AZ CPA Jan./Feb 2021

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January/February 2021

Meet the ASCPA’s New President & CEO Oliver Yandle

The Arizona Society of Certified Public Accountants y


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President & CEO Oliver Yandle Editor Patricia (Gannon) Rife Advertising

Heidi Frei

Board of Directors Chair Chair-Elect

Ginny DeSanto Tom Duensing Secretary/Treasurer Rachael Crump Directors Keith Cowan Kelly Damron Jessica Estrada Tabitha Fox David Gephart Ross Grainger Jessica Iennarella Andrea Levy Anthony Lorenzo James McGettigan Lauren Murro Gidget Schutte Immediate Past Chair Jared Van Arsdale AICPA Council Members Rob Dubberly

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AZ CPA is published by the Arizona Society of Certified Public Accountants (ASCPA) to provide information, news and trends to the accounting profession. It is distributed six times a year as a regular service to ASCPA members. The ASCPA, its members, board of directors and administrative staff assume no responsibility for advertisements herein. The ASCPA and the above people also assume no liability for business decisions made by readers in reference to statements and/or claims in articles or advertisements within this publication. Opinions expressed by contributors are not necessarily those of the ASCPA.

Arizona Society of CPAs 4801 E. Washington St., Suite 180 Phoenix, AZ 85034-2040 4


Telephone (602) 252-4144 AZ Toll-Free (888) 237-0700

Volume 37 Number 1


January/February 2021




15 Columns & Departments Chair’s Message by Virginia E. DeSanto, CPA


Member News


Board Highlights


Classifieds 26 Quick Quiz


Meet ASCPA President & CEO Oliver Yandle, JD, CAE Find out more about Yandle’s leadership style and background.

GASB Lease Standard, Are You Ready? Hemmerle asks questions about the new lease standard and why the Governmental Accounting Conference might be the place to get anwers. by Brian Joseph Hemmerle, CPA

Budding Growth on the Horizon ASCPA’s Cannabis Special Interest Section Update

Arizona recently became the 13th state to legalize recreational marijuana. by Josephine Giordano, CPA


The Value of Data Analytics Your business is awash in data that, if mined properly, can help you grow and profit. by Kevin C. Bach, CPA,

Five Technology Resolutions for 23 2021 Employees working at home and other changes factor into this year’s resolutions, by Thomas G. Stephens, Jr., CPA 4801 E. Washington St., Suite 180 Phoenix, Arizona 85034-2040



ASCPA Chair’s Message

Seeking Inspiration … I never thought that this accountant would be in a spot to have writer’s block, but 2020 has blocked a lot of things. So I’m still writing about the world challenges around us.

Virginia E. DeSanto, CPA, CGMA Chair, Arizona Society of CPAs CFO & Treasurer, ASU Enterprise Partners

When you’re looking for inspiration, it seems that the saying “form follows function” might apply. If you take care of yourself and your loved ones, everything will eventually follow and will fall in line.

I think we are all looking forward to saying goodbye to 2020, at least I am. As we move into 2021, I find myself hopeful ... hopeful that we will have a working vaccine easily distributable, hopeful that we can return to a more recognizable world and hopeful that we are able to embrace the changes that we had to make and use them to better our world. However, more than that, I’m trying to find inspiration to take into the new year. I am writing this column just after Thanksgiving, which according to at least one survey was the most stressful holiday on record. In the midst of the pandemic, social isolation, and fear, we attempt to gather with our loved ones ... but even that is restricted if your family is large or far apart. In addition, we’re all still trying to figure out how to get our PPP loans forgiven and what impact that will have on our taxes and even in which tax year it will happen. We’re worried about the economy, the impact of the pandemic on education and on our children, and the long-term effects on our jobs and businesses. Inspiration is defined in two ways. • The process of being mentally stimulated to do or feel something, especially to do something creative or new • The drawing in of breath — inhalation When you’re looking for inspiration, it seems that the saying “form follows function” might apply. If you take care of yourself and your loved ones, everything will eventually follow and will fall in line. I believe I will take that into 2021 as my inspiration ... and then take a big breath and try something new. By the time you’re reading this, I hope we will have a better understanding of workable vaccines and deployment expectations. Perhaps by Mother’s Day, we can celebrate with everybody instead of the way Thanksgiving turned out. I’ll leave you with these two quotes.

“Life is 10 percent of what happens to me and 90 percent of how I react to it.” – Charles Swindoll

“A person who never made a mistake, never tried anything new.” – Albert Einstein Stay safe and be well. l




Member News Keegan Linscott & Associates, PC, announced that Sean Tanner, CPA, CFE has joined the firm as a Principal in the Consulting Services department. Eric Majchrzak of BeachFleischman was appointed CEO-elect effective January 1, 2022. The transition occurs over the next 12 months after which Marc Fleischman (the past CEO) and David Cohen, president, will both retain leadership roles on the firm’s board of directors and serve the firm’s clients and community. Cohen continues in his role as president with Majchrzak as CEO.

Nominations for 2021 Board of Directors The Nominating Committee of the Arizona Society of Certified Public Accountants, in accordance with Article

Highlights of Board of Directors’ October Meeting Among other actions at its October 28, 2020 meeting, the ASCPA Board of Directors reviewed the following:

Welcome & Introductions Ginny DeSanto asked each board member to give a brief introduction for Oliver Yandle, the Society’s new President & CEO. Oliver introduced himself and also gave an overview from his conversations with Board members, staff and the AICPA Fall Council meetings, which included information on revenue streams, the pipeline and challenges with CPE competition.

