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Social Media 101 PAGE 11

Your Value Add: Leadership, Equity, and Inclusion PAGE 18

July/August 2018 | www.cocpa.org


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NewsAccount | July/August 2018




Features 4

GDPR: The Game-Changing Privacy Law Everyone Should be Talking About The May 25, 2018, implementation date has passed. Is your company prepared to comply with the new requirements?


Blending the Corporate Tax Rate For Fiscal Year Taxpayers The rate change is easy for taxpayers with a calendar year beginning Jan. 1, 2018. For taxpayers with a fiscal year that began before Jan. 1, 2018, and ended after that date, there’s work to do.


Social Media 101: SEO and More Today, you need a social media strategy. Here are the basics for maximizing your firm’s online presence.


Choice-of-Entity Under the New Tax Law Even with the new 21 percent corporate rate, both tax and non-tax factors should be considered when making the choice-of-entity determination.


Your Value Add: Leadership, Equity, and Inclusion Check out some of the nuggets heard at the 2018 Leadership Council, June 15.


Why Denver is a Great Place for Women in Business Denver ranks in the top 10 according to one study and fourth in another as a best U.S. city for working women.


Recruiting Today: What’s New and What’s Still Important Recruiting used to be confined to fall. Now, it takes place all year long, and there are a few new twists.

26 Departments 2

Chair Column


Movers & Shakers


In Memoriam/ Classified Ads


Follow us on social media and hear about recent news and upcoming events!

July/August 2018 | www.cocpa.org




A bimonthly publication of the Colorado Society of Certified Public Accountants Vol. 64, No. 2 July/August 2018



Victor A. Amaya, Chair Benjamin T. Hrouda, Vice Chair Christopher J. Telli, Treasurer Tawnya Y. Ramirez, Immediate Past Chair Mary E. Medley, Secretary


Kristine M. Brands, Renny Fagan, Dana J. Miller, Georgia Z. Phillips, Matthew O. Rolland, Randy L. Watkins

Editorial Board

Jack Allgood, Alan D. Bennett, Steve Corder, Peggy Jennings, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, Steve Van Meter, Michael D. West, Charlie Wright Mary E. Medley, President/CEO Natalie G. Rooney, Contributing Writer Ariana Cassard, Blue Ocean Ideas, Design NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7887 E. Belleview Ave., Suite 200, Englewood, CO 80111. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. The Colorado Society of CPAs assumes no liability for readers’ business decisions in reference to advertisements or other information included in this publication. Membership dues include a $10.00 one-year subscription to NewsAccount. Periodical postage paid in Englewood, CO, and additional mailing offices. POSTMASTER: Send address changes to NewsAccount, Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111 Net press run = 6,924 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 6,852; free distribution by mail = 0; free distribution outside the mail = 17; total free distribution = 55; total distribution = 6,869; office use, leftovers, spoiled = 55; returns from news agents = 0; total sum = 6,924; percent paid and/or requested circulation = 99%. 303-773-2877 • 800-523-9082 Fax: 303-773-6344

NewsAccount is available online at www.cocpa.org. 2

NewsAccount | July/August 2018

Visiting the Northern Chapter during the 2018 Chair Tour

As the annual Chair Tour gets underway, I’m looking forward to meeting with COCPA members around the state. If you’ve never been to a Chair Tour event, I hope you’ll consider joining us. This year, we’re talking about the value add – how we, as CPAs, can add value to everything around us and how the COCPA can support that concept.


hese member visits are interactive by design. My goal isn’t to stand at the front of a room and tell you what I think. I want to hear from you.

My first Chair Tour trip, May 9, took me to Loveland to connect with the Northern Chapter. The members really spoke up during a participatory exercise that helped all of us brainstorm about this concept of adding value. We talked about what we consider our own value add’s as individuals. We also discussed how the COCPA can add value for you as a professional because this isn’t just about doing better as individuals. It’s also about continuous improvement as your professional organization. Thank you, all of you who made this first exercise and discussion a success! We had a really interesting conversation about what the COCPA already does that members find valuable. I heard things like advocacy, our relationship with colleagues at the Colorado Department of Revenue who help resolve tax issues, and knowing you have someone you can go to when you need help getting something done.

COCPA is working to identify future leaders, help them connect, and provide opportunities for them to develop critical skills. Members from industry, government, tax preparation, and audit all provided input. We had a great mix of age groups as well, from young professionals to more experienced practitioners. Some of our younger professionals expressed an interest in having more COCPA activities for their demographic group. To that end, keep an eye out for more information on the Emerging Leaders Symposium, Aug. 10, at the Ramble Hotel in Denver (see page 10). This will be a full day of training for young professionals who are moving into supervisory positions. We’re also counting down to the kick off of the 2018 LeadFit leadership development class which begins, July 13. These are two examples of how the COCPA is working to identify future leaders, help them connect, and provide opportunities for them to develop critical skills. Much of our continuing professional education is focused on technical skills and rules. Both of these programs focus on managing ourselves and working with others – ultimately creating more effective leaders for the profession.

Preparing for the Chair Tour with COCPA staff

Chair Tour conversations and the resulting feedback are two more ways you help us all evolve as professionals and the COCPA grow as your professional organization. Your input makes the difference. Come out to events. Make your voice heard. Let me know what’s on your mind. Check your calendar, and attend a chapter meeting or COCPA event near you. I hope to see you, on the road. Email Victor Amaya at vamaya@mycpadvisors.com.

Join the conversation this summer:

Meeting with Southeast Chapter members in Pueblo

August 7


August 8 August 9 August 9 August 10 August 16 September 6


For details and to register, go to COCPA.org or call 303-773-2877 or 800-523-9082.

July/August 2018 | www.cocpa.org


GDPR: The Game-Changing Privacy Law Everyone Should Be Talking About BY NATALIE ROONEY

In late April, you may have noticed your inbox filling with email notices from companies letting you know their privacy policies had changed. What was behind it all? Only the most important data privacy regulation in 20 years – the European Union General Data Protection Regulation (GDPR). While the May 25, 2018, implementation date has passed, what companies have dealt with so far may be just the tip of the iceberg. Is your company prepared? 4

NewsAccount | July/August 2018




On May 24, 2016, the European Union (EU) enacted the General Data Protection Regulation (GDPR) to govern the collection, processing, use, and storage of personal data relating to any individual in the EU (citizens, residents, and visitors) as well as EU citizens living abroad. The EU designed the legislation to provide EU citizens with greater protections and rights as individuals. The regulation’s requirements mean that any organization dealing with people’s private data must meet new standards of transparency, security, and accountability. The GDPR is founded on six principles for the processing of personal data. The regulation specifies that personal data shall be: • Processed lawfully, fairly, and in a transparent manner • Collected for specified, explicit, and legitimate purposes • Limited to what is necessary to meet the organization’s need • Accurate and, where necessary, kept up to date • Kept in a form that permits identification of data subjects for no longer than is necessary • Processed in a manner that ensures appropriate security of the personal data Data covered by GDPR includes: • Basic identity information such as name, address, and ID numbers

“There are lots of ways to get to compliance, but first you need to understand where all of your data is.”

• Web data such as location, IP address, cookie data, and RFID (Radio Frequency Identification, such as the magnetic strip on a credit card) tags • Health and genetic data • Biometric data • Racial or ethnic data • Political opinions • Sexual orientation The reforms are designed to help customers gain a greater level of control over their data, while offering more transparency throughout the data collection and use process. DOES GDPR AFFECT MY COMPANY? One of the most important aspects of the GDPR is that it’s applied based on business activity, rather than physical location, which means that it can impact U.S. (and other non-EU) companies by virtue of their business practices. The GDPR not only applies to organizations located within the EU but also to all organi-

zations processing and holding the personal data of any individual in the EU (citizens, residents and visitors) as well as EU citizens living abroad, including all organizations processing and holding the personal data of these individuals, regardless of the organization’s location. PREPARING FOR GDPR Prior to implementation, Deloitte conducted a benchmarking survey to understand how organizations were preparing for GDPR compliance, how advanced their implementation plans were, and how confident they were of achieving their goals by May 25, 2018. Overall, only 15 percent of organizations surveyed expected to be fully compliant by May 2018, with the majority instead targeting a risk-based, defensible position. Despite the low percentage of organizations proactively preparing, Dan Sutter, senior manager, Deloitte Risk and Financial Advisory Cyber Risk Services, said not all companies waited until the last minute to get up to speed. In fact, the firm’s first GDPR engagement was in October 2015. “Some companies saw a strategic advantage to being the first to be compliant,” Sutter says. But, he adds that many companies took a wait and see approach. “Now they’ve painted themselves into a bit of a corner. If you’re a data controller and are relying on someone to help you and they aren’t in compliance, you aren’t either. Everyone has to comply,” Sutter emphasizes. “Every sector. These regulations require you to know where all of your data is, regardless of where it sits.” The scope of GDPR is troubling many companies which perhaps thought that accounting for their data would be a relatively easy activity. Companies think about their main systems and forget that data exists in other places like cookies on a browser and in Excel spreadsheets. “They get through ninety percent of the processes only to realize they’ve been measuring on too small of a scale,” Sutter says. “In addition, third parties are your extended enterprise, and you’re responsible for any data they’re handling on your behalf. There are lots of ways to get to compliance, but first you need to understand where all of your data is.” Compliance looks different for every company. Sutter says there’s no one path to follow, and so far, every client has its own unique plan. “I wish it could be as easy as lather, rinse, and repeat,” he says. “We do CONTINUED ON PAGE 6 July/August 2018 | www.cocpa.org


INFORMATION SECURITY CONTINUED FROM PAGE 5 have tools that help us replicate the process and deliver faster, and we know the hurdles and risks so we have those built in, but everyone has unique risk and a unique process to get there.” THE CONSEQUENCES OF NONCOMPLIANCE As of May 25, 2018, non-compliance penalties are significant, with potentially far-reaching financial, legal, and material or non-material damages: • Financial: Fines of up to four percent of annual global revenue or €20 million – whichever is greater. Smaller fines of two percent can be applied for failing to keep records in order, failing to report a breach, or not conducting impact assessments. • Material or non-material damages: Individuals will have a right to recover material or non-material damages, including loss of control over personal data or limitation of rights, discrimination, financial loss, damage to reputation, loss of confidentiality of personal data protected by professional secrecy, and “other significant economic or social disadvantage.” • Legal: Individuals can choose to sue either the data controller or the processor, or both, and possibly anyone in the supply chain, with the introduction of joint and several liability between parties engaged in the same data processing. Some companies are making a decision not to comply or complying to a certain point, depending on their risk tolerance. Sutter says some companies have decided to wait until they’re forced to comply. As of May 25, data subjects will have the right to request: • Confirmation that their data is being processed; • Access to their personal data; and • Other supplementary information (mostly the information provided in a company’s privacy notice). Recital 63 of the GDPR states, “A data subject should have the right of access to personal data which have been collected concerning him or her, and to exercise that right easily and at reasonable intervals, in order to be aware of, and verify, the lawfulness of the processing.”


