2019 07 CPAConnections newsletter

TechTimes CPAConnections

News From Your Association Leaders

Summer 2019

Getting to Know CPAConnect’s 2019 Advisory Committee CPAConnections would like to help you get acquainted with the members of the 2019 Advisory Committee. This committee is made up of a collection of individuals who bring their unique knowledge of the accounting profession to more effectively guide CPAConnect.

CPAConnect members represent some of the best and brightest that the financial Thomas Mangold industry has to offer.

They all have a shared commitment to the alliance and form a unique sharing and improvement culture.

We start with Thomas J. Mangold of The

PC, located in Austin, Texas. He is leading the advisory committee this year as chair. He succeeds Erin Anker of the firm , based in Austin, Texas, in the position. Anker will remain on the committee serving in Erin Anker the immediate past chair role. Stepping into their new part as vice chair in 2019 is Philip M. Juravel of , located in Alpharetta, Ga. The remaining 2019 Advisory Committee positions are made up of the following CPAConnect members: Horace Gordon, sole shareholder of

and principal of Gordon & Associates, Financial Advisors, Inc., of Tampa, Fla. Gordon will finish his time on the board at the end of this year.

Kathy Lyle, leading partner of , based in Chagrin Falls, Ohio. Lyle is in her second year on the committee.

Jeff Rozovics, partner at , based in Park Ridge, Ill. Rozovics is in his second year on the committee.

Kevin Matthews, leading partner, owner, and CEO of CPA, LLC, located in Reston, Va. Matthews is currently in his second year on the committee.

Delanna Rhoton, co-leading partner of , headquartered in Winchester, Tenn.

See Advisory Committee continued on page 2

Technology Overview with Randy Johnston: Protect Your Clients by Being Proactive on Cyberfraud Computer security has been an area of concern for over a decade. Cyberfraud is frequently a consequence of security breaches. Your clients expect you as their professional CPA firm to protect any information you have in your possession.

Further, it is likely that their expectation is that you provide guidance on protecting them from fraud of all kinds.

This type of engagement can be a great extension to your audit services, and the client will receive much value from a cyberfraud engagement.

But first, a few fundamentals. While fraud is costing American businesses billions of dollars each year, ease of access to information using the

computer has made the problem more widespread. The breadth and depth of fraud in the U.S. is documented in the Association of Certified Fraud Examiners (ACFE) biennial report. Their findings clearly demonstrate a need for more efficient and effective techniques for preventing and detecting fraud, which continues to drain profits and productivity from the U.S. economy.

What Are the Top Cyberfraud Opportunities?

The ACFE defines occupational fraud as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources

or assets.”

These frauds have four common characteristics: • The activities are clandestine.

• The activities violate the perpetrator’s fiduciary responsibilities and positions of trust within the employing organization.

• The activities are committed for personal enrichment, either directly or indirectly.

• The activities exact a cost on the employing organization.

Based on the estimates reported in

See Cyberfraud, continued on page 2

Advisory Committee, continued from front page This is Rhoton’s third year on the committee.

The advisory committee is rounded out by , Michael J. Noonan, with located in Joliet, Ill., remaining on the committee

Philip Juravel

Horace Gordon

Kathy Lyle

Kevin Matthews

Delanna Rhoton

as member emeritus. Bob McGowan managing partner with CPAmerica firm Michael Noonan

Bob McGowan

, headquartered in West Des Moines, Iowa. He will continue to serve in the role of CPAmerica board liaison.

Contact D’Yan Davis at ddavis@cpamerica.org if you would like to participate on the CPAConnect Advisory Committee.

Cyberfraud, continued from front page the “ACFE Report to the Nations on Occupational Fraud and Abuse,” occupational fraud costs organizations 5 percent of their annual revenues, or about $3.7 trillion worldwide. The average loss amounts to $150,000 per instance, with 23 percent of all fraud losses exceeding $1 million. Small businesses are disproportionally affected, both in incidence of fraud and in losses relative to earnings. Fraud schemes lasted a median of 18 months before discovery, with 32 percent lasting 24 months or more. More than 75 percent of frauds are committed within one of seven key departments – accounting, operations, sales, executive management, customer service, purchasing, and finance – with perpetrators in the accounting department responsible for more than 16 percent of all frauds committed.