Consent Agenda The consent agenda, which included the board minutes, financial statements, a strategic measurement change request and a Foundation bylaws change, was approved.

Report From Life & Honorary Selection Committee Jared Van Arsdale chaired the committee which included Rufus Glasper, Cindie Hubiak, Mark Landy, Bruce Nordstrom and Peggy Ullmann. Anita Baker was approved as life member by the board.

VI, Section 2, of the Bylaws, submits its nominees to serve on the Board of Directors for the term beginning May 1, 2021. See the nomination letter at www.

Dot CPA (.cpa) Update Heidi Frei gave an update on AICPA’s Dot.CPA (.cpa) initiative, which is a new secure domain exclusively available to registered CPA firms. She indicated the Society has secured and and that both new domains will point to the Society’s current website (

Auditor Report The 2019-2020 financial report was given by the independent firm of CBIZ & Mayer Hoffman McCann. An unqualified audit report was issued.

Advocacy Update John Baumer provided on update on the Society’s advocacy work, as well as an overview of the upcoming political elections and current political climate.

Strategic Plan Update Oliver provided an update on the ASCPA’s strategic measurements.

Save the Date! ASCPA Annual Meeting May 13, 2021

A Day In The Life Tom Duensing, Tabitha Fox and Jared Van Arsdale each shared a view of the challenges and joys they experience in their life and job.

Other Business The board held an executive session. If you have questions or would like additional information, please contact Oliver Yandle at (602) 324-0593; AZ toll free at (888) 237-0700, ext. 203; or



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Meet ASCPA President & CEO Oliver Yandle, JD, CAE What excites you most about being the new leader of the ASCPA?

Oliver Yandle, JD, CAE, became the new President & CEO of the ASCPA on Oct. 12. Yandle previously served as Executive Director of the Association of Legal Administrators (ALA), the largest international organization providing support to people in the legal management profession. He has held CEO-level positions for a number of other professional service and trade associations. He is active in both the American Society of Association Executives (ASAE) where he holds the Certified Association Executive designation, and the Association Forum of Chicagoland, where he served as Chair of the Board of Directors. He has been recognized by Crain’s Chicago Business as a member of the first class of Chicago’s Notable LGBTQ Executives. Yandle is a native of Louisiana and holds a BA in journalism from Loyola University of the South in New Orleans, and a JD from Washington College of Law at The American University in Washington, D.C.

I am really excited to join the team because I get a chance to work with professionals who are passionate about their profession and who are looking to advance their careers. I have spent most of my professional life in association management, and working with volunteers is something that really energizes me. I also think this is a growth opportunity for me personally. I am moving outside of the legal space, which is where I spent most of my association management leadership career. But I think it is an opportunity for the association, as well. I have had a chance to work with organizations that have had chapter or state-based organizations as part of it, but I have never worked for the state-based organizations before, so this is a really fun opportunity to see it from the other side.

When you look back over your life, what has been your greatest success? In terms of greatest professional success, I would say leading the Association of Legal Administrators through a pretty significant organizational transformation. There was a need for a major overhaul of staff, organizational structure, programs and services. It was a very daunting feat. We developed a detailed strategic plan and had great support from the leadership of the organization. I think we were successful in achieving some significant goals through that whole transformation. In terms of my personal success, I think it is probably my relationship with Jeff, my marriage. It is always hard work, but it is also a source of strength.

What three words best describe you? Well, the first thing that came to mind was bald. But then I thought, that is probably not what you were going for! These kinds of questions are sometimes hard for me to answer, so I asked my husband, Jeff, what three words he would say. He didn’t say handsome. He didn’t say brilliant. He didn’t say talented. But he did say loyal, compassionate and sincere. So, I thought those were three pretty good ones.



What have you learned about CPAs so far? I know they are incredibly busy professionals. With all the changes that have taken place with the pandemic and challenges that businesses are facing, they are playing a key role in helping their clients and organizations manage through these turbulent times. I have also learned that in an age where there is a sense of lack of trust in institutions, and questioning facts and truth, CPAs are still seen as trusted advisors, as people who can be relied upon to provide wise counsel and objective facts. I think it is important, especially now, to have people like that in the community to help support businesses and help guide people through these unprecedented times.

You are a Certified Association Executive (CAE) and very active in the association community. What trends are you seeing in associations that are important for the ASCPA to address? A lot of the trends affecting all associations are ones that are very relevant to the ASCPA. Today, perhaps one of the most significant trends is the impact of technology. Our members are experiencing a lot of challenges in terms of technology developments and how that is changing the nature of the work they do. Technology is having a huge impact on the association world, both in terms of the ability to connect and leverage technology for the benefit of members but also the challenges that it creates in terms of providing alternative platforms that people can connect with to build relationships, to network and to get education. It is good for the association, but it also creates challenges, as well. Then there are things like artificial intelligence and data analytics, the volume of data that is available now that can be insightful in understanding members better and helping them to



Get to Know the New President & CEO Oliver Yandle, JD, CAE – Podcast Hear more about Yandle’s vast experience in the association world, his leadership style, what he enjoys doing outside work and why he is excited to lead the ASCPA in our latest podcast. address their needs. That also brings the responsibility of managing all of that information and trying to get a handle on how to make the most effective use of the data, how to protect that data, and how to make sure that you are leveraging it appropriately. Another challenge impacting associations, in particular, is demographic changes. Currently, there are as many as five generations in the workforce, with very different needs and very different approaches to how they engage with work. These generations have very different perspectives on the value of education and networking. It is important to find ways to be able to deliver value and relevance to those groups. I think one of the real issues facing the association community is how to deliver that to such a broad and varied audience.