NewsAccount | July/August 2018

Producing this information on an ad hoc basis is OK if companies think the risk isn’t going to be realized, but tech companies are more focused on building automated, oneclick solutions to these requests, especially since it can take a long time to pull the information manually. Sutter describes how it took an HR company’s entire team two full days to fulfill one request from a data subject. HUMAN RESOURCES COMPLIANCE AND UNSTRUCTURED DATA Even when companies think they completely understand the full scope of GDPR compliance, they may not. Sutter says unstructured data, which includes information floating around on shared drives or in emails, has been a big eye opener for many companies. “Consider emails going back and forth internally about a job candidate. That information is all discoverable and would need to be in a Data Access Request,” he says, adding that a prominent lawyer didn’t think that type of information was part of the GDPR scope. But it is. And 80 percent of data is in that form. “That single fact is terribly scary. Companies think they’re set, and yet they’ve missed this entire portion of the risk environment. I’ve seen it too many times already.” The general misunderstanding about the scope and level of effort required for GDPR compliance may lead to some awkward conversations between management and their boards, especially as the understanding of the unstructured data piece comes to light. “Companies have been telling their boards for six months that they’re ready to comply, and suddenly, they’re not at all ready,” Sutter says. He gives the example of a consumer company that told its board it had 40 systems to evaluate as part of the GDPR scope. Once the company learned about the unstructured data portion, that number jumped to 240. “They thought those environments didn’t count,” he says. “The compliance cost went from two hundred thousand dollars to two million. They were off by a decimal point. Imagine telling your board that.” Sutter adds that these costs are just to get into compliance. They don’t take into account the steady state support that will be needed in the future. IS IT TOO LATE? If you haven’t done anything at all and are

now worried that you should, here are some immediate steps to take: • Engage senior leadership in setting the tone at the top and establishing a sense of urgency around GDPR readiness and compliance. Prioritization of the effort starts with leadership. • Involve all stakeholders in the effort as the impacts and requirements reach far beyond IT to include finance, sales, marketing, operations, human resources, and others – any function that collects, analyzes, or handles/makes use of personal information. Consider establishing a task force to coordinate and implement compliance through policies, procedures, and systems. • Evaluate your current cybersecurity management program in the context of your ability to address GDPR’s requirements. Does it include the data privacy and protection elements and controls to ensure GDPR compliance? • Conduct a GDPR readiness and risk assessment, including evaluating your GDPR footprint and the potential costs of compliance. • Consult legal counsel. Ensure counsel has a solid understanding of what your organization does (and the data it touches). Then obtain legal advice on your organization’s priorities and strategies for remediation. • Execute risk mitigation measures to ensure compliance and implement an ongoing monitoring and assessment process. *Source: Baker Tilly

Sutter estimates he has helped around 80 different companies with GDPR and says the run up to the May 25 implementation date was frantic. “I keep thinking we’ve hit the crest,” he says. “We’re at maximum requests, and every month we continue to get more. We still see a lot of companies that haven’t started to comply, which is concerning due to the costs of the fines. The moment the Data Protection Authority takes an action not even a fine, just reaching out - it may get worse.” For more information, visit the EU GDPR portal at www.eugdpr.org.

Where can an AICPA C redential take your career next? If you have a specialized interest, you can build on the value you offer clients by adding an AICPA advisory service credential: Personal Financial Specialist (PFS ), Accredited in Business Valuation (ABV ), Certified in Financial Forensics (CFF ) or Certified Information Technology Professional (CITP ). These credentials were developed for the profession by the profession. They set you apart, make a statement and get you noticed. And, they can seriously boost your career. ®



© 2017 Association of International Certified Professional Accountants. All rights reserved. AICPA and American Institute of CPAs are trademarks of the American Institute of Certified Public Accountants and are registered in the United States, European Union and other countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants and licensed to the AICPA. 23438B-326

Explore your opportunities at aicpa.org/aicpacredentials.

Guiding the businesses that will pilot an industry August 15, 2018 | Denver | CPE: 8.0 Register today at mbs.cocpa.org July/August 2018 | www.cocpa.org



Blending the Corporate Tax Rate For Fiscal Year Taxpayers BY BRUCE M. NELSON, CPA


mong the many complications of the Tax Cuts and Jobs Act is the reduction in the corporate tax rate to 21%. Wait, you say. How can that be complicated? It’s confusing and complicated for fiscal year taxpayers. The rate change is easy for taxpayers with a calendar year beginning Jan. 1, 2018, because the new tax rate and elimination of the alternative minimum tax (AMT) are effective on that date. But for taxpayers with a fiscal year that began before Jan. 1, 2018 and ended after that date, there’s work to do. Fortunately, the IRS recently issued Notice 2018-38 that provides guidance for calculating a “blended” rate. Put simply, the taxpayer calculates the tax due for its taxable year first using the prior graduated rates and then calculating the tax for the same year using the new 21% rate. Then the taxpayer multiplies each tentative tax by the number of days in the fiscal year to which the rate applies and adds the two together. Adjustments will have to be made for AMT and other variables, but fortunately the Notice provides an example calculation. IRS NOTICE 2018-38 Purpose This notice provides guidance on the changes made by “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” P.L. 115-97 (the Act), to federal income tax rates for corporations under § 11(b) of the Internal Revenue Code (Code) and to the alternative minimum tax for corporations under § 55 and on the application of § 15 in determining the federal income tax (including the alternative minimum tax) of a corporation for a taxable year that begins before Jan. 1, 2018, and ends after Dec. 31, 2017. Background Section 11(a) of the Code imposes a tax on the taxable income of every corporation (corporate tax). Prior to changes made by the Act, § 11(b) provided that the amount of tax imposed was based on a graduated rate structure starting at 15 percent of the corporation’s taxable income and increasing to 35 percent of taxable income. In addition, § 55(a) imposed a tax (the “alternative minimum tax” or AMT) equal to the excess, if any, of the tentative minimum tax (TMT) for the taxable year, over the corporate tax for the taxable year. Section 55(b)(1)(B) provided that in the case of a corporation, the TMT for the taxable year is 20 percent of so much of the alternative minimum taxable income (AMTI) for the taxable year as exceeds the exemption amount, reduced by the alterna-


NewsAccount | July/August 2018

tive minimum tax foreign tax credit for the taxable year. Section 13001(a) of the Act amended § 11(b) of the Code to provide that the amount of tax imposed by § 11(a) shall be 21 percent of a corporation’s taxable income. Section 13001(c)(1) provides generally that this change in the tax rate for corporations is effective for taxable years beginning after Dec. 31, 2017. Section 12001(a) of the Act amended § 55(a) of the Code by limiting the application of the AMT to non-corporate taxpayers, thereby repealing the AMT for corporations. Section 12001(c) of the Act provides that the changes made by § 12001 apply to taxable years beginning after Dec. 31, 2017. Section 15(a) of the Code provides that if any rate of tax imposed by chapter 1 of the Code changes, and if the taxable year includes the effective date of the change (unless that date is the first day of the taxable year), then: (1) tentative taxes shall be computed by applying the rate for the period before the effective date of the change, and the rate for the period on and after such date, to the taxable income for the entire taxable year; and (2) the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.

Section 15(b) of the Code provides that for purposes of § 15(a), if a tax is repealed, the repeal shall be considered a change of rate, and the rate for the period after the repeal shall be zero. Section 15(c) provides in part that for purposes of § 15(a) and (b), if the rate changes for taxable years “beginning after” or “ending after” a certain date, the following day shall be considered the effective date of the change. APPLICATION Corporate Tax under § 11 The changes made by § 13001 of the Act to the federal income tax rates imposed on corporations under § 11(b) of the Code are effective for taxable years beginning after Dec. 31, 2017. Under § 15(c), for purposes of § 15(a) and (b), the effective date of the change made by § 13001 of the Act is Jan. 1, 2018. The computation of tax provided under § 15(a) applies to a change in any rate of tax imposed by chapter 1 of the Code if the taxable year includes the effective date of the change, unless that date is the first day of the taxable year. The tax under § 11 is a tax imposed by chapter 1 of the Code. Consequently, a corporation with a taxable year that includes Jan. 1, 2018, but does not start on that day, must apply § 15(a) to determine the amount of federal income tax imposed under § 11 for that taxable year. Pursuant to §15(a), a tentative tax of a corporation for the taxable year that includes Jan. 1, 2018, shall be computed by applying the rates of tax imposed under § 11(b) prior to the change of the tax rate under § 13001 of the Act, and a tentative tax for a corporation shall be computed by applying the 21 percent rate of tax imposed under § 11(b) as amended by § 13001 of the Act. The tax imposed under § 11 for the taxable year that includes Jan. 1, 2018, is the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.

Other Applications using § 11(b) Rates Certain taxpayers, such as life insurance companies and regulated investment companies, are not subject to the tax imposed under § 11(a) but are nonetheless taxed under other Code provisions that use the rates of tax set forth in § 11(b). The application of § 15 will apply in determining the chapter 1 tax for these taxpayers in the same manner as described above for corporations subject to the tax imposed by § 11(a). Alternative Minimum Tax under § 55 Section 12001 of the Act repealed the application of the AMT imposed under § 55 to corporations effective for taxable years beginning after Dec. 31, 2017. Under § 15(b), the repeal of a tax shall be considered a change of tax rate, and the rate for the period after the repeal is zero for purposes of § 15(a). As a result, the repeal of the AMT for corporations is a change in the TMT rate from 20 percent to zero. Further, under § 15(c), the effective date of this change of rate is Jan. 1, 2018. The computation of tax provided under § 15(a) applies to a change in any rate of tax imposed by chapter 1 of the Code if the taxable year includes the effective date of the change, unless that date is the first day of the taxable year. The tax under § 55 is a tax imposed by chapter 1 of the Code. Consequently, a corporation with a taxable year that includes Jan. 1, 2018, but does not start on that day, must apply § 15(a) to determine the amount of its TMT for that taxable year. Pursuant to § 15(a), a tentative TMT for the corporation shall be computed by applying the 20 percent TMT rate provided under § 55(b)(1)(B) prior to the change under § 12001 of the Act, and a tentative TMT shall be computed by applying the zero percent TMT rate resulting from the repeal under § 12001 of the Act of the AMT for corporations. The corporation’s TMT for the taxable year that includes Jan. 1, 2018, is the sum of that proportion of each tentative TMT which the number of days in each period bears to the number of days in the entire taxable year. Applicability Date This notice applies to taxable years of corporations that begin before Jan. 1, 2018, and end after Dec. 31, 2017.

EXAMPLE The following example illustrates the application of § 15(a) of the Code in determining the tax under §§ 11 and 55 of a corporation using a fiscal year as its taxable year for the taxable year that includes Jan. 1, 2018. Corporation X, a subchapter C corporation, uses a June 30 taxable year. For its taxable year beginning July 1, 2017, and ending June 30, 2018, X’s taxable income is $1,000,000, and its AMTI in excess of its AMT exemption amount is $2,000,000. COMPUTATION UNDER § 11 Corporation X’s corporate tax under § 11 of the Code is computed by applying § 15(a) as follows: 1) Taxable income (Line 30, Form 1120) 2) Tax on Line 1 amount using § 11(b) rates before the Act

$ 1,000,000

3) Number of days in Corporation X’s taxable year before Jan. 1, 2018 4) Multiply Line 2 by Line 3

340,000 184 62,560,000

5) Tax on Line 1 amount using § 11(b) rate after the Act 6) Number of days in the taxable year after Dec. 31, 2017 7) Multiply Line 5 by Line 6

210,000 181 38,010,000

8) Divide Line 4 by total number of days in the taxable year


9) Divide Line 7 by total number of days in the taxable year


10) Sum of Line 8 and Line 9

$ 275,534

Under § 15(a), Corporation X’s corporate tax for its taxable year ending June 30, 2018 is $275,534. COMPUTATION UNDER § 55 Corporation X’s TMT and resulting AMT under § 55 of the Code is computed by applying § 15(a) as follows: 1) AMTI in excess of AMT exemption amount (Line 9, Form 4626) 2) TMT on Line 1 amount using § 55(b)(1)(B) rate before the Act 3) Number of days in Corporation X’s taxable year before Jan. 1, 2018 4) Multiply Line 2 by Line 3

$ 2,000,000 400,000 184 73,600,000

5) Divide Line 4 by total number of days in the taxable year

$ 201,644

It is unnecessary to compute a TMT for the portion of the taxable year beginning on and after the effective date of § 12001 of the Act because the TMT is repealed as of the effective date for purposes of applying § 15(a). Corporation X’s TMT for its taxable year ending June 30, 2018 is $201,644. Because this TMT amount for the taxable year does not exceed Corporation X’s corporate tax amount of $275,534, Corporation X does not have an AMT liability for its taxable year ending June 30, 2018.

