COCPA NewsAccount - May/June 2020

NEWSACCOUNT COLORADO SOCIETY OF CPAs • MAY/JUNE 2020

New COCPA Chair

SHARON LASSAR

Doing Good in the World: Every Gift Matters PAGE 14

It’s All About Culture: One Firm’s Story PAGE 16

Go Opposite in the Face of Uncertainty PAGE 22

2

NewsAccount | May/June 2020

14

Contents

16

Features 2

Getting to Know Her: Welcome COCPA Chair Sharon Lassar If you drew lines on a map to trace the incoming COCPA Chair’s career path, you’d see a lot of zigging and zagging. We’re fortunate she’s here to encourage and educate accounting students, nurture professional relationships, and lead the Colorado accounting profession this year.

6

Data Security Considerations to Help Weather a Pandemic Cybercriminals love a crisis, and panic-inducing events such as the COVID-19 pandemic prove to be lucrative opportunities for the unscrupulous to capitalize on both the crisis and fear.

14

16

20

22

Doing Good in the World: Every Gift Matters Giving back is just what Hillary Morgridge’s family did. Whether it was serving lunch at a local soup kitchen with her mom, or cleaning up the beach where they lived, Morgridge’s philosophy has always been: “You should help take care of the area you love.”

It’s All About Culture: One Firm’s Story In February 2019, KPMG US appointed its first Chief Culture Officer as part of “an intentional, deliberate, and proactive focus on the firm’s culture,” says Claudia Saran, who stepped into the position after 20 years of advising clients and leading the firm’s People and Change practice.

Help Wanted: Public Accounting Firms Still Look to College Campuses On-campus recruiting programs continue to be one of the most popular ways for accounting firms to connect with students, but technology is changing the way it’s all playing out.

Go Opposite in the Face of Uncertainty As COVID-19 uncertainty spreads, the global community is finding out that reacting quickly to the societal and economic disruptions the virus creates, no matter how agile a reactor you are, is not good enough.

20 Departments 2

Chair Column

24

Movers & Shakers

25

In Memoriam, Classified Ads

CONNECT WITH COCPA

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

May/June 2020 | www.cocpa.org

1

CHAIR COLUMN

NEWSACCOUNT

A bimonthly publication of the Colorado Society of Certified Public Accountants Vol. 66, No. 1 May/June 2020

Officers

Sharon S. Lassar, Chair Randy L. Watkins, Vice Chair Peter J. Derschang, Treasurer Benjamin T. Hrouda, Immediate Past Chair Mary E. Medley, Secretary

Directors

Jim Brendel, Toby Clary, Audra Dixon, Renny Fagan, Mary-Margaret Henke, Kelly Kozeliski

Editorial Board

Jack Allgood, 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 $12.00 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 = 6,388 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 6,312; free distribution by mail = 0; free distribution outside the mail = 20; total free distribution = 20; total distribution = 6,332; office use, leftovers, spoiled = 56; returns from news agents = 0; total sum = 6,388; 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.

Getting to Know Her WELCOME CHAIR SHARON LASSAR

BY NATALIE ROONEY

I

f you drew lines on a map to trace the incoming COCPA Chair’s career path, you’d see a lot of zigging and zagging. Today, Sharon S. Lassar, PhD, CPA (Florida) is the John J. Gilbert Endowed Professor and Director of the University of Denver’s School of Accountancy. It took a few stops along the way before she landed in Denver. We’re fortunate she’s here to encourage and educate accounting students, nurture professional relationships, and lead the Colorado accounting profession as the 2020-2021 Chair of the Board of Directors. Here’s her story.

STARTING IN THE EAST Lassar grew up in Wheeling, West Virginia, and stayed local to pursue her bachelor’s degree in accounting from West Virginia University. As a dorm resident adviser, one of her duties was to tutor students, and she experienced, first hand, the power education has to change lives. “That stuck with me,” she reflects.

Lassar’s first job out of college was in Arthur Young’s audit department. She requested and was assigned to the firm’s Boston office.

After just a year and a half, she learned of the firm’s policy of asking a newly promoted audit senior to move to the tax department to keep communication strong between the

She experienced, first hand, the power education has to change lives. two groups. The firm asked Lassar to make the switch, and she said she’d be happy to do so. There was just one small wrinkle: She didn’t really know all that much about tax.

The firm solved that dilemma by footing the bill for her to attend an evening master’s in taxation program.

While in Boston, Lassar joined the Institute of Management Accountants (IMA) and the Massachusetts Society of CPAs. Through those connections, she heard that Bentley University in nearby Waltham needed to hire a last-minute tax instructor for the upcoming academic year. She decided to apply. “At that point, I had been at AY for three-and-ahalf years,” Lassar recalls. “I had been thinking about what to do next. Teaching was an opportunity to return to changing people’s lives in a meaningful way.”

Lassar accepted the semester-long assignment and once again was struck by the power of education. She also realized her calling was in the world of academia. It was time to earn her PhD if she wanted to build her career.

A SERIES OF UNFORTUNATE EVENTS ENDS WELL Lassar was accepted into the University of Illinois PhD program and headed to America’s heartland. A series of unfortunate events punctuated her time in Illinois. When she arrived at her rental home, the driveway

was covered with two feet of frozen snow, leaving her to park on the street, where city snow plows promptly boxed her in. A few weeks later, after proctoring an evening exam, she set out on the perilous drive home in a blizzard. The good Samaritan who rescued her and her car from the side of the road damaged her axle with the tow.

When spring finally arrived, she and a deer met when it ran into her small car. “After a semester, I realized Illinois wasn’t a great fit for me,” she says. “It was a great school but not the best environment for someone who was 26 and single. I wanted to be back in a bigger city.”

Lassar’s doctoral advisor suggested transferring to the University of Southern California.

So she packed up again and continued west.

“USC and LA were breaths of fresh air,” Lassar says. “Everything finally went right.” Once drawn to the west, the feeling of open spaces and the virtue of open minds never left her.

Her first postdoc faculty position took her to the University of Arizona. A few years later, her husband’s work took the young family to Florida. “When our youngest left for college,

I headed west again. I was so fortunate that DU was looking for a new director at the same time I was looking to leave my position as Director of the School of Accounting at Florida International University.”

A LIFE CHANGING PROFESSION Lassar says, like a lot of people, she ended up an accounting major by accident. “I originally wanted to be an architect,” she says, “but WVU didn’t offer it, so I had to find something else.” Friends were studying accounting, and she decided to give it a try. “Accounting resonated with me. I found the material made sense. I had a very high reading comprehension which helped me read and understand all of the standards and regulations.” Logic and math also came easily to her. “Accounting brought all of my skills together.”

What Lassar says is so great about being an accounting professor is seeing her love of the profession and education intersect.

“Education changes lives, and bringing people into this profession changes lives,” she says. “Accounting is truly a profession CONTINUED ON PAGE 4

LEADERSHIP S U M M I T

SAVE THE DATE: June 19, 2020 Participate in this engaging, fun, leadership event, and contribute to shaping the future direction for COCPA, AC (After COVID-19).

Scott Heckman will guide us through a series of compelling exercises to help us set our priorities, define actionable initiatives, and shape what success looks like for our future.

As a former Managing Director in Deloitte’s consulting practice, Scott has facilitated hundreds of leadership experiences, helping teams work together to get where they want to go.

Join Scott and COCPA Chair Sharon S. Lassar for what promises to be an eye-opening and meaningful experience. Watch your inbox for details.

Don’t miss this one!

NOTE: Leadership Summit will be postponed to a future date if restrictions on in-person gatherings are still in place.

May/June 2020 | www.cocpa.org

3

CHAIR COLUMN CONTINUED FROM PAGE 3 where you can work hard and succeed. You don’t have to start out as a superstar. This profession is as much about perseverance as it is about opportunities one might gain through social status. Accounting opens doors to anyone who is willing to dedicate themselves to it.”

Lassar says she has seen people start in accounting and end up as CEO because of everything they learn about business along the way. “I love seeing students from modest backgrounds end up enormously successful because they chose to start their careers in accounting.”

One advantage Lassar’s academic career brings to the COCPA chair role is her different view of the big picture. She says being in academia means not only watching trends in the business community but also understanding the demographic trends of college enrollment. Knowing and understanding the habits and work styles of students coming into the university, how they’re taking those habits into the workforce, and how that might have an impact on the profession going forward is something she monitors closely.

“We’re thinking about how to train students for jobs that don’t yet exist,” she says.

NAVIGATING CHANGE Some of the biggest challenges ahead for the profession are coming from technology, Lassar says. And she hopes to help COCPA members continue to prepare. “We are navigating all kinds of changes right now,” she says. “The technology we rely upon is developing so quickly that we’re constantly learning which tools are best to use in which circumstances. Mastering those will continue to be a challenge.” Artificial intelligence is just one example. “It’s making our lives better, but there’s also the challenge of determining how best to employ it.”