What do you like to do when you are not working? One of the things I like most is cooking and entertaining. Jeff and I really love having friends and family over for elaborate meals, New Year’s Eve parties, the whole nine yards. This pandemic has definitely put a crimp in a lot of that, especially Thanksgiving, which is our favorite holiday of the year. I like binge watching TV (not reality stuff), good, scripted shows. I like being on the water, being outside enjoying the sun and definitely enjoying the beach or the pool.

You talked about your love of cooking and entertaining. What are some lessons you

have learned in the kitchen that carry forward into work? Well, I think one of the most important things is to have a plan. Make your grocery list, make sure you have the recipe in front of you and that you are following the steps. That is definitely one thing that I think is an important takeaway. There is also a phrase called “mise en place,” it is a French phrase that means things in place. It is basically an approach to cooking where you have all of your ingredients measured, all of your shopping is done, everything is organized in a way so that when you actually start with the recipe, everything is there where you need it, and you can proceed through it smoothly. I think that is another good takeaway, having a plan and having things organized, so that you can execute effectively. One thing that my mom always taught me was that you can always add seasoning, but you can almost never take it away. So, do things gradually, so that you are not going too crazy in the beginning. And one other thing is that taking risks can be delicious, too. Experimentation with recipes can be fun, and it can turn out to be quite tasty.

Do you have any closing thoughts you would like to share? I am really excited to be here, especially to work with such a great team and to meet such enthusiastic members. And I have to say that the weather is not too bad either. l

GASB Lease Standard, Are You Ready? by Brian Joseph Hemmerle, CPA, CFE

You may be thinking, “I have plenty of time to implement the new GASB Lease Standard, especially now that GASB Statement 95 postponed the effective date to periods beginning after June 15, 2021. I don’t need to worry about this until I issue my June 30, 2022 CAFR, right?” It is true the implementation has been postponed; however, the accounting for this lease standard, and all new leases you enter into as a government, will be greatly affected starting July 1, 2021. That’s only six months away!



Governmental Accounting Virtual Conference Feb. 4 & 5, 2021 February 4, 2021 — 8 – 11:30 a.m. February 5, 2021 — 8 a.m. – 4:45 p.m. Now get 12 hours of CPE credit for the price of 8! Join us for a half day Thursday morning Feb. 4 and a full day Friday Feb. 5 to hear from your favorite local and national speakers including, David Cotton, Marianne Jennings and David Bean who will give you new insights and updates on developments in governmental accounting and auditing. This year’s conference will be available by webcast only.

Conference Agenda The Ethical Issues We Miss, Rationalize Away, or Fail to Report Marianne Jennings, Arizona State University GASB Update David Bean, Governmental Accounting Standards Board Performance Auditing Made Easy David Cotton, CPA (in VA & NC), CFE, CGFM, Cotton & Company, LLP Implementing GASB 87 — Leases Michael Stelpstra, Arizona Auditor General’s Office Defeating the Hackers — The Top Five Things to Stop Them in Their Tracks Michael Cocanower, IT Synergy

Single Audit Update Brittney Williams, Heinfeld Meech & Co., P.C. Data Analytics for Your Government Organization Kevin Bach, Henry+Horne Benford’s Law— A Valuable Audit Tool David Cotton, Cotton & Company, LLP

Thank You to Our Sponsors Platinum Sponsor

Economic Changes and What It All Means Jim Rounds, Rounds Consulting Group, Inc.

Gold Sponsors Heinfeld Meech & Co., P.C. The Pun Group, LLP CLA (CliftonLarsonAllen) REDW LLC

GASB - Deep Dive David Bean, Governmental Accounting Standards Board

Register at:



Lucky for you, the ASCPA has an upcoming Government Accounting Virtual Conference in February 2021 with a very knowledgeable speaker, Michael Stelpstra, CPA, from the Arizona Auditor General’s Office speaking for 60 minutes on the GASB lease standard. Stelpstra works as a technical manager for the AG’s office, and he is a wealth of knowledge. If you have never heard him speak at a conference in the past, you are missing out. His knowledge of GASB, Uniform Guidance and all things governmental accounting is extensive, and he has generously agreed to speak with us regarding the all-important lease standard that is rapidly approaching. Why is it important to hear another lease standard presentation? The implementation of this standard will most likely prove to be more involved then most GASB standards of the past. GASB has redefined what a lease is, causing the inclusion of contracts and agreements that have never been considered a lease to fall under this new definition. The accounting for this new standard is introducing concepts like “right-to-use assets” similar to that of capital assets. It will impact nearly all types of governments. If you haven’t already started inventorying your potential leases for implementation, you will be well served in attending this presentation. Some believe they don’t have any material leases to worry about; however, GASB’s implementation guide for leases makes it clear, that copier lease you keep referring to, isn’t the only contract you should be considering. Just like a list of trivial receivables, where no one receivable is material, you still record and report the sum of all your receivables as it often amounts to a very material line item on your financial statements. This standard has provisions that will both scope out some contracts and require you to record others. The next six months is the perfect time to begin collecting all your contracts that have anything to do with a tangible asset and determine if they meet the definition of a lease by way of inventorying each agreement.