Contact Information For further information regarding this notice, contact Bill Jackson at (202) 317-4731 or Forest Boone at (202) 317-4904 (not a toll-free call).

July/August 2018 | www.cocpa.org


The next step on your path to success. August 10, 2018 | Denver | CPE: 8.0

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womenssummit.cocpa.org SPONSORed by


NewsAccount | July/August 2018


Social Media 101: SEO and More BY PATRICK TRUESDELL, CPA, MBA

Remember ten years ago when everyone said your CPA firm (or business) had to have a good website? Maybe not, then. But today, you do have to have a social media strategy. Here are the basics and tips on maximizing your firm’s online presence.



Excluding Google+, Google isn’t a social media platform. However, it dominates the internet with more traffic than any other site, so we need to talk about the basics here. The goal is to be ranked near the top of the search results. To do this, you need to focus on Search Engine Optimization (SEO). Google uses many factors to determine ranking. The two main ones are backlinks and keywords. Focus on these two, and you’ll be 75% of the way there with your SEO strategy. BACKLINKS Backlinks are links to your website from other websites. There are two kinds - “dofollow” and “nofollow” - and they are not created equal. No follow links have the word “nofollow” in their code. Google assigns little to no value on a nofollow backlink. Most of the social media sites I talk about here provide only nofollow backlinks. So, if you post your link all over Facebook, it isn’t going to make Google rank you higher in the search engine results. Here are two ways to check if an existing link is dofollow or nofollow: • Easiest – Download the Chrome plugin called nofollow. It will highlight all links in that browser with red dotted lines. • Open the page you want to check, hold control “CTRL” and hit “u.” This will bring up a line of code. Hit Ctrl+F, and type in some of the text from the link. I typed in “Accounting All” below. See the “nofollow” that shows up right before the link? This link will not provide any SEO benefits to the site to which it points.

KEYWORDS This is simple: Pick a keyword you want to rank for and put that keyword - and similar words - into the content you want to show up in the search engine results. Google will give more weight to the keyword if it shows up in headers or near the beginning of the page.

Google is the most popular website. #2 YouTube

#3 Facebook

#13 Twitter

#15 Instagram

#34 LinkedIn file using an email address you can access. Now, you need to attract followers. It’s not like LinkedIn or Facebook where you can request people “friend” you. Post relevant content people actually want to click on. If they like what they see, they can choose to follow you. Individuals often will post 280-character tweets about a topic. But businesses generally use Twitter differently. Write your content on your main site (Top 10 Tax Tips, New Lease Accounting Standard Implementation Guide, Rev Rec, etc.). Then, share the URL (the fancy word for web address) on Twitter along with an image from your article. HASHTAGS While hashtags were coined by Twitter, they no longer are just a Twitter thing. Most of the other social media platforms use hashtags as well. They are the author’s way of helping users find specific content. Check out this #accounting article about #taxes and #Fin46. I would write a tweet like this and add the URL of the article that resides on my website. Typically, Twitter pulls the first picture that exists on the designated URL. When people search for accounting articles, they start typing accounting in the search bar. Twitter will search all tweets using its algorithm, focusing on those with “#accounting” - not necessarily those just with the word “accounting.”

With Google, the goal is better ranking so more people can find you when they search “Accounting Firm Near Me.” With all the following social media sites, it’s not that obvious how they can benefit your firm or business. Note that most of this guidance will apply to all professional services and B-to-B businesses.

Use hashtags generously in all of your social media posts. People who follow you will automatically see your tweets in their feed.

TWITTER Next to Google, Twitter is likely the most important social media platform for your firm. Here’s how it works. You set up your company pro-

Most social media sites (Twitter, Instagram, Facebook, and LinkedIn)

WHAT’S A FEED? The feed is one of those fundamental social media things that no one ever explains - until now.

CONTINUED ON PAGE 12 July/August 2018 | www.cocpa.org



CONTINUED FROM PAGE 11 use a feed, a data format used for providing users with frequently updated content. The user logs in and starts scrolling through the feed. It automatically shows the user things that the algorithm thinks the user wants to see. Twitter, Facebook, and LinkedIn will show almost exclusively updates and posts from your friends and/or followers. Instagram will rely more on the algorithm to fill your feed with pictures it thinks you would want to see. The feed will scroll continually - for what can seem like forever. With that said, you want to be at the top of someone’s feed when they log in, or else your post quickly will be deemed old as the feed will show the newest posts at the top. This means you have to keeping posting content. Avoid many posts at one time; people may find that annoying and unfollow you. Trickle your posts in and vary them. Generally, one to three posts a day is good - and don’t repeat an identical post more than every other week. You’ll need a rotation of at least 14 articles to share on Twitter. And, what you share needs to be actual content. “Actively looking for tax

Twitter Tips •

Make your profile engaging.

Make sure your website includes articles people want to read.

Sign up for a post scheduler.

Set up your post calendar.

Interact with other people by “liking” (click the heart) and following others (click Follow).


NewsAccount | July/August 2018

clients” isn’t content. Post content that people care about, and they will repay you with web traffic and purchases. Write content about the top 10 ABCs or the best five tricks to XYZ. This is content people will read. AUTO-SCHEDULE POSTS Firms with a solid position in social media auto schedule posts to Twitter and the various other social media sites. Auto scheduling must be done through third party software if you are going to have a chance at doing it in an orderly fashion. The best post scheduling software I’ve found is Blog2Social. This comes as a WordPress plugin or as online software as a service. The most popular post scheduling program is Hootsuite. It’s more expensive; both work well. LINKEDIN Your personal LinkedIn account can be used in much the same way as Twitter - you can share posts from your site with your followers. However, mid-size and larger accounting firms should set up a business page for the firm. Once your firm starts to take on an identity separate from that of an individual, people will expect to see a LinkedIn page for the business. Note that the business page cannot send out friend requests. You have to use other means to encourage people to follow your firm on LinkedIn, or they have to find your business page through a LinkedIn search and deliberately choose to follow it. When they follow your business page, they’ll see your business page posts in their daily feed. INSTAGRAM Instagram is a tool for posting pictures or 15 second videos. It’s a phone app first and foremost. To create an effective Instagram strategy, bring together a task force of younger people in your firm. To implement the strategy, encourage your employees to post pictures of themselves having fun while working at your firm. Make sure they add your firm profile “@FirmProfile” in the post description along with some relevant hashtags like “#Accounting.”

You want prospective employees to look at your company’s Instagram account and see people having an awesome time. Focus on posting visual images that grab people’s attention. Take a look at KPMG’s Instagram account: www.instagram.com/kpmg/?hl=en. What millennial wouldn’t want to work there? FACEBOOK Facebook gets tons of traffic (#3 most traffic in the world), but it’s really a person-to-person social media platform more than anything else. From a business standpoint, you’ll want to set up a business page rather than market your accounting firm through your personal Facebook account. The Facebook business page works in the same way as the LinkedIn business page in that you cannot send a friend request from your business page. Instead, you need to ask people to follow your page through other methods. Once they do, they’ll start seeing posts from your business page in their feed. Your goal with your Facebook business page is the same as your Twitter goal and your LinkedIn business page goal: Get tons of page followers, and post links to your website content. YOUTUBE Almost all the firms in the Top 50 Accounting Firms list use YouTube to appeal to current and prospective clients. Most are posting five to 15 minute videos in a single company channel.


2018 HEROES & HEROINES SOUGHT Nominations Deadline: September 20, 2018

Most YouTube users don’t randomly pop open YouTube and start scrolling through the feed. Generally, people open YouTube with something specific in mind that they want to watch. Here’s the bare minimum: Set up a channel. Fill out the profile. Upload a video introducing your firm. People will expect decent quality video so you may need to hire someone to shoot and produce it for you.

Each and every day, away from the headlines, in businesses large and small across Colorado, and in others’ lives, CPAs make a difference. We will honor those contributions with the 2018 Everyday Heroes and Heroines Awards, to be presented at the CPAs Make A Difference Celebration, Nov. 7, at the Grand Hyatt, 1750 Welton St., Denver.

PAYING FOR ADS All social media platforms and Google offer paid ad placement. Remember, with Google ads you are just renting traffic. People will come to your site as long as your ad is up. As soon as your ad is gone, they will stop coming.

If you know a CPA who should be considered, please submit a nomination. Send a narrative, not to exceed three pages, explaining why you believe the candidate should be recognized and detailing his or her accomplishments.

With social media, if your ad is directed at gaining relevant followers instead of just driving traffic to your site, it may be worth the money. In this case, you gain followers who’ve deliberately said they want to hear your message. By default, they will remain followers even after the ad campaign ends. You now have a permanent spot in the feed of a relevant viewer. Virtually all paid ads work in the same way. You pay a dollar amount for each person who clicks on the ad. You can set limits on how much you want to pay for the whole ad campaign or how many clicks for which you are willing to pay. Also, make sure it’s a good ad. Generally, ads are set up to make a user more likely to click on than a regular post. THE LAST WORD As I said in the beginning, your accounting firm or business needs to have an awesome social media presence. If you neglect social media, you are leaving money on the table. With the exception of paid ads and the cost of someone to set up and manage social media, it’s free. Don’t be the late adopter who misses this one. Patrick Truesdell, CPA, MBA, is the founder of Public Company Community, publiccompanycommunity.com. Contact him at patrick.truesdell@gmail.com.

Nominees must hold a CPA certificate and be a COCPA member. They should be “everyday” heroes and heroines who haven’t been recognized widely for their contributions. Nominees should demonstrate significant service in one or more areas: INVOLVEMENT: Describe the nominee’s level(s) of involvement, length of involvement, and time devoted to nonprofit organizations and community activities. LEADERSHIP: Describe the nominee’s position(s) held and substantial accomplishments achieved in one or more community organizations, including taking the lead in identifying and solving a problem, founding or rescuing an organization, or developing an innovative program. IMPACT: Describe how the nominee’s actions benefited the community, improved the overall quality of life, helped others overcome adversity, or served as a role model for CPAs exemplifying the profession’s core values of integrity, competency, and objectivity. For more information and to submit your nomination electronically, contact Terry Cervi, terry@cocpa.org, 303-741-8610. July/August 2018 | www.cocpa.org



Choice-of-Entity Under the New Tax Law


ax reform has taken center stage as taxpayers absorb the tax law changes made in the Tax Cuts and Jobs Act (the Act). The headliner change is the flat 21 percent tax rate for ordinary corporations.

