wilson said. “He didn’t work for me. It was a very free environment — I could say whatever I want because I might never see him again. He could take it or leave it, because he chose me out of the blue, and if it didn’t work, he could choose somebody else. Those are the best relationships.” That doesn’t mean it’s easy to start. It can be intimidating for a student or young professional to approach a more accomplished member of their profession and ask for advice. But doing so can yield great dividends, and young professionals looking for advice would do well to remember that all their potential mentors started out somewhere. “Most people are very willing to take a few minutes to meet someone and share a little bit about how they made it in the career they’re in,” Hagen said. “It’s a compliment to them, frankly.” What’s more, it can be a benefit to the mentor. Helping others can help mentors “pay it forward,” so to speak, helping others the way others once helped them. And taking an active role in guiding younger professionals can help you build and display leadership qualities.
THE QUALITIES OF A GOOD MENTOR Each mentee needs something specific from a mentor, requiring a specific set of personality traits. Some mentees need more, shall we say, tough love than others. Soles said Hagen is a good combination of encouraging and challenging, but says she looks for different things out of her different mentors.
“Do you pick the mentor who’s going to challenge you — ‘Do you really think that’s a good idea? I’m not sure if you want to do that’ — or do you pick the mentor who’s more agreeable, more encouraging?” Soles asked. Wilson, meanwhile, prides herself on her honesty and sincerity. That doesn’t mean she’s not empathetic when Rawlings has a career setback, but she makes sure to let him know what he needs to be doing. “If there was something that didn’t go my way, she would be there to let me have my moment of, ‘Man, it shouldn’t have gone down like that,’ and let me lick my wounds, and right after that, it would be, ‘This is why it didn’t happen, and if you do it this way, you won’t have to go through that again,’” Rawlings said. “My goal is to give him good advice for him to succeed, not to be his friend and say, ‘Hey, I’m sure the manager was wrong,’” Wilson said. “I’ve told him, ‘No, you handled that situation incorrectly. Here’s how things usually work and here’s how you should be looking at it.’” It helps that she’d had similar experiences to him in her own life and career, and that’s another aspect of some, but not all, successful mentorships. Just as Soles and Hagen are both outgoing women with similar upbringings and varieties of professional experiences, Rawlings and Wilson are both African-Americans in a profession that is challenged with inclusion of minorities. “In Aaron’s coming into the corporate world and working in an industry where we, as minorities, are definitely in the minority, different situations can occur,” Wilson said. “’How do I handle this? How do I show myself correctly? How do I perceive this?’ When certain situations come up for African-Americans in a corporate setting, you often wonder if it’s you or if it’s just the situation in general.
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“Aaron and I had those more in-depth conversations that we could relate to, how it is to be a minority in this corporate environment, and more importantly, whether or not it plays a part.”
PAYING IT FORWARD A side effect of the advice Soles and Rawlings received from their mentors is that they’re now passing it on themselves. Soles has a couple of younger colleagues who pick her brain over coffee. Rawlings is now confident enough in his own résumédrafting abilities that he’s helped others get jobs by providing the kind of editing and tough love he once needed himself. All three of the relationships detailed in this article are ongoing to this day. Soles and Hagen both live in the Richmond area and Rawlings and Wilson both live in Northern Virginia, so while schedules are busy, it’s relatively easy to catch up. Owusuwaa and White don’t live in the same area, but still find time to catch up on social media. While the mentorships may not be as formal as they once were, all three pairs still find it valuable to catch up on a regular basis. After all, if you’ve helped improve someone as a professional with your advice, chances are they’re going to be useful to you, too. “It’s not as formal, but now we run into each other so many times,” Hagen said. “The more time we spend with each other, the more we end up together.” n
Chip Knighton is communications manager at the VSCPA, as well as contributing editor at Disclosures magazine.
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cknighton@vscpa.com connect.vscpa.com/ChipKnighton @ChipKnighton
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April is Financial Literacy Month It’s time to celebrate financial literacy in Virginia! The VSCPA and citizens from across Virginia will focus on financial literacy throughout the month of April during the annual Virginia Financial Literacy Month, as proclaimed by Virginia Gov. Ralph Northam. The award-winning Financial Fitness initiative is just one of the ways the VSCPA helps Virginia taxpayers increase their financial acumen. Visit vscpa.com/FinancialFitness for our financial literacy resources Through the Ask a CPA Email Program, Virginia CPAs will answer questions from the public via emails submitted
at FinancialFitness.org. Free advice is available from experts on financial planning, tax planning, military taxes and disaster recovery. Members from across the state are encouraged to participate. In addition, the VSCPA will conduct media relations around the state, as well as tie in Financial Fitness topics to the @VSCPANews and @FinancialFit Twitter feeds. To volunteer for the Ask a CPA Email Program, contact VSCPA Public Affairs & Communications Director David Bass at dbass@vscpa.com or (804) 612-9440.