2021 Arizona Tax Guide Order the only comprehensive guide on Arizona taxes. Authors: Pat Derdenger, Steve Rodis and Ed Zollars New in the 2021 Arizona Tax Guide: • Details of Arizona law changes to reflect conformity with changes made in the SECURE Act • MRRA changes to the alteration limitations and exclusion of contractors not required to be licensed by the Registrar of Contractors from the prime contracting classification • Option to bypass OAH and appeal directly to the state board of tax appeals or the tax court • Required registration with the DOR for online lodging marketplaces The Arizona Tax Guide includes the following guides: • The Arizona Income Tax Guide is a comprehensive reference that highlights the differences between Arizona and Federal income tax law and provides references to the Arizona Revised Statutes for a more in-depth analysis. It highlights the differences between individual, corporate, partnership and trust taxes, includes tax tables, and is arranged in a way that facilitates research on any topic. • The Arizona Sales and Use Tax Guide is a resource for anyone preparing or filing city sales and use tax returns. The guide details the various sales tax classifications, exemptions, deductions and rates as well as compliance, audits, refund claims and administrative appeals. • The Arizona Personal Property Tax Guide provides an overview of Arizona’s personal property tax system, including exemptions, the classification structure and assessment rates, reporting, valuation and appeals. • The Arizona Unclaimed Property Guide explains what unclaimed property is, reporting requirements for holders of unclaimed property, how owners of unclaimed property can claim their property and audits.


ax Guide Arizona T Guide Income Tax 2021 Arizona & Use Tax Guide Sales de 2021 Arizona al Property Tax Gui Person ty Guide 2021 Arizona Unclaimed Proper me Set 4-Volu 2021 Arizona ger, Esq. Pat Derden is, CPA Rod Stephen J. lars, CPA Zol Edward K.

na Society by the Arizo Published Workshop Phoenix Tax

of CPAs

Spiral-Bound Book:

r Members of ASCPA,

Phoenix Tax Workshop, State Bar of Arizona or Enrolled Agents: $95

r Nonmembers: $115 Electronic PDF:

r Members of ASCPA,

Phoenix Tax Workshop, State Bar of Arizona or Enrolled Agents: $79

r Nonmembers: $99 Guides will be available for delivery mid-January 2021.

Order online and learn more about the guides at

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It should also be noted that many governments have contracts that will make them the lessor under this new standard. Does your government operate an airport, golf course or recreational complex? Those are just a few examples of situations where you may have contracts that will define you as a lessor. Of course, the accounting for a lessor differs from that of a lessee in ways you will want to understand before you implement. Those deferred inflows and outflows you have for pensions, other post-employment benefits and debt refundings will now have a new companion on your financial statements. Think you may be able to successfully scope out your leases by making them all short term? Think again. GASB thought of that, and they have made it more challenging then you think to scope out a short-term lease. For instance, the implementation guide gives an example of a six-month lease with the option to extend for another

12 months, but the government is not reasonably certain they will exercise that option. Many people might argue this lease is scoped out of the lease standard, but according to question 4.18 in the lease implementation guide, you have to include leases with a maximum possible term of greater than 12 months, including options to extend regardless of the probability of the option being exercised. In that example you would record a six-month lease! Think you can just sign a bunch of one-year leases in a row for the same asset? Think again. Question 4.17 and 4.20 of the lease implementation guide makes it clear you have to consider contract combinations that might require you to record the lease as one contract over many years. What about leases with options to extend that aren’t negotiated until the extension occurs? I couldn’t possibly record that extension without knowing the terms, right? Wrong! Question 4.24 of the implementation guide gives an

example where you would be required to estimate the terms and still record the extension period for that lease. Maybe you have land that is rented to a farmer and you think “farming is a biological asset so that contract is scoped out of the standard.” Think again. Using question 4.11 of the implementation guide, the crop is indeed a biological asset, but the lease is for the land, not the crop, and the land is what is being rented to the farmer; therefore, you have a lessor situation. GASB even has a question we see a lot now with COVID-19 school closures, where schools give students computers or tablets for remote learning and allow those students to purchase the computer at the end of the year. Question 4.22 of the guide dives into this scenario and discusses the implications on the school having leased or purchased the computers themselves as defined in the standards. I’m just scratching the surface with these examples. The lease standard and the implementation guide that goes along with it, have far reaching implications for our governments, and if you think you are ready —think again. When this standard becomes effective, you will be happy you spent the time obtaining as much CPE as you can to understanding how it will impact you and your government. Register for the upcoming ASCPA Government Accounting Virtual Conference on February 4-5, 2021. l Brian Joseph Hemmerle CPA, CFE, is a partner at Henry+Horne specializing in audit and assurance services for governmental entities. Hemmerle is a member of the ACFE, AICPA, ASCPA, AGA, GFOA, GFOAz and AASBO, where he is often asked to present on highly technical issues affecting government audit and accounting. He can be reached at BrianH@



Budding Growth on the Horizon ASCPA’s Cannabis Special Interest Section Update By Josephine Giordano, CPA

It has certainly been an interesting 2020. The ASCPA’s Cannabis Special Interest Section, which kicked off its inaugural event earlier this year, was formed to bring education and information to Arizona CPAs to better serve clients while protecting the public in this burgeoning cannabis and hemp industry. As a result of Proposition 207 passing (Smart and Safe Arizona Act), Arizona became the 13th state to legalize recreational marijuana. Among other things, Proposition 207 included adoption of a Social Equity Ownership Program, which was designed to issue 26 licenses to entities whose owners are “from communities disproportionately impacted by the enforcement of previous marijuana laws.” The Arizona Department of Health Services (ADHS) will start accepting early applications beginning January 19, 2021 through March 9, 2021 for current medical marijuana (MMJ) dispensaries and the 26 new social equity businesses.1



Total Monthly Product Sold (lbs.) at Arizona MMJ Dispensaries

March April May June July August Sept. Oct.

17,094.94 16,531.12 18,038.08 17,431.69 18,847.16

According to Leafly Job Report, Arizona ranks fifth out of the top 10 states by cannabis-related jobs in 2019. A major job surge is anticipated in Arizona now that recreational cannabis is legalized.