Cybersecurity issues continue to grow, as well. “We rely on our data being stored in a cloud, and keeping it secure is going to be an unending issue,” Lassar says.

Planning for the 2020-2021 COCPA year, from left: Mary Medley, Chris Telli, Tawnya Ramirez, Sharon Lassar, Ben Hrouda, and Randy Watkins.

ingly important.” She points to anti-licensing legislative proposals sweeping the country as one example. “A U.S. House of Representatives subcommittee wants to have more influence on accounting standards setting.

President Trump’s budget proposes reducing costs by folding PCAOB operations into the SEC. The COCPA has to remain at the forefront of advocacy while still navigating the daily twists and turns of the profession.

We need to be able to call upon one another as we work to understand complex laws, implement change in our organizations, and strengthen friendships as we move forward in this business environment.”

an even better connector and collaborate on initiatives that benefit our profession.”

And then there is, of course, the workforce.

“We’re competing for the same talent the STEM fields are working to attract, and there is such a national push for students to go into STEM,” she says. “Developing our workforce will be critical.”

LOOKING AHEAD Lassar is looking forward to increasing the COCPA’s member focus this year. “We have all relied on the COCPA to be our advocate in the legislature, and that will be increas-

PERSONALLY SPEAKING Lassar and her husband, Dr. Walfried M. Lassar, Ryder Professor with Florida International University’s marketing and logistics faculty, met and married in California.

NewsAccount | May/June 2020

Now, with Walfried in Florida, Sarah in New York City working for JP Morgan, Walfried, Jr. in Chicago at a scientific instruments company, Lassar in Denver, and daughter Stephanie in San Francisco working at an ad agency, the family has every U.S. time zone covered.

“Being the COCPA Chair will allow me to be

Lassar also is looking forward to growing her professional network of CPAs. “I like being a facilitator of connections and introducing people to others who can help them grow,” she says. “Being the COCPA Chair will allow me to be an even better connector and collaborate on initiatives that benefit our profession.”

4

They reared their three children in Miami, moving there when their eldest child, daughter Sarah, was five years old. The children are all trilingual after studying in a German immersion program and attending Spanish summer camps. “Miami was a great place for them to grow up. Then they all left,” Lassar laughs.

In her free time, Lassar loves working with her hands – cooking, sewing, gardening, and repurposing things, whether that’s refinishing furniture or using fabric from curtains to make new things. We look forward to how she’ll use her talents, expertise, and perspective to make a difference for the COCPA. Email Sharon Lassar at slassar@du.edu.

AT THE COCPA

From the COCPA Frontline

I

t’s April 15, 2020, as I write this - one month since we closed the COCPA physical office, and your COCPA team shifted to remote work, full time. We knew, thanks to moving almost all functions and support services to the cloud several years ago, we could make the transition. We didn’t know, then, how long we’d be gone from Belleview Tower. By the time you read this, we still may not know. But, what I know, for sure, is this: We are here for you while we’re all “safer at home.”

In the past several weeks, we’ve scheduled and offered 50+ webcasts and webinars (with more being added each week), along with virtual meetings, to update members on the complexities of new legislation such as the CARES Act and changes affecting Colorado candidates sitting for the Uniform CPA Examination. Can’t find what you need?

Let us know, and we’ll do our best to find it for you.

We’ve learned new acronyms, along with PPP, such as EIDL and ERC, and new concepts like social distancing. We confirmed that accounting services constitute essential, critical services, enabling CPAs to continue providing valuable services to clients, employers, and nonprofit organizations. Seeking to understand a new concept?

Ask us. We have people, and we know people.

We launched cocpa.org/COVID-19 to provide resources ranging from federal and state filing extensions to details on the Paycheck Protection Program to online services available through the AICPA. Something missing? Let us know, and we’ll engage our network to obtain it for you.

Daily, we’re responding to your inquiries via chat online at cocpa.org; through CONNECT, the COCPA members-only online community; and through email and telephone. You’ve asked us questions we could answer quickly and questions we needed to research. Just today, a member asked about the property tax declaration filing extension, which the Colorado Board of Equalization released as an Emergency Rule, April 9th. You can find it and much more at the new web page where we continually update existing information and add new information.

Also, we launched the new COCPA Talent Platform at cocpa.org/talent. Powered by OpHaus, this new service matches professional talent and hiring managers in real time, helping both find the best fit without generic job board postings or expensive recruiting fees. Hiring managers are linked, using specific key skills and experience, with candidates (or interns) who have completed platform-guided profiles to create the perfect match. Candidates create personalized profiles which are private until they choose to make them public on the site. Listings include full time positions, project work, and nonprofit/volunteer positions for those looking to give back through community service.

These are challenging, difficult, anxious times. Disruption is happening everywhere, creating uncertainty, unpredictability, and financial as well as personal stress. Nonetheless, we’re here to help.

Call on us. Count on us. Now, more than ever, no matter what.

Mary E. Medley, CEO

PREVIOUS CATEGORY

NEW COCPA MEMBERSHIP CATEGORIES The COCPA membership dues structure changed, effective, May 1, 2020. You’ll see to the right the simplified structure, depending on whether you are a CPA, a retired CPA, a non-CPA Associate, or a Student.

WHAT DO YOU NEED TO DO? If your membership is set up on auto-payment, no action is needed. Your annual or monthly payment will be processed on your next renewal date with the credit or debit card on file. If you pay by check, your membership invoice will reflect the new dues structure.

If you need assistance, please contact your COCPA Member Services team at www.cocpa.org, 303-773-2877, or 800-523-9082.

We’re here for you, 24/7/365. Let us know how to be helpful to you, especially now. Thank you for being a COCPA member!

NEW CATEGORY

CPA, 6+ years CPA, 4-6 years CPA, 0-3 years

Fellow Member $360 annually / $30 monthly

Semi-retired CPA Out of state/ Out of Country CPA Retired CPA

Non-CPA Associate

Student

Retired $72 annually / $6 monthly

Associate $252 annually / $21 monthly

Student $24 annually

May/June 2020 | www.cocpa.org

5

RISK MANAGEMENT

Data Security Considerations to Help Weather a Pandemic ​ ybercriminals love a crisis, and panic-inducing events such as the COVID-19 pandemic prove to C be lucrative opportunities for the unscrupulous to capitalize on both the crisis and fear. It’s no surprise that social engineering attacks tailored to exploit public unease surrounding the coronavirus are on the rise. One sophisticated attack falsely claimed to be from the World Health Organization. The phony email included an attachment purportedly containing updated safety measures and treatments for symptoms. It exploited the public’s hope for a swift end to the pandemic but, in reality, concealed malware designed to steal personal information.

T

he coronavirus pandemic has forced major changes to the way in which we work and carry out day-to-day activities. Millions of Americans have been required to adapt quickly in order to work remotely. For CPAs, the adjustment occurred during the height of the busy season. The shift from where CPA firm employees work has resulted in significant changes to the way practitioners interact with clients and collaborate with one another. Social distancing and limitations on in-person meetings have created heavier-than-usual reliance on virtual and electronic communication.

Just as working remotely enables CPA practices and their employees to continue to serve clients during the pandemic, the responsibility of every practitioner to secure confidential client data continues as well.

In light of the ongoing cyber threats caused by the pandemic environment, CPAs should exercise enhanced cautionary measures to avoid falling victim to schemes seeking to exploit security weaknesses and human psychology. Fortunately, both CPA firms and their employees can implement a number of measures to avoid such incidents and to protect and secure data.

ADDRESS THE RISKS OF ACCESSING SENSITIVE DATA REMOTELY Ideally, data should be encrypted, whether in transit or at rest. To access the firm’s systems remotely, employees may use home wireless networks, which may be less secure than accessing the same information from the office. Unsecured or less secure networks may offer a backdoor to malicious actors monitoring connections to harvest confidential information. For example, data sent in unencrypted form can be easily intercepted and stolen.

Security experts recommend using Virtual Private Networks (VPNs) to route traffic to the firm’s systems when working remotely, making it difficult for unauthorized parties to intercept the encrypted data, and render it unreadable.

REINFORCE SECURITY WEAKNESSES WITH PATCHES Just as viruses mutate, cybercriminals’ tactics to exploit and obtain access to sensitive data also evolve. Similar to vaccines, security patches are developed to help correct and address known vulnerabilities cybercriminals use to gain unauthorized access to devices or applications.

6

NewsAccount | May/June 2020

It is important for firms to periodically assess whether their devices and systems are up-to-date with security patches and antivirus solutions.

STAY ENGAGED WITH VENDORS The pandemic has shifted the preferred way to conduct meetings, conferences, and even social events, to online. With such a dramatic shift in a short period of time, a number of security weaknesses with certain platforms and vendors have been revealed. Many providers have responded with options for users to address security concerns. Rather than relying only on a vendor’s reaction to security weaknesses, consider proactively managing vendor discussions to understand the controls or practices they have in place to address security concerns.