Occupational fraud falls into three broad categories: 1) 2

misappropriation of assets, 2) corruption, and 3) financial statement fraud. In the ACFE report, misappropriation of assets was the leading source of fraud, representing 83 percent of cases, but it was also the least costly, causing a median loss of $125,000. Financial statement fraud was the most costly with a median loss of more than $975,000, but it made up less than 10 percent of the frauds identified in the report. Corruption schemes fell in the middle, comprising just under 35 percent of cases and causing a median loss of $200,000.

So, How Do Computers Give Bad Actors More Potential Tools to Use for Cyberfraud Today?

Let’s keep this simple. Bad actors are looking for ways to make big money quickly. One of the easiest ways is to gain access to business bank accounts that are not secured properly.

Transfer of business funds to offshore accounts can provide for a quick, large win. Over the last five years, CPAs have routinely reported six and seven figure amounts transferred via ACH or Swift transfers from bank accounts. What are the easiest ways to prevent this type of access? First, turning on multi-factor authentication (MFA) at your bank is a great start. Further, changing passwords frequently is another control mechanism.

Additionally, you can limit the dollar value of transfers that can be made without an additional (usually verbal) confirmation.

Bad actors are patient. While a stolen credit card can lose its value relatively quickly, a bank account is relatively static.

Bank account information as well as user IDs and passwords are routinely stolen and the accounts don’t have to be used right away. We just don’t change banks and account numbers that often. If your clients don’t have a method of changing passwords frequently, these accounts are at greater risk. One of the recommendations that you can make is to use a password manager that also has MFA. Examples of these products include: LastPass Enterprise, RoboForm, Dashlane and Zoho Vault. You can also suggest checking bank balances daily since the Fed can sometimes block transfers within 48 hours.

Additional security recommendations for clients can also include fundamentals like: a business grade firewall that is maintained and updated routinely, encryption everywhere including on local drives; servers and USB sticks; MFA – which is almost a universal recommendation; policies for changing passwords; data loss prevention; breach reporting; and many other areas with samples available from SANS.org.

Remember that the ACFE guidance shows that much cyberfraud is committed by trusted employees, often with 10-plus years of experience and who have access to financial systems. Frequently they are put in a bad spot by family financial obligations or expensive habits, like gambling. You’ll need to have controls in place to detect bad actors on the inside of the organization, too.

And We Are Not Done Yet… Remote access increases risk for your clients. It doesn’t matter whether they are fully in the cloud with SaaS products, hosted with a secure provider, using a private cloud, or using big brand names like Apple, Microsoft, Dropbox or Box.net. Bad actors know that files stored in the cloud frequently have information and insights that can allow them to make educated guesses at how to break into clients’ computer systems. Bad actors have been infecting these data storage locations with malware, too.

Cyberfraud, continued on page 3

Ahh, Memphis!

Come to the 2019 CPAConnect Roundtable

Being held this year in Memphis, Tennessee (the “Home of the Blues”), on Oct. 27-30 at the historic and elegant Peabody Memphis.

CPAConnect members can call the hotel at: 1-800-PEABODY and reference “CPAConnect” to receive the group rate of $219/ night plus tax (this rate will only be available until Oct. 4, 2019, at 5 p.m. CT). You can also make your reservation on The Peabody Memphis website: www.peabodymemphis.com Here’s a testimonial from longtime CPAConnect member, Rozovics, leading partner at ROZOVICS GROUP, P.C.: “I have attended every CPAConnect Roundtable since 2005. Over the years, I have met numerous insightful practitioners from around the country. I have been able to take back many ideas from the roundtable and implement them into our practice.