18,516.79 18,178.52 19,465.35

According to projections by Marijuana Business Daily2, the Arizona recreational market could generate as much as $375 million to $400 million in its first year and $700 million to $760 million by 2024. According to the Business Insider, the cannabis industry is set for a wave of M&A activity as a result of five states, including Arizona, voting to approve recreational marijuana.3 ADHS’ latest MMJ report reveals that Arizona’s MMJ program is growing steadily and continues to be one of the largest medical marijuana markets in America. Arizona’s hemp industry is also one of the largest in the country. Arizona MMJ stores sold 165,722 pounds of product in 2019, a 36% increase from the 121,916 pounds sold in 2018. As of October 2020, 174,137 pounds of product were sold compared to 134,638 pounds sold year-to-date as of October 2019. Like many states, Arizona determined MMJ businesses were essential during COVID. Despite the challenges and distress faced by our economy, monthly product sales since March 2020 surpassed the record breaking results in March, with the exception of April, which experienced a slight 3.3% decline. The biggest elephant in the room is still the Internal Revenue Service’s application of Section 280E, which indicates that, “No deduction or credit shall be allowed for any amount paid

or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act), which is prohibited by Federal law or the law of any State in which such trade or business is conducted.” The IRS published new guidance and Frequently Asked Questions that are an important read for CPAs.4 In Arizona, contrary to federal restrictions, all ordinary and necessary expenses shall be subtracted from gross income.5 If the dual licensee (entity that holds both a nonprofit MMJ dispensary registration and a marijuana establishment license) elects to operate on a for-profit basis, they will not be required to submit financial statements or an audit report to ADHS for purposes of renewing its nonprofit registration.6 In 2019, it was estimated that Arizona had over 15,000 jobs that directly pertained to the MMJ industry.7 According the Leafly Job Report, Arizona ranks fifth out of the top 10 states by cannabis-related jobs in 2019. A major job surge is anticipated in Arizona now that recreational cannabis is legalized. In addition to the existing transaction privilege and use tax, recreational marijuana sales will be subject to a 16% excise tax which could be reduced

Recreational Marijuana Tax Revenue in Neighboring States State Year FY 2019 Marijuana Legalized Tax Revenues CA


$629.3 million

Lifetime Marijuana Tax Revenues through FY 2019 $1.03 billion

TAX: 15% excise tax to cannabis distributors that’s marked up by 80% to match the average market value; cultivation tax of $1.35, $2.87 or $9.65 per ounce WA


$395.5 million

$1.33 billion

TAX: 37% excise tax on all sales of marijuana products CO


$302.4 million

$1.21 billion

TAX: 15% excise tax on distributors; 15% sales tax on retailers OR


$102.1 million

$275.2 million

TAX: 17% retail tax on all sales of marijuana products NV


$99.2 million

$167.1 million

TAX: 15% excise tax on cultivators that is marked up to match the average market value; 10% excise tax on retailers AK


$22.1 million

$39 million

TAX: 5% sales tax on all cannabis sales in Anchorage; cultivation tax of $15-$50 per ounce

if a federal excise tax is implemented. The aggregate federal and state excise taxes cannot exceed 30%.8 Above is information related to some of our neighboring states. Oregon, for example, has experienced growth in state retail tax received of 17%, 24%, and 30% in the fiscal years ended June 30, 2018, 2019 and 2020, respectively (2017 was the first full year of the recreational program). The first three months of FY 2021 shows a 45% increase from the same period in FY 2020. Arizona’s expected growth in this industry, along with its continuous challenges, provides a multitude of opportunities for value-added CPA professional services. l

Josephine Giordano, CPA, ABV, CFE, CFF, CBA, ASA, CDBV, CIRA, CICA, CTP, is a director in the Financial Forensics and Business Valuation Group of BeachFleischman PC and chair of the ASCPA’s Cannabis Special Interest Section. Giordano has extensive experience as a financial professional, with a diversified background in internal audit, banking, tax, business valuation, fraud investigation and forensic accounting, bankruptcy, restructuring and turnaround, expert witness, court-appointed Receiverships, court-appointed Special Master and Compliance Monitor, and other litigation support services. She can be reached at or (602) 792-5981.

Endnotes 1. Initiative’s Chapter 28.2 – Section 36-2854 (d) p.6 of 17 2. November 3, 2020 3., November 13, 2020 4. 5. Initiative’s Article 10. Section 6 Section 43-108 p.16 of 17 6. Initiative’s Chapter 28.2 – 36-2858 Section E.2. p.11 of 17 7., August 11, 2020 8. Initiative’s Article 10. Section 425452 p.15 of 17



The Value of Data Analytics by Kevin C. Bach, CPA, CVA

Your business is awash in data that, if displayed and mined properly, can help you grow and profit. Make that data work for you. Through data analytics, you can better see trends and patterns to help your business improve performance and identify risks and red flags. In addition, building analytical models can allow you to forecast where your company is going, and help you create a plan to optimize and direct that growth. So, what is data analytics? Data analytics is defined as the science and art of discovering and analyzing patterns, identifying anomalies and extracting other useful information in data. It also encompasses identifying a question or problem and utilizing the data, both financial and non-financial, to determine an answer or solution. Practically speaking, data analytics is turning your run of the mill data collection into a plan for the future of your company. There are four main areas of data analytics: • Descriptive Analytics – What happened? • Diagnostic Analytics – Why did it happen? • Predictive Analytics – What will happen? • Prescriptive Analytics – What should be done?