For example, to support the shift to remote working environments, many firms already have implemented VPNs to permit employees secure access to firm resources. Consider discussing these changes with other vendors such as cloud service providers to determine whether this approach affects compatibility with the vendor’s technical requirements.

PROMOTE EMPLOYEE SECURITY AWARENESS Like showers and wearing clothes other than pajamas, data security may not be the first priority on a CPA firm’s growing list of matters to be tackled. However, it is essential during this critical period of disruption that employees be reminded of the importance of maintaining

Like showers and wearing clothes other than pajamas, data security may not be the first priority on a CPA firm’s growing list of matters to be tackled. cyber-security hygiene. Consider sending friendly reminders to firm employees that emphasize the importance of the following: •

Employees should use only firm-issued or approved devices to access company resources securely.

•

If employees are using personal devices for business purposes, they should strengthen the security settings on their devices.

Electronic work files from company resources should remain on company-issued or approved devices and not placed on personal devices.

•

Reinforce how to identify phishing emails: - Links and attachments from unknown or untrusted senders should not be opened without careful inspection. When an embedded address appears suspicious or unfamiliar, hover over the link to view the full URL, or use URL checkers to confirm the safety of a suspicious link before clicking.

- Do not respond to requests for sensitive information (i.e. account details, tax return information), especially if urgent, without verifying the validity of the requestor, even colleagues and clients. If the request is obtained via email, always confirm directly with the requestor using alternative, verified contact information such as phone numbers.

•

List the preferred tools and platforms employees are to use such as cloud storage platforms, portals for sharing information, and virtual conferencing tools.

•

Provide employees with clear guidance on how to report technical issues and empower them to report suspicious activity.

EMPLOY STRONG AUTHENTICATION PRACTICES Using strong passwords and multi-factor authentication to enhance security measures is nothing new. Now is not the time to allow these security measures to lapse or weaken. Refer to best practices outlined in NIST Special Publication 800-63 Digital Identity Guidelines​for guidance, and continue to utilize and employ strong password and authentication practices, including:

The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of the authors’ knowledge as of the date of the article. Accordingly, this article should not be viewed as a substitute for the guidance and recommendations of a retained professional. In addition, CNA does not endorse any coverages, systems, processes or protocols addressed herein unless they are produced or created by CNA. Any references to non-CNA Web sites are provided solely for convenience, and CNA disclaims any responsibility with respect to such websites.

Examples are for illustrative purposes only and not intended to establish any standards of care, serve as legal advice, or acknowledge any given factual situation is covered under any CNA insurance policy. The relevant insurance policy provides actual terms, coverages, amounts, conditions, and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice.

“CNA” is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporation subsidiaries use the “CNA” trademark in connection with insurance underwriting and claims activities. Copyright © 2020 CNA.

TAX STUDY GROUPS

•

Password length: Preferably 8 – 20 characters

Boulder/Longmont Tax Study Group

•

Password complexity: A combination of capital and lowercase letters, numbers, and special characters

AT THE MEADOWS BRANCH PUBLIC LIBRARY

•

Password protection: Passwords and user IDs should be never shared.

FINAL THOUGHTS The coronavirus has been widely referred to as the “invisible enemy.”

This is a reminder that the invisible or intangible can have as significant an impact as physical threats, such as accidents or crime.

Security risks take on similar characteristics, with the impact made tangible in the form of information compromised, reputation damaged, or dollars lost.

Depending on the size of the CPA practice, the aforementioned tips and advice may seem daunting and technical to tackle. Just as the global response to the COVID-19 pandemic has been multi-faceted, requiring collaboration and support, a CPA firm’s approach to addressing data security risk should be similar. Firm leadership sets the tone and prioritizes data security. IT professionals establish security protocols to address the firm’s data security risk. And everyone is responsible for doing his or her part in maintaining cybersecurity hygiene.

This information is produced and presented by CNA, which is solely responsible for its content. Continental Casualty Company, a member of the CNA group of insurance companies, is the underwriter of the AICPA Professional Liability Insurance Program.

Wednesday, May 20 and Wednesday, June 17 This informal roundtable discussion group meets at the Meadows Branch Public Library, 4800 Baseline Rd., Boulder, BYO Bag Lunch. Additional 2020 Meeting Dates: July 15, Aug. 19. For additional information, contact Lynn M. Mitton, CPA, MT, MPA, 303-499-7445, or email lynn@flewellingcpa.com.

Denver Tax Study Group Tuesday, May 19 and Tuesday, June 23 This informal roundtable discussion group meets over lunch, the last Tuesday of most months, usually at the COCPA office, 7887 E. Belleview Ave., Ste. 200, Englewood.

Additional 2020 Meeting Dates: July 28, Aug. 25, Sep. 22, Oct. 27, Dec. 8. Register at www.cocpa.org. Future meetings may be held virtually as necessary in response to COVID-19.

May/June 2020 | www.cocpa.org

7

AUDITING STANDARDS UPDATE

ASB Delays SASs No. 134–140 Effective Dates

BY KEN TYSIAC

On April 20, the AICPA Auditing Standards Board (ASB) delayed the effective dates of seven private company auditing standards for one year, providing relief to audit firms amid the challenges created by the coronavirus pandemic. The delay is designed to ensure that firms will be able to implement the standards in the highest quality manner possible when distractions due to the pandemic subside.

T

he standards are primarily related to substantial changes to the auditor’s report. They now will take effect for audits of financial statements for periods ending on or after Dec. 15, 2021.

Early implementation is permitted, and the ASB expressed its intent that SASs No. 134–140 be implemented at the same time. Firms that already have methodologies or tools in place and implementation planned may wish to move forward with those plans despite the change in the effective date, according to AICPA Chief Auditor Bob Dohrer, CPA, CGMA.

SASs No. 134–140 are interrelated and, within this group, subsequent SASs amend previously issued SASs. The effective dates of SASs No. 134–140 were aligned so that they would be implemented at the same time. Accordingly, the ASB recommends that all these SASs be implemented concurrently.

Ken Tysiac is the Journal of Accountancy’s editorial director. Contact him at Kenneth.Tysiac@aicpa-cima.com.

COCPA Talent Platform

The direct connection between hiring managers and professional talent

Find your perfect professional match at COCPA.org/talent

8

NewsAccount | May/June 2020

CPA EXAMINATION UPDATE

CPA Exam Testing Period Extended to June 30 CONTINUOUS TESTING COMING, JULY 1

I

n anticipation of the reopening of Prometric test centers and in response to the COVID-19 situation, NASBA, AICPA, and Prometric implemented an emergency testing period to provide additional testing opportunities. The 2020 Q2 testing window is extended from June 10, 2020, to June 30, 2020.

This will enable candidates to retake sections while information is top of mind and may shorten the time needed to complete the four-section exam.

Also, NASBA has extended all NTSs expiring between April 1 – June 30, 2020, until September 30, 2020. Prometric will waive all rescheduling fees. The Colorado State Board of Accountancy has accepted these changes, and Colorado candidates will be granted the extension automatically.

Continuous Testing will replace the existing CPA Exam Testing Window model, which permits candidates to test only during designated time frames each calendar quarter.

For the latest information, visit nasba.org frequently for important messages and continued updates.

NEW TESTING MODEL Also, NASBA, AICPA, and Prometric announced Continuous Testing for CPA Examination candidates, beginning July 1, 2020. Under the new Continuous Testing model, candidates will have the ability to take the exam year-round, without restriction, other than waiting to receive scores from prior attempts of the same section or when there is a major change to the exam.

To learn more about continuous testing, visit nasba.org. For the status of test centers and closure details, go to prometric.com/closures.

AICPA PCPS

PPP Resources for CPAs Now Available

O

ne of the most significant opportunities created by the recently enacted CARES Act is the new Paycheck Protection Program (PPP), designed to provide access to cash so that businesses can keep paying their employees and other expenses such as health insurance premiums, rent or mortgage payments, and utilities. This important financial relief will help small businesses return to being fully operational quicker once conditions improve. Use the Paycheck Protection Program overview guide to help your clients understand the

LINKS

PPP funding option including eligibility, how the maximum loan amount is calculated, forgiveness considerations, and more.

This tool is an example of the turnkey practice management tools and resources PCPS delivers. PCPS is an add-on firm membership section within the AICPA. A PCPS firm membership, at only $35 per CPA, up to a maximum cost of $700 per firm, is a worthwhile investment for a broad range of practice management resources. Find out if you are already a PCPS member or register for a virtual tour to learn more.

Paycheck Protection Program Overview Guide: bit.ly/AICPA-PPP-Guide

PCPS Virtual Tour: bit.ly/PCPS-Tour

May/June 2020 | www.cocpa.org

9

TAXATION

New IRS Cryptocurrency Tax Guidance and Key Highlights

BY SHEHAN CHANDRASEKERA, CPA

Until fall 2019, the Internal Revenue Service (IRS) had not provided any guidance on cryptocurrency taxation since Notice 2014-21 issued in 2014. After nearly five years, on Oct. 9, 2019, the IRS issued new guidance in the form of FAQs and Rev. Rul. 2019-24.