This new rate is a substantial reduction from the previous top corporate rate of 35 percent, and, consequently, many businesses not currently classified as C corporations for tax purposes are considering whether to convert to a C corporation to take advantage of this new rate. For tax purposes, the decision on whether to operate as a “flow-through entity” (generally, a sole proprietorship and a schedule C filer, partnership, or S corporation) or as a C corporation is often referred to as a “choice-of-entity” determination. While the new 21 percent corporate rate may favor the C corporation as a choice-of-entity for certain businesses, there are other factors, both tax and non-tax, to consider when making the determination. As a result, many businesses may decide to stay in flow-through form, rather than change to corporate. THE BASICS Before diving into the details, it is helpful first to understand the basic mechanics influencing choice-of-entity decisions. Since the advent of the “check-the-box” regulations in the 1990s, taxpayers have had significant discretion when choosing the tax classification of a business entity. For instance, a state law limited liability company (LLC) with multiple owners can choose to be a C corporation, S corporation (provided the owners are qualified shareholders), or partnership. And a wholly owned LLC can choose to be classified as a C or S corporation, or to be “disregarded” for tax purposes with all of its activities reported on its owner’s tax return (typically on the schedule C). This type of disregarded entity is often referred to as a “sole proprietorship.” Further, under certain circumstances, these regulations allow an existing entity to change its classification so that an LLC classified as a partnership can convert to be taxed as a C corporation with no changes to the underlying state law entity. There are whole sections of the tax code, with hundreds of pages of accompanying regulations, governing the taxation of flowthrough entities and C corporations. Yet the most important distinction among the taxation of the various entities is a relatively simple concept: C corporations are subject to two levels of taxation, one at the entity level and another at the shareholder level, while flow-through entities are subject only to a single level of tax paid by the owner. For example, a C corporation pays tax on its income, and when the income is paid out to


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a shareholder as a dividend, that dividend is also taxed to the shareholder, resulting in the so-called “double layer of tax.” However, a flow-through entity typically doesn’t pay tax; only the owner pays tax on its taxable income distributed from the flow-through entity. Under prior law, assuming the highest applicable federal rates and the distribution to shareholders of all of a corporation’s aftertax earnings by way of taxable dividends subject to the 3.8 percent net investment income tax, the double layer of tax could result in an effective combined federal 50.47 percent tax rate for a C corporation and its shareholders. Owners of a flow-through business could pay tax at a rate as high as 43.4 percent. In contrast, the Act’s new rates result in an effective tax rate of 39.8 percent for C corporations paying out all of their earnings to shareholders (assuming highest applicable federal tax rates) and a range of between 29.6 percent to 40.8 percent (depending on the availability of the new section 199A 20 percent deduction and the applicability of the net investment income tax, and again assuming highest applicable federal rates) for owners of flow-through businesses. This narrowing of the spread between flowthrough entities and C corporations may encourage some business owners to pursue the C corporation form. But, the effective federal tax rate is only one of the tax considerations for making a choice-of-entity determination, and there are several other points also to consider.

THE NEW SECTION 199A 20% DEDUCTION When it passed the Act, Congress felt that some benefit needed to be provided for flow-through entities to, in a sense, offset the benefit that was provided corporations with the reduction in the tax rate. Therefore, Congress passed a new 20 percent deduction for qualified business income (the “20 percent QBI deduction”) earned by flow-through businesses to reduce the tax liabilities of owners. Generally, provided that certain tests are met, the 20 percent QBI deduction can lower the effective tax rate paid by the active owners of flow-through businesses from a high of 40.8 percent to a low of 29.6 percent for certain business income (assuming the highest federal income tax rates and depending on whether the 3.8 percent tax on net investment income applies). Since these levels of taxation often would be lower than the effective rate of 39.8 percent paid on this same business income by a C corporation and its shareholders, this new 20 percent QBI deduction may encourage eligible businesses to stay in the flowthrough form, although the deduction is currently slated to “sunset” after 2025. OPERATIONS Generally, contributions of capital into flow-through entities and C corporations (provided certain “control” requirements are met) are tax-free to both the contributor and the business entity. However, distributions of cash and property are treated differently. Flow-through entity distributions can be tax-free, while C corporation distributions usually are taxable transactions. For instance, a distribution of appreciated property from a C corporation triggers two layers of taxation – one at the corporate level and another at the recipient shareholder level. But a distribution of appreciated property from a partnership can be tax-free. Accordingly, businesses that routinely distribute earnings may choose the flowthrough form over a C corporation to avoid the double layer of tax, especially if the income from the business will be taxed at a lower rate due to the new 20 percent QBI deduction. Alternatively, certain capital

purchaser of a business may pay a premium to purchase the business assets over equity because the purchase of assets generates cost recovery tax benefits like depreciation and amortization. Generally, an asset sale can be accomplished more efficiently when the assets are held by a flow-through entity because the gain is only subject to a single layer of tax. For a business entity classified as a partnership, the sellers can sell their partnership interest and pay tax at capital gains rates (subject to the “hot asset” ordinary income rules) while the purchaser can take a cost basis in the underlying partnership assets via a section 754 step-up election as previously discussed.

intensive businesses that do not distribute their earnings, but reinvest such earnings, may find the C corporation form advantageous because those earnings are only subject to the 21 percent rate. However, C corporations retaining earnings should be aware of the accumulated earnings tax (relating to earnings retained without a demonstrated business need) and the personal holding company tax (relating to certain types of investment income). There are other tax considerations as well. C corporations can fully deduct state and local taxes, while the non-corporate owners of flow-through entities can only deduct up to $10,000 of state and local taxes (relating to that owner’s share of the business income) under the Act. Businesses with international operations may prefer the C corporation form because a new deduction relating to foreign-derived intangible income is available only to domestic C corporations. But losses incurred by a C corporation are trapped at the entity level, while flowthrough entity losses can be claimed by the owners, subject to various limitations including tax and at-risk basis, the passive activity rules, and the new overall limitation on business losses introduced as part of the Act. Preferential tax rates relating to capital gains and other items pass through to the owners of flow-through entities but are trapped at the C corporation level. There is always the chance that future tax legislation could change things again. For instance, if the corporate tax rate rises, busi-

nesses that previously chose a C corporation form may not be able to convert to a flowthrough form without triggering material tax consequences. Another consideration: Operating in a state with a relatively high corporate tax rate could encourage a business entity to adopt the flow-through form. CHANGE IN OWNERSHIP Businesses with frequent changes in ownership may favor the flow-through form. A purchaser of an interest in an LLC classified as a partnership can receive a basis step-up in the purchaser’s share of the LLC’s assets (provided a section 754 election is properly made), entitling the purchaser to potentially higher depreciation and amortization deductions. This step-up in basis also can occur upon the death of a flow-through owner when the ownership interest transfers to an estate and heirs. In contrast, the purchaser of stock in a C corporation is not entitled to the same benefits. This also is true for the purchase of stock in an S corporation. However, a purchaser still may prefer the S corporation stock over C corporation stock because future gains from operations or sales of property will generate only a single layer of tax. On the other hand, a business with a relatively static ownership structure may be indifferent to possible basis step-ups. These types of businesses may prefer the C corporation form. SALE/EXIT SCENARIO In addition to taking less liability risk, a

Also, the sale of S corporation stock can be structured as an asset sale via an election under section 338 or 336 of the Internal Revenue Code, and the gain is only subject to a single layer of tax. In contrast, the purchase of a C corporation’s assets results in a tax liability for both the C corporation and its shareholders (assuming the sales proceeds are paid out) and the availability of a section 338 or 336 election is limited in comparison to an S corporation. One other differentiator that may favor classification as a C corporation over a flow-through entity is the section 1202 gain exclusion for “qualified small business stock,” available only to certain C corporation shareholders. This gain exclusion has many requirements, including the acquisition of stock at original issuance, holding the stock for at least five years, and conducting a “qualified business.” If all the requirements are met, a shareholder can exclude up to 100 percent of the gain from the sale of the stock. This gain exclusion, in combination with the 21 percent corporate tax rate, may make the C corporation form attractive for certain businesses. NEXT STEPS The choice-of-entity determination under the Act is not a simple decision. While the new corporate tax rate of 21 percent is attractive, many businesses may still find the flow-through form to be advantageous. Any business looking to make an initial choiceof-entity determination or a conversion from one type of entity to another should model out the various scenarios and consider structuring alternatives. This article originally was published on Eide Bailly’s website, eidebailly.com. It is reprinted with permission.

July/August 2018 | www.cocpa.org



Tuesday, July 17 and Tuesday, August 21 BYO Bag Lunch. 4800 Baseline Rd., Boulder. Future Meeting Dates: Sep. 18, Oct. 23, Nov. 27, Dec. 18. For additional information, contact Lynn M. Mitton, CPA, MT, MPA, (303) 499-7445 or email lynn@flewellingcpa.com.

Denver Tax Study Group AT THE COCPA OFFICE

Tuesday, July 31 and Tuesday, August 28 7887 E. Belleview Avenue, Ste. 200, Englewood. Future Meeting Dates: Sept. 25, Oct. 30, Dec. 4. Register at www.cocpa.org.

Four Corners Tax Study Group AT THE DURANGO PUBLIC LIBRARY BYO Bag Lunch. 1900 E. 3rd Ave. For dates and details, contact Michelle Sainio, CPA, CGMA, (970) 247-0506 or email msainio@durangocpas.com. Register at www.cocpa.org.

Need for IRS Guidance on New Pass-Through Deduction


hat’s the number one question on CPAs’ minds related to the Tax Cuts and Jobs Act? When will the Internal Revenue Service (IRS) issue guidance on new Internal Revenue Code section 199A? The answer is soon, according to Acting IRS Commissioner David Kautter. On June 8, when speaking at a tax conference in Charlottesville, Va., Kautter said that the proposed section 199A regulations could be released “within a couple of weeks.” Kautter also said the IRS is trying to hit the key points with the proposed regulations (implying it will not address many of the less-urgent points in the initial guidance). He noted that the proposed regulations likely will include general rules, aggregation rules, anti-abuse rules, and the definition of specified services. Under the new law Congress passed last December, qualified business income (QBI) from many pass-through entities is eligible for a 20 percent deduction. However, basic questions about the provision remain unanswered until the Treasury Department and the IRS issue guidance.

30 years experience in public accounting 25 years of service with Lang & Company, CPAs 7 years experience as a business broker for CPAs Please call for your free consultation 303-726-7646 www.thomaslangcpabroker.com tom@thomaslangcpabroker.com Colorado Real Estate License and CPA license Member of the Colorado Society of CPAs Board Member of Colorado Association of Business Intermediaries


NewsAccount | July/August 2018

The American Institute of CPAs began its push for immediate guidance in February. In a letter to Treasury and IRS officials, the AICPA stated, “Taxpayers and practitioners need clarity regarding QBI in order to comply with their 2018 tax obligations and to make informed decisions regarding cash-flow, entity structure, and other tax planning issues.” The AICPA has since reinforced the urgency for guidance in meetings with the IRS and Treasury and also has provided real-life examples of challenges with how the rules may impact CPAs and their clients. The AICPA identified six top priorities for QBI guidance: • Definition of QBI • Aggregation method for calculation of QBI of pass-through businesses • Deductible amount of QBI for a pass-through entity with business in net loss • Qualification of wages paid by an employee leasing company • Application of section 199A to an owner of a fiscal year passthrough entity ending in 2018 • Availability of deduction for Electing Small Business Trusts Watch for updates through NewsQuick, the COCPA weekly e-newsletter, and NewsAccount as more information becomes available.