LAST ISSUE FOR DISCLOSURES SELFASSESSMENT After careful deliberation, the VSCPA recently decided to discontinue the 1-credit Disclosures self-assessment that runs with each issue of the magazine. The VSCPA is still proud to offer a wide-ranging suite of lowcost and free CPE, with 20+ hours available for free during the 2019– 2020 membership year. Visit vscpa.com/FreeCPE to take advantage.
THE VSCPA’S NEWEST VIRGINIA CPA LICENSEES Caleb Banks, CPA, Glen Allen Amanda Crockett, CPA, Williamsburg Erica Doolittle, CPA, Lynchburg Hailey Fox, CPA, Evington Brandy Frost, CPA, Midlothian Soon Kwon, CPA, McLean Gabrielle Miller, CPA, Washington Kimberly Relue, CPA, Moneta Anne Richards, CPA, Alexandria William Siemers, CPA, North Bethesda, Md. Christie Skillington, CPA, Arlington Kirstyn St. Pierre, CPA, Newport News Tara Treat, CPA, Newport News William Watterson, CPA, Midlothian List from November and December. Compiled Feb. 4, 2019.
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vscpa news
Congratulations to the following members! Patricia Drolet, CPA, has been elected chair of the board at Councilor, Buchanan & Mitchell in Bethesda, Md. Sue Huber, CPA, and Joe Miner, CPA, have joined Updegrove, McDaniel, McMullen & Chiccehitto in Leesburg as senior accountants. Sheila Lewis, CPA, and Matthew Stiefvater, CPA, have been promoted to associate principal at Goldklang Group CPAs in Reston. Susan Pittman, CPA, was promoted to executive vice president at Virginia Commonwealth Bank in Richmond. Edward Yoder, CPA, was named partner at PBMares in Harrisonburg. Top: Chris Budd, CPA, Karen Crosswhite, CPA. Bottom: Kellie Fedkenheuer, CPA, Brendon Maturey.
NEW HIRES Mitchell Wiggins in Richmond has hired Chris Budd, CPA, as a tax manager and Brendon Maturey as a staff accountant. Jennifer Theimer, CPA, has joined Brown Edwards in Roanoke as a director in the firm’s financial institutions practice.
PROMOTIONS Desiree Bryan, CPA, was named partner at Meadows, Urquhart, Acree & Cook in Richmond. Cotton & Co. in Alexandria has elected four new partners: Jesse Carpenter, CPA, Kellie Fedkenheuer, CPA, Megan Mesko, CPA, and Melissa Sizemore, CPA.
APPOINTMENTS & AWARDS Karen Crosswhite, CPA, partner at BAS Accounting Services in Ashburn, was honored by George Mason University as the first recipient of the university’s Shrivastava GovCon Scholarship Alex Eccard, CPA, partner at Yount, Hyde & Barbour in Richmond, was named to the board of directors at the Virginia Home for Boys and Girls. David McCullough, CPA, CFO at LeaseAccelerator Inc. in Great Falls, was named a winner in the 2018 Finance Monthly CFO Awards. Stephanie Saunders, CPA, shareholder at Saunders & Saunders in Virginia Beach, was re-appointed as a director-at-large on the National Association of State Boards of Accountancy (NASBA) Board of Directors. Mark Watts, CPA, partner at CST Group, CPAs, in Reston, was appointed as treasurer of Cornerstones in Reston.
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Hillary West, CPA, senior manager at CST Group, CPAs, in Reston, was appointed to the board of Food for Others in Fairfax.
FIRM NEWS Councilor, Buchanan and Mitchell has opened a new office at 1150 18th St. NW in Washington, D.C. Deloitte and Ernst & Young were named to Glassdoor’s 2019 Best Places to Work — Employee’s Choice list at No. 80 and No. 95, respectively.
MERGERS & ACQUISITIONS Roanoke firm Anderson & Reed has added Holloway & Associates, also of Roanoke, effective Jan. 1, 2019. Richmond firm Cherry Bekaert has acquired Flieller, Kruger & Skelton in Austin, Texas.
PHILANTHROPY Richmond firm Mitchell Wiggins donated a scoreboard to United Methodist Family Services’ (UMFS) Charterhouse School gym in honor of former partner David Will, CPA, a longtime UMFS supporter and avid basketball player who died in September 2018.
We want to hear from you! The VSCPA prints news of members’ awards, appointments and promotions as well as new hire and job change announcements. Email disclosures@vscpa.com if you have exciting news to share.
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VSCPA Annual Meeting and 2019–2020 Board of Directors The VSCPA’s Annual Meeting will be held May 16, 2019, at 11:15 a.m. at the Delta Hotels Richmond Downtown. During the meeting, the Nominations Committee will present the following nominated members for election as 2019–2020 officers and directors. Chair: Gary Thomson, CPA, Dixon Hughes Goodman, Richmond
$50,000 in scholarships available The VSCPA Educational Foundation has several scholarships available that range from $1,000 to $5,000. If you know a student who demonstrates academic excellence or financial need, encourage them to apply! All applicants must be members of the VSCPA. Scholarship applications must be submitted by April 1, 2019, at vscpa.com/scholarships-available. And if you haven’t donated to the Educational Foundation this year, consider donating online at vscpa.com/foundation. Your donation helps us offer even more scholarships to Virginia accounting students.