T

he new guidance preserves the “property” treatment for cryptocurrency for tax purposes and sheds more light into some controversial areas in this fast-changing space. It should be highlighted that this new guidance only will be applicable to taxpayers who hold cryptocurrencies as a capital asset. This article highlights the key points you need to know.

DEFINITION For the first time, the IRS provides a definition for cryptocurrency: “Cryptocurrency is a type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. A transaction involving cryptocurrency that is recorded on a distributed ledger is referred to as an “on-chain” transaction; a transaction that is not recorded on the distributed ledger is referred to as an “off-chain” transaction.” IRS Notice 2014-21 only defined and explained virtual currencies and convertible virtual currencies.

10

NewsAccount | May/June 2020

FORKS In the crypto world, a fork happens when a distributed ledger undergoes a protocol change and a diversion. After a hard fork, legacy users end up with a new cryptocurrency in addition to the old coins in their wallets. A soft fork is still a diversion of the legacy blockchain protocol, but the users will not end up with a new coin.

Hard Forks and Soft Forks: One of the most controversial positions described in the new guidance is that new coins received after a hard fork are taxed as ordinary income. The ordinary income realized is equal to the fair market value of the new cryptocurrency when it is received. If you do not receive new cryptocurrencies after a hard fork, you will not have any taxable income. This situation is called a soft fork.

This ruling is controversial because there are myriad scenarios in which users may face taxable income without knowing about it.

For example, millions of Americans received BSV as a result of a bitcoin cash (BCH) hard fork. Due to limited liquidity and delisting of the asset on many exchanges, these taxpayers are now faced with income on this asset that is difficult for them to dispose of.

VALUATION The IRS guidance specifies exactly how to value crypto assets for tax purposes. If you trade crypto on an exchange like Coinbase or Binance.us, the dollar value for crypto traded should be determined by the USD price at that specific exchange. This means using sources like CoinMarketCap would not be acceptable anymore in converting cryptocurrency units into USD. If you traded crypto peer-to-peer, via a decentralized exchange or some other method that did not involve an exchange, the fair market value of the crypto traded should be determined by referring to “a blockchain explorer that analyzes worldwide indices.” If you do not use a blockchain explorer value,

you must establish that the value you used is an accurate representation of the cryptocurrency’s fair market value.

Finally, if you receive cryptocurrency for which you cannot find a published value (common in the crypto world), the fair market value of the crypto received is equal to the fair market value of property or services exchanged.

Following these valuation methods may be cumbersome for both taxpayers and tax practitioners, but there are tech tools available to automate the valuation process and generate reportable amounts in USD. BASIS Another major update in the new guidance is that specific identification is now officially an accepted accounting method for trading crypto assets. To successfully identify a specific unit, the information must include: • The date and time each unit was acquired; • The basis and the fair market value of each unit at the time it was acquired; • The date and time each unit was sold, exchanged, or otherwise disposed of; and • The fair market value of each unit when sold, exchanged, or disposed of, and the amount of money or the value of property received for each unit.

Tech tools are available to automate the valuation process and generate reportable amounts in USD. market value or the cost basis at the date of donation. This allows you to donate appreciated crypto assets to charities and bypass capital gains taxes.

PAYMENTS The IRS has confirmed that if you pay somebody in cryptocurrency and/or use crypto to purchase goods and services, that will trigger a capital gain or loss. The gain/loss is equivalent to the difference between cost basis and fair market value at the date of disposition.

TRANSFERS Transferring crypto from one wallet (or exchange) to another is a nontaxable transfer. These transactions may be included in Form 1099-K issued by crypto exchanges, but even if you receive a 1099-K, those transactions will not be taxable. This is a great relief for taxpayers who received various tax notices (CP2000, 6173, 6174-A and

6174) related to mismatching 1099-Ks. The majority of the items mentioned in the new FAQs are taxpayer friendly. Solid substantiation of your crypto transactions and proper reporting based on new guidance will be extremely important for taxpayers in the future.

Shehan Chandrasekera, CPA, is head of tax strategy at CoinTracker. In addition, he leads the Technology & Startup niche at JAGArgueta CPAs, Houston, and serves as the associate director for the Houston Blockchain Alliance. Contact him at shehan@cointracker.io.

Reprinted with the permission of Today’s CPA, a publication of the Texas Society of Certified Public Accountants. This article represents the opinions of the author and are not necessarily those of the Texas Society of Certified Public Accountants.

If you cannot specifically identify the units, you must default to first-in-first-out (FIFO).

Since cryptocurrency exchanges are not issuing Form 1099-B, it becomes taxpayers’ and/or tax practitioners’ responsibility to keep track of this information and calculate annual gains and losses. This is an extremely tedious task. Tax practitioners should consider using a reputable provider to aid in cryptocurrency accounting.

GIFTS AND DONATIONS If you receive crypto as a gift, you will not have to recognize any income. Determining the basis of the cryptocurrency gift received follows the general rules applicable to property donations; i.e., the basis of the gift received is dependent upon the gain or loss at the time you dispose of it.

Cryptocurrency donations will not trigger a gain or loss. If you have held the asset for more than one year, you are eligible for a deduction equal to the fair market value at the date of donation. If you have held the asset for one year or less, you are eligible for a deduction equal to the lesser of the fair

30 years experience in public accounting 25 years of service with Lang & Company, CPAs 9 years experience as a business broker for CPAs Providing buyer consultation as well as full service business broker services

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 Past Board Member of Colorado Association of Business Intermediaries

May/June 2020 | www.cocpa.org

11

ACCOUNTING STANDARDS

Making It Real: Revenue Recognition for Accounting Students

BY NATALIE ROONEY

In today’s for-profit world, meeting targets is key. From business owners’ and employees’ perspectives, this can mean the difference between a large bonus or being let go. From a stockholder’s perspective, it could mean the difference between selling or holding a stake in a company.

The most common measure used to gauge whether a company has met targets is revenue which is why revenue recognition is so important.

ASC 606 Accounting Standard Codification 606 (ASC 606), Revenue from Contracts with Customers, was originally scheduled to go into effect in 2016. The Financial Accounting Standards Board (FASB) delayed implementation until 2018 because of concerns over the difficulty of implementation. As a result, for most companies, the first 10-K’s utilizing the new standard came out in 2019.

Greiner says she first spends time understanding a client’s business, including the inner workings of legal agreements, ordering processes, distribution arrangements, etc., to understand who the customer actually is and what agreements together create an accounting contract. Identifying that customer is at the heart of revenue recognition, and that’s where she thought rideshare app Uber would make a great example.

ASC 606’s objective was to decrease the complexity of former models for revenue recognition by aligning how companies recognize revenue from contracts with customers. The guidelines cover the results of end-to-end processes, starting with contracts, going on to address pricing, quotes, and orders, and ending with revenue recognition.

ARE YOU MY CUSTOMER? On the surface, it may seem easy to know who the customer is. You open the Uber app, request a ride, and pay. You’re the customer, right? Not so fast, says Greiner.

The standard is impacting significantly how companies report expenses, as well as assets and liabilities on their balance sheets.

UNRAVELING REVENUE RECOGNITION The University of Denver School of Accountancy invited Danika Greiner, CPA, a manager in Accounting Advisory Services with KPMG LLP, Denver, and a former FASB staff member, to speak to Intermediate Accounting students about the real-world complexities of revenue recognition.

Greiner, who specializes in revenue recognition projects for her clients, was tasked with making the topic more interesting and understandable. “My goal was to give the students a real-life perspective on what may seem like a dry topic,” she says. “So often when you read a textbook, you’re given the facts and then left to do the plug and chug accounting. While revenue recognition may be presented that way for instruction purposes, in my experience working with the new standard, once you have all the facts to do the accounting, it’s relatively straightforward. It’s everything that comes before the accounting that can require digging deeper into the arrangement with a customer.”

12

NewsAccount | May/June 2020

“When multiple parties are involved, you can’t take for granted who the customer is,” Greiner explains. “There are all sorts of nuances, and now, namely because of ASC 606, companies are taking a fresh look at who their customers are and what their contract is with those customers. The result is not always intuitive.”

“When multiple parties are involved, you can’t take for granted who the customer is.”

Greiner walked the students through Uber’s stance on the matter.

In terms of ASC 606, step one is understanding who the customer is and the contract the company has with that customer. In Uber’s case, with the driver as an intermediary party, you have to think about who falls where in the continuum and what that means in terms of rights and responsibilities.

Rideshare companies describe themselves as “agents” who connect the driver to an end customer – the rider. The drivers are non-employee, independent contractors who own the cars they drive.

Uber took the position that it doesn’t have an obligation to riders.