Cyberfraud, continued from page 2 Further, malware such as viruses, keyloggers or ransomware (e.g., CryptoWALL and many others) will provide access to IT systems by reporting user IDs and passwords, charge a ransom to restore access to files, or by providing a pathway into the end users’ systems. Running up to date anti-virus software is mandatory for minimal protection. Many of these malware programs are planted via email including both attachments and links, as well as infections from websites. There are tools such as KnowBe4 and DUO that can provide management guidance on user behavior showing who is prone to open and act on malicious email or websites. The tools are quite accurate, plus they can help drive up awareness among users and management of potential attacks.

Consider whether you could provide an engagement to document, detect and provide guidance on minimizing the exposure to many of these items. You can also improve your own firm’s cyberfraud position while providing guidance to clients on potential missteps.

About the author: Randy Johnston is a shareholder and CEO of Network Management Group, Inc. (NMGI), that provides technical support for CPAmerica and CPAConnect firms as well as: guidance on sharing calls; at events; and in direct phone consultations. Contact NMGI by email: helpdesk@nmgi.com or call: (620) 664-6000.

“I always look forward to the roundtable since the locations are always interesting, the speakers are relevant to my practice and most of all, the networking with other CPAConnect members is invaluable to my practice. I look forward to attending many more CPAConnect roundtables in the future.”

This annual conference focuses on Practice Growth and Management. So come to Memphis, earn CPEs, listen to great speakers, and reconnect with your peers!

CPAConnect members are elegible to attend several CPAmerica events key areas CPAConnect’s alliance with CPAmerica has its perks - one of these is having access to several niche members-only events.

Coming up this Nov. 6-7, the CPAmerica Valuation & Litigation Services Meeting opens at Caesars Palace in Las Vegas with its focus on the most recent developments in Business Valuation and Litigation Support.

Also available for CPAConnect members will be the CPAmerica Tax Conference, which meets on Nov. 10-13 at The Westin Austin Downtown in Austin, Texas. Its focus will be on the most recent developments in the area of Tax. On Nov. 13-14, you can choose the Client Accounting Services Meeting taking place in Austin, Texas, also at The Westin Austin

Log in on the www.cpaconnect.com Preferred Provider page for more information on SurePrep using this link: http://tinyurl.com/y6j53ssw SurePrep delivers seamless integration with your existing tax software to automate and streamline the entire 1040 process for both the taxpayer and tax professional.

SurePrep is the leader in 1040 tax automation for CPA firms. We provide innovative, comprehensive, and productive 1040 tax automation solutions that include scan and populate with an optional OCR verification service, outsourcing and a two-time award-winning mobile solution that eliminates the paper organizer. Our solutions are utilized by nearly 20,000 tax professionals at CPA firms large and small, ranging across the spectrum from Big 4 firms to sole practitioners.

For additional information, contact Vice President of Marketing Greg Pope at: gpope@sureprep.com (800) 805-8582 ext. 2800 or visit sureprep.com

CPAmerica Events, continued on page 4 3

Member Spotlight Please feel free to welcome your fellow members to our association with an email or call.

edonovan@cpaconnect.com

Improving Through Sharing.

Weikel, Johnson, Parris & Rouse, PLLP (WJPR)

Edward P. Cooper, CPA, PC

5416 South Yale Avenue, Suite 402 Tulsa, Oklahoma Phone: (918) 744-9657 Fax: (918) 744-9669

P.O. Box 470741 Charlotte, North Carolina 28247 Phone: (704) 541-1363 Fax: (704) 341-2097

Gary Rouse - Leading Partner Email: grouse@wjpr-cpa.com Diana L. Johnson - Partner Email: djohnson@wjpr-cpa.com Brian D. Parris - Partner Email: bparris@wjpr-cpa.com