Descriptive Analytics – What Happened? Descriptive analytics is the utilization of analytics to describe what happened. Generally, descriptive analytics entails the gathering of historical data/transactions



and using this data to answer questions about the past and provide context to historical activity. • What were the Company’s sales last month, last quarter, last year? • Who were the Company’s largest and most profitable customer last month, last quarter, last year? • Who were the Company’s largest vendors last month, last quarter, last year? One of the first steps in building an analytics platform is determining what questions the company’s management has. Descriptive analytics are usually the entry into analytics and ground level on development of data aggregation, future analytic projects and business intelligence. These initial questions provide the foundation for setting goals and determining key performance indicators (KPIs) by which the Company wants to evaluate its operations. Utilizing a dashboard or a series of graphs and charts, a Company can visually see the answers to What Happened?

Diagnostic Analytics – Why Did it Happen? Diagnostic analytics is the utilization of analytics to describe why it happened. Diagnostic analytics take the development of descriptive analytics a step further and is generating a root cause analysis for: • What caused the Company’s sales last month, last quarter, last year to increase or decrease? • Why were there changes in the Company’s largest customer? • Why were there changes in customer profitability? Diagnostic analytics generally look to: • Identify outliers and anomalies – Upon review of descriptive analytics, a company must look for events that transpired without a reason or large transactions that are skewing the analytics. An example would be a customer creating a large purchase as they got additional debt or grant funding. • Drill-down into the data – The team will drill-down into the

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data and the analytics to look for patterns and trends that could explain why an event happened. Establish causal relationship – The team will look for relationships that are directly caused by the occurrence of other events. An example would be the increase in website traffic could be correlated to additional ad traffic or a change in the Company’s SEO methodology. Identifying causal relationships can be done with multiple methods but can include time series and regression analysis and probability theories.

Predictive Analytics – What Will Happen?

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Predictive analytics is the utilization of analytics to forecast what will happen in a business. Predictive analytics is the usage of everything gathered in descriptive and diagnostic analytics along with the continued use of modeling, machine learning and risk assessments to make predictions about future events/trends by scoring data and forecasting. A company’s use of predictive analytics is a major improvement from looking at historical transactions/events and now looking to analytics for forecasting the future. Predictive analytics generally use models to analyze relationships, typically between the performance of an event and that event’s attributes. The goal is to determine and assess the likelihood that a similar event in a different sample of data will result in the same or specific performance. With the increase in big data and data storage, the size of a company’s sample data is growing, which allows for more precision on the likelihood of future events. In addition to prescriptive models, predictive analytics also employ descriptive and decisions models. Descriptive models quantify relationships in a series of data and then employing those relationships across future events. Decision models are also utilized where the relationships across all items of a decisions are utilized. Thus, the results of predictive

models, plus a decision made and the forecasted results are merged to predict the results of the decision made.

Prescriptive Analytics – What Should be Done? Predictive analytics is the utilization of analytics to forecast what should happen. Prescriptive analytics is generally the final stage of a data analytics platform. Using prescriptive analytics, a business can begin to plan for predicted outcomes, then simulate and optimize the best way to address those outcomes, generally with the use of machine learning and artificial intelligence. While prescriptive analytics is generally the final stage of analytics, it is continuously changing for a business as the prescriptive analytics takes in new data and processes it. Utilizing new data and revised predictions, a business can now have improved prediction accuracy and potentially improved indicators for business decisions. The applications of data analytics are as boundless as your imagination. The beauty of data analytics is the ability to gather data across a variety of platforms, whether it is a point-of-sale system, accounting package, SEO and website traffic, or even inventory movement on a production floor to other external sources such as weather statistics or vehicular traffic activity. The ability to combine these data points and look at historical events and patterns is a start; but using these events and patterns to model the future is the vision. The question your company needs to answer is what business question you want answered. Once you arrive at a question, the key is to ascertain what data is available and if the data is not currently available, what changes can be made to collect the right data. Quality data is critical as it will be relied upon to answer questions of the past and build models into the future. Evaluate the data a company is currently collecting and think of additional data which can be collected which will help answer the question. The cost benefit is clear. Taking your data analysis to its next level can lead to

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improved prediction models, customer relations, corporate compliance and better communication with stakeholders on past or future events. In short, can you afford NOT to dive into data analytics? l Kevin C. Bach, CPA, CVA, is a partner at Henry+Horne. He specializes in “big data” and has built the firm’s data analytic niche. He is experienced in setting up interactive dashboards and visualization tools across a variety of platforms to improve internal operations and review operations for effectiveness. He will be speaking on this topic at the ASCPA Governmental Accounting Virtual Conference — Feb 4-5, 2021. You can reach him at



Five Technology Resolutions for 2021 by Thomas G. Stephens, Jr., CPA, CITP, CGMA For many, the New Year is a time to look back and reflect on the year gone by – and what a year 2020 was! But it is also a time to look forward, to plan and to consider how we can do better in the coming year. Often, this results in making resolutions for the new year, and in that spirit, let us consider five technology resolutions that you might consider adopting for 2021. We Will Collaborate More Effectively In today’s work environment, collaboration is critical. Team members no longer work in isolation. Instead, they work collaboratively with customers, clients, vendors, and others who work for different organizations. Recognizing this new reality, yesterday’s work methods are no longer optimal for today’s environment.