Rather, it’s the drivers with whom Uber has a contractual revenue agreement. That means the rider falls out of the revenue contract equation.

On regular rides, rideshare companies recognize as revenue only the agency commissions paid to them by drivers who use their apps.

“It’s important to work more closely with legal counsel and sales and marketing to avoid using clauses in contracts that have a significant accounting impact.”

“But when Uber offered incentives to riders, and by identifying the driver as the customer instead of the rider, it caused Uber to account for these discounts or incentives as marketing expenses rather than as a reduction to the revenue contracts,” Greiner says. “The SEC saw reason to press on this.” Students understandably were surprised by the position.

Since these shared rides actually are provided by non-employee drivers and non-company-owned cars, they must be reclassified

under the new rules as agency transactions on which only commission revenue can be booked. The impact on Uber was huge: Its first quarter revenues fell from $3.4 billion to $1.5 billion under the revised accounting standards.

“Those are big numbers,” Greiner says. “Uber’s IPO was under scrutiny for the potential to have that number be subsumed into a general sales and marketing expense rather than a reduction to revenue.”

OPPORTUNITIES FOR CPAS Greiner says the implementation of ASC 606 provides opportunities for CPAs because the industry-neutral, principles-based standard prompts a deep dive into understanding how the revenue-generating business really works. Prior to 606, industry guidance and norms for subscriptions were used. “Those are now gone,” she says. “ASC 606 prompts us to reconsider what may have been brightline or an industry norm in the past.”

“This is an opportunity to become more aware of a company’s business practices. And, it’s important to work more closely with legal counsel and sales and marketing to avoid using clauses in contracts that have a significant accounting impact,” Greiner says. “Often, sales departments don’t realize what they’re doing, from an accounting standpoint. The new revenue recognition standard presents an opportunity for CPAs to work with other business units in a way they haven’t needed to before.”

WOMEN’S SUMMIT STRATEGIES FOR THE SUCCESSFUL WOMAN PROFESSIONAL

By Women, For Women

REGISTER FOR THE AUGUST 28 WOMEN’S SUMMIT TODAY AT

cocpa.org/Womenssummit

Nominate a leader in the profession Nomination Deadline: July 15 Women to Watch Awards for Emerging Leaders and Leaders of Note will be presented at lunch during the Women’s Summit.

For a nomination form, contact Terry Cervi at terry@cocpa.org.

May/June 2020 | www.cocpa.org

13

MEMBER PROFILE

Doing Good in the World: Every Gift Matters

BY NATALIE ROONEY

Growing up on the Jersey Shore, Hillary Morgridge says giving back is just what her family did. Whether it was serving lunch at a local soup kitchen with her mom, or cleaning up the beach where they lived, Morgridge’s philosophy has always been: “You should help take care of the area you love.”

T

he concept was instilled in Morgridge at a young age. “Also, being one of six girls in a family, you learn that things are better when they’re shared,” she laughs. “It was just natural.”

When it came time for Morgridge to head to college, personality tests suggested she pursue nursing, but the 2009 recession led her to consider accounting instead, “...because what could be more steady?”

“Our community stepped up and got stronger.”

In 2012, during her senior year, Hurricane Sandy slammed into the East Coast. Morgridge and her family found themselves on the receiving end of help and support from the community and nonprofit organizations after their home was flooded with four feet of water. “Going through the hurricane and seeing all of these organizations that came in to help was a big influence,” she says. “Our community stepped up and got stronger.”

HEADING WEST After Morgridge graduated from Monmouth University, she loaded up her car and headed west. “I didn’t want to work in New York City. I wanted a more manageable city,” she says. Denver was appealing. She was amazed by the mountains and had memories of visiting family in Colorado. “I could wrap my head around Denver.

You can get out of town to ski or hike for the day. It’s just so much more livable.” Plus, she wanted to find a place where she could continue to give back. “That was a connector for me.”

14

NewsAccount | May/June 2020

After arriving in Denver, she gave herself two weeks to find a job. Fortunately, she only needed about two hours; she was hired on the spot

by Mile High United Way. After a year, CFO Leslie Hannon and Senior Vice President Charlie Wright encouraged Morgridge to pursue her CPA and move into the public accounting realm to expand her career possibilities. “I told myself public accounting would be like earning my stripes,” Morgridge reflects. “I’d spend two or three years in public and then go back to nonprofits because that’s what makes me happy.”

Apparently, people who make it their life’s work to give back are drawn to other people who give back. Morgridge’s husband, John, whom she met through mutual friends, is a board member and helps manage the endowments of the Morgridge Family Foundation, which was founded by his parents. Since 2008, their Foundation has granted more than $117 million and impacted all 50 states.

“We knew when we met that we had that mutual connection of giving back,” Morgridge says.

That was six years ago. Morgridge has been with Eide Bailly LLP for the past five years and is looking forward to earning her CPA designation later this year. She works solely with nonprofits. “I get to help them with all of their tax questions and use my knowledge of nonprofits. It’s the best of both worlds and why I have stayed in public accounting and remained interested.”

MAKING A DIFFERENCE Morgridge encourages CPAs to use their skills to help others by simply reaching out to nonprofits that align with their passions. “Just going to a nonprofit, saying you’re an accountant, and asking how you can help is huge,” she says.

Many of the smaller clients Morgridge works with are nonprofits which have a founder or executive director who is passionate about what the organization does but is so busy working on programming that they don’t realize they need to file a 990 or pursue grants. Or maybe they’re being audited and don’t have the financial background to know how to prepare.

“I love being the person they call when they have an exciting opportunity, but they don’t know what to do,” Morgridge says. “My background allows me to say, ‘Great! Let’s make that happen!’ And this is all in my own community, so that’s very motivating. What the clients

“I love being the person they call when they have an exciting opportunity, but they don’t know what to do.

My background allows me to say, ‘Great! Let’s make that happen!’ do is such a push for me, too. Whether they’re working with kids who have cancer or are helping Holocaust survivors who are living below the poverty line, the goal is to make people’s lives easier. Those are huge motivators for me.”

She is currently volunteering her time with Impact 100 Metro Denver, a new organization that is 100 percent volunteer run. She is doing the bookkeeping, creating the budget, and doing the financial statements.

“I’m doing the nuts and bolts for this organization,” she says. “If an accounting student or a retired CPA sees an organization whose mission they relate to would offer to help, it would be appreciated. Every organization I’ve approached like that has said yes.”

In fact, Morgridge says her husband would be happy if she started saying no. In addition to serving as treasurer for Impact 100, she works with several boards – all in addition to her public accounting day job. “I’m a sucker,” she laughs. “Last year, Rocky Mountain Children’s Health came to me. It promotes healthy kids across Colorado’s public schools. How could I say no?”

Morgridge emphasizes that a background in nonprofit accounting isn’t necessary to help organizations in need. “You can help with bookkeeping, even if you’re not a CPA, or simply help out at events.

There are so many ways you can support a small nonprofit.”

MEANT TO BE Morgridge’s mother-in-law, Carrie, wrote the book, Every Gift Matters, and Morgridge says she’s a huge believer in that concept, whether that gift is time, money, or expertise. “Every little gift matters to our community,” she says. “Even if you don’t have money to give, your expertise is a gift.”

Ultimately, Morgridge says Denver is where she’s meant to be, and she’s doing what she was meant to do, even if it’s not the nursing career those early aptitude tests predicted.

“Late at night in tax season, when I’m working hard on a tax return for an organization that provides cold caps to help kids to try to keep their hair while going through chemo, I realize those kids have a lot bigger things to deal with than I do. I crave that human connection and being a CPA and working in public accounting means there are still so many ways to make that happen.”

May/June 2020 | www.cocpa.org

15

HUMAN RESOURCES

It’s All About Culture: One Firm’s Story

BY NATALIE ROONEY

Corporate culture. What is it, exactly? Does your organization have one? (Yes, it does, whether you realize it or not.) Over the past few years, accounting firms have been taking a hard look at culture, and many of them are making changes to tie together the corporate mission and the people who are responsible for driving the organization forward.

CULTURE. WHAT IS IT, REALLY? Search “corporate culture” online, and you’ll get a million different definitions. Generally, you’ll see something like, “the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions.” A company’s culture can be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction, and other aspects of operations.

Awareness of corporate or organizational culture emerged in the 1960s. The term “corporate culture” began to appear in the early 1980s but wasn’t used widely until the 1990s when managers, sociologists, and other academics started using it to describe the character of a company. This included generalized beliefs and behaviors, company-wide value systems, management strategies, employee communication and relations, work environment, and attitude.

By 2015, corporate culture was not only created by the founders, management, and employees of a company but also was influenced by national cultures and traditions, economic trends, international trade, company size, and products.

A CASE STUDY IN CREATING CULTURE In February 2019, KPMG US appointed its first Chief Culture Officer as part of “an intentional, deliberate, and proactive focus on the firm’s culture,” says Claudia Saran, who stepped into the position after 20 years of advising clients and leading the firm’s People and Change practice. “We wanted to create clear accountability for strengthening our culture.”