Chair-Elect: Henry Davis III, CPA, Virginia Commonwealth University, Richmond Vice Chairs: Melinda N. Coley, CPA, MBA, Anthem, Inc., Virginia Beach George Forsythe, CPA, WellsColeman, Richmond Anne Hagen, CPA, Masonic Home of Virginia, Henrico Krystal McCants, CPA, CST Group, CPAs, Reston At-Large Directors: George G. Crowell, CPA, CITP, Harris, Hardy & Johnstone, PC, Richmond Hope F. Cupit, CPA, SERCAP, Roanoke Melisa F. Galasso, CPA, CGMA, Galasso Learning Solutions, Charlotte, N.C. Nammy K. Lee, CPA, Ph.D., University of Virginia, Falls Church Jennifer S. Lehman, CPA, CGMA, Hantzmon Wiebel LLP, Charlottesville, Gabriele Lingenfelter, CPA, MBA, Christopher Newport University, Newport News Jason H. Navon, CPA, Rossen Landscape, Sterling Aaron L. Peters, CPA, Peters & Associates, Falls Church Charles M. Valadez, CPA, CGMA, CISA, CIA, TechnoServe, Inc., Washington, DC Christine B. Williamson, CPA, CohnReznick LLP, Tysons
A member was incorrectly identified in the VSCPA News section of the January/February 2019 issue of Disclosures on page 30. Member Gary Wallace, CPA, was located in the bottom of the second column. We regret the error.
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March 4: Executive Assistant Julie Chamberlain, 3 years March 9: Marketing Manager Talley King, 8 years March 12: Member Services & Operations Director Richard Gordon, 7 years March 14: Event Specialist Kate Eacho, 3 years; Finance Specialist Catherine Meehan, 8 years; and Student & Member Engagement Specialist Lauren Simonetti, 3 years April 1: Vice President, Advocacy Emily Walker, CAE, 16 years
THE VSCPA MOURNS... Robert Buchanan, CPA, a VSCPA Life member from Richmond. A graduate of the University of Virginia, he retired as a senior vice president at Wheat First Securities and was an active member of Richmond’s First Baptist Church.
Bill Axselle, a former lawyer, state legislator and lobbyist who
Correction
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assisted the VSCPA with its advocacy efforts for years. A partner at Williams Mullen in Richmond, he served as the VSCPA’s legislative counsel for several years until his retirement in 2017. A Democrat, he represented Henrico County in the Virginia House of Delegates from 1974–1990, at which point he joined Williams Mullen, where he grew the firm’s government relations group into one of the state’s most effective lobbying practices.
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i am the vscpa
Two minutes with Desiree Bryan, CPA
R
ecently named partner, Desiree Bryan, CPA, has been with Meadows, Urquhart, Acree & Cook for more than 10 years, and she focuses her practice on high net worth and self-employed individuals. She obtained her bachelor’s degree in accounting from Virginia Commonwealth University and serves on the VSCPA’s Tax Advisory Committee. I am passionate about… Finding meaningful and valuable solutions for my clients. My favorite specialty is partnering with clients’ outside investment and financial advisors to provide thorough, tax-efficient and comprehensive retirement or life planning solutions to clients. At the end of those projects, both the clients and the financial professionals respect and value the advice given, and that drives the passion I have for the services I provide. People don’t know this, but… I call post-April 15 the “postbusy season blues.” Every year, CPAs cannot wait for the tax deadlines to pass, but for those of us who stay successful in public accounting, we clearly thrive under our deadline pressures. As happy as I am to complete a deadline, I feel that the few weeks following April 15 are always a challenge to stay focused, and that’s why I suffer from the “post-busy season blues.” My advice to CPAs is… Find a niche you love to work in. If you can create value for yourself by providing value to others, your job will turn into a career.
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I never leave home without… My purpose. I am driven to work hard and be successful so that I can be a role model for my twin daughters. Last year, Kelli Meadows, one of our founding partners, looked at me and said, “I want you to be a partner. I want your daughters to be proud of you the way that mine are proud of me.” That statement hit me hard and solidified my desire to push for the top. I want to teach and show my girls that effort and strong will can drive opportunities to excel. I wish CPAs knew… To be truly successful, you need to care about the work you do. I always tell young staff that we can teach you all the technical skills you need to do your job, but we cannot teach you to care. That is something that is already a part of you, and when we find talented people who care about the work they perform, we know we have added a valuable team member. I am a CPA because… Accounting came to mind first when I chose to get a business degree at VCU. I started at VCU with a desire to be a photographer. My parents advised me to secure a business degree with the thought that as a photographer, I would likely run my own business. Accounting led me to tax internships at KPMG, where I discovered an aptitude and fondness for working in high net worth individual taxation. The CPA license became a necessary step in the path up. n
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