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To illustrate, the age-old practice of emailing documents to others for review and revision is outdated. Instead, we can take advantage of collaboration tools to enable simultaneous, multiuser collaboration. For instance, we can use the co-authoring feature available in Excel, Word and PowerPoint to collaborate on common Microsoft Office documents. Likewise, we can use Adobe’s Creative Cloud to enable collaboration, too. Further, tools and platforms such as Google Workspace, Microsoft Teams and Zoho One provide excellent collaboration options. No matter the technology used, recognize the benefits of collaboration – a recent Forrester report indicated that team members save almost two hours per week when they use collaboration tools. No matter the type of business you are in, seek out opportunities to improve collaboration in 2021.

Information Security Will Be A Part Of Everything We Do You have, no doubt, read the headlines and know that cybersecurity attacks continue to rise. Ransomware, spear phishing, and Internet of Things attacks are just a few of the everevolving cybersecurity threats we face from external forces. But we also need to address internal security issues, such as team members sending sensitive and confidential information as unsecured email attachments, failing to use encrypted Internet connections, and not taking advantage of multi-factor authentication on a device or application. Information security must become an integral part of each of our businesses. A single security incident – such as a ransomware attack – could cost millions in remediation expenses and perhaps more in reputation damage. Further, with ever-expanding data privacy laws and regulations, fines for non-compliance could cripple organizations of all sizes. To address these threats, resolve to make information security a fundamental part of every activity in your organization. Among other actions, encrypt all your data, and mandate multi-factor authentication wherever

possible. Consider adopting a “zero trust” security model to minimize risk. Above all, train every team member on identifying and responding to the dangers that will inevitably arise. The issue of information security is not going to disappear, so address it now and ensure that all business processes incorporate appropriate security measures and all data remains secure.

Equip Work From Home Team Members Appropriately In the understatement of the century, 2020 was a year of unprecedented business change. At the outset of the pandemic, business leaders told millions of workers to “pack up your computer, take it home, and figure out how to work from there.” And these team members did an outstanding job of making the best of the situation. Along the way, many realized they prefer to work from home and will continue to do so in the future. In these cases, we must ensure that our remote workers have the equipment and tools necessary to be at least as productive at home as they were in the office. In addition to addressing hardware issues and fast and secure internet connections, also carefully consider issues such as desks and chairs. Remember, employers typically have a responsibility to ensure that team members have the equipment they need to get their jobs done efficiently and safely. In most cases, workers’ compensation laws still apply, even if a team member works from home. Hence, it remains necessary to address workstation setup and safety measures, including those related to ergonomics. Further, do not let relatively inexpensive technology expenditures hamper productivity. For example, purchasing an inexpensive scanner or other hardware devices may pay big dividends in increased productivity for team members working from home or other remote locations.

We Will Leverage Our Investment In Existing Technologies To Improve Efficiency Most organizations have invested

Equipping Home Team Members — In addition to addressing hardware issues and fast and secure internet connections, also carefully consider issues such as desks and chairs. heavily in technology over the past two decades. But are these same organizations receiving the promised return on investment? The unfortunate answer is a resounding “no!” One of the biggest reasons for this failure is that most organizations have not committed to training their team members to use the tools provided or discover some of the newer features in core applications. For example, although almost all accounting and financial professionals use Excel daily, they do not know how to work with data models, create formulas based on dynamic arrays, utilize Flash Fill, or perform “what-if analysis” using Solver. Thus, tasks take longer than necessary, and results are often not as precise as needed. For 2021, commit to leverage the investment already made in core technologies such as Excel, Word, Outlook, PowerPoint, Adobe Acrobat DC, and Windows 10. Incredible improvements in accuracy and efficiency await!

Our Team Will Adopt New Technologies To Improve Productivity Just as we commit to leveraging existing technologies, we also resolve to adopt innovative technologies, where appropriate, to improve productivity. One example lies in Robotic Process Automation (RPA). RPA allows businesses to automate rote, repetitive tasks such as manual data entry. With tools such as Automation Anywhere, Microsoft Power Automate, and Blue Prism, you can build custom applications to automate virtually any repetitive task performed in your organization. But do not stop with RPA. Consider how you can use other technologies such as machine learning and artificial intelligence to improve

productivity. For example, is there a role for artificial intelligence to help audit employee expense reports for errors, irregularities and fraud? Tools available from companies such as AppZen can help you do precisely that, identifying out-of-policy spending and enhancing internal control at the same time. Once considered to be “bleedingedge” technologies, these tools are now mainstream and offer new productivity plateaus. Another New Year is upon us, and with it, we will gladly say goodbye to what was a most tumultuous 2020. As we do, let us look forward to all that 2021 has to offer, including the opportunities to become more efficient, more effective, and more secure with technology. Resolve to improve your business with the five items outlined above – collaboration, information security, equipping remote workers, leveraging existing technologies, and adopting new and transformative technologies. Next year, when you look back at the year that was 2021, you and your bottom line will be delighted you adopted these five technology resolutions for 2021. l

Thomas G. Stephens, Jr., CPA, CITP, CGMA, is one of the shareholders of K2 Enterprises. At K2, he focuses on creating and delivering content and is responsible for many of the firm’s management and marketing functions. You may reach him at, and you may learn more about K2 Enterprises at www.k2e. com or find courses at