Mike Bearup, CPA, managing partner for KPMG Denver, says Saran is passionate about corporate culture and how it drives strategy. ““I have worked with Claudia in her previous role as leader of our People and Change 16

NewsAccount | May/June 2020

practice. There’s no one who understands the connection between culture and strategy better than Claudia.”

What does that focus on culture and values look like at KPMG? “It’s the palpable and predominant behaviors and mindsets at KPMG and equates to what’s best about our organization,” Saran says. “We want there to be consistency. Culture is what you feel when you talk with a company’s people, when you walk in and experience its facilities and its leadership. It’s a vibe and energy that tells you it’s nice to be affiliated and working with that organization.”

Breaking it down to the simplest terms, Saran adds, “For us at KPMG, and for any organization thinking about its culture, it’s about how we get things done around here.”

Why is culture top of mind today? “We think of it first and foremost as something that’s unique to an organization – its DNA, something others can’t replicate,” Saran says.

“There’s this thought that if you proactively tend to your culture and you’ve solidified those behaviors and mindsets that bring out the best in your organization, you can have a true, competitive advantage in attracting, retaining, and inspiring your people. Leaders across industries realize that this deliberate attention to culture can help them tap into some of these levers for change.”

BUILDING THE FOUNDATION As part of a global culture effort, KPMG has been giving its corporate values a new look.

While the firm believed its previously established values were philosophically “on point,” leaders felt giving those values a “refresh” would make them more memorable, impactful, and simpler for employees to understand and embrace.

“These refreshed values serve as a foundation for the behaviors and mindsets we want to see thrive in our organization,” Saran explains.

KPMG’S REFRESHED VALUES • Integrity – We do what is right.

• Excellence – We never stop learning and improving.

• Courage – We think and act boldly.

• Together – We respect each other and draw strength from our differences.

• For Better – We do what matters.

TEAM EFFORT Saran encourages any organization working on its culture and values to focus from both the top down and the bottom up. “This process can’t be exclusively a leader’s top-down initiative, especially for an organization like KPMG US that has 35,000 people,” she says.

“Culture is people, their behaviors, and mindsets. You need people’s fingerprints on it. We wanted to tap into our organization and give our people a voice.”

To that end, last year KPMG launched the CCN (Culture Champions Network), a firmwide volunteer network that meets virtually across the U.S. Employees take on their CCN role in addition to their day jobs. The CCN members sign up to “be the change,” activate change locally within their teams, and provide feedback and ideas for the firm’s culture efforts, The CCN is a highly diverse group that includes individuals from levels and areas of the practice across the U.S. During regular virtual meetings, feedback is collected through interactive voting where different ideas are considered. CCN members can vote on which ideas they want to put their time and effort

behind. “It’s a great feedback channel and reality check for us to understand where to focus our efforts for maximum benefit and what the CCN members think will be most successful.”

areas as the firm’s recruiting, onboarding, milestone training, and performance development processes. “We want to take this positive momentum and bring new life to our key employee-impacting processes,” Saran adds.

And just in case KPMG leadership wondered if the CCN were really going to make an impact, statistics helped. Research shows that the prevailing opinion of the majority population can be rapidly affected by a small fraction (10 percent) of committed resources who believe in and reinforce the new opinion. Recently, KPMG hit that milestone: Over 10 percent of its employee base is now a part of the CCN in local offices – enough to make lasting change happen.

Another benefit is the CCN’s continued growth. “We saw that as a big win and a positive indicator that we can make great progress going forward,” Saran says.

TANGIBLE RESULTS Saran says the biggest outcome of the values refresh so far has been tangible change. “We received very positive feedback in the postlaunch surveys we conducted,” she says. “The results demonstrate that people are feeling more inspired, engaged, and connected to our values.” The information will be used in such

Denver team. His focus is on taking the topdown/bottom-up approach and making it “real” for the Denver office.

“Culture is about the behaviors and mindsets that really happen, at a local level, in the moment, with our team interaction,” Eisenberg says. He credits Bearup for driving the top-down approach in Denver. “This is largely about retelling the message and making sure

Locally, Eisenberg says they have seen an uptick in positive comments such as team members letting leadership know about the outstanding efforts of their peers.

LOCAL IMPACT Ben Eisenberg, Manager of Strategic Initiatives for KPMG Denver, has been key to implementing the culture initiatives for the

Mike is speaking the language of the values and our culture vision, “Heads Up Thinking.”

That might be telling stories when he sees those values play out and might include interCONTINUED ON PAGE 18

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. ®

Hank Windhorst, CPA, CGMA Financial Planning Consultant, Chick-fil-A Corporate

© 2017 Association of International Certified Professional Accountants.

All rights reserved. 23169D -326

May/June 2020 | www.cocpa.org

17

HUMAN RESOURCES CONTINUED FROM PAGE 17 actions with everyone from senior leaders to breakfasts with entry level staff. They’re stories everyone can relate to. Mike and our partner group talk about how we’re living our values and how we see those play out. Then we celebrate the efforts.”

For the bottom-up part, Eisenberg says they turned to the local CCN team members who were the face of the refreshed values as they were launched. Employees could see and hear that the message was coming from their CCN representatives as well as from firm leaders.

The Denver office hosted in-person watch parties led by the local CCN team as the values were launched via video.

“There’s a groundswell of excitement for where the firm is heading,” Eisenberg says.

“After the launch, we had a dialogue with our local CCN leaders and our people to discuss what this means to us and how it resonates personally and professionally.”

BUILDING A POSITIVE CULTURE Saran has a few suggestions for organizations that are either trying to build or change their culture. Her advice stems from her 25 years of experience, not only helping to instill KPMG’s culture on the home front but also consulting with the firm’s clients. “Companies looking for refinements in their culture want behaviors and a mindset that demonstrate the best in their organizations,” she says.

Rather than the refreshed values being just an abstract concept, Eisenberg is working to make sure the values are a part of team members’ daily lives. “We’re thinking about, talking about, and highlighting what is already happening as a part of our framework and heads up thinking,” he says.

The day-to-day efforts to incorporate the refreshed values also include other in-office teams such as inclusion and diversity, community impact, and living green groups.

“We’re asking them to think about what they’re already doing and to push forward in ways that create an awareness of living these values as a part of what we do every day.”

Locally, Eisenberg says they have seen an uptick in positive comments such as team members letting leadership know about the outstanding efforts of their peers. “We’re hearing these stories over and over, and they help build the momentum,” he says.

BUY-IN AT THE TOP Saran says she fields a lot of questions about her role as chief culture officer and the role she plays at KPMG. “It’s really about wanting to be intentional, deliberate, and proactive in refining and improving our culture,” she says.

“We have and continue to put a lot of effort into our culture as a firm. It’s a huge priority for us. I sit on our firm’s management committee, and I report to our chairman and CEO. That speaks volumes about the importance of culture to KPMG.”

18

NewsAccount | May/June 2020

1. Top Down + Bottom Up = Success If you’re working to improve your culture, make sure it’s both top down and bottom up. “You have to engage and ensure senior leaders are genuinely committed to serving as role models, or it won’t be taken seriously,” she says. “If it’s top down only and there’s no broad engagement, it won’t be successful. Whatever your size or makeup, make sure you’re tapping into senior leaders and the employee base itself.”

2. Know Your Culture NOW Before you start, Saran says it’s imperative to know and understand your culture as it is today. Then, know what you’d like it to look like in the future. “What’s your vision?” she asks. “Without being grounded in your cultural strengths that you want to leverage or knowing what you want to improve and refine, you’re lost. Be able to paint a picture of the culture you aspire to. Hopefully, it’s inspiring and motivating for people.”

3. Measuring Progress Be prepared to spend time aligning how you’ll measure progress. “Culture measurement is a field in and of itself,” Saran says. “We’ve put a lot of smart minds on this topic in terms of knowing what our vision is, what actions we want to take, and how we’re going to measure forward progress.”

Today’s environment offers the ability to look beyond survey data and key performance indicators, she adds. Thanks to the unfiltered world of social media, you can see everyone’s sentiment almost instantaneously. “Take the time to think through how you’ll measure progress and the actions you’ll take to get there,” Saran advises.

Working together to make a

difference 40TH ANNUAL

NOT-FOR-PROFIT CONFERENCE May 19, 2020 • Webcast or Denver* • CPE: 8.0 * In-person event is contingent on restrictions on public gatherings

Register at COCPA.ORG/NOTFORPROFIT

Understand the technology that is here today that will reshape tomorrow

29

JULY

ONLINE • CPE: 4.0

Register today at COCPA.ORG/TECHNOLOGYTRENDS May/June 2020 | www.cocpa.org

19

RECRUITING STRATEGIES

Help Wanted: Public Accounting Firms Still Look to College Campuses

BY NATALIE ROONEY

On-campus recruiting programs continue to be one of the most popular ways for accounting firms to connect with students, but technology is changing the way it’s all playing out. And, the novel coronavirus, COVID-19, has had an impact, too.