ASU 2016-14 Implementation Concerns and Challenges BY TIM MCCUTCHEON, CPA

Through numerous client trainings, meetings, and conversations with nonprofit entities to assist them with the implementation of FASB ASU 2016-14, Not-for-Profit Entities (Topic 958) – Presentation of Financial Statements of Not-for-Profit Entities, Tim McCutcheon and his colleagues have identified the following most prevalent issues, observations, and concerns expressed by CEOs, CFOs, and controllers.


he newly required, expanded disclosures relating to board-designated funds will require a robust review of such designations and potentially lengthy discussions at the board level about the purposes and uses of the funds and how funds may be designated and undesignated. Most CFOs accept the new liquidity disclosure requirements as an opportunity for the nonprofit to “tell its story,” but at the same time, the narrative required by the standard will take time to develop and be approved by management, the audit committee, and perhaps even the executive committee.

considering whether the direct method of presenting their statement of cash flows would better inform funders and other users of the factors that truly drive their operating cash flows. Tim McCutcheon, CPA, is a partner with Eide Bailly LLP, Denver. Contact him at tmccutcheon@eidebailly.com. Originally published on Eide Bailly’s website, eidebailly.com. Reprinted with permission.

Many nonprofits will be presenting their functional allocation detail for the first time and plan to take a fresh look at their allocation methods to ensure they form the basis for the most accurate presentation. Reviewing and adjusting the necessary labor, space, utilization, and other allocation factors can be a time-consuming process. In addition, those who plan to push through these new allocations to internal project reports may discover that several meetings are required before project managers are comfortable with newly allocated costs. On the surface, the change in reporting net investment return appears simple. However, CFOs have voiced concerns over how to accurately allocate their time and the time of others involved in supervising the strategic and tactical activities involved in generating investment return (direct internal investment expenses) to determine and report their net investment return. Given the relative infrequency of audit committee meetings, consideration must be given to the extended lead times needed to create or update various board policies, such as those covering: • Designation and undesignation of net assets • Continuation/reduction/cessation of distributions from underwater endowments

August 30-31, 2018 Denver | CPE: 16.0

• Inclusion/exclusion of purpose-restricted financial assets in amounts available for expenditure within one year in the entity’s liquidity and availability disclosure It is important to note that not all facets of implementation plans are negative! Some nonprofits are using their implementation project to delve into legacy board-designated and donor-restricted net assets with a goal of carefully evaluating the restrictions of long-time funds to determine once and for all the accuracy of the restrictions that have been carried forward over the years. Some nonprofits also are

COCPA.org/TechConf July/August 2018 | www.cocpa.org


Your Value Add: Leadership, Equity, and Inclusion

Nuggets abounded at this year’s Leadership Council, June 15. Economist Connor Lokar, with ITR Economics, Manchester, New Hampshire, shared perspectives on what to watch for, prepare for, and tell young adults about what’s ahead in the U.S. and global economies. Dr. Nita Mosby Tyler, Chief Catalyst with The Equity Project, Denver, led participants through the diversity, inclusion, and equity maze and provided a new framework for thinking about and acting on these critical themes in today’s environment. Here are some of those nuggets for your consideration and reflection. A BEND IN THE ROAD The U.S. economy is the largest in the world at $17.4 Trillion. China (2nd largest) and Japan (3rd largest) still have not surpassed the U.S. All of Europe combined is only a few percentage points larger. U.S. economic growth is up quarter-over-quarter by 2.8%. California is an almost $2.4 Trillion economy - a top five economy globally. If you look at state gross domestic product (GDP) in comparison to world economies, California is similar to France, and Colorado ranks similarly with Singapore at a very healthy $302.4 Billion. By itself, America is one quarter of economic activity globally. The U.S., China, and Europe represent 66% of the global economy. The U.S. economy is dominated by the consumer. It’s paramount that consumers purchase. And, population growth is a huge factor - which is driven by birth rate and immigration. Colorado has one of the most robust population growth rates in the U.S. at 10.2%. Texas comes in at 10.8%. North Dakota comes in at 12.7%. The District of Columbia comes in at 13.2% - as Lokar mused, “filling up the swamp, rather than draining the swamp” perhaps? Labor retention must be a primary focus for the next decade - for all businesses - not just for the next 12-18 months. CONTINUED ON PAGE 20 18

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July/August 2018 | www.cocpa.org


WHAT TO TELL YOUNG ADULTS • Live below your means. There will be no Social Security for Millennials and younger generations. • Learn a second language. Mandarin and Spanish would be great choices. • Each household should have multiple or diverse income streams - workers in different segments, investment in real estate, and such. • Choose career(s) oriented toward the opportunities - STEM and vocational skills will never be bad calls - plumbers, mechanics, electricians always will work. • Pay off as much debt as possible by 2030. • Be ready to buy at the price cycle low in the depression. • Be self-reliant.

ACTIONABLE TAKEAWAYS • Plan for continued overall expansion during the second half of 2018. • Invest in yourself to augment productivity and counterbalance increasing labor costs. • Avoid the linear projection trap when budgeting for 2019. • Sell the business in the climate of maximum goodwill - or be ready to hold on through 2019. • Plan to handle elevated input costs. Consider whether to raise prices. • Know where you and your markets are in the business cycle: Phase A Recovery; Phase B Accelerating Growth; Phase C Slowing Growth; Phase D Recession.

CONTINUED FROM PAGE 18 NEGATIVE RISK FACTORS • Inflationary Pressures • International Trade, NAFTA, and Tariffs • Declining Savings - denting the consumer cushion • Rising Interest Rates - consumer debt, housing • Impact of Tax Reform on U.S. Debt A mild recession is coming in 2019, probably beginning toward the end of the 2018 calendar year. It won’t be as significant as the 2008-2009 downturn, and it won’t last long. But, the data foretells its coming. The data also foretells another Great Depression is coming in the 2030’s. For a free, three-month subscription to ITR’s newsletter, email updates@itreconomics. com with the subject line COCPA - CONNOR IS COOL! DIVERSITY, EQUITY, INCLUSION Do you suffer from Diversity Fatigue - that “I just don’t want to talk about this at all or anymore”? According to Dr. Nita Mosby Tyler, it’s real, it’s triggered by something, and it shows up physically. The key is understanding what your trigger is and how it manifests itself. Maybe you were forced to take “diversity training,” and the experience was not helpful. Maybe you avoid the topic because you feel unable to do anything about it. Maybe you’re rolling your eyes right now, just thinking about this.

• Referent Power - based on reciprocity or mutual respect • Reward Power - based on the ability to give and take away rewards • Coercive Power - based on the ability to punish • Information Power - based on holding and controlling information In the U.S., Legitimate Power and Coercive Power are dominant. To make progress, we need to shift to Expert Power and Referent Power to achieve inclusion.

Dr. Nita Mosby Tyler

Equity is about developing systems where everyone can thrive. It doesn’t mean everyone gets the same thing. It’s about people getting what they need. Equity should be in the built and natural environment, our leadership, and the structures of all systems. Inclusion is always intentional; it’s what

NewsAccount | July/August 2018

• Expert Power - based on skills and knowledge

“Diversity is about counting people. Inclusion is about making people count.” We’re still talking about diversity today because we defined it incorrectly in the 1980’s. It is not about race, and it’s not defined as “people of color.” It’s about the richness and beauty of every person, regardless of race or ethnicity or gender or orientation. Everyone has expertise, from his or her life experience, and we need all those perspectives in the conversation.


FIVE BASES OF SOCIAL POWER (FRENCH & RAVEN) • Legitimate ( Position) Power - based on title or rank

you do with the diversity of your community. This is where leadership is necessary. Inclusion calls for relationships. You have to be in relationship with other to know about their gifts and talents and skills and be able to leverage them. THREE CRITERIA FOR INCLUSIVITY For Inclusivity to be successful, it must be a: • Win-win for the individual • Win-win for the organization • Win-win for community It’s critical to be courageous about asking about and being intentional about the winwin for the individual. Otherwise, it tokenizes the individual. The best way to leverage inclusion is to address social exclusion.

REAL-LIFE BARRIERS TO EQUITY, DIVERSITY, AND INCLUSION State of Fear - what you feel when you encounter something you didn’t expect, have already experienced, or is potentially harmful. Experience danger; feel fear. Trait of Fear - An enduring attitude of fear. It is not connected with any present danger. It is about an imagined danger. Feel fear; avoid action altogether. Note that when you are speaking from a power position such as Expert, listeners often are hearing you based on where they fall on Maslow’s Hierarchy of Needs. As the Expert, you may be at the “Esteem” level while they are at the “Physiological” (basic human needs to survive) or “Safety” level (Am I in danger? Is my position in danger?).


THE LEADERSHIP POWER EQUATION: THE 20-60-20 RULE 20% are always with you.

Esteem Love/belonging

60% are going to be on the fence, watching and trying to figure out whether to join you. 20% are never going to buy into whatever you’re trying to accomplish.

Safety Physiological

Focus on the 60% to gain their support. Encourage the top 20% because they are your stars.

READING LIST The Cathedral Within by Bill Shore Community by Peter Block The Color of Law by Richard Rothstein The Social Animal by David Brooks Hillbilly Elegy by J.D. Vance White Working Class by Joan Williams Blindspot by Mahzahrin R. Banaji Color Blind by Tim Wise Dream With Me: Race, Love and the Struggle We Must Win by John M. Perkins Thinking Fast and Slow by Daniel Kahneman On Bullsh*t by Harry Frankfurt What Really Matters: Searching for Wisdom in America by Tony Schwartz Implicit Bias Assessment Project Implicit: Harvard University implicit.harvard.edu/implicit

Maslow’s Hierarchy of Needs

Distinguish yourself as a strategic leader. Earn the global designation for financial professionals. Explore the CGMA Finance Leadership Program: It’s a lifelong professional learning journey that puts you on the path to take your career to a new level. You’ll learn and acquire the skills it takes to become a more strategic, confident, secure and insightful leader. Get started at CGMA.org/Program. ®

Brian Schwab, CPA, CGMA Global Account Finance Advisor, EY

© 2017 Association of International Certified Professional Accountants. All rights reserved. 23169D -326

July/August 2018 | www.cocpa.org



NewsAccount | July/August 2018


Where in the World is Sheila Balzer? BY NATALIE ROONEY


n Feb. 1, former COCPA Chair Sheila Balzer, CPA, got a phone call. Would she be willing to join the Association of International CPAs Board of Directors? “It’s one of those times where you just say ‘yes,’” she says. “But I did wonder what I’d done to get to that point. Somewhere along the way I had to be nominated, accepted, and voted on by (AICPA’s governing) Council. I don’t know how I got nominated, but I do know it’s about having passion for the CPA profession and a willingness to dedicate time and energy to that passion.” In April, that passion, willingness, and energy put Balzer on a flight to China for her first meeting with the Association. Looking around the room, she saw several CPAs who had been chair of their respective state CPA societies and active on boards. “I think that’s most important,” she says. “All of these people volunteered and did things for their states first.” Balzer describes her first volunteer efforts with the COCPA as “limited and low level.” But she slowly took on more responsibility, gaining the experience she needed to join technical committees and become chair of the Educational Foundation of COCPA and the COCPA Board of Directors. Eventually, after a formal application and review process, she was appointed to the AICPA’s Accounting Review and Services Committee. “I was willing to start there and see where it went,” she says. “I wasn’t expecting to be nominated to the Association board.” EXPERIENCING CHINA Each year, at least one Association board meeting is held in New York City. Another meeting typically is held elsewhere in the world. This year’s non-NYC meeting was held in Beijing, China. It was selected not only because the Association has an office in China, but also it’s the fastest growing market with the highest need for professional accountants – managerial and otherwise. The first part of the trip was designed to educate the group about the Chinese market. Balzer and other new board members needed to learn about China from a cultural perspective before they could understand

it from a business perspective. “That time was the most important to understanding the country,” she says. “Yes, we learned a lot of important information in the business meetings, but traveling in this casual group, seeing how people live, learning about their values, and seeing how the country as a whole is struggling between a communist regime and westernizing was invaluable knowledge. If you don’t have an understanding of it, you won’t understand the market.” Balzer says she had no idea what to expect from the trip. “The region was completely new to me.” There were many eye-opening experiences. “To us as Americans, the idea of a Communist regime and government-controlled television and press is odd or against what we stand for,” she explains. “But every culture gets some things right.”