Classifieds Employment ASSISTANT CONTROLLER — ALC Holding, LLC — A growing private company requires a multi-talented individual to continue the development of our accounting team. The most important qualification is your desire to prepare yourself for advancement within our company. You will assist our Controller with all accounting processes normally found in a midsize company. Proficient in financial software, preferably Great Plains and QuickBooks, knowledge of Excel, monthly consolidation processes, bank reconciliations, forecasting and budgeting are key assets. As the need arises you will use your skills and experiences in getting your degree to assist in the growth of our company. CPA/CPA CANDIDATE — Seeking a CPA or CPA candidate with 1-3 years recent Public Accounting experience for a well-established, medium-sized CPA firm in East Tucson. Tax and financial statement preparation and experience with UltraTax, BNA, Accounting CS, and QuickBooks a plus. We offer full benefits and a professional, friendly working environment. The ideal candidate will be a career-minded individual seeking a long-term position with the potential for growth. Please fax your resume to (520) 733.2529 or email to CPA OR EA NEEDED — Would be responsible for preparation of individual, corporation, and Partnership tax returns and planning. Would also be responsible for accounting clients and background in QuickBooks is a must. Would also be able to represent clients with the IRS and Arizona. We are seeking a professional to join a fast-growing company and develop strong and lasting relationships with our clients (located in NW Arizona). Must have a minimum of 5 years of experience in tax preparation and accounting. Please send resume to



FROME & COMPANY, PLC — Central Phoenix firm seeks a CPA with 4+ years experience to join our team. We pride ourselves in providing the highest quality accounting, tax and advisory services. This position is perfect for someone who is a team player, wants to be challenged, and is willing to learn new industries. No auditing - plenty of contact with closely-held businesses and their owners. We offer great benefits, outstanding scheduling flexibility and the opportunity for personal and professional growth. Please send your resume to: phxcpacentral@ LOOKING FOR FRIENDLY CPAS —Arizona Private Education Scholarship Fund (APESF), a Scholarship Tuition Organization, is looking to add Friendly CPAs from around the state to the referral page of their website. Candidates must be knowledgeable about the tax-credit program and interested in welcoming new clients. An appreciation for School Choice and a love for kids is a PLUS. APESF is also looking for CPAs to write tax-related articles, explanations, and blog posts for their website. Writers can choose to donate their talents or receive compensation. Please contact for more information. Website: ON THE MONEY LLC — Experienced Arizona based accountants needed to provide bookkeeping and accounting advisory services to small business and nonprofit clients. If you are looking for remote work, flexible hours and seeking interesting, challenging work please send resume to: Accounting or finance degree required. Proficient in QuickBooks Online. Managerial and/or nonprofit experience a plus. PART-TIME BOOKKEEPING — Leonard F Baker CPA PC, Phoenix, AZ - Part-time bookkeeping position, local central Phoenix firm, must have accounting degree or equivalent, approximately 20 hours per week,

flexible schedule, duties: general ledger posting, payroll and sales tax reports preparation. FAX resume to (602) 2770201. TAX MANAGER/PARTNER — CPA — Tucson CPA firm has a position available for a tax manager who would like to become a partner in 2021 or beyond for a 9 person highly profitable, primarily tax practice. The candidate must have a minimum of 7 years of recent CPA firm experience preparing and reviewing business and individual tax returns. We offer competitive salaries and benefits, including tax season bonuses, group health insurance, 401(k) with a 4% company contribution, paid holidays, vacation and complete reimbursement of all CPA related expenses. Please apply for the Tax Manager/ Partner opportunity today, by sending your resume/salary requirements to Office Space EXECUTIVE OFFICE SPACE FOR LEASE — Beautiful garden-style office complex in a great office environment located in north Phoenix. Easy access to SR 51 and SR 101 just north of NWC of Tatum and Shea Blvd. Executive office $800. Ample parking, beautiful conference rooms and seminar room. Copier, telephone and internet ready. Includes Front Office service to greet your clients. Contact Clara or Mary at (602) 953-5000.

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AZ CPA Quick Quiz You’ve Read It, Now Get Credit Take this quiz on AZ CPA content online or submit this hard copy. Receive a score of 70 percent or more and earn one hour of CPE credit in specialized knowledge. It’s that easy! Fees: Members: $25 Nonmembers: $40 Online Access Go to to access links to all active quizzes. Once a quiz is purchased, a link and password will be emailed to you. Your results will be sent immediately after completion, and certificates are emailed within two business days. Hard Copy Please select one answer for each question. Fill out registration/payment information below and mail or fax to the Society office. Quiz results and certificates will be emailed to the address provided on the registration form. *This quiz will be available until February 2022. Please note that users have three attempts to pass the quiz with at least a 70 percent score.

7. In 2019, it was estimated that Arizona had how many jobs that directly pertained to the MMJ industry? m 2,500 m 5,000 m 15,000 8. Prescriptive analytics is generally what stage of a data analytics platform? m The First Stage m The Middle Stage m The Final Stage

January/February 2021 Issue of AZ CPA*

9. In the technology resolutions article, what does RPA stand for? m Random Process Analysis m Rogue Pandoring Action m Robotic Process Automation

1. In this month’s Chair’s message, who said: “A person who never made a mistake, never tried anything new.”? m Albert Einstein m George W. Bush m Prince

10. The program AppZen can help to do what? m Train employees on existing programs m Audit employee expense reports for errors, irregularities and fraud m Help employees meditate

2. Who was introduced at the October ASCPA Board meeting? m The New ASCPA Chair m Christopher Lutes m Oliver Yandle 3. Oliver Yandle is ... m An attorney m The New ASCPA President & CEO m All of the above

m The ASCPA Governmental Accounting Conference

6. According to projections by Marijuana Business Daily, the Arizona recreational marijuana market could generate how much money in its first year? m $80 million m $375-400 million m $800 million

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4. GASB Statement 95 has been ... m Postponed m Rescinded m Replaced 5. Brian Hemmerle suggests that you get information on Government Leases where? m The IRS m The AICPA

m Member: $25 m Nonmember: $40 Checks: Please make payable to: The Arizona Society of CPAs Credit Card:

m Visa m MasterCard m American Express

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