C

OCPA Chair Sharon Lassar, Ph.D., CPA (Florida), the John J. Gilbert Professor and Director of the University of Denver’s (DU) School of Accountancy says the school’s on-campus recruiting program is more active than ever. “The search for talent across all industries is such that more companies are focused on campus recruiting,” she says. She was recently contacted by a public accounting firm that has never before employed a campus recruiter but has now hired one. “Campus recruiting is up.”

Bob Kumagai, DU’s Daniels College of Business executive director of career services, says campus recruiting remains a productive way for Big Four firms, along with larger regional and national firms, to recruit. “The Big Four have been doing it for years, and we’ve been told they will continue to do so.”

20

NewsAccount | May/June 2020

Kumagai says that while other industries also actively recruit on campus, few companies recruit as accounting firms do - they’re known to hire up to 30 students at a time out of multiple programs. In comparison, if non-accounting firms hire three students from the same graduating class, it’s considered a lot.

“Overall, the job market has been really positive for students,” Kumagai says, but he notes that employers don’t like the uncertainty that COVID-19 has brought. “There’s a lot of sand in the gears right now. The easiest thing for employers to do will be to press pause. We’re seeing some disruption from that.”

FROM FALL TO FULL TIME Lauren Lilly, a campus recruiter for EY since 2015, says college campuses continue to play

a crucial role in the firm’s recruiting efforts.

“Campus recruiting is a huge pipeline into the firm,” Lilly says.

Firms used to focus their campus recruiting efforts on the fall semester, but the last few years have brought a pronounced shift in that strategy. Lilly describes EY’s campus recruiting process as a year-round effort that encompasses events, conferences, virtual networking, and employee referrals. “Whatever avenue we meet students through, it’s a fluid, year-round process,” she says.

Kumagai says he sees accounting and financial services firms changing their practices with internships and identifying top accounting students earlier, before they begin a graduate program. “Firms are talking to students in their junior and even sophomore years, trying to get that mindshare

with top students,” he says. Firms invite students for office tours or summer boot camps and super days, a practice Kumagai says financial services companies have traditionally used. “The financial services industry has started trying to identify prospective candidates by the first semester of the sophomore year,” he says. “At that point, students have barely figured out how to be proto-adults, and investment banking and wealth management companies are asking them to work in New York in three years.

That’s how competitive it is.”

Lassar says firms attend Beta Alpha Psi meetings, hold meet and greets, lunch and learns, and meet the firms events, and attend campus-wide career fairs. Some firms reserve study rooms on campus and hold office hours to review students’ resumes and cover letters.

“The accounting firms really pioneered that office hours strategy,” she says.

At EY, Lilly says the entire timeline to identify prospective students has been pushed with conversations beginning early. “We’re talking to students in the spring a year in advance of internships and two years before graduation about full-time jobs.”

Spring and summer internships play a huge role. Lilly says EY is always hopeful that internships will lead to full-time employment. “We take the hiring for internships very seriously.

Once they’re with us, we make sure they’re learning, getting feedback, having quality experiences with clients, and training so they feel confident starting a career here and transitioning into a staff role.”

Lilly says while recruiting still takes place in the fall, now the fall season tends to be used to fill any gaps that spring recruiting didn’t fill. Fall also is a time for EY’s early identification strategy which means talking to first years and sophomores to encourage interest in an accounting career. This early outreach also allows EY to seek a more diverse candidate pool.

Kumagai adds that the seasonal shift has created space for smaller and regional firms to recruit students who might have missed some of the early round activities.

The types of candidates and educational profiles EY is looking for continue to evolve along with the timing. “We always have a need for the traditional business backgrounds, but we’re also looking for candidates with these new, future-focused skill sets such as data analytics, robotics, cyber security, and blockchain,” Lilly says.

CONNECTING IN THE 2020S Today, student recruits are likely to have their first round of screening interviews via a video platform. “Firms are experimenting with their footprint on campus,” Kumagai says. While firms may still send a big team to a campus to host a pizza party for students, they are examining the cost benefit of such activities. “All companies are looking at the frequency and modality of being on campus.”

Even before COVID-19, and now especially because of it, companies are choosing to do more activities virtually to reduce travel. Kumagai says this digital outreach not only helps with diversity by extending companies’ reach, but it also continues to help them be more efficient. Rather than visiting six or seven campuses to find potential recruits – a self-limiting strategy – they can find a more diverse group,

important role in helping companies connect with top talent.

“Recruiters have found that having their virtual door wide open invites in a lot of people they don’t necessarily want. And, it creates a more difficult winnowing process to identify the appropriate students who have the skill sets and training to do the job,” Kumagai says. “We help identify those students and bridge the contact. We still are a necessary intermediary for recruiters and employers, but our role is changing. It’s less about being the sole source of applicants and more about being the best source in terms of the quality of candidates that recruiters can find.”

Kumagai says it’s too early to tell the impact that COVID-19 will have on campus hiring across the board. The Daniels College of Business has one of the best hospitality

Digital outreach not only helps with diversity by extending companies’ reach, but it also continues to help them be more efficient. interview them online, and then invite them to the office. “It’s a more productive way to recruit than sending employees out to multiple campuses,” he says.

DU has set up a room on campus for students to practice for their virtual interviews. The dedicated space is quiet, and the internet connection is reliable – no need to worry about loud roommates or a technological failure. Special software helps them time their interview questions and answers, so they learn to answer succinctly. “They can play back the videos and see how they come across,” Lassar says.

EY has been leveraging digital interviews to provide candidates with a more comfortable, flexible experience. Lilly says the process has eliminated much of the administrative back and forth time. “It’s a much more efficient process,” she says. “We’re getting good feedback from the candidates. They like the flexibility. They not only get to prepare better, take time to reflect, and show their resume, but also to show themselves beyond that traditional resume. The changing technology is becoming more important.”

THE FUTURE OF CAMPUS RECRUITING While it may seem that campus recruiting offices are becoming obsolete thanks to the internet, offices like Kumagai’s still play an

schools in the country, training hundreds of new graduates to work in the hotel and lodging industry each year. “We typically have 100 percent placement for those programs,” he says. “Firms are taking a wait and see approach. We’re not seeing all internships or offers being pulled yet, but employers may tap the brakes and slow the process. Every company is trying to figure it out.”

Lassar says looking ahead, the battle for top talent in the accounting profession will continue to be tough, especially when you look at the number of potential students coming into the pipeline. She refers to the “2025 cliff” looming ahead, a result of the 2007-2008 recession. “Typically, when an economy recovers, people have babies. But this time, they didn’t,” she says. “Now we’re already seeing declining enrollments, and that trend doesn’t recover quickly. The war for talent will be phenomenal. It’s tough now, and it’s going to get tougher.”

The good news for accounting students is this: Under normal circumstances, if they want a job, they’ve got one. “For us in the School of Accountancy, placement is close to 100 percent,” Lassar says. “There might be some students who aren’t looking for whatever reason, but traditionally, any accounting major who wants a job can find one.”

May/June 2020 | www.cocpa.org

21

STRATEGY

Go Opposite in the Face of Uncertainty

BY DANIEL BURRUS, CEO, BURRUS RESEARCH

A

s COVID-19 uncertainty spreads around the world at an exponential pace, the global community is finding out that reacting quickly to the societal and economic disruptions the virus creates, no matter how agile a reactor you are, is not good enough and quite frankly, is simply not working.

With disruptive changes moving so fast, everything seems to be uncertain, and that uncertainty can cause us all to “wait and see,” which is the exact opposite of what we should be doing now. The only way individuals, entrepreneurs, business, and government leaders can get ahead of the spread of the virus, and get control of its speed and devastating impact, is to stop focusing on reacting quickly, or “pivoting,” as some have called it, and start becoming anticipatory by separating the Hard Trends that will happen from the Soft Trends that might happen and can be changed.

You cannot change a Hard Trend, but you can see it coming, and by knowing what will happen before it happens, you can create strategies to take advantage of that trend, giving you certainty and the confidence to make bold moves as you move ahead. Another major advantage of Hard Trends is that they allow you to identify the problems that are ahead and solve them before they occur.

PANDEMIC UNCERTAINTY PROBLEM The coronavirus pandemic has leveled the playing field. The exponential uncertainty it brings with it has forced increasing numbers of people to live day-by-day as they try to protect what they have in an effort to combat what might happen as this highly unusual year unfolds.

However, it is important to note that the exponential spread of COVID-19 as it doubles every so many days is a Soft Trend, meaning that the exponential spread can be changed!