“When you step outside your own realm, it’s evident how intertwined world economies are. Everything done somewhere has an effect somewhere else.”

China’s population is heavily skewed toward older people, and Balzer was fascinated by how the country treats this age group. There is mandatory retirement: age 55 for manual laborers and age 60 for intellectual workers. “Like us, they’re dealing with ‘social security,’” she explains. “Beijing is a city of more than twenty million people. There are so many retired people. So what do you do? You can’t just be unproductive.” She was drawn to Temple of Heaven Park where Beijing’s senior population gathers during the day to sing opera, play cards or other games, and do Tai Chi. There is even a matchmaking area where parents can drop off their son’s or daughter’s “resume” and hope for a match. “The whole setting was vibrant and offered such a different perspective on aging,” Balzer says. Another revelation from her China trip was traffic. “I will never complain about traffic again,” Balzer laughs. To control more than twenty million people traveling in and out of Beijing, the city has had to implement strict controls. “China’s method of traffic control is like our watering system. If your license ends in X, you can’t drive on Y days. License plates are hard to get, so that has led to citizens gaming the system. People are getting divorced to get an extra license plate.” Other things influencing Chinese culture today include the 3-to-1 ratio of men to CONTINUED ON PAGE 24 July/August 2018 | www.cocpa.org


MEMBER PROFILE CONTINUED FROM PAGE 23 women, the result of the “one child” birth policy that was in effect for so long. “It’s great if you’re female and want to be picky, but it’s not great for men,” Balzer says. “It’s an example of how policies can sound good at the time but cause unintended consequences. The country needed to control population growth because feeding people was a huge issue, but now there’s an aging population and not as many people of marriage age. You see the implications of that in every facet of Chinese life.” Balzer says she wasn’t exactly thrilled when she first heard the Association trip would take her to China. “It was really outside my comfort zone,” she says. “Even in Beijing, only ten percent of the population speaks English. There were many times we couldn’t communicate. I don’t know how you pick up Chinese. Symbols aren’t letters. They’re words or concepts.” Despite her reticence, Balzer quickly realized she had the opportunity of a lifetime. She says the most beneficial aspect was spending time with a group of accountants who may be from different nations but at their core are like Colorado CPAs. “They’re passionate

about our profession and just generally awesome people. I can’t wait to see them again at our next Association meeting.” As for the business side of things, Balzer says everything she learned in China has helped her see beyond the U.S. lens. “When you step outside your own realm, it’s evident how intertwined world economies are. Everything done somewhere has an effect somewhere else.” She is quick to give credit to the group’s tour guide who was able to weave together an explanation of the Chinese culture with the business impacts in China and around the world. In addition, Balzer says the meeting itself broadened everyone’s perspective on the needs of the Chinese economy and how it affects the rest of the world. “If I got kicked off the board after this first meeting, I’d still be indebted for the opportunity to have experienced business in another culture,” she says. “Plus, I got to meet supercool accountants who share a passion and energy. Innately, we like to be around each other. That energy just feeds off of itself.”

THE ASSOCIATION OF INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS Wondering how the Association of International Certified Professional Accountants (the Association) is different from the American Institute of Certified Public Accountants (the Institute – the organization you have historically known as the AICPA)? The Association was formed in 2016 when the membership bodies of the AICPA and CIMA, the Chartered Institute of Management Accountants, voted overwhelmingly to create a new international accounting association to represent their collective memberships of more than 600,000 accountants worldwide. The Association is governed by a board of directors and the councils of the AICPA and CIMA. The Association Board of Directors is composed of 38 leaders in the profession and public at large. Each of these leaders also serves on either the Public Accounting Board or the Management Accounting Board. The Association Board promotes the best interests of the global accounting profession and is responsible for addressing international issues impacting CPAs, CGMA designation holders, and/or public and management accounting. The Management Accounting Board and Public Accounting Board focus on significant issues influencing CGMA designation holders and management accounting or CPAs and public accounting respectively. Source: aicpa-cima.com


NewsAccount | July/August 2018

COCPA Now Offers Membership by Subscription Online Chat Available Too Renew By July 31, 2018 New this year, you may renew your COCPA membership through an annual or monthly subscription, payable by credit or debit card. Payment will occur automatically at the interval you choose, and you may cancel your subscription at any time after a 12-month initial commitment. If you choose the annual subscription, you’ll receive an email notice before your next annual membership payment occurs. If you choose the monthly subscription, you’ll be charged the monthly dues amount when you renew online. That date will be the date on which future monthly payments will be charged. Once you renew, you’ll be charged the monthly dues amount until you cancel (after the first 12 months). If you prefer traditional membership dues renewal paid by check (a non‑subscription membership), that works, too. If you do not renew online, you’ll receive a hardcopy membership invoice by mail with check remittance instructions. Call the COCPA office, 303-773-2877 or

800-523-9082, or use the Live Chat feature at COCPA.org to request a hard copy invoice. We’ll process and mail it to you. Note that checks must be mailed to the COCPA lockbox address: P.O. Box 912751, Denver, CO 80291-2751. When you login to COCPA.org, you’ll see it’s been upgraded, too, as has the security of your personal information. That’s why you no longer need to remember a login name and password. Instead, when you login, you’ll receive an email with a link to click and receive immediate access to member services and resources. Among them, you’ll find the Live Chat feature where you can ask questions and receive real-time help, available on every page. These new features are just three of many changes we’ve made to be your future-ready professional home. Thank you for belonging to the COCPA and for all you do on behalf of those you serve. We look forward to serving you this year and beyond.

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Why Denver is a Great Place for Women in Business BY NATALIE ROONEY

“It’s all based on what you know, what you do, and what you can provide.”


hen it comes to a national ranking of cities with successful women, Denver ranks in the top 10, according to a new report by SmartAsset, a New York-based personal finance company. The firm examined six factors to come up with its list of cities: • Percent of women with bachelor’s degrees • Median earnings for full-time working women 26

NewsAccount | July/August 2018

• Percent of businesses owned by women • Women’s unemployment rate • Average housing cost as a percent of a full-time working woman’s income • Percent of women with high incomes Denver ranks 16th for average earnings for full-time working women and 23rd for percent of full-time working women who earn at least $75,000. The Mile High City also ranks 15th for percent of women who have bachelor’s degrees. Denver ends up in 10th

because of the low percentage of women who own businesses and high local housing costs. The report shows that for both of those metrics, Denver ranks below-average. Ranking ahead of Denver in the SmartAsset list are: 1. Arlington, Virginia 2. Scottsdale, Arizona 3. Madison, Wisconsin 4. San Francisco, California

5. Alexandria, Virginia 6. Raleigh, North Carolina 7. Minneapolis, Minnesota 8. Washington, D.C. 9. Plano, Texas and Denver DENVER’S WORKING WOMEN Denver didn’t look good just in the SmartAsset study. Another ranking put Denver at fourth in the nation on a list of the best U.S. cities for working women. In that study, credit card review company MagnifyMoney used eight criteria in developing its ranking of cities, including women’s unemployment rates, percentage of women-owned businesses, rate of women managers, wage gap between men and women, and rate of women with health insurance. Denver’s wage gap between men and women (12.8 percent) was the fourth lowest in the country and well below the national average of 20.4 percent. Denver also fared well in percentage of legislators who are women (40 percent), which was second highest in the country. Denver didn’t hit the mark with women managers though. Only 39 percent of managers in Denver are women, which put the city in 39th place for that metric. AS COCPA MEMBERS SEE IT It’s nice to see Denver recognized for its business environment for women, but what do women themselves say? We asked three COCPA members for their perspectives. Laurie Anderson, CPA President & Director Kundinger, Corder & Engle, PC Originally from South Dakota, Anderson didn’t begin her career in accounting. She was working for the U.S. Forest Service in Idaho when she became a mother and decided maybe she shouldn’t be roaming the hills all the time. The family relocated to Denver for her husband’s job, so Anderson went back to school and graduated with an accounting degree from the University of Denver in 1990. She began her accounting career at Deloitte & Touche. In the early 90s, public accounting firms were beginning to realize the importance of work-life balance. Deloitte was flexible with Anderson’s schedule, giving her time off that matched her kids’ school calendar. “The Denver business community tried very had to accommodate women in the workforce,” Anderson says.

After five years, Anderson made the move to Kundinger, Corder & Engle, PC. As a specialist in the nonprofit sector, she works with a lot of women. “What I find is that these ambitious, intelligent, well-spoken women are moving their businesses forward, doing great things for the entire community, and from my point of view, they are thriving.” Anderson says the opportunities available to her in Denver just didn’t exist in South Dakota or Idaho. “Denver has been good to me. My husband and I were saying recently that neither of us would have had the successes we’ve had in either of our home states.” What does she think makes Denver great for business women? “There’s an all-around acceptance of everyone,” Anderson says. “It’s all based on what you know, what you do, and what you can provide, not your gender. If you have the qualifications, it doesn’t matter what walk of life you come from. People respect you if you make the grade, so to speak. I think Denver’s an accepting community. Anyone who wants to be successful here can be. It’s up to each individual person.” Meghan Dack, CPA Accounting Manager SM Energy Company A Colorado native and Metropolitan State University of Denver graduate, Dack has been at SM Energy for eight years after beginning her career at PwC. “I’ve had incredible experiences throughout my career,” Dack says. “I’ve worked for companies that advocate for women.” In fact, she sings the praises of SM Energy and the company’s support, especially considering that it operates in the oil and gas industry, which historically has been male dominated. “When I attend committee meetings, there may be one or two women in a room of mostly men,” Dack says. “I have always been shown respect and recognized for my efforts.” Dack says that SM Energy invests in the development of its people and is focused on creating strong leaders in the company and industry. She has received significant support in her growth into a manager position within the accounting group. “I have great relationships with the women I work with. We support one another in finding the right work/life balance and achieving opportunities in our careers. I have yet to come across any obstacle where I felt l was pitted against a man or that someone achieved

something because he was male and I’m female.” Dack says Denver, and everywhere actually, can keep up the good work by continuing to support women in the workforce. She encourages women to seek out mentorships to help navigate their careers and personal and professional growth. “Mentors can help you live the best version of you at home and work. Being a working mother is challenging, but with the right people in your corner holding you accountable, you can really thrive in both endeavors.” Dack says her own transition back to work after maternity leave has been smooth, thanks to the people with whom she works. As a Denver native, Dack has watched the city grow and change. “With the growth has come a ton of diversity,” she says. “I work with a lot of people from other states and different backgrounds. It helps create a really diverse workplace with great opportunity for learning and collaboration.” Networking opportunities also top Dack’s list of great things about working in Denver. “There are a lot of women coming together from different backgrounds and building their networks here in Colorado. It’s a great state with so many things to do indoors and outdoors, which creates opportunity for fun and interesting relationships in and outside of the workplace.” Sharon Lassar, PhD and CPA (Florida) John J. Gilbert Endowed Professor and Director, School of Accountancy University of Denver Daniels College of Business Lassar began her career in the early 80s with a large public accounting firm. She worked on both coasts and at a university in Florida before accepting her position at the University of Denver (DU). “Colorado has a western mentality,” she says. “In the west, we tend to be more progressive and willing. We’re progressive in our approach to everything we do. People here are more willing to try new ideas and are more accepting of newcomers.” For Lassar, Colorado has been a place to thrive. “My move to DU was a lateral one, but it was a move I felt good about,” she explains. “I wasn’t looking to achieve a higher position within the university. I was looking for growth opportunities to serve students and interact with alumni over and above my prior institution. DU is progressive in its CONTINUED ON PAGE 28 July/August 2018 | www.cocpa.org