Edward P. Cooper - Leading Partner Email: coopercpa@carolina.rr.com

Website: www.wjpr-cpa.com

Montgomery & Company, PLLC

Hartman, Blitch & Gartside, CPAs, LLC

Phone: (248) 557-2881 Fax: (248) 557-8726

4929 Atlantic Blvd.

Jacksonville, Florida 32207 Phone: (904) 396-9802 ext. 315 Fax: (904) 396-1528

Harold Montgomery - Managing Partner Email: harold@montgomeryco.biz

Adam M. Robinson - Managing Partner Email: adam@hbgcpa.com

Website: www.charlotte-cpa.com

Website: www.montgomeryco.biz

Website: www.hbgcpa.com

Sponsor Firm: None

Sponsor Firm: Brickley DeLong (Virtual sponsorship)

Sponsor Firm: None

Sponsor Firm: None

Resolve To Flex Your Marketing Muscles

By Steve Kaufman & Lisa Pappas, SJK•PR Whether we vow to cut back on those tempting potato chips, improve our core strength, or swear off credit card debt, resolutions usually outline a laundry-list of personal improvement goals.

This year, why not also resolve to build some business muscle? Do a little heavy lifting now by building a tangible and measurable marketing communications plan, and you’ll see your business grow.

Regardless of whether you’re a sole practitioner or multi-partner practice, the plan components remain the same, comprised of five parts: • • • • •

Situational Analysis Objectives and Tactical Overview Methods Implementation Schedule Budget

As you enter the marketing gym, don’t be intimidated. But do take a good look in that full-length mirror - you think you know the current shape of your business, but when

CPAmerica Events, continued from page 3 Downtown. This meeting is intended for individuals who are tasked with the development, growth or management of CAS Finishing up 2019, members can partake of the International Group Meeting on Dec. 2-5 at the elegant Ritz-Carlton in Fort Lauderdale, Fla. The meeting will help expand your resources to identify and capture international markets.

For more information on how to attend any of these events, please contact Director of Member Services D’Yãn Davis at: ddavis@ cpamerica.org or visit www.cpaconnect. com and look under Events.

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you actually create a written plan, you’ll consider issues more deliberately, even those muscle groups you once neglected or ignored.

Use the situational analysis to stretch with thorough, even strenuous, flexibility exercises. Evaluate where you are and where you’re going while considering your strengths and weaknesses, challenges and opportunities.

But don’t over-exert or you’ll stop coming to the gym! Don’t use your situation to create a plan so ambitious and overwhelming that you never touch it. Keep your long-term goals in sight, but write a three-to-six month plan (which you update regularly) for results you can track and respond to.

Next you must set goals for your new exercise regimen. Assess your image, competitive advantages, and target market(s) reach, along with specific growth and/or sustainment goals.

This assessment may be challenging - if you’re not breaking a sweat by now, you will be soon.

Assessing is the first step to changing and improving. Writing the objectives and tactical overview section of your plan forces you to prioritize your goals and commit to a tactical framework.

You’re now approaching the equivalent of a runner’s high with your marketing plan progress: use the first two sections to propel yourself over the finish line by deciding the methods you will employ.

For instance, focusing on a new market segment likely requires some direct mail, while raising your reputation among business media and colleagues involves sustained media relations and probably some guest speaking and/or writing. Just make certain the methods you choose lead to achieving the objectives set.

Ready to rally to the finish? Narrow those broad methods to specific tactics and enter

them into an implementation schedule or detailed monthly timeline. This step involves not only specific scheduling, but also determining your budget.

For many small- and medium-sized businesses, the budget often dictates some of the schedule - and that’s okay! Your plan may take longer to implement than you’d prefer due to limited marketing dollars, but you will finally hold a plan – an actual roadmap – to ensure that your unique story gets told.

In our almost 27 years in business, clients who use this process always achieve their marketing communication goals. “Always” is a great track-record, so we can assure you that your efforts in the marketing gym will strengthen and tone your brand.

Of course, just like a new exercise routine, writing and executing an effective marketing plan takes some sweat and commitment, and sometimes, even a coach. But sticking to this resolution will keep your CPA firm fit and flourishing.

Our new address is: 7555 West University Avenue Gainesville, FL 32607 P: (352) 727-4070 www.cpaconnect.com

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