Anticipatory government and business leaders saw the predictable exponential spread of the virus and the potential human and economic impact. They realized it was a Soft

22

NewsAccount | May/June 2020

Trend that could be changed and took action to slow and eventually stop the spread by closing nonessential businesses and implementing strong social distancing measures in order to flatten the curve, save countless lives, and save millions, billions, and even trillions of dollars.

As we lock down, work remotely, and do our best to remain healthy and safe, realize that everyone is hurting and with that, there are enormous new ways to make a bigger difference as you simultaneously grow your business.

So how do you innovate when everyone’s mindset is to wait out the storm? You Go

ready for the identifiable certainty that the pandemic will end.

Many might think that having a wait and see approach is less stressful, but the opposite is true. As you wait, you will see others moving ahead, intuitively knowing that while others are moving ahead, you’re falling behind. The stress of waiting for months will mount, making it harder to start moving again.

I’m sure you have heard the old saying: “An object at rest tends to stay at rest, while an object in motion tends to stay in motion.”

Admittedly, it’s hard to move forward when you can’t see ahead. That’s why you should start with the opposite; observe what you

As we lock down, work remotely, and do our best to remain healthy and safe, realize that everyone is hurting and with that, there are enormous new ways to make a bigger difference as you simultaneously grow your business.

Opposite; take the road less traveled to take your organization from success to significance and turn this pandemic disruption into opportunity.

GOING OPPOSITE I’ve written about this anticipatory principle in the past. I call it the Law of Opposites. By looking for a solution to a problem or a new opportunity in the exact opposite direction from where you are currently looking, you will see amazing solutions and opportunities that were outside of your view. From a strategic standpoint, when everyone goes one way, Anticipatory Leaders often go the other and take the road less traveled.

There isn’t a better time to do this. The pandemic and lock downs already are a road less traveled, one in which many will sit on the sidelines and wait and see what will happen.

In many ways the world seems to be hitting a pause button as the vast majority goes into a hold position. By doing so, they will not be

can see instead of focusing on what you can’t see. Instead of looking at all the things you aren’t certain about, ask yourself: What are you certain about? Instead of looking at all the things you can’t do, ask yourself: What can you do now? Why not do the opposite while everyone else sits and waits?

REDEFINE AND REINVENT EVERYTHING This is the perfect time to redefine and reinvent what you do and how you do it. Redefining and reinventing are core principles of Anticipatory Leaders, and as we see, current systems, such as how we deliver healthcare and the global supply chain, buckle under the load. The fault lines in our systems become highly visible, and the systems become ripe for reinvention.

The fact is that every system is ripe for reinvention, and the best time to do it is now. When times are good, transformational change can be put off, but when the world and everyone in it is hurting, people are

much more open to new, innovative ideas.

It’s time to double down on redefining and reinventing your products, services, and customer experiences before someone else does. And if you do this while helping others through the crisis, you will find a lot more help along the way.

FOCUS ON BECOMING A POSITIVE DISRUPTOR The news, which has been quite dark lately, is focused on the virus, what it has done, and is doing. It’s imperative to look beyond the news and to look ahead at what we do know.

Consider becoming a positive disruptor, creating the transformations that need to happen to make the future better for everyone. This is not as hard as it seems, because perfection is impossible; everything can be improved. Everything has facets to it that can be changed for the better. A positive disruptor has the power to unite people and help humankind move forward in a positive and productive way.

A NEW BEGINNING In this new year, new decade, and global pandemic, where do you start? It’s simple: Find certainty by identifying the Hard Trends that will happen and the related opportunities to move forward. Remember, trends by themselves do not have power until you attach them to an opportunity, which is when they burst into actionable light. And positive disruptors use Soft Trends to their advantage, because they can change them if they’re undesirable.

When everyone is stuck in one mindset, Go Opposite. If you anticipate instead of reacting, redefine and reinvent instead of waiting, move forward instead of standing still, and focus on significance over success, you will put yourself and your organization much further ahead than ever before.

In this time of unprecedented uncertainty, actively shaping your future by becoming an Anticipatory Leader has never been more important.

Daniel Burrus is considered one of the World’s Leading Technology Futurists on Global Trends and Innovation and is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology-driven trends to help clients understand how technological, social, and business forces are converging to create enormous untapped opportunities. He is the author of seven books including the newest, The Anticipatory Organization: Turn Disruption and Change Into Opportunity and Advantage. Burrus also is the creator of The Anticipatory Organization™ Learning System–named a Top 10 Product of 2016. Contact Rebecca Campbell, rebecca@cocpa.org, for information on the program. Reprinted with permission.

2020 LeadFit 2020, sponsored by the Colorado Society of CPAs, is a program specifically for CPAs and CPA-track accounting professionals who are looking to grow professionally and personally.

APPLY AT COCPA.ORG/LEADFIT

Application Deadline: July 1, 2020 After being accepted, your sponsor will be invoiced for the $1,485 program fee. The program is recommended for 24 hours of CPE credit in the Communications field of study.

SESSION DATES Check out the 2020 dates – which you must commit to attending – and plan now to become leadership fit:

JULY 23

Welcome BBQ

JULY 24

Full Day Session

AUGUST 21

Half Day Session

SEPTEMBER 18

Half Day Session

NOVEMBER 6

Full Day Session and Graduation Celebration

May/June 2020 | www.cocpa.org

23

MOVERS & SHAKERS SHEILA M. BALZER, CPA, CGMA Sheila M. Balzer, CPA, CGMA, SingerLewak LLP, Denver, was appointed to the Association of International Certified Professional Accountants Audit and Financial Committee for its 2021 fiscal year.

Careers At ACM, we work hard, play hard, and greet each day with optimism. This commitment is shared by each and every member of our firm – and it’s why we’ve been consistently recognized as one of the best accounting firms to work for in Colorado and across the nation.

JEFF M. WILSON, CPA Jeff M. Wilson, CPA, Dalby Wendland & Co., P.C., Grand Junction, earned the Certified Construction Industry Financial Professional (CCIFP ® ) designation from the Institute of Certified Construction Industry Financial Professionals.

“ACM is a family. It’s an amazing group of people who bring their best to the table each and every day.”

- melissa k. hooley, partner-in-charge, employee benefit plan services

“ACM encourages each employee to take on new challenges and grow professionally – all while being able to maintain a quality family life.

ASHLEE WHELAN COCPA CPE Meetings and Marketing Coordinator Ashlee Whelan, CMP (first row, left), relocated to New Jersey, where she continues to work with the COCPA team remotely.

-

dennis tschacher, partner

“I love working at ACM because we’re given opportunity for personal and professional growth.

You can pick your own path and your own pace.”

-

tim stueven, audit director

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

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

24

Explore your opportunities at aicpa.org/aicpacredentials.

NewsAccount | May/June 2020

IN MEMORIAM We extend our sympathy to the families and friends of the following COCPA members:

THANK YOU TAXLINE9 VOLUNTEERS

Edward B. Cordes Member since 1995, Greenwood Village, Colorado Alfred L. Draney Member since 1961, Colorado Springs, Colorado C. Timothy Chavies Member since 1973, Greeley, Colorado Sam S. Sloven Member since 1967, Aurora, Colorado

CLASSIFIEDS PRACTICES FOR SALE, PURCHASE, OR MERGER Selling your firm is complex! ACCOUNTING BIZ BROKERS can help!

We have been selling CPA firms for over 15 years, and we know how to simplify the process. We have a large database of active buyers.

We work with industry specific lenders ready to assist buyers with financing. Contact us today to receive a free market analysis or to start the sales process. Current Listings: Mesa County Gross $113k; Denver (Central) Gross $500k; Central Mountains CPA Firm Gross $123k; Arvada Gross $156k (Sold!). 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 sole practitioners who are looking to merge, acquire, or sell their practices to other CPA firms. Locations are in the Metro Denver, Boulder, Colorado Springs 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.

On March 3, COCPA members Mira Finé, Larry Fike, and Anna Overlee answered callers’ questions.

COCPA members Greg Truitt, Brenda Clarke, and Dave Taylor answered callers’ questions on March 10.

2020 C-Suite Awards

Nomination Deadline: June 15, 2020 Do you know a C-suite executive who inspires you? Is he or she a shining example of how to run and manage a company?

Is there a deal that went through this year that caught your eye?

Denver Business Journal will honor outstanding C-level executives for their invaluable contributions to the Denver region at a celebratory awards dinner on September 10 at the Hyatt Regency Denver Convention Center. The winners will be profiled in a special section in DBJ’s Sept. 11, 2020 edition.

Submit your nomination at bit.ly/DBJ-C-Suite

May/June 2020 | www.cocpa.org

25

Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111-6076

Periodicals Postage

Time To Sell?

Delivering Results One Practice At a time

Bill Anecelle, CPA, MBA Sr.Practice Transition Consultant (303) 670-3623 Bill@atp4s.com

Kevin Overberg, CPA/PFS, CFP Practice Transition Consultant (720) 988-4334 Kevin@atp4s.com

800-859-8250

www.APS.net