PERSPECTIVE CONTINUED FROM PAGE 27 thinking and approach to education. I wanted to do more in my job versus take the next step in my career.” Lassar says Denver is great for business. Period. “Whether you’re a man or a woman, there is a lot of growth going on here and a lot of diversity in the types of industries being attracted to Colorado. These industries tend to be younger and newer – things like art, the tech space, and digital marketing. They are more open-minded than businesses you might find in the Rust Belt.” When industry is growing, it’s good for everyone, but growing in new industries opens new opportunities for women. Some of these new companies are run by young women – those that aren’t are run by young men who are sons of women who work(ed). “The mindset

of today’s business leaders is open to women and giving women opportunities,” she says. “The men I grew up with were reared by stayat-home moms. That’s not today’s business leader. A Gen X business leader of today likely grew up with a working mom.” Over the last decade, Lassar has seen many more women in the accounting profession’s executive positions, including office managing partner. “There are a lot of subtleties involved in opportunities not being presented to women that I think executives today are more aware of, and they’re making sure they work to overcome them.” Lassar offers an example of men playing a pick-up game of basketball. When positions come available, they think of someone with whom they’ve played a game. “Today, men are more aware of these biases. They are looking beyond their team and at the

women in their organizations who could take on the role. That has led to more opportunities for women today.” Ultimately, Lassar says it’s Colorado’s general open-mindedness and growth in new businesses that permeate the entire state, trickling down to the organizations which do business here and creating great opportunities for women. What’s been your experience? Whether you’re a woman or a man working in the Denver business community, NewsAccount welcomes your perspective. Email your thoughts to Mary E. Medley, COCPA CEO, at mary@cocpa.org. We’ll share them in a future issue.

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NewsAccount | July/August 2018


17 Things To Do This Summer BY GEORGIA Z. PHILLIPS, CPA

When you think of summer, you probably think of warm, sunny days, golfing, hiking, fishing, vacation, and a more leisurely pace in the office. Summer can be all of these things, but more importantly for CPAs, summer brings opportunity.


hether you are a CPA working in public accounting, private or nonprofit industry, or in higher education, summer also is a time to review, reflect, reconnect, and improve both your business and yourself. Here are 17 suggestions to help you do just that: 1. Call your clients. A leading reason clients or customers leave is lack of contact. They want to hear from you, listen to your updates and ideas, and more importantly, they want you to listen to them and help resolve issues they face. You are their trusted advisor; reach out and demonstrate the value you can bring to them. 2. Brush up on the Tax Cuts and Jobs Act of 2017 (TCJA). The more you know, the better prepared you will be to answer client questions. If you are not in public accounting, review the TCJA provisions and anticipate how to best prepare your organization for TCJA compliance in 2018. 3. Provide useful information to your clients. Communicate new accounting and tax rules, along with industry trends to your clients via seminars, email, or other delivery methods. 4. Engage in early tax planning for 2018. Granted, there are TCJA provisions for which we are awaiting regulatory guidance, but a majority of TCJA provisions are fairly straightforward. Help clients understand the TCJA’s dollar impact. They will appreciate your initiative. 5. Review organizational accounting and reporting methodologies. Address areas that need improvement. Also, make record-keeping changes now that will facilitate 2018 TCJA compliance. Help clients do the same. 6. Plan for client cyber security. Assist your clients in attaining the level of needed cyber security for the business. You can act as a facilitator between your client and outside consultants if your firm does not offer this service. 7. Conduct a cyber security audit for your company as well. Compromised data can be costly in both dollars and time for a firm, company, or organization in the event of a system breach and hacked data. 8. Review your organization’s hardware, software, and IT provider, and make needed changes. Don’t be afraid to admit that

something is not working as it should. Past expenditures are a sunk cost; instead, focus on the future. Downtime and poorly functioning equipment and software cost an organization in both lost time and lost revenue. 9. Critically review client/customer lists. Cull the lesser ones that are distracting and preventing you from providing top-notch service to your best clients/customers. 10. Review processes and procedures. Streamlining how things are done can yield time and cost savings, better client/customer service, and happier employees. 11. Obtain your continuing education over the course of the year. Don’t procrastinate until the end of the next reporting period. New knowledge will benefit you, your organization, and your clients now. 12. Hold mid-year meetings with employees. Talk about opportunities, improvement areas, etc. Set goals for remainder of year. 13. Recommend and implement needed training for your employees. Employees want to learn the technical and soft skills needed to do their jobs well. Help them do that. 14. Sponsor a company, division, team, etc. event. Events outside of the office allow everyone to interact in a more relaxed setting, learn about each other, and build camaraderie. 15. Make changes that will have a positive impact on the environment. You will be a better global citizen and earn points from your employees and customers. 16. Welcome change and the positive effects it can bring. The road to change may be filled with bumps and obstacles, but the rewards can be great. 17. Don’t forget recreation. Take time off to enjoy the things you like to do. Be an example, and encourage your employees to do the same. Remember that the word “recreation” means you get to re-create yourself in some way. Georgia Z. Phillips, CPA, is President and Shareholder of the Phillips Allderdice Consulting Group, P.C. and Partner at Focus Group Strategies. Contact her at gphillips@fgstrategies.com.

July/August 2018 | www.cocpa.org



Recruiting Today: What’s New and What’s Still Important BY NATALIE ROONEY


very fall, for as long as anyone can remember, accounting firms have headed to college campuses to meet and interview accounting students and fill rosters with the best and brightest. That model still holds true, but today there are a few new twists. Linda Maloney, manager of employer relations for the University of Denver’s (DU) Daniels Career Services, says when she was hired five years ago, it was solely to coordinate accounting firm visits to DU. “That’s how busy it is here for accounting recruiting,” she says. Maloney assists the Big 4 and smaller regional firms with all the logistics for campus visits which now occur twice a year – in fall and spring. Firms hold meet and greet’s, setting up tables with food and firm swag. They usually bring four to ten people with them to meet with a foyer full of students. The events are mostly attended by juniors and seniors, but Maloney says proactive sophomores also attend. The on-campus meet and greet is somewhat informal – even the firm representatives tend to dress casually in jeans and a firm logo shirt. “That’s a big change,” Maloney says. “These events used to be more business formal. Now they’re more casual because the firm representatives want to be approachable.” She adds that the school still expects the students to be in business casual attire to make a professional impression. “It’s a great way for students to get a brief overview of a firm’s culture and what it’s looking for,” Maloney says. Firms typically schedule on-campus interviews within two or three weeks after a meet and greet. Things look a little different at Colorado Mesa University (CMU) because of the school’s location says Associate Professor Suzanne Owens. While regional firms do come to CMU for on-campus events and interviews, Big 4 firms do not. They hire CMU students, but students have to be proactive and reach out to those firms. “We


NewsAccount | July/August 2018

tell the students to make phone calls and get their resumes out there,” she says. “Once they get into a Big 4 firm, they do well, but it’s harder for them to get their foot in the door from out here.” CMU students find placements with small, local firms by pounding the pavement and word of mouth. The timeline for CMU recruiting is a bit different as well. Owens says local firms tend to hire seniors in April and May, which is a prime time for snagging students who want to stay in the Grand Valley. Students who want to be in Denver will go through the hiring process the previous fall. SEASONAL SHIFT Recruiting used to be confined to fall when a majority of internship and full-time hiring decisions were made. Now, recruiting takes place all year, a shift that has occurred over the last four or five years. Chris Schmidt, CPA, managing partner of Deloitte’s Denver office, confirms that the two-day recruiting model no longer holds. “We used to go to campuses during the recruiting period, be there for a few days, and then we’d be done,” he says. “Now, our on-campus presence is an all-year effort. It’s important for us to be there and be visible.”

summer internship program,” Schmidt adds. “We have twenty to thirty students with us in January and February for an intensive internship program. By mid-February, we make offers for available roles, so we have virtually filled up our numbers for recruiting one and a half years in advance.” Lauren Criner, campus recruiter for EY, says the firm’s on-campus events also have become a continuous effort. In addition to all the traditional fall activities, EY takes part in a spring Meet the Firms event that is specific to accounting and finance careers. Meet and greet’s, lunch and learn programs, and on-campus office hours and interviewing sessions happen in the spring just as they do in the fall. Terry Pierce, CPA, regional recruiting manager for Moss Adams, is based in Dallas and handles recruiting for Denver, Dallas, Houston, Kansas City, and Albuquerque. He spends the majority of his time on college campuses, giving presentations to classes and student organizations and interviewing students. Over the course of his years in recruiting, he’s seeing a more collaborative partnership between the schools and firms. “We’re listening to what the schools are doing and making more outreach. We have a good interaction with the faculty.”

Many firms are getting to know potential job candidates before they officially launch their job search, as well. “We’ve found in audit and tax practices that the earlier we engage students on campus, the better our opportunity to get to know them and tell them about Deloitte and the profession,” Schmidt says.

Dawn Gustafson, FPHR, SHRM-SCP, HR manager at Anton Collins Mitchell LLP, says the accelerated recruiting pace means sometimes the best students disappear before you even meet them on campus. That change has pushed the firm to look at “one offs” – students who might be from the Denver area originally, went to school elsewhere, and would now like to move back, but aren’t in the local recruiting system. They might be students who studied abroad and perhaps missed the peak hiring time or might have made it to their junior year without securing a job. “We have to keep our minds open,” she says. “For whatever reason, they chose to do something that didn’t keep them on campus when we were there.”

“In audit and tax, our traditional recruiting cycle has largely gone away because of the

An unintended consequence of the earlier recruiting timeline has been a drop-off

As part of its outreach efforts, Deloitte offers candidates preparation help for interviews – not just for interviews at the firm, but at any organization – by offering resume review sessions. Students are paired with a buddy to help answer questions before the interview process. Other campus activities include an annual ethics event at DU. At another school, the firm hosts a cyber competition.

of student participation in Beta Alpha Psi. “Once they have jobs, they’re not remaining engaged,” Gustafson says. “When that happens, they miss out on the benefits Beta Alpha Psi provides, such as leadership development, writing, and etiquette. We encourage that continued engagement.”

pre-screening method, or as a first interview because of logistics, videoconferencing is definitely in the mix today.

SUMMER LEADERSHIP A newer offering from most larger firms is Summer Leadership. Firms invite students into the office for a one or two-day program that allows them to:

Owens says video interviews are common at CMU because of the school’s location. “Firms aren’t going to ask students to come

• Explore career opportunities • Network with other student leaders and professionals • Get a head start on the campus recruiting process Students are invited to attend a Summer Leadership program after the spring on-campus recruiting push. The timing and programming for Summer Leadership varies from firm to firm. The programs typically contain a lot of networking opportunities to give students an insight to the firm’s people and culture. EY Summer Leadership attendees do a case study for each service line to helps students decide what they want to do during their internship. “We want them to meet our people and experience our culture because they’re going to make their choice based on those things,” Criner says. “We want them to see the business side and the people side. It’s a two-day glimpse of what their career could look like.” Criner says EY’s goal is to fill as many internships as possible through the summer programs. “Then we’ll use the fall to fill whatever is remaining. As recruiters, we make the joke that soon we’ll be giving internship offers to high school students if we continue on this path. The timeline is happening earlier and earlier.” HOW TECHNOLOGY IS CHANGING RECRUITING First, there’s the resume. Shopping for matching envelopes and paper and copying your resume onto it are relics of the past, Owens says. “We still talk about a cover letter because even if they’re emailing a resume, the body of the email is essentially what the printed cover letter would have been,” Owens says. Video also is changing the recruiting process. Whether it’s being used as a

DU offers workshops to help students prepare for these video interviews. Students can sign up to use a recruiting suite so they have a quiet place to record.

Gustafson can gather a lot of information on a student’s communication style based on how quickly he or she responds, their tone, and their follow up. “It’s another avenue of feedback.” Deloitte is incorporating video technology as needed, and Schmidt says it’s working well. “We receive resumes from outside our traditional target schools where the reality of proximity precludes a face-to-face interview,” he says. “That’s when we incorporate video.”

“Recruiting is still a personalized process. Being face-to-face helps to connect with the students better.” to Denver for a first interview. We’re seeing more first interviews taking place via Skype.” Preparing for a video interview adds another level of learning, skill development, and stress to the interview process. “We talk about how the area behind you looks when you’re on camera, how you look on camera, whether a dog is barking in the background, or your roommate is doing something crazy behind you,” Owens says. “Not only do students have to prepare for the interview itself, but also they have to prepare for any technological issues that may come up. It’s stressful in a different way.” Last fall, EY piloted a virtual interview program. The firm did not do any live, face-toface first interviews on campus and relied solely on video. This past spring, the firm’s first interviews were entirely pre-recorded. Each candidate had up to three minutes to answer the same five questions. Selected candidates were invited for face-to-face interviews. Criner says the pre-recorded videos sped up the recruiting process and provided flexibility for both the firm and the interviewees. Ironically, the pre-recorded interviews make students more nervous than a face-to-face interview. “The good thing is that students can practice, and they have multiple attempts to record their answers. We just see the finished product,” she says. Gustafson says students have commented that the increased use of technology has depersonalized the interview process. “We have a tendency to want to mass email and invite people, but feedback has shown that students consider it impersonal,” she says. “That’s been a challenge.” With that said,

While Pierce agrees video interviews are becoming more common, especially when candidates are based in a state as large as Colorado, he’s still a fan of the face-to-face interview. “Recruiting is still a personalized process. Being face-to-face helps to connect with the students better,” he says. “And they get a better idea of our firm’s culture and environment. It should be a two-way street. From a candidate perspective, you still have to sell yourself. It’s still about submitting a resume. It may be submitted electronically or completed online versus physically writing it out, but it still comes down to meeting face-to-face and selling yourself to that company.” WHAT HASN’T CHANGED: KNOWING YOUR STUFF Some traditional things about getting a job in the accounting profession remain. “You still have to know your stuff,” Owens says. And once you get past the first interview, the second interview is pretty standard. “If a firm brings you in, you’re technically competent. Now, it’s looking for that good fit. You need to do your research, know the company, and be prepared for the interview. That’s all still the same.” Pierce adds that students still need to be able to share their goals and show their personalities too. “Accounting is a people business. It’s about understanding the concepts, looking at information, following instructions, and then talking with people, asking questions, and analyzing. We can teach some things, but you have to have the drive.”

July/August 2018 | www.cocpa.org


MOVERS & SHAKERS The American Institute of CPAs (AICPA) named Matthew Rosenberg, CPA/PFS, president of RoseCap Investment Advisors, winner of the 2018 AICPA Outstanding Young CPA Award in Honor of Maximo Mukelabai. Rosenberg was recognized for his numerous civic and volunteer activities in Mesa County, Colo., as well as his dedication to educating the future pipeline of accounting professionals as a tenured professor at Colorado Mesa University (CMU).

MARY-MARGARET HENKE, CPA Congratulations to Mary-Margaret Henke, CPA, Senior Vice President and General Auditor, Western Union, Englewood, who was named the University of Denver School of Accountancy’s 2018 Alumna of the Year. PEGGY E. JENNINGS, CPA Congratulations to Peggy E. Jennings, CPA, Eide Bailly LLP, Denver, who was named a 2018 Woman of Distinction by the Girl Scouts of Colorado. KRISTIN HOLTHUS, CPA Congratulations to Kristin Holthus, CPA, Director of Finance and Operations for Anton Collins Mitchell LLP, Denver, who was named 2018 Emerging Leader of the Year by the CPA Firm Management Association (CPAFMA). The award honors an individual who demonstrates dedication to the CPA firm management profession through leadership, teamwork, and integrity. EKS&H LLLP, PLANTE MORAN EKS&H LLLP will join Plante Moran, October 1, 2018, and become the 11th largest accounting, tax, consulting, and wealth management firm in the U.S. with more than 3,000 professionals working in 27 offices to serve national and international clients in the middle market. Together, the firm will have offices in Colorado and throughout the Great Lakes region, as well as in China, Mexico, India, and Japan.

“From volunteering in his local area to serving as a college professor and mentor for the next generation of CPAs, Matt’s activities truly reflect the values represented by this award,” said Mark Koziel, CPA, CGMA, Executive Vice President of Firm Services for the Association of International Certified Professional Accountants. An AICPA and COCPA member, Rosenberg currently serves on the Board of Directors for the Grand Junction Area Chamber of Commerce. He has held board positions with a variety of organizations including the Grand Junction Community Hospital Foundation and Back the Badge. He is active in STRiVE Colorado, a non-profit that helps supports individuals with developmental disabilities and their families. In 2016, he organized Tulips & Juleps, a Kentucky Derby-themed fundraiser to benefit STRiVE’s Children’s Services program for early intervention of child autism. Rosenberg has been on the CMU faculty since 2011. He has served as an advisor at CMU’s incoming student orientations, and he counsels his students on selecting majors and choosing classes that will best prepare them for their careers. He earned undergraduate and graduate degrees from The University of Texas, and he played on the Texas Longhorns 2002 NCAA national champion baseball team. “I’m honored to be the recipient of the 2018 AICPA Outstanding Young CPA Award,” said Rosenberg. “Like Maximo Mukelabai, I began a career in banking and was drawn to accounting. What drew me in was the opportunity to apply a CPA’s skill set by helping individuals and institutions through investment advisory services. I believe CPAs are well suited to this role, and I encourage students to consider a career as a CPA financial planner.” Congratulations, Matt!

Your career should be a marathon, not a sprint. We have you every step of the way.

303.830.1120 ∙ www.acmllp.com/careers Boulder ∙ Denver ∙ Northern Colorado ∙ Laramie 32

NewsAccount | July/August 2018

To Announce and Advertise in NewsAccount To request placement in Movers & Shakers, email announcements and photos to Mary E. Medley, mary@cocpa.org, and note in the subject line, “For COCPA Movers & Shakers.” Announcements for individuals are published for COCPA members only. Content may be edited for space and may be declined for publication. To advertise in NewsAccount, go to www.cocpa.org/advertiseand-sponsor to review the details and download the media kit. For more information, contact Carley Cave, carley@cocpa.org.

IN MEMORIAM William F. “Bill” Ezzell, Jr.

JUNE 3, 1949 - APRIL 28, 2018 Over the course of his distinguished career, Bill made an indelible mark on the accounting profession. He was a fierce advocate for students on the pathway to becoming a CPA and the educators who teach them. He served on the AICPA Board of Directors from 1998-2004 and as its Chairman from 2002-2003. In addition, he served as President of the Board of Trustees of the AICPA Foundation and was one of the original six members of the Pathways Commission. In 2009, Bill was awarded AICPA’s highest service recognition, the Gold Medal for Distinguished Service, and in 2011, the American Accounting Association recognized him with the Outstanding Service Award. In 2012, Bill retired from Deloitte LLP after 37 years as an audit professional and the firm’s lead partner on legislative and regulatory matters. Although retired, his service to his profession continued through various volunteer opportunities and involvement with the North Carolina Association of CPAs. In 2017, Bill was elected ChairElect of the NCACPA Board of Directors and was to be installed as Chair in mid-May. Bill was an honorary COCPA member, the Board having recognized him for his support of the Colorado CPA profession in numerous ways. In 2002, Bill inspired us at the inaugural CPAs Make a Difference celebration when he talked of how he came to be a CPA. He reprised his keynote speaker role five years later and again at the 10th celebration in 2012. When the Society celebrated its 100th anniversary and the Educational Foundation sought to raise $1M for accounting scholarships through the Centennial Scholars Campaign, Bill was the first to say yes when asked to participate in filming the appeal video. At every opportunity, Bill shared his wisdom, engaging sense of humor, and love of the profession with others. I was fortunate to serve with Bill on the AICPA Foundation during his term as its president, privileged to attend AICPA Council meetings he made memorable, and honored to represent the COCPA at his memorial service, May 6, in Arlington, Virginia. Never one to demand the spotlight, Bill nonetheless lit up any room into which he walked, with a smile as bright as a Carolina Blue sky. He loved his family, his colleagues and friends (often one and the same), the New York Times crossword puzzles, the beach, and Legos. He loved Colorado, spending time with students, engaging in political discourse, and being a CPA. He regaled us with his bemusement at hotel alarm clocks, unfamiliar banquet foods, and travel adventures. He left us marked forever by his passion for the profession and his joy for making things right. We all are richer for Bill having been in our world. Mary E. Medley

We extend our sympathy to the families and friends of the following COCPA members: Willard “Bill” Harnden Member since 1955, Denver, Colorado Hugh S. Hatcher Member since 1964, Aspen, Colorado

CLASSIFIEDS OFFICE SPACE AVAILABLE $500/month shared office space for rent in Castle Rock. Beautiful office suite has 108 square foot office with shared common areas. The office includes internet, large conference room, reception area, kitchen, copier, and free parking. Contract work available. Tax Professional preferred. Send responses to jodi@castlerockcpas.com. PRACTICE FOR SALE, PURCHASE OR MERGER Northern Colorado CPA practice for sale, $85K annual tax prep revenues, primarily individuals and some S-Corp/Partnerships. There is a seasonal EA that would like to continue prepping. Please email your inquiries to carley@cocpa.org (Box #120940). Selling your firm is complex! ACCOUNTING BIZ BROKERS can help! We have been selling CPA firms for over 13 years, and we know how to simplify the process and bring you the win-win deal you are looking for. We have a large database of active buyers. We work with industry specific lenders ready to assist buyers with financing. We are experienced, professional, and confidential. Contact us today to receive a free market analysis or to start the sales process. Current Listing: Denver Area Gross $330k. Kathy Brents, CPA CBI at 866-260-2793 or Kathy@AccountingBizBrokers.com, or visit our website at www. AccountingBizBrokers.com. CPA Firms or Partners. We represent a number of quality CPA firms and individuals who are looking to merge, acquire, or sell their practices to other CPA firms or partners with business. Locations are in the Metro Denver, Boulder, and Evergreen areas. This is an opportunity to ensure your future as well as help your clients by expanding your services to them. Why settle when you can select? Established in 1939. For further information, please contact Phil Rubeck at D&R Associates of Colorado: 720-446-7020, or email dandrassociatesofco@aol.com. SITUATIONS WANTED Kerry L. Shackelford CPA LLC, a boutique CPA firm in Evergreen, Colo., specializes in providing competitively priced SOC1s, SOC2s, and HIPAA Compliance audits and seeks teaming opportunities with other CPA firms or referrals from firms not offering such services. Contact Kerry at 720-388-8695 or kerry@klshackelfordcpa.com if interested.

Contributions in Bill’s honor may be made to the North Carolina CPA Foundation, PO Box 80188, Raleigh, NC, 27623, or to the AICPA Foundation, 220 Leigh Farm Road, Durham, NC 27707.

July/August 2018 | www.cocpa.org


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